M/S. V.M. Reality Pvt. Ltd, Amritsar. V. The Asstt. Commissioner of Income-tax, Amritsar.

ITA 473/ASR/2011

• Counselvise Citation: 47320914 RSA 2011
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Search and seizure; Capital receipt
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.473(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN :AACCV3399L M/S. V.M. REALITY PVT. LTD. VS. THE ASSTT. COMMR. O F INCOME TAX, 48, THE MALL, CIRCLE-V, AMRITSAR, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SUDHIR SEHGAL, ADVOCATE RESPONDENT BY:SH. MAHAVIR SINGH, DR DATE OF HEARING:12/02/2014 DATE OF PRONOUNCEMENT:24/02/2014 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORD ER OF THE CIT(A), AMRITSAR, DATED 11.07.2011 FOR THE ASSESSMENT YEAR 2007-08.THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE AO IN INVOKING THE PROVISIONS OF SECTION 153C/153A OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE FACT THAT THE RE WAS NO INCRIMINATING EVIDENCE TO INITIATED THE PROCEEDINGS U/S 153C/153A NOR ANY SUCH INCRIMINATING EVIDENCE COULD BE ITA NO.473(ASR)/2011 2 ESTABLISHED BY THE LD. ACIT NOR THE SAME WAS CONFRO NTED TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. 2. THAT WITHOUT PREJUDICE TO THE ABOVE, NO MANDATOR Y CONDITION OF RECORDING THE SATISFACTION REQUIRED TO BE RECORDED IN WRITING HAS BEEN FULFILLED BEFORE ISSUE OF NOTICE U/S 153 OF TH E INCOME TAX ACT, 1961. 3. THAT WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF A PPEAL, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.70 LACS TO THE INCOME OF THE ASSESSEE U/S 69A WITHOUT CONSIDERING THAT IT WAS NEVER ESTABLISHED THAT THE ASSESSEE COMPANY WAS FOU ND TO BE THE OWNER OF ANY SUCH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES. 4. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ADDITION OF RS. 70 LACS HAS BEEN MADE BY THE AO ON THE BASIS OF PROPOSED AGREEMENT WHICH WAS NEVER EXECUTED AND WHI CH WAS NOT VALID AGREEMENT IN THE EYES OF LAW. 5. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ALLEGED RECEIPTS OF RS.70 LACS BEING OF CAPITAL NATURE CANN OT BE ADDED AS INCOME FROM UNDISCLOSED SOURCES. 6. THAT THE LD. CIT(A) WHILE UPHOLDING THE ADDITION OF RS.70 LACS U/S 69 OF THE ACT HAS ERRED IN NOT CONSIDERING THAT ONUS ON DEPARTMENT TO PROVE THAT THE ASSESSEE HAD MADE ANY INVESTMENT WAS NEVER DISCHARGED. 7. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT WHEN THE ASSESSING OFFICER HAD ACCEPTED THE ACCOUNT BOOKS AS PRODUCED DURING THE ASSESSMENT PROCEEDINGS, NO ADDITION COUL D BE MADE BY HIM TO THE TOTAL INCOME AS COMPUTED FROM THE AUD ITED FINANCIAL STATEMENTS BASED ON SUCH BOOKS OF ACCOUNT . 8. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT IN VIEW OF THE FACT THAT SPLENDAR LANDBASE LIMITED DENIED TO HAVE MADE ANY PAYMENT IN CASH OF RS.70 LACS NO ADDITION U/S 69 OF THE ACT COULD BE TOTAL INCOME OF THE ASSESSEE. ITA NO.473(ASR)/2011 3 9. THAT ABOVE ALL, THE LD. CIT(A) WHILE UPHOLDING A DDITION OF RS.70 LACS HAS ERRED IN NOT CONSIDERING THAT UNDER THE PROVISIONS OF SECTION 69A OF THE ACT ANY AMOUNT OR VALUABLE AS SETS, IF AT ALL ESTABLISHED SO CANNOT BE ADDED TO THE TOTAL INC OME OF TWO ASSESSES I.E. FIRSTLY IN THE CASE OF SPLENDAR LANDB ASE LTD. AND AGAIN IN THE HANDS OF THE ASSESSEE. 10. THAT THE ADDITION OF RS.70 LACS U/S 69A AS STAT ED ABOVE PARAS HAVE BEEN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE ON ASSUMPTIONS AND SURMISES WITHOUT ANY EVIDENCE ON RECORD AND BY NOT CONSIDERING OUR DETAILED SUBMISSIONS PRO PERLY. 11. THAT THE LD. CIT(A) BESIDES UPHOLDING THE ADDIT ION OF RS.70 LACS AS STATED IN AFORESAID PARAS HAS ALSO ERRED IN MAKING ENHANCEMENT TO THE ALREADY ASSESSED INCOME TO THE T UNE OF RS.8,60,000/- BEING THE SO CALLED COMMISSION EARNED BY THE APPELLANT DURING THE RELEVANT YEAR. 12. THAT ADDITION OF RS.8,60,000/- BEING THE INCOME AS ENHANCED BY THE LD. CIT(A) HAS BEEN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE ON ASSUMPTIONS WITHOUT AN Y EVIDENCE ON RECORD AND THEN NO NOTICE OF ENHANCEMENT HAS BEE N GIVEN BY THE LD. CIT(A) BEFORE MAKING THE ADDITION. 13. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 2. AS REGARDS GROUNDS NO.1 & 2, WE HAVE GONE THROUG H THE ORDER OF THE LD. CIT(A) AND WE FIND NO DECISION OF SUCH GROUNDS, WHICH THOUGH WERE RAISED BY THE ASSESSEE BEFORE HIM. HOWEVER, BEING T HE LEGAL GROUNDS, WE PROCEED TO DECIDE THE SAID GROUNDS AS UNDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY HAS FILED ITS RETURN FOR THE ABOVE MENTIONED ASSESSMENT YEAR AT N IL SHOWING CARRIED FORWARD LOSS OF RS.17,68,144/- WHICH WAS PROCESSED U/S 143(1). LATER ON, ITA NO.473(ASR)/2011 4 DURING THE COURSE OF REQUISITIONING PROCEEDINGS U/S 132A BY THE ADI, LUDHIANA, IN THE CASE OF SH. VIPIN VERMA S/O SH. OM PARKASH, R/O K-7, AUNA NGR. CIVIL LINES, DELHI-54 & OTHERS, BESIDES C URRENCY WORTH RS.19.8 CRORES, THERE WERE INCRIMINATING EVIDENCE PERTAININ G TO THE ASSESSEE M/S. V.M.REALITY (P) LTD. SO NOTICE U/S 153C WAS ISSUED RECORDING SATISFACTION NOTE AND IN RESPONSE, THE ASSESSEE SUBMITTED THAT E -FILED RETURN DT. 26.1007 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTIC E U/S 153C. THE ASSESSEE COMPANY IS A REAL ESTATE DEALER AND IS ENGAGED IN THE BUSINESS OF STRIKING DEALS REGARDING SALE OF LAND OWNED BY FARMERS TO WE LL KNOWN BUILDERS & COLONIZERS VIA DLF COMMERCIAL COMPANIES LIMITED, S PLENDER LAND BASE LIMITED AND ITS SUBSIDIARIES AND OTHERS FOR WHICH T HE ASSESSEE EARNS COMMISSION AT SETTLED PERCENTAGE OF THE SALE PROCEE DINGS. DURING THE COURSE OF REQUISITION PROCEEDINGS U/S 132 A BUNCH OF 8 LOO SE PAPERS WERE FOUND IN POSSESSION OF SH. VIPIN VERMA, OUT OF WHICH, PAPERS AT SERIAL NUMBER 1 TO 4 IS A COPY OF AGREEMENT DATED 30.09.2006 BETWEEN THE ASSESSEE AND M/S. SPLENDER LAND BASE LTD. NEW DELHI IN RESPECT OF PUR CHASE OF LAND ABAOUT 68.45 ACRES OF LAND BY THE ASSESSEE FOR M/S. SPLEND ER LAND BASE LTD. @ RS.81 LACS PER ACRE. HOWEVER, THE AGREEMENT IS NOT SIGNED BY M/S. SPLENDER LAND BASE LTD; NEW DELHI, THE BUYER PARTY. AS PER I TS PARA-2 AT PAGE 3, THE ASSESSEE COMPANY HAS RECEIVED RS.5 CRORES AS DETAIL ED BELOW: ITA NO.473(ASR)/2011 5 I) RS.20 LAC IN CASH ON 1.9.06 II) RS.40 LAC BY DD NO.387890 DT. 1.9.96 OF DUETCH E BANK III) RS.30 LAC BY DD NO.394697 DT. 7.9.96 OF DUETCHE BAN K IV) RS.2 CRORES BY CH. NO.092230 DT. 13.10.06 OF DUETCH E BANK V) RS.1.50 CRORE BY CH. NO.069148 DT. 9.10.06 OF DUET CHE BANK VI) RS.50 LACS BY CASH ON 30.9.06 RS.5 CRORES. ASSESSEES COPY OF ACCOUNT IN THE BOOKS OF SPLENDER LAND BASE LTD; WAS COMPARED AND LARGE DIFFERENCE WAS NOTICED IN THE TW O. THE PAYMENT BY CHEQUE & DRAFTS WERE NOTED IN THE ACCOUNTS OF BOTH THE PARTIES. HOWEVER, CASH PAYMENT I.E. RS. 20 LACS ON 1.9.06 AND RS.50 L AKHS ON 30.09.06 ARE UNACCOUNTED IN THE ACCOUNTS OF BOTH THE PARTIES. DU RING THE COURSE OF STATEMENT OF SH. MANINDER SINGH HIRA, MANAGING DIRE CTOR OF APPELLANT COMPANY DENIED RECEIPT OF CASH PAYMENTS OF RS.70 LA KHS. EVEN DURING THE COURSE OF RECORDING MR. HIRAS STATEMENT BY THE AO, HE CATEGORICALLY DENIED ANY AGREEMENT FINALIZED WITH M/S. SPLENDAR LAND BAS E LTD. BY STATING THAT THE AGREEMENT WAS IN PROCESS OF FINALIZATION BUT TH E OTHER PARTY DID NOT AGREE TO THE TERMS OF THE ASSESSEE COMPANY. THE ASSESSEE WAS SUPPLIED COPIES OF STATEMENT OF SH. MANINDER SINGH HIRA, ITS MANAGING DIRECTOR RECORDED BEFORE THE ADI, AMRITSAR AS WELL AS COPIES OF REGIS TRIES DONE BY SPLENDER LAND BASE CO. WITH THE FARMERS. AS PER COPIES OF TH E REGISTRIES AVERAGE RATE OF SALE OF LAND IS SHOWN AT RS.60 LACS PER ACRE. HO WEVER, AS PER COPY OF AGREEMENT REQUISITIONED BY ADI, LUDHIANA FROM SH. V IPIN VERMA, THE LAND ITA NO.473(ASR)/2011 6 IS TO BE SOLD @ RS.81 LACS PER ACRE FROM WHICH IT W AS SAFELY TRANSPIRED BY THE AO THAT THE ASSESSEE WAS TO RECEIVE RS.21 LACS PER ACRE AS PROFIT FROM SALE OF LAND. THIS SHOWS THAT THE PAYMENTS WERE UN ACCOUNTED IN THE HANDS OF M/S. SPLENDER LAND BASE