9911796707
TMI Blog2011 (11) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... l, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 40,54,325/- 3. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in enhancing the assessment by way of a further addition of ₹ 60,75,000/- under section 69 as alleged unexplained investment. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the enhancement of ₹ 60,75,000/-. 2.2 Brief facts of the case as contained in the order of the ld CIT(A) are as under:- 'The assessee is a land developer and in consequent to search and seizure operation carried out on 16.11.07, notice u/s 153A was issued in response to which return declaring income of ₹ 4,88,999/- was filed. During the course of search operation various incriminating documents regarding investment in immovable property by way of sale-purchase agreement and construction activity were found and seized. A.O. noticed that for purchase of land for different schemes, the appellant used to prepare two types of agreement. First agreement was the real agreement made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled from persons who have booked plots in this scheme. Thus explanation offered is unacceptable and without any basis. Thus I have no other option but to treat the amount of ₹ 40,54,325/- as unexplained cash credit us/ 68 for assessee has failed to explained of sources of funds. Thus addition of ₹ 40,54,325/- is being made as unexplained cash credits to the total income of the assessee.'' 2.6 Before the ld CIT(A), the assessee first tried to explain the modus operandi of the business. The assessee enters into agreement to purchase the land from the farmers and he pays certain amount. The assessee then starts marking plots and starts receiving the advance. Money so received in advance is paid to the farmer and land is formally transferred in the name of the society. The assessee submitted the list of plot holders alongwith their addresses and submitted that the AO could have made enquiries for verifying the facts. 2.7 The ld CIT(A) after considering the submissions of the ld.AR confirmed the addition after observing as under:- ''2.4 I have considered the argument of the A.R. and have perused the assessment order. It is admitted facts that the 6 bigha 6.5 biswa land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsigned. Considering the facts and the legal position on the issue, the undersigned vide order-sheet entry dated 16.8.10 has asked the A.R. to show cause as to why this addition so made by the A.O. be changed to be made u/s 69 of the Income tax Act, 1961 as unexplained investment in purchase of land, as this purchase of land was not recorded in the books of account and opportunity was given to put up his case. The A.R. of the appellant vide his written submission dated 11.10.10 has replied that provisions of section 69 are also not applicable because nature and source of the investment is fully explained without giving any details as to how the nature and source of the investment is explained. As already discussed, he has completely failed to explain the source of investment. Accordingly, in view of the facts and circumstances and the legal position on the issue under consideration, the amount of ₹ 40,54,325/- paid for purchase of land, which is unaccounted, is held to be unexplained investment u/s 69 of I.T. Act, 1961 and added to the total income of the appellant. Thus addition of ₹ 40,54,325/- is upheld as above. '' 2.8 The assessee has also purchased land in additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t investment of ₹ 60.75 lakhs in purchase of 6 bigha 15 biswa land at village Hathoj for Govind Vatika project developed on 13 bigha 1.5 biswa land is unexplained and accordingly is held to be added u/s 69 of I.T.Act. This will lead to enhancement by ₹ 60.75 lakhs.'' 2.10 Before us, the ld.AR has explained the modus operandi of the business and such modus operandi will be applicable for all the projects. The submissions are as under:- ''1.5 The assessee appellant elaborately explained Modus Operandi as well as his Business Model to the ld AO as well as CIT(A). The ld. AO nowhere in his assessment order has rejected the business model nor has he found the business model explained to be false. The ld CIT(A) has also erred in confirming the action of the ld AO in this regard. The said Modus Operandi is as under:- The assessee appellant started his career as a milk vendor in his village. Thereafter in the year 2000 at the age of 30 years, he started the business of real estate, as he was comfortable dealing with farmers because of his rural background. Assessee appellant's father was an agriculturist. The assessee appellant's area of operation is the peripheral locat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciate the Modus Operandi. Both the lower authorities insisted for specific evidences as if it was a case where regular books of accounts were maintained. Admittedly the income is from undisclosed business and therefore evidences will be of the nature and quality of that of the unaccounted business. Similarly when no books of accounts are maintained, recourse to estimation of income on the basis of assets cum expenditure theory is a settled proposition of law. 1.8 The business model followed by the assessee is also evident from the statements given by Shri Leeladhar U/S 131 of the Income Tax Act, 1961 before the ld. AO on 27.11.2009 in which he has accepted that the advance payment has been made to assessee for the purchase of plot in the proposed scheme before purchase of land.Copy of statements of Shri Leeladhar at PB Page 249-252. It is also evident from the seized records (PB Page 171-178) that assessee used to take payment from persons against bulk booking and payment is made to farmers/sellers of land from the proceeds of bulk booking. The payment is made to Madan lal Sharma ( Govind Vatika Scheme) out of receipts against bulk booking from Chote Mamaji and Surendra Ji . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have received prior to the advance amount of ₹ 5.11 lacs. However, the said payments, in fact, have been made on the following dates: Actual Date of payments Amount (Rs. In Lacs) Seized Document Annexure/ Page PB 15-10-03 0.11 A-20/2 29 18-11-03 5.00 A-20/2 29 24-12-03 6.00 A-20/2 29 11-2-04 4.00 A-20/2 29 16-4-04 7.00 A-20/2 29 20-5-04 5.00 A-20/2 29 1-7-04 5.00 A-20/2 29 16-9-04 5.00 A-20/2 29 27-9-04 9.70 A-20/2 29 1-10-04 4.50 - 6.06 2-11-04 3.38 Total 60.75 From the above, it may be observed that after the initial payment on 15-10-03, the last instalment was paid on 2-11-04. That is after about 13 months. It is already proved that the appellant assessee started receiving money from the said Govind Vatika Project as early as February, 2003. 1.12. Similarly, in respect of land acquired from Shri Madanlal, the payment schedule agreed by as under: Rs.21000 as advance Rs.500000 on 15/03/2003 Remaining amount in 4 instalments of 12 months as under: Ist - 10/06/2003 Iind- 01/09/2003 IIIrd - 15/11/2003 Ivth - 01/02/2004 1.13 Against the above, the actual payments were made to Madan Lal as under: Actual Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date wise account confirm the following: (i) Payment for acquiring the land have been made in a staggered way over a period as against the fact of lump sum payment taken by the lower authorities for making/confirming the additions. (ii) The entire funding for acquiring the land is by receiving the booking amount and thus no capital of the assessee appellant is involved. (iii) The profit of Govind Vatika Project is ₹ 6,22,705/- as declared by the assessee appellant in his return of income. (iv) All the plots in the scheme have been sold by the appellant and no unsold stock was kept by the appellant. 1.18 The ld CIT(A) at page 5 of his order for the A.Y.2004-05 has dismissed the ground of appeal for the specific reason that it is not clear whether receipts precede the date of payment for purchase of land. The apprehension or doubt of the ld CIT(A) in this regard is misconceived and ill-founded as is clear from the above details. 1.19 The details at PB187-190 are prepared from the seized materials only. Similar details (PB 303-308) were also filed before the ld AO and CIT(A). Both the lower authorities rejected the same without making any effort of understanding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on other place he has mentioned that the purchase of land and amounts so paid was not shown in the regular books of accounts. NAME AND ADDRESS OF PLOT HOLDERS:- The Ld.CIT(A) on page no.5 of his order for A.Y.2004-05 has stated that the claim of appellant that he has submitted the name and address of the prospective plot holders and Ld.AO could have made verification from them is irrelevant and misplaced. The Appellant has submitted the list of plot holders of all schemes to the Ld. AO (PB253-281) as well as to the Ld.CIT(A) in which Plot No., Name and address of Plot holders and area of each plot was given. Thus the Ld.CIT(A) is confused that list of prospective plot holders have been given for all the schemes whereas list of actual plot holders of all schemes have been submitted to Ld.AO and Ld.CIT (A). Ld. CIT (A) has failed to appreciate the facts correctly on misconception.'' 2.12 Before us, the ld DR has submitted as under:- i). It is undisputed fact that as per the sale agreements the land purchased by the assessee for his different projects has been purchased in cash. The assessee has himself admitted that he has not maintained any books of accounts for any of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and also their confirmations about the same. It is only then can it be said that the assessee has discharged his onus and the onus has shifted to the A.O. It may be highlighted here that before the A.O the assessee vide his letter dated 09.12.2009 has clearly mentioned that supporting details of the advances and the evidence for the same are not presently traceable. Such evidences were not produced even before Ld. CIT(A). In this regard, it is submitted that though section 68 and 69 of the I.T Act deal with two different situations but for making these sections operative the language in both the sections is exactly the same. Both the sections speak as follows: Section 68- "and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer satisfactory" Section 69- "and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory" In respect of section 68 in a number of cases Hon'ble Supreme Court has held that the burden to prove that the cash credit is genuine is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has not linked the entries on these pages with the cash flow summary submitted by him to the A.O and CIT(A) to explain the source of money invested in the land. In many cases the names appearing in the diary are different from the name of plot owner shown in the list submitted by the assessee. For example, on page 138 of APB for plot no. 26 the name is 'G.Y.Meena' but on page 254 of APB the plot owner is Sunita Meena. Similarly for plot no. 25 ( pg. 137 of APB) diary shows Prashant Joshi but the list on pg. 254 shows Swapnil Sharma. Such differences can be found for plot nos. 21, 22, 25, 26, 32 on pg. 254 of APB and many other plots. Thus, the assessee has failed to explain the link between the diaries and the prospective plot owners. Therefore, the entries in these diaries in no way explain the source of the money used for investing in the land. v). The assessee has submitted the date wise cash statement in item no. 17(page 187 to 190) of the APB. This statement was not submitted either before the A.O or before Ld. CIT(A). Therefore, this kind of analysis is totally new evidence which was not presented before the lower authorities for verification and hence cannot be adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by limitation by 31-12-2009. All assessments were to be completed within 15 months as the effective hearings were started on 18-11-2009. 2.14 Pages no. 187 to 190 contain the details of amounts received from the persons in lieu of plots booked in Govind Vatika Project. In these details, the ld.AR has referred to seized exhibit number in respect of receipts of amounts to show that receipts were verifiable from seized record. The payments have been made to the person from whom the lands were purchased and these are verifiable from the record. Only development expenses mentioned on payment basis are not verifiable from seized record. In the reply vide letter dated 18th Nov. 2009, the assessee stated that he has accepted the bulk bookings and diaries seized will reveal the amounts received during booking. Vide letter dated 18-11- 2009, it was mentioned as under:- ''I have prepared financial results of the complete business cycle pertaining to one scheme called Govind Vatika Project. The complete details will be submitted shortly.'' 2.15 Page nos. 187 to 189 of the paper book contains the details of accounts received in booking of plots. There are bulk bookings. We have notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed unless the assessee was not able to establish it. The assessee made a request to the AO to issue summons Records were seized in the year 2007 but no effort made to analyse such records. We have also gone through the statement of the assessee recorded at the time of search. The Revenue asked the assessee as to whether he has worked for Guman Group i.e. the group which was also doing the real estate business. Search operations were conducted in that group and perhaps search action against assessee was initiated for his association with Guman Group. The assessee stated that Guman Group offered to get the plots booked in their project from intended customers and the group was willing to pay ₹ 20/- per sq. yard while he demanded ₹ 35/- per sq. yard and hence the deal did not materialize. The assessee was also asked the questions about the entries in the documents. The assessee stated that no regular books of accounts were kept and only diaries were maintained. It means that there were relevant documents to ascertain the transactions. It is true that in transaction of real estate, the money passed on is not always the accounted money. The assessee is only a conduit and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oad undertaken. Thus in absence of any reliable evidence produced by the assessee and the prevailing development expenses in private projects development expenses range to 50 to 60 per Sq. Yard. I am left with no option but to disallow 1/3rd development expenses. Thus the profit is in this project is computed as ₹ 19,98,070/- this profit is apportioned at ₹ 6,66,023/- in three F.Ys. 2002-03 to 2004-05 relevant to A.Ys. 2003-04 to 2005-06. Thus addition of ₹ 6,66,023/- is made on account of profit at Govind Vatika Project.'' 3.3 The findings of the ld CIT(A) on this issue is as under:- ''4.1 This issue was appearing in appeal for A.Y. 2005-06. The appellant has made same submission during the year. In view of the detailed discussion and finding given in appeal No. 546/09-10 for A.Y. 2005-06 vide order dated 11.10.2010, in appellant's own case, the disallowance of development expenses is upheld. However, as noted in the appeal for A.Y. 2005-06, the A.O. has added the project estimated by him without giving credit for the profit already shown by the appellant in its return filed u/s 153A. In the return for A.Y. 2004-05 the undisclosed income from Govind Vatika ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses shown on estimated basis on development of the project. The Inspector report has only strengthened the finding of the A.O. Thus the contention of the appellant is devoid of any merit that the only basis for disallowance is Inspectors report. Now coming to the Inspector report, it is noticed that the Inspector has visited the Govind Vatika scheme of the appellant on 7.12.09. The Inspector has specifically mentioned about visiting aforesaid scheme namely Govind Vatika developed by appellant in its report. Accordingly, contention of the A.R. of the appellant that he has doubt about visiting the site by the Inspectors, as thee are more than 50 different schemes in that area, is devoid of merit. When the Inspector has specifically mentioned the Govind Vatika Scheme of the appellant, there was no requirement for the Inspector to make the mention of various other schemes of the nearby area. As regards the contention of not providing opportunity is concerned. A.O. has brought to my notice during the course of hearing that the report of the Inspector was shown to the A.R. of the appellant and he was confronted with the facts mentioned in the report as is evident from order sheet e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Road, but at the same time observes that there is no demarcation for road. At the end of report he mentions that there no road is there on physical verification. It mentions of the boundary and possession of plots but at the same time observes that demarcation is not done. Without demarcation possession and boundary wall are not possible. It mentions that on enquiry from nearby persons they said that no plot facility was given but at the same time observes that house and boundrywall was made. He mentions a remarks that expenses shown by assessee is not fair without indicating any specific details These contradiction further confirms that the report has been written without visiting the location. 4.8 We requested before Ld.CIT(A) (PB360) for cross examining the inspector, on the basis of whose report the Ld.AO has disallowed the expenditure, in the interest of justice and finding out truth but the same has not been done 4.9 This is the first scheme of assessee which he has developed. It is established fact in business that initially the person tries to establish his image/goodwill in the market. Image/goodwill is always earned by giving good quality products at low p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has shown profit of ₹ 26/- per sq. yard and the AO made an addition making the profit at ₹ 52/- per sq. yard,. The ld CIT(A) has deleted the addition though the Revenue is in appeal but the profit per sq. yard as confirmed by the ld CIT(A) is ₹ 26/- per sq. yard. Hence, the fact has been considered while estimating the disallowance to be made. In the real estate business conducted by the assessee, he was to fix the price per sq. yard and hence it is appropriate to ascertain profit per sq. yard then the profit as percentage of turn over. For all the projects, we will be estimating the profit and yard stick will be on the basis of profit per sq. yard. We feel that it will be fair and reasonable to estimate the disallowance for assessment year 2004-05 and 2005-06 at ₹ 1,12,485/- and ₹ 1,77,765/- which is 1/3rd of disallowance confirmed by the ld. CIT(A) as against ₹ 3,37,455/- and ₹ 5,33,395/- made by the ld CIT(A) after considering the profit shown by the assessee in the returns u/s 153A of the Act from the profits as undisclosed income. 4.1 Now we will take up the ground of appeal no. 1 for the assessment year 2004-05 and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has explained the sources then such explanation is to be tested on the basis of human probability. Moreover, to ascertain income under asset theory, one should have the details of expenses and none of the authorities below have determined the outgoings. Hence, we hold that asset theory cannot be applied for estimating the income. However, the facts noticed are to be considered. Since we had already deleted the addition on account of investment, hence the ground of appeal no 1 is disposed off as above. 5.0 Now we will take up the appeal of the assessee for the assessment year 2005-06. 5.1 The first ground of appeal is the same as raised in the assessment year 2004-05 and our finding is the same as given for that assessment year. 6.1 The second ground of appeal of the assessee for the assessment year 2005-06 is as under:- ''2. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the addition of ₹ 1,24,00,000/- under section 69 as alleged unexplained investment. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and is thus unaccounted. Obviously the payment so made by the appellant against the purchase of land totaling to ₹ 12400000/- is also unaccounted. The detail of amount paid/payable is specifically mentioned in this agreement, which comes to total of ₹ 1,24,00,000/-. The appellant has nowhere disputed this payment either before A.O. or even before undersigned. As this purchase of land is unaccounted, it is evident that ₹ 12400000/- has been paid from unaccounted sources, unless the appellant is able to prove partly or fully the source of payment of this money. As already mentioned, on being asked by the A.O. to furnish the details and evidence of the source of the fund, the appellant has given the general reply mentioning stated modus operandi of his business, without commenting on the merits or demerits of the Modus operandi, the A.O. has asked to give specific details of the money stated to be received from various persons alongwith evidence/proof. The appellant has squarely failed to furnish any such details before the A.O. Rather he has specifically mentioned that supporting details of advance and evidence for the same are not presently trading vide his lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of Govind Vatika Project were available and found during the course of search. In respect of project named as 'Gokul Vihar' , all details are not available. However, the society allotted plots and details of names and addresses of such plots holders have been given at pages 260 to 264 of the paper book.. It was submitted that the assessee is not a person of making investment of ₹ 1.24 crores from his own funds and therefore, it was stated that asset theory should have been applied. 6.5 On the other hand, the ld DR stated that assessee has failed to explain the sources of making payment and hence the entire sum is to be added 6.6 We have heard both the parties. In respect of 'Govind Vatka Project', the assessee was able to explain the sources of investment. The assessee is doing the real estate business on the basis of the funds provided by bulk purchaser and retail purchaser. One will have to apply the theory of human probability. One is required to be taxed on the real income and best judgement assessment is to be made on the basis of overall circumstances of the case. Our attention was drawn towards the account prepared for 'Govind Vatka Project'. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is return of income filed u/s 153A for assessment year 2005-06.'' 8.3 We had decided this issue while deciding the appeal of the assessee for the assessment year 2004-05. The Revenue has not raised any ground of appeal for the assessment year 2004-05. Following our finding in the assessment year 2004-05 in which the addition of assessment year 2005-06 was also considered, we hold that an addition of ₹ 177,765/- is to be made. Hence, the ground of appeal 4 of the assessee is partly allowed while ground of appeal no 1 of the Revenue is dismissed. 9.1 Ground of appeal no. 5 of the appeal of the assessee for the assessment year 2005- 06 is as under:- ''5. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in estimating the profits of Brij Vihar Project at 6% of total sales and thereafter confirming the addition of ₹ 2,51,872/- out of the total addition of ₹ 2,64,000/- made by the ld. AO on account of profit of Brij Vihar Project. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than ₹ 35/- per sq. yard for the year in which the offer was given by Guman Group. The assessee also showed profit at ₹ 26/- per sq. yard in Manglam project and the AO made the addition which was equivalent to profit shown by the assessee. The same has been deleted. Hence, the ld CIT(A) in respect of Manglam Project considered the profit rate at ₹ 26/- per sq. yard as normal. Considering these facts, we feel it will be fair and reasonable to restrict the addition which is 1/3rd of the profit shown by the assessee. However, we also accept the accounting adopted by the assessee as the assessee has adopted percentage completion method. In respect of 'Brij Vihar Project', the assessee has shown profit of ₹ 12,128/- for the assessment year 2005- 06 and ₹ 1,97,458/- for the assessment year 2006-07. Hence, the addition confirmed for the assessment year 2005-06 will be ₹ 4,010/- and ₹ 62,486/- for the assessment year 2006-07. Hence, the ground of appeal of the assessee is partly allowed while ground of appeal Revenue is dismissed. 10.1 The sixth ground of appeal of the assessee for the assessment year 2005-06 is as under:- ''6. In the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2005-06. 11.2 The assessee has shown profit at ₹ 26/- per sq. yard and disclosed the profit of ₹ 4,39,686/-. The AO made the addition equal to ₹ 4,39,686/-. The ld CIT(A) held that assessee has shown undisclosed income from such project in the return filed u/s 153A and hence the same is to be reduced. Thus the addition made by the AO was deleted. 11.3 Considering our findings for 'Brij Vihar Project', we feel that estimation made by the assessee is to be further increased by a sum which represents 1/3rd of the profit shown. We therefore, confirm the addition of ₹ 1,46,562/- for both the assessment years 2005-06 and 2006-07 at ₹ 73,281/- each. Hence, the ground of appeal is partly allowed. Assessment year 2006-07 12.1 The first ground of appeal raised by the assessee is the same as raised in assessment year 2004-05. 12.2 Following our findings for the assessment year 2004-05,we hold that the assets found during the search are to be considered for coming to conclusion of estimated income. However, in absence of details of outgoings, it is not possible to ascertain income from income and expenditure account. 13.1 Ground of appeal no. 2 is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. 3.4 The seized documents clearly show that the transaction belonged to HUF. There is no evidence with the Department to hold that the investment is of the appellant. 3.5 The HUF is a separate entity and is assessed by his jurisdictional AO vide PAN AAGHR2433E. The HUF has been filing its return since long back and return for the A.Y.2006-07 has been filed on 31.03.2007. The payment has been made through Bank Statement of Ranjeet Singh Yadav HUF only. 3.6 In the agreement (PB 27-28) the payment has been mentioned to be through Cheque No. 094282 dt.06.10.2005 of Jaipur Nagaur Anchalik Gramin Bank Branch Jhotwara ,Jaipur. All the statement of Bank Accounts (PB309-331.) of the assessee appellant were with the ld AO who has failed to verify this payment from the said Bank Statement. On verification it would have been found that assessee appellant has not made the payments. If the ld AO would have cared to examine the Bank Account of Ranjeet Singh Yadav HUF, he would have found the payment in the said Bank Account. Thus, ld AO's action is base less and contrary to facts on record. 3.7 Income Tax can be charged U/S 4 read with section 2(31) of The Income Tax Act, 1961. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is 2006-07 and the Revenue if it feels that the action is to be taken against HUF of the assessee then it will have legal remedy still available. Hence, the addition of ₹ 21.00 lacs is restored back on the file of the AO. 15.1 The fourth ground of appeal of the assessee is against confirming the addition of ₹ 66,542/- in case of Brij Vihar Project. 15.2 The first ground of appeal of the Revenue is against deleting the addition of ₹ 2,64,000/- to ₹ 66,542/-. 15.3 This issue stands decided while disposing off the appeal for the assessment year 2005-06. Following our finding that addition of ₹ 62,486/- is to be retained. The ground of appeal of assessee is partly allowed while ground of appeal of Revenue is dismissed. 16.1 The fifth ground of appeal of the assessee for the assessment year 2006-07 is as under:- ''5. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in estimating the profits of Shubham Vihar Project at 6% of total sales and thereafter confirming the addition of ₹ 3,91,119/- out of the total addition of ₹ 7,52,320 /- made by the ld. AO on account of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 6,52,406/- in Shubham Vihar Project. 18.2 The first ground of appeal of the Revenue is that the ld CIT(A) has erred in giving relief of ₹ 99,914/- in respect of Subham Vihar Project. 18.3 The issue has been considered while disposing off appeal for te assessment year 2006-07. The addition is reduced to ₹ 33,315/-. Hence, the ground of appeal of the assessee is partly allowed while the ground of appeal of the Revenue is dismissed. 19.1 The third ground of appeal of the assessee for the assessment year 2007-08 is as under:- ''3. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the addition of ₹ 3,75,000/- under section 69 as alleged unexplained investment out of the total addition of ₹ 23,75,000/- made by the ld. AO under section 68. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 3,75,000 /- .'' 19.2 The second and third grounds of appeal of the Revenue are as under:- ''2. Whether on the facts and circumstances of the case, the ld CIT(A) (Central), Jaipur has erred in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copy of the Jamabandi still indicate the name of the owner as Sh. Kesara and not the appellant and in absence of any other evidence in favour of A.O's finding and in absence of any further comments or evidence furnished by the A. O. during the appeal hearing to support the A.O.'s finding the addition to the extend of ₹ 20 lakhs is not sustainable and is therefore deleted. However, as appellant has squarely failed to furnished the nature and source of payment of ₹ 3,75,000/- paid as advance for purchase of aforesaid plot and as already discussed in appeal for A. Y. 2006-07 regarding argument of contended receipt from advance booking being not tenable, the addition of ₹ 3,75,000/- is hereby confirmed as unexplained investment given as advance for purchase of land, instead of u/s 68 done by the A. O. after giving opportunity for the same vide order sheet entry dated 16.08.2010 and considering the reply of the appellant as is held in appeal for A. Y. 2006-07.'' 19.4 The ld.AR has submitted as under:- ''2.3 The assessee appellant alongwith Mr. Sharif had entered into an agreement with Mr. Kesara for the purchase of land in Machwa Tehsil, District Jaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) in deleting the addition of ₹ 20.00 lacs is fully justified and is based on facts on record, therefore, appeal of the Department in this regard deserve to be dismissed.'' 19.5 On the other hand, the ld DR has relied on the order of the AO. 19.6 We have heard both the parties. The ld CIT(A) has clearly mentioned that the AO has not furnished any evidence or comments during appellate proceedings. The appellate proceedings were attended by the AO. Hence, the ld CIT(A) was justified in deleting the addition of ₹ 20.00 lacs. In respect of balance sum of ₹ 3.75 lacs, we have noticed that assessee has disclosed his undisclosed income from profits. We have also enhanced the profit in different projects and thus the source of ₹ 3.75 lacs stands explained. The addition of ₹ 3.75 lacs is deleted. Hence, the ground of appeal no. 3 of the assessee is allowed while ground of appeal nos 2 and 3 of the Revenue are dismissed. Assessment year 2008-09 20.1 The first ground of appeal has not been pressed as per page no. 47 of the written submission. 21.1 The second ground of appeal is that the ld CIT(A) has erred in confirming the addition of ₹ 9,58,500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier loan. However, the appellant has failed to give the name and address of the persons from whom contended loan was taken. Similarly, he has failed to give the name and address of the persons to whom earlier loan was to be repaid. Now during the course of assessment proceedings, the appellant has taken completely different stand. Now it was claimed to be the advance against plot purchase, instead of loan and that too from single person instead of 7-8 persons. There is no earlier transaction with Sh. Leela Dhar. Only one transaction that too of as high amount as ₹ 10 lakhs has been now shown. It is quite difficult to believe that the appellant could not remember the name of the person from whom such heavy advance was taken. Accordingly, the contention in the assessment proceedings has been rightly rejected by the A.O. and he has rightly held the cash found of ₹ 9,58,500/- as unexplained. The addition is therefore sustained.'' 21.3 Before us the ld.AR has submitted as under:- ''7.3 The above amount of cash was found and seized during the course of search operations conducted on 16/11/2007 at the residential premises of the assessee. 7.4 During the course of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) are misconceived and deserved to be rejected. 7.9 Both the lower authorities have not doubted the identity and credit worthiness of Shri Leeladhar.However, doubt on the genuineness of the transaction is arbitrary and baseless. 7.10 Only on the basis of statement the addition cannot be made . 7.11 Reliance is placed on the following decisions:- (i) Hon'ble Apex Court in Pullangode Rubber Produce Co Ltd Vs State of Kerala [1973] 91 ITR 18 has held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. (ii) Gargidin Jwala Prasad vs CIT (1974) 96 ITR 97 (All) Held that the addition merely based on statement of witnesses cannot be made. iii) CIT Vs G.Krishnan (1994) 210 ITR 707 Mad. Held that addition cannot be made merely on the basis of statement. iv) ACIT v/s Ashok Kumar Jain 32 TW 115 (ITAT Jaipur) It is open to the person who made the admission to show that it is incorrect. v) Shri Rajendra Kr. Kedia V/s DCIT 22TW,506(ITAT, Jaipur) No valid addition can be made on the basis of such invalid confessional statement; particularly when s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2006-07 and as per our finding, an addition of ₹ 97,069/- is confirmed. 22.3 Before parting with the appeal, we would like to place the following facts. ''III. Position of declared income and assessed income during various years is as follows:- A.Y. Income declared in IT return (in response to notice u/s 153A) Income assessed by AO vide order u/s 143(3) 2008-09 6,60,241/- 1,10,48,061/-* 2007-08 2,39,610/- 33,66,930/- 2006-07 12,82,238/- 1,56,18,400/- 2005-06 10,63,902/- 1,94,08,770/- 2004-05 4,88,999/- 52,09,350/- 2003-04 84,755/- 12,71,780/- TOTAL 3819745 55923291 TOTAL(After Rectification) 47323291 *Income has been subsequently assessed at ₹ 24,21,060/- by rectifying the mistake u/s 154 of The Income Tax Act, 1961 on 02.02.2010. 1.24During the course of search total assets found were as under:- Asset Found Undisclosed Remarks Cash Rs.9,58,500/- NIL Note 1 Jewellery Gold 153 gms. Silver 750 gms. NIL Note 2 Cars Accent car, RJ-14-8C- 6287 NIL Note 3 Suzuki Motor Cycle One NIL Note 4 Immovable Property in the name of Ranjit Singh Yadav 1. 146, Advadpuri Kalwar Road 2. 83, Kalyan Kunj, Kalwar Raod, Jaipur (400sq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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