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TMI Blog2013 (10) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... t the addition of Rs. 2,05,059/- made by the Assessing Officer - Decided in favour of assessee. Assessee located the property only in April, 2007 i.e. immediately after the end of the previous year. The agreement of sale cum general power of attorney was executed by Smt. A Renuka in favour of the assessee wherein it is mentioned that an amount of Rs. 15 lakhs was paid by the assessee, a copy of which has been filed at pages 88 to 98. It is clear from the above that the assessee paid Rs. 15 lakhs and incurred expenses in acquisition of the property by way of General Power of Attorney. The said property was ultimately transferred in favour of Radha Realters vide sale deed dated 01/01/2009 for a consideration of Rs. 18,15,000/-. Also the expenditure on stamp duty is to be considered, the cost would be more than Rs. 20 lakhs. Therefore, this clearly indicates that the amount of Rs. 20 lakhs received during the previous year is for the acquisition of the property. In our considered opinion, the transaction is genuine as the property was registered in favour of the person, who has advanced the amount. Advance given for land - Held that:- It can be said that if the creditors are clo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals being ITA No. 256, 257 258/Hyd/12 are directed against a common order of CIT(A)-I, Hyderabad dated 14/03/2012 for the assessment years 2006-07, 2007-08 2008-09. Since common issues are involved in these appeals, they were clubbed and heard together and a common order is passed for the sake of convenience. 2. The assessee filed a petition for admission of additional grounds of appeal for assessment years 2003-04, 2004-05 2005-06. "The learned CIT(A) erred in confirming the addition made of Rs. 25,000/- as the Assessing Officer did not base such an addition on any seized material." 3. Relying on the decision of the jurisdictional High Court in the case of DCIT, C.C.2, Hyderabad vs. Ahura Holdings 2012- TIOL-357-HC-AP-IT, we dismiss the additional ground for assessment years 2003-04, 2004-05 2005-06. 4. The assessee is an individual. The I.T. Authorities conducted a search and seizure operations under section 132 of the Income Tax Act in the case of Radha Realty Corporation on 17.10.2007, thereafter, issued notice under section 153C to the assessee. The assessee filed returns of income for the A.Y. 2003- 2004, 2004-05 and 2005-06 admitting income as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable opportunity of being heard to the assessee. This ground is allowed for statistical purposes in all the three years under consideration. 8. The assessee has also challenged the levy of interest charged by the Assessing Officer u/s 234A, 234B and 234C of the IT Act. Since the levy of interest is consequential to the order to be passed by the Assessing Officer on the issue which has been remitted to him, he shall rework the same and determine the consequential interest u/s 234A, 234B and 234C. 9. In the result, the appeals being ITA Nso. 653, 654, 655/Hyd/12 are partly allowed for statistical purposes. ITA NO. 656/HYD/12 for AY 2006-07 10. For the assessment years 2006-07, 2007-08 and 2008-09, the CIT(A) had passed a consolidated order as identical issues were involved in the same. 11. The fact in these assessment years are that Search and seizure operation u/s.132 of the I.T. Act was conducted at the residential premises of Radha Realty group of cases on 17-10- 2007. Consequent to search and seizure operations, notice u/s.153C was issued in response to which the assessee filed his returns of income admitting income as under. Asst. Year Income retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as debit entries regularly shown in this account represent received from purchasers and paid to sellers. It was also submitted that the commission earned on business is offered to tax, therefore, separate addition as peak credit is totally uncalled for and accordingly pleaded for deletion from total income. The CIT(A) held that in the present assessment year the assessee disclosed total income of Rs. 1,15,312/- and the assessee should be given relief to the extent of income returned and balance of Rs. 89,747/- is retained as the assessee had no explanation to offer to substantiate the amounts deposited in his bank account during the year. Since explanation with production of proper evidences has not been given by the assessee with respect to entries in the bank account, the CIT(A) sustained the addition to the extent of Rs. 89,747/-. 16. Aggrieved, the assessee is in appeal before us and as also raised additional ground as follows: "The learned CIT(A) erred in confirming the addition made of 30,000/- as the Assessing Officer did not base such an addition on any seized material." 17. Relying on the decision of the jurisdictional High Court in the case of DCIT, C.C.2, Hyde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available for the assessee to be deposited and the assessee also receiving agricultural income of Rs. 30,000/-. Hence, taking into facts of the case, we delete the addition of Rs. 89,747/- as against the addition of Rs. 2,05,059/- made by the Assessing Officer. Accordingly this ground of appeal of the assessee is allowed. 22. As regards the ground No. 4 pertaining to charging of interest u/s 234A, 234B and 234C, charging of interest under these sections consequential in nature, therefore, the Assessing Officer is directed accordingly. 23. In the result, the appeal being 656/Hyd/12 is partly allowed for statistical purposes. 24. For AY 2007-08, the assessee has raised two substantial grounds, which are as under: "2. The learned CIT(A) erred in confirming the addition of Rs. 20 lakhs disbelieving the explanation with regard to the amount received from M/s Radha Realty Corporation (India) Pvt. Ltd. 3. The learned CIT(A) erred in confirming the levy of interest charged by the Assessing Officer u/s 234A, 234B and 234C of the IT Act." 25. As regards the addition of Rs. 20 lakhs is concerned, the Assessing Officer noted that on the basis of the details furnished by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences. 27. Aggrieved, the assessee is in appeal before us. 28. The learned counsel for the assessee submitted that the amount of Rs. 20 lakhs was received from Radha Realty Corporation India Pvt. Ltd. for acquisition of property in Manchirevula village and to this effect there are clear evidences on record that the amount was received from Radha Realty Corporation India Pvt. Ltd. and also the assessee entered into agreement immediately thereafter. He further submitted that the assessee has also registered the said property in favour of Radha Realty Corporation India Pvt. Ltd. acting as GPA agent. He, therefore, submitted that the amount received does not represent the income of the assessee and cannot be added u/s 68 of the Act. It was also submitted that while initiating proceedings u/s 153C the Assessing Officer himself has mentioned that there is a relationship between the assessee and Radha Realty Corporation India Pvt. Ltd. and signed papers relating to the assessee and Radha Realty Corporation India Pvt. Ltd. were found during the course of search and seizure operation. It was further submitted that the Radha Realty Corporation India Pvt. Ltd. is also assessed to tax by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A, 234B and 234C. Charging interest under these sections is consequential in nature, therefore, the Assessing Officer is directed accordingly. 32. In the result appeal being ITA No. 657/Hyd/12 for the AY 2007-08 is allowed. ITA No. 658/Hyd/2012 for AY 2008-09 33. In AY 2008-09 the AO noticed that the assessee had shown Rs.22 lakhs as liability in the balance sheet as on 31-3-2008 being the advance given for land. The AO had called for the explanation of the assessee regarding this liability but the assessee could not explain. Therefore, the AO treated RS.22 lakhs as unexplained income of the assessee. 34. The AO further observed that for the AY 2008-09, assessee has shown commission earned on sale of lands amounting to RS.4,50,12,50l/- and claimed Rs.3,66,68,2S0/- as payments to various claimants. Most of these payments are in cash. The AO required the assessee to explain the payments and called for the copies of agreements entered into by the assessee with various parties for surrendering of their rights in landed properties situated in Mancherevula and Puppalguda villages and also asked the assessee to show cause as to why these payments should not be disallowed u/s.40A( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39. The learned counsel for the assessee submitted that when there is no material with the authorities to disprove the claim of the assessee, the said amount should not be added and relied on the decision of Hon'ble Rajasthan High Court in the case of Smt. Harshila Chordia Vs. ITO, 208 CTR 208, decision of ITAT, Jaipur Bench in the case of ITO Vs. Smt. Geeta Devi Goyal, 120 TTJ 136 and decision of Hon'ble Delhi High Court in the case of Sona Electric Co. Vs. CIT, 152 ITR 507. 40. The learned counsel explained that the amounts were received as advances and not as income, the fact of which is not disputed by the department. The said amounts were returned to the persons concerned, therefore, neither at the time of receipt nor at the time of payment, they represent revenue items. 41. The learned DR, on the other hand relied upon the orders of the revenue authorities. 42. We have heard the arguments of both the parties and perused the record. We find that the assessee filed letters of confirmation which are placed at page Nos. 73 to 77 of the paper book. It is made clear by the above mentioned persons that they paid the amounts for securing a property suitable for them. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s account books does not represent income of the assessee is on the assessee. Where any sum is found credited in the books of the assessee the initial onus is on the assessee to offer an explanation of the nature and source of cash credit. If the explanation is not found satisfactory or reasonable, the assessing officer can treat such money as the assessee's income from undisclosed source. It is not necessary for the assessing officer to locate the exact source of the credits. The assessee can prove the genuineness of the credits, the identity of the creditor and his creditworthiness by establishing some plausible evidence...The assessee's duty to prove that an unexplained entry in his account books does not represent undisclosed income is not discharged by merely showing that the entry appears in the account of third party and that the party in whose name the amount is credited is not a fictitious party but a real party but the assessee also has to prove further that the entry made in the account book is a genuine entry. It can be said that if the creditors are close relatives of the assessee or his employees the burden of the assessee to prove the creditworthiness of the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed the addition of Rs. 2,95,50,000/-. 45. Aggrieved, the assessee is in appeal before us and filed written submissions. 46. Before us, the learned counsel for the assessee submitted that the assessee did not claim the amount as expenditure, as the assessee is a mere agent and paid the amounts on behalf of DLF, Demi Realtors Radha Realtors. It is submitted that the Assessing Officer accepted the fact that the assessee received the amount as commission or brokerage on sale of lands form various parties and the fact that such payments were made on behalf of others is also not disputed by the Assessing Officer. Therefore, the payments do not represent expenditure incurred by the assessee. The learned counsel submitted that the CIT(A) accepted the fact that the amount received is commission or brokerage. He invited our attention to para 8.3 of the order of the CIT(A) wherein it was mentioned by the learned CIT(A) that 'it is a fact that the assessee is acting as a commission agent to M/s Radha Realty Ltd and in fact he purchases and sells properties on their behalf for commission. The learned counsel therefore submitted that the payments do not represent the expenditure but repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation: i) The name and address of the persons ii) The fact of receipt of the amount from the assessee iii) The reason for receipts of the amount iv) The details of lands with reference to which such amounts were paid. 49. It is seen that the CIT(A) has not disputed the genuineness of the transaction as the CIT(A) has allowed the payments made by cheque. The only dispute is whether the provisions of section 40A(3) would apply to the assessee's case or not. While filing the return of income for the year under consideration, the assessee offered the income from commission under other sources. We find from the record that the gross income was Rs. 61,44,501/- and from their expenses to the tune of Rs. 10,50,149/- were allowed. The Assessing Officer while completing the assessment accepted the computation made by the assessee. We find from the order of the Assessing Officer that the income admitted is adopted as Rs. 51,49,430/- as arrived at in the computation of total income. Therefore, the Assessing Officer accepted the fact that only the net amount is to be assessed and also accepted the fact that the assessee is a mere agent. In the return of income the assessee did not cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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