DCIT, CENTRAL CIRCLE-2, FARIDABAD V. PEAKWOOD REALITY PVT.LTD., GURGAON

ITA 89/DEL/2023

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which deleted an addition of Rs. 62,89,71,086 made by the Assessing Officer as unexplained investment in the hands of M/s Peakwood Reality Pvt. Ltd. The Revenue contended that a similar addition had been confirmed in the case of M/s M3M India Holdings, and thus, the CIT(A)'s decision to delete the addition in the case of M/s Peakwood Reality was erroneous. The Tribunal noted that the Revenue itself had taken a position that the addition should be sustained in the hands of M3M Holdings, and thus, found the appeal to be untenable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471387 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: M/s M3M India Holdings vs. Dy. CIT, M/s Peakwood Reality Pvt. Ltd. vs. Dy. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.A. DHYANI
• Assessee Lawyers: GAUTAM JAIN VIRTUALLY PRESENT
• Keywords: Unexplained investment; Search and seizure
• Section: 132; 153A; 153C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 89/Del/2023 Assessment Year: 2012-13 Dy. CIT Central Circle-II, New CGO Complex, Block- ‘B’, 3rd floor, NH-IV, Faridabad, Haryana-121001. Vs. M/s Peakwood Reality Pvt. Ltd., Shop No. 6, 2nd floor, Jagdamba Palace, Near Gurgaon Dreamz Mall, Old Railway Road, Gurgaon-122001. PAN NO. AACCE 1245 J Appellant Respondent Assessee by : Mr. Gautam Jain (Virtually Present) Mr. Parth Singhal (Physically Present) Revenue by : Mr. R.A. Dhyani, CIT-DR Date of Hearing : 25/11/2024 Date of pronouncement : 30/01/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 26.10.2022 passed by the Ld. Commissioner of Income-tax (Appeals) – Gurgaon [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds: 1. Whether Ld. CIT (A) has erred in deleting the 62,89,71,086/ holding that quantum addition on this issue has already been confirmed in the hands of M/s M3M India Holdings whereas both entities are different for the Income Tax purpose? 2. Whether the Ld. CIT (A) has erred in deleting the aforesaid addition by holding that same addition has already been confirmed in the hands of M/s M3M India Holdings in view of the fact that the addition sustained by Ld. CIT (A) in the case M/s M3M India Holdings was deleted by Ld. ITAT vide its order passed in ITA No. 1120/Del/2022 dated 23.09.2022? 2. Briefly stated facts of the case are that the assessee company was earlier known as share holding of the company wa and Family members Rs.16,39,08,750/- to M/s Royal Crown Projects Pvt. Ltd. and in this manner, the Ro company of the assessee company. The acquire two companies namely (KMPL) and M/s “Goodfaith Builders Pvt. Ltd. (GBPL) companies had a land Gurugram. For the purpose of acquisition of said land of 430 acres, the M3M India Holdings transferred initial amount of Rs.175 crores to M/s Innovative Realtech Pvt. Ltd. fund to M/s Royal Crown Project Pvt. Ltd., f crores was transferred to M/s Peakwood Realty Pvt. Ltd. (i.e. the assessee). The Peakwood Realty Pvt. Ltd. acquired the share holding of those two companies namely KMPL and GBPL on 22.02.2012 for a total consideration of Rs.198 crores i.e. after five days f M/s Peakwood Reality Pvt. Ltd. 1. Whether Ld. CIT (A) has erred in deleting the addition of Rs. 62,89,71,086/- made on account of unexplained investment by holding that quantum addition on this issue has already been confirmed in the hands of M/s M3M India Holdings whereas both entities are different for the Income Tax purpose? ther the Ld. CIT (A) has erred in deleting the aforesaid addition by holding that same addition has already been confirmed in the hands of M/s M3M India Holdings in view of the fact that the addition sustained by Ld. CIT (A) in the case M/s M3M India ngs was deleted by Ld. ITAT vide its order passed in ITA No. 1120/Del/2022 dated 23.09.2022? Briefly stated facts of the case are that the assessee company was earlier known as “Ess Gee Shelter Pvt. Ltd”. At that time t share holding of the company was with Mr Suresh Amritlal members but they sold their stake for an amount of to M/s Royal Crown Projects Pvt. Ltd. and in this manner, the Royal Crown Project Pvt. Ltd. beca company of the assessee company. The M3M group wanted to acquire two companies namely M/s ‘Kenwood Mercantile Pvt. Ltd Goodfaith Builders Pvt. Ltd. (GBPL) companies had a land pool measuring 430 acres at Man For the purpose of acquisition of said land of 430 acres, M3M India Holdings transferred initial amount of Rs.175 crores to M/s Innovative Realtech Pvt. Ltd., who in turn transferred said Royal Crown Project Pvt. Ltd., from where rores was transferred to M/s Peakwood Realty Pvt. Ltd. (i.e. the assessee). The Peakwood Realty Pvt. Ltd. acquired the share holding of those two companies namely KMPL and GBPL on 22.02.2012 for a total consideration of Rs.198 crores i.e. after five days f M/s Peakwood Reality Pvt. Ltd. 2 ITA No. 89/Del/2023 addition of Rs. made on account of unexplained investment by holding that quantum addition on this issue has already been confirmed in the hands of M/s M3M India Holdings whereas both ther the Ld. CIT (A) has erred in deleting the aforesaid addition by holding that same addition has already been confirmed in the hands of M/s M3M India Holdings in view of the fact that the addition sustained by Ld. CIT (A) in the case M/s M3M India ngs was deleted by Ld. ITAT vide its order passed in ITA No. Briefly stated facts of the case are that the assessee company At that time the Mr Suresh Amritlal Gandhi sold their stake for an amount of to M/s Royal Crown Projects Pvt. Ltd. and in yal Crown Project Pvt. Ltd. became holding M3M group wanted to Kenwood Mercantile Pvt. Ltd”. Goodfaith Builders Pvt. Ltd. (GBPL) as those two pool measuring 430 acres at Manger, For the purpose of acquisition of said land of 430 acres, M3M India Holdings transferred initial amount of Rs.175 crores who in turn transferred said rom where, Rs.136 rores was transferred to M/s Peakwood Realty Pvt. Ltd. (i.e. the assessee). The Peakwood Realty Pvt. Ltd. acquired the share holding of those two companies namely KMPL and GBPL on 22.02.2012 for a total consideration of Rs.198 crores i.e. after five days from the transfer of the shares of M/s Peakwood Realty Pvt. Ltd. by Gandhi Family to M/s Royal Crown Project Pvt. Ltd. 2.1 A search and seizure action u/s 132 and survey action u/s 133A of the Income- out at the premises of In view of certain incriminating material belonging to/pertaining to the assessee found in the course of the searches at the Group, action u/s 153C of the Act for issue of notice was taken after due compliance of the procedure laid down under the provisions of the Act. In the satisfaction note recorded by the Assessing Officer of the searched person as well as Assessing Officer of the assessee laptop found at the main office premises of the Said laptop was stated and admitted to belonging to Ms. who was Chartered Accountant of the group to 21 of Annexure A-5 seized from the office premises of the Group at Nariman Point, showed additional consideration of Rs. respect of alleged transaction of acquisition of the shares of Kenwood Mercantile Pvt. Ltd. and Goodfaith Builders Pvt. Lt Ess Gee Shelters Pvt. Ltd. (now known as Peakwood Realty Pvt. Ltd.). Accordingly, the Assessing Officer in the assessment completed u/s 153C of the Act on 29.12.2017 added the Rs.62,89,71,086/- as unexplained investment. On further appeal, M/s Peakwood Reality Pvt. Ltd. of the shares of M/s Peakwood Realty Pvt. Ltd. by Gandhi Family to M/s Royal Crown Project Pvt. Ltd. A search and seizure action u/s 132 and survey action u/s -tax Act, 1961 (in short ‘the Act’) were carried e premises of M/s Ess Gee group of cases on 17.06.2015. In view of certain incriminating material belonging to/pertaining to the assessee found in the course of the searches at the ction u/s 153C of the Act for issue of notice was taken er due compliance of the procedure laid down under the of the Act. In the satisfaction note recorded by the Assessing Officer of the searched person as well as Assessing Officer of the assessee, it is noted that data was extracted from the p found at the main office premises of the ‘Ess Gee aid laptop was stated and admitted to belonging to Ms. who was Chartered Accountant of the group and relation 5 seized from the office premises of the Group at Nariman Point, Ms. Bina Shah stated that said document showed additional consideration of Rs.62,89,71,086/ respect of alleged transaction of acquisition of the shares of Kenwood Mercantile Pvt. Ltd. and Goodfaith Builders Pvt. Lt Ess Gee Shelters Pvt. Ltd. (now known as Peakwood Realty Pvt. Ltd.). Accordingly, the Assessing Officer in the assessment completed u/s 153C of the Act on 29.12.2017 added the as unexplained investment. On further appeal, M/s Peakwood Reality Pvt. Ltd. 3 ITA No. 89/Del/2023 of the shares of M/s Peakwood Realty Pvt. Ltd. by Gandhi A search and seizure action u/s 132 and survey action u/s tax Act, 1961 (in short ‘the Act’) were carried group of cases on 17.06.2015. In view of certain incriminating material belonging to/pertaining to the assessee found in the course of the searches at the Ess Gee ction u/s 153C of the Act for issue of notice was taken er due compliance of the procedure laid down under the of the Act. In the satisfaction note recorded by the Assessing Officer of the searched person as well as Assessing it is noted that data was extracted from the Ess Gee Group’ . aid laptop was stated and admitted to belonging to Ms. Bina Shah relation to page 16 5 seized from the office premises of the Ess Gee Shah stated that said document 62,89,71,086/- in cash in respect of alleged transaction of acquisition of the shares of Kenwood Mercantile Pvt. Ltd. and Goodfaith Builders Pvt. Ltd by Ess Gee Shelters Pvt. Ltd. (now known as Peakwood Realty Pvt. Ltd.). Accordingly, the Assessing Officer in the assessment completed u/s 153C of the Act on 29.12.2017 added the sum of as unexplained investment. On further appeal, the Ld. CIT(A) deleted the addition on the ground that addition for the said amount of Rs.62,89,55,192/ Assessing Officer in the case of confirmed by the Ld. First Appellate Authority in the case of M3M Holdings. Aggrieved, the Revenue is in appeal before the Tribunal by way of raising grounds as reproduced above. 3.We have heard the rival submissions advanced by the learned counsel for the parties and have carefully perused the material available on record. The main issue in the present appeal pertains to the addition of ₹62,89,71,086/ the assessee as unexplained investment but was subsequently deleted by the Learned Commissioner of Income Tax (Appeals) [CIT(A)]. The Revenue, being aggrieved by the said deletion, has preferred the present ap Representative (DR) has contended that a similar addition made in the case of M3M Holdings was deleted by the Income Tax Appellate Tribunal (ITAT) on the ground that the transaction in question pertained to the assessee. On t for the assessee has drawn our attention to the submissions made by the Revenue before the Hon’ble Punjab & Haryana High Court in the appeal concerning M3M India Holdings. It has been submitted that the Revenue’s own stan ITAT had erred in holding that the addition ought not to have been made in the hands of M3M Holdings. The Revenue had asserted M/s Peakwood Reality Pvt. Ltd. Ld. CIT(A) deleted the addition on the ground that addition for the said amount of Rs.62,89,55,192/- was already made by the Assessing Officer in the case of M/s M3M Holdings and which was confirmed by the Ld. First Appellate Authority in the case of M3M Holdings. Aggrieved, the Revenue is in appeal before the Tribunal by way of raising grounds as reproduced above. We have heard the rival submissions advanced by the learned counsel for the parties and have carefully perused the material The main issue in the present appeal pertains 62,89,71,086/-, which was made in the hands of the assessee as unexplained investment but was subsequently deleted by the Learned Commissioner of Income Tax (Appeals) [CIT(A)]. The Revenue, being aggrieved by the said deletion, has preferred the present appeal. The Learned Departmental Representative (DR) has contended that a similar addition made in the case of M3M Holdings was deleted by the Income Tax Appellate Tribunal (ITAT) on the ground that the transaction in question pertained to the assessee. On the other hand, the learned counsel for the assessee has drawn our attention to the submissions made by the Revenue before the Hon’ble Punjab & Haryana High Court in the appeal concerning M3M India Holdings. It has been submitted that the Revenue’s own stand before the High Court was that the ITAT had erred in holding that the addition ought not to have been made in the hands of M3M Holdings. The Revenue had asserted M/s Peakwood Reality Pvt. Ltd. 4 ITA No. 89/Del/2023 Ld. CIT(A) deleted the addition on the ground that addition for was already made by the M3M Holdings and which was confirmed by the Ld. First Appellate Authority in the case of M3M Holdings. Aggrieved, the Revenue is in appeal before the Tribunal by We have heard the rival submissions advanced by the learned counsel for the parties and have carefully perused the material The main issue in the present appeal pertains , which was made in the hands of the assessee as unexplained investment but was subsequently deleted by the Learned Commissioner of Income Tax (Appeals) [CIT(A)]. The Revenue, being aggrieved by the said deletion, has peal. The Learned Departmental Representative (DR) has contended that a similar addition made in the case of M3M Holdings was deleted by the Income Tax Appellate Tribunal (ITAT) on the ground that the transaction in question he other hand, the learned counsel for the assessee has drawn our attention to the submissions made by the Revenue before the Hon’ble Punjab & Haryana High Court in the appeal concerning M3M India Holdings. It has been submitted d before the High Court was that the ITAT had erred in holding that the addition ought not to have been made in the hands of M3M Holdings. The Revenue had asserted that, based on the search and post established that M/s M3M Holding question through conduit entities, comprising paper companies and non-existent firms. Thus, as per the Revenue’s stand, the addition was correctly made in the hands of M3M Holdings, the ultimate holding company of the assessee, w merely a paper conduit. In our considered opinion, when the Revenue has itself taken a position that the addition ought to be sustained in the hands of M3M Holdings, the filing of the present appeal, disputing the findings of t transaction belongs to M3M Holdings, appears to be untenable. Furthermore, we find that the Hon’ble Punjab & Haryana High Court, in its judgment dated 22.10.2024 in ITA No. 97 of 2023, recorded the Revenue’s submission that the acquisition of 430 acres of land was M3M India Holdings. However, in the case of M3M Holdings, the addition was deleted solely on the ground that such an addition could not have been made under the provisions of Section 153 1961, without invoking Section 153C in the case of M3M Holdings. In light of the above facts and the Revenue’s own contentions before the High Court, we find no justification for interfering with the well reasoned order of the CIT( present appeal stands dismissed. M/s Peakwood Reality Pvt. Ltd. that, based on the search and post-search inquiries, it was established that M/s M3M Holdings had acquired the land in question through conduit entities, comprising paper companies and existent firms. Thus, as per the Revenue’s stand, the addition was correctly made in the hands of M3M Holdings, the ultimate holding company of the assessee, while the assessee itself was merely a paper conduit. In our considered opinion, when the Revenue has itself taken a position that the addition ought to be sustained in the hands of M3M Holdings, the filing of the present appeal, disputing the findings of the CIT(A) on the ground that the transaction belongs to M3M Holdings, appears to be untenable. Furthermore, we find that the Hon’ble Punjab & Haryana High Court, in its judgment dated 22.10.2024 in ITA No. 97 of 2023, recorded the Revenue’s submission that the ultimate beneficiary of the acquisition of 430 acres of land was M3M India Holdings. However, in the case of M3M Holdings, the addition was deleted solely on the ground that such an addition could not have been made under the provisions of Section 153A of the Income Tax Act, 1961, without invoking Section 153C in the case of M3M Holdings. In light of the above facts and the Revenue’s own contentions before the High Court, we find no justification for interfering with the well reasoned order of the CIT(A). Accordingly, the ground raised in present appeal stands dismissed. M/s Peakwood Reality Pvt. Ltd. 5 ITA No. 89/Del/2023 search inquiries, it was s had acquired the land in question through conduit entities, comprising paper companies and existent firms. Thus, as per the Revenue’s stand, the addition was correctly made in the hands of M3M Holdings, the ultimate hile the assessee itself was merely a paper conduit. In our considered opinion, when the Revenue has itself taken a position that the addition ought to be sustained in the hands of M3M Holdings, the filing of the present he CIT(A) on the ground that the transaction belongs to M3M Holdings, appears to be untenable. Furthermore, we find that the Hon’ble Punjab & Haryana High Court, in its judgment dated 22.10.2024 in ITA No. 97 of 2023, the ultimate beneficiary of the acquisition of 430 acres of land was M3M India Holdings. However, in the case of M3M Holdings, the addition was deleted solely on the ground that such an addition could not have been A of the Income Tax Act, 1961, without invoking Section 153C in the case of M3M Holdings. In light of the above facts and the Revenue’s own contentions before the High Court, we find no justification for interfering with the well- ground raised in 3.1 Before us, the Ld. counsel for the assessee has filed an application under Rule 27 of the ITAT Rules, 1963 raising the following ground: \"27. Respondent may support order on grounds against him: The respondent, though he may not have appealed, may support the order appealed against on decided against him.\" 3.2 The Ld. counsel for the assessee submitted that under Rule 27 of the ITAT Rules the respondent ma decided against him. The Ld. counsel relied on the following decisions and submitted that ground raised by the assessee should be adjudicated:  83 ITR 223 (Bom) B.R.Bamsi vs. CIT)  129 ITR 475 (All) Moralia & Sons vs. CIT  220 ITR 3 Ltd  176 CTR 406 (Gau) Assam Company (I) Ltd vs. CIT  102 ITD 189 (Del) ITO vs. Gurvinder Kaur  284 ITR 80 (SC) CIT V. Varas International P.Ltd.  436 ITR 616 (Bombay) Peter Vaz vs CIT 3.3 However, we find that we have alrea raised by the Revenue on merit and therefore, the grounds raised by the assessee are rendered merely academic and therefore, we are not adjudicating upon at this stage. M/s Peakwood Reality Pvt. Ltd. Before us, the Ld. counsel for the assessee has filed an application under Rule 27 of the ITAT Rules, 1963 raising the \"27. Respondent may support order on grounds against him:- The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.\" The Ld. counsel for the assessee submitted that under Rule 27 of the ITAT Rules the respondent may support on the order may decided against him. The Ld. counsel relied on the following and submitted that ground raised by the assessee should 83 ITR 223 (Bom) B.R.Bamsi vs. CIT) 129 ITR 475 (All) Moralia & Sons vs. CIT 220 ITR 398 (Ker) CIT vs. Cochin Refinieries 176 CTR 406 (Gau) Assam Company (I) Ltd vs. 102 ITD 189 (Del) ITO vs. Gurvinder Kaur 284 ITR 80 (SC) CIT V. Varas International P.Ltd. 436 ITR 616 (Bombay) Peter Vaz vs CIT However, we find that we have already rejected the grounds raised by the Revenue on merit and therefore, the grounds raised by the assessee are rendered merely academic and therefore, we are not adjudicating upon at this stage. M/s Peakwood Reality Pvt. Ltd. 6 ITA No. 89/Del/2023 Before us, the Ld. counsel for the assessee has filed an application under Rule 27 of the ITAT Rules, 1963 raising the decided The respondent, though he may not have appealed, may any of the grounds The Ld. counsel for the assessee submitted that under Rule 27 y support on the order may decided against him. The Ld. counsel relied on the following and submitted that ground raised by the assessee should 129 ITR 475 (All) Moralia & Sons vs. CIT 98 (Ker) CIT vs. Cochin Refinieries 176 CTR 406 (Gau) Assam Company (I) Ltd vs. 102 ITD 189 (Del) ITO vs. Gurvinder Kaur 284 ITR 80 (SC) CIT V. Varas International dy rejected the grounds raised by the Revenue on merit and therefore, the grounds raised by the assessee are rendered merely academic and therefore, we are 4. In the result, the appeal of the Revenue is dismissed and the application under Rule 27 of the ITAT Rules of the assessee is also dismissed as infructuous. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 30/01/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Peakwood Reality Pvt. Ltd. In the result, the appeal of the Revenue is dismissed and the application under Rule 27 of the ITAT Rules of the assessee is also dismissed as infructuous. nounced in the open Court on 30/01/2025. SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Peakwood Reality Pvt. Ltd. 7 ITA No. 89/Del/2023 In the result, the appeal of the Revenue is dismissed and the application under Rule 27 of the ITAT Rules of the assessee is also /01/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "