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TMI Blog2023 (3) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration mentioned in the sale deed. In this case, admittedly the AO has not examined the purchasers, to establish whether the purchasers have paid any on money beyond the sale consideration mentioned in the sale deed - revenue failed to establish that the assessee AOP had received sale consideration over and above the sale consideration mentioned in the books of accounts. CIT(A) is also erred in estimating the profit at 12.5% on the addition made by the AO in the absence of any incriminating material against the assessee AOP - Decided in favour of assessee. - I.T.A.No.218-220/Viz/2022 And I.T.A.No.176/Viz/2022 & 177/Viz/2022 - - - Dated:- 16-3-2023 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Appellant : Shri M.V.Prasad, AR For the Respondent : Shri M.N.Murthy Naik, CIT(DR) ORDER PER SHRI DUVVURU RL REDDY, JUDICIAL MEMBER : I.T.A.No.218-220/Viz/2022 These appeals are filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], Visakhapatnam-3 dated 11.07.2022 for the Assessment Year (A.Y.) 2018-19 to 2020-21. Since the grounds raised in these appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures and Finance (HUF). Further Shri V.V.Balakrishna Rao was asked about the concealed record room, wherein, he stated that he does not know about that premises as he has not visited the premises, but he only knows some old documents are maintained in some rented premises and his accountant, Shri M.Satyanarayana looks after the affairs of that rented record rooms and confirmed that he is shown the statement recorded from one of his employees, Shri Sakinala Harinadh Babu recorded at the rented premises of M/s Usha Pictures Financiers and other concerns. During the course of statement recorded u/s 131 on 29.07.2021, it was stated that seized cash of Rs.14,77,49,000/- and Rs.47,75,000/- derived from the unaccounted income was not recorded in the regular books of accounts. In reply to the question No.10 of the statement recorded on 18.08.2021, Shri V.V.Balakrishna Rao submitted entity wise cash seized as under : 1 Usha Bala Agro Farms Pvt. Ltd. 3,00,24,000 2 UBK Hotel Resors Pvt. Ltd. 70,00,000 3 70,00,000/- 65,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2017, vide pages 73 to 77 of seized material annexure A/UBC/17. As per the agreement, land to the extent of Acs. 15.0 is to be developed in the name of the assessee AOP and to be materialized by M/s SK Developers. After development of the plots, SK Developers is to be given 15% (in the extent ratio) and the remaining 85% to be held by the assessee AOP. The plots are to be sold by making the registration by M/s LV Beach City Property Promoters and M/s LS Property Promoters. 2.3. From the above statement, the AO stated that on money was received over and above the sale consideration in respect of plots and land sold in Chennai. The AO illustrated through screen shots, wherein, he stated that excess consideration was received for various plots sold. He held that entries in the handwritten books were compared with the plots sold as submitted by Sri VV Balakrishna Rao and various amounts of on money received over and above the sale consideration shown in the sale deed was observed with regard to the sale of plots in Dollars Colony, Phase-1. The AO has tabulated the excess consideration received in cash as was observed from the narration of entries in the handwritten books. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed was treated as undisclosed income of the assessee and added to the returned income. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) after considering the submissions made by the assessee, estimated the profit on unaccounted sales @12.5%. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds : 1. The learned CIT(Appeals) is erred in facts and law while passing the order. 2. The Learned CIT(Appeals) is not justified in estimating the income at 12.5% basing on the unaccounted sales arrived at by the Assessing Officer which itself arrived without proper evidences that the assessee has derived unaccounted sales. 3. The Learned CIT(Appeals) ought to have appreciated that very issue of notice u/s 153C is bad in law and without jurisdiction. 4. The Learned CIT(Appeals) ought to have appreciated that the assessment made by the Assessing Officer itself is not valid as the satisfaction is not Assessment Year specific and incriminating evidence specific. 5. The Learned CIT(Appeals) ought to have appreciated that the Assessing Officer is not justified in consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it @12.5% on 1,60,41,171/-. Before us, the main contention of the assessee is there is no evidence in the seized material did not contain any evidence to show that the assessee AOP had received sale consideration over and above the amount mentioned in the books of accounts. Search was conducted in the Ushabala group and other sister concerns, but, there is no evidence to substantiate that the assessee AOP had received Rs.1,60,41,171/- over and above the sale consideration mentioned in the books of accounts. But the Ushabala Group, LV Beach City Property Promoters and LS Property Promoters are members in AOP. The Ld.Counsel for the assessee has brought our attention to the seized documents which were mainly relied by the AO. The Ld.AO also affixed these impugned documents in the assessment order. The extract of para 14.1.1 and 14.1.2 in page No.24 and 25 of the assessment order, in which the AO stated is as under : 14.1.1. Excess consideration received in cash : In the case of the assessee AOP, M/s Dollars Colony, it is observed from the seized material containing the said handwritten books that, on money is received over and above the sale consideration in respect of plots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /AHD/2018 and the decision of Hon ble Gujarat High Court in CIT Vs. Maulik Kumar K.Shar [2008] 307 ITR 137, wherein, it was held that where no enquiry was made by the AO to substantiate the veracity of loose paper to collect cogent material / evidence to establish that cash received by the assessee, the other person (there should be evidence of actual cash transaction to support the entries in the loose paper) no addition can be made in the hands of other person . Similarly, revenue has no to prove with corroborative evidence that on-money was received as recorded in the loose paper, or the entries in the seized documents actually represented the sales made by the assessee, before he acquires jurisdiction to make assessment u/s 153C. In the present case on hand also, the AO has not made any enquiries and even the impugned documents do not contain the name of the assessee AOP to establish that the assessee AOP has received on money over and above the sale consideration. 4.1. The assessee also brought to our notice that satisfaction should be assessment year specific. He further submitted that satisfaction should be indicating the assessment year and incriminating evidence sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned document does not contain the name of the assessee AOP and there is no evidence to establish that the AOP had received on money beyond the sale consideration mentioned in the documents. It is also an admitted fact that the AO has not specified the assessment year and the incriminating evidence related to the assessment year. During the course of search proceedings, the AOP premises were also searched, but they have not seized any incriminating material to establish that the assessee AOP has received sale consideration by way of on money beyond the sale consideration mentioned in the sale deed. In this case, admittedly the AO has not examined the purchasers, to establish whether the purchasers have paid any on money beyond the sale consideration mentioned in the sale deed. In view of the aforesaid facts and circumstances and various decisions relied by the assessee, we are of the view that the revenue failed to establish that the assessee AOP had received sale consideration over and above the sale consideration mentioned in the books of accounts. Therefore, the Ld.CIT(A) is also erred in estimating the profit at 12.5% on the addition made by the AO in the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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