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TMI Blog2011 (6) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 were in the nature of on money receipts and payments which were not reflected in the regular books. As regards diary A-11, it was submitted that the transactions were fully recorded in the books. The receipts mentioned in the diary A-12 were declared as undisclosed income in the name of various concerns of Earth Group . 3. During the assessment proceedings, the Assessing Officer noted that in seven cases the amount disclosed in the diary A-11 were more than the amount disclosed in the books of account. The difference was added by the Assessing Officer to the total income. Details regarding these seven transactions were as under :- S. No. Flat No. Sale value as per seized diary A-11 Sale value as per book of account Sale Value considered by Assessing Officer Addition 1. 1001 4000000 3475000 4000000 525000 2. 802 950000 - 950000 950000 3. 1203 4200000 3250000 4200000 950000 4. 1302 5451111 5411111 5451111 40000 5. 1401 4000000 3800000 4000000 200000 6. 1402 1403 8700000 8100000 8700000 600000 7. 1503 4788000 4011000 4788000 777000 Similarly the Assessing Officer also noted that there was discrepancy with respect to diary A-12 and in four cases the amount recorded in the diary were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had also not objected to the addition made by the Assessing Officer as no appeal had been filed before the CIT(A). He therefore, rejected the explanation. In relation to flat 1501, the assessee submitted that the flat had been booked by the purchaser in June 2004 and he had paid a sum of Rs.54,50,000/- in cash up to February 2005 and Rs.1.00 lacs in cheque in January, 2005. Due to loss in business, he was unable to pay balance amount and cancelled the deal and the amounts were returned both in cash and in cheque and the flat was vacant till date. Similar explanation was given in relation to flat No.1801 and 1802 that the booking had been cancelled and the amounts had been cancelled and the amounts had been returned. It was also submitted that the assessee had offered income of Rs.1.00 lacs in the return of income to buy peace of mind. It was pointed out that flat No.1801 was still vacant and flat 1802 had been given to a re-habilitated tenant free of cost. In regard to shop No.19, it was submitted that the purchaser had requested the assessee for some interior work. The assessee had therefore given instruction on behalf of the purchaser to labour contractor for interior work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1801 had been shown in the stock in the subsequent years and were sold later to other parties. It was requested that the additional evidence filed in the paper book-2 which contains the following documents should be admitted. i) Statement of flats held as on 31.3.2007 as given before Assessing Officer in Assessment Year 2007-08. ii) Copy of sale agreement dated 25.3.2009 regarding sale of flat No.1501 to Shri C. T. Bhansali and Smt. P.C. Bhansali for a consideration of Rs.1,08,00,000/- placed at page 12 to 14 of the paper book-2. iii) Copy of the agreement of sale dated 25.3.2009 in relation to flat No.1801 sold to Mrs. Savita Mahendra Jain and Shri Mahindra D. Jain for a consideration of Rs.1,34,40,000/- placed at pages 15 to 17 of the paper book-2. iv) Copy of assessment order dated 29.10.2010 for Assessment Year 2008-09. v) Details of plot sold submitted to Assessing Officer in Assessment Year 2008-09 placed at page 27 and 28 of the paper book. vi) Details of sundry debtors as on 31.3.2008 showing amount receivable in respect of flat Nos. 1501 and 1801 at page 34 to 35 of the paper book. vii)Copy of agreement dated 25.2.2008 regarding flat No.1802 given to rehabilitated tena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee at the time of search admitted that these cash transactions represented unaccounted income not disclosed in the books of account. Based on these transactions the undisclosed income had been declared in the name of different members of the group including the assessee. However, the Assessing Officer at the time of assessment found that income in respect of five properties as mentioned in the table in para-3 earlier, had not been fully disclosed. The assessee could not give any satisfactory explanation and Assessing Officer made an addition of Rs.2,00,92,546/- on this account and also initiated penalty proceedings and levied penalty for concealment of income under section 271(1)(c). 8.1. It has been argued on behalf of the assessee that a sum of Rs.3,50,750/- added by the Assessing Officer on account of flat -501 was the money refunded by the assessee as mentioned in the diary itself. Therefore, addition was not justified in relation to flat No.501. In relation to flats 1801/1802 it has been submitted that the bookings had been cancelled and the amount had been returned subsequently. It has also been submitted that flat 1802 had subsequently been given to a re-habilitate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly as mentioned earlier the assessee has also filed additional evidences before us to substantiate the claim that booking in respect of flat 1501 and 1801/1802 had been cancelled and flats remained with the assessee. We have now to evaluate the case of penalty considering the facts and circumstances of the case under the provisions of Explanation 271(1)(c) which provides that in relation to any addition in the assessment in case the assessee is not able to substantiate an explanation and is also not able to prove that the explanation is bonafide, it would amount to deemed concealment of income. 8.3. We now take up the individual items of additions. In relation to flat No.501, the explanation of the assessee is that a sum of Rs.3,50,060/- written on the left side of the diary was the amount which had been returned and therefore, it was wrongly added. We have perused the said page of the diary. We find that the total of the transactions worked out by the assessee is Rs.24,05,000/-. On the left side there is one noting of Rs.2,90,000/- against which date is also mentioned which the assessee deducted from the gross amount and the net amount of Rs.21,15,000/- was mentioned at the top ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the flats were sold by agreement dated 25.3.2009, it is not clear as to how sale proceedings would appear in the balance sheet as on 31.3.2008. The assessee has also submitted copy of assessment orders for 2007-08 and 2008-09, but we find that there is no finding by the Assessing Officer regarding sale of these flats. Further even if it is accepted for the sake of argument that the flats remained with the assessee in subsequent years, such evidence can easily be created in collusion with the buyer because it suites both the parties as the assessee as well as buyer both are hit by the material found during the search. The assessee is liable for unaccounted income on account of cash received whereas the buyer has to explain the cash transactions. Therefore, both can easily collude and assessee can buy the flat subsequently from the same buyer at the same price and explain that the booking had been cancelled and the amount refunded and the flat remained with the assessee. Such evidences therefore do not disprove the fact that the flats had been sold in the relevant year. In case the assessee sells the flat in a particular year and subsequently in the next year buys back the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no material to draw conclusion that the credits represented the income of the assessee and that there was no conscious concealment. The said judgment may not be relevant now after the judgment of the Hon'ble Supreme Court in the case of Dharmendra Textile Processors (supra) in which it has been held that conscious concealment is not required to be proved by the revenue and that penalty is only a civil liability. The decision of the Tribunal in case of Smt. Shanta Kumar (supra), is also distinguishable. In that case the Assessing Officer had added part of the loan but in appeal the ld. AAC added the entire amount. It was held that penalty in respect of the entire loan was not justified. The facts are obviously different and the said decision cannot be applied to the facts of the present case. In view of the foregoing discussion and for the reasons given earlier we are of the view that the case of the assessee is covered by the provisions of Explanation 1 to section 271(1)(c) and the penalty has been rightly levied. We accordingly confirm the order of the CIT(A). 9. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 17.6.2011. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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