SILVER LAND DEVELOPERS P. LTD, MUMBAI V. ACIT CIR 10(2), MUMBAI

ITA 7169/MUM/2010

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6999 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 19-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Opportunity of being heard; Corroborative evidences; Set aside
• Section: 271(1)(c); 133A; 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E, BENCH MUM BAI BEFORE SHRI PAWAN SINGH, JM & SHRI G. MANJUNATHA, AM ITA NO.7169/MUM/2010 ( ASSESSMENT YEAR :2007-08 ) M/S. SILVER LAND DEVELOPERS PVT.LTD. 333, KAILASH PLAXA, VALLABH BAUG LANE, GHATKOPAR(E), MUMBAI-400 077 VS. ACIT, CIRCLE-10(2) 4 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AA GCS9765H APPELLANT ) .. RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI MANOJ KUMAR SINGH DATE OF HEARING 1 1 / 07 /201 9 DATE OF PRONOUNCEME NT 31 / 0 7 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST ORDER OF THE COMMISSIONER OF INCOME TAX APPEALS22, MUMBAI D ATED 19/07/2010 AND IT PERTAINS TO THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- IA. THE ID CIT (APPEALS) ERRED IN CONFIRMING THE AD DITION OF RS,1,94,232/- MADE TO THE RETURNED INCOME OF THE APPELLANT ON ACC OUNT OF ALLEGED EXCESS CASH FOUND DURING THE COURSE OF SURVEY ACTIO N IGNORING THE FACT THAT THE CASH FOUND WAS PAN OF THE CASH RECEIPTS FR OM THE SOLITAIRE PROJECT DULY OFFERED TO TAX BY THE APPELLANT COMPANY. IB. THE ID CIT (APPEALS) ERRED IN SUSTAINING THE AC TION OF THE ID AO RESULTING IN DOUBLE ADDITION OF RS. 1,94,232/- ON CE AS INCOME AND AGAIN ON ACCOUNT OF APPLICATION THEREOF IN THE FORM OF AN ASSET. 1C. THE ID CIT (APPEALS) ERRED IN CONFIRMING THE AD DITION OF RS.1,94,232/- , MADE BY THE LD. AO ON THE SOLE BASIS OF THE BONAF IDE ERROR ON THE PART OF THE DIRECTOR OF THE APPELLANT COMPANY IN CLARIFY ING A PARTICULAR ISSUE ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 2 DURING THE COURSE OF SURVEY ACTION, WHICH OTHERWISE IS NOT JUSTIFIED BY FACTS AND IN LAW. 2A. THE ID CIT (APPEALS) ERRED IN DISALLOWING THE D EDUCTION OF RS. 2,34,07 ,151/-CLAIMED BY THE APPELLANT U/S 80 1A (4 ) (III) OF THE I T. ACT 1961 BY HOLDING THAT THE APPELLANT DID NOT COMPLY W ITH THE REQUISITE CONDITIONS LAID DOWN UNDER THE SAID SECTION AND WAS ACCORDINGLY NOT ELIGIBLE FOR THE SAID CLAIM FOR DEDUCTION, 2B. THE ID CIT (APPEALS) ERRED IN NOT APPRECIATING THE FACTS OF THE APPELLANTS CLAIM FOR DEDUCTION U/S 80 1A (4) (III), PARTICULARLY THE ORDER OF THE HON. HIGH COURT BOMBAY AS WELL AS THE PROVISION S OF SECTION 80 IA (4) APPLICABLE TO THE FACTS OF THE APPELLANTS CASE 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DELETE AND/OR VARY ANY OF THE ABOVE GROUNDS OF APPEAL/RELIEF CLAIMED A T ANY TIME BEFORE THE DECISION OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER FILED ITS RETURN OF INCOME FOR AY 2007-08 ON 30/10/2007 DECLARING TOTAL INCOME AT RS. 73,99,676/-. A SURVEY U/S 133A OF THE I.T.ACT, 1961 WAS CARRIED OU T AT THE BUSINESS PREMISE OF THE ASSESSEE ON 04/10/2006. DURING THE C OURSE OF SURVEY, INVENTORY OF PHYSICAL CASH WAS TAKEN AS PER WHICH P HYSICAL CASH AMOUNTING TO RS. 12,46,700/- WAS FOUND. FURTHER, CA SH BALANCE AS PER CASH BOOK MAINTAINED BY THE ASSESSEE AS ON THE DAT E OF SURVEY WAS AT RS. 10,52,468/-. THEREFORE, DIFFERENCE AMOUNT OF RS . 1,94,232/- HAS BEEN TREATED AS UNEXPLAINED MONEY AND ACCORDINGLY, A ST ATEMENT WAS RECORDED ON 04/10/2006, FROM SHRI KAMLESH SHAH DIRE CTOR OF THE COMPANY WHERE HE HAD ADMITTED EXCESS CASH OF RS. 1, 94,232/- AND ALSO AGREED TO OFFER AN ADDITIONAL INCOME. 3. THE CASE HAS BEEN SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLED UPON THE ASSE SSEE TO EXPLAIN AS ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 3 TO WHY AN ADDITION SHOULD BE MADE IN RESPECT OF EXC ESS CASH FOUND DURING THE COURSE OF SURVEY FOR RS. 1,94,232/-. IN RESPONS E, THE ASSESSEE HAS FILED A LETTER DATED 02/11/2009 AND SUBMITTED THAT IT HAS DECLARED ADDITIONAL INCOME OF RS. 24,50,000/- FROM SOLITAIR E PROJECT. IN RESPECT OF INCOME, IN THE FORM OF EXCESS CASH FOUND, THE SAME IS TELESCOPED OUT OF ADDITIONAL INCOME OFFERED FOR SOLITAIRE PROJECT. TH EREFORE, SEPARATE ADDITION IS NOT CALLED FOR. THE AO AFTER CONSIDERIN G RELEVANT FACTS AND ALSO TAKEN NOTE OF ADMISSION OF THE DIRECTOR IN HIS SWOR N STATEMENT ABOUT EXCESS CASH FOUND DURING THE COURSE OF SURVEY, MADE ADDITION OF RS. 1,94,232/- TO THE RETURNED OF INCOME. SIMILARLY, TH E AO HAS DENIED THE BENEFIT OF DEDUCTION CLAIMED U/S80IA IN RESPECT OF PROJECT DEVELOPED BY THE ASSESSEE, I.E., SILVER METROPOLIS SITUATED AT G EORGIAN, MUMBAI ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FULFIL CONDI TIONS PRESCRIBED UNDER THE PROVISION OF SECTION 80IA(II) OF THE ACT, AND A LSO THE EMPOWERED COMMITTEE HAS CONCLUDED THAT ASSESSEE IS NOT ELIGIB LE FOR DEDUCTION U/S 80IA(4) OF THE ACT, 1961. THE RELEVANT FINDINGS OF THE AO ARE AS UNDER: 6.1 FROM THE ACCOUNTS OF THE ASSESSEE IT IS SEEN TH AT THE ASSESSEE HAS SHOWN PROFIT FROM JAYCOACH PROJECT TO THE TUNE OF R S. 2,34,07,151/-. HOWEVER, IN THE COMPUTATION THE ASSESSEE HAS CLAIME D 100% DEDUCTION FROM THE PROFITS OF SUCH PROJECT U/S 80IA OF THE AC T. FURTHER, IN THE NOTES TO ACCOUNTS MENTIONED AS UNDER: COMPANY HAS UNDERTAKEN DEVELOPMENT OF IT. PROJECT NAMED SILVER METROPOLIS SITUATED AT GEORGIAN, MUMBAI WHIC H IS UNDER CONSTRUCTION. SAID PROJECT HAVE BEEN APPROVED AS IT . PARK BY GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUS TRIES VIDE THEIR APPROVAL NO.15/09/2006-ID&ID DATED JULY 24, 2 006, PENDING ISSUE OF NOTIFICATION BY CENTRAL BOARD OF DIRECT TA XES, IN THIS RESPECT, COMPANY HAS RE-SUBMITTED THE APPLICATION F OR AMENDMENT IN ORIGINAL APPLICATION WHICH IS STILL PENDING FOR APPROVAL. AS THIS BEING A PROJECT APPROVAL AS IT. PARK ENTITLED TO IN COME-TAX BENEFIT AS PROVIDED UNDER SUBSECTION 4(III} OF SECTION 80IA OF THE IT. ACT, ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 4 1961. NO INCOME HAVE BEEN RECOGNIZED FROM THIS PROJ ECT IN THE CURRENT YEAR' 6.2 FROM THE ABOVE NOTE IT IS CLEAR THAT THE PROJEC T IN WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IA IS NOT FULLY APPROVE D AND CERTAIN ISSUES HAVE BEEN PENDING WITH THE BOARD. IN LIGHT OF THE A BOVE FACTS, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS A SKED TO FURNISH THE RELEVANT DETAILS IN RESPECT OF CLAIM OF DEDUCTI ON U/S.80IA WITH NECESSARY SUPPORTING EVIDENCES. IT WAS ALSO SHOW CA USED TO THE ASSESSES, IN ABSENCE OF ANY PROPER APPROVAL FROM TH E GOVERNMENT AGENCIES, WHY THE CLAIM OF DEDUCTION U/S,80IA SHOUL D NOT BE DISALLOWED. 6.2 IN RESPONSE, THE ASSESSEE VIDE ITS LETTERS DATE D 02-10-2009 AND 10- 10-2009 SUBMITTED THAT THE EMPOWERED COMMITTEE' WRO NGLY CONCLUDED THAT THE ASSESSEE'S PROJECT IS NOT COVERED UNDER TH E INDUSTRIAL PARK SCHEME 2002, HOWEVER, IT GOT THE RELIEF FROM THE HO NBLE BOMBAY HIGH COURT AGAINST THE ORDER OF THE SAID COMMITTEE, WHIC H IS STILL PENDING WITH THE EMPOWERED COMMITTEE, 6.3 UNDER THE ABOVE CIRCUMSTANCES THE ASSESSEE HAS BEEN GIVEN FINAL OPPORTUNITY VIDE ORDER SHEET NOTING DATED 26-10-200 9 TO SUBMIT THE RELEVANT DETAILS TO SUBSTANTIATE ITS CLAIM OF DEDUC TION. FURTHER, CONSIDERING THE TIME BARRING MATTER INVOLVED IN THIS CASE, THE ASSESSEE WAS SPECIALLY SHOW CAUSED AS TO WHY THE DEDUCTION SHOULD NOT BE D ISALLOWED IN ABSENCE OF ANY PROPER APPROVALS FROM THE RELEVANT A GENCIES BY FIXING THE HEARING ON 16-11-2009 AT 2.30 PM. ON THE SAID DATE NEITHER THE ASSESSEE / ASSESSEE'S REPRESENTATIVE APPEARED NOR FILED ANY WRITTEN SUBMISSION IN THIS BEHALF TO SUBSTANTIATE ITS CLAIM- IN ABSENCE O F ANY PROPERLY EXPLANATION / EVIDENCES THE CLAIM OF THE ASSESSEE I S NOT ALLOWABLE. FURTHER, MORE, ON VERIFICATION OF THE DETAILS, THE EMPOWERED COMMITTED CLEARLY MENTIONED THAT THE PROJECT HAS NOT BEEN COV ERED UNDER INDUSTRIAL PARK SCHEME 2002, HENCE DEDUCTION U/S.80IA OF THE A CT IS NOT ALLOWABLE TO THE ASSESSEE. 6.4 IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR TH AT THE ASSESSEE HAS NO EVIDENCE TO PROVE THAT ITS PROJECT IS COVERED UNDER THE RELEVANT SCHEME AND HENCE IT FAILED TO SUBMIT THE DETAILS AS ASKED FOR ON THE DATE OF HEARING. FURTHER, MORE AFTER GIVING AMPLE TIME THE ASSESSEE FAILED TO SUBMIT ANY DETAILS TO SUBSTANTIATE ITS CLAIM OF DED UCTION. IN ABSENCE OF ANY PROPER EXPLANATION, THE DEDUCTION CLAIMED U/S 8 0IA OF RS. 2,34,07,151/- IS DISALLOWED TO THE ASSESSEE. ACCORDINGLY, PENALTY PROCEEDINGS U/S 271(1)(C) OF T HE ACT ARE BEING SEPARATELY INITIATED FOR FURNISHING INACCURATE PART ICULARS AND CONCEALING THE TAXABLE INCOME. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), BUT COULD NOT SUCCEED , BECAUSE THE CIT(A) FOR DETAILED REASONS RECORDED IN HIS APPELLATE ORDE R DATED 19/07/2010, CONFIRMED ADDITIONS MADE BY THE AO TOWARDS EXCESS C ASH FOUND DURING ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 5 THE COURSE OF SURVEY AMOUNTING TO RS. 1,94,232/-. S IMILARLY, THE LD.CIT(A) HAS CONFIRMED ADDITIONS MADE BY THE AO TOWARDS DISA LLOWANCE OF DEDUCTION CLAIMED U/S 80IA(4) OF THE ACT, 1961, ON THE GROUND THAT THE EMPOWERED COMMITTEE HAS CATEGORICALLY HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR THE BENEFIT OF INDUSTRIAL PARK SCHEME, 2002 AND ACCORDINGLY, WITHDRAWN APPROVAL GRANTED TO THE ASSESSEE VIDE THE IR LETTER DATED 06/01/2009. ALTHOUGH, THE HONBLE BOMBAY HIGH COURT , HAS SET ASIDE THE ORDER OF THE EMPOWERED COMMITTEE VIDE THEIR ORDER D ATED 16/06/2009, BUT ON PERUSAL OF THE ORDER OF THE HONBLE HIGH COURT, IT IS VERY CLEAR THAT THE HIGH COURT HAS SET ASIDE THE ORDER ON THE GROUND TH AT THE ASSESSEE WAS NOT GIVEN REASONABLE OPPORTUNITY OF BEING HEARD, OT HERWISE THE COURT HAS NOT DECIDED THE ISSUE OF ELIGIBILITY FOR DEDUCTION U/S 80IA(4) OF THE ACT, 1961. THEREFORE, HE OPINED THAT THE ASSESSEE HAS NO T FULFILLED CONDITIONS PRESCRIBED U/S 80IA(4) AND ACCORDINGLY, NO REASONS TO DEVIATE FROM THE FINDINGS RECORDED BY THE AO WHILE REJECTING DEDUCTI ON CLAIMED U/S 80IA(4) OF THE ACT, 1961. 5. NONE APPEARED FOR THE ASSESSEE, WE HAVE HEARD TH E LD. DR, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE T HROUGH ORDERS OF THE AUTHORITIES BELOW. AS REGARDS ADDITIONS MADE TOWARD S EXCESS CASH FOUND DURING THE COURSE OF SURVEY OF RS. 1,94,232/-, THE AO AS WELL AS THE LD. CIT(A) HAD RECORDED CATEGORICAL FINDING IN THE LIGH T OF STATEMENT OF SHRI KAMLESH SHAH, DIRECTOR OF THE COMPANY THAT THE ASSE SSEE WAS HAVING EXCESS CASH DURING THE COURSE OF SURVEY FOR WHICH N O EXPLANATION HAS ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 6 BEEN OFFERED. WE FURTHER NOTED THAT ALTHOUGH THE A SSESSEE CLAIMS TO HAVE TAKEN THE BENEFIT OF TELESCOPING TOWARDS INCOME OFF ERED FROM SOLITAIRE PROJECT, BUT WHILE RECORDING STATEMENT DURING THE C OURSE OF SURVEY IT WAS THE CASE OF THE ASSESSEE THAT EXCESS CASH FOUND DUR ING THE COURSE OF SURVEY REPRESENTS UNACCOUNTED INCOME. WE, THEREFORE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ERROR IN THE FINDI NGS OF FACT RECORDED BY THE LOWER AUTHORITIES AND HENCE, WE AGREE WITH THE FINDING OF THE LD. CIT(A) AND REJECT GROUND TAKEN BY THE ASSESSEE. IN SO FAR AS REJECTION OF DEDUCTION CLAIMED U/S 80IA(4)(III) IN RESPECT OF IT S PROJECT SILVER METROPOLIS SITUATED AT GEORGIAN, MUMBAI, WE FIND THAT ALTHOUGH MINISTRY OF COMMERCE AND INDUSTRY, GOVERNMENT OF INDIA VIDE LET TER DATED 24/07/2006 GRANTED APPROVAL TO THE SAID PARK STATIN G THAT THE PROJECT IS COVERED UNDER THE INDUSTRIAL PARK SCHEME, 2002 AND ACCORDINGLY, ENTITLED FOR DEDUCTION 80IA(4)(III) OF THE ACT, BUT SUBSEQUE NTLY APPROVAL GRANTED BY THE EMPOWERED COMMITTEE HAS BEEN WITHDRAWN VIDE THE IR LETTER DATED 06/01/2009, ON THE GROUND THAT THE ASSESSEE IS NOT ELIGIBLE UNDER INDUSTRIAL PARK SCHEME, 2002. WE, FURTHER, NOTED TH AT ALTHOUGH THE ASSESSEE HAS GOT RELIEF FROM HONBLE BOMBAY HIGH CO URT AGAINST THE ORDER OF THE EMPOWERED COMMITTEE, IN RESPECT OF WIT HDRAWAL OF APPROVAL GRANTED UNDER INDUSTRIAL PARK SCHEME, 2002 BUT SUCH RELIEF HAS BEEN GRANTED ON TECHNICAL GROUNDS FOR NOT ALLOWING REASO NABLE OPPORTUNITY BEING HEARD TO THE ASSESSEE. EXCEPT THIS, THE FINDI NGS OF THE EMPOWERED COMMITTEE OF MINISTRY OF COMMERCE AND INDUSTRY WAS NOT NEGATED BY THE ITA NO.7169/MUM/2010 M/S. SILVER LAND DEVELOPERS PVT.LTD. 7 HONBLE BOMBAY HIGH COURT IN RESPECT OF ELIGIBILITY FOR DEDUCTION U/S 80IA(4)(III) OF THE I.T ACT, 1961. WE, FURTHER NOT ED THAT THE AO AS WELL AS THE LD. CIT(A) HAD CATEGORICALLY RECORDED THE FACT THAT THE ASSESSEE HAS NOT FULFILLED CONDITIONS PRESCRIBED U/S 80IA(4) IN ORDER TO BE ELIGIBLE FOR DEDUCTION IN RESPECT OF PROFIT DERIVED FROM ITS IND USTRIAL PROJECT. WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE LD. CIT(A). H ENCE, WE ARE INCLINED UPHOLD FINDINGS OF THE LD. CIT(A) AND REJECT GROUND TAKEN BY THE ASSESSEE 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 /07/ 2019 SD/- (PAWAN SINGH) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 31/07/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//