The Sheetal Infrastructure Pvt.Ltd., Ahmedabad V. The ACIT.,Cent.Circle-1(3), Ahmedabad

CO 33/AHD/2012

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2871 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N SOPERKAR WITH PARIN SHAH
• Assessee Lawyers: JAGDISH
• Keywords: Gift; Business expenditure; Income from undisclosed sources; Loose papers; Document seized; Corroborative evidences; Right to appeal; Documents seized; Revenue expenditure
• Section: 40A(3); 143(3); 133A; 153A; 37(1); 147; 37; 263; 132

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM, AND SHRI MANISH BORAD, AM ./ITA.NO. 647/AHD/2011 & CO. 33/AHD/12 ( / ASSTT YEAR :2009-10) ACIT, CENTRAL CIRCLE 1(3), ROOM NO. 304,3 RD FLOOR, AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD VS. THE SHEETAL INFRASTRUCTURE PVT. LTD. 25, 4 TH FLOOR, SHUKUN MALL, SHAHIBAUG, AHMEDABAD-380004 PAN: AAICS9312A (APPELLANT) (RESPONDENT) / APPELLANT BY: SHRI JAGDISH, CIT, D.R. / RESPONDENT BY: SHRI S.N. SOPERKAR WITH PARIN SHAH, A.R. / DATE OF HEARING 29-03-2017 /DATE OF PRONOUNCEMENT 26-05-2017 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE AND CROSS OBJECTION BY ASSESSEE FOR ASSESSMENT YEAR 2009-10 ARE DIRECTED AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-III, AHMEDABAD DATED 27/09/2 011 ARISING OUT OF THE ORDER U/S. 143(3) R.W.S. 153A(1)(B) AND R.W.S. 153B (1)(B) OF THE ACT FRAMED ON 08.09.2010 BY DCIT, CENTRAL CIRCLE-1(3), AHMEDAB AD. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 2 2. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PRIVATE LTD. COMPANY ENGAGED IN THE BUSINESS A S BUILDER AND DEVELOPER. A SURVEY ACTION U/S. 133A OF THE ACT WAS CONDUCTED AT ASSESSEES BUSINESS PREMISES ON 29.08.2008. EXCESS CASH OF RS. 40,23,3 00/- WAS DETECTED. SUBSEQUENTLY SEARCH ACTION U/S. 132 OF THE ACT WAS CONDUCTED ON 29.09.2008 WHICH RESULTED INTO SEIZER OF CASH AT RS. 40,00,000 /- AND OTHER INCRIMINATING DOCUMENTS. ON CONFRONTING WITH THE DOCUMENTS THE GR OUP ADMITTED RS. 7.20 CRORE AS UNDISCLOSED RECEIPT. SUBSEQUENTLY ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 29.09.2009 DECLARING INC OME OF RS. 2,10,23,030/-. NOTICE U/S. 143(3) FOLLOWED BY 142(1 ) OF THE ACT WERE ISSUED AND DULY SERVED TO THE ASSESSEE. NECESSARY DETAILS AS CALLED FOR WERE DULY FURNISHED. ASSESSMENT ORDER WAS COMPLETED BY ASSESS ING INCOME AT RS. 5,09,85,016/-, AFTER MAKING FOLLOWING ADDITIONS TOT ALING TO RS. 2,99,61,986/- ON THE BASIS OF SEIZED MATERIAL:- (I) DISALLOWANCE OF EXPENSES CLAIMED BY THE ASSESSEE TOWARDS AMOUNT PAID FOR VACATING RIGHTS IN SCRAPPING ROYAL VEDICA SCHEME RS. 1,39,78,000/- (II) DISALLOWANCE OF EXPENSES ON ACCOUNT OF ON MONEY PAYMENT FOR REPURCHASE OF VEDICA-I AND VEDICA-II PLOTS RS. 98,70,000/- (III) DISALLOWANCE OF EXPENSES CLAIM IN THE SEIZED DOCUMENT FOR WANT OF EVIDENCE. RS. 61,13,986/- TOTAL RS. 2,99,61,986/ - 3. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE LD. COM MISSIONER OF INCOME TAX(APPEALS) AND PARTLY SUCCEEDED AS LD. CO MMISSIONER OF INCOME TAX (APPEALS) DELETED ADDITIONS OF RS. 1,39,78,000/ - AND RS. 61,13,986/- AS REGARDS THE ADDITIONS OF RS. 98,70,000/- RELATING T O DISALLOWANCE OF PAYMENT OF ON MONEY PAID FOR PURCHASE OF PLOTS IN VEDICA SC HEME, LEARNED ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 3 COMMISSIONER OF INCOME TAX (APPEALS) DELETED RS. 16 ,10,000/- AND SUSTAINED THE REMAINING AMOUNT OF RS. 82,60,000/-. 4. NOW WE WILL TAKE UP THE GROUNDS RAISED BY THE RE VENUE WHICH READS AS FOLLOWS:- 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DI RECTING THE ASSESSING OFFICER TO ALLOW THE EXPENDITURE OF RS. 1,39,70,000/-- MADE O N ACCOUNT OF ON MONEY PAYMENT FOR VACATING THE RIGHT AS A RESULT OF SCRAPPING OF ROYAL VEDICA SCHEME. 2) THE LD.CLT(A) OUGHT TO HAVE ACCEPTED THAT THE EVIDEN CES OF PAYMENT OF COMPENSATION WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER IN SPITE OF ADEQUATE OPPORTUNITY HAVING BEEN GIVEN TO THE ASSESSEE AT THE ASSESSME NT STAGE. 3) THE LD.CLT(A) ERRED IN NOT ACCEPTING THAT IT IS A SE TTLED PROPOSITION OF LAW THAT IN REGARD TO THE GENUINENESS OF AN EXPENDITURE CLAIMED AS D EDUCTION THE ONUS IS ENTIRELY UPON THE ASSESSEE TO ESTABLISH IT. THE ONUS IS NEVE R UPON THE ASSESSING OFFICER TO DISPROVE IT. 4) WITHOUT PREJUDICE TO THE ABOVE HAVING HELD THAT TH E AMOUNT OF COMPENSATION PAID BEING ADMISSIBLE AS DEDUCTION UNDER SECTION 37(1) O F THE ACT THE LD.CIT(A) OUGHT TO HAVE EXAMINE THEIR ADMISSIBILITY IN TERMS OF SECT ION 40A(3) OF THE ACT. 5.THE LD.CIT(A} HAS ERRED IN LAW AND ON FACTS IN DIRECT ING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.16,10,000/- EXPENSES ON ACCOUN T OF ON MONEY PAYMENT FOR PURCHASE OF VEDICA-1 AND VEDICA-2 PLOTS. 6.THE LD.CLT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING THE ASSESSING OFFICER TO ALLOW THE ADDITION OF RS.61,13,986/- ON ACCOUNT OF OTH ER EXPENSES SUCH AS COMMISSION, INTEREST, SALARY ETC. 7) WITHOUT PREJUDICE TO THE ABOVE, HAVING ACCEPTED THE CL AIM OF THE ASSESSEE THAT THE EXPENSES ARE ADMISSIBLE, THE LD.CIT(A) OUGHT TO HAVE EXAMINED THEIR ADMISSIBILITY IN TERMS OF SECTION 40A(3) AND SECTION ' 40(A) (IA) OF THE ACT. 8) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 9) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C1T (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 4 GROUND NO. 1 TO 4 5. THESE FOUR GROUNDS OF REVENUE RELATES TO EXPENDI TURE OF RS. 1,39,78,000/- MADE ON ACCOUNT OF AMOUNT PAID TO VAC ATE THE RIGHT AS A RESULT OF SCRAPING OF ROYAL VEDICA SCHEME. LD. ASSESSING OFFICER DISALLOWED THIS EXPENDITURE AS THE ASSESSEE FAILED TO FURNISH THE B ASIC DETAILS I.E. ADDRESS, PAN IN ALL CASES EXCEPT ONE. LD. ASSESSING OFFICER ALSO DECLINED THE ASSESSEES ALTERNATIVE PLEA CLAIMING THE AFORESAID AMOUNT PAID FOR AS BUSINESS LOSS. LD. ASSESSING OFFICER ALSO OBSERVED THAT EVEN THOUGH DETAILS WHICH ARE MENTIONED ON A LOOSE PAPER, THE ONUS IS ASSESSEE IS TO PROVE THAT THE SAID EXPENDITURE IS AN ALLOWABLE ITEM AND IT FALLS WITHI N THE DOCTRINE OF COST MATCHING WITH REVENUE. HOWEVER IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE SUCCEEDED IN FULL. 6. NOW ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. AUTHORISED REPRESENTATIVE SUPPORTED THE FIND INGS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) AND LD. DEPART MENTAL REPRESENTATIVE SUPPORTED THE ORDER OF LD. ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. ISSUE RAISED IN GROUND 1 TO 4 BY REVENUE REVOLVES AROUND AMOUNT OF RS. 1,39,78,000/- PAID BY ASSESSEE TO VARIOUS PA RTIES FOR VACATING THE RIGHT AS A RESULT OF SCRAPING OF ROYAL VEDICA SCHEME. THE SE DETAILS WERE FIGURED OUT FROM THE LOOSE PAPERS FOUND IN THE COURSE OF SU RVEY U/S. 133A FOLLOWED BY SEARCH U/S. 132 ON 29.08.2008. ASSESSEE MADE DIS CLOSER OF RS. 7.2 CRORES AND ALSO CLAIMED EXPENDITURE UNDER VARIOUS HEADS FO R PURCHASED OF LAND, PROJECT EXPENDITURE, SHORT TERM LOANS ON THE BASIS OF SEIZED PAPER MATERIALS. WE FURTHER NOTICE THAT PREVIOUSLY THERE EXISTED A R OYAL VEDICA SCHEME MADE ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 5 BY THE APPELLANT WHICH WAS DEMOLISHED. THEREAFTER O N THE SAME LAND A NEW SCHEME NAME VEDICA EXOTICA WAS LAUNCHED. BOOKING AM OUNT OF VARIOUS UNITS IN THIS NEW SCHEME OF VEDICA EXOTICA WAS RECEIVED W HICH DULY FORMS ITS PART OF THE DISCLOSURE OF 7.2 CRORES. ASSESSEE IN ORDER TO GET FREE POSSESSION OF THE LAND HAD TO PAY THE UNIT HOLDERS OF ROYAL VEDICA SC HEME WHICH WAS DEMOLISHED. ASSESSEE HAS FILED COPY OF LEDGER ACCOU NT SHOWING RECEIPT OF BOOKING AMOUNT AND REFUND OF THE SAME ALONG WITH CO PY OF RECEIPT ISSUE. 9. WE FURTHER OBSERVE THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) DELETED THE DISALLOWANCE AND ALLOWED THE ASSESSEES CLAIM OF EXPENDITURE OF RS. 1,39,70,000/- BY OBSERVING AS FOLLOWS:- 3. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE SEI ZED MATERIAL. IN THE SEIZED PAGES. THERE ARE DEBIT AND CREDIT ENTRIES OF CASH AMOUNT AND CHEQUE AMOUNT ALONG WITH THE PARTICULARS AGAINST EACH AMOUNT. THE TOTAL OF CREDIT ENTRIES COM ES TO RS.764,06,613. WHEN THE AO EXAMINED THE NATURE OF THE DEBIT AND CREDIT ENTRIES AS APPEARING IN THE SEIZED PAGES, HE CLASSIFIED THEM UNDER THREE CATEGORIES. A. EXPENSES OF RS.139,78,000 ON ACCOUNT OF ON MONEY PAYMENT FOR VACATING THE RIGHT AS A RESULT OF SCRAPPING OF ROYAL VEDICA SCHEME. B. EXPENSES OF RS.186,34,000 ON ACCOUNT OF ON MONEY PAYMENT FOR THE PURCHASE OF VEDICA-1 AND VEDICA -2 PLOTS. C. OTHER EXPENSES SUCH AS COMMISSION, INTEREST, SALARY ETC. AMOUNTING TO RS. L 16,63,986. 'IN THE FIRST CATEGORY THE EXPENSES ON ACCOUNT OF ON MONEY PAYMENT F OR VACATING THE RIGHT AS A RESULT OF SCRAPPING OF ROYAL VEDICA SCHEME ARE M ENTIONED. IT WAS STATED BY THE AR SHRI TUSHAR SHAH C.A. OF THE APPELLANT COMPANY THAT EARLIER VEDICA- 1 SCHEME WAS LAUNCHED BY SHRI PARAS PANDIT (PRESENT DIRECTOR OF THE APPELLANT COMPANY) IN THE PROPRIETARY CONCERN NAMED AS SHEETAL DEVELOPERS IN 2004. THAT CONCERN HAD THE LAND NEAR GIFT CITY AT KODA ROAD. THIS PLOTTING SCHEME WAS SOLD TO. V ARIOUS MEMBERS BY SHEETAL DEVELOPERS. SUBSEQUENTLY SHEETAL DEVELOPERS WAS CLOSED AND A NEW COMPANY IN THE NAME OF SHEETAL INFRASTRUCTURE PRIVATE LIMITED WAS INCORPORAT ED AROUND 2006. THE' APPELLANT COMPANY SUBSEQUENTLY REALIZED THAT THE LAND OF VEDICA-1 SOLD TO VARIOUS MEMBERS IS VIABLE FOR THE PROJECT OF BUNGLOW/FLAT SCHEME. THEREF ORE, THE APPELLANT COMPANY RE- PURCHASED THE PLOTS SOLD BY VEDICA-1 FROM THE MEMBERS CONCERNED. IN THIS LAND THE APPELLANT COMPANY HAS LAUNCHED THE SCHEME KNOWN AS ROYAL VEDICA. THE PLAN OF THE SCHEME WAS ALSO APPROVED AND THE APPELLANT HAS STARTED CONSTRUCTION AND GETTING THE BOOKING FOR THE SCHEME.. HOWEVER, SUBSEQUENTLY DUE TO CHANGE IN PLAN AT G ANDHINAGAR LEVEL, THE APPELLANT WAS FORCED TO DEMOLISH THE CONSTRUCTION CARRIED OUT AND HANDOVER THE LAND FOR THE NEW TP ROAD. THE APPELLANT HAD TO SCRAP THE ENTIRE SCHEME AND IN THAT EVENT ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 6 HE HAD TO PAY EXTRA AMOUNT TO THE PERSONS WHO HAD BOOKED THEIR UNITS IN THE SC HEME DUE TO THE SUBSTANTIAL HIKE IN THE LAND PRICES. ON THIS VERY LAND, THE PRE SENT SCHEME OF VEDICA. EXOTICA IS LAUNCHED BY THE APPELLANT. ACCORDING TO THE APPELLANT, THE DI FFERENTIAL PAYMENT IS NOTHING BUT A BUSINESS LOSS INCURRED BY THE APPELLANT. 4. IN 2005 ANOTHER PLOTTING SCHEME BY THE NAME OF V 69 WAS STARTED BY SHEETAL DEVELOPERS AND IT WAS SOLD OUT. THEREAFTER, THE APPELLANT COMPAN Y DECIDED TO BUY THE SAME LAND FROM THE CONCERNED MEMBERS. FOR BUYING THE PLOTS FROM T HE CONCERNED MEMBERS THE APPELLANT HAD MADE PAYMENT IN CASH AS WELL AS BY CHEQUE. T HE ENTRIES OF CASH AND SOME CHEQUES ARE APPEARING IN THE SEIZED DOCUMENTS. OUT OF THE ENTRIE S OF EXPENSES MENTIONED IN THE SEIZED PAPER, TOTAL AMOUNT OF RS. 103, 74, 000/- IS PAID FOR VEDICA- 1 SCHEME IN WHICH LAND, THE PRESENT SCHEME OF VEDICA EXO TICA, IS RUN. IT, WAS ADMITTED BY THE AR BEFORE ME THAT AN AMOUNT OF RS.82,60,000 IS PAID FOR THE ACQUI SITION OF LAND OF EARLIER V 69 SCHEME ON WHICH THE CONSTRUCTION WORK IS BEING CAR RIED OUT UNDER DIFFERENT PROJECT (NOT VEDICA EXOTICA). 5. ONE OF THE CONTENTION OF THE AO IN THE ASSESSMENT ORDER IS THAT THE APPELLANT HIMSELF HAD DECLARED THE ADDITIONAL INCOME OF RS.7.20 CRORES WHICH IS THE TOTAL OF THE RECEIPTS APPEARING IN THE SEIZED PAPER. THIS DECLARATION WAS AGAIN CONFIRMED BY HIM AF TER THE DATE OF THE SEARCH. THEREFORE, THE APPELLANT CANNOT SUBSEQUENTLY RETRACT FROM THE DECLARATION AND THEREFORE, THE INCOME OF THE .APPELLANT CANNOT BE LESS THAN RS.7. 20 CRORE ON THE BASIS OF THE SEIZED PAPERS NUMBER 55 TO 59. I DO NOT AGREE WITH THIS ARGUMENT OF THE AO. THE APPELLANT HAS ADMITTED THE UNACCOUNTED INCOME OF RS. 7.20 CRORES ON THE BASIS OF THESE DOCUMENTS. AS PER THIS, THERE WAS TOTAL RECEIPT OF RS. 7.64 CRORES AND THE EXPENSES OF RS.4,42 CRORES. SUBSEQUENTLY, THE APPELLANT. REALISED THAT HIS INCOME IS NOT THE TOTA L RECEIPTS OF RS.7.20 CRORES BUT THE EXPENSES INCURRED FOR EARNING SUCH INCOME HAS TO BE DEDUCTED. HE ACCORDINGLY CLAIMED SUCH EXPENSES IN THE RETURN OF INCOME FILE D IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE INCOME-TAX ACT. IN MY OPINION, IF THE DISCLOS URE OF RS.7.20 CRORES WAS MADE ONLY ON THE BASIS OF THE SEIZED PAPERS NUMBER 55 TO 59 OF ANNEXURE A/6, THEN IT WAS NOT A DISCLOSURE OF THE TOTAL INCOME BUT OF THE TOTAL RECEIPTS. FOR ARRIVING AT THE CORRECT INCOME, THE ALLOWABLE EXPENSES' HAVE TO BE CONSIDERED B Y THE AO. THEREFORE, THERE IS NOTHING WRONG IN CLAIMING THE EXPENSES AT THE TIME OF FILING THE RETURN OF INCOME UNDER SECTION 153 A .OF THE INCOME-TAX ACT. 6. THE MAIN CONTENTION OF THE AO IN THE ASSESSMENT ORDER IS THAT THE GENUINENESS OF THE EXPENSES AS APPEARING IN THE SEIZED PAPERS NUMBER 55 TP 59 HAS NOT BEEN PROVED BY THE APPELLANT, THEREFORE, WHEREVER THE APPELLANT HAS BEEN ABLE TO FILE THE CONFIRMATION, FROM THE CORRESPONDING PARTY, THE AO HAS ALLOWED SUCH EXPENDITURES AND DISAL LOWED THE BALANCE. IN MY OPINION, THE BASIS OF THE AO FOR MAKING THE DISALLOWANC E OF EXPENSES AS APPEARING IN THE SEIZED PAPERS IS NOT PROPER. IF ON THE BASIS OF THE SAME SEIZED PAPER, THE AO HAS ACCEPTED THE GROSS RECEIPT OF RS.7.64 CRORES, THEN HE CANNOT DISB ELIEVE THE EXPENSES APPEARING ON THE SAME PAPER. IF THE CONTENTS OF THE SEIZED PAP ER ARE TO BE ACCEPTED AS CORRECT, THEN ALL THE ENTRIES THEREIN ARE ALSO TO BE ACCEPTED AS CO RRECT. THE AO CANNOT SAY THAT THE RECEIPTS ARE CORRECT BUT THE EXPENSES ARE NOT GENUINE. IN SUCH CASES, WHERE EVER, THERE ARE ENTRIES OF RECEIPTS AND EXPENSES WRIT TEN IN A SEIZED PAPER, IT IS TO BE PRESUMED THAT BOTH THE ENTRIES OF RECEIPTS AS WELL AS EXPENSE S ARE CORRECT. THE ONUS IS ON THE AO TO PROVE OTHERWISE. IN MY OPINION, THE GENUINENESS OF THE EXPENSES MENTIONED IN THE SEIZED PAPER ON THE BASIS OF WHICH THE APPELLANT IS ACCEPTI NG THE RECEIPTS, CANNOT BE DOUBTED BY THE AO. FURTHER, ALL THE GENUINE EXPENSES NOT PERTAINING TO EA RNING OF THE INCOME ARE NOT ALLOWABLE EXPENDITURE. FOR EXAMPLE, IF THE APPELLANT HAS PAID AN AMOUNT OF RS. X (SAY) TO A FOR THE PURCHASE OF LAND ON WHICH THE PROJECT O F THE APPELLANT HAS NOT EVEN STARTED, THEN THIS EXPENDITURE OF RS. X CANNOT BE ALLOWED AGAINST THE INCOME OF ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 7 ANOTHER PROJECT EVEN THOUGH' THE GENUINENESS OF THE EXPENDITURE IS NOT DOUB TED. WHAT THE AO HAS TO SEE IS WHETHER THE EXPENSES MENTIONED IN THE SEIZED PAPER ARE RELATABLE TO THE INCOME MENTIONED IN THE SAME SEIZED PAPER. IF-THERE IS A NEXUS. BETW EEN THE EXPENDITURE AND THE RECEIPTS, THEN THE AO IS DUTY BOUND TO. ALLOW' SUCH EXPENDITURES PR OVIDED SUCH EXPENSES ARE NOT PROHIBITED BY LAW AS MENTIONED IN SECTION 37 (1) PR OVISO OF THE INCOME- TAX ACT. IF THE EXPENSES NOT PROHIBITED BY LAW, AND THERE IS A NEXUS BET WEEN THE EXPENDITURE AND EARNING OF THE INCOME, THEN ALL SUCH EXPENSES ARE ALLOW ABLE EVEN THOUGH THE APPELLANT IS NOT ABLE TO PROVIDE THE CONFIRMATIONS FROM THE CORRE SPONDING PARTIES. SINCE, ALL SUCH EXPENDITURES ARE INCURRED IN CASH,.IT IS NOT EXPECTED FROM THE APPELLANT TO PROVIDE CONFIRMATIONS FROM THE COUNTERPARTIES. THEREFORE, IN MY VIEW, IN SUCH CASES ONLY THING TO BE SEEN BY THE AO IS WHETHER THE EXPENDITURE IS NOT CO VERED UNDER PROVISO TO SECTION 37 OF THE INCOME-TAX ACT AND WHETHER IT IS RELATABLE TO EAR NING OF THE INCOME AS MENTIONED IN THAT SEIZED PAPER. IF BOTH THE CONDITIONS ARE SATISFIED, THE N THE EXPENSES ARE ALLOWABLE. IF, HOWEVER, ANY ONE OF THE CONDITIONS ARE NOT SATISFIED THE N ONLY SUCH EXPENSES CAN BE DISALLOWED. IN VIEW OF THIS PRINCIPLE, IT IS NECESSAR Y TO EXAMINE THE NATURE OF THE EXPENSES .MENTIONED IN THE SEIZED PAPER. 7. IN THE ASSESSMENT ORDER, THE AO HAD DIVIDED THE EXPENSES IN THREE CATEGORIES AS UNDER. 7.1 IN MY OPINION., SINCE THE PAYMENTS HAVE BEEN MADE TO THE UNIT HOLDERS O F ROYAL VEDICA SCHEME OF THE APPELLANT WHICH WAS DEMOLISHED AND ON THE SAME LAND THE PRESENT SCHEME OF VEDICA EXOTICA IS BEING LAUNCHED BY THE APPELLANT AND THE RE CEIPT IN THE SEIZED PAPER DENOTES THE CASH RECEIVED BY THE APPELLANT AGAINST THE BOOKING OF VA RIOUS UNITS (FLATS/BUNGLOWS), THE PAYMENTS OF RS.139,78,000 IS EITHER AN ALLOWABLE EX PENDITURE OR ALTERNATIVELY, IS AN ALLOWABLE BUSINESS LOSS. IN FACT, THE PAY MENT HAS BEEN MADE BY THE APPELLANT TO THE PERSONS HAVING THE RIGHT, IN THE FLATS BOOKED BY THEM IN T HE-SCHEME OF ROYAL VEDICA. HOWEVER, THE SCHEME COULD NOT BE COMPLETED AND HAD TO BE DEMOL ISHED BECAUSE A TP ROAD WAS TO PASS THROUGH THIS SCHEME. AS MENTIONED EARL IER, THE GENUINENESS OF THE EXPENSES CANNOT BE DOUBTED IN THE PRESENT CASE IF THE GENUINENESS OF THE INCOME SHOWN IN THE SAME SEIZED PAPER HAS NOT BEEN DOUBTED BY THE AO. FURTHER, THE EXPENSES ARE NOT PROHIBITED BY LAW. THERE IS A NEXUS BETWEEN THE EXPE NDITURE INCURRED BY THE APPELLANT AND RUNNING OF THE INCOME FROM BOOKING OF FLATS IN VEDIC A EXOTICA SCHEME. THEREFORE, THE AO IS DIRECTED TO ALLOW THE EXPENDITURE OF RS.139,70,000 UNDER THIS CATEGORY. 10. FROM GOING THROUGH THE FINDINGS LD. COMMISSIONE R OF INCOME TAX (APPEALS) AND ON PERUSAL OF OTHER DETAILS FILED BEF ORE THE LOWER AUTHORITIES ,WE OBSERVE THAT DISCLOSER WAS MADE ON THE BASIS OF SEIZED LOOSE PAPERS. IT IS NOT DISPUTED THAT ALL THESE DETAILS OF AMOUNT OF RS . 1,39,78,000/- PAID FOR VACATING THE RIGHT DUE TO SCRAPING OF ROYAL VEDICA SCHEME, WERE ALSO ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 8 AVAILABLE IN THE SEIZED MATERIALS. IT IS WELL ESTAB LISHED PRINCIPAL THAT IF AN INCOME HAS TO BE CALCULATED ON THE BASIS OF SEIZED MATERIALS, THEN EACH AND EVERY SEIZED DOCUMENT HAS ITS RELEVANCE AND THE ASS ESSING AUTHORITY HAS TO COMPUTE THE INCOME ACCORDINGLY ON THE BASIS OF THIS SEIZED MATERIAL. IN THE PRESENT CASE ALSO WHEN THE GROSS RECEIPT FROM VEDIC A EXOTICA SCHEME HAS BEEN CONSIDERED THEN IN THE GIVEN FACT THAT PREVIO USLY THERE WAS A ROYAL VEDICA SCHEME WHICH WAS DEMOLISHED, THEN THE ASSESS EE CERTAINLY HAD TO PAY THE AMOUNT TO THE UNIT HOLDERS OF THE OLD SCHEME TO GET A FREE POSSESSION. SUCH EXPENDITURE ARE HAVING A CLEAR NEXUS WITH THE REVENUE EARNED AND THEREFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF EXPENDITURE OF RS. 1,39,78,000/- AS AN ALL OWABLE EXPENDITURE AND ALSO ALTERNATIVELY AN ALLOWABLE BUSINESS LOSS. WE T HEREFORE FIND NO INFIRMITY IN THE VIEW TAKEN BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS). THESE GROUNDS OF THE REVENUES ARE DISMISSED. 11. NOW WE WILL DEAL WITH GROUND 5 RAISED BY THE RE VENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) P ARTLY DELETING THE ADDITION OF RS. 16,10,000/- ON ACCOUNT OF ON MONEY PAYMENT FOR PURCHASE OF PLOT AT VEDICA-1 AND VEDICA-2. LD. COUNSEL REITERAT ED THE SUBMISSIONS MADE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF LOWER AUTHORI TIES. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS PLACED BEFORE US. THE ISSUE IN THIS GROUND RELATES TO DELE TION OF ADDITION OF RS. 16,10,000/- ON ACCOUNT OF ON PAYMENT FOR PURCHASE O F PLOT IN VEDICA-1 AND VEDICA-2. WE FIND THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS ASSESSEE PREPARED DETAILS ON THE BASIS OF SEIZED PAPERS RELA TING TO AMOUNTS PAID TO ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 9 VARIOUS PERSONS FOR PAYMENT OF ON MONEY ON REPUR CHASE OF PLOTS OF VEDICA-1 SCHEME. 13. FROM GOING THROUGH THIS CHART PLACED ON PAGE 20 AND 21OF THE ASSESSMENT ORDER, WE FIND THAT THERE WERE NINE PART IES TO WHOM TOTAL SUM OF RS. 1,86,34,000/- WAS PAID. OUT OF THESE THE PAYMEN TS MADE TO FOUR PERSONS TOTALING TO RS. 87,64,000/- ASSESSEE FURNISHED THE DETAILS ALONG WITH PAN AND LD. ASSESSING OFFICER WAS SATISFIED WITH THE SAME. AS REGARDS REMAINING AMOUNT OF RS. 98,70,000/-. LD. ASSESSING OFFICER WA S NOT CONVINCED AND HE MADE ADDITION OF RS. 98,70,000/-. DURING THE APPELL ATE PROCEEDINGS, LD. COMMISSIONER OF INCOME TAX (APPEALS) ADOPTED THE SA ME VIEW THAT EXPENSES INCURRED TOWARDS A PARTICULAR SCHEME APPEA RING IN THE SEIZED MATERIAL SHOULD BE ALLOWED AS EXPENDITURE/OUTFLOW A GAINST THE REVENUE OF SUCH PROJECT. GROSS RECEIPT OF RS. 7.20 CRORE IS FR OM VEDICA-1 & 2 SCHEME. ON PERUSAL OF DETAILS LD. COMMISSIONER OF INCOME TA X (APPEALS) OBSERVED THAT RS. 82,60,000/- PAID TO SIX PERSONS WAS RELATI NG TO ON MONEY PAID ON PURCHASE OF LAND OF SOME OTHER SCHEMES WHICH WERE N OT LAUNCHED DURING THE FINANCIAL YEAR 2008-09 AND THIS LAND WAS SHOWN AS S TOCK IN TRADE IN THE BOOKS. LD. COMMISSIONER OF INCOME TAX (APPEALS) THE REFORE DID NOT ALLOW THE CLAIM OF EXPENDITURE OF RS. 82,60,000/-. FURTHE R WITH REGARD TO THE REMAINING TWO PERSONS NAMELY SURESH RAWAL RS. 6,00 ,000/- AND MAHAVIR SINGH SHEKHAVAT RS. 10,10,000/- LD. COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THESE AMOUNT AS AN EXPENDITURE AGAINST THE GROSS RECEIPTS FROM THE SCHEME. LD. ASSESSING OFFICER DID NOT ALLOW THIS DU RING THE ASSESSMENT PROCEEDINGS BECAUSE ASSESSEE HAD ONLY SUBMITTED NAM E AND ADDRESS BUT NO PAN WAS MADE AVAILABLE. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 10 14. WE FURTHER OBSERVED THAT LD. COMMISSIONER OF IN COME TAX (APPEALS) DELETED THIS ADDITION OF RS. 16,10,000/- BY OBSERV ING AS FOLLOWS:- 8. B. EXPENSES OF RS. 186,34,000 ON ACCOUNT OF ON MONEY PAYMENT FO R THE PURCHASE OF VEDICA-1 AND VEDICA -2 PLOTS. THE NATURE OF EXPENSES AND THE DETAILS R EGARDING SUCH EXPENSES AS FURNISHED BY THE APPELLANT BEFORE THE AO WAS AS UNDER: 8.1 . AS HELD BY ME EARLIER THAT THE GENUINENESS OF THE EXPENSES CANNOT BE DOUBTED BY THE AO IN THE PRESENT CASE. WHAT THE AO HAS TO SEE WHETHER THE EXPENDITUR ES INCURRED FOR THE PURCHASE OF LAND IS RELATABLE TO EARNING OF THE INCOME OF THE PROJECT OF VEDI CA EXOTICA. IF THE EXPENSES ARE RELATABLE TO EARNING OF THE INCOME OF THIS PROJECT, THEN THE EXPE NDITURE IS ALLOWABLE. IF HOWEVER, THE EXPENDITURE INCURRED ON THE REPURCHASE OF LAND IS NOT PERTAINING TO THE VEDICA EXOT ICA PROJECT, THEN SUCH EXPENDITURE IS NOT AN ALLOWABLE EXPENDITURE. THE AR WAS THER EFORE ASKED TO STATE AS TO FOR WHICH PROJECT THE LAND HAS BEEN ACQUIRED BY THE APPELLANT. THE APPELLANT VIDE ITS LETTER DATED 21/9/2011 STATED AS UNDER; 'PAYMENTS MADE FOR PURCHASE OF LAND AMOUNTING TO RS.1,86,34,000/- AS EXPLAINED EARLIER, ASSESSEE HAS CLAIMED EXPENDITURE IN 3 PARTS AND ONE PART RELATES TO PAYMENT OF ON-MONEY TO PURCHASE THE LAND AMOUNTING TO RS.1,86,34,000/-. IN OUR EARLIER SUBMISSION DATED 5.9.2011, WE HAVE ATTACHED CHART PROVIDING COMPLETE INFORMATION ABOUT THE PERSON S TO WHOM THESE PAYMENTS ARE MADE AND NARRATION INCLUDES PAYMENTS RELATE TO WHI CH LAND. FROM THE INFORMATION SUBMITTED EARLIER AND ONCE AGAIN ATTACHED HEREWITH, IT IS C LEAR THAT PAYMENT FOR LAND CAN FURTHER BE SUB-DIVIDED AS THESE PAYMENTS ARE MADE FOR PURCHASE OF TWO D IFFERENT LANDS. AS CLEARLY EVIDENT FROM THE ATTACHED SHEETS, PAYMENT TO 3 PERSONS MENTIONED BELOW IS FOR PURCHASE OF PLOT (VEDICA-1) ON WHICH ROYAL VEDICA SCHEME WAS LAUNCHED . ENTRY NO. NAME AMOUNT (RS.) NATURE OF PAYMENT 58/31 SURESH RAWAL 600000/- AMOUNT PAID TO FOR ON MONEY ON REPURCHASE OF PLOTS OF VEDOCA-1 SCHEME 57/2 MAHAVIR SINGH SHEKHAVAT 1010000/- AMOUNT PAID TO FOR ON MONEY ON REPURCHASE OF PLOTS OF VEDICA-1 SCHEME 57/7 RAMESH JAJU 8764000 AMOUNT PAID TO FOR ON MONEY ON REPURCHASE OF PLOTS OF VEDICA-1 SCHEME TOTAL 1,03,74,000/- SUBSEQUENTLY, THIS ROYAL VEDICA SCHEME WAS SCRAPPED AND'ON THE SAME LAND, VEDIC A EXOTICA AND-E-SERIES WERE LAUNCHED. IN NUTSHELL; PAYMENT OF RS.1,03,74,000/- IS FOR THE PIECE OF LAND ON WHICH SCHEME IS IN OPERATION. OUT OF ABOVE, RS.87.64 LAKH S ARE ALREADY ALLOWED BY THE AO -ON AGREEMENT BY THE RECIPIENT ABOUT RECE IPT OF MONEY AND .OFFER THE SAME AMOUNT FOR THE PURPOSE OF TAX. PAYMENT FOR THE SECOND LAND IS GIVEN TO 6 PERSONS ENUMERATED BELOW. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 11 ENTRY NO. NAME AMOUNT (RS.) NATURE OF PAYMENT 56/23 RAJU PATEL V-69 2830000 ON MONEY PAID ON REPURCHASE OF PLOTS 56/27 PRASHANT PANDYA V-69 2310000 ON MONEY PAID ON REPURCHASE OF PLOTS 56/28 KALIDAS PATEL V-69 1000000 ON MONEY PAID ON REPURCHASE OF PLOTS 56/29 RAJU PARASAVNATH V-69 610000 ON MONEY PAID ON REPURCHASE OF PLOTS 56/30 ALKESH FATHER V- 69 500000 ON MONEY PAID ON REPURCHASE OF PLOTS 56/31 HIMANSU PATEL V- 69 1010000 ON MONEY PAID ON REPURCHASE OF PLOTS TOTAL 82,60,000/- THESE PAYMENTS ARE FOR THE PURCHASE OF LAND ON WHICH NO SCHEME WAS LAUNCHED AT THE END OF THE FINANCIAL YEAR AND THIS LAND IS SHOWN AS STOCK IN TRADE IN THE BOOKS OF THE ASSESSEE. THUS, PAYMENT FOR THIS LAND AMOUNTING TO RS.82.60 LAKHS IS FOR L AND WHERE ACTUAL CONSTRUCTION ACTIVITY HAS NOT STARTED DURING THE RELEVANT PREVIOUS YEAR. IN ANY SITUATION, HOWEVER, WE ARE OF THE VIEW THAT PAYMENTS ARE MAD E FOR THE PURPOSE OF BUSINESS AND HENCE SHOULD BE ALLOWED AGAINST UNDISCLOSED INCOME.' 8.1 I DO NOT ACCEPT THE CONTENTION OF THE APPELLANT THAT ALL THE EXPE NSES APPEARING IN THE SEIZED DOCUMENTS ARE ALLOWABLE EXPENDITURE. THE APPELLANT HIMSEL F HAS ADMITTED THAT AN AMOUNT OF RS.82,60,000 HAS BEEN SPENT BY HIM TOWARDS THE PURCHASE OF LAND FOR V 69 SC HEME. SINCE THE APPELLANT IS IN THE BUSINESS OF PURCHASE OF LAND, CONSTRUCTION OF FLATS, T HE ON MONEY PAID ON PURCHASE OF PLOTS WILL GO TO INCREASE THE WORK IN PROGRESS OR T HE CLOSING STOCK OF THE PROJECT CONSTRUCTED ON V 69 SCHEME. THIS CANNOT BE ALLOWED AS AN EXPENDITURE INCURR ED FOR. EARNING THE INCOME FROM VEDICA EXOTICA SCHEME.'IN THE BOOKS OF ACCOUNTS, THE APPELLANT HAS INCLUDE D ONLY THE CHEQUE PORTION PAID FOR -PURCHASE OF LAND IN V 69. SCHEME AND NOT THE CASH COMPONENT PAID BY THE APPELLANT AS ON MONEY. THEREFORE, THE AMOUNT OF RS.82,60,000 WILL 'BE INCLUDED IN T HE COST OF THE LAND OF V 69 SCHEME AND SINCE, THE PROJECT HAS NOT BEEN STARTED DURING THE YE AR UNDER CONSIDERATION, THE SAME AMOUNT WILL BE INCLUDED IN THE CLOSING STOCK OF THE LAND. IN OTHER WORD S, IN THE YEAR UNDER CONSIDERATION, THE AMOUNT OF RS.82,60,000 IS NOT AN ALLOWABLE EX PENDITURE AGAINST THE INCOME OF VEDICA EXOTICA SCHEME, HOWEVER, THE SAME WILL HAVE T O BE INCLUDED IN THE CLOSING STOCK OF THE LAND OF V 69 SCHEME. THE APPELLANT WOULD BE ENTITLED TO THE BENEFIT OF R S.82.60 LACS AS OPENING STOCK OF THE V 69 LAND IN THE AY 2010-11. IN SHORT, THE ADDITION OF RS.82,60,000 ONLY IS CONFIRMED AND THE BALANCE ADDITION IS DIRECTED TO BE DELETED. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 12 15. IN VIEW OF THE ABOVE FINDINGS OF LD. COMMISSION ER OF INCOME TAX (APPEALS) AND OUR DISCUSSION IN PRECEDING PARAGRAPH S, WE ARE OF THE CONFIRM VIEW THAT ASSESSEE IS ELIGIBLE TO CLAIM EXPENSES OF A PARTICULAR SCHEME AGAINST THE REVENUE RECEIPT FROM THAT SCHEME WHICH ALL TOGE THER ARE APPEARING IN THE SEIZED MATERIAL. RS. 16,10,000/- IS UNDOUBTEDLY PAI D TOWARDS ON MONEY FOR PURCHASE OF FLAT OF VEDICA-1 SCHEME AND THEREFORE L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY ALLOWED IT AS AN E XPENDITURE. WE THEREFORE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF LD . COMMISSIONER OF INCOME TAX (APPEALS) AND WE DISMISS THE REVENUES GROUND. 16. NOW WE WILL DEAL WITH GROUND NO. 6 RELATING TO EXPENSES OF RS. 61,13,986/- WHICH WERE DISALLOWED BY THE ASSESSING OFFICER FOR WANT OF PROPER EVIDENCE BUT ALLOWED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY OBSERVING THEM AS A REVENUE EXPENDITUR E. LD. COUNSEL SUPPORTED THE FINDINGS OF LD. COMMISSIONER OF INCOM E TAX (APPEALS) AND LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF ASSESSING AUTHORITY. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS PLACED BEFORE US. ISSUE IN THIS APPEAL RELATES TO THE DETA ILS OF EXPENSES OF RS. 1,16,63,986/- INCURRED TOWARDS INTEREST, COMMISSIO N, SALARY, LABOUR CHARGES, BUILDING MATERIAL, TRAVELLING , STAMP DUTY ETC. WHI CH WERE PREPARED BY THE ASSESSEE FROM SEIZED MATERIAL DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSEE WAS ABLE TO SATISFY THE GENUINENESS OF EXP ENDITURE OF RS. 55,50,000/- AND FOR THE REMAINING AMOUNT ASSESSEE C OULD NOT PRODUCE ANY EVIDENCE IN ORDER TO PROVE THE GENUINENESS OF THE E XPENDITURE. IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) A GENERAL PERCEPTION WAS APPLIED TREATING THE TYPE OF EXPENDITURE MENTIO NED IN THE DETAILS AS REVENUE IN NATURE AND LD. COMMISSIONER OF INCOME TA X (APPEALS) DIRECTED ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 13 THE ASSESSING OFFICER TO ALLOW THE EXPENDITURE OF R S. 61,13,986/-/- OBSERVING AS FOLLOWS:- 9.1 UNDER THIS CATEGORY THE APPELLANT WAS ABLE TO PRODUCE THE CONFIRMATI ONS IN RESPECT OF THE EXPENDITURE OF RS.38 LACS (FROM TEJASBHAI), RS.15 LAKH FROM APOORVABHAI AND RS.2.5 LACS FROM TUSHARBHAI. THE AO THEREFORE ALLOWED THE EXPENDITURE OF RS.55.5 LACS AND MADE THE ADDITION OF THE BALANCE AMOUNT OF RS 61,13,986. FROM THE DE TAILS AS APPEARING IN THE ASSESSMENT ORDER, IT -IS CLEAR THAT THE EXPENSES I NCURRED BY THE APPELLANT ARE IN THE NATURE OF SALARY, COMMISSION, INTEREST, ADVOCATE FEES ETC . WHICH ARE REVENUE EXPENDITURE IN NATURE AND THEREFORE THE SAME .ARE ALLOWABLE. FURTHER, T HESE EXPENSES DO NOT APPEAR TO BE PROHIBITED BY LAW AS PER THE PROVISO TO SECTION 37(1) OF T HE INCOME-TAX ACT. FURTHER SINCE, DURING THE YEAR UNDER CONSIDERATION ONLY THE SCHEME OF VEDICA EXOTICA WAS IN OPERATION AND THE OTHER PROJECT HAD NOT STARTED, THE EXPENSES A PPEARING ON THE SEIZED PAPERS ARE RELATABLE TO EARNING OF THE INCOME FROM THE VE DICA EXOTICA SCHEME. THE AO IS THEREFORE DIRECTED TO ALLOW THE BALANCE AMOUNT OF RS.61,13,986. 18. WE FURTHER NOTICE FROM THE DETAILS OF EXPENDITU RE PLACED ON PAGE 18-22 OF THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS) , THAT THEY ARE IN THE NATURE OF NORMAL BUSINESS EXPENDITURE EXCEPT FEW FO R EXAMPLE STAMP DUTY OF RS. 10,04,500/- BUILDING MATERIAL EXPENDITURE FOR P URCHASE OF BRICKS WHICH ARE NOT CLEARLY EVIDENT THAT THEY WILL FORM PART O F STOCK IN TRADE IN THE VALUE OF PROJECT OR ALLOWED IN THE VERY SAME YEAR. FURTHE R WE NOTICE THAT SEARCH WAS CONDUCTED ON 29.08.2008 WHICH WAS JUST BEFORE THE D UE DATE OF FILING THE INCOME TAX RETURN BY THE ASSESSEE. ASSESSEE HAS PLA CED COPY OF AUDITED FINANCIAL STATEMENTS FROM PAGE 8 TO 25 OF THE PAPER BOOK WHICH INCLUDES DETAILS OF ASSETS LIABILITY REVENUE AND EXPENDITURE . IN THE COMPUTATION OF INCOME ASSESSEE HAS SHOWN A NET UNDISCLOSED INCOME, AS A RESULT OF SEARCH AT RS. 2,68,35,000/- WHICH IS THE NET FIGURE OF GROSS REVENUE LESS EXPENDITURE CLAIMED AS PER THE SEIZED MATERIAL. 19. FROM GOING THROUGH THE PROCEEDINGS AT BOTH THE LOWER AUTHORITIES, WE FIND THAT THERE ARE NO DETAILS ON RECORD TO SHOW TH AT THE EXPENSES SHOWN IN WORKING SHEET OF TOTAL EXPENSES OF RS. 61,13,986/- WHICH HAVE BEEN DISALLOWED BY THE LD. ASSESSING OFFICER, AS TO WHET HER ALL THESE EXPENSES ARE ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 14 OUT OF BOOKS OR FEW OF THEM ARE FORMING OF THE REGU LAR BOOKS OF ACCOUNTS. THE REASON FOR THIS IS THAT THE NATURE OF EXPENSES SHOWN IN THE WORKING SHEET BEFORE THE ASSESSING OFFICER INCLUDES EXPENSES INCU RRED ON SALARY, ADVERTISEMENT, BRICKS PURCHASE ARCHITECT FE ES, GENERAL CONSTRUCTION EXPENSES, TRAVELLING EXPENSES ETC. IT IS QUITE POSS IBLE THAT SOME OF THESE EXPENSES HAVE BEEN CLAIMED IN THE REGULAR BOOKS OF ACCOUNTS AND SOME MAY NOT HAVE BEEN CLAIMED. IF THE ASSESSEE HAS ALREADY CLAIMED SOME OF THESE EXPENSES IN HIS REGULAR BOOKS OF ACCOUNTS THEN IT W ILL TANTAMOUNT TO DOUBLE CLAIM OF EXPENDITURE. 20. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTAN CES OF THE CASE ARE OF THE CONSIDERED OPINION THAT FOR LIMITED PURPOSE IS SUE NEEDS TO BE RESTORED TO THE FILE OF ASSESSING OFFICER AND DIRECT THE ASSESS EE TO PROVIDE ALL NECESSARY INFORMATION TO PROVE THAT EXPENDITURE OF RS. 61,13, 986/- HAS NOT BEEN CLAIMED IN THE REGULAR BOOKS OF ACCOUNTS. THOSE EXP ENSES WHICH HAVE NOT BEEN CLAIMED IN THE BOOKS OF ACCOUNT THEN THE ASSES SEE WOULD BE ELIGIBLE TO CLAIM THEM AS EXPENDITURE AGAINST THE GROSS REVENUE DISCLOSED DURING THE COURSE OF SEARCH AND THE REMAINING WILL BE DISALLOW ED. WE ACCORDINGLY ALLOW THE REVENUES GROUND FOR STATISTICAL PURPOSES. 21. NOW WE WILL DEAL WITH GROUND NO. 7 RAISED BY TH E REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) M ENTIONING THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE EXAMINED THE ADMISSIBILITY OF THE EXPENSES IN TERMS OF SECTION 4 0A(3) AND SECTION 40(A)(IA) OF THE ACT. LD COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS ISSUE WAS NEVER TAKEN BY THE LD. ASSESSING OFFICER DURING THE ASSES SMENT PROCEEDINGS AND NEITHER LD. COMMISSIONER OF INCOME TAX (APPEALS) RE FERRED TO THE APPLICATION OF PROVISION OF SECTION 40A(3) & 40(A)( IA) ON VARIOUS EXPENSES OF ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 15 RS. 61,13,986/- EMANATING OUT OF THE SEIZED MATERIA L. LD. COUNSEL RAISED OBJECTION AGAINST THE ADMISSIBILITY OF THIS NEW GRO UND BY THE REVENUE. 22. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT REVENUE CAN RAISE A LEGAL GROUND AT ANY STAGE. THE EXPENSES REFERRED IN THE SHEET PRODUCED BEFORE THE ASSESSING OFFICER INCLUDE D EXPENSES OF REVENUE NATURE AND IF THE ASSESSEE WANTS TO GET DEDUCTION O F THIS EXPENDITURE THEN THESE EXPENSES WILL HAVE TO PASS THROUGH THE PROVIS ION OF SECTION 40A(3) OF THE ACT AND 40(A)(IA) OF THE ACT WITH REGARD TO THE PAYMENT IN CASH EXCEEDING RS. 20,000/- AS WELL AS NON DEDUCTION OF TDS ON VAR IOUS PAYMENTS RESPECTIVELY. HOWEVER BOTH THE LOWER AUTHORITIES HA VE FAILED TO ADJUDICATE THE ISSUES RAISED IN THIS GROUND WITH THIS ASPECT. IN S UPPORT OF THESE CONTENTIONS. LD. DEPARTMENTAL REPRESENTATIVE REFERRED TO FOLLOWI NG JUDGEMENT:- (I) CIT VS. HYNOUP FOOD & OIL IND. (P) LTD. 150 TAX MAN 194(2007)(GUJ.) (II) CIT VS. SAI METAL WORKS 2011 TAXMAN.COM 61(201 1) PUNJAB & HARYANA (III) M.G. PICTURE (MADRAS) LTD. VS. ACIT 57 TAXM AN.COM 66(2015)(SC). 23. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND GONE THROUGH THE DECISIONS RELIED UPO N BY REVENUE. REVENUE HAS RAISED THIS ADDITIONAL GROUND ALLEGING THAT LD. CIT (A) OUGHT TO HAVE EXAMINED THE APPLICABILITY OF THE PROVISION OF SECT ION 40A(3) OF THE ACT FOR PAYMENT OF EXCEEDING RS. 20,000/- IN CASH OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE/DRAFT AND THE PROVISION OF SECTION 40(A)(IA) OF THE ACT FOR THOSE ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 16 EXPENSES ON WHICH TAX AT SOURCE WAS REQUIRED TO BE DEDUCTED HAS EITHER NOT BEEN DEDUCTED OR DEDUCTED BUT NOT PAID WITHIN THE S TATUTORY TIME LIMIT. 24. FROM THE PERUSAL OF THE ASSESSMENT ORDER WE NOT ICE THAT WITH REGARD TO THE CLAIM OF EXPENDITURE OF RS. 61,13,986/- LD. AO HAS DENIED THE CLAIM OF EXPENDITURE BECAUSE THE ASSESSEE FAILED TO DISCHARG E THE VERY BASIC ONUS OF ESTABLISHING THE IDENTITY OF THE PAYEE FOR CLAIM OF EXPENDITURE AND ALSO IT WAS NOT CLEAR ABOUT THE PURPOSE OF PAYMENT AS TO WHETHE R THEY ARE REVENUE OR CAPITAL IN NATURE. AT ANY STAGE DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O HAS NOT SHOWN ANY INTENTION TO INVOKE PROVI SION OF SECTION 40A(3) AND 40(A)(IA) OF THE ACT. EVEN BEFORE LD. CIT(A) TH IS ISSUE NEVER CAME UP. IT CERTAINLY MEANS THAT NO OPPORTUNITY WAS AVAILABLE W ITH THE ASSESSEE TO FURNISH THE NECESSARY SUPPORTING EVIDENCE ON THE NON-ADMIS SIBILITY OF EXPENDITURE OF RS. 61,31,986/- DUE TO PROVISION OF SECTION 40A(3) OF THE ACT AND 40(A)(IA) OF THE ACT. REVENUE HAS RAISED THIS GROUND AFRESH AND IT IS ALSO NOT DISPUTED ON THEIR PART THAT THIS ISSUE OF APPLICABILITY OF 40A( 3) AND 40A(IA) HAS NEVER BEEN TAKEN UP BY BOTH THE LOWER AUTHORITIES. 25. DURING THE COURSE OF HEARING LD. D.R HAS REFERR ED AND RELIED ON THREE JUDGMENTS BUT GOING THROUGH THE SAME WE FIND THAT A S FACTS ARE DIFFERENT AND THEY ARE NOT APPLICABLE ON THIS ISSUE RAISED IN THI S GROUND. WE OBSERVE THAT IN THE CASE OF CIT VS. HYNOUP FOOD & OIL IND. (P) LTD. (SUPRA) PROVISION U/S. 40A(3) OF THE ACT WERE INVOKED AT THE ASSESSMENT PR OCEEDINGS LEVEL ITSELF. SIMILARLY IN THE CASE OF CIT VS. SAI METAL WORKS (S UPRA) ALSO DISALLOWANCE U/S. 40A(3) OF THE ACT WAS MADE BY THE LD. A.O WHER EAS IN THE CASE OF M.G. PICTURE (MADRAS) LTD. VS. ACIT (SUPRA) ALSO LD. A.O DISALLOWED THE EXPENDITURE WHERE THE PAYMENTS WERE MADE IN CASH O F RS. 10,000/- RELATING ON 40A(3) AS IT STOOD PRIOR TO 1996.IN ALL THESE TH REE JUDGMENTS RELIED BY THE ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 17 REVENUE THE ISSUE OF SECTION 40A(3) WELL EXISTED AT THE ASSESSMENT PROCEEDINGS LEVEL ITSELF WHICH IS NOT THE CASE IN T HE APPEAL BEFORE US. BECAUSE LD. A.O HAS NOT MADE ANY MENTION/DISALLOWANCE U/S. 40A(3) AND 40(A)(IA). THEREFORE ADMITTING THIS NEW GROUND OF THE REVENUE WILL TENTAMOUNT TO NOT PROVIDING ANY OPPORTUNITY OF HEARING TO THE ASSESS EE AGAINST THE APPLICATION OF THIS PROVISION U/S. 40A(3) AND 40(A)(IA) OF THE ACT. 26. FURTHER AS REGARDS WHETHER THE TRIBUNAL CAN AD MIT SUCH NEW GROUND AT THE REQUEST OF REVENUE, WHICH HAS NOT BEEN RAISED B EFORE BOTH THE LOWER AUTHORITIES, WE FIND IT PERTINENT TO REPRODUCE THE RELEVANT FINDINGS OF ITAT IN THE CASE OF SLOCUM INVESTMENT (P.) LTD. V. DY. C IT (DELHI), 106 ITR 05 ADJUDICATING SIMILAR TYPE OF ISSUE, MADE FOLLOWING OBSERVATIONS:- 180. THE UNIFORM VIEW OF COURTS ON THIS ISSUE HAS BEEN THAT FACTS .:ESSARY FOR ADJUDICATION OF A NEW PLEA SHOULD ALREADY BE AVAILABLE ON RECORD. THE ONLY OTHER DECISION RELIED UPON BY THE LEARNED COUNSEL FOR THE REVENUE IS THE DECISION OF THE FULL BENCH OF T HE HON'BLE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY CO. (SUPRA). THE C OURT AFTER REFERRING TO SEVERAL JUDICIAL PRONOUNCEMENTS ON THE SUBJECT HELD THAT THE APPELLATE TRIBUNAL HAS JURISDICTION TO PERMIT ADDITIONAL GROUNDS TO BE RAISED BEFORE IT EVEN THOUGH THESE MAY NOT ARISE FROM THE ORDER OF THE APPELL ATE ASSISTANT COMMISSIONER, SO LONG AS THESE GROUNDS ARE IN RESPECT OF THE SUBJECT-MATTE R OF THE ENTIRE TAX PROCEEDINGS. THE HIGH COURT HAS NOT SAID ANYTHING ABOUT THE EXISTENCE OF THE FACTS NECESSARY FOR ADJUDICATION OF THE ADDITIONAL OR A NEW GROUND. THE PREPONDERANCE OF JUDICIAL OPINION IS THAT THE FACTS NECESSARY FOR ADJUDICATION OF A NEW GROUND SHOULD ALREADY BE ALREADY BE AVAILABLE ON RECORD. IN THE PRESENT CASE FACTS WITH REGARD TO APPLICABILITY OF SECTION 93 ARE NOT AVAILABLE ON RECORD. AN ORDER OF REMAND FOR FINDING FACTS WITH REGARD TO APPLICABILITY OF THE PROV ISIONS OF SECTION 93 CANNOT ALSO BE PERMITTED AS THE SAME WOULD BE A MERE FISHING INQUIRY HOPING TO SUSTAIN THE ACTION OF THE REVENUE AUTHORITIES FOR BRINGING TO TAX INC OME IN THE HANDS OF THE ASSESSEE. THE SAME CANNOT BE PERMITTED, AS ADOPTING SUCH A COURSE WOULD CAUSE CONSIDERABLE HARASSMENT, HARDSHIP AND EXPENDITURE TO THE ASSESSEE AND THE SAME CANNOT BE PERMITTED ON THE MERE POSSIBILITY OR HOPE THAT SOME FACTS MAY EMERGE THE ACTION OF THE REVENUE AUTHORITIES CAN BE SUST AINED. MOREOVER, WE SHOULD NOT FORGET THE FACT THAT WE ARE DEALING ASSESSMENT UNDER ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 18 CHAPTER XIV-B OF THE ACT, UNDER WHICH DETERMINATION OF UNDISCLOSED INCOME SHOULD BE MADE ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SEARCH. 181. WE ARE ALSO OF THE VIEW WHERE AN ASSESSEE SEEKS TO PUT FORTH A NEW PLEA BEFORE TRIBUNAL WITHOUT FACTS NECESSARY FOR ADJUDICATION OF APPEAL BEING AVAILABL E ON RECORD IN ALLOWING SUCH PLEA, THE APPROACH OF THE TRIBUNAL SHOULD BE DIFFERENT FOR THE FOLLOWING REASONS: (A) AN ASSESSEE HAS NO OTHER AVENUE AND IF ON THE FACTS AND IN LAW IF ULTIMATEL Y IT IS FOUND THAT THE ASSESSEE IS NOT LIABLE TO TAX THE REVENUE CANNOT HAVE GRIEVANCE. AFTER ALL, ARTICLE 265 OF THE CONSTITUTION OF INDIA PROVIDES T HAT NO TAX SHALL BE LEVIED AND COLLECTED EXCEPT BY AUTHORITY OF LAW. IF ULTI MATELY THE ASSESSEE IS FOUND TO BE LIABLE TO TAX, HE COMPENSATES THE REVENUE IN THE FORM OF INTEREST. THEREFORE, THE TRIBUNAL CAN EVEN THINK OF A REMAND OF THE C ASE FOR A FINDING ON FACTS OR CAN ADJUDICATE ON FACTS ITSELF. (B) ON THE OTHER HAND THE REVENUE HAS OTHER OPTIONS OPEN TO IT UNDER THE ACT. IF THE ORDER OF AN ASSESSING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE THE SAME CAN BE REVISED BY THE CIT UNDER SECTION 263 OF THE ACT. IF INCOME CHARGEABLE TO TAX ESCAPES ASSESSMENT, PROCEEDINGS UNDER SECTION 147 CAN BE INITIATED TO BRING TO TAX SUCH ESCAPED INCOME. IN AN APPEAL BY AN ASSESSEE AGAINST THE ORDER OF THE ASSESSING OFFICER, THE COMMISS IONER OF INCOME TAX (A) HAS POWER OF ENHANCEMENT UNDER SECTION 251(1) OF THE ACT. (C) THE REVENUE DOES NOT HAVE A RIGHT OF APPEAL AGAINST THE ORDER OF THE ASSESS ING OFFICER. THEREFORE, IF ASSESSING OFFICER DOES NOT INVOKE SECTION 93, AND IF THE SAME WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE SAM E COULD BE REVISED BY THE CIT UNDER SECTION 263. (D) THE ASSESSING OFFICER CANNOT PLEAD BEFORE CIT(A) IN AN APPEAL BY THE AS SESSEE TO INVOKE SECTION 93. IN A CASE IN WHICH SECTION 93 IS NOT INVOKED BY COMMISSIONER OF INCOME-TAX (APPEALS) ALSO, THE REVENUE CANNOT SEEK TO SUSTAIN THE ORDER OF THE ASSESSING OFFICER BY INVOKING SECTION 93. THE REVENUE'S RIGHT OF APPEAL BEFORE THE TRIBUNAL SHOULD THEREFORE, BE HELD TO BE LIMITED ONLY TO RESTORING THE ASSESSMENT AS DONE BY THE ASSESSING OF FICER AND ON THE SAME BASIS. (E) AN ASSESSEE AGGRIEVED BY AN ASSESSMENT OF INCOME IN HIS HANDS HAS THE RIGHT TO APPEAL TO CIT(A) AND THEREAFTER TO THE TRIBUNAL. BY SEEKING TO RAISE AN ISSUE BEFORE THE TRIBUNAL FOR THE FIRST TIME, THE RIGHT OF APPEAL BEFORE C 1T(A) ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 19 PROVIDED TO AN ASSESSEE BECOMES REDUNDANT AND DEPRIVES THE ASSESSEE THE BENEFIT OF ADJUDICATION BY ONE OF THE APPELLATE AUTHORITY. 182. IN THE LIGHT OF THE VIEW, WHICH WE HAVE TAKEN ABOVE, WE DO NOT THINK IT APPROPRIATE TO DEAL WITH THE APPLICABILITY OF SECTION 93 TO THE TRANSACTIONS IN QUESTION. BUT WE ARE OF THE VIEW THAT THE VERY BASIS OF THE ARGUMENTS PUT FORTH BY ID. DR ON THE BASIS OF THE SEIZED DOCUMENTS CANNOT ALSO BE SUSTAINED. ADM ITTEDLY ALL THE SEIZED DOCUMENTS WITH REFERENCE TO THE TRANSACTION OF SALE OF SHARES TO VSIPL(M) DO NOT SPEAK FOR THEMSELVES. THE COMPLAINT OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE DID NOT CO-OPERATE IN FURNISHING THE REQUIRED INFORMATION C ALLED FOR BY HIM. THE ASSESSING OFFICER THEREAFTER DREW INFERENCES FR OM THESE SEIZED DOCUMENTS WITHOUT ANY BASIS. THE ID. DR SUBMITTED BEFORE US THAT IN VIEW OF THE NON-CO-OPERATION OF THE ASSESSEE ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. WE ARE OF THE VIEW THAT SUCH AN ARGUMENT CANNOT BE ACCEPTED. THE ASSESSING OFFICER IS EMPOWERED UNDER THE VARIOUS PROVISIONS OF THE A CT TO ISSUE SUMMONS FOR EXAMINATION OF A PERSON. HE HAS THE POWERS OF A CIVIL COURT AS AR E VESTED UNDER THE CODE OF CIVIL PROCEDURE WHEN TRYING A SUIT REGARDING DIS COVERY AND INSPECTION, COMPELLING PRODUCTION OF BOOKS, ISSUING COMMISSIONS AND ENFORCING ATTENDANCE OF ANY PERSON. THESE POWERS ARE MEANT TO ENSURE INVESTI - GATION REGARDING EXISTENCE OR NON-EXISTENCE OF A FACT. WITHOUT EXHAUSTING THOS E REMEDIES THE REVENUE CANNOT BE HEARD TO SAY THAT THERE WAS A LACK OF C O-OPERATION ON THE PART OF THE ASSESSEE. IN THIS CONNECTION, WE ALSO WISH TO ADD THAT T HE DOCUMENTS FOUND AT THE TIME OF SEARCH ITSELF DID NOT THROW ANY LIGHT ON THE CONCLUSIONS ARRIVED AT BY THE ASSESSING OFFICER. APART FROM THE ABOVE, THE BASIC PREMISE OF THE ASSESSING OFFICER WAS THAT FUNDS FOR PURCHASE OF SHAR ES BY VSIPL(M) HAD BEEN ARRANGED FROM INDIA AND IN THIS CONNECTION THE ASSESSING OFFICER HAD PLACED RELIANCE ON DOCUMENTS A 1 P.6 PAGE 23 AND AL P6 P.30. THE FIRST DOCUMENT IS DATED 25-9-1998 AND THE SECOND DOCUMENT IS TAKEN 10-10-1998. THE TRANSACTION OF SALE OF SHARES HAVE HOWEVER TAKEN PLACE IN THE MONTH OF SEPTEMBER, 1998. IN THE SEIZED DOCUMENT DATED 25-9-1998 THERE IS NOTHING TO INDICATE THE INVOLVEMENT OF THE ASSESSEE OR THE TWO OTHER COMPANIES I N ARRANGING FOR FUNDS TO M/S. VSIPL (M). THE SECOND DOCUMENT ALSO REFERS TO DISBURSE MENT OF FUNDS BY AND NOT TO ANY FLOW OF FUNDS TO VSIPL(M). THEREFORE, THE BASIC ASSUMPTION OF THE ID. DR THAT THERE WAS AN OUTFLOW OF FUNDS FROM INDIA FROM THE ASSESSEE AND THE TWO OTHER COMPANIES OF VSIPL(M) WHICH WAS USED FOR PURCHASING OF SHARE IS FOUND TO BE NOT CORRECT. IN THE CIRCUMSTANCES, WE ARE DOUBTFUL AS TO HOW THE PROVISIONS OF SECTION 93 COULD BE INVOKED BY REVENUE. WE DO NOT WISH TO DELVE FURTHER ON THIS ISSUE FOR THE REASON THAT WE HAVE ALREADY HELD THAT THIS NEW PLEA SHOULD NOT BE PERMITTED TO BE RAISED BY THE REVENUE FOR THE FIRST TIME BEFORE THE TRIBUNAL. FOR THE REASONS STATED ABOVE, WE ARE OF THE VIEW THAT THE CIT(A ) WAS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER AND CONSEQUENTLY HIS ORDER IS CONFIRMED AND THIS GROUND OF APPEAL BY THE REVENUE IS DISMISSED. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 20 27. FROM GOING THROUGH THE FINDINGS OF HONBLE DELH I HIGH COURT AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE A RE OF THE CONSIDERED OPINION THAT THIS NEW PLEA OF THE REVENUE FOR EXAMI NING THE IMPLICATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND 40( A)(IA) OF THE ACT, ON EXPENDITURE OF RS. 61,13,986/- CANNOT BE ADMITTED B Y THE TRIBUNAL FOR THE FIRST TIME. WE THEREFORE REJECT THE ADMISSIBILITY O F THIS GROUND BY THE REVENUE. 28. GROUND NO. 8 AND 9 ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 29. NOW WE WILL TAKE UP ASSESSEES CROSS OBJECTION NO. 33/A/2012 RAISING FOLLOWING GROUNDS:- 1. THE LD: CIT(A)-III, AHMEDABAD HAS ERRED IN LAW AND FACTS BY CONFIRMING THE ADDITIONAL RS.82,60,000/-PAID FOR PURCHASE OF LAND FOR VEDICA 69 SCHEME BY HOLDING THAT FOR THEI UNDER CONSIDERATION, EXPENDITURE IS NOT ALLOWABLE AGAINST THE INCOME OF OTHER SCHEME NAMELY VEDICA EXOTICA. 2. RESPONDENT HAS DECLARED TOTAL RS.3,52,85,000/- AS NET UNDISCLOSED INCOME WHILE FILING THE RETURN. KEEPING IN MIND THE GROSS PROFIT RATIO OF CONSTRUCTION INDUSTRY, RESPONDENT IS OF THE VIEW THAT THE SAME SHOULD BE ACCEPTED WITHOUT GOING INTO THE DETAILS OF ALLOWABFLILV OF EXPENDITURE. 3. RESPONDENT HAS IGNORED THE REGULAR ACCOUNTING POLICY OF RECOGNISATION OF REVENUE WHICH IS PERCENTAGE OF COMPLETION METHOD AND OFFERED NET UNDISCLOSED INCOME WHICH SHOULD BE ACCEPTED IN TOTAL, 4. THE ASSESSEE CRAVES THE LIBERTY TO ADD OR DELETE ANY GROUNDS OF C ROSS OBJECTIONS. 30. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE HAS REQUESTED FOR NOT PRESSING THE GROUNDS RAISED IN THE CROSS OBJECTION. WE THEREFORE DISMISS THE GROUNDS RAISED IN CROSS OBJECTION FILED BY THE ASSE SSEE BEING NOT PRESSED. ITA.NO.647 /AHD/2011 ASSESSMENT YEAR 2009-10 - 21 31. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE AR E DISMISSED. ORDER PRONOUNCED IN THE COURT ON 26 TH MAY, 2017 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD ( MANISH BOARD) ACCOUNTANT MEMBER DATED, 26 /05/2017 MUKUL ! '!/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &$% / THE RESPONDENT. 3. '(( ) * / CONCERNED CIT 4. ) * ( ) / THE CIT(A)- 5. !-. , , /DR,ITAT, AHMEDABAD. 6. .0 12 / GUARD FILE. ) ' / BY ORDER, ' (3 (ASSTT.REGISTRAR) ITAT, AHMEDABAD