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TMI Blog2015 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaring additional income of ₹ 40.35 crores as narrated in the letter dated December 8, 2011 filed before the lower authorities, covers each and every issue that has been pointed out during the search as well as post search proceedings. The assessee had paid taxes with a view to buy peace and to avoid litigations. As a matter of record group companies and their promoters have been filing return of income since more than two decades and also paying taxes thereon. It is also clear from the above statement so recorded by the Department under section 132(4) that cash component was there for the purchase of property at Pune. The said cash and cheque component was arranged and funded by the promoters of the company, namely, Sunil and Sneha Kotharis. The source of cash was made available from the sale proceeds on shares of M/s. Ami Builders Pvt. Ltd. and S. K. Projects Ltd. which was declared and offered for tax. In view of the cash flow statement as discussed above, the assessee has explained one to one nexus namely cash funds received from sale of the Bangalore property, and its utilisation for Pune property. The revised declaration of income so filed by the assessee was bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence bad in law. 3. The appellant craves leave to add, alter amend or delete any grounds of appeal on or before the day of hearing ? 4. Rival contentions have been heard and record perused. The facts in brief are that the assessee is a private limited company incorporated on May 20, 2005 and duly registered under the provisions of the Companies Act, 1956. The assessee-company is engaged in the business of construction, development and leasing of properties residential as well as commercial. The assessee had filed original return of income on October 28, 2007 showing total income of Rs. nil. The search and survey operations under sections 132(1) and 133A of Income-tax Act, 1961 was conducted in the cases of M/ s. Pooja Exports and its group concerns. Notice under section 153C of the Income-tax Act, 1961 dated September 29, 2010 was issued. In response to this notice, the assessee filed the return of income on October 28, 2010 declaring total income of Rs. nil. Subsequently the assessee also filed revised return of income on December 21, 2011 declaring the total income at ₹ 2,59,75,000 to buy peace and on condition of no penalty. An assessment order under section 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer took place from July 2006 to September, 2007 whereas the agreement for sale of shares of companies holding properties at Bangalore took place on June 15, 2009. The main grievance of the Assessing Officer was that the assessee has not substantiated the source of cash investment in Pune properties which was funded by Kothari on sale of shares. 6. The learned authorised representative contended that the assessee- company had no earnings during the years under consideration and for this purpose our attention was invited to pages 5 of the paper book which contains profit and loss account and balance-sheet of the assessee-company. Our attention was also invited to the statement of Sunil Kotharis dated July 29, 2009, which has been corrected in subsequent statement under section 132(4) dated September 25, 2009. Our attention was invited to question No. 9 and its reply of the statement dated July 29, 2009. It was submitted that question and answer No. 3 in the statement dated September 25, 2009 clearly explained that major portion of cash relating to sale of shares was received from the financial years 2006-07 and 2007-08. As per the learned authorised representative, even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee who made the admission to show that it was incorrect and the assessee should be given a proper opportunity. Reliance was also placed on the decision of the hon'ble Bombay High Court in the case of Nirmala L. Mehta v. A. Balasubramaniam, CIT [2004] 269 ITR 1 (Bom), wherein it was held that no taxation can be made on basis of a wrong admission. Any item which is not taxable under the law cannot be taxed because the same has been wrongly offered to tax by the assessee. Reliance was also placed on the decision of the hon'ble Supreme Court in the case of Cement Marketing Co. of India Ltd. v. Asst. CST [1980] 124 ITR 15 (SC), decision of the Pune Bench of the Tribunal in the case of Jyotichand Bhaichand Saraf and Sons P. Ltd. v. Deputy CIT [2012] 139 ITD 10 (Pune), Chennai Bench of the Tribunal in the case of Asst. CIT v. RMP Infotech P. Ltd. [2011] 12 ITR (Trib) 581 (Chennai) and in the case of CIT v. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC). 7. In support of the proposition that since the assessee had made a complete disclosure in return of income and offered surrendered amount for purposes of tax, which was accepted and brought to tax, there could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al matrix of the instant case. From the record we found that there was search at Pooja Export group on July 28, 2009, of which the assessee is part, whose case is covered under section 153C of the Act. While filing the return of income in response to the notice under section 153A and after visualising all the materials seized from various premises in different entities, the assessee had worked out the amount of undisclosed income and filed return as under : (a) M/s Pooja Exports-Rs. 12.25 crores. (b) Mr. Sunil Kothari-Rs. 14.80 crores. (c) Mrs. Sneha Kothari-Rs. 13.30 crores. 10. The return of income of Ami Estate and Cornetstene was filed nil as against ₹ 5.19 crores in cash, because both entities were incorporated to acquire the property in the names of the company at Pune. Other than that no activity has been carried out in the said companies. Hence, question of earning any accounted or unaccounted income does not arise. But it does not concern that the cash component was not there in acquisition of property at Pune. The said cash and cheque component were arranged and funded by promoter of the company, in this case Mr. Suni and Mrs. Sneha Kothari. The source o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you in due course. However, in the same property transaction, I have also earned ₹ 11.5 crores on account of sale of the said property which I have not so far disclosed to the Department. This amount of ₹ 11.5 crores is also hereby declared as my additional income for which I shall pay the taxes duly. Similarly, pages 56 to 60 of annexure-A-2 recovered from the office premises of M/s. Pooja Group Rawal Building, Laminton Road and page 19 of annexure A-3 recovered in the said premises relates to a property (Wakad property) at Pune which was purchased by M/s. Ami Estates Pvt. Ltd. and Cornetstene Pvt. Ltd. and part of sale consideration was paid in cash through Shri Rajan Raisoni to Shri B. U. Bhandari. The total cash paid in this transaction was ₹ 10.39 crores in the year 2006-07 and since this money has been paid out of unaccounted income I offer the said amount of ₹ 5,19,50,000 in the hands of M/s. Ami Estates Pvt. Ltd. and ₹ 5,19,50,000 in the hands of M/s. Cornerstene Pvt. Ltd. as additional income and offer the same for taxation. 11. As per this question and answer, the Bangalore property was sold in the financial year 2005-06, cash portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in February, 2010. Hence, the capital gains was liable to tax in the assessment year 2010-11, therefore, correctly offered in the statement under section 132(4) in the assessment year 2010-11. As per agreement for sale and purchase of shares of Ami Builders Pvt. Ltd. and S. K. Projects Pvt. Ltd. dated June 15, 2009, the sale consideration was agreed at ₹ 11.50 crores. ₹ 1 crore was received as advance payment through cheque No. 920776 dated December 10, 2005 and vide Pay Order No. 4364401 dated January 12, 2006 of ₹ 4,47,27,310, balance on account of ₹ 6,02,73,690 was payable by February 28, 2010. All these payments are further corroborated by the statement recorded under section 132(4) dated September 25, 2009 as placed at page 29 of the paper book. 14. The second statement under section 132(4) was recorded on September 25, 2009 of Sunil Kothari. In the statement so recorded the sale transaction of shares in Ami Builders Pvt. Ltd. and S. K. Projects Pvt. Ltd. in respect of the Bangalore property was explained including cash and cheque components. 15. The question No. 3 and its answer reads as under : Q. 3 Please explain how capital gain is claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-Jul-06 5,000.000 17-Jul-06 10.000 18-Sep-06 28.000 28-Jul-06 51.000 26-Sep-06 23,180 7-Aug-06 2,000.000 7-Oct-06 1,700.000 5-Aug-06 20.000 7-Oct-06 62.321 14-Sep-06 500.000 9-Oct-06 800.000 23-Sep-06 2,500.000 11-Oct-06 106.764 14-Oct-06 2,500.000 20-Oct-06 61.400 16-Oct-06 100.000 3-Nov-06 1,000.000 6-Oct-06 200.000 8-Nov-06 1,100.000 6-Oct-06 3,100.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-07 5.000 5-Jan-07 748.875 9-Feb-07 500.000 10-Jan-07 2,400.000 21-Feb-07 7,500.000 10-Jan-07 3,200.000 23-Mar-07 5,000.000 11-Jan-07 4,000.000 29-Mar-07 3,400.000 11-Jan-07 2,500.000 3-Mar-07 10.000 12-Jan-07 2,300.000 13-Mar-07 500.000 12-Jan-07 99.850 23-Mar-07 1,000.000 13-Jan-07 1,742.700 2-Apr-07 600.000 15-Jan-07 4,999.000 12-Apr-07 10.000 15-Jan-07 649.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-Jun-07 5,000.000 28-Sep-07 11.830 19-Jun-07 2,500.000 28-Sep-07 75,000 19-Jun-07 2,500.000 28-Sep-07 25.000 21-Jun-07 2,500.000 21-Jun-07 2,500.000 23-Jun-07 1,994.000 03-Jul-07 4,000.000 04-Jul-07 6.000 05-Jul-07 1,500.000 05-Jul-07 1,500.000 07-Jul-07 1,000.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 106.764 20-Oct-06 61.400 2,730.485 2,800.000 3-Nov-06 1,000.000 6-Nov-06 3,100.000 8-Nov-06 1,100.000 5-Nov-06 2,000.000 8-Nov-06 800.000 19-Nov-06 1,000.000 8-Nov-06 499.250 12-Nov-06 950.000 9-Nov-06 1,500.000 11-Nov-06 1,950.000 9-Nov-06 500.000 21-Nov-06 1,000.000 15-Nov-06 299.550 27-Nov-06 1,000.000 16-Nov-06 900.000 27-Nov-06 300.000 16-Nov-06 800.000 17-Nov-06 10.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17-Jan-07 199.700 20-Jan-07 711.930 22-Jan-07 798.800 22-Jan-07 199.900 24-Jan-07 3,500.000 24-Jan-07 299.550 25-Jan-07 100.000 25-Jan-07 449.325 25-Jan-07 10.200 30-Jan-07 199.700 29,807.505 4,516.000 9-Feb-07 149.775 3-Feb-07 500.000 21-Feb-07 7,500.000 2-Feb-07 5.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jul-07 1,000.000 05-Jul-07 1,500.000 10-Jul-07 10.000 05-Jul-07 1,500.000 07-Jul-07 1,000.000 14-Jul-07 189.000 8,195.000 8,010.000 25-Aug-07 17.000 09-Aug-07 10.000 23-Aug-07 2,000.000 28-Aug-07 70.000 17.000 2,080.000 01-Sep-07 20.000 28-Sep-07 20,000.000 03-Sep-07 4,000.000 10-Sep-07 6,000.000 06-Sep-07 2,000.000 08-Sep-07 10.000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome since more than two decades and also paying taxes thereon. 20. It is also clear from the above statement so recorded by the Department under section 132(4) that cash component was there for the purchase of property at Pune. The said cash and cheque component was arranged and funded by the promoters of the company, namely, Sunil and Sneha Kotharis. The source of cash was made available from the sale proceeds on shares of M/s. Ami Builders Pvt. Ltd. and S. K. Projects Ltd. which was declared and offered for tax. 21. In view of the cash flow statement as discussed above, the assessee has explained one to one nexus namely cash funds received from sale of the Bangalore property, and its utilisation for Pune property. The revised declaration of income so filed by the assessee was bona fide and voluntary and without detection of any irregularities found by the Department. The return was revised with a view to co-operate the Department and to buy peace and to avoid litigation. The disclosure was with a specific plea that no penalty proceedings be initiated under section 271AAA or 271(1)(c) of the Act. 22. Considering the totality of facts and circumstances as discussed above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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