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TMI Blog2022 (10) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a common survey action conducted on them under section 133A of the Act. He stated that similar arguments were to be made against the additions made and therefore, both the appeals needed to be heard together. The ld.DR fairly agreed with the contentions of the assessee. In view of the same, both the appeals were taken up together for hearing. 3. The ld.counsel for the assessee began by summarizing the issue in both the appeals before us, stating that both the assessees were in the business of real-estate development and had been subjected to survey action under section 133A of the Act on 11.1.2013 i.e. preceding financial year . That during the course of the survey action the partners of the assessee-firm had made surrender on account of on-money received by the assessees on plots sold/booked, but in the return of income filed for the impugned year, the assessee did not make disclosure of the entire amount surrendered, the disclosure being less than the surrender made in the case of the assessee i.e. M/s Jay Buildcon and no disclosure being made in the case of the other assessee i.e M/s Sun Developers, noting which the AO held that the assessee had retracted from his surrende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed as well as legal position relied upon. In view of the facts and submission filed, the impugned addition of Rs. 26,00,000/- u/s. 68 of the Act requires to be deleted. 2. The learned CIT(A) has erred in not dealing with the legal decisions relied upon in connection with the contention that the statement recorded U/S.133A was not recorded on oath, such statement recorded U/S.133A was not at par with the statement recorded u/s.132(4) and accordingly did not have any evidentiary value. Thus, the addition of Rs. 26,00,000/- made on the basis of statement recorded u/s. 133A of the Act only and without any supporting evidences found during the course of survey and therefore the impugned addition requires to be deleted." 5. The ld.counsel for the assessee thereafter proceeded to draw our attention to the facts of the case and taking us through the assessment order at para-3, he pointed out that survey action under section 133A was conducted at office premises of the scheme viz. "Raj Ratna Godown" on 11.1.2013. During the course of survey certain documents were found and impounded and inventorised as annexure-A/1. Further on the basis of material available, the statement of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the booking of the sale of the plots. 8. In the case of M/s Sun Developers, the ld.counsel for the assessee pointed out that no disclosure was made in the impugned year since ,it was explained to the AO , Rs.50 lakhs surrendered by the assessee in the preceding year covered plots sold/booked during the year also. 9. The ld.counsel for the assessee thereafter pointed out that the AO was not satisfied with the explanation of the assessee, and in the case of M/s Jay Buildcon he held that since the assessee had suo moto - voluntarily surrendered Rs.49.75 lakhs on account of onmoney received, he could not have retracted his surrender and accordingly added difference of Rs.26 lakhs to the income of the assessee. In the case of M/s Sun Developers, the AO held that Rs.50 lakhs surrendered by the assessee pertained to the plots booked/sold in the preceding financial year, and applying ratio of surrender made to the plots booked or sold in the preceding year, to the actual plots booked/sold by the assessee in the impugned year, the AO worked out on-money to be disclosed by the assessee as received in the impugned year of Rs.20,23,809/- and made addition of the same. The ld.counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was taken by the AO to be on account of units sold in the preceding assessment year i.e. 42 units, and working out the average of 42 units to the surrender made, On-money receipts for 17 units sold during the year was worked out by the assessee at Rs.20,23,810/-. The ld.counsel for the assessee contended that it was repeatedly stated to the authorities below that whatever surrender had been made by the assessee, had been disclosed in the return of income for the preceding assessment year and the surrender included plots booked or sold during the impugned year also i.e. 17 units sold/booked by the assessee during the year; that there was no incriminating material found relating to the on-money received by the assessee, and the assessee having honoured his surrender, and no incriminating material being found by the AO, there was no reason at all for making any addition on account of on-money received during the impugned year. The ld.counsel for the assessee thereafter pointed out that in both the cases, Revenue authorities failed to appreciate the factual contentions made by the assessee and made addition merely on the basis that disclosure made by the assessee in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent order nor the CIT(A)'s order mentions any basis or specific material found during the survey, forming the basis of surrender made, nor has the ld.DR drawn our attention to any such material. These facts clearly lend credence to the contention of the assessee that the surrender was an estimated surrender made by the assessee in the belief that it would sell or book flats/plots to the said extent in the impugned year and earn on-money on the same. There can be no two ways about it, since as per the facts before us, surrender was made prior to beginning of the impugned year and related to on-money receipt on booking or sale of the property during the year. Undeniably, it was an estimated surrender made by the assessee. 15. In the return of income filed, we have noted, and it is not disputed also, the assessee disclosed the on money receipt of Rs.23.75 lacs, being in relation to property actually sold/booked during the year of residential, commercial and multiplexes. The Revenue does not dispute this fact. On the issue relating to onmoney receipt, it is an admitted fact, even by the Revenue, that onmoney is received only on the booking of the properties, and there is no question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed for preceding years i.e. Asst.Year 2013-14. For the impugned assessment year, accordingly, no disclosure has been made by the assessee in the return of income. It is therefore clearly not a case of retraction of surrender at all. Whatever the assessee had surrendered, it was duly declared in its return of income of the preceding year. What the Revenue is now attempting to do is to apply a hypothesis that since the assessee had admitted to having received on-money in the preceding year, the same logic would apply to all properties sold in the impugned year also. But we find that other than surrender made by the assessee, there is no incriminating material with the Revenue lending credence to this hypothesis. The assessee has repeatedly stated that it made surrender to buy peace and whatever was surrendered it had honoured in the preceding year. In the absence of any other evidence, the surrender made by the assessee alone cannot be sufficient to establish that the assessee has actually received onmoney on all transactions, and therefore no addition could have been made in the impugned year for any on-money receipt. Accordingly, the order of the ld.CIT(A) upholding the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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