VIJAY GRIHANIRMAN P.LTD, MUMBAI V. ACIT CEN CIR 15 & 16, MUMBAI

ITA 6851/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2971 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI S RAHEJA; BHUMIKA VORA
• Keywords: Unexplained investment; Search and seizure; Period of limitation; Validity of assessment; Prejudicial to interest
• Section: 143(3); 153A; 147; 131; 148; 263; 132; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH , MUMBAI BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER . ITA. NO S . 1029 & 2878 / M UM /20 1 3 (ASSESSMENT YEAR S : 2 0 0 1 - 0 2 & 2003 - 04 ) DY. COMMI SSIONER OF INCOME TAX, CENTRAL CIR. 15 & 16, MUMBAI APPELLANT VS. M/S. VIJAY GRIHNIRMAN PVT. LTD., 1, TARLIKA, 216, SIR BHALCHANDRA ROAD, MATUNGA, MUMBAI 400 019 RESPONDENT & ITA. NO S . 1137 TO 113 9 , 2783 TO 2790 & 6851 /MUM/201 3 (ASSESSMENT YEAR S : 2000 - 01 TO 2002 - 03, 2003 - 04 TO 2007 - 08 & 2010 - 11 RESPECTIVELY ) M/S. VIJAY GRIHNIRMAN PVT. LTD., 205, MARINE CHAMBERS, 43, NEW MARINE LINES, MUMBAI 400 020 APPELLANT VS. ACIT, CENTRAL CIRCLE - 15 & 16, ROOM NO.401, AAYKAR BHAVAN, M. K. ROAD, MUMBAI 400 020 RESPONDENT PAN: AAAC V2806N ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 2 / BY REVENUE : SHRI G. M. DOSS , CIT D .R. / BY ASSESSEE : SHRI HARI S. RAHEJA , A .R. & BHUMIKA VORA / DATE OF HEARING : 31 .0 8 .201 6 / DATE OF PRONOUNCEMENT : 14 . 0 9 .201 6 ORDER PER BENCH THESE FOURTEEN APPEALS , TWO BY REVENUE AND TWELVE BY A SSESSEE ARISING FROM RESPECTIVE ORDER S OF C OMMISSIONER OF I NCOME T AX (A PPEALS ) - 39, MUMBAI . SINCE, ALL APPEALS PERTAIN TO SAME ASSESSEE AND ON MOSTLY SIMILAR ISSUE , SO T HEY ARE BEING DISPOSED OF BY COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 1029 /MUM/201 3 FOR A.Y. 20 0 1 - 0 2 , REVENU E HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,02 ,00,000/ - IGNORING THE FACT THAT THE SAME WAS MADE BY THE AO ON THE BASIS OF SEIZED DOCUMENT AND HAS NOT RELEVANCE WITH THE DECLARATION OF ADDITIONAL INCOME BEFORE THE INCOME TAX SETTLEMENT COMMISSION BY THE RECEIVER OF THE CASH PAYMENT VIZ., M/S. SHRUTIN BUILDERS. 2 . THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING DEDUCTION U/S.80IB(10) IGNORING THE FACT THAT THE ORDER OF THE ITAT DT.24.08.2011, WHICH HAS BEEN FOLLOWED BY THE CIT(A), HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL HAS BEE N FILED U/S.260A. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 3 3. IN ITA NO.1138/MUM/2013 FOR A.Y. 20 01 - 02 , ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. THE LD. CIT(A) ERRED IN NOT QUASHING THE ORDER PASSED BY THE A.O U/S 143(3) R.W.S 1 53C/1 53A DESPITE THE FACT THAT THE PROVISIONS OF SECTIO N 1 53C ARE NEITHER ATTRACTED NOR APPLICABLE IN VIEW OF THE PROVISO TO SUBSECTION (1) OF SECTION 153C OF THE INCOME TAX ACT 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX ERRED IN UPHOLDING THE A.O'S ACTI ON OF INVOKING PROVISIONS OF SECTION 153C WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID - AB - INITIO FOR THE WANT OF JURISDICTION ON THE GROUND THAT NO INCRIMINATING DOCUMENT/ EVIDENCE WAS FOUND AT THE PREMISES OF THE THIRD PARTY DURING THE YEAR UNDER CONSID ERATION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND III LAW THE LD. COMMISSIONER OF INCOME TAX ERRED IN CONFIRMING THE ADDITION OF RS.1,01,00,000/ - OUT OF THE ADDITION OF RS. 2,02,00,000/ - MADE BY THE LD. A.O ON ACCOUNT OF ALLEGED ON - MONEY RECEIVED BY M/S. SHRUTI BUILDERS DESPITE THE FACT THAT M/S . SHRUTI BUILDERS HAS NOT ADMITTED ANY ON M O NEY RECEIVED BY THEM FROM THE APPELLANT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2001 - 02. 4 . ASSESSEE IS A MEMBER OF VIJAY GROUP, IN WHICH CASE, SEARCH AND SEIZURE ACTION U/S.132 WAS CONDUCTED ON 22.09.2005 AT THE RESIDENTIAL PREMISES OF DIRECTORS/PARTNERS AND THE BUSINESS PREMISES OF CONCERNS BELONGING TO SAID GROUP. THE GROUP IS ENGAGED IN DEVELOPMENT OF HOUSING PROJECTS OF ASSESSEE COMPANY. DUR ING SEARCH AND SEIZURE ACTION, PREMISES OF ASSESSEE COMPANY WERE ALSO COVERED AND ACCORDINGLY PROCEEDINGS U/S.153A WERE INITIATED. IN THIS CASE , ASSESSMENT ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 4 WAS INITIALLY COMPLETED U / S. 143(3) R.W.S. 153A OF THE ACT AS PER ORDER DATED 30. 0 3.2007, ASSESSING TOTAL INCOME AT RS. 16,33,130/ - AGAINST INCOME RETURNED AT RS. 5,34,820/ - . SUBSEQUENTLY, THE COMMISSIONER OF INCOME TAX, CENTRAL - 11, MUMBAI INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT DATED 24.08.2011 ON THE GROUND THAT ASSESSMENT ORDER PASSED BY ASSES SING OFFICER U / S. 143(3) R.W.S. 153A OF THE ACT WAS ERRONEOUS SO AS TO IT WAS PREJUDICIAL TO INTEREST OF REVENUE AND ACCORDINGLY, ASSESSMENT ORDER WAS SET ASIDE . AFTER CONSIDERING THE SUBMISSIONS MADE BY AUTHORIZED REPRESENTATIVE OF ASSESSEE , ASSESSING OF FICER PASSED ORDER U / S. 143(3) R.W.S. 153A & 263 OF THE ACT AFTER DISALLOWING THE DEDUCTION U / S. 80I B(10) OF THE ACT CLAIMED BY ASSESSEE . MEANWHILE, T HE ITAT VIDE ORDER DATED 24 . 08 . 2011 QUASHED THE ORDERS PASSED BY CIT U / S. 263 OF THE ACT . 4.1 BACKGROUND OF THE CASE IS THAT SEARCH AND SEIZURE ACTION U / S. 132 OF THE ACT WAS CARRIED OUT ON (1) SHRI MAHESH M. DOSHI (2) SHRI V IMAL K. RATHI AND (3) PUSHPADEVI A. BISNANI . ASSESSING OFFICER R ECEIVED INFORMATION FROM THE DC I T, CENTRAL CIRCLE 17 & 18, MUMBAI INTER ALIA INFORMING THAT CERTAIN DOCUMENTS RELATING TO ASSESSEE WERE FOUND DURING COURSE OF SEARCH AT THE PREMISES OF SHRI MAHESH M. DOSHI, SHRI VIMAL K. RATHI AND SMT. PUSHPA BISNANI . THE SEIZED MATERIAL/ DETAILS WERE RECEIVED FROM DCIT, CC - 17 & 18, MUMBAI. TH EREAFTER ASSESSING OFFICER VIDE ORDER DATED 24.12 . 2010 PASSED U/S . 143(3) R.W.S. 153C OF THE ACT ASSESSING TOTAL INCOME AT ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 5 RS. 2,39,16,510/ - AFTER MAKING THE FOLLOWING ADDITIONS/ DISALLOWANCE: - (1) D ISALLOWANCE OF DEDUCTION OF RS. 31,81,684/ - CLAIMED BY ASSES SEE U/S . 801B(10) OF THE ACT. (2) ADDITION OF RS.2,02,00,000/ - ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT BY INVOKING PROVISIONS OF S ECTION 69B OF THE ACT ON ACCOUNT OF ON MONEY STATED TO BE RECEIVED BY M/S . SHRUTI BUILDERS FROM ASSESSEE . (3) ADDITION OF RS. 10, 98,305/ - TREATING THE SAME AS I NCOME FROM O THERS S OURCES'. 4. 2 AGGRIEVED BY ABOVE ADDITION/DISALLOWANCE MADE BY ASSESSING OFFICER, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY . 5 . FIRST ISSUE RAISED BEFORE CIT(A) WAS WITH REGARD TO LACK OF JURISDICTION . THE STAND OF ASSESSEE HAS BEEN THAT ASSESSING OFFICER ERRED IN PASSING THE IMPUGNED ORDER BY INVOKING PROVISIONS OF SECTION 153C OF THE ACT, WHICH IS ILLEGAL AND BAD IN LAW OR OTHERWISE VOID AB - INITIO FOR WANT OF JURISDICTION. 5.1 IN THIS REGARD ATTENTION WAS DRAWN TOWARDS THE ORDER OF ASSESSING OFFICER INTER ALIA IN PARAGRAPH 6 OF SAID ORDER , HE OBSERVED THAT NOTICE U / S. 153C OF THE ACT WAS ISSUED PURSUANT TO SEARCH ACTION ON (1) MAHESH M. DOSHI (2) SHRI VIMAL K. RATHI (3) SMT. PUSHPADEVI BISNANI. IN PARAGRAPRH 11 OF HIS ORDER , ASSESSING OFFICER MENTIONED THAT THERE WAS A SEARCH AND SEIZURE ACTION ON M/S. SHRUTI BUILDERS ON 30.10.2003, AND ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 6 THAT DURING THE COURSE OF SEARCH, DOCUMENTS WERE SEIZED AND CERTAIN OF THE SEIZED DOCUMENT S CONTAINED DETAILS OF CASH AMOUNT RECEIVED BY M/S. SHRUTI BUILDERS FROM THE ASSESSEE. ASSESSING OFFICER EXTRACTED THE RELEVANT PORTION OF THE SEIZED DOCUMENT WHICH IS REPRODUCED BELOW: VIJAY GRIHANIRMAN PVT. LTD. AS ON 31.01.2001 VIJAY NAGRI ANNEX RS, 9,25,00,000 SALE PERMISSION RS. 15,00,000 RS. 9,40,00,000 LESS: RECEIVED CHEQUE RS. 6,91,21, 000 RS. 2,48,79,000 LESS: RECEIVED (K) RS. 2, 02 , 00 , 000 BALANCE TO BE RECEIVED RS. 46,79,000 ASSESSING OFFICER AFTER SCRUTINY OF THE SAID EXTRACT, AND AF TER HEARING THE ASSESSEE IN THIS REGARD, HELD THAT ASSESSEE HAD MADE PAYMENT OF RS.2,02,00,000/ - IN F.Y. RELEVANT TO A.Y. 2001 - 02 AND HENCE SAME IS TO BE ADDED UNDER 69B OF THE ACT AS UNEXPLAINED INVESTMENT. ASSESSING OFFICER ALSO OBSERV ED THAT THE SAID AM OUNT HAS BEEN DISCLOSED BY M/S. SHRUTI BUILDERS BEFORE SETTLEMENT COMMISSION TOWARDS UNDISCLOSED INCOME. 5.2 CIT(A) AFTER LONG DISCUSSION HELD THAT ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IN QUESTION I N SEPARATE ASSESSMENT OR DERS. HE UPHELD THE ORDER OF ASSESSING OFFICER ON ISSUE OF VALIDITY OF SEARCH. ACCORDINGLY, THIS GROUND WAS DISMISSED. 5.3 BEFORE US, THE STAND OF ASSESSEE HAS BEEN THAT CIT(A) ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 7 ERRED IN NOT QUASHING THE ORDER PASSED BY ASSESSING OFFICER U/S.143(3) R.W.S. 153C OF THE ACT DESPITE THE FACT THAT THE PROVISIONS OF SECTION 153C ARE NEITHER ATTRACTED NOR APPLICABLE IN VIEW OF PROVISO TO SUBSECTION (1) OF SECTION 153C OF THE ACT. CIT(A) ERRED IN HOLDING THE ASSESSING OFFICERS ACTION OF INVOKING PROVISIONS OF SECTION 153C OF THE ACT WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID - AB - INITIO FOR WANT OF JURISDICTION ON THE POINT OF LIMITATION. IN THIS REGARD, LEARNED AUTHORIZED REPRESENTATIVE RELIED ON THE DECISION OF ITAT, NEW DELHI B BEN CH IN CASE OF M/S DSL PROPERTIES (P) LTD. VS. DCIT IN ITA NO.1344/DEL/2012 FOR A.Y.2004 - 05, WHEREIN TRIBUNAL HELD AS UNDER: 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. PROVISO TO SECTION 153 C READS AS UNDER: - 'PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB - SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON:].' 20. THE ABOVE PROVISO REFERS TO SECOND PROVISO TO SUB - SECTION (1) OF SECTION 153A . THAT SECTION 153A(1) AND ITS FIRST AND SECOND PROVISOS READ AS UNDER: - '153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 8 (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MA Y BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROV IDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB - SECTION] PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, SHALL ABATE:.' 21. FROM THE ABOVE, IT IS EVIDENT THAT AS PER CLAUSE (B) OF SUB - SECTION (1) OF SECTION 153A AND SECOND PROVISO, THE ASSESSING OFFICER CAN BE ISSUE NOTICE FOR ASSESSMENT OR REASSESSMENT OF TOTAL SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHIC H SEARCH IS CONDUCTED. AS PER PROVISO TO SECTION 153C , THE DATE OF SEARCH IS TO BE SUBSTITUTED BY THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. LEARNED DR HAS STATED THAT SINCE THE ASSESSING OFFICER OF THE PERSON SEARCHED AND THE ASSESSING OFFICER OF SUCH OTHER PERSON WAS THE SAME, NO HANDING OVER OR TAKING OVER OF THE DOCUMENT WAS REQUIRED. THAT SECTION 153C(1) AND ITS PROVISO HAVE TO BE READ TOGETHER IN A HARMONIOUS MANNER. WHILE INTERPRETING SECTION 153C , WE ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 9 HAVE ALREADY HELD THAT FOR INITIATING VALID JUR ISDICTION UNDER SECTION 153C , EVEN IF THE ASSESSING OFFICER OF THE PERSON SEARCHED AND THE ASSESSING OFFICER OF SUCH OTHER PERSON IS THE SAME, HE HAS TO FIRST RECORD THE SATISFACTION IN THE FILE OF THE P ERSON SEARCHED AND THEREAFTER, SUCH NOTE ALONGWITH THE SEIZED DOCUMENT/BOOKS OF ACCOUNT IS TO BE PLACED IN THE FILE OF SUCH OTHER PERSON. THE DATE ON WHICH THIS EXERCISE IS DONE WOULD BE CONSIDERED AS THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENT BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. THOUGH WHILE EXAMINING THE FACTS OF THE ASSESSEE'S CASE WE HAVE ARRIVED AT THE CONCLUSION THAT NO SUCH EXERCISE HAS BEEN PROPERLY CARRIED OUT AND THEREFORE INITIATION OF PROCEEDINGS UNDER SECTION 153C ITSELF IS INVALID, HOWEVER, SINCE BOTH THE PARTIES HAVE ARGUED THE ISSUE OF PERIOD OF LIMITATION ALSO, WE DEEM IT PROPER TO ADJUDICATE THE SAME. SINCE IN THIS CASE SATISFACTION IS RECORDED ON 21ST JUNE, 2010 AND NOTICE UNDER SECTION 153C IS ALSO ISSUED ON THE SAME DATE, THEN ONLY CONCLUSION THAT CAN BE DRAWN IS THAT THE ASSESSING OFFICER OF SUCH OTHER PERSON HAS TAKEN OVER THE POSSESSION O F SEIZED DOCUMENT ON 21ST JUNE, 2010. ACCORDINGLY, AS PER SECTION 153(1) , THE ASSESSING OFFICER CAN ISSUE THE NOTICE FOR THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED (FOR THE PURPOSE OF SECTION 153C THE DOCUMENT IS HANDED OVER) AND SIX ASSESSMENT YEARS PRECEDING SUCH ASSESSMENT YEAR. NOW, IN THIS CASE, THE PREVIOUS YEAR IN WHICH THE DOCUMENT IS HANDED OVER IS 1ST APRIL, 20 10 TO 31ST MARCH,2011 . THE AS SESSMENT YEAR WOULD BE AY 2011 - 12. SIX PRECEDING PREVIOUS YEARS AND RELEVANT ASSESSMENT YEAR WOULD BE AS UNDER: - PREVIOUS YEAR ASSESSMENT YEAR 1.4.2009 TO 31.3.2010 2010 - 11 1.4.2008 TO 31.3.2009 2009 - 10 1.4.2007 TO 31.3.2008 2008 - 09 1.4.2006 TO 31.3.2007 2007 - 08 1.4.2005 TO 31.3.2006 2006 - 07 1.4.2004 TO 31.3.2005 2005 - 06 22. THE ASSESSING OFFICER HAS ISSUED NOTICE UNDER SECTION 153C FOR AY 2004 - 05 WHICH IS CLE ARLY BARRED BY LIMITATION. THEREFORE, ISSUE OF NOTICE UNDER SECTION 153C ISSUED BY THE REVENUE CANNOT BE SUSTAINED ON BOTH THE ABOVE COUNTS, I.E., ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 10 IT IS LEGALLY NOT VALID AS CONDITIONS LAID DOWN UNDER SECTION 153C HAS NOT BEEN FULFILLED AND IT IS BARRED BY LIMITATION. IN VIEW OF THE ABOVE, WE QUASH THE NOTICE ISSUED UNDER SECTION 153C AND CONSEQUENTLY , THE ASSESSMENT COMPLETED IN PURSUANCE TO SUCH NOTICE, IS ALSO QUASHED. 23. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER ITSELF, THE ADDITIONS CHALLENGED BY THE ASSESSEE BY WAY OF OTHER GROUNDS OF APPEAL DO NOT SURVIVE, AND, THEREFORE, DO NOT REQUIRE ANY A DJUDICATION. 24. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SIMILAR VIEW HAS BEEN APPROVED BY HONBLE DELHI HIGH COURT IN CASE OF CIT VS. RRJ SECURITIES LTD. [2015] 94 CCH 0069 (DEL). IN THIS BACKGROUND, LEARNED AUTHORIZED REPRESENTATIVE SUB MITTED THAT AT THE STRENGTH , ASSESSING OFFICER HAS NO JURISDICTION FOR THE YEAR UNDER CONSIDERATION FOR INVOKING PROVISIONS OF SEC TION 153C OF THE ACT. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE DECISION OF ASSESSING OFFICER. 5. 4 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, WE FIND THAT A S DISCUSSED HEREINBEFORE, IN TERMS OF PROVISO TO SECTION 153C OF THE ACT, A REFERENCE TO THE DATE OF THE SEARCH UNDER THE SECOND PROVISO TO SECTION 153A OF THE ACT HAS TO BE CONSTRUED AS THE DATE OF HANDING OVER OF ASSETS/ DOCUMENTS BELONGING TO A SSESSEE (BEING THE PERSON OTHER THAN THE ONE SEARCHED) TO THE ASSESSING OFFICER HAVING JURISDICTION TO ASSESS THE SAID A SSESSEE. FURTHER PROCEEDINGS, BY VIRTUE OF SECTION 153C( 1) OF THE ACT, WOULD HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 11 THE DATE OF SEARCH WOULD HAVE TO BE CONSTRUED AS THE REFERENCE TO THE DATE OF RECEIVING OF BOOKS, DOCUMENTATION OR ASSETS SEIZED OR REQUISITIONED BY THE AO. I T WOULD FOLLOW THAT THE SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS/ REASSESSMENTS COULD BE MADE UNDER SECTION 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DATE OF HANDING OVER OF ASSETS/ DOCUMENTS TO THE AO OF THE ASSESSEE. IN THIS CASE, IT WOULD BE THE DATE OF RECEIVING BOOKS, DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE AO THE RECORDING OF SATISFACTION UNDER SECTION 153C OF THE ACT, I.E., 2 0. 04.2009 . IN THIS VIEW, THE ASSESSMENTS MADE IN RESPECT OF ASSESSMENT YEAR S 2001 - 02 TO 2003 - 04 WOULD BE BEYOND THE PERIOD OF SIX ASSESSMENT YEARS AS RECKONED WITH REFERENCE TO THE DATE OF RECEIVING BOOK, DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE AO OF THE SEARCHED PERSON. IT IS CONTENDED BY THE REVENUE THAT THE RELEVANT SIX AS SESSMENT YEARS WOULD BE THE ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED. IF THIS INTERPRETATION AS CANVASSED BY THE REVENUE IS ACCEPTED, IT WOULD MEAN THAT WHEREAS IN CASE OF A PERSON SEARCH ED, ASSESSMENTS IN RELATION TO SIX PREVIOUS YEARS PRECEDING THE YEAR IN WHICH THE SEARCH TAKES PLACE CAN BE REOPENED BUT IN CASE OF ANY OTHER PERSON, WHO IS NOT SEARCHED BUT HIS ASSETS ARE SEIZED FROM THE SEARCHED PERSON, THE PERIOD FOR WHICH THE ASSESSMEN TS COULD BE REOPENED WOULD BE MUCH BEYOND THE PERIOD OF SIX YEARS. THIS IS SO BECAUSE THE DATE OF HANDING OVER OF ASSETS/ DOCUMENTS OF A PERSON, OTHER THAN THE SEARCHED PERSON, TO THE ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 12 ASSESSING OFFICER WOULD BE SUBSEQUENT TO THE DATE OF THE SEARCH. THIS, I N OUR VIEW, WOULD BE CONTRARY TO THE SCHEME OF SECTION 153C(1) OF THE ACT, WHICH CONSTRUES THE DATE OF RECEIPT OF ASSETS AND DOCUMENTS BY THE ASSESSING OFFICER OF A SSESSEE (OTHER THAN ONE SEARCHED) AS THE DATE OF THE SEARCH ON THE ASSESSEE. THE RATIONALE A PPEARS TO BE THAT WHEREAS IN THE CASE OF A SEARCHED PERSON THE ASSESSING OFFICER OF THE SEARCHED PERSON ASSUMES POSSESSION OF SEIZED ASSETS/ DOCUMENTS ON SEARCH OF THE ASSESSEE; THE SEIZED ASSETS/ DOCUMENTS BELONGING TO A PERSON OTHER THAN A SEARCHED PERS ON COME INTO POSSESSION OF ASSESSING OFFICER OF THAT PERSON ONLY AFTER THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE ASSETS/ DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON. THUS, THE DATE ON WHICH THE ASSESSING OFFICER OF THE PERSON OT HER THAN THE ONE SEARCHED ASSUMES THE POSSESSION OF THE SEIZED ASSETS WOULD BE THE RELEVANT DATE FOR APPLYING THE PROVISIONS OF SECTION 153A OF THE ACT. WE, THEREFORE, ACCEPT THE CONTENTION THAT IN ANY VIEW OF THE MATTER, ASSESSMENT FOR A . Y S. 2001 - 02, 2002 - 03 & 2003 - 04 WERE OUTSIDE THE SCOPE OF SECTION 153C OF THE ACT AND THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE AN ASSESSMENT OF THE A SSESSEE'S INCOME FOR THAT YEAR. THIS VIEW IS FORTIFIED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF CIT VS . RRJ SECURITIES LTD. (SUPRA). FOLLOWING THE RATIO OF CIT VS. RRJ SECURITIES LTD. (SUPRA) IN CASE BEFORE US, THE DATE OF RECEIPT OF BOOKS OF ACCOUNT IS 20.04.2009 I.E A.Y. 2010 - 11 THIS THE NOTICE U/S 153C CAN BE ISSUED FOR THE FOLLOWING YEARS. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 13 1.4.2003 T O 31.03.2004 A .Y 2004 - 05 1.4.2004 TO 31.03.2005 A .Y 2005 - 06 1.4.2005 TO 31.03.2006 A .Y 2006 - 07 1.4.2006 TO 31.03.2007 A .Y 2007 - 08 1.4.2007 TO 31.03.2008 A .Y 2008 - 09 1.4.2008 TO 31.03.2009 A.Y 2009 - 10 1.4.2009 TO 31.3.2010 A.Y 2010 - 11 THUS IN THE GI VEN ASSESSMENT YEARS NOTICE BASED U/S . 153C OF THE ACT IS BARRED BY LIMITATION FOR THE A.YS 2001 - 02, 2002 - 03 AND 2003 - 04. THE ASSESSMENT U/S.153C OF THE ACT FOR THESE YEARS ARE QUASHED. ACCORDINGLY APPEAL S FILED BY THE ASSESSEE ARE ALLOWED ON LEGAL GROUND IN ALL THREE YEARS . THIS TAKES CARE OF CORRESPONDING APPEALS OF ASSESSEE FOR A.YS. 2001 - 02, 2002 - 03 AND REVENUES APPEAL IN A.Y. 2003 - 04. 6. NEXT ISSUE ON MERIT IS WITH REGARD TO ADDITION OF RS.2,02,00,000/ - ON ACCOUNT OF ALLEGED UNDISCLOSED CASH PAYMENT TO M/S. SHRUTI BUILDERS. ASSESSING OFFICER MADE ADDITION OF RS.2,02,00,000/ - ON ACCOUNT OF CASH PAYMENTS TO M/S. SHRUTI BUILDERS BY INVOKING PROVISIONS OF SECTION 69B OF THE ACT. IN THIS REGARD, ASSESSEE SUBMITTED THAT ASSESSEE A N D ITS SISTER CONCERN HA VE PURCHASED CERTAIN DEVELOPMENT RIGHTS AT THANE FROM M/S. SHRUTI BUILDERS FROM 1995 - 96 TO 2002. DURING COURSE OF SEARCH OF M/S. SHRUTI BUILDERS, VARIOUS DOCUMENTS WERE SEIZED AND SOME OF SEIZED MATERIAL CONTAINED DETAILS OF CASH OF RS.2,02,00,000/ - RECE IVED BY M/S. SHRUTI BUILDERS FROM ASSESSEE. ASSESSING OFFICER ISSUED SUMMONS TO SHRI VRIJLAL T. GALA, DIRECTORS OF ASSESSEE COMPANY AND HIS STATEMENT WAS RECORDED U/S.131 OF THE ACT, WHEREIN HE WAS ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 14 ASKED TO EXPLAIN THE SAME. ADVERTING TO PAGE NO.1 OF EXT RACT FROM KAVESAR FILE OF CD SEIZED FROM M/S. SHRUTI BUILDERS, ASSESSING OFFICER HELD THAT WHEN RS.2,02,00,000/ - HAS BEEN SHOWN AS VIJAY GRIHANIRMAN (P) LTD. AS ON 31.03.2001, AMOUNT HAS TO BE TAKEN TO HAVE BEEN RECEIVED IN THE YEAR ENDING 31.03.2001 I.E. F.Y. 2000 - 2001 RELEVANT TO A.Y. 2001 - 02. 6.1 THE STAND OF ASSESSEE HAS BEEN THAT ASSESSING OFFICER FAILED TO LOOK INTO CORRECT FACTS OF CASE BEFORE MAKING THE IMPUGNED ADDITION OF RS.2,02,00,000/ - . IT WAS STATE D BY ASSESSEE THAT IT IS CLEAR FROM THE ORDE R OF SETTLEMENT COMMISSION THAT THE DISCLOSURE MADE BY M/S. SHRUTI BUILDERS PERTAINED TO A.YS. 1998 - 99 TO 2000 - 01. IT WAS POINTED OUT THAT M/S. SHRUTI BUILDERS HAS NOT DECLARED ANY ADDITIONAL INCOME FOR A.Y. 2001 - 02. ASSESSEE PLACED ON RECORD COPY OF ORD ER DATED 30.08.2011 BY THE SETTLEMENT COMMISSION IN CASE OF M/S. SHRUTI BUILDERS. 6.2 CIT(A) OBSERVED THAT IN ASSESSMENT ORDER PASSED U/S.153A OF THE ACT FOR A.Y. 2000 - 01, ASSESSING OFFICER HAD MADE ADDITION OF RS.1,01,00,000/ - HOLDING THAT ASSESSEE MADE PAYMENT BY RS.1,01,00,000/ - TO M/S. SHRUTI BUILDERS DURING PREVIOUS YEAR RELEVANT TO A.Y. 2000 - 01. CIT(A) OBSERVED THAT AS PER ORDER OF SETTLEMENT COMMISSION DATED 30.08.2011 AS REFERRED IN PARA 7.4 OF SAID ORDER IN CASE OF M/S. SHRUTI BUILDER, A SUM OF R S.1,01,00,000/ - HAS BEEN OFFERED AND ACCEPTED FOR A.Y. 2000 - 01. CONSIDERING ALL THESE CIRCUMSTANCES, ADDITION OF RS.1,01,000/ - MADE FOR A.Y. 2000 - ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 15 01 U/S.153A R.W.S. 143(3) OF THE ACT HAS BEEN SUSTAINED BY CIT(A). CIT(A) CONFIRMED THE ADDITION OF RS.1,01,0 0,000/ - FOR A.Y. 2000 - 01 TAKING INTO CONSIDERATION THE DISCLOSURE OF M/S. SHRUTI BUILDERS BEFORE THE SETTLEMENT COMMISSION. IN THIS BACKGROUND, CIT(A) OBSERVED THAT WHAT IS TO BE BROUGHT TO TAX IN THE RELEVANT YEAR IS RS.1,01,00,000/ - AND ACCORDINGLY, ADD ITION TO THE EXTENT OF RS.1,01,00,000/ - WAS SUSTAINED. 6.3 SAME HAS BEEN OPPOSED ON BEHALF OF ASSESSEE INTER ALIA SUBMITTING THAT ADDITION OF RS.1,01,00,000/ - OUT OF ADDITION OF RS.2,02,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY RECEIVED BY M/S. SHRUTI BUILD ERS DESPITE THE FACT THAT M/S. SHRUTI BUILDERS HAS NOT ADMITTED ANY ON MONEY RECEIVED BY THEM FROM ASSESSEE DURING PREVIOUS YEAR RELEVANT TO A.Y. 2001 - 02. THE CONTENTION OF ASSESSEE HAS BEEN DISCUSSED BY US WHILE WE ARE DISCUSSING JURISDICTION U/S.153C OF THE ACT VIDE PARA 5.4 OF THIS ORDER, WHICH WILL TAKE CARE OF THIS ISSUE. TH IS ISSUE HAS BEEN DISCUSSED AND DECIDED BY US VIDE PARA 53 IN ITA NO.1137/MUM/2013 OF THIS ORDER WHICH WILL TAKE CARE OF THIS ISSUE. THE SAME IS NOT BEING REPRODUCED FOR THE SAK E OF BREVITY. 7. WITHOUT PREJUDICE TO THE PRELIMINARY ISSUE OF MAINTAINABILITY OF ASSESSMENT, LET US DECIDE THE NEXT ISSUE ON MERIT WHICH IS WITH REGARD TO DISALLOWANCE OF DEDUCTION U/S.80IB(10) OF THE ACT. AS STATED ABOVE, ASSESSING OFFICER HAD GRANTED DEDUCTION U/S.80IB(10) OF THE ACT. HOWEVER, WHILE COMPLETING THE IMPUGNED ASSESSMENT, ASSESSING OFFICER DECLINED TO GRANT DEDUCTION FOR THE FOLLOWING REASONS: ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 16 (A) BUILDING NO.1 TO 13 COMMENCEMENT CERTIFICATE NO. 97064/TMC/TDD/1687 WAS ISSUED ON 04.10.1 997 BY THE THANE MUNICIPAL CORPORATION FOR BUILDINGS CONSTRUCTED ON SURVEYNO.136,137 AND 138. SINCE THE DATE OF COMMENCEMENT OF BUILD NOS. 1 TO 13 IS BEFORE 1.10.1998 DEDUCTION U/S.80IB(10) IS NOT ALLOWABLE TO THE APPELLANT. (B) AS PER RULE 18BBB IT IS M ANDATORY TO FILE SEPARATE AUDIT REPORT FOR EACH UNDERTAKING OR ENTERPRISE FOR WHICH DEDUCTION IS CLAIMED AND IT SHOULD BE ACCOMPANIED BY PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE SAID UNDERTAKING OR ENTERPRISE AS IF THE UNDERTAKING OR ENTERPRISE WERE A DISTINCT ENTITY. IN ORIGINAL ASSESSMENT, AS COMPLETED WAS THE SUBJECT MATTER OF PROCEEDINGS U/S.263 OF THE ACT. CIT, CENTRAL - II, MUMBAI INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT FOR A.Y. 2000 - 01 TO 2006 - 07 ON THE GROUND THAT ON EXAMINATION OF T HESE ORDERS, IT WAS OBSERVED THAT SAME WERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE MAINLY BECAUSE DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN ALLOWED, WHEREAS ASSESSEE HAD NOT FULFILLED ALL THE CONDITIONS. 7.1 ASSESSEE HAD FILED APPEAL AGAINS T THE ORDER PASSED U/S.263 OF THE ACT AND ITAT VIDE ORDERS IN ITA NOS. 3515 TO 3520/MUM/2009 DATED 24.08.2011 HAD QUASHED THE ORDER U/S.263 OF THE ACT. WITH REGARD TO OBJECTION THAT BUILDING NO.3 WAS COMMENCED BEFORE 01.10.1998 IN PARA 13 HAVE HELD AS UND ER: 13. THE FIRST OBJECTION RAISED BY THE COMMISSIONER IS THAT THE ACTUAL WORK IN TWO PR OJECTS VIZ. VIJAY NAGARI ANNEX - 1 (BUILDING NOS. 1 TO 3 ) AND VIJAY NAGARI ANNEX - I(BUILDING NO. 10 TO 12) COMMENCED AS PER THE ANNEXURES TO 10 CCB REPORTS ON 17/10/1998, WHEREAS PER THE COMMENCEMENT ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 17 CERTIFICATE ISSUED BY THE TMC WORK COMMENCED ON 04/10/1997 AND, THEREFORE, COMMENCEMENT SHOULD BE RECKONED ON 04/ 10 /1997. AS PER SECTION 80I B (10) THE FIRST CONDITION FOR CLAIMING DEDUCTION IS THAT THE PROJECT MUST HAVE COMMENC ED ON OR AFTER 1ST DATE OF OCTOBER, 1998. HOWEVER, AS POINTED OUT BY THE LD. COUNSEL OF THE ASSESSEE THE WORK COULD NOT START BECAUSE OF HINDRANCES AND THE SAME STARTED ONLY AFTER 17/10/1998, WHICH BECOMES CLEAR FROM THE LETTER OF THE ARCHITECT ADDRESSED T O THE TMC WHICH IS AVAILABLE AT PAGE 111 OF THE PAPER BOOK. IT WAS FURTHER POINTED OUT THAT AN ENQUIRY WAS MADE BY A.O HIMSELF THOUGH THE INSPECTOR AND THE INSPECTOR HAS CATEGORICALLY STATED THAT AC TUAL CONSTRUCTION STARTED ON 17/10/ 1998. THE RELEVANT PARA OF THE INSPECTOR'S REPORT DATED 02/ 03 / 2007 READS AS UNDER: - 'IN THIS PROJECT THE ASSESSEE HAD CONSTRUCTED SEVEN BUILDINGS. THE AREA OF LAND UTILIZED FOR THIS PROJECT IS 2.93 ACRES AND THE BUILT - UP AREA OF FLATS CONSTRUCTED ON EACH OF THE THESE BUILDING A RE RANGING FROM 456 TO 664 PER SQ.FT.. THE DATE OF COMMENCEMENT AND DATE OF COMPLETION OF THIS PROJECT WAS 17/10/1998 AND 13/ 10 /2001, 13/ 12 / 2001 & 06/ 02 / 2002 RESPECTIVELY. THE DOCUMENTARY PROOF OF MUNICIPAL APPROVED PLAN, ARCHITECT, CERTIFICATE, AND COMPLE TION CERTIFICATE ETC, ARE OBTAINED AND PLACED ON RECORD.' 