Yogesh Mehra, Pune V. Deputy Commissioner of Income-tax,

ITA 643/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7507 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Loose papers; Principle of natural justice

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 643/PUN/2015 / ASSESSMENT YEAR : 2007-08 SHRI YOGESH MEHRA, UNIT NO.57, HILLS & DALES, S.NO.13/14, UNDRI, PUNE 411 028 PAN : AAXPM9966E . / APPELLANT V/S DCIT, CIRCLE - 2 , PUNE . / RESPONDENT . / ITA NO. 587/PUN/2015 / ASSESSMENT YEAR : 2007-08 ITO, WARD - 1(2), PUNE . / APPELLANT V/S SHRI YOGESH MEHRA, UNIT NO.57, HILLS & DALES, S.NO.13/14, UNDRI, PUNE 411 028 PAN : AAXPM9966E . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI AJAY MODI / ORDER PER D. KARUNAKARA RAO, AM : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND T HE REVENUE AGAINST THE ORDER OF CIT(A)-7, PUNE DATED 16-01-2015 FOR THE AS SESSMENT YEAR 2007-08. / DATE OF HEARING : 29.08.2017 / DATE OF PRONOUNCEMENT: 30.08.2017 2 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 2. ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS. 5,82,000/- ON ACCOUNT OF COMMISSION IN RESPECT OF T RANSACTIONS WHICH WERE CANCELLED BY IGNORING THE EVIDENCE LED BY THE ASSES SEE IN THE FORM OF CONFIRMATION FROM MARVEL GROUP. THE ACTION OF THE LEARNED CIT(A) PURELY BASED ON STATEMENT MADE AT THE TIME OF SURVEY IS FACTUALLY AND LEGALLY INCORRECT. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING AN ADDITION OF RS.33,43,000/- ON ACCOUNT OF COMMISSION FROM LAND D EAL AT SADESSATRA NALLI AND PLOT AT HADAPSAR ON THE BASIS OF LEDGER ACCOUNT OF MARVEL GROUP WITHOUT MAKING ANY INQUIRY AS TO THE TRANSACTIONS. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.1,25,000/- ON ACCOUNT COMMISSION IN RESPECT OF P LOT AT PIMPLE NILAKH FROM MARVEL GROUP AND RS.4,41,450/- ON ACCOUNT OF COMMIS SION IN RESPECT OF PROJECT MERLOT WITHOUT MAKING ANY INQUIRY AND EXAMINATION A S TO THE TRANSACTIONS. 4. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.21,00,000/- IN RESPECT OF BOOKING OF FLAT ON THE BASIS OF PAPER FOUND IN CASE OF SHRI PANDOO NAIG WHEN THE TRANSACTION PERTAIN TO FI RM M.S. GOLDEN LAND DEVELOPERS IN WHICH THE APPELLANT WAS A PARTNER. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT SHR I PANDOO NAIG OUGHT TO HAVE EXAMINED AS ALSO FURTHER OPPORTUNITY TO CROSS EXAMINATION OUGHT TO HAVE AFFORDED TO THE APPELLANT. 6. WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL , THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN NOT ALLOWING SET OFF O F COMMISSION INCOME ADDED AGAINST ADDITION ON ACCOUNT OF INVESTMENT OF THE AP PELLANT. 3. SIMILARLY, THE REVENUE RAISED COUPLE OF ISSUES I N THE GROUNDS OF APPEAL WHICH READ AS UNDER : 1. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE AM OUNT OF RS.23,00,000/- IS AN UNDISCLOSED INCOME OF THE FIRM AND NOT OF THE AS SESSEE WITHOUT APPRECIATING THAT ASSESSEE HAS DECLARED THE SAME AS HIS INCOME I N STATEMENT RECORDED U/S.133A(3) OF THE ACT DURING SURVEY. 1.1 THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THAT THE FUNDS WERE INTRODUCED BY THE ASSESSEE INTO FIRM FOR INVESTING IN THE SAID LA ND & THEREFORE WAS UNDISCLOSED INCOME OF THE ASSESSEE. 2. THE LD.CIT(A) HAS ERRED IN HOLDING THAT AN AMOUN T OF RS.21,00,000/- AS NOTED ON PAGE NO.160 WAS ALSO AN UNDISCLOSED INCOME OF PARTNER WHICH WAS SUBSEQUENTLY INVESTED IN PARTNERSHIP FOR PURCHASE O F FLAT AT PIMPLE NILAKH AND THEREFORE CANNOT BE CONSIDERED AS INCOME OF THE PAR TNERSHIP FIRM. 4. BRIEFLY STATED THE RELEVANT FACTS ARE THAT THAT THE ASSESSEE IS A BROKER IN REAL ESTATE. HE EARNED COMMISSION FROM THE BUILDER BY NAME M/S. MARVEL 3 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA REALTORS AND DEVELOPERS LTD. OF MARVEL GROUP. FURT HER, THE ASSESSEE EARNED SHARE INCOME FROM HIS FIRM AS PARTNER IN M/S. GOLDE N LAND DEVELOPERS. THERE WAS SURVEY ACTION ON THE ASSESSEE U/S.133A OF THE ACT O N 22-05-2008. THERE WAS SEARCH/SURVEY ACTION ON MARVEL GROUP CASES TOO. DU RING THE COURSE OF SEARCH ACTION U/S.132 OF THE ACT, SOME INCRIMINATING DOCUM ENTS WERE SEIZED WHICH CONNECTS TO THE ASSESSEE. ACCORDING TO THE SAID PA PERS, ASSESSEE EARNED COMMISSION BOTH IN CASH AS WELL AS IN CHEQUES AND T HE CASH PORTION WAS NOT ACCOUNTED IN THE BOOKS OF ACCOUNT OF BOTH THE ASSES SEE AS WELL AS THE M/S. MARVEL REALTORS AND DEVELOPERS LTD. THERE WAS SOME INCRIM INATING MATERIAL TO SUGGEST THAT THE ASSESSEE PAID CASH OF RS.21 LAKHS TO MARV EL REALTORS AND DEVELOPERS LTD., FOR BUYING THE FLAT. ASSESSEE IS IMPLICATED IN THE TRANSACTION OF PAYMENT OF CASH OF RS.23 LAKHS IN A LAND DEAL. 5. BASED ON THE SEIZED PAPERS, THE AO MADE ADDITION OF RS.5,82,000/-, RS.33,43,000/-, RS.1,25,000/- AND RS.4,41,450/- RES PECTIVELY ON ACCOUNT OF SUPPRESSED COMMISSION. THESE PAPERS REFERRED TO TH E NUMBER OF FLATS SOLD THROUGH THE ASSESSEE BROKER. AO CALCULATED THE C OMMISSION @2% OF THE FULL VALUE OF CONSIDERATION OF THE SAID FLATS. FURTHER, THE AO MADE ADDITION OF RS.21 LAKHS IN RESPECT OF THE UNACCOUNTED CASH PAYMENT TO THE BUILDER FOR BUYING FLAT. AO TAXED THE SAME IN THE HANDS OF THE ASSESSEE REJE CTING THE ASSESSEES EXPLANATION THAT IT IS ACTUALLY TAXABLE IN THE HAND S OF HIS FIRM M/S. GOLDEN LAND DEVELOPERS. FURTHER, RS.23 LAKHS WAS THE ANOTHER A DDITION MADE BY THE AO IN CONNECTION WITH A LAND DEAL REJECTING THE ASSESSEE S PEA THAT THE SAID AMOUNT HAS TO BE TAXED IN THE HANDS OF THE ASSESSEES FIRM. T HUS, THE RE-ASSESSMENT WAS MADE ON THE ASSESSEE DETERMINING THE RE-ASSESSED IN COME AT RS.1,07,61,750/- AGAINST THE ORIGINALLY RETURNED INCOME OF RS.16,75, 280/-. 4 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 6. THE CIT(A) GAVE PART RELIEF TO THE ASSESSEE AND DELETING THE AMOUNTS OF RS.21 LAKHS AND RS.23 LAKHS MADE BY THE AO. CIT(A) HELD THE SAME ARE TAXABLE IN THE HANDS OF THE FIRM. AGGRIEVED WITH THE SAME, T HE REVENUE IS IN APPEAL. FURTHER, AGGRIEVED WITH THE CONFIRMATION OF THE ADD ITION OF THE COMMISSION INCOME OF RS.5,82,000/-, RS.33,43,000/-, RS.1,25,000/- AND RS.4,41,450/-, THE ASSESSEE IS IN APPEAL. FURTHER, ASSESSEE IS ALSO AGGRIEVED VID E GROUND NO.4 AGAINST THE DIRECTIONS OF THE CIT(A) TO THE AO ON THE TAXABILIT Y OF THE SAID RS.21 LAKHS IN THE HANDS OF THE ASSESSEES FIRM. ASSESSEE ARGUED THAT THE CIT(A) EXCEEDED HIS JURISDICTION IN GIVING SUCH DIRECTIONS. WE SHALL M OVE ON TO THE GROUNDS OF THE APPEALS. ITA NO.643/PUN/2015 - ASSESSEES APPEAL : 7. BEFORE US, AT THE OUTSET, SMT. DEEPA KHARE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT WITH REGARD TO THE ISSUE OF COMMISSI ON INCOME OF RS.5,82,000/-, RS.33,43,000/-, RS.1,25,000/- AND RS.4,41,450/-, TH E ISSUES NEED TO REVISIT TO THE FILE OF THE AO FOR VARIOUS REASONS. EXPLAINING AND ELABORATING THE SAME, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID AM OUNTS ARE NOT TAXABLE INCOME IN THE HANDS OF THE ASSESSEE EITHER FOR THE REASON OF CANCELLATION OF THE RELEVANT SALE TRANSACTIONS OF THE FLATS WHICH YIELDED COMMIS SION INCOME TO THE ASSESSEE OR FOR THE REASON OF NOT FOLLOWING THE PRINCIPLES OF N ATURAL JUSTICE, I.E., NO CROSS EXAMINATION WITH THE BUILDER/PEOPLE WAS GIVEN WHILE MAKING ADDITIONS OR FOR THE REASON THAT THE COMMISSION OF RS.4,41,450/- IS NOT TAXABLE IN THE YEAR UNDER CONSIDERATION AS THEY PERTAIN TO THE A.Y. 2006-07 AND NOT THE A.Y. 2007-08 UNDER CONSIDERATION OR NO CORROBORATIVE EVIDENCE IS FOUND EXCEPT CERTAIN LOOSE PAPERS/ THE STATEMENTS OF THE PERSONS ETC., 5 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 8. LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE DUTIFULLY RELIED ON THE ORDERS OF THE AO AND THE CIT(A). FURTHER, LD. DR F OR THE REVENUE IS OF THE OPINION THAT THE FACT OF CANCELLATIONS OF FLATS DO NOT IMPACT ON THE COMMISSION EARNINGS OF THE ASSESSEE AS THE ASSESSEE ALREADY RE NDERED REQUISITE SERVICES AT THE TIME WHEN THE SALE AGREEMENT IS SIGNED BY THE B UILDER AND THE BUYER. ACCORDING TO THE REVENUE, SUBSEQUENT EVENT OF CANCE LLATION DO NOT AFFECT THE PAYABILITY OF COMMISSION TO THE BROKER ASSESSEE. LD. DR HAS NO SPECIFIC ARGUMENTS TO MAKE ON THE OTHER ARGUMENT DISCUSSED I N PARA 6 ABOVE. 9. WE HEARD BOTH THE PARTIES AND THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE FOR REMANDING THE ISSUES TO THE FILE OF TH E AO FOR EXAMINING M/S. MARVEL REALTORS AND DEVELOPERS LTD., IF IT HAS REALLY PAID THE COMMISSION TO THE ASSESSEE IN RESPECT OF THE REFUND/CANCELLED TRANSACTIONS REL ATING TO SALE OF FLATS. WE FIND THAT THE CONFIRMATION LETTER, WHICH IS AVAILABLE AT PAGE 154 OF THE PAPER BOOK, DO NOT INDICATE THE ABOVE STATED POSITION. IT ONLY SP EAKS ABOUT THE FACT OF CANCELLATION OF THE SALE OF VARIOUS FLATS AND NOT T HE PAYABILITY OF COMMISSION TO THE BROKER ASSESSEE. THERE IS NEED FOR INVESTIGATION INTO THE EFFECT OF SAID CANCELLATIONS ON THE COMMISSION EARNING OF THE ASSE SSEE AS A BROKER. 10. FURTHER, SO FAR AS THE ISSUE OF TAXABILITY OF C OMMISSION OF RS.4,41,450/- , WE FIND THAT THE SAME WAS INFACT ADDED BASED ON THE SE IZED PAPER PLACED AT PAGE NO.159 OF THE PAPER BOOK, WHICH DO NOT FALL WITHIN THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08. WE FIND THE SAID PAGE IS MEANT FOR T HE PERIOD THAT FALLS IN A.Y. 2006-07. THE SAID PAYMENTS WERE RECEIVED BY THE AS SESSEE ON 06/11-12-2005 AND THE RELEVANT ASSESSMENT YEAR IS A.Y. 2006-07. IN OUR VIEW, SUCH ADDITION IS UNSUSTAINABLE AS THEY RELATE NOT TO THE PERIOD RELE VANT TO A.Y. 2007-08. THEREFORE, ASSESSEE IS ENTITLED TO RELIEF ON THIS A CCOUNT. ACCORDINGLY, WE ORDER DELETION OF THIS ADDITION OF RS.4,41,450/-. 6 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 11. OTHERWISE, REST OF THE ADDITIONS RELATING TO TH E COMMISSION OF RS.5,82,000/-, RS.33,43,000/- AND RS.1,25,000/- ARE REMANDED TO THE FILE OF AO FOR FRESH EXAMINATION. AO SHALL GRANT REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUND NOS. 1 TO 3 ARE DECIDED AS ABOVE. 12. GROUND NOS.4 AND 5 BY THE ASSESSEE RELATES TO T HE CONFIRMATION OF ADDITION OF RS.21 LAKHS. INFACT GROUND NO.2 BY THE REVENUE IS ALSO CONNECTED TO THE ISSUE RAISED IN GROUND NOS. 4 AND 5 OF THE ASSESSEES APP EAL. THEREFORE, THE LINKED GROUNDS ARE BEING ADJUDICATED HERE IN THIS PARAGRAP H. RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS CLAIMED TO HAVE PAID THE CASH OF RS .21 LAKHS FOR BOOKING OF FLAT FROM M/S. MARVEL REALTORS AND DEVELOPERS LTD. THIS AMOUNT CONSTITUTES AN ADVANCE AND THE SAME IS ACCORDINGLY RECORDED IN THE BOOKS OF ACCOUNT OF M/S. GOLDEN LAND DEVELOPERS. THEREFORE, IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEES FIRM BOOKED THE SAID FLAT AND THEREFORE THE AMOUNT IS TAXABLE IN THE HANDS OF THE FIRM AND NOT IN THE HANDS OF THE PARTN ER, THE ASSESSEE. THE AO DID NOT ACCEPT THE SAME AND PROCEEDED TO MAKE ADDITION AS PER THE DISCUSSION GIVEN IN PARA 5 OF THE ASSESSMENT ORDER. 13. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) HELD IN PARA 7.2 THAT THE NOTINGS AVAILABLE ON THE SEIZED PAPERS AT PAGES 158 AND 160 ARE ONE AND THE SAME AND THE FACT OF PAYMENT IN QUESTION, CONSTITUT ES THE ADVANCES GIVEN BY THE ASSESSEES FIRM M/S. GOLDEN LAND DEVELOPERS. THE F ACT HANDING OVER OF THE CASH BY THE ASSESSEE DO NOT ALTER THE POSITION ACCOUNTED IN BOOKS. THE RELEVANT CHEQUES ISSUED TO THE BUILDER IN THIS CONTEXT BEARS THE FIRMS NAME. IT IS NOT THE CASE THAT CHEQUE AMOUNT IS PAID BY THE FIRM AND THE CASH PORTION IS PAID BY THE PARTNER. WHILE DELETING THE SAID ADDITION IN THE H ANDS OF THE PARTNER-THE ASSESSEE, 7 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA THE CIT(A) HELD THAT THE SAID AMOUNT IS TAXABLE IN THE HANDS OF THE FIRM AND DIRECTED THE AO ACCORDINGLY. 14. AGGRIEVED WITH THE SAID DIRECTION OF THE CIT(A) THE ASSESSEE IN APPEAL VIDE GROUND NOS. 4 AND 5. FURTHER, AGGRIEVED WITH THE DELETION OF ADDITION OF RS.21 LAKHS IN THE HANDS OF THE PARTNER- THE ASSESSEE, TH E REVENUE IS IN APPEAL VIDE GROUND NO.2. 15. WE HEARD BOTH THE SIDES. WE HAVE GONE THROUGH THE CONTENTS OF PARA NO.7 TO 7.2.2 OF THE ORDER OF CIT(A) AND FIND THAT THESE PARAGRAPHS CONSTITUTE OPERATIONAL ONE ON THE ISSUE OF ADDITION OF RS.21 L AKHS. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, RELEVANT LINES ARE EXTR ACTED AS UNDER : 7.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HENCE, P RIMA FACIE THIS TRANSLATION ALSO RELATES TO THE SAME PROJECT AND IS RELATED TO THE BOOKINGS OF THE FLATS DONE BY THE FIRM GOLDEN LAND DEVELOPERS GLD FOR SHORT, HOWEVER, TH IS AMOUNT DO NOT APPEAR TO HAVE BEEN RECORDED AND HAS BEEN PAID IN CASH FOR TH E SAME TRANSACTION. THE APPELLANT HAS ACCEPTED THE NOTINGS MADE ON PAGE 158 WITH RESPECT TO THE BOOKINGS OF 2 FLATS BY THE FIRM AT PIMPLE NILAKH, H OWEVER, HAS DENIED THE NOTINGS OF RS.21,00,000/- MADE ON PAGE 160, WHICH ALSO CLEA RLY RELATE TO THE FIRM WHOSE NAME HAS BEEN WRITTEN IN AN ABBREVIATED FORM AS GL D FOLLOWED BY THE APPELLANTS FIRST NAME IN BRACKET. HENCE, THE FIRM WHERE THE A PPELLANT IS A PARTNER HAS BOOKED 2 FLATS IN THE PROJECT OF THE MARVEL GROUP A T PIMPLE NILAKH AND PAID A TOTAL SUM OF RS.42,00,000/- BEING 21 LACS IN CASH AND RS. 21 LACS BY WAY OF CHEQUE. THE FIRM HAS RECORDED THE AFORESAID INVESTMENT OF R S.21 LACS AS APPEARING ON PAGE 158 IN ITS BOOKS OF ACCOUNT, HOWEVER, DENIED T HE ENTRIES OF RS.21 LACS AS APPEARING ON PAGE 160 WHICH PRIMA FACIE IS THE PAYM ENTS MADE IN CASH BY THE FIRM. THUS, THERE IS NO MATERIAL ON RECORD TO SUGG EST THAT THE AFORESAID INVESTMENT HAS BEEN DONE BY THE APPELLANT IN ITS IN DIVIDUAL CAPACITY. HENCE THE AFORESAID ADDITION OUGHT TO HAVE BEEN DONE IN THE H ANDS OF THE FIRM AS IS EVIDENT FROM THE NOTINGS MADE THEREIN AS AGAINST IN THE HANDS OF THE APPELLANT IN ITS INDIVIDUAL CAPACITY. 7.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IN THE CIRCUMST ANCES THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT IN THE CAPACI TY AS AN INDIVIDUAL IS LIABLE TO BE DELETED. HOWEVER, THE SAME NEEDS TO BE TAXED IN THE HANDS OF THE FIRM GOLDEN LAND DEVELOPERS. 16. FROM THE ABOVE EXTRACTS, WE FIND THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.21 LAKHS IN THE HANDS OF THE ASSESSEE. WE CO NFIRM THE SAME FOR REASONS OF DETAILED DISCUSSION OF THE CIT(A). FURTHER, WE HOL D THAT THE ARGUMENT OF LD. 8 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT AM OUNT BECOMES TAXABLE SINCE CASH IS HANDED OVER BY THE ASSESSEE. IT IS POSSIBLE THAT THE ASSESSEE HANDED OVER THE CASH FOR AN ON BEHALF OF HIS FIRM IN THE CAPACI TY OF THE PARTNER OF THE FIRM. 17. SO FAR AS THE DIRECTION OF THE CIT(A) TO THE AO ABOUT TAXING OF THE SAME IN THE HANDS OF THE FIRM, I.E., M/S. GOLDEN LAND DEVEL OPERS, IS CONCERNED WE FIND IT IS OBVIOUS INFERENCE FROM THE DISCUSSION GIVEN IN PARA 7.2 THAT IT HAS TO BE TAXED SOMEWHERE ELSE. EVEN IF SUCH DIRECTION IS NOT GIVE N IN THE LANGUAGE AS MENTIONED IN THE ORDER OF CIT(A), THE AO OUGHT TO HAVE TAKEN REQUISITE INITIATIVE FOR BRINGING THE SAID AMOUNT TO TAX IN THE HANDS OF THE FIRM - M /S. GOLDEN LAND DEVELOPERS. THEREFORE, THE DIRECTION GIVEN BY THE CIT(A) IS SUP ERFLUOUS AND DOES NOT REQUIRE ANY EXPUNGING OF THE SAME. IT IS THE CLAIM OF THE ASSESSEE THAT THE CASH PAYMENT DO NOT BELONG TO THE ASSESSEE AND IT IS DONE BY THE ASSESSEE FOR AND ON BEHALF OF THE FIRM. IN OTHERWORDS, IT IS AN OBVIOUS INFERENC E THAT THE SAID CASH OF RS.21 LAKHS BELONGS TO THE FIRM. ACCORDINGLY, THE GROUND S RAISED BY THE ASSESSEE ARE DISMISSED. SIMILARLY, THE GROUND NO.2 RAISED BY TH E REVENUE IS ALSO DISMISSED TOO. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ITA NO.587/PUN/2015 - REVENUES APPEAL : 19. WE SHALL NOW TAKE UP THE REVENUE APPEAL. GROUN D NO.2 WAS ALREADY ADJUDICATED WHILE DEALING WITH GROUND NOS. 4 AND 5 OF THE ASSESSEES APPEAL. WE CONFIRMED NOT ONLY THE DELETION OF ADDITION IN THE HANDS OF THE ASSESSEE AND ALSO REJECT THE REQUEST FOR EXPUNGING THE DIRECTION OF T HE CIT(A). THAT LEAVES THE ISSUE RELATING TO ADDITION OF RS.23 LAKHS WHICH WAS DELET ED BY THE CIT(A) AS PER THE DISCUSSION GIVEN IN PARA NO.4.3 OF HIS ORDER. 9 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 20. RELEVANT FACTS ARE THAT THE SEIZED PAPERS 1 TO 15, IMPOUNDED FROM THE PREMISES OF THE ASSESSEE INDICATES THAT THE CASH PA YMENT OF RS.23 LAKHS WAS MADE IN CONNECTION WITH THE PURCHASE OF LAND AT HIN JEWADI. THE CASE OF THE ASSESSEE IS THAT THE SAID INVESTMENT BELONGS TO THE PARTNERSHIP FIRM M/S. GOLDEN LAND DEVELOPERS AND THE RELEVANT TRANSACTION IS REF LECTED IN THE BOOKS OF ACCOUNT OF THE FIRM FOR THE A.Y. 2009-10. OF COURSE, THE C ASH PAYMENTS ARE NOT RECORDED AND THEREFORE THE SAME WAS OFFERED IN THE RETURN OF INCOME. HOWEVER, REVENUE IS OF THE OPINION THAT THE SAID AMOUNT BELONGS TO THE A.Y. 2007-08. FOR THIS PROPOSITION, AO RELIED ON THE DATE APPEARED ON THE FACE OF THE MEMORANDUM OF ASSOCIATION PERTAINING TO THE SAID PROPERTY. AO REL IED ON THE IMPOUNDED PAPERS FOR THE PROPOSITION THAT THE PAYMENT HAS TO BE TAXED IN THE HANDS OF THE ASSESSEE. AO IGNORED THE FACT THAT THE SAID AMOUNT WAS DULY D ECLARED IN THE RETURN OF INCOME OF THE ASSESSEE FOR THE A.Y. 2009-10 OF THE FIRM. CONTENTS OF PARA 3 ALONG WITH ITS SUB PARAGRAPHS OF THE ASSESSMENT ORDER ARE RELEVANT. 21. DURING THE FIRST APPELLATE PROCEEDINGS, ON THIS ISSUE OF YEAR OF TAXABILITY AS WELL AS THE TAXABILITY IN THE HANDS OF RIGHT PERSON , THE CIT(A) DISCUSSED THE SAME IN PARA NOS. 4 TO 4.4 OF HIS ORDER. CONTENT OF PAR A NO.4.3 CONSTITUTES AN OPERATION PARA. CIT(A) DIRECTED THE AO TO DELETE THE SAID AD DITION OF RS.23 LAKHS IN THE HANDS OF THE ASSESSEE ENTIRELY AND DIRECTED THE AO TO TAX THE SAME IN A.Y. 2007- 08 AND IN THE HANDS OF HIS FIRM, I.E., M/S. GOLDEN LAND DEVELOPERS. THERE IS NO DIRECTION THAT THE REFUND OF THE RELEVANT TAXES BY THE SAID FIRM IN A.Y. 2009-10. HE ACCORDINGLY DELETED THE SAME IN THE YEAR UNDER C ONSIDERATION IN THE HANDS OF THE ASSESSEE AGAINST WHICH THE REVENUE IS AGGRIEVE D VIDE THE GROUND NO.1. 22. BEFORE US, WHILE NARRATING THE ABOVE FACTS, LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDER OF THE A O AND THE REASONING GIVEN BY THE AO WHILE MAKING ADDITION OF RS.23 LAKHS. 10 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA 23. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE STATED THE FACT THAT THE SAID PAYMENT BELONGS TO THE FIRM - M/S. GOLDEN LAND DEVELOPERS AND THE SAME WAS DULY DISCLOSED IN THE A.Y. 2009-10 IN THE HANDS OF THE FIRM. SO FAR AS THE DECISION OF THE CIT(A) ON THIS ISSUE IS CONCERNED, THE SAME IS FAIR AND SHOULD NOT BE DISTURBED. 24. WE HEARD BOTH THE SIDES ON THIS ISSUE AND PERUS ED THE ORDERS OF THE REVENUE AS WELL AS THE PAPER BOOK PLACED BEFORE US. THE CIT(A), WHILE DELETING THE ADDITION OF RS.23 LAKHS IN THE HANDS OF THE ASS ESSEE AS WELL AS WHILE GIVING THE DIRECTION OF THE CIT(A) IN TAXING THE SAME IN THE A .Y. 2007-08 IN THE HANDS OF M/S. GOLDEN LAND DEVELOPERS, HAS DISCUSSED THE ISSUE AT LENGTH IN PARA NO.4.3 OF HIS ORDER. FOR THE SAKE OF COMPLETENESS, WE PROCEED T O EXTRACT THE RELEVANT LINES FROM THE SAID PARA : 4.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . THE BALANCE SHE ET FILED BY THE APPELLANT OF THE FIRM ALSO SHOWS THE SAID LAND APPEARING AS AN ASSET OF THE FI RM. THUS THE CONTENTION OF THE AO THAT THE TRANSACTION HAS BEEN DONE THROUGH THE P ARTNERS AND HENCE THE SOURCE OF UNDISCLOSED INCOME AROSE FROM THEM IS PRIMA FACI E NOT CORRECT AS THE TRANSACTION HAS BEEN UNDER TAKEN BY THE FIRM THROUG H ITS TWO PARTNERS AS IS CLEARLY EVIDENT FROM THE FINAL SALE DEED EXECUTED ON 29-12- 2008 AND WHEREIN EVEN THE REFERENCE OF THE AFORESAID MOU DATED 09.11.2006 APP EARS IN ONE OF THE AGREEMENT. THE AFORESAID FIRM HAS SHOWN THE AFORES AID ASSET DURING A.Y. 2009- 10, HOWEVER, THE PAYMENT MADE IN CASH HAS BEEN DURI NG F.Y. 2006-07 RELEVANT TO A.Y. 2007-08 AS IS CLEARLY EVIDENT FROM THE CASH REC EIPTS FOUND DURING THE COURSE OF SURVEY ACTION AND ALSO ADMITTED BY THE APPELLANT IN THE STATEMENT RECORDED ON 22-05-2008. IN VIEW OF THE AFORESAID FACTS THE ADD ITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELLANT IS LIABLE TO BE DELETED, HOWEVER, THE SAID AMOUNT NEEDS TO BE TAXED DURING A.Y. 2007-08 IN THE HANDS OF THE FIRM GOLDEN LAND DEVELOPERS AS AGAINST THE DECLARATION OF ADDIT IONAL INCOME MADE BY THE FIRM IN A.Y. 2009-10. 25. WE FIND THE IMPOUNDED MATERIAL ADEQUATELY SUGGE ST THE FIRM AS THE OWNER OF THE TRANSACTION OF PAYMENT OF RS.23 LAKHS IN THE CONTEXT OF PURCHASES OF LAND. YEAR OF TAXABILITY, I.E. A.Y. 2007-08 IS ALSO OBVIO US IN THE SAID DOCUMENTS. THEREFORE, WE DO NOT APPROVE THE DISCLOSURE OF RS.2 3 LAKHS BY THE ASSESSEE IN A.Y. 2009-10. THEREFORE, IN OUR CONSIDERED OPINION, THE DECISION OF THE CIT(A) IS FAIR 11 ITA NO.643 & 587/PUN/2015 SHRI YOGESH MEHRA AND REASONABLE AND WE PROCEED TO CONFIRM THE SAME. AS SUCH, TAXING THE AMOUNT TWICE, ONCE IN THE HANDS OF THE ASSESSEE AND THEN IN THE HANDS OF M/S. GOLDEN LAND DEVELOPERS AMOUNTS TO DOUBLE TAXATION. THUS, THE CIT(A) IS FAIR IN ACCEPTING THE DATES APPEARING ON THE SAID IMPOUNDED PAPERS TH AT RELATE TO A.Y. 2007-08. THE CIT(A) ACCORDINGLY OPINED TO TAX THE SAME IN A. Y. 2007-08 IN THE HANDS OF M/S. GOLDEN LAND DEVELOPERS. THEREFORE, WE CONCUR WITH THE CONCLUSION DRAWN BY THE CIT(A) ON THIS ISSUE AND WE PROCEED TO CONFIRM THE SAME. ACCORDINGLY, GROUND NOS. 1 AND 1.1 RAISED BY THE REVENUE ARE REQ UIRED TO BE DISMISSED. 26. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 27. TO SUM UP, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUGUST, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 30 TH AUGUST, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 7 , PUNE 4 . 5. THE CIT - 7 , PUNE ( , , B BENCH PUNE; 6 . / GUARD FILE.