DEVSHARDHA DEVELOPERS PVT LTD., MUMBAI V. ITO 9 (1)(3), MUMBAI

ITA 256/MUM/2020

AI Insights

The case involves multiple appeals by Dev Sharda Developers Pvt. Ltd. against the orders of the Income Tax Officer and the Commissioner of Income Tax (Appeals) for the assessment years 2007-08 and 2008-09. The appeals challenged the additions made under sections 69C and 69A of the Income Tax Act, 1961, which pertained to unexplained expenditures and unexplained money. The Tribunal also dealt with the penalties imposed under section 271(1)(c) of the Act. The primary contention of the assessee was that the amounts in question were related to accommodation entries and were accounted for in other projects, which did not materialize. However, the Tribunal found that the assessee failed to provide satisfactory evidence to substantiate these claims, leading to the dismissal of the appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125875 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 10-01-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 08-01-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Additional evidence; Tangible material; TDS
• Section: 271(1)(c); 69C; 40A(3); 143(3); 142(1); 234B; 40(a)(ia); 143(1); 250; 143(2); 69A; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.4727/Mum./2011 (Assessment Year : 2007–08) ITA no.8070/Mum./2011 (Assessment Year : 2008–09) ITA no.256/Mum./2020 (Assessment Year : 2007–08) ITA no.257/Mum./2020 (Assessment Year : 2008–09) Dev Sharda Developers Pvt. Ltd. Office no.2, Laxmi Nivas no.5 Chandavarkar Lane, Borivali (W) Mumbai 400 092 PAN – AABCD4640B ................ Appellant v/s Income Tax Officer Ward–9(1)(3), Mumbai ................Respondent Assessee by : None Revenue by : Smt. Mahita Nair Date of Hearing – 11/01/2023 Date of Order – 10/04/2023 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present batch of 4 appeals has been filed by the assessee. ITA No. 4727/Mum./2011 and ITA No. 8070/Mum./2011 are arising out of quantum proceedings challenging the separate orders passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)-19, Mumbai [“learned CIT(A)”], for the assessment years 2007-08 and 2008-09. While ITA No. 256/Mum./2020 and ITA No. 257/Mum./2020 Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 2 arises out of penalty proceedings under section 271(1)(c) of the Act, for the assessment years 2007-08 and 2008-09. 2. When the present batch of appeals was called for hearing neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. Therefore, in view of the above, we proceed to dispose off the present appeal ex–parte, qua the assessee after hearing the learned Departmental Representative (“learned DR”) and on the basis of material available on record. 3. Since the appeals pertain to the same assessee arising out of similar factual matrix, therefore, these appeals were heard together as a matter of convenience and are being disposed off by this consolidated order. ITA No. 4727/Mum./2011 Assessee’s Quantum appeal – A.Y.2007-08 4. In this appeal, the assessee has raised the following grounds:- “1. The learned CIT (A) has erred in law and on facts in virtually upholding the order passed by the Assessing Officer u/s. 143(3) of the Income-tax Act, 1961. 2. The learned CIT (A) has erred in law and on facts in approving the following additions made by the Assessing Officer u/s. 69C of the 3 Act as unexplained expenditure: (i) 75,00,000/- paid to Shri Kishorebhai Gulati for the project Silver Co-op Hsg. Soc. Ltd.; and (ii) 60,00,000/- paid to Shri Kishorebhai Gulati for the Shanti Doot Co-op Hsg. Soc. Ltd. 3. The learned CIT (A) has erred in law and on facts in confirming the addition of 4,50,000/- made by the Assessing Officer as unexplained money u/s. 69A of the Act. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 3 4. The learned CIT (A) has erred in law and on facts in approving the addition of 21,00,000/- made by the Assessing Officer as unexplained expenditure u/s. 69C of the Act. 5. The learned CIT (A) has erred in law and on facts in sustaining the addition and disallowance of interest payment of 20,300/- made by the Assessing Officer as unexplained expenditure u/s. 69C and 40(a)(ia) of the Act. 6. The learned CIT(A) has erred in law and on facts in upholding the addition of Rs.6,00,000/- made by the Assessing Officer as unexplained money u/s. 69A of the Act. 7. The learned CIT (A) has erred in law and on facts in concurring with the addition of Rs.2,22,770/-out of total addition of Rs.2,27,770/- made by the Assessing Officer as unexplained expenditure u/s. 69C and S. 69A of the Act. 8. The learned CIT (A) has erred in law and on facts in sustaining the addition of Rs.221,000/- made by the Assessing Officer as unexplained expenditure u/s. 69C of the Act. 9. The learned CIT (A) has erred in law and on facts in confirming the addition of Rs.50,000/- relating to cash loan given to Shri Devram Mama and interest thereon amounting to Rs.26,580/-. 10. The learned CIT (A) has erred in law and on facts in approving the addition of Rs.51,000/- made by the Assessing Officer as unexplained receipt u/s. 69A of the Act. 11. The learned CIT (A) has erred in law and on facts in sustaining the levy of interest u/s. 234A and 234B of the Income-tax Act. 12. The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.” 5. The issue arising in ground no.1 is general in nature and therefore need no separate adjudication. 6. The issue arising in ground no.2, raised in assessee‟s appeal, is pertaining to the addition of Rs. 1,35,00,000, under section 69C of the Act. 7. The brief facts of the case pertaining to this issue are: The assessee is a company and is engaged in the business of land development, construction work as developers, contractors, builders, agents, estate agents, and activity Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 4 of labour work in civil for the year under consideration, the assessee filed its return of income on 15/05/2008, declaring a total income of Rs.49,730. The return filed by the assessee was processed under section 143(1) of the Act. Thereafter the return was selected for scrutiny and statutory notices under section 143(2) and section 142(1) along with a detailed questionnaire were issued and served on the assessee. In this case, survey action was conducted on 30/06/2008 by the office of DGIT (Investigation), Mumbai at the office premises of the assessee, wherein the assessee declared Rs.75 lakh as undisclosed income for the assessment year 2009-10. Subsequent to the above, the report was sent to the Assessing Officer (“AO”) by the Investigation Wing along with the impounded documents. After examining the said details and impounded material, the assessee was issued a questionnaire seeking various details. From the impounded book/documents, the AO observed that the assessee has made cash payments totalling to Rs.75 lakh on various dates from 01/11/2006 to 04/12/2006 to Mr. Kishore Gulati for the project Silver Co- operative Housing Society. It was also observed from the impounded documents that the assessee has made cash payments totalling to Rs.75 lakh to Mr. Kishore Gulati on various dates from 24/06/2006 to 09/04/2007 for the project Shantidoot Co-operative Housing Society. During the assessment proceedings, the assessee was asked to explain the aforesaid notings found in the impounded documents from its premises. In response thereto, the assessee submitted that the payments made to Mr. Kishore Gulati for the aforesaid 2 projects are the same for the reason that the Silver Co-operative Housing Society project did not materialise and the said money was Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 5 transferred to the Shantidoot Co-operative Housing Society project. However, the AO vide order dated 31/12/2009, passed in section 143(3) of the Act did not agree with the submissions of the assessee and held that the reply of the assessee is very weak and the assessee has failed to substantiate the aforesaid claim by any form of evidence or entry in the books/diary. The AO further held that from the perusal of the dates on which payments have been made to Mr. Kishore Gulati, it is evident that the proposal for the Shantidoot Co-operative Housing Society project was floated before the proposal for the Silver Co-operative Housing Society project. The AO further held that from the date of payment made to Mr. Kishore Gulati it is very clear that payment for both projects have been made simultaneously. Since the assessee could not explain the source of payment, the AO made the addition of Rs.1,35,00,000 under section 69C of the Act. As regards the amount of Rs.15 lakh falling in the financial year 2007-08, the same was considered for disallowance and addition to the income of the assessee in the assessment year 2008-09. 8. During the appellate proceedings before the learned CIT(A), a remand report from the AO was called. In its remand report dated 15/02/2011, the AO considered the impounded documents and objected to the cash book prepared and submitted by the assessee. As per the AO, the Cash book now prepared and submitted is only an afterthought as the transaction in question was never recorded in any statement of accounts and therefore of doubtful veracity. The AO disagreed with the submission of the assessee that the cash of Rs.75 lakh was received from various flat owners from Charkop Shantidoot Building No.1 on the basis that the sale of Charkop Shantidoot Building has been made over Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 6 a period of time. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue by observing as under:- “6. I have considered the facts of the case the findings of the A.O., the Remand Report, and also the contentions, as raised by the appellant company. I have also perused the impounded material/documents. As stated by the A.O., there are notings by hand, of cash payments having been made in the impounded material on different pages of the notebooks. The appellant has sought to explain stating that the entire onmoney routed is only Rs. 75,00,000/- which was derived from the sale of flats of the Charkop Project. It is further stated that initially the on money was paid for the Silver Co-operative Hsg. Soc. Project but since the project did not materialize it was diverted for the Shantidoot Project. In this regard I have to state that I am in agreement with the findings c: the A.O. that as per the impounded material it cannot be stated with any amount of certainty that sum of Rs. 75,00,000/- was derived from Charkop Hsg. Proejct and it is this sum alone which was rooted between the two projects. Even from the dates as mentioned on which the on money payments were made it can be seen that no conclusions can be drawn with any amount of certainty. It is also reckoned that the appellant had been in land development and construction business in earlier years and the claim made that Rs. 75,00,000/- was generated from sale of Charkop Project Flats and it was this sum that was in rotation is simply not acceptable not being verifiable, for the simple reason that the sum denotes cash generated out side the books of accounts. Therefore, the explanation as regarding the source is bereft of any acceptable evidence. In the said circumstance the addition of Rs. 1,35,00,000/- stands confirmed.” Being aggrieved, the assessee is in appeal before us. 9. During the course of hearing, the learned DR explained the facts of the case and vehemently relied upon the order of the lower authorities. 10. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 7 CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.2 raised in assessee‟s appeal is dismissed. 11. The issue arising in ground no.3, raised in assessee‟s appeal, is pertaining to the addition of Rs.4,50,000 as unexplained money under section 69A of the Act. 12. The brief facts of the case pertaining to this issue are: From the impounded documents, it was observed that the assessee has given loan of Rs. 4,50,000 on 07/11/2006 and 28/11/2006 in cash and received the same in cash on 12/01/2007. In absence of an explanation regarding the source of money and since the amount was not recorded in the books of accounts, the AO treated the sum of Rs.4,50,000 as „unexplained money‟ under section 69A of the Act. The learned CIT(A) dismissed the appeal filed by the assessee on this issue by observing as under:- “7.1 In this regard it is the explanation of the appellant that the said sums represents money received from Ramajibhai to whom money used to be kept for safe keeping purposes. It is further stated that this is the same money that was given to Kishorbhai Gulati for the Silver Project. I am unable to accept the said explanation of the appellant. As stated by the A.O. in the Remand Report these are transactions which were never recorded in any statement of accounts, and the explanation that the amounts represents money kept for safe keeping with a trusted person, which was made use of for the payments of Rs. 75,00,000/- for the Silver Project and hence is not a loan advanced and taken back is absolutely unverifiable and to be rejected. The addition of Rs. 4,50,000/- stands confirmed.” Being aggrieved, the assessee is in appeal before us. 13. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 8 CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.3 raised in assessee‟s appeal is dismissed. 14. The issue arising in ground no.4, raised in assessee‟s appeal, is pertaining to the addition of Rs.21 lakh made by the AO as unexplained expenditure under section 69C of the Act. 15. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that the assessee has paid Rs.15 lakh to Mr.Devram Doulhe on 07/11/2006 and Rs. 6 lakh to some person on 14/11/2006, whose identity is not revealed. Further, it was observed that the said transaction was executed in cash. In absence of any explanation by the assessee regarding the source, nature of the expense, and the identity of the person to whom the said money is given, the AO made the addition of Rs.21 lakh by considering the same as „unexplained expenditure‟ under section 69C of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- “8.2 I am in agreement with the finding of the A.O. As per the notings in page 103 of Annexure Al which has been examined by me it has been noticed that the sum of Rs. 21,00,000/- is written as representing "on payments". In the said circumstances the explanation now put forth by the appellant the said sums represent amounts received back from Devram Dholu, which were kept Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 9 with him for safe keeping is not acceptable, being totally unsupported by any tangible evidence. The addition as made under s. 69C stands sustained.” Being aggrieved, the assessee is in appeal before us. 16. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.4 raised in assessee‟s appeal is dismissed. 17. The issue arising in ground no.5, raised in assessee‟s appeal, is pertaining to the addition of interest payment of Rs. 20,300. 18. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that an amount of Rs. 2 lakh was taken as a loan at an interest of 1.5% out of which is 1 lakh has been paid to Mr. Dharamsi. The amount of Rs.20,300 represents the interest paid on the said loan obtained. Further, the assessee was not been able to explain the person to whom the same has been paid and the identity of the person. Since there was no compliance provisions of section 40(a)(ia) of the Act in respect of the TDS on the said amount of Rs.20,300. Accordingly, the AO disallowed the amount of Rs.20,300 under section 69C and section 40(a)(ia) of the Act. The learned CIT(A) vide impugned order Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 10 dismissed the appeal filed by the assessee on this issue, by observing as under:- “9.1 The A.O. has made the addition of Rs. 20,300 stating that Rs. 2,00,000/- represents amount of loan taken in cash on interest at 1.5% out of which 1,00,000/- has been paid to Shri Dharamshi and Rs. 20,300/- represents interest paid on the loan obtained. Even during the course of hearing of the appeal no proper explanation was given to explain the transaction and the payment of Rs. 20,300/- Thus, it represents unexplained expenditure and it is also undisputed that no TDS has been made on the payment. The addition as made stands sustained.” Being aggrieved, the assessee is in appeal before us. 19. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A), in absence of a proper explanation by the assessee, dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.5 raised in assessee‟s appeal is dismissed. 20. The issue arising in ground no.6, raised in assessee‟s appeal, is pertaining to the addition of Rs.6,00,000, as unexplained money under section 69A of the Act. 21. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that an amount of Rs.6,00,000, was taken from one Mr. Nanjibhai, however, the Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 11 assessee was not able to establish the source of the same and the identity of the person. Therefore, the amount of Rs. 6,00,000, was added back to the income of the assessee under section 69A of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- “10.1 During the course of hearing of the appeal the appellant filed additional evidence vide Annexuer 6 (Paper Book-Page No. 69) to support its contention that Shri Nanjibhai from whom the loan was taken is an agriculturist. The A.O. considered the additional evidence and submitted as per the Remand Report that the additional evidence as furnished is 7/12 extract in respect of land held by Shri Nanjibhai and that there are no other details such as copy of return of income, capital a/c and statement of income of Shri Nanjibhai. Therefore the A.O. held that it is not proved that he is an agriculturist that his only source of income is from Agriculture. 10.2 I have considered the fact and am of the view that mere filing of a 7/12 extracts does not in any way prove the source of the money lent nor does it any way prove the genuineness of the transaction. The findings of the A.O. with regard to the sum of Rs. 6,00,000/- and the addition as made under s. 69A stands confirmed.” Being aggrieved, the assessee is in appeal before us. 22. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.6 raised in assessee‟s appeal is dismissed. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 12 23. The issue arising in ground no.7, raised in assessee‟s appeal, is pertaining to the addition of Rs.2,22,700 as unexplained expenditure under section 69C of the Act. 24. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that there were certain expenses and loans recorded by the Directors of the assessee in their diaries but which are not recorded in their books of accounts. In absence of explanation furnished by the assessee, the amount of Rs.2,22,700 was considered as „unexplained expenditure‟ as per section 69C of the Act. The learned CIT(A) vide impugned order granted partial relief to the assessee on this issue, by observing as under:- “11.3 After considering the submissions and the Remand Report it is held that an amount of Rs. 5,000/- is treated as having been explained and hence is deleted. As regards the rest of the entries, it is seen that the appellant has sought to explain the said sums as having been received from Nanjibhai, not for the purpose of the appellant's business but for the benefit of Dharmashibhai. If that be so, it has not been explained as to why the said sums were not directly given to a third party if it indeed was for the benefit of the third party. The submission that appellant was acting only a conduit appears to be only a make believe especially in the absence of any other relevant corroborative material. Therefore, I am inclined to sustain the findings of the A.O. as per the Remand Report. Barring the sum of Rs. 5000/- treated as explained, the balance sum of Rs. (2,27,770-5000) 2,22,770/- is brought to tax.” Being aggrieved, the assessee is in appeal before us. 25. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 13 issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.7 raised in assessee‟s appeal is dismissed. 26. The issue arising in ground no.8, raised in assessee‟s appeal, is pertaining to the addition of Rs.2,21,000 as unexplained expenditure under section 69C of the Act. 27. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that the payments/expenses were incurred by the assessee in case for the purpose of payment made to Mr. Dinesh Kimavat and brokerage paid to Mr. Dilip Zaveri. The AO observed that the said payments/expenses were not explained by the assessee inspite of sufficient and numerous opportunities being given to it. Therefore, the said expenses amounting to Rs.2,21,000, was considered as unexplained payment under section 69C of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- “Addition of Rs.2,21,000/– under s. 69C: 12. It is stated by the A.O. in Para 6.6 of the assessment order that Page 105 of Annexure A2 showed notings with regard to cash payments made to Dinesh Khimavat and Dilip Zaveri. During the course of the hearing of the appeal it was stated by the appellant that the said payments represents brokerage and labour charges towards sale of Flat No. 2001 and Flat No. 2002, Kent Garden, TPS 3, Borivali (W), Mumbai. It vas further stated that the said expenses which were not accounted, may be allowed and treated as disclosed, when the disclosure of Rs. 75,00,000/- was made during the survey. After examining the said explanation the A.O. has stated as follows in the Remand Report. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 14 The A.O. on the basis of page 105 of Annexure A-2 added the amount of Rs. 2,21,000/- in absence of any submission during the assessment proceedings. Now, at the time of remand proceedings, the assessee has submitted the bills of Rs. 50,000/- paid to Mr. Kimavat as labour charges. It is observed that the assessee has not deducted any TDS of the same and hence is to be disallowed u/s 40(a) (ia) of the Act. Further, the assessee has made cash payment hence also contravened the section 40A(3) of the Act. As can be seen the entire sum of Rs. 2,21,000/- represents unaccounted payments. Plea of the assessee that the same may be considered as part of the disclosure made during the time of survey is unacceptable. In the absence of any tangible material. The addition of Rs. 2,21,000/- stands confirmed.” Being aggrieved, the assessee is in appeal before us. 28. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.8 raised in assessee‟s appeal is dismissed. 29. The issue arising in ground no.9, raised in assessee‟s appeal, is pertaining to the addition of Rs.50,000, relating to the cash loan given to Shri Devram Mama and interest thereon amounting to Rs.26,580. 30. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that the amount of Rs.50,000, was given as a cash loan to Mr. Devram Mama on which interest of Rs.26,580, was determined as a receipt. As the assessee did Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 15 not explain the above transaction the amount of Rs.50,000, was added as income under section 69A of the Act and the interest of Rs.26,580, was considered as income not offered under the head „income from other sources‟. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue. Being aggrieved, the assessee is in appeal before us. 31. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.9 raised in assessee‟s appeal is dismissed. 32. The issue arising in ground no.10, raised in assessee‟s appeal, is pertaining to the addition of Rs. 51,000 as unexplained receipt under section 69A of the Act. 33. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that the assessee has claimed to have received an amount of Rs.51,000. Since the assessee could not explain the said receipt of Rs.51,000, the same was added under section 69A of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 16 “Addition of Rs. 51,000/- under s. 69A 18. As per page 47 of Annexure A2 a sum of Rs. 51,000/- was seen to have been received. In the absence of any proper explanation the said sum of brought to tax under s 69A. In this regard, the explanation of the appellant that Rs. 51,000/- represents labour income out of which there are expenses also. In the absence of any evidence the transaction being out of the books the addition of Rs. 51,000/- under s. 69A stands confirmed.” Being aggrieved, the assessee is in appeal before us. 34. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and the remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.10 raised in assessee‟s appeal is dismissed. 35. Insofar as the levy of interest under section 234A of the Act is concerned, we deem it appropriate to remand this issue to the file of the Assessing Officer for de novo adjudication after the necessary examination of the fact whether the return of income was filed by the assessee within the prescribed time under the Act. While the issue pertaining to the charging of interest under section 234B of the Act is consequential in nature. Therefore, ground no.11 is allowed for statistical purposes. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 17 36. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 8070/Mum./2011 Assessee’s Quantum appeal – A.Y.2008-09 37. In this appeal, the assessee has raised the following grounds:- “(1) On the facts and in the circumstances of the case and in law, the Ld. C.I.T.(A) erred in confirming the addition of amount of Rs. 15,00,000/- as unexplained expenditure u/s 69C. (2) In doing so, the Ld CIT(A) failed to appreciate that the amounts were by way of accommodation entry for proposing Shantidoot Society when Silver project did not materialize and they were taken into consideration in making a declaration of Rs. 75 lacs AY. 2009-10. (3) On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in confirming the addition of amount of Rs. 36,000/- being interest paid to Mr. Nanji Devashi and amount of Rs. 9,000/- being interest receivable from Dharamshi. (4) On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in confirming the addition of amount of Rs. 1,97,00,000/- u/s 69A. (5) In doing so, the Ld CIT(A) failed to appreciate that the alleged notings about the project Evergreen Restaurant & Bar were just a projection and the amounts mentioned therein were never paid as the project did not materialize. (6) Without prejudice to the above ground the Ld. CIT(A) erred in not taking into account the fact that the addition should have been confirmed of a lower amount as on the basis of the same notings addition of Rs. 1,35,00,000/- was made in A.Y. 2007-08 and payment of Rs. 47 lacs was made in cheque which was accounted for in the books. (7) The Appellant craves to add, alter or delete all or modify any or all the above grounds of appeal.” 38. The issue arising in grounds no.1 and 2, raised in assessee‟s appeal, is pertaining to addition of Rs.15,00,000, as unexplained expenditure under section 69C of the Act. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 18 39. The brief facts of the case pertaining to this issue are: For the year under consideration, the assessee filed its return of income on 30/09/2008 declaring a total income of Rs.45,260. Since an amount of Rs.1.35 crore paid to Mr. Kishore Gulati in respect of Shantidoot Co-operative Housing Society project was already added in the assessment year 2007-08, the balance of Rs.15,00,000 falling in this year was added under section 69C of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- “5.3 I have carefully considered the facts of the case, the submissions of the appellant & assessment order. The main plea of the appellant is that amount of Rs.15,00,000/- was rotated between the two projects and thus the addition cannot be made twice. It is noted that an amount of Rs.25,00,000/- was paid in cash to Kishorbhai between June, 06 Oct.,06 apparently for Shantidoot project as indicated in Annexure A-1, A-2, A-5 of the impounded documents. There is no evidence that the said cash was returned back to the Director of the appellant company nor it is proved by any evidence that the approval for Shantidoot project did not materialize. Subsequently during November & December,06 Rs.75,00,000/- was paid in cash for Silver project and thereafter Rs.50,00,000/- was paid during March-April,07 for Shantidoot project. Though there is no overlap in dates, it cannot be established by any evidence that Shantidoot project was planned first and then it got delayed and thereafter Silver project was initiated and thereafter the same also did not fructify and thereafter Shantidoot project was revived. There is no evidence in the form of correspondence or any details to show that the approvals were delayed from MHADA. Though the assessee's version that the money was returned and again given back do fit in with the dates of cash payment to Kishorbhai but the said assertions and transactions are not proved by any third party evidence. The addition of Rs.15,00,000/- is thus confirmed.” Being aggrieved, the assessee is in appeal before us. 40. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 19 the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, grounds no.1 and 2 raised in assessee‟s appeal are dismissed. 41. The issue arising in ground no.3, raised in assessee‟s appeal, is pertaining to addition of Rs.36,000 being interest paid to Mr. Nanji Devashi and amount of Rs. 9000 being interest receivable from Dharamshi. 42. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that interest of Rs.36,000 was paid to Mr. Nanji Devashi and amount of Rs. 9000 being interest receivable from Dharamshi. Since the loan obtained from Mr.Nanji Devashi was added under section 69A of the Act in the assessment year 2007-08, payment of interest of Rs.36,000 in cash and accrual of interest of Rs.9,000 was added under section 69C and section 40A(3)(a) of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- “7.1 The AO observed that the assessee has paid interest of Rs.36,000/- to Mr. Nanji Devshi during the year under consideration and interest of Rs.9,000/- had accrued as receivable to the assessee from Shri Dharamshi. In the assessment order for A.Y.2007-08, the loans obtained from Mr. Nanji Devshi are not recorded in the books of accounts failing which the said amounts were disallowed and added to the income of the assessee U/s.69A of the I.T. Act, 1961. Similarly, the payment of interest of Rs.36,000/- and accrual of interest of Rs.9,000/- to the assessee are also not recorded in the books of accounts. The assessee has paid the said interest of Rs.36,000/- in cash and no TDS had been deducted on it. Similarly, Rs.9,000/- being interest accrued had also not been offered as peme for the year under consideration. 7.2 In appeal it is fairly admitted that a similar addition was confirmed in A.Y.07-08 by CIT(A) but the matter is pending before ITAT. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 20 7.3 I have carefully considered the facts of the case, the submissions of the appellant, assessment order. Relying on the order of my predecessor on a similar issue the ground No.5 is dismissed.” Being aggrieved, the assessee is in appeal before us. 43. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, ground no.3 raised in assessee‟s appeal is dismissed. 44. The issue arising in grounds no.4 and 5, raised in assessee‟s appeal, is pertaining to addition of Rs.1.97 crore under section 69A of the Act. 45. The brief facts of the case pertaining to this issue are: During the assessment proceedings, from the impounded documents it was observed that the assessee has given an amount of Rs.1.97 crore to Mr. Kishore Bhai on 15/08/2007 and the said amount is not recorded in its books of account. It was further observed that the amount involved and advanced in connection with the so-called alleged project of Evergreen Restaurant & Bar is Rs.1.97 crore. Accordingly, the said amount was added under section 69A of the Act. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee on this issue, by observing as under:- Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 21 “8.3 I have carefully considered the facts of the case, the submissions of the appellant, assessment order. Page 9 of Annexure A-7 and page 15 of Annexure A-8 which is part of the impounded documents and is also attached to the assessment order, reveal that Mr. Devram Bhavani, Director of the company had given as on 15.8.07, Rs.1,97,00,000/- to Kishorbhai out of which Rs.97,00,000/- has been adjusted in Evergreen Restaurant project and balance Rs.1,00,00,000/- is lying with Kishorbhai. Further from Rs.97,00,000/-, Rs.22.5 lac was given to Rajubhai who has deposited the amount in his account so the investment in Evergreen project is Rs.74,50,000/-. It is also indicated in the paper that Rs.5 lac was given to MHADA by Kishorbhai and that Rs.10 lac was also given by Rajubhai to MHADA.From above narrations, it appears that upto 15.8.07, Rs.1.97 cr. was given to Kishorbhai and the source of the said amount has not been explained vis-à-vis books of account. The plea of the appellant that the said figures are mere projections is not correct as these referred to amounts given to Rajubhai and Kishorbhai. Undisputably the amount of Rs.1.97 cr. is not recorded in the books. It has also not been shown how Rs.47 lac. of deposits recorded in books against Kishorbhai form part of transaction relating to Evergreen project. Although, the alternate plea of the appellant that the addition of Rs.1.35 cr. in A.Y.2007-08 by A.O. is covered by the notings in instant document looks probable but the appellant could not substantiate this aspect vis-à-vis entries in impounded documents pertaining to A.Y 2007-08 and in the current year. The appellant ought to have shown the cash flow in different years against various projects to suggest that same amount was rotated in different projects. The appellant has not come out clean with all the details explaining the cash transactions in different years and under these circumstances, the addition of Rs.1.97 cr. is confirmed. Ground No.6 is dismissed.” Being aggrieved, the assessee is in appeal before us. 46. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A) after considering the submissions of the assessee, and remand report filed by the AO has dismissed the appeal filed by the assessee on this issue. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, grounds no.4 and 5 raised in assessee‟s appeal are dismissed. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 22 47. The issue arising in ground no.6 does not arise from the facts and circumstances of the present case and therefore, the same is dismissed. 48. In the result, the appeal by the assessee is dismissed. ITA No. 256/Mum./2020 Assessee’s Penalty appeal – A.Y.2007-08 49. The only grievance of the assessee in this appeal is against the levy of penalty of Rs. 58,03,540 under section 271(1)(c) of the Act. 50. Since the learned CIT(A), in the quantum proceedings, had confirmed the addition of Rs. 1,60,64,070 under section 69C, Rs. 11,51,000 under section 69A of the Act and interest of Rs. 26,580, the AO vide order dated 01.03.2013 passed under section 271(1)(c) of the Act levied a penalty of Rs. 58,03,540. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee, by observing as under:- “7.1 I have considered the rival contentions. In this case, incriminating documents were found and impounded in the course of the survey conducted in the case of the appellant. The additions were made based on the transactions recorded in the impounded materials found in the course of the survey. I also find that the additions in respect of which the penalty has been imposed have been confirmed by the CIT(A). The nature of the additions made has been discussed in detail in paras 4.1 to 4.9 above. Considering the nature of additions, I am of the view that it was a fit case for imposition of penalty u/s.271(1)(c) of the Act. 7.2 The contention of the appellant that the additions are based on wrong appreciation of facts is not acceptable since those additions have already confirmed by the CIT(A). 7.3 In view of the above, I confirm the penalty imposed by the AO. In the result, the grounds of appeal No.1 to 3 are dismissed.” Being aggrieved, the assessee is in appeal before us. Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 23 51. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A), after considering the submissions of the assessee, dismissed the appeal filed by the assessee. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, the sole ground raised in assessee‟s appeal challenging the levy of penalty under section 271(1)(c) of the Act is dismissed. 52. In the result, the appeal by the assessee is dismissed. ITA No. 257/Mum./2020 Assessee’s Penalty appeal – A.Y.2008-09 53. The only grievance of the assessee in this appeal is against the levy of penalty of Rs. 72,21,175, under section 271(1)(c) of the Act. 54. Since the learned CIT(A), in the quantum proceedings, had confirmed all the additions except Rs.14,000, made under section 40(a)(ia) of the Act, the AO vide order dated 01.03.2013, passed under section 271(1)(c) of the Act levied a penalty of Rs. 72,21,175. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee, by observing as under:- “7. Decision: 7.1 I have considered the rival contentions. In this case, incriminating documents were found and impounded in the course of the survey conducted in the case of the appellant. The additions were made based on the transactions recorded in the impounded materials found in the course of the survey. I also find that the additions in respect of which the penalty has been imposed have Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 24 been confirmed by the CIT(A). The nature of the additions made has been discussed in detail in paras 4.1 to 4.3 above. Considering the nature of additions, I am of the view that it was a fit case for imposition of penalty u/s.271(1)(c) of the Act. 7.2 The contention of the appellant that the additions are based on wrong appreciation of facts is not acceptable since those additions have already confirmed by the CIT(A). 7.3 In view of the above, I confirm the penalty imposed by the AO. In the result, the grounds of appeal No.1 to 3 are dismissed.” Being aggrieved, the assessee is in appeal before us. 55. We have considered the submissions of the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A), after considering the submissions of the assessee, dismissed the appeal filed by the assessee. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. As a result, sole ground raised in assessee‟s appeal challenging the levy of penalty under section 271(1)(c) of the Act is dismissed. 56. In the result, the appeal by the assessee is dismissed. Order pronounced in the open Court on 10/04/2023 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 10/04/2023 Dev Sharda Developers Pvt. Ltd. ITA no.4727/Mum./2011 ITA no.8070/Mum./2011 ITA no.256/Mum./2020 ITA no.257/Mum./2020 Page | 25 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai