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2021 (8) TMI 1307 - AT - Income TaxOn-money received on sale of various units - Assessment u/s 153A - CIT-A deleted the addition - HELD THAT - We find that the Ld. CIT-DR, except placing his reliance on the findings of the Assessing Officer, could not bring any corroborative material on record to justify the additions made by the Assessing Officer. We find that the assessee had duly shown the short-term capital gain from sale of units in The View project and business income from sale of units in Almas Elements project in his original returns of income furnished u/s 139 of the Act. We further find that during the course of the assessment proceedings, the assessee had duly furnished all the necessary details, documents, bills, vouchers etc. in respect of both the projects before the Assessing Officer. We also find that the Assessing Officer has also not made any independent enquiry or investigation from the buyers of the property as regard to actual receipt of sale consideration despite specifically being insisted by the assessee during the course of the assessment proceedings. Further, the Assessing Officer has also not brought any incriminating material or evidence on record which could substantiate that the assessee has actually received any on-money from the sale of units in The View and Almas Elements projects. We also found that the assessee has duly shown the income by having regard to the provisions of section 50C of the Act. Therefore, we are of the considered view that the Assessing Officer has made the additions purely on his guess work and surmises which do not have any basis whatsoever. We do not find any reason to interfere with the findings of the Ld. CIT(A). Accordingly, the action of the Ld. CIT(A) in deleting the additions on account of The View and Almas Elements projects respectively, is hereby sustained. - Decided against revenue. Unexplained investment in property - AO noted while examining the books of account of the assessee family, this payment was not found recorded in the regular books of account of any of the assessees of Chugh family - HELD THAT - We find that the Ld. CIT-DR, except placing his reliance on the findings of the Assessing Officer, could not bring any corroborative material on record to justify the additions made by the Assessing Officer. We find that during the course of the assessment proceedings, the assessee has duly furnished a notarized affidavit of Shri Anil Sogani, one of the partners of M/s. Gold Terrace Apartment, stating that except a payment of Rs.50,00,000/-, no other payment was made towards the said agreement. However, the said Affidavit was not controverted by the Assessing Officer. We also find that during the course of the assessment proceedings only, the assessee has also demonstrated the refund of Rs.50,00,000/- to Shri Nitesh Chugh on 29.04.2013 through RTGS but, the Assessing Officer did not make any reference thereof in his assessment order and instead, the AO made an incorrect finding to the effect that the amount of Rs.50,00,000/- was not found refunded by the seller to the assessee family. We also find that the Assessing Officer, except placing his reliance on the payment terms stated in the unsigned and undated agreement, could not bring any corroborative evidence on record to establish that the installment of Rs.1,75,00,000/- was actually paid before the date of the search. We have also carefully perused the judicial pronouncements cited and discussed by the Ld. CIT(A) in the impugned order. Unexplained investment for purchase of plots in Pulak City - HELD THAT - Merely on the presumption basis, any difference in the guideline value and apparent consideration paid by an assessee for purchase of an immovable property cannot be deemed as income of the assessee. Undisputedly, in the present case, no positive evidence has been brought on record to establish that the assessee has parted with any consideration over and above that shown in the registered sale deeds. In such circumstances, we are of the considered view that the Ld. CIT(A) has rightly deleted the addition made by the Assessing Officer in the assessee s income on the allegation of payment of on-money by the assessee and his son Shri Vivek Chugh. Accordingly, this ground of the Revenue for the A.Y. 2013-14 is dismissed. Eligibility of Deduction u/s. 54F in respect on-money - HELD THAT - We find merit in the argument of the AR that under provisions of clause (b) of section 153A, the Assessing Officer is required to assess or reassess the total income of an assessee. We also find that the expression total income has been defined under clause (45) of section 2 of the Act and according to which, the expression total income means the total amount of income referred to in section 5, computed in the manner laid down in the Act. Thus, in our considered opinion, even in the assessment proceedings u/s. 153A, the total income has to be computed in the same manner in which it is computable under the normal assessments under the provisions of s.143(3) of the Act and no discriminatory treatment can be given for computation of total income in pursuance of the assessment made u/s. 153A of the Act. We also find that the position of law for giving a different treatment has got changed only by way of insertion of a new section 115BBE in the statute by way of the Finance Act, 2012 w.e.f. 1-4-2013, which is not applicable for the assessment year under consideration. Thus, we are of the considered view that the assessee is eligible for claim of deduction u/s. 54F of the Act in respect of the on-money of Rs.2,08,00,000/- received from sale of subject capital asset. This view is supported by the decision of the Coordinate Bench of ITAT, Pune in the case of Shri Manish Madhav Malpani 2015 (5) TMI 1232 - ITAT PUNE as also relied upon by the ld. CIT(A). - Thus action of the Ld. CIT(A) in deleting the addition on account of receipt of on-money from sale of agricultural land, is confirmed. Addition of cash loan given from unaccounted income - unexplained investment in purchase of plots by the assessee - HELD THAT - We find that the Ld. CIT-DR, except placing his reliance on the findings of the Assessing Officer, could not bring any further material on record to justify the addition made by the Assessing Officer. We find that the assessee himself had offered a sum as additional income on account of cash loans in his return of income filed post-search for the A.Y. 2013-14. Thus, the Assessing Officer was not justified in re-making the addition to the tune of Rs.1,89,000/- in the assessee s income for the relevant assessment year. Also we find that the said loose paper is in the form of a promissory note dated 25.03.2007 given by Shri Sanjay Wadhwani in favour of Shri Vivek Chugh. We are in full agreement with the finding of the ld. CIT(A) that the said promissory note neither contains the name of the assessee nor it pertains to the assessment year under consideration and in such circumstances, no addition could be made in the assessee s income on this count for the relevant assessment year. Accordingly, the action of the ld. CIT(A) in deleting the entire addition. Unexplained investment for purchase of plots in Pulak City - HELD THAT - Assessing Officer failed to discharge such onus and made the addition merely on presumption and assumption. We further find force in the contention of the assessee that the impugned transactions of purchases were carried out during the financial year 2012-13 relevant to A.Y. 2013-14 and for such year, the provisions of s.56(2)(vii) were not made applicable. It is worth notable that the provisions of s.56(2)(vii) have been introduced in the statute by the Finance Act, 2013 w.e.f. 1.4.2014 only and such provisions are not retrospective in the nature. In such circumstances, merely on the presumption basis, any difference in the guideline value and apparent consideration paid by an assessee for purchase of an immovable property cannot be deemed as income of the assessee. Undisputedly, in the present case, no positive evidence has been brought on record to establish that the assessee has parted with any consideration over and above that shown in the registered sale deeds. In such circumstances, we are of the considered view that the Ld. CIT(A) has rightly deleted the addition made by the Assessing Officer in the assessee s income on the allegation of payment of on-money by the assessee Provisions of section 43CA which have been inserted in the Statute by the Finance Act, 2013 w.e.f. 1-4-2014, were not applicable in the case of the assessee firm for the assessment year under consideration. Therefore, we do not find any reason for making addition by the Assessing Officer in the assessee s income on this count. Unexplained expenditure in Sun City project - HELD THAT - No addition in the assessee s income merely on guess work without bringing any cogent and corroborative material or evidence on record.
Issues Involved:
1. Deletion of additions on account of on-money received on sale of units in various projects. 2. Deletion of additions on account of unexplained investments in property. 3. Deletion of additions on account of undisclosed investments for purchase of plots. 4. Deletion of additions on account of cash loans given from unaccounted income. 5. Deletion of additions on account of unexplained expenditure in projects. Detailed Analysis: Issue 1: Deletion of Additions on Account of On-Money Received on Sale of Units in Various Projects The Revenue challenged the deletion of additions made by the Assessing Officer (AO) on account of on-money received on sale of units in projects such as 'The View' and 'Almas Elements'. The AO had estimated the net profit and added on-money based on assumptions and comparisons with other projects. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted these additions, noting that the AO's estimations were arbitrary and lacked corroborative evidence. The CIT(A) emphasized that the onus was on the Revenue to establish that the assessee had understated the consideration for transfer of immovable property, as per the Supreme Court's decision in K.P. Varghese vs. ITO. The Tribunal upheld the CIT(A)'s decision, finding that the AO's additions were based on guesswork without any concrete evidence. Issue 2: Deletion of Additions on Account of Unexplained Investments in Property The AO made additions for unexplained investments in property based on an unsigned, undated sale agreement found during the search. The CIT(A) deleted these additions, noting that the agreement was not executed and the token money paid was refunded. The Tribunal agreed with the CIT(A), finding that the AO did not bring any evidence to show that the alleged payments were made. The Tribunal emphasized that the AO's additions were based on assumptions without any supporting evidence. Issue 3: Deletion of Additions on Account of Undisclosed Investments for Purchase of Plots The AO made additions for undisclosed investments in the purchase of plots, assuming that the purchase price was understated compared to the government guideline value. The CIT(A) deleted these additions, noting that no incriminating documents were found during the search to show that the assessee had paid over and above the stated amount. The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO failed to provide any corroborative evidence and that the provisions of Section 56(2)(vii) were not applicable for the relevant assessment year. Issue 4: Deletion of Additions on Account of Cash Loans Given from Unaccounted Income The AO made additions for cash loans given by the assessee based on seized documents. The CIT(A) deleted these additions, noting that the assessee had already offered a portion of the amount as additional income and that the remaining amount was not related to the assessee. The Tribunal upheld the CIT(A)'s decision, finding that the AO's additions were based on uncorroborated documents and that no independent enquiry was conducted. Issue 5: Deletion of Additions on Account of Unexplained Expenditure in Projects The AO made additions for unexplained expenditure in the 'Sun City' project based on seized documents. The CIT(A) deleted these additions, noting that the documents were unsigned, undated, and not related to the assessee. The Tribunal agreed with the CIT(A), emphasizing that the AO's additions were based on presumptions without any supporting evidence. The Tribunal held that the seized documents were dumb documents and could not be used as evidence against the assessee. Conclusion: The Tribunal dismissed all the appeals filed by the Revenue, upholding the CIT(A)'s decisions to delete the additions made by the AO. The Tribunal emphasized the need for concrete evidence and corroboration in making additions, rather than relying on assumptions and uncorroborated documents.
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