The DCIT, Central Circle-2, Surat V. Brijwasi Developers Pvt.Ltd., Surat

ITA 1660/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5879 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Document seized; Additional evidence; Question of law; Documents seized
• Section: 69C; 43B; 40A(3); 143(3); 54B; 133A; 153A; 68; 69

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.290/AHD/2013 AND 3187/AHD/2011 / ASSTT. YEAR: 2006-2007 AND 2008-2009 ./ ITA NO.1659/AHD/2012 WITH CO NO.171/AHD/2012 / ASSTT. YEAR: 2007-2008 AND ./ ITA NO.1660/AHD/2012 WITH CO NO.172/AHD/2012 / ASSTT. YEAR: 2009-2010 DCIT, CENT.CIR.2 SURAT. VS. BRIJWASI DEVELOPERS P.LTD. 102, PLATINUM APARTMENT BRIJWASI ESTATE NR. GATEWAY HOTEL PARLE POINT SURAT 395 003. PAN : AACCB 5646 R / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PRASENJIT SINGH, CIT-DR WIT H MR.ALBINUS TIRKEY, SR.DR ASSESSEE BY : SHRI RASESH SHAH, CA ! / DATE OF HEARING : 08/03/2017 '#$ ! / DATE OF PRONOUNCEMENT: 17/05/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ITA NO.3187/AHD/2011 AND 5 OTHERS 2 REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A) DATED 19.11.2012, 17.5.2012, 20.10.2011 A ND 17.5.2012 PASSED IN THE ASSTT.YEARS 2006-07 TO 2009-10 RESPEC TIVELY. 2. ON RECEIPT OF NOTICE IN THE REVENUES APPEAL FOR THE ASSTT.YEAR 2007-08 AND 2009-10, THE ASSESSEE HAS FILED CO BEAR ING NO.171 AND 172/AHD/2012. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, WE DEEM IT APPROPRIATE TO DISPOSE OF THE M BY THIS COMMON ORDER. 3. THE LD.CIT(A) HAS DECIDED THE APPEAL FOR THE ASS TT.YEAR 2008-09 ON 20.10.2011. THIS ORDER WAS FOLLOWED IN REST OF THE ASSESSMENT YEARS. THE LD.COUNELS HAVE ALSO ADDRESSED THEIR AR GUMENTS IN THIS ASSESSMENT YEAR. THEREFORE, FOR THE FACILITY OF RE FERENCE, WE ARE TAKING UP THE FACT MAINLY FROM THIS ASSESSMENT YEAR. IN C ASE WE FIND ANY VARIATION IN THE FACTS, THEN WE WILL TAKE THOSE FAC TS IN THOSE YEARS. 4. GROUNDS OF THE APPEAL RAISED BY THE REVENUE IN T HE ASSTT.YEAR 2008-09 READ AS UNDER: 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5,08,84,180/- OUT OF TOTAL ADDITION OF RS.5,94,1 4,500/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NOT SHOWING 'ON-MON EY' RECEIPT FROM SALE OF FLAT. 2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN H OLDING UNILATERALLY THAT THE ON MONEY OF RS.61,00,000/- REPRESENTED CANCELLA TION AND THEREFORE CANNOT BE TAKEN AS PART OF THE ON-MONEY EARNED BY THE ASSESSEE WITHOUT GIVING THE ASSESSING OFFICER AN OPPORTUNITY IN THIS RESPECT. 3) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN A PPLYING THE RATE OF 16% TO DETERMINE THE UNACCOUNTED PROFIT ON THE ON-MONEY IGNORING THAT THE ASSESSEE HAVING DECLARED A PROFIT OF RS.15 CRORE ON -ON-MONEY OF RS.36 CRORE IN THE COURSE OF SURVEY THEREBY ADMITTING HIS PROFIT MARGIN AT 42%. 4) THE LD.CIT(A) WHILE ESTIMATING THE UNACCOUNTED P ROFITS ERRED IN NOT APPLYING THE PROVISIONS OF SECTION 40A(3) OF THE AC T IN RESPECT OF THE EXPENDITURE INCURRED. 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. ITA NO.3187/AHD/2011 AND 5 OTHERS 3 6) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 5. A PERUSAL OF THE ABOVE GROUNDS WILL INDICATE THA T ONLY ONE ISSUE IS INVOLVED IN THIS APPEAL, AND ALL OTHER GROUNDS TAKE N BY THE REVENUE ARE PERIPHERAL ASPECTS OF SINGLE ISSUE INVOLVED IN THE APPEAL. THE BASIC ISSUE IS WHETHER ON-MONEY RECEIPT ADMITTED BY THE ASSESSEE AND CALCULATED ON THE BASIS OF MATERIAL FOUND DURING TH E COURSE OF SURVEY IS TO BE TAXED INTOTO OR INCOME IS TO BE DETERMINED BY APPLYING A SPECIF IC RATE OF PROFIT OUT OF THIS ON-MONEY RECEIPT. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME IN ASSTT.YEAR 2008-09 ON 26.9.2008 DECLARING INCOME AT NIL. SURVEY UNDER SECTION 133A WAS CONDUCTED ON 6.1.2010 . DURING THE COURSE OF SURVEY STATEMENT OF SHRI MURARILAL AGARWA L WAS RECORDED. HE WAS CONFRONTED WITH VARIOUS INCRIMINATING DOCUMENTS RELATED TO THE BUSINESS WHICH WERE IMPOUNDED DURING THE COURSE OF SURVEY. IN REPLY TO QUESTION NOS.7 & 8, HE HAS ADMITTED EARNING OF U NACCOUNTED INCOME AND OFFERED A SUM OF RS.15 CRORES FOR ASSESSMENT IN DIFFERENT YEARS. IN THIS RS.15 CRORES, HE HAS DISCLOSED THAT UNACCOUNTE D INCOME OF EARLIER YEAR IS ALSO INVOLVED. BEFORE REFERRING TO THE DIS CUSSION MADE BY THE AO IN DIFFERENT ASSESSMENT YEARS, WE WOULD LIKE TO MAK E REFERENCE TO THE DETAILS TABULATED BY THE LD.COUNSEL FOR THE ASSESSE E AT THE START OF HEARING. HE POINTED OUT THAT RS.15 CRORES DECLARED BY THE ASSESSEE HAS BEEN OFFERED FOR TAXATION AND THE STATUS OF THE ASS ESSMENT HAS BEEN COMPILED WITH. HIS NOTING READS AS UNDER: SR.NO. A.Y. ADDITION MADE CONFIRMED BY CIT(A) ASSESSEE'S ADMISSION - 1 2006-2007 88,29,000 NIL 1,86,00,000 2 2007-2008 9,05,40,625 39,72,502 39,72,502 ITA NO.3187/AHD/2011 AND 5 OTHERS 4 3 2008-2009 6,51,80,002 85,30,320 85,30,320 4 2009-2010 14,42,90,625 3,59,17,152 3,59,17,152 5 2010-2011 1,92,53,045 PENDING 3,00,00,000 6 2011-2012 PENDING PENDING 2,30,00,000 7 2012-2013 PENDING PENDING 1,20,00,000 8 2013-2014 ONWARDS PENDING PENDING 1,49,80,026 14,70,00,000 ADD. 2010-2011 FOR ADMISSION IN THE CASE OF BRIJWAS I CONSTRUCTION RS. 30,00,000 TOTAL RS. 15,00,00,000 NOTES:- 1. THIS SEARCH WAS CONDUCTED ON 18.01.2006 AND ASSE SSEE MADE DECLARATION RS.1.86 CRORES. THIS DECLARATION WAS RE FLECTED IN RETURN OF INCOME FILED AFTER DATE OF SEARCH. 2. SURVEY WAS CONDUCTED ON 06.03.2010 AND DECLARATI ON OF 15 CRORES WAS MADE FOR VARIOUS YEARS. 3. AS RETURNS OF INCOME WERE ALREADY FILED FOR A.Y. 2007-2008 TO A.Y.2009-2010, NO DECLARATION COULD BE MADE IN THE RETURN OF INCOME BUT ADDITION CONFIRMED BY CIT (A) ACCEPTED. 4. HOWEVER THE DECLARATION WAS MADE IN THE RETURN O F INCOME FOR A.Y.2010-2011 &0NWARDS. 5. ASSESSES CLAIMED TELESCOPING OF RS.1.86 CORES DE CLARED AT THE TIME OF SEARCH RELEVANT TO A.Y.2006-2007. 6. REVENUE HAS FILED THE APPEALS BEFORE HON'BLE TRI BUNAL FOR THE A.Y.2006-2007 TO 2009-2010,AGAINST THE ORDER OF CIT (A) WHICH ARE PENDING. 7. THE ASSESSING OFFICER TAXED 100% ON MONEY FOR AL L YEARS EXCEPT FOR A.Y. 2008-09 ON CASH BASIS WHILE FOR A.Y. 2008-09 A O TAXED ON ACCRUAL ITA NO.3187/AHD/2011 AND 5 OTHERS 5 BASIS. HOWEVER, THE LEARNED CIT(A) TAXED NET PROFIT AGAINST ON MONEY ON ACCRUAL BASIS FOR ALL THE YEARS. 7. REFERRING BACK TO THE ASSESSMENT ORDER, IT IS BE ING OBSERVED THAT NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED O N 26.8.2009. IT WAS DULY SERVED UPON THE ASSESSEE. THE LD.AO HAS OBSER VED THAT THE ASSESSEE HAS DEVELOPED VARIOUS PROJECTS VIZ. SOLITA IRE, PLATINUM, RADHAPURAM RESIDENCY AND BRIJ VASUNDHARA. HE HAS C ALCULATED PROJECT-WISE, FINANCIAL YEAR-WISE ON-MONEY RECEIPTS BY THE ASSESSEE AND NOTICED THESE DETAILS ON PAGE NO.2 OF THE ASSESSMEN T ORDER, AND THEREAFTER, THE LD.AO MADE REFERENCE TO DOCUMENTS I NVENTORISED AS ANNEXURE B1-19, WHICH IS DIARY FOUND DURING THE COU RSE OF SURVEY CONTAINING DETAILS OF FLATS SOLD BY THE ASSESSEE, P RICE SHOWN IN THE SALE DEED, ACTUAL PRICE RECEIVED AND THE DIFFERENCE BETW EEN PRICE MENTIONED IN THE SALE DEED VIZ. ACTUAL RECEIPT BY THE ASSESSE E. WITH REGARD TO THE ASSESSMENT YEAR 2008-09 SUCH DETAILS READS AS UNDER : SR. NO. NAME OF THE BUYER FLAT NO PRICE AS PER SALE DEED ACTUAL PRICE RECEIVED DIFFERENCE 01 ANIL AGRAWAL 801 33,00,000/- 2,06,71,500/- 1,73,71,500/- 02 SUMITRA SURESH GUPTA 901 33,00,000/- 2,67,71,500/- 2,34,71,500/- 03 CHETAN MEHTA 701 33,00,000/- 2,18,71,500/- 1,85,71,500/- 99,00,000/- 6,93,14,500/- 5,94,14,500/- THE LD.AO MADE AN ADDITION OF RS.5,94,14,500/- ON T HE STRENGTH OF THE STATEMENT GIVEN BY SHRI MURARILAL AGARWAL ON BEHALF OF WHOLE GROUP. DISSATISFIED WITH THE ADDITION, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE LD.CIT(A). 8. ON APPEAL, THE LD.CIT(A) HAS WORKED OUT AN AMOUN T OF RS.5,08,84,180/- INSTEAD OF RS.5,94,14,500/- WORKED OUT BY THE AO. ITA NO.3187/AHD/2011 AND 5 OTHERS 6 THEREAFTER, THE LD.CIT(A) HAS OBSERVED THAT ONLY EL EMENT OF PROFIT INVOLVED IN THESE ON-MONEY IS TO BE ASSESSED AS INC OME OF THE ASSESSEE. THE LD.CIT(A) HAS MADE REFERENCE TO THE CASES OF EIGHT SIMILARLY SITUATED ASSESSEES WHEREIN NET PROFIT HAS BEEN APPLIED BY THE AO FOR WORKING OUT TAXABLE INCOME ON THE BASIS OF O N-MONEY RECEIVED BY THEM. ALL THESE ASSESSEES WERE ASSESSED IN SIMI LAR RANGE. THE LD.CIT(A) MADE REFERENCE TO THE STATEMENT OF SHRI M URARILAL AGARWAL RECORDED DURING THE COURSE OF SURVEY. THE FINDING OF THE LD.CIT(A) IS WORTH TO NOTE IN THIS CONNECTION. IT READS AS UNDE R: 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ORDER OF THE A.O. AND THE SUBMISSIONS OF THE APPELLANT. IN T HE PRESENT CASE, IT IS SEEN THAT THAT THE APPELLANT HAS BEEN R ECOGNIZING ITS REVENUE AT THE TIME OF SALE OF FLATS AND THIS METHO D OF ACCOUNTING HAS BEEN CONSISTENTLY FOLLOWED BY IT AND THE SAME H AS EVEN BEEN ACCEPTED BY THE A.O. FURTHER, IT IS SEEN THAT DURIN G THE COURSE OF SURVEY ACTION, VARIOUS INCRIMINATING EVIDENCES OF N OT ONLY UNACCOUNTED RECEIPTS I.E. ON-MONEY HAS BEEN FOUND B UT NOTINGS OF EVEN UNACCOUNTED EXPENDITURE INCURRED THEREFROM HAV E BEEN FOUND AND IMPOUNDED. THESE DETAILS ARE AVAILABLE IN ANNEXURE B- 11AND B-19 AND THE ID COUNSEL FOR THE APPELLANT HAS FILED SOME DETAILS OF UNACCOUNTED EXPENDITURE. AFTER PRELIMINARY VERIFICATION OF THE IMPOUNDED MAT ERIAL CONTAINING INCOMPLETE DETAIL OF UNACCOUNTED RECEIPT S AS ALSO UNACCOUNTED EXPENDITURE, SHRI MURARILAL AGARWAL DIR ECTOR OF THE APPELLANT COMPANY, DISCLOSED A NET UNACCOUNTED INCO ME OF RS. 15 CRORES FOR THE ENTIRE GROUP, CATEGORICALLY STATING THAT NO EXPENDITURE IS LEFT TO BE INCURRED FROM THE NET UNA CCOUNTED INCOME OF RS. 15 CRORES AND ALSO STATED TO REVISE T HE RETURNS OF THE EARLIER YEARS FILED PRIOR TO THE DATE OF SURVEY I.E. 06-01-2010 BY OFFERING THE PROPORTIONATE DISCLOSED INCOME ATTR IBUTABLE TO THAT YEAR. HOWEVER, THE RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION I.E. A.Y. 2008-09 WAS NOT REVISED AND THE DISCLOSURE ATTRIBUTABLE FOR THE YEAR UNDER CONSIDERATION, WAS NOT OFFERED FOR TAX. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. OBSERVED THAT THE APPELLANT HAD SOLD 3 FLATS OF ITS PROJECT 'PLATINUM APARTMENT' DURING THE YEAR UNDER CONSIDER ATION HOWEVER, THE DISCLOSURE PORTION THEREOF WAS NOT OFF ERED FOR TAX IN THE RETURN OF INCOME AND ACCORDINGLY, THE A.O. MADE ADDITION OF ITA NO.3187/AHD/2011 AND 5 OTHERS 7 RS. 5,94,14,500/- FOR THE ENTIRE UNACCOUNTED RECEIP TS I.E. ON- MONEY OF THE SAID 3 FLATS. ON THE BASIS OF THE FACTS OF THE CASE, THE CONTENTI ONS RAISED BY THE APPELLANT AND THE LAW AS LAID DOWN BY .VARIOUS COURTS, THE FOLLOWING THREE ISSUES NEED CONSIDERATION. (I) THE FIRST ISSUE IS THAT WHETHER THE ENTIRE ON-M ONEY RECEIPTS CAN BE TREATED AS THE INCOME OF THE APPELLANT, WHEN INCOMPLETE DETAILS OF BOTH UNACCOUNTED RECEIPTS AND EXPENDITUR E HAVE BEEN FOUND AND IMPOUNDED. (II) THE SECOND ISSUE IS THE APPLICABILITY OF SECTI ON 69C TO THE FACTS OF THE PRESENT CASE; (III) AND IF ENTIRE RECEIPT CAN'T BE TREATED AS NET INCOME THEN WHAT WOULD BE THE REASONABLE RATE OF PROFIT WHICH N EEDS TO BE APPLIED TO THE ON-MONEY TO DETERMINE THE INCOME OF THE APPELLANT IN RESPECT OF THE FLATS SOLD DURING THE YEAR UNDER CONSIDERATION. AS REGARDS THE FIRST ISSUE AS TO WHETHER THE ENTIRE ON-MONEY RECEIPTS COULD BE TREATED AS THE INCOME OF THE APPE LLANT, REFERENCE IS FIRST TAKEN TO THE STATEMENT OF THE DI RECTOR SHRI MURARILAL AGARWAL RECORDED ON THE DATE OF SURVEY, T HE RELEVANT EXTRACT OF WHICH IS REPRODUCED HEREIN BELOW. RELEVANT EXTRACT OF REPLY TO QUESTION NO. 6 GIVEN B Y SHRI MURARILAL AGARWAL IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY 'THE EXPLANATION IN RESPECT OF BOOKS AND FILES I NVENTORISED AS ANNEXURE BL IS AS FOLLOWS. 6) BI-11 : THIS DIARY CONTAINS THE NOTTINGS OF PROJ ECT RELATED PAYMENT OF EXPENSES. .. .. 10) BI-16 : THIS PAD CONTAINS NOTTINGS OF MEASUREME NT RELATED TO CONSTRUCTION WORK AND DETAILS OF EXPENDITURE. 13) BI-19 : THIS BOOK CONTAINS THE NOTTINGS OF SAL E / BOOKING OF FLATS IN VARIOUS PROJECTS CONSTRUCTED BY US AS RECEIVED IN C ASH AND CHEQUE ALONG WITH THE NAME OF THE BUYER, AREA OF TH E FLAT AND SALE RATE PER SQ. FT. THE FIGURES WRITTEN IN TH IS BOOK ARE IN CODE AND IN SOME PLACES FULL FIGURES ARE WRITTEN. W HATEVER FIGURES ARE WRITTEN IN CODES MAY BE READ IN LACS. F OR EXAMPLE, THE FIGURE 97/00 WRITTEN ON PAGE NO. 1 MEA NS RS. 97,00,000/- (NINETY SEVEN LACS). IN THE SAME WAY, T HE FIGURES 32/00, 60/00 AND 18/00 AS WRITTEN ON PAGE N O. 10 MEANS RS. 32 LACS, RS. 60 LACS AND RS. 18 LACS. WHATEVER CASH PAYMENT IS NOTED IN THE SAID BOOK HAS NOT BEEN ITA NO.3187/AHD/2011 AND 5 OTHERS 8 RECORDED IN THE REGULAR BOOKS WHEREAS AGAINST CHEQU E PAYMENT THE WORD (P) HAS BEEN WRITTEN WHICH MEANS 'PAKKA' I.E. THE SAID PAYMENT HAS BEEN RECORDED IN THE REGULAR BOOKS.' FROM THE AFORESAID STATEMENT IT IS APPARENT THAT DU RING THE COURSE OF SURVEY ACTION, EVIDENCES OF BOTH UNACCOUNTED INCOME AS ALSO EVIDENCES OF UNACCOUNTED EXPENDITURE INCURRED THEREFROM HAVE BEEN FOUND AND IMPOUNDED. FURTHER, ON GOING THROUGH THE REPLY TO QUESTION NO. 7 OF THE STATEMENT RECORDED DURING SURVEY ACTION, IT CAN BE SEEN THAT AFTER CONSIDERING ALL THE IMPOUNDED MATERIALS, SHRI MURAR ILAL AGARWAL HAS MADE A DISCLOSURE OF NET UNACCOUNTED INCOME OF RS. 15 CRORES BY DEDUCTING ALL UNACCOUNTED EXPENDITURE FROM THE UNAC COUNTED RECEIPTS AND THE RELEVANT EXTRACT OF THE SAME IS REPRODUCED HEREIN BELOW: RELEVANT EXTRACT OF REPLY TO QUESTION NO. 7 GIVEN B Y SHRI MURARILAL AGARWAL IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY 'AFTER CONSIDERING THE PAPERS IMPOUNDED FROM THE SI TE OFFICE, PLATINUM BUILDING OFFICE, THE STATEMENTS RECORDED O F MY SONS AS ALSO MY STATEMENT HEREIN BEFORE - I ADMIT THAT TILL DATE WE HAVE EARNED NET UNACCOUNT ED INCOME OF RS. 15,00,00,000/- (IN WORDS RS. FIFTEEN CRORES). THIS UNACCOUNTED INCOME OF RS. 15,00,00,000/- (RS. FIFTEEN CRORES) BELONGS TO OUR GROUP VIZ. BRIJWASI DEVELOPE RS PVT LTD., BRIJWASI EXIM PVT. LTD. AND FAMILY MEMBERS WHICH IS OVER AND ABOVE THE REGULAR BUSINESS INCOME AND FROM THIS UNA CCOUNTED INCOME, NO TYPE OF EXPENSES IS PENDING TO BE INCURR ED. IN THIS UNACCOUNTED INCOME OF RS. 15,00,00,000/- TH E UNACCOUNTED INCOME OF ALL THE PROJECTS DEVELOPED BY M/S. BRIJWASI DEVELOPERS PVT. LTD. VIZ. SOLITAIRE, PLATINUM BUILD ING, ASTHA FARM, RADHA PURAM VILLA (THE PROJECT OF THE PARTNERSHIP F IRM M/S. BRIJWASI CONSTRUCTION, BRIJ VASUNDHARA, RADHA PURAM RESIDENCY AND PURCHASE SALE OF LAND AT UBHRAT VILLAGE IS INCL UDED. IN THIS ADMITTED UNACCOUNTED INCOME OF RS. 15,00,00 ,000/- UNACCOUNTED INCOME OF EARLIER YEARS IS ALSO INCLUDE D. THIS UNACCOUNTED INCOME OF RS. 15,00,00,000/- IS DECLARE D VOLUNTARILY AND THEREFORE, I PLEAD THAT I SHOULD BE RELIVED FROM TH E PENALTY PROCEEDINGS AND I WILL FILE THE REVISE RETURNS OF T HE EARLIER YEARS BEFORE 31-09-2010.' ITA NO.3187/AHD/2011 AND 5 OTHERS 9 THE APPELLANT FURTHER SUBMITTED THAT EVEN DURING TH E COURSE OF SURVEY PROCEEDINGS, THE DEPARTMENTAL OFFICERS WERE AWARE THAT THE ON-MONEY RECEIPTS WERE OF AROUND RS. 36 CRORES AND EVEN THEN, THEY HAVE NOT PUT FORTH ANY FURTHER QUESTION AS TO WHY ONLY NET UNACCOUNTED INCOME OF RS. 15 CRORES SHOULD BE A CCEPTED, SINCE, THEY WERE WELL AWARE THAT THE IMPOUNDED MATE RIAL ALSO CONTAINED DETAIL OF UNACCOUNTED EXPENSES. THE APPEL LANT HAS POINTED OUT THE IMPOUNDED MATERIAL IN THE FORM OF A NNEXURE-BI- 19 WHICH CONTAINS DETAIL OF BOTH UNACCOUNTED RECEIP TS AND UNACCOUNTED EXPENDITURE ARID I THUS, AGREE WITH THE APPELLANT THAT THIS IS NOT A CASE WHERE ONLY EVIDENCE OF ON-M ONEY RECEIPTS HAVE BEEN FOUND BUT THIS IS A CASE WHERE INCOMPLETE RECORDS OF UNACCOUNTED RECEIPTS AND EXPENDITURE HAVE BEEN FOUN D. . THEREFORE, I AM OF THE OPINION THAT THE A.O. HAS GR OSSLY ERRED IN HOLDING THAT THE IMPOUNDED MATERIAL CONTAI N NO DETAILS OF UNACCOUNTED EXPENDITURE AND THEREFORE, HIS ACTION O F ADDING THE ENTIRE ON-MONEY AS INCOME IS CONTRARY TO THE FACTS OF THE CASE. IT IS THUS AN ESTABLISHED FACT THAT IN THE PRESENT CASE, INCOMPLETE DETAILS OF UNACCOUNTED RECEIPTS (ON-MONE Y) .AND UNACCOUNTED EXPENDITURE HAVE BEEN FOUND AND THE TOT AL INCOME OF THE APPELLANT COULD NOT BE PROPERLY COMPUTED ON THE BASIS OF SUCH INCOMPLETE EVIDENCES AND IN SUCH CASES, IT IS A WEL L ESTABLISHED LAW THAT THE ENTIRE UNDISCLOSED SALES COULD NOT BE ADDED AS INCOME OF THE ASSESSEE BUT THE ADDITION COULD BE MA DE ONLY TO THE EXTENT OF ESTIMATED PROFITS EMBEDDED IN SUCH UNACCO UNTED SALES FOR WHICH A COMPARABLE NET PROFIT RATE NEEDS TO BE ADOPTED. EVEN IN A BEST JUDGEMENT ASSESSMENT ASSESSEE CANNOT BE S ADDLED WITH UNJUSTIFIABLE TAX LIABILITY AND AN APPELLATE AUTHOR ITY CAN CERTAINLY SET RIGHT INJUSTICE CAUSED TO THE ASSESSEE. THE AFORESAID VIEW OF BRINGING TO TAX THE NET PROFI T IS DULY SUPPORTED BY THE FOLLOWING DECISIONS OF THE JURISDI CTIONAL TRIBUNAL AND HIGH COURT, AS ALSO VARIOUS; OTHER COURTS, AS I S DISCUSSED HEREIN BELOW. IN THE CASE OF KISHOR MOHANLAL TELWALA VS. ACIT (19 99) 64 TTJ (AHD) 543 THE AHMEDABAD BENCH OF THE ITAT HAS HELD THAT WHAT CAN BE TAXED IS UNDISCLOSED INCOME AND NOT UNDISCLO SED RECEIPT AND THE AO WAS NOT JUSTIFIED IN MAKING ADDITION U/S . 158BC OF THE TOTAL UNDISCLOSED RECEIPT ON ACCOUNT OF 'ON-MONEY' ADMITTEDLY CHARGED BY THE ASSESSEE WITHOUT GIVING DEDUCTION FO R UNACCOUNTED .PAYMENTS SHOWN TO BE HAVE BEEN MADE BY THE ASSESSE E. ITA NO.3187/AHD/2011 AND 5 OTHERS 10 FURTHER, IN THE CASE OF ABHISHEK CORPORATION V. DCI T' (1999) 63 TTJ (AHD) 651 THE AHMEDABAD BENCH OF THE I.T.A.T. H AS HELD THAT WHERE THE SEIZED DOCUMENTS INDICATED THAT ASSESSEE WAS RECEIVING PREMIUM/ 'ON MONEY' ON BOOKING OF FLATS, THE ENTIRE .PREMIUM CHARGED BY ASSESSEE CANNOT BE TREATED AS U NDISCLOSED INCOME AND ONLY NET PROFIT RATE CAN BE APPLIED ON U NACCOUNTED SALES/ RECEIPTS. THE SAID DECISION OF THE I.T.A.T. AHMEDABAD HAS ALSO BEEN UPHELD BY THE HIGH COURT OF GUJARAT AND T HE DECISION OF THE HIGH COURT IS CITED AT (2000) 158 CTR (GUJ) 374 . FURTHERMORE, THE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. GURUBACHHAN SINGH J. JUNEJA (2008) 302 ITR (63) (GU J) HAS HELD THAT IN ABSENCE OF ANY MATERIAL ON RECORD TO SHOW T HAT THERE WAS ANY UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE WHI CH WAS REFLECTED BY THE ALLEGED UNACCOUNTED SALES, THE FIN DING OF THE TRIBUNAL THAT ONLY THE GP ON THE SAID AMOUNT CAN BE BROUGHT TO TAX DOES NOT CALL FOR ANY INTERFERENCE. MOREOVER, IN THE CASE OF R.K. CORPORATION, THE AHME DABAD BENCH OF THE 1TAT IN ITA NO. 4940/1996 HAS HELD THAT THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION FOR THE ENTIRE ON-MONE Y AND ONLY THE PROFIT EARNED IN RELATION TO THESE RECEIPTS AS PER THE PROFIT RATE DECLARED IN THE BOOKS OF ACCOUNTS SHOULD BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. PR ESIDENT INDUSTRIES (2002) 258 ITR 654 (GUJ) HAS HELD THAT T HE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE ENTIRE UNDISCLOSE D SALES COULD NOT BE ADDED AS INCOME OF THE ASSESSEE BUT THE ADDITION COULD BE MADE ONLY TO THE EXTENT OF ESTIMATED PROFITS EMBEDD ED IN SALES FOR WHICH THE NET PROFIT RATE WAS ADOPTED AND HENCE NO REFERRABLE QUESTION OF LAW ARISES. ; SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT VS. BALCHAND AJIT KUMAR (2003) 263 ITR 610 (MP) AND THE MUMBAI BENCH OF TRIBUNAL IN TH E CASE OF ITO VS. SAI KRUPA CONSTRUCTION (2007) 13 SOT 459 (M UMBAI). IN VIEW OF THE FACTS OF THE CASE AND RESPECTFULLY F OLLOWING THE LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT AND TRIB UNAL, I AM OF THE CONSIDERED VIEW THAT EVEN IN THE PRESENT CASE, WHERE THERE ARE INCOMPLETE EVIDENCES OF BOTH UNACCOUNTED INCOME (ON- MONEY) AND UNACCOUNTED EXPENDITURE INCURRED THEREFR OM, THE A.O. IS NOT JUSTIFIED IN MAKING ADDITION FOR THE EN TIRE UNACCOUNTED RECEIPTS I.E. ON-MONEY IN RESPECT OF 3 FLATS OF 'PL ATINUM ITA NO.3187/AHD/2011 AND 5 OTHERS 11 APARTMENT' SOLD DURING THE YEAR UNDER CONSIDERATION AND THEREFORE, I HOLD THAT THE INCOME IN THIS REGARD NE EDS TO BE COMPUTED BY APPLYING A COMPARABLE RATE OF NET PROFI T ON THE ON- MONEY RECEIVED BY THE APPELLANT ON 3 FLATS SOLD DUR ING THE YEAR UNDER CONSIDERATION. NOW AS REGARDS THE SECOND ISSUE OF APPLICABILITY OF SECTION 69C TO THE FACTS OF THE PRESENT CASE, I AM OF THE O PINION THAT SECTION 69C CAN BE INVOKED ONLY WHEN THE APPELLANT HAS INCURRED ANY EXPENDITURE FOR WHICH HE HAS NO EXPLANATION REG ARDING ITS SOURCE OR THE EXPLANATION OFFERED BY THE APPELLANT IS NOT SATISFACTORY IN THE OPINION OF THE AO. HOWEVER, IN THE PRESENT CASE, THE IMPOUNDED MATERIAL CONTAINS THE DETAIL OF UNACCOUNTED SALES RECEIPTS I.E. ON-MONEY AND UNACCOUNTED EXPEND ITURE INCURRED OUT OF THE SAID ON-MONEY AND THUS, THE SOU RCE OF UNACCOUNTED EXPENDITURE GETS SATISFACTORILY EXPLAIN ED AS BEING THE ON-MONEY AND HENCE, SECTION 69C IS NOT AT ALL A PPLICABLE. FURTHER, THE PROVISO TO SECTION 69C STATES THAT WHE N ANY UNEXPLAINED EXPENDITURE IS DEEMED TO BE THE INCOME OF THE ASSESSEE, THEN THE SAID UNEXPLAINED EXPENDITURE SHA LL NOT BE ALLOWED AS A DEDUCTION AND IN THE PRESENT CASE, UNE XPLAINED EXPENDITURE HAS NOT BEEN DEEMED TO BE THE INCOME OF THE APPELLANT BY THE A.O. AND HENCE, THE PROVISO TO SEC TION 69C IS ALSO NOT AT ALL APPLICABLE IN THE PRESENT CASE. NOW AS REGARDS THE THIRD ISSUE AS TO WHAT WOULD BE THE REASONABLE RATE OF PROFIT WHICH NEEDS TO BE APPLIED TO DETERMINE THE INCOME OF THE APPELLANT IN RESPECT OF ON-MONEY RECEIVED ON FLATS SOLD DURING THE YEAR UNDER CONSIDERATION, I A M OF THE OPINION THAT COMPARABLE RATES ADOPTED IN SIMILAR CASES DURI NG THE SAME PERIOD NEEDS TO BE ADOPTED AND APPLIED IN THE PRESE NT CASE ALSO. DURING THE COURSE OF APPELLATE PROCEEDINGS, IT HAS BEEN SUBMITTED BY THE APPELLANT THAT IT IS BEING ASSESSE D IN CENTRAL RANGE, SURAT, WHEREIN IN THE CASES OF OTHER SIMILAR BUSINESS AND ASSESSES ENGAGED IN SAME LINE OF BUSINESS AND WHERE INCOMPLETE EVIDENCES OF UNACCOUNTED ON-MONEY AND UNACCOUNTED EXPENDITURE HAVE BEEN FOUND DURING THE COURSE OF SE ARCH / SURVEY, THE TOTAL INCOME IN SUCH CASES HAS BEEN COM PUTED BY ADOPTING THE REASONABLE PROFIT RATE AT 15%. ONE SUCH CASE AS RELIED UPON BY THE APPELLANT IS M/ S. ASHIRWAD CORPORATION, WHEREIN FOR THE SAME YEAR I.E . A.Y. 2008- 09, THE D.C.I.T., CENTRAL CIRCLE-1, SURAT, VIDE HIS ORDER U/S. 143(3) DATED 31-12-2009 HAS COMPUTED THE INCOME BY APPLYING REASONABLE PROFIT RATE @ 16%, WHICH WAS SUBSEQUENTL Y REDUCED TO ITA NO.3187/AHD/2011 AND 5 OTHERS 12 15% BY MY PREDECESSOR I.E. C.I.T.(A)-II, AHMEDABAD, VIDE HIS ORDER DATED 22-3-2010 IN APPEAL NO. C.I.T.(A)-II/CC .1/140/2009- 10. THE STAND TAKEN BY THE A.O. IN THE ASSESSMENT ORDE R IN THE CASE M/S. ASHIRWAD CORPORATION PASSED U/S. 143(3) O N 31-12- 2009, IS REPRODUCED HEREIN BELOW. PARA 7.14 PAGE NO. 31 OF THE ASSESSMENT ORDER OF ASHIRWAD CORPORATION ' VARIOUS COURTS HAVE RULED THAT WHAT NEEDS TO BE ASS ESSED AFTER REJECTION OF BOOKS OF A/C IS THE TRUE INCOME OF THE ASSESSEE WHICH SHOULD BE THE NET PROFIT FROM THESE UNACCOUNTED TRA NSACTIONS. THE ASSESSEE HAS ALSO CITED SEVERAL DECISIONS IN TH IS REGARD. THE ASSESSEE HAS ALSO CONTENDED THAT IF THE INCOMPL ETE EVIDENCES FOUND ARE CONSIDERED AS EVIDENCES OF 'ON-MONEY' FOR THE ENTIRE PROJECT THEN SIMILAR INCOMPLETE EVIDENCES WHICH HAV E BEEN FOUND IN RESPECT OF UNACCOUNTED EXPENDITURE SHOULD ALSO BE E XTRAPOLATED TO FIND OUT SUCH EXPENDITURE FOR THE ENTIRE PROJECT. THE ASSESSEE HAS ALSO CONTENDED THAT THE DEPARTMENT HAS NOT FOUND ANY ASSETS IN EXCESS OF THE DISCLOSU RE MADE BY THE ASSESSEE. THE ASSESSEE HAS FIRST OF ALL DENIED HAVING RECEIV ED ANY 'ON- MONEY' AND INCURRED ANY UNACCOUNTED EXPENDITURE. HO WEVER, WHILE MAKING ALTERNATIVE CONTENTION IT HAS ALSO CONTENDED THAT IT HAS NOT MAINTAINED ANY RECORD OF UNACCOUNTED TRANSACTIONS A ND THEREFORE IT IS NOT IN A POSITION TO GIVE THE DETAILS OF THE UNA CCOUNTED EXPENSES. IT HAS ALSO CITED SEVERAL DECISIONS OF I TAT IN RES PECT OF ESTIMATION OF NET PROFIT ON THE 'ON-MONEY' RECEIVED . SOME OF THEM HAVE ALSO BEEN CONFIRMED BY THE JURISDICTIONAL HIGH COURT. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN NEITHER THE COMPLETE RECORDS HAVE BEEN MAINTAINED BY THE AS SESSEE NOR THE SEIZED DOCUMENTS ENABLE PROPER ESTIMATION OF THE UN ACCOUNTED EXPENSES OF THE ASSESSEE, THE ESTIMATION OF NET PRO FIT BASED ON SIMILAR CASES APPEARS TO BE BEST METHOD OF DETERMIN ING THE TRUE INCOME OF THE ASSESSEE OUT OF RECEIPT OF 'ON-MONEY' . FOLLOWING NET PROFIT RATES ON 'ON-MONEY' HAVE BEEN UPHELD IN THE FOLLOWING JUDICIAL DECISIONS:- NO. DETAILS OF THE CASE % OF NET PROFIT REMARKS ITA NO.3187/AHD/2011 AND 5 OTHERS 13 1. NARESH B. AGARWAL (HUF) & MAGATULAL HARLALKA (HUF) -GUJARAT HIGH COURT ORDER DATED 3/5/00 15% CONSTRUCTION OF COMMERCIAL COMPLEX. REFERENCE BY THE DEPARTMENT AGAINST THE ORDER OF ITAT REJECTED. 2. CIT V. ABHISHEK CORPORATION (2000) 158 CTR (GUJ) 374 - GUJARAT HIGH COURT REJECTED THE REFERENCE OF THE DEPARTMENT AND UPHELD THE DECISION OF IT AT, AHMEDABAD. 1.31% NP % IS NOT COMPARABLE AS THE ASSESSEE WAS DOING SUPERVISION OF CONSTRUCTION WORK. 3. M/S. R. K. CORPORATION V. ACIT (ITA NO. 4940/AHD/1996) - ORDER DATED 8/2/99 20% THE DISCLOSURE MADE BY THE ASSESSEE WORKED OUT TO 20% OF 'ON MONEY' RECEIPT. NO. DETAILS OF THE CASE % OF NET PROFIT REMARKS 4. KISHORE MOHAN TELWALA V. ACIT (1999) 63 TTJ (AHD.) 651 - ORDER DATED 2/9/98 8% RESIDENTIAL PROJECT TAKEN OVER FROM NARESH AGARWAL WHO TOOK UP THE WORK OF ORGANIZING AND . BUILDING ACTIVITY OF HARE KRISHNA APT. 5. DCIT V. S.P. ENTERPRISES (IT[SS]A NO. 58/AHD/2003) -ORDER DATED 24/1 1/05 17% THE ASSESSEE 'S DECLARATION WORKED OUT EQUAL TO 17% OF 'ON MONEY' RECEIVED. IT CAN BE SEEN THAT ONLY CASES AT S.NO. 1, 3 AND 5 CAN BE TAKEN AS COMPARABLE CASES AS OTHER CASES ARE NOT SIMILAR TO THE CASE OF THE ASSESSEE AS IS CLEAR FROM THE 'REMARKS' COLUMN. BESIDES, IN THE FOLLOWING CASES OF BUILDERS ASSESSE D IN THE CENTRAL RANGE, FOLLOWING NET PROFIT RATES HAVE BEEN ESTIMAT ED:- A/O. DETAILS OF THE CASE % OF NET PROFIT REMARKS ITA NO.3187/AHD/2011 AND 5 OTHERS 14 1. S.P. ENTERPRISE (BLOCK PERIOD 1990-91 TO 1999- 2000) 20% COMMERCIAL PROJECT. IT AT SUSTAINED THE NET PROFIT @ 15% 2. SHRINATH CORPORATION (BLOCK PERIOD 1990-91 TO 1999-2000) 20% 15% 20% FOR COMMERCIAL PROJECT AND 15% ON RESIDENTIAL PROJECT. 3. JAGDAMBA CORPORATION (BLOCK PERIOD 1990-91 TO 1999-2000) 15% RESIDENTIAL PROJECT. 3. DEW CORPORATION (BLOCK PERIOD 1990-91 TO 1999- 2000) 15% RESIDENTIAL PROJECT. 4. MANHAR KAKADIA (AOP) A.Y.2004-05 12.5% RESIDENTIAL PROJECT. 5. MANHAR KAKADIA (AOP) A.Y.2005-06 12.5% RESIDENTIAL PROJECT. 6. NAVIN ASWANI AY, 2005- 06 14.28% RESIDENTIAL PROJECT. REDUCED TO 12% BY CIT(A)-II, AHMEDABAD 8. JAIPRAKASH . ASWANI A.Y.2005-06 14.28% RESIDENTIAL PROJECT. BRIEF DISCUSSION ON THE ABOVE MENTIONED CASES IS BE ING GIVEN IN THE FOLLOWING PARAS :- 1. IN THE CASE OF S.P. ENTERPRISE (BLOCK PERIOD 19 90-91 TO 1999-2000) ASSESSED IN THE SAME CHARGE I.E. IN CENTRAL CIRCLE- 1, SURAT, ESTIMATED THE NET PROFIT AT 20% FOR COMMERCIAL PROJECT, THE I TAT AHMEDABAD DISMISSED THE REVENUE APPEAL AND SUSTAIN THE NET PR OFIT AT 15%. 2. IN THE CASE OF SHRINATH CORPORATION (BLOCK PERI OD 1990-91 TO 1999-2000), ASSESSED IN THE SAME CHARGE I.E. IN CEN TRAL CIRCLE-1, SURAT ESTIMATE NET PROFIT AT 20% FOR COMMERCIAL PRO JECT AND 15% ON THE RESIDENTIAL PROJECT. 3. IN THE CASE OF M/S. JAGDAMBA CORPORATION (BLOCK PER IOD 1990-91 TO 1999-2000), ASSESSED IN THE SAME CHARGE I.E. IN CENTRAL CIRCLE-1, SURAT, ESTIMATE NET PROFIT AT 15% ON RESIDENTIAL PR OJECT. 4. IN THE CASE OF M/S. DEVI CORPORATION (BLOCK PER IOD 1990-91 TO 1999-2000), ASSESSED IN THE SAME CHARGE I.E. IN CEN TRAL CIRCLE-1, SURAT, ESTIMATE NET PROFIT AT 15% ON RESIDENTIAL PR OJECT. ITA NO.3187/AHD/2011 AND 5 OTHERS 15 5. IN THE EARLIER SEARCH ASSESSMENT OF MANHAR KAKA DIA GROUP ONLY, THE ASSESSMENT ORDER WERE FINALIZED U/S. 153A R.W.S . 143(3) AND ESTIMATED THE NET PROFIT AT 12.5%. 6. IN THE CASE OF SEARCH ASSESSMENTS OF ASWANI GR OUP, THE ASSESSMENT ORDERS WERE FINALIZED U/S. 153A ESTIMATI NG THE PROFIT @ 14.28%. THE SAME WAS REDUCED TO 12% BY CIT(A). IT CAN BE SEEN FROM THE ABOVE TABLE THAT 15% IS THE NORMAL RATE ADOPTED IN THE CASE OF RESIDENTIAL PROJECTS WHILE 2 0% IS THE RATE ADOPTED IN THE CASE OF COMMERCIAL PERIOD, SPECIALLY DURING THE PERIOD FROM APRIL 2003 TO MARCH 2008, THERE ,HAS BEEN BOOM IN PROPERTY MARKET BECAUSE OF FOLLOWING FACTORS - .. .. .. .. HENCE, IT CAN BE SAFETY ASSUMED THAT PROFIT PERCENT AGE WOULD BE DEFINITELY MORE DURING THIS PERIOD FROM APRIL 2003 TO MARCH 2008. HENCE, DURING F.Y. 2007-08, ADOPTION OF A HIGHER NE T PROFIT % FIGURE WOULD BE JUSTIFIED. KEEPING IN VIEW ENTIRE F ACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE T O ADOPT NET PROFIT PERCENTAGE FIGURE OF 16% OF THE TOTAL 'ON-MO NEY RECEIVED. THIS FIGURE WILL BE IN ADDITION TO THE PROFIT DISCL OSED BY THE ASSESSEE IN ITS BOOKS OF A/C WHICH DEPICT THE PICTU RE OF THE ACCOUNTS WITHOUT CONSIDERING THE UNACCOUNTED RECEIP TS AND UNACCOUNTED EXPENSES.' FROM THE ABOVE FINDINGS IN THE CASE OF M/S. ASHIRWA D CORPORATION, IT IS SEEN THAT THE A.O. IN THE SAME C ENTRAL RANGE, SURAT ON SIMILAR FACTS HAS APPLIED NET PROFIT RATE OF 16% ON THE ON-MONEY RECEIPTS, BY RESPECTFULLY FOLLOWING THE DE CISIONS OF THE JURISDICTIONAL HIGH COURT AND TRIBUNAL, FOR THE SAM E ASSESSMENT YEAR AND THAT TOO ON MUCH HIGHER ON-MONEY RECEIPTS OF RS. 116.62 CRORES, WHICH IS A COMPARABLE CASE WHICH CAN BE APPLIED TO THE PRESENT CASE. THEREFORE, I HOLD THAT FOLLOWING THE DECISIONS IN V ARIOUS SIMILAR CASES BY THE HON'BLE ITAT AHMEDABAD AS MENT IONED ABOVE AND PRECEDENCE AS SET BY THE A.OS. IN THE SAME CENT RAL RANGE, SURAT, IN OTHER SIMILAR CASES, FOR THE SAME ASSESSM ENT YEAR WHICH WERE PASSED WITH THE APPROVAL OF THE RANGE HEAD OF CENTRAL RANGE SURAT, THE INCOME OF THE APPELLANT IN RESPECT OF ON -MONEY RECEIVED ON SALE OF 3 RESIDENTIAL FLATS OF 'PLATINU M APARTMENT' ALSO NEEDS TO BE COMPUTED BY ADOPTING A NET PROFIT RATE @ 16%. ITA NO.3187/AHD/2011 AND 5 OTHERS 16 FURTHER, I ALSO AGREE WITH THE APPELLANT THAT THE A CTUAL PRICE IN RESPECT OF FLAT NO. 901 AS NOTED DOWN ON THE IMP OUNDED PAPER ANNEXURE-BI-19 PAGE NO. 10 IS RS. 2,06,71,500/- AND NOT RS. 2,67,71,500/- SINCE, THERE IS A CROSS-MARK AGAINST THE DIFFERENTIAL AMOUNT OF RS.61 LACS MENTIONED IN RESPECT OF A TERR ACE INDICATING CANCELLATION AND THE FINAL TOTAL THEREAFTER HAS AGA IN BEEN WORKED OUT TO RS.2,06,71,500/- AND NOT RS. 2,67,71,500/-. THE APPELLANT HAS FURTHER SUBMITTED THAT THE PLANS WERE REVISED A ND HENCE, FLAT NO. 901 HAS NO ATTACHED TERRACE AS ON DATE AFTER CO NSTRUCTION. ACCORDINGLY, I HEREBY HOLD THAT THE ACTUAL PRICE OF FLAT NO. 901 SHOULD BE TAKEN AT RS. 2,06,71,500/- AS BEING THE C ORRECT PRICE INDICATED IN THE IMPOUNDED LOOSE PAPER AND NOT AT R S. 2,67,71,500/-. IN CONCLUSION, I HOLD THAT THE A.O. WAS NOT JUSTIFI ED IN MAKING ADDITION OF THE ENTIRE ON-MONEY OF RS. 5,94,14,500/ - WHICH INFACT IS RS. 5,33,14,500/- IN RESPECT OF SALE OF 3 FLATS OF 'PLATINUM APARTMENT' AND ACCORDINGLY, I HEREBY DIRECT THE A.O . TO COMPUTE THE INCOME IN RESPECT OF SALE OF 3 FLATS OF 'PLATIN UM APARTMENT' BY ADOPTING A NET PROFIT RATE @ 16%, IN THE FOLLOWING MANNER. SR. NO. FLAT NO. PRICE AS PER SALE DEED ACTUAL PRICE AS PER SEIZED MATERIAL DIFFERENCE (ON-MONEY) ACTUAL AS PER LOOSE PAPER NET PROFIT @ 16% 1 801 33,00,000 2,06,71,500 1,73,71,500 27,79,440 2 901 33,00,000- .2,06,71,50 0 1,73,71,500 27,79,440 3 701 TOTAL 33,00,000 2,18,71,500 1,85,71,500 29,71,440 99,00,000 6,32,14,500 5,33,14,500 85,30,320 ACCORDINGLY, THE ADDITION OF RS. 5,08,84,180/- OUT OF TOTAL ADDITION OF RS.5,94,14,500/- AS MADE BY THE A.O. IS DELETED AND BALANCE ADDITION OF RS.85,30,320/- IS SUSTAINED. 9. THE LD.CIT-DR RELIED UPON ORDER OF THE AO. HE C ONTENDED THAT SHRI MURARILAL AGARWAL ADMITTED RS.15 CRORES AS NET PROFIT, MEANING THEREBY, EXPENDITURES WERE ALSO DEBITED BY THE ASSE SSEE IN THE PROFIT & ITA NO.3187/AHD/2011 AND 5 OTHERS 17 LOSS WHICH WAS DISCLOSED TO THE DEPARTMENT. THE ON -MONEY RECEIPTS WERE UNACCOUNTED PROFIT WHICH IS NET OF EXPENDITURE . THEREFORE, THE LD.CIT(A) HAS ERRED IN CONSIDERING PROFIT ON ALLEGE D ON-MONEY IN- BETWEEN AT THE RATE OF 16%. 10. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSES SEE RELIED UPON THE ORDERS OF THE LD.CIT(A). HE CONTENDED THAT THE ASS ESSEE HAS ALREADY HONOURED STATEMENT OF SHRI MURARILAL AGARWAL. GROU P HAS OFFERED RS.15 CRORES FOR TAXATION IN DIFFERENT ASSESSMENT YEARS. ADDITIONS SUSTAINED BY THE LD.CIT(A) ARE NOT BEING DISPUTED. HE FURTHE R POINTED OUT THAT DURING THE COURSE OF SURVEY, IT EMERGES OUT THAT TH E DEPARTMENT HAS CALCULATED ALLEGED ON-MONEY RECEIPTS TO THE EXTENT OF RS.36 CRORES, BUT THEY ACCEPTED NET DECLARATION OF RS.15 CRORES, MEAN ING THEREBY, THE DEPARTMENT IS HAVING INFORMATION ABOUT ELEMENT OF P ROFIT IN THESE RECEIPTS. THE LD.CIT(A) HAS TAKEN COGNIZANCE OF TH ESE SPECIFIC FACT. HE FURTHER PLACED ON RECORD COPY OF ASSESSMENT ORDER P ASSED IN THE CASE OF EVERGREEN INDUSTRIES P.LTD. AND SUBMITTED THAT THIS ASSESSMENT ORDER WAS PASSED BY DCIT, CENT.CIR.1, SURAT WHEREIN PROFI T RATE ON-MONEY WAS APPLIED. SIMILARLY, HE MADE REFERENCE TO THE FI NDING OF THE LD.CIT(A) RECORDED IN PAGE NO.16 AND 17 OF THE IMPUGNED ORDER . THE LD.CIT(A) MADE REFERENCE TO A LARGE NUMBER OF SIMILARLY SITUA TED ASSESSEES IN WHOSE CASES NET PROFIT IN BETWEEN 12.5% TO 20% HAS BEEN WORKED OUT BY THE AO IN THE ON-MONEY RECEIPTS. HE FURTHER PLA CED ON RECORD COPY OF THE TRIBUNALS ORDER IN THE CASE OF M/S.JAY BUIL DERS VS. ACIT, 1821- 1822/AHD/.2003 (AHD TRIB) WHEREIN THE TRIBUNAL HAS UPHELD ASSESSMENT OF INCOME AT THE RATE OF 15% EMBEDDED IN THE ON-MON EY RECEIPTS. THE FINDING OF THE TRIBUNAL IN PARA-9 HAS BEEN REFERRED WHICH READS AS UNDER: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW IT WILL NOT BE PROPER TO TAX ENTIRE SUM OF 'ON MONEY' RECEIVED IN CASH AS IN COME OF THE ASSESSEE. IT IS APPARENT THAT A PARALLEL ACCOUNT OF RECEIPT AND ITA NO.3187/AHD/2011 AND 5 OTHERS 18 EXPENDITURE IS MAINTAINED WHICH IS NOT RECORDED IN THE BOOKS I.E. BOTH THE PAYMENTS AND RECEIPTS ARE IN CASH. IT IS N OT CORRECT TO PRESUME THAT ASSESSEE HAS NOT INCURRED ANY EXPENDIT URE OUT OF CASH AMOUNT. FOR GETTING CLEARANCE FOR THE PROJECT ASSESSEE HAS TO INCUR EXPENSES IN ENTERTAINMENT. IT HAS TO INCUR CASH FOR GETTING VACANT POSSESSION OF THE PREMISES. CASH IS ALSO INCURRED FOR MAKING LABOUR PAYMENTS AND PAYMENTS FOR PURCHAS ING RAW MATERIALS. HOWEVER, ASSESSEE SAVES SUBSTANTIAL MONE Y AS TAXES ETC. WHICH ARE NOT PAID ON SUCH 'ON MONEY'. MOST OF THE EXPENDITURE ARE ACCOUNTED FOR AND IS COVERED IN THE NET PROFIT APPLIED ON CHEQUE AMOUNT. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE AO TO APPLY A NET PROFIT RATE OF 15% ON THE CASH AMOUNT AND TREAT THE RESULTANT FIGURE AS INCOME OF THE ASSESSEE RATHER TAXING ENTI RE SUM OF 'ON MONEY'. THE AO WILL CALCULATE THE RESULTANT ADDITIO N FOR BOTH THE YEARS. THUS BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. 11. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. IN THE FIRST GROUND OF APPEAL, GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.5,08,84,180/- OUT OF TOTAL ADDITION OF RS.5,94,1 4,500/- MADE BY THE AO. A PERUSAL OF THE LD.CIT(A)S ORDER WOULD INDIC ATE THAT BASICALLY, THE LD.CIT(A) HAS ANALYSED THESE DETAILS WITH ALL POSSI BLE ANGLES. THE LD.CIT(A) HAS OBSERVED THAT PERUSAL OF ANNEXURE B1- 11 AND ANNEXURE B1-19 FOUND DURING THE COURSE OF SURVEY, TOTAL UNAC COUNTED ON-MONEY RECEIPTS WAS OF RS.36.52 CRORES RECEIVED FROM SALE OF FLATS. THESE DETAILS ALSO CONTAINED UNACCOUNTED EXPENDITURE OF R S.20.7 CRORES. SURVEY TEAM WAS WELL AWARE ABOUT THIS ASPECT AND TH AT IS WHY NET INCOME OF RS.15 CRORES WAS ACCEPTED AS A DECLARATIO N ON BEHALF OF THE ASSESSEE. HAD THAT NOT BEEN IN THE KNOWLEDGE OF TH E DEPARTMENT, THEN THE SURVEY TEAM WOULD HAVE EMPHASIZED THE ASSESSEE TO DECLARE RS.36.53 CRORES. APART FROM THE ABOVE FACTS, WE FU RTHER FIND THAT CONSISTENTLY APPROACH OF THE REVENUE WAS TO WORK OU T PROFIT ELEMENT EMBEDDED IN THOSE ON-MONEY RECEIPTS. THE TRIBUNAL HAS ALSO CONSIDERED THIS ASPECT IN THE CASE OF JAY BUILDERS (SUPRA). THUS, THERE WAS NO CLINCHING EVIDENCE WITH THE DEPARTMENT TO DE MONSTRATE THAT ITA NO.3187/AHD/2011 AND 5 OTHERS 19 GROSS-RECEIPTS OF ON-MONEY CALCULATED OUT OF IMPOUN DED MATERIAL FOUND DURING THE COURSE OF SURVEY IS DESERVED TO BE CONSI DERED AS NET PROFIT. AS FAR AS STATEMENT OF SHRI MURARILAL AGARWAL, THAT STATEMENT HAS DULY BEEN CONSIDERED BY THE LD.FIRST APPELLATE AUTHORITY . REPLY TO QUESTION NO.7 HAS BEEN SPECIFICALLY DEALT BY THE LD.CIT(A) O N PAGES 8, 9 AND 10 OF THE IMPUGNED ORDER. IN OTHER WORDS, IT IS A CUM ULATIVE ANALYSIS OF ALL THE FACTS AT THE END OF THE FIRST APPELLATE AUTHORI TY TO DEMONSTRATE THAT ALLEGED CALCULATION OF GROSS ON-MONEY AT THE END OF AO WAS NOT THE INCOME OF THE ASSESSEE. IT CONTAINED CERTAIN EXPEN DITURE ALSO WHICH ARE NOTED ON THOSE VERY PAGES AND CREDIT OF THOSE EXPEN DITURE ARE ALSO TO BE CONSIDERED. TAKING INTO CONSIDERATION THESE ASP ECTS, BOOKS WERE NOT CONSIDERED AS RELIABLE AND PROFIT ELEMENT EMBEDDED IN THE RECEIPTS HAS BEEN ADDED. THIS PROFIT HAS BEEN CALCULATED AT THE RATE OF 16%. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A), AND FIRST GROUND OF APPEAL IS REJECTED. 12. IN GROUND NO.2, GRIEVANCE OF THE REVENUE IS THA T THE LD.CIT(A) HAS ERRED IN EXCLUDING A SUM OF RS.61 LAKHS FROM TH E TOTAL ON-MONEY CALCULATED BY THE AO. WITH REGARD TO THIS GROUND, WE FIND DISCUSSION ON PAGE NO.18 OF THE IMPUGNED ORDER. IT IS PERTINENT TO OBSERVE THAT WITH REGARD TO FLAT NO.901 A SUM OF RS.2,67,71,500/- WAS MENTIONED IN ANNEXURE B1-19 PAGE NO.10. THE AO TOOK THE FIGURE OF RS.2,67,71,500/-. THE LD.CIT(A) HAS OBSERVED THAT THE AO HAS COMMITTED A MISTAKE BY NOT TAKING CORRECT PRICE IND ICATED IN THE IMPOUNDED LOOSE PAPER. THE DEPARTMENT WAS UNABLE T O CONTROVERT THIS FINDING OF THE FACT RECORDED BY THE LD.CIT(A). THE GROUND OF APPEAL WAS TAKEN MERELY FOR THE SAKE OF RAISING DISPUTE, WHICH HAS NOT BEEN DEMONSTRATED BEFORE US, AS TO HOW THE LD.CIT(A) HAS COMMITTED THE MISTAKE FROM TAKING CORRECT FIGURE IN THE IMPUGNED LOOSE PAPER. WE DO NOT FIND ANY MERIT IN GROUND NO.2 ALSO. ITA NO.3187/AHD/2011 AND 5 OTHERS 20 13. AS FAR AS GROUND NO.3 AND 6 ARE CONCERNED, THEY ARE PERIPHERAL ISSUES RELATED TO GROUND NO.1. IN THESE GROUNDS, G RIEVANCE OF THE REVENUE IS THAT THE LD.CIT(A) HAS ERRED IN APPLYING NET PROFIT RATE AT 16%. IT SHOULD HAVE BEEN APPLIED AT THE RATE OF 42 %. WE FIND THAT THIS RATE HAS BEEN APPLIED BY THE LD.CIT(A) AFTER TAKING INTO CONSIDERATION COMPARABLE CASES OF EIGHT ASSESSEES. SPECIFIC EXAM PLE HAS BEEN GIVEN ON PAGE NO.16 OF THE IMPUGNED ORDER. THUS, IN OUR OPINION, THE LD.CIT(A) HAS EXERCISED HIS DISCRETION AFTER TAKING INTO CONSIDERATION VARIOUS OTHER FACTORS. 