ORDER

PER AMIT SHUKLA, JM

The aforesaid appeal has been filed by the assessee against the impugned order dated 31.03.2017, passed by Ld. Commissioner of Income Tax (Appeals)-IV, Kanpur for the quantum of assessment passed u/s.153A for the Assessment Year 2011-12.

2. The facts in brief are that search and seizure action was carried out u/s. 132(4) on 09.04.2012 in the case of Assessee. Accordingly, notice u/s.153A was issued for filing of return of income which was duly complied with. During the course of assessment proceedings, the assessee was confronted with the seized document at page no. 24, Annexure A-21 Part No. ANR-01 when the Assessing Officer required the assessee to give the explanation under following issue:-

“21. Please file the details of H. No. D-135, Sector-40, Noida. During the course of search a ‘Note Pad’ was seized at Annexure A-21, and it is observed that as per Page No.24 a payment of Rs.1.5 crores as per your books of accounts, failing which, it will be treated as your unaccounted investment and added back to your income without any further reference to you. I propose an addition of Rs.1.5 crores.

Proposed addition Rs.1.5 crores.”

3. In compliance thereof, the assessee submitted that the entire seized annexure pertains to his son, Mr. Akash Sharma’s business who was as a real estate agent. The diary which is the part of the seized annexure belongs to Mr. Akash Sharma who is maintaining and recording all the details of the prospective buyers/sellers in and around Noida along with their expectation. The said reply for the sake of ready reference is reproduced hereunder:

“19. As far as the Details of Rs. 1.5 Crore written in page no. 24 of seized document, Annexure - A-21, is concerned, this entire Annexure pertains to his son Mr. Akash Sharma’s business who was running his business as a Real Estate agent. It is merely a diary that Mr. Akash sharma maintained till 2006-07 and recorded all details of prospective buyers / sellers of various immovable properties in and around Noida along with their expectation. As a real estate agent he was required to suggest various Permutations and Combinations to their customers for timely execution of their transactions. Accordingly this sum of Rs. 1.5 crores written in that diary was merely a proposal suggested to a customer for his outflow and is not related to Assessee’s income at all.

20. As the assessee and his son is already engaged in Real Estate business, they have ample knowledge of construction and good connections with suppliers of building material. Accordingly the question of getting construction done on contractual basis to third party does not arise at all. Therefore, statement given by the third party regarding payment to him for Rs. 1.75 crores in cash for renovation of residential house property at D-135, Sector-40, Noida. Further note that total area constructed on the said plot is 253.81 sq. mtr. and if we go for construction through contractor also the estimated cost can be worked out to Rs. 37, 90, 682.22 only even as per CPWD approved rates. Besides this property was purchased by the assessee on which the construction was already there and the same is evident from the copy of title deed of the house. Accordingly the construction taken place at the premises by the assessee was merely a renovation of building and furnishing on which the assessee had incurred a total sum of near about-60 Lakhs which is duly accounted for in the books of accounts. The Assessee, his son Mr. Akash Sharma and his wife Mrs. Sabita Sharma had jointly taken a home loan for Rs. 40,00,000/- for the renovation and furnishing of the said house. A copy of repayment schedule of home loan is enclosed herewith for your kind perusal.

21. As far as the purchase of agricultural land for Rs. 4.60 Crores is concerned, the land is owned by M/s Cheap Housing Private Limited where the assessee or his family members are holding only 3.47% shares. Rest of the shares are being hold by Assessee’s elder br