ITO 14(2)(3), MUMBAI V. NRB DEVELOPERS, MUMBAI

ITA 7411/MUM/2013

• Counselvise Citation: 741119914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-12-2013
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Notional interest; Onus to prove
• Section: 143(3); 133A; 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. ASSESSMENT YEAR APPELLANT RESPONDENT 7409/MUM/2013 2008 - 09 INCOME TAX OFFICER 14(2)-3, EARNEST HOUSE, R. NO. 306, 3 RD FLOOR, NARIMAN POINT MUMBAI 400 021. VS. M/S NRB DEVELOPERS 1 ST FLOOR, BANDRAWALA BLDG, 16, DADISETH AGIARY LANE, KALBADEVI ROAD, MUMBAI 400 002. 7410/MUM/2013 2009 - 10 7411/MUM/2013 2010 - 11 7412/MUM/2013 2011 - 12 PAN: - AAFGN1786N CROSS OBJECTION NO. ASSESSMENT YEAR APPELLANT RESPONDENT 73/MUM/2015 ARISING OUT OF ITA 7409/MUM/2013 2008 - 09 M/S NRB DEVELOPERS 1 ST FLOOR, BANDRAWALA BLDG, 16, DADISETH AGIARY LANE, KALBADEVI ROAD, MUMBAI 400 002. VS. INCOME TAX OFFICER 14(2)-3, EARNEST HOUSE, R. NO. 306, 3 RD FLOOR, NARIMAN POINT MUMBAI 400 021 74/MUM/2015 ARISING OUT OF ITA 7410/MUM/2013 2009 - 10 75/MUM/2015 ARISING OUT OF ITA 7411/MUM/2013 2010 - 11 REVENUE BY SHRI YOGESH KAMAT. ASSESSEE BY SHRI RYAN SALDANHA DATE OF HEARING 18.05.2015 DATE OF PRONOUNCEMENT 29.5.2015 2 M/S NRB DEVELOPERS PAGE 2 OF 12 ORDER PER BENCH, CAPTIONED ARE FOUR APPEALS PREFERRED BY THE REVENUE PERTAINING TO ASSESSMENT YEARS 2008-09 TO 2011-12 AND THREE CROSS OBJECTIONS BY THE ASSESSEE PERTAINING TO ASSESSMENT YEARS 2008-09 TO 2010-11. SINCE THE ISSUES INVOLVED ARE COMMON AND RELATE TO THE SAME ASSESSEE , A COMMON ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. APPEAL OF THE REVENUE VIDE ITA NO. 7412/MUM/2013 , PERTAINING TO ASSESSMENT YEAR 2011-12 IS TAKEN AS THE LEAD CASE W HICH IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [ HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 30.09.2013, WHICH IN TURN-HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME T AX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT) DATED 07.03.2013. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWIN G TWO MAIN GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT BY NOT SUSTAINING ADDITION MADE ON ACCOUNT OF DEEMED INTEREST ON LOANS AND ADVANCES GI VEN TO VARIOUS PARTIES ON WHICH INTEREST NOT RECEIVED BY THE ASSESSEE IN VIEW OF T HE JUDGMENT IN THE CASE OF SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC) AND CIT VS. DURGAPRASAD MORE [1971] 82 ITR 540(SC) WHEREIN THE DOCTRINE OF HUMAN PROBABILITY AN D BUSINESS PRUDENCE WERE APPLIED. 2. THE LD. CIT(A) ERRED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE TO ACCEPT THE TEST OF HUMAN PROBABILITIES AND BUSINESS PRUDENCE AS THE ASSES SEE FIRM HAS ADVANCED HUGE AMOUNT OF FUNDS AND NOT RECEIVING INTEREST ON THAT FUNDS, WHICH IS MUCH BEYOND BUSINESS PRUDENCE. 