DCIT CC 6(4), MUMBAI V. YUG DEVELOPERS LTD, MUMBAI

ITA 4744/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9877 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 20-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDISH KALRA
• Keywords: Unexplained expenditure; Search and seizure; Documents seized
• Section: 69C; 153A

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -GBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C. N. PRASAD,JUDICIAL MEMBER ./I.T.A./4744 TO 46/MUM/2015, /ASSESSMENT YEAR: 2007-08 TO 2009-10 DY. CIT-CC-6(4) (ERSTWHILE ACCC-39) CENT. CIRCLE-6(14), ROOM NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. VS. M/S. YUG DEVELOPERS LTD. 11 B, MITTAL TOWERS, B WING, NARIMAN POINT, MUMBAI-400 021. PAN:AAACY 2923 K ( /APPELLANT) ( / RESPONDENT) / REVENUE BY: SMT. VIDISH KALRA-CIT-DR /ASSESSEE BY: SHRI VIJAY MEHTA / DATE OF HEARING: 11/07/2017 / DATE OF PRONOUNCEMENT: 11/07/2017 , / PER RAJENDRA A.M. - CHALLENGING THE ORDERS ,DATED 31.3.2015 OF CIT(A)- 54,MUMBAI THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL FOR THE ABOVE MENTIONE D ASSESSMENT YEARS (AY.S). AS THE ISSUE INVOLVED IN THESE APPEAL ARE IDENTICAL,EXCEPT FOR T HE AMOUNTS INVOLVED,SO,WE ARE ADJUDICATING THEM TOGETHER FOR THE SAKE OF CONVENIENCE.THE DETAI LS OF FILING OF RETURN OF INCOME, RETURNED INCOMES, ASSESSED INCOME CAN BE SUMMARISED AS UNDER : AY. ROI FILED ON RETURNED INCOME ASSESSED INCOME A SSTT. ORDER DTD. 2007-08 13/10/2007 (-)RS.2,106/- RS.85.04 LAKHS 29/ 12/2010 2008-09 07/09/2008 RS.12,772/- RS.83.40 LAKHS 29/12 /2010 2009-10 25/09/2009 (-) RS.34,666/- RS.75.75 LAKHS 2 9/12/2010 ITA/4744/MUM/15(2007-08),BRIEF FACTS: 2. EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING THE AD DITION OF RS.40.12 LAKHS,MADE BY THE AO, U/S. 69C OF THE ACT.A SEARCH AND SEIZURE ACTION WAS CARRIED OUT ON 5/3/2009 IN THE CASES OF JAI CORP GROUP; ITS EMPLOYEES AND CLOSE ASSOCIAT ES WHO WERE INVOLVED IN ACQUIRING PIECES OF LAND.THE GROUP WAS PARTNER IN TWO MAJOR UP-COMIN G SPECIAL ECONOMIC ZONE-SEZ NAMELY, NAVI MUMBAI SPECIAL ECONOMIC ZONE (NMSEZ) AND MUMBA I SPECIAL ECONOMIC ZONE (MSEZ).ONE ANAND JAIN WAS CHAIRMAN OF BOTH THE ZONE S AND IT HAD PURCHASED HUGE CHUNK OF LAND IN THE VICINITY OF THE SEZ.S TO DEVELOP TOWNSH IP IN THE AREAS.IT HAD ALSO PURCHASED HUGE AGRICULTURAL/NON AGRICULTURAL LAND IN THE SUBURBS O F MUMBAI, THANE, PANVEL AND ALIBAUG. ONE OF THE LAND AGGREGATOR WAS GANESH ATMARAM MUKASHE ( GAM). THE PUNE BUSINESS CENTRE OF JAI CORP WAS SURVEYED U/S.133A OF THE ACT.PURSUANT TO THE SEARCH,NOTICES U/S. 153A WERE ISSUED AND SERVED ON VARIOUS ASSESSEES,INCLUDING TH E ASSESSEE UNDER CONSIDERATION. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE WITH RE GARD TO DOCUMENTS SEIZED FROM THE 4744-46/M/15-YUG DEVELOPERS 2 PREMISES OF GAM AND THE OFFICE PREMISES OF JAI CORP GROUP,PUNE THE AO HELD THAT THE ASSESSEE HAD MADE UNACCOUNTED CASH PAYMENT/ON MONEY PAYMENT AMOUNTING TO RS.40.12 LAKHS FOR ITS LAND TRANSACTIONS.TREATING THE INVEST MENT AS UNEXPLAINED EXPENDITURE U/S.69C OF THE ACT,THE AO ADDED THE SAME TO THE TOTAL INCOME O F THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE MADE ELABORATE SUBMISSIONS. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND REFE RRING TO ORDER OF THE TRIBUNAL IN THE CASE OF JAI CORP LIMITED FOR THE AY.S 2007-08 TO 2009-10 ,DATED 26/11/2014,HE HELD THAT FACTS OF THE CASE UNDER APPEAL WERE SIMILAR TO THE FACTS OF JAI CORP LTD., THAT THE ADDITIONS WERE MADE ON THE SAME SET OF DOCUMENTS SEIZED FROM THE PREMIS ES OF GAM OR IMPOUNDED FROM THE PUNE OFFICE OF JAI CORP GROUP. FOLLOWING THE ORDER OF TH E TRIBUNAL HE DELETED THE ADDITION MADE BY THE AO. 4. DURING THE COURSE OF HEARING BEFORE US,THE DEPARTME NTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE (AR) REFERRED TO THE ORDER OF THE TRIBUNAL ITA.S/6011, 4454,6012/MUM/2012 DATED 26/11/2014. WE FIND THAT THE TRIBUNAL HAD WHILE DECIDING HE ABOVE APPEALS AT PAGE-8-11 (PARA 10 TO 13) HAS DEALT THE ISSUE AS UNDER :- GROUND NO.6 10. VIDE GROUND NO.6, THE REVENUE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING ADDITION OF RS.35,35,890/- MADE ON THE BASIS OF SEIZED MATERIAL FOUND FROM THE RESIDENCE OF SHRI GANESH MOKASHE. 11. BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURI NG THE COURSE OF SEARCH AND SEIZURE OPERATION IN THE CASE OF GROUP COMPANIES OF THE ASSESSEE, VARIOU S DOCUMENTS WERE FOUND AND SEIZED, ON THE BASIS OF WHICH, THE STATEMENTS OF SHRI ANAND JAIN, SHRI VIRENDRA JAIN, SHRI GAURAV JAIN, SHRI L.M. DHANDA, SHRI JEEVAN SURVE, SHRI ATUL PAWAR, SH RI HIREN OZA, SHRI DILIP DHERAI AND SHRI SANJAY PUNKHIA WERE RECORDED. ON THE BASIS OF THE S EIZED DOCUMENTS AND STATEMENTS RECORDED DURING SEARCH, THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE COMPANY FOR SUBMITTING THE DETAILS RELATING TO SEIZED PAPERS. THE AO OBSERVED THAT IN CASE OF THE ASSESSEE COMPANY, SHRI GANESH MOKASHE, SHRI MADAN KOLAMBEKAR AND SHRI MAHE NDRA BANTHIA WERE THE LAND AGGREGATORS TO WHOM THE ASSESSEE COMPANY HAD MADE P AYMENTS AND THEY BROUGHT OFFERS OF LAND DEALS TO THE COMPANY. AFTER GETTING THE CONSENT OF THE ASSESSEE COMPANY, THE LAND AGGREGATOR UTILIZED THE MONEY RECEIVED AS ADVANCE FOR MAKING A DVANCES TO VARIOUS FORMERS/ INVESTORS/SELLERS. THE AO HELD THAT THE ASSESSEE CO MPANY HAD MADE PURCHASES IN NAIGAON VILLAGE AND UNACCOUNTED CASH OF RS.35.36 LACS HAD BEEN PAID OUT OF THE BOOKS AND ACCORDINGLY TREATED IT AS UNDISCLOSED INCOME U/S. 69B OF THE ACT. 12. THE LD. CIT(A), HOWEVER, DELETED THE SAID ADDIT ION OBSERVING AS UNDER: '5.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT, ORDER OF THE AO AND FACTS OF THE PRESENT CASE CAREFULLY, IT IS NOTICED THAT THIS ISS UE HAS BEEN DECIDED BY THE LD. CIT(A)-36 IN CASE OF THE ASSESSEE FOR A.Y. 08-09 BY HOLDING AS U NDER: 'I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE AO. THE AO MADE AN ADDITION OF RS.70,96,719/- ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENTS IN THE PURCHASE NA GAON LAND U/S.69B OF THE ACT. I HAVE PERUSED THE SEIZED MATERIALS RELATING TO THIS ISSUE CAREFULLY. I FIND THAT THE AO HAS RELIED ON VARIOUS SEIZED MATERIALS AS DISCUSSED IN THE ASSESS MENT ORDER. ON THE BASIS OF SEIZED MATERIALS FOUND FROM THE RESIDENCE OF SHRI G ANESH MOKASHE AND IMPOUNDED FROM THE OFFICE OF THE APPELLANT, THE AO CAME TO THE CONCLUSION THAT THE APPELLANT HAS MADE AN INVESTMENT TO THE TUNE OF RS.70,96,719/-. A PERUSAL OF THE SEIZED MATERIALS INDICATES THAT THE IMPOUNDED M ATERIALS FROM THE APPELLANT'S OFFICE AS WELL AS FROM THE RESIDENCE OF SHRI GANESH MOKASHE DOES NOT REVEAL ANY FACT THAT THE APPELLANT HAS MADE INVESTMENTS OF THE SAID LAND IN THE PURCHASE OF 4744-46/M/15-YUG DEVELOPERS 3 LAND AT NAIGAON TALUKA, MAWAL DIST PUNE BEARING GAT /SURVEY NO.73/78 RESPECTFULLY. THE APPELLANT HAS ONLY PURCHASED LAND AT THESE TWO PLACES AND BESIDES THIS, NO LAND HAS BEEN PURCHASED BY THE APP ELLANT DURING THE YEAR. THE SEIZED MATERIAL FOUND FROM THE RESIDENCE OF SHRI GA NESH MOKASHE AS WELL AS THE SEIZED MATERIAL IMPOUNDED FROM THE OFFICE OF JAI CO RP GROUP AT NAKODA DOES NOT SPEAK AT ALL ABOUT THE PURCHASE OF THIS LAND, RATHE R THESE PAPERS ARE RELATED TO SOME OTHER TRANSACTIONS - NOT DONE BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. 8.7 FURTHER, THE APPELLANT IS DEALING WITH SHRI GAN ESH MOKASHE ON PRINCIPAL-TO- PRINCIPAL BASIS. THE LAND PURCHASED BY THE APPELLAN T AT NAIGAON IS DULY REGISTERED AND STAMP DUTY HAS BEEN PAID BY THE APPELLANT. THE CONSIDERATION PAID FOR THE PURCHASE OF THIS LAND IS INCONFORMITY WITH THE RATE S OF READY RECKONER OF THE STAMP DUTY AUTHORITIES. FURTHER, I NOTICE THAT ALL THE PAYMENTS IN RESPECT OF PURCHASE OF LAND WERE MADE BY CHEQUE ONLY, NO EVIDE NCE OF ANY KIND HAS BEEN EITHER FOUND DURING THE COURSE OF SEARCH AT THE RES IDENCE OF SHRI GANESH MOKASHE AND THE APPELLANT. FURTHER, THE FACTS REVEAL THAT J AI CORP LTD ENTERED INTO AN AGREEMENT FOR SALE FOR PURCHASE OF AGRICULTURAL LAN D IN VILLAGE NAIGAON TALUKA, MAWAL DIST PUNE; CONDITIONS IN THE AGREEMENT FOR SA LE WAS THAT THE LAND HAS TO BE CONVERTED INTO NON-AGRICULTURAL LAND AND ONLY THERE AFTER, THE LAND WILL BE TRANSFERRED BY A DEED OF CONVEYANCE. THE POSSESSION OF LAND WAS NOT GIVEN BY THE SELLER OF THE LAND TILL DATE. IT IS FURTHER NOTICED THAT BEFORE AND AFTER ENTERING INTO AN AGREEMENT FOR SALE, THE SELLER'S NAME IS APPEARIN G IN 7/12 ABSTRACT AND ALL LAND RECORDS, NOWHERE THE JAI CORP LTD., AS OWNER OF THE LAND IS APPEARING IN LAND RECORDS MAINTAINED BY THE GRAM PANCHAYAT. EVEN THE LATEST 7/12 ABSTRACT WAS ISSUED ON 05-01-2012, NAME OF OWNER ARE THE SELLERS OF THE LAND ARE APPEARING. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APP ELLANT FILED COPIES OF READY RECKONER FOR THE RELEVANT PERIOD, WHEREIN GUT NO.78 AND 73 COMES IN S. NO. I CALLED DONGERPAD BUT NO RATE GIVEN IN COLUMN RATE P ER HECTOR. FURTHER, I NOTICE THAT IN GUT NO.78 AGREEMENT VALUE RS.53,07,250/- HA S BEEN SHOWN, WHEREAS MARKET VALUE RS.15,46,763/- IS GIVEN BY SUB-REGISTR AR OF VADGAON-MAVAL. SIMILARLY, IN GUT NO.73 AGREEMENT VALUE IS RS.72,45 ,000/-, WHEREAS THE MARKET VALUE HAS BEEN SHOWN AT RS.24,84,000/-BY SUB-REGIST RAR OF VADGAON-MAVAL. THUS, THE APPELLANT HAS PURCHASED THIS LAND BY PAYI NG THRICE THE MARKET VALUE OF THE LAND. WHEN THE APPELLANT HAS PURCHASED LAND AT SUCH AN EXORBITANT RATE, THE QUESTION OF INCURRING ANY INVESTMENT IN CASH SEEMS TO BE UNBELIEVABLE. FURTHER, THERE IS NO EVIDENCE ON RECORD TO SUBSTANTIATE THAT THE APPELLANT HAS MADE ANY INVESTMENT IN CASH. ACCORDINGLY, I FIND THAT THERE IS NO JUSTIFICATION OF MAKING AN ADDITION OF RS.70,96,719/- ON ACCOUNT OF ALLEGED UN DISCLOSED INVESTMENT. ACCORDINGLY, THE ADDITION OF RS.70,96,719/- IS DELE TED AND THE GROUND OF APPEAL OF THE APPELLANT IS ALLOWED.' 5.4 KEEPING IN VIEW THE FACTS & CIRCUMSTANCES THAT LD. CIT(A)-36 HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. THE SAME DECISION IS FOLLOW ED IN THE PRESENT CASE BECAUSE THE SEIZED PAPERS RELIED ON BY LD. CIT(A)-36 FOR A.Y. 08-09 AR E THE SAME FOR ASSESSMENT YEAR UNDER CONSIDERATION. IT IS PERTINENT TO MENTION HERE THAT THE SEIZED PAPERS IN THE PRESENT CASE ARE ENTIRELY DIFFERENT FROM THE SEIZED PAPERS IN CASE O F 52 LAND COMPANIES (GROUP COS. OF THE ASSESSEE). HOWEVER THE AO HAS INTERPRETED THESE PAG ES ON THE BASIS OF THE PAGES SEIZED IN THOSE CASES. THE INTERPRETATION OF SEIZED PAPERS HA S TO BE MADE KEEPING IN VIEW THE CONTEXT AND THE RELEVANT CASE. THERE IS NO MENTION OF CASH PAYMENT MADE BY THE ASSESSEE OVER AND ABOVE THE CHEQUE PAYMENT SHOWN IN THE BOOKS OF ACCO UNT. THEREFORE ON THE BASIS OF THE SEIZED PAPERS AND OTHER CASES THE SAME INTERPRETATI ON CANNOT BE APPLIED IN THIS CASE. IN TOTALITY OF FACTS & CIRCUMSTANCES, IT IS HELD THAT THE SEIZED PAPERS IN THIS CASE ARE TOTALLY DIFFERENT TO THE PAPERS SEIZED IN OTHER LAND COMPAN IES OF THE ASSESSEE GROUP. THEREFORE, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE, HEN CE DELETED. GROUND OF APPEAL IS ALLOWED.' 13. BEFORE US, THE LD. D.R. COULD NOT SHOW FROM THE RECORD THAT THE ALLEGED DOCUMENTS SEIZED DURING THE SEARCH AND SEIZURE OPERATION WERE PERTAI NING TO THE ASSESSEE OR THAT THE ASSESSEE HAD MADE UNDISCLOSED INVESTMENTS IN THE PROPERTY AS ALL EGED. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASESSEE HAS SUCCESSFULLY BROUGHT OUR ATTENTION TO THE FACT THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY THE LD . CIT(A) THAT THE RELATION OF THE ASSESSEE WITH SHRI GANESH MOKASHE WAS ON PRINCIPLE TO PRINCIPLE B ASIS. WHATEVER THE LAND WAS PURCHASED BY THE ASSESSEE AT NAIGAON WAS DULY REGISTERED AND STA MP DUTY THEREUPON HAD BEEN PAID BY THE ASSESSEE. THE CONSIDERATION PAID FOR THE PURCHASE O F SUCH LAND WAS NOT ONLY INCONFORMITY WITH BUT WAS MORE THAN THE RATES OF READY RECKONER OF ST AMP DUTY AUTHORITIES. ALL THE PAYMENTS IN RESPECT OF PURCHASE OF LAND WERE MADE BY CHEQUE ONL Y AND NO EVIDENCE OF ANY OTHER KIND HAD 4744-46/M/15-YUG DEVELOPERS 4 BEEN FOUND DURING THE COURSE OF SEARCH WHICH WOULD SHOW ANY RELATION OF THE ASSESSEE WITH THE PURCHASE OF LAND OUT OF UNDISCLOSED INVESTMENTS. UN DER SUCH CIRCUMSTANCES, THE REVENUE HAS FAILED TO POINT OUT ANY FACT OR DOCUMENT ON THE FIL E WHICH CAN BE RELATED TO THE ASSESSEE SHOWING UNDISCLOSED INVESTMENT. WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO. ACCORDINGLY, THIS GROUND OF THE APPEAL OF THE REVENUE IS ALSO HEREBY DISMISSED. RESPECTFULLY FOLLOWING THE ABOVE ORDER,WE HOLD THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY INFIRMITY.SO CONFIRMING HIS ORDER WE DECID E EFFECTIVE ORDER AGAINST THE AO. ITA/4745/MUM/15(2008-09) AND ITA/4746/MUM/15(2009-1 0): FACTS FOR BOTH THE AY.S ARE IDENTICAL TO THE FACTS OF THE AY 2007-08. AS STATED EARLIER THE ONLY DIFFERENCE IS THE AMOUNT INVOLVED.SO,FOLLOWING OUR ORDER FOR AY.2007-08,WE UPHOLD THE ORDER OF THE FAA. AS A RESULT, APPEALS FILED BY THE AO FOR ALL THE TH REE AY.S STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH ,JULY , 2017. 11, , 2017 SD/- SD/- ( . . / C.N.PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : .2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.