2014 (8) TMI 755 - AT - Income Tax

Cash received for booking/sale of land from identified parties or not - Held that - AO as well as CIT(A) examined the record and found that the entries appearing in the names of Shri Abrar Ahmed, Saagir Ahmed and Mugahid Sahid were also made available before the AO on 6.3.2009 and 17.12.2009 - The amounts represent the payment made to the persons towards purchase of land and duly recorded in the books of the assessee there was no infirmity in the conclusion drawn by the CIT(A) Decided against Revenue. Receipt of cash on different dates Held that - CIT(A) has examined the record and the facts that Mr. Sujoy Mukherjee in the proprietor of M/s S. M. Financial & Management Services - It was brought to the notice by the assessee that the assessee made the surrender at the time of survey and offered for taxation - The surrendered was made on account of unaccounted cash received as well as profit on the same - The claim of the assessee is that the surrendered amount includes entire unaccounted cash receipts of ₹ 1,75,60,980/- and also estimated profit of ₹ 64,94,020/- and thus, total surrendered amount is ₹ 2,40,55,000 - AO was rightly directed to delete the addition of ₹ 22 lacs made on the basis of entries Decided against Revenue.

Summary

Issues:
1. Deletion of addition on account of cash received from identified parties for booking/sale of land.
2. Deletion of addition made on account of receipt of cash on different dates.
3. Deletion of addition made on account of proportionate profit earned on unaccounted business receipt.

Issue 1: Deletion of addition on account of cash received from identified parties for booking/sale of land:
The Revenue challenged the deletion of an addition of Rs. 19,28,684 made by the Assessing Officer, arguing that the assessee did not submit details of cash receipts from identified parties. The Tribunal examined the relevant documents and found that the amounts in question were payments made towards the purchase of land, duly recorded in the assessee's books. The Tribunal upheld the CIT(A)'s decision to delete the addition, noting that the payments were legitimate and recorded transactions. The Tribunal emphasized that the Revenue failed to provide any material contradicting the CIT(A)'s factual findings. Therefore, the Tribunal dismissed the Revenue's appeal on this ground.

Issue 2: Deletion of addition made on account of receipt of cash on different dates:
The Revenue contested the deletion of an addition of Rs. 22,00,000, arguing that undisclosed receipts should be considered while computing real income. The Tribunal noted that the appellant had voluntarily surrendered unaccounted receipts and profits, totaling Rs. 2,40,55,000. The Tribunal found that the CIT(A) had thoroughly examined the records, including the agreement between the parties involved. The Tribunal agreed with the CIT(A) that the addition based on the entries in question should be deleted. The Tribunal emphasized that punishing the assessee twice for the same transactions would be unjust. Therefore, the Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 22,00,000.

Issue 3: Deletion of addition made on account of proportionate profit earned on unaccounted business receipt:
Given the Tribunal's affirmation of the deletions in the previous two issues, the addition of Rs. 15,26,527 on account of proportionate profit earned by the assessee on unaccounted business receipts was also challenged. The Tribunal dismissed this ground, stating that since the assessee had already offered to tax the profit from the unaccounted receipt of Rs. 1,75,60,980, this additional addition was consequential. The Tribunal found no merit in the Revenue's appeal and dismissed it accordingly.

In conclusion, the ITAT Delhi upheld the decisions of the CIT(A) in deleting the additions challenged by the Revenue, emphasizing the legitimacy of the transactions and the lack of contradictory evidence provided by the Revenue. The Tribunal found no merit in the Revenue's appeal and dismissed it in its entirety.