3. ALTHOUGH, REVENUE HAS RAISED TWO GROUNDS OF APPE AL BUT ESSENTIALLY THE GRIEVANCE IS AGAINST THE DECISION OF CIT(A) IN DELE TING THE ADDITION OF RS. 3 M/S NRB DEVELOPERS PAGE 3 OF 12 1,62,16,713/- WHICH WAS MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF INTEREST INCOME. 4. IN BRIEF, THE RELEVANT FACTS CAN BE SUMMARIZED A S FOLLOWS. THE RESPONDENT ASSESSEE IS A PARTNERSHIP FIRM WHO FILED ITS RETURN OF INCOME ON 03.10.2011 DECLARING AN INCOME OF RS.6,67,963/- FOR ASSESSMENT YEAR 2011-12. IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SHOW N INCOME FROM BUSINESS ACTIVITY OF BUILDERS AND DEVELOPERS. THERE WAS A SU RVEY ACTION U/S 133A OF THE ACT ON 17.09.2012, AND SUBSEQUENTLY THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT BY ISSUANCE O F NOTICE U/S 143(2) OF THE ACT ON 28.09.2012. THE ASSESSING OFFICER NOTES THAT FROM THE PERUSAL OF THE BALANCE-SHEET AS ON 31.03.2011 FOUND DURING THE COU RSE OF SURVEY, ASSESSEE WAS FOUND TO HAVE ADVANCED LOANS TO DIFFERENT PARTIES T O THE EXTENT OF RS. 16,21,67,130/- FREE OF INTEREST. THE DETAILS OF SU CH LOANS AND ADVANCES HAVE BEEN ENUMERATED BY THE ASSESSING OFFICER IN PARA 4. 7 OF THE ASSESSMENT ORDER WHICH IS AS UNDER:- CURRENT ASSETS LOANS & ADVANCES (ASSET) (A) BHAGWAN M. PATEL 60,00,000 (B) KAMLA LAND MARC COPN. 1,75,00,0 00 (C) KAMLA LAND MARC DEVELOPERS 80,00,000 (D) KAMLA VENTURE HOLDING PVT. LTD. 40,00,000 (E) LOTUS DEVELOPERS 4,30,00,000 (F) LOTUS GRIH NIRMAN PVT. LTD. 5,00,00,0 00 (G) MAA ASHISH TEXTILE INDIA PVT. LTD. 99,50,000 (H) PRECIOUS REAL ESTATE PVT. LTD. 20,00,0 00 (I) VIVEK ARCHITECH PVT. LTD. 35,0 0,000 (J) YASH AGARWAL 1,38,00,000 (K) TIRUPATI DEVELOPERS (CURRENT CAP.) 15,77,50,000 44,17,130 16,21,67,130 4 M/S NRB DEVELOPERS PAGE 4 OF 12 5. THE ASSESSING OFFICER SHOW-CAUSED THE ASSESSEE A S TO EXPLAIN WHY INTEREST SHOULD NOT BE CHARGED @ 18% ON THE AMOUNTS ADVANCED , AS THE ASSESSEE WAS NOT CREDITING ANY INTEREST ON THE ADVANCES GIVEN. T HE ASSESSING OFFICER ALSO NOTED THAT IN THE BALANCE-SHEET FOUND DURING THE CO URSE OF SURVEY, THERE WAS AN ENTRY OF INTEREST (ASSETS) ACCRUED OF RS. 37,95,074 /-. ON THIS BASIS, THE ASSESSING OFFICER CONCLUDED THAT THERE APPEARED TO BE SOME IN TEREST ACCRUED AS PER THE BALANCE SHEET AND THAT IT WAS ONLY AN AFTERTHOUGHT THAT ASSESSEE DID NOT CREDIT ANY INTEREST INCOME IN THE PROFIT & LOSS ACCOUNT. IN RESPONSE TO THE SHOW- CAUSE, ASSESSEE SUBMITTED THAT THE LOANS AND ADVAN CES WERE NOT CARRYING ANY INTEREST AND, THEREFORE, NO INTEREST INCOME CAN BE ASSESSED ON A NOTIONAL BASIS. 6. ASSESSING OFFICER REJECTED THE SUBMISSIONS PUT F ORTH BY THE ASSESSEE. FIRSTLY, AS PER THE ASSESSING OFFICER ON THE ASSETS SIDE OF THE BALANCE-SHEET INTEREST (ASSET) WAS SHOWN WHICH WAS ACCRUED INTERE ST INCOME, NOT OFFERED TO TAX. SECONDLY, THE ASSESSING OFFICER ALSO NOTED THA T THE MONIES WERE INTRODUCED IN THE ASSESSEE FIRM BY THE TWO PARTNERS BY WAY OF CAPITAL. THE TWO PARTNERS WERE SHRI BAJRANGLAL BAJARI AND SHRI NIBU NAGI AND AS PER THE ASSESSING OFFICER, THE IDENTITY, CREDITWORTHINESS, AND GENUINENESS OF THE CAPITAL INTRODUCED BY SHRI NIBU NAGI WAS DOUBTFUL. THE MAJORITY OF CAPITAL WAS INTRODUCED IN ASSESSMENT YEARS 2007-08 AND 2008-09 AND THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT ASSESSMENTS FOR SUCH YEARS WE RE REOPENED ON THE ISSUE OF THE DOUBT ON THE NATURE AND SOURCE OF CAPITAL. F OR THIS REASON, THE ASSESSING OFFICER TREATED THE CAPITAL CONTRIBUTION IN THE ASS ESSEES FIRM AS DOUBTFUL. THIRDLY, THE ASSESSING OFFICER OBSERVED THAT THE AD VANCEMENT OF LOANS TO OTHER 5 M/S NRB DEVELOPERS PAGE 5 OF 12 CONCERNS INTEREST-FREE WAS AGAINST HUMAN PROBABILIT IES AND, THEREFORE, HE REJECTED ASSESSEES PLEA THAT NO INTEREST INCOME WA S EARNED ON SUCH ADVANCES. THE ASSESSING OFFICER IN PARA 4.7 OF THE ASSESSMENT ORDER OBSERVED THAT THE INTEREST PORTION MUST BE POCKETED IN CASH IN ORDER TO DEFRAUD THE REVENUE BY THE PARTNERS . FOR ALL THE ABOVE REASONS, THE ASSESSING OFFICER HELD THAT ASSESSEE WAS LIABLE TO BE ASSESSED FOR INTEREST INCOME ON THE AD VANCES OF RS. 16,21,67,130/- AT THE RATE OF 10%. CONSEQUENTLY, AN ADDITION OF RS . 1,62,16,713/- WAS MADE BY THE ASSESSING OFFICER TO THE RETURNED INCOME ON ACC OUNT OF INTEREST ON ABOVE STATED LOANS AND ADVANCES. 7. BEFORE THE CIT(A), ASSESSEE MADE VARIED SUBMISSI ONS WHICH HAVE BEEN REPRODUCED BY THE CIT(A) IN HIS IMPUGNED ORDER. TH E FIRST AND FOREMOST PLEA OF THE ASSESSEE WAS THAT THE ADDITION ON ACCOUNT OF IN TEREST INCOME WAS MADE BY THE ASSESSING OFFICER WITHOUT ANY BASIS AND THAT IT WAS BASED ON MERE GUESS- WORK, SUSPICION AND CONJECTURES. WITH REGARD TO TH E ENTRY IN THE BALANCE-SHEET OF INTEREST (ASSET) OF RS. 37,95,074/-, ASSESSEE EX PLAINED THAT THE SAME REPRESENTED INTEREST PAID ON CAPITAL CONTRIBUTION O F ONE OF THE PARTNERS MR. BAJRANGLAL BAJARI. SINCE THERE WAS NO CORRESPONDIN G INTEREST INCOME, THE INTEREST PAID TO THE PARTNER WAS NOT CLAIMED AS DED UCTION AND INSTEAD THE SAME WAS REFLECTED ON THE ASSETS SIDE OF THE BALANCE-SHE ET. WITH REGARD TO THE OBSERVATIONS OF THE ASSESSING OFFICER REGARDING THE DOUBTFUL NATURE OF CAPITAL CONTRIBUTION BY ONE OF THE PARTNERS MR. NIBU NAGI, IT WAS EXPLAINED THAT IN THE RELEVANT YEARS OF THE CONTRIBUTION, I.E., ASSESSM ENT YEARS 2007-08 AND 2008-09, DETAILED ENQUIRIES WERE CARRIED OUT BY THE ASSESSIN G OFFICER AND THE CAPITAL INTRODUCED BY THE SAID PARTNER WAS ACCEPTED AS GENU INE. WITH REGARD TO THE LOANS AND ADVANCES GIVEN TO OTHER CONCERNS, ILLUSTR ATED IN THE TABULATION ABOVE, 6 M/S NRB DEVELOPERS PAGE 6 OF 12 ASSESSEE FURNISHED CONFIRMATIONS FROM SUCH PARTIES, WHEREBY, IT WAS CONFIRMED THAT NO INTEREST WHATSOEVER WAS PAID TO THE ASSESEE . IN THIS CONTEXT, THE ASSESSEE REFERRED TO ADVANCES OF RS. 4.30 CRORE AND RS. 5 CRORE GIVEN TO LOTUS DEVELOPER AND LOTUS GRIH NIRMAN PRIVATE LIMITED RES PECTIVELY, AND POINTED OUT THAT IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER HAD EXAMINED SHRI. ASHOK KUMAR AGARWAL, DIRECTOR AND OWNER OF LOTUS GR OUP, WHEREBY, THE SAID PERSON CONFIRMED THAT NO INTEREST WHATSOEVER WAS PA ID TO THE ASSESSEE FIRM AS THE PROJECT FOR WHICH THE MONEY WAS TAKEN COULD NOT MATERIALISED. ON THIS BASIS, ASSESSEE POINTED OUT THAT THE ASSESSING OFFI CER HAD CARRIED OUT APPROPRIATE VERIFICATIONS AND FOUND THAT NO INTERES T WHATSOEVER WAS EARNED BY THE ASSESSEE. IN NUTSHELL, THE ASSESSEE ASSERTED THAT IT HAS DISCHARGED ITS ONUS TO PROVE THAT THE TRANSACTIONS OF LOANS AND ADVANCE S WERE GENUINE AND THAT NO INCOME WAS RECEIVED OVER AND ABOVE WHAT WAS RECORDE D IN ACCOUNT BOOKS. 8. A PERUSAL OF THE ORDER OF CIT(A) REVEALS THAT TH E SUBMISSIONS PUT FORTH BY THE ASSESSEE WERE SENT TO THE ASSESSING OFFICER FOR A REMAND REPORT. THE ASSESSING OFFICER SUBMITTED A REMAND REPORT DATED 1 0.09.2013 WHICH HAS ALSO BEEN REPRODUCED BY THE CIT(A) IN HIS ORDER. ON THE BASIS OF SUBMISSIONS PUT FORTH BY THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER, THE CIT(A) HAS FOUND IT FIT TO DELETE THE ADDITION PRIMARILY O N THE GROUND THAT THE SAME IS MADE ON MERE SUSPICION, SURMISES AND GUESS WORK. A GAINST THE AFORESAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFOR E US. 9. BEFORE US, THE LD. DR APPEARING FOR THE REVENUE HAS ASSAILED THE ORDER OF CIT (A) BY POINTING OUT THAT THE ADVANCEMENT OF HUG E AMOUNT OF FUNDS TO OTHER CONCERNS WITHOUT CHARGING OF INTEREST WAS AGAINST T HE TESTS OF HUMAN 7 M/S NRB DEVELOPERS PAGE 7 OF 12 PROBABILITIES AND BUSINESS PRUDENCE AND, THEREFORE, THE INTEREST INCOME ASSESSED BY THE ASSESSING OFFICER ON SUCH ADVANCES WAS FAIR AND PROPER. 10. ON THE OTHER HAND, THE LD. REPRESENTATIVE FOR T HE ASSESSEE HAS VEHEMENTLY POINTED OUT THAT THE CIT(A) MADE NO MIST AKE IN DELETING THE ADDITION AS THERE WAS NO EVIDENCE OF ASSESSEE HAVIN G EARNED ANY INTEREST INCOME. THE FINDINGS OF THE CIT(A) HAVE BEEN RELIE D UPON IN ORDER TO ASSAIL THE STAND OF THE REVENUE. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. A PERUSAL OF THE ORDERS OF AUTHORITIES BELOW STARKLY REVEAL THAT THE ENTIRE CASE OF THE REVENUE IS BASED ON A PRESUMPTION THAT THE ASSESSEE MUST HAVE EARNED INTEREST ON THE LOANS AND ADVANCES GIVEN TO OTHER CONCERNS FREE OF INTEREST. SO HOWEVER, IT IS QUITE APPARENT FROM THE ORDER OF THE ASSESSING OFFI CER THAT THERE IS NO MATERIAL OR EVIDENCE WHICH HAS BEEN BROUGHT OUT TO ESTABLISH THAT THE ASSESSEE HAD EARNED INTEREST INCOME FROM SUCH LOANS AND ADVANCES . IN FACT, WE FIND THAT THE SCRUTINY ASSESSMENT IN THE INSTANT YEAR WAS INITIAT ED ONLY AFTER A SURVEY ACTION U/S 133A OF THE ACT WAS CARRIED OUT IN BUSINESS PRE MISES OF THE ASSESSEE ON 17.09.2012. OSTENSIBLY, THE ASSESSING OFFICER HAS N OT BEEN ABLE TO ESTABLISH THAT ANY EVIDENCE OR MATERIAL WAS FOUND DURING THE COURS E OF SURVEY WHICH WOULD SHOW RECEIPT OF INTEREST INCOME OR ANY UNDERSTANDIN G BETWEEN THE ASSESSEE AND OTHER CONCERNS WHEREBY ASSESSEE WAS ENTITLED TO REC EIVE INTEREST INCOME ON THE IMPUGNED ADVANCES. THE ASSESSING OFFICER HAS MADE REFERENCE TO ENTRY APPEARING ON THE ASSETS SIDE OF THE BALANCE-SHEET U NDER THE HEAD INTEREST (ASSET). THE SAID ENTRY HAS BEEN CONSTRUED BY THE A SSESSING OFFICER TO REFLECT EARNING OF INTEREST INCOME, WHICH WAS NOT CREDITED IN THE PROFIT & LOSS ACCOUNT, 8 M/S NRB DEVELOPERS PAGE 8 OF 12 AND THUS NOT OFFERED FOR TAX. IN THIS CONTEXT, ASSE SSEE ASSERTED THAT SUCH AMOUNT REPRESENTED INTEREST PAID ON THE CAPITAL CONTRIBUTI ON OF ONE OF THE PARTNERS I.E. MR. BAJRANGLAL BAJARI, AND AS THERE WAS NO CORRESPO NDING INTEREST INCOME, THE INTEREST PAID TO THE PARTNERS WAS NOT CLAIMED AS DE DUCTION BUT INSTEAD IT WAS REFLECTED ON THE ASSETS SIDE OF THE BALANCE-SHEET. THE CIT(A) IN PARA 5.11 OF HIS ORDER, HAS EXAMINED THE AFORESAID CONTENTION OF THE ASSESSEE. AS PER THE CIT(A), A PERUSAL OF THE INTEREST (ASSET) ACCOUNT IN THE AC COUNT BOOKS AS WELL AS THE CAPITAL ACCOUNT OF THE CONCERNED PARTNER, PROVED TH AT THE AMOUNT SHOWN IN THE BALANCE-SHEET UNDER THE HEAD INTEREST (ASSET) REPRE SENTED INTEREST EXPENDITURE BY WAY OF INTEREST ON PARTNERS CAPITAL CONTRIBUTIO N, WHICH WAS NOT CLAIMED AS A DEDUCTION. THEREFORE, ACCORDING TO THE CIT(A) SUCH AN ENTRY IN THE BALANCE- SHEET CANNOT BE CONSTRUED AS AN INCOME EARNED AND, THEREFORE, THE ASSESSING OFFICER ERRED IN INFERRING THAT THE SAME REPRESENTE D ANY INTEREST INCOME ACCRUED TO THE ASSESSEE QUA THE IMPUGNED ADVANCES. AFORESAID VIEW OF THE CIT(A) HAS NOT BEEN SHOWN TO BE ERRONEOUS OR DEVOID OF FACTUAL SUPPORT AND, THEREFORE, WE HEREBY AFFIRM THE SAME. 12. APART THEREFROM, WE FIND THAT THE CIT(A) HAS C ORRECTLY APPRECIATED THAT THE ASSESSEE SUBMITTED CONFIRMATIONS FROM ALL THE C ONCERNS SHOWING THAT NO INTEREST WAS PAID TO THE ASSESSEE. THE CIT(A) HAS ALSO NOTED THAT THE PARTIES WERE EXAMINED BY THE ASSESSING OFFICER U/S 133(6) / 131 OF THE ACT AND THEY HAVE CONFIRMED THAT NO INTEREST WAS PAID TO THE ASS ESSEE. ON THE STRENGTH OF THE AFORESAID DOCUMENTARY EVIDENCE, THE CIT(A) DISAGREE D WITH THE ASSESSING OFFICER THAT ANY INTEREST INCOME ACCRUED TO THE ASS ESSEE QUA AFORE-STATED LOANS AND ADVANCES. 9 M/S NRB DEVELOPERS PAGE 9 OF 12 13. BEFORE US, IT HAS ALSO BEEN POINTED OUT THAT TH E DOUBT CAST BY THE ASSESSING OFFICER WITH REGARD TO THE CAPITAL INTRODUCED IN TH E ASSESSEE FIRM BY ONE OF THE PARTNERS, MR. NIBU NAGI, IS ALSO NOT TENABLE BECAUS E IN AN ASSESSMENT FINALIZED FOR ASSESSMENT YEAR 2007-08 AND 2008-09 SUBSEQUENT TO THE IMPUGNED ASSESSMENT, THE ASSESSING OFFICER HAS ACCEPTED THE CAPITAL INTRODUCED BY SHRI NIBU NAGI AS GENUINE. THE AFORESAID ASPECT OF THE M ATTER IS NOT DISPUTED BY THE LD. DR AND, THEREFORE, THE SAID POSITION ALSO ESTAB LISHES THAT THE FINDING OF THE ASSESSING OFFICER IS BASED ON MERE SUSPICION, AND I T HAS BEEN RIGHTLY SET-ASIDE BY THE CIT(A). 14. IN VIEW OF THE AFORESAID DISCUSSION AND HAVING REGARD TO FINDINGS OF CIT(A), WE FIND NO REASON TO INTERFERE WITH THE CON CLUSION OF THE CIT(A). IN SO FAR AS THE RELIANCE PLACED BY THE REVENUE ON THE JU DGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT REPORTED IN [1995], 214 ITR 801 (SC) AND CIT VS. DURGAPRASAD MORE REPORTED IN [1971] 82 ITR 540 (SC), W E FIND THAT THE SAME HAVE BEEN RENDERED UNDER DIFF ERENT CIRCUMSTANCES. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS CARR IED OUT A VERIFICATION EXERCISE, INCLUDING EXAMINATION OF PARTIES U/S 131/133(6) OF THE ACT, WHO HAVE CONFIRMED THE TRANSACTIONS. THE VERIFICATION EXERCI SE CARRIED OUT BY THE ASSESSING OFFICER EITHER IN THE COURSE OF SURVEY AN D/OR IN THE POST-SURVEY ASSESSMENT PROCEEDINGS HAS NOT UNEARTHED ANY EVIDEN CE TO SAY THAT ANY INTEREST HAS BEEN PAID OR ACCRUED TO THE ASSESSEE. THEREFORE , IN A SITUATION WHERE ENQUIRIES HAVE BEEN MADE BY THE ASSESSING OFFICER A ND NO ADVERSE EVIDENCE IS FOUND, THEN IN SUCH A SITUATION IT IS NOT OPEN FOR THE ASSESSING OFFICER TO FALL BACK ON THEORY OF HUMAN PROBABILITIES; AND, IN FACT, IT WOULD TANTAMOUNT TO A SITUATION WHERE THE RESULT OF THE ENQUIRIES/VERIFICATION CARR IED OUT BY THE ASSESSING 10 M/S NRB DEVELOPERS PAGE 10 OF 12 OFFICER ARE SOUGHT TO BE DISBELIEVED WITHOUT ANY AD VERSE MATERIAL ON RECORD. THEREFORE, THE RATIO OF THE JUDGMENTS OF HONBLE SU PREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT (SUPRA) AND CIT VS. DURGAPRASA D MORE (SUPRA), HAS BEEN RIGHTLY FOUND TO BE INAPPLICABLE IN THE PRESENT CAS E BY THE CIT(A). THE SAID STAND OF THE CIT(A) IS ALSO HEREBY AFFIRMED. IN THE RESULT, WE HOLD THAT THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2011-12 AND IS WITHOUT MERIT AND ACCORDINGLY DISMISSED. 15. IN SO FAR AS THE APPEALS OF THE REVENUE FOR THE OTHER ASSESSMENT YEARS OF 2008-09 TO 2010-11 ARE CONCERNED, IT WAS A COMMON P OINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES THEREIN ARE SIMILA R TO THOSE CONSIDERED BY US IN THE APPEAL FOR ASSESSMENT YEAR 2011-12 IN EARLIER P ARAS. AS A CONSEQUENCE, OUR DECISION IN THE APPEAL OF THE REVENUE FOR ASSESSMEN T YEAR 2011-12 SHALL APPLY MUTATIS MUTANDIS IN THE APPEALS FOR ASSESSMENT YEARS 2008-09 TO 201 0-11. ACCORDINGLY, THE APPEALS OF THE REVENUE FOR ASSESSM ENT YEARS 2008-09 TO 2010- 11 ARE ALSO DISMISSED. 16. THE ASSESSEE HAS RAISED CROSS OBJECTIONS IN ASS ESSMENT YEARS 2008-09 TO 2010-11, WHEREBY THE ONLY ISSUE RAISED IS WITH REGA RD TO THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 147/148 OF THE ACT. 17. NOTABLY, AFTER CONCLUDING THE ASSESSMENT U/S 14 3(3) FOR ASSESSMENT YEAR 2011-12, THE ASSESSING OFFICER PROCEEDED TO REOPEN THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2008-09 TO 2010-11 IN ORDER TO BRI NG TO TAX NOTIONAL INTEREST INCOME IN RELATION TO THE LOANS AND ADVANCES MADE B Y THE ASSESSEE FREE OF INTEREST. THE REOPENING OF ASSESSMENT WAS PROMPTED BY THE STAND OF THE 11 M/S NRB DEVELOPERS PAGE 11 OF 12 ASSESSING OFFICER IN ASSESSMENT YEAR 2011-12 WITH W HICH WE HAVE ALREADY DEALT WITH IN THE EARLIER PARAS, AND THE SAME HAS BEEN FO UND TO BE UNTENABLE. 18. SINCE, WE HAVE AFFIRMED THE ORDER OF CIT(A) DEL ETING THE ADDITIONS IN ASSESSMENT YEARS 2008-09 TO 2010-11, THE ASSESSEE H AS GOT APPROPRIATE RELIEF INASMUCH AS THE APPEALS OF THE REVENUE HAVE BEEN DI SMISSED. THEREFORE, THE ISSUE RELEVANT TO THE VALIDITY OF INITIATION OF PRO CEEDINGS U/S 147/148 FOR ASSESSMENT YEARS 2008-09 TO 2010-11 IS RENDERED AC ADEMIC FOR THE PRESENT. THEREFORE, WE DEEM IT FIT AND PROPER TO REFRAIN FRO M ADJUDICATING THE SAID ISSUE FOR THE PRESENT AND IT IS KEPT OPEN, IN CASE THE OR DER OF THE TRIBUNAL DISMISSING THE APPEALS OF THE REVENUE FOR ASSESSMENT YEARS 200 8-09 TO 2010-11, IS ALTERED BY THE HIGHER AUTHORITY. THUS THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE TREATED AS INFRUCTUOUS AS ABOVE. 19. RESULTANTLY, THE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY 2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER ) MUMBAI DATED 29-05-2015 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, B BENCH, ITAT, MUMBAI 12 M/S NRB DEVELOPERS PAGE 12 OF 12 BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI