TMI Blog2019 (10) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... s are concerned, apart from profit element, there will be certain capital investment also going into the purchase of said pieces of land, which would also require addition. Total income for the years under consideration to be added on the basis of the unrecorded cash receipts found during the course of search is in three parts, viz., the first, being, the maximum cash balance of ₹ 28,71,458/- and ₹ 5,64,910/- for the years in appeal; the second, being, the part of profit element of ₹ 55,06,787/- on sale of plots amounting to ₹ 8.09 crore as relating to the two years under consideration, in addition to ₹ 1,52,969/- for the A.Y.2008-09 being extra profit sustained in the first appeal; and the third, being, profit of ₹ 14.07 lakh on remaining amounts of entries at Rs. ₹ 2.07 crore in the ratio of receipts of ₹ 2.08 crore and ₹ 7.95 crore for the A.Ys. 2007-08 and 2008-09 respectively. We, therefore, set-aside the impugned orders and remit the matter to the file of AO for examining and ensuring that these three elements are duly taxed in the total income of the assessee for the years under consideration. To the extent these three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was also doing purchase and sale of lands on commission basis for third parties. During the course of assessment proceedings, the assessee produced cash book and ledger written up to the date of search and it was submitted that all the transactions and advances received and paid on account of sale and purchase of land, noted in the diaries and loose papers, were reflected in such books of account prepared after the date of search. The AO noticed that the assessee credited total cash of ₹ 10,16,66,535/- on account of cash received as per the seized documents giving the specifications of seized documents only. Name of the persons from whom cash was received were not mentioned in certain cases by the assessee in such cash book. Similarly name of persons to whom such cash was paid were also not mentioned in certain cases. Total of such cash paid over the period 01-04-2001 to 08-02-2008 was to the tune of ₹ 10,16,60,973/-. Total cash credited for the A.Y. 2007-08 stood at ₹ 2,08,43,767/- and for the A.Y. 2008-09 at ₹ 7,94,96,368/-. The AO required the assessee to substantiate the receipts of cash by supplyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been earned profit of ₹ 55,06,787/-. The ld. CIT(A) called for the remand report from the AO in respect of the details furnished by the assessee, who mainly relied on the original order passed by his predecessor except for mentioning that the AO wrongly invoked section 69A instead of section 68. The ld. CIT(A) noticed that the assessee offered total income of ₹ 55,06,787/-, being, profit from sale and purchase of lands over the period. Apart from that, he also took note of peak balance liability to be taxed. In this way, he reduced the addition to ₹ 7,17,879/- and further telescoped the addition of ₹ 5,64,910/- into such amount computed by him at ₹ 7.17 lakh and finally sustained the addition at ₹ 1,52,969/- for the A.Y. 2008-09. For the A.Y. 2007-08, the ld. CIT(A) reduced the addition to ₹ 28,71,458/- and allowed relief for the remaining amount of ₹ 1.79 crore. The Revenue is aggrieved by the reduction in the amount of additions made for the years under consideration. 4. We have heard both the sides and perused the relevant material on record. During the course of search, certain incriminating material in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok containing details of the persons from whom the assessee allegedly received cash, was unexplained. In that view of the matter, we need not examine other material found during the course of search. 5. We have gone through a copy of the cash book prepared by the assessee, which was produced by the ld. DR before us. The assessee has also produced a summarised statement of the cash book before us. On going through the cash book, it is found that the assessee has recorded certain amounts with dates mentioning the name of the persons from whom cash was received. The assessee s case is that he received cash from prospective buyers of land and thereafter negotiated with the prospective sellers with a view to earn commission income. In addition to that, there are certain transactions of cash received which did not bear any name. Such transactions will have to be presumed as done by the assessee for his own purpose. Once the assessee has purchased and sold certain pieces of land for outside customers, it is only the profit element in such transactions which can be charged to tax. If certain amount of cash is received from buyers which is then handed over to sellers, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the years under consideration. Such amount is directed to be apportioned between the two years under consideration in the ratio of unproved credit entries, for which additions have been made, that is, 2.08 : 7.95. 7. To sum up, total income for the years under consideration to be added on the basis of the unrecorded cash receipts found during the course of search is in three parts, viz., the first, being, the maximum cash balance of ₹ 28,71,458/- and ₹ 5,64,910/- for the years in appeal; the second, being, the part of profit element of ₹ 55,06,787/- on sale of plots amounting to ₹ 8.09 crore as relating to the two years under consideration, in addition to ₹ 1,52,969/- for the A.Y.2008-09 being extra profit sustained in the first appeal; and the third, being, profit of ₹ 14.07 lakh on remaining amounts of entries at Rs. ₹ 2.07 crore in the ratio of receipts of ₹ 2.08 crore and ₹ 7.95 crore for the A.Ys. 2007-08 and 2008-09 respectively. We, therefore, set-aside the impugned orders and remit the matter to the file of AO for examining and ensuring that these three elements are duly taxed in the total ..... X X X X Extracts X X X X X X X X Extracts X X X X
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