Income Tax Appellate Tribunal - Pune
Sh. Pravinchandra Walchand Shah, ... vs Department Of Income Tax on 26 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member,
and Shri G.S.Pannu, Accountant Member.
ITA.No.1192/PN/2010
(Asstt. Year : 2008-09)
Income Tax Officer(Central)-1,
Nashik. .. Appellant
Vs.
Shri Pravinchandra Walchand Shah .. Respondent
Suman Co-op Housing Society,
Sharanpur Road,
Canada Corner,
Nashik.
Appellant by : Sri Prayag Jha
Respondent by : Sri V.L.Jain
Date of Hearing : 26.06.2012
Date of Pronouncement : 26.06.2012
ORDER
PER SHAILENDRA KUMAR YADAV, JM:
This appeal has been filed by the revenue against deletion of addition of Rs.1 crore made by the A.O. on account of unexplained cash receipt of assessee. Brief facts of the case are that the assessee is an individual engaged in business of land developer. A search and seizure action was conducted on Jadhav Shah Group of cases on 07.02.2008. The assessee has filed return of income on 22.10.2009 declaring income of Rs.44,42,010/-. The A.O. has assessed the income of the assessee at Rs.1,44,42,010/- by making an addition of Rs.1 crore on account of alleged unrecorded receipt.
22. Being aggrieved, the assessee carried the matter before the First Appellate Authority who has granted relief to the assessee. Same has been opposed before us on behalf of the revenue. The stand of the revenue is that the CIT(A) erred in deleting the addition of Rs.1 crore made by the A.O. on account of unexplained cash receipt of assessee. The CIT(A) erred in not appreciating the fact that there are two separate stamp papers mentioning the receipt of Rs.50 lakhs each by the assessee which invariably denotes cash receipts as neither there are any details of cheque number, etc., available therein nor assessee has been able to produce necessary and satisfactory evidence during the assessment proceedings. The CIT(A) also erred in coming to the conclusion that the above amount being advance receipt cannot be taxed. Accordingly, the order of the A.O. should be restored.
3. On the other hand, the Ld. AR submitted that the A.O. was not justified in making addition on the basis of pencil noting on blank stamp papers seized during the search. The A.O. was not able to make out the case that the addition in question based on pencil notings on the blank stamp papers are unrecorded transactions of the assessee.
4. After going through the above submissions and material on record, we find it undisputed that two blank stamp papers dated 31.12.2007 were found and seized in search and seizure action. The said papers had pencil notings that amount of Rs.50 lakhs is received from Mumbai as advance in respect of Adgaon land. It is also undisputed fact that amount was received from Mumbai as advance against Adgaon land. There is no mention on the stamp papers whether amount was received from Mumbai in cash or cheque. The assessee has claimed that land referred to in the notings on blank stamp papers represents amount received by cheque and same is recorded in the regular books of accounts maintained by the assessee. However, the A.O. has observed that amount noted on said blank stamp papers represents unaccounted cash receipts of payment towards advance against sale of land at Adgaon. Normally when payments are made out of books, the agreement of receipt in respect of the said unrecorded payments in cash are prepared by the parties to cash transaction immediately on the date of payment and receipt/agreement is kept as a proof for cash payment. It is not normal practice that party to transaction purchase stamp papers for recording unrecorded cash transaction and shall keep blank stamp papers with alleged receipt of cash. It cannot be inferred on the basis of the said notings on blank stamp papers that the assessee has received advance payment in cash in respect of land at Adgaon in addition to agreed consideration. The stand of the assessee has been that market value of the land as per Sub Registrar Office for stamp duty purpose is much lower compared to actual value for which sale was agreed. The alleged unrecorded cash receipt of Rs.1 crore was allegedly received on 31.12.2007 and action u/s.132 of the Act was conducted by the Department on 07.02.2008, i.e., within 38 days from the date of alleged unrecorded receipt of Rs.1 crore. No unexplained cash or investment of Rs.1 crore was found during the period 31.12.2007 to 07.02.2008 in search and seizure action u/s.132 of the Act. There is nothing on record to suggest that the assessee has received unrecorded cash of Rs.1 crore as advance of proposed sale of Adgaon land. The advance receipt cannot be taxed as income and addition of such amount has to be made in the hands of the payer on unrecorded advances. In this case sale transaction was yet to be completed at relevant point of time.
4In view of the above, the CIT(A) was justified in deleting the addition of Rs.1 crore made by the A.O. on account of alleged unrecorded cash receipt. The same is upheld.
5. As a result, the appeal of the revenue is dismissed.
Pronounced in the open court on this the 26th day of June 2012.
Sd/- Sd/-
( G.S.PANNU ) ( SHAILENDRA KUMAR YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
gsps
Pune, dated the 26th June, 2012.
Copy of the order is forwarded to:
1. The Assessee
2. The ITO(Central)-1, Nashik.
3. The CIT(A)-I, Nashik.
4. The CIT concerned.
5. The DR "B" Bench, Pune.
6. Guard File.
//TRUE COPY//
By Order
Sr. Private Secretary,
Income Tax Appellate Tribunal,
Pune.