MAHENDRA R. LULLA, MUMBAI V. INCOME TAX OFFICER WARD 21(2)(2), MUMBAI

ITA 6358/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1713 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 26-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Keywords: Unexplained investment; Search and seizure; Opportunity of cross examination
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 6358 / MUM/20 17 ( ASSESSMENT YEAR : 2007 - 08 ) SHRI MAHENDRA R. LULLA 201, JOGANI INDUSTRIAL ESTATE S.B. MARG, DADAR (W) MUMBAI 400 028 VS. ITO, WARD 21(2)(2) RO OM NO.111, 1 ST FLOOR PIRAMAL CHAMBER, LALBAUG MUMBAI 400 012 PAN/GIR NO. AAAPL3930G APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI VIJAY MEHTA / SHRI ANUJ KISNADWALA REVENUE BY SHRI ABDUL HAKEEM M DATE OF HEARING 31 / 08 /20 1 8 DATE OF PRONOUNCEMENT 31 / 08 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 33, MUMBAI DATED 17/08/2017 FOR A.Y.2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF T HE IT ACT. 2. IN THIS APPEAL, ASSESSEE IS AGGRIEVED FOR OPEN OF ASSESSMENT U/S.147 AND ALSO FOR ADDITION OF RS.26,64,000/ - ON ACCOUNT OF ALLEGED PAYMENT OF ON MONEY IN ACQUISITION OF RESIDENTIAL PROPERTY. 3. RIVAL CONTEN TIONS HAVE BEEN HEARD AND RECORD PER USED. 4. THE ASSESSEE ALONGWITH OTHER FAMILY MEMBERS, BOOKED A RESIDENTIAL FLAT NO.2504 IN THE BUILDING NAMED TORINO AT POWAI WHICH WAS BEING CONSTRUCTED BY HIRANANDANI GROUP (BUILDER). THE BOOKING WAS MADE ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 2 VIDE ALLOTMENT LETTERS DATED 31 - 03 - 2006. DURING THE COURSE OF NEGOTIATION/BOOKING, IT WAS MADE CLEAR BY THE ASSESSEE THAT ENTIRE PAYMENT WOULD BE MADE BY 'CHEQUES ONLY'. THE BUILDER AGREED FOR THE SAME AND ONLY ON THIS UNDERSTANDING , ALL PAYMENTS WERE MADE BY CHEQUES ONLY. THE BUILDER'S SAID ALLOTMENT LETTERS CONFIRM THESE FACTS . IN THE ASSESSMENT ORDER, AO OBSERVED THAT DURING THE F.Y.2013 - 14, A SEARCH ACTION TOOK PLACE ON HIRANANDANI GROUP & CERTAIN DOCUMENTS WERE SEIZED. BASED ON THOSE DOCUMENTS, T HE A.O. ISSUED NOTICE U/S.148 ON THE ASSESSEE PROPOSI NG TO R EOPEN THE ASSESSMENT FOR A.Y.2007 - 08. THE ASSESSEE REPLIED BY HIS LETTER DATED 31 - 03 - 2014 TO TREAT THE ORIGINAL RETURN FILED ON 31 - 07 - 2007, AS IF FILED IN RESPONSE TO NOTICE U/S.148 AND ALSO ASKED THE REASONS FOR REOPENING. IN THE ASSESSMENT ORDER SO PASSED, AO OBSERVED THAT THE ASSESSEE HAD PAID AN AMOUNT OF RS.26,64,000/ - IN CASH ON 03 - 06 - 2006 TO THE BUILDER AS 'ON MONEY'. HOWEVER, NO DOCUMENTARY EVIDENCE WAS SUPPLIED TO THE ASSESSEE. THE ASSESSEE THEREFORE REQUESTED THE A.O. TO PROVIDE THE BASIS AND/OR A DOCUMENTARY EVIDENCE IN SUPPORT OF THIS SAID ALLEGATION . THE ASSESSEE ALSO REQUESTED A.O. FOR CROSS EXAMINATION OF THE DIRECTORS/PARTNERS/EMPLOYEES OF HIRANANDANI GROUP. HOWEVER, THE LD.A.O. NEITHER SUPPLIED ANY CONCRETE EVIDENCE IN SUPPORT OF HI S ABOVE ALLEGATION NOR PROVIDED THE OPPORTUNITY OF CROSS EXAMINATION. THE A.O. SUPPLIED MERELY ONE PAGE STATEMENT COPY OF SHRI. NIRANJAN HIRANANDANI WITHOUT ANY EVIDENCE WHATSOEVER IN SUPPORT ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 3 OF THE SAME. THESE FACTS ARE VERY MUCH EVIDENT FROM PAGE NOS. 3 & 4 OF THE ASSESSMENT ORDE R. 5. BY THE IMPUGNED ORDER, THE ADDITION SO MADE ON ACCOUNT OF ON MONEY WAS CONFIRMED BY THE CIT(A) AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6 . RELIANCE WAS PLACED BY LEARNED AR ON THE DECISION OF TRIBUNAL IN CASE OF NAREN PREMCHAND NAGDA IN ITA NO.3265/MUM/2015 ORDER DATED 08/07/2016 WHEREIN SIMILAR ADDITION WAS DELETED AFTER OBSERVING AS UNDER: - 5. I HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD. THE FACTS ARE NOT IN DISPUTE. THE I SSUE IS AS TO WHETHER THE ADDITION MADE ON THE BASIS OF PAPER SEIZED IN THE CASE OF SEARCH ON THE SIDDHI GROUP AND NOT ON THE ASSESSEE AND ALSO ON THE BASIS OF STATEMENT MADE BY SHRI KANTILAL M PATEL, THE KEY PERSON OF SIDDHI GROUP, IS JUSTIFIABLE AND IN A CCORDANCE WITH LAW. IT IS PERTINENT TO MENTION THAT AS PER THE RECORD, THE ASSESSEE HAS VEHEMENTLY DENIED HAVING MADE ANY CASH PAYMENT OF RS.37 LAKHS TOWARDS PURCHASE OF SHOP, OVER AND ABOVE THE PRICE SETTLED. IN ADDITION, IN THE CASE OF 'CIT V/S LATA MANG ESHKAR' (SUPRA), RELYING ON THE EVIDENCE IN THE FORM OF STATEMENT BY TWO PERSONS, TO THE EFFECT THAT THEY HAD PAID MONEY IN BLACK TO THE ASSESSEE, AS WELL AS ENTRIES IN THE BOOKS BELONGING TO THEM REGARDING THE ALLEGED PAYMENT, THE AO MADE ADDITION TO THE ASSESSEE S TOTAL INCOME AS INCOME FROM 'UNDISCLOSED SOURCES'. THE TRIBUNAL, HAVING FOUND THAT THE EVIDENCE TENDERED SUFFERED FROM SERIOUS INFIRMITIES, HELD THAT MERE ENTRIES IN ACCOUNTS REGARDING PAYMENTS TO ASSESSEE WERE NOT SUFFICIENT TO PROVE THAT ASSESSEE HAD RECEIVED MONEY IN BLACK' FOR WHICH, SHE DID NOT ISSUE A RECEIPT. THE ADDITIONS WERE DELETED. THE HONBLE HIGH COURT HELD THAT ENTRIES IN DAY - BOOK OR LEDGER WOULD BE A CORROBORATIVE PIECE OF EVIDENCE AND ONCE DIRECT EVIDENCE OF PERSONS HAVING MADE PAYMENTS IN 'BLACK' WAS DISBELIEVED, NO VALUE COULD BE ATTACHED TO THOSE ENTRIES. THE TRIBUNAL WAS, ACCORDINGLY HELD JUSTIFIED IN DELETING THE ADDITIONS. IN THE PRESENT CASE, APART FROM THE PAPERS SEIZED IN THE SEARCH CONDUCTED, NOT ON THE ASSESSEE, BUT ON THE SID DHI GROUP, AND THE STATEMENT OF SHRI PATEL, WHO IS A KEY PERSON OF THE SIDDHI GROUP AND HAS NOTHING TO DO WITH THE ASSESSEE, THERE IS NO EVIDENCE TO IMPLICATE THE ASSESSEE, SO FAR AS REGARDS THE ALLEGED PAYMENT OF RS.37 LAKHS OVER ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 4 AND ABOVE THE CREDITED AM OUNT. MERELY, ON THIS BASIS, IN MY CONSIDERED OPINION AND IN THE LIGHT OF THE PRINCIPLE LAID DOWN IN THE CASE OF 'LATA MANGESHKAR' (SUPRA) THE ADDITION IS UNSUSTAINABLE IN LAW. 6. IN THE CASE OF 'JITENDRAKUMAR SHANTILAL SHETH' (SUPRA), INFORMATION WAS RECE IVED FROM DCIT, WHERE THE SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT IN THE CASE OF M, M STATED THAT HE HAD PURCHASED LAND JOINTLY WITH FOUR OTHER PERSONS INCLUDING THE ASSESSEE AT A CONSIDERATION OF RS.20 LAKHS. ACCORDING TO THE AO, THE CONSIDERATION PAID WAS OF RS.75 LAKHS. THE AO MADE THE ADDITION U/S 69 OF THE ACT TOWARDS SHARE OF THE ASSESSEE ON ACCOUNT OF MONEY PAID FOR PURCHASE OF THE PROPERTY. THE LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT M WAS NOT EVEN CLEAR ON THE EXACT QUANTUM OF CON SIDERATION. THE TRIBUNAL HELD THAT THE STATEMENT OF M WAS NOT SUPPORTED BY ANY EVIDENCE; THAT THE AO DID NOT MAKE ANY ATTEMPT TO CONFIRM THAT SUCH MONEY WAS PAID BY THE ASSESSEE; THAT MERE STATEMENT OF THIRD PARTY COULD NOT BE MADE THE BASIS FOR MAKING THE ADDITION; THAT NOTHING WAS FOUND ON RECORD TO SUGGEST THAT THE ASSESSEE HAD MADE PAYMENT OF ON MONEY IN THE INVESTMENT IN LAND. THE FACTS OF THE PRESENT CASE ARE IN PARA - MATERIA WITH THOSE IN THE CASE OF 'JITENDRAKUMAR SHANTILAL SHETH' (SUPRA). HERE ALSO , OTHER THAN THE FORETASTED EVIDENCE, NOTHING HAS BEEN EMPLOYED BY THE AUTHORITIES BELOW FOR MAKING THE ADDITION AND CONFIRMING THE ADDITION OF ALLEGED ON MONEY. IN THIS REGARD, NO EVIDENCE, WORTHWHILE IS BROUGHT ON RECORD REGARDING PROOF OF ANY PAYMENT OF ON MONEY BY THE ASSESSEE. MERELY ON THE BASIS OF THE PAPER SEIZED IN THE SEARCH CONDUCTED ON THE SIDDHI GROUP, WHICH IS NOT CONNECTED WITH THE ASSESSEE IN ANY MANNER, AND ON THE BASIS OF THE STATEMENT MR.PATEL, WHO HAD NOTHING TO DO WITH THE ASSESSEE, IN THE ABSENCE OF ANY EVIDENCE OF PAYMENT OF ON MONEY BY THE ASSESSEE, IS UNSUSTAINABLE IN LAW. 7. IN THE CASE OF 'RAM PRAKASH PATEL' (SUPRA), THE ASSESSEE WAS THE OWNER OF THE LAND TO THE EXTENT OF ONE HALF PORTION OF 3.92 ACRES AND ONE TAJENDRA SINGH & SONS MADE INVESTMENT OF THE IMPUGNED AMOUNT AS A BUILDER AS PER THE AGREEMENT EXECUTED BETWEEN THE ASSESSEE AND THE BUILDER. THE ADDITION WAS MADE AS INCOME FROM UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. THE TRIBUNAL HELD THAT THERE WAS NOT EVEN AN IOTA OF EVI DENCE THAT THE AMOUNT OF RS. 1.50 CRORE WAS INVESTED BY THE ASSESSEE. LIKEWISE, IN THE PRESENT CASE ALSO, AS DISCUSSED, IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY, THE ASSESSEE CANNOT BE SADDLED OF THE LIABILITY TO THE ADDITION WRONGLY MADE. 8. THE OTH ER CASE LAWS CITED ON BEHALF OF THE ASSESSEE, AS ABOVE, ARE ALSO TO THE SAME EFFECT. NO DECISION TO THE CONTRARY HAS BEEN CITED BEFORE ME ON BEHALF OF THE DEPARTMENT. THEREFORE, KEEPING IN VIEW THE ABOVE DECISIONS, IN THE ABSENCE OF ANY INCRIMINATING DOCUM ENTARY MATERIAL/ EVIDENCE FOUND AGAINST THE ASSESSEE TO PROVE THAT THE ALLEGED INVESTMENT OF RS.37 LAKHS HAD BEEN MADE BY THE ASSESSEE AS ON MONEY, OVER AND ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 5 ABOVE, CREDITED AMOUNT FOR PURCHASE OF THE SHOP IN QUESTION, I FIND THAT THE ADDITION MADE BY THE A O AND CONFIRMED BY THE LD. CIT(A) IS UNSUPPORTED AND UNSUSTAINABLE IN LAW. THE SAME IS ACCORDINGLY DELETED. 7. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE CO - ORDINATE BENCH IN CASE OF SHRI ANIL JAGGI IN ITA NO.3049/MUM/2016 DATED 20/12/2017, WHEREIN S IMILAR ADDITION HAS BEEN DELETED BY THE TRIBUNAL AFTER OBSERVING AS UNDER: - 15. WE SHALL NOW TAKE UP THE CASE OF THE ASSESSEE ON MERITS AND DELIBERATE ON THE VALIDITY OF THE ADDITION OF RS. 2.23 CRORE MADE BY THE A.O ON THE GROUND THAT THE ASSESSEE HAD MADE A PAYMENT OF 'ON MONEY' FOR PURCHASE OF FLATS FROM M/S LAKEVIEW DEVELOPERS. WE HAVE PERUSED THE FACTS OF THE CASE AND THE MATERIAL AVAILABLE ON RECORD ON THE BASIS OF WHICH THE ADDITION OF RS. 2.23 CRORE HAD BEEN MADE IN THE HANDS OF THE ASSESSEE. WE HAVE FURTHER DELIBERATED ON THE MATERIAL PLACED ON RECORD AND THE CONTENTIONS OF THE ID. A.R TO DRIVE HOME HIS CONTENTION THAT NO PAYMENT OF ANY 'ON MONEY' WAS MADE BY THE ASSESSEE FOR PURCHASE OF FLATS FROM M/S LAKEVIEW DEVELOPERS. WE FIND THAT THE GENESI S OF THE CONCLUSION OF THE A.O THAT THE ASSESSEE HAD PAID 'ON MONEY' OF RS. 2.23 CRORE FOR PURCHASE OF PROPERTY UNDER CONSIDERATION IS BASED ON THE CONTENTS OF THE PEN DRIVE WHICH WAS SEIZED FROM THE RESIDENCE OF AN EX - EMPLOYEE OF HIRANANDANI GROUP. WE HAV E PERUSED THE PRINT OUT OF THE PEN DRIVE (PAGE 42 OF APB) AND FIND OURSELVES TO BE IN AGREEMENT WITH THE VIEW OF THE ID A.R THAT THOUGH AGAINST THE HEADING 'AMOUNT OF ON MONEY PAID' THE NAME, ADDRESS AND PAN NO. OF THE ASSESSEE IS MENTIONED ALONGWITH THE D ETAILS OF THE PROPERTY PURCHASED BY HIM, VIZ. FLAT NO.2501 IN 'SOMERSET' BUILDING FROM LAKEVIEW DEVELOPERS (A HIRANANDANI GROUP CONCERN), HOWEVER, THE SAME WOULD NOT CONCLUSIVELY PROVE SUPPRESSION OF INVESTMENT AND PAYMENT OF 'ON MONEY' BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE FIND THAT THE INFORMATION AS EMERGES FROM THE PRINT OUT OF THE PEN DRIVE FALLS SHORT OF CERTAIN MATERIAL FACTS, VIZ. DATE AND MODE OF RECEIPT OF 'ON MONEY', WHO HAD PAID THE MONEY, TO WHOM THE MONEY WAS PAI D, DATE OF AGREEMENT AND WHO HAD PREPARED THE DETAILS, AS A RESULT WHEREOF THE ADVERSE INFERENCES AS REGARDS PAYMENT OF 'ON MONEY' BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION REMAIN UNCORROBORATED. WE FURTHER FIND THAT WHAT WAS THE SOU RCE FROM WHERE THE INFORMATION WAS RECEIVED IN THE PEN DRIVE ALSO REMAINS A MYSTERY TILL DATE. WE FIND THAT SH. NIRANJAN ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 6 HIRANANDANI IN THE COURSE OF HIS CROSS - EXAMINATION HAD CLEARLY STATED THAT NEITHER HE WAS AWARE OF THE PERSON WHO HAD MADE THE ENTRY IN THE PEN DRIVE, NOR HAD WITH HIM ANY EVIDENCE THAT THE ASSESSEE HAD PAID ANY CASH TOWARDS PURCHASE OF FLAT. WE HAVE DELIBERATED ON THE FACT THAT SH. NIRANJAN HIRANANDANI IN HIS STATEMENT RECORDED ON OATH IN THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS HA D CONFIRMED THAT THE AMOUNTS AGGREGATING TO RS. 475.60 CRORE RECORDED IN THE PEN DRIVE WERE THE ON - MONEY RECEIVED ON SALE OF FLATS, WHICH WAS OFFERED AS ADDITIONAL INCOME UNDER SEC. 132(4) AND THEREAFTER OFFERED AS SUCH FOR TAX IN THE PETITION FILED BEFORE THE SETTLEMENT COMMISSION. WE ARE OF THE CONSIDERED VIEW THAT THERE IS SUBSTANTIAL FORCE IN THE CONTENTION OF THE ID. A.R THAT MERE ADMISSION OF THE AMOUNTS RECORDED IN THE PEN DRIVE AS THE ADDITIONAL INCOME BY SH. NIRANJAN HIRANANDANI, FALLING SHORT OF A NY SUCH MATERIAL WHICH WOULD INEXTRICABLY EVIDENCE PAYMENT OF 'ON MONEY' BY THE ASSESSEE WOULD NOT LEAD TO DRAWING OF ADVERSE INFERENCES AS REGARDS THE INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE RATHER HOLD A STRON G CONVICTION THAT THE VERY FACT THAT THE CONSIDERATION PAID BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION WHEN PITTED AGAINST THE 'MARKET VALUE' FIXED BY THE STAMP VALUATION AUTHORITY IS FOUND TO BE SUBSTANTIALLY HIGH, FURTHER FORTIFIES THE VERACITY OF THE CLAIM OF THE ASSESSEE THAT HIS INVESTMENT MADE TOWARDS PURCHASE OF THE PROPERTY UNDER CONSIDERATION WAS WELL IN ORDER. WE ARE OF THE CONSIDERED VIEW THAT THOUGH THE MATERIAL ACTED UPON BY THE DEPARTMENT FOR DRAWING OF ADVERSE INFERENCES AS REGARDS PAYMENT OF 'ON MONEY' BY THE ASSESSEE FORMED A STRONG BASIS FOR DOUBTING THE INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION, BUT THE SAME FALLING SHORT OF CLINCHING MATERIAL WHICH WOULD HAVE IRREFUTABLY EVIDENC ED THE SAID FACT, THUS, DOES NOT INSPIRE MUCH OF CONFIDENCE AS REGARDS THE WAY THEY HAVE BEEN CONSTRUED BY THE LOWER AUTHORITIES FOR DRAWING OF ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE. WE THUS ARE OF A STRONG CONVICTION THAT AS THE MATERIAL RELIED UPON BY THE LOWER AUTHORITIES DOES NOT CORROBORATE THE ADVERSE INFERENCES DRAWN AS REGARDS THE INVESTMENT MADE BY THE ASSESSEE, THEREFORE, THE SAME CANNOT CONCLUSIVELY FORM A BASIS FOR CONCLUDING THAT THE ASSESSEE HAD MADE PAYMENT OF 'ON MONEY' FOR PURCHAS E OF THE PROPERTY UNDER CONSIDERATION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VIEW THAT THE ADVERSE INFERENCES DRAWN BY THE A.O AS REGARDS PAYMENT OF 'ON MONEY' OF RS. 2.23 CRORE BY THE ASSESSEE FOR PURCHASE OF FLAT NO. 2501 FROM M/S LAKEVIEW DEVELOPERS ARE BASED ON OF PREMATURE OBSERVATIONS OF THE A.O, WHICH IN THE ABSENCE OF ANY CLINCHING EVIDENCE CANNOT BE SUSTAINED. WE THUS ARE UNABLE TO SUBSCRIBE TO THE VIEW OF THE LOWER AUTHORITIES ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 7 AND SET ASIDE THE ORDER OF THE CI T(A) SUSTAINING THE ADDITION OF RS. 2.23 CRORES IN THE HANDS OF THE ASSESSEE. 16. THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT ADDITION WAS MADE BY THE AO ON THE BASIS OF STATEMENT OF SHRI NIRANJAN HIRANANDANI. THE ASSESSEE HAS ASKED THE AO FOR SUPPLY OF DOCUMENTARY EVIDENCE IN SUPPORT OF PROPOSED ADDITION AND ALSO FOR CROSS EXAMINATION OF THE DIRECTORS / PARTNERS / EMPLOYEES OF THE HIRANANDANI GR OUP. THE AO HAS NEITHER SUPPLIED ANY CONCRETE EVIDENCE IN SUPPORT OF THE ALLEGATION OF ON MONEY NOR PROVIDED OPPORTUNITY TO CROSS EXAMINATION. HOWEVER, AT THE APPELLATE STAGE ASSESSEE AGAIN ASKED THE CIT(A) FOR CROSS EXAMINATION. THE CIT(A) DIRECTED THE A O TO ALLOW CROSS EXAMINATION. 9 . FROM THE RECORD WE FOUND THAT SUBSEQUENT TO SEARCH STATEMENT OF SHRI NIRANJAN HIRANANDANI AND SHRI MAHENDRA R LULLA WERE AGAIN RECORDED U/S.131 ON 09/03/2017 WHICH READS AS UNDER: Q.I. PLEASE IDENTIFY YOURSELF AND CONF IRM THAT OATH HAS BEEN ADMINISTERED TO YOU AND YOU HAVE BEEN MADE AWARE OF THE CONSEQUENCES OF GIVING FALSE STATEMENT? ANS. 1. I AM NIRANJAN HIRANDANI, S/O DR. L.H. HIRANANDANI, AGED.67 YEARS RESIDING AT KANTA, LITTILE GIBBS ROAD, MUMBAI - 400006. I CO NFIRM THAT OATH HAS BEEN ADMINISTERED TO ME AND I AM AWARE OF THE CONSEQUENCES OF GIVING FALSE STATEMENT ON OATH. 2. I AM MR. MAHENDRA LULLA S/O.RADHAKISHAN T. LULLA, AGED 61 YEARS RESIDING AT 604, OCEAN VIEW, UNION PARK , KNAR WEST,MUMBAI - 400052. . I CON FIRM THAT OATH HAS BEEN ADMINISTERED TO ME AND I AM AWARE OF THE CONSEQUENCES OF GIVING FALSE STATEMENT ON OATH. ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 8 Q.2. TO MR.NIRANJAN HIRANADANI : - I AM SHOWING YOU Q. 10 AND ITS ANSWER GIVEN BY YOU UNDER OATH IN THE STATEMENT RECORDED ON 14.03.2014 D URING THE COURSE OF ACTION U/S 132 OF I.T.ACT . DO YOU AGREE WITH IT. ANS: YES. Q.3 TO ASSESSEE: - WHAT DO YOU HAVE TO ASK MR.NIRANJAN HIRANADANI? Q.NO.L BY ASSESSEE: - I AM SHOWING YOU THE LETTER ISSUED BY THE DEPARTMENT ON 07/11/2014 WHREIN I T IS SHOWN IN THE TABLE THAT RS.26,64,000/ - IS STATED AS ON 03/06/2006 IN THE NAME OF LULLA MAHENDRA. I AM ALSO SHEWING TWO ALLOTMENT LETTERS ISSUED BY CRESCENDO ASSOCIATES ADDRESS TO 5 PURCHASERS ALLOTTING FLAT NO. 2504/A AND 2504/B. KEEPING THESE 2 LETTE RS IN MIND YOU ARE REQUESTED TO ANSWERS THE FOLLOWING QUESTIONS. I) WHAT YOU HAVE TO SAY ABOUT THESE TWO DOCUMENTS? ANS. BY DEPONENT : THE LETTER SHOWING DATE 03/06/2006 IS INCONSISTENCE WITH THE ALLOTMENT TER OF 31/03/2006, THIS IS BECAUSE THE RECEIPTS IN RESPECT THEREOF CANNOT BE CONNECTED SINCE THE SHOWN IS SUBSEQUENT TO THE ALLOTMENT LETTER. IT IS ALSO INDICATIVE THAT THE ALLOTMENT LETTERS ARE I N N AME OF FIVE PURCHASERS AND NOT ONE. II) SIR, DID I PAY THE SAID AMOUNT ? ANS: MR. MAHENDRA LULLA DI D NOT PAY ME ANY 'ON MONEY'. III) IS IT NOT UNUSUAL TO SHOW AMOUNT RECEIVE ON 03/06/2006 WHEN YOU HAD ALREADY ISSUED THE ALLOTMENT LETTERS ON 31/03/2006? ANS: YES, IT IS UNUSUAL TO SHOW. IV) THEN HOW IS THE AMOUNT RS.475,60,19,900/ - ARRIVED AT, SHOWING WHICH INCLUDES RS, 26,64,000/ - BEING PAID BY ME? ANS: THE AMOUNT OF 'ON MONEY' RECEIPTS DECLARED BY ME FOR THE PURPOSES OF TAXES WAS DERIVED AT BY THIS STATEMENT IRRESPECTIVE OF THE CONFIRMATION OF INDIVIDUAL RECEIPTS AS PER ANNEXURE AL ,IN ORDER TO ARRIVE D AT A SETTLEMENT WITH THE DEPARTMENT. THIS DOES NOT CONFIRM ANY INDIVIDUAL ENTRIES. V) SO, MR. NIRANJAN HIRANADANI YOU ARE AGAIN CONFIRMING THAT I HAVE NOT PAID 'ON MONEY' OF RS. 26,64,000/ - ? ANS: I HAD ALREADY ANSWERED THIS EARLIER. ITA NO. 6358/MUM/2017 M/S. MAHENDRA R LULLA 9 1 0 . IT IS CLEAR FR OM THE ABOVE STATEMENT THAT SHRI NIRANJAN HIRANANDANI CLEARLY DECLINED TO RECEIVE ANY ON MONEY FROM THE ASSESSEE. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION FOR THE ADDITION MADE BY THE AO. 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 / 08 /201 8 SD/ - (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI ; DATED 31 / 08/ 201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. TH E RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//