AMIT DATTATRAY GHULE,PUNE vs. ACIT, CENTRAL CIRCLE 2(2), PUNE

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ITA 1389/PUN/2024Status: DisposedITAT Pune19 August 2026AY 2020-2111 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee's retraction letter lacked evidentiary value as it was unsigned. The addition of Rs. 3,10,46,726/- was confirmed based on incriminating documents and the assessee's signed statement. The addition under Section 43CA was allowed for statistical purposes, directing the AO to verify the 10% margin.

What were the facts?

During a survey, incriminating documents were found, leading the assessee to offer additional income. However, the assessee later filed a return without offering this income. The Assessing Officer made additions based on the survey findings and the assessee's initial admission.

What were the issues?

Whether the addition made on account of undisclosed income based on survey findings and assessee's statement is valid, and whether the addition under Section 43CA is justified considering the margin between agreement value and stamp duty value.

Which sections of the Income-tax Act were involved?

Section 133A,Section 43CA,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Parmeshwar Pareek

आदेश/ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), Pune-12, [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2020-21 on 22.04.2024, emanating from the Assessment Order u/s 143(3) of the Act, dated 30.09.2022.

2.

The assessee has raised the following grounds of appeal : “1. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals)- Pune-12 ("CIT(A)") erred in upholding the order of the Asstt. Commissioner of Income Tax, Central Circle-2(2), Pune ("AO") in making an addition of Rs.3,10,46,726/-, to total income on account of "undisclosed Income. 2. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals)- Pune-12 ("CIT(A)") erred in upholding the order of the Asstt.

ITA No.1389/PUN/2024

Commissioner of Income Tax, Central Circle-2(2), Pune ("AO") in not considering the retraction letter of Assessee due to submitted after the gap of 5 months during covid pendemic. 3. On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals)- Pune-12 ("CIT(A)") erred in upholding the order of the Asstt. Commissioner of Income Tax, Central Circle-2(2), Pune ("AO") in making an addition of Rs.25,45,709/-, to total income under section 43CA of the Income Tax Act. 4. That the appellant craves leave to add, alter, amend or forego any ground(s) of the appeal raised above at the time of hearing. 5. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity.”

Brief Facts :

3.

In this case, the assessee, Shri Amit Dattatray Ghule is an individual engaged in the business of construction of residential and commercial buildings. The assessee is also engaged in the business of sale and purchase of agricultural and non- agricultural plots/land. A survey action u/s 133A of the Act was carried out in the case of assessee on 24.02.2020. During the course of survey action, certain incriminating documents were found. Based on which the assessee offered additional income. However, the assessee filed return of income on 23.01.2021 for AY 2020-21 declaring total income at Rs.53,76,950/-. The assessee’s case was selected for scrutiny. Accordingly, various notices were issued as mentioned in the assessment order. The Assessing Officer (AO) in the assessment order observed that the assessee had not offered the income for taxation which the assessee had declared during survey based on incriminating documents. The AO after providing opportunity to the assessee made addition of Rs.3,10,46,726/-.

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Similarly, the AO made addition of Rs.25,45,709/- u/s 43CA of the Act. Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the grounds and upheld the assessment order. Aggrieved by the order of the Ld. CIT(A), the assessee filed an appeal before this Tribunal.

Submission of Ld. AR :

4.

During the proceedings, Mr. Parmeshwar Pareek, the Authorized Representative (AR) of the assessee filed paper book containing 96 pages includes written submission and grounds. The Ld. AR submitted that the assessee had filed Retraction Letter retracting the disclosure made by the assessee. The relevant part of the written submission filed by the Ld. AR are as under : “16. It is pertinent to note the if a person not familiar or having no knowledge of business customs, who modify the working excel sheet commits the mistake in following the prevailing market business customs. In the building construction business, the builder does not get the property register in the name of buyer until he receives cash portion as agreed because if he get register the property in the name of buyer without taking cash portion, in the event of refusal by the buyer to pay any cash portion as committed, then the builder have no legal remedy to recover the said cash portion. 17.There are some sheets, in impounded material (Page No. 26 to 14 of impounded papers and Page no 23-36. of Paper Book), working of individual shop details containing sales amount, payment received through banking channel and some cash entries. On page No. 26 for shop no. 1 the property registered in the name of buyer on 13-12- 2018, whereas cash received against that shop was shown as Rs. 300000 on 25-05-2019 and Rs. 500000 on 22-09-2019. The cash received after 9 months of registering the property in favour of Buyer. In the same sheet the total sales price was taken at Rs. 28,82,000/- and total funds received from buyer till the date of survey 24-02-2020 was Rs. 23,18,000/-. The balance amount of Rs. 5,64,000/- not received by the Assessee till the date of survey 24-02-2020 against the sales made on 13-12-2018. The same type of figure are there in excel sheets which shown that the excel statement is of no use. (Page

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No. 25 to 14 of impounded material and page no. 23-36 of paper book.)”

4.1 Regarding the addition made u/s 43CA, the relevant part of the written submission filed by the Ld. AR are as under : “5. That as per the provision of section 43 CA on account of the difference between the sales value of flats sold and the stamp duty Govt. Value/ Ready Recknor Value was less than 10%. The recknor Govt. value for stamp duty is Rs. 2,60,39,609/- and 10% come to Rs. 26,03,960/- Therefore, the addition was unjust and arbitrary. This 10% margin had been provided by the Finance Act, 2020 w.e.f., 01-4- 2021, and before that the margin was 5%. The instant case was related to A.Y. 2020-21 which is prior to the date when the amendment took place and such 10% margin was inserted. Reliance placed on following judgments of the various authorities: ITAT Pune bench in the case of M/s Sai Bhargavanath Infra V/s ACIT in Appeal No. ITA 1332/ PUN/2019 and reported at [2022] 197 ITD 496 (Pune). For claiming benefit of amended 10% margin reliance has been placed on "Relying upon the spirit of the Supreme Court decision in the case of Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249, the Tribunal held that if a fresh benefit is provided by the Parliament in an existing provision, then such an amendment should be given retrospective effect. The statute must spell out clearly if any tax liability has to be fastened with the Assessee tax-payer with retrospective effect. However, if the provision is beneficial for the Assessee such a beneficial provision can be applied in a retrospective manner." 6. The Ld. AO and Hon. Commissioner of Income Tax (Appeals) not gone through the full provisions of section 43 CA. They missed the proviso to section 43 CA (1) of the Income Tax Act, 1961 which provides the relief to the Assessee. 7. In the light of above stated facts and circumstances, we prayer the Hon'ble Bench of ITAT for justice and the addition be deleted.”

Submission of Ld. DR :

5.

The Ld. Departmental Representative (DR) relied on the order of the AO and the Ld. CIT(A). The Ld. DR took us through

ITA No.1389/PUN/2024 the incriminating documents found during the survey, copies of which have been filed by the Ld. AR at page Nos. 23 to 37 of the paper book. The Ld. DR submitted that the addition has not merely based on the statement recorded during the survey but the statement was recorded in the context of the incriminating material. Therefore, the addition is based on incriminating material and corroborative statement. The Ld. DR further submitted that the so called retraction filed by the assessee which is at page Nos. 71 to 75 of the paper book is unsigned and hence it has no evidentiary value. The Ld. DR requested to confirm the addition.

Findings and Analysis :

6.

We have heard both the parties and carefully studied the records available with us. Admittedly, the assessee is an individual and is engaged in the business of construction of residential and commercial buildings. There was a survey action u/s 133A of the Act on 24.02.2020 in the assessee’s premises. During the survey certain incriminating documents were found and impounded. The impounding order is at page No. 18 of the paper book. We have carefully studied incriminating documents, copies of which have been filed by the Ld. AR at Pages 23 to 37 of the paper book. Admittedly, these documents are print out, demonstrating sale of shop, showing cheque payments and cash payments. One such sample is scanned and reproduced here as under :

ITA No.1389/PUN/2024

7.

Thus, it can be observed that the said documents have been duly signed by the assessee, assessee’s Accountant Smt. Jyoti Nimbalkar.

8.

It is an admitted fact by the assessee that as per the instructions of assessee, the Accountant has entered the transactions in the computer. We have noted that each paper has got name of the purchaser and cheque Numbers demonstrating payments. Similarly, there are cash payments on the same page. It is an admitted fact by the Ld. AR and assessee that the cheque Numbers mentioned in these documents was duly received by the assessee from those purchasers. Once, part of the documents is accepted to be true by the assessee then the assessee cannot deny remaining part of the documents. On the same page there are dates

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demonstrating cash received by the assessee. The assessee had accepted that the assessee had received cheque payments then the assessee though denied receipt of cash payments mentioned on these papers, the inevitable conclusion is that since half part of the paper is correct it means other entries mentioned on the paper also has to be correct. In this context, we have referred to the statement of the assessee recorded during the survey, copy of the same has been filed by the assessee at page Nos. 19 to 22 of the paper book. The relevant Question and its Answer is reproduced here as under : “Q. No.19 I am showing you Loose Paper Bundle No.1, containing page no.01 to 27 which contains print out of excel sheet & copy of Index-ll found and impounded during the course of survey action on 24/02/2020 at Office No.103, Sai Krupa Buidling, Pune Solapur Road, Manjari Bk, Pune 412307. Kindly go through it, confirm the fact and explain the same. Ans.: Sir, I have gone through the Loose Paper Bundle No.1 which contains print out of excel-sheet which has been found and impounded during the course of survey action on 24/02/2020 at Office No. 103, Sai Krupa Buidling, Pune Solapur Road, Manjari Bk, Pune 412307. I confirm the same. Sir, the pages contain the working of cheque amount as well as cash amount received from customers against the sale of commercial shops at project "Sharada Complex". The pages include working of individual customers as well as summery sheet and total cash received as per the summery sheet and individual workings amounts to Rs.3,10,46,726/-. I admit and confirm that these are the cash receipts taken for sale of. land / flats / plots etc. The same has not been recorded in my regular books of account and I voluntarily offer the same as my additional income over and above my regular income / net profit shown in P&L account. I will pay all the taxes due on the same on or before 15th March, 2020. All expenses against such cash receipts were already booked in the regular books of accounts.”

9.

It is also observed that the said statement has been duly signed by the assessee. The said statement was recorded in the

ITA No.1389/PUN/2024 presence of the assessee’s Accountant Smt. Jyoti Nimbalkar and Tax Consultant Mr. Nitin Dhoke. Both these individuals have signed the declaration. Obviously, there is signature of Jt. CIT also. The declaration made by Smt. Jyoti Nimbalkar and Mr. Nitin Dhoke is scanned and reproduced as under :

10.

Thus, the Jt. CIT has duly confronted incriminating documents to the assessee and his Accountant. They admitted in the statement receipt of cash as mentioned in the documents. The statement was recorded in the presence of assessee’s Accountant and the assessee’s Tax Consultant. Therefore, the assessee’s pleading that the statement was under coercion is baseless as there was independent person like assessee’s Tax Consultant in whose presence the statement was recorded.

ITA No.1389/PUN/2024 Therefore, the assessee’s submission that the statement was recorded under coercion is incorrect. The assessee’s Accountant was present during the statement to advice the assessee regarding the entries. Thus, the assessee was well aware about what he was stating in the Answer during statement. Hence, we do not agree to the Ld. AR submission that the statements do not have any value.

11.

We have gone through the Retraction Letter, copy of which has been filed by the assessee at page Nos. 71 to 75 of the paper book. The said letter does not contain any signature of the assessee, Amit Dattatray Ghule. The relevant page is scanned and reproduced here as under :

12.

During the proceedings before us, we have brought this fact to the notice of the Ld. AR and requested Ld. AR to show copy of the said Retraction Letter which was in his file. It was accepted by the Ld. AR that the copy which was in Ld. AR’s file of the Retraction Letter also does not have any signature. We have verified this fact. Similarly, the copy which was available in Ld. DR’s file was also not having any signature. Thus, the so

ITA No.1389/PUN/2024 called Retraction Letter is unsigned and hence do not have any evidentiary value.

13.

In this case, the AO has made addition of Rs.3,10,46,726/- based on incriminating documents found during the survey, copy of which has been enclosed by the Ld. AR in the paper book. One such paper we have reproduced in earlier paragraphs. The entire addition is based on such loose papers which were found during survey. The assessee had accepted the fact of cash receipt that reference to these incriminating documents found during the survey. Thus, the addition made by the AO of Rs.3,10,46,726/- is based on incriminating documents supported by the statement of the assessee recorded in the presence of his Accountant and Tax Consultant. Assessee in his statement accepted receipt of cash as appearing in incriminating documents.

14.

The Ld. AR has not brought on record any documents to disprove the incriminating documents. The Ld. AR submitted that these were merely estimates is not acceptable as part of the documents contains details of cheque received for the particular shop it means the other part which contains cash receipts has to be true. The documents have to be read in totality. In these facts and circumstances of the case, we confirm the addition of Rs.3,10,46,726/-. The Ld. AR has relied on various case laws, however, those case laws are factually distinguishable. Accordingly, Ground Numbers 1 and 2 raised by the assessee are dismissed.

15.

Regarding the addition made u/s 43CA of the Act, the Ld. AR submitted that the difference between the Agreement value

ITA No.1389/PUN/2024

and value as per stamp authority is within the range of 10%. The Ld. AR has relied on the decision of ITAT in the case of Sai Bhargavanath Infra Vs. ACIT in ITA No. 1332/PUN/2019 for AY 2015-16, dated 17.08.2022. We agree with the proposition that if the difference is within the 10% margin then no addition can be made u/s 43CA of the Act. Accordingly, we direct the Assessing Officer to verify the difference between Agreement Value and stamp duty value for each unit and wherever the difference is within 10% no addition shall be made. Accordingly, this ground pertaining to addition made u/s 43CA of the Act is allowed for statistical purpose. Thus, Ground Number 3 is allowed for statistical purpose.

16.

Ground Numbers 4 and 5 are general in nature, hence, require no adjudication. Accordingly, dismissed.

17.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open Court on 19th August, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 19-08-2026 Ravi Kumar Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.08.21 17:55:51 +05'30' आदेशकीप्रतितितिअग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्डफ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकरअपीलीयअदिकरण, पुणे / ITAT, Pune

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