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TMI Blog2013 (6) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of the house for Mr. Pawar is not in doubt, thus presumption u/s 292 C has been discharged by the assessee. Besides the deference if any emerges from the books of the assessees son and not the assessee himself. Further, the plot is not purchased by assessee alone but his wife also, a fact which has not been disputed. Thus, the incriminating document belongs to son and not assessee, discrepancy, if any, cannot be attributed to assessee. Further, the part of the plot ownership belongs to his wife for which also addition cannot be made in the hands of assessee. It is pertinent to appreciate that father and son have already paid taxes on undisclosed income of Rs. 2,16,42,960/-, there is no indication of existence of corresponding assets thus the possibility of telescoping also cannot be ruled out. Thus the impugned addition cannot be made in the hands of the assessee. Against revenue. - ITA No. 3087 /Del/ 2012, ITA No. 3693 /Del/ 2012 - - - Dated:- 17-6-2013 - Shri R. P. Tolani And Shri B. C. Meena,JJ. For the Petitioner : Dr. Rakesh Gupta Adv. Shri Ashwani Taneja Adv. For the Respondent : Dr. Sudha Kumari CIT(DR) ORDER Per R. P. Tolani, J. M:- Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in different assessment years." 3. Brief facts are: The assessee is an advocate-cum-deed writer at the Civil Courts at Dehradun. Search seizure U/s 132 of the Act was carried out in the premises of the assessee and his son Shri Ashish Mohan Agarwal on 4-3-2009. Consequent to search, they made a disclosure of additional income of Rs. 1,70,00,000/- during the course of search. Subsequently, the same was increased to Rs. 2,16,42,960/- in the return of income which stands assessed. 3.1. This is the last year of the block period, it is claimed that during the course of assessment of this year the assessing officer went beyond the undisclosed income offered by the father and son and made following further additions to the return of income: (i) ad hoc disallowance 10% of the expenditure of construction Rs. 2,41,601 (ii) Excess payment in respect of plot Purchased from Shri Balwant Singh Panwar Rs.43,42,669/- Aggrieved assessee preferred 1st appeal, CIT(A) accorded partial relief by following observations: i) Disallowance of 10% ad hoc construction expenses: "1.1. ...... The group consists of the assessee and his son Shri Ashish Mohan Agarwal. It was also submitted that, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net profit shown by him was 8% of his gross receipt. In view of this, there is no justification for any separate disallowance out of expenditure. The addition is deleted. ......... ii) Assessee's ground Revenue's ground 2,3 4 about addion on plot construction:- 2.6 It is observed that the AO committed an error while calculating the amount of unexplained expenditure incurred on the said plot. As is apparent from the seized document {Annexure A-39 page 13), a total amount of RS.33,50,0001 was actually paid by the assessee and his family members to Shri Balwant Singh Panwar partly in cash and partly in kind, Expenditure to this extent has been explained by them as below: Amount paid by Shri D.M. Agarwal 12,00,000.00 Amount paid by Smt. Usha Agarwal 13,65,000.00 Amount paid by Shri Ashish Mohan Agarwal 7,85,331.00 33,50,331.00 This expenditure is claimed to have been accounted for by these assessees in their respective accounts prepared on the basis of the bank entries and seized documents after th-e search. It is also noted that the group offered additional income of Rs. Rs.2, 16,42,9601 in the returns furnished afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands the income arising from the sale of the land was taxable. Accordingly, he should convey the facts and circumstances of the case to the AO of that person for appropriate action in the matter. 3.3. Aggrieved both the parties are before us on respective grounds: 4. Ld counsel Shri Rakesh Gupta Advocate, contends that the sole issue in assessees's appeal pertains to the addition of Rs. 43,42,669/- made by AO which is reduced to Rs.36,50,000/- by Ld. CIT(A), assessee and department both are in appeal. It is matter of record that assessee and his son stand taxed for undisclosed income of Rs. 2,16,42,960/- on the basis of incriminating seized documents, having accepted the disclosure there is no justification for further additions by reinterpreting the documents based on which the disclosed amount is assessed. 4.1. The impugned document mentions a figure of "70,00,000" which is wrongly held by Ld. AO as the price of the plot which is purchased by the assessee and his wife from one Shri Balwant Singh Pawar. AO held that a sum of Rs.26,57,331/- has been shown as purchase price and thus balance i.e. Rs.43,42,669/- was the undisclosed amount paid by the assessee and his wife for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shown as under:- 34,91,831 1,41,500 Less: received from Balwant Singh for laying the foundation 12,00,000 Transfer from Shri D.M. Aggarwal, (AGVPA7376G) 27,06,500 13,65,000 Transfer from Smt. Usha Aggarwal (AGXPA3968J) 7,85,331 Balance debited to my capital account. Copy enclosed. I have not received any further amount for the construction of Shri Balwant Singh house, therefore, the balance amount which was spent by me was debited to my capital account. 4.8. PB - 3 are submissions filed with Ld. CIT (A) explaining that assessee paid only Rs.12,00,000/- for the purchase of plot, Rs. 1365000 by wife of the assessee and Rs. 7,85,331/- being expenses incurred by his son Mr. Ashish Mohan Aggarwal. 4.9. PB 4 - 5 is the copy of account of Mr. Pawar in the books of accounts of Mr. Ashish Aggarwal which demonstrates that he received Rs.1,41,500/- from Mr. Pawar, Rs.12,00,000/- from his father, Rs.13,65,000/- from his mother, thus aggregating to Rs.27,06,500/- whereas total amount on the construction of the house was Rs.34,91,831/-. Both these figures are thus appropriately reconciled by the assessee from the material available on record. 4.10. PB - 6 is the statement of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctness of the contents therein. It has been accepted that the paper pertains to AA who is also a person searched and about contents a proper explanation and reconciliation is offered supported by the son along with other a/cs of AA and statement of Mr. Pawar. It has been explained that in fact out of figure of Rs.70,00,000 another figure of Rs. 33,50,000 representing renegotiated price which has been reduced and the remainder is Rs. 36,50,000 which is duly reconciled. Thus the Presumption has been properly explained and rebutted by the assessee. Besides there is signature of Mr. Pawar is at the figure of 33,50,000 and there is no signature on 70,00,000, which further supports the assessees version. 4.13. Ld counsel then adverted to the contentions of Ld. CIT (A) as under: (i) No documentary evidence was submitted by the assessee or Shri Pawar about the settlement for the lower consideration. - In reply it is submitted that statement of Mr. Pawar recorded on oath demonstrates the fact that price was settled at Rs.33,50,000/- due to fall in the plot price, once the statement of the seller about sale price is on record, assessee has no onus to produce other documentary evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n undisclosed income of Rs. 2,16,42,960/-. The statement of shri Pawar has not been controverted. Besides the accounts of the son have been accepted by the AO except an adhoc addition of 10% expenses which has already been deleted. Once these evidences are not in question the explanation offered by the assessee and has son cannot be outrightly rejected. Mr. Pawar has confirmed the renegotiation of prices of plot thus buyer and seller both agree to the same price, comparable sale instances which are registered documents also support the price. AA being a building contractor, fact of construction of the house for Mr. Pawar is not in doubt, in our view presumption u/s 292 C has been discharged by the assessee. 7.3. Besides the deference if any emerges from the books of the assessees son and not the assessee himself. Further, the plot is not purchased by assessee alone but his wife also, a fact which has not been disputed. Thus, the incriminating document belongs to son and not assessee, discrepancy, if any, cannot be attributed to assessee. Further, the part of the plot ownership belongs to his wife for which also addition cannot be made in the hands of assessee. On the above consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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