DCIT, Chandigarh V. M/s Hill View Promoters, Chandigarh

ITA 558/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77097 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHUPINDER SINGH
• Assessee Lawyers: MANJIT SINGH
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Search and seizure; Document seized; Deemed to accrue or arise in india; Documents seized
• Section: 69C; 143(3); 80HHC; 153A; 80IB; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.547 /CHD/2013 ASSESSMENT YEAR : 2007-08 HILL VIEW INFRASTRUCTURE PVT.LTD., VS. THE D.C.I .T., SCO 2474, SECTOR 22-C, CENTRAL CIRCLE-I, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R AND ITA NO.561 /CHD/2013 ASSESSMENT YEAR : 2007-08 THE D.C.I.T., VS. HILL VIEW INFRASTRUCTURE PV T.LTD., CENTRAL CIRCLE-I, SCO 2474, SECTOR 22-C, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R ITA NO.548 /CHD/2013 ASSESSMENT YEAR : 2008-09 HILL VIEW INFRASTRUCTURE PVT.LTD., VS. THE D.C.I .T., SCO 2474, SECTOR 22-C, CENTRAL CIRCLE-I, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R AND ITA NO.562 /CHD/2013 ASSESSMENT YEAR : 2008-09 THE D.C.I.T., VS. HILL VIEW INFRASTRUCTURE PVT .LTD., CENTRAL CIRCLE-I, SCO 2474, SECTOR 22-C, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R 2 ITA NO.549 /CHD/2013 ASSESSMENT YEAR : 2009-10 HILL VIEW INFRASTRUCTURE PVT.LTD., VS. THE D.C.I .T., SCO 2474, SECTOR 22-C, CENTRAL CIRCLE-I, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R AND ITA NO.563 /CHD/2013 ASSESSMENT YEAR : 2009-10 THE D.C.I.T., VS. HILL VIEW INFRASTRUCTURE PVT .LTD., CENTRAL CIRCLE-I, SCO 2474, SECTOR 22-C, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R AND ITA NO.564 /CHD/2013 ASSESSMENT YEAR : 2010-11 THE D.C.I.T., VS. HILL VIEW INFRASTRUCTURE PVT .LTD., CENTRAL CIRCLE-I, SCO 2474, SECTOR 22-C, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R (APPELLANT) (RESPONDENT) AND ITA NOS.558 & 559 /CHD/2013 ASSESSMENT YEARS : 2009-10 & 2010-11 THE D.C.I.T., VS. HILL VIEW PROMOTORS, CENTRAL CIRCLE I, SCO 2474, SECTOR 22-C, CHANDIGARH. CHANDIGARH. PAN: AAFFH0118P ASSESSEE BY : S/SHRI SUDHIR SEHGAL & BHUPINDER SINGH RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 22.04.2014 DATE OF PRONOUNCEMENT : 06.06.2014 3 O R D E R PER SUSHMA CHOWLA, J.M. : OUT OF THESE BUNCH OF CROSS APPEALS, THREE APPEALS ARE FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE CONSOLIDATED O RDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), CHANDIGARH DA TED 6.3.2013 AGAINST THE ORDER PASSED UNDER SECTION 153B(1)(B) R .W.S. 143(3) OF THE INCOME TAX ACT RELATING TO ASSESSMENT YEARS 2007-08 TO 2009-2010. THE REVENUE IS IN APPEAL AGAINST THE CONSOLIDATED O RDER OF CIT (APPEALS) DATED 6.3.2013 RELATING TO ASSESSMENT YEA R 2010-11 AGAINST THE ORDER PASSED UNDER SECTION 153B(1)(B) R.W.S. 143(3) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). FURTHER THE REVENUE HA S FILED AN APPEAL AGAINST THE CONSOLIDATED ORDER OF CIT (APPEALS) DAT ED 6.3.2013 RELATING TO ASSESSMENT YEARS 2009-10 AND 2010-11 AGAINST TH E ORDER PASSED UNDER SECTION 153B(1)(B) R.W.S. 143(3) OF INCOME TAX ACT, 1961 IN THE CASE OF SISTER CONCERN M/S HILL VIEW PROMOTERS. 2. ALL THE APPEALS RELATING TO SAME ASSESSEE WERE H EARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. ITA NO.547/CHD/2013 :: ASSESSEES APPEAL 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEAL) HAS ERRED IN LAW AND FACTS IS CONFIRMING THE ADDITION OF RS. 94500/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF ENTRIES CONTAINED IN THE HAND WRITTEN SHEET MARK ED A-L, PAGE 81 AND DISCUSSED IN PARA 5 OF THE ASSESSMENT ORDER. THIS AMOUNT OF R S. 94500/- IS A PART OF THE ROTATING CAPITAL INVESTMENT BY SH. J.C BANSAL FORMI NG PART OF THE DECLARED AMOUNT OF RS. 30.70 LACS BEFORE THE HON'BLE SETTLEM ENT COMMISSION. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 1230767/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ENTRIES CONTAINED IN THE HANDWRITTEN SHE ET MARKED A-L PAGES 78 & 82. 4 THIS HANDWRITTEN SHEET SHOWING ACCOUNT OF ONE SH. S AJJAN JAIN DID NOT BELONG TO THE ASSESSEE BUT BELONGED TO THE DIRECTOR SH. MANGE RAM GOYAL OF M/S GOYAL CONSTRUCTION CO. PVT. LTD. AND SUCH NOTING RELATED TO PETTY CASH PAYMENTS MADE BY THE DIRECTOR TO HIS WORKERS AT THE SITE OFFICE. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 5 LACS MADE BY TH E ASSESSING OFFICER AS PER PARA 7 OF THE ASSESSMENT ORDER. THIS PARA DEALS WITH PAGE 57 OF A-2; A HANDWRITTEN SHEET SHOWING TRANSACTIONS IN CHEQUES AND CASH RECEIVED F ROM CUSTOMERS CHARANJIT LAI AND RAHUL CHABRA. THE ENTRY OF 5 LACS IS A PART OF THE TOTAL TRANSACTION ENTERED INTO WITH THEM AND ENTERED INTO OUR REGULAR BOOKS O F ACCOUNTS. HENCE THE ADDITION OF RS. 5 LACS MADE AS SUCH IS UNWARRANTED AND AGAIN ST THE FACTS OF THE CASE. 4. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4. THE GROUND NO.1 RAISED BY THE ASSESSEE IS NOT PR ESSED AND THE SAME IS DISMISSED AS NOT PRESSED. 5. THE ISSUE IN GROUND NO.2 IS AGAINST THE ADDITION OF RS.12,30,767/- MADE ON ACCOUNT OF ENTRIES CONTAINED IN HAND WRITTE N SHEET FOUND DURING THE COURSE OF SEARCH. 6. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED AT BOTH THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE I.E. PART OF BANSAL GROUP OF CASES ON 7.7. 2009. THE ASSESSEE WAS ENGAGED IN BUSINESS OF REAL ESTATE DEVELOPER. NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED ON 25.3.2010. IN RESPON SE TO THE SAID NOTICE THE ASSESSEE FILED RETURN OF INCOME ON 28.10.2007 D ECLARING TOTAL INCOME OF RS.38,343/-. DURING THE COURSE OF SEARCH FROM T HE OFFICE PREMISES I.E. SCO 2474, SECTOR 22, CHANDIGARH, CERTAIN DOCUMENTS WERE SEIZED. PAGES 82 AND 78 OF ANNEXURE A-1 WERE HAND WRITTEN S HEETS SHOWING CERTAIN TRANSACTIONS IN THE NAME OF SHRI SAJJAN JAI N. THESE WERE HAND WRITTEN SHEETS SHOWING ACCOUNT OF SHRI SAJJAN JAIN. THE SAID TWO PAGES SHOW DATE WISE DETAILS OF EXPENDITURE MADE IN CASH AND CHEQUE. THE CASH EXPENDITURE SHOWN ON THESE PAGES WAS RS.12,30, 767/-. THE SCANNED COPY OF THE SHEET IS REPRODUCED BY THE ASSE SSING OFFICER UNDER PARE 6 AT PAGES 5 AND 6 OF THE ASSESSMENT ORDER. T HE ASSESSEE WAS ASKED 5 TO PRODUCE LEDGER ACCOUNT OF SHRI SAJJAN JAIN APPEA RING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND RECONCILES THE TRANSACT ION WITH REGULAR BOOKS OF ACCOUNT. VIDE REPLY DATED 8.11.2011 IT WAS SUBM ITTED THAT THIS DOCUMENT CONTAINED CONSTRUCTION EXPENSES AND PERTAI NED TO ONE OF THE CONTRACTOR M/S GOEL CONSTRUCTION COMPANY IT WAS STA TED THAT THE PAYMENTS SHOWN ON THE ABOVE DOCUMENTS WERE INCLUDE D IN THE TOTAL PAYMENTS MADE TO THE CONTRACTOR M/S GOEL CONSTRUCTI ON CO. PVT. LTD . THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY DATED 8.11.2011 ASKED THE ASSESSEE TO PRODUCE SHRI MANGE RAM GOEL OF M/S GOEL CONSTRUCTION CO. PVT. LTD. THE ASSESSEE FAILED TO PRODUCE SHRI MANG E RAM GOYAL AND ALSO NO EXPLANATION WAS OFFERED BY THE ASSESSEE. VIDE O RDER SHEET ENTRY DATED 24.11.2011, THE ASSESSEE WAS ASKED TO SHOW CAUSE WH Y AN AMOUNT OF RS.12,30,767/- SHOULD NOT ADDED BACK TO THE TAXABLE INCOME OF THE ASSESSEE. THE ASSESSEE VIDE REPLY DATED 2.12.2011 AGAIN DID NOT OFFER ANY EXPLANATION ON THE ABOVE DOCUMENT AND ALSO THE ASSESSEE AGAIN FAILED TO PRODUCE SHRI MANGE RAM GOYAL. IT WAS SIM PLY STATED IN THE WRITTEN REPLY THAT THE ASSESSEE HAS STRINGENT RELAT ION WITH SHRI GOYAL AND HENCE THE ASSESSEE WAS NOT ABLE TO PRODUCE HIM. AS THE ASSESSEE HAD FAILED TO PROVIDE ANY EXPLANATION AND ALSO THE EXPE NDITURE OF RS.12,30,767/- WAS NOT RECORDED IN THE BOOKS OF ACC OUNT OF ASSESSEE, A SUM OF RS.12,30,767/- WAS ADDED BACK AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE INCOME TAX ACT, 1961. 7. BEFORE THE CIT (APPEALS) THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS WHICH ARE REPRODUCED BY THE CIT (APPEAL S) AT PAGES 5 AND 6 OF THE APPELLATE ORDER. THE MAIN CONTENTION OF THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT M/S GOEL CONSTRUCTION COMPAN Y WAS THE CONTRACTOR OF THE ASSESSEE DURING THE SAID ASSESSME NT YEAR AND PAYMENT TO THE TUNE OF RS.1.30 CRORES HAD BEEN MADE AND AGA INST WHICH THERE MAY 6 BE CERTAIN NOTINGS MADE BY SEVERAL OF THE CONTRACTO RS SINCE HE WAS MAINTAINING THE PROJECT OFFICE AT THE SITE. FURTHE R IT WAS CONTENDED THAT THE SAID DOCUMENTS DID NOT BELONG TO THE ASSESSEE A ND THE NOTINGS WERE NOT IN THE HAND WRITING OF THE ASSESSEE OR ANY OF I TS EMPLOYEES. AT THE SITE OFFICE SINCE MANY PERSONS WERE WORKING, NO COG NIZANCE COULD HAVE BEEN TAKEN OF THE SAID PAPERS FOR MAKING ADDITION I N THE HANDS OF THE ASSESSEE. THE ASSESSEE FURTHER CONTENDED THAT THER E WAS NO ACCOUNT OF SHRI SAJJAN JAIN IN THE BOOKS OF ACCOUNT. THE NEX T CONTENTION RAISED BY THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT THOU GH PAPER HAS BEEN FOUND FROM ASSESSEES PREMISES BUT THE PRESUMPTION UNDER SECTION 132(4)A) OF THE ACT WAS NOT ABSOLUTE BUT REBUTTABLE AND SINCE THERE WAS NO LINK OR CONNECTION OF THE SAID DOCUMENT WITH THE ASSESSEE, THERE WAS NO JUSTIFICATION IN MAKING ANY ADDITION. RELIANCE WAS PLACED ON VARIOUS CASE LAWS THAT FOR THE PURPOSE OF SECTION 132(4) OF THE ACT THAT PRESUMPTION WAS REBUTTABLE. IT WAS FURTHER POINTED OUT THAT PERUSAL OF THE SAID DOCUMENT WOULD REFLECT CERTAIN PAYMENTS FO R ITEMS OF CONSTRUCTION AND SINCE THE ASSESSEE WAS NOT CARRYIN G ON THE CONSTRUCTION HIMSELF AND THE ASSESSING OFFICER HAD ACCEPTED THAT THE CONSTRUCTION WAS BEING CARRIED OUT BY THE CONTRACTOR, THERE WAS NO J USTIFICATION OF THE SAID ADDITION. THE CIT (APPEALS) VIDE PARAS 7.3 AND 7.4 HELD AS UNDER : 7.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE ASSESSEE. IN APPEAL THE ASSESSEE HAS ARGUED THAT THE SAID DOCUMENT WAS A DUMB DOCUMENT AS THE N AME OF SHRI SAJJAN JAIN IN ITS BOOKS OF ACCOUNT AND THAT THE HANDWRITING WAS ALSO NOT THE ASSESSEE'S/ NOT ITS EMPLOYEES. IT WAS FURTHER STATED THAT SINCE THE PAPER RELATED TO CONSTRUCTION EXPENSES IT BELONGED TO M/S GOYAL CONSTRUCTION WHO HAD DONE WORK FOR THE ASSESSEE BUT DUE TO STRAIN RELATIONSHIP THEREAFTER SHRI GOYA L HAD LEFT, WHICH WAS ALSO THE REASON WHY HE COULD NOT BE PRODUCED BEFORE THE AO. 7.4 I FIND THAT THE ASSESSEE HAD NOT DISOWNED THE SEIZED PAPER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN FACT IT WAS SLATED THEN THAT THE AMOUNT WAS PART OF THE TOTAL PAYMENT MADE TO M/S GOYAL CONSTRUCTION COMPAN Y. THIS IF CORRECT COULD HAVE BEEN CORROBORATED BY THE ASSESSEE WHICH WAS NOT DON E EVEN IF THE PARTY COULD NOT 7 BE PRODUCED FOR EXAMINATION. COPY OF THE ACCOUNT CO ULD HAVE BEEN PRODUCED WITH THE BOOKS BEFORE THE AO WHICH WAS NOT DONE. TH E SAID DOCUMENT WAS FOUND IN THE OFFICE PREMISES. THE AMOUNTS ARE CLEARLY WRITTE N AS ALSO THE DATES, AND THE NARRATIONS SHOW THAT PAYMENTS HAVE BEEN MADE FOR MA TERIAL, HYDRAULIC MOBILE OIL ETC. THE FACT THAT THE CONTRACTOR WORKED FOR THE AS SESSEE IS AN ADMITTED FACT. SO IT WAS PERTINENT ON THE PART OF THE ASSESSEE TO GIVE C OGENT EXPLANATIONS WHEN CALLED UPON BY THE AO, FAILING WHICH THE AO WAS WELL WITHI N HIS DOMAIN TO RAISE A PRESUMPTION THAT THE PAPER BELONGED TO THE ASSESSEE . THE DOCUMENT CANNOT BE SAID TO BE A DUMB DOCUMENT FURTHERMORE, TO DISOWN THE DO CUMENT AT THIS JUNCTURE AND TRYING TO THROW THE ONUS ON THE REVENUE IS JUST NOT ACCEPTABLE. HAVING CONSIDERED THE FACTS AS EMANATING FROM THE IMPUGNED ORDER AND THE CHANGE OF STANCE OF THE ASSESSEE IN APPEAL, I AM AFRAID THE CONTENTION NOW PUT FORTH AT BEST IS ONLY AN AFTER- THOUGHT THUS I HAVE NO REASON NOT TO CONFIRM THE AC TION OF THE AO. THE ASSESSEE FAILS ON THIS GROUND OF APPEAL. 8 THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CI T (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE AND CERTAIN PAYMENTS WERE MADE TO ONE M/S GOEL CONSTRUCTION CO. PVT. LTD., WHOSE COPY OF ACCOUNT IS PLACED AT PAGES 25 TOP 27 OF THE PAPER BOOK. THE SAID PAYMEN TS WERE MADE FROM 1.9.2006 TO 30.12.2006 APPROXIMATELY RS.61 LACS. T HE DOCUMENT FOUND FROM THE PREMISES OF THE ASSESSEE WAS HAND WRITTEN DOCUMENT. UNDER THE PROVISIONS OF SECTION 132(4) OF THE ACT, THE ISSUE IS WHETHER ANY QUERY WAS RAISED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS HAD RAISED QUERY TO THE ASSESSEE AND REPLY AGAINST THE SAME IS PLACED AT PAGE 19 OF THE PAPER BOOK. IT WAS CLARIFIED TO THE ASSESSING OFFICER THAT SHRI SAJJAN JAIN WAS EMPLOYEE OF M/S GOEL CONSTRUCTION COMPANY AND THE DOCUMENT BELO NGED TO THE SAID COMPANY, WHO WAS MAINTAINING THE PROJECT OFFICE AT SITE OF THE ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE FIRST ASPECT TO BE SEEN IS THAT THE ENTRIES RELATE TO THE PAYMENTS MAD E TO DIFFERENT CONTRACTORS WHICH ADMITTEDLY HAVE NOT BEEN ENGAGED BY THE ASSESSEE. FURTHER THE ASSESSING OFFICER AT PAGE 7 HAS NOTED T HAT THE ASSESSEE HAD 8 ASKED THE ASSESSING OFFICER TO SUMMON MR.GOEL BUT N O SUCH SUMMONS WERE ISSUED BY THE ASSESSING OFFICER. THE COPY OF THE LETTER IS PLACED AT PAGE 8 OF THE PAPER BOOK. DURING THE COURSE OF HEA RING, THE ASSESSEE FILED AN AFFIDAVIT WITH REGARD TO THE SAID FACTS. 9. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT (APPEALS). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. PURSUANT TO THE SEARCH OPERATION CARRIED OUT AT THE OFFICIAL AND RESIDENTIAL PREMISES OF THE ASSESSEE, CERTAIN DOCUM ENTS WERE FOUND DURING THE COURSE OF SEARCH AND THE ASSESSEE WAS AS KED TO EXPLAIN THE ENTRIES ON THE SAID DOCUMENTS. ONE SUCH DOCUMENT F OUND DURING THE COURSE OF SEARCH WAS PAGE NOS.82 AND 78 OF ANNEXURE -A-1 WHICH WERE HAND WRITTEN SHEETS SHOWING ACCOUNT OF SHRI SAJJAN JAIN, THE PAYMENTS IN CASH OR BY CHEQUES WITH DETAILS. THE EXPENDITURE O N THE SAID DOCUMENT TOTALED RS.12,30,767/-. THE SAID DOCUMENT IS SCAN NED AND IS PART OF THE ASSESSMENT ORDER AT PAGES 5 AND 6. THE PERUSAL OF THE SAID DOCUMENT REFLECTS THE EXPENDITURE BEING INCURRED BOTH IN CAS H AND BY CHEQUE AND THE PAYMENTS HAVING BEEN MADE FOR MATERIAL AND AGAI NST VARIOUS CONTRACTS ARE MADE IN CASH. THE CASE OF THE ASSESS EE IS THAT THE SAID DOCUMENT DOES NOT RELATE TO IT AND WAS NOT IN THE H AND WRITING OF THE ASSESSEE OR ANY OF ITS EMPLOYEES. THE ASSESSEE FUR THER STATED THAT THE SAID DOCUMENT BELONGS TO AN EMPLOYEE OF M/S GOEL CO NSTRUCTION COMPANY PVT. LTD. WHO WAS ASSOCIATED WITH THE ASSES SEE FOR CONSTRUCTION. THE COPY OF THE ACCOUNT OF THE SAID CONCERN IS PLACED AT PAGES 25 TO 27 OF THE PAPER BOOK AND THE PAYMENTS V ARIED BETWEEN 1.9.2006 TO 17.3.2007. THE PERUSAL OF THE SAID STA TEMENT REFLECTS THE ASSESSEE TO HAVE PAID RS.5,61,200/- MONTH-WISE AGAI NST CONSTRUCTION CHARGES TO THE SAID CONCERN. DURING THE COURSE OF ASSESSMENT 9 PROCEEDINGS THE ASSESSING OFFICER DID CONFRONT THE ASSESSEE WITH THE SAID DOCUMENT. THE ASSESSEE IN ITS REPLY DATED 18.11.20 11 PLACED AT PAGES 18 TO 21 OF THE PAPER BOOK WAS CONTENDED THAT PAGE NO. 82 RELATING TO THE CONSTRUCTION OF THE PROJECT SITE LOCATED AT BADDI, AGAINST WHICH THE ASSESSEE HAD ENGAGED THREE DIFFERENT CONTRACTORS IN WHICH MAIN CONTRACTOR WAS M/S GOEL CONSTRUCTION COMPANY PVT. L TD., WHO HAD MAINTAINED THE PROJECT OFFICE WITHIN THE SITE WHERE THE WORK WAS BEING CARRIED ON AND THE AMOUNTS MENTIONED ON THE SAID PA PER RELATED TO THE EXPENDITURE INCURRED BY HIM ON ACCOUNT OF CONSTRUCT ION CARRIED OUT BY HIM, FOR WHICH REGULAR PAYMENTS WERE MADE BY WAY OF CHEQUES. IT WAS FURTHER POINTED OUT BY THE ASSESSEE THAT NOTINGS ON THE SAID SHEETS LIKE HYDRAULIC MOBILE OIL, ETC. AND OTHER NOTINGS DEPICT S THE ACCOUNT MAINTAINED BY HIS MEN FOR THE PURPOSE OF PETTY CASH EXPENSES. DURING THE FINANCIAL YEAR 2006-07 THE PAYMENT TO THE EXTEN T OF RS.1.30 CRORES WAS MADE TO M/S GOEL CONSTRUCTION CO. PVT. LTD. A NOTHER REPLY WAS FILED BEFORE THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGE 28 OF THE PAPER BOOK IN WHICH THE ASSESSEE CLAIMED THA T IT HAD STRINGENT RELATIONS WITH MR.GOYAL AND DESPITE BEST EFFORTS HE COULD NOT BE PRODUCED FOR RECORDING HIS STATEMENT AND THE ASSESS ING OFFICER WAS REQUESTED TO EXERCISE HIS AUTHORITY AND SUMMON HIM TO VERIFY THE FACTS. THE ASSESSING OFFICER AT PAGE 7 OF THE ASSESSMENT O RDER ACKNOWLEDGED WRITTEN REPLY FILED BY THE ASSESSEE AND COMMENTED U PON THE STRINGENT RELATIONSHIP WITH MR.GOYAL AND INABILITY TO PRODUCE HIM. BUT NO REFERENCE IS MADE TO THE PLEA OF THE ASSESSEE THAT MR.GOYAL BE SUMMONED BECAUSE OF THE STRINGENT RELATIONS WITH THE ASSESSE E. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES WHERE THE ASSESSEE HAD CATE GORICALLY DENIED THAT THE SAID DOCUMENT DID NOT BELONG TO HIM AND HAD ALS O MADE CATEGORICAL STATEMENT TO THE FACT THAT THE DOCUMENT BELONGED TO SHRI SAJJAN JAIN, WHO HAD LINKS WITH M/S GOEL CONSTRUCTION CO.PVT. LTD. I .E. THE CONTRACTOR 10 WHO WERE ASSOCIATED WITH THE ASSESSEE FOR CARRYING ON THE CONSTRUCTION WORK. THE HAND WRITTEN NOTINGS ON SAID SHEETS ALSO REFLECTS THE LINKS ON ACCOUNT OF CONSTRUCTION AND THE ASSESSEE WAS NOT UN DERTAKING ANY CONSTRUCTION ON ITS OWN AND HAD EMPLOYED THREE DIFF ERENT CONTRACTORS FOR CARRYING OUT THE CONTRACT WORK AT HIS SITE. IN TH E ABOVE SAID CIRCUMSTANCES WHERE THE ASSESSEE HAS DISCHARGED HIS ONUS OF ESTABLISHING THAT HE WAS NOT ENGAGED IN ANY CONTRACT WORK BUT ON THE OTHER HAND HAD EMPLOYED CONTRACTORS FOR CARRYING OUT THE SAID WORK , THERE WAS NO MERIT IN HOLDING THAT THE SAID DOCUMENTS RELATED TO THE A SSESSEE. FURTHER THE ASSESSEE HAD ALSO CLAIMED THAT THE SAID HAND WRITTE N DOCUMENT DID NOT BELONG TO IT BUT IN FACT BELONGED TO AN EMPLOYEE OF M/S GOEL CONSTRUCTION CO.PVT. LTD. THE ASSESSING OFFICER HA D ASKED THE ASSESSEE TO PRODUCE SAID PERSON BUT BECAUSE OF THE STRINGENT RELATION WITH HIM, THE SAID PERSON COULD NOT BE PRODUCED. HOWEVER, THE AS SESSEE REQUESTED THE ASSESSING OFFICER TO SUMMON THE SAID PERSON AND REC ORD HIS STATEMENT. THE ASSESSING OFFICER FAILED IN HIS DUTY IN NOT SUM MONING THE SAID PERSON AND THUS NOT VERIFYING THE GENUINITY OF THE CLAIM MADE BY THE ASSESSEE. THOUGH UNDER SECTION 132(4) OF THE ACT T HE PRESUMPTION IS THAT THE DOCUMENT FOUND FROM THE PREMISES OF THE AS SESSEE BELONGED TO THE ASSESSEE BUT THE SAID PRESUMPTION IS REBUTTABLE ONE AS HELD BY VARIOUS COURTS. HOWEVER, FIRST ONUS IS UPON THE AS SESSEE TO ESTABLISH THE SAID DOCUMENT FOUND FROM HIS POSSESSION, DOES NOT B ELONG TO HIM. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAS TIME AN D AGAIN CLAIMED THAT THE SAID DOCUMENT WAS NOT IN HIS HAND WRITING OR IN THE HAND WRITING OF ANY OF THE EMPLOYEES AND SOME OF THE ENTRIES ON THE SAID SHEET RELATED TO CONTRACT BUSINESS AND THE ASSESSEE WAS NOT CARRYING ON ANY CONTRACT BUSINESS, THE SAID DOCUMENT DOES NOT BELONG TO THE ASSESSEE. THE ASSESSEE ALSO POINTED OUT THAT THE SAID DOCUMENT BE LONGED TO M/S GOEL CONSTRUCTION CO.PVT LTD. AND/OR HIS EMPLOYEE SHRI S AJJAN JAIN, WHO IN 11 TURN WAS OPERATING FROM THE SITE OF THE ASSESSEE AN D HAD CREATED TEMPORARY OFFICE AT THE SAID SITE. IN THE ABOVE FA CTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS F AILED TO DISCHARGE HIS ONUS IN NOT SUMMONING THE SAID MR.GOYAL TO ESTABLIS H THE NATURE OF THE TRANSACTION I.E. THE NATURE OF HAND WRITTEN ENTRIES . IN THE ABSENCE OF THE SAME THE ASSESSEE COULD NOT BE BURDENED WITH THE EN TRIES ON THE SAID SEIZED DOCUMENTS. WE FIND NO MERIT IN THE AFORESAI D ADDITION MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF ENTRIES O N HAND WRITTEN SHEET WHICH DID NOT BELONG TO HIM. ONCE THE ASSESSEE IS NOT CARRYING ON ANY CONSTRUCTION WORK, THEN THE NATURAL COROLLARY IS TH AT IT WOULD NOT MAKE ANY PAYMENT FOR THE PURPOSE OF CONSTRUCTION AND WHE N HAND WRITTEN SHEET DEPICTED CONSTRUCTION PAYMENTS, THE SAME COULD NOT BE TREATED AS THE DOCUMENT BELONGING TO THE ASSESSEE. FURTHER THE AS SESSEE CLEARLY POINTED OUT THAT THE NAME OF THE PERSON ON THE SAID SHEET W AS MR.SAJJAN JAIN, WHO WAS EMPLOYEE OF M/S GOEL CONSTRUCTION CO.PVT. L TD. AND THE SAID FACTS COULD HAVE BEEN VERIFIED BY THE ASSESSING OFF ICER, BUT THE ASSESSING OFFICER HAD FAILED TO DISCHARGE HIS ONUS AND IN THE SAID CIRCUMSTANCES THERE IS NO MERIT IN THE ADDITION MAD E IN THE HANDS OF THE ASSESSEE. FURTHER THE ASSESSEE HAS ALSO FILED AFFI DAVIT TO THE EFFECT THAT THE SAID DOCUMENT WAS NOT IN HIS HAND WRITING OR IN THE HAND WRITING OF HIS EMPLOYEES AND ALSO SHRI SAJJAN JAIN WAS NOT IN HIS EMPLOYMENT AND BELONGED TO M/S GOEL CONSTRUCTION CO.PVT. LTD. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, WE DELETE THE ADDITION OF RS.12,30,767/-. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS ALL OWED. 11. THE ISSUE IN GROUND NO.3 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION OF RS.5 LACS. THE BRIEF FACTS RELATING T O THE ISSUE ARE THAT ANOTHER DOCUMENT AT PAGE 57 OF ANNEXURE-2 WAS SEIZE D FROM THE BUSINESS PREMISES OF THE ASSESSEE. THE SAID DOCUMENT WAS HA ND WRITTEN AND 12 REFLECTED TRANSACTION IN CHEQUES AND CASH RECEIVED FROM S/SHRI CHARANJIT LAL AND RAHUL CHHABRA. THE ASSESSEE WAS ASKED TO GIVE COMPLETE TRANSACTION AND ALSO TO RECONCILE THE SAME. VIDE R EPLY DATED 18.11.2011 IT WAS STATED BY THE ASSESSEE THAT THE PAYMENT OF S HRI RAHUL CHHABRA WERE NOT REGULAR AND SINCE THE CHEQUES BOUNCED, HE OFFERED TO PAY RS.5 LACS AS CASH. IT WAS FURTHER SUBMITTED THAT SHRI C HHABRA BACKED OUT AND THE PAYMENT OF RS.5 LACS WAS NEVER MADE. THE ASSES SING OFFICER NOTED THAT THE SAID FACT DOES NOT SUPPORT THE CONTENTION OF THE ASSESSEE AS THE CHEQUE PAYMENTS WERE SHOWN AT RS.7,89,760/- AND ANO THER CASH PAYMENT OF RS.5 LACS THE TOTAL PAYMENT BEING RS.12,89,760/- . CONSEQUENTLY SUM OF RS.5 LACS WAS TREATED AS UNDISCLOSED INCOME OF T HE ASSESSEE. 12. THE CIT (APPEALS) UPHELD THE ADDITION OF RS.5 L ACS AS THE ASSESSEE HAD FAILED TO FURNISH ANY PROOF THAT THE CHEQUES IS SUED BY SHRI CHHABRA HAD BOUNCED AGAIN AND AGAIN. THE CIT (APPEALS) FUR THER HELD AS UNDER : EVEN IF ASSUMING THAT THE CHEQUE OF RS. 2 LAKHS BO UNCED AGAIN AND AS SUCH PAYMENT RECEIVABLE REMAINED AT RS.7,84,760/- WITH BALANCE P AYMENT DUE OF RS.7,51,340/- THE FIGURES DO NOT CORRELATE IN AS MUCH AS THE FIGURE I N THE RIGHT HAND SIDE SHOULD HAVE BEEN RS. 7,89,760/- LESS RS. 2 LAKHS FOR RE-DETERMINING THE EXACT DUES FROM SH. CHABBRA. FURTHERMORE, IF THESE PAYMENTS REFLECTED IN THE PAP ER AGAINST SHRI CHABBRA AS WELL AS THE OTHER THREE PERSONS WHOSE NAMES ALSO FIGURE THEREIN, WERE RECORDED IN THE BOOKS AS CLAIMED, THEN THE SAME COULD HAVE BEEN SHOWN TO THE AO. THIS EXERCISE WOULD HAVE PROVED ITS CASE. THEREFORE CONSIDERING THE DISCUSSION ABOVE AND THE FACT THAT THE CONTENTIONS OF THE ASSESSEE HAVE NOT BEEN SUBSTANTI ATED, THE ACTION OF THE AO IN ADDING THE SAME IS CONFIRMED. THE ASSESSEE FAILS IN THIS GROUND. 13. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT DESPITE CLAIM OF THE ASSESSEE NO ENQUIRY WAS MADE BY THE ASSESSING O FFICER AND THE CIT (APPEALS) AND HENCE THERE WAS NO MERIT IN THE SAID ADDITION. 14. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANC E ON THE ORDER OF THE CIT (APPEALS). 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAS PLACED AT PAGE 24 OF THE PAPER BOOK TH E COPY OF THE SEIZED 13 DOCUMENT I.E. PAGE NO.57 OF ANNEXURE-A-2. THERE WE RE VARIOUS ENTRIES ON THE SAID DOCUMENT IN RESPECT OF ONE SHRI CHARANJ IT LAL AND OTHERS RELATING TO SHRI RAHUL CHHABRA. ON THE RIGHT SIDE OF THE SAID DOCUMENT THERE IS TOTALING OF RS.7,89,760/ AND ON THE OTHER SIDE THERE IS FIGURE OF RS.5 LACS AND THERE IS TOTALING OF RS.12,89,760/-. AFTER THAT THERE IS MENTION OF CASH OF RS.7 LACS AND ON THE LEFT SIDE T HERE IS FIGURE OF RS.,89,760/- TO WHICH RS.1,95,000/- HAS BEEN ADDED AND TOTALED TO RS.,9,84,760/-, WHICH IS ADJUSTED AGAINST RS.15,36, 100/- AND BALANCE OF RS.7,84,760/- AND ALSO ANOTHER FIGURE OF RS.7,51,34 0/- IS MENTIONED. THE ASSESSEE HAD FURNISHED REPLY BEFORE THE ASSESSI NG OFFICER AND THE SAME REPLY WAS REPRODUCED BEFORE THE CIT (APPEALS) AS PART OF THE WRITTEN SUBMISSIONS WHICH ARE REPRODUCED BY THE CIT (APPEALS) AT PAGES 8 AND 9 OF THE APPELLATE ORDER. THE TRANSACTION WI TH SHRI RAHUL CHHABRA AND SHRI CHARANJIT LAL WAS IN RESPECT OF FLAT PURCH ASED BY THEM IN HILL VIEW-I, AS STATED BY THE ASSESSEE IN HIS STATEMENT. THE PLEA OF THE ASSESSEE WAS THAT THE CUSTOMERS HAD COME TO THE OFF ICE TO RECONCILE THEIR RESPECTIVE ACCOUNTS BUT SINCE CHEQUES OF RC WERE CO NTINUOUSLY RETURNING UNPAID AND AFTER DISCUSSION HE OFFERED RS.5 LACS CA SH AS MENTIONED ON THE SAID PAGE BUT ACTUALLY HE AGAIN BACKED OUT. TH E ASSESSEE IN THE SAID REPLY FURTHER STATED THAT THIS FACT COULD BE PROVED FROM THE ENTRIES ON THE LEFT SIDE OF THE PAGE WHERE IT IS NOTED THAT HE HAD BEEN ALLOTED FLAT FOR RS.15,36,100/- AND HE HAD ONLY MADE PAYMENT OF RS.7 ,89,760/- AND BALANCE PAYMENT DUE WAS RS.7,46,340/- AND HE HAD PA ID ANOTHER SUM OF RS.1,95,000/-. THE ASSESSEE FURTHER CLAIMED THAT A S THE CHEQUES OF RS.2 LACS AGAIN BOUNCED AND THE BALANCE PAYMENT REMAINED AT RS.7,51,340/-. THOUGH THE ASSESSEE HAD TRIED TO RECONCILE THE ENTR IES BUT HAS FAILED TO ESTABLISH ITS CASE. THE SAID DOCUMENT CLEARLY REFL ECTS THAT THERE IS CASH OF RS.5 LACS AND COMMISSION OF NIL. HE ALSO MENTI ONED AGAINST THE AMOUNTS RECEIVED FROM RC TOTALING RS.7,89,760/-, ON THE RIGHT SIDE OF 14 THE DOCUMENT. WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE IN THIS REGARD AND IN THE ABSENCE OF THE ASSESSEE HAVING FU RNISHED ANY EVIDENCE TO PROVE ITS CASE THAT SUM OF RS.5 LACS WAS OFFERED AGAINST CHEUQES BEING DISHONOURED, DOES NOT ESTABLISH THE CASE OF THE ASS ESSEE. IN CASE THE CHEQUES WERE BEING DISHONOURED THEN HOW THE TOTAL O F RS.7,89,760/- HAS BEEN TAKEN AND IT DOES NOT TALK OF ANY DISHONOUR OF CHEQUES. IN THE ABSENCE OF ANY EVIDENCE FILED TO PROVE ITS CASE WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE AND WE UPHOLD THE ADDITION OF RS.5 LACS IN THE HANDS OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. THE GROUND NO.3 RAISED BY THE ASSESSEE IS THUS DISMISSED. ITA 548/CHD/2013 :: ASSESSEE'S APPEAL A.Y. 2008-09 16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 1995000 /- MADE BY THE LEARNED ASSESSING OFFICER AS PER PARA 6 OF THE ASSESSMENT O RDER. THE ADDITION WAS MADE ON THE BASIS OF ENTRIES CONTAINED IN SEIZED PAPERS A-L PAGE 44. EVEN ON THE FACTS OF THE CASE THE ADDITION AS MADE WAS NOT WARRANTED BECAUSE THIS PAPER A-L PAGE 44 WAS OWNED AND HAD DULY BEEN CONSIDERED BY SH. J. C BANSAL WHO HAS FILED THE PETITION BEFORE THE HON'BLE SETTLEMENT COMMISSI ON. THE PETITION AS FILED HAS SINCE BEEN ADMITTED BY THE HON'BLE SETTLEMENT COMMI SSION. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEAL) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 511373/ - MADE BY THE LEARNED ASSESSING OFFICER ON PROTECTIVE BASIS AS PER PARA 7 OF THE ASSESSMENT ORDER. THE ADDITION WAS MADE ON THE BASIS OF ENTRIES CONTA INED IN SEIZED PAPERS PAGES 46 &. 47 OF A-L. EVEN ON THE FACTS OF THE CASE THE ADDITION AS MADE WAS NOT WARRANTED BECAUSE PAGES 46 &. 47 WERE OWNED & HAD DULY BEEN CONSIDERE D BY SH. J.C BANSAL WHO HAS FILED THE PETITION BEFORE THE HON'BLE SETTLEMEN T COMMISSION. THE PETITION AS FILED HAS SINCE BEEN ADMITTED BY THE HON'BLE SETTLE MENT COMMISSION. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE NON ALLOWANCE OF DEDUCT ION U/S 8'OIB ON A SUM OF RS. 17000000/- DECLARED DURING THE COURSE OF SURVEY . DURING THE COURSE OF SURVEY & LATER ON DURING THE C OURSE OF SEARCH NO OTHER SOURCE OF INCOME BY THE ASSESSEE HAD BEEN IDENTIFIE D EXCEPT THAT THE APPELLANT IS ENGAGED IN THE REAL ESTATE. 17. THE ISSUE IN GROUND NO. 1 & 2 RAISED BY THE ASS ESSEE IS AGAINST THE ADDITION OF RS. 19,95,000/- AND RS. 5,11,373/-. BOT H ADDITIONS WERE MADE IN THE HANDS OF THE ASSESSEE BUT THE ASSESSEE PLEAD S THAT THE SAID AMOUNTS 15 HAVE BEEN CONSIDERED BY SHRI J.C.BANSAL IN HIS COMP UTATION FILED BEFORE THE HON'BLE SETTLEMENT COMMISSION. 18. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF SEARCH CARRIED OUT AT THE PREMISES OF THE ASSESSEE AND THE RESIDENTIAL PREMISES OF THE DIRECTORS, CERTAIN DOCUMENTS WERE F OUND AND SEIZED. PAGE NO. 44 OF ANNEXURE A-1 WAS SEIZED FROM RESIDEN CE OF SHRI J.C.BANSAL, H.NO. 2048, SECTOR 15, CHANDIGARH. THES E DOCUMENTS RELATE TO RECEIPTS AND PAYMENTS BY THE BANSAL GROUP. PAGE 44 CONTAINS ACCOUNT OF SARASWATI TRUST GOHANA WHILE PAGES 46 AND 47 ARE ACCOUNTS OF MAA SARASWATI TRUST. THE SCANNED COPIES OF THE DOCUMEN TS ARE REPRODUCED BY THE ASSESSING OFFICER AT PAGE 3 OF THE ASSESSMENT O RDER. THE SAID DOCUMENTS WERE CONFRONTED TO SHRI J.C.BANSAL AND HI S STATEMENT WAS RECORDED ON 27.07.2009 ON OATH UNDER SECTION 132( 4) OF THE ACT. THE ASSESSING OFFICER HAS REPRODUCED THE RELEVANT EXTRA CT OF THE STATEMENT AT PAGES 3 & 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER NOTED THAT FROM THE SAID DOCUMENT, CERTAIN AMOUNTS WERE INVEST ED BY THE ASSESSEE BEFORE US IN M/S SARASWATI EDUCATIONAL &WELFARE TRU ST, TOTALING RS. 19,95,000/-. THE ASSESSING OFFICER ASKED THE ASSES SEE TO FURNISH THE EVIDENCE AS TO WHETHER THE ENTRIES WERE REFLECTED I N THE BOOKS OF ACCOUNT. THE ASSESSEE WAS ALSO ASKED TO FURNISH THE SOURCE OF INVESTMENT IN M/S SARASWATI EDUCATIONAL & WELFARE TRUST. THE ASSESSEE STATED THAT AFTER TAKING INTO CONSIDERATION THE COMMON ENTRIES ON THE SAID PAGES, A SUM OF RS. 3,45,000/- WAS UNACCOUNTED INVESTMENT AN D FOR THIS PURPOSE, SUM OF RS. 5 LAC WAS OFFERED IN THE HANDS OF SHRI J .C.BANSAL DURING ASSESSMENT YEAR 2008-09 BY WAY OF APPLICATION BEFOR E THE HON'BLE SETTLEMENT COMMISSION. THE ASSESSING OFFICER REJEC TED THE PLEA OF THE ASSESSEE AS NO EVIDENCE WAS FILED TO PROVE THAT THE RECEIPTS/ENTRIES APPEARING ON PAGE 44 WERE PART OF PAGES 46 AND 47. THE SAID DOCUMENT 16 WAS ALSO CONFRONTED TO SHRI J.C.BANSAL AND HE STATE D THAT THE PAPER CONTAINS ENTRIES RELATING TO INVESTMENT MADE BY US ON M/S SARASWATI EDUCATIONAL TRUST, OUT OF WHICH SOME OF THE ENTRIES ARE RECORDED IN THE BOOKS OF ACCOUNT AND SOME ARE NOT RECORDED. THE AS SESSING OFFICER, THUS HELD THAT THE PLEA OF THE ASSESSEE THAT PAGE N O. 44 WAS EXTRACT OF PAGE NO. 46-47 WAS AN AFTERTHOUGHT AND COULD NOT BE RELIED UPON AS THE ASSESSEE HAD MADE AN INVESTMENT OF RS. 19,95,000/- WHICH WAS NOT RECORDED IN ITS BOOKS OF ACCOUNT, THE SAID SUM WAS ADDED AS UNDISCLOSED INCOME UNDER SECTION 69 OF THE INCOME TAX ACT. 19. THE ENTRIES AT PAGE 46 AND 47 OF ANNEXURE A-1 S EIZED FROM THE RESIDENCE OF SHRI J.C.BANSAL RELATED TO RECEIPT AND PAYMENTS BY THE BANSAL GROUP, THE SCANNED COPIES OF THE SAID DOCUME NTS ARE REPRODUCED BY THE ASSESSING OFFICER AT PAGES 6 AND 7 OF THE AS SESSMENT ORDER. SIMILAR EXERCISE OF CONFRONTING THE SAME DOCUMENTS TO SHRI J.C.BANSAL FROM WHOSE POSSESSION THE SAID DOCUMENTS WERE FOUND , WAS CARRIED OUT AND HE ACCEPTED THAT THE PAPERS CONTAIN ENTRIES REL ATING TO INVESTMENT MADE BY US N M/S SARASWATI EDUCATIONAL AND SOCIAL W ELFARE TRUST. HE FURTHER STATED THAT HE HAD SURRENDERED A SUM OF RS. 1 CR AS HIS ADDITIONAL INCOME FOR FINANCIAL YEAR 2008-09 AND 2009-10 ON TH E BASIS OF ENTRIES RECORDED ON THE SAID PAPER AND ALSO ON THE BASIS OF ANNEXURE A-1 PAGE 44 SEIZED FROM HIS RESIDENCE AND AS A GROUP THEY HA D ALSO SURRENDERED SUM OF RS. 2 CR OVER A PERIOD OF TWO YEARS. THE AS SESSING OFFICER, HOWEVER NOTED THAT SUM TOTALING RS. 15,11,373/- WAS INVESTED BY M/S HILL VIEW INFRASTRUCTURE PVT. LTD. AND THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES. IN REPLY THE ASSESSEE FURNISHED COPY OF ACCOUNT WHICH REVEALED A SUM OF RS. 10 LACS HAD BEEN REFLECTED IN THE BOOKS OF ACCOUNT THROUGH CHEQUE. HOWEVER, NO DETAILS WERE FURNISHED IN RESPECT OF THE BALANCE SUM OF RS.5,11,373/-. THE ASSESSING OFFIC ER THUS, OBSERVED 17 THAT THE SAID INVESTMENT HAS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HOWEVER, HE FURTHER NOTED THAT THE T RUST I.E. MAA SARASWATI EDUCATIONAL & WELFARE TRUST AND SHRI J.C. BANSAL HAD FILED APPLICATION BEFORE THE SETTLEMENT COMMISSION AND TH E MATTER HAD TO BE DECIDED BY THE SETTLEMENT COMMISSION. HOWEVER, TO PROTECT THE INTEREST OF REVENUE, SUM OF RS. 511,373/- WAS ADDED TO THE T AXABLE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME UNDER SECTION 69 OF THE ACT. 20. THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE P ARA 14 HAS ADJUDICATED THE ISSUE ON ADDITION OF RS. 19,95,000/ - AND IN PARA 15 HAS ADJUDICATED THE ISSUE RELATING TO RS. 511,373/-.THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER REJECTING THE PLEA OF THE ASSESSEE THAT PAGE NO. 44 WAS PART AND PARCEL OF PAGE NO. 46 AND 47 OF ANNEXURE A-1 AND FURTHER HELD THAT THERE WAS NO INDICATION IN THE STATEMENT RECORDED OF SHRI J.C.BA NSAL THAT THE PAGES 44, 46 AND 47 WERE INTER-LINKED AND THEY WERE COMMON EN TRIES. THE COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT BOT H THE DOCUMENTS WERE SEPARATELY TACKLED BY THE SAID SHRI J.C.BANSAL , FROM WHOSE POSSESSION THESE WERE FOUND. THE PLEA OF THE ASSESS EE THAT THE SAID AMOUNTS HAD BEEN OFFERED IN THE SETTLEMENT PETITION WAS NOT ACCEPTED AS NO FINAL ORDER HAD BEEN PASSED IN THE CASE. SIMILA RLY, THE ADDITION OF RS. 511,373/- MADE ON PROTECTIVE BASIS WAS ALSO UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 21. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT MA A SARASWATI EDUCATIONAL & WELFARE TRUST HAD FILED A SETTLEMENT PETITION AND HAD OFFERED THE SAID SUM AS PART OF ITS ADDITIONAL INCO ME BEFORE THE SETTLEMENT COMMISSION. THE LD. AR FOR THE ASSESSEE REFERRED TO THE ORDER OF SETTLEMENT COMMISSION FILED AT PAGES 38 TO 60 OF THE PAPER 18 BOOK AND POINTED OUT THAT THE TRUST HAD OFFERED RS. 1.50 CR AS ADDITIONAL INCOME AND SHRI J.C.BANSAL HAD PAID RS. 40 LACS IN ADDITION TO THE ADDITIONAL INCOME OF RS. 22.50 LACS. 22. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 23. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. SEARCH ON THE PREMISES OF THE ASSESSEE WAS CONDUCTE D AND ALSO ON THE RESIDENTIAL PREMISES OF THE DIRECTOR OF THE ASSESSE E COMPANY. CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE RESIDENCE OF THE DIRECTOR, SHRI J.C.BANSAL, WHICH REFLECTED CERTAIN INVESTMENTS BEING MADE BY THE ASSESSEE BEFORE US. THE ASSESSING OFFI CER CONFRONTED THE SAID DOCUMENTS TO THE ASSESSEE AND SHOW CAUSED THE ASSESSEE TO EXPLAIN THE SOURCES OF THE SAID ENTRIES AND ALSO WHETHER TH E SAID ENTRIES WERE RECORDED IN THE BOOKS OF ACCOUNT REGULARLY MAINTAIN ED BY THE ASSESSEE. IN RESPECT OF THE FIRST DOCUMENT I.E. PAGE NO. 44 O F ANNEXURE A-1 FOUND FROM THE RESIDENCE OF SHRI J.C.BANSAL, THE CLAIM OF THE ASSESSEE WAS THAT IT HAD CERTAIN OVER-LAPPING ENTRIES AND WAS PART AN D PARCEL OF PAGES NO. 46-47 OF ANNEXURE A-1 SEIZED FROM RESIDENCE OF SHRI J.C.BANSAL. THE PLEA OF THE ASSESSEE IN THIS REGARD WAS NOT ACCEPTE D BY THE ASSESSING OFFICER AND ADDITION OF RS. 19,95,000/- WAS MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF THE NOTINGS RELATABLE TO THE ASSESSEE ON THE SAID DOCUMENT NO. 44 OF ANNEXURE A-1. FURTHER, ANOTHER ADDITION ON PROTECTIVE BASIS WAS MADE ON ACCOUNT OF NOTINGS AT PAGES NO. 46-47 OF ANNEXURE A-1 FOUND FROM THE RESIDENCE OF SHRI J.C.B ANSAL. THE ENTRIES ON THE SAID DOCUMENTS TOTALED TO RS. 15,11,373/-. HOWEVER, SUM OF RS. 10,00,000/- WAS REFLECTED IN THE BOOKS OF ACCOUNT O F THE ASSESSEE AND HENCE, ADDITION OF RS. 5,11,373/-WAS MADE ON PROTEC TIVE BASIS IN THE HANDS OF THE ASSESSEE, AS THE ASSESSEE CLAIMED THAT THE SAID INCOME WAS 19 OFFERED AS ADDITIONAL INCOME BY THE TRUST. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT IN THE STATEMENT OF FACTS FILED BE FORE THE SETTLEMENT COMMISSION ALSO, IT WAS POINTED OUT THAT PAGE NO. 4 4 OF ANNEXURE A-1 SEIZED FROM THE RESIDENCE OF DIRECTOR WAS PART AND PARCEL OF PAGE NO. 46 AND 47 OF ANNEXURE A-1 SEIZED FROM HIS RESIDENCE. OUR ATTENTION WAS DRAWN TO PAGE 36 OF THE PAPER BOOK WHERE SAID FACT IS NOTED. THE LD. AR FOR THE ASSESSEE FURTHER POINTED OUT THAT AT PAGES 38 TO 60 OF THE PAPER BOOK, COPY OF ORDER PASSED UNDER SECTION 245D(4) OF THE ACT IN THE CASE OF MAA SARASWATI EDUCATIONAL AND SOCIAL WELFARE TRU ST PASSED BY THE INCOME TAX SETTLEMENT COMMISSION, NEW DELHI ON 10.0 5.2013, IS ENCLOSED. AT PAGE 47 OF THE PAPER BOOK VIDE PARA 4 .2, THE HON'BLE SETTLEMENT COMMISSION HAD NOTED THE CLAIM OF THE AS SESSEE THAT IN THE SEIZED DOCUMENTS, THERE WERE CERTAIN ENTRIES WHICH WERE EITHER IN DUPLICATE OR IN TRIPLICATE AND THE COMMISSIONER OF INCOME TAX WAS DIRECTED TO VERIFY THE CONTENTION OF THE ASSESSEE. BUT IN THE REPORT DATED 22.11.2012, THE DEPARTMENT VIRTUALLY REFUSED TO EXA MINE THE CONTENTIONS OF THE APPLICANT AND HAD ADHERED TO SHORT WORKING O F THE UNDISCLOSED INCOME. THE COMMISSIONER OF INCOME TAX WAS AGAINST DIRECTED BY THE BENCH TO VERIFY THE CONTENTION OF THE APPLICANT. I N THE REPORT DATED 16.01.2013, THE COMMISSIONER OF INCOME TAX STUCK TO HIS WORKING OF UNDISCLOSED INCOME. THEREAFTER THE COMMISSIONER OF INCOME TAX (INVESTIGATION) VERIFIED THE CLAIM OF THE ASSESSEE AND IT WAS MENTIONED IN THE REPORT DATED 08.04.2013 THAT THERE WAS EITHER D UPLICATION OR TRIPLICATION OF ENTRIES ON FOUR DIFFERENT SETS OF P APERS. THE SAID ORDER OF THE SETTLEMENT COMMISSION FURTHER DEALS WITH VARIOU S ENTRIES AT PAGES 46 & 47 OF ANNEXURE A-1. THE SETTLEMENT COMMISSION VI DE PARA 5 HAD CONSIDERED PAGES 46 AND 47 OF ANNEXURE A-1 FOR CALC ULATING THE UNDISCLOSED INCOME OF THE TRUST FOR THE ASSESSMENT YEAR 2008-09. THE REVISED WORKING WAS TABULATED AT PAGES 48 AND 49 OF THE PAPER BOOK AND 20 THE UNDISCLOSED INCOME OF THE TRUST WAS CALCULATED AT RS. 1.72 CR FOR ASSESSMENT YEAR 2008-09. FOR ASSESSMENT YEAR 2009- 10 AND 2010-11 ALSO SIMILAR WORKING WAS CARRIED OUT. 24. IN THE ENTIRETY OF THE ABOVESAID FACTS AND CIRC UMSTANCES, WHERE THE APPLICANT HAD ALSO OFFERED ADDITIONAL INCOME BEFORE THE SETTLEMENT COMMISSION IN THE HANDS OF MAA SARASWATI EDUCATIION AL AND SOCIAL WELFARE TRUST, WE FIND NO MERIT IN THE SO CALLED AD DITION MADE IN THE HANDS OF THE ASSESSEE TOTALING RS. 19,95,000/-. AC CORDINGLY, WE DIRECT ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 19, 95,000/-. FURTHER ADDITION OF RS. 5,11,373/- WAS MADE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. IN VIEW OF THE SETTLEMENT PETITI ON HAVING BEEN FILED BY SHRI J.C.BANSAL BEFORE THE SETTLEMENT COMMISSION, T HE SETTLEMENT COMMISSION HAS ALREADY DECIDED THE ISSUE IN THE HAN DS OF MAA SARASWATI EDUCATIIONAL AND SOCIAL WELFARE TRUST AND WHICH ALS O INCORPORATES THE ADDITIONAL INCOME OFFERED BY SHRI J.C.BANSAL AND FU RTHER BEING ASSESSED IN HIS HANDS. IN VIEW THEREOF, WE FIND NO MERIT IN THE SAID ADDITION OF RS. 511,373/- AND THE SAME IS DIRECTED TO BE DELETE D. GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE THUS ALLOWED. 25. THE GROUND NO. 3 RAISED BY THE ASSESSEE IS AGAI NST ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN NON-ALLOWAN CE OF DEDUCTION UNDER SECTION 80IB OF THE ACT AT THE AMOUNT DECLARE D DURING THE COURSE OF SURVEY AS ADDITIONAL INCOME AMOUNTING TO RS.1.70 CR. 26. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN NATIONAL LEGGUARD WO RKS VS CIT AND ANOTHER (2007) 288 ITR 18, M/S TUDOR KNITTING WORKS PVT. LTD. VS CIT ITA NO. 440 OF 2010 (O&M) ORDER DATED 08.08.2013 (P &H), M/S KIM 21 PHARMA (P) LTD. V CIT ITA NO. 106 OF 2011 (O&M) ORD ER DATED 27.04.2011 (P&H). 27. THE LD. AR FOR THE ASSESSEE, HOWEVER SUBMITTED THAT THE HON'BLE GUJRAT HIGH COURT IN CIT VS SHILPA DYEING & PRINTIN G MILLS (P) LTD. (2013) 39 TAXMAN 3 (GUJRAT) HAD DISTINGUISHED ITS D ECISION LAID DOWN EARLIER AND HELD THAT WHERE INCOME IS DECLARED IN S URVEY, THEN THE SAME HAS TO BE TAXED UNDER ONE OF THE HEADS UNDER SECTIO N 14 AND CAN NOT BE TAXED SEPARATELY. 28. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURING T HE COURSE OF SURVEY AT HIS PREMISES, THE ASSESSEE HAD OFFERED ADDITIONAL I NCOME OF RS.1.70 CR ON WHICH THE ASSESSEE HAD CLAIMED THE DEDUCTION UND ER SECTION 80IB OF THE ACT. WE FIND THAT SIMILAR ISSUE OF CLAIM OF DE DUCTION UNDER CHAPTER VI-A OF THE INCOME TAX ACT AROSE BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT IN NATIONAL LEGGUARD WORKS VS CIT & ANOT HER (SUPRA) WHEREIN IT WAS HELD THAT IN CASE OF AMOUNTS SURREND ERED, THE BURDEN WAS ON THE ASSESSEE TO PROVE THAT THE AMOUNT REPRESENTE D PROFITS ON WHICH DEDUCTION WAS PERMISSIBLE UNDER CHAPTER VI-A. THE DEDUCTION IN THE SAID CASE WAS CLAIMED UNDER SECTION 80HHC OF THE AC T. 29. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN M/S TUDOR KNITTING WORKS PVT. LTD. VS CIT (SUPRA) IN CASE OF SURRENDER ED INCOME AND CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT HAD UPHE LD THE ORDER OF TRIBUNAL WHICH IN-TURN HAD APPLIED THE RATIO LAID D OWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN NATIONAL LEGGUARD WO RKS VS CIT & ANOTHER (SUPRA). THE HON'BLE HIGH COURT HAD UPHELD THE ORDER OF TRIBUNAL IN VIEW OF THE RATIO LAID DOWN BY THE HON' BLE PUNJAB & HARYANA HIGH COURT IN HOME TEX VS CIT (2011) 59 DTR JUDGEME NTS 165 AND ALSO 22 IN NATIONAL LEGGUARD WORKS VS CIT & ANOTHER (SUPRA) . IN THE CASE OF HOME TEX VS CIT (SUPRA), THE DEDUCTION WAS CLAIMED UNDER SECTION 80IB OF THE ACT ON THE SURRENDERED INCOME ON ACCOUNT OF EXCESS STOCK FOUND ON PHYSICAL VERIFICATION. 30. THE LD. AR FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HON'BLE GUJRAT HIGH COURT IN CIT VS SHILPA DYEING & PRINTING MILLS (P) LTD.(SUPRA) FOR THE PROPOSITION THAT THE ADDITIONAL INCOME DECLARED CONSEQUENT TO THE SURVEY HAS TO BE ASSESSED AS INCO ME UNDER ONE OF THE HEADS OF INCOME UNDER SECTION 14 OF THE ACT AND COU LD NOT BE TAXED SEPARATELY. EARLIER THE HON'BLE GUJRAT HIGH COURT IN FAKIR MOHMED HAJI HASAN VS CIT 247 ITA 247 ITR 290 (GUJ) HAD HELD THA T THE ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE IS TO BE ASSESSE D UNDER SECTION 69, 69A, 69B AND/OR 69C OF THE ACT AND THE SAID DECISIO N OF HON'BLE GUJRAT HIGH COURT HAS BEEN APPLIED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN M/S KIM PHARMA (P) LTD. V CIT (SUPRA) AND IT HAS BEEN HELD THAT THE SURRENDERED INCOME CANNOT FORM PART OF THE BUSINESS INCOME AND IT IS TO BE TAXED AS DEEMED INCOME AGAINST WHICH TH E BUSINESS LOSSES COULD NOT BE SET OFF. IN VIEW OF THE RATIO LAID DO WN BY THE JURISDICTIONAL HIGH COURT IN M/S KIM PHARMA (P) LTD. V CIT (SUPRA) WE FIND NO MERIT IN THE PLEADINGS OF THE LD. AR FOR THE ASSESSEE AND THE RELIANCE ON THE RATIO LAID DOWN BY THE HON'BLE GUJRAT HIGH COURT IN CIT VS SHILPA DYEING & PRINTING MILLS (P) LTD.(SUPRA) IS MISPLACE D. IN VIEW OF THE RATIO BEING SETTLED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE IN NATIONAL LEGGUARD WORKS VS CIT AND ANOTHER (SUPRA), M/S TUDOR KNITTING WORKS PVT. LTD. VS CIT (SUPRA), M/S KIM PH ARMA (P) LTD. V CIT (SUPRA) WE HOLD THAT THE ASSESSEE IS NOT ENTITL ED TO THE DEDUCTION UNDER SECTION 80IB OF THE ACT ON THE SURRENDERED IN COME OF RS.1.70 CR. GROUND OF APPEAL NO. 3 RAISED BY THE ASSESSEE IS TH US, DISMISSED. 23 ITA NO. 549/CHD/2013 :: ASSESSEE'S APPEAL :: A.Y. 2009-10 31. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN LAW AND FACTS IN UPHOLDING ADDITION OF RS. 59,43,11 5/- OUT OF THE TOTAL ADDITION OF RS. 128,68,362/- MADE BY THE LD. ASSESS ING OFFICER AS PARA 5 OF THE ORDER. THE ADDITION WAS MADE BY WRONGLY INT ERPRETING THE SEIZED DOCUMENTS AS PER PAGE 14 OF THE ORDER. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS. 4800 00/- MADE BY THE LD. ASSESSING OFFICER AS PER PARA 6 OF THE ASSESSING OF FICER. 32. THE GROUND NO. 2 RAISED BY THE ASSESSEE IS NOT PRESSED HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 33. THE ONLY ISSUE RAISED VIDE GROUND NO. 1 IS AGAI NST THE UPHOLDING OF ADDITION OF RS. 59,43,115/- OUT OF TOTAL ADDITION O F RS.1.28 CR BASED ON THE SEIZED DOCUMENT. THE REVENUE BY WAY OF GROUND NO. (III) IS AGGRIEVED BY THE RESTRICTION OF THE ADDITION OF RS. 59,43,115/- AS AGAINST RS.1.28 CR MADE BY THE ASSESSING OFFICER. SINCE BO TH THE GROUNDS OF APPEAL I.E. GROUND NO. 1 RAISED BY THE ASSESSEE AND GROUND NO. (III) RAISED BY THE REVENUE RELATE TO THE SAME ISSUE, WE ADJUDICATE BOTH THE GROUNDS OF APPEAL TOGETHER. 34. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF SEARCH, PAGES NO. 59 TO 67 OF ANNEXURE A-2 WERE SEI ZED FROM THE OFFICE OF THE ASSESSEE. THE SAID DOCUMENTS WERE CONFRONTE D TO SHRI LALIT JINDAL WHOSE STATEMENT WAS RECORDED ON 29.07.2009 I.E. AFT ER THE SEARCH. THE DOCUMENT TABULATED ENTRIES RELATING TO RECEIPT OF P AYMENT FROM BUDHIRAJA FAMILY AND LETTER DATED 10.08.2008 ADDRESSED TO SHR I LALIT JINDAL WHICH CONTAINED ENTRIES RELATING TO M-1 PLAZA. IN REPLY, SHRI LALIT JINDAL EXPLAINED THAT THE LETTER WAS WRITTEN BY SHRI ANIL MONGA, RESIDENT OF GREATER KAILASH-I NEW DELHI GIVING HIM DETAIL OF I NVESTMENTS MADE BY 24 HIM IN VARIOUS PROJECTS. IN THE SAID LETTER, HE HAS MENTIONED THE EXPECTED PRICE OF THE PROPERTIES HELD BY HIM AND IT WAS FURT HER STATED BY HIM THAT ALL THE PAYMENTS RECEIVED FROM MR. MONGA HAD DULY B EEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT BUT SOME PART IN THE PAYMEN T RELATING TO M-1, PLAZA PROPERTY HAVE NOT BEEN ACCOUNTED FOR IN THE R EGULAR BOOKS OF ACCOUNT WHICH IN-TURN HAVE BEEN SURRENDERED TO THE TUNE OF RS. 2 CR. THE SCANNED COPY OF PAGE 67 IS AVAILABLE AT PAGE 3 OF THE ASSESSMENT ORDER WHICH IS A LETTER WRITTEN TO SHRI LALIT JINDA L ON 10.08.2008 WITH REGARD TO THE INVESTMENT IN VARIOUS PROPERTIES. TH E SAID DOCUMENT TALKED ABOUT THE DISCUSSION WITH MR. JINDAL AND TOTAL AMOU NT RECEIVABLE FROM MR. JINDAL AT RS. 128,89,362/- AGAINST WHICH RS. 13 LACS HAD ALREADY BEEN RECEIVED FROM MR. JINDAL AND THE BALANCE RECEI VABLE WAS RS.1,15,89,362/-. AGAINST EACH TRANSACTION LETTERS (A) (B) (C) (D) AND (E) HAD BEEN WRITTEN AND THE SAID PAGE WAS SUPPORTED BY FIVE OTHER PAGES WHICH WERE MARKED AS (A) TO (E) AND WERE SEIZED AS DOCUMENT NO. 63 TO 66 OF A-2. ALL THESE DOCUMENTS ARE SCANNED BY THE ASSESSING OFFICER AND ARE REPRODUCED AT PAGES 4 TO 7 OF THE ASSESSMEN T ORDER. PAGE 61 OF THE ANNEXURE A-2 AND PAGE 60 OF ANNEXURE A-2 ARE AL SO SCANNED AND ARE REPRODUCED AT PAGES 7 AND 8 OF THE ASSESSMENT ORDER AND PAGE 62 OF A-2 IS THE LETTER (E) 61, 60 AND 62 ARE REPRODUCED AT P AGES 8, 9 AND 10 OF THE ASSESSMENT ORDER. THE SAID THREE PAGES I.E. 61, 60 AND 62 OF THE SEIZED DOCUMENTS WERE IN RESPECT OF TRANSACTIONS AT (E). PAGE 59 OF A-2 IS SCANNED AND IS PLACED AT PAGE 11 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER NOTED FROM ALL THE ABOVESAID PAGES THAT ON EACH PAGE THE ASSESSEE HAS RECORDED THE TOTAL AMOUNT AND THE BALA NCE AMOUNT AFTER ADJUSTMENTS WHICH ARE DUE TO HIM AND HIS FAMILY MEM BERS. THE ASSESSING OFFICER CONFRONTED THE ASSESSEE WITH THE SAID DOCUMENTS AND ASKED THE ASSESSEE TO GIVE DETAILS OF EACH TRANSACT ION MENTIONED ON THE SAID PAGES AND WHETHER THE SAME WERE REFLECTED IN T HE BOOKS OF ACCOUNT. 25 IN THE WRITTEN REPLY, THE ASSESSEE STATED THAT THE FIGURES ON THESE PAGES WERE NOTIONAL FIGURES AND NOT ACTUAL FIGURES AND HE ALSO FILED PAGE-WISE REPLY OF THE SAID DOCUMENTS WHICH ARE REPRODUCED BY THE ASSESSING OFFICER AT PAGE 12 OF THE ASSESSMENT ORDER. THE AS SESSING OFFICER, THEREAFTER ANALYZED THE REPLY OF THE ASSESSEE AND F OUND IT NOT ACCEPTABLE AND MADE AN ADDITION OF RS. 1,28,68,362/- HOLDING T HAT PAGE 67 WAS NOTHING BUT SUMMARY OF PAGES 59 TO 66. 35. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DE ALT WITH THIS ISSUE VIDE PARA 18 OF HIS CONSOLIDATED ORDER. THE STATEMENTS OF THE ASSESSEE ARE REPRODUCED UNDER PARA 18.1 AT PAGES 25 TO 30 OF THE APPELLATE ORDER. THE COMMISSIONER OF INCOME TAX (A PPEALS) ELABORATELY DEALT WITH THE ISSUE AT PAGE 30-31 OF THE APPELLATE ORDER AND CONCLUDED THAT AT PAGE 15 OF THE ASSESSMENT ORDER. A TABLE HA S BEEN DRAWN BY THE ASSESSING OFFICER WHICH ENUMERATES THE TOTAL AMOUNT OF TRANSACTIONS FROM THE SEIZED PAGES AND THE AMOUNT SHOWN AS CREDI T/PAYMENT OF RS. 46,43,115/- AND OUTSTANDING TOTALING RS. 128,69,362 /- WHICH TALLIES WITH THE FIGURE AS PER LETTER DATED 10.08.2008 FROM SHRI MONGA DESCRIBED AS RECEIVABLE OUT OF WHICH RS. 13 LACS WAS SHOWN AS AL READY RECEIVED. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSING OFFICER HAVING ADDED RS. 128,69,362/- WAS NOT CORRECT AS TH E SAME WAS AN OUTSTANDING AMOUNT. HOWEVER, AT PAGE 15 PARA (I) O F THE ASSESSMENT ORDER, AMOUNT OF RS. 59,43,115/- WAS STATED I.E. RS . 46,43,115/- + RS. 13,00,000/- AS RECEIVED BY SHRI MONGA. THE SAID CA LCULATION WAS DONE BY THE ASSESSING OFFICER. THE COMMISSIONER OF INCO ME TAX (APPEALS) THUS HELD THAT THE ADDITION IS TO BE RESTRICTED TO RS. 59,43,115/-. 36. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ADDI TION OF RS. 59,43,115/- AND THE REVENUE IS IN APPEAL AGAINST TH E SAID RESTRICTION OF RS. 59,43,115/-. THE LD. AR FOR THE ASSESSEE ELABO RATELY TOOK UP THE 26 OBSERVATIONS OF THE ASSESSING OFFICER AND ALSO THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR FO R THE REVENUE HOWEVER, PLACED RELIANCE ON THE ORDER OF THE ASSESS ING OFFICER. 37. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED VIDE GROUND NO. 1 IN THE APPEAL OF THE ASSESSEE AND GROUND NO. 3 IN THE APPEAL FILED BY THE REVENUE IS RELATAB LE TO THE SEIZED DOCUMENTS FOUND FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH. THE SAID DOCUMENTS BEING PAGE NOS. 59 T O 67 OF ANNEXURE A- 2 ARE SCANNED AND REPRODUCED BY THE ASSESSING OFFIC ER AT PAGES 3 TO 11 OF THE ASSESSMENT ORDER. THE PAGE 67 OF A-2 IS A L ETTER WRITTEN BY ONE SHRI ANIL MONGA, TO SHRI LALIT JINDAL ON 10.08.2008 . THE SAID LETTER TALKS OF AN ACCOUNT WITH APPROXIMATE FIGURES OF THE MALL BUILDING PRICE AND REST OF THE FIGURES IN RESPECT OF THE ASHREYA S TUDIO APARTMENTS, HILL VIEW & M-1 PLAZA. THE LETTER FURTHER TALKS ABOUT AD VANCE LYING WITH MR. LALIT JINDAL OF RS. 4,50,000/-. THE PERSON WRITING THE LETTER HAS CONCLUDED BY STATING TOTAL RECEIVABLE FROM YOU RS. 128,89,362/-, LESS ALREADY RECEIVED FROM YOU RS. 13,00,000/- AND BAL ANCE DUE FROM YOU RS. 115,89,362/-. TO THE SAID LETTER, MR. MONGA HAS FURTHER ATTACHE D ANNEXURES I.E. TRANSACTION LETTER MARKED AS (A) TO (E) WHICH INCORPORATES THE CONCLUSION IN RESPECT OF THE DIFFERENT CLAIMS M ADE IN THE LETTER DATED 10.08.2008. THE SAID LETTER IS SCANNED BY THE ASSES SING OFFICER AND IS REPRODUCED AT PAGE 3 OF THE ASSESSMENT ORDER AND THE SAME IS NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 38. THE SAID LETTER WAS CONFRONTED TO THE DIRECTOR SHRI LALIT JINDAL TO WHOM IT HAS BEEN ADDRESSED AND HIS STATEMENT WAS RE CORDED ON 29.07.2009. THE RELEVANT PORTION OF THE SAID STATE MENT IS AS UNDER : Q I AM SHOWING YOU PAGES 67 AND 72 OF ANNEXURE A -2 SEIZED FROM THE OFFICE OF M/S HILL VIEW INFRASTRUCTURE WHICH CONTAI NS ENTRIES RELATING TO 27 RECEIPT OF PAYMENT FROM BUDHIRAJA FAMILY AND LETTER DATED 10-08-08 ADDRESSED TO SH. LALIT JINDAL, WHICH CONTAINS ENTRI ES RELATING TO M-L, PLAZA. PLEASE EXPLAIN. A. THIS LETTER HAS BEEN WRITTEN BY SH. ANIL MON GA R/0 GREATER KAILSAH-L F NEW DELHI TO ME GIVING DETAILS OF INVESTMENT MADE I N OUR VARIOUS PROJECTS. HE HAS MENTIONED THE EXPECTED PRICE OF THE PROPERTI ES HELD BY HIM. ALL THE PAYMENTS RECEIVED FROM SH. ANIL MONGA HAVE DULY BEE N ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. HOWEVER THERE MAY BE SOME PART I N THE PAYMENT RELATING TO M-L PLAZA PROPERTY WHICH HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS. THE SAME HAVE BEEN SURRENDERED B Y US TO THE TUNE OF RS. 2.00 CRORES IN MELLA INFRACON. THE PROPERTIES ARE I N HIS WIFE'S NAME AND HIS DELHI ADDRESS IS MRS. ASHMA MONGA, HOUSE NO. A-40, KAILASH COLONY NEW DELHI, 39. ALONG WITH THE SAID LETTER, FIVE OTHER PAGES WE RE ATTACHED AND EACH PAGE RELATED TO A DIFFERENT TRANSACTION BETWEEN MR. MONGA AND HIS FAMILY MEMBERS WITH THE ASSESSEE IN RESPECT OF VARIOUS INV ESTMENTS MADE BY THE FAMILY OF MR. MONGA IN THE PROJECTS FLOATED BY THE ASSESSEE. THE ASSESSING OFFICER REQUISITIONED THE ASSESSEE TO PRO DUCE SHRI MONGA BUT HE WAS NEVER PRODUCED DESPITE THE ASSESSEE STATING THAT HE WAS PREPARED TO PRODUCE HIM. HOWEVER, DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, LETTER FROM MR. MONGA DATED 21.11.2011 WAS PRODUCED IN WHICH IT IS CLAIMED THAT THE FIGURES IN THE SAID LETTERS WERE N OTIONAL FIGURES. FURTHER, THOUGH THE ASSESSEE CLAIMED THAT THE ENTRI ES WERE REFLECTED IN THE BOOKS OF ACCOUNT BUT THE SAME WERE NOT PRODUCED TO THE SATISFACTION OF ASSESSING OFFICER. THE PAYMENTS RECEIVED FROM M R. MONGA OR MADE TO MR. MONGA WERE NOT FULLY ACCOUNTED FOR IN THE BO OKS OF ACCOUNT. THE DIRECTOR SHRI LALIT JINDAL IN HIS STATEMENT HAD SA ID THAT ALL THE PAYMENTS RECEIVED FROM MR. MONGA WERE DULY ACCOUNTED FOR AND SOME PART OF THE PAYMENT RELATING TO M-1 PLAZA PROPERTY WERE NOT ACC OUNTED AGAINST WHICH SURRENDER TO THE TUNE OF RS. 2 CRORES WAS CLA IMED TO HAVE BEEN MADE IN THE NAME OF M/S MELLA INFRACOM. HOWEVER, T HE ASSESSEE FAILED TO CO-RELATE THE TOTAL ENTRIES. THE PERUSAL OF THE VARIOUS DOCUMENTS REFLECT THE FINANCIAL TRANSACTIONS IN RELATION TO V ARIOUS PROJECTS AND IN 28 VIEW OF THE COVERING LETTER WHICH IS VERY CATEGORIC IN STATING THAT THE TOTAL AMOUNT RECEIVABLE FROM THE ASSESSEE WAS RS.1, 28,89,362/- AGAINST WHICH SUM OF RS. 13 LACS WAS ALREADY RECEIVED AND T HE BALANCE DUE FROM THE ASSESSEE WAS RS. 1,15,89,362/- THE PRESUMPTION IS TO BE DRAWN AGAINST THE ASSESSEE WHERE THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON HIM. HOWEVER, WE ARE IN CONFORMITY WITH T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN RESTRICTING THE ADDITION TO RS. 59,43,115/-, AS AGAINST ADDITION OF RS. 1,28,69,362 /- MADE BY THE ASSESSING OFFICER BECAUSE THE SAID AMOUNT OF RS. 1, 28,69,362/- DEPICTS THE AMOUNT RECEIVABLE BY MR. MONGA. THE ASSESSING OFFICER AT PAGE 14 HAS TABULATED THE TOTAL AMOUNT OF TRANSACTION PAGE- WISE AND THE AMOUNT SHOWN AS CREDIT/PAYMENT AND THE BALANCE OUTSTANDING AMOUNT. THE NOTINGS AT PAGE 66 REFLECT THE TOTAL VALUE OF INVES TMENT AT RS. 79,60,250/- AS AGAINST WHICH THERE WAS A CREDIT OF RS. 33,01,375/- AND THE OUTSTANDING WAS RS. 46,48,875/-. AT PAGE 65, T HE TRANSACTION WAS OF RS. 36,00,000/- AGAINST WHICH THERE WAS A CREDIT OF RS. 1,43,000/- AND BALANCE WAS RS. 34,57,000/-. SIMILARLY AT PAGE 64, THE TRANSACTION WAS OF RS. 57,50,000/- AGAINST WHICH THERE WAS A CREDIT OF RS. 16,00,000/- AND BALANCE WAS RS. 41,50,000/-. AT PAGE 63, THERE WAS AN ADVANCE LYING WITH THE ASSESSEE OF RS. 4,50,000/- WHICH IN NO CASE CAN BE ADDED IN THE HANDS OF THE ASSESSEE. FURTHER, THE PAGE 61 REFLECTED CASH PAYMENTS OF RS. 2,00,000/- AND RS. 8,00,000/- WHICH WERE PAID BY THE ASSESSEE BEFORE US TO THE FAMILY MEMBERS OF SHRI MO NGA AND AS THE SAME WERE NOT REFLECTED IN THE BOOKS OF ACCOUNT, THE SAI D AMOUNTS ARE TO BE TREATED AS INCOME FROM UNDISCLOSED SOURCES IN THE H ANDS OF THE ASSESSEE. ANOTHER PAGE WAS NO. 60, ON WHICH AS AGAINST TOTAL AMOUNT OF TRANSACTION, RS. 2,34,542/-, RS. 1,98,740/- WAS PAI D AND THE BALANCE WAS RS. 35,805/-. AS PER TABULATED DETAILS AT PAGE 14, THE AMOUNT CREDITED/PAID TOTALED TO RS. 46,43,115/- AND THE BA LANCE ON EACH PAGE 29 WAS SHOWN AS RECEIVABLE BY MR. MONGA AND HIS FAMILY MEMBERS FROM THE ASSESSEE VIDE LETTER DATED 10.08.2008. FURTHER SUM OF RS. 13,00,000/- IS MENTIONED IN THE SAID LETTER PLACED AT PAGE 67 AS H AVING BEEN RECEIVED BY HIM. IN TOTALITY THUS, THE TOTAL PAYMENTS MADE BY T HE ASSESSEE WERE OF RS. 46,43,115/- + RS. 13,00,000/- AND THE ADDITION IS TO BE RESTRICTED TO RS. 59,43,115/- AS HELD BY THE COMMISSIONER OF INCO ME TAX (APPEALS). THE BALANCE BEING THE AMOUNT PAYABLE BY THE ASSESSE E TO SHRI MONGA AND HIS FAMILY MEMBERS IS NOT INCLUDIBLE AS INCOME OF T HE ASSESSEE. ACCORDINGLY, WE UPHOLD THE ADDITION OF RS. 59,43,11 5/- IN THE HANDS OF THE ASSESSEE AND DISMISS THE GROUNDS OF APPEAL RAIS ED BY BOTH ASSESSEE AND THE REVENUE IN THIS REGARD. ITA NO. 561/CHD/2013 :: REVENUES APPEAL A.Y. 2007- 08 40. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY REJECTING THE PE RCENTAGE COMPLETION METHOD ADOPTED BY THE AO TO DETERMINE THE PROFIT FROM THE REAL ESTATE BUSINESS OF ASSESSEE' (II) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY DELETING THE ADD ITION OF RS.12,34,0007-MADE ON ACCOUNT OF INCOME OF THE ASSESSEE FROM ITS REAL EST ATE BUSINESS.' (III) THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 41. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN REJECTING T HE PERCENTAGE COMPLETION METHOD ADOPTED BY THE ASSESSING OFFICER. 42. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT AS POINTED OUT EARLIER, THE ASSESSEE WAS CARRYING ON THE BUSINESS OF REAL E STATE DEVELOPMENT. THE ASSESSING OFFICER, ON THE PERUSAL OF THE BALANC E SHEET FOR THE YEAR ENDING 31.03.2007 NOTED THAT THE ASSESSEE HAD BEEN BOOKING 30 REVENUE/INCOME ON PERCENTAGE COMPLETION METHOD. IN VIEW OF THE GUIDELINES ISSUED BY THE INSTITUTE OF CHARTERED ACC OUNTANTS OF INDIA (ICAI) WHICH HAD ISSUED CERTAIN GUIDELINES IN 2006, THE ASSESSEE WAS SHOW CAUSED TO FURNISH DETAILS OF ESTIMATED COST OF PROJECT AND THE ESTIMATED REVENUE REALIZATION. THE ASSESSEE WAS ALS O SHOW CAUSED TO EXPLAIN AS TO WHY PERCENTAGE COMPLETION METHOD SHOU LD NOT BE ADOPTED INSTEAD OF PROJECT COMPLETION METHOD IN VIEW OF THE GUIDANCE NOTE ON REAL ESTATE DEVELOPERS OF 2006. 43. THE ASSESSEE VIDE REPLY DATED 12.12.2001 STATED THAT THE DOCUMENT GUIDANCE NOTE ISSUED BY ICAI WAS NOT AN ACCOUNTING STANDARD AND WAS ISSUED TO HAVE UNIFORMITY IN ACCOUNTING SPECIALLY I N THE CASE OF LISTED COMPANIES. THE ASSESSEE CLARIFIED THAT EVEN ON-DAT E DIFFERENT COMPANIES WERE ADOPTING DIFFERENT APPROACHES FOR BOOKING THE REVENUE. THE ASSESSEE WAS FOLLOWING THE SAID PROJECT COMPLETION METHOD CONSISTENTLY FOR THE PAST MANY YEARS AND HENCE, IT WAS SUBMITTED THAT THE PERCENTAGE COMPLETION METHOD SHOULD NOT BE ADOPTED WHICH IN AN Y CASE, WAS NOT COMPULSORY. THE ASSESSING OFFICER, REJECTING REPLY OF THE ASSESSEE OBSERVED THAT THE GUIDANCE NOTE ON REAL ESTATE DEVE LOPERS HAD BEEN ISSUED IN ORDER TO CLARIFY THE ISSUE AS TO WHETHER REAL ESTATE DEVELOPERS SHALL ACCOUNT INCOME ON PROJECT COMPLETION METHOD O R PROPORTIONATELY OVER THE PERIOD OF PROJECT. THE CONTENTION OF THE A SSESSEE THAT IT WAS A MERE GUIDANCE NOTE AND NOT ACCOUNTING STANDARD, WAS FOUND BY THE ASSESSING OFFICER TO BE NOT TENABLE AS THE GUIDANCE NOTE DISCUSSED THE ACCOUNTING STANDARD AS-7 AND AS-9. THE RELEVANT PA RAS OF THE GUIDANCE NOTE ARE REPRODUCED BY THE ASSESSING OFFICER AT PAG ES 9 & 10 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER FURTHER OB SERVED THAT THE HON'BLE COURTS HAD HELD THAT REAL ESTATE DEVELOPERS SHOULD FOLLOW THE PERCENTAGE COMPLETION METHOD. RELIANCE WAS PLACED O N VARIOUS DECISIONS 31 BY THE ASSESSING OFFICER IN THIS REGARD AND REJECTI NG THE PLEA OF THE ASSESSEE THAT PROFITS OF THE ASSESSEE FROM BUSINESS IN REAL ESTATE SHOULD NOT BE ASCERTAINED UNTIL THE VENTURE/PROJECT HAD CO ME TO AN END, WAS REJECTED. IN VIEW THEREOF, THE ASSESSING OFFICER A PPLYING THE PERCENTAGE COMPLETION METHOD HAS TABULATED INCOME AT PART OF P AGE 12 AND 13 OF THE ASSESSMENT ORDER AND NOTED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD NOT BOOKED ANY INCOME AND AS PER THE CALCULATION, THE INCOME OF THE ASSESSEE ON BUSINESS OF REAL ESTATE D EVELOPERS WAS DETERMINED AT RS. 12,34,000/-. 44. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS WHICH ARE INCORPORATE D AT PAGES 10 TO 16 OF THE APPELLATE ORDER AND RELIANCE WAS PLACED UPON VARIOUS CASE-LAWS BY THE ASSESSING OFFICER AND ALSO DISTINCTION WAS DRAW N ON THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER. THE COMMISSIO NER OF INCOME TAX (APPEALS) VIDE PARA 10.2 HELD AS UNDER : 10.2. I HAVE CAREFULLY CONSIDERED THE ASSESSEE 'S SUBMISSION AND THE IMPUGNED ORDER. THE QUESTION IS WHEN SHOULD THE REVENUE AS I N THE CASE ON HAND, BE RECOGNISED - ON PROPORTIONATE BASIS OVER THE PERIOD OF CONTRAC T OR ON COMPLETION OF CONTRACT. THE ICAI GUIDANCE NOTE OF 2006, RECOMMENDED PERCENTAGE COMPLETION METHOD TO BE FOLLOWED BY THE REAL ESTATE DEVELOPERS, AND MANY LA RGE ENTITIES AND LISTED COMPANIES HAVE DONE SO, THOUGH PARAMETERS DIFFER. T HE PCM ENABLE RECOGNITION OF REVENUE NOT WHEN A PROJECT IS FINISHED BUT CONTINUO USLY, IN PORTION TO THE MONEY SPENT BY IT ON THE PROJECT. THE ASSESSEE COMPANY WAS INCORPORATED ON 9.11.2005 AND SO THIS IS THE FIRST YEAR OF CONDUCTING ITS BUSINESS AS REAL ESTATE DEVE LOPERS. IT HAS BEEN CONTENDED THAT IT HAS BEEN CONSISTENTLY FOLLOWING THE SAME SY STEM OF ACCOUNTING. THE ASSESSEE IN ITS SUBMISSION HAS DISTINGUISHED THE OBSERVATION OF THE A.O. REGARDING CONDITIONS FOR THE APPLICATION OF PERCENTAGE COMPLETION METHOD . RELIANCE HAS ALSO BEEN PLACE IN THE CASE OF PRESTIGE ESTATE PROJECT PVT. LTD. VS. D CIT 129 TTJ 680 (BANGALORE), AWADHESH BUILDERS VS. ITD 37 SOT 122 (MUMBAI). THE AO HAS ALSO RELIED ON CERTAIN CASES, INCLUDING J.K. INDUSTRIES, 297 ITR 176 (SC). IT IS HOWEVER NOT THE AO'S CASE THAT THE PROFIT S HAVE BEEN DISTORTED BY FOLLOWING THE PROJECT COMPLETION METHOD. THE IMPUGNED ORDER I S ALSO SILENT AS REGARDS THE POSITION OF THE BOOKS OF ACCOUNTS. IN OTHER WOR DS THE BOOKS HAVE NOT BEEN REJECTED, NOR ANY DEFECTS POINTED OUT. IN THE CASE OF GIT VS. BILAHARI INVESTMENT (P) LTD., 299 ITR 1 (2008)(SC), THE APEX COURT HELD THA T THE COMPLETION CONTRACT METHOD ADOPTED BY THE ASSESSEE FOR CHIT DISCOUNT CO NSISTENTLY OVER THE YEARS, IS NOT 32 REQUIRED TO BE SUBSTITUTED BY PERCENTAGE COMPLETION METHOD. IN GIT (V) MANISH BUILDWELL (P) LTD. (2011) 245 CTR 397 (DEL), IT WAS ENUNCIATED THAT PROJECT COMPLETION METHOD IS ONE OF THE RECOGNIZED METHODS OF ACCOUNTING. THAT IT CANNOT BE SAID THAT THE PROJECT COMPLETION METHOD FOLLOWED BY THE ASSESSEE WOULD RESULT IN DEFERMENT OF PAYMENT OF TAXES. THEREFORE, CONSIDERING THE DISCUSSION ABOVE, I DO NOT FIND ANY MERIT ON THE PART OF THE AO TO HAVE WORKED OUT THE INCOME BY APPLYING THE PERCENTAGE COMPLETION METHOD. THUS, THE ACTION OF THE ASSESSI NG OFFICER IS HELD NOT TENABLE. THE ASSESSEE SUCCEEDS ON THIS GROUND OF A PPEAL. 45. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE ASSESSEE HAD FAILED TO FOLLOW THE PRESCRIBED ACCOUNTING STANDARD I.E. P ERCENTAGE COMPLETION METHOD AND HAD COMPUTED THE INCOME IN ITS HANDS ON PROJECT COMPLETION METHOD WHICH WAS INCORRECT AND HENCE THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS) BE REVERSED. 46. THE LD. AR FOR THE ASSESSEE ON THE OTHER HAND, POINTED OUT THAT THE ASSESSEE HAD FOLLOWED THE ACCOUNTING STANDARD AS-9 WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE WHICH IS ONE OF THE PRESCRIBED METHODS OF ACCOUNTING AND HENCE, THERE IS NO MERIT IN RE-COMPUTATION OF INCOME IN THE HANDS OF THE ASSESSEE. FURTHER RELIA NCE WAS PLACED ON CIT VS BILAHARI INVESTMENT (P) LTD. 299 ITR 1 (S.C), CI T VS MANISH BUILDWELL (P) LTD. 245 CTR 397 (DEL) AND K.S.MEHTA (HUF) VS CIT 278 ITR 59 (KOL). 47. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS IN RELATION TO THE METHOD TO BE APPLIED FOR RECOGNIZING THE REVENUE GENERATED BY THE ASSESSEE IN THE COURSE OF CARRYING ON THE BUSINESS OF REAL ESTA TE DEVELOPERS. THE CASE OF THE ASSESSEE IS THAT IT IS FOLLOWING ONE OF THE ACCEPTED ACCOUNTING STANDARDS APPROVED BY ICAI FOR RECOGNIZING THE REVE NUE GENERATED BY IT. THE ASSESSEE HAD FOLLOWED PROJECT COMPLETION METHOD WHICH HAD BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE FOR THE PRECE DING YEARS ALSO. THE ASSESSING OFFICER, ON THE OTHER HAND, HAD APPLIED P ERCENTAGE COMPLETION 33 METHOD TO COMPUTE THE INCOME IN THE HANDS OF THE AS SESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAD ALLOWED TH E CLAIM OF THE ASSESSEE. 48. BOTH THE METHODS OF ACCOUNTING ARE I.E. PROJECT COMPLETION METHOD AND PERCENTAGE COMPLETION METHOD ARE THE ACCEPTED S TANDARDS OF ACCOUNTING AND EITHER OF THE METHODS CAN BE APPLIED BY THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESS EE HAD CHOSEN TO COMPUTE ITS INCOME ON THE BASIS OF PROJECT COMPLETI ON METHOD I.E. RECOGNIZING THE INCOME ON THE COMPLETION OF THE PRO JECT AND NOT FROM YEAR TO YEAR WHEREAS THE CASE OF THE REVENUE WAS TH AT IT SHOULD ACCOUNT FOR THE INCOME AS IT IS GENERATED IN THE HANDS OF T HE ASSESSEE I.E. FROM YEAR TO YEAR ON THE BASIS OF THE WORK COMPLETED BEI NG RELATABLE TO THE REVENUE GENERATED FROM YEAR TO YEAR. 49. THE HON'BLE SUPREME COURT IN CIT VS BILAHARI IN VESTMENT (P) LTD. (SUPRA) HAD HELD THAT, RECOGNITION/IDENTIFICATION OF INCOME UNDER THE 1961 ACT IS ATTAINABLE BY SEVERAL METHODS OF ACCOUN TING. IT MAY BE NOTED THAT THE SAME RESULT COULD BE ATTAINED BY ANY ONE OF THE ACCOUNTING METHODS. COMPLETED CONTRACT METHOD IS O NE SUCH METHOD. SIMILARLY, PERCENTAGE OF COMPLETION METHOD IS ANOTH ER SUCH METHOD. IT WAS FURTHER HELD THAT EVERY ASSESSEE IS ENTITLED TO ARRANGE ITS AFFAIRS AND FOLLOW THE METHOD OF ACCOUNTING WHICH THE DEPAR TMENT HAS EARLIER ACCEPTED. IT IS ONLY IN THOSE CASES WHERE THE DEPA RTMENT RECORDS A FINDING THAT THE METHOD ADOPTED BY THE ASSESSEE RES ULTS IN DISTORTION OF PROFITS, THE DEPARTMENT CAN INSIST ON SUBSTITUTION OF THE EXISTING METHOD. 50. APPLYING THE ABOVESAID PRINCIPLES TO THE FACTS OF THE PRESENT CASE, WE FIND THAT THE ASSESSEE BEFORE US HAS BEEN FOLLOW ING THE SYSTEMATIC 34 METHOD OF ACCOUNTING FROM YEAR TO YEAR WHICH HAS BE EN ACCEPTED BY THE DEPARTMENT AND NO DEFECTS HAVE BEEN POINTED OUT BY THE DEPARTMENT IN THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE AN D THUS, THERE IS NO REASON TO REJECT THE SAME. 51. THE HON'BLE DELHI HIGH COURT IN CIT V VS MANISH BUILDWELL (P) LTD. (SUPRA) HAD HELD THAT IT IS WELL-SETTLED THAT THE PROJECT COMPLETION METHOD IS ONE OF THE RECOGNIZED METHODS OF ACCOUNTI NG. IT CANNOT BE SAID THAT THE PROJECT COMPLETION METHOD FOLLOWED BY THE ASSESSEE WOULD RESULT IN DEFERMENT OF THE PAYMENT OF THE TAXES WHI CH ARE TO BE ASSESSED ANNUALLY UNDER THE IT ACT. AS-7 ISSUED BY THE ICAI ALSO RECOGNIZES THE POSITION THAT IN THE CASE OF CONSTRUCTION CONTRACTS , THE ASSESSEE CAN FOLLOW EITHER THE PROJECT COMPLETION METHOD OR THE PERCENTAGE COMPLETION METHOD. 52. WHERE THE ASSESSEE WAS FOLLOWING A PARTICULAR M ETHOD OF ACCOUNTING CONSISTENTLY, WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT FROM YEAR TO YEAR AND IN THE ABSENCE OF ANY DEFECT BEING POINTED OUT BY THE ASSESSING OFFICER THAT BY FOLLOWING SUCH METHOD, IN COME HAD ESCAPED ASSESSMENT, WE FIND NO MERIT IN THE ORDER OF THE AS SESSING OFFICER IN HOLDING THAT PERCENTAGE COMPLETION METHOD SHOULD BE APPLIED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IT IS T HE PREROGATIVE OF THE ASSESSEE TO ARRANGE ITS AFFAIRS IN SUCH A MANNER AN D FOLLOW ANY RECOGNIZED METHOD OF ACCOUNTING TO COMPUTE ITS PROF ITS. IN VIEW THEREOF, WE FIND NO MERIT IN THE ORDER OF THE ASSESSING OFFI CER IN RE-COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE. UPHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), WE DISMISS GR OUND OF APPEAL RAISED BY THE REVENUE. 35 ITA NO. 562TO 564 /CHD/2013 :: REVENUES APPEAL A.YS. : 2008-09 TO 2010-11 53. THE FACTS IN ITA NOS.558 & 559/CHD/2011 IN THE CASE OF THE SISTER CONCERN ARE IDENTICAL TO FACTS AND ISSUE RAISED IN ITA NO.561/CHD/2011, OUR DECISION IN ITA NO.561/CHD/2011 SHALL APPLY MUT ATIS MUTANDIS TO ITA NOS.558 & 559/CHD/2011. 54. THE FACTS IN ITA NO. 562/CHD/2013 TO ITA 564/CH D/2013 ARE IDENTICAL TO THE FACTS AND ISSUES RAISED IN ITA NO . 561/CHD/2013 AND OUR DECISION IN ITA NO. 561/CHD/2013 SHALL APPLY MUTATI S-MUTANDIS TO ITA NOS. 562 TO 564/CHD/2013 ALSO. 55. IN THE RESULT, THE ASSESSEE'S APPEALS IN ITA. NOS. 547 & 548/CHD/2013 ARE PARTLY ALLOWED AND IN ITA NO.549/C HD/2013 IS DISMISSED AND REVENUES APPEAL IN ITA NO. 561/CHD/2 013 TO ITA NO. 564/CHD/2013 ARE DISMISSED. FURTHER APPEAL OF REVE NUE AGAINST SISTER CONCERN IN ITA NOS.558 & 559/CHD/2011 ARE ALSO DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JUNE, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6 TH 2JUNE, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH