Assistant Commissioner of Income-tax, V. M/s. Darode Jog Builders Pvt. Ltd., Pune

ITA 2190/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1046 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B; SUHAS P BORA HEERAJ JAIN
• Assessee Lawyers: S K RASTOGI
• Keywords: Document seized; Principle of natural justice; Opportunity of cross examination; Documents seized

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.2190/PN/2013 '% % / ASSESSMENT YEAR : 2009-10 ACIT CENTRAL CIRCLE-2(3), PUNE . / APPELLANT V/S M/S. DARODE JOG BUILDERS PVT. LTD., 1212, DARODE JOG HOUSE, APTE ROAD, PUNE 411 004 PAN NO. AAACD6436G . / RESPONDENT / APPELLANT BY : SHRI S.K. RASTOGI, CIT / DEPARTMENT BY : SHRI SUHAS P. BORA HEERAJ JAIN & B / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 26-09-2013 OF THE CIT(A) CENTRAL, PUNE RELATING TO A SSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF BUILDERS AND PROMOTERS. A SE ARCH AND SEIZURE ACTION U/S.132 OF THE I.T. ACT WAS CONDUCTED IN T HE CASE OF THE ASSESSEE ON 28-04-09. DURING THE SEARCH ACTION, CERTAIN PAPERS WERE / DATE OF HEARING :30.07.2015 / DATE OF PRONOUNCEMENT:23.09.2015 2 ITA NO.2190/PN/2013 FOUND AND SEIZED. PAGE NO.27 OF BUNDLE NO.1 SEIZED FROM THE PREMISES AT BLOSSOM BOULEVARD CONTAINED A HANDWRITTEN E NTRY WHERE CERTAIN DISCREPANCIES WERE NOTICED. THE PAGES CONTAINED DETAILS OF COST OF FLATS. COMPARISON OF THE CALCULATION OF COST OF FLATS WIT H THE VALUE AS RECORDED IN THE AGREEMENTS SHOWED A DIFFERENCE OF RS.8,64,000/- FOR FLAT NO. C-803, RS.36,81,200/- FOR FLAT NO. A- 302, AND RS. 57,50,000/- FOR FLAT NO. A-1103 RESPECTIVELY. 3. THE STATEMENT OF ONE MS. CHAITRALI S. KARKARE, MANAGER, CUSTOMER RELATIONS OF THE ASSESSEE COMPANY WAS RECORDE D. RELEVANT PART OF THE SAID STATEMENT, WHICH HAS BEEN REPRODUCED B Y THE LD. AO IN PARA 4 OF THE ASSESSMENT ORDER, READS AS UNDER : Q.10. I AM SHOWING YOU THE COSTING SHEET OF A-302 IN THE NAME OF A.K. SINGH RETRIEVED FROM THE LAPTOP IN YOUR POSSESSION, AS PER THIS SHEET THE COST OF FLAT IS RS.1,15,64,400/- WHEREAS THE VALUE AS PE R THE SALE AGREEMENT IS RS.78,83,200/- THUS THERE IS DIFFERENCE OF RS.36,81,200/-. PLEASE EXPLAIN YOUR STATE FOR SAME. ANS. THE SHEET MIGHT HAVE BEEN GIVEN TO ME BY SOMEBODY FOR TAKING THE PRINTOUT. I AGREE THAT THERE IS DIFFERENCE OF RS. 36. 81 LAKHS IN THE VALUE AS PER THE AGREEMENT AND THE COSTING AS PER THE SAID SHE ET. HOWEVER I HAVE NO KNOWLEDGE AS TO HOW THE DIFFERENCE OF RS. 36.81/- IS ACCOUNTED FOR SINCE I DO NOT LOOK AFTER THE ACCOUNTS. Q.11. I AM SHOWING YOU THE SIMILAR SHEETS IN CASE OF C-803 WHE RE THE DIFFERENCE IS 8,64,000 AND RS.7 4, 00 , 000 AND A-11 03 WHERE THE DIFFERENCE IS 57.50 LAKHS. PLEASE EXPLAIN THE DIFFERENCE. ANS. AS REGARD A-1103 IT MIGHT BE THE AGREEMENT FOR 2 FLA TS. AS REGARDS THE OTHER DIFFERENCES I AGREE THAT THESE ARE DIFFEREN CES IN THE AGREEMENT VALUE AND THE ACTUAL COST AS PER THE WORKING SHEET. HOWEVER I DO NOT KNOW AS TO HOW THE DIFFERENCES ARE ACCOUNTED FOR SINCE I AM NOT AWARE OF THE ACCOUNTING AND I ONLY LOOK AFTER THE CUSTOMER CA RE. Q.12 DURING THE COURSE OF INVESTIGATION IT HAS BEEN ACCEPTED BY THE OWNERS OF FLAT NO.A-202 THAT THEY HAVE PAID AN AMOUN T OF 50,00,000/- (FIFTY LAKHS) IN CASH WHICH IS THE DIFFERENCE BETWEEN THE COSTING SHEET WHICH IS EXACTLY SIMILAR TO THE OTHER COSTING SHEET RET RIEVED FROM YOUR LAPTOP AND THE AGREEMENT VALUE. THUS IT TRANSPIRES THA T THE DIFFERENCE BETWEEN THE COSTING COUNT ON SUCH SHEETS AND THE AGREEM ENT VALUE REPRESENTS THE CASH AMOUNT RECEIVED IN ADDITION TO THE ADMITTED VALUE. PLEASE EXPLAIN YOUR SAY. 3 ITA NO.2190/PN/2013 ANS . I AGREE THAT THE ACTUAL COSTING SHEET SHOWN BY YOU TO ME IN RELATION TO FLAT NO.A-202 IN THE CASE OF RAJMANI SHILEY SINGH IS SAME IN FORMAT AS THE SHEETS RETRIEVED FROM MY LAPTOP. HOWEVER I DO NO T KNOW AS TO HOW THE DIFFERENCES BETWEEN THE COSTING AS PER THIS SHEETS AN D THE AGREEMENT VALUE IS ACCOUNTED FOR. Q.13 AS SHOWN TO YOU EARLIER THERE ARE SUBSTANTIAL DIFFERENC ES IN THE PER SQ. FT. RATES OF FLATS SOLD DURING A PARTICULAR PERIOD FROM THE DIFFERENCES FOUND BETWEEN THE ACTUAL COST AND THE AGREEMENT VALU E, IT TRANSPIRES THAT THE LOWER PER SQ. FT. RATES REPRESENT THAT SUCH FLATS HA VE ACTUALLY BEEN SOLD AT THE HIGHER RATE AND THE DIFFERENCE AND IT HA S BEEN ACCEPTED IN CASH OVER AND ABOVE THE AGREEMENT VALUE. ANS. ALTHOUGH THERE ARE SUBSTANTIAL DIFFERENCES IN PER SQ. FT. RATES OF THE FLATS SOLD DURING THE SAME PERIOD, I DO NOT KNOW AS TO WHY THERE IS SUCH DIFFERENCE OR AS TO HOW THE DIFFERENCES ACCOUNTED FOR SINCE I AM NOT RELATED TO THE ACCOUNTING PART. 4. THE AO FURTHER NOTED THAT MR. SUDHIR C. DARODE, DIRECT OR, DARODE JOG BUILDERS PVT. LTD., THE MAIN PERSON OF THIS GROU P WAS CONFRONTED WITH THESE COSTING SHEETS AND THE STATEMENT OF MISS. CHAITRALI S. KARKARE SHRI SUDHIR DARODE HAS ADMITTED TO DIS CLOSE THE AMOUNT OF RS.1,91,00,000/- AS ADDITIONAL INCOME OVER AND ABO VE THE REGULAR INCOME FOR A.Y. 2010-11. THE RELEVANT EXTRACT OF H IS STATEMENT IS REPRODUCED AS UNDER : 'Q.24. I AM SHOWING YOU STATEMENT OF MISS. CHAITRALI SHRIKANT KARKA RE RECORDED ON OATH AT THE SITE OFFICE OF YOUR BLOSSOM BO ULEVARD PROJECT ON 29/04/2009. FROM THIS SITE OFFICE, CERTAIN INCRIMINAT ING DOCUMENTS WERE FOUND WHICH CLEARLY SHOWED RECEIPT OF ON-MONEY IN R ESPECT OF THIS PROJECT. WHEN CONFRONTED BY THESE DOCUMENTS, IT WAS AD MITTED BY MISS. CHAITRALI SHRIKANT KARKARE THAT IN RESPECT OF FLAT N OS. A-302, A-202, C-803, A-1103 AND A-803 AN AGGREGATE ON-MONEY OF AROUND RS .2,40,31,000/- HAS BEEN RECEIVED YOU ARE REQUESTED TO GO THROUGH THI S STATEMENT AND CONFIRM THE CONTENTS ESPECIALLY RELATED TO RECEIPT OF ON-MONEY. YOU ARE ALSO REQUIRED TO CONFIRM AS TO WHETHER THIS ON-MONEY OF AROUND RS. 2,40,31,000/- IS BEING REFLECTED IN THE REGULAR BOOK S OF ACCOUNTS. ANS. AFTER VERIFICATION OF THE RELEVANT RECORDS AND GOING THROUGH THE STATEMENT OF MISS CHAITRALI KARKARE, I SUBMIT THAT AS A MATTER OF PRINCIPLE WE DO NOT ACCEPT ANY ON MONEY AS ALLEGED. FURTHER NO ADDITIONAL AMOUNT OVER AND ABOVE THE AGREEMENT AMOUNT HAS BEEN RECEIVE D BY US FROM MR. RAJMANI SINGH OR MRS SHILPI R SINGH OR ANY OTHER PER SON ON BEHALF OF THEM IN RESPECT OF SALE OF FLAT NO A-202 OF BLOSSOM BO ULEVARD. HOWEVER, TO COVER UP FOR ANY OMISSIONS, DEFICIENCIES AND TO BUY PEACE AND TO MAINTAIN HARMONY WITH THE DEPARTMENT AND WITH A REQUEST AND MY CLEAR UNDERSTANDING THAT THE SAME MAY BE ALLOWED TO BE CAPI TALIZED, I AGREE TO OFFER AMOUNT OF RS. 1,91,00,000 AS ADDITIONAL INCOME FOR A. Y.2010-11. 4 ITA NO.2190/PN/2013 5. HOWEVER, THE AO NOTED THAT THE ASSESSEE HAS OFFERED ONLY AN AMOUNT OF RS.1.91 CRORES FOR TAXATION PURPOSES WHEREAS THE EVIDE NCES FOUND DURING THE COURSE OF SEARCH REVEALED THAT ASSESS EE HAS ACTUALLY RECEIVED AN AMOUNT OF RS.2.41 CRORES. HE THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE BALANCE AMOUNT OF RS .50 LAKHS SHOULD NOT BE ADDED AS INCOME OF THE ASSESSEE. 6. IT WAS EXPLAINED BY THE ASSESSEE THAT THERE IS NO INC RIMINATING EVIDENCE FOUND DURING THE COURSE OF SEARCH FROM THE PREM ISES OF THE ASSESSEE THAT ASSESSEE HAD CHARGED ANY ON-MONEY IN R ESPECT OF THE SALE TRANSACTION WITH MS. SHILPI RAJESH SINGH. THEREFORE, TH E ASSESSEE REQUESTED THE AO TO PROVIDE THE EVIDENCE, IF AN Y, WITH HIM FOR THE SAID ALLEGED ON-MONEY ON THE SALE TRANSACTION SO THAT THE ASSESSEE CAN FILE ITS SUBMISSIONS ON THE SAME. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT ADDITIONAL INCOME EARNED FRO M SOURCES LIKE ON-MONEY CANNOT BE ADDED ON ITS ENTIRETY A ND ONLY THE NET PROFIT THEREON SHOULD BE TAXED. SUBSEQUENTLY IT WAS REITERATED THAT THERE IS NO INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH ACCEPTING ON-MONEY BY THE ASSESSEE FROM ANY OF THE PARTIES . 7. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION G IVEN BY THE ASSESSEE. HE NOTED THAT SHRI SUDHIR DARODE IN HIS S TATEMENT HAS STATED THAT AFTER VERIFICATION OF THE RELEVANT RECORDS AN D GOING THROUGH THE STATEMENT OF MS. CHAITRALI SHRIKANT KARKARE, AS A MATT ER OF PRINCIPLE THEY DO NOT ACCEPT ANY ON-MONEY AS ALLEGED. HO WEVER, THE DIRECTOR HAS OFFERED AN AMOUNT OF RS.1.91 CRORES AS ADDITIONAL INCOME FOR A.Y. 2010-11. FURTHER, THE ASSESSEE HAS NOT GIVEN TH E DECLARATION CASE BY CASE AND THE ASSESSEE HAS GIVEN THE DECLARATIO N TO COVER UP 5 ITA NO.2190/PN/2013 THE DEFICIENCIES, IF ANY. HOWEVER, THE ASSESSEE HAS NOT SUB MITTED ANY DETAILS WITH REGARD TO THE DECLARATION OF RS.1.91 CRORES AN D THE DIFFERENCE OF RS.2.241 CRORES POINTED OUT TO HIM. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISH ING THE VARIOUS DECISIONS CITED BEFORE HIM THE AO MADE ADDITION OF R S.50 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 8. BEFORE CIT(A) IT WAS SUBMITTED THAT THE ADDITION MADE BY THE AO WAS ONLY ON THE BASIS OF PRESUMPTIONS AND SURMISES. THERE IS NO EVIDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH ON THE BASIS OF WHICH THE AO MADE THE ADDITION. ALTHOUGH THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS STATED THA T MS. CHAITRALI SHRIKANT KARKARE HAD ADMITTED FOR SUCH ON-MONEY, HOWEVE R, THE AO HAS NOT PROVIDED ANY EVIDENCE IN SUPPORT OF HIS INFERENCE THAT THE ASSESSEE COMPANY HAS RECEIVED ANY ON-MONEY. NEITHER ANY INCRIMINATING MATERIAL NOR ANYTHING OR BOOKS OF ACCOUNT OR DOCUMENTS WAS FOUND DURING THE COURSE OF SEARCH. THERE WAS NO OPPORTUNITY GRANTED TO CROSS EXAMINE THE PERSON ON WH OSE STATEMENT RELIANCE WAS PLACED BY THE AO. THEREFORE, THIS AMOUNTS TO GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. DESPITE REPEATED REQUESTS MADE TO THE AO TO PROVIDE WITH ANY EVIDENCE ON THE BAS IS OF WHICH HE PROPOSED TO MAKE THE ADDITION OF RS.50 LAKHS THE AO HAS NOT PROVIDED ANY SUCH MATERIAL IN SUPPORT OF HIS CLAIM. IT WAS ARGUED THAT NO ADDITION ON ACCOUNT OF ANY ON-MONEY CAN BE MAD E IN THE HANDS OF THE ASSESSEE WITHOUT ANY EVIDENCE OR MATERIAL. VARIOUS DECISIONS WERE ALSO CITED BEFORE THE LD.CIT(A) TO THE PROP OSITION THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. 6 ITA NO.2190/PN/2013 9. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE T HE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 7.6 I HAVE GIVEN CAREFUL CONSIDERATION TO ALL THE F ACTS BEFORE ME AND TO THE ARGUMENTS AND CONTENTIONS PRESENTED BY THE APPELL ANT. HAVING PERUSED THE CONTENTS OF THE ASSESSMENT ORDER CAREFULLY, I HAVE NOTED THE FOLLOWING FACTS : I. MS. CHAITRALI S. KARKARE, MANAGER CUSTOMER RELATIONS O F THE APPELLANT COMPANY HAS CATEGORICALLY STATED IN HER STAT EMENT (REPRODUCED BY THE LD.AO IN HIS ORDER) THAT SHE DOES N OT LOOK AFTER THE ACCOUNTS, THAT SHE WAS UNABLE TO EXPLAIN THE DIFFE RENCES IN FIGURES POINTED OUT TO HER BY THE OFFICER RECORDING HER STATEMENT SINCE SHE WAS NOT AWARE OF THE ACCOUNTING SIDE AND ONLY LOOKED AFTER CUSTOMER CARE; THAT SHE WAS NOT IN A POSITION TO EXPLAIN THE DIFFERENCES BETWEEN THE COSTING AS PER THE SHEETS AND TH E AGREEMENT VALUE AS SHE WAS NOT RELATED TO THE ACCOUN TING PART; THAT THE RATES ARE ULTIMATELY FINALIZED BY THE DIREC TORS THEMSELVES AND THEREFORE THEY ONLY WILL BE IN A POSITION TO ANSW ER THE QUERY WITH REGARD TO THE ALLEGED ON MONEY. II. THAT IN Q. NO. 12 OF THE STATEMENT OF THE AFOREMENTI ONED EMPLOYEE, MS. KARKARE, IT WAS STATED BY THE OFFICER T HAT THE OWNERS OF FLAT NO A-202 HAD ADMITTED THAT THEY HAD PAID AN AMOUNT OF RS 50,00,000/- IN CASH HOWEVER, UPON PERUSAL OF THE ASSE SSMENT ORDER, IT DOES NOT DOES NOT APPEAR AS IF THE AFORE MEN TIONED STATEMENT OF THE OWNERS ITSELF WAS EITHER CONFRONTED TO THE SAID EMPLOYEE OR TO SHRI SUDHIR DARODE. NOR HAS THE AO EV EN RELIED UPON THE SAID STATEMENT WHILE COMING TO HIS CONCLUSION S IN THE ASSESSMENT ORDER. IT IS NOTICED THAT THE RELEVANT PORTI ON OF THE STATEMENT HAS ALSO NOT BEEN REPRODUCED IN THE ORDER U NLIKE THE STATEMENTS OF MS. KARKARE AND MR. DARODE. III. IN Q. NO. 24 POSED TO MR. DARODE, IT IS MENTIONE D THAT MS. KARKARE, HAD ADMITTED THAT IN RESPECT OF FLAT NOS. A- 302, A- 202, C- 803 A-1103, A-803, AN AGGREGATE ON-MONEY OF AROUND RS.2,40,31,000/- HAD BEEN RECEIVED HOWEVER, UPON PER USAL OF THE EXTRACTS FROM THE STATEMENTS OF MS. KARKARE REPRODUCED BY THE AO IN PARA 04, NO SUCH ADMISSION IS FOUND. IN FACT, AS POIN TED OUT IN SL. NO. 1 ABOVE, SHE HAS CATEGORICALLY DENIED ANY KNOWLE DGE OF RATES CHARGED AND ACCOUNTING THEREOF BY THE APPELLANT COM PANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MATTER OF PRINCIPLE THE COMPANY DOES NOT ACCEPT ANY ON-MONEY HAVING SAID THAT, NO DOUBT HE AGREED TO OFFER AN AMO UNT OF RS.1,91,00,000/- AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2010-11. HOWEVER, HE DID SO 'TO COVER UP ANY OMISSIO NS, DEFICIENCIES AND TO MAINTAIN HARMONY WITH THE DEPART MENT AND WITH MY CLEAR UNDERSTANDING THAT THE SAME MAY BE ALLO WED TO BE CAPITALISED' NOWHERE HAS THE ADMITTED RECEIPT OF ON M ONEY BY THE APPELLANT COMPANY. 7 ITA NO.2190/PN/2013 V. THERE IS NO INDEPENDENT DISCUSSION IN THE ASSESSMENT ORDER EITHER OF THE STATEMENTS OF THE OWNERS ADMITTING PAYMENT OF ON MONEY OR OF THE ALLEGE INCRIMINATING EVIDENCE EST ABLISHING SUCH PAYMENTS. 7.7 THUS, UPON CAREFUL PERUSAL OF THE IMPUGNED ASSESSM ENT ORDER I FIND THAT THE FACTUAL BASIS FOR MAKING ANY A DDITION OTHER THAN THE ADDITION OF RS.1.91 CRORE VOLUNTARILY ADMIT TED BY MR. DARODE 'TO COVER UP FOR ANY OMISSIONS, DEFICIENCIES AND TO BUY PEACE AND MAINTAIN HARMONY WITH THE DEPARTMENT' IS I NDEED VERY WEAK IN THIS CASE. I ALSO FIND MUCH FORCE IN THE WRITT EN AND VERBAL ARGUMENTS RAISED BY THE LD. AR ON BEHALF OF THE APPEL LANT THAT THE APPELLANT COMPANY HAS NOWHERE ACCEPTED THE ALLEGED ON MONEY, THAT NO DOCUMENTARY OR OTHER EVIDENCE EITHER FOUND DURING THE SEARCH OR GATHERED DURING POST-SEARCH INVESTIGATIONS HA S BEEN BROUGHT OUT BY THE LD. AO IN HIS ORDER TO PROVE RECE IPT OF THE ALLEGED ON MONEY THERE IS ALSO NOTHING TO INDICATE TH AT ANY OPPORTUNITY OF CROSS EXAMINATION OF THE OWNERS WHOSE STA TEMENTS ARE SAID TO HAVE BEEN RECORDED AND WHO ARE STATED TO HAVE ADMITTED PAYMENT OF ON MONEY WAS EVER GIVEN TO THE A PPELLANT ALTHOUGH THE APPELLANT HAD REPEATEDLY REQUESTED BEFO RE THE LD. AO THAT COPIES OF THE DOCUMENTS/EVIDENCE ON THE BASIS O F WHICH THE ADDITION WAS BEING PROPOSED SHOULD BE GIVEN TO THE M. 7.8 AFTER CAREFUL CONSIDERATION OF ALL THE FACTS BROU GHT OUT IN THE PRECEDING PARAGRAPHS, EVEN WITHOUT GOING INTO TH E LEGAL PRECEDENTS CITED BY THE LD. AR, I AM OF THE VIEW THA T THERE IS NO FACTUAL FOUNDATION FOR SUSTAINING THE ADDITION OF RS.5 0,00,000/- MADE BY THE LD. AO. ACCORDINGLY, THE SAID ADDITION IS HEREBY DELETED. 8. GROUNDS NO. 3 & 4: GROUND NO.3 IS IN THE NATURE OF A PRAYER WHEREIN IT IS REQUESTED BY THE APPELLANT THAT THE AMO UNT OF RS.50,00,000/- ADDED BY THE LD. AO ON ACCOUNT OF AL LEGED ON MONEY BE DELETED; THAT ALTERNATIVELY, IF AT ALL ANY ADDITION IS TO BE MADE THE SAME SHOULD BE ONLY TO THE EXTENT OF NET PRO FIT AND NOT OF THE GROSS RECEIPT; THAT PERSONAL HEARING MAY BE GRANTE D, AND THAT OTHER RELIEF AS DEEMED FIT MAY BE GRANTED. UNDER GRO UND NO. 4, PERMISSION TO ADD/ALTER/AMEND/MODIFY/RECTIFY/DELETE W ITHDRAW ANY GROUNDS OF APPEAL AND TO RAISE ADDITIONAL GROUNDS OF APPEAL IF NECESSARY, HAS BEEN SOUGHT . 8.1 UNDER GROUND NO 2, I HAVE ALREADY DECIDED THE SU BSTANTIVE ISSUE UNDER CONTENTION IN THE APPELLANT'S FAVOUR. FURT HER, NO REQUEST HAS BEEN MADE BY THE APPELLANT DURING THE COU RSE OF APPELLATE PROCEEDINGS TO ADD OR ALTER GROUNDS OF APPE AL OR SUBMIT ADDITIONAL GROUND. AS SUCH THESE TWO GROUNDS DO NOT REQ UIRE SEPARATE ADJUDICATION. FOR STATISTICAL PURPOSES, GROUND NO. 3 MAY BE TREATED AS ALLOWED AND GROUND NO. 4 MAY BE TREATE D AS DISMISSED BEING INFRUCTUOUS. IN VIEW OF MY DECISIONS AS ABOVE UNDER THE INDIVIDUAL GROUNDS OF APPEAL RAISED BY THE APPELLANT, THE APPEAL MAY BE TR EATED AS PARTLY ALLOWED. 8 ITA NO.2190/PN/2013 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.50,00 ,000/- DONE ON ACCOUNT OF ON-MONEY RECEIPTS PERTAINING TO FLAT NO. A-202, IN SHRINIWAS BLOSSOM BOULEVARD PROJECT IGNORING THE FACT THAT DOCU MENTS INDICATING RECEIPT OF ON-MONEY WAS FOUND DURING SEARCH AND THERE WAS A RATE DIFFERENCE IN THIS CASE W.R.T. OTHER COMPARABLE SALES I N THE SAME PROJECT. 2. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, AND MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 11. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPOR TED THE ORDER OF THE AO. 12. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT THE L D.CIT(A) WHILE DELETING THE ADDITION HAS CONSIDERED THE VARIOUS SUBMISSION S MADE BY THE ASSESSEE. HE SUBMITTED THAT THE AO HAS RELIED O N THE STATEMENT OF ONE OF THE EMPLOYEES WHEREIN THE SAID EMPLOY EE HAS CATEGORICALLY STATED THAT SHE DOES NOT LOOK AFTER THE A CCOUNTS AND ONLY LOOKS AFTER THE CUSTOMER CARE. THE AO HAD NOT GIVEN TH E STATEMENT OF THE PURCHASER OF FLAT NO.A-202 OWNER TO THE RESPONDENT COMPANY. THE DIRECTOR IN HIS STATEMENT RECORDED U/S.132(4) HAS CLEA RLY MENTIONED THAT THE COMPANY AS A MATTER OF PRINCIPLE DOES NOT ACCEPT ANY ON-MONEY AND IT WAS STATED THAT THE ADDITIONAL INCOM E WAS DECLARED ONLY TO COVER UP ANY OMISSION. NO EVIDENCE WHA TSOEVER WAS FOUND DURING THE COURSE OF SEARCH THAT THE ASSESSEE HA S INFACT RECEIVED ANY ON-MONEY. 13. AS REGARDS THE GROUND ABOUT RATE DIFFERENCE TAKEN BY THE DEPARTMENT IS CONCERNED HE SUBMITTED THAT IT WAS EXPLAIN ED DURING 9 ITA NO.2190/PN/2013 THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF THAT THE UNIT S SOLD TO THE PURCHASERS ARE AS PER THE MARKET RATE PREVALENT AT T HAT TIME AND THE SALE PRICE OF THE FLATS ARE MORE THAN THE STAMP DUTY RAT ES WHICH ARE ONE OF THE INDICATORS OF THE MARKET PRICE. THE ENTIRE SALE PROCEEDS HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT AND THE S ALE VALUE IS FULLY EVIDENCED AND VOUCHED AND ALSO VERIFIED BY THE AUDITORS. HE SUBMITTED THAT WHILE SELLING THE FLATS THE ASSESSEE HAS TO LOWER THE RATE THAN THE RATE QUOTED DUE TO VARIOUS FACTORS SUCH AS LOCATIONAL FACTOR, LIQUIDITY FACTOR AND THE CHOICE OF THE FLAT OR THE UNIT AND ALSO DEPEND UPON INDIVIDUAL CUSTOMERS. HE SUBMITTED THAT WHEN EVER THE ASSESSEE HAS CHARGED HIGHER RATE THE SAME HAS BEEN R EFLECTED IN THE BOOKS OF ACCOUNT. THEREFORE, WITHOUT ANY MATERIAL IN THE P OSSESSION OF THE DEPARTMENT THAT THE ASSESSEE HAS RECEIVED ANY ON-MONEY NO ADDITION CAN BE MADE. HE ACCORDINGLY SUBMITTED THAT TH E ORDER OF CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE BE DISMISSED. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE LD.CIT(A) AN D THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDE RED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND DURING THE COURS E OF SEARCH IN THE BUSINESS PREMISES OF THE ASSESSEE ON 28- 04-2009 CERTAIN PAPERS WERE SEIZED. AS PER PAGE 27 OF BUNDLE NO .1 SEIZED FROM THE PREMISES AT BLOSSOM BOULEVARD CERTAIN DETAILS WER E MENTIONED THEREIN RECORDING COST OF FLATS. A COMPARISON O F THE CALCULATION OF COST OF FLATS SHOWS THAT THE VALUE AS RECORD ED IN THE AGREEMENT SHOWED A DIFFERENCE OF RS.8,64,000/- FOR FLAT NO.C-8 03, RS.36,81,200/- FOR FLAT NO.A-302 AND RS.57,50,000/- FOR FLAT NO.A - 1103 RESPECTIVELY. 10 ITA NO.2190/PN/2013 15. THE STATEMENT OF THE MANAGER CUSTOMER RELATIONS MS . CHAITRALI S. KARKARE WAS ALSO RECORDED DURING WHICH SHE W AS ASKED REGARDING RECEIPT OF ON-MONEY OF RS.50 LAKHS FROM THE OWN ER OF FLAT NO.A-202 IN CASH WHICH IS THE DIFFERENCE BETWEEN THE COST SHEET WHICH IS EXACTLY SIMILAR TO THE OTHER COST SHEET RETRIEV ED FROM HER LAPTOP AND THE AGREEMENT VALUE. SHE HAD STATED THAT THE ACTUAL COST SHEET SHOWN TO HER IN RELATION TO FLAT NO.A-202 IN THE CA SE OF SHRI RAJAMANI SHILPY SINGH IS SAME IN FORMAT AS THE SHEETS RET RIEVED FROM HER LAPTOP. HOWEVER, SHE HAD STATED THAT SHE DOES NO T KNOW HOW THE DIFFERENCE BETWEEN THE COST AS PER THESE SHEETS AN D THE AGREEMENT VALUE IS ACCOUNTED FOR. SHE HAD STATED THAT SHE IS NOT LOOKING AFTER THE ACCOUNTS PART AND IT IS ONLY THE DIREC TORS WHO NEGOTIATE THE RATES ETC. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE AND NOTING THAT THE TOTAL ON-MONEY RECEIVED B Y THE ASSESSEE IS RS.2.41 CRORES WHEREAS THE ASSESSEE HAS OFFERED ONLY RS.1.91 CRORES THE AO MADE ADDITION OF RS.50 LAKHS TO THE TOTAL IN COME OF THE ASSESSEE. WE FIND THE LD.CIT(A) DELETED THE ADDITION ON THE GROUND THAT THERE WAS NO SUCH ADMISSION BY ANY OF THE DIRECTOR S REGARDING RECEIPT OF ON-MONEY. HE HAD OFFERED AN AMOUNT OF RS.1.91 CRORES ONLY TO COVER UP ANY OMISSION, DEFICIENCIES AND TO MAINTAIN HARMONY WITH DEPARTMENT. FURTHER, NO DOCUMENTARY EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH OR POST SEARCH ENQUIRY EVID ENCING RECEIPT OF ON-MONEY BY THE ASSESSEE COMPANY. 16. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A). FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE WE FIND THE ASSESSEE WAS ASKING THE AO FROM THE VERY BEGINNING TO P ROVIDE ANY EVIDENCE THAT HAS BEEN IN POSSESSION OF THE DEPARTMENT TO SHOW THAT THE ASSESSEE HAS RECEIVED ANY SUCH ON-MONEY. NEITHER THE STATEMENT 11 ITA NO.2190/PN/2013 OF THE OWNERS OF FLAT NO.A-202 NAMELY RAJMANI SHILPY SINGH WAS PROVIDED TO THE ASSESSEE COMPANY NOR THE REQUEST OF T HE ASSESSEE TO CROSS EXAMINE THE SAID PERSON WAS PROVIDED WITH. WE FIND THE ASSESSEE HAS ALSO CLARIFIED BEFORE THE AO RELATING TO THE NOTINGS ON PAGE NO.27 WHICH READS AS UNDER : Q.116 THIS PAGE IS HAND WRITTEN ENTRY IN RESPECT OF C ERTAIN FLAT NO. WHERE THERE IS A DIFFERENCE IN THE VALUE AS PER THE A GREEMENT AND THE VALUE AS PER SHEET AS MENTIONED THEREIN. PLEASE EXPLAI N THE ENTRIES IN PAGE. ANS. IT IS ONCE AGAIN REITERATED THAT THE NOTINGS ON T HE PAPER SEIZED IS NOT BY ANY PERSON FROM DARODE JOG GROUP BUT IS PREPAR ED BY ONE OF THE OFFICERS OF INCOME TAX DEPARTMENT WHILE CONDUCTING T HE SEARCH, BUT THROUGH OVERSIGHT IS INCLUDED IN THE DOCUMENT SEIZED A LONG WITH THE OTHER DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. IT IS SUBMITTED BEFORE YOUR HONOUR THAT THE NOTINGS ARE IN RESPECT OF THE FLATS AT THE BLOSSOM BOULEVARD AND WE HAVE ALREADY MADE A DECLARAT ION U/S.132(4) AMOUNTING TO RS.1.91 CRORES IN RESPECT OF BLOSSOM BOULEV ARD PROJECT WHICH TAKES CARE OF THIS DIFFERENCE. 17. WE FIND MS. CHAITRALI S.KARKARE IN HER STATEMENT RECORD ED ON 30-04-2009 U/S.132(4) IN REPLY TO QUESTION NO.6 HAS STATE D THAT THE RATES ARE ULTIMATELY FINALIZED BY THE DIRECTORS THEMSELVES AND SHE IS NOT AWARE OF THE MATTER. THE RELEVANT QUESTION AND ANS WER READS AS UNDER : Q.NO.6 IN THE COURSE OF SEARCH ACTION DOCUMENTS HAVE BEEN FOUND AS PER WHICH THE ON-MONEY RECEIVED IN RESPECT OF CERT AIN FLATS FOR M/S. SHRINIWAS BLOSSOM BOULEVARD PROJECT IS AS UNDER : FLAT NO. NAME O F THE CUSTOMER AMOUNT OF ON - MONEY RECEIVED A - 202 SHIPLI RAJMANI SINGH 50.00 LAKHS A - 302 A.K. SINGH/VIMAL MUNDADA 36.81 LAKHS A - 1103 YAYATI PINGLE 57.50 LAKHS A - 803 VISHNU BHIMRAJ 66.00 LAKHS A - 102 VINAY JOSHI 30.00 LAKHS ANS : IN THIS REGARD I HAVE TO STATE THAT, I HAVE ALRE ADY GIVEN CLARIFICATION WITH REGARD TO ABOVE QUERY IN MY STATEMENT RECORDED ON 29/04/2009 AT THE SITE OFFICE PREMISE OF M/S. SHRINIWAS BLOSSOM BOULEV ARD, KOREGAON PARK, PUNE AND I HAVE TO FURTHER CLARIFIED THAT AS STATED EARLIER THE RATES ARE ULTIMATELY FINALIZED BY THE DIRECTORS THEMSELVES, THEREFORE, THEY WILL BE IN A BETTER POSITION TO ANSWER THIS QUERY AS I AM NO T AWARE OF THE MATTER STATED ABOVE. 12 ITA NO.2190/PN/2013 18. FROM THE COPY OF THE ASSESSMENT ORDER WE FIND THE B ASIS OF ADDITION OF RS.50 LAKHS BY THE AO IS MERELY ON PRESUMPTION S AND SURMISES WITHOUT ANY EVIDENCE WHATSOEVER FOUND DURING TH E COURSE OF SEARCH OR POST SEARCH ENQUIRIES THAT THE ASSESSEE H AS INFACT RECEIVED ANY SUCH ON-MONEY. THERE IS ALSO NO CORRESPON DING DISCUSSION IN THE ASSESSMENT ORDER REGARDING THE STATEM ENT OF THE OWNERS ADMITTING PAYMENT OF ON-MONEY OR ANY ALLEGED INCRIM INATING EVIDENCE ESTABLISHING SUCH PAYMENTS. THEREFORE, WHEN THER E WAS NO EVIDENCE FOUND DURING THE COURSE OF SEARCH OR POST SEA RCH ENQUIRIES THAT THE ASSESSEE HAS RECEIVED ANY ON-MONEY ON ACCOU NT OF SALE OF FLAT NO.A-202 AND SINCE NEITHER THE STATEMENT OF THE OWNE RS OF FLAT NO.A-202 WAS PROVIDED TO THE ASSESSEE NOR THE REQUEST OF THE ASSESSEE TO CROSS EXAMINE THE OWNERS OF FLAT NO.A-202 W AS PROVIDED DESPITE REPEATED REQUEST DURING THE ASSESSMENT PROCEE DINGS AND SINCE THE ENTIRE ADDITION IS BASED ON PRESUMPTIONS AND SU RMISES, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) DELETING THE ADDITION OF RS.50 LAKHS MADE BY THE AO ON ACC OUNT OF ON-MONEY RECEIVED IN RESPECT OF FLAT NO. A-202. IN THIS V IEW OF THE MATTER AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) DELETING THE ADDITION, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-09-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 23 RD SEPTEMBER, 2015. 13 ITA NO.2190/PN/2013 ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. & ( ) , / THE CIT(A) CENTRAL, PUNE 4. & / THE CIT CENTRAL, PUNE 5. 6. ) ,,-, -, / DR, ITAT, A PUNE; 1 / GUARD FILE. / BY ORDER , ) , //TRUE C ) , //TRUE COPY// 34 , - / SR. PRIVATE SECRETARY -, / ITAT, PUNE