The DCIT, Central Circle-1(2), Ahmedabad V. M/s. Elegance Sky Pvt. Ltd., Ahmedabad

ITA 195/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8046 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 27-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: G C PIPARA
• Keywords: Income from undisclosed sources; Loose papers
• Section: 143(3); 133A

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 195/AHD/2016 ( ASSESSMENT YEAR : 2012-13) D.C.I.T., CENTRAL CIRCLE 1(2), AHMEDABAD / VS. M/S. ELEGANCE SKYZ PVT. LTD., 5, PRERNADEEP BUNGLOWS, NEAR NIRMA SCHOOL, BODAKDEV, AHMEDABAD 380054 ./ ./ PAN/GIR NO. : AACCE0138L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI RAJESH MEENA, SR. D.R. / RESPONDENT BY : SHRI G. C. PIPARA, A.R. DATE OF HEARING 05/04/2018 !'# / DATE OF PRONOUNCEMENT 28/06/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A)-11, AHMEDAB AD (CIT(A) IN SHORT), DATED 01.09.2015 ARISING IN THE ASSESSMENT ORDER DATED 29.01.2015 PASSED BY THE ASSESSING OFFICER (AO) U/S . 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMEN T YEAR 2012-13. ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 2 2. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CI T(A) IN REVERSING THE ADDITIONS MADE BY THE AO BY WAY OF FO LLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION OF RS.70,00,000/- BEING ON-MONEY RECEIVED BY THE COMPANY FROM THE SALE OF FLATS WITHOUT CONSIDERING THE STATEMENT U/S.133A DATED 27.04.2011 OF THE DIRECTOR . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION OF RS.1.34 CRORES BEING ON-MONEY RECEIVED BY THE COMPANY FROM THE SALE OF 2 BUNGALOWS AS ADMITTED BY THE DIRECTOR IN HIS STATEMENT RECORDED U/S.133A ON 27.0 4.2011. 3. BRIEFLY STATED, THE ASSESSEE IS ENGAGED IN CONST RUCTION BUSINESS I.E. CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL PR OJECTS. A SURVEY UNDER S.133A OF THE ACT WAS CONDUCTED AT THE BUSINE SS PREMISE OF THE ASSESSEE COMPANY ON 27.04.2011. AS NOTED BY THE AO DURING THE COURSE OF SURVEY, CERTAIN LOOSE PAPERS WERE FOUND A ND IMPOUNDED. IT WAS FOUND THAT ASSESSEE COMPANY EARNED SUBSTANTIAL UNACCOUNTED INCOME FROM SALE OF RESIDENTIAL UNITS IN TWO SCHEME S IMPLEMENTED BY THE GROUP NAMELY EARTH 12 AND EARTH ERRITA. TH E AO OBSERVED THAT THE DIRECTOR OF THE ASSESSEE SHRI KETAN PATEL WHO I S ALSO MAIN PERSON OF THE GROUP CONCEDED BEFORE THE INCOME TAX AUTHORI TIES AN UNACCOUNTED INCOME OF RS.12.84 CRORES BY WAY OF ON- MONEY RECEIVED AGAINST SALE OF RESIDENTIAL UNITS IN TWO PROJECTS O F THE GROUP AS NOTED ABOVE FOR THE FYS 2010-11 & 2011-12 BY WAY OF STATE MENT UNDER S.133A OF THE ACT. THE STATEMENT CONCEDING UNDISCL OSED INCOME WAS ENDORSED BY THE OTHER TWO DIRECTORS OF THE ASSESSEE COMPANY NAMELY SHRI DARSHAN MANUBHAI PATEL AND SHITAL PATEL. THE ADMISSION OF UNACCOUNTED MONEY EARNED FROM TWO SCHEMES COMPRISED OF RS.5.04 CRORE BEING ON-MONEY IN CASH FROM 12 FLATS OF EART H 12 AND RS.78 CRORE REPRESENTING ON-MONEY ARISING TOWARDS 12 BUNG ALOWS AT SCHEME NAMELY EARTH ERRITA. THUS, AN AGGREGATE DISCLOSU RE OF RS.12.84 ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 3 CRORE WAS MADE CONCERNING AYS 2011-12 AND 2012-13. SUBSEQUENT TO THE AFORESAID ADMISSION OF UNACCOUNTED INCOME, THE ASSESSEE SUBMITTED BREAK UP OF DISCLOSURE VIDE LETTER DATED 25.07.2011 BEFORE DDIT (INV.) AS REPRODUCED IN PAGE NOS. 3 & 4 OF THE ASSESSMENT ORDER. 3.1 THE RETURN FILED BY THE ASSESSEE FOR AY 2012-13 (AFTER SURVEY) ON 30.09.2012 WAS SUBJECTED TO SCRUTINY ASSESSMENT. THE AO OBSERVED THAT THE ASSESSEE OFFERED ADDITIONAL INCOM E OF RS.5.22 CRORE ONLY AGAINST THE ADMISSION OF RS.12.84 CRORE IN THE SURVEY PROCEEDINGS. THE AO ACCORDINGLY SOUGHT EXPLANATION FROM THE ASSESSEE FOR THE VARIANCE IN THE ADMISSION MADE AT THE TIME OF SURVEY AND POST SURVEY VIS--VIS UNACCOUNTED INCOME INCLUD E IN THE RETURN OF INCOME. AFTER TAKING COGNIZANCE OF THE REPLY FILED BY THE ASSESSEE IN ITS DEFENSE, THE AO FOUND THAT THE INCLUSION OF UNA CCOUNTED INCOME TOWARDS TWO SCHEMES IN NOT IN ORDER AND INCONSISTEN T WITH THE EARLIER STAND OF THE ASSESSEE. 3.2 AS REGARDS SCHEME NAMELY EARTH 12, IT WAS OBS ERVED THAT THE ASSESSEE HAD ADMITTED UNACCOUNTED INCOME OF RS.5.04 CRORE FROM SALE OF 12 RESIDENTIAL UNITS (FLATS). THE AO NOTED THAT THE AFORESAID ADMISSION WAS MADE ON THE PREMISE THAT AVERAGE ON-M ONEY OF RS.42 LAKHS HAVE WERE BEING COLLECTED ON EACH FLAT WHICH WAS NOT ACCOUNTED FOR IN THE BOOKS. HOWEVER, THE ASSESSEE CHANGED IT S STAND DRASTICALLY AT SUBSEQUENT STAGE AND CONTENDED THAT EIGHT FLATS HAVE BEEN SOLD WHERE ON-MONEY WAS RECEIVED @ RS.35 LAKHS PER FLAT AND ONLY THREE FLATS WERE SOLD WHERE ON-MONEY WAS COLLECTED @ RS.4 2 LAKHS PER FLAT. THE ASSESSEE ALSO SUBMITTED BEFORE THE AO THAT THE BOOKING OF ONE FLAT WAS CANCELLED AND THEREFORE ON-MONEY WAS REFUNDED. THE FLAT WAS AGAIN BOOKED AND SOLD SUBSEQUENTLY IN FY 2013-14 WH ERE RE-BOOKING WAS MADE ON 21 ST AUGUST, 2014 AND THE SALE CONSIDERATION OF RS.1.55 ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 4 CRORE WAS RECEIVED FULLY BY CHEQUE AND NO UNACCOUNT ED MONEY WAS INVOLVED. 3.3 THE AO HOWEVER DID NOT FIND ANY MERIT IN THE PL EA RAISED BY THE ASSESSEE FOR UNDER-REPORTING OF UNACCOUNTED INCOME ARISING FROM EARTH 12. THE AO FIRSTLY NOTED THAT THE ADMISSIO N OF THE KEY DIRECTOR MR. KETAN PATEL (IN CONSULTATION WITH OTHE R TWO DIRECTORS) WAS EXPRESS AND CATEGORICAL WHEREBY IT WAS ADMITTED THAT ON-MONEY OF RS.42 LAKHS PER FLAT REPRESENTS AVERAGE RATE OF O N-MONEY RECEIVED. AT THIS JUNCTURE, FOR THE SAKE OF CONVENIENCE IT WI LL BE APT TO REPRODUCE THE TEXT OF THE ADMISSION MADE BY THE DIR ECTOR IN THIS REGARD: PREVIOUSLY WE WERE TAKING ON MONEY IN CASH TO THE TUNE OF RS.35 LAKHS, WHILE LAST FLATS WERE SOLD AT A MUCH H IGHER RECEIPT OF ON MONEY, THUS WE HAVE EARNED ON MONEY IN CASH TO THE EXTENT OF 42 LACS PER FLATS AT THE AVERAGE RATE, WHICH COMES DOWN TO THE TOTAL OF RS.5 CRORES AND RS.4 LACS. WE HAVE SOLD FLATS IN EARTH- 12 SCHEME AT AROUND 1.75 LACS, RECENTLY, WHILE THE SAME WAS SOLD AT RS.1.6 CRORES IN THE INITIAL STAGE, WHILE WE HAVE SHOWN RECEIPT O F ONLY 1.25 CRORES TO RS.1.3 CRORES IN OUR BOOKS. 3.4 THE AO THUS DID NOT FIND MERIT IN THE PLEA OF T HE ASSESSEE THAT UNACCOUNTED INCOME OF RS.35 LAKHS ONLY PER FLAT WAS EARNED TOWARDS EIGHT FLATS. THE AO THUS RESORTED TO ADDITION OF RS .42 LAKHS PER FLAT IN PLACE OF RS.35 LAKHS OFFERED TOWARDS 8 FLATS. THE DIFFERENCE @ RS.7 LAKHS PER FLAT WHICH WORKED OUT TO RS.56 LAKHS PER FLAT WAS CONSIDERED FOR ADDITION. THE AO GRANTED ALLOWANCE OF RS.28 LAKHS OUT OF THE AFORESAID ADDITION ON THE GROUND THAT RS .28 LAKHS HAVE ALREADY BEEN INCLUDED AS UNACCOUNTED INCOME OF THE ASSESSEE IN THE PREVIOUS AY 2011-12 WHERE FOUR FLATS HAVE BEEN SHOW N TO BE SOLD BY THE ASSESSEE. THUS, REMAINING RS.28 LAKHS TOWARDS FOUR FLATS SHOWN TO BE SOLD DURING THE YEAR WAS ADDED TO THE UNACCOU NTED INCOME ALREADY DISCLOSED BY THE ASSESSEE. THE AO FURTHER DID NOT ACCEPT PLEA ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 5 OF THE ASSESSEE THAT NO UNACCOUNTED INCOME WAS INVO LVED ON SALE OF FLAT NO.101 IN EARTH 12, THE AO THUS ADDED ANOTHE R RS.42 LAKHS TOWARDS ON-MONEY RECEIVED BUT NOT DISCLOSED IN THE RETURN. THUS, AN AGGREGATE ADDITION OF RS.70 LAKHS WAS MADE BY THE A O ON ACCOUNT OF UNDER-REPORTING OF UNDISCLOSED INCOME FROM SCHEME EARTH 12. 3.5 ADVERTING TO THE OTHER SCHEME NAMELY EARTH ERR ITA, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE AT THE FIRST I NSTANCE IN THE COURSE OF SURVEY, READILY ADMITTED INVOLVEMENT OF UNACCOUN TED INCOME (ON- MONEY IN CASH) OF RS.65 LAKHS PER BUNGALOW. THE UN ACCOUNTED INCOME THUS ADMITTED IN RESPECT OF 12 BUNGALOWS UND ER CONSIDERATION WAS WORKED OUT TO RS.7.8 CRORE IN AGGREGATE. THE A O HAVING REGARD TO THE STATEMENT GIVEN IN THE COURSE OF SURVEY IN CONS ULTATION WITH OTHER DIRECTORS AND HAVING REGARD TO FURTHER ADMISSION MA DE BEFORE THE DDIT(INV.) ABOUT 3 MONTHS LATER OBSERVED THAT 6 BUN GALOWS OUT OF 12 BUNGALOWS WERE AGREED TO BE SOLD DURING THE FY RELE VANT TO AY 2012- 13 IN QUESTION. THE COMPONENT OF ADMISSION MADE BY THE ASSESSEE HIMSELF WORKS OUT TO RS.3.90 CRORE @ RS.65 LAKHS PE R BUNGALOW. AS AGAINST THIS, THE ASSESSEE HAS INCLUDED ONLY RS.2.5 6 CRORE TOWARDS UNDISCLOSED INCOME AT AN AVERAGE RATE OF RS.64 LAKH S PER FLAT (INSTEAD OF RS.65 LAKHS PER BUNGALOW) ATTRIBUTABLE TO 4 BUNG ALOWS ONLY. THE AO ACCORDINGLY PROCEEDED TO MAKE ADDITION OF RS.1,3 4,00,000/- (RS.1.30 CRORES TOWARDS TWO BUNGALOWS AND RS.4 LAKH S TOWARDS 2 BUNGALOWS WHERE ON-MONEY WAS SHOWN AT RS.63 LAKHS I NSTEAD OF RS.65 LAKHS) TOWARDS UNDER-REPORTING OF UNDISCLOSED INCOME TOWARDS SCHEME EARTH ERRITA. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A). ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 6 4.1 WITH REFERENCE TO UNDER-REPORTING OF UNDISCLOSE D INCOME QUA EARTH 12, THE CIT(A) OBSERVED THAT RATE OF ON-MON EY ADOPTED BY THE AO AT RS.42 LAKHS PER FLAT WAS NOT CORRECT IN THE L IGHT OF THE FACT THAT THE FLATS WERE BOOKED AND SOLD AFTER THE DATE OF SU RVEY WHERE THE STATEMENT OF DIRECTOR WAS RECORDED. THE CIT(A) OBS ERVED THAT THE ON- MONEY OF RS.42 LAKHS WAS NOT RELEVANT AS THE EVENT OF BOOKING OF FLAT DID NOT EXIST AT ALL AT THE TIME OF RECORDING OF ST ATEMENT. THE CIT(A) FURTHER ASSAILED THE ACTION OF THE AO ON THE GROUND THAT THE ADDITION IS BASED SOLELY ON THE STATEMENT OF THE DIRECTOR WITHO UT ANY OTHER INDEPENDENT EVIDENCE ON RECORD. THE CIT(A) INTER A LIA OBSERVED THAT STATEMENT OF THE DIRECTOR WAS INCOHERENT AND THUS C ANNOT FORM THE BASIS FOR ADDITION. THE CIT(A) ACCORDINGLY DELETED THE ADDITION OF RS.70 LAKHS ATTRIBUTABLE TO SCHEME EARTH 12. THE RELEVANT PARA DEALING WITH THE ISSUE BY THE CIT(A) READS AS UNDER : 4. THE FIRST GROUND OF APPEAL WAS RELATED TO ADDIT ION ON ACCOUNT OF DIFFERENCE BETWEEN THE TOTAL ON MONEY WORKED OUT BY THE AO AND THE APPELLANT. THE FACTS, IN BRIEF, ARE THAT SURVEY WAS CONDUCTED IN THE CASE ON 27.4.2011 WHEREIN SOME LOOSE PAPERS WERE FO UND AND IMPOUNDED. THE ASSESSEE FILED RETURN OF INCOME ON 3 0.09.2012 DECLARING TOTAL INCOME OF RS.4,88,96,870/-. DURING THE COURSE OF SURVEY SHRI KETAN PATEL, DIRECTOR OF THE ASSESSEE C OMPANY, IN HIS STATEMENT RECORDED U/S.133A DISCLOSED UNACCOUNTED I NCOME OF RS.12.84 CRORES ON ACCOUNT OF ON-MONEY RECEIVED AGA INST SALE OF RESIDENTIAL UNITS IN TWO SCHEMES OF THE GROUP I.E. 'EARTH ERRITA AND 'EARTH 12' FOR THE FINANCIAL YEAR 2010-11 AND 2011- 12. AFTER GOING THROUGH THE SUBMISSION OF THE ASSESSEE, THE AO MADE ADDITION OF RS.70 LAKHS ON THE GROUND OF ON MONEY ON 'EARTH-12 SCHEME' AND RS. 1.34,00,0007- ON 'EARTH ERRITA'. THE AO MENTIONED THAT IN HIS STATEMENT U/S. 131(1) OF THE ACT, SHRI KETAN R. PATEL, DIRECTOR OF THE ASSESSEE COMPA NY, DISCLOSED RS.5.04 CRORES TOWARDS ON-MONEY RECEIVED AT THE AVE RAGE RATE OF RS.42 LACS PER FLAT AGAINST BOOKING OF 12 FLATS AT 'EARTH-12'. THE AO FURTHER HELD THAT THE STATEMENT OF THE ASSESSEE WAS A COGENT EVIDENCE WHEREIN IT WAS ADMITTED THAT THE ASSESSEE RECEIVED ON MONEY OF RS.42 LAKHS ON AN AVERAGE, THEREFORE, THE SUBSEQUENT SUBM ISSION OF THE ASSESSEE BEFORE THE A.O. THAT NO ON MONEY WAS RECEI VED ON THE SALE OF FLAT NO. 101 AND 301 WAS NOT CORRECT. HE MADE AD DITION OF RS.42 LAKHS ON ACCOUNT OF ON MONEY IN RESPECT OF FLAT NO. 101 AND FURTHER ADDITION OF RS.28 LAKHS BEING ON MONEY SHOWN LESS F OR FOUR FLATS ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 7 BEARING NO.201, 203, 204 AND 303 AT THE RATE OF RS. 7 LAKHS PER FLAT. THUS THE TOTAL ADDITION WAS MADE OF RS.70 LAKHS. THE APPELLANT SUBMITTED THAT IT WAS EXPLAINED DURIN G ASSESSMENT PROCEEDINGS THAT HE RECEIVED ON-MONEY AT THE RATE OF RS.35 LAKHS PER FLAT AND NOT RS.42 LAKHS AS STATED BY THE AO. THE DIRECTOR OF THE COMPANY DISCLOSED RS.12.8. CRORES O N ACCOUNT OF UNACCOUNTED MONEY RELATED TO 'EARTH ERRITA' AND 'EA RTH-12' WHICH WERE UNDER THE PROCESS OF IMPLEMENTATION. THE DISCL OSURE INCLUDED AN AMOUNT OF RS.7.8 CRORES REPRESENTING ON MONEY RE CEIPT FROM EARTH ERRITA. IN ANSWER TO QUESTION NO.18 THE DIRECTOR ST ATED THAT THE PROJECT OF EARTH ERRITA WAS UNDER PROGRESS AND ONLY 6 BUNGALOWS WERE SOLD OUT OF 12 BUNGALOWS FOR WHICH ON-MONEY WA S RECEIVED AT THE RATE OF RS.65 LAKHS PER BUNGALOW. THEREFORE, AN AMOUNT OF RS.3.90 CRORES WAS DISCLOSED FOR THE F.Y. 2011-12 W HICH WAS RELEVANT TO A.Y. 2012-13 AND THE REMAINING 6 BUNGALOWS WHICH WERE NOT BOOKED AND THE AMOUNT WOULD BE DISCLOSED WHEN THEY WERE SOLD IN FUTURE. THUS, THE DISCLOSURE OF RS.7.80 CRORES CONS ISTED OF RS.3.90 CRORES IN EACH OF TWO YEARS I.E. A.Y. 2012-13 AND A .Y. 2013-14. IN THE LETTER DATED 25.7.2011 THE ASSESSEE SUBMITTED B EFORE THE DDIT THAT THERE WAS NO DISCLOSURE ON ACCOUNT OF EARTH ER RITA FOR THE A.Y. 2011-12. THUS, THERE WAS NO NEED TO INCLUDE THE SAM E AS INCOME FOR THE A.Y. 2011-12. BOOKING OF FLAT NO.201 WAS CANCELLED ON 7.3.2011 AN D FINAL BOOKING WAS MADE ON 30.7.2013 FOR RS.1,66,10,0007- INCLUDING RECEIPT OF ON MONEY OF RS.35,000/- TO SHRI RAMESH A ND SUCHITA DEORA. SIMILARLY, FLAT NO.203, 204 AND 303 WERE BOO KED FIRST TIME IN THE MONTH OF SEPTEMBER AND OCTOBER 2011 EACH FOR RS .1,60,00,000/-, RS.1,58,00,000/- AND RS.1,65,00,000/- RESPECTIVELY. ON MONEY WAS RECEIVED OF RS.35 LACS ON EACH FLAT. THEREFORE, THE RATE OF ON MONEY ADOPTED BY THE AO OF RS.42 LACS PER FLAT WAS NOT CO RRECT IN THE LIGHT OF THE FACT THAT THE FLATS WERE BOOKED AND SOLD AFT ER THE DATE OF SURVEY WHEREIN THE STATEMENT OF THE DIRECTOR WAS RE CORDED. THE PRESUMPTION OF RECEIPT OF ON MONEY OF RS.42 LACS PE R FLAT WAS NOT RELEVANT AS THE EVENT OF BOOKING OF FLATS DID NOT E XIST AT ALL AT THE TIME OF RECORDING THE STATEMENT. THUS, ADDITION MAD E BY THE AO WAS WHOLLY UNJUSTIFIED AND BAD IN LAW. THE AO MECHANICA LLY PLACED RELIANCE ON THE STATEMENT OF DIRECTOR WITHOUT HAVIN G ANY OTHER INDEPENDENT EVIDENCE ON RECORD. THE AO DID NOT COND UCT ANY INVESTIGATION AND ADDITION WAS MADE ON THE BASIS OF PRESUMPTION ONLY. THE CONTENTS OF THE ASSESSMENT ORDER, RELEVANT EXTR ACT OF THE STATEMENT OF THE DIRECTOR OF THE ASSESSEE COMPANY A ND SUBMISSION OF THE APPELLANT HAVE BEEN EXAMINED. IT WAS AN UNDISPU TED FACT THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY ON 2 7.4.2011 WAS RECTIFIED AND CLARIFIED ON THE ISSUE OF SALE OF NUM BER OF FLATS AND THE AMOUNT OF ON-MONEY RECEIVED FOR EACH OF THE FLATS I N THE PROCEEDINGS BEFORE THE DDIT(INV.) AND THE AO DURING THE ASSESSM ENT ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 8 PROCEEDINGS. THE AO DID NOT GATHER ANY MATERIAL ON RECORD TO CONTROVERT THE SUBMISSION OF THE ASSESSEE. THE STAT EMENT OF SHRI K.R. PATEL RECORDED DURING THE COURSE OF SURVEY WAS APPA RENTLY INCOHERENT AND CONTAINS CONTRADICTORY INFORMATION R EGARDING THE ELEMENT OF RECEIPT OF ON MONEY ON SALE OF FLATS ON DIFFERENT DATES. THE AO EXTRACTED MEANING OF THE STATEMENT OF THE DIRECT OR ONLY TO THE EXTENT OF HIS SUITABILITY FOR MAKING ADDITION AND D ID NOT APPRECIATE IT AS A WHOLE. IT WAS CLEARLY MENTIONED IN THE STATEME NT THAT IN THE INITIAL BOOKINGS OF THE FLATS ON MONEY WAS RECEIVED AT THE RATE OF RS.35 LACS PER FLAT. THE STATEMENT RECORDED ON 27.4.2011, THE DIRECTOR, SHRI KETAN R. PATEL CATEGORICALLY MENTIONED IN ANSWER TO QUEST ION NO. 17 THAT, PREVIOUSLY WE WERE TAKING ON MONEY IN CASH TO THE TUNE OF RS.35 LAKHS, WHILE LAST FLATS WERE SOLD AT A MUCH HIGHER RECEIPT OF ON MONEY, THUS WE HAVE EARNED ON MONEY IN CASH TO THE EXTENT OF 42 LACS PER FLATS AT THE AVER AGE RATE, WHICH COMES DOWN TO THE TOTAL OF RS.5 CRORES AND RS .4 LACS. WE HAVE SOLD FLATS IN EARTH-12 SCHEME AT AROUND 1.7 5 LACS, RECENTLY, WHILE THE SAME WAS SOLD AT RS.1.6 CRORES IN THE INITIAL STAGE, WHILE WE HAVE SHOWN RECEIPT OF ONLY 1.25 CRORES TO RS.1.3 CRORES IN OUR BOOKS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT IS DIF FICULT TO AVOID THE CONCLUSION THAT THE AO DID NOT HAVE ANY MATERIA L IN HIS POSSESSION TO WARRANT FURTHER ADDITION OF RS.28 LAK HS @ RS. 7 LAC PER FLAT FOR 4 FLATS TO THE INCOME OF THE ASSESSEE. THUS, THIS GROUND OF APPEAL IS ALLOWED. THE APPELLANT SUBMITTED THAT FLAT NO.101 WAS BOOKED ON 21.8.2013 TO SHRI JITENDRA SINGH FOR RS.1,55,00,000 /- AND THE SALE DEED WAS EXECUTED ON 22.1.2014. THE ENTIRE CONSIDER ATION WAS RECEIVED THROUGH CHEQUE WHICH WAS RECORDED IN THE B OOKS AS REGULAR CONSTRUCTION INCOME FOR THE F.Y. 2013-14. HE FURTHE R CLARIFIED THAT THE ELEMENT OF ON MONEY WAS NOT INVOLVED IN THIS TR ANSACTION. A PERUSAL OF SALE CONSIDERATION OF FLATS IN THE SCH EME OF 'EARTH-12' REVEALED THAT THE SALE CONSIDERATION OF MOST OF THE FLATS INCLUDING THE ELEMENT OF ON MONEY WAS VARIED BETWEE N THE RANGE OF 1,48,00,000/- TO RS.1,65,00,000/-. THE AO DID NOT G IVE ANY FACTUAL FINDING TO JUSTIFY HIS PRESUMPTION THAT EVEN IN A C ASE WHEREIN THE CONSIDERATION SHOWN AS CONSTRUCTION INCOME OF RS.1, 55,00,000/- WAS COMPARABLE TO THE SALE CONSIDERATION OF OTHER FLATS WHEREIN THE MAXIMUM INCOME FROM CONSTRUCTION WAS SHOWN BETWEEN THE RANGE OF RS.1,10,00,000/- TO RS.1,35,00,000/-. AS A MATTER O F FACT, THE TOTAL CONSIDERATION INCLUDING THE ELEMENT OF ON MONEY FOR THE FLATS WHICH WERE CONSIDERED BY THE AO AS COMPARABLE CASES VARIE D FROM RS.1,35,00,000/- TO RS.1,66,00,000/-. THUS, THE FAC TS AND FIGURES ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 9 ESTABLISHED THAT THE CONSIDERATION RECEIVED THROUGH CHEQUE FOR THE SALE OF FLAT NO.101 WAS WITHIN THE RANGE AS IN THE CASE OF OTHER FLATS. THEREFORE, AFTER TAKING INTO CONSIDERATION ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS MY CONSIDERED OPIN ION THAT THE ADDITION WAS MADE PURELY ON THE BASIS OF PRESUMPTIO NS. HE DID NOT GIVE ANY MATERIAL FINDING IN THE ASSESSMENT ORDER T O REBUT THE EXPLANATION OF THE ASSESSEE. THEREFORE, THE ADDITIO N OF RS.42 LACS IS NOT SUSTAINABLE. 4.2 ADVERTING TO THE ACTION OF THE AO TOWARDS ADDIT ION OF RS.1,34,00,000/- ATTRIBUTABLE SCHEME EARTH ERRITA , THE CIT(A) CONCLUDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(A) FIRSTLY ACCEPTED THE APPEAL OF THE ASSESSEE TOWARDS CONCESS ION OF RS.2 LAKHS EACH CLAIMED TO HAVE BEEN GIVEN IN RESPECT OF TWO BUNGALOWS AND THEREFORE ACCEPTED THE SHORT DECLARATION OF RS.4 LA KHS IN RESPECT OF 4 BUNGALOWS CLAIMED TO HAVE BEEN ACTUALLY SOLD DURING AY 2012-13. AS REGARDS, REMAINING ADDITION OF RS.1.30 CRORE, THE C IT(A) ACCEPTED THE PLEA THAT THE AFORESAID AMOUNT HAS BEEN REFLECTED I N AY 2013-14 AND THEREFORE, DOES NOT WARRANT ANY ADDITION. THE RELE VANT PARA DEALING WITH THE ISSUE BY THE CIT(A) REPRODUCED HEREUNDER: 5. THE NEXT GROUND OF APPEAL WAS RELATED TO ADDITI ON ON ACCOUNT OF RECEIPT OF ON MONEY ON SALE OF BUNGALOWS IN THE SCHEME OF EARTH ERRITA. THE AO MADE ADDITION OF RS.1,34,00,000/- ON THE GROUND THAT THE ASSESSEE CONFIRMED DURING THE COURSE OF SURVEY AND ALSO IN THE INVESTIGATION PROCEEDINGS BEFORE THE DDIT(LNV.) THA T HE RECEIVED AMOUNT OF ON MONEY AND AGREED TO DISCLOSED THE SAME IN THE A.Y.2012-13, HOWEVER, IN THE RETURN OF INCOME THE D ISCLOSURE WAS SHOWN AT RS.2,56,00,0007- ONLY. THE APPELLANT SUBMITTED THAT AT THE TIME OF SURVEY THE SCHEME OF 'EARTH ERRITA' WAS JUST STARTED AND IT WAS ONLY UPTO PLINTH LEVEL THAT TOO OF JUST FIVE BUNGALOWS. ACCORDINGLY, ON MO NEY OF RS.2.56 CRORES RELATED TO THE BOOKING OF FOUR BUNGALOWS MAR KED AS 'BUNGALOW NO.1 TO 4' WAS RECEIVED AND SHOWN AS INCOME IN THE A.Y. 2012-13. HE FURNISHED A TABULAR CHART CONTAINING PARTICULARS OF SALE, AMOUNT OF BOOKING, YEAR OF CONSTRUCTION, DATE OF SALE DEED AN D THE ELEMENT OF ON MONEY ETC. THIS CHART WAS SUBMITTED IN THE ASSES SMENT PROCEEDINGS ALSO. TO SUBSTANTIATE HIS EXPLANATION, THE APPELLANT REPRODUCED THE STATEMENT OF SHRI KETANBHAI R. PATEL WHEREIN IN ANSWER TO QUESTION NO.18 HE STATED THAT ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 10 ' THE PROJECT OF EARTH ERRITA IS UNDER PROGRESS. WE HAVE SOLD 6 BUNGALOWS OUT OF 12 BUNGALOWS. WE HAVE SOLD THESE BUNGALOWS IN RS.2.45 CRORES EXCLUDING PACKAGES, HOWEVER, WE HAVE BOOKED ONLY RS.1.8 CRORES IN THE BOOKS, THUS WE HAVE EARNED ARO UND RS.65 LACS ON EACH OF THE SIX BUNGALOWS. THE ON MONEY OF RS.65 LACS IS RECEIVED AN CASH. THUS, AFTER DISCUSSING THE ISSUE WITH SHITAL AND DARSHAN 1 HEREBY DISCLOSE RS.3.90 CRORES FOR CURREN T F.Y. 1 FURTHER DISCLOSE RS.3.90 CRORES FOR THE REMAINING 6 BUNGALO WS. I UNDERTAKE TO OFFER FULL SALE CONSIDERATION IN THE BOOKS. THUS IN ALL I DISCLOSE RS.12.84 CRORES. THE TAXES WILL BE PAID IN THE YEAR IN WHICH THE SALE IS EXECUTED. THE ABOVE DISCLOSURE IS OVER AND ABOVE MY REGULAR INCOME. THE ABOVE DISCLOSURE IS MADE WITH OUR CONSE NT.' FOR OTHER TWO BUNGALOWS, ON MONEY OF RS.1.30 CRORES WAS SHOWN IN THE BOOKS OF ACCOUNTS AS WELL AS IN THE AU DITED BALANCE- SHEET AND INCOME FROM ON MONEY ON THESE TWO BUNGALO WS WAS OFFERED AS INCOME IN THE A.Y. 2013-H.RELEVENT EVIDENCES WAS ALSO SUBMITTED TO THE A O, IN THE FORM OF I T RETURN FOR A.Y. 2013 -14. IT WAS ALSO SUBMITTED BEFORE THE AO THAT AS ON 31.3 .2012, THE WORK OF THE BUNGALOWS WAS IN PROGRESS / STOCK AND N ONE OF THE BUNGALOWS WAS SOLD. HOWEVER, INCOME ON ACCOUNT OF O N MONEY WHICH WAS RECEIVED FOR BOOKING OF FOUR BUNGALOWS WAS DISC LOSED ON RECEIPT BASIS. HE FURTHER SUBMITTED THE REASON FOR LESS RECEIPT OF ON MONEY OF RS.4 LAKHS IN RESPECT OF TWO BUNGALOWS OUT OF THE 4 BUNGALOWS BOOKED DURING THE YEAR. HE EXPLAINED THAT CONCESSIO N OF RS.3 LAKHS WAS GIVEN TO SHRI VIKRAM VINIT SOOD FOR BUNGALOW NO .2 FOR THE REASON THAT HIS FAMILY ALSO PURCHASED ONE MORE BUNG ALOW NO.3 SIMULTANEOUSLY. SIMILARLY, SHORT PAYMENT OF ON MONE Y WAS RECEIVED TO THE EXTENT OF RS.1 LAKH FOR BUNGALOW NO,4 BECAUS E THERE WERE SOME MINOR CONSTRUCTION RELATED PROBLEMS IN THE BUNGALOW AND THE AMOUNT WAS HIGHLY REASONABLE. THE CONTENTS OF THE ASSESSMENT ORDER, RELEVANT EXTR ACT OF THE STATEMENT OF THE DIRECTOR OF THE ASSESSEE COMPANY A ND SUBMISSION OF THE APPELLANT HAVE BEEN PERUSED. IT WAS AN UNDISPUT ED FACT THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY ON 2 7.4.2011 WAS RECTIFIED AND CLARIFIED ON THE ISSUE OF SALE OF NUM BER OF FLATS AND THE AMOUNT OF ON-MONEY RECEIVED FOR EACH OF THE FLATS D URING THE ASSESSMENT PROCEEDINGS. THE STATEMENT OF SHRI K.R. PATEL RECORDED DURING THE COURSE OF SURVEY WAS APPARENTLY INCOHERE NT AND CONTAINS CONTRADICTORY INFORMATION REGARDING THE ELEMENT OF RECEIPT OF ON MONEY ON SALE OF FLATS ON DIFFERENT DATES. THE AO E XTRACTED MEANING OF THE STATEMENT OF THE DIRECTOR ONLY TO THE EXTENT OF HIS SUITABILITY FOR MAKING ADDITION AND DID NOT APPRECIATE ALL THE FACTS MENTIONED IN THE SUBMISSIONS DURING THE ASSESSMENT PROCEEDINGS. HE DID NOT GATHER ANY MATERIAL ON RECORD TO CONTROVERT THE SUB MISSION OF THE ASSESSEE. THEREFORE, IT WAS ABUNDANTLY CLEAR THAT T HE AO MADE ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 11 ADDITION ONLY ON PRESUMPTION BASIS. IT IS A SETTLED POSITION OF LAW THAT ONCE THE ASSESSEE SUBMITS AN EXPLANATION TO SU BSTANTIATE THE COMPUTATION OF INCOME, ONUS SHIFT TO THE AO TO COND UCT REQUIRED INVESTIGATION AND REBUT THE SUBMISSION OF THE ASSES SEE. IF THE AO SUCCEEDS IN DEMOLISHING THE EVIDENCE FURNISHED BY T HE ASSESSEE, IN THAT CASE, HIS ACTION BECOMES JUSTIFIED. IT WAS EVI DENT ON THE RECORD THAT THE AO DID NOT MENTION SUCH EVIDENTIARY SUPPOR T TO WARRANT HIS ACTION. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOW ED. 5. AGGRIEVED BY THE ACTION OF THE CIT(A) IN GRANTIN G RELIEF, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5.1 LEARNED DR FOR THE REVENUE RELIED UPON THE ORDE R OF THE AO AND SUBMITTED THAT THE CIT(A) HAS MIS-DIRECTED HIMSELF IN LAW AND ON FACTS IN GRANTING WHOLESOME RELIEF TO THE ASSESSEE ON SHA LLOW REASONINGS. AS REGARDS EARTH 12, THE LEARNED DR POINTED OUT T HAT THE STATEMENT OF THE DIRECTOR IS SELF-EXPLANATORY WHERE THE AVERA GE RATE OF RS.42 LAKHS HAS BEEN ADMITTED PER FLAT TOWARDS ON-MONEY. THE ASSESSEE IS WRONGLY ATTEMPTING TO TWIST THE FACTS AND SEEKS CLA IM OF RS.35 LAKHS TOWARDS ON-MONEY IN RESPECT OF 8 FLATS AS AGAINST S ELF-ADMISSION OF AVERAGE AMOUNT OF RS.42 LAKHS IN CLEAR TERMS. IT W AS POINTED OUT THAT THE ACTION OF THE ASSESSEE HAS RESULTED IN UNDER-RE PORTING OF RS.28 LAKHS TOWARDS 4 FLATS IN THE AY 2011-12 AND ANOTHER RS.28 LAKHS TOWARDS OTHER 4 FLATS IN THE AY 2012-13 IN QUESTION . THE LEARNED DR THEREAFTER SUBMITTED THAT THE CIT(A) WAS NOT JUSTIF IED IN ACCEPTING THE PLEA ADVANCED ON BEHALF OF THE ASSESSEE TOWARDS CAN CELLATION OF FLAT NO. 101 AND RE-BOOKING OF THE FLAT AT FULL PRICE IN FY 2013-14 AT RS.1,55,00,000/-. THE LEARNED DR SUBMITTED THAT TH E CASH COMPONENT WAS BOUND TO BE INVOLVED IN 2013 BOOKING AS ADMITTE DLY BUILT UP AREA OF FLAT NO. 101 WAS HIGHER THAN THE BUILT UP AREA O R FLAT NO. 304, WHICH WAS BOOKED FOR SALE IN JANUARY 2011 AT AN AGG REGATE PRICE OF RS.1.77 CRORE. THEREFORE, THE CIT(A) WAS NOT JUSTI FIED IN DELETING ON- MONEY COMPONENT OF RS.42 LAKHS TOWARDS ALLEGED CANC ELLATION OF FLAT NO. 101. THE LEARNED DR THUS SUBMITTED THAT THE AC TION OF THE AO ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 12 TOWARDS ADDITION OF RS.70 LAKHS, WHICH WAS BASED ON THE STATEMENT OF THE DIRECTOR AFTER DUE APPLICATION OF MIND AND ITS SUBSEQUENT CONFIRMATION BEFORE THE DDIT(INV.) AFTER A GAP OF T HREE MONTHS CANNOT BE FAULTED. 5.2 AS REGARD ADDITION OF RS.1.34 CRORES TOWARDS SC HEME EARTH ERRITA, THE LEARNED DR SUBMITTED THAT THE CIT(A) H AS SUMMARILY RELIED UPON THE PLEADINGS OF THE ASSESSEE WITHOUT A NY REASONABLE BASIS. THE LEARNED DR CONTENDED THAT THE ASSESSEE HIMSELF CONCEDED BEFORE THE DDIT (INV.) AFTER A GAP OF THREE MONTHS FROM TH E DATE OF SURVEY THAT OUT OF 12 BUNGALOWS, 6 BUNGALOWS HAVE BEEN BOO KED IN FY 2011- 12. THE ASSESSEE HAS NOT OFFERED ANY UNDISCLOSED I NCOME ATTRIBUTABLE TO EARTH ERRITA PROJECT IN PRECEDING AY 2011-12 A ND HAS MERELY BOOKED UNDISCLOSED INCOME OF RS.2.56 CRORES TOWARDS 4 BUNGALOWS ONLY IN THIS ASSESSMENT YEAR. THE CLAIM OF THE ASS ESSEE THAT 2 BUNGALOWS HAVE BEEN BOOKED IN AY 2013-14 IS NOT PRO PER. THE DISCLOSURE IN 2013-14 IS TO BE PRESUMED OUT OF REMA INING 6 BUNGALOWS BOOKED. THE LEARNED DR CONTENDED THAT IT WAS FOR T HE ASSESSEE TO PROVE THE FACTS WHICH WERE WITHIN HIS KNOWLEDGE. T HE LEARNED DR ACCORDINGLY URGED FOR REVERSAL OF THE ACTION OF THE CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF AUTHORITIES BELOW AND DOCUMENTS AND M ATERIAL REFERRED TO AND RELIED UPON IN THE COURSE OF HEARING. THE ADDI TION TOWARDS ALLEGED UNDER-REPORTING OF UNDISCLOSED INCOME FROM TWO BUIL DING PROJECTS UNDER CONSTRUCTION BY THE ASSESSEE IS IN DISPUTE. THE ASSESSEE IN THE INSTANT CASE IS IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL PROJECT. A SURVEY WAS CONDUCTED AT THE BUSINESS PREMISE OF THE ASSESSEE ON 27.04.2011 WHEREIN CERTAIN LOOSE PA PERS/DOCUMENTS WERE FOUND AND STATEMENT UNDER S. 133A WAS RECORDED . THE ASSESSEE CONCEDED EXISTENCE OF ON-MONEY IN CASH OUTSIDE BOOK S WITH RESPECT TO BOTH THE PROJECTS/SCHEMES. AS REGARDS SCHEME NAMEL Y EARTH 12, THE ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 13 ASSESSEE IN THE COURSE OF SURVEY AND THEREAFTER AGA IN IN THE COURSE OF PROCEEDINGS BEFORE THE DDIT (INV.) CONCEDED UNDISCL OSED ON-MONEY AT AN AVERAGE RATE OF RS.42 LAKHS PER FLAT GIVING RISE TO UNDISCLOSED INCOME OF RS.5.04 CRORE EMANATING FROM THE AFORESAI D PROJECT. THE ASSESSEE, HOWEVER, WHILE FILING THE RETURN DECLARED UNDISCLOSED INCOME SPANNING OVER TWO AYS. 2011-12 & 2012-13 AGGREGATIN G TO RS.4.06 CRORE. AS REGARDS AY 2012-13 IN QUESTION, THE ASSE SSEE INCLUDED RS.2.66 CRORES TOWARDS UNDISCLOSED INCOME FROM EAR TH 12. THE AO DISPUTED THE CORRECTNESS OF THE DISCLOSURE AND ADDE D AN AMOUNT TO RS.70 LAKHS FOR WHICH FACTS HAVE BEEN ELABORATELY D EALT WITH IN PRECEDING PARAS. THE SHORT QUESTION THAT ARISES FO R DETERMINATION IS WHETHER AVERAGE RATE OF RS.42 LAKHS IS REQUIRED TO BE ADOPTED IN PLACE OF RS.35 LAKHS ADOPTED BY THE ASSESSEE IN RESPECT O F CERTAIN FLATS. IT IS THE CASE OF THE ASSESSEE THAT AS PER THE DETAILS OF DISCLOSURE PROVIDED BEFORE THE DDIT (INV.) ON 25 TH JULY, 2011, IT WAS CLEARLY POINTED OUT IN THE NARRATION THAT RS.35 LAKHS HAVE BEEN RECEIVED TOWARDS ON-MONEY IN CASH FOR SOME FLATS AND RS.42 L AKHS PER FLAT FOR OTHER FLATS AND THEREFORE, THE QUANTUM OF DISCLOSUR E MADE IN THE STATEMENT UNDER S. 133A IS NOT SACROSANCT. IN THIS BACKGROUND, THE PROBATIVE VALUE OF THE STATEMENT AND RE-STATEMENT T HEREOF BEFORE DDIT(INV.) IS THUS UNDENIABLE. ONLY MATTER FOR CON SIDERATION IS THE EXTENT OF QUANTIFICATION OF UNDERSTATEMENT OF INCOM E. THE REVENUE, ON THE OTHER HAND, CONTENDS THAT THE ASSESSEE IS PR ECLUDED FROM TAKING SUCH PLEA IN VIEW OF THE ADMISSION MADE AT THE FIRS T INSTANCE AS WELL AS ITS SUBSEQUENT REITERATION BEFORE THE DDIT(INV.). THE REVENUE ALSO CHALLENGES THE NON-INCLUSION OF ON-MONEY OF RS.42 L AKHS IN RESPECT OF ONE FLAT (FLAT NO.101) FOR WHICH THE BOOKING IS CLA IMED TO HAVE BEEN CANCELLED AND SUBSEQUENT BOOKING DID NOT FETCH ANY ON-MONEY. 7. A PERUSAL OF THE FACTS AND THE CIRCUMSTANCES OF THE CASE CLEARLY SUGGESTS THAT WHAT IS IN QUESTION IS THE QUANTUM OF CLANDESTINE INCOME ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 14 AND NOT THE EXISTENCE OF CLANDESTINE INCOME ITSELF. THUS, THE PRESENCE OF ON-MONEY INVOLVED ON SALE OF RESIDENTIAL UNITS R EMAINS UNDISPUTED. WHAT IS DISPUTED IS QUANTUM THEREOF. IN THIS BACKD ROP, A PERUSAL OF THE STATEMENT GIVEN BY THE KEY DIRECTOR IN CONSULTA TION WITH OTHER TWO DIRECTORS AT PARA 3.3 OF THE ORDER GIVES AN UNQUALI FIED IMPRESSION THAT ON-MONEY INVOLVED PER FLAT WAS ABOUT RS.42 LAKHS ON AVERAGE. NATURALLY, SUCH INFORMATION IS IN THE PERSONAL KNOW LEDGE OF THE ASSESSEE. THE ASSESSEE AT THE LATER STAGE, AFTER T HREE MONTHS, HAS MADE SOME ALTERATION IN ITS ORIGINAL NARRATIVE TO SAY TH AT SOME FLATS FETCHED ON-MONEY OF RS.35 LAKHS ONLY. PARADOXICALLY, WHILE TAKING SUCH STAND, THE ARITHMETICAL CALCULATION OF DISCLOSURE C ONTINUED TO BE MADE AT AN AVERAGE RATE OF RS.42 LAKHS. THE ASSESSEE HA S NOT BROUGHT ON RECORD ANY MATERIAL FOR SHIFT IN EARLIER STAND ON Q UANTIFICATION OF RS.42 LAKHS. THE STATEMENT GIVEN AT THE FIRST INSTANCE, ON THE OTHER HAND, SUGGESTS THAT WHILE SOME FLATS WERE SOLD AT LOWER O N-MONEY, OTHER FLATS WERE SOLD SIMULTANEOUSLY AT A MUCH HIGHER REC EIPT OF ON-MONEY AND THEREFORE, AVERAGE RATE OF RS.42 LAKHS WAS CONS CIOUSLY ADMITTED BY THE KEY DIRECTOR HOLDING PERSONAL KNOWLEDGE OF T HE FACT AND AFTER PROPER CONSULTATION WITH OTHER DIRECTORS. THE QUAN TIFICATION OF UNDISCLOSED INCOME @ RS.42 LAKHS PER FLAT CONTINUED EVEN AFTER THREE MONTHS BEFORE THE DDIT (INV.). IN THESE CIRCUMSTAN CES, IT IS DIFFICULT TO UNDERSTAND THE MERIT IN THE CASE MADE OUT ON BEH ALF OF THE ASSESSEE AND FOR ACCEPTANCE OF LOWER RATE OF ON-MONEY. THE CIT(A) IN OUR VIEW HAS DRAWN WRONG PERSPECTIVE OF THE FACTS. THE CIT(A) OBSERVED THAT WHEN THE BOOKING OF FLATS DID NOT EXIST, THE P RESUMPTION OF RS.42 LAKHS PER FLAT IS NOT RELEVANT. THIS IS A PERVERSE STATEMENT ON FACTS. AT LEAST 11 FLATS ARE SHOWN TO BE BOOKED BEFORE DAT E OF SURVEY. OTHER ONE FLAT WAS ALSO BOOKED BUT CLAIMED TO BE CANCELLE D. BESIDES, THE ASSESSEE HIMSELF ADMITS TO HAVE RECEIVED ON-MONEY A LREADY AT A PARTICULAR RATE WHICH HE HAS SOUGHT TO DILUTE AT A LATER STAGE UNILATERALLY WITHOUT CORROBORATION. WE DO NOT FIND ANY GOOD REASON IN ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 15 SUCH ACTION. THE STATEMENT MADE IS CATEGORICAL BAS ED ON A PERSONAL KNOWLEDGE OF THE ASSESSEE. A DEPARTURE THEREFROM F OR THE PURPOSE OF QUANTIFICATION CANNOT BE DECIPHERED CURSORILY. THE REFORE, ADDITION OF RS.28 LAKHS (TOWARDS UNDERSTATEMENT OF ON-MONEY OF 4 FLATS) OUT OF RS.70 LAKHS ON THIS SCORE REQUIRES TO BE CONFIRMED AND THE ORDER OF THE CIT(A) REQUIRES TO BE SET ASIDE TO THIS EXTENT. THE ACTION OF THE CIT(A) HOWEVER APPEARS JUSTIFIED WITH RESPECT TO DE LETION OF ADDITION TO THE EXTENT OF RS.42 LAKHS FOR THE REASONS GIVEN BY THE CIT(A). IT IS A MATTER OF RECORD THAT FLAT SOLD EARLIER AT A LOWE R PRICE WAS CANCELLED WHICH WAS RE-BOOKED IN THE SUBSEQUENT FINANCIAL YEA R AT A PRICE WHICH IS CLOSE TO THE PRICE OF THE OTHER FLATS. THUS, TH E PREPONDERANCE OF PROBABILITIES WEIGH IN FAVOUR OF THE ASSESSEE AND T HUS, ACTION OF THE CIT(A) IN THIS REGARD DOES NOT CALL FOR INTERFERENC E. IN CONCLUSION, THE ADDITION OF RS.28 LAKHS OUT OF RS.70 LAKHS BY THE A O CONCERNING PROJECT EARTH 12 DESERVES TO BE SUSTAINED AND FOR REMAINING AMOUNT THE DELETION MADE BY THE CIT(A) IS CONFIRMED. 7.1 WE SHALL NOW ADVERT TO THE ADDITION OF RS.1.34 CRORES TOWARDS ON-MONEY OF PROJECT EARTH ERRITA. THE ASSESSEE H AS INCLUDED ON- MONEY OF RS.2.56 CRORE FOR 4 BUNGALOWS ONLY AS AGAI NST INITIAL ADMISSION BEFORE DDIT (INV.) FOR BOOKING OF 6 BUNGA LOWS. IN THIS REGARD, THE ASSESSEE HAS SOUGHT TO EXPLAIN THAT ON- MONEY TOWARDS REMAINING TWO BUNGALOWS HAVE BEEN OFFERED IN AY 201 3-14. IF THIS IS SO, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF CIT (A) GRANTING RELIEF. HOWEVER, IN THE SAME VAIN, WE OBSERVE THAT THE CIT( A) HAS LOST SIGHT OF THE PERTINENT ASPECT THAT THE ASSESSEE WAS ALSO EXPECTED TO ACCOUNT FOR ON-MONEY TOWARDS REMAINING OTHER 6 BUNGALOWS IN THE ENSUING YEARS. IT IS EQUALLY POSSIBLE THAT TWO BUNGALOWS F OR AY 2013-14 CLAIMED TO BE RELATABLE TO AY 2012-13 IN QUESTION I S OUT OF OTHER REMAINING 6 BUNGALOWS. NOTICEABLY, THE ASSESSEE HA S ALSO NOT EXPLAINED AS TO WHAT PROMPTED HIM TO MAKE ALLEGED W RONG ASSERTIONS ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 16 BEFORE THE SURVEY TEAM AND REPEATED AGAIN BEFORE TH E DDIT (INV.) AFTER A GAP OF NEARLY THREE MONTHS ON THE FACTUAL ASPECT THAT SIX BUNGALOWS HAVE ALREADY BEEN BOOKED AT THE TIME OF SURVEY AS R EFERRED TO IN REPLY DATED 25.07.2011 BEFORE THE DDIT (INV.) REPRODUCED AT PAGE NO.4 OF THE ASSESSMENT ORDER. THE FACTS REGARDING DISCLOSU RE OF ON-MONEY, IF ANY, CONCERNING REMAINING 6 BUNGALOWS HAS NOT BEEN EXAMINED BY THE CIT(A) TO ENABLE IT TO EXCLUDE THE ADDITION OF RS.1 .30 CRORES IN RESPECT OF 2 BUNGALOWS. WE, THEREFORE, ARE OF THE C ONSIDERED VIEW THAT ISSUE REGARDING ADDITION OF RS.1.30 CRORES TOWARDS 2 BUNGALOWS REQUIRES TO BE REMITTED BACK TO THE FILE OF THE CIT (A) FOR DE NOVO EXAMINATION AND FOR PASSING FRESH ORDER IN ACCORDAN CE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 7.2 BEFORE WE CONCLUDE, WE HASTEN TO ADD THAT WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT( A) FOR ACCEPTING LOWER DECLARATION BY RS.4 LAKHS ON SALE OF 4 BUNGAL OWS FOR THE REASONS BORNE OUT FROM THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. SD/- SD/- (RAJPAL YADAV) (PRADI P KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: 28/06/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/2018 ITA NO. 195/AHD/16 [DCIT VS. M/S. ELEGANCE SKYZ PVT. LTD.] A.Y. 2012-13 - 17 /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56)