Trilok Chand Chaudhary, New Delhi V. ACIT, Central Circle- 26, New Delhi

ITA 5871/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0805 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 14-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Search and seizure; Additional evidence; Deemed dividend; Documents seized
• Section: 153A; 133(6); 131; 68; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBE R & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 5871/DEL/2017 ( ASSESSMENT YEAR: 2012-13) MR. TRILOK CHAND CHAUDHARY, 39, GADAI PUR, MEHRAULI, NEW DELHI. 110030 PAN NO. AAEPC0683P VS ACIT CENTRAL CIRCLE 26, NEW DELHI. ASSESSEE BY SH. VED JAIN, ADV. REVENUE BY SH. S.S. RANA, CIT (DR) ORDER PER SHRI BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT (APPEALS)-31, NEW DELHI DATED 27.06.2017 FOR AY 2012- 13. 2. THE FACTS OF THE CASE ARE THAT IN THIS CASE RETU RN OF INCOME WAS ORIGINALLY FILED ON 31.03.2014 DECLARING INCOME OF RS. 7.28 CRORES. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT ON 11.09.2013 AND 17.09.2013 IN THE CAS E OF AKN DATE OF HEARING 27.08.2018 DATE OF PRONOUNCEMENT 20.09.2018 2 ITA NO. 5871/DEL/2017 GROUP OF CASES. THE CASE OF THE ASSESSEE WAS ALSO COVERED IN THE SEARCH. DURING THE COURSE OF SEARCH, CARRIED OUT A T THE DIFFERENT PREMISES LOCATED IN INDIA IN AKN GROUP, DOCUMENTS A ND DATA STORAGE DEVICES, ETC. BELONGING TO THE ASSESSEE WER E FOUND AND SEIZED. DURING THE COURSE OF SEARCH OPERATION, THE ASSESSEE MADE A TOTAL SURRENDER OF RS. 15 CRORES. THE BREAKUP OF THE SURRENDER IS THAT: - IN AY 2009-10, ASSESSEE SURRENDERED 1.2 CRO RE BEING THE AMOUNT SPENT ON MARRIAGE OF DAUGHTER, IN AY 2012-13 , (UNDER APPEAL) RS. 7.3 CRORES SURRENDERED BEING AMOUNT PAI D TO SARTAJ HOTEL APARTMENT VILLA PVT LTD. AND IN AY 2014-15, R S. 6.5 CRORES SURRENDERED WHICH INCLUDES SEIZED CASH OF RS. 2.95 CRORES FROM THE OFFICE OF CDR ESTATES AND RS. 41 LAKHS OF ADVAN CES DURING THE YEAR. NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE, REQUIRED THE ASSESSEE TO FURNISH RETURN OF INCOME WITHIN 15 DAYS . IN RESPONSE THERETO, THE RETURN OF INCOME U/S 153A WAS FILED BY ASSESSEE ON 31.03.2014 DECLARING INCOME OF RS. 7.28 CRORES WHIC H WAS DECLARED IN THE ORIGINAL RETURN OF INCOME FILED U/S 139 OF THE ACT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AS EARNED INCOME FROM OTHER SOURCES. 3 ITA NO. 5871/DEL/2017 3. DURING THE SEARCH ON THE ASSESSEE ON 17.09.2013 CERTAIN DOCUMENTS RELATED TO THE INVESTMENT ON PROPERTIES W ERE FOUND AND SEIZED FROM THE OFFICE PREMISES OF THE ASSESSEE AND M/S CDR ESTATE PVT. LTD. AS PER PAGE NO. 49-53 OF ANNEXUR E A-11 PARTY NO. TO-2, SEIZED FROM THE OFFICE PREMISES OF THE AS SESSEE AND M/S CDR ESTATE P. LTD., ASSESSEE HAD ENTERED INTO MEMOR ANDUM OF UNDERSTANDING (MOU) WITH M/S MEGHATECH REALTORS PVT . LTD. AND RECEIVED RS. 10 CRORES IN CASH FOR PURCHASING LAND IN HARCHANDPUR. THE ASSESSEE WAS CONFRONTED WITH THE DOCUMENTS IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT IN WHICH HE HAS SAID TO HAVE RECEIVED RS. 10 CRORES FROM M/S MEGHAT ECH REALTORS P. LTD. THIS AMOUNT WAS SUBSEQUENTLY PAID TO SMT. SAROJ SHARMA AND OTHERS FOR PURCHASE OF LAND AT HARCHANDPUR. IT WAS STATED BY ASSESSEE THAT HE WAS ACTING ON BEHALF OF M/S MEGHAT ECH REALTORS PVT. LTD. 3.1 DURING THE SEARCH ON 17.09.2013, DOCUMENT ANNEX URISED AS PAGE NO. 41-45 OF ANNEXURE A-11 PARTY TO2 RELATED TO INVESTMENT ON PROPERTIES BY SH. DEVENDER KUMAR IN HARCHANDPUR WAS ALSO FOUND AND SEIZED FROM THE OFFICE PREMISES OF THE AS SESSEE AND M/S 4 ITA NO. 5871/DEL/2017 CDR ESTATE P. LTD. DURING THE COURSE OF POST SEARC H INVESTIGATION SH. DEVENDER KUMAR WAS SUMMONED U/S 131 OF THE ACT TO EXAMINE AND VERIFY THE DOCUMENTS SEIZED. SH. DEVEN DER KUMAR IN HIS STATEMENT RECORDED U/S 131 OF THE ACT HAS STATE D THAT HE HAS RECEIVED RS. 20 CRORES IN CASH FROM M/S NEWAGE INFR ABUILDERS P. LTD. THIS AMOUNT WAS GIVEN TO HIM BY M/S NEWAGE IN FRABUILDERS P. LTD. AS PER THE MOU WITH M/S NEWAGE INFRABUILDER S P. LTD. AND HE WAS ACTING ON BEHALF OF COMPANY TO PURCHASE A LA ND AT HARCHANDPUR. IT WAS SAID BY SH. DEVENDER KUMAR THA T BOTH HE AND THE ASSESSEE TOGETHER HAD TRIED TO PURCHASE THE LAND AT HARCHANDPUR FROM SMT. SAROJ SHARMA AND OTHERS AND A CCORDINGLY PAID RS. 20 CRORES AS RECEIVED FROM M/S NEWAGE INFR ABUILDERS P. LTD. 3.2 THE AO IN ORDER TO EXAMINE THE FACTS ISSUED SUM MONS U/S 131 TO BOTH THE COMPANIES WITH WHOM SH. DEVENDER KU MAR AND ASSESSEE HAD SIGNED MOUS ON 17.10.2013, HOWEVER, TH E SUMMONS RECEIVED BACK UN-SERVED. SINCE THE SERVICE OF THE SUMMONS COULD NOT BE MADE THROUGH POSTAL MEANS, INSPECTORS OF THE OFFICE OF ADIT (INV.) WERE DEPUTED TO SERVE THE SUMMONS ON TWO AFO RESAID 5 ITA NO. 5871/DEL/2017 COMPANIES. DESPITE THE BEST EFFORTS THE INSPECTOR OF INCOME TAX COULD NOT FIND THE ABOVE COMPANIES ON THE GIVEN ADD RESS. THE REPORTS OF THE INSPECTORS ARE REPRODUCED IN THE ASS ESSMENT ORDER. 4. THE AO NOTED THAT ASSESSEE IN HIS STATEMENT REC ORDED U/S 132(4) OF THE I.T. ACT, HAS STATED THAT SH. K.V. JA IN HAD FACILITATED THE ABOVE MOU WITH M/S MEGHATECH REALTORS PVT. LTD. THE AO SUMMONED MR. K.V. JAIN U/S 131 OF THE ACT AND HIS S TATEMENT WAS RECORDED. SH. K.V. JAIN ADMITTED THAT HE HAD F ACILITATED THE MOU BETWEEN ASSESSEE AND M/S MEGHATECH REALTORS PVT . LTD. AND SH. DEVENDER KUMAR AND M/S NEWAGE INFRABUILDERS (P) LTD. THE AO ASKED HIM TO SERVE THE SUMMON UPON BOTH THESE CO MPANIES BUT MR. K.V. JAIN SHOWED HIS INABILITY TO GET THE S UMMON SERVED ON BOTH THE COMPANIES. 4.1 IN VIEW OF THE REPORTS OF THE INSPECTORS AND ST ATEMENT OF MR. K.V. JAIN, SHRI DEVENDER KUMAR AND ASSESSEE WERE AS KED TO PRODUCE DIRECTORS OF BOTH THE ABOVE COMPANIES. IN RESPONSE TO THE NOTICES, NO COMPLIANCE WAS MADE BY SH. DEVENDER KUMAR AND THE ASSESSEE ON THE GIVEN DATES. THE AO IN VIEW OF THE NON- COMPLIANCE OF THE ASSESSEE ISSUED SHOW-CAUSE NOTICE TO SH. 6 ITA NO. 5871/DEL/2017 DEVENDER KUMAR AND ASSESSEE AS TO WHY THE CASH AMOU NT RECEIVED BY BOTH OF THEM SHOULD NOT BE ADDED TO THE IR INCOME. IN RESPONSE TO THE SHOW CAUSE NOTICE BOTH DEVENDER KUM AR AND ASSESSEE HAVE FURNISHED THE COPY OF MOU WITH RESPEC TIVE COMPANY, COPY OF THE BALANCE SHEET AND PROFIT AND L OSS ACCOUNT AS ON 31.03.2012 OF BOTH THE COMPANIES BUT FAILED TO P RODUCE THE DIRECTORS. ON 03.01.2014, TWO LETTERS HAVE BEEN RE CEIVED BY THE AO FROM ASSESSEE SIGNED BY THE DIRECTORS OF BOTH TH E COMPANIES ADMITTING THEREIN OF GIVING RS. 10 CRORES AND RS. 2 0 CRORES TO ASSESSEE AND SH. DEVENDER KUMAR OUT OF SHAREHOLDER S MONEY. ON 09.01.2013 SAME LETTERS HAVE BEEN AGAIN RECEIVED FROM DIRECTORS OF BOTH THE COMPANIES ADMITTING OF GIVING CASH OF RS. 10 CRORES AND 20 CRORES TO THE ASSESSEE AND DEVENDER K UMAR OUT OF SHAREHOLDERS MONEY FROM THE ADDRESS D-111, SOUTH G ANESH NAGAR, MANDAWALI, NEW DELHI. THE INSPECTOR REPORTE D THAT NO SUCH PERSON WAS FOUND AT THE AFORESAID ADDRESS. 4.2 DURING ASSESSMENT PROCEEDINGS, NOTICES U/S 153A READ WITH SECTION 153C OF THE ACT WERE ISSUED TO BOTH THE COM PANIES, HOWEVER, BOTH THE NOTICES RETURNED BACK TO THE AO W ITH THE 7 ITA NO. 5871/DEL/2017 REMARKS NO SUCH FIRM EXISTS. INSPECTORS OF THE CI RCLE WERE DEPUTED, HOWEVER, THEY HAVE REPORTED THAT NO SUCH E NTITY EXISTED AT THE GIVEN ADDRESS. 5. IN ORDER TO VERIFY THE DETAILS OF THE DIRECTORS OF BOTH THE COMPANIES, NOTICE U/S 133(6) OF THE ACT WAS SENT TO AXIS BANK, NEW DELHI, WHERE BOTH THE COMPANIES HAD THEIR BANK ACCOUNTS FOR FURNISHING OF ACCOUNT OPENING FORM AND ACCOUNT STAT EMENT FOR THE PERIOD FROM 01.04.2009 TO 31.03.2015. THE BANK SUB MITTED THE REQUIRED DETAILS FROM WHICH IT WAS FOUND FROM ACCOU NT OPENING FORM, NAME AND ADDRESS OF THE DIRECTORS OF BOTH THE COMPANIES. SUMMONS U/S 131 OF THE ACT WERE ISSUED TO THE DIREC TORS OF M/S MEGHATECH REALTORS PVT. LTD. FOR PERSONAL APPEARANC E BEFORE THE AO, HOWEVER, THE NOTICES RETURNED BACK WITH THE REM ARKS NO SUCH PERSON EXISTS ON THIS ADDRESS. SIMILAR NOTICES WE RE ISSUED TO THE DIRECTORS OF M/S NEWAGE INFRABUILDERS P. LTD. FOR P ERSONAL APPEARANCE BEFORE AO, HOWEVER, SOME REPORTS HAVE BE EN RECEIVED THAT NO SUCH PERSON EXISTS ON THIS ADDRESS. 5.1 THE AO RAISED QUERY TO THE ASSESSEE REGARDING T HE ADVANCE OF RS. 10 CRORES RECEIVED FROM M/S MEGHATECH REALTORS PVT. LTD. AND 8 ITA NO. 5871/DEL/2017 ADVANCE RECEIVED BY SH. DEVENDER KUMAR FROM M/S NEW AGE INFRABUILDERS P. LTD. AND TO GIVE EXPLANATION REGAR DING THE SAME. THE ASSESSEE WAS GIVEN SHOW-CAUSE NOTICE TO PRODUCE THE DIRECTORS OF M/S MEGHATECH REALTORS PVT. LTD. BEFOR E AO. THE ASSESSEE FILED REPLY ALONG WITH AUDITED ACCOUNT OF THIS COMPANY AND SUBMITTED THAT THIS COMPANY IS A PRIVATE LIMITE D COMPANY AND ALL THE RECORDS ARE AVAILABLE ON PUBLIC DOMAIN AT THE MCA WEBSITE. HE HAS ALSO STATED THAT THIS COMPANY WAS INTRODUCED TO THE ASSESSEE THROUGH SH. K.V. JAIN WHO HAD APPEARED IN PERSON BEFORE ADIT(INV.) AND CONFIRMED THE FACTS. THE COM PANY IS INDEPENDENT ENTITY AND IS LIABLE COMPLETELY FOR THE SOURCE OF RS. 10 CRORES ADVANCE TO THE ASSESSEE. 5.2 IN RESPECT OF SH. DEVENDER KUMAR, ASSESSEE SUBM ITTED THAT HE HAS AN INDEPENDENT PERSON AND NOT RELATED TO THE ASSESSEE. HE HAS ALSO ENTERED INTO AN AGREEMENT FOR PURCHASE OF LAND AT HARCHANDPUR FROM SMT. SAROJ SHARMA AND OTHERS. HOW EVER, LATER SMT. SAROJ SHARMA DENIED ANY SUCH DEAL HAVING BEEN ENTERED WITH THE ASSESSEE AS WELL AS WITH SH. DEVENDER KUMAR AND , AS SUCH, THEY HAVE BEEN JOINTLY FINDING THE CASES AND THAT I S WHY THE 9 ITA NO. 5871/DEL/2017 AGREEMENT BETWEEN HIM AND SMT. SAROJ SHARMA WAS FOU ND IN HIS PREMISES. THE COMPLAINT BY THE ASSESSEE AND SH. DE VENDER KUMAR HAVE BEEN FILED WITH THE ECONOMIC OFFENCE WIN G OF DELHI POLICE FOR WHICH ALL THE DOCUMENTS WERE ALSO SEIZED FROM HIS PREMISES. OTHERWISE IT IS AN INDEPENDENT DEAL AND ASSESSEE IS NOT ANSWERABLE FOR THE SAME, EVEN IF, DOCUMENT WAS FOUN D FROM HIS PREMISES. 5.3 SH. DEVENDER KUMAR WAS SUMMONED U/S 131 OF T HE I.T. ACT FOR HIS PERSONAL APPEARANCE AND HIS STATEMENT W AS RECORDED ON 11.03.2016 WHICH IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH HE HAS STATED MOU WAS SIGNED BY HIM ON THE DI RECTION OF THE ASSESSEE AND THE CASH WAS NEVER HANDED OVER TO HIM. HE HAS ALSO STATED THAT HE IS NOT AWARE OF COMPANY M/S NEW AGE INFRABUILDERS PVT. LTD. IT WAS WRITTEN IN ENGLISH, WHEREAS HE CAN BARELY UNDERSTAND ENGLISH. HE WAS JUST A SIGNING A UTHORITY ONLY ON THE DIRECTION OF THE ASSESSEE IN LIEU OF COMMISS ION INCOME. 5.4 THE AO ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE ON 18.03.2016 MENTIONING ALL THE ABOVE FACTS AND ASKED FOR THE EXPLANATION OF THE ASSESSEE REGARDING BOTH THE MOU AND SHOW- 10 ITA NO. 5871/DEL/2017 CAUSED AS TO WHY THE CASH AMOUNT INVOLVED IN THE TR ANSACTION OF RS. 20 CRORES AND 10 CRORES SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE FILED A REPLY BEFORE TH E AO IN WHICH THE ASSESSEE AGAIN REITERATED THAT MOU OF RS. 20 CR ORES IS BETWEEN SH. DEVENDER KUMAR AND M/S NEWAGE INFRABUILDERS PVT . LTD. WHICH DOES NOT BELONG TO THE ASSESSEE. IT IS INDEP ENDENT DEAL BETWEEN THEM AND SMT. SAROJ SHARMA AND OTHERS. STA TEMENT GIVEN BEFORE AO ON 11.03.2016 IS COMPLETELY CONTRAD ICTORY AS SUBMITTED IN THE STATEMENT BEFORE ADIT AT THE TIME OF APPRAISAL PROCEEDINGS ON OATH IN WHICH HE HAS ALREADY EXPLAIN ED THAT IT IS AN INDEPENDENT TRANSACTION. EVEN IN THE COMPLAINT FILED WITH POLICE DEPARTMENT AND OTHER AUTHORITIES, HE HAS STA TED THAT IT IS AN INDEPENDENT TRANSACTION AND CONFIRMED THE SAME. THEREFORE, THERE IS NO JUSTIFICATION TO MAKE ANY ADDITION OF R S. 20 CRORES IN THE HANDS OF THE ASSESSEE. AS REGARDS MOU BETWEEN ASSESSEE AND M/S MEGHATECH REALTORS PVT. LTD., THE ASSESSEE REIT ERATED THE SUBMISSIONS ALREADY MADE AND ALSO EXPLAINED THAT TH E TRANSACTION IS REFLECTED IN THEIR BALANCE SHEET THE ASSESSEE KN EW FROM THE MARKET THAT THEY HAVE MOVED TO DIFFERENT PLACES AS THEY HAD ALSO RAISED LOAN FROM THE MARKET FOR THE PURPOSE OF THIS DEAL ON WHICH 11 ITA NO. 5871/DEL/2017 THERE IS A POLICE COMPLAINT AND A LOT OF LITIGATION S, THEREFORE, NO ADDITION COULD BE MADE ON 10 CRORES IN HIS HAND. 6. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASS ESSEE AND NOTED THAT ASSESSEE FAILED TO PRODUCE ANY OF THE DI RECTORS OF BOTH THE COMPANIES. THEREFORE, PHYSICAL EXISTENCE HAS N OT BEEN PROVED. IT IS DIFFICULT TO BELIEVE THAT THESE COMPANIES AFT ER GIVING HUGE ADVANCE DID NOT BOTHER TO RECOVER THE AMOUNT IN QUE STION. THESE ARE COMPANIES IN EXISTING ON PAPERS. THE ASSESSEE FAILED TO PROVE GENUINENESS OF THE TRANSACTION IN THE MATTER. THE AO ALSO NOTED THAT DEVENDER KUMAR IN HIS STATEMENT SUBMITTED THAT MOU WAS SIGNED BY HIM AT THE INSTANCE OF THE ASSESSEE IN LI EU OF COMMISSION INCOME. THE ASSESSEE FAILED TO CROSS EX AMINE HIS STATEMENT AND THE DOCUMENTS WERE FOUND FROM PREMISE S OF THE ASSESSEE, THEREFORE, THERE IS A PRESUMPTION THAT AL L THE DOCUMENTS BELONG TO THE ASSESSEE. NO COMPLAINTS HAVE BEEN MA DE AGAINST BOTH THE COMPANIES. THE AO, THEREFORE, HELD THAT T HE ENTIRE CASH AMOUNT RS. 30 CRORES IS UNEXPLAINED CASH AND ADDED TO THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. T HE AO, ACCORDINGLY, MADE AN ADDITION OF RS. 30 CRORES. 12 ITA NO. 5871/DEL/2017 7. ON PERUSAL OF THE SUBMISSIONS FILED BY THE ASSES SEE, AO NOTED THAT DURING THE YEAR UNDER CONSIDERATION, ASS ESSEE HAS RECEIVED AN ADVANCE OF RS. 1,97,93,369/- FROM M/S D REAM GREEN LAND REALTORS P. LTD. IN WHICH THE ASSESSEE HAS 50% SHAREHOLDING AND ALSO RECEIVED AN ADVANCE OF RS. 25 LAKHS FROM M /S ROSEMARY PROPERTIES P. LTD. IN WHICH HE HAS 50% OF THE SHARE HOLDING. THE ASSESSEE WAS ASKED TO FILE COMPLETE DETAILS AND ASK ED TO EXPLAIN WHY THE ADVANCE RECEIVED FROM ABOVE TWO COMPANIES D O NOT ATTRACT THE PROVISIONS OF DEEMED DIVIDEND U/S 2(22)(E) OF T HE ACT AND WHY THE SAME SHOULD NOT BE TREATED AS HIS INCOME BEING A MAJOR SHAREHOLDER IN M/S BROWNIE ESTATES PVT. LTD. THE A SSESSEE EXPLAINED THAT THE SAID ADVANCES WERE RECEIVED FOR PURCHASE OF LAND FOR THE COMPANY AND SECTION 2(22)(E) OF THE AC T DOES NOT INCLUDE ANY ADVANCE OR LOAN MADE IN THE ORDINARY CO URSE OF BUSINESS. HOWEVER, THE ASSESSEE DID NOT SUBMIT ANY AUDITED BOOKS OF ACCOUNT OF THE ABOVE MENTIONED COMPANIES B EFORE AO IN ORDER TO VERIFY THE ACCUMULATED PROFIT OF THE SAID COMPANIES. THE AO, THEREFORE, DIRECTED THAT AS TO WHY THE ABOVE AM OUNT RECEIVED SHOULD NOT BE TREATED AS DEEMED DIVIDEND IN THE HAN DS OF THE ASSESSEE BECAUSE ASSESSEE WAS BENEFICIAL OWNER OF T HE SHARES OF 13 ITA NO. 5871/DEL/2017 THE ABOVE COMPANIES FOR THE ASSESSMENT YEAR IN QUES TION. THE AO NOTED THAT ASSESSEE HAS NOT FILED ANY EVIDENCE IN S UPPORT OF THE ABOVE CLAIM FOR TAKING ADVANCE FOR BUSINESS PURPOSE S. THEREFORE, IT WAS CONSIDERED AS DEEMED DIVIDEND. THE ASSESSEE ALSO DID NOT PRODUCE AUDITED BOOKS OF ACCOUNTS OF THE ABOVE MENT IONED COMPANIES IN ORDER TO VERIFY THE ACCUMULATED PROFIT S, THE ENTIRE QUANTUM OF ADVANCES RECEIVED BY THE ASSESSEE DURING THE YEAR FROM THE ABOVE MENTIONED COMPANIES WERE THEREFORE, ADDED TO THE INCOME OF THE ASSESSEE. THE AO ACCORDINGLY MADE AN ADDITION OF RS. 2,22,93,639/-. 8. BOTH THE ABOVE ADDITIONS WERE CHALLENGED BEFORE LD. CIT(A). THE WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCE D IN THE APPELLATE ORDER IN WHICH THE ASSESSEE REITERATED TH E SAME SUBMISSIONS AS MADE BEFORE THE AO. IT WAS SUBMITTE D THAT SH. DEVENDER KUMAR ALWAYS MAINTAINED THAT HE HAD ENTERE D INTO AN AGREEMENT WITH SMT. SAROJ SHARMA AND OTHERS TO SELL THE HARCHANDPUR LAND TO THEM. SH. DEVENDER KUMAR ALSO FILED A LETTER BEFORE TEHSILDAR, SOHNA, TO STOP EXECUTING THE REGI STRY OF THE LAND OCCUPIED BY SMT. SAROJ SHARMA ETC. THE ASSESSEE AL SO FILED 14 ITA NO. 5871/DEL/2017 APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES O N WHICH REMAND REPORT FROM THE AO WAS CALLED FOR. THE AO IN THE R EMAND REPORT REITERATED THE FACTS STATED IN THE ASSESSMENT ORDER . THE ASSESSEE FILED THE REJOINDER TO THE REMAND REPORT IN WHICH I T WAS SUBMITTED THAT AFFIDAVIT OF SH. K.V. JAIN HAS BEEN FILED AND THAT REPORT OF THE INSPECTORS WERE NOT CONFRONTED TO THE ASSESSEE AND NO RIGHT HAS BEEN GIVEN TO REBUT THE SAME. THE LD. CIT(A) NOTE D THAT THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY AND CREDI TWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. ONLY AFFIDAVIT OF THE MEDIATOR WAS FILED WHICH DO NOT SA TISFY THREE LIMBS OF SECTION 68 OF THE ACT. SH. DEVENDER KUMAR HAD D ENIED HAVING RECEIVED ANY CASH FROM M/S NEWAGE INFRABUILDERS PVT . LTD. AND STATED ON BOTH THAT HE HAD SIGNED THE MOU AT THE BE HEST OF THE ASSESSEE. THEREFORE, AFFIDAVIT OF THE MEDIATOR IS HAVING NO CREDIBILITY. LD. CIT(A) ALSO NOTED THAT NO ACTION HAS BEEN TAKEN AGAINST SMT. SAROJ SHARMA ETC. THE AO HAS REPORTED THAT NO SUCH INVESTMENT WAS SHOWN IN THE BALANCE SHEET OF THE AB OVE SAID TWO COMPANIES AVAILABLE WITH MCA AND NO FUNDS WERE AVAI LABLE WITH THE AFORESAID COMPANIES TO MAKE SUCH HUGE INVESTMEN TS. LD. CIT(A), ACCORDINGLY, CONFIRMED THE ADDITION OF RS. 30 CRORES. AS 15 ITA NO. 5871/DEL/2017 REGARDS ADDITION MADE ON ACCOUNT OF DEEMED DIVIDEND , THE SUBMISSION OF ASSESSEE WAS RECORDED FOR AY 2009-10 IN WHICH IT WAS ALSO CONTENDED THAT ADDITION U/S 2(22)(E) OF TH E ACT IS JUSTIFIED TO THE EXTENT OF ACCUMULATED PROFITS OF LENDER COMP ANIES. OTHER FACTS WERE REITERATED AS WERE SUBMITTED BEFORE AO. THE LD. CIT(A) FOLLOWED HIS ORDER DATED 31.03.2017 FOR AY 2013-14 AND 2014-15 AND DIRECTED THE AO TO MAKE ADDITION U/S 2(22)(E) O F THE ACT TO THE EXTENT OF ACCUMULATED PROFITS. THE APPEAL WAS, THE REFORE, PARTLY ALLOWED. 9. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1 & 3 OF THE APPEAL, THE SAME ARE DISMISSED AS NOT PRESSED. 10. ON THE REMAINING GROUNDS, THE ASSESSEE CHALLENG ED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 30 CRORES U/S 68 OF THE I.T. ACT AND ADDITION OF RS. 2,22,93,369/- M ADE U/S 2(22)(E) OF THE ACT. 11. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE AUTHORITIES BELOW AND REFERRED TO VARIO US NOTICES ISSUED BY THE AO AND REPLY FILED BY THE ASSESSEE AN D DOCUMENTS 16 ITA NO. 5871/DEL/2017 ON RECORD ALONG WITH STATEMENT OF THE ASSESSEE, SH. K.V. JAIN AND SH. DEVENDER KUMAR RECORDED TIME TO TIME. HE HAS A LSO SUBMITTED THAT PB 166, THE LETTER OF THE ASSESSEE D ATED 12.10.2016 ALONG WITH AFFIDAVIT OF SH. DEVENDER KUMAR RETRACTI NG FROM THE STATEMENT MADE BEFORE AO. PB 180 IS AFFIDAVIT OF S H. K.V. JAIN AND PB 184 IS COMPLAINT MADE TO COMMISSIONER OF POL ICE, GURGAON. PB 349 IS CIVIL SUIT FILED BY SH. DEVENDE R KUMAR AGAINST SMT. SAROJ SHARMA AND OTHERS. PB 294 IS AS SESSMENT ORDER OF SH. DEVENDER KUMAR U/S 153A READ WITH SECT ION 153C OF THE ACT. HE HAS SUBMITTED THAT PRESUMPTION U/S 292 C OF THE ACT IS THAT THE DOCUMENT IS CORRECT. THE DOCUMENT RELA TING TO ADDITION OF RS. 20 CRORES IS NOT IN THE NAME OF THE ASSESSEE . PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED AGAINST SH. DEVE NDER KUMAR AND OTHER COMPANY AND THE DOCUMENT BELONGS TO THEM. THERE IS NO OTHER MATERIAL ON RECORD TO PROVE THAT ASSESSEE RECEIVED RS. 20 CRORES. THERE IS NO EVIDENCE THAT CASH OF RS. 20 C RORES IS PAID BY THE ASSESSEE. STATEMENT RECORDED BY THE AO IS NOT RELEVANT FOR MAKING ADDITION. THE AFFIDAVIT OF SH. DEVENDER KU MAR HAS NOT BEEN REBUTTED BY AO. THEREFORE, ONUS UPON AO HAS N OT BEEN DISCHARGED. AS REGARDS ADDITION OF RS. 10 CRORES, HE HAS 17 ITA NO. 5871/DEL/2017 SUBMITTED THAT THE M/S MEGHATECH REALTORS PVT. LTD. PAID RS. 10 CRORES AND NO EFFORTS HAVE BEEN MADE BY THE AO TO V ERIFY PAYMENT TO SMT. SAROJ SHARMA. NO SUMMON HAS BEEN ISSUED TO SMT. SAROJ SHARMA. NO ENQUIRIES HAVE BEEN MADE FROM WITNESSES TO ALL THE AGREEMENTS OR MOU. NO REPORT OF INSPECTOR HAS BEEN CONFRONTED TO THE ASSESSEE. THEREFORE, NO ADDITION CAN BE MAD E. LD. COUNSEL FOR THE ASSESSEE AS REGARDS ADDITION MADE U/S 2(22) (E) OF THE ACT REITERATED THE FACTS STATED BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ACCUMULATED PROFIT AS PER REMAND REPORT AS ON 31.03.2012 WERE AS UNDER: 1. DREAM GREEN LAND REALTOR LTD. WAS RS. 4,26,330/- AN D 2. ROSEMARY PROPERTIES P. LTD. RS. 2,41,280/-. HE HAS SUBMITTED THAT THE ORDER OF THE LD. CIT(A) N EED TO BE MODIFIED AS ACCUMULATED PROFIT TAXED AS DEEMED DIVI DEND IN EARLIER YEAR NEED TO BE EXCLUDED I.E. IN THE CASE O F M/S DREAM GREEN LAND REALTOR LTD. IN A.Y. 2008-09 WAS RS. 2,8 71/- AND IN CASE OF M/S ROSEMARY PROPERTIES P. LTD. IN AY 2009- 10 WAS RS. 86,111/-. LD. COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT ADVANCE WAS RECEIVED FOR PURCHASE OF LAND WHICH WIL L NOT FALL 18 ITA NO. 5871/DEL/2017 WITHIN THE DEFINITION OF DEEMED DIVIDEND AND RELIED UPON BOARD CIRCULAR NO. 19/2017 DATED 12.06.2017, JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR 318 ITR 462, CIT VS. CREATIVE DYING AND PRINTING P. LTD. 318 ITR 476. L D. COUNSEL FOR THE ASSESSEE THEREFORE, SUBMITTED THAT APPEAL OF TH E ASSESSEE MAY BE ALLOWED. 12. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE DOCUMENTS IN QUESTION WERE SEIZED FROM THE POSSESSION OF THE ASSESSEE. T HEREFORE, SECTION 292C/132(4) APPLY. SUMMONS ISSUED TO BOTH THE COMPANIES WERE RETURNED UN-SERVED. THE INSPECTOR A LSO COULD NOT SERVE THE SUMMONS UPON BOTH THE COMPANIES BECAUSE S OME WERE NOT AVAILABLE AT THE GIVEN ADDRESS. SH. K.V. JAIN WHO FACILITATED THE ABOVE MOUS EXPRESSED HIS INABILITY TO GET THE SUMMONS SERVED ON BOTH THE COMPANIES. THE ASSESSEE DID NOT PRODUCE DIRECTORS OF BOTH THE COMPANIES. THE NOTICES U/S 1 53A READ WITH SECTION 153C WERE ISSUED TO BOTH THE COMPANIES WHIC H RETURNED UN-SERVED. SH. DEVENDER KUMAR MADE A STATEMENT AGA INST THE ASSESSEE THAT HE SIGNED THE MOU ON THE DIRECTION OF THE ASSESSEE. 19 ITA NO. 5871/DEL/2017 LD. DR, THEREFORE, SUBMITTED THAT ASSESSEE FAILED T O PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. LD. DR RELIED UPON SEVERAL DECISIONS IN SUPPORT OF HIS CONTENTION INCLUDING JU DGMENT OF BOMBAY HIGH COURT IN THE CASE OF KONARK STRUCTURAL ENGINEERING P. LTD. VS. DCIT 90 TAXMANN.COM 56, JUDGMENT OF CAL CUTTA HIGH COURT IN THE CASE OF DRB EXPORTS P. LTD. VS. CIT 93 TAXMANN.COM 490, JUDGMENT OF ALLAHABAD HIGH COURT IN THE CASE O F PREM CASTING P. LTD. VS. CIT 88 TAXMANN.COM 189, JUDGMEN T OF DELHI HIGH COURT IN THE CASES OF CIT VS. MAF ACADEMY P. L TD. 361 ITR 258, CIT VS. NAVODHYA CASTLE P. LTD. 367 ITR 306 AN D CIT VS. N.R. PORTFOLIO P. LTD. 263 CTR 456. LD. DR ALSO SUBMITT ED THAT STATEMENT RECORDED U/S 132(4) COULD BE THE BASIS FO R MAKING ADDITION AGAINST THE ASSESSEE AND RELIED UPON THE D ECISION OF THE DELHI HIGH COURT IN THE CASE OF BHAGIRATH AGGARWAL VS. CIT 351 ITR 143, CIT VS. M.S. AGGARWAL 93 TAXMANN.COM 247 A ND PCIT VS. AVINASH KUMAR SETIA, 81 TAXMANN.COM 476. LD. DR, T HEREFORE, SUBMITTED THAT ADDITION OF RS. 30 CRORES WAS CORREC TLY MADE IN THE HANDS OF THE ASSESSEE AND AS REGARDS ADDITION ON AC COUNT OF DEEMED DIVIDEND, LD. DR RELIED UPON THE ORDER OF TH E CIT(A). 20 ITA NO. 5871/DEL/2017 13. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PER USED THE MATERIAL AVAILABLE ON RECORD. 14. IN THE INSTANT CASE THE AUTHORITIES BELOW HAVE MADE AND CONFIRMED THE ADDITION OF RS. 20 CRORES IN THE HAND S OF THE ASSESSEE ON THE BASIS OF RECOVERY OF MOU DATED 14.1 2.2011 FROM THE POSSESSION OF THE ASSESSEE, COPY OF THE SAME IS FILED AT PAGE 101 OF THE PB. ACCORDING TO SECTION 292C AND 132(4 A) OF THE I.T. ACT, WHEN SUCH DOCUMENT WAS FOUND IN POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH, IT MAY BE PRESU MED THAT SUCH DOCUMENT BELONG TO SUCH PERSON AND THAT CONTENTS OF SUCH DOCUMENT ARE TRUE AND CORRECT. HOWEVER, SUCH PRESU MPTION IS REBUTTABLE AND IS NOT CONCLUSIVE IN NATURE. THE MO U IN QUESTION IS EXECUTED IN BETWEEN SH. DEVENDER KUMAR S/O SH. B ADLE RAM AND M/S NEWAGE INFRABUILDER P. LTD., NEW DELHI. AC CORDING TO THE MOU SH. DEVENDER KUMAR IS RESPONSIBLE TO ACQUIRE TH E LAND AT VILLAGE HARCHANDPUR, DISTRICT GURGAON AND TO HAND-O VER THE SAME TO M/S NEWAGE INFRABUILDER P. LTD. WHO HAS AGREED T O PURCHASE 400 ACRES OF THE LAND FROM SMT. SAROJ SHARMA AND OT HERS. THUS, SH. DEVENDER KUMAR WAS RESPONSIBLE TO ACQUIRE THE L AND IN 21 ITA NO. 5871/DEL/2017 QUESTION FROM SMT. SAROJ SHARMA AND OTHERS AND THEN TRANSFER IT TO M/S NEWAGE INFRABUILDER P. LTD. ACCORDING TO TH E MOU M/S NEWAGE INFRA BUILDER P. LTD. HAS PAID RS. 20 CRORES IN CASH TO SH. DEVENDER KUMAR IN CONSIDERATION OF THE AFORESAID MO U. THE ULTIMATE SALE DEED SHALL HAVE TO BE REGISTERED IN T HE OFFICE OF SUB- REGISTRAR, GURGAON. THE MOU IS ATTESTED BY NOTARY PUBLIC AND ALSO ATTESTED BY THE WITNESSES. PB 96 IS AGREEMENT TO SELL BETWEEN SMT. SAROJ SHARMA & OTHERS AND SH. DEVENDER KUMAR D ATED 17.12.2011, WHEREBY SH. DEVENDER KUMAR HAS PAID RS. 10 CRORES TO SMT. SAROJ SHARMA ETC. FOR PURCHASE OF LAND AT H ARCHANDPUR, GURGAON. SMT. SAROJ SHARMA AND OTHERS HAVE ACKNOWL EDGED RECEIPT OF RS. 10 CRORES FROM SH. DEVENDER KUMAR. SMT. SAROJ SHARMA AND OTHERS HAVE ALSO EXECUTED RECEIPT OF RS. 10 CRORES IN FAVOUR OF THE PURCHASER SH. DEVENDER KUMAR VIDE SEP ARATE RECEIPT DATED 17.12.2011, COPY OF WHICH IS FILED AT PAGE 10 0 OF THE PB. THE ASSESSEE IS NOT PARTY TO THE AFORESAID MOU, AGR EEMENT TO SELL OR THE RECEIPT. EVEN ASSESSEE IS NOT WITNESS TO TH E MOU, AGREEMENT TO SELL OR THE RECEIPT. ASSESSEE THUS, H AS NOT EVEN REMOTELY CONNECTED WITH THE SEIZED DOCUMENT FOUND F ROM POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEA RCH. PB 146 IS 22 ITA NO. 5871/DEL/2017 STATEMENT OF SH. DEVENDER KUMAR RECORDED ON 18.10.2 013 BY ADIT (INV.). IN THIS STATEMENT THE INVESTIGATION W ING HAS CONFRONTED SH. DEVENDER KUMAR OF THE AFORESAID DOCU MENT SEIZED DURING THE COURSE OF SEARCH FROM POSSESSION OF ASSE SSEE WHICH INCLUDES AGREEMENTS TO SELL EXECUTED WITH SMT. SARO J SHARMA AND OTHERS AND EXPLANATION OF SH. DEVENDER KUMAR WAS CA LLED UPON. SH. DEVENDER KUMAR ON SUCH QUESTION HAS EXPLAINED T HAT HE HAS PURCHASED LAND AT HARCHANDPUR FROM SMT. SAROJ SHARM A AND OTHERS FOR A SUM OF RS. 15,50,000/- PER ACRE IN WHI CH HE WAS A COMMISSION AGENT ON BEHALF OF M/S NEWAGE INFRABUILD ERS P. LTD. HE HAS STATED IN HIS STATEMENT THAT HE HAS PAID RS. 10 CRORES IN CASH TO SMT. SAROJ SHARMA AND OTHERS. THEREFORE, S H. DEVENDER KUMAR IN HIS INITIAL STATEMENT BEFORE ADIT(INV.) HA S CONFIRMED EXECUTION OF AGREEMENT TO SELL WITH SMT. SAROJ SHAR MA AND OTHERS AND EXECUTION OF THE RECEIPTS COPIES OF THE SAME AR E FILED IN THE PB AT PAGES 96 -100 ABOVE (SUPRA). IN HIS STATEMENT S H. DEVENDER KUMAR HAS FURTHER STATED THAT HE HAS ALSO EXECUTED ONE MORE AGREEMENT TO SELL WITH SMT. SAROJ SHARMA AND OTHERS AND PAID RS. 10 CRORES IN CASH AND AGREED TO SUPPLY COPY OF THE SAME AGREEMENT TO SELL TO THE INVESTIGATION WING. HE HA S FURTHER 23 ITA NO. 5871/DEL/2017 AFFIRMED IN HIS STATEMENT THAT THIS AGREEMENT TO SE LL WAS ALSO EXECUTED ON BEHALF OF M/S NEWAGE INFRABUILDERS P. L TD. THE INVESTIGATION WING FURTHER ASKED FOR THE EXPLANATIO N OF SH. DEVENDER KUMAR WITH REGARD TO THE DOCUMENTS RECOVER ED FROM THE POSSESSION OF THE ASSESSEE ON 17.09.2013 WHICH IS T HE MOU DATED 14.12.2011 (PB 101). SH. DEVENDER KUMAR IN ANSWER TO THIS QUESTION HAS AFFIRMED THAT HE HAS EXECUTED THE SAID MOU ON BEHALF OF M/S NEWAGE INFRABUILDERS P. LTD. FOR PURC HASE OF LAND AT HARCHANDPUR BY ACQUIRING THE SAID LAND FROM SMT. SA ROJ SHARMA AND OTHERS. HE HAS FURTHER AFFIRMED THAT M/S NEWAG E INFRABUILDERS P. LTD. HAS PAID RS. 20 CRORES TO HIM IN CASH FOR PURCHASE OF LAND AT HARCHANDPUR, GURGAON FROM SMT. SAROJ SHARMA AND OTHERS. IN FURTHER STATEMENT SH. DEVEND ER KUMAR EXPLAINED THAT HE WOULD GET COMMISSION OF RS. 50,00 0/- PER ACRE FROM M/S NEWAGE INFRABUILDER P. LTD. THUS, IN HIS INITIAL STATEMENT ALSO SH. DEVENDER KUMAR AFFIRMED THAT HE HAS EXECUTED MOU IN QUESTION WITH M/S NEWAGE INFRABUILDER (P) LT D. FOR ACQUIRING THE LAND FROM SMT. SAROJ SHARMA AND OTHER S AND RECEIVED RS. 20 CRORES FROM M/S NEWAGE INFRABUILDER P. LTD. HE HAS ALSO AFFIRMED THAT HE HAS PAID RS. 20 CRORES TO SMT. SAROJ 24 ITA NO. 5871/DEL/2017 SHARMA AND OTHERS VIDE TWO AGREEMENTS TO SELL, ONE OF THEM WAS RECOVERED DURING THE COURSE OF SEARCH AND HE AGREED TO SUPPLY COPY OF ONE MORE AGREEMENT TO SELL TO THE INVESTIGA TION WING. COMMISSION WAS TO BE PAID @ RS. 50,000/- PER ACRE. HE HAS FURTHER STATED IN HIS STATEMENT THAT THE AFORESAID LAND COULD NOT BE TRANSFERRED TO M/S NEWAGE INFRABUILDERS P. LTD. BECAUSE SMT. SAROJ SHARMA AND OTHERS SOLD THE LAND TO SOME OTHER PERSON AND HE HAS FILED A CASE IN THE COURT IN WHICH STAY HAS BEEN GRANTED IN HIS FAVOUR. HE HAS FURTHER STATED IN HIS STATEMENT THAT ASSESSEE HAS ALSO ENTERED INTO AN AGREEMENT TO SELL FOR SOME OTHER PORTION OF THE PROPERTY WITH SMT. SAROJ SHARMA AND OTHERS A ND ASSESSEE WAS ALSO CHEATED BY THEM, THEREFORE, HE ALONG WITH ASSESSEE HAVE FILED A CASE IN THE COURT AGAINST SMT. SAROJ SHARMA AND OTHERS AND DUE TO THIS REASON ONLY THE AFORESAID DOCUMENTS WER E FOUND DURING THE COURSE OF SEARCH FROM THE OFFICE PREMISE S OF THE ASSESSEE. IN HIS STATEMENT SH. DEVENDER KUMAR DID NOT MAKE ANY ALLEGATION, IF MONEY WAS PAID BY THE ASSESSEE ON HI S BEHALF. PB 110 IS A LETTER DATED 06.04.2012 FILED BY SH. DEVEN DER KUMAR TO SUB-REGISTRAR, SOHNA IN WHICH HE HAS EXPLAINED THAT HE HAS ENTERED INTO AN AGREEMENT TO SELL WITH SMT. SAROJ S HARMA AND 25 ITA NO. 5871/DEL/2017 OTHERS FOR PURCHASE OF LAND AT HARCHANDPUR, GURGAON AND SHE HAS EXECUTED A SALE DEED OF SOME PORTION IN FAVOUR OF O THERS. SH. DEVENDER KUMAR, THEREFORE, REQUESTED SUB-REGISTRAR NOT TO REGISTER ANY SALE DEED IN FUTURE. PB 116 IS COMPLA INT MADE BY SH. DEVENDER KUMAR AGAINST SMT. SAROJ SHARMA AND OTHERS DATED 04.06.2012 TO THE DEPUTY COMMISSIONER OF POLICE, NE W DELHI FOR CHEATING AND CRIMINAL BREACH OF TRUST WHICH IS SUPP ORTED BY THE AGREEMENT TO SELL AND RECEIPT. PB 187 IS ALSO COMP LAINT LODGE BY SH. DEVENDER KUMAR TO THE COMMISSIONER OF POLICE, G URGAON AGAINST SMT. SAROJ SHARMA AND OTHERS FOR CHEATING. PB 370 IS A COPY OF THE PLAINT FILED BY SH. DEVENDER KUMAR AGAI NST SMT. SAROJ SHARMA AND OTHERS I.E. SUIT FOR SPECIFIC PERFORMANC E OF CONTRACT IN THE COURT OF CIVIL JUDGE, GURGAON. ALL THESE MATER IAL EVIDENCES CLEARLY ESTABLISHED THAT MOU IN QUESTION IS BETWEEN SH. DEVENDER KUMAR AND M/S NEWAGE INFRABUILDER P. LTD. AND FURTH ER AGREEMENT TO SELL WERE EXECUTED BETWEEN SH. DEVENDE R KUMAR AND SMT. SAROJ SHARMA AND OTHERS. ASSESSEE IS NOT PART Y TO ANY OF THE MOU OR AGREEMENT TO SELL AND THAT ON OFFENCE OF CHE ATING/BREACH OF TRUST COMMITTED BY SMT. SAROJ SHARMA, SH. DEVEND ER KUMAR FILED A POLICE COMPLAINT AGAINST HER AS WELL AS FIL ED SUIT FOR SPECIFIC 26 ITA NO. 5871/DEL/2017 PERFORMANCE BEFORE THE COURT. THUS, THE REVENUE DE PARTMENT HAS FAILED TO ATTRIBUTE ANY SALE CONSIDERATION OF RS. 2 0 CRORES TO THE ASSESSEE. PB 294 IS ASSESSMENT ORDER IN THE CASE O F SH. DEVENDER KUMAR DATED 28.12.2016 U/S 153A READ WITH SECTION 1 53C/143(3) OF THE I.T. ACT FOR AY 2012-13 IN WHICH THE AO ON T HE SAME SET OF FACTS MADE ADDITION OF RS. 20 CRORES IN THE HANDS O F SH. DEVENDER KUMAR ON PROTECTIVE BASIS. THUS, IT ESTABLISHED TH AT AO HAS ALSO RECORDED SATISFACTION U/S 153C AGAINST SH. DEVENDER KUMAR THAT HE WAS CONNECTED WITH AMOUNT OF RS. 20 CRORES IN QU ESTION. THE AO IGNORED ALL THESE ABOVE MATERIAL EVIDENCES ON RE CORD AND MERELY RELIED UPON THE LATER STATEMENT OF SH. DEVEN DER KUMAR RECORDED ON 11.03.2016 AT THE ASSESSMENT STAGE IN W HICH SH. DEVENDER KUMAR HAS STATED THAT HE HAS SIGNED THE AG REEMENT IN QUESTION AT THE INSTANCE OF THE ASSESSEE. HOWEVER, HE HAS ADMITTED THAT HE HAS PURCHASED LAND FROM SMT. SAROJ SHARMA AND OTHERS ON THE BASIS OF THE AGREEMENT TO SELL. IN T HIS STATEMENT ALSO HE HAS STATED THAT POLICE COMPLAINT WAS PREPARED AT THE INSTANCE OF ASSESSEE. FROM THIS STATEMENT, IT APPEARS THAT THE AO DELIBERATELY RECORDED THIS STATEMENT WITHOUT ANY JU STIFICATION AGAINST THE STATEMENT RECORDED BY THE INVESTIGATION WING 27 ITA NO. 5871/DEL/2017 IMMEDIATELY AFTER SEARCH ON 18.10.2013. SH. DEVEND ER KUMAR TRIED TO CONTRADICT THE CONTENTS OF MOU AND THE AGR EEMENT TO SELL WITHOUT ANY JUSTIFICATION. THE AO HAS NOT EXPLAINE D AS TO WHAT WAS NECESSITY TO RECORD STATEMENT OF SH. DEVENDER K UMAR SUBSEQUENTLY, AT THE FAG END OF THE ASSESSMENT PROC EEDINGS. THE STATEMENT WOULD ALSO SHOW THAT AO PUT THE WORDS IN THE MOUTH OF SH. DEVENDER KUMAR SO AS TO HE MAY CONTRADICT HIS E ARLIER STATEMENT RECORDED BY THE INVESTIGATION WING. NO Q UESTION WAS PUT TO HIM AS TO WHY THE DOCUMENTS WERE PREPARED IN HIS NAME, IF HE WAS NOT PARTY TO BE AGREEMENT TO SELL OR MOU. T HE ENTIRE MATERIAL ON RECORD CLEARLY SUPPORT THE STATEMENT OF SH. DEVENDER KUMAR RECORDED BY THE INVESTIGATION WING ON 18.10.2 013. THE STATEMENT OF SH. DEVENDER KUMAR RECORDED BY AO ON 1 1.03.2016 IS NOT CORROBORATED BY ANY EVIDENCE OR MATERIAL ON RECORD. THUS, THERE WAS NO JUSTIFICATION FOR THE AO OR CIT(A) TO RELY UPON SUBSEQUENT STATEMENT OF SH. DEVENDER KUMAR DATED 11 .03.2016. IT MAY ALSO BE NOTED HERE THAT THE ASSESSEE FILED L ETTER DATED 12.10.2016 BEFORE LD. CIT(A) SUPPORTED BY AFFIDAVIT OF SH. DEVENDER KUMAR (PB 166-176) IN WHICH HE HAS AFFIRME D HIS STATEMENT MADE TO THE INVESTIGATION WING ON 18.10.2 013. IT IS ALSO 28 ITA NO. 5871/DEL/2017 STATED IN THE AFFIDAVIT THAT SUBSEQUENTLY NOTICE U/ S 153C DATED 08.02.2016 WAS ISSUED TO HIM BY MS. PREETI SINGH, A CIT, CENTRAL CIRCLE-26, NEW DELHI AND SHE TOLD HIM THAT HUGE LIA BILITY TO THE EXTENT OF RS. 20 CRORES WOULD FALL ON HIM, IF HE ST RICT TO HIS ORIGINAL STATEMENT MADE BEFORE INVESTIGATION WING ON 18.10.2 013. HE HAS, THEREFORE, DISOWNED HIS STATEMENT RECORDED BEFORE A O ON 11.03.2016. IN THIS AFFIDAVIT ALSO HE HAS CONFIRME D ALL THE TRANSACTIONS RECORDED IN HIS NAME ON BEHALF OF M/S NEWAGE INFRABUILDERS P. LTD. THE LD. CIT(A) WITHOUT ANY J USTIFICATION IGNORED THE AFFIDAVIT OF SH. DEVENDER KUMAR. THOUG H IN THIS CASE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO , COPY OF WHICH IS FILED AT PAGE 256 OF THE PB DATED 04.05.2017 BUT THE AO HAS NOT REBUTTED THE EXPLANATION OF THE ASSESSEE ABOVE. TH EREFORE, CONTENTS OF THE AFFIDAVIT SHALL HAVE TO BE READ IN THE EVIDENCE IN FAVOUR OF THE ASSESSE. IT APPEARS THAT THE AUTHORI TIES BELOW MERELY ON THE BASIS OF SUBSEQUENT STATEMENT OF SH. DEVENDE R KUMAR AND THAT THE DIRECTORS OF M/S NEWAGE INFRABUILDERS P. L TD. HAVE NOT BEEN PRODUCED FOR EXAMINATION BEFORE AO CONFIRMED T HE ADDITION AGAINST THE ASSESSEE. IT IS ADMITTED FACT THAT DUR ING THE COURSE OF SEARCH NO CASH WAS FOUND OR SEIZED. THERE IS NO RE COVERY OF ANY 29 ITA NO. 5871/DEL/2017 INCRIMINATING MATERIAL AGAINST THE ASSESSEE TO CONN ECT HIM WITH THE ADDITION OF RS. 20 CRORES. EVEN IF THE DIRECTO RS OF M/S NEWAGE INFRABUILDERS P. LTD. WERE NOT PRODUCED FOR EXAMINA TION BEFORE AO, THE ENTIRE MATERIAL ON RECORD CLEARLY JUSTIFY EXPLA NATION OF THE ASSESSEE THAT ASSESSEE HAD NOT DEALT WITH AMOUNT OF RS. 20 CRORES. THE CONTENTS OF THE DOCUMENT SPEAK AGAINST THE REVE NUE- DEPARTMENT. THE PRESUMPTION AGAINST THE ASSESSEE T HAT THE DOCUMENT BELONG TO HIM HAVE BEEN REBUTTED BY THE AB OVE MATERIAL ON RECORD INCLUDING THE SEIZED MATERIAL FOUND DURIN G THE COURSE OF SEARCH WHICH IS CORROBORATED BY STATEMENT OF SH. DE VENDER KUMAR RECORDED ON 18.10.2013 IN ADIT(INV.). SH. DEVENDER KUMAR HAS TAKEN ACTION AGAINST SMT. SAROJ SHARMA ETC., THEREF ORE, THERE WAS NO JUSTIFICATION TO MAKE ADDITION OF RS. 20 CRORES AGAINST THE ASSESSEE. WHATEVER REASONS HAVE BEEN GIVEN BY THE AUTHORITIES BELOW FOR MAKING ADDITION AGAINST THE ASSESSEE ARE IRRELEVANT ON THE FACE OF THE EVIDENCES BROUGHT ON RECORD. THERE FORE, THE DECISIONS RELIED UPON BY THE LD. DR WOULD NOT SUPPO RT CASE OF THE REVENUE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE O F THE VIEW THAT ADDITION OF RS. 20 CRORES AGAINST THE ASSESSEE IS W HOLLY 30 ITA NO. 5871/DEL/2017 UNJUSTIFIED. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 20 CRORES. 15. THE AO MADE FURTHER ADDITION OF RS. 10 CRORES I N THE HANDS OF THE ASSESSEE ON THE BASIS OF MOU DATED 14.12.201 1 (PB 105) WHICH IS RECOVERED DURING THE COURSE OF SEARCH. TH IS MOU IS EXECUTED BETWEEN ASSESSEE AND M/S MEGHATECH REALTOR S PVT. LTD. ACCORDING TO THIS MOU ASSESSEE WAS RESPONSIBLE TO A CQUIRE THE LAND AT VILLAGE HARCHANDPUR, GURGAON FROM SMT. SARO J SHARMA AND OTHERS AND SHALL TRANSFER THE SAME TO M/S MEGHA TECH REALTORS PVT. LTD. IN CONSIDERATION TO THIS MOU. M/S MEGHAT ECH REALTORS P. LTD. PAID RS. 10 CRORES TO THE ASSESSEE. THIS MOU IS ATTESTED BY NOTARY PUBLIC AND ALSO ATTESTED BY THE WITNESS. AS PER THE AGREEMENT ASSESSEE HAS PAID THE SAME AMOUNT OF RS. 10 CRORES TO SMT. SAROJ SHARMA ON BEHALF OF M/S MEGHATECH REALTO RS P. LTD. BOTH MOU AND AGREEMENT ARE FILED AT PB 105 AND PB 3 38. SINCE PRESUMPTION IS REBUTTABLE, THEREFORE, THE CASE IS T O BE EXAMINED ON THE BASIS OF MATERIAL ON RECORD. THE ASSESSEE I N HIS INITIAL STATEMENT RECORDED BY INVESTIGATION WING DATED 17.0 9.2013 (PB 276) HAS EXPLAINED THAT HE HAS RECEIVED RS. 10 CROR ES FROM M/S 31 ITA NO. 5871/DEL/2017 MEGHATECH REALTORS P. LTD. FOR PURCHASE OF THE LAND THROUGH SH. J.K. JAIN. THE ASSESSEE SIMILARLY FILED COMPLAINT TO THE POLICE AGAINST SMT. SAROJ SHARMA AND OTHERS AND ALSO FILED LETTER TO THE SUB-REGISTRAR, SOHNA, GURGAON SO THAT NO FURTHER SA LE DEED IS EXECUTED IN FAVOUR OF OTHERS. PB143 IS STATEMENT OF SH. KULBHUSHAN JAIN RECORDED BY INVESTIGATION WING ON 1 8.10.2013 IN WHICH HE HAS CONFIRMED THAT HE HAS ARRANGED THE DEA L OF THE ASSESSEE WITH M/S MEGHATECH REALTORS P. LTD. THE H ONBLE SUPREME COURT IN THE CASE OF DCIT VS. T. JAI CHANDA RAN IN CIVIL APPEAL NO. 4341/2018 ARISING OUT OF SLP NO. 22112/2 013 DATED 24.04.2018 CONSIDERED THE ISSUE, WHETHER ADDITIONAL INTEREST PAYABLE TO PSU CANNOT BE ASSESSED AS INCOME OF RESP ONDENT? IT WAS HELD THAT IN THE GIVEN FACTS THE RESPONDENT HAD ACTED ONLY AS BROKER AND, AS SUCH, THE AMOUNT IN QUESTION COULD N OT BE TERMED AS INCOME OF THE RESPONDENT. THE AO, THEREFORE, SH OULD HAVE VERIFIED THE FACTS FROM ALL THE CONCERN PERSONS AND SHOULD HAVE EXAMINED SMT. SAROJ SHARMA AND OTHERS AND WITNESS T O THE MOU BEFORE ARRIVING AT THE FINDING OF FACT IN THE MATTE R. THE ASSESSEE FURTHER EXPLAINED THAT REPORT OF THE INSPECTOR WAS NOT CONFRONTED TO HIM, THEREFORE, SUCH EVIDENCE CANNOT BE READ IN EVIDENCE 32 ITA NO. 5871/DEL/2017 AGAINST THE ASSESSEE. NO EFFORTS HAVE BEEN MADE BY THE AO TO VERIFY THE FACTS FROM THE AO OF M/S MEGHATECH REALT ORS P. LTD. THE AO ALSO IGNORED BALANCE SHEET OF THIS COMPANY F ILED WITH ROC TO VERIFY THE AMOUNT OF ADVANCE SHOWN OF RS. 10 CRO RES. THESE FACTS CLEARLY SHOW THAT DESPITE CORROBORATING MATER IAL AVAILABLE ON RECORD, THE AO MERELY MADE THE ADDITION AGAINST THE ASSESSEE BECAUSE THE DIRECTORS OF M/S MEGHATECH REALTORS P. LTD. WERE NOT PRODUCED FOR EXAMINATION BEFORE THE AO. HOWEVER, T HE FACT REMAINED THAT SUFFICIENT MATERIAL WAS AVAILABLE ON RECORD THAT ASSESSEE ACTED ON BEHALF OF M/S MEGHATECH REALTORS P. LTD. AND ASSESSEE WHILE ACTING ON THEIR BEHALF EXECUTED AGRE EMENT TO SELL WITH SMT. SAROJ SHARMA AND OTHERS. HOWEVER, SMT. S AROJ SHARMA AND OTHERS DID NOT COMPLETE DEAL WITH THE ASSESSEE, ASSESSEE HAS TAKEN ACTION AGAINST HER WITH THE POLICE AS WELL AS IN THE COURT OF LAW WITH SH. DEVENDER KUMAR. THEREFORE, FACTS SHAL L HAVE TO BE VERIFIED FROM ALL THE CONCERNED PARTIES INCLUDING S MT. SAROJ SHARMA AND WITNESSES TO THE MOU ETC. IT APPEARS TO US THAT AO HAS NOT CONDUCTED PROPER INVESTIGATION ON THIS ISSU E AND MERELY MADE ADDITION FOR NON PRODUCTION OF DIRECTOR OF COM PANY. THEREFORE, THE MATTER REQUIRES RECONSIDERATION AND THE LEVEL OF THE 33 ITA NO. 5871/DEL/2017 AO. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE A UTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF AO WITH DIREC TION TO RE-DECIDE THIS ISSUE IN ACCORDANCE WITH LAW AND AS PER OBSERV ATIONS IN THE ORDER BY GIVING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THE AO SHALL MADE ALL EFFORTS TO ENQUIRE FROM ALL CONCERN PARTIES ABOUT THE FACTS OF EXECUTION OF MOU FOR M/S MEGHATECH REALTORS P. LTD. AND SHALL PASS THE REASO NED ORDER. 16. IN THE RESULT, THIS GROUND OF APPEAL OF ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. 17. AS REGARDS, THE ADDITION ON ACCOUNT OF DEEMED D IVIDEND, THE ASSESSEE PLEADED THAT ADVANCE WAS RECEIVED FOR PURC HASE OF LAND FOR THE COMPANY IN ORDINARY COURSE OF BUSINESS. HO WEVER, DURING THE COURSE OF ARGUMENTS LD. COUNSEL FOR THE ASSESSE E HAS NOT BEEN ABLE TO REFER TO ANY EVIDENCE TO SUPPORT SUCH CONTE NTION. THEREFORE, THIS POINT WAS RIGHTLY REJECTED BY THE A UTHORITIES BELOW. HOWEVER, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T ADDITION FOR DEEMED DIVIDEND COULD BE MADE TO THE EXTENT OF ACCU MULATED PROFITS OF THE LENDER COMPANY. THE LD. CIT(A) FOLL OWING HIS ORDER DATED 31.03.2017 FOR AY 2013-14 AND 2014-15 ACCEPTE D THE PLEA 34 ITA NO. 5871/DEL/2017 OF THE ASSESSEE AND DIRECTED THE AO TO MAKE ADDITIO N U/S 2(22)(E) I.E. ADDITION MADE ARE RESTRICTED TO THE EXTENT OF ACCUMULATED PROFITS. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE REMAND REPORT FILED BY THE AO BEFORE LD. CIT(A), PB 250 I.E. ON 3 1.03.2012, THE ACCUMULATED PROFIT IN CASE OF M/S DREAM GREEN LAND REALTORS P. LTD. AND M/S ROSEMARY PROPERTIES P. LTD. WERE RS. 4 ,26,330/- AND RS. 2,41,280/-. HE HAS FURTHER SUBMITTED THAT THE ORDER OF LD. CIT(A) NEED TO BE MODIFIED AS ACCUMULATED PROFIT TA XED AS DEEMED DIVIDEND IN EARLIER YEAR NEED TO BE EXCLUDED I.E. I N THE CASE OF DREAM GREEN LAND REALTORS P. LTD. FOR AY 2008-09 WA S RS. 2,871/- AND IN CASE OF M/S ROSEMARY PROPERTIES LTD. IN AY 2009- 10 IT WAS RS. 86,111/-. WE, ACCORDINGLY, DIRECT TH E AO TO TAKE INTO CONSIDERATION THE ABOVE FACTS AND SUBMISSION OF THE ASSESSEE WHILE PASSING THE APPEAL EFFECT ORDER IN THE MATTER . WITH THESE MODIFICATIONS THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 35 ITA NO. 5871/DEL/2017 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 20.09.2018 SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.09.2018 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 05.09.18 TO 06.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 20.09.18 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 24.09.18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.0 9.18 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 36 ITA NO. 5871/DEL/2017