M/s. Civitech Housing India (P) Ltd., Delhi V. ACIT, New Delhi

ITA 1237/DEL/2013

• Counselvise Citation: 123720114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-08-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 05-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Reason to believe
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .1237/DEL/2013 1237/DEL/2013 1237/DEL/2013 1237/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2010 2010 2010 2010- -- -11 1111 11 M/S CIVITECH HOUSING INDIA M/S CIVITECH HOUSING INDIA M/S CIVITECH HOUSING INDIA M/S CIVITECH HOUSING INDIA (P) LTD., (P) LTD., (P) LTD., (P) LTD., 65, SHRESTHA V 65, SHRESTHA V 65, SHRESTHA V 65, SHRESTHA VIHAR, IHAR, IHAR, IHAR, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : AABCC1465B. PAN : AABCC1465B. PAN : AABCC1465B. PAN : AABCC1465B. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -3, 3,3, 3, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKASH GARG, ADVOCATE. RESPONDENT BY : SMT. PARWINDER KAUR, SR.DR. ORDER ORDER ORDER ORDER PER PER PER PER G.D. AGRAWAL, VP G.D. AGRAWAL, VP G.D. AGRAWAL, VP G.D. AGRAWAL, VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-II, NEW DELHI DATED 4 TH FEBRUARY, 2013 FOR THE AY 2010- 11. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER:- THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FA CTS IN SUSTAINING THE ADDITION OF RS.8,16,767 ON ACCOUNT O F DISCREPANCY IN CASH BY HOLDING THE EXPLANATION OF T HE APPELLANT AS NOT RELIABLE. 3. THE FACTS OF THE CASE ARE THAT THERE WAS A SURVE Y UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 AT THE ASSESSEES BUSINESS PREMISES. DURING THE COURSE OF SURVEY, CASH OF ` 15,76,800/- WAS FOUND WHILE, AS PER ASSESSEES BOOKS OF ACCOUNT, CASH BALANCE WAS O NLY ` 1,86,124/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY I N THE CASH AT THE TIME OF SURVEY. THEN, IT WAS EXPLAINED THAT THE CA SH OF ` 5,73,909/- IS RELATING TO M/S CORPORATE REALTORS P.LTD. HOWEVER, REGARDING THE ITA-1237/D/2013 2 BALANCE CASH, NO SATISFACTORY EXPLANATION WAS GIVEN . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS CLAIMED BY THE ASSESSEE THAT THE SUM OF ` 8,50,000/- WAS RECEIVED AS ADVANCE AGAINST THE BOOK ING OF FLATS - THE SUM OF ` 6,00,000/- FROM M/S SRIDHAR FINANCIAL SERVICES LTD. AND ` 2,50,000/- FROM MS. RIDHI GUPTA. THE ASSESSING OFF ICER DID NOT ACCEPT THE SAME AND MADE THE ADDITION OF ` 8,16,767/- FOR EXCESS CASH FOUND DURING THE COURSE OF SURVEY. ON APPEAL, LEAR NED CIT(A) CONSIDERED THE ISSUE AT LENGTH AND SUSTAINED THE AD DITION WITH THE FOLLOWING FINDING:- 6. GROUND 2 OF THE APPEAL IS CONSIDERED NEXT. PER USAL OF THE FACTS EMANATING FROM THE SURVEY AND THE ASSESSMENT PROCEEDINGS REVEAL THAT CASH VARIATION O F RS.8,16,767 BETWEEN CASH FOUND AT THE TIME OF SURVE Y AND THE CASH BOOKS OF THE APPELLANT COMPANY AND CORPORA TE REALTORS P LTD COULD NOT BE RECONCILED. THE APPELLANT WAS REQUIRED TO EXPLAIN THE CASH OF RS.8,16,767, WHEREAS IT HAS COME UP WITH THE FIGURE OF RS.8,50,000. EVEN THE EXPLANATION CAME AFTER MORE THAN TWO YEARS FROM THE DATE OF SURVEY, WHEN IN THE MONTH OF DECEM BER 2011, IT WAS CLAIMED THAT IT REPRESENTED THE CASH R ECEIPTS OF BOOKINGS BY TWO PARTIES. IT IS WORTH NOTING THAT IN ITS EXPLANATION OF 9/12/ 2011, THE APPELLANT CLAIMED TO HAVE RECEIVED CASH OF RS.6 ,00,000 FROM SRIDHAR FINANCIAL SERVICES LTD AND RS.2,50,000 FROM RIDHI GUPTA, BUT IN ITS EXPLANATION OF 20/12/2011, CASH OF RS.6,00,000 WAS CLAIMED TO HAVE BEEN RECEIVED FROM RIDHI GUPTA AND RS.2,50,000 FROM SRIDHAR FINANCIAL SERVIC ES LTD. THE ONE PAGE ALLOTMENT LETTER ENCLOSED WITH THE EXPLANATION ALSO DOES NOT MATCH THE 17 PAGE SPECIME N ALLOTMENT LETTER FILED BY THE APPELLANT BEFORE THE AO AS PER LETTER DATED 29/11/2011, WHICH COMPRISES OF THE ALL OTMENT AGREEMENT, DECLARATION AND SIGNATURE OF THE ALLOTTE E AND THE WITNESSES, UNIT AND PRICE DETAIL AND THE PAYMEN T PLAN. THERE IS NO RING OF TRUTH IN THE EXPLANATION FILED BY THE APPELLANT SINCE THERE IS NO INDEPENDENT CORROBORATI VE EVIDENCE TO ESTABLISH EVEN THE POSSIBILITY OF SUCH AN ABORTED TRANSACTION AS THE APPELLANT WOULD LIKE THE TAX AUTHORITIES TO BELIEVE. IT IS NOTED THAT AS PER CL AUSE 2 OF THE TERMS AND CONDITIONS OF THE SPECIMEN ALLOTMENT, THE APPELLANT COMPANY ALONE HAS THE RIGHT TO CANCEL T HE ITA-1237/D/2013 3 ALLOTMENT AGREEMENT IN THE EVENT OF DELAY OR FAILUR E IN PAYMENT OF INSTALMENT, WHICH WOULD RESULT IN FORFEI TURE OF THE ENTIRE EARNEST MONEY DEPOSITED BY THE ALLOTTEE, LEAVING NO RIGHT OR LIEN WITH THE ALLOTTEE TO THE UNIT BOOK ED. THE CLAUSE ALSO STATES THAT THE SUM PAID OVER AND ABOVE THE REGISTRATION MONEY WOULD BE REFUNDED. HOWEVER, THE APPELLANT HAS NOT GIVEN ANY EXPLANATION IN RESPECT OF THE EARNEST MONEY OR REGISTRATION MONEY WITH REGARD TO RIDHI GUPTA AND SRIDHAR FINANCIAL SERVICES LTD OR T HE CIRCUMSTANCES IN WHICH THE BOOKING WAS CANCELLED AND THE ENTIRE AMOUNT REFUNDED BY IT. SINCE SQUARING UP OF ACCOUNTS IS NOT AN EVIDENCE OF GENUINENESS OF THE TRANSACTION, IN THE CASE AT HAND ALSO, CHEQUE PAYMENT TO RIDHI GUPTA AND SRIDHAR FINANCIAL SERVICES LTD. DOES NOT EXPLAIN THE CASH OF RS.8,16, 767 FOUND AT THE TIME OF SURVEY. THE APPELLANT CANNOT SEEK SHELTER BEHIND JAI PRAKAS H GUPTA, THE OTHER DIRECTOR, AND FATHER OF SUBODH GOE L, WHO IS THE MANAGING DIRECTOR OF THE APPELLANT COMPANY A ND HENCE IN COMPLETE CONTROL OF THE AFFAIRS OF THE APP ELLANT COMPANY. ALSO, THE FACT THAT JAI PRAKASH GUPTA AND SUBODH GOEL ARE FATHER AND SON AND LIVING JOINTLY, THERE I S NO REASON TO BELIEVE THAT SUBODH GOEL WOULD BE UNAWARE OF THE FINANCIAL AFFAIRS OF THE COMPANY. BUT A MAJOR DISCREPANCY FOUND IN THE SUBMISSIONS OF THE APPELLANT ESTABLISHES BEYOND DOUBT THAT THERE IS NO TRUTH IN THE EXPLANATION OFFERED BY THE APPELLANT. IT IS SE EN FROM THE DETAILS OF COMMISSION PAYMENT SUBMITTED BY THE APPELLANT AS PER ITS LETTER DATED 29/11/2011 THAT A PROPERTY CONSULTANT BY THE NAME OF RASHTRIYA PROPERTIES, G-9 , PLOT NO.3, PANKAJ PLAZA II, KKD, COMMUNITY CENTRE, DELHI 110092 RAISED A BILL OF RS.1,16,918 AS COMMISSION I N RESPECT OF SALE OF FLAT NO.706, TOWER 6 AS PER BILL DATED 13/1/2010, THE VERY FLAT IN RESPECT OF WHICH THE AP PELLANT IS CLAIMING TO HAVE CANCELLED THE BOOKING. UNDER THE CIRCUMSTANCES, THE EXPLANATION OF THE APP ELLANT WITH REGARD TO RS.8,16,767 IS NOT RELIABLE AND DESE RVES TO BE REJECTED. THE AO WAS JUSTIFIED IN CONCLUDING TH AT THE EXPLANATION OFFERED BY THE APPELLANT WAS AN AFTERTH OUGHT. THEREFORE, GROUND 2 OF THE APPEAL IS DISMISSED. THE ASSESSEE, AGGRIEVED WITH THE ORDER OF LEARNED C IT(A), IS IN APPEAL BEFORE US. ITA-1237/D/2013 4 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. THE LE ARNED COUNSEL FOR THE ASSESSEE ARGUED AT LENGTH. HOWEVER, HE WAS UNA BLE TO REBUT THE FINDING RECORDED BY THE LEARNED CIT(A). DURING THE COURSE OF SURVEY, NO EXPLANATION WAS GIVEN FOR EXCESS CASH FOUND AT ` 8,16,767/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED TO HAVE RECEIVED THE ADVANCE AGAINST THE SALE OF FLATS TO T WO PARTIES BUT COULD NOT EXPLAIN HOW AND WHY BOTH THE BOOKINGS WERE CANC ELLED AND THE ENTIRE AMOUNT WAS REFUNDED. THE CIT(A) HAS ALSO RE CORDED THE FINDING THAT EVEN BEFORE BOOKING, THE SAID FLATS WERE SOLD TO THIRD PARTIES FOR WHICH THE ASSESSEE HAS PAID THE COMMISSION ALSO TO THE BROKER WHO EFFECTED THE SALES. IN VIEW OF THESE FACTS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDING OF FACT RECORDED BY THE CIT(A) WHICH REMAINS UNCONTROVERTED BEFORE US. WE, THEREF ORE, UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL FILE D BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.08.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S CIVITECH HOUSING INDIA (P) L TD., M/S CIVITECH HOUSING INDIA (P) LTD., M/S CIVITECH HOUSING INDIA (P) LTD., M/S CIVITECH HOUSING INDIA (P) LTD., 65, SHRESTHA VIHAR, DELHI 65, SHRESTHA VIHAR, DELHI 65, SHRESTHA VIHAR, DELHI 65, SHRESTHA VIHAR, DELHI 110 092. 110 092. 110 092. 110 092. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -3, NEW DELHI. 3, NEW DELHI. 3, NEW DELHI. 3, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR