Indu Jain, Gurgaon V. ITO, Ward- 43(4), New Delhi

ITA 682/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0690 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 30-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Principle of natural justice; Tangible material; Reassessment proceedings
• Section: 142(1); 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.682/DEL/2018 ASSESSMENT YEAR : 2007-08 INDU JAIN, B- 144, PHASE- V, SECTOR- 54, GURGAON, HARYANA. VS. ITO, WARD- 43(4), NEW DELHI. PAN : ACIPJ6875G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M. R. SAHU, CA DEPARTMENT BY : SHRI S. L. ANURAGI, SR. DR DATE OF HEARING : 19-07-2018 DATE OF PRONOUNCEMENT : 17-09-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 28.11.2016 OF CIT(A)- 15, DELHI RELATING TO ASSESSM ENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 31.07.2007 DECLARING TOTAL INCOME OF RS.1,98,951/- AFTER CLAIMING DEDUCTION UNDER CHAPTER VIA OF THE I.T. AC T, 1961. AN INFORMATION WAS RECEIVED FROM DIRECTOR OF INCOME TAX (INV.)-II, MUMBAI VIDE LETTER NO.DIT(INV.)-II/TIME BARRING/2013-14 DATED 27.03.20 14 IN RESPECT OF SEARCH OPERATION CONDUCTED ON THE HIRANANDANI GROUP OF BUI LDERS AND DEVELOPERS ON 11.03.2014 THAT THE ASSESSEE HAS PURCHASED A FLAT B EARING FLAT NO.1001 IN GLENDALE BUILDING AND PAID ON MONEY (CASH) OF RS.10 ,95,000/- THROUGH CRESCENDO ASSOCIATES, A CONCERN OF HIRANANDANI GROU P. ACCORDINGLY, THE 2 ITA NO.682/DEL/2018 NOTICE U/S 148 OF THE I.T. ACT, 1961 WAS ISSUED ON 28.03.2014 WITH PRIOR APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX, R ANGE-27, NEW DELHI VIDE HER LETTER NO.JCIT/RANGE-27/148/2013-14/609 DATED 2 8.03.2014 WHICH WAS DULY SERVED UPON THE ASSESSEE BY SPEED POST VIDE AC K.NO. ED099387509IN FOR FILING RETURN OF INCOME FOR ASSTT. YEAR 2007-08 WIT HIN 30 DAYS FROM THE DATE OF ISSUE OF THE SAID NOTICE IN THE PRESCRIBED FORM. I N RESPONSE TO THE SAID NOTICE, NO RETURN WAS FILED BY THE ASSESSEE. SUBSEQUENTLY, TH E ASSESSING OFFICER ISSUED NOTICE U/S 143(2) & 142(1) ASKING THE ASSESSEE TO E XPLAIN THE VARIOUS DETAILS AS STATED THEREIN. THE ASSESSEE, IN HER SUBMISSION, I N RESPONSE TO QUERY NO.4 OF THE QUESTIONNAIRE, STATED THAT THE INFORMATION OF THE C ASH PAID OF RS.10,95,000/- IS WRONGLY COATED BY THE DEPARTMENT. THE ASSESSING OF FICER, THEREFORE, ISSUED LETTER TO THE DIRECTOR OF INCOME TAX (INV.)-II, MUM BAI TO PROVIDE COPY OF STATEMENT RECORDED ON OATH OF THE DIRECTOR OF HIRAN ANDANI GROUP AND OTHER PERSONS AND EVIDENCE FOUND DURING THE COURSE OF SEA RCH AGAINST THE PERSONS/PARTIES WHO HAD PURCHASED FLATS FROM HIRANA NDANI GROUP AND PAID ON MONEY ESPECIALLY IN THE CASE OF SMT. INDU JAIN (THE ASSESSEE), WIFE OF RAVINDER JAIN. 3. IN RESPONSE TO THE LETTER ISSUED BY THE ASSESSIN G OFFICER, DY. DIRECTOR OF INCOME TAX (INV.), UNIT-6(3) FILED HIS REPLY VIDE H IS LETTER NO.DDIT (INV.)/UNIT- 6(3)/HIRANANDANI/2014-15 DATED 11.03.2015. THE REL EVANT PORTION OF THE SAME WHICH HAS BEEN REPRODUCED BY THE ASSESSING OFFICER READS AS UNDER :- 3 ITA NO.682/DEL/2018 DURING THE COURSE OF SEARCH ACTION IN HIRANANDANI GROUP OF CASES, INTER ALIA, A PEN DRIVE WAS SEIZED WHEREIN EVIDENCE OF 'O N MONEY' PAYMENTS BY BUYERS/PROSPECTIVE BUYERS TO THE DEVELOPER, IN RESP ECT OF PROPERTIES BOUGHT BY THEM IN DIFFERENT PROJECTS OF HIRANANDANI GROUP WAS FOUND. THE PEN DRIVE CONTAINED DATE- WISE ENTRIES OF THE RECEIPT OF CASH FROM VARIOUS FL AT BUYERS MENTIONED AGAINST FLAT NO./SHOP NO. THIS INFORMATION WAS CORRELATED AGAINS T THE NAMES OF ACTUAL PURCHASERS OF THE FLATS/SHOPS. IT IS PERTINENT TO MENTION HERE THAT NAME OF BUYERS WHO HAVE PAID 'ON MONEY ' ARE NOT MENTIONED EXPLICITLY IN THE DAT A CONTAINED IN THE PEN DRIVE. IN ORDER TO CORRELATE THIS DATA, NAME, PAN ADDRESS OF ACTUAL PURCHASERS OF THE FLAT/SHOP NOS. MENTIONED IN PEN DRIVE WERE OBTAINED FROM THE HIRANANDANI GROUP AND A CONSOLIDATED EXCEL SHEET WAS PREPARED. THE RELEVANT PART OF THE EXCEL SHEET HAS ALREADY BEEN FORWARDED TO YOU VIDE ANNEXURE A-1 OF LETTER NO.DIT(INV.)-II/TIME BARRING/2013-14 DATED 27-03-2014. AS STATED ABOVE, THE INCRIMINATING EVIDENCE FOUND IN THIS CASE WAS A PEN DRIVE WHICH CONTAINED A 'RUN NING CASH LEDGER' OF THE CASH RECEIPT BY THE HIRANANDANI GROUP. ALL THE FIELDS AN D DESCRIPTION OF THIS LEDGER RELEVANT TO YOUR ASSESSEE HAVE ALREADY BEEN FORWARD ED TO YOU VIDE LETTER NO.DIT(INV.)-II/TIME BARRING/2013-14/ DATED 27-03-2 014. THIS ANNEXURE A-1 OF LETTER NO. DIT (INV.)-II/TIME BARRING/2013-14 DATED 27-03- 2014 IS THEREFORE THE INCRIMINATING EVIDENCE FOUND IN RESPECT OF YOUR ASS ESSEE. THE FACT OF RECEIPT OF 'ON MONEY FROM BUYERS HAS BEEN ADMITTED BY THE EMPLOYEE S AND DIRECTORS/PARTNERS OF THE CONCERNS CONTROLLED BY THE GROUP IN THEIR RESPECTIV E STATEMENTS. THESE STATEMENTS FORM PART OF THE APPRAISAL REPORT OF THE HIRANANDAN I GROUP. THE FACT THAT THE GROUP IS ACCEPTING 'ON MONEY' CAS H FROM THE FLAT PURCHASERS WAS ACCEPTED BY VARIOUS LEVELS OF EMPLOYEES WORKING IN THE GROUP. HOWEVER THE FINAL ADMISSION MADE BY THE PROMOTERS OF THE HIRANANDANI GROUP ADMITTING THE RECEIPT OF 'ON MONEY' IS CONTAINED IN THE FINAL STATEMENT OF S HRI NIRANJAN HIRANANDANI RECORDED U/S 132(4) OF THE INCOME TAX ACT. 1961. THE RELEVAN T PORTION OF THE STATEMENT DATED 14-03-2014 IS AS UNDER :- 'Q.10: FROM THE RUNNING STATEMENT OF CASH TRANSACTI ON PERTAINING TO PERIOD FROM 1-04-2006 THE LEDGER ACCOUNT OF FLAT BUYERS HA S BEEN EXTRACTED, AND MADE PART OF-THIS STATEMENT AS ANNEXURE A-I, AND IT IS BEING SHOWN TO YOU. AS PER THIS ANNEXURE THE TOTAL ON MONEY CASH RECEIPT (OVER AND ABOVE T HE REGISTERED VALUE OF THE FLATS) COMES TO RS.475,60,19,990/- KINDLY GO THROUGH IT AN D CONFIRM. ANS: I HAVE GONE THROUGH THE STATEMENT AND I CONFIR M THAT THE TOTAL ON MONEY CASH RECEIPT (OVER AND ABOVE THE REGISTERED VALUE O F THE FLATS) COMES TO RS.475,60,19,900/-. THIS ANNEXURE A-1 REFERRED TO IN THE ABOVE QUESTION CONTAINS INTER ALIA DETAILS OF YOUR ASSESSEE, AS FORWARDED TO YOU EARLIER IN TH E FORM OF EXCEL SHEET. 4. ON THE BASIS OF ABOVE INFORMATION OBTAINED FROM INVESTIGATION WING OF THE DEPARTMENT, THE ASSESSING OFFICER NOTED THAT TH E ASSESSEE HAS PAID AN AMOUNT OF RS.10,95,000/- AS ON MONEY THROUGH CRESCE NDO ASSOCIATES, A 4 ITA NO.682/DEL/2018 CONCERN OF HIRANANDANI GROUP. THE ASSESSING OFFICE R AGAIN ASKED THE ASSESSEE TO EXPLAIN THE NATURE OF SUCH TRANSACTION TO WHICH THE ASSESSEE REPEATED THE SAME WORD THAT NO CASH OF RS.10,95,000/- HAS BEEN PAID B Y THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSION MADE BY THE ASSESSEE. HE OBSERVED THAT THE PROMOTER AND DIRECTOR OF HIRANAND ANI GROUP I.E. SHRI NIRANJAN HIRANANDANI AND SHRI SURENDRA HIRANANDANI HAVE ALSO ADMITTED IN THEIR STATEMENTS RECORDED U/S 132(4) ON OATH IN WHICH THE Y HAVE STATED THAT THEY WILL SPEAK THE TRUTH AND NOTHING BUT THE TRUTH AND WERE AWARE OF THE FACT THAT ANY FALSE OR UNTRUE STATEMENT GIVEN BY THEM SHALL MAKE THEM LIABLE TO PROSECUTION UNDER THE INDIAN PENAL CODE AND UNDER THE INCOME TA X ACT, 1961. THEY HAVE ALSO CONFIRMED THAT THE TOTAL ON MONEY CASH RECEI PT (OVER AND ABOVE THE REGISTERED VALUE OF THE FLATS) COMES TO RS.475,60,1 9,000/- IN WHICH ON MONEY PAID BY THE ASSESSEE IS ALSO INCLUDED. REJECTING T HE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITIO N OF RS.10,95,000/- TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED INCOME U/S 68 OF THE I.T. ACT. 5. BEFORE THE LD. CIT(A), THE ASSESSEE MADE ELABORA TE SUBMISSION CHALLENGING THE ADDITION OF RS.10,95,000/- MADE BY THE ASSESSING OFFICER IN THE ORDER PASSED U/S 147/148 ON THE BASIS OF REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT. 6. HOWEVER, THE LD. CIT(A) ALSO UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER :- 5 ITA NO.682/DEL/2018 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND AL SO THE SUBMISSIONS MADE DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS AN UNDISPUTED FACT THAT THE APPELLANT BOOKED THE PROPERTY IN GLENDALE HIRANANDANI GARDE NS, POWI IN DECEMBER 2007. ADMITTEDLY, THE SEARCH WAS CONDUCTED AS MENTIONED I N THE ASSESSMENT ORDER ON 11.03.2014. THE TIME GAP IN CARRYING OUT SEARCH OP ERATION ACCORDING TO ME WOULD NOT VITIATE EVIDENTIARY VALUE OF THE MATERIAL UNEAR THED DURING THE COURSE OF SEARCH. AS CLARIFIED BY THE INVESTIGATION WING, A PEN DRIVE WAS SEIZED DURING THE COURSE OF SEARCH WHICH CONTAINED THE DATE WISE INFORMATION OF ON MONEY RECEIVED IN CASH AGAINST THE PROPERTIES BOOKED BY VARIOUS INVESTORS/ BUYERS. EVEN IF NO NAME WAS MENTIONED THEREIN, THE FACT REMAINS THAT THE PROPER TY MENTIONED THEREIN, WAS AS A MATTER OF FACT, BOOKED BY THE APPELLANT AND THE APP ELLANT HAS NOT DISPUTED THAT. CONSIDERING THAT THE INCRIMINATING EVIDENCE COLLECT ED BY THE INVESTIGATION WING IN THE FORM OF PEN DRIVE CLEARLY SHOWED THAT ON MONEY OF R S.10,95,000/- WAS PAID ON 20.02.2007 AND THAT THE EMPLOYEES AT VARIOUS LEVELS OF HIRANANDANI GROUP, AND ALSO ITS PROMOTER SH. NIRANJAN HIRANANDANI ADMITTED THE RECEIPT OF CASH FROM FLAT/SHOP BUYERS IN RESPECT OF THE PROPERTIES BOOKED IN THEIR STATEMENTS RECORDED AND THE FACT THAT THE APPELLANT DID BOOK THE SAID PROPERTY WHICH WAS MENTIONED IN THE PEN DRIVE SEIZED, THE ADDITION OF RS.10,95,000/- MADE BY THE A.O. IS HEREBY CONFIRMED. 7. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT INFORMATION OF REASSESSMENT PROCEEDING U/S 147-151 IS VOID AB INITIO BEING CONTRARY TO THE LEGAL PROCEDURE PRESCRIBED BY THE ACT. 2. THAT THE ADDITION MADE BY THE A.O. AND CONFIRMED BY THE CIT(A) IS ALSO ILLEGAL AS NO MATERIAL WHATSOEVER RELIED UPON BY THE A.O. W AS EVER CONFRONTED TO THE APPELLANT AND THEREFORE THE SAME CANNOT BE TREATED AS EVIDENCE AGAINST THE APPELLANT FOR MAKING THE IMPUGNED ADDITION. THE APPELLANT CRAVES TO ADD, OR AMEND THE GROUND OF APPEALS IF REQUIRED AND NECESSARY. 8. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS. REFERRING TO THE FOL LOWING DECISIONS, HE SUBMITTED THAT THE REASSESSMENT ON THE BASIS OF INF ORMATION RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT AND RECORDING OF REASONS WITHOUT INDEPENDENT APPLICATION OF MIND BY THE ASSESSING OF FICER AND WITHOUT TANGIBLE MATERIAL IS INVALID :- 6 ITA NO.682/DEL/2018 (I) PCIT VS. RMG POLYVINYL (I) LTD., 396 ITR 5. (II) PCIT VS. MEENAKSHI OVERSEAS (P.) LTD., 395 IT R 677. (III) SIGNATURE HOTELS (P.) LTD. VS. ITO, 338 ITR 51. (IV) CIT VS. SFIL STOCK BROKING LTD., 325 ITR 285. (V) INDIA TERMINAL CONNECTOR SYSTEMS LTD. VS. DCIT , 52 SOT 13. 9. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT THE JOINT COMMISSIONER OF INCOME TAX IN A MECHANICAL MANNER H AS GIVEN APPROVAL FOR ISSUE OF NOTICE U/S 151(2) AND THERE IS NO INDEPEND ENT APPLICATION OF MIND. THEREFORE, SUCH REASSESSMENT IS INVALID. FOR THE A BOVE PROPOSITION, HE RELIED ON THE FOLLOWING DECISIONS :- (I) UNITED ELECTRICAL CO. (P.) LTD. VS. CIT, 258 IT R 317. (II) ITO VS. M/S OBSERVER INVESTMENT FINANCE PVT. L TD., ITA NO.1185 & 1186/DEL/2009, ORDER DATED 24.02.2016. (III) ITO VS. M/S DIRECT SALES (P) LTD., ITA NO.354 5/DEL/2010, ORDER DATED 25.02.2015. 10. HE SUBMITTED THAT DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSEE WAS NOT ALLOWED TO CROSS-EXAMINE THE WITNE SSES ALTHOUGH THE STATEMENTS OF THOSE WITNESSES ARE THE BASIS OF THE IMPUGNED ADDITION. THUS, THE PRINCIPLE OF NATURAL JUSTICE HAS BEEN VIOLATED. RE LYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE REPORTED IN 62 TAXMANN.COM 3, HE SUBMITTED THAT NOT ALLOWING THE ASSESSEE TO CROSS-EXAMINE THE WITNESS BY ADJUDICATING AUTHORITY THOUGH THE STATEMENT OF THOSE WITNESSES WERE MADE ON THE BASIS OF IMPUGNED ADDITION, THE SERIOUS FLAW WHICH MAKES ORDER NULLITY INASMUCH AS IT AMOUNTS TO VIOLATION OF PRINCIPLES OF 7 ITA NO.682/DEL/2018 NATURAL JUSTICE. REFERRING TO VARIOUS OTHER DECISI ONS HE SUBMITTED THAT NO ADDITION U/S 69 CAN BE MADE IN THE CASE OF THE ASSE SSEE ON THE BASIS OF DOCUMENTS BEING FOUND FROM THE PREMISES OF THIRD PA RTY WHERE NEITHER THE NAME OF THE ASSESSEE WAS MENTIONED NOR ANY DOCUMENT WAS FOUND EVIDENCING FACT THAT THE ASSESSEE HAD PAID ANY CASH AS ON MONEY TO THE S AID PARTY FOR PURCHASE OF ANY PROPERTY/FLAT. REFERRING TO THE REPORT OF THE INVE STIGATION WING OF THE DEPARTMENT, WHICH HAS BEEN REPRODUCED BY THE ASSESS ING OFFICER IN THE BODY OF THE ASSESSMENT ORDER, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE NAME OF THE ASSESSEE NOWHERE APPEARS IN THE SAID LIST. 11. SO FAR AS MERIT OF THE CASE IS CONCERNED, LD. C OUNSEL FOR THE ASSESSEE REFERRING TO THE DECISION OF THE MUMBAI BENCH OF TH E TRIBUNAL IN THE CASE OF ANIL JAGGI VS. ACIT REPORTED IN 89 TAXMANN.COM 266 SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS DELETED TH E ADDITION MADE BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A) ON T HE BASIS OF THE SAME PEN DRIVE. HE ALSO REFERRED TO THE FOLLOWING DECISIONS WHERE UNDER IDENTICAL CIRCUMSTANCES SUCH ADDITION HAS BEEN DELETED BY THE TRIBUNAL :- (I) SHRI SACHINKUMAR SURYA VS. ITO, ITA NO.6237/MU M/2016 DATED 25.07.2017. (II) ITO VS. SHRI NIKHIL VINOD AGGARWAL, ITA NO.257 4/MUM/2017 DATED 13.10.2017. 8 ITA NO.682/DEL/2018 12. HE ACCORDINGLY SUBMITTED THAT BOTH LEGALLY AS W ELL AS FACTUALLY THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE LD. CIT(A) IS NOT IN ACCORDANCE WITH LAW. 13. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A). HE SUBMITTED THAT THE PROMOTERS OF HIRANANDANI GROUP I.E. SHRI NIRANJAN HIRANANDANI AN D SHRI SURENDRA HIRANDANI HAVE ADMITTED IN THEIR STATEMENTS RECORDED U/S 132( 4) THAT THEY HAVE RECEIVED ON MONEY ON ACCOUNT OF FLATS. THE ASSESSEE HAS PURCHA SED THE FLAT IN GLENDALE BUILDING AND HAS PAID AN AMOUNT OF RS.10,95,000/- T HROUGH CRESENCO ASSOCIATES, A CONCERN OF HIRANANDANI GROUP. THEREF ORE, ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) S HOULD BE UPHELD. 14. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I HAVE CONSID ERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND ON THE BASIS OF REPORT OF THE INVESTIGATION WING OF THE DEPARTMENT THAT ASSESSEE HAS PAID ON MONEY OF RS.10 ,95,000/- TOWARDS PURCHASE OF FLAT BEARING FLAT NO.1001 IN GLENDALE B UILDING THROUGH CRESENCO ASSOCIATES, A CONCERN OF HIRANANDANI GROUP, THE ASS ESSING OFFICER REOPENED THE ASSESSMENT U/S 148 AND THEREAFTER MADE ADDITION OF THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE LD. CIT(A). THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER IS THE CONTE NTS OF A PEN DRIVE WHICH CONTAINED DATE-WISE ENTRY OF RECEIVING CASH ON VARI OUS FLATS MENTIONING 9 ITA NO.682/DEL/2018 FLATS/SHOP-WISE NUMBER. NEITHER THE NAME OF THE BU YERS NOR THE AMOUNT OF CASH OVER AND ABOVE THE REGISTERED VALUE OF THE FLATS PA ID BY INDIVIDUAL BUYERS ARE MENTIONED IN THE DATA CONTAINED IN THE PEN DRIVE. I FIND IDENTICAL ISSUE HAD COME UP BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ANIL JAGGI (SUPRA) WHERE THE TRIBUNAL UNDER IDENTICAL CIRCUMST ANCES HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE LD. CIT(A) BY 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 PURCH ASE OF FLATS FROM M/S LAKEVIEW DEVELOPERS. WE HAVE PERUSED THE FACTS OF THE CASE A ND 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 LD. A.R TO DRIVE HOME HI S 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 GENESIS OF THE CONCLUS ION 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 HAVE PERUSED T HE PRINT OUT OF THE PEN DRIVE (PAGE 42 OF APB) AND FIND OURSELVES TO BE IN AGREEM ENT WITH THE VIEW OF THE LD 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 DETAILS OF THE PROPERTY PURCHASED BY HIM, VIZ. FLAT NO.2501 IN 'SOMERSET' BUILDING FR OM 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 M ATERIAL 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 SOURCE FROM WHERE THE INFORMATION WAS RECEIVED IN THE PEN DRIVE ALSO REMAINS A MYSTERY TILL DATE. WE FIND THAT SH. NIRANJAN HIRANA NDANI 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 EV IDENCE THAT THE ASSESSEE HAD PAID ANY CASH TOWARDS PURCHASE OF FLAT. WE HAVE DELIBERA TED ON THE FACT THAT SH. NIRANJAN HIRANANDANI IN HIS STATEMENT RECORDED ON OATH IN TH E COURSE OF THE SEARCH & SEIZURE PROCEEDINGS HAD CONFIRMED THAT THE AMOUNTS AGGREGAT ING TO RS. 475.60 CRORE RECORDED IN THE PEN DRIVE WERE THE ON-MONEY RECEIVE D ON SALE OF FLATS, WHICH WAS 10 ITA NO.682/DEL/2018 OFFERED AS ADDITIONAL INCOME UNDER SEC. 132(4) AND THEREAFTER OFFERED AS SUCH FOR TAX IN THE PETITION FILED BEFORE THE SETTLEMENT COMMISS ION. WE ARE OF THE CONSIDERED VIEW THAT THERE IS SUBSTANTIAL FORCE IN THE CONTENTION O F THE LD. A.R THAT MERE ADMISSION OF THE AMOUNTS RECORDED IN THE PEN DRIVE AS THE ADDITI ONAL INCOME BY SH. NIRANJAN HIRANANDANI, FALLING SHORT OF ANY SUCH MATERIAL WHI CH WOULD INEXTRICABLY EVIDENCE PAYMENT OF 'ON MONEY' BY THE ASSESSEE WOULD NOT LEA D TO DRAWING OF ADVERSE INFERENCES AS REGARDS THE INVESTMENT MADE BY THE AS SESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION. WE RATHER HOLD A STRO NG CONVICTION THAT THE VERY FACT THAT THE CONSIDERATION PAID BY THE ASSESSEE FOR PUR CHASE OF THE PROPERTY UNDER CONSIDERATION WHEN PITTED AGAINST THE MARKET VALUE FIXED BY THE STAMP VALUATION AUTHORITY IS FOUND TO BE SUBSTANTIALLY HIGH, FURTHE R FORTIFIES THE VERACITY OF THE CLAIM OF THE ASSESSEE THAT HIS INVESTMENT MADE TOWARDS PURCH ASE OF THE PROPERTY UNDER CONSIDERATION WAS WELL IN ORDER. WE ARE OF THE CONS IDERED VIEW THAT THOUGH THE MATERIAL ACTED UPON BY THE DEPARTMENT FOR DRAWING O F ADVERSE INFERENCES AS REGARDS PAYMENT OF 'ON MONEY' BY THE ASSESSEE FORMED A STRO NG BASIS FOR DOUBTING THE INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF THE PROPERTY UNDER CONSIDERATION, BUT THE SAME FALLING SHORT OF CLINCHING MATERIAL WH ICH WOULD HAVE IRREFUTABLY EVIDENCED THE SAID FACT, THUS, DOES NOT INSPIRE MUC H OF CONFIDENCE AS REGARDS THE WAY THEY HAVE BEEN CONSTRUED BY THE LOWER AUTHORITIES F OR DRAWING OF ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE. WE THUS ARE OF A STRO NG CONVICTION THAT AS THE MATERIAL RELIED UPON BY THE LOWER AUTHORITIES DOES NOT CORRO BORATE THE ADVERSE INFERENCES DRAWN AS REGARDS THE INVESTMENT MADE BY THE ASSESSE E, THEREFORE, THE SAME CANNOT CONCLUSIVELY FORM A BASIS FOR CONCLUDING THAT THE A SSESSEE HAD MADE PAYMENT OF 'ON MONEY' FOR PURCHASE OF THE PROPERTY UNDER CONSIDERA TION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VI EW THAT THE ADVERSE INFERENCES DRAWN BY THE A.O AS REGARDS PAYMENT OF 'ON MONEY' O F RS. 2.23 CRORE BY THE ASSESSEE FOR PURCHASE OF FLAT NO. 2501 FROM M/S LAKEVIEW DEV ELOPERS ARE BASED ON OF PREMATURE OBSERVATIONS OF THE A.O, WHICH IN THE ABS ENCE OF ANY CLINCHING EVIDENCE CANNOT BE SUSTAINED. WE THUS ARE UNABLE TO SUBSCRIB E TO THE VIEW OF THE LOWER AUTHORITIES AND SET ASIDE THE ORDER OF THE CIT(A) S USTAINING THE ADDITION OF RS. 2.23 CRORES IN THE HANDS OF THE ASSESSEE. 15. I FURTHER FIND IN THE INSTANT CASE THE ASSESSIN G OFFICER HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE WI TNESSES ON THE BASIS OF WHOSE STATEMENTS ADDITION HAS BEEN MADE. I FIND UNDER ID ENTICAL CIRCUMSTANCES THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SHRI NI KHIL VINOD AGGARWAL (SUPRA) HAS DELETED THE ADDITION WHEREIN ON THE BAS IS OF THE SAME PEN DRIVE THE ADDITION WAS MADE BY THE ASSESSING OFFICER WHICH WA S DELETED BY THE LD. 11 ITA NO.682/DEL/2018 CIT(A) AND ON APPEAL BY THE REVENUE, THE TRIBUNAL D ISMISSED THE GROUND RAISED BY THE REVENUE BY OBSERVING AS UNDER :- 11. EVEN OTHERWISE ALSO, THE ASSESSEE HAS A STRONG CASE ON MERIT AS WELL. AS EVIDENT FROM THE FACTS ON RECORD, THE ASSESSING OFF ICER HAS MADE THE ADDITION ON ACCOUNT OF ALLEGED ON-MONEY PAID BY THE ASSESSEE TO WARDS PURCHASE OF FLAT RELYING UPON THE INFORMATION OBTAINED FROM THE SEARCH OPERA TION CARRIED OUT IN THE CASE OF HIRANANDANI GROUP. FURTHER, HE HAS RELIED UPON THE STATEMENTS RECORDED FROM THE DIRECTORS AND PROMOTERS OF HIRANANDANI GROUP IN COU RSE OF SEARCH. HOWEVER, THOUGH, THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDING S, HAS REPEATEDLY REQUESTED THE ASSESSING OFFICER TO PROVIDE THE INFORMATION / ADVE RSE MATERIAL IN HIS POSSESSION, NEITHER SUCH ADVERSE MATERIAL WAS PROVIDED TO THE A SSESSEE NOR CONFRONTED TO HIM. FURTHER, THE STATEMENT RECORDED FROM THIRD PARTIES WHICH WERE RELIED UPON BY THE ASSESSING OFFICER FOR MAKING THE ADDITION WERE NEIT HER CONFRONTED TO THE ASSESSEE NOR THE ASSESSEE WAS SHRI NIKHIL VINOD AGGARWAL PERMITT ED TO CROSS-EXAMINE THE CONCERNED PERSONS. NEITHER IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS DISCUSSED IN DETAIL THE NATURE OF INFORMATION / MAT ERIAL AVAILABLE WITH HIM DIRECTLY IMPLICATING THE ASSESSEE FOR PAYING ON-MONEY FOR PU RCHASE OF FLAT NOR THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS BROUGHT ON RECORD A NY SUCH MATERIAL AS MAY BE AVAILABLE WITH THE ASSESSING OFFICER. IT IS EVIDENT FROM THE ASSESSMENT ORDER, THE ASSESSING OFFICER WITHOUT DISCLOSING ADVERSE MATERI AL / INFORMATION AVAILABLE WITH HIM TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDIN GS, HAS SIMPLY CALLED UPON THE ASSESSEE TO FURNISH THE NAME OF PERSONS WHO ACCORDI NG TO THE ASSESSING OFFICER NEGOTIATED FOR PURCHASE OF FLAT BETWEEN THE ASSESSE E AND THE BUILDER. UNLESS, THE ASSESSEE IS CONFRONTED WITH THE ADVERSE MATERIAL IN POSSESSION OF THE ASSESSING OFFICER, HE CANNOT BE EXPECTED TO REBUT THEM CONSID ERING THE FACT THAT THE FROM VERY BEGINNING THE ASSESSEE HAS CONSISTENTLY STATED THAT HE HAS NOT PAID ANY ON-MONEY OVER AND ABOVE THE DECLARED SALE CONSIDERATION. THE LEAR NED COMMISSIONER (APPEALS) WHILE DECIDING THE ISSUE HAS CLEARLY BROUGHT OUT TH E AFORESAID FACTUAL ASPECT IN HIS ORDER. WE AGREE WITH THE LEARNED COMMISSIONER (APPE ALS) THAT ONCE THE ASSESSEE HAS FURNISHED THE DETAILS OF TRANSACTIONS RELATING TO P URCHASE OF FLAT AND HAS STATED THAT HE HAS NOT PAID ON-MONEY OVER AND ABOVE THE DECLARED S ALE CONSIDERATION, BURDEN SHIFTS TO THE ASSESSING OFFICER TO FALSIFY SHRI NIKHIL VIN OD AGGARWAL ASSESSEE'S CLAIM BY BRINGING COGENT EVIDENCE ON RECORD. MERELY, REFERRI NG TO CERTAIN ADVERSE MATERIAL AND STATEMENT OF THIRD PARTIES, BUT, WITHOUT CONFRONTIN G THEM TO THE ASSESSEE THE ASSESSING OFFICER CANNOT MAKE THE ADDITION. IN VIEW OF THE AF ORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) IN DELETING THE ADDITION. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED COM MISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 16. THE VARIOUS OTHER DECISIONS RELIED ON BY THE LD . COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK ALSO SUPPORTS THE CASE OF THE ASSESS EE. IN VIEW OF THE ABOVE 12 ITA NO.682/DEL/2018 DISCUSSION, I HOLD THAT THE LD. CIT(A) IS NOT JUSTI FIED IN SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFICER. I, THEREFORE, SET-A SIDE THE ORDER OF THE LD. CIT(A) AND DIRECT TO THE ASSESSING OFFICER TO DELET E THE ADDITION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH SEPTEMBER, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 17-09-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI