ACIT, Jaipur V. FUTURE BUILDESTATES P LTD., Jaipur

ITA 146/JPR/2013

• Counselvise Citation: 14623114 RSA 2013
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: MRIDUL GOYAL
• Keywords: Unexplained investment; Unexplained expenditure; Document seized; Cost of acquisition; Documents seized
• Section: 69

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI H.M. MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER) I.T.A. NO. 146/JP/2013 ASSTT. YEAR- 2008-09 THE ASSTT. COMMISSIONER OF M/S FUTURE BUILDESTATE S PVT. LTD., INCOME TAX, CENTRAL CIRCLE-2 VRS. B-304, JANTA COLONY, JAIPUR. JAIPUR. PAN NO. AABCF0469N (APPELLANT) (RESPONDENT) I.T.A. NO. 149/JP/2013 ASSTT. YEAR- 2008-09 THE ASSTT. COMMISSIONER OF M/S INTEGRATED BUILD E STATE INCOME TAX, CENTRAL CIRCLE-2 VRS. PVT. LTD., 79 , TALKATORA, JAIPUR. JAIPUR. PAN NO. AABCI6667D (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI D.C. SHARMA, D.R. ASSESSEE BY :- SHRI MRIDUL GOYAL & VIJAY GOYAL. DATE OF HEARING : 30/01/2014 DATE OF PRONOUNCEMENT : 31/01/2014 O R D E R PER: N.K. SAINI, A.M. THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED AG AINST THE SEPARATE ORDERS EACH DATED 29/11/2012 OF THE CIT(A)(CENTRAL) , JAIPUR, RAJASTHAN. COMMON ISSUES HAVING IDENTICAL FACTS ARE INVOLVED I N THESE APPEALS, WHICH WERE ITA 146 & 149/JP/2013 2 HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE WILL DEAL WITH ITA NO. 146/JP/2013, FO LLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INVESTMENT ON PURCHASE OF LAND AT RS. 1,31,02,000/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 1,31,02,000/- WHICH WAS BASED ON A DOCUMENT, I.E. P AGE NO. 37 OF ANNEX-A-57, SEIZED DURING THE COURSE OF SEARCH AND THE CONCLUSION ABOUT ITS CONTENTS DRAWN BY THE A.O. WAS ALSO CORRO BORATED BY OTHER SEIZED DOCUMENTS (PAGE NO. 142 OF ANNEX.A-24 & PAGE NO. 77 OF ANNEX.-A-40). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN LAW AS WELL AS ON FAC TS IN DELETING THE ADDITION BASED ON THE CONCLUSION OF THE A.O. DERIVE D FROM CONTENTS OF A DOCUMENT DESPITE THE FACT THAT THE CONTENTS WE RE WRONGLY EXPLAINED BY THE ASSESSEE UNDER SECTION 131(1) OF T HE IT ACT AS SUBSEQUENTLY ADMITTED IN AN AFFIDAVIT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN LAW AS WELL AS ON FACT S OF THE CASE IN DELETING THE ADDITION OF RS. 1,31,02,000/- IN SPITE OF THE FACT THAT EVEN THE CHANGED EXPLANATION OF THE ASSESSEE ABOUT THE CONTENTS OF THE SEIZED DOCUMENTS SUBMITTED IN THE AFFIDAVIT ALS O PROVED WRONG FROM THE CONTENTS OF CERTAIN OTHER SEIZED DOCUMENTS . 5. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 3. THE GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL R ELATES TO THE DELETION OF ADDITION OF RS. 1,31,02,000/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF A ITA 146 & 149/JP/2013 3 DOCUMENT I.E. PAGE NO. 37 OF ANNEXURE-A-57 SEIZED D URING THE COURSE OF SEARCH. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS COVERED V IDE ORDER DATED 22/6/2012 IN ITA NO. 962/JP/2011 IN THE CASE OF M/S RISING BUILD ESTATE PVT. LTD.. IT WAS ALSO STATED THAT THE LD. CIT(A) DELETED THE IMPUGNED ADD ITION BY FOLLOWING THE SAID DECISION WHEREIN ON THE BASIS OF SAME DOCUMENT, THE ADDITION WAS MADE. 4. THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. D.R.. HOWEVER, HE SUPPORTED THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER. 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT A SIMILAR ISSUE WAS SUBJ ECT MATTER OF THE DEPARTMENTAL APPEAL IN ITA NO. 962/JP/2011 FOR THE A.Y. 2007-08 IN THE CASE OF THE DCIT, CENTRAL CIRCLE-2, JAIPUR VS. M/S RISING BUILDESTATE PVT. LTD., JAIPUR WHEREIN THE SIMILAR ADDITION ON THE BASIS OF SAME DOCUMENT WAS DELETED BY THE LD. CIT(A) AND THE ITAT VIDE ORDER DATED 22/9/2012 CONFIRMED T HE ORDER OF THE LD. CIT(A) AND THE RELEVANT FINDINGS HAS BEEN GIVEN IN PARA 7 TO 8.2, WHICH READ AS UNDER:- 7. AFTER GOING THROUGH THE WRITTEN SUBMISSIONS FIL ED ON BEHALF OF THE ASSESSEE, WE NOTED THAT THE WRITTEN SUBMISSIONS FIL ED HERE BEFORE THE TRIBUNAL ARE ALMOST SIMILAR TO THE WRITTEN SUBMISSI ONS FILED BEFORE LD. CIT (A). THE LD. CIT (A) HAS REPRODUCED THE WR ITTEN SUBMISSIONS FILED BEFORE HIM IN HIS ORDER WHICH HAS BEEN INCORPORATED IN THIS ORDER ALSO. WE HAVE ALSO TAKE N INTO ITA 146 & 149/JP/2013 4 CONSIDERATION THE ORDER OF ASSESSING OFFICER, ORDER OF LD. CIT (A) AND ARGUMENT OF LD. CIT D/R AND FOUND THAT LD. CIT (A) HAS GIVEN A DETAILED REASONING FOR DELETING THE ADDITION. TH E FINDING OF LD. CIT (A) REMAINED UNCONTROVERTED. THE LD. CIT (A) H AS TAKEN INTO CONSIDERATION MOST OF THE REASONS TAKEN BY ASSESSIN G OFFICER FOR MAKING THE ADDITION AND THEREAFTER EXPLANATION FILE D BY ASSESSEE BEFORE ASSESSING OFFICER AS WELL AS BEFORE HIM. TH E LD. CIT (A) HAS ALSO TAKEN INTO CONSIDERATION THE REMAND REPORT AND RE-JOINDER AND THEN ONLY HAS COME TO CONCLUSION THAT THERE WAS NO MATERIAL BEFORE THE ASSESSING OFFICER TO HOLD THAT RS. 4,00, 00,000/- WAS THE COST OF THE LAND PURCHASED BY ASSESSEE. ACCORDINGL Y, THE IMPUGNED ADDITION MADE BY ASSESSING OFFICER WAS DELETED. FI NDINGS OF LD. CIT (A) HAVE BEEN RECORDED IN PARAS 5.1 TO 5.10 AT PAGES 42 TO 51 WHICH ARE AS UNDER :- 5.1 I HAVE CAREFULLY CONSIDERED THE WRITT EN SUBMISSION AND PAPER BOOK FILED BY THE AR OF THE ASSESSEE, ASS ESSMENT ORDER, REMAND REPORT, THE MATERIAL AVAILABLE ON REC ORD AND CASES CITIED BY BOTH THE PARTIES. ON PERUSAL OF ASS ESSMENT ORDER, I FIND THAT THE AO HAS FINALLY MADE THE ADDITION OF RS. 2,61,66,611/- BY APPLYING THE PROVISIONS OF SECTION 69B OF INCOME TAX ACT. FROM THE ASSESSMENT ORDER, I FIND T HAT THE AO HAS MADE THE ADDITION ON THE BASIS OF NOTING AVAILA BLE ON THE SEIZED PAGE 37 OF EXHIBIT A-57, SEIZED FROM 73-74, TALKATORA JAIPUR. THE AO HAS ALSO REFERRED ANOTHER SEIZED PAP ERS PAGE 142 AND 159 TO 161 OF ANNEXURE A-24 (PUSHP GARDEN)/ PAGE 73- 76 OF ANNEXURE A-40 (BHAVGARH) SEIZED FROM 73-74 TO SUPPORT HER VIEW THAT THE MARKET VALUE OF THE PROPERTIES IS NOT MENTIONED OVER THE SEIZED PAGE 37 OF EXHIBIT A-57. THE AO FUR THER ITA 146 & 149/JP/2013 5 MENTIONED THAT THE SHRI PAWAN LASHKARY HAS MADE INC ORRECT STATEMENT IN THE POST SEARCH INQUIRY, WHEREIN HE ST ATED THAT AREA OF THE LAND IS MENTIONED UNDER COLUMN 4 OF THE PAGE 37 OF EXHIBIT A-57. THE AO MENTIONED THAT SH. PAWAN LASHK ARY HAS FILED SWORN AFFIDAVIT DURING THE COURSE OF THE ASSE SSMENT PROCEEDINGS EXPLAINING THE CONTENTS OF THE ABOVE RE FERRED SEIZED PAPER WHEREIN HE EXPLAINED THAT THE MARKET VALUE OF THE LAND FOR THE JOINT VENTURE PURPOSE WAS MENTIONED OVER THE SA ID SEIZED PAPER. THE AO MENTIONED THAT THIS IS WRONG BECAUSE THE MARKET VALUE OF THE LAND WAS 22.79 CRORES NOT 4.00 CRORES. THE AO MENTIONED THAT THE WIDE VARIATION IN SHARE OF ASSES SEE GROUP IN THE JOINT VENTURE SHOWS THAT THE ASSESSEES EXPLANA TION AS REGARD FIGURE MENTIONED IN COLUMN 1 OF SEIZED PAPER 37 OF ANN A-57 IS ALSO NOT CORRECT. 5.2 I HAVE CAREFULLY EXAMINED THE ABOVE REFERRED SE IZED PAGE 37 OF A-57. NO NARRATION IS MENTIONED OVER THIS SEI ZED PAGE TO ASCERTAIN WHETHER COST IS MENTIONED OR MARKET VALUE IS MENTIONED OR SOME OTHER VALUE IS MENTIONED. ANY DAT E OR EVEN THE MONTH OR EVEN THE YEAR IS NOT AT ALL MENTIONED SO AS TO ARRIVE AT THE DEFINITE CONCLUSION WHETHER IT IS COST OR MA RKET VALUE OR SOME OTHER VALUE ON PARTICULAR DATE/MONTH/TIME. TH E AO HAS TRIED TO NEGATE THE ARGUMENT OF A.R. BY OBSERVING T HAT THE MARKET VALUE IS NOT MENTIONED IN THE COLUMN 4 OF TH E IMPUGNED SEIZED PAPER, THEREFORE, AS PER THE A.O., COST MUST HAVE BEEN MENTIONED, BUT A.O. FAILED TO PROVE BY POSITIVE EV IDENCE THAT THE COST IS MENTIONED IN COLUMN 4 OF THE SEIZED PAPER. FURTHER, THE AO FAILED TO EXPLAIN THE NEXUS OF THE FIGURES MENTI ONED IN COLUMN 1 AND 3 WITH REFERENCE TO FIGURE OF THE ALLE GED COST ITA 146 & 149/JP/2013 6 MENTIONED IN COLUMN 4 OF THE IMPUGNED SEIZED PAPER. IN COLUMN 1, THE FIGURE 22.50 IS MENTIONED AND FIGURE 169 IS MENTIONED IN COLUMN 3 AGAINST PUSHP GARDEN. THE AO HERSELF HAS H ELD THAT FIGURE 22.50 DOES NOT INDICATE COST OR MARKET VALUE PER BIGHA OF THE LAND. HOWEVER, THE FIGURE 22.50 CANNOT BE A MEA NINGLESS FIGURE, PARTICULARLY WHEN IT IS WRITTEN WITH REFERE NCE TO FIGURE 400 MENTIONED IN COLUMN 4 OF THE IMPUGNED SEIZED PA PER. 5.3 I HAVE ALSO CAREFULLY EXAMINED ANOTHER SEIZED P APER OF EXHIBIT A-24/A-40 REFERRED BY THE AO IN ASSESSMENT ORDER. THE SEIZED PAGE 142 OF ANNEXURE A-24 IS AN EMAIL CORRES PONDENCE IN BETWEEN SHRI G.K. SHARMA AND [e-mail] WHEREIN THE LAND RATE AND INTEREST IN JOINT VENTURE WAS ASKED TO SEND AND REPLIES WAS GIVEN. OVER THIS PAPER FIGURE 13000- 17534 AND 6000-62000 IS HAND WRITTEN WHICH INDICATE S THAT FIRST FIGURE IS LAND RATE QUOTATION AND SECOND FIGURE IS AREA OF THE LAND. IT APPEARS THAT THE ASSESSEE GROUP HAS QUOTED RS. 13000/- PER SQ YARD FOR 17534 SQ. YARD LAND IN PUSHP GARDEN . THEREFORE THIS PAPER DOES NOT INDICATE THE COST OF THE LAND B UT QUOTATION FOR THE LAND RATE FOR JOINT VENTURE PURPOSE. THE S EIZED PAPER 159 TO 161 OF ANNEXURE A-24 AND PAGE 73-76 OF ANNEX URE A-40 IS THE PROJECTION FOR THE JOINT VENTURE FOR PUSHP G ARDEN AND BHAVGARH SCHEME RESPECTIVELY PREPARED BY SOME DEVEL OPER AND APPARENTLY GIVEN TO SH. LASHKARY AS PROPOSAL FOR DI SCUSSION. ON PAGE 161 OF ANNEXURE A-24 WORKING FOR LAND AREA, BUILT UP AREA, COST OF LAND, COST OF BUILDING, MARKETING EXP ENSES, ADMINISTRATIVE EXPENSES ETC ARE ESTIMATED/ PROJECTE D FOR JOINT VENTURE. AT BOTTOM OF THE PAGE 20% IS MENTIONED AGA INST COST % TO BE PAID UPFRONT TO OWNER. THE TOTAL LAND AREA IS TAKEN 17534 ITA 146 & 149/JP/2013 7 SQ YARDS AND LAND COST IS TAKEN RS. 13000/- PER SQ YARDS AND TOTAL COST OF THE LAND IS TAKEN RS. 22,79,42,000/-O N THIS SEIZED PAPER. ON PAGE 160 OF THE SEIZED ANNEXURE A-24 PRO JECTION IS MADE FOR INPUTS, COSTINGS AND REVENUES. ON PAGE 159 OF THE SEIZED ANNEXURE A-24 PROJECTION WAS MADE FOR FUND FLOW ASSUMING ALL THE FLATS ARE SOLD WITHIN 6 MONTHS. IN THIS PA PER LAND EXPENSES ARE TAKEN RS. 4,55,88,400/- AS OUTFLO WS OF FUND IN 1 ST MONTH OF 1 ST YEAR . RS. 4,55,88,400 IS EXACTLY 20% OF RS. 22,79,42,000/- . THEREFORE, THE FIGURE RS. 22,79,42 ,000/- IS FULL VALUE OF THE LAND ESTIMATED FOR JOINT VENTURE AND T HE FIGURE 4,55,88,400/- IS THE AMOUNT TO BE PAID TO THE LAND OWNER AGAINST THE JOINT VENTURE AS INDICATED BY THE ABOVE SAID SE IZED PAPERS. OBVIOUSLY THESE PAPERS ARE TOTALLY PROJECTIONS/ EST IMATIONS OF THE JOINT VENTURE, WHICH HAVE BEEN PREPARED BY SOME THIRD PARTY DEVELOPERS. THEREFORE, THE COST OF THE LAND IN TH E HANDS OF THE LAND OWNER CANNOT BE VISUALIZED FROM THESE SEIZED P APERS. STATEMENTS OF SHRI PAWAN LASHKARY RECORDED DURING T HE POST SEARCH INQUIRY HAVE BEEN RIGHTLY REJECTED BY THE AO AND ARE OF NO HELP FOR THE ASSESSING OFFICER. DURING THE COURS E OF THE ASSESSMENT, THE ASSESSEE FILED SWORN AFFIDAVIT OF S HRI PAWAN LASHKARY AND RELEVANT PARA OF THE AFFIDAVIT IS AS U NDER:- WE PURCHASED THE AGRICULTURAL LAND AND MADE FURTHE R EXERCISE FOR 90B PROCEEDINGS, CONVERSION AND APPROVAL OF THE PROJECTS. THIS AND TIME-SPAN RESULTED SUBSTANTIAL INCREASE IN THE MARKET RATE OF THE LAND. WE ESTIMATED THE MARKET RATE OF EACH DEVELOPED LAND (OFFERED FOR NEGOTIATION FOR JOINT V ENTURE/ COLLABORATION) AT THE TIME OF NEGOTIATION AND SUCH ESTIMATED MARKET VALUE OF THE LAND WAS MENTIONED IN COLUMN NO 4 OF THE ITA 146 & 149/JP/2013 8 SAID SEIZED PAPER. WE OFFERED THE PROSPECTIVE PARTY THAT OUR CAPITAL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT A GAINST THE CAPITAL CONTRIBUTION OF LAND FOR THE JOINT VENTURE/ COLLABORATION, IF THE JOINT VENTURE/COLLABORATION IS MATERIALIZED. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATION BY OMIT TING FIVE ZERO. 5.4 FROM THE ABOVE AFFIDAVIT, THE ASSESSEE WANTED T O EXPLAIN THAT MARKET VALUE OF THE LAND WAS ESTIMATED FOR THE JOINT VENTURE AND SUCH JOINT VENTURE SHARE BEING ESTIMATED UPFRON T AMOUNT OF MARKET VALUE OF THE LAND WAS MENTIONED IN COLUMN 4 OF THE SEIZED PAPER. THE ASSESSEE FURTHER MENTIONED IN THE SAME PARA THAT ITS CAPITAL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT AGAINST THE CAPITAL CONTRIBUTION OF THE LAND FOR JO INT VENTURE. IF WE READ THIS PARA OF THE AFFIDAVIT WITH REFERENCE T O FIGURE MENTIONED IN SEIZED PAGE 159-161 OF ANNEXURE A-24, WE FIND THAT FULL ESTIMATED MARKET VALUE OF THE LAND WAS 22 .79 CRORES AND RS. 4.55 CRORES WAS TO BE PAID IN CHEQUE/CASH T O THE LAND OWNER AGAINST THE LAND OFFERED FOR JOINT VENTURE (O F COURSE, IF THE JOINT VENTURE PROJECT IS CRYSTALISED ). IF WE READ THE ABOVE DETAILS CAREFULLY, WE FIND THA T THE ASSESSEE WANTS TO SAY THE MARKET VALUE OF THE LAND TO BE CRE DITED IN ITS ACCOUNT FOR JOINT VENTURE PURPOSE, WHICH CANNOT BE FULL VALUE OF THE LAND IN JOINT VENTURE CASES. IT IS COMMON PRACT ICE OF THE TRADE THAT THE LAND OWNER IS PAID PART AMOUNT OF TH E VALUE OF THE LAND IN CHEQUE/CASH AND BALANCE AGAINST THE LAND VA LUE IS PAYABLE BY SHARING THE CONSTRUCTION AREA IN BETWEEN THE DEVELOPER AND LAND OWNER. 5.5 WITHOUT PREJUDICE TO ABOVE, IT MAY BE MENTIONED THAT IN FACT, OUT OF VARIOUS PAPERS REFERRED BY THE A.O. IN THE ITA 146 & 149/JP/2013 9 ASSESSMENT ORDER, EARLIER THE A.O. HAS MAINLY RELIE D ON PAGE NO. 159 OF ANN. A-24, WHEREIN AS PER THE A.O., THE LAND EXPENSES OF RS. 455,88,400/- IS MENTIONED AND THE A.O. HAS GIVE N SHOW CAUSE LETTER DATED 30.11.2010 TO THE APPELLANT THAT THE DOCUMENT ANN. A-24/159 IS PART OF THE PUSHP GARDEN GROUP HOU SING SCHEME AND LAND EXPENSE ARE WRITTEN AS RS. 4,55,88, 400/- IN THE LIGHT OF ABOVE, ASSESSEE WAS REQUIRED TO SHOW CAUSE WHY SHOULD NOT DIFFERENTIAL AMOUNT I.E RS. 4,55,88,400/- - RS . 1,50,91,463/- (I.E THE RECORDED AMOUNT) BE ADDED BACK AS UNDISCL OSED EXPENDITURE FOR THE YEAR. EVEN IN THE SUBSEQUENT SH OW CAUSE NOTICE DATED 6.12.2010, THE A.O. HAS AGAIN ASKED TH E APPELLANT TO EXPLAIN AS TO WHY SHOULD NOT RS. 4,55,88,400/- B E CONSIDERED AS UNEXPLAINED EXPENDITURE IN LAND AT VILLAGE MURL IPURA TEHSIL SANGANER.( I.E. NOW THE FULL AMOUNT OF RS. 4.55 CRO RE). EVEN IN THE THIRD SHOW CAUSE /OPPORTUNITY GIVEN TO THE APPE LLANT, THE A.O. HAS REITERATED HER VIEW OF ADDITION OF RS. 4.5 5 CRORE BASED ON PAGE NO. 159 OF A-24, WHICH WAS NOW FURTHER SUPP ORTED WITH OTHER DOCUMENTS REFERRED IN THIS OPPORTUNITY SO GIV EN TO THE APPELLANT. HOWEVER, AFTER CONSIDERING THE REPLY OF ALL THESE SHOW CAUSE NOTICES, THE A.O. WAS SATISFIED THAT AMOUNT O F RS. 4.55 CRORE ( MORE PARTICULARLY RS. 4,55,88,400/-) IS NO T THE COST OF THE LAND TO THE ASSESSEE BUT IT IS THE 20% UPFRON T CHARGES OF THE ESTIMATED PROPOSED VALUE OF LAND AMOUNTING TO RS. 22,79,42,000/- AS ESTIMATED BY SOME DEVELOPER FOR T HE PROPOSED PROJECT OF JOINT VENTURE ON THIS LAND OF THE APPELL ANT. THE A.O. HAS MENTIONED THIS FACT OF CONTENTION OF THE ASSESS EE ON THIS ISSUE BEING CORRECT AT PARA 8 OF THE ASSESSMENT ORD ER. (HOWEVER, SIMULTANEOUSLY, THE A.O. HAS STATED THAT IT SHATTER S THE EXPLANATION OF THE ASSESSEE REGARDING PAGE 37 OF AN N. A-57 ITA 146 & 149/JP/2013 10 GIVEN DURING THE COURSE OF SEARCH THAT IN COLUMN NO .4 CODING WAS DONE IN TWO ZEROS AND THE FIGURE REPRESENTED TH E LAND AREA IN SQ. YD. THIS OBSERVATION OF A.O. IS CORRECT.). 5.6 IT WAS ONLY AT THE LAST I.E AT THE TIME OF FOU RTH OPPORTUNITY/ SHOW CAUSE THAT THE A.O., ON 13.12.10 HAS NOW PROPOSED DIFFERENT AMOUNT NAMELY RS 4.00 CRORE AS I NVESTMENT IN PURCHASE OF LAND ON THE BASIS OF THE ENTRY AT CO LUMN NO. 4 OF PAGE 37 OF ANN A-57 NAMELY 400 AND AFTER BEING N OT SATISFIED WITH THE EXPLANATION, IN THE FINAL ASSESSMENT ORDER , THE A.O. HAS HELD RS. 4.00 CRORE AS TOTAL PURCHASE COST. HOWEVE R, ON PERUSAL OF THE REPLY OF THE APPELLANT AND OTHER RELEVANT DE TAILS AS ALSO DISCUSSED IN EARLIER PARAS, IT IS SEEN THAT THE EXP LANATION OF FIGURE 400 SO GIVEN BY THE APPELLANT IS ACCEPTABL E THAT THE SAME REPRESENTS THE ESTIMATED UPFRONT AMOUNT TO BE RECEIVED BY THE LAND OWNER IN RESPECT OF SOME PROPOSED PROJECT OF JOINT VENTURE, WHICH IS ALSO CLEAR FROM ANOTHER SPECIFIC PROPOSAL FOR SUCH PROJECT HAVING DETAILS ON PAGE 159 TO 161 OF A NN. A-24, WHEREIN UPFRONT PRICE IS SHOWN AT RS. 4.55 CRORE WH ICH HAS BEEN EFFECTIVELY ACCEPTED BY A.O, AS MENTIONED SUPRA. FO R SOME VARIATION BETWEEN THE TWO FIGURES NAMELY 400METNI ONED ON PAGE 37 OF ANN. A-57 AND RS. 4.55 CRORE AS PER PAG E 159 TO 161 OF ANN..A-57, THE ASSESSEE HAS REPLIED VIDE LETTER DATED 11.12.2010, THE RELEVANT PARA OF WHICH IS AS UNDER: - AS REGARD PAGE 37 OF EXHIBIT A-57 (SEIZED FROM 73- 75 TAL KATORA, JAIPUR), WE WOULD LIKE TO MENTION HERE THAT THIS PAGE WAS PREPARED AT DIFFERENT POINT OF TIME AT THE TIME OF NEGOTIATION WITH SOME OTHER PARTY AND SOME FIGURES/NOTINGS WERE WRITTEN ON THIS PAPER DURING THE DISCUSSION WITH SOME OTHER PA RTY AND ITA 146 & 149/JP/2013 11 FIGURE MENTIONED IN COLUMN NO 4 REPRESENTS TO AMOUN T OFFERED FOR CREDIT IN ASSESSEES CAPITAL ACCOUNT AGAINST TH E LAND CONTRIBUTION BY THE ASSESSEE (OR SAY UPFRONT PRICE) ; IF THE JOINT VENTURE/COLLABORATION IS MADE ON THE SHARING BASIS MENTIONED IN COLUMN NO. 1. THE UPFRONT PRICE AND SHARING RATIO D EPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NA TURE AND QUALITY OF DEVELOPMENT WORK TO BE CARRIED OUT BY TH E DEVELOPER, INVOLVEMENT OF INVESTMENT BY DEVELOPER, EXPECTED PR OFIT FROM THE SHARE RECEIVED BY THE OWNER IN THE BUILT UP AREA, PERIOD OF COMPLETION OF PROJECT, SIZE OF PROJECT, EXPECTED FA R FROM JDA, EXPECTED AVAILABILITY OF HEIGHT ETC. THUS, THE UPF RONT PRICE AND SHARING RATIO MAY VARY PERSON TO PERSON AND PROJECT TO PROJECT. 5.7 THEREFORE, THE FIGURE 400 MENTIONED IN THE CO LUMN 4 OF THE SEIZED PAPER 37 OF ANNEXURE A-57 SHOULD BE READ WITH REFERENCE TO FIGURE RS. 4,55,88,400/- MENTIONED ON SEIZED PAPER 159 OF ANNEXURE A-24 AND NOT WITH REFERENCE TO FIGU RE 22,79,42,000 MENTIONED ON SEIZED PAPER 161 OF ANNEX URE A-24. THE ASSESSEE EXPLAINED THE DIFFERENCE THAT NOTING O N PAGE 37 OF ANNEXURE A-57 WAS MADE WITH REFERENCE TO THE PROPOS AL OF JOINT VENTURE RECEIVED FROM A DIFFERENT PARTY, THEREFORE, SAME FIGURE OR PROPOSAL CAN NOT BE FROM TWO DIFFERENT PARTIES. 5.8 THE OTHER POINT TO BE NOTED IS THAT THE APPELLA NT HAS ALSO GIVEN EXPLANATION OF ENTRIES IN COLUMN NO. 1 OF PAG E 37 OF A-57 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT TH E SAME IS THE PERCENTAGE SHARING IN THE PROPOSED JOINT VENTURE. T HE A.O. HAS DISBELIEVED THE EXPLANATION OF THE APPELLANT ON THE GROUND THAT THE JOINT VENTURE SHARING IS FOUND TO BE HIGHLY VAR YING. HOWEVER, THE A.R. HAS EVEN GIVEN EXPLANATION OF THESE VARYIN G % ALSO ITA 146 & 149/JP/2013 12 PARTICULARLY REGARDING JOINT SHARING BEING ONLY 18. 75% IN SPORTS CITY, WHICH IS ON ACCOUNT OF THE FACT THAT T HE SAID LAND WAS QUITE UNECONOMICAL HAVING LOW VALUE AS THE SAME WAS UNDER RIVER BED WHICH IS CLEAR FROM THE JAMBANDI, WHEREIN THE LAND WAS SHOWN AS KHATALI WHICH MEANS THE LAND NE AR RIVER BED AS IS CLEAR FROM THE DEFINITION OF THE KHATALI FURNISHED BY THE A.R. IN THE WRITTEN SUBMISSION. SIMILARLY, FOR HIGH SHARING RATIO OF 80% IN R.R. FARM, THE A.R. HAS EXPLAINED T HAT THIS WAS THE JOINT VENTURE OF THE FARMHOUSE WHEREIN NOT MUCH OF INVESTMENT IS REQUIRED BY THE DEVELOPER AND IT IS M AINLY THE VALUE OF THE LAND AND ACCORDINGLY LAND OWNER WOULD HAVE THE MAIN AND MAJOR SHARE. THESE EXPLANATIONS SO GIVEN B Y THE A.R. CANNOT BE JUST REJECTED AND ARE RATHER PLAUSIBLE. T HUS IT IS CLEAR THAT EXPLANATION OF THE FIGURE IN COLUMN NO. 1 GIVE N BY A.R. IS NOT UN-ACCEPTABLE. EVEN FOR THE MOMENT AND FOR THE SAKE OF ARGUMENT, THE EXPLANATION OF COLUMN NO. 1, SO GIVEN BY THE APPELLANT IS NOT ACCEPTED TO BE CORRECT, AS WAS OBS ERVED BY THE A.O. IN THE ASSESSMENT ORDER, THEN ON THE OTHER HAN D THEN IT IS NOTICED THAT THE A.O. HAS NOT BEEN ABLE TO GIVE ANY SORT OF EXPLANATION FOR THE FIGURE IN COLUMN NO. 1, WHILE T RYING TO DECIPHER/DECODE THE ENTRIES ON THIS PAGE. THUS A.O. HAS NOT BEEN ABLE TO EXPLAIN ENTRIES IN COLUMN NO. 1 OF THE IMPUGNED PAGE AND ALSO COULD NOT CORRELATE THEM WITH OTHER E NTRIES ON THIS PAGE. SIMILARLY, THE A.O. HAS TREATED THE ENTRY I N COLUMN NO. 4 AS THE COST PRICE OF THE LAND WITHOUT ANY CORRELATI ON OR JUSTIFICATION OR THE BASIS FOR THE SAME, AFTER JUST MERELY REJECTING THE EXPLANATION OF THESE ENTRIES GIVEN BY APPELLANT . ITA 146 & 149/JP/2013 13 5.9 I AGREE WITH THE ARGUMENT OF THE LD. A. R THAT FOR MAKING ADDITION U/S 69 B, THE ONUS IS ON THE DEPARTMENT TO PROVE POSITIVELY THAT THE APPELLANT HAS MADE UNACCOUNTED INVESTMENT AND THIS ONUS CANNOT BE DISCHARGED MERELY BY REJECT ING THE EXPLANATION GIVEN BY THE APPELLANT. SUCH ADDITION T O BE MADE U/S 69 B IS CONTRADISTINCT FROM THE CLAIM OF THE DEDUCT ION OR ALLOWANCE MADE BY THE ASSESSEE WHEREIN THE ADDITION CAN BE MADE IF THE EVIDENCE SO FURNISHED OR EXPLANATION SO GIVEN BY THE APPELLANT IS FOUND TO BE LACKING OR INCORRECT/REJEC TABLE. IN THE CASE OF ADDITION U/S 69, THE A.O. HAS TO BRING POSI TIVE MATERIAL TO ESTABLISH UNACCOUNTED INVESTMENT/PAYMENT. IN THE I NSTANT CASE, NO POSITIVE MATERIAL COULD BE BROUGHT OUT ON RECORD TO ESTABLISH THAT THE IMPUGNED SEIZED PAGE IN COLUMN NO. 4 REFLE CTS THE ACTUAL COST OF THE PROPERTIES NAMED IN COLUMN NO. 3 . 5.10 THE AO HAS RELIED ON THE DECISION OF DELHI HIGH COU RT IN THE CASE OF MAHAVIR WOOLEN MILLS VS CIT (DEL) 24 5 ITR 297 (2000). IN THIS CASE PART OF THE ENTRIES MENTIONED IN THE SEIZED PAPER TALLIED WITH THE ENTRIES IN THE LEDGER ACCOUN TS MAINTAINED BY THE ASSESSEE. BUT IN THE CASE OF THIS ASSESSEE T HE ENTRIES OF THE IMPUGNED SEIZED DOCUMENT HAS NO CORRELATION WITH TH E BOOKS OF ACCOUNT AND OTHER SEIZED DOCUMENTS TO SHOW THE ACTU AL COST OF THE PROPERTIES IS MENTIONED ON PAGE 37 OF ANNEXURE A-57. ON THE OTHER HAND, ANOTHER DECISION OF DELHI HIGH COUR T NAMELY COMMISSIONER OF INCOME TAX VS. S.M. AGGARWAL (2007) 293 ITR 43 (DEL) AND COMMISSIONER OF INCOME TAX VS. GIRISH CHUDDAR (2008) 296 ITR 619 (DEL) AND OTHER DECISIONS OF THE VARIOUS ITAT CITED BY THE ASSESSEE SUPPORT THE CASE OF THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS HE LD THAT A.O. ITA 146 & 149/JP/2013 14 HAS NOT BEEN SUCCESSFUL IN PROVING THAT COLUMN NO. 4 OF SEIZED PAGE 37 OF ANN. A-57 REFLECTS THE COST/PURCHASE PRI CE OF THE LAND AND ON THE OTHER HAND EXPLANATION OF APPELLANT ON T HIS ISSUE CAN NOT BE CONSIDERED TO BE INCORRECT AND IS RATHER SAM E IS FOUND TO BE PLAUSIBLE AND ACCORDINGLY ADDITION OF RS. 2,61,6 6,611/- SO MADE BY A.O., HOLDING RS. 4.00 CRORE TO BE PURCHA SE PRICE OF LAND, IS HEREBY DELETED. THUS, THE GROUND NO 1, 2 AND 3 ARE DECIDED IN FAVOUR OF THE ASSESSEE. 8. AS STATED ABOVE, NEITHER THESE FINDINGS COULD BE CONTROVERTED NOR ANY OTHER MATERIAL WERE BROUGHT ON RECORD WHICH CAN BE SAID THAT FINDINGS OF LD. CIT (A) ARE NOT CORRECT. THE LD. C IT (A) HAS TAKEN INTO CONSIDERATION THE ASPECT THAT FIRSTLY THE ASSE SSING OFFICERS VIEW WAS THAT THE COST OF LAND WAS RS. 4.55 CRORE O R ODD. THREE SHOW CAUSE NOTICES WERE GIVEN TO THE ASSESSEE FOR E XPLAINING THAT WHY THE COST OF THE LAND BE NOT TAKEN AT RS. 4.50 C RORE OR ODD. ALL THE THREE TIMES, THE EXPLANATION WAS FILED AND THE AO WAS SATISFIED WITH THE EXPLANATION. THEREFORE, THE A.O. HAS NOT T AKEN THE COST OF INVESTMENT AT RS. 4.50 CRORE OR ODD. HOWEVER, AS PE R COLUMN NO. 4 OF PAGE 37 OF EXHIBIT A-57 WHICH WAS SEIZED FROM 73 -75, TALKOTRA, JAIPUR WHERE FIGURE OF 400 WAS MENTIONED, THE AO TO OK THIS VALUE AS COST OF INVESTMENT IN THE PROPERTY. CONTENTS OF PAGE 37 OF ANNEXURE A-57 HAS BEEN TABULATED IN THE ORDER OF LD . CIT (A) AT PAGE 4 WHICH HAS ALSO BEEN REPRODUCED SOMEWHERE ABO VE IN THIS ORDER WHILE INCORPORATING THE FACTS OF THE CASE. N EITHER THE AO COULD CO-RELATE THE FIGURE OF 22.5 MENTIONED IN THE COLUMN NO. 1 NOR THE FIGURE MENTIONED IN COLUMN NO. 3 AS PER BOOKS O F ACCOUNT. THEREFORE, THERE CANNOT BE A PRESUMPTION THAT FIGUR E OF 400 MENTIONED IN COLUMN NO. 4 IS FIGURE OF COST OF LAND PURCHASED BY ITA 146 & 149/JP/2013 15 ASSESSEE. THERE MUST BE SOME CORROBORATIVE EVIDENC E TO HOLD THAT THIS FIGURE IS RELATED TO COST OF THE LAND PURCHASE D BY THE ASSESSEE. WE ARE NOT REPEATING THE EXPLANATION/FINDINGS OF LD . CIT (A) AS FINDING OF LD. CIT (A) IN ITS ENTIRETY HAVE BEEN RE PRODUCED IN THE ABOVE PARA OF THIS ORDER. HOWEVER, AS STATED ABOVE , THE FINDINGS OF LD. CIT (A), IN OUR CONSIDERED VIEW, ARE FINDINGS O F FACT WHICH DOES NOT REQUIRE ANY INTERFERENCE. 8.1. THE LD. CIT (A) ALSO FOUND THAT THE CASES RELI ED UPON BY AO WERE NOT RELEVANT ON THE FACTS OF THE PRESENT CASE WHERE AS CASES RELIED UPON BY LD. COUNSEL OF THE ASSESSEE ARE IN SUPPORT OF THE CASE. THE RATIO OF ALL THESE CASES HAVE ALSO BEEN REPRODUCED SOMEWHERE IN THE ORDER OF LD. CIT (A) WHICH IS ALSO PART OF THIS ORDER. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND NO INFIR MITY IN THE FINDINGS OF LD. CIT (A) WHO HAS DELETED THE ADDITIO N MADE BY AO BY HOLDING THAT HE HAS NOT BROUGHT ANY MATERIAL TO MAK E ANY ADDITION UNDER SECTION 69B. 8.2. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND I N VIEW OF THE DETAILED REASONING GIVEN BY LD. CIT (A) WHICH IS REPRODUCED SOMEWHERE ABOVE IN THIS ORDER, WE HOLD THAT LD. CIT (A) WAS J USTIFIED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER. AC CORDINGLY WE CONFIRM HIS ORDER. 6. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS INVOLVED IN THE AFORESAID REFERRED TO CASE OF THE DCIT, CENTRAL CIR CLE-2, JAIPUR VS. M/S RISING BUILDESTATE PVT. LTD., JAIPUR (SUPRA). SO RESPECTFU LLY FOLLOWING THE AFORESAID ORDER DATED 22/6/2012 IN ITA NO. 962/JP/2012 FOR TH E A.Y. 2007-08 IN THE CASE OF THE DCIT, CENTRAL CIRCLE-2, JAIPUR VS. M/S RISIN G BUILDESTATE PVT. LTD., ITA 146 & 149/JP/2013 16 JAIPUR, WE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND ACCORDINGLY, DO NOT SEE ANY MERIT IN THI S APPEAL OF THE DEPARTMENT. 7. IN ITA NO. 149/JP/2013, IN THE CASE OF THE ACIT , CENTRAL CIRCLE-2, JAIPUR VS. M/S INTEGRATED BUILD ESTATE PVT. LTD., THE ISSU E INVOLVED IS SIMILAR AS WAS INVOLVED IN THE CASE OF THE ACIT, CENTRAL CIRCLE-2 , JAIPUR VS. M/S FUTURE BUILDESTATES PVT. LTD. IN ITA NO. 146/JP/2013 (SUPR A), THE ONLY DIFFERENT IS THAT THE DELETION OF ADDITION IN THIS CASE WAS OF RS. 48 ,83,013/- INSTEAD OF RS. 1,31,02,000/- INVOLVED IN THE CASE OF M/S FUTURE BU ILDESTATES PVT. LTD.. THEREFORE, OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS. 8. IN THE RESULT, BOTH THESE APPEALS OF THE DEPARTM ENT ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2014) SD/- SD/- (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 31/01/2014 * RANJAN COPY FORWARDED TO :- 1. APPELLANT THE ACIT, CENTRAL CIRCLE-2, JAIPUR. 2. RESPONDENT- I. M/S FUTURE BUILDESTATES PVT. LTD ., JAIPUR. II. M/S INTEGRATED BUILD ESTATE PVT. LTD., JAIPU R. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 146 & 149/JP/2013) BY ORDER, AR ITAT JAIPUR.