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Facts
A search action was conducted on the assessee, a real estate firm, which led to the discovery of documents suggesting the acceptance of 'on-money' in cash for booking/selling of flats/shops. The Assessing Officer made an addition based on these findings and extrapolated the amount for other sales. The assessee contended that no such on-money was accepted and the documents were merely draft booking forms.
Held
The Tribunal held that while some 'on-money' was accepted as evidenced by two booking forms for specific flats (A-102 and A-001) in AY 2019-20, the extrapolation of such income for other sales across all assessment years was not justified due to lack of corroborative evidence and failure to confront key persons or examine buyers. The addition for unexplained expenditure was upheld.
Key Issues
Whether extrapolation of 'on-money' receipts is justified without sufficient corroborative evidence, and whether additions for unexplained expenditure can be sustained based on seized documents.
Sections Cited
132, 153A, 143(2), 142(1), 131, 132(4A), 292C, 114, 69C, 69
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
The above three appeals filed by the assessee are directed against the common order dated 26.02.2024 of the Ld. CIT(A), Pune-12 relating to assessment years 2017-18 to 2019-20 respectively. Since identical grounds have been raised by the assessee in all these appeals, therefore, for the sake of convenience, these were heard together and are being disposed of by this common order.
Facts of the case, in brief, are that the assessee is a firm engaged in business of real estate. It filed its original return of income on 16.03.2018 declaring total income of Rs.58,20,920/-. A search action u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was conducted on 10.01.2019 in the case of the assessee. In response to the notice u/s 153A(a) of the Act issued on 07.10.2019, the assessee filed its return of income on 09.10.2019 declaring total income at Rs.58,20,920/- which was the income returned earlier. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed the requisite details from time to time as called for by the Assessing Officer.
During the course of assessment proceedings, the Assessing Officer noted that search action u/s 132 of the Act was conducted in the case of the assessee as a part of search action in Goel Ganga Group on 10.01.2019. During the course of search action various incriminating documents in the form of loose papers were found and seized from the office premises of the assessee. When these documents were correlated with entries found in other documents and registered deeds, it became evident that the assessee firm was involved in accepting on-money in cash for booking/selling of flats/shops. The Assessing Officer narrated the findings of the search action which is as under:
“3.1 Findings during search action: ….. The findings of the search are discussed below for sake of clearness, as under. (i)The modus of receiving on-money by the Goel Ganga Group is same in all the entities and concerns. The customers, who are interested in giving on money in cash are given two booking forms. One booking form for consideration in cheque, which is actual form and kept permanently in the file of the customer. The other booking form is filled for cash component and is temporarily kept in the file of the customer. Entire portion of cash is received prior to execution of sale deed. After sale deed is executed, the second booking form is removed from the file of the customer and destroyed. (ii)During the course of search action at the office of premises of Assessee at Ground floor, 5, San Mahu Complex, Bund Garden Road, Pune; various incriminating documents evidencing on-money received by the assessee on account of flat/shops sold were seized. During the course of search action, statement of Shri Shirish Bhanudas Ranpise was recorded where he along with sales team confirmed modus of operating and receiving on money in cash in booking of flats/shops. Shri Shirish Bhanudas Ranpise in reply to Q. No. 10 of his statement dated 10/01/2019 at the office of Assessee, San Mahu Complex, Bund Garden Road, Pune 411001 confirmed that after completion of documentation process, the other booking forms of cash component is removed from file and destroyed. The relevant portion of statement is produced as below: Q.
10. As you have explained the two booking forms could be found in few files only and majority of the files have not any such booking forms except only one form showing the agreement amount only and the other booking form showing the cash component over and above the agreement price could not be traced. Please produce all such booking forms in respect of all the tenaments of the project. Ans. As I have already told you that this is the process of documentation. However, from majority of files the other booking forms are missing which you have requested to produce. The other booking forms cannot be found in all files as the same are being destroyed from time to time after the process of completion of transactions and in some of files the same was left to be removed and therefore it was found.”
However, he noted that in response to the notice u/s 153A of the Act, the assessee has not offered the on-money in income tax return filed. He, therefore, asked the assessee to explain as to why the addition should not be made on account of on-money and also why it should not be extrapolated for the remaining flats / shops.
The assessee in response to such notice submitted that it has not accepted any on-money against the sale of its units in the said project. It was submitted that the documents on the basis of which it has been alleged that on-money is being accepted by the assessee are merely booking forms made by the sales representatives of the assessee at various times representing various negotiations entered into with the customers. Such draft booking forms cannot be equated with evidence of acceptance of on-money by the assessee. Further, no such document evidencing any such on-money was found. It was submitted that the booking forms which were purported to be represented the amounts taken by the assessee in cash also contain calculations of GST, stamp duty, etc. which do not fit within the contours of any logical act if the same would have been accepted in cash. It was also argued that no valuables or any cash was found during the course of search to establish that the assessee has received any on-money.
Without prejudice to the above, it was submitted that even if it is presumed that the assessee has received any on-money on sale of shops, the addition can be restricted only to those amounts for which the evidences have been found during the course of search.
However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. He narrated the e explanation regarding the details of cash component submitted by Shri Shirish Bhanudas Ranpise sales manager of the assessee on the basis of two booking forms found in the files of the customers during the course of search, which reads as under:
“Explanation of the details of cash component submitted by Shri Shirish Bhanudas Ranpise, Sales Manager, on the basis of two forms found in the files of the customers during the course of search action, as under:
(1)In sale of Shop No. D-08 of Ganga Florentina, the carpet area of the shop is 965 sq ft. as per page no. 2 of seized bundle no. 8 agreement amount mentioned here is Rs. 79,71,500/- at the rate of Rs. 8100/- per sq ft. Page No. 25 of seized bundle no. 8, here rate per sq ft mentioned is Rs. 13,650/- per sq ft so agreement value comes to Rs. 1,31,72,250/-. The difference of Rs. 52.00,750/- is the cash component. Agreement has not been executed. AO is required to verify details from agreement to sale as agreement has not been executed. (II)In sale of Shop No. D-10A of Ganga Florentina, the carpet area of the shop is 209.40 sq ft. as per page no. 1 of seized bundle no. 9 and agreement amount mentioned here is Rs. 38,65,500/-. On the same page, amount of Rs. 25,25,250/- is written which is cash component over and above of the agreement to sale value which has been taken in cash. (III)In sale of Shop No. D-A of Ganga Florentina, the saleable area of the shop is 598.65 sq ft. as per page no. 6 of seized bundle no. 5 and agreement amount mentioned here is Rs. 46,37,000/-. On page no. 4 of seized bundle no.5, amount of agreement is Rs. 46,37,000/- and in pencil, it is written as 5670/- which is cash component over and above of the agreement to sale value which has been taken in cash. The total amount comes to Rs. 33,94,345/-. (IV)In sale of Shop No. D-09 of Ganga Florentina, the saleable area of the shop is 475 sq ft. as per page no. 3 of seized bundle no. 6 and agreement amount mentioned here is Rs. 44,30,000/-. On a rough paper found in the file, it is written page no. 5A of seized bundle no. 6, on this basic cost written is Rs. 42,75,000/- which is cash component over and above of the agreement to sale value which has been taken in cash. (V)In sale of Flat No. A-102 of Ganga Florentina, as per page no. 03 of seized bundle no.7, the agreement cost has been mentioned here is Rs. 84,77,000/- and as per page no. 8 of the seized bundle no. 7, the agreement cost is written as Rs. 74,77,000/- only. As per page no. 61 of the seized bundle no. 7, it is the copy of index 2, the agreement cost here written is Rs. 74,77,000/- The difference of Rs. 10,00,000/- is the cash component which is over amount of Rs. 74,77,000/-.
(VI)In sale of Flat No. A-001 of Ganga Florentina, as per page no. 02 of seized bundle no.4, the agreement cost has been mentioned here is Rs. 1,06,89,725/- and as per page no. 6 of the seized bundle no. 4, the agreement cost is written as Rs. 98,89,725/- only. As per page no. 62 of the seized bundle no. 4, it is the copy of index 2, the agreement cost here written is Rs. 98,89,725/-, The difference of Rs. 08,00,000/- is the cash component which is over and above agreement to sale amount of Rs. 98,89,725/-.”
Rejecting the various explanations given by the assessee, the Assessing Officer calculated the on-money receipts as per seized material, the details of which are as under:
“5.2 The noting on the booking form (seized as page no. 8 of bundle no.01) clearly shows the calculation of the sale consideration by applying rate 11007 per sq.ft which was subdivided into Rs.6,400/-and Rs.4607/- for calculation of consideration for agreement to sale & charges applicable thereon and on-money against the shop, respectively. Accordingly, agreement value of had been worked out to Rs.61,91,131/-by taking into consideration of Rs.6400/- per Sq.ft and on- money component of the shop was worked out to Rs.39.62 lacs @ Rs.4607/- per Sq.ft. The noting on the page clearly shows the bifurcation per sq. ft rate into two parts- rate first is on which agreement of the property has been executed and second is calculation of cash component as on-money. Similarly noting could be seen from the other documents seized during the search. 5.3 Further, it is evident from the statement of Shirish Bhanudas Ranpise (Sales Manager in Shree Balaji reality) that he has not only admitted the receipt of on money by the Assessee Firm and other group firm namely M/s Meenamani Ganga Builders LLP but also has explained them in detail thereof. Further, these documents contained the details of areas of the shops, total consideration, accounted consideration and on-money receipts for the sale/booking of the shops. It may be mentioned that the rates per square feet (for recorded payments) as stated on the seized documents tallied with the rates mentioned in the sale deeds. 5.4 Therefore, the evidence found cannot be said as merely booking form but also an incriminating evidence which clearly proves that the Assessee has received on- money on sale of shops and flats in its project "Ganga Florentina". Further the Assessee has not produced any document which is contrary to the data fond in those forms. There is a legal presumption u/s. 114(e) of the evidence act that the proceeding or the finding in the order are deemed to be correct unless contrary is proved otherwise. The Assessee has never denied of the incriminating evidences found from his premises and the consideration worked out on it. His only contention is that those forms were only draft booking form. But once it is proved that the document was in possession of Assessee then, in terms of provisions of Section 132(4a) r.w.s. 292C of the income tax Act, a presumption arises that the contents of the impounded/seized documents are true. Thus, the presumption that the Assessee has received on-money cannot be denied. The presumptions u/s. 292C are that the document belongs to the persons from whose possession and control it was found. The second presumption is that the contents of such documents are true. The following case laws are relied in support of above proposition: (i) Surendra M. Khandhar [2009] 224 CTR 409 (Bombay): The Hon'ble Bombay High Court has held that "Where Xerox copy of document seized from Assessee was not denied the same showed advancement of certain sums to one 'C' and two signatories of said document were also not denied by Assessee and as the document was seized from Assessee's control, presumption under section 132(4A) and 292C was clearly applicable" (ii) CIT Vs. Naresh Kumar Aggarwala, [2011] 9 taxmann.com 249 (Delhi): The Hon'ble Delhi High Court has held that, there was a presumption raised under section 132(4A) on seizure of fax message and it was upon Assessee to rebut that presumption by offering a plausible explanation. 5.5 In view of discussion above, it is clear that Assessee has accepted the on- money and same is not disclosed in books of accounts. 5.6 Issue of year of taxation: From the books of accounts, it is seen that Assessee is following percentage completion method of accounting wherein Assessee offered sale of Rs 17,78,76,228/- for AY 2017-18. Also, Assessee has not given the date wise details of receipt of on-money. In such cases, as held by various judicial authorities, year in which registered deed is executed is considered as year of receipt of on-money. In view of above discussion, the year-wise on -money receipts as per seized material are as below: Sr No Name Flat/Shop on money Date of AY registry 1 1. Dinesh Adwani Shop D-08 52,00,750 08/01/2019 2019-20 2. Pramod Adwani 2 1. Rustam Ramani Shop D- 25,25,250 28/09/2018 2019-20 2. Salim K Ramani 10A 3 Sayyad S Parizade Shop D-A 34,94,354 01/08/2018 2019-20 4 Sagar I Goel Shop D-9 42,75,000 21/06/2018 2019-20 5 1. Anita Bokey Flat A-102 10,00,000 14/09/2018 2019-20 2. Nitin Bokey 6 1. Ravisu badal Flat 8,00,000 01/12/2018 2019-20 2. Deepmala Podium- Singh P01
Since no evidence of on-money received during the year was found, the Assessing Officer did not make any addition. Thereafter, the Assessing Officer proceeded to extrapolate the on-money received by the assessee by recording as under: “06. Issue of extrapolation of on-money: 6.1 The other contention of Assessee vide para 2.6 to 2.8 is that nothing unearthed to prove that the Assessee has been earning unaccounted income consistently and the income being alleged to be unaccounted is merely based on one interpretation of the documents found during the course of the search action. In this context, it is evident from the seized document as well as statement of sales manager that the Assessee has received on-money on sale of 4 shops and 2 flats. Since, evidences of on money taken by Assessee were found related to 4 shops and 2 flats (total 13 shops and 222 flats were sold by Assessee till 31/03/2019) were found which mean Assessee would have accepted the on-money in sale of other shops and flats also. The probability of acceptance of on-money on other shops and flats sold by Assessee cannot be ruled out, as it is not possible that Assessee would accept the on-money in one shop and can't accept in the neighbour shop. 6.2 Further, the modus operandi of acceptance of on-money is already discussed in earlier paras which is produced below for sake of convenience: “The customers, who are interested in giving on money in cash are given two booking forms. One booking form for consideration in cheque, which is actual form and kept permanently in the file of the customer. The other booking form is filled for cash component and is temporarily kept in the file of the customer. Entire portion of cash is received prior to execution of sale deed. After sale deed is executed, the second booking form is removed from the file of the customer and destroyed. During the course of search action, cash booking forms were seized with respect to few customers only and with respect to other customers, form have been destroyed by Assessee after accepting on-money. This clearly proves that Assessee has accepted on-money with respect to others shops/flats sold. In this context reliance is placed on the decision of Hon'ble ITAT Pune in the case of Golani Brothers (2000) 75 ITD 1 wherein the ITAT Pune has upheld the action of the AO in assuming that assessee must have also received the 'on money' in respect of the balance 67 shops sold during these years, when the material found and seized in search contained only a list of 201 shops in respect of which 'on money' was received by the Assessee. The Hon'ble Tribunal Pune Bench while deciding the issue has followed the decision of the Hon'ble President, of the Tribunal as Third Member in the case of Overseas Chinese Cuisine vs. Asstt. CIT (1996) 55 TTJ (Bom) 304 (TM): (1996) 56 ITD 67 (Bom)(TM) wherein it has been held that once a fact has been proved to be in existence, the presumption can be raised in respect of other transactions. This treatment by the ITAT Pune was also reaffirmed by the Bombay High Court in the case reported as (2017) 160 DTR (Bom) 24. In another judgement of the Bombay High Court in the case of Harish Textiles Engineers (2015) 128 DTR (Bom) 145, the estimation of 'on-money' on machines was also upheld for the period prior to the period for which evidence was found. 6.3Calculation of on-money: The evidences of on money are found with respect to following shops details of which are as below: Sr Name Flat/Shop on money Considera % of on- Date of No tion as per money registry registered with deed respect to registered deed 1 1. Dinesh Shop D-08 52,00,750 79,71,500 65 08/01/2019 Adwani 2. Pramod Adwani 2 1. Rustam Shop D-10A 25,25,250 38,65,500 65 28/09/2018 Ramani 2. Salim K Ramani 3 Sayyad S Shop D-A 34,94,354 46,37,000 75 01/08/2018 Parizade 4 Sagar I Goel Shop D-9 42,75,000 44,30,000 96 21/06/2018
From the above table, it can be seen that percentage on on-money accepted by Assessee with the consideration shown in registered deed varies from shop to shop. Therefore, to meet the end of justice and considering the facts of case, it is assumed that Assessee accepting 80% of on-money compare to consideration shown in registered deed. Considering the same, the on-money portion is determined as below: Sr No Shop no Consideration as per Date of registry % of on-money registered deed 1 7, 7A 54,00,000 31/03/2017 43,20,000 Therefore, for year under consideration, the addition of Rs.43,20,000/- is made in Assessee’s case on account of on-money not recorded in books of accounts.”