7 . 2 FROM THIS, CIT(A) OBSERVED THAT ON THE BASIS OF ENQUIRY BY ASSESSING OFFICER IT HAD BEEN ASCERTAINED THAT ACTUAL CONSTRUCTION HAD COMMENCED ONLY AFTER 17.10.1998. THUS, ALTHOUGH ASSESSEE HAD RE CEIVED COMMENCEMENT CERTIFICATE PRIOR TO 0 1.10.1998, ACTUAL CONSTRUCTION COMMENCED W.E.F 17.10.1998; WHICH HAD BEEN CONFIRMED BY THE INSPECTION ON SITE VERIFICATION. WITH REFERENCE TO FILING OF AUDIT REPORT, IT WAS SUBMITTED THAT FOR A.Y. 2000 - 01 TO 2002 - 0 3, IT WAS NOT MANDATORY TO FILE AUDIT REPORT SEPARATELY FOR EACH UNDERTAKING OR ENTERPRISE. IN THIS REGARD, ITAT OBSERVED AS UNDER: ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 18 IN ANY CASE, WE FURTHER FIND THAT RULE 18BBB WAS BROUGHT ON STATUTE FOR THE FIRST TIME W.E.F. 6 - 9 - 2002 WHICH MEANS ITS RE QUIREMENT WAS NOT APPLICABLE IN A.Y. 2000 - 01. THUS, THE SAID OBJECTION WAS ALSO NOT FOUND TENABLE. THE AMENDMENT INTRODUCED BY THE FINANCE ACT, 2002 IS APPLICABLE W.E.F. 01.04.2003 I.E. A.Y. 2003 - 04 AND ONWARDS. 7.3 HENCE, IT WAS RIGHTLY HELD BY CIT(A ) THAT THE CLAIM FOR DEDUCTION U/S.80IB(10) OF THE ACT IS ALLOWABLE. MOREOVER, THIS ISSUE HAS ALSO BEEN DEALT BY US IN A.Y.2010 - 11 IN PARA 47 OF THIS ORDER. SAME IS NOT BEING REPEATED HERE FOR THE SAKE OF BREVITY. IN VIEW OF THE ABOVE, THE ORDER OF CI T(A) NEEDS NO INTERFERENCE FROM OUR SIDE WHO RIGHTLY GRANTED RELIEF TO ASSESSEE . WE UPHOLD THE SAME. 8 . AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSED AND THAT OF ASSESSEE FOR A.Y.2001 - 0 2 IS ALLOWED. 9 . IN ITA NO.1139/MUM/2013 FOR A.Y. 2002 - 03, ASSES SEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. THE LD. CIT(A) ERRED IN NOT QUASHING THE ORDER PASSED BY THE A.O U/S 143(3) R.W.S 1 53C/1 53A DESPITE THE FACT THAT THE PROVISIONS OF SECTION 1 53C ARE NEITHER ATTRACTED NOR APPLICABLE IN VIEW OF THE PROVISO TO SUBSECTION (1) OF SECTION 153C OF THE INCOME TAX ACT 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX ERRED IN UPHOLDING THE A.O'S ACTION OF INVOKING PROVISIONS OF SECTION 153C WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID - AB - INITIO FOR THE WANT OF JURISDICTION ON THE GROUND THAT NO INCRIMINATING DOCUMENT/ EVIDENCE WAS FOUND ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 19 AT THE PREMISES OF THE THIRD PARTY DURING THE YEAR UNDER CONSIDERATION. 1 0 . ISSUE IN THIS APPEAL IS WITH REGARD TO VALIDITY OF ORDE R U/S.143(3) R.W.S. 153C/153A OF THE ACT. SIMILAR ISSUE AROSE IN 2001 - 02, WHICH HAS BEEN DISCUSSED AND DECIDED BY US IN PARA 5 OF THIS ORDER WHERE BY WE HAVE ALLOWED ASSESSEES APPEAL ON PRELIMINARY ISSUE . FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING , WE DECIDE THIS ISSUE IN FAVOUR OF ASSESSEE. 11 . IN ITA NO.2783/MUM/2013 FOR A.Y. 2003 - 04, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CO NFIRMING THE ADDITION OF RS.14,50,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 12 . ISSUE IN THIS APPEAL IS WITH REGARD TO ADDITION OF RS.14,50,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES . IN THIS CASE, WHILE COMP LETING ASSESSMENT, ASSESSING OFFICER HAD RE - COMPUTED THE DEDUCTION CLAIMED U/S.80IB(10) OF THE ACT AND BROUGHT TO TAX A SUM OF RS.14,50,000/ - AS UNDISCLOSED INCOME FROM SALE O F ROW HOUSES AND DISALLOWED A SUM OF RS.15000/ - OUT OF STAFF WELFARE EXPENSES. H OWEVER, SAID ASSESSMENT ORDER WAS SET ASIDE U/S.263 OF THE ACT BY CIT VIDE ORDER DATED 25.03.2009. SAID ORDER U/S.263 OF THE ACT WAS CHALLENGED BEFORE ITAT AND ITAT VIDE ORDER DATED 24.08.2011 SET ASIDE THE ORDER OF REVISION PASSED BY CIT U/S.263 OF THE A CT. THEREFORE, THE AMOUNT AS RAISED BY ASSESSEE AGAINST THE ORIGINAL ASSESSMENT ORDER NOW ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 20 SURVIVED AND ACCORDINGLY TAKEN UP FOR ADJUDICATION. IN FACT, DURING PRE - SEARCH ENQUIRIES , IT WAS DISCOVERED THAT THE PURCHASE CONSIDERATION FOR SALE OF ROW HOUSES C ONSTRUCTED BY ASSESSEE HAD A CASH COMPONENT. DURING A CONVERSATION BETWEEN THE SALES MANAGER OF VIJAY GROUP AND THE ADIT OF THE DEPARTMENT, WHICH WAS TAPED, IT TRANSPIRED T HAT FOR A ROW HOUSE COSTING RS. 45,00,000/ - , THE CASH COMPONENT WOULD BE RS. 15,00,000 / - AND THAT THE AGREEMENT VALUE WOULD BE RS. 30,00,000/ - . HAVING REGARD TO THE SAID CONVERSATION, ASSESSEE WAS REQUIRED TO GIVE DETAILS OF CASH RECEIVED ON SALE OF EACH AND EVERY ROW HOUSE. WHILE CONFRONTED WITH THE SAME, ASSESSEE NOT ONLY DISOWNED THE SAI D CONVERSATION BUT DENIED RECEIPT OF ANY CASH, ON THE GROUND THAT NO EVIDENCE WAS FOUND IN SUPPORT OF CONVERSATION AS RECORDED. THE ASSESSING OFFICER , HOWEVER , DECLINED TO ACCEPT THE SAID CONTENTION. HE TOOK INTO CONSIDERATION THE FACT THAT ASSESSEE HAD S OLD 11 ROW HOUSES FOR THE PERIOD 19.10.2002 TO 15.7.2005 FOR TOTAL AGREEMENT VALUE OF RS. 3,03,00,000/ - . ASSESSING OFFICER HAS STATED THAT DURING THE COURSE OF ENQUIRY CONDUCTED, IT WAS DETECTED THAT CASH COMPONENT IN THE SALE OF ROW HOUSE W OULD BE RS. 15 LA KHS AND AGREEMENT VALUE RS. 30 LAKHS. AFTER TAKING INTO ACCOUNT THE MARKET TRENDS, AS PER DISCUSSIO N IN PARAGRAPHS 6.7 AND 6.8 OF ASSESSMENT ORDER , ASSESSING OFFICER COMPUTED THE CASH COMPONENT FOR SALE OF ROW HOUSES SHOWN AS UNDER: A.Y. NO. OF ROW HOUSES SOLD AGREEMENT VALUE CASH COMPONENT PER RH TOTAL CASH COMPONENT 2003 - 04 2 50,00,000 7,25,000 14,50,000 2004 - 05 6 1,65,00,000 8,50,000 51,00,000 2005 - 06 2 58,00,000 9,50,000 19,00,000 ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 21 2006 - 07 1 30,00,000 10,00,000 10,00,000 3,03,00,000 94,50,000 A CCORDING LY, ASSESSING OFFICER ADDED RS. 14,50,000/ - AS CASH COMPONENT ON THE SALE OF ROW HOUSES FOR THE YEAR UNDER CONSIDERATION, AS UNDISCLOSED INCOME. 1 2 .1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN CIT(A) REJECTED THE CONTENTION OF ASSESSEE AND CONFIRMED THE ADDITION. 1 2 .2 SAME HAS BEEN OPPOSED ON BEHALF OF ASSESSEE INTER ALIA SUBMITTING THAT COMMISSIONER OF INCOME TAX ERRED CONFIRMING THE ADDITION OF RS.14,50,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES . ON OTHE R HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A). 1 2 .3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, WE FIND THAT T HE ONLY GROUND OF THIS APPEAL IS REGARDING THE ADDITION ON ACCOUNT OF ALLEGED RECEIPT OF THE AMOUNT IN CASH ON ACCOUNT OF SALE OF ROW HOUSES OVER AND ABOVE THE AGREEMENT VALUE. THE FACTS ARE THAT ASSESSE HAS CONSTRUCTED 12 ROW HOUSES IN THE PROJECT VIJAY GARDEN' AT THANE. IT WAS STATED BY THE ASSESSING OFFICER THAT IN PRE SEARCH INQUIRIES T HE DDIT UNIT - VIII(2) MADE A PURCHASE INQUIRY FROM ONE MR. PRASHANT KATKAR, SALES MANAGER IN THE OFFICE OF THE APPELLANT. IT WAS FURTHER STATED THAT THE CONVERSATION WAS TAPE RECORDED. IN THE SAID INQUIRY IT IS ALLEGED THAT MR. KATKAR HAD STATED THAT THE T OTAL VALUE OF THE ROW HOUSE WAS RS. 45 LACS ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 22 AND THE AGREEMENT VALUE WOULD BE RS. 30 LACS & BALANCE WOULD BE PAID IN CASH. ACCORDINGLY , ASSESSING OFFICER PROCEEDED TO MAKE ADDITION ON THAT BASIS AND ASSUMED THAT THE APPELLANT RECEIVED THE CASH AMOUNT OVER & ABOVE THE AGREEMENT VALUE AND ACCORDINGLY MADE ADDITION. I N THE COURSE OF ACTUAL SEARCH OPERATIONS MR. PRASHANT KATKAR DENIED TO HAVE HAD ANY SUCH CONVERSATION IN HIS STATEMENT RECORDED U/S.132(4) AND THEREAFTER FURTHER DENIED IN THE STATEMENT RECORDED B EFORE THE ASSESSING OFFICER ON 26.02.2007 U/S.131 OF THE ACT . IN THIS REGARD AT THE OUTSET WE CATE GO RICALLY DENY RECEIPT OF ANY AMOUNT IN CASH TOWARDS THE SALE OF ROW HOUSES. IT IS FURTHER SUBMITTED THAT DURING THE COURSE OF SEARCH ACTION ITSELF, SHRI PRA SHANT KATKAR HAD DENIED OF ANY SUCH TALK HELD BETWEEN HIM AND SHRI K.R. I YENGAR. DURING THE COURSE OF HIS STATEMENT RECORDED U/S.132(4) AND FURTHER DURING THE COURSE OF HIS STATEMENT U/S.131 ON 26 - 02 - 2007, SHRI PRASHANT KATKAR HAD CATEGORICALLY DENIED OF A NY SUCH CONVERSATION AND FURTHER DENIED TO HAVE STATED ANY SUCH THINGS REGARDING AGREEMENT VALUE AND PAYMENT OF PART CONSIDERATION IN CASH. DURING COURSE OF SEARCH ITSELF MR. KATKER STATED THAT THE VOICE RECORDED BY MR. I YENGER. IS NOT HIS VOICE. IN HIS ST ATEMENT HE HAD FURTHER STATED THAT HE NEVER MET MR. IYENGER. THEREFORE NO RELIANCE CAN BE PLACED ON THE ALLEGED VOICE RECORDED CONVERSATION BETWEEN MR. IYENGER AND MR. KATKER. EVEN IN THE COURSE OF RECORDING OF STATEMENT U/S.131 ON 26 - 02 - 2007 MR. KATKER RE CONFIRMED HIS STATEMENT RECORDED U/S.132(4) AND REPEATEDLY DENIED THE ALLEGED CONVERSATION AS WELL AS HIS VOICE. MR. KATKER WAS LOOKING AFTER ATTENDING THE CUSTOMER ENQUIRIES. HE WAS NOT AT ALL AUTHORIZED TO FINALIZE ANY DEAL FOR SALE OF ROW HOUSE AND DECI DING THE SALE CONSIDERATION. THIS FACT HAS ALSO BEEN CONFIRMED BY HIM IN HIS STATEMENT RECORDED ON 26 TH DAY OF FEBRUARY 2007 BEFORE THE INVESTIGATION OFFICERS. THE A.R OF THE APPELLANT STATED THAT THEY HAVE NEVER INDULGED IN ANY ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 23 CASH TRANSACTIONS IN CONNEC TION WITH THE SALE OF ANY ROW HOUSE. WHATEVER WAS RECEIVED HAS BEEN DULY RECORDED IN THE BOOKS. NO AMOUNT WAS RECEIVED IN CASH OVER AND ABOVE THE AGREEMENT VALUE. IN VIEW OF THE ABOVE NO COGNIZANCE OF THE ALLEGED VOICE RECORDED CONVERSATION CAN BE TAKEN IN OUR CASE AND QUESTION OF ANY ADDITION FOR ALLEGED CASH RECEIPTS ON ACCOUNT OF SALE OF FLATS/ROWS HOUSES . WITHOUT PREJUDICE TO THE ABOVE IT WAS SUBMITTED THAT DURING THE COURSE OF SEARCH ACTION, NO DOCUMENTS OR ANY INCRIMINATING MATERIAL WAS FOUND TO SUBS TANTIATE THE ALLEGATION OF ANY CASH COMPONENT/RECEIPTS TOWARDS SALE OF FLATS/ROW HOUSES IN THE SALE CONSIDERATION AS HAS BEEN POINTED OUT. IT IS A SETTLED PROPOSITION THAT ANY ASSESSMENT/ADDITIONS SHOULD HAVE A NEXUS TO THE MATERIAL AVAILABLE AND SUPPORTED BY THE DOCUMENTARY EVIDENCE. IN ABSENCE OF ANY EVIDENCE ADDITION CAN NOT BE MADE MERELY ON HEARSAY, SUSPICIONS, SURMISES AND CONJECTURES. IN OUR CASE NO EVIDENCE OF ANY NATURE WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH OR THEREAFTER TO SUBSTANTIATE T HE PROPOSED ADDITION ON ACCOUNT OF ALLEGED CASH RECEIPTS. THE SOLE BASIS FOR THIS PROPOSED ADDITION IS THE ALLEGED VOICE RECORDING OF ONE STAFF PERSON AND WHICH IS TOTALLY FALSE AS THE PERSON CONCERNED HAS REPEATEDLY DISOWNED THE SAME. AS SUCH THIS RECORDI NG CANNOT BE MADE A BASIS FOR ADDITION WITHOUT CORROBORATING MATERIAL. IT MAY BE NOTED THAT ANY SUCH UNSUBSTANTIATED VOICE RECORDING IS NOT ADMISSIBLE EVIDENCE. MORE SO WHEN NOT AN IOTA OF EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH TO SUPPORT ANY OF TH E ALLEGATIONS MADE ON THE BASIS OF THE ALLEGED CONVERSATION RECORDED. IN CONNECTION WITH THE ROW HOUSES SALE, IT IS SUBMITTED THAT TOTAL 12 ROW HOUSES WERE CONSTRUCTED BY US AND OUT OF THE SAID 12 ROW HOUSES, 11 HAVE BEEN SOLD. THE DETAILS OF THE SAID ROW HOUSES AND THEIR SALE CONSIDERATION HAVE BEEN ALREADY SUBMITTED. THE COPIES OF THE AGREEMENTS AND DETAILS OF THE PAYMENTS RECEIVED ARE PRODUCED HEREWITH FOR YOUR VERIFICATION. THE PROFIT FROM THE SALE OF ROW HOUSES HAS BEEN OFFERED TO TAX IN THE RESPECTIVE ASSESSMENT YEARS. IN VIEW OF THE ABOVE IT IS ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 24 SUBMITTED THAT NO RELIANCE BE PLACED ON THE ABOVE REFERRED VOICE RECORDING AND THEREFORE NO ADDITIONS BE MADE'. 12.4 THE PRE - SEARCH STATEMENT RECORDED BY REVENUE OFFICER HAS BEEN RELIED BY ASSESSING OFFICER WH ILE MAKING ADDITION IN QUESTION. ADDITION IN PROVISION OF SECTION 153A OF THE ACT CAN BE MADE ONLY ON THE BASIS OF SEARCH MATERIAL FOUND DURING COURSE OF SEARCH. NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING SEARCH PROCEEDING. THE ADDITION U/S.153A OF THE ACT CANNOT BE MADE ON THE BASIS OF ALLEGED RECORDING DONE PRIOR TO SEARCH. THERE IS NO LEGALITY IN RELYING ON ALLEGED CONVERSATION TOOK PLACE PRIOR TO SEARCH. AS STATED ABOVE, THERE IS NOTHING ON RECORD TO SUGGEST THAT THE ADDITION IN QUESTION HAS A NY NEXUS WITH SEARCH MATERIAL AT ALL. T HIS SORT OF PRESUMPTIONS CAN NOT BE USED FOR MAKING SUCH ADDITIONS. ASSESSING OFFICER WRONGLY RELIED ON THE ALLEGED TAPE RECORDED CONVERSATION IN HIS STATEMENT RECORDED U/S 131 BEFORE THE AO THE OF MR. PRASHANT KATKA R . EVEN HE HAS ALSO CATEGORICALLY DENIED TO HAVE ANY SUCH CONVERSATION. AS SUCH RELIANCE ON THE ALLEGED TAPE RECORDED CONVERSATION PRIOR TO SEARCH HAS NO LEGAL VALIDITY IN IMPUGNED ASSESSMENT. THEREFORE THE ADDITION SQUARELY RESTS ON THE SUSPICIONS A ND AS SUMPTIONS AND THE SAME ARE NOT JUSTIFIED . IN SEARCH ACTION NO EVIDENCE IN REGARD TO RECEIPT OF ANY ON MONEY IN CASH WAS FOUND. THEREFORE , THE ADDITION IS NOT JUSTIFIED. THIS VIEW IS FORTIFIED BY THE DECISION OF ITAT, SPECIAL BENCH, MUMBAI VIDE ORDER DAT ED 06.07.2012 IN THE CASE OF AL - CARGO GLOBAL LOGISTICS LIMITED IN ITA NOS . 5018 TO 5022 & 5059/M/10 HAS HELD AS UNDER: - ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 25 58 THUS THE QUESTION NO I BEFORE US IS ANSWERED AS UNDER: A ) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS W ELL AS JURISDICTION CONFERRED O N HI M U/S. 153A FOR WHICH ASSESSMENTS SHALL HE MADE FOR EACH OF THE SIX ASSESSMENTS YEARS SEPARATELY; TO SUM UP, THE ADDITION NEEDS TO BE SET ASIDE AS ASSESSING OFFICER HAS FAILED TO ESTABLISH ANY ON MONEY IN TRANSACTION IN QUESTION . IN VIEW OF ABOVE LEGAL AND FACTUAL DISCUSSION ADDITION IN QUESTION IS NOT JUSTIFIED. SAME IS DIRECTED TO BE DELETED. 1 3. SIMILAR ADDITIONS WERE MADE ON ACCOUNT OF ON MONEY WITH REGARD TO RAW HOUSE IN A.YS. 2004 - 05, 2005 - 06 AND 2006 - 07 AMOUNTING TO RS.51,00,000/ - , RS.19,00,000/ - AND RS. 10,00,000/ - WHICH WERE CONFIRMED BY CIT(A). FACTS BEING SIMILAR TO A.Y.2003 - 04, WHICH HAS BEEN DISCUSSED AND DECIDED BY US IN FAVOUR OF ASSESSEE IN PARA 12.4 OF THIS ORDER . FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, THESE ADDITIONS IN ALL THESE YEARS ARE ALSO DELETED. 14. IN RESULT, ALL THESE APPEALS OF ASSESSEE ARE ALSO ALLOWED. 1 5 . IN ITA NO.2878/MUM/2013 FOR A.Y. 2003 - 04, REVENUE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT AS MADE U/S.153C FOR THE YEAR UNDER CONSIDERATION IS NOT VALID. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 26 1(A). THAT IN DOING SO, LD. CIT(A) HAS ERRED IN HOLDING THAT THE FIRST PROVISO TO SECTION 153C MODIFIES T HE PROVISION OF CLAUSES 1(A) & (B) OF SECTION 153A FOR MAKING IT APPLICABLE TO SECTION 153C, WHEREAS THE SAME MODIFIES ONLY THE PROVISION OF SECOND PROVISO TO SECTION 153A, WHICH DEALS WITH ABATING OF PENDING ASSESSMENTS, FOR MAKING IT APPLICABLE TO SECTIO N 153C. 1(B) THAT IN DOING SO, LD. CIT(A) HAS ERRED IN HOLDING THAT THE PROVISIONS OF SECTION 153A & 153C ARE NOT EXACTLY PARALLEL SO FAR AS THE PRECEDING SIX A.YRS. ARE CONCERNED FOR WHICH NOTICES HAVE TO BE ISSUED AND ASSESSMENTS HAVE TO BE MADE. 1 6 . WE HAVE DISCUSSED AND DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE VIDE PARA 5.4 OF THIS ORDER IN A.Y. 2001 - 02. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, ORDER OF CIT(A) IS UPHELD WHO QUASHED THE ASSESSMENT ON ACCOUNT OF LIMITATION. SAME IS UPHELD. 1 7 . AS STATED ABOVE, ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND AS A DEVELOPER. THERE WAS A SEARCH ACTION U/S.132 OF THE ACT AS DISCUSSED ABOVE. WHILE COMPLETING ASSESSMENT, ASSESSING OFFICER DENIED THE CLAIM U/S.80IB(10) OF THE ACT AND DI SALLOWANCES WERE MADE. 1 7 .1 ASSESSEE PREFERRED APPEAL ON LEGAL AND OTHER GROUNDS. IN RESPONSE TO STATUTORY NOTICE, LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE APPEARED AND VIDE GROUND NO.1 CHALLENGED THE VALIDITY OF ASSESSMENT MADE U/S.153C OF T HE ACT. LEGAL GROUND HAS BEEN TAKEN BY ASSESSEE WITH REGARD TO ASSUMPTION OF JURISDICTION BY ASSESSING OFFICER U/S.153C OF THE ACT FOR THE ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 27 IMPUGNED YEAR. IT WAS SUBMITTED THAT WITH RESPECT TO ACTION OF ASSESSING OFFICER IN ISSUING NOTICE U/S.153C OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND CONSEQUENT ASSESSMENT ORDER WAS PASSED THE PROVISIONS OF SECTION 153C OF THE ACT WERE NOT ATTRACTED IN CASE OF ASSESSEE SINCE A.Y. 2003 - 04 DOES NOT FALL WITHIN THE PURVIEW OF SECTION 153C OF THE ACT IN VI EW OF FACT THAT SECTION 153C(1) OF THE ACT READS AS UNDER: PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB - SECTIO N (1) OF ] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON'. IT WA S SUBMITTED THAT IN VIEW OF THE PROVISO AS QUOTED ABOVE, IN THE INSTANT CASE, ASSESSING OFFICER HAS JURISDICTION TO ASSESS ASSESSEE FOR SIX YEARS PRECEDING THE YEAR IN WHICH BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVE R SUCH OTHER PERSON, WHICH MEANS FROM A .Y S . 2004 - 05 TO 2009 - 10. IT WA S POINTED OUT THAT IN VIEW OF THE FACT THE ASSESSING OFFICER RECEIVED THE INTIMATION AND /OR SEIZED MATERIAL FROM THE ASSESSING OFFICER OF THE PERSON SEARCHED ONLY O N 20. 0 4.2009, THE IMPUG NED YEAR WA S OUTSIDE THE SAID PERIOD OF SIX YEARS. WITH OUT P REJUDICE TO ABOVE, IT WA S CONTENDED THAT FOR THE IMPUGNED ASSESSMENT Y EAR UNDER CONSIDERATION, NO INCRIMINATING DOCUMENTS RELATING TO ASSESSEE WERE FOUND DURING COURSE OF SEARCH AT THE PREMISE OF T HE THIRD PARSON. THEREFORE, IT WA S CONTENDED THAT ASSESS I NG ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 28 OFFICER OUGHT NOT TO HAVE PROCEEDED TO INVOKE PROVISIONS OF SECTION 153C OF THE ACT. IN VIEW OF THIS SUBMISSION OF ASSESSEE, CIT(A) OBSERVED THAT ASSESSING OFFICER HAS STATED IN PARAGR APH 6 OF ASSESSMENT ORDER THAT INTIMATION WAS RECEIVED ON 20.4.2009 FROM THE DCIT, CC - 17 & 28, MUMBAI. IF THE INTIMATION WA S RECEIVED ON 20.4.2009, THEN THE PRECEDING SIX A SSESSMENT Y EARS W OULD BE A.YS. 2004 - 05 TO 2009 - 10 ENABLING THE ASSESSING OFFICER TO ASSUME JU RISDICTION U /S . 153C OF THE ACT . THAT BEING SO THERE WA S MERIT IN THE LEGAL CONTENTION PUT FORTH BY ASSESSEE THAT THE IMPUGNED YEAR I.E. A .Y. 2003 - 04 FALLS OUTSIDE THE PURVIEW OF SECTION 153C OF THE ACT IN VIEW OF THE PROVISO. SINCE THE QUESTION OF JURISD ICTION HAS TO BE HELD IN FAVOR OF ASSESSEE , THE OTHER SUBMISSIONS AND OTHER GROUNDS AS RAISED GOES ACADEMIC . ACCORDINGLY, CIT(A) HELD THAT THERE WAS NO VALID ASSUMPTION OF JURISDICTION IN RESPECT TO THE IMPUGNED YEAR UNDER CONSIDERATION AND THEREFORE THE ASSESSMENT AS MADE U / S. 153C OF THE ACT FOR THE YEAR UNDER CONSIDERATION WA S RIGHTLY HELD IN VALID. THIS VIEW IS FORTIFIED BY OUR DECISION IN ITA NO. 1138/MUM/2013 F OR A.Y.2001 - 02, FACTS BEING SIMILAR SO FOLLOWING SAME REASONING THUS THE ASSESSMENT IS HELD INVALID. 1 8 . AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSED. 19. IN ITA NO.2784/MUM/2013 FOR A.Y. 2004 - 05, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN NOT QUASHIN G THE ASSESSMENT ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 29 ORDER PASSED BY THE LD. A.O., WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID FOR WANT OF JURISDICTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.51,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 20. THIS APPEAL IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3) R.W.S. 153A OF THE ACT. 2 1. FIRST ISSUE IS WITH REGARD TO JURISDICTION AND SECOND ISSUE IS WITH REGA RD TO ADDITION OF RS.51 LACS ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 2 2 . WHILE COMPLETING THE ASSESSMENT, ASSESSING OFFICER HAD RECOMPUTED THE DEDUCTION CLAIMED U/S.80IB(10) OF THE ACT AND ALSO BROUGHT TO TAX A SUM OF RS.51LACS AS UNDIS CLOSED INCOME FROM SALE OF ROW HOUSES. HOWEVER, THE SAID ORDER OF ASSESSMENT WAS SET ASIDE U/S.263 OF THE ACT WAS SET ASIDE U/S.263 OF THE ACT BY CIT(C) - II, MUMBAI AS PER ORDER DATED 25.03.2009. THE SAID ORDER U/S.263 OF THE ACT WAS CHALLENGED BEFORE THE ORDER OF ITAT, WHEREIN AS PER ORDER DATED 24.08.2011 HAD QUASHED THE ORDER OF REVISION PASSED BY THE CIT U/S.263 OF THE ACT. THEREFORE, IT WAS CONSIDERED THAT THE GROUNDS AS RAISED BY ASSESSEE AGAINST THE ORIGINAL ORDER OF ASSESSMENT NOW SURVIVED AND TAKE N UP FOR ADJUDICATION. 2 3. THE MAIN ISSUE BEFORE US IS WITH REGARD TO TREATING A SUM OF RS.51LACS AS UNDISCLOSED INCOME. THE FINDINGS OF ASSESSING OFFICER WERE CONTAINED IN PARA 6.1 TO 6.10 OF ASSESSMENT ORDER. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 30 SIMILAR ISSUE AROSE IN A.Y. 2003 - 04, WHERE IN VIDE PARA 12 WE HAVE DISCUSSED AND DECIDED THE ISSUE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, ADDITION IS DELETED AS DISCUSSED ABOVE. 2 4 . AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 2 5 . IN ITA NO.2785/MUM/2013 FOR A.Y. 2004 - 05, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN NOT QUASHING THE ASSESSMENT ORDER PASSED BY THE LD. A.O., WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID FOR WANT OF JUR ISDICTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.51,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 2 6 . THE FIRST GROUND OF A PPEA L IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3) R.W.S. 153C OF THE ACT. 2 7. AT THE TIME OF HEARING, BEFORE THIS GROUND IS NOT PRESSED, THEREFORE DISMISSED AS NOT PRESSED. 2 8 . THE SECOND ISSUE RAISED BEFORE US IN THIS APPEAL WILL BE TAKEN CARE BY THE FINDING IN ASSESSEES OWN CASE FOR A.Y. 2004 - 05 ARISING OUT OF ORDER OF U/S. 143(3) R.W.S. 153A OF THE ACT IN ITA NO.2784/MUM/2013. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING THE ADDITIONS IN QUESTION ARE DELETED. 2 9 . AS A RESULT, THE AP PEAL IS PARTLY ALLOWED. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 31 30 . IN ITA NO.2786/MUM/2013 FOR A.Y. 2005 - 06, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUND: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.19,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 31 . THIS APPEAL IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3) R.W.S. 153A OF THE ACT. 3 2. THE ONLY ISSUE IS WITH REGARD TO ALLEGED ON MONEY OF RS.18 LAKHS RECEI VED ON SALE OF ROW HOUSES . SIMILAR ISSUE AROSE IN A.Y. 2003 - 04, WHEREIN VIDE PARA 12.3 OF THIS ORDER WE HAVE DISCUSSED AND DECIDED THE ISSUE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING ADDITION IS DELETED. 3 3 . AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 3 4 . IN ITA NO.2787/MUM/2013 FOR A.Y. 2005 - 06, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN NOT QUASHING THE ASSESSMENT ORDER PASSED BY THE LD. A. O., WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID FOR WANT OF JURISDICTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.19,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 3 5 . TH E FIRST ISSUE IS APPEAL IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3) R.W.S. 153C OF THE ACT WHICH WAS NOT PRESSED BEFORE US, SO THE SAME IS DISMISSED AS NOT PRESSED. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 32 3 6 . NEXT ISSUE IS WITH REGARD TO ADDITION OF RS.19LACS ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. SIMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR A.Y. 2005 - 06 ARISING OUT OF ORDER OF U/S. 143(3) R.W.S. 153A OF THE ACT IN ITA NO.2786/MUM/2013 . FACTS BEING SIMILAR, SO FOLL OWING SAME REASONING THIS ISSUE IS ALSO DECIDED IN FAVOUR OF ASSESSEE. 3 7 . AS A RESULT, THE APPEAL IS PARTLY ALLOWED. 3 8 . IN ITA NO.2788/MUM/2013 FOR A.Y. 2006 - 07, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUND: 1. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.10,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 3 9 . THIS APPEAL IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3)(III) OF T HE ACT. THE ONLY ISSUE IS WITH REGARD TO ADDITION OF RS.10 LACS ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. SIMILAR ISSUE AROSE IN A.Y. 2002 - 03 , WHEREIN VIDE PARA 12.3 WE HAVE DISCUSSED AND DECIDED THE ISSUE. FACTS BEING SIMILAR, SO FOLLOW ING SAME REASONING THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 40 . AS A RESULT, THE APPEAL IS ALLOWED. 41 . IN ITA NO.278 9 /MUM/2013 FOR A.Y. 200 6 - 0 7 , ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUND: 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 33 CONFIRMING THE ADDITION OF RS.1 0 ,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. 42 . THIS APPEAL IS ARISING OUT FROM THE ORDER OF CIT(A) PASSED U/S. 143(3) R.W.S. 153C OF T HE ACT. THE ONLY ISSUE IS WITH REGARD TO ADDITION OF RS.10 LACS ON ACCOUNT OF ALLEGED ON MONEY TOWARDS SALE OF ROW HOUSES. SIMILAR ISSUE AROSE IN A.Y. 2006 - 07, ARISING OUT OF ORDER OF U/S. 143(3)(III) OF THE ACT IN ITA NO.2788 /MUM/2013. FACTS BEING SIMILA R, SO FOLLOWING SAME REASONING THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 43 . AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 4 4 . IN ITA NO.2790/MUM/2013 FOR A.Y. 2007 - 08, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FA CTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) ERRED IN NOT QUASHING THE ASSESSMENT ORDER ALLEGEDLY PASSED BY THE LD. A.O. U/S.143(3) R.W.S. 143(3) WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID FOR WANT OF JURISDICTION DESPITE THE FACT THAT THE A.O. DID NOT ISSUE ANY NOTICE U/S.153A R.W.S. 153C. 2. IN ANY EVENT THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ORDER PASSED BY THE A.O. IS BARRED BY THE LIMITATION IN VIEW OF THE SECTION 153. 4 5 . GROUNDS OF THIS APPEAL ARE NOT PRESSED BY LEARNED A UTHORIZED REPRESENTATIVE. SO, SAME IS DISMISSED AS NOT PRESSED. 4 6 . AS A RESULT, ASSESSEES APPEAL IS DISMISSED. 4 7 . IN ITA NO.6851/MUM/2013 FOR A.Y. 2010 - 11, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 34 1. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN DISALLOWING THE CLAIM U/S 80I B (10) OF THE INCOME TAX ACT, 1961 IN RESPECT HOUSING PROJECT 'VIJAY VILAS(L - 6)' OF RS. 3,29,61,01 1/ - . 2. ON THE FACT S AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN DISALLOWING THE CLAIM U/S 80 IB (10) OF THE INCOME TAX ACT, 1961 IN RESPECT HOUSING PROJECT 'VIJAY VILAS(L 1 - 15)' OF RS. 3,38,57,877/ - . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. IN DISALLOWING THE CLAIM U/S 80 IB (10) OF THE INCOME TAX ACT, 1961 IN RESPECT HOUSING PROJEC T 'VIJAY VATIKA' OF RS . 22,67,679/ - . 4 8 . FIRST ISSUE IS WITH REGARD TO DISALLOWANCE OF CLAIM U/S.80IB(10) OF THE ACT IN RESPECT OF HOUSING PROJECT VIJAY VILAS (1 - 6) OF RS.3,29,61,011/ - . SIMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR A.Y. 2002 - 03 & 20040 5 TO 2009 - 10 IN ITA NOS. 1030, 2879 TO 2882, 3497 & 3498/MUM/2013 AS DETAILED ON PAGE NO.35 OF PAPER BOOK, WHEREIN RELIEF HAS BEEN GRANTED IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER: 1 2.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PER USED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JUDICIAL PRONOUNCEMENT CITED. THE FACTS OF THE MATTER ARE THAT THE ASSESSEE IS A MEMBER OF VIJAY GROUP' IN WHOSE CASE A SEARCH AND SEIZURE ACTION WAS CARRIED OUT UNDER SECTION 132 OF THE ACT ON 22.09.2005 AT THEIR BUSINESS AND RESIDENTIAL PREMISES. PURSUANT THERETO, THE ASSESSMENT FOR A.Y. 2002 - 03 WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT VIDE ORDER DATED ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 35 30.03.2007. SUBSEQUENTLY, THE CIT, CENTRAL II, MUMBAI INVOKING THE PR OVISIONS OF SECTION 263 OF THE ACT HELD THE ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER (AO) TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE THE ORDER OF ASSESSMENT. THE AO THEN PASSED ORDER UNDER SECTION 143(3) R.W.S. 153! & 263 OF THE ACT DISALLOWING THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80 IB (10) OF THE ACT. SUBSEQUENTLY, THE COORDINATE BENCH OF THIS TRIBUNAL VIDE ITS ORDER IN ITA NOS. 3514 TO 3520/MUM/2009 DATED 24.08.2011 QUASHED THE ORDER PASSED BY THE LE ARNED CIT UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 200 - 01 TO 2006 - 07. 1 2.4.2 WE FIND THAT THE LEARNED CIT(A), CONSIDERING THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION AND FOLLOWING AFORESAID DECISION OF THE COORDINATE BENCH OF THIS TRIB UNAL DATED 24.08.2011 IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEARS 2000 - 01 TO 2006 - 07, ALLOWED THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80 I B(10) OF THE ACT AT PARAS 8.1 TO 8.6 OF THE IMPUGNED ORDER HOLDING AS UNDER: - '8.1 THE FACT IS THAT THE A.O HAS ORIGINALLY GRANTED DEDUCTION UNDER S. 8 - IB (10) OF THE ACT. HOWEVER, WHILE COMPLETING THE IMPUGNED ASSESSMENT THE A.O DECLINED TO GRANT DEDUCTION FOR THE FOLLOWING REASONS: (A) BUILDING NO. 1 TO 13 COMMENCEMENT CERTIFICATE NO. 97064/TMC/TDD/ 1687 WA S ISSUED ON 04.10.1997 BY THE THANE MUNICIPAL CORPORATION FOR BUILDINGS CONSTRUCTED ON SURVEY NO. 136,137 AND 138. SINCE THE DATE OF COMMENCEMENT OF BUILD NOS. 1 TO 13 IS BEFORE 1.10.1998 DEDUCTION U/S. 80 IB (10) IS NOT ALLOWABLE TO THE APPELLANT. (B) AS P ER RULE 18BBB IT IS MANDATORY TO FILE SEPARATE AUDIT REPORT FOR EACH UNDERTAKING OR ENTERPRISE FOR WHICH DEDUCTION IS CLAIMED AND IT SHOULD BE ACCOMPANIED BY PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF THE SAID UNDERTAKING OR ENTERPRISE AS IF THE UNDERTAK ING OR ENTERPRISE WERE A DISTINCT ENTITY. ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 36 8.2 IT HAS TO BE MENTIONED HERE THAT THE ORIGINAL ASSESSMENT, AS COMPLETED WAS THE SUBJECT MATTER OF PROCEEDINGS UNDER S. 263 OF THE ACT. THE CIT, CENTRAL - 11, MUMBAI HAD INVOKED THE PROVISIONS OF S. 263 FOR THE A. Y. 2000 - 01 TO 2006 - 07 ON THE GROUND THAT ON EXAMINATION OF THESE ORDERS, IT WAS OBSERVED THAT THE SAME WERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE MAINLY BECAUSE DEDUCTION UNDER S. 80 IB (10) HAS BEEN ALLOWED, WHEREAS ASSESSEE HAD NOT FULFILLED ALL THE CONDITIONS. 8.3 THE APPELLANT HAD FILED APPEAL AGAINST THE ORDER PASSED UNDER S. 263 AND THE HON'BLE 1TAT VIDE ORDERS IN ITA NO. 3515 TO 3520/MUM/2009 DATED 24. 8 . 2011 HAD QUASHED THE ORDERS UNDER S. 263. 8.4 AS REGARDS THE OBJECTION THAT THE BUI LDING NO. 3 WAS COMMENCED BEFORE 1.10.1998, THE HONBLE ITAT IN PARAGRAPH 13 HAVE HELD AS UNDER: - 13. THE FIRST OBJECTION RAISED BY THE COMMISSIONER IS THAT THE ACTUAL WORK IN TWO PROJECTS VIZ. VIJAY NAGAR! ANNEX - 1 (BUILDING NOS.1 TO 3) AND VIJAY NAGAR AN NEX - I (BUILDING NO. 10 TO 12) COMMENCED AS PER THE ANNEXURES TO 1OCCB REPORTS ON 17/10/1998, WHERE AS PER THE COMMENCEMENT CERTIFICATE ISSUED BY THE TMC WORK COMMENCED ON 04/10/1997 AND, THEREFORE, COMMENCEMENT SHOULD BE RECKONED ON 04/10/1997. AS PER SECT ION 801B (10) THE FIRST CONDITION FOR CLAIMING DEDUCTION IS THAT THE PROJECT MUST HAVE COMMENCED ON OR AFTER 1ST DATE OF OCTOBER, 1998. HOWEVER, AS POINTED OUT BY THE LD. COUNSEL OF THE ASSESSEE THE WORK COULD NOT START BECAUSE OF HINDRANCES AND THE SAME S TARTED ONLY AFTER 17/10/1998, WHICH BECOMES CLEAR FROM THE LETTER OF THE ARCHITECT ADDRESSED TO THE TMC WHICH IS AVAILABLE AT PAGE 111 OF THE PAPER BOOK. IT WAS FURTHER POINTED OUT THAT AN ENQUIRY WAS MADE BY A.O HIMSELF THOUGH THE INSPECTOR AND THE INSPEC TOR HAS CATEGORICALLY STATED THAT ACTUAL CONSTRUCTION STARTED ON 17/10/1998. THE RELEVANT PARA OF THE INSPECTORS REPORT DATED 02/03/2007 READS AS UNDER: - ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 37 'IN. THIS PROJECT THE ASSESSEE HAD CONSTRUCTED SEVEN BUILDINGS. THE AREA OF LAND UTILIZED FOR THIS PR OJECT IS 2.93 ACRES AND THE BUILT - UP AREA OF FLATS CONSTRUCTED ON EACH OF THE THESE BUILDING ARE RANGING FROM 456 TO 664 PER SQ.FT. THE DATE OF COMMENCEMENT AND DATE OF COMPLETION OF THIS PROJECT WAS 17/10/1998 AND 13/10/2001, 13/12/2001 & 06/02/2002 RESPE CTIVELY. THE DOCUMENTARY PROOF OF MUNICIPAL APPROVED PLAN, ARCHITECT, CERTIFICATE, AND COMPLETION CERTIFICATE ETC, ARE OBTAINED AND PLACED ON RECORD.' 8.5 THUS IT IS OBSERVED THAT ON THE BASIS OF ENQUIRY BY THE A.O IT HAD BEEN ASCERTAINED THAT ACTUAL CONS TRUCTION HAD COMMENCED ONLY AFTER 17.10.1998. THUS, ALTHOUGH THE APPELLANT HAD RECEIVED COMMENCEMENT CERTIFICATE, PRIOR TO 1.10.1998, ACTUAL CONSTRUCTION COMMENCED W.E.F 17.10.1998; WHICH HAD BEEN CONFIRMED BY THE INSPECTION ON SITE VERIFICATION. WITH REFE RENCE TO FILING OF THE AUDIT REPORT, IT IS SUBMI T TE D THAT FOR A.Y. 2000 - 01 TO 2002 - 03, IT WAS NOT MANDATORY TO FILE AUDIT REPORT SEPARATELY FOR EACH RIND6RTAKING - TTR ENTERPRISE. THE HON BLE I T AT HAS ALSO OBSERVED AS UNDER: - 'IN ANY CASE, WE FURTHER FIND T HAT RULE 18BBB WAS BROUGHT ON STATUTE FOR THE FIRST TIME W.E.F. 6 - 9 - 2062 WHICH MEANS ITS REQUIREMENT WAS NOT APPLICABLE IN A. Y. 2000 - 0 1.' 8.6 THUS THE SAID OBJECTION IS ALSO NOT TENABLE. THE AMENDMENT INTRODUCED BY THE FINANCE ACT, 2002 IS APPLICABLE W.E .F. 1.4.2003 I.E. A.Y. 2003 - 04 AND ONWARDS. HENCE IT IS HELD THAT THE CLAIM FOR DEDUCTION UNDER S. 80 I B(10) IS ALLOWABLE AND HENCE TO BE ALLOWED, IT IS DIRECTED ACCORDINGLY.' 1 2.4.3 ON AN APPRECIATION OF THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERAT ION, I.E. A.Y. 2002 - 03 IN RESPECT OF THE ASSESSEE'S CLAIM FOR DED UCTION UNDER SECTION 80I B(10) OF THE ACT WE FIND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE FACTUAL FINDINGS OF THE LEARNED CIT(A) (SUPRA) AND THEREFORE WE FIND NO REQUIREM ENT TO INTERFERE WITH OR ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 38 DEVIATE THEREFROM. IN THE FACTUAL MATRIX OF THE CASE AND DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN ITS ORDER IN FIA NOS. 5315 TO 5320/MUM/2009 DATED 24.08.2011 (SUPRA), WE UPHOLD THE ORDER OF THE LEARNED CIT(A) IN ALLOWI NG THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 801B(10) OF THE ACT. CONSEQUENTLY, THE GROUNDS AT S.NOS. 1 TO 3 RAISED BY THE REVENUE ARE DISMISSED. 3. IN THE RESULT, REVENUE'S APPEAL FOR A.Y. 2002 - 03 IS DISMISSED. 4 9 . FACTS BEING SIMILAR, SO FOLLOW ING SAME REASONING AND IN VIEW OF DECISION OF CO - ORDINATE BENCH IN ASSESSEES OWN CASE, WE ARE NOT INCLINED TO CONCUR WITH THE FINDING OF CIT(A), ASSESSEE IS ENTITLED FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT IN RESPECT OF HOUSING PROJECT VIJAY VATIKA OF RS.3,29,61,011/ - . 50 . NEXT ISSUE IS WITH REGARD TO DISALLOWANCE OF CLAIM U/S.80IB(10) OF THE ACT IN RESPECT OF HOUSING PROJECT VIJAY VILAS (11 - 15) OF RS.3,38,57,877/ - . SIMILAR ISSUE HAS BEEN DISCUSSED IN DETAILED AND DECIDED IN FAVOUR OF ASSESSEE VID E PARA 7.2 TO PARA 13 OF THE ORDER PASSED BY CO - ORDINATE BENCH ON 24.9.2016 . NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE, SO FOLLOWING SAME REASONING, ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF ASSESSEE U/S.80IB(10) OF THE ACT IN RESPECT OF HOUS ING PROJECT VIJAY VILAS (11 - 15) OF RS.3,38,57,877/ - . 51 . NEXT ISSUE IS WITH REGARD TO DISALLOWANCE OF CLAIM U/S.80IB(10) OF THE ACT IN RESPECT OF HOUSING PROJECT VIJAY VATIKA OF RS.22,67,679/ - . SIMILAR ISSUE HAS BEEN DISCUSSED AND DECIDED IN FAVOUR OF AS SESSEE VIDE PARA 7.2 TO PARA 13 OF ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 39 THE ORDER OF THE CO - ORDINATE BENCH ON 29.4.2016 . NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE, SO FOLLOWING SAME REASONING, ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF ASSESSEE U/S.80IB(10) OF THE ACT IN RESPEC T OF HOUSING PROJECT VIJAY VATIKA OF RS.22,67,679/ - . 52 . AS A RESULT , ASSESSEES APPEAL IS ALLOWED AS INDICATED ABOVE. 53 . IN ITA NO. 1 1 37/MUM/2013 FOR A.Y. 2000 - 01, ASSESSEE HAS FILED APPEAL ON FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.1,01,00,000/ - DESPITE THE FACT THAT THE ADDITION MADE BY THE LD. A.O IS ILLEGAL, WITHOUT AND/OR IN EXCESS OF JURISDICTION, VOID AND OTHERWISE BAD IN LAW . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING A.OS ACTION IN MAKING ADDITION OF RS.1,01,00,000/ - ON ACCOUNT OF ALLEGED PAYMENTS MADE TO M/S. SHRUTI BUILDERS DESPITE THE FACT TH AT THE LD. A.O. FAILED TO BRING ANY CORROBORATIVE EVIDENCE ON RECORD. 54 . THE ONLY GROUND OF THIS APPEAL RELATES TO THE ADDITION OF RS. 1,01,00,000/ - AS UNEXPLAINED INVESTMENT ON ACCOU NT OF ALLEGED CASH PAYMENT TO M/ S. SHRUTI BUILDERS. THE ADDITION WAS MADE ON THE BASIS OF SOME DOCUMENTS FOUND IN THE SEARCH ACTION IN THE CASE OF M/S. SHRUTI BUILDERS ON 23.10.2003. ASSESSEE SUBMITTED THAT IT HAS NOT MADE ANY CASH PAYMENTS ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 40 TO M/S. SHRUTI BUILDERS AND HENCE NO ADDITION WAS CALLED FOR. ASSESSING OFFICER HA S MAINLY RELIED ON THE NOTINGS FOUND IN CASE OF SEARCH IN CASE OF M/S. SHRUTI BUILDERS AND THE ADMISSION MADE BY THEM IN THE SETTLEMENT APPLICATION FILED BY THEM IN THEIR CASE WHEREIN THEY HAVE STATED TO HAVE RECEIVED THE AMOUNT IN CASH FROM ASSESSEE . ASS ESSEE HAD PROCURED THE DEVELOPMENT RIGHTS IN THE YEAR 1996 - 97 (A. Y. 1997 - 98) . ASSESSEE PAID THE AMOUNT OF THE CONSIDERATION TO THEM BY CHEQUES / DD S AND THE SAME ARE REFLECTED IN BOOKS OF ACCOUNT TO HAVE BEEN PAID FROM 01 .04.1996 TO 29.07.1998. F URTHER AN OTHER DOCUMENT, PAGE NO . 31 OF BUNDLE 2 SEIZED ON 30 .10.2003 FROM THE RESIDENCE OF SHRI ASHOK R GUPTA K ANTA BUILDING , 3 R D FLOOR , TAYABAI , MALABAR HILL , MUMBAI THIS DOCUMENT ALSO MENTIONS ABOUT CASH PAYMENTS MADE BY M/S . VIAJY GRIHANIRMAN PRIVATE LIMITED. T HE RELEVANT PORTION IS REPRODUCED. NAME OF PARTY CHEQUE AMOUNT CHEQUE AMOUNT (AS STATED BY AR TO BE READ AS CASH AMOUNT) VIJAY GRIHNIRMAN RS.4,66,50,000 2,02,00,000 55. THE CHEQUE PAYMENT OF RS. 4,66,50,000/ - IS MADE UPTO 29.07.1998 THUS LOGICALLY INFE R R ING THAT EVEN THE CASH MENTIONED ON THE SAME PAPER OUGHT TO HAVE BEEN PAID BEFORE THE SAID DATE. THUS EVEN IF THE CONTENTION OF ASSESSEE THAT IT DID NOT MAKE ANY CASH PAYMENT TO SHRUTI BUILDERS IS REJECTED ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 41 THE ISSUE REGARDING DATE OF PAYMENT IS RELEVANT FOR ADJUDICATION OF ISSUE AT HAND . F ROM THE ABOVE , IT CAN BE LOGICALLY INFERRED THAT THE PAYMENT OF CASH WOULD HAVE BEEN MADE B EFOR E 29.07.1998 I.E A.Y. 1999 - 00 WHICH IS NOT BEFORE THE BENCH . N OTINGS MADE BY M / S. SHRUTI BUILDERS ARE FOR THE PERIOD 1999 - 0 0 ( A. Y . 2000 - 01) , WHEREAS ASSESSEE PURCHASED DEVELOPMENT RIGHTS FROM THEM IN A.Y. 1996 - 97 AND THERE IS NO CORRELATION AT ALL. 56. IN THIS BACKGROUND, THE A SSESSEE SUBMITTED THAT IT PURCHASED THE RIGHTS IN THE YEAR 1996 AND PAID THE CONSIDERATION . HOW AF TER 3 YEARS THE NOTING FOR CASH RECEIVED WAS MADE IS NOT KNOWN TO ASSESSEE . L D . AR REQUESTED THAT I T HAS TO BE ALLOWED ON PRELIMINARY ISSUE AS WELL AS MERIT. 57. REGARDING PRELIMINARY ISSUE RAISED AGAINST THE ASSESSMENT U/S 153A, WE FIND THAT CERTAIN IN CRIMINATING DOCUMENTS WERE FOUND IN SEARCH PROCEEDINGS IN CASE OF M/S SHRUTI BUILDER SO AT T HE MOST ACTION COULD HAVE BEEN TAKEN IF AT ALL UNDER SECTION 153C OF THE ACT IN CASE OF ASSESSEE . WHILE THE ADDITION IN QUESTION HAS BEEN MADE U/S 153A. THERE WAS NO SEARCH MATERIAL FOUND IN CASE OF ASSESSEE WITH REGARD TO ADDITION IN QUESTION. IT MEANS THAT THERE IS NO LINKAGE OF ADDITION IN QUESTION WITH ANY SEARCH MATERIAL SEIZED F ROM THE ASSESSEE . SO ADDITION IN QUESTION IS NOT JUST IFIED U/S 153A . ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 42 W ITHOUT P REJUDICE TO ABOVE ON MERIT WE FIND THAT THE EVIDENCE OF MONEY RECEIPT WAS FOUND IN CASE OF M/S SHRUTI BUILDERS WHICH HAS BEEN MADE BASIS OF ADDITION IN QUESTION IN THE YEAR UNDER CONSIDERATION. IT IS THE MATTER OF COMMON SENSE THAT IF AT ALL ANY ON MONEY IF CONCERN, NORMALLY SAME IS PAID PRIOR TO CHEQUE TRANSACTION WHICH IS MUCH PRIOR TO ASSESSMENT YEAR UNDER CONSIDERATION BECAUSE CHEQUE TRANSACTION TOOK PLACE IN 1998 RELEVANT TO A .Y. 1999 - 2000 WHILE A.Y. 2000 - 01 IS BEFORE US. IN VIEW OF ABOVE DISCUSSION , NO ADDITION COULD BE JUSTIFIED HAND OF ASSESSEE IN YEAR UNDER CONSIDERATION. SO, SAME IS DIRECTED TO BE DELETED. 58 . IN THE RESULT , THE APPEAL IS ALLOWED. 5 9 . IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE IN ITA NOS. 113 7 /M/2013 FOR ASSESSMENT YEAR 2000 - 01 IS ALLOWED; 113 8 /M/2013 FOR ASSESSMENT YEAR 2001 - 02 IS ALLOWED; 113 9 /M/2013 FOR ASSESSMENT YEAR 2002 - 03 IS ALLOWED; 278 3 /M/2013 FOR THE ASSESSMENT YEAR 2003 - 04 IS ALLOWED; 2784/M/2013 FOR THE ASSESSMENT YEAR 2004 - 05 IS ALLOWED; 2785/M/2013 FOR THE ASSESSMENT YEAR 2004 - 05 IS PARTLY ALLOWED ; 2786/M/2013 FOR THE ASSESSMENT YEAR 2005 - 06 IS ALLOWED; 2787/M/2013 FOR THE ASSESSMENT YEAR 2005 - 06 IS PARTLY ALLOWED ; 2788/M/2013 FOR THE ASSESSMENT YEAR 2006 - 07 IS ALLOWED ; 2789/M/2013 FOR THE ASSE SSMENT YEAR 2006 - 07 IS ALLOWED; ITA NO S.1029 / MUM /1 3 WITH 13 APPEALS [ M/S. VIJAY GRIHNIRMAN PVT. LTD. ] PAGE 43 279 0 /M/2013 FOR THE ASSESSMENT YEAR 2007 - 0 8 IS DISMISSED; 6851 /M/2013 FOR THE ASSESSMENT YEAR 20 10 - 11 IS ALLOWED; DEPARTMENT'S A PPEAL FOR THE A.Y.200 1 - 02 IN ITA NO.1029/MUM/13 AND FOR ASSESSMENT YEAR 2003 - 04 IN ITA NO.2878 /MUM/2013 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 14TH DAY OF SEPTEMBER, 201 6 . SD SD ( JASON P. BOAZ ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI : DATED 14 / 09 /201 6 S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1 . / REVENUE 2 . / ASSESSEE 3 . / CONCERNED CIT 4. - / CIT (A) 5 . , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. BY ORDER / , TRUE COPY / , ,