LUXORA INFRASTRUCTURE PVT. LTD., Mumbai V. DCIT CENTRAL CIRCLE 2 (1), Mumbai

ITA 1293/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8021 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RA J IV HARIT
• Keywords: Unexplained expenditure; Depreciation; Search and seizure; Document seized; Deemed to accrue or arise in india; Documents seized; Unabsorbed depreciation; Set aside
• Section: 69C; 143(3); 133A; 153A; 234B; 69A; 13; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NOS.1293, 1294, 1295 & 1296/M/2019 ASSESSMENT YEARS: 2012-13, 2013-14, 2014-15 & 2015- 16 M/S. LUXORA INFRASTRUCTURE PVT. LTD., 1207, 12 TH FLOOR, A WING, 02 COMMERCIAL BUILDING, 23-24, MINERVA INDUSTRIAL ESTATE, OFF. LBS ROAD, MULUND (W), MUMBAI - 80 PAN: AABCL2854K VS. DCIT, CENTRAL CIRCLE -2(1), PRATISHTHA BHAVAN, 8 TH FLOOR, MUMBAI (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI K.P. DEWANI, A.R. REVENUE BY : SHRI RAJIV HARIT, D.R. DATE OF HEARING : 26.02.2020 DATE OF PRONOUNCEMENT : 21.04.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEM BER: THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 24.12.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13, 20 13-14, 2014- 15 & 2015-16. ITA NO.1293/M/2019 A.Y. 2012-13 2. THE VARIOUS GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER: 1. THE ADDITION MADE BY A.O. AT RS.2,19,96,000/- U /S 69C OF IT. ACT 1961 IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW. ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 2 2. THE LEARNED CIT(A) ERRED IN UPHOLDING ADDITION O F RS.2,19,96,000/- U/S 69C OF IT. ACT 1961. 3. THE LEARNED A.O. AS WELL AS CIT(A) OUGHT TO HAVE TELESCOPED THE ADDITION MADE WITH THE INCOME ASSESSED/AVAILABILITY OF FUNDS IN CASE OF ASSESSEE IN PAST ASSESSMENT YEAR AS WELL AS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 4. THE ADDITION MADE AT RS.2,19,96,000/- WITHOUT GI VING BENEFIT OF TELESCOPING IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 5. THE LEARNED A.O. ERRED IN NOT SETTING OFF THE AD DITION MADE IN THE ASSESSMENT FRAMED AT RS.2,25,42,200/- WITH THE NET LOSS ASSESSED IN ASSESSMENT FRAMED AT RS.69,42,148/-. 6. THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF A.O. IN NOT SETTING OFF OF INCOME WITH LOSS DETERMINED IN ASSESSMENT FRAMED. 7. THE ASSESSEE DENIES LIABILITY TO PAY INTEREST UN DER SECTION 234A, 234B AND234C OF IT. ACT 1961. WITHOUT PREJUDICE, LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234C OF IT. ACT 1961 IS UNJUSTIFIED, UNWAR RANTED AND EXCESSIVE. 8. ANY OTHER GROUND SHALL BE PRAYED AT THE TIME OF HEARING. 3. THE ISSUE RAISED IN GROUND NO.1 TO 4 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.2,19,96,000/- BY LD. CIT(A) AS MADE BY THE AO UNDER SECTION 69C OF THE ACT BY NOT ALLOWING THE TELESCOPING OF THE SAID ADDITION OUT OF THE AVAILAB LE OF FUNDS WITH ASSESSEE. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS DEVELOPING A TOWNSHIP KNOWN AS ENSARA METROPARK AT NAGPUR. THE PROJECT WAS IN PROGRESS DURING THE YEAR AND THE ENTIRE COST INCURRED WAS SHOWN AS WORK IN PROGRESS. THE EXPENSES INCURRED O N THE SAID PROJECT WERE SHOWN AS WORK IN PROGRESS TILL 31.03.2 015 RELEVANT TO A.Y. 2015-16. THE COMPANY HAS RECEIVED CERTAIN A DVANCES FOR BOOKING OF RESIDENTIAL UNITS BY VARIOUS MODES IN CA SH AS WELL AS BY CHEQUES WHICH WERE SHOWN AS ADVANCES FROM CUSTOM ERS. SINCE THE ASSESSEE HAS SHOWN THE ENTIRE EXPENSES IN CURRED WITH PROJECT AS WORK IN PROGRESS NO REVENUE WAS RECOGNIZ ED DURING THE YEAR. THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2012 DECLARING A LOSS OF RS.69,42,148/-. THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3) WAS FRAMED VIDE ORDER DATED 04.02.2015 ACCEPTING THE RE TURNED LOSS ON 19.03.2015. A SEARCH AND SEIZURE ACTION UNDER S ECTION 132 ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 3 OF THE ACT WAS CONDUCTED ON THE ASSESSEE AND ASSOC IATE ENTITIES INCLUDING THE PROMOTERS AND DIRECTORS. DURING THE COURSE OF SEARCH IT WAS REVEALED THAT ASSESSEE WAS GENERATING CASH BY OVER INVOICING CERTAIN SUB CONTRACTORS AND OVER PRICING LAND DEALS AND WAS ALSO ACCEPTING ON MONEY. A NOTICE UNDER SE CTION 153A OF THE ACT DATED 03.10.2016 WAS ISSUED AND SERVED UPON THE ASSESSEE WHICH WAS COMPLIED WITH BY THE ASSESSEE BY FILING A RETURN OF INCOME ON 02.02.2017 DECLARING LOSS OF RS.69,42,148/-. DURING THE COURSE OF SEARCH, A STA TEMENT UNDER SECTION 132(4) OF THE ACT WAS RECORDED OF SHRI SANJ AY KOTHARI WHO ADMITTED THAT ASSESSEE GENERATES CASH OUT OF EX PENSES BOOKED IN THE COURSE OF ITS BUSINESS ACTIVITIES. S HRI SANJAY KOTHARI EXPLAINED THAT THE CASH WAS GENERATED THROU GH EXCESS SUB CONTRACT EXPENSES BOOKED BY ASSESSEE AND CASH W AS RECEIVED BACK AND ALSO BY OVER PRICING THE PURCHASE OF LANDS. THE QUANTUM OF INFLATION OF EXPENDITURE WAS ESTIMAT ED AT RS.20 CRORES, THE DETAILS WHEREOF ARE AS UNDER: 2009-10/ 2010- 11 2011- 12 2012-13 2013-11 2014-15 2015-16 TOTAL LAND PURCHASED 1013859020 0 0 564320808 250706440 0 71780920 1900667188 CONTRACT 0 0 0 0 24198920 80018554 61064336 165270810 TOTAL 1013859020 0 0 564320808 274894360 80018554 13284525 6 2065937998 PERCENTAG E 49.07 0 0 27.31 13.30 3.87 6.45 100 OVER- INVOICING ON LAND PURCHASE 98140000 0 0 54620000 26600000 7740000 12900000 200000000 K AND CONTRACT ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 4 FOR ASSESSMENT YEAR 2012-13 THE QUANTUM WAS ESTIMAT ED AT RS.5,46,20,000/-. SINCE THE WORK WAS IN PROGRESS I N RESPECT OF THE PROJECT UNDERTAKEN BY THE ASSESSEE, THE CASH RE CEIVED OF RS.20 CRORE BY WAY OF OVER INVOICING WAS REDUCED FR OM WORK IN PROGRESS WITHOUT TREATING THE SAME AS ASSESSABLE I NCOME IN THE HANDS OF THE ASSESSEE AS THE COST INFLATED WAS EMBE DDED IN AND WAS PART OF THE WORK IN PROGRESS. DURING THE COURS E OF SEARCH AN EXCEL SHEET TITLED, CASH EXPENSES UP TO 31.10.20 14 WAS FOUND FROM SHRI SANJAY KOTHARI. HOWEVER, NO CORROBORATIV E EVIDENCES WERE FOUND WHETHER THE ASSESSEE HAD INCURRED THESES EXPENSES ACTUALLY OR NOT. AS PER THE SAID EXCEL SHEETS THE CASH EXPENSES UP TO 31.10.2014 WERE RS.6.03 CRORES AND AFTER CONS IDERING CERTAIN NOTINGS RECORDED IN THE BOOKS OF ACCOUNTS O F THE ASSESSEE AGGREGATING TO 75.37 LAKHS, THE AO CAME TO THE CONCLUSION THAT RS.528.02 LAKHS WERE NOT RECORDED I N THE BOOKS OF ACCOUNTS AND ARE LIABLE TO BE ASSESSED UNDER SEC TION 69C OF THE ACT AS UNEXPLAINED IN VARIOUS SHEETS. HOWEVER, OUT OF THE UNRECORDED EXPENSES OF RS.528.02 CRORES, RS.2,19, 96,000/- PERTAINED TO A.Y. 2012-13. THE ASSESSEE SUBMITTED BEFORE THE AO THAT IN CASE THE SO CALLED UNRECORDED EXPENSES O F RS.528.02 LAKHS ARE ADDED UNDER SECTION 69C OF THE ACT THEN I T WOULD RESULT IN DOUBLE TAXATION WHICH IS NOT PERMISSIBLE UNDER THE ACT. FIRST BY WAY OF DEDUCTION OF RS.20 CRORES WHICH REP RESENTS THE CASH GENERATED THROUGH OVER INVOICING AND THEN AGAI N BY TREATING THE UNRECORDED EXPENSES AS UNEXPLAINED EXP ENDITURE UNDER SECTION 69C OF THE ACT. THE ASSESSEE SUBMITT ED THAT IN THE SEARCH PROCEEDINGS AS WELL AS IN THE ASSESSMENT PROCEEDINGS IT WAS STATED BEFORE THE REVENUE AUTHORITIES THAT T HE SAID EXPENDITURE WAS INCURRED OUT OF CASH GENERATED THRO UGH OVER ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 5 INVOICING. HOWEVER, THE AO REJECTED THE CONTENTION S OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE AS SESSEE UNDER SECTION 69C OF THE ACT AS UNEXPLAINED EXPENDI TURE BY HOLDING THAT ASSESSEE COULD NOT PROVE THAT SUCH EXP ENDITURE OF RS.2,19,96,000/- WAS INCURRED OUT OF THE CASH GENER ATED OUT OF OVER INVOICING. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIS MISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: 5.1.1 THE PLEA OF ASSESSEE IS THAT REDUCTION IN WO RK IN PROGRESS ON ACCOUNT OF INFLATED VALUE OF LAND IN CONTRACTS RESULTS IN AVAI LABLE CASH WITH THE ASSESSEE AND SUCH CASH HAS BEEN USED BY ASSESSEE TO MAKE THE EXP ENSES FOR THE VARIOUS YEARS WHICH HAVE BEEN DISCUSSED IN PARA-8 TO 8.5 OF THE A SSESSMENT ORDERS FOR BOTH THE ASSESSMENT YEARS. ALSO IT WOULD BE RELEVANT TO MENT ION THAT INFLATION AND OVER VOICING OF THE EXPENSES RELATED TO WORK IN PROGRESS HAS BEEN DISCUSSED/IN PARA-6 OF THE ASSESSMENT ORDERS, WHICH HAS DIRECT NEXUS WITH THIS GROUND. THEREFORE, WHILE DISPOSING OF THIS GROUND OF APPEAL, THE ENTIRE DETA ILS DISCUSSED BY ASSESSING OFFICER REGARDING OVER VOICING OF WORK IN PROGRESS HAVE BEE N DULY CONSIDERED. AFTER CONSIDERING THE OVERALL FACTS OF THE CASE INCLUDING ALL THE STATEMENTS RECORDED AND THE VARIOUS SEIZED DOCUMENTS, ON THE BASIS OF WHICH THE ISSUE HAS BEEN UNEARTHED BY THE REVENUE DEPARTMENT AS WELL AS THE SUBMISSION S OF ASSESSEE FILED BEFORE THE AO AS WELL AS IN THE APPEAL PROCEEDINGS, THE GROUND OF APPEAL OF ASSESSEE IS DISMISSED IN VIEW OF FOLLOWING;- 5.1.1 ONUS OF LINKING THE AVAILABILITY OF CASH DUE TO OVER INVOICING OF WORK IN PROGRESS EXPENDITURE NOT DISCHARGED BY ASSESSEE:- THE ONUS IS EXCLUSIVELY ON ASSESSEE TO SUBSTANTIATE THE AVAILABILITY OF CASH ON A PARTICULAR DAY TO EXPLAIN THE VARIOUS EXPENSES. T HERE CANNOT BE GENERAL AND BLANKET LINKING OF CASH GENERATED THROUGH OVER VOIC ING WITH CERTAIN SPECIFIC EXPENSES ON PARTICULAR DAYS. ASSESSEE HAS NOT DONE ANY EXERCISE TO EXPLAIN THE AVAILABILITY OF THE CASH TO EXPLAIN THE SOURCES OF THE EXPENSES. IN VIEW OF THIS THERE IS NO ANOMALY IN THE ORDERS OF ASSESSING OFFICER, W HEREIN, A SEPARATE ADDITION OF RS.2,19,96,000/- AND RS.89,83,000/- IS MADE ON ACCO UNT OF UNEXPLAINED EXPENDITURE UNDER SECTION 69C. 5.1.2. LAW RELATING TO TELESCOPING : - NEITHER IN ASSESSMENT PROCEEDINGS NOR IN APPEAL PRO CEEDINGS, ASSESSEE HAS SUBMITTED ANY CASH FLOW CHART TO EXPLAIN AND SHOW A VAILABILITY OF CASH (GENERATED THROUGH OVER-INVOICING) FOR VARIOUS EXPENSES, DETAI LS OF WHICH WERE MAINTAINED BY SHRI SANJAY KOTHARI. OUT OF TOTAL SUCH EXPENSES RS. 6.03 CRORES, ASSESSEE COULD VERIFY AN AMOUNT OF RS. 75.37 LAKHS ONLY WITH BOOKS OF ACC OUNTS. FOR REMAINING RS. 5.28 CRORES, NO SOURCES COULD BE EXPLAINED. FOR CLAIMING THE BENEFIT OF TELESCOPING, IT IS ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 6 THE BOUNDEN DUTY OF THE APPELLANT TO FURNISH RELEVA NT DETAILS AND DOCUMENTARY EVIDENCES. HENCE, THE CLAIM OF THE APPELLANT FOR TE LESCOPING HAS BEEN RIGHTLY REJECTED BY THE AO. 5.1.3. .. .. .. 5.1.10. NO FINANCIAL YEAR WISE BREAKUP OF CASH GENE RATED OUT OF OVER INVOICING:- WITHOUT PREJUDICE TO ABOVE DISCUSSION, IN ANY CASE, ASSESSEE HAS NOT SUBMITTED ANY DETAILS OF YEAR WISE CASH GENERATED O UT OF OVER INVOICING OF THE EXPENSES OF 20 CRORES, WHICH WERE ADMITTED TIME AND AGAIN IN THE STATEMENTS OF SHRI SANJAY KOTHARI, SHRI NAVNEET KOTHARI AND SHRI YOGESH VINOD AGARWAL, WHICH HAVE BEEN BROUGHT OUT IN DETAIL IN PARA-6 OF THE AS SESSMENT ORDERS PERTAINING TO OVER VOICING. FINALLY, ASSESSING OFFICER, AFTER NOT HAVING RECEIVED ANY DETAILS FROM THE ASSESSEE, HAS PROPORTIONATELY ESTIMATED SUCH BO GUS EXPENDITURE DUE TO OVER VOICING FOR EACH OF THE FINANCIAL YEARS. THEREFORE, IN THE ABSENCE OF ASSESSEE SUBMITTING SPECIFIC DETAILS FOR THE EACH YEAR ASSES SING OFFICER HAS FINALLY USED THE TOOL OF ESTIMATION AVAILABLE-TO HIM AND HAS ESTIMAT ED THIS INFLATED EXPENDITURE ON THE BASIS OF VOLUME OF THE LAND PURCHASED IS YEAR. THEREFORE, IN ANY CASE, THIS YEAR WISE ALLOCATION O F CASH GENERATED OUT OF OVER VOICING IS NOT THE REAL VALUE OF CASH AVAILABL E WITH ASSESSEE IN THAT FINANCIAL YEAR AS A WHOLE. IT IS ONLY A FAIR AND LOGICAL ESTI MATION MADE BY AO ON PROPORTIONATE BASIS. SUCH EXERCISE WAS THE ONLY OPTION AVAILABLE WITH THE AO AS ASSESSEE FAILED TO PROVIDE YEAR-WISE BREAK-UP. THEREFORE, IN VIEW OF T HESE FACTS ALSO, THE ARGUMENT OF ASSESSEE TO ALLOW HIM THE BENEFIT OF TELESCOPING IS NOT ADMISSIBLE AT ALL. 5.1.11 IN VIEW OF THE ABOVE FACTS AND VARIOUS JUDIC IAL PRONOUNCEMENTS, THE GROUND NO. 1 OF THE ASSESSEE IS DISMISSED FOR BOTH THE YEA RS. 5. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT IT IS NOT IN DISPUTE THAT ASSESSEE HAS GENERATED CASH OF RS.2 0 CRORES UP TO A PERIOD OF 31.03.2015 BY OVER INVOICING THE SUB CONTRACTS AND LAND PURCHASES AND IT WAS ALSO STATED THAT THE EXCEL SHEET TITLED, CASH EXPENSES UP TO 31.10.2014 OF RS.6.03 C RORES WAS FOUND AT THE TIME OF SEARCH FROM THE ASSESSEE WHICH AFTER COMPARING WITH THE NOTING IN THE BOOKS OF ACCOUNTS ADJUSTED BY RS.75.37 LAKHS AND IT WAS CONCLUDED BY THE AO THAT RS.528.02 LAKHS WERE UNRECORDED EXPENSES AND OUT OF THAT RS.2,19,96,000/- PERTAINED TO A.Y. 2012-13. THE LD . A.R. ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 7 SUBMITTED THAT AT THE TIME OF SEARCH NO CORROBORATI VE EVIDENCES WERE FOUND WHETHER THESE EXPENSES WERE ACTUALLY INC URRED ON THE PROJECT. THE LD. A.R. ALSO SUBMITTED THAT IF A T ALL IT IS PRESUMED THAT THESE EXPENSES WERE INCURRED FOR THE PURPOSE OF BUSINESS, THE SAID EXPENSES WERE INCURRED OUT OF TH E CASH GENERATED THROUGH OVER INVOICING, THE DETAILS WHERE OF ARE GIVEN YEAR WISE BEFORE THE AO AND THE CASH GENERATION THR OUGH OVER INVOICING WAS RS.5,46,20,000/- DURING THE CURRENT Y EAR. THE LD. A.R., THEREFORE, SUBMITTED THAT THE BENEFIT OF TELE SCOPING SHOULD BE ALLOWED TO THE ASSESSEE AS IT HAS BEEN MAINTAINE D BY SHRI SANJAY KOTHARI ALL THROUGHOUT THAT THE CASH WAS GEN ERATED THROUGH OVER INVOICING. IT WAS ALSO ADMITTED BY SH RI SANJAY KOTHARI IN HIS STATEMENT RECORDED UNDER SECTION 132 (4) OF THE ACT THAT THE SOURCE OF CASH FOR INCURRING EXPENSES WAS OUT OF OVER INVOICING OF SUB CONTRACTS AND LAND PURCHASES. THE LD. A.R. ALSO REFERRED TO PARA 8.1 OF THE ASSESSMENT OR DER AND SUBMITTED THAT THERE IS A DIRECT LINKAGE AND NEXUS BETWEEN CASH GENERATION AND EXPENSES INCURRED. THE LD. A.R. ALS O SUBMITTED BEFORE THE BENCH THAT NEITHER THE SEARCH PARTY NOR THE AO DURING THE ASSESSMENT PROCEEDINGS CAME ACROSS OR BR OUGHT ANY EVIDENCE THAT CASH GENERATED DURING THE ASSESSMENT YEAR 2011- 12 RS.5,46,20,000/- WAS UTILIZED ELSEWHERE OR INVES TED ON ANY OTHER PROJECT. THE LD. A.R. THEREFORE SUBMITTED TH AT OUTGOINGS FOUND DURING THE COURSE OF SEARCH IN THE FORM OF EX PENSES INCURRED BY THE ASSESSEE HAVE TO BE TELESCOPED OUT OF THE CASH GENERATED THROUGH OVER INVOICING. THE LD. A.R. REF ERRED TO THE FOLLOWING DECISIONS IN DEFENCE OF HIS ARGUMENTS : I) SHRI SEWAKRAM K. GURBAXANI ITA(SS) NO.50 /NAG/2006 II) CIT VS. K. SREEDHARAN ( 1993)201 ITR 1010 (KER.) III) SHRI RAMESHWAR LAL SONI S/O LATE SH.MANGI LAL SONI ITA NO.34/2007 VIDE ORDER DATED 07/03/2017. ( RAJ) ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 8 IV) RAMESHWAR LAL SONI VS. ACIT (2004)91 ITD 030 1 (TM) V) CIT VS. JAWANMAL GEMAJI GANDHI (1985) 151 ITR 0353 (BOM.) VI) CIT VS M/S. GOLANI BROTHERS IN ITA NO. 17 OF 20 15 VIDE ORDER DATED 29/08/2017 ( BOMBAY) VII) LAKHMICHAND D. ROHIRA IN ITA NO.1760 OF 2016 VIDE ORDER DATED 26/02/2019 ( BOMBAY ). VIII) M/S. ARTH HOUSING DEVELOPMENT PVT. LTD. ITA N O. 166 OF 2017 VIDE ORDER DATED 15/04/2019.( BOMBAY) IX) ARTH HOUSING DEVELOPMENT PVT. LTD. ITA NO. 6764/MUM/2010 VIDE ORDER DATED 30/10/2015(MUM TRIBUNAL). X) JAWAHAR B. PUROHIT ITA NO.7208/MUM/2013 VIDE O RDER DATED 20/09/2017(MUM TRI.). THE LD. A.R., THEREFORE, PRAYED THAT THE ORDER PASS ED BY THE LD. CIT(A) IS BLATANTLY WRONG AND AGAINST THE FACTS ON RECORD AS THE CEO SHRI SANJAY KOTHARI IN HIS STATEMENT RECORD ED UNDER SECTION 132(4) OF THE ACT HAS CANDIDLY AND EXPLICIT LY STATED THAT THE SOURCE OF SUCH EXPENSES WERE OUT OF CASH GENERA TED THROUGH OVER INVOICING AND PRAYED BEFORE THE BENCH THAT IN VIEW OF THE RATIO LAID DOWN IN VARIOUS DECISIONS REFERRED TO DU RING THE COURSE OF HEARING THE TELESCOPING OF RS.2,19,96,000/- MAY BE ALLOWED OUT OF THE CASH GENERATED DURING THE YEAR AND THE A DDITION MADE UNDER SECTION 69C OF THE ACT MAY BE DELETED. THE L D. A.R. ALSO DISTINGUISHED THE FACTS OF THOSE CASES RELIED UPON BY LD. CIT(A) BY SUBMITTING THAT IN THE ASSESSEES CASE A REASONA BLE NEXUS WAS SHOWN BETWEEN THE CASH GENERATED AND EXPENSES I NCURRED AND THEREFORE JUSTIFIED TELESCOPING OF THESE EXPENS ES OUT OF CASH GENERATED THROUGH OVER INVOICING. 6. THE LD. D.R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF AUTHORITIES BELOW BY SUBMITTING THAT THOUGH THE ASSESSEE HAD ADMITTED THE GENERATION OF CASH THROUGH OVER INVOIC ING IN SUB CONTRACTS AND ALSO IN LAND PURCHASES BUT THE FACT R EMAINS THAT NOWHERE IT HAS EVER BEEN PROVED BY THE ASSESSEE THA T THE EXPENSES INCURRED OF RS.2,19,96,000/- WERE INCURRED OUT OF THE ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 9 SAID CASH GENERATED DURING THE YEAR. THE LD. D.R., THEREFORE, RELIED HEAVILY ON THE ORDER OF LD. CIT(A)AND PRAYED BEFORE THE BENCH THAT THE GROUND NOS.1 TO 4 RAISED BY THE ASSE SSEE DESERVED DISMISSAL. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE VA RIOUS CASE LAWS CITED DURING THE COURSE OF HEARING. THE UNDIS PUTED FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPING TOWNSHIP IN NAGPUR WHICH WAS IN PROGRESS AND WHATEV ER EXPENDITURE WAS INCURRED ON THE SAID PROJECT WAS SH OWN AS WORK IN PROGRESS TILL 31.03.2015. CONSEQUENTLY, DURING THE YEAR ASSESSEE HAS NOT SHOWN ANY INCOME FROM THE SAID PRO JECT. THE ASSESSEE HAS ALSO RECEIVED SOME ADVANCES FROM CUSTO MERS BY WAY OF CASH/CHEQUES WHICH WAS SHOWN AS ADVANCES FRO M THE CUSTOMERS IN THE BALANCE SHEET. A SEARCH WAS CONDU CTED ON 19.03.2015 ON THE ASSESSEE AND ITS RELATED ENTITIES INCLUDING PROMOTERS AND DIRECTORS. DURING THE COURSE OF SEAR CH, IT WAS FOUND THAT ASSESSEE HAS GENERATED CASH THROUGH OVER INVOICING OF ITS SUB CONTRACTS AND LAND PURCHASES WHICH HAS B EEN ADMITTED BY THE CEO OF THE PROJECT OF SHRI SANJAY K OTHARI. THE TOTAL CASH GENERATED THROUGH THE OVER INVOICING WAS FOUND AT RS.20 CRORES. DURING THE ASSESSMENT PROCEEDINGS, T HE AO ALLOWED THE DEDUCTION OF THE SAID CASH FROM WORK IN PROGRESS AS THE SAME WAS GENERATED THROUGH OVER INVOICING AND W AS NOT HAVING ANY BEARING ON THE INCOME OF THE ASSESSEE DU RING THE YEAR. DURING THE COURSE OF SEARCH AN EXCEL SHEET W AS ALSO FOUND TITLED CASH EXPENSES UP TO 31.10.2014 RS.6.03 CRORE AND AFTER VERIFYING THE NOTINGS IN THE BOOKS OF ACCOUNTS, AN ADJUSTMENT WAS MADE TO THE TUNE OF RS.75.37 LAKHS WHICH WAS EX PLAINED BY ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 10 THE ASSESSEE WITH THE CORRESPONDING PROOFS OF PAYME NT IN THE BANK STATEMENT AND THUS AN AMOUNT OF RS.528.02 CROR E WAS HELD TO BE UNEXPLAINED EXPENDITURE IN THE HANDS OF THE ASSESSEE. OUT OF THE SAID EXPENDITURE RS.2,19,96,000/- RELATE D TO THE YEAR UNDER CONSIDERATION. NOW THE ISSUE BEFORE US IS WH ETHER THE ASSESSEE IS ENTITLED TO BENEFIT OF TELESCOPING OR N OT. AFTER ANALYZING AND EXAMINING THE FACTS ON RECORD, WE OBS ERVE THAT IN THIS CASE THE CASH GENERATED DURING THE YEAR OUT OF OVER INVOICING WAS RS.5,46,20,000/- AND IT HAS BEEN ADMI TTED BY SHRI SANJAY KOTHARI DURING THE COURSE OF RECORDING OF ST ATEMENT UNDER SECTION 132(4) OF THE ACT THAT THE SOURCE OF THESE EXPENSES WERE OUT OF THE CASH GENERATED THROUGH OVER INVOICI NG. WE FURTHER NOTE THAT THE AO HAS FAILED TO BRING ON REC ORD ANY EVIDENCE TO THE EFFECT THAT THESE EXPENSES OF RS.2, 19,96,000/- WERE INCURRED OUT OF SOME OTHER SOURCE OR THE CASH GENERATED OF RS.5,46,20,000/- WAS INVESTED OR INCURRED ON SOME O THER ACTIVITY. THEREFORE, UNDER THESE CIRCUMSTANCES, TH E ONLY POSSIBLE PRESUMPTION IS THAT THE EXPENDITURE WAS IN CURRED OUT OF THE FUNDS AVAILABLE WITH THE ASSESSEE GENERATED THROUGH OVER INVOICING. THIS HAS BEEN ADMITTED BY THE CEO OF TH E PROJECT SHRI SANJAY KOTHARI IN THE STATEMENT RECORDED UNDER SECTION 132(4) AND THEREFORE WE CAN REASONABLY HELD THAT AS SESSEE IS ENTITLED TO BENEFIT OF TELESCOPING OF RS.2,19,96,00 0/-. THE CASE OF THE ASSESSEE FINDS SUPPORT FROM THE SEVERAL DECI SIONS REFERRED TO BY THE ASSESSEE DURING THE COURSE OF HEARING. I N THE CASE OF CIT VS. K. SRIDHAR (SUPRA) THE HONBLE KERALA HIGH COURT HAS HELD THAT IF A INTANGIBLE ADDITION MADE IN THE EARLIER YEAR IS AS GOOD AS OTHER DISCLOSED INCOME OF THE ASSESSEE AND IT WOULD BE TREATED AS AVAILABLE FOR INVESTMENT FROM THE YEAR I N WHICH SUCH ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 11 ADDITION WAS MADE. THE HONBLE BOMBAY HIGH COURT I N THE CASE OF M/S. CIT VS. GULANI BROTHERS (SUPRA) HAS OBSERVE D AS UNDER: 21. WHEN IT WAS DISTURBED AND INTERFERED WITH, THE TRIBUNAL FOUND THAT THERE WAS INDEED A JUSTIFICATION FOR SUCH INTERFERENCE. I F THE UNACCOUNTED EXPENDITURE IS DETERMINED, THEN, NECESSARILY THE QUESTION WHICH WO ULD ARISE FOR CONSIDERATION BEFORE THE TRIBUNAL IS WHETHER THE ASSESSING OFFICE R WAS JUSTIFIED IN MAKING ADDITION UNDER SECTION 69C FOR THE YEARS UNDER CONS IDERATION. THE TRIBUNAL, IN PARA 39 OF THE ORDER UNDER CHALLENGE, FOUND THAT THE EXP LANATION AS DERIVED FROM THE RECORDS AND PLACED BY BOTH CAN BE TRACED TO THE 'ON MONEY 1 RECEIVED AT THE TIME OF BOOKING/SALE OF SHOPS. THE STATEMENT OF THE SENIOR PARTNER IS REFERRED. THE SENIOR PARTNER ADMITTED THAT THE SUMS HAVE BEEN RECEIVED A S 'ON MONEY 1 AND AT THE STAGE AFORESAID. THEREFORE, BOTH THE AMOUNTS, NAMELY THE 'ON MONEY 1 AS WELL AS THE UNEXPLAINED 'EXPENDITURE CANNOT BE BROUGHT TO TAX, ACCORDING TO THE TRIBUNAL. IF THE UNACCOUNTED EXPENDITURE SO INCURRED WAS FROM THE 'O N MONEY' RECEIVED BY THE ASSESSEE, THEN, THE QUESTION OF MAKING ANY ADDITION UNDER SECTION 69C DOES NOT ARISE BECAUSE THE SOURCE OF THE EXPENDITURE IS DULY EXPLAINED. IT IS ONLY THE 'ON MONEY' WHICH CAN BE CONSIDERED FOR THE PURPOSE OF T AXATION. THAT IS WHAT THE TRIBUNAL THEREFORE CONCLUDED AND ONCE THE 'ON MONEY ' IS CONSIDERED AS REVENUE RECEIPT, THEN ANY EXPENDITURE OUT OF SUCH MONEY CAN NOT BE TREATED AS UNEXPLAINED EXPENDITURE, FOR THAT WOULD AMOUNT TO DOUBLE ADDITI ON IN RESPECT OF THE SAME AMOUNT. WE, THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAI D DOWN IN THE VARIOUS DECISIONS AND ALSO THE FACT THAT THE AS SESSEE HAS AVAILABLE SOURCE WITH IT TO INCUR THE CASH EXPENSES WHICH WAS NOT IN ANY WAY CONTROVERTED BY THE AO BY BRINGING O N RECORD ANY COGENT AND SUBSTANTIVE MATERIALS OR EVIDENCES AND A CCORDINGLY WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO ALLOW THE TELESCOPING AND DELETE THE ADDITION OF RS.2,19, 96,000/-. THE GROUNDS NO.1 TO 4 ALLOWED. 8. THE ISSUE RAISED IN GROUND NO.5 TO 7 IS AGAINST THE ORDER OF LD. CIT(A) UPHOLDING THE ORDER OF AO IN NOT ALLOWIN G THE SETTING OFF THE LOSS AGAINST THE ASSESSED DEEMED INCOME UND ER SECTION 69C OF THE ACT BY OBSERVING AND HOLDING AS UNDER:- THIS GROUND IS REGARDING NOT ALLOWING SET OFF OF C URRENT YEAR'S LOSS AGAINST THE ADDITION U/S. 69C. THE AO HAS DISCUSSED THIS ISSUE IN PARA 9 OF THE ASSESSMENT ORDERS AND RELIED ON THE HON'BLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF FAKIR MOHAMMED HAJI HASAN (247 ITR 209). ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 12 5.2.1 THIS GROUND OF APPEAL OF ASSESSEE IS DISMISSED IN VIEW OF FOLLOWING POSITION OF LAW AND FACTS OF THE CASE :- A) THE CORRECT POSITION OF LAW AS PER VARIOUS EXPOS ITIONS BY VARIOUS HIGH COURTS INCLUDING GUJARAT H.C.[IN CASE OF FAKIR MOHA MMED HAJI HASAN V/S CIT (2001) 247 ITR 290(GUJ)] AND PUNJAB & HARYANA HIGH COURT[IN CASE OF DULARI DIGITAL PHOTO SERVICES P.LTD V/S CIT (2013) 219 TAX MAN 216 (PUNJAB & HARYANA)] IS THAT ADDITIONS MADE U/S 68 & 69C ARE ' DEEMED INCOME' AND DO NOT FALL UNDER ANY SPECIFIC HEAD OF INCOME. B) AS PER NEWLY INTRODUCED SECTION 115BBE IN TRODUCED BY FINANCE ACT 2012, W.E.F. 01.04.2013, NO DEDUCTION OR ALLOWANCE OR LOSS CAN BE ALLOWED TO BE SET OFF AGAINST THE ; DEEMED INCOME COMPUT ED U/S 68 OR 69A TO 69D. C) THE SECTION 115BBE IS ACTUALLY A CLARIFIC ATORY SECTION AND LAW WAS ALREADY 1 ACCORDINGLY PROPOUNDED BY HIGH COURTS. D) THUS A.O. HAS CORRECTLY APPLIED THE PROVISIONS O F LAW AND THUS RIGHTLY REJECTED THE REQUEST OF ASSESSEE. 5.2.2 IN VIEW OF THE ABOVE FACTS, IT IS HELD THA T THE AO IS RIGHT AND THERE IS NO ANOMALY IN THE ORDERS OF AO. HENCE GROUND NO. 2 OF THE ASSESSEE IS DISMISSED FOR BOTH THE YEARS. 9. THE FACTS IN BRIEF ARE THAT AO ASSESSED THE LOSS AT RS.69.42 LAKHS FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE HAD CARRIED FORWARD UNABSORBED BUSINESS LOSSES AND UNABSORBED DEPRECIATION OF RS.98.34 LAKHS AND RS.8. 80 LAKHS RESPECTIVELY. THE TOTAL BUSINESS LOSS AND DEPRECIA TION LOSS AVAILABLE WITH THE ASSESSEE FOR SETTING OFF WAS RS. 176.56 LAKHS AGAINST THE ASSESSED INCOME, IF ANY. THE AO DID NOT ALLOW THE SETTING OFF THE BUSINESS LOSS AGAINST THE ADDITION MADE UNDER SECTION 69C OF THE ACT ON THE GROUND THAT THE ADDIT ION UNDER SECTION 69C OF THE ACT ARE HEAD LESS ADDITION AND D OES NOT FOLLOW UNDER ANY SPECIFIC HEAD BY FOLLOWING THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR CHAND HAJI HASARIVS CIT (2001) 247 ITR 290 GUJ. HC. 10. THE LD. CIT(A) ALSO BY FOLLOWING THE SAME DECIS ION DENIED THE SET OFF OF THE LOSS AGAINST THE ASSESSED INCOME . ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 13 11. THE LD. A.R. SUBMITTED THAT THE ORDER OF LD. CI T(A) IS WRONG AS THE DECISION OF HONBLE GUJARAT HIGH COURT IN TH E CASE OF FAKIR CHAND HAJI HASARI VS CIT (SUPRA) HAS BEEN DISTINGUISHED BY THE HONBLE GUJRAT HIGH COURT IN THE SUBSEQUENT DECISIONS IN THE CASE OF RADHE DEVELOPER INDIA LTD. REPORTED I N 329 ITR 001 AND SHILPA DYEING AND PRINTING MILLS LTD. REPORTED IN 291 TAXMANN 279 GUJARAT AND NOTHING ADVERSE CAN BE INF ERRED FROM THE DECISION OF FAKIR CHAND HAJI HASARI VS CIT (SUPRA) WHICH HAS WRONGLY BEEN FOLLOWED. THE LD. A.R. ALSO REFER RED TO CIRCULAR NO.11/2019 DATED 19.06.2019 WHICH PERMITS THE SETTI NG OFF OF LOSS/DEPRECIATION AGAINST THE INCOME ASSESSED UNDER SECTION 68 TO 69C OF THE ASSESSMENT YEARS PRIOR TO ASSESSMENT YEAR 2017- 18. THE LD. A.R., THEREFORE, PRAYED THAT IN VIEW O F THE ABOVE, THE LOSS/DEPRECIATION MAY KINDLY BE ALLOWED TO BE SET O FF AGAINST THE ASSESSED INCOME UNDER SECTION 68 TO 69C. THE LD. A .R. RELIED ON THE FOLLOWING DECISIONS: I) 219 TAXMAN 279 (GUJARAT) CIT-II VS. SHILP A DYEING & PRINTING MIFFS (P) LTD. II) (2007) 291 ITR 0258 (MADRAS) CIT VS. CHE NSING VENTURES III) ITAT ORDER IN ITA NO.1972/AHD/2012 IN THE CASE OF M/S. K.R. AUTOMOBILES VIDE ORDER DATED 03/02/2014. IV) ITAT ORDER IN ITA NO.1841/DEL/2016 IN THE CASE OF M/S. GODWIN RESORT & HOTEL PVT. LTD. VIDE ORDER DATED 14/10/2019. 12. THE LD. A.R. ALSO DISTINGUISHED THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF DULARI D IGITAL PHOTO SERVICES LTD. VS. CIT 219 TAXMAN 216 P&H BY SUBMITT ING THAT THE SAME IS NOT RELATING TO SET OFF OF LOSS AGAINST THE INCOME ASSESSED UNDER SECTION 68 OF THE ACT. FINALLY, THE LD. A.R. PRAYED BEFORE THE BENCH THAT THE UNABSORBED LOSSES/DEPRECIATION INCLUDING THE CURRENT YEAR LOSS /DEPRECIATION ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 14 MAY KINDLY BE ALLOWED TO BE SET OFF AGAINST THE INC OME UNDER SECTION 68/69C OF THE ACT. 13. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE INCOME ASSESSED UNDER S ECTION 68/69C IS ELIGIBLE TO BE ADJUSTED AGAINST ANY BROUG HT FORWARD LOSS OR DEPRECIATION. THE POSITION IS CLARIFIED BY THE BOARDS CIRCULAR NO.11/2019 DATED 19.06.2019 WHICH PROVIDES FOR SETTING OFF OF LOSS/DEPRECIATION AGAINST THE INCOME ASSESSED UNDER SECTION 69C OF THE ACT PROVIDED IT RELATES TO ANY ASSESSMENT YEARS PRIOR TO A.Y. 2017-18 AND THE SAME RATIO HAS BEEN LAID DOWN IN THE VARIOUS DECISIONS RELIED UPON BY THE ASSESSEE. ACCORDINGLY, WE HOLD THAT WHATEVER INCOM E IS ASSESSED AFTER GIVING EFFECT TO ITAT ORDER IS SUBJE CT TO SET OFF AGAINST THE LOSS/DEPRECIATION OF THE CURRENT YEAR A ND ALSO BROUGHT FORWARD LOSS/BROUGHT FORWARD DEPRECIATION O F THE EARLIER YEAR. THE GROUNDS NO. 5 TO 7 ARE ALLOWED. 14. THE ISSUE RAISED IN GROUND NO.1 TO 4 IN ITA NO.1294/MUM/2019, GROUND NO.3 TO 6 IN ITA NO.1295/MUM/2019 AND GROUND NO.3 TO 6 IN ITA NO.1296/MUM/2019 IS AS REGARDS NOT ALLOWING THE BEN EFIT OF TELESCOPING OUT OF THE CASH GENERATED THROUGH OVER INVOICING BY THE ASSESSEE WHICH HAS BEEN DECIDED BY US IN GROUND NO.1 TO 4 IN ITA NO.1293/MUM/2019 A.Y. 2012-13, WHEREIN WE HA VE HELD THAT ASSESSEE IS ENTITLED TO THE BENEFIT OF TELESCO PING AND THE APPEAL OF THE ASSESSEE WAS ALLOWED ON THIS ISSUE. FOLLOWING THE DECISION IN ITA NO.1293/MUM/2019, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE BENEFIT OF ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 15 TELESCOPING TO THE ASSESSEE. RESULTANTLY, THE ADDI TION MADE UNDER SECTION 69C OF THE ACT IS ORDERED TO BE DELET ED. THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEALS A S STATED ABOVE ARE ALLOWED. 15. THE ISSUE RAISED IN GROUND NO.5 & 6 IN ITA NO.1294/MUM/2019 A.Y. 2013-14, GROUND NO.7 & 8 IN I TA NO.1295/MUM/2019 A.Y. 2014-15 AND GROUND NO.7 TO 9 IN ITA NO.1296/MUM/2019 A.Y. 2015-16 ARE SAME TO ONE AS DE CIDED BY US IN GROUND NO.5 TO 6 IN ITA NO.1293/MUM/2019 W HERE WE HAVE DIRECTED THE AO TO ALLOW THE SETTING OFF OF LO SS/DEPRECIATION OF THE CURRENT YEAR AS WELL AS OF BROUGHT FORWARD U NABSORBED LOSS/DEPRECIATION FROM EARLIER YEARS AGAINST THE IN COME ASSESSED UNDER SECTION 68/69C OF THE ACT. ACCORDINGLY, ALL THESE GROUNDS IN THE ABOVE APPEALS ARE ALLOWED AND THE AO IS DIRE CTED ACCORDINGLY. 16. THE GROUNDS 1&2 IN ITA NO.1295/MUM/2019 ARE REPRODUCED AS UNDER:- 1. THE ADDITION MADE BY A.O. AT RS.40,00,000/- ON ACCOUNT OF ON MONEY IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW. 2. THE LEARNED CIT(A) ERRED IN UPHOLDING ADDITION M ADE BY A.O. AT RS.40 LACS ON ACCOUNT OF ON MONEY. 17. THE FACTS IN BRIEF ARE THAT THE AO DURING THE C OURSE OF SEARCH, THE SITE OFFICE OF ENSAARA METROPARK WAS C OVERED UNDER SURVEY UNDER SECTION 133A OF THE ACT AND STATEMENT OF SHRI MAHENDRA TAKKRE, GENERAL MANAGER OF THE PROJECT WAS RECORDED. HE WAS REQUIRED TO FURNISH THE DETAILS OF FLATS SOL D AND BOOKED TILL DATE ALONG WITH THE DATE OF BOOKING. IT WAS O BSERVED BY THIS SURVEY PARTY THAT THERE WERE DISCREPANCIES IN THE D ETAILS FURNISHED BY SHRI MAHENDRA TAKKRE QUA THE PER SQUAR E FEET SALE ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 16 PRICE OF FLATS SOLD AS STATED HEREINABOVE THAT STAT EMENT OF SHRI SANJAY KOTHARI, CEO OF THE ASSESSEE WAS ALSO RECORD ED UNDER SECTION 132(4) OF THE ACT WHO ADMITTED TO HAVE GENE RATED CASH BY ACCEPTING ON MONEY ON SALE OF FLATS AND OTHER A CTIVITIES AND ALSO STATED THAT THE SAME WAS UTILIZED FOR THE PURP OSE OF THE PROJECT ONLY. SHRI SANJAY KOTHARI ALSO SUBMITTED T HAT CASH AS WELL CHEQUES WERE ACCEPTED FROM THE BUYERS. HOWEV ER, ALL THESE PAYMENTS RECEIVED WHETHER IN CASH OR BY CHEQUE WERE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. HOWEVER, THE AO BRUSHED ASIDE THE CONTENTIONS AS MADE BY THE ASSESS EE AND CAME TO THE CONCLUSION THAT DURING THE PERIOD OF FI NANCIAL YEAR 2013-14 AND 2014-15, THE ASSESSEE HAS GENERATED ON MONEY TO THE TUNE OF RS.1,03,65,000/- OUT OF WHICH RS.40 LAK HS PERTAINED TO F.Y. 2013-14 RELEVANT TO A.Y. 2014-15 AND RS.63. 65 LAKHS RELATES TO F.Y. 2014-15 RELEVANT TO A.Y. 2015-16. THE PROJECT AT ENSARA METROPARK WAS AT THE DEVELOPMENT STAGE AND T HERE WAS WORK IN PROGRESS AT THE CLOSE OF THE ACCOUNTING YEA R AND CONSEQUENTLY NO INCOME WAS OFFERED AS NO PART OF TH E PROJECT IS SOLD/TRANSFERRED AND WHATEVER ADVANCES WERE RECEIVE D FROM THE CUSTOMERS WERE SHOWN AS LIABILITY IN THE BALANCE SH EET AS ADVANCE FROM CUSTOMERS AND THIS POSITION HAS BEEN A CCEPTED BY THE AO. IT WAS ALSO SHOWN TO THE AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THAT THE CASH ADVANCES RECEI VED FROM CUSTOMERS WERE DULY RECORDED IN THE BOOKS OF ACCOUN TS AND NECESSARY EVIDENCES WERE ALSO PRODUCED IN THE FORM OF CONFIRMATIONS/LEDGER ACCOUNTS. IT WAS ALSO STATED THAT SINCE THESE CASH TRANSACTIONS WERE DULY RECORDED IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE THERE WAS NO QUESTION OF O N MONEY BEING RECEIVED ON THE SALE OF LAND IN PARA 8.9. TH E AO HAS NOT ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 17 DISPUTED THAT THE RECEIPTS ISSUED BY THE ASSESSEE F OR ON MONEY HAS NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS . THEREFORE, ASSESSEE CONTENDED THAT NO ADDITION CAN BE MADE IN RESPECT OF ON MONEY WHEN THE TRANSACTIONS WERE DULY RECORDED I N THE BOOKS OF ACCOUNTS. THE ASSESSEE ALSO FILED BEFORE THE AO, CONFIRMATIONS FROM THE CUSTOMERS AND ALSO SUBMITTED THAT SINCE THE ASSESSEE HAS NOT RETURNED ANY INCOME ON THE SAL E OF FLATS, THE SO CALLED ON MONEY COULD NOT BE ASSESSED TO TAX DURING THE YEAR UNDER CONSIDERATION. IT WAS ALSO CONTENDED BY THE AO THAT THE ON MONEY RECEIVED WAS PART OF THE SALE OF PROPE RTY MADE IN A.Y 2014-15 AND 2015-16 WHEREAS AS A MATTER OF FACT NO SALE OF PROPERTY WAS TAKEN PLACE IN THESE YEARS. THEREFORE , THE ON MONEY RECEIVED CAN AT BEST BE TREATED AS BOOKING AD VANCES AND NO INCOME UNDER CONSIDERATION AND WHATEVER HAS BEEN RECEIVED IS DULY BOOKED AND SHOWN AS ADVANCE FROM CUSTOMERS. 18. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DI SMISSED THE APPEAL OF THE ASSESSEE ON THIS ISSUE BY IGNORING TH E FACT THAT TRANSACTIONS OF RECEIPT OF ON MONEY AS EVIDENCED BY THE RECEIPTS ISSUED TO THE BUYERS WERE DULY RECORDED IN THE BOOK S OF ACCOUNTS. THE LD. CIT(A) COMPLETELY IGNORED THE EV IDENCES FILED BY THE ASSESSEE QUA THE TRANSACTIONS OF RS.103.65 L AKHS IN CASH AND RECORDED IN THE BOOKS OF ACCOUNTS. 19. AFTER HEARING THE RIVAL PARTIES AND PERUSING TH E MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THOUGH SOME EN TRIES WERE FOUND IN THE SEARCHED MATERIAL AGGREGATING TO RS.1, 03,65,000/- BEING RECEIVED IN CASH FROM VARIOUS CUSTOMERS WHICH WERE DULY TALLYING WITH THE PERSONS TO WHOM THE FLATS WERE SO LD. OUT OF THE SAID MONEY RECEIVED IN CASH RS.40 LAKHS PERTAINED T O A.Y. 2014- ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 18 15 AND RS.63.65 LAKHS RELATES TO A.Y. 2015-16. AF TER PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT TH E ASSESSEE HAS DULY ACCOUNTED FOR ALL THE RECEIPTS ISSUED TO T HE CUSTOMERS FROM WHOM THE SAID CASH WAS RECEIVED AND DULY RECO RDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. SINCE THE PROJE CT ENSARA METROPARK WAS AT THE DEVELOPMENT STAGE AND WHATEVE R EXPLAINED WAS INCURRED WAS SHOWN AS WORK IN PROGRES S AT THE YEAR END AND ALSO NO REVENUE WAS OFFERED TO TAX. W E FIND THAT ASSESSEE HAS DULY ACCOUNTED FOR ALL THESE ENTRIES I N THE BOOKS OF ACCOUNTS AND THUS THE MERE FACT THAT THE MONEY HAS BEEN RECEIVED IN CASH BY THE ASSESSEE WOULD NOT JUSTIFY THE ORDER OF LD. CIT(A) CONFIRMING THE ORDER OF AO WHEREIN IT HA S BEEN HELD THAT MONEY RECEIVED BY ISSUING VARIOUS RECEIPTS REP RESENT THE ON MONEY. THE STAND OF THE AUTHORITIES BELOW APPEARS TO BE CONTRARY TO THE FACTS ON RECORD AS THE MONEY WHICH HAS BEEN ALLEGED TO BE ON MONEY IS DULY RECORDED IN THE BOOK S OF ACCOUNTS. IN SUCH A SCENARIO WE ARE NOT IN AGREEME NT WITH THE CONCLUSION DRAWN BY THE LD. CIT(A) AND ACCORDINGLY WE DIRECT THE AO TO DELETE THE ADDITION. ITA NO.1296/M/2019 20. GROUND NO.1 & 2 IN ITA NO.1296/MUM/2019 ARE IDE NTICAL TO THE GROUNDS IN ITA NO. 1295/MUM/2019 WHICH HAVE DECIDED IN FAVOUR OF THE ASSESSEE HEREINABOVE. THEREFORE OU R DECISION IN ITA NO. 1295/MUM/2019 WOULD, MUTATIS MUTANDIS, APP LY TO THESE GROUNDS AS WELL. ACCORDINGLY THE GROUND NO. 1 & 2 ARE ALLOWED. ITA NOS.1293, 1294, 1295 & 1296/M/2019 M/S. LUXORA INFRASTRUCTURE PVT. LTD. 19 21. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2020. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 21.04.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.