Shri Suryakant Dattatray Kakade, Pune V. Asst. CIT, Central Circle 2(2), Pune

ITA 313/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0859 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR HARSHAVARDHINI BUTY
• Keywords: Unexplained cash credit; Search and seizure; Loose papers; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 153A; 68

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.312 & 313/PN/2013 '% % / ASSESSMENT YEARS : 2006-07 AND 2007-08 SHRI SURYAKANT DATTATRAY KAKADE, PROP. M/S. SURYAKANT KAKADE & ASSOCIATES, 133/1B, KAKADE HOUSE, MAYUR COLONY, KOTHRUD, PUNE 411038. PAN NO.ABVPK5626L . / APPELLANT V/S ACIT, CENTRAL CIRCLE-2(2), PUNE . / RESPONDENT / ASSESSEE BY : SHRI SUNIL GANOO / DEPARTMENT BY : DR. HARSHAVARDHINI BUTY / ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER DATED 21-12-2012 OF THE CIT(A) CENTRA L, PUNE RELATING TO A.YRS. 2006-07 AND 2007-08 RESPECTIVELY. SINC E COMMON GROUNDS ARE INVOLVED IN BOTH THESE APPEALS, THEREFORE, THE SE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. / DATE OF HEARING :08.09.2015 / DATE OF PRONOUNCEMENT: 30.11.2015 2 ITA NOS.312 & 313/PN/2013 ITA NO.312/PN/2013 (A.Y. 2006-07) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS THE PROPRIETOR OF SURYANTA KAKADE AND AS SOCIATES WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION. THE ASS ESSEE FILED HIS RETURN OF INCOME ON 26-10-2006 DECLARING TOTAL INCOME AT RS.28,95,310/-. THE AO COMPLETED THE ASSESSMENT U/S.143(3 ) ON 28-11-2008 DETERMINING THE TOTAL INCOME AT RS.55,59,980/-. A SEARCH U/S.132 OF THE I.T. ACT WAS CONDUCTED IN THE CAS E OF THE ASSESSEE ON 11-02-2009. IN RESPONSE TO NOTICE U/S.153 A(A) VIDE NOTICE DATED 21-08-2009 THE ASSESSEE FILED HIS RETURN OF INCOME ON 02-08-2010 DECLARING INCOME OF RS.1,57,59,977/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT CERTAIN LOOSE PAPERS WERE SEIZED FROM THE BUSINESS PREMISES OF THE ASSESSEE DURING THE SEARCH ACTION U/S.132. AS PER PAGE 2 OF BUNDLE NO.1 CONTAINING 14 PAGES THERE WERE CERTAIN NOTING S REGARDING TRY DEVELOPERS AS UNDER : THE ASSESSEE OFFERED UNDISCLOSED PROFIT OF RS.1.02 CRORES IN THE HANDS OF M/S. SURYAKANT KAKADE AND ASSOCIATES FOR A.Y. 20 06-07 WHICH HAS BEEN ACCEPTED BY THE AO, THEREFORE, WE ARE NO T DEALING WITH THIS ISSUE. 4. SO FAR AS THE MAIN ISSUE IS CONCERNED AS PER GROUND S OF APPEAL THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS THE AO NOTED FROM THE DETAILS FURNISHED THAT THE ASSESSEE HAS CREDITED AN AMOUNT OF RS.2.30 CRORES IN HIS BOOKS AND TRY DEVELOPERS 160 LAKHS 3 ITA NOS.312 & 313/PN/2013 CLAIMED THAT THE SAME AS ADVANCE RECEIVED FOR BOOKING O F SHOPS/FLATS IN A PROPOSED SCHEME LOCATED AT KOTHRUD FROM THE FOLLOWING PERSONS : SR.NO. NAME OF SHOP/FLAT HOLDERS AMOUNT (RS.) 1 GAONKAR PANDURANG BALKRISHNA 22,00,000 2 RANE DEEPAK NARAYAN 12,00,000 3 BALASAHEB LAXMANRAO DESHMUKH 25,50,000 4 MORE VITHABAI HAIRBHAU & MORE SANGITA CHANDRASHEKHAR 7,00,000 5 MARAL GANESH ANANTRAO 15,00,000 6 KOKATE PARVATI GANPAT 10,00,000 7 BHURUK BALU HARIBHAU 17,00,000 8 SUBHASH JAYAWANTRAO PISAL 30,00,000 9 VIJAY MANIKRAO SHILIMKAR 27,00,000 10 ANIL JEEVANRAO SHIROLE 21,00,000 11 KESHAV JEEVANRAO SHIROLE 26,00,000 12 SHINDE VIRENDRA 5,00,000 13 BHAGWAT S.D. 12,50,000 TOTAL 2,30,00,000 5. HE FURTHER NOTED THAT THE ADIT (INVESTIGATION) UNIT-II , PUNE HAD CONDUCTED CERTAIN ENQUIRIES IN RESPECT OF 4 PERSONS MENTIONED A T SL.NO.3 AND 8 TO 10 OF THE ABOVE TABLE AND ON THE BASIS O F THE SAID ENQUIRIES IT WAS SEEN THAT THE CREDIT WORTHINESS OF THE A BOVE 4 PERSONS WAS NOT ESTABLISHED. HE, THEREFORE, ASKED THE A SSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS CLAIMED IN RESP ECT OF THE ABOVE 13 PERSONS. IT WAS SUBMITTED BY THE ASSESSEE T HAT ALL THE ABOVE PERSONS ARE AGRICULTURISTS HAVING SUBSTANTIAL LAND H OLDING AND THEY HAD SUFFICIENT AGRICULTURAL INCOME TO INVEST THE AMOUNT S. THE ASSESSEE SUBMITTED 7/12 EXTRACTS AND AFFIDAVITS OF THESE PERSONS. HOWEVER, THE AO NOTED THAT NO AFFIDAVITS OR 7/12 EXTRACT S OF ANY OF THE PERSONS OTHER THAN THE 4 PERSONS IN WHOSE CASES INVESTIGATIONS HAD BEEN MADE BY THE ADIT HAVE BEEN FILED. NONE OF TH ESE PERSONS OTHER THAN THE SAID 4 PERSONS WERE PRODUCED BEFORE TH E AO. NO DETAILS OF THEIR AGRICULTURAL INCOME WAS FURNISHED. HE, THEREFO RE, WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO PROVE THE CREDIT WORTHINESS OF THESE 9 PERSONS. FURTHER, ALL THESE PERSO NS HAVE MADE 4 ITA NOS.312 & 313/PN/2013 THE PAYMENTS IN CASH. THEREFORE, THE GENUINENESS OF THE TRANSACTIONS WITH THESE PERSONS WERE NOT ESTABLISHED. T HE AO, THEREFORE, TREATED THE AMOUNT SHOWN AGAINST THESE 9 PE RSONS AMOUNTING TO RS.1,26,50,000/- AS INCOME OF THE ASSESSEE U/S.68 OF THE I.T. ACT. 6. SO FAR AS THE ENQUIRIES CONDUCTED BY THE ADIT IN RE SPECT OF THE 4 PERSONS ARE CONCERNED THE AO RECORDED THE STATEME NT OF THESE 4 PERSONS WHO WERE PRODUCED BEFORE HIM BY THE ASSESSEE. HE OBSERVED THAT THE SOURCE OF THE HUGE INVESTMENTS CLAIMED BY THE ABOVE 4 PERSONS ARE MAINLY OUT OF AGRICULTURAL INCOME. CONSIDERING THEIR LAND HOLDINGS AND SIZE OF THEIR FAMILY, THE AO WAS OF THE OPIN ION THAT SUCH HUGE SAVINGS OUT OF AGRICULTURAL ACTIVITY IS VERY UNLIKE LY. FURTHER, IN THE ABOVE MENTIONED 4 CASES THE ENTIRE PAYM ENT HAS BEEN RECEIVED IN CASH IN SHORT PERIOD OF TIME. THE AO OB SERVED THAT ALTHOUGH THE ABOVE PERSONS HAD BANK ACCOUNTS THE ABO VE PERSONS HAD MADE TRIPS TO PUNE IN INTERVALS OF 2 TO 4 DAYS FROM PLACES AS FAR AWAY AS 40 TO100 KMS CARRYING SUBSTANTIAL CASH AMOUNTS TO COMPLETE THE TRANSACTIONS WHICH DOES NOT SOUND PLAUSIBLE. HE, THEREFORE, WAS OF THE OPINION THAT THE GENUINENESS OF THE TRANSACTIONS IN THE CASES OF THESE 4 PERSONS IS ALSO DOUBTFUL. 7. THE AO OBSERVED THAT NONE OF THE ABOVE 13 PERSONS WHO ARE ALLEGED TO HAVE BOOKED SHOPS/FLATS MORE THAN 5 YEARS AG O BY PAYING SUBSTANTIAL AMOUNTS AS ADVANCE RANGING FROM 5 TO 30 LAK HS HAVE BEEN PROVIDED ANY FLAT OR SHOP EVEN AFTER 5 YEARS. THES E PERSONS HAVE ALSO NOT BEEN RETURNED THEIR ADVANCES. THIS ALSO C ASTS DOUBT ON THE GENUINENESS OF THE CREDITS. IN VIEW OF THE ABOVE AND AFTER RECORDING THE STATEMENTS OF THESE 4 PERSONS THE AO WR OTE A LETTER TO THE ASSESSEE ON 23-12-2010 PROPOSING ADDITION OF THE EN TIRE AMOUNT 5 ITA NOS.312 & 313/PN/2013 OF RS.2.30 CRORES AS UNEXPLAINED CASH CREDIT U/S.68. COPIES OF THE STATEMENTS RECORDED OF THE 4 PERSONS WERE ALSO GIVEN T O THE ASSESSEE. SINCE THERE WAS NO REPLY FROM THE ASSESSEE THE AO HELD THAT THE CREDIT WORTHINESS OF THE CREDITORS AND THE GENUINENESS O F THE TRANSACTIONS HAVE NOT BEEN PROVED IN RESPECT OF THE CR EDIT OF RS.2.30 CRORES. HE ACCORDINGLY MADE ADDITION OF RS.2.30 CRORES U/ S.68 OF THE I.T. ACT TO THE TOTAL INCOME OF THE ASSESSEE. 8. IN APPEAL THE LD.CIT(A) DELETED AN AMOUNT OF RS.7 LAKHS B EING ADVANCE RECEIVED FROM SHRI VITHABAI HARIBHAU MORE AND SM T. SANGITA CHANDRASHEKHAR MORE. HOWEVER, HE SUSTAINED THE BALANCE AMOUNT OF RS.2,23,00,000/- ON THE GROUND THAT THE ASSESS EE WAS UNABLE TO DISCHARGE HIS ONUS IN PROVING THE GENUINENESS O F THE TRANSACTIONS AND CAPACITY OF THE SOCALLED CREDITORS TO AD VANCE SUCH LARGE AMOUNT OF MONEY. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) CENTRAL HAS ERRED IN CONFIRMING THE ADDITION OF ADVANCES RECEIVED FOR FLAT/SHOP OF RS.2,23,00,000/- OUT OF TOT AL ADDITION OF RS.2,30,00,000/- MADE BY THE LEARNED ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT U/S. 68 OF IT ACT ON THE GROUND BY ALLEGI NG THAT, GENUINENESS AND CREDIT WORTHINESS OF THE ADVANCES RECEIVED FROM TH E FLAT/SHOP HOLDERS ARE NOT PROVED. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES, DEVOID OF MERITS AND BEING LEGALLY UN SUSTAINABLE THE LEARNED CIT[A] OUGHT TO HAVE DELETED THE SAID ADDITI ON. 2. THE APPELLANT DENIES HIS LIABILITY TO PAY ANY INTE REST U/S.234B AND 234C OF THE I.T. ACT, 1961 AND HENCE THE SAME MAY PL EASE BE DELETED. 3. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL , IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 10. THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND WHICH READS AS UNDER : 6 ITA NOS.312 & 313/PN/2013 SINCE DURING THE COURSE OF SEARCH AND SEIZURE ACTION CARRIED ON U/S.132 OF THE I.T. ACT, 1961 ON 11/02/2009 AT THE BUSINESS AN D RESIDENTIAL PREMISES OF THE APPELLANT, NO INCRIMINATING MATERIAL OF WHATSOEVER NATURE WAS FOUND IN RESPECT OF SHOP BOOKING ADVANCES O F RS.2,30,00,000.00 RECORDED BY THE APPELLANT IN HIS RE GULAR BOOKS OF ACCOUNTS MAINTAINED PRIOR TO THE DATE OF SEARCH AND T HE SAME BEING ACCEPTED AS GENUINE BY THE LEARNED ASSESSING OFFICER DU RING SCRUTINY ASSESSMENT PROCEEDINGS U/S.143(3) OF THE I.T. ACT, 1961, PRIOR TO THE DATE OF SEARCH, THE ADDITION OF RS.2,30,00,000.00 MAD E BY THE LEARNED ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT FRAMED U/S.143( 3) R.W.S.153A OF THE I.T. ACT. 1961 IS BAD IN LAW, WITHO UT JURISDICTION AND HENCE THE SAME MAY PLEASE BE DELETED. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE MENTIONED ADDITIONAL GROUND IS PURELY A LEGAL GROUND AND FOR ADJUDICATION OF THE SAME NO FRESH INVESTIGATION OF FACTS IS N ECESSARY AND THE SAID GROUND CAN BE DECIDED ON THE BASIS OF MATE RIAL AVAILABLE ON RECORD. RELYING ON VARIOUS DECISIONS INCLUDING THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. VS. CIT R EPORTED IN 229 ITR 383, THE DECISION IN THE CASE OF JUTE CORPORATION OF INDIA REPORTED IN 187 ITR 688 AND THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY COMPANY REPO RTED IN 199 ITR 351 HE SUBMITTED THAT THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE SHOULD BE ADMITTED FOR ADJUDICATION. 11.1 THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND STRONGLY OPPOSED THE ADMISSION OF THE ADDITIONAL GROUND. H E SUBMITTED THAT DURING THE COURSE OF SEARCH CERTAIN LOOSE PAPERS WERE FOUND CONTAINING 14 PAGES IN BUNDLE NO.1 FOR WHICH THE ASSESSEE HAD TO DECLARE ADDITIONAL INCOME IN RESPECT OF TRY DEVELOPERS. THEREFORE, IT CANNOT BE SAID THAT NO INCRIMINATING DOCUMENTS WERE FOU ND DURING THE COURSE OF SEARCH. HE ACCORDINGLY SUBMITTED THAT TH E ADDITIONAL GROUND FILED BY THE ASSESSEE SHOULD BE DISMISSED. 7 ITA NOS.312 & 313/PN/2013 12. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FAC T THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY A LEGA L ONE FOR WHICH NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED FOR ADJUDICATION. 13. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E SEARCH TOOK PLACE IN THE INSTANT CASE ON 11-02-2009. PRIOR TO THE SEARCH THE, ASSESSEE HAD FILED HIS ORIGINAL RETURN OF INCOME ON 26-1 0-2006 DECLARING TOTAL INCOME OF RS.28,95,310/-. THE AO IN THE ORDE R PASSED U/S.143(3) ON 28-11-2008 DETERMINED THE TOTAL INC OME AT RS.55,59,980/-. REFERRING TO PAGE 2 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENC H TO PARA 3 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS MENTIONED THA T THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FILED TH E COPIES OF APPROVED PLAN, AGREEMENT AND DETAILS OF PAYMENT TO LANDLOR D, ADDITION TO ASSETS, EXPENSES, ADVANCE RECEIVED FROM CUST OMERS, DEBTORS AND CREDITORS. REFERRING TO PAGE 27 OF THE PAPE R BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENC H TO THE BALANCE SHEET FILED BY THE ASSESSEE ACCORDING TO WHICH AD VANCES FROM SHOP HOLDERS HAS BEEN SHOWN AT RS.5,57,14,058/- AS ON 31 -03-2006. REFERRING TO PAGE 32 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE CURRENT LIABILITIES AN D PROVISIONS AS ON 31-03-2006 ACCORDING TO WHICH ADVANCES FROM SHOP HOLDERS HAS BEEN SHOWN AT RS.5,57,14,058/-. REFERRING TO PA GES 41 AND 42 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSES SEE DREW THE ATTENTION OF THE BENCH TO THE LIST OF CURRENT LIABILITIES WHER EIN THE NAMES OF THE PERSONS MENTIONED BY THE AO IS APPEARING. HE SUBMITTED THAT AT THE TIME OF SEARCH NO INCRIMINATING MATE RIAL WAS FOUND. THE ASSESSEE HAS DECLARED THE ADVANCE FOR SALE O F SHOPS/FLATS 8 ITA NOS.312 & 313/PN/2013 FROM CUSTOMERS AND THE AO IN THE BODY OF THE ASSESSMEN T ORDER PASSED U/S.143(3) HAS GIVEN A CATEGORICAL FINDING THAT THE A SSESSEE HAS FILED THE DETAILS OF ADVANCES RECEIVED FROM CUSTOMERS. REFERRING TO THE ORDER PASSED U/S.153A HE SUBMITTED THAT THERE IS NOT A WHISPER OF ANY ALLEGED INCRIMINATING MATERIAL. HE SUBMITTED TH AT MERE POST SEARCH ENQUIRY CANNOT ELEVATE THE RESULT OF E NQUIRY INTO INCRIMINATING MATERIAL. 14. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COUR T IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION REPORTED IN 120 DTR 89 AND THE DECISION OF HONBLE BOMBAY HIGH COURT, NAGPUR BENCH IN THE CASE OF MURALI AGRO PRODUCTS LTD. IN ITA NO.36/2009 HE SUBMITTED THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE AND THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER U/S.153A R.W.S. 143(3) OF THE I.T, ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY . HE ACCORDINGLY SUBMITTED THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) SHOULD BE DELETED. 15. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. BHANDARI CONSTRUCTION COMPANY VS. DCIT VIDE ITA NO.22/PN/2014 AND THE DECISION OF THE TRIB UNAL IN THE CASE OF M/S. KAKADE CONSTRUCTION COMPANY VS. ACIT V IDE ITA NOS. 99 AND 100/PN/2013 ORDER DATED 30-04-2013 FOR A.Y RS. 2005- 06 & 2006-07 TO THE ABOVE PROPOSITION. 16. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE ASSESSEE HAS RECEIVED ADVANCE FOR SALE OF SHOPS/FLATS FROM PERSONS 9 ITA NOS.312 & 313/PN/2013 WHO DO NOT HAVE ANY KNOWN SOURCE OF INCOME OTHER THAN THE AGRICULTURAL INCOME WHICH REMAINED UNSUBSTANTIATED. THE AS SESSEE HAS NOT DISCHARGED THE ONUS CAST ON HIM BY PROVING THE GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS OF THE CUS TOMERS. EVEN TILL TODAY, THE ASSESSEE HAS NOT HANDED OVER THE SHOPS/ FLATS TO THE SOCALLED BUYERS WHO HAVE PAID THE HUGE ADVANCES SINCE L ONG. ALL THESE THINGS POINT OUT THAT THE TRANSACTIONS ARE BOGUS AND NOT GENUINE. THE ADIT HAD CONDUCTED ENQUIRIES IN THE CASE O F 4 PERSONS OUT OF THE 13 PERSONS WHERE HE HAD FOUND THAT THE ABO VE 4 PERSONS DO NOT HAVE THE CAPACITY TO ADVANCE SUCH HUGE LOAN. D ESPITE BEING GIVEN AN OPPORTUNITY BY THE AO THE ASSESSEE HAS NOT P RODUCED THE REMAINING 9 PERSONS. THEREFORE, UNDER THE FACTS AND CIRCU MSTANCES OF THE CASE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS JUSTIFIED. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE CASH BOOK FILED BEFORE THE AO WAS AUDITED, WHERE AS CASH BOOK FOUND FROM THE COMPUTER OF THE ASSESSEE SHOWS THA T THERE IS NEGATIVE CASH BALANCE ON DIFFERENT DATES WHICH THE ASSESS EE COULD NOT EXPLAIN PROPERLY. FURTHER, THE LOOSE PAPER BUNDLE FOUN D FROM THE RESIDENCE/BUSINESS PREMISES OF THE ASSESSEE BEARING BUND LE NO.1 CONTAINING 14 PAGES CONTAIN DIRECT EVIDENCE FOR WHICH THE ASSESSEE HAD TO DECLARE ADDITIONAL INCOME IN RESPECT OF TRY DEVELOP ERS. HE ACCORDINGLY SUBMITTED THAT THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE SHOULD BE DISMISSED. 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED T HE VARIOUS DECISIONS CITED BEFORE US. ADMITTEDLY, IN THE INSTANT CASE, THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCE EDINGS HAS 10 ITA NOS.312 & 313/PN/2013 FILED THE DETAILS OF ADVANCE RECEIVED FROM CUSTOMERS TOWARD S ADVANCES FOR SALE OF SHOPS/FLATS. THE ASSESSMENT ORDER PASSED BY THE AO U/S.153A R.W.S.143(3) DOES NOT SPEAK OF ANY INCRIM INATING MATERIAL THAT WAS FOUND DURING THE COURSE OF SEARCH. ON LY THE ADIT HAD CONDUCTED CERTAIN POST SEARCH ENQUIRIES IN RESPECT OF 4 PERSONS OUT OF THE 13 PERSONS MENTIONED BY THE AO ACCORDING TO WHICH THE PERSONS ARE HAVING INCOME FROM AGRICULTURE ONLY. DESPITE HAVING BANK ACCOUNTS THEY HAVE PAID AMOUNT IN CASH AND THEI R CREDIT WORTHINESS IS DOUBTFUL. IN VIEW OF THE ABOVE AND IN ABSEN CE OF ANY PLAUSIBLE EVIDENCE FILED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS TO SUBSTANTIATE THE GENUINENESS OF THE TRAN SACTIONS AND CREDIT WORTHINESS OF THE PERSONS WHO HAD GIVEN HUGE ADV ANCES, THE AO MADE ADDITION OF RS.2.30 CRORES U/S.68. THE CIT(A) ALLOWED RELIEF OF ONLY RS.7 LAKHS AND SUSTAINED ADDITION OF RS.2,23,00,000/-. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT S INCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARC H, THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (SUPR A) AND MURALI AGRO PRODUCTS LTD. (SUPRA) THE AO COULD NOT HAVE M ADE ANY ADDITION U/S.68 OF THE I.T. ACT IN RESPECT OF ADVANCE FROM CUSTOMERS TOWARDS SALE OF FLATS/SHOPS. ALTHOUGH THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MURALI AGRO PRODUCTS LTD. (SUPRA) PASSED ON 29-10-2010 WAS AVAILABLE AT THE TIME OF COMPLET ION OF THE ASSESSMENT U/S.143(3) R.W.S. 153A (PASSED ON 31-12-2010) THE SAME WAS NEITHER BROUGHT TO THE NOTICE OF THE AO NOR BEFOR E THE CIT(A) FOR WHICH THE AO/CIT(A) HAVE NOT CONSIDERED THE SAME. S IMILARLY, THE DECISION IN THE CASE OF CONTINENTAL WAREHOUSING CORPOR ATION (SUPRA) WAS PASSED AFTER THE ORDER OF THE CIT(A). THUS, TH E LOWER AUTHORITIES HAVE NO OCCASION TO CONSIDER THE ABOVE 2 DE CISIONS AND 11 ITA NOS.312 & 313/PN/2013 APPLY THEIR MIND WHICH ARE BEING RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US FOR THE FIRST TIME TO THE PROPOSITION THAT THE AO COULD NOT HAVE MADE ANY ADDITION U/S.68 OF THE I.T. AC T, 1961 IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH. UNDER THE AFOREMENTIONED CIRCUMSTANCES, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER G IVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO WHILE DECIDING THE ISSUE SHALL KEEP IN MIND THE DECISIONS OF THE HONBLE BO MBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPOR ATION (SUPRA) AND MURALI AGRO PRODUCTS LTD. (SUPRA). ADDITIONAL GR OUND BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 18. THE LD. COUNSEL FOR THE ASSESSEE DID NOT MAKE ANY A RGUMENT SO FAR AS GROUND OF APPEAL NO.1 IS CONCERNED. HE CONCENT RATED ONLY ON THE ADDITIONAL GROUND. IN ABSENCE OF ANY ARGUMENT BY THE LD. COUNSEL FOR THE ASSESSEE FOR GROUND OF APPEAL NO.1 , THE SAME IS DISMISSED. 19. GROUND OF APPEAL NO.2 RELATES TO CHARGING OF INTEREST U/S.234B AND 234C. 20. AFTER HEARING BOTH SIDES, WE ARE OF THE CONSIDERED O PINION THAT CHARGING OF INTEREST U/S.234B AND 234C ARE MANDATORY AN D CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE ABOVE GROUND IS DISMISSED. 21. GROUND OF APPEAL NO.3 BEING GENERAL IN NATURE IS DISMISSED. 12 ITA NOS.312 & 313/PN/2013 ITA NO.313/PN/2013 (A.Y. 2007-08) : 22. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE H AD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 31 -10-2007 DECLARING TOTAL INCOME OF RS.40,57,427/-. A SEARCH U/S.132 O F THE I.T. ACT WAS CONDUCTED IN CASE OF THE ASSESSEE ON 11-0 2-2009. IN RESPONSE TO NOTICE U/S.153A(1) OF THE ACT THE ASSESSEE FILE D HIS RETURN OF INCOME ON 02-08-2010 DECLARING INCOME OF RS.49,89 ,923/-. AFTER GOING THROUGH THE RETURN OF INCOME THE AO NOTICED THAT THE ASSESSEE HAD NOT SHOWN HIS REMUNERATION FROM KAKADE JEW ELLERS AMOUNTING TO RS.9,32,495/- IN HIS ORIGINAL RETURN OF INCOME WHICH HAS BEEN SHOWN IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A. 23. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS RECEIVED VARIOUS AMOUNTS FROM BLU E PEARL PROPERTIES PVT. LTD., FLAT NO.3, VIDYUT, CAMA LANE, GHATKOPAR (WEST), MUMBAI 400 086 ON DIFFERENT DATES AS PER PAGES 2 AND 3 OF THE ASSESSMENT ORDER AMOUNTING TO RS.1,03,61,773/-. ALL THE AB OVE AMOUNTS ARE CLAIMED TO HAVE BEEN RECEIVED IN CASH. IT W AS EXPLAINED THAT THE ASSESSEE HAD RECEIVED THESE AMOUNTS TOWARDS SALE OF SHOPS. THE AO NOTED THAT DURING THE POST SEARCH ENQUIRY, M/S. BLUE PEARL PROPERTIES PVT. LTD. HAS DENIED OF THE PURCHASE OF THE P ROPERTY. THE AO FURTHER NOTED THAT IN ORDER TO VERIFY THE IDENTITY AN D CREDIT WORTHINESS OF THE CREDITOR AS WELL AS GENUINENESS OF THE T RANSACTION NECESSARY CROSS VERIFICATIONS WERE CARRIED OUT WITH BLUE P EARL PROPERTIES PVT. LTD. MUMBAI BY THE DDIT (INVESTIGATION), PUN E. IN RESPONSE TO SUMMONS U/S.131 OF THE I.T. ACT, 1961 SHRI SURAJ PANKAJ BHAYANI, ONE OF THE DIRECTORS OF THE COMPANY HA D ATTENDED THE OFFICE OF THE DDIT. HIS STATEMENT WAS RECORDED U/S.13 1 OF THE I.T. ACT ON 29-10-2009. IN HIS STATEMENT SHRI BHAYANI H AS CLAIMED 13 ITA NOS.312 & 313/PN/2013 THAT THE COMPANY HAS NEITHER PURCHASED ANY IMMOVABLE P ROPERTY LIKE PLOT, LAND, SHOPS ETC. NOR MADE ANY AGREEMENT TO PURC HASE FOR THE SAME SO FAR. HOWEVER, HE HAD ADMITTED TO HAVE GIV EN AN ADVANCE OF RS.1,25,000/- TO SHRI SURYAKANT KAKADE BY TW O DEMAND DRAFTS OF RS. 1 LAKH AND RS.25,000/- RESPECTIVELY ON 31-01 -2004 FOR BOOKING OF PREMISES. HOWEVER, NO AGREEMENT OF PURCHASE FO R THE SAID TRANSACTION HAS BEEN MADE TILL TODAY. THE CLAIM MADE BY SHRI SURYAKANT KAKADE THAT HE HAS MADE AGREEMENT TO SELL S HOPS AND HANDED OVER THE POSSESSION OF THE SAME DURING F.Y. 2006 -07 AND RECEIVED ADVANCE OF RS.1,03,61,773/- IN INSTALMENTS ON VARIOUS DATES DURING THE PERIOD FROM 12-02-2007 TO 13-03-2007 WAS BROUGHT TO THE NOTICE OF SHRI SURAJ PANKAJ BHIYANI. HOWEVER, SHRI BHAYAN I HAD CATEGORICALLY STATED THAT NEITHER HE NOR HIS COMPANY BL UE PEARL PROPERTIES PVT. LTD. HAS MADE ANY AGREEMENT OR PAID ANY ADVANCE IN CASH TO SHRI SURYANT KAKADE OR HIS ASSOCIATES FOR PURCH ASE OF ANY SHOP/FLAT AS CLAIMED BY SHRI SURYAKANT KAKADE. SHRI BHIYA NI ALSO FILED COPIES OF CASH BOOK, BANK BOOK AND LEDGER ACCOUNT OF BLUE PEARL PROPERTIES PVT. LTD., MUMBAI FOR F.Y. 2006-07. ON PERUSAL OF THE SAME IT WAS SEEN THAT NO SUCH ADVANCE OF RS.1,03,61,773/- HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNTS OF THE SAID COMPANY. THE AO, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN IN THE LIGHT OF T HE ABOVE SUBMISSION BY SHRI BHAYANI. THE ASSESSEE IN RESPONSE TO THE SAME SUBMITTED AS UNDER : THE AGREEMENT TO SALE IN RESPECT OF ABOVE SAID OFF ICES/ SHOPS HAS BEEN DULY EXECUTED/REGISTERED IN FAVOUR OF BLUE PEARL PROPERTIES PVT. LTD. & SHIROMANI IMTREX PVT LTD AND THE POSSESSION OF THOSE OFFICES/ SHOPS HAS ALREADY BEEN HANDED OVER DURING THE F. Y. 2006/07 ITSELF CONSEQU ENT TO SALE & POSSESSION OF SAID OFFICES/ SHOPS TO BLUE PEARL PROPERTIES PVT. L TD. & SHIROMANI IMTREX PVT LTD, THE ABOVE SAID ADVANCES HAVE BEEN TRANSFERRED AND A DJUSTED AGAINST SALE OF OFFICE/SHOPS AND ACCORDINGLY REFLECTED IN PROFIT & LOSS ACCOUNT UNDER THE HEAD 'SALE' FOR F. Y.2006/07 RELEVANT TO A Y.2007/06. LOOKING TO ABOVE FACTS AND CIRCUMSTANCES, YOUR HONO UR SHALL APPRECIATE THAT, THE ADVANCES FROM BLUE PEARL PROPERTIES PVT. LTD. & SHIROMANI IMTREX PVT. LTD. WERE TRANSFERRED/ADJUSTED TO SALES AND WERE NOT OUT STANDING AS ON 31 ST MARCH, 2007. 14 ITA NOS.312 & 313/PN/2013 24. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF TH E ASSESSEE. HE HELD THAT THE ASSESSEE DID NOT PRODUCE THE CREDITOR OR FILE ANY OTHER EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSA CTION. THEREFORE, THE AMOUNT CREDITED WITH ACCOUNT OF BLUE PEARL PROPERTIES PVT. LTD. REMAINS UNEXPLAINED. HE ACCORDINGLY MADE ADDITION OF RS.1,17,96,773/- AS UNEXPLAINED CASH CREDIT U/S.68 IN THE HA NDS OF THE ASSESSEE. 25. THE AO SIMILARLY NOTED THAT THE ASSESSEE HAS INTROD UCED CASH IN HIS CAPITAL ACCOUNT IN THE BOOKS OF SHRI SURYAKANT KAKA DE AND ASSOCIATES AS PER THE FOLLOWING DETAILS : DATE AMOUNT (IN RS.) 15 - 04 - 2006 20,00,000 18 - 05 - 2006 2,00,000 10 - 05 - 2006 48,50,000 12 - 07 - 2006 23,00,000 14 - 08 - 2006 6,00,000 05 - 02 - 2007 25,00,000 10 - 02 - 2007 1,00,00,000 18 - 02 - 2007 60,00,000 28 - 02 - 2007 10,00,000 TOTAL 2,84,50,000 26. THE AO ASKED THE ASSESSEE TO FURNISH THE SOURCE O F CASH SO INTRODUCED. IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAD RECEIVED AGGREGATE AMOUNT OF RS.2,84,50,000/- FROM 88 PERSONS VIDE RECEIPT NO.571 DATED 02-04-2006 TO 667 DATED 12-02-2007 TOWA RDS ADVANCE FOR BOOKING OF FLATS IN A PROPOSED PROJECT AT KOTHRUD. THESE ADVANC ES WERE ACCOUNTED FOR IN THE BOOKS OF SHRI SURYAKANT KAKAD E AND SUBSEQUENTLY TRANSFERRED TO HIS CAPITAL ACCOUNT IN SURYA KANT KAKADE AND ASSOCIATES. THE AO NOTED THAT ALL THE AMOUNTS ARE RECEIVED IN CASH AND THEREFORE THE GENUINENESS OF THE TRANSACTIONS ARE NOT ESTABLISHED. THE ASSESSEE HAS NOT FURNISHED THE COMPLETE NAMES 15 ITA NOS.312 & 313/PN/2013 AND ADDRESSES OF THESE 88 PERSONS. HE HAS ALSO NOT FUR NISHED ANY DETAILS TO ESTABLISH THEIR CREDIT WORTHINESS. UNDER THESE CIRCUMSTANCES THE AMOUNT OF RS.2,84,50,000/- WAS TREATED BY THE AO ASSESSEES INCOME U/S.68 OF THE I.T. ACT. 27. SO FAR AS ADDITION OF THE AMOUNT OF RS.1,19,18,773/- IS CONCERNED THE LD. CIT(A) CONFIRMED THE ADDITION BY OBSERVIN G AS UNDER : 11 .7 I HAVE GIVEN CAREFUL CONSIDERATION TO ALL TH E FACTS BEFORE ME. I HAVE ALSO PERUSED CAREFULLY THE COPIES OF THE REGISTERE D AGREEMENTS BETWEEN M/S SUYAKANT KAKADE & ASSOCIATES AND M/S BLUE P EARL PROPERTIES PRIVATE LIMITED DATED 31/01/2004, AND BET WEEN AND M/S SUYAKANT KAKADE & ASSOCIATES AND MIS AUTOMATIC IT SER VICES PRIVATE LIMITED DATED 16/08/2005, COPIES OF WHICH HAVE BEEN SUBMITTED BY THE APPELLANT. THE APPELLANT'S CLAIM VIDE IT'S LETTER DA TED 29/12/2010 BEFORE THE AO WAS THAT MIS SURYAKANT KAKADE & ASSOCIATES ENTER ED INTO UNREGISTERED MOU WITH MIS BLUE PEARL PROPERTIES PRIVAT E LIMITED ON 31/01/2004 AND THE SAID CONCERN PAID AN AGGREGATE AM OUNT OF RS. 1,25,000/- VIDE CROSSED ACCOUNT PAYEE CHEQUES AS ADVANC ES AGAINST BOOKING OF SHOPS. HOWEVER, AT THE TIME OF FINALIZATIO N OF REGISTERED AGREEMENT, THE SAME WAS ENTERED INTO WITH MIS AUTOMATI C IT SERVICE PRIVATE LIMITED INSTEAD OF WITH M/S BLUE PEARL PROPER TIES PRIVATE LIMITED WITH WHOM THE ABOVE MENTIONED UNREGISTERED A GREEMENT WAS ENTERED INTO OVER A YEAR AGO. IT IS FURTHER CLAIMED THAT THE SITUATION AROSE ON ACCOUNT OF THE FACT THAT SHRI NITISH NARAYAN RANE IS THE DIRECTOR OF BOTH THE COMPANIES AND THE REGISTERED AGREEMENT WAS CO NCLUDED WITH THE LATTER COMPANY INSTEAD OF THE FORMER COMPANY AT HIS INSTRUCTIONS. IT IS ALSO STATED THAT THE AMOUNT OF RS. 1 LAKH MENTIONED IN THE REGISTERED AGREEMENT WAS ADJUSTED AGAINST THE ADVANCE RECEIVED FR OM M/S BLUE PEARL PROPERTIES PRIVATE LIMITED. 11.8 HAVING PERUSED BOTH THE AGREEMENTS CAREFULLY, I AM UNABLE TO SEE A DEFINITE CORROBORATION OF THE APPELLANTS CLAIM WI TH REGARD TO THE ABOVE MENTIONED TRANSACTION. THE FORMER AGREEMENT (WITH M /S. BLUE PEARL PROPERTIES PRIVATE LIMITED) IS FOR ONE SHOP, NAMELY, S HOP NO.42 IN WING, B-1 ADMEASURING 390 SQ.FT. FOR A CONSIDERATION OF RS.8 ,52,500/-, WHEREAS THE LATTER ONE (WITH M/S. AUTOMATIC IT SERVICES PRIVA TE LIMITED) IS FOR SHOP NOS. 50 TO 58 FOR A BUILT UP AREA ADMEASURING 397 5 SQ.FT. FOR A CONSIDERATION OF RS.1,41,05,000/-. IN THE FORMER AGR EEMENT THE ADVANCE PAID IS MENTIONED AS RS.25,000/-. IN THE LATTER AGREE MENT THE ADVANCE PAID IS MENTIONED AS RS. 1 LAKH AND THERE IS NO MENTION WHATSOEVER OF ADJUSTMENT OF THE AMOUNT OF RS.25,000/- PAID BY M/S. BLUE PEARL PROPERTIES PRIVATE LIMITED. MOREOVER THE AMOUNTS MEN TIONED IN THE TWO AGREEMENTS ALSO DO NOT TALLY. THE AMOUNT AGREED IN T HE REGISTERED AGREEMENT WITH M/S. AUTOMATIC IT SERVICES PRIVATE LI MITED WAS RS. 1,41,05,000/-), WHEREAS THE AMOUNT CLAIMED TO HAVE B EEN TRANSFERRED BY THE APPELLANT TO THE SALES ACCOUNT FOR FY 2006-07 (RS. 1,19,18,773/-). MOST IMPORTANTLY, THE TRANSACTIONS ARE CLAIMED TO HAVE BEEN IN CASH. NO REASONS HAVE BEEN MENTIONED AS TO WHY THE AMOUNTS HAD T O BE ACCEPTED IN CASH MAKING IT IMPOSSIBLE TO VERIFY THE FACTUAL CLA IMS BEING MADE BY 16 ITA NOS.312 & 313/PN/2013 THE APPELLANT. THERE IS ALSO NO CONFIRMATION FROM THE BUYER COMPANY OR FROM SHRI NITESH NARAYAN RANE ON WHOSE INSTRUCTIONS THE APPELLANT CLAIMS TO HAVE ACTED. THERE IS NO INDEPENDENT EVIDENC E OR THIRD PARTY EVIDENCE WHATSOEVER TO PROVE THE GENUINENESS OF THE TR ANSACTION. AS SUCH. CONSIDERING THE LEGAL POSITION DISCUSSED AT LENGTH IN PARA 10.5 SUPRA, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS TOTALLY FAILED TO DISCHARGE HIS ONUS OF PROVING THE GENUINENESS OF THE CRE DIT. ACCORDINGLY, THE APPELLANT'S EXPLANATION WITH REGARD TO THE SAID A MOUNT IS HEREBY REJECTED AND, CONSEQUENTLY, THIS GROUND OF APPEAL IS H EREBY DISMISSED. 28. SO FAR AS ADDITION OF RS.2,84,50,000/- IS CONCERNED THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 10.6 I HAVE GIVEN CAREFUL CONSIDERATION TO ALL THE FACTS BEFORE ME AND THE SUPPORTING EVIDENCE ADDUCED BY THE APPELLANT IN THE LIGHT OF THE LEGAL POSITION OUTLINED IN PARA 10.5 (SUPRA). THE AO HAS RECORDED THAT THE APPELLANT FAILED TO FURNISH THE COMPLETE NAMES AN D ADDRESSES OF THE 88 PERSONS (AS PER THE APPELLANT, THE AMOUNTS WERE RECE IVED FROM ONLY 33 PERSONS THOUGH THROUGH 88 INDIVIDUAL TRANSACTIONS) A ND ANY EVIDENCE REGARDING THEIR CREDITWORTHINESS. AS AGAINST T HIS, THE APPELLANT CLAIMED DURING THE COURSE OF APPELLATE PROCEEDINGS TH AT CONFIRMATIONS/AFFIDAVITS, 7/12 EXTRACTS AND INCOME PROOF HAD BEEN SUBMITTED. I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF T HE APPELLANT AND THE SUPPORTING EVIDENCE ADDUCED AND FIND THE SAME TO BE GROSSLY INADEQUATE TO ESTABLISH THE PREPONDERANCE OF PROBABI LITY OF THE GENUINENESS OF THE CREDITS. APART FROM BARE CONFIRMATI ONS AND COPIES OF LEDGER ACCOUNTS IN ASSESSEE'S OWN BOOKS, NO CONVINCING EV IDENCE HAS BEEN FURNISHED EVEN DURING THE APPELLATE STAGE. FOR T HIS YEAR TOO, ALL THE TRANSACTIONS ARE CLAIMED TO HAVE TAKEN PLACE IN CASH. THERE IS ALSO ABSOLUTELY NO EVIDENCE OF HANDING OVER OF FLAT TO AN Y OF THE PERSONS FROM WHOM THE ADVANCES ARE CLAIMED TO HAVE BEEN RECEIVED. UNDER THE CIRCUMSTANCES THE APPELLANT'S CASE WITH REGARD TO THE CASH CREDITS AMOUNTING TO RS. 2,84,50,000/- FOR THE YEAR UNDER AP PEAL STANDS ON A MUCH WEAKER FOOTING EVEN THAN THE CLAIM IN RESPECT O F AN AMOUNT OF RS. 2,23,00,000/- FOR THE IMMEDIATELY PRECEDING AY (AY 2006-07) WHICH WAS SUSTAINED FOR AY 2006-07 (SEE PARA 5 TO 5.18 SUPRA). ACCORDINGLY, THIS GROUND OF APPEAL IS ALSO DISMISSED. 29. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) CENTRAL HAS ERRED IN CONFIRMING THE ADDITION OF ADVANCES RECEIVED FOR FLAT/ SHOP OF RS.2,84,50,000/- MADE BY THE LEARNED ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT U/ S 68 OF IT ACT ON THE GROUND BY ALLEGING THAT, GENUINENESS AND CREDIT WORTH INESS OF THE ADVANCES RECEIVED FROM THE FLAT/ SHOP HOLDERS ARE NOT PROVED. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES, DEVOID 17 ITA NOS.312 & 313/PN/2013 OF MERITS AND BEING LEGALLY UNSUSTAINABLE THE LEARNED CIT [A] OUGHT TO HAVE DELETED THE SAID ADDITION. 2. IN THE FACTS AND CIRCUMSTANCES, OF THE CASE AND IN L AW, THE LEARNED CIT (A) CENTRAL HAS ERRED IN CONFIRMING THE ADDITION OF ADVANCES RECEIVED FROM SHPUT PURCHASER AND DULY TRANSFERRED TO SALE OF R S.1,19,18,773/- MADE BY THE LEARNED ASSESSING OFFICER AS UNEXPLAINED C ASH CREDIT U/S 68 OF THE IT ACT ON GROUND BY ALLEGING THAT, THE GENUI NENESS OF THE CREDIT IS NOT PROVED. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES, DEVOID OF MERITS AND BEING LEGALLY UNSUSTAINABL E THE LEARNED C.IT. [A] OUGHT TO HAVE DELETED THE SAID ADDITION. 3. THE APPELLANT DENIES HIS LIABILITY TO PAY ANY INTE REST U/S.234B AND 234C OF THE I.T. ACT, 1961 AND HENCE THE SAME MAY PL EASE BE DELETED. 4. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPEAL , IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 30. THE ASSESSEE HAS ALSO FILED 2 ADDITIONAL GROUNDS, WHICH READ AS UNDER : 1. SINCE DURING THE COURSE OF SEARCH AND SEIZURE AC TION CARRIED ON U/S.132 OF THE I.T. ACT, 1961 ON 11/02/2009 AT THE B USINESS AND RESIDENTIAL PREMISES OF THE APPELLANT, NO INCRIMINATIN G MATERIAL OF WHATSOEVER NATURE WAS FOUND IN RESPECT OF SHOP BOOKING ADVANCES OF RS.2,84,50,000.00 RECORDED BY THE APPELLANT IN HIS RE GULAR BOOKS OF ACCOUNTS MAINTAINED PRIOR TO THE DATE OF SEARCH AND T HE SAME BEING ACCEPTED AS GENUINE BY THE LEARNED ASSESSING OFFICER DU RING SCRUTINY ASSESSMENT PROCEEDINGS U/S.143(3) OF THE I.T. ACT, 1961, PRIOR TO THE DATE OF SEARCH, THE ADDITION OF RS.2,84,50,000.00 MAD E BY THE LEARNED ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT FRAMED U/S.143( 3) R.W.S.153A OF THE I.T. ACT. 1961 IS BAD IN LAW, WITHO UT JURISDICTION AND HENCE THE SAME MAY PLEASE BE DELETED. 2. SINCE DURING THE COURSE OF SEARCH AND SEIZURE ACT ION CARRIED ON U/S.132 OF THE I.T. ACT, 1961 ON 11/02/2009 AT THE B USINESS AND RESIDENTIAL PREMISES OF THE APPELLANT, NO INCRIMINATIN G MATERIAL OF WHATSOEVER NATURE WAS FOUND IN RESPECT OF SHOP BOOKING ADVANCES OF RS.1,17,96,773.00 RECEIVED FROM M/S. BLUE PEARL PROPE RTIES PVT. LTD. (WHICH ADVANCES WERE TRANSFERRED TO SALES ACCOUNT DURI NG THE YEAR ENDED 31/03/2007) RECORDED BY THE APPELLANT IN HIS R EGULAR BOOKS OF ACCOUNTS MAINTAINED PRIOR TO THE DATE OF SEARCH, THE ADDITION OF RS.1,17,96,773.00 MADE BY THE LEARNED ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT FRAMED U/S.143(3) R.W.S.153A OF THE I .T. ACT. 1961 IS BAD IN LAW, WITHOUT JURISDICTION AND HENCE THE SAME MAY PLEASE BE DELETED. 31. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE MENTIONED ADDITIONAL GROUNDS ARE PURELY LEGAL GROUNDS A ND FOR ADJUDICATION OF THE SAME NO FRESH INVESTIGATION OF FACTS ARE NECESSARY 18 ITA NOS.312 & 313/PN/2013 AND THE ADDITIONAL GROUNDS CAN BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. RELYING ON VARIOUS DECISIONS INCLUDING T HE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NTPC LTD . VS. CIT REPORTED IN 229 ITR 383, THE DECISION IN THE CASE OF JUTE CORPORATION OF INDIA REPORTED IN 187 ITR 688 AND THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY COMPANY R EPORTED IN 199 ITR 351 HE SUBMITTED THAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE SHOULD BE ADMITTED FOR ADJUDICATION. 32. AFTER HEARING BOTH THE SIDES, THE ADDITIONAL GROUNDS R AISED BY THE ASSESSEE ARE ADMITTED FOR ADJUDICATION. 33. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE 7 9 OF THE PAPER BOOK, WHICH IS THE SEIZED DOCUMENT FOUND DURING THE COURSE OF SEARCH AND WHICH CONTAINED THE FIGURE OF RS.2,31,00,000/- BEING CASH DEPOSITED AGAINST BOOKING SUBMITTED THAT THE SAID P APER DOES NOT BEAR ANY DATE. THEREFORE, IT IS ONLY A DUMB DOCUMEN T. REFERRING TO THE PAGES 71 TO 77 OF THE PAPER BOOK THE LD. COUNS EL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE STATE MENT RECORDED U/S.132(4) AND DREW THE ATTENTION OF THE BENCH TO QUEST IONS 7 AND 8 PUT BY THE SEARCH PARTY WHICH READ AS UNDER Q.7. ON PAGE NO.2 OF BUNDLE NO.1, THERE IS A RECEIP T OF RS.160 LAKHS. THERE IS ALSO A RECEIPT OF RS.1,85,00,000/-. PLEASE EX PLAIN THE REASONS FOR THE RECEIPTS AND CLARIFY WHETHER TAX HAS BEEN PAI D ON THESE RECEIPTS. ANS. THERE ARE RECEIPTS ON ACCOUNT OF SALE OF DEVELOPM ENT RIGHT. I AM NOT SURE WHETHER TAXES HAVE BEEN PAID ON THESE RECEIP TS. I WILL HAVE TO CONSULT MY CONSULTANT TO PRECISELY ANSWER WHETHER THE I NCOME HAS BEEN OFFERED TO TAX OR NOT. Q.8. FROM PAGE NO.2, IT ALSO APPEARS THAT CASH OF RS.2, 31,00,000/- HAS BEEN DEPOSITED AGAINST BOOKING. PLEASE FURNISH THE LIST FROM WHOM THE CASH HAS BEEN RECEIVED. ANS. CASH RECEIVED HAS BEEN ACCOUNTED FOR IN THE BOOKS. RIGHT NOW I DO NOT HAVE THE LIST OF PERSONS FROM WHOM CASH HAS BEEN RECEIVED. I SHALL FURNISH THE SAME WITHIN A COUPLE OF DAYS. 19 ITA NOS.312 & 313/PN/2013 34. HE SUBMITTED THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH AND TILL TODAY THE AMOU NTS ARE OUTSTANDING. REFERRING TO PAGE 34 OF THE PAPER BOOK TH E LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO TH E BALANCE SHEET AS ON 31-03-2007 WHERE AN AMOUNT OF RS.10,10,000/- HAS BEEN SHOWN AGAINST BOOKING OF KAKADE PLAZA AND ANOTHER AMOUN T OF RS.2,74,40,000/- IS SHOWN AGAINST BOOKING OF PROPOSED SCHEM E 106/109, KOTHRUD UNDER THE HEAD CURRENT LIABILITIES. REFE RRING PAGE 59 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE LIST OF SUCH CREDITORS WHO HAD GIVEN SUCH BOOKING ADVANCE FOR THE PROPOSED SCHEME 106/109, KOTHRUD. HE SUBMITTED THAT T HE AO HAS NEITHER QUESTIONED THE PURCHASERS NOR ANY ENQUIRY WAS CONDUCT ED BY THE AO. THE ASSESSEE HAS OFFERED THE SALE PRICE AND PAID THE TAX ON THE PROFIT. REFERRING TO PAGE 31 OF THE ORDER OF THE CIT(A ) THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENC H TO THE FOLLOWING SUBMISSION BEFORE THE CIT(A) : THE APPELLANT WISH TO DRAW YOUR KIND ATTENTION TO T HE FACT THAT, DURING THE F.Y.2006/07 RELEVANT TO A.Y.2007/08 THE APPELLA NT HAS TRANSFERRED/ACCOUNTS THE SALES OF RS.1,19,18,773/- INSPIT E OF THE ACTUAL SALES CONSIDERATION OF RS.1,41,05,000/-. THUS THE APPE LLANT HAS SHOWN SHORT SALES RECEIPTS OF RS.21,83,227/-. THEREFORE THE A PPELLANT HEREBY VOLUNTARILY DECLARED THE AMOUNT OF RS.21,83,227/- (I .E. RS.1,41,05,000/- LESS RS.1,19,18,773/- AS A ADDITIONAL UNDISCLOSED INCOME FROM SALE OF SHOPS. 35. HE ACCORDINGLY SUBMITTED THAT IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WARE HOUSING CORPORATION (SUPRA) AND MURALI AGRO PRODUCTS LTD. (SUPRA) THE AO COULD NOT HAVE MADE ANY ADDITION U/S.68 SINCE NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 36. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A) AND HIS SUBMISSIONS FOR A.Y. 2006-07. 20 ITA NOS.312 & 313/PN/2013 37. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE COPY OF THE AS SESSMENT ORDER WE FIND THE AO NOWHERE HAS MENTIONED THAT ANY INC RIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH IN RES PECT OF ADVANCE OF RS.1,03,61,773/- RECEIVED FROM BLUE PEARL PROPER TIES PVT. LTD. OR THE ADVANCE FOR BOOKING AGAINST SALE OF FLATS AMOUN TING TO RS.2,84,50,000/-. THE BASIS OF ADDITION MADE BY THE AO IS THE POST SEARCH ENQUIRY IN RESPECT OF M/S. BLUE PEARL PROPERTIES P VT. LTD. SIMILARLY, THE ADDITION OF RS.2,84,50,000/- IS ON THE BASIS OF T HE FIGURE APPEARING IN THE BALANCE SHEET WHICH ACCORDING TO T HE AO THE ASSESSEE COULD NOT SUBSTANTIATE. THUS WE FIND THE 2 ADD ITIONAL GROUNDS RAISED BY THE ASSESSEE FOR THE IMPUGNED ASSESS MENT YEAR ARE IDENTICAL TO THE ADDITIONAL GROUND RAISED IN ITA NO.312 /PN/2013 FOR A.Y. 2006-07. WE HAVE ALREADY DECIDED THE ISSUE AND T HE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN RESTO RED TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE SAME AFRESH IN A CCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEARING HEARD TO THE ASSESSEE. FOLLOWING THE SAME REASONING THE ABOVE 2 ADDIT IONAL GROUNDS RAISED BY THE ASSESSEE ARE ALSO RESTORED TO T HE FILE OF THE AO FOR HIS ADJUDICATION IN THE LIGHT OF THE DIRECTIONS GIVEN IN IT A NO.312/PN/2013. SINCE THE ASSESSEE DID NOT MAKE ANY A RGUMENT FOR THE GROUNDS OF APPEAL NO.1 & 2 AND CONCENTRATED ONL Y ON THE LEGAL GROUND, THE ABOVE 2 GROUNDS ARE DISMISSED. 38. SO FAR AS GROUND OF APPEAL NO.3 BY THE ASSESSEE RELA TES TO CHARGING OF INTEREST U/S.234B AND 234C OF THE I.T. ACT. 38. AFTER HEARING BOTH THE SIDES WE ARE OF THE CONSIDER ED OPINION THAT CHARGING OF INTEREST U/S.234 B AND 234C ARE MANDAT ORY AND 21 ITA NOS.312 & 313/PN/2013 CONSEQUENTIAL IN NATURE. ACCORDINGLY, THIS GROUND BY THE ASSESSEE IS DISMISSED. 39. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30-11-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 30 TH NOVEMBER, 2015. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT (A) CENTRAL, PUNE 4. 5. 6. CIT CENTRAL, PUNE ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE