DCIT 13(1)(2), MUMBAI V. PEBBLE BAY DEVELOPERS P.LTD, MUMBAI

ITA 5744/MUM/2017

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9887 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 25-08-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF A LETTER DATED
• Keywords: Unexplained expenditure; Search and seizure; Opportunity of being heard; Question of law; Tangible material; Corroborative evidences; Accommodation entries; Assessment record; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 147; 148; 37; 69C; 143(3); 143(1); 72; 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) ITA No. 5744/MUM/2017 Assessment Year: 2008-09 Dy. Commissioner of Income- tax-13(1)(2), 2 nd floor, Room No. 218, Aayakar Bhavan, M.K. Road, Mumbai-400020. Vs. M/s Pebble Bay Developers Pvt. Ltd., Raheja Chambers, Linking Road, Main Avenue Santacruz (West), Mumbai-400054. PAN No. AACCG 1645 E Appellant Respondent Revenue by : Ms. Vranda Matkari, DR Assessee by : Mr. Nishit Gandhi, AR Date of Hearing : 26/08/2022 Date of pronouncement : 21/10/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 27/06/2017 passed by the Learned Commissioner of Income-tax (Appeals)-21, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2008-09, raising following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the provision of Sec. 69C for disallowance on account of unexplained cash transactions is not applicable in this case as the assessee has not claimed any expenses in the instant year contrary to the fact that the Directors of the KBPLA (Sister concern of the assessee compa while deposing before the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, Bangalore City have failed to give satisfactory explanation regarding the case expenses incurred by the assessee company to vacate the land from encroachers. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO u/s 69C of Rs. 25,58,00,000/ Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, Bangalore c company in a suit filed by the KPBL for reimbursement expenses incurred by it and its sister concern i.e. the assessee company who acquired the land from M/s L.K. evidence of th books of accounts to support the claim. 2. Briefly stated facts of the case are that the assessee filed return of income on 30/09/2008, which was subsequently revised on 12/05/2009 at a loss of ₹2,55,13,241/-. The said return of income was processed under section 143(1) of the Income-tax Act, 1 assessment was reopened by way of issue of notice under section 148 of the Act dated 31/03/2015, in view of Hon’ble City Session Judge M/s Pebble Bay Developers Pvt. Ltd. disallowance on account of unexplained cash transactions is not applicable in this case as the assessee has not claimed any expenses in the instant year contrary to the fact that the Directors of the KBPLA (Sister concern of the assessee compa while deposing before the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, Bangalore City have failed to give satisfactory explanation regarding the case expenses incurred by the assessee company to vacate the land from encroachers. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO u/s 69C of Rs. 25,58,00,000/- without appreciating the fact that the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, Bangalore city pronounced the judgement against the assessee company in a suit filed by the KPBL for reimbursement expenses incurred by it and its sister concern i.e. the assessee company who acquired the land from M/s L.K. Trust for failure in proving evidence of the said transaction in its pass books, cash books and books of accounts to support the claim. stated facts of the case are that the assessee filed return of income on 30/09/2008, which was subsequently revised on 12/05/2009 at a . The said return of income was processed under section tax Act, 1961 (in short ‘the Act’). Subsequently, the assessment was reopened by way of issue of notice under section 148 of the , in view of receipt of information interalia Judge, Banglore rejecting claim of reimbursement of M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 2 disallowance on account of unexplained cash transactions is not applicable in this case as the assessee has not claimed any expenses in the instant year contrary to the fact that the Directors of the KBPLA (Sister concern of the assessee company) while deposing before the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, Bangalore City have failed to give satisfactory explanation regarding the case expenses incurred by the assessee facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO u/s 69C without appreciating the fact that the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge, ity pronounced the judgement against the assessee company in a suit filed by the KPBL for reimbursement expenses incurred by it and its sister concern i.e. the assessee company Trust for failure in proving e said transaction in its pass books, cash books and stated facts of the case are that the assessee filed return of income on 30/09/2008, which was subsequently revised on 12/05/2009 at a . The said return of income was processed under section ). Subsequently, the assessment was reopened by way of issue of notice under section 148 of the interalia, the order of reimbursement of hutment removal expenses of (KBPL) i.e. a sister concern of assessee against M/s LK Trust, from whom the assessee purchased a plot of land at Banglore. law, the Ld. Assessing Officer 30/03/2016 under section 147 read with section 143(3) of the he made addition of ₹25,58,00, the assessee or on behalf of the assessee from the dwellers/hutme situated at Nagashetty assessee challenged reopening of the assessment as well as addition The Ld. CIT(A) upheld the validity of the reassessment addition on merit. Aggrieved, the Income-tax Appellate Tribunal (ITAT) [in short ‘the Tribunal’], grounds as reproduced above. 2.1 During the course of hearing, the assessee moved Rule 27 of the ITAT Rules which was decided against the assessee challenged validity of the reassessment M/s Pebble Bay Developers Pvt. Ltd. hutment removal expenses of M/s Kanyakumari Builders Private limited (KBPL) i.e. a sister concern of assessee against M/s LK Trust, from whom the assessee purchased a plot of land at Banglore. After following due process of Assessing Officer (AO) completed the 30/03/2016 under section 147 read with section 143(3) of the 25,58,00,000/- as unexplained expenditure incurred by or on behalf of the assessee towards obtaining vacant possession from the dwellers/hutments in plot to property purchased Hali Village, Banglore. Before the Ld. CIT(A), the assessee challenged reopening of the assessment as well as addition The Ld. CIT(A) upheld the validity of the reassessment, however deleted the addition on merit. Aggrieved, the Revenue has preferred this appeal tax Appellate Tribunal (ITAT) [in short ‘the Tribunal’], s reproduced above. During the course of hearing, the assessee moved an application under Rules, 1963 on the issue of validity of reassessment which was decided against the assessee by the Ld CIT(A)] challenged validity of the reassessment before the Ld. CIT(A) M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 3 M/s Kanyakumari Builders Private limited (KBPL) i.e. a sister concern of assessee against M/s LK Trust, from whom the After following due process of completed the reassessment on 30/03/2016 under section 147 read with section 143(3) of the Act, wherein as unexplained expenditure incurred by towards obtaining vacant possession purchased , which was lore. Before the Ld. CIT(A), the assessee challenged reopening of the assessment as well as addition on merit. , however deleted the has preferred this appeal before tax Appellate Tribunal (ITAT) [in short ‘the Tribunal’], raising the an application under , 1963 on the issue of validity of reassessment [i.e. by the Ld CIT(A)]. The assessee before the Ld. CIT(A) on various grounds including (a) the barred having been issued after six years from the end of the relevant assessment year; (b) the reassessment is invalid since the recorded were not provided to the ass satisfaction of the sanctioning authority as per section 151 of the reasons were recorded based on incorrect facts basis of the reassessment did not exist Officer are vague, without application of mind and at the most mere reasons to suspect and not reason to believe; assumption of escapement of income; satisfaction of the investigation wing without any application of mind. 2.2 It was contended that the Ld. CIT(A) case and accordingly granted relief in the appeal however he upheld the reopening of the assessment. Against the said order of t Revenue is in further appeal before the that since the assessee was granted complete relief on merit by the Ld. CIT(A), therefore no appeal was preferred by the assessee before the the order of the Ld. CIT(A), however the assessee filed the application under M/s Pebble Bay Developers Pvt. Ltd. the notice issued by the Assessing Officer was time having been issued after six years from the end of the relevant the reassessment is invalid since the provided to the assessee; (c) improper sanction and satisfaction of the sanctioning authority as per section 151 of the recorded based on incorrect facts and particularly the whole basis of the reassessment did not exist; (e) reasons recorded by the Ass Officer are vague, without application of mind and at the most mere reasons to suspect and not reason to believe; (f) the reassessment is initiated on the escapement of income; (g) reopening is on the mere borrowed investigation wing without any application of mind. It was contended that the Ld. CIT(A) was convinced on the merit of the case and accordingly granted relief in the appeal however he upheld the reopening of the assessment. Against the said order of the Ld. CIT(A), the is in further appeal before the Tribunal. The Ld. counsel that since the assessee was granted complete relief on merit by the Ld. CIT(A), therefore no appeal was preferred by the assessee before the order of the Ld. CIT(A), however the assessee filed the application under M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 4 notice issued by the Assessing Officer was time- having been issued after six years from the end of the relevant the reassessment is invalid since the actual reasons c) improper sanction and satisfaction of the sanctioning authority as per section 151 of the Act; (d) and particularly the whole e) reasons recorded by the Assessing Officer are vague, without application of mind and at the most mere reasons the reassessment is initiated on the reopening is on the mere borrowed investigation wing without any application of mind. convinced on the merit of the case and accordingly granted relief in the appeal however he upheld the he Ld. CIT(A), the The Ld. counsel submitted that since the assessee was granted complete relief on merit by the Ld. CIT(A), therefore no appeal was preferred by the assessee before the Tribunal against order of the Ld. CIT(A), however the assessee filed the application under Rule 27 seeking the indulgence of the jurisdiction of the Assessing Officer to pass the impugned assessment order. The Ld. counsel of the assessee re ITAT Rules and submitted that the assessee is entitled to support the order passed by the Ld. CIT(A) on any of the grounds decided against the assessee. It was submitted that in the present case the Ld. CIT(A) rej reassessment without giving any specific submission filed by the assessee. validity of the reassessment has been decided against the assessee assessee is eligible to challenge the same under support of the contention Hon’ble Gujrat High Court in the case of industries Ltd (2018) 408 ITR 517 (Gujarat) Madras High Court in the case of ITR 763 (Madras). 2.3 In view of above, the filed by the assessee under rule 27 of ITAT to M/s Pebble Bay Developers Pvt. Ltd. 27 seeking the indulgence of the Tribunal in adjudicating on the of the Assessing Officer to pass the impugned assessment order. of the assessee referred to application under and submitted that the assessee is entitled to support the order passed by the Ld. CIT(A) on any of the grounds decided against the assessee. It was submitted that in the present case the Ld. CIT(A) rejected the grounds of reassessment without giving any specific reasons and without considering the submission filed by the assessee. It was submitted that since the ground of validity of the reassessment has been decided against the assessee challenge the same under Rule 27 of the IT support of the contention, the Ld. Counsel, relied on the decision of the High Court in the case of PCIT v. Sun pharmaceutical industries Ltd (2018) 408 ITR 517 (Gujarat) and decision of Hon’ble Madras High Court in the case of CIT v. Sundaram & company (1964) 52 In view of above, the Ld. Counsel of the assessee submitted that petition filed by the assessee under rule 27 of ITAT to Rules might be admit M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 5 djudicating on the of the Assessing Officer to pass the impugned assessment order. application under Rule 27 of the and submitted that the assessee is entitled to support the order passed by the Ld. CIT(A) on any of the grounds decided against the assessee. It ected the grounds of and without considering the ince the ground of validity of the reassessment has been decided against the assessee, the 27 of the IT Rules. In relied on the decision of the Sun pharmaceutical nd decision of Hon’ble Sundaram & company (1964) 52 of the assessee submitted that petition might be admitted. 3. The Ld. Department Representative (DR) that the assessee is not entitled for moving application under ITAT Rules and the assessee should have filed cross objection if aggrieved with the order of the Ld. CI 4. We have heard rival submission of the parties on the issue of admissibility of application of the assessee under For ready reference, said rule is reproduced as under : “Rule 27: support the order appealed against on any of the grounds decided against him.” 4.1 We find that appeal has been decided on merit in favour of the assessee and thus no resultant tax liability on the assessee, therefore no appeal or cross objection has been preferred by the assessee. But the issue of validity of the reassessment has been decided against the assessee and therefore the assessee is eligible to support the order appealed against validity of reassessment decided agai pharmaceutical industries Ltd (supra) Rule 27 of the ITAT Rules assessment by the assessee M/s Pebble Bay Developers Pvt. Ltd. Department Representative (DR) on the other hand objected that the assessee is not entitled for moving application under and the assessee should have filed cross objection if aggrieved with the order of the Ld. CIT(A). We have heard rival submission of the parties on the issue of admissibility of application of the assessee under Rule 27 of the IT , said rule is reproduced as under : The respondent, though he may not have support the order appealed against on any of the grounds decided against We find that appeal has been decided on merit in favour of the assessee and thus no resultant tax liability on the assessee, therefore no appeal or cross tion has been preferred by the assessee. But the issue of validity of the reassessment has been decided against the assessee and therefore the assessee is eligible to support the order appealed against validity of reassessment decided against it. In the case of pharmaceutical industries Ltd (supra), the ITAT allowed application under Rules to the assessee for challenging the reopening of the assessment by the assessee, which was affirmed by the Hon’ble High M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 6 on the other hand objected that the assessee is not entitled for moving application under Rule 27 of the and the assessee should have filed cross objection if aggrieved We have heard rival submission of the parties on the issue of ule 27 of the ITAT rules. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against We find that appeal has been decided on merit in favour of the assessee and thus no resultant tax liability on the assessee, therefore no appeal or cross tion has been preferred by the assessee. But the issue of validity of the reassessment has been decided against the assessee and therefore the assessee is eligible to support the order appealed against on the ground of nst it. In the case of PCIT vs. sun allowed application under to the assessee for challenging the reopening of the , which was affirmed by the Hon’ble High Court. Similarly in the case of CIT Vs Sundaram & Co the reassessment proceeding, which were challenged by way of an application under Rule 27 of the IT Court. 4.2 In view of above discussion, we admit the application of the asse under rule 27 of the ITAT reassessment. 5. The Ld. counsel of the assessee filed 306. 6. We have heard both the parties on the issue of validity of the reassessment. The Ld Counsel of the assessee has raised various issues challenging the validity of reassessment. the reassessment is dealt as under: (i) The notice issued by the Assessing Officer was time been issued after six years from the end of the relevant assessment year; M/s Pebble Bay Developers Pvt. Ltd. Similarly in the case of CIT Vs Sundaram & Co. (supra), the the reassessment proceeding, which were challenged by way of an application 27 of the ITAT Rules and same was affirmed by the above discussion, we admit the application of the asse under rule 27 of the ITAT Rules for challenging the validity of the of the assessee filed a paperbook containing pages 1 to We have heard both the parties on the issue of validity of the The Ld Counsel of the assessee has raised various issues challenging the validity of reassessment. Each issue challenging the validity of the reassessment is dealt as under: otice issued by the Assessing Officer was time been issued after six years from the end of the relevant assessment M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 7 , the Tribunal quashed the reassessment proceeding, which were challenged by way of an application and same was affirmed by the Hon’ble High above discussion, we admit the application of the assessee for challenging the validity of the rbook containing pages 1 to We have heard both the parties on the issue of validity of the The Ld Counsel of the assessee has raised various issues Each issue challenging the validity of otice issued by the Assessing Officer was time-barred having been issued after six years from the end of the relevant assessment 6.1 the Ld. Counsel of the assessee submitted that there is no dispute that notices under section 148 of the the speed post, however same was received by the assessee only on 09/04/2015,. The Ld. Coun dispatch register or evidence having hand authorities on 31/03/2015 contrary as per the postal certificate the article was picked up and delivered on 09/04/2015 (refer PB: 79). jurisdictional High Court in the case of WP 513 of 2109, the Ld. time-barred and hence the 6.2 The Ld. DR on the other hand submitted thatduring appellate proceeding the Ld. CIT(A) duly provided copy of the documents to the Authorized Representative the Assessing Officer, from which it is evident tha the Act was provided to the postal authorities on 31/03/2015. Regarding the postal certificate, he submitted that M/s Pebble Bay Developers Pvt. Ltd. l of the assessee submitted that there is no dispute that notices under section 148 of the Act is dated 31/03/2015, which was sent by however same was received by the assessee only on Counsel of the assessee submitted that a copy of the dispatch register or evidence having handing over the said notice to the postal orities on 31/03/2015 , had not been provided to the assessee and on the contrary as per the postal certificate the article was picked up and delivered on 09/04/2015 (refer PB: 79). Relying on the judgement of the Hon’ble jurisdictional High Court in the case of Harjeet Surajprakash Ld. Counsel submitted that notice u/s 148 of the Act and hence the reassessment is unsustainable. on the other hand submitted thatduring appellate proceeding the Ld. CIT(A) duly provided copy of the documents to the Authorized Representative of the assessee, including the dispatch register of the Assessing Officer, from which it is evident that notice under section 148 of was provided to the postal authorities on 31/03/2015. Regarding the postal certificate, he submitted that same has been issued by the Post Office M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 8 l of the assessee submitted that there is no dispute that which was sent by however same was received by the assessee only on of the assessee submitted that a copy of the over the said notice to the postal had not been provided to the assessee and on the contrary as per the postal certificate the article was picked up and delivered elying on the judgement of the Hon’ble Surajprakash Girotra Vs UOI u/s 148 of the Act is on the other hand submitted thatduring appellate proceeding the Ld. CIT(A) duly provided copy of the documents to the of the assessee, including the dispatch register of t notice under section 148 of was provided to the postal authorities on 31/03/2015. Regarding the been issued by the Post Office, who delivered the notice to the assessee and not the Post Office who re the notice for delivery from the 6.3 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The learne contended that no evidence of handing over authorities on 31/03/2015 were provided to the assessee. However that the Ld. CIT(A) has duly noted the fact that dispatch register maintained in the office of the Assessing Officer CIT(A) noted that it transpired that said notice under section 148 of the appearing at Serial No. 239 of the register was duly handed over to the postal authorities on 31/03/2015 grievance of the assessee that no such evidence is ill founded and baseless. has not been provided to the Postal burden of proof lies on the assessee evidences from the Assessing Officer invoking Right to Information Act Further, as regard to the contention of the assessee of certificate of the Authority placed on paperbook page M/s Pebble Bay Developers Pvt. Ltd. delivered the notice to the assessee and not the Post Office who re the notice for delivery from the Income-tax Department. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The learned Coun no evidence of handing over of the article to the postal authorities on 31/03/2015 were provided to the assessee. However that the Ld. CIT(A) has duly noted the fact that dispatch register maintained in office of the Assessing Officer, which was produced before him it transpired that said notice under section 148 of the No. 239 of the register was duly handed over to the postal authorities on 31/03/2015. In view of specific finding by the Ld CIT(A) assessee that no such evidence was provided is ill founded and baseless. It is the assessee who is asserting has not been provided to the Postal Authorities on 31/03/2015, therefore burden of proof lies on the assessee. It was open to the assessee to obtain such from the Assessing Officer invoking Right to Information Act as regard to the contention of the assessee of certificate of the placed on paperbook page 79, it is found that the said M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 9 delivered the notice to the assessee and not the Post Office who received We have heard rival submission of the parties on the issue in dispute Counsel of assessee of the article to the postal authorities on 31/03/2015 were provided to the assessee. However, we find that the Ld. CIT(A) has duly noted the fact that dispatch register maintained in was produced before him. The Ld it transpired that said notice under section 148 of the Act No. 239 of the register was duly handed over to the postal ecific finding by the Ld CIT(A), the provided to the assessee asserting that said notice Authorities on 31/03/2015, therefore, the the assessee to obtain such from the Assessing Officer invoking Right to Information Act, 2005. as regard to the contention of the assessee of certificate of the Postal said certificate has been issued by the ‘Santacruz West Post Office as under: TO WHOMSOEVER IT MAY CONCERNED THE SPEED POST ARTICLE NO. EM1966639731N WAS RECEIVED AND DELIVERED 09/04/2015 BY THE POSTMAN OF SANTACRUZ WEST POST OFFICE” 6.4 The Ld. Counsel did not rebut the submission of the certificate has been issued by the Post Office, who had delivered the notice to the assessee and not the Post Office, who had collected the said notice from the Income-tax Department register and relevant entry dated 31/03/2015 of notice issued to the assessee, where postal authorities had put of their stamp. 6.5 In the circumstances, we reject the contention of the assessee that notice was not issued within the six year assessment year. (ii) The reassessment is invalid since the actual reasons recorded were not provided to the assessee 7. The Ld. Counsel of the assessee contested that assessee has not been provided actual copy of the reasons recorded by the Assessing M/s Pebble Bay Developers Pvt. Ltd. Santacruz West Post Office’ Mumbai 400054, which reads “Santacruz west post office Mumbai 400054 TO WHOMSOEVER IT MAY CONCERNED THE SPEED POST ARTICLE NO. EM1966639731N WAS RECEIVED AND DELIVERED 09/04/2015 BY THE POSTMAN OF SANTACRUZ WEST POST OFFICE” l did not rebut the submission of the certificate has been issued by the Post Office, who had delivered the notice to the assessee and not the Post Office, who had collected the said notice from Department. The Ld. CIT(A) has also referred to nd relevant entry dated 31/03/2015 of notice issued to the assessee, where postal authorities had put of their stamp. In the circumstances, we reject the contention of the assessee that notice was not issued within the six years from the end he reassessment is invalid since the actual reasons recorded were not provided to the assessee; l of the assessee contested that assessee has not been provided actual copy of the reasons recorded by the Assessing M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 10 Mumbai 400054, which reads TO WHOMSOEVER IT MAY CONCERNED THE SPEED POST ARTICLE NO. EM1966639731N WAS RECEIVED AND DELIVERED ON DATED 09/04/2015 BY THE POSTMAN OF SANTACRUZ WEST POST OFFICE” l did not rebut the submission of the Ld. DR that the certificate has been issued by the Post Office, who had delivered the notice to the assessee and not the Post Office, who had collected the said notice from . The Ld. CIT(A) has also referred to the dispatch nd relevant entry dated 31/03/2015 of notice issued to the assessee, In the circumstances, we reject the contention of the assessee that end of the relevant he reassessment is invalid since the actual reasons recorded were l of the assessee contested that assessee has not been provided actual copy of the reasons recorded by the Assessing Officer, but only a mere reproduction of the same dated 29/12/2015. According to the undisputedly issued to the assessee beyond 31/03/2015 and therefore same are beyond the timeline Counsel submitted that assessment has been framed without supplying the reasons within six years from the end of the relevant assessment year, therefore, same deserve to be Counsel relied on the decision of the Hon’ble Delhi High Court in the case of Haryana Acrylic mgg Co. Vs CIT (2009) 308 ITR 38 (Delhi). 7.1 The learned DR on the other hand submitted that has not substantiated that the reasons communicated to the assessee are any way different then reasons According to him, it hardly makes difference if the Assessing Officer provide a photocopy of the reasons or reproduce no reasons were recorded submitted that it is the presumption of the Ld and no such objections were raised immediately after providing th M/s Pebble Bay Developers Pvt. Ltd. production of the same has been provided by way of dated 29/12/2015. According to the Ld. Counsel, reasons recorded have been to the assessee beyond 31/03/2015 and therefore same ne prescribed for reopening the assessment. The learne l submitted that assessment has been framed without supplying the reasons within six years from the end of the relevant assessment year, same deserve to be quashed. In support of his contention the relied on the decision of the Hon’ble Delhi High Court in the case of Haryana Acrylic mgg Co. Vs CIT (2009) 308 ITR 38 (Delhi). DR on the other hand submitted that firstly the assessee substantiated that the reasons communicated to the assessee are any reasons actually recorded by the Assessing Officer. According to him, it hardly makes difference if the Assessing Officer provide a photocopy of the reasons or reproduce them in a letter unless it is proved that no reasons were recorded or different reasons are recorded it is the presumption of the Ld. Counsel of the assessee only and no such objections were raised immediately after providing th M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 11 by way of a letter recorded have been to the assessee beyond 31/03/2015 and therefore same for reopening the assessment. The learned l submitted that assessment has been framed without supplying the reasons within six years from the end of the relevant assessment year, . In support of his contention the Ld. relied on the decision of the Hon’ble Delhi High Court in the case of Haryana Acrylic mgg Co. Vs CIT (2009) 308 ITR 38 (Delhi). firstly the assessee substantiated that the reasons communicated to the assessee are any actually recorded by the Assessing Officer. According to him, it hardly makes difference if the Assessing Officer provide a them in a letter unless it is proved that or different reasons are recorded. The Ld. DR Counsel of the assessee only and no such objections were raised immediately after providing the reasons. 7.2 Further, he submitted that under section 148 of the Act relevant assessment year and assessee only after filing return of income section 148 of the Act as laid down by Hon’ble Supreme Court in the case of GKN Driveshaft (India) Ltd. v. ITO (2003) 259 ITR 19 (SC). 7.3 We have heard rival submission of the parties on the and perused the relevant material on record. able to substantiate that reasons provided manner from the actual reason recorded by the Assessing Officer and no such objection was ever raised before the Assessing Officer and thus raising the issue that reason supplied to the assessee is different then only imagination of the asses rejected. As regarding objection o years is concerned, we find that u period, it is prescribed been issued prior to expiry of six year from the year. In the instant case relevant assessment year is 2008 M/s Pebble Bay Developers Pvt. Ltd. Further, he submitted that the law only prescribe for issue of notice of the Act prior to expiry of six years from relevant assessment year and subsequently, reasons can be provided to the er filing return of income after responding as laid down by Hon’ble Supreme Court in the case of GKN Driveshaft (India) Ltd. v. ITO (2003) 259 ITR 19 (SC). We have heard rival submission of the parties on the and perused the relevant material on record. The Ld. Counsel has not been able to substantiate that reasons provided to the assessee are different in manner from the actual reason recorded by the Assessing Officer and no such was ever raised before the Assessing Officer and thus raising the issue that reason supplied to the assessee is different then only imagination of the assessee, which is unsubstantiated and As regarding objection of providing reasons beyond ex , we find that under section 149 of the Act prescribed that notice under section 148 of the been issued prior to expiry of six year from the end of the relevant assessment year. In the instant case relevant assessment year is 2008 M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 12 the law only prescribe for issue of notice prior to expiry of six years from the end of the reasons can be provided to the after responding to notice under as laid down by Hon’ble Supreme Court in the case of GKN Driveshaft (India) Ltd. v. ITO (2003) 259 ITR 19 (SC). We have heard rival submission of the parties on the issue in dispute Counsel has not been to the assessee are different in any manner from the actual reason recorded by the Assessing Officer and no such was ever raised before the Assessing Officer and thus raising the issue that reason supplied to the assessee is different then, actual reasons is , which is unsubstantiated and accordingly sons beyond expiry of six 149 of the Act during relevant that notice under section 148 of the Act could have e relevant assessment year. In the instant case relevant assessment year is 2008-09 and therefore notice under section 148 of the 31/03/2015, and which has been issued part of this order. As far as providing of reasons recorde concerned, the Hon’ble Supreme Court in the case of GKN Limited (supra) held as under: “We see no justifiable reason to interfere with the order under challenge. However, the Income tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notices issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years. 7.4 Thus, the assessee could have sought the reasons recorded only after filing the return of income. The Assessing Officer has noted in the assessment order that assessee by requested to treat the return of revised on 12/05/2009 M/s Pebble Bay Developers Pvt. Ltd. notice under section 148 of the Act could have been issued before , and which has been issued on 31.03.2015 as held by us in earlier As far as providing of reasons recorded to the assessee, is Hon’ble Supreme Court in the case of GKN Driveshaft Private held as under: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 the Income tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. e assessing officer is bound to furnish reasons within a reasonable receipt of reasons, the notices is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years.” Thus, the assessee could have sought the reasons recorded only after filing the return of income. The Assessing Officer has noted in the assessment order that assessee by way of a letter dated 24 to treat the return of income filed on 30/09/2008 revised on 12/05/2009, as return of income in response to notice dated M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 13 could have been issued before on 31.03.2015 as held by us in earlier d to the assessee, is Driveshaft Private We see no justifiable reason to interfere with the order under Section 148 of the Income tax Act is issued, the proper course of action for the notices is to file return and if he so desires, to seek reasons for issuing notices. e assessing officer is bound to furnish reasons within a reasonable is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five Thus, the assessee could have sought the reasons recorded only after filing the return of income. The Assessing Officer has noted in the impugned letter dated 24 th April 2015 income filed on 30/09/2008, which was income in response to notice dated u/s 148 dated 31/03/ 2015. The assessee subsequently requested for reasons for reopening & provided to the assessee by letter dated 29/12/2015. In the circumstances, the contention of the Ld. recorded should have been provided to the assessee prior to the six years from the end of the relevant assessment year with provisions of the law, reasons recorded, the Hon’ble Delhi High Court in the case of Acrylic Mfg Co (supra) “22. This argument suffers from several infirmities. First of all, the respondents cannot be permitted to gloss over the fact that the reasons which were supplied to the petitioner were different from the reasons purportedly recorded in the said form on whi reasons in the said form were the ‘actual’ reasons, why were they not communicated to the petitioner? Why was nothing said about these reasons (noted in the form) when the petitioner filed its objections to the reasons which were supplied to it? It must be remembered that in its objections, the petitioner took the specific plea that in the absence of any allegation that the petitioner had failed to disclose fully and truly all material facts necessary for assessment, the Ass jurisdiction to issue the notice under section 148 and initiate action under section 147 after four years from the end of the relevant assessment year. Despite this precise objection, there is no mention of the reasons noted in M/s Pebble Bay Developers Pvt. Ltd. 2015. The Ld. Assessing Officer has further noted that assessee subsequently requested for reasons for reopening & provided to the assessee by letter dated 29/12/2015. In the circumstances, Ld. Counsel of the assessee that copy of the reasons recorded should have been provided to the assessee prior to the six years from the end of the relevant assessment year is with provisions of the law, thus same is rejected. Regarding the supply of the Hon’ble Delhi High Court in the case of held as under: 22. This argument suffers from several infirmities. First of all, the respondents cannot be permitted to gloss over the fact that the reasons which were supplied to the petitioner were different from the reasons purportedly recorded in the said form on which they now seek to rely. If the reasons in the said form were the ‘actual’ reasons, why were they not communicated to the petitioner? Why was nothing said about these reasons (noted in the form) when the petitioner filed its objections to the h were supplied to it? It must be remembered that in its objections, the petitioner took the specific plea that in the absence of any allegation that the petitioner had failed to disclose fully and truly all material facts necessary for assessment, the Assessing Officer had no jurisdiction to issue the notice under section 148 and initiate action under section 147 after four years from the end of the relevant assessment year. Despite this precise objection, there is no mention of the reasons noted in M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 14 further noted that assessee subsequently requested for reasons for reopening & same were provided to the assessee by letter dated 29/12/2015. In the circumstances, l of the assessee that copy of the reasons recorded should have been provided to the assessee prior to the expiry of the not in accordance rejected. Regarding the supply of the Hon’ble Delhi High Court in the case of Haryana 22. This argument suffers from several infirmities. First of all, the respondents cannot be permitted to gloss over the fact that the reasons which were supplied to the petitioner were different from the reasons ch they now seek to rely. If the reasons in the said form were the ‘actual’ reasons, why were they not communicated to the petitioner? Why was nothing said about these reasons (noted in the form) when the petitioner filed its objections to the h were supplied to it? It must be remembered that in its objections, the petitioner took the specific plea that in the absence of any allegation that the petitioner had failed to disclose fully and truly all essing Officer had no jurisdiction to issue the notice under section 148 and initiate action under section 147 after four years from the end of the relevant assessment year. Despite this precise objection, there is no mention of the reasons noted in the said form in the impugned order dated 2 had regarded the reasons noted in the said form to be the ‘actual’ reasons, it would have been very easy for the Assessing Officer to have countered this objection by simply referring to the saying that the allegation of failure to disclose is very much there. It is obvious that the reasons noted in the said form were never regarded as the reasons for initiating action under section 147 of the said Act. Thus, the respondents cannot now be permitted to fall back on those purported reasons noted in the said form. 23. Secondly, let us assume for the sake of argument that the ‘actual’ reasons were those as noted in the said form. Then why did the Assessing Officer comm to the petitioner? Did he think that the supplying of reasons and the inviting of objections were mere charades? Did he think that it was a mere pretence or a formality which had to be gotten over with? At this point, it would be well to remember that the Supreme Court in GKN Driveshafts (India) Ltd.’s case had specifically directed that when a notice under section 148 of the said Act is issued and the noticee files a return and seeks reasons for the issuance of the notice furnish reasons within a reasonable time. On receipt of the reasons, the noticee is entitled to file objections to the issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. These are specific directions given by the Supreme Court in all cases where notices under section 148 of the said Act are issued. Surely, the Assessing Officer could not have construed these specific directions to be a mere empty formalities or dead l behind the directions issued by the Supreme Court and that is to prevent high-handedness on the part of Assessing Officers and to temper any action contemplated under section 147 of the said Act by reason and sub fact, even section 148 (2) stipulates that the Assessing Officer shall, before M/s Pebble Bay Developers Pvt. Ltd. id form in the impugned order dated 2-3-2005. If the respondents had regarded the reasons noted in the said form to be the ‘actual’ reasons, it would have been very easy for the Assessing Officer to have countered this objection by simply referring to the reasons noted in the form and saying that the allegation of failure to disclose is very much there. It is obvious that the reasons noted in the said form were never regarded as the reasons for initiating action under section 147 of the said Act. Thus, the respondents cannot now be permitted to fall back on those purported reasons noted in the said form. 23. Secondly, let us assume for the sake of argument that the ‘actual’ reasons were those as noted in the said form. Then why did the Assessing Officer communicate a different set of reasons to the petitioner? Did he think that the supplying of reasons and the inviting of objections were mere charades? Did he think that it was a mere pretence or a formality which had to be gotten over with? At this point, it would be well to remember that the Supreme Court in GKN Driveshafts (India) Ltd.’s case had specifically directed that when a notice under section 148 of the said Act is issued and the noticee files a return and seeks reasons for the issuance of the notice, the Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of the reasons, the noticee is entitled to file objections to the issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking der. These are specific directions given by the Supreme Court in all cases where notices under section 148 of the said Act are issued. Surely, the Assessing Officer could not have construed these specific directions to be a mere empty formalities or dead letters? There is a strong logic and purpose behind the directions issued by the Supreme Court and that is to prevent handedness on the part of Assessing Officers and to temper any action contemplated under section 147 of the said Act by reason and sub fact, even section 148 (2) stipulates that the Assessing Officer shall, before M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 15 2005. If the respondents had regarded the reasons noted in the said form to be the ‘actual’ reasons, it would have been very easy for the Assessing Officer to have countered reasons noted in the form and saying that the allegation of failure to disclose is very much there. It is obvious that the reasons noted in the said form were never regarded as the reasons for initiating action under section 147 of the said Act. Thus, the respondents cannot now be permitted to fall back on those purported reasons noted in the said form. 23. Secondly, let us assume for the sake of argument that the ‘actual’ reasons were those as noted in the said form. unicate a different set of reasons to the petitioner? Did he think that the supplying of reasons and the inviting of objections were mere charades? Did he think that it was a mere pretence or a formality which had to be gotten over with? At this point, it would be well to remember that the Supreme Court in GKN Driveshafts (India) Ltd.’s case had specifically directed that when a notice under section 148 of the said Act is issued and the noticee files a return and seeks , the Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of the reasons, the noticee is entitled to file objections to the issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking der. These are specific directions given by the Supreme Court in all cases where notices under section 148 of the said Act are issued. Surely, the Assessing Officer could not have construed these specific directions to be a etters? There is a strong logic and purpose behind the directions issued by the Supreme Court and that is to prevent handedness on the part of Assessing Officers and to temper any action contemplated under section 147 of the said Act by reason and substance. In fact, even section 148 (2) stipulates that the Assessing Officer shall, before issuing any notice under the said section, record his reasons for doing so. The Supreme Court has only carried forward this mandatory requirement by directing that th assessee within a reasonable period of time so that at that stage itself the assessee may point out any objections that he may have with regard to the initiation of action under section 147 of the said Ac recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen assessments which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons. These steps are also designed to ensure complete transparency and adherence to the principles of natural justice. Thus, a deviation from these dire nullifying of the proceedings. Assuming as we have done that the ‘actual’ reasons were those as noted in the said form, it is obvious that the reasons were never communicated to the petitioner and it is only for the first time in the course of the present writ petition that those ‘reasons’ have surfaced. Therefore, if he proceeded on the assumption that the ‘actual’ reasons were those as noted in the said form, the proper course of action as directed by the Supreme Court in GKN Drive followed. It would mean that the reasons which were supplied to the petitioner were not the actual reasons and the objections which were taken by the petitioner were not to the actual reasons and the speaking order dated 2-3-2005 which was passed was also neither on the basis of the actual reasons nor the objections to the actual reasons. The entire process would be a sham and would amount to making a mockery of the law as settled by the Supreme Court. Therefore, for under section 148 as well as all proceedings subsequent thereto as also the order dated 2- M/s Pebble Bay Developers Pvt. Ltd. issuing any notice under the said section, record his reasons for doing so. The Supreme Court has only carried forward this mandatory requirement by directing that the reasons which are recorded be communicated to the assessee within a reasonable period of time so that at that stage itself the assessee may point out any objections that he may have with regard to the initiation of action under section 147 of the said Act. The requirement of recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons. These steps are also designed to ensure complete transparency and adherence to the principles of natural justice. Thus, a deviation from these directions would entail the nullifying of the proceedings. Assuming as we have done that the ‘actual’ reasons were those as noted in the said form, it is obvious that the reasons were never communicated to the petitioner and it is only for the first time e course of the present writ petition that those ‘reasons’ have surfaced. Therefore, if he proceeded on the assumption that the ‘actual’ reasons were those as noted in the said form, the proper course of action as directed by the Supreme Court in GKN Driveshafts (India) Ltd.’s case, has not been followed. It would mean that the reasons which were supplied to the petitioner were not the actual reasons and the objections which were taken by the petitioner were not to the actual reasons and the speaking order 2005 which was passed was also neither on the basis of the actual reasons nor the objections to the actual reasons. The entire process would be a sham and would amount to making a mockery of the law as settled by the Supreme Court. Therefore, for this reason also, the notice under section 148 as well as all proceedings subsequent thereto as also the -3-2005 are liable to be quashed.” M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 16 issuing any notice under the said section, record his reasons for doing so. The Supreme Court has only carried forward this mandatory requirement e reasons which are recorded be communicated to the assessee within a reasonable period of time so that at that stage itself the assessee may point out any objections that he may have with regard to the t. The requirement of recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons. These steps are also designed to ensure complete transparency and adherence to the principles of ctions would entail the nullifying of the proceedings. Assuming as we have done that the ‘actual’ reasons were those as noted in the said form, it is obvious that the reasons were never communicated to the petitioner and it is only for the first time e course of the present writ petition that those ‘reasons’ have surfaced. Therefore, if he proceeded on the assumption that the ‘actual’ reasons were those as noted in the said form, the proper course of action as directed by shafts (India) Ltd.’s case, has not been followed. It would mean that the reasons which were supplied to the petitioner were not the actual reasons and the objections which were taken by the petitioner were not to the actual reasons and the speaking order 2005 which was passed was also neither on the basis of the actual reasons nor the objections to the actual reasons. The entire process would be a sham and would amount to making a mockery of the law as this reason also, the notice under section 148 as well as all proceedings subsequent thereto as also the 7.6 In the above case, the assessee filed objection against the reasons recorded, which were duly disp present case, the assessee Officer challenging the copy of reasons provided The Ld. CIT(A) in para 4.9 of the impugned order has held th objections were filed before the Assessing Officer till completion of the assessment order i.e. 31/3/2016 and therefore Assessing Officer has completed the assessment following due procedure of law. For ready reference said finding of the Ld. CIT(A) 4.9. It is further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. No evidence of filing proceedings. Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find merits in the contention of the appellant. The Grounds of Appeal No. 'C' is thus, dismissed and the reopening of the assessment is upheld. 7.7 Moreover in the case, the reasons recorded are different from the reasons to believe communicated to the assessee by way of letter of the Assessing Officer. reliance placed by the Ld Coun M/s Pebble Bay Developers Pvt. Ltd. In the above case, the assessee filed objection against the reasons recorded, which were duly disposed of by the Assessing Officer. But in the , the assessee did not file any objection before the Assessing Officer challenging the copy of reasons provided as not the actual reasons. The Ld. CIT(A) in para 4.9 of the impugned order has held th objections were filed before the Assessing Officer till completion of the assessment order i.e. 31/3/2016 and therefore Assessing Officer has completed the assessment following due procedure of law. For ready finding of the Ld. CIT(A) is reproduced as under: 4.9. It is further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. evidence of filing any objection is produced in the appellate Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find merits in the contention of the appellant. The Grounds of Appeal No. 'C' is thus, dismissed and the reopening of the assessment is upheld. Moreover in the case, the assessee has not represented that actual reasons recorded are different from the reasons to believe communicated to the assessee by way of letter of the Assessing Officer. In view of above, the reliance placed by the Ld Counsel of the assessee on the decision of t M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 17 In the above case, the assessee filed objection against the reasons of by the Assessing Officer. But in the objection before the Assessing s not the actual reasons. The Ld. CIT(A) in para 4.9 of the impugned order has held that no objections were filed before the Assessing Officer till completion of the assessment order i.e. 31/3/2016 and therefore Assessing Officer has completed the assessment following due procedure of law. For ready is reproduced as under: 4.9. It is further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. any objection is produced in the appellate Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find merits in the contention of the appellant. The Grounds of Appeal No. 'A' to 'C' is thus, dismissed and the reopening of the assessment is upheld.” has not represented that actual reasons recorded are different from the reasons to believe communicated to In view of above, the l of the assessee on the decision of the Hon’ble Delhi High Court in the case of Haryana Acrylic Mfg Ltd (supra) is of no assistance to the assessee. (iii) Improper sanction and satisfaction of the sanctioning authority as per section 151 of the 8. The Ld. Counsel of the assessee submitted that in the case as per the provisions of the Act reasons recorded by the Assessing Officer should have been approved by the Additional Commissioner of Income Ld. CIT(A) in the impugned order has mentioned that a forwarding letter regarding approval was received from the office of the Commissioner by the Assessing Officer and a copy of the to the AR of assessee during appellate proceedings, delivered to the another chartered accountant assessment/first appellate proceedings and therefore the ensure to issue direction for producing the said records . 8.1 The Ld. DR on the other hand objected that the assessee is making wild allegations despite providing evidence by the Ld. CIT(A) to the Representative of the assessee, and now assessee cannot M/s Pebble Bay Developers Pvt. Ltd. Hon’ble Delhi High Court in the case of Haryana Acrylic Mfg Ltd (supra) is of no assistance to the assessee. mproper sanction and satisfaction of the sanctioning authority as per section 151 of the Act; l of the assessee submitted that in the case as per the reasons recorded by the Assessing Officer should have Additional Commissioner of Income-tax r ncome-tax. The Ld. Counsel has further mentioned that the Ld. CIT(A) in the impugned order has mentioned that a forwarding letter regarding approval was received from the office of the Commissioner by the Assessing Officer and a copy of the same was during appellate proceedings, but same delivered to the another chartered accountant, who was handling the assessment/first appellate proceedings and therefore the issue direction for producing the said records . DR on the other hand objected that the assessee is making wild allegations despite providing evidence by the Ld. CIT(A) to the of the assessee, and now assessee cannot shift its burden to M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 18 Hon’ble Delhi High Court in the case of Haryana Acrylic Mfg Ltd (supra) is of mproper sanction and satisfaction of the sanctioning authority as l of the assessee submitted that in the case as per the reasons recorded by the Assessing Officer should have tax rather than the urther mentioned that the Ld. CIT(A) in the impugned order has mentioned that a forwarding letter regarding approval was received from the office of the Additional same was provided same might have been who was handling the assessment/first appellate proceedings and therefore the Tribunal should DR on the other hand objected that the assessee is making wild allegations despite providing evidence by the Ld. CIT(A) to the Authorized shift its burden to the Tribunal for providing the evidence which were already provided to the assessee during first appellate 8.2 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on rec impugned order of the Ld. CIT(A) that the approval/sanction for notice under section 148 of the under the provisions of section 151 of the representative of the assessee. reasons recorded, are only ba circumstances, we reject the contention of the learne that no proper sanction/approval Assessing Officer. (iv) Reasons were recorded based on whole basis of the reassessment did not exist; 9. The arguments made by the summarized by him in the written submission as under: “d. Reasons recorded based on incorrect facts: M/s Pebble Bay Developers Pvt. Ltd. ribunal for providing the evidence which were already provided to the first appellate proceedings. We have heard rival submission of the parties on the issue in dispute the relevant material on record. It is evident from the para 4.2 of impugned order of the Ld. CIT(A) that he provided the document in support of the approval/sanction for notice under section 148 of the under the provisions of section 151 of the Act, to the author representative of the assessee. The allegation of no proper approval of are only based on presumption and surmises circumstances, we reject the contention of the learned Coun that no proper sanction/approval was granted for the reasons recorded by the were recorded based on incorrect facts and particularly the whole basis of the reassessment did not exist; arguments made by the Ld. Counsel on the issue has been him in the written submission as under: Reasons recorded based on incorrect facts: M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 19 ribunal for providing the evidence which were already provided to the We have heard rival submission of the parties on the issue in dispute ord. It is evident from the para 4.2 of provided the document in support of the approval/sanction for notice under section 148 of the Act as prescribed to the authorized The allegation of no proper approval of sed on presumption and surmises. In the Counsel of the assessee the reasons recorded by the incorrect facts and particularly the on the issue has been i. The Appellant further submits, that the reasons recorded by the AO are based on erroneous and incorrect facts. The same could be manifested from the following: 1. According to the AO as stated in his reasons, the project between, Kanyakumari Builders P. Ltd. (KBPL) and L K Trust was transferred to Pebblebay Developers, the Appellant. However, the transaction only pertained to land and no project as such was in existence at said transfer and consequently there is no question of transfer of any project. 2. The AO has further alleged that certain expenditure was incurred by KBPL in cash towards vacation / evictment of the hutments which was ori expenditure in the case of KBPL has itself not been proved by the AO or established on facts by him. Appellant / KBPL are through Account Payee Cheques Mr. Anand whose identity is not in doubt and who had undertaken the work of clearing hutments which is evidenced by his Confirmation and related evidences. (Ref. Copy of Appellant's Letter dated pg.155 to 180 of PB, reflecting the impugned payments, pg.156 of PB, Copy of Aadhar Card of Mr. Anand at pg. 157 of PB, Copy of Ledger Account of L.K Trust in the Appellant's books at and Sample Copy of Cheques / Drafts at pg. 170 to 180 of whole assumption of the AO of incurring of cash Appellant is totally erroneous. 3. Lastly, the AO has also incorrectly stated in the reasons tha cash expenditure incurred by KBPL is claimed as cost by which is factually incorrect. In this regard it is impugned amounts paid to Anand were recorded in the Balance sheet as M/s Pebble Bay Developers Pvt. Ltd. The Appellant further submits, that the reasons recorded by the AO are based on erroneous and incorrect facts. The same could be manifested from the following: g to the AO as stated in his reasons, the project between, Kanyakumari Builders P. Ltd. (KBPL) and L K Trust was transferred to Pebblebay Developers, the Appellant. However, the transaction only pertained to land and no project as such was in existence at said transfer and consequently there is no question of transfer of any The AO has further alleged that certain expenditure was incurred by KBPL in cash towards vacation / evictment of the hutments which was originally sold to it by LK Trust. Firstly, the allegation of cash expenditure in the case of KBPL has itself not been proved by the AO or established on facts by him. Secondly, even the payments made by the Appellant / KBPL are through Account Payee Cheques Mr. Anand whose identity is not in doubt and who had undertaken the work clearing hutments which is evidenced by his Confirmation and related evidences. (Ref. Copy of Appellant's Letter dated pg.155 to 180 of PB, Bank Statements of the Appellant at pg. 91 to 98 of PB reflecting the impugned payments, Copy of Confirmation of Mr. Anand at pg.156 of PB, Copy of Aadhar Card of Mr. Anand at pg. 157 of PB, Copy of Account of L.K Trust in the Appellant's books at and Sample Copy of Cheques / Drafts at pg. 170 to 180 of whole assumption of the AO of incurring of cash Appellant is totally erroneous. Lastly, the AO has also incorrectly stated in the reasons tha cash expenditure incurred by KBPL is claimed as cost by which is factually incorrect. In this regard it is relevant to note that the impugned amounts paid to Anand were recorded in the Balance sheet as M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 20 The Appellant further submits, that the reasons recorded by the AO are based on erroneous and incorrect facts. The same could be manifested from g to the AO as stated in his reasons, the project between, Kanyakumari Builders P. Ltd. (KBPL) and L K Trust was transferred to Pebblebay Developers, the Appellant. However, the transaction only pertained to land and no project as such was in existence at the time of the said transfer and consequently there is no question of transfer of any The AO has further alleged that certain expenditure was incurred by KBPL in cash towards vacation / evictment of the hutments existing on the land Firstly, the allegation of cash expenditure in the case of KBPL has itself not been proved by the AO or Secondly, even the payments made by the Appellant / KBPL are through Account Payee Cheques / Bank Drafts to one Mr. Anand whose identity is not in doubt and who had undertaken the work clearing hutments which is evidenced by his Confirmation and other related evidences. (Ref. Copy of Appellant's Letter dated 29.03.2016 at Bank Statements of the Appellant at pg. 91 to 98 of PB Copy of Confirmation of Mr. Anand at pg.156 of PB, Copy of Aadhar Card of Mr. Anand at pg. 157 of PB, Copy of Account of L.K Trust in the Appellant's books at pg. 158 to 161 of PB and Sample Copy of Cheques / Drafts at pg. 170 to 180 of PB.). As such the whole assumption of the AO of incurring of cash expenditure by the Lastly, the AO has also incorrectly stated in the reasons that the alleged cash expenditure incurred by KBPL is claimed as cost by the Appellant relevant to note that the impugned amounts paid to Anand were recorded in the Balance sheet as advances reflected in the which were written off in the 31.03.2010. However, in the 11 the said amounts were added back (Ref. Schedule 7 of the Annual Report for the year ended 31.03.2010 at pg. 58 of PB & Computation of Income for AY 2009-10 & AY 2010 claiming the said amount as cost is also 4. It also needs mention that even as per the order Sessions Judge (which has been used as a basis for re held that no cash expenditure is incurred by consequence, therefore, there is no question of holding that cash expenditure is Judge and particularly, pg. 244 of PB for issues before the Court, pg.252, 253, 255 of PB wherein it is accepted that cheque payment was made to one Mr. Anand who in turn paid cash to the slum dw PB wherein the issues as regards cash expenditure are decided against KBPL]. ii. In view of the above it is evident that reasons and consequently the re-assessment is based on incorrect facts and as such is bad deserves to be quashed. The Appellant relies on the support of its contention: Hindustan Dorr Oliver Ltd. vs P. K. Kedia ".....7. Considering the above discussion as the notice itself is not material andlor on non to believe' is based on no M/s Pebble Bay Developers Pvt. Ltd. advances reflected in the Balance Sheet as on 31.03.2007 & 31.03.2008 which were written off in the Financial Year ending 31.03.2009 & 31.03.2010. However, in the computation of income for AY 2009 11 the said amounts were added back (Ref. Schedule 7 of the Annual Report or the year ended 31.03.2010 at pg. 58 of PB & Computation of Income for 10 & AY 2010-11 at pg.37 to 77 of PB). As such the assumption of claiming the said amount as cost is also factually incorrect. It also needs mention that even as per the order of the Hon'ble City Sessions Judge (which has been used as a basis for re held that no cash expenditure is incurred by even KBPL. As a natural consequence, therefore, there is no question of holding that cash expenditure is incurred by the Assessee [Ref. order of the Hon'ble Sessions Judge and particularly, pg. 244 of PB for issues before the Court, pg.252, 253, 255 of PB wherein it is accepted that cheque payment was made to one Mr. Anand who in turn paid cash to the slum dwellers, and pgs. PB wherein the issues as regards cash expenditure are decided against In view of the above it is evident that reasons and consequently the assessment is based on incorrect facts and as such is bad serves to be quashed. The Appellant relies on the following judgement in support of its contention: Hindustan Dorr Oliver Ltd. vs P. K. Kedia - (2008) 305 ITR 0282 ".....7. Considering the above discussion as the notice itself is not ial andlor on non-existing material, the formation of opinion or 'reasons to believe' is based on no material, must be quashed and set aside." M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 21 Sheet as on 31.03.2007 & 31.03.2008 Financial Year ending 31.03.2009 & computation of income for AY 2009-10 & 2010- 11 the said amounts were added back (Ref. Schedule 7 of the Annual Report or the year ended 31.03.2010 at pg. 58 of PB & Computation of Income for such the assumption of factually incorrect. of the Hon'ble City Civil and Sessions Judge (which has been used as a basis for re-opening) it has been even KBPL. As a natural consequence, therefore, there is no question of holding that cash incurred by the Assessee [Ref. order of the Hon'ble Sessions Judge and particularly, pg. 244 of PB for issues before the Court, pg.252, 253, 255 of PB wherein it is accepted that cheque payment was made to one ellers, and pgs. 278, 279 of PB wherein the issues as regards cash expenditure are decided against In view of the above it is evident that reasons and consequently the entire assessment is based on incorrect facts and as such is bad in law and following judgement in (2008) 305 ITR 0282 (Bom) ".....7. Considering the above discussion as the notice itself is not based on any formation of opinion or 'reasons material, must be quashed and set aside." 9.1 The Ld. DR vehemently opposed the above submission of the counsel of the assessee. He submitted that at t the Assessing Officer has assessment on the basis of the material before him and he is not required to establish the facts at the stage of recording reasons. 9.2 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The first grievance of the assessee is that the allegations of the cash expenditure has not been proved by the Assessing Officer or establish allegation of cash expenditure incurred by KBPL has been claimed as cost by the assessee, is not factually correct. factual correctness of the reasons recorded. We may like to m Hon’ble Supreme Court in the case of 236 ITR 34 (SC) has information/material is not required to be seen at the stage of recording of the reasons. Further, in the deci Hindustan Dorr Oliver Ltd material, whereas in the case M/s Pebble Bay Developers Pvt. Ltd. DR vehemently opposed the above submission of the of the assessee. He submitted that at the stage of recording reasons, has to record reasons to believe that income escaped the on the basis of the material before him and he is not required to establish the facts at the stage of recording reasons. heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The first grievance of the assessee is that the allegations of the cash expenditure has not been proved by the Assessing Officer or established on facts. The second grievance is that the cash expenditure incurred by KBPL has been claimed as cost by is not factually correct. We find that the assessee factual correctness of the reasons recorded. We may like to m Hon’ble Supreme Court in the case of Raymond Woollen has held that sufficiency or correctness of the is not required to be seen at the stage of recording of the reasons. Further, in the decision relied upon by the assessee in the case of Hindustan Dorr Oliver Ltd. (supra), reasons were based on nonexistence , whereas in the case correctness of the facts has been M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 22 DR vehemently opposed the above submission of the Ld. he stage of recording reasons, that income escaped the on the basis of the material before him and he is not required to heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The first grievance of the assessee is that the allegations of the cash expenditure has not been proved by cts. The second grievance is that the cash expenditure incurred by KBPL has been claimed as cost by assessee is challenging factual correctness of the reasons recorded. We may like to mention that Woollen Mills Ltd (1999) that sufficiency or correctness of the is not required to be seen at the stage of recording of sion relied upon by the assessee in the case of based on nonexistence has been challenged, therefore the decision relied upon by the assessee is Further, in case of Export Credit Guarantee Corporation of India Ltd. v. Addl. CIT (2013) 30 taxmann.com 211 (Bom) held that facts are not required to established at the stage of rec reasons. Accordingly, we reject the contention of the assessee to quash the reassessment in view of the above arguments. (v) Reasons recorded by the Assessing Officer are vague, without application of mind and at the most mere reasons to suspect and no reason to believe; 10. According to the Ld. has not been established that any expenditure therefore whole assumption of escapement of income is based merely on suspicion. The Ld. counsel by account payee cheques of said alleged cash expenditure has been made by the assessee. He further submitted that entire transaction of vacati land for development was a revenue neutral transaction. According to the M/s Pebble Bay Developers Pvt. Ltd. therefore the decision relied upon by the assessee is distinguishable Export Credit Guarantee Corporation of India Ltd. v. Addl. CIT (2013) 30 taxmann.com 211 (Bom) Hon’ble Bombay High Court are not required to established at the stage of rec we reject the contention of the Ld. counsel the reassessment in view of the above arguments. recorded by the Assessing Officer are vague, without application of mind and at the most mere reasons to suspect and no Ld. Counsel, even in the case of sister concern KBPL it has not been established that any expenditure was incurred in cash and therefore whole assumption of escapement of income is based merely on Ld. counsel submitted that in fact assessee has made payment ques and bank draft to an identified person and no claim of said alleged cash expenditure has been made by the assessee. He further submitted that entire transaction of vacating the hutments and clearing the land for development was a revenue neutral transaction. According to the M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 23 distinguishable on facts. Export Credit Guarantee Corporation of India Ltd. v. ble Bombay High Court are not required to established at the stage of recording of Ld. counsel of the the reassessment in view of the above arguments. recorded by the Assessing Officer are vague, without application of mind and at the most mere reasons to suspect and not even in the case of sister concern KBPL it incurred in cash and therefore whole assumption of escapement of income is based merely on submitted that in fact assessee has made payment and bank draft to an identified person and no claim of said alleged cash expenditure has been made by the assessee. He further ng the hutments and clearing the land for development was a revenue neutral transaction. According to the Ld. Counsel in view of above application of the mind and nothing more than a suspicion. 10.1 The Ld. DR on the other hand submitted that recorded on the basis of the decision of the Hon’ble Civil and Sessions Judge reimbursement of expenses from LK trust and deta amounting to ₹25,58,00, recorded are based on relevant material wherein amount of income escaped has been clearly identified. The contentions of the that reasons recorded being not applied his mind while recording the reasons any supporting evidence, therefore same are rejected. (vi) The reassessment is initiated on the assumption income; 11. According to the received by the assessee from LK trust nor any claim of account for expenditure made of hutments therefore reasons recorded a M/s Pebble Bay Developers Pvt. Ltd. above discussion the reasons recorded are vague without application of the mind and nothing more than a suspicion. DR on the other hand submitted that reasons have been recorded on the basis of the decision of the Hon’ble Court of Additional city and Sessions Judge, wherein it is held that M/s KBPL made claim for reimbursement of expenses from LK trust and detail of cash expenses ,58,00,000/- was submitted. In our opinion, the reasons recorded are based on relevant material wherein amount of income escaped has been clearly identified. The contentions of the Ld. Counse recorded being vague, based on suspicion as well as ind while recording the reasons, are baseless any supporting evidence, therefore same are rejected. he reassessment is initiated on the assumption & to the Ld. Counsel of the assessee neither any sum was received by the assessee from LK trust nor any claim has been made in books for expenditure made in respect of the amounts spent on herefore reasons recorded are merely manifests suspicion, M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 24 discussion the reasons recorded are vague without reasons have been ourt of Additional city that M/s KBPL made claim for il of cash expenses was submitted. In our opinion, the reasons recorded are based on relevant material wherein amount of income escaped sel of the assessee based on suspicion as well as the AO has are baseless and without & escapement of l of the assessee neither any sum was has been made in books n respect of the amounts spent on removal merely manifests suspicion, assumption and presumption by the Assessing Officer. opposed this contention of the 11.1 We have heard rival submission of the parties. We find th is the assessee, who became owner of the land and Additional City Civil & Session been ultimately incurred from the books of account of the assessee. We find that the expenses on eviction by the assessee, therefore, the reasons to believe that We do not find any assumption by the Assessing Officer on the finding of Hon’ble the Ld. counsel of the assessee. 11.2 In support of the contention that reasons have been recorded on the basis of the borrowed satisfaction, the argument of the form of written submission i. From a bare reading of the reasons as recorded by the AO, it is evi that the notice issued by the AO is based on some purported information received from the investigation wing (ref. reasons at pgs.81 to 82 of PB). However, as explained in the earlier paragraphs, M/s Pebble Bay Developers Pvt. Ltd. and presumption by the Assessing Officer. The Ld. opposed this contention of the Ld. Counsel of the assessee. We have heard rival submission of the parties. We find th is the assessee, who became owner of the land and before the Hon’ble Additional City Civil & Session Judge also held that most of the expenses have been ultimately incurred from the books of account of the assessee. We find eviction of hutments are connected with the land owned refore, the Ld. Assessing Officer is justified in forming to believe that said expenditure has been incurred by the assessee. We do not find any assumption by the Assessing Officer and reasons are based on the finding of Hon’ble Sessions Judge, therefore we reject the contention of of the assessee. f the contention that reasons have been recorded on the basis of the borrowed satisfaction, the argument of the Ld. counsel form of written submission are reproduced as under: From a bare reading of the reasons as recorded by the AO, it is evi that the notice issued by the AO is based on some purported information received from the investigation wing (ref. reasons at pgs.81 to 82 of PB). However, as explained in the earlier paragraphs, M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 25 The Ld. DR vehemently We have heard rival submission of the parties. We find that ultimately it before the Hon’ble that most of the expenses have been ultimately incurred from the books of account of the assessee. We find connected with the land owned Assessing Officer is justified in forming expenditure has been incurred by the assessee. and reasons are based therefore we reject the contention of f the contention that reasons have been recorded on the Ld. counsel filed in the From a bare reading of the reasons as recorded by the AO, it is evident that the notice issued by the AO is based on some purported information received from the investigation wing (ref. reasons at pgs.81 to 82 of PB). However, as explained in the earlier paragraphs, in the reasons as well as in the order there is nothing any income chargeable to tax much less any income escaping assessment from tax. ii. The above manner in which the reasons were simply recorded for issuing notice us 148 merely relying on some information from the investigation wing and thereaf lack of application of mind by the AO while recording reasons and issuing notice w/s 148 of the Act. Such an assessment is wholly arbitrary and totally illegal and therefore deserves to be quashed. The Assessee relies contention that re information received from the investigation wing in the absence of corroborative details and without any application of mind thereto: CIT W SUREN INTERNATIONAL PT LTD Held as follows at para 14 "..In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of alleged accommodation en discloses that the same entries have been repeated six times. This is clearly indicative of the callous manner in which the reasons for initiating reassessment proceedings are recorded and we are unable to countenance that any belief based on such statements can ever be arrived at. The reasons have been recorded without any application of mind and thus no belief that income has been formed based on such reasons as recorded." CIT w/s SFIL Stock Broking Lid. M/s Pebble Bay Developers Pvt. Ltd. in the reasons as well as in the order there is nothing any income chargeable to tax much less any income escaping assessment from tax. The above manner in which the reasons were simply recorded for issuing notice us 148 merely relying on some information from the investigation wing and thereafter making additions clearly manifests lack of application of mind by the AO while recording reasons and issuing notice w/s 148 of the Act. Such an assessment is wholly arbitrary and totally illegal and therefore deserves to be quashed. The Assessee relies on the following judgements in support of its contention that re-assessment cannot be simply based upon certain information received from the investigation wing in the absence of corroborative details and without any application of mind thereto: EN INTERNATIONAL PT LTD - (2013) 85 CCH 0040 (Delhi) Held as follows at para 14- "..In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of alleged accommodation entries included in the reasons as recorded, discloses that the same entries have been repeated six times. This is clearly indicative of the callous manner in which the reasons for initiating reassessment proceedings are recorded and we are unable to ance that any belief based on such statements can ever be arrived at. The reasons have been recorded without any application of mind and thus no belief that income has escaped assessment can be stated to have been formed based on such reasons as recorded." CIT w/s SFIL Stock Broking Lid. - (2010)325 ITR 285(Del) M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 26 which evidences any income chargeable to tax much less any income escaping The above manner in which the reasons were simply recorded for issuing notice us 148 merely relying on some information from the ter making additions clearly manifests lack of application of mind by the AO while recording reasons and issuing notice w/s 148 of the Act. Such an assessment is wholly arbitrary and totally illegal and therefore deserves to be quashed. The on the following judgements in support of its assessment cannot be simply based upon certain information received from the investigation wing in the absence of corroborative details and without any application of mind thereto: (2013) 85 CCH 0040 (Delhi) "..In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of tries included in the reasons as recorded, discloses that the same entries have been repeated six times. This is clearly indicative of the callous manner in which the reasons for initiating reassessment proceedings are recorded and we are unable to ance that any belief based on such statements can ever be arrived at. The reasons have been recorded without any application of mind and escaped assessment can be stated to have (2010)325 ITR 285(Del) Held dismissing the appeal of the Dept. as follows at para 10.: ". From the above, it is clear that the A0 referred to the information and the two directions as 'reasons' on the basis of which he issue notice unders. 148. We are afraid that these cannot be the reasons for proceeding under s. 147/1 information and the second the so-called rea not at all discernible as to whether the AO had applied his mind to the information and independently arrived at a belief that, on the basis material which he had before him, income had esc Consequently, we find that the Tribunal has arrived at conclusion on facts. The law is well settled. There is no question of law which arises for our consideration... SIGNATURE HOTELS (P) LTD. ws ITO (A case where the Hon'ble High Court quashed the re proceedings on the ground that the reasons were recorded simply on the basis of information from investigation wing stating that the Assessee is a beneficiary of accommodation e recorded without any application of mind whatsoever). Held as follows: "14. The first sentence of the reasons states that information had been received from Director of IT (lnv.) that the petitioner had introduced money amountin details given in Annexure. The said Annexure, reproduced above, relates to a cheque received by the petitioner on 9th Oct., 2002 from Swetu Stone M/s Pebble Bay Developers Pvt. Ltd. Held dismissing the appeal of the Dept. as follows at para 10.: ". From the above, it is clear that the A0 referred to the information and the two directions as 'reasons' on the basis of which he was proceeding to issue notice unders. 148. We are afraid that these cannot be the reasons for proceeding under s. 147/1-18 of the said Act. The first part is only an information and the second and the third parts of the beginning para of called reasons are mere directions. From the so-called reasons, it is discernible as to whether the AO had applied his mind to the information and independently arrived at a belief that, on the basis material which he had before him, income had escaped Consequently, we find that the Tribunal has arrived at conclusion on facts. The law is well settled. There is no question of law which arises for our consideration... SIGNATURE HOTELS (P) LTD. ws ITO - (2011) 338 ITR 0051 (Delhi) (A case where the Hon'ble High Court quashed the re proceedings on the ground that the reasons were recorded simply on the basis of information from investigation wing stating that the Assessee is a beneficiary of accommodation entry and that the same were recorded without any application of mind whatsoever). Held as follows: "14. The first sentence of the reasons states that information had been received from Director of IT (lnv.) that the petitioner had introduced money amounting to Rs.5 lacs during financial year2002 details given in Annexure. The said Annexure, reproduced above, relates to a cheque received by the petitioner on 9th Oct., 2002 from Swetu Stone M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 27 Held dismissing the appeal of the Dept. as follows at para 10.: ". From the above, it is clear that the A0 referred to the information and was proceeding to issue notice unders. 148. We are afraid that these cannot be the reasons the said Act. The first part is only an and the third parts of the beginning para of called reasons, it is discernible as to whether the AO had applied his mind to the information and independently arrived at a belief that, on the basis of the aped assessment. Consequently, we find that the Tribunal has arrived at the correct conclusion on facts. The law is well settled. There is no substantial R 0051 (Delhi) (A case where the Hon'ble High Court quashed the re-assessment proceedings on the ground that the reasons were recorded simply on the basis of information from investigation wing stating that the ntry and that the same were "14. The first sentence of the reasons states that information had been received from Director of IT (lnv.) that the petitioner had introduced g to Rs.5 lacs during financial year2002-03 as per the details given in Annexure. The said Annexure, reproduced above, relates to a cheque received by the petitioner on 9th Oct., 2002 from Swetu Stone PV from the bank and the account sentence records that as per nothing but an accommodation entry and the assessee was the beneficiary. 15. The aforesaid reasons do not satisfy the requirements of s. 147 Act. The reasons and the vague. There is no reference to any document or statement, except Annexure, which has been quoted above. a material or evidence that prima which discloses not indicate escapement of income. Further, it is apparent that the AO not apply his own mind to the information and examine the material of the information. The AO a vague information in a mechanical manner. The CIT also acted on the same basis by mechanically giving his approval. reflect that the AO did not independently apply his mind to the information received f whether or not any income had escaped SARTHAK SECURITIES CO. (P) LTD. » ITO (Delhi) ".. In the case at hand, as is evincible, the AO was aware of the existence of four companies with whom the assessee had entered Both the orders clearly exposit that the AO was made aware of the situation by the Investigation Wing and there is companies are fictitious companies. Neither notice nor the communication providing independent application of mind. True it M/s Pebble Bay Developers Pvt. Ltd. PV from the bank and the account number mentioned there sentence records that as per the information, the amount received was nothing but an accommodation entry and the assessee was the 15. The aforesaid reasons do not satisfy the requirements of s. 147 Act. The reasons and the information referred to is extremely vague. There is no reference to any document or statement, except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or li which discloses escapement of income. Annexure is not a pointer and does indicate escapement of income. Further, it is apparent that the AO not apply his own mind to the information and examine the material of the information. The AO accepted the plea on vague information in a mechanical manner. The CIT also acted on the same basis by mechanically giving his approval. The reasons recorded reflect that the AO did not independently apply his mind to the information received from the Director of IT (Inv.) and arrive at a belief whether or not any income had escaped assessment... SARTHAK SECURITIES CO. (P) LTD. » ITO - (2010) 329 TR 0110 ".. In the case at hand, as is evincible, the AO was aware of the existence of companies with whom the assessee had entered into transaction. Both the orders clearly exposit that the AO was made aware of the situation by the Investigation Wing and there is no mention that these companies are fictitious companies. Neither the reasons notice nor the communication providing reasons remotely indicate independent application of mind. True it is, at that stage, it is not M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 28 number mentioned therein. The last the information, the amount received was nothing but an accommodation entry and the assessee was the 15. The aforesaid reasons do not satisfy the requirements of s. 147 of the information referred to is extremely scanty and vague. There is no reference to any document or statement, except Annexure cannot be regarded as facie shows or establishes nexus or link escapement of income. Annexure is not a pointer and does indicate escapement of income. Further, it is apparent that the AO did not apply his own mind to the information and examine the basis and ccepted the plea on the basis of vague information in a mechanical manner. The CIT also acted on the The reasons recorded reflect that the AO did not independently apply his mind to the (Inv.) and arrive at a belief (2010) 329 TR 0110 ".. In the case at hand, as is evincible, the AO was aware of the existence of into transaction. Both the orders clearly exposit that the AO was made aware of the no mention that these the reasons in the initial reasons remotely indicate is, at that stage, it is not necessary to have the established fact of is necessary is that there is rele person could have formed the proof is not germane the base or foundation or platform of prudence which a reasonable person is required to apply. As is manifest from the perusal of the supply of reasons and the order of rejection of objections, the names of the companies were available with the authority. Their existence is not disputed. What is mentioned is that these compa conduits. In that view of the matter, the principle laid down in Lovely Exports (P) Lid. (supra) gets squarely attracted. The same has not been referred to while passing the order of rejection. The assessee in his objections had clearly s payments were made to the assessee company through banking channel. The identity of the companies was not disputed. Under these circumstances, it would not be appropriate through the entire gamut of proceedings. It is totally unwarranted... ITO W M/s Comero Leasing & Financial vide order dated 14.08.2014 ... In the appeal before us, the contention of the assessee is that the Assessing Officer issued the on the basis of information alleged to have been received from the Investigation Wing without application of mind. On the facts of the case, we find this contention of the learned counsel to be correct and more on identical facts, Hon'ble Jurisdictional High Court in the case of Suren International P.Ltd. (supra) held that the reasons recorded without any application of mind cannot be said to be a proper belief with regard to escapement of income. M/s Pebble Bay Developers Pvt. Ltd. necessary to have the established fact of escapement of income but what is necessary is that there is relevant material on which a reasonable person could have formed the requisite belief. To elaborate, the conclusive proof is not germane at this stage but the formation of belief must be on foundation or platform of prudence which a reasonable required to apply. As is manifest from the perusal of the supply reasons and the order of rejection of objections, the names of the companies were available with the authority. Their existence is not disputed. What is mentioned is that these companies were used as conduits. In that view of the matter, the principle laid down in Lovely Exports (P) Lid. (supra) gets squarely attracted. The same has not been referred to while passing the order of rejection. The assessee in his objections had clearly stated that the companies had bank accounts and payments were made to the assessee company through banking channel. The identity of the companies was not disputed. Under these circumstances, it would not be appropriate to require the assessee to go the entire gamut of proceedings. It is totally unwarranted... ITO W M/s Comero Leasing & Financial - [ITA No.4281 / Del / 2010 vide order dated 14.08.2014] ... In the appeal before us, the contention of the assessee is that the Assessing Officer issued the notice under Section 148 mechanically simply on the basis of information alleged to have been received from the Investigation Wing without application of mind. On the facts of the case, we find this contention of the learned counsel to be correct and more on identical facts, Hon'ble Jurisdictional High Court in the case of Suren International P.Ltd. (supra) held that the reasons recorded without any application of mind cannot be said to be a proper belief with regard to escapement of income. We, therefore, respectfully following the decision M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 29 escapement of income but what material on which a reasonable requisite belief. To elaborate, the conclusive at this stage but the formation of belief must be on foundation or platform of prudence which a reasonable required to apply. As is manifest from the perusal of the supply reasons and the order of rejection of objections, the names of the companies were available with the authority. Their existence is not nies were used as conduits. In that view of the matter, the principle laid down in Lovely Exports (P) Lid. (supra) gets squarely attracted. The same has not been referred to while passing the order of rejection. The assessee in his tated that the companies had bank accounts and payments were made to the assessee company through banking channel. The identity of the companies was not disputed. Under these to require the assessee to go the entire gamut of proceedings. It is totally unwarranted... [ITA No.4281 / Del / 2010 ... In the appeal before us, the contention of the assessee is that the notice under Section 148 mechanically simply on the basis of information alleged to have been received from the Investigation Wing without application of mind. On the facts of the case, we find this contention of the learned counsel to be correct and moreover, on identical facts, Hon'ble Jurisdictional High Court in the case of Suren International P.Ltd. (supra) held that the reasons recorded without any application of mind cannot be said to be a proper belief with regard to fore, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of Suren International P. Lid. (supra), uphold the order oflearned CIT(A) and dismiss the appeal filed by the Revenue. ACIT v/s Shri Devesh Kumar dated 31.10.2014) "19. in the light of aforesaid discussion we are inclined to hold that in the extant case the AO proceeded to initiate proceedings us 147 of the Act and to issue notice ws 148 of the Act on the basis of information Investigation Wing of the department in the form of a CD prepared by Shri Sanjay Shah and Shri Vishesh Prakash, ITOs of Unit V. New Delhi. Subsequently, the A0 reproduced details gathered from the CD and without application of independent mi beneficiary of accommodation entries amounting to Rs. 4,51,000. In the main part of reason to believe, there is no mentioning of nature of transaction to establish and fortify the fact that the impugned transactions were in t observe that there is no mentioning of date therein and it can safely be presumed that the AO had not examined the assessment record of the assessee which was processed us 143(1)(a) of the Act on 15.3.2005 for forming a belief that the income of the assessee had escaped assessment. 20. Under these facts and circumstances, we are in agreement with the observation and conclusion of the CIT(A) that there was no material on record to show that the AO had applied her i a belief which may result in the required reason to believe as per provisions of section 147 and 148 of the Act... iii. Further admittedly, the re satisfaction of the Investigation wing and not the M/s Pebble Bay Developers Pvt. Ltd. Jurisdictional High Court in the case of Suren International P. Lid. (supra), uphold the order oflearned CIT(A) and dismiss the appeal filed by the Revenue. ACIT v/s Shri Devesh Kumar - IL.T. 4, No 2069/0.42010 vide order dated 31.10.2014) "19. in the light of aforesaid discussion we are inclined to hold that in the extant case the AO proceeded to initiate proceedings us 147 of the Act and to issue notice ws 148 of the Act on the basis of information Investigation Wing of the department in the form of a CD prepared by Shri Sanjay Shah and Shri Vishesh Prakash, ITOs of Unit V. New Delhi. Subsequently, the A0 reproduced details gathered from the CD and without application of independent mind, held that the assessee was beneficiary of accommodation entries amounting to Rs. 4,51,000. In the main part of reason to believe, there is no mentioning of nature of transaction to establish and fortify the fact that the impugned transactions were in the nature of accommodation entries. We also observe that there is no mentioning of date therein and it can safely be presumed that the AO had not examined the assessment record of the assessee which was processed us 143(1)(a) of the Act on 15.3.2005 for rming a belief that the income of the assessee had escaped assessment. 20. Under these facts and circumstances, we are in agreement with the observation and conclusion of the CIT(A) that there was no material on record to show that the AO had applied her independent mind in forming a belief which may result in the required reason to believe as per provisions of section 147 and 148 of the Act... Further admittedly, the re-assessment is issued on the borrowed satisfaction of the Investigation wing and not the M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 30 Jurisdictional High Court in the case of Suren International P. Lid. (supra), uphold the order oflearned CIT(A) and dismiss the appeal 2069/0.42010 vide order "19. in the light of aforesaid discussion we are inclined to hold that in the extant case the AO proceeded to initiate proceedings us 147 of the Act and to issue notice ws 148 of the Act on the basis of information received from Investigation Wing of the department in the form of a CD prepared by Shri Sanjay Shah and Shri Vishesh Prakash, ITOs of Unit V. New Delhi. Subsequently, the A0 reproduced details gathered from the CD and nd, held that the assessee was beneficiary of accommodation entries amounting to Rs. 4,51,000. In the main part of reason to believe, there is no mentioning of nature of transaction to establish and fortify the fact that the impugned he nature of accommodation entries. We also observe that there is no mentioning of date therein and it can safely be presumed that the AO had not examined the assessment record of the assessee which was processed us 143(1)(a) of the Act on 15.3.2005 for rming a belief that the income of the assessee had escaped assessment. 20. Under these facts and circumstances, we are in agreement with the observation and conclusion of the CIT(A) that there was no material on ndependent mind in forming a belief which may result in the required reason to believe as per assessment is issued on the borrowed satisfaction of the Investigation wing and not the objective satisfaction of the AO himself. Such a reassessment is entirely vitiated and deserves to be quashed irrespective of whether the original assessment is under section 143 (1) or 143 (3) [Ref. PCIT W Shodiman Investments Pvt. Ltd. such it is respectfully submitted that even on this count the assessment deserves to be quashed.” 11.3 We find that the Ld. CIT(A) has rejected the contention of the assessee observing as under: 4.3. The Assessing officer has regarding the transaction between M/s. Kanyakumari Builder Pvt. Ltd. and L. K. Trust and consequent litigation. The statement made before the Hon'ble Court of the XIX Addl. City Civil and Session Judge at Bangalore City clearly constitutes an admissible evidence. The Hon ble Court had held that M/s. passbook / cheque book / cash book and books of account to support the claim. In the light of cash expenditure of Rs.25,58,00,000/ Builder Prt. Ltd: towards obtaining vacant possession from the dweller / hutments in FY 2007 of section 69C recorded that the Assessee has under reported its income to the tune of Rs.25,58,00,000/ 4.4. It is therefore seen that there is tangible material nexus with formation of belief that income has escaped assessment. It is trite law that for reopening the assessment, the A.O. has to merely form reason to believe that income has escaped assessment. The reassessment M/s Pebble Bay Developers Pvt. Ltd. satisfaction of the AO himself. Such a reassessment is entirely vitiated and deserves to be quashed irrespective of whether the original assessment is under section 143 (1) or 143 (3) [Ref. PCIT W Shodiman Investments Pvt. Ltd. - (2018) 93 Taxmann.com 153 (Bombay)l. As such it is respectfully submitted that even on this count the assessment deserves to be quashed.” find that the Ld. CIT(A) has rejected the contention of the assessee 4.3. The Assessing officer has referred to the information received regarding the transaction between M/s. Kanyakumari Builder Pvt. Ltd. Trust and consequent litigation. The statement made before the Hon'ble Court of the XIX Addl. City Civil and Session Judge at Bangalore constitutes an admissible evidence. The Hon ble Court had Kanyakumari Builder Pvt. Ltd. had failed to produce bank passbook / cheque book / cash book and books of account to support the light of these finding the Assessing Officer recorded that the expenditure of Rs.25,58,00,000/- incurred by M/s. Kanyakumari Builder Prt. Ltd: towards obtaining vacant possession from the dweller / hutments in FY 2007-09 remains unexplained and attracts the provisions of the IT.Act, 1961. The Assessing Officer has categorically recorded that the Assessee has under reported its income to the tune of Rs.25,58,00,000/- Accordingly, notice u/s.148 has been issued 4.4. It is therefore seen that there is tangible material nexus with formation of belief that income has escaped assessment. It is trite law that for reopening the assessment, the A.O. has to merely form reason to believe that income has escaped assessment. The reassessment M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 31 satisfaction of the AO himself. Such a reassessment is entirely vitiated and deserves to be quashed irrespective of whether the original assessment is under section 143 (1) or 143 (3) [Ref. PCIT W Shodiman nn.com 153 (Bombay)l. As such it is respectfully submitted that even on this count the assessment find that the Ld. CIT(A) has rejected the contention of the assessee referred to the information received regarding the transaction between M/s. Kanyakumari Builder Pvt. Ltd. Trust and consequent litigation. The statement made before the Hon'ble Court of the XIX Addl. City Civil and Session Judge at Bangalore constitutes an admissible evidence. The Hon ble Court had Kanyakumari Builder Pvt. Ltd. had failed to produce bank passbook / cheque book / cash book and books of account to support the sing Officer recorded that the incurred by M/s. Kanyakumari Builder Prt. Ltd: towards obtaining vacant possession from the dweller / 09 remains unexplained and attracts the provisions of the IT.Act, 1961. The Assessing Officer has categorically recorded that the Assessee has under reported its income to the tune of , notice u/s.148 has been issued.. 4.4. It is therefore seen that there is tangible material forming &-live nexus with formation of belief that income has escaped assessment. It is trite law that for reopening the assessment, the A.O. has to merely form reason to believe that income has escaped assessment. The reassessment proceedings allows the a assessment. The only question to be seen is whether there is relevant material on which a reasonable person could have formed requisite belief. Whether those facts stated in material are true or not, is at this stage. This is so because the formation of belief by the Assessing officer is within his subjective satisfaction in the case of ITO vs. Lakhmani Mewaldas (1976) 103 ITR 437 (SC), Phool Chand Bajrangl Dalurband Coal Company Central Province Manganese Ore Company Ltd. Vs. ITO (1991) ITR 662, 666 (SC). 4.5. The action u/s 147 is possible despite complete disclosu facts if there is any escapement of income in the assessment proceedings refer Praful Chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange Vs. ACIT (1997) 227 ITR 906 (Gui) and ITO vs. Lakhmani Mewal 4.6. In the present case, the return was merely processed u/s 143(1). An intimation us 143(1) cannot be treated as an order of assessment. There is no question of change. of opinion when none is expressed. The assessing Officer can form reasons to believe that income has escaped assessment by examining the very return/ documents accompanying the return. Refer Indulata Rangwala vs. DCIT (2016) 286 CT (Del) 474, CIT vs. Rajesh Shaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 (SC) Estate Development & Investment Co. Ltd. (2015) 373 IT 661 (SC). 4.7. When no finding either positive or negative is arrived at during the course of original assessment proceedings, there is no question of change of opinion - refer M/s Pebble Bay Developers Pvt. Ltd. proceedings allows the appellant to rebut the reasons for reopening of the The only question to be seen is whether there is relevant material on which a reasonable person could have formed requisite belief. Whether those facts stated in material are true or not, is at this stage. This is so because the formation of belief by the Assessing officer is within his subjective satisfaction - refer Supreme Court's decision in the case of ITO vs. Lakhmani Mewaldas (1976) 103 ITR 437 (SC), Phool Chand Bajranglal vs. ITO (1993) 203 ITR 456 (SC), ITO vs. Select Dalurband Coal Company Pvt. Ltd. (1996) 217 ITR 597, 599 (SC) and Central Province Manganese Ore Company Ltd. Vs. ITO (1991) ITR 662, 4.5. The action u/s 147 is possible despite complete disclosu facts if there is any escapement of income in the assessment proceedings refer Praful Chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange Vs. ACIT (1997) 227 ITR 906 (Gui) and ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC). 4.6. In the present case, the return was merely processed u/s 143(1). An intimation us 143(1) cannot be treated as an order of assessment. There is no question of change. of opinion when none is expressed. The assessing r can form reasons to believe that income has escaped assessment by examining the very return/ documents accompanying the return. Refer Indulata Rangwala vs. DCIT (2016) 286 CT (Del) 474, CIT vs. Rajesh Shaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 (SC), DCIT vs. Zuari Estate Development & Investment Co. Ltd. (2015) 373 IT 661 (SC). 4.7. When no finding either positive or negative is arrived at during the course of original assessment proceedings, there is no question of change refer- A.L.A. Firm vs. CIT 102 ITR 622 (Madras), Ess Kay M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 32 ppellant to rebut the reasons for reopening of the The only question to be seen is whether there is relevant material on which a reasonable person could have formed requisite belief. Whether those facts stated in material are true or not, is not the concern at this stage. This is so because the formation of belief by the Assessing refer Supreme Court's decision in the case of ITO vs. Lakhmani Mewaldas (1976) 103 ITR 437 (SC), Phool al vs. ITO (1993) 203 ITR 456 (SC), ITO vs. Select Pvt. Ltd. (1996) 217 ITR 597, 599 (SC) and Central Province Manganese Ore Company Ltd. Vs. ITO (1991) ITR 662, 4.5. The action u/s 147 is possible despite complete disclosure of material facts if there is any escapement of income in the assessment proceedings - refer Praful Chunilal Patel, Vasant Chunilal Patel vs. ACIT (1999) 236 ITR 832, 840 (Guj), Stock Exchange Vs. ACIT (1997) 227 ITR 906 (Gui) and 4.6. In the present case, the return was merely processed u/s 143(1). An intimation us 143(1) cannot be treated as an order of assessment. There is no question of change. of opinion when none is expressed. The assessing r can form reasons to believe that income has escaped assessment by examining the very return/ documents accompanying the return. Refer Indulata Rangwala vs. DCIT (2016) 286 CT (Del) 474, CIT vs. Rajesh , DCIT vs. Zuari Estate Development & Investment Co. Ltd. (2015) 373 IT 661 (SC). 4.7. When no finding either positive or negative is arrived at during the course of original assessment proceedings, there is no question of change Firm vs. CIT 102 ITR 622 (Madras), Ess Kay Engineering Company (P) Ltd. vs. CIT 247 ITR 818 (SC) and EMA India Ltd. vs. ACIT (30 DTR 82) (Allahabad). 4.8. When an income liable to tax has escaped assessment in the original assessment proceedings due to ov committed by the original Assessing Officer, subsequently, while verifying the records, Assessing Officer can start reassessment proceedings for escapement of income. Further, there is a legal proposition accepted by various courts that reassessment proceedings is permissible even if the information is obtained after proper investigation from the materials on record or from any enquiry or research into facts or law. There is a plethora of judgments that such information source – refer Kalyanji Mavji and Company Vs. CIT 102 ITR 287 (SC). It is also pertinent to mention that for reopening of completed assessment u/s 148, tangible material need not be from outside the return of income. It can be obtained from the return of income or evidences on record itself. The reference may be had of ACIT v relevant to mention that information obtained i of subsequent year, can also be utilized for reopening of the complete assessment - refer Raymond Woolens Mills Ltd. vs. ITO and other 236 ITR 34 (SC) and Revathy (Mad). 4.9. It is further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. No evidence of filing any objection is produced in the a proceedings. Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find M/s Pebble Bay Developers Pvt. Ltd. Engineering Company (P) Ltd. vs. CIT 247 ITR 818 (SC) and EMA India Ltd. vs. ACIT (30 DTR 82) (Allahabad). 4.8. When an income liable to tax has escaped assessment in the original assessment proceedings due to oversight and inadvertence or a mistake committed by the original Assessing Officer, subsequently, while verifying the records, Assessing Officer can start reassessment proceedings for escapement of income. Further, there is a legal proposition accepted by arious courts that reassessment proceedings is permissible even if the information is obtained after proper investigation from the materials on record or from any enquiry or research into facts or law. There is a of judgments that such information need not be from external CIT & anr. vs. Rinku Chakraborty 56 DTR 227 (Kar) and Kalyanji Mavji and Company Vs. CIT 102 ITR 287 (SC). It is also pertinent to mention that for reopening of completed assessment u/s 148, tangible not be from outside the return of income. It can be obtained from the return of income or evidences on record itself. The reference may be had of ACIT vs. Kanga & Co. (2010) - TIOL 464 ITAT Mumbai. It is also relevant to mention that information obtained in assessment proceedings of subsequent year, can also be utilized for reopening of the complete refer Raymond Woolens Mills Ltd. vs. ITO and other 236 ITR 34 (SC) and Revathy C.P. Equipment Ltd. vs. DCIT and Ors. 241 ITR 856 further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. evidence of filing any objection is produced in the a Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 33 Engineering Company (P) Ltd. vs. CIT 247 ITR 818 (SC) and EMA India 4.8. When an income liable to tax has escaped assessment in the original ersight and inadvertence or a mistake committed by the original Assessing Officer, subsequently, while verifying the records, Assessing Officer can start reassessment proceedings for escapement of income. Further, there is a legal proposition accepted by arious courts that reassessment proceedings is permissible even if the information is obtained after proper investigation from the materials on record or from any enquiry or research into facts or law. There is a need not be from external CIT & anr. vs. Rinku Chakraborty 56 DTR 227 (Kar) and Kalyanji Mavji and Company Vs. CIT 102 ITR 287 (SC). It is also pertinent to mention that for reopening of completed assessment u/s 148, tangible not be from outside the return of income. It can be obtained from the return of income or evidences on record itself. The reference may TIOL 464 ITAT Mumbai. It is also n assessment proceedings of subsequent year, can also be utilized for reopening of the complete refer Raymond Woolens Mills Ltd. vs. ITO and other 236 ITR C.P. Equipment Ltd. vs. DCIT and Ors. 241 ITR 856 further noted that the reasons recorded were furnished to the appellant on 29.12.2015. The assessment order has been passed on 30.3.2016. The appellant had ample time but did not file any objections. evidence of filing any objection is produced in the appellate Thus, due procedure has been followed by the assessing officer. In the light of these facts and discussion earlier, I do not find merits in the contention of the appellant. The Grounds of Appeal No. 'A' to 'C' is thus, dismissed and t 11.4 In view of the decision of the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stockbrokers for reopening, there must be a relevant material on the basis of which reasonable person can form requisite belief that in assessment. Thus, prime requirement is relevant material which before the Assessing Officer. In the present case, a copy of the orde Hon’ble City Sessions Judge payment has been shown to have been owned by the assessee. Thus a relevant material on the basis of which reasonable person can form belief. In our opinion, the contention of the borrowed satisfaction, are baseless and therefore same are rejected. 11.5 In view of the above detailed discussion, assessee under rule 27 of 12. Now we take up the grounds raised by the M/s Pebble Bay Developers Pvt. Ltd. merits in the contention of the appellant. The Grounds of Appeal No. 'A' to 'C' is thus, dismissed and the reopening of the assessment is upheld. view of the decision of the Hon’ble Supreme Court in the case of Stockbrokers Private Limited (2007) 291 ITR 500 (SC) there must be a relevant material on the basis of which reasonable person can form requisite belief that income escaped the prime requirement is relevant material which before the Assessing Officer. In the present case, a copy of the orde Judge was before the Assessing Officer, shown to have been made in relation to the property . Thus, order of Hon’ble City Sessions a relevant material on the basis of which reasonable person can form belief. In our opinion, the contention of the Ld. Counsel of the assessee of the are baseless and therefore same are rejected. In view of the above detailed discussion, the objections raised by the assessee under rule 27 of the ITAT Rules are rejected. Now we take up the grounds raised by the Revenue in its appeal. M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 34 merits in the contention of the appellant. The Grounds of Appeal No. 'A' to he reopening of the assessment is upheld.” view of the decision of the Hon’ble Supreme Court in the case of (2007) 291 ITR 500 (SC) there must be a relevant material on the basis of which come escaped the prime requirement is relevant material which should be before the Assessing Officer. In the present case, a copy of the order of the e the Assessing Officer, wherein cash made in relation to the property Judge is definitely a relevant material on the basis of which reasonable person can form the l of the assessee of the are baseless and therefore same are rejected. the objections raised by the in its appeal. 13. The ground No. 1 69C of ₹25,58,00,000/-. It is the contention of the erred in holding that provision of section 6 the assessee has not claimed those expenses in the instant year. The revenue has also contended that judgement has been pronounced against the assessee company in the suit filed by the sister concern of the assessee i.e. KBPL for reimbursement of the expenses incurred in cash due to failure in explaining source of the same before the Hon’ble district Court. 14. The facts in brief qua the issue in dispute the lower authorities and submission of the assessee consisting of the order of the Hon’ble (i) Residential at Banglore, M/s Kanyakumari builders Private Limited (KBPL) i.e. the sister concern of the assessee dated 1/2/2006 for development of said land registered on 18/02/2006. M/s Pebble Bay Developers Pvt. Ltd. and 2 of the appeal relates to addition under section . It is the contention of the Revenue that Ld. CIT(A) has erred in holding that provision of section 69C are not applicable in the case as the assessee has not claimed those expenses in the instant year. The revenue also contended that judgement has been pronounced against the assessee ed by the sister concern of the assessee i.e. KBPL for reimbursement of the expenses incurred in cash due to failure in explaining source of the same before the Hon’ble district Court. The facts in brief qua the issue in dispute emanating from the ord authorities and submission of the assessee including paper book consisting of the order of the Hon’ble City Sessions Judge, are that Residential plot of land admeasuring 11 acres 20 guntas situated , was owned by M/s LK Trust, who agreed to M/s Kanyakumari builders Private Limited (KBPL) i.e. the sister concern of the assessee, vide joint development agreement (JDA) dated 1/2/2006 for development of said land. registered on 18/02/2006. Illegal hutments and slums were M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 35 of the appeal relates to addition under section that Ld. CIT(A) has are not applicable in the case as the assessee has not claimed those expenses in the instant year. The revenue also contended that judgement has been pronounced against the assessee ed by the sister concern of the assessee i.e. KBPL for reimbursement of the expenses incurred in cash due to failure in explaining emanating from the order of including paper book are that : land admeasuring 11 acres 20 guntas situated s LK Trust, who agreed to engage M/s Kanyakumari builders Private Limited (KBPL) i.e. the sister vide joint development agreement (JDA) . This JDA was duly egal hutments and slums were in existence on 4 guntas) and approx. (ii) As per the Article VI required to developer in development Trust, therefore the work of entrusted to before the Hon’ble this task of moving the hutment was a stupendous and required outsourcing, negotiation with the dweller/occupants. It was claimed that KBPL had to expend their beginning since LK trust did not pay the amount for commencement. It was submitted in the were not ready to vacate and hand over the even threatened to obstruct or stop progress of the development work, therefore, the rehabilitate them in a nearby area and also pay heavy amount. The dwellers had reposed confidence with one person namely M/s Pebble Bay Developers Pvt. Ltd. on a small part of said plot of land (approx. 2 acres and approx. 475 families were residing. Article VI, clause 6.1 of JDA, the owner required to remove those huts/temporary sheds and put the developer in vacant possession of the said development. Since illegal hutment could not be vacated by the LK , therefore the work of vacating those entrusted to the KBPL after mutual agreement. In the fore the Hon’ble City Sessions Judge, the KBPL submitted that this task of moving the hutment was a stupendous and required outsourcing, negotiation with the dweller/occupants. It was claimed that KBPL had to expend their own money from the beginning since LK trust did not pay the amount for commencement. It was submitted in the ‘plaint’ were not ready to vacate and hand over the possession even threatened to obstruct or stop progress of the development fore, the KBPL found no other alternative option but to rehabilitate them in a nearby area and also pay heavy amount. The dwellers had reposed confidence with one person namely M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 36 (approx. 2 acres and 475 families were residing. owner LK trust was heds and put the plot of land for . Since illegal hutment could not be vacated by the LK vacating those hutments was In the ‘plaint’ filed , the KBPL submitted that this task of moving the hutment was a stupendous and required outsourcing, negotiation with the dweller/occupants. It was own money from the beginning since LK trust did not pay the amount for ’ that the dwellers possession and they even threatened to obstruct or stop progress of the development KBPL found no other alternative option but to rehabilitate them in a nearby area and also pay heavy amount. The dwellers had reposed confidence with one person namely M/s Anand who in turn dispersed payments to respective occupants and obtained r KBPL sought alternative place in Kogilu village, Banglore Nothtaluke and by the end of No acres 4 guntas cleared, leveled and su money to some of the reluctant occupants/dwellers was made on/upto 18/02/2008. The KBPL claim detailed running account in its ordinary course of its business showing the actual cost incurred towards obtain possession from the dweller/hutments. It was claimed that M/s KBPL spent totally possession of land however LK ₹10 crores on 27/01/2007. In the Trust assured to make balance payment of did not make the payment and therefore s filed. (iii) On the other hand, in reply to the denied that the amounts M/s Pebble Bay Developers Pvt. Ltd. M/s Anand who in turn dispersed payments to respective occupants and obtained receipts and affidavits KBPL sought alternative place in Kogilu village, Banglore Nothtaluke and by the end of Nov. 2007, most of the area of acres 4 guntas (i.e. which was occupied unauthorizedly leveled and surrendered, however disbursement of the money to some of the reluctant occupants/dwellers was made 18/02/2008. The KBPL claimed to have maintained a detailed running account in its ordinary course of its business showing the actual cost incurred towards obtain possession from the dweller/hutments. It was claimed that M/s KBPL spent totally ₹36,36,72,564/- for obtaining vacant possession of land however LK Trust made only part payment of 10 crores on 27/01/2007. In the ‘plaint’ it was claimed that LK assured to make balance payment of ₹26,36,72, ake the payment and therefore suit of the recovery was On the other hand, in reply to the ‘plaint’ of KBPL, the LK Trust denied that the amounts were paid to Mr M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 37 M/s Anand who in turn dispersed payments to respective and affidavits from them. The KBPL sought alternative place in Kogilu village, Banglore most of the area of 2 ied unauthorizedly) was however disbursement of the money to some of the reluctant occupants/dwellers was made to have maintained a detailed running account in its ordinary course of its business showing the actual cost incurred towards obtaining vacant possession from the dweller/hutments. It was claimed that M/s for obtaining vacant made only part payment of it was claimed that LK 26,36,72,564/- but it of the recovery was of KBPL, the LK Trust paid to Mr. Anand and he unacknowledged receipt of the amount averments and made counterclaims. (iv) On the basis of the rival pleadings of the KBPL and LK trust, Hon’ble Sessions KBPL was not 14.1 Based on the observation of the Hon’ble including cash vouchers filed before the Hon’ble expenditure was incurred for removal of hutments, the assessment in the case of KBPL was reopened and the Ass information regarding the decision of the Hon’ble Assessing Officer of the assessee. On assessment in the case of the assessee was reopened. 15. Before the Assessing Officer the assessee claim received from Mrs. LK trust, drafts/cheque to Mr. Anand by M/s KBPL and balance transferred to assessee for removal of the books of KBPL was submitted before the Assessing Officer. It was further submitted that the responsibility of M/s Pebble Bay Developers Pvt. Ltd. unacknowledged receipt of the amount. The LK trust denied other averments and made counterclaims. On the basis of the rival pleadings of the KBPL and LK trust, Sessions Court concluded that claim of expense not substantiated. Based on the observation of the Hon’ble Sessions Court including cash vouchers filed before the Hon’ble Court, which incurred for removal of hutments, the assessment in the case of KBPL was reopened and the Assessing Officer of KBPL passed on the information regarding the decision of the Hon’ble Sessions Assessing Officer of the assessee. On the basis of said information assessment in the case of the assessee was reopened. sing Officer the assessee claimed that out of LK trust, ₹7,67,98,000/- was given by way of bank Anand by M/s KBPL and balance ₹2,32, transferred to assessee for removal of huts. A copy of accounts of Mr the books of KBPL was submitted before the Assessing Officer. It was further submitted that the responsibility of removing huts were shifted to the M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 38 . The LK trust denied other On the basis of the rival pleadings of the KBPL and LK trust, concluded that claim of expenses by the Court and documents , which shown that incurred for removal of hutments, the assessment in the case essing Officer of KBPL passed on the Sessions Court to the of said information, the that out of ₹10 crores iven by way of bank 2,32,02,000/- was accounts of Mr. Anand in the books of KBPL was submitted before the Assessing Officer. It was further huts were shifted to the assessee company (i.e. Purchaser), who continued with the services of Mr Anand for removal of draft/cheques. It was submitted the total amount spent on removal of the was of ₹26,43,81,240/- copy of account of said Officer. Further it was claimed that such expenses have not been debited to profit and loss account and same LK Trust. The assessee denied of giving any cash payment for removal of hutments and cash vouchers further claim to LK Trust submitted that summon the assessee. 16. The Ld. Assessing Officer summarised the observation of the Hon’ble Sessions Court in para 5.5.2 of the impugned assessment order, which are extracted as under: “5.5.2 The issues, submissions and facts came up before the Hon'ble Court are as follows: a) Shri Aditya Raheja, Director, of the Company, admitted in his cross examination that some cash vouchers do not contain the name of the payer and M/s Pebble Bay Developers Pvt. Ltd. e. Purchaser), who continued with the services of Mr removal of huts and paid ₹23,36,11,240/- on various dates by draft/cheques. It was submitted the total amount spent on removal of the - during the financial year 2007-08 and 2008 said expenditure was submitted before the Assessing Officer. Further it was claimed that such expenses have not been debited to profit and loss account and same had been accounted as receivable from M/ . The assessee denied of giving any cash payment for removal of vouchers were collected from Mr. Anand for making Trust. The assessee provided address of Mr summon might be issued to him for verification of the claim of Assessing Officer summarised the observation of the Hon’ble in para 5.5.2 of the impugned assessment order, which are 5.5.2 The issues, submissions and facts came up before the Hon'ble Court are as ya Raheja, Director, of the Company, admitted in his cross examination that some cash vouchers do not contain the name of the payer and M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 39 e. Purchaser), who continued with the services of Mr. on various dates by draft/cheques. It was submitted the total amount spent on removal of the huts 08 and 2008-09. A itted before the Assessing Officer. Further it was claimed that such expenses have not been debited to accounted as receivable from M/s. . The assessee denied of giving any cash payment for removal of Anand for making . The assessee provided address of Mr. Anand and might be issued to him for verification of the claim of Assessing Officer summarised the observation of the Hon’ble in para 5.5.2 of the impugned assessment order, which are 5.5.2 The issues, submissions and facts came up before the Hon'ble Court are as ya Raheja, Director, of the Company, admitted in his cross examination that some cash vouchers do not contain the name of the payer and as per the law, the name of the payer is to be shown in the cash voucher. The major portion of the Anand, the name of the Company is not shown in the cash vourcers. b) Ex. P. 29 to Ex. P. 232 cash vouchers have not been obtained on the revenue stamps. c) The amounts were paid to many persons, but the Company has not at examined any of the authors of the said documents i.e., any of the payer under said Ex. P. 29 to Ex. P. 232 cash vouchers. d) Major portion of the amount for about Rs. 8.75 Crores was paid to Anand, but said Anand has not been examined before the Court e) Shri. Aditya Raheja stated that all the payments to Anand were made through cheques and no cash payment have been made to Anand. But the Company has not at all produced the pass book or bank statement of the Company to show that all these amounts were Company and the same were paid to Anand. f) Shri Adity Raheja further clearly admitted in page no. 11 of his cross examination that all the payments made by them are reflected in their books of accounts and he does not know CA knows the same. But the Company has not at all produced the said books of accounts. g) Ex.P.63 a cash voucher dated 06.12.2007 stated that the said amount was paid in advance towards the sale of the land purchased from Byrappa by paying Rs. 2,25,00,000/ hutments. The Company has not at all produced the sale deed or other documents to show that land was purchased from Byrappa. M/s Pebble Bay Developers Pvt. Ltd. as per the law, the name of the payer is to be shown in the cash voucher. The amount has been paid to one Anand. Since the payer is Anand, the name of the Company is not shown in the cash vourcers. Ex. P. 29 to Ex. P. 232 cash vouchers have not been obtained on the revenue The amounts were paid to many persons, but the Company has not at examined any of the authors of the said documents i.e., any of the payer under Ex. P. 29 to Ex. P. 232 cash vouchers. Major portion of the amount for about Rs. 8.75 Crores was paid to Anand, but said Anand has not been examined before the Court. Shri. Aditya Raheja stated that all the payments to Anand were made through cheques and no cash payment have been made to Anand. But the Company has not at all produced the pass book or bank statement of the Company to show that all these amounts were debited from the account of the Company and the same were paid to Anand. Shri Adity Raheja further clearly admitted in page no. 11 of his cross examination that all the payments made by them are reflected in their books of accounts and he does not know as to whether they have been mentioned and his CA knows the same. But the Company has not at all produced the said books of Ex.P.63 a cash voucher dated 06.12.2007 stated that the said amount was paid in advance towards the sale of the land at Kogilu villiage. Land was purchased from Byrappa by paying Rs. 2,25,00,000/- for rehabilitation of the hutments. The Company has not at all produced the sale deed or other documents to show that land was purchased from Byrappa. M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 40 as per the law, the name of the payer is to be shown in the cash voucher. The to one Anand. Since the payer is Anand, the name of the Company is not shown in the cash vourcers. Ex. P. 29 to Ex. P. 232 cash vouchers have not been obtained on the revenue The amounts were paid to many persons, but the Company has not at all examined any of the authors of the said documents i.e., any of the payer under Major portion of the amount for about Rs. 8.75 Crores was paid to Anand, Shri. Aditya Raheja stated that all the payments to Anand were made through cheques and no cash payment have been made to Anand. But the Company has not at all produced the pass book or bank statement of the debited from the account of the Shri Adity Raheja further clearly admitted in page no. 11 of his cross examination that all the payments made by them are reflected in their books of as to whether they have been mentioned and his CA knows the same. But the Company has not at all produced the said books of Ex.P.63 a cash voucher dated 06.12.2007 stated that the said amount was at Kogilu villiage. Land was for rehabilitation of the hutments. The Company has not at all produced the sale deed or other h) Ex.P.64 is another cas 07.12.2007 wherein the Company has paid Rs. 1,53,00,000/ for construction of residential units for rehabilitants at Kogilu village. However as stated in Ex.P. 63 & Ex.P. 64, if land P. 63, the residential units cannot be constructed in a single day on 07.12.2007. Moreover the author of Ex.P.63 Byrappa and Ex.P.64 Subramani have not been examined before the Court. i. Total Rs. 1,05,00,000/ handing over the possession of site at Nagasettihalli village by way of cash vouchers Ex.P. 111, Ex.P. 112 and Ex.P.113 of Rs. 72 lakhs, Rs. 8 laksh & Rs. 25 laksh respectively dated 05.02.2008. But it is not known which wa how much area she had occupied. Even Lakshamman has not been examined before the Court. j) Ex.P. 114 is another cash voucher dated 09.02.2008 under which Rs. 25 lakhs was paid to one Armugaum for removal of hutments on 09.02.2008. Ex.P. 115 cash voucher under which Rs. 25 lakhs was paid to one Venkatappa for removal of hutments. Under Ex.P. 116 voucher dated 09.02.2008 Rs. 40 laksh was paid to one Shamalamma for removal of the sign board and for rehabilitation of the hut dwellers. But the voucher dated 09.02.2008 under which Rs. 75 laksh was paid Anand towards the expenses incurred for vacating of hut dwellers. So also in Ex.P.119 Rs. 50 Lakhs was paid to Jayamma on 09.02.2008 for ev cash vouchers clearly raise doubt with regard to payment made by the Company to these persons. k) Shri Aditya Raheja admitted that Ex.P.141 to Ex.P.210 cash vouchers do not contain voucher number and date of payment. M/s Pebble Bay Developers Pvt. Ltd. h) Ex.P.64 is another cash voucher passed by one Subramani Civil contractor on 07.12.2007 wherein the Company has paid Rs. 1,53,00,000/- to civil contractor for construction of residential units for rehabilitants at Kogilu village. However as stated in Ex.P. 63 & Ex.P. 64, if land was purchased on 06.12.2007 as per Ex. P. 63, the residential units cannot be constructed in a single day on 07.12.2007. Moreover the author of Ex.P.63 Byrappa and Ex.P.64 Subramani have not been examined before the Court. Total Rs. 1,05,00,000/-was paid to Lakshamma for acting site and handing over the possession of site at Nagasettihalli village by way of cash 111, Ex.P. 112 and Ex.P.113 of Rs. 72 lakhs, Rs. 8 laksh & Rs. 25 laksh respectively dated 05.02.2008. But it is not known which wa how much area she had occupied. Even Lakshamman has not been examined Ex.P. 114 is another cash voucher dated 09.02.2008 under which Rs. 25 lakhs was paid to one Armugaum for removal of hutments on 09.02.2008. Ex.P. 115 cash voucher under which Rs. 25 lakhs was paid to one Venkatappa for removal of hutments. Under Ex.P. 116 voucher dated 09.02.2008 Rs. 40 laksh was paid to one Shamalamma for removal of the sign board and for rehabilitation of the But the author of Ex. P. 116 was not examined. Ex.P.117 is the sh voucher dated 09.02.2008 under which Rs. 75 laksh was paid Anand towards the expenses incurred for vacating of hut dwellers. So also in Ex.P.119 Rs. 50 Lakhs was paid to Jayamma on 09.02.2008 for eviction of hut dwellers. These cash vouchers clearly raise doubt with regard to payment made by the Company to these persons. Shri Aditya Raheja admitted that Ex.P.141 to Ex.P.210 cash vouchers do not contain voucher number and date of payment. M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 41 h voucher passed by one Subramani Civil contractor on to civil contractor for construction of residential units for rehabilitants at Kogilu village. However was purchased on 06.12.2007 as per Ex. P. 63, the residential units cannot be constructed in a single day on 07.12.2007. Moreover the author of Ex.P.63 Byrappa and Ex.P.64 Subramani have not been to Lakshamma for acting site and handing over the possession of site at Nagasettihalli village by way of cash 111, Ex.P. 112 and Ex.P.113 of Rs. 72 lakhs, Rs. 8 laksh & Rs. 25 laksh respectively dated 05.02.2008. But it is not known which was the site and how much area she had occupied. Even Lakshamman has not been examined Ex.P. 114 is another cash voucher dated 09.02.2008 under which Rs. 25 lakhs was paid to one Armugaum for removal of hutments on 09.02.2008. Ex.P. 115 is cash voucher under which Rs. 25 lakhs was paid to one Venkatappa for removal of hutments. Under Ex.P. 116 voucher dated 09.02.2008 Rs. 40 laksh was paid to one Shamalamma for removal of the sign board and for rehabilitation of the author of Ex. P. 116 was not examined. Ex.P.117 is the sh voucher dated 09.02.2008 under which Rs. 75 laksh was paid Anand towards the expenses incurred for vacating of hut dwellers. So also in Ex.P.119 Rs. 50 iction of hut dwellers. These cash vouchers clearly raise doubt with regard to payment made by the Shri Aditya Raheja admitted that Ex.P.141 to Ex.P.210 cash vouchers do not I) The Company neither produced the account book of the Company nor the cash book. m) Shri Aditya Raheja stated in page No. 15 of his cross examination that he has collected the acknowledgement from Anand while making payment to him and he will produce the acknowle acknowledgment said 16.1 The Assessing Officer made without any supporting in lakhs of Rupees. He pointed out that payment claimed to have been made by cheques by the assessee were established to be same as cash payment shown in vouchers filed before the Hon’ble Sessions Judge. The Ld. Assessing Officer held that there is no payments as one is made by also observed that the assessee has nowhere produced any document to substantiate that cash has been paid from the accounted books of the assessee and therefore he held that said expenditure in terms of section 6 Assessing Officer is reproduced as under: “5.6 Thus, the Director has made a submission before the Hon'ble Court regarding certain expenses being incurred in cash in various years. The statement being made before the Hon'ble Court is admissible as evidence. The details of cash expenses which was submit M/s Pebble Bay Developers Pvt. Ltd. mpany neither produced the account book of the Company nor the Shri Aditya Raheja stated in page No. 15 of his cross examination that he has collected the acknowledgement from Anand while making payment to him and he will produce the acknowledgment. But he has not produced the acknowledgment said to have been passed by Anand.” Assessing Officer observed that cash vouchers made are mostly self made without any supporting in lakhs of Rupees. He pointed out that payment een made by cheques by the assessee were established to be same as cash payment shown in vouchers filed before the Hon’ble Sessions Assessing Officer held that there is no correlation in payments as one is made by way of cash and other is by way of also observed that the assessee has nowhere produced any document to substantiate that cash has been paid from the accounted books of the assessee that said expenditure of ₹25,58,00,000/ enditure in terms of section 69C of the Act. The relevant finding of the Assessing Officer is reproduced as under: Thus, the Director has made a submission before the Hon'ble Court regarding certain expenses being incurred in cash in various years. The statement being made before the Hon'ble Court is admissible as evidence. The details of cash expenses which was submitted before the Hon'ble Court on M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 42 mpany neither produced the account book of the Company nor the Shri Aditya Raheja stated in page No. 15 of his cross examination that he has collected the acknowledgement from Anand while making payment to him dgment. But he has not produced the made are mostly self made without any supporting in lakhs of Rupees. He pointed out that payment een made by cheques by the assessee were established to be same as cash payment shown in vouchers filed before the Hon’ble Sessions correlation in two of cash and other is by way of cheque. He also observed that the assessee has nowhere produced any document to substantiate that cash has been paid from the accounted books of the assessee 000/- as unexplained . The relevant finding of the Ld. Thus, the Director has made a submission before the Hon'ble Court regarding certain expenses being incurred in cash in various years. The statement being made before the Hon'ble Court is admissible as evidence. The ted before the Hon'ble Court on which dates are mentioned sum totaled to R Director of the assessee company Shri Aditya Raheja who has during the cross examination owned up the cash vouchers as he has duly confirmed the va payments made in cash. The series of these facts have already been enumerated vide para 5.5.2 above. This clearly entails to the fact that the Director of the assessee company is well aware to the fact that the payments have been incurred in cash and supporting. 5.7 Further from cursory look at the facts and the vouchers submitted by the assessee in the court duly mentions that all the payments have been made in cash and are in excess of R$ 20,000/ entering into lacs of Rupees, the same do not have any supporting documents other than being self claimed that it has paid a sum of Rs. 25 crores in cheque to one M However the total of cash payments voucher is 25.58 crores. correlation in the two payments as one is by mode of cash and the other is by way of cheque. The assessee has nowhere produced any document so as to substantiate that the assessee. 5.8 In light of the findings of the Hon'ble Court and in view of the above discussions, the cash expenditure of Rs. 25,58,00,000/ company towards obtaining vacant F.Y. 2007-08 remains unexplained and attracts the provisions of section 69C of the Income-tax Act, 1961. 16.2 On further appeal, the Ld. CIT(A) after considering submission of the assessee, deleted the addition obse M/s Pebble Bay Developers Pvt. Ltd. which dates are mentioned sum totaled to Rs.25,58,00,000/-. Further it's the Director of the assessee company Shri Aditya Raheja who has during the cross examination owned up the cash vouchers as he has duly confirmed the va payments made in cash. The series of these facts have already been enumerated vide para 5.5.2 above. This clearly entails to the fact that the Director of the assessee company is well aware to the fact that the payments have been for which the assessee company does not have relevant Further from cursory look at the facts and the vouchers submitted by the assessee in the court duly mentions that all the payments have been made in cash and are in excess of R$ 20,000/-. However even for the said cash vouchers entering into lacs of Rupees, the same do not have any supporting documents other than being self-made vouchers. Further the assessee, company has claimed that it has paid a sum of Rs. 25 crores in cheque to one M However the total of cash payments voucher is 25.58 crores. Thus there is no correlation in the two payments as one is by mode of cash and the other is by way of cheque. The assessee has nowhere produced any document so as to substantiate that the cash has been paid from the accounted books of the In light of the findings of the Hon'ble Court and in view of the above discussions, the cash expenditure of Rs. 25,58,00,000/- incurred by assessee company towards obtaining vacant possession from the dweller/hutments in 08 remains unexplained and attracts the provisions of section 69C of tax Act, 1961.” further appeal, the Ld. CIT(A) after considering submission of the assessee, deleted the addition observing as under: M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 43 . Further it's the Director of the assessee company Shri Aditya Raheja who has during the cross examination owned up the cash vouchers as he has duly confirmed the various payments made in cash. The series of these facts have already been enumerated vide para 5.5.2 above. This clearly entails to the fact that the Director of the assessee company is well aware to the fact that the payments have been for which the assessee company does not have relevant Further from cursory look at the facts and the vouchers submitted by the assessee in the court duly mentions that all the payments have been made in . However even for the said cash vouchers entering into lacs of Rupees, the same do not have any supporting documents Further the assessee, company has claimed that it has paid a sum of Rs. 25 crores in cheque to one Mr Anand. Thus there is no correlation in the two payments as one is by mode of cash and the other is by way of cheque. The assessee has nowhere produced any document so as to cash has been paid from the accounted books of the In light of the findings of the Hon'ble Court and in view of the above incurred by assessee possession from the dweller/hutments in 08 remains unexplained and attracts the provisions of section 69C of further appeal, the Ld. CIT(A) after considering submission of the 5.7. The entire case of the assessing officer is based on the court proceedings and the order of the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge Banglore City. It is noted that the court order is dated 17.7.2014 in case O.S. 6741/2008. The plaintiff if M/s Kanyakumari Builders P. Ltd. and the defendant is M/s L K Trust. The appellant in this suit for recovery of money. An amount of Rs 26,36,72,564/ claimed. The court records residential project on encroachments on the land failure of the defendant encroachments removed. The expenses incurred by the plaintiff for the same was to be reimbursed by the defendant. The plaintiff spent several crores for clearing the encroachments. The plaintiff made payments to one A in turn made payments to the dwellers/owners of hutments on the land for vacating the land. As per the Plaintiff it had incurred R$ 36,36,72,564/ Plaintiff had paid only Rs 10 crores. Hence the suit for the balance amount had been filed. The defendant on the other hand claimed that it had given R$ 10 crores with the understanding that balance amount will be refunded. having agreed to reimburse any amount incurred by the plaintiff. I disputed the incurring of the claim of expendi expenditure incurred for this purpose was to be with mutual consent. The Hon'ble Court finally dismissed the plaint for several reasons including that the expenditure claimed to be incurred in cash was not pr the counter claim of the defendant for Rs 10 spent several crores to get the land free 5.8. As noted earlier, the appellant in this case was not a party to the suit disposed. The assessing officer has not dealt with the submissions and filed by the appellant in the assessment proceedings to show that it had not by M/s Pebble Bay Developers Pvt. Ltd. 5.7. The entire case of the assessing officer is based on the court proceedings and the order of the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge Banglore City. It is noted that the court order is dated 17.7.2014 in case O.S. 6741/2008. The plaintiff if M/s Kanyakumari Builders P. Ltd. and the defendant is M/s L K Trust. The appellant in this case is not a party in this suit. This is a suit for recovery of money. An amount of Rs 26,36,72,564/- with interest is court records that the plaintiff had purchased/agreed to develop residential project on land belonging to the defendant. There were encroachments on the land which the defendant was to clear at its own cost. On failure of the defendant to do so, the defendant requested the plaintiff to get the encroachments removed. The expenses incurred by the plaintiff for the same eimbursed by the defendant. The plaintiff spent several crores for the encroachments. The plaintiff made payments to one A in turn made payments to the dwellers/owners of hutments on the land for vacating the land. As per the Plaintiff it had incurred R$ 36,36,72,564/ Plaintiff had paid only Rs 10 crores. Hence the suit for the balance amount had The defendant on the other hand claimed that it had given R$ 10 crores with the understanding that balance amount will be refunded. having agreed to reimburse any amount incurred by the plaintiff. I disputed the incurring of the claim of expenditure by the plaintiff. It also claimed that any expenditure incurred for this purpose was to be with mutual consent. The Hon'ble Court finally dismissed the plaint for several reasons including that the expenditure claimed to be incurred in cash was not proved and also dismissed the counter claim of the defendant for Rs 10 crores stating that the plaintiff had spent several crores to get the land free from encroachments. 5.8. As noted earlier, the appellant in this case was not a party to the suit The assessing officer has not dealt with the submissions and filed by the appellant in the assessment proceedings to show that it had not by M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 44 5.7. The entire case of the assessing officer is based on the court proceedings and the order of the Hon'ble Court of the XIX Addl. City Civil & Sessions Judge Banglore City. It is noted that the court order is dated 17.7.2014 in case O.S. No. 6741/2008. The plaintiff if M/s Kanyakumari Builders P. Ltd. and the defendant case is not a party in this suit. This is a with interest is that the plaintiff had purchased/agreed to develop land belonging to the defendant. There were which the defendant was to clear at its own cost. On ant requested the plaintiff to get the encroachments removed. The expenses incurred by the plaintiff for the same eimbursed by the defendant. The plaintiff spent several crores for the encroachments. The plaintiff made payments to one Anandh who in turn made payments to the dwellers/owners of hutments on the land for vacating the land. As per the Plaintiff it had incurred R$ 36,36,72,564/- but the Plaintiff had paid only Rs 10 crores. Hence the suit for the balance amount had The defendant on the other hand claimed that it had given R$ 10 crores with the understanding that balance amount will be refunded. It denied having agreed to reimburse any amount incurred by the plaintiff. I disputed the ture by the plaintiff. It also claimed that any expenditure incurred for this purpose was to be with mutual consent. The Hon'ble Court finally dismissed the plaint for several reasons including that the oved and also dismissed crores stating that the plaintiff had 5.8. As noted earlier, the appellant in this case was not a party to the suit The assessing officer has not dealt with the submissions and details filed by the appellant in the assessment proceedings to show that it had not by itself incurred any cash payments, and that all payments to of Demand Drafts or cheques accounts. Further, it is noted from the assessment perused, that the appellant had filed such details vide submission dated 15.1.2016 (page nos 169 to 233). These contain ledger Trust, and copy of bank statement with Std Chartered Bank account no 237 503099-1, Santa Cruz West, Mumbai. and several specimen copies of demand drafts issued by Standard Chartered by the assesse dated 29.3.2016 in the assessment proceedings, declaration by Mr Anandh Kumar confirming that he had received all payments by cheques /demand drafts from the appellant company and Ms Kanyakumari Builders P. Ltd. and that he was instrumental in rem Nagashetty Halli Village along with copies of bank statements, demand cheques and copy of ledger account was filed (pages 287 to 309). Aadhar Card of Shri Anand Kumar was also filed. The assessing offi examined these evidences nor commented on the same as to how it is concluded that the appellant has made the cash payments. 5.9. The cash payments have been made by Mr Anandh as confirmed by him, but the assessing officer did not verify the sam doubts. 5.10. The appellant has rebutted the observations of the assessing officer are in turn based on the observations in the Court Order. It has been that the name of payer is not mentioned in cash vouchers Mr Anandh. The appellant has also disputed that Shri Aditya up to making payments in cash by referring to page 13 of where he stated that all payments were made by also shown that the payments to Shri Anandh hence the comparison to an amount of M/s Pebble Bay Developers Pvt. Ltd. itself incurred any cash payments, and that all payments to Anandh was by way of Demand Drafts or cheques and that such payments were reflected in its bank accounts. Further, it is noted from the assessment case records called and perused, that the appellant had filed such details vide submission dated 15.1.2016 (page nos 169 to 233). These contain ledger aceount in name of L K Trust, and copy of bank statement with Std Chartered Bank account no 237 1, Santa Cruz West, Mumbai. and several specimen copies of demand drafts issued by Standard Chartered in favour of Anandh. Vide submission filed assesse dated 29.3.2016 in the assessment proceedings, declaration by Mr Anandh Kumar confirming that he had received all payments by cheques /demand drafts from the appellant company and Ms Kanyakumari Builders P. Ltd. and that he was instrumental in removing the hutments on part of land at Nagashetty Halli Village along with copies of bank statements, demand cheques and copy of ledger account was filed (pages 287 to 309). Aadhar Card of Shri Anand Kumar was also filed. The assessing offi examined these evidences nor commented on the same as to how it is concluded that the appellant has made the cash payments. 5.9. The cash payments have been made by Mr Anandh as confirmed by him, but the assessing officer did not verify the same from him, in case he had any .10. The appellant has rebutted the observations of the assessing officer are in turn based on the observations in the Court Order. It has been that the name of payer is not mentioned in cash vouchers since Mr Anandh. The appellant has also disputed that Shri Aditya Raheja had owned up to making payments in cash by referring to page 13 of his cross examination where he stated that all payments were made by cheques. The appellant has shown that the payments to Shri Anandh were more than Rs 25 crores and hence the comparison to an amount of ₹25.58 crores is entirely out of context M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 45 Anandh was by way and that such payments were reflected in its bank case records called and perused, that the appellant had filed such details vide submission dated aceount in name of L K Trust, and copy of bank statement with Std Chartered Bank account no 237-0- 1, Santa Cruz West, Mumbai. and several specimen copies of demand in favour of Anandh. Vide submission filed assesse dated 29.3.2016 in the assessment proceedings, declaration by Mr Anandh Kumar confirming that he had received all payments by cheques /demand drafts from the appellant company and Ms Kanyakumari Builders P. oving the hutments on part of land at Nagashetty Halli Village along with copies of bank statements, demand drafts / cheques and copy of ledger account was filed (pages 287 to 309). Copy of Aadhar Card of Shri Anand Kumar was also filed. The assessing officer has not examined these evidences nor commented on the same as to how it is concluded 5.9. The cash payments have been made by Mr Anandh as confirmed by him, but e from him, in case he had any .10. The appellant has rebutted the observations of the assessing officer which are in turn based on the observations in the Court Order. It has been explained the payer was Raheja had owned his cross examination cheques. The appellant has were more than Rs 25 crores and ₹25.58 crores is entirely out of context and baseless. The claim of the Appellant to the extent of Rs.36.26 Crores (Approx.) was denied by the Hon ' payments were made by evidences in the nature of books of accounts, bank statements, etc. before the Sessions Judge. The issue before the Hon'ble Sessions Ju claim of receivable by KBPL from LK Trust. Its observations cannot be automatically imported in the ease of income tax proceedings of the appellant. The order of the court dismissing the plaint for not proving that expenditure was incurred and that the defendant was liable, does not prove nor is relevant to concluding that the appellant itself has incurred cash expenses and further that the same are unexplained. The appellant has a point when it claims that if the order of the court is t expenditure in cash was not proved and as corollary, there cannot be any addition if such expenditure was not incurred. From the facts discussed, it is therefore concluded that there is no basis to invoke se this case as it has not been found that there is any payments not reflected in the appellant's books and not reflected in the way of cheques/demand drafts and 5.11. The issue that arises next is that even though the payments are made cheques to Shri Anandh, he has made the payments in cash and possibly all such payments have not been spent as claimed. Thus, such expenses be allowed in the hands of 5.12. The appellant has categorically confirmed no deduction has been claimed either by the appellant or KBPL against their taxable incomes. It is pursuing its remedy against L K Trust in its appeal before the Karnataka Court. In the appellant's books this amount advanced to Mr Anandh is not claimed as expenditure but is shown as recoverable from L K Trust. In subsequent AY 2009-10 and AY 2010 M/s Pebble Bay Developers Pvt. Ltd. and baseless. The claim of the Appellant to the extent of Rs.36.26 Crores (Approx.) was denied by the Hon 'ble Sessions Judge not on the basis that no payments were made by KBPL but only on the basis that KBPL failed to produce evidences in the nature of books of accounts, bank statements, etc. before the Sessions Judge. The issue before the Hon'ble Sessions Judge was relating to claim of receivable by KBPL from LK Trust. Its observations cannot be automatically imported in the ease of income tax proceedings of the appellant. The order of the court dismissing the plaint for not proving that expenditure red and that the defendant was liable, does not prove nor is relevant to concluding that the appellant itself has incurred cash expenses and further that the same are unexplained. The appellant has a point when it claims that if the order of the court is to be relied upon then as per the court order the expenditure in cash was not proved and as corollary, there cannot be any addition if such expenditure was not incurred. From the facts discussed, it is therefore concluded that there is no basis to invoke section 69C in the facts of this case as it has not been found that there is any payments not reflected in the appellant's books and not reflected in the bank statements. All payments are by way of cheques/demand drafts and reflected in the bank statements. 5.11. The issue that arises next is that even though the payments are made cheques to Shri Anandh, he has made the payments in cash and possibly all such payments have not been spent as claimed. Thus, such expenses be allowed in the hands of the appellant. 5.12. The appellant has categorically confirmed no deduction has been claimed either by the appellant or KBPL against their taxable incomes. It is remedy against L K Trust in its appeal before the Karnataka urt. In the appellant's books this amount advanced to Mr Anandh is not claimed as expenditure but is shown as recoverable from L K Trust. In 10 and AY 2010-11 the advance was written off but was M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 46 and baseless. The claim of the Appellant to the extent of Rs.36.26 Crores ble Sessions Judge not on the basis that no KBPL but only on the basis that KBPL failed to produce evidences in the nature of books of accounts, bank statements, etc. before the dge was relating to claim of receivable by KBPL from LK Trust. Its observations cannot be automatically imported in the ease of income tax proceedings of the appellant. The order of the court dismissing the plaint for not proving that expenditure red and that the defendant was liable, does not prove nor is relevant to concluding that the appellant itself has incurred cash expenses and further that the same are unexplained. The appellant has a point when it claims that if o be relied upon then as per the court order the expenditure in cash was not proved and as corollary, there cannot be any addition if such expenditure was not incurred. From the facts discussed, it is ction 69C in the facts of this case as it has not been found that there is any payments not reflected in the bank statements. All payments are by reflected in the bank statements. 5.11. The issue that arises next is that even though the payments are made by cheques to Shri Anandh, he has made the payments in cash and possibly all- such payments have not been spent as claimed. Thus, such expenses should not 5.12. The appellant has categorically confirmed no deduction has been claimed either by the appellant or KBPL against their taxable incomes. It is pursuing its remedy against L K Trust in its appeal before the Karnataka High urt. In the appellant's books this amount advanced to Mr Anandh is not claimed as expenditure but is shown as recoverable from L K Trust. In 11 the advance was written off but was added back in the computation of income. A u/s 143(3) for those years. Thus, the amounts have not been nor added in Work in Progress. Singe in the current year such expenses are not claimed, question does not arise of any disallowance. however, at liberty to examine such expenditure if ever claimed in future. 5.13. The addition made of Rs.25,58,00,000/ is therefore deleted and The grounds of appeal D to H are 17. In support of the grounds raised by the Representative relied on the order of the Assessing Officer and submitted that in view of finding of the Hon’ble sister concern failed to explai mentioned in vouchers assessee to produce copy of all the cash vo verification of the claim of the assessee, instead of shifting th producing Mr. Anand to the Assessing Officer. He submitted that primarily the assessee was required to substantiate whether the expenditure claimed before the Hon’ble Sessions Judge incurred out of either the books of accounts of the assessee or its sister concern. Instead of doing so, the assessee mainly harped payments to Mr. Anand was made by way of M/s Pebble Bay Developers Pvt. Ltd. added back in the computation of income. Assessments have been u/s 143(3) for those years. Thus, the amounts have not been claimed as expense nor added in Work in Progress. Singe in the current year such expenses are not claimed, question does not arise of any disallowance. The assessing however, at liberty to examine such expenditure if ever claimed in future. 5.13. The addition made of Rs.25,58,00,000/- u/s 69C of Income Tax is therefore deleted and The grounds of appeal D to H are allowed as above. In support of the grounds raised by the Revenue, the relied on the order of the Assessing Officer and submitted that in view of finding of the Hon’ble City Sessions Judge that assessee and its sister concern failed to explain source of the cash expenditure incurred through its books of accounts. The assessee to produce copy of all the cash vouchers and produce Mr verification of the claim of the assessee, instead of shifting th to the Assessing Officer. He submitted that primarily the assessee was required to substantiate whether the expenditure claimed Sessions Judge by way of exhibit Ex.P -29 to Ex.P.245 was her the books of accounts of the assessee or its sister concern. Instead of doing so, the assessee mainly harped Anand was made by way of cheque or demand M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 47 ssessments have been completed claimed as expense nor added in Work in Progress. Singe in the current year such expenses are not The assessing officer is, however, at liberty to examine such expenditure if ever claimed in future. u/s 69C of Income Tax Act, 1961, allowed as above.” , the Ld. Departmental relied on the order of the Assessing Officer and submitted that Judge that assessee and its expenditure incurred The onus was on the chers and produce Mr. Anand for verification of the claim of the assessee, instead of shifting the burden of to the Assessing Officer. He submitted that primarily the assessee was required to substantiate whether the expenditure claimed 29 to Ex.P.245 was her the books of accounts of the assessee or its sister concern. Instead of doing so, the assessee mainly harped on argument that or demand draft from the bank account of the assessee and its sister concern, documentary evidences were filed before the Assessing Officer. He submitted that Ld. CIT(A) has deleted the addition without providing opportunity to the Assessing Officer on the documents filed before the Ld. CIT(A). that there is need to verify been credited in the bank same has been originated from the bank account of the assessee or its sister concern. He submitted that it is t suit against LK Trust for recovery of expenditure on the ground that it has incurred expenditure on removal of huts and filed voucher to Ex.P.245, therefore onus is on the assessee to show reflected in those exhibits has been incurred out of books of accounts of the assessee or its sister concern. He submitted that no such burden has been discharged by the assessee even before the Ld. CIT(A) and therefore order of the Ld. CIT(A) need to be reversed and addition restored back to the AO. 18. Before us, the Ld. counsel pages 1 to 306. Further, he assailed the addition made by the Ass M/s Pebble Bay Developers Pvt. Ltd. bank account of the assessee and its sister concern, for which also no documentary evidences were filed before the Assessing Officer. He submitted that Ld. CIT(A) has deleted the addition without providing opportunity to the Assessing Officer on the documents filed before the Ld. CIT(A). need to verify whether amount of expenditure been credited in the bank account of Mr. Anand and whether the source of the same has been originated from the bank account of the assessee or its sister concern. He submitted that it is the sister concern of assessee who has filed for recovery of expenditure on the ground that it has expenditure on removal of huts and filed voucher to Ex.P.245, therefore onus is on the assessee to show that those exhibits has been incurred out of books of accounts of the assessee or its sister concern. He submitted that no such burden has been discharged by the assessee even before the Ld. CIT(A) and therefore order of ed to be reversed and addition in question need to be restored back to the AO. Ld. counsel of the assessee filed a paperbook cont , he assailed the addition made by the Ass M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 48 for which also no documentary evidences were filed before the Assessing Officer. He submitted that Ld. CIT(A) has deleted the addition without providing opportunity to the Assessing Officer on the documents filed before the Ld. CIT(A). He submitted expenditure in question has Anand and whether the source of the same has been originated from the bank account of the assessee or its sister he sister concern of assessee who has filed for recovery of expenditure on the ground that it has expenditure on removal of huts and filed voucher by way of Ex.P.29 that the expenditure those exhibits has been incurred out of books of accounts of the assessee or its sister concern. He submitted that no such burden has been discharged by the assessee even before the Ld. CIT(A) and therefore order of in question need to be filed a paperbook containing , he assailed the addition made by the Assessing Officer under section 69C of the hands of the assessee only if the assessee offers no explanation about the source of such expenditure or he offers an unsatisfactory explanation about the source of such expenditure. He submit books of accounts of the assessee accepted by the Ld. Assessing Officer himself as depicting true and fair view of the state of affairs of the assessee company of accounts are accepted as correct then there is no question of any fu addition under section 6 submitted that in such circumstances the addition deserve to be deleted relying on the judgment of the Hon’ble Delhi High Court in the case of Radhika creation (2011) 10 taxmann.com 138 (Delhi) 19. He further submitted that for invoking section on the Revenue to prove that expenditure actually incurred by the assessee has not been explained. In the present case, said discharged by the Assessing Officer and therefore no additio under section 69C of the M/s Pebble Bay Developers Pvt. Ltd. 9C of the Act. He submitted that addition could be made in the hands of the assessee only if the assessee offers no explanation about the source of such expenditure or he offers an unsatisfactory explanation about the source of such expenditure. He submitted that in the present case, the books of accounts of the assessee have been audited and have also been Assessing Officer himself as depicting true and fair view of the state of affairs of the assessee company. According to him, of accounts are accepted as correct then there is no question of any fu addition under section 69C of the Act, since the source is duly explained. He submitted that in such circumstances the addition deserve to be deleted ent of the Hon’ble Delhi High Court in the case of Radhika creation (2011) 10 taxmann.com 138 (Delhi). He further submitted that for invoking section 69C of the to prove that expenditure actually incurred by the assessee not been explained. In the present case, said burden discharged by the Assessing Officer and therefore no additio 9C of the Act. M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 49 . He submitted that addition could be made in the hands of the assessee only if the assessee offers no explanation about the source of such expenditure or he offers an unsatisfactory explanation about ted that in the present case, the audited and have also been Assessing Officer himself as depicting true and fair view of According to him, once the books of accounts are accepted as correct then there is no question of any further since the source is duly explained. He submitted that in such circumstances the addition deserve to be deleted ent of the Hon’ble Delhi High Court in the case of CIT Vs of the Act burden is to prove that expenditure actually incurred by the assessee burden has not been discharged by the Assessing Officer and therefore no addition could be made 19.1 Further, he submitted that assessee has made payments to Mr Anand and who in turn vacated the said property. As such any expenditure in cash at all incurred was by him and not by the assessee therefore entire payments and transactions should be treated as question of any disallowance 19.2 Further it was also submitted that assessee had submitted all details before the Assessing Officer and therefore it was to prove that said details were incorrect by way o and investigation. He submitted tha failure on the part of the Assessing Officer in performing his duty. According to the Ld. counsel of the assessee Assessing Officer has not performed enquiry like summoning Mr and materials/particulars of the transactions are furnished to him. As such the addition is unsustainable, since it is attributable to the failure on the part of the Assessing Officer to perform his part of the duty. In support of the contention that once the assessee furnishes all the requisite details, the cannot sit back with folded hands till the assessee exhaust all the evidence submitted in his possession and then reje M/s Pebble Bay Developers Pvt. Ltd. mitted that assessee has made payments to Mr Anand and who in turn vacated the said property. As such any expenditure in cash at all incurred was by him and not by the assessee therefore entire payments should be treated as explained and therefore there question of any disallowance. Further it was also submitted that assessee had submitted all details before the Assessing Officer and therefore it was onus of the Assessing Officer to prove that said details were incorrect by way of making necessary inquiries and investigation. He submitted that the assessee cannot be penaliz failure on the part of the Assessing Officer in performing his duty. According of the assessee Assessing Officer has not performed enquiry like summoning Mr. Anand, even after the entire details and materials/particulars of the transactions are furnished to him. As such the addition is unsustainable, since it is attributable to the failure on the part of Officer to perform his part of the duty. In support of the contention that once the assessee furnishes all the requisite details, the cannot sit back with folded hands till the assessee exhaust all the evidence submitted in his possession and then reject the claim of the assessee on M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 50 mitted that assessee has made payments to Mr Anand and who in turn vacated the said property. As such any expenditure in cash at all incurred was by him and not by the assessee therefore entire payments herefore there is no Further it was also submitted that assessee had submitted all details of the Assessing Officer f making necessary inquiries t the assessee cannot be penalized for any failure on the part of the Assessing Officer in performing his duty. According of the assessee Assessing Officer has not performed any even after the entire details of evidence and materials/particulars of the transactions are furnished to him. As such the addition is unsustainable, since it is attributable to the failure on the part of Officer to perform his part of the duty. In support of the contention that once the assessee furnishes all the requisite details, the AO cannot sit back with folded hands till the assessee exhaust all the evidence ct the claim of the assessee on the presumption, the Ld. counsel High Court in the case of 692 ( Calcutta). 19.3 It was also submitted by the deduction has been claimed by the assessee in respect of the said payments to Mr. Anand for clearing the property and said amount paid by the assessee is actually recoverable from LK expenditure is made, there 20. We have heard travel submission of the parties on the issue in dispute and perused the relevant material on record. discussed in earlier paras of this order and th same again for brevity. The issue in dispute in the background of above facts is that whether the expenditure incurred for removal of hutments for which KBPL filed a suit for recovery from LK explained sources or sources of which are unexplained. The question has been ultimately transferred to the assessee and it is claimed before the Hon’ble Sessions expenses for removal of M/s Pebble Bay Developers Pvt. Ltd. Ld. counsel relied on the decision of the Hon’ble Calcutta High Court in the case of CIT v. Kamdenu Vyapar Co Ltd (2003) 263 ITR It was also submitted by the Ld. counsel of the assessee that no eduction has been claimed by the assessee in respect of the said payments to the property and said amount paid by the assessee is overable from LK Trust. As such, there was no claim for therefore cannot be subject to disallowance We have heard travel submission of the parties on the issue in dispute and perused the relevant material on record. The facts of the case earlier paras of this order and therefore we are not repeating the same again for brevity. The issue in dispute in the background of above facts is that whether the expenditure incurred for removal of hutments for which KBPL filed a suit for recovery from LK Trust, has been incurred out of explained sources or sources of which are unexplained. The question has been ultimately transferred to the assessee and it is claimed Sessions Judge by KBPL that with effect from 27/01/2007, expenses for removal of huts have been incurred by the assessee. i.e M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 51 relied on the decision of the Hon’ble Calcutta Vyapar Co Ltd (2003) 263 ITR of the assessee that no eduction has been claimed by the assessee in respect of the said payments to the property and said amount paid by the assessee is was no claim for disallowance. We have heard travel submission of the parties on the issue in dispute The facts of the case have been erefore we are not repeating the same again for brevity. The issue in dispute in the background of above facts is that whether the expenditure incurred for removal of hutments for which has been incurred out of explained sources or sources of which are unexplained. The plot of land in question has been ultimately transferred to the assessee and it is claimed by KBPL that with effect from 27/01/2007, been incurred by the assessee. i.e. Pebble bay developer Private Limited. It is the KBPL, who has claimed that expenses of more than ₹ 36 crore have been incurred on removal of hutments. List of all such expenses along with vouchers were produced befo Sessions Judge, which have been particularly identified as Ex.P The moot question is whether those expenses have been incurred from the books of KBPL or books of the assessee. The H analyzed the evidences observed that KBPL failed to correlate the source of those payments either from the bank statements or from cash book. framed various issues. The first issue fram incurred an expenditure of property at the instance of LK Trust. The Hon’ble court examined three witnesses on behalf of the KBPL including its director Sri Aditya Raheja and marked documents as Ex.P cross examination before the court that some cash name of the payer and major portion of the payment was made to Sh He also stated that payments for exp i.e. Pebble Bay developers Private Limited, whose statement of accounts was M/s Pebble Bay Developers Pvt. Ltd. bay developer Private Limited. It is the KBPL, who has claimed that expenses 36 crore have been incurred on removal of hutments. List of all such expenses along with vouchers were produced before the Hon’ble which have been particularly identified as Ex.P The moot question is whether those expenses have been incurred from the books of KBPL or books of the assessee. The Hon’ble City Sessions s filed by KBPL in support of those expenses and observed that KBPL failed to correlate the source of those payments either from the bank statements or from cash book. The Hon’ble City Sessions framed various issues. The first issue framed was whether the KBPL has incurred an expenditure of ₹29,66,11,240/- for clearing the property at the instance of LK Trust. The Hon’ble court examined three witnesses on behalf of the KBPL including its director Sri Aditya Raheja and rked documents as Ex.P-1 to Ex.P-245. Sri Aditya Raheja admitted during cross examination before the court that some cash vouchers name of the payer and major portion of the payment was made to Sh He also stated that payments for expenditure were made through the assessee i.e. Pebble Bay developers Private Limited, whose statement of accounts was M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 52 bay developer Private Limited. It is the KBPL, who has claimed that expenses 36 crore have been incurred on removal of hutments. List of all re the Hon’ble City which have been particularly identified as Ex.P-29 to Ex.P.245. The moot question is whether those expenses have been incurred from the City Sessions Judge has filed by KBPL in support of those expenses and observed that KBPL failed to correlate the source of those payments either City Sessions Judge ed was whether the KBPL has for clearing the huts found in the property at the instance of LK Trust. The Hon’ble court examined three witnesses on behalf of the KBPL including its director Sri Aditya Raheja and 245. Sri Aditya Raheja admitted during vouchers do not contain name of the payer and major portion of the payment was made to Sh. Anand. enditure were made through the assessee i.e. Pebble Bay developers Private Limited, whose statement of accounts was filed as Ex.P-10. The relevant observation are extracted as under: “25. Major portion of the .amount for Anand as can be seen from Ex.P.9 and Anand has not been examined before the court. the order sheet, the plaintiff had made efforts to examine said Anand issued summons to said Anand. But said Anand did not appear inspite of service of summons. The plaintiff also made efforts to secure the Anand by getting issuing arrest warrant inspite of the same, said Anand did not appear before the court and he could not be examined by the plaintiff. 26. PW-2 clearly states in page No.013 that he has Anand through cheques as payment have been made to Anand. Rs.29,66,11,240/- shown in para 13 and 14 of the plaint have not been shown in Ex.P.11 letter. It is pertinent to note that Ex.P.10 statement of account relates to M/s.Pebble Baby Developers Pvt.Ltd:. Developers Pvt.Ltd., is not the plaintiff Pvt.Ltd., is the purchaser of the schedule property from the defendant on 31/1/2007 under Ex.P.5 sale deed. It has come in the plaintiff company and M/s. control of family of the Sri Vijay Raheja and his family is associated with plaintiff company and M/s. statement of account pertains to period 1/4/2004 to 31/3/2009. No doubt, as can be seen from Ex.P.10, the amounts were paid through banks Standard Chartered Bank through cheques. But in order to support the entries made in Ex.P.10, the plaintiff h M/s Pebble Bay Developers Pvt. Ltd. 10. The relevant observations of the Hon’ble City Sessions Judge or portion of the .amount for about Rs.8.75 Crores was paid to Anand as can be seen from Ex.P.9 and Ex.P.10 statement of account. But said been examined before the court. No doubt, as can be the order sheet, the plaintiff had made efforts to examine said Anand issued summons to said Anand. But said Anand did not appear inspite of service of summons. The plaintiff also made efforts to secure the presence of said Anand by getting issuing arrest warrant and attachment of his property and ame, said Anand did not appear before the court and he could not be examined by the plaintiff. 2 clearly states in page No.013 that he has made all the payments to Anand through cheques as stated in para 3 of the affidavit and no cash een made to Anand. He further clearly admit shown in para 13 and 14 of the plaint have not been shown in pertinent to note that Ex.P.10 statement of account relates ebble Baby Developers Pvt.Ltd:. Admittedly M/s.Pebble Baby Developers Pvt.Ltd., is not the plaintiff and M/s.Pebble Bab purchaser of the schedule property from the defendant on 31/1/2007 under Ex.P.5 sale deed. It has come in the evidence that both the iff company and M/s. Pebble Baby Developers Pvt.Ltd., are under the control of family of the Sri Vijay Raheja and his family is associated with plaintiff company and M/s. Pebble Baby Developers Pvt. Ltd. statement of account pertains to M/s.Pebble Baby Developers Pvt.Ltd., for the 1/4/2004 to 31/3/2009. No doubt, as can be seen from Ex.P.10, the amounts were paid through banks Standard Chartered Bank through cheques. support the entries made in Ex.P.10, the plaintiff h M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 53 City Sessions Judge Crores was paid to Ex.P.10 statement of account. But said No doubt, as can be seen from the order sheet, the plaintiff had made efforts to examine said Anand and he got issued summons to said Anand. But said Anand did not appear inspite of service presence of said and attachment of his property and ame, said Anand did not appear before the court and he could made all the payments to stated in para 3 of the affidavit and no cash He further clearly admits amount of shown in para 13 and 14 of the plaint have not been shown in pertinent to note that Ex.P.10 statement of account relates M/s.Pebble Baby and M/s.Pebble Baby Developers purchaser of the schedule property from the defendant on evidence that both the Baby Developers Pvt.Ltd., are under the control of family of the Sri Vijay Raheja and his family is associated with the Pvt. Ltd. But Ex.P.10 .Pebble Baby Developers Pvt.Ltd., for the 1/4/2004 to 31/3/2009. No doubt, as can be seen from Ex.P.10, the amounts were paid through banks Standard Chartered Bank through cheques. support the entries made in Ex.P.10, the plaintiff has not at all produced the pass book of the plaintiff company or Developers Pvt.Ltd., to show that the from the account of the plaintiff company or M/s.Pebble Baby Developers Ltd.” 20.1 The Hon’ble City Sessions of KBPL Sh Aditaya Raheja where in during cross specifically asked to substantiate the payment from bank account or from the cash book, but he did not comply. 20.2 The relevant finding of the Hon’ble under: “34. As stated supra, the plaintiff has mainly relied upon Ex.P.29 to Ex.P.232 to basis his suit: claim amount. 35. Ex.P.63 is one cash voucher passed by Byrappa for stated in Ex.P.63 that the said the land at Kogilu village, Yelahanka Hobli for rehabilitation of hutmants. But plaintiff has not at all produced the sale deed or other documents to show that land was purchased form this Byrappa by paying Rs.2,25,00,000/ rehabilitation of the hutments. It is pertinent to note that this Ex.P.63 is dated: 6/12/2007. Ex.P.64 is another cash voucher passed by one Subramani, Civil Contractor, on 7/12/2007 wherei Rs.1,53,00,000/- to civil contractor for construction of residential units for rehabilitants at Kogilu village, 6/1/2007 as per Ex.P.63, the residential units cannot be constructe M/s Pebble Bay Developers Pvt. Ltd. produced the pass book of the plaintiff company or M/s. Developers Pvt.Ltd., to show that the amount shown in Ex.P.10 were deducted of the plaintiff company or M/s.Pebble Baby Developers City Sessions Judge has recorded statement of the director Aditaya Raheja where in during cross-examination, he was specifically asked to substantiate the payment from bank account or from the cash book, but he did not comply. The relevant finding of the Hon’ble City Sessions Judge is reproduced as 4. As stated supra, the plaintiff has mainly relied upon Ex.P.29 to Ex.P.232 to basis his suit: claim amount. 35. Ex.P.63 is one cash voucher passed by Byrappa for Rs.2,25,00 stated in Ex.P.63 that the said amount was paid in advance towards the sale of at Kogilu village, Yelahanka Hobli for rehabilitation of hutmants. But plaintiff has not at all produced the sale deed or other documents to show that d was purchased form this Byrappa by paying Rs.2,25,00,000/ rehabilitation of the hutments. It is pertinent to note that this Ex.P.63 is dated: 6/12/2007. Ex.P.64 is another cash voucher passed by one Subramani, Civil Contractor, on 7/12/2007 wherein the plaintiff has allegedly paid to civil contractor for construction of residential units for rehabilitants at Kogilu village, Yelahanka Hobli. If land was purchased on per Ex.P.63, the residential units cannot be constructe M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 54 Pebble Baby amount shown in Ex.P.10 were deducted of the plaintiff company or M/s.Pebble Baby Developers Pvt. Judge has recorded statement of the director examination, he was specifically asked to substantiate the payment from bank account or from the Judge is reproduced as 4. As stated supra, the plaintiff has mainly relied upon Ex.P.29 to Ex.P.232 to Rs.2,25,00,000/-. It is amount was paid in advance towards the sale of at Kogilu village, Yelahanka Hobli for rehabilitation of hutmants. But plaintiff has not at all produced the sale deed or other documents to show that d was purchased form this Byrappa by paying Rs.2,25,00,000/- . for rehabilitation of the hutments. It is pertinent to note that this Ex.P.63 is dated: 6/12/2007. Ex.P.64 is another cash voucher passed by one Subramani, Civil n the plaintiff has allegedly paid to civil contractor for construction of residential units for Yelahanka Hobli. If land was purchased on per Ex.P.63, the residential units cannot be constructed in a single day on 7/12/2007. More over the author of Subramani have not been examined these persons in order to establish the contents Ex.P.64. ExP-11 is another cash voucher under which Rs.72 Lakhs was paid to one Lakshamma being the compensation towards vacating and handing over possession of site at Nagasettihalli village, Bangalore Though Ex.P.112 is another paid to Lakshmamma for vacating and handing over possession of the site at Nagasettihalli village. was paid to Lakshamamma. was paid to Lakshamma for vacating the it is not known which of the site and how much area she has author of Ex.P.111Lakshmamma has not been Ex.P.114 is another v paid to one Armugaum for removal of hutments on 9//2008. voucher under which Rs.25 Lakhs was the hutments. Under Ex.P.116 voucher dated: 9/2/2008 Rs.4 to one Shamalamma for removal of the sign board and for rehabilitation of the hut dwellers. But the author of Ex.P.116 was not examined. voucher dated: 9/2/2008 under which Rs.75 Lakhs was the expenses incurred for vacating of hut voucher under which RS.50 Lakhs was paid to Madhusudhan for incurring expenses for eviction of hut to Jayamma on 9/2/2008 clearly raised doubt with regard to payment made by the plaintiff persons. 36. But as stated supra, the plaintiff has not produced plaintiff company. Even he has M/s Pebble Bay Developers Pvt. Ltd. More over the author of Ex.P.63' Byrappa and Ex.P.64 Subramani have not been examined before the court. The plaintiff could have examined these persons in order to establish the contents of Ex.P.63 and another cash voucher under which Rs.72 Lakhs was paid to being the compensation towards vacating and handing over possession of site at Nagasettihalli village, Bangalore and it is dated: 5/2/2008. Though Ex.P.112 is another cash voucher under which Rs.8 Lakhs was again Lakshmamma for vacating and handing over possession of the site at Nagasettihalli village. Again under Ex.P.113 cash voucher, another Rs.25 Lakhs Lakshamamma. Therefore, it is clear that totally Rs.1,05,000, was paid to Lakshamma for vacating the site and handing over possession. But which of the site and how much area she has occupied. author of Ex.P.111Lakshmamma has not been care examined before the court. Ex.P.114 is another voucher dated: 9/2/2008 under which Rs.25 Lakhs was Armugaum for removal of hutments on 9//2008. Ex.P.115 is cash voucher under which Rs.25 Lakhs was paid to one Venkatappa for removal of Under Ex.P.116 voucher dated: 9/2/2008 Rs.40 Lakhs was to one Shamalamma for removal of the sign board and for rehabilitation of the hut dwellers. But the author of Ex.P.116 was not examined. Ex.P.117 is the cash voucher dated: 9/2/2008 under which Rs.75 Lakhs was paid Anand towards es incurred for vacating of hut-dwellers. Ex.P.118 is another cash which RS.50 Lakhs was paid to Madhusudhan for incurring expenses for eviction of hut-dwellers . So also in Ex.P.119 Rs.50 Lakhs was paid to Jayamma on 9/2/2008 for eviction of hut dwellers. These cash vouchers raised doubt with regard to payment made by the plaintiff 36. But as stated supra, the plaintiff has not produced the account book of the plaintiff company. Even he has not produced the cash book or IT returns. The M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 55 Ex.P.63' Byrappa and Ex.P.64 The plaintiff could have of Ex.P.63 and another cash voucher under which Rs.72 Lakhs was paid to being the compensation towards vacating and handing over and it is dated: 5/2/2008. which Rs.8 Lakhs was again Lakshmamma for vacating and handing over possession of the site at cash voucher, another Rs.25 Lakhs Rs.1,05,000,00/- site and handing over possession. But occupied. Even the examined before the court. dated: 9/2/2008 under which Rs.25 Lakhs was Ex.P.115 is cash paid to one Venkatappa for removal of 0 Lakhs was paid to one Shamalamma for removal of the sign board and for rehabilitation of the Ex.P.117 is the cash paid Anand towards dwellers. Ex.P.118 is another cash which RS.50 Lakhs was paid to Madhusudhan for incurring the Ex.P.119 Rs.50 Lakhs was paid n of hut dwellers. These cash vouchers raised doubt with regard to payment made by the plaintiff to these the account book of the not produced the cash book or IT returns. The defendant had filed an application under Order 11. Rules 12, 14, 15 of CPC directing the plaintiff to produce the IT returns and stated in page No.6 of his their company has maintained the cash book and he has to and he will produce the said cash book defendant was rejected since PW book. So far as income on the ground that they are principle of law that plaintiff should stand on his own legs and he make use of the weakness of in cash vouchers produced at Ex.P.29 to Ex.P.232, the plaintiff could have produced the cash book and account extracts maintained the plaintiff has not done the same. 37. A question was posed to PW as per para 13 and 14 of the plaint, the plaintiff had claimed Rs.29,66,11,240/ and as per Ex.P.29 to Ex.P.232 vouchers the said amount would come Rs.30,17,10,100/- and witness answered t and he would get back and say. regard to the discrepancy of amount during the course of his further examination on 11/3/2014. 15 of his cross- examination that Ex.P.141 to Ex.P.210 cash vouchers contain voucher number and date of payment. As paid major amount to one Anand. cross-examination that he making payment to him and he will produce the acknowledgement and IT returns. But plaintiff has not produced the acknowledgment said to have been passed by Anand. More was to be completed within one month and the deposited amount of Rs.10 M/s Pebble Bay Developers Pvt. Ltd. had filed an application under Order 11. Rules 12, 14, 15 of CPC directing the plaintiff to produce the IT returns and cash books. stated in page No.6 of his cross-examination that he does not know whether company has maintained the cash book and he has to check with his C.A. and he will produce the said cash book if available. But said application of the rejected since PW-1 has stated that he does not have any k. So far as income-tax returns are concerned, the application was rejected on the ground that they are confidential documents. But it is the settled principle of law that plaintiff should stand on his own legs and he make use of the weakness of the other side. In order to support the entries made produced at Ex.P.29 to Ex.P.232, the plaintiff could have produced the cash book and account extracts maintained by the plaintiff. But the plaintiff has not done the same. on was posed to PW-2 in page No.14 of his cross-examination that as per para 13 and 14 of the plaint, the plaintiff had claimed Rs.29,66,11,240/ and as per Ex.P.29 to Ex.P.232 vouchers the said amount would come and witness answered that he would reconcile the statement and he would get back and say. But PW-2 has not given explanation with discrepancy of amount during the course of his further examination on 11/3/2014. Moreover, PW-2 clearly admits in page Nos.14 an examination that Ex.P.141 to Ex.P.210 cash vouchers contain voucher number and date of payment. As stated supra, the plaintiff has paid major amount to one Anand. PW-2 clearly stated in page No.15 of his examination that he has collected the acknowledgment from Anand while making payment to him and he will produce the acknowledgement and IT plaintiff has not produced the acknowledgment said to have been Moreover, it is pertinent to note that as per Ex.P.11, the work was to be completed within one month and the deposited amount of Rs.10 M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 56 had filed an application under Order 11. Rules 12, 14, 15 of CPC cash books. But PW-2 has s not know whether check with his C.A. if available. But said application of the 1 has stated that he does not have any cash the application was rejected confidential documents. But it is the settled principle of law that plaintiff should stand on his own legs and he should not In order to support the entries made produced at Ex.P.29 to Ex.P.232, the plaintiff could have by the plaintiff. But examination that as per para 13 and 14 of the plaint, the plaintiff had claimed Rs.29,66,11,240/- and as per Ex.P.29 to Ex.P.232 vouchers the said amount would come to reconcile the statement 2 has not given explanation with discrepancy of amount during the course of his further cross- clearly admits in page Nos.14 and examination that Ex.P.141 to Ex.P.210 cash vouchers do not stated supra, the plaintiff has 2 clearly stated in page No.15 of his from Anand while making payment to him and he will produce the acknowledgement and IT plaintiff has not produced the acknowledgment said to have been Ex.P.11, the work was to be completed within one month and the deposited amount of Rs.10 Crores was to be refunded But these cash vouchers at Ex.P.111 to Ex.P.119 are 9/2/2008 i.e., they were spent after Ex.P.11.” 20.3 Thus, it is clear that the a expenditure of ₹36,36,72,564/ accounts of the assessee bank statement or cash book Sessions Judge, accordingly, the Hon’ble court rejected the claim observing as under: “57. When plaintiff has failed to establish the actual and how much amount was due from the defendant, he is not entitled for interest. Therefore, the plaintiff is not entitled for the suit claim amount. Accordingly, issue Nos. 1 and 2 are held in the negative. 20.4 The Assessing Officer explain the source of expenditure incurred by way of vouchers Ex.P 29 to Ex.P.245 were filed before him. Before the Ld. CIT(A) the assessee mainly submitted that assessee has discharged its burden by way of c payments were made by way of bank cheque has made further payments to hutments dwellere/other persons, which might M/s Pebble Bay Developers Pvt. Ltd. Crores was to be refunded after deducting expenses of eviction of slum dwellers. But these cash vouchers at Ex.P.111 to Ex.P.119 are dated: 5/2/2008 to i.e., they were spent after one month from 27/1/2007 mentioned in Thus, it is clear that the assessee claimed to have incurred 36,72,564/- for removal of hutments, accounts of the assessee (KBPL), however, no supporting evidence by way of bank statement or cash book was produced before the Hon’ble , accordingly, the Hon’ble court rejected the claim observing as When plaintiff has failed to establish the actual expenses made by him and how much amount was due from the defendant, he is not entitled for interest. Therefore, the plaintiff is not entitled for the suit claim amount. Accordingly, issue Nos. 1 and 2 are held in the negative.” The Assessing Officer has also noted that no supporting documents to explain the source of expenditure incurred by way of vouchers Ex.P 29 to Ex.P.245 were filed before him. Before the Ld. CIT(A) the assessee mainly submitted that assessee has discharged its burden by way of c payments were made by way of bank cheques/Draft to one Mr has made further payments to hutments dwellere/other persons, which might M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 57 after deducting expenses of eviction of slum dwellers. dated: 5/2/2008 to one month from 27/1/2007 mentioned in ssessee claimed to have incurred of for removal of hutments, through books of er, no supporting evidence by way of produced before the Hon’ble Court of City , accordingly, the Hon’ble court rejected the claim observing as expenses made by him and how much amount was due from the defendant, he is not entitled for interest. Therefore, the plaintiff is not entitled for the suit claim amount. has also noted that no supporting documents to explain the source of expenditure incurred by way of vouchers Ex.P 29 to Ex.P.245 were filed before him. Before the Ld. CIT(A) the assessee mainly submitted that assessee has discharged its burden by way of claiming that Draft to one Mr. Anand, who has made further payments to hutments dwellere/other persons, which might be in cash. It is claimed that assessee had provided address of Mr the Assessing Officer and therefore it was his duty to issue and verify the fact of payment by the assessee. The Ld. CIT(A) concurred with above arguments of the assessee and held that cash payments have been made for removal of hutments by Mr Assessing Officer who did not verify the same from him. We are not convinced with the above finding of the Ld. CIT(A). We find that Mr appear even before the Hon’ble for his presence, and he did not confirm the cash payments before Hon’ble City Sessions Judge whether same circumstances, it was Assessing Officer and justify a through bank cheque or draft and how much amount was deposited in his bank accounts and thereafter distributed to hutments devellers or other contractors. The assessee has only produced list of to have been issued from the the same has been credited into bank accounts of Mr established. M/s Pebble Bay Developers Pvt. Ltd. be in cash. It is claimed that assessee had provided address of Mr and therefore it was his duty to issue and verify the fact of payment by the assessee. The Ld. CIT(A) concurred with above arguments of the assessee and held that cash payments have been made for removal of hutments by Mr. Anand as confirmed by him but it is the Assessing Officer who did not verify the same from him. We are not convinced with the above finding of the Ld. CIT(A). We find that Mr appear even before the Hon’ble City Sessions Judge despite issuing warrant esence, and he did not confirm the cash payments before Hon’ble Judge whether same were incurred through him or not. In such onus of the assessee to produce him before the r and justify as how much amount was received by him or draft and how much amount was deposited in his bank accounts and thereafter distributed to hutments devellers or other contractors. The assessee has only produced list of drafts or sued from the bank account of assessee or KBPL but whether the same has been credited into bank accounts of Mr. Anand, has not been M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 58 be in cash. It is claimed that assessee had provided address of Mr. Anand to and therefore it was his duty to issue summon to him and verify the fact of payment by the assessee. The Ld. CIT(A) concurred with above arguments of the assessee and held that cash payments have been by him but it is the Assessing Officer who did not verify the same from him. We are not convinced with the above finding of the Ld. CIT(A). We find that Mr. Anand did not Judge despite issuing warrant esence, and he did not confirm the cash payments before Hon’ble incurred through him or not. In such to produce him before the was received by him or draft and how much amount was deposited in his bank accounts and thereafter distributed to hutments devellers or other or cheques claimed of assessee or KBPL but whether Anand, has not been 20.5 As far as invoking of section 6 incurred as recorded in Ex.P.29 to Ex.P.245 has not been incurred out of explained sources, then it is liable for addition under section 69C either in the hands of KBPL or the assessee. The claim of the assessee that no be made in the hands of the assessee claimed in the year under consideration, is devoid of merit. The issue of disallowance of expenditure under section 37 arises if same is claimed by the assessee as business deduction, but in the instant case the Assessing Officer has proposed addition for making payment out of unexplained sources or sources of which are not recorded in books of accounts of the assessee or KBPL. The Ld. counsel of the assessee refer which is ledger account o account shows payment of 90, ledger account of LK trust in the books of assessee has been placed on record and according to which amount of as non-recoverable. The by Mr. Ananad Kumaram confirming that he was instrumental in removing the hutments and received paperbook pages 156. The assessee M/s Pebble Bay Developers Pvt. Ltd. s far as invoking of section 69C is concerned, if the expenditure incurred as recorded in Ex.P.29 to Ex.P.245 has not been incurred out of explained sources, then it is liable for addition under section 69C either in the hands of KBPL or the assessee. The claim of the assessee that no be made in the hands of the assessee as no deduction of expenditure has been claimed in the year under consideration, is devoid of merit. The issue of disallowance of expenditure under section 37 arises if same is claimed by the siness deduction, but in the instant case the Assessing Officer has proposed addition for making payment out of unexplained sources or sources of which are not recorded in books of accounts of the assessee or of the assessee referred to page 88 of the paperbook which is ledger account of Mr. Anand in the books of M/s KBPL. This ledger account shows payment of ₹8,75,00,000/-. Further, in paperbook pages 89 to , ledger account of LK trust in the books of assessee has been placed on cord and according to which amount of ₹24,11,79,240/-has been written of recoverable. The Ld. counsel has also referred to a declaration signed Kumaram confirming that he was instrumental in removing the hutments and received cheques/draft from KBPL, which is placed on The assessee in its submission has mainly stated that M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 59 9C is concerned, if the expenditure incurred as recorded in Ex.P.29 to Ex.P.245 has not been incurred out of explained sources, then it is liable for addition under section 69C either in the hands of KBPL or the assessee. The claim of the assessee that no addition can s no deduction of expenditure has been claimed in the year under consideration, is devoid of merit. The issue of disallowance of expenditure under section 37 arises if same is claimed by the siness deduction, but in the instant case the Assessing Officer has proposed addition for making payment out of unexplained sources or sources of which are not recorded in books of accounts of the assessee or to page 88 of the paperbook s KBPL. This ledger urther, in paperbook pages 89 to , ledger account of LK trust in the books of assessee has been placed on has been written off has also referred to a declaration signed Kumaram confirming that he was instrumental in removing the draft from KBPL, which is placed on in its submission has mainly stated that for removal of the hutments accounts of the assessee expenditure recorded in Ex.P29 to Ex.P.245 has been incurred out of explained sources are not and it is not the question what the assessee has incurred expenditure out of its books of accounts The assessee has not discharged o recorded in Ex.P.29 to Ex.P.245. interest of substantial justice, we feel it appropriate to restore this matter back to the file of the direction to the assessee to: (1) Produce the Hon’ble (2) Produce a Aditya Raheja before Hon’ble (3) Produce the alleged bank cheques / draft issued by the KBPL or assessee have been deposited M/s Pebble Bay Developers Pvt. Ltd. for removal of the hutments expenses have been incurred accounts of the assessee. In our opinion, the moot question is whether expenditure recorded in Ex.P29 to Ex.P.245 has been incurred out of explained sources are not and it is not the question what the assessee has out of its books of accounts for removal of hutments he assessee has not discharged onus of explaining sources of expenditure recorded in Ex.P.29 to Ex.P.245. In the facts and circumstances interest of substantial justice, we feel it appropriate to restore this matter back to the file of the Ld. Assessing Officer for deciding a direction to the assessee to: Produce a copy of all vouchers of expenses submitted before the Hon’ble City Sessions Judge as asEx.P.1 to Ex.P.245. Produce a copy of Statement and cross objection of sh Aditya Raheja before Hon’ble City Sessions Produce Sh Anand along with his bank statement , wherein the alleged bank cheques / draft issued by the KBPL or assessee have been deposited M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 60 have been incurred from the books of the moot question is whether the expenditure recorded in Ex.P29 to Ex.P.245 has been incurred out of explained sources are not and it is not the question what the assessee has for removal of hutments. nus of explaining sources of expenditure In the facts and circumstances and the interest of substantial justice, we feel it appropriate to restore this matter ssessing Officer for deciding afresh with the a copy of all vouchers of expenses submitted before Judge as asEx.P.1 to Ex.P.245. copy of Statement and cross objection of sh City Sessions Judge along with his bank statement , wherein the alleged bank cheques / draft issued by the KBPL or (4) Produce evidence in support of source of payment incurred in relation to Ex.P. 29 to Ex.P.245 (5) Produce the pe vouchers accounts as who paid them whether it is KBPL or Mr 20.6 The Assessing Officer may carry out deem fit in the facts and that the assessee shall be afforded adequate opportunity of being heard. 20.7 Accordingly, the grounds raised by the statistical purposes whereas the grounds raised by the ass under rule 27 are dismissed. 21. In the result, appeal of the whereas the application of the assessee under rule 27 is dismissed Order pronounced in the open Court in Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 21/10/2022 Dragon Legal/Rahul Sharma, Sr. P.S. M/s Pebble Bay Developers Pvt. Ltd. Produce evidence in support of source of payment incurred in relation to Ex.P. 29 to Ex.P.245 Produce the persons, who have signed those cash and other vouchers, so that it can be ascertained from their Bank accounts as who paid them whether it is KBPL or Mr The Assessing Officer may carry out any other enquiry which and circumstances of the case. It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. Accordingly, the grounds raised by the Revenue statistical purposes whereas the grounds raised by the assessee in application under rule 27 are dismissed. In the result, appeal of the Revenue is allowed for statistical purposes, whereas the application of the assessee under rule 27 is dismissed nounced in the open Court in 21/10/2022. Sd/ PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 61 Produce evidence in support of source of payment incurred d those cash and other , so that it can be ascertained from their Bank accounts as who paid them whether it is KBPL or Mr. Anand. any other enquiry which he feels It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. Revenue are allowed for essee in application is allowed for statistical purposes, whereas the application of the assessee under rule 27 is dismissed. /10/2022. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER 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. //True Copy// M/s Pebble Bay Developers Pvt. Ltd. Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai M/s Pebble Bay Developers Pvt. Ltd. ITA No. 5744/M/2017 62 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai