ROYAL PALMS (I) P.LTD, MUMBAI V. DCIT 13(3)(1), MUMBAI

ITA 1478/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9640 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Bogus purchase; Unexplained cash credit; Loose papers; Peak credit; Fair market value
• Section: 143(3); 142(1); 133A; 133(6); 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D MUMBAI BEFORE SHRI D.T.GARASIA , JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 1478 /MUM/20 1 7 ( / ASSESSMENT YEAR : 20 12 - 13 ) M/S ROYAL PALMS (I) PVT LTD ., ROYAL PALM ESTATE, SURVEY NO.169, AAREY MILK COLONY, GOREGAON EAST, MUMBAI - 400065 / VS. INCOME TAX OFFICER 13 ( 3 )( 1 ), AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ./ PAN : AA BC R9 424R ( / APPELLANT) : ( / RESPONDE NT ) / A SSESSEE BY : SHRI HARIDAS BHATT / RE VENUE BY : SHRI V JUSTIN / DATE OF HEARING : 7 .7 .2017 / DATE OF PRONOUNCEMENT : 22. 0 9 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: THE CAPTIONED IS A PPEAL BY THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 20 12 - 13 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 21 , MUMBAI , DATED 16.1.2017 WHICH IN TURN HA VE ARISE N FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 31.3.2015 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). 2. THE VARIOUS GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER : 2 I.T.A. NO. 1478 /MUM/201 7 GROUND NO. I: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W TH E ELD.CIT(A) ERRED IN CONFIRMING T HE ADDITION OF RS.5.47 CRO R ES ON ACCOUNT OF IMPOUNDED FILE NO.A - 9 ON THE BASIS OF THE JOTTING ON THE LOOSE PAPER AND DIARY AND THE STAMEN RECORDED U/S 133A OF THE ACT; GROUND NO.II: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ELD.CIT(A) ERRED IN CONFI RMING THE ALLEGED ADDITION OF RS.4.94 CRORES AS UNEXPLAINED CASH CREDIT ON ACCOUNT OF IMPOUNDED FILE NO.A - 10, MERELY ON THE BASIS OF STATEMENT RECORDED U/S 133A OF THE ACT. GROUND NO.III: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ELD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2.53 CRORES ON THE BASIS OF A DIARY A - 8 WITHOUT APPRECIATING HE FACT THAT THE ENTRIES DOES NOT BELONG TO THE IMPUGNED ASSESSMENT YEAR; GROUND NO.IV: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW TH E ELD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2.88 CRORES ON ACCOUNT OF ADVANCES RECEIVED FROM GOLDEN ISLE AND THAI HOUSE MERELY ON THE BASIS OF STATEMENTS MADE DURING THE SURVEY; GROUND NO.V: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ELD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7.42 CRORES ON ACCOUNT OF ADVANCES FROM OTHER PROJECTS ON THE BASIS OF DERAILS OF BALANCE OF ADVANCES AS ON DATE OF SURVEY. GROUND NO.VI: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW TH E LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.9.75 CRORES ON ACCOUNT OF ADVANCES RECEIVED FROM ORM PROJECT WITHOUT APPRECIATING TH A T ORM - B PROJECT WAS NOT FULLY COMPLETED DURING THE RELEVANT YEAR; GROUND NO.VII: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2. 51 CRORES ON ACCOUNT OF ALLEGED BOGUS PURCHASE FROM PRIDE STEEL P LTD. WITHOUT PREJUDICE TO ABOVE, THE ADDITIONS ON ACCOUNT OF ALLEGED BOGUS PURCHASE MAY PLEASE BE LIMITED TO 12 .5% OF THE PURCHASES MADE FROM PRICE STEEL P LTD 3 . THE ASSESSEE FILED RETURN OF INCOME ON 30.7.2013 DECLARING TOTAL INCOME OF RS.8,41,47,650/ - . THE RETURN WAS PROCESSED UNDER SECTION 143(1). THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE S UN DER SECTION 143(2) DATED 3 I.T.A. NO. 1478 /MUM/201 7 3.9.20014 AND UNDER SECTION 142(1) W ERE ISSUED AND SERVED UPON THE ASSESSEE. PERTINENT TO STATE THAT A SURVEY WAS CONDUC T ED ON THE ASSESSEE IN THE FINANCIAL YEAR 2011 - 12 ON 23.1.2012 DURING WHICH CERTAIN DOCUMENTS LIKE LOOSE PAPERS AND DIARIES WERE FOUND , SEIZED MARKED MARKED AS A - 6 AND A - 9 RELATING TO SUMS RECEIVED BY THE ASSESSEE AGAINST THE SALE OF FLATS AND PLOTS TO VARIOUS PARTIES DURING THE FINANCIAL YEAR 2010 - 11 TO 2012 - 13 AND ACCORDINGLY THE ASSESSEE WAS CALLED UPON BY THE AO VIDE LETTER DATED 25.2.2014 TO EXPLAIN THE TRANSACTIONS FOUND RECORDED IN THE IMPOUNDED DIARY MARKED AS A - 6 AND A - 9. FURTHER, A THE STATEMENT WAS ALSO RECORDED UNDER SECTION 131 OF THE ACT DURING T HE COURSE OF SURVEY OF SHRI AMIR NENS EY DIRECTOR OF THE ASSESSEE WHEREIN HE VOLUNTARILY OFFERED AN AMOUNT OF RS. 6,13, 86, 090/ - IN THREE YEARS WHILE REPLYING TO QUERRY NO. 19 , THE DETAILS WHEREOF ARE AS UNDER : F. Y.2010 - 11 RS.47, 00,000 F. Y.2011 - 12 RS.5,47,15,089 F.Y.2009 - 10 RS .19,71,001 TOTAL RS.6,13,86,090 THE LD. COUNSEL, DURING T HE COURSE OF ASSESSMENT PROCEEDINGS SUBMITTED BEFORE THE BENCH THAT THE ASSESSEE VIDE LETTER DATED 18.3.2015 CLARIFIED BEFORE THE AO THAT THE VARIOUS ENTRIES AS FOUND IN THE A - 6 & A9 WERE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT BY GIVING ENTRY - WISE DETAILS WHICH HAS BEEN INCORPORATED IN THE ASSESSMENT ORDER PARA 5.3 AS UNDER : 4 I.T.A. NO. 1478 /MUM/201 7 5.3 THE AR OF THE ASSESSEE VIDE LETTER DATED 18TH MARCH, 2015, HAS SUBMITTED EXPLANATION REGARDI NG THE ABOVE MENTIONED ENTRIES/ NOTINGS, WHEREIN HE HAS MAINLY CONTENDED AS UNDER: I) IN RESPECT OF VARIOUS AMOUNTS, THE SAME ARE NOT CASH RECEIPT BUT ARE RECEIVED BY WAY OF CHEQUE AND DULY ACCOUNTED FOR. II) IN RESPECT OF TWO INSTANCES, SUMS ARE RECE IVED IN CASH AND DULY ACCOUNTED FOR; III) THE ENTRIES MADE IN PAGE 41 , 42 & 43 ARE ACTUALLY DUPLICATION OF ENTRIES MADE IN PAGE NO.52 & 53. IV . IN RESPECT OF IMPOUNDED DIARY A - 6 , IT IS SUBMITTED THAT THESE ARE NOT CASH RECEIPTS BUT A CTUALLY NOT INGS RELATED TO HANDLING O F CASH BY MD & JMD OF THE ASSESSEE COMPANY. FURTHER, THE SAME HAS ALREADY BEEN ADDED AS INCOME FOR A. Y. 2011 - 12. V. DURING THE SURVEY, THE DISCLOSURE OF RS.5,47,15,089 / - MADE FOR A. Y. 2012 - 13, IS OUT OF THE ALLEGED CASH RE CEIPTS AS PER THE LOOSE PAPER FOLDER A - 9 CONSEQUENTLY THE ASSESSEE WITHDREW THE ABOVE AMOUNT OF SURRENDER. HAVING BRIEFLY DISCUSSING THE FACTS OF THE CASE, THE VARIOUS GROUNDS OF APPEALS BY THE REVENUE ARE DISPOSED OF AS UNDER: - 4. THE ISSUE RAI SED IN GROUND NO. 1 IS AGAINST THE CONFIRMATION OF ADDITION OF RS. 5,47,15,089/ - BY THE CIT(A) AS MADE BY THE AO ON THE GROUND THAT THE AMOUNT WAS SURRENDERED BY THE AO DURING THE SURVEY IN RESPECT OF ENTRIES FOUND IN THE LOOSE PAPERS/DIARY. 4.1. THE AO , A FTER CONSIDERING THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE A - 6 AND A - 9 WERE FOUND FROM THE POSSESSION OF THE ASSESSEE 5 I.T.A. NO. 1478 /MUM/201 7 AND THE ASSESSEE HAS NOT EXPLAINED THE ENTRIES WITH REFERENCE TO BOOKS OF ACCOUNT AS THE ONUS WAS ON THE ASSESSEE TO EXPLAIN ALL THESE TRANSACTIONS . THE AO REJECTED THE EXPLANATION OFFERED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. F INALLY THE AO ADDED A SUM OF RS.5,47,15,089/ - TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE ACT BEING UNEXPLAINED CASH CRED IT ON THE GROUND THAT THAT THE SAME HAS BEEN ACCEPTED BY THE ASSESSEE DURING THE COURSE OF SURVEY WHILE ACCEPT ING THE CONTENTION S OF THE ASSESSEE THAT T HE ENTRIES AT PAGES 41 TO 43 WERE ACTUALLY DUPLICATION OF ENTRIES MADE IN PAGES NO.52 AND 53. 4. 