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2010 (2) TMI 851 - AT - Income TaxCommission income assessed on 3% on the sale of appellant s own bookings of properties on estimate basis - properties were allotted to the assessee against commission earned by the assessee as part consideration on account of properties sold through the assessee as an agent Held that - sale consideration in these two years are on account of sale of own properties acquired by the assessee and hence there is no question of earning any commission income on account of these sales in these two years, assessee might have acquired these properties at a price less than market price to the extent of commission, assessee has acquired these properties at a price less than market price and in the absence of any such adverse material, the addition confirmed by the CIT(A) cannot be sustained and hence we delete the same in both the years, assessee s appeal in both the years ie. AY 2001-02 and 02-03 are allowed Addition on account of unrecorded sale proceeds - addition on account of unexplained investment in immoveable properties and of Rs.2,50,160/- on account of repayment of unsecured loans out of unexplained sources and this total addition was made of Rs.39,35,653/-. Out of this, CIT(A) has upheld the addition to the extent of Rs.31,35,633/- and he has allowed a relief of only Rs.8 lakh on the basis that this amount was received by the assessee from Mrs. Sukhbiri Devi, mother of the assessee and the assessee has produced cogent evidence in the form of bank account of Mrs. Sukhibiri Devi, the sources of funds, copy of her income-tax return and the copy of her PAN. A clear finding is given by the CIT(A) that the source of Rs.8 lakh stands explained. No specific defect could be pointed out by the Ld.DR of the Revenue in the order of the CIT(A) on this aspect and hence, no reason to interfere in the order of the CIT(A) on this issue. Revenue is also dismissed, assessee s appeals for AY 2001-02 and 02-03 are allowed.
Issues Involved:
1. Assessment of commission income on the sale of properties. 2. Admission of additional evidence by the CIT(A). 3. Reduction of additions made by the Assessing Officer (AO) on account of unrecorded sale proceeds and unexplained investments. 4. Deletion of additions based on the Departmental Valuer's report. Detailed Analysis: 1. Assessment of Commission Income on the Sale of Properties: The assessee's appeals for AY 2001-02 and 2002-03 centered on the addition of commission income on the sale of properties. The CIT(A) assessed commission income at 3% on the total sales consideration, resulting in additions of Rs.341,240 for AY 2001-02 and Rs.299,027 for AY 2002-03. The assessee argued that these sales were of properties acquired from Ansal Group and thus no commission should be earned on the sale of its own properties. The Tribunal found that the properties were allotted to the assessee as part consideration for properties sold through the assessee as an agent, indicating no commission income should be assessed on these sales. Consequently, the additions were deleted, and the assessee's appeals for these years were allowed. 2. Admission of Additional Evidence by the CIT(A): The Revenue's appeals for AY 2001-02 and 2002-03 challenged the CIT(A)'s admission of additional evidence. The CIT(A) admitted the evidence due to the paucity of time during the assessment proceedings, which prevented the assessee from furnishing the details earlier. The Tribunal upheld the CIT(A)'s decision, noting that the additional evidence was duly confronted to the AO, and a remand report was obtained. Hence, the Tribunal found no reason to interfere with the CIT(A)'s order on this issue. 3. Reduction of Additions Made by the AO: For AY 2001-02 and 2002-03, the CIT(A) reduced the additions made by the AO on account of unrecorded sale proceeds based on the remand report. The CIT(A) deleted the additions to the extent supported by the AO's remand report and upheld the remaining additions. The Tribunal confirmed the CIT(A)'s order, finding no specific defects pointed out by the Revenue. 4. Deletion of Additions Based on the Departmental Valuer's Report: The Revenue's appeal for AY 2002-03 included the deletion of an addition based on the Departmental Valuer's report regarding unexplained investment in property. The AO had made an addition based on the DVO's valuation, but the CIT(A) deleted it, noting no evidence suggested any amount over the sale deed amount was transferred. The Tribunal upheld the CIT(A)'s decision, emphasizing that an addition cannot be made solely on the DVO's report without supporting evidence. Other Appeals: - For AY 2003-04, the CIT(A) reduced the addition made by the AO on account of unexplained investments, correcting a calculation mistake. The Tribunal confirmed the CIT(A)'s order as no defects were pointed out. - For AY 2004-05, the CIT(A) upheld most of the AO's additions but allowed a relief of Rs.8 lakh based on cogent evidence provided by the assessee. The Tribunal found no reason to interfere with the CIT(A)'s order. Conclusion: In the combined result, all the appeals of the Revenue were dismissed, while the assessee's appeals for AY 2001-02 and 2002-03 were allowed, and the appeals for AY 2000-01, 2003-04, and 2004-05 were dismissed. The order was pronounced in open court on 12.2.2010.
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