TMI Blog2024 (2) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... d of having received commission income for transaction with Dempo for assisting M/s. Devashri Real Estate Developers for eviction of tenants, is repudiated by the fact that names and amounts given by M/s. Devashri Real Estate Developers are not dealing with the names and amounts found written in the seized material. It is the claim of M/s. Devashri Real Estate Developers that amounts were directly paid by them to the tenants by cheques or pay orders. Besides there being variations in the names and amounts, the assessee had no occasion to refer such payments made by M/s. Devashri Real Estate Developers and therefore Assessing Officer was right in treating the transaction recorded in the seized papers as distinct from the payments made by M/s. Devashri Real Estate Developers. It is pertinent to note that the documents found and seized from the assessee s premises were written by Appellant no. 2 , wife of Appellant no. 1. The entries in this document is relating to the business of assessee of liaisoning for which commission has been received from time to time. Assessee has made payment, as explained, in getting clear the properties or vacating the same from unauthorized occupant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative of assessee filed details called for. 4. The Assessing Officer assessed the total income as Rs. 19,25,286/- and agricultural income of Rs. 57,239/-. Appellant was held liable to pay interest of Rs. 11,29,825/-. It was directed that demand notice be issued accordingly and show cause notice u/s. 274 r/w 27(1)(c) of I.T. Act was issued. 5. The Assessment Order dated 20th December 2006 was challenged by preferring appeal before Commissioner of Income Tax (Appeals). Vide order dated 16th October 2008 the appeal was partly allowed. 6. Learned counsel for Appellants submitted as under : (a) The impugned orders are contrary to law; (b) In accordance with Section 69(C) of I.T. Act it is required to be established firstly that expenditure was incurred. Except bear entries, there is nothing on record to show that there was expenditure incurred; (c) The proof of spending is not there. Tax cannot be levied on inference which is not supported by evidence; (d) The I.T. Department has not taken into account sale of capital goods made during the financial year 1999-2000 at Poiguinim agricultural land against which Appellant had cash in hand at farm house; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the commission received from M/s. Dempo; (j) The assessee was called upon to explain about payment of certain amount to tenants/mundakars and whether said payment was made directly to tenants/mundakars. In reply, it was stated that amount has been directly paid to the tenants by cheques/pay orders; (k) The assessee in his letter dated 12th December 2006 had submitted reply in respect to letter of M/s. Dempo and clarified that names of tenants are recorded by M/s. Dempo in the year 1996-97. The assessee had received commission from M/s. Dempo for the relevant year 2001-02. All these amounts were received towards commission. The diary and lose papers have no evidentiary value. Such documents have no basis for assessment and inferences of income. 7. Learned counsel for Appellants has relied upon following decisions : (i) M/s. Kishinchand Chellaram Vs. Commissioner of Income Tax, Bombay City II, Bombay cdj-1980-SC-095; (ii) M/s. Krishna Textiles Vs The Commissioner of Income Tax - (Income Tax Reference No. 43 of 1999 decided by DB of Gujarat High Court; (iii) CBI Vs. V.C. Shukla and others (1998)3-SCC-410. 8. Learned advocate f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vacating tenants/munadakrs from the proposed construction site and the amount mentioned against such names are the total consideration received by parties and the assessee has received only commission out of those transactions, is without any basis. It was proved that transactions were not relating to real estate dealings on which assessee has received commission of Rs. 1,50,000/- but the assessee has spent Rs. 30,85,000/- during the previous financial year. Hence amount of Rs. 30,85,000/- was added to the income written as unexplained expenditure u/s.69C of I.T. Act. The Assessing Officer, the First Appellate Authority and the ITAT have given findings on the material on record, which does not warrant interference. 9. The assessee filed income tax return declaring income of Rs. 1,67,083/- and agricultural income of Rs. 57,239/-. Search was conducted u/s. 132 of I.T. Act. Notice was issued u/s.153A of Act. The assessee filed return declaring NIL income. Thereafter assessee revised income on 4th March 2005 declaring total income of Rs. 1,67,083/- and agricultural income of Rs. 57,239/-. Notice u/s. 143(2) of I.T. Act was issued to the assessee. The authorized representative of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to agricultural farm. Since he did not complete the job, money was recovered back. The Assessing Officer found that recovery of excess amount has not been shown as receipts in the amount. 12. During the course of search at the residence of assessee material marked as A/IF/01 and A/IF/02 were seized which contain lose papers and notings in the diary. In the material marked A/IF/02 and A/IF/01 total of the amount written as Rs. 30,85,000/- was written as paid and Rs. 7,15,000/- was shown as balance. During the course of search assessee was questioned about contents of documents. It was admitted by the wife of assessee that document was found at her residence and it belongs to her husband. She also stated that she is not in a position to explain anything as the diary belongs to her husband. The assessee was asked to explain the same. It was explained that entries are relating to real estate commission business. The names appearing are of different persons who have done transactions on which assessee got commission and the amount mentioned against their names are of considerations paid or received by those persons on which assessee got some commission. The assessee was asked to fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of writing names of tenants in the assessee s diary does not arise. The assessee submitted his reply vide letter dated 12th December 2006 stating that those were the names of tenants recorded by M/s. Dempo in the year 1996-97. He has received commission from M/s. Dempo for the relevant period of assessment 2001-02. The Assessing Officer opined that assessee s contention that names mentioned in M/s. Devashri Real Estate Developers letter are relating to the year 1996-97. The opinion from M/s. Devashri Real Estate Developers was called for relating to TDS made by them during the year 2000-01 relating to assessee for assisting them for vacating tenants. It was also stated that he has employed persons to remove the tenants and names mentioned in the diary is of the persons who assisted him for evicting the tenants. The statement was contradictory to the statement made during the course of search and during assessment proceedings wherein it was stated that names mentioned in the diary is of tenants of M/s. Dempo and he has assisted M/s. Dempo in evicting tenants and the amount mentioned therein are the compensation paid by them. Since M/s. Dempo has paid compensation directly to the ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed excess exemption claimed of Rs. 17,800/-. The said ground was not pressed by Appellant and hence same was dismissed. It was observed that addition of Rs. 3,84,000/- made by Assessing Officer after working of peak credit is upheld. The CIT (A) also confirmed the addition of Rs. 55,186/- by Assessing Officer after marking out peak credit in the undisclosed bank account. The ground regarding addition of Rs. 10,000/- made by Assessing Officer for amount receivable from Mr. Newton out of agricultural amount was not pressed. Other ground urged before CIT (A) was against addition of Rs. 29,03,000/- made by Assessing Officer u/s. 69(3) for recordings made in diary seized during search. The CIT(A) analyzed the observations of Assessing Officer in great details and observed that reasons stipulated in the assessment order led the Assessing Officer to conclude that the transactions noted in the diary were different from the real estate business on which the assessee had received commission and the amount was spent on some activities which have not been explained and as such addition for unexplained expenditure u/s. 69C was made by the Assessing Officer. The CIT(A) observed that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est is to be increased by the amount payable under(i) of Section 234B of I.T. Act. Such an increase can be made only if interest u/s.234B has been charged in the original assessment. The ITAT remitted the matter back to Assessing Officer for verification of facts and adjudication. 16. The ITAT observed that CIT(A) has already considered the issue in detail about peak credit in the bank account and rejected said ground. The ITAT also dealt with the ground relating to entries made in the diary found at the residence of assessee. The Tribunal considered the fact that Assessing Officer has verified from M/s. Devashri Real Estate Developers who reported that payment of Rs. 1,50,000/- was made towards liaisoning and assisting them in negotiations with the tenants and mundakars for re-settlement and development of property where complex was constructed by them. They also furnished names of tenants/mundakars staying in the property and confirmed that amounts have been directly paid to the tenants/mundakars by cheques/pay orders and it was not the case that amount was first paid to the assessee and then disbursed by the latter to the concerned persons. Being confronted with the reply rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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