Sahyadri Corporation, Pune V. CIT(A), Central, Pune

ITA 997/PUN/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0239 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Business income
• Section: 143(3); 153A

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! , # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.997 AND 998/PUN/2012 & & / ASSESSMENT YEARS : 2007-08 AND 2008-09 M/S. SAHYADRI CORPORATION, BHOSALE MYSTIQUA, MODEL COLONY, SHIVAJINAGAR, PUNE 411016. PAN NO.AAEFS6617C. . / APPELLANT V/S A SSST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), PUNE. . / RESPONDENT / APPELLANT BY : SHRI SHARAD A VAZE / RESPONDENT BY : SHRI RAJEEV KUMAR ' / ORDER PER ANIL CHATURVEDI, AM : THESE TWO APPEALS FILED BY THE ASSESSEE ARE EMANATING OUT OF THE TWO SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL, PUNE BOTH DT.23.01.2012 FOR THE ASSESSMEN T YEARS 2007-08 AND 2008-09. / DATE OF HEARING : 21.11.2016 / DATE OF PRONOUNCEMENT: 28.12.2016 2 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 2. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUGH THE 2 APPEALS OF THE ASSESSEE ARE AGAINST THE ORDER OF LD. CIT(A) FOR TWO DIFFERENT ASSESSMENT YEARS BUT SINCE THE ISSUES IN BOTH THE YEARS ARE INTER-CONNECTED, HIS ARGUMENTS WILL ALSO BE COMMON AND THEREFORE BOTH THE APPEALS CAN BE HEARD AN D DISPOSED OF TOGETHER. LD. D.R. DID NOT OBJECT TO THE AFORE SAID SUBMISSION OF LD.A.R. WE THEREFORE FOR THE SAKE OF CONVENIENC E PROCEED TO DISPOSE OF BOTH THE APPEALS TOGETHER. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER: 3.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF LAND. ASSESSEE IS STATED TO BE ONE OF THE CONCERNS OF NILESH KANADE GROUP OF CASES WHO SE PREMISES WERE ALSO SEARCHED. IN THE CASE OF ASSESSEE, W ARRANT OF AUTHORIZATION FOR THE BUSINESS PREMISES WAS EXECUTED O N 24.02.2008. THEREAFTER NOTICE U/S 153A OF THE ACT WAS ISS UED AND SERVED ON ASSESSEE AND IN RESPONSE TO WHICH ASSES SEE FILED THE RETURN OF INCOME FOR AY 2007-08 ON 08.06.2009 DECLARIN G TOTAL INCOME OF RS.44,06,860/-. THEREAFTER THE CASE WAS T AKEN UP FOR SCRUTINY AND ASSESSMENT WAS FRAMED ON 31.12.2009 UNDER SEC.143(3) R.W.S. 153A OF THE I.T. ACT AND THE TOTAL INCOME WAS DETERMINED AT RS.1,05,62,520/-. AGGRIEVED BY TH E ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.23.01.2012 (IN APPEAL NO.PN/CIT(A)-CENTRAL/ACI T CEN.CIR.2(1)/ 1218/09-10) GRANTED PARTIAL RELIEF TO THE ASSESS EE. 3 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON FACTS AND UNDER CIRCUMSTANCES OF THE CASE TH E COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN PARTLY CONFIRMING THE ORDER OF AO CENTRAL CIRCLE 2(1) OF RS.8,40,000/- OUT OF COMMISSIONS OF RS.20,00,218/- BEING EXPENDITURE IS NOT REASONABLE. 2. THE APPELLANT CRAVES THE RIGHT TO ADD, MODIFY, A NNUAL OR ALTOGETHER CANCEL ANY OF THE AFORESAID GROUNDS O F APPEAL. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT THE ASSESSEE HAD DEBITED RS.23,36,557/- ON ACCOUNT OF COMMISSION PAYMENT FOR PURCHASE / SALE OF LAND. THE DETA ILS OF THE PARTIES TO WHOM THE COMMISSION IS PAID IS LISTED AT P AGE 2 OF THE ASSESSMENT ORDER. AO ON PERUSING THE DETAILS CONCLUDED THAT THE COMMISSION PAID TO VARIOUS PARTIES BY ASSESSEE WAS ON A HIGHER SIDE, ASSESSEE HAD NOT DEDUC TED TDS AS STIPULATED U/S 194H BEFORE MAKING THE PAYMENTS. HE ALSO NOTED THAT ASSESSEE HAD PAID COMMISSION OF RS.13,00,000/- TO MR. NARENDRA PANDAV, (WRONGLY WRITTEN BY AO AS SRI PINJA N) IN RESPECT OF SALE OF LAND TO BENCH MARK REALTY PVT. LTD. M R. PANDAV IS A PERSON SPECIFIED U/S 40A(2)(B) OF THE ACT. HE A LSO NOTED THAT COMMISSION OF RS.26,00,000/- WAS STATED TO HAV E BEEN PAID TO SRI PANDAV FOR THE SAME DEAL IN SUBSEQUENT YEAR AND THEREFORE THE TOTAL COMMISSION PAID TO SRI PANDAV WAS RS.39,00,000/- WHICH WORKED OUT TO 13.42% OF THE SALE CONSIDERATION. HE NOTED THAT ASSESSEE HAD NOT GIVEN AN Y JUSTIFICATION FOR PAYMENTS OF HIGH COMMISSION. AO FURTHER NOTED THAT SINCE THE TDS HAS ALSO NOT DEDUCTED WHILE MA KING THE COMMISSION PAYMENT, THE PROVISIONS OF SEC.40(A)(IA) GETS 4 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 ATTRACTED. HE ACCORDINGLY DISALLOWED RS.20,00,218/- BY CONSIDERING THE PAYMENT OF COMMISSION TO BE EXCESSIVE AND RS.2,73,070/- U/S 40(A)(IA) ON ACCOUNT OF NON-DEDUCTION OF TDS AND THUS MADE AGGREGATE DISALLOWANCE OF RS.22,73,288/- . AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT, WHO GRANTED PARTIAL RELIEF TO THE ASSESSE E BY HOLDING AS UNDER: 3.3 A CAREFUL PERUSAL OF THE MATERIAL AVAILABLE O N RECORD REVEALS THAT IN THE CASE OF PAYMENT OF COMMISSION TO THE FIRST FOUR PERSONS, THE AO WAS OF THE VIEW T HAT, NORMALLY, THE COMMISSION IN THIS LINE OF BUSINESS RA NGES FROM 1 % TO 2% DEPENDING ON THE VALUE OF THE DEAL. HOWEVER, HE HAS NOT BROUGHT ON RECORD ANY COMPARABL E CASE; UNDER THE CIRCUMSTANCES, I AM INCLINED TO ACC EPT THE CONTENTION OF THE APPELLANT THAT PAYMENT OF COMMISSION WAS IN PURSUANCE OF CONTRACTUAL OBLIGATI ON. THEREFORE, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE COMMISSION WITHOUT BRINGING ON RECORD ANY MATERIAL IN SUPPORT OF HIS FIGURE OF COMMISSION. THEREFORE, THE DISALLOWANCE MADE IN THE CASE OF FIRST FOUR PERSONS IS DIRECTED TO BE DELETED IN CASE TAX WAS DEDUCTED AND PAID ON THESE AMOUNTS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 40(A)(IA) OF I.T. ACT. 3.4 AS FAR AS PAYMENT OF COMMISSION TO SHRI NARENDRA PANDAV (WRONGLY WRITTEN AS SHRI PINJAN BY THE AO) I S CONCERNED, THE FACTS ARE DIFFERENT. SHRI NARENDRA P ANDAV IS A PERSON SPECIFIED IN SEC.40A(2)(B) OF I.T. ACT. A CLOSER LOOK OF THE TRANSACTION REVEALS THAT HE WAS PAID COMMISSION IN RESPECT OF SALE OF 4.2 ACRES OF LAND. IN RESPECT OF THIS SALE, THE APPELLANT PAID A COMMISSIO N OF RS.26,00,000/- IN THE IMMEDIATELY SUCCEEDING YEAR A LSO. THEREFORE, THE TOTAL COMMISSION IN RESPECT OF THIS TRANSACTION WAS RS.39,00,000/-. A COMPARISON OF PAYMENT OF COMMISSION TO OTHER PERSONS REVEALS THAT COMMISSION OF RS.1.5 LAKHS TO RS.2.5 LAKHS PER ACRE HAS BEEN PAID IN RESPECT OF PURCHASES OF LAND. HOWEVER, IN THE CASE OF SHRI NARENDRA PANDAV, EVEN THOUGH THE TRANSACTION WAS OF SALE, MUCH HIGHER COMMISSION WAS PAID. AFTER CONSIDERING THE CASE IN TOTALITY, I AM OF THE CONSIDERED VIEW THAT A COMMISSION OF RS.2 LAKH PER ACRE IS REASONABLE IN RESPECT OF THE SALE WHICH WAS DONE THROUGH SHRI NARENDRA PANDAV. TOTAL LAND SOLD WAS 4.2 ACRES. THEREFORE, THE REASONABLE COMMISSION TO SHRI NARENDRA PANDAV WOULD BE RS.8.4 LAKHS. HOWEVER, THE TRANSACTION MATERIALIZED IN THE NEXT PREVIOUS YEAR. THEREFORE, THIS AMOUNT OF COMMISSION OF RS.8.4 LAKH S IS OTHERWISE ALLOWABLE IN AY.2008-09. DISALLOWANCE OF COMMISSION OF RS.13 LAKHS IN AY. 2007-08 TO SHRI NARENDRA PANDAV IS CONFIRMED. 5 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 5. AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, LD.AR REITERATED THE SUBMISSIONS MADE BEFOR E AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAD PAID COMMISSION TO NARENDRA PANDAV (WRONGLY WRITTEN AS SHRI PINJAN BY THE AO), WHO IS A PARTNER OF THE ASSESSEE FIRM. HE SUB MITTED THAT THE PAYMENT WAS DISALLOWED BY CONSIDERING THE PAYME NT TO BE EXCESSIVE. HE SUBMITTED THAT THE PROVISIONS OF SEC.40(A )(2A) ARE NOT ATTRACTED TO THE PAYMENT MADE TO PARTNERS, A S THE PAYMENT IS NOT TOWARDS THE EXPENDITURE BUT IT IS A PAYM ENT OF COMMISSION TO A PARTNER OF THE FIRM. HE FURTHER SUBMITTED THAT ASSESSEE IS WORKING PARTNER OF THE FIRM AND THE PAYMENT WAS MADE TO THE PARTNER IS WITHIN THE LIMIT PRESCRIBED U/S 40(B)(V ) OF THE ACT. HE FURTHER SUBMITTED THAT IF THE REMUNERATION P AID TO THE PARTNER IS WITHIN THE CEILING PROVIDED U/S 40(B)(V) THEN AO CANNOT DISALLOW THE PAYMENT ON THE GROUND THAT THE AMO UNT PAID IS EXCESSIVE AND FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GREAT CITY MANUFACTURING COMPANY REPORTED IN 2013 (351) ITR 156 (ALL). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT THE DISALLOWANCE UPH ELD BY LD. CIT(A) BE SET ASIDE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. HE FURTHER SUBMITTED THAT THE ASSESSEE DID NOT PRODUCE THE PARTNERSHIP DEED BEFORE A O AND BEFORE LD. CIT(A), ASSESSEE HAD ACCEPTED THE PAYMENT TO BE EXCESSIVE. HE THEREFORE SUBMITTED THAT AO WAS FULLY JUS TIFIED IN 6 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 MAKING THE DISALLOWANCE AND FOR THAT HE POINTED TO PARA 7 .2 OF PAGE 9 OF CIT ORDER FOR AY 2008-09. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DISALLOWANCE OF COMMISSION PAID TO SRI NARENDRA PANDAV, A PERSON SPECIFIED U/S 40A(2)(B) OF THE ACT, BY HOLDIN G THAT PAYMENT TO BE EXCESSIVE. IT IS AN UNDISPUTED FACT THAT SRI NARENDRA PANDAV IS A PARTNER OF THE ASSESSEES FIRM AND THE PARTNERSHIP DEED ALSO PROVIDES REMUNERATION TO THE PART NER AS PER THE PROVISIONS OF INCOME TAX ACT. IT IS NOT THE CA SE OF REVENUE THAT THE PAYMENT OF COMMISSION MADE TO SHRI NARENDRA PANDAV IS NOT WITHIN THE LIMITS PRESCRIBED U/S 4 0(B) (V) OF THE ACT. WE FURTHER FIND THAT THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GREAT CITY MANUFACTURING COMP ANY (SUPRA) HAS HELD THAT IF THE REMUNERATION TO THE PARTNER IS WITHIN THE CEILING LIMIT PROVIDED THEM RE-COURSE TO PROVISION OF SEC.40(A)(2A) CANNOT BE TAKEN. THE OBSERVATIONS OF THE H ONBLE ALLAHABAD HIGH COURT IS AS UNDER :- 3..SRI CHOPRA SUBMITTED THAT IN THE PARTNERSHIP D EED THE TERMS AN NATURE OF THE DUTIES OF EACH OF THE PA RTNERS IS NOT SPECIFIED AND THEREFORE, IF THE ASSESSING OF FICER HAS FOUND THAT THEY HAVE BEEN PAID EXCESSIVE REMUNERATION EVEN THOUGH THE PARTNERSHIP DEED PROVIDED SUCH PAYMENT HE COULD HAVE DISALLOWED THE SAME. HE PLACED RELIANCE UPON SECTION 40A(2)(A) OF THE ACT. HE SUBMITTED THAT WHEN THE TOTAL PAYMENT OF S ALARY TO ALL ITS EMPLOYEE WAS ONLY RS.4,86,918/- THEN THE RE WAS NO JUSTIFICATION FOR PAYMENT OF RS.39,31,165/- AS REMUNERATION TO THE PARTNERS. THE SUBMISSION IS WHOLLY MISCONCEIVED. IT IS NOT IN DISPUTE THAT ALL THE THREE PARTNERS ARE WORKING PARTNERS IN THE ASSESSEE OPP. PARTY FIRM AND THE ASSESSING OFFICER HAS HIMSELF ALLOWED THE REMUNERATION OF RS.4,00,000/- PER ANNUM TO EACH OF THE PARTNERS. IT IS ALSO NOT IN DISPUTE THAT THE TERMS OF THE PARTNERSHIP DEED SPECIFICALLY PROVIDED THE PAYMENT OF REMUNERATION TO THE WORKING PARTNERS. SECTION 7 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 40(B) (V) OF THE ACT PRESCRIBED LIMIT OF REMUNERATI ON WHICH CAN BE ALLOWED TO ITS PARTNER AS DEDUCTION WHILE COMPUTING THE BUSINESS INCOME. IT IS NOT IN DISPUTE THAT THE REMUNERATION PAID TO THE WORKING PARTNERS WAS WITHIN THE PROVISION OF CLAUSE (V) OF SUBSECTION (B) OF SECTION 40 OF THE ACT. THE PARLIAMENT IN ITS WISDOM HAD FIXED A LIMIT ON ALLOWING THE REMUNERATION TO THE WORKING PARTNERS AND IF THE REMUNERATION ARE WITHIN THE CEILING LIMI T PROVIDED THEN RECOURSE TO PROVISION OF SECTION 40A(2)(A) OF THE ACT CANNOT BE TAKEN. THE ASSESSING OFFICER IS ONLY REQUIRED TO SEE AS TO WHETHER THE PARTNERS ARE THE WORKING PARTNERS MENTIONED IN THE PARTNERSHIP DEED, THE TERMS AND CONDITIONS OF THE PARTNERSHIP DEED PROVIDE FOR PAYMENT OF REMUNERATION TO THE WORKING PARTNERS AND WHETHER THE REMUNERATION PROVIDED IS WITHIN THE LIMITS PRESCRIBED UNDER SECTION 40(B)(V) OR NOT. IF ALL TH E AFOREMENTIONED CONDITIONS ARE FULFILLED THEN HE CANNOT DISALLOW ANY PART OF THE REMUNERATION ON THE GROUND THAT IT IS EXCESSIVE. SINCE IN THE PRESE NT CASE, ALL THE CONDITIONS REQUIRED HAS BEEN FULFILLE D THE QUESTION OF DISALLOWANCE DOES NOT ARISE. IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL HAS FOUND ALL THE THREE CONDITIONS ARE FULFILLED AND WE DO NO T FIND ANY ILLEGALLY IN THE IMPUGNED ORDER. THUS THE APPEAL FAILS AND IS DISMISSED. 8. BEFORE US REVENUE HAS NOT PLACED ON RECORD ANY CONTRARY BINDING DECISION. WE FURTHER FIND THAT OUT OF TH E TOTAL DISALLOWANCE MADE BY THE AO, LD. CIT(A) HELD THE COMMISSION O F RS.8.4 LAKHS TO BE ALLOWABLE AND DISALLOWED RS.13 LAKHS OF COMMISSION IN A.Y 2007-08. THE DISALLOWANCE OF COMMISSION IS NOT FOR THE REASON THAT THE EXPENSES ARE BOGUS. WE FURTHER FIND THAT AGAINST THE RELIEF OF RS.8.4 LAKHS GRANTED BY LD. CI T(A) IN A.Y. 2007-08, REVENUE HAS NOT PREFERRED ANY APPEAL. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS AND RELYING ON THE AFORESAID DECISION OF ALLAHABAD HIGH COURT, WE ARE OF THE VIE W THAT NO DISALLOWANCE OF THE AMOUNT PAID TO THE PARTNER OF THE FIRM SRI NARENDRA PANDAV IS CALLED FOR IN THE PRESENT CASE. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 8 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. 10. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.998/PN/2014 FOR AY 2008-09. 11. ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2008-09 ON 08.06.2009 DECLARING TOTAL INCOME OF RS.22,75,390/-. THE CAS E WAS TAKEN UP FOR SCRUTINY AND THEREAFTER THE ASSESSMEN T WAS FRAMED U/S 143(3) VIDE ORDER DT.31.12.2009 AND THE TOT AL INCOME WAS DETERMINED AT RS.2,84,46,930/-. AGGRIEVED BY TH E ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) IN APPEAL NO. PN/CIT(A)-CENTRAL/ACIT CEN.CIR.2(1)/ 1219/09-10 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RA ISED THE FOLLOWING GROUNDS : 1. ON FACTS AND UNDER CIRCUMSTANCES OF THE CASE TH E COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN PARTLY CONFIRMING THE ORDER OF AO CENTRAL CIRCLE 2(1) OF RS.26,00,000/- OUT OF COMMISSION OF RS.39,00,000/- BEING EXPENDITURE IS NOT REASONABLE. 2. ON FACTS AND UNDER CIRCUMSTANCES OF THE CASE THE COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN CONFIRMI NG THE ORDER OF AO CENTRAL CIRCE 2(1) OF RS.15,00,000/ - BEING UNEXPLAINED EXPENDITURE U/S 69B. 3. ON FACTS AND UNDER CIRCUMSTANCES OF THE CASE THE COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN PARTLY CONFIRMING THE ORDER OF AO CENTRAL CIRCLE 2(1) OF RS.5,00,000/- BEING SHORT OFFERING OF INCOME AS PER STATEMENT U/S 132(4). 4. THE APPELLANT CRAVES THE RIGHT TO ADD, MODIFY, A LTER, ANNUAL OR ALTOGETHER CANCEL ANY OF THE AFORESAID GR OUNDS OF APPEAL. 12. BEFORE US, AT THE OUTSET, LD.AR SUBMITTED THAT HE DID NOT WISH TO PRESS GROUND NO.2 AND IN VIEW OF THE ASSESSEES 9 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 SUBMISSION, THE GROUND IS DISMISSED AS NOT PRESSED. WITH RESPECT TO GROUND NO.1 LD. AR SUBMITTED THAT THIS GROUND IS INTER-CONNECTED WITH GROUND NO.1 OF THE ASSESSEE IN APPE AL FOR AY 2007-08 AND THEREFORE THE GROUNDS IN BOTH THE APP EALS BE CONSIDERED TOGETHER. THE AFORESAID SUBMISSION HAS NOT BEE N OBJECTED TO BY LD. D.R. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN VIEW OF THE SUBMISSIONS OF BOTH THE PARTIES THAT GROUND NO.1 RAISED IN THE PRESENT APPEAL IS INTER- CONNECTED WITH GROUNDS RAISED IN A.Y. 2007-08 AND SINCE GROUND NO.1 HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, WE THEREFORE FOR SIMILAR REASONS, ALLOW THE PRESENT GROUND. 14. NEXT GROUND IS WITH RESPECT TO ADDITION OF RS.5,00,000/-. 15. AO NOTICED THAT DURING THE COURSE OF SEARCH, SRI NILES H KANADE, THE PARTNER OF THE ASSESSEE FIRM HAD DECLARED UNDISCLOSED INCOME OF RS.75,00,000/- BY WAY OF UN-RECORDED SALE CONSIDERATION OF PUNAWALE LAND. AO NOTICED THAT IN THE PROFIT AND LOSS ACCOUNT, ASSESSEE HAD CREDITED ONLY RS.70,00,000/- AND HAD NOT GIVEN ANY REASON FOR NOT OFFERIN G THE ENTIRE AMOUNT OF RS.75,00,000/- THAT WAS DECLARED AT THE TIME OF SEARCH. HE ACCORDINGLY MADE ADDITION OF RS.5,00,000/ -. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD. CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER: 4.3 A CAREFUL CONSIDERATION OF THE MATERIAL AVAILA BLE ON RECORD REVEALS THAT THE AMOUNT OF RS.75 LAKHS WAS DECLARED ON BEHALF OF THE APPELLANT U/S 132(4) OF I .T. ACT IN RESPECT OF PROFIT ON SALE OF PROPERTY AT PUNAWAL E TO PARANDE BUILDERS. THE APPELLANT HAS NOT BROUGHT ON 10 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 RECORD ANY MATERIAL TO SHOW THE FACT THAT, IN FACT, THE PROFIT IN RESPECT OF THIS SALE WHICH WAS DECLARED U /S 132(4) OF I.T. ACT WAS RS.70 LAKHS. UNDER THE CIRCUMSTANCES, THE AOS ACTION IN MAKING ADDITION O F RS.5 LAKHS ON ACCOUNT OF SHORT OFFERING OF INCOME A S PER STATEMENT U/S 132(4) IS UPHELD. THEREFORE, THIS GR OUND OF APPEAL IS DISMISSED. 16. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 17. BEFORE US, THE LD. AR REITERATED SUBMISSIONS MADE BEFORE LD. CIT(A) AND FURTHER SUBMITTED THAT DURING THE COURSE OF SEARCH, ASSESSEE HAD OFFERED RS.75,00,000/- AS ADDITIONAL INCOME. PURSUANT TO THE DECLARATION, ASSESSEE HAD DECLAR ED RS.10,00,000/- FOR AY 2007-08 AND RS.80,00,000/- FOR AY 2008-09 AND THUS THE ASSESSEE HAD FULLY HONOURED THE DECLARATION MADE AND IN SUCH A SITUATION, THE ADDITION OF RS.5,00,000/- WAS NOT CALLED FOR. HE SUBMITTED THAT SRI N ILESH KANADE HAD FILED AN AFFIDAVIT DT.12.06.2009, WHEREIN HE HAD GIVEN THE CLARIFICATIONS AND THE DETAILS OF THE DECLARATION MA DE. HE SUBMITTED THAT THE CLARIFICATION GIVEN IN THE AFFIDAVIT HAS NOT BEEN CONSIDERED BY THE LOWER AUTHORITIES. HE FURTHER SUB MITTED THAT THE ADDITION IS ALSO NOT SUPPORTED BY ANY EVIDENCE AND IN SUCH A SITUATION, NO ADDITION OF RS.5,00,000/- IS CALLED FOR. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A). 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION OF RS.5,00,000/-. THE ADDITION HAS BEE N MADE FOR THE REASON THAT SRI NILESH KANADE, A PARTNER OF THE 11 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 ASSESSEE FIRM, AT THE TIME OF SEARCH HAD DECLARED UNDISCLO SED INCOME OF RS.75,00,000/- BUT IN THE PROFIT AND LOSS ACCOUN T ASSESSEE HAD CREDITED RS.70,00,000/- AND NOT THE ENTIR E AMOUNT OF RS.75,00,000/-. IT IS ASSESSEES SUBMISSION THAT THE AMOUNT OFFERED AT THE TIME OF SEARCH HAS BEEN OFFERED T O TAX BY THE ASSESSEE IN AY 2007-08 AND A.Y. 2008-09. ASSESSEE HAS OFFERED RS.10,00,000/- IN A.Y. 2007-08 AND HAS OFFERED TO RS.70,00,000/- IN AY 2008-09. THE AFORESAID CONTENTION OF ASSESSEE HAS NOT BEEN CONTROVERTED BY THE REVENUE. WE FURTHER FIND THAT THE ADDITION IS NOT SUPPORTED BY ANY TANGIBLE EVIDENCE AND IS ONLY BASED ON THE DECLARATION MADE BY THE PARTN ER. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT NO ADDITION OF RS.5,00,000/- IS CALLED FOR IN THE PRESENT CASE. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 19 . THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A.Y. 2007- 08 IS ALLOWED AND FOR A.Y. 2008-09 IS PARTLY ALLOWE D. ORDER PRONOUNCED ON THE 28 TH DAY OF DECEMBER, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE; ! DATED : 28 TH DECEMBER, 2016. YAMINI 12 ITA NOS.997 & 998/PUN/2012 AY : 2007-08 & 2008-09 ' ( ) *+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. THE CIT (APPEALS), CENTRAL, PUNE. THE CIT (CENTRAL), PUNE, 5 . 6. #$% &&'( , * '( , A / DR, ITAT, A, PUNE; %+, - / GUARD FILE. ' / BY ORDER , // TRUE COPY // // // //TRUE COPY// ./0 &1 '2 / SR. PRIVATE SECRETARY * '( , / ITAT, PUNE