ACIT CIR 28(3), NAVI MUMBAI V. SAI SHIRDI CONSTRUCTIONS, NAVI MUMBAI

ITA 5135/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0182 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 29-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: S C TIWARI MS RUTUJA PAWAR
• Keywords: Bogus purchase; Rejection of books of accounts; Opportunity of being heard; Principle of natural justice; Assessment record
• Section: 69C; 133(6); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI G.S. PANNU, HON'BLE ACCOUNTANT MEMBER & SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA.NO. 5135 /MUM/201 5 (A.Y: 2011 - 12) ASST. COMMISSIONER OF INCOME TAX CIRCLE 28(3), R.NO.313 , 3 RD FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI NAVI MUMBAI - 400 705 V. M/S. SAI SHIRDI CONSTRUCTIONS 429, ARNEJA CORNER, SECTOR 17, VASHI, NAVI MUMBAI 400 705 PAN NO: ABFF S 1404 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.C. TIWARI MS. RUTUJA PAWAR REVENUE BY : SHRI V. JUSTIN DATE OF HEARING : 06 .12. 2017 DATE OF PRONOUNCEMENT : 05 .03 .2018 O R D E R PER C. N. PRASAD (JM) 1. TH IS APPEAL IS FILED BY THE REVENUE AGAI N ST THE ORDER OF THE LD.CIT(A) - 26 , MUMBAI DATED 05.08.2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE REVENUE IN ITS APPEAL RAISED THE FOLLOWING GROUNDS: - (1) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN STATING THAT THE REJECTION OF THE BOOKS OF ACCOUNT U/S 145 OF THE ACT AND FRAMING THE ASSESSMENT U/S 144 OF THE ACT BY THE AO ON THE BASIS OF THE INFORMATION, DATA AND ANALYSIS WAS NOT ADEQUATE ENOUGH TO COME TO THE CONCLUSION THAT THE BOOK RESULTS WER E NOT RELIABLE. 2 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD.CIT(A) ERRED IN STATING THAT THE ACTION OF THE ASSESSING OFFICE R IN BRINGING TO TAX A SUM OF . 8,83,43,028/ - CANNOT BE JUSTIFIED WITHOUT APPRECIATING THE FACT THAT THE REASONS GIVEN BY THE ASSESSEE FOR THE LARGE VARIATION IN S ALE OF FLATS WAS NOT JUSTIFIED. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD .CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF BOGUS PURCHASE TO THE TUNE OF . 4,35,881/ - BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE FACT THAT THE NOTICES ISSUED U/S. 133(6) OF THE INCOME TAX ACT, 1961, TO THE PARTIES COULD NOT BE SERVED AND THE ASSESSEE HAD FAILED TO PRODUCE THE PARTIES FROM WHOM THE PURCHASE WERE CLAIMED TO HAVE BEEN MADE AND ALSO ANY EVIDENCE WITH REGARD TO DELIVERY OF MA TERIAL AND AUTHENTIC ADDRESS OF ANY PLACE OR PREMISES FROM WHERE THE MATERIAL WAS PURCHASED DESPITE THE FACT THAT ONUS LIES ON THE ASSESSEE TO PROOF THE PURCHASE OF MATERIAL. (4) THE APPELLANT PRAYS THAT THE ORDER OF CIT (A) ON THE ABOVE GROUNDS BE REVERSED A ND THAT OF THE ASSESSING OFFICER BE RESTORED.' 3. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSEE IS A BUILDER AND DEVELOPER FILED ITS RETURN OF INCOME ON 21.09.2011 DECL ARING INCOME OF .1,02,15,870/ - . THE ASSESSMENT WAS COMPLETED U/S. 144 R.W.S. 145 OF THE ACT ON 27.03.2014 DETERMINING THE INCOME AT . 9, 89,94,780/ - . WHILE COMPLETING THE ASSESSMENT T HE ASSESSING OFFICER MADE ADDITION OF .8,83,43,028/ - TOWARDS UNACCOUNTED SALE RECEIPTS ON CERTAIN FLATS AND ADDITION OF .4,35,881/ - U/S. 69C OF THE ACT TRE ATING CERTAIN PURCHASES AS BOGUS PURCHASES . THE ASSESSEE CONSTRUCT ED A HOUSING PROJECT NAMED SAI SAAKSHAT IN SECTOR - 6, KHARGHAR, NAVI MUMBAI HAVING FOUR WINGS WITH 15 FLOORS EACH AND THE TOTAL NUMBER OF FLATS ARE 232. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO GIVE NAME AND PARTICULARS OF THE CUSTOMERS, FLAT NO, AREA, AGREEMENT VALUE, BOOKING 3 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS DATES, ADVANCES RECEIVED ON DIFFERENT DATES ETC., IN RESPECT OF THE SALE OF FLATS AND THE ASSESSEE SUBMITTED ITS REPLY ON 30.01.20 14. ON THE BASIS OF T HE INFORMATION FURNISHED BY THE ASSESSEE , ASSESSING OFFICER PREPARED CHART S WHICH ARE ANNEXED AS 1 & 2 TO THE ASSESSMENT ORDER. THE GRAPH DRAWN BY ASSESSING OFFICER IS EXTRACTED IN PAGE NO.2 OF THE ASSESSMENT ORDER AND BASED ON THIS CHART THE ASSESSING OFFICER WAS OF THE VIEW THAT THERE IS A HUGE VARIATION IN THE SALE PRICES OF DIFFERENT FLATS. THE ASSESSING OFFICER ALSO TOOK A PRINTOUT FROM WEBSITE WWW.MAGICBRICKS.COM SHOWING THE PRICE TREN D IN THE KHARGHAR LOCALITY FROM THE PERIOD OCTOBER 2007 TO DECEMBER 2013 AND THIS WAS PROVIDED TO THE ASSESSEE. IN VIEW OF THIS T HE ASSESSEE WAS CALLED UPON TO SHOW CAUSE AS TO WHY ITS BOOKS OF ACCOUNTS SHOULD NOT BE REJECTED U/S. 145 OF THE ACT AS ACCORD ING TO HIM BOOK RESULTS ARE NOT RELIABLE. THE ASSESSEE SUBMITTED ITS REPLY STATING THAT THE ALLEGED GRAPH P URPORTING TO DISPLAY SALE PRICE TRENDS IN KHARGHAR DRAWN FROM WWW.MAGICBRICKS.COM SHOULD NOT BE CONSIDERED AS THE MATERIAL AND EVIDENCE FOR ASCERTAI N ING THE ACTUAL PRICE RECEIVED BY THE ASSESSEE AS THERE IS COMPLETE DOCUMENTATION SUPPORTING THE PRICE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE. IT WAS CONTENDED THAT THE SAID GRAPH IS BASED ON UNKNOWN MATERIAL GATHERED BY UNKNOWN PEOPLE OF UNKNOWN QUALIFICATION AND CREDIBILITY . IT WAS ALSO CONTENDED THAT THERE ARE NO PARTICULARS OF RECORD , THE ACTUAL DATA THAT HAS GONE INTO IN MAKING OF THE SAID GRAPH . THEREFORE, IT WAS CONTENDED THAT 4 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS IN THE ABSENCE OF THE COMPLETE DETAILS OF THE MATERIAL UTILIZED FOR PREPARATION OF THE SAID GRAPH IT IS NOT POSSIBLE TO FURNISH COGENT EXPLANATION. IT WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER AND REQUESTED TO OBTAIN THE COMPLETE I NFORMATION FROM THE WEBSITE AND FORWARD THE SAME TO THE ASSESSEE TO OFFER ITS COMMENTS. IT WAS ALSO CONTENDED THAT THE SAID GRAPH IS CRYPTIC DISPLAY PURPORTING TO COVER THE BIG LOCALITY OF KHARGHAR OVER A LONG SPAN OF TIME FROM OCTOBER 2007 TO DECEMBER 2013 AND THE GRAPH IS WEBPAGE OF A COMMERCIAL WEBS ITE AND THE INFORMATION DISSEMINATED ON A COMMERCIAL WEBSITE IS PREPARED AND DISPLAYED ON THE BASIS OF THE VESTED INTEREST OF THE WEBSITE OWNERS AND PAID CLIENTS. THEREFORE, IT WAS CONTENDED THE SAID GRAPH TAKES A MA C RO VIEW AND FOR THAT REASON FAILS TO P ROVIDE ANY CREDIBLE COMPARABLE INSTANCES FOR ANY SPECIFIC PROPERTY IN KHARGHAR. IT WAS FURTHER CONTENDED AND D ENIED THAT THE AFORESAID WEBSITE INFORMATION STRENGTHENS THE ARGUMENT THAT ASSESSEE HAS TAKEN LARGE PORTION OF SALE PROCEEDS IN CASH . IT WAS REITERATED THAT ASSESSEE NEVER ACCEPTED A SINGLE RUPEE IN CASH NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND THEREFORE IT WAS SUBMITTED TO THE ASSESSING OFFICER NOT TO ENTERTAIN SUCH VIEWS MERELY ON THE BASIS OF THE UNRELIABLE INFORMATION AND MERELY ON TH E BASIS OF ALLEGED PRICE TRENDS. 4. HOWEVER, THE ASSESSING OFFICER NOT CONVINCED WITH THE REPLIES AND B ASED ON THE CHART AND GRAPH WHICH IS PREPARED BY HIM CAME TO THE 5 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS CONCLUSION THAT THERE IS A LARGE VARIATION IN THE PRICES BETWEEN FLATS WHICH WERE BOOKED IN THE PERIOD FROM 10.12. 20 09 TO 12.07.2010 . THE TOTAL FLATS BOOKED IN THIS PERIOD WERE 88 AND PRICE VARIES FROM .2,627/ - PER SQ.FT TO .5,100/ - PER SQ.FT. AND ACCORDING TO HIM SINCE ASSESSEE DID NOT GIVE ANY REASON FOR VARIATION IN THE PRICES DESPITE SE VERAL OPPORTUNITIES INSTEAD GAVE ONLY A GENERAL REPLY, HE CONCLUDED THAT THE PRICE VARIATION IS HIGHLY ILLOGICAL AND WITHOUT ANY BASIS AND INDICATES THAT THE PORTION OF SALE PROCEEDS I N UNACCOUNTED FORM I.E. IN CASH . ASSESSING OFFICER ALSO OBSERVED THAT T HE PRICE TREND IN KHARGHAR IS REFLECTED BY A REPUTED WEBSITE AND SIMILAR PRICE TREND IS SHOWN BY ALMOST ALL WEBSITES AND THE PRICE TREND GIVE UPPER RANGE OF VALUE, AVERAGE RANGE OF VALUE AND LOWER RANGE OF VALUE OF THE FLATS IN DIFFERENT QUARTERS IN LAST S IX YEARS WHICH HAVE CONSISTENTLY INCREASED IN THE PAST SIX YEARS WHERE THE PRICES HAVE CONSISTENTLY INCREASED AND THE PRICE VARIANT IN DIFFERENT LOCALITIES OF KHARGHAR AT A PARTICULAR POINT OF TIME WAS ALMOST 5 TO 15% AND THEREFORE HE WAS OF THE VIEW THAT SINCE ASSESSEE HAS ONLY ONE PROJECT AT ONE PLOT THERE SHOULD NOT BE MUCH PRICE VARIATION IN A SHORT SPAN OF TIME. ASSESSING OFFICER FURTHER OBSERVING THAT ASSESSEE HAS NOT CHARGED ANY EXTRA PRICES FOR EACH FLOOR RISE AND INSTANCES WHERE FLATS AT HIGHER FLOORS ARE SOLD AT CONSIDERABLE LOW PRICES THAN THE FLATS AT LOWER FLOORS AND WITHIN THE SAME FLOOR FLATS WERE SOLD W ITH SUBSTANTIAL DIFFERENT RATES, T HE F L ATS HAVE S IMILAR DIRECTION AND ORIENTATION WERE SOLD IN DIFFERENT WINGS FOR DIFFERENT 6 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS PRICES, HE FINALLY CONCLUDED THAT ASSESSEE TOOK LARGE PORTION OF SALE PROCEEDS IN CASH WHICH REMAINED UNACCOUNTED AND THEREFORE THE BOOKS OF ACCOUNTS OF ASSESSEE ARE NOT RELIABLE A ND THEY DOES NOT GIVE TRUE AND CORRECT AND COMPLETE PICTURE OF BUSINESS AFFAIRS, HE REJECTED THE BOOKS OF ACCOUNTS AND HE ESTIMATED THE UNACCOUNTED SALE RECEIPTS AT . 8,83,43,028/ - . 5. ON APPEAL , THE LD.CIT(A) CONSIDERED THE DETAILED SUBMISSIONS MADE BY THE ASSESSEE WITH VARIOUS EVIDENCES FURNISHED BEFORE HIM DELETED THE ADDITION OBSERVING THAT THE ASSESSING OFFICER FAILED TO MAKE PROPER ENQUIRIES AND THERE WERE NO ENQUIRES MADE FROM THE PURCHASERS OF THE FLATS AND THE EX ERCISE WAS DONE MERELY ON A GUESS WORK AND BASED ON AN UNRELIABLE INFORMATION DISPLAY ED IN THE WEBSITE WWW.MAGICBRICKS.COM. 6. BEFORE US, LD.DR SUBMITTED THAT THE ASSESSEE HAS NOT GIVEN ANY PROPER EXPLANATION, REPLIES IN THE COURSE OF T HE ASSESSMENT PROCEEDI NGS AND THE ASSESSEE PROVIDED VARIOUS INFORMATION AND EXPLANATION BEFORE THE LD.CIT(A) TO JUSTIFY THE HUGE VARIATION IN SALE PRICES AND THEREFORE SINCE ALL THESE INFORMATION WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER THE MATTER MAY BE RESTORED TO THE F ILE ASSESSING OFFICER FOR D ENOVO ASSESSMENT. 7 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS 7. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHATEVER INFORMATION IS CALLED FOR BY THE ASSESSING OFFICER IS PROVIDED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER IS MAINLY HARPING ON THE INFORMATION IN THE WEBSITE WWW.MAGICBRICKS.COM TO COME TO THE CONCLUSION THAT THERE IS A HUGE VARIATION IN SALE PRICES FOR WHICH THE ASSESSEE SUBMITTED THAT THE INFORMATION IN THE WEBSITE IS UNRELIABLE AND THE WEBSITE ITSELF DISPLAYED DISCLAIMER STATING THAT IT IS NOT RESPONSIBLE FOR THE ACCURACY OF DA TA DISPLAYED ON THE WEBSITE AND THE DATA IS NOT ON ACTUAL TRANSACTIONS AND THAT IT DOES NOT GIVE ANY GUARANTEE AND THE DATA SHOULD BE VERIFIED INDEPENDENTLY. THEREFORE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BASED ON THIS INFORMATION WHICH IS APPEARING IN THE WEBSITE THE ASSESSING OFFICER TRIED TO COMPARE THE SALE PRICES WHICH WERE REFLECTED IN THE WEBSITE AND THAT OF THE ACTUAL SALE PRICES AND CAME TO THE CONCLUSION THAT THERE IS A HUGE VARIATION IN SALE PRICES W HICH IS FACTUALLY NOT CORRECT. 8. LD. COUNSEL FOR THE ASSESSEE FURTHER REFERRING TO PAGE NO.67 TO 72 OF PAPER BOOK SUBMITTED THAT DETAIL EXPLANATION WAS GIVEN FOR EACH AND EVERY FLAT BEFORE THE LD.CIT(A) WHY THERE IS A DIFFERENCE IN SALE PRICES AS PER THE INFORMATION SUBMITTED BY THE ASS ESSEE ON VARIOUS FLATS. LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE NO.68 OF THE PAPER BOOK SUBMITTED THAT ADDITIONS WERE MADE BY THE ASSESSING OFFICER IN RESPECT OF 8 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS THE 59 FLATS OUT OF 123 FLATS AND OUT OF 59 FLATS 49 FLATS HAVE BEEN SOLD BY THE ASSESSEE ON SHELL BASIS ONLY. IT WAS SUBMITTED THAT THESE 49 FLATS COVER THE ALLEGED DIFFERENCE OF .8,06,52,498/ - OUT OF TOTAL ALLEGED DIFFERENCE OF .8,83,43,028/ - . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE FLATS WERE SOLD ONL Y WITH STRUCTURE LEAVING CONSIDERABLE AMOUNT OF REMAINING WORK LIKE FLOORING, SANITARY FITTINGS, PLASTERING , PLUMBING, KITCHEN PLATFORM, AIR CONDITIONING , WOOD WORK ETC ., TO BE CARRIED OUT BY THE BUYER HIMSELF. THEREFORE, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE FLATS WERE SOLD ON SHELL BASIS SALE PRICE IS MUCH LESS THAN THE OTHER FLATS WHICH WERE SOLD WITH AL L THESE AMENITIES. 9. LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE NO.116 OF THE PAPER BOOK WHICH IS THE COPY OF SAMP LE AGREEMENT FOR SALE AND PARTICU LARLY CLAUSE (X ) AT PAGE NO.121 , SUBMITTED THAT THROUGH THIS AGREEMENT THE ASSESSEE SOLD SHELL FLAT NO. 304 ADMEASURING 953 SQ.FT FOR . 60,17,200/ - IN D ' WING ON 3 RD FLOOR ON A SHELL BASIS. LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT IN CLAUSE (X ) OF THE AGREEMENT IT IS CLEARLY MENTIO NED THAT THE PURCHASER AGREED TO PURCHASE THE SHELL FLAT. SIMILARLY LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE NO.176 OF THE PAPER BOOK WHICH IS THE COPY OF AGREEMENT FOR SALE AND REFERRING TO C LAUSE (X ) AT PAGE NO .181 , SUBMITTED THAT THROUGH THIS AGREEMENT ASSESSEE SOLD FLAT NO.504 IN D WING ON 5 TH FLOOR ADMEASURING 953 SQ.FT FOR .78,03,000/ - 9 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS WITH A MENITIES AND THEREFORE CLAUSE (X ) REFERS TO PURCHASE OF FLAT NO.504 WHICH IS WITH AMENITIES. THEREFORE, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRICE FOR WHICH THE SHELL FLATS WERE SOLD IS DIFFERENT AND THE PRICES FOR WHICH THE FLATS SOLD WITH AMENITIES IS DIFFERENT. THE LEARNED COUNSEL FOR THE ASSESSEE FUR THER REFERRING TO THE PAGE NO .206 OF THE PAPER BOOK SUBMITTED THAT THESE ARE THE LIST OF AMENITIES TO BE PROVIDED BY THE ASSESSEE AND THESE AMENITIES WILL NOT BE PROVIDED IN THE FLATS SOLD ON SHELL BASIS. 10. LD. COUNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K . P . V A RG H E SE V. ITO [131 ITR 597] AND SUBMITTED THAT THE BURDEN LIES ON THE REVENUE TO SHOW THAT THERE IS UNDERSTATEMENT OF CONSIDERATION. LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT IN THIS CASE THE REVENUE HAS NOT DISCHARGED ITS BURDEN BY PROVING THAT THERE IS UNDERSTATEMENT OF CONSIDERATION BY BRINGING IN COGENT MATERIALS AND THE COMPARABLE INSTANCES OR THE STATEMENTS FROM THE BUYERS TO PROVE THAT T HE ASSESSEE HAS UNDERSTATED ITS SALE VALUE. 11. LD. COUNSEL FOR THE ASSESSEE FURTHER REFERRING TO PAGE NO .87 OF THE PAPER BOOK PARTICULARLY THE DISCLAIMER SHOWN BY THE WEBSITE SUBMITTED THAT THE WEBSITE ITSELF HAS STATED THAT THEY CANNOT BE HELD RESPONSIBLE FOR THE ACCURACY OF THE DATA DISPLA Y ED ON THE SITE AND THE INFORMATION HAS 10 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS BEEN COMPILED FROM THE ASKING P RICE OF THE DATABASE OF PROPERTIES LISTED ON THE SITE FOR THE PERIOD AND SINCE THE DATA IS NOT OF THE ACTUAL TRANSACTION, THE WEBSITE DOES NOT GIVE ANY GUARANTEE AND IT IS STATED THAT THE SAME SHOULD BE VERIFIED INDEPENDENTLY. LD. COUNSEL FOR THE ASSESSEE THEREFORE SUBMITTED THAT THE DATA FED INTO THE WEBSITE WWW.MAGICBRICKS.COM IS NOT AT ALL RELIABLE AND THEY THEMSELVES STATED THAT T HE DATA FE D INTO ARE NOT ACTUAL TRANSACTIONS . HE SUBMITS THAT IF THE DATA IS NOT OF ACTUAL TRA NSACTIONS IT IS MERELY ON A N ASSUMPTION/GUESS WORK AND PRICE TRENDS WHICH ARE REFLECTED ARE NOT BASED ON ANY RELIABLE DATA. THEREFORE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DATA IN THE WEBSITE CANNOT BE RELIED ON TO COME TO THE CONCLUSION THAT THERE IS A HUGE DIFFERENCE IN THE SALE PRICES BETWEEN THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE WHEN COMPARED TO TH E SALE P RICES REPORTED IN THE WEBSITE. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE THE ASSESSING OFFICER NOTICED FROM THE INFORMATION SUBMITTED BY THE ASSESSEE , AS WELL AS FROM THE INFORMATION OBTAINED B Y HIM FROM THE WEBSITE WWW.MAGICBRICKS.COM THAT THERE IS A HUGE V A RIATION IN SALE PRICES OF THE FLATS CONSTRUCTED BY THE ASSESSEE WITHIN THE WING AND ALSO WITHIN THE FLOOR OF THE RESIDENTIAL PROJECT CONSTRUCTED BY ASSESSEE. THE ASSESSING OFFICER AFTER MAKING HIS OWN ANALYSIS AND 11 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS RELYING ON THE DATA FURNISHED IN THE WEBSITE CONCLUDED THAT THERE IS A HUGE VARIATION IN SALE PRICES. ON A QUERY BY THE ASSESSING OFFICER THAT THERE IS A HUGE VARIATION OF SALE PRICES OF DIFFERENT FLATS , THE ASSESSEE SUBMITTED THAT IT HAD ALWAYS TRIED TO S ELL AT THE MAXIMUM PRICES THAT IT CAN BE ABLE TO GET AND ITS TRANSACTIONS ARE AT ARMS LENGTH AND ASSESSEE HAS ACCOUNTED WHAT IT HAD RECEIVED FROM THE BUYERS . ASSESSEE REQUESTED THE ASSESSING OFFICER TO SPECIFY THE TRANSACTION S WHERE THERE IS A PRICE VARIATION AT ALMOST 100% WITHIN THE GAP OF ITS SALE , SO THAT ASSESSEE CO U LD SUBMIT ITS REPLY. IT WAS ALSO CONTENDED THAT UNLESS THERE IS EVIDENCE AND RECEIVING CASH OTHER THAN THE ACTUAL SALE PRICE , ADDITION CANNOT BE MADE ON A GUESS WORK. IT WAS ALSO CONTENDED THAT THE WEBSITE WWW.MAGICBRICKS.COM CANNOT BE RELIED AT ALL AS THE DATA SHOWN IN THE WEBSITE IS NOT AUTHENTIC AND WITHOUT ANY BASIS. THE ASSESSEE ALSO CONTENDED THAT T HE BOOKS OF ACCOUNTS O F THE ASSESSEE CANNOT BE REJECTED UNDER PROVISIONS OF SECTION 145(3) OF THE ACT AND SHOULD NOT BE ATTRACTED TO THE ASSESSEE AS IT HAD DISCLOSED CORRECT SALE PRICES AND SALE PROCEEDS A N D NOT A PAISA RECEIVED BY IT OVER AND ABOVE WHAT IS DISCLOSED IN ITS BOO KS OF ACCOUNTS. IT WAS CONTENDED THAT TRANSACTIONS ARE AT THE MARKET VALUE PREVAILING AT THE MATERIAL AT THAT POINT OF TIME, AND ON OPINION BASIS, ON MERE GUESS WORK , RECORDING MARKET PRICES IS NOT ADEQUATE MATERIAL I N THE ABSENCE OF EVIDENCE TO THE FACT THAT THE ACTUAL LY ASSESSEE RECEIVED MORE THAN CONSIDERATION THAT OF RECORD IN ITS BOOKS OF ACCOUNTS. THE SUBMISSIONS OF THE ASSESSEE WERE IGNORED BY 12 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS THE ASSESSING OFFICER AND HE PROCEEDED TO REJECT THE BOOKS OF ACCOUNTS BASED ON HIS OWN ANALYSIS AND ALSO RELYING ON THE DATA IN THE WEBSITE WWW.MAGICBRICKS.COM . 13. WE FIND THAT THE ASSESSING OFFICER DID NOT ASK FOR VARIATION IN SALE PRICES WITH REGARD TO ANY PARTICULAR FLAT THOUGH THE ASSESSEE REQUESTED THAT THE EXPLANATION CA N BE FURNISHED ONCE IT IS KNOWN IN RESPECT TO A PARTICULAR FLAT THE INFORMATION IS TO BE SUBMITTED. THE ASSESSING OFFICER MADE GENERAL STATEMENT THAT THERE IS A VARIATION IN SALE PRICES IN SALE OF FLATS. THE INFORMATION RELIED ON BY THE ASSESSING OFFICER IN THE WEBSITE WWW.MAGICBRICKS.COM IS ALSO CANNOT BE AN AUTHENTIC INFORMATION WHICH CAN BE USED AGAINST THE ASSESSEE AS THE DISCLAIMER OF THE WEBSITE MAKES VERY CLEAR THAT THE DATA IN THE WEBSITE IS NOT ACTUAL TRANSACTION BASED AND THE WEBSITE DOES NOT GIVE ANY GUARANTEE AND IT SHOULD BE VERIFIED INDEPENDENTLY. WHEN THE WEBSITE ITSELF MAKES IT CLEAR THAT THE DATA FE D IS NOT ON THE BASIS OF ACTUAL TRANSACTION S AND SHOULD BE VERIFIED INDEPENDENTLY , WE ARE UNABLE TO UNDERSTAND HOW THE ASSESSING OFFICER PLACED RELIANCE ON TH IS DATA. WE ARE ALSO AT LOSS TO UNDERSTAND WHY THE ASSESSING OFFICER HAS NOT MADE ANY EFFORTS T O ISSUE NOTICES TO THE PURCHASERS AND FI ND OUT FROM THEM WHETHER ANY O N - MONEY WAS PAID AND WHAT IS THE ACTUAL SALE CONSIDERATION PAID IN THE SE TRANSACTIONS . NO SUCH ENQUIRIES HA VE BEEN MADE BY THE ASSESSING OFFICER. THE CONCLUSIONS 13 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS ARRIVED AT IN THE ASSESSMENT ORDER THAT THERE IS HUGE DIFFERENCE IN SALE PRICE IS MERELY ON A GUESS WORK. WE ALSO FIND FROM THE INFORMATION FURNISHED BEFORE US AND ALSO THE FINDIN G OF THE LD.CIT(A) THAT MANY OF THE FLATS SOLD WERE IN SHELL CONDITION AND ONLY FEW FLATS WERE SOLD AFTER COMPLETION OF THE FLAT WITH AMENITIES AND IN WHICH CASE , IT IS BOUND TO BE A VARIATION IN SALE PRICES. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE ON A MERE GUESS WORK AND SURMISES WITHOUT ANY COGENT MATERIAL TO SHOW THAT THERE IS REAL VARIATION IN SALE PRICES. WE ALSO FIND THAT THE CONCLUSIONS DRAWN BY THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER WERE NEVER PUT TO THE ASSESSEE FOR ITS REBUTTAL. 14. IN THE CASE OF K.P. VARGHESE V. ITO (SUPRA) THE HON'BLE SUPREME COURT HELD THAT IT IS A WELL SETTLED RULE OF LAW THAT THE ONUS OF ESTABLISHING THAT THE CONDITIONS OF TAXABILITY ARE FULFILLED IS ALWAYS ON THE REVENUE AND THE BURDEN LIES ON THE REVENUE TO SHOW THAT THERE IS AN UNDERSTATEMENT OF THE CONSIDERATION. IT WAS ALSO HELD THAT , TO THROW THE BURDEN OF SHOWING THAT THERE IS NO UNDERSTATEMENT OF THE CONSIDERATION O N THE ASSESSEE WOULD BE TO CAST AN ALMOST IMPOS SIBLE BURDEN UPON THE ASSESSEE TO ESTABLISH THE NEGATIVE THAT THE ASSESSEE DID NOT RECEIVE ANY CONSIDERATION BEYOND THAT DECLARED BY HIM. 15. IN THE CASE ON HAND THE REVENUE COULD NOT DISCHARGE ITS BURDEN TO SHOW THAT THERE IS AN UNDERSTATEMENT OF CONSIDERATION BY BRINGING 14 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS ADEQUATE MATERIAL ON RECORD. THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRIES WITH THE PURCHASE R S OF THE FLATS OWNERS REGAR DING THE ACTUAL SALE PRICES OF THE FLATS. THE ASSESSING OFFICER MERELY CAME TO THE CONCLUSION THAT THERE IS VARIATION IN SALE PRICES ONLY ON MERE G UESS WORK WHICH IS NOT PERMISSIBLE IN LAW. IN THE CIRCUMSTANCES IN PRINCIPLE WE UPHOLD THE ORDER OF THE LD.CIT(A) IN HOLDING THAT THE INFOR M ED DATA AND ANALY SIS WHICH THE ASSESSING OFFICER HAD DONE WAS NOT ADEQUATE ENOUGH TO COME TO THE CONCLUSION THAT T HE BOOK RESULTS WERE NOT RELIABLE AND REJECTION OF BOOKS OF ACCOUNTS WAS DONE CASUALLY AND BASED ON GUESS WORK. HOWEVER , ASSESSEE DID NOT SUBMIT ANY REPLY TO THE ASSESSING OFFICER THAT OUT OF 59 FLATS 49 FLATS WERE SOLD ON SHELL BASIS DUE TO WHICH THERE WAS DIFFERENCE IN SALE PRICE WHEN COMPARED TO THE COMPLETED FLATS WITH AMENITIES, FOR THE LIMITED PURPOSE W E RESTORE THE ISSUE TO ASSESSING OFFICER WHO SHALL VERIFY THE CONTENTIONS OF THE ASSESSEE WITH REFERENCE TO THE AGREEMENTS FOR SALE OF ALL THE 59 FLATS AND DECIDE THE ISSUE ACCORDINGLY. THE ASSESSEE SHALL PRODUCE ALL THE 59 SALE AGREEMENTS BEFORE ASSESSING OFFICER FOR VERIFICATION. THE ASSESSING OFFICER SHALL PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS RAISED BY TH E REVENUE ON THIS ISSUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 16. COMING TO THE ADDITION MADE U/S. 69C OF THE ACT IN RESPECT OF BOGUS PURCHASES. WE OBSERVE THAT THE ASSESSING OFFICER ISSUED NOTICE 15 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS U/S.133(6) OF THE ACT TO THE SELLER LINU X SALES AGENCY PVT LTD . AND T HE NOTICE RETURNED UNSERVED. THE NOTICE SERVER INFORMED THAT THE PARTY DOES NOT EXIST AND THE INSPECTOR DEPUTED ALSO REPORTED THAT T HE PARTY IS NOT RESIDING AT THE GIVEN ADDRESS . ASSESSING OFFICER ALSO OBSERVED THAT THE NAME OF THE SELLER FROM WHOM THE ASSESSEE PURCHASED THE GOODS ALSO APPEARED IN THE LIST OF PARTIES HIGHLIGHTED BY THE SALES TAX DEPARTMENT THAT THEY ARE PROVIDING BOGUS BILLS WITHOUT ANY ACTUAL DELIVERY . THUS, ASSESSING OFFICER TREATED THE PURCH ASES OF .4,35,881/ - MADE BY THE ASSESSEE AS BOGUS PURCHASES AND BROUGHT TO TAX. 17. ON APPEAL THE LD.CIT(A) DELETED THE ADDITION OBSERVING THAT AS PER THE ASSESSMENT RECORDS AND THE ORDER SHEET NOTING NOTICE U/S. 133(6) WAS ISSUED ON 05.03.2014 , INSPECTOR GAVE A REPORT ON 06.03.2014. HOWEVER , IN THE NOTICE AND QUESTIONER ISSUED TO THE ASSESSEE ON 13.03.2014 THE ISSUE OF GENUINENESS OF THE PURCHASES WAS NOT BROUGHT TO THE NOTICE OF THE ASSESSEE. THEREFORE, SINCE THE ADDITION WAS MADE WITHOUT GIV ING ANY OPPORTUNITY TO THE ASSESSEE VIOLATING THE PRINCIPLES OF NATURAL JUSTICE, LD.CIT(A) DELETED THE ADDITION. 18. LD.DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD.CIT(A). 16 ITA.NO.5135/MUM/2015 (A.Y: 2011 - 12) M/S. SAI SHIRDI CONSTRUCTIONS 19. ON HEARING BOTH THE PARTIES AND PURSING THE ORDER OF THE ASSESSING O FFICER AS WELL AS THE LD.CIT(A), W E DO NOT SEE ANY INFIRMITY IN DELETING THE ADDITION MADE U/S. 69C OF THE ACT AS THE GENUINENESS OF THE PURCHASES WAS NEITHER PUT TO THE ASSESSEE NOR CALLED FOR ANY EXPLANATION WHICH IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE FINDINGS OF THE LD.CIT(A) HAVE NOT BEEN REBUTTED BY THE REVENUE WITH EVIDENCES. HENCE, WE SUSTA IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. THE GROUND RAISED BY THE REVENUE ON THIS ISSUE IS DISMISSED. 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 05 TH MARCH , 2018 . SD/ - SD/ - ( G.S. PANNU ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 05 / 03 / 2018 GIRIDHAR , SPS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM BAI