The Income ta Officer, Ward-6(4),, Surat v. M/s. Sanskruti Township, Surat

ITA 1885/AHD/2006 | 2003-2004
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 188520514 RSA 2006
Assessee PAN RPLOT3850I
Bench Ahmedabad
Appeal Number ITA 1885/AHD/2006
Duration Of Justice 5 year(s) 29 day(s)
Appellant The Income ta Officer, Ward-6(4),, Surat
Respondent M/s. Sanskruti Township, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2003-2004
Appeal Filed On 25-08-2006
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH CAHMEDABAD BEFORE S/SHRI D. K. TYAGI J.M. AND A. K. GARODIA A.M. ITA NO. ASST. YEAR 1885/AHD/2006 2003-04 C.O. NO.239/AHD/06 2003-04 INCOME-TAX OFFICER WARD 6(4) SURAT. V/S . M/S SANSKRUTI TOWNSHIP BLOCK NO.428 VILLAGE: PAL HAJIRA ROAD SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S. K. GUPTA CIT DR RESPONDENT BY:- SHRI S. N. SOPARKAR SR.ADVOCATE DATE OF HEARING :15/9/2011. DATE OF PRONOUNCEMENT :23/9/2011. O R D E R PER D. K. TYAGI JUDICIAL MEMBER. THE APPEAL HAS BEEN FILED BY THE REVENUE AND THE C ROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) 9/6 /2006. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES IN LAW T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3 46 61 718/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RECEIPT OF ON MONEY AND EXCESS SALE OF 65 PLOTS. ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 2 (2) THE LD. CIT(A) HAS NOT APPRECIATED THE EFFORTS OF T HE AO IN RESPECT OF ADDITION OF RS.3 46 61 718/- MADE ON ACC OUNT OF RECEIPT OF ON MONEY AND EXCESS SALE OF 65 FLATS. (3) THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO RES TRICT THE DISALLOWANCE OF RS.6 51 470/- OUT OF TOTAL ADDITION OF RS.14 65 772/- 3. THE FIRST AND SECOND GROUNDS OF THE APPEAL RELAT ES TO DELETION OF ADDITION OF RS.3 46 61 718/- MADE BY AO ON ACCOUNT OF RECEIPT OF ON MONEY AND EXCESS SALE OF 65 PLOTS. THE FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 19.03.2004 DECLARING NIL INCOME. THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR SCRUTINY AS PE R THE GUIDELINES OF THE CBDT. ACCORDINGLY NOTICE U/S 143(2) DATED 08.10.20 04 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 16.10.2004. SUBSEQUENTL Y QUESTIONNAIRES DATED 02.06.2005 AND 15.07.2005 WERE ISSUED AND DUL Y SERVED UPON THE ASSESSEE ALONG WITH NOTICE U/S 142(1) OF THE ACT. I N THIS CASE A SURVEY U/S 133A OF THE ACT WAS CONDUCTED ON 11.09.2002 AT THE BUSINESS PREMISES OF THE ASSESSEE SITUATED AT HAZIRA ROAD VILLAGE PAL TAL. CHORYASI DIST. SURAT. DURING THE COURSE OF SURVEY PROCEEDINGS SOM E INCRIMINATING DOCUMENTS WERE FOUND AND IMPOUNDED AS PER ANNEXURE -B DATED 11.09.2002. ON VERIFICATION OF THESE DOCUMENTS AND DIARIES IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDINGS THE AO OBS ERVED THAT AS PER THE COPY OF THE SITE PLAN WHICH WAS IMPOUNDED (PAGE NOS .8 AND 19 OF ANNEXURE-B-19) THERE WERE 90 PLOTS IN THE PROJECT CALLED SANSKRUTI TOWNSHIP. IN THE SITE PLAN CERTAIN PLOTS WERE TICK MARKED BY BLACK BALL PEN AND THESE PLOTS WERE ACTUALLY THE REMAINING UNS OLD PLOTS NUMBERING 25. DURING THE COURSE OF SURVEY THE STATEMENTS OF T HE PARTNERS OF THE FIRM SHRI NILESH J. PATEL AND OTHERS WAS ALSO RECORDED. THE AO REPRODUCED THE ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 3 QUESTION PUT TO HIM AND HIS ANSWERS IN THE ASSESSME NT ORDER AND IT WAS AS UNDER : Q.8: AT THE TIME OF ANSWERING TO QUESTION NO.3 YO U HAD MENTIONED THAT THERE ARE 82 PLOTS IN SANSKRUTI TOWNSHIP AND YOU DO NOT KNOW HOW MANY PLOTS ARE SOLD TILL DATE. I AM SHOWING YOU ONE PAMP HLET IN WHICH YOU HAD IN YOUR HANDWRITING MENTIONED THE DETAILS OF UNSOLD PLOTS. YOU HAVE TICK MARKED BY BLACK BALL PEN THE UNSOLD PLOTS WHEN WE T ALKED ABOUT THE PURCHASING OF PLOTS. ACCORDING TO THIS YOU HAD STA TED THE NUMBER OF PLOTS NO.3 15 16 17 18 35 34 33 32 31 30 29 40 41 42 43 44 58 76 77 80 82 AND 82. YOU HAD STATED THAT UNSOLD PLOTS ARE 25. PL EASE EXPLAIN THE SAME. A.8 IN THIS REGARD IT IS TO BE SUBMITTED THAT I AM NOT SITTING AT HERE. I DO NOT KNOW THE TRUE THINGS AND TO ATTRACT THE CUST OMERS I HAD SHOWN EXCESS BOOKING OF PLOTS. FROM THIS STATEMENT THE AO CAME TO THE CONCLUSION THAT ONLY 25 PLOTS WERE UNSOLD ON THE DATE OF SURVEY AND THEREFORE A T OTAL OF 65 PLOTS WERE SOLD BY THE ASSESSEE DURING THE YEAR UPTO THE DATE OF SURVEY. IN RESPONSE THE ASSESSEE STATED THAT SHRI NILESH PATEL HAD NEVE R ADMITTED THAT 65 PLOTS WERE SOLD BY THE ASSESSEE AND SINCE NO INCRIMINATIN G DOCUMENTS WERE FOUND DURING THE COURSE OF SURVEY IT WAS NOT A FAC T THAT THE ASSESSEE SOLD 65 PLOTS DURING THE YEAR. ANOTHER PARTNER SHRI DINE SH PATEL WHOSE STATEMENT WAS ALSO RECORDED DURING THE COURSE OF SU RVEY ADMITTED THAT THE ASSESSEE HAD SOLD ONLY 6 PLOTS UPTO THE DATE OF SUR VEY AND ONLY 16 PLOTS WERE SOLD TILL THE END OF THE ACCOUNTING YEAR. THE AO REJECTED THE EXPLANATION HOLDING THAT DURING THE COURSE OF SURVE Y SHRI NILESH PATEL HAD HIMSELF TICK-MARKED THE UNSOLD PLOTS ON THE SIT E PLAN AND HAD NEVER DENIED THE FACT THAT ONLY 25 PLOTS REMAINED UNSOLD AND SINCE THE PLOTS WERE SOLD BY THE ASSESSEE IN CASH THE SAME HAS TO BE TREATED AS INCOME OF THE ASSESSEE EVEN IF NO DOCUMENTS/REGISTRATION PAP ERS WERE PREPARED. THE AO FURTHER OBSERVED THAT IT WAS IMMATERIAL THAT NO DOCUMENTS PERTAINING TO SALE OF 65 PLOTS WERE FOUND DURING THE COURSE OF SURVEY SINCE WHEN TRANSACTIONS WERE CARRIED OUT IN CASH AND NO BOOKS OF ACCOUNTS WERE ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 4 MAINTAINED THE CLEAR MARKING OF THE UNSOLD PLOTS O N THE SITE PLAN BY THE PARTNER OF THE FIRM HAD TO BE ACCEPTED AS CORRECT. THE AO THEREFORE HELD THAT THE ASSESSEE HAD SOLD THE 65 PLOTS UP TO THE D ATE OF SURVEY AS AGAINST 6 PLOTS SOLD AS STATED BY THE ASSESSEE UPTO THE DATE OF SURVEY AND TOTAL OF 16 PLOTS SOLD DURING THE ACCOUNTING YEAR. 4. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AOS CONCLUSION WAS BAS ED ONLY ON ONE LOOSE PAPER WHICH WAS A PAMPHLET CONTAINING DESCRIPTION A BOUT PLOTS FOR SALE AND WAS ONLY IN THE NATURE OF ADVERTISEMENT. THE PR ESENT ERA WAS OF ADVERTISEMENT ONE WOULD BE OUT OF MARKET IF ONE DI D NOT SHOW TO PEOPLE THAT THE PRODUCT WAS SELLING LIKE HOT CAKE IN THE M ARKET. ONE HAD TO APPLY DIFFERENT KINDS OF STRATEGY TO ENTICE PEOPLE TO COM E AND BUY THE PRODUCT. THEY HAD TO BE GIVEN ILLUSION THAT THERE WAS LIMITE D STOCK AND IF THEY DONT DECIDE WELL WITHIN TIME THAT THEY MIGHT LOSE IT AND IT WAS A GENERAL PRACTICE OF THE BUSINESS TO EXPOSE BEFORE THE PROSP ECTIVE CUSTOMERS IN A FASHION THAT YOU BUY THE PLOTS IMMEDIATELY OR YOU WILL NEVER GET A PLOT. ACCORDINGLY A PRINTED PAMPHLET WHICH HAS NO UTILITY AS SUCH OR VALUE WAS SHOWN UNDER THE STRATEGY THAT THE PLOTS WHICH WERE UNSOLD WERE SHOWN IN SUCH A MANNER AS IF THEY HAD BEEN SOLD. HENCE SUCH KIND OF PAMPHLET OR A PAPER ON WHICH NO SIGNATURE DATE OR AMOUNT WAS W RITTEN HAD NO EVIDENTIARY VALUE AND WAS JUST A BUSINESS STRATEGY TO ATTRACT CUSTOMERS AND NOTHING BEYOND THAT. THERE WERE 14 PARTNERS IN THE FIRM WHO WERE DOING ACTIVITY IN DIFFERENT LINES. HENCE EVERY PARTNER W OULD NOT KNOW EVERYTHING. AS PER THE PARTNERSHIP DEED NILESHBHAI WHOSE STATEMENT WAS RECORDED HAD NEVER BEEN AUTHORIZED TO DEAL WITH ANY ONE. HENCE HIS STATEMENT WAS OF NO VALUE. EVEN OTHERWISE HE DID NO T STATE ANYTHING ON WHICH SUCH A HUGE ADDITION COULD BE MADE. SHRI NILE SH K PATEL NEVER ADMITTED THAT 65 PLOTS WERE SOLD NOR ANY DOCUMENTS FOUND DURING THE ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 5 COURSE OF SURVEY FROM WHICH IT COULD BE ESTABLISHED THAT APPELLANT HAD SOLD 65 PLOTS. ANOTHER PARTNER SHRI DINESH K. PATEL IN HIS STATEMENT DATED 11/9/2002 DURING THE COURSE OF SURVEY PROCEEDINGS H AD ALREADY SUBMITTED THAT ONLY 6 PLOTS WERE SOLD TILL THE DATE OF SURVEY . HENCE IT COULD NEVER BE ASSUMED THAT 65 PLOTS WERE SOLD DURING THE YEAR UND ER CONSIDERATION. 4.1 THE LD. AR ALSO REITERATED THE FACT THAT THE AS SESSEE HAD SOLD ONLY 16 PLOTS DURING THE YEAR UNDER CONSIDERATION AND TH E REMAINING PLOTS WERE SOLD IN SUBSEQUENT YEARS ONLY. IT WAS FURTHER SUBMI TTED THAT THE CHART REGARDING SALE OF 65 PLOTS AS PER PAGE 10 OF THE AS SESSMENT WAS FACTUALLY INCORRECT SINCE PLOTS AT SL.NO.4 9 19 37 49 55 56 5 7 61 62 64 65 71 72 AND 87 ONLY WERE SOLD DURING THE YEAR AND ALL OTHER PLOTS WERE SOLD IN FYS 2003-04 2004-05 AND 2005-06 IN SUPPORT OF WHICH T HE ASSESSEE FURNISHED COPIES OF REGISTRATION PAPERS OF ALL THE PLOTS SOLD TILL DATE. 5. THE LD. CIT(A) CONSIDERING THE OBSERVATIONS OF T HE AO AND THE SUBMISSIONS ALONG WITH DOCUMENTS OF THE ASSESSEE OB SERVED AS UNDER :- I HAVE CONSIDERED THE SUBMISSIONS AND HAVE GONE TH ROUGH THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY PROCEED INGS AND THE PAPER BOOK FILED BY THE APPELLANT AS ALSO THE COPIES OF C ONVEYANCE DEEDS IN RESPECT IN RESPECT OF THE SAID 65 PLOTS AND FIND TH AT THE APPELLANTS CONTENTION IS IN ORDER. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE APPELLANT FILED CONVEYANCE DEEDS IN RESPECT OF 16 P LOTS CLAIMED TO HAVE BEEN SOLD BY IT DURING THE YEAR. HOWEVER IT IS SUR PRISING THAT THE AO EITHER DID NOT ASK FOR OR DECLINED TO ENTERTAIN THE CONVEYANCE DEEDS IN RESPECT OF OTHER PLOTS WHICH THE ASSESSEE CLAIMED T O HAVE SOLD DURING THE SUBSEQUENT YEARS. IT APPEARS THAT THESE DOCUMENTS W ERE NOT TAKEN ON RECORD SIMPLY TO STRENGTHEN THE AOS VIEW FOR MAKIN G THE SAID ADDITION. THE SAID DOCUMENTS WERE FILED BEFORE ME AND ALTHOUG H THE SAME WERE NOT ADDITIONAL EVIDENCE THE AO WAS CONFRONTED WITH THI S AND REQUESTED TO EXPLAIN AS TO WHY THESE DOCUMENTS WERE NOT EXAMINED BY HIM WHICH WOULD SUBSTANTIATE THE APPELLANTS CLAIM THAT ONLY 16 PLOTS WERE SOLD DURING THE YEAR UNDER CONSIDERATION. NO COMMENTS WE RE OFFERED BY THE AO ON THIS ASPECT. AFTER GOING THROUGH THE CONVEYAN CE DEEDS IN RESPECT OF ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 6 65 PLOTS MENTIONED TO HAVE SOLD BY THE AO DURING TH E YEAR I FIND THAT THE APPELLANTS CONTENTION IS CORRECT. IT IS SEEN THAT PLOTS AT SL. NOS.2 5 6 7 8 10 25 26 27 28 29 38 39 45 46 47 48 5 0 51 52 53 54 59 63 66 67 68 69 70 73 74 75 78 79 84 WERE ALL SOLD DURI NG THE FINANCIAL YEAR 2003-04 AND REST OF THE PLOTS WERE SOLD DURING FINA NCIAL YEARS 2004-05 AND 2005-06 ONLY. SINCE THERE IS DOCUMENTARY EVIDEN CE IN THE FORM OF CONVEYANCE DEEDS IN RESPECT OF THE CONTENTIONS OF T HE APPELLANT I AM OF THE CONSIDERED VIEW THAT THE APPELLANTS CLAIM OF H AVING SOLD ONLY 16 PLOTS DURING THE YEAR IS IN ORDER AND NO ADVERSE IN FERENCE CAN BE DRAWN ON THIS GROUND AND THE CLAIM OF THE APPELLANT SHOUL D HAVE BEEN ACCEPTED. 6. OTHER RELATED GROUND OF APPEAL IS REGARDING THE ADDITION ON ACCOUNT OF ALLEGED ON MONEY RECEIVED ON SALE OF THE PLOT. THE AO MADE ADDITION IN RESPECT OF ALLEGED ON MONEY CHARGED BY THE APP ELLANT ON SALE OF THE ABOVE MENTIONED 65 PLOTS. IT WAS OBSERVED BY THE AO THAT ON PAGE NO.65 OF ANNEXURE-B-11 FOUND AND IMPOUNDED DURING THE COU RSE OF SURVEY THE RATE OF CORNER PLOT INSIDE PLOT ETC. WAS WRITTEN. THE NARRATION OF THE RELEVANT PIECE OF PAPER IS AS UNDER :- CORNER PLOT 3850 INSIDE PLOT SINGLE 3500 1 TO 10 PLOT 3350 BOOKING AMOUNT 25% PAYMENT TIME OF PAYMENT OF PLOT SALES 6 TO 7 MONTHS DEVELOPMENT CHARGES 20 000 15 DAYS PAYMENT 3200 AMOUNT OF DOCUMENTS AS PER JANTRI 400 PER SQ. METR ES. THE AO FURTHER OBSERVED THAT ON THE SITE PLAN FOUND AND IMPOUNDED AS PER PAGE NO.19 OF ANNEXURE B-19 THE ASSESSEE FIRM S PARTNER HAD ALSO WRITTEN THE SALE PRICE OF VARIOUS PLOTS AS 1 TO 13 -4150 AND 14 TO 82 -3950. ON THIS POINT THE RELEVANT PORTION OF STATEMENT SHR I NILESH PATEL WAS ALSO REPRODUCED IN THE ASSESSMENT ORDER AS UNDER - ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 7 Q NO.6 IN YOUR ANSWER TO QUESTION NO.5 YOU HAD STA TED RS.335 PER SQ.YD. AS THE SALE PRICE OF PLOT. WHEN WE CAME TO Y OUR OFFICE IN THE MORNING AND TALKED ABOUT SALE PRICE OF PER SQ.YARD YOU HAD STATED RS.4150/- AS RATE PER SQ. YARD. FURTHER OF PLOT NO. 14 TO 82 YOU SAID HAS SALE PRICE OF RS.3950/- PER SQ. YARD. PLEASE EXPLAI N THE SAME IN DETAIL. A NO.6 I WAS NOT KNOWING THE EXACT DETAIL. I AM NO T SITTING IN THE SITE OFFICE OF M/S SANSKRUTI TOWNSHIP. I AM ATTENDING TH E OFFICE TODAY ONLY AND I DID NOT KNOW. THEREFORE I HAD STATED THE RATE MEN TIONED BY YOU BY MISTAKE. FROM THE ABOVE NOTINGS IN THE IMPOUNDED DOCUMENTS A ND THE REPLY OF THE ASSESSEE TO QUESTION NO.6 MENTIONED ABOVE HE CONCL UDED THE ASSESSEE WAS NOT RECORDING FULL SALE CONSIDERATION IN ITS BO OKS SINCE THE DOCUMENTED PRICE WAS LESS THAN THE ACTUAL SALE PRIC E. WHEN REQUIRED TO EXPLAIN AS TO WHY THE SALE PRICE OF SAID PLOTS SHOU LD NOT BE TAKEN AT RS.4150/- PER SQ. YD. ON THE BASIS OF PAGE NO.69 OF ANNEXURE B-11 OF THE IMPOUNDED MATERIAL THE APPELLANT STATED AS UNDER : THE UPPER PORTION OF PAGE NO.69 CONTAINS THE DETAI LS OF WORK TO BE DONE BY THE UNKNOWN CONTRACTOR WHICH IS INCORPORATED BY HIM. THE FIRST THREE ITEMS OF LOWER PORTION INDICATES THE ESTIMATE OF AD DITIONAL DEVELOPMENT CHARGES OF CERTAIN PLOTS WHICH ARE ADJOINING TO MOR E MARGIN LAND. THE 4 TH AND 5 TH ITEM WAS INCORPORATED BY THE CONTRACTOR. HE WAS IN FORMED THAT HE WILL OBTAIN 25% OF PAYMENT FROM THE BOOKER IN RESPE CT OF THE DEVELOPMENT CHARGES AND HE WILL BE GIVEN FULL AMOUNT WITHIN 6 T O 7 MONTHS. 6 TH AND 7 TH ITEM IS THE SUGGESTION MADE BY THE CONTRACTOR TO CO LLECT RS.20 000/- PER PLOT AND HE WILL COLLECT NEARLY 15% I.E. RS.3 000/- PER PLOT IRRESPECTIVE OF WHETHER BOOKING IS MADE OR NOT. THE SAID CONTRACTOR WAS INTERESTED IN BUYING CERTAIN PLOTS AS AGAINST THE PAYMENT TO BE O BTAINED BY HIM FOR THE PROPOSED CONTRACT AND HE INQUIRED IN RESPECT OF THE CONSIDERATION OF THE PLOT PER SQ.METRE WHICH HE HAS INCORPORATED AT LAST . THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESS EE ON THE GROUND THAT THE PARTNER OF THE FIRM SHRI NILESH PATEL HAD NOT D ENIED THIS RATE WHICH WAS MENTIONED ON THE IMPOUNDED DOCUMENT AND IT WAS NOT BELIEVABLE THAT A PARTNER OF THE FIRM WHO WAS PAID SALARY WAS NOT K NOWING THE RATE OF ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 8 PLOTS AT WHICH THESE WERE ACTUALLY SOLD. THE AO FUR THER HELD THAT THE ASSESSEES EXPLANATION REGARDING THE NOTINGS BEING MADE BY THE UNKNOWN CONTRACTOR WAS ALSO AN AFTER THOUGHT SINCE HE WAS N OT ABLE TO FURNISH THE NAME OR THE ADDRESS OF THE SAID CONTRACTOR AND SINC E THE IMPOUNDED DOCUMENT WAS A DIARY WHERE THE EXPENSES DETAILS OF WORK DONE WERE MENTIONED NO PRUDENT BUSINESSMAN WILL WRITE THE DE TAILS OF DISCUSSIONS WITH THE KNOWN CONTRACTOR ON SUCH A PAPER AND THAT IT WAS CLEAR THAT THE APPELLANT WAS SELLING PLOTS NOT BELOW THE RATES MEN TIONED IN THE SAID PAPER. THE AO THEREFORE WORKED OUT THE SALE PRICE OF 65 PLOTS SOLD BY THE APPELLANT AT THE RATES MENTIONED IN THE IMPOUNDED P APER AND MADE AN ADDITION OF RS.3 46 61 718/-. 7. BEFORE THE LD. CIT(A) THE SUBMISSION OF THE ASSE SSEE WAS THAT THE AOS CONTENTION THAT ASSESSEE RECEIVED ON MONEY A MOUNT FOR SELLING PLOT WAS WITHOUT ANY BASIS AND WAS A MERE GUESSWORK WITHOUT ANY COGENT PROOF. HIS CONTENTION THAT SUCH PLOTS WERE SOLD AT A MUCH MORE PRICE THAN WHAT WAS ACCOUNTED FOR WAS ON THE BASIS OF ONLY ONE ROUGH SHEET CONTAINING ONLY A AREA WISE DESCRIPTION (NOT INCLUD ING THE SALES PRICE) OF LAND FOR ADVERTISEMENT. IT WAS FURTHER SUBMITTED TH AT NOWHERE IN THE WHOLE PAMPHLET WORD RUPEES WAS USED. EVEN THE AMO UNT WRITTEN BY PEN DID NOT MENTION RUPEES ANYWHERE. THE FIGURE W RITTEN BY PEN WAS IN POINT I.E. 41.50 AND 39.50 AND DID NOT INDICATE WHETHER IT IS FOR SQ.METERS OR YARD OR FEET OR FOR FULL PLOT AND MOST IMPORTANT FACT WAS THAT SUCH A PAMPHLET COULD NOT BE CONSTRUED AS ANY LEGAL SUPPORTIVE PROOF IN ANY CIRCUMSTANCES. FURTHER NOWHERE IN ANY OF STATEM ENT GIVEN AT THE TIME OF SURVEY ANYONE ACCEPTED THAT ON MONEY WAS CHARGED . IT WAS FURTHER SUBMITTED THAT NONE OF THE PARTNERS STATEMENT DIFFE RED ANYWAY ON THIS ASPECT. THE SALE DEEDS WERE PRODUCED BEFORE THE AO IN WHICH THE BUYER WAS CHARGED RS.400/- PER SQ. YARD FOR OUTER SIDE PL OT AND NAMES ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 9 ADDRESSES ETC. AVAILABLE WHO COULD HAVE CALLED THEM AND CONFIRMED THE AMOUNT WHETHER APPELLANT CHARGED ANYTHING EXTRA OTH ER THAN WHAT WAS ACCOUNTED FOR. BUT THE AO COULD NOT FIND ANY DISCRE PANCY OR FAULT IN SUCH DOCUMENT AND HE ULTIMATELY ACCEPTED THE RATE DISCLO SED FOR SUCH PARTIES. THE LD. AR FURTHER RELIED ON VARIOUS JUDGMENT IN SU PPORT OF HIS CONTENTIONS THAT NO ADDITION COULD BE SUSTAINED MER ELY ON THE BASIS OF LOOSE PAPERS. 7.1 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED TH AT THE AO ALSO TRIED TO STRENGTHEN HIS FINDINGS REGARDING ON MONEY BY OBSERVING IN HIS ORDER ON PAGE NO.9 AND 10 THAT THE RATE OF PLOT WAS RS.3 650/- PER SQ. YARD AS PER DOCUMENT AT PAGE NO.69 OF ANNEXURE B-11 AND IN ADDITION TO SUCH SALE CONSIDERATION THE ASSESSEE WAS ALSO COLLECTING DEVELOPMENT CHARGES OF RS.20 000/- PER PLOT. IT WAS STATED BY THE AO TH AT THE SALE CONSIDERATION RECEIVED IN RESPECT OF 664 SQ. YARDS OF LAND AT THE RATE OF RS.3 650/- PER SQ.YARD WOULD WORK OUT TO RS.24 23 600/- AND THE DE VELOPMENT CHARGES FOR SIX PLOTS WOULD BE RS.1 20 000/- WHICH WOULD AD D UP TO RS.25 43 600/- OUT OF WHICH THE AMOUNTS SPENT FOR D EVELOPMENT UPTO THE DATE OF SURVEY AS PER CASH BOOK WAS RS.8 321/- AND AS SUCH UNACCOUNTED PROFIT ON SALE OF SIX PLOTS AVAILABLE FOR SETTLEMEN T AMONGST 14 PARTNERS WOULD BE RS.17 29 279/-. THE AO FURTHER OBSERVED TH AT AS PER THE PARTNERSHIP DEED ONE OF THE PARTNER SHRI JHAVERBHAI WAS HAVING 6.67% SHARE AND HIS SON SHRI PRAKASHBHAI 6.66% SHARE AND THE TWO TOGETHER HELD 13.33% SHARE. THE PROPORTIONATE SHARE ON THIS PROFI T WOULD WORK OUT TO RS.2 30 000/- AND ON VERIFICATION OF PAGE NO.26 OF ANNEXURE B-11 IT WAS FOUND THAT SHRI JHAVERBHAI HAD WITHDRAWN A TOTAL OF RS.2 30 000/- ON VARIOUS DATES I.E. RS.1 LAKH ON 22/4/2002 RS.50 00 0/- ON 1/5/2002 AND RS.80 000/- ON 8/5/2002 WHICH PROVED THAT THE ASSES SEE HAD SOLD THESE SIX PLOTS BY CHARGING ON MONEY OF RS.3 325/- PER SQ.Y ARD. ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 10 7.2 THE LD. AR OF THE ASSESSEE ALSO SUBMITTED THAT THE OBSERVATIONS OF THE AO WERE NOT BASED ON THE FACTS. THE AO REFERRED TO PAGE NO.56 OF ANNEXURE B-5 WHEREIN THERE WAS AN ALLEGED WITHDRAWA L OF RS.2 30 000/- ON 3 DIFFERENT DATES BUT ON THE SAME PAGE AGAINST THE NAME OF SHRI JHAVERBHAI 43.25 WAS ALSO MENTIONED WHICH IN FACT W AS HIS COLLECTIVE SHARE IN THE PARTNERSHIP SINCE HE WAS REPRESENTING ELEVEN OTHER PARTNERS ALSO AND THAT THE AO DID NOT REFER TO A MATERIAL NO THING ON PAGE 58 OF THE SAME ANNEXURE WHEREIN AGAINST A TOTAL OF RS.5 25 6 60/- FOUR NAMES WERE MENTIONED I.E. THAT OF JHAVERBHAI -230000 -43.75; K .D -147830 -28.12 P.G -111241 -21.16 AND G.C. -36589 -5.95. IT WAS SU BMITTED THAT THE AOS OBSERVATION THAT THIS WAS THE AMOUNT OF PROFIT AVAILABLE FROM CHARGING OF ON MONEY WAS WITHOUT ANY BASIS AND IN FACT WAS THE INVESTMENT BY THESE PARTNERS FOR DEVELOPMENT WORK I N THE LAND. IT WAS ALSO SUBMITTED THAT FOUR PLOTS WERE SOLD ON 31/5/20 02 AND TWO PLOTS WERE SOLD ON 12/8/2002 WHEREAS AS PER THE AO THE ON MO NEY WAS RECEIVED AND WITHDRAWN BY THE PARTNERS ON 22/4/2002. THE SO CALLED UNACCOUNTED PROFITS COULD NOT HAVE BEEN SHARED IN ADVANCE OR WI THDRAWN IN ADVANCE. 8. AFTER CONSIDERING THE OBSERVATIONS OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE THE LD. CIT(A) DELETED THE ENTIRE A DDITION ON THIS ACCOUNT I.E. RECEIPT OF ON MONEY AND EXCESS SALE OF PLOTS BY OBSERVING AS UNDER:- I HAVE GONE THROUGH THE COPIES OF THE IMPOUNDED MA TERIAL AND THE STATEMENT OF PARTNERS OF THE FIRM RECORDED DURING T HE COURSE OF SURVEY OPERATION. IT IS SEEN THAT THE AO HAS REALLY PUT IN A LOT OF EFFORTS AND HARD WORK IN WORKING OUT THE SALE PRICE OF EACH AND EVER Y PLOT ON THE BASIS OF NOTINGS IN THE IMPOUNDED MATERIAL AS ALSO DETAILED EXAMINATION OF THE IMPOUNDED PAPERS. HOWEVER THE AO HAS BASED HIS CON CLUSION ON THE NOTINGS OF THE IMPOUNDED MATERIAL AND THE UNRECORDE D EVIDENCE OF WHAT TRANSPIRED BETWEEN THE PAPERS OF THE FIRM SHRI NILE SH PATEL AND THE SURVEY PARTY PRIOR TO START OF THE ACTUAL SURVEY OP ERATIONS. I HAVE ALSO ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 11 EXAMINED THE STATEMENTS OF THE VARIOUS PARTNERS REC ORDED DURING THE COURSE OF SURVEY OPERATIONS AND FIND THAT NOWHERE I N THE STATEMENTS AS IT HAS BEEN ADMITTED BY ANY OF THE PARTNERS THAT ON M ONEY WAS BEING CHARGED ON SALE OF THE PLOTS. IT IS ALSO SEEN THAT NO CASH OR ANY OTHER INCRIMINATING MATERIAL TO PROVE THE CHARGING OF ON MONEY WAS FOUND DURING THE COURSE OF SURVEY OPERATIONS. THE AOS CO NCLUSION BASED ON THE NOTINGS ON THESE PAPERS IS NOT SUSTAINABLE SINCE TH E APPELLANTS EXPLANATION IS ALSO CONVINCING AND CANNOT BE REJECT ED OUT RIGHT SPECIALLY IN VIEW OF THE FACT THAT THERE WAS NO DISCLOSURE MA DE BY THE APPELLANT NOR WAS ANY CASH FOUND AT THE TIME OF SURVEY AND AS HEL D BY THE VARIOUS COURTS NO ADVERSE INFERENCE CAN BE DRAWN FROM NOTI NGS ON LOOSE PAPERS OR DIARIES UNLESS CORROBORATIVE EVIDENCE IS ALSO AV AILABLE. IN THE INSTANT CASE THE REGISTRATION OF SALE DEED HAS BEEN DONE A T THE RATE OF RS.400/- PER SQ.YARD WHICH WAS THE RATE FIXED BY THE GOVERNM ENT. IT IS ALSO SEEN THAT THE AO HAS NOT BROUGHT ANY OTHER CASE ON RECOR D WHERE SIMILAR PLOTS IN ANY OTHER OR SAME LOCALITY WERE SOLD AT THE RATE S CALCULATED BY THE AO IN THE INSTANT CASE. FURTHER THE AO DID NOT RECORD THE STATEMENT OF ANY OF THE BUYERS OF THE PLOTS WHICH COULD HAVE ESTABLISHE D HIS CASE THAT ON MONEY WAS PAID FOR PURCHASE OF SUCH PLOTS I AM ALS O IN AGREEMENT WITH THE LD. AR THAT SUCH STATEMENTS COULD HAVE GONE IN HIS FAVOUR SINCE NEITHER THE BUYERS NOR THE SELLERS MIGHT HAVE ADMIT TED TO THE PAYMENT OR RECEIPT OF ANY SUCH ON MONEY AND THEREFORE THERE IS NO JUSTIFICATION IN MAKING AN ADDITION ON THE BASIS OF SUCH UNRELATED A ND UNCONFIRMED MATERIAL. I HAVE ALSO CONSIDERED THE EXPLANATION FI LED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND AFT ER EXAMINING THE TWO DOCUMENTS I.E. PAGE NO.56 AND 58 OF THE ANNEXURE B- 11 IT IS CLEAR THAT THE SAID ENTRIES COULD NOT POSSIBLY BE IN RESPECT O F WITHDRAWAL OF MONEY OR ALLOCATION OF ALLEGED ON MONEY RECEIVED SINCE NO PRUDENT BUYER WOULD PAY SUCH ON MONEY THREE MONTHS IN ADVANCE T O UNKNOWN AND UNRELATED PROPERTY DEALER. IT IS FURTHER SEEN THAT THE AO HAS RELIED UPON THE NOTING ON THE PAMPHLET IN SUPPORT OF HIS VIEW T HAT THE PLOTS WERE SOLD AT THE RATE OF RS.3650/-. A PERUSAL OF THE SAID DOC UMENT AT PAGE 19 OF ANNEXURE B-19 SHOWS THAT 4150 AND 3950 ARE THE FIGU RES WRITTEN ON IT WHICH DO NOT HAVE ANY CO RELATION WITH THE RATES OF PLOTS WORKED OUT BY THE AO. THE AO HAS RELIED ON NOTINGS OF PAGE 69 OF ANNEXURE B-11 WHICH IS AGAIN AN UNSIGNED PAPER AND AS PER THE VERSION O F THE APPELLANT IS ONLY AN ESTIMATE OF THE CHARGES QUOTED BY THE CONTRACTOR . THESE UNSIGNED DOCUMENTS HAVE NO EVIDENTIARY VALUE SPECIALLY IN VI EW OF THE FACT THAT NO CORROBORATIVE EVIDENCE LIKE CASH FOUND OR ANY OTHER PAPER ACKNOWLEDGING THE RECEIPT OF ANY ON MONEY OR ANY INCRIMINATING EVIDENCE/DOCUMENT WAS FOUND DURING THE COURSE OF SU RVEY OPERATIONS. IT IS ALSO IMPORTANT TO NOTE THAT NONE OF THE PARTNERS EVEN DURING THE COURSE OF SURVEY OPERATIONS EVER ADMITTED TO CHARGING OF ON MONEY NOR OFFERED ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 12 THE SAME FOR TAXATION WHICH IS UNUSUAL DURING THE C OURSE OF SURVEY WHEN MOST OF THE BUSINESSMEN SURRENDER THEIR UNACCOUNTED INCOME. IN VIEW OF THIS IT IS HELD THAT THE AOS ACTION IN RELYING UP ON UNRELATED DOCUMENTS IS NOT IN ORDER AND ENTIRE ADDITION ON THIS ACCOUNT I. E. RECEIPT OF ON MONEY AND EXCESS SALE OF PLOTS IS DIRECTED TO BE DELETED. AGAINST THIS ORDER OF THE LD. CIT(A) THE REVENUE HA S COME IN APPEAL BEFORE THE TRIBUNAL. 9. BEFORE US THE LD. DR SUPPORTED THE ORDER OF AO A ND SUBMITTED THAT DURING THE COURSE OF SURVEY PROCEEDINGS SOME INCRI MINATING DOCUMENTS WERE FOUND AND IMPOUNDED AS PER ANNEXURE-B DATED 1 1.09.2002. ON VERIFICATION OF THESE DOCUMENTS AND DIARIES IMPOUND ED DURING THE COURSE OF SURVEY PROCEEDINGS THE AO OBSERVED THAT AS PER THE COPY OF THE SITE PLAN WHICH WAS IMPOUNDED (PAGE NOS.8 AND 19 OF ANNE XURE-B-19) THERE WERE 90 PLOTS IN THE PROJECT CALLED SANSKRUTI TOWNS HIP. IN THE SITE PLAN CERTAIN PLOTS WERE TICK MARKED BY BLACK BALL PEN AN D THESE PLOTS WERE ACTUALLY THE REMAINING UNSOLD PLOTS NUMBERING 25. D URING THE COURSE OF SURVEY THE STATEMENTS OF THE PARTNERS OF THE FIRM S HRI NILESH J. PATEL AND OTHERS WAS ALSO RECORDED. THE ASSESSEE WAS NOT RECO RDING FULL SALE CONSIDERATION IN ITS BOOKS SINCE THE DOCUMENTED PRI CE WAS LESS THAN THE ACTUAL SALE PRICE. THE AO HAD HELD THAT THE ASSESSE ES EXPLANATION REGARDING THE NOTINGS BEING MADE BY THE UNKNOWN CON TRACTOR WAS ALSO AN AFTER THOUGHT SINCE HE WAS NOT ABLE TO FURNISH THE NAME OR THE ADDRESS OF THE SAID CONTRACTOR AND SINCE THE IMPOUNDED DOCUMEN T WAS A DIARY WHERE THE EXPENSES DETAILS OF WORK DONE WERE MENTIONED NO PRUDENT BUSINESSMAN WILL WRITE THE DETAILS OF DISCUSSIONS W ITH THE KNOWN CONTRACTOR ON SUCH A PAPER AND THAT IT WAS CLEAR TH AT THE APPELLANT WAS SELLING PLOTS NOT BELOW THE RATES MENTIONED IN THE SAID PAPER. THE AO THEREFORE WORKED OUT THE SALE PRICE OF 65 PLOTS SO LD BY THE APPELLANT AT THE RATES MENTIONED IN THE IMPOUNDED PAPER. THE LD. CIT(A) HAS WRONGLY ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 13 DELETED THE IMPUGNED ADDITION MADE BY THE AO. THERE FORE HE PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF TH E AO BE RESTORED. 10. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT AOS CONTENTION THAT ASSESSEE RECEIVED ON MONEY A MOUNT FOR SELLING PLOT WAS WITHOUT ANY BASIS AND WAS A MERE GUESSWORK WITHOUT ANY COGENT PROOF. HIS CONTENTION THAT SUCH PLOTS WERE SOLD AT A MUCH MORE PRICE THAN WHAT WAS ACCOUNTED FOR WAS ON THE BASIS OF ONLY ONE ROUGH SHEET CONTAINING ONLY AN AREA WISE DESCRIPTION (NOT INCLU DING THE SALES PRICE) OF LAND FOR ADVERTISEMENT. IT WAS FURTHER SUBMITTED TH AT NOWHERE IN THE WHOLE PAMPHLET WORD RUPEES WAS USED. EVEN THE AMO UNT WRITTEN BY PEN DID NOT MENTION RUPEES ANYWHERE. THE FIGURE W RITTEN BY PEN WAS IN POINT I.E. 41.50 AND 39.50 AND DID NOT INDICATE WHETHER IT IS FOR SQ.METERS OR YARD OR FEET OR FOR FULL PLOT AND MOST IMPORTANT FACT WAS THAT SUCH A PAMPHLET COULD NOT BE CONSTRUED AS ANY LEGAL SUPPORTIVE PROOF IN ANY CIRCUMSTANCES. NOWHERE IN ANY OF STATEMENT GIVE N AT THE TIME OF SURVEY ANYONE ACCEPTED THAT ON MONEY WAS CHARGED. N ONE OF THE PARTNERS STATEMENT DIFFERED ANYWAY ON THIS ASPECT. THE SALE DEEDS WERE PRODUCED BEFORE THE AO IN WHICH THE BUYER WAS CHARGED RS.400 /- PER SQ. YARD FOR OUTER SIDE PLOT AND NAMES ADDRESSES ETC. AVAILABLE WHO COULD HAVE CALLED THEM AND CONFIRMED THE AMOUNT WHETHER APPELLANT CHA RGED ANYTHING EXTRA OTHER THAN WHAT WAS ACCOUNTED FOR. THE AO COULD NOT FIND ANY DISCREPANCY OR FAULT IN SUCH DOCUMENT AND HE ULTIMA TELY ACCEPTED THE RATE DISCLOSED FOR SUCH PARTIES. THE LD. AR FURTHER RELI ED ON VARIOUS JUDGMENT IN SUPPORT OF HIS CONTENTIONS THAT NO ADDITION COUL D BE SUSTAINED MERELY ON THE BASIS OF LOOSE PAPERS. THE LD. AR OF THE ASS ESSEE FURTHER SUBMITTED THAT THE AO ALSO TRIED TO STRENGTHEN HIS FINDINGS R EGARDING ON MONEY BY OBSERVING IN HIS ORDER ON PAGE NO.9 AND 10 THAT THE RATE OF PLOT WAS RS.3 650/- PER SQ. YARD AS PER DOCUMENT AT PAGE NO. 69 OF ANNEXURE B-11 ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 14 AND IN ADDITION TO SUCH SALE CONSIDERATION THE ASSE SSEE WAS ALSO COLLECTING DEVELOPMENT CHARGES OF RS.20 000/- PER PLOT. IT WAS STATED BY THE AO THAT THE SALE CONSIDERATION RECEIVED IN RESPECT OF 664 S Q. YARDS OF LAND AT THE RATE OF RS.3 650/- PER SQ.YARD WOULD WORK OUT TO RS .24 23 600/- AND THE DEVELOPMENT CHARGES FOR SIX PLOTS WOULD BE RS.1 20 000/- WHICH WOULD ADD UP TO RS.25 43 600/- OUT OF WHICH THE AMOUNTS S PENT FOR DEVELOPMENT UPTO THE DATE OF SURVEY AS PER CASH BOOK WAS RS.8 3 21/- AND AS SUCH UNACCOUNTED PROFIT ON SALE OF SIX PLOTS AVAILABLE F OR SETTLEMENT AMONGST 14 PARTNERS WOULD BE RS.17 29 279/-. THE AO FURTHER OBSERVED THAT AS PER THE PARTNERSHIP DEED ONE OF THE PARTNER SHRI JHAVER BHAI WAS HAVING 6.67% SHARE AND HIS SON SHRI PRAKASHBHAI 6.66% SHARE AND THE TWO TOGETHER HELD 13.33% SHARE. THE PROPORTIONATE SHARE ON THIS PROFI T WOULD WORK OUT TO RS.2 30 000/- AND ON VERIFICATION OF PAGE NO.26 OF ANNEXURE B-11 IT WAS FOUND THAT SHRI JHAVERBHAI HAD WITHDRAWN A TOTAL OF RS.2 30 000/- ON VARIOUS DATES I.E. RS.1 LAKH ON 22/4/2002 RS.50 00 0/- ON 1/5/2002 AND RS.80 000/- ON 8/5/2002 WHICH PROVED THAT THE ASSES SEE HAD SOLD THESE SIX PLOTS BY CHARGING ON MONEY OF RS.3 325/- PER SQ.Y ARD. THE LD. AR OF THE ASSESSEE ALSO SUBMITTED THAT THE OBSERVATIONS OF TH E AO WERE NOT BASED ON THE FACTS. THE AO REFERRED TO PAGE NO.56 OF ANNEXUR E B-5 WHEREIN THERE WAS AN ALLEGED WITHDRAWAL OF RS.2 30 000/- ON 3 DIF FERENT DATES BUT ON THE SAME PAGE AGAINST THE NAME OF SHRI JHAVERBHAI 4 3.25 WAS ALSO MENTIONED WHICH IN FACT WAS HIS COLLECTIVE SHARE IN THE PARTNERSHIP SINCE HE WAS REPRESENTING ELEVEN OTHER PARTNERS ALSO AND THAT THE AO DID NOT REFER TO A MATERIAL NOTHING ON PAGE 58 OF THE SAME ANNEXURE WHEREIN AGAINST A TOTAL OF RS.5 25 660/- FOUR NAMES WERE ME NTIONED I.E. THAT OF JHAVERBHAI -230000 -43.75; K.D -147830 -28.12 P.G -111241 -21.16 AND G.C. -36589 -5.95. IT WAS SUBMITTED THAT THE AOS O BSERVATION THAT THIS WAS THE AMOUNT OF PROFIT AVAILABLE FROM CHARGING OF ON MONEY WAS WITHOUT ANY BASIS AND IN FACT WAS THE INVESTMENT BY THESE PARTNERS FOR ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 15 DEVELOPMENT WORK IN THE LAND. IT WAS ALSO SUBMITTED THAT FOUR PLOTS WERE SOLD ON 31/5/2002 AND TWO PLOTS WERE SOLD ON 12/8/2 002 WHEREAS AS PER THE AO THE ON MONEY WAS RECEIVED AND WITHDRAWN BY THE PARTNERS ON 22/4/2002. THE SO CALLED UNACCOUNTED PROFITS COULD NOT HAVE BEEN SHARED IN ADVANCE OR WITHDRAWN IN ADVANCE. THEREFORE THE AO WAS NOT CORRECT IN MAKING THE ADDITION. THE LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND DELETED THE IMPUGNED ADDITION. HIS ORDER MAY KI NDLY BE UPHELD. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL ON RECORD WE ARE OF THE VIEW THAT THERE IS NO INFI RMITY IN THE ORDER OF LD. CIT(A). THE AO HAS BASED HIS CONCLUSION ON THE NOTI NGS OF THE IMPOUNDED MATERIAL AND THE UNRECORDED EVIDENCE OF W HAT TRANSPIRED BETWEEN THE PARTNER OF THE FIRM SHRI NILESH PATEL A ND THE SURVEY PARTY PRIOR TO START OF THE ACTUAL SURVEY OPERATIONS. AS FAR AS AOS CONTENTION THAT ASSESSEE HAS SOLD 65 PLOTS DURING THE YEAR UND ER CONSIDERATION WE FIND THAT THE LD. CIT(A) IN HIS ORDER HAS OBSERVED THAT PERUSAL OF THE ASSESSMENT ORDER SHOWED THAT THE ASSESSEE FILED CON VEYANCE DEEDS IN RESPECT OF 16 PLOTS CLAIMED TO HAVE BEEN SOLD BY IT DURING THE YEAR. HE FURTHER OBSERVED THAT THE AO EITHER DID NOT ASK FOR OR DECLINED TO ENTERTAIN THE CONVEYANCE DEEDS IN RESPECT OF OTHER PLOTS WHIC H THE ASSESSEE CLAIMED TO HAVE SOLD DURING THE SUBSEQUENT YEARS. IT APPEAR ED THAT THESE DOCUMENTS WERE NOT TAKEN ON RECORD SIMPLY TO STRENG THEN THE AOS VIEW FOR MAKING THE SAID ADDITION. THE SAID DOCUMENTS WE RE FILED BEFORE HIM AND ALTHOUGH THE SAME WERE NOT ADDITIONAL EVIDENCE THE AO WAS CONFRONTED WITH THIS AND REQUESTED TO EXPLAIN AS TO WHY THESE DOCUMENTS WERE NOT EXAMINED BY HIM WHICH WOULD SUBSTANTIATE T HE ASSESSEES CLAIM THAT ONLY 16 PLOTS WERE SOLD DURING THE YEAR UNDER APPEAL. NO COMMENTS WERE OFFERED BY THE AO ON THIS ASPECT. AFTER GOING THROUGH THE ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 16 CONVEYANCE DEEDS IN RESPECT OF 65 PLOTS MENTIONED B Y THE AO TO HAVE BEEN SOLD BY THE ASSESSEE DURING THE YEAR HE FOUND THAT THE ASSESSEES CONTENTION IS CORRECT. IT WAS SEEN THAT PLOTS AT SL . NOS.2 5 6 7 8 10 25 26 27 28 29 38 39 45 46 47 48 50 51 52 53 54 59 63 66 67 68 69 70 73 7 4 75 78 79 84 WERE ALL SOLD DURING THE FINANCIAL YE AR 2003-04 AND REST OF THE PLOTS WERE SOLD DURING FINANCIAL YEARS 2004-05 AND 2005-06 ONLY. SINCE THERE WAS DOCUMENTARY EVIDENCE IN THE FORM OF CONVEYANCE DEEDS IN RESPECT OF THE CONTENTIONS OF THE ASSESSEE HE W AS OF THE CONSIDERED VIEW THAT THE ASSESSEES CLAIM OF HAVING SOLD ONLY 16 PLOTS DURING THE YEAR WAS IN ORDER AND NO ADVERSE INFERENCE COULD BE DRAWN ON THIS GROUND AND THE CLAIM OF THE ASSESSEE WAS ACCEPTED. SINCE T HIS FINDING OF THE LD. CIT(A) REMAINED UNCONTROVERTED AT THE TIME OF HEARI NG BEFORE US WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN R ESPECT OF THIS ISSUE. NOW COMING TO THE CONTENTION OF THE AO THAT ASSESSEE RE CEIVED ON MONEY ON SALES OF PLOTS WE FIND THAT NOWHERE IN THE STATEMEN TS IT HAS BEEN ADMITTED BY ANY OF THE PARTNERS THAT ON MONEY WAS BEING CH ARGED ON SALE OF THE PLOTS. NO CASH OR ANY OTHER INCRIMINATING MATERIAL TO PROVE THE CHARGING OF ON MONEY WAS FOUND DURING THE COURSE OF SURVEY OPERATION. THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT AOS CONCLUSION BA SED ON THE NOTINGS ON THESE PAPERS IS NOT SUSTAINABLE SINCE THE ASSESS EES EXPLANATION IS ALSO CONVINCING AND CANNOT BE REJECTED OUT RIGHT SPECIAL LY IN THE LIGHT OF THE FACT THAT THERE WAS NO DISCLOSURE MADE BY THE ASSES SEE NOR WAS ANY CASH FOUND AT THE TIME OF SURVEY AND NO ADVERSE INFERENC E CAN BE DRAWN FROM NOTINGS ON LOOSE PAPERS OR DIARIES UNLESS CORROBORA TIVE EVIDENCE IS ALSO AVAILABLE. IN THE PRESENT CASE THE REGISTRATION OF SALE DEED HAS BEEN DONE AT THE RATE OF RS.400 PER SQ. YD. WHICH WAS THE RAT E FIXED BY THE GOVT. AO HAS NOT BROUGHT ANY OTHER CASE ON RECORD WHERE SIMI LAR PLOTS IN ANY OTHER OR SAME LOCALITY WERE SOLD AT THE RATES CALCULATED BY THE AO IN THE INSTANT CASE. THE AO DID NOT RECORD THE STATEMENT OF ANY OF THE BUYERS OF THE ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 17 PLOTS WHICH COULD HAVE ESTABLISHED HIS CASE THAT O N MONEY WAS PAID FOR PURCHASE OF SUCH PLOTS. ENTRIES ON PAGE NO.56 AND 5 8 OF THE ANNEXURE B- 11 COULD NOT POSSIBLY BE IN RESPECT OF WITHDRAWAL OF MONEY OR ALLOCATION OF ALLEGED ON MONEY RECEIVED SINCE NO PRUDENT BUY ER WOULD PAY SUCH ON MONEY THREE MONTHS IN ADVANCE TO UNKNOWN AND U NRELATED PROPERTY DEALER. THE AO HAS RELIED UPON THE NOTING ON THE PA MPHLET IN SUPPORT OF HIS VIEW THAT THE PLOTS WERE SOLD AT THE RATE OF RS .3 650/-. THE AO HAS RELIED ON NOTINGS OF PAGE 69 OF ANNEXURE B-11 WHICH IS AN UNSIGNED PAPER. THE UNSIGNED DOCUMENTS HAVE NO EVIDENTIARY V ALUE SPECIALLY IN VIEW OF THE FACT THAT NO CORROBORATIVE EVIDENCE LIK E CASH FOUND OR ANY OTHER PAPER ACKNOWLEDGING THE RECEIPT OF ANY ON MON EY OR ANY INCRIMINATING EVIDENCE/DOCUMENT WAS FOUND DURING TH E COURSE OF SURVEY OPERATIONS. AOS ACTION IN RELYING UPON UNRELATED D OCUMENTS IS NOT IN ORDER. THEREFORE IN OUR CONSIDERED VIEW THE LD. CI T(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION I.E. RECEIPT OF ON MON EY AND EXCESS SALE OF PLOTS. NO INTERFERENCE IS CALLED FOR. WE UPHOLD THE SAME. THE FIRST AND SECOND GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 12. THE NEXT GROUND RELATES TO RESTRICTION OF DISAL LOWANCE OF RS.6 51 470/- OUT OF TOTAL ADDITION OF RS.14 65 772 /-. DURING THE ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT AS PER PAGE NO.1 TO 61 OF THE DOCUMENTS IMPOUNDED AS PER ANNEXURE B-11 THE A SSESSEE HAD INCURRED VARIOUS EXPENDITURES OF RS.14 65 772/-. WH EN REQUIRED TO EXPLAIN THE ASSESSEE SUBMITTED THAT THESE WERE ONLY ESTIMATION OF PLOT DEVELOPMENT EXPENSES AND WERE NOT ACTUALLY SPENT. T HE AO DID NOT ACCEPT THE SAID EXPLANATION ON THE GROUND THAT ONE OF THE PARTNERS OF THE FIRM SHRI DINESH PATEL HAD IN HIS STATEMENT ACCEPTE D THAT HE HAD SPENT AN AMOUNT OF RS. 5 LAKHS AND RS. 2 LAKHS FOR DEVELOPME NTAL EXPENSES AND CONSTRUCTION OF OFFICE COMPOUND WALL ETC. ON THE BA SIS OF SUCH ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 18 INFORMATION RECEIVED AND ADMISSION OF THE ASSESSEE THE AO CONCLUDED THAT THE EXPENDITURE RECORDED IN THE IMPOUNDED MATE RIAL WAS OUT OF UNEXPLAINED SOURCES AND MADE AN ADDITION OF RS.14 6 5 772/-. ON THIS ACCOUNT. 13. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT THE SAI D NOTINGS WERE ONLY ESTIMATED FIGURES WRITTEN IN THE DIARY AND WERE IN RESPECT OF PLOT DEVELOPMENT CHARGES BEING A PART OF THE PLANNING OF THE BUSINESS. THE ACTUAL EXPENDITURE TILL THE DATE OF SURVEY WAS SHOW N UNDER THE HEAD WORK IN PROGRESS WHERE A SUM OF RS.8 14 302/- FOR VARIO US DEVELOPMENT EXPENSES WERE SHOWN AND THE SAME WAS FUNDED BY THE PARTNERS. THEREFORE THERE WAS NO JUSTIFICATION IN MAKING ADD ITION ON THE BASIS OF FIGURES NOTED IN DIARY AND THE AO HAD NOT BROUGHT A NY EVIDENCE ON RECORD TO SHOW THAT THE AMOUNT WRITTEN IN THE DIARY WAS AC TUALLY INCURRED. THE LD. CIT(A) AFTER CONSIDERING THE CONTENTIONS OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE RESTRICTED THE ADDITION TO RS.6 51 470/- OUT OF RS.14 65 772/- MADE BY AO WITH THE FOLLOWING OBSERV ATIONS :- I HAVE CONSIDERED THE SUBMISSIONS AND HAVE GONE TH ROUGH THE COPIES OF THE IMPOUNDED MATERIAL. I AM IN AGREEMENT WITH THE AO THAT THIS EXPENDITURE RECORDED ON VARIOUS PAGES OF THE DIARY FROM PAGE NO.1 TO 61 OF ANNEXURE B-9 HAS ACTUALLY BEEN INCURRED BY THE A PPELLANT. I DO NOT AGREE WITH THE APPELLANT THAT THESE ARE MERE NOTING S WHICH HAS NO RELEVANCE TO THE ACTUAL EXPENDITURE INCURRED. HOWEV ER IT IS ALSO SEEN THAT THE APPELLANT HAS SHOWN A SUM OF RS.8 14 302/- AS WORK IN PROGRESS IN HIS ACCOUNT AS ON THE DATE OF SURVEY IN VIEW OF WH ICH EXPENDITURE TO THIS EXTENT CANNOT BE TREATED AS UNEXPLAINED. HOWEVER T HE BALANCE AMOUNT OF RS.6 51 470/- HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT AND THEREFORE I AM OF THE CONSIDERED VIEW THAT THIS EX PENDITURE HAS BEEN INCURRED BY THE APPELLANT FROM OUT OF UNDISCLOSED S OURCES. ADDITION ON THIS ACCOUNT IS THEREFORE DIRECTED TO BE RESTRICT ED TO RS.6 51 470/- ONLY. IT IS ALSO AN IMPORTANT FACT THAT THE APPELLANT HAS CO NTRADICTED HIS OWN STAND THAT THESE NOTINGS WERE NOT ACTUAL EXPENDITURE BUT ONLY ESTIMATES BY SUBSEQUENTLY ADMITTING THAT A SUM OF RS.8 14 302/- OUT OF THE TOTAL NOTING ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 19 OF EXPENDITURE IN THE IMPOUNDED MATERIAL WAS ACTUAL LY INCURRED BY HIM AND RECORDED AS WORK IN PROGRESS. AGAINST THIS OBSERVATION OF THE LD. CIT(A) THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 14. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO AND SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE AO OBSER VED THAT AS PER PAGE NO.1 TO 61 OF THE DOCUMENTS IMPOUNDED AS PER ANNEXU RE B-11 THE ASSESSEE HAD INCURRED VARIOUS EXPENDITURES OF RS.14 65 772/-. WHEN REQUIRED TO EXPLAIN THE ASSESSEE SUBMITTED THAT THE SE WERE ONLY ESTIMATION OF PLOT DEVELOPMENT EXPENSES AND WERE NOT ACTUALLY SPENT. THE AO DID NOT ACCEPT THE SAID EXPLANATION ON THE GROUND THAT ONE OF THE PARTNERS OF THE FIRM SHRI DINESH PATEL HAD IN HIS STATEMENT ACC EPTED THAT HE HAD SPENT AN AMOUNT OF RS. 5 LAKHS AND RS. 2 LAKHS FOR DEVELO PMENTAL EXPENSES AND CONSTRUCTION OF OFFICE COMPOUND WALL ETC. ON THE BA SIS OF SUCH INFORMATION RECEIVED AND ADMISSION OF THE ASSESSEE THE AO CONCLUDED THAT THE EXPENDITURE RECORDED IN THE IMPOUNDED MATE RIAL WAS OUT OF UNEXPLAINED SOURCES AND MADE AN ADDITION OF RS.14 6 5 772/-. ON THIS ACCOUNT. THE AO HAS RIGHTLY MADE THE ADDITION AND T HE LD. CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION TO RS. 6 51 470/-. HIS ORDER MAY KINDLY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 15. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE RELYING ON THE ORDER OF LD. CIT(A) SUBMITTED THAT THE APPELLANT HA S SHOWN A SUM OF RS.8 14 302/- AS WORK IN PROGRESS IN HIS ACCOUNT AS ON THE DATE OF SURVEY IN VIEW OF WHICH EXPENDITURE TO THIS EXTENT CANNOT BE TREATED AS UNEXPLAINED. HOWEVER THE BALANCE AMOUNT OF RS.6 51 470/- HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT AND THEREFORE TH E LD. CIT(A) ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 20 CONSIDERING THAT THIS EXPENDITURE HAS BEEN INCURRED BY THE APPELLANT FROM OUT OF UNDISCLOSED SOURCES RESTRICTED THE ADDITION ON THIS ACCOUNT IS RS.6 51 470/- ONLY. THERE IS NO INFIRMITY IN THE OR DER OF LD. CIT(A). THIS MAY KINDLY BE UPHELD. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. WE FIND THAT EXPENDITURE OF RS.8 14 302/ - HAS BEEN INCURRED BY THE ASSESSEE AS RECORDED ON VARIOUS PAGES OF THE DI ARY FROM PAGE NO.1 TO 61 OF ANNEXURE-B-9. THIS SUM OF RS.8 14 302/- HAS A LSO BEEN SHOWN AS WORK IN PROGRESS ON THE DATE OF SURVEY. THIS CAN NOT BE TREATED AS UNEXPLAINED. HOWEVER THE BALANCE AMOUNT OF RS.6 51 470/- HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT OF ASSESSEE. ACCOR DINGLY THE LD. CIT(A) HAS TREATED THIS EXPENDITURE AS INCURRED BY ASSESSE E FROM OUT OF UNDISCLOSED SOURCES AND HE DIRECTED TO RESTRICT THE ADDITION TO RS.6 51 470/- OUT OF RS.14 65 772/-. HE WAS JUSTIFI ED IN RESTRICTING THIS ADDITION TO RS.6 51 470/-. WE CONFIRM THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DISMISS THE GROUND RAISED BY THE REVENUE. 17. THE CROSS OBJECTION OF THE ASSESSEE IS IN SUPPO RT OF THE ORDER OF LD. CIT(A). SINCE WE HAVE UPHELD THE ORDER OF LD. CIT(A ) ON THE RELATED GROUNDS RAISED BY THE REVENUE THE C.O. HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. ITA NO.1885/AHD/2006 ALONG WITH CO 239/AHD/2006 ASST. YEAR 2003-04 21 18. IN THE RESULT THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/9 /2011 SD/- SD/- (A. K. GARODIA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED :23/9/2011 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD 1.DATE OF DICTATION 15/09/2011. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 20/9/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..