ACIT 6(2), MUMBAI V. KAMDHENU HOME MAKERS P.LTD, MUMBAI

ITA 5470/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5773 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 25-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Business income; Additional evidence
• Section: 37; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI B.R. MITTAL (JM) & SHRI N.K. BILLAIYA (A M) I.T.A. NO. 5470/MUM/2011 (ASSESSMENT YEAR : 2007-08) ACIT, CIRCLE 6(2) ROOM NO. 563 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. M/S. KAMDH ENU HOME MAKERS PVT. LTD. 44, KHANNA CONSTRUCTION HOUSE ABDUL GAFFAR KHAN ROAD WORLI, MUMBAI-400 013. PAN/GIR NO . AACCK3151D ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUBODH RATNAPARKHI DEPARTMENT BY : SHRI M.L. PERUMAL DATE OF HEARING : 30.12.2013 DATE OF PRONOUNCEMENT : 17. 1.2014 O R D E R PER B.R. MITTAL (JM) : THE DEPARTMENT HAS FILED THIS APPEAL FOR A.Y. 2007-08 AGA INST THE ORDER DATED 4.1.2011 ON FOLLOWING GROUNDS :- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONCLUDING THE DECISION OF DELETING ADD ITION ON THE BASIS OF MOU DATED 4.11.2003 BETWEEN M/S. SVA SECURIT IES & M/S. KAYPEE DEVELOPERS WHICH WAS NEVER PRODUCED BEFORE AO. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT(A) ERRED IN ADDING FRESH EVIDENCE WITHOUT REFERRING THE AO W HICH IS CONTRAVENTION OF RULE 46A. 3) THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE AB OVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. RELEVANT FACTS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY, ENGAGED IN THE BUSINESS OF BUILDERS AND REAL ESTATE DEVELOPERS. THE ASSESSEE- COMPANY DEVELOPED REAL ESTATE PROJECT MANGALA AT BELAPUR, NAVY MUMBAI. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 5 8,90,690/-. M/S. KAMDHENU HOME MAKERS PVT. L TD. 2 ON TOTAL SALES OF RS. 11.95 CRORES IN MANGALA PROJECT, THE A SSESSEE HAS SHOWN NET PROFIT OF RS. 66.65 LAKHS, INCLUDING RENTAL INCOME OF R S. 26.34 LAKHS AND MISCELLANEOUS INCOME OF RS. 81,127/-. 3. THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE ACQUIRED DEVELOPMENT RIGHTS FOR DEVELOPMENT OF MANGALA PROJECT FROM M/S. SVA SECUR ITIES PVT. LIMITED UNDER AN AGREEMENT DATED 18.1.2005. PRIOR TO THE SA ID DEVELOPMENT AGREEMENT, THE ASSESSEE ENTERED INTO A MEMORANDUM OF UNDERSTANDING (M OU) DATED 7.7.2004 WITH ONE M/S. KAYPEE DEVELOPERS TO PROVIDE CERTA IN SERVICES FOR CONSIDERATION MENTIONED THEREON BEING 9 FLATS AND 2 SHOPS IN TH E PROJECT MANGALA. 4. AS PER THE AGREEMENT WITH M/S. SAV SECURITIES PVT. LTD., THE ASSESSEE- COMPANY HAD TO HANDOVER DULY CONSTRUCTED 20 FLATS AND 2 SHOP S OUT OF TOTAL CONSTRUCTED 84 FLATS AND 8 SHOPS TO M/S. SAV SECURITIES PVT. LIM ITED. HOWEVER, AFTER COMPLETION OF PROJECT, ONLY 6 SHOPS WERE CONSTRUCTED OUT OF WHICH ASSESSEE-COMPANY RETAINED 4 SHOPS AND 2 SHOPS WERE GIVEN TO M/S. SAV SECURITIES PVT. LTD. 5. THE ASSESSEE AS PER MOU WITH KAYPEE DEVELOPERS, WHEREBY SOME SERVICES WERE CLAIMED TO HAVE BEEN RENDERED BY IT TO THE ASSESSEE, ASSESSEE- COMPANY HAS TO PROVIDE COMMERCIAL AREA OF APPROXIMATELY 350 0 SQ. FEET AND RESIDENTIAL AREA OF APPROXIMATELY 7620 SQ.FT. AND THEREFOR E THE ASSESSEE- COMPANY GAVE 9 FLATS AND 2 SHOPS TO KAYPEE DEVELOPERS OUT OF TO TAL 64 FLATS AND 4 SHOPS FOR PERFORMANCE OF THE SERVICES. HENCE ASSESSEE-COMPANY LEFT W ITH 55 FLATS AND 2 SHOPS WHICH WERE SOLD BY THE ASSESSEE-COMPANY 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE DETAILS OF UNITS HANDED OVER TO KAYPEE DEVELO PERS AND ALSO SUBMIT DOCUMENTARY EVIDENCE OF SERVICES PROVIDED BY KAYPEE DEVELOPERS. THE ASSESSING OFFICER STATED THAT NO DETAILS OF UNIT TR ANSFERRED OR DOCUMENTARY EVIDENCE OF SERVICES AVAILED FROM KAYPEE DEVELOPERS WERE FILED. M/S. KAMDHENU HOME MAKERS PVT. L TD. 3 HOWEVER, ON PERUSAL OF MOU BETWEEN THE ASSESSEE COMPANY AND KAYPEE DEVELOPERS DATED 7.7.2004 SHOWS THAT THE LATER WAS TO PROVIDE TH E WORK OF OBTAINING VARIOUS PERMISSIONS AND SANCTIONS AND TO CARRY ON L IAISON WORK FOR DEVELOPMENT OF THE SAID PLOT AND FOR CONSTRUCTION OF MULTISTO RIED BUILDINGS THEREON. THE ASSESSING OFFICER STATED IN PARA 4.2 OF THE ASSESSMENT ORDER THE DETAILS OF SERVICES TO BE PROVIDED INCLUDE AS UNDER :- (I) THE PARTY OF THE OTHER PART SHALL ARRANGE WITHOUT P AYMENT OF ANY RENT OR COMPENSATION FOR THE PARTY OF THE FIRST PART ON OFFICE SPA CE FOR CARRYING OUT ADMINISTRATIVE WORK LIKE ACCOUNTS, MARKETING, GENERAL AD MINISTRATION ETC. AT 20 SHANTI CENTRE, SECTOR 17, VASHI NAVI MUMBAI. (II) THE PARTY OF THE OTHER PART SHALL CARRY OUT ALL FOR MALITIES FOR OBTAINING PERMISSIONS FOR CONSTRUCTION OF BUILDING, EXTENSION OF TIME L IMIT FOR CONSTRUCTION, CHANGE OF USER OF PLOT FROM COMMERCIAL TO RESI DENTIAL CUM COMMERCIAL, OBTAINING U.L.C. NOC, ETC. FROM CIDCO, N.M .M.C. OR OTHER CONCERNED AUTHORITIES. (III) THE PARTY OF THE OTHER PART SHALL ALSO OBTAIN OTHER INCIDENTAL PERMISSIONS LIKE FIRE NOC, DRAINAGE NOC, HEALTH NOC, CESS NO C, COMMENCEMENT CERTIFICATE, OCCUPATION CERTIFICATE, TEMPORARY AS W ELL AS PERMANENT WATER CONNECTION, ETC FROM NMMC OR ANY OTHER COMPET ENT AUTHORITIES WITH RESPECT TO CONSTRUCTION OF THE BUILDING ON TH E SAID PLOT. (IV) THE PARTY OF OTHER PART SHALL ALSO CARRY ON LIAISON W ORK WITH ARCHITECT, R.C.C. CONSULTANTS, ADVOCATES FOR PREPARATION OF AGREEMENT FOR S ALE OF THE FLAT/COMMERCIAL PREMISES AND OTHER DOCUMENTS AND PAPERS AND TO ATTEND ALL LEGAL MATTERS AND COURT MATTERS ARISING OUT OF CONSTRUCTI NG BUILDING ON THE SAID PLOT AND TO FINALIZE VARIOUS CONTRACTS TO BE ENTERED INT O BY PARTY OF FIRST PART WITH OTHERS (LIKE LABOUR CONTRACT ETC.) IN REL ATION TO CONSTRUCTION OF THE BUILDING ON THE SAID PLOT. 7. THE ASSESSING OFFICER HAS STATED THAT AS PER INFORMATION AND THE SIGNATURES OF THE MEMORANDUM OF ASSOCIATION, THE PARTNERS OF M /S. KAYPEE DEVELOPERS ARE SHRI SATISH SABHLOK AND SHRI SURINDER SABHLO K ARE ALSO ACTIVE DIRECTORS OF THE ASSESSEE-COMPANY AND THEY ARE GETTING REMUNERATION OF RS. 3 LAKHS EACH FROM ASSESSEE-COMPANY. SHRI SURINDER SABHLOK IS ALSO A SHAREHOLDER HAVING 2500 SHARES IN THE ASSESSEE-COMPANY. THE AO HAS STA TED THAT THE MOU IS SIGNED ON 7.7.2004 FOR OBTAINING PERMISSION FOR CONSTRUCTION OF BUILDING, CHANGE OF USER OF PLOT FROM COMMERCIAL TO RESID ENTIAL-CUM- M/S. KAMDHENU HOME MAKERS PVT. L TD. 4 COMMERCIAL, ULC, NOC, ETC. FROM CIDCO, NMMC OR OTHER CONCERN ED AUTHORITIES. BUT NECESSARY PERMISSION FROM CIDCO FOR CHANGE OF USER OF SAID PLOT WAS OBTAINED ON 15.3.2004. THEREFORE AGREEMENT BETWEEN THE ASSESSEE- COMPANY AND M/S. KAYPEE DEVELOPERS IS A FABRICATED/MAKE BELIEF I NSTRUMENT DESIGNED TO SIPHON OFF TAXABLE PROFITS OF THE ASSESSEE-COMPANY AND THEREBY TO EVADE LEGITIMATE TAXES PAYABLE. 8. THE AO HAS STATED THAT VARIOUS TYPES OF SERVICES MENTIONED IN M OU BETWEEN THE ASSESSEE-COMPANY AND KAYPEE DEVELOPERS ARE GENERAL AND BASIC IN NATURE. THAT THE PAID DIRECTORS OF THE COMPANY ARE SUPP OSED TO RENDER NECESSARY SERVICES INSTEAD OF CLAIMING SAID SERVICES HAVE BEEN GIVEN BY ANOTHER CONCERN. THAT THIS CANNOT BE TERMED AS A PRUDENT BUSINESS PRACTICE. THE AO HAS CONCLUDED THAT ENTIRE PAYMENT I.E. BY WAY OF HANDING OV ER OF 9 FLATS AND 2 SHOPS WHOSE TOTAL SALE PRICE COMES TO RS. 3,25,24,400/- CANNOT BE TREATED FOR BUSINESS CONSIDERATION AND ACCORDINGLY NOT ALLOWABLE U/S. 37 OF THE ACT. HE HAS STATED THAT KAYPEE DEVELOPERS IS CLOSELY RELATED PARTY AND THE SA ME IS ALSO DISALLOWABLE IN TOTAL U/S. 40A(2)(B) OF THE ACT. HENCE THE A O MADE ADDITION OF RS. 3,25,24,400/- TO THE NET PROFIT FROM MANGALA PROJECT. 9. BEING AGGRIEVED, THE ASSESSEE FILED THE APPEAL BEFORE THE FIRST APPELLA TE AUTHORITY. 10. THE ASSESSEE FILED DETAILED SUBMISSIONS BEFORE LD. CIT(A) AND LD . CIT(A) CONSIDERED THE SAID SUBMISSIONS AND GIVEN HIS FINDING IN PARA 3.6 TO 3.10 OF THE IMPUGNED ORDER AND CONCLUDED THAT ADDITION SO MADE BY T HE AO IS NOT JUSTIFIED AND ACCORDINGLY DELETED THE SAME. SAID PARAS VIZ PARA 3.6 TO 3.10 OF THE ORDER OF CIT(A) READ AS UNDER :- 3.6. THE AO HAS PROCEEDED TO MAKE THE SAID ADDITION ACCORDINGLY. THE APPELLANT FILED DETAILS AS MENTIONED VIDE THE LETTERS DATED 2/1 1/201O, 24/11/2010 AND 2/12/2010 IN SUPPORT OF THE GROUNDS OF AP PEAL RAISED. FROM THE DETAILS BEFORE ME IT TRANSPIRES THAT THE APPELLANT IS A PRIVATE LIMITED COMPANY HAVING FOUR DIRECTORS. M/S. KAMDHENU HOME MAKERS PVT. L TD. 5 IN 10/4/1995 LAND BEARING PLOT NUMBER 84, SECTOR 15 CB D-BELAPUR, NAVI MUMBAI MEASURING ABOUT 4000 SQ. FT. WAS ALLOTTED B Y CIDCO TO ONE SVA SECURITIES PRIVATE LIMITED ON LEASE FOR THE LIMITED PURPOSE OF DEVELOPMENT OF A CORPORATE OFFICE. THE PLOT WAS NOT PERMITTED TO BE TRANSFERRED IN FAVOUR OF ANY OTHER THIRD PA RTY. TO ESTABLISH THIS ISSUE, A COPY OF AGREEMENT OF LEASE GRANTED BY CI DCO ON 10/4/1995 HAS BEEN SUBMITTED BY THE APPELLANT. I FIND T HE SAME IS IN ORDER AND IT IS ALSO SEEN THAT THE AO HAS NOT DOUBTED ITS VERACITY. AS STATED BY THE APPELLANT IT IS SEEN THAT THE SAID CONCERN THA T IS SVA SECURITIES PRIVATE LIMITED DID NOT WISH TO DEVELOP THE SAI D PLOT ON ITS OWN AND THEREFORE ENTERED INTO AN AGREEMENT WITH ONE M/S KAYPEE DEVELOPERS FOR DEVELOPMENT OF THE SAID PLOT TO CERTAIN TERMS AND CONDITIONS. IN THE SAID FIRM TWO OF THE DIRECTORS/ SHAREHOL DERS OF THE APPELLANT COMPANY ARE EQUAL PARTNERS. SVA SECURITIES PVT LTD AND M/S KAYPEE DEVELOPERS ENTERED INTO WITH MOU DATED 4/11/2003 WHEREIN THE TERMS AND CONDITIONS OF DEVELOPMENT OF PLOT NUMBER 84 OF SECTOR 15 WERE FORMALISED. UNDER THE SAID ARRANGEMENT M/S KAYPEE DEVELOPERS WOULD DEVELOP THE SAID PLOT BY CONSTRUCTING PREMISES THEREON. IT WAS AGREED THAT 25% OF THE CONSTRUCTED PREMISES WOULD BE GRANTED TO THE OTHER PA RTY AS CONSIDERATION FOR GRANT OF DEVELOPMENT RIGHTS. M/S KAYPEE DEVELOPERS WOULD RETAIN THE BALANCE 75% OF THE CONSTRUCTED PREMISES AND APPROPRIATE THE ENTIRE SALE CONSIDERATION IN RESPEC T THEREOF. THE COST OF CONSTRUCTION WAS TO BE BORNE BY M/S KAYPEE DEVELOPERS ONLY. AS EVIDENCE A COPY OF AGREEMENT DATED 4/11/2003 HAS BEEN SUBMITTED. A READING OF THE MOUS SHOWS THAT THE SALIEN T FEATURES ARE THE SAME AS REPRODUCED ABOVE. I FIND THAT THE ASSESSING OFFICERS ORDER IS SILENT REGARDING THIS PARTICULAR M0U WHICH IS THE BASE POINT OF THE WHOLE CASE. IT IS THIS AGREEMENT THROUGH WHICH M/S KAYPEE DEVELOPERS, HAS BEEN INCORPORATED INTO THE PROJECT. THIS INCORPORATION OF M/S KAYPEE DEVELOPERS WAS BEFOR E THE INVOLVEMENT OF THE APPELLANT COMPANY INTO THE PROJECT. IN FACT M/S KAYPEE DEVELOPERS WERE THE ONES WHO WERE SUPPOSED TO BE DEVELOPING THE LAND AND APPROPRIATING THE PROFIT FROM SA ID PROJECT. THIS FACT CANNOT BE OVERLOOKED AND HAS TO BE TAKEN INTO CONSIDERATION WHILE DECIDING THE CASE OF THE APPELLANT. IT IS ALSO SEEN THAT THE LAND WAS ALLOTTED FOR DEVELOPMENT OF CORPORATE OFFICE ONLY. IT COULD NOT BE USED FOR ANY OTHER PURPOSE. IT COULD NOT BE TRANSFERRED TO ANY OTHER PERSON. SIMILARLY THE DEVELOPMENT HAD TO BE DONE WITHIN A CERTAIN FRAME OF TIME. THE QUESTION RELATED TO PROPERTY TAX ETC. WERE ALSO TO BE DECIDED. IN THE M/S. KAMDHENU HOME MAKERS PVT. L TD. 6 AGREEMENT BETWEEN THE ABOVE MENTIONED TWO PARTIES IT IS SEEN THAT M/S KAYPEE- DEVELOPERS WOULD BE THE AGENCY WHICH WOULD TACKLE ALL THE ABOVE ISSUES, WOULD, OBTAIN PERMISSION FOR CHANGE OF USE OF PLOT FROM THAT OF CORPORATE OFFICE TO THAT OF RESIDENTIAL/COMM ERCIAL, WOULD OBTAIN PERMISSION FOR TRANSFER OF PLOT TO THE 3RD PA RTY, WOULD OBTAIN AN EXTENSION OF TIME FOR DEVELOPMENT/CONSTRUCTION ON THE SAID PLOT. FOR THIS THE ABOVE MENTIONED PARTIES ENTERED INTO AN AGREEMENT ON 28/11/2003. A COPY OF THE SAID AGREEMENT/IRREVOCABLE POWER OF ATTORNEY DATED 28/1/2003 HAS BEEN SUBMITTED. BY THIS AGREEMENT SVA SECURITIES PVT LTD THROUGH ITS DIRECTORS HANDED OVER/NOMINATED M/S KAYPEE DEVELOPERS TO BE THEIR TRUE AND LAWFUL ATTORNEY. A COPY OF LETTER DATED 5/ 2/2004 WRITTEN BY SVA SECURITIES PRIVATE LIMITED TO THE OFFICERS OF CIDCO AUTHORISING PARTNERS OF M/S KAYPEE DEVELOPERS TO LIAISON ON THEI R BEHALF HAS ALSO BEEN SUBMITTED TO INDICATE THE TAKING OVER OF TH E PROJECT BY M/S KAYPEE DEVELOPERS . ON THIS ISSUE ALSO I FIND THAT THE ORDER OF ASSESSING OFFICER IS SILENT. I FIND THAT THE ORDER OF THE ASSESSING OFFICER HAS NOT CONSIDERED THIS DOCUMENT IN HIS ASSESSMENT ORDER. IN THE CIRCUMSTANCES OF THE CASE IT WAS REQUIRED THAT THIS DOCUMENT BE TAKEN INTO CONSIDERATION AS ALONG WITH THE AGREEMENT DATED 4/11/2003 THIS FORMS THE VERY BASIS OF THE CASE. RECORDS SHOW THAT AFTER THE EXCLUSION OF THE ABOVE MENTIONED AGREEMENT M/S. KAYPEE DEVELOPERS COMMENCED WORKING ON THE PLOT. AS PROOF LETTER DATED 12/2/2004 WRITTEN BY SVA SECURI TIES PVT LTD TO CIDCO HAS BEEN SUBMITTED BY HIM WHERE A REQUEST FOR EXTENSION OF CONSTRUCTION TIME HAS BEEN MADE. THE LETTER IS SIGNED BY THE PARTNER OF M/S KAYPEE DEVELOPERS ON BEHALF OF SVA SECURITIES PVT LTD. THIS LETTER TOO FINDS NO MENTION IN THE ORD ER OF THE ASSESSING OFFICER. THE ABOVE ISSUES ARE ALL INDICATIVE OF THE FACT TH AT M/S KAYPEE DEVELOPERS HAD HOPED ANY INTEREST IN THE PLOT OF LAN D EVEN BEFORE THE APPELLANT COMPANY CAME INTO THE PICTURE AND HA D STARTED WORKING ON IT. THE PERMISSION HAD BEEN GRANTED BY CI DCO TO CHANGE THE USE IN RESPECT OF THE SAID PLOT HAD BEEN OBTAINED BY M/S. KAYPEE DEVELOPERS ON 15/3/2004: IN COPIES OF THE ABOVE PERMISSION/SANCTION OBTAINED CLEARLY SHOWS THAT IT WAS DUE TO THE EFFORTS OF M/S. KAYPEE DEVELOPERS THAT THE SAID PERMISSION WAS GIVEN. THE A.O. HAS MENTIONED THIS LETTER IN HIS ORDER BUT NOT THE CHRONOLOGY LEADING TO IT. IT IS ONLY AFTER THIS DEVELOPMENT THAT M/S KAYPEE DEVELOPERS APPROACHED THE APPELLANT COMPANY AND OFFERED TO TRANSFER TH E SAID PLOT IN FAVOUR OF THE APPELLANT ON CERTAIN TERMS AND CONDITIONS. ACCORDINGLY AN MOU WAS SIGNED ON 7/7/2004 AND 18/1/2005 WHEREBY M/S. KAYPEE DEVELOPERS ASSIGNED ALL ITS RIGHTS OBTAINED UNDER MOU DATED 4/11/2003 IN FAVOUR OF THE APPELLANT AND M/S. KAMDHENU HOME MAKERS PVT. L TD. 7 REQUESTED SVA SECURITIES PRIVATE LIMITED TO EXECUTE THE DEVELOPMENT AGREEMENT IN FAVOUR OF THE APPELLANT. AS PER THE AGREEMENT IT WAS SEEN THAT THE BALANCE LEGAL/REGULATORY SANCTIONS IN RESPECT OF T HE SAID PLOT WOULD STILL BE OBTAINED BY M/S. KAYPEE DEVELOPERS AN D ALL FURTHER LIAISONING WORK WOULD ALSO BE DONE BY THEM. IT WAS AL SO AGREED THAT M/S KAYPEE DEVELOPERS WOULD ALLOW THE APPELLANT TO USE ITS OFFICE PREMISES IN VASHI, NAVI MUMBAI. 3.7. THE APPELLANT HAS FURTHER CONTENDED THAT IT WAS ON ACCOUN T OF THE EFFORTS/EXPENSES INCURRED BY M/S KAYPEE DEVELOPERS THAT THE APPEL LANT GAINED SUBSTANTIALLY AND GOT INVOLVED IN THE PROJECT WHIC H WAS COMMERCIALLY VIABLE. IT HAS FURTHER BEEN STATED THAT THE T RANSACTIONS BETWEEN THE APPELLANT AND M/S KAYPEE DEVELOPERS IS A PURELY COMMERCIAL TRANSACTION AND IT IS ONLY INCIDENTAL THAT THE PARTNERS O F THE FIRM ARE ALSO DIRECTORS OF THE APPELLANT-COMPANY. THE APPELLANT HAS FURTH ER STATED THAT EVEN IF THE TRANSACTIONS INVOLVE ANY OTHER PARTY THE FIRM WOUL D HAVE STILL GOT CONSIDERATION FOR ALL THE SERVICES PERFORMED BY IT AS THE SERVI CES PERFORMED WERE REAL AND SIGNIFICANT. AFTER CAREFULLY CONS IDERING THE ABOVE ISSUES; I FIND THAT THERE IS NOTHING TO DISPUTE THEM. THE AP PELLANT HAS BEEN ABLE TO PLACE ON RECORD DOCUMENTS WHICH ESTABLISHES AND SUBSTANTIAT ES THE STATEMENTS MADE. I ALSO FIND THAT THE ASSESSING OFFICER HAS BEEN SILENT ON THESE VERY BASIC ISSUES AND HAS ALSO NOT HELD THEM TO BE UNTRUE OR INCORRECT. UNDER THE CIRCUMSTANCES DUE WEIGHTAGE WOULD HAVE TO BE GIVEN TO THE CONTENTION OF THE APPELLANT THAT THE INVOLVEMENT OF M/S KA YPEE DEVELOPERS IN THE PROJECT WAS NOT FOR ANY OTHER REASONS BUT FOR THE FACT THAT IT WAS BECAUSE OF M/S KAYPEE DEVELOPERS THAT THE APPELLAN T HAS BEEN ABLE TO GAIN THE PROJECT AND THAT VERY REAL SERVICES HAD BEEN PROVIDED BY THE SAID FIRM.- IT IS ALSO SEEN FROM A READING OF THE ASSESSMENT ORDER THAT -THE ASSESSING OFFICER HAS NOT HELD THE AGREEMEN TS DATED 7/7/2004 AND 18/1/2005 AS WRONG OR BOGUS. IN FACT T HE ASSESSING OFFICER HAS I FIND, BEEN SILENT ON THE VALIDITY OF THE SAID AGREEMENTS EXCEPT FOR SAYING THAT ALL PERMISSION FROM THE CONCERNED AUTHORITIES H AD BEEN TAKEN WELL BEFORE THE AGREEMENT HAD BEEN SIGNED AND THEREFORE T HE PAYMENT TO M/S. KAYPEE DEVELOPERS WAS NOT REQUIRED. HOWEVER WHAT IS FOR CONSIDERATION HERE IS THE HISTORY OF THE CASE/PROJECT THA T HAS TO BE CONSIDERED FROM THE TIME OF ALLOTMENT OF PLOT TO SVA SECURI TIES PRIVATE LIMITED AND THE FINAL DEVELOPMENT OF THE PLOT BY THE APPELL ANT COMPANY. IN DOING SO ALL THE AGREEMENTS MADE DURING THE COURSE OF THIS PERIOD WOULD HAVE TO BE READ TOGETHER AND NOT IN ISOLATION. THEREFORE THE A GREEMENT DATED 7/7/2004 WOULD HAVE TO BE SEEN AS A CONTINUATION OF THE P REVIOUS AGREEMENTS MADE BETWEEN SVA SECURITIES AND M/S KAYPEE DEVELOPERS A S DETAILED ABOVE IN THE ORDER. AS THESE AGREEMENTS HAVE NOT FOUND TO BE INVALID THE PROVISIONS CONTAINED IN THEM WOULD NEED TO BE LOOKED INTO AND ACCEPTED. 3.8. A READING OF THE AGREEMENT SHOWS THAT IN THE DEVELOPMEN T OF THE M/S. KAMDHENU HOME MAKERS PVT. L TD. 8 PLOT OF LAND THERE WERE TO BE 84 FLATS AND 6 SHOPS. ACCORD INGLY SVA SECURITIES PVT. LTD. WAS TO BE GIVEN 20 FLATS AND 2 SHOPS AS CONS IDERATION FOR GRANT OF DEVELOPMENT RIGHTS, M/S KAYPEE DEVELOPERS WAS TO RECEI VE 9 FLATS AND 2 SHOPS AS CONSIDERATION FOR SERVICES PERFORMED, BENEFITS GRANTED AND THE BALANCE WAS TO REMAIN WITH THE APPELLANT COMPANY AS DEVELOPER. IT IS LOGICAL TO PRESUME THAT EACH PARTY IN THE PROJ ECT HAD INVOLVED ITSELF IN THE PROJECT FOR PROFITS AND GAINS. WHEN, THE APPELLANT HAD NOT ENTERED THE PROJECT DEAL WAS BETWEEN SVA SECURITIES PVT . LTD. AND M/S KAYPEE DEVELOPERS WHEREIN M/S KAYPEE DEVELOPERS WAS TO APPROPRIAT E THE PROFITS BY SELLING THE UNITS AFTER GRANTING 25% OF TH E CONSTRUCTED PREMISES TO SVA SECURITIES PVT. LTD. WHEN THE APPELLANT ENTERED THE PROJECT THIS CLAUSE REMAINED AND ACCORDINGLY THE UNITS WERE GIVEN TO SVA SECURITIES PVT. LTD. I FIND THAT THE ASSESSING OFFICER HAS NOT DISPUTED THIS AT ALL. IT IS LOGICAL ALSO TO PRESUME THAT WITH THE ENTRY OF THE APPELLANT INTO THE PROJECT 75% OF THE PROFIT WOULD NOT LIE WITH M/S KAYPEE DEVELOPERS BUT WOULD BE ALLOCATED BETWEEN M/S KAYPEE DEVELOPERS AND THE APPELLAN T IN PROPORTION TO THE WORK DONE BY THEM. AS M/S KAYPEE DEVELOPERS H AD BEEN ALLOTTED THE WORK OF GETTING ALL LEGAL AND OTHER PROCEDUR AL CLEARANCES THEIR SHARE OF THE PROJECT WAS AS DESCRIBED ABOVE. IT IS ALSO SEEN THAT M/S.KAYPEE DEVELOPERS HAD CARRIED OUT THEIR PART OF THE AGREE MENT. I FIND THAT THE ASSESSING OFFICER HAS NOT LOOKED INTO THE CASE IN TOTALIT Y BY TAKING INTO CONSIDERATION ALL THE DOCUMENTS INVOLVED AND THE HISTORY OF T HE CASE BUT HAS CONCENTRATED ONLY ON A PART OF IT. ACCORDINGLY THE ASSESSI NG OFFICER HAS ARRIVED AT A CONCLUSION AS RECORDED IN THE ASSESSMENT ORDER. I ALSO FIND THAT THE AO HAS NOT CONDUCTED ANY INVESTIGATION/ENQUIR Y IN THE CASE LIKE QUESTIONING SVA SECURITIES (P) LTD, M/S. KAYPEE DEVELOPERS E TC. THEREFORE IT CAN BE SAID THAT THE OBSERVATION OF THE ASSESSING O FFICER IN HIS ORDER REGARDING THE APPLICABILITY OF SEC.40A(2)(B) OF THE I.T.ACT IS BASED MAINLY ON PRESUMPTIONS AND SURMISES INFLUENCED BY THE FACT THAT THE PARTNERS OF M/S KAYPEE DEVELOPERS WERE ALSO DIRECTORS OF THE APPEL LANT COMPANY. NO EFFORT HAS BEEN MADE TO ESTABLISH THAT THERE HAS B EEN TAX EVASION BY THE APPELLANT AND THAT THERE HAS BEEN DIVERSION OF P ROFIT BY THE APPELLANT. THE ASSESSING OFFICER I FIND HAS MADE NO ENQUIRY I NTO THE FACT WHETHER THE WORK SAID TO BE DONE BY M/S KAYPEE DEVELOPERS WAS ACTUALLY DONE OR NOT. UNLESS THIS HAD BEEN DONE THE DOCUMENTS AS PRODUCED BY THE APPELLANT TO ESTABLISH THE FACT THAT M/S KA YPEE DEVELOPERS HAD A MAJOR ROLE TO PLAY IN THE CASE CANNOT BE DISCOUNTED OR REJECTED.. IT IS ALSO TO BE CONSIDERED THAT THE LAW DOES NOT PROHI BIT SISTER CONCERNS FROM TRANSACTING BUSINESS WITH EACH OTHER. WHAT HAS TO BE SEEN THAT THE TRANSACTION ARE WHOLLY AND EXCLUSIVELY FOR BUSINESS IF CLAIMS ARE MADE. 3.9. IT IS ENTIRELY THE CASE OF THE APPELLANT AS TO WHOM IT TRANSACTS BUSINESS WITH AND WHAT EXPENDITURE IT INCURS TO REALISE THE PRO FIT. THE ASSESSING OFFICER IS ONLY REQUIRED TO LOOK INTO THE AUTHENTICITY OF THE EXPENDITURE AND THE FACT THAT IT WAS FOR BUSINESS PURPOSES AND T HAT M/S. KAMDHENU HOME MAKERS PVT. L TD. 9 CORRECT PROFITS HAVE BEEN DECLARED IN THE AGREEMENT DATED 7/7/2004 THE APPELLANT HAD AGREED TO PAY A SUM OF RS.1,44,85,000/ TH AT IS THE VALUE OF THE UNITS TO M/S KAYPEE DEVELOPERS FOR THE SERVICES RENDERED BY THEM. THE AO WAS REQUIRED TO CONSIDER THIS AMOUNT ONLY. SO EVEN IF THE DISALLOWANCE WAS REQUIRED TO BE MADE THE AMOUNT TO BE CONSIDERED HAS TO BE RS.1,44,85,000/- ONLY. THE FACT THAT THE UNITS ARE SOLD AT A HIGH RATE IN THE, SUBSEQUENT YEARS WOULD HAVE NO BEARING ON THE MATTER. FURTHER IT IS SEEN THAT THE A.O. HAS DISREGARDED THE TRANSFER OF UNITS B Y THE APPELLANT TO M/S.KAYPEE DEVELOPERS AND CONSIDERED THEIR FACE VALUE A S PROFIT OF THE APPELLANT. AS PER THE RECORDS THE APPELLANT HAS SOLD 5 UNITS ON BEHALF OF M/S: KAYPEE. DEVELOPERS AND HAS TRANSFERRED THE CONSIDERA TION RECEIVED IMMEDIATELY TO M/S. KAYPEE DEVELOPRS. . THIS ACTION HAS BEEN TAKEN BY THE APPELLANT AS THE PERSONS WHO HAD PURCHASED THE PROP ERTY WERE DESIROUS OF EXECUTING THE AGREEMENT WITH THE DEVELOPER ONLY. DOCUMENTS SUBMITTED SHOWS THAT THE BALANCE 6 UNITS HAVE BEEN TRANSFERRED TO THE FIRM BY THE APPELLANT AS AND WHEN COMPLET ED AND THEN IT WAS THEN FOR THE FIRM TO TAKE A DECISION REGARDING THEIR SALE AS THE OWNERSHIP WAS THEN OF THE FIRM. IN THE ORDER OF THE ASSESSING OFFICER I FIND NO MENTION OF THESE FACTS. IN FACT THE A.O. I FIND HAS CONSI DERED THE SALE PRICE AS ESTIMATED BY HIM TO BE THE PROFIT IN TOTAL OF THE APPELLANT. 3.10. I ALSO FIND THAT THE ASSESSING OFFICER HAS PRESUMED THA T THE FLATS HAVE BEEN SOLD IN THE SAID ASSESSMENT YEAR ONLY BY THE APPELLAN T AND AS PROCEEDED TO APPLY AN AVERAGE RATE OF PRICE AND ARRIVED AT A FI GURE OF RS.3,25,24,200/- THAT HE HAS TAKEN TO BE THE UNACCOUNTED INCO ME OF THE APPELLANT. I FIND THAT THE ADDITION MADE BY THE ASSESSING O FFICER IN THE HANDS OF THE APPELLANT HOLDING THAT THE TRANSACTIONS REGARD ING THE VALUE OF 9 FLATS AND 2 SHOPS ARE ACTUALLY THE INCOME OF THE APPELLANT CANNO T BE SUSTAINED. AN ADDITION BASED ON SUSPICION AND PRESUMPTION CA NNOT SURVIVE. THIS ALL THE MORE AS DURING THE COURSE OF APPELLATE H EARINGS IT HAS BEEN ESTABLISHED BY THE APPELLANT THAT THE PROFIT FROM THE S ALE OF THE ABOVE MENTIONED UNITS HAS BEEN DECLARED FOR TAXATION BY M/S KYPEE DEVELOPERS AND HAS BEEN ACCEPTED BY THE INCOME TAX DEPARTMENT WIT HOUT ANY DISPUTE. THE APPELLANT HAS SUBMITTED OF INCOME TAX RETU RNS OF M/S KAYPEE DEVELOPERS FOR A.YS. 2007-08 TO 2010-11 AS PROOF. IT IS SEEN THAT THE TOTAL AMOUNT DECLARED BY M/S KAYPEE DEVELOPERS FOR TAXATION AS PROFIT/INCOME FROM THE ABOVE DISCUSSED TRANSACTIONS IS RS.2.89 CRORES. AS THE SAME STANDS TAXED IN THE HANDS OF M/S KAYPEE DEVELOPERS TAX ING IT AGAIN IN THE HANDS OF THE APPELLANT WOULD LEAD TO DOUBL E TAXATION OF THE SAME AMOUNT WHICH IS NOT PERMISSIBLE UNDER THE INCOME TAX ACT . I FIND THAT THE APPELLANTS RELIANCE ON THE CTBTS CIRCULAR NO. 6 DAT ED 6,9/1968 IS VALID. THE DECISION OF THE HONOURABLE BOMBAY HIGH COURT IN THE CASE OF CIT VERSUS INDO SAUDI SERVICES (TRAVEL) PVT. LTD., 310 ITR 30 6 (2009) ON WHICH THE APPELLANT HAS RELIED ALSO WORKS ON THE APPELLANTS F AVOUR. THE ADDITION SO MADE IS THEREFORE TO BE DELETED AND THE GROUND OF AP PEAL TO BE ALLOWED. M/S. KAMDHENU HOME MAKERS PVT. L TD. 10 - - HENCE, THIS APPEAL BY THE DEPARTMENT. 11. AT THE TIME OF HEARING LD. DR RELIED ON THE ORDER OF AO AND WHEREAS LD. AR SUPPORTED THE ORDER OF LD. CIT(A). HE REFERRED PARA 4. 1 OF THE ORDER OF THE AO AND STATED THAT THE AO ON 21.12.2009 ASKED THE ASSESSEE TO F ILE THE DETAILS OF THE UNITS HANDED OVER TO KAYPEE DEVELOPERS ALONGWITH THE COPIES OF THE DOCUMENTS OF THE SERVICES RENDERED BY KAYPEE DEVELOPERS TO THE ASSESSEE GIVING ONLY 7 DAYS TIME. HE SUBMITTED THAT ALL DETAILS IN RE SPECT OF THE SAID PROJECT AND SERVICES RENDERED BY KAYPEE DEVELOPERS WERE MENTIONED IN MO U WITH THE AO AND NO SUCH ADDITIONAL DOCUMENTS WERE FILED BEFO RE LD. CIT(A) WHICH COULD BE SAID TO BE ADDITIONAL EVIDENCE. HE SUBMITTED THAT LD. CIT(A) HAS CONSIDERED THE FACTS IN ITS ENTIRETY, WHICH THE AO FAILED TO CONSI DER AND DELETED SAID ADDITION JUSTIFIABLY. HE SUBMITTED THAT THE ORDER OF LD. CIT(A) BE CONFIRMED 12. IN RESPECT OF GROUND NO. 2 TAKEN BY THE DEPARTMENT REGARD ING CONSIDERING ADDITIONAL EVIDENCE BY LD. CIT(A) IN VIOLATION OF RULE 46A OF INCOME TAX RULES, 1962,(THE RULES ), IT IS RELEVANT TO STATE THAT LD. DR COULD NOT POINT OUT EVIDENCES WHICH WERE CONSIDERED RELEVANT FOR DECIDING THE ISSUE BY LD . CIT(A) AND SAME WERE NOT AVAILABLE BEFORE THE AO. LD DR COU LD NOT SPECIFY THE ADDITIONAL DOCUMENTS WHICH WERE ADMITTED BY LD. CIT(A) W ITHOUT GIVING OPPORTUNITY TO THE AO WHICH WERE MATERIAL TO DECIDE THE I SSUE UNDER CONSIDERATION. HE AGREED THAT DOCUMENTS MENTIONED AT SR.NO.5 OF PAPER BOOK WHICH IS A LETTER OF AUTHORITY GIVEN BY SVA SECURITI ES PVT LTD DATED 5.2.2004 TO M/S KAYPEE DEVELOPERS AND DOCUMENT AT SR.NO.7 O F PAPER BOOK OF GRANTING PERMISSION BY CIDCO FOR CHANGE OF USE OF PLOT A RE SUPPORTING DOCUMENTS/EVIDENCE ONLY TO ESTABLISH THAT M/S KAYPEE DEVELOPERS RENDERED SERVICES IN RESPECT OF THE PROJECT MANGLA. IN VIEW OF THE ABOVE AN D CONSIDERING THE SAID DOCUMENTS, COPY PLACED IN THE PAPER BOOK, WE HOLD THAT THERE IS NO VIOLATION OF RULE 46A OF THE RULES. HENCE GROUND NO. 2 OF THE APPEAL TAKEN BY THE DEPARTMENT HAS NO MERIT. M/S. KAMDHENU HOME MAKERS PVT. L TD. 11 13. NOW COMING TO SUBSTANTIVE ISSUE BEFORE US AS TO WHETHER THE AO WAS JUSTIFIED TO MAKE ADDITION OF RS. 3,25,24,400/- TO THE I NCOME OF THE ASSESSEE TOWARDS SALE PRICE OF 9 FLATS AND 2 SHOPS WHICH WERE GIVEN BY THE ASSESSEE- COMPANY TO KAYPEE DEVELOPERS ON ACCOUNT OF LEGITIMATE SERVICES RENDERED B Y KAYPEE DEVELOPERS TO THE ASSESSEE-COMPANY. 14. WE HAVE CONSIDERED RELEVANT PAGES OF THE PAPER BOOK AND ORDERS OF THE AUTHORITIES BELOW. 15. WE OBSERVE THAT CIDCO ALLOTTED A PLOT NO. 84, SECTOR-15, CBD BELAPURE, NAVI MUMBAI ADMEASURING ABOUT 4000 SQ. METER TO ONE M/S. SVA SECURITIES PVT. LTD. ON LEASE ON 10.4.1995 FOR LIMITED PURPOSE OF D EVELOPMENT OF CORPORATE OFFICE. THE SAID PLOT WAS NOT PERMITTED TO BE TRANSFERRED IN F AVOUR OF ANY THIRD PARTY. LATER ON M/S. SVA SECURITIES PVT. LTD. ENTERED INTO A N AGREEMENT WITH KAYPEE DEVELOPERS FOR DEVELOPMENT OF SAID PLOT AND ENTERED INTO MOU DATED 4.11.2003 WHEREIN THE TERMS AND CONDITIONS OF DEVELOPMENT OF P LOT WERE FINALIZED. WE OBSERVE THAT UNDER SAID ARRANGEMENT KAYPEE DEVELOPERS WAS TO DEVELOP THE SAID PLOT AND AGREED THAT 25% OF THE CONSTRUCTED PR EMISES WOULD BE GRANTED TO M/S. SVA SECURITIES PVT. LTD. AS CONSIDERATION FO R GRANT OF DEVELOPMENT RIGHTS. THAT THE COST OF CONSTRUCTION WAS TO BE BORNE BY KAYPEE DEVELOPERS ONLY. THEREFORE IT IS EVIDENT THAT KAYPEE DEVELOPERS WAS IN VOLVED IN THE SAID PROJECT BEFORE THE ASSESSEE-COMPANY WAS INVOLVED AND HAS RIGH TLY OBSERVED BY LD. CIT(A) THAT THE AO HAS NOT MENTIONED THE SAID FACT IN THE ASSESSMENT ORDER. LD. CIT(A) HAS RIGHTLY STATED THAT THIS FACT CANNOT BE OVERLOOKED THAT KAYPEE DEVELOPERS WERE THE ONES WHO WERE SUPPOSED TO BE DEVELOPING THE LAND AND APPROPRIATING THE PROFIT FROM SAID PROJECT. IT IS FURTHER OBSERVED THAT SAID PLOT WAS ALLOTTED BY CIDCO FOR DEVELOPMENT OF A CORPORATE OFFICE ONLY WITH CERTAIN FRAME OF TIME. M/S. KAYPEE DEVELOPERS OBTAINED PERMISSION FOR CHANGE OF USE OF PLOT FROM CORPORATE OFFICE TO T HAT OF RESIDENTIAL- CUM-COMMERCIAL AND ALSO OBTAINED PERMISSION FOR TRANSFER OF PL OT TO A THIRD PARTY AS WELL AS EXTENSION OF TIME FOR DEVELOPMENT AND CONSTRU CTION OF SAID M/S. KAMDHENU HOME MAKERS PVT. L TD. 12 PLOT. SAID FACTS ARE SUPPORTED BY THE COPY OF THE LETTER DATE D 5.2.2004 WRITTEN BY M/S. SVA SECURITIES PVT. LTD. TO CIDCO AUTHORISING PART NERS OF THE KAYPEE DEVELOPERS TO LIAISON ON THEIR BEHALF. LD. CIT(A) HAS RIGHTLY STATED THAT THE AO HAS NOT STATED ABOVE FACTS IN THE ASSESSMENT ORDER. SUBSEQUENTLY KA YPEE DEVELOPERS APPROACHED THE ASSESSEE-COMPANY AND OFFER TO TRANSFER THE SA ID PLOT IN FAVOUR OF THE ASSESSEE ON CERTAIN TERMS AND CONDITIONS. HENCE, ASSESSEE-COMPANY GOT INVOLVED IN THE PROJECT AS IT FOUND TO BE COMMER CIALLY VIABLE. WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS RIGH TLY STATED THAT SAID FACTS AMPLY PROVES THAT TRANSACTION BETWEEN THE ASSESSEE-COMPANY A ND KAYPEE DEVELOPERS IS PURELY COMMERCIAL TRANSACTION. GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED MERELY BECAUSE THE PARTNERS OF KAY PEE DEVELOPERS ARE ALSO DIRECTOR OF THE ASSESSEE-COMPANY. WE AGREE WITH LD. CIT(A) THAT THE ASSESSEE HAS PLACED ON RECORD DOCUMENTS WHICH ESTABLI SHES AND SUBSTANTIATE STATEMENT THAT KAYPEE DEVELOPERS RENDERED SERVICES TO THE ASSESSEE IN CONSTRUCTION AND DEVELOPMENT OF SAID PROJECT MANGALA. L D. CIT(A) HAS FURTHER RIGHTLY STATED THAT THE AO HAS NOT DOUBTED THE A GREEMENTS DATED 7.7.2004 AND 18.1.2005, COPIES ARE PLACED AT PAGES 54 TO 62 AND 63 TO 83 OF THE PAPER BOOK RESPECTIVELY AND WE OBSERVE THE SAME WERE ALSO FILED B EFORE THE AO. ON PERUSAL OF THE SAID MOU DATED 7.7.2004 AND THE AGR EEMENT BETWEEN THE ASSESSEE-COMPANY AND M/S. SVA SECURITIES PVT. LTD. DATED 18.1. 2005 WE AGREE WITH LD.CIT(A) THAT SAID AGREEMENTS HAVE TO BE READ TOGETHER AND NOT IN ISOLATION. THEREFORE IT IS EVIDENT THAT REQUISITE PERMISSION FRO M CONCERNED AUTHORITIES HAD BEEN TAKEN BY KAYPEE DEVELOPERS WHICH WAS NECESSARY FOR UNDERTAKING CONSTRUCTION AND DEVELOPMENT OF THE PROJECT BY THE A SSESSEE- COMPANY. WE AGREE WITH LD. CIT(A) THAT KAYPEE DEVELOPERS WAS INVOL VED IN THE PROJECT AND SERVICES WERE RENDERED BY IT THE ASSESSEE-COMPANY. THEREFORE THE ASSESSEE-COMPANY GAVE 9 FLATS AND 2 SHOPS TO M/S KAYPEE DEVELOPERS A S CONSIDERATION FOR THE SERVICES PERFORMED BY IT AND THE SAID TRANSF ER OF FLATS/SHOPS BY THE ASSESSEE-COMPANY TO KAYPEE DEVELOPERS COULD NOT HAVE BEEN GIVEN TO EVADE TAXES BY SPLITTING PROFITS BETWEEN TWO CONCERNS. T HEREFORE PROVISIONS OF SECTION 40A(2)(B) IS NOT ATTRACTED MERELY BECAUSE P ARTNERS OF M/S. KAMDHENU HOME MAKERS PVT. L TD. 13 KAYPEE DEVELOPERS ARE ALSO DIRECTORS OF THE ASSESSEE-COMPANY. LD. DR HA S NOT DISPUTED THAT TOTAL AMOUNT DECLARED BY KAYPEE DEVELOPERS FOR T AXATION AS PROFIT/INCOME FROM TRANSACTIONS REGARDING VALUE OF 9 FLATS AN D 2 SHOPS AS RS. 2.89 CRORES AND THE SAME HAS BEEN ASSESSED TO TAX IN THE HANDS OF KA YPEE DEVELOPERS. 16. CONSIDERING THE REASONING AS GIVEN BY LD. CIT(A), WHICH WE HAVE STATED HEREINABOVE IN PARA 10, AND FOR THE REASONS AS MENTIONED ABO VE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER LD. CIT(A). ACCO RDINGLY WE UPHOLD THE ORDER OF LD. CIT(A) AND REJECT GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT. 17. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON 17.01.2014. SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/ - (B.R. MITTAL) JUDICIAL MEMBER MUMBAI; DATED : 17/1/2014 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, TRUE COPY ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI