Hysafe Investments Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-2(1)(3), Ahmedabad

ITA 1171/AHD/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2898 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 05-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S V AGRAWAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Additional evidence
• Section: 50C; 143(2); 147; 131; 68; 69

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1171/AHD/2016 / ASSTT. YEAR: 2012-2013 HYSAFE INVESTMENTS P.LTD. 1 ST FLOOR, MARUTI HOUSE NR.POPULAR HOUSE ASHRAM ROAD, AHMEDABAD. PAN : AAACH 3877 K VS. ITO, WARD-2(1)(3) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.V. AGRAWAL, AR REVENUE BY : SHRI VIRENDRA SINGH, SR.DR ! / DATE OF HEARING : 04/03/2019 '#$ ! / DATE OF PRONOUNCEMENT: 06 /03/2019 %& / O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-7, AHMEDABAD DATED 1.2.2016 PASSED FOR TH E ASSTT.YEAR 2012-13. 2. THOUGH THE ASSESSEE HAS TAKEN FOUR GROUNDS OF AP PEAL, WHICH CONTAINED SUB-GROUNDS ALSO, BUT GRIEVANCE OF THE ASSESSEE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) H AS ERRED IN CONFIRMING ADDITION OF RS.43,93,100/- WHICH WAS ADD ED BY THE AO WITH THE AID OF SECTION 69 OF THE INCOME TAX ACT ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT WHICH REMAINED U NEXPLAINED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 30.3.2013 DECLAR ING NIL INCOME. THIS RETURN WAS REVISED ON 24.9.2013 DECLARING LOSS OF (-) ITA NO.1171/AHD/2016 2 RS.22,955/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSU ED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOU NTS IT REVEALED TO THE AO THAT THE ASSESSEE WAS MAINTAINING A BANK ACCOUNT BEARING NO.980439892 WITH INDIAN BANK, ASHRAM ROAD, AHMEDABAD. IT HAS DEPOSITED A SUM OF RS.43,93,100/ - IN CASH DURING THE PERIOD 1.4.2011 TO 22.12.2011. BIFURCATI ON OF THIS AMOUNT HAS BEEN GIVEN IN THE SUBMISSIONS OF THE ASS ESSEE, WHICH HAS BEEN REPRODUCED BY THE LD.CIT(A) ON PAGE NO.4. IT CONTAINED DATE OF DEPOSITS AND EXACT AMOUNT DEPOSITED BY THE ASSESSEE. IT ALSO CONTAINED DEPOSITS IN THE NAMES OF DEPOSITORS. IN THE FIRST TWO TRANSACTIONS AMOUNTING TO RS.10,000/- AND RS.11 ,000/- IT WAS DISCLOSED THAT THESE AMOUNTS DEPOSITED OUT OF THE C ASH ON HAND. THE REST WERE ALLEGED TO HAVE BEEN DEPOSITED AFTER RECEIVING FROM M.B. INVESTMENT AND M.B. CORPORATION. THE LD.AO DIR ECTED THE ASSESSEE TO EXPLAIN THE NATURE OF TRANSACTION AND S OURCE OF DEPOSITS. IN RESPONSE TO THE QUERY OF THE AO, IT W AS CONTENDED BY THE ASSESSEE THAT THE COMPANY WANTED TO SELL SHARES OF HYNOOP FOOD & OIL INDUSTRIES TO M.B. INVESTMENT AND M.B. C ORPORATION. THEY HAVE PAID CASH OF RS.43,93,100/- IN ADVANCE AN D THE SAME WAS DEPOSITED IN THE BANK ACCOUNT WITH INDIAN BANK. M/S. HYNOOP FOOD & OIL INDUSTRIES WAS A SICK INDUSTRY DECLARED BY BIFR, AND THEREFORE, IT COULD NOT SELL THE SHARES. THE AMOUN T WAS REFUNDED TO M.B. INVESTMENTS AND M.B. CORPORATION. THE AO DI RECTED THE ASSESSEE TO SUBMIT ACCOUNTS OF M.B. CORPORATION AND M.V. INVESTMENTS; CONFIRMATION FROM THESE SOURCES SAYING THAT THEY HAVE SUFFICIENT CASH BALANCE, OUT OF WHICH SUCH DEP OSITS WERE MADE. THESE EVIDENCES COULD NOT BE SUBMITTED BY TH E ASSESSEE, HENCE, THE LD.AO TREATED THE DEPOSITS IN THE BANK A CCOUNT AS ITA NO.1171/AHD/2016 3 UNEXPLAINED INVESTMENT, AND MADE ADDITION UNDER SEC TION 69 OF THE ACT. DISSATISFIED WITH THE ASSESSMENT ORDER, T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.FIRST AP PELLATE AUTHORITY. ACCORDING TO THE ASSESSEE, IT HAS RAISE D ADDITIONAL GROUNDS OF APPEAL, VIDE WHICH IT HAS PLEADED THAT S ISTER CONCERN, HYTISUN MAGNETICS LTD. (HML FOR SHORT) SOLD PROPE RTY AT A PRICE BELOW GOVERNMENT JANTRI RATE AND DIFFERENCE OF MONEY WAS RECEIVED IN CASH WHICH WAS UTILIZED BY THE COMPANY FOR DEPOSITING IN ITS BANK ACCOUNT. FOR BUTTRESSING THIS ISSUE, T HE ASSESSEE COMPANY SOUGHT TO FILE ADDITIONAL EVIDENCE UNDER RU LE 46A OF THE INCOME TAX RULES, 1962. BASICALLY IT SOUGHT TO FILE COMPUTATION OF INCOME MADE IN THE CASE OF HML WHEREIN SALE CONSIDE RATION DISCLOSED IN THE SALE DEED AT RS.2,50,00,000/- WAS RECOGNIZED FOR THE PURPOSE OF SECTION 50C AT RS.7,58,79,556/-. T HE LD.CIT(A) HAS CONSIDERED THIS ISSUE, BUT DID NOT FIND MERIT I N THE CONTENTIONS OF THE ASSESSEE FOR ADMITTING ADDITIONAL EVIDENCE A S WELL AS FOR ENTERTAINING NEW PLEA. THE DISCUSSION MADE BY THE LD.CIT(A) READS AS UNDER: 5.2 DURING THE APPELLATE PROCEEDINGS, THE APPELLAN T SUBMITTED AN APPLICATION FOR ADMISSION OF ADDITIONA L EVIDENCE UNDER RULE 46A OF I. T. RULES. IT WAS SUBMITTED BY THE APPELLANT THAT THE IMPUGNED ADDITION MADE ON ACCOUN T OF CASH DEPOSITS IN THE APPELLANT'S ACCOUNT WAS FROM I TS SISTER CONCERN HYTISUN MAGNETICS LTD. (HML) WHICH HAD RECE IVED CASH ON SALE OF LAND AND BUILDING OWNED BY IT. IT W AS SUBMITTED BY THE APPELLANT THAT DOCUMENTS IN RESPEC T OF THIS TRANSACTION WAS NOT PRODUCED BEFORE THE AO SINCE HM L HAD CLOSED DOWN IN 1998 AND THE APPELLANT COULD NOT PRO CURE COPIES OF THE SAME. 5.2.1 CBDT FRAMED RULE 46A IN THE INCOME TAX RULES, 1962 W.E.F 1.4.1993. UNDER THE SAID RULE, CIT(A) WAS PER MITTED TO ADMIT FRESH EVIDENCE ONLY UNDER THE FOLLOWING CIRCU MSTANCES- ITA NO.1171/AHD/2016 4 (A) WHERE THE INCOME-TAX OFFICER HAS REFUSED T O ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFIC IENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE INCOME-TAX OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFI CIENT CAUSE FROM PRODUCING BEFORE THE INCOME-TAX OFFICER ANY EV IDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; (D) WHERE THE INCOME-TAX OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. 5.3 A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT TH E SUBMISSIONS THAT HAVE BEEN MADE NOW AND THAT THE EXPLANATION THAT IS BEING GIVEN FOR THE CASH DEPOSI TS ARE TOTALLY DIFFERENT FROM THOSE GIVEN DURING THE ASSES SMENT PROCEEDINGS. NOT ONCE DURING THE ASSESSMENT PROCEED INGS DID THE APPELLANT SUBMIT THAT THE AMOUNT OF CASH OF RS.43,93,100/- WAS RECEIVED FROM HML. I AM OF THE V IEW THAT THIS IS NOT ADDITIONAL EVIDENCE BUT IS A COMPL ETELY NEW SUBMISSION THAT THE APPELLANT IS MAKING NOW. THE RE ASON GIVEN .BY THE APPELLANT FOR NOT FURNISHING THIS EVI DENCE TO THE AO DURING ASSESSMENT PROCEEDINGS, I.E. BECAUSE HML HAD CLOSED DOWN, IS ALSO NOT ACCEPTABLE, AS FIRSTLY, IT IS FOR THE FIRST TIME DURING THE APPELLATE PROCEEDINGS THAT TH E APPELLANT HAS BROUGHT IN A REFERENCE TO HML. SECONDLY, HML IS SAID TO HAVE CLOSED DOWN IN 1998. IF DETAILS OF TRANSACTION MADE BY THAT COMPANY CAN BE PRODUCED AT APPELLATE STAGE, TH EY COULD HAVE BEEN PRODUCED BEFORE THE AO AS WELL ESPECIALLY SINCE THE SAID COMPANY IS A SISTER CONCERN OF THE APPELLA NT 5.3.1 CONSIDERING ALL THESE FACTS, I AM OF THE VIEW THAT THE SUBMISSIONS MADE BY THE APPELLANT AT APPELLATE STAG E DO NOT QUALIFY FOR ADMISSION UNDER RULE 46A. THE REQUEST F OR ADMISSION OF ADDITIONAL EVIDENCE IS REJECTED. 6. I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. THE AO MADE AN ADDITION OF RS.43,93,100/-TO THE APPELLANT'S TOTAL INCOME U/S. 69 OF THE IT. ACT AS UNEXPLAINED INVESTMENT, BECAUS E THE ITA NO.1171/AHD/2016 5 APPELLANT COULD NOT OFFER A SATISFACTORY EXPLANATIO N FOR THE DEPOSIT OF THIS AMOUNT IN ITS BANK ACCOUNT. IT WAS CLAIMED BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS THA T THIS AMOUNT HAD BEEN RECEIVED IN CASH FROM M.B. INVESTME NT AND M.B. CORPORATION AS ADVANCES RECEIVED BY THE SALE OF SHARES OF HYNOOP FOOD & OIL INDUSTRIES BY THE APPELLANT IT WAS SUBMITTED BY THE APPELLANT THEN THAT THIS DEAL DID NOT GO THROUGH AS HYNOOP FOOD & OIL INDUSTRIES WENT UNDER THE BIFR AND THEREFORE THIS AMOUNT WAS SUBSEQUENTLY REFU NDED TO M.B. INVESTMENT AND M.B. CORPORATION. THE AO DISMI SSED THE EXPLANATION OFFERED BY THE APPELLANT FOR THE FO LLOWING REASONS: [I] THE APPELLANT DID NOT PRODUCE ANY EVIDENCE TO PROVE THAT THIS AMOUNT HAD BEEN RECEIVED IN FACT FROM M.B . INVESTMENT AND M.B. CORPORATION, [II] NO CONFIRMATION OF THESE PARTIES WERE SUBMI TTED. [III] THE APPELLANT COULD NOT ESTABLISH THE IDE NTITY AND CREDIT-WORTHINESS OF THESE PARTIES; AND (IV) HYNOOP FOOD & OIL INDUSTRIES WAS UNDER B1FR SINCE 2000 AND WAS ALSO A SISTER CONCERN OF THE APPELLANT , HENCE THE EXPLANATION THAT THE SALE OF SHARES FELL THROUG H BECAUSE OF THE FACT THAT HYNOOP FOOD & OIL INDUSTRIES WENT UNDER THE BIFR WAS NOT LOGICAL OR ACCEPTABLE. 6.1 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT OFFERED A COMPLETELY DIFFERENT EXPLANATION FOR THE AMOUNT DEP OSITED IN ITS ACCOUNT. IT WAS STATED THAT THE CASH DEPOSITED IN THE BANK ACCOUNT WAS OUT OF CASH RECEIPTS FROM SISTER CONCER N HML , WHO RECEIVED CASH ON SALE OF LAND & BUILDING OWNED BY IT. THE SALE WAS MADE BY REGISTERED SALE DEED ON 16/03/ 201.2. THE SALE PRICE AS PER SALE DEED WAS RS. 2,50,00,000 WHEREAS, GOVERNMENT JANTRI SALE VALUE WAS RS. 7,58, 77,500. HML RECEIVED THE DIFFERENCE OF AMOUNT BETWEEN SALE PRICE AS PER SALE DEED AND GOVERNMENT JANTRI VALUE IE RS. 5,08,77,500 IN CASH. THE APPELLANT COMPANY RECEIVED CASH FROM ITS SISTER CONCERN HML WHICH WAS DEPOSITED IN ITS BANK ACCOUNT WITHOUT RECORDING THE SAME IN ITS BOOKS OF ACCOUNT EXCEPT TWO ENTRIES DATED 05/04/2011 [RS. 10,000) AN D 06/04/2011 [RS. 1,1000). THE CASH RECEIVED FROM HML WAS DEPOSITED IN THE BANK EITHER IN THE NAME OF M.B. INV ESTMENT OR IN THE NAME OF M.B. CORPORATION. THESE WERE PAPE R ITA NO.1171/AHD/2016 6 COMPANIES AND THEIR NAMES WERE ONLY UTILIZED FOR MA KING CASH DEPOSITS. 6.2 THE SUBMISSIONS MADE BY THE APPELLANT DURING TH E APPELLATE PROCEEDINGS ARE ALSO WITHOUT ANY DOCUMENT ARY EVIDENCES EXCEPT A COPY OF RETURN OF INCOME OF HML AND COPY OF THE SALE DEED. IT HAS ALREADY BEEN HELD EARLIER THAT THESE EVIDENCES CANNOT BE ACCEPTED AT THIS STAGE SINCE TH E APPELLANT IS TAKING A COMPLETELY DIFFERENT STAND FR OM THAT TAKEN DURING THE ASSESSMENT PROCEEDINGS. MOREOVER, THE APPELLANT'S CLAIM THAT THIS AMOUNT WAS RECEIVED BY THE APPELLANT THROUGH M.B. CORPORATION & M.B, INVESTMENT FROM HML IS ALSO NOT ESTABLISHED BY THE APPELLANT BY GIV ING ANY KIND OF CORROBORATIVE EVIDENCE IN THE FORM OF BANK STATEMENT, CONFIRMATIONS, ETC. IT HAS ALSO BEEN ADM ITTED BY THE APPELLANT THAT ALL THESE TRANSACTIONS WERE OUTS IDE THE BOOKS OF ACCOUNTS OF THE APPELLANT. LOOKING AT ALL THE FACTS AND THE SUBMISSIONS MADE BY THE APPELLANT, I AM OF THE VIEW THAT THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS.43,93,100/- U/S.69 OF THE I.T.ACT WAS JUSTIFI ED AND THE SAME IS CONFIRMED. GROUND OF APPEAL NO.1 IS ACCORD INGLY DISMISSED. 4. DISSATISFIED WITH ORDERS OF THE REVENUE AUTHORIT IES, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT AN APPLICATION FOR ADMISSION OF ADDITIONAL EVI DENCE BEFORE THE TRIBUNAL IS FILED BY THE ASSESSEE ON 22.6.2018. A COPY OF SUCH APPLICATION IS AVAILABLE ON PAGE NO.1 OF THE PAPER BOOK, WHICH READS AS UNDER: DATE : 18/06/2018 XXX XXX DEAR SIR, ITA NO.1171/AHD/2016 7 IN THIS CASE, APPELLANT COMPANY HAD DEPOSITED CASH IN ITS BANK A/C. DURING A.Y. 2012-13. THE SOURCE OF CA SH DEPOSIT IS RECEIPT FROM ITS SISTER CONCERN M/S. HYTAISUN MA GNETICS LTD. (HML). HML HAD SOLD ITS FACTORY LAND AND BUILD ING AND OUT OF CASH RECEIPT IT HAD GIVEN CASH TO APPELLANT COMPANY, WHICH IN TURN WAS DEPOSITED BY APPELLANT COMPANY IN ITS BANK A/C. THE ASSESSMENT OF HML FOR A.Y. 2012-13 WAS RE-OPENE D U/S. 147 AND DURING ASSESSMENT PROCEEDINGS THE STATEMENT OF CHAIRMAN AND MD (CMD) OF HML WAS RECORDED U/S. 131 OF ACT BY A.O. THE CMD HAD CONFIRMED THE CASH GIVEN TO APPELLANT COMPANY OUT OF RECEIPT ON SALE OF FACTORY LAND AND BUILDING. THEREAFTER, THE A.O. HAD COMPLETED THE AS SESSMENT BY ACCEPTING THE CONTENTIONS OF THE ASSESSEE COMPAN Y -HML. THE ADDITIONAL EVIDENCES COULD NOT BE FILED BEFORE HON. CIT(A) BECAUSE THE ORDER OF OT(A) IN CASE OF APPELL ANT (HYSAFE INV. PVT LTD.) WAS PASSED ON 01.02.2016 WHE REAS, THE ASSESSMENT OF HML U/S. 147 WAS PASSED ON 29.02. 2016. THE ADDITIONAL EVIDENCES FILED HEREWITH AS PER INDE X ARE IN CONNECTION WITH CASH GIVEN BY HML TO APPELLANT COMP ANY AND THEREFORE, THESE ADDITIONAL EVIDENCES HAVE DIRE CT NEXUS WITH THE APPEAL OF THE APPELLANT BEFORE HON. SMC BE NCH IN ITA NO. STATED ABOVE. THEREFORE, HON. ITAT BENCH SM C IS PRAYED TO ADMIT THE ADDITIONAL EVIDENCES AND CONSID ER THE SAME WHILE DECIDING THE APPEAL AND OBLIGE. THE REGISTRY IS REQUESTED TO PUT UP THE ADDITIONAL EVIDENCES BEFORE HON. SMC BENCH. THANKING YOU YOURS FAITHFULLY HYSAFE INVESTMENTS PVT. LTD. SD/- DIRECTOR 6. HE SUBMITTED THAT ADDITIONAL EVIDENCE I.E. COPY OF STATEMENT OF SHRI BHARATBHAI ATMARAM PATEL RECORDED ON 21.1.20 16 DURING THE ASSESSMENT PROCEEDINGS OF HML IS AN ESSENTIAL E VIDENCE FOR A ITA NO.1171/AHD/2016 8 JUST DECISION OF THE APPEAL, AND THEREFORE, IT BE T AKEN ON RECORD. HE FURTHER SUBMITTED THAT THE ASSESSMENT ORDER IN T HE CASE OF HML FOR THE ASSTT.YEAR 2012-13 IS ALSO AN ESSENTIAL DOC UMENT, AND FOR BUTTRESSING CONTENTIONS OF THE ASSESSEE ABOUT THE S OURCE OF MONEY, IT SHOULD BE TAKEN ON RECORD. HE POINTED OU T THAT IDENTICAL ISSUE CAME UP BEFORE THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.PRABHAVATI S. SHAH VS. CIT, 231 ITR 51. HE PLACED ON RECORD COPY OF THIS DECISION. HE POINTED OUT THAT IN THIS CASE, THOUGH THE ASSESSEE FAILED TO FULFILL THE CONDITION S ENUMERATED IN RULE 46A, BUT TAKEN COGNIZANCE OF RESIDUARY SUB-RUL E (4) OF RULE 46A. HONBLE HIGH COURT HAS OBSERVED THAT IN ORDER TO DO COMPLETE JUSTICE BETWEEN THE PARTIES, THE LD.CIT(A) OUGHT TO HAVE EXERCISED HIS POWERS, WHICH IS CO-TERMINUS WITH THE AO AND OUGHT TO HAVE TAKEN RELEVANT EVIDENCE ON RECORD. ON THE STRENGTH OF THIS DECISION, HE CONTENDED THAT EVEN IF THE ASSESS EE FAILED TO FULFILL PROCEDURAL REQUIREMENTS CONTEMPLATED IN SUB -RULE (1) TO (3) OF RULE 46A BEFORE THE LD.CIT(A), THEN ALSO THE LD. CIT(A) OUGHT TO HAVE ENTERTAINED THE EVIDENCE UNDER SUB-RULE (4). HE DREW MY ATTENTION TO RULE 29 OF THE INCOME TAX (APPELLATE T RIBUNAL) RULES, 1963 WHICH AUTHORISE THE TRIBUNAL TAKE ADDITIONAL E VIDENCE ON RECORD AND SUBMITTED THAT THOUGH THIS RULE STARTS A NON-OBSTANTE CLAUSE I.E. NOTWITHSTANDING AND PROVIDE THAT PART IES HAVE NO RIGHT TO SUBMIT ADDITIONAL EVIDENCE, BUT IF THE TRIBUNAL REQUIRES FOR A JUST DECISION IN ANY APPEAL, THEN IT CAN DIRECT THA T PARTY TO PRODUCE THAT EVIDENCE. HE EMPHASISED THAT THE TRIBUNAL SHO ULD EXERCISE THIS DISCRETION IN ORDER TO DO COMPLETE JUSTICE BET WEEN THE PARTIES. THEREAFTER, HE TOOK ME THROUGH THE STATEMENT OF SHR I ATMARAM PATEL DATED 21.1.2016 WHICH WAS RECORDED DURING THE ASSESSMENT PROCEEDINGS ON HML FOR THE ASSTT.YEAR 2012-13. HE DREW MY ITA NO.1171/AHD/2016 9 ATTENTION TOWARDS QUESTION AND ANSWER NO.5 AND SUBM ITTED THAT CMD OF HML HAS ADMITTED THAT ON SALE OF LAND CASH W AS RECEIVED. THIS CASH WAS GIVEN TO DIFFERENT COMPANIES. THEREF ORE, SOURCE OF CASH IN THE HANDS OF THE ASSESSEE WAS FROM HML. HE SUBMITTED THAT THIS EVIDENCE BE TAKEN ON RECORD, AND THEREAFT ER ISSUE BE REMITTED TO THE AO FOR RE-ADJUDICATION. 7. THE LD.DR ON THE OTHER HAND RELIED UPON THE ORDE R OF THE LD.CIT(A). HE POINTED OUT THAT HML HAS NOT ADMITTE D RECEIPT OF CASH IN ITS ASSESSMENT PROCEEDINGS. IT HAS NOT REC OGNIZED THE RECEIPT OF CASH ON SALE OF LAND IN THE RETURN FILED BY IT. WHEN THE ASSESSMENT WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED BY THE AO FROM AIR, HE INVOKED SECTION 50C WHICH PROVI DES THAT IF AN ASSESSEE SOLD A PROPERTY AND STAMP VALUATION AUTHOR ITY HAS VALUED THE PROPERTY FOR THE PURPOSE OF STAMP DUTY AT HIGHE R AMOUNT THAN THE ONE MENTIONED IN THE SALE DEED, THEN SUCH HIGHE R AMOUNT WILL BE DEEMED AS FULL VALUE OF SALE CONSIDERATION FOR T HE PURPOSE OF COMPUTING CAPITAL GAIN UNDER SECTION 48 OF THE INCO ME TAX ACT. ONCE THE STAMP DUTY VALUATION AUTHORITY HAVE VALUED THE AMOUNT AT RS.7,58,79,556/-, THERE WAS NO CHOICE WITH THE V ENDOR TO ACCEPT AS DEEMED SALE CONSIDERATION AND COMPUTE LON G TERM/SHORT TERM CAPITAL GAIN ON BASIS OF THAT DEEMED CONSIDERA TION. IN THE COMPUTATION FILED BEFORE THE AO, DURING THE ASSESSM ENT PROCEEDINGS ON 23.12.2015, NOWHERE THE ASSESSEE HAS RECOGINISED THAT CONSIDERATION WAS RECEIVED IN CASH. IT HAS JU ST COMPUTED LONG/SHORT TERM CAPITAL GAIN BY CONSIDERING DEEMING CONSIDERATION AS FULL VALUE OF THE CONSIDERATION FOR THE FIRST TIME, THIS THEORY OF RECEIPT OF CASH WAS DISCLOSED BY THE CMD OF HML DUR ING THIS STATEMENT ON 21.1.2016, BY THAT TIME ASSESSMENT IN THE CASE OF PRESENT ASSESSEE WAS ALREADY OVER. HE POINTED OUT THAT THIS ITA NO.1171/AHD/2016 10 THEORY HAS BEEN DEVELOPED WITH AN IDEA THAT; BECAUS E IN THE CASE OF HML THERE WAS NO CHOICE WITH THE ASSESSEE EXCEPT TO COMPUTE CAPITAL GAIN ON THE BASIS OF DEEMED SALE CONSIDERAT ION, HENCE THAT EXCESS CONSIDERATION SHOULD BE DISCLOSED IN SUCH A MANNER THAT WOULD GIVE SOME BENEFITS IN OTHER SISTER CONCERNS. SO FAR AS PRAYER OF THE ADMISSION OF ADDITIONAL EVIDENCE IS CONCERNED, HE CONTENDED THAT THIS WAS NOT CASE OF THE ASSESSEE BE FORE THE AO. THE ALLEGED CMD, SHRI ATMARAM PATEL HAPPENED TO BE DIRECTOR OF THE ASSESSEE-COMPANY. HOW, HE WAS NOT AWARE ABOUT T HESE FACTS, WHEN ASSESSMENT OF THIS ASSESSEE WAS GOING ON? AT THE FIRST INSTANCE, THIS FACT OUGHT TO HAVE BEEN DISCLOSED. IN THIS WAY, HE PRAYED THAT ORDER OF THE LD.CIT(A) BE UPHELD. 8. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. RETURN IN THE CASE OF THE ASSESS EE WAS FILED ON 30.3.2013 DECLARING NIL INCOME. IT WAS REVISED ON 24.9.2013 DECLARING A LOSS OF RS.22,958/-. WHEN THE FACT OF CASH DEPOSITS IN THE BANK ACCOUNT WAS CONFRONTED WITH THE ASSESSEE, THEN IN ITS REPLY VIDE ORDER DATED 28.1.2015 IT HAS NEVER DISCL OSED THAT MONEY WAS RECEIVED FROM HML. THE ASSESSMENT ORDER W AS PASSED ON 30.1.2015 BECAUSE THE ASSESSEE FAILED TO GIVE AN Y EXPLANATION ABOUT THE CASH DEPOSITED IN THE BANK ACCOUNT. INQU IRY IN THE CASE OF HML WAS STARTED ON 18.11.2014 WHEN 148-NOTICE WA S ISSUED. BY THAT TIME, THE ASSESSMENT ORDER OF THE ASSESSEE W AS NOT PASSED. THE ASSESSEE HAS NEVER COME WITH PLEA THAT CASH WAS RECEIVED FROM HML. THE ASSESSMENT ORDER OF HML WAS PASSED ON 29.2.2016. THE COMPUTATION OF LONG TERM CAPITAL GA IN ALONG WITH ITS SUBMISSIONS HAS BEEN FILED ON 23.12.2015. DURI NG THAT PERIOD APPELLATE PROCEEDINGS IN THE CASE OF THE ASSESSEE W ERE PENDING; BUT IN THE COMPUTATION IN THE CASE OF HML IT NOWHER E RECOGNIZED ITA NO.1171/AHD/2016 11 RECEIPT OF CASH. COPY OF THE ASSESSMENT ORDER IN T HE CASE OF HML IS AVAILABLE ON PAGE NO.8. I HAVE GONE THROUGH THI S ORDER. IT IS PERTINENT TO OBSERVE THAT SECTION 50C OF THE INCOME TAX ACT PROVIDES THAT IF AN ASSESSEE HAS SOLD LAND OR BUILD ING OR BOTH, AND PAID STAMP DUTY, THEN VALUE OF THE PROPERTY DETERMI NED FOR THE PURPOSE OF CHARGING STAMP DUTY WILL BE DEEMED AS FU LL SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. NOW THE PROPERTY WAS VALUED FOR THE PURPOSE OF STAMP DUTY A T RS.7,58,79,556/-. THERE WAS NO CHOICE WITH THE HML EXCEPT TO RECOGNIZE THIS AMOUNT AS SALE CONSIDERATION FOR THE PURPOSE OF LTG/STG. NOW THE QUESTION BEFORE ME IS, WHETHER IT WAS A BONA FIDE ERROR AT THE END OF THE ASSESSEE DURING THE ASSESS MENT PROCEEDINGS FOR NOT DISCLOSING THIS FACT OR IT WAS UNDER SOME STRATEGY OR MODUS OPERANDI . IT IS TO BE KEPT IN MIND THAT THE SALE CONSIDERATION OF THE LAND SOLD BY THE HML WAS ENHAN CED UNDER A DEEMING FICTION AND NOT NECESSARY THAT EQUAL AMOUNT SHOULD BE AVAILABLE WITH HML IN CASH OR IN KIND. IT IS ALSO TO BE KEPT IN MIND THAT ASSESSEE AS WELL AS HML ARE COMPANIES. ASSET BELONGS TO THE SHAREHOLDERS. UNDER WHAT CAPACITY HML AGREED FOR R ECEIPT IN CASH? THERE IS NO EXPLANATION AT THE END OF BOTH T HE ASSESSEE. HML HAS NOT RECOGNIZED IN ITS ASSESSMENT ORDER THAT IT HAS RECEIVED ANY CASH, RATHER, IT TOOK THE AMOUNT UNDER THE DEEMING FICTION PROVIDED UNDER SECTION 50C. AS FAR AS THE VERACITY OF THE STATEMENT GIVEN BY SHRI ATMARAM PATEL IS CONCERNED HE HAPPENED TO BE DIRECTOR OF THE ASSESSEE. WHAT PROHIBITED HI M TO GIVE CONFIRMATION AT THE FIRST INSTANCE ? IT IS A STATEM ENT GIVEN AFTER REALIZING THAT THERE IS NO OTHER WAY OUT EXCEPT REC OGNIZE SALE CONSIDERATION OF THE LAND EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID. THEREAFTER, HE GAVE THIS STAT EMENT. TO MY ITA NO.1171/AHD/2016 12 MIND, EVEN IF THE STATEMENT IS TAKEN ON RECORD FOR THE PURPOSE OF EVIDENCE, AND TREATED AS GOSPEL TRUTH, IT IS NOT SU FFICIENT TO EXPLAIN THE SOURCE OF CASH IN THE HANDS OF THE ASSESSEE. I T IS NOT SUFFICIENT TO FULFILL THE INGREDIENTS OF SECTION 68 I.E. GENUINENESS OF THE TRANSACTIONS, IDENTITY OF CREDITORS AND CREDIT- WORTHINESS. THE ASSESSEE HAS ALLEGED THAT CONTRIBUTION WAS MADE BY M.B. INVESTMENT AND M.B. CORPORATION. IF THEY ARE BEING REPLACED WITH HML THEN, HOW THE TRANSACTION WILL BE GENUINE ? HO W IDENTITY WILL BE PROVED ? AS FAR AS JUDGMENT OF HONBLE BOMBAY HI GH COURT IS CONCERNED, IT IS NOT APPLICABLE ON FACTS OF THE GIV EN CASE. I HAVE LOOKED INTO PRIMA FACIE ACCEPTABILITY OF THE EVIDENCE SOUGHT TO BE PRODUCED AS ADDITIONAL EVIDENCE. BUT EVEN IF THIS E VIDENCE IS TAKEN IN RECORD, IT WILL NOT TAKE THE CASE OF THE A SSESSEE ANY FURTHER, THEREFORE, I DO NOT DEEM IT NECESSARY TO A DMIT THIS EVIDENCE ON RECORD AND LINGER ON THE MATTER. EVEN IF THIS EVIDENCE IS TAKEN AS GOSPEL TRUTH, THEN IT IS NOT SUFFICIENT . THEREFORE, THE FACTS IN THE CASE OF SMT.PRABHAVATI S. SHAH (SUPRA) BEFORE THE HONBLE BOMBAY HIGH COURT ARE TOGETHER DIFFERENT THA N THE ONE BEFORE ME. 9. AFTER CONSIDERING THE RECORD AS WELL AS WELL REA SONED ORDER OF THE LD.CIT(A), I DO NOT FIND ANY MERIT IN THIS APPE AL OF THE ASSESSEE. IT IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 6 TH MARCH, 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 6/03/2019