D.C.I.T CC - VII,kolkata, Kolkata V. M/s Anand Nirman Pvt Ltd., Kolkata

ITA 808/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1548 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN KUMAR
• Assessee Lawyers: AJAY GUPTA
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Document seized; Principle of natural justice; Source of fund; Additional evidence; Cost of acquisition; Documents seized
• Section: 143(3); 142(1); 68; 15

Judgement Text

1 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE .., /AND , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI WASEEM AHMED, AM] I.T.A. NOS. 808 & 809/KOL/2013 ASSESSMENT YEARS: 2008-09 & 2009-10 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-VII, KOLKATA. VS. M/S. ANAND NIRMAN PVT. LTD. (PAN: AAGCA2370L) APPELLANT RESPONDENT DATE OF HEARING 03.05.2017 DATE OF PRONOUNCEMENT 12.07.2017 FOR THE APPELLANT SHRI NIRANJAN KUMAR, CIT, DR FOR THE RESPONDENT SHRI AJAY GUPTA, FCA ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS FILED BY THE REVENUE ARE AGAINST THE COMMON ORDER OF LD. CIT(A), CENTRAL-I, KOLKATA DATED 18.01.2013 FOR AYS 2008-09 AND 2009-10. SINCE BOTH THESE APPEALS HAVE BEEN HEARD TOGETHER, WE DISPOSE OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP ITA NO. 808/KOL/2013. GROUND NO. 1 OF THE REVENUE APPEAL IS AGAINST THE ACTION OF THE LD. CIT(A) IN NOT GIVING OPPORTUNITY TO THE AO WHILE ADMITTING ADDITIONAL EVIDENCE AS CONTEMPLATED IN RULE 46A OF THE I. T. RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES). AT THE OUTSET ITSELF, THE LD. AR OF THE ASSESSEE DREW OUR ATTENTION TO PAGE NO. 58 OF THE IMPUGNED ORDER WHER EIN THE LD. CIT(A) NOTED AS UNDER: SINCE THE DOCUMENTS WHICH WERE FILED IN THE COURS E OF APPEAL WERE FOUND NOT TO HAVE BEEN FILED OR PRODUCED BEFORE THE AO, THESE DOCUMENTS AN D EVIDENCES WERE CONSIDERED TO BE 'ADDITIONAL EVIDENCES'. IT WAS FOUND THAT IN DECIDI NG THE APPELLANT'S APPEAL ON MERITS AND TO ASCERTAIN WHETHER OR NOT THE ADDITIONS MADE BY THE AO IN THE IMPUGNED ORDERS WERE LEGALLY CORRECT AND TENABLE, CONSIDERATION OF THESE DOCUMEN TARY EVIDENCES WAS NOT ONLY NECESSARY BUT ALSO PERTINENT AND RELEVANT. IN ABSENCE OF THESE DO CUMENTARY EVIDENCES AND WITHOUT DUE CONSIDERATION OF THE DOCUMENTS AND EXPLANATIONS FUR NISHED IN THE APPELLATE PROCEEDINGS, IT 2 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 WAS NOT POSSIBLE FOR THE APPELLATE AUTHORITY TO DEC IDE AS TO WHETHER THE ADDITIONS MADE IN THE IMPUGNED ORDERS WERE LEGALLY AND FACTUALLY CORRECT. IN THE CIRCUMSTANCES, IN TERMS OF THE POWERS CONFERRED BY RULE 46A(4) AS ALSO IN TERMS OF THE AUTHORITY CONFERRED ON ME BY SECTION 250(4), THE DOCUMENTS AND EXPLANATIONS FURNISHED BY THE APPELLANT CHALLENGING THE ADDITIONS U/S 68 &69 OF THE INCOME TAX ACT WERE ADMITTED. SIN CE THESE DOCUMENTS AND EVIDENCES WHICH WERE IN THE NATURE OF ADDITIONAL EVIDENCES WERE NOT FURNISHED BY THE APPELLANT BEFORE THE ASSESSING OFFICER AND HE HAD NO OPPORTUNITY OF EXAM INING THE VERACITY THEREOF THE SAME WERE FORWARDED TO THE AO FOR HIS COMMENTS AND REPORT THE REON. THE REMAND REPORT AS CALLED FOR WAS FURNISHED BY THE AO ON 30-11-2012. THE RELEVANT EXTRACTS OF THE REMAND REPORT HAVE ALREADY BEEN REPRODUCED IN THE EARLIER PART OF THIS ORDER. WHILE COMMENTING ON THE ADDITIONAL EVIDENCES, THE AO HAS STATED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT DID NOT RESPOND POSITIVELY AND HAD FAILED TO AVAIL OPPO RTUNITIES TO EXPLAIN THE TRANSACTIONS AT THE ASSESSMENT STAGE. ACCORDING TO, THE AO, THE NON-COM PLIANCE AND NON-PRODUCTION OF THE RELEVANT EVIDENCES WAS DELIBERATE AND WITH AN INTEN TION TO EVADE INVESTIGATION AND ENQUIRIES ABOUT THE NATURE AND SOURCE OF THE TRANSACTIONS. AC CORDING TO THE AO, THE APPELLANT HAD ADOPTED A DELIBERATE NON-COOPERATIVE ATTITUDE BY EV ADING THE ENTIRE PROCEEDINGS OF SEARCH ASSESSMENTS BY ADOPTING, MALICIOUS DESIGNS. THE DES IGN ADOPTED ON THE PART OF THE APPELLANT DEPRIVED THE REVENUE THE OPPORTUNITY OF CONDUCTING PROPER ENQUIRIES AND EXAMINING THE BOOKS OF ACCOUNTS. ACCORDING TO THE AO, EVEN IN THE REMAN D PROCEEDINGS, THE APPELLANT PRODUCED COMPLETE BOOKS ONLY ON THE 27TH NOVEMBER 2012 WHICH WAS JUST A DAY BEFORE SUBMISSION OF THE REMAND REPORT. THE AO IN HIS REMAND REPORT AT P ARA-L1.L TO 11.8 HAS MADE OUT A CASE THAT THE CIT(A) SHOULD CONDUCT HIS OWN INDEPENDENT ENQUIRIES INTO THE TRANSACTIONS OF THE APPELLANT AND OF THE PERSONS CONNECTED WITH IT. WIT H REFERENCE TO THE VARIOUS FACETS OF THE APPELLANT'S TRANSACTIONS WITH ITS CREDITORS, THE AO HAS CLAIMED THAT THE APPARENT WAS NOT REAL AND THE REAL WAS NOT APPARENT. WITH REGARD AND REFE RENCE TO THE TRANSACTIONS REFLECTED IN THE BANK STATEMENTS OF THE APPELLANT'S CREDITORS, A PLE A WAS MADE BY THE AO THAT THE DEPARTMENT SHOULD BE PROVIDED WITH ADEQUATE OPPORTUNITY TO ENQ UIRE INTO ALL THESE ASPECTS FOR THE SAKE OF NATURAL JUSTICE. ON DUE CONSIDERATION OF THE FACTS OF THE CASE AND THE REMAND REPORT OF THE AO, I AM OF THE CONSIDERED VIEW THAT THE REQUEST MADE B Y THE AO DOES NOT APPEAR TO BE FAIR AND PROPER. AN APPELLATE AUTHORITY IS A CREATION OF LAW . CIT(A) DERIVES HIS POWERS FROM SECTION 250 OF THE INCOME TAX ACT; AND SO, HE CANNOT EXPAND THE SCOPE OF THE APPELLATE PROCEEDINGS BEYOND THE POWERS CONFERRED ON HIM BY SECTION 250. THE REMAND PROCEEDINGS WERE RESORTED IN THE PRESENT APPELLATE PROCEEDINGS BECAUSE IT WAS FO UND THAT IN DECIDING THE APPEALS ON MERIT, ADMISSION OF THE ADDITIONAL EVIDENCE WAS NECESSARY. THERE IS AN UNDER TONE IN THE REMAND REPORT THAT SUCH ADDITIONAL EVIDENCE WAS NOT FILED BEFORE THE AO BY DESIGN AND WITH A VIEW TO EVADE ENQUIRY OR INVESTIGATION. IN MY OPINION, HOWE VER, ADMISSION OF THE ADDITIONAL EVIDENCE WAS NECESSARY AS ALSO PERTINENT AND RELEVANT. IN AB SENCE OF THESE DOCUMENTS AND EVIDENCES, ONE COULD NOT DECIDE THE QUESTION AS TO WHETHER THE AO WAS JUSTIFIED IN MAKING THE ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH CREDIT OR UNEXPLAINE D EXPENDITURE OR UNEXPLAINED INVESTMENT. ACCORDINGLY, IN TERMS OF THE POWERS CONFERRED U/S 2 50(4), THE ADDITIONAL EVIDENCES WERE ACCEPTED. EVEN RULE 46A OF THE INCOME TAX RULES AUT HORIZES THE APPELLATE AUTHORITY TO ADMIT SUCH ADDITIONAL EVIDENCE IF CONSIDERATION OF SUCH E VIDENCE IS NECESSARY FOR ADJUDICATION OF THE APPEAL. THE ONLY LIMITATION ON THE POWER OF THE CIT CA) WHILE ADMITTING SUCH ADDITIONAL EVIDENCE IS THAT THE AO SHOULD BE AFFORDED REASONAB LE OPPORTUNITY OF EXAMINING SUCH EVIDENCE AND FURNISHES HIS COMMENTS THEREON AND WHICH THE AP PELLATE AUTHORITY IS EXPECTED TO CONSIDER WHILE DECIDING THE APPEAL. SUCH OPPORTUNITY MANDATE D BY RULE 46A WAS GIVEN TO THE AO, AND IN CONSEQUENCE THERETO, THE AO DID CONDUCT HIS OWN ENQUIRIES BY ISSUING NOTICES TO THE APPELLANT AS WELL AS TO THE SUNDRY CREDITORS AND PA RTIES WITH WHOM THE APPELLANT HAD TRANSACTIONS WITH REFERENCE TO WHICH ADVERSE INFERE NCES WERE DRAWN. IN VIEW OF THE FACT THAT THE AO WAS GRANTED SUFFICIENT AND ADEQUATE OPPORTUN ITY OF EXAMINING THE ADDITIONAL EVIDENCES, I HOLD THAT THERE WAS NO BREACH OF RULE 46A OF THE INCOME TAX RULES, AND THEREFORE, IN DECIDING THE APPEAL, I AM TAKING INTO CONSIDERAT ION THE ADDITIONAL EVIDENCES FURNISHED AS ALSO THE AO'S COMMENTS MADE WITH REFERENCE THERETO IN HIS REMAND REPORT. THIS VIEW IS 3 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 SUPPORTED BY THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS SURETECH HOSPITAL & RESEARCH CENTRE LTD (293 ITR 53) AND THAT OF THE .M.P. HIGH COURT IN THE CASE OF CIT VS GANI BHAI WAHAB BHAI (232 ITR 900). AFTER GOING THROUGH THE AFORESAID OBSERVATIONS OF T HE LD. CIT(A) WE FIND THAT THE LD. CIT(A) HAD FORWARDED THE ADDITIONAL EVIDENCE BEFORE THE AO AND SOUGHT HIS REMAND REPORT AND THE AO HAD CONDUCTED ENQUIRIES BEFORE FORWARDI NG THE REMAND REPORT. THEREFORE, WE DO NOT FIND ANY VIOLATION OF RULE 46A OF THE RULES AND, THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 3. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS IN RESPECT OF DELETION OF ADDITION OF RS. 7 CR. WHICH WAS CLAIMED BY THE ASSESSEE AS SHARE AP PLICATION MONEY IN THE NAME OF MR. UTSAV PAREKH. BRIEF FACTS OF THE CASE ARE THAT THE AO ON PERUSAL OF THE ASSESSEES BALANCE SHEET AS ON 31.03.2008 FOUND THAT A SUM OF RS.13,50 ,20,177/- APPEARING UNDER THE HEAD CURRENT LIABILITIES WHICH PRIMARILY CONSISTS OF R S. 7 CR. SHOWN UNDER THE HEAD SHARE APPLICATION MONEY AND RS.6.50 CR. AS ADVANCE. B ESIDES, THERE WERE FEW OTHER CURRENT LIABILITIES ON ACCOUNT OF UNPAID EXPENSES, SUCH AS AUDIT FEES, MUTATION FEES ETC. THE AO ADDED THE ENTIRE CURRENT LIABILITY OF RS.13,50,2 0,177/- APPEARING IN THE BALANCE SHEET AS ON 31.03.2008 AS INCOME U/S. 68 OF THE INCOME-TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) (THE LD. CIT(A) NOTES THAT THE CORRECT FIGUR E IS RS.13,50,10,227/- WHICH WAS WRONGLY TAKEN BY THE AO AS RS.13,50,20,177/-). THE AFORESAID ADDITION MADE BY THE AO HAD MAINLY TWO COMPONENTS VIZ., RS. 7 CR. BEING SHA RE APPLICATION MONEY RECEIVED FROM MR. UTSAV PAREKH AND RS.6.5 CR., INTER ALIA, INCLUDED R S.3.5 CR. BEING ADVANCE RECEIVED BY THE ASSESSEE FROM M/S. CITY STAR INFRASTRUCTURE LTD. AN D RS.3 CR. RECEIVED FROM M/S. PURBANCHAL PRESSTRESSED LTD. ACCORDING TO AO, THE ASSESSEE DI D NOT SUBMIT ANY DETAILS AND SINCE THE ONUS OF PROVING THE EXPENSES OF THE CREDITOR/SHARE APPLICANT, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE ASSESSEE AND HAD FAILED TO DISCHARGE THE SAME THE AO MADE THE ADDITION OF RS.13.5 CR. AS INCOME OF THE ASSESSEE U /S. 68 OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DELETE THE SAME AFTER CALLING FOR REMAND REPORT AND PERUSING EVIDENCE PRODUCED BY THE ASSESSEE DURING THE APPELLATE PROCEEDING. AGGRIEVED BY THE AFORESAID ACTION OF T HE LD. CIT(A) REVENUE IS BEFORE US. 4 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAS ADDED RS. 7 CR. WHIC H THE ASSESSEE RECEIVED FROM MR. UTSAV PAREKH AS SHARE APPLICATION MONEY. THE LD. CIT(A) HAS TAKEN THE SAID AMOUNT AS ADVANCE GIVEN FOR SHARES TO BE ALLOTTED TO HIM. THE LD. CI T(A) HAS TAKEN NOTE THAT THE SHARES HAVE NOT BEEN ALLOTTED TO MR. UTSAV PAREKH. IN ORDER TO PROVE THE IDENTITY OF MR. UTSAV PAREKH THE LD. CIT(A) TOOK NOTE OF THE FACT THAT MR. UTSAV PAREKH IS REGULARLY ASSESSED TO TAX AND FOR AY 2008-09 HIS RETURN OF INCOME WAS FURNISHED O N 13.10.2008 WITH DCIT, CENTRAL CIRCLE-XXVIII, KOLKATA WHO ALSO FUNCTIONS UNDER THE JURISDICTION OF CIT, CENTRAL-1, KOLKATA BEING THE JURISDICTIONAL COMMISSIONER OF TH E ASSESSEE. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT FOR AY 2008-09, THE INCOME TAX ASS ESSMENT IN THE CASE OF MR. UTSAV PAREKH WAS COMPLETED U/S. 143(3) OF THE ACT BY DCIT, CENTR AL CIRCLE-XXI, KOLKATA AND THE COPY OF THE SAME HAS BEEN PLACED ON RECORD. DURING THE APP ELLATE PROCEEDINGS, THE ASSESSEE HAD PRODUCED CONFIRMATION FROM MR. UTSAV PAREKH. THE L D. CIT(A) TOOK NOTE OF THE FACT THAT DURING THE REMAND PROCEEDINGS THE AO HAD ISSUED NOT ICE TO MR. UTSAV PAREKH FOR VERIFICATION OF HIS TRANSACTION WITH THE ASSESSEE W HICH HAS BEEN COMPLIED TO FROM HIS PART. THUS, THE ASSESSEE HAS PROVED THE IDENTITY OF MR. U TSAV PAREKH. THE LD. CIT(A) ALSO NOTES THAT THE AO IN HIS REMAND REPORT HAS FAIRLY CONCEDE D THAT MR. UTSAV PAREKH IS A MAN OF FINANCIAL ACUMEN AND IS A LEADING BUSINESSMAN OF KO LKATA AND HEAD OF WELL-KNOWN STOCK BROKING FUND KNOWN AS M/S. STEWART & CO. THE AO AL SO NOTED THAT MR. UTSAV PAREKH IS ALSO IN THE BOARD OF SEVERAL LARGE PUBLIC COMPANIES . THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE BANK STATEMENTS OF MR. UTSAV PAREKH MAINTA INED WITH HDFC BANK, STANDARD CHARTERED BANK, CITY BANK WERE PRODUCED AND EXAMINE D BY THE AO. THE LD. CIT(A) ALSO HAD GONE THROUGH THE PERSONAL BALANCE SHEET OF MR. UTSAV PAREKH FROM WHERE THE AMOUNT OF RS. 7 CR. ADVANCED TO THE ASSESSEE HAS BEEN DULY REFLECTED. IN THE INCOME-TAX RETURN OF MR. UTSAV PAREKH (THE PERSONAL ACCOUNT) THE TRANSA CTION WITH THE ASSESSEE AS WELL AS THE TRANSACTION WITH MR. HEMENDRA KOTHARY HAD BEEN DULY REFLECTED. ADMITTEDLY, THE AMOUNT OF RS. 7 CR. GIVEN TO THE ASSESSEE HAS BEEN ROUTED THR OUGH BANKING CHANNEL AND IT HAS BEEN BROUGHT TO OUR KNOWLEDGE THAT SHRI HEMENDRA KOTHARY DURING THE ASSESSMENT YEAR HAD GIVEN RS. 25 CR. AND RS. 15 CR. AGGREGATING TO RS. 40 CR. TO MR. UTSAV PAREKH THROUGH BANKING CHANNEL AND ONLY LESS THAN 20% OF THE FUNDS RECEIVED FROM MR. HEMENDRA KOTHARY 5 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 HAS BEEN GIVEN TO THE ASSESSEE. THUS, WE CANNOT DO UBT THE GENUINENESS AND CREDITWORTHINESS OF MR. UTSAV PAREKH. THEREFORE, WITH THE AFORESAID DOCUMENTS PRODUCED BY THE ASSESSEE AND THE CONFIRMATION FROM MR. UTSAV PAREKH WHICH IS ON RECORD AND ADMITTEDLY MR. UTSAV PAREKH BEING AN INCOME TAX ASSESSEE AND THE AO OF M R. UTSAV PAREKH COULD NOT FIND ANY FAULT IN THE CREDITWORTHINESS OF MR. UTSAV PAREKH A ND SINCE THE ASSESSEE COMPANY IS ALSO SITUATED IN THE SAME BUILDING AS THAT OF MR. UTSAV PAREKH, WE CANNOT SAY THAT MR. UTSAV PAREKH WAS TOTALLY A STRANGER FOR THE ASSESSEE COMP ANY AND MR. UTSAV PAREKH BEING A LEADING BUSINESSMAN HAS THOUGHT IT PRUDENT TO INVES T IN THIS COMPANY CANNOT BE DOUBTED. THEREFORE, WE DO NOT FIND ANY FAULT IN THE APPROACH OF THE LD. CIT(A) AND, THEREFORE, WE UPHOLD THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE AO ON SURMISES AND CONJECTURES. THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 5. GROUND NO. 3 IS AGAINST THE DELETION OF ADDITION OF UNEXPLAINED ADVANCES OF RS.6.5 CR. IN THE NAME OF M/S. PURBANCHAL PRESSTRESS LTD. AND M/S. CITY STAR INFRASTRUCTURE PVT. LTD. FACTS OF THE CASE HAS ALREADY BEEN DISCUSSED IN RES PECT OF GROUND NO. 2 WHICH MAY BE READ FOR THIS GROUND ALSO AND FOR THE SAKE OF BREVITY WE ARE NOT REPEATING THE FACTS AGAIN. THE AO AFTER GOING THROUGH THE BALANCE SHEET OF THE ASS ESSEE NOTED THAT THE ASSESSEE HAS SHOWN IN ITS BALANCE SHEET THE SAID AMOUNT AS ADVANCE. W HEN ASKED, THE ASSESSEE STATED THAT THIS AMOUNT INCLUDED RS. 3.5 CR. RECEIVED FROM M/S. CITY STAR INFRASTRUCTURE PVT. LTD. THE LD. CIT(A) NOTED THAT IN THE REMAND REPORT THE AO HAS A DMITTED THAT HE HAD ISSUED NOTICES IN RESPECT OF BOTH THE COMPANIES AND THE SAID COMPANI ES COMPLIED TO THE NOTICE ISSUED BY THE AO. THE AO HAD ADMITTED THAT THE BALANCE SHEET AND BANK STATEMENT OF THE SAID COMPANIES WERE PRODUCED AND THE SOURCE OF FUNDS OUT OF WHICH MONIES WERE ADVANCED BY THE TWO PARTIES WERE EXPLAINED. IN THE CASE OF CITY STAR I NFRASTRUCTURE PVT. LTD., THE AO FOUND THAT BEFORE THE AMOUNTS WERE ADVANCED IT HAD RECEIVED RS . 2.5 CR FROM M/S. SUBHAS YURIM TEXTILES LTD. ACCORDING TO AO, THE IDENTITY AND CR EDITWORTHINESS OF M/S. SUBHAS YURIM TEXTILES LTD. HAS NOT ESTABLISHED BY THE ASSESSEE. THE AO ALSO NOTED THAT IN RESPECT OF RS. 50 LACS PAID BY M/S. CITY STAR INFRASTRUCTURE PVT. LTD. IN DECEMBER, 2007 THE IMMEDIATE SOURCE OF THE AMOUNT RECEIVED FROM M/S. NORTH EASTE RN PUB & ADVERTISING CO. LTD. HOWEVER, THE AO ON VERIFICATION DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE BECAUSE, 6 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 ACCORDING TO HIM, CHEQUE OF RS. 2 CR. WAS RECEIVED FROM THE SAID PARTY WAS CREDITED AFTER DEBIT OF RS.50 LACS. THUS, ACCORDING TO AO, THE ID ENTITY AND SOURCE OF FINDING OF M/S. SUBHAS YURIM TEXTILES LTD. AND M/S. NORTH EASTERN P UB & ADVERTISING CO. LTD. WAS NOT ESTABLISHED. THE AO NOTED THAT AFTER RS.3.5 CR. WE RE ADVANCED BY M/S. CITY STAR INFRASTRUCTURE PVT. LTD. DURING THE PERIOD BETWEEN JUNE TO DECEMBER, 2007, MR. UTSAV PAREKH HAD MADE PAYMENT OF RS. 5 CR. TO THE SAID M /S. CITY STAR INFRASTRUCTURE PVT. LTD. ON 05.02.2008. THE AO ALSO FOUND FAULT IN THE ASSESSE ES EXPLANATION WITH REGARD TO THE AMOUNT RECEIVED FROM M/S. PURBANCHAL PRESSTRESSED L TD. THAT IT HAD PAID RS. 3 CR. TO THE ASSESSEE IN JUNE, 2007. ACCORDING TO THE AO, THE S OURCE OF FUNDS IN THE HANDS OF THE CREDITOR WAS THE RECEIPT OF RS.2,32,80,920/- WHICH WAS RECEIVED FROM M/S. FALCAN TIEUP PVT. LTD. WAS NOT ESTABLISHED. IN THE CASE OF M/S. CITY STAR INFRASTRUCTURE PVT. LTD., THE AO OBSERVED THAT THE SAID COMPANY IS THE BENAMIDAR OF MR. HEMENDRA KOTHARY WHOSE IDENTITY AND CREDITWORTHINESS WAS NOT ESTABLISHED. ACCORDIN G TO THE AO, BOTH THE PARTIES HAD CLAIMED TO HAVE MADE ADVANCE PAYMENT FOR PURCHASE O F LAND WHICH FACT CANNOT BE BELIEVED BECAUSE THE ASSESSEE DID NOT OWN ANY LAND. AFTER P ERUSAL OF THE LAND DETAILS, THE AO OBSERVED THAT ASSESSEE HAD LAND WHOSE WORTH WAS ONL Y RS.78,39,253/- WHEREAS THE ADVANCE RECEIVED AGAINST THE LAND WAS FAR IN EXCESS OF THE VALUE OF LAND AVAILABLE WITH THE ASSESSEE. THUS, THE AO CONCLUDED THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND MADE THE ADDITIO N OF RS.6.5 CR. THE LD. CIT(A) DELETED THE SAME AGAINST WHICH THE REVENUE IS BEFORE US. W E NOTE THAT THE LD. CIT(A) HAD TAKEN NOTE OF THE FACT THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE FROM TWO COMPANIES THROUGH BANKING CHANNEL. THE LD. CIT(A) OBSERVED THAT THE AMOUNTS WERE RECEIVED AS ADVANCE BETWEEN JUNE AND JULY, 2007 AND THAT TOO WITHIN FOU R MONTHS OF THE COMPANYS INCORPORATION. THE LD. CIT(A) OBSERVED THAT FROM T HE DETAILS OF LAND PURCHASES IT WAS CLEAR THAT THE ASSESSEE HAD EMBARKED UPON THE BUSINESS OF PURCHASE OF LAND BETWEEN MAY 2007 AND NOVEMBER, 2007 AND HAD MADE AN INVESTMENT IN RE SPECT TO PURCHASE OF LAND AT RS.2,47,40,019/- AND NOT MERELY RS.78.39 LACS AS ER RONEOUSLY MENTIONED BY THE AO IN HIS REMAND REPORT. THE ASSESSEES EXPLANATION WAS BRUSH ED ASIDE BY THE AO ON THE GROUND THAT THE ASSESSEE NEVER OWNED ANY SIGNIFICANT LAND HOLDI NG SO, ADVANCE RECEIVED AGAINST THE SALE OF LAND CANNOT BE BELIEVED. ACCORDING TO THE LD. C IT(A) THE LAND RECORDS REFLECTED THAT 7 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 DURING THE CORRESPONDING PERIOD THE ASSESSEE HAD AC QUIRED LAND MEASURING 345 COTTAHS I.E. NEARLY SIX ACRES WHICH GOES ON TO SHOW THE ASSESSEE IS INTO REAL ESTATE BUSINESS OF PURCHASE OF LAND AND THE THEORY OF THE AO THAT ASSESSEE DID NOT HAD ANY SIGNIFICANT LAND HOLDING IS NOT BORNE OUT OF THE RECORDS PLACED BEFORE HIM AND THE REASONING WHICH FLOWED IS BASED ON INCORRECT FACTS WHICH MAKES THE AOS ORDER ERRONEOU S. THEREAFTER, WE NOTE THAT THE LD. CIT(A) RIGHTLY STATED THAT WHILE ADJUDICATING THE A DDITION MADE U/S. 68 OF THE ACT WHAT HAS TO BE LOOKED INTO IS WHETHER THE ASSESSEE COULD DIS CHARGE THE BURDEN IN RESPECT TO THE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTIONS. THE LD. CIT(A) OBSERVED AFTER PERUSAL OF THE DOCUMENTS ON R ECORD THAT M/S. CITY STAR INFRASTRUCTURE PVT. LTD. IS A COMPANY HAVING SUBSTANTIAL SOURCE OF ITS OWN AND THAT IT HAS BEEN REGULARLY ASSESSED TO TAX AND FOR AY 2008-09 IT HAD FILED ITS RETURN WITH THE ITO, WD-6(2). AFTER PERUSAL OF THE COPY OF AUDITED ACCOUNTS THE LD. CIT (A) FOUND THAT M/S. CITY STAR INFRASTRUCTURE LTD. HAD CAPITAL AND RESERVE OF RS.6 70.19 LACS AND IT HAD MADE BORROWING OF RS.1798.13 LACS AND AS ON 31.03.2008 IT HAD CURRENT LIABILITY AND ADVANCE OF RS.4492.56 LACS. THUS, THE LD. CIT(A) FOUND THAT M/S. CITY ST AR INFRASTRUCTURE LTD. HAD SUBSTANTIAL OWN FUND AND LOAN FUNDS REFLECTED IN THE BALANCE SHEET TO THE TUNE OF RS.6960 LACS WHICH WERE FAR IN EXCESS OF RS. 350 LACS ADVANCED TO THE ASSES SEE. IT HAS ALSO OBSERVED BY THE LD. CIT(A) AFTER PERUSAL OF THE BALANCE SHEET THAT M/S. CITY STAR INFRASTRUCTURE PVT. LTD. HAD DISCLOSED IN HIS BALANCE SHEET GRANTING LOAN AND AD VANCE AMOUNTING TO RS.3655 LACS WHICH, INTER ALIA, INCLUDED ADVANCE OF RS.350 LACS GRANTED TO THE ASSESSEE WHICH FACT WAS DULY DISCLOSED IN ITS ACCOUNTS. THE LD. CIT(A) ALSO TO OK NOTE OF THE FACT THAT THE NET PROFIT OF M/S. CITY STAR INFRASTRUCTURE PVT. LTD. FOR AY 2008 -09 WAS RS.1.8 CR. THUS, THE LD. CIT(A) FOUND THAT M/S. CITY STAR INFRASTRUCTURE PVT. LTD. WAS AN OLD AND ESTABLISHED BODY CORPORATE HAVING SUBSTANTIAL SOURCES AND FUNDS AT ITS DISPOSA L AND THAT IT HAS THUS GRANTED ONLY 10% OF THE AGGREGATE FUNDS IT HAD AS ADVANCES TO THE ASSES SEE. THE AFORESAID FACT HAS BROUGHT OUT BY THE LD. CIT(A) COULD NOT BE CONTROVERTED BY THE LD. DR BY PRODUCING ANY COGENT MATERIAL OR EVIDENCE, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). HOWEVER, THE AO HAD DOUBTED THE IDENTITY AND CREDIT WORTHINESS OF M/S. SUBHAS YURIM TEXTILES LTD. FROM WHOM M/S. CITY STAR INFRASTRUCTU RE PVT. LTD. HAD ADVANCED THE SUM OF RS.3.5 CR. IN THE MONTH OF JUNE, JULY AND DECEMBER, 2007 WHEREAS MR. UTSAV PAREKH MADE 8 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 PAYMENT OF RS.5 CR. IN FEBRUARY, 2008 AND, THEREFOR E, THIS IS NO NEXUS OF THE ADVANCES MADE BY M/S. CITY STAR INFRASTRUCTURE PVT. LTD. ON A Q UERY FROM THE BENCH REGARDING THE AOS OPINION THAT THE IDENTITY AND CREDITWORTHINESS OF M /S. SUBHAS YURIM TEXTILES LTD. FROM WHOM M/S. CITY STAR INFRASTRUCTURE PVT. LTD. RECEIV ED FUNDS, IT WAS BROUGHT TO OUR KNOWLEDGE THAT THE AO NEVER ASKED THE ASSESSEE TO P RODUCE ANY DOCUMENTS TO SUBSTANTIATE THE SOURCE OF SOURCE. WITHOUT BEING ASKED, THE ASSE SSEE DID NOT PRODUCE THE DOCUMENTS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SAID M/S. SUBHAS YURIM TEXTILES LTD. THE LD. DR COULD NOT BRING TO OUR NOTICE AS TO WHETHER THE AO HAD ASKED THE ASSESSEE TO BRING ANY EVIDENCE IN RESPECT TO SOURCE OF SOURCE. ALL THE T RANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND WITHOUT CONFRONTING THE ASSESS EE IN RESPECT TO HIS DOUBTS IN MIND, THE AO SHOULD NOT HAVE MADE ANY FINDING ABOUT SOURCE OF SOURCE WHEN ADMITTEDLY, THE AO DID NOT ENQUIRE ABOUT THE SOURCE OF SOURCE. THE AO SHO ULD HAVE MADE ENQUIRIES BUT HE HAS NOT DONE SO AND, THEREFORE, WITHOUT ANY MATERIAL IN HIS POSSESSION, MERELY DISBELIEVING M/S. SUBHAS YURIN TEXTILES LTD. BASED ON SURMISES AND CO NJECTURES CANNOT BE SUSTAINED. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD. CIT(A) AND WE UPHOLD THE SAME. 6. COMING TO M/S. PURBANCHAL PRESSTRESSED LTD. THE LD. CIT(A) NOTES THAT THE ENTIRE TRANSACTION WAS CONDUCTED THROUGH BANKING CHANNELS AND THAT THE SAID CREDITOR WAS REGULARLY ASSESSED TO TAX. THE LD. CIT(A) OBSERVED AFTER PER USAL OF THE BALANCE SHEET THAT ITS CAPITAL AS ON 31.03.2008 WAS TO THE TUNE OF RS.3996.85 LACS AND THAT THE SAID CREDITOR HAD GRANTED SUBSTANTIAL LOANS AND ADVANCES AMOUNTING TO RS.2569 .64 LACS TO VARIOUS PARTIES AND THE ADVANCES GIVEN TO THE ASSESSEE WAS ONLY TO THE TUNE OF RS.3 CR. AND WAS DULY REFLECTED IN THE BALANCE SHEET. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE SAID LOAN CREDITOR HAS SUBSTANTIAL FUNDS IN ITS OWN BY WAY OF EQUITY CAPIT AL WHICH WAS ABOUT RS. 40 CR. AND THE AMOUNT ADVANCED TO THE ASSESSEE WAS JUST 7.5% OF IT S OWN FUNDS. THE LOAN CREDITOR HAD CONFIRMED ABOUT THE TRANSACTION WITH THE ASSESSEE. IN THE AFORESAID CIRCUMSTANCES THE LD. CIT(A) WAS PLEASED TO DELETE THE ADDITION MADE U/S. 68 OF THE ACT. THE LD. DR COULD NOT FIND FAULT WITH THE FACTUAL FINDING RECORDED BY THE LD. CIT(A). IN SUCH A SCENARIO, WE DO NOT 9 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) A ND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF REVENUE IS ALSO DISMISSED. 7. GROUND NO. 4 IS AGAINST THE DELETION OF ADDITI ON OF UNDISCLOSED CASH PAYMENT OF RS. 75 LACS TO M/S. COZY ENCLAVE PVT. LTD. THE BRIEF F ACTS OF THE CASE IS THAT THE AO OBSERVED THAT THE ASSESSEE HAD PAID RS. 50 LACS AND RS.25 LA CS IN CASH ON 30.11.2007 AND 31.12.2007 TO M/S. COZY ENCLAVE PVT. LTD. THE ASSESSEE WAS AS KED BY THE AO TO EXPLAIN WITH EVIDENCE IN RESPECT TO THE SOURCE OF FUNDS. ACCORDING TO TH E AO, THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE U/S. 142(1) AND, THEREFORE, HE MADE AN A DDITION OF RS.75 LACS. THE LD. CIT(A) OBSERVES AFTER PERUSAL OF THE REMAND REPORT THAT TH E AO ADMITTED THAT THE ASSESSEE HAD PRODUCED ITS BOOKS OF ACCOUNT TO SUBSTANTIATE THE A VAILABILITY OF CASH FOR MAKING PAYMENT. HOWEVER, THE AO REJECTED THE EXPLANATION OF THE ASS ESSEE AND THE ENTRIES RECORDED IN THE ASSESSEES CASH BOOK ON THE GROUND THAT THE ASSESSE E HAD MADE SUBSTANTIAL CASH WITHDRAWAL FROM PUNJAB & SIND BANK ON 05.09.2007, 17.09.2007, 06.10.2007, 09.10.2007 AND 03.11.2007 FOR THE PURPOSE OF MAKING PAYMENT TO M/S . COZY ENCLAVE PVT. LTD. ON 30.11.2007. THE AO DOUBTED THE WITHDRAWAL OF CASH AND ASSESSEES EXPLANATION BECAUSE ACCORDING TO HIM, EVEN WITHOUT THOSE WITHDRAWALS TH E ASSESSEE HAD SUBSTANTIAL CASH BALANCE AND THE AO QUESTIONED THE NECESSITY FOR MAKING WITH DRAWALS OF RS. 20 LACS ON 05.12.2007 AND RS. 10 LACS ON 10.12.2007 BEFORE MAKING PAYMENT OF RS.25 LACS ON 31.12.2007 EVEN THOUGH CASH BALANCE AS ON 01.12.2007 WAS RS.41.27 L ACS. FOR THE AFORESAID REASONS THE AO REJECTED THE ASSESSEES EXPLANATION REGARDING THE S OURCE OF MAKING CASH PAYMENT. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE ASSESSEE HAD ADVANCED SEVERAL AMOUNTS TO M/S. COZY ENCLAVE PVT. LTD. THROUGH CHEQUES AND CASH. THE LD . CIT(A) TOOK NOTE OF THE FACT THAT PAYMENTS WERE MADE FROM TIME TO TIME, INTER ALIA, INCLUDED THE TWO CASH PAYMENTS OF RS. 50 AND 25 LACS RESPECTIVELY. IT HAS BEEN NOTED BY THE LD. CIT(A) THAT EXCEPT FOR THESE TWO PAYMENTS MADE TO M/S. COZY ENCLAVE PVT. LTD. BY THE ASSESSEE REST ALL TRANSACTIONS WERE THROUGH CHEQUES. WE NOTE THAT THE ASSESSEE HAD SUB STANTIAL CASH BALANCE IN THE BOOKS AS WELL AS IT HAD MADE WITHDRAWALS FROM ITS DISCLOSED BANK ACCOUNT BEFORE GIVING THE PAYMENT OF RS. 50 LACS ON 30.11.2007. JUST BECAUSE HE HAD SUBSTANTIAL CASH BALANCE OF RS.41.27 LACS ON 01.12.2007 THE AO QUESTIONING THE NECESSITY OF T HE ASSESSEE WITHDRAWING OF RS.20 LACS 10 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 ON 05.12.2007 AND RS. 10 LACS ON 10.12.2007 IS NOT UNDERSTOOD. IT IS NOT UNDERSTOOD AS TO HOW THE AO DOUBTED THE WITHDRAWALS OF THE ASSESSEE WITHOUT ANY MATERIAL IN HIS POSSESSION WHEN THE EVIDENCE SUGGESTS THAT THE ASSESSEE IN FAC T HAD WITHDRAWN CASH FROM ITS BANK ACCOUNT. BY DOING SO, THE ASSESSEE WAS ABLE TO DIS CHARGE THE ONUS ON IT IN RESPECT TO THE SOURCE OF CASH PAYMENT. IN SUCH A SCENARIO, WE DO NOT FIND ANY REASON FOR THE ADDITION ITSELF IN THE FIRST PLACE. HOWEVER, THE LD. CIT(A) HAS RI GHTLY TOOK NOTE OF THE EVIDENCE BROUGHT ON RECORD AND HAS DELETED THE ADDITION. WE DO NOT FIN D ANY REASON TO INTERFERE IN THE REASONED ORDER PASSED BY THE LD. CIT(A) AND WE UPHOLD THE SA ME. THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 8. THE GROUND NO. 5 IS AGAINST THE ORDER OF LD. CIT (A) IN NOT APPRECIATING THAT THE ISSUE OF CASH PAYMENT ATTRACTED SECTION 269SS AND 269T OF THE ACT. BRIEF FACTS OF THE CASE ARE THAT IN THE REMAND REPORT OF THE AO, THE AO FOUND T HAT CASH PAYMENTS WERE MADE BY THE ASSESSEE TO EIGHT PARTIES WHICH IS REPRODUCED BY TH E LD. CIT(A) AT PAGE 36 OF HIS ORDER. THEREAFTER, THE AO STATES THAT THESE PAYMENTS AND R ECEIPTS ATTRACT THE PROVISION OF SECTION 269SS AND 269T OF THE ACT. THE AO ADMITTED THAT HE HAS NOT LOOKED INTO THIS ASPECT ON THIS ISSUE IN THE ASSESSMENT STAGE AND, THEREFORE, HE RE QUESTED THE LD. CIT(A) TO EXERCISE HIS CO- TERMINUS POWERS TO TAKE APPROPRIATE ACTION. THE LD . CIT(A) RIGHTLY NOTE THAT THE PROVISIONS OF SECTION 269SS OF THE ACT WAS APPLICABLE IF THE A SSESSEE HAS TAKEN ANY LOAN OR DEPOSIT IN CASH; AND THAT THE PROVISION OF SECTION 269T OF THE ACT WOULD BE APPLICABLE IF THE ASSESSEE HAD REPAID ANY LOAN OR DEPOSIT MADE WITH IT IN CASH . THE LD. CIT(A) HAS MADE A CLEAR FINDING THAT THE ASSESSEE HAS NOT TAKEN ANY LOAN OR DEPOSIT ANY CASH NOR HAS IT PAID ANY LOAN OR DEPOSIT MADE WITH IT IN CASH. THIS FACTUAL FIND ING OF THE LD. CIT(A) HAS NOT BEEN CONTRAVENED BY THE LD. DR. WITHOUT BRINGING OUT AN Y MATERIAL OR EVIDENCE TO SHOW THAT THE ASSESSEE HAD RECEIVED ANY LOAN OR DEPOSIT IN CASH O R HAS REPAID ANY LOAN OR DEPOSIT MADE WITH IT IN CASH, SECTIONS 269SS AND 269T OF THE ACT WOULD NOT BE ATTRACTED. IN THIS FACTUAL BACKGROUND, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 9. GROUND NO. 6 IS REGARDING THE REQUEST OF THE AO TO THE LD. CIT(A) TO MAKE FURTHER INVESTIGATION. IN THE REMAND REPORT AT PARA 11.1 T O 11.8 THE AO WAS OF THE OPINION THAT THE 11 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 TRANSACTIONS MADE BY THE ASSESSEE NEED TO BE DEEPLY INVESTIGATED. HOWEVER, THE LD. CIT(A) NOTES THAT NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ONLY ON 27.09.2010 AND THE ASSESSMENT WAS GETTING TIME BARRED ON 31.12.2010 AND DURING TH E REMAND PROCEEDING ALSO THE LD. CIT(A) HAS GIVEN INITIALLY TO GIVE REMAND REPORT BY 05.10.2012. THE AO VIDE HIS LETTER DATED 14.11.2012 REQUESTED FOR FURTHER TIME FOR 15 DAYS SO AS TO SUBMIT THE REMAND REPORT BY 30.11.2012. THE LD. CIT(A) CONCEDED TO HIS REQUEST AND EXTENDED TIME TO SUBMIT THE REMAND REPORT. IT IS TO BE REMEMBERED THAT THE AO I S AN AUTHORITY APPOINTED BY THE STATE TO EXERCISE STATUTORY POWERS TO ASCERTAIN THE INCOME O F A SUBJECT AND THE TAX PAYABLE BY HIM TO THE STATE (53 ITR 232). NO DOUBT THE LD. CIT(A) HA S CO TERMINUS POWERS AS THAT OF THE AO, HOWEVER, AS PER THE SCHEME OF THE ACT, IT APPEARS T HAT THE RELEVANT MATERIAL EVIDENCE NEED TO BE ADDUCED PRIMARILY BEFORE THE AO AS HELD BY THE H ONBLE SUPREME COURT IN 56 ITR 365. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO HAD THE OPPORTUNITY TO ENQUIRE DURING ASSESSMENT PROCEEDINGS AS WELL AS DURING REMAND PRO CEEDINGS. HAVING FAILED TO DO SO ASKING THE LD. CIT(A) TO ENQUIRE IN DETAIL IS AKIN TO MAKING THE FIRST APPELLATE AUTHORITY THE ASSESSING OFFICER. IN THE SCHEME OF THE ACT THERE ARE POWERS GIVEN TO THE COMMISSIONER U/S. 263/264 OF THE ACT TO SUPERVISE THE AO. AS OBSERVE D BY THE LD. CIT(A) IF THE AO FEELS THAT THIS IS A CASE WHICH REQUIRES DEEPER INVESTIGATION THE DEPARTMENT HAS THE WAYS AND MEANS TO ACTIVATE THE INVESTIGATION WING. FOR THE AFORESAID REASONS, WE DO NOT FIND ANY APPEALABLE GROUND AGAINST THE ACTION/OBSERVATION OF THE LD. CI T(A) IN RESPECT TO THE AFORESAID REQUEST OF AO AND, THEREFORE, WE DISMISS THIS GROUND OF APP EAL OF REVENUE. 10. NOW COMING TO AY 2009-10. WE NOTE THAT THE FIR ST GROUND OF APPEAL IS REGARDING VIOLATION OF RULE 46A OF THE RULES WHICH WE HAVE AL READY ADJUDICATED FOR AY 2008-09 AND WE DO NOT FIND ANY MERITS IN THE SAID GROUND RAISED BY THE REVENUE ON THE SAID REASON (SUPRA) AND, THEREFORE, IT STANDS DISMISSED. 11. GROUND NO. 2 IS IN RESPECT OF DELETING THE ADDI TION OF RS.4,13,36,988/- OF UNEXPLAINED INVESTMENT IN LAND. BRIEF FACTS OF THE CASE ARE TH AT THE AO STATED THAT ON EXAMINATION OF PAGES 32 AND 33 OF SSG-44 SEIZED FROM THE OFFICE PR EMISE OF SALTEE CONSTRUCTIONS AT AE- 40, SALT LAKE CITY, KOLKATA HE FOUND THAT IT CONTAI NS STATEMENT OF LAND PURCHASE REGARDING PURCHASE OF 569.38 SATAKS OF LAND FOR RS.2,22,95,14 5/-. ON PERUSAL OF PAGE 31 OF SSG-8 12 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 FOUND IN THE COURSE OF SEARCH AT THE ABOVE PREMISES , IT APPEARED TO THE AO THAT IT CONTAINED DETAILS OF LANDS PURCHASED UPTO 15.12.2008. FIGURES ON THIS PAGE WERE IN LAKH OF RUPEES. AS PER THIS PAGE, TOTAL LAND OF 2950.56 COTTAHS WAS PU RCHASED FOR RS.36,09,98,700/- IN PHASE - 1, PHASE - 2, AT MUHAMMEDPUR AND JAMALPUR. FROM PA GE-32 & 33 OF SSG-44, IT WAS FOUND THAT COST OF 66.34 COTTAHS OF LAND WAS RS.65,71,304 /- WHICH WAS ALMOST RS.1 LAKH PER COTTAH IN MUHAMMEDPUR AS ON 15.12.2008. AS PER STAT EMENT ON PAGE-31 OF SSG-8, IT WAS FOUND THAT 77.38 COTTAHS OF LAND WAS PURCHASED AT M UHAMMEDPUR. IF THE RATE OF RS.1 LAKH PER COTTAH WAS APPLIED, THEN THE INVESTMENT OF LAND AT MOHAMMEDPUR CAME TO NEARLY 77 LAKHS MATCHING WITH THE RATE OF 1.0405 FOR 77.38 CO TTAHS TOTALLING RS.80,51,100/-. BY INTERPOLATING THESE FIGURES, THE AO PRESUMED THAT T HE PURCHASE VALUE OF 2707.76 COTTAHS OF LAND WORKED OUT TO ,RS.32,49,31,400/-. ON THE BASIS OF THE SEIZED DOCUMENTS PAGE-31 OF SSG-8; COST OF 1 SATTACK LAND CAME TO RS.72,600/- A ND THE TOTAL COST OF 569.38 SATTAKS IN AO'S OPINION CAME TO RS.4.13,36,988/-. SINCE THE AP PELLANT FAILED TO EXPLAIN THE SOURCE OF INVESTMENT IN LAND, THE SUM OF RS.4,13,36,988/- WAS ADDED AS INCOME OF THE APPELLANT. IN PARAGRAPHS 9.1 TO 9.4.11 OF THE REMAND REPORT, THE AO REITERATED, THE SAME FACTS AS IN THE ASSESSMENT ORDER. IN PARA 9.4.11 OF THE REPORT, THE AO STATED THAT THE APPELLANT SUPPRESSED THE VALUE OF LAND ON THE REGISTERED DEED FOR THE PU RPOSE OF AVOIDING STAMP DUTY, CAPITAL GAINS AND OTHER REASONS. THE AO ADMITTED THAT THE VALUE O F LAND DISCLOSED IN THE BALANCE-SHEET AS ON 31.03.2008 WAS RS.2.47,40,019/- AND THEREFORE HE CLAIMED THAT THE BALANCE AMOUNT OF RS.1,65,96,969/-, MAY BE TAKEN AS UNDISCLOSED INVES TMENT OF THE APPELLANT. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO AFTER PERUSING THE REMAND REPORT FOUND THAT NO DOCUMENTS BELONGING TO THE ASSESSEE W ERE FOUND IN THE COURSE OF SEARCH. THE LD. CIT(A) FOUND THAT THE DOCUMENTS RECOVERED FROM THE PREMISES AT AE-40, SALT LAKE CITY, KOLKATA WAS BELONGING TO ONE SHRI S. P. BAGLA AND S ALTEE CONSTRUCTIONS WHICH DOES NOT BELONG TO THE ASSESSEE. THE LD. CIT(A) TOOK NOTE O F THE FACT THAT THE DOCUMENTS REVEALED THAT THE SAID PARTY HAD PURCHASED A VERY LARGE TRAC K OF LAND MEASURING 4876.23 SATAKS. THE LD. CIT(A) NOTED THAT THIS WAS FAR IN EXCESS OF LAN D WHICH THE ASSESSEE HAD ACQUIRED. THE LD. CIT(A) NOTED THE FACT THAT THE LAND PURCHASED W AS DATED 15.12.2008 AND THE ASSESSEE HAD PURCHASED ONLY LAND MEASURING 569.38 SATAKS WHI CH IS COMPARATIVELY VERY SMALL TRACK OF LAND WHICH HAS BEEN SHOWN IN THE DOCUMENT SEIZED FROM MR. S. P. BAGLAS PLACE. THE 13 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 LD. CIT(A) RIGHTLY HELD THAT BASED ON CERTAIN DOCUM ENTS FROM THE THIRD PARTY, THE INFERENCE THAT THE ASSESSEE HAD UNDISCLOSED LAND WAS PURELY B ASED ON CONJECTURE AND SURMISES AND FROM THE STATEMENT AND DOCUMENTS FOUND FROM THE POS SESSION OF SHRI S. P. BAGLA DID NOT INDICATE THE TIME PERIOD DURING WHICH THE LANDS WER E PURCHASED THOUGH THE STATEMENT STATED THAT IT DEPICTED THE PROPERTIES AS ON 15.12.2008. THE LD. CIT(A) HAS TAKEN NOTE OF THE ACCOUNTS THE RISE IN THE PRICE OF REAL ESTATE FROM THE YEARS 2005 TO 2008 TILL THE REAL ESTATE SECTOR GOT A SEVERE REVERSE AND SET BACK IN 2009. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE LAND PURCHASED BY THE ASSESSEE WAS DURING THE P ERIOD BETWEEN MAY 2007 AND NOVEMBER, 2007. IN THE SAID FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS RIGHTLY FOUND FAULT WITH THE AO IN APPLYING THE LAND RATES PREVAILING I N DECEMBER, 2008. ACCORDING TO LD. CIT(A), WITHOUT MAKING ANY ENQUIRY AS TO WHETHER TH E ASSESSEE HAD MADE ANY PURCHASE IN THE YEAR UNDER CONSIDERATION THE AO ERRONEOUSLY HAS MADE THE ADDITION ON THE BASIS OF SOME DOCUMENTS UNEARTHED FROM THE POSSESSION OF A THIRD PARTY MR. BAGLA. THE LD. CIT(A) RIGHTLY NOTED THAT THE AO GOT CARRIED AWAY BY THE D OCUMENTS SEIZED FROM MR. BAGLA TO ASSUME THAT 570 SATAKS WERE PURCHASED BY THE ASSESS EE IN FINANCIAL YEAR UNDER CONSIDERATION AND APPLIED THE RATES PREVAILING IN DECEMBER, 2009. THE LD. CIT(A) RIGHTLY NOTED THAT THE AO DID NOT EVEN BOTHER TO GIVE CREDIT FOR THE COST OF LAND DISCLOSED BY THE ASSESSEE IN ITS BALANCE SHEET AS ON 31.03.2009 WHEREIN THE COST OF LAND WAS REFLECTED AT RS.2,80,38,423/-. THE LD. CIT(A) RIGHTLY TOOK NOTE OF THE FACT THAT T HE AO MADE THE ADDITION IN THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION ONLY ON THE ERR ONEOUS ASSUMPTION THAT THE ASSESSEE DID NOT DISCLOSE IN ITS BOOKS THE COST OF PURCHASE OF 5 70 SATAKS OF LAND AND THE AO IN THE REMAND REPORT CONCEDED THE FACT THAT THE ADDITION COULD AT BEST BE RESTRICTED AT RS.1,65,96,969/-. TAKING NOTE OF THE AFORESAID FACTS AND CIRCUMSTANCE S THE LD. CIT(A) HELD AS UNDER: 36. READING OF THE ASSESSMENT ORDER AND THE REMAN D REPORT THEREFORE ESTABLISH THAT THE AO HAS ATTEMPTED TO ESTIMATE THE COST OF ACQUISITION O F LAND WITH REFERENCE TO DOCUMENTS WHICH WERE FOUND FROM SRI S P BAGLA'S PREMISES WHICH WERE NOT CONNECTED TO .THE APPELLANT. THE STATEMENT ON THE BASIS OF WHICH THE COST OF LAND IS ESTIMATED PERTAINED TO ALLEGED COSTS INCURRED UPTO DECEMBER 2008. ON THE CONTRARY, THE F ACTS ON RECORD SHOW THAT THE LAND WHICH THE APPELLANT ACQUIRED WERE MAINLY PURCHASED DURING THE PERIOD MAY TO AUGUST 2007. NO EMPIRICAL DATA OR EVIDENCE IS ON RECORD WHICH IN AN Y MANNER SHOWED THAT DURING THESE 2 PERIODS, THE LAND PRICES WERE SAME. RATHER THE INF ORMATION AVAILABLE IN PUBLIC DOMAIN INDICATE THAT DURING THIS PERIOD, THE REAL ESTATE P RICES WERE GALLOPING EVERY YEAR AND THEREFORE THE PRICES COULD NOT BE SAME DURING THE PERIOD MAY, 2007 TO NOVEMBER, 2007 AND DECEMBER 2008. MOREOVER, WHEN THE ADDITION IS TO BE MADE UND ER THE DEEMING PROVISIONS OF SECTION 69, IT WAS NECESSARY FOR THE AO TO BRING ON RECORD SOME IRREFUTABLE EVIDENCE WHICH SHOWED THE 14 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 APPELLANT HAD IN FACT MADE UNDISCLOSED INVESTMENT I N PURCHASE OF LAND DURING FY 2008-09 SO AS TO JUSTIFY THE ADDITION IN AY 2009-10. ON THE CO NTRARY, THE EMPIRICAL EVIDENCE ON RECORD SHOWS THAT THE LAND WAS PURCHASED BY THE APPELLANT MAINLY IN FY 2007-08 RELEVANT TO AY 2008-09. IN THE CIRCUMSTANCES, NO ADDITION ON ACCOU NT OF UNEXPLAINED INVESTMENT IN LAND WAS PERMISSIBLE IN AY 2009-10. I FURTHER NOTE THAT IN M AKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT, THE AO DID NOT EVEN CONSIDE R AND GIVE CREDIT FOR THE COST OF ACQUISITION WHICH THE APPELLANT HAD INCURRED AND AC COUNTED IN ITS REGULAR BOOKS AMOUNTING TO RS.2,80,38,423/- AS OF 31.03.2009. THESE FACTS THER EFORE LEAD TO THE ONLY CONCLUSION THAT THE ADDITION WAS MADE SOLELY ON SURMISE, CONJECTURE AND WITHOUT BRINGING ON RECORD ANY EMPIRICAL EVIDENCE WHICH ESTABLISH THAT THE APPELLA NT HAD IN FACT INCURRED UNEXPLAINED EXPENDITURE OF RS.4,13,36,988/- DURING THE FY 2008- 09 TOWARDS PURCHASE OF LAND. FURTHER, THERE WAS NO MATERIAL ON RECORD TO SUPPORT THE FIND ING OF THE AO THAT ANY INVESTMENT OVER AND ABOVE THE FIGURE AS DECLARED BY THE APPELLANT IN IT S BOOKS OF ACCOUNT WAS ACTUALLY MADE. THE ESTIMATION OF INVESTMENT IN LAND AS MADE BY THE AO IS NEITHER SUSTAINABLE IN LAW NOR ON FACTS AS IT IS NOT SUPPORTED BY ANY MATERIAL RECOVERED FR OM, OR RELATED TO, THE APPELLANT. FOR THE REASONS AS DISCUSSED ABOVE, THE ADDITION OF RS.4,13 ,36,988/- MADE IN AY 2009-10 IS DIRECTED TO BE DELETED. 12. WE CONCUR WITH THE AFORESAID REASONED FINDING R ECORDED BY THE LD. CIT(A) AND SINCE WE FULLY AGREE WITH THE CONCLUSION OF THE LD. CIT(A ) FOR THE REASONS STATED ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL RAISED BY THE REVENUE. 13. THE THIRD GROUND IS IN RESPECT TO THE AOS PLEA IN THE REMAND REPORT FOR INITIATION OF SECTION 269SS AND 269T OF THE ACT. WE HAVE ALREADY CONCURRED WITH THE LD. CIT(A) THAT SECTION 269SS AND 269T OF THE ACT ARE NOT ATTRACTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN HAND SO THE DECISION OF OURS IN AY 2008-09 WILL APPLY AND WE ARE INCLINED TO DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 14. THE NEXT GROUND OF APPEAL IS REGARDING THE AOS PLEA TO THE LD. CIT(A) TO MAKE FURTHER ENQUIRIES. THIS ISSUE HAS ALSO BEEN DULY D EALT IN AY 2008-09 AND WILL APPLY IN THIS YEAR ALSO AND WE ARE INCLINED TO DISMISS THIS GROUN D OF APPEAL OF THE REVENUE. 15. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 12.07.2017 SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12TH JULY, 2017 JD.(SR.P.S.) 15 ITA NO.808&809/KOL/2013 ANAND NIRMAN PVT. LTD., AY 2008-09 & 2009-10 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT DCIT, CENTRAL CIRCLE-VII, KOLKATA 2 RESPONDENT M/S. ANAND NIRMAN PVT. LTD., DB-20, SA LT LAKE CITY, KOLKATA-700 091. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY