SDPL Land & Builders Privtate Limited, Sriganganagar V. ACIT/DCIT, Circle-2, Bikaner

ITA 375/JODH/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7856 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 08-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PROVIDING CROSS
• Keywords: Tangible material; Competent authority; Documents seized
• Section: 147; 131; 69; 148; 142(1); 133A; 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 SDPL Land & Builders Private Limited 44A Industrial Area Sangaria, Sangaria, Rajasthan [PAN: AAQCS 9253 E] (Appellant) Vs. ACIT/DCIT, Circle-02, Bikaner (Respondent) Appellant by Sh. Rajendra Jain (Adv.)& Smt. Raksha Birla (CA) Respondent by Ms Nidhi Nair, Sr. DR Date of Hearing 24.01.2024 Date of Pronouncement 15.04.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 04/10/2023 [here in after ‘CIT(A)/NFAC’ ] for assessment year 2014-15, which in turn arise from the order dated 20.12.2019 passed under section 147/143(3)of the Income Tax Act, by ACIT/DCIT, Circle-02, Bikaner. I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 2 2. In this appeal, the assessee has raised following grounds: - “1. That CIT(A) Circle-2, BKN erred both in law as well as in facts by making addition u/s 69A of IT Act amounting to Rs. 39,75,000/- on account of cash payment made by the assessee in lieu of purchases made during the year under consideration for the construction work. 2. The assessment of interest under sections 234B, and 234C by the CIT was conducted erroneously. 3. No reasonable opportunity has provided to the assessee while completing assessment u/s 147/143(3) of IT. Act.” 3. Succinctly, the fact as culled out from the records is that the original return of income for the A.Y 2014-15 was furnished by the assessee on 26.11.2014 declaring total income of Rs. 12,97,180/-.The case of the assessee was selected for re-assessment and the Notice u/s 148 of the Income Tax Act, 1961 was issued to the assessee vide Notice No. ITBA/AST/S/148/2018-19/1015388027 dated 22.03.2019, after obtaining prior permission/approval of the competent authority i.e. the Joint Commissioner of Income Tax, Range-2 Bikaner, which was duly served upon the assessee. In response to the Notice u/s 148 of the Income Tax Act, 1961, the assessee has filed his return of income for the AY 2014-15 on 29.04.2019 vide e-filing acknowledgement number 468761091290419 declaring therein total income of Rs. 12,97,180/- Subsequently Notice u/s 143(2) was issued to the assessee on 16.09.2019. A survey operation under section 133A of the Income Tax I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 3 Act, 1961 was conducted on 05.02.2018 at the office cum business premises of M/s. Om Sokhal Builders and Construction Private Limited at 105, Ganapati enclave, Central Spine, Vidhyadhar Nagar, Jaipur. 3.1 During the course of survey action, certain incriminating documents and digital data were found and impounded as per Annexure-A, Exhibit 1 to 11. During post survey enquiry on analysis of digital data contained in the working copy of Exhibit-11 of Annexure-A, an excel file in the name of pawan.xlsx was recovered from the data of Pawan’s Laptop. On examination to the excel file ‘pawan.xlsx’ it was noticed that a worksheet having caption ‘ARAD Flat”. contains details of flats sold in the Aradhna Residency Apartment developed by M/s Om Sokhal Builders and Construction Pvt.Ltd.. This excel file contain name of the purchaser of flat, flat number, area of the flat, rate adopted, total sale value, amount received on booking with date and mode and details of the instalments received. On further examination of the aforesaid worksheet, it is observed that against the amount received on bookings and instalments, details of cheques are mentioned. However, on many occasions, it was observed that only letter ‘C’ has been mentioned against mode of payment. During post survey enquiry, summon u/s 131 of the Income Tax Act, 1961 was issued to Shri Ram Gopal Sokhal and I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 4 in response, he attended the office on 29.03.2018 and his statement was recorded on oath u/s 131 of the Income tax Act, 1961. In his statement Shri Ram Gopal Sokhal has been confronted with the worksheet "ARAT FLAT" in the excel file 'pawan.xlsx' and vide Q. No 5 of his statement he was asked to explain the entries recorded in this worksheet. In his reply, Shri Ram Gopal Sokhal stated that his sheet contains details of flats sold to various persons in the project 'Aradhna Residency' which was constructed by M/s Om Sokhal Builders & Constructions Pvt. Ltd. Shri Ram Gopal Sokhal stated that total sale consideration recorded in this worksheet, some portion of the consideration received was duly recorded in this regular books of account, however, some portion of the sale consideration that received in cash was not recorded in the regular books of accounts. He further clarified that the amounts in the sheet in front of which "C"has been written are the cash part received on account of sale of flats as "On Money" which are not recorded in the regular books of accounts of company and he voluntarily offered Rs 5.10 crores as undisclosed income of his group which he has received as on money in cash in lieu of sale of flats of Aradhna Residency apartment. I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 5 3.2 Further, during the course of survey action, tally data of M/s Om Sopkhal Builders and Developers has been taken on the Hard Disc and inventoried as Annexure-A, Exhibit 11. The entries available on the 'pawan.xlsx has been verified with the entries in his books of account maintained in the tally and it is seen that all the cheque/RTGS/DD etc. entries are duly reflected in the books of accounts but all the cash entries are not recorded in the regular books of account. Hence from the statement of Shri Ram Gopal Sokhal and the evidences gathered during the course of survey action and post survey enquiries, it is evidently clear that entries which contains letter "C" are cash entries and that the cash was taken as On Money fromthe purchasers. The entire cash is not found recorded in regular books of accounts of M/s Om Sokhal Builders & Constructions Pvt. Ltd. Further, on analysis of the data received from the Investigation Wing of the Jaipur, it was noticed that the assessee, during the previous year, has purchased the flats and paid On Money in cash for purchasing flats. 3.3 Thus as per the above information, M/s SDPL Land & Builders Private Limited had flats in Aradhna Residency during the F.Y. 2013-14 corresponding to A.Y. 2014- 15 were reconstructed by M/s Om Sokhal Builders and Construction Pvt. Ltd.against purchase of flats, assessee I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 6 had made payment of on money amounting to Rs. 39,75,000/- in cash which was not recorded in the books of account of the assessee and the same was his undisclosed/unexplained money which was not shown in his regular books of accounts maintained during the year under consideration. M/s SDPL Land & Builders Private Limited had purchased 20 flats in Aradhna Residency during the FY. 2013-14 and made payment of on money amounting to Rs. 39,75,000/- in cash which was not recorded in the books of account. The assessee was also said with Notice u/s 142(1) of the Income Tax Act, 1961. 3.4 In response to the notice assessee vide his letter dated 20.12.2019 has submitted a copy of ledger account of M/s Om Sokhal Builders & Constructions Pvt. Ltd Land in M/s SDPL Land & Builders Private Limited which was stamped and signed by Shri Ram Gopal Sokhal i.e. Director of m/s Om Sokhal builders & constructions Pvt. Ltd. But since material evidences were collected from the office of M/s Om Sokhal Builders & construction Pvt. Ltd. and during the course of survey proceedings u/s 133A and statements u/s 131 of the IT Act, 1961 on Ram Gopal Sokhali.e. Director of M/s Om Sokhal Builders & Constructions Pvt. Ltd., were recorded wherein he had expressly confessed/agreed that M/s SDPL Land & Builders Private Limited have I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 7 paid cash in lieu of purchase at Aradhana Residency which was paid as On Money. Therefore the signed copy of the ledger account furnished by the assessee which is signed by Sh. Ram Gopal Sokhal i.e. Director of M/s Om Sokhal Builders & Constructions Pvt. Ltd., cannot be accepted and does not constitute a valid document/proof or evidence to be produced on or which relief can be provided to the assessee. 3.5 On the other hand, the ld. AO noted that the assessee had not produced any concrete details/information/documents in respect of the transactions made by him with M/s Om SokhalBuilders & Constructions Pvt. Ltd. during the year under consideration as regards the purchases of flat in Aradhana Residency Apartment which evidently proves that assessee has nothing to say as regards the payment of on money of Rs. 39,75,000/-, in cash, in lieu of purchases made by him in Aradhana Residency Apartment being constructed by M/s OmSokhal Builders & Constructions Pvt. Ltd. therefore, the "On Money" of Rs. 39,75,000/-, paid by the assessee in cash to M/s Om Sokhal Builders & Constructions Pvt. Ltd. is treated in unexplained money under section 69A of the Income Tax Act, 1961 and added to his total income. I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 8 4. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 6.1 A perusal of the assessment order reveals that the appellant, during the course of assessment proceedings, was given ample opportunity to substantiate its claim regarding the on money paid. However, the appellant while submitting its reply in response to the notice u/s 142(1), could not substantiate his claim before the AO, resulting which the AO has made the impugned addition. The AO, while making the addition u/s 69A has recorded his specific findings, which read as under: "In response to the above, the assessee vide his letter dated 20.12.2019 has submitted a copy of ledger account of M/s Om Sokhal Builders & Constructions (P) Ltd in M/s SDPL Land & Builders (P) Ltd. which was stamped and signed by Shri Ram Gopal Sokhali.e. Director of M/s Om Sokhal Builders & Constructions (P) Ltd but since material evidences were collected from the office of M/s Om Sokhal Builders & Constructions (P) Ltd. and during the course of survey proceedings u/s 133A and statements u/s 131 of the IT Act, 1961 of Ram Gopal Sokhal i.e. Director of M/s Om Sokhal Builders & Constructions (P) Ltd. were recorded wherein he had expressly confessed/agreed that M/s SDPL Land & Builders (P) Ltd. have paid cash in lieu of purchase at Aradhana Residency which was paid as signed by Shri Ram Gopal Sokhal i.e. Director of M/s Om Sokhal Builders & Constructions (P) Ltd. cannot be accepted and does not constitute a valid document/proof or evidence to be produced or on which relief can be provided to the assessee. On the other hand, the assessee had not produced any concrete details /information/documents in respect of the transactions made by him with M/s Om Sokhal Builders & Constructions (P) Ltd. during the year under consideration as regards the purchases of flat in Aradhana Residency Apartment which evidently proves that that assessee has nothing to say as regards the payment of on money of Rs.39,75,000/-, in cash, in lieu of purchases made by him in Aradhana Residency Apartment being constructed by M/s Om Sokhal Builders & Constructions (P), therefore, the "On Money" of Rs. 39,75,,000/- paid by the assessee in cash to M/s Om Sokhal Builders & Constructions (P) Ltd. is treated in unexplained money under section 69A of the Income Tax Act, 1961 and added to his total income." 6.2 As per section 69A "Unexplained money, etc. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the booksof account, if any, maintained by him for any source of income, and the assessee I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 9 offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the 4 Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." Thus, it is amply clear that the appellant through its submissions made before the AO, in support of its claim regarding the on money paid, could merely file the copy of ledger account of M/s Om Sokhal Builders &Constructions (P) Ltd in M/s SDPL Land & Builders (P) Ltd which was stamped and signed by Shri Ram Gopal Sokhalie. Director of M/s Om Sokhal Builders & Constructions (P) Ltd. Since material evidences were collected from the office of M/s Om Sokhal Builders & Constructions (P) Ltd. and during the course of survey proceedings u/s 133A and statements u/s 131 of the IT Act, 1961 of Ram Gopal Sokhal i.e. Director of M/s Om Sokhal Builders & Constructions (P) Ltd. were recorded wherein he had expressly confessed/agreed that M/s SDPL Land & Builders (P) Ltd. have paid cash in lieu of purchase at Aradhana Residency which was paid as signed by Shri Ram Gopal Sokhalie. Director of M/s Om Sokhal Builders & Constructions (P) Ltd., the submission of the appellant cannot be accepted. Therefore, the addition made by the AO u/s 69A is fully justified and sustainable in the eyes of law. The AO, while making the impugned addition, has not committed any illegality as stated by the appellant. 6.3 The following case laws are emphasized here:- (i) The Hon'ble High Court of Delhi in the case of Jatinder Pal Singh V. Deputy Commissioner of Income Tax, Central Circle-9 (ii) The Hon’ble Supreme Court in the case of Chuharmal vs. CIT (1988) 172 ITR 250 (iii) The Hon’ble High Court of Punjab and Haryana in the case of Smt. Kavita Chandra vs. Commissioner of Income-tax (Appeals), Panchkula (iv) The Hon’ble Supreme Court of India in the case of Shashi Garg vs. Principal Commissioner (v) The Hon’ble High Court of Allahabad in the case of Sajid Khan vs. Principal Commissioner of Income Tax (vi) The Hon’ble High Court of Kerala in the case of K.P. AbdulaMajeed vs. Assistant Commissioner of Income Tax, Circle 1(1) (vii) The Hon’ble High Court of Kerala in the case of C.K. Abdul Azeez vs. Commissioner of Income Tax, Central Circle, Calicut. (viii) The ITAT Bench Delhi in the case of Leela Devi vs. ITO, Ward 35(8), New Delhi The appellant assessee was accorded sufficient and ample opportunity to substantiate his claim with respect to payment of on money but failed to do so. Considering the entirety of facts, circumstances and material on record and looking into preponderance of probabilities here the appellant has miserably failed to substantiate its claim amounting to Rs.39,75,000/- treated as unexplained money and has also not even been able to produce any I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 10 concurrent evidence in this regard. The appellant has also not filed any submission during the appellate proceedings too. The AO is fully justified in making the addition amounting Rs.39,75,000/- found to have been paid by it as on money (cash) to M/s Om Sokhal Builders & Constructions (P) Ltd. In this condition, the addition made by AO, is factually and legally correct. 5. The ld. AR of the assessee in support of the grounds so raised by the assessee submitted that the ld. AO has merely relied upon 3 rd information, the ld. AO has not provided any opportunity for cross examination to the assessee before applying the finding of the facts of the assessee. On oral evidence has not value till the same is tested by the other party and therefore, relying on the decision of Jurisdictional High Court in case of PCIT vs. M/s Om Metal Real Estate Pvt. Ltd. In D.B. Income Tax Appeal No. 85/2019 dated 20.07.2019 the addition is not sustained and is required to be deleted. 6. Per contra, the ld. DR heavily relied on the facts that there was survey conducted and the digital evidence in the form 'pawan.xlsx' work sheet found and based on that statement u/s 131 was recorded and based on that statement, the information was collected and thereby the addition has relied is made in the hands of the assessee the case law relied upon by the assessee are of different fact here there is no of not being on money and account of details information found recorded in the I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 11 digital evidenceexcel sheet named pawan.xlsx, during the course of survey and therefore, he relied upon the order of the lower authorities. 7. We have heard the rival contention and perused the material available on record. The Bench noted that during the survey conducted at the office of M/s OM SoKhal Builders & Construction Pvt. Ltd. certain incriminating documents and digital data were found and impounded during the post enquiry statement u/s 131 of the Act was recorded of Shri Ram Gopal Sokhal wherein he has confronted with the worksheet “ ARAT FLAT” in the Excel filed named “pawan xlsx” wherein Mr. Ram Gopal Sokhal stated that even excel sheet contend details of flat sold to various persons in project of Aradhna Residency which was constructed by M/s Om Sokhal Builders & Constructions Pvt. Ltd. And that total sale consideration recorded in this worksheet, some portion of the consideration received was duly recorded in these books of account; however, some portion of consideration received in cash was not recorded in the regular books of account. He further confirmed that “C” means on money received on account of sale of flats and in that survey proceedings of M/s Om Sokhal Builders & Constructions Pvt. Ltd. The company voluntarily Offered a sum of Rs. 5.10 Crores as undisclosed income on further analysing of the said information the addition made in the hands of the assessee over a sum of Rs. 39,75,000/- alleging the I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 12 assessee that the company has paid cash to the said builder company. Aggrieved from the said finding of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) has also merely based on the fact of discloser made by M/s Om Sokhal Builders & Construction Pvt. Ltd., has confirmed the addition in the hands of the assessee. Before us, in support of the grounds so raised by the ld. AR of the assessee heavily supported that merely based on 3 rd party evidences and that too without confronting to the assessee by providing cross examination and the related evidence the addition cannot be made in the hands of the assessee. In support of these contentions, the ld. AR of the assessee has relied upon the finding of the Hon’ble Jurisdictional High Court in the case of Pr.CIT vs. M/s Om Metal Real Estate Pvt. Ltd (supra) wherein the Hon’ble jurisdictional High Court as held in para 1 to 3 which is reproduced as under:- “1.The Revenue claims to be aggrieved by an order of the Income Tax Appellate Tribunal (ITAT), whereby the CIT(A)'s order, was affirmed and that of the Assessing Officer(AO) bringing to tax the amounts to the tune of about Rs. 9.25 crores for the Assessment Year 2009-10, was set aside. The assessee was subjected to search alleging fresh information which amounted to tangible material, and reasonable relief under Section 147 of the Income Tax Act. Previously concluded assessment was re-opened under Section 147- by notice dated 10.04.2014. The Assessing Officer referred to certain documents seized in search proceedings relating to another company and the copy of the agreement dated 07.08.2006, stating that the assessee had paid Rs.9.25 crores on account of on-money of its 25% share for purchase of land I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 13 by M/s Om Metals Developers (P) Ltd. during the Financial Year 2008-09 (relevant to the Assessment Year 2009-10). The AO made an addition under Section 69 of the Act. The AO also took note of the fact that in respect of another share holder company, M/s Maheshwari Mega Ventures Ltd., which held 35% share in M/s Om Metals Developers (P) Ltd., the similar addition had been made due to its on-money payment towards same transaction of M/s Om Metals Developers (P) Ltd. The CIT(A), to whom the assessee approached, took note of the development in M/s Om Metals Developers (P) Ltd. as well as M/s Maheshwari Mega Ventures Ltd., and held that even it was presumed that on-money payment of Rs. 37 crores was towards purchase of land at Hyderabad, then action was to be taken against M/s Om Metals Developers (P) Ltd. and not in the hands of the assessee. The CIT(A) also analysed the involvement of M/s Maheshwari Mega Ventures Ltd. 2. After an overall scrutiny and analyais of the circumstances and the documents, the CIT(A) set aside the amount added in the hands of the assessee. The ITAt after considering all the circumstances and re-appreciating the material, has affirmed the ld. CIT(A)’s order holding as follows:- “16. We have given a careful consideration to the above facts and contentions so advanced by the Assessing officer. However, for varied reasons, as we have noted below, we are unable to accede to the said contentions of the Assessing officer. Firstly, we find that the person who has written the aforesaid noting Le, Mr. S.Ka Jain has not been examined by the Revenue. Secondly, the statement of Mr. Padam Singhee who has vouched for the particulars of the said notings, his statement has also not been produced on record by the Revenue. Thirdly, Mr. Ramesh Kumar Somani at whose premises the particular piece of document was found, he has not been confronted by the Revenue and even his statement has not recorded. Further, the sellers from whom the land has been purchased by M/s Om Metals Developers Pvt Ltd and who would have been the recipient of said on-money, their I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 14 statements have not been recorded and there is nothing on record which suggest that they have accepted the receipt of on-money by M/s Om Metals Developers Pvt Ltd or through its shareholders. As we have noted above, even in case of M/s Om Metals Developers, the Revenue itself, on appreciation of the said seized document and noting thereon, has accepted the fact that there is no on- money payment in respect of purchase of land. Even on perusal of the said noting of the seized document, we do not find any mention of the assessee company. Therefore, we find that the Assessing Officer has solely relied on the findings of the Investigation Wing and has neither made any material which may lead to the conclusion that assessee company has made on-money payment for purchase of the land under consideration.” 3. We have considered the submissions of the Revenue; the finding of the Appellate commissioner and ITAT are entirely factual. No substantial question of law arises.” Respectfully following the finding of the Hon’ble Jurisdictional High Court and considering the fact it is non disputed fact that the assessee was not provided the complete details information collected from the third partyand the opportunity to cross examine the party who alleged that the assessee had made cash payment for purchase of flats. Thus, respectfully following judgments of the Hon’ble Jurisdictional High Court having similar fact wherein it has been held that “Assessing Officer has solely relied on the findings of the Investigation Wing and has neither made any material which may lead to the conclusion that assessee company has made on-money payment for purchase of the land under I.T.A. No. 375/Jodh/2023 Assessment Year: 2014-15 15 consideration.”Based on these information we delete the addition of Rs. 39,75,000/- made in the hands of the assessee. In terms of these observation in ground No. 1 and 3 raised by the assessee is allowed. 7.1 As regards ground No. 2 raised by the assessee being consequential in nature and the same is not required to be adjudicated. In the result, the appeal of the assessee is allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Santosh/Ganesh Kumar, PS (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order