ACIT, Central circle-6, New Delhi V. Oxygen Business Park P.Ltd, G M Nagar

ITA 7826/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2326 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Search and seizure; Document seized; Valuation report; Documents seized; TDS
• Section: 143(3); 153A; 143(1); 80IA; 13; 153; 32; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: G NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.7826/DEL./2018 ASSESSMENT YEAR: 2011-12 ACIT, CENTRAL CIRCLE-06, NEW DELHI VS. M/S. OXYGEN BUSINESS PARK PVT. LTD. (FORMERLY KNOWN AS ACHVIS SOFTECH PVT. LTD.), PLOT NO. -7, SEC- 144, NOIDA PAN :AAGCA4439E (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORD ER DATED 27/09/2018 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-24, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2011-12 RAISING FOLLOWING GROUNDS: 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW AN D FACTS. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN QUASHING THE REASSESSMENT ORDER PASSED BY ASSESSING OFFICER U/S 153A R.W.S. 143(3) & DELETING THE ADDIT ION OF RS.13,30,50,000/- MADE BY THE ASSESSING OFFICER BY WAY OF APPELLANT BY SH. SANJEEV SAPRA, CA RESPONDENT BY SH. H.K. CHAUDHARY, CIT(DR) DATE OF HEARING 03.06.2021 DATE OF PRONOUNCEMENT 28.06.2021 2 ITA NO.7826/DEL/2018 DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IAB OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT NO INCRIMINATING MATER IAL WAS UNEARTHED DURING THE SEARCH OPERATION AND THEREFORE NO ADDITION CAN BE MADE IN ASSESSMENT ORDER PASSED U/S 153A R.W .S. 143(3) IN THIS YEAR. 3. THE APPELLANT CRAVES FOR LEAVE TO ADD, AMEND ANY /ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE RELEVANT TO DISPU TE BEFORE US ARE THAT THE ASSESSEE, A COMPANY, WAS ENGAGED IN TH E DEVELOPMENT OF SPECIAL ECONOMIC ZONE (SEZ) FOR INFO RMATION TECHNOLOGY (IT)/INFORMATION TECHNOLOGY ENABLED SERV ICES (ITES) IN NOIDA (UTTAR PRADESH). FOR THE YEAR UNDER CONSIDERA TION, THE ASSESSEE FILED RETURN OF INCOME ON 30/09/2011 DECLA RING NIL INCOME. A SEARCH AND SEIZURE ACTION UNDER SECTION 1 32 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS CARRI ED OUT AT THE PREMISES OF THE ASSESSEE ON 29/10/2013. A NOTICE UN DER SECTION 153A OF THE ACT WAS ISSUED ON 11/11/2014 FOR FILING RETURN OF INCOME CONSEQUENT TO SEARCH ACTION. THE ASSESSEE RE QUESTED TO TREAT THE ORIGINAL RETURN OF INCOME FILED ON 30/09/ 2011 AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF T HE ACT. IN THE RETURN OF INCOME, THE ASSESSEE DECLARED NET PROFIT OF 155,13,39,200/-, WHICH WAS CLAIMED AS DEDUCTION UND ER SECTION 80IAB OF THE ACT. THE ASSESSING OFFICER NOTICED THA T ASSESSEE SOLD SEZ BUILDINGS TO TWO OF ITS SUBSIDIARY COMPANIES, W HICH WERE ADMITTED AS CO-DEVELOPER OF SEZ. TOWER A OF SEZ BUI LDING WAS TRANSFERRED (SUBLEASED) TO M/S AACHVIS IT SEZ INFRA PRIVATE LIMITED AT VALUE OF 247 CRORE AND TOWER B OF SEZ BUILDING WAS TRANSFERRED (SUBLEASED) TO M/S STANDARD IT WEB SOLU TIONS PRIVATE LIMITED AT VALUE OF 78 CRORE. ACCORDING TO THE ASSESSING OFFICER, DIFFERENT RATE ADOPTED FOR TRANSFER (OR SUBLEASE) O F TWO TOWERS BY 3 ITA NO.7826/DEL/2018 THE ASSESSEE WAS NOT JUSTIFIED. THE ASSESSING OFFIC ER REDUCED THE EXCESS PROFIT AND CONSEQUENT DEDUCTION UNDER SECTIO N 80IAB OBSERVING AS UNDER: 3.8 FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT VA LUE OF 5322 SQM OF LAND TRANSFERRED @ OF RS. 50,000/- SQM TO STANDARD IT WEB SOLUTIONS PVT. LTD. IS EXCESSIVE AND SHOULD HAVE BE EN AT 50% OF THE VALUE RATE ADOPTED. THUS CORRECT VALUE OF LAND WORK S OUT TO RS. 13,30,50,000/- (5322 X 25,000) AS AGAINST RS. 26,61 ,00,000/- (5322 X 50,000) ADOPTED BY THE VALUER AND THE ASSES SEE. EXCESS VALUE OF LAND IS NOT ALLOWABLE AS DEDUCTION AS PROV IDED UNDER THE PROVISIONS OF SECTION 80IA (8) AND 80IA (10) AS DIS CUSSED ABOVE. IN VIEW OF ABOVE DISCUSSION, DEDUCTION CLAIMED U/S 80I AB TO THE EXTENT OF RS. 13,30,50,000/- IS DISALLOWED AND ADDED BACK TO THE INCOME DECLARED IN THE RETURN OF INCOME. THE UNDERSIGNED I S SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F ITS INCOME AND IS LIABLE FOR PENALTY U/S 271(1 ME) OF THE ACT PENA LTY PROCEEDINGS U/S 271 (1)(C) ARE INITIATED SEPARATELY. 2.1 ON FURTHER APPEAL, THE ASSESSEE CHALLENGED LEGALIT Y OF ASSESSMENT BY WAY OF ADDITIONAL GROUND AND ALSO CHA LLENGED THE ADDITION ON MERIT. ACCORDING TO THE ASSESSEE, THE P ART DISALLOWANCE OF DEDUCTION UNDER SECTION 80IAB IS NO T BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH AND THEREFORE IN VIEW OF VARIOUS DECISION OF THE HO NBLE HIGH COURTS, NO ADDITION COULD HAVE BEEN MADE UNDER 153 A PROCEEDINGS. THE LD. CIT(A) SOUGHT COMMENT FROM THE ASSESSING OFFICER ON THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE CHALLENGING LEGALITY OF ADDITION. IN THE REMAND REP ORT, THE ASSESSING OFFICER REFERRED TO APPRAISAL REPORT (A R EPORT SENT BY THE INVESTIGATING OFFICER TO THE ASSESSING OFFICER ON I NQUIRIES CARRIED OUT BY HIM AND COMMENT ON THE EVIDENCE COLLECTED DU RING SEARCH AND POST SEARCH PROCEEDINGS) AND SUBMITTED THAT ADD ITION WAS BASED ON CORE DOCUMENTS BEING DOCUMENTS AND STATEME NT RECORDED BOTH DURING AND POST SEARCH PROCEEDING. TH E LD. CIT(A) 4 ITA NO.7826/DEL/2018 IN HIS DETAILED FACTUAL FINDING HELD THAT IN THE AS SESSMENT ORDER FOR MAKING ADDITION THERE WAS ONLY REFERENCE OF THE STATEMENT OF VALUER SH. B.P. SINGH, WHICH WAS RECORDED IN POST S EARCH PROCEEDINGS AND THEREFORE ADDITION WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH. THE RELEVANT DISCUSSION IN THE IMPUGNED ORDER ON THE IS SUE WHETHER THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80 IAB IS BASED ON INCRIMINATING MATERIAL OR NOT, IS REPRODUCED AS UND ER: 4.7 THE AO HAS REFERRED TO THE APPRAISAL REPORT AN D STATED THAT THE PERUSAL OF THE APPRAISAL REPORT SHOWS THAT THE CASE IS BASED ON CORE DOCUMENTS BEING DOCUMENTS AND STATEMENTS RECORDED B OTH DURING AND POST SEARCH PROCEEDINGS. THE APPRAISAL REPORT I S A CONFIDENTIAL DOCUMENT AND CANNOT BE CONFRONTED TO THE APPELLANT. THEREFORE, MERE REFERENCE TO THE APPRAISAL REPORT DOES NOT EST ABLISH THE CASE OF THE AO. IT IS UNDISPUTED THAT THE INCRIMINATING MAT ERIAL WOULD BE USED FOR THE ASSESSMENT (OTHERWISE, IT CANNOT BE SA ID TO BE INCRIMINATING). IN THE REPORT DATED 12.09.2018, THE AO HAS NOT STATED WHICH SEIZED DOCUMENTS HAVE ACTUALLY BEEN USED FOR THE ASSESSMENT. AS CAN BE SEEN FROM THE PERUSAL OF THE ASSESSMENT ORDER, SPECILICAIIY THE ABOVE REPRODUCED PORTION OF THE ASSESSMENT ORDER (REF. PARA 3.2 OF THE ASSESSMENT ORDER) THAT THE ONLY SPECIFIC REFERENCE IS TO THE STATEMENT OF SH. B.P. SINGH, TH E VALUER. THE DATE OF THE STATEMENT HAS NOT BEEN MENTIONED. HOWEVER, I T HAS BEEN CLEARLY STATED THAT THE STATEMENT WAS RECORDED IN T HE POST SEARCH PROCEEDINGS. 4.8 THE AO HAS ALSO REFERRED TO THE STATEMENTS OF T HE EMPLOYEE OF M/S AACHVIS SOFTECH (P) LTD AND THREE C UNIVERSAL G ROUP, THAT THE APPELLANT AND THE ENTITIES (NAMELY, I) M/S STANDARD IT WEB SOLUTIONS PVT. LTD., II) M/S AACHVIS IT SEZ INFRA (P) LTD AND III) THREE C FACILITY MANAGEMENT LTD} ARE RELATED AS CO-DEVELOPERS IN SEZ AND ARE ACTIVELY INVOLVED IN THE BUSINESS RELATED TO SEZ. F IRST OF ALL, IT IS A GENERAL INFORMATION THAT THE APPELLANT AND THE ENTI TIES (NAMELY I) M/S STANDARD IT WEB SOLUTIONS PVT. LTD., II) M/S AA CHVIS IT SEZ INFRA (P) LTD. AND III) THREE C FACILITY MANAGEMENT LTD.} ARE RELATED AS CODEVELOPERS IN SEZ AND ARE ACTIVELY INVOLVED IN THE BUSINESS RELATED TO SEZ. THIS, BY NO STRETCH OF IMAGINATION, CAN BE SAID TO BE INCRIMINATING. THIS KIND OF INFORMATION IS, OTHER WISE, FREELY AVAILABLE IN THE RELEVANT BUSINESS CIRCLE AND CANNO T BE SAID TO BE UNEARTHED DUE TO SEARCH. SECONDLY, THE NAMES OF T HE EMPLOYEES WHOSE STATEMENTS ARE BEING REFERRED TO HAVE NOT BEE N SPECIFIED. NOR 5 ITA NO.7826/DEL/2018 SPECIFIC CONTENTS OF THE STATEMENTS HAVE BEEN MENTI ONED. CERTAINTY, THE ASSESSMENT ORDER DOES NOT REFER TO ANY SUCH STA TEMENTS. 4.9 A PERUSAL OF ABOVE REPRODUCED PARA 7 OF THE NOT ICE DATED 14.10.2015, IN PARA 4.5 ABOVE, SHOWS THAT TILL ISSU E OF THIS NOTICE DATED 14.10.2015, THE DEPARTMENT WAS ONLY AWARE OF SAID TRANSFER BUT NOT OF ANY FURTHER DETAILS (THAT IS WHY DETAILS MENTIONED THEREIN WERE REQUISITIONED). 4.10 FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT I S NOTED THAT IT CANNOT BE THE CASE OF THE DEPARTMENT THAT THE TRANS ACTION OF SALE/TRANSFER OF SEZ TO AACHVIS IT SEZ INFRA PVT. L TD. AND STANDARD IT WEB SOLUTION PVT. LTD. WAS NOT RECORDED IN BOOKS OF ACCOUNTS. IN FACT, THE PROFIT OUT OF THE SAID SALE/TRANSFER HAS BEEN ACCOUNTED IN BOOKS OF ACCOUNTS AND DEDUCTION U/S 80IAB HAS BEEN CLAIMED. IT IS MENTIONED IN THE ASSESSMENT ORDER THAT IN RESPONSE TO NOTICE U/S 153A, AR OF THE APPELLANT REQUESTED TO TREAT ORIGIN AL RETURN FILED ON 30.09.2011 AS RETURN FILED IN RESPONSE TO NOTICE U/ S 153A. SUBSEQUENTLY, THE AO HAS REDUCED THE DEDUCTION CLAI MED U/S 80IAB BECAUSE OF THE DISPUTE ON VALUATION OF SOLD/TRANSFE R LAND. THEREFORE, THERE IT CANNOT BE UNDER DISPUTE THAT THE FACT OF T RANSFER/SALE OF SEZ TO AACHVIS IT SEZ INFRA PVT. LTD. AND STANDARD IT W EB SOLUTION PVT. LTD. WAS RECORDED IN BOOKS OF ACCOUNTS AND CORRESPO NDING RETURN WAS FILED AND INTIMATION U/S 143(1) WAS RECEIVED BE FORE THE DATE OF SEARCH. A PERUSAL OF BALANCE SHEET OF M/S AACHIVIS SOFTTECH PVT. LTD. FOR THE YEAR ENDING 31.03.2011 SHOWS THAT AS PER SU B-PARAS I), II) AND III) OF PARA 3 OF SCHEDULE 12 (SIGNIFICANT ACCO UNTING POLICIES AND NOTES ANNEXED TO AND FORMING PART OF BALANCE SHEET AS AT 31 ST MARCH, 2011 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON THAT DATE), IT IS MENTIONED THAT THERE WAS LEASE DE ED DT. 31.09.2007 WITH NOIDA AUTHORITY AND LATER ON SUB-LEASE AGREEME NTS WERE EXECUTED NAMELY I) CO-DEVELOPMENT AGREEMENT DT. 30. 11.2009 READ WITH SUPPLEMENTARY CO-DEVELOPMENT AGREEMENT DT. 30. 10.2010 WITH M/S AACHIVIS IT SEZ INFRA PVT. LTD. AND II) CO-DEVE LOPMENT AGREEMENT DT. 30.11.2010 WITH M/S STANDARD IT WEB S OLUTION PVT. LTD. A COPY OF RELEVANT PORTIONS OF THE SAID SCHEDU LE 12 ARE REPRODUCED BELOW: AACHVIS SOFTECH PRIVATE LIMITED SCHEDULE '12 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ANNEXED T O AND FORMING PART OF BALANCE SHEET AS AT 31 MARCH, 2011 AND THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON THAT DATE : 1. BACKGROUND THE COMPANY/WAS INCORPORATED ON 9 TH JULY, 2007 WITH THE MAIN OBJECT TO ACQUIRE LAND AND TO CONSTRUCT AND DEVELOP/OPERATE/MAINTAIN THE BUILDING FOR SETTING UP 6 ITA NO.7826/DEL/2018 SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR IT/ITES S ECTOR. THE COMPANY HAS CONSTRUCTED AND DEVELOPED A SRZ BUILDING AT PLOT NO . 7, SECTOR 144, NOIDA, UTTAR PRADESH, PART OF WHICH IS UNDER PROGRESS. .. 3. NOTES? I) IN TERMS OF LEASE DEED DATED 2ST SEPTEMBER, 200 7, THE NEW OKHLA INDUSTRIAL AUTHORITY (NOIDA AUTHORITY), THE LESSER, VIDE LETTE R DATED 13/11/2006 HAS ALLOTTED 1,00,498 SDQ. METRES OF LAND PLOT NO. 7, S ECTOR 144, NOIDA UTTAR PRADESH (THE SAID PLOT) FOR THE PURPOSE OF DEVEL OPING, OPERATING AND MAINTAIN THE SECTOR SPECIFIC SPECIAL ECONOMIC ZONE FOR ITES/ITES SECTOR AND VIDE THEIR APPROVAL LETTER DATED 7 TH FEBRUARY 2008, THE COMPANY BECAME ENTITLED TO HOLD SUCH LEASEHOLD LAND FOR A TERM OF 90 YEARS. OUT OF THE TOTAL CONSIDERATION FOR SUCH LEASEHOLD LAND, THE COMPANY HAD MADE PART PAYMENT WAS MADE BEFORE SIGNING OF THE LEASE DEED ON 21 ST SEPTEMBER, 2007 WHILE, THE BALANCE CONSIDERATION WAS PAYABLE IN 16 HALF YEARLY INSTALLMENTS (WHICH COMMENCED ON 12 TH MAY, 2007) ALONG WITH INTEREST RATE OF 11 % P. A. ON OUTSTANDING BALANCE , NOIDA AUTHORITY HAS THE FIRST CHARGE UPON THE DEMISED PROMISES FOR THE AMOUNT OF UNPAID BALANCE, CHARGE, INTEREST AND OTHER DUES. II) THE COMPANY HAS EXECUTED A CO-DEVELOPMENT AGREE MENT DATED 30 TH NOVEMBER 2009 READ WITH SUPPLEMENTARY CO-DEVELOPMENT AGREEME NT DATED 30 TH OCTOBER 2010 WITH M/S. AACHVIS IT SEZ INFRA PVT. LTD., ('SU B-LESSEE') FOR APPOINTMENT OF SUB-LESSEE AS THE CO-DEVELOPER TO UNDERTAKE TO D EVELOP, OPERATE AND MAINTAIN THE IT SEZ PROJECT ALONG WITH THE COMPANY OF THE SAID IT SEZ ON 52,038 SQ. METRES OUT OF A TOTAL AREA OF 1,00,498 S Q. METRES OF THE SAID PLOT, WHICH WAS DULY APPROVED BY THE BOARD OF APPROVAL, M INISTRY OF COMMERCE, GOVT. OF INDIA (BOA) , VIDE APPROVAL LETTERS DATE D 19-04-2010 AND 01-12- 2010 AND ACCORDINGLY ON 31 ST DECEMBER, 2010, A TRIPARTITE SUB-LEASE DEED WAS EXECUTED BETWEEN THE NOIDA AUTHORITY, THE COMP ANY AND FEE SUB- LESSEE. IIL) THE COMPANY HAS FURTHER EXECUTED ANOTHER CO-DE VELOPMENT AGREEMENT DATED 30 TH NOVEMBER 2010 WITH M/S. STANDARD IT WEB SOLUTIONS PVT. LTD,, ('SUB- LESSEE') FOR APPOINTMENT OF SUB-LESSEE AS THE CO-DE VELOPER TO UNDERTAKE- TO - DEVELOP, OPERATE AND MAMTAIN.FEE TT.SEZ PROJECT ALO NG WITH THE COMPANY OF THE SAID IT .SEZ ON 5,322 SQ. METRES AS SEPARATELY EARMARKED OUT OF A TOTAL AREA OF 1,00,498 SQ, METRES OF FEE SAID PLOT, WHICH WAS DULY APPROVED BY FEE BOA, VIDE APPROVAL LETTER DATED 19-04-2010 AND ACCO RDINGLY ON 31 ST DECEMBER, 2010, A TRIPARTITE SUB-LEASE DEED WAS EXE CUTED BETWEEN THE NOIDA AUTHORITY, THE COMPANY AND THE SUB-LESSEE. 4.11 A PERUSAL OF AUDIT REPORT U/S 80IAB (FORM NO. 10CCB) IN CASE OF M/S AACHIVIS SOFTTECH PVT. LTD. FOR AY 2011-12 (REF. CO LUMN NO. 28) SHOWS THAT THERE WERE REPORTING OF TRANSACTIONS BETWEEN M/S AACHIVIS SOFTTECH PVT. LTD. AND I) M/S AACHVIS IT SEZ INFRA PVT. LTD. AND II) M/S STANDARD IT WEB SOLUTION PVT. LTD. A COPY OF RELEVANT PORTIONS OF THE SAID SCHEDULE 12 A RE REPRODUCED BELOW: 7 ITA NO.7826/DEL/2018 4.12 THEREFORE, THE ABOVE MENTIONED REFERENCE IN TH E NOTICE DATED 14.10.2015 THAT PERUSAL OF THE DOCUMENTS FOUND DUR ING AND POST SEARCH SHOWS THAT YOU HAS TRANSFERRED/SOLD A SEZ TO AACHVIS IT SEZ INFRA PVT. LTD. AND STANDARD IT WEB SOLUTION PV T. LTD. CANNOT BE SAID TO BE INDICATING THAT ANY INCRIMINATING MAT ERIAL WAS FOUND DURING THE SEARCH. IT IS CLEARLY REFERRING TO THE T RANSACTION WHICH HAD ALREADY BEEN RECORDED IN BOOKS OF ACCOUNTS AS WELL AS FINALISED BALANCE SHEET. HONBLE DELHI HIGH COURT WHILE DELIV ERING JUDGMENT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. [ 2015 ] 52 TAXMANN.COM 391 (DELHI) HAS OBSERVED THAT IF THE BOOKS OF ACCOUNTS/ DOCUMENTS SEIZED DO NOT REFLECT ANY UNDISCLOSED INCOME, THE ASSESSME NTS ALREADY MADE CANNOT BE INTERFERED WITH. THE RELEVANT PORTIO N OF THE JUDGMENT IS REPRODUCED BELOW: 35. THE AO OF THE PERSON OTHER THAN THE ONE SEARCH ED ALSO, IS NOT, AT THE STAGE OF ISSUING NOTICE UNDER SECTION 153C/1 53A OF THE ACT, REQUIRED TO CONCLUDE THAT THE ASSETS/DOCUMENTS HAND ED OVER TO HIM BY THE AO OF THE SEARCHED PERSON REPRESENT OR INDIC ATE ANY UNDISCLOSED INCOME OF THE ASSESSEE UNDER HIS JURISD ICTION. AS EXPLAINED IN SSP AVIATION (SUPRA), SECTION 1.53C ON LY ENABLES THE AO OF A PERSON OTHER THAN THE ONE SEARCHED, TO INVE STIGATE INTO THE DOCUMENTS SEIZED AND/OR THE ASSETS SEIZED AND ASCER TAIN THAT THE SAME DO NOT REFLECT ANY UNDISCLOSED INCOME OF THE A SSESSEE (I.E A PERSON OTHER THAN THE ONE SEARCHED) FOR THE RELEVAN T ASSESSMENT YEARS. IF THE SEIZED MONEY, BULLION, JEWELLERY OR O THER VALUABLE ARTICLE OR THING SEIZED AS HANDED OVER TO THE AO OF THE ASS ESSEE, ARE DULY DISCLOSED AND REFLECTED IN THE RETURNS FILED BY THE ASSESSEE, NO FURTHER INTERFERENCE WOULD BE CALLED FOR. SIMILARLY , IF THE BOOKS OF 8 ITA NO.7826/DEL/2018 ACCOUNTS/DOCUMENTS SEIZED DO NOT REFLECT ANY UNDISC LOSED INCOME, THE ASSESSMENTS ALREADY MADE CANNOT BE INTERFERED W ITH. MERELY BECAUSE VALUABLE ARTICLES AND/OR DOCUMENTS BELONGIN G TO THE ASSESSEE HAVE BEEN SEIZED AND HANDED OVER TO THE AO OF THE ASSESSEE WOULD NOT NECESSARILY REQUIRE THE AO TO RE OPEN THE CONCLUDED ASSESSMENTS AND REASSESS THE INCOME OF TH E ASSESSEE. (EMPHASIS SUPPLIED) 4.13 ONCE IT IS NOT UNDER DISPUTE THAT THE FACT OF TRANSFER/SALE OF SEZ TO AACHVIS IT SEZ INFRA PVT. LTD. AND STANDARD IT WEB SOLUTION PVT. LTD. WAS RECORDED IN BOOKS OF ACCOUNTS AND COR RESPONDING RETURN WAS FILED AND INTIMATION U/S 143(1) WAS RECE IVED BEFORE THE DATE OF SEARCH, THERE IS INEVITABLE CONCLUSION THAT THE DOCUMENTS REFERRED TO IN THE ABOVE REPRODUCED PORTION OF NOTI CE DATED 14.10.2015 WERE NOT INCRIMINATING. 4.14 REGARDING, STATEMENT OF SH. BP SINGH (VALUER), RECORDED POST SEARCH (DATE OF RECORDING OF THIS STATEMENT IS NOT MENTIONED) REFERRED TO IN PARA 3.2 OF THE ASSESSMENT ORDER, IT IS MENTI ONED THAT, DURING THE POST SEARCH PROCEEDINGS, STATEMENT OF SH. BP SI NGH, THE VALUER WHO HAD VALUED THE LAND @RS. 50,000/- PER SQM WAS R ECORDED. IT WAS STATED BY HIM THAT THE LAND RATE WAS TAKEN AS R S. 50000/- PER SQ. METRE OF THE DEVELOPED AND WORKING SEZ PROJECT WHERE ALL THE FACILITIES WERE AVAILABLE FOR THIS PROJECT AS PER E XISTING MARKET RATE IN THE NEARBY LOCALITY AND CONSIDERING THE FAR. HE WAS ASKED AS TO WHETHER HE WAS AWARE THAT THE LAND WAS LEASE HOLD L AND FOR 90 YEARS AND HE WAS ALSO ASKED TO EXPLAIN AS TO HOW TH E VALUATION OF LAND CHANGES DUE TO THIS REASON. TO THIS IT WAS STA TED BY HIM THAT IN SUCH A CASE THE VALUATION SHOULD HAVE BEEN DONE AT RS. 25,000/- IF THIS SALE LEASE HOLD LAND. 4.15 IT HAS BEEN ARGUED BY THE AR THAT THE FACT OF LAND BEING LEASEHOLD HAS BEEN MENTIONED IN THE VALUATION REPOR T PREPARED BY SH. B.P. SINGH AS ON 31.12.2010 (SUBMITTED AS ANNEX URE-VIII, PAGE NO. 86 TO 94 OF THE PAPER BOOK SUBMITTED ON 11.04.2 018). THE AR, THEREFORE, ARGUED THAT THE FACT OF LAND BEING LEASE HOLD WAS ALREADY THERE IN THE KNOWLEDGE OF SH. B.P. SINGH AND CERTAI NLY, IT WAS RECORDED IN BOOKS OF ACCOUNTS BEFORE THE ACTION OF SEARCH & SEIZURE TOOK PLACE. IT WAS NOT UNEARTHED AS A RESULT OF S EARCH. THEREFORE, THE STATEMENT OF SH. B.P. SINGH DOES NOT COME IN TH E CATEGORY OF INCRIMINATING MATERIAL EMANATING FROM THE SEARCH. 4.16 AS STATED IN PARA 4.3 ABOVE, IT IS NOTED THAT THE AO HAS STATED IN HIS REPORT DATED 12.09.2018 THAT VALUATION REPOR T AS ON 31.12.2010 OF GOVERNMENT APPROVED VALUER SH. B.P. S INGH WAS NOT A FRESH EVIDENCE. IT WAS AVAILABLE WITH THE AO. THE F ORM 0-1 OF THE VALUATION REPORT IS REPRODUCED BELOW: 9 ITA NO.7826/DEL/2018 10 ITA NO.7826/DEL/2018 11 ITA NO.7826/DEL/2018 4.17 IT CAN BE SEEN FROM COLUMN 14 AND 15 OF THE AB OVE REPRODUCED FROM 0-1 THAT IN RESPONSE TO A QUESTION, IS IT FRE E HOLD OR LEASE HOLD LAND/, THE VALUER DID NOT SAY THAT IT WAS FREEHOLD LAND. THE VALUER HAS STATED, AS PER DEED. IN VIEW OF THIS DOCUMENT ARY EVIDENCE, IT IS CLEAR THAT THE VALUER WAS ALREADY AWARE THAT THE LA ND WAS LEASEHOLD LAND. THEREFORE, IT IS DIFFICULT TO BRUSH ASIDE THE ARGUMENT OF THE AR THAT THE FACT OF LAND BEING LEASEHOLD WAS NOT UNEARTHED AS 12 ITA NO.7826/DEL/2018 A RESULT OF SEARCH AND THE STATEMENT OF SH. B.P. SI NGH DOES NOT COME IN THE GORY OF INCRIMINATING MATERIAL EMANATING F ROM THE SEARCH. 4.18 IN CASE OF STATEMENT RECORDED U/S 132(4) {WHI CH IS RECORDED DURING THE SEARCH AND CAN BE ARGUED TO BE EMANATING FROM THE SEARCH} HONBLE DELHI HIGH COURT WHILE DELIVERING J UDGMENT IN CASE OF BEST INFRASTRUCTURE (INDIA) (P.) LTD. VS. PR. CI T, DELHI-2 [2017] 84 TAXMANN.COM 287 (DELHI) REFERRED TO ANOTHER JUDGMEN T OF HONBLE DELHI HIGH COURT IN CASE OF CIT V. HARJEEV AGGARWAL [2016] 70 TAXMANN.COM 95/241 TAXMAN 199 (DELHI) AND STATED TH AT STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE AC T OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCRIMINATING MATERIAL . THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED BELOW: 38. FIFTHLY, STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCR IMINATING MATERIAL AS HAS BEEN EXPLAINED BY THIS COURT IN HAR JEEV AGGARWAL (SUPRA). 4.19 SINCE, IT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT THE STATEMENT OF SH. B.P. SINGH WAS RECORDED DURING POS T SEARCH INVESTIGATION, THEREFORE, IT IS NOT RECORDED U/S 13 2(4) AND HENCE, PRIMA FACIE IT IS NOT COMING UNDER THE CATEGORY OF MATERIAL UNEARTHED DURING THE SEARCH. THEREFORE, IT IS A MATERIAL WHIC H EMANATED FROM THE SEARCH. HOWEVER, THIS ONUS HAS NOT BEEN DISCHAR GED. 2.2 THEREAFTER, THE LD. CIT(A) FOLLOWING THE JUDICIAL PRECEDENTS ON THE ISSUE IN DISPUTE QUASHED THE IMPUGNED REASSE SSMENT ORDER OF THE ASSESSING OFFICER, OBSERVING AS UNDER : 5.3 IT IS HELD THAT THE AO WAS NOT WITHIN THE JURI SDICTION BESTOWED ON HIM BY LAW TO MAKE THE IMPUGNED ADDITION AND, TH EREFORE, GROUND (NOS. 7 AND 8) ARE ALLOWED THE RE-ASSESSEMNT ORDER UNDER REFERENCE IS ACCORDINGLY QUASHED. 2.3 AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE INC OME TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL) CHALLE NGING THE FINDING OF THE LD. CIT(A). 3. WE HAVE HEARD REPRESENTATIVE OF BOTH THE PARTIES, WHO APPEARED THROUGH VIDEOCONFERENCING FACILITY. 3.1 THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSIN G OFFICER AND REFERRED TO PARA 5(F) OF THE IMPUGNED ORDER, WH ICH IS 13 ITA NO.7826/DEL/2018 REPRODUCTION OF THE REMAND REPORT OF THE ASSESSING OFFICER. THE LEARNED DR SUBMITTED THAT IN THE REMAND REPORT, THE ASSESSING OFFICER HAS MENTIONED THAT DISALLOWANCE OF SECTION 80IAB IS BASED ON THE DOCUMENTS AND STATEMENT RECORDED BOTH DURING THE SEARCH AND POST SEARCH PROCEEDINGS, AND THEREFORE THE LD. CIT(A) IS NOT JUSTIFIED IN QUASHING THE REASSESSMENT PROCEEDING. 3.2 THE LEARNED COUNSEL OF THE ASSESSEE, ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE LEARNED DR HAS MERELY REPEATED THE CONTENTION OF TH E LEARNED ASSESSING OFFICER IN THE REMAND REPORT, WHICH HAVE ALREADY BEEN CONSIDERED AND REJECTED BY THE LD. CIT(A) AND NO NE W ARGUMENTS HAVE BEEN RAISED BY THE LEARNED DR. ACCORDING TO HI M, THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IAB HAS B EEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT OF THE VALUER, SH. BP SINGH I.E. THE PROPERTY TRANSFERRED WAS LEAS EHOLD PROPERTY. HE SUBMITTED THAT LD. CIT(A) HAS ALREADY DEALT THIS ISSUE AND HELD THAT THE STATEMENT WAS RECORDED IN POST SEARCH PROCEEDING AND NOT IN THE NATURE OF INCRIMINATING MATERIAL FOU ND DURING THE COURSE OF THE SEARCH, AND THEREFORE LD. CIT(A) IS J USTIFIED IN HOLDING THAT NO ADDITION COULD HAVE BEEN MADE IN CA SE OF 153A PROCEEDING IN ABSENCE OF AN INCRIMINATING MATERIAL. 3.3 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE INSTANT CAS E, THE ONLY LEGAL ISSUE BEFORE US, IS THAT WHETHER THE RATIO OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA, (2016 ) 380 ITR 573 (DEL) IS APPLICABLE OF THE FACTS OF THE CASE OF THE ASSES SEE. IN THE CASE OF KABUL CHAWAL (SUPRA) HONBLE HIGH COURT HAS HELD 14 ITA NO.7826/DEL/2018 THAT ADDITION COULD BE MADE UNDER SECTION 153A PROC EEDINGS, IF FOLLOWING TWO CONDITIONS ARE SATISFIED: (A) ASSESSMENT WAS PENDING AS ON THE DATE OF THE SEARCH FOR THE RELEVANT ASSESSMENT YEAR (B) INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH QUA THE ADDITION/DISALLOWANCE MADE. 3.4 IN THE INSTANT CASE BEFORE US, BOTH THE PARTIES AG REED THAT NO ASSESSMENT WAS PENDING AS ON THE DATE OF THE SEARCH AND THEREFORE THE FIRST CONDITION IS NOT DISPUTED. THE ONLY DISPUTE IS REGARDING THE SECOND CONDITION WHETHER THERE WAS AN Y INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH QUA THE PART DISALLOWANCE OF DEDUCTION UNDER SECTION 80 IAB OF THE ACT. THE LEARNED ASSESSING OFFICER HELD TRANSFER OF LAND AT THE RATE OF RS. 50000/ PER SQUARE METRE TO M/S STANDAR D IT WEB SOLUTIONS PRIVATE LIMITED AS EXCESSIVE AND APPLIED THE RATE OF 25,000 PER SQUARE METRE AND REDUCED THE PROFIT ACCO RDINGLY. THE LEARNED ASSESSING OFFICER IN PARA 3.6 TO 3.7 OF THE ASSESSMENT ORDER HAS GIVEN THE BASIS FOR REDUCTION IN THE RATE OF LAND. FOR READY REFERENCE , THE RELEVANT PARAGRAPH ARE REPROD UCED AS UNDER: 3.6 ON CONSIDERATION OF REPLIES OF THE ASSESSEE AN D FACTS OF THE CASE, IT IS EVIDENT THAT THE ASSESSEE HAS TRANSFERR ED ITS ASSETS AND LIABILITIES TO ITS SUBSIDIARY COMPANIES AND IP THE PROCESS GENERATED PROFITS ON ACCOUNT OF REVALUATION OF LAND, WHICH HA S BEEN LEASED OUT TO ITS SUBSIDIARIES. THIS LAND WAS SHOWN AS WORK IN PROGRESS IN THE BOOKS OF ASSESSEE. THUS, THE PROFITS ARE RELATED TO THE ASSETS OF THE APPROVED SEZ AND THEREFORE, THE PROFITS HAVE TO BE TREATED AS GENERATED FROM THE OPERATION AND MAINTENANCE OF THE SEZ, WHICH IS THE CONDITION PROVIDED IN THE SEC. 80IAB FOR AVAILI NG DEDUCTION. HOWEVER, THE CONTENTION OF THE ASSESSEE AS MENTIONE D W.R.T DIFFERENTIAL VALUATION OF LAND IS NOT CORRECT. IT I S STATED BY THE VALUER THAT IN THE CASE OF LEASE HOLD LAND, THE VALUE IS T AKEN AT 50% OF ITS VALUED THE VALUER HAD ALSO PROVIDED A COPY OF THE R ELEVANT RULES 15 ITA NO.7826/DEL/2018 WHICH WERE FURNISHED TO THE ASSESSEE ON ITS REQUEST . IN THESE RULES, UNDER THE HEAD OF ADJUSTMENT FOR UNEARNED INCREASE IN THE VALUE OF LAND, IT IS STATED AS UNDER: WHERE THE PROPERTY IS CONSTRUCTED ON LAND OBTAINED ON LEASE FROM THE GOVERNMENT, A LOCAL AUTHORITY OR ANY AUTHO RITY REFERRED TO IN CLAUSE (20A) OF SECTION 10 OF THE IN COME TAX ACT, AND THE GOVERNMENT OR ANY SUCH AUTHORITY IS, UNDER THE TERMS OF THE LEASE, ENTITLED TO CLAIM AND RECOVERY SPECIF IED PART OF THE UNEARNED INCREASE IN THE VALUE OF THE LAND AT THE T IME OF THE TRANSFER OF THE PROPERTY, THE VALUE OF SUCH PROPERT Y AS DETERMINED UNDER RULE 3 SHALL BE REDUCED BY THE AMO UNT SO LIABLE TO BE CLAIMED AND RECOVERED OR BY AN AMOUNT EQUAL OF FIFTY PERCENT OF THE VALUE OF THE PROPERTY AS SO D ETERMINED, WHICHEVER IS LESS, AS IF THE PROPERTY HAD BEEN TRAN SFERRED ON THE VALUATION DATE. EXPLANATION. FOR THE PURPOSE OF THIS RULE, UNEARNED INCREASE MEANS THE DIFFERENCE BETWEEN THE VALUE OF SUCH LAND ON THE VALUATION DATE AS DETERMINED BY THE GOVERNMENT OR S UCH AUTHORITY FOR THE PURPOSE OF CALCULATING SUCH INCRE ASE AND THE AMOUNT OF THE PREMIUM PAID OR PAYABLE TO THE GOVERN MENT OR SUCH AUTHORITY FOR THE LEASE OF THE LAND. 3.7 IT IS NOTED FROM THE .REPLY THAT THE ASSESSEE H AS MERELY STATED THAT THE ABOVE RULE IS NOT APPLICABLE FOR VALUATION OF ITS LAND. IT WAS NOT STATED AS TO HOW THEN VALUATION IS TO BE DONE A ND ON THE BASISOF WHICH RULE. FURTHER, A VALUER IS AN EXPERT IN HIS F IELD AND HIS OPINION AND BASIS OF VALUATION CANNOT BE REJECTED WITHOUT A NY PLAUSIBLE REASONS, THE VALUATION HAS TO BE DONE ON THE BASIS OF ABOVE RULE AND. THE RULE WAS-INCORRECTLY APPLIED BY THE VALUER AS HE WAS NOT AWARE OF THE FACT THAT THE LAND WAS A LEASEHOLD LAN D. THUS, ASSESSEES SUBMISSION REGARDING NON-APPLICATION OF ABOVE RULE IS NOT ACCEPTABLE. FURTHER, THE ASSESSEE HAS CONTENDED THAT UNDER SECT ION 80IAB, DEDUCTION IS TO BE PROVIDED FROM TOTAL INCOME AND S O, EVEN IF THE EXCESS VALUATION AMOUNT IS TREATED AS INCOME FROM O THER SOURCES, DEDUCTION IS TO BE ALLOWED. THIS INTERPRETATION BY THE ASSESSEE IS INCORRECT AS THE SECTION CLEARLY PROVIDES THAT THE DEDUCTION UNDER THIS SECTION IS LIMITED TO THE EXTENT OF 100% OF PR OFITS AND GAINS FROM THE BUSINESS. GAIN FROM INCORRECT OR EXCESS VALUATI ON OF LAND CANNOT BE TREATED AS PROFIT AND GAINS FROM THE BUSINESS OF DEVELOPMENT AND MAINTENANCE OF SEZ. THEN, AS DISCUSSED ABOVE, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IAB OF THE ACT. DEDUCTION IS PROVIDED UNDER THIS SECTION FOR ELIGIBLE BUSINESS INCOME AND NOT ANY ARTIFICIALLY INFLATED I NCOME. SECTION 16 ITA NO.7826/DEL/2018 80IAB (3) PROVIDES THAT THE PROVISIONS CONTAINED S UB SECTION (5) AND SUB SECTION (7) TO (12) OF SECTION 80IA SHALL APPLY TO THE SPECIAL ECONOMIC ZONES FOR THE PURPOSE OF ALLOWING DEDUCTIO NS UNDER SUB SECTION (1). FURTHER, SUB SECTION (8) & (10) OF SEC TION 80IA PROVIDE AS UNDER: A) SECTION 80IA(8).:- WHERE ANY GOODS [OR SERVICE S] HELD FOR THE PURPOSES OF THE ELIGIBLE BUSINESS ARE TRANSFERRED T O ANY OTHER BUSINESS CARRIED ON BY THE ASSESSEE, OR WHERE ANY G OODS [OR SERVICES] HELD FOR THE PURPOSES OF ANY OTHER BUSINE SS CARRIED ON BY THE ASSESSEE ARE TRANSFERRED TO THE ELIGIBLE BUSINESS AND, IN EITHER CASE, THE CONSIDERATION, IF ANY, FOR SUCH TRANSFER AS RECORDED IN THE ACCOUNTS OF THE ELIGIBLE BUSINES S DOES NOT CORRESPOND TO THE MARKET VALUE OF SUCH GOODS [OR SE RVICES] AS ON THE DATE OF THE TRANSFER, THEN, FOR THE PURPOSES OF THE DEDUCTION UNDER THIS SECTION, THE PROFITS AND GAINS OF SUCH ELIGIBLE BUSINESS SHALL BE COMPUTED AS IF THE TRANS FER, IN EITHER CASE, HAD BEEN MADE AT THE MARKET VALUE OF SUCH GOO DS [OR SERVICES] AS ON THAT DATE. B) SECTION 80IA(10): WHERE IT APPEARS TO THE ASSE SSING OFFICER THAT, OWING TO THE CLOSE CONNECTION BETWEEN THE ASS ESSEE CARRYING ON THE ELIGIBLE BUSINESS TO WHICH THIS SEC TION APPLIES AND ANY OTHER PERSON, OR FOR ANY OTHER REASON, THE COURSE OF BUSINESS BETWEEN THEM IS SO ARRANGED THAT THE BUSIN ESS TRANSACTED BETWEEN THEM PRODUCES TO THE ASSESSEE MO RE THAN THE ORDINARY PROFITS WHICH MIGHT BE EXPECTED TO ARI SE IN SUCH ELIGIBLE BUSINESS, THE ASSESSING OFFICER SHALL, IN COMPUTING THE PROFITS AND GAINS OF SUCH ELIGIBLE BUSINESS FOR THE PURPOSES OF THE DEDUCTION UNDER THIS SECTION, TAKE THE AMOUNT O F PROFITS AS MAY BE REASONABLY DEEMED TO HAVE BEEN DERIVED THERE FORE. 3.5 ON PERUSAL OF THE ABOVE PARAGRAPH OF THE ASSESSMEN T ORDER, WE FIND THAT BASIS OF REDUCING THE RATE OF TRANSFER OF LAND TO M/S STANDARD IT WEB SOLUTIONS PRIVATE LIMITED, IS STATE MENT OF THE VALUER SH. B. P. SINGH. THE LD. CIT(A) IN THE IMPUGN ED ORDER HAS DEALT THIS ISSUE AND HELD THAT STATEMENT OF THE BP SINGH HAS BEEN RECORDED IN POST SEARCH PROCEEDING. THE FACT THAT S TATEMENT OF THE SH. B.P. SINGH WAS RECORDED IN POST SEARCH PROCEEDI NG, HAS BEEN MENTIONED BY THE ASSESSING OFFICER HIMSELF IN PARA 3.2 OF THE ASSESSMENT ORDER. FOR READY REFERENCE, RELEVANT PAR AGRAPH IS REPRODUCED AS UNDER: 17 ITA NO.7826/DEL/2018 3.2 IT IS SEEN FROM THE ABOVE TABLE THAT THE MAJOR PART OF THE PROFIT HAS BEEN GENERATED ON ACCOUNT OF SALE OF LAND PART, WHICH IS NOT THE ACTUAL BUSINESS OF THE SEZ. FURTHER, DURING THE POS E SEARCH PROCEEDINGS, THE ASSESSEE WAS ASKED THE RATIONALE O F VALUING ONE PIECE OF LAND AT RS. 27,500/-SQM AND ANOTHER PIECE OF LAND AT RS. 50,000/-SQM WHILE THEY WERE IN THE SAME PLOT. THE A SSESSEE STATED THAT THE PLOT VALUED AT RS. 27500/-SQM HAD A FAR OF 2 WHILE THE OTHER BLOCK HAD A FAR OF 3.8. (2,21,000 (ACTUAL BUI LT AREA)/ 1,14,529 (AS ALLOWED FOR FAR 2)). THIS LED TO VALUATION OF L AND OF OTHER BLOCK AT RS. 50,000 (RS.27,500*3.8/2=RS. 52250/-). AS MENTIO NED ABOVE, VALUE OF LAND GIVEN TO TWO SUBSIDIARIES WAS RS. 27, 500/- SQM IN ONE CASE AND RS. 50,000/-SQM IN THE OTHER CASE. DURING THE POST SEARCH PROCEEDINGS, STATEMENT OF SH. B.P. SINQH, TH E VALUER WHO HAD VALUED THE LAND AT RS. 50,000/- SQM WAS REC ORDED. IT WAS STATED BY HIM THAT THE LAND RATE WAS TAKEN AS R S. 50000/- PER SQ. METRE FOR THE DEVELOPED AND WORKING SEZ PROJECT WHERE ALL THE FACILITIES WERE AVAILABLE FOR THIS PROJECT AS PER E XISTING MARKET RATE IN THE NEARBY LOCALITY AND CONSIDERING THE FAR. HE WAS ASKED AS TO WHETHER HE WAS AWARE THAT THE LAND WAS . LEASE HOLD LAND FOR 90 YEARS AND HE WAS ALSO ASKED TO EXPLAIN AS TO HOW TH E VALUATION OF LAND CHANGES DUE TO THIS REASON. TO THIS IT WAS STA TED BY HIM THAT IN SUCH A CASE THE VALUATION SHOULD HAVE BEEN DONE AT RS. 25,000/- IF THIS WAS LEASE HOLD LAND. 3.6 EVIDENTLY, THE STATEMENT OF THE BP SINGH WAS NOT R ECORDED DURING SEARCH PROCEEDING AND THEREFORE, THERE IS NO QUESTION OF CONSIDERING THE SAME AS PART OF THE INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF THE SEARCH. 3.7 THE LEARNED DR HAS FURTHER REFERRED TO THE REMAND REPORT OF THE ASSESSING OFFICER, WHEREIN IT IS MENTIONED THAT DISALLOWANCE IN QUESTION WAS BASED ON DOCUMENTS AND STATEMENT RE CORDED BOTH DURING AND POST SEARCH PROCEEDING. THE LEARNED DR WAS GIVEN OPPORTUNITY TO PRODUCE ANY SUCH SEARCH MATERI AL RELATED TO PART DISALLOWANCE UNDER SECTION 80IAB, WHICH IS IN THE NATURE OF THE INCRIMINATING, BUT HE FAILED TO PRODUCE ANY SUC H INCRIMINATING MATERIAL. THE LD. CIT(A) HAS ALREADY REJECTED THE CONTENTION OF THE ASSESSING OFFICER IN REMAND PROCE EDING WHICH WERE BASED ON THE APPRAISAL REPORT. MERELY, IF IT I S MENTIONED IN 18 ITA NO.7826/DEL/2018 THE APPRAISAL REPORT THAT CERTAIN DOCUMENTS ARE FOU ND DURING THE COURSE OF THE SEARCH, WHICH ARE INCRIMINATING IN NA TURE, IT CANNOT BE PRESUMED THAT SUCH MATERIAL WAS FOUND. THE ONUS IS ON THE REVENUE TO SUBSTANTIATE THEIR CLAIM WITH THE HELP O F PRODUCING RELEVANT INCRIMINATING MATERIAL EITHER BEFORE THE L D. CIT(A) OR BEFORE THE TRIBUNAL. THE REVENUE CANNOT TAKE SHELTE R OF THE APPRAISAL REPORT, WHICH IS A CONFIDENTIAL DOCUMENT BETWEEN THE INVESTIGATING WING AND THE ASSESSING OFFICER AND NO T A DOCUMENTARY EVIDENCE TO BE RELIED UPON BY THE APPEL LATE AUTHORITY. 3.8 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IN O UR OPINION, THE SECOND CONDITION OF THE RATIO OF THE DECISION I N THE CASE OF KABUL CHAWLA (SUPRA) IS NOT SATISFIED IN THE FACTS OF THE INSTANT CASE. THE FINDING OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE IS WELL REASONED AND ACCORDINGLY, WE UPHOLD THE SAME. THE G ROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE, 2021 SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH JUNE, 2021. RK/- (DTDS) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI