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TMI Blog2021 (9) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... idence. We also note that the Hon ble Courts in numerous cases held that there cannot be any addition merely on the basis of the statement furnished during survey/search proceedings. However, the facts of the case on hand is peculiar in the sense that the assessee himself in the retraction affidavit has admitted to have entered into the land transaction deal along with other persons. But in the affidavit it was claimed that he has earned along with other persons only a sum of ₹18 Lacs only out of the impugned land transaction deals. In our considered view, the affidavit discussed above is a vital piece of evidence wherein the assessee himself has admitted to have earned commission income. In the affidavit it was furnished that the area of the land in dispute was 33,881 square yard which matches with the registry documents of the properties in dispute as evident from the finding of the authorities below. Accordingly, there remains no dispute to the fact that the assessee has earned commission income out of the land transaction deal as discussed above. Quantum of commission earned by the assessee along with the other parties - We note that the statement furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishing that the impugned was not part and parcel of the seized document. Hence, no further addition is required to be made. In view of the above we dismiss the ground of appeal raised by the Revenue whereas assessee s ground in CO is allowed. Unaccounted commission - Admittedly, the amount in dispute was very much appearing in the diary seized during the search proceedings. The income based on seized diary has already been offered to tax by the assessee considering the peak amount. The peak credit theory was applied for the reason that there were many entries reflecting the receipt of cash as well as the payment of cash. The impugned amount of commission was also very much appearing as cash receipt in the impugned diary. It was also contended by the assessee that his share in the impugned land transaction deals stands at ₹8.75 Lacs and 11 Lacs only. This contention of the assessee was nowhere doubted by the authorities below which is also appearing in question No. 27 to 34 of the statement furnished under section 131. Since the impugned amount of commission has already been considered by the AO in the working of peak balance based on the diary seized, therefore there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and hence Hon'ble Supreme Court's decision in B. Kishore Kumar[2015] 62 taxmann.com 215 (SC) is applicable. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 3. The first issue raised by the Revenue is that the learned CIT (A) erred in deleting the addition made by the AO for ₹ 3 crores representing unaccounted income of the assessee. 4. The facts in brief are that the assessee in the present case is an individual and engaged in the business of land dalali. There was a search and seizure operation under section 132 of the Act conducted at the group of Soham/Sarkar dated 13th June 2013. The son of the assessee was also subject to search under section 132 of the Act being part of the group. During the search, certain documents being diary belonging to the assessee were also found from the premises of his son. The diary was containing the detail of receipt and payments entries on pages 1 to 60 for the period A.Y. 2010-11 to 13-14. 4.1 Thereafter, the statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s retracted by the assessee after a period of 4 months which is a considerable time gap. Furthermore, the statement was furnished voluntarily without any pressure, coercion which can be seen from the follow-up questions recorded in the statements. 4.5 The assessee has not co-operated before the investigation team post search by responding to the notices issued by the investigation team to him. 4.6 Likewise, the assessee has not furnished the contact details of the other 3 parties who were alleged to be involved in the land transaction deal. 4.7 The assessee has admitted to have sold the land in question at ₹4000 per square yard which is not true as the rate prevailing in the market. As such, the value of the land was ranging between Rs. 20,000 to 25,000 per square yard. Thus the amount of commission of ₹3 crores represents only 3% approx. in such deal of land transaction which is the prevailing market rate. 4.8 In view of the above, the AO held that the retraction of the statement cannot be relied upon and thus treated the sum of ₹3 crores as unaccounted income of the assessee by adding to the total income. 5. Aggrieved assessee preferred an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of the assessment year under consideration. Even if the sale consideration at the rate of Rs.4000/- per sq yd for total area of 33881 sq yd is taken, the total sale consideration comes to Rs.13.55 crore and upon this consideration, receipt of brokerage of Rs.3 crore is not found justified as per the market practice. As per the prevailing market rate, at any given point of time, the brokerage is 1 to 2% of the sale consideration. In the appellant's case, the appellant stated brokerage of Rs.3 crore, which comes to 22% of the sale consideration, which is unreasonable, illogical and not as per the prevailing market rate of brokerage at any point of given time in rear estate business. Moreover, the appellant stated that he has received brokerage alongwith 3 other people namely Dhavai Navnitbhai Patel, Ketan Jashvantbhai Patel (Ukabhai) and Bharatbhai Prabhudas Patel (Lalbhai) while answering to question No.26 of the statement. However, additions of total brokerage amount have been made in the hands of the appellant which is not legally sustainable. During the course pf appellate proceedings, the appellant submitted addresses alongwith the PAN of the partners which are repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. On facts and circumstances of the case, the Ld.CIT(A) ought to have deleted the entire addition of Rs.3,00,00,000/- 2. The Ld. CIT(A) after carefully considering the facts of the case and submission of the Respondent has rightly deleted the addition of Rs. 68,00,000/- on account of alleged brokerage income by holding that the Respondent has offered brokerage income and there was no other evidence to show that the Respondent has earned income other than he has shown in the return of income filed in response to notice u/s.153C of the Act and hence it is considered that the Respondent has returned the commission income earned on these transactions as stated in the statement recorded during the course of search and no other evidence was found which prove earning of brokerage income on any other land transaction. 8. The learned DR for us contended that the assessee did not extend the corporation before the investigation wing posts search. There was no documentary evidence filed by the assessee suggesting that there were involved four persons in the land transaction deals. Furthermore, prevailing market rate was worked out by the AO after examining the records. Similarly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has earned commission income out of the land transaction deal as discussed above. 11.4 The limited issue that requires adjudication is the quantum of commission earned by the assessee along with the other parties. As per the assessee, he along with other parties has earned a sum of ₹18 Lacs only whereas the Revenue alleges to have earned a sum of ₹3 crores out of such land transaction deal. It was contended by the assessee that the land in dispute was sold at the rate of Rs. 4,000 per square yard whereas it was alleged by the revenue to have sold impugned land at the rate of Rs. 20,000/- to 25,000/- per square yard as per the prevailing market rate. Thus the Revenue was of the view that the assessee must have earned commission at the rate of 3% approximately on such value of land being 33,881 square yard multiplied by Rs. 20000/- or 25000/- per square yard as the case may be. 11.5 However, from registered document we note that the impugned three lands were sold for an aggregate amount of Rs. 6.99 crores which means average rate of per square yard comes at Rs. 2,100/- approximately. Thus, to our mind there was no documentary evidence brought on record by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was arranged by him along 3 other partners namely Dhval Navneetbhai Patel, Ketan Jashvantbhai Patel and Bharatbhai Prbhudas Patel. However the AO held that the entire amount of commission is to be taxed in the hand of assessee only on the reasoning that he failed to provide details of such partners. However we note that the learned CIT (A) has given categorical finding that the assessee has sold the land in dispute along with 3 other parties and therefore the share of the assessee stands only at 25% of the commission income. In this regard, we note that the assessee before the learned CIT (A) has furnished the PAN along with addresses of all the other 3 parties. Therefore in view of above discussed facts, there remains no ambiguity to the fact that the assessee s share is only of 1/4th i.e. 25% of entire amount of commission of Rs. 18 lacs. Thus assessee share will be of Rs. 4.5 lacs only. 11.8 Now the next question arises whether the impugned amount has already been to tax in the income offered by the assessee based on the diary found during the search. It is important to mentioned here that the proceeding in the case of assessee was started based on diary found during search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.1 However, the AO treated the entire amount of commission i.e. 68 lacs as income of the assessee only and added to his total income which came to be deleted by the learned CIT (A) by observing as under: Facts of the case, assessment order and the submissions of the appellant have been carefully considered. The AO has made the additions of total brokerage income in appellant's hands inspite of the fact that he stated during the course of search itself that he shared brokerage with other partners in these land transactions. No other question was asked about the name and addresses of these parties during the search, post search or during the assessment proceedings. Therefore, it is reasonable to held that the appellant's share in brokerage should only be considered as his income stated by him, hence total additions made by the AO in his hands are not justified. The appellant has filed profit loss accounts for the period from 1.4.2010 to 31.3.2014, in which every year he has shown brokerage income. For A.Y. 2011-12, he has offered brokerage income of Rs.11.35 lacs and for A.Y. 2012-13, brokerage income of Rs.20.75 lakhs has been offered. In A.Y. 2013-14 brokerage income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his diary by my son Shri Tushar on my instruction. I do not know the details of debit side entries and the same shall be furnished later. On being asked that the total of credit side entry of this diary comes to Rs.2,71,95,577/- and you have stated that Rs.75,00,000/- is received by you. Then please explain the source of balance credit side entry, the assesses stated that, I have received as commission of Rs. 35,00,000/- | for land sold at survey No.406, 4O7, 412 413 at Jiindal village and survey No.409 at Jundal I have received as commission Rs.33,00,000/-. In this amount of Rs.33,00,000/-we were three partners three partners and in my share Rs. 11,00,000 received i during 2O1O-11 and remaining entry presently I don't know and details submitted later on of the same. The credit side entries include commission and interest also. 17.1 Since the impugned amount of commission has already been considered by the AO in the working of peak balance based on the diary seized, therefore there cannot be any separate addition to the total income of the assessee. If it is done so, it would lead to the double addition which is unwarranted under the provisions of law. Hence the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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