2012 (3) TMI 536 - AT - Income Tax

Summary

Issues Involved:
1. Profit on sale of Pent House.
2. Undisclosed profit on sale of land and constructed area.
3. Unrecorded receipts on sale of shop to Shri Premarajan.
4. Unrecorded receipts on sale of shops to Sri Jamaludeen and Shri Muneer.
5. Reduction of profit on sale of land.
6. Addition relating to sale of property located at Thankakkunnu.

Summary:

1. Profit on sale of Pent House:
The revenue challenged the deletion of Rs. 21.00 lakhs by the CIT(A) regarding the profit on the sale of a penthouse. The AO claimed the company only debited Rs. 50.00 lakhs in its books, while the agreed cost was Rs. 71.00 lakhs. The CIT(A) deleted the addition due to lack of seized material and a non-completion certificate. The tribunal found contradictions and directed the AO to re-examine the issue based on seized materials.

2. Undisclosed profit on sale of land and constructed area:
The AO computed an undisclosed profit of Rs. 50,81,874/- based on figures from the assessee's books, without referring to seized materials. The CIT(A) deleted the addition due to the absence of seized material. The tribunal emphasized that block assessments should be based on seized materials and directed the AO to re-examine the issue, considering the terms of the agreement between the assessee and landowners.

3. Unrecorded receipts on sale of shop to Shri Premarajan:
The AO added Rs. 8,22,000/- as suppressed receipts based on bank withdrawals by Shri Premarajan, encashed by the assessee's employee. The CIT(A) deleted the addition, stating the bank account was not part of the seized record. The tribunal upheld the CIT(A)'s decision, noting no seized material suggested over and above payments.

4. Unrecorded receipts on sale of shops to Sri Jamaludeen and Shri Muneer:
The AO added Rs. 50.00 lakhs based on loose papers found during a survey and a sworn statement by Shri V. Muneer admitting on-money payments. The CIT(A) deleted the addition, citing the statement's lack of evidentiary value and reliance on pre-search materials. The tribunal disagreed, stating the statement taken u/s 131 has evidentiary value and the AO's assessment was correct. The tribunal restored the AO's addition of Rs. 50.00 lakhs.

5. Reduction of profit on sale of land:
The AO estimated a profit of Rs. 4,55,420/- on the sale of 41.75 cents of land, which the CIT(A) reduced to Rs. 2,08,750/-. The tribunal found the AO's estimation justified based on seized documents and upheld the CIT(A)'s reduced profit estimation. The assessee's cross objection was dismissed.

6. Addition relating to sale of property located at Thankakkunnu:
The assessee challenged the addition of Rs. 4,90,915/- confirmed by the CIT(A). The tribunal did not find merit in the assessee's contentions and dismissed the cross objection.

Conclusion:
The appeal of the revenue is partly allowed for statistical purposes, and the cross objection filed by the assessee is dismissed.