LTD; NEW DELHI AS WELL AS I N THE HANDS OF M/S. V.M. REALITY (P) LTD. UNDER THE CIRCUMSTANCES, IT I S CONFIRMED AND ESTABLISHED BOTH THE CONCERNS ARE IN THE HABIT OF R ECEIPT AND PAYMENT OF UNACCOUNTED MONEY OUTSIDE THE BOOKS OF ACCOUNT. LAT ER ON, DURING THE COURSE OF ASSESSMENT OF M/S. SPLENDER LAND BASE LTD . FOR AY 07-08 U/S 163C THIS AMOUNT OF RS.70 LACS HAS BEEN ADDED TO IT S INCOME BY ACIT CIRCLE 9(1), NEW DELHI VIDE HIS ORDER DT. 31.12.09. SO THE APPELLANT COMPANY HAD PLEADED THAT SINCE THE CASH OF RS.70 LACS HAS BEEN ASSESSED IN THE HANDS OF M/S. SPLENDER LANMD BASE LTD; THE SAME SHOULD NOT B E ASSESSED IN ITS HANDS. FROM THE ABOVE FACTS, THE AO CAME TO THE CON CLUSION THAT THE APPELLANT COMPANY IS ENGAGED IN THE REAL-ESTATE B USINESS OUTSIDE ITS BOOKS I.E. WITHOUT RECORDING ALL SUCH BUSINESS DEALINGS I N ITS BOOKS OF ACCOUNT. FURTHER, IT HAS BEEN HELD THAT IT IS AN UNDENYING F ACT THAT CASH AMOUNT OF RS.70 LACS HAS BEEN RECEIVED BY THE ASSESSEE COMPAN Y. SINCE THE ASSESSEE FAILED TO ACCOUNT FOR THIS TRANSACTION OF RS.70 LAC S IN ITS BOOKS OF ACCOUNT AND NEITHER THE SAME HAS BEEN DISCLOSED IN ITS RETURN OF INCOME REQUISITIONED U/S ITA NO.473(ASR)/2011 7 153C, THE A.O. ADDED IT AS ASSESSEES UNDISCLOSED I NCOME FROM UNEXPLAINED SOURCES BY INVOKING THE PROVISIONS OF SECTION 69A O F THE I.T.ACT,1961. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. AND ALSO ENHANCED ADDITION TO RS.8,60,000/- BEING COMMISSION @ 2% ACC RUED ON RS.4.03 CRORES. 5. THE LD. COUNSEL FOR THE ASSESSEE, SH. SUDHIR SEH GAL, MADE THE WRITTEN SUBMISSIONS BEFORE US AND RELIED UPON THE SUBMISSI ONS MADE BEFORE THE LD. CIT(A). 6. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE F ACTS OF THE CASE. AS REGARDS GROUNDS NO. 1 & 2, THE SAME WERE RAISED BEF ORE THE LD. CIT(A) BY THE ASSESSEE BUT THE SAME HAVE NOT BEEN DECIDED BY THE LD. CIT(A), HOWEVER, BEING THE LEGAL GROUNDS. DURING THE SEARCH AND SEIZ URE OPERATIONS ON ONE SH. VIPIN VERMA, CERTAIN INCRIMINATING EVIDENCE IN THE FORM OF AN AGREEMENT WERE FOUND, WHICH WERE FORWARDED TO THE AO OF THE A SSESSEE AND ON THE BASIS OF THE SAME, NOTICE U/S 132A WAS ISSUED AND A SSESSMENT WAS COMPLETED. WE FIND NO INFIRMITY IN THE ORDER OF THE A.O. IN THIS REGARD AND THEREFORE, GROUNDS NO.1 & 2 OF THE ASSESSEE ARE DIS MISSED. ITA NO.473(ASR)/2011 8 7. AS REGARDS GROUNDS NO. 3 TO 12 WITH REGARD TO AD DITION OF RS.70 LACS AND ENHANCEMENT OF RS.8,60,000/- OF ADDITION HAS BE EN MADE ON THE ASSESSEE ON THE BASIS OF ONE AGREEMENT, WHICH IS PLACED AT PB 12 TO 15, WHICH WAS SEIZED FROM THE PREMISES OF SH. VIPIN VERMA. IT IS NOT IN DISPUTE THAT THE AGREEMENT HAS BEEN SIGNED ON BEHALF OF THE ASSESSEE , BUT THERE IS NO SIGNATURE OF OTHER PARTY. THE CLAIM OF THE ASSESSEE THAT THIS IS NOT A VALID DOCUMENT, SINCE THE SAME HAS BEEN DENIED BY THE MAN AGING DIRECTOR OF THE ASSESSEE COMPANY, SH. MANINDER SINGH IN THE STATEME NT RECORDED BY THE ADI, AMRITSAR AND ALSO BY THE AO IN THE ASSESSMENT PROCEEDINGS. COPIES OF THE STATEMENTS ARE PLACED ON RECORD AT PB 22 TO 33 & 34 TO 43. STATEMENT OF THE PERSON CONCERNED OF SPLENDER LAND BASE LTD; H AS ALSO BEEN DENIED HAVING MADE ANY PAYMENT BY CASH IS A MATTER OF RECO RD. AFFIDAVIT DULY NOTORIZED FROM THE NOTARY HAS BEEN FURNISHED BY TH E ASSESSEE, WHICH IS PLACED AT PB 21. THE CLAIM OF THE ASSESSEE IS THAT A MIDDLEMAN/BROKER AND AUDITED BALANCE SHEET HAS BEEN PLACED ON RECORD, WH ICH SHOWS THE AMOUNT RECEIVED FROM M/S. SPLENDOR LAND BASE LTD; AND ADVA NCES GIVEN FOR PURCHASE OF LAND TO THE FARMERS, WHICH IS PLACED AT PB-5 AND ONWARDS IN THE IMPUGNED ORDER. IT IS ALSO ARGUED BY THE LD. COUNS EL THAT THE ASSESSEE DOES NOT OWN ANY LAND NOR IT HAD TO PURCHASE THE LAND FR OM THE FARMERS WHICH IS EVIDENT FROM THE AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT AT PB 5 & ITA NO.473(ASR)/2011 9 6. IT WAS ARGUED THAT THE BUSINESS OF THE ASSESSEE IS TO ARRANGE LAND ON BEHALF OF THE COMPANIES AND GET THE LAND REGISTERED DIR ECTLY FROM THE FARMERS TO SUCH BUILDERS I.E. M/S. SPLENDER LAND BASE LTD. OUR ATTENTION WAS INVITED BY SH. SUDHIR SEHGAL, THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE DOES NOT OWN IMMOVABLE PROPERTY IN THE AUDITED BALANCE SHEET AND WHATEVER HAS BEEN RECEIVED IS AN ADVANCE RECEIPT AND CANNOT BE TAXED AS INCOME, SINCE THE ASSESSEE IS A COMMISSION AGENT AND MAINTAINING ACCO UNTS ON MERCANTILE SYSTEM, WHICH HAS BEEN ACCEPTED BY THE LD. CIT(A) I S UNDISPUTED. MOREOVER, THE SAID SUM OF RS.70 LACS IS ALLEGED TO HAVE BEEN ADDED AS INCOME IN THE HANDS OF THE ASSESSEE, ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE SAID INCOME HAS BEEN ADDED IN THE HANDS OF M/S. SPLENDOR LAND BASE LIMITED AND THERE CANNOT BE DOUBLE TAXATI ON AND THE SAID AMOUNT CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AND IT IS AGAINST THE SCHEME OF THE ASSESSEE. MOREOVER, THE ADDITION CANNOT BE MADE UNDER SECTION 69A WHICH, IN FACT, HAS BEEN MADE IN THE HA NDS OF M/S. SPLENDOR LAND BASE LIMITED; HAS BEEN ARGUED BY THE LD. COUNS EL FOR THE ASSESSEE. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(A) HAS ACCEPTED THAT THE ASSESSEE IS MAINTAINING MERCANTI LE SYSTEM OF ACCOUNTING AND THEREFORE, THE AMOUNT RECEIVED THROUGH CHEQUES HAVE BEEN TREATED ON BEHALF OF M/S. SPLENDOR LAND BASE LIMITED; AMOUNTIN G TO RS.4.30 CRORES. IT ITA NO.473(ASR)/2011 10 HAS BEEN ACCEPTED BY THE LD. CIT(A) THAT COMMISSION OF 2% ON RS.4.30 CRORES I.E. RS.8.60 LACS HAS BEEN EARNED BY THE AS SESSEE, WHICH HAS NOT BEEN DECLARED BY THE ASSESSEE. THE LD. CIT(A) CANNOT BL OW HOT AND COLD IN THE SAME BREATH THAT ON ONE HAND, HE HAS ADMITTED THAT THE ASSESSEE IS DOING COMMISSION BUSINESS AND EARNING ONLY COMMISSION INC OME FROM M/S. SPLENDER LAND B ASE LIMITED AND OUT OF THE SAME AGREEMENT AN AMOUNT OF RS.4.30 CRORES HAS BEEN CONSIDERED BELONGING TO M/S . SPLENDER LAND BASE LTD; AND ONLY RS.70 LACS HAS BEEN CONSIDERED BELONG ING TO THE ASSESSEE. ON THE OTHER HAND, THE LD. CIT(A), ON ONE HAND HAS AD MITTED THAT THE ASSESSEE IS MAINTAINING ACCOUNTS ON MERCANTILE SYSTEM BASIS AND ON THE OTHER HAND HAS ENHANCED THE INCOME @ 2% ON RS.4.30 CRORES INSP ITE OF THE EXPLANATION SUBMITTED BEFORE HIM THAT NONE OF THE DEAL HAS BEE N FINALIZED. IT WAS ALSO SUBMITTED THAT WHILE FRAMING ASSESSMENT OF THE ASS ESSEE-COMPANY FOR THE FOLLOWING YEAR I.E. 2008-09 THE RETURNED INCOME WAS ACCEPTED, WHICH WAS BASED ON THE COMMISSION EARNED ON PROCUREMENT OF LA NDS INCLUDING M/S. SPLENDER BASE LTD. THE LD. COUNSEL FOR THE ASSESSE RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW IN THIS REGARD AS UNDER: I) SMT. PANNA DEVI CHOWDHARY VS. CIT 208 ITR 849 ( BOM) II) RAJENDER KUMAR GARG VS. DCIT 66 TTJ (DEL-TRIB) 347 III) SMT. SAROJ KUMAR VS. ACIT 91 TTJ(ASR-TRIB) 733 ITA NO.473(ASR)/2011 11 IV) D.A.PATEL VS. DCIT 70 TTJ (MUM-TRIB) 200 V) AMARJIT DAHYABHAI PATEL (HUF) VS. ACIT 81 TTJ (DEL- TRIB) 169 VI) M M FINANCIERS (P) LTD. VS. DCIT 107 TTJ (CHENNAI-T RIB) 200 VII) PANKAJ DAHYABHAI PATEL (HUF) VS. ACIT 63 TTJ (AHD-T RIB) 790. VIII) CIT VS. RAVI KUMAR 294 ITR 78 (P&H) IX) SMT. NEENA SYAL VS. ACIT 69 TTJ (CHD-TRIB) 516 X) PIYUSH INFRASTRUCTURE INDIA PVT. LTD. VS. ACIT 35 C CH (DEL- TRIB) 2013. 8. THE LD. JCIT (DR), MR. MAHAVIR SINGH, ON THE OTH ER HAND, ARGUED THAT ALL MONEY TRANSACTIONS OF RS. 20 LACS AND RS.5 0 LACS TOTALING RS. 70 LACS HAVE NOT BEEN DECLARED BY THE ASSESSEE, CANNOT BE D ISPUTED, EVEN IF THE AGREEMENT HAS NOT BEEN SIGNED BY M/S. SPLENDER LAND BASE PVT. LTD. THE LD. DR, THEREFORE, RELIED UPON THE ORDERS OF THE LD. CI T(A) AND THAT OF THE ASSESSING OFFICER. 9. AFTER HEARING THE PARTIES AND PERUSING THE MATER IAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE AGREEMENT IS UN SIGNED BY THE PARTY M/S. SPLENDER LANDBASE LIMITED; CANNOT BE DISPUTED THAT THE ASSESSEE IS ACTING AS A COMMISSION AGENT, WHICH HAS BEEN ADMITTED AND ACC EPTED BY THE LD. CIT(A), WHO HAS COMPUTED THE COMMISSION INCOME @ 2% OF RS.4.30 CRORES ITA NO.473(ASR)/2011 12 RECEIVED BY THE ASSESSEE ON BEHALF OF M/S. SPLENDER LANDBASE LIMITED., AS PER AGREEMENT SEIZED DURING THE SEARCH AND SEIZURE OPERATIONS AT THE PREMISES OF SH. VIPIN VERMA OF DELHI.. OUT OF THE S AME AGREEMENT, THE ASSESSEE HAD RECEIVED CASH OF RS.70 LACS, WHICH THE ASSESSEE CLAIMED THAT THE SAME HAS NOT BEEN RECEIVED AND M/S. SPLENDER LA NDBASE LIMITED HAS ALSO STATED THAT THE SAID CASH HAS ALSO NOT BEEN P AID. THEREFORE, ON THE BASIS OF ASSUMPTION AND PRESUMPTION, THE LD. CIT(A) CANN OT COME TO THE CONCLUSION THAT THE SAID CASH HAS ACTUALLY BEEN R ECEIVED BY THE ASSESSEE. IF THE SAID CASH HAS BEEN RECEIVED BY THE ASSESSEE THE N THE SAID CASH HAS BEEN RECEIVED FOR AND ON BEHALF OF M/S. SPLENDER LANDBAS E LIMITED AND THE SAME HAS BEEN PAID TO THE FARMERS AND SUCH RECEIPT CAN B E TREATED AS CAPITAL RECEIPT AND ONLY A COMMISSION INCOME @ 2% CAN BE ADDED AS I NCOME IN THE HANDS OF THE ASSESSEE, THOUGH THE SAID AMOUNT OF RS.70 L ACS HAVE BEEN ADDED IN THE INCOME OF M/S. SPLENDER LANDBASE LIMITED. THEREFORE , THERE CANNOT BE DOUBLE TAXATION IN THE HANDS OF THE ASSESSEE UNLESS PROPER AGREEMENT HAS BEEN EXECUTED. THE HALF BAKED AGREEMENT CANNOT BE A BASIS FOR ADDITION OF INCOME. IN THE FACTS AND CIRCUMSTANCES, WHEN THE LD . CIT(A) HAS ACCEPTED THAT THE ASSESSEE HAS RECEIVED THE MONEY FOR AND ON BEHALF OF M/S. SPLENDER LANDBASE LIMITED. IT IS ALSO NOT DENIED BY THE LD. CIT(A) THAT THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT ON MERCANTILE SYST EM OF ACCOUNTING AND ITA NO.473(ASR)/2011 13 THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN ASSES SING THE INCOME IN THE IMPUGNED YEAR. THE ASSESSEE HAS STATED THAT THE DEA LS WERE COMPLETED IN THE FOLLOWING YEAR I.E. ASSESSMENT YEAR 2008-09 AND THE COMMISSION HAS BEEN DECLARED IN THE ASSESSMENT YEAR AND HAS BEEN INVES TED, WHICH IS NOT DISPUTED BY THE INCOME TAX DEPARTMENT. IN THE FACTS AND CIRC UMSTANCES OF THE CASE AND THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE, WE ARE OF THE VIEW THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.70 LACS AND ENHANCING THE COMMISSION AT RS.8,60,000/-.. THU S, ALL THE ADDITIONS MADE ARE DIRECTED TO BE DELETED. HENCE, GROUNDS NO . 3 TO 12 OF THE ASSESSEE ARE ALLOWED. 10. GROUND NO.13 IS GENERAL IN NATURE AND THEREFORE , DOES NOT REQUIRE ANY ADJUDICATION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO.473(ASR)/2011 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S. V.M. REALITY PVT. LTD. AMRITSAR. 2. THE ACIT, CIR.V, AMRITSAR. 3. THE CIT(A), AMRITSAR. 4. THE CIT, AMRITSAR. ITA NO.473(ASR)/2011 14 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR