DCIT CIR 3, THANE V. SAI ANAND CONSTRCTION, THANE

ITA 1834/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9772 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Business income; Business expenditure; Additional evidence
• Section: 69C; 43CA; 143(3); 50C; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1834/M/2016 ASSESSMENT YEAR: 2010-11 DY. COMMISSIONER OF INCOME TAX, CIRCLE-3, ROOM NO.02, 6 TH FLOOR, ASHAR IT PARK, B-WING, WAGLE INDL. ESTATE, THANE (W)-400 604 VS. M/S. SAI ANAND CONSTRUCTION, SHOP NO.22-27, SAI TIRTH, SIDDARTH NAGAR, KOPRI COLONY, THANE (E)- 400 603 PAN: AAKFM 2891B (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI SAURABHKUMAR RAI, A.R. REVENUE BY : SHRI SHASHI TULSIYAN, D.R. DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 21.03.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 15.01.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE VARIOUS GROUNDS RAISED BY THE REVENUE ARE AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF ADDITIO NAL INCOME ADMITTED BY THE ASSESSEE IN THE STATEMENT RECORDED IN THE COURSE OF SURVEY PROCEEDINGS AT THE BUSINESS PREMISES OF THE ASSESSEE. IN THIS REGARD, BY NEGATING THE STATEMENT GIVEN BY PARTNER AND ARCHITECT OF THE ASSESSEE FIRM, THE LD. CIT(A) HAS ERRED IN APPR ECIATING THE FACT THAT THE ARCHITECT OF THE ASSESSEE IS THE PERSON WH O WAS HAVING FULL KNOWLEDGE OF THE CORRECT STATUS OF WORK DONE IN THE PROJECT OF THE ASSESSEE AND THE PARTNER, BEFORE MAKING ADMISSION O F ADDITIONAL INCOME, WAS FULLY AWARE OF THE FINANCIAL IMPLICATIO NS OF THE STATEMENT GIVEN BY THE ARCHITECT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON AC COUNT OF ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 2 DIFFERENCE IN RATE APPLIED BY THE ASSESSEE IN SALE OF RESIDENTIAL UNITS IN HIS PROJECT AS HE HAS FAILED TO APPLY THE RATIO OF THE ORDER OF THE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF M/S MONT BLANC PROPERTIES & INDUSTRIES P LTD VS ITO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)ERRED IN DELETING THE ADDITION OF RS.50,00,000/- MADE U/S 68 OF IT ACT, AS THERE WAS NO CASH BALANCE IN THE BOOKS OF ASSESSEE WHICH WAS SUBMITTED BEFORE THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS. IN THIS REGARD, LD. CIT(A) ERRED IN ACCEPTING THE SUBM ISSION OF ASSESSEE AT THE APPELLATE STAGE THAT THE AMOUNT WAS PAID DIR ECTLY BY THE PARTNERS, NOT BY THE ASSESSEE FIRM. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PA RTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION OF PROJECT SAI TIRTH UNDER SDR AND FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.35,36,250/- ON 29.09.2010. A SURVEY ACTION WAS CONDUCTED ON 18.02.2010 ON THE ASSESSEE FIRM DURING WHICH THE ASSESSEE ADMITTED AND SURRENDERED ADDITIONAL INCOM E OF RS.3 CRORES OVER AND ABOVE THE NORMAL BUSINESS INCOME. THE ASSESSEE DID NOT SHOW THE SAID INCOME IN THE RETURN OF INCOME FOR THE REASONS THAT IT WAS A FORCED AND COERCIVE ADMISSION TAKEN FROM THE PARTNER IN THE ASSESSEE FI RM. THE CASE OF THE ASSESSEE WAS SELECTED UNDER CASS FOR SCRUTINY. THEREAFTER T HE ASSESSMENT WAS FRAMED BY THE AO AFTER SEVERAL ROUNDS OF HEARING VIDE ORDE R DATED 26.03.2013 U/S 143(3) OF THE ACT ASSESSING THE INCOME OF THE ASSES SEE AT RS. 6,37,76,448/- BY MAKING VARIOUS ADDITIONS. 4. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE ORDER OF LD. CIT(A) DELETING THE ADDITION OF RS.3 CRORES MADE BY THE AO ON ACCOUNT OF ADDITIONAL INCOME ADMITTED BY THE ASSESSEE IN THE STATEMENT RE CORDED DURING THE COURSE OF SURVEY PROCEEDINGS. 4.1 THE FACTS IN BRIEF ARE THAT DURING THE COURSE O F SURVEY, STATEMENTS OF MR. DHARAM KATARIA MAIN PARTNER OF ASSESSEE, ARCHITECT SHRI ARVIND KHARE AND SHRI PRAKASH TILWANI (SOLE SELLING AGENT) WERE REC ORDED. SHRI DHARAM KATARIA WAS ASKED TO EXPLAIN THE DETAILS OF PROJEC T SAI TIRTH, SIDDHARTH NAGAR, THANE (E). THE SAID PARTNER OF THE ASSESSEE WAS ASKED TO EXPLAIN THE ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 3 SOURCE OF INVESTMENTS IN THE PROJECT, SALES , COST OF CONSTRUCTION, EXACT WORK IN PROGRESS ON THE BASIS OF PERCENTAGE COMPLETION OF T HE PROJECT AND ALSO THE DIFFERENCE BETWEEN THE ACTUAL WORK IN PROGRESS AS RECORDED IN THE BOOKS OF THE ASSESSEE AND WORK IN PROGRESS AS PER PERCENTAGE COM PLETION METHOD. THE SURVEY TEAM CALCULATED THE TOTAL WORK IN PROGRESS A T RS.47 CRORES WHEREAS THE ASSESSEE HAS ACCOUNTED IN THE BOOKS OF ACCOUNTS THE WORK IN PROGRESS TO THE TUNE OF RS.44 CRORES AND ACCORDINGLY MR. DHARAM KAT ARIA ACCEPTED THE DIFFERENCE OF RS.3 CRORES TO BE ON ACCOUNT OF UNACC OUNTED EXPENSES IN THE BOOKS OF ACCOUNTS DURING THE COURSE OF RECORDING OF STATEMENT IN SURVEY PROCEEDINGS. A DIARY WAS ALSO FOUND DURING THE COUR SE OF SURVEY WHICH ACCORDING TO THE ASSESSEE WAS PREPARED ON THE INST RUCTION OF THE SURVEY TEAM. HOWEVER, THE ASSESSEE DID NOT OFFER THE SAME IN THE PROFIT AND LOSS ACCOUNT AS ADMITTED DURING THE COURSE OF SURVEY. IT WAS STATE D VIDE LETTER DATED 22.03.13 THAT MR. DHARAM KATARIA WAS ONE OF THE PARTNERS IN THE ASSESSEE FIRM AND GAVE THE STATEMENT IN AN INTENSE STATE OF MIND. THE ARCH ITECT OF THE ASSESSEE WHOSE STATEMENT WAS RECORDED DURING THE SURVEY WAS NOT A COMPETENT PERSON TO MAKE THE STATEMENT AS TO THE COST OF THE CONSTRUCTION. IT WAS ALSO ALLEGED THAT THE SURVEY TEAM DID NOT CARRY OUT ANY MEASUREMENTS AT T HE PROJECT SITE AND WHATEVER CALCULATIONS WERE MADE TO GET THE SURREND ER OF RS. 3.00 CR WERE WITHOUT ANY BASIS. THE CONTENTION OF THE LD. A.R. WAS NOT ACCEPTED BY THE AO AND NOTED THAT MR. DHARAM KATARIA WAS THE PERSON W HO HAS OVERSEEN THE CONSTRUCTION OF THE PROJECT IN THE ASSESSEE FIRM A ND CANNOT BE SAID TO BE NOT AWARE OF THE COST AND VOLUME OF THE WORK IN PROGRES S AND ACCORDINGLY ADDED RS.3.00 CR TO THE TOTAL INCOME OF THE ASSESSEE. 5. IN THE APPELLATE PROCEEDINGS, LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE DELETED THE ADDITION BY OBSERVING AND HOLDING AS UNDER: 32. I HAVE GONE THROUGH THE SUBMISSIONS AND THE CON TENTS OF THE ALLEGED NOTE BOOK. THE RELEVANT ENTRIES ARE REPRODUCED HEREWITH : ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 4 PAGE NO.8 15.00 TM 10.00 TAH 10.00 SEL 10.00 POL KOP 10.00 MANS PAGE NO.6 5.00 POP-P-COMLS. 5.00 PO-P-MCP 5.00 PO-P-SS 10.00 JM 10.00 PO-COK PAGE NO.5 15.00 LOK CR. 10.00 MUM-EBC. 10.00 PO-UTSV 15.00 OTH 15.00 LOC-UTS PAGE NO.4 15.00 TM 10.00 SCO 15.00 TAH 15.00 MANT PAGENO.3 10.00 PO-P-CONT. 10.00 PO-PNCP PAGENO.2 10.00 POP-HSS 10.00 MON-ELC 10.00 LOK-ELE. PAGE NO. 1 15.00 R-ELE 33. THE CONTENTS OF THE DIARY, AS REPRODUCED ABOVE, MAKE IT EVIDENT THAT THE NOTING ARE INCHOATE AND INCOMPREHENSIBLE. IT IS ALMOST IMP OSSIBLE TO DETECT FROM THE SAID NOTING AS TO WHAT KIND OF TRANSACTIONS ARE NOTED TH EREIN. THE NAMES OF THE PARTIES CANNOT BE COMPREHENDED. EVEN THE PURPOSE OF MAKING THE PAYMENT IS IMPOSSIBLE ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 5 TO DETECT. IT IS EVEN MORE SURPRISING THAT NO QUEST IONS WERE ASKED DURING THE COURSE OF SURVEY ABOUT THE CONTENTS OF THE DIARY AND THE M EANING WHICH COULD BE ASCRIBED TO THE CONTENTS. QUESTION NOS.119 & 20 WERE DIRECTE D TOWARDS THE SAID DIARY, WHICH GIVES REFERENCE TO THE FIGURES WRITTEN THEREI N AND THE CODE WORDS WRITTEN ALONGWITH THE FIGURES. IN THE ANSWER TO QUESTION NO .19, SHRI DHARAM KATARIA STATED THAT THESE ARE CERTAIN EXPENSES WHICH WERE INCURRED IN CASH FOR THE SAI TIRTH PROJECT, WHICH CANNOT BE RECORDED DUE TO THE NATURE OF PAYMENTS AS THEY PERTAINED TO CERTAIN UNOFFICIAL PAYMENTS WHICH ARE NOT PERMIS SIBLE TO BE ACCOUNTED FOR. HOWEVER, CURIOUSLY IN THE ANSWER TO IMMEDIATELY FOL LOWING QUESTION NO.20, SHRI DHARAM KATARIA STATED THAT THE TOTAL OF NOTING CONT AINED IN THE DIARY PRODUCED BY THE SURVEY TEAM, IS THE SAME AS THE DIFFERENCE WORK ED OUT IN HIS ANSWERS TO QUESTION NOS.16 AND 17 REPRODUCED SUPRA. THERE IS A N APPARENT DICHOTOMY IN THE ABOVE ANSWERS. ON THE ONE HAND, THE AUTHORISED OFF ICER HAS BELIEVED THE CONTENTION THAT THE AFORESAID PAYMENTS ARE OF A NAT URE OF UNOFFICIAL PAYMENTS WHICH CANNOT BE RECORDED IN THE BOOKS OF ACCOUNT, T HE VERY NEXT ANSWER WHICH STATES IMPLIEDLY THAT THE NOTING CONTAINED THE FIGU RE OF DIFFERENCE WORKED OUT FOR CALCULATING THE WORK IN PROGRESS, HAS ALSO BEEN ACC EPTED. IN FACT, THE ASSESSING OFFICER HAS ALSO ACCEPTED THAT THE ABOVE NOTING REF LECT THE EXCESS WORK IN PROGRESS. NO QUESTIONS IN RESPECT OF THIS DICHOTOMY HAS BEEN PUT TO THE ASSESSEE. IT IS INDEED SURPRISING THAT NO QUESTION HAS BEEN ASKED ABOUT TH E MEANING OF THE SAID ENTRIES IN THE DIARY. NOTHING HAS BEEN ASKED ABOUT THE AUTHORS HIP OF THE DIARY. IN ANY CASE IT HAS ALREADY BEEN HELD THAT THE STATEMENT GIVEN ON O ATH, DURING THE COURSE OF SURVEY U/S.133A DOES NOT HAVE ANY EVIDENTIARY VALUE . IT APPEARS TO ME THAT THE ABOVE DIARY, EVEN IF TAKEN TO BE FOUND DURING THE C OURSE OF SURVEY, IS A DUMB DOCUMENT WHICH CANNOT BE RELIED UPON. 34. IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT T HE ADDITION OF RS.3 CRORES ON ACCOUNT OF THE STATEMENT GIVEN BY SHRI DHARAM KATAR IA DURING THE COURSE OF SURVEY, IS INCORRECT AND OUGHT TO BE DELETED. I DIRECT THE ASSESSING OFFICER ACCORDINGLY. GROUND NOS.2 & 3 ARE ALLOWED. 6. THE LD. CIT(A) DELETED THE ADDITION OF RS. 3.00 CR ON THE GROUND THAT THE STATEMENT MADE BY THE ASSESSEE DURING THE COURS E OF SURVEY PROCEEDINGS WAS NOT CORROBORATED BY ANY UNDERLYING MATERIALS/EV IDENCES DETECTED DURING THE COURSE OF SURVEY PROCEEDINGS OR CORROBORATED BY THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND THEREFORE, THE SAID STATEMENT DURI NG SURVEY HAS NO EVIDENTIARY VALUE. RELIANCE WAS MADE IN THE CASE OF CIT VS. S. KHADER KHAN SON 300 ITR 157 (MADRAS-HC) WHICH WAS ALSO AFFIRMED BY THE HON BLE SUPREME COURT VIDE ORDER DATED 20.09.2012. 7. THE LD. D.R. VEHEMENTLY SUBMITTED BEFORE THE BEN CH THAT THE LD. CIT(A) HAS COMPLETELY ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 6 RS.3.00 CRORES WHICH WAS BASED UPON THE STATEMENT OF THE PARTNER MR. DHARAM KATARIA WHO WAS LOOKING AFTER THE CONSTRUCTION WORK AND WAS FULLY CONVERSANT WITH THE BUSINESS AFFAIRS SUCH AS COST OF THE WORK IN PROGRESS ETC. MOREOVER, THE SAID STATEMENT HAS THE BACKING OF THE FURTHER S TATEMENT OF THE ARCHITECT OF THE ASSESSEE MR. ARVIND KHARE AND A DIARY WHICH WAS FOUND DURING THE COURSE OF SURVEY PROCEEDINGS IN WHICH THE EXPENSES OF RS.3 CRORES WERE RECORDED/STATED. THE ARGUMENTS OF THE ASSESSEE BEF ORE THE FIRST APPELLATE AUTHORITY THAT THE DIARY WAS FABRICATED AT THE INST RUCTION OF THE ASSISTANT COMMISSIONER OF INCOME TAX WAS ALSO WRONG AND WITH OUT ANY BASIS. THE LD. D.R. CONTENDED THAT HAD THE DIARY BEEN FABRICATED, THE PARTNER OF THE ASSESSEE MR. DHARAM KATARIA AND THE ARCHITECT MR. ARVIND KHA RE WOULD NOT HAVE ADMITTED ALL THE DIFFERENCES BETWEEN THE WORK IN PR OGRESS AS STATED IN THE BOOKS OF ACCOUNTS AND AS CALCULATED AT THE TIME OF SURVE Y WHICH WAS ON ACCOUNT OF UNRECORDED EXPENSES BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS. THE LD. D.R. FURTHER SUBMITTED THAT MR. DHARAM KATARIA HIMSELF C ALCULATED THE VALUE OF TOTAL WORK IN PROGRESS OF RS.47.00 CRORES AS AGAINST RS.4 4.00 CRORES ACCOUNTED IN THE BOOKS OF ACCOUNTS. THE LD. D.R. ALSO STATED THAT T HE AO HAS RIGHTLY MADE THE ADDITION OF RS.3.00 CRORES TO THE TOTAL INCOME OF T HE ASSESSEE WHICH IS OF ENOUGH EVIDENTIARY VALUE. FINALLY, THE LD. D.R. PR AYED THAT THE ORDER OF THE LD. CIT(A) ON THIS POINT BE REVERSED BY RESTORING T HE ADDITION MADE BY THE AO. 8. THE LD. A.R., ON THE OTHER HAND, VEHEMENTLY OPPO SED THE ARGUMENT GIVEN BY THE LD. D.R. BY SUBMITTED THAT THE ADDITIO N WAS PURELY BASED UPON THE STATEMENT OF MR. DHARAM KATARIA PARTNER OF THE ASSE SSEE, MR. ARVIND KHARE ARCHITECT OF THE ASSESSEE AND ON THE BASIS OF THE D IARY WHICH WAS FABRICATED AND CREATED ON THE INSTRUCTION OF THE SURVEY TEAM. THE LD. A.R. SUBMITTED THAT THE PARTNER OF THE ASSESSEE WAS COERCED TO MAKE THE SUR RENDER. IT WAS ALSO STATED BY THE LD. A.R. THAT NO DISCREPANCY WAS FOUND IN TH E BOOKS OF THE ACCOUNTS AND ALSO THE CASH PHYSICALLY AVAILABLE AND CASH BALANC E AS PER CASH BOOK. THE LD. ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 7 A.R. ALSO SUBMITTED BEFORE THE BENCH THAT THE ADDIT IONAL COMMISSIONER THREATENED THE ASSESSEE TO MAKE SURRENDER AND YIEL D TO THE DEMANDS OF THE SURVEY TEAM FAILING WHICH THE SURVEY WILL BE CONVER TED INTO SEARCH. THE ASSESSEE ALSO FILED THE AFFIDAVIT OF THE ARCHITECT STATING THAT THE STATEMENT PERTAINING TO COST OF CONSTRUCTION WAS NOT GIVEN VO LUNTARILY WHICH WAS FILED AS ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) UNDER RUL E 46A AND IT WAS ALSO STATED IN THE SAID AFFIDAVIT THAT THE FULL ACTIVITY OF THE ARCHITECT WAS ENGINEERING AND ARCHITECTURE AND HE HAD NO KNOWLEDGE ABOUT THE PREVAILING COST OF CONSTRUCTION IN THANE REGION WHEREIN THE PROJECT OF THE ASSESSEE WAS LOCATED. IT WAS ALSO STATED THAT THE COST OF THE CONSTRUCTIO N OF THE ASSESSEE WAS RS.14,131/- PER SQ. MTR. WHICH IS FAR MORE THAN THE NOTIFIED COST OF CONSTRUCTION. THE LD. A.R. SUBMITTED THAT THE STAT EMENT OF THE MR. DHARAM KATARIA WAS RECORDED AND A FORCED SURRENDER WAS OB TAINED BY THE SURVEY TEAM . THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT RS. 3 CRORE WAS NOT OFFERED AS INCOME WHEN IT WAS FOUND THAT THERE WAS NO DISCREPA NCY IN THE BOOKS OF ACCOUNTS BY RELYING ON THE CBDT CIRCULAR NO.286/2/ 2003 DATED 10.03.03 AND 286/98/2013 DATED 18.12.14. THE LD. A.R. ALSO FILE D THE NOTIFIED COST OF CONSTRUCTION IN THANE REGION IN DIFFERENT YEARS AND SUBMITTED THAT THE COST OF THE ASSESSEE WAS MORE THAN 33.83% HIGHER THAN THE NOTIFIED COST. THE LD. A.R. SUBMITTED THAT IN SUCH CIRCUMSTANCES THERE IS NO BASIS FOR CALCULATING AT COST WHICH HIGHER THAN THE NOTIFIED/READY RECKNOR R ATE AS THERE IS NO JUSTIFICATION FOR COMING TO THE CONCLUSION THAT THE VALUE OF WORK IN PROGRESS UNDERSTATED IN THE BOOKS OF ACCOUNTS. THE LD. A.R. RELIED HEAVILY ON A COUPLE OF DECISIONS NAMELY (1) PAUL MATHEW & SONS VS. CIT REPORTED IN 129 TAXMANN 416(KER) AND CIT VS. S. KHADER KHAN SON 300 ITR 157 (MADRAS- HC). THE LD. A.R ALSO SUBMITTED THAT THE SLP FILED IN THE CASE OF CIT VS. S. KHADER KHAN SON (SUPRA) HAS BEEN DISMISSED BY THE H ONBLE SUPREME COURT VIDE ORDER DATED 20.09.12. FINALLY, THE LD. A.R. P RAYED THAT IN VIEW OF THE ABOVE FACTS AND THE RATIO LAID DOWN BY THE APEX COU RT AND THE HIGH COURTS THE ORDER OF THE LD. CIT(A) IS TOTALLY REASONED ORDER A ND SHOULD BE UPHELD. ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 8 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD INCLUDING THE DECISIONS RELIED UPON BY B OTH THE PARTIES. THE UNDISPUTED FACTS OF THE CASE ARE THAT A SURVEY WAS CARRIED OUT ON THE ASSESSEE DURING WHICH STATEMENTS OF ONE OF THE PARTNERS MR. DHARAM KATARIA AND ARCHITECT MR. ARVIND KHARE OF THE ASSESSEE FIRM WER E RECORDED AND THE DURING THE COURSE OF THE SURVEY THE COST OF WORK IN PROGR ESS AS RECORDED IN THE BOOKS OF ACCOUNTS WAS RS. 44.00 CR WHEREAS WORK IN PROGRE SS AS CALCULATED BY APPLYING PERCENTAGE COMPLETION METHOD WORKED OUT T O RS.47.00 CRORES. A DIARY WAS ALSO SEIZED BY THE SURVEY TEAM AS ACCORDI NG TO THE ASSESSEE WAS FABRICATED AT THE INSTANCE OF SURVEY TEAM. ULTIMATE LY A SURRENDER OF RS.3.00 CRORES WAS MADE IN THE STATEMENT RECORDED DURING SU RVEY. IT WAS ALSO ALLEGED THAT A DIARY WAS FOUND DURING THE SURVEY WHICH THE ASSESSEE ALLEGED THAT IT WAS FABRICATED AND CREATED AT THE INSTRUCTION OF S URVEY TEAM AND DID NOT BELONG TO THE ASSESSEE. THE SAID SURRENDER WAS NOT OFFERED TO TAX IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE INSTANT YEA R AS THE ASSESSEE WITHDREW THE STATEMENT OF HIS PARTNER MR. DHARAM KATARIA BY SUBMITTING THAT THE SURRENDER WAS OBTAINED BY COERCION AND THE PARTNER WAS NOT IN HEALTHY AND SOUND STATE OF MIND DURING THE COURSE OF SURVEY AND SAME WAS OBTAINED UNDER PRESSURE AND UNDER INTENSE STATE OF MIND. WE ALSO NOTE THAT THE AO COULD NOT FIND ANY DISCREPANCY IN THE BOOKS OF ACCOUNT BY THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. BESIDES, THE SURREN DER OF RS.3.00 CRORES IS NOT CORROBORATED BY ANY MATERIALS/EVIDENCES OR DISCREP ANCY IN THE BOOKS OF ACCOUNTS EXCEPT THE DIARY WHICH HAS BEEN ALLEGED BY THE ASSESSEE TO BE FALSE AND RECREATED AT THE INSTANCE OF SURVEY TEAM AT TH E TIME OF SURVEY. ACCORDING TO THE ASSESSEE , THE MODUS OPERANDI OF SUCH FALSE FABRICATION CAME TO LIGHT WHEN A SIMILAR SURVEY WAS CARRIED OUT BY THE SAME O FFICIALS AT ANOTHER BUSINESS PREMISES AND THE WHOLE MODUS OPERANDI CAME TO LIGHT WHEN THE OFFICERS WERE CAUGHT RED HANDED BY THE CBI. UNDER THESE CIRCUMST ANCES AND BASED ON THE ABOVE FACTS, WE ARE OF THE VIEW THAT THE SURRENDER OF RS. 3.00 CR BY THE ASSESSEE IS NOT CORROBORATED BY THE FINDINGS THE A O DURING THE COURSE OF ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 9 ASSESSMENT PROCEEDINGS EXCEPT THE STATEMENT OF MR. DHARAM KATARIA AND CALCULATION MADE AT THE TIME OF SURVEY. IN OUR OPI NION, THE ORDER OF THE LD. CIT(A) IS CORRECT AND DOES NOT REQUIRE OUR INTERFER ENCE AS IT HAS BEEN RIGHTLY FOLLOWED THE RATIO LAID DOWN BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. S. KHADER KHAN SON (SUPRA) IN WHICH THE SLP FILED BY THE DEPARTMENT STANDS DISMISSED BY THE HONBLE SUPREME COURT VIDE ORDER DATED 20.09.2012 AND ALSO THE RATIO LAID DOWN BY HONBLE KERALA HIGH COURT IN THE CASE OF PAUL MATHEW & SONS VS. CIT (SUPRA). IN VIEW OF THE ABOV E FACTS AND THE RATIO LAID DOWN BY THE VARIOUS COURTS, WE ARE INCLINED TO UPHO LD THE ORDER PASSED BY THE LD. CIT(A). RESULTANTLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 10. THE ISSUE RAISED IN THE SECOND GROUND OF APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.68,23,300/- BY LD. CIT(A) AS MADE BY THE AO ON ACCOUNT OF DIFFERENCE IN RATES AT WHICH THE ASSESSEE SOLD THE RESIDENTIAL UNITS IN THE PROJECT. 11. THE FACTS IN BRIEF ARE THAT DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THERE WERE VARIATIONS IN THE RATES AT WHICH THE FLATS WERE SOLD BY THE ASSESSEE TO VARIOUS BUYERS AND ACCORDIN GLY ASSESSEE WAS ASKED TO EXPLAIN THE AS TO WHY THE SAID VARIATIONS HAVE OCCU RRED. IN RESPONSE, THE ASSESSEE SUBMITTED THE DETAILS AS T OSALES OF FLA TS WHICH ARE REPRODUCED AS UNDER: LIST OF MEMBERS AS PER BOOKING DATE SR. NO . BOOKING DATE FLAT NO. NAME OF THE PARTY AREA RATE AMOUNT 1. 19.11.2005 B-1103 NIRANJAN M. SADHWANI 1540 1701 26,19,540/- 2. 11.04.2006 A-401 AARTI AMOL PAWAR 1540 2300 35,42,000/- 3. 15.04.2006 B-1201 ASHNA B. JETHANI 1185 1800 21,33,000/- 4. 23.04.2006 B-1104 K. GOWTHAMAN 1250 2700 33,75,000/- 5. 22.09.2009 B-1301 SUSHELKUMAR A. WANKHEDKAR 1185 3600 42,66,000/- ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 10 6. 30.10.2009 A-202 BABU PAKIMUTTU NADAR 3400 2088 71,00,000/- 7. 28.04.2010 A-402 PRAFUL V. JADHAV 1540 4145 63,83,300/- THE AO OBSERVED THAT FLAT NO.A-401, B-1201 & B-11 04 WERE BOOKED IN THE MONTH OF APRIL 2006 WITHIN 13 DAYS. FLAT NO. B -1104 WAS BOOKED AT RS.2700/- PER SQ. FT. BUT B-1201 AND A-401 WERE BOO KED AT RS.1800/- AND RS.2300/- PER SQ. FEET RESPECTIVELY. SIMILARLY, FL AT NO.B-1301 WAS BOOKED IN THE MONTH OF SEPTEMBER 2009 AT RS.3600 PER SQ. FEET WHEREAS FLAT NO.A-202 WAS BOOKED AT RS.2088 PER SQ. FEET. THUS ,THE AO CA LCULATED THE TOTAL DIFFERENTIAL AMOUNT AT RS.68,23,300/- AS PER DETAIL S BELOW AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE: 1) FLAT A- 401 AREA 1540 SQ. FEET X (RS.2700 RS.2300) = RS.6,16, 000/- 2) FLAT B- 1201 AREA 1185 SQ. FEET X (RS.2700 RS.1800) = RS.10,66 ,500/- 3) FLAT A- 202 AREA 3400 SQ. FEET X (RS.3600 RS.2088) = RS.51,40 ,800/- TOTAL AMOUNT RS.68,23,300/- 12. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DE LETED THE ADDITION BY OBSERVING AND HOLDING AS UNDER: 26. IN THE CASE OF COMMISSIONER OF INCOME-TAX, RAJKOT -III VS. M.P. SCRAP TRADERS [2015] 372 ITR 507 (GUJARAT) THE ASSESSING OFFICER MADE ADDITION IN HANDS OF ASSESSEE-FIRM AS WELL AS ITS PARTNER, A S UNEXPLAINED INVESTMENTS SOLELY RELYING UPON STATEMENT OF PARTNE R RECORDED AT TIME OF SURVEY WHICH WAS SUBSEQUENTLY RETRACTED. EXCEPT SAID STATE MENT, THERE WAS NO OTHER MATERIAL OR CORROBORATIVE MATERIAL WITH ASSESSING O FFICER TO JUSTIFY SAID ADDITION. IT WAS HELD THAT THE ADDITIONS MADE BY AS SESSING OFFICER WERE TO BE DELETED. 13. THE LD. D.R. ARGUED BEFORE THE BENCH THAT THE L D. CIT(A) HAS COMPLETELY MISAPPRECIATED THE FACTS WHILE DELETING THE ADDITION OF RS.68,23,300/-. THE LD. D.R. SUBMITTED THAT THE FL ATS WERE SOLD AT THE DIFFERENT RATES AND ASSESSEE COULD NOT SUBMIT ANY JUSTIFICATI ON FOR SELLING THE FLATS AT DIFFERENT RATES DURING SAME PERIOD AND ALSO COULD NOT EXPLAIN THE REASON FOR ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 11 SUCH VARIATIONS. THE DR ARGUED THAT THE DIFFERENTIA L AMOUNT WAS ON MONEY RECEIVED BY THE ASSESSEE AND THEREFORE, AO HAS RIGH TLY BROUGHT THE ON MONEY TO TAX BY MAKING ADDITION OF RS.68,23,300/-. 14. ON THE OTHER HAND, THE LD. A.R. VEHEMENTLY COUN TERING THE ARGUMENTS OF THE LD. D.R. SUBMITTED THAT THE ADDITION MADE BY TH E LD. CIT(A) WAS BASED UPON THE PRESUMPTIONS AND SURMISES THAT ASSESSEE R ECEIVED ON MONEY BY SELLING THESE FLATS AT DIFFERENT PRICES. THE LD. A .R. SUBMITTED THAT IN ALL THESE CASES THESE FLATS WERE SOLD AT HIGHER THAN THE STA MP VALUATION RATES I.E. READY RECKNOR RATES AND NONE OF THE FLATS WAS SOLD BELOW THE SAID RATES. THE LD. A.R. CONTENDED THAT THE REVENUE HAS NO EVIDENCES WHATSOE VER TO SHOW THAT ASSESSEE HAS MADE THE SALES OF THE FLATS AT A HIGHER RATE TH AN THE SALES CONSIDERATION. IT WAS STATED BY THE LD. A.R. THAT THE RATES AT WHICH THE FLATS WERE SOLD WERE REACHED AFTER A LOT OF NEGOTIATION AND DEPENDING UP ON THE CIRCUMSTANCES OF EACH CASE. THE LD. A.R. ALSO FURNISHED BEFORE THE FIRST APPELLATE AUTHORITY THE READY RECKNOR RATES AS APPLICABLE IN VARIOUS CALEND AR YEARS BY WAY OF ADDITIONAL EVIDENCES UNDER SECTION 46A. IT WAS ALS O ARGUED THAT THE ACT DOES NOT AUTHORIZE THE GOVERNMENT TO COMPUTE THE INCOME BASED ON PRESUMPTIVE RATES. THE LD. A.R. ALSO DREW OUR ATTENTION TO THE PROVISION OF SECTION 50C OF THE ACT WHICH PROVIDES FOR SUBSTITUTION OF DEEMED SALE CONSIDERATION IN PLACE OF ACTUAL SALES CONSIDERATION WHERE THE ACTUAL CONS IDERATION IS BELOW THE READY RECKNOR RATES. THE LD. A.R. ALSO TOOK US THROUGH T HE PROVISIONS OF SECTION 43CA OF THE ACT WHICH ARE APPLICABLE W.E.F. A.Y. 2 014-15 AND APPLY TO TRANSFER OF ASSETS WHERE THE SALES WERE MADE LOWER THAN THE READY RECKNOR RATES AND THUS THERE IS NO PROVISION IN THE ACT WHICH PRO VIDES FOR SUBSTITUTION OF HIGHER RATES AS DEEMED CONSIDERATION RATES IN PLACE OF THE READY RECKNOR RATES. MOREOVER, NO INCRIMINATING EVIDENCES WERE FOUND DUR ING THE COURSE OF SURVEY AS REGARDS THE SO CALLED UNDERSTATEMENT OF SALE CON SIDERATION AND THEREFORE, THE ADDITION AS DELETED BY THE FIRST APPELLATE AUTHORIT Y DESERVED TO BE AFFIRMED. THE LD. A.R. PLACED RELIANCE ON THE DECISION OF HON BLE SUPREME COURT IN THE ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 12 CASE OF K.P. VARGHESE VS. ITO AND ANOTHER [1981] 13 1 ITR 597W (SC). FINALLY, THE LD. A.R. PRAYED THAT THE ADDITION MADE BY THE AO WAS UNWARRANTED WHICH WAS RIGHTLY DELETED BY THE LD. CI T(A) AND THEREFORE, THE APPEAL OF THE DEPARTMENT ON THIS ISSUE SHOULD BE DI SMISSED. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE IMPUGNED ORDER. WE FIND THAT THE SAL ES OF FLATS WERE SOLD BY THE ASSESSEE AT DIFFERENT RATES IN THE SAME PERIOD . H OWEVER, IN SOME CASES, THE SALE RATE VARIES FROM FLAT TO FLAT WHICH WERE EFFEC TED IN THE SAME PERIOD BUT ALL THE SALE RATES IN ALL CASES WERE ABOVE THE READY R ECKNOR RATES. MOREOVER, AS THE RECORDS BEFORE US REVEAL THAT NO INCRIMINATING EVID ENCE WAS FOUND DURING THE COURSE OF SURVEY PROCEEDINGS WHICH CORROBORATED THE SELLING OF FLATS AT LOWER RATE THAT WHAT HAS BEEN STATED IN THE BOOKS OF ACCO UNTS COULD LEAD TO THE PRESUMPTION THAT ASSESSEE HAS RECEIVED MONEY IN THE SALE OF FLATS. THUS, UNDER THESE CIRCUMSTANCES, WE FIND THAT THE DEPARTMENT HA S NO EVIDENCE IN ITS POSSESSION TO SHOW THAT THE ADDITION AS HAS BEEN CA LCULATED AND MADE BY THE AO OF RS.68,23,300/- IN RESPECT OF VARIED SALE RAT ES ARE UNDERSTATED. THUS WE DO NOT FIND ANY FAULT IN THE ORDER OF THE LD. CIT(A ) . MOREOVER, THE CASE OF THE ASSESSEE IS ALSO SUPPORTED BY THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO AND ANOTHER (SUPRA) I N WHICH THE APEX COURT HAS HELD THAT PROVISIONS OF SUB SECTION (2) OF SECT ION 52 OF THE ACT CAN BE INVOKED ONLY WHERE THE CONSIDERATION FOR TRANSFER O F CAPITAL ASSETS HAS BEEN UNDERSTATED BY THE ASSESSEE AND THE BURDEN OF PROVI NG THE UNDERSTATEMENT OR CONCEALMENT IS ON THE REVENUE. THE SUB SECTION HAS NO APPLICATION IN CASE OF AN HONEST AND BONAFIDE TRANSACTION WHERE CONSIDERAT ION RECEIVED BY THE ASSESSEE HAS BEEN FACTUALLY DISCLOSED AND DECLARED . WE ARE, THEREFORE, OF THE OPINION THAT THE ORDER OF LD. CIT(A) NEEDS TO BE SU STAINED ON THIS ISSUE AND ACCORDINGLY THE APPEAL OF THE REVENUE ON THIS GROUN D IS DISMISSED. 16. THE ISSUE RAISED IN GROUND NO.3 IS AS REGARDS D ELETION OF ADDITION OF RS.50 LAKHS BY LD. CIT(A) AS MADE BY THE AO UNDER S ECTION 68 OF THE ACT ON ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 13 THE GROUND THAT THERE WAS NO CASH BALANCE IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE. 17. THE FACTS IN BRIEF ARE THAT THE AO NOTICED FROM THE FORM NO.3CB OF TAX AUDIT REPORT OF THE ASSESSEE AS SUBMITTED THAT DURI NG THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS PAID A SUM OF RS.50 LAKHS CASH TO THE OFFICE OF THE INCOME TAX DEPARTMENT AND SAME HAS BEEN SHOWN A S MISCELLANEOUS EXPENDITURE UNDER THE HEAD CURRENT ASSETS. ACCORDI NGLY, THE LD. A.R. WAS ASKED VIDE ORDER SHEET ENTRY DATED 18.03.13 TO SUBM IT CASH FLOW AND FUND FLOW FROM 01.02.10 TO 31.03.10 TO PROVE THE PAYMENT OF R S.50 LAKHS WHICH WAS REPORTED IN FORM NO.3CB WHICH WAS DULY SUBMITTED BY THE LD. A.R.. THE AO OBSERVED THAT FROM THE SAID DETAILS SUBMITTED BY TH E ASSESSEE THAT WAS NO ENTRY OF RS.50 LAKHS APPEARING IN THE DETAILS FILED AND ACCORDINGLY THE AO ADDED THE SAID AMOUNT AS UNACCOUNTED CASH CREDIT UNDER SE CTION 68 OF THE INCOME TAX ACT. 18. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DE LETED THE ADDITION AFTER CONSIDERING THE VARIOUS CONTENTIONS OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: 28. THE ADDITION MADE BY THE ASSESSING OFFICER IS ENTIRELY OUT OF PLACE. THE AMOUNT UNDER CONSIDERATION IS NOT AN INCOMING BUT A N OUTGOING. IT WAS THEREFORE NOT A CASE OF CASH CREDIT BUT OF EXPENDITURE. SINCE THE AMOUNT WAS UNADJUSTED DEBIT BALANCE, IT WAS REFLECTED UNDER THE HEAD 'CUR RENT ASSETS. COPY OF BALANCE SHEET AND PROFIT & LOSS ACCOUNT IS ENCLOSED AT PAGE NOS 150 TO 173 OF THE PAPERBOOK. THE AMOUNT OF RS. 50 LACS, PAID BY WAY OF BRIBE WAS NOT CLAIMED AS DEDUCTIBLE EXPENDITURE BY DEBITING PROFIT AND LOSS ACCOUNT AND THEREFORE THERE IS NO SCOPE OF DISALLOWANCE. THE AMOUNT OF RS . 50 LACS WAS PAID ON DIFFERENT DATES AS UNDER: SR. NO. DATE AMOUNT (RS.) 01. 22/02/2010 10,00,000.00/- 02. 24/02/2010 10,00,000.00/- 03. 02/03/2010 15,00,000.00/- 04. 08/03/2010 15,00,000.00/- TOTAL 50,00,000.00/- ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 14 29. THE PAYMENT WAS MADE FROM OUT OF THE CASH BALAN CE LYING IN THE BOOKS. COPY OF CASH BOOK OF THE FIRM IS ENCLOSED AT PAGE NOS 174 OF THE PAPERBOOK. THE CASH BALANCE WAS BUILT UP ON THE BASIS OF ADVANCES MADE BY THE PARTNERS. THE APPELLANT AS ALS O THE PARTNERS HAS NOT RAISED ANY LOANS FROM ANYONE FOR BUILDING UP THE CA SH BALANCE OUT OF WHICH PAYMENT WAS MADE. IT IS THEREFORE ABSOLUTELY CLEAR THAT THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION OF LIABILITY IN RESPECT O F THE PAYMENT OF RS. 50 LACS MADE. FURTHER, NO LOANS HAVE BEEN RAISED TO BUILT UP THE CASH BALANCE TO ENABLE THE PAYMENT. IN THE CIRCUMSTANCES THERE IS ABSOLUTELY NO CASE FOR THE IMPUGNED ADDITION OF RS. 50 LACS AND THE SAME REQUIRES TO BE DELETED. RELIANCE FOR THIS IS P LACED ON ORDER OF HON'BLE TRIBUNAL MUMBAI BENCH IN THE CASE OF ITO VS M/S GROWEL ENERGY CO LTD REPORTED AT 33 ITR (TRIBUNAL) 1 (PAGE NO 279 TO 293 OF THE PAPERBOOK). THE RELEVANT EXTRACT IS REPRODUCED BELOW. 'THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING, BUILDING AND IMPLEMENTING HYDROELECTRIC PROJECTS ON BUILD-OW N-OPERATE BASIS. FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YE AR 2007-08, UNDER THE HEAD 'CAPITAL WORK-IN- PROGRESS' THE ASSESSEE S HOWED GROSS EXPENDITURE ON ACCOUNT OF PROFESSIONAL FEES PAID. THE ASSESSING OFFICER TREATED IT AS EXPENDITURE ON ACCOUNT OF PRO FESSIONAL FEES PAID. THE ASSESSING OFFICER TREATED IT AS UNEX PLAINED EXPENDITURE WITHIN THE MEANING OF SECTION 69C OF TH E INCOME- TAX ACT, 1961 AND HELD THAT MERELY BECAUSE TAX WAS DEDUCTED AT SOURCE ON THE PAYMENT IT DID NOT AUTOMATICALLY LEAD TO JUSTIFICATION OF THE PURPOSE AND THE ASSESSEE HAD T O ESTABLISH THE PURPOSE, GENUINENESS AND BUSINESS EXPEDIENCY OF SUCH EXPENDITURE. THE COMMISSIONER (APPEALS) HELD THAT T HE ASSESSEE EXPLAINED THE SOURCE OF THE EXPENDITURE AN D THE CASE FELL OUTSIDE THE AMBIT OF SECTION 69C OF THE ACT. ON APP EAL: HELD, DISMISSING THE APPEAL, THAT THE ASSESSING JAS WRONGLY APPLIED SECTION 69C OF THE ACT. THE COMMISSIONER (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION. ALSO, NO MATERIAL WAS PLACED TO SHOW UNDER WHICH PROVISION OF LAW THE ADDITION COULD BE MADE W HEN IT WAS NOT CLAIMED AS BUSINESS EXPENDITURE BUT WAS ADDED TO TH E CAPITAL WORK- IN-PROGRESS. 19. THE LD. D.R. ARGUED THAT THE ADDITION OF RS.50 LAKHS WAS RIGHTLY MADE BY THE AO ON THE BASIS OF TAX AUDIT REPORT IN FORM NO.3CB WHICH WAS FURTHER FORTIFIED BY THE DETAILS FILED BY THE ASSESSEE WHI CH CONTAINED NO ENTRY OF RS.50 LAKHS. THE LD. DR ARGUED THAT THE CIT(A) WRON GLY DELETED THE ADDITION MADE BY THE AO BY ACCEPTING THE BREAK OF THE AMOUNT PAID. FINALLY THE LD. ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 15 D.R. PRAYED THAT THE ORDER OF THE LD. CIT(A) IS WRO NG AND REQUIRED TO BE REVERSED. 20. THE LD. A.R., PER CONTRA, SUBMITTED BEFORE THE BENCH THAT IT IS STATED IN FORM NO.3CB THAT RS.50 LAKHS WAS PAID TO THE OFFICE OF THE INCOME TAX DEPARTMENT WHICH HAS BEEN SHOWN UNDER THE HEAD MISC ELLANEOUS EXPENDITURE CLASSIFIED UNDER ASSETS IN THE BALANCE SHEET OF THE ASSESSEE. THE LD. A.R. ALSO SUBMITTED THAT THE SAID AMOUNT REPRESENTED THE OUTF LOW FROM THE BOOKS OF THE COMPANY AND NOT INCOME, THEREFORE, IT WAS NOT A CAS H CREDIT AS HAS BEEN OBSERVED BY THE AO AND THUS THE FINDING OF THE AO W AS TOTALLY OUT OF PLACE AND ERRONEOUS. THE LD. A.R. SUBMITTED THAT RS.50 LAKHS WAS PAID ON 4 DATES NAMELY RS.10 LAKHS ON 20.02.10, RS.10 LAKHS ON 24.0 2.10, RS.15 LAKHS ON 02.03.10 AND RS.15 LAKHS ON 08.03.10. THE LD. A.R. WHILE REFERRING TO THE CLASSIFICATION OF THE AMOUNT OF RS.50 LAKHS IN THE CASH BOOK SUBMITTED THAT IT WAS SHOWN UNDER THE HEAD MISCELLANEOUS EXPENDITURE WHICH WAS FURTHER CLASSIFIED UNDER THE CURRENT ASSETS IN THE BALANCE SHEET AND WAS CHARGED TO THE PROFIT AND LOSS ACCOUNT. THE LD. A.R. SUBMITTED TH AT THE ASSESSEE HAS FILED ALL THESE EVIDENCES BEFORE THE LD. CIT(A) UNDER RULE 46 A . IT WAS ALSO STATED THAT NO LOAN WAS RAISED TO BUILD UP THE CASH BALANCE TO ENABLE THE PAYMENT. THE LD. A.R. ALSO STATED THAT THE ASSESSEE HAS NOT CLA IMED ANY DEDUCTION OF THE SAID AMOUNT OF RS.50 LAKHS IN THE PROFIT AND LOSS A CCOUNT, THEREFORE NO ADDITION COULD BE MADE IN RESPECT OF RS.50 LAKHS WHICH WAS R IGHTLY DELETED BY THE LD. CIT(A). THE LD. A.R. RELIED UPON THE DECISION OF T RIBUNAL IN THE CASE OF ITO VS. M/S GROWEL ENERGY CO LTD REPORTED AT 33 ITR (TR IBUNAL) 1. THE LD. A.R. ALSO SUBMITTED BEFORE THE BENCH THAT THE FINDINGS O F THE AO THAT THERE WAS NO CASH BALANCE IN THE BOOKS OF ACCOUNTS WAS FACTUALLY WRONG AND INCORRECT. THE LD. A.R. SUBMITTED THAT THE LD. CIT(A) AFTER CALLIN G FOR A REMAND REPORT ON THE ADDITIONAL EVIDENCES FROM THE AO WHEREIN THE AO HAS CONFIRMED THE FACTS AND REQUESTED THE LD. CIT(A) TO DECIDE THE SAME ON MER IT. THE LD. A.R. PRAYED ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 16 BEFORE THE BENCH THAT IN VIEW OF THESE FACTS AND TH E DECISION OF THE TRIBUNAL, THE APPEAL OF THE REVENUE ON THIS GROUND SHOULD BE DISMISSED. 21. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT IN THIS CASE THE ASSESSEE HAS PAID RS. 50 LAKHS TO THE OFFICIALS OF THE INCOME TAX DEPARTAMENT WHICH WAS SHOWN AS MISCELLAN EOUS EXPENSES UNDER THE HEAD CURRENT ASSETS AND WAS NOT CHARGED TO THE PROFIT AND LOSS ACCOUNT AS EXPENSE. WE ALSO FIND THAT THE SAID AMOUNT HAS BEE N PAID ON 4 DATES OUT OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE EVIDENCES T HEREOF STOOD VERIFIED BY THE LD. CIT(A) WHO AFTER CALLING FOR A REMAND REPORT ON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE FROM THE AO. THE LD CIT(A) RE CORDED FINDING OF THE FACTS THAT THE AMOUNT WAS PAID ON 4 DATES OUT OF CASH BOO K OF THE ASSESSEE AND ADDITION AS MADE BY THE AO UNDER SECTION 68 WAS WRO NG. IN OUR CONSIDERED VIEW, THE LD. CIT(A) HAS PASSED VERY SPEAKING ORDER WHICH DOES NOT REQUIRE INFERENCE AT OUR END. MOREOVER, THE CASE OF THE AS SESSEE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF ITO VS. M/S GROWEL ENERGY CO LTD. (SUPRA) WHEREIN IT HAS BEEN H ELD THAT NO ADDITION COULD BE MADE WHERE THE ASSESSEE HAS NOT CLAIMED THE SAID AMOUNT OF ADDITION AS BUSINESS EXPENDITURE WHICH WAS ADDED TO CAPITAL WOR K IN PROGRESS.ACCORDINLY THE GROUND RAISED BY THE REVENUE IS DISMISSED. 22. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.2018. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 21.03.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NO.1834/M/2016 M/S. SAI ANAND CONSTRUCTION 17 THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.