The Dy.CIT, Circle-3(1)(1), Ahmedabad V. Nishant Construction Pvt. Ltd., Ahmedabad

ITA 2242/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2896 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AP ARNA AGRAWAL
• Assessee Lawyers: PARIN SHAH ARS; S N SOPARKAR
• Keywords: Question of law
• Section: 143(3); 201; 69A; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER THE DCIT, CIRCLE - 3(1)(1), AHMEDABAD (APPELLANT) VS M/S. NISHANT CONSTRUCTION PVT. LTD. 801 - 802, REGENCY PLAZA, ANANDNA G AR CROSS ROAD, SATELLITE, AHMEDABAD PAN: AAACN3752B (RESPONDENT) REVENUE BY : S H RI APARNA AGRAWAL , CIT - D . R. ASSESSEE BY: SHRI S.N. SOPARKAR AND SHRI PARIN SHAH, ARS DATE OF HEARING : 0 4 - 03 - 2 019 DATE OF PRONOUNCEMENT : 05 - 03 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO APPEALS FILED BY ASSESSEE FOR A.Y. 2013 - 14 TO 2014 - 15 , ARI SE FROM ORDER OF THE CIT(A) - 9, AHMEDABAD DATED 11 - 07 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHO RT THE ACT . I T A NO S . 2242 & 2243 / A HD/20 17 A S S ESSMENT YEAR 2013 - 14 TO 2014 - 15 I .T.A NO S . 2442 & 2243 /AHD/20 17 A.Y. 2013 - 14 TO 2014 - 15 PAGE NO D CIT VS. M/S. NISHANT CONSTRUCTION PVT. LTD. 2 2. AS THE FACTS IN BOTH THE APPEALS OF THE ASSESSEE ARE SIMILAR, SO, WE TAKE ITA NO. 2442/AHD/2017 AS THE LEAD CASE AND ITS FINDING WILL BE APPLICABLE TO THE ITA NO. 2243/AHD/2017 FOR THE SAKE OF CONVENIENCE. ITA NO. 2442/AHD/2017 3 . THE S OLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) IN DELETING THE ADDITION OF RS. 32 , 13 , 77 , 692/ - ON ACCOUNT OF ALLEGED ON MONEY RECEIVED IN RESPECT OF RATNAKAR III AND IV SCHEME BUILT AND DEVELOPED BY THE ASSESSEE COMPANY . AT THE TIME OF HEARING THIS APPEAL, THE LD. COUNSE L HAS BROUGHT TO THE NOTICE OF THE BENCH THAT IDENTICAL ISSUE BASED ON SIMILAR FACTS HAS BEEN DECIDED BY THE CO - ORDINATE BENCH OF THE ITAT IN THE ASSESSMENT YEAR 2011 - 12 AND 2012 - 13 IN FAVOUR OF THE ASSE SSEE VIDE ITA NO. 1502/AHD/2015 DATED 14 - 02 - 2017 AND ITA NO. 378/AHD/2016 DATED 24 - 04 - 2017 . FURTHER, HE HAS BROUGHT TO OUR NOTICE THAT THE D ECISION OF THE CO - ORDINATE BENCH OF THE ITAT HAS BEEN CONFIRMED BY THE HON BLE JURISDICTIONAL HIGH COURT FOR THE ASSESSMENT YEAR 2011 - 12 ON SIMILAR ISSUE AND SIMILAR FACTS VIDE TAX APPEAL NOS. 809 AND 89 8 OF 2017 DATED 9 TH APRIL, 2018 (2019) 101 TAXMAN.COM 179 (GUJ) . HE HAS FURTHER SUBMITTED THAT SPECIAL PETITIO N FILED BY THE REVENUE AGAINST T H E AFORESAID DECISION O F HON BLE GUJARAT HIGH COURT HAS ALSO BEEN DISMISSED BY THE HON BLE SUPREME COURT VIDE (2019) 101 TAXMAN .COM 180 (SC) PR. CIT VS. NISHANT CONSTRUCT PVT. LTD. DATED 14 TH DEC, 2018. 4 . WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE AFORESAID DECISION O F ITAT, GUJARAT HIGH COURT IN THE CASE OF ASSESSEE ITSELF I .T.A NO S . 2442 & 2243 /AHD/20 17 A.Y. 2013 - 14 TO 2014 - 15 PAGE NO D CIT VS. M/S. NISHANT CONSTRUCTION PVT. LTD. 3 ON SIMILAR ISSUE BASED ON SAME FACTS AND NOTICED THAT THE AFORESAID MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. RELEVANT PART OF THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT VIDE TAX APPEAL NO 809 & 898 OF 2017 IN THE CASE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2011 - 12 IS REPRODUCED AS UNDER: - AKIL KURESHI, J. - THESE TWO APPEALS CONCERNING THE SAME ASSESSEE FOR TWO SEPARATE ASSESSMENT YEARS RAISED SAME QUESTIONS. WE MAY PERUSE FACTS FROM TAX, APPEAL NO. 898 OF 2017 CHA LLENGING THE JUDGEMENT OF THE INCOME TAX APPELLATE TRIBUNAL DATED 14.02.2012 RAISING FOLLOWING QUESTION FOR OUR CONSIDERATION: 'WHETHER THE APPELLATE TRIBUNAL WAS CORRECT IN LAW - AND ON FACTS IN DELETING THE ADDITION OF RS. 32.56 CRORES MADE BY THE A.O. D URING THE YEAR UNDER CONSIDERATION?' I 2. THE RESPONDENT - ASSESSEE IS ENGAGED IN THE CONSTRUCTION DEVELOPMENT OF PROJECTS. THE ASSESSEE WAS SUBJECTED TO SURVEY OPERATION DURING WHICH, CERTAIN DOCUMENTS WERE FOUND AND IMPOUNDED. ONE SUCH DOCUMENT WAS A LOOSE PAPER CONTAINING CERTAIN FIGURES OF THE AREA AND RATE OF SALE OF CONSTRUCTED AREA. ON THE BASIS OF SUCH DOCUMENTS, FURTHER INQUIRIES WERE MADE BY THE ASSESSING OFFICER. HE COLLECTED MATERIAL PERTAINING TO THE RATES PREVAILING IN THE MARKET AND CAME TO THE CONCLUSION THAT THE ASSESSEE HAD RECEIVED ON - MONEY IN SALE OF FLATS IN THE SCHEMES KNOWN AS RATNAKAR 3 AND RATNAKAR 4 SITUATED IN SATELLITE AREA OF CITY OF AHMEDABAD. HE THEREFORE, MADE ADDITION TO THE TUNE: OF R S. 32.56 CRORES (ROUNDED OFF). 3. ASSESSE E CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER. COMMISSIONER: (APPEALS) CONFIRMED THE ADDITION PLACING HEAVY RELIANCE ON THE FOLLOWING THREE FACTORS: (I) ABOVE NOTED LOOSE DOCUMENTS CONTAINED REFERENCE TO CONSTRUCTED AREAS AND RATE OF SALE; , I (II) THE ASSESSMENT PROCEEDINGS CONCERNING THE BUILDERS M/S. SAMBHAV INFRASTRUCTURE PVT. LTD IN WHICH THE ASSESSEE HAD ADMITTED TO HAVE RECEIVED SIZEABLE ON - MONEY DURING SALE OF FLATS IN THE SAME VICINITY; (III) FROM SURVEY AND THE MATERIAL COLL ECTED BY THE ASSESSING OFFICER FROM THE WEBSITE WHICH, ACCORDING TO HIM INDICATED PREVAILING MARKET RATES. 4. THE ISSUE WAS CARRIED IN FURTHER APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. THE TRIBUNAL AT ONE STAGE REMANDED THE PROCEEDINGS FOR GIVING OPPO RTUNITY TO THE ASSESSEE TO SEEK CROSS - EXAMINATION OF REPRESENTATIVE OF M/S. SAMBHAV INFRASTRUCTURE PVT. LTD. THE ASSESSEE HAD THEREFORE COME TO THE HIGH COURT AND COMPLAINED ABOUT THE REMAND OF THE PROCEEDINGS CONTAINING THAT NO CROSS - EXAMINATION WAS SOUGH T OR IS BEING INSISTED UPON. THE HIGH COURT THEREFORE REQUESTED THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS. THEREUPON, THE TRIBUNAL RULED IN FAVOUR OF THE ASSESSEE PRINCIPALLY HOLDING THAT THERE WAS NO RELIABLE OR INDEPENDENT EVIDENCE TO COME TO THE CONCL USION THAT THE ASSESSEE HAD ACCEPTED ON - MONEY IN THE SALE OF THE CONSTRUCTED PROPERTIES. 5. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES AND PERUSED THE DOCUMENTS ON RECORD. THE TRIBUNAL DISCARDED LOOSE DOCUMENT ON THE GROUND THAT THE SAME DID NOT PERTAIN TO ASSESSEE'S SCHEMES RATNAKAR 3 AND RATNAKAR 4 SINCE THE DOCUMENT REFERRED TO THE AREAS AND RATES OF THE PENTHOUSE WHEREAS SCHEME RATNAKAR 3 DOES NOT HAVE A PENTHOUSE AND SCHEME RATNAKAR 4 DOES NOT HAVE 4 BHK FLATS AND THOUGH HAS PENTHOUSE, AREA DOES NOT MATCH WITH THE LOOSE DOCUMENT. THIS THEREFORE IS SUBSTANTIALLY A QUESTION OF FACT. IF WE ELIMINATE THESE DOCUMENTS FROM CONSIDERATION, WHAT REVENUE WOULD HAVE ARE THE ADMISSIONS MADE BY THE REPRESENTATIVE OF M/ S. SAMBHAV INFRASTRUCTURE PVT. LTD OF HAVING RECEIVED ON - MONEY IN SALE OF FLATS AND THE COMPARISON BY THE REVENUE AUTHORITIES OF THE GIVEN RATES FOR THE CONSTRUCTED PROPERTIES IN THE SAME AREA. FIRSTLY NEITHER THE ASSESSING OFFICER NOR THE CIT (APPEALS) HAD COMPARED THE RATES OF M/S. I .T.A NO S . 2442 & 2243 /AHD/20 17 A.Y. 2013 - 14 TO 2014 - 15 PAGE NO D CIT VS. M/S. NISHANT CONSTRUCTION PVT. LTD. 4 SAMBHAV INFRASTR UCTURE PVT. LTD OR ANY OTHER CONSTRUCTED PROPERTIES WHICH WAS SOLD DURING THE SAME TIME IN THE SAME AREA. EVEN AFTER MAKING THE ADDITIONS IN CASE OF M/S. SAMBHAV INFRASTRUCTURE PVT. LTD WITH THE AID OF THE CONFESSIONAL STATEMENTS MADE BY THE REPRESENTATIVE , NEITHER THE ASSESSING OFFICER NOR THE CIT (APPEALS) CO - RELATED THE SALE WITH THAT OF THE ASSESSEE BY ESTABLISHING THAT THE ?;ALES WERE DURING THE SAME PERIOD IN RELATION TO THE PROPERTIES WHICH OFFERED SIMILAR ADVANTAGES. IN FACT, THEIR CONTENTION WAS TH AT THIS DEMONSTRATED A UNIFORM TREND OR A PATTERN IN THE INDUSTRY OF CASH TRANSACTIONS. 6. THE REFERENCE TO THE MATERIAL COLLECTED FROM THE WEBSITE WAS ALSO BEREFT OF COMPARABILITY IN TERMS OF AREA, LOCATION AND PERIO D. ALL IN ALL, THE ENTIRE ISSUE WAS FA CTUAL IN NATURE. THE TRIBUNAL HAVING CONSIDERED THE RELEVANT FA CTS, NO QUESTION OF LAW ARISES. FURTHER, WE HAVE NOTICED THAT HON BLE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE AFORESAID DECISION OF HON BLE HIG H COURT WHEREIN IT IS HELD AS UNDER: - SECTION 69A OF THE INCOME - TAX ACT, 1961 - UNEXPLAINED MONEY (ON MONEY) - ASSESSEE WAS ENGAGED IN CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECTS - IT WAS SUBJECTED TO SURVEY OPERATION DURING WHICH CERTAIN DOCUMENTS W ERE FOUND AND IMPOUNDED - ON BASIS OF SUCH DOCUMENTS, ASSESSING OFFICER CAME TO CONCLUSION THAT ASSESSEE HAD RECEIVED ON - MONEY FROM SALE OF FLATS - HE THEREFORE, MADE CERTAIN ADDITION TO ASSESSEE'S INCOME - TRIBUNAL, HOWEVER, DELETED SAID ADDITION ON GROUN D THAT THERE WAS NO RELIABLE OR INDEPENDENT EVIDENCE TO COME TO CONCLUSION THAT ASSESSEE HAD ACCEPTED ON - MONEY FOR SALE OF CONSTRUCTED PROPERTIES - HIGH COURT UPHELD ORDER PASSED BY TRIBUNAL - WHETHER, ON FACTS, SLP FILED AGAINST DECISION OF HIGH COURT WAS TO BE DISMISSED - HELD, YES [IN FAVOUR OF ASSESSEE] THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON BLE SUPREME COURT , W E DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE, THEREFORE, WE JUSTIFY THE DECISION OF LD. CIT(A) AND APPEAL OF THE REVENUE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 05 - 03 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 05 /03 /2019 I .T.A NO S . 2442 & 2243 /AHD/20 17 A.Y. 2013 - 14 TO 2014 - 15 PAGE NO D CIT VS. M/S. NISHANT CONSTRUCTION PVT. LTD. 5 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,