9911796707
TMI Blog2023 (6) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... see is a Private Limited Company engaged in the business of real-estate developer. It filed its return of income on 31.10.2004 disclosing income of Rs.4,86,240/-. A survey action u/s. 133A was conducted in the case of the assessee on 26.10.2005 and thereafter, the assessment was completed u/s. 143(3) on 31.03.2006 determining the total income of the assessee at Rs.27,51,650/-based upon the revised return filed by the assessee adopting profits @ 15% of sale consideration & development charges shown during the year. 4. Subsequently, fresh information was received from Addl. CIT, Central Range-1, Hyderabad on 16.06.2010 (forwarding letter of DCIT, Central Circle-2, Hyderabad) that search & seizure action took place in the case of Mr. Mir Mazharduddin and during the search incriminating evidence was seized in his case which indicates concealment of receipts in the hands of the assessee. These details were available in seized document belonging to Mr. Mir Mazharuddin and marked as annexure A/HHPL/Po-/3. From the documents it was evident that the assessee received Rs. 7,19,31,870/- from Mr. Mir Mazharuddin and his associates. The transactions were both in cheque and cash wherein the las ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover for each of the Asst Years 2003-04 to 2005-06. The aggregate amount of income calculated at the percentage mentioned above, works out to Rs.67 ,61,150/- for all the assessment years 2003-04 to 2005-06. This was done owing to the innate constraints in this line of business it may be possible to conclude that sometimes a part of the sale consideration has to be accepted in cash from the customers. b) Similarly, it is an established practice in the market to pay a part of the purchase consideration of the lands purchased 1 developed in cash and such expenditure is generally not debited in the regular books of account for obvious reasons. In any case, most of the times, such expenditure incurred outside the books of account compensates the income so received outside the books of the account. Therefore, the income already returned may be accepted. c) With reference to "Golconda Heights*venture, it is admitted by the assessee that the payments reflected in seized record in case of Mr. Mir Mazharuddin omits two zeros from the actual value with reference to payments received from Mr. Mazharuddin and 36 others. However, the record is inconclusive because the value of average co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did make any investment to make the alleged unaccounted receipts/sales. In this view of the matter only net profit rate can be applied on un accounted sales/receipts for the purpose of making the addition. g) In the case of R.R. Carrying Corpn [2009] 126 TTJ 240 also, it was held that in the case of discrepancies between the sales or receipt amount as per books of accounts and the amount shown in TDS certificate, for taxability purpose, only the embedded portion of the profits is to be considered as taxable and not the entire amount. h) However, in order to buy peace with the Department and in order to avoid protracted and vexatious litigation, the assessee agrees to offer the cash payments reflected in the seized documents of Mr.Mazharuddin, with a request to consider the extra expenditure incurred on purchase of land. i) The assessee purchased lands at Chilkur from Mr. Sunil D. Shah and others, admeasuring Acres 19.22 gts. The consideration recorded in the books of account ranged from 3 Iakhs per acre to about 7 lakhs per acre depending upon the time of registration. How ever the consideration paid in cash aggregating to Rs.1 ,78,15,000/- has not been reflecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be part of the sale consideration which is already recorded in books. It is also noted that the assessee himself is willing to offer the amounts now but seeking set-off. iii) Details of receipts of unaccounted cash by the assessee from Mr. Mazaharuddin and others are attached as Annexure-A to this order. During the year, the assessee received unaccounted cash of Rs.67,15,000/- and the same is added suppressed sale consideration received by the assessee. 7. The AO further made addition of Rs.6,33,960/- being 20% of the cash payments made by the assessee in violation of provisions of section 40A(3). However, this issue is not before us and therefore, we are not concerned with the same. Thus, the AO determined the total income of the assessee at Rs. 1,01,00,610/-. 8. Before the ld.CIT(A), the assessee apart from the addition on merit, challenged the validity of the reassessment proceedings. However, the ld.CIT(A) dismissed the legal grounds challenging the validity of the reassessment proceedings. She also dismissed the grounds challenging the additions on merit. 9. Aggrieved with such order of the Ld.CIT(A), the assessee is in appeal before the Tribunal by raising the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration in the A.Y 2009-10 and therefore addition of the same again in this year will amount to double addition. He submitted that despite no incriminating evidence found during the survey, the assessee has declared additional income by offering 15% profit on the turnover. Further, these are only advances and cannot be considered as sale. In his alternate contention, the ld.counsel for the assessee referring to a series of decisions submitted that since the assessee has received certain amount in cash and has also incurred certain expenditure in cash, therefore, only some percentage should be adopted towards profit of the same and not the entire amount can be added. For the above proposition, the ld.counsel for the assessee relied on the following decisions. i. ITAT, Hyderabad Tribunal in case of Satyam Constructions(P) Ltd. vs DCIT(Assts), Spl, Range-3 vide ITA No.895/Hyd/1995, order dated 17.10.2000 ii. ITAT, Hyderabad Tribunal in case of Gruhanirman India Pvt.Ltd. vs. ACIT vide ITA No. 2237-2241/Hyd/2017 (for AYs 2010-11 to 2014-15) order dated 27.07.2018. iii. ITAT, Hyderabad Tribunal in case of Gruhanirman India Pvt.Ltd. vs ACIT vide ITA No. 94/Hyd/2019,532/Hyd/2020, 128 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cash receipts and unaccounted cash payments pertaining to the A.Ys.2003-04 to 2006-07 are clearly matched date wise and were correctly assessed in the respective years. If the appellant's contention that the unaccounted receipts are already considered as revenue in A.Y.2009-10, he has to explain the following issues: (a) As per the seized material, the unaccounted receipts clearly pertain to FY.2003-04 to 2005-06 and they cannot be considered for the AY.2009- 10. (b) As per the request of the assessee himself the Assessing officer was generous enough to set off unaccounted payments against unaccounted receipts. If the assessee takes the plea that the unaccounted receipts are to be considered for A.Y.2009-10, he should explain how the unaccounted payments were made in those financial years (F.Y.2005-06 & 2006-07) to the family members of Shah. 7.2 This ground is totally baseless. The unaccounted receipts and payments were correctly considered in the respective A.Ys. and during the assessment proceedings vide letter dated 26.12.2011, the assessee clearly submitted the date wise unaccounted receipts and payments and requested for set off, which was favourably considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) in absence of balance sheet of the respective A.Y. It was also the observation of the CIT (A) that the assessee has to explain the unaccounted payments made to Shah Group during the impugned A.Y. During the course of hearing before the Tribunal, the learned Counsel for the assessee drew the attention of the Bench to the Annexure enclosed to the assessment order and demonstrated before us certain sale deeds for which cash was received during the impugned A.Y, were actually registered in A.Y 2009-10 and therefore, these are only advances. It is also his submission that given an opportunity, he can substantiate that there is no unaccounted receipt during the year and the earlier amount of advance has been offered to tax in the A.Y 2009-10. Considering the fact that the assessee has declared additional income @ 15% of the turnover to explain the source of certain payments during the impugned A.Y and considering the fact that certain sale deeds were registered in A.Y 2009-10 for which the assessee has received certain amounts which according to him are advances received during the year, therefore, considering the totality of the facts of the case and in the interest of justice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as available as cash while arriving at the deficit cash. 7, Any other ground that may be urged at the time of hearing. ITA No.1644/Hyd/2013 (AY 2006-07) 15. Grounds raised by the assessee are as under:- 1. The order of the learned CIT(A) is erroneous both on facts and in law and is perverse. 2. The learned CIT(A) erred in not allowing telescoping of the additional income admitted in revised return of income after survey without appreciating the fact that such additional income is admitted in view of receipt of cash outside the books of account. 3. The learned AO erred in confirming the addition of RS.44,16,sOO holding that each year's receipt is to be assessed in the same year without appreciating the fact that the assessee admitted income on sale of plots on the basis of registration of plots and that it has admitted the additional income in the asst. year 2009-10 on the basis of registration and thereby erred in confirming assessment of same income twice. 4. The learned CIT(A) erred in confirming the finding that there is on money payment to Shah group without appreciating the legal position that it is mandatory to allow cross examination of the person whose stat ..... 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