2 . BEFORE THE LD.CIT(A), THE ASSESSEE SUBMITTED THAT SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE AFTERNOON OF 23.1.2012 AND CONCLUDED AT THE MIDNIGHT OF THE 24 TH JAN 2012 . DURING THE SURVEY CERTAIN PAPERS COMPRISING LOOSE PAPERS AND DIARY WERE FOUND AN D SEIZED . A STATEMENT OF THE DIRECTOR OF THE ASSESSEE SHRI AMIR NENSEY U/S 131 OF THE ACT WAS RECORDED IN THE LATE HOURS ON THE CONCLUSION OF SURVEY DURING WHICH T HE ASSESSEE VOLUNTARILY AGREED TO SURRENDER SOME INCOME TO BUY PEACE OF MIND AND FINALLY T O CONCLUDE THE SURVEY. IT WAS ALSO CONTENDED THAT N O CASH WAS FOUND FROM THE PREMISES SURVEYED EXCEPT THE SOME TRANSACTION S NOTED IN DIARIES WHICH REPRESENTED DAY TO DAY CASH TRANSACTIONS AS WELL AS CHEQUES RECEIPTS UNDERTAKEN IN THE NORMAL COURSE OF BU SINESS BY THE ASSESSEE. IT WAS ALSO SUBMITTED THAT DURING THE COURSE OF SURVEY PROCEEDINGS NO UNACCOUNTED CASH WAS FOUND IN CORROBORATION OF ENTRIES IN THE DIARIES/LOOSE PAPERS WHICH FURTHER REINFORCES THE STAND OF THE ASSESSEE . IT WAS ALSO STATED THAT 6 I.T.A. NO. 1478 /MUM/201 7 A STATEMENT RECORDED DURING THE SURVEY U/S 133A OF THE ACT H AS NO EVIDENTIARY VALUE UNLESS CORROBORATED BY OTHER EVIDENCES AND THEREFORE NO T SUSTAINABLE IN THE EYES OF LAW BY RELYING ON THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS KADAR KHAN & SONS(2 008)300 ITR 0157(SC) . IT WAS ALSO SUBMITTED BY THE LD.AR THAT THE ADDITION OF RS.5,47,15,089/ - HAS BEEN MADE BY THE AO ON THE BASIS OF THE JOTTINGS ON THE LOOSE PAPER S AND DIARY FOUND IN THE SURVEY PROCEEDINGS WHICH W ERE EITHER DULY EXPLAINED BY THE ASSESSEE TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS OR THE DEAL NOT MATERIALIZING . THE LD.CIT(A) DURING T HE APPELL ATE PROCEEDI NG CALLED FOR THE REMAND REPO R T F ROM THE AO VIDE LETTER DA T ED 11.5.2016 ON T HE ENTRIES IN THE LOOSE PAPERS/DIARY WHICH WERE NOT RE CORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE AO FILED THE REMAND REPORT VIDE LETTER DATED 8.8.2016 WHICH STANDS INCORPORATED AT PARA 4.5 OF THE APPELLATE ORDER FROM PAGES 8 TO 13. THE L D. CIT(A) TABU L ATED THE EXPLANATION OF THE APPELLANT OFFERED FOR EACH AND EVERY ENTRY IN THE LOOSE PAPERS/DIARY OFFERED IN THE ASSESSMENT PROCEEDINGS AND COMMENTS OF THE AO WHICH HAS BEEN INCORPORATED IN PARA 4.12 OF THE APPELLATE ORDER AND IS ALSO EXTR ACTED BELOW ( 4.12 TO 22.36 OF CIT(A) : SR NO FLAT NO/PLOT NO. CLIENT NAME AMOUNT OF' CASH RECEIVED (RS.) DATE ASSESSEE'S EXPLANATION COMMENTS 1 PLOT 1OA VIJAY J SHAH & NALINI SHAH 3,25,000 THE AMOUNT OF RS. 325000/ - WAS NOT CASH RECEIPTS, IT IS RECEIVED BY CHEQUE NO. 020845 ON 20.5 - 2011 AND DULY RECORDED IN OUR ENTRY APPEARS ON PAGE 42 OF A - 9. BANK STATEMENT AND COPY OF SALE AGREEMENT / REGISTERED P RODUCED. HENCE CLAIM IS NOT 7 I.T.A. NO. 1478 /MUM/201 7 BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION. ESTABLISHED 2 PLOT 138 SARLA SHARMA AND KRISHNA 26,66,833 THE AMOUNT WRITTEN WAS AN EXPECTED RECEIVABLE FROM THE PARTY AGAINST PLOT, HOWEVER ACTUALLY RECEIVED WAS RS.39,16,833/ - INSTEAD OF RS. 2666833/ - AND THE SAME WERE DULY ACCOUNTED FOR ON 07 - 03 - 2011 (COPY OF L EDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION. ENTRY APPEARS ON PAGE 42 OF A - 9. COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED TO CONFIRM WHAT IS BEING C ONTENDED. THERE IS NO IDENTITY OF THE AMOUNT IN LOOSE PAPERS AND WHAT IS CLAIMED AS PER BOOKS.HENCE CLAIM IS NOT ESTABLISHED. 3 PLOT 69 ASHOK KUMAR 10,00,000 THE AMOUNT OF RS. 1000000/ - WAS NOT CASH RECEIPTS, IT IS R ECEIVED BY CHEQUE NO. 5912080 ON 20.5.2011AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THA T THIS WAS NOT A RASH TRANSACTION, ENTRY APPEARS ON PAGE 42 OF A - 9. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED. HENCE CLAIM IS NOT ESTABLISHED. 4 PLOT NO.130 GOVIND UTTAM CHANDANI 20,75,000 THE AMOUNT OF RS. 1000 000/ - WAS NOT CASH RECEIPTS, IT IS RECEIVED BY CHEQUE NO. 066850 ON 19 .5 - 2011 AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY B Y CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION. ENTRY APPEARS ON PAGE 42 OF A - 9. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED 5 PLOT KE TAN 40,00,000 THE AMOUNT WRITTEN WAS ENTRY APPEARS ON 8 I.T.A. NO. 1478 /MUM/201 7 NO.186 BELSARE EXPECTED CASH FLOW FROM THE SAID PARTY, AND THE SAME WERE RECEIVED BY CHEQUES NO.000078,000079,00008 0 AND 000081 OF RS.1000000/ - EACH TOTALING EACH TOTALING TO RS.40,00,000/ - AND DULY RECORDED IN OUR BOOKS OF A CCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION PAGE 42 OF A - 9. BANK STATEMENT AND COPY OF SALE AGREEME NT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED 6 PLOT NO. 1 AND 2 MAHENDRA TOOLS AND MACHINE 10,00,000 THE AMOUNT OF RS.1000000/ - WAS NOT CASH RECEIPT, IT IS EXPECTED AMOUNT RECEIVABLE AND ACTUALLY RECEIVED BY CHEQUE NO. 5627 ON 7.5.2 011 AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION ENTRY APPEARS ON PAGE 42 OF A - 9. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED 7 PLOT NO. 1 AND 2 MAHENDRA TOOLS AND MACHINE 10,00,000 THE AMOUNT OF RS.1000000/ - WAS NOT CASH RECEIPT, IT IS EXPECTED AMOUNT RECEIVABLE AND ACTUAL LY RECEIVED BY CHEQUE NO. 5627 ON 7.5.2011 AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSAC TION ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED 8 PLOT NO. 159 VINAYAK LOMATE 5,00,000 THE AMOUNT OF RS.50000 0/ - WAS NOT CASH RECEIPT, IT IS EXPECTED AMOUNT RECEIVABLE AND ACTUALLY RECEIVED BY CHEQUE NO. 10309 ON 2.6.2011 AND DULY ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ 9 I.T.A. NO. 1478 /MUM/201 7 RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. IN FACT THERE IS ANOTHER ENTRY FOR CHEQUE OF RS.4,00,000/ - DATED 23.4.2011 WHICH IS NOT REFLECTED IN THE LEDGER ACCOUNT SUBMITTED BY APPELLANT. 9 PLOT NO. 1 AND 2 MAHENDRA TOOLS AND MACHINE 10,00,000 11.6. 2011 THE AMOUNT WRITTEN WAS EXPECTED RECEIVABLE FROM T HE SAID PARTY, AGAINST THE PLOT, HOWEVER ACTUALLY RECEIVED WAS RS.500000/ - ONLY INSTEAD OF RS.10,00,000/ - AND THE SAME WERE DULY ACCOUNTED FOR 14.6.2011 (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. IN FAC T THE AMOUNT RECEIVED AS CHEQUE ON 11.6.2011 FOR RS.5,00,000/ - IN THE LOOSE PAPER DOES FIND A MENTION IN THE LEDGER AS PER APPELLANT. IT IS ONLY CASH THAT DOES NOT FIND ANY MENTION AND IS UNACCOUNTED. 10 PLOT NO. 69 ASHOK KUMAR 10,00,000 12.06. 2011 TH E AMOUNT OF RS.10,00,000/ - WAS NOT CASH RECEIPT, IT IS EXPECTED AMOUNT RECEIVABLE ON 12.6.2011 AND ACTUALLY RECEIVED BY CHEQUE NO.591239 ON 2.9.2011 AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . H ENCE CLAIM IS NOT ESTABLISHED. APPELLANT IS FALSELY ATTEMPTING TO LINK IT TO A PAYMENT RECEIVED BY CHEQUE ON A LATER DATE. 11 ORM/1 03/104 SUNITA RATHOD 10,00,000 16.6. 2011 THE AMOUNT WRITTEN WAS EXPECTED RECEIVABLE AGAINST THE SALE OF ORMB - 103 AGAINST THIS WE HAD ENTRY APPEAR S ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE 10 I.T.A. NO. 1478 /MUM/201 7 ONLY RS.100000/ - ON 20.6.2011/ - AND DULY ACCOUNTED FOR IN OUR BOOKS (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. APPELLANT IS FALSELY ATTEMPTING TO LINK IT TO A PAYMENT RECEIVED BY CHEQUE OF RS.1,00,000/ - IS NOT REFLECTED IN THE LEDGER COPY FILED. 12 PLOT NO.160/ 161 BALCHANDRA ALWE/ HARVINDER SINGH 9,95,000 15.6. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THEE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TO TAL AMOUNT BY CHEQUES ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVE EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. C OPY OF SALE AGREEME NT/ REGISTERED IS NOT PRODUCED . EVEN THE COPY OF LEDGER ACCOUNT IS NOT FILED. HENCE CLAIM IS NOT ESTABLISHED. 13 PLOT NO.134A SANDEEP CHIKHALIKAR 65,00,000 16.6. 2011 THE AMOUNT WRITTEN WAS NEGOTIATED TOTAL VALUE OF PLOT NO.134A, OUT OF THAT TILL 31.3.20 12 WE HAD RECEIVED RS.40,05,000/ - ONLY AND THE SAME WERE DULY ACCOUNTED FOR IN OUR BOOKS OF ACCOUNT, NO CASH AMOUNT HAD BEEN RECEIVED BY US(COPY OF LEDGER ACCOUNT IS ENCLOSED SHOWING AMOUNT RECEIVED TILL 31.3.2012 FROM PARTY) ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. COPY OF SALE AGREEMENT/REGISTERE D IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. R COPY FILED. 14 PLOT NO.160/ 161 BINDRA 10,00,000 15.6. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THEE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVE EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 42 OF A - 9. CA SH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SA LE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 15 176 ADITYA SAIPRASAD SAMANT 30,00,000 30.7. 2011 THE AMOUNT WRITTEN WAS EXPECTED RECEIVABLE ON 30 .7..2011/ - AGAINST SALE ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED 11 I.T.A. NO. 1478 /MUM/201 7 OF PLOT 176, HOWEVER WE HAD ACTUALLY RS.4100000/ - ON 1.8.2011 BY CHEQUE NO.29096 AND DULY ACCOUNTED FOR IN OUR BOOKS (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT T HIS WAS NOT A CASH TRANSACTION SPECIFICALLY IN THE LOOSE PAPER. THE SALE PAPER ALSO HAS AN AMOUNT OF RS.41,00,000/ - MENTIONED IN CHEQUE PAYMENT ON .2011 WHICH FINDS A MENION IN THE LEDER PAPER BOOKS OF APPELLANT. BANK STATEMENT AND COPY OF SA LE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 16 PLOT NO.91 JANVI NITIN BHOSLE 23,00,000 20.7. 2011 THE AMOUNT WAS A NEGOTIATION FOR SALE OF PLOT NO.91, AND EXPECTED FLOW. HOWEVER, THE TRANSACTION COULD NOT BE TOOK PLACE WITH SAID PARTY - JANVI NITIN BHOSLE HENCE QUESTION OF ANY CASH RECEIPT FROM HERE DOES NOT ARISE. WE FURTHER SAY THAT PLOT NO.91 WAS ULTIMATELY AGREED TO BE SOLD IN THE MONTH OF MARCH 2012 TO MR.UPEN DRA PATEL AND WE HAD STARTED RECEIVING AMOUNT FROM THEM FROM MARCH, 2012 ONWARDS (COPY OF LEDGER ACCOUNT SHOWING SALE OF PLOT TO UPENDRA PATEL IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION ENTRY APPEARS ON PAGE 42 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. LEDGER ACCOUNT, BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED AGREEMENT IS NOT PRODUCED . THE PERSON IS NOT PRODUCED AND ADDRESS IS NOT P ROVIDED. NO CONTEMPORANEOUS RECORD OF NEGOTIATIONS IS FILED. HENCE CLAIM IS NOT ESTABLISHED. 17 ATUL GARG 10,00,000 THE AMOUNT OF RS.10,00,000/ - WAS NOT CASH RECEIPT, IT IS EXPECTED AMOUNT RECEIVABLE AGAINST PLOT NO.102 AND ACTUALLY RECEIVED BY CH EQUE NO.RTGS ON 5.5.2010 AND DULY RECORDED IN OUR BOOKS OF ACCOUNT (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . THE AMOUNT RECEIVED IN CASH IS NOT THE SAME THAT IS RECEIVED BY 12 I.T.A. NO. 1478 /MUM/201 7 RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION CHEQUE. HENCE CLAIM IS NOT ESTABLISHED. 18 PLOT NO.160/ 161 BIND RA 10,00,000 2.8. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THESE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. C OPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 19 PLOT NO.187 (134) PRABHA SHYAM NAIR 34,0 0,000 28.8. 2011 WE HAD SOLD TWO PLOTS BEARING NO.186 AND 187 TO THIS PARTY AND RECEIVED INITIAL PAYMENT OF RS.4500000/ - ON 13.10.2009, THE AMOUNT OF RS.34,00000/ - WRITTEN WAS EXPECTED CASH FLOW FROM PARTY WHICH TILL 31.3.2011 NOT RECEIVED EITHER CASH OR BY CHEQUEE. ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER.THE AMOUNT MENTIONED AS CASH IS VERY DIFFERENT FROM AMOUNT CLAIMED TO BE RECEIVED BY CHEQUE. LEDGER ACCOUNT, BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTE RED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 20 PLOT NO.160/ 161 BINDRA 7,50,000 3.9. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THESE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ONLY AGAINS T THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTER ED IS NOT PRODUCED . THE AMOUNT RECEIVED IN CASH IS NOT THE SAME THAT IS RECEIVED BY CHEQUE. HENCE CLAIM IS NOT ESTABLISHED. 21 PLOT NO.160/ 161 BINDRA 10,00,000 2.8. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THESE PARTIES FOR A TOTAL CONSIDER ATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALL Y IN THE LOOSE PAPER. BANK STATEMENT AND COPY 13 I.T.A. NO. 1478 /MUM/201 7 ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE 3.EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITHER BY CASH OR BY CHEQUE. OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 22 PLOT NO.187 (134) PRABHA SHYAM NAIR 34,00,000 28.8. 2011 WE HAD SOLD TWO PLOTS BEARING NO.186 AND 187 TO THIS PARTY AND RECEIV ED INITIAL PAYMENT OF RS.4500000/ - ON 13.10.2009, THE AMOUNT OF RS.34,00000/ - WRITTEN WAS EXPECTED CASH FLOW FROM PARTY WHICH TILL 31.3.2011 NOT RECEIVED EITHER CASH OR BY CHEQUEE. ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOO SE PAPER. THE AMOUNT MENTIONED AS CASH IS VERY DIFFERENT FROM AMOUNT CLAIMED TO BE RECEIVED BY CHEQUE. LEDGER ACCOUNT, BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 23 PLOT NO.160/ 161 BINDRA 7,5 0,000 3.9. 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THESE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECE IVED EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 24 PLOT NO. 159 VINAYAK LOMATE 2 0,00,000 3.9.2011 WE HAD SOLD PLOT BEARING NO.159 TO THIS PARTY FOR A TOTAL CONSIDERATION OF RS.51 LAKHS EACH AND WE HAVE RECEIVED TOTAL AMOUNT BY CHEQUES ONLY AGAINST THIS PLOT, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED E ITHER BY CASH OR BY CHEQUE ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 25 PLOT NO.160/ 161 BINDRA 30,80,000 9.9 . 2011 WE HAD SOLD TWO PLOTS BEARING NO.160 AND 161 TO THESE PARTIES FOR A TOTAL CONSIDERATION OF RS.50 LAKHS EACH AND WE HAD TOTAL AMOUNT BY CHEQUES ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. BANK STATEMENT AND COPY 14 I.T.A. NO. 1478 /MUM/201 7 ONLY AGAINST THESE PLOTS, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITH ER BY CASH OR BY CHEQUE. OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 26 PLOT NO.105 RAHUL PARALIA 25,00,000 20 .9. 2011 THE AMOUNT WRITTEN WAS EXPECTED RECEIVABLE ON 30.7.2011/ - AGAINST SALE OF PLOT 176, HOWEVER WE HAD ACTUALLY RS.2000000/ - ON 26.11.2011 BY CHEQUE NO.003161 AND 003162 AND DULY ACCOUNTED FOR IN OUR BOOKS (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHL IGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION ENTRY APPEARS ON PAGE 4 1 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE AMOUNT MENTIONED AS CASH IS VERY DIFFERENT FROM AMOUNT CLAIMED TO BE RECEIVED BY CHEQUE. THE BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 27 PLOT NO.14/15 COMMER - CIAL NITIN BHOSALE 86,00,000 19.9. 2011 THIS AMOUNT OF RS.86,00,000/ - MUST BE PR ICE NEGOTIATED FOR PLOTS TO PARTY ON 19.9.2011. HOWEVER, NOTHING WAS RECEIVED BY US TILL 2011. IN THE JANUARY 2012 ONWARDS WE HAD STARTED RECEIVED HE AMOUNT AN TILL MARCH 2012 TOTAL RECEIPTS WAS RS.6000000/ - WHICH IS DULY ACCOUNTED FOR IN OUR BOOKS (COPY OF LEDGER ACCOUNT IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION . ENTRY APPEARS ON PAGE 4 0 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE AMOUNT MEN TIONED AS CASH IS VERY DIFFERENT FROM AMOUNT CLAIMED TO BE RECEIVED BY CHEQUE. THE BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 28 PLOT NO.119 ZEENAT BANU 2,00,000 28.9. 2011 THIS CASH AMOUNT OF RS.2,00,000/ - RECEIVED BY US AGAINST SALE OF PLOT NO.119 AND DULY RECORDED IN THE BOOKS OF ACCOUNT ON 29.9.2011 (COPY OF LEDGER REFLECTING CASH RECEIPT AND ACCOUNTED FOR ENCLOSED. Y CHEQUE), HENCE WE SAY THAT THIS WAS NOT A CASH TRANSA CTION . ENTRY APPEARS ON PAGE 4 0 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . IT IS NOT PROVED THAT THE ENTIRE CONSIDERATION 15 I.T.A. NO. 1478 /MUM/201 7 INCLUDING AMOUNT RECEIVED IN CASH IS REFLEC TED AS INCOME OUT OF SALE PROCEEDS. HENCE CLAIM IS NOT ESTABLISHED. 29 PLOT NO.148/ 149 JAYESH SAINI 9,23,000 11.10. 2011 THE AMOUNT WAS A TOKEN TO BE RECEIVED ON NEGOTIATION FOR SALE OF PLOT NO.148/149 AND EXPECTED FLOW. HOWEVER THE TANSACTIN COULD NOT TAKE PLACE WITH SAID PARTY - JAYESH SAINI HENCE QUESTION OF ANY CASH RECEIPT FROM HIM DOES NOT ARISE. WE FURTHER AY THAT PLOT NO.148 WAS ULTIMATELY AGREED TO BE SOLD IN HE MONTH OF MAY 2011 TO MR. KAMAL RAMESH PANCHAL AND WE HAD STARTED RECEIVED AMOUNT F ROM THEM FROM MAY, 2011 ONWARD (COPY OF LEDGER ACCOUNT SOWN SALE OF PLOT TO KAMAL RAMESH PANCHAL IS ENCLOSED HIGHLIGHTING THE AMOUNT RECEIVED FROM PARTY BY CHEQUE) HENCE WE SAY THAT THIS WAS NOT A CASH TRANSACTION . ENTRY APPEARS ON PAGE 4 0 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE PERSON IS NOT PRODUCED AND THE ADDRESS IS ALSO NOT MENTIONED. NO CONTEMPORANEOUS RECORD IS FILED OF ANY SUCH CLAIMED NEGOTIATIONS. HENCE CLAIM IS NOT ESTABLISHED. 30 PLOT NO. 159 VINAYAK LOMATE 10,00,000 25.10. 2011 WE HAD SOLD PLOT BEARING NO.159 TO THIS PARTY WE HAD RECEIVED BY CHEQUES ONLY AGAINST THIS PLOT, THE AMOUNT WRITTEN MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITHER BY CASH OR BY CHEQUE. ENTRY APPEARS ON PAGE 4 0 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE AMOUNT MENTIONED IS NOT SAME AS THAT RECEIVED BY CHEQUE. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. 31 PLOT NO. 10A VIJAY J SHAH A ND NALINI SHAH 9,00,000 26.10. 2011 WE HAD SOLD PLOT BEARING NO.10A TO THIS PARTY WE HAD RECEIVED AMOUNT BY CHEQUES ONLY AGAINST SAID PLOT, THE AMOUNT WRITTEN ENTRY APPE ARS ON PAGE 4 0 OF A - 9. CASH IS MENTIONED SPECIFICALLY IN THE LOOSE PAPER. THE 16 I.T.A. NO. 1478 /MUM/201 7 MAY BE EXPECTED CASH FLOW SHOWN AS CASH TILL IT RECEIVED EITHER BY CASH OR CHEQUE. AMOUNT MENTIONED IS NOT SAME AS THAT RECEIVED BY CHEQUE. BANK STATEMENT AND COPY OF SALE AGREEMENT/ REGISTERED IS NOT PRODUCED . HENCE CLAIM IS NOT ESTABLISHED. TOTAL 5,47,1 5,089 4.3 . AFTER CONSIDERING, THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE THE CIT(A) CONCLUDED THAT SOME NAMES WERE APPEARING REPEATEDLY SUCH AS BINDRA, VIJAY SHAH AND LOMATE IN LOOSE PAPERS AND CAME TO THE CONCLUSION THAT TRANSACTIONS REFLECTED IN THE LOOSE PAPERS WERE CARRIED OUT CHRONOLOGICALLY AND THESE TRANSACTIONS WERE NOT SHOWN IN THE BOOKS OF ACCOUNT AS NARRATED ABOVE AND ACCORDING UPHELD THE ADDITION MADE BY THE AO BY DISMISSING THE GROUND RAISED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) , THE ASSESSEE IS IN APPEAL BEFORE US. 4.4 . THE LD.AR VEHEMENTLY SUBMITTED THAT DESPITE FURNISHING OF ALL THE NECESSARY DOCUMENTS AND EVIDENCES EXPLAINING THE ENTRIES IN THE LOOSE PAPERS AND DIARY FOUND DURING SURVEY AS DULY ACCOUNTED FOR IN T HE BOOKS OF ACCOUNTS, THE LD. CIT(A) WRONGLY UPHELD THE ADDITION OF RS.5.47 CRORES. THE LD. AR TOOK US THROUGH THE CHART PREPARED AND SUBMITTED BY THE ASSESSEE EXPLAINING THE ENTRIES AS TO HOW THESE WERE ACCOUNTED FOR BY THE ASSESSEE ON VARIOUS DATES BEF ORE THE LD.CIT(A) WHICH HAS BEEN INCORPORATED IN PARA 4.12 OF THE APPE LLATE ORDER. THE LD. AR ARGUED THAT SINCE THE ASSESSEE HAS EXPLAINED THE ENTRIE S IN CASH AND BY 17 I.T.A. NO. 1478 /MUM/201 7 CHEQUE S DULY RECORDED IN THE BOOKS OF ACCOUNT S BY STATING THAT IN SOME CASES, THE AMOU NT S W ERE WRONGLY STATED TO BE RECEIVED IN CASH WHEREAS AS A MATTER OF FACT THESE WERE RECEIVED THROUGH CHEQUE S AND HA VE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT AND ADEQUATELY EXPLAINED BEFORE THE AUTHORITIES BELOW. THE LD. AR FURTHER SUBMITTED THAT COMMENTS AS GIVEN BY FIRST APPELLATE AUTHORITY IN THE TABLE APPENDED IN PARA 4.12 WERE NEVER DISCUSSED N OR ANY DOCUMENTARY EVIDENCES WERE CALLED FOR BY THE LD.CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS WHEREAS THE ASSESSEE FURNISHED THE NECE SSARY BOOKS OF ACCOUNTS AND AL SO SHOWED THE ENTRIES DULY RECORDED IN THE BOOKS OF ACCOUNT S . WHILE TAKING US THROUGH EACH AND EVERY ENTRY FOUND IN THE SEIZED MATERIALS AND EXPLANATION OFFERED, T HE LD AR ALSO POINTED OUT THAT SOME WERE EVEN DUPLICATION OF EN TRIES ON THE BASIS OF WHICH THE ADDITION OF RS. 5.45 CR WAS CALCULATED AND MADE BY SPECIFICALLY POINTING OUT TO THOSE ENTRIES. THE AR CONTENDED THAT THE ENTIRE AMOUNT OF ADDITION OF RS. 5.47 CR WAS BASED UPON THE WRONG APPRECIA TION OF FACTS AND ALSO ON W HIMS, FANCIES AND PRESUMPTION S OF THE LOWER AUTHORITIES. FINALLY THE LD AR PRAYED THAT THE ADDITION OF RS. 5.47 CR SHOULD BE DELETED AS THE ASSESSEE HAS DULY EXPLAINED ALL THE ENTRIES IN THE IMPOUNDED PAPERS AS DULY RECORDED IN THE BOOKS OF ACCOUNTS. 4 .5 . THE LD. DR HEAVILY RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS MERE AFTER THOUGHT AND THEREFORE THE ORDER OF THE CIT(A) BE CONFIRMED AS THE ADDITIONS WERE 18 I.T.A. NO. 1478 /MUM/201 7 CONFIRMED BY THE CIT(A) AFTE R THE ASSESSEE FAILED OFFER ANY VALID EXPLANATIONS ABOUT ENTRIES/NOTINGS IN THE LOOSE PAPERS. 4.6 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL S PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW . UPON PERUSA L OF PARA 4.12 OF THE APPELLATE ORDER IN WHICH THE EXPLANATIONS BY THE ASSESSEE OF VARIOUS ENTRIES IN THE A - 6 AND A - 9 VIS A VIS COMMENTS HA VE BEEN APPENDED , WE OBSERVE THAT IN SOME CASES THE ASSESSEE HAS EXACTLY EXPLAINED THE NOTINGS/ENTRIES TO BE DULY ACCOUNTE D FOR IN THE BOOKS OF ACCOUNTS AND IN SOME CASE THE DEALS WERE NOT MATURED . WE ALSO FIND THAT SOME DUPLICATION OF ENTRIES WAS ALSO THERE RESULTING INTO DOUBLE ADDITIONS OF THE SAME ENTRY AND OF COURSE IN SOME CASES THE EXPLANATION OFFERED BY THE A SSESSEE WAS NOT SATISFACTORY AND CONVINCING. AFTER CAREFULLY EXAMINING AND ANALYZING THE ENTRIES FOUND IN THE LOOSE PAPERS , WE OBSERVE THAT AMOUNTS/ ENTRIES AT SR . NO . 1, 2, 3, 4, 5, 6,7,8,9,10, 11, 13, 16, 17, 27,28 AND 29 OF THE TABLE REPRODUCED IN PAR A 4.2 SUPRA WERE EXPLAINED BY THE ASSESSEE TO HAVE BEEN DULY ACCOUNTED FOR IN TH E BOOKS OF ACCOUNTS AND THEREFORE WE ARE NOT IN AGREEMENT WITH THE FINDINGS OF LD CIT(A) . AMOUNTS/E NTRIES AT SR NO 18 AND 21, SR NO. 19 AND 22 & SR NO 20 AND 23 ARE DUPLICATE A ND HAS RESULTED IN DOUBLE ADDITION OF THE SAME ENTER /AMOUNT. SO WE ARE NOT IN AGREEMENT WITH THE LD CIT(A) THAT ALL THE NOTINGS/ENTRIES IN THE IMPOUNDED DIARIES WERE NOT ACCOUNTED FOR IN THE BOOKS OF THE ASSESSEE. IN SOME CASES APPEARING A T SR NO. 12, 14,1 5,18,19,20 , 24,25,26 , 30 AND 31 THE ASSESSEES EXPLANATION THAT THESE WERE 19 I.T.A. NO. 1478 /MUM/201 7 EXPECTED CASH FLOWS FROM THE PERSONS WHOSE NAMES WERE MENTIONED ACROSS THE SAID NOTINGS SEEMED TO BE NOT TENABLE AT THE MOST. THEREFORE, THE ENTRIES AS STATED ABOVE HAVE BEEN EXPLA INED BY FURNISHING THE BANK STATEMENT, COPY OF LEDGER ACCOUNT, CHEQUE NO. ETC AND THEREFORE, IN VIEW OF THIS FACTUAL POSITION , THE ADDITION AS SUSTAINED BY THE LD.CIT(A) OF RS.5.47 CRORES IS NOT CORRECT AND HAS TO BE RESTRICTED TO THE UNACCOUNTED ENTRIES IN THE DIARIES AND LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY AS NOT EXPLAINED OR EXPLANATION WAS NOT CONVINCING , THE ADDITIONS TO THAT EXTENT NEEDS TO BE SUSTAINED. AFTER EXAMINING THE RECORDS, ARGUMENTS OF THE COUNSEL WE FIND THAT T HE FOLLOWING E NTRIES REMAINED UNEXPLAINED AS UNDER: PLOT NO. 160/169 BALCHANDRA ALWE/ HARVINDER SINGH RS. 9.95 LAKHS PLOT NO.160/161 BINDRA 15.6.2011 RS.10 LAKHS PLOT NO.1 76 ADITYA SAIPRASAD SAMANT 30.7.2011 RS. 30 LAKHS PLOT NO.160 BINDRA 2.8 .2011 RS. 10 LAKHS PLOT NO.187/134 PRABHA SHYAM NAIR 28.8.11 RS. 34 LAKHS PLOT NO.160/161 BINDRA 3.9.2011 RS. 7.5 LAKHS PLOT NO.159 VINAY LOMTE 3.9.2011 RS.50 LAKHS PLOT NO.160/161 BINDRA 9.9.2011 RS.30.80 LAKHS PLOT NO.105 RAHU L PARALIA 20.9.2011 RS.25 LAKHS PLOT NO.159 VINAY LOMTE 25.10.2011 RS.10 LAKHS PLOT NO.10A VINAY SHAH AND NALINI SHAH26.10.2011 RS.9 LAKHS 226.25 LACS THEREFORE, CONSIDERING THE FACTS AND OBSERVATION S AS MADE HEREINABOVE , WE DIRECT THE AO T O DE LETE THE ADDITION OF RS 320.90 LACS WHEREAS THE ADDITION TO THE 20 I.T.A. NO. 1478 /MUM/201 7 TUNE OF RS 2 26 .25 LACS IS SUSTAINED AND AFFIRMED . ACCORDINGLY THE G ROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 5 . GROUND NO.II IS IN RESPECT OF CONFIRMATION OF ADDITION OF RS. 4.94 CROR ES BY CIT(A) AS MADE BY THE AO BY EXTRAPOLATING AND ESTIMATING RECEIPTS FROM 8 PLOTS ON THE GROUND THAT THESE WERE SOLD DURING THE YEAR ON THE BASIS OF STATEMENT OF THE ASSESSEE AND A AGREEMENT FOUND IN RESPECT OF ONE PLOT NO 58 DURING THE SURVEY . 5 .1 . FACTS OF THE CASE IN BRIEF ARE THAT DURING THE YEAR THE ASSESSEE HAS 8 PLOTS. DURING THE YEAR THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL WITH SHRI HIMMATBHAI FOR SALE OF PLOT NO 58 FOR A CONSIDERATION OF RS. 45,00,000/ - HOWEVER THE SAID PLOT WAS STA TED TO BE SOLD AT RS. 1,11,00,000/ - IN THE LOOSE PAPERS FOUND DURING THE SURVEY . ACCORDING TO THE AO THE ASSESSEE RECEIVED RS. 66,00,000/ - OVER ABOVE THE AGREEMENT PRICE. OUT OF THE ABOVE 8 PLOTS , THE ASSESSEE SHOWED THE SALE OF 3 PLOTS IN THE AY 2013 - 1 4 AND REMAINING 5 WERE STILL UNSOLD TILL 31.3.2016 . HOWEVER, ON THE BASIS OF SAID AGREEMENT THE AO CONCLUDED THAT THE ASSESSEE HAS SOLD THESE PLOTS AT LOWER PRICE THAN THE FAIR MARKET VALUE AND CASH WAS RECEIVED OVER AND ABOVE THE VALUE. THE ASSESSEE IN R ESPONSE TO QUERY NO.21 REPLIED THAT PLOT OF SHRI HIMMATBAI A PATEL WAS SOLD FOR A TOTAL CONSIDERATION OF RS.1,11,00,000/ - AND THE AGREEMENT WAS MADE ONLY FOR RS.45 LAKHS. THE AO , ON THE BASIS OF SAID FACTS , PUT A QUERY TO THE ASSESSEE THAT IN VIEW OF THE SUPPRESSION OF THE SALE CONSIDERATION OF PLOT TO THE EXTENT OF 60% AND THE ASSESSEE OFFERED 21 I.T.A. NO. 1478 /MUM/201 7 RS.4.28 CRO R ES + RS.66 LAKHS TOTALING TO RS.4.94 CRORES AS ADDITIONAL INCOME ON ACCOUNT OF SALE OF 8 PLOTS. HOWEVER, THE ASSESSEE BY A LETTER DATED 18.3.2015 SUBMITTED BEFORE THE AO THAT IN RESPECT OF SHRI HIMMATBAI A PATEL THE ACTUAL CONSIDERATION WAS RS.88,25,000/ - AND NOT RS.1,11,00,000/ - AND THE AMOUNT WAS RECEIVED WAS RS.45 LAKHS DURING THE YEAR WHICH WAS DULY REFLECTED IN THE BOOKS OF ACCOUNT. THE A O ALSO REQUIRED THE ASSESSEE TO PRODUCE AGREEMENT IN RESPECT OF 7 PLOTS SOLD TO VARIOUS PARTIES WHICH WERE NOT FURNISHED BY THE ASSESSEE . F INALLY, THE AO ADDED A SUM OF RS.4.94 CRORES TO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF T HE ACT BY ESTIMATI NG THE TOTAL CONSIDERATION RECEIVED FOR THE 7 REMAINING PLOT . THE AO CAME TO THE CONCLUSION ON THE BASIS OF SOME IMPOUNDED PAPERS DURING THE COURSE OF SURVEY THAT THE ASSESSEE HAS SOLD PLOTS TO VARIOUS PARTIES AT LOWER VALUE THAN THE FMV AND HAS RECEIVED CASH OVER AND ABOVE THE AGREEMENT VALUE. ACCORDINGLY , THE AR WAS ASKED VIDE LETTER DATED 25/2/2014 TO EXPLAIN THE TRANSACTION FOUND IN THE IMPOUNDED FILE A - 10 . THE QUERY NO.21 AND ANSWER THERETO AND QUESTION NO.23 AND ANSWER THERETO ARE REPRODUCED AT PAGE 10 OF THE ASSESSMENT ORDER : - Q.21: PLEASE REFER TO PAGE NO. 9 OF FILE NO.A - 10 WHEREIN FOR SALE OF PLOT NO.58 TO ONE SHRI HIMMATBAI A. PATEL FOR SHOWING COST OF RS.1, 11,00,000/ - IS MENTIONED. IN THIS REGARD, I AM SHOWING YOU THE PAGE NO. 210 OF TH E SAID FILE WHEREIN AGREEMENT FOR PLOT SOLD TO SHRI HIMMATBAI A. PATEL SHOWS SALE VALUE OF RS.45 LAKHS. PLEASE EXPLAIN THIS VARIATION BETWEEN COST SHOWN AT PAGE NO.9 AND AT PAGE NO.21O? ANS: THE AGREEMENT VALUE FOR PLOT SOLD TO SHRI HIMMATBAI A.PATEL IS RS. 45, 00, 000/ AS AGAINST WHICH PAYMENT RECEIVED FROM SHRI HIMMATBAI A. PATEL IS RS.1,11,00,000/ - THE DIFFERENCE OF RS.66,00,000/ - IS THE PATEL IN CASH 22 I.T.A. NO. 1478 /MUM/201 7 WHICH IS OVER AND ABOVE THE SALE VALUE REFLECTED IN THE BOOKS OF THE COMPANY I.E. RPIPL. Q.23. CONSI DERING YOUR AFOREMENTIONED ANSWER REGARDING SUPPRESSION OF 60% OF SALES PROCEEDS FROM PLOTS, THE TOTAL AMOUNT OF SALES WHICH IS NO ACCOUNTED IN YOUR BOOKS OF ACCOUNTS ON ACCOUNT OF TRANSACTION S MENTIONED AT PAGE NO.9 OF FILE NO.A - 9 COMES TO RS.4.28 CRORES EXCLUDING THE SUPPRESSION ON THE SALE OF PLOT TO SHRI HIMMAIBAI A. PATE1, WHICH WAS SEPARATELY QUANTIFIED IN QUESTION NO.19. WHAT WOULD YOU HAVE TO SAY ABOUT IT? ANS: I VOLUNTARILY OFFER AN AMOUNT OF R S.4.28 CRORES PLUS RS.66,00,000 TOTA L ING RS.4.94 C RORES AS M Y ADDITIONAL INCOME BY WAY OF SALE OF PLOTS RECEIVED IN CASH OVER AND ABOVE THE SALE REFLECTED IN COMPANYS BOOKS OF ACCOUNTS FOR AY2012 - 13 ( I ) IN RESPECT OF SALE MADE TO HIMMATBHAI, IT IS SUBMITTED THAT ACTUAL SALE CONSIDERATION WAS RS.88,25,00 0/ - AND NOT RS.1,11,00,000/ - . AMOUNT RECEIVED AS ON DATE OF SURVEY WAS RS.45,00,000/ - . II. IT HAS RECEIVED RS.45, 00,000/ - TILL THAT TIME, WHICH IS DULY REFLECTED IN ITS BOOKS OF ACCOUNT AND WHICH IS ONLY 25% OF SO CALLED AGREED AMOUNT OF RS.88,25, 000 / - . III. IN RESPECT OF OTHER PARTIES, NO EXPLANATION HAS BEEN OFFERED. FINALLY, THE AO NOT ACCEPTING THE CONTENTION AND SUBMISSIONS OF THE ASSESSEE CAME TO THE CONCLUSIO N THAT ACTUAL RECEIPT OF ONE PLOT WAS RS. 1,11,00,000/ - AND NOT RS. 88,25,000/ - . OUT O F WHICH RS.45,00,000/ - WAS STATED TO BE RECEIVED AND WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND FINALLY ADDED AN AMOUNT OF RS.4.94 CRORES UNDER SECTION 68 AS UNEXPLAINED CASH CREDIT ON ACCOUNT OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE OVER AND ABOVE SALE CONSIDERATION OF PLOTS . 23 I.T.A. NO. 1478 /MUM/201 7 6 . IN THE APPELLATE PROCEEDINGS, BEFORE THE LD.CIT(A), THE LD.AR SUBMITTED THAT THE ADDITION COULD NOT BE MADE ON THE BASIS OF STATEMENT RECORDED U/S 131 OF THE ACT AS THE SAME HAS NO EVIDENTIARY VALUE. THE LD. AR FURTHE R SUBMITTED THAT THE ADDITION WAS BASED ON SURMISES AND CONJECTURES THAT ALL T HE PLOTS WERE SOLD DURING THE YEAR AND CASH ELEMENT INVOLVED IN THE SAME TRANSACTION WAS ALSO RECEIVED WAS FACTUALLY INCORRECT AS BY THE END OF THE FINANCIAL YEAR ONLY ONE PLOT WAS SOLD WHICH WAS HANDED OVER TO THE BUYER IN THE NEXT YEAR AND THEREFORE THE ADDITION WAS WRONG AND CONTRARY TO FACTS ON RECORD . THE LD. AR SUBM ITTED BEFORE THE APPELLATE AUTHORITY. FINALLY, THE LD. CIT(A) UPHELD THE ADDITION VIDE PARA 5.3 TO 5.7 OF TH E APPELLATE ORDER: 5.3. I HAVE CONSIDERED THE FACTS ON RECORD AND CONTENTIONS OF THE APPELLA NT CAREFULLY. IT IS SEEN THAT IN THE STATEMENT RECORDED U/S 131 OF SHRI AMIR NENSEY , DIRECTOR AND PROMOTER OF THE APPELLANT COMPANY; DAT ED 24.01.2012, IN THE COURS E OF SURVEY ACTION U/S.133A, IN ANSWER QUESTIONS Q. NO. 21 TO 23 THE ANSWERS WERE AS FOLLOWS : - Q.21: PLEASE REFER TO PAGE NO. 9 OF FILE NO.A - 10 WHEREIN FOR SALE OF PLOT NO.58 TO ONE SHRI HIMMATBAI A. PATEL FOR SHOWING COST OF RS.1, 11,00,000/ - IS MENTION ED. IN THIS REGARD, I AM SHOWING YOU THE PAGE NO. 210 OF THE SAID FILE WHEREIN AGREEMENT FOR PLOT SOLD TO SHRI HIMMATBAI A. PATEL SHOWS SALE VALUE OF RS.45 LAKHS. PLEASE EXPLAIN THIS VARIATION BETWEEN COST SHOWN AT PAGE NO.9 AND AT PAGE NO.21O? ANS: THE AGREEMENT VALUE FOR PLOT SOLD TO SHRI HIMMATBAI A.PATEL IS RS. 45, 00, 000/ AS AGAINST WHICH PAYMENT RECEIVED FROM SHRI HIMMATBAI A. PATEL IS RS.1,11,00,000/ - THE DIFFERENCE OF RS.66,00,000/ - IS THE PATEL IN CASH WHICH IS OVER AND ABOVE THE SALE VALUE REFL ECTED IN THE BOOKS OF THE COMPANY I.E. RPIPL. Q.22 FROM THE ABOVE , IT IS SEEN THAT NEARLY 60% OF THE SALE PROCEEDS FROM THE SALE OF PLOT NO.58 IS RECEIVED IN CASH AND NOT ACCOUNTED AS PART OF YOUR SALES. FROM THE ABOVE, IT IS SEEN THAT 60% OF YOUR SALE S 24 I.T.A. NO. 1478 /MUM/201 7 FROM VARIOUS PLOTS MENTIONED AT PAGE NO.9 OF FILE NO.A - 9 IS SUPPRESSED. PLEASE EXPLAIN? ANS: I CONFIRM THAT IN THE TRANSACTIONS REGARDING SALE OF PLOT MENTIONED AT PAGE 9 OF FILE NO.A - 9, 60% OF THE TOTAL COST IS RECEIVED IN CASH OVER AND ABOVE THE SALES FIGURE OF THE SAID PLOTS AS REFLECTED IN MY BOOKS OF ACCOUNTS. Q.23. CONSIDERING YOUR AFOREMENTIONED ANSWER REGARDING SUPPRESSION OF 60% OF SALES PROCEEDS FROM PLOTS, THE TOTAL AMOUNT OF SALES WHICH IS NO ACCOUNTED IN YOUR BOOKS OF ACCOUNTS ON ACCOUNT O F TRANSACTIONS MENTIONED AT PAGE NO.9 OF FILE NO.A - 9 COMES TO RS.4.28 CRORES EXCLUDING THE SUPPRESSION ON THE SALE OF PLOT TO SHRI HIMMAIBAI A. PATE1, WHICH WAS SEPARATELY QUANTIFIED IN QUESTION NO.19. WHAT WOULD YOU HAVE TO SAY ABOUT IT? ANS: I VOLUNTAR ILY OFFER AN AMOUNT OF RS.4.28 CRORES PLUS RS.66,00,000 TOTALING RS.4.94 CRORES AS MY ADDITIONAL INCOME BY WAY OF SALE OF PLOTS RECEIVED IN CASH OVER AND ABOVE THE SALE REFLECTED IN COMPANYS BOOKS OF ACCOUNTS FOR AY2012 - 13 5.4 PERUSAL OF THE ABOVE E XTRACT OF STATEMENT OF SHRI AMIR NENSEY SHOWS THAT THERE WERE ADVANCES OF CASH RECEIVED OUT OF BOOKS SPECIFICALLY IN THE CA S E OF SHRI HIMMATBAI A PATEL. SHRI NENSEY, DIREC TOR ALSO ADMITTED THAT 60% OF THE AMOUNT IS RECEIVED IN CASH OVER AND ABOVE THE SALES FIGURE OF THE SAID PLOTS AS REFLECTED IN BOOKS OF ACCOUNTS. THUS, AN AMOUNT OF RS.4.28 CRORES WAS OFFERED AS ADDITIONAL INCOME BY WAY OF SALE OF PLOTS RECEIVED IN CASH OVER AND ABOVE SALES REFLECTED I BOOKS OF ACCOUNTS FO R AY 2012 - 13 5.5. THOU GH IT IS CONTENDED THAT ADEQUATE OPPORTUNITY WAS NOT GRANTED IN ASSESSMENT PROCEEDINGS, I FIND THAT THERE IS NOTHING ADDITIONAL FILED OR STATED WHICH WAS NOT THERE BEFORE THE ASSESSING OFFICER. 5.6. IT IS SEEN THAT ON PAGE 9 OF A - 10, THE DETAILS OF PLOTS , NAME OF CUSTOMERS, THE ACTUAL VALUE OF SALE AND THE AMOUNT RECEIVED IS MENTIONED. FOR INSTANCE FOR PLOT 58 OF AREA 2755 SQ. FT. FOR CLIENT HIMMATBHAI K PATEL, THE SALES VALUE (REFERRED TO AS TOTAL COST) IS RS 1,11,00,000 AGAINST WHICH RS 2776000 IS RECEI VED AND IS STATED TO BE 25 % RECVD. THUS THE AMOUNT SHOWN AS RECEIVED IS ACTUALLY 25% OF THE SALES VALUE AND THUS THE ACTUAL 25 I.T.A. NO. 1478 /MUM/201 7 SALE VALUE IS AUTHENTICATED. IDENTICAL IS THE FACT IN RESPECT OF PLOT 57 OF AREA 2755 SQ. FT. FOR CLIENT KAILASHBEN V. PATEL, THE S ALES VALUE (REFERRED TO AS TOTAL COST) IS RS 1,11,00,000 AGAINST WHICH RS 2776000 IS RECEIVED AND IS STATED TO BE 25 % RECVD. AT PAGES 89 TO 114 OF A - 10, IS THE AGREEMENT FOR SALE FOR PLOT 57. ON PAGE 113 WHICH IS. RECEIPT FOR STAMP DUTY, THE AGREEMENT VAL UE IS MENTIONED AS R~ 45,00,000 WHEREAS THE FAIR MARKET VALUE IS RS 87,04,000/ - THUS CLEARLY THE AGREEMENT IS SHOWN AT LOWER VALUE OF RS 45,00,000 THAN THE REAL VALUE OF RS 111,00,000/ - ON PAGE 46 OF A 10 IS THE LEDGER ACCOUNT IN RESPECT OF KAILASHBEN V P ATEL WHICH SHOWS THE SALE OF PLOT AS RS 45,00,000 AND IS IDENTICAL TO THE LEDGER ACCOUNT IN CASE OF HIMMATBHAI K PATEL AT PAGE 29 OF A 10. THE SALE AGREEMENT IN RESPECT OF PLOT 58 IS AT PAGES 189 TO 214. HERE ALSO THE AGREEMENT VALES IS RS . 45,00,000 AND MA RKET VALUE OF STAMP DUTY PURPOSES IS RS 87,04,000/- THUS THE SUPPRESSION ON RECEIPTS ON ACCOUNT OF SALE IS CLEAR. THE CASH RECEIPT IS NOT ACCOUNTED IN REGULAR BOOKS. AGREEMENT VALUE T RS 45 LAKHS IS 40% OF THE REAL SALE VALUE. OF RS 111,00,000/ - THE BALANC E 60% IS OBVIOUSLY RECEIVED IN CASH. IT IS STANDARD PRACTICE TO COLLECT THE CASH PORTION UPFRONT BEFORE ANY BOOKING IS MADE AND AGREEMENT IS ENTERED INTO. PAGE 9 OF A 10 GIVES LIST OF PARTIES FROM WHOM CONSIDERATION IS RECEIVED. SO OBVIOUSLY THE CASH WAS R ECEIVED. WITHOUT PRODUCING THE PARTIES AND FURNISHING COMPLETE DETAILS, THE APPELLANT CANNOT CLAIM THAT THE SALE DID NOT TAKE PLACE . 5.7 THE ADDITION MADE IS THEREFORE UPHELD AND GROUND OF APPEAL NO.II IS DISMISSED. 7. THE LD. AR SUBMITTED THAT NONE OF THE PLOT S WAS SOLD AND REGISTERED DURING THE YEAR . THE PLOT S NO. 57, 58 AND 59 WERE SOLD IN THE ASSESSMENT YEAR 2013 - 14 AND WERE DULY SHOWN IN THE RETURN OF INCOME ACCORDINGLY . THEREFORE, THE ADDITION OF RS.4.94 CRO R ES MADE BY THE AO ON THE BASIS OF ADMISSION BY THE ASSESSEE DURING THE COURSE OF SURVEY PROCEEDINGS WAS WRONG AND AGAINST THE FACTS OF THE CASE. THE LD COUNSEL OF THE ASSESSEE CONTENDED THAT IF THE ADDITION WAS AFFIRMED THE SAME WOULD RESULT INTO DOUBLE TAXATION. THE LD. CIT(A) ALSO FAIL ED TO APPRECIATE THE FACT THAT THE ADDITION BASED UPON THE ESTIMATION AND EXTRAPOLATION 26 I.T.A. NO. 1478 /MUM/201 7 ONLY . THE LD.AR SUBMITTED THAT THE PLOT NO. 56, 57 AND 58 WERE SOLD IN THE NEXT FINANCIAL YEAR WHEREAS REMAINING FIVE PLOTS REMAINED UNSOLD TILL 31.3.2016 AND ONLY ADVA NCES TAKEN AS TOKEN MONEY FROM THE BUYERS . THE LD.AR ALSO SUBMITTED THAT THE AO , ON IT S OWN IMAGINED THAT THERE WERE TWO PARTIES IN THE IMPOUNDED PAPERS WHEREAS ONLY ONE AGREEMENT WAS FOUND IN THE SURVEY. H OWEVER, NO QUERY WAS EVER PUT DURING THE ASSESS MENT PROCEEDINGS BY THE AO QUA THESE PARTIES. THE LD. AR FURTHER STATED THAT THE INCOME C OULD NOT BE ASSESSED ON THE BASIS OF EXTRAPOLL A TION, SURMISES, CONJECTURES AND PREMISES SPECIFICALLY WHEN THERE WERE NO SALE OF ANY OF THE PLOT S DURING THE YEAR AND THE PLOTS REMAINED UNSOLD. THEREFORE, THE LD.AR SUBMITTED THAT THE ADDITION MADE BY THE AO ON THIS ACCOUNT MAY BE DELETED. 8 . THE LD. DR, ON THE OTHER HAND , REITERATED THE FACTS AS NARRATED BEFORE THE LOWER AUTHORITIES AND HEAVILY RELIED ON THE ORDERS OF AUTHORITIES BELOW BY SUBMITTING THAT THE ASSESSEE HIMSELF DURING THE COURSE OF SURVEY PROCEEDINGS ADMITTED THE ADDITION AND ACCORDINGLY ADDITION WAS MADE BY THE AO AND UPHELD BY THE LD.CIT(A). THE LD. DR, FURTHER, CONTROVERTING THE ARGUMENTS OF THE LD.AR SUBMITTED THAT THE ASSESSEE HAS NOT EXPLAINED BEFORE THE AO THAT THE POSITION OF PLOTS SOLD AND THEREFORE THE AO HAS TO ESTIMATE THE INCOME FROM THESE PLOTS. FINALLY THE LD.DR PRAYED BEFORE THE BENCH THAT THE ORDER OF LD.CIT(A) BE UPHELD. 9 . WE HAVE CAR EFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDERS ON THE ISSUE . WE FIND THAT DURING 27 I.T.A. NO. 1478 /MUM/201 7 THE COURSE OF SURVEY THE ASSESSEE ADMITTED THE ADDITION TO THE TUNE OF RS.4.94 CRORES ON ACCOUNT OF 8 PLOTS, WHE REAS IN THE SUBSEQUENT CORRESPONDENCE TO THE AO, THE LD.AR BROUGHT TO THE NOTICE OF THE AO THAT DURING ONLY ONE PLOT WAS AGREED TO BE SOLD DURING THE YEAR AND THE TWO WERE SOLD IN THE NEXT YEAR AND REMAINING 5 PLOTS WERE UNSOLD EVEN TILL 31.3.2016 . T HE INCOME OF THE ASSESSEE HAS TO BE ASSESSED ON THE BASIS OF ACTUAL SALE WHEN THE PLOTS HANDED OVER TO THE BUYER AND SALES CONSIDERATION RECEIVED OR THERE IS PART PERFORMANCE AS CONTEMPLATED U/S 53A OF THE TRANSFER OF PROPERTY ACT AND NOT ON HYPOTHESIS AND EXTRAPOLATION BASIS OR MERELY ON THE BASIS OF ANY ADMISSION BY THE ASSESSEE DURING SURVEY ESPECIALLY WHEN THE SAME STANDS RETRACTED AFTERWARDS . WE ARE THEREFORE OF THE VIEW THAT THE ADDITION OF RS. 4.94 CR CAN NOT BE SUSTAINED WHEN THE ASSESSEE HAS NOT SO LD THE PLOTS DURING THE YEAR. HOWEVER THE CLAIM OF THE ASSESSEE THAT IT HAS SHOWN THE SALE OF 3 PLOTS NO 57,58 & 59 IN THE AY 2013 - 14 NEEDS VERIFICATION AT THE LEVEL OF THE AO. AS REGARDS THE CASH RECEIVED BY THE ASSESSEE OVER AND ABOVE THE AGREEMENT VALUE , WE FIND THAT DURING THE COURSE OF SURVEY ONLY ONE AGREEMENT IN RESPECT OF SHRI HIMMATBHAI A. PA T EL WAS FOUND RECORDED IN A - 10 AND THEREFORE THE ADDITION HAS TO BE RESTRICTED TO RS. 66,00,000/ - WHICH WAS ALSO PARTLY DENIED BY THE ASSESSEE VIDE LETTER DA TED 18.3.2015. SINCE THE SAID PLOT NO 58 HAS BEEN SHOWN AS SOLD IN AY 2013 - 14 THE ADDITION OF RS.66.00,000/ - SHOULD BE MADE IN THE AY 2013 - 14 ONLY . IN VIEW OF THE FACTS AND OUR OBSERVATIONS AS STATED ABOVE, THE ADDITION OF RS. 4.94 CR IS DIRECTED 28 I.T.A. NO. 1478 /MUM/201 7 TO BE D ELETED. ACCORDINGLY WE RESTORE THE ISSUE BACK TO THE FILE OF THE AO TO VERIFY THE FACT THAT THE ASSESSEE HAS SHOWN THE SALE OF 3 PLOTS IN ASSESSMENT YEAR 2013 - 14 BY SET TING ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND IF SO AO IS DIRECTED TO MAKE THE ADDI TION OF RS. 66,00,000/ - IN RESPECT OF PLOT NO 58 IN AY 2013 - 14 . ACCORDINGLY WE RESTORE THE ISSUE BACK TO THE FILE OF THE AO TO BE DECIDED ACCORDING TO OUR OBSERVATIONS MADE HEREINABOVE. THE GROUND ALLOWED FOR STATI STI CAL PURPOSES. 10. THE ISSUE RAISED IN GROUNDS OF APPEAL NO.III IS AGAINST THE UPHOLDING THE ADDITION OF RS. 2.53 CRORES BY LD.CIT(A) AS MADE BY THE AO ON THE BASIS OF DIARY NO.8 SEIZED DURING THE COURSE OF SURVEY OPERATION. 11. THE FACTS IN BRIEF ARE THAT A DIARY NO A - 8 WAS FOUND DURING TH E COURSE OF SURVEY PROCEEDINGS WHICH CONTAINED ENTRIES AND NOTINGS RELATING TO AY 2010 - 11 AND 2011 - 12. IN THE SAID DIARY THE ENTRIES RELATING TO AY 2010 - 11 WERE RS. 37,17 , 056/ - WHEREAS THE NOTINGS RELATING TO 2011 - 12 WERE RS. 6,17,52,284/ - . IN AY 2010 - 11 , RS. 21,66,242/ - WAS ADDED TO THE INCOME OF THE ASSESSEE ON THE BASIS OF PEAK THEORY AFTER EXAMINING ALL THE NOTINGS/ENTRIES OF 37,17,0596 . IN AY 2011 - 12 AN ADDITION WAS MADE OF RS. 4,80,43,104/ - AFTER MAKING ALLOWANCE OF PAYMENTS MADE TO MD AND JMD AFTER E XAMINING THE NOTINGS IN RESPECT OF AMOUNT OF 6,17,52,284/ - . THUS THE ADDITIONS WERE MADE IN THE RESPECTIVE YEARS BASED ON THESE ENTRIES AND THE MATTER ATTAINED FINALITY. HOWEVER THE AO ON THE BASIS OF 29 I.T.A. NO. 1478 /MUM/201 7 STATEMENT OF THE ASSESSEE RECORDED DURING SURVEY MADE T HE ADDITION OF RS. 2,53,34,950/ - BY SUBTRACTING THE ADDITIONS OF RS. 21,66,242/ - MADE IN AY 2010 - 11 & RS. 4,80,43,104/ - MADE IN AY 2011 - 12 FROM RS. 7,55,44,296/ - BY BRUSH ING ASIDE THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE. 12. IN THE APPELLATE PRO CEEDINGS BEFORE THE CIT(A) , THE GROUND CHALLENGING THE ADDITION HAS BEEN DISMISSED BY THE CIT(A) AFTER REJECTING THE VARIOUS ARGUMENTS RAISED BY THE LD AR OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: - I HAVE CONSIDERED THE FACTS ON RECORDS AND SUBM ISSIONS OF THE APPELLATE CAREFULLY.THE APPELLANT HAS ONLY STATED THAT AMOUNTS IN RESPECT OF A - 6 AND A - 8 WERE OFFERED TO TAX IN THE EARLIER YEARS AY 2010 - 11 AND 2011 - 12. NO RECONCILIATION OF THE AMOUNTS OF RECEIPTS TOTALING TO RS. 7,55,44,296 HAS BEEN FURNI SHED. IT IS THEREFORE NOT CLEAR WHERE AND HOW THE BALANCE OF RS. 2,53,34,950/ - HAS BEEN CONSIDERED FOR TAXATION IN THE EARLIER YEARS. AFTER ALL, MR NENSEY OFFERED IT AS INCOME IN AY AND AS PER THE APPELLANT , IT HAS BEEN ASSESSED IN THE EARLIER YEARS. EV EN IF IT WERE TO BE CONSIDERED THAT ADDITION CAN NOT BE MADE IN AY 2012 - 13, THE SAME MAY HAVE TO BE ASSESSED IN EARLIER YEAR, IF NOT ASSESSED BY REASON OF ERROR OR MISTAKE. THE ASSESSING OFFICER IS THEREFORE DIRECTED TO VERIFY THIS ASPECT AND ENSURE THAT THE CORRECT AMOUNT IS ASSESSED IN THE APPROPRIATE YEAR. FOR TECHNICAL PURPOSES THE GROUND III IS DISMISSED 13. THE LD AR VEHEMENTLY SUBMITTED BEFORE US THAT THE ENTRIES/NOTINGS WERE RELATED TO AY 2010 - 11 & 2011 - 12 AND WERE DEALT WITH IN THE RESPECT IVE YEARS AFTER EXAMINING THE ENTRIES VIS A VIS THE CONTENTIONS OF THE ASSESSEE. THE LD. AR SUBMITTED THAT IN THE ASSESSME NT YEAR 2010 - 11 THE ENTRY WAS OF RS.37,17,056/ - AND THE ADDITION WAS MADE OF RS.21,66,242/ - ON THE BASIS OF PEAK THEORY SO THE ISSUE O F ENTRIES OF RS. 37,17,056/ - WERE SETTLED. SIMILARLY IN THE ASSESSMENT YEAR 30 I.T.A. NO. 1478 /MUM/201 7 2011 - 12 OUT OF ENTRIES OF RS.6 , 17 ,52,284/ - , AN ADDITION OF RS.4,80,43,104/ - WAS MADE AFTER REDUCING THE PAYMENT S MADE TO MANAGING DIRECTOR AND JOINT MANAGING DIRECTOR AND TH US, THE INCOME ON ACCOUNT OF ENTRIES IN THE DIARY STANDS FULLY OFFERED TO TAX IN THE SAID YEAR. T HE LD AR ARGUED THAT AFTER EXAMINING ALL THESE ENTRIES ,THE ADDITIONS WHICH WERE TO BE MADE WERE ACTUALLY ADDED TO THE INCOME OF THE ASSESSEE BY GIVING REASON S FOR THAT AND THUS STANDS ASSESSED IN THE EARLIER YEARS. WHEREAS, THE AO WRONGLY TOTALED UP THE ENTRIES RELATING TO TWO YEARS I.E ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 AT RS.7,55,44,296/ - AND AFTER REDUC ING THE AMOUNT S ASSESSED IN THE ASSESSMENT YEAR 2010 - 11 OF RS.21,66,242/ - AND IN THE ASSESSMENT YEAR 2011 - 12 RS.4,80,43,104/ - , ADDED THE DIFFERENCE OF RS.2,53,34,950/ - IN THE CURRENT YEAR ON PRESUMPTIONS AND SURMISES THAT SAME WAS TO BE ASSESSED IN THE CURRENT YEAR . THE LD. AR CONTENDED THAT IN TH E ASSESSMENT YEAR 2010 - 11 OUT OF THE DIARY ENTRIES AN AMOUNT OF RS.37,17,056/ - , A SUM OF RS.21,46,244/ - WAS ADDED AFTER MAKING NECESSARY ADJUSTMENT S IN THE ASSESSMENT YEAR 2011 - 12 OUT OF DIARY ENTRIES AND IN AY 2011 - 12 OUT OF THE ENTRIES OF RS. 6,17,52,28 4/ - AN AMOUNT OF RS.4,80,43,104/ - WAS ADDED AFTER MAKING THE DEDUCTIONS/ ALLOWANCE QUA PAYMENTS TO MANAGING DIRECTOR AND JOINT MANAGING DIRECTOR . THE LD. AR CONTENDED THAT THIS HAS RESULTED IN INCOME BEING ASSESSED TWICE AND THEREFORE SHOULD BE DELETE D AS THE LD.CIT(A) HAS WRONGLY UPHELD THE ORDER OF THE AO ON THIS POINT ON THE 31 I.T.A. NO. 1478 /MUM/201 7 PRESUMPTION AND SURMISES BY DISMISSING THE GROUND INSTEAD OF GIVING A CLEARCUT FINDINGS ON THE ISSUE . 14. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF AUTHORITIES BELOW . 15. HAVING PERUSED THE MATERIAL ON RECORD AND CONSIDERING THE CONTENTIONS PUT FORTH BY THE RIVAL PARTIES, WE FIND THAT THE AMOUNT OF RS.37,17,056/ - AND RS.6,17,52,284 STANDS ASSESSED IN AY 2010 - 11 AND 2011 - 12 RESPECTIVELY AS THESE ENTRIES PERTAIN ED TO THESE YEARS AFTER MAKING NECESSARY ADJUSTMENTS AND ALLOWANCE S AT THE TIME OF ASSESSMENTS OF THE RESPECTIVE YEARS . IN OUR OPINION, THE ADDITION OF RS.2,53,34,950/ - IS NOT JUSTIFIED AT ALL AS THE AO HAS JUST REDUCED THE AMOUNT S IN THE DIARY THAT TOO RELATING TO AY 2010 - 11 AND 2011 - 12 FROM RS.7 , 55 , 44,296/ - AND ADDED THE DIFFERENCE IN THE CURRENT YEAR ON THE PRESUMPTION BASIS. BESIDES , THERE WE RE SOME CALCULATIONS MISTAKES ALSO IN ARRIVING AT THE AMOUNT OF ADDITION MADE BY THE AO SUCH AS TOTAL OF AL L ENTRIES IN DIARY PERTAINING TO BOTH THE ASSESSMENT YEAR S I.E 2010 - 11 AND AY 2011 - 12 COMES TO RS.6,54,69,340/ - AND NOT RS.75,544,296/ - AS HAS BEEN DONE BY THE AO . FROM THE RECORDS BEFORE US WE OBSERVE THAT ENTRIES IN BOTH THE EARLIER YEARS WERE EXP LAINED AND ADDITIONS WERE MADE ACCORDINGLY IN THOSE RESPECTIVE YEARS AND THEREFORE THE ORDER OF CIT(A) IS NOT CORRECT IN JUST GIVING A DIRECTION TO THE AO THAT THE ADDITION HAS TO BE MADE IN EITHER OF YEARS WHEN THE FACTS ARE CLEAR FROM THE RECORDS THAT TH E INCOMES WERE ASSESSED IN EARLIER YEARS. IN VIEW OF THE FACTS NARRATED HEREINABOVE AND OOUR OBSERVATIONS , WE SET ASIDE THE ORDER OF CIT(A) ON 32 I.T.A. NO. 1478 /MUM/201 7 THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF RS.2,53,34,950/ - . THE GROUND IS ALLOWED. 16. THE ISS UE CHALLENGED BY THE ASSESSEE IN GROUND NO IV, V AND V ARE AGAINST THE CONFIRMATION OF ADDITIONS ON ACCOUNT OF ADVANCES STANDING IN THE BOOKS OF THE ASSESSEE OF RS. 2,88,49,438/ - IN RESPECT OF GOLDEN ISLE THAI HOUSE, RS. 7,42,51,249/ - FOR OTHER PROJECTS A ND RS. 9,75,32,090/ - IN RESPECT OF ORM PROJECTS WHICH WERE ADDED TO THE INCOME OF THE ASSESSEE IN COMPLETE DISREGARD AND VIOLATION OF THE METHOD OF ACCOUNTING (PERCENTAGE COMPLETION METHOD)FOLLOWED BY THE ASSESSEE . 17. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF SURVEY , IT WAS OBSERVED BY THE SURVEY TEAM THAT THE ASSESSEE WAS HAVING ADVANCES RECEIVED AGAINST VARIOUS PROJECTS AS APPEARING IN THE BOOKS OF THE ASSESSEE. ACCORDINGLY TO THE ASSESSEE , THESE ADVANCES WERE ALREADY SUBJECTED TO TAX AS THE SAME WERE OFFERED TO THE TAX IN THE EARLIER YEARS ON THE BASIS OF PERCENTAGE COMPLETION METHOD. HOWEVER THE AO ADDED THE SAME TO THE INCOME OF THE ASSESSEE ON THE GROUND THAT THESE ARE BEING SHOWN AS ADVANCES RECEIVED FROM THE CUSTOMERS UNDER THE HEAD OTHE R LIABILITIES AND HAS NOT FILED ANY RECONCILIATION. 18. THE LD CIT(A) ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY REJECTING THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE THAT THE SAME STANDS ASSESSED TO TAX IN THE EARLIER YEARS AS PER PERCENTAGE COMPL ETION METHOD BY OBSERVING AND HOLDING AS UNDER (7.3 TO 7.6 , 8.3 TO 8.5 AND 9.4 TO 9.6 CIT(A) : - 33 I.T.A. NO. 1478 /MUM/201 7 7.3. IN THE APPELLATE PROCEEDING, IT WAS SUBMITTED THAT THE INCOME WAS ALREADY OFFERED FOR TAX IN FINANCIAL STATEMENT AND THAT NO ADDITION CAN BE MADE ONLY O N THE BASIS ADVANCE RECEIPT.. 7.4 . ON BEING REMANDED TO THE ASSESSING OFFICER IN HIS REPORT, THE ASSESSING OFFICER - MERELY REPRODUCE THE. ASSESSMENT ORDER AND MERELY STATED THAT ADDITION OF RS.2,88,49,438/ - HAS BEEN CORRECTLY MADE AS PROJECTS ARE COMPLE TED. 7.5. IN THE APPELLATE PROCEEDINGS, THE LD AR WAS ASKED TO FURNISH THE PROFIT WORKING ON THE VARIOUS PROJECTS CLEARLY SHOWING YEAR WISE PROFITS OFFERED TO TAX, THE SALES VALUE AS PER BOOKINGS, RECEIPTS FROM CUSTOMERS AND THE AMOUNT SHOWN AS ADVANCES FROM CUSTOMERS. THIS WAS TO BE RECONCILED WITH THE AUDITED PROFIT AND LOSS ACCOUNTS FOR EACH YEAR. THIS WAS CALLED AT HEARING HELD ON 9.9.2016. THIS WAS CALLED FOR TO VERIFY THE CONTENTION OF THE APPELLANT THAT INCOME HAD ALREADY BEEN OFFERED EARLIER. HOW EVER, DESPITE SUBSEQUENT OPPORTUNITIES, ADJOURNMENTS WERE SOUGHT ON 5.10.16 AND 4.11.16 BUT NO SUCH WORKINGS WERE FILED. 7.6. IT IS AN ADMITTED FACT THAT THE SHRI NENSEY ACCEPTED THAT THE INCOME IN RESPECT OF ADVANCES SHOWN FOR THE TWO COMPLETED PROJECT S THAI HOUSE AND GOLDEN ISLE PROJECTS HAD NOT BEEN OFFERED AND WERE TO FORM PART OF RETURNED INCOME FOR AY 2012 - 13. ON FAILURE OF OFFERING THE SAME, AND IN LIGHT OF THE FAILURE ON THE PART OF APPELLANT TO SUBSTANTIATE ITS CONTENTION MADE IN THE APPELLATE PROCEEDINGS, NO RELIEF CAN BE GIVEN. 7.7. THE ADDITION MADE IS THEREFORE UPHELD AND GROUND OF APPEAL NO IV IS DISMISSED. 8.3. I FIND THAT THIS ISSUE IS SIMILAR TO THE PRECEDING GROUND IV IN RESPECT OF THAI HOUSE AND GOLDEN ISLE PROJECTS. IN THE APPEL LATE PROCEEDINGS, THE LD AR WAS ASKED TO FURNISH THE PROFIT WORKING ON THE VARIOUS PROJECTS CLEARLY SHOWING YEAR WISE PROFITS OFFERED TO TAX, THE SALES VALUE AS PER BOOKINGS, RECEIPTS FROM CUSTOMERS AND THE AMOUNT SHOWN AS ADVANCES FROM CUSTOMERS. THIS WAS TO BE RECONCILED WITH THE AUDITED PROFIT AND LOSS ACCOUNTS FOR EACH YEAR. THIS WAS CALLED AT HEARING HELD ON 9.9.2016. THIS WAS CALLED FOR TO VERIFY THE CONTENTION OF THE APPELLANT THAT INCOME HAD ALREADY BEEN OFFERED EARLIER. HOWEVER, DESPITE SUBSEQUENT OPPORTUNITIES, ADJOURNMENTS WERE SOUGHT ON 5.10.16 AND 4.11.16 BUT NO SUCH WORKINGS WERE FILED. 34 I.T.A. NO. 1478 /MUM/201 7 8.4. IT IS AN ADMITTED FACT THAT THE SHRI NENSEY ACCEPTED THAT THE INCOME IN RESPECT OF ADVANCES SHOWN FOR THE OTHER COMPLETED PROJECTS HAD NOT BEEN OFFERED A ND WERE TO FORM PART OF RETURNED INCOME FOR AY 2012 - 13. ON FAILURE OF OFFERING THE SAME, AND IN LIGHT OF THE FAILURE ON THE PART OF APPELLANT TO SUBSTANTIATE ITS CONTENTION MADE IN THE APPELLATE PROCEEDINGS, NO RELIEF CAN BE GIVEN. 8.5. THE ADDITION MADE IS THEREFORE UPHELD AND GROUND O F APPEAL NO V IS DISMISSED. 9.4. IN THE APPELLATE PROCEEDING, IT WAS SUBMITTED THAT THE ASSESSEE CONSISTENTLY FOLLOWING ITS METHOD OF ACCOUNTING FOR RECOGNIZING REVENUE YEAR AFTER YEAR ON BASIS OF PROJECT COMPLETION, HOW EVER, THE ASSESSEE OFFERS ON PERCENTAGE BASIS CERTAIN PROFITS OF ONGOING PROJECTS WHICH IS YET TO BE COMPLETED. ADDITIONS HAVE BEEN MADE WITHOUT ANY EVIDENCES OR PROPER REASON ING . 9.5. I HAVE CONSIDERED THE SUBMISSIONS. AS ALREADY NOTED AND MENTIONED EARLIER, THE APPELLANT HAD BEEN ASKED TO FURNISH DETAILS PR O JECT WISE OF THE SALES BOOKED. AMOUNT OF ADVANCES RECEIVED, COMPLETION OF THE RESPECTIVE PROJECTS, AMOUNTS OFFERED AS INCOME RECONCILED WITH THE AUDITED ACCOUNTS FOR EACH YEAR. THIS WAS N OT FURNIS HED. THUS, THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CONTENTIONS. 9.6. THE ADDITION MADE IS THEREFORE UPHELD AND GROUND OF APPEAL NO VI IS DISMISSED 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORDS ALONG WITH THE I MPUGNED ORDER. WITH REGARD TO THE GROUNDS OF APPEAL NO.IV,V , AND VI , THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE WAS FOLLOWING THE SYSTEM OF PERCENTAGE COMPLETION METHOD AND HAS BEEN OFFERING TO TAX THE INCOME FROM THE ONGOING PROJECTS AT THE RATE OF 10% OF THE TOTAL ADDITION/ ACCRETION IN THE WORK - IN - PROGRESS IN EACH AND EVERY YEAR . THE LD. AR CONTENDED THAT IN EVERY Y EAR WHATEVER WORK WAS DONE WAS OFFERED TO TAX AT THE RATE OF 10% AND THEREFORE IN THE YEAR OF SALE/COMPLETION OF ENTIRE PROJECT , THE PROFIT WAS FINALLY 35 I.T.A. NO. 1478 /MUM/201 7 ADJUSTED WHICH COULD BE MORE OR LESS THAN THE PERCENTAGE OF 10% DECLARED IN THE EARLIER YEARS. THE LD. AR SUBMITTED THAT THE SYSTEM OF ACCOUNTING HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE EARLIER YEARS AND ALSO IN THE CURRENT YEAR A ND EVEN THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALLOWED THE CREDIT OF PROFIT ALREADY DECLARED BY THE ASSESSEE. THE SAID FACTS HAS BEEN ACCEPTED BY THE REVENUE AUTHORITIES ALSO WHILE MAKING THE ADDITION OF RS. RS.2,88,49,438/ - . THE SAID AMOUNT OF ADDITION HAS BEEN CALCULATED BY THE AO BY DEDUCTING A SUM OF RS.1,23,29,645/ - WHICH REPRESENTED THE SALES OF THAI VILA AND RS.1,60,44,734/ - THE SALE FROM GOLDEN ISLE PROJECT FROM RS.5,72,23,817/ - WHICH REPRESENTED THE TOTAL AMOUNT OF ADVANCES RE CEIVED FROM THE SAID PROJECTS ON THE BELIEF THAT PROFIT WAS DECLARED IN EARLIER YEARS. THE ADDITION S MADE, THEREFORE, AMOUNTING TO RS.2,88,49,438/ - IN RESPECT OF ADVANCES RECEIVED FROM GOLDEN ISLE AND THAI HOUSE , RS. 7,42,51,249/ - ON ACCOUNT OF ADVANCES FROM OTHER PROJECTS AND RS.9,75,32,090/ - TOWARDS ADVANCES RECEIVED FROM ORM PROJECT S WERE TOTALLY WRONG AND AGAINST THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE AND HAS RESULTED INTO DOUBLE TAXATION . THE LD. AR SUBMITTED THAT ONCE THE DEPARTMENT A CCEPTED THE METHOD OF COMPLETION TO ASSESS THE PROFIT OF ASSESSEE, THE ADVANCE S RECEIVED BY THE ASSESSEE IN RESPECT OF VARIOUS PROJECTS COULD NOT BE ASSESSED AS THIS WOULD AMOUNT TO DOUBLE TAXATION OF SAME INCOME AND IN VIOLATION OF PRINCIPLE OF METHO D OF ACCOUNTING REGULARLY FOLLOWED AND ACCEPTED BY THE DE PARTMENT . WE ALSO NOTE THAT RS.2,88,49,438/ - RELATED TO THE GOLDEN ISLE 36 I.T.A. NO. 1478 /MUM/201 7 AND THAI HOUSE PROJECT WHICH WAS COMPLETED DURING THE YEAR AND OFFERED TO TAX AT THE END OF THE YEAR. SIMILARLY, THE ADVAN CE OF RS.7,44,40,249/ - OF ADVANCES RECEIVED FROM OTHER PROJECTS AND RS.9,75,74,090/ - WHICH STANDING ON THE DATE OF SURVEY, THE ASSESSEE OFFERED ONLY THE INCOME OF PERCENTAGE COMPLETION METHOD BY APPLYING THE SAME ACCRETION IN WORK - IN - PROGRESS AND THEREFO RE CON CLUSION DRAWN BY THE LD.CIT(A) WA S WRONG AND AGAINST THE FACTS OF THE CASE AS IT IS ADEQUATELY CLEAR FROM THE FACTS ON RECORDS ALL THE WORK DONE ON VARIOUS PROJECTS IS OFFERED AT THE RATE OF 10% IN EVERY YEAR WITH FINAL ADJUSTMENT IN THE YEAR OF COM PLETION . WE, THEREFORE, SET ASIDE THE ORDER OF LD.CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION S OF RS. 2,88,49,438/ - , RS.7,42,51,249/ - AND RS. 9,75,32,090/ - . THE GROUND NO IV, V VI ARE ALLOWED. 20. THE ISSUE RAISED IN GROUNDS OF APPEAL NO.VI I IS WITH REGARD TO CONFIRMATION OF ADDITION OF RS.2,51,86,010 / - ON ACCOUNT OF BOGUS PURCHASES FROM PRIDE STEEL P LTD. 2 1 . HAVING HEARD , THE LD. COUNSEL OF THE ASSESSEE AND THE LD.DR AND ON PERUSAL OF THE RECORD PLACED BEFORE US INCLUDING THE IMPUGNED ORDER , WE FI ND THAT THE AO HAS MADE DISALLOWANCE OF RS. 2,51,86,010/ - ON THE GROUND THAT NOTICE U/S 133(6) OF THE ACT SENT TO THE PARTIES COULD NOT BE SERVED AND THE ASSESSEE FAILED TO PRODUCE THE PARTIES BEFORE THE AO WHICH WAS A HAWALA PARTY . THE UNDISPUTED FACTS A RE THAT THE ASSESSEE FILED THE NECESSARY BILLS OF THE SUPPLIER AND PAYMENTS DETAILS. THE FAA ALSO CONFIRMED THE ADDITION MADE BY THE AO ON THE GROUND THAT 37 I.T.A. NO. 1478 /MUM/201 7 THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE MATERIAL PURCHASED AS NO CONFIRMATION WAS FIL ED OR THE SUPPLIER WAS PRODUCED, NO STOCK TALLY WAS FURBISHED ETC AND FINALLY THE PART Y WAS NOT TRACEABLE. WE FURTHER FIND THAT THE LD.AR BEFORE THE FAA HAS MADE ALTERNATIVE SUBMISSIONS THAT THE ADDITION BE RESTRICTED TO 12.5 % OF THE TOTAL PURCHASES MADE FROM THE HAWALA OPERATORS. IN OUR OPINION , THE TOTAL DISALLOWANCE OF PURCHASE S IS NOT JUSTIFIED SPECIALLY WHEN THE PAYMENT OF SUPPLIERS MADE BY ACCOUNT PAYEE CHEQUES AND MERELY ON THE BASIS OF THE PART Y IS DECLARED BY THE STATE SALES DEPARTMENT AS HAWA LA OPERATORS . IN SUCH A CASES THE ASSESSEE MAKES THE PURCHASES FROM THE GREY MARKET AND THEREBY MAKES SAVINGS OF VAT AND OTHER INCIDENTAL LEVIES. IN THE SIMILAR CASES THE COORDINATE BENCHES IN A NUMBER OF DECISIONS TAKEN A VIEW THAT ADDITIONS @ 12.5% SHOU D BE MADE TO COVER THE LEAKAGES AND SAVINGS OF VAT ETC. I N OUR OPINION, IT WOULD BE REASONABLE AND JUSTIFIED IF THE ADDITION IS RESTRICTED TO THE EXTENT OF 12.5% OF THE TOTAL BOGUS PURCHASES MADE FROM THE HAWALA DEALER WHICH WORKS OUT TO RS.31,48,250/ - . ACCORDINGLY, WE PARTLY ALLOW THE GROUNDS OF APPEAL NO.VII . 22 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND SEP T , 2017 . S D SD ( D.T.GARASIA ) ( RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : . 22 . 9 .2017 SR.PS:SRL: 38 I.T.A. NO. 1478 /MUM/201 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / TH E CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI