OM DEVELOPERS, NAVI MUMBAI V. DCIT 28(2), NAVI MUMBAI

ITA 1837/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5590 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Bonafide belief; Period of limitation; Fair market value; Valuation report; Retraction; Documents seized; Reassessment proceedings
• Section: 143(3); 133(6); 13; 22; 153C; 148; 132; 12; 144

Judgement Text

ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER I TA NO. 1837/MUM/2018 (ASSESSMENT YEAR: 2008 - 09) M/S OM DEVELOPERS OFFICE NO. 14, MAHAVIR CENTER, SECTOR 17, VASHI, NAVI MUMBAI 400 705 PAN NO: AAAFO9862A VS. DCIT - 28(2) , 4 TH FLOOR, BLDG, ROOM NO. 6, MUMBAI (APPELL ANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ HARIT , A.R RESPONDENT BY : SHRI MANOJ KUMAR , D.R. DATE OF HEARING : 24 .09 .2020 DATE OF PRONOUNCEMENT : 06 . 10 .2020 O R D E R PER RAVISH SOOD , J.M : THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 26, MUMBAI, DATED 20.12.2017, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 21.03.2016. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: ON THE CIRCUMSTANCES OF THE CASE, 1. THE LD. CIT(A) HAS ERRED IN AGREEING TO A.OS HOLDING THAT THE APPELLANT FIRM IS IN RECEIPT OF CASH OF RS.5,94,96,000/ - FROM M/S PATHIK CONSTRUCTIONS AND THEREBY HAS ERRED IN CONFIRMING THE ACTION OF A.O OF TAXING ALLEGED UNDISCLOSED INCOME OF RS.5,94,96,000/ - IN THE HANDS OF THE APP ELLANT. 2. THE LD. CIT(A) HAS ALSO ERRED IN CONFIRMING THE ACTION OF A.O OF NOT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GRANTING THE OPPORTUNITY OF CROSS EXAMINATION TO THE APPELLANT. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, SUPPLEMENT, ALTER AND/OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. FURTHER, THE ASSESSEE HAS ALSO FILED BEFORE US REVISED ADDITIONAL GROUND S OF APPEAL , AS UNDER: ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 2 (A) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE REASONS RECORDED BY THE ASSESSING OFFICER WERE SUFFICIENT FOR FORMING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, OR, THE ASSESSING OFFICER EXCLUDED / SUPPRESSED MATERIAL FACTS, THEREBY VITIATING THE MANDATE OF PROVISO TO SECTION 147 OF THE INCOME TAX ACT, 1961, AND, HENCE, THE ENTIRE FOUNDATION OF RE - ASSESSMENT IS VITIATED AND ALL PROCEEDINGS ARE BAD IN LAW (B) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, NOTICE ISSUED UNDER SECTION 148 DATED 25 /03/2015 IS VOID AB - INITIO, NON - EST AND IS WITHOUT VALID JURISDICTION AND AUTHORITY OF LAW AND IT MAKES ALL SUBSEQUENT PROCEEDINGS INCLUDING ORDER PASSED BY LEARNED ASSESSING OFFICER AND IMPUGNED ORDER PASSED BY LD. CIT APPEAL (26) BAD IN LAW, VOID AB - INITIO AND NON - EST; (C) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSMENT ORDER DATED 21/03/2016 ISSUED BY THE LD. AO IS BAD IN LAW FOR BEING IN FLAGRANT VIOLATION OF THE PROVISO U/S 147 OF THE INCOME TAX ACT, 1961; (D) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, IT WAS BAD IN LAW TO REOPEN ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 BY PLACING HEAVY RELIANCE ONLY ON A HANDWRITTEN CHIT OF PAPER WHOSE AUTHOR IS UNKNOWN AND WHICH DID NOT EVEN DISCLOSE THE NAME OF THE APPELLANT? (E) WHETHER THE IMPUGN ED ORDERS SUFFER FROM A JURISDICTIONAL ERROR IN AS MUCH AS THEY HAVE PROCEEDED TO RENDER A FINDING ON TITLE, THAT TOO, ERRONEOUS; AND, HAVE FURTHER PROCEEDED ON THE ASSUMPTION THAT THE APPELLANT WAS THE OWNER OF THE PROPERTY NO. 31, SECTOR 47 ADMEASURING 5 549.59 SQ. MTRS. SITUATED AT DRONAGIRI, TALUKA URAN, DISRICT RAIGAD AS ON THE DATE OF SALE OF THIS PROPERTY TO M/S PATHIK CONSTRUCTION ON 23 RD APRIL 2007. MORE SO, WHEN THE AGREEMENT TO TRANSFER AND ASSIGN DATED 15 TH OCTOBER 2006 [ MOU ] ENTERED INTO BETWE EN JAY GANESH CO - OPERATTVE HOUSING SOCIETY LTD. AND THE APPELLANT WAS STAMPED ON A RS. 100 STAMP PAPER AND WAS UNREGISTERED THEREBY NOT EFFECTING ANY TRANSFER OF PROPERTY IN FAVOR OF THE APPELLANT? (F) WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER PASSED BY THE DY.CIT O N 21 ST MARCH 2016 SUFFERS FROM A PATENT ERROR IN AS MUCH AS IT TAKES A DIRECTLY CONTRARY VIEW DESPITE SPECIFICALLY TAKING NOTE THE FINDINGS OF THIS HON'BLE TRIBUNAL ORDER NO. ITA 1498&1499/MUM/2012 DAT ED 13 TH FEBRUARY 2015 WHICH CATEGORICALLY RECORDS THE RECEIPT OF CASH OF RS. 5,94,96,000/ - (RUPEES FIVE CRORES NINETY FOUR LACS NINETY SIX THOUSAND ONLY) BY THE SAID SOCIETY? (G) WHETHER THE IMPUGNED ORDER PASSED BY THE CIT(APPEALS) ON 20TH DECEMBER 2017 SUFFERS FROM A PATENT ERROR IN AS MUCH AS IT FAILS TO CONSIDER THE FACT THAT THE CASH COMPONENT OF RS. 5,94,96,000/ - (RUPEES FIVE CRORES NINETY FOUR LACS NINETY SIX THOUSAND ONLY) HAS BEEN TA XED IN THE HANDS OF JAI GANESH C HS WHICH HAS BEEN CONFIRMED BY THE CIT(APPEALS) AND THAT FURTHER APPEAL BEFORE THIS HON'BLE TRIBUNAL IS PENDING, THEREFORE, IT IS IMPERMISSIBLE AND BAD IN LAW TO TAX THE VERY SAME AMOUNT ALSO IN THE HAND OF THE APPELLANT? (H) WHETHER IN THE LIGHT OF THE F ACT THAT THE VALUATION REPORT DATED 09/05/2019 DETERMINING THE FAIR MARKET VALUE OF THE SAID PLOT 'AS ON 13/10/2006' BY MR. S. B. CHINCHGHARE, VALUATION OFFICER, INCOME TAX DEPARTMENT THANE, AT RS.1,94,23,600/ - (RUPEES ONE CRORE NINETY FOUR LACS TWENTY THR EE THOUSAND SIX HUNDRED ONLY) RENDERS THE IMPUGNED ORDER PASSED BY THE CIT(APPEALS) ON 20TH DECEMBER 2017 OTIOSE / PERVERSE? (I) WHETHER THE IMPUGNED ORDERS SUFFER FROM PERVERSITY BY HOLDING THAT ILLITERATE AND MEN OF NO MEANS ARE INCOMPETENT TO CONTRACT AND WHETHER SUCH FINDING IS SUFFICIENT AND REASONABLE ENOUGH TO DISBELIEVE AND DISREGARD HONBLE TRIBUNALS FINDING OF FACTS OF THE SOCIETY MEMBERS HAVING RECEIVED THE CASH COMPONENT OF RS.5,94,96,000/ - (RUPEES FIVE CRORES NINETY FOUR LACS NINETY SIX THOUSAND ONLY)? (J) WHETHER THE LOWER AUTHORITIES FAILED TO CONSIDER THAT THE ENTIRE PROCEEDINGS AGAINST THE APPELLANT INITIATED ON THE PURPORTED PAYMENT OF CASH BY OR ON BEHALF OF ONE PATHIK CONSTRUCTION IS PURELY BASED ON SUSPICION, SURMISES, ASSUM P TIONS AND CONJECTURES ? 2. BRIEFLY STATED, THE ASSE SSEE FIRM WHICH IS ENGAGED IN THE BUSINESS OF A BUILDER AND DEVELOPER HAD FILED IT S RETURN OF INCOME FOR A . Y 2008 - 09 ON 26.09.2008, DECLARING ITS TOTAL INCOME AT RS.63,16,295/ - . INCOME OF THE ASSESSEE FIRM WAS ORIGINALLY ASSESSED BY THE A.O VIDE HIS ORDER PASSED UNDER ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 3 SEC. 143(3) , DATED 16.12.2010 AT AN AMOUNT OF RS.71,06,560/ - . SUBSEQU ENTLY, INF ORMATION WAS RECEIVED FROM THE ASSESSING OFFICER , PANVEL, WHEREIN IT WAS STATED INTER ALIA THAT IN THE COURSE OF A SEARCH CONDUCTED U/S 132 OF THE ACT O N PATHIK CONSTRUCTION GROUP CERTAIN INCRIMINATING DOCUMENTS PERTAINING TO A LAND DEAL EXECUTED BETWEEN M/S PATHIK CONSTRUCTIONS AND JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. WERE SEIZED. AS PER THE INFORMATION, M/S PATHIK CONSTRUCTION S HAD PURCHASED A PROPERTY SITUATED AT PLOT NO. 31, SECTOR 47, DRONAGIRI, URAN DIST: RAIGAD FROM JAI GANE SH CO - OPERATIVE HOUSING SOCIETY LTD., VIDE A TRIPARTITE AGREEMENT DATED 24.04.2007. AS PER THE AFORESAID INFORMATION , THOUGH THE SALE RECEIPTS AGGREGATING TO RS. 8,16,26,625/ - [RS. 5,94,96,000/ - (CASH RECEIPT) + RS. 2,21,30,625/ - (AGREEMENT VALUE)] WERE BROUGHT TO TAX IN THE HANDS OF JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD., VIDE AN ASSESSMENT ORDER PASSED U/S 144 R.W.S 147, DATED 24.03.2014 , BUT THE RESULTANT DEMAND COULD NOT BE RECOVERE D AS JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. WAS FOUND TO BE NO MORE IN EXISTENCE. ON THE BASIS OF THE INFORMATION RECEIVED, A PERUSAL OF THE AGREEMENT TO SELL REVEALED THAT JAI GANESH C O - OPERATIVE HOUSING SOCIETY LTD. HAD ASSIGNED ALL OF ITS RIGHTS, TITLE, INTEREST AND BENEFITS IN THE PROPERTY IN QUESTION TO M/S OM DEVELOPERS (I.E THE ASSESSEE FIRM) THROUGH THE LATTERS PARTNERS VIZ. (I). MR. PRAMOD D. MORE; AND (II). MR. GAJANAN R. KANAD E. FURTHER, AS PER THE INFORMATION THE WHOLE TRANSACTION WAS EXECUTED BY THE ASSESSEE FIRM IN THE NAME OF JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. , AND THE SALE CONSIDERATION TO THE TUNE OF RS. 2,22,00,000/ - WAS ALSO RECEIVED BY THE ASSESSEE FIRM ON BE HALF OF JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. IN THE BACKDROP OF THE AFORESAID INFORMATION THE CASE OF THE ASSESSEE WAS REOPENED BY THE A.O UNDER SEC. 147 OF THE ACT. IN COMPLIANCE TO THE NOTICE ISSUED UNDER SEC. 148 OF THE ACT, IT WAS REQUESTED BY THE ASSESSEE THAT ITS ORIGINAL RETURN OF INCOME MAY BE TREATED AS A RETURN FILED IN COMPLIANCE TO THE SAID NOTICE. 3. DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS , IT WAS OBSERVED BY THE A.O , THAT BY WAY OF AN AGREEMENT OF ASSIGNMENT - CU M SALE , DATED ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 4 23.04.2007 FOR PLOT NO. 31 , SECTOR 47 ( ADMEASURING 5549.59 SQ. M T RS. ) DRONAGIRI, URAN , DIST: RAIGAD, EXECUTED BETWEEN (I) JA I GANESH CO - OPERATIVE HOUSING SOCIETY LTD, I.E THE LESSEE ; (II). M/S OM DEVELOPER ( ASSESSEE FIRM ), I.E THE ASSIGNOR ; AND (III) M/S PATHIK CONSTRUCTIONS , I.E THE ASSIGNEE, THE LAND WAS TRANSFERRED TO THE ASSIGNEE. AS NOTICED BY THE A.O , THE AFORESAID SALE TRANSACTION WAS RECORDED IN THE ASSESSEE S BOOKS OF ACCOUNT AT AN AMOUNT OF RS. 2,22,00,000/ - . ON A PERU SAL OF THE RECORDS, IT WAS GATHERED BY THE A.O THAT SEARCH PROCEEDINGS WERE CONDUCTED BY THE INVESTIGATION WING, MUMBAI UNDER SEC. 132 OF THE ACT ON 09.02.2009 IN THE CASE OF PATHIK CONSTRUCTION GROUP. IT WAS OBSERVED BY THE A.O , THAT THE DOCUMENTS SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS INCLUD ED A SHEET OF PAPER WITH HANDWRITTEN NOTES , IDENTIFIED AS ANNEXURE O - 2 - P AGE NO.92 (OF THE SEIZED MATERIAL). ON A PERUSAL OF THE SEIZED DOCUMENT, IT WAS NOTICED BY THE A.O THAT THE SAME MADE A MENTION OF CERTAIN PAYMENTS IN RELATION TO A TRANSACTION IN PROPERTY STYLED AS JA I GANESH CHS , VIZ. (I) C HEQUE : RS.2,2 2 ,00,000/ - ; AND (II) C ASH: RS.5,94,96,000/ - . OBSERVING THAT THE ASSESSEE HAD DISCLOSED THE AMOUNT OF SA LE CONSIDERATION OF RS. 2,2 2 ,00,000/ - WHICH WAS RECEIVED VIDE CHEQUE S IN ITS RETURN OF INCOME AND STATEMENTS OF ACCOUNTS FOR THE YEAR UNDER CONSIDERATION , I.E A.Y. 2008 - 09 , THE A.O HELD A CONVICTION THAT THE BALANCE CASH REC EIPT OF RS. 5,94,96,000/ - (SUPRA) REPRESENTED T HE ON - MONEY THAT WAS RECEIVED BY THE ASSESSEE ON SALE OF THE AFORESAID PROPERTY IN QUESTION. IN THE BACKDROP OF HIS AFORESAID CONVICTION , THE A.O CALLED UPON THE ASSESSEE TO PUT FORTH AN EXPLANATION AS TO WHY THE AFORESAID AMOUNT OF R S. 5,94,96,000/ - MAY NOT BE TREATED AS UNDISCLOSED SALE CONSIDERATION IN ITS HANDS . IN REPLY, THE ASSESSEE DENIED OF HAVING RECEIVED ANY SALE CONSIDERATION OVER AND ABOVE WHAT WAS DISCLOSED IN ITS BOOKS OF ACCOUNTS. HOWEVER, THE A.O DID NOT FIND FAVOUR WIT H THE CLAIM OF THE ASSESSEE, AND BEING OF THE VIEW THAT THE AFORESAID NOTING S IN THE SEIZED DOCUMENT VIZ. ANNEXURE O - 2 PAGE 92 REVEALED THE ACTUAL SALE CONSIDERATION THAT WAS RECEIVED BY THE ASSESSEE ON S ALE OF PROPERTY I.E PLOT NO. 31, SECTOR 47 (ADMEASURING 5549.59 SQ. MTRS.) TO M/S PATHIK CONSTRUCTIONS, THEREIN MADE AN ADDITION OF RS. 5,94,00,000/ - AS THE ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 5 UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY, THE INCOME OF THE ASSESSEE FIRM WAS ASSESSED BY THE A.O VIDE HIS ORDER PASSED UNDER SEC. 143(3) R.W.S 147, DATED 21.03.2016 AT AN AMOUNT OF RS. 6,65,06,560/ - . 4. AGGRIEVED, THE ASSESSEE ASSAILED THE ASSESSMENT FRAMED BY THE A.O BEFORE THE CIT(A). IN THE COUR SE OF THE APPELLATE PROCEEDINGS, THE CIT(A) OBSERVED , THAT TWO ISSUES WERE REQUIRED TO BE ADJUDICATED, VIZ. (I) THAT WHO WAS THE EFFECTIVE OWNER OF THE PROPERTY I.E. PLOT NO. 31, SECTOR 47 ( ADMEASURING 5549.59 SQ. M T RS. ) S ITUATED AT DRONAGIRI , TALUKA, URAN, DISTRICT : RAIGAD, ON THE DATE OF SALE OF THE SAME TO M/S PATHIK CONSTRUCTION , VIDE AGREEMENT OF ASSIGNMENT - CUM - SALE , DATED 23.04.2007; AND (II) . THAT WHAT WAS THE ACTUAL CONSIDERATION RECEIVED ON SALE OF THE AFORESAID PROPERTY TO M/S PATHIK CONSTRUCTIONS. AFTER NECESSARY DELIBERATIONS , IT WAS OBSERVED BY THE CIT(A) THAT VIDE AN AGREEMENT TO TRANSFER AND ASSIGN, DATED 15.10.2006 THE PROPERTY IN QUESTION I.E PLOT NO. 31, SECTOR 47 ( ADMEASURING 5549.59 SQ. MTRS. ) S ITUATED AT DRONAGIRI, TALUKA, URAN, DISTRICT : RAIGAD WAS ASSIGNED BY JAI GANESH CO - OPERATI VE HOUSING SOCIETY LTD. TO THE ASSESSEE FIRM I.E M/S OM DEVELOPERS FOR A CONSIDERATION OF RS. 2,21,98,360/ - . IT WAS OBSERVED BY THE CIT(A) , THAT THE SAID FACT UAL POSITION WAS ALSO CLEARLY DISCERNIBLE FROM THE RECITALS OF THE A GREEMENT OF A SSIGNMENT - C UM S ALE, DATED 23.04.2007. AS OBSERVED BY THE CIT(A), THE AFORESAID PROPERTY IN QUESTION FORMED PART OF THE O PENING STOCK OF THE ASSESSEE FIRM AS ON 01.04.2007. FURTHER , AS NOTICED BY THE CIT(A), THE ASSESSEE HAD ACCOUNTED FOR THE SALE RECEIPTS OF RS. 2 ,2 2 , 00,000/ - THAT WAS RECEIVED BY CHEQUES IN ITS SALES FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY, IT WAS CONCLUDED BY THE CIT(A) THAT THE ASSESSEE FIRM WAS THE EF FECTIVE OWNER OF THE PROPERTY ON THE DATE OF ITS SALE TO M/S PATHIK CONSTRUCTIONS I.E 23.04.20 07. AS REGARDS THE CLAIM OF THE ASSESSEE THAT IT WAS JUST A PASS THROUGH INTERMEDIARY OR A CONFIRMING PARTY TO THE SALES MADE TO M/S PATHIK CONSTRUCTIONS, THE CIT(A) OBSERV ED , THAT AS THE ASSESSEE WAS THE EFFECTIVE OWNER OF THE PROPERTY IN QUESTION, THEREF ORE, ITS AFORESAID CLAIM DID NOT MERIT ACCEPTANCE. INSOFAR THE SALE CONSIDERATION OF THE PROPERTY IN QUESTION WAS CONCERNED , THE CIT(A) A F TER REFERRING TO THE CONTENTS OF THE ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 6 DOCUMENT I.E ANNEXURE O - 2 - PAGE 92 THAT WAS SEIZED IN THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED U/S 132 FROM THE PREMISES OF M/S PATHIK CONSTRUCTIONS I.E THE BU YER OF THE PROPERTY IN QUESTION OBSERVED, THAT IT WAS EVIDENT FROM THE NOTINGS THAT M/S PATHIK CONSTRUCTIONS HAD PURCHASED THE PROPERTY FROM THE ASSESSEE @ RS. 14,720/ - PER SQ. MTR. (AS MENTIONED IN THE SEIZED DOCUMENT), WHICH WORKED OUT TO AN AMOU NT OF RS. 8,16,96,000/ - [5550 SQ. MTRS X RS. 14,720/ - PER SQ. MTR.]. IT WAS OBSERVED BY THE CIT(A) THAT OUT OF THE TOTAL SALE CONSIDERATION OF RS. 8, 16,96,000/ - THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 2,22,00,000/ - BY CHEQUE S , WHILE FOR THE BALANCE AMOUNT OF RS. 5,94,96,000/ - WAS RECEIVED IN CASH. IN ORDER TO FORTIFY HIS AFORESAID OBSERVATION SUPPORT WAS DRAWN BY THE CIT(A) FROM THE FACT THAT M/S PA THIK CONSTRUCTIONS IN THE COURSE OF ITS ASSESSMENT U/S 153C OF THE ACT, HAD CLAIMED SET OFF OF THE UNACCOUNTED PURCHASE CONSIDERATION OF RS. 5,94,96,000/ - THAT WAS PAID BY IT IN CASH , AS AGAINST THE UNACCOUNTED SALE CONSIDERATION THAT WAS RECEIVED BY IT ON A SUBSEQUENT SALE OF THE PROPERTY IN QUESTION , WHICH WAS ACCEPTED BY THE TRIBUNAL WHILE DISPOSING OFF THE REVENUES APPEAL IN ITS CASE IN ITA NO. 1498 & 1499/MUM/2012, DATED 13.02.2015. AS SUCH, IT WAS OBSERVED BY THE CIT(A) THAT THE ADMISSION ON THE PA RT OF THE PURCHASER I.E M/S PATHIK CONSTRUCTIONS OF HAVING PAID THE AFORESAID AMOUNT OF ON - MONEY FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION FORTIFIED THE FACT UAL POSITION AS COULD BE GATHERED FROM THE SEIZED DOCUMENT I.E ANNEXURE O - 2 - PAGE NO. 92 . F OR THE SAKE OF CLARITY, THE OBSERVATIONS RECORDED BY THE CIT(A) WHILE DISMISSING THE ASSESSEES APPEAL ARE CULLED OUT AS UNDER: 6. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE APPELLANT S SUBMISSIONS. THE PERTINENT ISSUES TO BE DECIDED ARE THE FOLLOWING: (A) THE EFFECTIVE OWNER OF PROPERTY PLOT NO 31, SECTOR - 47 ADMEASURING 5549.59 S Q. METERS SITUATED AT DRONAGIRI, TAL. URAN , DIST. RAIGAD AS ON THE DATE OF SALE OF THIS PROPERTY TO M/S PATHIK CONSTRUCTIONS ON 23.04.2007. (B) THE ACTUAL CONSIDERATION RECEIVED ON ACCOUNT OF SALE OF THE ABOVE MENTIONED PROPERTY TO M/S PATHIK CONSTRUCTIONS. 6.1. REGARDING ISSUE (A), PERUSAL OF INFORMATION AVAILABLE ON RECORDS SHOWS THAT THE SAID PROPERTY STOOD ASSIGNED TO THE APPELLANT, M/S OM DEVELOPERS, BY JAI GANESH CO - OP SOCIETY LTD. FOR A SALE CONSIDERATION OF RS. 2,21,98,360/ - AS PER AGREEMENT TO TRANSFER AND ASSIGN EXECUTED ON 15.10.2006. THIS FACT HAS ALSO BEEN REITERATED IN THE RECITALS F OR AGREEMENT OF ASSIGNMENT - CUM SALE DATED 23 - 04 - 2007 FOR PLOT NO 31, SECTOR 47 ADMEASURING 5549.59 SQ METERS SITUATED AT ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 7 DRONAGIRI URAN BETWEEN M/S JA I GANESH CO OP SOCIETY LTD.(LESSE E), M/S CM DEVELOPERS(ASSIGNOR ) AND M/S PATHIK CONSTRUCTIONS (ASSIGNEE ) AS BELOW: 7. WHEREAS THE LESSEE JAY GANESH CO - OPERATIVE HOUSING SOCIETY LIMITED VIDE AN AGREEMENT DATED 15TH OCTOBER 2006 ASSIGNED ALL ITS RIGHT, TITLE, INTEREST AND BENEFITS IN RESPECT OF THE SAID PLOT NO. 31 ADMEASURING 5549.59 SQ. MTRS. OF JAI GANESH CO - OPERATIVE HOUSING SOCIETY LIMITED, AT SECTOR - 47, DRONAGIRI, TAL. URAN, DIST. RAIGAD TO M/S. GM DEVELOPERS A PARTNERSHIP FIRM, THROUGH ITS PARTNERS 1) MR. PRAMOD D. MORE AND 2) MR GAJANAND G. KANADE ( HEREINAFTER REFERRED TO AS THE ASS IGNOR) FOR PROPER CONSIDERATION AND HAD UPON RECEIPT OF THE AGREED CON SIDERATION FOR THE SAME, HANDED OVER POSSESSION OF THE PLOT TO THE ASSIGNOR.' 6.2. IT IS ABUNDANTLY CLEAR FROM THE ABOVE THAT THE APPELLANT WAS THE EFFECTIVE OWNER OF THE SAID PROPERTY AS ON THE DATE OF SALE OF THE SAME TO MIS PATHIK CONSTRUCTIONS ON 23.04.2007. THE PROPERTY HAS ALSO BEEN SHOWN BY THE APPELLANT AS PART OF ITS OPENING STOCK AS ON 0.1.04.2007 AND THE CHEQUE RECEIPTS OF RS. 2,22,00,000/ - ON ACCOUNT OF SALE OF THE PROPERTY HAS ALSO BEEN REFLECTED IN ITS PROFIT AND LOSS ACCOUNT. THE TOTAL SALES CONSIDERATION RECEIVED INCLUDING THE CASH COMPONENT THEREFORE, HAS TO BE TAXED IN THE HANDS OF THE APPELLANT. 6.3. THE APPELLANT HAS SUBMITTED THAT THE CHEQUE AS WELL AS THE CASH COMPONENT OF RS. 5,94,96,00 0/ - HAS BEEN TAXED IN THE HANDS OF JAI GANESH CO - OP SOCIETY LTD. WHICH HAS BEEN CONFIRMED BY THE CIT(A) AGAINST WHICH FURTHER APPEAL WAS PENDING BEFORE THE HON' BLE IT AT. THE APPELL ANT HAS, THEREFORE, CONTENDED THAT THE CASH COMPONENT OF RS. 5,94,96,000/ - IN ANY CASE CANNOT BE TAXED IN ITS HANDS AS IT WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME. THE APPELLANTS CONTENTION IS NOT TENABLE IN VIEW OF THE UNDISP UTED FACT THAT THE APPELLANT WAS THE OWNER OF THE PROPERTY AS ON THE DATE OF SALE OF THE SAID PROPERTY TO M/S PATHIK CONSTRUCTIONS ON 23.04.2007. THE FACT OF THE CASH COMPONENT OF SALES CONSIDERATION BEING TAXED IN THE HANDS OF JAI GANESH CO - OP SOCIETY LTD. FOR WHATEVER REASON DOES NOT ABSOLVE THE APPELLANT OF ITS RIGHTFUL LIABILITY. 6.4. THE APPELLANT HAS ALSO SUBMITTED THAT THE ADDITION HAD BEEN MADE ON THE BASIS OF SHEET OF PAPER SEIZED UNDER ANNEXURE 0 - 2 AT THE PREMISES OF M/S PATHIK CONSTRUCTIONS D URING SEARCH WHICH HAS BEEN REPRODUCED ON PAGE 3 OF THE ASSESSMENT ORDER. I HAT IT WAS CLEARLY MENTIONED ON THE SAID PAPER THAT IF AT ALL, THE AMOUNTS HAVE BEEN PAID, THE SAME HAVE BEEN PAID TO MEMBERS OF JAI GANESH SOCIETY AND THAT JAI GANESH SOCIETY AND OM DEVELOPERS WERE JUST PASSING THROUGH INTERMEDIARIES. THAT THE APPELLANT FIRM RECEIVED THE CONSIDERATION OF RS. 2.22 CRORES AS CONFIRMING PARTY AND IN TURN PAID THE SAME TO MEMBERS OF THE SOCIETY. HENCE, THE SALE CONSIDERATION HAS BEEN REFLECTED AS BUSIN ESS INCOME IN THE P/L A/C OF THE APPELLANT FIRM FOR THE YEAR ENDED ON 31.03.2008 AND THE PAYMENTS TO THESE MEMBERS HAS BEEN REFLECTED IN THE OPENING STOCK AS ON 01.04.2007. THIS CONTENTION OF THE APPELLANT IS ALSO NOT TENABLE IN VIEW OF THE FOLLOWING: I. THE APPELLANT WAS NOT A PASS THROUGH INTERMEDIARY OR A CONFIRMING PARTY TO THE SALES MADE TO M/S PATHIK CONSTRUCTIONS. THE APPELLANT WAS THE ASSIGNOR AS IT WAS THE OWNER OF THE PROPERTY BEING TRANSFERRED AS DISCUSSED IN PARA 6.1 ABOVE. II. THE APPELLANT HAD ALREADY MADE PAYMENTS FOR PURCHASE OF THE PROPERTY AT THE TIME OF EXECUTING AGREEMENT TO TRANSFER AND ASSIGN' ENTERED INTO WITH JAI GANESH CO - OP SOCIETY LTD. ON 15.10.2006 FOR A CONSIDERATION OF RS. 2,21,98,360/ - . IT IS AN ABSURD PROPOSIT ION THAT THE APPELLANT RECEIVED THE CONSIDERATION OF RS. 2.22 CRORES AS CONFIRMING PARTY AND IN TURN PAID THE SAME TO MEMBERS OF THE SOCIETY WHEN THE SAID CONSIDERATION HAS BEEN RECEIVED MUCH LATER AFTER 15.10.2016. III. THE NOTINGS IN THE SHEET OF PAPER SEIZE D UNDER ANNEXURE 0 - 2 AT THE PREMISES OF M/S PATHIK CONSTRUCTIONS HAVE TO BE INTERPRETED CONSIDERING THE SURROUNDING FACTS AND CIRCUMSTANCES OF THE CASE. THE NOTINGS MENTION PAYMENT DETAILS IN RESPECT OF PLOT NO.31, SECTOR - 47, DRONAGIRI WHICH IS THE PROPERT Y SOLD BY THE APPELLANT TO M/S PATHIK C ONSTRUCTIONS. THOUGH THE APPELLA NT'S NAME IS NOT MENTIONED T HEREIN , THE LOGICAL CONCLUSION TO BE DRAWN IS THAT THE PAYMENTS NOTED THEREIN PERTAIN TO THE APPELLANT AND MORE SO AS THE CHEQUE COMPONENT OF THE PAYMENT MAT CHES WITH THE CONSIDERATION RECEIVED SHOWN BY THE APPELLANT. ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 8 6.5. AS REGARDS THE ACTUAL CONSIDERATION RECEIVED ON ACCOUNT OF SALE O F THE AFOREMENTIONED PROPERTY TO M/S PATHIK CONSTRUCTIONS, IT WOULD BE RELEVANT TO CONSIDER THE NOTINGS IN THE SHEET OF PAPE R SEIZED UNDER ANNEXURE 0 - 2 AT THE PREMISES OF M/S PATHIK CONSTRUCTIONS. FOR THE SAKE OF EASE AND CLARITY, THE LEGIBLE CONTENTS WRITTEN ON THE SHEET ARE BEING TYPED OUT BELOW: ANNEXURE 0 - 2 DCO FILE NO - 5550 SQM PLOT NO.3 1, SECT - 47, DRONAGIRI RATE 14720/ - SQM PAYMENT DETAILS PAID TO JALI GANESH CO - OP. MEMBERS (A) CHEQUE 2,22,00,000/ - (B) CA 5,94,96,000/ - SOLD TO ------ (NOT LEGIBLE) - RATE 25600/ - SQMT 6.6. IT IS EVIDENT FROM THE ABOVE NOTINGS THAT M/S PATHIK CONSTRUCTIONS HAD PURCHASED THE PROPERTY FROM THE APPELLANT @ OF RS. 14,720/ - PER SQ. MTR. WHICH WORKS OUT TO RS.8,16,96,000/ - OUT OF WHICH RS. 222,00,000/ - WAS PAI D BY CHEQUE AND RS. 5,94,96,000/ - WAS PAID IN CASH. THE WORKING IS VERY PRECISE AND THE AMOUNTS MENTIONED ARE NOT ESTIMATED FIGURES. THIS SHEET WAS FOUND DURING THE COURSE OF SEARCH U/S 132 OF THE ACT FROM THE PREMISES OF M/S PATHIK CONSTRUCTIONS WHO WAS THE BUYER OF THE PROPERTY SOLD BY THE APPELLANT. IT IS THEREFORE, TO BE CONSTRUED THAT THE NOTINGS IN THE SEIZED SH EET REPRESENT THE TRUE STATE OF AFFAIRS OF THE TRANSACTION. BOTH THE CHEQUE AND CASH PAYMENTS HAVE BEEN MENTIONED IN THE SAME SHEET. THE APPELLANT HAS ACCOUNTED FOR THE CHEQUE COMPONENT IN ITS BOOKS OF ACCOUNT. THE RULES OF EVIDENCE/APPRECIATION OF EVIDENC E AS ELABORATED BY THE VARIOUS COURTS STIPULATES THAT THE EVIDENTIARY DOCUMENT HAS TO BE READ CONSISTENTLY AND A HOLISTIC VIEW TAKEN. IT IS ALSO PERTINENT TO MENTION HERE THAT M/S PATHIK CONSTRUCTIONS HAD CLAIME D THIS AMOUNT OF RS.5,94,96,000/ - PAID IN CAS H TO BE SET OFF AGAINST ITS UNACCOUNTED CASH RECEIPTS WHICH HAS BEEN ALLOWED BY THE HON'BLE ITAT, MUMBAI. THIS CLAIM MADE BY M/S PATHIK CONSTRUCTIONS IS AN ADMISSION OF THE FACT THAT IT HAD PAID RS.5,94,96,000/ - IN CASH TO THE APPELLANT THOUGH IN RESPONSE TO NOTICE ISSUED U/S 133(6) ISSUED BY THE AG IT HAD CONFIRMED ONLY THE CHEQUE PAYMENT OF RS. 2,22,00,000/ - AND REMAINED SILENT ON THE ISSUE OF CASH PAYMENT OF RS.5,94,96,000/ - . IN ANY SALE/PURCHASE TRANSACTION, THE CONSIDERATION INVOLVED WOULD BE THE SAME FOR BOTH THE SELLER AND THE BUYER. 6.7. TO SUM UP, IN VIEW OF THE DISCUSSIONS AT PARAS 6.1 TO 6.6 ABOVE, I AM OF THE CONSIDERED OPINION THAT THE CASH COMPONENT OF RS. 5,94 , 96,000/ - OF THE SALES CONSIDERATION ON ACCOUNT OF SALE OF PLOT NO.31, SECT - 47, DRONAGIRI HAS TO BE TAXED IN THE HANDS OF THE APPELLANT. THE ADDITION MADE BY THE ASSESSING OFFICER IS SUSTAINED. THE APPELLANT'S GROUND OF APPEAL ON THIS ISSUE IS DISMISSED. 7. AS REGARDS THE APPEL LANT'S CONTENTION THAT NO OPPORTUNITY WAS GIVEN BY THE A.O TO CROSS EXAMINE THE PARTY, I FIND THAT THE AO HAD ISSUED SHOW CAUSE NOTICE TO THE APPELLANT TO EXPLAIN AS TO WHY THE AMOUNT OF RS. 5,94,96,000/ - NOTED IN THE SEIZED DOCUMENT SHOULD NOT BE TREATED TO HAVE BEEN RECEIVED BY THE APPELLANT. IN RESPONSE, THE APPELLANT HAD SIMPLY STATED THAT THE SALE OF LAND WAS INCLUDED IN THE SALE A/C OF JAI GANESH SOCIETY IN ITS BOOKS AND THAT THE P & L A/C SHOWED THE TRUE PICTURE OF THE SALES AND NO FURTHER PROCEEDS W ERE RECEIVED. THERE IS NOTHING ON RECORD TO INDICATE THAT THE APPELLANT HAD SOUGHT FOR CROSS EXAMINATION OF THE PARTY. NOTHING TO THAT EFFECT HAS BEEN BROUGHT TO MY NOTICE DURING APPELLATE PROCEEDINGS ALSO. I FIND THAT DUE OPPORTUNITY OF BEING HEARD WAS AC CORDED TO THE APPELLANT AND THERE WAS NO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE APPELLANTS GROUND OF APPEAL ON THIS ISSUE IS DISMISSED. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL. BEFORE US, THE ASSESSEE HAS ASSAILED THE ADDITION MADE BY THE A.O ON MERITS, AS WELL AS CHALLENGED THE VALIDITY OF THE JURISDICTION ASSUMED BY THE A.O FOR REOPENING OF ITS CASE U/S 147 OF THE ACT. WE SHALL FIRST DEAL WITH THE CHALLENGE THROWN BY THE ASSESSEE TO THE V ALIDITY OF THE ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 9 JURISDICTION ASSUMED BY THE A.O FOR REOPENING OF ITS CASE UNDER SEC. 147 OF THE ACT . AS OBSERVED BY US HEREINABOVE, THE ASSESSEE HAS ASSAILED THE VALIDITY OF THE JURISDICTION ASSUMED BY THE A.O ON MULTIPLE GROUNDS , WHICH ARE HEREINAFTER BEIN G DEALT WITH BY US. 6. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESS EE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED , THAT AS ON THE DATE O N WHICH THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC.147 I.E ON 12 .03.2015, THE VERY BASIS FOR SUCH REOPENING FORMED A SUBJECT MATTER OF AN APPEAL THAT WAS FILED BY JA I GANESH COOPERATIVE S OCIETY LTD. , AND WAS PENDING ADJUDICATION AT THE RELEVANT POINT OF TIME . ON THE BASIS OF HIS AFORESAID CONTENTION, IT WAS THE CLAIM OF THE LD. A.R THAT NOW WHEN ON THE DATE ON WHICH THE CASE OF THE ASSESSEE WAS REOPENED I.E ON 12.03.2015 , THE MATTER FORMING THE VERY BASIS FOR SUCH REOPENING WAS A SUBJECT MATTER OF A N APPEAL FILED BY JAI GANESH COOPERATIVE SOCIETY LTD., THE A.O , THEREFORE , AS PER THE 3 RD PROVISO TO SEC. 147 WAS DIVESTED OF HIS JURISDICTION TO REASSESS THE INCOME INVOLVING SUCH MATTER IN THE HANDS OF THE ASSESSEE. IN ORDER TO BUTTRESS HIS AFORESAID CONTENTION THE LD. A.R TOOK US THROUGH THE 3 RD PROVISO TO SEC. 147 OF THE ACT . THE LD. A.R DRAWING SUPPORT FROM THE 3 RD PROVISO TO SEC. 147 SUBMITTED , THAT AN A.O IS DIVESTED OF HIS JURISDICTION TO ASSESS OR REASSESS ANY SUCH INCOME INVOLVING MATTERS WHICH ON THE SAID DATE ARE SUBJECT MATTER OF ANY APPEAL , REFERENCE OR REVISION . 6.1 WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFORESAID CLAIM OF THE LD. A.R AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE SAME. BEFORE ADVERTING ANY FURTHER , WE THIN K IT APT TO REPRODUCE THE 3 RD PROVISO TO SEC. 147, WHICH AS WAS AVAILABLE ON THE STATUTE DURING THE YEAR UNDER CONSIDERATION , READ AS UNDER : [PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASSES OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL, REFERENCE OR REVISIO N, WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSMENT.] ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 10 IN OUR CONSIDERED VIEW, THE AFORESAID 3 RD PROVISO TO SEC. 147 PROVIDES FOR AN EMBARGO ON THE A.O IN ASSESSING OR REASSESSING THE INCOME OF AN ASSESSEE , INVOLVING MATTER S WHICH ARE SUBJECT MATTER OF AN APPEAL, REFERENCE OR REVISION IN THE CASE OF THE ASSESSEE. IN OTHER WORDS, THE RESTRICTION PROVIDED IN THE 3 RD PROVISO TO SEC. 147 IS QUA THE ASSESSING OR REASSESSING OF INCOME OF AN ASSESSEE INVOLVING MATTERS WHICH ARE SUBJECT MATTER OF AN APPEAL, REFERENCE OR REVISION IN ITS CASE . W E ARE UNABLE TO AGREE WITH THE CLAIM OF THE LD. A.R , THAT PENDENCY OF AN APPEAL, REFERENCE OR REVISION ON A PARTICULAR MATTER IN THE CASE OF AN ASSESSEE WOULD PRECLUDE THE REVENUE FROM REOPENING THE CASE OF A THIRD PARTY. TO SUM UP, THOUGH THE LEGISLATURE IN ALL ITS WISDOM HAD IN ORDER TO AVOID PARALLEL PROCEEDINGS CONTEMPLATED A RESTRICTION BY WAY OF A 3 RD PROVISO TO SEC.147, BUT THE SAME , IN OUR CONSIDERED VIE W CANNOT BE STRETCH ED TO THE EXTENT OF READING RESTRICTIONS ON REOPENING THE CASE OF A THIRD PARTY . IN FACT, IF THE 3 RD PROVISO TO SEC. 147 IS CONSTRUED IN THE MANNER IT HAS BEEN PROJECTED BY THE LD. A.R BEFORE US, THE SAME WOULD DISENTITLE THE REVENUE FRO M INITIATING REASSESSMENT PROCEEDINGS IN THE HANDS OF A THIRD PARTY , WITHIN THE PRESCRIBED PERIOD OF LIMITATION, ON THE BASIS OF INFORMATION GATH ERED IN THE CASE OF AN ASSESSEE . WE THUS NOT BEING ABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE AFORESAID CONTENTION SO ADVANCED BY THE LD. A.R, REJECT THE SAME. THE ADDITIONAL GROUND OF APPEAL NO. (C) IS ACCORDINGLY DISMISSED. 7 . WE SHALL NOW ADVERT TO THE CLAIM OF THE LD. A.R THAT THE REASONS RECORDED BY THE A.O , WERE IN SUFFICIENT , FOR ARRIV ING AT A BONAFIDE BELIEF THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IN FACT, THE LD. A.R HA S ASSAILED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS , ON THE GROUND, THAT THE A.O HAD IN THE ABSENCE OF SUFFICIENT MATERIAL WHICH WOUL D HAVE LED HIM TO ARRIVE AT A BONAFIDE BELIEF THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT , INITIATED REASSESSMENT PROCEEDINGS IN ITS HANDS . AS IS DISCERNIBLE FROM THE RECORDS, THE CONCLUDED ASSESSMENT OF THE ASSESSEE WAS REOPEN ED ON THE BASIS OF THE FOLLOWING REASONS TO BELIEVE : ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 11 IN THIS CASE, THE A SESSEE FIELD HIS ROI FOR THE A.Y. 2008 - 09 ON 19/09/2008 DECLARING TOTAL INCOME AT R S.63,16 ,300/ . . THE REGULAR ASSESSME NT IN THIS CASE WAS COMPLETED U/S 14(3) ON 20. 12.2010 THERE BY DETERMINI NG THE TOTAL INCOME OF ASSESSEE AT RS. 71,05,530/ - . INFORMATION WAS RECEIVED FROM ITO WARD - 3, PANVEL VIDE LETTER NO. PNL/WD 3/JG CS/2014 - 15 DATED 23.02.2015 THAT IN THE LAND DEAL BETWEEN M/S PATHIK CONSTRUCTION AND M /S JAI GA NES H CO OPERATIVE HOUSING SOCIETY LTD., THE SOCIETY HAS RECEIVED RS.8,16,26,625/ - OUT OF WHIC H RS.5,94,96, 000/ AS CASH AND RS.2,21,30,6 25 / - BY CHEQUE THROUGH M /S. O M D EVELOPERS. THE JAI GANESH CHS HAS ASSIGNED ALL THE RIGHT , TITLE, INTEREST AND BENEFITS TO M/S OM DEVELOPERS A PARTNERSHIP FIRM, THROUGH ITS PARTNERS 1) MR. PROM O D D. MORE AND 2) MR. GAJANAN R. KANADE . IN FACT, IT WAS OM DEVELOPERS WHO EXECUTED THE WHOLE TRANSACTION. FURTHER ON GOING THROUGH THE SALE AGREEMENT IT WAS FOUND THAT THE SALE CONSIDER ATION WAS TO THE TUNE OF R S.2,22,00,000/ - . THIS AMOUNT RECEIVED BY OM DEVELOPERS ON BEHALF OF JAI GANESH CH S. IT WAS OM DEVELOPERS WHO EXECUTED THE WHOLE TRANSACTION IN THE NAME JAI GANESH CH S. HOWEVER, ON PERUSA L OF THE RECORD OF THE ASSESSEE M/S. OM DEVELOPERS, IT IS . SEEN THAT THE ASSESSE E HAS SHOWN RS.2,24,88,685/ - AS SALE FROM JAI GANESH SOC IETY . THE AMOUNT AS REQUIRED TO T HE CREDITED TO THE PROFIT & L OSS ACCOUNT FOR THE A.Y. 2008 - 09 WAS AT RS. 8,16 , 26,625/ - . THUS, I HAVE REASONS TO BELIEVE THAT T HE INCOME TO THE EXTENT OF RS. 5,9 1,37,940/ - CHARGEABLE TO TAX HAD ESCAPED THE ASSESSMENT WITHIN THE MEANING OF PROVISIONS OF SECTION 147 OF THE ACT. HENCE, THIS IS A FIT CASE FOR REOPENING THE ASSESS MENT BY ISSUE OF NOTICE U/S 148 OF THE ACT. ACCORDINGLY, IF APPROVED NOTICE U/S 148 OF THE ACT WILL BE ISSUED . SD/ - (SUDHA RAMCHANDANI) DY. COMMISSIONER OF INCOME TAX - 28(2), MUMBAI AS CAN BE GATHERED FROM THE AFORESAID REASONS, THE A.O WAS IN RECEIPT OF INFORMATION FROM THE IT O , WARD - 3, PANVEL, VIDE A LETTER DATED 23.02.2015, WHEREIN IT WAS INTIMATED THAT A LAND DEAL WAS EXECUTED BETWEEN M/S PATHIK CONSTRUCTION AND JA I GANESH COOPERATIVE HOUSING SOCIETY LTD. FOR A TOTAL CONSIDERATION OF RS. 8,16,26,625/ - , WHICH COMPRISED OF VIZ. (I) C HEQUE PAYMENT: RS.2,21,30,625/ - ; AND (II) C ASH RECEIPT: RS.5,94,96,000/ - . AS IS DISCERNIBLE FROM THE REASONS TO BELIEVE, THE A.O WAS INTER ALIA INTIMATED THAT JA I GANESH COOPERATIVE HOUSING SOCIETY LTD. HAD ASSIGNED ITS RIGHTS, TITLE, INTEREST AND BENEFITS PERTAINING TO THE AFORESAID PROPERTY TO THE ASSESSEE FIRM, I.E. M/S OM DEVELOPERS, THROUGH THE LATTERS PARTNERS VIZ. (I). MR. PRAMOD D. MORE; AND (II) MR. GAJANAN R. KANADE. APART FROM THAT, THE A.O WAS INFORMED THAT THE AFORESAID SALE TRANSA CTION WAS EXECUTED BY THE ASSESSEE FIRM. OBSERVING, THAT THE ASSESSEE HAD ACCOUNTED FOR THE SALE CONSIDERATION ONLY TO THE EXTENT OF RS.2,24,88,685/ - , THE A.O HELD A BONAFIDE BELIEF THAT THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS.5,91,37,940/ - THAT WAS CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF THE PROVISIONS OF SEC. 147 OF ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 12 THE ACT. ACCORDINGLY, THE A.O BACKED BY HIS AFORESAID BONAFIDE BELIEF REOPENED THE CONCLUDED ASSESSMENT OF THE ASSESSEE. 7.1 WE HAVE GIVEN A THOUGHTFUL CONSIDERA TION TO THE AFORESAID FACT S AND ARE UNABLE TO AGREE WITH THE LD. A.R THAT THE A.O DE HORS SUFFICIENT MATERIAL HAD FORMED A BELIEF THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. AS OBSERVED BY US HEREINABOVE, THE A.O WAS IN RECEIPT OF INFORMATION FROM THE ITO, WARD - 3, PANVEL, VIDE A LETTER DATED 23.02.2015, WHEREIN HE WAS INFORMED THAT A LAND DEAL WAS EXECUTED BETWEEN M/S PATHIK CONSTRUCTION S AND JAI GANESH COOPERATIVE HOUSING SOC IETY LTD. FOR TOTAL CONSIDERATION OF RS. 8,16,26,625/ - , WHICH COMPRISED OF VIZ. (I) C HEQUE PAYMENT: RS.2,21,30,625/ - ; AND (II) C ASH RECEIPT: RS.5,94,96,000/ - . A S PER THE INFORMATION SO RECEIVED, IT WAS INTIMATED THAT JA I GANESH COOPERATIVE HOUSING SOCIETY LTD. HAD ASSIGNED ITS RIGHTS, TITLE, INTEREST AND BENEFITS PERTAINING TO THE PROPERTY IN QUESTION TO THE ASSESSEE FIRM I.E M/S OM DEVELOPERS . ALSO, THE A.O WAS INFORMED THAT THE AFORESAID SALE TRANSACTION WAS EXECUTED BY THE ASSESSEE FIRM. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE A.O HAD SUFFICIENT REASONS TO BELIEVE THAT THE ASSESSEE WHICH HAD ACCOUNTED FOR THE AFORESAID SALE TRANSACTION ONLY TO THE TUNE OF RS.2,24,88,685/ - IN ITS BOOKS OF ACCOUNTS, HAD THUS , SUPPRESSE D THE BALANCE SALE CONSIDERATION TO THE EXTENT OF RS. 5,91,37,940/ - . IN THE BACKDROP OF THE AFORESAID FACTS , WE ARE OF A STRONG CONVICTION THAT THE MATERIAL BEFORE THE A.O WAS SUFFICIENT ENOUGH FOR HIM TO ARRIVE AT A BONAFIDE BELIEF THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. AT THIS STAGE, WE MAY HEREIN OBSERVE THAT WHAT IS REQUIRED AT THE STAGE OF REOPENING OF A CONCLUDED ASSESSMENT IS THAT THE FORMATION OF BELIEF BY THE A.O THAT THE INCOM E OF THE ASSESSEE CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT SHOULD HAVE A NEXUS WITH THE MATERIAL AVAILABLE WITH HIM. WE ARE UNABLE TO SUBSCRIBE TO THE CLAIM OF THE LD. A.R , WHO HAD TRIED TO IMPRESS UPON US THAT THE MATERIAL AVAILABLE BEFORE THE A.O PROMPTI NG THE REOPENING OF A CONCLUDED ASSESSMENT SHOULD CONCLUSIVELY PROVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT . WE THUS NOT FINDING FAVOUR ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 13 WITH THE CLAIM OF THE LD. A.R THAT THE A.O HAD REOPENED THE CASE OF THE ASSESSEE IN THE ABSENCE OF SUFFI CIENT MATERIAL , REJECT THE SAME. THE ADDITIONAL GROUND OF APPEAL NO. (A) IS ACCORDINGLY DISMISSED. 8 . WE SHALL NOW DEAL WITH THE CLAIM OF THE LD. A.R THAT THE NOTICE UNDER SEC.148 WAS ISSUED BY THE A.O DE HORS NECESSARY SATISFACTION OF THE APPROPRIATE AUTH ORITY AS REQUIRED PER THE MANDATE OF SEC.151 OF THE ACT. AS AVERRED BY THE LD. A.R, THE COMMISSIONER OF INCOME - TAX - 28, MUM BAI, WHILE SANCTIONING THE ISSUANCE OF NOTICE UNDER SEC. 148 TO THE ASSESSEE , ON THE BASIS OF THE REASONS RECORDED BY THE A.O, HAD FAILED TO APPLY HIS MIND AND HAD RECORDED HIS SATISFACTION IN A MECHANICAL MANNER. IN ORDER TO BUTTRESS HIS AFORESAID CLAIM THE LD. A.R TOOK US THROUGH THE FORM WHEREIN THE APPROVAL OF THE COMMISSIONER OF INCOME - TAX WAS OBTAINED, I.E P AGE 39 OF THE APB . TH E LD. A.R DREW OUR ATTENTION TO COLUMN 13 OF THE FORM, AND SUBMITTED , THAT THE CIT - 28, MUMBAI BY MERELY STATING YES, I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S 148 OF THE ACT , HAD THUS, GRANTED HIS APPROVAL IN A MECHANICAL MANNER WITHOUT ANY APPLICATION OF MIND . I T WAS THE CLAIM OF THE LD. A.R THAT THE CIT WAS OBLIGATED TO HAVE APPLIED HIS MIND TO THE REASONS RECORDED BY THE A.O, AND THEREIN EXPLICITLY RECORD ED THAT HE WAS SAT ISFIED THAT IT WAS A FIT CASE FOR ISSUE OF NOTICE U/S 148 OF THE ACT. AS SUBMITTED BY THE LD. A.R, THE SATISFACTION OF THE CIT AS T HE SANCTIONING AUTHORITY, AS REQUIRED PER THE MANDATE OF SEC. 151(1) OF THE ACT, WAS NOT DISCERNIBLE FROM THE RECORDS. IT WAS AVERRED BY THE LD. A.R THAT IN THE ABSENCE OF THE RECORDING OF THE REQUISITE SATISFACTION OF THE SANCTIONING AUTHORITY THE VERY ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC. 147 OF THE ACT WOULD STAND VITIATED. IN ORDER TO SUPPORT HIS AFORESAID CLAIM T HE LD. A.R HAD RELIED ON THE ORDER OF THE SMC BENCH OF ITAT, DELHI IN THE CASE OF ANURAG VS. ITO, WARD - 1(1), GHAZIABAD [ITA NO.1023/DEL/2019, DATED 25.11.2019]. 8. 1 WE HAVE DELIBERATED AT LENGTH ON THE AFORESAID ISSUE IN THE BACKDROP OF THE CONTENTIONS ADVANCED BY THE LD. A.R AND ARE UNABLE TO FIND OURSELVES TO BE IN AGREEMENT WITH THE SAME. AS PER THE MANDATE OF SUB - SECTION (1) OF SEC. ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 14 151 , AS WAS AVAILABLE ON THE STATUTE DURING THE YEAR UNDER CONSIDERATION, IN A CASE WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SEC.143 OR SEC.147 HAD BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER SEC. 148 AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE PRINCIP AL CHIEF COMMISSIONE R OR CHIEF COMMISSIONER OR PRINCIP AL COMMISSIONER OR COMMISSIONER WAS SATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER , THAT IT WAS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. ADMITTEDLY, ASSESSMENT IN THE CASE OF THE ASSESSEE BEFORE US FOR A.Y 2008 - 09 WAS EARLIER FRAMED UNDER SEC.143(3), VIDE ORDER DATED 16.12.2010. A S THE AFORESAID CONCLUDED ASSESSMENT WAS SOUGHT TO BE REOPENED BY THE A.O ON 12.03.2015 I.E BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E A.Y. 2008 - 09, THE REFORE, AS PER THE MANDATE OF SUB - SECTION (1) OF SEC.151 THE SANCTION FOR ISSUANCE OF SUCH NOTICE HAD TO BE OBTAINED FROM EITHER OF THE AFOREMENTIONED APPROPRIATE AUTHORITIES. INSOFAR OBTAINING OF APPROVAL FROM COMMISSIONER OF INCOME - TAX - 28, MUMBAI AS THE APPROPRIATE AUTHORITY IS CONCERNED, WE FIND THAT THERE IS NO DISPUTE TO THE SAID EXTENT. THE GRIEVANCE OF THE ASSESSEE BEFORE US IS THAT THE CIT - 28, MUMBAI, HAD GRANT ED THE SANCTION IN A MECHANICAL MANNER I.E WITHOUT APPLICATION OF MIND. WE HAVE DELIBERATE D AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND ARE UNABLE TO ACCEPT THE AFORESAID CLAIM OF THE ASSESSEE. AS OBSERVED BY US HEREINABOVE, THE CIT - 28, MUMBAI, HAD AFTER CONSIDERING THE REASONS TO BELIEVE THAT WERE RECORDED BY THE A.O I.E. DCIT - 28,(2), MUMBA I, DATED 12.03.2015, HAD CATEGORICALLY STATED, AS UNDER : YES , I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SEC. 148 OF I.T. ACT. IN OUR CONSIDERED VIEW, THE AFORESAID RECORDING OF SATISFACTION BY THE APPROPRIATE AUTHORITY I.E CIT - 28, MUMBAI, CAN BY NO MEANS BE BROUGHT WITHIN THE REALM OF GRANT OF APPROVAL IN A MECHANICAL MANNER, AS HAD BEEN CANVASSED BY THE LD. A.R BEFORE US. ON A PERUSAL OF THE RECORDS, WE FIND, THAT THE A.O HAD VIDE HIS LETTER DATED 12.03.2015 (THROUGH JT. CIT, RANGE - 28(2), MUMBAI) FORWARDED HIS PROPOSAL FOR REOPENING OF THE CONCLUDED ASSESSMENT ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 15 U/S 147 IN THE CASE OF THE ASSESSEE. AS PER THE RECORDS, THE COMMISSIONER OF INCOME - TAX - 28, MUMBAI, HAD AS ON 24.03.2015 IN UNEQUIVOCAL TERMS RECORDED HIS SATISFACTION THAT IT WAS A FIT CASE FOR ISSUE OF NOTICE U/S 148 OF THE ACT. WE ARE UNABLE TO AGREE WITH THE CLAIM OF THE LD. A.R THAT THE SATISFACTION OF THE SANCTIONING AUTHORITY IS NOT DISCERNIBLE FROM THE RECORDS. IN OUR CONSIDERED VIEW, THE CIT - 28, MUMBAI HAD IN NO WAY FA LLEN SHORT OF WORDS TO CLEARLY EXPRESS THAT AS PER THE REASONS RECORDED BY THE A.O, HE WAS SATISFIED THAT IT WAS A FIT CASE FOR ISSUE OF NOTICE U/S 148 OF THE ACT. THE LD. A.R HAS FAILED TO POINT OUT AS TO HOW THE APPROVAL GRANTED BY THE SANCTIONING AUTHOR ITY COULD BE STAMPED AS GRANT OF APPROVAL IN A MECHANICAL MANNER OR WITHOUT APPLICATION OF MIND. INSOFAR THE ORDER OF THE SMC BENCH OF ITAT, DELHI IN THE CASE OF ANURAG VS. ITO, WARD - 1(1), GHAZIABAD [ITA NO.1023/DEL/2019, DATED 25.11.2019] RELIED UPON BY THE LD. A.R BEFORE US IS CONCERNED, THE SAME IN OUR CONSIDERED VIEW BEING DISTINGUISHABLE ON FACTS WOULD NOT ASSIST THE CASE OF THE ASSESSEE . ACCORDINGLY, NOT FINDING FAVOUR WITH THE CLAIM OF THE LD. A.R THAT THE APPROPRIATE AUTHORITY HAD FAILED TO RECORD HIS SATISFACTION AS PER THE MANDATE OF SUB - SECTION (1) OF SEC.151 OF THE ACT, WE REJECT THE SAME. THE ADDITIONAL GROUND OF APPEAL NO. (B) IS ACCORDINGLY DISMISSED. 9. WE SHALL NOW ADVERT TO THE CLAIM OF THE LD. A.R , THAT AS THE A.O HAD PROCEEDED WITH THE ASSESSMENT WITHOUT PROVIDING THE ASSESSEE A COPY OF THE REASONS TO BELIEVE ON THE BASIS OF WHICH ITS CONCLUDED ASSESSMENT WAS REOPENED, THEREFORE, THE ASSESSMENT FRAMED U/S 143(3) R.W.S 147, DATED 21.03.2016 WOULD ST AND VITIATED. IT WAS SUBMITTED BY THE LD. A.R THAT THE A.O HAD FAILED TO SUPPLY THE COPY OF THE REASONS TO BELIEVE ON THE BASIS OF WHICH THE ORIGINAL ASSESSMENT THAT WAS EARLIER FRAMED IN ITS CASE VIDE ORDER PASSED U/S 143(3), DATED 16.12.2010 WAS REOPENED . ON A SPECIFIC QUERY BY THE BENCH AS TO WHETHER THE ASSESSEE HAD APPLIED FOR A COPY OF THE REASONS TO BELIEVE, THE LD. A.R ANSWERED IN THE NEGATIVE. HOWEVER, IT WAS SUBMITTED BY THE LD. A.R THAT THE RE WAS AN INNATE STATUTORY OBLIGATION CAST UPON THE A.O T O FURNISH THE COPY OF THE REASONS TO BELIEVE TO THE ASSESSEE BEFORE PROCEEDING WITH AND FRAMING THE ASSESSMENT IN ITS HANDS. ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 16 9.1 WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFORESAID CLAIM OF THE ASSESSEE AND ARE UNABLE TO ACCEPT THE SAME. ADMITTEDLY, IN CASE AN ASSESSEE APPLI E S FOR A COPY OF THE REASONS TO BELIEVE ON THE BASIS OF WHICH RECOURSE HAS BEEN TAKEN TO PROCEEDINGS U/ S 147 OF THE ACT, THE A.O REMAINS UNDER A STATUTORY OBLIGATION TO FURNISH THE SAME BEFORE PROCEEDING ANY FURTHER WITH THE ASSES SMENT. BUT THEN, WHERE THERE IS NO REQUEST BY THE ASSESSEE FOR SUPPLY OF THE REASONS TO BELIEVE, NO OBLIGATION IN OUR CONSIDERED VIEW WOULD BE CAST UPON THE A.O TO FURNISH THE SAME. AS THE ASSESSEE IN THE CASE BEFORE US HAD AT NO STAGE APPLIED FOR A COPY O F THE REASONS TO BELIEVE ON THE BASIS OF WHICH ITS CASE WAS REOPENED, THEREFORE, NO FAULT CAN BE ATTRIBUTED TO THE A.O IN NOT SUPPLYING THE SAME. IN THE BACKDROP OF THE AFORESAID FACTS, FINDING NO SUBSTANCE IN THE CLAIM OF THE LD. A.R THAT THE ASSESSMENT F RAMED U/S 143(3) R.W.S 147, DATED 21.03.2016 WOULD STAND VITIATED AS THE A.O HAD FAILED TO SUPPLY THE COPY OF THE REASONS TO BELIEVE TO THE ASSESSEE, WE REJECT THE SAME. THE ADDITIONAL GROUND OF APPEAL NO. (B) IS ACCORDINGLY DISMISSED. 10. WE SHALL NOW ADVERT TO THE CONTENTIONS ADVANCED ON THE MERITS OF THE CASE BY THE LD. A.R IN HIS ATTEMPT TO IMPRESS UPON US THAT THE CIT(A) HAD ERRED IN SUSTAINING AN ADDITION OF RS. 5,94, 96 ,000/ - TOWARDS UNDISCLOSED INCOME OF THE ASSESSEE . BEFORE PROCEEDING ANY FURTHER, WE WOULD BRIEFLY CULL OUT THE FACTS OF THE CASE IN A CHRONOLOGICAL MANNER, AS THE SAME IN OUR CONSIDERED VIEW WILL HAVE A STRONG BEARING ON THE ADJUDICATION OF THE ISSUE BEFORE US , AS UNDER : (I). T HE STATE GOVERNMENT OF MA HARASHTRA HAD ACQUIRED LAND OWNED BY 37 LAND OWNERS AND VESTED THE SAME WITH CIDCO FOR DEVELOPMENT AND DISPOSAL. AS THE SAID 37 LAND OWNERS WERE ELIGIBLE FOR ALLOTMENT OF A PIECE OR PARCEL OF LAND FROM CIDCO UNDER THE SCHEME OF ALLOTMENT OF LAND TO THE PRO JECT AFFECTED PERSONS UNDER 12.5% SCHEME, THEY APPLIED FOR THE SAME VIDE THEIR RESPECTIVE APPLICATIONS. CIDCO DECIDED TO ALLOT TO THEM A PIECE OR PARCEL OF LAND ACCORDING TO THEIR ELIGIBILITY TAKING INTO CONSIDERATION TOTAL LAND HELD BY THEM WHICH WAS ACQU IRED BY THE STATE ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 17 GOVERNMENT FOR DEVELOPMENT OF NAVI MUMBAI. HOWEVER, ALL THE 37 LAND OWNERS REQUESTED CIDCO THAT INSTEAD OF ALLOTTING THEM LAND AT DIFFERENT LOCATIONS, ONE PLOT ADMEASURING 5549.59 SQ. MTRS BE ALLOTTED TO THEM JOINTLY TO FACILITATE THEM TO FORM THEMSELVES INTO A CO - OPERATIVE HOUSING SOCIETY AND TO GET THE LAND ALLOTTED FINALLY IN THE NAME OF SUCH CO - OPERATIVE HOUSING SOCIETY. (II). SUBSEQUENTLY, ALL THE 37 LAND OWNERS FORMED A CO - OPERATIVE HOUSING SOCIETY, VIZ. JAI GANESH CO - OPERATIVE HOU SING SOCIETY LTD (HEREINAFTER REFERRED TO AS CHS), AND GOT THE SAME REGISTERED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960. (III). ON THE BASIS OF AN AGREEMENT TO LEASE, DATED 13.10.2006 REGISTERED WITH THE S UB - REGISTRA R , PANVEL - 3 ON 16.10 .2006, CIDCO AGREED TO LEASE LAND BEARING PLOT NO. 31 ( ADMEASURING 5549 . 59 SQ. MTRS ) AT SECTOR 47, DRONAGIRI, TALUKA: URAN, DISTRICT: RAIGAD TO THE CHS. (IV). ON THE BASIS OF AN AGREEMENT TO TRANSFER AND ASSIGN , DATED 15.10.2006 , THE CHS ASSIGNED ALL ITS RIGHTS, TITLE, INTEREST AND BENEFITS IN RESPECT OF THE AFORESAID PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DRONAGIRI, TALUKA: URAN, DISTRICT: RAIGAD TO M/S OM DEVELOPERS I.E THE ASSESSEE FIRM, THROUGH THE LATTERS PAR TNERS (I). MR. PRAMOD D. MORE AND (II). MR. GAJANAN G. KANADE FOR A CONSIDERATION OF RS. 2,21,98,360/ - . AS STATED IN THE AGREEMENT, THE ASSESSEE I.E M/S OM DEVELOPERS AFTER PAYING THE AFORESAID PURCHASE CONSIDERATION WAS PUT INTO POSSESSION OF THE PROPERTY IN QUESTION . (V). ON THE BASIS OF AN AGREEMENT OF ASSIGNMENT - CUM - SALE, DATED 23.04.2007 THE ASSESSEE FIRM AGREED TO TRANSFER ITS RIGHTS, TITLE, INTEREST AND BENEFITS IN RESPECT OF THE AFORESAID PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DR ONAGIRI, TALUKA : URAN, DISTRICT: RAIGAD , TO M/S PATHIK CONSTRUCTIONS (ASSIGNEE), FOR A CONSIDERATION OF RS. 2,2 2 ,00,000/ - . THE CHS WAS ALSO MADE A PARTY TO THE SAID ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 18 AGREEMENT OF ASSIGNMENT - CUM - SALE, DATED 23.04.2007, IN ORDER TO ENABLE M/S PATHIK CONSTRUCTIONS TO GET THE LAND IN QUESTION TRANSFERRED IN ITS NAME. THE CONSIDERATION OF RS. 2,2 2 ,00,000/ - WAS RECEIVED BY THE ASSESSEE I.E M/S OM DEVELOPERS (ASSIGNOR) FR OM M/S PATHIK CONSTRUCTIONS (ASSIGNEE) , AS UNDER: S.NO PARTICULARS AMOUNT 1. CHEQUE NO. 000197, DATED 13.03.2007, DRAWN ON IDBI BANK, VASHI BRANCH. - RS. 25,00,000/ - 2. CHEQUE NO. 007072, DATED 10.04.2007, DRAWN ON IDBI BANK, VASHI BRANCH. RS. 25,00,000/ - 3. CHEQUE NO. 007080, DATED 25.04.2007, DRAWN ON IDBI BANK, VASHI BRANCH. RS. 60,50,000/ - 4 . CHEQUE NO. 007081, DATED 30.04.2007, DRAWN ON IDBI BANK, VASHI BRANCH. RS. 30,00,000/ - 5 . CHEQUE NO. 007083 , DATED 16.05 .2007, DRAWN ON IDBI BANK, VASHI BRANCH. RS. 2 0 ,00,000/ - 6. CHEQUE NO. 007084, DATED 18.05.2007, DRAWN ON IDBI BANK, VASHI BRANCH. RS. 61,50,000/ - (VI). ON THE BASIS OF A TRIPARTITE AGREEMENT, DATED 24.04.2007 EXECUTED BETWEEN VIZ. (I). CIDCO (FOR SHORT CORPORATION); (II). JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. (FOR SHORT ORIGINAL LICENSEE); AND (III) M/S PATHIK CONSTRUCTION S (FOR SHORT NEW LICENSEE), THE LEASE OF THE AFORESAID PLOT NO. 31 ADMEASURING 5549.59 SQ. MTRS AT SECTOR 47 DRONAGIRI, TALUKA : URAN, DISTRICT: RAIGAD WAS GIVEN TO THE NEW LICENSEE I.E M/S PATHIK CONSTRUCTION S . 11. IN THE BACKDROP OF THE AFORESAID FACTS, THE SEQUENCE OF EVENTS THEREIN INVOLVED TO THE EXTENT RELEVANT FOR ADJUDICATING THE ISSUE BEFORE US CAN BE SUMMED UP AS UNDER: ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 19 (I). A S PER THE AGREEMENT T O TRANSFER AND ASSIGN, DATED 15.10.2006 , THE ASSESSEE FIRM I.E M/S OM DEVELOPERS, THROUGH ITS PARTNERS (I). MR. PRAMOD D. MORE AND (II). MR. GAJANAN G. KANADE WAS VESTED WITH THE RIGHTS, INTEREST AND BENEFITS IN RESPECT OF THE AFORESAID PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DRONAGIRI, TALUKA : URAN, DISTRICT: RAIGAD FROM JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. FOR A CONSIDERATION OF RS. 2,21,98,360/ - . (II). THEREAFTER, ON THE BASIS OF AN AGREEMENT OF ASSIGNMENT - CUM - SALE, DATED 23.04.2007 THE ASSESSEE FIRM I.E M/S OM DEVELOPERS HAD TRANSFERRED ALL ITS RIGHTS, INTEREST AND BENEFITS IN RESPECT OF THE AFORESAID PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DRONAGIRI,TALUKA: URAN, DISTRICT: RAIGAD TO M/S PATHIK CONSTRUCTIONS, FOR A N OSTENSIBLE CONSIDERATION OF RS. 2,2 2 ,00,000/ - . ACCORDINGLY, IT CAN SAFELY BE CONCLUDED BEYOND ANY SCOPE OF DOUBT THAT THE ASSESSEE VIDE AN AGREEMENT T O TRANSFER AND ASSIGN, DATED 15.10.2006 , WAS VESTE D WITH THE RIGHTS, INTEREST AND BENEFITS IN THE AFORESAID PROPERTY IN QUESTION I.E PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DRONAGIRI,TALUKA: URAN, DISTRICT: RAIGAD FROM JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. FOR A CONSIDERATION OF RS. 2,21,98,360/ - . THEREAFTER, THE RIGHTS, INTEREST AND BENEFITS IN THE AFORESAID PROPERTY WERE TRANSFERRED BY THE ASSESSEE FIRM TO M/S PATHIK CONSTRUCTIONS, VIDE AN AGREEMENT OF ASSIGNM ENT - CUM - SALE, DATED 23.04.2007 FOR AN OSTENSIBLE CONSIDERATION OF RS. 2 ,20,00,000/ - . INSOFAR THE CLAIM OF THE LD. A.R THAT AS THE AGREEMENT TO TRANSFER AND ASSIGN, DATED 15.10.2006 ENTERED INTO BETWEEN THE ASSESSEE FIRM AND JAI GANESH COOPERATIVE HOUSING SOCIETY LTD WAS AN UNREGISTERED AGREEMENT EXECUTED ON A RS. 100/ - STAM P PAPER, THEREFORE, DE HORS TRANSFER OF THE TITLE OF THE PROPERTY UNDER CONSIDERATION NO ADVERSE INFERENCE AS REGARDS VESTING OF THE OWNERSHIP OF THE SAME IN THE ASSESSEE COULD HAVE BEEN DRAWN, WE ARE AFRAID DOES NOT FIND FAVOUR WITH US. ADMITTEDLY, TRANSF ER OF TITLE OF ANY IMMOVABLE PROPERTY OF A VALUE OF ONE HUNDRED RUPEES AND UPWARDS ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 20 AS PER SEC. 17 OF THE REGISTRATION ACT, 1908, HAS TO BE CARRIED OUT ON THE BASIS OF A REGISTERED DOCUMENT. BU T THEN, WE CANNOT REMAIN OBLIVIOUS OF THE FACT THAT THE CONTENTS OF THE AFORESAID AGREEMENT, DATED 15.10.2006 HAD BEEN REFERRED TO AND FORM PART OF THE RECITALS OF THE AGREEMENT OF ASSIGNMENT - CUM - SALE, DATED 23.04.2007, EXECUTED BETWEEN, VIZ. (I). JAI GANESH COOPERATIVE HOUSING SOCIETY LTD.; (II). M/S O M DEVELOPERS (I.E THE ASSESSEE FIRM); AND (III). M/S PATHIK CONSTRUCTIONS, ON THE BASIS OF WHICH THE OSTENSIBLE SALE CONSIDERATION OF RS. 2,22,00,000/ - WAS RECEIVED BY THE ASSESSEE THROUGH 6 CHEQUES FROM M/S PATHIK CONSTRUCTIONS, WHICH THEREIN LENDS CREDEN CE TO THE CONTENTS OF THE AFORESAID AGREEMENT, DATED 15.10.2006. AS SUCH, THE DE FACTO OWNERSHIP OF THE ASSESSEE FIRM IN RESPECT OF RIGHTS, INTEREST AND BENEFITS OF THE PROPERTY IN QUESTION CANNOT BE RULED OUT. IN THE BACKDROP OF THE AFORESAID FACTS THE CLAIM OF THE ASSESSEE THAT IT WAS MERELY A PASS THROUGH INTERMEDIARY AND HAD RECEIVED THE CONSIDERATION OF RS. 2,2 2 ,00,000/ - FROM M/S PATHIK CONSTRUCTIONS ON BEHALF OF JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. IS DIS PROVED TO THE HILT . OUR AFORESAID VIE W IS FURTHER SUPPLEMENTED BY THE FACT THAT THE AFORESAID PROPERTY IN QUES TION, AS OBSERVED BY THE CIT(A) FORMED PART OF THE O PENING STOCK OF THE ASSESSEE FIRM FOR THE YEAR UNDER CONSIDERATION I.E A.Y 2008 - 09. ON THE BASIS OF OUR AFORESAID DELIBERATIONS, WE FIND OURSELVES TO BE IN AGREEMENT WITH THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE FIRM I.E M/S OM DEVELOPERS WAS THE DE FACTO OWNER OF THE LAND IN QUESTION ON THE DATE OF SALE OF THE SAME TO M/S PATHIK CONSTRUCTIONS I.E ON 23.04.2007 . 12. WE SHA LL NOW ADVERT TO THE ISSUE AS REGARDS THE AMOUNT OF CONSIDERATION FOR WHICH THE PROPERTY IN QUESTION WAS TRANSFERRED BY THE ASSESSEE TO M/S PATHIK CONSTRUCTION S . AS OBSERVED BY US HEREINABOVE, THE RIGHTS, INTEREST AND BENEFITS IN THE AFORESAID PROPERTY IN QUESTION I.E PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SECTOR 47 DRONAGIRI, TALUKA: URAN, DISTRICT: RAIGAD WAS AS PER THE AGREEMENT OF ASSIGNMENT - CUM - SALE, DATED 23.04.2007 TRANSFERRED BY THE ASSESSEE TO M/S PATHIK CONSTRUCTIONS FOR A N OSTENSIBLE CON SIDERATION OF RS. 2,2 2 ,00,000/ - . HOWEVER, IN THE COURSE OF THE ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 21 SEARCH PROCEEDINGS CONDUCTED BY THE INVESTIGATION WING, MUMBAI ON 09.02.2009 UNDER SEC. 132 IN THE CASE OF M/S PATHIK CONSTRUCTION, A SHEET OF PAPER WITH HANDWRITTEN NOTES IDENTIFIED AS ANNEXUR E O - 2 - PAGE NO. 92 (OF THE SEIZED MATERIAL) WAS INTER ALIA SEIZED FROM ITS PREMISE S , WHICH READ AS UNDER: ANNEXURE 0 - 2 DCO FILE NO - 5550 SQM PLOT NO.31, SECT - 47, DRONAGIRI RATE 14720/ - SQ M PAYMENT DETAILS PAID TO JAI GANESH CO - OP. MEMBERS (C) CHEQUE 2,22,00,000/ - (D) CA 5,94,96,000/ - SOLD TO ------ (NOT LEGIBLE) - RATE 25600/ - SQ MT AS THE AFORESAID DOCUMENT I.E ANNEXURE O - 2 PAGE 92 WAS SEIZED IN THE COURSE OF THE SEARCH PROCEEDINGS FROM THE PREMISES OF M/S PATHIK CONSTRUCTION, THE CONTENTS OF THE SAME HAVE TO BE READ IN THE BACKDROP OF THE SAID FACT. NOTINGS IN THE SEIZED DOCUMENT I.E ANNEXURE O - 2 PAGE 92 CLEARLY REFER TO CERTAIN PAYMENTS MADE IN RELATION TO A TRANSACTION IN A PROPERTY STYLED AS JAI GANESH CHS, VIZ. (I) . C HEQUE :RS.2,2 2 ,00,000/ - ; AND (II) C ASH: RS.5,94,96,000/ - . ON A PERUSAL OF THE CONTENTS OF THE AFORESAID SEIZED DOCUMENT, WE FURTHER FIND THAT THE RATE AT WHICH PURCHASE OF THE PROPERTY WAS TRANSACTED IS CLEARLY STATE D TO BE @ RS. 14,720/ - PER SQ. MTR. FURTHER, THE RATE AT WHICH THE SAID PROPERTY WAS THEREAFTER SOLD IS ALSO CLEARLY MENTIONED TO BE @ RS. 25,600/ - PER SQ. MTR. ON THE BASIS OF THE AFORESAID NOTINGS IT WAS OBSERVED BY THE LOWER AUTHORITIES THAT THE ASSESSEE FIRM I.E M/S OM DEVELOPERS HAD TRANSFERRED ITS RIGHTS, INTEREST AND BENEFITS IN THE PROPERTY IN QUESTION I.E PLOT NO. 31 ( ADMEASURING 5549.59 SQ. MTRS ) AT SEC TOR 47 DRONAGIRI, TALUKA: URAN, DISTRICT: RAIGAD TO M/S PATHIK CONSTRUCTION FOR A TOTAL CONSIDERATION OF RS. 8,16,96,000/ - . A S OBSERVED BY THE LOWER AUTHORITIES, O UT OF THE TOTAL CONSIDERATION OF RS. 8,16,96,000/ - AN AMOUNT OF RS. 2,2 2 ,00,000/ - WAS RECEIVE D BY THE ASSESSEE FIRM BY 6 CHEQUES AND WAS ACCOUNTED FOR IN ITS ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 22 BOOKS OF ACCOUNT, WHILE FOR THE BALANCE AMOUNT OF CASH OF RS. 5,94,96, 0 00/ - RECEIVED HAD REMAINED UNACCOUNTED . INSOFAR THE CLAIM OF THE LD. A.R THAT THE AFORESAID SEIZED DOCUMENT I.E ANNEXURE O - 2 PAGE 92 IS A DUMB DOCUMENT, AND THUS, THE CONTENTS OF THE SAME CANNOT BE RELIED UPON FOR DRAWING OF ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE, WE ARE AFRAID DOES NOT FIND FAVOUR WITH US. THE NOTINGS IN THE SEIZED DOCUMENT I.E ANNEXURE O - 2 PA GE 92 BEYOND ANY DOUBT REFERS TO A TRANSACTION THAT HAD ACTUALLY TAKEN PLACE IN RESPECT OF THE PROPERTY THEREIN MENTIONED I.E 5550 SQM PLOT NO.31, SECT - 47, DRONAGIRI . IN FACT, THE NOTING CHEQUE : RS. 2,2 2 ,00,000/ - , IS THE AGGREGATE AMOUNT OF SALE CONSIDERATION THAT WAS RECEIVED BY THE ASS ESSEE I.E M/S OM DEVELOPERS THROUGH 6 CHEQUES DRAWN ON IDBI BANK, VASHI BRANCH FROM M/S PATHIK CONSTRUCTION. AS THE AFORESAID SEIZED DOCUMENT I.E ANNEXURE O - 2 PAGE 92 CLEARLY REFER S TO AN ACTUAL TRANSACTION THAT HAD MATERIALIZED, IT COULD THUS NOT BE SCRAPPED BY STAMPING IT AS A DUMB DOCUMENT. INSOFAR THE CLAIM OF THE LD. A.R THAT THE CONTENTS OF THE AFORESAID SEIZED DOCUMENT CANNOT BE RELIED AND ACTED UPON, WE ARE AFRAID THAT THE SAME DOES NOT MERIT ACCEPTANCE. A S THE AFORESAID DOCUMENT WAS SEIZED IN THE COURSE OF SEARCH PROCEEDINGS CONDUCTED AT THE PREMI SES OF M/S PATHIK CONSTRUCTIONS ( BUYER OF THE PROPERTY) , THE CONTENTS OF THE SAME AS PER THE INNATE PRESUMPTION IN SEC. 292C OF THE ACT HAVE TO BE ASSUMED TO BE TRUE AND IN THE HANDWRITING OF THE PERSON FROM WHOSE POSSESSION THE SAME WAS RECOVERED. APART FROM THAT, WE FIND THAT THE RATE OF RS. 14,320/ - PER SQ. MTR MENTIONED IN THE SEIZED DOCUMENT I.E ANNEXURE O - 2 PAGE 92 , THEREIN WORKS OUT TO A TOTAL CONSIDERATION OF RS. 8,16,96,000/ - I.E 5,550 SQ. MTR X RS. 14,320/ - PER SQ. MTR, WHICH IS THE AGGREGATE OF THE CON SIDERATION MENTIONED IN THE SEIZED DOCUMENT I.E RS. 8,16,96,000/ - [CHEQUE :RS. 2,22,00,000/ - + CASH : RS. 5,94,96,000/ - ]. ON THE BASIS OF THE AFORESAID CLINCHING FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE NOTINGS IN THE DOCUMENT I.E ANNEXURE O - 2 PAGE 92 SEIZED FROM THE PREMISES OF M/S PATHIK CONSTRUCTION I.E THE BUYER OF THE PROPERTY IN QUESTION CLEARLY POINTS OUT TO THE UNDISCLOSED CONSIDERATION THAT HAD CHANGED HANDS. THE LD. A.R HAD PLACED ON OUR RECORD AN ORDER THAT WAS PASSED BY THE ITAT, ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 23 C BENCH, MUMBAI WHILE DISPOSING OFF THE REVENUES APPEAL IN THE CASE OF M/S PATHIK CONSTRUCTIONS (IE. BUYER OF THE PROPERTY IN QUESTION) IN ITA NO. 1498 TO 1499/MUM/2012, DATED 13.02.2015 . AS IS DISCERNIBLE FROM THE SAID ORDER, M/S PATHIK CONSTRUCTIONS I.E THE BUY ER OF THE PROPERTY IN THE COURSE OF THE SEARCH PR OCEEDINGS CONDUCTED IN ITS CASE WAS FOUND T O HAVE RECEIVED ON - MONEY OF RS. 10.65 CRORES (I.E OVER AND ABOVE THE ACCOUNTED SALE CONSIDERATION OF RS. 3.25 CRORES) ON A SUBSEQUENT SALE OF THE PROPERTY IN QUESTIO N TO M/S ICONIC REALTORS LTD . IN THE COURSE OF THE SEARCH PROCEEDINGS PARTNERS OF M/S PATHIK CONSTRUCTIONS HAD CATEGORICALLY ADMITTED THE PAYMENT OF ON - MONEY FOR PURCHASE OF THE PROPERTY IN QUESTION. ALTHOUGH, THE AFORESAID STATEMENT WAS SUBSEQUENTLY RETRA CTED, BUT IN THE ABSENCE OF ANY MATERIAL SUPPORTING SUCH RETRACTION THE SAME WAS REJECTED BY THE A.O. AS IS DISCERNIBLE FROM THE AFORESAID ORDER M/S PATHIK CONSTRUCTION HAD IN THE COURSE OF THE POST SEARCH ASSESSMENT PROCEEDINGS IN ITS CASE CLAIMED THAT ITS UNDISCLOSED INCOME FROM SALE OF THE PROPERTY IN QUESTION BE COMPU TED AS UNDER: UNEXPLAINED CASH RECEIPT RS.10,95,00,000/ - LESS EXPENSES ON ACCOUNT PAYMENT MADE TO PERSONS WHO SOLD THE PLOT TO ASSE SSEE RS.5,94,96,000/ - CASH PAID TO MITRA MANDAL, AGENTS ETC. RS.3,05,00,000/ - UNDISCLOSED INCOME (IGNORING RS.4000/ - ) RS.1,95,00,000 / - ACCORDINGLY, M/S PATHIK CONSTRUCTION HAD CATEGORICALLY ADMITTED OF HAVING PAID ON - MONEY OF RS.5,94,96,000/ - FOR PURCHASE OF THE PROPERTY IN QUESTION. IN FACT, IT WAS THE CLAIM OF THE AFORESAID BUYER I.E M/S PATHIK CONSTRU CTION THAT THE UNDISCLOSED INCOME ON SALE OF THE PROPERTY IN QUESTION BE WORKED OUT AFTER INTER ALIA TAKING INTO ACCOUNT THE CASH EXPENSES OF RS.5,94,96,000/ - THAT WAS PAID TO THE SELLER OF THE PROPERTY . FURTHER, WE FIND THAT ON APPEAL BY M/S PATHIK CONSTRUCTIONS THE CIT(A) HAD INTER ALIA DIRECTED THE A.O TO ALLOW THE CREDIT OF RS.5,94,96,000/ - WHILE COMP UTING ITS UNDISCLOSED INCOME FROM THE LAND TRANSACTION IN QUESTION. ON THE BASIS OF THE AFORESAID FACTS AS ARE DISCERNIBLE IN THE CASE OF M/S PATHIK CONSTRUCTION I.E BUYER OF THE PROPERTY , THERE REMAINS NO DOUBT THAT A CONSIDERATION OF RS.5,94,96,000/ - HAD CHANGED HANDS ON TRANSFER OF THE PROPERTY UNDER CONSIDERATION. INSOFAR, THE ATTEMPT ON THE PART OF ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 24 THE ASSESSEE TO DISTANCE ITSELF FROM THE RECEIPT OF THE AFORESAID ON - MONEY OF RS.5,94,96,000/ - , ON THE G ROUND THAT IT WAS JUST A PASS THROUGH INTERMEDIARY OR A CONFIRMING PARTY BETWEEN M/S PATH IK CONSTRUCTION S AND JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD. , THE SAME FOR THE REASON GIVEN BY US HEREINABOVE WHILE REJECTING A SIMILAR CLAIM OF THE ASSESSEE THAT IT HAD NOTHING TO DO WITH THE SALE CONSIDERATION OF RS.2,22,00,000/ - (SUPRA) THAT WAS THOUGH DULY ACCOUNTED FOR IN ITS BOOKS OF ACCOUNTS, IS ON THE SAME TERMS REJECTED. TO BE BRIEF AND EXPLICIT, NOW WHEN IT IS CLEAR FROM THE RECORDS THAT THE ASSESSEE HAD PURCHASED/ACQUIRED ALL THE RIGHTS, INTERESTS AND B ENEFITS IN RESPECT OF THE PROPERTY IN QUESTION FROM JAI GANESH CO - OPERATIVE HOUSING SOCIETY LTD., VIDE THE AGREEMENT TO TRANSFER AND ASSIGN , DATED 15.10.2006 FOR A CONSIDERATION OF RS.2,21,98,360/ - , IT WOULD THEREFORE BE BEYOND COMPREHENSION AS TO HOW AN Y PART OF CONSIDERATION RECEIVED ON A SUBSEQUENT SALE OF THE SAID PROPERTY WAS NOT TO BE ACCOUNTED FOR IN ITS HANDS. IN FACT, NOW WHEN THE ASSESSEE HAD ACCOUNTED FOR THE PART SALE CONSIDERATION OF RS.2,22,00,000/ - RECEIVED FROM M/S PATHIK CONSTRUCTION S IN ITS BOOKS OF ACCOUNTS, THERE IS NO JUSTIFICATION ON ITS PART TO DISTANCE ITSELF FROM THE UNACCOUNTED SALE CONSIDERATION I.E THE ON - MONEY OF RS.,5,94,60,000/ - RECEIVED FROM THE SAID BUYER . TO SUM UP, NOW WHEN THE ASSESSEE FIRM I.E M/S OM DEVELOPERS VIDE AN AGREEMENT, DATED 15.10.2006 WAS VESTED WITH THE INTERESTS, RIGHTS AND BENEFITS IN THE PROPERTY IN QUESTION, THEREIN DE HORS ANY MATERIAL PROVING TO THE CONTRARY IT WOULD THUS BE THE RIGHTFUL OWNER OF ANY CONSIDERATION RECEIVED PURSUANT TO A SUBSEQ UENT SALE OF THE PROPERTY /RIGHTS IN THE PROPERTY IN QUESTION. WE THUS NOT BEING ABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE CLAIM OF THE LD. A.R THAT THE AFORESAID AMOUN T OF RS.5,94,96,000/ - (SUPRA) WAS PAID BY M/S PATHIK CONSTRUCTIONS TO JAI GANESH C O - OPERATIVE HOUSING SOCIETY LTD, DECLINE TO ACCEPT THE SAME. ACCORDINGLY, FINDING NO INFIRMITY IN THE VIEW TAKEN BY THE CIT(A) THAT THE CASH COMPONENT OF RS.5,94,96,000/ - OF THE SALE CONSIDERATION ON ACCOUNT OF SALE OF PLOT NO. 31, SECTOR 47, DRONAGIRI, TALU KA: URAN, DIST: RAIGAD HAD TO BE TAXED IN THE HANDS OF THE ASSESSEE FIRM, THEREIN UPHOLD THE SAME. THE GROUNDS OF ITA NO. 1837/MUM/2018 A.Y. 2008 - 09 M/S OM DEVELOPERS VS. DCIT - 28(2) 25 APPEAL NO. 1 & 2 A.W ADDITIONAL GROUNDS OF APPEAL NOS. (D) TO (G) AND (J) ARE DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. 13. AS THE LD. A.R HAD NOT MADE ANY SUBMISSIONS IN CONTEXT OF THE ADDITIONAL GROUNDS OF APPEAL NOS. (H) & (I), THE SAME ARE THUS DISMISSED AS NOT PRESSED. 1 4 . RESULTANTLY, FINDING NO MERIT IN THE APPEAL OF THE ASSESSEE, THE SAME IS DISMISSED. ORDER PRONOUNCE D UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD. SD/ - SD/ - SHAMIM YAHYA RAVISH SOOD (ACCOUNTANT MEMBER ) ( JUDICIAL MEMBER) MUMBAI, DATE: 06 . 10 .2020 P.S : R. KUMAR COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI