DCIT, Dehradun V. Sh. Ramesh Batta, Dehradun

ITA 3966/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6373 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 23-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Business income; Cost of acquisition; Date of conversion; Fair market value
• Section: 80C; 143(3); 142(1); 153A; 115JB; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.3966/DEL/2013 ASSESSMENT YEAR : 2007-08 DCIT, CENTRAL CIRCLE, DEHRADUN. VS. RAMESH BATTA, 81/210, KAULAGARH ROAD, DEHRADUN. PAN : ABGPB 1527 N (APPELLANT) (RESPONDENT) C.O. NO.242/DEL/2013 (IN ITA NO.3966/DEL/2013) ASSESSMENT YEAR : 2007-08 RAMESH BATTA, 81/210, KAULAGARH ROAD, DEHRADUN. VS. DCIT, CENTRAL CIRCLE, DEHRADUN. PAN : ABGPB 1527 N (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI S. S. RANA, CIT(DR) ASSESSEE BY : SHRI SALIL KAPOOR & SHRI SUMIT LALCHANDANI, ADV. DATE OF HEARING : 03-03-2017 DATE OF PRONOUNCEMENT : 29-03-2017 O R D E R PER S.V. MEHROTRA, A.M : THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 04.03.2013 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS)-1, DEHRADUN, U/S 153A(1)(B) R.W. SECTION 143(3) OF THE INCOME TAX ACT, 1961 2 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 (IN SHORT THE ACT) RELATING TO ASSESSMENT YEAR 20 07-08. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN THE APPEAL FILED BY R EVENUE. 2. BOTH, THE APPEAL AND CROSS OBJECTION, ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, IN THE RELEVANT ASSESSMENT YEAR DERIVED INCOME FROM HOUSE PROPERTY, INTEREST AND REMUNERATION FROM FIRMS, TRADING BUSINESS IN LANDS AND CAPITAL GAINS. A SEARCH WAS CARRIED OUT IN THE PREMISES OF THE ASSES SEE ON 04.03.2009. ACCORDINGLY, NOTICE U/S 153A(1)(A) OF THE ACT WAS I SSUED ON 18.01.2010. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED HIS RET URN OF INCOME ON 20.10.2010 DECLARING A TOTAL INCOME OF RS.19,30,160/-. ON THE BASIS OF SEIZED MATERIAL AND THE RETURN ORIGINALLY FILED U/S 139, A QUESTION NAIRE AND NOTICE U/S 142(1) OF THE ACT DATED 06.10.2010 WAS SERVED UPON THE ASS ESSEE. A NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE ON 23.11.2010. T HE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD FILED RETURN OF INCOME U/ S 139 ON 20.10.2007 AT AN INCOME OF RS.19,30,160/-. THE ASSESSMENT WAS COMPL ETED AT A TOTAL INCOME OF RS.1,85,95,310/-, INTER-ALIA, MAKING ADDITION ON ACCOUNT OF SALE OF PLOT NO.91 TO M/S AGGARWAL ASSOCIATES LTD. AS PER MEMORA NDUM OF UNDERSTANDING (MOU) AT RS.20 LAKHS AND LONG TERM CA PITAL GAIN ON CONVERSION OF LAND AT SAILOK AT RS.10,62,472/- AS U NDER :- 3 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 INCOME FROM HOUSE PROPERTY LOSS FROM HOUSE PROPERTY (SOP) (-) 1,50,000/- BUSINESS INCOME 1,52,51,423/- PROFIT ON SAILOK SALE OF LAND AT MANAKMAU 5,74,450/ - EXPENDITURE ON ABOVE LAND OF MANAK MAU AND SAILOK 5,35,807/- REM./INTT. FROM PARTNERSHIP FIRM 38,643/- BATTA BROS 1,08,000/- R.B. COAL CO. 1,20,000/- R.B. BRICK CO. 2,58,000/ - 4,86,000/- ADDITION ON ACCOUNT OF SALE OF PLOT NO.91 TO AGGARWAL ASSOCIATES LTD. AS PER MOU AS DISCUSSED ABOVE. 20,00,000/- TOTAL BUSINESS INCOME 1,77,76,066/- LONG TERM CAPITAL GAINS: CAPITAL LOSS MANAK MAU CAPITAL GAIN ON CONVERSION OF LAND AT SAILOK AS DISCUSSED IN THE ASSESSMENT ORDER (-) 3,551/- 10,62,472/- TOTAL INCOME FROM LT CAPITAL GAINS- 10,58,921/- INCOME FROM OTHER SOURCES 10,326/- GROSS TOTAL INCOME 1,86,95,313/- LESS DEDUCTION U/S 80C 1,0 0,000/ - 1,85,95,313/- ROUNDED OFF AS PER SECTION 288A 1,85,95,310/- 4. LD. CIT(A), WHILE PARTLY ALLOWING THE ASSESSEES APPEAL, CONFIRMED THE ADDITION IN PRINCIPLE ON ACCOUNT OF SALE OF PLO T NO.91 TO AGGARWAL ASSOCIATES LTD. AND DELETED THE ADDITION IN REGARD TO PROFIT OF BUSINESS IN REGARD TO SAILOK LAND. BEING AGGRIEVED, THE DEPART MENT IS IN APPEAL BEFORE THE TRIBUNAL AND THE ASSESSEE HAS FILED CROSS OBJEC TION. 5. FIRST, WE TAKE UP THE DEPARTMENTS APPEAL. THE DEPARTMENT HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- 1. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN REDUCING THE AMOUNT OF LONG TERM CAPITAL GAIN BY RS.6,61,831/- BY RE-DETER MINING THE LAND PRICE WITHOUT APPRECIATING THE FACT THAT THE ADDITION WAS MADE BY THE A.O. ON THE BASIS OF THE MATERIAL ON RECORD. 4 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 2. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,40,03,327/- ON ACCOUNT OF PROFIT ON SALE OF LA ND AT SAILOK WITHOUT APPRECIATING THE FACT THAT IN TERM OF PROVISIONS OF SECTION 292C , THE DOCUMENT COLLECTED DURING THE SEARCH IS AN ADMISSIBLE EVIDENCE. 3. THAT THE ORDER OF THE LD.CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS WHICH NEEDS TO BE VACATED AND THE ORDER OF THE A.O. BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUND OF APPEAL AS STATED ABOVE AS AND WHEN NEED F OR DOING SO MAY ARISE. 6. BRIEF FACTS APROPOS GROUND NO.1 ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDING, IT WAS FOUND THAT THE ASSESSEE HAD CONV ERTED THE AREA OF THE LAND AT SAILOK FALLING IN HIS SHARE MEASURING 20400 SQ.M TRS. AS STOCK IN TRADE IN THE ASSESSMENT YEAR 2005-06. FOR THE PURPOSES OF T HE COST OF ACQUISITION, THE ASSESSEE HAD ADOPTED FAIR MARKET VALUE IN THAT AREA AS ON 01.04.1981 AT RS.58.50 PER SQ.MTRS.. APART FROM THAT, THE ASSESS EE HAD ALSO CLAIMED IMPROVEMENT COST IN THE FINANCIAL YEARS 1993-94 AND 1996-97 AT AN INDEXED VALUE OF RS.16.80 AND RS.14.58 PER SQ.MTRS. RESPECT IVELY. ACCORDINGLY, ON THE BASIS OF THESE COSTS, THE ASSESSEE HAD CALCULAT ED THE CAPITAL GAIN PER SQ. MTRS. CHARGEABLE IN THE YEAR OF SALE AT RS.119.72 P ER SQ.MTRS.. THE ASSESSING OFFICER NOTICED THAT THE LAND HAD BEEN AC QUIRED BY THE ASSESSEE PRIOR TO 01.04.1981. HE REFERRED TO THE ASSESSMENT YEARS 2003-04 AND 2004-05 AND POINTED OUT THAT THE LAND WAS ALSO SITU ATED AT MAUJA NIRANAJANPUR WHERE THE OTHER LANDS OF THE ASSESSEE WERE ALSO SITUATED AND THE FAIR MARKET VALUE OF ALL SUCH LANDS AT MAUJA NI RANAJANPUR HAD BEEN ADOPTED AT RS.40/- PER SQ.MTRS. DURING THE COURSE O F THOSE ASSESSMENTS. HE 5 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 POINTED OUT THAT THIS VALUE HAD BEEN ADOPTED BY THE ASSESSEE IN ITS OWN CASE IN RESPECT OF THE OTHER LANDS AT MAUJA NIRANAJANPUR WHICH WAS ALSO BEING CONVERTED INTO STOCK IN TRADE IN RESPECTIVE YEARS A ND SOLD THROUGH M/S PRAKASH CHAND BATTA & CO. AS UNDER :- COST ON THE DATE OF CONVERSION PER SQ.MTS. INDEXED COST OF ACQUISITION (40 X 480) (COST INFLATION INDEX AS ON 1.4.2004 IS 480.) ON DATE CONVERSION PER SQ.MT. RS.192/- TOTAL AVAILABLE AREA 20400 SQ.MTS. TOTAL INDEXED COST OF ACQUISITION ON THE DATE OF CONVERSION RS.3916800/ - SALEABLE AREA ON CONVERSION INTO STOCK IN TRADE AS PER APPROVAL OF MDDA 13260 SQ.MTS. INDEXED COST OF ACQUISITION OF SALEABLE AREA ON CONVERSION INTO STOCK IN TRADE RS.295.38 FAIR MARKET VALUE ON THE DATE OF CONVERSION RS.600/- PER SQ.MT. CAPITAL GAINS PER SQ. MTS. CHARGEABLE IN THE YEAR OF SALE (600-295.38) RS.304.62 AREA SOLD DURING THE YEAR IN SQ.MTS. 3346.56 SQ.MT. CAPITAL GAINS FOR THE YEAR VALUE ON CONVERSION AS DISCUSSED ABOVE RS.2007937/- (RS.600 X 3346.56 SQ. MTS.) LESS: INDEXED COST OF ACQUISITION (RS.295.38 X 3346.56 SQ.MTS.) RS.9,88,506/- CAPITAL GAINS RS.10,19,430/- 7. AFTER CONSIDERING THE FACTS FOR ASSESSMENT YEARS 2003-04 AND 2004-05 AND ALSO THE INSPECTORS REPORT, THE ASSESSING OFFI CER ASSESSED THE CAPITAL GAINS AFTER TAKING THE FAIR MARKET VALUE AS ON 01.0 4.1981 AT RS.40/- AND, ACCORDINGLY, DETERMINED THE CAPITAL GAINS AT RS.10, 19,430/- AGAINST THE CAPITAL GAINS OF RS.4,00,641/- DISCLOSED BY THE ASS ESSEE. HE FURTHER ADDED THE CAPITAL GAINS ON CONVERSION OF PLOT IN THE YEAR OF SALE WHICH WAS 6 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 ASSESSED AT RS.43,042/-. LD. CIT(A) DELETED THE AD DITION FOR THE FOLLOWING REASONS :- (A) COST OF ACQUISITION OF THE PROPERTY WAS SHOWN A T RS.58.50 PER SQ.MTRS. IN THE ORIGINAL RETURNS OF INCOME FOR ASSE SSMENT YEARS 2005- 06, 2006-07 AS WELL AS 2007-08. REGULAR ASSESSMENT S U/S 143(3) HAD BEEN MADE FOR ASSESSMENT YEARS 2005-06 AND 2006-07 AND THE COST ADOPTED BY ASSESSEE HAD BEEN ACCEPTED BY ASSESSING OFFICER. (B) THE SEARCH DID NOT YIELD ANY EVIDENCE WHICH COU LD SUBSTANTIATE THE ASSESSING OFFICERS DOWNWARD REVISION OF THE CO ST OF ACQUISITION IN THE IMPUGNED ASSESSMENT. (C) THE PROPERTY IN QUESTION IS SITUATED AT VILLAGE KANWALI; NOT AT NIRANJANPUR AS BELIEVED BY THE ASSESSING OFFICER. THUS, THE DOWNWARD REVISION WAS BASED ON THE ASSESSEES OWN F IGURE WHICH PERTAINED TO ANOTHER PIECE OF LAND. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE RECORD OF THE CASE. ADMITTEDLY, NO INCRIMINATI NG MATERIAL WAS FOUND IN THE COURSE OF SEARCH WHICH COULD JUSTIFY DOWNWARD R EVISION OF THE COST OF ACQUISITION FROM RS.58.52 TO RS.40 PER SQ.MTRS.. M OREOVER, THE FINDINGS RECORDED BY LD. CIT(A) HAVE NOT BEEN CONTROVERTED B Y THE DEPARTMENT. IF THE VERY PREMISE ON WHICH THE ADDITION WAS MADE HAS NO LEGS TO STAND THEN THE ADDITION HAD RIGHTLY BEEN DELETED BY LD. CIT(A) . IN THE RESULT, GROUND NO.1 IS DISMISSED. 7 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 9. BRIEF FACTS APROPOS GROUND NO.2 ARE THAT THE ASS ESSEE HAD DISCLOSED A TOTAL SALE OF RS.64,21,470/- IN RESPECT OF 3346.56 SQ.MTS. OF LAND AT SAILOK AS PER THE SALE DEED EXECUTED THROUGH HIM. THE ASSESS ING OFFICER OBSERVED THAT IN THE CASE OF R.B. ENTERPRISES, WHICH IS A FI RM WHERE THE FAMILY OF HIS BROTHER SHRI RAKESH BATTA IS PARTNER, DURING THE CO URSE OF ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08, IT WAS FOUND FROM THE SEAR CH MATERIAL THAT THE SALES WERE BEING MADE OVER AND ABOVE THE AMOUNTS DI SCLOSED IN THE REGISTERED SALE DEEDS. HE OBSERVED THAT THESE SALE RATES WERE AS PER THE PREVAILING SALE PRICES IN THAT AREA AND, ACCORDINGL Y, THE SAME WERE CHARGED FROM THE BUYERS. HE NOTED THAT A TOTAL OF 129 PLOT S HAD BEEN CARVED OUT IN THAT COLONY AND OUT OF THAT 64 PLOTS FELL IN THE SH ARE OF THE ASSESSEE SHRI RAMESH BATTA AND REST IN THE SHARE OF HIS BROTHER A ND FAMILY THROUGH M/S R.B. ENTERPRISES. HE, INTER-ALIA, OBSERVED AS UNDER :- KEEPING IN VIEW THE EVIDENCES OF UNACCOUNTED SALES FOUND IN THE CASE OF R.B.ENTERPRISES, THE ASSESSEE ALSO WAS ISSUED A SHO W CAUSE VIDE LETTER DT. 8.12.2010 , THE RELEVANT PARA IS REPRODU CED AS UNDER:- 'YOU HAVE SOLD PLOTS AT SAILOK AT DIFFERENT SALE CO NSIDERATIONS RANGING BETWEEN RS.1309/- PER SQ.MTS. TO RS.2938/-P ER SQ. MTS WITHIN SAME COLONY AT SAILOK. THERE IS A STAGGERING DIVERS ITY IN THE SALE RATE WITHIN THE SAME COLONY AND WITHIN THE SAME FINANCIA L YEAR. YOUR ATTENTION IS INVITED TO THE CASE OF R.B.ENTERPRISES IN THE ASSESSMENT YEAR 2006-07. AS PER THE DETAILS OF SEIZED MATERIAL , THE ACTUAL SALE RATES IN THE SAILOK HAS BEEN DISCUSSED IN THE SHOW CAUSE ISSUED TO THAT FIRM IN RESPECT OF THE PLOTS FALLING IN THE SH ARE OF SHRI RAKESH BATTA & OTHERS. A COPY OF THE SHOW CAUSE ISSUED TO THEM FOR A.Y.2007-08 IS ENCLOSED FOR READY REFERENCE. FROM I T, IT IS FOUND THAT THE RATES IN THE F.Y.2006-07 WERE EVEN MORE THAN TH E RATES DISCLOSED BY YOU. YOU ARE REQUESTED TO EXPLAIN AND SHOW CAUSE AS TO WHY THE SAME RATE MAY NOT BE APPLIED TO THE PLOTS SOLD BY Y OU IN THE RELEVANT 8 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 FINANCIAL YEAR IN THE SAME COLONY AND THE DIFFERENC E AMOUNT OF SALE CONSIDERATION ADDED TO YOUR INCOME. 10. THE ASSESSEE REPLIED AS UNDER :- REGARDING SAI LOK AND YOUR CONTENTION OF TAKING TH E SALE RATES AS CHARGED BY R.B ENTERPRISES WE WOULD LIKE TO POINT O UT THAT THE PLOTS ARE SOLD AS PER THE CONDITION OF DEMAND AND SUPPLY, LOC ATION OF THE PLOT, DIRECTION OF THE PLOT WITH REFERENCE TO THE CONDITI ONS OF SUN, WIND AND VASTU. AS EACH PLOT AND EACH BUYER IS DIFFERENT THE RATES ARE ALSO DIFFERENT KEEPING IN VIEW THE PERSONAL PREFERENCES OF THE PUR CHASERS AND THE QUALITY OF THE PLOT. IN VIEW OF THE ABOVE THE SALE RATES OF THE PLOTS AR E DIFFERENT. AT THIS STAGE WE WOULD LIKE TO POINT OUT THAT ALL SALE DEEDS ARE EXECUTED AS PER THE ACTUAL RATES. COMING TO THE R.B ENTERPRISES WE WOUL D LIKE TO POINT OUT THAT YOUR ASSESSEE HAS GOT NOTHING TO WITH THIS FIRM. YO UR ASSESSEE AND M/S R.B ENTERPRISES HAVE DIFFERENT PLOTS. YOUR ASSESSEE SELLS PLOTS WHEREAS R.B ENTERPRISES IS INTO CONSTRUCTION. THE CONDITION S EFFECTING SALES ARE DIFFERENT AND SEPARATE IN THE CASE OF YOUR ASSESSEE AND DIFFERENT IN THE CASE OF M/S R.B ENTERPRISES. AS THERE IS NO COMMON PLATFORM BETWEEN THE TWO ENTITIES THE RESULTS/ RATES ETC CANNOT BE COMPA RED. AS SUCH THERE IS NO JUSTIFICATION IN APPLYING ANY RATE OTHER THAN THE R ATES AS REFLECTED IN THE SALE DEEDS. ' 11. AFTER CONSIDERING THE ASSESSEES REPLY, THE ASS ESSING OFFICER, INTER- ALIA, OBSERVED THAT THOUGH BOTH ARE THE DIFFERENT ENTITIE S BUT THE FACTS THAT EMERGE IS THAT THE EVIDENCE HAVE BEEN FOUND WHICH S UGGESTED THE ACTUAL FAIR MARKET RATES OF THE PLOTS IN THAT COLONY DURING THE PERIOD AND THESES EVIDENCES COULD NOT BE IGNORED. HE, INTER-ALIA, OBSERVED AS UNDER :- THE ASSESSEE IS HAVING 64 PLOTS IN THE APPROVED AN D DEVELOPED COLONY AND ACCORDINGLY THE SALE RATES ARE APPLIED IN THIS CASE KEEPING IN VIEW THE INSTANCES OF ACTUAL SALE CONSIDERATION FOUND IN THE CASE OF M /S R.B. ENTERPRISES WHERE THE REMAINING 64 PLOTS ARE SOLD IN DIFFERENT YEARS. TH E INSTANCES OF SUPPRESSION OF SALES IN THE CASE OF R.B. ENTERPRISES ARE DISCUSSED HEREUNDER IN ORDER TO SUBSTANTIATE THE EXTENT OF THE PREVAILING RATES IN SAILOK. .. 9 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 12. THUS, ON THE BASIS OF EVIDENCE FOUND IN THE COU RSE OF R.B. ENTERPRISES, THE ASSESSING OFFICER WORKED OUT THE G ROSS SALES AT RS.2,91,15,072/- AND AFTER ALLOWING THE REBATE OF 3 5% AND EXPENDITURE OF RS.20,07,937/- AS COST OF CONVERSION OF PROPERTY IN TO STOCK IN TRADE AND FURTHER EXPENDITURE OF RS.16,65,437/- ON ACCOUNT DE VELOPMENT EXPENDITURE, DETERMINED THE PROFIT AT RS.1,52,51,423/- AS AGAINS T THE PROFIT DECLARED BY ASSESSEE AT RS.12,48,096/-. LD. CIT(A) DELETED THE ADDITION FOR THE FOLLOWING REASONS :- (A) THERE WAS NO EVIDENCE TO REBUT THE ASSESSEES C LAIM THAT HE RECEIVED ONLY THE SALE CONSIDERATION WHICH WAS RECO RDED IN THE SALE DEED. (B) THE ASSESSING OFFICER RELIED ON INCRIMINATING E VIDENCE FOUND IN THE CASE OF M/S R.B. ENTERPRISES SUGGESTING RECE IPT OF UNRECORDED CONSIDERATION ON SALE OF FLATS, WHICH WERE ADJACENT TO ASSESSEES FLATS. THIS COULD AT BEST GIVE RISE TO SUSPICION BUT, UNLE SS CONFIRMED BY THE INDEPENDENT EVIDENCE, COULD NOT BE A VALID BASIS FO R ADDITION. (C) THE ASSESSEE HAD ALSO SHOWN THAT THERE WERE INS TANCES OF SALE OF PLOTS OF LAND IN THE SAME VICINITY AT RATES, WHI CH WERE MUCH LOWER THAN THAT SHOWN BY THE ASSESSEE. THE INCRIMINATING EVIDENCE FOUND IN THE CASE OF M/S R.B. ENTERPRISES WAS NOT APPLIED IN THOSE CASES. 10 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 (D) THE BUSINESS MODEL AND BUSINESS PRACTICE OF ASS ESSEE AND R.B. ENTERPRISES WERE DIFFERENT. 13. LD. CIT(A), HOWEVER, CLARIFIED THAT NO COMMENTS WERE BEING MADE ABOUT THE QUALITY OF THE EVIDENCE WHICH WAS SEIZED IN THE CASE OF M/S R.B. ENTERPRISES AND WHICH WAS TO BE EVALUATED IN THAT C ASE. 14. LD. DR HAS FILED A PAPER BOOK CONTAINING ON 74 PAGES IN WHICH HE HAS PRIMARILY ANNEXED ORDERS, NOTICES, ETC. RELATIN G TO M/S R.B. ENTERPRISES, DEHRADUN AND ALSO THE STATEMENTS OF VARIOUS PERSONS HE HAS ALSO FILED WRITTEN SUBMISSIONS IN SUPPORT OF HIS PLEA THAT U/S 153A, THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR RE-ASSESS TOTAL I NCOME OF THE ASSESSEE. HIS SUBMISSIONS ARE REPRODUCED HEREUNDER :- BEFORE THE HONBLE MEMBERS INCOME TAX APPELLATE TRIBUNAL, F-BENCH, NEW DELHI. IN THE CASE OF : RAMESH BATTA APPEAL NO. : 3966/DEL/2013 & CO-242/DEL/2013 ASSTT. YEAR : 2007-08 DATE OF HEARING : 25.01.2017 MAY IT PLEASE YOUR HONOURS SUB: SUBMISSION OF PAPERBOOK IN THE ABOVE CASE- REG . IN THE ABOVE CASE, KINDLY FIND ENCLOSED 2 COPIES OF PAPERBOOK CONTAINING 174 PAGES EACH. IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISIONS MAY KINDLY BE CONSIDERED: 1. CIT VS ANIL KUMAR BHATIA (24 TAXMANN.COM 98, 211 TA XMAN 453, 352 ITR 493) 11 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 WHERE HON'BLE DELHI HIGH COURT HELD THAT JURISDICTI ON OF AO UNDER 153A IS TO ASSESS TOTAL INCOME FOR THE YEAR AND NOT RESTRICTED TO SEIZED MATERIAL. POST SEARCH REASSESSMENT IN RESPECT OF ALL 6 YEARS CAN B E MADE EVEN IF ORIGINAL RETURNS ARE ALREADY PROCESSED U/S 143(1)(A) ASSES SING OFFICER HAS POWER U/S 153A TO MAKE ASSESSMENT FOR ALL SIX YEARS AND COMPU TE TOTAL INCOME OF ASSESSEE, INCLUDING UNDISCLOSED INCOME, NOTWITHSTAN DING THAT RETURNS FOR THESE YEARS HAVE ALREADY BEEN PROCESSED U/S 143(1)(A). EVEN IF ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 14 3(1)(A) OR SECTION 143(3) PRIOR TO INITIATION OF SEARCH/REQUISITION, STILL AS SESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS UNDER SECTION 153A WITHOUT ANY FETTERS AND REASSESS TOTAL INCOME TAKING NOTE OF UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING SEARCH. 2. FILATEX INDIA LTD VS CIT (49 TAXMANN.COM 465) WHERE HON'BLE DELHI HIGH COURT HELD THAT DURING ASS ESSMENT UNDER SECTION 153, ADDITIONS NEED NOT BE RESTRICTED OR LIMITED TO INCR IMINATING MATERIAL, FOUND DURING COURSE OF SEARCH 3. CIT VS ST. FRANCIS CLAY DECOR TILES (385 ITR 624) WHERE HON'BLE KERALA COURT HELD THAT NOTICE ISSUED UNDER SECTION 153A - RETURN MUST BE FILED EVEN IF NO INCRIMINATING DOCUM ENTS DISCOVERED DURING SEARCH 4. CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA S HEVA) LTD ( 64 TAXMANN.COM 34, 235 TAXMAN 568) WHERE HON'BLE SUPREME COURT GRANTED SLP AGAINST HIG H COURT'S RULING THAT NO ADDITION CAN BE MADE IN RESPECT OF ASSESSMENTS WHIC H HAVE BECOME FINAL IF NO INCRIMINATING MATERIAL IS FOUND DURING SEARCH OR DURING 153A PROCEEDING. SD/- (S S RANA) COMMISSIONER OF INCOME TAX (DR) F-BENCH, ITAT, NEW DELHI. LD. DR FURTHER FILED FOLLOWING WRITTEN SUBMISSIONS :- 1. E.N. GOPAKUMAR VS CIT [(2016) 75 TAXMANN.COM 215 (K ERALA))] (COPY ENCLOSED) WHERE HON'BLE KERALA HIGH COURT HELD THAT ASSESSMEN T PROCEEDINGS GENERATED BY ISSUANCE OF A NOTICE UNDER SECTION 153A(1)(A) CA N BE CONCLUDED AGAINST INTEREST OF ASSESSEE INCLUDING MAKING ADDITIONS EVE N WITHOUT ANY INCRIMINATING MATERIAL BEING AVAILABLE AGAINST ASSESSEE IN SEARCH UNDER SECTION 132 ON BASIS OF WHICH NOTICE WAS ISSUED UNDER SECTION 153A(1)(A) . THE ABOVE ORDER HAS BEEN PASSED AFTER CONSIDERING C ASES OF CIT V. CONTINENTAL WAREHOUSING CORPN. (NHAVA SHEVA) LTD. [2015] 374 IT R 645/232 TAXMAN 270/58 TAXMANN.COM 78 (BOM.) (PARA 4), PRINCIPAL CIT V. KURELE PAPER MILLS (P.) LTD. [2016] 380 ITR 571 (DELHI) (PARA 4), CIT V. KABUL CHAWLA [2016] 380 12 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 ITR 573/[2015] 234 TAXMAN 300/61 TAXMANN.COM 412 (D ELHI) (PARA 4), CIT V. LANCY CONSTRUCTIONS [2016] 383 ITR 168/237 TAXMAN 7 28/66 TAXMANN.COM 264 (KAR.) (PARA 4), CIT V. ST. FRANCIES CLAY DECOR TIL ES [2016] 240 TAXMAN 168/70 TAXMANN.COM 234 (KER.) (PARA 5) AND CIT V. P ROMY KURIAKOSE [2016] 386 ITR 597 (KER.) (PARA 5). 2. CIT VS ST. FRANCIS CLAY DECOR TILES (385 ITR 624) ( COPY ENCLOSED) WHERE HON'BLE DELHI KERALA COURT HELD THAT NOTICE I SSUED UNDER SECTION 153A - RETURN MUST BE FILED EVEN IF NO INCRIMINATING DOCUM ENTS DISCOVERED DURING SEARCH. 3. SMT DAYAWANTI VS CIT (75 TAXMANN.COM 308) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME OF ASSESSEE WERE PREMISED ON MATE RIALS FOUND AS WELL AS STATEMENTS RECORDED BY ASSESSEE'S SON IN COURSE OF SEARCH OPERATIONS AND ASSESSEE HAD NOT BEEN ABLE TO SHOW AS TO HOW ESTIMA TION MADE BY ASSESSING OFFICER WAS ARBITRARY OR UNREASONABLE, ADDITIONS SO MADE BY ASSESSING OFFICER BY REJECTING BOOKS OF ACCOUNT WAS JUSTIFIED. 15. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASS ESSEE IS IN NO WAY RELATED TO R.B. ENTERPRISES EXCEPT THAT HIS BROTHER IS PARTNER IN R.B. ENTERPRISES. HE POINTED OUT THAT IT IS NOT DISPUTE D THAT THE ENTIRE ADDITION HAS BEEN MADE ON THE BASIS OF SEIZED MATERIAL FOUND IN THE CASE OF R.B. ENTERPRISES AND NOT IN THE CASE OF ASSESSEE. THERE FORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND IN THE CASE OF A SSESSEE, ADDITION COULD NOT BE MADE IN VIEW OF THE DECISION OF HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA & OTHERS IN ITA NO.707/2014 & OTHERS DATED 28.08.2015. LD. COUNSEL POINTED OUT THAT DOCUMENTS RELIED UPON BY THE ASSESSING OFFICER HAVE NOT BEEN SHOWN TO ASSESSEE. LD. COUNSEL SUBMITTED THAT IN ASSESSEES CASE PURCHASERS WERE DIFFERENT. LD. COUNSEL FURTHER SUBMITTED THAT NO ENQUIRY WAS MADE IN REGARD TO SAL E CONSIDERATION FROM 13 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 ASSESSEES PURCHASERS. AS REGARDS THE RELIANCE PLA CED BY LD. DR IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) AND FILATEX INDIA LTD. (SUPRA), LD. COUNSEL SUBMITTED THAT THESE DECISIONS HAVE BEEN CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). IN THIS REGARD, HE REFERRED TO PARA 20 AND 28, WHICH READS AS UNDER :- 20. AS REGARDS THE MATERIAL UNEARTHED DURING THE S EARCH THE COURT IN CIT V. ANIL KUMAR BHATIA (SUPRA) OBSERVED THAT IF IT IS N OT IN DISPUTE THAT THE DOCUMENT WAS FOUND IN THE COURSE OF THE SEARCH OF THE ASSESS EE, THEN SECTION 153A IS TRIGGERED. ONCE THE SECTION IS TRIGGERED, IT APPEAR S MANDATORY FOR THE ASSESSING OFFICER TO ISSUE NOTICES UNDER SECTION 153A CALLING UPON THE ASSESSEE TO FILE RETURNS FOR THE SIX ASSESSMENT YEARS PRIOR TO THE Y EAR IN WHICH THE SEARCH TOOK PLACE. THE COURT CLARIFIED IN PARA 24 AS UNDER: 24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCR IMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFOR E LEFT OPEN. .. 28. IN FILATEX INDIA LTD. V. CIT-IV (SUPRA), ONE OF THE QUESTIONS FRAMED WAS WHETHER THE ITAT ERRED ON FACTS AND IN LAW IN NOT H OLDING THAT RE-COMPUTATION OF BOOK PROFIT, DE-HORS ANY MATERIAL FOUND DURING THE COURSE OF SEARCH, IN THE ORDER PASSED UNDER SECTION 153A OF THE ACT WAS WITHOUT JU RISDICTION, BEING OUTSIDE THE SCOPE OF PROCEEDINGS UNDER THAT SECTION? THE FACTS OF THE CASE WERE THAT THERE WAS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 18TH JANUARY, 2006 AND SUBSEQUENT DATES. THIS INCLUDED A STATEMENT OF THE GENERAL MANAGER (MARKET ING). ON THE BASIS OF THE SAID MATERIAL AND STATEMENT ADDITIONS WERE MADE TO THE DISCLOSED INCOME UNDER SECTION 115 JB ALTHOUGH NO MATERIAL WAS FOUND SPECI FIC TO SUCH ADDITION. THE COURT HELD THAT UNDER SECTION 153A THE ADDITIONS N EED NOT BE RESTRICTED OR LIMITED TO THE INCRIMINATING MATERIAL, WHICH WAS FO UND DURING THE COURSE OF SEARCH. CONSEQUENTLY EVEN IF NO INCRIMINATING MATE RIAL WAS FOUND FOR THE ADDITION UNDER SECTION 115JB OF THE ACT, SINCE THER E WAS SOME INCRIMINATING MATERIAL FOUND WHICH WOULD SUSTAIN ADDITIONS MADE A ND SINCE THE 'TOTAL INCOME' HAD TO BE COMPUTED, THEY WERE SUSTAINED BY THE HIGH COURT. 16. LD. COUNSEL FURTHER POINTED OUT THAT THE DECISI ON OF SPECIAL BENCH OF MUMBAI ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTI CS LTD. VS. DCIT 14 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 (2012) 137 ITD 287 (SB) (MUM.-TRIB.) HAS BEEN UPHEL D BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ALL CARGO GLOBAL LOGISTIC, 374 ITR 645 (BOM.). HE SUBMITTED THAT MERE ADMISSION O F SLP BY HONBLE SUPREME COURT DOES NOT AFFECT THE RATIO LAID DOWN I N THE JUDGEMENT. LD. COUNSEL FURTHER SUBMITTED THAT THERE IS NO DECISION OF HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE AND THEN SINCE TWO VIEWS A RE POSSIBLE, THEREFORE, A VIEW IN FAVOUR OF ASSESSEE SHOULD BE TAKEN AS HAS B EEN HELD IN CIT VS. M/S VEGETABLES PRODUCTS LTD., 88 ITR 192 AND CIT VS. VA TIKA TOWNSHIP, (2014) 49 TAXMANN.COM 249. HE POINTED OUT THAT THREE HIGH COURTS VIZ. HONBLE DELHI HIGH COURT, HONBLE BOMBAY HIGH COURT AND HON BLE GUJARAT HIGH COURT HAVE TAKEN VIEW IN FAVOUR OF ASSESSEE. FURTH ER, THE SPECIAL BENCH OF MUMBAI ITAT IN THE CASE OF NARANG OVERSEAS PVT. LTD . VS. ACIT (2008) 111 ITD 1 (MUM.-TRIB.)(SB) HAS ALSO TAKEN A VIEW IN FAVOUR OF ASSESSEE. 17. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. AS PER THE MANDATE OF SECTION 153A, WHERE A SEARCH HAS TAKEN A PLACE, THE ASSESSING OFFICER, AS PER SECTION 153A(1)(B) IS REQUIRED TO ASSESS OR RE-ASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SUCH SEARCH WAS CONDUCTED. IN THE PRESENT CA SE, THE SEARCH WAS CONDUCTED ON 04 TH MARCH, 2009, THEREFORE, THE ASSESSING OFFICER WAS REQUIRED TO ASSESS OR RE-ASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS 15 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 PRECEDING THE ASSESSMENT YEAR 2009-10. THE FIRST P ROVISO TO SECTION 153A MANDATES THAT THE ASSESSING OFFICER SHALL ASSESS OR RE-ASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN THE SIX ASSESSMENT YEARS. THEREFORE, ONCE THE SEARCH HAS TAKEN PLACE THE ASSESSING OFFICER HAS NO OPTION BUT TO ASSESS OR RE-ASSESS THE TOTAL INCO ME OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECO ND PROVISO TO SECTION 153A(1) MAKES IT CLEAR THAT IF ANY ASSESSMENT OR RE -ASSESSMENT RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SI X ASSESSMENT YEAR CONSIDERED IN THIS SUB-SECTION ON THE DATE OF INITI ATION OF SEARCH U/S 132 IS PENDING THEN THE SAME WILL ABATE. THIS IMPLIES THA T THE ASSESSING OFFICER WILL HAVE TO MAKE THE ASSESSMENT IN THE CASE OF SUC H ASSESSMENT YEAR DE- NOVO . THE OBJECT OF THE SECOND PROVISO IS EVIDENT THAT IN THE CASE OF THOSE ASSESSMENTS OR RE-ASSESSMENTS, WHICH HAVE NOT ABATE D, THE ASSESSMENT IS NOT TO BE MADE DE-NOVO AND IT IS IN SUCH CASES ONLY THAT THE ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL TH OUGH THE ASSESSING OFFICER IS REQUIRED TO MAKE THE ASSESSMENT OR RE-AS SESSMENT FOR ALL SIX ASSESSMENT YEARS CONSIDERED WITH REFERENCE TO THE D ATE OF SEARCH. THIS IS THE POSITION OF LAW, WE HAVE TO FIRST FIND OUT THAT WHE THER THE ASSESSMENT FOR ASSESSMENT YEAR 2007-08 WAS PENDING ON THE DATE OF SEARCH OR NOT. ADMITTEDLY, THE RETURN OF INCOME U/S 139 WAS FILED ON 25 TH OCTOBER, 2007 AND, THEREFORE, IF THE ASSESSING OFFICER HAD ISSUED NOTICE U/S 143(2) THEN 16 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 ASSESSMENT COULD BE COMPLETED AS PER SECTION 153A(1 )(A) WITHIN TWO YEAR FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE IN COME WAS FIRST ASSESSABLE. HOWEVER, IF NO NOTICE U/S 143(2) WAS I SSUED WITHIN THE TIME LIMIT PRESCRIBED U/S 143(2) THEN IT CANNOT BE SAID THAT THE ASSESSMENT WAS PENDING. WE FIND THAT IN THE ASSESSMENT ORDER NOTH ING HAS BEEN MENTIONED IN REGARD TO ORIGINAL ASSESSMENT PROCEEDINGS. LD. COUNSEL FOR THE ASSESSEE MADE A STATEMENT AT BAR THAT NOTICE U/S 143(2) COUL D BE ISSUED UPTO 31.10.2008 BUT NO SUCH NOTICE WAS ISSUED. THEREFOR E, THIS WAS A CASE OF COMPLETED ASSESSMENT. THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND IN THE COURSE OF SEARCH ON ASS ESSEE, THE ADDITION COULD NOT BE MADE. IN REGARD TO RELIANCE PLACED BY LD. D R ON VARIOUS DECISIONS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS FAR AS THE DECISION IN THE CASE OF SMT. DAYAWANTI VS. CIT, (2016) 75 TAXMANN.COM 30 8 (DELHI) IS CONCERNED, THE SAID DECISION IS NOT AT ALL APPLICAB LE TO THE FACTS OF THE CASE BECAUSE IN THAT CASE ASSESSEE SURRENDERED INCOME AN D SONS STATEMENT TAKEN AT THE TIME OF SEARCH WAS RATIFIED BY ASSESSEE. TH EREFORE, THE SAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. E VEN OTHERWISE WE FIND THAT THE ASSESSING OFFICER AT PAGE 9 OF HIS ORDER, INTER-ALIA, OBSERVED AS UNDER :- THERE ARE OTHER MANY INSTANCES IN THE CASE OF M/S R.B. ENTERPRISES AND THESE ARE DISCUSSED IN DETAIL AND WERE PROVIDED TO THE AS SESSEE AS ENCLOSURE OF THE SHOW CAUSE DATED 8.12.2010. 17 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 18. THIS SHOWS THAT THE BASIS OF ADDITION WAS THE I NSTANCES FOUND IN THE CASE OF M/S R.B. ENTERPRISES. FURTHER, LD. CIT(A) HAS OBSERVED THAT ASSESSEE HAD ALSO SHOWN THAT THERE WERE INSTANCES OF SALE OF FLATS IN THE SAME VICINITY WHICH WERE MUCH LOWER THAN SHOWN BY THE ASSESSEE. LD. COUNSEL POINTED OUT THAT THE BUSINESS MODEL OF M/S R.B. ENTERPRISES IS ENTIRELY DIFFERENT FROM ASSESSEE SINCE NO EVIDENCE HAD BEEN FOUND IN T HE CASE OF ASSESSEE SUGGESTING RECEIPT OF ON-MONEY OVER AND ABOVE IS ST ATED CONSIDERATION. THEREFORE, THE ADDITION WAS RIGHTLY DELETED BY LD. CIT(A). 19. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. 20. NOW, WE TAKE UP THE CROSS OBJECTION OF ASSESSEE . THE ASSESSEE HAS TAKEN FOLLOWING GROUND OF CROSS OBJECTION :- 1. THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N REDUCING THE AMOUNT OF LONG TERM CAPITAL GAIN BY RS.6,61,831/- BY RE-DETER MINING THE LAND PRICE WITHOUT APPRECIATING THE FACT THAT THE ADDITION WAS MADE BY THE A.O. ON THE BASIS OF THE MATERIAL ON RECORD. 2. THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,40,03,327/- ON ACCOUNT OF PROFIT ON SALE OF LA ND AT SAILOK WITHOUT APPRECIATING THE FACT THAT IN TERM OF PROVISIONS OF SECTION 292C, THE DOCUMENT COLLECTED DURING THE SEARCH IS AN ADMISSIBLE EVIDEN CE. 3. THAT THE ORDER OF THE LD. CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS WHICH NEEDS TO BE VACATED AND THE ORDER OF THE A.O. BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUND OF THE APPEAL AS STATED ABOVE AS AND WHEN NE ED FOR DOING SO MAY ARISE. 21. BRIEF FACTS APROPOS GROUND NO.3 ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE A SSESSEE HAD ENTERED INTO A MOU WITH M/S AGGARWAL ASSOCIATES LTD.. AS PER TH IS MOU DATED 18 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 01.09.2006 BETWEEN SHRI RAMESH BATTA, SHRI RAKESH B ATTA AND OTHER FAMILY MEMBERS, PLOT NO.64, 65 AND 91 WERE ALLOWED AS THE RIGHTS OF PASSAGE AND ALL KINDS OF PRIVILEGES AND EASEMENT RIGHTS TO INGR ESS AND EGRESS IN ADITYA DOONSHIRE, A HOUSING PROJECT PROMOTED BY M/S AGGARW AL ASSOCIATES LTD.. THE PLOT NO.91 FALLS IN THE SHARE OF THE ASSESSEE. AGAINST THIS THE SAID COMPANY HAD PAID RS.50 LAKHS AND AMOUNT FALLING IN THE SHARE OF THE ASSESSEES PLOT WAS RS.20 LAKHS. THE ASSESSEE HAD NOT DISCLOSED THIS INCOME IN ITS RETURN OF INCOME. THE ASSESSEE CONTENDED TH AT THE AMOUNT REPRESENTED AS ADVANCE AS NO SALE DEED HAS BEEN EXECUTED. THE ASSESSING OFFICER NOTICED THAT THE OTHER PART OF RS.50 LAKHS I.E. RS. 30 LAKHS HAD BEEN DISCLOSED IN ITS RETURN OF INCOME BY M/S R.B. ENTERPRISES IN ASSESSMENT YEAR 2008-09 AS PASSAGE RIGHT HAD BEEN ALLOWED IN RESPECT OF ARE A FALLING IN ITS SHARES. HE POINTED OUT THAT THIS SHOULD HAVE BEEN SHOWN IN ASS ESSMENT YEAR 2007-08 AS THE PAYMENT HAD BEEN RECEIVED BY BOTH THE ASSESSEE THROUGH BANK DRAFTS DATED 05.06.2006. HE ASSESSED THE SUM OF RS.20 LAK HS AS ASSESSEES BUSINESS INCOME, INTER-ALIA, OBSERVING THAT THE PLAIN READING OF THE MOU REVEALED THAT THE PLOTS UNDER CONSIDERATION IN THE MOU AND THE AREAS FALLING THEREIN WERE NOW NOT AVAILABLE TO THE ASSESSEE AS I TS STOCK IN TRADE FOR SALE OR ANY OTHER DEVELOPMENT OR ALIENATION EXCEPT AS PER T HE TERMS AND REFERENCE OF THE MOU. HE POINTED OUT THAT GOING BY THE CONDITIO NS CONTAINED IN THE MOU THERE COULD NEVER BE OUTRIGHT SALE TO M/S AGGAR WAL ASSOCIATES LTD. AT 19 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 ANY POINT SUBSEQUENTLY AS AFTER PASSING THROUGH THE SE PLOTS THE OTHER LANDS OF THE ASSESSEE WERE ALSO THERE APART FROM THE HOUS ING PROJECT OF ADITYA DOONSHIRE. HE FURTHER POINTED OUT THAT AS PER LOCA L ENQUIRIES AND SITE VISIT BY THE INSPECTOR OF THE OFFICE, IT HAD BEEN DISCLOS ED THAT THERE WAS NO MOTORABLE APPROACH TO THE ABOVE DISCUSSED LAND AND ADITYA DOONSHIRE THAN THESE PLOTS. HE, THEREFORE, CONCLUDED THAT FOR ALL PURPOSES THE PLOT NO.91 WAS SOLD OUT MAY BE IN THE SHAPE OF PASSAGE RIGHT F OR WHICH ADEQUATE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE AND, THERE FORE, ASSESSED THE SAME AS BUSINESS INCOME. LD. CIT(A) CONFIRMED THE ADDIT ION AFTER CONSIDERING THE DEFINITION OF TRANSFER U/S 2(47) OBSERVING THAT THE MOU HAD THE EFFECT OF EXTINGUISHMENT OF HIS RIGHTS IN THE PLOT AND ALSO H AD THE EFFECT OF ENABLING THE ENJOYMENT OF THE PROPERTY BY AGGARWAL ASSOCIATE S LTD. AND ITS NOMINEE. LD. COUNSEL REITERATED THE SUBMISSIONS ADVANCED BEF ORE LOWER REVENUE AUTHORITIES. LD. DR RELIED ON THE ORDER OF LOWER R EVENUE AUTHORITIES. 22. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THE TERMS OF MOU W ITH AGGARWAL ASSOCIATES LTD. ARE NOT AT ALL DISPUTED. ADMITTEDL Y, THE ASSESSEE HAD GIVEN RIGHT OF PASSAGE AND ALL KINDS OF PRIVILEGES AND RI GHTS TO AGGARWAL ASSOCIATES LTD. AND, THEREFORE, THERE WAS CONSTRUCT IVE TRANSFER IN FAVOUR OF AGGARWAL ASSOCIATES LTD.. WE, THEREFORE, DO NOT FI ND ANY REASON TO 20 ITA NO.3966/DEL/2013 C.O. NO.242/DEL/2013 INTERFERE WITH THE ORDER OF LD. CIT(A) ON THIS COUN T. IN THE RESULT, THE CROSS OBJECTION FILED BY ASSESSEE IS DISMISSED. 23. RESULTANTLY, THE APPEAL OF THE DEPARTMENT AS WE LL AS CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MARCH, 2017. SD/- SD/- (SUCHITRA KAMBLE) ( S.V. MEHROTRA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED : 29-03-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI