HARSH JAIN, MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 2710/MUM/2013

• Counselvise Citation: 271019914 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 19-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHASHI BHUSHAN PRASAD
• Assessee Lawyers: POONAM SOMAIYA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Loose papers; Document seized; Deemed to accrue or arise in india; Retraction; Documents seized
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.2710/M/2013 ASSESSMENT YEAR: 2009-10 HARSH JAIN, 82, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI 400 021 PAN: AABPJ 0984J VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -39, AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, & MS. POONAM SOM AIYA A.R. REVENUE BY : SHRI SHASHI BHUSHAN PRASAD, D.R. DATE OF HEARING :11.06.2015 DATE OF PRONOUNCEMENT : 17.07.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEAL RELEVANT TO ASSESSMENT YEA R 2009-10 HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS THE CIT( A)] DATED 14.01.2013. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF AP PEAL: GROUND NO. 1: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HON'BLE CIT (A) ERRED IN NOT ADMITTING THE ADDITIONAL GROUND RAISED BY THE A PPELLANT. GROUND NO. 2: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HON'BLE CIT (A) ERRED IN REJECTING THE APPELLANT'S PLEA THAT THE ALV OF THE VACANT FLATS AT CENTRAL GARDEN COMPLEX SHOULD BE TAKEN AT RS. NIL. THE APPELLANT P RAYS THAT THE ALV OF THE SAID PROPERTY MAY BE TAKEN AT RS.NIL. GROUND NO. 3: WITHOUT PREJUDICE TO GROUND NO. 2, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT (A) ERRED IN CONFIRMING THE AC TION OF THE AO IN ASSESSING THE ALV OF VACANT RESIDENTIAL FLATS AT CENTRAL GARDEN C OMPLEX BUILDING AT ITA NO.2710/M/2013 HARSH JAIN 2 RS.1,71,94,824/- AND IN ASSESSING INCOME AT RS. 1,2 0,36,377/- UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'. THE APPELLANT PRAYS T HAT THE SAID ADDITION IS UNJUSTIFIED AND MAY PLEASE BE DELETED. GROUND NO. 4: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HON'BLE CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO OF RS. 2,46,69,000/-, AS INVESTMENT IN PAWNA LAND NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNT, U/S. 69B OF THE INCOME TAX ACT, 1961. THE APPELLANT PRAY S THAT THE SAID ADDITION IS UNJUSTIFIED AND REQUIRES TO BE DELETED. THE APPELLANT CRAVES TO ADD, ALTER, AMEND OR OMIT A NY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE HEARING OF THE APPEAL. GROUND NO.1 2. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS STATED AT BAR THAT AS PER THE INSTRUCTIONS OF HIS CLIENT HE DOES NOT PRESS GROUND NO.1 OF THE APPEAL. THE GROUND NO.1 IS THEREFORE DISMISSED BEING NOT PRESSE D. GROUND NO.2 & 3 3. GROUND NOS.2 & 3 ARE RELATING TO THE ESTIMATION OF ANNUAL LETTING VALUE (ALV) OF THE VACANT FLATS AT CENTRAL GARDEN COMPLEX . THE ASSESSEE HAS CLAIMED THAT THE VALUE OF THE SAME BE TAKEN AS RS.N IL. WHEREAS THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO IN ASSESSING THE ALV OF THE SAID FLATS AT RS. RS.1,71,94,824/- AND THEREAFTER ASSESSMENT OF THE I NCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AT RS. 1,20,36,377/-. THE ASSESSEE BEING THE OWNER OF 20 VACANT FLATS AS DETAILED IN THE ASSESSM ENT ORDER HAD OFFERED ANNUAL LETTING VALUE OF FLATS AS PER MUNICIPAL RATEABLE VA LUE AT RS. 96667/-. THE AO, HOWEVER, DETERMINED THE SAME AS PER HIS ESTIMATION OF THE MARKET VALUE AT RS.1,71,94,824/-. THE LD. CIT(A) CONFIRMED THE FIN DING OF THE AO. 4. AT THE OUTSET THE LD. AR OF THE ASSESSEE HAS STA TED THAT THE FACTS OF THIS CASE ON THE ISSUE UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE CASE OF FATHER OF THE ASSESSEE SH. ANAND JAIN IN ITA NO.270 9/M/2013 FOR A.Y. 2009- ITA NO.2710/M/2013 HARSH JAIN 3 10 DECIDED VIDE COMMON ORDER DATED 17.04.2015. WE HAVE GONE THROUGH THE ORDER (SUPRA). THE ISSUE IN THE SAID CASE WAS RELAT ING TO ANOTHER 20 VACANT FLATS IN THE SAME COMPLEX NAMELY CENTRAL GARDEN COMPLEX BUILDING. THE TRIBUNAL WHILE CONSIDERING THE IDENTICAL ISSUE HAS MADE THE FOLLOWING OBSERVATIONS: 12. THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THA T IT WAS NOT A CASE WHERE THE FLATS WERE ACTUALLY LET OUT AND THEREFORE THERE WAS NOT ANY SUSPICION, DOUBT OR DISPUTE AS TO THE RATE OF RENT WHICH MIGHT HAVE BEE N ACTUALLY RECEIVED BY THE ASSESSEE. HE HAS CONTENDED THAT IN THIS CASE, THE FLATS WERE ADMITTEDLY VACANT AND THEREFORE THE DEEMED ALV WAS RIGHTLY OFFERED AS PER THE MUNICIPAL RATEABLE VALUE. HE HAS RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI ANIL KASHIPRASAD MURARKA VS. ACIT ITA NO.5 514/M/2012 DECIDED ON 17.12.2014. WE HAVE GONE THROUGH THE SAID DECISION . THE RELEVANT FINDING OF THE TRIBUNAL HAS BEEN GIVEN IN PARA 5 OF THE SAID ORDER , WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THA T THE ISSUE IS COVERED BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. S MITABEN N. AMBANI VS. CWT, REPORTED IN (2010) 323 ITR 104 (BORN), WHEREIN IT WAS HELD T HAT THE BASIS ON WHICH A SELF-OCCUPIED PROPERTY IS VALUED UNDER RULE 1BB OF THE WEALTH-TAX RULES AND MUNICIPAL RATABLE VALUE IS ARRIVED AT UNDER THE MUNICIPAL LAW IS THE SAME I.E. 'A REASONABLE AMOUNT OF RENT THAT CAN BE EXPECTED BY THE OWNER FROM A HYPOTHETICAL TENANT'. THAT WHILE ARRIVING AT SUCH REASONABLE AMOUNT OF RENT THAT CAN BE EXPECTED BY THE OWNER FR OM A HYPOTHETICAL TENANT, THE AMOUNT OF STATUTORY DEDUCTION, IF ANY, PERMISSIBLE UNDER THE LOCAL MUNICIPAL LAW MUST BE ADDED TO THE RATABLE VALUE. THUS, THE HON'BLE HIGH COURT HELD TH AT WHILE APPLYING THE PROVISIONS OF RULE 1BB FOR VALUING THE SELF-OCCUPIED PROPERTY, MUNICIP AL RATEABLE VALUE WITH ADDITION OF STATUTORY DEDUCTIONS, IF ANY, MAY BE ADOPTED INSTEA D OF STANDARD RENT, FOR ARRIVING AT THE GROSS MAINTAINABLE RENT. RESPECTFULLY FOLLOWING THE ORDER OF JURISDICTIONAL HIGH COURT, MATTER IS RESTORED BACK TO THE FILE OF AO WITH A DI RECTION TO RE-COMPUTE THE ALV IN TERMS OF ABOVE DECISION OF HON'BLE BOMBAY HIGH COURT. 13. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE ABOVE DECISION OF THE TRIBUNAL AND RESPECTFULLY FOLLOWING THE SAME, IT IS ACCORDINGLY DIRECTED THAT THE ALV ITA NO.2710/M/2013 HARSH JAIN 4 BE COMPUTED AS PER THE MUNICIPAL RATEABLE VALUE AS DEEMED INCOME FROM HOUSE PROPERTY. GROUND NOS.2, 3 & 4ARE DECIDED ACCORDING LY. 5. THE FACTS OF THE CASE IN HAND ARE SQUARELY COVER ED BY THE ABOVE DECISION OF THE TRIBUNAL. WE ACCORDINGLY DIRECT THAT THE AL V BE COMPUTED AS PER THE MUNICIPAL RATEABLE VALUE AS DEEMED INCOME FROM HOUS E PROPERTY. GROUND NO.4: 6. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE ACTION WAS CARRIED OUT ON 05.03.2009 IN THE CASE OF THE JAI CO RP. GROUP, ITS EMPLOYEES AND CLOSE ASSOCIATES. DURING THE SEARCH VARIOUS DOCUME NTS RELATING TO PURCHASE OF LAND BY THE GROUP CONCERNS OF JAI CORPORATIONS WERE SEIZED. IN THE DOCUMENTS RELATING TO VARIOUS INDIVIDUALS ASSOCIATED WITH JAI CORPORATIONS INCLUDING THE ASSESSEE, IT WAS FOUND THAT THE TOTAL CONSIDERATION /COST OF LAND WAS BIFURCATED IN PART A & PART B. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS T HE AO), FROM THE PERUSAL OF THE SAID DOCUMENTS OBSERVED THA T THE PART A WAS THE CONSIDERATION WHICH WAS PAID AS PER THE STAMP DUTY VALUE OF THE LAND AND WHEREAS THE PART B PAYMENTS DENOTE UNACCOUNTED CASH PAYMENT/ON MONEY PAYMENTS MADE IN RESPECT OF THE SAID LAND DEALS. I N THE CASE OF THE ASSESSEE, THE AO HELD THAT THE ASSESSEE HAD MADE UNACCOUNTED PAYMENTS IN CASH OF RS. 2,46,69,000/- THE ASSESSEE CONTENDED THAT THE PART B PAYMENTS WERE NOT IN RELATION TO THE PURCHASE OF THE LAND BUT THE SAME D ENOTE THE BALANCE TOWARDS CONSIDERATION PAYABLE FOR GETTING NECESSARY APPROVA LS FOR CONVERTING THE LAND FROM AGRICULTURAL TO NON-AGRICULTURE, WHICH WAS SUB JECT TO THE ABOVE STATED WORKS DONE AND THAT THE CHEQUES OF RS. 230 LAKHS GI VEN FOR THE SAID PURPOSE ON BEHALF OF THE ASSESSEE TO THE BROKERS/VENDORS OF TH E LAND WERE NEVER ENCHASED BY THEM SINCE THEY HAVE FAILED TO DO THE PROMISED A CT. HOWEVER THE AO REJECTED THE ABOVE CONTENTION OF THE ASSESSEE AND M ADE THE ADDITION OF THE SAID ITA NO.2710/M/2013 HARSH JAIN 5 AMOUNT INTO THE INCOME OF THE ASSESSEE UNDER SECTIO N 69B OF THE ACT. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED APPEAL BEFORE THE LD. CIT(A). 7. THE LD. CIT(A) ALSO DID NOT AGREE WITH THE CONTE NTIONS/EXPLANATIONS GIVEN BY THE ASSESSEE IN RELATION TO THE FIGURES ME NTIONED IN PART B OF THE IMPOUNDED DOCUMENTS. HE THEREFORE UPHELD THE ADDIT IONS MADE BY THE AO IN THIS RESPECT. AGGRIEVED BY THE ORDER OF THE LD. CI T(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. R EPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORD. THE LD. A.R. OF THE ASSESSEE, BEFORE US, HAS SUBMITTED THAT EXCEPT THE SEIZED DOCUMENT, THE CONTENTS OF WHICH HAVE BEEN DULY EXPLAINED BY THE A SSESSEE, NO OTHER EVIDENCE OF ANY KIND WAS FOUND OR SEIZED WHICH WOULD INDICAT E THAT THE ASSESSEE HAD INCURRED THE COST OF LAND IN CASH AS ALLEGED BY THE REVENUE. HE HAS FURTHER CONTENDED THAT EVEN THE EMAIL RELIED UPON BY THE RE VENUE ITSELF DOESNT SUPPORT THE CASE OF THE REVENUE WHEN IT IS CONSIDERED AND R EAD WITH OTHER DOCUMENTS RELIED UPON BY THE REVENUE ITSELF. THE ALLEGATIONS LEVELED BY THE REVENUE REGARDING THE PAYMENT OF ON MONEY HAVE NOT BEEN COR ROBORATED WITH ANY RELIABLE OR CONVINCING EVIDENCE. HE HAS FURTHER SUB MITTED THAT NONE OF THE SELLERS HAVE BEEN EXAMINED IN THE MATTER TO ASCERTA IN WHETHER ANY AMOUNT HAS BEEN PAID TO THEM IN CASH IN SPITE OF THE FACT THAT THE ASSESSEE HAD SPECIFICALLY ASKED THE AO TO EXAMINE THE SELLERS IF REQUIRED. T HE AO HAS ALSO NOT EXAMINED THE DIRECTORS OF DURVISH AGRI REALTORS, ON E OF THE GROUP COMPANIES OF JAI CORP. GROUP WHICH IS CLOSELY RELATED TO THE ASSESSEE. THE AO STRAIGHTAWAY REJECTED THE CONTENTION OF THE ASSESSE E THAT THE CHEQUES PAID BY ITA NO.2710/M/2013 HARSH JAIN 6 THE SAID COMPANY ON BEHALF OF THE ASSESSEE WERE NEV ER ENCASHED BY THE VENDORS OF THE LAND BUT WERE RETURNED BACK TO THE A SSESSEE/ DURVISH AGRI REALTORS ON THE FAILURE OF THE VENDORS TO GET CONVE RT THE LAND FROM AGRICULTURE CATEGORY TO NON AGRICULTURE NATURE. HE HAS FURTHER RELIED UPON THE DECISION OF THE ITAT IN THE CASE OF AVKASH LAND REALITY PVT. L TD. & OTHERS WHEREIN UNDER THE SIMILAR CIRCUMSTANCES, THE ADDITIONS MADE BY THE REVENUE AUTHORITIES HAVE BEEN DELETED BY THE TRIBUNAL. HE HAS FURTHER RELIED UPON ANOTHER DECISION OF THE TRIBUNAL IN THE CASE OF JA I CORP. LTD. DATED 26.11.2014 TO STRESS THAT THE CONSIDERATION FOR THE PURCHASE OF THE LAND WAS MORE THAN THE RATES OF READY RECKNOR OF STAMP DUTY AUTHORITIES, ALL THE PAYMENTS WERE MADE THROUGH CHEQUE, AND IN THE ABSEN CE OF ANY EVIDENCE THAT ANY PAYMENT WAS MADE IN CASH OR UNACCOUNTED MONEY H AS EXCHANGED HANDS, THE ADDITIONS COULD NOT BE MADE. THE LD. AR HAS FUR THER STRONGLY RELIED UPON THE CASE OF HIS FATHER SH. ANAND JAIN, ITA NOS.270 7, 2708 & 2709/M/2013 VIDE ORDER DATED 17.04.2015, WHEREIN THE TRIBUNAL I N ALMOST SIMILAR FACTS AND CIRCUMSTANCES HAS DELETED THE ADDITIONS MADE BY THE AO. HE HAS FURTHER CONTENDED THAT THE ENTIRE ADDITION HAS BEEN MADE ME RELY ON THE BASIS OF SUSPICION WHICH WAS BASED ON THE STRENGTH OF LOOSE PAPERS FOUND DURING THE SEARCH ACTION, WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW. THE LD. D.R. ON THE OTHER HAS RELIED UPON THE FINDI NGS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE LOOSE PAPERS FOU ND DURING THE SEARCH ACTION WERE SELF EXPLANATORY PROVING THAT THE PART B PAYME NT WAS MADE IN CASH ON ACCOUNT OF PURCHASE OF LANDS. HE HAS STRONGLY RELI ED UPON THE LOOSE PAPER SHEET THE CONTENTS OF WHICH HAVE BEEN DISCUSSED IN PARA 4.2.1 OF THE ASSESMENT ORDER AND FURTHER UPON THE CONTENTS OF E MAIL DISCU SSED BY THE AO IN PARA 4.6.2 OF HIS ORDER. ITA NO.2710/M/2013 HARSH JAIN 7 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE ASSESSEE. WE FIND THAT IN ALMOST IDENTICAL FACTS AND CIRCUMSTANCES, THE TRIBUNAL IN THE CASE OF FATH ER OF THE ASSESSEE SH. ANAND JAIN, (SUPRA), WHILE CONSIDERING AND RELYING UPON T HE OTHER DECISIONS RENDERED BY THE TRIBUNAL IN THE CASES OF THE GROUP COMPANIES OF JAI CORP. GROUP., HAS HELD THAT THE ADDITIONS WERE NOT WARRANTED, UNDER T HE FACTS AND CIRCUMSTANCES, U/S 69B OF THE ACT. THE RELEVANT PART OF THE OBSERV ATIONS MADE BY THE TRIBUNAL IN THE CASE OF ANAND JAIN ARE REPRODUCED AS UNDER: WE FIND THAT IN THE CASE OF M/S. AVKASH LAND REAL TY PVT. LTD. AND OTHERS VS. DCIT AND OTHERS ITA NOS. 8327M/2011AND OTHERS, THE TRIB UNAL, WHILE DEALING WITH THE IDENTICAL ISSUE WHILE ADJUDICATING 67 APPEALS OF 52 DIFFERENT ASSESSEES IN RELATION TO ADDITIONS MADE UNDER SECTION 69B IN THE CASE OF JAI CORP. GROUP COMPANIES ON ACCOUNT OF ON MONEY CASH PAYMENTS FOR PURCHASE OF L AND, HAS MADE THE FOLLOWING OBSERVATION: 22. .THE ENTIRE DISPUTE REVOLVES AROUND THE ALLE GED CASH PAYMENT AMOUNTING TO RS. 43 CRORES APPROX. AND WHICH HAS BEEN ADDED U /S. 69C OF THE ACT. SEC. 69C OF THE ACT READS AS UNDER: WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SU CH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY B E, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 23. A PERUSAL OF THE AFOREMENTIONED SECTION SHOWS T HAT THE REQUIREMENT OF THE SECTION IS THAT AN EXPENDITURE HAS BEEN FOUND TO HAVE BEEN INCURRED BY AN ASSESSEE IN ANY FINANCIAL YEAR. CONSEQUENTLY, THE ASSESSEE FAILS TO INDICATE SATI SFACTORILY THE SOURCE OF SUCH EXPENDITURE OR ANY PART THEREOF. TH EN SECTION 69C IS ATTRACTED IN SUCH CIRCUMSTANCES. THE EMPHASIS IS ON THE FACT THA T AN ASSESSEE HAS INCURRED ANY EXPENDITURE. THIS ITSELF SHOW THAT THE ASSESSEE MUST HAVE BEEN F OUND TO HAVE INCURRED ANY EXPENDITURE TO INVOKE THE PROVISIONS O F SEC. 69C OF THE ACT. EVEN IF FOR THE SAKE OF ARGUMENTS, THE RETRACTION OF SHRI DILIP DHERAI IS IGNORED, IN HIS REPLY TO ITA NO.2710/M/2013 HARSH JAIN 8 QUESTION NO. 24 ON THE DATE OF SEARCH, SHRI DILIP D HERAI HAS CATEGORICALLY MENTIONED THAT CASH PAYMENT FROM MAKERS IS AT RS. 28.01 CRORES AND CASH PAYMENT FROM JAI TOWERS IS AT RS. 10.43 CRORES, TOTAL OF TH ESE AMOUNTS WORKS OUT AT RS. 38.45 CRORES WHICH WAS PROVIDED TO SHRI DILIP DHERAI BY ONE SHRI SANJAY PUNKHIA CEO OF SEZ PROJECT. SHRI DILIP DHERAI IS NOT EVEN REMO TELY RELATED TO THE ASSESSEE COMPANY .IT IS ALSO NOT THE CASE OF THE REVENUE THA T DILIP DHERAI WAS ACTING AS AGENT OF THE ASSESSEE COMPANY. MERELY ON THE STRENGTH OF THIS ADMISSION, IT CANNOT BE SAID THAT THE ASSESSEE HAS INCURRED CERTAIN EXPENDITURE OVER AND ABOVE WHAT HAS BEEN RECORDED IN ITS BOOKS OF ACCOUNT. WE FIND THAT THE ULTIMATE CONCLUSIONS DRAWN BY THE AO AND THE LD. CIT(A) HAVE BEEN REACHED MERELY ON T HE ENTRIES FOUND ON LOOSE SHEET OF PAPERS FOR WHICH SHRI DILIP DHERAI HAS ST ATED THAT THEY ARE ONLY ESTIMATS / BUDGETARY FIGURES. HOWEVER, THE ALLEGATIONS MADE B Y THE LOWER AUTHORITIES ARE NOT SUPPORTED BY ACTUAL CASH PASSING HANDS. THE ENTIRE ADDITIONS ARE BASED ON THE SEIZED DOCUMENTS AND NO OTHER MATERIAL HAS BEEN ADV ERTED TO AND WHICH COULD CONCLUSIVELY SHOW THAT THE HUGE AMOUNT OF THE MAGNI TUDE MENTIONED IN THE SEIZED DOCUMENTS TRAVELLED FROM, ONE SIDE TO THE OTHER. T HE REVENUE AUTHORITIES HAVE NOT BROUGHT A SINGLE STATEMENT ON RECORD OF THE VENDORS OF LAND IN DIFFERENT VILLAGES. NONE OF THE SELLER HAS BEEN EXAMINED TO SUBSTANTIAT E THE CLAIM OF THE REVENUE THAT EXTRA CASH HAS ACTUALLY CHANGED HANDS. 24. OUR VIEW IS FORTIFIED BY THE DECISION OF THE D ELHI HIGH COURT IN THE CASE OF MALIK BROTHERS PVT. LTD. VS CIT 162 TAXMANN 43 WHICH IS RELIED UPON BY THE LD. DR. I N THAT CASE, THE ASSESSEE PURCHASED THE PROPERTY AL LEGEDLY FOR RS. 6 LAKHS. THE VENDOR IN HER STATEMENT CONFIRMED THAT THE SALE CON SIDERATION OF SAID PROPERTY WAS RS. 45 LAKHS AND PAID TAX THEREON. IN VIEW OF VEND ORS STATEMENT, THE AO MADE AN ADDITION OF RS. 39 LAKHS TO THE INCOME OF THE ASSES SEE TOWARDS UNEXPLAINED INVESTMENT. THE ACTION OF THE AO WAS JUSTIFIED AND THE ADDITIONS WERE CONFIRMED. THUS IN VIEW OF THE AFORESAID DECISION, IN THE PRE SENT CASE, NONE OF THE SELLERS HAVE BEEN EXAMINED BY THE AO TO STRENGTHEN HIS VIEWS TH AT CASH HAS BEEN PAID OVER AND ABOVE THE REGISTERED AMOUNT. THERE IS NOT EVEN A S INGLE DOCUMENT/EVIDENCE OF PARTIES INVOLVED IN THE SALE OF LAND AT DIFFERENT V ILLAGES BROUGHT ON RECORD TO SHOW THAT AN AMOUNT OTHER THAN THE PAYMENT OF CONSIDERAT ION HAS EXCHANGED HANDS. NO CONFESSION FROM THE SELLERS HAVE BEEN BROUGHT ON RE CORD. THE ENTIRE ADDITIONS HAVE BEEN MADE MERELY ON THE STRENGTH OF LOOSE PAPERS FO UND DURING THE COURSE OF THE SEARCH NOT SUPPORTED BY ANY INDEPENDENT AUTHORITY. CONSIDERING THE ENTIRE ADDITION, IN THE LIGHT OF THE PROVISIONS OF SEC. 69C, AS PER A.OS OWN INTERPRETATION, INVESTMENTS IN PURCHASE OF LAND HAVE BEEN FULLY FIN ANCED BY SOME OTHER PERSONS, THEREFORE, THE ADDITION IN THE HANDS OF THE ASSESSE E CANNOT BE JUSTIFIED AS THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE. THERE M AY BE ONE MORE POSSIBILITY THAT THE PERSONS WHO WERE DOING LAND PURCHASE MIGHT HAVE INFLATED THE SALE PRICE IN THESE LOOSE SHEETS JUST TO EXTRACT MONIES FROM THEIR HIGH ER AUTHORITIES IN THE GUISE OF ON- ITA NO.2710/M/2013 HARSH JAIN 9 MONEY TO BE PAID TO THE VENDORS. MAY BE BECAUSE OF HIS POSSIBILITY NO DOCUMENTS WERE FOUND TO SHOW THAT THE MONEY ACTUALLY CHANGED HANDS. 25. A PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE SHOW THAT THE AUTHORIZED, ISSUED AND SUBSCRIBED PAID UP CAPITAL IS AT RS. ONE LAKH AND THE ASSESSEE HAD NOT DONE ANY BUSINESS DURING THE YEAR UNDER CONSIDERATI ON. WITH SUCH A SMALL CORPUS AND NO BUSINESS ACTIVITY, NOR ANY HAS BEEN BROUGHT ON RECORD BY THE REVENUE, IT IS NOT ACCEPTABLE THAT THE COMPANY MAY HAVE INCURRED S UCH HUGE EXPENDITURE OUTSIDE ITS BOOKS OF ACCOUNT. FURTHER IN HIS ENTIRE ASSESS MENT ORDER, THE AO HIMSELF HAS POINTED OUT TIME AND AGAIN DIFFERENT PERSONS, WHO A RE ALLEGED, TO HAVE MADE CASH PAYMENTS. EVEN ON THAT COUNT, THE ADDITIONS CANNOT BE SUSTAINED IN THE HANDS OF THE ASSESSEE. IN OUR CONSIDERATE VIEW, THERE BEING NO EVIDENCE TO SUPPORT THE REVENUES CASE THAT A HUGE FIGURE, WHATEVER BE ITS QUANTUM , OVER AND ABOVE THE FIGURE BOOKED IN THE RECORDS AND ACCOUNTS CHANGED HANDS BETWEEN T HE PARTIES, NO ADDITION COULD THEREFORE BE MADE U/S. 69C OF THE ACT TO THE INCOME OF THE ASSESSEE. CONSIDERING THE ENTIRE FACTS BROUGHT ON RECORD, WE HAVE NO HESITATI ON TO HOLD THAT EVEN ON MERITS, NO ADDITION COULD BE SUSTAINED. 26. SINCE WE HAVE ALLOWED THE ISSUE IN THE CASE OF THE PRESENT ASSESSEE ON BOTH COUNTS I.E. ON LEGAL ISSUE AND ON MERIT AND THE ISS UES INVOLVED IN ALL OTHER APPEALS OF OTHER ASSESSEES ARE SIMILAR AND IDENTICAL, THOUGH Q UANTUM MAY DIFFER, FOR SIMILAR REASONS, WE QUASH THE ASSESSMENTS AND DELETE THE AD DITIONS ON MERIT AS WELL AS ON POINT OF LAW IN ALL OTHER CASES ALSO. 7. A PERUSAL OF THE ABOVE FINDINGS OF THE TRIBUNAL IN THE CASE OF RELATED CONCERNS OF THE ASSESSEES INVOLVING IDENTICAL FACTS AND ISSUES REVEALS THAT THE TRIBUNAL HAS GIVEN A CATEGORICAL FINDING THAT THE R EQUIREMENT OF SECTION 69C IS THAT AN EXPENDITURE HAS BEEN FOUND TO HAVE BEEN INCURRED BY AN ASSESSEE IN ANY FINANCIAL YEAR FOR WHICH HE GIVES NO EXPLANATION ABOUT THE SO URCE THEREOF, THEN THE ADDITION CAN BE MADE UNDER SECTION 69C IN SUCH CIRCUMSTANCES . THE TRIBUNAL HAS OBSERVED THAT THE REQUIREMENT OF THE SECTION IS THAT THE ASS ESSEE MUST HAVE BEEN FOUND TO HAVE INCURRED ANY EXPENDITURE TO INVOKE THE PROVISIONS O F SECTION 69C OF THE ACT. THE CONCLUSIONS DRAWN BY THE AO AND THE LD. CIT(A) WERE BASED ON THE ENTRIES FOUND ON LOOSE SHEET OF PAPERS FOR WHICH IT WAS EXPLAINED BY THE ASSESSEE/CONCERNED PERSONS THAT THEY WERE ONLY ESTIMATES/BUDGETARY FIGURES. T HE ALLEGATIONS MADE BY THE LOWER AUTHORITIES WERE NOT SUPPORTED BY ANY EVIDENCE OF A CTUAL CASH PASSING HANDS. THE REVENUE AUTHORITIES HAD NOT BROUGHT A SINGLE STATEM ENT ON RECORD OF THE VENDORS OF THE LAND IN DIFFERENT VILLAGES. NONE OF THE SELLER S HAD BEEN EXAMINED TO SUBSTANTIATE THE CLAIM OF THE REVENUE THAT THE EXTRA CASH HAD AC TUALLY CHANGED HANDS. THE TRIBUNAL, AFTER CONSIDERING THE EVIDENCES IN RELATI ON TO THE ADDITIONS IN THE LIGHT OF ITA NO.2710/M/2013 HARSH JAIN 10 PROVISIONS OF SECTION 69C OF THE ACT, HAS HELD THAT NO ADDITIONS WERE WARRANTED UNDER SECTION 69C OF THE ACT IN THE HANDS OF THE AS SESSEE. WE FIND THAT IN THE CASE OF THE ASSESSEE, THE ADDIT IONS HAVE BEEN MADE BY THE LOWER AUTHORITIES UNDER SECTION 69B OF THE ACT WHICH PROV IDES THAT WHERE THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND THE AO FINDS THAT THE AMOUNT E XPENDED ON MAKING OF SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY THE ASS ESSEE IS NOT SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR THAT RELEVANT YEAR. SO, THE FIRST REQUIREMENT FOR THE INVOCATION OF PROVISIONS OF SECTION 69B OF THE ACT IS THAT THE AMOUNT MUST BE EXPENDED BY THE ASSE SSEE AND WHICH IS FOUND IN EXCESS THAN THAT IS RECORDED IN THE BOOKS OF THE ACCOUNT A ND THE ASSESSEE DOES NOT GIVE ANY EXPLANATION ABOUT SUCH EXCESS AMOUNT. IN THE CASE IN HAND, EXCEPT THE LOOSE PAPERS AS DISCUSSED ABOVE, NO EVIDENCE WAS FOUND THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON THE PURCHASE OF LAND MORE THAN THAT WAS RECORDED IN THE BOOKS OF ACCOUNT. THE LD. A.R. OF THE ASSESSEE HAS VEHEMENT LY CONTENDED THAT THE CONSIDERATION RECORDED IN THE SALE AGREEMENTS WAS M UCH MORE THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES. THERE WAS N O EVIDENCE THAT ANY EXTRA CASH OTHER THAN THE SALE CONSIDERATION AS RECORDED IN TH E DEED HAD CHANGED HANDS. NO STATEMENT OF THE SELLERS OF THE LAND HAD BEEN RECOR DED. NO OTHER CORROBORATIVE EVIDENCE HAS BEEN PRODUCED ON THE FILE BY THE REVEN UE AUTHORITIES TO SUBSTANTIATE THEIR ALLEGATION. THE ADDITION IN THIS CASE HAS BE EN MADE ON THE BASIS OF THE ENTRIES IN THE LOOSE PAPER FOUND DURING THE SEARCH ACTION, WHICH AT THE MOST CAN BE CONSIDERED TO HAVE RAISED A SUSPICION ABOUT THE TRA NSFER OF MONEY OTHER THAN THE SALE CONSIDERATION, BUT THE SUSPICION ITSELF AND SOLELY CANNOT BE HELD TO BE A JUSTIFIABLE GROUND FOR MAKING THE ADDITIONS, ESPECIALLY IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. EXCEPT THE LOOSE PAPERS IN QUESTION NO E VIDENCE, WHAT TO SAY OF ANY DIRECT OR CORROBORATIVE EVIDENCE, EVEN NO CIRCUMSTANTIAL E VIDENCE HAS BEEN DETECTED OR BROUGHT ON RECORD BY THE REVENUE. HENCE, THE ADDIT IONS SOLELY ON THE BASIS OF SUSPICION, HOW STRONG IT MAY BE, IN OUR VIEW, ARE N OT SUSTAINABLE IN THE EYES OF LAW. MOREOVER, THE FACTS OF THE PRESENT CASE ARE IDENTIC AL TO THAT OF THE OTHER GROUP CONCERNS AND IN VIEW OF THE DECISION OF THE TRIBUNA L DATED 22.03.2013 (SUPRA) THE ADDITIONS IN THIS CASE UNDER SECTION 69B OF THE ACT ARE NOT WARRANTED AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. THIS APPEAL OF THE ASSESSEE IS ACCORDINGLY PARTLY ALLOWED. 10. THE FACTS ARE IDENTICAL IN THE CASE IN HAND ALSO. IN THIS CASE ALSO EXCEPT THE LOOSE PAPER RELIED UPON BY THE AO, NO EVIDENCE WAS FOUND THAT THE ASSESSEE ITA NO.2710/M/2013 HARSH JAIN 11 HAD INCURRED EXPENDITURE ON THE PURCHASE OF LAND MO RE THAN THAT WAS RECORDED IN THE BOOKS OF ACCOUNT. IN THIS CASE ALSO THE REVE NUE HAS NOT DENIED THE CONTENTION OF THE ASSESSEE THAT THE CONSIDERATION R ECORDED IN THE SALE AGREEMENTS WAS MUCH MORE THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES. THERE WAS NO EVIDENCE THAT ANY EXTRA CASH OTHER THAN THE SALE CONSIDERATION AS RECORDED IN THE DEED HAD CHANGED H ANDS. NO STATEMENT OF THE VENDORS OF THE LAND HAD BEEN RECORDED. NO OTHER CO RROBORATIVE EVIDENCE HAS BEEN PRODUCED ON THE FILE BY THE REVENUE AUTHORITIE S TO SUBSTANTIATE THEIR ALLEGATION. WE FURTHER NOTE THAT THE AO WHILE MAKIN G THE ADDITIONS VIDE HIS ASSESSMENT ORDER HAS CONCLUDED AS UNDER: 4.7 THE DISCUSSION MADE SO FAR, VARIOUS INCRIMINAT ING EVIDENCE, AND PREPONDERANCE OF PROBABILITY FURTHER CLEARLY ESTABL ISH THAT- THE NOTINGS ON PAGE NO.36 OF ANNEXURE A-6 RELATES T O THE LAND TRANSACTION STATED BY MR. VIRENDRA JAIN CONCLUDED IN THE NAME O F MR. HARSH JAIN. THE WRITER OF THIS PAGE MR. SUBODH AGARWAL WAS MISL EADING IN HIS STATEMENT WHEN HE STATED THAT HE HAD NEGOTIATED THIS DEAL IN HIS OWN NAME. TOTAL CASH PAYMENT INVOLVED IN THE ABOVE SAID LAND TRANSACTION WAS APPROX. RS.250 LAKH OUT OF WHICH RS.230 LAKH WAS PAID BEFOR E 08-06-2008(DATE OF E- MAIL). THIS E-MAIL FURTHER ESTABLISH THAT THE ASSESSEE GRO UP USES THE CONNOTATION OF PART B FOR CASH PAYMENTS. 11. THE LD. DR HAS STRONGLY RELIED UPON THE LOOSE P APER SHEET THE CONTENTS OF WHICH HAVE BEEN DISCUSSED IN PARA 4.2.1 OF THE A SSESMENT ORDER AND FURTHER UPON THE CONTENTS OF E-MAIL DISCUSSED BY THE AO IN PARA 4.6.2 OF HIS ORDER. WE FIND THAT THE ABOVE DOCUMENTS CAN NOT IN ANY MANNER BE CONSIDERED AS CONCLUSIVE EVIDENCE TO JUSTIFY THE IMPUGNED ADDITIO NS. THE SAID E-MAIL IS ALLEGEDLY OF DATED 8.6.2008 WHEREAS THE LOOSE PAPER RELIED UPON BY THE AO IS STATED TO BE OF 14.6.2008. HOWEVER DESPITE SO CLOSE PROXIMITY OF THE DATES OF THE DOCUMENTS, THERE ARE LOTS OF CONTRADICTIONS IN RELATIONS TO THE THEIR CONTENTS. THE AGREEMENT IN RELATION TO PURCHASE OF LAND HAS B EEN ENTERED INTO ON 25.2.2009. IN THE E-MAIL DATED 8.6.2008, IT HAS BEE N STATED THAT PART A ITA NO.2710/M/2013 HARSH JAIN 12 PAYMENT IS TO BE PAID WHEREAS THE PART B HAS BE EN STATED TO BE ALREADY PAID. THE DATES OF PAYMENTS HAVE BEEN MENTIONED TO BE 4 TH JULY, 7 TH JULY & 17 TH JULY IN CASE OF JITUBHAI AND 22 JULY AND 23 JULY IN CASE OF FIROZA. IF AS PER THE DOCUMENT DATED 8.6.2008, THE ALLEGED PAYMENT HAS AL READY BEEN MADE IN THE MONTH OF JULY, THEN IT MUST PERTAIN TO JULY MONTH O F ANY PREVIOUS YEAR, MAY BE JULY 2007 OR JULY 2006 OR ANY OTHER PREVIOUS YEAR, BUT IN NO CASE IT CAN RELATE TO FUTURE DATE I.E. JULY 2008. BUT THIS IS NOT THE CASE OF THE REVENUE. THE CASE OF THE REVENUE IS THAT THE UNACCOUNTED CASH HAS BEEN P AID IN THE AY 2008-09. THE ABOVE DATES WRITTEN IN THE EMAIL BELIE THE ENTIRE C ASE OF THE REVENUE. UNDER THE CIRCUMSTANCES EVEN IF WE CONSIDER THE ABOVE EMAIL, THE ADDITIONS CAN NOT BE MADE IN THE AY 2009-10. MORE OVER THERE IS NO MATCH ING OF THE FIGURES WRITTEN ON THE EMAIL WITH THAT OF LOOSE PAPER. THE CASE OF THE AO IS THAT THE FIGURES ARE APPROXIMATE. IN OUR VIEW, WHEN A DEAL IS STRUCK, TH E FIGURES ARE NOT GENERALLY WRITTEN IN APPROXIMATE. EVEN IF WRITTEN ON APPROXIM ATE BASIS, THESE SHOULD MATCH WITH EACH OF THE DOCUMENT I.E. FIGURES OF AGR EEMENT, LOOSE PAPER AND THAT OF EMAIL. WE FURTHER FIND THAT NO DATES HAVE B EEN MENTIONED IN THE LOOSE PAPER. THE SAID LOOSE PAPER HAS NOT BEEN FOUND FROM THE POSSESSION OF THE ASSSESSEE BUT FROM AN EMPLOYEE OF JAI GROUP COMPANY . THE DOCUMENT IS NEITHER IN THE HAND WRITING OF THE ASSESSEE NOR IS SIGNED BY THE ASSESSEE. EVEN THERE ARE NO SIGNATURES OF THE ALLEGED RECIPIENT OF THE CASH AMOUNT. NONE OF THE ALLEGED RECIPIENT HAS BEEN EXAMINED BY THE AO. EVEN THE AO DID NOT EXAMINE THE DIRECTORS OF DURVISH AGRI REALTORS. THE AO STRA IGHTAWAY REJECTED THE CONTENTION OF THE ASSESSEE THAT THE CHEQUES PAID BY THE SAID COMPANY ON BEHALF OF THE ASSESSEE WERE NEVER ENCASHED BY THE VENDORS OF THE LAND BUT WERE RETURNED BACK TO THE ASSESSEE/ DURVISH AGRI REALTOR S ON THE FAILURE OF THE VENDORS TO GET CONVERTED THE LAND FROM AGRICULTURE CATEGORY TO NON- AGRICULTURE NATURE. THE ADDITION IN THIS CASE ALSO HAS BEEN MAD E ONLY ON THE BASIS OF THE ITA NO.2710/M/2013 HARSH JAIN 13 ENTRIES IN THE LOOSE PAPER FOUND DURING THE SEARCH ACTION. AS HELD BY THE TRIBUNAL IN THE CASE OF ANAND JAIN (SUPRA) AND AS ALSO IN THE CASES OF ANOTHER GROUP COMPANIES (SUPRA), THAT THE SAID LOOSE PAPER AT THE MOST CAN BE CONSIDERED TO HAVE RAISED A SUSPICION ABOUT THE TRA NSFER OF MONEY OTHER THAN THE SALE CONSIDERATION, BUT THE SUSPICION ITSELF AN D SOLELY CANNOT BE HELD TO BE A JUSTIFIABLE GROUND FOR MAKING THE ADDITIONS, ESPECI ALLY IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. EXCEPT THE LOOSE PAPERS IN QUESTION NO EVIDENCE, WHAT TO SAY OF ANY DIRECT OR CORROBORATIVE EVIDENCE, EVE N NO CIRCUMSTANTIAL EVIDENCE HAS BEEN DETECTED OR BROUGHT ON RECORD BY THE REVEN UE. MORE OVER THE EXPLANATION GIVEN BY THE ASSESSEE HAS BEEN STRAIGHT AWAY REJECTED BY THE AO. HENCE, THE ADDITIONS SOLELY ON THE BASIS OF SUSPICI ON, HOW STRONG IT MAY BE, IN OUR VIEW, ARE NOT SUSTAINABLE IN THE EYES OF LAW. MOREOVER, THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THAT OF THE OTHER GRO UP CONCERNS AND IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE CASE OF ANAND JA IN (SUPRA) AND AS ALSO IN THE CASES OF OTHER GROUP COMPANIES OF JAI CORP. VIZ . M/S. AVKASH LAND REALTY PVT. LTD. AND OTHERS VS. DCIT AND OTHERS (SUPRA), THE ADDITIONS IN THIS CASE ALSO UNDER SECTION 69B OF THE ACT ARE NOT WARRANTED AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.07.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED:17 .07.2015. * PATEL, P.S. ITA NO.2710/M/2013 HARSH JAIN 14 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. 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