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TMI Blog2018 (6) TMI 1692X X X X Extracts X X X X X X X X Extracts X X X X ..... efore they cannot be considered as the final sale price. This argument does not merit any consideration for the reason that AO has divided the profit based on the date of sale of the plots when they are registered. AO himself has stated that up to 31st October 2001 only 12 plots was sold and balance 4 plots were sold later on. Further the assessee has also borrowed jointly sum from somebody on interest and interest cost thereon as been reduced from the profit. With respect to the sale of 12 plots, the assessee has complete details about the name who bought the plot of land, the documented sale price etc. These facts are not disputed. Therefore based on all these facts, it cannot be said that the papers are merely an estimate or projection. Assessee is merely a broker and whatever profit arises would squarely falls on the shoulders of the owner of the property and not on the broker - On the similar facts and circumstances in the case of the assessee for different years, we have already dealt with this argument. For the similar reasons we also reject this contention of the assessee. Furthermore we are of the opinion that documents shows emphatically and clearly that in the whole proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges paid for EDC, the assessee has not given any evidence of payment of such charges - assessee does not have any evidence that assessee has incurred these expenditure. Therefore, there is no information available that assessee incurred this expenditure. Therefore, we do not find any infirmity in the order of the Ld. assessing officer in not granting deduction of this amount from the gross profit shown by the assessee. We do not find any infirmity in the order of the lower authority in taxing the 50 % of the profit based on information contained in the loose papers found during the course of search. However, with respect to the determination of overall profit we direct the ld AO to reduce the sales consideration by 1985000/- because of difference in sale price and further adjustment because of compensation paid of 5.50 lakhs. Accordingly ground no three of the appeal is partly allowed with above direction. X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of telescoping while confirming the addition made by Ld. AO. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961." 4. Brief fact of the case is that the assessee is an individual. Search and seizure operation was conducted at the residential premises address of the assessee on 04.08.2005. The assessee is a partner in a real estate broker concern namely M/s. Reliance Estate Agency along with Shri S.D. Kathuria. During the course of search, certain loose papers were found and seized from residential premises of the assessee. Consequent to that notice u/s 153A was issued on 08.05.2006. Assessee filed the return of income on 16.06.2006 showing income of ₹ 216650/-. The assessment u/s 153A read with section 43(3) of the Act was passed on 24.12.2007 determining the total income of the assessee at ₹ 2760955/-. The only addition made in the hands of the assessee is with respect to undisclosed income at ₹ 2544305/- of commission received and not disclosed in the regular books of accounts of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of company is Ashwani Mahajan. Two sale deeds were executed for the sale of a total area of 10083.33 sq. yds for a sale consideration of ₹ 38,00,000. The details as per sale deed are shown below- Table 1 : Details of sale of plot no. 42, sector-6, Faridabad Property sold Name of seller Name of Buyer Date of sale deed Sale consideration Stamp duty One half Of industrial Plot no. 42, Sector- 6 measuring 10083.33 sq yds M/s Gallant Engineering Enterprises Pvt Ltd through its MD Sh. Sudhir Kumar Bahl M/s Avon Tubetec Pvt Ltd through Its Director Sh. Ashwani Mahajan 29th March 2000 1900000 294500 One half Of industrial plot no. 42, Sector- 6 measuring 10083.33 sq yds M/s Gallant Engineering Enterprises Pvt Ltd through its MD Sh. Sudhir Kumar Bahl M/s Avon Tubetec Pvt Ltd through its Director Sh. Ashwani Mahajan 21st June 2000 1900000 294500 As per the submission of Sh. Ashwani Mahajan the above property was purchased by him through Sh. Navneet Jhamb of M/s Reliance Estate Agency. 4.4 From the above facts it can be seen that "the Amounts to be paid by Ash' actually means amount to be paid by Ashwani Mahajan. This is further corrobora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. It is respectfully submitted that these documents seem to have come into existence in the ordinary course of business of property.... Page 53, 54 & 55 some transaction to be got done of sale and purchase of assessee as dealer to property No 42 of Sector 6 Faridabad between the buyer and seller. It is quite evident from the documents itself that assessee is never a partner or sharing profit. In fact this property is disputed property And since the dispute has not yet been finalized hence assessee has received no commission from the buyer. The submission of the assessee has duly been considered. But a perusal of the pages 50 to 55 of A-1 give a detailed account of the transaction with a break-up of cheque amounts received and cash amount paid by Sh Ashwani Mahajan to Sh S.K Bahl as also Sh Navneet Jhamb. In fact the deed has been registered on 29.03.00 itself. Once deal has been finalized there is no question of deferment of payment of commission. As per practice, commission is paid on the date of the registration itself. The assessee‟s plea therefore has no locus standi. In fact a perusal of the documents very clearly state that ₹ 60.00 lacs has been paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spicion of Ld. A.O. about any profit/commission and that too earned by the appellant and that too in the year under appeal. Your good self would kindly see from these documents that Page 55 of this document would show that it was dated 24.12.97, does not bear even the name of the assessee, and is beyond the period covered by section 153A i.e. 6 years preceding the date of search on 4.8.2005. Page 54 of these document would show that it is MOU between the seller and the buyer and appellant is neither the seller nor the buyer as your good self would kindly see i.e. seller is M/s 'Gallant Engineering Enterprises (P) Ltd. and the buyer is M/s. Avon Tubetec (P) Ltd. Rather page 54 of this document would show that this is also dated 24.12.97 i.e. beyond the period covered u/s 153A as the date of search is 04.08.2005. Page 53 is the copy of page 54 and is also dated 24.12.97 and as submitted above, it does not have the name of the assessee. Page 51-52 of this document contain some calculations and how Ld. A.O. could arrive at a conclusion so as to make an addition in the hands of the assessee and that too of ₹ 2544000/- and that too in the year under appeal is not kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortion of the subject property was transacted in the previous year relevant to A.Y. 2001-02 and therefore by any stretch of interpretation, no income can be brought to tax in the hands of any person including the assessee in A.Y.2000-01 under any circumstances. This is an attempt on the apart of the appellant to show that viewed from any angle, the addition made by Ld. A.O is not sustainable and may not amount to any admission whatsoever. It is also a matter of common knowledge that on a property which has been transacted, according to Ld. A.O., at ₹ 1.68 crores, commission cannot be 25.44 lacs as held by Ld. A.O. Rather page 55 of this document would also show that the commission at the figure of "3.60" which apparently belies the claim of Ld. AO. This is being shown as an attempt to highlight as to how and to what an extent, Ld. A.O. could be arbitrary and unrealistic qua the assessee making the impugned addition by misreading and mis-appreciating the evidences. Ld. A.O. has not brought any material or evidence on record either on the basis of the documents referred or on the basis of any other enquiry to establish that there was profit of "₹ 50.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, could not be sustained. Atul Kumar Jam Vs. DCIT 64 TTJ 786 (Del): 14 DTC 681 Documents seized during search not being clear as to whether items were payments or receipts or some other calculation, so no addition could be made on the basis of such a dumb documents. Jagdamba Rice Mills Vs. ACIT 67 TTJ 838 (Chd.) The word "Document" u/s 32 of the Indian Evidence Act, 1872 means any matter written expressed or described upon substance by means of letters, figures etc. intended to be used for recording that matter. Therefore, if the piece of paper seized during search is considered in light of the definition of the word "document" as given in the Indian Evidence Act and General Clauses Act it is found that the said paper contains jottings of certain figures but the same does not describe or express the substance of any transaction and even if the said paper has been seized from the possession of the assessee, the contents thereof are not capable of describing the transactions the way A.O. has deciphered them. Atul Kumar Jam Vs. DCIT 64 TTJ 786 (Del): 14 DTC 681 In the absence of concrete / positive / cogent evidence against the assessee, no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y profit/commission earned by the appellant in the year under appeal. According to AR page 55 of annexure A-l is dated 24-12-1997 and does not bear the name of the assessee and is beyond the period of 6 years preceding the date of search and therefore, is not covered by the section 153A of the Act. Further page 55 is a MOU between the seller and buyer and the appellant is neither the seller nor the buyer. AR has also submitted that assessee is in the business of real estate commission agency as partner of M/s Reliance Estate Agency in which number of persons meets the assessee with different facts and figures, calculations are made tentative profit or losses are worked out. Therefore, to ascribe any income on the basis of such jottings in the hands of assessee cannot be justified. AR has also submitted that M/s Gallant Engg. Electrical (P)Ltd is the owner of plot 42, sector 6 Faridabad and therefore, if at all there is any profit, same cannot be treated to have been earned and realized by the assessee. Moreover, the subject property was transacted in the previous year relevant to AY 2001-02 and therefore, no income can be brought to tax in the hands of any person including the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to 2000-01 and therefore, addition cannot be made in the current asstt year, same is not acceptable for the reason that as noted in the asstt order deed has been registered on 29.03.2000 and once a deal has been finalized there is no question of deferment of payment of commission. In view of the discussion made above and also for the reasons discussed in the asstt order and AO's report dated 28-01-2009 enclosed with this order, various contentions of AR are rejected and the addition of ₹ 25,44,305/- is upheld. This ground of appeal is dismissed." 6. assessee aggrieved with the order of the ld CIT (A) has preferred an appeal before us. 7. The ld AR contested ground No. 3 of the appeal wherein the action of the ld CIT(A) in confirming the order of the ld AO in making the addition of ₹ 2544305/- on account of commission earned is challenged. The ld AR submitted that the ld AO has made an addition of ₹ 2544305/- because of alleged commission received by the assessee in respect of sale of plot No. 42, Sector 6, Faridabad. On the basis of Page 50 to 54 of Annexure-A1 on the ground that above plot was sold to Mr. Ashwani Mahajan, by M/s. Gallant Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted of the unaccounted sale price in the hands of the seller there is no reason that addition can be made in the hands of the commission agent. He further referred to the order of the ld CIT (A) stating that two-sale deeds were executed for the sale consideration of ₹ 38 lacs. He submitted that out of that ₹ 60 lacs are allegedly paid on 21.06.2000 which does not fall even otherwise in the impugned assessment order. He further stated that all these documents, which was seized showing the transaction of the immovable properties, are not conclusive proof of on money transaction and therefore no addition can be made u/s 69 of the Act based on those documents. He relied upon the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Prem Prakash Nagpal. He further referred to the statement of Shri Navneet Jhamb recorded on the date of search u/s 132(4) of the Act. He referred to question No. 13 and 14 of the statement wherein, it has been stated that the assessee is a mere broker. He further referred to the remand report dated 28.01.2009 also. His main contentions were that the documents seized do not show any profit resulted to the assessee. Another conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to him. a. The first contention of the ld Authorised Representative is that the loose papers found during the course of search does not belong to the assessee, does not contain the signature of the assessee and there are no corroborative evidence found during the course of search with respect to the income of the assessee. Undisputedly the above papers were found from the assessee and therefore, the presumption would be available to the revenue that the documents are found in the possession or control of the assessee in the course of the search and therefore, they belong to the assessee and the contents of those papers are true. The Provisions of section 292C of the act goes against the assessee. Therefore, the above arguments of the assessee are rejected. b. Second dispute raised by the assessee is that there is no indication that this income is chargeable to tax in the current year. For this the ld Assessing Officer has given the reason that as sale deeds have been registered during the year, the profits have accrued to the assessee then in absence of any other contrary evidence. There is no reason to not to accept the finding of the lower authorities that the commission/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible in the real estate transaction that the profit is not always earned by the real estate owner. In the present case, it is undisputed that unaccounted money has been transacted on sale of the above-impugned plots. It is also clear that assessee has earned 50% profit of ₹ 2544305/-. Off course the documented consideration paid by the buyer is chargeable to tax in the hands of the seller only. However, the documents shows that there are on money transactions on the sale of the plots where the profits are shared by persons where assessee is one of them having 50 % share therein. These evidences coming out of the seized documents are not controverted by the assessee by producing strong evidences. Hence, this argument is rejected. e. The argument of the ld AR that assessee is merely a broker and therefore could not have earned such profits. This argument is not at all supported by any evidence. It is also possible that the broker will also earn profit, the moment he takes the risk and reward of the transactions. This is evident in the present case. On page No. 52 the name of the assessee appears in short form, which itself shows that assessee has taken the role of more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 6.2 the facts stated in that decision does not apply to the present case before us. In this case the documents were found from the assessee, wherein, the name of the assessee is also mentioned in short form, assessee failed to explain the contents of the documents including the paper showing the transaction as well as the contents of the MOU. Hence, the reliance on those decisions by the ld AR is misplaced. In view of this, we reject the contention of the ld AR, uphold the orders of the lower authorities confirming the addition ₹ 2544305/- as undisclosed income of the assessee, and dismiss ground Nos. 1 to 3 of the appeal of the assessee. 11. Ground Nos. 4 and 5 are not agitated before us and therefore same are dismissed. 12. Further, ground No. 6 on charging on the interest is consequential in nature and therefore, it is dismissed. 13. Hence, ITA NO. 1609/Del/2011 for Assessment Year 2000-01 filed by the assessee is dismissed. ITA 1608/Del/2011 Assessment Year 2001-02 14. This appeal is preferred by the assessee against the order of the ld CIT (A)-1, Ludhiana dated 28.01.2011 in the appeal preferred by the assessee against the order of the ld ACIT, Central Circle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pertaining to this year. Therefore, against the income declared in the return of income of ₹ 426750/- the total income of ₹ 1124584/- was assessed. 17. The assessee has challenged the addition vide ground no 3. The other grounds of appeal are not pressed. In view of this we dismiss ground no 1,2 & 4 to 6 of the appeal. 18. Adverting to Ground no 3, brief fact shows that during the course of search on 04.08.2005 certain documents were found as Annexure A1 and Annexure A2 from the residence of the assessee relating to the sale of plots at Faridabad. On enquiry of the Managing Director of the seller, that M/s. Reliance Estate Agency was appointed for publishing the advertisement and land was to be sold to one private limited company for ₹ 1.5 crore. It could not be. Subsequently, the above plot was sub-divided in to 16 industrial plots and same were sold to different persons. The total sale amount was ₹ 1, 30,01,500/- as per the sale deed. The average rate per sale deed was worked out and same was compared by AO with seized documents in page 56 to 62 of Annexure-A1 and page 13 to 17, 53 to 57 of Annexure A-2. According to that, the ld Assessing Officer no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vill. Jharsentli, Faridabad. Study of these documents as also the statement of Shri Navneet Jhamb dated 16.09.2007 (Copy attached as Annexure "A‟) has revealed that there was a plot of land bearing Khasra No.29, KilaNo.4/2 (7-0), 5(7-17), Khasra No.28/1 (8-0), 2/1 (2-3), 2/2(5-17), 3/1(5-17), 3/2(2-3), 4/2(4- fl), 5/2(-015), 6/2(0-16), 6/3(0-18), 7/1 (4-0),8(7-18),9(8-0), 12(7-19), 13(7-11), 14(8-0), 15/1(2-5), 26(0-16), 4/2(07), 5(7- 17), total area measuring 89 Kanals 13 Marlas situated at Village Jharsentli, Tehsil Ballabgarh, Distt. Faridabad, which had been acquired by the state of Haryana for development of Sector- 59. The land was owned by M s Indo American Electricals Limited having registered office at 21, Old Court House Street, Calcutta. Sh. Manmohan Singh who is resident of Ekomkar Farms, Kapashera, Bijwasan, New Delhi was the Managing Director of the company. Enquiries were made with S. Manmohan Singh in this regard. It has been learnt from the documents submitted by S. Manmohan Singh before the investigation wing that M/s Reliance (Estate Agency w as appointed by M s Indo American Electricals Limited" for publishing the advertisements and procuring bids fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 1980000 B-l 10KV - do- Indication Instruments Limited through its Director Sh. T.M. Lalani 16-Jul- 01 1980000 B-2 2K -do- Meta Forge (India) 19-Oct-01 500000 B-3 2K - do- Survival Die Cast Pvt Limited through its Director Sh. R.B. Singh 28-Feb- 01 490000 B-4 2K 2M - do- Reliant Engineer 23-May- 02 200000 B-5 2K 2M -do- Sh. P.P. Nagpal 27-Apr-01 495000 B-6 10K -do- Gurdayal Nirman 30-Dec- 1800000 7M Udyog Pvt Ltd 02 1500000 B-7 10K 13M -do- Sh. P.P. Nagpal 23-May- 02 B-8 13M -do- Dua Auto Components (P) Ltd 23-May- 02 800000 The sale amount detailed in column 6 above has been extracted from the sale deeds pertaining to the various plots (plot Numbers are detailed in column 1 of Table 1 detailed on pages 3 & 4 of this order) of land in village Jharsentli An examination of the sale deeds show that the average sale rate as per the sale deeds comes to 478 per Sq.Yds for the plots tabulated below:- Plot No. Sold to Total Cheque Area Rate per Sq.Yds Date of sale. A1 GLVERMA 1331000 495000 1210 409 08.11.2000 A2 GLVERMA 1331000 495000 1210 409 28.02.2001 A3 GLVERMA 1331000 495000 1210 409 28.02.2001 A4 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00000 30891800 45214 Electricity 100000 Land Sold AVG 1029 per Sq Yrds Paid msingh 407760 2200000000000 Total cost of project 12448040 1.11.2001 Land 200000000 Paid to Navneet 207760 32448040 Land for sale 45375 Sq.Yds From project paid to Costing 717.6547 Manmohan Singh 2550000 .... Navneet 207760 Total selling price 45891800 Cost Price 32448040 Cost price 20000000 Gross profit 13443760 Expenses 11954040 Lalani t.m. TML due Principle 1277000 1000000 INT Security Oct.01 44000 Tentative profit 12166760 Sirsa 50000 Road expenses 400000 1422575 intt calculated but settled at 10000000 Cost price 32448040 Gross profit Interest Net profit Nov to jan 02 17400 Tentative MS 6083380 250000 5833380 Security NJ 6083380 750000 5333380 Gift to com 25000 Paid to msingh at Hospital on 19jan 50000 ✓ Paid to msingh 500000 Paid msingh 200000 Paid com 100000 Paid for coming 37000 Paid to ctp 50000 4.4 It is clear from the above that the calculations detailed on page 61 of A-l pertain to sale of plots A-l to A-8 and B-l to B-8 subdivided from the land belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount to get a profit of ₹ 1,12,88,000/-which has been divided equally between Sh Navneet Jhamb and Sh Manmohan Singh. 4.7 An examination of page 57 of A-1 shows a final revised profit statement prepared as "new calculation‟. The first column calculates total profit of ₹ 1,21,66,760/- with a profit of ₹ 60,83,380/- in the hands of Navneet Jhamb and Manmohan Singh. The amount of ₹ 1,21,66,760/-has been taken from page 61 of A-l and is n account of profit details of 12 plots sold upto 31.10.01 The second column calculates total profit of ₹ 66,40,601/- with a profit of ₹ 33,20,300/- in the hands of Navneet Jhamb and Manmohan Singh. These are profit details of 4 plots sold after 31.10.01. 4.8 A perusal of the all the aforesaid documents shows that these is some difference between figures detailed on page 61 and page 57 of A-l. Sale deeds were examined and it was seen that the sale deeds of plot No.B-4, B-6, B-7 and B-8, shows that the cheque amount actually received is ₹ 43,00,000/- (2,00,000+ 18,00,000+ 15,00,000+ 8,00,000) as against ₹ 62,85,000 (5,00,000+19,80,000+18,25,000+19,80,000) shown on page 61 referred to above. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 08.11.2007 to furnish the complete details/reply in respect of above seized/impounded documents. The assessee has not furnished any details/explanation in respect of above documents. The assessee has filed reply vide letter dated 16.11.2007 with the submission that, "Reply relating to document found during the search at the residence of the assessee i.e. pages 56-62 and Page 46 of Annexure A-1 and Page 13-17 and Page 53-57 of Annexure A-2 sale of Indl. Plot Vill. Jharsaitly, Faridabad. Page 50 to 55 of document A-1, Page 45 to 48[ of document A-1 is being given during the year of search i.e. assessment year 2006-07. Remaining details are still under preparation, therefore you are requested to please adjourned the case to a date convenient to yourself. The case was adjourned to 20.11.2007. No one attended on 20.11.2007. On 21.11.2007 Shri N.K.Handa, CA/AR present and filed letter seeking adjournment. He was finally asked to give complete details and the case was adjourned to 23.1 1.2007. On 23.11.2007 Shri Raj Kumar Agarwal, CA attended and again requested for adjournment. The case was again "- adjourned to 27.11.2007. 4.9.3 On 15.11.2007, the assessee has file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plots and rough calculation/tentative prices and projections of the sale prices and Page 57 to 60 are repetition of Page 61 of doc. A-1 making different calculation at different stages containing rough calculation/ tentative/ projection/ expenses incurred etc. After going through all these papers, no profit may be said to have been received by the assessee out of the deal and therefore no addition can be made. 4.9.4 The assessee has filed part reply on 27.11.2007 and further part reply vide letter dated 03.12.2007 in the assessment year 2006-07 with the submission that, Your goodself would kindly appreciate that the amount of ₹ 1,09,23,399/- relating to Indo American Electricals Limited (IAEL) deal worked out as mentioned in your notice is not correct and as Explained separately after taking sales price and cost as mentioned in those papers there is hardly any surplus out of papers/workings relating to these transactions. \(This is being submitted without prejudice to the fact that the assessee was handling this transaction only on commission basis as property dealer without having any interest as owner/partner in the deal).) Details reply with evidence in this connecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een shared in the ratio of 25:75 ratio. (c) The calculation of cheques and cash amounts received on plots have also been made on page 55 of Annexure A-2. The front side of page 55 is a hand written pagecontaining calculation of cash generated from the sale of plots except plot No B4, B6, B7 &B8. These figures are identical to the figures detailed on page 61 of A-l. Here out of a total sum of ₹ 2,39,20,800/-87,15,000/- has been received by cheques and 1,52,05,800/- has been received by cash. From this an amount of ₹ 1,19,54,000/- and payments of ₹ 23,50,000/- made to Manmohan Singh have been deducted. The backside of page 55 details profits earned on the remaining plots i.e B4, B-6, B-7 & B- 8. Sale amount of these plots has been calculated at ₹ 2,02,23,000/- and further an amount of ₹ 62,85,000- has been shown as payable to M/s Indo American Electricals Ltd. This amount is also the sum of the cheques component of sale consideration of plots B4, B6, B7 & B8 as detailed on page 61 of A-l. An amount of ₹ 26,50,000/- on account of cash expenses has been further subtracted from this amount to get a profit of ₹ 1,12,88,000/- which has been div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the facts and circumstances of the case Ld. A.O. has erred in and on facts in making addition of ₹ 23,37,343/- as undisclosed profit merely on the basis of surmises and conjectures and wit out any evidence or basis and without affording adequate opportunity of hearing." 5.1 In support of this ground of appeal, the learned AR vide his written submissions has submitted as under: "GROUND No. 4: Ld. A.O. has made addition of ₹ 23,37,343/- allegedly earned by the assessee on sale of industrial plots at village Jharshettly, Faridabad on the basis of page 56 to 62 of Annexure AI and page 13-17 and page 53-57 of Annexure A2. According to ld AO, the assessee during the year under appeal shared the alleged profit which Shri Manmohan Singh of M/s. Indo American Electrical Ltd. the working of this alleged profit has been given by Ld. A.O. in the table made at page 9 of assessment order. It is respectfully submitted that Ld. A.O. has grossly misread and mis-appreciated the seized documents as shown hereunder and on the basis of such jottings, no addition could be possible. Copies of page 56-62 of document A-l, page 13 to 17 and page 53-57 of Annexure-A2 are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a blank agreement between M/s Indo American Electrical Ltd. and unnamed entity relating to compensation of the land which is unauthenticated, unsigned and does not bear the name of the assessee and how this blank document has got any relation with the assessee and that too for making the impugned addition and for reaching the conclusion made by Ld. A.O. is not clear. Page 53-57 of Annexure A-2 would also show that these are unauthenticated and unsigned documents and even on the basis of these documents how could the impugned addition be made and that too in the hands of the assessee and that too in the year under appeal is not clear. It is important to submit that the land belonged to M/s Indo American Electrical Ltd. and as admitted by Ld. A.O. also these plots were sold by that company to various persons, the names and details of which are given at page 4, 5, 6 & 7 of the assessment order. The profit or loss, your good self would kindly appreciate, any profit or loss if at all it is there, can be on account of the owner only. How could assessee and that too when he is partner of a real estate commission agency-firm be treated as the owner of any such profit? It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleged profit at ₹ 2,18,46,799/-, the 50% of which that is ₹ 1,09,23,399/- has been ascribed to the appellant. This is again shifting inconsistent stand of Ld. A.O. which erodes the credibility of the conclusion drawn by Ld. AO completely. Alternative submission of the appellant without prejudice to above submission is that even action of Ld. A.O. in computing the alleged profit at ₹ 2,18,46,799/- cannot be sustained on the basis of the jottings made on the documents referred by him in the assessment order itself. Ld. A.O. has calculated the profit at ₹ 2,18,46,799/- in para 4.8 at page 8 & 9 of the assessment order by taking the alleged sales at ₹ 4,58,91,800/- and out of the said amount reduced a sum of ₹ 1,30,15,800/- as the cost and expenses. Whereas your good self would kindly see from the following documents that the action of Ld. A.O. in allowing/restricting the cost and expenses at ₹ 1,30,15,800/- is patently wrong. Page 56 of Annexure Al would show that the alleged cost and the new expenses mentioned were to the tune of ₹ 3,69,28,199/- thereby giving the alleged profit at ₹ 79,17,601/- and not what has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent of Ekomkar Farms, Kapashera Bijwasan, New Delhi was the managing director of the company. As per inquires conducted from Sh. Manmohan Singh, M/s Reliance Estate Agency was appointed by IAEL for publishing the advertisement and procuring bids for sale of said land on 1-10-1999. It was decided by IAEL that the above land would be sold to M/s TML Investments (P) Ltd for ₹ 1.50 crores. However, M/s TML Investment (P) Ltd subsequently cancelled its letter of intent to continue with their offer of purchase of land at Jharsentli. This was communicated to M/s Reliance Estate Agency vide letter dated 16-02-2000. Out of the land measuring 89 Kanals 13 marlas a land of 57 kanal was released by the Director, Urban Estate, Madhya Marg, Sector 18 Chandigarh. The remaining land was sub-divided into 16 Industrial plots of varying sizes as per plan approved by town planner, MCF. The land at village Jharsentli was sub divided into sixteen Industrial plots whose details were obtained by AO from the Municipal Corpn. Faridabad (MCF) as per details noted in table I page 3 of assessment order. These plots were subsequently sold to several parties as per details noted in table 2 page 4 and 5 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not bear the name of the assessee. AR has also submitted that he is a partner in Real Estate Commission Agency firm and the profit or loss can accrue only to the owners of the land only and not to a Real Estate Agency firm. M/s Reliance Estate Agency was acting as commission agent for IAEL and AO has taxed the commission income allegedly earned from these deals in the hands of M/s Reliance Estate Agency. Referring to AO's observation in para 4.4 page 7 of asstt order to the effect that plot A-l was sold to one Mr. G.L. Verma for a sum of ₹ 13,31,000/- out of which ₹ 4,95,000/- is the cheque amount shown in the registered deed and ₹ 8,36,000/- is the cash amount received and not reflected income of the assessee, AR has submitted that when the seller was IAEL and the purchaser was Mr. G.L. Verma there was no occasion for assessee to show any profit or loss arising on this purchase/ sale transaction in his return of income. AR has also stated that there are inconsistencies in AO's order in as much as in para 4.4 AO himself has mentioned the gross profit of ₹ 1,34,43,760/- in respect of these plots however when comes to the taxing of the same in the han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of profits earned on remaining plots i.e. B-4, B- 6, B-7 and B-8 which have been sold at ₹ 2,02,23,000/- and further amount of ₹ 62,85,000/- has been shown as payable to IAEL which is the amount of cheque component of sale consideration of above plots as per details given on page 61 of A-l. An amount of ₹ 26,50,000/- on account of cash expenses have been further deducted from this amount to get profit of ₹ 1,12,88,000/- which has been divided equally between Sh. Naveent Jhamb the assessee and Sh. Manmohan Singh. Similarly, page 57 of A-l shows final revised profit statement prepared as "new calculation". In the first column total profit of ₹ 1,21,66,760/- with profit of ₹ 60,83,380/- in the hands of Sh. Navneet Jhamb and Manmohan Singh has been calculated. This amount of ₹ 1,21,66,760/- has been taken from page 61 of A-l and is on account of profit details of 12 plots sold up to 31-10-2001. The second column calculates total profit of ₹ 66,40,601/- with a profit of ₹ 33,20,300/- in the hands of Sh Navneet Jhamb and Sh. Manmohan Singh in respect of four plots sold after 31-10-2001. As noted in para 4.8 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d seized from the possession of the assessee and therefore, onus is on him to prove with evidence the exact nature of the entries recorded in such documents. However, assessee has failed to discharge this onus and had just made general submissions and given routine explanations in order to wriggle out of the rigours of tax which may be fall on him on account of entries recorded on these documents. In view of above discussion and also for the detailed reasons discussed in the asstt order and AO's report dated 28- 01-2009, various contentions of the AR are rejected and it is held that assessee has earned total profit of ₹ 1,09,23,399/- out of which profit on sale of ₹ 23,37,343/- pertains to AY 2002-03 accordingly addition of ₹ 23,37,343/- is upheld. This ground of appeal is, therefore, rejected." 21. Therefore, assessee is in appeal before us. The ld AR reiterated submissions made before the lower authorities. He also submitted that in case of the Buyers the additions were made on the same seized documents were deleted by the coordinate benches as well as honourable High court and therefore there is no reason that these additions can be sustained in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by cheque is ₹ 1, 50, 00, 000/-and balance consideration is in cash amounting to ₹ 3,08,91,800/-. Profit was worked out on that basis and 50 % thereof was found to be earned by the assessee. It was further bifurcated in the respective assessment years based on the year in which the plots are sold. 24. The first contention of the assessee is that above transaction has not happened and these are tentative or estimates. The Ld. assessing officer has given reasons to show that