ACIT, UDAIPUR V. M/s. Ankit Chirag Developers Pvt. Ltd., UDAIPUR

ITA 180/JODH/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6021 (ITAT-JODHPUR)
• Duration Of Justice: 5 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST SEPARATE S PASSED
• Assessee Lawyers: FOR; LD CITA UDAIPUR DATED
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Principle of natural justice; Documents seized; Capital Gains
• Section: 192; 254(2); 113; 13; 22; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR BENCH , JODHPUR BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA NO. 180/JODH/2016 & ITA NO. 295/JODH/2016 (ASSESSMENT YEARS 2011-12 & 2012-13) A.C.I.T., CENTRAL CIRCLE-1, UDAIPUR. VS. M/S ANKIT CHIRAG DEVELOPERS PVT. LTD., 54-55, RAJDEEP, NEW FATEHPURA, UDAIPUR. PAN NO. AAGCA 9897 C O R D E R PER: SANDEEP GOSAIN, J.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE A GAINST THE SEPARATE ORDERS PASSED BY THE LD. CIT(A)-2, UDAIPUR DATED 18/02/2016 AND 05/07/2016 FOR THE A.Y. 2011-12 AND 2012-13 RESPECT IVELY. 2. THE HEARING OF THE APPEAL WAS CONCLUDED THROUGH VIDEO CONFERENCE IN VIEW OF THE PREVAILING SITUATION OF COVID-19 PANDEM IC. 3. COMMON ISSUES ARE INVOLVED IN BOTH THESE APPEALS , THEREFORE, BOTH ARE CLUBBED AND HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, A COMMON ORDER IS BEING PASSED. 4. AS A LEAD CASE FOR THE DECIDING THE APPEALS, WE TAKE ITA NO. 180/JODH/2016 FOR THE A.Y. 2011-12. FROM PERUSAL OF THE RECORD, WE FOUND REVENUE BY SMT. SANCHITA KUMAR, CIT-DR ASSESSEE BY SHRI SHRAWAN GUPTA, ADV. DATE OF HEARING 11/08/2021 DATE OF PRONOUNCEMENT 15/09/2021 2 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS THAT IN THE FIRST ROUND OF APPEAL, THE COORDINATE B ENCH OF THIS TRIBUNAL HAD DECIDED THE APPEAL VIDE ITS ORDER DATED 17/12/2018 BY GIVING PART RELIEF TO THE ASSESSEE. AGAINST THE ORDER PASSED BY THE TRIBU NAL, THE ASSESSEE FILED A MISC. APPLICATION NO. 02/JODH/2020 MENTIONING THE F ACT THAT DURING THE APPELLATE PROCEEDINGS BEFORE THE BENCH, THE LD. AR HAVE FILED THE COMMON WRITTEN SUBMISSIONS FOR ASSESSMENT YEAR 2011-12 AND 2012-13 ON 04.05.2017 AND ALSO FILED ADDITIONAL WRITTEN SUBMIS SIONS DATED 02.11.2017 FILED ON 03.11.2017. CERTAIN SPECIFIC PLEA AND ARG UMENTS RELATED TO THE ISSUE UNDER CONSIDERATION HAVE BEEN SUBMITTED THROU GH THIS ADDITIONAL WRITTEN SUBMISSION FILED ON 03/11/2017. HOWEVER, O N PERUSAL OF THE ORDER OF THE ITAT DATED 17/12/2018, IT IS VERY CLEAR THAT THE ADDITIONAL WRITTEN SUBMISSION DATED 02.11.2017 WHICH WAS FILED ON 03/1 1/2017 HAVE NOT BEEN CONSIDERED AT ALL BY THE ITAT BEFORE PASSING THE A BOVE SAID ORDER DATED 17/12/2018. IN THE WRITTEN SUBMISSION, THE LD AR H AD SPECIFICALLY TAKEN THE PLEA AND ARGUMENTS THAT NO EVIDENCE RELATING TO REC EIPT OF EXCESS SALE CONSIDERATION IS AVAILABLE ON RECORD AND WITH THE A RGUMENTS HE HAD ALSO REFERRED VARIOUS RELATED JUDGMENTS. HE ALSO MENTION ED THAT THE LOOSE PAPERS RELIED UPON FOR ADDITION BY THE AO WAS NOT RELATED TO THE YEAR UNDER CONSIDERATION. IN FACT THE LOOSE PAPERS WERE FOUND DURING THE COURSE OF SEARCH ON 10.03.2010 AND SEIZED. THE RELATED YEAR O F SEARCH WAS ASSESSMENT YEAR 2010-11 AND ACCORDINGLY THE PERIOD UNDER CONSIDERATION IN THIS APPEAL WAS SUCCEEDING OR LATER YEAR AND THE LO OSE PAPERS WERE NOT AT ALL RELATED TO THE YEAR UNDER CONSIDERATION AND PRAYED THAT THE MISTAKE IS 3 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS APPARENT FROM RECORD AND RECTIFIABLE AS PER LAW UND ER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). ON THE P RAYER OF THE ASSESSEE AND AFTER PERUSAL OF THE ORDER PASSED BY THE COORDI NATE BENCH DATED 17/12/2018, THE ANOTHER COORDINATE BENCH OF THIS TR IBUNAL VIDE ITS ORDER DATED 04/02/2021 RECALLED THE ORDER DATED 17/12/201 8 FOR LIMITED PURPOSE. 5. IN THIS APPEAL, THE GROUND NO. 5 UNDER DISPUTE R AISED BY THE REVENUE READS AS UNDER: 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.36,51,800/- ON ACCOUNT OF UNDERSTATEMENT OF SALE CONSIDERATION OF THREE FLATS WITHOUT APPRECIATING THE FACTS THAT THE SAID ADDITION WAS R IGHTY MADE BY THE AO ON THE BASIS OF DETAILED ANALYSIS OF SEIZED PAPE RS BEING PAGE NO. 8 TO 10 OF ANNEXURE-AS, EXHIBIT-4 WHICH PROVED THAT THE FLATS HAVE BEEN SOLD TO THE BUYERS AT THE RATES AND AS PER PLA N MENTIONED ON THE AFORESAID THREE PAGES BUT IN THE BOOKS SALE CON SIDERATIONS WERE SHOWN LESS. 6. HAVING CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE MATERIAL PLACED ON RECORD. WE HAVE ALSO GONE THROUG H THE ORDERS PASSED BY THE REVENUE AUTHORITIES. FROM PERUSAL OF THE RECORD S AS WELL AS ADDITIONAL WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, WE OBSER VED THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE, C ONSTRUCTED MULTI STORIED COMPLEX AND RESIDENTIAL FLATS AT BHUWANA NEAR NEW R TO OFFICE, UDAIPUR. IN THIS CASE A SEARCH AND SEIZURE OPERATION WAS CARRIE D OUT U/S 132A OF THE ACT AT THE BUSINESS PREMISES OF ASSESSEE COMPANY ALONGW ITH RESIDENTIAL PREMISES OF DIRECTORS AND THEIR FAMILY MEMBERS ON 1 0/03/2010. DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, CERTAIN L OOSE PAPERS WERE FOUND AT THE OFFICE OF THE ASSESSEE COMPANY WHICH WERE SE IZED AS PAGE 8 TO 10 OF- 4 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ANNEXURE AS EXHIBIT-4 AND ALSO PLACED BEFORE US VID E PB 27-29. ON PAGE 8, 9 AND 10 WHERE SOME CALCULATION WAS FOUND. THESE SE IZED PAGES ARE AS UNDER: 5 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS 6 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS THE ASSESSING OFFICER HAS DISCUSSED ABOUT THESE SEI ZED PAGES IN PARA 8.1 TO 8.7 OF HIS ASSESSMENT ORDER AND THE AO HAS INFERRED THE CALCULATIONS ON THESE THREE PAGES. ON BEING CONFRONTED ABOUT THESE CALCULATION, THE AO HAS 7 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ALSO ASKED ABOUT THE SIZE OF FLATS, SELLING PRICE O F THE FLATS, BOOKING AMOUNT AND PAYMENT PLAN ETC. TO SH. ANKIT JAIN WHO HANDLES THE SALES AND MARKETING THE FLATS AND THE AO HAS RECORDED HIS STA TEMENTS U/S 131 ON DT. 21.04.2010 VIDE PAGE 17-18 OF THE ASSESSMENT ORDER. IN HIS STATEMENTS SH. ANKIT JAIN HAS STATED AS UNDER:. 8 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS DESPITE BY REFERRING THE RELEVANT PORTION OF STATE MENT OF SHRI ANKIT JAIN RECORDED AS ABOVE DURING THE POST SEARCH PROCEEDING S TO THE EFFECT THAT THE PRICE OF EACH FLAT IS RS. 26,65,600/-. THEN, HE HAS ESTIMATED THE TOTAL SALE CONSIDERATION OF THREE FLATS SOLD DURING THE YEAR U NDER CONSIDERATION AT RS. 79,96,800/- AT THE RATE OF RS. 26,65,600/- PER FLAT AS AGAINST RS.14,00,000/-, 15,45,000/- AND 14,00,000/- RESPECTIVELY SHOWN BY T HE ASSESSEE TOTALLING TO RS. 43,45,000/- AND ACCORDINGLY HE CONCLUDED THAT THERE WAS UNDER STATEMENT OF SALES TO THE EXTENT OF RS. 36,51,800/- (79,96,800/- LESS 43,45,000/-) IN THE YEAR UNDER CONSIDERATION. THUS, THE AO HAS MADE ADDITION OF RS. 36,51,800/- AS UNDERSTATEMENT OF SA LES. 7. IN FIRST APPEAL, BEFORE THE LD. CIT(A) THE ASSES SEE HAS FILED THE DETAILED WS AND LEGAL POSITION AND STATED BEFORE HI M THAT THE AO HAS MADE THE ADDITION OF RS. 36,51,800/- JUST ON THE BASIS O F ASSUMPTION AND PRESUMPTION WITHOUT BRINGING ON RECORD ANY POSITIVE , CORROBORATIVE EVIDENCE RELATED TO OR IN SUPPORT OF HIS IMAGINATION, ASSUMP TIONS AND PRESUMPTIONS IN SUPPORT OF HIS ARBITRARY CALCULATIONS AS WELL AS IN SUPPORT OF HIS INFERENCES REGARDING NOTING ON PAGE 8 TO 10 OF ANNEXURE AS- EX HIBIT -4 AS WELL AS HIS HOLDING OF ACTUAL INCOME DERIVED BY THE ASSESSEE CO MPANY. THE AO FURTHER ERRED AT LAW IN MISINTERPRETING THE EXPLANATIONS FU RNISHED BY THE ASSESSEE AT THE TIME OF STATEMENT RECORDED DURING THE SEARCH AN D SEIZURE PROCEEDINGS AND THEREBY ERRED IN RESORTING TO ARBITRARY CALCULA TION AND ACCORDINGLY ARRIVING AT WRONG CONCLUSIONS. THE AO ERRED IN MAKI NG ADDITIONS WITHOUT 9 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS APPRECIATING THE CORRECT FACTS, JUST ON THE BASIS O F ARBITRARY ASSUMPTIONS AND PRESUMPTION APPLIED ON NOTING ON PAGE 8 TO 10 OF AN NEXURE AS, EXHIBIT - 4 WHICH WAS IN FACT ROUGH NOTING AND PROJECTED ESTIMA TES ONLY. THE NOTING ON THE PAPERS DOES NOT REPRESENT ABOUT THE ACTUAL NATU RE OR ACTUAL EXECUTION ANY BUSINESS TRANSACTIONS BY THE ASSESSEE COMPANY. IN FACT THERE WAS NO SUCH TRANSACTION ACTUALLY EXECUTED BY THE COMPANY. THAT THE SUBJECTED LOOSE PAPERS ARE UNDATED, UNSIGNED, NOT REFLECTING THE NATURE OF TRANSACTIONS, THERE ARE SO MANY CUTS ON WRITTEN FIG URES WHICH CLEARLY SPEAKS ABOUT AND IMPLIED THAT THE NOTING ARE OF ROUGH NATU RE AND HENCE THE SAME ARE ESTIMATES OR PROJECTED FIGURES AND HENCE NOTING ON SUCH PAPERS CANNOT BE RELIED UPON FOR MAKING ADDITION IN THE DECLARED INCOME. THE LOOSE PAPERS AND THE NOTING ARE TECHNICALLY, LEGALLY AND FACTUALLY A ROUGH, DEAF AND DUMP PAPER/NOTING WHICH CANNOT BE MADE BASE FOR DET ERMINATION OF INCOME IF ANY DERIVED BY THE ASSESSEE. 7.1 THE LD AR ALSO SUBMITTED THAT THE AO HAS MADE T HE ADDITIONS ON WRONG FOOTINGS, IGNORING THE RECORDS, STATEMENT OF THE RELEVANT PERSONS IN THIS RESPECT AND HENCE THE ADDITION IS ARBITRARY IN NATURE WITHOUT CONFRONTING WITH THE ASSESSEE WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND SUCH ADDITIONS CANNOT BE SUSTAINED IN THE EYE OF LAW. TH AT THE ADDITION SO MADE IS ARBITRARY, WITHOUT PROPER BASE FOR THE SAME, MIS INTERPRETATION OF LOOSE PAPER, IMAGINARY INFERENCES ON ASSUMPTIONS AND PRES UMPTIONS ONLY IGNORING THE MATERIAL AND EXPLANATIONS AVAILABLE ON RECORD, WHICH IS AGAINST THE 10 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS PRINCIPLE OF NATURAL JUSTICE. THE AO NOT APPRECIATE D THE TRUE AND CORRECT FACTS EXPLAINED IN THIS RESPECT AT THE TIME OF RECO RDING OF STATEMENT DURING THE COURSE OF SEARCH PROCEEDINGS BUT AO MISINTERPRE TED THE EXPLANATIONS OF THE MARKETING MANAGER SHRI ANKIT JAIN IN THIS RESPE CT AND HENCE ARRIVED AT WRONG CONCLUSION. DURING THE COURSE OF SEARCH AND P OST SEARCH PROCEEDINGS THE STATEMENT OF MARKETING MANAGER SHRI ANKIT JAIN WAS RECORDED ON 21/10/2010 UNDER SECTION 131 AND THE LD. AO HAS ALS O REFERRED SUCH STATEMENT AT PAGE 28 AND 29 OF HIS ORDER IN PARA 8. 6. IN THIS STATEMENT AT QUESTION NO.3 INFORMATION AND EXPLANATIONS RELATED TO SIZE OF FLATS HAVE BEEN ASKED FOR AGAINST WHICH SHRI ANKIT JAIN HAS CL EARLY EXPLAINED AND STATED THAT THE SIZE OF FLATS ARE 1001 SQFT.(BUILT UP AREA ) AND 1126 SQFT. (BUILT UP AREA) ONLY. SIMILARLY THE LD. OFFICER HAS ASKED CLA RIFICATION ABOUT THE SIZE OF FLATS MENTIONED IN THE BROACHER I.E. 1666 AND 1484 SQFT. IN RESPONSE THERETO HE HAS CLEARLY EXPLAINED THAT THIS WAS NOTH ING BUT SUPER BUILT UP AREA OF BOTH TYPE OF FLATS CONSTRUCTED BY THE COMPA NY. FURTHER, AGAINST SPECIFIC QUESTION REGARDING CHARGING OF RATES BY TH E ASSESSEE COMPANY FROM THE CUSTOMER IN QUESTION NO.5 HE HAS CLEARLY STATED THE FACTS THAT THE RATES PER SQFT ARE CHARGED ON BUILT UP AREA ONLY. THERE W ERE DOCUMENTS RELATED TO SALE AGREEMENT OF FLATS EXECUTED PRIOR TO THE DATE OF SEARCH AND AVAILABLE WITH THE ASSESSEE WHICH WERE ALSO SEIZED BY THE SEA RCH PARTY, E.G. SALE AGREEMENT DATED 22/01/2010, 9/02/2010 AND 16/01/201 0, BETWEEN THE COMPANY AND SHRI MAHESH CHANDRA SWARNKAR, SHRI PAWA N DAGALIA AND SHRI VIRNDRA SINGH CHAJJAD RESPECTIVELY WHICH ARE DULY S IGNED AND NOTARIZED. IN 11 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ALL THE ABOVE AGREEMENTS THE BUILT AREA AS WELL AS TOTAL SALE CONSIDERATION HAS BEEN MENTIONED CLEARLY. THERE IS NO QUESTION O F ESTIMATING THE SAME WITHOUT BRINGING ON RECORDS ANY MATERIAL CONTRARY T O THE SAME. NO MATERIAL FOUND DURING THE COURSE OF SEARCH FROM WHICH IT CAN BE INFERRED THAT THERE WAS EXCESS AMOUNT RECEIVED OR RECEIVABLE BY THE COM PANY OVER AND ABOVE THE AMOUNT MENTIONED IN SUCH AGREEMENTS. THE ACTUAL AMOUNT RECEIVED ARE APPEARING IN THE REGISTERED SALE. THE STATEMENTS RE CORDED UNDER SECTION131 ARE TO BE ACCEPTED AS TRUTHFUL UNTIL THE SAME IS RE BUTTED BY WAY OF EVIDENCE BROUGHT ON RECORDS. IN THE PRESENT CASE THE STATEM ENT OF SHRI ANKIT JAIN HAS TO BE ACCEPTED AS A TRUTHFUL VERSION IN ABSENCE OF ANY COUNTER EVIDENCE. HE ALSO SUBMITTED THAT NOTING ON THE PAPER WAS NOT IN THE HAND WRITING OF ANY OF THE DIRECTOR OR OFFICE BEARERS. THERE WERE N O TRANSACTIONS OF SUCH NATURE ACTUALLY EXECUTED BY THE COMPANY. IT CLEARL Y REFLECTS THE ROUGH NATURE ON THE FACE OF LOOSE PAPER WHICH DID NOT CON TAINS THE NAME, NATURE, DATE OF TRANSACTIONS ETC AND ALSO CONTAINS CUTS ON THE ROUGH NOTING ITSELF. THE ONLY INFERENCE WHICH CAN BE DRAWN AFTER APPRECI ATING THE NOTING ON SUCH PAPER THAT IT IS ROUGH NOTING AND NO ASSUMPTIO NS/PRESUMPTION CAN BE MADE INFERENCE CAN BE DRAWN FOR EARNING OF INCOME B Y THE COMPANY. THE ADDITION ON THE BASIS OF SUCH A ROUGH, DEAF AND DUM P LOOSE PAPER SUCH LOOSE SHEET OF PAPERS COULD NOT BE CONSTRUED AS BOO KS OF ACCOUNTS FOR THE PURPOSE OF MAKING ADDITION. NO SUCH TRANSACTION OF EITHER RECEIPT OR PAYMENT WAS EVER MADE BY THE ASSESSEE COMPANY. AS THE NOTING ARE NOT 12 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS MADE BY THE ASSESSEE AND NO TRANSACTION EVER EXECUT ED FROM THE PERSONS MENTIONED THEREIN. 7.2 HE ALSO SUBMITTED THAT AS REGARDS PROVISION OF SECTION 292C OF THE ACT, HE HAS TO SUBMIT THAT SECTION 292C IS A PRESU MPTIVE PROVISION WHERE CERTAIN FACTS ARE TO BE PRESUMED BY THE OPERATION O F LAW. HOWEVER IT IS A SETTLED LAW THAT SUCH PRESUMPTIONS ARE REBUTTABLE P RESUMPTIONS AND THE DOCUMENTS AND PAPERS HAS TO BE CONSIDERED CONSIDERI NG THE TOTALITY OF THE FACTS OF THE CASE. THE DEEMING PROVISIONS CANNOT BE APPLIED MECHANICALLY IGNORING THE TRUE AND REAL FACTS OF THE CASE, THE M ATERIAL EVIDENCES AVAILABLE ON RECORDS AND THE SURROUNDING CIRCUMSTANCES AND TH E STATEMENTS RECORDED BY THE DEPARTMENT DURING THE COURSE OF SEARCH AND P OST SEARCH PROCEEDINGS. THE AO APPEARS TO BE CONFUSED ABOUT THE POSITION OF SUPER BUILT UP AREA AND BUILT UP AREA THE TERMS USED IN THIS LINE OF BU SINESS. ACTUALLY AS PER LAW ACTUAL BUILT UP AREA CAN BE SOLD TO THE BUYER BUT I N ORDER TO CHARGE REGULAR MAINTENANCE EXPENSES THE COMMON AREAS IS BEING INCL UDED PROPORTIONATELY AND INFORMED/ADVERTISE TO THE BUYER IN ORDER TO AVO ID CONFUSION IN FUTURE REGARDING MAINTENANCE CHARGES. SIMILAR IS THE POSIT ION OF CONFUSION ABOUT CHARGING OF PARKING SPACE TO THE AO. HE HAS ESTIMAT ED ON ASSUMPTIONS AND PRESUMPTIONS THE SALE CONSIDERATION ON THE BASIS OF PROJECTED AMOUNT IN ROUGH NOTING ON THE SUBJECTED LOOSE PAPERS. THAT ON SUCH LOOSE PAPERS IT IS VERY CLEARLY REFLECTED THAT THE RATE OF 1400 PER SQ FT TO 1600 SQ FT HAS BEEN APPLIED ON PROJECTED CALCULATIONS. FURTHER THERE MA Y BE CALCULATIONS FOR 13 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS FURNISHED FLATS AND FOR NON-FURNISHED FLATS ALSO. I N THIS RESPECT OF THE SPECIFIC MENTION BY THE LD. AO ABOUT THE COST OF CONSTRUCTIO N AT RS.1400/- PER SQ FT AT PARA 8.3 OF THE ORDER. IF CONSIDER THE SAME THEN THE OVERALL PROFIT PER SQ FT APPEARS TO BE 100 PER SQ FT ONLY IF SALE CONSIDE RATION IS OF 1500/-SQ FT AS APPEARING ON PAGE NUMBER 9. THIS AMOUNT OF PROFIT A LREADY DECLARED BY THE ASSESSEE COMPANY. IT APPEARS THAT THERE IS NO LOGIC IN THE ARBITRATION CALCULATION MADE BY THE LD. AO WITHOUT CONFRONTING THE ISSUE WITH THE ASSESSEE COMPANY AT THE TIME OF ASSESSMENT PROCEEDI NG. 7.3 HE FURTHER SUBMITTED THAT IN FACT, THE NOTING W ERE ROUGH ESTIMATES RELATED TO SALE PRICE WHICH COULD HAVE BEEN ACHIEVE D IF THE FLATS WOULD HAVE BEEN SOLD AFTER FURNISHING THE SAME I.E. INSTEAD OF SELLING THE FLATS IN THE PRESENT SITUATION IF THE SAME WOULD BE SOLD AFTER F URNISHING (PROVIDING MODULAR KITCHEN, DRAWING/BED ROOM FURNITURE, AC, GE YSERS, COMPLETE FURNISHING ETC.). ACCORDINGLY THE FINANCE AND MARKE TING MANAGER SHRI ANKIT HAS EXPLAINED THE CORRECT INFERENCES APPEARING FROM SUCH NOTING ON THE SUBJECTED LOOSE PAPERS AS PER HIS KNOWLEDGE AT THE TIME OF RECORDING OF STATEMENT DURING THE COURSE SEARCH EVEN THOUGH THE PAPER WAS NOT RELATED TO ANY OF THE TRANSACTIONS ACTUALLY EXECUTED BY THE M. IT APPEARS ON PROPER APPRECIATION OF PAPER THAT THE NOTING CONTAINS ESTI MATED RATE OF RS.1600/- AT PAGE 8, 1500/- AT PAGE 9 AND 1400/- PAGE 10 AND THA T TOO BE APPLIED AGAINST THE FLATS PROPOSED TO BE BUILT UP AND SOLD. THERE IS NO MATERIAL EVIDENCE ON RECORD FROM WHICH IT CAN BE INFERRED OR PROVED THAT SUCH 14 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS AMOUNT HAS BEEN ACTUALLY RECEIVED AT ALL. THE AO HA S NOT BROUGHT ANY EVIDENCE WITH REGARDS TO AND IN SUPPORT OF HIS PRES UMPTIONS AND HAS NOT PROVED WHETHER SUCH TRANSACTIONS WERE EVER EXECUTED BY THE COMPANY. ACCORDINGLY UNDER NO CIRCUMSTANCES ANY ADDITION CAN BE MADE ON THIS ACCOUNT IN THE YEAR UNDER CONSIDERATION. THE PRESUM PTION MADE BY THE AO APPEARS TO BE WITHOUT ANY PROPER BASE OR EVIDENCE J UST ON ASSUMPTIONS AND PRESUMPTIONS HENCE NOT CORRECT. THE ADDITIONS MADE ON SUCH WRONG PRESUMPTIONS CANNOT BE SUSTAINED IN THE EYE OF LAW. FURTHER AFTER BRINGING ON RECORD THE EXPLANATIONS IN THIS REGARD. THE AO H AD NOT MADE ANY INDEPENDENT ENQUIRY IN THIS RESPECT BEFORE MAKING A NY ADDITION ON THIS ACCOUNT. HE HAS NEITHER BROUGHT ON RECORD NOR PROV ED WITH THE HELP OF ANY EVIDENCE ON RECORD THAT THE ASSESSEE HAS ACTUALLY R ECEIVED SUCH AMOUNT NOR GIVEN THE REASONING HOW THE ASSESSEE HAS DERIVED IN COME FROM SUCH NOTING. NO ADDITION CAN BE MADE ONLY ON THE BASIS OF ASSUMP TIONS, PRESUMPTIONS OR GUESS WORK IGNORING THE RECORD AND ASSESSMENT ORDER IT IS VERY CLEAR THAT THE LD. AO HAS PROCEEDED ONLY ON SUSPICION. IT IS S ETTLED PRINCIPLE OF LAW THAT AN ALLEGATION REMAINS A MERE ALLEGATION UNLESS PROV ED. SUSPICION CANNOT TAKE THE PLACE OF REALITY. IN THIS RESPECT HE RELIE D ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (1) DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) (2) R.B.N.J. NAIDU V/S CIT 29 ITR 194 (NAG), (3) KANPUR STEEL CO. LTD. V/S CIT 32 ITR 56 (ALL). (4) CIT V/S KULWANT RAI 291 ITR 36( DEL). (5) CIT V/S SHALIMAR BUILDWELL PVT LTD 86 CCH 250(A LL). 15 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS THAT IT IS AN ADMITTED FACT IN THIS CASE AS IS APPE ARING ON PROPER APPRECIATION OF THE PAPER THAT THE LOOSE PAPER DOES NOT REFLECT THE DATE OF TRANSACTION, NATURE OF TRANSACTION, THE PERSON IN WHOSE WRITING IT WAS NOTED, POSITION WHETHER TRANSACTION EXECUTED OR NOT, WHETHER EXECUT ED BY THE ASSESSEE OR NOT AND WHETHER THE ASSESSEE HAS DERIVED ANY INCOME FROM SUCH TRANSACTION. IN SUPPORT OF ALL THE ABOVE ARGUMENTS ASSESSEE ALSO RELIED ON RATIO OF THE FOLLOWING DECIDED CASES. 1. ASHWNI KUMAR V/S ITO (1991) 39 ITD 286 (DELHI). 2. D.N.KAMANI (HUF) V/S CIT (1999) 70 ITD 77, 113 (TM) 3. S.P.GOEL V/S DCIT (2002) 82 ITD 85 MUMBAI 4. CIT V/S RAJPALSINGH RAMAVAT (2007) 288 ITR 498 (ALL AB) 5. RAM TRADERS V/S FIRST INCOME TAX OFFICER, 25 ITD 599(TM) (PAT) 6. CIT V/S DHARAMPAL PREMCHAND LIMITED (2007) 295 ITR 105(DELHI) 7. CIT V/S KHAZAN SINGH AND BORTHER (2008) 304 ITR 234(P&H) 8. CIT V/S R.K.VENKETCHANALAM (2008) 301 ITR 236(MAD) 9. CIT V/S MAULIK KUMAR K SHAH (2008) 307 ITR 137 (GUJ ) 10. PRAKASH CHANDRA NAHATA V/S CIT (2008) 301 ITR 134 (MP) 11. CIT V/S D.K.GUPTA (2009) 308 ITR 320 DELHI 12. DCIT V/S REDHA DEVELOPERS INDIA LTD. (2010) 329 ITR 1 (GUJ) 13. NIRMAL FASHIONS (P) LTD. V.S DCIT (2009)123 TTJ (KO L) 180. 8. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE PLEA AND SUBMISSIONS HAS DELETED THE ADDITIONS BY OBSERVING AS UNDER. 16 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS 7.3 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMI SSION OF THE APPELLANT, FINDING OF THE AO AND HAVE ALSO APPRAISED RATIO OF THE VARIOUS CASE LAWS REFERRED IN RELATION TO THE ISSUE UNDER CONSIDERATI ON. 7.3.1 I HAVE FOUND THAT IN THE SUBJECTED LOOSE PA PERS. CONSIDERING THE LINE OF APPELLANT'S BUSINESS, ONE TENDS TO INFER 1666X1600 ON PAGE 8, 1666X1500 ON PAGE 9 AND 1484X1400 ON PAGE 10 AS ARE AS OF FLAT FOR FIRST FIGURE AND RATE OF PER SQ.FT. FOR THE SECOND FIGURE IN ALL THREE PAIRS OF FIGURES ON ABOVE SEIZED PAPERS. HOWEVER, SEEING PAP ER AS UNSIGNED & CONTAINED NO MEANINGFUL INFORMATION SUCH AS NO NUMB ER OF FLAT, NO NAME OF BUYER, NO DATE OF TRANSACTION OR NATURE OF TRANSACTIONS IT CANNOT BE CONCLUSIVELY BE INFERRED THAT IT CONVEYS THE SALE CONSIDERATIONS CHARGED BY THE APPELLANT. FURTHERMOR E, ON PAGE NO.8 VARIOUS CUTTINGS ARE APPEARS AND PAGE 9 & L0 SOME F URTHER FIGURES ARE SEEN AS JOTTED DOWN WHICH INDICATES THE PAPER ARE S OME ROUGH ESTIMATES OR PROJECTED CALCULATIONS. THE LOOSE PAPE RS ARE NOT SPEAKING DOCUMENTS AND DID NOT CONTAIN ANY NARRATION OR DESC RIPTION ABOUT DIFFERENT FIGURES NOTED THEREON. NONE OF THE NOTING ON THESE PAPER ANY WAY SUGGESTS WHETHER THEY MEANT FOR SALE PRICE AND WHETHER THE SUCH SALE CONSIDERATION WERE AT ALL CHARGED / RECEIVED B Y THE APPELLANT OR PAID BY SOMEBODY. EVEN THE NAME OF ASSESSEE OR ANY OTHER PERSON IS NOT APPEARING ANYWHERE ON SUCH LOOSE PAPERS. 7.3.2 I HAVE FOUND THAT THE NOTING ON ALLEGED LOOS E PAPER IS OPEN TO MORE THAN ONE INTERPRETATIONS AND DID NOT PROVE CONCLUSI VELY THAT ANY TRANSACTION WAS ACTUALLY EXECUTED OR NOT BY THE APP ELLANT. CONSIDERING THESE SPECIFIC FACTS OF THIS CASE IT IS VERY CLEAR THAT THE LD. AO HAS PROCEEDED ONLY ON SUSPICION. 7.3.3 I HAVE FOUND THAT DURING THE COURSE OF SEARC H AND POST SEARCH PROCEEDINGS AS WELL AS LATER ON THE ASSESSEE HAS DE NIED THAT THEY HAVE NOT EXECUTED ANY TRANSACTIONS OF SUCH NATURE AND NO TING ON SUCH LOOSE PAPERS WHICH IS NOT IN THE HAND WRITING OF ANY OF T HE OFFICE BEARER. 7.3.4 I HAVE NOTICED THAT THE AO CONFUSED ABOUT TH E TERMS SUPER BUILT UP AREA AND BUILT UP AREA USED AT DIFFERENT PLACES. IN THE LOCAL LAWS APPLICABLE FOR REGISTRATION OF IMMOVABLE PROPERTY THE BUILT UP AREA IS BEING CONSIDERED IN THE DOCUMENTS OF REGISTRATION AS HAS BEEN APPEARING IN THE SALE AGREEMENTS PLACED ON RECORDS. THE SUPER BU ILT UP AREA IS PUBLISHED TO INCLUDE THE COMMON AREA OF COMPLEX ON PROPORTIONATE BASIS NORMALLY FOR CHARGING MAINTENANCE FROM DIFFER ENT FLAT OWNERS. THE AO SEEMS TO HAVE BASED HIS INFERENCE FOR SALE CONSI DERATIONS CHARGED BY THE APPELLANT ON SUPER BUILT UP AREA IGNORING NOTAR IZED SALE AGREEMENT WHICH WERE SEIZED AND AVAILABLE IN HIS RECORDS. 7.3.5 I HAVE ALSO FOUND THAT THE STATEMENTS OF SHR I ANKIT JAIN AND THE EXPLANATIONS BY HIM WITH REGARDS TO SALE PRICE HAVE NOT BEEN PROPERLY APPRECIATED BY AO.IN THE STATEMENT RECORDED IMMEDIA TELY AFTER THE DATE OF SEARCH I.E. 21/10/2010 SPECIFIC QUESTIONS H AVE BEEN RAISED WHICH 17 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS WERE ANSWERED AND EXPLAINED BY SHRI ANKIT JAIN WHIC H ALSO CLARIFIES THE CONFUSION REGARDING BUITT UP AND SUPER BUILT AREA A S WELL AS THE POSITION OF SALE CONSIDERATION OF FLATS ACTUALLY RECEIVED BY THE COMPANY. 7.3.6 IT IS OBSERVED THAT THE AO HAD NOT MADE ANY INDEPENDENT VERIFICATION / ENQUIRY FROM THE DATE OF STATEMENT 21/10/2010 TO TH E DATE OF ASSESSMENT OF THE YEAR UNDER CONSIDERATION I.E. 1L/ 03/2014 WITH REGARDS TO AND IN SUPPORT OF THE INFERENCE DRAWN BY HIM REG ARDING UNDERSTATEMENT OR DIFFERENCE IN SALE PRICE ON THE B ASIS OF WHICH THE ADDITIONS HAVE BEEN MADE BY THE AO. IN THE PRESENT CASE NEITHER THE ASSESSEE HAS ADMITTED SUPPRESSION/UNDER-STATEMENT O F SALES AT ANY POINT OF TIME NOR ANY OF BUYERS HAVE CONFIRMED FOR PAYING ANY EXTRA CONSIDERATION/ON MONEY FOR BUYING FLATS FROM THE AP PELLANT. IN ABSENCE OF SUCH SPECIFIC AND SPEAKING MATERIAL ALSO THERE I S NO SCOPE FOR SUCH ESTIMATIONS MADE BY THE AO. 7.3.7 IN TILE CASE OF L.K.ADVANI VS CBI THEIR LORD SHIP HAVE HELD THAT ' BASED UPON THE INCRIMINATING MATERIAL FOUND AT THE PREMIS ES OF A THIRD PARTY BUT NO BELONGING OR SIGNED BY THE APPELLANT THE PRE SUMPTION PROVIDED UNDER SECTION L32(4A) WILL NOT BE APPLICABLE UNTIL AND UNLESS CORROBORATED BY OTHER EVIDENCE. ' SIMILARLY, IN THE CASE OF RAMA TRADERS VS FIRST ITO (1998) 25 ITO 599 (PAT)(TM) IT IS HELD THAT NO ADDITION COULD BE MADE ON THE BASIS OF PRESUMPTION RAISED BY SECTI ONL32(4A) IN THE HANDS OF THE ASSESSEE HERE IN THE BOOKS OF ANOTHER FIRM. THE RATIO OF THESE JUDGMENT HAVE BEEN APPLIED IN SO MANY CASES W HERE IN IT IS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF DOCUME NTS FOUND FROM THIRD PARTIES IN THE ABSENCE OF CORROBORATIVE EVIDE NCE. IN THE CASE UNDER CONSIDERATION NO CORROBORATIVE EVIDENCE BROUGHT ON RECORDS BY THE AO. 7.3.8 FROM THE VARIOUS JUDGMENTS RELIED UPON BY TH E APPELLANT AND ON THE FACTS OF THE CASE, I HAVE TO OBSERVE THAT NO ADDITI ON CAN BE MADE ONLY ON THE BASIS OF ASSUMPTIONS, PRESUMPTIONS OR GUESS WORK BASED UPON ROUGH, UNSIGNED, PROJECTED NOTING ON LOOSE PAPERS I GNORING THE MATERIAL EVIDENCES SEIZED AND STATEMENT AVAILABLE ON RECORD. IN IMPUGNED ASSESSMENT ORDER IT IS VERY CLEAR THAT THE AO HAS P ROCEEDED ONLY ON ON ASSUMPTIONS. IT IS SETTLED PRINCIPAL OF LAW THAT AN ALLEGATION REMAINS A MERE ALLEGATION UNLESS PROVED. PRESUMPTIONS AND ASS UMPTIONS CANNOT TAKE THE PLACE OR REALITY. 7.3.9 CONSIDERING THE SPECIFIC FACTS AND RATIO OF VARIOUS JUDGMENTS DISCUSSED HEREIN ABOVE I AM IN THE CONSIDERED VIEW THAT SUCH LOOSE PAPERS IS TECHNICALLY, LEGALLY AND FACTUALLY CAN ONLY BE TERM ED AS ROUGH, DEAF AND DUMB PAPERS AND UNDER NO CIRCUMSTANCES IT CAN BE UT ILIZED AS EVIDENCE HEATING THE SAME AS A LEGAL DOCUMENT. FURTHER THE L OOSE PAPERS ARE UNDATED, UNSIGNED AND DOES NOT REFLECT THE EXACT NA TURE OR ACTUAL EXECUTION OF TRANSACTIONS BY THE COMPANY. NO ADVERS E INFERENCE CAN BE DRAWN ON THE BASIS OF SUCH PAPER ON SUSPICION AS TH E NOTING ON SUCH PAPER IS OPEN TO MORE' THAN ONE POSSIBLE OF INTERPR ETATIONS IN ABSENCE OF COGENT AND SPEAKING ADVERSE MATERIAL BY INQUIRY/VER IFICATION FOR SUCH 18 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ESTIMATION. HENCE, THE ADDITION MADE BY THE AO IN T HIS CASE OF RS. 36,51,800/- IN THE YEAR UNDER CONSIDERATION IS NOT JUSTIFIED. ACCORDINGLY, THE ADDITION OF RS. 36,51,800/- IS DELETED. THIS GR OUND OF APPEAL IS ALLOWED. 9. AGAINST THE SAID ORDER FOR DELETION OF THE ADDI TION, THE REVENUE WAS IN APPEAL BEFORE US ON THE GROUND MENTIONED ABOVE. 10. THE LD. CIT-DR HAS VEHEMENTLY SUPPORTED THE ORD ER OF THE A.O. 11. ON THE CONTRARY, THE LD AR APPEARING ON BEHALF OF THE ASSESSEE HAS RELIED ON THE ORDER OF THE LD. CIT(A) AND ALSO RELI ED ON THE ADDITIONAL WRITTEN SUBMISSIONS AND THE CONTENTS OF THE SAME ARE REPROD UCED BELOW: 3. FOR UNDERSTATEMENT OF SALES NO EVIDENCE OF REC EIVING EXCESS SALE CONSIDERATION: FURTHER THE LD. AO HAS NOT BROUGHT ON RECORD THAT THE ASSESSEE HAS RECEIVED MORE CONSIDERATION THAN TO ACTUAL SALE CON SIDERATION MENTIONED IN SALE DEED EXCEPT LOOSE ROUGH PAPERS, WHICH HAVE NO VALUE UNLESS THERE IS NO DIRECT NEXUS . ON THIS PREPOSITION KINDLY REFER FOLLOWING DECISION. 3.1 IN THE CASE OF INDER LOK HOTELS (P) LTD V/S ITO 122 TTJ 145(MUM) . HERE ALSO THE POSITION IS VERY SAME BECAUSE HERE ASSESSEE PUR CHASES A LAND AND AFTER CONVERSION AND DEVELOPING IN TO PLOTTING THE SAM E HAVE BEEN SOLD AFTER MAKING SOME PROFIT. THE LOWER AUTHORITY NOWHERE ALLEGED TH AT THE ASSETS WERE SOLD IN LOSS AND HE NEITHER MADE ANY INQUIRY NOR BROUGHT ANY EVI DENCE ON RECORD THAT THE LAND SOLD ON HIGHER PRICE THAN SHOWN IN SALE DEED. IF HE WAS HAVING ANY DOUBT ABOUT THE SALE PRICE OF LANDS HE COULD HAVE MADE INDEPENDENT INQUIRY. THE ASSESSEE HAS DISCHARGED ONUS LIE UPON HIM BY PRODUCING THE COPIE S OF SALE DEED. NOW THE ONUS WAS LIES UPON THE REVENUE TO DISPROVE THE SAME. 3.2 IN CASE OF CIT V/S SUPRIYA ENTERPRISES 232 ITR 887(KER). IT HAS BEEN HELD THAT THE REGISTERED DOCUMENTS REFLECT THE PRICE OF THE L AND IS A PIECE OF EVIDENCE WHICH CANNOT BE DISCARDED. THE ORDINARY RULE IS THAT APPA RENT STATE OF AFFAIRS IS REAL UNLESS CONTRARY IS PROVED AND THE BURDEN OF PROVING THE CO NTRARY LIES ON THE PERSON WHO ASSESSED/ALLEGED IT KINDLY REFER DAULAT RAM RAWAT MULL 87 ITR 349 (SC). ACIT V/S EXCELLENT LAND DEVELOPERS (P) LTD. 1 ITR (TRIB.) 563 3.3 IN CIT V/S CHANDNI BHUCHAR 34 DTR 137(P&H)- IT HAS BEEN HELD THAT VALUATION DONE BY THE ANY STATE AGENCY FOR THE PURPOSE OF THE STAMP DUTY WOULD NOT IPSO FACT SUBSTITUTE THE ACTUAL SALE CONSIDERATION AS BE ING PASSED ON THE SELLER BY THE PURCHASER IN THE ABSENCE OF ANY ADMISSIBLE EVIDENCE VALUE TAKEN BY THE STAMP DUTY AUTHORITY COULD NOT BE TAKEN AS ACTUAL SALE CONSID ERATION AND VALUE SHOWN IN THE SALE DEED HAD TO BE ACCEPTED. ALSO REFER CIT V/S SMT. RAJ KUMARI VIMLA DEVI 19 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS (2005) 279 ITR 360(ALL). CIT V/S SHWETA BUCHAR 192 TAXMAN 67(P&H) ALSO REFER HUSSAIN ALI BOHARA IN ITA NO. 564 & 578/JDH/2011 3.4. IN THIS CONNECTION WE ALSO RELYING ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CIT V/S K.K. ENTERPRISES 178 TAXMAN 187(RAJ.)/13 DT R 289 WHEREIN IT HAS BEEN HELD THAT AO DETERMINED THE SALE PRICE OF TH E PLOTS BY ADOPTING THE RATE OF RS. 40 PER SQ.FT. ON THE BASIS OF RATE TAKEN BY SU B REGISTRAR AND MADE ADDITION TO ASSESSEES INCOME NOT JUSTIFIED. APPARENTLY, THERE WAS NO RELIABLE MATERIAL ON RECORD BEFORE THE ASSESSING AUTHORITY TO ASSUME SAL E OF PLOTS AT RS. 40 PER SQ. FT.. IN THE ABSENCE OF ANY EVIDENCE ON RECORD, IT CANNOT BE PRESUMED HAT LAND HAS BEEN SOLD BY THE ASSESSEE AT A HIGHER PRICE THAN THE CON SIDERATION SHOWN IN THE REGISTERED SALE DEEDS- RATES OF PROPERTY FIXED BY T HE STAMP VALUATION AUTHORITY FOR REGISTRATION PURPOSE CANNOT BE APPLIED TO ARRIVE AT THE PRICE FOR WHICH THE PROPERTY MIGHT HAVE BEEN SOLD. RECENTLY FOLLOWED BY THE HONBLE BENCH IN THE CASE O F MANOJ DUBEY IN ITA NO. 294/JP/2016 DT. 09.06.2017. 3.5 IN CIT V/S DOLPHIN BUILDERS (P) LTD 90 DTR 75(MP) - UNDERSTATEMENT OF SALE CONSIDERATION OF FLATES- WHEN THERE WAS NO EVIDENCE THAT THE EXCESS AMOUNT, IF ANY WAS COLLECTED BY G- BUILDERS OR EVEN IF IT WAS COLL ECTED THEN IT WAS PASSED ON THE ASSESSEE. NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. 4. LOOSE PAPERS NOT FOR THE YEAR UNDER CONSIDERATIO N.: IT IS VERY IMPORTANT TO NOTE THAT THE SEARCH WAS CARRIED O 10.03.2010 I.E FOR F. Y. 2009-10 AND ADMITTEDLY THE DOCUMENTS WERE SEIZED ON 10.03.2010 IT MEANS BEFORE IT. IT MEANS THE SEIZED LOOSE PAPERS WERE EARLIER TO THAT DATE AND THE ADDITION H AS BEEN MADE IN LATER A.Y.S. HENCE HOW A PAST SEIZED DOCUMENTS CAN BE USED FOR F UTURE OR LATER YEARS I.E FOR A.Y. 2011-12 & 2012-13, WITHOUT ANY EVIDENCE. HENCE ALSO THE ADDITION LIABLE TO BE DELETED. FURTHER IN THE STATEMENTS DT. 21.042010 AL SO THE ANKIT JAIN HAS CLARIFIED THE THINGS AND CLEARLY STATED THE SALE PRICE OF FLA TS WHICH CLEARLY TALLY WITH THE SALE AGREEMENTS WHICH HAS ALSO FOUND WE ARE ENCLOSING H EREWITH COPY OF SALE AGREEMENTS. ON SEC. 292C WE RELY UPON THE DECISION OF 379 ITR 160(BOM.). 5. CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND THE POSITION OF LAW THE ADDITION MADE IN THE YEARS UNDER CONSIDERAT IONS HAVE RIGHTLY BEEN DELETED BY THE LD. CIT(A). HENCE WE REQUEST YOUR HONOR TO P LEASE UPHELD THE ORDER OF LD. CIT(A) IN THE INTEREST OF EQUITY AND JUSTICE AND DI SMISSED THE APPEAL OF THE REVENUE AND OBLIGE. 12. WE HAVE HEARD THE LD. COUNSELS OF BOTH THE PART IES AND HAVE PERUSED THE MATERIAL PLACED ON RECORD. WE HAVE ALSO DELIBER ATED UPON THE DECISIONS CITED IN THE ORDERS PASSED BY THE AUTHORITIES BELOW AS WELL AS CITED BEFORE US AND WE HAVE ALSO GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES. FROM PERUSAL OF THE RECORD, WE OBSERV ED THAT IN THIS CASE, A 20 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS SEARCH AND SEIZER OPERATION WERE CARRIED OUT ON 10. 03.2010 RELEVANT TO A.Y. 2010-11 WHEREIN THE CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED AS PAGE 8 TO 10 OF- ANNEXURE AS EXHIBIT-4 (AS SUPRA ). ON PER USAL OF THESE LOOSE PAPERS, IT IS CLEAR THAT THESE WERE ROUGH NOTING, P ROJECTED ESTIMATES ONLY AND THERE WERE ALSO CUTTINGS, NO DATE, NATURE, FLAT NO. DOES NOT REPRESENT ABOUT THE ACTUAL NATURE OR ACTUAL EXECUTION OF ANY BUSINESS TRANSACTIONS BY THE ASSESSEE COMPANY. THE AO MADE ADDITION ONLY BY MAKING THE ARBITRARY CALCULATION ON THE BASIS OF ABOVE LOOSE PAPERS WITH OUT BRINGING ANY POSITIVE, CORROBORATIVE EVIDENCE ON RECORDS IN SUPPORT HE HAS PROCEEDED ON HIS OWN IMAGINATION, ASSUMPTIONS, PRESUMPTIONS OR GUESS WOR K. FURTHER WHEN THE ASSESSING OFFICER HIMSELF RECORDED THE STATEMENTS O F MARKETING MANAGER SH. ANKIT JAIN WHO WAS HANDLING THE SALES WAS RECORDED ON 21/10/2010 U/S 131 WHEREIN HE HAS CLEARLY EXPLAINED AND STATED ABOUT T HE SIZE OF FLATS ARE 1001 SQ FT.(BUILT UP AREA) AND 1126 SQ FT. (BUILT UP ARE A) ONLY. HE ALSO EXPLAINED ABOUT THE SIZE OF FLATS MENTIONED IN THE BROACHER I .E. 1666 AND 1484 SQ FT. THAT THIS WAS NOTHING BUT SUPER BUILT UP AREA OF BO TH TYPE OF FLATS CONSTRUCTED BY THE COMPANY. REGARDING CHARGING OF R ATES BY THE ASSESSEE COMPANY FROM THE CUSTOMER IN QUESTION NO.5 HE HAS C LEARLY STATED THE FACTS THAT THE RATES PER SQ FT ARE CHARGED ON BUILT UP AR EA ONLY. WE HAVE ALSO GONE THROUGH THE DOCUMENTS RELATED TO SALE AGREEMEN T OF FLATS EXECUTED PRIOR TO THE DATE OF SEARCH AND AVAILABLE WITH THE ASSESSEE WHICH WERE ALSO SEIZED BY THE SEARCH PARTY, E.G. SALE AGREEMENT DAT ED 22/01/2010, 9/02/2010 AND 16/1/2010, BETWEEN THE COMPANY AND SH RI MAHESH CHANDRA 21 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS SWARNKAR, SHRI PAWAN DAGALIA AND SHRI VIRNDRA SINGH CHAJJAD RESPECTIVELY WHICH ARE DULY SIGNED AND NOTARIZED. IN ALL THE ABO VE AGREEMENTS THE BUILT AREA AS WELL AS TOTAL SALE CONSIDERATION HAS BEEN M ENTIONED CLEARLY. WHEN ALL THESE EXPLANATION, DOCUMENTS WERE BEFORE THE AO, HE MUST BRING ON RECORD ANY CONTRARY EVIDENCE, HE MUST HAVE MADE THE INQUIR Y FROM THE PURCHASERS WHEN THE DATA OR DETAILS OF THE PURCHASERS WERE BEF ORE HIM, BEFORE MAKING THE ADDITION ON ACCOUNT OF UNDERSTATEMENT OF SALES. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY CONTRARY EVIDENCE EXC EPT THESE LOOSE PAPERS. THE NOTARIZED SALES AGREEMENTS CANNOT BE DISCARDED IN FRONT OF LOOSE ROUGH ESTIMATED PAPERS WITHOUT BRINGING ANY CONTRARY EVID ENCES TO REBUT THE SAME. ON THIS PREPOSITION, WE DRAW STRENGTH FROM TH E DECISION OF THE HONBLE MP HIGH COURT IN THE CASE OF CIT V/S DOLPHIN BUILDERS (P) LTD 356 ITR 420 WHEREIN IT WAS HELD THAT DEPARTMENT HAD NOT EXAMINED ANY PURCHASER OR FLAT OWNER TO VERIFY CORRECTNESS O F NOTING THAT SOME HIGHER AMOUNT WAS PAID BY SAID PURCHASER TO B BUILDERS O R FACT THAT ACTUAL PRICE WAS MUCH HIGHER TO PRICE WHICH WAS RECORDED IN ACCO UNT BOOKS. THE TRIBUNAL HAD ALSO FOUND THAT IF ANY AMOUNT WAS COLL ECTED IN EXCESS TO THE AGREED PRICE THEN B COULD HAVE BEEN LIABLE FOR TH AT AND NOT THE ASSESSEE. AFORESAID REASONING OF THE TRIBUNAL WAS REASONABLE. THOUGH THERE MIGHT BE SOME DOUBT ABOUT THE PRICE OF THE FLATS BUT UNTIL A ND UNLESS IT COULD HAVE BEEN PROVED BY SOME EVIDENCE, AFORESAID DOUBT COULD NOT TAKE PLACE OF PROOF. UNTIL AND UNLESS SUCH NOTING WAS CORROBORATE D BY SOME MATERIAL EVIDENCE, THE AO ERRED IN MAKING ADDITION IN THE IN COME. 22 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS 13. FURTHER IF IN THE BEGINNING, ANY CUSTOMER OR BUYER HAS COME TO LOOK OR FOR PURCHASE OF ANY FLATS AND THE MARKETING PERSONS TELL SOME CALCULATION OF FLATS AREA, SIZE, OR ESTIMATION OF RATE ON THE ROUG H PAPERS. AS IN THE CASE OF FLAT SALE/PURCHASE OR REAL ESTATE BUSINESS, THERE A RE SO MANY CRITERIA OR ANGLES TO CONVINCE THE CUSTOMERS AND AFTER BARGAINI NG AMOUNT IS BEING REDUCED ON THE BASIS OF PAYMENT, CONSTRUCTION, FINI SHING ETC. THUS IT MEANS NOT THAT THE ROUGH NOTING OR ESTIMATION IS THE FINA L. FURTHER WE AGREE WITH THE PLEA OF THE ASSESSEE AND ADMITTED FACTS THAT TH E LOOSE PAPERS PERTAIN OR FOUND IN THE A.Y. 2010-11 AS THE SEARCH WAS CARRIED ON 10.03.2010 I.E FOR F.Y. 2009-10 WHERE THESE DOCUMENTS WERE SEIZED THUS THE SEIZED LOOSE PAPERS WERE EARLIER TO THE DATE OF SEARCH AND PRIOR TO THE A.Y. 2011-12 AND 2012-13. THUS NO ADDITION CAN BE MADE IN LATER A.Y. S. 2011-12 AND 2012-13 ON PROJECTION BASIS AND A PAST SEIZED DOCUMENTS CAN BE USED FOR FUTURE OR LATER YEARS I.E FOR A.Y. 2011-12 & 2012-13, UNTIL A ND UNLESS THE ASSESSING OFFICER WAS NOT HAVING ANY CONCRETE EVIDENCE, WHICH WERE ABSENT IN THE PRESENT CASE. 14. FURTHER WE WOULD ALSO LIKE TO SAY THAT THERE WA S NO INQUIRY OR EVIDENCE ON RECORD THAT WHETHER ANY EXCESS OR OWN M ONEY HAS BEEN RECEIVED BY THE ASSESSEE FROM THE PURCHASERS OVER A ND ABOVE THE AMOUNT MENTIONED IN SUCH AGREEMENTS. THE ACTUAL AMOUNTS RE CEIVED ARE APPEARING IN THE REGISTERED SALE. IN THIS REGARD WE DRAW STRE NGTH FROM THE DECISION OF THE HONBLE JURISDICTIONAL RAJASTHAN HIGH COURT IN THE CASE CIT V/S K.K. 23 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ENTERPRISES 178 TAXMAN 187(RAJ.)/13 DTR 289 WHEREIN IT HAS BEEN HELD THAT AO DETERMINED THE SALE PRICE OF THE PLOTS BY ADOP TING THE RATE OF RS. 40 PER SQ.FT. ON THE BASIS OF RATE TAKEN BY SU B REGISTRAR AND MADE ADDITION TO ASSESSEES INCOME NOT JUSTIFIED. APPARE NTLY, THERE WAS NO RELIABLE MATERIAL ON RECORD BEFORE THE ASSESSING AUTHORITY T O ASSUME SALE OF PLOTS AT RS. 40 PER SQ. FT.. IN THE ABSENCE OF ANY EVIDENCE ON RECORD, IT CANNOT BE PRESUMED HAT LAND HAS BEEN SOLD BY THE ASSESSEE AT A HIGHER PRICE THAN THE CONSIDERATION SHOWN IN THE REGISTERED SALE DEEDS- R ATES OF PROPERTY FIXED BY THE STAMP VALUATION AUTHORITY FOR REGISTRATION PURP OSE CANNOT BE APPLIED TO ARRIVE AT THE PRICE FOR WHICH THE PROPERTY MIGHT HA VE BEEN SOLD . AGAIN THE HONBLE JURISDICTIONAL RAJASTHAN HIGH COURT IN THE C ASE OF CIT VS. KHANDELWAL SHRINGI & CO.: (2017) 398 ITR 0420 (RAJ) IT HAS BEEN HELD THAT INCOME FROM UNDISCLOSED SOURCESUNEXPLAINED INVESTM ENTS PURCHASE OF AGRICULTURAL LANDDELETION OF ADDITION TRIBUNAL DELETED ADDITION MADE BY AO ON ACCOUNT OF UNEXPLAINED INVES TMENT IN PURCHASE OF AGRICULTURAL LAND ON BASIS OF SALE AGREEMENT AND OT HER DOCUMENTS FOUND AND IMPOUNDED DURING COURSE OF SURVEY U/S 133 IN WHICH SALE CONSIDERATION WAS SPECIFIED AMOUNTHELD, WHILE COMPUTING UNDISCLOSED INCOME, RATES OF PROPERTY FIXED BY STAMP VALUATION AUTHORITY FOR PUR POSES OF REGISTRATION OF SALE DEEDS, COULD NOT BE TAKEN TO BE PRICE FOR WHIC H PROPERTY WAS PURCHASEDIN ABSENCE OF EVIDENCE ON RECORD, HIGHER PRICE FOR SALE OF LAND COULD NOT BE PRESUMED FROM CONSIDERATION SHOWN IN R EGISTERED SALE DEEDS AND RATES OF PROPERTY FIXED BY STAMP VALUATION AUTH ORITY FOR REGISTRATION 24 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS PURPOSES COULD NOT BE TAKEN TO BE PRICE FOR WHICH P ROPERTY MIGHT HAD BEEN SOLDTHERE WAS NO JUSTIFICATION FOR AO TO ESTIMATE SELLING PRICE OF LAND AT RS. 40 PER SQ.FT. INSTEAD OF RS. 20 PER SQ.FT. AND FOR CIT(A) TO PRESUME SELLING PRICE AT 22 PER SQ.FTTRIBUNAL COMMITTED NO ERROR IN ALLOWING APPEAL OF ASSESSEEREVENUES APPEAL DISMISSED. WE ALSO DRAW STRENGTH FROM THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF CIT VS. SHIVAKAMI CO. (P) LTD. 159 ITR 0071(SC) WHEREIN IT WAS HELD THAT CAPITAL GAINSAPPLICABILITY OF FIRST PROVISO TO S. 12B OF 1922 ACTPROVISO TO S. 12B NOT ATTRACTED UNLESS THERE IS EVIDENCE THAT MORE CONSIDERATION THAN WHAT WAS STATED IN THE DOCUMENT OF TRANSFER WAS RECEIVEDONUS IN THIS REGARD IS ON REVENUEEMPHASIS IN THOSE PROVISIONS IS ON CONSIDERATION DECLARED OR DISCLOSED BY THE AS SESSEE AS DISTINGUISHED FROM THE CONSIDERATION ACTUALLY RECEIVED BY THE ASS ESSEECAPITAL GAINS IS INTENDED TO TAX THE GAINS OF THE ASSESSEE AND NOT W HAT THE ASSESSEE MIGHT HAVE GAINEDSHARES SOLD BY THE ASSESSEE TO RELATED PARTIES AT LOWER VALUE ALLEGEDLY FOR SAFEGUARDING THE SHARES FROM BEING TA KEN OVER BY GOVERNMENT IN SETTLEMENT OF TAX DUESNO EVIDENCE THAT CONSIDER ATION ACTUALLY RECEIVED WAS MORE THAN WHAT WAS DISCLOSED OR DECLARED BY THE ASSESSEETHERE WAS THUS NO UNDERSTATEMENT OF FULL VALUE OF CONSIDERATI ONNO CAPITAL GAINS UNDER THE FIRST PROVISO TO S. 12B WAS, THEREFORE, L EVIABLE. IN THE CASE OF CIT V/S SHALIMAR BUILDWELL PVT LTD 86 CCH 250(ALL) IT HAS BEEN HELD THAT NO ADDITIONS CAN BE MADE ON OWN GUESS WORK, 25 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS ASSUMPTION, PRESUMPTION AND SUSPICION. AN ALLEGATIO N REMAINS A MERE ALLEGATION UNLESS PROVED. SUSPICION MAY BE STRONG H OWEVER CANNOT TAKE THE PLACE OF REALITY, ARE THE SETTLED PRINCIPLES. IN TH E PRESENT CASE LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES IT IS CLEAR THAT HE M ADE THE ADDITION OWN GUESS WORK, ASSUMPTION, PRESUMPTION AND SUSPICION B Y USING ROUGH ESTIMATED CUTTING NOTING WHICH WERE PRIOR TO THE A. Y.S UNDER CONSIDERATION WHICH WAS NOT DESIRABLE IN THE EYE OF LAW . HENCE ALSO NO WERE LIABLE TO BE MADE. THE LD. CIT-DR HAS NOT BROUGHT ON RECORD ANY NEW FACTS OR CIRCUMSTANCES TO CONTROVERT THE FINDINGS SO RECORDE D BY THE LD. CIT(A) QUA THIS ISSUE, THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE ABOVE FINDINGS OF THE L D. CIT(A) AND JUDGMENTS RELIED UPON BY THE PARTIES, WE DO NOT SEE ANY REASO N TO INTERFERE TO DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD. CIT(A) QUA THIS ISSUE, ACCORDINGLY, WE UPHOLD THE SAME. 15. IN THE RESULT, THIS APPEAL OF THE REVENUE STAND S DISMISSED. 16. NOW WE TAKE ITA NO. 295/JODH/2016 FOR THE A.Y. 2012-13. IN THIS APPEAL, THE GROUND UNDER DISPUTE IS GROUND NO. 2 OF THE APPEAL AND THE SAME IS REPRODUCED BELOW. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.4,19,86,000/- ON ACCOUNT OF UNDERSTATEMENT OF SALE CONSIDERATION OF THREE FLATS WITHOUT APPRECIATING THE FACTS THAT THE SAID ADDITION WAS R IGHTY MADE BY THE AO ON THE BASIS OF DETAILED ANALYSIS OF SEIZED PAPERS BEING PAGE NO. 8 TO 10 OF ANNEXURE-AS, EXHIBIT-4 WHICH PR OVED THAT THE FLATS HAVE BEEN SOLD TO THE BUYERS AT THE RATES AND AS PER PLAN 26 ITA 180 & 295/JODH/2016 ACIT VS M/S ANKIT CHIRAG DEVELOPERS MENTIONED ON THE AFORESAID THREE PAGES BUT IN THE B OOKS SALE CONSIDERATIONS WERE SHOWN LESS. 17. WE HAVE NOTICED THAT IN THIS APPEAL I.E. ITA NO . 295/JODH/2016 FOR THE A.Y. 2012-13, THE GROUNDS OF APPEAL, FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS SUBMISSIONS OF BOTH THE PARTIES ARE EXACTLY SAME AND IDENTICAL AS IN ITA NO. 180/JODH/2016 A.Y. 2011-12. HENCE THE FINDING GIVEN IN ITA NO. 180/JODH/2016 SHALL APPLY MUTATIS MUTAND IS IN THIS YEAR ALSO. 18. IN THE RESULT, BOTH THESE APPEALS OF THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH SEPTEMBER, 2021. SD/- SD/- (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR DATED 15/09/2021 *RANJAN COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A) 5. THE DR 6. GUARD FILE ASSISTANT REGISTRAR JODHPUR BENCH