9911796707
TMI Blog2024 (12) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Hence the entire addition is liable to be deleted. Since we have deleted the entire addition, the question of estimation of the profit on the above said amount does not arise. Disallowance of professional fees - assessee did not prove the nature of services rendered by the persons to whom the above said amount was paid - onus to prove - HELD THAT:- There cannot be any dispute that the initial onus to prove the expenditure claimed by the assessee is placed upon the assessee. In the instant case, in our view, the onus has been discharged by the assessee by showing that the professional fee has been paid for a purpose, which is also corroborated from the financial statements. Payments have been made through banking channels and TDS has also been deducted. On the contrary, AO has disbelieved, as stated earlier, for the failure of the recipients to file return of income or to respond to the notices issued by the AO. In our view, in the facts and circumstances of the case, the assessee cannot be penalized for the failure, if any, of the recipients mentioned above. It is well settled proposition that the assessing officer cannot sit upon the arm chair of the business man and dictate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounted in the books. Accordingly, he took the view that the cash payments noted down in the paper represents undisclosed income of the assessee. The assessee stated that the above said persons did not ultimately buy the flats mentioned above. The AO noticed that the Flat no. A-803 was subsequently purchased by another person named Shri Naveen Sharma for a consideration of Rs. 1,26,92,982/- on 23.9.2018. However, the sale agreement was found to have been entered on 01-12-2019 for an amount of Rs. 91.92 lakhs only, which was lesser than the amount of Rs. 98.48 lakhs mentioned against Shri Sajjan Garg. On the basis of these information, the AO concluded that the assessee is involved in suppression of its sale receipts, by receiving part of sale consideration in cash and not offering the same for taxation. 4. When enquired about the same, the director of the company Shri Sanjay Gawande expressed his ignorance about the entries made in the piece of paper. Further, as noticed earlier, the assessee submitted that all these parties have cancelled the bookings, i.e., these five flats have not been ultimately purchased by the above said persons. The AO did not accept the same. He noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire amount of unaccounted sale consideration. The Ld CIT(A) estimated the profit rate at 25.04% and applied the same to the above worked out unaccounted receipts, which worked out to Rs. 1,93,59,693/-. Accordingly, the Ld CIT(A) directed the AO to restrict the addition to the above said amount. 7. The revenue is aggrieved by the relief granted by Ld CIT(A) and the assessee is aggrieved by the decision of Ld CIT(A) in partially sustaining the addition. 8. We heard the parties on this issue and perused the record. We noticed that the AO has made this addition entirely on the basis of a piece of paper found from the drawer of the table of one of the directors of the assessee. The said paper contained details relating to sale price, cheque amount, cash amount of five flats viz., A-803, A-1001 1002 and B-1001 1002. Since the cheque amount alone was found to be recorded in the books of accounts, the AO presumed that the cash component mentioned in the paper represents unaccounted receipts. 9. Hence the moot question that arises is whether the above said piece of paper can be considered to be a credible evidence in the eyes of law in order to prove the receipt of unaccounted money b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceiving cash, only if it is paid by the buyers. If none of the buyers have paid the cash, then there will be no question of receiving cash by the assessee. (g) In any case, it is settled proposition that the question of extrapolation of unaccounted income shall arise only if (i) the seized material shows that there was a definite pattern in generating unaccounted income; (ii) the said material is a credible and reliable one and (iii) the assessee has either accepted the contents of the seized material or there are material to show that the contents cannot be disregarded. We notice that none of the above ingredients is present in the facts of the present case. 10. We may refer to some of the judicial decisions relied upon by Ld A.R in this regard, which support our view:- (a) In the case of CIT vs. Dolphin Builders (P) Ltd (2013)(356 ITR 420), the Hon ble Madhya Pradesh High Court held that though there may be some doubt about the price of the flats, but until and unless it could have been proved by some evidence, aforesaid doubt cannot take place of proof. Until and unless such noting is corroborated by some material evidence, the Assessing Officer erred in making addition in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment and wherever documents indicate that there was some additional consideration received by the respondent assessee, the same was offered to tax. However, in the absence of any evidence merely on the basis of suspicion, it is not open to add any amount as income. It is pertinent to note that the Counsel for the Revenue, was unable to explain the basis on which only the consideration received in respect of 37 flats was added to the extent of Rs. 500/- per sq.ft and not in respect of certain other flats when there was no evidence in both the above class of cases. No explanation is forthcoming nor found in the orders. The jurisdictional High Court has observed that the addition relating to additional consideration should be restricted to the evidences found and should not be extrapolated. 11. In view of the foregoing discussions, we are of the view that the AO did not have any credible material with him to support the impugned addition of Rs. 7,73,15,067/-. Further, as held by the Hon ble jurisdictional Bombay High Court, the AO could not have resorted to extrapolation on the basis of assumptions and presumptions, in the facts of the present case. Hence the entire addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issue and perused the record. The assessee has paid the professional fees to two persons mentioned above. Both of them have raised bills upon the assessee and the payments have been made to them through banking channels. The reason for the payment of professional fee is stated to be for the purposes of arranging debt funds from PNB Housing Finance. We notice that the assessee has furnished financial statements in pages 7 to 40 of the paper book. The details of Long term borrowings are given in Note no.4 placed at page 24 of the paper book. A perusal of the same would show that the assessee has obtained additional loans from PNB Housing Finance during the year under consideration. The opening balance of the loan from the above said finance company was Rs. 5.17 crores, while the closing balance was Rs. 44.36 crores. It is further stated that the assessee has obtained loan of Rs. 43 crores during the current year from PNB Housing Finance. It is the submission of the assessee that the professional charges of Rs. 27.25 lakhs was paid to the above said two persons in connection with arranging above said loan of Rs. 43 crores. Considering the quantum of loan, the above mentioned profes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
