DCIT CC 44, MUMBAI V. MEREDIAN CONSTRUCTION P. LTD, MUMBAI

ITA 3222/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100804 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Keywords: Search and seizure; Loose papers; Document seized; Additional evidence; Reasonable cause; Documents seized
• Section: 143(3); 131; 132

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3222, 3224 TO 3226/MUM/2011 ASSESSMENT YEARS: 2001-02 TO 2004-05 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-44, ROOM NO.656,6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD MUMBAI-400020 / VS. MEREDIAN CONSTRUCTION PVT. LTD. 112, MAKER CHAMBER-III, 223, NARIMAN POINT, MUMBAI-400021 ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO. AAACM4144Q ITA NOS.3228 TO 3230/MUM/2011 ASSESSMENT YEARS: 2005-06 TO 2007-08 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-44, ROOM NO.656,6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD MUMBAI-400020 / VS. MEREDIAN CONSTRUCTION PVT. LTD. 112, MAKER CHAMBER-III, 223, NARIMAN POINT, MUMBAI-400021 ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.AAACM4144Q MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 2 CO NOS. 103 TO 109/MUM/2012 (ARISING OUT OF ITA NOS.3222, 3224 TO 3226 AND 3228 TO 3230/MUM/2011) ASSESSMENT YEARS: 2001-02 TO 2007-08 MEREDIAN CONSTRUCTION PVT. LTD. 112, MAKER CHAMBER-III, 223, NARIMAN POINT, MUMBAI-400021 / VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-44, ROOM NO.656,6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) P.A. NO.AAACM4144Q ITA NOS.4691 TO 4693/MUM/2011 ASSESSMENT YEARS: 2005-06 TO 2007-08 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-44, ROOM NO.656,6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD MUMBAI-400020 / VS. MANAV BUILDERS PVT. LTD. 2 ND FLOOR, GOVERDHAN BUILDING NO.II, 12/14, PAREKH STREET, PRARTHANA SAMAJ, MUMBAI-400004 ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.AADCM8664Q !'# $ / ASSESSEE BY SHRI VIJAY MEHTA / REVENUE BY SHRI N.P. SINGH CIT-DR % & $ ' / DATE OF HEARING : 19/08/2015 & $ ' / DATE OF ORDER: 28/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF APPEALS WHICH PERTAINS TO DIFFERENT A SSESSEE, WHEREIN, THE REVENUE IS AGGRIEVED BY THE DIFFERENT ORDERS DATED 31/01/2011(MERIDIAN CONSTRUCTION PVT. LTD.) A ND MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 3 31/03/2011 (MANAV BUILDERS PVT. LTD.) ON IDENTICAL GROUNDS. IN THE CASE OF MANAV BUILDERS PVT. LTD., ALL THE TH REE APPEALS ARE BY THE REVENUE FOR A.Y. 2005-06 TO 2007-08, WHE REAS, IN THE CASE OF MERIDIAN CONSTRUCTION PVT. LTD., THE RE VENUE IS AGGRIEVED FOR A.Y. 2001-02 TO 2007-08 AND THE ASSES SEE HAS ALSO FILED CROSS OBJECTIONS. 2. FIRST, WE SHALL TAKE UP APPEALS IN THE CASE OF MERIDIAN CONSTRUCTION PVT. LTD.. DURING HEARING OF THESE APPEALS, WE HAVE HEARD, SHRI N.P. SINGH, LD. CIT-DR , AND SHRI VIJAY MEHTA, LD. COUNSEL FOR THE ASSESSEE, BOT H CONTENDED THAT APPEAL FOR A.Y. 2006-07 (ITA NO.3229 /MUM/ 2011) MAY BE TAKEN FIRST, BY FURTHER SUBMITTING THA T ISSUES IN THE IMPUGNED APPEALS ARE IDENTICAL, THEREFORE, WE T END TO DISPOSE OFF THIS APPEAL FIRST. 2.1. THE CRUX OF ARGUMENT ADVANCED BY SHRI N.P.SIN GH, LD. CIT-DR, IS THAT THE ASSESSEE IS A BUILDER/DEVEL OPER AND SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT DIF FERENT PLACES AT ROHAN GROUP ON 10/08/2006, WHEREIN, CERTA IN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE LD. CIT- DR, CONTENDED THAT THERE WERE CERTAIN OLD BUILDINGS , INHABITED BY TENANTS, WHEREIN, ASSESSEE CREATED BOG US TENANCY RIGHTS IN TWO APARTMENTS. IT WAS PLEADED T HAT ONE MR. HARISH MEHTA AND MS. JOSHI CHOULA ADMITTED THAT VERSION OF THE DEPARTMENT WHILE RECORDING THEIR STA TEMENTS AND FURTHER CERTAIN DOCUMENTS WERE RECOVERED FROM R ESIDENCE FROM WHICH THE ASSESSING OFFICER RIGHTLY DREW INFER ENCE THAT CASH WAS TAKEN IN OTHER CASES ALSO, ON THE BASIS OF WHICH, MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 4 ADDITION WAS MADE. OUR ATTENTION WAS INVITED TO PA GE 39 OF THE PAPER BOOK. IT WAS ASSERTED THAT WHILE GRANTIN G RELIEF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DISREGARDE D THE STATEMENTS RECORDED FROM AFOREMENTIONED TWO PERSONS . OUR ATTENTION WAS INVITED TO PAGES 45, 46 OF THE PAPER BOOK, WHEREIN, THE ASSESSEE OFFERED 23 CRORES AND PAGE 5 OF THE PAPER BOOK CONTAINING THE STATEMENT. IT WAS ALSO S UBMITTED THAT THE STATEMENT TENDERED BY MS. JOSHI WAS COMPLE TELY IGNORED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND MERELY RELIED UPON THE REMAND REPORT SENT BY THE AS SESSING OFFICER. THE CRUX OF ARGUMENT OF SHRI N.P. SINGH, L D. DR, IS THAT NUMBER OF TENANTS WERE INFLATED BY THE ASSESSE E FOR WHICH OUR RELIANCE WAS PLACED TO PAGE 9 (PARA 28) O F THE IMPUGNED ORDER. 2.2. ON THE OTHER HAND, THE LD. COUNSEL FOR THE AS SESSEE, SHRI VIJAY MEHTA, STRONGLY CONTROVERTED THE ARGUMEN TS ADVANCED BY LD. CIT-DR BY EXPLAINING THAT IN THE MO NTH OF NOVEMBER NOTICES WERE ISSUED TO THE CONCERNED PARTI ES AND THEY WERE CROSS EXAMINED BY THE ASSESSING OFFICER A ND EVEN IN THE REMAND REPORT SENT TO THE LD. COMMISSIONER O F INCOME TAX (APPEALS), THE ASSESSING OFFICER HIMSELF STATED THAT THESE PARTY DID NOT GIVE ANY ON MONEY TO ANYBODY, THUS, N O INFERENCE CAN BE DRAWN THAT ANY UNDER HAND MONEY WA S GIVEN TO THE ASSESSEE. OUR ATTENTION WAS DRAWN TO PAG 7 (PARA-9) OF THE ASSESSMENT ORDER. IT WAS ALSO PLEAD ED THAT IN MY REGULAR BOOKS OF ACCOUNT CANNOT BE DISCARDED BY FURTHER EXPLAINING THAT MR. MEHTA IN TURN SUB-LETTED TO FI VE PARTIES MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 5 AND RATHER I GAVE ALTERNATIVE ACCOMMODATION AND ALL THESE FACTS WERE CROSS VERIFIED BY THE ASSESSING OFFICER, THUS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RECORD ED FACTUAL FINDING BY ASSERTING THAT NO BOGUS TENANCY WAS CREATED. IT WAS EXPLAINED THAT THE ASSESSEE BECAME THE OWNER OF THE BUILDINGS IN 2001 AND THEREAFTER CONSTRUCTED . IT WAS BROUGHT TO OUR NOTICE THAT THE REPORT FROM MAHADA I S AFTER 2001 AND EVEN THE GOVERNMENT AGENCY (MAHADA) WILL N OT CONCEAL THE NUMBER OF TENANTS AND THERE IS ONLY POS SIBILITY THAT OLD TENANTS MIGHT HAVE GIVEN TENANCY RIGHTS TO OTHER PERSONS. A STRONG PLEA WAS RAISED THAT EVEN WITHOU T GETTING CONSENT FROM AT LEAST 70% OF THE TENANTS, NO CONSTR UCTION CAN BE MADE AND THUS, THE ASSESSEE REQUESTED THE OC CUPANT TO GET NEW RIGHTS FOR VACATING THE BUILDINGS. AGRE EMENT WAS CLAIMED TO BE ENTERED WITH FIVE PARTIES BY WAY OF R EGISTERED DOCUMENTS, THUS, THE ASSESSEE NEITHER CREATED ANY B OGUS TENANCY RIGHT NOR IT WAS BENEFICIAL TO THE ASSESSEE . IT WAS PASSIONATELY EXPLAINED BY THE LD. COUNSEL THAT EVEN MAHADA CERTIFIED MORE TENANTS THAN CLAIMED BY THE ASSESSEE AS WELL AS BY THE ASSESSING OFFICER. IT WAS PLEADED THAT E VEN THE ASSESSING OFFICER MENTIONED INCORRECT FIGURES FOR W HICH OUR ATTENTION WAS INVITED TO PAGE 11 OF THE ASSESSMENT ORDER. THE CRUX OF ARGUMENT IS THAT THE ASSESSING OFFICER JUST MADE THE ADDITION BY MULTIPLYING THE FIGURES. OUR ATTENTION WAS INVITED TO 10 TO 12 OF THE IMPUGNED ORDER. RELIANCE WAS PLACED UPON THE DECISION OF THE TRIBUNAL (ITA NO.4735/MUM/2008) WHICH WAS AFFIRMED BY HONBLE JURISDICTIONAL HIGH COURT IN ITA NO.1196 OF 2011 (R .R. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 6 CHATURVEDI). SO FAR AS THE STATEMENT OF SHRI HARISH MEHTA IS CONCERNED IT WAS EXPLAINED THAT THERE WERE DIFFEREN T PARTNERS/PERSONS IN THE DIFFERENT GROUP, THUS, NO A DDITION CAN BE MADE ON THE STATEMENT OF ANY PERSON UNLESS A ND UNTIL IT IS CORROBORATED WITH EFFECTS. IT WAS ALSO PLEAD ED THAT THE STATEMENT OF MS. CHOULA JOSHI WAS NEVER GIVEN TO TH E ASSESSEE AND MS. CHOULA JOSHI WAS AGAIN EXAMINED PURSUANT TO REMAND OF THE CASE. BEFORE COMING TO AN Y CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVA NT PORTION AND FACTUAL FINDING RECORDED BY THE LD. COM MISSIONER OF INCOME TAX (APPEALS) FOR READY REFERENCE AND ANA LYSIS:- 28. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT, COMMENTS OF THE A.O. ON THE REMAND REPORT AND THE VARIOUS JUDI CIAL PRONOUNCEMENTS CITED BY THE APPELLANT. IT IS EVIDEN T FROM THE COMMENTS OF THE ASSESSING OFFICER IN THE REMAND REP ORT THAT THE AREA MENTIONED IN THE SEIZED DOCUMENTS AND THE ACTUAL AR EA GIVEN TO THE PERSONS CONCERNED DIFFERS. 29. FURTHER, IN MY VIEW, NO ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CAN BE MADE DUE TO THE FACT THAT AO IN. HIS R EMAND REPORT HAS CLEARLY STATED THAT THE AREA MENTIONED IN THE S EIZED DOCUMENT & THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED, DIF FERS. HE CONFIRMED THAT THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED IS AS MENTIONED IN THEIR RESPECTIVE AGREEMENTS. ITS IS AL SO OBSERVED THAT MR. KAMLESH BAHETI, ONE OF THE FIVE PARTIES, IN RES PONSE TO NOTICE ISSUED U/ S. 131 STATED TO HAVE RECEIVED FLAT IN LI EU OF SURRENDER OF PROPERTY. HE ADMITTED, TO HAVE SUB TENANTED THE PRO PERTY TO FOUR OTHER PARTIES AND SPECIFICALLY STATED THAT HE HAS N OT RECEIVED OR PAID ANY MONEY. FURTHER, ON PERUSAL OF RESPONSE OF ALL T HE PARTIES TO WHOM NOTICES WERE ISSUED, IT IS OBSERVED THAT THEY HAVE RECEIVED FLATS UPON SURRENDER OF THE PROPERTY AND THEY HAVE ALSO STATED THAT THEY HAVE NOT PAID ANY MONEY TO THE APPELLANT. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 7 30. IT IS ALSO OBSERVED THAT AS PER THE NOTING IN T HE SEIZED PAPER, FLATS NO 2501 AND FLAT NO.2505 IS ALLOTTED TWO PART IES. HOWEVER, IT IS PERUSED THAT THE BUILDING SIDDHESH APARTMENT WAS CO NSTRUCTED ONLY UPTO 24 FLOORS. ON THE BASIS OF THE ABOVE, IT IS SE EN THAT THE NOTING MADE IN THE SEIZED MATERIAL PROVED TO BE INCORRECT, AND THUS, DOES NOT REPRESENT THE FACTUAL POSITION. IT IS OBSERVED THAT THE ENTIRE ADDITION IN THE PRESENT PROCEEDINGS HAS BEEN MADE B Y THE AO BASED ONLY ON THE SAID SEIZED MATERIAL, WHICH IS, NOW PRO VED TO BE, INCORRECT AND ERRONEOUS. 31. IT IS ALSO SEEN THAT THE FLATS ARE SOLD BY THE APPELLANT AT MARKET RATES. IT IS FURTHER OBSERVED THAT THERE IS NO MATE RIAL OR EVIDENCE ON RECORD TO PROVE THAT THE APPELLANT HAS RECEIVED ON MONEY ON THE SALES OF FREE FLATS OR TENANTS.' FURTHER, IT IS OBS ERVED THAT EXTRAPOLATION CANNOT BE APPLIED IN THE PRESENT CASE . IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS THERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, THE TENANTS ARE CERTIFIED BY MHADA , A GOVERNMENT AGENCY, THE SAME CANNOT BE DISAPPROVED BY ME UNLESS THERE IS ANY CONTRARY EVIDENCE. THEREFORE, AS NO OTHER EVIDENCE WERE FOUND INDICATION THAT THE APPELLANT HAD RECEIVED AN ON MO RE IN RESPECT OF FREE SALE FLATS TENANTS CERTIFIED BY MHADA., THE AD DITION ON ACCOUNT OF RECEIPT OF ON MONEY CANNOT BE MADE. 32. CONSIDERING THE AFOREMENTIONED FACTS, AND, ON E XAMINATION, IT IS OBSERVED THAT NO MATERIAL HAS BEEN FOUND INDICATING THAT THE APPELLANT HAS RECEIVED ON MONEY. ON GOING THROUGH T HE AGREEMENTS FILED BY THE APPELLANT, THE RESPONSE OF THE FIVE PA RTIES TO NOTICE U/ S. 131 ISSUED BY THE AO, AND THE COMMENTS MADE BY THE AO IN THE REMAND REPORT DATED 11.01.2011, IT IS OBSERVED THAT THESE FIVE PARTIES WERE ACTUALLY IN POSSESSION OF THE PROPERTY AND THE APPELLANT HAD TO GIVE THEM FLATS IN LIEU OF SURRENDER OF THE POSSESSION OF THE TENANCY RIGHTS/ PROPERTY. IT WAS FURTHER OBSERVED T HAT THE ENTIRE ADDITION IN THE ASSESSMENT WAS MADE ON THE BASIS OF THE LOOSE PAPER SEIZED FROM THE RESIDENCE OF CHAULA JOSHI, WHICH IS PERUSED TO BE ROUGH NOTING. IT IS OBSERVED THAT THE AREA MENTIONE D IN THE NOTING ON THE SEIZED PAPER DOES NOT TALLY WITH THE ACTUAL AREA ALLOTTED TO THOSE PARTIES AS PER THE AGREEMENT AND THE RESPONSE LETTERS TO NOTICE U/ S. 131. IN FACT, THE AO HAS CONCLUDED IN THE REM AND REPORT THAT THE NOTING ON THE SEIZED PAPER AND THE AGREEMENT DO ES NOT TALLY AND MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 8 FACTUALLY THE PARTIES HAVE RECEIVED AREA AS PER THE AGREEMENT ONLY. THUS, THE AGREEMENTS, COMMENTS IN THE REMAND REPORT , THE STATEMENTS RECORDED IN THE REMAND PROCEEDINGS, CORR OBORATES WITH THE SUBMISSIONS MADE BY THE APPELLANT. THEREFORE, A S THERE IS NOTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY BY THE AO CANNOT BE SUSTAINED. IN THE RESULT THE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. ACCORDINGLY, THE ADDITION OFRS. 1,40,39,036/- IS DE LETED. 45. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE CONTENTIONS OF THE AO. IT IS OBSERVED THAT THE AO HAS ERRED IN COUNTING THE NO. OF TENANTS. IT IS SEEN THAT THE TO TAL NO OF TENANTS IN THE SAID 3 BUILDINGS ARE 101 OUT OF WHICH THE TOTAL NO. OF TENANTS TO WHOM PERMANENT ALTERNATE ACCOMMODATION WAS PROVIDED WAS 97. IT IS FURTHER NOTED THAT THE SAME RECONCILES WITH T HE NO. OF TENANTS AS PER THE LIST CERTIFIED BY MHADA 46. IT IS EVIDENT THAT THE NAME OF M/S MEHTA TRADIN G COMPANY IS MENTIONED IN THE MHADA CERTIFIED LIST AND THE SAME IS NOT DISPUTED BY THE AO AS WELL. FURTHER THE FOUR PARTIES ARE THE SUB-TENANTS OF M/S. MEHTA TRADING COMPANY. ACCORDINGLY, THE APPELL ANT PROVIDED PERMANENT ALTERNATE ACCOMMODATION TO THESE PARTIES IN LIEU OF THE SUB-TENANCIES BY M/S. MEHTA TRADING COMPANY. THE SA ID FACT IS EVIDENT FORM THE STATEMENT RECORDED BY THE AO IN TH E COURSE OF REMAND. ALSO, IT IS CLEAR THE AO HAS ERRED IN COMPU TING THE TOTAL NO OF TENANTS. ACCORDINGLY, IT IS OBSERVED THAT THE AD DITION HAS BEEN MADE BY THE AO ON THE BASIS OF INCORRECT FACTS. THU S, IN PRINCIPLE SALE OF BOGUS TENANCIES CANNOT BE HAVE SAID TO BE MADE ON THE SAID CONTENTION OF THE A.O. 47. MORE SO, IT IS EVIDENT THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND UNDER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAULA JOSHI. AS ALREADY DISCUSSED IN PARA 20-23 AND 26-29 ABOVE, IT IS OBSERVED THAT THE NOTING ON THE SAID LOOSE PAPERS ARE INCORRECT AND DOES NOT REPRES ENT THE FACTUAL POSITION AND THUS HELD TO BE ROUGH NOTING. THEREFOR E, AS THERE IS NOTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON SALE OF FLATS TO BOGUS TENANCIES BY THE APPELLANT CANNOT BE SUSTAINED. IN THE RESULT, THE APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 9 2.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OB SERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND AN ALYZED, THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE COMPANY IS E NGAGED IN THE BUSINESS OF REDEVELOPMENT OF CESSED BUILDINGS B Y FOLLOWING PROJECT COMPLETION METHOD. DURING THE REL EVANT PERIOD, THE ASSESSEE COMPANY HAD THREE PROJECTS IN HAND I.E. RIDDHI SIDDHI APARTMENT, SIDDESH VILLA, SIDDESH APA RTMENT, WHICH WERE NEARING COMPLETION. ON 10/08/2006, A SE ARCH AND SEIZURE OPERATION WAS CARRIED OUT, ON ROHAN GRO UP OF COMPANIES, U/S 132 OF THE INCOME TAX ACT, 1961 (HER EINAFTER THE ACT) BY THE INVESTIGATION WING OF THE DEPARTMEN T. CONSEQUENTLY, NOTICE U/S 143A OF THE ACT WAS ISSUED TO THE ASSESSEE TO WHICH RETURN OF LOSS OF RS.1,54,71,811 WAS FILED ON 31/3/2008. THE LD. ASSESSING OFFICER MADE ADDIT ION OF RS.1,40,39,036/- (NET PROFIT ON ACCOUNT OF MONEY RE CEIPTS) , RS.5,44,32,840 (NET PROFIT ON SALE OF BOGUS TENANCY OF 22 FLAT IN SIDDESH APARTMENT) AND RS. 66,03,316/-(NET PROFI T ON SALE OF BOGUS TENANCY OF SHOP IN RIDDHI APARTMENT AN DFL AT IN SIDDHESH VILLA). 2.4. ON APPEAL, BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS), IT WAS CLAIMED BY THE ASSESSEE THAT PROJECT COMPLETION METHOD OF ACCOUNTING IS FOLLOWED BY THE ASSESSEE MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 10 AND THE PROFIT FROM THE PROJECT IS OFFERED FOR TAXA TION IN THE YEAR OF SUBSTANTIAL COMPLETION OF THE PROJECT, THER EFORE, IT WAS CLAIMED BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) THAT THE PROFIT FROM SIDDHESH APARTMENT WAS OFFERED IN FINANCIAL YEAR 2006-07 (A.Y. 2007-08), WHEREIN THE PROJECT WAS SUBSTANTIALLY COMPLETE. THE CLAIM OF THE ASSESS EE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS AL SO THAT REDEVELOPMENT WAS DONE UNDER RULE 33 (7) OF THE DEVELOPMENT CONTROL REGULATION OF BREHAN MUMBAI MUNICIPAL CORPORATION (BMC), WHICH PROVIDED PERMANE NT ALTERNATE ACCOMMODATION TO THE EXISTING TENANTS/OCC UPANTS IN LIEU OF WHICH THE DEVELOPER GET FREE SALE OF ARE A. IT IS ALSO NOTED THAT THE BEFORE THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) IT WAS CLAIMED BY THE ASSESSEE THAT THE C OPY OF SEIZED MATERIAL, ON THE BASIS OF WHICH ADDITIONS WE RE MADE, AND THE STATEMENT OF MS. CHAULA JOSHI WERE NOT PROV IDED TO THE ASSESSEE AND FURTHER THE ASSESSEE ALSO REQUESTE D TO CROSS EXAMINE VARIOUS PARTIES WHICH WERE REFUSED BY THE A SSESSING OFFICER. IT IS PERTINENT TO MENTION HERE THAT SEAR CH ACTION WAS ALSO CARRIED OUT AND THE RESIDENCE OF MS. CHAUL A JOSHI WHO WAS WORKING AS MARKETING/SALES EXECUTIVES WITH THE ASSESSEE, WHICH RESULTED INTO RECOVERY OF CERTAIN D OCUMENTS, WHICH WERE MARKED AS ANNEXURE 1 TO THE PANCHNAMA DA TED 10/08/2006, BROADLY THESE DOCUMENTS INDICATES THE D ETAILS OF VARIOUS PROJECTS, CARRIED OUT BY VARIOUS ENTITIE S OF THE GROUP ALONG WITH THE DETAILS OF SALE OF FLATS. WE NOTE THAT THE LD. ASSESSING OFFICER MADE THE ADDITION BROADLY ON THE BASIS OF SEIZED MATERIAL AND THE STATEMENT OF MS. CHAULA JOSHI. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 11 THE STAND OF THE DEPARTMENT IS THAT THE ASSESSEE RE CEIVED ON MONEY FROM FIVE PARTIES TO THE EXTENT OF 40%. THE LD. ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE A SSESSEE AS TO WHY THE AMOUNT OF 40% OF THE SALE RECEIPTS SHOUL D NOT BE TREATED AS SUPPRESSED SALES/ADDED TO THE TOTAL INCO ME. THE ASSESSEE DENIED HAVING RECEIVED ANY CASH FROM THE I MPUGNED FIVE PARTIES. HOWEVER, THE ASSESSING OFFICER MADE ADDITION ON PRESUMPTIVE BASIS AS GP OF 20% AS RECEIPT FROM ON M ONEY, THUS, ON THIS ACCOUNT THE INCOME WAS COMPUTED AT RS.1,40,39,039/-. BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS), THE SEIZED DOCUMENTS WERE CLAIMED TO BE DUMPED DOCUMENTS AND CLAIMED THAT EVEN IN THE STATE MENT OF MS. CHAULA JOHSI, THERE IS CLEAR CUT DENIAL OF C ASH COMPONENT/ON MONEY. IT IS PERTINENT TO MENTION HER E THAT THE TENANTS/OCCUPANTS CERTIFIED BY MHADA ARE MORE I N COMPARISON TO THE CLAIM OF THE ASSESSEE, THEREFORE, THE CONTENTION OF THE LD. DR AS WELL AS OF THE LD. ASSE SSING OFFICER THAT BOGUS TENANCY WAS CREATED IS NOT SUBSTANTIATE, BECAUSE THE MHADA IS NOT GOING TO GAIN ANYTHING BY PROVIDIN G LIST OF MORE NUMBER OF TENANTS. 2.5. WE FURTHER NOTE THAT CERTAIN ADDITIONAL EVIDE NCES WERE FILED BEFORE THE LD. COMMISSIONER OF INCOME TA X (APPEALS), WITH RESPECT TO ALLEGED FIVE PARTIES, TH EREFORE, THE ADDITIONAL EVIDENCE WAS REMANDED BACK TO THE FILE O F THE LD. ASSESSING OFFICER WITH A DIRECTION TO CHEQUE THE AC TUAL AREA ALLOTTED TO THIS FIVE PARTIES. THE ASSESSING OFFICE R CARRIED OUT VERIFICATION AND VIDE REMAND REPORT DATED 11/01/201 1 DID MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 12 NOT RAISE ANY OBJECTION TO THE ADMISSION OF ADDITI ONAL EVIDENCE AND RATHER VIDE REMAND REPORT (RECEIVED IN THE OFFICE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON 18/01/2011.) ANNEXED THE STATEMENT OF FIVE PARTIE S, THE EXTRACT OF WHICH HAS BEEN REPRODUCED IN PARA 22 (PA GE-7) OF THE IMPUGNED ORDER. THE CRUX OF THE REMAND REPORT AND THE STATEMENT IS THAT IN LIEU OF ALLOTTED FLAT, NO MONE Y WAS EVER TRANSACTED WITH ROHAN GROUP. IN THE REMAND REPORT, THE ASSESSING OFFICER DULY CONFIRMED THE ACTUAL AREA GI VEN TO THE CONCERNED PERSONS MATCHES WITH THE RESPECTIVE AGREE MENTS AND ONE MR. KAMLESH BAHETI, IN RESPONSE TO NOTICE I SSUED U/S 131 OF THE ACT SPECIFICALLY TENDERED THAT HE RE CEIVED FLAT IN LIEU OF SURRENDER AND HE SUB TENANTED THE PROPER TY TO FOUR OTHER PARTIES AND HE NEITHER RECEIVED NOR PAID ANY MONEY AND ALL THE FIVE PARTIES RECEIVED FLATS ON SURRENDER OF THEIR TENANCY/PROPERTY AND THE SPECIFICALLY TENDERED THAT THEY DID NOT PAY ANY MONEY TO THE ASSESSEE. THERE IS UNCONTR OVERTED FINDING IN PARA 30 OF THE IMPUGNED ORDER WITH RESPE CT TO NOTING IN THE SEIZED PAPERS FOR FLATS NO. 2501 AND 2505 ALLOTTED TO DIFFERENT PARTIES. 2.6. SO FAR AS, SALE OF FLATS IS CONCERNED, THERE IS UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT T HE ASSESSEE SOLD THE FLATS AT THE MARKET RATES AND THE RE WAS NO PROOF THAT ON MONEY WAS RECEIVED BY THE ASSESSEE ON SALE OF FLATS/FROM TENANTS, THUS, NO PRESUMPTION CAN BE DRA WN, IN THE ABSENCE OF ANY MATERIAL, THAT ANY UNDER HAND MO NEY TRANSACTED BETWEEN THE ASSESSEE AND THE TENANTS. A S MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 13 MENTIONED EARLIER THE TENANTS WERE CERTIFIED BY MHA DA, WHICH RATHER CONTAINS MORE TENANTS, THEREFORE, THE ALLEGATION OF CREATION OF BOGUS TENANCY IS NOT SUBSTANTIATED. NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. COM MISSIONER OF INCOME TAX (APPEALS) AND EVEN BEFORE THIS TRIBUN AL NO MATERIAL WAS PRODUCED AT ANY STAGE THAT THE ASSESSE E RECEIVED ON MONEY/UNDER HAND MONEY, THUS, MERELY, O N THE BASIS OF STATEMENT OF ONE OR TWO PERSON, THE ADDITI ON MADE ON PRESUMPTIVE BASIS CANNOT BE SUSTAINED. EVEN OTHERW ISE, PRESUMPTION CANNOT TAKE THE SHAPE OF EVIDENCE, HOWE VER IT STRONG MAY BE. IT IS ALSO NOTED THAT EVEN THE LD. ASSESSING OFFICER VIDE HIS REMAND REPORT DATED 11/01/2011 CATEGORICALLY STATED THAT THE IMPUGNED FIVE PARTIES WERE ACTUALLY GIVEN POSSESSION OF THE PROPERTY IN LIEU O F THE SURRENDER OF THE TENANCY RIGHTS. EVEN IN THE REMAND REPORT, IT HAS BEEN CONCLUDED THE BY ASSESSING OFFICER THAT TH E NOTING ON THE SEIZED PAPER AND THE AGREEMENT DOES NOT TALL Y AND RATHER THE PARTIES RECEIVED THE AREA AS PER THE AGR EEMENT, THUS, THE TOTALITY OF FACTS, CLEARLY INDICATES THAT THE ADDITION WAS MERELY MADE ON PRESUMPTIVE BASIS, WHICH CANNOT STAND ON ITS LEGS, THEREFORE, THE ADDITION OF RS.1,40,39, 036 WAS RIGHTLY DELETED, CONSEQUENTLY, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3. NOW, WE SHALL TAKE GROUND NO 2 & 3 WITH RESPECT TO DELETING THE ADDITION OF RS.66,03,316/- AND RS.5,44 ,32,840/- MADE ON ACCOUNT OF SALE CONSIDERATION OF SHOP NUMBE R 1A IN MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 14 RIDDHI, FLAT NUMBERS 82, 904 IN RIDDHI AND SIDDHI A ND 22 FLATS RESPECTIVELY. THE CRUX OF ARGUMENTS, ADVANCED BY LD. CIT-DR IS IDENTICAL TO THE GROUND RAISED AND BROADL Y AS WAS CANVASSED FOR THE AFORESAID GROUND BY CONTENDING TH AT THE ADDITION WAS RIGHTLY MADE WHICH WAS PURSUANT TO SEA RCH PROCEEDINGS BY CREATING BOGUS TENANCIES AND NONE OF THE ALLEGED TENANTS APPEARED IN RESPONSE TO SUMMONS ISS UED BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. ON GROUND NO.3, IDENTICAL ARGUMENT WAS ADVANCED BY LD. CIT-DR, WHEREAS, THE LD. COUNSEL FO R THE ASSESSEE STRONGLY DEFENDED THE CONCLUSION ARRIVED A T IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE T HAT BROADLY THE ADDITION WAS MADE BY THE ASSESSING OFFI CER ON THE PLEA OF CREATION OF BOGUS TENANCY RIGHTS. THE A SSESSEE DEVELOPED THE PROJECTS SIDDHESH APARTMENT BY CLUBBI NG ITS THREE OLD PROPERTIES NAMELY SEKSARIA BHAWAN, GOVARD HAN NIWAS AND MANEK HOUSE. THE WHOLE ADDITION MADE BY T HE LD. ASSESSING OFFICER IS THAT THE ASSESSEE MANIPULATED TENANCIES TO CREATE EXTRA FSI IN THE NAME OF BOGUS TENANTS AN D THUS, THE ASSESSING OFFICER COMPUTED THE TOTAL NUMBER OF 65 TENANTS IN ALL, WHEREAS, THE MHADA CERTIFIED 76 TEN ANTS. THE ASSESSEE ALLOTTED ALTERNATED ACCOMMODATION FREE OF COST 287 PARTIES, THUS, THE ASSESSING OFFICER OPINED THAT TH E ASSESSEE SOLD 22 FLATS UNDER THE GUISE OF BOGUS TENANCIES. HOWEVER, MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 15 WE NOTE THAT THE ASSESSING OFFICER HAS NOT IDENTIFI ED WHICH ARE THE BOGUS 22 TENANTS AND WHO ARE THE BOGUS TENA NTS TO WHOM THE AREA WAS SOLD BY APPLYING THE READY RECKNO R RATE IN ARRIVING AT THE UNACCOUNTED SALES. THE ASSESSING O FFICER MADE ADDITION OF RS.5,44,32,840/- AND MADE FURTHER ADDITION OF RS.66,03,316/- ON ACCOUNT OF SALE OF BOGUS TENAN CY WITH RESPECT TO SHOP NUMBER 1A ALLOTTED TO ONE LEELA HAN SRAJANI. WE HAVE PERUSED THE RECORD AND FOUND UNCONTROVERTED FINDING IN PARA 41 ONWARDS AND SUMMARIZED THE FACT WITH THE HELP OF FOLLOWING CHART:- PARTICULARS PER LANDLORD PER MHADA PER APPELLANT NO. OF TENANTS ASSESSING OFFICER ACTUAL ASSESSING OFFICER ACTUAL ASSESSING OFFICER ACTUAL SEKSARIA 28 37 49 47 GOVARDHAN- CESSED 37 31 41 36 GOVARDHAN NON-CESSED 8 8 7 MANEK 0 3 3 7 TOTAL 65 79 76 101 87 97 3.2. IT IS ALSO NOTED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS), WHILE COMING TO A PARTICULAR CONCLUS ION DULY ANALYZED THE REMAND REPORT OF THE ASSESSING OFFICER (DATED 10/01/2011) RECEIVED IN THE OFFICE OF THE LD. FIRST APPELLATE AUTHORITY ON 18/01/2011 ALONG WITH THE STATEMENT OF FIVE PARTIES, WHICH WERE TENDERED, PURSUANT TO NOTICES I SSUED TO THEM U/S 131 OF THE ACT. THE RELEVANT EXTRACT OF TH E REMAND REPORT IS AS UNDER:- IN THIS CONNECTION, IT IS CONFIRMED THAT THE AREA MENTIONED IN THE SEIZED DOCUMENT & THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED, DIFFERS. IT IS ALSO CONFI RMED THAT MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 16 THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED VIZ. (I) SHRI KAMLESH BAHETI, (II) SHRI RAMANLAL JAIN, (III) SHRI MAHENDRA JAIN (IV) SHRI SANJAY AGARWAL & (V) SHRI RA JIV AGARWAL, IS AS MENTIONED IN THEIR RESPECTIVE AGREEM ENTS MENTIONED IN THEIR RESPECTIVE AGREEMENTS SUBMITTED TO YOUR DURING THESE APPELLATE PROCEEDINGS BY THE ASSESSEE, THE DETAILS OF WHICH ARE SUMMARIZED BELOW FOR READY REFERENCE:- SR. NO. NAME OF THE TENANT AS PER SEIZED DOCUMENT AS PER AG REEMENT FLAT NO. AREA SQ. FT. FLAT NO. AREA SQ. FT. 1. KAMLESH BAHETI 2301 1450 1705 1802 1803 567.04 404.40 551.32 1522.76 2. RAMANLAL JAIN 2401 1450 1805 567.04 3. MAHENDRA JAIN 2101 906 1003 436.69 4. RASILABEN AJANI 2001 906 NOT FLAT SOLD/ALLOTED 5. SANJAY AGRAWAL 2501 1450 2005 567.04 6. RAJIV AGARWAL 2505 906 1505 566.83 23. ALONG WITH THE REMAND REPORT THE ASSESSING OFFI CER HAS ALSO ATTACHED THE RESPONSE OF THE FIVE PARTIES TO T HE NOTICE U/S 131 OF THE ACT. RELEVANT EXTRACT OF THE RESPONSE OF MR. KAMLESH BAHETI IS AS UNDER:- Q. 5 NATURE OF TRANSACTION WITH ROHAN DEVELOPERS:- I HAD 3 OFFICE AT MANEK HOUSE, OFFICE PREMISES NO.1 (405 SQ. FT.) NO.2(APPROX 550 SQ. FT.) NO-3(APPROX 550 SQ.FT.) IN LIEU OF SURRENDER OF THE SAID PREMISES ROAHN GROUP PROVIDED ME WITH THREE FLOAT OF APPROX SAME ARE IN SIDDHESH APARTMNE T. FLAT NO. 1705, 1802, 1803 OF APPROX ARE 550 400 550 ST. FT. RESPECTIVELY. I WOULD LIKE TO ADD THAT I HAD SUB-TENANTED THE PRE MISES IN MANEK HOUSE TO MAHENDRA JAIN, RAJEEV AGARWAL, SANJA Y AGARWAL, RAMANLAL LAIN AND I USED TO RECEIVE RENT I NCOME AGAINST IT. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 17 Q6. WHETHER ANY EXTRA MONEY WAS PAID/RECEIVED FOR S URRENDER OF TENANCY- I SIMPLY RECEIVED FLAT IN LIEU OF THE OCCUPIED PROP ERTY. NO MONEY WAS EITHER TAKEN OR GIVEN FOR SUCH SURRENDER OR VACANCY OF PROPERTY BY ME. ' 24. FURTHER, THE OTHER FOUR PARTIES VIZ. MAHENDRA J AIN, RAJEEV AGARWAL, SANJAY AGARWAL, RAMANLAL JAIN HAVE SUBMITT ED THEIR REPLY IN HINDI. THE ENGLISH TRANSLATION OF THE RELE VANT EXTRACT OF THE REPLY OF MR. RAJEEV AGARWAL (ONE OF THE ABOV E) IS AS UNDER: I HAVE BEEN ALLOTTED FLAT NO 1505 IN LIEU OF MY OC CUPANCY IN MANEK HOUSE. APART FROM THIS, I HAVE NOT ENTERED IN TO ANY MONETARY TRANSACTION WITH ROHAN GROUP. ' 25. IT IS PERUSED THAT ALL THE PARTIES HAVE GIVEN S IMILAR REPLY AND ADMITTED THAT THEY HAVE RECEIVED FLATS IN LIEU OF SURRENDER OF THE PROPERTY. THE SAID PARTIES HAVE STATED THAT THEY HAVE NOT PAID/RECEIVED ANY MONEY/FROM THE APPELLANT. 3.3. IT IS WORTH MENTIONING HERE IS THAT THE ASSES SING OFFICER SENT THE REMAND REPORT WHICH RATHER SUPPORT S THE CLAIM OF THE ASSESSEE, WHEREAS, THE DEPARTMENT IS FILING APPEAL AGAINST THE IMPUGNED ORDERS WITHOUT BRINGING ANY POSITIVE MATERIAL ON RECORD. HOW THE REVENUE IS AGG RIEVED IS NOT KNOWN? HOWEVER, WITHOUT GOING INTO MUCH DELIBER ATION, IT IS NOT DISPUTED THAT MHADA MADE A DETAILED SURVEY/CERTIFICATION PROCESS INCLUDING VERIFICATION OF RELEVANT DOCUMENTS, ON-SITE VERIFICATION, MEASUREMENT AND BE ING THE MONITORING BODY OF THE GOVERNMENT ACTUALLY CERTIFIE D THE MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 18 UNITS AT 101 AGAINST THE CLAIM OF 97 MADE BY THE AS SESSEE. IN SUPPORT OF ITS CLAIM, THE ASSESSEE PLACED RELIANCE UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS R.R . CHATURVEDI AND ORS. (ITA NO.4735/MUM/2008) ORDER DA TED 04/06/2010 WHICH WAS AFFIRMED BY HONBLE JURISDICTI ONAL IN ITA NO.1196 OF 2011 (BOMBAY), WE FIND THAT THE CLAI M OF THE ASSESSEE IS SQUARELY COVERED BY THE RATIO LAID DOWN IN THE AFORESAID ORDER. BECAUSE THE ADDITION WAS MADE MERE LY ON THE BASIS OF CERTAIN STATEMENTS AND WITHOUT CORROBO RATING THE SAME WITH THE MATERIAL WHEREAS, AS MENTIONED EARLIE R, AS PER THE MHADA THE ACTUAL TENANTS WERE 101, WHEREAS, AS PER THE ASSESSEE, THEY WERE ONLY 97, THUS, THERE IS NO QUES TION OF BOGUS TENANCY, MORE SPECIFICALLY WHEN ALTERNATE ACCOMMODATION WAS PROVIDED TO, CLAIMED, 97 PERSONS IN LIEU OF SURRENDER OF THEIR TENANCY RIGHTS. SO FAR AS, S EIZURE OF INCRIMINATING MATERIAL FROM THE RESIDENCE OF MS. CH OLA JOSHI IS CONCERNED, WE HAVE ALREADY DELIBERATED UPON THE SAME IN PRECEDING PARA OF THIS ORDER. IT IS ALSO WORTH MEN TIONING THAT WHILE DELIBERATING UPON THE ISSUE, THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAS ALREADY PLACED RELIANCE UP ON VARIOUS JUDICIAL PRONOUNCEMENTS, THEREFORE, THE SAM E ARE NOT BEING REPEATED, BEING, MATTER OF RECORD AND MAY BE CONSIDERED TO BE LOOKED UPON/CONSIDERED BY US. THU S, ON THIS GROUND, WE FIND NO MERIT, IN THE APPEAL OF THE REVENUE, CONSEQUENTLY, WE AFFIRM THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 19 4. NOW, WE SHALL TAKE UP ITA NO.3222/MUM/2011, 3224/MUM/2011, 3225/MUM/2011, 3226/MUM/2011, 3228/MUM/2011 AND 3230/MUM/2011, WHEREIN, IDENTICAL GROUNDS HAVE BEEN RAISED. BEFORE COMING TO ANY CONC LUSION WE ARE REPRODUCING HEREUNDER THE APPEAL WISE FACTUA L FINDING RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APP EALS) FOR READY REFERENCE AND ANALYSIS:- 15. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. IT IS EVIDENT FR OM THE ASSESSMENT ORDER, THAT THE AO HAS REFERRED AND RELI ED UPON THE FINDINGS FOR THE AY 2006-07. IT IS SEEN THAT THE AO HAS NOT RAISED ANY ADDITIONAL CONTENTION APART FROM THOSE R AISED FOR THE ASSESSMENT YEAR 2006-07. IT IS ALSO OBSERVED TH AT THE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDE RATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAUL A JOSHI AND THE CONTENTIONS RAISED IN ASSESSMENT YEAR 2006-07. MORE SO, THE AO HAS NOT GOT ANY EVIDENCE WITH RESPECT TO SAL E OF BOGUS TENANCIES FOR THE CURRENT YEAR. 16. IT IS OBSERVED THAT ALL THE CONTENTIONS AND THE FINDINGS RELIED UPON BY THE AO HAD ARISEN FOR CONSIDERATION BEFORE ME IN THE APPELLANTS OWN CASE FOR AY 2006-07 VIDE ORDE R DATED 31/01/2011 THE SAME WAS DECIDED IN FAVOUR OF THE AP PELLANT FOR THE FOLLOWING REASONS GIVEN IN PARA NOS. 45 - 4 7 OF THE SAID ORDER:- A. THE AO ERRED IN COUNTING THE NO. OF TENANTS. THE TOTAL NO OF TENANTS IN THE 3 BUILDINGS WERE 101 OUT OF WH ICH THE TOTAL NO. OF TENANTS TO WHOM PERMANENT ALTERNAT E ACCOMMODATION WAS PROVIDED WAS 97. B. THE FOUR PARTIES ARE THE SUB-TENANTS OF M/S. MEH TA TRADING COMPANY AND THE APPELLANT PROVIDED PERMANENT ALTERNATE ACCOMMODATION TO THESE PARTIES IN LIEU OF THE SUB-TENANCIES. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 20 C. THE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAULA JOSHI. THE NOTINGS ON THE SAID LOOSE PAPERS ARE INCORRECT AND DOES NOT REPRESENT THE FAC TUAL POSITION AND THUS HELD TO BE ROUGH NOTINGS. D. THE ADDITION IN RESPECT OF SALE OF BOGUS TENANCI ES HAS BEEN MADE BY THE AO ON THE BASIS OF INCORRECT FACTS . 17. IT IS ALSO OBSERVED THAT THE APPELLANT HAS PROV IDED THIS PARTY WITH PERMANENT ALTERNATE ACCOMMODATION AS PER THE PROVISIONS OF RULE 33(7) OF THE BMC RULES. ON PERUS AL OF THE VARIOUS MATERIAL EVIDENCES AVAILABLE ON RECORD LIKE THE AGREEMENT COPIES, ELECTRICITY BILLS, TELEPHONE BILL S, ETC, IT IS OBSERVED THAT THE PROPERTY AGAINST WHICH FLAT OF SI DDHI APARTMENT WAS ALLOTTED WAS POSSESSED BY MRS. JAYABE N KANOBER. IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS THERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, ON PERU SAL OF THE ELECTRICITY BILLS, DECLARATION BY THE SCHOOL, ETC, THE TENANCY OF THE SAID PARTY SINCE LONG BACK IS ESTABLISHED. THES E BILLS ARE ISSUED BY GOVERNMENT COMPANIES AND AUTHORITIES I.E. MAHANAGAR TELEPHONE NIGAM LTD. THE SAME CANNOT BE DISAPPROVED UNLESS THERE IS ANY CONTRARY EVIDENCE. THEREFORE, AS NO OTHER EVIDENCE WERE FOUND INDICATING THAT THE APPELLANT HAD RECEIVED ANY ON MONEY, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CANNOT BE MADE. 18. CONSIDERING THE AFOREMENTIONED FACTS AND IN ABS ENCE OF ANYTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON SALE OF FLATS TO BOGUS TENANCIES BY THE APPELLAN T CANNOT BE SUSTAINED. IN THE RESULT THE APPEAL IS ALLOWED IN F AVOUR OF THE APPELLANT. XXXXXXXXXXX 22. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS OBSERVED THAT VARIO US TRIBUNALS HAVE ACCEPTED THE PROJECT COMPLETION METHOD AS AN APPROPRIATE METHOD OF COMPUTING INCOME. THE TRIBUNA LS HAVE ALSO ACCEPTED THE TREATMENT BY THE ASSESSEE TO OFFE R INCOME TO MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 21 TAX IN THE YEAR WHEN THE PROJECT WAS COMPLETED IN T HE FOLLOWING DECISIONS: I. IN CHAMPION CONSTRUCTION COMPANY 5 ITD 495 (1983) II. M/S UNIQUE ENTERPRISES VS ITO [201O-TIOL-737-ITAT- MUM III. IN PRESTIGE ESTATE PROJECTS (P) LTD VS DCIT (2010) 33 DTR 514 IV. CIT V BILAHARI INVESTMENT (P) LIMITED (299 ITR 1) V. DCIT V OTIS ELEVATOR CO. INDIA LTD. (284 ITR 173) VI. CITY ASHOKBHAI CHIMANBHAI (56 ITR 42) VII. T. K. INTERNATIONAL LTD. V ACIT (275 ITR 101) VIII. ASIA RESORTS LIMITED (96 TTJ 909) 23. ON PERUSAL OF THE DECISIONS CITED ABOVE, IT IS OBSERVED THAT IT HAS BEEN HELD THAT THE METHOD OF ACCOUNTING WHICH HAS BEEN CONSISTENTLY FO LLOWED BY THE COMPANY AND WHICH IS IN ACCORDANCE WITH THE ACC OUNTING STANDARDS ISSUED BY CBDT AND LCAL, THE SAME CANNOT BE QUESTIONED, UNLESS THERE IS A FINDING BY THE REVENU E THAT THE METHOD ADOPTED BY THE TAXPAYER RESULTS IN DISTORTIO N OF PROFITS. THEREFORE, I AM OF THE OPINION THAT SINCE THE APPEL LANT HAS CONSISTENTLY FOLLOWED PROJECT COMPLETION METHOD THE INCOME OF THE APPELLANT OUGHT TO HAVE BEEN CONSIDERED ON THE SAME BASIS. ACCORDINGLY, THE SAID GROUND OF APPEAL STANDS ALLOW ED IN FAVOUR OF THE APPELLANT. ITA NO.3224-2011 16. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. IT IS EVIDENT FROM THE ASS ESSMENT ORDER, THAT THE AO HAS REFERRED AND RELIED UPON THE FINDINGS FOR THE AY 2006-07. IT IS SEEN THAT THE AO HAS NOT RAIS ED ANY ADDITIONAL CONTENTION APART FROM THOSE RAISED FOR T HE ASSESSMENT YEAR 2006-07. IT IS ALSO OBSERVED THAT T HE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDE RATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAUL A JOSHI AND THE CONTENTIONS RAISED IN ASSESSMENT YEAR 2006-07. MORE SO, THE AO HAS NOT GOT ANY EVIDENCE WITH RESPECT TO SAL E OF BOGUS TENANCIES FOR THE CURRENT YEAR. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 22 17. IT IS OBSERVED THAT ALL THE CONTENTIONS AND THE FINDINGS RELIED UPON BY THE AO HAD ARISEN FOR CONSIDERATION BEFORE ME IN THE APPELLANTS OWN CASE FOR AY 2006-07 ~D VIDE O RDER DATED 31/01/2011 THE SAME WAS DECIDED IN FAVOUR OF THE AP PELLANT FOR THE FOLLOWING REASONS GIVEN IN PARA NOS. 45 - 4 7 OF THE SAID ORDER:- A. THE AO ERRED IN COUNTING THE NO. OF TENANTS. THE TOTAL NO OF TENANTS IN THE 3 BUILDINGS WERE 101 OUT OF WH ICH THE TOTAL NO. OF TENANTS TO WHOM PERMANENT ALTERNAT E ACCOMMODATION WAS PROVIDED WAS 97. B. THE FOUR PARTIES ARE THE SUB-TENANTS OF M/S. MEH TA TRADING COMPANY AND THE APPELLANT PROVIDED PERMANENT ALTERNATE ACCOMMODATION TO THESE PARTIES IN LIEU OF THE SUB-TENANCIES. C. THE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAULA JOSHI. THE NOTINGS ON THE SAID LOOSE PAPERS ARE INCORRECT AND DOES NOT REPRESENT THE FAC TUAL POSITION AND THUS HELD TO BE ROUGH NOTINGS. D. THE ADDITION IN RESPECT OF SALE OF BOGUS TENANCI ES HAS BEEN MADE BY THE AO ON THE BASIS OF INCORRECT FACTS . 18. IT IS ALSO OBSERVED THAT THE APPELLANT HAS PROV IDED THIS PARTY WITH PERMANENT ALTERNATE ACCOMMODATION AS PER THE PROVISIONS OF RULE 33(7) OF THE BMC RULES. ON PERUS AL OF THE VARIOUS MATERIAL EVIDENCES AVAILABLE ON RECORD LIKE THE AGREEMENT COPIES, ELECTRICITY BILLS, TELEPHONE BILL S, ETC, IT IS OBSERVED THAT THE PROPERTY AGAINST WHICH FLAT OF SI DDHI APARTMENT WAS ALLOTTED WAS POSSESSED BY MRS. JAYABE N KANOBER. IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS THERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, ON PERU SAL OF THE ELECTRICITY BILLS, DECLARATION BY THE SCHOOL, ETC, THE TENANCY OF THE SAID PARTY SINCE LONG BACK IS ESTABLISHED. THES E BILLS ARE ISSUED BY GOVERNMENT COMPANIES AND AUTHORITIES I.E. MAHANAGAR TELEPHONE NIGAM LTD. THE SAME CANNOT BE DISAPPROVED UNLESS THERE IS ANY CONTRARY EVIDENCE. THEREFORE, MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 23 AS NO OTHER EVIDENCE WERE FOUND INDICATING THAT THE APPELLANT HAD RECEIVED ANY ON MONEY, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CANNOT BE MADE. 19. CONSIDERING THE AFOREMENTIONED FACTS AND IN ABS ENCE OF ANYTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON SALE OF FLATS TO BOGUS TENANCIES BY THE APPELLAN T CANNOT BE SUSTAINED. IN THE RESULT THE APPEAL IS ALLOWED IN F AVOUR OF THE APPELLANT. XXXXXXXXXX 23. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS OBSERVED THAT VARIO US TRIBUNALS HAVE ACCEPTED THE PROJECT COMPLETION METHOD AS AN APPROPRIATE METHOD OF COMPUTING INCOME. THE TRIBUNA LS HAVE ALSO ACCEPTED THE TREATMENT BY THE ASSESSEE TO OFFE R INCOME TO TAX IN THE YEAR WHEN THE PROJECT WAS COMPLETED IN T HE FOLLOWING DECISIONS: IX. IN CHAMPION CONSTRUCTION COMPANY 5 ITD 495 (1983) X. M/S UNIQUE ENTERPRISES VS ITO [201O-TIOL-737-ITAT- MUM XI. IN PRESTIGE ESTATE PROJECTS (P) LTD VS DCIT (2010) 33 DTR 514 XII. CIT V BILAHARI INVESTMENT (P) LIMITED (299 ITR 1) XIII. DCIT V OTIS ELEVATOR CO. INDIA LTD. (284 ITR 173) XIV. CITY ASHOKBHAI CHIMANBHAI (56 ITR 42) XV. T. K. INTERNATIONAL LTD. V ACIT (275 ITR 101) XVI. ASIA RESORTS LIMITED (96 TTJ 909) 24. ON PERUSAL OF THE DECISIONS CITED ABOVE, IT IS OBSERVED THAT IT HAS BEEN HELD THAT THE METHOD OF ACCOUNTING WHICH HAS BEEN CONSISTENTLY FO LLOWED BY THE COMPANY AND WHICH IS IN ACCORDANCE WITH THE ACC OUNTING STANDARDS ISSUED BY CBDT AND LCAL, THE SAME CANNOT BE QUESTIONED, UNLESS THERE IS A FINDING BY THE REVENU E THAT THE METHOD ADOPTED BY THE TAXPAYER RESULTS IN DISTORTIO N OF PROFITS. THEREFORE, I AM OF THE OPINION THAT SINCE THE APPEL LANT HAS CONSISTENTLY FOLLOWED PROJECT COMPLETION METHOD THE INCOME OF THE APPELLANT OUGHT TO HAVE BEEN CONSIDERED ON THE SAME BASIS. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 24 ACCORDINGLY, THE SAID GROUND OF APPEAL STANDS ALLOW ED IN FAVOUR OF THE APPELLANT. ITA NO.3225-2011 15. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. IT IS EVIDENT FROM THE ASS ESSMENT ORDER, THAT THE AO HAS REFERRED AND RELIED UPON THE FINDINGS FOR THE AY 2006-07. IT IS SEEN THAT THE AO HAS NOT RAIS ED ANY ADDITIONAL CONTENTION APART FROM THOSE RAISED FOR T HE ASSESSMENT YEAR 2006-07. IT IS ALSO OBSERVED THAT T HE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDE RATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAUL A JOSHI AND THE CONTENTIONS RAISED IN ASSESSMENT YEAR 2006-07. MORE SO, THE AO HAS NOT GOT ANY EVIDENCE WITH RESPECT TO SAL E OF BOGUS TENANCIES FOR THE CURRENT YEAR. 16. IT IS OBSERVED THAT ALL THE CONTENTIONS AND THE FINDINGS RELIED UPON BY THE AO HAD ARISEN FOR CONSIDERATION BEFORE ME IN THE APPELLANTS OWN CASE FOR AY 2006-07 ~D VIDE O RDER DATED 31/01/2011 THE SAME WAS DECIDED IN FAVOUR OF THE AP PELLANT FOR THE FOLLOWING REASONS GIVEN IN PARA NOS. 45 - 4 7 OF THE SAID ORDER:- A. THE AO ERRED IN COUNTING THE NO. OF TENANTS. THE TOTAL NO OF TENANTS IN THE 3 BUILDINGS WERE 101 OUT OF WHICH THE TOTAL NO. OF TENANTS TO WHOM PERMANENT ALTERNATE ACCOMMODATION WAS PROVIDED WAS 97. B. THE FOUR PARTIES ARE THE SUB-TENANTS OF M/S. MEH TA TRADING COMPANY AND THE APPELLANT PROVIDED PERMANENT ALTERNATE ACCOMMODATION TO THESE PARTIES IN LIEU OF THE SUB-TENANCIES. C. THE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UNDER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAULA JOSHI. THE NOTINGS ON THE SAID LOOSE PAPERS ARE INCORRECT AND DOES NOT REPRESENT THE FAC TUAL POSITION AND THUS HELD TO BE ROUGH NOTINGS. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 25 D. THE ADDITION IN RESPECT OF SALE OF BOGUS TENANCI ES HAS BEEN MADE BY THE AO ON THE BASIS OF INCORRECT FACTS . 17. IT IS ALSO OBSERVED THAT THE APPELLANT HAS PROV IDED THIS PARTY WITH PERMANENT ALTERNATE ACCOMMODATION AS PER THE PROVISIONS OF RULE 33(7) OF THE BMC RULES. ON PERUS AL OF THE VARIOUS MATERIAL EVIDENCES AVAILABLE ON RECORD LIKE THE AGREEMENT COPIES, ELECTRICITY BILLS, TELEPHONE BILL S, ETC, IT IS OBSERVED THAT THE PROPERTY AGAINST WHICH FLAT OF SI DDHI APARTMENT WAS ALLOTTED WAS POSSESSED BY MRS. JAYABE N KANOBER. IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS THERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, ON PERU SAL OF THE ELECTRICITY BILLS, DECLARATION BY THE SCHOOL, ETC, THE TENANCY OF THE SAID PARTY SINCE LONG BACK IS ESTABLISHED. THES E BILLS ARE ISSUED BY GOVERNMENT COMPANIES AND AUTHORITIES I.E. MAHANAGAR TELEPHONE NIGAM LTD. THE SAME CANNOT BE DISAPPROVED UNLESS THERE IS ANY CONTRARY EVIDENCE. THEREFORE, AS NO OTHER EVIDENCE WERE FOUND INDICATING THAT THE APPELLANT HAD RECEIVED ANY ON MONEY, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CANNOT BE MADE. 18. CONSIDERING THE AFOREMENTIONED FACTS AND IN ABS ENCE OF ANYTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON SALE OF FLATS TO BOGUS TENANCIES BY THE APPELLAN T CANNOT BE SUSTAINED. IN THE RESULT THE APPEAL IS ALLOWED IN F AVOUR OF THE APPELLANT. XXXXXXXX 22. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS OBSERVED THAT VARIO US TRIBUNALS HAVE ACCEPTED THE PROJECT COMPLETION METHOD AS AN APPROPRIATE METHOD OF COMPUTING INCOME. THE TRIBUNA LS HAVE ALSO ACCEPTED THE TREATMENT BY THE ASSESSEE TO OFFE R INCOME TO TAX IN THE YEAR WHEN THE PROJECT WAS COMPLETED IN T HE FOLLOWING DECISIONS: I. IN CHAMPION CONSTRUCTION COMPANY 5 ITD 495 (1983) II. M/S UNIQUE ENTERPRISES VS ITO [201O-TIOL-737-ITAT- MUM MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 26 III. IN PRESTIGE ESTATE PROJECTS (P) LTD VS DCIT (2010) 33 DTR 514 IV. CIT V BILAHARI INVESTMENT (P) LIMITED (299 ITR 1) V. DCIT V OTIS ELEVATOR CO. INDIA LTD. (284 ITR 173) VI. CITY ASHOKBHAI CHIMANBHAI (56 ITR 42) VII. T. K. INTERNATIONAL LTD. V ACIT (275 ITR 101) VIII. ASIA RESORTS LIMITED (96 TTJ 909) 23. ON PERUSAL OF THE DECISIONS CITED ABOVE, IT IS OBSERVED THAT IT HAS BEEN HELD THAT THE METHOD OF ACCOUNTING WHICH H AS BEEN CONSISTENTLY FOLLOWED BY THE COMPANY AND WHICH IS I N ACCORDANCE WITH THE ACCOUNTING STANDARDS ISSUED BY CBDT AND LCAL, THE SAME CANNOT BE QUESTIONED, UNLESS THE RE IS A FINDING BY THE REVENUE THAT THE METHOD ADOPTED BY T HE TAXPAYER RESULTS IN DISTORTION OF PROFITS. THEREFOR E, I AM OF THE OPINION THAT SINCE THE APPELLANT HAS CONSISTENTLY F OLLOWED PROJECT COMPLETION METHOD THE INCOME OF THE APPELLA NT OUGHT TO HAVE BEEN CONSIDERED ON THE SAME BASIS. ACCORDIN GLY, THE SAID GROUND OF APPEAL STANDS ALLOWED IN FAVOUR OF T HE APPELLANT. ITA NO.3229-2011 28. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, COMMENTS OF THE A.O. ON THE REMAND REPORT AND THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE APPELLANT. IT IS EVIDENT FROM THE COMMENTS OF THE ASSESSING OFFICER IN THE R EMAND REPORT THAT THE AREA MENTIONED IN THE SEIZED DOCUME NTS AND THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED DIFF ERS. 29. FURTHER, IN MY VIEW, NO ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CAN BE MADE DUE TO THE FACT THAT AO IN. HIS R EMAND REPORT HAS CLEARLY STATED THAT THE AREA MENTIONED I N THE SEIZED DOCUMENT & THE ACTUAL AREA GIVEN TO THE PERSONS CON CERNED, DIFFERS. HE CONFIRMED THAT THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED IS AS MENTIONED IN THEIR RESPECTIVE AGREE MENTS. ITS IS ALSO OBSERVED THAT MR. KAMLESH BAHETI, ONE OF THE F IVE PARTIES, IN RESPONSE TO NOTICE ISSUED U/ S. 131 STATED TO HA VE RECEIVED FLAT IN LIEU OF SURRENDER OF PROPERTY. HE ADMITTED, TO HAVE SUB TENANTED THE PROPERTY TO FOUR OTHER PARTIES AND SPE CIFICALLY STATED THAT HE HAS NOT RECEIVED OR PAID ANY MONEY. FURTHER, ON MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 27 PERUSAL OF RESPONSE OF ALL THE PARTIES TO WHOM NOTI CES WERE ISSUED, IT IS OBSERVED THAT THEY HAVE RECEIVED FLAT S UPON SURRENDER OF THE PROPERTY AND THEY HAVE ALSO STATED THAT THEY HAVE NOT PAID ANY MONEY TO THE APPELLANT. 30. IT IS ALSO OBSERVED THAT AS PER THE NOTING IN T HE SEIZED PAPER, FLATS NO 2501 AND FLAT NO.2505 IS ALLOTTED T WO PARTIES. HOWEVER, IT IS PERUSED THAT THE BUILDING SIDDHESH A PARTMENT WAS CONSTRUCTED ONLY UPTO 24 FLOORS. ON THE BASIS O F THE ABOVE, IT IS SEEN THAT THE NOTING MADE IN THE SEIZED MATER IAL PROVED TO BE INCORRECT, AND THUS, DOES NOT REPRESENT THE FACT UAL POSITION. IT IS OBSERVED THAT THE ENTIRE ADDITION IN THE PRES ENT PROCEEDINGS HAS BEEN MADE BY THE AO BASED ONLY ON T HE SAID SEIZED MATERIAL, WHICH IS, NOW PROVED TO BE, INCORR ECT AND ERRONEOUS. 31. IT IS ALSO SEEN THAT THE FLATS ARE SOLD BY THE APPELLANT AT MARKET RATES. IT IS FURTHER OBSERVED THAT THERE IS NO MATERIAL OR EVIDENCE ON RECORD TO PROVE THAT THE APPELLANT HAS RECEIVED ON MONEY ON THE SALES OF FREE FLATS OR TENANTS.' FURTH ER, IT IS OBSERVED THAT EXTRAPOLATION CANNOT BE APPLIED IN TH E PRESENT CASE. IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS TH ERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, THE TENANT S ARE CERTIFIED BY MHADA, A GOVERNMENT AGENCY, THE SAME C ANNOT BE DISAPPROVED BY ME UNLESS THERE IS ANY CONTRARY EVID ENCE. THEREFORE, AS NO OTHER EVIDENCE WERE FOUND INDICATI ON THAT THE APPELLANT HAD RECEIVED AN ON MORE IN RESPECT OF FRE E SALE FLATS TENANTS CERTIFIED BY MHADA., THE ADDITION ON ACCOUN T OF RECEIPT OF ON MONEY CANNOT BE MADE. 32. CONSIDERING THE AFOREMENTIONED FACTS, AND, ON E XAMINATION, IT IS OBSERVED THAT NO MATERIAL HAS BEEN FOUND INDI CATING THAT THE APPELLANT HAS RECEIVED ON MONEY. ON GOING THROU GH THE AGREEMENTS FILED BY THE APPELLANT, THE RESPONSE OF THE FIVE PARTIES TO NOTICE U/ S. 131 ISSUED BY THE AO, AND T HE COMMENTS MADE BY THE AO IN THE REMAND REPORT DATED 11.01.201 1, IT IS OBSERVED THAT THESE FIVE PARTIES WERE ACTUALLY IN P OSSESSION OF THE PROPERTY AND THE APPELLANT HAD TO GIVE THEM FLA TS IN LIEU OF SURRENDER OF THE POSSESSION OF THE TENANCY RIGHTS/ PROPERTY. IT MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 28 WAS FURTHER OBSERVED THAT THE ENTIRE ADDITION IN TH E ASSESSMENT WAS MADE ON THE BASIS OF THE LOOSE PAPER SEIZED FRO M THE RESIDENCE OF CHAULA JOSHI, WHICH IS PERUSED TO BE R OUGH NOTING. IT IS OBSERVED THAT THE AREA MENTIONED IN THE NOTIN G ON THE SEIZED PAPER DOES NOT TALLY WITH THE ACTUAL AREA AL LOTTED TO THOSE PARTIES AS PER THE AGREEMENT AND THE RESPONSE LETTERS TO NOTICE U/ S. 131. IN FACT, THE AO HAS CONCLUDED IN THE REMAND REPORT THAT THE NOTING ON THE SEIZED PAPER AND THE AGREEMENT DOES NOT TALLY AND FACTUALLY THE PARTIES HAVE RECEI VED AREA AS PER THE AGREEMENT ONLY. THUS, THE AGREEMENTS, COMME NTS IN THE REMAND REPORT, THE STATEMENTS RECORDED IN THE R EMAND PROCEEDINGS, CORROBORATES WITH THE SUBMISSIONS MADE BY THE APPELLANT. THEREFORE, AS THERE IS NOTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY BY THE AO CANNOT BE SUSTAINED. IN THE RESULT THE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. AC CORDINGLY, THE ADDITION OFRS. 1,40,39,036/- IS DELETED. GROUND NO.2 & 3 45. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE CONTENTIONS OF THE AO. IT IS OBSERVED THAT THE AO HAS ERRED IN COUNTING THE NO. OF TENANTS. IT IS SEEN TH AT THE TOTAL NO OF TENANTS IN THE SAID 3 BUILDINGS ARE 101 OUT OF W HICH THE TOTAL NO. OF TENANTS TO WHOM PERMANENT ALTERNATE ACCOMMOD ATION WAS PROVIDED WAS 97. IT IS FURTHER NOTED THAT THE S AME RECONCILES WITH THE NO. OF TENANTS AS PER THE LIST CERTIFIED BY MHADA. 46. IT IS EVIDENT THAT THE NAME OF M/S MEHTA TRADIN G COMPANY IS MENTIONED IN THE MHADA CERTIFIED LIST AND THE SA ME IS NOT DISPUTED BY THE AO AS WELL. FURTHER THE FOUR PARTIE S ARE THE SUB-TENANTS OF M/S. MEHTA TRADING COMPANY. ACCORDIN GLY, THE APPELLANT PROVIDED PERMANENT ALTERNATE ACCOMMODATIO N TO THESE PARTIES IN LIEU OF THE SUB-TENANCIES BY M/S. MEHTA TRADING COMPANY. THE SAID FACT IS EVIDENT FORM THE STATEMENT RECORDED BY THE AO IN THE COURSE OF REMAND. ALSO, I T IS CLEAR THE AO HAS ERRED IN COMPUTING THE TOTAL NO OF TENANTS. ACCORDINGLY, IT IS OBSERVED THAT THE ADDITION HAS BEEN MADE BY T HE AO ON THE BASIS OF INCORRECT FACTS. THUS, IN PRINCIPLE SALE O F BOGUS MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 29 TENANCIES CANNOT BE HAVE SAID TO BE MADE ON THE SAI D CONTENTION OF THE A.O. 47. MORE SO, IT IS EVIDENT THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND UNDER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE RESIDENCE OF CHAULA JO SHI. AS ALREADY DISCUSSED IN PARA 20-23 AND 26-29 ABOVE, IT IS OBSERVED THAT THE NOTING ON THE SAID LOOSE PAPERS ARE INCORR ECT AND DOES NOT REPRESENT THE FACTUAL POSITION AND THUS HELD TO BE ROUGH NOTING. THEREFORE, AS THERE IS NOTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON SALE OF FLATS TO B OGUS TENANCIES BY THE APPELLANT CANNOT BE SUSTAINED. IN THE RESULT, THE APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. ITA NO.3230-2011 10. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND CONTENTIONS OF THE AO IN THE ASSESSMENT ORDER. IT IS EVIDENT FROM THE ASSESSMENT ORDER [HAT THE AO HAS REFERRED AND RELIED UPON THE FINDINGS FOR THE A. Y 2006-07. IT IS SEEN THAT THE AO HAS NOT RAISED ANY ADDITIONAL CONTENTION APART FROM THOSE RAISED FOR THE ASSESSMENT YEAR 2006-07. IT IS ALSO OBSERVED THAT THE ENTIRE ADDITION MADE BY THE AO ON THE GROUND UN DER CONSIDERATION IS THE SEIZED MATERIAL FOUND IN THE R ESIDENCE OF CHAULA JOSHI AND THE CONTENTIONS-RAISED IN ASSESSME NT YEAR 2006-07. 11. IT IS OBSERVED THAT ALL THE CONTENTIONS AND TH E FINDINGS RELIED UPON BY THE AO HAD ARISEN FOR CONSIDERATION BEFORE ME IN THE APPELLANTS OWN CASE FOR AY 2006-07 AND VIDE ORDER DATED 31/01/2011, THE SAME WAS DECIDED IN FAVOUR OF THE APPELLANT FOR THE FOLLOWING REASONS GIVEN IN PARA N OS.27, 28, 29 AND 30 OF THE SAID ORDER:- 1. THE NOTINGS ON THE SAID LOOSE PAPER INCORRECT AN D DOES NOT REPRESENT THE FACTUAL POSITION AND WAS HELD TO BE R OUGH NOTINGS. 2. RESPONSE OF THE FIVE PARTIES TO WHOM NOTICE WAS ISSUED U/S, 131, WHEREIN THEY MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 30 STATED THAT THEY WERE IN THE POSSESSION OF THE PROP ERTY AND THEY HAVE RECEIVED FLAT IN LIEU OF SURRENDER OF PRO PERTY. FURTHER, THE SAID PARTIES ALSO CATEGORICALLY STATED THAT THE Y HAVE NOT PAID ANY MONEY TO THE APPELLANT. 3. AS PER THE NOTINGS IN THE SEIZED PAPER, FLATS NO 2501 AND FLAT NO. 2505 IS ALLOTTED TWO PARTIES. HOWEVER, IT WAS P ERUSED THAT THE BUILDING SIDDHESH APARTMENT WAS CONSTRUCTED ONL Y UPTO 24 FLOORS. . 4. THE COMMENTS OF THE AO IN THE REMAND REPORT CLEA RLY MENTIONING THE FACT THAT THE AREA MENTIONED IN THE SEIZED DOCUMENTS AND THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED DIFFERS. 12. CONSIDERING THE AFOREMENTIONED FACTS AND AS THE RE IS NOTHING MATERIAL ON RECORD IN THE YEAR UNDER CONSID ERATION TO PROVE OTHERWISE, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY BY THE AO CANNOT BE SUSTAINED. IN THE RESULT THE GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE APPELLANT. AC CORDINGLY, THE ADDITION OF RS. 1,72,16,6821- IS DELETED. 4.1. DURING HEARING, THE LD. REPRESENTATIVES FROM BOTH SIDES CONTENDED THAT THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL TO ITA NO.3229/MUM/2011, THEREFORE, THEY SUBMITTED THAT THEIR ARGUMENTS IS ALSO IDENTICAL. IN VIEW OF THIS STATEMENT, SINCE WE HAVE DELIBERATED UPON THE ISSUES AND SINCE THE FACTS AND THE ISSUED ARE IDENTICAL, THERE FORE, ON THE REASONING CONTAINED IN THE AFORESAID PARAS, VARIOUS JUDICIAL PRONOUNCEMENT HAS ALREADY BEEN CONSIDERED IN THE IM PUGNED ORDERS, THEREFORE, IN THE ABSENCE OF ANY CONTRARY F ACTS/JUDICIAL PRONOUNCEMENTS, MORE SPECIFICALLY ON BEHALF OF THE REVENUE, ON THE REASONING CONTAINED IN PRECEDING PARA OF THI S ORDERS, MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 31 WE FIND NO MERIT IN THE APPEALS OF THE REVENUE, THE REFORE, THE APPEALS OF THE REVENUE ARE DISMISSED. 5. NOW, WE SHALL TAKE UP THE CROSS OBJECTIONS (C.O. 103 TO 109/MUM/2012) (ARISING OUT OF ITA NO.3222, 3324 TO 3226, 3228 TO 3230/MUM/2011). AT THE OUTSET, THE LD. COU NSEL FOR THE ASSESSEE CONTENDED THAT THERE IS A DELAY OF 289 DAYS IN FILING THESE CROSS OBJECTIONS BEFORE THIS TRIBUNAL. THE ASSESSEE EXPLAINED THE REASONS OF DELAY BY SUBMITTING THAT T HERE WAS A REASONABLE CAUSE, THEREFORE, SUBSTANTIAL CAUSE OF J USTICE MAY BE CONSIDERED IN PLACE OF TECHNICAL DEFAULT. ON THE OTHER HAND, THE LD. CIT-DR, SHRI N.P. SINGH OPPOSED THE CONDONA TION OF DELAY BY CONTENDING THAT THE ASSESSEE HAS TO EXPLAI N THE DELAY OF EACH DAY BY SUBMITTING THAT THE CROSS OBJECTIONS OF THE ASSESSEE MAY BE DISMISSED AS IT IS AND DELAY MAY NO T BE CONDONED. 5.1. ON CONDONATION OF DELAY, WE HAVE CONSIDERED T HE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABL E ON RECORD. NOW, QUESTION ARISES WHETHER THERE WAS SUFF ICIENT AND GOOD REASON EXPLAINED BY THE ASSESSEE FOR CONDONING THE DELAY. IF THE REASONS WERE FOUND TO BE SUFFICIENT AND BONA- FIDE, THE DELAY DESERVES TO BE CONDONED. BEFORE, W E EVALUATE, THE SUFFICIENCY OF REASONS, IT WOULD BE OF RELEVANC E TO KEEP IN MIND THE BROAD JUDICIAL THOUGHTS ON THE ISSUE. NO D OUBT FILING OF AN APPEAL IS A RIGHT GRANTED UNDER THE STATUTE T O THE ASSESSEE AND IS NOT AN AUTOMATIC PRIVILEGE, THEREFO RE, THE ASSESSEE IS EXPECTED TO BE VIGILANT IN ADHERING TO THE MANNER MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 32 AND MODE IN WHICH THE APPEALS ARE TO BE FILED IN TE RMS OF THE RELEVANT PROVISIONS OF THE ACT. NEVERTHELESS, A LIB ERAL APPROACH HAS TO BE ADOPTED BY THE APPELLATE AUTHORITIES, WHE RE DELAY HAS OCCURRED FOR BONA FIDE REASONS ON THE PART OF T HE ASSESSEE OR THE REVENUE IN FILING THE APPEALS. IN MATTERS C ONCERNING THE FILING OF APPEALS, IN EXERCISE OF THE STATUTORY RIGHT, A REFUSAL TO CONDONED THE DELAY CAN RESULT IN A MERITORIOUS M ATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD TO MISC ARRIAGE OF JUSTICE. THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE IN JUSTICE ON TECHNICAL GROUNDS BUT BEC AUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5.2. THE HONBLE APEX COURT IN A CELEBRATED DECISI ON IN COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. 1 67 ITR 471 OPINED THAT WHEN TECHNICAL CONSIDERATION AND SUBSTA NTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE COURTS A RE EXPECTED TO FURTHER THE CAUSE OF SUBSTANTIAL JUSTICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY, IN A DISPUTE, CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A N ON- DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WHILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAY, JUDIC IOUS AND LIBERAL APPROACH IS TO BE ADOPTED. IF SUFFICIENT C AUSE IS FOUND TO EXIST, WHICH IS BONA-FIDE ONE, AND NOT DUE TO NE GLIGENCE OF THE ASSESSEE, THE DELAY NEEDS TO CONDONED IN SUCH C ASES. THE EXPRESSION SUFFICIENT CAUSE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY LAW IN A MEANINGFUL MANNER, WHICH S UBSERVES THE END OF JUSTICE- THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF THE COURTS. WHEN SUBSTANTIAL JUSTICE AND MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 33 TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTH ER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERR ED. THE HONBLE APEX COURT IN VEDABHAI VS SANTARAM 253 ITR 798 OBSERVED THAT INORDINATE DELAY CALLS OF CAUTIOUS AP PROACH. THIS MEANS THAT THERE SHOULD BE NO MALAFIDE OR DILA TORY TACTICS. SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL C ONSTRUCTION TO ADVANCE SUBSTANTIAL JUSTICE. THE HONBLE APEX COUR T IN 167 ITR 471 OBSERVED AS UNDER:- 3. THE LEGISLATURE HAS CONFERRED THE POWER TO COND ONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 196 3 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO P ARTIES BY DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY EL ASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE- PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COUR TS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERC OLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCHY. 5.3. FURTHERMORE, THE HON'BLE SUPREME COURT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL V S. SHANTARAM BABURAO PATIL 253 ITR 798 HELD THAT THE C OURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CAS E KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PR IME IMPORTANCE. THE COURT HELD THAT THE EXPRESSION SUF FICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION. CONSIDE RING THE MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 34 ENTIRE GAMUT OF FACTS, EXPLANATION OF THE ASSESSEE AND IN THE ABSENCE OF ANY CONTRARY MATERIAL, WE DEEM IT FIT AN D PROPER TO HOLD THAT ASSESSEE HAD A BONA FIDE AND SUFFICIENT R EASON FOR THE DELAY IN FILING THE CROSS OBJECTIONS, THEREFORE , RESPECTFULLY, FOLLOWING THE OBSERVATION MADE BY HONBLE APEX COUR T (SUPRA), THE DELAY IS CONDONED. 5.4. NOW, WE SHALL DEAL WITH THE CROSS OBJECTIONS F ILED BY THE ASSESSEE. IN ASSESSMENT YEARS 2001-02, 2004-05, 20 05-06, 2006-07 AND 2007-08, THE FIRST GROUND RAISED BY THE ASSESSEE IS WITH RESPECT TO RETURNED LOSS WAS IGNORED BY THE ASSESSING OFFICER AND THE GROUND SO RAISED WAS NOT DECIDED BY THE LD. FIRST APPELLATE AUTHORITY. DURING HEARING, OF THES E CROSS OBJECTIONS, THIS GROUND WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, THIS GROUND IN THE RESPECT IVE APPEAL IS DISMISSED AS NOT PRESSED. 5.5. SO FAR AS, THE NEXT GROUND WITH RESPECT TO AD DITION OF RS.43,84,800/- (AY.S 2001-02), RS.37,17,000/-(A. Y. 2002- 03), RS.34,94,488/-(A.Y.2003-04), RS.2,47,75,912 (A .Y. 2004- 05), RS.1,56,84,696/- (A.Y. 2005-06), AND RS.66,03, 316/- (A.Y. 2006-07) IS CONCERNED, THIS GROUND IS BROADLY IN SUPPORT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITH RESPECT TO GRANTING RELIEF TO THE ASSESSEE. SI NCE, WE HAVE DISMISSED THE APPEAL OF THE REVENUE, THEREFORE, THE IMPUGNED GROUNDS IN THE CROSS OBJECTIONS, IS CONSEQUENTIAL I N NATURE, THEREFORE, DISMISSED AS IN-FRUCTUOUS. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 35 6. NOW, WE SHALL TAKE UP THE APPEALS, FILED BY THE REVENUE IN THE CASE OF MANAV BUILDERS PVT. LTD. (IT A NO.4691 TO 4693/MUM/2011) AGAINST THE IMPUGNED ORDERS DATED 31/03/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. DURING HEARING OF THESE APPEALS, THE LD. COUNSEL FO R THE ASSESSEE AS WELL AS THE LD. CIT-DR CONTENDED THAT T HE ISSUE AND THE FACTS INVOLVED IN THESE APPEALS ARE IDENTIC AL TO THE CASE OF MERIDIAN CONSTRUCTIONS PVT. LTD., THEREFORE , THEIR ARGUMENT IS IDENTICAL TO THE AFOREMENTIONED APPEALS . 6.1. ON APPEAL, BEFORE THE LD. FIRST APPELLATE AUT HORITY, THE ADDITIONS WERE DELETED AGAINST WHICH THE REVENU E IS IN APPEAL BEFORE THIS TRIBUNAL. 6.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVA NT PORTION FROM THE CONCLUSION DRAWN BY THE LD. FIRST APPELLAT E AUTHORITY FOR READY REFERENCE AND ANALYSIS:- 18. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND ALSO THOSE MADE IN CASE OF M/S. MERIDIAN CONSTRUCTI ONS PVT. LTD., COMMENTS OF THE A.O. IN THE REMAND REPORT IN THE AFORESAID CASE AND THE VARIOUS JUDICIAL PRONOUNCEME NTS CITED BY THE APPELLANT. IT IS EVIDENT FROM THE COMMENTS O F THE AO IN THE REMAND REPORT THAT THE AREA MENTIONED IN THE SE IZED DOCUMENTS AND THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED DIFFERS. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 36 19. FURTHER, IN MY VIEW; NO ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY CAN BE MADE DUE TO THE FACT THAT AO IN THE SA ID REMAND REPORT HAS CLEARLY STATED THAT THE AREA MENTIONED I N THE SEIZED DOCUMENT & THE ACTUAL AREA GIVEN TO THE PERSONS CON CERNED, DIFFERS. HE CONFIRMED THAT THE ACTUAL AREA GIVEN TO THE PERSONS CONCERNED IS AS MENTIONED IN THEIR RESPECTIVE AGREE MENTS. IN THE SAID CASE, IT WAS ALSO OBSERVED THAT MR. KAMLES H BAHETI, ONE OF THE FIVE PARTIES, IN RESPONSE TO NOTICE ISSU ED U/S. 131 STATED TO HAVE RECEIVED FLAT IN LIEU OF SURRENDER O F PROPERTY. HE ADMITTED TO HAVE SUB TENANTED THE PROPERTY TO FOUR OTHER PARTIES AND SPECIFICALLY STATED THAT HE HAS NOT REC EIVED OR PAID ANY MONEY. FURTHER, ON PERUSAL OF RESPONSE OF ALL T HE PARTIES TO WHOM NOTICES WERE ISSUED, IT IS OBSERVED THAT THEY HAVE RECEIVED FLATS UPON SURRENDER OF THE PROPERTY AND T HEY HAVE ALSO STATED THAT THEY HAVE NOT PAID ANY MONEY TO TH E APPELLANT. 20. IT IS ALSO OBSERVED THAT AS PER THE NOTING IN T HE SEIZED PAPER, FLATS NO 2501 AND FLAT NO. 2505 IS ALLOTTED TWO PARTIES. HOWEVER, IT IS PERUSED THAT THE BUILDING SIDDHESH A PARTMENT WAS CONSTRUCTED ONLY UPTO 24 FLOORS. ON THE BASIS O F THE ABOVE IT IS SEEN THAT THE NOTING MADE IN THE SEIZED MATER IAL PROVED TO BE INCORRECT AND THUS, DOES NOT REPRESENT THE FACTU AL POSITION. IT IS OBSERVED THAT THE ENTIRE ADDITION IN THE PRES ENT PROCEEDINGS HAS BEEN MADE BY THE AO BASED ONLY ON T HE SAID SEIZED MATERIAL, WHICH IS, NOW PROVED TO BE, INCORR ECT AND ERRONEOUS. 21. IT IS ALSO SEEN THAT THE FLATS ARE SOLD BY THE APPELLANT AT MARKET RATES. IT IS FURTHER OBSERVED THAT THERE IS NO MATERIAL OR EVIDENCE ON RECORD TO PROVE THAT THE APPELLANT HAS RECEIVED ON MONEY ON THE SALES OF FREE FLATS OR TENANTS. FURTHE R, IT IS OBSERVED THAT EXTRAPOLATION CANNOT BE APPLIED IN TH E PRESENT CASE. IN MY VIEW, NO PRESUMPTIONS CAN BE MADE AS TH ERE IS NO MATERIAL OR EVIDENCE ON RECORD. MORE SO, THE TENANT S ARE CERTIFIED BY MHADA, A GOVERNMENT AGENCY, THE SAME C ANNOT BE DISAPPROVED UNLESS THERE IS ANY CONTRARY EVIDENCE. THEREFORE, AS NO OTHER EVIDENCE WERE FOUND INDICATING THAT THE APPELLANT HAD RECEIVED ANY ON MONEY IN RESPECT OF FREE SALE F LATS J TENANTS MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 37 CERTIFIED BY MHADA., THE ADDITION ON ACCOUNT OF REC EIPT OF ON MONEY CANNOT BE MADE. 22. CONSIDERING THE AFOREMENTIONED FACTS, AND, ON E XAMINATION, IN CASE OF M/S. MERIDIAN CONSTRUCTIONS PVT. LTD., I T IS OBSERVED THAT NO MATERIAL HAS BEEN FOUND INDICATING THAT THE APPELLANT HAS ACTUALLY RECEIVED ON MONEY. ON GOING THROUGH TH E AGREEMENTS FILED BY THE APPELLANT, THE RESPONSE OF THE FIVE PARTIES TO NOTICE U/S. 131 ISSUED BY THE AO, AND TH E COMMENTS MADE BY THE AO IN THE REMAND REPORT DATED 11.01.201 1 IN THE CASE OF M/S. MERIDIAN CONSTRUCTIONS PVT. LTD., IT I S OBSERVED THAT THESE FIVE PARTIES WERE ACTUALLY IN POSSESSION OF THE PROPERTY AND THE APPELLANT HAD TO GIVE THEM FLATS I N LIEU OF SURRENDER OF THE POSSESSION OF THE TENANCY RIGHTS/P ROPERTY. IT WAS FURTHER OBSERVED THAT THE ENTIRE ADDITION IN TH E ASSESSMENT WAS MADE ON THE BASIS OF THE LOOSE PAPER SEIZED FRO M THE RESIDENCE OF CHAULLA JOSHI, WHICH IS PERUSED TO BE ROUGH NOTING. IT IS PERTINENT TO NOTE THAT THE AO HIMSELF HAS MEN TIONED IN THE ORDER THAT CHAULLA JOSHI'S STATEMENT WAS RECORDED. IN THIS STATEMENT RECORDED ON THE DATE OF THE SEARCH, SHE D ENIED ANY CASH COMPONENT IN THE SALE OF FLATS. SHE ALSO MENTI ONED THAT THE RATES QUOTED BY HER TO THE PROSPECTIVE CUSTOMER S WERE NEGOTIABLE BY THEM WITH THE DIRECTORS OF THE COMPAN Y WHO ALSO WOULD FIX THE FINAL PRICE. IT IS OBSERVED THAT THE AREA MENTIONED IN THE NOTING ON THE SEIZED PAPER DOES NOT TALLY WI TH THE ACTUAL AREA ALLOTTED TO THOSE PARTIES AS PER THE AGREEMENT AND THE RESPONSE LETTERS TO NOTICE U/ S. 131. IN FACT, THE AO HAS CONCLUDED IN THE REMAND REPORT THAT THE NOTING ON T HE SEIZED PAPER AND THE AGREEMENT DOES NOT TALLY AND FACTUALL Y THE PARTIES HAVE RECEIVED AREA AS PER THE AGREEMENT ONL Y. THUS, THE AGREEMENTS, COMMENTS IN THE REMAND REPORT, THE STAT EMENTS RECORDED IN THE REMAND PROCEEDINGS, CORROBORATES WI TH THE SUBMISSIONS MADE BY THE APPELLANT. THEREFORE, AS TH ERE IS NOTHING MATERIAL ON RECORD TO PROVE OTHERWISE, THE ADDITION ON ACCOUNT OF RECEIPT OF ON MONEY BY THE AO CANNOT BE SUSTAINED. 23. IN THE PRESENT CASE, THE ONLY DISTINCTIVE FACTO R IS THE FACT RELATING TO RECEIPT OF ON MONEY FROM PASTIDEVI K. M EHTA AS NOTED IN THE SEIZED MATERIAL. IN THE SEIZED MATERIA L IT IS NOTED MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 38 THAT AN AMOUNT OF RS. '8,70,250/ - WAS RECEIVED IN CASH FROM THE SAID PASTIDEVI K. MEHTA WHO HAS BEEN ALLOTTED P ERMANENT ALTERNATE ACCOMMODATION IN THE APPELLANT'S PROJECT. AT THE SAME TIME IT IS NOTED THAT THE AREA OF THE FLAT MEN TIONED IN THE SEIZED MATERIAL IS FACTUALLY INCORRECT AS CAN BE OB SERVED FROM THE COPY OF AGREEMENT. THUS, LIKE IN OTHER CASES, T HE NOTING IN THE SEIZED MATERIAL CANNOT BE FULLY RELIED UPON FOR THE VARIOUS REASONS CITED HEREIN ABOVE. FURTHER, IT HAS BEEN CO NSISTENTLY HELD BY COURTS THAT EXTRAPOLATION OF INCOME CANNOT BE MADE WITHOUT ANY COGENT MATERIAL OR EVIDENCE AVAILABLE O N RECORD. IN THE PRESENT CASE, APART FROM THE SEIZED MATERIAL CONTAINING NOTING OF CASH FROM THE SAID SMT. PASTIDEVI K. MEHT A, NO OTHER MATERIAL OR EVIDENCE INDICATING RECEIPT OF CASH/ON MONEY FROM ANY OTHER FLAT PURCHASER WHATSOEVER HAS BEEN FOUND OR SEIZED. FURTHER, PART OF THE NOTING IN THE SAID SEIZED PAPE R IS ALSO FACTUALLY INCORRECT. THUS, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY HON'BLE COURTS AND CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE, I HAD CONFIRMED THE ADDITION ON ACCOUNT OF NET PROFIT @20% ON THE AMOUNT OF RS. 8,70,250/- RECEIVED IN CASH FROM PASTIDEVI K. MEHTA OF RS. 1,74,050/ - . THEREFORE,SINCE, THE ADDITION ON ACCO UNT OF PASTIDEVI K MEHTA HAS BEEN CONFIRMED IN AY 2006-07, NO ADDITION ON THAT ACCOUNT CAN BE MADE IN THIS YEAR. 24. THE ISSUE OF EXTRAPOLATION AND MAKING ADDITION ON THAT ACCOUNT IN THE AY 2005-06 IS NOT TENABLE. THERE IS NO EVIDENCE OF ANY RASH RECEIVED FROM ANY OF THE PARTIES. THE D ETAILS OF SALES MADE IN AY 2005-06 IS OF RS.L,18,LL,655 BUT T HERE IS NO EVIDENCE OF EITHER ANY NOTING OR ANY DOCUMENT TO SH OW THAT ANY OF THESE PARTIES HAVE MADE ANY PAYMENT IN CASH TO THE APPELLANT. JUST ON THE BASIS OF ONE ROUGH NOTING RE GARDING RECEIPT OF CASH, THE SAME CANNOT BE EXTRAPOLATED TO THE ENTIRE YEAR AND THE OTHER ASSESSMENT YEARS INVOLVED. THERE IS A NEED TO SHOW RECEIPT OF CASH FOR MAKING SUCH ADDITION. T HEREFORE, THE ADDITION MADE ON ACCOUNT OF 40% SALES NOT RECOR DED IN THE BOOKS AND TAKING 20% AS NET PROFIT IS DELETED. 25. IN THE RESULT, THE APPEAL FILED BY THE APPELLAN T IS ALLOWED. MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 39 6.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE PRESEN T ASSESSEE, AT THE RELEVANT TIME WAS CARRYING ON THE BUSINESS O F REDEVELOPMENT OF CESSED BUILDINGS. IDENTICALLY, A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF ROHAN GROUP OF CASES, U/S 132 OF THE ACT. CONSEQUENT UPON NOTICE ISSUED U/S 153 OF THE ACT, THE ASSESSEE DECLARED NIL INCOME ON 07/03/2007, HOWEVER, THE ASSESSMENT WAS COMPLETED U /S 143(3) R.W.S 153 OF THE ACT DETERMINING THE TOTAL I NCOME AT RS.15,74,887/- (A.Y. 2005-06) ON 29/12/2008. THE M AIN GRIEVANCE OF LD. ASSESSING OFFICER IS THAT THE ASSE SSEE RECEIVED ON MONEY ON SALE OF FLATS IN ITS PROJECT AND THUS A DDITION WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. LIKEWISE , FOR A.Y. 2006-07, ADDITION OF RS.26,94,604/- AND RS.1,44,51, 239/- (A.Y.2007-08) WERE MADE. IT IS WORTH MENTIONING TH ERE NO EVIDENCE WAS BROUGHT ON RECORD BY THE REVENUE EVIDE NCING THAT ANY ON MONEY WAS EVER RECEIVED BY THE ASSESSEE AND EVEN THE ASSESSING OFFICER IN THE REMAND REPORT CLEARLY STATED THAT THE AREA MENTIONED IN THE SEIZED DOCUMENTS AND THE ACTUAL AREA GIVEN TO THE CONCERNED PERSONS DIFFERS I.E. TH E AREA GIVEN TO THE CONCERNED PERSONS MATCHES WITH THE RESPECTIV E AGREEMENT. THE TENANTS WERE DULY CERTIFIED BY MHA DA. WE NOTE THAT THE FACTS AND THE ISSUES ARE IDENTICAL TO THE APPEAL OF THE M/S MERIDIAN CONSTRUCTION PVT. LTD., WHEREIN, W E HAVE PERUSED THE RECORD AND ON CONSIDERATION OF ARGUMENT S AND THE MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 40 JUDICIAL PRONOUNCEMENTS, AFFIRMED THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY DISMISSING THE APPEAL OF THE REVENUE, THEREFORE, WE FIND NO MERIT IN THE CLAIM OF THE REVENUE IN THESE APPEALS ALSO. THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS ARRIVED AT AFTER CONSIDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS AND THE FACTUAL ASPECT OF THE MATTER INCLUDING THE REPORT O F THE MHADA, A GOVERNMENT AGENCY, WHICH CANNOT BE BRUSHED ASIDE. HIS STAND IS AFFIRMED. RESULTANTLY, THESE APPEALS ARE ALSO DISMISSED. FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED A ND THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALSO DISMI SSED BEING NOT PRESSED OR BEING IN-FRUCTUOUS. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 19/08/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 28/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI MEREDIAN CONSTRUCTION PVT. LTD. & ORS. 41 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI