ORBIT ENTERPRISES, MUMBAI V. ITO 15(2)(2), MUMBAI

ITA 2188/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79261 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-12-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 17-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: SANJEEV M SHAH
• Keywords: Sale consideration of property below Jantri Value; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Principle of natural justice; Source of fund; Additional evidence; Fair market value; Corroborative evidences; Block assessment; Reason to believe; Documents seized
• Section: 143(3); 147; 148; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND DR. S.T.M. PAV A LAN , JUDICIAL MEMBER ITA NO S . 2188 & 2189 /M/201 1 ASSESSMENT YEAR: 2005 - 06 & 2006 - 07 M/S. ORBIT ENTERPRISES, 401 - 402, DHEERAJ PLAZ A, HILL ROAD, OPP. BANDRA POLICE STATION, BANDRA (WEST), MUMBAI 400 050 PAN: AAAFO8570B VS. INCOME TAX OFFICER, WARD 15(2)(2) MATRU MANDIR, TARDEO, MUMBAI . (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJEEV M. SHAH REVENUE BY : SHRI M.L. PERUMAL DATE OF HEARING : 02.04. 201 4 DATE OF PRONOUNCEMENT : 25.06.2014 O R D E R PER R.C.SHARMA, A M : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2005 - 06 AND 2006 - 07, IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT. 2 . COMMON GRIEVANCE IN BOTH THE YEARS RELATES TO ADDITION MADE BY AO ON ACCOUNT OF ALLEGED ON MONEY RECEIVED BY ASSESSEE FROM UNIMARK REMEDIES LTD. TOWARDS PART SALE CONSIDERATION OF THE FLATS SOLD BY ASSESSEE. 3 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT T HE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE PROCESS OF CONSTRUCTI ON OF BUILDING KNOW N AS 'KAMLESHWAR - II' AT TAGORE ROAD, SANTACRUZ - WEST, MUMBAI - 54. THE BUILDING COMPRISE S OF STILTS + 11 FLOORS AND THERE WILL BE 23 FLATS AND TOTAL CONSTRUCTION AREA WILL BE 2433 0 ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 2 SQ. FT. AS ON 31/03/2005 WORK WAS COMPLETED UPTO 62.40%. THE ASSESSEE FIRM IS ADO PTING WORK COMPLETIO N METHOD FOR TAXATION AND FOR A.Y.2006 - 07, THE FIRM HAS SHOWN RS.61,08,803/ - AS TOTAL INCOME. M/S. UNIMARK REMEDIES LTD., IS A PHARMA COMPANY ASSESSED WITH THE ACIT CC 45 MUMBA I HAS PURCHASED TWO FLOORS AT 10 TH & 11 TH IN KAMELSHWAR - II FROM ASSESSEE FIRM M/S. O RBIT ENTERPRISES. M/S UNIMARK HAS TOTAL PURCHASE 7520 SQ. FT. AREA FOR THEIR OFFICE. THERE WAS A SEARCH & SEIZURE ACTION U/S.132 AT THE PREMISES OF M/S. UNIMARK RE M EDIE S LTD., BY THE DIT (INV.), MUMBAI AND SEARCH PARTY GOT SOME LO OSE PAPERS IN THE PREMISES OF TH E M/S. UNIMARK REMEDIES LTD. MR. MEHUL PAREKH, THE DIRECTOR OF THE COMPANY ADMITTED IN HI S STATEMENT GIVEN ON OATH THAT THE COMPANY HAS PURCHASED 7520 SQ. FT. AREA IN KAMLESHWAR - II. ACCORDINGLY, M/S UNIMARK HAS GIVEN THE FOL LOWI NG AMOUNT TO PARTNER OF ASSESSEE FIRM MR. RAJUSHRI V. DHRUV IN CASH : - DATE M/S. ORBIT ENTERPRISES AMOUNT 09/03/200 5 BUILDER RAJUBHAI RS.9, 50 ,000/ - DOO/ - 19/ 03/200 5 BUILDER RAJUBHAI RS.1 0 ,00,000/ - 22/03/200 5 BUILDER RAJ UBHAI R S . 16, 00 ,000 / - 000/ - 28/03/200 5 BUILDER RAJ UBHAI R S.13,70, 000 / - 30/03/200 5 BUILDER RAJ UBHAI RS.11 , 50, 000 / - 30/03/200 5 BUILDER RAJ UBHAI RS. 7, 50 , 000/ - 11 /04/200 5 - DO - ( E XCHANGE) RS.7 , 00 , 000/ - TOTAL RS.7 5, 20 , 000 / - DURING THE F. Y.2004 - 05, THE M/S. UNIMARK REMEDIES LTD., HAS PAID CASH OF RS.68,20, 000 / - AND DURING F.Y. 2005 - 06 OF RS.7,00,000/ - . 4 . ON THE BASIS OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH AT M/S UNIMARK, THE AO RECORDED REASONS TO COME TO THE CONCLUSION THAT THERE IS AN ESCAPEMENT OF INCOME , ACCORDINGLY, NOTICE UNDER SECTION 148 WAS ISSUED . S UMMONS U/S.131 OF THE IT ACT, 1961 WERE ISSUED TO M/S. UNIMARK REMEDIES LTD., AN D OTHER FLAT OWNERS OF THE BUILDING. ALL THE FLAT OWNERS FILED THEIR COPIES OF ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 3 AGREEMENTS MADE WIT H ASSESSEE FIRM M/S. ORBIT ENTERPRISES FOR PURCHASE OF THEIR FLATS. MR. YOGINDRA NANITLAL PARIKH (DIRECTOR FINANCE OF M/S. UNIMARK REMEDIES LTD.) ATTENDED ON BEHALF OF THE COMPANY AND HIS STATEMENT WAS RECORDED ON OATH ON 19/12/2008. SOME OF TH E RELEVANT REPLIES OF MR. YOGINDRA NANITLAL PARIKH ARE REPRODUCED AS BELOW: - 1) I AM A CA AND I AM A DIRECTOR FINANCE OF M/S. U N I MARK REMEDIES LTD., SINCE 1999 AND MY DUTIES ARE TO LOOK AFTER ACCOUNTS AND ADMINISTRATION AND FINANCE AND I AM DRAWING SALARY O F RS.2 LACS PER MONTH. 2) THE COMPANY HAS HAS PURCHASED FLATS AT KAMLESHWAR TOWER FROM M/S. ORBIT ENTERPRISES AND AS PER DIARY I CONFIRM THE NOTINGS AND IT IS DECLARED AS INCOME OF THE COMPANY IN BLOCK YEAR ASSESSMENT MADE IN CENTRAL CIRCLE, MUMBAI. 3) AT PR ESENT I DO NOT REMEMBER THE EXACT DETAILS HOWEVER THE PAYMENT MADE TO M/S. ORBIT ENTERPRISES AS PER DIARY HAS BEEN ADMITTED AS INCOME ASSESSED IN THE ASSESSMENT OF M/S. UNIMARK REMEDIES LTD., IN THE BLOCK ASSESSMENT. AS PER THE AO, MR. RAMESH NANDLAL VO RA - CA AUTHORIZED BY M/S. ORBIT ENTERPRISES CONDUCTED CROS S EXAMINATION OF MR. YOGINDRA PARIKH. ON 31/10/2007, THE STATEMENT WAS RECORDED BY ACIT CIRCLE 45, MUMBAI OF MR. MEH U L PAREKH WHO IS THE DIRECTOR OF THE COMPANY WHERE MR. MEHUL PAREKH HAS ADMITTED ON MONEY HA S BEEN PAID TO M/S. ORBIT ENTERPRISES AT THE TIME OF FLAT PURCHASE AND AS PER SEIZED LOOSE PAPER S THESE SUMS HAD BEEN PAID TO MR. RAJESH DHRUV THE PARTNER OF THE FIRM. EVEN MR. YOGINDRA N. PARIKH, FINANCE DIRECTOR OF THE COMPANY HAS ADMITTED THAT THE ON MONEY HAS BEEN PAID TO M/S. ORBIT ENTERPRISES WHILE PURCHASES OF FLATS. THOUGH HE HAS ADMITTED THAT IN THE BLOCK YEAR ASSESSMENT OF THE COMPANY HAS DISCLOSED ADDITIONAL INCOME OF THES E PAYMENTS MADE TO M/S. ORBIT ENTERPRISES. THE AO FURTHER S TATED THAT I N METRO CITY LIKE MUMBAI WHERE THE FLATS ARE PURCHASED THROUGH THE BUILDERS, THERE IS OPE N SECRET THAT 80% ARE PAID BY CHEQUE AND 20% BY CASH AS ON MONEY . AFTER VERIFYING THE STATEMENTS AND COPIES OF LOOSE PAPERS RECEIVED FROM THE ACIT CC 4 5, MUMBAI , THE AO H E LD THAT THE ASSESSEE M/S. ORBIT ENTERPRISES HAS RECEIVED RS.68,20,000/ - FROM M/S. UNIMAR K RE M EDIES LTD., AS ON MONEY AT THE TIME OF PURCHASE OF FLATS AND THESE SUMS M/S. ORBIT ENTERPRISE HAD NOT OFFERED FOR ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 4 TAXATION. ACCORDINGLY, ADDITION WAS MADE UNDER THE PROVISIONS OF SECTION 69A OF THE IT ACT, 1961 AS UNEXPLAINED MONEY. WITH THESE REMARKS, THE TOTAL INCOME WAS COMPUTED BY THE AO AS UNDER : - 1. INCOME FROM OTHER SOURCES, AS PER LAST S CRUTINY ORDER DT. 26/ 12/2007. RS.1,33 ,360/ - ADD: AMOUNT RECEIVED FROM M/S. UNI MARK R EMEDIES LTD .. , AS ON MONEY IN CASH AS DISCUSSED ABOVE. RS.68,20,000/ - ------------------- TOTAL INCOME RS.69,53,360/ - =========== 5. BY THE IMPUGNED ORDER CIT(A) CONFIR MED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATION S . 4.2 I HAVE GIVEN CAREFUL CONSIDERATION TO THIS ISSUE AND FIND THAT LD. ASSESSING OFFICER HAS VERY RIGHTLY RECORDED HIS 'REASON TO BELIEVE' FOR ISSUE OF NOTICE U/S . 148 READ WITH SECTION 147. FOR I SSUE OF NOTICE U/S. 148, THERE IS NO REQUIREMENT OF LA W TO HAVE FULL PROOF OF MATERIAL OF ESCAPEMENT OF ASSESSMENT . THE ONLY POINT IS TO BE CONSIDERED IS RELEVANCE OF MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED REQUISITE BELIEF. IN THE CASE OF ITO VS. SELECTED DALURCHAND COAL CO. PVT. LTD . (1996) 217 ITR 597, 599 (SC), THE HON'BLE SUPREME COURT HAS LAID DOWN THE PRINCIPLE THAT AT THE STAGE OF ISSUE OF NOTICE, IT HAS ONLY TO BE SEEN WHETHER THERE IS ANY MATERIAL IN POSSESSION. WHETHER FACTS STATED ON MATERIAL ARE TRUE OR NOT, IS NOT CONCERNS AT THAT STAGE. THIS IS SO BECAUSE FORMING OF BELIEF BY THE AO IS WITHIN HIS SUBJECTIVE SATISFACTION. FURTHER, IN THE CASE OF CENTRAL PROVINCES MANGANESE ORE CO. LTD . VS. ITO (1991) 191 ITR 662, 666 (SC), HON 'B LE SUPREME COURT HAS CLARIFIED THAT AT THE TIME OF INITIATION OF PROCEEDINGS U/S. 148, THE FINAL OUTCOME OF PROCEEDINGS IS NOT NECESSARY. FURTHER , IN THE CASE OF PRAFUL CHUNILAL PATEL, VAS ANT CHUNILAL PATEL VS. ACIT (1999) 236 ITR 832, 840 (GUJ), STOCK EX CHANGE VS. ACIT (1997) 227 ITR 906 (GUJ) AND ITO VS. LABHMANI MEWAL DAS (1976) 103 ITR 437 (SC), HON'BLE COURTS HAVE HELD THAT ACTION U/S. 147 IS POSSIBLE IN SPITE OF COMPLETE DISCLOSURE OF MATERIAL FACTS. IT IS ALSO RELEVANT TO MENTION THAT POWERS UNDER A MENDED PROVISION OF SECTION U/S. 147 ARE WIDE ENOUGH TO COVER EVEN WHERE ASSESSEE HAD FULLY DISCLOSED MATERIAL FACTS VIDE RAKESH AGARWAL VS. ACIT (1976) TAXMAN 306, 307 (DEL). HERE, IN THIS CASE, THERE WAS A VALUABLE INFORMATION IN POSSESSION OF THE ASSESS ING OFFICER G I VING BASIS TO BELIEVE THAT THERE WAS A N ESCAPEMENT OF ASSESSMENT TO BE REASSESSED BY THE ASSESSING OFFICER . THEREFORE , IT I S UNFOUNDED ARGUMENT THAT IMMEDIATELY AFTER COMPLETION OF ASSESSMENT WITHIN LE SS THAN ONE MONTH, SAME ASSESSING OFFICER HAS ISSUED NOTICE U/S. 148, WHICH IS NOT IN ACCORDANCE WITH LAW. FURTHER, I FIND NO CONVINCING REASON IN THE ARGUMENT TH A T REASON TO BELIEF WAS IN RESPECT OF ESCAPEMENT OF ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 5 INCOME BUT WITHOUT INDICATION OF ANY MATERIAL ON THE BASIS OF WHICH SUCH BELIEF WAS FORMED. OBVIOUSLY, THIS IS A BASELESS ARGUMENT BECAUSE THE FACTS OF THE CASE ITSELF REVEAL THE REASONABLE BASIS FOR ISSUE OF SUCH NOTICE U/S. 148. AS SUCH, CONSIDERING THE FACTS OF THE CASE , GENUINE BASIS OF BELIEF OF ESCAPEMENT OF ASSESSMENT AND ALSO CON SIDERING THE VARIOUS JUDICIAL PROPOSITION OVER SUCH ISSUE, THE REOPENING OF COMPLETED ASSESSMENT BY THE ASSESSING OFFICER IS APPROVED AS SAME IS LEGALLY TENABLE . 6. WITH RESPECT TO THE MERIT OF ADDITION, THE CIT(A) CONFIRMED THE ADDITION SO MADE, AFTER H AVING THE FOLLOWING OBSERVATION : 5.2 I HAVE CIRCUMSPECTED THE ENTIRE SPECTRUM OF FACTS AND CIRCUMSTANCES OF THE CASE VIS - A - VIS PERUSED CAREFULLY THE EVIDENCE ON RECORD, RIVAL SUBMISSION OF THE APPELLANT, ASSESSMENT ORDER AND VARIOUS CASE LAWS RELI ED UPON BY THE LD. AR. AFT E R REVIEWING AND CONSIDERING ALL THESE EVIDENCES AND COUNTER ARGUMENTS AS WELL AS THE FINDING THE AO, I REACHED TO THE CON C LUSION THAT LD. AO HAS MADE THE ADDITION OF RS.68,20,0001 - ON PROPER FOUNDATION OF THE MATERIAL FACTS, EVID ENCE ON RECORD AND FURTHER AFTER EXTRACTING INDEPENDENT CORROBORATIVE EVIDENCES . DULY EMERGED FROM THE STATEMENT OF MR. MEHUL PAREKH AND MR . YOGESH PARIKH, DIRECTORS OF M/ S. UNIMARK REMEDIES LTD. AND CROSS EXAMINATION BY THE LD. AR OF THE APPELLANT . 5 . 2 . 1 APPELLANT IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. IT HAS STARTED DEVELOPMENT OF PROJECT KNOWN AS KAMLESHWAR - IL AT TAGORE ROAD, SANTACRUZ(W), MUMBAI - 54, WHICH WAS COMPLETED IN F .Y. 2005 - 06. THIS PROJECT IS OF GROUND F LOOR + 11 STOREY BUILDING COMPRISING OF STILTS. IN THIS PROJECT, MLS. UNIMARK REMEDIEIS LTD. (BRIEFLY REFERRED TO URL) HAS PURCHASED 4 FLATS AT 10 TH & 11 TH FLOORS. SALE CONSIDERATION OF THESE FLATS AS PER DOCUMENTS PREPARED BY THE APPELLANT IS OF RS. 3, 76,00,000 / - WHEREAS DURING THE COURSE OF SEARCH AND SEIZURE ACTION CONDUCTED ON 10.11.2006, SOME LOOSE PAPERS ' AND DIARIES WERE RECOVERED SHOWING ON MONEY TRANSACTIONS . DUE TO THAT, THE MAIN PERSON OF URL VIZ. MEHUL PAREKH WAS EXAMINED ON 10111 . 1 . 2006 U/S . 132(4) AND HIS STATEMENT WAS RECORDED BY THE ADIT(INV) UNIT - I(3), MUMBAI IN RESPECT OF VARIOUS TRANSACTIONS NOTED BY CONCERNED PERSON OF THE COMPANY AT PAGE NO. 13 OF ANNEXURE 'A - 2' AND PAGE NO. 23, 25 & 27 TO ANNEXURE 'A - 3'. IN RESPECT OF TRANSACTION AP PEARING IN INCRIMINATING DOCUMENTS INVENTORISED AS ANNEXURE 'A - 2' ESPECIALLY PAGE NO. 12 & 13, MR. MEHUL PAREKH, THE DEPONENT HAD ADMITTED ON BEHALF OF URL THE PAYMENT OF ON MONEY AS UNDER : - 'PAGE 12 AND 13 SHOWS APPROXIMATE COST OF - ACQUISITION INCLUDIN G CASH COMPONENT FOR PURCHASE OF FLATS. HERE I WOULD LIKE TO CLARIFY TH AT AT THE TIME OF GIVING STATEMENT U/S. 132(4) OF THE I.T ACT AT MY RESIDENCE ON 10.01.2006 I HAD STATED THAT NO CASH COMPONENT WASP AID FOR ACQUISITION OF FLATS AT KAML ES HWAR BUILDING SA NTA C R UZ (W EST) . HO W EVER, AF TE R GOING THROUGH A NNEXURE A I 3 SEI Z ED FR OM U NIMARK R E MEDIES LTD . OFFICE AND CON S U L TING WITH YOGESH PARIKH , I S TATE THAT CASH COMPONENT WAS PAID BY THE COMPAN Y . IN VIE W OF THI S FA CT STAT E M E NT GIVEN B Y ME AT MY RESIDENCE ON THIS IS SUE ON ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 6 10 . 01. 06 S TANDS C LARIFIED AS REGARDS ACQUISITION OF FLAT AT KAML E SHWAR BUILDING SANTACRUZ ( W E ST). I CONFIRM THAT C ASH W AS P A ID F O R A CQUISITION OF THE SAID FLAT ' , 5 . 2 . 2 THE ABOVE ADMISSION OF MR. MEHUL PAREKH IS NOT A MERE ADMIS S ION W ITHOUT ANY CORR OBORATIVE EVIDENCE . HERE IN THIS CASE , AS POINTED OUT EARLIER THAT THERE I S A RECO V ERY OF UNDISCLOSED DOCUMENTS INVENTORISED AS ANNEXURE 'A - 2 ' BEING A D I A RY WHICH CONTENTS VARIOUS INFORMATION OF ON MONEY AND DUE TO THAT DURING THE COURS E OF CONFRONTATION O F FACTS, MR . MEHUL PAREKH BEING ONE OF THE DIRECTORS OF URL H AS ADMITTED SUO - MOTO THE FACT OF ON MONEY GI V EN TO THE APPELLANT IN R E SPECT OF PURCHASE OF THESE 4 FLATS UNDER REFERENCE FROM T HE APPELLANT . THIS ADMISSION O F TH E DIRECTOR ON BEHALF OF URL, HAS A GAIN BEEN CONFIRMED BY ANOTHER DIRECTOR M R. YOGESH N. PARIKH, WHO IS ALSO A CHARTERED ACCOUNTANT . THE RELEVANT PARAGRAPH S OF HIS STATEMENT DATED 19 . 12.2008 ARE AS UNDER : - Q . 2 PLEASE STATE YOUR EDUCATIONAL QUAL I FICATION AND Y O UR DESIGNATION IN MRS. UNIMA RK REMEDIES LTD . , YOUR LENGTH OF S E RVIC E IN THIS ORGANIZATION AND DETAILS OF DUTIES ASSIGNED TO YOU AND Y OUR MONTHLY EMOLUMENTS WITH PERQUISITE. A . 2 I AM CHARTERED ACCOUNTANT AND I AM DIRECTOR - FINANCE OF MRS. UNIMARK REMEDIES LTD . SINCE 1990 AND MY DUT IES ARE TO LOOK AFTER ACCOUNTS AND ADMINISTRATION AND FINANCE AND I AM DRAWING MONTHLY SALARY OF RS. 2 , 00 , 000 1 - P . M . Q.3 YOUR COMPANY HAS PURCHASED T W O FLOORS AT 10TH AND 11TH FLOOR IN KAMLESHWAR TOWER, SANTACRUZ (WJ, FROM M / S. ORB I T ENTERPRISES, AS PER THE DIARY SEIZED AT THE TIME OF SEARCH ACTION SHRI MEHUL PAREKH DIRECTOR OF THE COMPANY HAS PAID RS. 75,20 , 000 / - IN CASH ON DIFFERENT DATES OF THE YEAR 2005 TO MR. RAJUBHAI DHIRU, PARTNER OFFIRM MLS. ORBIT ENTERPRISES) FOR THE PURCHASE OF TWO FLOORS AS ON MONEY YOU ARE REQUESTED TO CONFIRM THE SAME. A . 4 I CONFIRM THAT COMPANY HAS PURCHASED ABOVE MENTIONED FLAT AT KAMLESHWAR TOWER FROM M / S. ORBIT ENTERPRISES AND AS PER THE DIARY I CONFIRM THE NOTINGS AND IT IS DECLARED AS INCOME IN THE ASSESSMENT OF THE COMPANY . Q . 5 PLEASE GIVE THE SOURCE OF FUNDS - GIVEN IN CASH TO MLS. ORBIT ENTERPRISES. A . 4 AT PRESENT I DO NOT REMEMBER THE EXACT DETAILS, HOW EVER, THE PAYMENT MADE TO M/ S. ORBIT ENTERPRISES AS PER DIARY HAS BEEN ADMITTED AS INCOME ASSESSED IN THE ASSESSMENT OF UNIMARK REMEDIES LTD., MUMBAI IN THE BLOCK ASSESSMENT'. 5.2 . 3 IT IS ALSO RELEVANT TO MENTION THAT MR . Y OGESH N. PARIKH HAS REPRESENTED AS DIRECTOR (FINANCE) OF M/ S. UNIMARK REMEDIES LTD. AND HAD RE - CONFIRMED THE FACTS OF 'ON MONEY' TO R AJEN DHRUV, PARTNER OF APPELLANT FIRM OF M/ S. ORBIT ENTERPRISES AND LD. AO HAS AFFORDED FULL AND PROPER OPPORTUNITY TO THE APPELLANT FOR THE CROSS ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 7 EXAMINATION OF DEPONENT ON THE SAME DAY AT THE SAME TIME. THE APPELLANT THROUGH RAMESH N. VORA, CA HAS CROSS EXAMINED MR. YOGESH PARIKH ON THE SAME DAY AND IN CROSS EXAMINATION ALSO MR. YOGESH PARIKH HAS CONFIRMED THE FACT APPEARING AT PAGE NO. 13 OF SEIZED DOCUMENTS BEING ANNEXURE A - 2. FURTHER, IT IS ALSO RELEVANT TO MENTION THAT IN RESPONSE TO SPECIFIC QUERY ON THE CONSULTATION OF Y OGESH PARIKH WITH OTHER DIRECTOR, MR. MEHUL PAREKH, HE HAS CONFIRMED THE SAME, WHICH MEANS SO FAR AS ISSUE OF ADMISSION OF FACT APPEARING ON PAGE NO. 12 & 13 OF SEIZED DOCUMENTS INVENTORISED AS ANNEXURE 'A - 2' IS CONCERNED, SAME IS AG AIN FOUND ESTABLISHED EVEN DURING THE CROSS EXAMINATION DONE BY THE APPELLANT. IT IS ALSO RELEVANT TO MENTION THAT IN QUESTION NO.5, LD. AR, SHRI RAMESH N. VORA, CA HAS APPRAISED HIMSELF THAT SEIZED DOCUMENTS - PAGE NO. 13 SHOWS AMOUNT IN CASH OF 2 S (4 FL ATS AT FLOORS NO. 10 AND 11) PURCHASED BY M/ S. UNIMARK REMEDIES LTD. WHICH MEANS APPELLANT WAS AWARE OF CASH COMPONENT TRANSACTION BUT ONLY WANTED TO HAVE DETAILS OF DATE AND PAYMENT BY WHOM AND TO WHOM IT WAS MADE. HERE , IT IS RELEVANT TO MENTION THAT MR. YOGESH PARIKH HAS GIVEN INFORMATION TO THE APPELLANT THROUGH QUERY NO . 3 ABOUT SUCH PAYMENT TO ONE MR. RAJEN V. DHRUV, (WRONGLY TYPED AS DHIRU) PARTNER OF THE APPELLANT FIRM AND FURTHER THERE IS ADMISSION OF RE - CONFIRMATION OF PAYMENT OF AGGREGATE AMOUNT OF RS. 75,20,000 / - BY URL TO THE APPELLANT VID E ANSWER TO QUERY NO.8 OF STATEMENT OF MR. YOGESH PARIKH. A CAREFUL PERUSAL OF STATEMENT GIVEN DURING CROSS EXAMINATION ON 19.12.2008 REVEALS THE FACT OF ADMISSION OF PAYMENT OF ON MONEY AND PURCHASE OF FLAT NO. 11201 AND 11202 ON 01 . 6.2004 AND FLAT NO. 1001 & 1002 ON 24.8.2004. EVEN REPLY TO QUERY NO.LL REVEALS A VERY IMPORTANT CLUE THAT APPELLANT USED TO GIVE NO RECEIPT OF SUCH ON MONEY DUE TO THAT NO SUCH RECEIPT WAS THERE IN FORMAL WAY BUT, THERE IS CIRCUMSTAN TIAL EVIDENCE IN ADDITION TO DOCUMENTARY EVIDENCE THAT ON MONEY TRANSACTION WAS DONE BY THE APPELLANT AND THE FACT UNEARTHED BY THE DEPARTMENT ( DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS HAD STOOD TO THE TEST OF FURTHER INQUIRY AS WELL AS PROCEED INGS AND EVEN DURING CROSS EXAMINATION. 5.2 . 4 THE VARIOUS CASE LAWS RELIED UPON BY THE LD. AR ARE NOT RELEVANT TO THE SPECIFIC FACTS OF THIS CASE. THE CASE OF SMC SHARE BROKER LTD. VS. DCIT (2007) 109 TTJ 700 ITA T DELHI BENCH IS NOT OF ANY AVAIL TO THE A PPELLANT BECAUSE, AS HELD BY THE HON'BLE IT AT IN PARA 27.3 OF THE JUDGEMENT THAT IN THAT CASE, THE STATEMENT OF MR. MANOJ AGARWAL WAS RECORDED BEHIND BACK OF THE ASSESSEE AND THE ASSESSEE WAS NOT AFFORDED ANY OPPORTUNITY TO CROSS - EXAMINE HIM, HERE, IN THI S CASE, THAT IS NOT THE FACT . THE LD. ASSESSING OFFICER HAS GIVEN FULL AND PROPER OPPORTUNITY TO THE APPELLANT FOR CROSS - EXAMINATION OF THE CONCERNED PERSON OF.MZS. UNIMARK REMEDIES LTD. IT I S ALSO TO REITERATE THAT SHRI Y OGESH PARIKH, DIRECTOR (FINANCE) O F URL, HAD ADMITTED THE FACT OF GIVING ON MONEY TO THE APPELLANT AND HIS STATEMENT WAS CORROBORATED WITH DOCUMENTARY EVIDENCE RECOVERED BY THE DEPARTMENT INVENTORISED ANNEXURE 'A - 2'. IN HIS CROSS - EXAMINATION BY THE APPELLANT THROUGH AR, SHRI YOGESH N. PARI KH HAS RECONFIRMED THE VERACITY OF STATEMENT GIVEN BY MR. MEHUL P A RE K H AND FURTHER IN RESPECT OF QUESTION NO.5 WHERE LD . AR OF THE APPELLANT H AS R E COGNIZED THE SEIZED DOCUMENTS PAGE NO. 13 SHOWING PAYMENT IN CASH IN RESP E CT OF 4 FLATS SOLD BY APPELLANT . TH EREFORE, THE FACT OF THE CASE ITSELF REVEALS TH A T APPELLANT HAS BEEN GIVEN PROPER OPPORTUNITY BY THE ASSESSING OF F ICER IN R E SPECT OF IS S U E RELATED WITH ON MONEY PAYMENT TO IT . SIMILARLY, THE RATIO OF THE CA S E OF CBI VS. ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 8 V . C . SHUKLA & ORS. (1998) 3 SCC 410 (SC) IS NOT APPLICABLE TO THE FACTS O F T H E CASE BECAUSE IN THAT CASE, IT WAS HELD THAT DIARIES ARE NOT BOOKS OF ACCOUNT AND N O LIABILITY CAN BE FASTENED ON THE PERSON ON THE BASIS OF UNILATERAL ENTRIES MADE B Y ANOTHER PERSON AGAINST SUCH PERSON UNLESS THER E IS INDEPENDENT EVIDENCE TO FASTEN HIM WITH SUCH LIABILITY. HERE, IN THIS CASE, THERE IS A REFERENTIAL EVIDENCE O F PURCHASE OF 4 FLATS ALSO THERE IS AN EVIDENCE OF ON MONEY PAYMENT DULY ADMITTED B Y THE PERSON, WHO HAD GIVEN THIS ON MONEY AND HAS ALSO BEEN DISCLOSED IN THEIR RETURN OF INCOME FILED IN RESPECT OF INCOME OF BLOCK YEAR DUE TO SE AR CH A ND SEIZURE ACTION IN THAT CASE, VIZ. URL AND FURTHER THERE IS A CONSEQUENTIAL ADMISSION OF THIS FACT BY THE DIRECTORS OF THE COMPANY AND APPELLANT HAS EXAMINED TH E CONCERNED PERSON THROUGH AR AND IN CROSS - EXAMINATION ALSO THE FACT OF ON MONE Y IS E S T A BLISHED AND THERE IS NO REBUTTAL WITH CONTRARY EVIDENCE OF SUCH ADMITTED F ACT . SIMILARLY, THE CASE OF ACIT VS. SWASTIK ENTERPRISES (2008) 119 TT] 557 (JD) DAT E D 2 9.8.200 8 HEA V ILY RELIED UPON, IS NOT APPLICABLE TO THE FACTS OF THE CASE BECAUSE I N THAT CASE, IT IS HELD THAT THE DOCUMENTARY EVIDENCE ON RECORD WILL PREVAIL OVER ORAL EVIDENCE. HERE IN THIS CASE, BOTH THE EVIDENCES ARE THERE ON RECORD , DOCUMENTAR Y AS WELL AS OR AL EVIDENCE DULY SUPPORTED WITH OTHER FACTS AND CIRCUMSTANCES OF THE CASE O F A BUILDER THEREFORE , THE RATIO OF MORARKA PROPERTIES (P) LTD . & OTHERS, BIHARIL A L MORARKA AND OTHERS AIR (1978) (SC) 300 AND THE CASE O F R . S. NAY A K VS . A .R. ANTULAY AIR (1986) (SC ) 2045 , 2062 ARE ALSO NOT APPLICABLE. FURTHER, THE RATIO OF K . P . VERGHESE VS. CIT 131 ITR 597 (SC) IS NOT APPLICABLE TO THIS CASE AS THAT C SE IN RESPECT OF TRANSFER OF HOUSE PROPERTY AT THE SAME PRICE AT WHICH PROPERTY WAS PURCH ASE D E A RLIER AND THERE WAS N O E V IDENCE OF ANY UNDER S TA TE MENT OF C ON S ID E R ATION H E NCE , IT WAS HELD TH A T SECTION 52(2) W A S NOT APPLIC A BLE. HERE IS NOT THE C ASE A LI KE. THERE IS DOCUMENTA RY EVIDENCE ON RECORD DULY ADMITTED BY CONCERNED PERSON T H AT H E HAD GI VE N ON MONEY AND LATENT FACT OF THE CASE RE V EALS THAT APP E LL A NT HAS S UPPR ESSE D TH E R E CEIPT OF SUCH ON MON E Y IN ITS BOOKS OF ACCOUNT . SIMIL A RLY , TH E R ATIO OF CASE OF UNI QU E OR G ANIZERS & DEV E L O PERS (P) LTD. V S . DCI T ( 2001 ) 7 0 T T J (AHD) 131 I S NOT A PPLICABLE TO THE FACTS OF THE CASE BECAUS E AS HAS BEEN FOUND OUT IN P ARA 5 OF THE ORDER T HAT SEIZED DOCUMENTS IN THAT CASE WAS A DUMP DOCUMENT WITHOUT ANY N A RRATION A N D THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANY EVID E N CE T O I NDICATE THE ACTUAL TRANSACTION AND WHO WERE THE PARTIES TO DO I T , W HAT W AS TH E DA T E OF TRANSACTION, WHAT ARE THE FIGURES ON THE PAPER ACTUALLY INDICATED AND HO W TH OSE F I G URES WERE RELATED TO THE ASSESS E E COMPANY. HERE IN THIS CASE , TH E R E IS A CORROBORATIVE EVIDENCE IN THE FORM OF FILING OF RETURN OF INCOME BY URL AND A LSO THERE IS A DOCUMENTARY EVIDENCE IN POSSESSION BY THE DEPARTMENT WHICH R EVEALS T HE ON MONEY AND FURTHER, THERE IS REFERENCE OF SUCH ON MONE Y DULY ADMITTED B Y THE AR WHILE CROSS - EXAMINING MR. Y OGESH N , . PARIKH VIDE QUESTION NO . 5 T O C R OSS - EX AMINE ST A TEME NT . SIMILARLY , THE CA S E OF ADDL . CIT V S. MS . LATA MANGE S HK AR 97 ITR 696 (BJM) AND T.S. VENKATESAN VS. ACIT 69 TTJ 66 ITAT CALCUTTA ' A ' B E N CH A ND ACIT V S. KISHORE LAL BALWANT R A I & OTHERS (2007) 17 SOT 380 (CHD ) ARE NOT A PPLICABLE TO THE FACTS OF THE CASE A S BRIEFLY NARRATED HEREIN ABO VE. THE WORD 'E VIDENCE ' AS USED IN SECTION 143(3) IS NOT CONFINED TO DIRECT EVIDENCE. TH E WORK IS C OMPREHENSIVE ENOUGH TO COVER CIRCUMSTANTIAL EVIDENCE V IDE: PARAS DASS MUNNA L AL V . CIT (1937) 5 ITR 523 , 526 (L A H) . ALSO SEE HOMI JEHANGIR GHEESTA V. CIT, ( 1961) 41 ITR 135 , 142 (SC); KAMESHWAR SINGH (1933 ) 1 ITR 94 , 106 (PC); KANHAIYA LAL UMRAO SINGH V . CIT, (1941) 9 I TR 225, ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 9 239 (OUDH) ; CHATURBH UJ V. CIT , (1941) 9 ITR 286,291 (OUDH); LAL MOHAN KRISHNA LAL PAUL V . CIT , (19 44)12 ITR 441 (CAL); ABDULLABHAI ABDUL KADAR V. CIT, (1953) 22 ITR 241 (BORN) . THE WORD 'EVIDENCE' HAS BEEN USED IN TH A T SECTION IN A WIDER SENSE AS HAS BEEN H ELD I N THE CASE OF CIT V. KHEMCHAND RAMDAS, (1940) 8 ITR 159, 176 (SIND). IT IS OF THE GENERIC SENSE, AND N OT IN THE ARRESTED SENSE SO AS TO BE EITHER ORAL OR DOCUMENTARY EVIDENCE, OR BOTH VIDE: CIT V. METAL PRODUCTS OF INDIA, (1984) 150 ITR 714,717 (PUNJ). WHILE THE WORD 'EVIDENCE' MAY RECALL THE ORAL AND DOCUMENTARY EVIDENCE AS MAY BE ADMISSIBLE UNDER THE IN DIAN EVIDENCE ACT, THE USE OF THE WORD 'MATERIAL' IN SECTION 143(3) OF INCOME TAX ACT, 1961 SHOWS THAT THE ASSESSING OFFICER, NOT BEING A COURT, CAN RELY UPON MATERIAL, WHICH MAY NOT STRICTLY BE EVIDENCE ADMISSIBLE UNDER THE INDIAN EVIDENCE ACT, FOR THE PU RPOSE OF MAKING AN ORDER OF ASSESSMENT. COURT OFTEN TAKES JUDICIAL NOTICE OF CERTAIN FACTS WHICH NEED NOT BE PROVED, WHILE ADMINISTRATIVE AND QUASI - JUDICIAL AUTHORITIES CAN TAKE 'OFFICIAL NOTICE' OF WIDER VARIETIES OF FACTS WHICH NEED NOT BE PROVED BEFORE THEM. THUS, NOT ONLY IN RESPECT OF THE RELEVANCY BUT ALSO IN RESPECT OF PROOF THE MATERIAL WHICH CAN BE TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER AND / OTHER AUTHORITIES UNDER THE EVIDENCE ACT VIDE [ADDL. CIT V. JAY ENGINEERING WORKS LTD (1978) 11 3 ITR 389, 391 (DEL). UNDER SECTION 142 AND 143 THERE IS A CONCEPT OF 'THE MATERIAL GATHERED' BY THE ASSESSING OFFICER SHOWS THAT HE IS NOT FETTERED BY THE TECHNICAL RULE OF THE EVIDENCE AND THE LIKE, AND AO MAY ACT ON MATERIAL WHICH MAY NOT STRICTLY SPEA KING, BE ACCEPTED AS EVIDENCE IN A COURT OF LAW VIDE - VIMAL CHANDRA GOLECHA VS. ITO (1982) 134 ITR 119, 130 (RAJ) THE MATERIAL OR EVIDENCE IS NOT CONFINED TO DIRECT TESTIMONY IN THE SHAPE OF STATEMENTS MADE BY WITNESSES BUT, ALL RELEVANT CIRCUMSTANCES W HICH HAVE BEARING TO THE ISSUE, REVEAL IN THE COURSE OF ASSESSMENT CAN BE REGARDED AS EVIDENCE, WHICH WOULD COVER THE EXPRESSION 'MATERIAL OR EVIDENCE' ON WHICH THE ITO COULD RELY - , MANGALCHAND GOBARDHANDAS VS. CIT (1954) . 26 ITR 706, 710 (ASSAM). THERE M AY BE EVIDENCES 'SECONDARY IN NATURE' OR 'HERESY EVIDENCE' WHICH CAN BE UTILIZED AFTER GIVING OPPORTUNITY TO THE ASSESSEE FOR EXPLANATION AND REPRESENTATION AND IF PROPER EXPLANATION OR COUNTER EVIDENCE IS NOT ADDUCED BY THE ASSESSEE, THE USE OF SUCH EVIDE NCES CANNOT BE PRESUMED TO BE AGAINST THE NATURAL JUSTICE : - I) SETH GURMUKGH SINGH VS. CIT (1944 12 ITR 393,425 (LAH) II) GANGARAM BALMOKAND VS. CIT (1937 5 ITR 164 (LAH). THEREFORE, IN THE LIGHT OF ABOVE DISCUSSION AND VISIBLE FACTS OF THE CASE, IT IS FOUND BEYOND DOUBT THAT APPELLANT HAS RECEIVED THE CASH AMOUNT OF S. ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 10 68,20,0001 - FROM M / S. UNIMARK REMEDIES LTD. BUT HAS NOT ACCOUNTED IT IN ITS BOOKS OF ACCOUNT AND THEREBY HAS SUPPRESSED ACTUAL INCOME. THEREFORE, THE ADDITION SO MADE OF RS. 68,20,00 0 / - IS SUSTAINED. 7 . AGAINST THE ABOVE ORDER O F CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8 . LD. A.R. APPEARING ON BEHALF OF THE ASSESSEE CONTENDED THAT THE PRICE AT WHICH FLATS ARE SOLD TO UNIMARK REMEDIES LIMITED (URL) IS MUCH MORE THAN FLATS SOLD, CONTEMPORANEOUSLY AS ALSO OTHER COMPARABLE FLATS. MOREOVER, PRICE IS VERY CLOSE TO STAMP DUTY VALUE PUT BY STATE AUTHORITIES WHICH IS A CARDINAL FACTOR. MOREOVER, AT PG. 2 OF THE ASSESSMENT ORDER, AO RECORDED A CATEGORICAL FINDING THAT IN RESPONSE SUMMONS ISSUED HIM OTHER FLAT BUYERS HAVE CONFIRMED THAT THEY NOT MADE ANY PAYMENTS OVER AND ABOVE PRICE MENTIONED IN SALE DEEDS FILED BEFORE AO. 9 . LD. A.R. FURTHER CONTENDED THAT IN RESPONSE TO SUMMONS ISSUED BY THE AO, THE OTHER FLAT BUYERS HAVE CONFIRMED TH AT THEY HAVE NOT MADE ANY PAYMENT OVER AND ABOVE THE PRICE MENTIONED IN THE SALE DEED. AS PER LD. A.R. SHRI RAJEN DHRUV, PARTNER OF APPELLANT, CONSISTENTLY IN HIS DEPOSITIONS DATED 15.10.2007, 25.10.2007 AND 01.11.2007 DENIED RECEIPT OF CASH PAYMENTS TOWAR DS SALE OF FLATS TO URL AND NEITHER AO NOR URL CROSS EXAMINED HIM AT ALL AT ANY STAGE TO DEMOLISH HIS ASSERTIONS. 10 . FURTHER CONTENTION OF LD A.R. IS AS UNDER: 'SHRI YOGESH PARIKH'S [DIRECTOR - FINANCE OF URLJ DEPOSITION DATED 19.12.2008 IN PURSUANCE OF CROSS EXAMINATION BY APPELLANT'S CHARTERED ACCOUNTANT CONTRADICTS HIS STAND THAT CASH PAYMENTS WERE MADE TO APPELLANT FOR ACQUISITION OF FLATS MORE PARTICULARLY, ANSWERS TO QUESTIONS NO 4, 6, 10, 11 AND 12 AND THUS ORIGINAL STATEMENT CANNOT BE RELIED UPON. ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 11 4. SHRI MEHUL PARIKH'S [DIRECTOR OF URLJ ANSWER TO QUESTION NO 5 OF HIS DEPOSITION DATED 11.01.2006 WOULD INDICATE THAT IN HIS STATEMENT DATED 10.01.2006 HE DENIED PAYMENT OF ANY CASH COMPONENT TO APPELLANT, COPY OF WHICH HAS NOT BEEN GIVEN DURING VARIO US PROCEEDINGS TO APPELLANT DESPITE REQUEST VIDE LETTER DATED 20.12.2008. THE STATEMENT IS NOW GIVEN ON 07.09.2012 WHICH IS PRODUCED HEREWITH AND ANSWER TO QUESTION NO 10 THEREOF DENIES PAYMENT OF CASH OVER AND ABOVE AGREEMENT VALUE WHICH IS ALSO MADE IN CONSULTATION WITH SHRI YOGESH PARIKH. FURTHER, HIS ANSWER TO QUESTION NO 5 OF HIS DEPOSITION DATED 11.01.2006 PERTAINING TO LOOSE PAGES COMPRISING A - 2 UNEQUIVOCALLY DEMONSTRATES THAT NOTINGS ON THOSE PAGES ARE REALLY ALL PROPOSED TRANSACTIONS, BUT NOT ACTU AL THAT HAVE TAKEN PLACE AND HENCE NOTINGS MUST ALSO, BASED ON THEORY THAT A THING IS KNOWN BY THE COMPANY IT KEEPS, BE DEEMED TO HAVE NOT TAKEN PLACE, BUT ONLY A FUTURE PROPOSED EVENT NOT AT ALL CONNECTED WITH APPELLANT. THE DEPOSITION IS TUTORED AND SELF SERVING BECAUSE QUESTIONS POSED ARE LEADING MORE PARTICULARLY, AVERMENT THAT SHRI MEHUL PARIKH MAY CONSULT SHRI YOGESH PARIKH BEFORE ANSWERING QUESTIONS. MOREOVER, APPELLANT'S CHARTERED ACCOUNTANT CROSS EXAMINED SHRI MEHUL' PARIKH BUT COPY OF CROSS - EXAMIN ATION HAS NOT BEEN FURNISHED NOTWITHSTANDING SPECIFIC REQUEST VIDE LETTER DATED 20.12.2008 AND SUBSEQUENT REMINDERS DATED 28.06.2012, 0L.08.2012 AND 20.08.2012. 5) THE SEIZED PAPERS HAVE NO EVIDENTIARY VALUE/ARE UNRELIABLE BECAUSE NONE OF URL DEPONENTS T HROW LIGHT ON FOLLOWING: - A) ACCORDING TO AD, PAYMENTS OF ON - MONEY ARE ALLEGEDLY MADE FROM 09.03.2005 TO 11.04.2005, BUT AGREEMENTS WERE REGISTERED ON 25.08.2004 151, AND 02.06.2004 AND KEEPING IN VIEW GENERAL - REAL ESTATE TRADE PRACTICE AND PREPONDERANCE OF HUMAN PROBABILITIES IT IS UNBELIEVABLE THAT CASH PAYMENTS WERE MADE AFTER REGISTRATION OF SALE DEEDS; B) AT TIMES, NARRATIO N THAT APPEARS BELOW NAME 'RAJU / BHAI' IS 'AGAINST DEPOSIT/EXCHANGE' WHICH CANNOT BY ANY STRETCH OF IMAGINATION LINKED TO PURCHA SE OF FLATS FROM APPELLANT IN KAMLESWAR - II; C) NAME 'RAJU/BHAI' IS BEING ATTRIBUTED TO APPELLANT'S DIRECTOR' SHRI RAJEN DHRUV, WHEREAS IN SAME PAPERS THERE IS ANOTHER TRANSACTION IN RESPECT OF PURCHASE OF LAND SHOWING PAYMENTS TO SHRI RAJIV MEHRA AND HEN CE THERE IS NO LIVER AND CLOSE NEXUS BETWEEN WORD 'RAJUBHAI' AND SHRI RAJEN DHRUV AND IT IS HIGHLY PROBABLE THAT IT ALLUDES TO SHRI RAJIV MEHRA TO WHOM PAYMENTS ARE MADE IN APRIL 2005; D) AMENITIES PAYMENT IS SHOWN AT RS.26,32, 000 / - AT RATE OF 700, BUT S HRI MEHUL PARIKH VIDE STATEMENT DATED 31.10.2007 IN REPLY TO QUESTION ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 12 NO 2 HAS AFFIRMED THAT HIS COMPANY URL HAS NOT PAID ANYTHING FOR AMENITIES; E) CONSIDERATION RS.30,51, 000 / - OR RS.30, 00 , 000 / - OR RS.5, 000 / - PER SQUARE FOOT STATED THEREIN DO NO MATCH W ITH ALL POSSIBLE PERMUTATIONS AND COMBINATIONS OF PAYMENTS RECEIVED BY APPELLANT AND INDEED AGREEMENT VALUE IS MUCH HIGHER AT RS. 8, 400/-PER SQUARE FOOT; J) MOREOVER, PURPORTED DETAILS OF CASH PAYMENTS IN LOOSE PAPERS RUNNING FROM AGGREGATING 75,20,000/ - DO NOT IN ANY WAY CORRELATE WITH SINGLE FIGURE RS.30 LACS SPECIFIED BEING MAIN SHEET OF LOOSE PAPER; G) 7520 AND 3760 SQUARE FEET MENTIONED IN LOOSE PAPER DOES NOT TALLY WITH SQUARE FEET OF INDIVIDUAL FLATS AT 1250 AND 985 OR AGGREGATE OF TWO OR FOUR TH AT IS 2500/1970/2235 AND 4470 OR ANY OTHER PERMUTATIONS AND COMBINATIONS. MOREOVER, YOGESH PARIKH IN CROSS - EXAMINATION AFFIRMED THAT AREA MENTIONED IN AGREEMENT IS CARPET; H) AMOUNT OF ALLEGED CASH PAYMENT RS.30 LACS MENTIONED IN ANNEXURE A - 2 CAN NEITHER BE RECONCILED WITH CASH ENTRIES COMPRISING ANNEXURE 3 OR AGREEMENTS; I) LOOSE PAGES ARE CLAIMED TO BE WRITTEN BY ACCOUNTANT OF URL BY SHRI YOGESH PARIKH, BUT ACCOUNTANT'S DEPOSITION IS NOT FURNISHED, IF AT ALL RECORDED WHEREAS, IN SAME BREATH IT IS STATE D BY MEHUL PARIKH THAT ALL RECORDS ARE MAINTAINED BY YOGESH PARIKH. J) RELEVANT LOOSE PAPERS ARE DUMB AND NON - SPEAKING ONE, IN THAT, DOES NOT INDICATE OR SUGGEST AS TO WHAT IS NATURE OF TRANSACTION, THAT IS, WHETHER IS A LOAN, INCOME, EXPENSE, QUANTITATI VE FIGURE, PAYMENT OR RECEIPT ETC; DATE OF ALLEGED PAYMENTS IS NOT STATED; IT IS NEITHER SIGNED BY NOR CONTAINS THE NAME OR IN THE HANDWRITING OF THE APPELLANT; WHETHER THE ALLEGED AMOUNT IS PAYABLE, PAID, RECEIVED, RECEIVABLE AND THAT TOO BY OR TO WHOM AN D ANY PAYMENT OF ON - MONEY IN RELATION TO THE PURCHASE OFFLATS [ACIT V. SHAILESH S. SHAH 63 ITD 153 (MUM} - PGS 7, 9 OF THE PRECEDENT PAPER B OOK (PPB)). (6) THE DECISIONS IN UNIQUE V. DCIT 70 TTJ 131 (AHD) [PG 14,15 (NOT IN HANDWRITING OF ANY PERSON CONNECTE D WITH COMPANY), 17 [BUYER OFFERED INCOME IN BLOCK PERIOD, BUYER'S STATEMENT UNRELIABLE DUE TO CONFLICTING STATEMENTS], 19 [LOOSE PAPERS NOT EVIDENCE, PRESUMPTION UNDER SECTION 132(4A) NOT APPLICABLE TO THIRD PARTY] OF PPS] AND SHETH AKSHAY V. DCIT 130 TT J 42 (AHM}(URO) [PG 70 - PRESUMPTION UNDER SECTION 132(4A) NOT APPLICABLE TO THIRD PARTY, 71 - WHEN ADMISSION CANNOT BIND MAKER OF STATEMENT HOW CAN IT BIND THIRD PARTY WITHOUT CORROBORATIVE EVIDENCE], SUNITA V. DCIT 71 DTR 33 ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 13 (JP) - PRESUMPTION UNDER SECTION 132(4A) NOT APPLICABLE TO THIRD PARTY AND SECONDARY EVIDENCES CANNOT BE RELIED UPON AS NEITHER WITNESSES WERE PRODUCED NOR PERSONS WHO PREPARED DOCUMENTS AND CIT V. LATA 97ITR 696 (BOM) ARE ON ALL FOURS TO FACTS OF APPELLANT'S CASE. (7) ONLY FOUNDATION F OR MAKING ADDITION IS LOOSE PAPER AND THAT THERE IS NO CORROBORATIVE AND INDEPENDENT EVIDENCE TO SUBSTANTIATE SAME. NO RECEIPT OR OTHER ACKNOWLEDGMENT WERE FOUND OR COULD BE PRODUCED BY URL IN RELATION TO OSTENSIBLE CASH PAYMENTS WHEN THE FLATS WERE UNDER CONSTRUCTION AND THEY DID NOT ENJOY ANY SPECIAL RELATIONSHIP AND HENCE ADDITION IS UNSUSTAINABLE [CIT V. MA ULIK 307 ITR 137 (GUJ)). THE ADDITION CANNOT BE MADE SOLELY ONLY ON BASIS OF STATEMENT OF BUYER WITHOUT REFERRING TO VALUATION CELL [CIT V. KAL YANS UNDARAM 282 ITR 259 (MAD) AFFIRMED IN 294 ITR 49 (SC)). (8) THE REVENUE MUST ESTABLISH BY POSITIVE EVIDENCE THAT APPELLANT HAS ACTUALLY RECEIVED CONSIDERATION MORE THAN REFLECTED IN BOOKS OF ACCOUNTS AND APPELLANT CANNOT BE EXPECTED TO PROVE THE NEGATIVE [VA RGHESE V. I TO 131 I TR 597,614,615 (SC) - PG 27,28 OF PPB]. (9) SIMILAR VIEW IS ENDORSE D IN CASES [C I T V. SAJRANG 335 I TR 572 (DEL) - PG 35 OF PPS] WHERE ADDITIONS HAVE BEEN MADE WITHOUT REJECTING BOOKS OF ACCOUNTS UNDER SECTION 698 IN RESPECT OF INVESTME NT IN LAND BY BUYERS FOLLOW ING APEX COURT'S RULING IN 131 I TR 597,614,615 (SC). (10) WITHOUT PREJUDICE AND IN ANY EVENT, IT IS WELL ESTABLISHED THAT DOCUMENTARY EVIDENCE PREVAILS OVER ORAL EVIDENCE [SMC SHARE V. DCI T 109 IT J 700 (DEL) - PG 39, 40, 41 PRES UMPTION UNDER SECTION 132(4A) NOT APPLICABLE TO THIRD PARTY, 44 OF PPB]. (11) NO FINDING THAT APPELLANT HAD UNACCOUNTED ASSETS INFORM OF CASH, JEWELLERY, INVESTMENT OR OTHER ASSETS OUTSIDE BOOKS OF ACCOUNTS SO AS TO JUSTIFY ANY ADVERSE INFERENCE, A FACT TO WHICH CONSIDERABLE WEIGHTAGE WAS ATTACHED AS CIRCUMSTANTIAL EVIDENCE IN CI T V. AP P ASWAMY 9 DTR 285 (MAD) - PG 21,48,49 OF PPB]. (J 2) AO AT PG 2 OF THE ASSESSMENT ORDER RELIED ON NOTORIOUS FACT THAT- FLATS IN MUM B AI CITY ARE SOLD IN THE RATIO OF 80% A ND 20% BEING CHEQUE AND CASH COMPONENTS RESPECTIVELY WHICH CANNOT BE TAKEN JUDICIAL NOTE OF AS HELD IN KAMANI HUF V. DC I T 70 I TD 77 (PAT (TM). (J 3) ADDITION CANNOT BE SUPPORTED UNDER SECTION 69A BECAUSE LOOSE PAPERS ARE NOT VALUABLE ARTICLES PROVING OWN ERSHIP OR POSSESSION [C I T ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 14 V. RAVI 294 I TR 78 (P AND H); S I MAL V. C I T 261 I TR 635 (CAL); MANGI LAL V. C I T 300 I TR 372 (RAJ)] NOR CANNOT BE TRANSFERRED FOR A VALUABLE CONSIDERATION OR CARRY WITH A SALEABLE INTEREST POSSESSING ANY INTRINSIC AND INHERENT MARKET VALUE AS HELD IN SHAGWANDAS V. CI T 981TR 194 (GUJ). (14) SECTION 69A USES WORD 'MAY' CONFERRING DISCRETIONARY POWER ON A O WHICH MUST BE EXERCISED IN APPELLANT'S FAVOUR BECAUSE OF OVERWHELMING PREPONDERANCE OF PR OBABILITIES AS SET OUT ABOVE [CI T V. NOORJ AHAN 237 I TR 570 (SC);DC I T V. ROHINI 256 I TR 360 [SLP DISMI SSED - 254 I TR (ST) 275]. (15) SUPREME COURT PROPOUNDED IN CIT V. RAMAN 67 ITR 11, 17 THAT LAW DOES NOT OBLIGE A TRADER TO MAKE MAXIMUM PROFITS. SIMILARLY, APEX COURT IN KIKASHAI V. CIT 24 ITR 506, 510, 511 ADVOCATED THAT REVENUE HAS NO JURISDICTION TO TAX POTENTIAL, FICTIONAL AND NOTIONAL PROFITS. IN ADDITION, IN SHOORJI 46 ITR 144 (SC) HELD THAT HYPOTHETICAL AND NOTIONAL INCOME CANNOT BE SUBJECTED TO TAX. (16) WITHOUT PREJUDICE, ONUS IS ON REVEN UE TO PROVE THAT IMPUGNED ITEMS ARE UNDISCLOSED INCOME PARIMISETTI V. CIT 57 ITR 532 (SC).' 11 . RELIANCE WAS PLACED ON THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHAILESH S. SHAH 59 TTJ 574, WHEREIN IT WAS HELD THAT VAGUE FIGUR ES NOTED ON LOOSE PAPERS CANNOT BE TREATED AS COMMISSION AND UNDISCLOSED INCOME OF ASSESSEE AND ADDITION THEREOF CANNOT BE MADE UNDER THE SUBSTANTIVE PROVISIONS OF THE IT ACT WITHOUT PROVING THAT THE ALLEGED RECEIPT IS INCOME OF ASSESSEE PARTICULARLY WHEN EVEN THE DATE OF RECEIPT IS NOT KNOWN. 12 . RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN CASE OF ADDL. CIT VS. MISS LATHA MANGESHKAR IN SUPPORT OF THE PROPOSITION THAT IN THE LEDGER ACCOUNT OF THE FIRM DID NOT REPRESENT ASSESS EE'S INCOME FROM UNDISCLOSED SOURCES. 13 . RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MAULIKKUMAR K. SHAH 307 ITR 137 (GUJ.). FURTHER ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 15 RELIANCE WAS PLACED ON THE DECISION OF DELHI BENCH IN THE CASE OF SMC SHARE B ROKERS LTD. 109 TTJ 700. 14 . ON THE OTHER HAND, LD. D.R. APPEARING FOR THE DEPARTMENT CONTENDED THAT IN THIS CASE THE LOOSE PAPERS WERE FOUND DURING THE COURSE OF THE SEARCH IN THE CASE OF URL. THE GENUINENESS OF THE LOOSE PAPERS WAS CORROBORATED BY THE STATEMENT OF SHRI MUKUL PAREKH, ONE OF THE DIRECTOR OF URL IN HIS STATEMENT RECORDED ON 11.01.2006 IN Q.NO:5 AND Q.NO - LL, APPEA R I NG M PAGE - 3 TO 5 OF THE STATEMENT. THE OTHER DIRECTOR ( FINANCE) SHRI Y OGESH PAREKH WHO IS A CA WHO LOOKS AFTER THE ACCOUNTS OF URL, IN ANSWER NO: 4 AND 5 OF THE STATEMENT DATED 19.12.2008 ( IN THE SECOND PAGE OF THE STATEMENT) HAS CONFIRMED THE ON - MONEY TRANSACTION. WHEN SHRI Y OGESH PAREKH WAS CROSS - EXAMINED BY THE ASSESSEE ON 19.01.2008 VIDE ANSWER TO Q NO: 4 HE HAS CONFIRMED THAT THE ENTRIES IN THE SEIZED MATERIAL PAGE NO - 21 OF THE PB WAS WRITTEN BY HIS ACCOUNTANT. FURTHER THE 'KAMESHWAR PROJECT' IN SANTACRUZ WAS THE ONLY PROJECT UNDERTAKEN BY THE APPELLANT IN THE FY 2004 - 05. IT IS AN ADMITTED FACT BY THE ASSESSEE THAT U RL HA S PURCHASED TWO FLATS IN TOP FLOOR (11TH FLOOR) AND. TWO FLATS IN THE SECOND LAST FLOOR (1 O' FLOOR) . THE KIND ATTENTION OF THE BENCH IS INVITED TO THE PAGE NO - 20 OF THE FIRST PAPER BOOK FILED BY THE ASSESSEE .IN THE MIDDLE OF THAT PAGE THERE IS MENTION A BOUT '3720 SQ FT IN TOP FLOOR AND 2100 SQ FEET IN SECOND LAST FLOOR AND VRC 1660 SQ FT IN THE SECOND LAST FLOOR'. THE ABOVE ENTRIES PROVE THAT THE ENTRIES IN THAT PARTICULAR PAGE ARE RELATED TO THE PURCHASE AND SALE OF FLAT BETWEEN URL AND ORBIT ENTERPRISE S. IF ONE ENTRY WRITTEN IN A SEIZED DOCUMENT IS CONSIDERED AS TRUE AND CORRECT THE OTHER ENTRIES IN THE SAME DOCUMENT IN THE SAME HAND WRITING CAN ALSO BE CONSIDERED AS TRUE AND CORRECT .IN VIEW OF THE ABOVE LEGAL POSITION THE ENTRIES IN THE ABOVE SEIZED M ATERIAL PAGE NO 21 TO 24 OF THE PB RELATING TO THE CASH COMPONENT OF THE TRANSACTION WRITTEN IN THE SAME HAND WRI TING SHOULD BE TRUE AND CORRECT . THE ENTRIES ARE SPEAKING ABOUT THE CASH COMPONENT OF RS . 75.20 LAKHS IN RESPECT OF ONE FLAT AT TOP FLOOR CONSIS TING OF ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 16 AREA OF 3760 SQ FT .THE ON - MONEY PAID IS RS. 1000 / - IN RESPECT OF ONE SQ FT AND FOR THE ENTIRE AREA OF 3760 SQ FT THE ON - MONEY COMPONENT IS RS.37.60 LAKHS. THE SEIZED MATERIAL MENTIONS THAT RS.30.00 LAKHS HAS BEEN ALREADY PAID AND RS.7.00 LAKHS IS YET TO BE PAID. THIS PAYMENT OF RS.37 .60 LAKHS CASH HAS BEEN FURTHER STRENGTHENED BY THE ENTRIES IN THE SEIZED MATERIAL WHICH GIVES THE PAYMENTS MADE TO THE ASSESSEE AS UNDER: PAGE NO. OF PAPER BOOK DATE DESCRIPTION AMOUNT WHETHER SHRI MEHUL PAREKH HAS SIZED IN THE LAST COLUMN 21 9.3.05 BUILDER RAJU 9,50,000 21 19.3.05 BUILDER RAJU 10,00,000 22 22.3.05 BUILDER RAJU 16,00,000 YES 22 28.3.05 BUILDER RAJU 13,70,000 YES 22 30.3.05 BUILDER RAJU 11,50,000 YES 22 30.3.05 BUILDER RAJU 7,5 0,000 YES 23 11.04.05 BUILDER RAJUBHAI EXCHANGE 7,00,000 YES 15 . LD. D.R. FURTHER CONTENDED THAT GRL HAS PAID THE ABOVE AMOUNTS TO SHRI RAJEN DHRUV PARTNER OF MJ S ORBIT ENTERPRISES KNOWN AS SHORTLY AS 'BUILDER RAJUBHAI'. THE SOURCE OF THE AMOUNT IN THE HANDS OF URL HAS A LSO BEEN EXPLAINED BY SHRI MEHUL PAREKH VIDE ANSWER TO Q NO: 11 OF THE STATEMENT DATED 11.01.2008. 16 . RELIANCE WAS PLACED BY LD. D.R. ON THE DECISION OF THE ITAT MUMBAI IN THE CASE OF ITO 9 (3) (1) V S. DIAMOND INVESTMENTS IN ITA NO.55371MUM/2009 DATED 15.06.2011 AND THE RELEVANT OBSERVATION OF THE BENCH READS AS UNDER: 'AS FAR AS THE OBSERVATION OF THE LEARNED CIT(A) THAT THE ASSESSING OFFICER HAS NOT PROVED THAT PAYMENT OF ANY ON - MONEY HAS PASSED BETWEEN THE PARTIES, IN OUR OPI NION, TRANSFER OF ANY ON - MONEY FROM ONE HAND TO THE OTHER IS BEST KNOWN TO THE PARTIES CONCERNED AND IT IS WITHIN THEIR EXCLUSIVE KNOWLEDGE. THE ASSESSING OFFICER CAN DRAW INFERENCE ONLY FROM THE SURROUNDING CIRCUMSTANCES UNDER THE PECULIAR FACTS AND CIRC UMSTANCES OF EACH CASE. SINCE IN THE INSTANT CASE THE ASSESSING ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 17 OFFICER HAS BROUGHT ON RECORD THAT FLATS IN THE SAME BUILDING HAVE BEEN SOLD AT A HIGHER PRICE THAN THE SALE PRICE TO RPIL AND SINCE THE COMPANY HAS NOT PAID THE ADVANCE OF RS. 62 LAKHS BUT ON LY THE DIRECTORS OF THE COMPANY HAVE PAID SUCH ADVANCE, WE, THEREFORE, ARE OF THE OPINION THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISS UE AND RESTORE THAT OF THE ASSESSING OFFICER. THIS GROUND BY THE REVENUE IS ACCORDINGLY ALLOWED. ' 17 . LD. D.R. FURTHER CONTENDED THAT IN VIEW OF THE DECISION GIVEN BY THE JURISDICTIONAL TRIBUNAL REPRODUCED ABOVE IT IS SUBMITTED THAT THE DENIAL OF THE R ECEIPT OF ON - MONEY BY SHRI RAJEN DHRUV HAS NO MERIT AND THE SUBMISSION OF THE AR IN THIS REGARD IS LIABLE TO BE TOTALLY REJECTED. AS POINTED OUT BY THE HON'BLE IT AT THERE CAN NOT BE ANY EVIDENCE FOR ON - MONEY PAYMENT AND NORMALLY IT IS NOT EXPECTED .AS PER THE WELL KNOWN HON'BLE SUPREME COURT DECISION IN THE CASE OF SUMATI DAYAL V S CIT ( 214 TR 801) ( SC) THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITIES SHOULD BE TAKEN INTO ACCOUNT WHILE DECIDING THE ISSUE OF A TRANSACTION OF A SECRET NATURE. 18 . LD . DR CONTROVERTING THE SUBMISSION OF LD. A.R. TO THE EFFECT THAT THE VALUE OF THE FLATS SOLD BY HIM IN THE PROJECT EXCEEDS THE FMV ( BAZAR PRICE) OR EQUAL TO THE FMV OR LESS THAN THE FMV ONLY BY A SMALL AMOUNT OF THE FLATS AS DETERMINED BY THE STAMP DUTY R EGISTRATION AUTHORITIES OF THE STATE GOVT AND HENCE THERE CAN NOT BE ANY ON - MONEY PAYMENT, HAS NO EFFECT. IN SO FAR AS THE VALUE OF FMV BY THE STATE GOVT AUTHORITIES IS DETERMINED FOR THE PURPOSES OF COLLECTION OF STAMP DUTY AT THE TIME OF REGISTRATION OF THE SALE AGREEMENT AND IT IS ALSO TAKEN INTO ACCOUNT FOR THE PURPOSES OF CALCULATING THE MARKET VALUE U/S 50 C OF INCOME TAX ACT 1961 FOR CALCULATION OF CAPITAL GAIN. THE STAMP DUTY VALUE IS DETERMINED BY THE STATE GOVT AUTHORITIES FOR A SPECIFIC AREA AND NOT FOR A SPECIFIC FLAT OR FOR A SPECIFIC BUILDING . IT IS DETERMINED FOR THE PURPOSES OF COLLECTION OF STAMP DUTY AND TO HAVE A CHECK ON THE UNDERVALUATION OF PROPERTIES FOR STAMP DUTY PURPOSES AT THE TIME OF ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 18 REGISTRATION OF PROPERTIES. THE MARKET PRICE AN D STAMP DUTY VALUE ARE OPERATING ON A DIFFERENT PLANE AND HAS NO CONNECTION. 19 . CONTROVERTING THE A.R. 'S CONTENTION FOR NOT GIVING THE COPY OF CROSS EXAMINATION ON 7.11.07, LD. A.R. CONTENDED THAT FIRSTLY THIS ISSUE WAS NOT RAISED BEFORE THE CIT(A) AN D THEREFORE THE ASSESSEE CANNOT RAISE THE ISSUE NOW BEFORE THE ITAT. SECONDLY THE AO VIDE HIS LETTER DATED 12.03.2014 HAS STATED THAT NO SUCH CROSS EXAMINATION STATEMENT EXISTS IN THE RECORD AND A COPY OF THE LETTER IS ENCLOSED HEREWITH. NOW A SUBMISSION I S MADE BEFORE THE BENCH TO DIRECT THE ASSESSEE TO FURNISH THE EVIDENCE IN HIS POSSESSION TO ESTABLISH THAT SUCH A CROSS EXAMINATION STATEMENT DATED 07.01.2007 EXISTS. EVEN ON THE DATE OF HEARING THE BENCH DIRECTED THE REPRESENTATIVE TO STATE HOW HE IS TELL ING THAT SUCH A STATEMENT EXISTS AND THE ASSESSEE SEARCHED SOME FILES AND COULD NOT GIVE A CLEAR REPLY AND EVADED A CLEAR ANSWER. EVEN ON 11.03.2014 THE REPRESENTATIVE OF THE ASSESSEE SHRI SANJEEV SHAH APPEARED BEFORE THE BENCH I NFORMALLY, THOUGH THE CASE OF M/ S. ORIENT ENTERPRISES WAS NOT LISTED ON 11.03.2014 AND HAS REMINDED ABOUT THE CROSS EXAMINATION STATEMENT RECORDED ON 07.11.2007 AND STATED HE SHOULD BE GIVEN A COPY OF THE SAID STATEMENT. IN VIEW OF THE ABOVE IT IS CLEAR THAT THE ASSESSEE ATTACHES C ONSIDERABLE IMPORTANCE TO THE SAID STATEMENT. HOWEVER THE AO HAS STATED THAT NO SUCH STATEMENT EXISTS IN THE RECORD. IN VIEW OF THE ABOVE AS ALREADY STATED THE ASSESSEE MAY BE DIRECTED TO FURNISH THE EVIDENCE IN HIS POSSESSION TO PROVE THAT THERE IS A CROS S EXAMINATION STATEMENT DATED 07.11. 2007. IN CASE THE ASSESSEE FAILS TO PROVIDE THE EVIDENCE FOR EXISTENCE OF SUCH .A STATEMENT SUITABLE INFERENCE MAY BE DRAWN AGAINST THE ASSESSEE FOR MISLEADING THE BENCH AS WELL AS THE DR. 2 0 . WITH REGARD TO THE STATE MENT OF SHRI MEHUL PAREKH DATED 10.01.06, WHICH WAS PLACED BEFORE THE TRIBUNAL ON 10.03.14, IT WAS CONTENDED THAT FIRST STATEMENT OF SHRI MEHUL PAREKH DATED 10.01.06 WAS OBTAINED BY HIM ON ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 19 07.09.12 FROM THE AO AND THE CIT(A) HAS ALSO PASSED ORDER ON 28.1.1 1. THEREFORE IT IS CLEAR THAT THE FIRST STATEMENT OF SHRI MEHUL PAREKH DATED 10.1.06 WAS NOT PRODUCED BEFORE THE CIT(A), AND IT IS AN ADDITIONAL EVIDENCE PRODUCED BEFORE THE TRIBUNAL FOR THE FIRST TIME AND NO REASON WAS ADVANCED FOR NOT PRODUCING THE SAME BEFORE THE CIT(A). 2 1 . WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE RELEVANT MATERIAL TO WHICH OUR ATTENTION WAS INVITED DURING THE COURSE OF HEARING. WE HAVE ALSO DELIBERATED ON THE JUD ICIAL PRONOUNCEMENTS CITED BEFORE US BY LD. A.R. AND LD. D.R. AS WELL AS THE DECISION REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS, WITH REFERENCE TO THE FACTUAL MATRIX OF THE CASE. FROM THE RECORD WE FOUND THAT ADDITION WAS MADE BY THE AO ON THE BASIS OF DOCUMENTARY EVIDENCE FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF BUYER OF THE FLAT M/S UNIMARK REMEDIES LTD. AS PER THE SEIZED DOCUMENT FOUND AT THE PREMISES OF M/S UNIMARK REMEDIES LTD., THERE WAS ON - MONEY TRANSACTION FOR PAYMENT OF 4 FLATS PURCHASED AT 10 TH & 11 TH FLOOR AT KAMALESHWAR II, TAGORE ROAD, SANTACRUZ, MUMBAI CONSTRUCTED BY THE ASSESSEE FIRM. DURING THE COURSE OF SEARCH ITSELF, STATEMENT OF SHRI MEHUL PAREKH (DIRECTOR FINANCE, M/S UNIMARK REMEDIES LTD.) WERE RECORDED. IN R ESPECT OF TRANSACTION APPEARING IN THE INCRIMINATING DOCUMENTS INVENTORISED AS ANNEXURE - A - 2, MEHUL PAREKH ADMITTED ON BEHALF OF URL THE PAYMENT OF ON - MONEY TO THE ASSESSEE. THUS, THE ADMISSION OF MEHUL PAREKH WAS ON THE BASIS OF DOCUMENTARY AND CORROBORATO RY EVIDENCE. THIS ADMISSION OF DIRECTOR ON BEHALF OF URL HAS BEEN CONFIRMED BY ANOTHER DIRECTOR MR. YOGESH PAREKH, WHO IS ALSO A CA. IN HIS STATEMENT, SHRI YOGESH PAREKH ADMITTED THAT HE WAS LOOKING AFTER ACCOUNTS, ADMINISTRATIVE AND FINANCIAL AFFAIRS OF M /S URL AND THAT THEY HAVE PURCHASED TWO FLOORS AT 10 TH & 11 TH FLOOR IN KAMALESHWAR TOWER FROM ASSESSEE (M/S ORBIT ENTERPRISES) AND AS PER THE DIARY SEIZED AT THE TIME OF SEARCH ACTION, SHRI MEHUL PAREKH, DIRECTOR OF THE COMPANY HAS PAID ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 20 RS. 75,20,000/ - IN C ASH ON DIFFERENT DATES OF THE YEAR 2005 TO MR. RAJUBHAI DHIRU, PARTNER OF ASSESSEE FIRM M/S ORBIT ENTERPISES AS ON - MONEY FOR PURCHASE OF TWO FLOORS. M/S UNIMARK HAD ALSO ADMITTED THIS PAYMENT AS ITS INCOME IN THE BLOCK ASSESSMENT. CROSS - EXAMINATION WAS ALS O ALLOWED, ON THE SAME DATE AT THE SAME TIME. THE ASSESSEE THROUGH MR. RAMESH VORA, CA HAS CROSS EXAMINED MR. YOGESH PAREKH ON THE SAME DATE AND IN CROSS EXAMINATION ALSO MR. YOGESH PAREKH HAS CONFIRMED THE FACT APPEARING IN THE SEIZED DOCUMENT MARKED AS A NNEXURE - A - 2. IN REPLY TO THE QUESTION NO. 5, SHRI RAMESH VORA, CA HAS APPRAISED HIMSELF THAT SEIZED DOCUMENTS PAGE 13, SHOWS AMOUNT IN CASH OF FOUR FLATS AT FLOOR NO. 10 & 11 PURCHASED BY M/S UNIMARK REMEDIES LTD. THUS, THERE WAS NOT ONLY ADMISSION BUT ALS O RECONFIRMATION OF PAYMENT AGGREGATING TO RS. 75,20,000/ - BY URL TO THE ASSESSEE. IN REPLY TO QUERY NO.11 IT WAS STATED THAT ASSESSEE USED TO GIVE NO RECEIPT OF SUCH ONMONEY. IN VIEW OF DOCUMENTARY EVIDENCE FOUND DURING THE COURSE OF SEARCH ALONG WITH STAT EMENT OF THE PAYEES RECORDED U/S. 132(4), FURTHER FORTIFIED BY CROSS EXAMINATION ALLOWED TO THE ASSESSEE CLEARLY PROVES THAT ASSESSEE WAS IN RESPECT OF ON - MONEY ON SALE OF FLATS WHICH WERE NOT ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS. ACCORDINGLY, TH E AO WAS JUSTIFIED IN ADDING THE SAME IN ASSESSEES INCOME AND IT WAS CORRECTLY CONFIRMED BY THE CIT(A) AFTER RECORDING DETAILED FINDING AT PARA 5 OF HIS APPELLATE ORDER WHICH HAS NOT BEEN CONTROVERTED BY THE ASSESSEE BY BRINGING ANY POSITIVE MATERIAL ON R ECORD. THE CASE LAW CITED BY THE LEARNED AR DURING THE COURSE OF HEARING ARE NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE AS NARRATED ABOVE. VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED BY THE ASSESSEE BEFORE THE CIT(A) HAS BEEN ELABORATELY DEALT BY CIT(A) AT PARA 5.2.4 OF HIS APPELLATE ORDER WITH REFERENCE TO THE FACTUAL MATRIX OF THE INSTANT CASE. ACCORDINGLY, NO INTERFERENCE IS REQUIRED IN THE ORDER OF THE LOWER AUTHORITIES. 2 2 . SO FAR AS REOPENING OF THE ASSESSMENT IS CONCERN, WE FOUND THAT THERE WAS S UFFICIENT MATERIAL BEFORE THE AO TO FORM AN OPINION THAT THERE WAS AN ESCAPEMENT OF INCOME IN RESPECT OF PAYMENTS MADE BY THE BUYERS OF FLATS TO ITA NOS.2188 & 2189/M/201 1 M/S. ORBIT ENTERPRISES 21 THE ASSESSEE FIRM AS PER THE SEIZED DOCUMENT FOUND DURING THE COURSE OF SEARCH OF UNIMARK REMEDIES LTD., WHICH WAS NOT FOUND RECORDED IN THE ASSESSEES BOOKS OF ACCOUNT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE REOPENING OF THE ASSESSMENT BY ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT. 2 3 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26/06/ 201 4 . SD/ - SD/ - ( ) ( S.T.M.PAV A LAN ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 27/06 /2014 COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE A PPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//