10. The Assessing Officer accordingly determined the total income at Rs.1,01,40,920/- by making addition of Rs.43,20,000/- on account of extrapolation of on-money received being 80% of the consideration as per the registered sale deed.
Before the Ld. CIT(A) it was submitted that no corroborative evidence relating to receipt of any on-money by the assessee was found during the course of search. It was submitted that the entire addition was merely based on interpretation of notings on the draft bookings and the statement of sales manager adopted by the Assessing Officer which was clearly denied by the partner of the assessee. It was submitted that making an addition by stating that certain percentage of agreement value would have been accepted by the assessee on each and every document executed is completely baseless. It was argued that the decision relied on by the Assessing Officer in the case of CIT vs. Golani Bros. and various other decisions are distinguishable and not applicable to the facts of the present case. It was also submitted that even with respect to the material found during the course of search, the entire on-money alleged to have been received by the assessee cannot be taxed. It was submitted that the addition, if any on the alleged on-money being accepted by the assessee should be restricted to the profit earned by the assessee on the alleged on-money found during the course of search.
However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee. He noted that during the course of search action statement of Shri Shirish Bhanudas Ranpise, Sales Manager was recorded u/s 131 of the Act. Shri Shirish Bhanudas Ranpise in his statement has accepted that the cash component was accepted in booking of flats. In reply to question No.08 of his statement, when page No.72 of his diary seized as Bundle No.01 dated 03.06.2017 was shown to him he explained the contents that shop of saleable area of 860 sq.ft. in Ganga Fernhill was sold on agreement value at Rs.6400/- sq. ft. and over and above this, Rs.39.62 lakh was received in cash @ Rs.4607 per sq. ft., so the effective rate of sale is Rs.11007/- per sq. ft. In the same way, Shri Shirish Bhanudas Ranpise showed and explained the file of customer Shri Ramesh Kumar Chhatraram Choudhary where the actual final negotiated price was Rs.10200/- per sq. ft. of sale area, 695 sq.ft. of Shop No.B-09 in project Ganga Fernhill, Undri, Pune. The agreement was executed at Rs.3700/- per sq.ft. and the balance amount of Rs.6500/- per sq. ft. was received in cash over and above agreement to sell. Further, he had explained that an amount of Rs.13.5 lakh have been received which was written in pencil and for balance payment, time has been granted. Booking form of Mr. Rameshkumar C. Chaudhary and relevant part of statement of Mr. Ranpise were reproduced by the Ld. CIT(A) in the body of the order. He also referred to the details of differences in booking and agreement values in cases where two booking forms were found. As explained by Shri Shirish Bhanudas Ranpise, Sales Manager, the Ld. CIT(A) also analyzed the details of two different forms found in the files of the customers during the course of search action in respect of Shop No.D-08, Shop No.D-10A, Shop No.D-A and Shop No.D-09. Similarly, he also analyzed the two booking forms in respect of flat No.A-102 and A-001 of Ganga Florentina. He accordingly held that the addition made by the Assessing Officer was on the basis of on-money received by the assessee which is not recorded in the books of account. So far as the issue of extrapolation is concerned, the Ld. CIT(A) also upheld the same. The relevant observations of Ld. CIT(A) read as under: “5.10 I have considered the facts of the case, assessment order, the submissions made by the appellant along with the judicial pronouncements relied upon by the appellant. During the course of search/survey proceedings, the search/survey team had collected the evidence and impounded the various incriminating documents as under. i) During the course of survey action, statements of Shri Shirish Bhanudas Ranpise, Sales Manager was recorded u/s 131 of the Income- tax Act, 1961 and agreed by the sales team. In his statement, Shri Shirish Bhanudas Ranpise accepted that cash component was accepted in booking of flats. In reply to Q. No. 08 of his statement, when page no 72 of his diary (seized as Bundle No. 01) dated 03/06/2017 was shown to him. He explained its contents that shop of saleable area of 860 sq. ft. in Ganga Fernhill was sold on agreement value at Rs. 6400/- per sq. ft. and over & above this, Rs. 39.62 lakh was received in cash @ Rs. 4607 per sq ft. So the effective rate of sale is Rs 11007/- per sq ft. Scanned copy of page No. 72 is reproduced below for ready reference.
Q-8, Now I am showing you the entries mode on the page doted 03/06/2017 of the Said diary. Yon are requested to explain the contents in detail.
Ans. The entries made on the said page dated 03/06/2017 was made in the hand writing of Shri Fiyush A.Jimchandarti who is also involved in negotiation of sales in respect of some of the shops of Ganga Fernhill and Ganga Flo renting. I have consulted with Mm and the contents is being explained accordingly. The working is in respect of one of the shop having salable area of 860 sq. ft. in Ganga Fernhill, the dealing of which was negotiated by Mr. Piyush Alamchandani. lie has confirmed that the rate # 6400 has been finalised for agreement and all the necessary taxes and Other liabilities are worked out accordingly. The amount of Rs. 39.62 lakh has been received by Shri Annuj Gael in cash over and above the agreement price Rs. 46L>7 per sq. ft. The actual rate is therefore worked out to Rs, 11007 per sq ft. which has been arrived after final negotiation. ii) In the same way, Shri Shirish Bhanudas Ranpise showed and explained the file of customer Shri Ramesh kumar Chhatraram Choudhary where the actual final negotiated price was Rs 10200/- per sq ft of sale area, 695 sq ft of Shop No B-09 in project Ganga Fernhill, Undri, Pune. The agreement was executed at Rs. 3700/- per sq ft and the balance amount of Rs. 6500/- per sq was received in cash over and above agreement to sale. Further, he explained that it is written in pencil that Rs. 13.5 lakh have been received and for balance payment, time has been granted. Booking form of Mr. Rameshkumar C. Choudhary and relevant part of statement of Mr. Ranpise are reproduced hereunder.
Q.9 it is observed that the price quoted in respect of shops at Ganga Fernhill is around Rs. 13500 per sq. ft. of salable area and in the above case the same was finalized around Rs. 11007 per sq. ft. of salable area.
However, the agreements were being executed on very low rate. Please make comments in details on the treatment given to difference amount of actual amount received and agreement value, along with the position of the other projects. Please also state in detail about the process of documentation and the documentation on record in respect of the final negotiated price on which the actual sale has taken place. Ans. I would like to submit that all the negotiations of the actual sale price and the price as per agreements is decided by the directors and the customers and being a head of sales and marketing 1 have to play my role accordingly blow I am showing you the file of Shri Rameshkumar Chhatraram Choudhary to explain the documentation record in respect of final sale consideration negotiated and executed. The actual final negotiated price is Rs 10200 per sq ft of salable area (696 sq. ft) out of which the agreement has been executed @ Rs. 3700 per sq ft and the balance amount @ Rs 6500 per sq ft of salable area is the cash component received over and above the agreement value. There are two booking forms in this file one is showing the rate @ Rs. 3700 on which the agreement has been executed and the other is showing the rate Rs. 6500 which is cash component over and above the agreement price. Further it is noted in the pencil that Rs. 13.5 lakh has been received and for the balance payment time has been given. This booking was made in October 2016. Similar is tire position in respect of other client files of the project Ganga Femhill and Ganga Florentina. The quoted price in respect of Ganga Florentina is around Rs 15000/- Q.
As you have explained the two booking forms could be found in few files only and majority of the files have not any such booking forms except only one form showing the agreement amount only and the other booking form showing the cash component over and above the agreement price could not be traced. Please produce all such booking forms in respect of all the tenaments of the project. Ans. As have already told you that this is the process of documentation. However, from majority of files the other booking forms are missing which you have requested to produce. The other booking forms cannot be found in all files as the same are being destroyed from time to time after the process of Sd/- Sd/- (Authorized Officer (Shirishk Bharuda's Ranpise)
iii) Shri Shirish Bhanudas Ranpise, Sales Manager submitted the details of differences in booking and agreement values in cases where two booking forms were found. This was submitted along with his statement. Copy of the said differences was tabulated and made part of the statement of Shri Ranpise. The same is produced hereunder for ready reference.
Explanation of the details of cash component submitted by Shri Shirish Bhanudas Ranpise, Sales Manager, on the basis of two forms found in the files of the customers during the course of search action is as under. (a) In sale of Shop No. D-08 of Ganga Florentina, the carpet area of the shop is 965 sq ft. as per page no. 2 of seized bundle no. 8 agreement amount mentioned here is Rs. 79,71,500/- at the rate of Rs. 8100/- per sq ft. Page No. 25 of seized bundle no. 8, here rate per sq ft mentioned is Rs. 13,650/- per sq ft so agreement value comes to Rs. 1,31,72,250/- The difference of Rs. 52,00,750/- is the cash component. Agreement has not been executed. AO is required to verify details from agreement to sale as agreement has not been executed. It is explained in detail at above para. (b) In sale of Shop No. D-10A of Ganga Florentina, the carpet area of the shop is 209.40 sq ft. as per page no. 1 of seized bundle no 9 and agreement amount mentioned here is Rs. 38,65,500/- On the same page, amount of Rs. 25,25,250/- is written which is cash component over and above of the agreement to sale value which has been taken in cash.
(c) In sale of Shop No. D-A of Ganga Florentina, the saleable area of the shop is 598.65 sq ft. as per page no. 6 of seized bundle no. 5 and agreement amount mentioned here is Rs. 46,37,000/-. On page no. 4 of seized bundle no.5, amount of agreement is Rs. 46,37,000/- and in pencil, it is written as 5670/- which is cash component over and above of the agreement to sale value which has been taken in cash. The total amount comes to Rs. 33,94,345/- (d) In sale of Shop No. D-09 of Ganga Florentina, the saleable area of the shop is 475 sq ft. as per page no. 3 of seized bundle no. 6 and agreement amount mentioned here is Rs. 44,30,000/-. On a rough paper found in the file, it is written page no. 5A of seized bundle no. 6, on this basic cost written is Rs. 42,75,000/- which is cash component over and above of the agreement to sale value which has been taken in cash. (e) In sale of Flat No A-102 of Ganga Florentina, as per page no. 03 of seized bundle no.7, the agreement cost has been mentioned here is Rs. 84,77,000/- and as per page no. 8 of the seized bundle no. 7, the agreement cost is written as Rs. 74,77,000/- only. As per page no. 61 of the seized bundle no. 7, it is the copy of index 2, the agreement cost here written is Rs. 74,77,000/-. The difference of Rs. 10,00,000/- is the cash component which is over and above agreement to sale amount of Rs. 74,77,000/-. (1) In sale of Flat No. A-001 of Ganga Florentina, as per page no. 02 of seized bundle no.4, the agreement cost has been mentioned here is Rs. 1,06,89,725/- and as per page no. 6 of the seized bundle no. 4, the agreement cost is written as Rs. 98,89,725/- only. As per page no. 62 of the seized bundle no. 4, it is the copy of index 2, the agreement cost here written is Rs. 98,89,725/-. The difference of Rs. 8,00,000/- is the cash component which is over and above agreement to sale amount of Rs.98,89,725/-. 5.11 In view of the above facts, it could be seen that the addition is made by the AO on account of on-money received, which is not recorded in books of accounts, on the basis of impounded materials. Further as regards to the extrapolation of on-money, the probability of acceptance of on-money on other flats sold by appellant couldn't be ruled out as it was not possible that appellant would accept the on-money in one flat and couldn't accept in the neighbor flat. This proposition, the AO has supported by the decision of jurisdictional Hon'ble ITAT, Pune Bench in the case of Golani Brothers (supra), wherein the Hon'ble Tribunal has upheld the action of the AO in assuming that assessee must have also received the 'on-money' in respect of the balance 67 shops sold during these years, when the material found and seized in search contained only a list of 201 shops in respect of which 'on-money' was received by the assessee. Accordingly, the view taken by the AO that the appellant has accepted the on-money, which was not recorded in books of accounts is found to be correct and the action of the AO in determining to Rs. 43,20,000/- of on-money income, is hereby upheld for the year under consideration for AY 2017-18. Similarly, for AYs 2018-19 & 2019-20, the addition of 'on-money' income of Rs. 2,05,37,760/- and Rs. 3,24,37,208/-(1,72,95,354 +1,19,34,192 + 32,07,662], respectively made in the hands of the appellant is also upheld. The ground No. 1of appeal is, therefore, dismissed.”