14. AS FAR AS GROUND NO.4 IS CONCERNED, ONCE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED AFTER REJECTION OF THE BOOKS OF ACCOUNTS, THERE CANNOT BE OTHER DISALLOWANCE SPECIFICALLY UNDER SEC TION 40A(2), 40A(3) ETC. WE DO NOT FIND ANY ERROR IN THE OBSERVATION O F THE LD.CIT(A) IN THIS REGARD. THEREFORE, THIS GROUND OF APPEAL IS ALSO R EJECTED. 15. OTHER GROUNDS ARE GENERAL IN NATURE WHICH DO NO T CALL FOR ANY SPECIFIC ADJUDICATION. THEY ARE DISMISSED AS SUCH. 16. NOW WE TAKE UP ITA NO.290/AHD/2013 FOR ASSTT. Y EAR 2006-07. 17. IN GROUND NO.1 AND 2, REVENUE HAS PLEADED THAT THE LD.CIT(A) HAS ADMITTED VARIOUS ADDITIONAL EVIDENCE/SUBMISSIONS WI THOUT GIVING ANY OPPORTUNITY TO THE AO, WHICH IS IN CONTRAVENTION TO RULE 46A OF THE INCOME TAX RULES, 1962. 18. A PERUSAL OF THE RECORD WOULD INDICATE THAT THE LD.CIT(A) HAS NOT ADMITTED ANY ADDITIONAL EVIDENCE. THE ASSESSEE HAS POINTED OUT HOW WRONG CALCULATIONS HAVE BEEN MADE BY THE AO FROM IM POUNDED MATERIAL INVENTORISED AS ANNEXURE-B1-19. DURING THE COURSE OF HEARING, THE LD.DR WAS UNABLE TO CONTROVERT WHICH DOCUMENT HAS B EEN ENTERTAINED BY THE LD.CIT(A) A FRESH EVIDENCE. THE ASSESSEE HA S FILED SUBMISSIONS NO-DOUBT. BUT THE SUBMISSIONS ARE BASED ON THE IMP OUNDED MATERIAL ITA NO.3187/AHD/2011 AND 5 OTHERS 21 CONSIDERED BY THE AO ALSO. THUS, THERE WAS A CONST RUCTION OR INTERPRETATION OF THE IMPOUNDED MATERIAL AND NOT AN YTHING-ELSE, THEREFORE, WE DO NOT FIND ANY MERIT IN THESE GROUND S OF APPEAL. THESE ARE REJECTED. 19. GROUND NO.5 IS GENERAL GROUNDS OF APPEAL, WHERE IN THE REVENUE HAS PLEADED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THAT OF THE AO WOULD BE RESTORED. SINCE IT IS ONE OF THE PERIP HERAL ARGUMENTS RELATING TO OTHER GROUNDS, WE DO NOT DEEM IT NECESS ARY TO RECORD ANY SPECIFIC FINDING ON THIS GROUND. IT IS REJECTED. 20. IN GROUND NO.4 REVENUE HAS PLEADED THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT INCOME HAS TO B E RECOGNIZED ON ACCRUAL BASIS I.E. AT TIME OF SELLING OF FLATS AS T HE ASSESSEE HAS BEEN FOLLOWING THIS METHOD OF ACCOUNTANCY CONTINUOUSLY. 21. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD. THE LD.CIT(A) WHILE ADJUDICATI NG THE ISSUE HAS FORMULATED THREE QUESTIONS WHICH READS AS UNDER: (I) THE FIRST ISSUE IS THAT WHETHER THE ENTIRE ON- MONEY RECEIPTS CAN BE TREATED AS THE INCOME OF THE APPELLANT, WHEN INCOMPLETE DETAILS OF BOTH UNACCOUNTED RECEIPTS AND EXPENDITUR E HAVE BEEN FOUND AND IMPOUNDED. (II) THE SECOND ISSUE IS WHETHER THE ACCOUNT ING METHOD FOLLOWED BY THE ASSESSEE REGULARLY AND CONSISTENTLY FROM YEAR TO YEAR SHOULD BE THE BASIS OR IT HAS TO BE THE YEAR O F RECEIPT, FOR THE TAXING INCOME EMBEDDED IN THE UNACCOUNTED ON-MONEY RECEIPTS. (III) THE THIRD ISSUE IS THE APPLICABILITY OF SECTI ON 68/69/69C TO THE FACTS OF THE PRESENT CASE MORE PARTICULARLY IF THE INVESTMENT MADE BY THE APPELLANT ARE FINALLY IN EXCESS OF THE INCOME ASSESSED OR ACCEPTED COVERING THE ENTIRE PROJECT PE RIOD UP TO THE DATE OF SURVEY FOR AY 2006-07/2007-08/2008-09/2 009- 10/2010-11. ITA NO.3187/AHD/2011 AND 5 OTHERS 22 22. SO FAR AS QUESTION NO.1 IS CONCERNED, SIMILAR Q UESTION WAS FORMULATED IN THE ASSTT.YEAR 2008-09 ALSO, AND WE H AVE EXTRACTED FINDING OF THE LD.CIT(A) WHICH IS VERBATIM SAME AS WELL AS DETAILS OF UNACCOUNTED EXPENDITURE WERE FOUND. AS FAR AS ISSU E WHETHER INCOME HAS TO BE RECOGNISED ON ACCRUAL BASIS, THE CASE OF THE ASSESSEE WAS THAT IT HAS BEEN FOLLOWING MERCANTILE SYSTEM OF ACCOUNTA NCY, WHERE INCOME FROM CONSTRUCTION ACTIVITY WOULD BE OFFERED AFTER C OMPLETION OF PROJECTS. IN OTHER WORDS, WHEN THE ASSESSEE HANDS OVER POSSES SIONS OF THE FLATS OR GET SALE DEED REGISTERED, ONLY THEN INCOME EMBED DED IN ON-MONEY RECEIPTS WOULD BE TAXED IN THE HANDS OF THE ASSESSE E. THE LD.CIT(A) HAS ACCEPTED THIS STAND OF THE ASSESSEE ON THE GROU ND THAT IN THE ASSTT.YEAR 2008-09, THE AO HIMSELF HAS ACCEPTED THI S. IN THE ASSTT.YEAR 2008-09 THE AO HAS NOT REJECTED BOOKS OF ACCOUNTS. HE COMPUTED PROFIT FROM UNACCOUNTED BUSINESS ON THE MONEY ATTRI BUTABLE TO THE SALE OF FLATS DURING THE YEAR. THUS, IN OTHER WORDS, AC CORDING TO THE LD.CIT(A), THE INCOME OF THE ASSESSEE WOULD BE ASSE SSED ON THE METHOD OF ACCOUNTANCY FOLLOWED BY THE ASSESSEE AND THE REV ENUE WOULD BE RECOGINISED IN THE YEAR IN WHICH THE SALES HAVE BEE N MADE BY THE ASSESSEE. THE AO IN THIS ASSESSMENT YEAR ALSO DID NOT DISTURB THE METHOD OF ACCOUNTANCY, BUT FOR THE UNACCOUNTED INCO ME HE HAS ADOPTED A DIFFERENT METHOD I.E. HE ASSESSED IT ON R ECEIPT BASIS. AFTER TAKING INTO CONSIDERATION FINDING OF THE LD.CIT(A), WE DO NOT FIND ANY ERROR BECAUSE THE ASSESSEE ITSELF HAS OFFERED AN IN COME OF RS.15 CRORES IN DIFFERENT YEARS AND RECOGNIZED THIS INCOME ON SA LE OF FLATS. IN THIS YEAR, THE PROJECT WAS NOT COMPLETED. IT WAS UNDER CONSTRUCTION, THEREFORE, IT CANNOT BE SAID THAT THE INCOME HAS AC CRUED TO THE ASSESSEE. IN A GIVEN CASE, BOOKING OF FLATS MAY BE CANCELED, ADVANCE TAKEN BY THE ASSESSEE INCLUDING ON-MONEY COULD BE R ETURNED, THEREFORE, THE LD.CIT(A) HAS TOOK A VIEW IN RIGHT PERSPECTIVE. WE DO NOT FIND ANY ERROR IN THE FINDING OF THE LD.CIT(A) ON THIS ISSUE . GROUND NO.4 IS REJECTED. ITA NO.3187/AHD/2011 AND 5 OTHERS 23 23. IN GROUND NO.3, THE ASSESSEE HAS PLEADED THAT T HE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS.88,29,000/- WHICH INCLUDED INVESTMENT OF RS.51,80,000/- ADDED UNDER SECTIONS 69/69C AND A SUM OF RS.36,49,000/- ADDED UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. BEFORE RECORDING ANY FINDING ON THIS ISSUE, IN ORDE R TO APPRECIATE THE FACTS, WE WOULD LIKE TO REPRODUCE THE DISCUSSION MA DE BY THE LD.CIT(A) WITH REGARD TO THE FACTS IN THIS ASSESSMENT YEAR. IT READ AS UNDER: HOWEVER BEFORE CORNING TO THE CONCLUSION IT HAS TO BE ENSURED THAT THE ASSESSEE HAD DISCLOSED THE RELEVANT INCOME EMBEDDED IN THE ON MONEY IN THE YEAR OF SALE. THE ASSESSEE HAD SUBMITTED THE FOLLOWING DETAILS IN THIS REGARD ALONG WITH THE RELEVANT DOCUMENTS AND COPY OF ASSESSMENT / CIT(A) ORDER PER TAINING TO AY 2007-08/2008-09/2009-10 AND THE RELEVANT ANNUAL AUDITED ACCOUNTS PERTAINING TO AY 2010-11. FLAT NO/PROJECT RELEVANT PAGE NO OF BM9 AMOUNT DATE OF DOCUMENT YEAR IN WHICH OFFERED AS PART OF SALES A-L/ 201 SOLITTAIRE 1 21,00,000 14/06/2006 AY 07-08 A-2/902 SOLITTAIRE 2B 17,29,000 25/09/2009 AY 10-11 A-2/1002 SOLITTAIRE 3B 50,00,000 21/07/2008 AY 09- 10 88,29,000 IN THE CASE OF APPELLANT ITSELF IN AY 2008-09 THE A SSESSING OFFICER HAS ADDED THE ON-MONEY TO THE TOTAL INCOME ON SALE OF FLATS IN THE RELEVANT ACCOUNTING YEAR ONLY. THE OTH ER ON-MONEY COLLECTED WAS NOT BROUGHT TO TAX ON RECEIPT BASIS I N ACCORDANCE WITH THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSES SEE. CONSIDERING THE LEGAL ASPECTS OF TAXATION, THE SUBM ISSIONS MADE BY THE APPELLANT AND THE DETAILS OF INCOME OFFERED WITH REGARD TO THE ON MONEY RECEIPTS OF THE YEAR UNDER CONSIDERATI ON AND THE DECISION AND FINDINGS GIVEN IN AY 2008-09 BY THE AO AS WELL AS THE CIT(A) AND ALSO DECISION AND FINDINGS GIVEN IN THE CIT(A) ORDER OF AY 2007-08 AND 2009-10, I AM OF THE VIEW T HAT THE ON- MONEY THOUGH RECEIVED IN A PARTICULAR YEAR WILL PAR TAKE THE ITA NO.3187/AHD/2011 AND 5 OTHERS 24 CHARACTER OF THE INCOME IN THE YEAR OF ACCRUAL AS P ER THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT. III) NOW AS REGARDS THE THIRD ISSUE OF THE APPLICAB ILITY OF SECTION 68/69/69C TO THE FACTS OF THE PRESENT CASE, I AM OF THE OPINION THAT SECTION 69C CAN BE INVOKED ONLY WHEN THE APPEL LANT HAS INCURRED ANY EXPENDITURE FOR WHICH HE HAS NO EXPLAN ATION REGARDING ITS SOURCE OR THE EXPLANATION OFFERED BY THE APPELLANT IS NOT SATISFACTORY IN THE OPINION OF THE A.O. HOWEVER , IN THE PRESENT CASE, THE IMPOUNDED MATERIAL CONTAINS THE DETAIL OF UNACCOUNTED SALES RECEIPTS I.E. ON-MONEY AND UNACCOUNTED EXPEND ITURE INCURRED OUT OF THE SAID ON-MONEY AND THUS, THE SOU RCE OF UNACCOUNTED EXPENDITURE GETS SATISFACTORILY EXPLAIN ED AS BEING THE ON-MONEY AND HENCE, SECTION 69C IS NOT AT ALL A PPLICABLE. A FURTHER, THE PROVISO TO SECTION 69C STATES THAT W HEN ANY UNEXPLAINED EXPENDITURE IS DEEMED TO BE THE INCOME OF THE ASSESSEE, THEN THE SAID UNEXPLAINED EXPENDITURE SHA LL NOT BE ALLOWED AS A DEDUCTION AND IN THE PRESENT CASE THE UNEXPLAINED EXPENDITURE HAS NOT BEEN DEEMED TO BE THE INCOME OF THE APPELLANT BY THE A.O. AND HENCE, THE PROVISO TO SEC TION 69C IS ALSO NOT AT ALL APPLICABLE IN THE PRESENT CASE. SAM E WAY SECTION 69 STATES THAT WHERE THE ASSESSEE MADE INVESTMENTS WHI CH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINE D BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EX PLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR T HE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE A.O. SATISFACTORY, THE VALUE OF SUCH INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. IN THE PRESENT CASE ALL THE INVESTMENTS MADE ARE OUT OF THE ON-MON EY RECEIPTS AND THEREFORE THE NATURE AND THE SOURCE OF THE INVESTMENTS ARE SATISFACTORILY EXPLAINED. THE LD AS SESSING OFFICER HAS ALSO GIVEN FINDING THAT THE TOTAL INVESTMENTS/E XPENDITURE (RS 66,80,OOO/-) MADE ARE NOT IN EXCESS OF THE ON M ONEY RECEIPTS OF RS 88,29,000/- AVAILABLE WITH THE ASSES SEE. (TABLE 1 AND CHART UNDER PARA 9.3 OF THE ASSESSMENT ORDER). FURTHER IT HAS BEEN SUBMITTED THAT EVEN WHEN THE INCOME ASSESSED/CONFIRMED BY CIT(A) IS MATCHED WITH THE FI NAL INVESTMENTS ON HAND AS ON THE DATE OF SURVEY, THEN ALSO THE INVESTMENT IS WELL WITHIN THE INCOME ASSESSED/CONFI RMED BY THE CIT(A). THE DETAILS SUBMITTED BY THE APPELLANT ARE AS UNDER: INVESTMENT ON HAND AS ON THE DATE OF SURVEY PAGE NO PARTICULARS AMOUNT(RS) AMOUNT(RS) ITA NO.3187/AHD/2011 AND 5 OTHERS 25 42 TRIMURTI APARTMENT 14,58,532 UB LAND 43 JAYANTI BHAI BROKER 1,10,000 46 USHABEN S NO 528 90,45,000 46B HEMAL BHAI UB LAND BROKER 16,20,000 47 SNO 519 32,50,000 47 S NO 521 25,00,000 47B S NO 517 DHARMIN BHAI (INCLUDING RS 45,00,000/- PAID DURING THE YEAR UNDER CONSIDERATION) 1,77,20,000 3,42,45,000 43B MAVJI BHAI 22,25,000 61 SACHIN LAND 41,69,750 65 PAPPU BHAI 22,00,000 65 PAPPU BHAI RAILWAY 17,77,500 63 ANUJ EMB 5,00,000 61B SANJAY YARN 5,00,000 60B AYUSH BHAI 4,76,000 57B SNEHLATA GK 5,00,000 48B VISHWAKARMA SANGHI 2,00,000 49 SANJAY AGARWAL 1,00,000 TOTAL 4,83,51,682 ITA NO.3187/AHD/2011 AND 5 OTHERS 26 INCOME ASSESSED / CONFIRMED BY CIT( A) /RETURNED A YEAR INCOME CONFIRMED ASSESSED / BY CIT(A)/ AS PER ROI 2007-08 39,72,502 2008-09 85,30,320 2009-10 3,59,17,152 2010-11 3,00,00,000 TOTAL 7,84,19,974 CONSIDERING THE FACTUAL STATUS AND THE INTERPRETATI ON OF SEC 69/69C AND THE AVAILABLE FUNDS IN THE FORM OF ON MO NEY DURING THE YEAR AS WELL AS THE OVERALL INCOME VIS A VIS INVESTMENT, THERE IS NO JUSTIFICATION IN AGAIN CONS IDERING THE AMOUNT OF RS.51,80,000/- AS UNEXPLAINED INVESTMENT. HENCE THE ADDITION IS DELETED. FURTHER THE ASSESSING OFFICER HAS CONSIDERED AN AMO UNT OF RS 36,49,000/- (88,29,000 - 51,80,000) AS ADDITION U/S 68 BEING UNEXPLAINED CASH CREDIT FOR WHICH NO DETAILS HAS BEEN PROVIDED BY THE ASSESSEE. IN THIS REGARD THE APPELLANT HAS SUBMITTED AS UNDER : '(A) AT THE OUTSET SEC 68 IS APPLICABLE ONLY WHE N THERE IS A CREDIT IN THE BOOKS OF ACCOUNT AND THE ASSESSEE I S NOT IN APPOSITION TO EXPLAIN THE SAME. THE FOLLOWING DECIS IONS IN THIS REGARD ARE RELEVANT: CIT VS TAJ BOREWELLS 210 CTR (MAD) 543 INCOMECASH CREDITGENUINENESSASSESSEE FIRM DID NO T MAINTAIN ANY BOOKS OF ACCOUNTIT HAS SHOWN THE CAPI TAL CONTRIBUTIONS OF THE PARTNERS IN THE P&L A/C AND BA LANCE SHEETP&L A/C AND BALANCE SHEET ARE NOT BOOKS OF AC COUNT AS CONTEMPLATED UNDER THE PROVISIONS OF THE ACT ITA NO.3187/AHD/2011 AND 5 OTHERS 27 CIT VS BHAICHAND H GANDHI 141 ITR 67 (BOM) CASH CREDITSAPPEARING IN BANK PASS BOOK NOT IN ASSESSEE'S BOOKS CASH CREDIT FOUND ONLY IN BANK P ASS BOOK AND NOT IN THE CASH BOOK MAINTAINED BY ASSESSE E WOULD NOT BE INCLUDIBLE UNDER S. 68 AS PASS BOOK SU PPLIED BY BANK TO ASSESSEE IS NOT A BOOK MAINTAINED BY ASS ESSEE. (B) THE LD ASSESSING OFFICER HIMSELF HAS CATEGO RISES THE RECEIPT AS INCOME IN THE PARA REPRODUCED ABOVE. SUC H PORTION HAS BEEN UNDERLINED BY THE ASSESSEE FOR YOU R HONOUR'S EASY REFERENCE. THE SAME IS CORRECT ALSO B ECAUSE THE NATURE OF SUCH RECEIPTS FROM THE IMPOUNDED MATE RIAL IS VERY CLEAR AS ON MONEY RECEIPTS ON ACCOUNT OF VARIO US FLAT HOLDERS. THE DETAILS OF FLAT HOLDERS ARE ALSO AVAILABLE IN THE IMPOUNDED MATERIAL.' 5. I HAVE GONE THROUGH THE SUBMISSION AND FIND THA T ONCE THE NATURE OF THE RECEIPT HAS BEEN CONSIDERED TO BE ON MONEY AND THE INCOME EMBEDDED THEREIN HAS BEEN ALREADY CONSID ERED AS PART OF THE INCOME IN THE YEAR OF SALE OF SPECIFIC FAIT, THERE IS NO SUBSTANCE IN THE ADDITION THEREOF U/S 68. SEC 68 IS SQUARELY APPLICABLE ONLY WHEN THE ITEM OF CREDIT IS NOT EXPL AINED. IN THE INSTANT CASE THE CREDITS HAS BEEN CONSIDERED TO BE ON MONEY RECEIPTS WITH REFERENCE TO SPECIFIC FLAT AS PER DET AILS AVAILABLE IN THE IMPOUNDED MATERIAL BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS NOT CHA NGED THE COLOUR OF THE RECEIPTS TO BE DIFFERENT THAN ON MONE Y RECEIPT. I THEREFORE DELETE THE ADDITION OF RS 36,49,000/- M ADE U/S 68 OF THE ACT AS THE INCOME EMBEDDED IN THE TON-MONEY' IS ALREADY ASSESSED/OFFERED FROM AY 2007-08 TO 2010-11 AS SUMM ARIZED IN TABLE OF INCOME ASSESSED ON PAGE NO.24 OF THIS ORDE R. THE ADDITION OF RS.36,49,000 IS ACCORDINGLY DELETED. 24. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAD SOLD FLATS IN PROJECT SOLITA IRE. IT HAS RECEIVED ON-MONEY OF RS.88,29,000/-. OUT OF THIS ON-MONEY, ASSESSEE HAS INCURRED EXPENDITURE AS WELL AS INVESTMENT. SUCH A MOUNTS HAVE BEEN CALCULATED AT RS.51,80,000/-. HE ONLY OBSERVED THA T IF INVESTMENT WAS FOUND TO BE MORE THAN THE ON-MONEY RECEIPTS, THEN I NVESTMENT WILL BE ITA NO.3187/AHD/2011 AND 5 OTHERS 28 ADDED. THE LD.AO TREATED ON-MONEY RECEIPT OF RS.88 ,29,000/- AS NET INCOME AND OBSERVED THAT OUT OF THESE NET INCOME, R S.81,80,000/- WAS INVESTED IN PROFIT MAKING ASSETS. 25. ON APPEAL, THE LD.CIT(A) HAS OBSERVED THAT RECE IPTS ARE THERE. SIMILARLY, EXPENDITURE ARE THERE. ONCE THE RECEIPT S ARE ACCOUNTED, EXPENDITURE CANNOT BE ADDED. THE SOURCE OF EXPENDI TURE IS ON-MONEY RECEIPTS. OUT OF THE ON-MONEY RECEIPTS, THE INCOME WOULD BE ASSESSED IN THE YEAR WHEN THE FLATS WOULD BE SOLD. SIMILARL Y, THE LD.CIT(A) HAS OBSERVED THAT RS.36.49 LAKHS CANNOT BE CONSIDERED A S CASH CREDIT BECAUSE THE ASSESSEE HAS ALREADY EXPLAINED THAT THE SE ARE ON-MONEY RECEIPTS. THE ASSESSEE HAS ALSO IDENTIFIED FLAT NU MBERS AGAINST WHICH SUCH AMOUNTS HAVE BEEN RECEIVED. DETAILS HAVE BEEN NOTICED BY THE LD.CIT(A) ON PAGE NO.21 EXTRACTED (SUPRA). THEREFO RE, CONSIDERING WELL REASONED FINDING OF THE LD.CIT(A) EXTRACTED (SUPRA) , WE DO NOT FIND ANY ERROR IN IT. 26. NOW WE TAKE APPEAL FOR THE ASSTT.YEAR 2007-08 A ND 2009-10 TOGETHER I.E ITA NO.1660/AHD/2002 AND 1659/AHD/2012 . 27. A PERUSAL OF GROUNDS OF APPEAL WOULD INDICT THA T ALMOST VERBATIM GROUNDS HAVE BEEN TAKEN EXCEPT VARIATION IN THE AMO UNTS. 28. IN GROUND NO.1 AND IN BOTH THE YEARS, REVENUE H AS PLEADED THAT THE LD.CIT(A) HAS ENTERTAINED ADDITIONAL EVIDENCE I N VIOLATION OF RULE, 46A OF THE INCOME TAX RUES. 29. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVS, W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE REC ORD WOULD SHOW THAT THE AO HAS WORKED OUT THE AMOUNT OF INVESTMENT PLUS EXPENDITURE OF RS.9,05,40,625/- IN ASSTT.YEAR 2007-08. SIMILARLY, HE WORKED OUT THESE UNEXPLAINED INVESTMENT PLUS EXPENDITURE AT RS.9,45, 15,643/- IN THE ASSTT.YEAR 2009-10. THE ASSESSEE HAS POINTED OUT T O THE LD.CIT(A) THAT ITA NO.3187/AHD/2011 AND 5 OTHERS 29 INVESTMENT AND EXPENDITURE IN THE ASSTT.YEAR 2007-0 8 WAS OF RS.5,70,14,625/-. IN THE ASSTT.YEAR 2009-10, THE A O HAS WORKED OUT EXPENDITURE OF RS.9,45,15,643/-. THE LD.CIT(A) HAS HELD THAT CORRECT VALUE OF THE INVESTMENT PLUS EXPENDITURE WORKED OUT TO RS.3,92,89,163/- WHICH IS LESS THAN THE GROSS-RECEI PTS. THE GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT(A) HAS CALCULATED BOTH THESE AMOUNTS AFTER ENTERTAINING ADDITIONAL EVIDENCE WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 I.E. AO WAS NOT PROVIDED AN OPPORTUNITY OF HEARING ON THIS ISSUE. 30. WE HAVE PERUSED THE FINDING OF THE LD.CIT(A) FR OM PAGE NO.24 TO 29 AND PAGE NO.35 IN THE ASSTT.YEAR 2007-08 AS WELL AS AT PAGE NO.25 TO 29 IN THE ASSTT.YEAR 2009-10. A PERUSAL OF TH E FINDING WOULD INDICATE THAT THE LD.CIT(A) HAS NOT ENTERTAINED ANY ADDITIONAL EVIDENCE RATHER, RE-APPRECIATED THE SEIZED MATERIAL. THE AS SESSEE HAS PREPARED A CHART EXPLAINING ENTRIES IN THE SEIZED MATERIAL W HICH HAS BEEN CONSIDERED BY THE LD.CIT(A). 31. WE HAVE ALSO GONE THROUGH THE MATERIAL PLACED B EFORE THE LD.CIT(A). LET US TAKE FIRST ITEM CONSIDERED BY TH E AO IN THE ASSTT.YEAR 2007-08. ACCORDING TO THE ASSESSEE ON PAGE NO.48 O F THE IMPOUNDED DIARY B1-19 AN ENTRY OF RS.17,963/- WAS AVAILABLE W HICH HAS BEEN READ BY THE LD.AO AS 1,79,63,000/- ON RECEIPT SIDE. W E HAVE GONE THROUGH PHOTO-COPY OF THIS PAGE, WHICH IS AVAILABLE AT PAGE NO.189 OF THE PAPER BOOK FILED BY THE REVENUE. ENTRY IS 17963/00. A FTER VERIFYING THIS ENTRY WITH RELATED DETAILS, THE LD.CIT(A) HAS OBSER VED THAT IT IS TO BE READ AS 17,963/. AFTER PERUSAL OF THIS ENTRY, W E ARE OF THE VIEW THAT THE LD.CIT(A) HAS NOT ENTERTAINED ANY ADDITIONAL EV IDENCE, RATHER RE- APPRECIATED EXISTING MATERIAL AVAILABLE ON THE FILE OF THE AO. THUS, THERE IS NO FORCE IN BOTH THESE GROUNDS OF APPEAL. THEY ARE REJECTED. 32. GROUND NOS.7 TO 12 IN THE ASSTT.YEAR 2007-08 AN D GROUND NO.7 TO 11 IN THE ASSTT.YEAR 2009-10 ARE VERBATIM SAME. TH EY ARE ALTERNATIVE ITA NO.3187/AHD/2011 AND 5 OTHERS 30 PLEA TAKEN BY THE REVENUE. IN THESE GROUNDS, GRIEV ANCE OF THE REVENUE IS THAT IN CASE INCOME OF THE ASSESSEE EMBE DDED IN ON-MONEY RECEIPTS IS TO BE ESTIMATED, THEN THIS SHOULD BE ES TIMATED AT THE RATE OF 42% AND NOT AT THE RATE OF 16.25% AS DONE BY THE LD .CIT(A). 33. WE HAVE CONSIDERED IDENTICAL ISSUE IN THE ASSTT .YEAR 2008-09. WE FIND THAT THE LD.CIT(A) HAS ADOPTED RATES AFTER TAK ING INTO CONSIDERATION RELEVANT MATERIAL AND COMPARABLE CASES. THE LD.CIT (A) MADE REFERENCE TO EIGHT COMPARABLE CASES BEFORE ADOPTING PERCENTAG E OF 16% REQUIRED TO BE APPLIED ON ON-MONEY RECEIPTS. SIMILARLY, THE REAFTER, THE LD.CIT(A) MADE REFERENCE TO ORDER OF THE ITAT IN DIFFERENT CA SES. THUS, WE ARE OF THE VIEW THAT THE LD.CIT(A) HAS APPRECIATED THE FAC TS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE AND HAS APPLIED PRAGMATIC RATE OF PROFIT ON-MONEY RECEIPTS. WE DO NOT FIND ANY MERIT IN THESE GROUND S OF APPEAL. THEY ARE REJECTED. 34. GROUNDS NO.3 TO 6 IN BOTH YEARS ARE INTERCONNEC TED WITH EACH OTHER. THE GRIEVANCE OF THE REVENUE IN THESE GROUN DS IS THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ARRIVING AT THE FIGURE OF UNEXPLAINED INVESTMENT/ EXPENDITURE AT RS.5,70,14,6 25/-, RS.3,92,89,163/- AS AGAINST FIGURE OF RS.9,05,40,62 5/- AND RS.9,45,15,643/- IN THE ASSTT.YEAR 2007-08 AND 2009 -10 RESPECTIVELY. ACCORDING TO THE REVENUE, THE CORRECT FIGURE OF UNE XPLAINED INVESTMENT/ EXPENDITURE SHOULD BE ADDED AT FIGURE CALCULATED BY THE AO. WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE FINDING OF THE L D.CIT(A) ON THESE ISSUES IN BOTH THE YEARS. ASSTT.YEAR 2007-08 V) AS REGARDS THE FIFTH ISSUE REGARDING MISTAKES C LAIMED BE THE APPELLANT IN THE INVESTMENT CHART PREPARED BY THE A SSESSING OFFICER, THE APPELLANT HAD SUBMITTED A CHART DEPICTING THE MISTA KES AND WRONG CONSIDERATION OF ITEMS: ITA NO.3187/AHD/2011 AND 5 OTHERS 31 PARTICULARS AMOUNT (RS) AMOUNT(RS) TOTAL OF THE TABLE 9,05,40,625 LESS: FIGURES WRONGLY CONSIDERED AS 1,79,63,000/- AS AGAINST ACTUAL FIGURE OF RS 17,963/- ON RECEIPT SIDE PAGE NO 48 (PAGE NO 33 OF PB) 1,79,45,037 1,79,45,037 SUB TOTAL 7,25,95,588 LESS/ADD: MISTAKES APPARENT 47B DHARMIN BHAI- A LAND HAS BEEN PURCHASED FROM THIS PERSON FOR RS 1,77,20,000/- FOR WHICH 45,00,000/- + 28,50,000/- WAS PAID IN CASH REST OF THE PAYMENT WAS ADJUSTED AGAINST SALE OF FLAT IN SOLITAIRE APT RS 1,24,40,000/- . THERE IS DIFFERENCE IN CALCULATION OF THE AMOUNT BY THE AO. THE AMOUNT WORKS OUT TO RS 1,03,70,000/- WHEREAS THE AO HAS WORKED OUT RS 1,38,53,000/-. 34,83,000 49 BHUSHA BHAI- THIS IS LAND PURCHASED FOR RADHAPURAM VARELI. THIS IS EXPENDITURE OF THE PROJECT AND NOT AN INVESTMENT. THERE SEEMS TO BE A TOTAL MISTAKE OF RS 7,00,000/-. THE TOTAL WORKS OUT TO RS 2,44,98,625/- AS AGAINST RS 2,51,98,626/- CONSIDERED BY AO 7,00,000 ITA NO.3187/AHD/2011 AND 5 OTHERS 32 46 USHA BEN S NO 528. THIS IS A LAND PURCHASED FOR INVESTMENT. THE TOTAL AMOUNT PAID IS RS 79,45,000/- WHEREAS THE AO HAS CONSIDERED RS 77,75,000/- 1,70,000 44B CHINTAMINIJI- THE AMOUNT OF RS 5,00,000 HAS BEEN CONSIDERED TWICE ON THE SAME PAGE 5,00,000 45,13,000 SUB TOTAL 6,80,82,588 48B SANJAY AGARWAL- THIS IS REPAYMENT RECEIVED FROM THE PARTY ON A/C OF LOAN GIVEN IN 2004 AS IS EVIDENT FROM THE NOTING. THIS A RECEIPT CONSIDERED AS PAYMENT 6,80,000 48 JANAK MISTRY VAT CONSULTANT- THE RECEIPT ITEM OF RS 17,963/- CONSIDERED AS 1,79,63,000/- . BEING RECEIPT THIS IS TO BE REDUCED. 17,963 47B DHARMIN BHAI- IN THIS CASE PAYMENT IS ONLY MADE OF RS 73,50,000/- (45+28.50) REST OF THE AMOUNT OF RS 1,03,70,0007- WAS NOT PAID BUT ADJUSTED AGAINST SALE OF FLAT 1,03,70,000 1,10,67,963 BALANCE 5,70,14,625 NET PAYMENT OF INVESTMENT / EXPENDITURE 5,70,14,625 FROM THE ABOVE TABLE THE ID AR SUBMITTED THAT THE C ORRECT FIGURE OF INVESTMENT + EXPENDITURE, WORKS OUT TO RS 5,70,14,6 25/-. ITA NO.3187/AHD/2011 AND 5 OTHERS 33 THE ABOVE CHART IS PREPARED FROM THE ITEMS AND ENTR IES PICKED UP FROM THE IMPOUNDED MATERIAL ANNEXURE B1-19. EACH ITEM OF DIF FERENCE IS VERIFIED AND DISCUSSED WITH REFERENCE TO THE IMPOUNDED ANNEXURE AS UNDER: PAGE NO 48 (RS 1,79,63,000 + RS 4,00,000): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 1 ,79,63,000/- (RECEIPT SIDE RS 17,963.00 CONSIDERED AS 1,79,63,000/-) + PA YMENT SIDE - RS 1.00 (23/02/07) + RS 3.00 (17/03/07) = RS 1,83,63,000/- IN THE TABLE NO 3 ON PAGE NO 31-32 OF THE ASSESSMENT ORDER. THE APPELLAN T HAS CONTENDED THAT FOR THE ITEM CONSIDERED AS RS 1,79,63,000/- THE ACT UAL AMOUNT IS RS 17.963/- ONLY. IN THIS MATTER A CHALLAN OF RS 2,82, 037/- ON A/C OF VAT PAID ON 24/05/2007 HAS BEEN PRODUCED AND SUBMITTED AT PA GE NO 36 OF THE PB. THE AMOUNT OF RS 17,963 + 2,82,037/- MAKES UP A TOT AL OF RS 3,00,000/-. THE CONCERNED PERSON JANAK MISTRY IS A VAT CONSULTA NT OF THE APPELLANT COMPANY. HE HAD RETURNED A SUM OF RS 17,963/- TO TH E APPELLANT SO AS TO MAKE A A/C OF RS 3,00,000/- IN ROUND UP FIGURE. R S . 3 LACS WAS PAID TO SHRIJANAK MISTRY ON17-03-2007 WHICH IS ENTERED ON P AGE NUMBER 30 OF THE PAPER BOOK SUBMITTED BY THE APPELLANT. PAGE NUMBER 33 CONTAINS DETAILS OF PAYMENT MADE TO SHRI JANAK MISTRY ON VARIOUS DATES AND THE SAME PAGE CONTAINS DETAILS OF VAT PAYMENT OF RS. 2 82037 AND BALANCE AMOUNT OF RS. 17,963/-WHICH WAS CONSIDERED BY THE AO AS RS 179630 00/-. THIS IS FACTUAL MISTAKE COMMITTED BY THE LEARNED AO. THIS - WAS CON TENDED BEFORE THE ASSESSING OFFICER ALSO THAT THE AMOUNT IS NOT RS 1, 79,63,000/- BUT ACTUAL FIGURE OF RS 17,963/-. ON GOING THROUGH THE IMPOUND ED SERIAL NO 33 AND 48 AND THE CHALLAN ON PAGE 36 OF PB AS SUBMITTED BY TH E APPELLANT, IT IS FOUND THAT THE CONTENTION OF THE APPELLANT IS CORRECT AND THE AMOUNT IS RS 17,963/- ONLY IN REAL TERMS AND NOT TO BE DECIPHERED OR DECO DED AS RS 1,79,63,000/- BY SUFFIXING '000 TO THE FIGURE. PAGE NO 47B (RS 1,38,53,000/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 1,38,53,000/- (TO TAL OF PAYMENT SIDE IS RS 2,12,95,000/- OUT OF WHICH A SUM OF RS 73,50,000 /- HAS BEEN REDUCED AS THE SAME IS ALSO CONSIDERED JUST ABOVE THIS ENTRY O N THE SAME PAGE. THUS RESULTING INTO A BALANCE OF RS 1,39,45,000/-. FURTH ER A SUM OF RS 92,000/- WAS REDUCED TO ARRIVE AT RS 1,38,53,000/- AS CONSID ERED BY THE ASSESSING OFFICER. HOWEVER IT WAS SUBMITTED BY THE APPELLANT THAT A LAND HAD BEEN PURCHASED FROM THIS PERSON FOR RS 1,77,20,000/- FOR WHICH 45,00,000/- + 28,50,000/- WAS PAID IN CASH. REST OF THE PAYMENT W AS ADJUSTED AGAINST SALE OF FLAT IN SOLITAIRE APT AT RS 1,24,40,000/-. THUS THE DIFFERENTIAL AMOUNT WHICH IS REQUIRED TO BE CONSIDERED AS PAYMEN T IS RS 1,03,70,000/- (1,77,20,000 LESS 73,50,000). THEREFO RE THERE IS DIFFERENCE IN CALCULATION OF THE AMOUNT BY THE AO. THE AMOUNT WOR KS OUT TO RS 1,03,70,000/- WHEREAS THE AO HAS WORKED OUT RS 1,38 ,53,000/-. THUS A DIFFERENCE OF RS 34,83,000/- HAS BEEN WRONGLY CONSI DERED AS UNEXPLAINED INVESTMENT BY THE ASSESSING OFFICER. I HAVE GONE TH ROUGH THE IMPOUNDED ANNEXURE AND ON VERIFICATION FOUND THE FACTS STATED BY THE APPELLANT ARE FOUND TO BE CORRECT. ITA NO.3187/AHD/2011 AND 5 OTHERS 34 PAGE NO 49 (RS 2,51,98,625/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 2,51,98,625/-. TH E APPELLANT SUBMITTED THAT THIS WAS A LAND PURCHASED FOR RADHAPURAM VAREL I PROJECT OF THE APPELLANT. THIS WAS EXPENDITURE OF THE PROJECT AND NOT AN INVESTMENT AS HELD BY THE ASSESSING OFFICER. THE TOTAL PAYMENT DU RING THE YEAR WORKS OUT TO RS 2,44,98,625/- AS AGAINST RS 2,51,98,625/- CON SIDERED BY AO. THERE SEEMS TO BE A TOTAL MISTAKE OF RS 7,00,000/-. THE A MOUNTS FROM THE IMPOUNDED ANNEXURE WERE VERIFIED AND THE MISTAKE IN TOTAL WAS APPARENT. PAGE NO 46 (RS 77,75,000/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 77,75,000/-. HOWE VER THE TOTAL INVESTMENT IS RS 79,45,000/- AND AN AMOUNT OF RS 1,70,000/- OF 04/04/206 IS MISTAKENLY NOT CONSIDERED INTO TOTALS. THIS WILL IN CREASE THE INVESTMENT. THE AMOUNTS FROM THE IMPOUNDED ANNEXURE WAS VERIFIED AN D FOUND TO BE RS 79,45,000/-. PAGE NO 44B (RS 5.00.000/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 5,00,000/-. THE A PPELLANT SUBMITTED THAT THIS FIGURE OF RS 5,00,000 HAS BEEN CONSIDERED TWIC E ON THE SAME PAGE. THE AMOUNTS FROM THE IMPOUNDED ANNEXURE WAS VERIFIE D AND FOUND TO BE TAKEN TWICE. PAGE NO 48B (RS 6,80,000/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT RS 6,80,000/-. THE A PPELLANT SUBMITTED THAT THIS IS REPAYMENT RECEIVED FROM THE PARTY ON A/C OF LOAN GIVEN IN 2004 ON DIFFERENT DATES AS MENTIONED IN THE IMPOUNDED ANNEX URE. SUBSEQUENTLY THIS AMOUNT WAS RECEIVED BACK DURING THE YEAR UNDER CONS IDERATION AS IS EVIDENT FROM THE IMPOUNDED ANNEXURE. FURTHER THIS A MOUNT IS OF RECEIPT AND NOT OF PAYMENT. THE IMPOUNDED ANNEXURE WAS VERIFIED AND THE SUBMISSION OF THE APPELLANT WAS FOUND TO BE FACTUALLY CORRECT. THESE ITEMS HAVE BEEN WRONGLY TREATED AS PART OF IN VESTMENT INSTEAD OF RECEIPTS HENCE REQUIRED TO BE REDUCED FROM THE VALU E OF INVESTMENT TAKEN BY THE ASSESSING OFFICER. THE CORRECT VALUE OF INVE STMENT + EXPENDITURE WORKS OUT TO RS 5,70,14,625/-, WHICH IS LESS THAN T HE GROSS ON MONEY RECEIPTS, HENCE THE SOURCE OF INVESTMENT + EXPENDIT URE GETS EXPLAINED FROM THE ON MONEY COLLECTED RECORDED IN THE SAME IMPOUND ED ANNEXURE. THUS, THE APPELLANT WOULD GET A RELIEF OF RS.3,35,2 6,000/-ON ACCOUNT OF MISTAKES COMMITTED BY THE ASSESSING OFFICER, AS DIS CUSSED ABOVE IN PARA 5.5(V), IN WORKING OUT THE INVESTMENT + EXPENDITURE (905,40,625- 57014,625) ASSTT.YEAR 2009-10 FURTHER, THE PROVISO TO SECTION 69C STATES THAT WH EN ANY UNEXPLAINED EXPENDITURE IS DEEMED TO BE THE INCOME OF THE ASSES SEE, THEN THE SAID UNEXPLAINED EXPENDITURE SHALL NOT BE ALLOWED AS A D EDUCTION AND IN THE PRESENT CASE THE UNEXPLAINED EXPENDITURE HAS NOT BE EN DEEMED TO BE ITA NO.3187/AHD/2011 AND 5 OTHERS 35 THE INCOME OF THE APPELLANT BY THE A.O. AND HENCE, THE PROVISO TO SECTION 69C IS ALSO NOT AT ALL APPLICABLE IN THE PR ESENT CASE. SAME WAY SECTION 69 STATES THAT WHERE THE ASSESSEE MADE INVE STMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINT AINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANA TION OFFERED BY HIM IS NOT, IN THE OPINION OF THE A.O. SATISFACTORY, TH E VALUE OF SUCH INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE A SSESSEE FOR SUCH FINANCIAL YEAR. IN THE PRESENT CASE ALL THE INVESTM ENTS MADE ARE OUT OF THE ON-MONEY RECEIPTS AND THEREFORE THE NATURE AND THE SOURCE OF THE INVESTMENTS ARE SATISFACTORILY EXPLAINED. THE I NVESTMENTS/ EXPENDITURE MADE ARE NOT IN EXCESS OF THE RECEIPTS AVAILABLE WITH THE ASSESSEE WHICH IS CLEAR FROM THE FOLLOWING CHART SU BMITTED BY THE APPELLANT AND VERIFIED WITH THE RELEVANT IMPOUNDED ANNEXURE AS MENTIONED IN THE NEXT PARAGRAPH. RECEIPTS PAYMENTS PARTICULARS AMOUNT RS PARTICULARS AMOUNT RS LOAN RECEIPTS- OFFERED FORTAX 1,10,004 INVESTMENT & EXPENDITURE 3,92,89,163 SALE OF SHOPS & LAND 3,48,60,480 BALANCING FIGURE AVAILABLE FOR OTHER EXPENSES 9,90,84,307 SALE OF YARN 13,45,000 SUB TOTAL 4,72,09,480 ON MONEY FROM PROJECTS AS PER TABLE 2 OF A ORDER 9,11,63,930 TOTAL 13,83,73,470 TOTAL 13,83,73,470 V) AS REGARDS THE FIFTH ISSUE REGARDING MISTAKES CL AIMED BE THE APPELLANT IN THE INVESTMENT CHART PREPARED BY THE ASSESSING OFFICER, THE APPELLANT HAD SUBMITTED A CHART DEPICTING THE MISTAKES AND WRONG CONSIDERATION OF ITEMS: PARTICULARS AMOUNT (RS) AMOUNT(RS) ITA NO.3187/AHD/2011 AND 5 OTHERS 36 TOTAL OF THE TABLE NO 1 & 3 ON PAGE NO 7-11 AND 36-38 OF THE ASST ORDER 9,79,10,643 LESS: ITEM CONSIDERED TWICE 54B- GHANSHYAM BHAI THE TRANSACTION PERTAINS TO SALE OF GOLDEN PLAZA SHOPS WHICH ARE CONSIDERED AT PAGE NO 57B-GOLDEN PLAZA SHOP 1,14,12,000 1,14,12,000 SUB TOTAL 8,64,98,643 LESS: ITEMS OF RECEIPTS CONSIDERED BY AO AS INVESTMENT. 66 JAYESH BHAI -LOAN RECEIPTS PAGE 187 OF PB) 8,00,000 SUB TOTAL OF LOAN RECEIPTS 8,00,000 59 SANJAY BHAI YARNWALA - SALE OF YARN RECEIPTS (PAGE 102 OF PB) 13,45,000 51 MURLI JARIWALA - SALE OF VANTA PLOTTING (PAGE 98 OFPB) 10,50,000 SUB TOTAL 31,95,000 31,95,000 BALANCE 8,33,03,643 LESS: OTHER ITEMS OF RECEIPTS CONSIDERED AS PAYMENTS 43 GURUDUTT -LOAN RECEIVED {PAGE 100 40,00,000 OFPB) 45 GIRISH BHAI -LOAN RECEIVED (PAGE 105 OF PB) 11,00,000 45B PRAMOD BABU -LOAN RECEIVED (PAGE 104 OF PB) 1,04,000 ITA NO.3187/AHD/2011 AND 5 OTHERS 37 59B JAIN SAHEB -LOAN RECEIVED (PAGE 186 OF PB) 50,00,000 SUB TOTAL OF LOANS 1,02,04,000 57B GOLDEN PLAZA -SHOP SALE RECEIPTS (PAGE 103 OFPB) 1,14,12,000 58 G K SANIA LAND - SALE OF LAND RECEIPTS (PAGE 103 OFPB) 2,23,98,480 SUB TOTAL 4,40,14,480 4,40,14,480 NET PAYMENT OF INVESTMENT / EXPENDITURE 3,92,89,163 FROM THE ABOVE TABLE THE ID AR SUBMITTED THAT THE C ORRECT FIGURE OF INVESTMENT + EXPENDITURE, EXCLUDING RECEIPTS, SALE PROCEEDS OF SHOPS AND GK SANIYA LAND AND LOAN AMOUNT, WORKS OUT TO ONLY R S 3,92,89,163/-. THE ABOVE CHART IS PREPARED FROM THE ITEMS AND ENTR IES PICKED UP FROM THE IMPOUNDED MATERIAL ANNEXURE BI-19. EACH ITEM OF DIF FERENCE IS VERIFIED AND DISCUSSED WITH REFERENCE TO THE IMPOUNDED ANNEXURE AS UNDER: PAGE NO 57B & 54B (RS 1.14.12.000/-): THE ASSESSING OFFICER HAD CONSIDERED THIS ITEM OF ENTRY AS INVESTMENT AT TWO PLACES IN THE TABLE NO 3 ON PAGE NO 36-38 OF THE ASSESSMENT ORDER. THE APP ELLANT HAS CONTENDED THAT ITEMS ARE ONE AND THE SAME AND NEED TO BE CONS IDERED ONCE ONLY. ON GOING THROUGH THE IMPOUNDED SERIAL NO 57B AND 54B, IT IS FOUND THAT THE APPELLANT HAS SOLD 18 SHOPS IN GOLDEN PLAZA. THE AM OUNT MENTIONED MARKED PAGE SERIAL NO 57B IS 6 SHOPS/33.00 AND 12 S HOPS/ 80.81+0.31=81.12 AND THE TOTAL IS PUT AT 114.12. TH ESE VERY FIGURES ARE ALSO AVAILABLE ON MARKED SERIAL NO 54B. HENCE I FIN D THE CONTENTION OF THE APPELLANT AS CORRECT. THE ITEMS, WHICH ARE SHOWN AS RECEIPTS IN THE IMPOU NDED ANNEXURE, HAD BEEN CONSIDERED AS PAYMENTS IS THE CONTENTION O F THE APPELLANT WITH REGARD TO THE FOLLOWING ITEMS OF ENTRIES. A) GURUDUTTII (LOAN A/C) RS 40,00,000/- MARKED PAGE SERIAL NO 43 (PAGE NO 100 OF PB): THERE IS ONLY ONE ENTRY OF RS 40 00 OF 24/12/08 ON THE RECEIPT SIDE OF THE NOTE BOOK. THE CONTENTION O F THE APPELLANT IS THEREFORE CORRECT. ITA NO.3187/AHD/2011 AND 5 OTHERS 38 B) GIRISH BHAI RS 44,21,700/- MARKED AS PAGE SERIAL NO 45 (PAGE NO 105 OF PB): THERE IS ONE ENTRY ON RECEIPT SIDE OF 11 00 AN D THREE ENTRIES ON THE PAYMENT SIDE BEING 23 00 (27/08/08), 7 00 (13/09/08 ) AND 3 21700 (INT PAID UPTO 31.12.08). THE TOTAL OF RECEIPT SIDE + PAYMENT SITE WORKS OUT TO 44,21,700/-. THUS RS 11 LACS IS PART OF RECEIPT SID E. THE CONTENTION OF THE APPELLANT IS CORRECT. C) PRAMOD BABU RS 44,72,000/- MARKED SERIAL NO 45B (PAGE NO 104 OF PB): THERE ARE THREE ENTRIES ON RECEIPT SIDE OF 40 (5/08/08) + 64 (26/08/08) + 1 73 (INT 6.10.07 TO 23/6/08) MAKING A TOTAL OF R S 2.77.000/- AND 6 ENTRIES ON PAYMENT SIDE 20 00 (23/06/08) + 300 (25/06/08) + 10 00 (17/07/08) + 337 (22/08/08) + 358 (26/08/08) + 200(29/08/08) = M AKING A TOTAL OF RS 41.95.000/-. THE TOTAL OF RECEIPT SIDE + PAYMENT SI TE WORKS OUT TO 44,72,000/- WHICH THE ASSESSING OFFICER HAS CONSIDE RED AS INVESTMENT. WHERE AS THE AMOUNT OF RS 1,04,000/- IS RECEIPT AND RS 1,73,000/- IS CREDIT ON A/C OF INT PAID. THUS RS 1,04,000/- IS RE CEIPT BUT CONSIDERED AS PAYMENT. THE CONTENTION OF THE APPELLANT IS CORR ECT. D) JAIN SAHEB RS 50,00,000/- MARKED SERIAL NO 59B (PAGE NO 186 OF PB): THERE IS ONLY ONE ENTRY OF 50/00 (24/10/08) ON THE RECEIPT SIDE OF THE NOTE BOOK. THE AMOUNT IS RECEIPT AND THEREFORE THE CONTENTION OF THE APPELLANT IS CORRECT. E) SALE OF GOLDEN PLAZA SHOP RS 1,14,12.000/- MARKED SERIAL NO 57B (PAGE 1 . NO 103 OF PB). THE PAYMENT SIDE STATES 3300 (6 SHOP VALUE) AND 8112 (12 SHOP VALUE- 80/81 + 0/31 DONATION) MAKING A TOTAL OF 114/12. THIS AMOUNT REPRESENTS THE SALE VALUE OF SHOPS WHICH IS TO BE RECOVERED. OUT OF THIS AMOUNT A SUM OF RS 85/03230 IS MENTIONED ON TH E RFECEIPT SIDE STATING TOTAL RECEIVED UP TO 15/05/08. THUS THE AMO UNT OF RS 85,03,230/- IS REQUIRED TO BE CONSIDERED AS RECEIPTS AS AGAINST TH E CONTENTION OF THE APPELLANT THAT A SUM OF RS 1,14,12,000/- BE TREATED AS RECEIPT. F) G. K. SANIVA LAND MARKED AS SERIAL NO 58 (PAGE NO 103 OF PB) RS 2,23,98,480/- IS RECEIPT SIDE AS IS EVIDENT FROM TH E ENTRIES AS 164/06480 RECEIVED UP TO 15.5.08 + 50/00 19.5.08 = TOTAL 214/ 06480 + 3.92 (****) + 600 23/03/09 TOTALLING TO RS 2,23,98,480/-. THE ENT RIES ARE RECEIPT SIDE AND THE CONTENTION OF THE APPELLANT IS CORRECT. THESE ITEMS HAVE BEEN WRONGLY TREATED AS PART OF IN VESTMENT INSTEAD OF RECEIPTS HENCE REQUIRED TO BE REDUCED FROM THE VALU E OF INVESTMENT TAKEN BY THE ASSESSING OFFICER. THE CORRECT VALUE OF INVE STMENT + EXPENDITURE WORKS OUT TO RS 3,92,89,163/-, WHICH IS LESS THAN T HE GROSS ON MONEY RECEIPTS, HENCE THE SOURCE OF INVESTMENT + EXPENDIT URE GETS EXPLAINED FROM THE ON MONEY COLLECTED RECORDED IN THE SAME IMPOUND ED ANNEXURE. 35. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE SEIZED MATERIAL. THE STAND OF THE REVE NUE IS THAT UNEXPLAINED INVESTMENT PLUS EXPENDITURE SHOULD HAVE BEEN WORKED AT ITA NO.3187/AHD/2011 AND 5 OTHERS 39 RS.9,05,40,625/- IN THE ASSTT.YEAR 2007-08 AND RS.9 ,45,15,643/- IN THE ASSTT.YEAR 2009-10. HOWEVER, A PERUSAL OF THE CIT( A)S FINDING EXTRACTED (SUPRA) WOULD INDICATE THAT FIGURE ADOPTE D BY THE AO ARE NOT BASED ON CORRECT CONSTRUCTION OF SEIZED MATERIAL. THE ASSESSEE HAS POINTED OUT FACTUAL INACCURACY WHICH HAS BEEN CONSI DERED BY THE LD.CIT(A). WE HAVE ALSO NOTICED THIS ASPECT FROM TH E SEIZED MATERIAL. THE ASSESSEE HAS POINTED OUT THAT ENTRY OF RS.1,14, 12,000/- IN THE ASSTT.YEAR 2009-10 HAS BEEN MADE TWICE BY THE LD.AO IN TABLE NO.3 ON PAGE 36-38 OF THE ASSESSMENT ORDER. THIS ASPECT HA S BEEN APPRAISED FROM THE SEIZED MATERIAL ALSO. THE LD.CIT(A) HAS C ONSIDERED IT AN ERROR AT THE END OF THE AO. NO MATERIAL WAS BROUGHT TO O UR NOTICE POINTING OUT AS TO HOW THE LD.CIT(A) HAS ERRED IN CONSTRUING THIS FIGURE. THEREFORE, AFTER GOING THROUGH THE ORDER OF THE LD. CIT(A), WE DO NOT SEE ANY ERROR IN IT. 36. AS FAR ASSESSMENT OF INCOME FROM THE ON-MONEY R ECEIPT IS CONCERNED, WE HAVE ALREADY ADJUDICATED THIS ISSUE I N THE ASSTT.YEAR 2008-09, WHEREIN WE HAVE UPHELD THE FINDING OF THE LD.CIT(A) THAT GROSS-RECEIPT OF ON-MONEY CANNOT BE TAXED. ONLY IN COME PART EMBEDDED ON THIS RECEIPT IS TO BE TAXED. IN VIEW O F OUR FINDING IN THE ASSTT.YEAR 2008-09, WE DO NOT FIND ANY MERIT IN OTH ER ALTERNATIVE ARGUMENTS OF THE REVENUE. 37. IN THE ASSTT.YEAR 2009-10, REVENUE HAS TAKEN ON E MORE GROUND OF APPEAL, WHEREBY IT HAS CHALLENGED DELETION OF RS .5,37,50,000/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 68 OF T HE INCOME TAX ACT, 1961. THE ASSESSEE HAS RECEIVED A SHARE APPLICATIO N MONEY OF RS.5,37,50,000/- DURING THE F.Y.2007-08 THAT IS REL EVANT TO ASSTT.YEAR 2008-09. IT HAS ALLOTTED SHARES ON 1.4.2008. THE LD.AO TREATED THIS AMOUNT AS UNEXPLAINED CASH CREDIT AND MADE ADDITION . THE LD.CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT PERUSAL OF LEDGER ACCOUNT AS WELL AS BANK ACCOUNT STATEMENT WOULD INDICATE THAT THESE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE IN THE ACCOUNTING YEA R RELEVANT TO ITA NO.3187/AHD/2011 AND 5 OTHERS 40 A.Y.2008-09. THEY CANNOT BE TAXED IN THE ASSTT.YEA R 2009-10. THE LD.CIT(A) HAS REPRODUCED THE DETAILS EXHIBITING THE AMOUNTS RECEIVED BY THE ASSESSEE. 38. SINCE THIS AMOUNT HAS NOT BEEN RECEIVED IN THIS YEAR AND IS NOT TAXABLE IN THIS YEAR, THEREFORE, THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITION. WE DO NOT FIND ANY ERROR IN THIS ORDER O F THE LD.CIT(A). THIS GROUND OF APPEAL IS REJECTED. 39. THE ASSESSEE DID NOT PRESS ITS CROSS-OBJECTIONS , HENCE, THEY ARE REJECTED. 40. IN THE RESULT, APPEALS OF THE REVENUE AND THE C OS. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 17 TH MAY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 17/05/2017