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TMI Blog2023 (6) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... ch income was also offered to tax in A.Y 2009-10 was summarily rejected by the CIT (A) in absence of balance sheet of the respective A.Y. Observation of the CIT (A) that the assessee has to explain the unaccounted payments made to Shah Group during the impugned A.Y. During the course of hearing before the Tribunal, the learned Counsel for the assessee drew the attention of the Bench to the Annexure enclosed to the assessment order and demonstrated before us certain sale deeds for which cash was received during the impugned A.Y, were actually registered in A.Y 2009-10 and therefore, these are only advances. It is also his submission that given an opportunity, he can substantiate that there is no unaccounted receipt during the year and the earlier amount of advance has been offered to tax in the A.Y 2009-10. Considering the fact that the assessee has declared additional income @ 15% of the turnover to explain the source of certain payments during the impugned A.Y and considering the fact that certain sale deeds were registered in A.Y 2009-10 for which the assessee has received certain amounts which according to him are advances received during the year, therefore, we deem it proper t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiries were made by DCIT, Central Circle-2, Hyderabad in the proceedings in the case of Mr. Mir Mazharduddin. He noted that out of the amount of Rs.7.19 Cr, the amounts received in cheque are reflected by the assessee in his books but the cash payments of Rs.2,13,98,500/- were not reflected in the books of account. 4.1 On the basis of the above, the case of the assessee was reopened by recording reasons and after obtaining previous approval from the competent authority. Accordingly, notice u/s. 148 of the Act was issued to the assessee on 05.08.2010 which was duly served on the assessee on 09.08.2010. However, the assessee did not file the return of income in response to the same notice. Subsequently, the AO issued a show cause notice indicating details of material seized in the case of Mr. Mir Mazharuddin. Since there was no response from the side of the assessee penalty proceedings u/s. 271F were initiated. Subsequently, the assessee filed a letter stating that the revised return filed on 30.12.2005 be considered as return filed in response to notice u/s. 148. It was further submitted that due to heavy losses the Hyderabad operations were abandoned and there was no staff, and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absurdly low value of Rs.118/- from Mr. Anwaruddin to as high as Rs.7,295/- from Mr. Mazharuddin. It thus leads to the conclusion that the information contained in the pages supplies by the Department is inconclusive. d) None of the plots agreed to have been sold to Mr. Mazharuddin and associates have been sold during the any of the financial years 2003-04 to 2005-06 corresponding to the Asst Years 2004-05 to 2006-07, for want of obtaining final approval from HUDA. I However, these plots were registered in the financial year 2008-09 corresponding to the Asst Year 2009- 10. As such whatever amounts reflected in the papers seized from Mr. Mazharuddin, or the amounts stated to have been paid to assessee according to Mr. I Mazharuddin, stand as advances only for the financial years mentioned above. The consideration recorded by assessee for the sales effected to the above parties in the financial year 2009-10 is more than the amounts reflected in the seized papers. Therefore technically, the said amounts cannot be treated as undisclosed income. e) The assessee has been recording all transactions with respect to the collections made from Mr. Mazharuddin and associates and all the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course search operations in their premises. Details of payments of the said consideration were furnished as Annexure B to the submissions. j) The assessee requests that the expenditure incurred on purchase of land be allowed against the unrecorded advances received from Mr. Mazharuddin and associates. 6. However, the AO was not satisfied with the arguments advanced by the assessee and made addition of Rs. 67,15,000/- being unaccounted cash received by the assessee from Mr. Mazaharduddina and others by recording the following:- i) After examination of the evidence and arguments of the assessee, it is observed that the evidence in the form of payments received from Mr. Mir Mazharuddin and others as well as payments made to the Shah group over and above the amounts recorded in books were not admitted by the assessee during the survey proceedings. Even when higher income was offered, these payments were not mentioned. Therefore, the earlier disclosure made for the reasons best known to the assessee cannot be treated as a permanent immunity scheme for all unaccounted payments. It is a fact on record that the assessee never disclosed these amounts when enquiries were made in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) erred in not allowing telescoping of the additional income admitted in revised return of income after survey without appreciating the fact that such additional income is admitted in view of receipt of cash outside the books of account. 3. The learned AD erred in confirming the addition of Rs.44,16,500 holding that each year's receipt is to be assessed in the same year without appreciating the fact that the assessee admitted income on sale of plots on the basis of registration of plots and that it has admitted the additional income in the asst. year 2009-10 on the basis of registration and thereby erred in confirming assessment of same income twice. 4. The learned CIT(A) erred in confirming the finding that there is on money payment to Shah group without appreciating the legal position that it is mandatory to allow cross examination of the person whose statement is relied upon and without such procedure the action against the assessee is abintio void as held by Supreme Court. 5. Without prejudice to the stand that all the receipts are admitted in the , asst. year 2009-10, the learned CIT(A) erred in holding that the unaccounted receipts are allowed set off again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el.Trib) 11. The ld.DR on the other hand heavily relied on the orders of the Assessing Officer and the learned CIT(A). He submitted that clear cut evidences were found during the course of search in the premises of Mr.Mir Mazaharuddin, according to which they have paid certain cash amounts to the assessee over and above the registered sale value. Since the assessee has not disclosed such cash components, therefore, the AO was fully justified in brining to tax the said amount and the ld.CIT(A) was fully justified in upholding the same. So far as the argument of the ld.counsel for the assessee that after the survey they have filed the revised return disclosing profit @15% of the turnover is concerned, he submitted that the same will not help the assessee since the addition being presently made is on the basis of search conducted in the premises of Mr. Mir Mazharuddin which is after the date of survey. He submitted that the ld.CIT(A) has given justifiable reasons while sustaining the additions made by the Assessing Officer. He accordingly submitted that the order of the ld.CIT(A) be upheld and the grounds raised by the assessee be dismissed. 12. We have heard the rival arguments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed that he sold the property to Mr.Mazaruddin in F.Y 2003-04 (AY.2004-05) and the unaccounted receipts from Mr.Mazaruddin were only advances received and further claimed that all the receipts were offered to tax in AY 2009.10. This claim of the assessee is not supported by the balance sheets of the respective years, further, if this plea of the assessee is accepted, then he has to explain the unaccounted payments made to Shah group, Therefore, this ground of appeal is dismissed. [Although the ground taken before the ld.CIT(A) was Rs. 67,15,600/- as per the addition made by the AO, however due to typographical error, the amount is wrongly mentioned at Rs. 44,16,500/-] 13. It is the submission of the ld.counsel for the assessee that since certain cash payments were received and at the same time certain cash payments were also made, therefore, under these circumstances and considering the fact that assessee after the survey proceedings has already disclosed profit @15% of the turnover to coverup the discrepancy, only a percentage should be adopted for the cash receipts and the entire amount cannot be added. It is also his submission that certain plots were sold in the A.Y 2009-10 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 15. In the result, appeal filed by the assessee is allowed for statistical purposes. ITA No.1643/Hyd/2013 (AY 2005-06) 14. Grounds raised by the assessee are as under: - 1. The order of the learned CIT(A) is erroneous both on facts and in law and is perverse. 2. The learned CIT(A) erred in not allowing telescoping of the additional income admitted in revised return of income after survey without appreciating the fact that such additional income is admitted in view of receipt of cash outside the books of account. 3. The learned AO erred in confirming the addition of Rs,44,16,500 holding that each year's receipt is to be assessed in the same year without appreciating the fact that the assessee admitted income on sale of plots on the basis of registration of plots and that it has admitted the additional income in the asst. year 2009-10 on the basis of registration and thereby erred in confirming assessment of same income twice. 4. The learned CIT(A) erred in confirming the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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