DCIT CC 3(4) CEN RG 3, MUMBAI V. DEV LAND AND HOUSING P.LTD, MUMBAI

ITA 7179/MUM/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2890 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Loose papers; Document seized; Accommodation entries; Onus to prove; Bogus loan; Documents seized
• Section: 143(3); 133A; 153A; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO A.Y. APPELLANT RESPONDENT 7177/MUM/16 2009-10 DEPUTY COMMISSIONER OF INCOME TAX, CC -3 (4), CENTRAL RANGE-3, MUMBAI M/S. DEV LAND AND HOUSING P LTD., 10 TH FLOOR, DEV PLAZA, OPP: FIRE BRIGADE, S V ROAD, ANDHERI, MUMBAI [PAN: AACCD3656L] 7178/MUM/16 2010-11 7179/MUM/16 2013-14 7180/MUM/16 2013-14 M/S. MARS REALTORS PVT. LTD., 10 TH FLOOR, DEV PLAZA, OPP: FIRE BRIGADE, S V ROAD, ANDHERI(W), MUMBAI [PAN: AAECM5228K] APPELLANT BY : SHRI T. KIPGEN, CIT-DR SHRI CHAITANYA ANJARIA, SR.AR-CIT RESPONDENT BY : SHRI VIJAY MEHTA DATE OF HEARING : 10-01-2019 DATE OF PRONOUNCEMENT : 05 - 04-2019 O R D E R PER G.S. PANNU, VICE PRESIDENT: 1. THE CAPTIONED ARE FOUR APPEALS FILED BY THE REVENUE PERTAINING TO TWO DIFFERENT ASSESSEES BELONGING TO THE SAME GROUP IN RELATION TO THE ASSESSMENT YEARS 2009-10, 2010-11 AND 2013-14. SIN CE THE APPEALS INVOLVE A COMMON ISSUE, THEY HAVE BEEN CLUBBED AND HEARD TO GETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NOS. 7177 TO 7180/MUM/2016 : 2 : FIRSTLY, WE TAKE UP THE APPEALS IN THE CASE OF DEV LAND AND HOUSING PVT. LTD., FOR ASSESSMENT YEARS 2009-10, 2010-11 AND 201 3-14. THE FACTS BEING SAME IN ALL THE YEARS, WE TAKE ASSESSMENT YEAR 2009 -10 (ITA NO. 7177/M/ 2016) AS A LEAD CASE. THE SAID APPEAL IS DIRECTED A GAINST AN ORDER PASSED BY THE CIT(A)- 51, MUMBAI DATED 26.09.2016, WHICH IN T URN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 31.03.2016 . 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE FOR ASS ESSMENT YEAR 2009-10 READ AS UNDER:- (I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), ERRED IN DELETING THE ADDITION MADE ON ACCO UNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT AMOUNTING TO RS. 8.70 CRORE ON THE GROUND THAT 'ON MONEY' GENERATED IN AY 2006-07 AND AY 2007-08 ARE THE SOUR CE OF BOGUS LOAN SHOWN IN THE AY 2009-10 WITHOUT APPRECIATING THE FACT THAT D IRECTOR OF ASSESSEE COMPANY ADMITTED IN STATEMENT RECORDED U/S. 132(4) DURING T HE SEARCH PROCEEDINGS REGARDING UNDISCLOSED INCOME OF RS.8.70 CRORES FOR A.Y. 2009-10 AND ALSO NOT RELYING ON THE DECISION OF SUPREME COURT IN THE CAS E OF B. KISHORE KUMAR VS. DCIT 234 TAXMAN 771 WHEREIN SUPREME COURT DISMISSED SLP OF ASSESSEE AGAINST HIGH COURT ORDER HOLDING THAT WHEN THE ASSESSEE HIMSELF ADMITTED IN SEARCH IN SWORN STATEMENT ABOUT UNDISCLOSED INCOME, IT HAS TO BE TA XED ON BASIS OF ADMISSION WITHOUT SCRUTINSING DOCUMENTS.' (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), ERRED IN PLACING RELIANCE ON PAPER FOUND IN SURVEY REGARDING ON-MONEY RECEIVED IN A.YS. 2006-07 & 2007-08 IGNORING THE FA CT THAT THIS PAPER WAS NOT FOUND DURING SEARCH CONDUCTED IN 2013 AND ALSO PAPE R DOES NOT CONTAIN ALL THE DETAILS LIKE DATES OF RECEIPT OF ON-MONEY, THE NAME S OF THE PERSONS GIVING ON- MONEY AND THE ASSESSEE NOT GIVING ANY OTHER CORROBO RATIVE EVIDENCES OF ON- MONEY RECEIVED IN EARLIER YEARS. IT IS ASSESSEE ONU S TO PROVE IT INDEPENDENTLY AND NOT OF THE AO AS HELD BY CIT(A). (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), ERRED IN NOT APPRECIATING THAT U/S. 68 OF T HE IT ACT, IT IS ONUS OF THE ASSESSEE TO PROVE THE CREDIT ENTRIES AND IT CANNOT BE HELD AS PROVED BY MERE ENTRIES FOUND IN SURVEY REGARDING ON-MONEY RECEIVED IN EARLIER YEARS WITHOUT ANY CORROBORATIVE EVIDENCE AND ALSO CIT(A) FAILED TO AP PRECIATE THAT ASSESSEE NEVER ITA NOS. 7177 TO 7180/MUM/2016 : 3 : SHOWED IT AS INCOME IN THE EARLIER YEAR AND ALSO DI D NOT PROVE THAT AMOUNT RECEIVED IN EARLIER YEARS WERE NOT SPENT ELSEWHERE AND REMAINED INTACT AND ALSO FAILED TO PROVE NEXUS. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE RESPON DENT-ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE CO MPANIES ACT, 1956 AND IS, INTERALIA, ENGAGED IN THE BUSINESS OF DEVEL OPMENT OF LAND AND CONSTRUCTING RESIDENTIAL FLATS AND COMMERCIAL COMPL EXES. A SEARCH ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT BY THE DEPART MENT IN THE PREMISES OF THE ASSESSEE ON 10.12.2013. IN A STATEMENT RECORDED U/S 132(4) OF THE ACT AT THE TIME OF SEARCH, THE DIRECTOR OF THE ASSESSEE -COMPANY ADMITTED THAT ASSESSEE-COMPANY HAD RECEIVED ON-MONEY TO THE EXTEN T OF RS. 33,05,10,000/- FROM ASSESSMENT YEAR 2006-07 TO 2012 -13 FROM SOME OF ITS CUSTOMERS AND THIS ON-MONEY WAS INTRODUCED IN THE B OOKS OF ACCOUNT IN THE FORM OF UN-SECURED LOANS WHICH WERE NOTHING BUT ACCOMMODATION ENTRIES I.E., CASH EQUIVALENT TO THE STATED LOAN WA S GIVEN TO ACCOMMODATION ENTRY PROVIDER. SUBSEQUENTLY, A SURVE Y ACTION WAS CARRIED OUT BY THE DEPARTMENT AT THE BUSINESS PREMISES OF T HE ASSESSEE ON 05.10.2015 IN CONNECTION WITH PURCHASE OF TRANSFERA BLE DEVELOPMENT RIGHTS (HEREINAFTER REFERRED TO AS TDR) BY THE AS SESSEE COMPANY FOR WHICH IT WAS FOUND TO HAVE PAID CASH OF RS. 2.20 CRORES. THE STATEMENT RECORDED AND DOCUMENTS IMPOUNDED DURING SURVEY REVEALED THAT ON-MONEY WAS RECEIVED BY THE ASSESSEE IN CONNECTION WITH CERTAIN PROJECTS. AS A CONSEQUENCE, PROCEEDINGS U/S 153A OF THE ACT WERE I NITIATED BY THE ASSESSING OFFICER FOR THE PERIOD FROM ASSESSMENT YE ARS 2008-09 TO 2013-14 AND IN RESPONSE, ASSESSEE FILED RETURNS FOR EACH OF THE SAID ASSESSMENT YEARS ON18.12.2015 I.E. AFTER THE SURVEY CONDUCTED IN THE PREMISES OF THE ASSESSEE. IN RETURNS OF INCOME SO FILED U/S 153A OF THE ACT FOR ASSESSMENT ITA NOS. 7177 TO 7180/MUM/2016 : 4 : YEAR 2008-09 TO 2013-14, ASSESSEE OFFERED ADDITIONA L INCOME ON ACCOUNT OF ON-MONEY AS UNDER: SR. NO. A.Y. AMOUNT (RS) REMARKS 1. 2006-07 6,92,80,000 NO RETURN OF INCOME WAS FILED AS THE PERIOD WAS FALLING BEYOND BLOCK PERIOD. 2. 2007-08 16,10,90,000 3. 2010-2011 3,92,90,000 4. 2011-2012 2,71,50,000 5. 2012-2013 3,37,00,000 33,05,10,000 4. THE POSITION OF UNSECURED LOANS SHOWN BY THE ASSESS EE DURING ASSESSMENT YEARS 2009-10 TO 2013-14 WAS AS UNDER: SR. NO. A.Y. AMOUNT (RS) REMARKS 1. 2009-2010 8,70,00,000 2. 2010-2011 10,50,00,000 3. 2012-2013 2,00,00,000 4. 2013-2014 11,54,00,000 LOAN IS REFLECTED IN THE BOOKS OF MARS REALTORS PVT. LTD 32,74,00,000 SINCE THE DIRECTOR OF THE ASSESSEE-COMPANY ADMITTED IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT THAT ON-MONEY RECEIV ED WERE INTRODUCED IN THE ACCOUNT BOOKS IN THE FORM OF UNSECURED LOAN, TH E ASSESSING OFFICER ISSUED NOTICES FOR ASSESSMENT YEARS 2009-10, 2010-1 1 AND 2013-14 SHOW CAUSING AS TO WHY ADDITION ON ACCOUNT OF BOGUS LOAN S SHOULD NOT BE MADE U/S 68 OF THE ACT. IN REPLY, ASSESSEE SUBMITTED THA T ON-MONEY, AS EVIDENCED BY PAPERS IMPOUNDED IN SURVEY CONDUCTED ON 05.10.20 15, WHEREVER RECEIVED BY ASSESSEE FROM ASSESSMENT YEARS 2008-09 TO 2013-14 WAS OFFERED TO TAX IN RESPECTIVE ASSESSMENT YEARS. IT W AS SUBMITTED THAT ON-MONEY RECEIVED IN ASSESSMENT YEARS 2006-07 AND 2 007-08 WAS BEYOND ITA NOS. 7177 TO 7180/MUM/2016 : 5 : THE BLOCK PERIOD. IT WAS SUBMITTED THAT THE BOGUS L OANS OBTAINED BY THE ASSESSEE ARE ONLY APPLICATION OF ABOVE INCOME BY WA Y OF ON-MONEY AND HENCE NO SEPARATE ADDITION WAS REQUIRED TO BE MADE IN RESPECT OF BOGUS LOANS U/S 68 OF THE ACT. THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSIONS OF ASSESSEE, AS ACCORDING TO HIM, IT WA S NOT POSSIBLE THAT THE ASSESSEE HAD RECEIVED HUGE ON-MONEY IN ASSESSMENT Y EARS 2006-07 AND 2007-08 AND NO ON MONEY IN ASSESSMENT YEARS 2008-09 AND 2009-10. THE ASSESSING OFFICER WAS OF THE VIEW THAT ON-MONEY REC EIVED IN ASSESSMENT YEARS 2006-07 AND 2007-08 WAS UTILIZED FOR SOME OTH ER PURPOSE AND THE SOURCE OF BOGUS LOANS OBTAINED BY THE ASSESSEE IN A SSESSMENT YEARS 2009- 10 AND 2010-11 WAS NOT KNOWN, AND ACCORDINGLY MADE ADDITION U/S 68 OF THE ACT FOR BOGUS LOANS TAKEN DURING THE YEAR. 5. BEFORE THE CIT(A), ASSESSEE CONTENDED THAT THE STAT EMENT DEPOSED DURING THE SEARCH SHOWED THAT THE SOURCE OF OBTAINI NG BOGUS LOANS WAS THE ON-MONEY RECEIVED BY THE ASSESSEE. IT WAS FURTHER S UBMITTED THAT DURING THE SURVEY PROCEEDINGS AN EXCEL SHEET WAS FOUND B Y THE SURVEY TEAM WHEREIN COMPLETE DETAILS OF ON MONEY TAKEN BY THE A SSESSEE, INCLUDING DATE, NAME OF PERSON AND PROJECT FOR WHICH ON MONEY WAS TAKEN, WAS MENTIONED. IN VIEW OF THE SAME, IT WAS SUBMITTED TH AT THE ON-MONEY GENERATED FROM SALE OF FLATS WAS USED FOR OBTAINING LOANS. IT WAS FURTHER SUBMITTED THAT THE ON MONEY EARNED BY ASSESSEE FROM ASSESSMENT YEARS 2008-09 TO 2013-14 WAS OFFERED TO TAX IN THE RESPEC TIVE YEARS. IT WAS FURTHER SUBMITTED THAT ON-MONEY RECEIVED IN ASSESSM ENT YEARS 2006-07 AND 2007-08 COULD NOT BE OFFERED TO TAX. MERELY BE CAUSE ON-MONEY WAS NOT OFFERED TO TAX, IT CANNOT BE SAID THAT THE SOUR CE OF BOGUS LOAN IS NOT PROVED. IT WAS FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2012-13, THE ITA NOS. 7177 TO 7180/MUM/2016 : 6 : ASSESSING OFFICER HAS ACCEPTED THE CONTENTION OF TH E ASSESSEE THAT THE SOURCE OF BOGUS LOAN IS ON MONEY RECEIVED BY ASSESS EE AND HAS NOT MADE ANY ADDITION U/S 68 OF THE ACT. ASSESSEE ALSO CONT ENDED THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT ON- MONEY EARNED WAS SPENT ELSEWHERE. FURTHER, THE FACT THAT ON-MONEY IS USED FOR OBTAINING BOGUS LOANS HAS BEEN ACCEPTED BY ASSESSING OFFICER IN ASSESSMENT YEAR 2012-13 SINCE ON-MONEY OFFERED BY A SSESSEE IN ASSESSMENT YEAR 2012-13 HAS BEEN ACCEPTED BY THE AS SESSING OFFICER AS SUCH AND NO SEPARATE ADDITION HAS BEEN MADE IN ASSE SSMENT YEAR 2012-13 U/S 68 OF THE ACT ON ACCOUNT OF BOGUS LOAN TAKEN DU RING THE YEAR. IT WAS FURTHER SUBMITTED THAT A LOOSE PAPER, WHICH IS PART OF THE IMPOUNDED DOCUMENTS FOUND DURING SURVEY, GIVES THE DETAIL OF THE UTILIZATION OF THE TOTAL ON-MONEY RECEIVED OF RS. 33.05 CRORES. IT IS CLEARLY MENTIONED THEREIN THAT OUT OF THE ON-MONEY RECEIVED, ACCOMMODATION EN TRIES OF RS. 29.24 CRORES HAVE BEEN OBTAINED. ASSESSEE EXPLAINED THAT THIS PAGE ALSO SHOWS THAT ON-MONEY HAS ALSO BEEN USED FOR PURCHASING TDR S TO THE EXTENT OF RS.2.20 CRORES. 6. IT WAS FURTHER SUBMITTED THAT THE SEIZED DOCUMENTS BEING RELIED BY THE ASSESSING OFFICER FOR MAKING ADDITION OUGHT TO BE ACCEPTED FULLY. ONCE IT IS ACCEPTED ON THE BASIS OF SEIZED PAPER THAT ON -MONEY HAS BEEN RECEIVED BY THE ASSESSEE THEN IT IS NOT OPEN FOR THE ASSESSI NG OFFICER TO DISREGARD THE SUBSEQUENT NOTINGS IN THE SEIZED DOCUMENT SHOWI NG THE UTILIZATION OF ON-MONEY FOR OBTAINING BOGUS LOANS. 7. THE CIT(A) ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND DELETED THE ADDITION MADE BY ASSESSING OFFICER U/S 68 OF THE AC T. HE ALSO REJECTED THE ITA NOS. 7177 TO 7180/MUM/2016 : 7 : CONCLUSION OF THE ASSESSING OFFICER THAT NO REASONA BLE PERSON WOULD KEEP ON MONEY RECEIVED IN ASSESSMENT YEARS 2006-07 AND 2 007-08 FOR SO MUCH TIME. THE CIT(A) WAS OF THE VIEW THAT THE ONUS TO P ROVE THAT MONEY WAS USED SOMEWHERE ELSE WAS ON THE ASSESSING OFFICER SI NCE THE NOTINGS ON THE SEIZED DOCUMENTS DEMONSTRATED THAT ON-MONEY RECEIVE D BY ASSESSEE WAS USED FOR OBTAINING BOGUS LOANS. HE FURTHER HELD THA T THE STATEMENTS RECORDED DURING THE SEARCH AND SURVEY PROCEEDINGS A LSO SUPPORTED THE CONTENTION OF THE ASSESSEE THAT ON MONEY WAS USED F OR OBTAINING BOGUS LOANS. IN VIEW OF THE ABOVE, CIT(A) DELETED THE ADD ITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT AGAINST WHICH T HE REVENUE IS IN APPEAL BEFORE US. 8. BEFORE US, LD. DR RELIED UPON THE REASONING OF THE ASSESSING ORDER IN ORDER TO JUSTIFY THE IMPUGNED ADDITION AND SINCE WE HAVE ALREADY NOTED THE SAME IN EARLIER PARAS, THE SAME IS NOT BEING REPORT ED FOR THE SAKE OF BREVITY. THE LD. DR FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF B. KISHORE KUMAR V S. DCIT IN ITA NO. 738 TO 744 OF 2014, WHICH HAS ALSO BEEN REFERRED IN THE ASSESSMENT ORDER, TO SAY THAT WHEN THERE IS A CLEAR AND CATEGORICAL ADMI SSION OF THE UNDISCLOSED INCOME BY THE ASSESSEE HIMSELF, THERE IS NO NECESSI TY TO SCRUTINIZE THE DOCUMENTS. 9. ON THE OTHER HAND LD.REPRESENTATIVE FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE, DURING THE SEARCH ITSELF, IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT HAS ADMITTED THAT ACCOMMODATION L OANS WERE OBTAINED FROM THE ON-MONEY RECEIVED BY THE ASSESSEE FROM SAL E OF FLATS. HE ALSO ITA NOS. 7177 TO 7180/MUM/2016 : 8 : REFERRED TO THE RELEVANT DEPOSITION MADE U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH WHICH IS REPRODUCED HEREUNDER: STATEMENT OF SHRI VIJAY THAKKAR RECORDED U/S 132(4) OF THE ACT ON 14.12.2013 Q-14 IN RESPONSE TO THE QUESTION ABOVE YOU HAVE STA TED THAT YOU HAD TAKEN AN ACCOMMODATION ENTRY IN THE NATURE OF UNSE CURED LOAN' FROM M/S KUSH GEMS P LTD BY PAYING AN EQUIVALENT AM OUNT IN CASH. YOU ARE REQUESTED TO EXPLAIN THE SOURCE OF CASH PAY MENT TO M/S KUSH GEMS P LTD. ANS. SIR, THE CASH WAS PAID TO GET THE ACCOMMODATIO N ENTRY IN THE NATURE OF UNSECURED LOANS WAS GENERATED OUT OF THE ON MONEY RECEIVED FROM MY BUSINESS OPERATIONS AND THE ON MO NEY' RECEIVED IS MY UNACCOUNTED INCOME/RECEIPTS...' IT WAS SUBMITTED THAT SIMILAR REPLY WAS GIVEN BY TH E ASSESSEE IN RESPONSE TO QUESTION NO. 17, 20, 23, ETC. IN RESPECT OF OTHER L OANS (PLACED AT PAGE NO. 5, 11, 12 AND 13 OF THE PAPER BOOK).IN VIEW OF THE ABO VE, IT WAS SUBMITTED THAT ACCOMMODATION LOANS WERE OBTAINED FROM ON-MONE Y RECEIVED BY THE ASSESSEE. 10. FURTHER, IT WAS POINTED OUT THAT DURING THE COURSE OF SURVEY ACTION, CERTAIN LOOSE PAPERS WERE ALSO FOUND WHICH ARE PLAC ED IN THE PAPER BOOK AT PAGES 61 TO 71 WHICH CLEARLY REFLECT THE DETAILS OF ON-MONEY RECEIVED IN VARIOUS YEARS. AN EXCEL SHEET CONTAINING DETAILS SUCH AS NAME OF THE BUYER, CASH RECEIPT DATE, AGREEMENT DATE, REGISTRAT ION DATE, FLAT / OFFICE NO, AREA, TOTAL AGREEMENT VALUE, CASH COMPONENT, TO TAL DEAL VALUE (PLACED AT PAGES 63 TO 67 OF THE PAPER BOOK) WHICH CLEARLY GIVE EVIDENCE OF ON- MONEY RECEIVED IN VARIOUS YEARS WAS ALSO REFERRED T O. ITA NOS. 7177 TO 7180/MUM/2016 : 9 : 11. IT WAS ALSO POINTED OUT THAT THE COPY OF THE SEIZED PAPER PLACED AT PAGE 71 OF THE PAPER BOOK CLEARLY SHOWS UTILIZATION OF ON-MONEY RECEIVED BY ASSESSEE. IT IS EVIDENT FROM THE SAID PAPER THAT THE ON-MONEY RECEIVED BY THE ASSESSEE WAS UTILIZED FOR OBTAINING ACCOMMOD ATION ENTRIES OF LOANS. IT IS SUBMITTED THAT ONCE THE ASSESSING OFFICER ACC EPTS THAT ASSESSEE HAS RECEIVED ON-MONEY ON THE BASIS OF THE SEIZED DOCUME NTS, IT CANNOT DENY THE FACT OF UTILIZATION OF ON-MONEY WHICH IS ALSO E VIDENT FROM THE VERY SAME SEIZED MATERIAL. THE RELEVANT PORTION OF THE STATEM ENT RECORDED DURING THE COURSE OF SURVEY WAS RELIED UPON, WHICH IS REPRODUC ED HEREUNDER: STATEMENT OF SHRI VIJAY THAKKAR RECORDED U/S 131 OF THE ACTON 05.10.2015 Q23 KINDLY PROVIDE THE DETAILS ABOUT THE MANNER I N WHICH THE PAYMENT OF INR 2.20 CRORES WAS MADE TO BHOOMI GROUP ANS. SIR, THE TDR WAS PURCHASED AT THE RATE OF 5400 RUPEES PER SQUARE FEET. THE PART OF THE PAYMENT WAS MADE IN CASH IE. OUT OF INR 5,400/-PER SFT THE AMOUNT AS PER THE RATE INR1,400/-PER SQFT W AS PAID IN CASH. OUT OF TOTAL TDR PURCHASED IE. 1460 SQUARE METER OF TDR TH AT WASPURCHASED AMOUNT OF INR2.20 CRORE (15715 SFT *1400 - RS 2.20, 00,000/-) WAS PAID IN CASH AT THE RATE OF INRI,400 PER SFT (1460 SQUARE M ETER =15715 SQUARE FEET). Q24 AS THE PAGE SHOWS THAT INR2.20 CRORES OF CASH W AS PAID AS A PART OF TOTAL CONSIDERATION FOR THE TDR. KINDLY PROVIDE THE SOURCE OF THE SAME. ANS. FEW CLIENTS WHO INSIST ON PAYING THE PART OF T HE CONSIDERATION FOR PURCHASE OF FLAT IN CASH, POPULARLY KNOWN AS 'ON MO NEY' IS THE SOURCE FOR MAKING THE ABOVE PAYMENT FOR THE TDR IN CASH... Q26 DURING THE SURVEY PROCEEDINGS U/S 133A SOME LOO SE PAPERS FOUND FROM YOUR PREMISES, ANNEXURISED AS A-1 CONTAINING 1 -69 PAGES PLEASE CONFIRM THE SAME AND EXPLAIN THE NATURE OF THE PAPE R AND THE AMOUNT THAT IS MENTIONED ANS. SIR, I CONFIRM THAT THE PAPERS THAT WERE FOUND FROM THE PREMISES HAS BEEN IMPOUNDED AND SHOWN TO ME. THESE PAPERS RELATE S TO THE SALE ITA NOS. 7177 TO 7180/MUM/2016 : 10 : CONSIDERATION OF VARIOUS UNITS IN VARIOUS PROJECTS IN M/S. DEV LAND AND HOUSING PVT. LTD. THE HAND WRITTEN PAPERS PASTED ON A BLANK SHEET REPRESENTS THE TOTAL AMOUNT OF CONSIDERATION IE. RE CEIVED FOR THE SALE OF UNIT IN VARIOUS PROJECTS AND THE COPIES OF PAGES OF THE AGREEMENT REPRESENTS THE VALUE AT WHICH THE AGREEMENT WAS DON E. HENCE IN NUTSHELL THE AMOUNT IE HAND WRITTEN AND PASTED ON THE PLAIN SHEET REPRESENTS THE TOTAL CASH AMOUNT AND CHEQUE AMOUNT AS CONSIDERATIO N OF THE SALE OF FLATS IN VARIOUS PROJECTS. THE LAST THREE PAGES REP RESENT THE VOUCHER OF CASH EXPENSES TO HASHMUKHRAI & CO. AND TO HARISHCHA NDRA BALAJIANGRE. Q.27 AS PER THE REPLY OF YOUR ABOVE QUESTION KINDLY SHOW THE ENTRIES IN THE BOOKS OF ACCOUNT REFLECTING THE CASH RECEIVED A S SALE CONSIDERATION OF FLATS IN VARIOUS PROJECTS IN DEV LAND AND HOUSING P VT. LTD. ANS. SIR, THE CASH RECEIVED AS 'ON MONEY' AS A PART OF SALE CONSIDERATION OF FLAT IN VARIOUS PROJECTS ARE NOT ACCOUNTED AND O UT FORMING PART OF THE REGULAR BOOKS OF ACCOUNTS...' STATEMENT OF SHRI VJAY THAKKAR RECORDED U/S 131 OF THE ACTON 11.12.2015 .. Q.5 I AM SHOWING YOU THE STATEMENT RECORDED DURI NG THE COURSE OF SURVEY PROCEEDINGS CONDUCTED AT YOUR OFFICE PREMISE S ON 05.10.2015 IN REPLY TO THE Q.24 THEREOF YOU HAVE STATED THAT THE SOURCE OF THE ABOVE INCOME IS 'ON MONEY: KINDLY STATE WHETHER 'ON MONEY ' WAS RECEIVED IN ALL THE YEARS? ANS. I HAVE RECEIVED 'ON MONEY' IN SOME YEARS AND T HIS CAN BE SEEN FROM MONEY' AS UNDER SR. NO. F.Y. A.Y. AMOUNT (RS) 1. 2005-2006 2006-2007 6,92,80,000 2. 2006-2007 2007-2008 16,10,90,000 3. 2007-2008 2010-2011 3,92,90,000 4. 2010-2011 2011-2012 2,71,50,000 5. 2011-2012 2012-2013 3,37,00,000 TOTAL 33,05,10,000 ITA NOS. 7177 TO 7180/MUM/2016 : 11 : AS CAN BE SEEN ABOVE, A LOT OF CASH GOT GENERATED O UT OF ON MONEY OVER THE COURSE OF YEARS. IN ORDER TO REDUCE THE RISK OF KEE PING SO MUCH CASH IN HAND, I OBTAINED ACCOMMODATION ENTRIES IN FORM OF UNSECURED LOANS WHICH WERE ARRANGED FROM SEVERAL PARTIES. THE FACTS RELATING T O THE SAME ARE MENTIONED IN MY STATEMENT RECORDED DURING THE SEARCH ACTION C ARRIED OUT AT MY PREMISES. THE ENTRIES WERE ARRANGED IN THE BOOKS OF MY COMPANIES, DEV LAND AND HOUSING PRIVATE LIMITED AND MARS REALTORS PRIVA TE LIMITED AMOUNTING TO INR 34.44 CRORES. OUT OF THE REMAINING AVAILABLE CASH, I HAVE PAID IN R 2.20 CRORES TO MR MANOJ GOURAV, A BROKER, FOR PURCHASE OF TDR DURING FY 201 5-16WHICHIS DULY MENTIONED DURING LAST SURVEY PROCEEDINGS CONDUCTED ON 5.10.2015. IT IS EVIDENT FROM THE ABOVE STATEMENTS RECORDED OF SHRI VIJAY THAKKAR (DIRECTOR OF THE ASSESSEE COMPANY) DURING THE SEARC H AND SURVEY PROCEEDINGS THAT THE SOURCE OF CASH OF ACCOMMODATIO N ENTRIES WAS STATED TO BE ON-MONEY GENERATED FROM SALE OF FLATS. 12. OUR ATTENTION OF ON-MONEY RECEIVED AND ITS UTILIZAT ION FOR OBTAINING ACCOMMODATION ENTRIES, WHICH IS AS UNDER: SR. NO. A.Y. RECEIPTS ON ACCOUNT OF ON MONEY PAYMENT FOR THE PURPOSE OF ACCOMMODATION LOANS INCOME TAXED BY THE AO DLH MARS DLH MARS 1. 2006 - 07 6,92,80,000 - - - - 2. 2007 - 08 16,10,90,000 - - - - 3. 2008 - 09 - - - - - 4. 2009 - 10 - 8,70,00,000 - 8,70,00,000 - 5. 2010 - 11 3,92,90,000 10,50,00,000 - 10,50,00,000 - 6. 2011 - 12 2,71,50,000 - - 2,71,50,000 - 7. 2012 - 13 3,37,00,000 2,00,00,000 - 3,37,00,000 - 8. 2013 - 14 - 11,54,00,000 11,54,00,000 11,54,00,000 13. IT WAS SUBMITTED THAT IN ASSESSMENT YEAR 2011-12, T HE ASSESSING OFFICER HAS ACCEPTED THE ADDITIONAL INCOME ON ACCOU NT OF ON-MONEY OFFERED BY THE ASSESSEE EVEN THOUGH NO BOGUS LOAN W AS TAKEN IN THE SAID YEAR. SIMILARLY, IN ASSESSMENT YEAR 2012-13 ALSO, ASSESSING OFFICER HAS ITA NOS. 7177 TO 7180/MUM/2016 : 12 : ACCEPTED THE ADDITIONAL INCOME OF RS.3,37,00,000/- ON ACCOUNT OF ON-MONEY OFFERED BY THE ASSESSEE. IT IS PERTINENT T O NOTE THAT IN ASSESSMENT YEAR 2012-13, THE ASSESSEE HAS ALSO OBTA INED ACCOMMODATION LOAN OF RS. 2,00,00,000/-. THE ASSESSING OFFICER HA S ACCEPTED THE FACT THAT ON MONEY WAS UTILIZED TO OBTAIN ACCOMMODATION ENTRI ES SINCE NO ADDITION HAS BEEN MADE ON ACCOUNT OF ACCOMMODATION LOANS IN ASSESSMENT YEAR 2012-13 BY THE ASSESSING OFFICER. IT WAS FURTHER SU BMITTED THAT THE SEIZED PAPER REFLECTING ON-MONEY RECEIVED BY THE ASSESSEE HAS ALSO BEEN ACCEPTED BY THE ASSESSING OFFICER SINCE INCOME OFFE RED OF RS. 3,37,00,000/- ON ACCOUNT OF ON MONEY HAS BEEN ACCEPTED BY HIM. 14. IT WAS FURTHER POINTED OUT THAT THE ASSESSING OFFIC ER'S CONTENTION IS THAT ON MONEY RECEIVED IN ASSESSMENT YEARS 2006-07 AND 2007-08 WAS UTILIZED FOR SOME OTHER PURPOSE SINCE NO PERSON WOU LD KEEP CASH FOR SO MUCH TIME. THEREFORE, HE WAS OF THE VIEW THAT THE S OURCE OF ACCOMMODATION ENTRIES FOR ASSESSMENT YEAR 2009-10 A ND 2010-11 REMAINS UNEXPLAINED. IN THIS REGARD, IT WAS SUBMITTED THAT ONCE THE SEIZED DOCUMENT AT PAGES 71 OF THE PAPER BOOK CLEARLY SHOW S THAT THE ON MONEY HAS BEEN USED FOR OBTAINING ACCOMMODATION ENTRIES, THEN THE ONUS IS HEAVILY ON THE DEPARTMENT TO DISPROVE THE SAID FACT . THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO DISPROVE THE FACT THAT ON-MONEY WAS UTILIZED FOR OBTAINING ACCOMMODATION ENTRY. 15. THE LD.REPERSENTATIVE ONLY REASON FOR NOT ACCEPTING THE FACT THAT ON MONEY RECEIVED IN ASSESSMENT YEARS 2006-07 AND 2007 -08 WAS NOT UTILIZED FOR OBTAINING BOGUS LOANS SEEMED TO BE THAT THE RET URNS FOR ASSESSMENT YEARS 2006-07 AND 2007-08 COULD NOT BE FILED SINCE THE SAME WERE NOT ITA NOS. 7177 TO 7180/MUM/2016 : 13 : COVERED IN THE PERIOD OF SEARCH AND AS A RESULT, ON MONEY RECEIVED IN ASSESSMENT YEARS 2006-07 AND 2007-08 COULD NOT BE O FFERED TO TAX. IN THIS REGARD, IT WAS SUBMITTED THAT MERELY BECAUSE AN AMO UNT COULD NOT BE TAXED DOES NOT MEAN THAT THE SEIZED PAPER WHICH CLE ARLY SHOWS THAT ON MONEY WAS UTILIZED FOR OBTAINING ACCOMMODATION ENTR IES, SHOULD BE DISBELIEVED. 16. THE ASSESSING OFFICER HAS ALSO ALLEGED THAT IT IS B EYOND PROBABILITY TO BELIEVE THAT IN ASSESSMENT YEARS 2008-09 AND 2009-1 0, THE ASSESSEE HAS NOT RECEIVED ANY ON MONEY. IN THIS REGARD, IT WAS SUBMITTED THAT DIRECTOR OF ASSESSEE, IN HIS STATEMENT, HAD DISPOSED THAT AS SESSEE HAS RECEIVED ON MONEY ONLY IN SOME YEARS. FURTHER, IT IS EVIDENT FR OM THE SEIZED PAPER FOUND IN THE SURVEY CONDUCTED IN THE PREMISES OF TH E ASSESSEE THAT ON MONEY HAS BEEN RECEIVED ONLY IN SOME YEARS. 17. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT RECORD. NOTABLY, THE CONTROVERSY BEFORE US PRIMARILY REVOLVES AROUND WHETHER THE INCOME ADMITTED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT IN THE COURSE OF SEA RCH, WHICH IS ALSO SUPPORTED BY THE INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF SEARCH, IS LIABLE TOBE TAXED IN THE YEAR IN WHICH THE INCOM E WAS EARNED OR IS LIABLE TOBE TAXED IN THE YEAR IN WHICH SUCH INCOME WAS UTI LISED IN THE FORM OF TAKING UNSECURED LOANS. AT THE OUTSET, WE SHALL CON SIDER THE MANNER IN WHICH THE CIT(A) HAS DEALT WITH THE ISSUE. 18. THE CIT(A) NOTED THAT ON MONEY RECEIVED BY THE ASSE SSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER ON THE BASIS OF T HE SAME SEIZED ITA NOS. 7177 TO 7180/MUM/2016 : 14 : DOCUMENT THAT REFLECTS THAT ON-MONEY WAS USED FOR O BTAINING BOGUS LOANS. THE CIT(A), THUS, HELD THAT THE ASSESSING OFFICER C ANNOT ACCEPT ONE PART OF THE SEIZED MATERIAL AND IGNORE THE OTHER PART OF TH E SAME MATERIAL. HE RELIED ON THE DECISIONS IN THE CASE OF PEPSICO INDI A HOLDINGS PVT. LTD. 349 ITR 85 (DEL.); INDEO AIRWAYS PVT. LTD. 349 ITR 85 ( DEL.); T.S. KUMARASWAMY 65 ITD 188 (MAD); VATIKA GREENFIELD LTD. 121 TTJ 20 8 AND HELD THAT ASSESSING OFFICER CANNOT ACCEPT THE IMPOUNDED MATER IAL ON SELECTIVE BASIS AND CONSIDER SOME PART OF EVIDENCE AS TRUE WHILE RE JECTING THE EVIDENCE WHICH IS IN FAVOUR OF ASSESSEE, WITHOUT BRINGING AN YTHING ON RECORD. 19. WITH RESPECT TO CONCLUSION OF THE ASSESSING OFFICER THAT NO REASONABLE PERSON WOULD KEEP ON MONEY RECEIVED IN A SSESSMENT YEARS 2006-07 AND 2007-08 FOR SO MUCH TIME, THE CIT(A) HE LD THAT THE ONUS TO PROVE THAT MONEY WAS USED SOMEWHERE ELSE WAS ON THE ASSESSING OFFICER SINCE THE NOTINGS ON THE SEIZED DOCUMENTS DEMONSTRA TED THAT ON-MONEY RECEIVED BY ASSESSEE WAS USED FOR OBTAINING BOGUS L OANS. HE FURTHER HELD THAT THE STATEMENTS RECORDED DURING THE SEARCH AND SURVEY PROCEEDINGS ALSO SUPPORT THE CONTENTION OF THE ASSESSEE THAT ON MONEY WAS USED FOR OBTAINING BOGUS LOANS. THE CIT(A) FURTHER NOTED THA T THE DATES OF RECEIPT OF CASH ARE MENTIONED IN THE SEIZED DOCUMENTS AS SUCH THE OBSERVATION OF THE ASSESSING OFFICER THAT THERE IS NO DATE OF RECEIPT OF ON MONEY IN THE LOOSE PAPERS, IS FACTUALLY INCORRECT. 20. AS REGARD ASSESSING OFFICER'S CONTENTION THAT ASSES SEE DID NOT PROVIDE ANY REASON FOR NON-ACCEPTANCE OF ON-MONEY I N ASSESSMENT YEARS 2008-09 AND 2009-10, HE HELD THAT DURING THE RECORD ING OF STATEMENTS (Q- 5, STATEMENT DATED 11.12.2015) (PAGE NO 56 OF PAPER BOOK), ASSESSEE WAS ITA NOS. 7177 TO 7180/MUM/2016 : 15 : ASKED WHETHER ON-MONEY WAS RECEIVED IN ALL THE YEAR S TO WHICH IT WAS REPLIED ON-MONEY WAS RECEIVED ONLY IN SOME OF THE Y EARS; AND PERTINENTLY NO FURTHER QUESTIONS WERE ASKED BY THE DEPARTMENT. 21. AS REGARDS ASSESSING OFFICERS OBJECTION THAT ASSESS EE FAILED TO FILE ANY CONFIRMATION FROM PARTIES FOR PAYMENT OF HUGE A MOUNTS OF CASH AGAINST BOOKING OF FLATS, THE CIT(A) HELD THAT THE PROVISIONS OF SECTION 292C OF THE ACT RAISE A PRESUMPTION THAT THE CONTENTS OF BOOKS OF ACCOUNTS/ DOCUMENTS IMPOUNDED IN THE COURSE OF SEARCH/SURVEY ARE TRUE. ACCORDINGLY, HE HELD THAT ASSESSING OFFICER WAS REQ UIRED TO PROVE WITH SUFFICIENT EVIDENCE THAT THE DOCUMENTS IMPOUNDED DU RING SEARCH ARE NOT RELIABLE, AN ONUS WHICH WAS NOT DISCHARGED BY THE A SSESSING OFFICER. 22. THE CIT(A) FURTHER AGREED WITH THE CONTENTION OF TH E ASSESSEE THAT AS PER SECTION 4 AND 5 OF THE ACT, THE INCOME SHOUL D GET ASSESSED IN THE YEAR IN WHICH IT IS GENERATED/EARNED. HE FURTHER HE LD THAT SECTION 68 IS NOT APPLICABLE SINCE SOURCE OF SUCH MONEY IS EVIDENCED IN THE IMPOUNDED PAPERS. HE RELIED ON THE DECISIONS IN THE CASE OF [ CIT .P MOHANAKALA (2007) 291 ITR 278 (SC)I1HINDUSTHAN TEA TRADING CO. LTD. V .CIT (2003) 263 ITR 289, 293 (CAL). [SREELEKHA BANERJEE V. CIT, (1963) 49 ITR (SC) 112, 120, 121, D. YASODAMMAGUDUR V. CIT, (1968) 70 ITR (AP): ANIL KUMAR SINGH V. CIT, (1972) 84 ITR 307 (CAL); ABU BUCKER SAIT V CIT, (19 70) 76 ITR 362 (MAD).IN THIS BACKGROUND, THE CIT(A) DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 23. IN THE ABOVE PARAS, WE HAVE NOTED THE FINDINGS OF T HE CIT(A) IN SOME DETAIL, ONLY TO SHOW THAT THE CIT(A) HAS APPRO PRIATELY DEALT WITH THE ITA NOS. 7177 TO 7180/MUM/2016 : 16 : VARIOUS OBJECTIONS RAISED BY THE ASSESSING OFFICER AND DELETED THE ADDITION MADE U/S 68 OF THE ACT ONLY AFTER A THOROUGH EXAMIN ATION OF THE FACTS, MATERIAL ON RECORD AND JUDICIAL PRONOUNCEMENTS. BEF ORE US, REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS RECORDED B Y THE CIT(A) ON THE BASIS OF ANY COGENT MATERIAL OR REASONING EXCEPT ME RELY RELYING ON THE ORDER OF ASSESSING OFFICER. 24. IN OUR CONSIDERED OPINION UNDISPUTEDLY, THE DIRECTO R OF THE ASSESSEE- COMPANY HAD ADMITTED EARNING OF ON-MONEY IN VARIOUS YEARS TO THE EXTENT OF RS. 33,05,10,000/- IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. THE SAID ADMISSION WAS SUPPORTED BY THE DOCUMENTARY EVI DENCE, A COPY OF WHICH IS PLACED AT PAGES 63 TO 67 OF PAPER BOOK IN THE FORM OF EXCEL SHEET RECOVERED AT THE TIME OF SEARCH WHEREIN DATE OF REC EIPT, NAME OF PERSON, ETC. IS CLEARLY MENTIONED. THUS, THE YEAR IN WHICH THE ON-MONEY WAS RECEIVED BY THE ASSESSEE CAN BE CLEARLY ESTABLISHED FROM THESE DETAILS. IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT, IT WA S FURTHER ADMITTED THAT THIS ON-MONEY WAS USED TO INTRODUCE FUNDS IN THE BO OKS OF ACCOUNT IN THE FORM OF UNSECURED LOANS. THE LOOSE PAPER FOUND DURI NG THE SEARCH PROVIDED THE UTILISATION OF ON-MONEY RECEIVED BY THE ASSESSE E FOR THE PURPOSE OF TAKING UNSECURED LOANS, COPIES OF WHICH ARE PLACED AT PAGES 63 TO 67 OF PAPER BOOK. IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT FOR ASSESSMENT YEAR 2009-10, SINCE NO ON-MONEY WAS RECE IVED BY IT DURING THE RELEVANT ASSESSMENT YEAR, NO INCOME ON ACCOUNT OF O N-MONEY WAS DECLARED. THE ASSESSING OFFICER NOTED THAT THOUGH N O ON-MONEY WAS RECEIVED BY THE ASSESSEE, UNSECURED LOANS OF RS. 8, 70,00,000/- WAS RECEIVED BY THE ASSESSEE DURING ASSESSMENT YEAR 200 9-10 WHICH WAS NOT OFFERED TO TAX AND ACCORDINGLY, MADE ADDITION OF RS . 8,70,00,000 U/S 68 OF ITA NOS. 7177 TO 7180/MUM/2016 : 17 : THE ACT AS ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE SAME. CONTRARY TO THIS, IN ASSESSMENT YEAR 2012-13, THE ASSESSING OFF ICER HIMSELF ACCEPTED THE INCOME OFFERED BY THE ASSESSEE BASED ON DOCUMEN TS SEIZED AND TAXED ON-MONEY RECEIVED BY THE ASSESSEE DURING THAT YEAR. IT WAS POINTED OUT BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) O F THE ACT THAT THE SOURCE OF UNSECURED LOANS WAS ON-MONEY RECEIVED BY THE ASSESSEE WHICH WAS FURTHER SUBSTANTIATED BY THE LOOSE PAPER RECOVE RED AT THE TIME OF SEARCH WHEREIN UTILISATION OF ON-MONEY WAS EXPLAINE D. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE ON THE G ROUND THAT ON-MONEY RECEIVED BY THE ASSESSEE IN ASSESSMENT YEARS 2006-0 7 AND 2007-08 MUST HAVE BEEN USED FOR OTHER EXPENSES AND CANNOT BE SAI D TO BE AVAILABLE FOR UTILISATION FOR PAYING TO THE PERSON FROM WHOM UNSE CURED LOAN AND THUS WAS RAISED, PROCEEDED TO TAX THE UNSECURED LOAN REC EIVED BY THE ASSESSEE IN ASSESSMENT YEAR 2009-10. 25. IT IS PERTINENT HERE TO REFER TO SECTION 292C OF TH E ACT, WHICH READS AS UNDER: PRESUMPTION AS TO ASSETS, BOOKS OF ACCOUNT, ETC . 292C. (1) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMEN TS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE C OURSE OF A SEARCH UNDER SECTION 132 OR SURVEY UNDER SECTION 133A, IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHE R DOCUMENTS ARE TRUE ; AND . (UNDERLINED FOR EMPHASIS BY US) ITA NOS. 7177 TO 7180/MUM/2016 : 18 : SECTION 292C OF THE ACT PROSCRIBES A PRESUMPTION TH AT THE CONTENTS OF THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE C OURSE OF SEARCH AND SURVEY SHALL BE PRESUMED TO BE TRUE. THE ASSESSING OFFICER HAS NOT REBUTTED THIS PRESUMPTION WITH ANY COGENT EVIDENCE EXCEPT ST ATING THAT ASSESSEE HAD VARIOUS OTHER EXPENSES AND THEREFORE THE ON MON EY EARNED BY THE ASSESSEE IN ASSESSMENT YEARS 2006-07 AND 2007-08 WA S NOT AVAILABLE FOR AVAILING UNSECURED LOANS; RATHER IN ASSESSMENT YEAR 2012-13, THE ASSESSING OFFICER HIMSELF ACCEPTED THE INCOME OFFERED BY THE ASSESSEE BASED ON DOCUMENTS SEIZED AND TAXED ON-MONEY RECEIVED BY THE ASSESSEE DURING THAT YEAR. 26. THE NEXT MOOT QUESTION WHICH ARISES IS AS TO WHETHE R INCOME IS TO BE TAXED IN THE YEAR IN WHICH THE SAME WAS EARNED O R IT SHOULD BE TAXED IN THE YEAR OF ITS APPLICATION. IN THIS CONTEXT, WE FI ND NO ERROR IN THE DECISION OF THE CIT(A) THAT IN TERMS OF SECTIONS 4 AND 5 OF THE ACT, THE INCOME BE ASSESSED IN THE YEAR IN WHICH IT IS GENERATED/EARNE D. 27. WE FURTHER REFER TO THE Q. 29 OF THE STATEMENT RECO RDED U/S 131 OF THE ACT ON 06.10.2015 IN THE COURSE OF PROCEEDINGS U/S 133A OF THE ACT WHEREIN THE DIRECTOR WAS ASKED TO SUMMARIZE THE ADD ITIONAL INCOME OFFERED BY HIM. THE RELEVANT PORTION IS REPRODUCED HEREUNDER: Q.29 TO SUMMERISE, YOU ARE OFFERING FOLLOWING YEAR WISE INCOME AS ADDITIONAL INCOME OVER AND ABOVE THE REGULAR INCOME OF THE RESPECTIVE F.YRS. IN THE HANDS OF M/S. DEV LAND AND HOUSING PVT. LTD. ITA NOS. 7177 TO 7180/MUM/2016 : 19 : SR. NO A.Y. AMOUNT IN RS. 1. 2009-10 3,92,90,000 2. 2010-11 2,71,50,000 3. 2011-12 3,37,00,000 4. 2015-16 2,20,00,000 KINDLY CONFIRM THE SAME. ANS: YES SIR, I CONFIRM THAT I OFFER THE ABOVE MENTIONED INCOME AS ADDITIONAL INCOME OVER AND ABOVE THE REGULAR INCOME IN THE HANDS OF M/S DEV LAND AND HOUSING PVT. LTD. THE ABOVE FURTHER SUPPORTS THE CONCLUSION OF THE CI T(A) WITH RESPECT TO THE INCOME OFFERED BY THE ASSESSEE AND THE YEAR IN WHICH THE SAME IS OFFERED TO TAX. THUS, ON THIS ASPECT, WE UPHOLD TH E STAND OF CIT(A). 28. IN SO FAR AS DECISION RELIED UPON BY THE LD DR IN T HE CASE OF B. KISHORE KUMAR VS. DCIT ITA NO. 738 OF 744 OF 2014 IS CONCER NED, WE FIND THAT ON THE BASIS OF SAID DECISION LD. DR SEEKS TO SUPPORT THE ASSESSMENT ORDER TO SAY THAT ON-MONEY RECEIVED BY THE ASSESSEE IN ASSES SMENT YEARS 2006-07 AND 2007-08 MUST HAVE BEEN USED FOR OTHER EXPENSES AND WAS AVAILABLE FOR UTILISATION FOR THE PURPOSE OF UNSECURED LOANS WHIL E ON THE OTHER HAND HE RELIES ON THE DECISION OF B. KISHORE KUMAR VS. DCIT (SUPRA) WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT THE WHERE THERE IS A CLEAR AND CATEGORICAL ADMISSION OF THE UNDISCLOSED INCOME BY THE ASSESSEE HIMSELF, THERE IS NO NECESSITY TO SCRUTINIZE THE DOCUMENTS. THE ASSESSIN G OFFICER BY MAKING A PRESUMPTION THAT ON-MONEY RECEIVED BY THE ASSESSEE IN ASSESSMENT YEARS 2006-07 AND 2007-08 MUST HAVE BEEN USED FOR OTHER E XPENSES TRAVELLED BEYOND THE ADMISSION OF UNDISCLOSED INCOME MADE BY THE ASSESSEE, WHICH IS QUITE CONTRARY TO THE RATIO LAID DOWN IN THE DEC ISION CITED BY THE LD.DR. ITA NOS. 7177 TO 7180/MUM/2016 : 20 : ESPECIALLY CONSIDERING THE ABSENCE OF ANY CORROBORA TIVE EVIDENCE TO SUPPORT THE STAND OF THE ASSESSING OFFICER. ACCORD INGLY, DECISION RELIED UPON BY THE LD DR DOES NOT SUPPORT THE REVENUE IN T HE INSTANT CASE. 29. FURTHER, THE ASSESSING OFFICER HAS INVOKED SECTION 68 OF THE ACT TO CONCLUDE THAT SOURCE OF UNSECURED LOANS HAVE NOT BE EN EXPLAINED BY THE ASSESSEE. IN THIS REGARDS, AS NOTED BY THE CIT(A), SOURCE OF UNSECURED LOAN WAS VERY MUCH EVIDENCED IN THE IMPOUNDED PAPERS TO BE THE ON-MONEY EARNED BY THE ASSESSEE, AND THERE IS NO JUSTIFICATI ON TO SUPPORT THE STAND OF THE ASSESSING OFFICER. THUS, WE FIND NO JUSTIFIABL E REASONS TO INTERFERE WITH THE CONCLUSION DRAWN BY THE CIT(A). WE HOLD SO. 30. THUS, IN VIEW OF THE AFORESAID DISCUSSION, WE HEREB Y AFFIRM THE DECISION OF CIT(A) AND REVENUE FAILS IN ITS APPEAL. ITA NO. 7178/M/2016 31. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2010-11 WHE REIN GROUNDS RAISED BY THE REVENUE ARE SIMILAR TO THOSE RAISED I N ASSESSMENT YEAR 2009- 10. SINCE WE HAVE ALREADY ADJUDICATED THE APPEAL FO R ASSESSMENT YEAR 2009-10, AS ABOVE, OUR DECISION THERE SHALL MUTATIS MUTANDIS APPLY TO ASSESSMENT YEAR 2010-11 ALSO. 32. THUS, IN VIEW OF THE AFORESAID DISCUSSION, WE HEREB Y AFFIRM THE DECISION OF CIT(A) AND REVENUE FAILS IN ITS APPEAL. ITA NOS. 7177 TO 7180/MUM/2016 : 21 : ITA NO. 7179/M/2016 33. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2013-14 WHE REIN GROUNDS RAISED BY THE REVENUE ARE SLIGHTLY DIFFERENT AS COM PARED TO ASSESSMENT YEARS 2009-10 AND 2010-11. IN THE PRESENT YEAR, THE ADDITION IS MADE U/S 68 OF THE ACT IN THE HANDS OF ASSESSEE ON PROTECTIV E BASIS AND SUBSTANTIVE ADDITION IS MADE IN THE HANDS OF ITS GROUP CONCERN M/S. MARS REALTORS PVT. LTD. AS THE UNSECURED LOANS ARE REFLECTED IN THE BO OKS OF THE M/S. MARS REALTORS PVT. LTD. 34. THE FACTS IN THIS YEAR ARE DIFFERENT TO THE LIMITED EXTENT THAT IN EARLIER YEAR THE ASSESSEE ADMITTED THE UNDISCLOSED INCOME EARNED BY IT FROM ON-MONEY AND THE SAME WAS STATED TO BE INTRODU CED IN ITS ACCOUNT BOOKS BY WAY UNSECURED LOANS, WHEREAS IN THE YEAR U NDER CONSIDERATION, BEING ASSESSMENT YEAR 2013-14, THE INCOME EARNED BY THE ASSESSEE FROM ON-MONEY WAS INTRODUCED AS UNSECURED LOAN IN ITS GR OUP COMPANY M/S. MARS REALTORS PVT. LTD. 35. THE ASSESSING OFFICER HELD THAT ASSESSEE AND M/S. M ARS REALTORS PVT. LTD. ARE TWO SEPARATE ENTITIES AND ON-MONEY EARNED BY ONE ENTITY CANNOT BE USED TO EXPLAIN THE UNSECURED LOANS TAKEN IN OTH ER ENTITIES. SINCE THE CREDITS OF RS. 11,54,00,0000/- WERE REFLECTED IN TH E BOOKS OF ACCOUNT OF M/S. MARS REALTORS PVT. LTD, THE ASSESSING OFFICER MADE SUBSTANTIVE ADDITION U/S 68 OF THE ACT IN THE HANDS OF M/S. MAR S REALTORS PVT. LTD AND A PROTECTIVE ADDITION OF THE SAME AMOUNT IN THE HANDS OF THE ASSESSEE. ITA NOS. 7177 TO 7180/MUM/2016 : 22 : 36. ON APPEAL, THE CIT(A) DELETED THE ADDITION IN THE H ANDS OF THE ASSESSEE HOLDING THAT THE M/S. MARS REALTORS PVT. L TD WAS MERELY A PASS THROUGH ENTITY TO INTRODUCE THE FUNDS IN THE ASSESS EE COMPANY AND THE FUNDS IN FACT WERE GENERATED OUT OF THE BUSINESS OP ERATIONS OF THE ASSESSEE. THE RELEVANT FINDINGS ARE GIVEN IN PARA 8 .19 TO 8.21 OF THE CIT(A) ORDER WHICH IS REPRODUCED HEREUNDER: 8.19 ABOVE ENTRIES CLEARLY REFLECT THAT AN AMOUNT OF RS. 34.44 CR WAS TAKEN AS ACCOMMODATION ENTRIES OUT OF WHICH RS. 5.2 CR WAS REDUCED/ RETURNED. NOW LET US EXAMINE AS TO WHERE AND IN WHO SE BOOKS THESE ACCOMMODATION ENTRIES ARE REFLECTED. AS SUBMITTED B Y THE ASSESSEE TOTAL ACCOMMODATION ENTRIES TAKEN IN DLH AMOUNTED TO RS. 21.2 CR OUT OF WHICH RS. 5.2 CR WAS RETURNED IN AY 14-15. AN AMOUN T OF RS. 11.54 AND RS. 1.7 CR WAS TAKEN IN MARS REALTORS IN AY 13-14 AND 1 4-15 RESPECTIVELY. THUS TOTAL BOGUS LOANS TAKEN WORKS OUT TO RS. 34.44 CR (21.2+11.54+1.7). THIS IS THE FIGURES REFLECTED IN IMPOUNDED PAPER AS TABULATED IN ABOVE PARA (29.24=34.44-5.2). THEREFORE IT IS CLEAR THAT ACCOMMODATION ENTRIES ARE TAKEN BOTH IN MARS AND DLH AND THE SOURCE OF MO NEY FOR THE SAME IS ON MONEY RECEIVED IN DLH. IT IS ALSO OBSERVED THAT AO IN AY ACCEPTED THE INCOME RETURNED IN MARS AS WELL AS DLH WHICH IS BAS ED ON EXPLANATION REGARDING ON MONEY GENERATION SUBMITTED BY ASSESSEE . IT CAN BE SEEN THAT AT THE END OF AY 2012-13 THE ENTIRE ACCUMULATE D ON-MONEY GOT UTILISED IN ROUTING INTO THE BOOKS AS ACCOMMODATION ENTRIES. IN AY 2014- 15, IT IS OUT OF RS. 5.2 CRORE RETURNED FROM DLH AS AMOUNT OF RS. 1.7 CR IS SOURCED INTO MARS. . 8.20 FURTHER, ON PERUSAL OF LEDGER ACCOUNT OF DLH IN THE BOOKS OF MARS IT IS OBSERVED THAT THE AMOUNT RECEIVED IN MARS IS ALM OST IMMEDIATELY TRANSFERRED TO DLH. IT STRENGTHENS ASSESSEE'S ARGUME NTS THAT MARS IS ONLY A PASS THROUGH ENTITY. ON OBSERVING BALANCE SH EET OF MARS IT BECOMES CLEAR THAT IT DOES NOT HAVE ANY BUSINESS OF ITS OWN TO JUSTIFY GENERATION OF AN AMOUNT OF RS 11.54 CR. THIS MAKES IT OBVIOUS THAT ON MONEY GENERATED IN DLH IS ALSO ROUTED THROUGH MARS I NTO DLH BESIDES DIRECTLY TAKING ACCOMMODATION ENTRIES IN DLH. AO ALS O ACCEPTED THIS BY ACCEPTING RETURNED INCOME OF MARS AND DLH IN AY 14-1 5 . IT IS ALSO OBSERVED THAT AO HAS NOT BROUGHT OUT ANY EVIDENCE O N RECORD TO SHOW THAT IT WAS NOT THE ON-MONEY RECEIVED BY DLH DURING A.Y.S 2006-07, 2007- 08, 2010-11, 2011-12 AND 2012-13, WHICH WAS UTILIZE D FOR OBTAINING ENTRIES TO THE EXTENT OF RS. 11.54 CRORES IN THE HA NDS OF MARS REALTORS FOR A.Y. 2013-14; AS EVIDENCED IN IMPOUNDED PAPERS. I A LSO FIND THAT AO RELIED UPON IMPOUNDED DOCUMENTS ON SELECTIVE BASIS BUT FAI LED TO BELIEVE ITA NOS. 7177 TO 7180/MUM/2016 : 23 : EVIDENCE ARISING FROM DOCUMENTS IMPOUNDED BY THE DE PARTMENT WHICH SUPPORTED THE CASE OF THE APPELLANT. 8.21 TO SUM UP, IT IS HELD THAT, IN VIEW OF THE EVI DENCE EMERGING FROM THE IMPOUNDED DOCUMENTS WHICH ARE PART OF THE RECORDS, ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE INCOME OF A.Y. 2006-0 7, 2007-08, 2010-11, 2011-12 AND 2012-13 AS INCOME OF A.Y 2013-14. IT IS FURTHER HELD THAT AO ERRED IN BRINGING TO TAX THE APPLICATION OF INCOME OF EARLIER YEARS BY INVOKING PROVISION OF SECTION 68 OF THE ACT. IN VIE W OF EVIDENCE AVAILABLE, FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT IT IS THE ON MONEY RECEIPT, WHICH BEING THE INCOME OF DLH IN RESPECTIVE YEARS O F GENERATION, THAT NEEDS TO BE BROUGHT TO TAX IN THOSE YEARS AND NOT T HE SUBSEQUENT APPLICATION OF SUCH INCOME, IN FORM OF BOGUS LOANS IN LATER YEARS, EITHER ON SUBSTANTIVE BASIS OR ON PROTECTIVE BASIS; ONLY BECA USE THE AYS IN WHICH SUCH INCOME IS GENERATED ARE OUT OF TIME LIMIT FOR ASSESSMENT. IN VIEW OF ABOVE DISCUSSION, AO IS DIRECTED TO DELETE THE ADDI TION AMOUNTING TO RS 11.54 CR MADE ON PROTECTIVE BASIS IN THE HANDS OF A SSESSEE U/S 68 OF THE ACT. IN THE RESULT GROUNDS NO 2 TO 4 OF ASSESSEE'S APPEAL ARE ALLOWED . (UNDERLINED FOR EMPHASI S BY US) FROM THE FINDINGS OF THE CIT(A), IT CLEARLY EMERGES THAT THE UNSECURED LOAN REFLECTED IN THE ACCOUNT BOOKS OF M/S. MARS REALTOR S PVT. LTD IS SOURCED THROUGH THE ON-MONEY EARNED BY THE ASSESSEE IN EARL IER YEARS WHICH HAS BEEN ADMITTED IN THE COURSE OF SEARCH. THE ASSESSIN G OFFICER HAS INVOKED SECTION 68 OF THE ACT TO TAX THE UNSECURED LOAN TAK EN BY M/S. MARS REALTORS PVT. LTD. HOWEVER, AS DISCUSSED IN THE ORDER OF CIT (A), THE SOURCE OF UNSECURED LOANS STOOD FULLY EXPLAINED BEING ON-MONE Y EARNED BY THE ASSESSEE. IN OUR VIEW, INVOKING OF SECTION 68 OF TH E ACT WAS NOT JUSTIFIED IN THE PRESENT CASE. 37. FURTHER, IN ASSESSMENT YEAR 2013-14, THERE IS MEREL Y AN APPLICATION OF THE INCOME EARNED BY THE ASSESSEE IN EARLIER YEA R, AS DISCUSSED IN EARLIER PART OF THIS ORDER. SINCE WE HAVE ALREADY HELD THAT INCOME IS TO BE TAXED IN THE YEAR IN WHICH THE SAME IS EARNED AND NOT AT THE TIME OF ITS APPLICATION, ITA NOS. 7177 TO 7180/MUM/2016 : 24 : WE CONCUR WITH THE FINDINGS IN THE ORDER OF CIT(A) AND HOLD THAT THE ADDITION HAS BEEN RIGHTLY DELETED. 38. THUS, IN VIEW OF THE AFORESAID DISCUSSION, WE HEREB Y AFFIRM THE DECISION OF CIT(A) AND REVENUE FAILS IN ITS APPEAL. M/S. MARS REALTORS PVT. LTD (ITA NO. 7180/M/2016) (ASSESSMENT YEAR 2013-14) 39. THE FACTS OF THE PRESENT APPEAL ARE SAME AS FACTS D ISCUSSED IN ITA NO. 7179/M/2016, ABOVE. IN THIS CASE, THE ADDITION OF U NSECURED LOANS OF RS. 11,54,00,000/- WAS MADE BY U/S 68 OF THE ACT ON SUBSTANTIVE BASIS WHEREAS TH E ADDITION OF THE SAME AMOUNT WAS MADE I N THE HANDS OF ITS GROUP CONCERN M/S. DEV LAND AND HOUSING PVT. LTD., (ITA NO.7179/MUM/2016) ON PROTECTIVE BASIS. 40. THE CIT(A) HAS DELETED THE ADDITION MADE IN THE HAN DS OF THE ASSESSEE OBSERVING THAT THE UNSECURED LOAN WAS SOUR CED FROM THE UNDISCLOSED INCOME OF THE ASSESSEES GROUP CONCERN M/S. DEV LAND AND HOUSING PVT. LTD AND ASSESSEE WAS MERELY ACTING AS PASS THROUGH ENTITY. WHILE ADJUDICATING THE APPEAL IN ITA NO. 7179/M/201 6, WE HAVE UPHELD THE PROPOSITION OF CIT(A) THAT RS. 11,54,00,000/- INTRO DUCED AS UNSECURED LOANS IN THE ACCOUNT BOOKS OF THE ASSESSEE WAS INCOME OF ITS GROUP CONCERN M/S. DEV LAND AND HOUSING PVT. LTD AND ASSESSEE WAS ACTI NG MERELY AS A PASS- THROUGH ENTITY TO INTRODUCE FUNDS IN THE GROU P CONCERNS. 41. THUS, ONCE IT IS ADMITTED THAT MONEY IN-FACT BELONG ED TO ANOTHER GROUP-ASSESSEE, AND THE INSTANT ASSESSEE WAS MERELY ACTING AS A PASS- ITA NOS. 7177 TO 7180/MUM/2016 : 25 : THROUGH ENTITY, NO ADDITION CAN BE MADE IN THE HAND S OF THE ASSESSEE. IN SUCH CASES, THE SOURCE OF CREDIT STANDS FULLY EXPLA INED BEING INCOME OF THE OTHER ASSESSEE AND AS SUCH, NO ADDITION CAN BE MADE U/S 68 OF THE ACT. IN THIS MANNER, THE ORDER OF THE CIT(A) IS LIABLE TO B E AFFIRMED. 42. THUS, IN VIEW OF THE AFORESAID DISCUSSION, WE HEREB Y AFFIRM THE DECISION OF CIT(A) AND REVENUE FAILS IN ITS APPEAL. 43. RESULTANTLY, THE CAPTIONED APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/04/2019 SD/- SD/- (AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATE : 05 - 04 -2019 *SSL* ITA NOS. 7177 TO 7180/MUM/2016 : 26 : COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI8/