ACIT, New Delhi V. M/s. New India City Developers Ltd., New Delhi

ITA 3639/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3662 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KATRU
• Keywords: Depreciation; Search and seizure; Document seized; Share purchase agreement; Documents seized
• Section: 143(3); 153A; 132

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SMT BEENA A PILLAI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3639/DEL/2014 (ASSESSMENT YEAR: 2005 - 06 ) ACIT, CENTRAL CIRCLE - 19, NEW DELHI VS. NEW INDIA CITY DEVELOPERS LTD, B - 44, IIND JANGPURA, NEW DELHI PAN:AAACK0016B (APPELLANT) (RESPONDENT) REVENUE BY : MS. NIRUPAMA KATRU, CIT DR ASSESSEE BY: SH. SASHI TULSIYAN, ADV DATE OF HEARING 22/02 / 2017 DATE OF PRONOUNCEMENT 10 / 04 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THE REVENUE AGAINST THE ORDER OF THE LD CIT (A) - XII, PREFERS THIS APPEAL , NEW DELHI DATED 18.03.2014 FOR THE ASSESSMENT YEAR 2005 - 06. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT ( A) HAS ERRED IN HOLDING THAT THE ADDITIONS MADE ARE WITHOUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IS WITHOUT JURISDICTION AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT ( A) HAS ERRED IN HOLDING THAT WHEN AN ASSESSMENT IS TO BE COMPLETED U/S 153/153C OF THE ACT; NO ADDITION OTHER THAN THE ADDITION BASED ON THE SEIZED DOCUMENTS CAN BE MADE. 3. THE LD CIT ( A) FAI LED TO APPRECIATE THAT IN SECTION 153(1)(1)(B) THERE IS NOTHING TO SUGGEST THAT THE ASSESSMENT OR REASSESSMENT OF TOTAL INCOME IS TO BE PAGE 2 OF 13 CONFINED ONLY TO THE MATERIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH. 4. THE ORDER OF THE LD CIT(A) IS ERRONEOUS AND I S NOT TENABLE ON FACTS AND IN LAW. 3. THE BRIEF FACT OF THE CASE IS THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. IT FILED ITS RETURN OF INCOME ON 27.03.2016 DECLARING TOTAL LOSS AT RS. 6632070/ - . THE ASSESSEE AS ALLEGED BY THE AO IS PART OF TODAY GROUP OF CASES WHO WAS SEARCHED ON 26.11.2002 WHICH WAS FINALLY CONCLUDED ON 25.01.2010. THE CASE WAS SELECTED FOR SCRUTINY AND A SUM OF RS. 15 LAKHS WAS ADDED IN RESPECT OF ADVANCE RECEIVED FROM SAVSUDHA. FURTHER, RS. 798348/ - WAS ALSO DISALLOWED ON ACCOUNT OF EXCESS DEPRECIATION ON THE ASSETS AND A FURTHER SUM OF RS. 4827364/ - WAS DISALLOWED OUT OF TRAVELLING AND CONVE YANCE EXPENSES. THE ASSESSMENT ORDER U/S 143(3) READ WITH SECTION 153C/ 153A OF THE ACT DATED 28.12.2011 WAS FRAMED AT TOTAL INCOME OF RS. 15 LAKHS AND BUSINESS LOSS WAS DETERMINED AT RS. NIL. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD AO PREFERRED APPEAL BEFORE THE LD CIT(A), WHO IN TURN DELETED THE ADDITION HOLDING THAT IN ABSENCE OF INCRIMINATING MATERIAL NO ADDITI ON OR DISALLOWANCE CAN BE MADE IN CASES COVERED U/ 153C/ 153A OF THE ACT. A GGRIEVED , THE REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD DR RELIED UPON THE ORDER OF THE LD AO AND VEHEMENTLY SUBMITTED THAT THE LAW DOES NOT PROVIDE THE SEARCH ASSESSME NT IS TO BE BASED ONLY ON INCRIMINATING MATERIAL ONLY. 5. L D AR SUBMITTED THE WRITTEN SUBMISSION. ACCORDING TO HIM THE DISALLOWANCE OR ADDITION MADE ARE ALREADY RECORDED IN THE BOOKS OF ACCOUNT AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. HE REFERRED TO THE SATISFACTION NOTE PAGE 3 OF 13 AT PAGE NO. 2 T O 4 OF THE PAPER BOOK AND SUBMITTED THAT THERE IS NO REFERENCE TO ANY OF THE TRANSACTION WITH SAVSUVIDA AND REFERRED TO THE EXPLANATION GIVEN BY THE ASSESSEE VIDE LETTER DATED 29.11.2011 WHEREIN, THE SEIZED MATERIAL HAS BEEN EXPLAINED AND IN THOSE DOCUME NTS ALSO THERE WAS NO REFERENCE OF ANY TRANSACTION WITH SAVSUVIDHA. WITH RESPECT TO OTHER DISALLOWANCE OF DEPRECIATION, TRAVELLING, AND CONVENIENCE AND DISALLOWANCE ON LOSS ON SALE OF CAR, HE SUBMITTED THAT THERE IS NO REFERENCE IN THE SATISFACTION NOTE AS WELL AS NO REFERENCE OF ANY INCRIMINATING DOCUMENTS. ACCORDING TO HIM ALL THESE TRANSACTION ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS, WHICH ARE AUDITED. THEREFORE, HE SUBMITTED THAT CURRENT YEAR LOSS IS ALSO AVAILABLE FOR CARRY FORWARD. IN THE END, H E SUPPORTED THE ORDER OF THE D CIT (A) CITING THE VARIOUS DECISIONS OF HON DELHI HIGH COURT AND ALSO OF VARIOUS TRIBUNALS. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND THE ORDERS OF THE LOWER AUTHORITIES . HON DELHI HIGH COURT IN CASE OF CIT V KA BUL CHAWLA 380 ITR 573 ( DEL) HAS HELD THAT : - 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER : (I) O NCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASS ESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. PAGE NO : 0590 (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMENT YEARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS AS A FRESH EXERCISE . PAGE 4 OF 13 (III) THE ASSESSING OFFICER WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT ASSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS, THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGH T TO TAX'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST - SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY, AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF THE SEIZED MATERIAL.' (V) IN THE ABS ENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABLE TO ABATED PRO CEEDINGS (I.E., THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO THE COMPLETED ASSESSMENT PROCEEDINGS. (VI) IN SO FAR AS THE PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPA RATELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE ASSESSING OFFICER. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSES SMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSE D OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. PAGE 5 OF 13 [EXTRACTED FROM ITRONLINE] 7. BASED ON THE ABOVE GUIDANCE PROVIDED BY THE HON HIGH COURT , WE PROCEED TO EXAMINE WHETHER THERE IS ANY INCRIMINATING MATERIAL IS AVAILABLE WITH RESPECT TO VARIOUS ADDITIONS/ DISALLOWANCES MADE BY THE LD AO . THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER THAT IS PLACED AT PAGE NO. 2 OF THE PAPER BOOK SPEAKS THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED AT THE BUSINESS PREMISES AS WELL AS RESIDENTIAL PREMISES OF TODA Y GROUP OF CASES ON 26.11.2009 AND WAS FINALLY CONCLUDED ON 25.01.2010. DURING THE COURSE OF SEARCH, FOLLOWING DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND WHICH ARE AS UNDER: - A SEARCH AND SEIZURE OPERATION WAS CARRIED AT THE BUSINESS PREMISES AS WELL AS THE RESIDENTIAL PREMISES OF TODAY GROUP OF CASES ON 26. 11, 2009 AND WAS FINALLY CONCLUDED ON 25.01. 2010. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AT THE VARIOUS PREMISES OF TODAY GROUP OF CASES FOLLOWING DOCUMENTS BELONGING TO M/S NEW INDIA C ITY DEVELOPER PVT LTD WERE FOUND AND SEIZED: PREMISE: 48. FRIENDS COLONY EAST, NEW DKUI1 (PARTY H - L) PARTY H - L, ANNEXURE A - L: PAGE NO DESCRIPTION 73` PHOTOCOPY OF VIJAYA BANK CHEQUE OF US.4 LAKHS DATED 5.3.2009 FROM M.IYFIELD PROJECTS LO NEW INDIA CITY DEVELOPER PVT. LTD. PREMISE: 8'' FLOOR. STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI (PARTY - H - 2) PARTY H - 2, ANNEXUREA - 1 PAGE DESCRIPTION PAGE 6 OF 13 NO 155 UNSIGNED RECEIPT OF RS. 13308000/ - THROUGH DD NO 644586 DATED - 01.03.2007 OF BANK OF RAJASTHAN BY MODHWAJ SINGH FROM NEW INDIA CITY DEVELOPER PVT. LTD AS LOAN AMOUNT. PARTY - H - 2, ANNEXURE A - 2: PAGE NO DESCRIPTION 60 - 78 THE DEVELOPMENT AGREEMENT MADE ON 3 RD MARCH 2007 BETWEEN MORDHWAJ SINGH, VIKRAMJEET SINGH, RAM NARAYAN SINGH WITH NEW INDIA CITY DEVELOPER PVT LTD. B - 44. JANGPURA NEW DELHI TO DEVELOP THE 35.2062 PROPERTY - AT THE RATE OF RS 1000000/ - PER ACRE TOTAL AMOUNTING TO RS.35205000/ - AND RS. 19740000/ - HAS ALREADY BEEN RECEIVED BY THE OWNERS. PARTY - H - 2. ANNEXURE A - 9: PAGE NO DESCRIPTION 61 - 63 COPY OF TRIPARTITE DEVELOPMENT AGREEMENT .DATED 22 - 07 - 2008 AMONG V G INVESTMENT PVI . LTD THIPL AND NEW INDIA CITY DEVELOPER PVT LTD REGARDING DEVELOPMENT OI' LAND SITUATED AT MAYFIELD GARDEN, SECTOR - 51, DISTRICT GURGAON, COST OF WHICH TO BE BORNE BY THE DEVELOPER I.E. M/S TODAY J HOMES AND INFRASTRUCTURE PVT LTD (THIPL) PARTY - H - 2. ANNEXURE AA - 1: PAGE NO DESCRIPTION 66 - 69 COPIES OF SHARE TRANSFER FORM OF NEW (MLI;T CITY DEVELOPER PV< LTD TRANSFERRING SHARES TN THIPL PAGE 7 OF 13 PREMISE: 15'' FLOOR. STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI (PARTY - H - L I) PARTY - H - 11 ANNEXURE A - 2: PAGE NO DESCRIPTION 8 - 10 SHARE CERTIFICATES OF TODAY HOMES (NOIDA) PVT. LTD ISSUED IN [HE NAMES OF M/S ULTRA HOME CONSTRICTION PVT. LTD.(UHCPL); M/S NEW INDIA CITY DEVELOPER PVT LTD AND M/S TODAY HOMES AND INFRASTRUCTURE PVT. LTD. PARTY - H - L 1, ANNEXURK A - 5: PAGE NO DESCRIPTION 10 STAMP OF NEW INDIA CITY DEVELOPER PVT LTD, V G. INVESTMENT (P) LTD., COMPANIES MARK ON THE PAPER. PREMISE: M - 172, BLOSSOM - II, SECTOR - 51. GURGAON (PARTY - H - L 7) PARTY - H - 17, ANNEXURE A - 4: PAGE NO DESCRIPTION 23 - 41 COPIES OF DEVELOPMENT AGREEMENT DATED 03 - 03 - 2007 BETWEEN MORDHWAJ SINGH, VIKRAMJEET SINGH. RAM NARAYAN SINGH, BHEEM SINGH AND NEW INDIA CITY DEVELOPERS PVT. LTD B - 44, IIND FLOOR, JANGPURA B REGARDING DEVELOPMENT OF HOUSING/ INDUSTRIAL/ IT PARK/ CYBER PARK ON LAND ADMEASURING 35.2062 ACRES, VILLAGE BAHRAMPUR, GUR GAON FOR A SUM OF RS. 10 LAC PER ACRE TOTALING RS. 3,52,05,0007 - AS NON REFUNDABLE AMOUNT AND THE DEVELOPER AGREED TO PAY 15 LAC PER ACRE TOTALING RS. 5,28,09000/ - TO (HE OWNERS AS REFUNDABLE AMOUNT. PAGE 8 OF 13 PREMISE: 311, 3RD FLOOR, STATESMAN HOUSE, BARAKHNMBA ROAD, NEW DELHI (PARTY - H - 22) PARTY - H - 22, ANNEXURK A - 5: PAGE NO DESCRIPTION 33 - 38 43 - 48 113 - 118 PAPERS SHOWING LIST OF SHARE HOLDERS, DIRECTORS AND MINUTES OF THE MEETING OF DIRECTORS; PROVISIONAL BALANCE SHEET P&L ACCOUNT ETC OF ULTRA HOME CONSTRUCTION PVT. LTD: NEW INDIA CITY DEVELOPER PVT LTD 50 - 58 AND 105 - 1108 'MOA DATED 12 - 10 - 2009~BETWEEN TH1PL AND ULTRA HOME CONSTRUCTION PVT. LTD., NEW INDIA CITY } DEVELOPER PVT LTD FORMING A CONSORTIUM TO PARTICIPATE IN THE TENDER FOR GROUP HOUSING S KIM NOIDA. 109 - 112 LETTER FROM NOIDA AUTHORITY TO TH1PL, NEW INDIA CITY DEVELOPER PVT LTD (N1CDPL), UHCPL (CONSORTIUM) DATED 13 - 09 - 2009 113 - 116 PROVISIONAL BALANCE SHEET, P & L OF NEW INDIA CITY DEVELOPER PVT LTD (NICDPL) 117 - 118 PROVISIONAL BALANCE SHEET, P & L OF NEW INDIA CILY DEVELOPER PVT LTD (THIPL) 119 - 125 PAPERS RELATING TO GROUP HOUSING SCHEME NOIDA - 2009 BY THIPL; NICDPL AND TODAY HOMES NOIDA IN VIEW OF ABOVE, IT IS ESTABLISHED BEYOND DOUBT MANY BOOK OF ACCOUNTS OR DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION ON TODAY GROUP OF CASES BELONG TO M/S. NEW INDIA CITY DEVELOPER PVT. LTD I.E. THE ASSESSEE COMPANY AND HENCE PREREQUISITE CONDITION TO INTIATE PROCEEDINGS U/S 153C OF THE INCOME TAX ACT, 1961 IS FULFILLED. THEREFORE, I AM SATISFIED THAT CASE OF M/S. NEW INDIA CITY DEVELOPER PVT. LTD IS A FIT CASE FOR INTIATION OF PROCEEDINGS U/S 153C OF THE INCOME TAX ACT, 1961. ACCORDINGLY, NOTICES U/S 153 OF THE INCOME TAX ACT, 1961 PAGE 9 OF 13 ARE ISSUED FOR ASSESSMENT YEAR 2004 - 05 TO 2009 - 10, IN THE CASE OF M/S. NEW CITY DEVELOPERS PVT LTD I.E. THE ASSESSEE COMPANY 8. THE ABOVE SATISFACTION NOTE WAS EXPLAINED BY THE ASSESSEE AS UNDER: - IN CONTINUATION OF OUR PREVIOUS LETTERS DT.25.11.2011 WE HEREBY SUBMIT THE FOLLOWING DETAILS PERTAINING TO SEIZED MATERIAL BEARING NO. 34 OF YOUR LETTER DATED 17.08.2011 THE 'PAGE BEARING NO. 73 PARTY - H - L ANNEXURE A - L (A.Y.2009 - 10) PERTAINS TO PHOTOCOPY OF A CHEQUE BEARING NO. 764422 DATED 05.03.2009 FOR RS. 4,00,000/ - DRAWN ON VIJAYA BANK AND THE SAME HAS B EEN ISSUED BY M/S. MAYFIELD PROJECTS IN FAVOUR OF M/S. NEW INDIA CITY DEVELOPERS PVT LTD. THIS CHEQUE HAS DULY BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE COMPANY ON DATED 18.03.2009 , STATEMENT OF ACCOUNT OF M/S. MAYFIELD PROJECTS IN THE BOOKS OF AS SESSEE COMPANY SHOWING THE SAID LEDGER ENTRY HAS ALREADY BEEN SUBMITTED TO YOUR OFFICE. MR. G K GAMBHIR, BEING THE AUTHORIZED REPRESENTATIVE IN THE AOP MAYFIELD PROJECTS ON BEHALF OF NEW INDIA CITY DEVELOPERS PVT LTD, HENCE THE SAME HAS BEEN FOUND AT THE P REMISES OF MR. G.K.GAMBHIR. THE PAGE BEARING NO 155 PARTY - H - 2 ANNEXURE A - L (A.Y.2008 - 09) PERTAINS TO RECEIPT OF DEMAND DRAFT OF RS. 1,33,08,0007 - ISSUED BY MR. MORDHWAJ SINGH. THE SAME HAS BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE COMPANY O N DATED 31.03.2007, STATEMENT OF ACCOUNT OF MR. MORDHWAJ SINGH IN THE BOOKS OF ASSESSEE COMPANY SHOWING THE SAID LEDGER ENTRY IS ENCLOSED HEREWITH.THE SOURCE OF THESE PAYMENTS IS FROM THE COMPANY 'S OWN FUNDS AS WELL AS ADVANCE TAKEN AGAINST THE PROJECT AN D HAVE BEEN DULY REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE COMPANY. THE SAID PAYMENT WAS MADE PAGE 10 OF 13 TO MR MORDHWAJ AGAINST THE LAND DEVELOPMENT AGREEMENT. THE PAGE BEARING NO 60 - 78 PARTY - H - 2 ANNEXURE A - 2 (A.Y.2007 - 08) PERTAINS TO A DEVELOPMENT AGREEMENT ENTERED INTO BY M/S. NEW INDIA CITY DEVELOPERS PRIVATE LIMITED WITH THE LAND OWNERS FOR THE DEVELOPMENT, PROMOTION OF REAL ESTATE PROJECT ON 35. 2062 ACRES LAND @ 10,00,000/ - PER ACRE, AS PER PLAN APPROVED AND SANCTIONED BY CONCERNED AUTHORITIES. M/S. NEW INDIA CITY DEVELOPERS PVT LTD, BEING A GROUP COMPANY, HENCE PAPERS HAVE BEEN FOUND AT THE PREMISES OF THIPL THE TOTAL PAYMENT OF RS. 35205000 / - HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF THE ACCOUNT OF THE COMPANY THE ACCOUNT OF THE LAND OWNERS MENTIONED IN THE DEVELOPMENT AGREEMENT SHOWN THE HEAD 'LOANS & ADVANCES' IN THE BALANCE SHEET OF THE COMPANY. THE SAME HAS PAID OUT OF COMPANY'S OWN FUNDS AS WELL AS ADVANCE TAKEN AGAINST THE PROJECT. THE COPY OF LEDGER ACCOUNT OF THE SAID LAND OWNERS IN THE BOOKS OF THE ASSESEE COMPANY IS ENCLOSED. THE PAGE BEARING NO 61 - 68 PARTY - H - 2, ANNEXURE A - 9 (A.Y.2009 - 10) PERTAINS TO A DEVELOPMENT AGREEMENT BETWEEN M/S. TODAY HOMES AND INFRASTRUCTURE PRIVATE LIMITED, M/S. V G INVESTMENTS PVT LTD & M/S. NEW INDIA CITY DEVELO PERS PRIVATE LIMITED. THE SAID AGREEMENT IS DEVELOPMENT AND PROMOTION OF RESIDENTIAL PROJECT AT SECTOR 51, MAYFIELD GARDENS, GURGAON. M/S NEW INDIA HAS SIGNED THIS AGREEMENT ONLY AS A CONFIRMING PARTY BEING ONE OF THE MEMBER OF AN AOP, MAYFIELD PROJECT TO FULFIL THE TERMS OF THE AGREEMENT BETWEEN THE OWNERS AND DEVELOPERS AND IT HAS NOTHING TO DO WITH THE SHARING OF REVENUE ETC. THE PAGE BEARING NO 66 - 69 PARTY - H - 2, ANNEXURE AA - 1 PERTAINS TO SHARES ISSUED BY M/S. NEW INDIA CITY DEVELOPERS PRIVATE LIMITED TO M/S TODAY HOMES AND INFRASTRUCTURE PRIVATE LIMITED, DETAILS PAGE 11 OF 13 OF WHICH HAVE ALREADY BEEN FILED WITH YOUR OFFICE. THE PAGE BEARING NO 23 - 41 PARTY - H - 17, ANNEXURE A - 4 (A.Y.2007 - 08) PERTAINS TO A DEVELOPMENT AGREEMENT DATED 03.03.2007 ENTERED INTO BY M/S. NEW INDIA CITY DEVELOPERS PRIVATE LIMITED WITH THE LAND OWNERS FOR THE DEVELOPMENT, PROMOTION OF REAL ESTATE PROJECT ON 35.2062 ACRES LAND @ 10,00,000/ - PER ACRE TOTALING TO RS. 3,52,05,000/ - PLUS RS. 15,00,000/ - PER ACRE AS REFUNDABLE AMOUNT TOTALING TO 5 ,28,09,000/ - AS PER PLAN APPROVED AND SANCTIONED BY CONCERNED AUTHORITIES. M/S NEW INDIA CITY DEVELOPERS PVT LTD, BEING A GROUP COMPANY, HENCE THESE PAPERS HAVE BEEN FOUND AT THE PREMISES OF THIPL. RS. 8,80,14,000/ - HAVE BEEN DULY ACCOUNTED FOR IN THE ACCO UNT OF THE LAND OWNERS MENTIONED IN THE DEVELOPMENT AGREEMENT SHOWN UNDER THE HEAD 'LOANS & ADVANCES' IN THE BALANCE SHEET OF THE COMPANY. THE SAME HAS BEEN PAID OUT OF COMPANY'S OWN FUNDS AS WELL AS ADVANCE TAKEN AGAINST THE PROJECT. WE ENCLOSE HEREWITH THE COPY OF LEDGER ACCOUNT OF THESE PARTIES SHOWING THE TOTAL PAYMENT OF RS 8,80,14000/ - AS FOLLOWS: - MR. MORDHWAJ SINGH 2 ,21,80,000/ - MR RAM NARAYAN 2,27,96,000/ - MR.VIKRAMJEET SINGH 2,21,83,000/ - MRBHIM SINGH : 2,08,55,000/ - THE PAGE BEARING NO 43 - 44, ANNEXURE A - 5, PARTY H - 22 PERTAINS TO LIST OF DIRECTORS AND SHAREHOLDERS OF M/S. TODAY HOMES AND INFRASTRUCTURE PRIVATE LIMITED WHICH IS A PART OF ITS SECRETARIAL RECORD. THE PAGE BEARING NO 50 - 58, & 105 - 108, ANNEXURE A - 5, PARTY H - 22 PERTAINS TO A MEMORANDUM OF UNDERSTANDING BETWEEN THE ASSESSEE COMPANY, THIPL & M/S. ULTRA HOME CONSTRUCTION PVT. LTD. TO FORM A CONSORTIUM TO PARTICIPATE IN THE TENDER FOR PAGE 12 OF 13 GROUP HOUSING SCHEME NOIDA FOR THE ALLOTMENT OF PLOT BY NOIDA AUTHORITY. THE ASSES SEE CCMPANY WAS HAVING THE 10% SHARE IN THE SAID CONSORTIUM PROJECT AND THE LEAD MEMBER A3$ M/S TODAY HOMES & INFRASTRUCTURE PVT LTD. THE ASSESSEE COMPANY HAS NOT MADE AN/ PAYMENT OR RECEIVED ANY PAYMENT AGAINST THIS MOA AS THE ROLE & RESPONSIBILITY OF THE ASSESSEE COMPANY WAS TO SUPERVISE THE SAID PROJECT. THE PAGE BEARING NO 113, 116 - 118 ANNEXURE A - 5, PARTY H - 22 PERTAINS TO PROVISIONAL BALANCE SHEET & PROFIT AND LOSS ACCOUNT OF ASSESSEE COMPANY. DETAILS OF SHARE CAPITAL & OTHER LIABILITIES ALONG WITH CON FIRMATION OF PARTY HAVE ALREADY BEEN FILED WITH YOUR OFFICE. THE PAGE BEARING NO 119 - 125, ANNEXURE A - 5, PARTY H - 22 PERTAINS THE PAPERS RELATING TO GROUP HOUSING SCHEME AWARDED TO THE CONSORTIUM IN WHICH THE ASSESSEE COMPANY IS A 10 % SHARE HOLDER THE ASSE SSEE COMPANY HAS NOT MADE ANY PAYMENT OR RECEIVED ANY PAYMENT AGAINST THIS MOA AS THE ROLE & RESPONSIBILITY OF THE ASSESSEE COMPANY WAS FOR THE SUPERVISION OF THE SAID PROJECT WE HOPE THAT YOU WILL FIND THE ABOVE SAID INFORMATION IN ORDER. IF ANY FURTHER I NFORMATION IS REQUIRED; WE WOULD BE PLEASED TO SUBMIT THE SAME. 9. ON PERUSAL OF THE SATISFACTION NOTE AS WELL AS THE REPLY OF THE ASSESSEE DATED 29.11.2011 WE DO NOT FIND ANY REFERENCE TO THE AMOUNT OF RS. 15 LAKHS PERTAINING TO SAVSUVIDA WHICH IS ON ACCOU NT OF ADVANCE AGAINST CAPITAL AGAINST THE PROJECT FINANCE AGREEMENT. FURTHERMORE, THE SEIZED DOCUMENTS ALSO DO NOT REFERRED TO THE ISSUE OF DEPRECIATION, TRAVELLING EXPENSES, LOSS ON SALE OF CAR AS WELL AS OF NOT ALLOWING CARRY FORWARD OF LOSSES. ADMITTEDL Y, THE ASSESSMENT FOR THE PRESENT CASE WAS NOT PENDING AT THE TIME OF SEARCH BECAUSE THE IMPUGNED PAGE 13 OF 13 ASSESSMENT YEAR IS 2005 - 06 FOR WHICH THE DUE DATE OF ISSUE OF NOTICE EXPIRED ON 31.03.2007. THE DATE OF SEARCH IS 26.11.2009 THEREFORE, OBVIOUSLY, ON THE DATE OF SEARCH THE ASSESSMENT FOR THE YEAR UNDER APPEAL WAS CONCLUDED. IN THE PRESENT CASE LOOKING AT THE SATISFACTION NOTE WE DO NOT FIND ANY MATERIAL PERTAINING TO THE ADDITIONS MADE BY THE LD ASSESSING OFFICER AS WELL AS NO SUCH MATERIAL WAS PUT TO OUR ATTENTION BY THE LD AR ON THE IMPUGNED ADDITIONS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN HOLDING THAT THERE IS NO INCRIMINATING MATERIAL UNEARTH DURING THE COURSE OF SEARCH WHICH RELATED TO THE ADDITION AND THEN DELETING THE ADDITION. THEREFORE, THE APPEAL OF THE REVENUE IN VIEW OF THE BINDING DECISION OF THE HON'BLE DELHI HIGH COURT FAILS. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 / 04 / 2017 . - S D / - - S D / - ( BEENA A PILLAI ) (PRASHANT MAHARISHI) JUDICIAL M EMBER ACCOUNTANT MEMBER DATED: 1 0 / 04 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI