SAI SHIV DEVELOPERS, MUMBAI V. ACIT 21(2), MUMBAI

ITA 2095/MUM/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1746 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 11-05-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K R DAS
• Assessee Lawyers: D C JAIN
• Keywords: TDS
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, E, MUMBAI BEFORE SHRI R.S.SYAL, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) M/S SAI SHIV DEVELOPERS AMAR MAHAL, ANANDRAO DEVLE MARG, NEAR CHAND CINEMA, JUHU MUMBAI-400089 PAN:AANFS2229J. . APPELLANT V/S ACIT 21(2), C-10, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPKLEX, BANDRE(E), MUMBAI- RESPONDENT APPELLANT BY : SHRI D C JA IN RESPONDENT BY : SHRI K R DAS O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 08.02.2010 OF CIT(A)-32, MUMBAI FOR THE ASSESSMENT YEAR 2006-07 ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS IN THIS APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.4,02,11,000/- OUT OF TOTAL ADDITIO NS OF RS.7,91,78,829/- MADE BY THE AO AS UNEXPLAINED INCOME ON ESTIMATE BASIS (RS.3,74,81,000/- OUT OF ON-MONEY ON SALE OF FLATS OF RS.7,41,08,829/- RS.6,30,000/- OUT OF BROKERAGE ON SALE OF FLATS OF RS.11,70,000/- AND RS.21,00,000/- OUT OF CAR PARKING CHARGES OF RS.39,00,000/- 3. UNDER THE FACTS AND CIRCUMSTANCES THE LEARNED CIT(A) HAS ERRED IN NOT DECIDING THE ADDITIONS OF RS.25,000/- MADE BY THE ASSESSING OFFICER ON ADHOC BASIS. 3. THE RELEVANT FACTS EMERGING FROM THE RECORDS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE B USINESS OF BUILDERS AND DEVELOPERS. THE ASSESSEE PURCHASED PLOT OF LAND AND CONSTRUCTED A RESIDENTIAL BUILDING IN THE NAME AND STYLE OF SAIBABA ENCLAVE ON PLOT NO.A, BUILDING NO .3, S V ROAD. GOREGAON, MUMBAI. THE CONSTRUCTION WORK W AS GIVEN TO LABOUR CONTRACTOR AND THE MATERIAL WAS SUPPLIED BY THE ASSESSEE. . THE ASSESSEE FILED ITS RETURN OF INCOM E FOR THE ASSESSMENT YEAR 2006-07 ON 31.10.2006 DECLARING TOT AL INCOME AT RS.73,46,120/-. THE ASSESSEE DECLARED NE T PROFIT ON THE BASIS OF WORK COMPLETED DURING THE YEAR. T HE RETURN OF ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 3 INCOME ACCOMPANIED BY AUDIT REPORT U/S 44AB, BALANC E SHEET, PROFIT AND LOSS ACCOUNT, STATEMENT OF TOTAL INCOME, TDS CERTIFICATE, CHALLANS ETC. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE T O EXPLAIN THE SOURCE OF INCOME WHICH HAS BEEN OFFERED TO TAX AND NUMBER OF FLATS SOLD DURING THE YEAR AND THE AR EA OF EACH SUCH FLATS. THE ASSESSEE VIDE ITS COMMUNICATION DA TED 17.12.2008 EXPLAINED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND CONSTRUCT ED A RESIDENTIAL BUILDING ON PLOT NO.A, BUILDING NO.3, S V ROAD. GOREGAON, MUMBAI. THE ASSESSEE ALSO EXPLAINED THAT THE PROFIT WAS DECLARED ON THE BASIS OF WORK COMPLETED DURING THE YEAR. THE AMOUNT RECEIVED ON ACCOUNT OF BOOKING OF FLATS IS SHOWN AS DEPOSITS IN THE FLATS. THE DETAILS OF FLA TS SOLD AND BOOKED WERE ALSO PRODUCED BEFORE THE AO. THE ASS ESSEE DECLARED THAT IT HAS SOLD 39 FLATS DURING THE PERIO D RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO P ROCEEDED TO FRAME THE ASSESSMENT ON THE BASIS OF THE STATEME NTS OF SHRI ANTHONY FERNANDES AND KAMLESH YADAV RECORDED D URING THE SURVEY OPERATION CONDUCED ON 02.03.2006. THE A O MADE THE FOLLOWING DISALLOWANCE OF THE ADDITION : ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 4 I) CASH TRANSACTIONS FOR THE SALE OF 39 FLATS WHICH IS RECEIVED OUT OF BOOKS RS.7,12,02,601/- II) BROKERAGE @ RS.30,000/- PER FLAT FOR 39 FLATS RS. 11,70,000/- III) CAR PARKING AT THE RATE OF RS.1 LAKH PER FLAT FOR 39 FLATS RS. 39,00,000/- ------------------ RS.7,91,78,829/- DISALLOWANCE OF LUMP SUM EXPENSES RS. 25,000/- TOTAL INC OME RS.8,65,49,949/- 4. THE ABOVE SAID ADDITION WAS MADE BY THE AO BY ESTIMATING THE PRICE OF EACH FLAT AT THE RATE OF R S.4500/- PER SQ.FT AGAINST RS.2200 PER SQ.FT. STATED BY AO AS SHOWN BY THE ASSESSEE. AS REGARD BROKERAGE AT THE RATE OF RS.3 0,000/- PER FLAT AND CAR PARKING AT THE RATE OF RS,1,00,000/-, THE AO HAS ESTIMATED THE SAME ON THE BASIS OF STATEMENT OF SHR I ANTHONY FERNANDES,, REAL ESTATE AGENT AND SHRI KAMLESH YADA V RECORDED DURING THE SURVEY PROCEEDINGS AND SUBSEQUE NT THEREOF. THOUGH THERE WAS SOME MATERIAL IN THE FOR M OF LOOSE SHEETS IMPOUNDED DURING THE SURVEY BUT THE AO HAS M ADE ADDITION ON THE BASIS OF THE STATEMENT. THE DISAL LOWANCE OF RS.25000/- LUMP SUM AMOUNT OF EXPENSES BEING PART OF PAYMENT TO PETTY LABOURS, AS THE SAID EXPENSES COU LD NOT BE VERIFIED. ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 5 5. ON APPEAL, THE CIT(A) ISSUED A REMAND REPORT F OR CROSS-EXAMINATION OF WITNESSES BY THE ASSESSEE SINC E THE AO DID NOT ALLOW THE ASSESSEE TO CROSS-EXAMINE SHRI AN THONY FERNANDES AND SHRI KAMLESH YADAV WHOSE STATEMENTS W ERE RECORDED DURING THE SURVEY PROCEEDINGS AND SUBSEQUE NT THEREOF AND ALSO RELIED UPON BY THE AO. THE CIT(A ) CONFIRMED THE ADDITION TO THE EXTENT OF 21 FLATS W HICH WERE SOLD OUT DURING THE PERIOD RELEVANT TO THE ASSESSM ENT YEAR AN ALSO PART OF THE LIST OF FLATS IN THE LOOSE SHEETS PAGE 8 OF THE IMPOUNDED DOCUMENTS. THE CIT(A), ACCORDINGLY, CON FIRMED THE ADDITION TO THE EXTENT OF RS.3,74,81,000/- AND DELETED THE REMAINING ADDITION IN RESPECT OF FLATS AS FAR AS TH E RATES OF FLATS ARE CONCERNED. THE CIT(A) HAS ALSO CONFIRME D THE ADDITION TOWARDS BROKERAGE AS ESTIMATE AT THE RATE OF RS.30,000/- PER FLAT AND THE CAR PARKING CHARGES AT THE RATE OF RS.1,00,000/- FOR 21 FLATS. THE CIT(A)S ORDER IS BASED MAINLY ON THE IMPOUNDED DOCUMENT AT PAGE 8 OF THE LOOSE SH EETS WHICH CONTAINS THE DETAILS OF 31 FLATS OUT OF WHIC H ONLY 21 FLATS WERE PART OF THE FLATS SOLD DURING THE YEAR R ELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THIS WAY, THE CIT(A) HAS TOOK THE RATE AS MENTIONED IN THE IMPOUNDED DOC UMENTS AT PAGE 8 OF LOOSE SHEETS, WHEREAS THE AO ESTIMATED T HE RATE PER SQ.FT.AT RS.4500/-. BUT THE CIT(A) MADE ENHANCE D ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 6 ASSESSMENT ON THE BASIS OF THE AREA OF THE FLATS IN RESPECT OF 21 FLATS BECAUSE, THE AO DID NOT DISPUTE THE AREA O F THE FLATS SOLD AND DISCLOSED BY THE ASSESSEE. WHEREAS THE CIT (A) MADE THE ADDITION AS PER THE AREA MENTIONED IN THE DOCUM ENTS NO.8 OF THE IMPOUNDED DOCUMENT. 6. GROUND NO.1 IS REGARDING WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITIONS OF RS.4,02,11,000/- O UT OF TOTAL ADDITIONS OF RS.7,91,78,829/- MADE BY THE AO AS UN EXPLAINED INCOME ON ESTIMATE BASIS (RS.3,74,81,000/- OUT OF O N-MONEY ON SALE OF FLATS OF RS.7,41,08,829/- RS.6,30,000/- OUT OF BROKERAGE ON SALE OF FLATS OF RS.11,70,000/- AND RS.21,00,000/- OUT OF CAR PARKING CHARGES OF RS.39, 00,000/- 7. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THE ADDITIONS WERE MADE BY THE AO ON THE BASI S OF STATEMENTS OF SHRI ANTHONY FERNANDES AND SHRI KAML ESH YADAV BY IGNORING THE STATEMENT OF SHRI ARUN MUCH ALA, THE PARTNER OF THE FIRM. THE ASSESSEE DEMANDED THE CR OSS- EXAMINATION BUT THE AO DID NOT ALLOW THE ASSESSEE T O CROSS- EXAMINE SHRI ANTHONY FERNANDES AND SHRI KAMLESH YAD AV. HOWEVER, AS PER THE ORDER OF THE CIT(A) THE ASSESSE E WAS GIVEN OPPORTUNITY TO CROSS-EXAMINE SHRI ANTHONY FER NANDES ON 23.11.2009. DURING THE COURSE OF CROSS-EXAMINATION SHRI ANTHONY FERNANDES RETRACTED HIS EARLIER STATEMENT RECORDED ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 7 ON 02.03.2006 DURING THE SURVEY AND 10.3.2006. THE AO SUBMITTED HIS REMAND REPORT DATED 08.12.2010.. THE LEARNED AR HAS POINTED OUT THE STATEMENTS OF SHRI ANTHONY F ERNANDES WAS RECORDED ON 02.03.2010 AND 10.03.2006 AND THE STATEMENT OF SHRI KAMLESH YADAV WAS RECORDED ON 04 .03.2006 AND THE STATEMENT OF MRS. VASANTI SHETTY WAS RECO RDED ON 02.03.2006 AND THE STATEMENT OF SHRI ARUN MUCHALA WAS RECORDED 13.03.2006. THE AO COMPLETED THE ASSESSME NT U/S 143(3) BY ESTIMATING THE ESTIMATE ON THE BASIS OF T HE STATEMENT OF SHRI ANTHONY FERNANDES AND SHRI KAMLES H YADAV AND IGNORING THE STATEMENT OF SHRI ARUN MUCHALA. HE HAS FORCEFULLY CONTENDED THAT THE STATEMENT RECORDED DU RING THE SURVEY ARE NOT SIGNED BY AUTHORIZE OFFICER WHO HAS ADMINISTERED THE OATH AND RECORDED THE STATEMENT O F SHRI ANTHONY FERNANDES DATED 10.02.2006, SHRI KAMLESH Y ADAV DATED 04.03.2006 AND MRS. VASANTI SHETTY DATED 02. 03.2006. HE HAS REFERRED THE STATEMENTS FROM PAGES 95 TO 1 20 OF THE PAPER BOOK AND SUBMITTED THAT WHEN THE STATEMENTS W ERE NOT SIGNED BY AUTHORIZED OFFICER WHO HAS ADMINISTERED THE OATH THEM THE SAME CANNOT BE ADMITTED AS EVIDENCE AGAIN ST THE ASSESSEE. EVEN OTHERWISE WHEN THE ASSESSEE WAS NOT ALLOWED THE CROSS-EXAMINATION OF THE PERSONS THE SAID STATE MENTS CANNOT BE USED AGAINST THE ASSESSEE. 8. THE LD. AR HAS FURTHER STATED THAT THE AO HAS E STIMATED CASH COMPONENT OF RS.2300/- PER SQ.FT. IN THE TOT AL SALE PRICE ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 8 ESTIMATED OF RS.4500/- PER. SQ.FT. WHEREAS THE STA TEMENTS GIVEN BY SHRI ANTHONY FERNANDES AND SHRI KAMLESH YADAV STATES DIFFERENT RATES. THUS, THERE IS NO BASIS F OR ESTIMATING THE SALE PRICE OF THE FLAT AT RS.4500/- WHICH IS NO T SUPPORTED EITHER BY DOCUMENTS IMPOUNDED OR BY THE STATEMENT WHICH ARE FULL OF CONTRADICTION. HE HAS REFERRED THE STATEME NT OF SHRI ANTHONY FERNANDES RECORDED ON 10.03.2006 AND ANSWER TO THE QUESTION NO.8 AS WELL AS QUESTION NO.23 AND STATED THAT WHILE REPLYING QUESTION NO.8, THE AVERAGE RATE PER SQ.FT. ALLEGEDLY STATED AS RS.3800/- PER SQ.FT IN RESPECT OF FLATS WHICH WERE ALREADY SOLD AND THE CURRENT BOOKING WERE AT THE RA TE OF ABOUT RS.4500/- PER SQ.FT.FOR THE REMAINING CONSISTING A BOUT 25 PER CENT. HE HAS FURTHER POINTED OUT, THE ANSWER TO THE QUESTION NO.23 THAT THE FLATS WERE SOLD AT THE RATE OF RS.3 525 PER SQ.FT., AS STATED IN THE SAID STATEMENT. THUS, THE LEARNED AR HAS SUBMITTED THAT WHEN THE STATEMENT ITSELF IS FULL OF CONTRADICTION THE SAME CANNOT BE RELIED UPON AND THE CREDITABILIT Y OF THE STATEMENT IS ALSO DOUBTFUL. SIMILARLY, HE HAS POIN TED OUT THE VARIOUS CONTRADICTIONS IN THE STATEMENT IN RESPECT OF ANSWER TO QUESTION NO.4,5 AND 30 OF SHRI ANTHONY FERNANDES A ND ANSWER TO QUESTION NO.7 BY SHRI KAMLESH YADAV. TH E LD. AR HAS FURTHER CONTENDED THAT NONE OF THE LOOSE SHEET IMPOUNDED DURING THE SURVEY WERE PREPARED BY THE ASSESSEE OR ON BEHALF OF THE ASSESSEE AND THEREFORE THE SAME CANNOT BE U SED AS AN EVIDENCE AGAINST THE ASSESSEE. THE SAID LOOSE SHE ETS HAS NO ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 9 EVIDENTIARY VALUE WHEN THE SAME ARE NOT PREPARED BY THE ASSESSEE OR ON BEHALF OF THE ASSESSEE. HE HAS REF ERRED THE STATEMENT OF SHRI SHRI ARUN MUCHALA, PARTNER OF TH E ASSESSEE FIRM, WHEREIN IT WAS STATED THAT SHRI ANTHONY FERNA NDES AS WELL AS SHRI KAMLESH YADAV WERE NOT APPOINTED AS AN AGENT OR BROKER OF THE ASSESSEE AND THEREFORE, THEY WER E NOT DOING THE WORK ON BEHALF OF THE ASSESSEE. THE LEARNED AR HAS SUBMITTED THAT AS PER THE STATEMENTS OF SHRI ANTHON Y FERNANDES AND SHRI KAMLESH YADAV, BROKERAGE CHARG ES AND SALE OF CAR PARKING HAS NO BASIS AS THERE IS NO SUC H RECORD TO CORROBORATE THE STATEMENTS. THE AO ESTIMATED THE BROKERAGE AT RS.30000/- PER FLAT AND CAR PARKING AT RS.1,00,0 00, WHEREAS THERE IS NO SUCH DOCUMENT OR MATERIAL TO SUPPORT TH E SAID ESTIMATE. AS REGARD THE CAR PARKING IS CONCERNED IT IS PURELY ESTIMATION MADE BY THE AO ON THE BASIS OF THE STAT EMENT OF SHRI ANTHONY FERNANDES AND SHRI KAMLESH YADAV WHICH ARE NOT ADMISSIBLE EVIDENCE. HE HAS POINTED OUT THAT THE LOOSE SHEETS NO.10,11,14,15 AND 16 ARE ONLY THE ROUGH CA LCULATION MADE BY THE REAL ESTATE AGENT AND THEREFORE CANNOT BE CONSIDERED AS RELEVANT EVIDENCE FOR MAKING THE ADDI TION WITH RESPECT TO THE RATE, BROKERAGE AND CAR PARKING PLAC E. THE LEARNED AR HAS VEHEMENTLY CONTENDED THAT THE AREA O F FLATS ARE SOLD AS PER THE SALE AGREEMENTS AND THE ASSESSE E HAS OFFERED THE INCOME AS PER THE SALE DOCUMENTS. THE RE IS NOT BASIS FOR MAKING THE ADDITION FOR THE AREA WHICH IS NOT PART OF ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 10 THE SALE AGREEMENT. EVEN OTHERWISE WHEN THE REVENU E HAS ACCEPTED THE RATE, AREA AND NO PAYMENT OF BROKERAGE AND CAR PARKING AS DISCLOSED AND RECORDED BY THE ASSESSEE I N THE BOOKS OF ACCOUNT WITH RESPECT TO 18 FLATS SOLD DUR ING THE YEAR THEN THERE IS NO BASIS FOR NOT ACCEPTING THE RATE, AREA, BROKERAGE AND CAR PARKING IN RESPECT OF THE REMAINI NG 21 FLATS WHEN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE ACCE PTED WITH RESPECT TO THE REMAINING 18 FLATS SOLD DURING THE YEAR. HE HAS REFERRED THE DETAILS OF FLAT NO.7 OF D-BUILDIN G GIVEN IN THE LOOSE SHEET NO.8, WHEREAS THE TERRACE OF 280 ST.FT STATED TO HAVE BEEN SOLD @ RS.3575 PER SQ.FT AND FLAT ALSO ST ATED TO HAVE BEEN SOLD AT THE SAME RATE AND SUBMITTED THAT THE DETAILS RECORDED IN THE SAID LOOSE SHEET NO.8 ITSEL F SHOWS THAT THE SAME ARE NOT CORRECT AND HOW THE RATE OF OPEN T ERRACE AND FLAT CAN BE SAME. HE HAS RELIED UPON THE DECISIO N OF THE HONBLE KERALA HIGH COURT IN THE CASE OF PAUL MAT HEWS AND SONS V/S CIT REPORTED IN 263 ITR 101 AND THE DECISI ON OF THE HOH. MADRAS HIGH COURT IN THE CASE OF CIT V/S S KH ANDAR KHAN CHAND REPORTED IN 300 ITR 157 AND SUBMITTED T HAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY UNDE R THE PROVISIONS OF SECTION 133A HAS NO EVIDENTIARY VALUE IN THE ABSENCE OF MATERIAL OR RECORD TO PROVE AND CORROBOR ATE THE CONTENDS OF THE STATEMENT. THEREFORE, NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF THE STATEMENT RECORDED DURING THE ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 11 SURVEY PROCEEDINGS. HE HAS ALSO RELIED UPON THE F OLLOWING DECISIONS : . I) KAILASHCHAND V/S ITO (29 SOT 63(JODH) II) RAVINDRAKUMAR V/S DCIT (33 SOT 251) (DELHI) III) CIT V/SAULIKKUMAR K SHAH (307 ITR 137) IV) EMBEE CLEARING AND SHIPPING SERVICES PVT LTD V /S ACIT (12 SOT 227 (MUM TRIBUNAL V) ADDL.CIT V/S SHAILESH S SHAH (31 ITD 153) VI) M/S UNITED PRODUCTS LTD V/S ITO (22 SOT 429) (M UM) THUS, THE LEARNED AR HAS SUBMITTED THAT WHEN NO OA TH WAS ADMINISTERED TO THE PERSONS WHOSE STATEMENTS WERE R ECORDED THEN THE STATEMENTS CANNOT BE TAKEN INTO ACCOUNT AS RELEVANT EVIDENCE. 9. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE ADDITION IS BASED ON THE DOCUMENTARY EVIDENCE A ND NOT SOLELY ON THE BASIS OF STATEMENTS RECORDED DURING THE SURVEY PROCEEDINGS AND SUBSEQUENT THEREOF. HE HAS CONTENDE D THAT THE DOCUMENTARY EVIDENCE HAS DULY CORROBORATED THE STATEMENT OF SHRI ANTHONY FERNANDES AND SHRI KAMLE SH YADAV. THEREFORE, IT IS NOT A CASE OF ADDITION MAD E MERELY ON THE BASIS OF THE STATEMENTS RECORDED DURING THE CO URSE OF SURVEY PROCEEDINGS BUT THERE WAS ENOUGH DOCUMENTARY ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 12 EVIDENCE TO CORROBORATE THE STATEMENTS AND THEREFOR E, THE ADDITION CONFIRMED BY THE CIT(A) IS JUSTIFIED WHIC H IS BASED UPON THE DOCUMENTARY EVIDENCE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELLOWS. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD INCLUDING THE STATEMENTS RECORDED AND RELIED UPON BY THE REVENUE AS WELL AS THE IMPOUNDED DOCUMENTS. I T IS EVIDENT FROM THE RECORD THAT EXCEPT THE STATEMENT RECORDED ON 02.03.2006 OF MR.ANTHONY FERNANDES ALL OTHER ST ATEMENTS HAVE NOT BEEN ATTESTED BY ANY OF THE AUTHORIZED OFF ICER WHO ADMINISTERED THE OATH TO THE WITNESSES. THUS, IT I S CLEAR THAT EXCEPT THE STATEMENT OF SHRI ANTHONY FERNANDES R ECORDED ON 02.03.2006 ALL OTHER STATEMENTS ARE NOT RECORDED AF TER ADMINISTERING THE OATH AS NOTHING REVEALS FROM THE STATEMENT THAT THE AUTHORIZED OFFICER HAS ADMINISTERED THE OATH. EVEN OTHERWISE, THE STATEMENT RECORDED U/S 133A HAVE NO T EVIDENTIARY VALUE UNLESS AND UNTIL THE SAME ARE CO RROBORATED BY THE DOCUMENTARY EVIDENCE. THIS PROPOSITION OF LA W SET OUT BY THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF PAUL MATHEWS AND SONS V/S CIT (SUPRA) AS WELL AS THE DECISION OF THE HOH. MADRAS HIGH COURT IN THE CASE OF CIT V/S S KHANDAR KHAN CHAND (SUPRA). ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 13 11. IN THE CASE IN HAND, ADMITTEDLY, THE STATEMENTS RELIED UPON BY THE REVENUE RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS AND EVEN SUBSEQUENT TO THE SURVEY WERE OF REAL ESTATE AGENTS AND NOT OF THE ASSESSEE OR OF ANY PER SON WORKING ON BEHALF OF THE ASSESSEE OR CONNECTED WITH THE BUSINESS OF THE ASSESSEE. IT IS ALSO UNDISPUTED FA CT EMERGING FROM THE RECORD THAT SHRI ANTHONY FERNANDES AND HI S ASSISTANT SHRI KAMLESH YADAV WERE DOING THEIR BUSINESS FROM THE PREMISES OF THE ASSESSEE. WE FIND THAT THE DOCUMENT S IMPOUNDED DURING THE SURVEY IN THE SHAPE OF LOOSE S HEETS WERE ALSO ADMITTEDLY PREPARED BY THE ASSISTANT OF S HRI ANTHONY FERNANDES, REAL ESTATE AGENT. 11.1 THE AO HAS MADE THE ADDITION BY ADOPTING THE E STIMATED RATE OF SALE PRICE OF THE FLAT AT THE RATE OF RS.45 00/- PER SQ.FT. WHICH IS NOT BORN OUT FROM ANY OF THE IMPOUNDED DO CUMENTS. THEREFORE, THE SAID RATE OF RS.4500/- AS ESTIMATED BY THE AO IS PURELY BASED ON THE STATEMENTS OF SHRI ANTHONY F ERNANDES AND SHRI KAMLESH YADAV IS NOT SUSTAINABLE PARTICUL ARLY WHEN THESE TWO PERSONS IN THEIR OWN STATEMENTS HAVE ST ATED WHILE ANSWERING THE QUESTION NO.8 THAT THE RATE OF FLATS SOLD IS RS.3800 PER SQ.FT. AND THE CURRENT BOOKING WAS STAT ED AT AROUND RS.4500/- PER SQ. FT.. AS FAR AS THE ASSESSE D INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IS CONC ERNED, THE SAME IS ASSESSED ONLY WITH RESPECT TO THE FLATS SOL D DURING THE ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 14 YEAR AND NOT FOR THE BOOKING OF THE FLATS UNDERTAKE N BY THE ASSESSEE. 12. EVEN OTHERWISE AS PER THE STATEMENTS OF SHRI AN THONY FERNANDES AND SHRI KAMLESH YADAV, THE RATE OF RS. 4500/- PER SQ.FT. IS NOT PERTAINING TO THE FLATS WHICH WER E ALREADY SOLD. NEEDLESS TO SAY, SHRI ANTHONY FERNANDES WAS NOT CRO SS- EXAMINED BY THE ASSESSEE DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND LATER ON WHEN THE CIT(A) ALLOWED T HE CROSS- EXAMINATION IN THE REMAND PROCEEDINGS THE SHRI ANTH ONY FERNENDES RETRACTED FROM HIS EARLIER STATEMENT. TH EREFORE, THERE IS NO EVIDENTIARY VALUE OF THESE STATEMENTS O F SHRI ANTHONY FERNANDES AND SHRI KAMLESH YADAV. WE FURT HER NOTE THAT THE AO MADE THE ADDITION FOR THE SALE RATE ON THE ASSUMPTION THAT THE ASSESSEE HAS SHOWN THE RATE AT RS.2200/- PER SQ.FT., WHEREAS, EVEN AS PER THE SALE DOCUMENTS AND RATE ADMITTED AND UNDISCLOSED BY THE ASSESSEE IN MAJORITY OF FLATS IS RS.2750 PER SQ.FT. AND IN SOM E CASES RS.3280/- PER SQ.FT.. 13. THE CIT(A) HAS HEAVILY RELIED UPON THE IMPOUNDE D DOCUMENT NO.8 WHICH IS AT PAGE 160 OF THE PAPER B OOK, WHEREIN THE RATE AND AREA OF THE VARIOUS FLATS HAVE BEEN MENTIONED. THE CIT(A) HAS ACCEPTED THE RATES AND A REA GIVEN IN THE SAID DOCUMENTS BUT HAS NOT ACCEPTED THE B ROKERAGE ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 15 MENTIONED IN THE SAID DOCUMENTS, THEREFORE, THE DOC UMENTS CANNOT BE ACCEPTED IN PART. MOREOVER, THE AREA OF A FLAT SOLD BY THE ASSESSEE CANNOT BE MORE THAN THE AREA WHICH IS TRANSFERRED BY THE SALE DOCUMENT AND THE PURCHASER CANNOT HAVE LEGAL RIGHT AND TITLE OVER THE AREA MORE THAN WHAT HAS TRANSFERRED UNDER THE SAID DOCUMENT. EVEN OTHERWIS E THE AREA IS ALWAYS CONSTANT AND SUBJECT TO PHYSICAL VERIFICA TION BUT THE AO DID NOT TAKE ANY STEP EITHER DURING THE ASSESSME NT PROCEEDINGS OR DURING THE REMAND PROCEEDINGS TO VER IFY PHYSICALLY AND ASCERTAIN ACTUAL POSITION OF FLATS SOLD BY THE ASSESSEE DURING THE YEAR. THE CIT(A) WHILE CONFIRM ING THE ADDITION AS PER THE AREA MENTIONED IN THE IMPOUNDED DOCUMENT NO.8 HAS COMMITTED THE GRAVE ERROR BECAUSE THE AREA WAS NOT DISPUTED BY THE AO AS DISCLOSED BY THE ASSESSEE AND MENTIONED IN THE SALE DOCUMENTS. MOREOVER, TH E IMPUGNED ORDER OF CIT(A) REGULATED ENHANCED ASSE SSMENT TO THE EXTENT OF ADDITION OF AREA AS PER THE IMPOU NDED DOCUMENT NO.8 WITHOUT FOLLOWING THE PROCEDURE U/S 2 51(2) OF THE ACT. THEREFORE THE ADDITION OF AREA BY CIT(A ) IS NOT SUSTAINABLE. 14. HOWEVER, WHEN THE DOCUMENTS WERE IMPOUNDED FROM THE PREMISES OF THE ASSESSEE AND CONTAIN THE INFORMATIO N ABOUT THE BUSINESS OF THE ASSESSEE THEN THE RATES MENTION ED IN THE IMPOUNDED DOCUMENT NO.8 AND CORROBORATES THE STAT EMENTS ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 16 OF SHRI ANTHONY FERNANDES RECORDED DURING THE SUR VEY ON 2.3.2006. THEREFORE, THE CONFIRMATION OF ADDITION B Y THE CIT(A) TO THE EXTENT OF RATES MENTIONED IN DOCUMENT NO.8 IS JUST AND PROPER. HENCE, WE UPHOLD THE ORDER OF THE CIT(A) TO THAT EXTENT. 15. SINCE, THERE IS NO DOCUMENTARY EVIDENCE WITH RE SPECT TO THE SALE OF CAR PARKING AREA EXCEPT THE DOCUMENT NO .15 OF THE IMPOUNDED DOCUMENTS WITH RESPECT TO FLAT NO.C-38, W HEREIN ALSO RS,.50,000/- ARE MENTIONED AGAINST CAR PARKING . THEREFORE, THERE IS NO BASIS FOR MAKING ADDITION OF RS.1,00,000/- FOR EACH FLAT FOR CAR PARKING. TH E AO HAD NOT MADE ANY INQUIRY OR VERIFICATION TO EXAMINE THE FAC TS REGARDING THE RATE OF SALE, AREA, ON MONEY PAYMENT OF BROKERA GE CHARGES AND CAR PARKING CHARGES FROM ANY OF THE AV AILABLE SOURCES INCLUDING THE BUYERS OF FLATS AS NONE OF TH E BUYERS OF THE FLATS WAS EXAMINED BY THE DEPARTMENT TO VERIFY THE INVOLVEMENT OF ON-MONEY PAYMENT AND OTHER CHARGES A S ALLEGED BY THE REVENUE. EVEN THE UNDERSTATEMENT O F AREA IS NOT EXAMINED BY THE AO AT ANY STAGE OF PROCEEDING S. THEREFORE, IT CANNOT BE PRESUMED THAT ALL THE FLATS WERE SOLD BY THE ASSESSEE THROUGH THE REAL ESTATE AGENT AND INVOLVED BROKERAGE CHARGES. 16. IN VIEW OF THE ABOVE DISCUSSION AND FACTS AND CIRCUMSTANCE OF THE CASE, WE ARE OF THE VIEW THAT W HEN THE ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 17 STATEMENTS U/S 133A WERE RECORDED AT BACK OF THE ASSESSEE AND WERE SUBSEQUENTLY RETRACTED BY THE WITNESSES H AVE NO EVIDENTIARY VALUE TO THE EXTENT OF CONTENTS WHICHE VER CORROBORATED BY DOCUMENTS IMPOUNDED DURING THE SUR VEY PROCEEDINGS. THEREFORE, NO ADDITION IS WARRANTED WITH REGARD TO THE AREA, PARKING CHARGES AND BROKERAGE. THE AD DITION REGARDING RATE IS SUSTAINABLE ONLY TO THE EXTENT OF RATES MENTIONED IN THE IMPOUNDED DOCUMENTS. . 17. GROUNDS OF APPEAL NO.2 IS REGARDING IS WHETHER THE CIT(A) JUSTIFIED IN NOT DECIDING THE ADDITIONS OF RS.25,000/- MADE BY THE ASSESSING OFFICER ON ADHOC BASIS. 16. REGARDING THE DISALLOWANCE OF RS.25,000/- LUMP SUM. AT THE TIME OF HEARING THE LEARNED AR OF THE ASSESSEE STATED THAT THE ASSESSEE DOES NOT PRESS THIS GROUND. THE LEAR NED DR HAS ALSO NO OBJECTION IF THE SAME IS DISMISSED AS NOT PRESSED. ACCORDINGLY, WE DISMISS GROUND NO.2 IN RESPECT OF ADDITIONS OF RS.25,000/- BEING NOT PRESSED BY THE ASSESSEE. ITA NO. 2095/MUM/2010 (ASSESSMENT YEARS: 2006-07) 18 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.06.2010 SD SD (R.S.SYAL) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11TH JUNE 2010 SRL:2610 COPY TO: 1. M/S SHIV DEVELOPERS AMAR MAHAL, ANANDRAO DEVLE MARG, NEAR CHAND CINEMA, JUHU MUMBAI-400089 PAN:AANFS2229J. 2.ACIT 21(2), C-10, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPKLEX, BANDRE(E), MUMBAI- 3. CIT-CITY-XXI 4. ADD.CIT 21(3), MUMBAI. 5. ACIT 12(30, MUMBAI 6. CCIT(A)-XI, MUMBAI 7. CIT(A),-32, MUMBAI 7. DR E BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI