GREEN VALLEY HOME DEVELOPERS P. LTD, NAVI MUMBAI V. ACIT (CC) 13, MUMBAI

ITA 5066/MUM/2009

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0289 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 31-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 04-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS VIDISHA KATRA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Depreciation; Loose papers; Document seized; Period of limitation; Cost of acquisition; Corroborative evidences; Block assessment; Surrender of tenancy right; Time period of passing order; Documents seized
• Section: 143(3); 50C; 133A; 153A; 133(6); 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ITA NO. 5065 / MUM/20 09 & 5066/MUM/2009 ( ASSESSMENT YEAR : 2006 - 07 & 2007 - 08 ) M/S. GREEN VALLEY HOME DEVELOPERS PVT. LTD., GLOMAX MALL, SHOP NO .43,44, PLOT NO.17,18,19, STATION ROAD, KHARGHAR, NAVI MUMBAI 410 210 VS. ACIT - 13, MUMBAI PAN/GIR NO. AAACA 4509R APPELLANT ) .. RESPONDENT ) ITA NO. 5111/ MUM/20 09 & 5112/MUM/2009 ( ASSESSMENT YEAR : 2006 - 07 & 2007 - 08 ) ACIT - 13, MUMBAI VS. M/S. GREEN VALLEY HOME DEVELOPERS PVT. LTD., GLOMAX MALL, SHOP NO.43,44, PLOT NO.17,18,19, STATION ROAD, KHARGHAR, NAVI MUMBAI 410 210 PAN/GIR NO. AAACA4509R APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI RUSHABH MEHTA REVEN UE BY MRS. VIDISHA KATRA DATE OF HEARING 31 /0 3 /201 7 DATE OF PRONOUNCEME NT 14 / 06 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT (A) FOR THE ASSESSMENT YEAR 2006 - 07 & 2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 153C. COMMON GROUNDS HAVE BEEN TAK EN IN BOTH THE YEARS UNDER CONSIDERATION BY ASSESSEE AND REVENUE. ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 3 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN A.Y 2006 - 07 ARE AS UNDER: - (A) THE LEARNED CIT(APPEALS) ERRED IN LAW AND FACTS IN CONFIRMING 'THE ACTION OF ASSESSING OFFICER IN A SSESSING INCOME OF RS.7,71 ,000/ - UNDER THE HEAD LONG TERM CAPITAL GAINS ON ACCOUNT OF SURRENDER OF TENANCY RIGHTS. (B) THE LEARNED CIT(APPEALS) ERRED IN APPRECIATING THAT THE TENANCY WAS SURRENDERED TO THE RIGHTFUL OWNER OF THE PROPERTY AS PER THE PROVIS IONS GOVERNING TENANTED PROPERTIES AND THE APPELLANT DID NOT HAVE ANY INHERENT RIGHT TO RECEIVE AND HAD IN FACT NOT RECEIVED ANY COMPENSATION OR CONSIDERATION ON SUCH SURRENDER. (C) THE LEARNED CIT (APPEALS) ERRED IN LAW IN APPRECIATING THAT THE PROVISIO NS OF SECTION SAC ARE NOT APPLICABLE TO THE FACTS OF THE CASE, AS NO DOCUMENT IS REQUIRED TO BE EXECUTED AND REGISTERED AND WAS INFACT NOT EXECUTED NOR REGISTERED FOR SURRENDER OF TENANCY RIGHTS UNDER THE LAW GOVERNING THE SURRENDER OF TENANCY RIGHTS. (C ) THE LEARNED CIT (APPEALS) ERRED IN LAW AND FACT IN APPRECIATING THAT DOCUMENT EXECUTED BETWEEN THE LANDLORD AND A THIRD PARTY, TO WHICH APPELLANT WAS NOT A PARTY, COULD NOT BE MADE A BASIS FOR ESTIMATING SALE CONSIDERATION ON SURRENDER OF TENANCY RIGHTS AND FOR WHICH NO CONSIDERATION WAS ACTUALLY RECEIVED OR FOUND TO BE RECEIVED BY THE APPELLANT. 2. YOUR APPELLANT PRAYS THAT (A) THE SAID ADDITION OF RS 7,71,000/ - ON ACCOUNT OF ALLEGED CAPITAL GAINS ON SURRENDER OF TENANCY RIGHTS BE DELETED. (B) SUCH OTHER RELIEF AS MAY BE DEEMED FIT BE GRANTED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OR ALL GROUNDS OF APPEAL. 3. THE GROUNDS TAKEN BY REVENUE IN A.Y. 2006 - 07 ARE AS UNDER: - I. IN THE FACTS AND CIRCUMSTANCES OF THE LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS AMOUNTING TO RS. 2,91,29,314 / - ON ACCOUNT OF UNEXPLAINED SALES. ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 4 II. IN THE FACTS AND CIRCUMSTANCES OF THE LAW THE LD.CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT THERE WAS AN UNACCOUNTED SALE PERTAIN TO AY.2006 - 07 WH ICH WAS ESTABLISHED DURING THE ASSESSMENT PROCEEDINGS. ILL. IN THE FACTS AND CIRCUMSTANCES OF THE LAW THE LD.CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT THERE WAS AN UNACCOUNTED SALE PERTAIN TO AY.2006 - 07 WHICH WAS ESTABLISHED DURING THE ASSESSMENT PROCEE DINGS. IV. IN THE FACTS & CIRCUMSTANCES OF THE LAW THE LD. CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT THE EVIDENCE AVAILABLE IN THE FORM OF CASH COMPONENTS TOWARDS SHOP NO. 334 BEING 77% WHICH WAS ESTABLISHED DURING THE ASSESSMENT PROCEEDINGS. V. THE AP PELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CIT(A), CENTRAL VII, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. VI. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OR ALL THE GROUNDS OF A PPEAL, IF NEED BE. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 5. FACTS IN BRIEF ARE THAT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS AS BUILDER AND DEVELOPER. HARESH N PATEL IS ONE OF THE DIRECTORS OF ASSESSEE COMPANY. A S EARCH ACTION WAS CARRIED AT THE RESIDENCE OF SHRI. HARESH N PATEL AND CONNECTED PERSONS ON 10 - 01 - 2007 AT VASHI. A SIMULTANEOUS SURVEY ACTION U/S. 133A WAS CARRIED OUT AT THE ASSESSEE'S OFFICE PREMISES AT KHARGHAR. THE ID. ASSESSING OFFICER HAS STATED AT PA RA 2 OF THE ASSESSMENT ORDER THAT THE DOCUMENTS SEIZED AT THE RESIDENTIAL PREMISES OF SHRI. HARESH PATEL REFERRED TO ANNEXURE A - 1 HAVING 27 PAGES PAGE 220 TO 247 OF PAPER BOOK) WHICH PERTAINED TO THE ASSESSEE REVEALED CERTAIN UNDISCLOSED INCOME OF THE ASSE SSEE. THE EXPLANATION AS REGARD TO THESE PAGES WAS ALSO FURNISHED TO THE AO WHICH IS PLACED ON PAGE 218 TO 219 OF THE PAPER BOOK. THE PERUSAL OF THE SEIZED DOCUMENTS INDICATE THAT THESE DOCUMENTS WERE PAPERS RELATING TO ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 5 PERMISSION AND CC CERTIFICATE AND S O M E PAPERS PERTAINED TO ROUGH WORKING AND WERE INFACT ALSO TITLE SO. WE FOUND THAT THE SAID DOCUMENTS WERE DULY EXPLAINED AND WERE ACCORDINGLY NOT INCRIMINATING. DURING THE COURSE OF SURVEY ACTION AT THE ASSESSEE'S PREMISES, ANNEXURE A - 1 CONTAINING 5 PAGES (PAGE 209 TO 213 OF PAPER BOOK) WERE IMPOUNDED OF WHICH PAGE 5 INDICATED SOME NOTINGS FOR A.Y. 2007 - 08. THIS IS THE ONLY BASIS OF ADDITION MADE IN A.Y. 2006 - 07 AND 2007 - 08. SHRI. HARESH N PATEL HAS IN THE STATEMENT U/S. 132(4) OFFERED A SUM OF RS. 1 CRORE IN THE HANDS OF ASSESSEE COMPANY FOR A.Y. 2007 - 08 TO COVER THE DISCREPANCIES IN THE IMPOUNDED MATERIAL SO AS TO BUY PEACE OF MIND AND AVOID PENAL CONSEQUENCES. 6. DURING THE COURSE OF SCRUTINY ASSESSMEN , INSPITE OF ONE CRORE HAVING OFFFERED IN ADDITION TO THE REGULAR BUSINESS INCOME, THE AO MADE ADDITION IN THE A.Y.2006 - 07 ON ACCOUNT OF ON MONEY ALLEGED TO BE RECEIVED BY THE ASSESSEE. AO ALSO MADE ADDITION ON ACCOUNT OF ALLEGED CAPITAL GAIN ON SURRENDER OF TENANCY RIGHTS. 7. BY THE IMPUGNED ORDER, CIT(A) DELETED THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED SALES. HOWEVER ADDITION MADE ON ACCOUNT OF SURRENDER OF TENANCY RIGHT WAS UPHELD BY CIT(A). 8. AGAINST THE ABOVE ORDER OF CIT(A) BOTH ASSESSEE AND REVENUE ARE IN FURTHER APPEAL BEFORE US. 9. AT THE OUTSET , IT WAS CONTENDED BY LEARNED AR THAT ISSUE IS COVERED BY THE DECISION OF THE CO - ORDINATE BENCH IN CASE OF GROUP CONCERN M/S. ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 6 GIRIRAJ DEVELOPERS, WHEREIN TRIBUNAL DELETED THE ADDITION BY OBSERVING THAT THERE WAS NO INCRIMINATING MATERIAL WITH RESPECT TO TH E ADDITIONS MADE BY THE AO. FURTHER, C ONTENTION OF THE LEARNED AR WAS THAT T HE BASIS OF ADDITION WAS DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY AT THE ASSESSEES OFFICE PREMISES AND NOT DURING THE COURSE OF SEARCH AT PREMISES OF HARESH PATEL WHICH IS VERY CLEAR FROM THE ASSESSMENT ORDER ITSELF. 10. AS PER LEARNED A.R, I N SO FAR AS THE CONTENTION OF LEARNED CIT (DR) WITH REGARD TO STATEMENT U/S. 132(4) BEING THE BASIS FOR ASSUMING JURISDICTION U/S. 153C IS CONCERNED; IT IS IMPORTANT TO NOTE THAT THE ID . ASSESSING OFFICER AS MAY BE SEEN FROM PARA 2 OF THE ASSESSMENT ORDER HAS REFERRED DOCUMENTS BEARING PAGE 1 TO 27 SEIZED IN THE COURSE OF PROCEEDINGS AND ACCORDINGLY THE BASIS OF ASSUMING JURISDICTION ITSELF IS ILL FOUNDED. WITHOUT PREJUDICE, IT WAS SUBMI TTED THAT STATEMENT RECORDED U/S. 132(4) DU RING SEARCH CANNOT BE A GROUND F OR ASSUMING JURISDICTION U/S. 153C. THE ACT STIPULATES EITHER MONEY SEIZED OR REQUISITIONED, BULLION SEIZED OR REQUISITIONED, JEWELLERY SEIZED OR REQUISITIONED, OTHER VALUABLE ARTIC LES SEIZED OR REQUISITIONED , BOOKS OF ACCOUNTS SEIZED OR REQUISITIONED , DOCUMENTS SEIZED OR REQUISITIONED , PERTAINING TO THE ASSESSEE HAVING BEARING ON DETERMINING THE TOTAL INCOME OF THE ASSESS E E FOR A PARTICULAR YEAR OR YEARS TO BE THE INITIATION POINT O F PROCEEDINGS U/S. 153C. AS PER LEARNED AR. T HE SECTION NOWHERE STIPULATES THAT A STATEMENT U/S. 132(4) CAN BE CONSIDERED FOR THE PURPOSE OF INITIATION OF PROCEEDINGS U/S. 153C OF ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 7 THE ACT. THIS ARGUMENT HAS ALSO BEEN CONSIDERED BY THE CO - ORDINATE BENCH IN THE CASE OF GIRIRAJ DEVELOPERS AT PARA 8.1 OF THE ORDER. IN FACT IN THE SAID CASE ALSO AN OFFER OF RS. 1.50 CRORE WAS MADE BY SHRI. HARESH PATEL IN HIS STATEMENT U/S. 132(4) BY THE VERY SAME STATEMENT. THIS VIEW HAS ALSO BEEN PROPOUNDED BY THE HONBLE DELH I HC IN THE CASE OF CIT V. LATE SHRI RAJ PAL BHATIA & ORS (10 TAXMANN.COM 191 DEL) WHERE IT OBSERVED THAT: THE TRIBUNAL HAS HELD THAT THIS STATEMENT COULD NOT BE TREATED BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ASSETS WHICH ONLY COULD BE THE BASIS FOR INV OKING THE PROVISION OF SECTION 158 BD OF THE ACT. ADMITTEDLY, STATEMENT OF MRS. CHARLA IS NEITHER BOOKS OF ACCOUNTS' ORASSETS'. THE QUESTION, THEREFORE, IS AS TO WHETHER THIS STATEMENT CAN BE TREATED AS OTHER DOCUMENTS'. PRIMA FACIE, IT IS DIFFICULT TO ACCEPT THIS PROPOSITION. STATEMENT WAS NOT THE DOCUMENT WHICH WAS FOUND DURING SEARCH. IN FACT THIS WAS THE DOCUMENT WHICH CAME TO BE CREATED DURING THE SEARCH AS THE STATEMENT WAS RECORDED AT THE TIME OF SEARCH. THEREFORE, IT CANNOT BE SAID THAT THE STATE MENT WAS SEIZED' DURING THE SEARCH AND THUS, WOULD NOT QUALIFY THE EXPRESSION DOCUMENT HAVING BEEN SEIZED DURING THE SEARCH. IN SUCH A SCENARIO, PROPER COURSE OF ACTION WAS REASSESSMENT U/S 147 READ WITH SECTION 148 OF THE ACT. 11. LEARNED AR FURTHER CO NTENDED THAT T HE ACT STIPULATES THAT THE INCRIMINATING MATERIAL HAS TO BE ASSESSMENT YEAR SPECIFIC. IN THE PRESENT CASE, NEITHER THE SEIZED DOCUMENTS NOR THE IMPOUNDED DOCUMENTS IN THE CASE OF SURVEY PROCEEDING NOR THE STATEMENT ON OATH U/S. 132(4) RELATE TO ASSESSMENT YEAR 2006 - 07. FOR INVOKING SECTION 153C (1), THE ID. ASSESSING OFFICER SHOULD BE IN RECEIPT OF ASSESSMENT YEAR SPECIFIC MATERIAL. THE SAID VIEW HAS BEEN MADE CLEAR BY THE AMENDMENT TO SECTION 153C BY FINANCE ACT, 2014 WHICH STIPULATES BEARIN G ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 8 ASSESSMENT YEAR OR YEARS. THE HONBLE BENCH OF KOLKATTA ITAT IN THE CASE OF HI - TECH INDUSTRIES V. DCIT (ITA 84 - 86/KOL/2011) AND THIRD MEMBER OF THE HONBLE BENCH OF COCHIN IT AT IN THE CASE OF HOTEL ROYALE PARK V. DCIT (ITA 601 - 603/COCH/2013) AND ROYAL CARTONS PVT LTD (ITA 472.COCH/2013) HAS OBSERVED THAT THE AMENDMENT TO SECTION 153C IS CLARIFICATORY AND ACCORDINGLY WOULD OPERATE RETROSPECTIVELY. THE HONBLE MADHYA PRADESH HI GH COURT IN THE CASE OF CIT V. MECHMEN (TA NO. 56/2011) HAS ALSO OBSERVED THAT THE ID. ASSESSING OFFICER MUST BE IN POSSESSION OF INCRIMINATING MATERIAL FOR THE YEAR SOUGHT TO BE ASSESSED U/S. 153C OF THE ACT. THE VIEW IS ALSO SUPPORTED BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. IBC KNOWLEDGE PARK (P) LTD. 385ITR 346. 1 2 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED BY LEARNED AR AND DR DURING THE COURSE OF HEARING BEFORE US. WE HAV E ALSO GONE THROUGH THE DECISION OF CO - ORDINATE BENCH IN CASE OF SISTER CONCERN M/S. GIRIRAJ DEVELOPERS. FROM THE RECORD WE FOUND THAT FOR THE A.Y.2006 - 07, THE ASSESSMENT WAS FRAMED U/S.153C ON THE PLEA THAT INCRIMINATING MATERIAL WAS FOUND AT THE RESIDENC E OF HARESH N PATEL. SIMILAR ADDITION S WERE ALSO MADE IN CASE OF GROUP CONCERN GIRIRAJ DEVELOPERS FOR THE A.Y.2006 - 07 & 2007 - 08 WHICH WERE ALSO SUBJECTED TO THE SAME SEARCH, WHEREIN TRIBUNAL AFTER HAVING THE FOLLOWING OBSERVATION DELETED THE ADDITION: - 8.2 .5 IN THE CASE ON HAND, IT IS AN ADMITTED FACT RECORDED IN THE ORDERS OF ASSESSMENT THAT THE INCRIMINATING DOCUMENTS IN THE FORM OF DIARIES WERE FOUND ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 9 DURING THE SURVEY PROCEEDINGS UNDERTAKEN IN THE BUSINESS PREMISES OF THE ASSESSEE FIRM. IT IS THEREFORE C LEAR THAT THE CONCERNED DOCUMENTS/DIARIES DID NOT EMANATE FROM OUT OF SEIZURES MADE IN THE COURSE OF SEARCH ACTION. IN THIS FACTUAL MATRIX OF THE CASE ON HAND, WE FIND THAT THE ESSENTIAL CONDITION OF SECTION 153C OF THE ACT IS NOT FULFILLED. FURTHER, THE A SSESSING OFFICER VIDE LETTER DT. 16/10/2015 HAS ADMITTED THAT THE SATISFACTION NOTE FOR INITIATING THE PROCEEDINGS U/S 143(3) R.W.S.153C OF THE ACT IS NOT AVAILABLE ON RECORD., BUT HAS STATED THAT IT WAS THE SAME ASSESSING OFFICER FOR INITIATION OF THE PROCEEDINGS U/S 143(3) R.W.S 153C OF THE ACT. THEREFORE, WE FIND THAT THE TWIN CONDITIONS (I) THAT THE INCRIMINATING DOCUMENTS SHOULD HAVE BEEN FOUND DURING THE COURSE OF SEARCH ACTION U/S132 OF THE ACT AND (II) THAT THE ASSESSING OFFI CER SHOULD HAVE RECORDED HIS SATISFACTION ARE NOT FULFILLED IN THIS CASE. FURTHER, THE CBDT, CIRCULAR NO: 24/2015 DT. 31/12/2015 HAS MADE ITS APPLICABILITY TO PENDING LITIGATION AS WELL. IN VIEW OF THE ABOVE FACTUAL AND LEGAL MATRIX OF THE CASE, WE UPHOLD THE GROUND RAISED THAT THE ORDERS O F ASSESSMENTS FOR ASST. YEARS 2006 - 07 AND 2007 - 08 PASSED U/S 143(3) R.W.S. 153C OF THE ACT ARE WITHOUT JURISDICTION. 1 3 . IN THE INSTANT CASE BEFORE US, I N VIEW OF THE FACT THAT' NO INCRIM INATING MATERIAL WAS FOUND IN CASE OF SEARCH AT THE PREMISE OF THIRD PERSON (MR. HARESH PATEL) AND THAT NO SATISFACTION NOTE HAS BEEN DRAWN BY THE LEARNED ASSESSING OFFICER, WE RESPECTFULLY FOLLOW THE DECISION OF CO - ORDINATE BENCH IN THE CASE OF SISTER CON CERN OF THE ASSESSEE - M/S. GIRIRAJ DEVELOPERS (ITA 5067/5113 - 14/MUM/2009) RENDERED UNDER THE SAME SET OF FACTS; WHEREIN THE APPEAL HAS BEEN DECIDED IN THE FAVOUR OF THE ASSESSEE BASED ON THE DECISION IN THE CASE OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. MECHMEN, HONBLE APEX COURT IN THE CASE OF CIT V. CALCUTTA KNITWEARS AND CBDT CIRCULAR NO. 24/2015. WE FOUND THAT THE FACTS OF THE SAID CASE ARE SAME IN AS MUCH AS ASSESSMENT IN THE SAID CASE WAS FRAMED BASED ON THE SAME SEARCH ACTION RELYI NG ON THE SAME STATEMENT AND A SIMILAR ADDITION IN RELATION TO ALLEGED ON - MONEY HAS BEEN MADE. ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 10 1 4 . HOWEVER, THE DEPARTMENTAL REPRESENTATIVE HAS RELIED ON PARA 2 OF ASSESSMENT ORDER THAT ANNEXURE A - 1 (PAGE NO.1 TO 27) FOUND FROM THE PREMISES OF MR. HARESH PATEL, DIRECTOR OF THE ASSESSEE COMPANY WERE INCRIMINATING IN NATURE. WE FIND THAT THESE PAPERS SEIZED IN COURSE OF SEARCH OF SHRI. HARESH PATEL AND AS REFERRED TO AS INCRIMINATING' BY THE LEANED ASSESSING OFFICER/ DEPARTMENTAL REPRESENTATIVE ARE AS FOL LOWS: PAGE 1 TO 24 PAPER RELATING TO VARIOUS PERMISSIONS, CC CERTIFICATES OF THE ASSESSEE PAGE 25 TO 27 ROUGH WORKINGS 15 . SINCE NO ADDITION HAS BEEN MADE BASED ON THESE DOCUMENTS BUT THE ADDITION IS SOLELY BASED ON PAGE NO 5 OF THE ANNEXURE A - 1 IMPOUN DED DURING THE COURSE OF SURVEY AT THE ASSESSEES PREMISES , T HUS, THE DOCUMENTS I.E. PAGE NO 1 TO 27 OF ANNEXURE A - 1 FOUND IN COURSE OF SEARCH CANNOT BE TERMED AS INCRIMINATING MATERIAL AS ENVISAGED U/S. 153C. MOREOVER THERE WAS NO YEAR SPECIFIC INCRIM INATING MATERIAL AVAILABLE WITH THE LEARNED ASS ESSING OFFICER. IN THIS REGARD, WE RELY ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY WHEREIN IT IS OBSERVED THAT WHERE LOOSE PAPERS FOUND AND SEIZED FR OM RESIDENCE OF PRESIDENT OF ASSESSEE, AN EDUCATIONAL INSTITUTION, INDICATING SOME 'ON MONEY RECEIPT DURING ADMISSION PROCESS DID NOT ESTABLISH CO - RELATION DOCUMENT - WISE WITH ASSESSMENT YEARS IN QUESTION, NOTICE ISSUED UNDER SECTION 153C TO ASSESSEE WAS IN VALID . ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 11 1 6 . WITH REGARD TO MERIT OF ADDITION, F ROM THE ORDER OF THE AO WE FOUND THAT ONLY BASIS OF ADDITION IS PAGE NO.5 OF IMPOUNDED MATERIAL DURING THE COURSE OF SURVEY WHICH PERTAINS TO A.Y.2007 - 08. HOWEVER, THE FIGURES WRITTEN ON THE RIGHT SIDE OF THE PAGE WERE NOT DISPUTED AS UNACCOUNTED IN THE BOOKS. WE FOUND THAT THE FIRST FIGURE ON THE LEFT HAND SIDE OF THE PAGE WAS PROVED TO BE A CHEQUE NOTING. FURTHER, IT WAS ALSO STATED IN THE STATEMENT ON OATH BY MR. BHAWAN PATEL IN REPLY TO Q.NO. 22 AS MAY BE S EEN AT PAGE NO 3 OF THE ASSESSMENT ORDER THAT NO CASH HAS BEEN RECEIVED ON SALE OF SHOPS. FURTHER, IT WAS ALSO EXPLAINED TO THE CIT (A), THAT THE REMAINING FIGURES AT LEFT SIDE OF THE PAGE 5 WERE TRANSACTIONS INTENDED TO BE DONE THROUGH CHEQUE AS STATED AT PAGE 154 OF PAPER BOOK FOR A.Y. 2007 - 08. FROM THE RECORD WE ALSO FOUND THAT SUMMONS U/S. 131 WERE ALSO ISSUED TO FEW CUSTOMERS WHO HAD ATTENDED BEFORE THE ASSESSING OFFICER AND GIVEN THEIR STATEMENT AND ITR DETAILS STATING THAT THEY HAVE NOT PAID ANY CASH IN RESPECT OF THESE SHOPS PURCHASED. HOWEVER, THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE HAD ACCEPTED ON MONEY AND APPLIED THE RATE OF ON MONEY ON TRANSACTION FOR A.Y. 2006 - 07. THE CIT(A) HAS DEALT WITH THE ISSUE THREADBARE RELYING ON THE DECISION I N CASE OF ROYAL MARWAR TOBACCO PRODUCTS PVT. LTD., 29 SOT 53 AND DELETED THE ADDITION. PRECISE OBSERVATION OF CIT(A) WAS AS UNDER: - IN SO FAR AS ADDITIONS MADE IN AY 2006 - 07 IS CONCERNED, THERE IS ABSOLUTELY NO BASIS FOR MAKING ANY ADDITION. NO PRESUMPTIO N AS APPLICABLE TO AY 2007 - 08 COULD NOT BE APPLIED TO EARLIER YEARS FOR WANT OF ANY EVIDENCE RELATING TO THOSE YEARS. THE SEIZED PAPER AND THE ENTRY RECORDED THEREIN DO NOT PERTAIN TO THE AY 200S - 07. IN THIS CONNECTION, APART FROM THE CITED DECISION IN THE CASE OF ROYAL MARWAR(SUPRA), REFERENCE COULD BE MADE ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 12 TO THE CASE OF DR. SURENDRANATH REDDY VS ACIT(2000) 72 ITD 205(HYD), IN WHICH IT WAS OBSERVED THAT WHEN NO MATERIALS WERE FOUND TO FOR SOME OTHER ASSESSMENT YEAR, IT WOULD NOT BE PROPER FOR THE AO TO ES TIMATE ANY SUPPRESSION. FOR ESTIMATING THE SUPPRESSION, THERE SHOULD BE SOME SUBSTANCE AVAILABLE OR EACH ASSESSMENT YEAR INDEPENDENCLLY. THE PRINCIPLE OF UNIT OF ASSESSMENT YEAR IS NOT DILUTED IN BLOCK ASSESSMENTS ALSO. UNDISCLOSED INCOME HAS TO BE INVARIA BLY DETERMINED WITH REFERENCE TO EACH PREVIOUS YEAR INCLUDED IN THE BLOCK PERIOD ON THE BASIS OF MATCHING EVIDENCE COLLECTED AS A RESULT OF SEARCH FOR THAT YEAR. WHEN THERE IS NO MATERIAL AT ALL TO A PARTICULAR PREVIOUS YEAR FALLING WITHIN THE BLOCK PERIOD , NO UNDISCLOSED INCOME COULD BE DETERMINED FOR THAT YEAR. ACCORDINGLY, THE ADDITION MADE IN AY 2006 - 07 WHICH IS NOT BASED ON ANY DIRECT EVIDENCE PERTAINING TO THE RELEVANT ASSESSMENT YEAR IS DELETED. 17 . WE DO NOT FIND INFIRMITY IN THE ORDER OF CIT(A) F OR DELETING THE SAID ADDITION, SINCE THE FINDINGS RECORDED BY CIT(A) ARE AS PER MATERIAL ON RECORD AND THE SAME HAS NOT BEEN CONTROVERTED BY REVENUE BY BRINGING ANY POSITIVE MATERIAL ON RECORD. THE CIT(A) HAS ALSO CORRECTLY APPLIED THE JUDICIAL PRONOUNCEME NTS LAID DOWN IN THE CASE OF ROYAL MARWAR TO THE FACTS OF THE INSTANT CASE. ACCORDINGLY ADDITION MADE BY AO ON ACCOUNT OF ON - MONEY HAS BEEN CORRECTLY DELETED BY CIT(A) AFTER RECORDING DETAILED FINDING WHICH IS AS PER MATERIALS ON RECORD. 1 8 . AS REGARD TO THE ADDITION SUSTAINED BY THE ID. CIT (A) ON THE LONG TERM CAPITAL GAINS OF RS.7,71,000/ - ASSESSED ON SURRENDER OF TENANCY RIGHT , W E FOUND THAT ASSESSEE WAS IN OCCUPATION OF A PREMISES, BY THE ADDRESS OF OFFICE NO.29, 3RD FLOOR, 343A, BADAMWADI, KALBADEVI ROAD, MUMBAI AND WAS HOLDING TENANCY RIGHTS TO THIS PREMISES, WHICH WAS SURRENDERED BY IT IN FY 2005 - 06 RELEVANT TO AY 2006 - 07. SUBSEQUENTLY, THIS TENANCY WAS ACQUIRED BY ONE SHRI RAVINDRA KUMAR G.JAIN, WHO CLAIMED TO HAVE ACQUIRED THE TENANCY BY PAYING RS .11,000/ - . HOWEVER, THE AO HAS TAKEN ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 13 STAMP DUTY VALUATION OF TENANCY RIGHT AT RS.7,71,000/ - . AS PER AO, ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN OF RS.7,71,000/ - IN SO FAR AS ASSESSEE WAS NOT HAVING ANY COST OF ACQUISITION OF THE TENANCY RIGHTS. FROM THE RECORD WE FOUND THAT THE SAID PREMISES WAS ACQUIRED BY THE PRESENT SHAREHOLDERS ON 20/3/2006 FROM SHRI SAGARMAL RATHI AND SHRI KANTADEVI RATHI. AS PER THE BALANCE SHEET OF THE ASSESSEE COMPANY FILED WITH THE RETURNS OF INCOME FROM AYS 2001 - 02 TO 2006 - 07, THE SAID RIGHT WAS NEVER REFLECTED IN THE BAL ANCE - SHEET AND NO DEPRECIATION WA S CLAIMED ON THE SAME. THE ASSESSEE WAS ONLY A MONTHLY TENANT AND DERIVING ONLY RENT INCOME IN RESPECT OF THE SAME WHICH WAS DULY OFFERED TO TAX DURING THE PERIOD IN WHICH IT WA S RECEIVED. THUS, THE ASSESSEE NEVER OWNED THE PREMISES AT ALL. THE DIRECTOR OF THE COMPANY WAS ALSO INFORMED BY THE EARLIER DIRECTORS THAT AS THE COMPANY WAS ONLY A TENANT AND WAS EARNING ONLY RENT ED INCOME OUT OF SUB - TENANCY, THERE WAS ALWAYS A PRESSURE FROM THE LANDLORD TO VACATE THE PREMISES. AS THE PRESSURE FROM THE LANDLORD MOUNTED, THE ASSESSEE COMPANY HAD TO SURRENDER THE TENANCY TO THE LANDLORDS. THUS, NO TRANSACTION EVER TOOK PLACE BETWEEN THE ASSESSEE C OMPANY AND SAID SHRI RAVINDRA G. JAIN, WHO H AVE OBTAINED THE SAID TENANCY RIGHT DIRECTLY FROM THE LANDLORDS AND THE ASSESSEE WAS NEVER A PARTY TO THAT AGREEMENT. THE ASSESSEE IS GIVEN TO UNDERSTAND THAT SAID SHRI RAVINDRA G. JAIN HAS ADMITTED TO HAVE ACQUIRED THE TENANCY RIGHTS IN THE SAID PREMISES FROM THE LANDLORD DIRECTLY AND THERE WAS NO TRANSACTION BETWEEN THE PRESENT TENANT AND THE ASSESSEE. IN FACT, ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 14 THE TENANCY RIGHTS CANNOT BE DIRECTLY SOLD BY A MONTHLY TENANT AND HAVE TO BE SURRENDERED TO THE LANDLORD. THUS, WE DO NOT FIND ANY MERIT IN THE A OS ACTION HOLDING THAT ASSESSEE HAD A CAPITAL ASSET IN THE FORM OF TENANCY RIGHT AND FOR SURRENDER OF WHICH ASSESSEE HAS GOT THE MONEY. THERE IS NO BASIS FOR SUCH ASSUMPTION. FURTHERMORE THERE IS NO EVIDENCE THAT THE ASSESSEE HAS RECEIVED ANY SUM FOR SURR ENDER OF TENANCY RIGHTS AND ACCORDINGLY NO ADDITION IS CALLED FOR IN THE CASE OF THE ASSESSEE. MOREOVER, THE PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN CASE OF SURRENDER OF TENANCY RIGHT AS OBSERVED IN THE CASE OF SMT. KISHORI SHARAD GAITONDE V. ITO I T APPEAL NO. 1561/MUM/2009 AND DY. CIT VS. TEJINDER SINGH (2012) 50 SOT 391. ACCORDINGLY, ADDITION MADE BY AO BY TAKING STAMP DUTY VALUATION OF THE TENANCY A SUM OF RS.7,71,000 / - IS DIRECTED TO BE DELETED. WE DIRECT ACCORDINGLY . 19 . IN THE A.Y.2007 - 08, S IMILAR ADDITION HAS BEEN MADE BY THE AO ON ACCOUNT OF ON - MONEY. BY THE IMPUGNED ORDER, CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF 17% AND DELETED THE BALANCE 83% OF ESTIMATE BASIS. 20 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH T HE ORDERS OF THE AUTHORITIES BELOW. 2 1 . WITH REGARD TO THE ADDITION MADE BY AO ON ACCOUNT OF ON MONEY WHICH WAS SUBSTANTIALLY DELETED BY THE CIT(A), TO THE EXTENT OF 83%, WE FOUND THAT ADDITION HAS BEEN MADE ON THE BASIS OF NOTING OF PAGE 5. W E FOUND THAT RIGHT SIDE NOTING PAGE NO.5 AS IMPOUNDED DURING COURSE OF ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 15 SURVEY WAS NOT IN DISPUTE. AS REGARD TO NOTING ON THE LEFT SIDE, THE TOP MOST NOTING RELATED TO SATINDER SINGH GAHEROTRA OF RS. 12,61,400/ - WHICH RELATES TO A CHEQUE RECEIVED FROM HIM WHICH WAS LA TER CANCELLED. THIS FACT IS EVIDENCED BY THE COPY OF CANCELLED CHEQUE PLACED AT PAGE 103 OF PAPER BOOK FOR A.Y. 2007 - 08. FURTHER, SHRI. SATINDER SINGH GAHEROTRA HAD APPEARED BEFORE THE ID. ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT AND HIS STATEMENT U/S. 131 OF THE ACT WAS RECORDED WHEREIN HE HAS CONFIRMED THE ABOVE FACTS. THE SAID FACT OF CHEQUE PAYMENT HAS BEEN EXAMINED BY THE LEARNED CIT(APPEALS) WHO HAS GIVEN PARTIAL RELIEF IN THIS REGARD. NOTHING CONTRARY IN THIS ASPECT HAS BEEN BROUGHT ON RECOR D BY THE DEPARTMENTAL REPRESENTATIVE. AS REGARD TO OTHER NOTING ON LEFT SIDE AGGREGATING TO RS. 8,90,000/ - (2,50,000+2,00,000+1,00,000+ 3,40,000) , SAME REPRESENTED DEALINGS INTENDED TO BE DONE IN CHEQUE WITH THOSE PARTIES FOR PARTICULAR AMOUNTS NOTED THERE IN. HOWEVER, LATER, THESE AMOUNTS OF CHEQUE WAS NOT RECEIVED EXACTLY AND AFTER CERTAIN NEGOTIATIONS, THESE WERE REVISED AS IS CLEAR FROM THE LEDGER OF ALL THE PARTIES REFERRED THEREIN AND PLACED AT PAGE 71 - 72, 77 - 78 AND 83 - 84 OF PAPER BOOK FOR AY 2007 - 08. 2 2 . WITH REGARD TO THE STATEMENT OF BHAGWAN PATEL, LEARNED DR CONTENDED THAT HE WAS UNABLE TO GIVE SATISFACTORY REPLIES IN RELATION TO THE QUESTION PUT - FORTH TO HIM. IN THIS REGARD, WE FOUND THAT THE REPLIES GIVEN BY HIM CLEARLY INDICATE THAT READY ANSWER S WERE NOT AVAILABLE WITH HIM ON THE DAY OF SURVEY AS THE RECORDING OF NOTING IN THE BOOKS OF ACCOUNTS WERE ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 16 KNOWN TO HIM. FURTHER, HIS STATEMENT WAS RECORDED U/S. 133A OF THE ACT AND NO RELIANCE CAN BE PLACED ON THE SAME IN VIEW OF THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF S. KHADER KHAN SON [2012] 25 TAXMANN.COM 413 (SC), HOWEVER, DURING THE COURSE OF SURVEY ONE CANNOT BE READILY AVAILABLE WITH ALL THE ANSWERS. INFACT, THE CBDT HAS CLARIFIED IT TIME AND AGAIN THAT DURING THE COURSE OF SEARCH/ S URVEY OPERATIONS EMPHASIS MUST BE LAID ON GATHERING EVIDENCES AND STRICTLY PROHIBITED OBTAINING OF CONFESSIONS OR STATEMENTS I.E. CIRCULAR NO. F.NO.286/2/2003 - IT (IN) DATED 10.03.2003 AND CIRCULAR F.NO.286/98/2013 - IT (INV.II)] DATED 18/12/2014. THIS VIEW HAS ALSO BEEN PROPOUNDED BY THE COURTS IN VARIOUS CASES INCLUDING CIT V. RAMANBHAI PATEL (GUJ HC) (TA 207 - 210 OF 2008), CHETNABEN SHAH V. ITO (GUJ HC) (TA 1437 OF 2012) FURTHER, ALSO THE ALLEGATION OF RECEIPT OF ON - MONEY HAS BEEN CATEGORICALLY DENIED BY T HE SAID SHRI. BHAWAN PATEL AT REPLY TO QN. NO. 22 AT PAGE 127 OF THE PAPER BOOK FOR AY 2007 - 08. SINCE , THE ASSESSEE HAS ALREADY OFFERED A SUM OF RS. 1 CRORE WHICH COVERE D THE DISCREPANCY SHOWN OF RS. 8.90 LAKHS. WE FURTHER OBSERVE THAT BESIDES SHRI. SATIN DER SINGH GAHEROTRA, THE STATEMENT OF OTHER TWO PURCHASERS - (I) GULPREET KUMAR PAHWA ALONG WITH PARNEET KAUR PAHWA AND (II) MANDIP SINGH WAS ALSO RECORDED U/S. 131 OF THE ACT. ALL THE PERSONS HAVE CONFIRMED THAT NO CASH HAVE BEEN PAID BY THEM TO THE ASSES SEE. 23 . THE PRESUMPTION, IF ANY, THOUGH NO CASH RECEIPT IS WRITTEN ON PAGE 5 OF ANNEXURE - 1, SHALL BE RESTRICTED TO RS. 8,90,000/ - AS THE DOCUMENT SAY ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 17 AND SHOULD NOT BE EXTRAPOLATED AT THE WHIMS AND FANCIES OF THE ID. AO / CIT(A) WITHOUT BRINGING ON RECO RD ANY COGENT OR CORROBORATIVE EVIDENCE OF RECEIPT OF ON - MONEY. IN FACT, THE ASSESSEE HAS PROVED THAT ONE OF THESE NOTING REPRESENTED A CHEQUE NOTING AND THAT OTHER BUYERS/ CUSTOMERS AS EXAMINED BY THE LEARNED ASSESSING OFFICER HAVE NOT PAID ANY CASH TO TH EM IN ANY OF THE DEALINGS. HENCE IN ABSENCE OF ANY EVIDENCE ABOUT CASH DEALING, THERE SHOULD NOT BE ANY SUCH WILD PRESUMPTIONS / GUESS WORK OF ON - MONEY RECEIPTS IN CASH. IN THIS REGARD, RELIANCE CAN BE PLAC ED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF D N KAMANI (HUF) (1999) 70 ITD 77 WHEREIN IT WAS OBSERVED AS FOLLOWS (EMPHASIS SUPPLIED): '... THERE WAS NO SUCH MATERIAL EVIDENCE FOUND DURING THE COURSE OF SEARCH ABOUT THE ON MONEY PAID BY THE REMAINING FIFTEEN FLAT BUYERS TO ASSESSEE - HUF OR THE ASSESS EE - HUF RECEIVING ANY ON MONEY FROM THEM. THE ASSESSING OFFICER DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR 1992 - 93 EXAMINED THE FLAT BUYERS UNDER THE PROVISIONS OF SECTION 131 BUT NO INCRIMINATING MATERIAL CAME ON RECORD FR OM THEIR CROSS EXAMINATION. FURTHER, DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS ALSO THE ASSESSING OFFICER AGAIN MADE AN EFFORT TO ASCERTAIN FROM THE REMAINING FIFTEEN FLAT BUYERS THE ON MONEY PAID IF ANY TO THE ASSESSEE HUF BY WAY OF SUMMONS UND ER SECTION 131 OR ENQUIRY LETTERS UNDER SECTION 133(6) BUT, TO NO RESULT. THE SEARCH CONDUCTED AT THE PREMISES OF THE KARTA OF HUF ALSO DID NOT REVEAL THE FACT OF ON MONEY RECEIVED, IF ANY, FROM THE SAID FIFTEEN FLAT BUYERS. FURTHER, THE DOCUMENT SEIZED FR OM G NO DOUBT RAISED THE PRESUMPTION THAT THE ASSESSEE HUF MIGHT HAVE SIMILARLY RECEIVED ON MONEY FROM OTHER FLAT BUYERS BUT THE PRESUMPTION HOWSOEVER STRONG MAY BE, CANNOT TAKE THE PLACE OF EVIDENCE OR IS NO SUBSTITUTE OF EVIDENCE. 24 . WITH REGARD TO THE ALLEGATION OF DEPARTMENT THAT THE ASSESSEE - COMPANY HAS RECEIVED ON - MONEY , IT IS IMPORTANT TO NOTE THAT THE DIRECTOR OF THE ASSESSEE COMPANY HAD BEEN SEARCHED AND THE ASSESSEES PREMISES SURVEYED. HOWEVER, NO UNDISCLOSED CASH, INVESTMENTS, EXPENDITURE, ETC. ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 18 HAD BEEN FOUND EITHER IN THE COURSE OF SEARCH AND SURVEY PROCEEDINGS IN RELATION TO THE ASSESSEE. IT MAY BE APPRECIATED THAT IF INFACT THERE WAS SUCH A HUGE RECEIPT OF ON - MONEY AS ALLEGED BY THE REVENUE, THEN THE REVENUE SHOULD HAVE BEEN ABLE TO CORR OBORATE IT WITH EVIDENCES IN THE FORM OF UNDISCLOSED CASH, INVESTMENT OR EXPENDITURE. THE FACT THAT NO SUCH EVIDENCES WERE AVAILABLE AS REGARD TO UNDISCLOSED CASH, EXPENSES OR INVESTMENT INFACT ALSO SUBSTANTIATES THE CLAIM OF THE ASSESSEE THAT NO ON - MONEY WAS RECEIVED BY IT. 25 . NOTWITHSTANDING THE ABOVE OBSERVATION, SINCE THE SURVEY PARTY HAS FOUND THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE FULLY WITH CORROBORATIVE EVIDENCES THAT THE AMOUNT OF RS. 8,90,000/ - WAS NOT RECEIVED IN CASH ADDITION OF RS.8,90 ,000 IS WARRANTED. HOWEVER, SINCE THE ASSESSEE HAD ALREADY OFFERED A SUM OF RS. 1 CRORE TO COVER ANY DISCREPANCIES WHATSOEVER NO SEPARATE ADDITION IS WARRANTED. 2 6 . IN VIEW OF THE ABOVE DISCUSSION, THE ONUS OF THE ASSESSEE STANDS DISCHARGED AND SHIFTS TO T HE LEARNED ASSESSING OFFICER. PROVISIONS OF SECTION 132(4A) OR 292C OF THE ACT SPEAKS ABOUT THE PRESUMPTION OF THE CONTENT IN THE SEIZED MATERIAL ONLY (NOT EXTRAPOLATION) AND THAT TOO IT IS A REBUTTABLE PRESUMPTION. THE ASSESSEE HAS ALREADY REBUTTED THE PR ESUMPTION WITH EVIDENCES AND TO BUY PEACE OF MIND HAS OFFERED A SUM OF RS. 1 CRORE WHICH IS MUCH OVER AND ABOVE RS. 8.90 LAKHS. 2 7 . IN VIEW OF THE ABOVE DISCUSSION, WE DIRECT THE AO TO DELETE THE ADDITION MADE ON ACCOUNT OF EXTRAPOLATION IN RESPECT OF ADVA NCES RECEIVED DURING ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 19 THE YEAR. SUCH AN EXAGGERATED / WILD EXTRAPOLATION IN THE MATTER IS UNJUST AND UNWARRANTED ESPECIALLY WHEN ENQUIRES WERE DONE AND NOTHING ADVERSE WAS FOUND AGAINST THE ASSESSEE AND THUS, AS THE OFFER OF RS. 1 CRORE MADE COVERS ALL THE DISCREPANCIES, NO FURTHER ADDITIONS MADE BY THE ID. AO / CIT(A) IS SUSTAINABLE. WE DIRECT ACCORDINGLY. 28 . IN THE A.Y.2007 - 08, ASSESSEE HAS TAKEN AN ADDITIONAL GROUND TO THE EFFE CT THAT NOTICE U/S.143(2) WAS NOT ISSUED TO THE ASSESSEE WITHIN A PERIOD OF 12 MONTHS FROM THE DATE OF FILING OF RETURN . AS PER LEARNED AR , THE R ETURN OF INCOME WAS ELECTRONICALLY FILED ON 31.10.2007 AND IS A COMPOSITE RETURN OF INCOME TAX AS WELL AS FRINGE BENEFIT TAX. IT IS SURPRISING TO NOTE THAT THE SAME ID. ASSESSING OFFICER CO ULD ISSUE FRINGE BENEFIT TAX SCRUTINY NOTICE U/S. 115WE (2) ON 26.09.2008 (PAGE 17 OF ANNEXURE) I.E. WITHIN TIME BARRING DATE OF 31.10.2008 BUT HAS GIVEN UNJUST REASONS TO NOT ISSUE THE SCRUTINY NOTICE U/S. 143(2) (PAGE 18 OF ANNEXURE) IN TIME WHICH IS CLE ARLY INVALID AND BAD IN LAW. HENCE, THE ASSESSMENT ORDER FOR AY 2007 - 08 BE QUASHED . 29 . ON THE OTHER HAND, LEARNED CIT - DR CONTENDED THAT IN CASE OF ASSESSMENT U/S.153C, THE LIMITATION PERIOD IS TO BE GUIDED BY THE PROVISIONS OF SECTION 153C (2) OF THE IT A CT WHICH ALLOWS TIME FOR ISSUE OF NOTICE IN THE MANNER PROVIDED IN SECTION 153A . ACCORDINGLY, THE GROUND TAKE BY THE ASSESSEE HAS NO LEGS TO STAND. 30 . WE HAVE CONSIDERED RIVAL CONTENTIONS. EVEN THOUGH THE ADDITIONAL GROUND TAKEN BY ASSESSEE WITH REGARD TO ISSUE OF NOTICE U/S.143(2) IS A ITA NO. 5065 & 5066/2009 ITA NO.5011 & 5112/2009 M/S. GREEN VALLEY HOMES DEVELOPMENT PVT. LTD., 20 PURELY LEGAL ISSUE BUT THE FACTS ARE NOT CLEAR FROM THE RECORD, THEREFORE, IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AS PER LAW AFTER VERIFYING THE RECORDS. WE DIRECT ACCORDINGLY. 31 . IN THE RESULT, APPEAL S OF THE REVENUE ARE DISMISSED WHEREAS APPEAL S OF THE ASSESSEE ARE ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14/06 /2017 SD/ - ( PAWAN SINGH ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 14 / 06 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MU MBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//