The DCIT, Calicut V. M/s.Ardra Associates, Trichur

ITA 429/COCH/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7727 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 10-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-08-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: C B M WARRIER
• Keywords: Document seized; Assessment record; Documents seized
• Section: 131; 132

Judgement Text

ITA NO.429/COCH/2015 1 , IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN . . , ., ! ! ! ! BEFORE S/SHRI B. P. JAIN, AM & GEORGE GEORGE K., JM ' ' ' ' ./ I.TA NO.429/COCH/2015 ( #$ % /ASSESSMENT YEAR : 2006-07) THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, KOZHIKODE. VS M/S. ARDRA ASSOCIATES, CAPITAL TOWERS, THIRUVAMBADY P.O. PATTURAIKKAL, THRISSUR-680 022. ( &' &' &' &' /REVENUEAPPELLANT) ( ( (( ( ) ) ) ) &' &'&' &' /ASSESSEE -RESPONDENT) & . . ' ./PAN NO. AAIFA 2325E &' * + /REVENUE BY SHRI SHANTAM BOSE, CIT(DR) ( ) &' * + /ASSESSEE BY SHRI C.B.M. WARRIER, CA ,- * ./ / DATE OF HEARING 10/08/2016 0 % * ./ /DATE OF PRONOUNCEMENT 22/08/2016 1 1 1 1 /ORDER PER B.P. JAIN, AM: THIS APPEAL BY THE REVENUE ARISES OUT OF ORDER OF THE CIT(APPEALS)-IV, KOCHI DATED 07/05/2015 FOR THE ASSESSMENT YEAR 2006-07. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REPRODUCED HEREINBELOW: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-IV, KOCHI IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. ITA NO.429/COCH/2015 2 2. THE COMMISSIONER OF INCOME TAX(A) ERRED IN DELET ING THE ADDITION OF RS.1,87,98,000/- MADE BY THE ASSESSING OFFICER BEIN G THE DIFFERENCE OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE, FROM THE PR OJECT CAPITAL PLAZA. IN THIS REGARD, THE COMMISSIONER OF INCOME TAX(APPEALS ) HAS ERRED IN OVERLOOKING THE SEIZED DOCUMENT MARKED AS CHN-15-11 CM-9 WHICH ESTABLISHES THE RECEIPT OF ON MONEY IN THE SALE OF CAPITAL PLAZA. 3. THE LEARNED COMMISSIONER OF INCOME TAX(A) OUGHT TO HAVE CONSIDERED THAT AS PER SECTION 132(4A), THE CONTENTS OF SEIZED DOCUMENTS ARE PRESUMED TO BE TRUE. 4. FOR THESE AND OTHER GROUNDS, THAT MAY BE URGED A T THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE COMMISSIONER OF INC OME TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER REST ORED. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSE E IS A PARTNERSHIP CONCERN ENGAGED IN THE DEVELOPMENT OF COMMERCIAL APARTMENTS AND SELLING TO CUSTOMERS. THERE WAS A SEARCH U/S. 132 OF THE INC OME TAX ACT IN THE BUSINESS PREMISES OF THE ASSESSEE FIRM ON 02/09/2011. THE A SSESSING OFFICER ASSESSED AN INCOME OF RS.1,87,98,000/- ON ACCOUNT OF A SALE OF A COMMERCIAL PROJECT CAPITAL PLAZA ALONG WITH FEW OTHER ADDITIONS. THE LEARNED CIT(APPEALS) CANCELLED THIS ADDITION OF RS.1,87,98,000/- ON THE SALE OF PROJECT CAPITAL PLAZA AS PER THE APPELLATE ORDER AND REVENUE IS IN APPEAL ON THIS ISSUE. AS PER PARA-3, PAGE 3 & 4 OF ASSESSMENT ORDER PARA-7 & 8 THE ASSES SING OFFICER IS PASSING THE ORDER FOR THE ASSESSMENT OF RS.1,87,98,000/- CONSID ERING AS THE PROFIT ON THE SALE OF THE COMMERCIAL PROJECT. THE RELEVANT PORTION O F THE ASSESSMENT ORDER FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREINBELOW:- ITA NO.429/COCH/2015 3 PARA 7 IT WAS ALSO NOTICED THAT DURING THE FINANCIAL YEAR 2005-06 THE ASSESSEE HAD SOLD THE COMMERCIAL PROJECT CAPITAL PLAZA. THE S ALE CONSIDERATION SHOWN IN THE BOOKS OF ACCOUNTS IS RS.1,32,02,00/- THE ACTUAL CONSIDERATION RECEIVED THIS PROJECTS AS PER AN AGREEMENT SEIZED MARKED AS CHN-1 5-11-CM-9, A COPY OF WHICH IS ATTACHED AS ANNEXURE 1, IS RS.2,95,00,000/ -. THUS THE TOTAL CONSIDERATION FOR THIS PROJECT IS RS.3,20,00,000/-. THUS THE SUPPRESSION OF THE INCOME FOR THIS PROPERTY TRANSACTION IS RS.1,87,98, 000/-. WITH REGARD TO THE ABOVE THE ASSESSEE HAS SUBMITTED THE FOLLOWING EXPLANATION. THIS IS A COMMERCIAL PROPERTY. THIS PROPERTY WAS PUT UP FOR SALE AND MR. R.V SHERIFF KHAN AND OTHERS VISITED THE PROPERTY MORE T HAN ONCE AND AGREED TO PURCHASE THE SAME FOR RS.1,25,00,000/-. SINCE WE W ERE IN URGENT NEED OF FUND WE RECEIVED AN ADVANCE AND DUE TO MORAL OBLIGA TION WE COULD NOT LOOK FOR ANY OTHER PURCHASERS. THOUGH THE PARTY REP EATEDLY PROMISED TO PURCHASE THE PROPERTY THERE WAS INORDINATE DELAY ON THEIR PART AND WE DOUBTED THEIR GENUINENESS. THIS FORCED US TO PROCE ED AGAINST THEM LEGALLY AND AS PER EXPERT ADVICE WE SHOT OUT A LETTER, A CO PY OF WHICH WAS KEPT IN THE FILE AND SEIZED BY THE DEPARTMENT. THIS IS ONL Y TO PROTECT OUR INTEREST AND SAFEGUARD ANY MONITORY LOSS LEST IT MAY ARISE AND N OTHING ELSE. THE FIGURES IN THE LETTER ARE WRONG. ON RECEIPT OF THIS LETTER AN D INFLUENCED BY MEDIATORS, THE PARTY CAME FORWARD AND EFFECTED THE REGISTRATIO N ON 19/11/2005. PARA- 8 IT IS COMMON KNOWLEDGE THAT MOST OFTEN THE ACTUAL C ONSIDERATION PAID IS MUCH MORE THAN THE REGISTERED CONSIDERATION. IN TH IS CASE THE SUM OF RS.2,95,00,000/- MENTIONED IN THE AGREEMENT IS THE ACTUAL PRICE FOR WHICH THE TRANSACTION IS RS.1,87,98,000/- AS MENTIONED IN PAR A NO. 4. THE ASSESSEES EXPLANATION THAT THEIR LETTER DATED 27/07/2005 WAS ONLY TO PROTECT THEIR INTEREST AND SAFEGUARD ANY MONITORY LOSS, CANNOT BE ACCEPTED. MOREOVER IT IS NOT BELIEVABLE THAT A LAND OF 8 CENTS AND 5000 S Q. FT. OF COMMERCIAL BUILDING SITUATED IN THE HEART OF THE CITY WILL COS TS ONLY RS.1,25,00,000/- AT THE TIME OF THE SALE. ACCORDINGLY, THE SAID SUM RS.1,8 7,98,000/- IS TREATED AS THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 -07. (ADDITION:RS. 1,87,98,000/-), ITA NO.429/COCH/2015 4 FOR THE SAKE OF CONVENIENCE, THE DECISION OF THE LD . CIT(A) IS ALSO REPRODUCED HEREINBELOW:- 6.3.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE FACTS OF THE CASE HAVE BEEN EXAMINED METICULOUSLY AND, CERTAIN FALLAC Y HAVE BEEN FOUND ON FACTS, WHICH ARE MENTIONED AS UNDER: I) THE ASSESSING OFFICER HAS MENTIONED IN PARA 8 OF TH E ORDER THAT THE ASSESSEE HAS SOLD 8 CENTS OF LAND AND 5000 SQ. FT. OF CONSTRUCTED AREA. II)AS PER THE OCCUPANCY CERTIFICATE ISSUED BY CORPO RATION OF TRICHUR DATED 24.06.2006 DECLARING THE BUILDING FIT FOR OCCUPATIO N: THE TOTAL CONSTRUCTED AREA IS: GG 466.30 M. SQ. FF 517.18M.SQ. 517.86 M. SQ. 488.55 M. SQ. 1990.57 M. SQ. X 10.76 = 21418 SQ. FT. 6.3.2 AS PER THE SALE DEED DATED 18.11.2005, THE LAND AREA IS 19.57 CENT, WHICH IS THE SAME AS PER THE SEIZED DOCUMENTS CHN-15-11-C M-9 THE FOLLOWING IS THE CHRONOLOGY OF EVENTS: I) DATE OF PERMIT 29.07.2005 II) DATE OF SALE 18.11.2005 III) DATE OF OCCUPANCY 24.06.2008 IV) DATE OF LETTER WRITTEN BY FIRM TO THE BUYER OF THE PROPERTY 23.05.2005 AS PER THE SALE DEED, THE PURCHASE OF LAND MADE BY THE ASSESSEE: I) ON 16.10.04: OF 8 CENTS OF LAND RS.12,50,000/- II) 18.10.2004 8 CENTS RS.12,50,00 0/- III) 29.12.2001 3.57 CENTS RS. 5,36,250/ - TOTAL COST OF LAND: RS .30,36,250/- 6.3.3 IT IS SEEN THAT THE LAND, ON WHICH THE CONST RUCTION OF PROJECT CAPITAL PLAZA HAS BEEN STARTED, ADMEASURES 19.5 CENTS, WAS PURCHA SED ON 29.12.2004 FOR A SUM OF RS.30,36,250/-. THE OPENING BALANCE FOR THE PROJECT AS ON 01.04.2005, ITA NO.429/COCH/2015 5 HOWEVER, SHOWS RS.69,96,272/- AND ADDED WITH CURREN T YEAR EXPENDITURE OF RS.51,73,640/-, THE CLOSING BALANCE IS RS.1,21,61,9 12/-. 6.3.4 THE CHRONOLOGICAL ORDER IN WHICH THIS PROJEC T HAS COMMENCED IS AS UNDER:- I) AS PER OCCUPANCY CERTIFICATE OF CORPORATION OF T HRISSUR DATED 24.06.2006, UNDER PERMIT NO. PWS/BA/333/04-05 DTD. 29/07/2005, THE BUILDING IS FIT FOR OCCUPATION WITH 21,418 SQ. FT. OF CONSTRUCTED AREA FOR THE GROUND FLOOR, FIRST FLOOR, 2 ND FLOOR AND 3 RD FLOOR. II)THERE HAS BEEN TIME GAP BETWEEN THE ISSUE OF OCC UPANCY CERTIFICATE I.E., DT. 24.06.2006 AND THE DATE OF SALE I.E., DT. 18.01.200 5. III)THE SALE DEED DT. 18.11.2005 MENTIONS THE CON STRUCTION AS INCOMPLETE. 6.3.5 HALF CONSTRUCTED PROJECT HAS BEEN SOLD FOR A SUM OF RS.1,32,20,000/- AND, IT HAS BEEN CLAIMED BY THE APPELLANT THAT IT WAS A DISTRESSED SALE. A LETTER WRITTEN BY THE FIRM TO THE BUYERS, WHICH HAS BEEN S EIZED DURING THE COURSE OF SEARCH, IS STATED TO HAVE BEEN WRITTEN IN ORDER TO PUT THE BUYER R.V. SHERIFF KHAN & OTHERS TO PUT THEM UNDER PRESSURE BECAUSE DE SPITE ENTERED INTO THE DEAL THE PAYMENTS WERE DELAYED BY THEM, AS THEY WER E NOT COMING FORWARD AFTER MAKING THE INITIAL AGREEMENT, FOR FINALIZING THE DEAL. BECAUSE OF THIS DISTRUST BETWEEN THE TWO PARTIES THEY ALSO RESORTED TO LEGAL RESOURCE. THE BUYERS HAD FILED COMPLAINT FOR FRAUD FOR WHICH THE ASSESSEE HAD TO ENSURE ANTICIPATORY BAIL. THE ACTUAL SALE DEED IS DATED 1 8.11.2005, THE SEIZED LETTER PREDATES I.E., 23.05.2005 AND THE CERTIFICATE GRANT ING FITNESS FOR OCCUPANCY OF THE BUILDING IS FROM 24.06.2006. IF ALL EVENTS ARE COMPARED TOGETHER IN A CHRONOLOGICAL ORDER IT IS SEEN THAT THE SECOND PAGE OF THE SEIZED LETTER, WHICH MENTIONS OF ADDITIONAL CONSTRUCTION OF 6000 SQ. FT I.E. OVER AND ABOVE 22000 SQ. FT. OF CONSTRUCTED AREA FOR WHICH AN ADDITIONAL COS T OF RS.30 LAKHS WOULD BE PAYABLE TO THE ASSESSEE BY THE BUYERS; IS NOT SUBST ANTIATED WITH THE OCCUPANCY CERTIFICATE WHICH IS ISSUED IN THE MONTH OF JUNE, 2006 AND, MENTION ONLY THE CONSTRUCTED AREA APPROXIMATELY 22,000 SQ. FT. HOWEVER, THE ASSESSING OFFICER HAS CONSIDERED THE SUM OF RS.30 LAKHS INCUR RED ON ADDITIONAL CONSTRUCTION AND, ADDED TO THE TOTAL INCOME WHICH S TANDS IN CONTRADICTION WITH THE OCCUPANCY CERTIFICATE, WHICH IS ISSUED ALM OST AFTER SEVEN MONTHS OF THE SALE DEED. SINCE THE SALE DEED MENTIONS THE PRO PERTY AS INCOMPLETE AND THE ASSESSEE HAS GOT LESS THAN A YEAR FOR CONSTRUCT ING SINCE THE PROJECT WAS SOLD MUCH BEFORE THE OCCUPANCY CERTIFICATE IT IS BE LIEVABLE THAT THE BUILDING MUST BE ONLY HALF COMPLETE OR WOULD BE IN AN INCOMP LETE STAGE. 6.3.6. THE ADDITION MADE BY THE ASSESSING OFFICER SOLELY RELIED UPON THE LETTER DATED 23.05.2005 FOUND DURING SEARCH. THE PROJECT WAS INCOMPLETE OR HALF ITA NO.429/COCH/2015 6 COMPLETE IS A BELIEVABLE FACT BECAUSE THE OCCUPANCY CERTIFICATE HAS BEEN ISSUED MUCH LATER I.E., ON 24.06.2006. THUS, THE C ONTENTS OF THE LETTER IS HELD NOT TO BE TRUE OR RELEVANT BECAUSE I) THE ACTUAL CONSIDERATION CONSIDERED BY THE ASSESSIN G OFFICER, BASED ON THE LETTER AT RS.2,95,00,000/- AS AGAINST SHOWN BY THE ASSESSEE HAVE NOT BEEN CONFRONTED WITH THE PURCHASERS NAMELY, R.V. SHEREEF KHAN AND OTHERS AND, NOTHING IS KNOWN ABOUT WHAT HAPPENED IN THE CASE OF PURCHASERS. II) THE ASSESSEE WAS NOT ALLOWED AN OPPORTUNITY TO CROS S EXAMINE THE FACTS WITH R.V. SHEREEF KHAN AND OTHERS, THE PURCHASERS, DESPITE THIS ISSUE WAS RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. III) THE FACTS EMERGING OUT OF THE CHRONOLOGY OF EVENTS FROM THE DATE THE PROJECT WAS STARTED TO THE DATE ON WHICH IT WAS SOL D, IT IS APPARENT THAT IT WAS AN INCOMPLETE STRUCTURE AT THE TIME OF SALE. IV) THE SECOND PAGE OF LETTER WHICH MENTIONS OF THE EXT RA CONSTRUCTION FOR AN ADDITIONAL COST OF RS.30 LAKHS PAYABLE BY THE PURCH ASERS, IS ALSO NOT SUBSTANTIATED BY THE TOTAL ARE OF CONSTRUCTION MENT IONED IN THE OCCUPANCY CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITY. 6.3.7 GOING THROUGH THE FACTS IN ITS ENTIRETY, IT IS HEL D THAT THE CONTENTS OF THE LETTER IS NOT SUBSTANTIABLE EITHER ON FACTS REL ATING TO THE SALE CONSIDERATION OF RS.2,95,00,000/- OR ON THE FACT FOR THE CONSIDER ATION OF RS.2,95,00,000/- OR ON THE FACT FOR THE CONSIDERATION OF RS.30,00,000/- RE CEIVED FOR EXTRA CONSTRUCTION OF 6000 SQ. FT. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER, ON THESE COUNTS NOT BEING SUBSTANTIABLE, ARE DELETED. 4. THE LD. DR SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE REMANDED THE CASE BACK TO THE FILE OF THE ASSESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO EVIDENCE OR ANY DOCUMENTS ARE FURNISHED BEFORE THE LD. CIT(A) IN TH E APPEAL PROCEEDINGS AND HENCE THE QUESTION OF REMANDING THE CASE TO THE ASS ESSING OFFICER IS NOT ARISING. ITA NO.429/COCH/2015 7 RULE 46A OF THE IT RULES IS NOT APPLICABLE IN THE A BSENCE OF ANY FRESH EVIDENCE OR DOCUMENTS SUBMITTED BEFORE THE LD. CIT(A) WHICH WAS NOT PRODUCED OR MADE AVAILABLE TO THE ASSESSING OFFICER. THE LD. CIT(A) HAS ONLY CONSIDERED THE AVAILABLE SET OF FACTS AS PER THE ASSESSMENT RECORD S AND STATEMENT TAKEN AT THE TIME OF SEARCH. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN FACT, THE LD. DR RELIED UPON THE SEIZED DOCUMENTS C HN-15-11-CM-9 RELATING TO THE SALE OF THIS PROJECT WHICH IS FILED BY THE LD. DR AS PER PAGE 3, PARA 1&2 OF PAPER BOOK IN MALAYALAM AND PAGE-3 OF PAPER BOOK IN ENGLISH TRANSLATION. THE LD. DR CONTENDED THAT AS PER THIS LETTER FROM V. PA RMESWARAN AND OTHERS THE SELLERS OF THE PROPERTY TO SHRI R.V. SHERIFF KHAN, R.V. TOWERS, GURUVAYOOR IS SHOWING THE PRICE OF RS.2,95,00,000/- FOR THE BUILDING. HE ALSO CONTENDED THAT THE SALE OF THE PROPERTY IS DONE AS AN INCOMPLETE PROJECT AS PE R THE SALE DEED PAGE-4 OF PAPER BOOK FILED BY LD. AR. AS PER THE SALE DEED T HE BUILDING SOLD IS INCOMPLETE, UNFINISHED AND UNNUMBERED IS SOLD FOR R S.1,25,00,000/-. THE LD. DR ALSO REFERRED TO THE STATEMENT U/S. 132(4A) GIVEN B Y SHRI V. PARAMESWARAN ON 02/09/2011 THE DATE OF SEARCH (PAGE-46 TO 52 OF THE PAPER BOOK FILED BY THE LD. AR. IN THIS STATEMENT THE QUESTION NO.8 & 9 ARE R ELATING TO THIS PROJECT. THE QUESTION AND ANSWER ARE REPRODUCED HEREUNDER:- Q.8 I AM SHOWING YOU A BOX FILE NUMBERED AS CHN/1 5-11/CM-9. PLEASE EXPLAIN THE ENTRIES IN PAGE NUMBER 45? ITA NO.429/COCH/2015 8 A. I HAVE SEEN THE PAPER SL. NO. 45 AS STATED ABOVE. THIS LETTER WAS SENT BY US TO SHRI R.V. SHERIFF KHAN. THERE WERE CERTAIN D ISPUTES IN THE SETTLEMENT OF THE PROPERTY CAPITAL PLAZA SOLD BY US TO SHRI R. V. SHERIFF KHAN AND WE HAD FILED A SUIT AGAINST HIM AND HE HAD FILED A CRI MINAL COMPLAINT AGAINST US AND IT WAS SETTLED OUT OF COURT. Q.9. I AM SHOWING YOU AN AGREEMENT NUMBERED AS SL . NO. 137 IN THE BOX FILE MENTIONED ABOVE. PLEASE EXPLAIN THIS AGREEMENT? A THIS AGREEMENT IS SELF EXPLANATORY. THE LD. DR SUBMITTED THAT ON THE BASIS OF THE SEIZ ED DOCUMENTS BY WAY OF LETTER DATED 23/07/2005 AND THE STATEMENT OF V. PARAMESWAR AN U/S. 132(4A) IT IS EVIDENCED THAT THE PROPERTY IS SOLD FOR RS.2,95,00, 000/- AND THE LD. CIT(A) HAS GONE WRONG IN CANCELLING THE ASSESSMENT AND THE ASS ESSMENT ORDER SHOULD BE RESTORED. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE LAND OF 19.757 CENTS ALONG WITH 22000 SQ. FT. OF BUILDING IS TO BE SOLD FOR RS.2,95,00,000/-. BUT THE CONSTRUCTION HAD TO UNDERTAKEN AS PER THE SUGGESTIO N OF THE BUYER FOR A TOTAL BUILT UP AREA OF 22000 SQ. FT. FURTHER THE LETTER I S GIVING THE PROPOSAL FOR CONSTRUCTION OF 22000 SQ. FT. OF BUILDING AND AN AD DITIONAL PAYMENT OF RS.30 LAKHS ITA NO.429/COCH/2015 9 BEFORE THE TIME OF REGISTRATION. BUT THE PROPERTY S OLD IS AN INCOMPLETE BUILDING WITHOUT THE OCCUPANCY CERTIFICATE ON THE DATE OF RE GISTRATION. THE SALE TOOK PLACE ON 18/11/2005 AS AN INCOMPLETE BUILDING AND T HE OCCUPANCY CERTIFICATE IS RECEIVED ON 24/06/2006. THE SEIZED DOCUMENTS BY WAY OF LETTER SHOWS 22000 SQ. FT. ARE TO BE COMPLETED. AREA AS PER OCCUPANCY CERTIFICATE IS 21418 SQ. FT. FOR THE FOUR FLOORS TOGETHER INCLUDING GROUND, FIRS T, SECOND AND THIRD FLOORS. 8. PARA-8 OF ASSESSMENT ORDER IS NOT GIVING ANY S PECIFIC REFERENCE TO SEIZED DOCUMENTS AND AS PER PARA-8 OF THE ASSESSMENT ORDER LAND AREA IS 8 CENTS AND THE BUILDING AREA IS 5000 SQ. FT. THIS IS INCONSIS TENT AND NOT AGREEING WITH THE LETTER SEIZED AT THE TIME OF SEARCH. HENCE IT IS E VIDENT THAT THE ASSESSING OFFICER HAS NOT RELIED UPON THE SEIZED DOCUMENTS FOR THE PU RPOSE OF ASSESSMENT. 9. IT IS EVIDENT THAT THE PRICE CONSIDERATION OF R S.2,95,00,000/- WAS FOR A COMPLETED BUILDING OF 22000 SQ. FT. WHICH WAS NOT I N EXISTENCE ON THE DATE OF SALE ON 18/11/2005 WHICH IS EVIDENCED BY THE SALE D EED. IT IS ALSO PERTINENT TO NOTE THAT OCCUPANCY CERTIFICATE IS OBTAINED ONLY ON 24/06/2006 MUCH AFTER THE DATE OF SALE. IN THE STATEMENT TAKEN AT THE TIME OF SEARCH ON 02/09/2011 NO QUESTION REGARDING THE SEIZED LETTER WAS ASKED TO P ARTNER K. YATHEENDRAN ON THE SALE OF THIS PROJECT. COPY OF THE STATEMENT FROM K . YATHEENDRAN IN THE PAPER BOOK PAGE-23 TO 41. A STATEMENT TAKEN FROM V. PAR AMESWARAN ON 02/09/2011 AND QUESTION NO. 8 & 9 ARE RELATING TO THIS PROJECT BUT THERE IS NO REFERENCE TO ITA NO.429/COCH/2015 10 SALE OF PROPERTY AND THE ALLEGED RECEIPT OF SALE PR ICE OF RS.2,95,00,000/-. IT IS A MATTER OF RECORD THAT BOTH THE SEIZED LETTER AS WEL L AS THE STATEMENT UNDER SECTION 132(4A) FROM THE PARTNERS FROM V. PARAMESWA RAN ARE NOT SHOWING ANY DETAILS OF THE ALLEGED PAYMENT OF RS.2,95,00,000/- AND ALSO THAT THERE ARE NO OTHER EVIDENCE SEIZED AT THE TIME OF SEARCH IN REGA RD TO THE SALE. AT THE TIME OF SEARCH NO CASH, BULLION OR JEWELLERY OR ANY UNEXPLA INED DEPOSITS IN THE NAME OF THE PARTNERS ARE FOUND OR ASSESSED. IN THE ABSENCE OF ANY SUCH EVIDENCE, IT IS WRONG TO ASSUME THAT THE SALE PRICE FOR A BUILDING OF DIFFERENT SIZES AND FLOOR AREA PROPOSED TO BE CONSTRUCTED BUT IN FACT DID NOT TAKE PLACE ON THE DATE OF SALE ON 18.11.2005. WE ARE OF THE VIEW THAT IF SUC H ADDITIONAL CONSTRUCTION IS MADE BEFORE THE DATE OF SEARCH SOME EVIDENCE OF FUR THER CONSTRUCTION SHOULD HAVE BEEN AVAILABLE AND FOUND AT THE TIME OF SEARCH . IN THE ABSENCE OF ANY SUCH MATERIAL EVIDENCE TO SUBSTANTIATE THE SALE VAL UE OF RS.2,95,00,000/- THE LD. CIT(A) IS JUSTIFIED IN CANCELLING THE ASSESSMENT. 10. IT WAS BROUGHT TO OUR NOTICE THAT THE BUYER OF THE PROPERTY R.V. SHERIFF KHAN WITH PAN-AWDPS4151P IS AN ASSESSEE WITH THE ASSESSI NG OFFICER WHO ASSESSED THE FIRM. SHRI R.V. SHERIFF KHAN WAS NOT EXAMINED IN REGARD TO PURCHASE PRICE OF PROPERTY AT ANY TIME DURING THE ASSESSMENT PROCEEDI NGS OF THE ASSESSEE FIRM OR IN HIS OWN PERSONAL ASSESSMENT. IF SUCH A SUBSTANTI AL INVESTMENT IS MADE BY R.V. SHERIFF KHAN EXPLANATION SHOULD HAVE BEEN CALLED FO R FROM HIM FOR THE SOURCE OF HUGE INVESTMENT AND HE ALSO SHOULD HAVE BEEN EXAMIN ED U/S. 131 AS A PART OF ITA NO.429/COCH/2015 11 THE ASSESSMENT PROCEEDINGS OF THE FIRM. NO EXAMINA TION OR CROSS EXAMINATION ARE DONE DURING THE ASSESSMENT PROCEEDINGS FOR ESTA BLISHING THE ALLEGED SUPPRESSION OF SALE PRICE OF THIS PROPERTY WITH RES PECT TO BUYERS AND SELLERS OF THE PROPERTY. IN FACT, THE ASSESSMENT IS ON THE BASIS OF THIS LETTER REGARDING THE PROPOSED CONSTRUCTION WHICH IS NOT AN EVIDENCE AT A LL FOR MAKING AN ASSESSMENT AND WE SUPPORT THE ORDER OF THE LD. CIT(A) IN CANCE LLING THE ASSESSMENT. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE FIND NO INF IRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY REVERSED THE ORDER OF THE AS SESSING OFFICER. ACCORDINGLY, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IN I. T.A. NO.429/COCH/2015 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-0 8-2016. SD/- SD/- ( . ) (GEORGE GEORGE K.) ( . . ) (B. P. JAIN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER & /PLACE: /COCHIN 2 /DATED: 22 ND AUGUST, 2016 GJ/ 1 * (.3 43%. /COPY TO: 1. &' /M/S. ARDRA ASSOCIATES, CAPITAL TOWERS,THIRUVAMBADY P.O. PATTURAIKKAL, THRISSUR-680 022. 2. () &' /THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIR CLE-1, KOZHIKODE. 3. ,5 . ( )/THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCHI . ITA NO.429/COCH/2015 12 4. ,5 . /THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. 367 (. , /THE DR/ITAT, COCHIN BENCH. 6. 79 :- /GUARD FILE. 1, /BY ORDER ; /ASSISTANT REGISTRAR - .