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TMI Blog2024 (1) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... e, except to having agreed the prices entered with the developer. AO do not find any infirmity in the books of account maintained by the assessee, thereby he has not rejected the books of account. Thus in the absence of any incriminating evidence found during the course of survey, the additions made by the Ld. A.O. based only on Inspector s report is not sustainable in law. Therefore the addition made by the Assessing Officer on this count is liable to be rejected and we do not find any infirmity in the order passed by the Ld. CIT(A). Thus Ground No. 1 raised by the Revenue is liable to be rejected. Sale of Duplex Pent Houses merely based on Inspector s report - During the course of survey, there is no unaccounted money found and seized by the Authorities in the business premises of the assessee. The assessee submitted confirmation of accounts from various buyers and the Ld. A.O. could not find any defect in those records. However based on loose paper information and without corresponding evidences, the entire addition is made which is not permissible in law. It is appropriate to place on record the Hon'ble Supreme Court decisions in the case of Omar Salav Mohamed Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rangpani one of the buyer of the flat was found and seized, in which cost of the flat was mentioned at Rs. 43,75,000/-. The Ld. AO issued summons to the various purchasers including Sunil Sarangpani and recorded the statements on oath under Section 131(1) of the Act. All the purchasers of the flats confirmed the booking of flats, price, payment details and other details before the Ld. AO. Thereafter project site was examined by the Inspector attached with the Ld. AO on 04.11.2015. On verification of the said flats and the prevailing prices at which the project is being sold was found to be Rs. 2500/- per sq.ft. Thus, the Inspector reported to the A.O. that the flats were sold at Rs. 50,00,000/- which is inclusive of documentation and maintenance charges. Whereas the assessee submitted that the flats were sold at the prices ranging from Rs. 18 Lakhs to Rs. 43.75 Lakhs, depends upon the quality and facilities as required by the buyers. Similarly, penthouses were sold for Rs. 35 Lakhs to Rs. 50 Lakhs. The above explanation was not accepted by the Ld. AO and relying upon his Inspector report, determined each flat cost at Rs. 42 Lakhs, thereby there was difference in consideration betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in spite of the survey conducted and some of the customers examined on the oath and that the addition is based on only Inspector's report. Following the decision made before for A.Y. 2013-14, the addition made by the AO for A.Y. 2014-15 also cannot be upheld. Though it is not material, it is also noted that flat No.A-302 against which an addition of Rs. 14,00,000/- (Rs.42,00,000/- (-) Rs. 28,00,000/-) was sold in F.Y. 2014-15 related A.Y. 2015-16 and therefore it does not pertain to A.Y. 2014-15. The AO is directed to delete the addition of Rs. 4,51,00,000/-. The ground succeeds. 3.1. Regarding the addition on account of sale of pent houses of Rs. 1,46,12,500/-, the assessee made detailed submission as follows: D. Price at which a penthouse is sold- The consideration at which a penthouse is sold to a member depended upon the type of penthouse, the construction work carried out on it and the quality of material used for construction, etc. Normally when a flat is constructed, the builder charges the price for the flat depending upon the facilities provided by him and the material used for the basic interior work apart from construction. Construction includes building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered the mean price of all pent houses at Rs 78,82,500/- and extrapolated all the pent houses at the same value and made a bogus addition in the hands of the appellant firm. E. Confirmations from the members in respect of which addition has been made We are enclosing herewith copy of confirmations, PAN Card/ Aadhar Card, copy of basic quotation agreed with member at the time of booking, break up of construction cost, counter signed by 5 members in respect of whom the addition has been made in the A.Y.2014-15. Refer Annexure - 10- In the said year, the Ld. AO added the difference between 78,82,500/- as assumed by him as price for all pent houses and the actual executed price in case of 5 members. As already explained above, actual pent houses booked in the said year were only 3 instead of 5. Therefore, the addition in respect of 5 penthouses is itself erroneous. Further, a perusal of above confirmations clearly reveals that the members have themselves confirmed the actual consideration for the said pent houses. There absolutely nothing to prove that the AO's assumptions are true in any way. The AOs findings are purely based on conjecture and surmises and without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO is directed to delete the addition. The ground succeeds. 4. Aggrieved against the appellate order, the Revenue is in appeal before us raising the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the id. CIT(A) erred in deleting the addition of Rs. 4,51,00,000/ on account of Unaccounted profit from business without appreciating that the above addition was made by the Assessing officer on the basis of impounded material, statement given by certain purchasers and field enquiry. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 1,46,12,500/- on account of Unaccounted profit from business without appreciating that the above addition was made by the Assessing officer on the basis of impounded material and field enquiry 3. It is therefore, prayed that the order of the Ld. CIT(A) 12, Ahmedabad may be set aside and that of the AD may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw and/or ground(s) of appeal either before or during the course of hearing of the appeal. 5. Heard rival submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this count is liable to be rejected and we do not find any infirmity in the order passed by the Ld. CIT(A). Thus Ground No. 1 raised by the Revenue is liable to be rejected. 6. Similarly addition of Rs. 1.46 crores on account of sale of Duplex Pent Houses merely based on Inspector s report. During the course of survey, there is no unaccounted money found and seized by the Authorities in the business premises of the assessee. The assessee submitted confirmation of accounts from various buyers and the Ld. A.O. could not find any defect in those records. However based on loose paper information and without corresponding evidences, the entire addition is made which is not permissible in law. 6.1. This view of ours is supported by the Jurisdictional High Court in the case of CIT Vs. Amar Corporation in Tax Appeal No. 26 of 2012 dated 18-07-2012 wherein it is held as follows: .A search was carried out under section 132 of the Act on 18.06.2003 in which certain loose papers and documents were found and were seized. The statement of Vimal Chimanbhai Shah, partner of the assessee firm, and that of one Chimanbhai Shah, whose proprietary concern had carried out the construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2004-05 also the Tribunal had dismissed the Department s appeal on the ground that the addition in that year also was based on extrapolation, it emerged beyond pale of doubt that for the addition made for the year 2005-06 there was no evidence whatsoever and the same was presumptive in nature. 6. In above view, the findings recorded by the Tribunal were proper and legal flowing logically from the facts on record. The Tribunal has not committed any error in passing the impugned order. The appeal is devoid of merit, and raises no substantial question of law required to be considered. 6.2. Similarly the Jurisdictional High Court in the case of CIT Vs. Maulikkumar K. Shah reported in 307 ITR 137 held as follows: The assessee has booked 35 shops as on the date of search, on which the Department has charged on-money in the asst. yr. 1995-96. In his statement recorded under s. 132(4), S denied to have charged any onmoney . The notings on the seized diary found from the premises of S is the only material on the basis of which the AO has made the impugned additions. The AO has not brought any corroborative material on record to prove that such sales were made and on- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these amounts were received from purchasers. The CIT(A) and the Tribunal both found that on the basis of these loose papers, no addition is justified. No interference is, therefore, called for in the order of the Tribunal. 6.3. It is appropriate to place on record the Hon'ble Supreme Court decisions in the case of Omar Salav Mohamed Sait reported in (1989) [37 ITR 151] (SC) where it is held that no addition can be made on the basis of surmises, suspicion and conjectures. In the case of CIT(Central), Kolkata vs. Daulat Ram Rawatmull reported in [87 ITR 349], the Hon'ble Apex Court held that, the onus to prove that the apparent is not the real is on the party who claims it to be so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidences, which would directly prove the fact of bogusness or establish circumstance unerringly and reasonably raising an interference to that effect. The Hon'ble Supreme Court in the case of Umacharan Shah Bros. Vs. CIT [37 ITR 271] held that suspicion however strong, cannot take the place of evidence. 6.4. Respectfully following the above judgments, we have no hesitation in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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