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Issues Involved:
1. Deletion of addition of Rs. 32 crores by CIT(A). 2. Addition on account of consideration in kind. 3. Confirmation of addition of Rs. 5 crores by CIT(A). Summary: 1. Deletion of Addition of Rs. 32 Crores by CIT(A): Facts of the case in brief in relation to this issue are that the assessee is a key person in the purchase and sale of lands of Narsingi Village and Puppalaguda Village, which are sold to DLF. The assessee is a Managing Director of Mali Florex Limited, which along with another concern called Demi Realtors had entered into Memorandums of Understanding executed on 23.2.2007 and 19.6.2007, with a company called DLF Commercial Developers Ltd., to procure land for the said company in Narasingi, Puppalguda Villages of Rajendra Nagar Mandal. As per the terms and conditions of the said MOUs, both the concerns, viz. Mali Florex Ltd. and DEMI REALTORS have procured 26 acres of land. The DLF company paid a total consideration of Rs. 325 crores for 26 acres worked out at the rate of Rs. 12.5 lakhs per acre; and the lands procured for them were got registered in favour of DLF. During the course of search operations, an unsigned and undated letter was found in the premises of Shri Ch.Srinivas, Vice president of DLF. On perusal of the said letter, the Assessing Officer observed that the said letter was written by the assessee; that an amount of Rs. 32,00,00,000 was paid by the assessee to the landlords and the claimant before the date of registration and that the assessee got back the said money from DEMI Realtors after registration of lands. When confronted with the said letter, the assessee, vide detailed explanation dated 5.12.2009 submitted that the said letter was never written by him; and neither he paid Rs. 32,00,00,000 in advance of the registration, nor subsequently got back the same from DEMI Realtors. The Assessing Officer, however, was not convinced with the explanation of the assessee, and added the said amount of Rs. 32 crores to the income disclosed by the assessee. On appeal, the CIT(A) after due consideration of the detailed arguments of the assessee, observed that Shri C.Srinivas, Vice president of DLF, from whose residence, the hand-written letter, which led to the impugned addition was made, was seized, in the statement recorded from him on the date of search, categorically stated that the said letter has not originated from the assessee and that the same was in fact drafted by Sri Srinivas himself. He also confirmed that it is his handwriting and it was written to the dictation of the Executive Director of DLF and the draft was given to M/s. Mali Florex to be written to DLF. The CIT(A) observed that there appears to be no direct involvement of the assessee to such unsigned letter found at the residence of Srhi Sriivas. With these observations, the CIT(A), deleted the addition of Rs. 32 crores made by the Assessing Officer, vide para 5.0 of the impugned order, concluding portion of which reads as under- "05.0 "¦Shri Srinivas's assertion that he said letter noted in his diary is in his own handwriting; and that it is he who drafted the letter clearly explains the position. It should also be appreciated that the said assertion by Sri Srinivas was made on the very day and during the course of search proceedings and is not an exercise as a result of afterthought. Thus, the presumption u/s 132(4A) should point to the fact that the assessee had no connection whatsoever with the said letter. In view of this veracity of the said unsigned letter was doubtful not only because it was seized from the premises of Sri Srinivas; but also on account of the fact that it was clarified by the person in whose writing the same was written that the said letter did not emanate from the assessee; it cannot be presumed that the assessee is the owner of the letter and the contents of that letter. Unless and until the said paper seized from elsewhere should be independently corroborated with contemporaneous record the said document does not carry any evidentiary value. It is also a fact that lands situated at Puppalguda village were dealt by M/s. Demi Realtors, but not the appellant."¯ Aggrieved by the action of the CIT(A) in deleting the addition of Rs. 32 crores, Revenue is in appeal before us on this issue. We heard both sides and perused the
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