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:
1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the First Appellate Authority erred in upholding the addition of Rs.43,20,000/- made by the Learned Assessing Officer ('Ld. AO') as on-money received by the Appellant. The addition sustained is unwarranted, unjustified, and contrary to the provisions and Scheme of the Act. The addition so made be deleted. The Appellant be granted just and proper relief in this respect.
2. Without prejudice to Ground No. 1 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that if any addition needs to be sustained then that should only be restricted to the Incriminating material found during the course of search proceedings. The addition made over and above such Incriminating material, being merely on the basis of estimations is unwarranted, unjustified and contrary to the provisions of the Act and therefore deserves to be deleted. It be held that the Appellant be granted just and proper relief in this respect.
3. Without prejudice to Ground No. 1 and 2 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that in case additions are sustained on estimation basis, then the addition should be restricted only to the Gross Profit that might have been earned by the Appellant on such on on-money. The addition made by the First Appellate Authority be reduced. The Appellant be granted just and proper relief in this respect. 4. Without prejudice to Ground No. 1, 2 and 3 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that the addition made by the Ld. AO and sustained by the First Appellate Authority is on a very high side. The same should be substantially reduced. The Appellant be granted just and proper relief in this respect. 5. The Appellant craves leave to alter, delete, modify, add or amend any ground of appeal.
14. Similar grounds have been raised by the assessee for the other years which are as under:
(A.Y.2018-19) 1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that, the First Appellate Authority erred in upholding the addition of Rs.2,05,37,760/- made by the Learned Assessing Officer ('Ld. AO') as on-money received by the Appellant. The addition sustained is unwarranted, unjustified, and contrary to the provisions and scheme of the Act. The addition so made be deleted. The Appellant be granted just and proper relief in this respect.
2. Without prejudice to Ground No. 1 and on facts and Rs. circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that if any addition needs to be sustained then that should only be restricted to the Incriminating material found during the course of search proceedings. The addition made over and above such Incriminating material, being merely on the basis of estimations is unwarranted, unjustified and contrary to the provisions of the Act and therefore deserves to be deleted. It be held that the Appellant be granted just and proper relief in this respect.
3. Without prejudice to Ground. No. 1 and 2 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that in case additions are sustained on estimation basis, then the addition should be restricted only to the Gross Profit that might have been earned by the Appellant on such on-money. The addition made by the First Appellate Authority be reduced. The Appellant be granted just and proper relief in this respect.
4. Without prejudice to Ground No. 1, 2 and 3 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that the addition made by Ld. AO and sustained by the First Appellate Authority is on a very high side. The same should be substantially reduced. The Appellant be granted just and proper relief in this respect.
5. The Appellant craves leave to alter, delete, modify, add or amend any ground of appeal.
(A.Y.2019-20) 1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the First Appellate Authority erred in upholding the addition of Rs 3,24,37,208/- made by Learned assessing Officer ('Ld. AD) as on- money received by the Appellant. The addition sustained is unwarranted, unjustified, and contrary to the provisions and scheme of the Act. The addition so made be deleted. The Appellant be granted just and proper relief in this respect.
2. Without prejudice to Ground No. 1 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that if any addition needs to be sustained then that should only be restricted to the Incriminating material found during the course of search proceedings. The addition made over and above such Incriminating material, being merely on the basis of estimations is unwarranted, unjustified and contrary to the provisions of the Act and therefore deserves to be deleted. It be held that the Appellant be granted just and proper relief in this respect.
3. Without prejudice to Ground No. 1 and 2 and on facts and circumstances prevailing in the case and as per provisions and Scheme of the Act, it be held that in case additions are sustained on estimation basis, then the addition should be restricted only to the Gross Profit that might have been earned by the Appellant on such on-money. The addition made by the First Appellate Authority be reduced. The Appellant be granted just and proper relief in this respect.
4. Without prejudice to Ground No. 1, 2 and 3 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that the addition made by the Ld. AO and sustained by the First Appellate Authority is on a very high side. The same should be substantially reduced. The Appellant be granted just and proper relief in this respect.
5. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that the First Appellate Authority erred in sustaining the addition of Rs 6,00,000/- on account of unexplained expenditure under section 69C of the Act which was made by the Learned Assessing Officer [Ld. AO) without considering the reply filed by the Appellant. The addition so made be deleted. The Appellant be granted just and proper relief in this respect.
6. Without prejudice to Ground No. 5 and on facts and circumstances prevailing in the case and as per provisions and scheme of the Act, it be held that the addition sustained by the First Appellate Authority on account of unexplained expenditure under section 69C of the Act is unwanted, unjustified, and contrary to the provisions and scheme of the Act. The addition so made be deleted. The Appellant be granted just and proper relief in this respect.
7. The Appellant craves leave to alter, delete, modify, add and or amend any ground of appeal.
15. The Ld. Counsel for the assessee strongly challenged the order of the Ld. CIT(A) in confirming the addition made by the Assessing Officer. He submitted that the assessee was involved in the development of ‘Ganga Florentina’ located at S.No.36(P) & 28(P), Mohammedwadi Rd, Mohammed Wadi, Pune. Referring to the following table, he submitted that the project has the following flats and shops having the following date of completion: Sr. No. Phase Wing BHK No. of flats / shops Completion date 1 I A 3 BKH 62 26.07.2017 2 I B 2 BKH 60 29.07.2017 3 II C 2 BKH 60 17.10.2018 4 II C 4 BKH 1 17.10.2018 5 II D 3 BKH 62 24.02.2022 6 II D SHOP 16 19.05.2018
16. He submitted that before search action, statement u/s 131 of the Act of Shri Shirish Ranpise was recorded and a diary maintained by him was found which was noted as Bundle No.1 and a file of certain Mr. Rameshkumar Chaudhary was produced by him which was noted as Bundle No.10. Thereafter, a search and seizure action u/s 132(1) of the Act was carried out at the office premises of the assessee on 10.01.2019. He submitted that the entire addition made by the Assessing Officer and upheld by the Ld. CIT(A) is on the basis of certain notings found and certain statements made by the sales representatives. However, no alleged incriminating material was found for assessment year 2017-18. He submitted that the Assessing Officer has placed substantial reliance on the statement recorded of Shri Shirish Bhanudas Ranpise and it was held that the statement so recorded is sufficient evidence to prove that the assessee has received on-money in the shape of sale of shops / flats.
The Ld. Counsel for the assessee vehemently argued that Shri Shirish Bhanudas Ranpise is the employee of M/s. Meenamani Ganga Builder LLP and not that of the assessee. Further his statement was recorded u/s 131 of the Act. Referring to said provisions, he submitted that the said section allows the Assessing Officer to exercise the powers which are coterminous with the powers of a Court under the Code of Civil Procedure, 1908 which includes inter-alia, the power to enforce the attendance of any person and examine him on oath. However, his statement was not recorded u/s 132(4) of the Act. The Ld. Counsel for the assessee also drew the attention of the Bench to the Circular No.551 issued by the CBDT to explain the scope of section 131(1A). The Ld. Counsel for the assessee submitted that the presumption u/s 132(4A) is a rebuttal presumption against the person in whose possession and control the documents / books are found.
The Ld. Counsel for the assessee submitted that not a single customer was examined by the search party either during the course of search or post-search enquiries. Similarly, the Assessing Officer has also not examined any of the buyers by summoning u/s 131 of the Act. Further, no cash or valuables or any entry relating to any expenditure, etc. out of such on-money received was found.
The entire addition was made on the basis of some rough notings and the statements of some of the employees recorded u/s 131 of the Act. Referring to the statement of Shri Annuj Umesh Goel recorded u/s 132(4) of the Act, he submitted that Mr. Goel had flatly denied the receipt of any on-money. However, no question was put to him on this issue.
Referring to the chart showing the papers relied on by the Assessing Officer and certain details with regard to the same, the Ld. Counsel for the assessee drew the attention of the Bench to the Annexure-2 which reads as under:
Sr Page Bundle Type of paper Customer name Written by Statement Scheme to which No No. No. by the unit pertains 1 72 1 Rough scribbling No name written Mr. Piyush Mr. Shirish Page does not Alimchandani Ranpise mention any specific flat 2 13 10 Draft booking Rameshkumar Shubhangi Mr. Shirish Ganga Fernhill form Chaudhary Ranpise 3 2 8 Final Booking Dinesh/Pramod Shirish No specific Ganga Florentina Form Advance statement 4 25 8 Chart Multiple Name No name No specific Ganga Amber, mentioned written statement Ganga Florentina, Ganga Fernhill 5 1 9 Final Booking Rustom Ramani Paayal No specific Ganga Florentina Form statement 6 6 5 Final Booking Syed Shakeel No name No specific Ganga Florentina Form Perzade written statement 7 4 5 Booking Form Syed Shakeel Shirish No specific Ganga Florentina Perzade statement 8 3 6 Final Booking Sagar Goel Piyush No specific Ganga Florentina Form statement 9 5A 6 Notings Sagar Goel Piyush No specific Ganga Florentina statement 10 3 7 Draft booking Nitin/Anita Fagmz No specific Ganga Florentina form Bokey statement 11 8 7 Final Booking Nitin/anita Fagmz No specific Ganga Florentina Form Bokye statement 12 2 4 Draft booking Ravisu Badal Paayal No specific Ganga Florentina form statement 13 6 4 Final Booking Ravisu Badal Paayal No specific Ganga Florentina Form statement 14 4 4 Scratched Ravisu Badal Paayal No specific Ganga Florentina Booking Form statement
Referring to two booking forms which were found during the assessment year 2019-20, he submitted that in case of flat No.A-102, two booking forms were found, the on-money at best can be considered to be the differential value between the agreement values of two booking forms which comes to Rs.10 lakh. Similarly, in respect of flat No.A-001, two booking forms were found on the basis of which the maximum on-money that can be considered on the basis of differential value between the agreement values of two booking forms which comes to Rs.8lakh. However, for the remaining shops, these are all rough notings and cannot be made the basis for any addition. He submitted that merely based on the statements of sales persons recorded u/s 131 of the Act, the Assessing Officer could not have made any addition on account of on-money and extrapolation thereof.
Without prejudice to the above, the Ld. Counsel for the assessee submitted that the on-money, if any, can be confined to the documents seized from the premises of the assessee and it cannot be added for the entire project and the Assessing Officer could not have extrapolated the same. In yet another argument, the Ld. Counsel for the assessee submitted that only the gross profit element can be added and the entire amount cannot be added.
Referring to the decisions of Hon’ble Allahabad High Court in the cases of Dr. Roop vs. CIT (2012) 20 taxmann.com 205 (All) and Dr. V.S. Chauhan vs. DIT (Inv) (2011) 12 taxmann.com 230 (All), the Ld. Counsel for the assessee submitted that the Hon’ble High Court in the said cases has held that the exercise of power u/s 131(1A) is contemplated in a situation anterior to exercise of power under section 132.
Referring to the decision of Delhi Bench of the Tribunal in the case of Pradeep Kumar Sharma vs. DCIT (2021) 132 taxmann.com 41 (Delhi-Trib) and Bangalore Bench of the Tribunal in the case of DCIT vs. H. Omkarappa (HUF) vide the Ld. Counsel for the assessee submitted that the Tribunal in the said cases has held that the additions could not be made merely on the basis of statement recorded u/s 131 of the Act when no corroborative material is unearthed during search.
Referring to the decision of Pune Bench of the Tribunal in the case of Chander Mohan Mehta vs. ACIT (1999) 71 ITD 245 (Pune) and Mumbai Bench of the Tribunal in the case of DCIT vs. Kanakia Hospitality (P.) Ltd. (2019) 110 taxmann.com 4 (Mumbai-Trib.), the Ld. Counsel for the assessee submitted that the Tribunal in the said decisions has held that where the Assessing Officer relies upon statements or documents to corroborate the additions made, the said statement has to be read in totality and cannot be read in piece-meal.
Referring to the following decisions, the Ld. Counsel for the assessee submitted that no arbitrary addition to the income can be made based on the basis of dumb documents, loose papers containing scribbling, rough/vague notings, etc:
i) PCIT vs. Umesh Israni (2019) 108 taxmann.com 437 (Bom) ii) CIT vs. Vatika Landbase (P.) Ltd. (2016) 67 taxmann.com 372 (Del) iii) CIT vs. Vivek Aggarwal (2015) 56 taxmann.com 7 (Del) iv) PCIT vs. Ajanta Footcare (India) (P.) Ltd. (2017) 84 taxman.com 109 (Cal) v) CIT vs. Atam Valves (P.) Ltd. (2009) 184 Taxman 6 (P&H) vi) CIT vs. D.K. Gupta (2008) 174 Taxman 476 (Del) vii) Saaras Agro Industries vs. ACIT (2022) 143 taxmann.com 319 (Indore- Trib.) viii) Ms. Priyanka Chopra vs. DCIT (2018) 94 taxmann.com 122 (Mumbai- Trib.) ix) Nagarjuna Construction Co. Ltd. vs. DCIT (2012) 23 taxmann.com 239 (Hyd.) x) S.P. Goyal vs. DCIT (2002) 82 ITD 85 (Mum.) (TM)
Referring to the following decisions, the Ld. Counsel for the assessee submitted that extrapolation has to be done on the basis of some cogent material found during the course of the search action: i) CIT vs. C.J. Shah & Co (2001) 177 TAXMAN 577 (Bom) ii) Accord Properties vs. ACIT, vide iii) Fort Projects (P.) Ltd. vs DCIT (2013) 29 taxmann.com 84 (Kolkata – Trib.) iv) ACIT vs. M/s. Layer Exports Pvt. Ltd. vide v) DCIT vs. Royal Marwar Tobacco Product (P.) Ltd. (2009) 29 SOT 53 (Ahmedabad) (URO) vi) D.N. Kamani (HUF) vs. DCIT (1999) 70 ITD 77 (Pat.) (TM) vii) Samrat Beer Bar vs. ACIT (2000) 75 ITD 19 (Pune)(TM)
Referring to the following decisions, the Ld. Counsel for the assessee submitted that addition of the alleged on-money being accepted by the assessee should be restricted to the profit element embedded in the alleged on-money received by the assessee: i) CIT vs. President Industries (2002) 124 TAXMAN 654 (Guj) ii) CIT vs. Gurubachhan Singh J. Juneja (2008) 171 Taxman 406 (Guj) iii) Jyotichand Bhaichand Saraf & Son (P.) Ltd. vs. DCIT (2012) 26 taxmann.com 239 (Pune) iv) Kush Corporation vs. ACIT vide v) CIT vs. Balchand Ajit Kumar (2004) 135 Taxman 180 (MP) vi) Madanlal Narendrakumar (HUF) vs. ACIT (2003) 131 TAXMAN 41 (Indore) (Mag.)
He accordingly submitted that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) be deleted.
The Ld. DR on the other hand strongly supported the order of the Ld. CIT(A) sustaining the addition made by the Assessing Officer. He submitted that the evidences were gathered during the course of search showing that the assessee was indulging in receipt of on-money. The statement of the sales person Shri Shirish Bhanudas Ranpise was confronted to the director of the assessee firm and he has simply denied, which is only a bald denial. The assessee firm has never denied the evidences those were gathered. Referring to the decision of the Hon’ble Bombay High Court in the case of Harish Textile Engrs. Ltd. vs. DCIT (2015) 379 ITR 160 (Bom) he submitted that the extrapolation on the basis of loose papers found during the course of search was upheld by the Hon’ble Bombay High Court. Referring to the decision of the Hon'ble Supreme Court in the case of Pooran Mal vs. Director of Inspection (1974) 93 ITR 505 (SC) he submitted that the Hon'ble Supreme Court in the said decision has held that even if the search is invalid, the evidences found during the course of search can be utilized for making addition. He also relied on the decision of Hon’ble Delhi High Court in the case of Balwant Singh vs. Director of Inspection (1969) 71 ITR 550 (Del), according to which information gathered as a result of illegal search and seizure can be used subject to the value to be attached to it or its admissibility in accordance with law relating to evidence.
The Ld. Counsel for the assessee in his rejoinder submitted that in the case of Harish Textile Engrs. Ltd. vs. DCIT (supra) it was accepted by the assessee that it has received on-money, whereas in the instant case the director / partner of the assessee firm has completely denied the receipt of any on-money. He submitted that when the statement of Shri Shirish Bhanudas Ranpise was recorded u/s 131 of the Act and he has made certain statements, the same was not corroborated with any evidence or any further enquiry from the buyers. Since nothing has been done, therefore, the said decision is not applicable.
So far as the decision of the Hon'ble Supreme Court in the case of Pooran Mal vs. Director of Inspection (supra) is concerned, he submitted that there is no dispute to the fact that the evidences can be used but the same has to be corroborated. When the assessee has stated that the negotiations were going on and the final price is as per the form signed by the director and the brokerage has also been given on the final price, the lower authorities could not have brushed aside all these submissions and made the addition of on-money as well as extrapolation of the same, which is not justified.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of both sides. We have also considered the various decisions cited before us by both sides. We find the assessee is a firm engaged in business of real estate. During the course of search action u/s 132 of the Act conducted on 10.01.2019 certain loose papers were found and seized from the office premises of the assessee. When these documents were correlated with entries found in other documents and registered deed, it was noted that the assessee firm has involved in accepting on-money in cash for booking/selling of flats/shops. Further in the statement recorded u/s 131 of Shri Shirish Bhanudas Ranpise, sales manager, he had admitted that the cash component was accepted in the bookings of flats / shops. Since the assessee did not offer any income on account of such on-money received, the Assessing Officer in the order passed u/s 153A r.w.s. 143(3) made addition of Rs.43,20,000/- being the on-money received on the basis of extrapolation. While doing so, the Assessing Officer assumed that the assessee was accepting the on-money to the tune of 80% of the total consideration as mentioned in the registered sale deed. He, however, did not make any addition on account of on-money received on the basis of any seized documents relatable for this year.
We find the Ld. CIT(A) sustained the addition made by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that no such on-money has been received by the assessee which was denied by the partner of the assessee firm in the statement recorded u/s 132(4). Further, no statement of any of the buyers have been recorded either during the course of search or post search enquiries or during the course assessment proceedings. It is also his submission that no cash, jewellery or other valuables or entries containing any expenditure or any other asset was found during the course of search on account of receipt of such on-money. It is also his submission that the addition, if any, should be restricted to the documents found during the course of search and it cannot be extrapolated for other sales for which no evidence was found. It is also his alternate submission that only the gross profit element on account of receipt of such on-money at best can be added.
We find some force in the arguments of the Ld. Counsel for the assessee. A perusal of the statement recorded of Shri Annuj Umesh Goel u/s 132(4) of the Act on 12.01.2019, copy of which is placed in paper book at pages 72 to 78 shows that he has denied to have received any such on-money as stated by Shri Shirish Bhanudas Ranpise and whose statement was recorded u/s 131 of the Act and no other query was put to him to confront the statement of Shri Ranpise. For the sake of clarity, we reproduce the entire statement recorded u/s 132(4) of Shri Annuj Goel which reads as under: “STATEMENT U/S. 132 (4) OF THE INCOME TAX 1961 Statement of Shri Annuj Umesh Goel s/o Shri late Umesh Sitaram Goel age 36 years R/o 701 & 702, Konark A Plus, Sopan Baug, Ghorpadi, Pune 411001 recorded u/s 132(4) of the 1.T. Act 1961, during the course of search action u/s 132 in the case of Jaiprakash Sitaram Goel, Amit Jaiprakash Goel, Atul Jaiprakash Goel, Subhash Sitaram Goel, Umesh Sitaram Goel, Annuj Umesh Goel, Ankit Umesh Goel, Rajendra Sitaram Goel, Ammul Rajendra Goel, Goel Ganga India Pvt. Ltd., Goel Ganga Developers (India) Pvt. Ltd., Goel Nitron Construction, Goel Ganga Promoters, Goel Ganga Space LLP, Goel Eisha Capitals, Goel Ganga Infrastructure and Real Estate Pvt. Ltd., Geeta Construction Pvt. Ltd., Ganga Housing Pvt. Ltd., Shree Balaji Realty, Shri Siddhivinayak Developers, Meenamani Ganga Builder LLP, Ganraj Homes LLP, Shree Balaji Associates, Goel Properties, Kappa Realtors LLP on 12/01/2019.
Statement commenced on 12/01/2019 at 08:30 PM. OATH ADMINISTERED "I swear in the name of God that I will speak truth, only truth and nothing but the truth. I further confirm that I have been made aware of the consequences of making a false statement under oath" Before Me Deponent Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) Q.1 Please identify yourself. Ans. My name is Annuj Umesh Goel s/o Shri late Umesh Sitaram Goel age 36 years R/o 701 & 702, Konark A Plus, Sopan Baug, Ghorpadi, Pune Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) 411001. My educational qualification is B.Com. My contact no. is 9922992255. I would also like to state that I am well versed in Hindi and English and I am comfortable in giving the statement in English language. Q.2 Please confirm that oath has been administered to you and you are reminded that this statement is being recorded on oath and you have been made aware about the consequences of giving false statement on oath including penalties u/s 179 of IPC, sec 180 of IPC, sec 181 of IPC and sec 277A of the Income Tax Act. Sec 179 of IPC: Refusing to answer question Sec 180 of IPC: Refusing to sign the statement Sec 181 of IPC: False statement on oath Sec 277A of Income Tax Act, 1961: Enabling others to evade taxes. Ans. I confirm that the oath has been duly administered and I have been made aware of the consequences of giving a false statement on oath. Q.3 Please give details of your sources of Income? Ans. I receive remuneration income and share of profit from my partnership firms. The quantum of remuneration is around Rs.50 lakhs every year. My PAN is AHCPG8733P. I have filed my last Return of Income for A.Y. 2017-18.
Q.4 Please provide the details of all the business concerns in which you or your family members have substantial interest and details of assets held by you. Ans. I and my family members are basically engaged in the business of real estate construction. The details of various business concerns in which I or my family members have substantial interest is given as annexure 'A' to this Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) statement. The detail of assets held by me is given as annexure 'A1' to this statement. Q.5 Please explain your work profile as a partner of M/s Meenamani Ganga Builder LLP. Ans. I along with my brother Ankit Umesh Goel, am looking after whole and sole business activities of M/s Meenamani Ganga Builder LLP, with the help of my staffs. I would also like to state that I was also looking after the business activities of M/s. Shri Siddhivinayak Developers, Shree Balaji Associates and Shree Balaji Realty. Q.6 Please state what type of Books of accounts and documents are maintained at this premise? Also provide details of all the concerns whose books of accounts are maintained at this premise. Ans. At this premises, we maintain all the books and accounts of M/s Meenamani Ganga Builder LLP, M/s. Shri Siddhivinayak Developers, and Shree Balaji Realty. Apart from this, all the other documents related to bookings, project voucher and receipt are maintained at this office. Books of accounts are maintained in tally accounting software. Customer booking forms, demand and receipts from customers are maintained in ERP. Q.7 Please give details of all the bank accounts maintained by you and your firms/company/proprietary concerns. Ans. I am providing details of all bank account maintained by me and my brother Ankit Umesh Goel and all my firms as annexure 'B' to this statement.
Q.8 Please provide trial balance of all your firms in which you have substantial interest as on 10/01/2019. Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel)
Ans. I am providing you consolidated trial balance of all the firms in which I and my brother Shri Ankit Umesh Goel have substantial interest as annexure 'C' to this statement. As per this trial balance, total cash in hand is Rs.1,18,73,957/-. Q.9 As per the trial balance submitted by you, it is showing cash balance position of Rs.1,18,73,957/- but cash found at this business premise i.e. 5, San Mahu Commercial Complex, Bund Garden Road, Pune 411001 is Rs.23,03,495/- only. Please explain the difference of Rs.95,70,462/-. Ans. Rs.25,09,860/ has been found at my residence i.e. 701 & 702, Konark A Plus, Sopan Baug, Ghorpadi, Pune 411001. Remaining amount of Rs.70,60,602/-, I need to reconcile and will offer you explanation within one week's time. Q.10. Please provide the details of Work in Progress (WIP) as on today of all your ongoing projects in which you are actively involved as partner/director/proprietor etc. Ans. The status/position of the WIP of ongoing projects of all the firms controlled by me are as per the details given below: Sr No Name of Project Name of the concern WIP (Rs.) 01 Florentina Shree Balaji Realty 143,02,41,160/- 02 Fernhill Meenamani Ganga 40,47,63,526/- Builder LLP 03 Amber Shri Developers 56,66,43,743/- Siddhivinayak 04 New Town Shree Balaji Associates 73,01,40,193/- Total 313,17,88,622/-
Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) In support of this, I am submitting herewith balance sheet and profit & loss account as on today as annexure 'D' to this statement. Q.11 On analysis of you're the position of WIP given by you above that it can be found that the total WIP in your case is Rs.329,22,50,849/-. Under the circumstance please explain which method of accounting is being followed by you for sales/revenue recognition. Ans. I am following percentage completion method for sale/revenue recognition. Q.12 Please provide project wise working of percentage completion method in regards to above mentioned four projects. Ans. I am providing the details of percentage completion of projects as annexure 'E' to this statement.
Q.13 On verification of the working of percentage completion method applied by you, it is noticed that the total net profit to be recognized for all above four projects comes to Rs.4,23,00,549/-. Please comments. Ans. Yes, I confirm that the total net profit to be recognized for FY 2018-19 is Rs.4,23,00,549/-. I am declaring herewith the same as additional income for FY 2018-19. The bifurcation of the above state declaration is: Sr No. Project Firm Name Financial Year Additional income 01 Fernhill Meenamani Ganga 2018-19 0 Builder LLP Sd/- Sd/- (Authorized Officer) ccc(Annuj Umesh Goel) 02 Florentina Shree Balaji Realty 2018-19 56,37,525/- 03 Amber Shri Siddhivinayak 2018-19 1,56,47,260/- Developers 04 New Town Shree Balaji Associates 2018-19 2,10,15,755/- Total 4,23,00,549/- Q.14. Please identify Shri Shirish Bhanudas Ranpise? Ans. Yes, I know Shri Shirish Bhanudas Ranpise. He is working as HOD (Head of the Department), sales and marketing in my office. He has responsibility to look after sales of the Goel Ganga Developments Group. Q.
I am showing you statement of Shri Shirish Ranpise recorded under section 131 of the Income Tax Act 1961 on 10.01.2019. Please go through it and comment. Ans: I have thoroughly gone through the statement of Shri Shirish Ranpise recorded under section 131 of the Income tax Act 1961 on 10.01.2019 and I do not agree with the statement given by Shri Shirish Bhanudas Ranpise. There is no such procedure of my meeting with any customer as it is not possible to meet so many customers on daily basis. Q.
I am showing you working sheet prepared by Shri Shirish Ranpise (attached with his statement) on the basis of documents found and seized from your premises. Please confirm the same and explain the content of the same. Ans: I have gone through above said sheet. As per the procedure of my company, we do not have or follow any such method of form Booking 1 and Form Booking 2. I also state that there is no such format in the way Shri Shirish has presented before you in his statement.
Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) Q. 17 During the statement of Shri Shirish Ranpise, he stated that in every booking there are two Forms, one showing agreement value and another showing actual value of the Unit/flat/shop. He also provided one example of Shri Rameshkumar Chtraram Choudhary wherein he produced two different booking Forms which are seized. In this regard, please offer your comment. Ans: As I mentioned above, there is no procedure of my company that follows any such method of form Booking 1 and Form Booking 2. Shri Ramesh C Choudhary may be one of my customer. But I never met him till date. Do you want to say anything else? Ans: Yes Sir. I once again confirm that I have voluntary declared amount of Rs.4,23,00,549/- as my additional income for FY 2018-19 relevant to AY 2019-20. I will pay due taxes their on within prescribed time limit as per law in presence.
Sd/- Sd/- (Authorized Officer) (Annuj Umesh Goel) VERIFICATION "Whatever stated above is correct and true to the best of my knowledge and belief. The above statement has been given by me voluntarily in sound state of mind, without any coercion, threat, duress and undue influence. I confirm that I have gone through the statement, understood in and found that whatever stated by me has only been correctly recorded."