these are the actual transactions entered into by the assessee and cannot be stated to be estimates. We also agree with the finding of the lower authorities. These are the actual transactions entered into by the assessee and cannot be said to be the merely estimates because of the reason that only looking at page No. 61 shows that there are dated transactions and also shown the receipt of money on sale of plot number B2 for ₹ 7,13,000/- and sale of plot number A 6 of ₹ 1 lakh. The total of the sum is to the amount of cash in hand and from that road expenses, electricity expenses are also accounted for and then balance is drawn. After that it is mentioned that money is paid to the respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee was merely a broker and has not earned profit on sale of the 16 plots. 26. With respect to the several decisions cited before us with respect to the buyers where the additions have been deleted in their hands, we have carefully considered all the decisions placed before us. Admittedly, in all the cases the coordinate bench or the Hon‟ble high court has deleted the addition. The main reasons for deletion of such addition was that in those cases the assessing officer could not bring any cogent basis as to how the documents pertain to those assessee and the money transactions taken place. However, in the present case the documents have been found from the possession of assessee. Therefore, it is clear that those decisions do not have any bearing on the assessment proceedings of the assessee where the addition has been made based on documents found during the course of search. 27. With respect to the profit, there are serious objections raised by the Ld. authorized representative. The Ld. assessing officer stated that the gross profit is mentioned on page No. 61 of the seized documents which is ₹ 3,24,48,040/-. However subsequently the assessing officer not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit, if the amount of compensation is not included in the expenditure, then the profit amount deserves to be adjusted accordingly. Further, the amount of charges paid for EDC, the assessee has not given any evidence of payment of such charges. Further, in some of the decisions cited before us such charges have been borne by the buyers. Anyway assessee does not have any evidence that assessee has incurred these expenditure. Therefore, there is no information available that assessee incurred this expenditure. Therefore, we do not find any infirmity in the order of the Ld. assessing officer in not granting deduction of this amount from the gross profit shown by the assessee. 29. In view of this, we do not find any infirmity in the order of the lower authority in taxing the 50 % of the profit based on information contained in the loose papers found during the course of search. However, with respect to the determination of overall profit we direct the ld AO to reduce the sales consideration by ₹ 1985000/- because of difference in sale price and further adjustment because of compensation paid of ₹ 5.50 lakhs. Accordingly ground no three of the appeal is partly allowed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in framing the impugned assessment order u/s 153 A/143(3) and that too without assuming jurisdiction as per law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153A/143(3) without assuming jurisdiction as per law and without recording requisite satisfaction as per law and without obtaining requisite approval as per law and without complying with the other mandatory conditions envisaged under the Act and has erred in not computing the alleged income in terms of the provisions of section 153 A. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of ₹ 7888222/- as undisclosed income allegedly being profit on sale of plots merely on the basis of surmises and conjectures and without any evidence or basis. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the assessment in violation of principles of natural justice in as mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the assessment in violation of principles of natural justice in as much as passing the impugned order by recording incorrect facts and findings and without providing opportunity of cross examination and without confronting the entire adverse material used against the assessee and without providing adequate opportunity of hearing. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not granting the benefit of telescoping while confirming the addition made by Ld. AO. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961." 37. The assessee at the time of hearing submitted that he does not want to press this appeal. In view of this submission of the ld AR, we dismiss the appeal of the assessee for Assessment Year 2006-07. 38. In the result, ITA No. 1612/Del/2011 is dismissed. 39. In the result all these five appeals of the assessee are disposed off. Order pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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