TMI Blog2021 (8) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... assbooks are not in respect of assessee s own bank account rather the accounts are third-party bank accounts. No explanation has been sought by Ld. AO from any of these persons and no enquiry whatsoever is shown to have been done in the assessment order to sustain the addition. It is trite law that no addition could be made merely on the basis of assumptions and presumptions. Hence, we are inclined to delete this addition. This ground stands allowed. Parking charges addition - Certain loose papers were seized which revealed the details of parking lot allotted by the assessee in the projects to various customers - HELD THAT:- Loose papers were merely a dumb document and nothing could be conclusively inferred upon perusal of the same. The explanation of the assessee was a plausible one and we concur that merely on the basis of this paper, the addition could not be sustained. So far as the statement of Shri Kulvinder Singh Narula is concerned, we find that he has filed another affidavit dated 21/01/2020 wherein it has been admitted by him that the earlier statement was taken under undue pressure and the fact of having paid cash towards parking was not true. Thus, the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of assessment and appeal. 3. The Appellant prays that AO be directed to delete the addition amounting to ₹ 10,50,000/- Without prejudice to Ground No. 2 Ground No. 3; 1. On the facts and circumstances of the case and in law and without admitting that the amount is received towards allotment of parking space, the Hon'ble CIT (A) erred in assuming jurisdiction u/s 145(3) of the Act and rejecting the books of accounts of the Appellant. 2. He further erred in not considering the alleged amount of ₹ 10,50,000 received towards parking space be considered a part of the total project receipt and that percentage of profit be applied to the total parking receipts. 3. The Appellant prays that the addition be restricted to ₹ 66,990 being 6.38% (Net profit ratio as per tax audit report) to the total receipts. The assessee, vide letter dated 24/05/2021 has filed an additional ground of appeal which read as under: - 1.1 On the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax (Appeals)-47 Mumbai ['the CIT(A)'], erred in upholding the additions made by the Deputy Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ummar ₹ 1,65,000/- 2. Shri Jitendrabhai Thummar ₹ 1,65,500/- 3. Shri Niteshkumar Thummar ₹ 1,70,000/- 4. Shri Dalsukhbhai Thummar ₹ 1,66,000/- Total ₹ 6,66,500/- 4.2 The additions were made by Ld. AO since the passbook of above stated persons were found from the premises of the assessee. It was noted that these persons had advanced unsecured loans to the assessee. Upon perusal of passbook, it was noted that the grant of loans was preceded by immediate cash deposit in the bank account. Therefore, holding that the genuineness of the transactions and the creditworthiness of the lenders could not be proved satisfactorily, these loans were added to the income of the assessee. 4.3 During appellate proceedings, the assessee explained that the amounts were received in AYs 2009-10 2010-11 against sale of flats. The Ld. AO wrongly assumed that amount received were unsecured lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver is shown to have been done in the assessment order to sustain the addition. It is trite law that no addition could be made merely on the basis of assumptions and presumptions. Hence, we are inclined to delete this addition. This ground stands allowed. 5. Parking charges. 5.1 During the course of search action u/s 132 at 1st floor, B-wing, Millenium Avanish, Plot No. 11, Sector-10, Airoli on 28/01/2015, certain loose papers were seized which revealed the details of parking lot allotted by the assessee in the projects to various customers. Since the receipts of sale of parking lots were not reflected in the regular books, the assessee was show-caused as to why the same be not treated as undisclosed income of the assessee. 5.2 The assessee refuted the allegation by submitting that originally the cheques were taken from flat purchasers for allotment of the parking. Similarly, the cheques were also taken for development charges, club membership etc. However, subsequently, it was decided not to collect these amounts from the flat purchasers and therefore, the said cheques were not deposited in the bank. The buyers did not collect their cheques which were found duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t suddenly decided to allot parking to its customer free of cost is without any basis. The explanation of the assessee is only an afterthought. Therefore, the amount of ₹ 10,50,000/- received by the assessee on account of parking charges is hereby treated as its undisclosed income and added back to the total income. Accordingly, the amount of ₹ 10.50 Lacs was added to the income of the assessee. 5.4 The Ld. CIT(A) held that the assessee denied the contents of the incriminating loose papers without adducing any material evidence on record. The statement of Shri Kulvinder Singh Narula was brushed aside without giving any plausible reasons, The incriminating seized material gave complete detail of car parking no., flat no., customer name, mobile number and amount of payment and this document clearly reveal that the assessee received car parking charges which were acknowledged by writing OK against each entry. The contention that no parking charges were taken were not borne out of record. The alternative contention that only unaccounted car parking charges should be taxed on percentage completion method of accounting, was also rejected since these were unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose cheques were found which were not collected back by the flat owners. Thus, loose papers were mere proposal which never materialized and therefore, the additions are unsustainable in law. 5.7 After due consideration of material on records and arguments adduced by both the sides, we are of the opinion that loose papers were merely a dumb document and nothing could be conclusively inferred upon perusal of the same. The explanation of the assessee was a plausible one and we concur that merely on the basis of this paper, the addition could not be sustained. So far as the statement of Shri Kulvinder Singh Narula is concerned, we find that he has filed another affidavit dated 21/01/2020 wherein it has been admitted by him that the earlier statement was taken under undue pressure and the fact of having paid cash towards parking was not true. Thus, the statement of this person could not be relied upon and the same alone was not sufficient enough to make the additions particularly in the background of the fact that the assessee filed affidavit of 5 more flat owners (placed on page nos. 96 to 105 of the paper-book) wherein these persons have denied having paid any cash to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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