2014 (4) TMI 153 - AT - Income Tax

Addition made on account of unaccounted cash receipts Cash receipts of brokerage Sale of car parking area - Held that - Without any evidence in the year for receipt of on-money the addition cannot be sustained there is no documentary evidence with respect to the sale of car parking area except the document no.15 of the documents - there is no basis for making addition for each flat for car parking - The AO had not made any inquiry or verification to examine the facts regarding the rate of sale, area, on money payment of brokerage charges and car parking charges from any of the available sources including the buyers of flats as none of the buyers of the flats was examined by the department to verify the involvement of on-money payment and other charges as alleged by the revenue - Even the understatement of area is not examined by the AO at any stage of proceedings - it cannot be presumed that all the flats were sold by the assessee through the real estate agent and involved brokerage charges. When the statements u/s 133A were recorded at back of the assessee and were subsequently retracted by the witnesses have no evidentiary value to the extent of contents whichever corroborated by documents impounded during the survey proceedings thus, no addition is warranted with regard to the area, parking charges and brokerage - The addition regarding rate is sustainable only to the extent of rates mentioned in the documents thus, the order of the CIT(A) upheld Decided against Revenue.

Summary

Issues:
Challenge to impugned order of Ld. CIT (A) for A.Y. 2007-08 regarding unaccounted cash receipts on sale of flats, cash receipts of brokerage received back from brokers, and cash receipts on sale of car parking.

Analysis:
1. The revenue challenged the Ld. CIT (A)'s order for A.Y. 2007-08, disputing the deletion of additions amounting to unaccounted cash receipts on sale of flats, cash receipts of brokerage received back from brokers, and cash receipts on sale of car parking. The revenue contended that the evidence from a survey operation supported the additions, but the Ld. CIT (A) disagreed.

2. The assessee, a builder and developer, faced additions during assessment for A.Y. 2006-07 based on survey findings, including alleged on-money received from flat sales, sale of parking space, and unaccounted brokerage. The A.O. sought explanations, which the assessee objected to, leading to the additions. However, the Ld. CIT (A) deleted all these additions, prompting the revenue's appeal for A.Y. 2007-08.

3. During the appeal, the Tribunal noted that similar additions made in A.Y. 2006-07 were deleted by the Ld. CIT (A) and confirmed by the Tribunal. The Tribunal found discrepancies in the evidence and statements, highlighting that the survey findings lacked proper corroboration and evidentiary value. The Tribunal emphasized the importance of corroborative documentary evidence to support statements.

4. The Tribunal analyzed the impounded documents and statements, concluding that the evidence did not substantiate the revenue's claims. It highlighted discrepancies in rates, areas, and lack of proper verification by the A.O. The Tribunal upheld the Ld. CIT (A)'s decision to delete the additions, emphasizing the need for concrete evidence to support additions in such cases.

5. Ultimately, the Tribunal dismissed the revenue's appeal for A.Y. 2007-08, citing the lack of mention of any flat in the impounded documents and the consistent deletion of similar additions in A.Y. 2006-07. The Tribunal relied on the precedent set in the assessee's previous case to confirm the Ld. CIT (A)'s decision to delete the additions, emphasizing the importance of substantiated evidence in such matters.

This detailed analysis of the judgment showcases the issues involved, the arguments presented, and the Tribunal's reasoning behind confirming the Ld. CIT (A)'s decision to delete the additions in question.