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Per George George K. J.M.

1. This appeal of the Revenue as well as the Cross Objection of the assessee is directed against the order of the CIT (A)-VI, Bangalore, dated 30.7.2012. The relevant assessment year is 2008-09.

ITA No.1366 of 2012 Messers Ashed Valmark Bangalore

2. The Revenue has, in its Memorandum of Appeal, raised a solitary issue, namely, 'that the CIT (A) had erred in deleting an addition of Rs.3,39,22,177/- made by the Assessing Officer.'

Briefly stated, the facts of the issue are as below:

The Assessee is a AOP. It has two members namely M/s Ashad Properties and Investments Pvt Ltd (APIPL) and Valmark Builders. Consequent on a search conducted u/s 132 of the Act in the premises of Zeenath Transport Company, Bellary, M/s. Ashad Properties and Investments Pvt. Ltd, a member of the assessee was surveyed u/s 133 A on 25-02-2009. Based on survey on the member of the assessee, assessment of the assessee was reopened by issuance of notice u./s 148 of the Act. In compliance to the issuance of a notice u/s 148 of the Act, the assessee furnished a return of income, admitting a total income of Re. NIL. During the course of assessment proceedings u/s ITA No.1366 of 2012 Messers Ashed Valmark Bangalore 147 of the Act, the assessee was required to explain the difference between the market value of Rs.6,79,18,477/- and the actual cost of Rs.3,39,96,600/- (recorded in sale deed) made to Shri B.G.Chennappa and Sri Jagadeeshchandra Ankalagi and as to why the same should not be added as its income for the relevant AY under consideration, by holding that the difference was an 'on money payment'. After taking into account the assessee's submissions as recorded in the assessment order, the AO had, however, added a sum of Rs.3.39 crores to the taxable income of the assessee for the following reasons:

7.1. On the other hand, the learned AR submitted that as the Revenue has failed to put-forth any documentary evidence to find fault with the findings of the CIT (A), the stand of the CIT (A) in deleting the impugned addition deserves to be upheld.

ITA No.1366 of 2012 Messers Ashed Valmark Bangalore

8. We have carefully examined the rival submissions, perused the relevant materials on record and also the exhaustive reasoning of the CIT (A) in deleting the addition made by the AO in the assessee's hand. As already mentioned, it was a fact that there was a proceeding u/s 133A of the Act on the premises of Ashad Group of companies. Ashed Valmark, the assessee is an Association of Persons with two members, sharing profits equally

- Ashed Properties and Investments (P) Limited and Valmark Builders (Valmark). Though the assessee had shared an office space with Ashed Properties and Investments (P) Ltd [APIPL], there was no survey conducted in the assessee's premises. However, during the course of reassessment proceedings u/s 147 of the Act in the assessee's case, based on the survey conducted in the premises of APIPL, a member of AOP and certain documents were impounded during the said operation, the assessee' was required to explain the difference of Rs.3.39 crores between the market value of Rs.6.79 crores and the actual cost of Rs.3.39 crores mentioned in the books of the assessee in respect of the properties purchased from Shri Chennappa and Shri Jagadish Chandra Ankalagi. After due consideration of the assessee's contentions, the AO had, however, treated the difference in cost of the properties purchased as taxable income of the assessee.