ACIT Central Circle 2, Coimbatore V. Green Home Landscape Pvt. Ltd., Coimbatore

ITA 3180/CHNY/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6225 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 25-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Corroborative evidences; Revised return; Documents seized; Set aside
• Section: 153A; 13; 22

Judgement Text

आयकर अपील सं./ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 िनधा रण वष /Assessment Years: 2009-10, 2010-11, 2014-15 & 2015-16 The Asst. Commissioner- of Income Tax, Central Circle-2, Income Tax Building, Race Course Road, Coimbatore-641 018. v. M/s.Green Home- Landscape Pvt. Ltd., 2 nd Floor, Whites Building, D.B.Road, R.S.Puram Post, Coimbatore-641 002. [PAN: AABCG 1166 H] (अपीलाथ /Appellant) ( थ /Respondent) Department by : Dr.S.Palani Kumar, CIT Assessee by : Mr.S.Sridhar, Adv. सुनवाई की तारीख/Date of Hearing : 28.06.2022 घोषणा की तारीख /Date of Pronouncement : 17.08.2022 आदेश / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: These four appeals filed by the Revenue are directed against separate, but identical orders of the Commissioner of Income Tax (Appeals)-18, Chennai, dated 07.09.2017 and pertains to assessment years 2009-10, 2010-11, 2014-15 & 2015-16 respectively. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order. आयकर अपीलीय अिधकरण, ’डी’ !ायपीठ, चे$ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI ी महावीर िसंह, माननीय उपा , एवं 'ी जी. मंजूनाथा, , माननीय लेखा सद) के सम BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 2 :: 2. The Revenue has, more or less, raised common grounds of appeal for all the assessment years. Therefore, for the sake of brevity, grounds of appeal filed for the AY 2009-10, are re-produced as under: 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Id. CIT (A) erred in deleting the addition of Rs.1,10,07,636/- made in the assessment towards On-money received by the assessee for the AY 2009-10 in the assessee's case. 2.1. The ld.CIT(A) having relied on the decision of Hon'ble ITAT Special Bench Mumbai in the case of All Cargo Global Logistics Ltd. Vs DCIT (2012) 137 ITD 287 (Mum) (SB) erred in not appreciating that the facts of the present case are different in that, in the present assessee's case, there was no completed assessment either u/s.143(3) or 147 of the IT Act. 2.2. The ld. CIT(A) erred in not following the decision of Hon'ble Kerala High Court in the case of CIT, Thrissur Vs St. Francis Clay Decor Tiles (2016) 385 ITR 624 and the decision of the Hon'ble Karnataka High court in ITA No.38/2014 dated 25.07.2014 in the case of M/s.Canara Housing Development Company vs DCIT, Central Circle-1(1), Bangalore. 2.3. The Id. CIT(A) erred in holding that addition in assessment u/s.153A of the IT Act 1961 can be made only on the basis of incriminating documents seized when as per section 153A of the IT Act, the Assessing officer is required to assess the total income of the assessee for each assessment year falling within the six assessment years, immediately preceding the previous year, in which search was conducted. 3. The Id. CIT (A) erred in deleting the addition of Rs.47,51,327/- made in the assessment towards disallowance made u/s.40a(il)for including FBT payment in the opening Work-in¬progress, which is not an allowable expenditure, for the AY 2009- 10 in the assessee's case. 4. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. RELIEF CLAIMED IN APPEAL The order of the learned CIT (Appeals) may be set aside and that of the Assessing Officer be restored. 3. The brief facts of the case are that the assessee company is engaged in the business of real estate development, filed its return of income for the ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 3 :: AYs 2009-10 & 2010-11 on 18.08.2010 and 18.04.2011 respectively. A search and seizure operations u/s.132(1) of the Act, was carried out in the case of the assessee on 17.03.2015. During the course of search, details regarding project wise plot sold, extent of plot are found and seized vide Annexure ANN/VN/GH/LS/S-2 (Pages 140-157) and Page 157 is an abstract containing actual consideration received together with registered value in respect of Welsh Annexure Project. The details of actual value received, registered value and on-money claim to have been received is tabulated in Para No.2.4 of assessment order and relevant details are as under: 2.4 During the course of search on the assessee's premises, details regarding the project wise plot sold, extent of plot are found and seized vide Annexure ANNNN/GH/LS/S-2 (Pages 140-157) Page 157 is an abstract containing actual consideration received together with Registered value in respect of Welsh Annexure project. The on money received is as follows: Actual value received Rs. 12,53,41,263 Registered value Rs. 8,53,62,600 ------------------ On money received Rs. 3,99,78,663 ------------------ Similarly, in the project 'Western Welsh', the on money received is as follows: Actual value received (As per Pages 84-119 of Annexure ANN/ NIGH/LS/S-2) Rs. 10,84,60,200 Registered value Rs. 3,73,73,300 ------------------ On money received Rs. 710,86.900 ------------------ Total on money received is Rs.11,10,65,563/-. Out of the on money received of Rs.11, 10,65,563/-. ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 4 :: 4. During the course of search proceedings, the assessee was called upon to explain and furnish details of on-money received for the AYs 2009- 10 to 2015-16 and in response, the assessee vide letter dated 25.03.2015 submitted that project-wise details, plots sold and actual amount received, registered value, and on-money received. The assessee further contended that total consideration received towards sale of plots has been divided into two parts and value shown in the registered document has been treated as sale consideration and excess consideration over and above registered value has been treated as land development charges and accounted in the books of accounts of the assessee as income for the relevant assessment years. For better understanding, the details furnished by the assessee regarding consideration received for sale of plots, registered value and excess consideration (on-money) is tabulated as under: Sl. No Project Total Plots Plots Sold Actual Amount received Registered value On-money received (A) (B) (A-B) 1. W.W.Phase - I & II 91 23403782 23247282 156500 2. WW Annexe 177 33452000 25388600 8063400 3. WW Annexe Ph-II 218 114254200 39055800 75198400 4. Rock Fort, Salem 323 78766350 59695371 19070979 5. Golden Castle 80 9654600 7057100 2597500 TOTAL 25,95,30,932 15,44,44,153 10,50,86,779 The assessee vide his submissions made on 07.12.2016 and 14.12.2016, again given the details of on money receipts for various financial years which are as under: ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 5 :: FINANCIAL YEAR LAND DEVELOPMENT CHARGES ACCOUNTED AS INCOME 2008-09 1, 10,07,636 2009-10 1,24,44, 759 2010-11 60,13,855 2011-12 - 2012-13 - 2013-14 6,27,36,740 2014-15 10,07,241 TOTAL 9,32,10,231 and WESTERN WELSH PHASE-I & PHASE-II FINANCIAL YEAR WESTERN WELSH ANNEXE ROCK FORT SALEM TOTAL 2008-09 11,007,636.00 --11,007,636.00 2009-10 - -12,444,759.00 12,444,759.00 2010-11 - ' -6,013,865.00 6,013,865.00 2011-12 -:--- 2012-13 - --- 2013-14 3,466,790.00 59,269,950.00 -62,736,740.00 2014-15 1,007,241.00 --1,007,241.00 TOTAL 15,481,667.0 0 59,269,950.00 18,458,624.00 93,210,241.00 5. Consequent to search proceedings, notice u/s.153A of the Act, was issued and in response, the assessee had filed its return of income on 10.09.2016 for the AYs 2009-10 to 2014-15. The case has been taken up for scrutiny and during the course of assessment proceedings, the AO called upon the assessee to explain on-money received towards sale of plots and also justify accounting such income in the books of accounts and corresponding expenditure incurred for land development charges. The assessee has submitted details and argued that so called on-money receipt has been accounted in the books of accounts as land development charges ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 6 :: for respective assessment years. The AO, however, was not satisfied with the explanation furnished by the assessee and according to the AO, although, the assessee accounted difference between total consideration received and consideration shown in the registered document as income in the books of accounts for the relevant period, but could not submit evidences in respect of expenditure incurred towards land development charges amounting to Rs.11.69 Crs. debited into P & L A/c and thus, rejected the arguments of the assessee and made additions towards purported on-money received for sale of plots for each assessment year starting from AY 2009-10 to 2015-16. The relevant findings of the AO are as under: While stating that the same were accounted as development charges in the profit and loss account. However, the assessee could not establish the facts that the differences between the Registered value and actual receipts are amounting to Rs. 10,50,86,779/- is accounted in the Books of account. Also the assessee could not submit the evidences in respect of expenditure amounting to Rs.11,69,25,142/- debited to profit and loss account. Hence, even if the stand of the assessee is that all the on-money received is accounted as development charges received in their accounts, for want of supporting evidences for the various expenditures claimed in the P&L account as mentioned above, the additions to the total income are made as under. Thus, for the on money receipts amounting to Rs.10,50,86,779/- is apportioned between AYs 2009-10 to 2015-16 as under and assessed accordingly. S.No. AY Addition 1. 2009-10 1,10,07,636 2. 2010-11 1,60,07,723 3. 2011-12 60,13,855 4. 2012-13 - 5. 2013-14 - 6. 2014-15 7,10,40,324 7. 2015-16 10,17,241 Total 10,50,86, 779 ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 7 :: 6. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has filed detailed Written Submissions on the issue, which has been reproduced at Para No.15 on pages 10-23 of the order of the Ld.CIT(A). The sum and substance of the arguments of the assessee before the Ld.CIT(A) are that the purported on-money receipt claimed by the AO has been already accounted in the books of accounts for respective assessment years under the head ‘land development charges’ and thus, the question of undisclosed income towards on-money received for sale of plots, does not arise. The assessee further contended that the assessee did not collect any on-money, but it is in the contention of the Department that from the FYs 2009-10 to 2014-15, the assessee has received on-money amounting to Rs.10.51 Crs. and the same has been escaped assessment, but facts remains that it has not received any on-money. However, total consideration fixed for sale of plots has been divided into two parts, as per which, one part pertains to sale of land and the same has been accounted as income from sale of plots and the second part has been treated as land development charges and the same has been accounted as land development charges for respective assessment years. Further, so called incriminating material relied upon by the AO is nothing, but copies of Sale Deed executed for plots sold by the assessee and the same has already been considered in the regular books of accounts and thus, the same cannot be considered as incriminating material. ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 8 :: 7. The Ld.CIT(A) after considering relevant submissions of the assessee and also taken note of the findings of the AO came to the conclusion that the AO is completely erred in making addition towards on-money received towards sale of plots, even though, the assessee already accounted said consideration which is over and above the registered value of plots as land development charges for respective assessment years without there being any incriminating material which suggest undisclosed income. The Ld.CIT(A) had discussed the issue in light of decision of ITAT Mumbai Special Bench in case of All Cargo Global Logistics Ltd. v. DCIT reported in [2012] 137 ITD 287 (Mumbai) (SB), wherein, it was held that where the assessments are completed and no assessment is pending as on the date of search, no addition can be made in the absence of incriminating material found as a result of search. The Ld.CIT(A) had also taken support from the decision of Jai Steel (India) v. ACIT reported in 88 DTR (Raj). The relevant findings of the Ld.CIT(A) are as under: 16.1 On-money receipt (A.Yrs.2009-10 to 2011-12 & A.Yrs.2014-15 to 2015-16). 16.2. During the course of search on the appellant company's premises, details regarding the project wise plot sold, extent of plot etc., were found and seized vide Annexures. As per the contents of the Appraisal Report, the total receipts in respect of five projects viz., W.W.Phase-I & II, WW Annexe, WW Annexe Ph-II, Rock Fort, Salem, Golden Castle is Rs.25,95,30,932/- but whereas the Registered Value is Rs.15,44,44,153/- and hence, the AO treated the difference amount of Rs.10,50,86,779/- as on-money received. 16.3. During the course of appellate proceedings, the AR claimed that, the development charges have been wrongly termed as "on-money" by the Assessing Officer. The Assessing Officer on estimated basis had apportioned the sum of development charges as "on money received" and spread across five Asst. years and added to the Total Income. It was further stated that, the conclusion of the AO is entirely erroneous and contrary to the facts of case and the said addition is without any basis. ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 9 :: 16.4. Further, the AR vehemently argued that, in the Profit & Loss Account, the development charges had been shown separately for each Asst. Year. But on the contrary, the Assessing Officer had apportioned the development charges for five Asst. Years by wrongly terming it as "on-money". The Assessing Officer has not pin pointed the deficiencies in the books of accounts. In the above blatant observation, evidences are not supported for the expenses do not stand the test of scrutiny and the said addition is without any basis. 16.5. Further, the AR argued that, the appellant had collected only development charges which he had shown, along with the sale consideration in the seized materials and nothing incriminating is found on account of search and had further placed reliance on the following case laws to strengthen his argument:- a) ABS Sanjay Vs Acit -Jurisdictional Madras ITAT (/ITA Nos.1691, 1692 & 1693 (Mds)/2013) d) Jai Steel {India) v. Assistant Commissioner of Income Tax (2013) 88 DTR (Raj) e) All Cargo Global Logistics Ltd. v. Deputy Commissioner of Income Tax reported in(2012) 137 ITD 287 (Mumbai) (SB). 16.6. The argument of the AR has a force in it. The Assessing Officer has merely followed the finding of the Appraisal Report and added the on-money received of Rs.10,50,86,779/- and has not traversed into the aspect of investigating the claims of the appellant by examining the books of accounts to verify whether the so-called "on-money" or "development charges" has already been included as "Receipts" and credited to the P&L A/c. Further, the AO had not compared the Audited Financials accompanying the revised Return of Income filed in response to notice u/s 153A with that of the Audited Financials filed along with the original Return to check the claims made that, the on-money is already accounted for the purpose of Income- tax. When the so-called "on money" or "development charges" has already been included as "Receipts" and credited to the P&L A/c and when such development charges have been duly accounted for in the books of accounts and offered for assessment, the addition is unwarranted. 16.07. Further, the AR vide his written submissions stated that, both the Sale consideration mentioned in the Sale deed and extra money received has been duly accounted for in the books of accounts and offered for Income. The year wise breakup of Revenue offered was also furnished before me. Green Home Landscape Private Ltd. Details of income booked from the FY 2007-08 to 2014-15 Financial Year Plot Sales Land Development Charges Sales & Development Charges Total Income offered 2008-2009 13,73,58,959 1,10,07,636 - 14,83,66,595 2009-2010 3,84,28,765 1,24,44,759 - 5,08,73,524 2010-2011 3,61,22,490 60,13,855 - 4,21,36,345 2011-2012 23,75,960 - - 23,75,960 2012-2013 - - - - 2013-2014 4,38,52,600 6,27,36,740 5,67,01,980 16,32,91,320 2014-2015 23,59,500 10,07,241 - 33,66,741 Grand Total 26,04,98,274 9,32,10,231 5,67,01,980 41,04,10,485 ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 10 :: 16.8. On perusal of the above, I am of the considered view that, when the so-called "on money" or "development charges" have already been accounted for by crediting the same to the P&L A/c and offered for taxation, the addition made on account of "on money receipts" and apportioning the same on estimate basis for five assessment years is unwarranted. 16.9. Further, even if we go with the findings of the Assessing Officer, when the "on-money receipt" (according to the appellant "development charges") have already been duly accounted for in the regular books of accounts and offered for assessment, it is completely wrong on the part of the AO to jump into a conclusion that the "development charges" are only "on money receipts" collected outside the books and should be taxed separately. The conclusion of the AO that the "development charges" are "on money receipts" collected outside the books do not form any basis. 16.10. Thus, it can be seen that, the on-money received from the sale of sites was already offered in the Return of income and the so-called "on money receipt" are nothing collected outside the books. It forms part of the regular books which had already been offered in the Return of Income. This "on-money" receipt is already credited to the P&L A/c which was verified and certified by the Auditors. It is an audited financials. Hence there is no reason to disbelieve the same. No incriminating material or evidence was found in the course of search. 16.11. Further, as per the decision of the Special Bench of the IT AT Mumbai in the case of All Cargo Global Logistics Ltd. v. DCIT [2012] 137 ITD 287 [Mum] (SB) wherein it is held that, where the assessments are completed and no assessment is pending at the time of assessment u/s 153A, reassessment can be made only if incriminating materials are collected in the course of search and the items included in the earlier AYs cannot be re-considered through re-assessment. The co-ordinate bench of the Tribunal in the case of A.B.S.Sanjay Vs. ACIT (supra) has followed the decision in the case of All cargo Global Logistics Ltd., Vs. DCIT (Supra), and the judgment of the Hon'ble Rajasthan High Court in the case of Jai Steel (India) Vs. ACIT reported as 88 DTR(Raj) 1 and deleted the additions made on similar grounds. 16.12. The Hon'ble High Courts and different benches of the Tribunal have been consistently taking a view that in case nothing incriminating is found on account of search of requisition, the question of re-assessment of the concluded assessment does not arise. Now, it is a well settled law that re-assessment of the concluded assessment is permitted in assessment u/s 153A only if incriminating materials are found in the course of search. 16.13. Hence, the addition made on account of on-money receipts without any back up of materials or incriminating documents seized for the Asst. Years 2009-10, 2010-11, 2011-12, 2014-15 & 2015-16 amounting to Rs.1,10,07,636/-, Rs.1,60,07,723/-, Rs.60,13,855, Rs.7,10,40,324/- and Rs.10,17,241/-stands deleted. This ground is allowed. 8. The Ld.DR submitted that the Ld.CIT(A) erred in deleting additions made towards on-money received for sale of plots by relying upon the decision of ITAT Special Bench Mumbai in case of All Cargo Global Logistics Ltd. (supra) without appreciating the fact that the facts of the present case ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 11 :: are entirely different in as much as in the case before us, there is an incriminating material which suggest on-money received towards sale of plots. The Ld.DR further submitted that this is a clear cut case of suppression of on-money receipts and in this regard, the Department has found evidences in the form of Excel Sheet, which contains total consideration received for sale of plots and value shown in the registered document and on-money received for sale of plots. Although, the assessee claims to have accounted amount received over and above the registered value as land development charges, but the AO noticed that the assessee company had not substantiated the expenses claimed to have been incurred for land development charges and thus, the same has been treated as on-money and made additions. The Ld.CIT(A) without appreciating the above facts, simply deleted the additions made by the AO. 9. The Ld.AR, on the other hand, supporting the order of the Ld.CIT(A), submitted that except a tabular chart showing document number and date, extent of land sold, registered value and actual consideration received, nothing was found, which indicate receipt of on-money towards sale of plots. Although, the AO termed difference between actual consideration received and value shown in registered document as on-money, but facts remains that the differential consideration has been treated as land development charges and accounted under the head ‘land development charges’ for respective assessment years. In fact, the AO never disputed the fact that the assessee has accounted differential consideration as ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 12 :: income in the books of accounts for relevant assessment years. However, made additions only on the ground that the assessee could not substantiate the expenses debited into P & L A/c under the head ‘land development charges’ without appreciating the fact that when the assessee has assessed/accounted income in the books of accounts and claimed various expenditure, the AO cannot discard expenditure claimed by the assessee and made additions only towards income. He further submitted that it is a well settled principle of law by the decision of various courts including the decision of the Hon’ble Supreme Court in the case of Pr.CIT v. Meeta Gutgutia Prop. M/s.Ferns N Petals [2018] 257 Taxman 441 (SC) that in absence of any incriminating material found as a result of search, no additions could be made in the assessments pursuant to search operation, where the assessments have been completed /unabated as on the date of search. In this case, the search took place on 17.03.2015 and as on the date of search assessment for the AYs 2009-10 & 2010-11 are unabated/concluded as on the date of search and thus, no additions can be made towards on-money in the absence of any incriminating material. 10. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The facts with regard to the impugned dispute are that a search proceedings u/s.132 of the Act, was carried out on 17.03.2015 in the business premise of the assessee. During the course of search, details regarding project-wise plots sold, extent of plot found & seized and as per said document, actual ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 13 :: consideration received together with registered value in respect of each project was recorded. The AO has worked out on-money receipt of Rs.11,10,65,563/-. During the course of search, the assessee was called upon to explain the document and in response, the assessee submitted that the purported on-money receipt towards sale of plots is nothing but, land development charges received from the customers and the same has been accounted in the present case for relevant assessment years. The AO, in fact, admitted the fact that the differential consideration (on-money) has been accounted in the books of accounts for respective assessment years. However, made further addition towards on-money only on the ground that the assessee could not explain expenses debited into P & L A/c for land development with necessary evidences. Except this, there is no findings from the AO with regard to on-money received by the assessee outside the books of accounts for respective assessment years. Further, the so called incriminating material relied upon by the AO is nothing, but the copies of Sale Deed executed for sale of plots to various parties and the same has been tabulated in Excel Sheet with details of buyers, extent of land sold and amount received by the assessee. The said document does not speak about on-money receipt for sale of plots. However, the AO in his own understanding inferred that difference between actual amount received and registered value is nothing, but on-money received towards sale of plots. 11. We have given our thoughtful consideration to the reasons given by the AO to make additions towards on-money on the basis of purported ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 14 :: incriminating material found during the course of search and we ourselves do not subscribe to the reasons given by the AO for the simple reason that the so called document cannot be called as incriminating material which suggest undisclosed income not accounted in the regular books of accounts for relevant assessment years. Further, said document does not show any light on on-money received towards sale of plots. In fact, it contains data only with regard to the details of plots sold and actual amount received from the customers. The assessee has explained the document before us, and during the course of search and even during the course of assessment proceedings. As per the assessee, sale consideration received for sale of plots has been divided into two parts i.e. 1) amount shown in registered deed has been accounted as income from plots sold and 2) consideration received over and above the registered value has been accounted as land development charges. The assessee has filed details of plots sold for each of the assessment year, actual amount received and value shown in registered document with reference to its books of accounts and proved that total amount received from the customers, has been accounted for in the books of accounts for respective assessment years. In fact, the AO had admitted the fact that the assessee had accounted total consideration received towards sale of plots. However, rejected the explanation furnished by the assessee only for the reason that the assessee could not substantiate expenses incurred for land development charges debited into P & L A/c with necessary evidences. Therefore, he has made additions towards ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 15 :: differential consideration as on-money for respective assessment years. We find that the AO grossly erred in making further additions towards differential consideration as on-money, even though, the assessee had accounted said difference in total value received towards plot sales and value shown in registered document as income for respective assessment years. Therefore, once the assessee has proved the so-called differential consideration has already been accounted in the books of accounts for respective assessment years, then the question of making further addition towards very same consideration as on-money does not arise. If at all, the AO is not satisfied with the expenditure incurred by the assessee against land development charges and assessee has not able to file necessary evidences, he can very well disallow the expenses, which is not supported by necessary evidences, but for not filing necessary evidences for expenses, he cannot treat income of the assessee as undisclosed income, which is not accounted in the regular books of accounts for relevant assessment years. Therefore, in our considered view, the AO is completely erred in making addition towards on-money for the AYs 2009-10 to 2015- 16, even though, the so called incriminating material document does not show any light on on-money received towards sale of plots. 12. Coming back to another aspect of the issue. The assessee contended that the assessment for the AYs 2009-10 & 2010-11 are unabated/concluded as on the date of search, because time limit for issuance of notice u/s.143(2) of the Act, was expired before the date of ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 16 :: search on 17.03.2015. Further, if the assessment is unabated as on the date of search, then no addition could be made unless there is an incriminating material found as a result of search, we suggest escapement of income. We find that search took place on 17.03.2015 and as on the date of search, assessment for the AYs 2009-10 & 2010-11 are unabated/concluded. It is a well settled principle of law by the decision of the Hon’ble Supreme Court in the case of Pr.CIT v. Meeta Gutgutia Prop. M/s.Ferns N Petals (supra), that in the absence of incriminating material qua each assessment year, no addition can be made in the assessment pursuant to search action u/s.132 of the Act, if there is no incriminating material found as a result of search, we suggest escapement of income. This legal principle is supported by the decision of the Hon’ble Bombay High Court in the case of CIT v. Continental Warehousing Corporation (Nhava Seva) Ltd. [2015] 374 ITR 645 (Bom.) where, a similar view has been expressed by the Hon’ble Bombay High Court, thus, in the absence of incriminating material, no addition can be made if the assessment for those assessment years are unabated/concluded as on the date of search. The ITAT Mumbai Special Bench in the case of All Cargo Global Logistics Ltd. v. DCIT [2012] 137 ITD 287 (Mum.) had considered an identical issue and held that where the assessments are completed and no assessment is pending at the time of search assessment u/s.153A of the Act, no additions can be made in the absence of incriminating material found as a result of search. In this case, there is no dispute with regard to the fact that there ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 17 :: is no incriminating material which suggest undisclosed income in respect of on-money received towards sale of plots. Although, the AO referred certain documents and considered them as incriminating material, but the so called document is nothing, but copies of Sale Deed executed for sale of plots which are part of regular books of accounts of the assessee for the relevant assessment years. Further, said document does not show any light on on- money received from sale of plots. Therefore, we are of the considered view that said document cannot be considered as incriminating material, which suggest undisclosed income earned outside books of accounts of the assessee for the relevant assessment years. 13. In this view of the matter and considering the facts and circumstances and also by following various judicial precedents, we are of the considered view that the AO is erred in making additions towards on- money received towards sale of plots as undisclosed income for the AYs 2009-10 to 2015-16, even though, there is no difference between actual consideration received for sale of plots and income accounted in the books of accounts for the relevant assessment years. The Ld.CIT(A) after considering relevant facts has rightly deleted additions made by the AO and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject grounds taken by the Revenue for the AYs 2009-10 to 2015-16. 14. The next issue that came up for our consideration from assessment year 2009-10 of the Revenue’s appeal is addition towards Fringe Benefit ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 18 :: Tax (in short “FBT") payment amounting to Rs.47,51,327/- included in opening work-in-progress. The AO has made addition of Rs.47,51,327/- towards FBT payments which is included in opening work-in-progress on the ground that the FBT cannot be allowed as deduction u/s.40(a)(ii) of the Act. It was the explanation of the assessee that additions made by the AO is not based on any incriminating material found as a result of search and thus, in the absence of any incriminating material, no additions can be made when the assessment has been concluded/unabated as on the date of search. 15. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. Admittedly, the assessment for the AY 2009-10 unabated as on the date of search on 17.03.2015, because, time limit for issuance of notice u/s.143(2) of the Act was expired on 31.03.2010. It is also an admitted fact that the additions made towards disallowance of FBT included/in opening work-in-progress is not supported by any incriminating material found as a result of search. Therefore, in our considered view, additions made by the AO towards FBT cannot be sustained, because, in the absence of any incriminating material, no addition can be made in the assessments framed u/s.153A of the Act, if there is no incriminating material, which suggest undisclosed income, if such assessments are unabated as on the date of search. Since, assessments for the AY 2009-10, is unabated as on the date of search, ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 19 :: additions made towards disallowance of FBT cannot be sustained, because, such addition is not based on any incriminating material found as a result of search. The Ld.CIT(A) after considering relevant facts, has rightly deleted the additions made by the AO and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the Revenue. 16. The next issue that came up for our consideration from Ground Nos.3 to 3.2 of the Revenue’s appeal for the AY 2010-11 is additions towards unexplained investment in purchase of property amounting to Rs.2,52,68,319/-. During the course of assessment proceedings, the AO noticed that the assessee had purchased properties from Mr.R.Kathirvelusamy & others for a consideration of Rs.55 lakhs. As per the agreement to sale dated 07.03.2009, agreed consideration for purchase of property was at Rs.3,07,68,319/- whereas, the Sale Deed was registered for a value of Rs.55 lakhs. During the course of search proceedings, a Consensus Deed dated 07.03.2009 was found and seized from the Office premise of M/s.Green Home Landscape Pvt. Ltd. The said deed was entered between Mr.E.Anandan, Managing Director of the assessee company and Mr.R.Kathirvelusamy & 9 others for outright purchase of house site project at Udayam Garden, Annur, Coimbatore, total consideration of Rs.3,07,68,319/. The seller, Mr.R.Kathirvelusamy & others, deposed during the post search proceedings that they have received agreed sale consideration of Rs.3,07,68,319/ by way of cash and cheque ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 20 :: as detailed in the Consensus Deed. The AO has made addition towards difference between agreed consideration and registered value amounting to Rs.2,52,68,319/- as undisclosed investment in the immovable property for the AY 2010-11. On appeal, the Ld.CIT(A) allowed partial relief to the assessee, where he has estimated profit of Rs.50 lakhs from the transaction and directed the AO to sustain addition to the extent of Rs.50 lakhs and delete the additions made towards undisclosed income on account of purchase of property amounting to Rs.2,52,68,319/-. 17. The Ld.DR submitted that the Ld.CIT(A) erred in deleting additions made towards undisclosed investment in purchase of property without appreciating the fact that the document found during the course of search in the form of consensus document clearly establishing payment in cash over and above the registered value shown in document and the same has been confirmed by the buyer and the seller. The Ld.DR further referring to document found during the course of search submitted that as per the said document, the assessee has agreed to purchase total plots for a consideration of Rs.3,07,68,319/- and has also paid a sum of Rs.2.50 crs. in cash. The Ld.CIT(A) without appreciating the above facts deleted the additions made by the AO and estimated adhoc profit of Rs.50 lakhs from the project without assigning any reasons. 18. The Ld.AR for the assessee, on the other hand, submitted that Mr.R.Kathirvelusamy and others had given a power of attorney to the ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 21 :: assessee for sale of 117 sites at Annur, Coimbatore, for a consideration of Rs.3,07,68,319/-. In this regard, an agreement was entered into between Me.E.Anandan, Managing Director of the assessee and Mr.R.Kathirvelusamy & 9 others. Out of agreed consideration of Rs.3,07,68,319/-, a sum of Rs.55 lakhs was paid as advance, which has been routed through banking channel. For the balance amount of Rs.2,52,68,319/- 120 days’ time was sought for to settle the amount which clearly express in the consensus agreement itself. Further, the balance amount is agreed to settle as and when sale of 117 sites took place. Since, immediate settlement cannot be made, an arrangement was made between the assessee and the owners and as per the said arrangement, 10 post- dated cheques each Rs.25 lakhs totaling Rs.2.5 Crs. bearing Cheque Nos.526541 to 526550 drawn at Karur Vysya Bank Ltd. R.S.Puram Branch, Coimbatore, has been issued. However, as and when the assessee settles amount, a post-dated cheques should be returned back to the assessee. The Ld.CIT(A) after considering relevant facts has rightly estimated profit from the project and deleted the addition made towards differential amount and thus, their orders should be upheld. 19. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The AO has made addition towards difference in purchase of property amounting to Rs.2,52,68,319/- on the basis of document being consensus deed entered into between Mr.E.Anandan, Managing Director of the assessee company ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 22 :: and Mr.R.Kathirvelusamy and 9 others towards purchase of 117 residential plots. According to the AO, the assessee had agreed to purchase a property for a consideration of Rs.3,07,68,319/- and paid the agreed amount. However, only an amount of Rs.55 lakhs paid through proper banking channel and thus, the difference amount has been added as undisclosed income. We have gone through reasons given by the AO in light of arguments advanced by both the parties and also perused reasons given by the Ld.CIT(A) to estimate profit of Rs.50 lakhs from the project and deleting the additions made by the AO towards undisclosed investment made in immovable property and we find that the AO has basically misread the consensus document as sale agreement between the parties and came to conclusion that the assessee has agreed to purchase property for a consideration of Rs.3,07,68,319/- and accounted only Rs.55 lakhs paid in cheque. But facts remains that as observed by the Ld.CIT(A), the consensus document entered into between the assessee and sellers speaks about marketing of 117 residential plots developed by the seller, Mr.R.Kathirvelusamy and others. It is further observed by the Ld.CIT(A) that the assessee has agreed to sell 117 plots and had taken power of attorney from the sellers. The assessee had also entered into Consensus Deed specifying the terms and conditions for sale of 117 plots. As per the said document, more particularly, at Page No.5 of the Consensus agreement, it was clearly specified that the assessee had only paid a sum of Rs.55 lakhs in cheque and the balance amount has been agreed to pay ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 23 :: within 120 days from the date of agreement. Further, as per the said document, the assessee had issued post-dated cheque worth Rs.2.5 Crs (Rs.25 lakhs x 10) as a security for balance amount. However, agreed to pay balance amount as and when the plots are sold by the assessee. From the above, it is very clear that the assessee acted as a mediator/broker for marketing the property and for this purpose entered into an arrangement with the sellers. Therefore, the Ld.CIT(A) came to the conclusion that the assessee might have earned a profit of Rs.50 lakhs from the project and thus, made additions of Rs.50 lakhs towards property transactions with Mr.R.Kathirvelusamy and others and directed the AO to delete addition towards differential amount of Rs.2,52,68,319/- as undisclosed investment in immovable property. We find that the actual findings recorded by the Ld.CIT(A) is uncontroverted by the Revenue with any evidences, except stating that the assessee has paid on-money over and above agreed consideration in the agreement. Therefore, we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to delete additions towards undisclosed investment in immovable property and thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the Revenue. 20. The next issue that came up for our consideration from Ground Nos.3 to 3.1 of the Revenue’s appeal for the AY 2014-15 is deletion of additions towards excess expenditure claimed in the P & L A/c amounting to Rs.2,72,61,453/-. During the course of assessment proceedings, the AO ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 24 :: noticed that in the P & L A/c, the assessee has debited an amount of Rs.13,87,17643/- under the head ‘cost of materials consumed’ and said details have been given in Note No.15 to financial statement for the year ended 31.03.2014. From the above Note No.15, direct expenses have been worked out at Rs.8,54,84,036/- and the details of such expenses are given in Schedule-15 enclosed with P & L A/c. On perusal of Schedule-15, it was noticed that the assessee had taken opening work-in-progress at Rs.8,22,66,889/-, whereas closing work-in-progress as on 31.03.2013 was at Rs.5,50,05,435/-. Therefore, the AO was of the opinion that there is a difference of Rs.2,72,61,454/- in the opening work-in-progress considered by the assessee when it compares to closing work-in-progress as on 31.03.2013 and thus, made addition of Rs.2,72,61,454/-. On appeal, the Ld.CIT(A) deleted the addition made by the AO by holding that the assessee has reconciled the difference between opening work-in-progress and closing work-in-progress with reference to financial statement filed for the relevant assessment year. 21. The Ld.DR submitted that the Ld.CIT(A) erred in deleting additions made by the AO towards difference in work-in-progress claimed by the assessee, even though, the financial statement filed for the relevant assessment year clearly shows that the assessee has adopted higher work- in-progress when compared to closing work-in-progress shown as on 31.03.2013. ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 25 :: 22. The Ld.AR for the assessee, on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee has reconciled the figures with reference to re-grouping of various expenses, as per which, closing work- in-progress has been disclosed under the head ‘other current assets’ and if you consider closing work-in-progress and capital work-in-progress, there is no difference between opening work-in-progress as on 01.04.2013 and closing work-in-progress as on 31.03.2013. 23. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The AO noticed that there is difference between opening work-in-progress as on 01.04.2013 and closing work-in-progress as on 31.03.2013. According to the AO, the assessee had adopted opening work-in-progress at Rs.8,22,66,889/-, whereas the closing work-in-progress as on 31.03.2013 as per financial statement filed by the assessee was at Rs.5,50,05,435/-. If you go by financial statement filed by the assessee for the relevant assessment years, there is no doubt, there is a difference in opening work- in-progress adopted by the assessee, when compared to closing work-in- progress. But, it was the explanation of the assessee that work-in-progress account has been credited under the head ‘current assets’ and inventories have been shown in Note No.7 at Rs.3,08,54,975/-. If you consider closing work-in-progress of Rs.5,50,05,435/- as shown in Note No.12, under the head ‘other current assets’ and inventories shown in Note No.7 amounting ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 26 :: to Rs.3,08,54,975/- the total inventory (work-in-progress works out to Rs.8,58,60,410/-). However, the assessee had adopted opening work-in- progress at Rs.8,22,66,889/-. In our considered view, still there is a difference of Rs.35,95,521/- which needs to be reconciled. Although, the assessee claims to have reconciled difference worked out by the AO under the head ‘work-in-progress’, but facts are not clear. Therefore, we are of the considered view that the matter needs verification from the AO in light of reconciliation filed by the assessee to explain difference between opening work-in-progress and closing work-in-progress including inventories shown under Note No.7 to balance sheet. Hence, we set aside the issue for limited purpose of verification with regard to reconciliation filed by the assessee and direct the AO to verify the issue. In case, the assessee could not explain difference of Rs.35,95,521/-, then the AO is directed to restrict addition to the extent of Rs.35,95,521/- and delete balance addition. 24. In the result, the appeals filed by the Revenue for the AYs 2009-10, 2010-11, 2014-15 are dismissed and appeal filed by the Revenue for the AY 2015-16 is partly allowed for statistical purposes. Order pronounced on the 17 th day of August, 2022, in Chennai. Sd/- (महावीर िसंह) (MAHAVIR SINGH) उपा /VICE PRESIDENT Sd/- (जी. मंजूनाथा) ( G. MANJUNATHA) लेखा सद)/ACCOUNTANT MEMBER ITA Nos.3177, 3178, 3180 & 3181/Chny/2017 :: 27 :: चे$ई/Chennai, िदनांक/Dated: 17 th August, 2022. TLN आदेश की ितिलिप अ*ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु+/CIT 2. थ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु+ (अपील)/CIT(A) 6. गाड फाईल/GF