Appeal details
Counselvise Citation
[2021] 109 COUNSELVISE.COM (IT) 8920 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
08-01-2021
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Next Hearing Date
09-11-2020
Assessment Year
2012-2013
Appeal Filed On
24-12-2018
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A.NO.184 TO 186/IND/2018 ASSESSMENT YEARS 2012-13 TO 2014-15 M/S SIGNATURE BUILDERS, 18-19 KOLAR CASTLA, CHNA BHATTI SQUARE, BHOPAL PAN : ABVFS1486Q : APPELLANT V/S ACIT (CENTRAL)II, BHOPAL : REVENUE IT(SS)A.NO.174 TO 176/IND/2018 ASSESSMENT YEARS 2012-13 TO 2014-15 ACIT (CENTRAL)II, BHOPAL : REVENUE V/S M/S SIGNATURE BUILDERS, 18-19 KOLAR CASTLA, CHNA BHATTI SQUARE, BHOPAL PAN : ABVFS1486Q : APPELLANT IT(SS)A.NO.02/IND/2019 ASSESSMENT YEAR 2012-13 M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 2 ACIT (CENTRAL)II, BHOPAL : REVENUE V/S M/S SIGNATURE INFRA, 18-19 KOLAR CASTLA, CHNA BHATTI SQUARE, BHOPAL PAN : ABWFS9995F : APPELLANT IT(SS)A.NO.187 TO 188/IND/2018 ASSESSMENT YEARS 2013-14 & 2014-15 M/S SIGNATURE INFRA, 18-19 KOLAR CASTLA, CHNA BHATTI SQUARE, BHOPAL PAN : ABWFS9995F : APPELLANT V/S ACIT (CENTRAL)II, BHOPAL : REVENUE IT(SS)A.NO.13/IND/2019 ASSESSMENT YEAR 2014-15 ACIT (CENTRAL)II, BHOPAL : REVENUE V/S M/S SIGNATURE COLONISERS PVT. LTD, 18-19 KOLAR CASTLA, CHNA BHATTI SQUARE, BHOPAL PAN : AAQCS8839Q : APPELLANT M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 3 REVENUE BY SMT. ASHIMA GUPTA, CIT ASSESSEE BY SHRI S.S. DESHPANDE , CA DATE OF HEARING 0 9 .11 .2020 DATE OF PRONOUNCEMENT 08 . 0 1 . 202 1 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE ASSESSE(S) AND REVENUE PERTAINING TO ASSESSMENT YEA RS 2012-13 TO 2014-15 ARE DIRECTED AGAINST THE ORDERS OF LD. PR. COMMISSIONER OF INCOME TAX, BHOPAL (IN SHORT LD. CIT], BHOPAL DAT ED 30.10.2018 & 24.12.2018 WHICH ARE ARISING OUT OF THE ORDER U/S 1 53A R.W.S. 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE AC T) DATED 23.03.2016 AND 14.03.2016 FRAMED BY ACIT (CENTRAL) II, BHOPAL. 2. IN THE CASE OF M/S SIGNATURE BUILDERS, ASSESSEE IS IN APPEAL FOR ASSESSMENT YEAR 2012-13 TO ASSESSMENT YEAR 2014 -15 RAISING FOLLOWING GROUNDS OF APPEAL. IT(SS)A NO.184/IND/2018 (ASSESSMENT YEAR 2012-13). 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A), WAS NOT JUSTIFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDI TION EVEN WHEN THE ASSESSMENT PROCEEDINGS WERE NOT PENDING AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A). WA S NOT JUSTIFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS. 12,00,000/- TREATING THE UNSECURED LOANS RECEIVED BY THE ASSESS EE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 4 AS UNEXPLAINED. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DELET E OR MODIFY ANY GROUND( S) OF APPEAL DURING OR BEFORE THE HEARING O F APPEAL. IT(SS)A NO.185/IND/2018 ASSESSMENT YEAR 2013-14 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A), WAS NOT JUSTIFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDITIO N OF RS.25,00,000/- SAID TO BE INCOME DECLARED BY THE AS SESSEE U/S 132(4). 2. THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DELET E OR MODIFY ANY GROUND ( S) OF APPEAL DURING OR BEFORE THE HEARING OF APPEAL. IT(SS)A NO.186/IND/2018 ASSESSMENT YEAR 2014-15 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A), WAS NOT JUST IFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS.300,0 0,000/- SAID TO BE INCOME DECLARED BY THE ASSESSEE U/S 132(4). 2.THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DEL ETE OR MODIFY ANY GROUND( S) OF APPEAL DURING OR BEFORE THE HEARING O F APPEAL. 3. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- REVENUE IS IN APPEAL IN THE CASE OF M/S SIGNATURE BUILDERS FOR ASSESSMENT YEAR 2012-13 TO ASSESSMENT YEAR 2013-14 RAISING FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NO.174/IND/2018 ASSESSMENT YEAR 2012-13 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 2,73,48,559/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B AS PER DVO'S REPORT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO PROVIDE DEDUCTIO N/SET OFF OF THE ADDITION MADE U/S 69B OF THE INCOME TAX ACT,1961 IN VIEW OF THE SPIRIT OF SECTION 115BHE OF THE INCOME TAX ACT 1961. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 10,00,000/- MADE BY THE ASSESSING OFFICER M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 5 ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF LAND. (4) THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. IT(SS)A NO.175/IND/2018 ASSESSMENT YEAR 2013-14 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 5,32,58,155/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B AS PER DVO'S REPORT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO PROVIDE DEDUCTIO N/SET OFF OF THE ADDITION MADE U/S 69B OF THE INCOME TAX ACT,1961 IN VIEW OF THE SPIRIT OF SECTION 115BHE OF THE INCOME TAX ACT 1961. (3) THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. IT(SS)A NO.176/IND/2018 ASSESSMENT YEAR 2014-15 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 4,38,32,956/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B AS PER DVO'S REPORT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO PROVIDE DEDUCTIO N/SET OFF OF THE ADDITION MADE U/S 69B OF THE INCOME TAX ACT,1961 IN VIEW OF THE SPIRIT OF SECTION 115BHE OF THE INCOME TAX ACT 1961. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,43,910/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH U/S 69A OF THE INCOM E TAX ACT, 1961. (4) THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL . 4. IN THE CASE OF M/S SIGNATURE INFRASTRUCTURE ASS ESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 6 IT(SS)A NO.187/IND/2018 ASSESSMENT YEAR 2013-14 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A), WAS NOT JUST IFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS.50,00 ,000/- SAID TO BE INCOME DECLARED BY THE ASSESSEE U/S 132(4). 2.THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DEL ETE OR MODIFY ANY GROUND( S) OF APPEAL DURING OR BEFORE THE HEARING O F APPEAL. IT(SS)A NO.188/IND/2018 ASSESSMENT YEAR 2014-15 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE OF THE ASSESSEE THE LD COMMISSIONER OF INCOME TAX (A), WAS NOT JUST IFIED IN HOLDING THAT THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS.300,0 0,000/- SAID TO BE INCOME DECLARED BY THE ASSESSEE U/S 132(4). 2.THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, DEL ETE OR MODIFY ANY GROUND( S) OF APPEAL DURING OR BEFORE THE HEARING O F APPEAL. 5. IN THE CASE OF SIGNATURE INFRA REVENUE HAS RAISE D FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NO. 02/IND/2019 ASSESSMENT YEAR 2012-13 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 3,36,13,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B AS PER DVO'S REPORT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4,32,40,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PUR CHASE OF LAND AT VILLAGE BAGLI.. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 7 (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 98,35,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE U/S 40(A) OF THE INCOME TAX ACT, 1961 . (4) THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 6. IN THE CASE OF M/S M/S SIGNATURE COLONISERS PVT. LTD REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- IT(SS)A NO. 13/IND/2019 ASSESSMENT YEAR 2014-15 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 2,45,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOAN WHICH WAS NOT CONFIRME D BY THE IMPUGNED ORDER.. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) DID NOT APPRECIATE THE FACT THAT THE ASSESSEE FAILED TO COR ROBORATE THE WHOLE AMOUNT OF RS.2,45,00,000/- RECEIVED FROM SH. RAJESH SADHWANI AND COULD ONLY SUBSTANTIATE RECEIPT OF AN AMOUNT OF RS.2,21,5 0,000/-THROUGH D.D OUT OF TOTAL AMOUNT OF RS.2,45,00,000/- (3) THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 7. AS THE INSTANT APPEALS RELATES TO THE ASSESSEE( S) FROM SAME SIGNATURE GROUP WHEREIN SEARCH WAS CONDUCTED U/S 13 2(4) OF THE ACT ON 29.01.2014 AND THE ISSUES RAISED IN VARIOUS GROUNDS AND FACTS INVOLVED ARE MOSTLY COMMON, WE HAVE HEARD THE SE APPEALS TOGETHER. SINCE THERE IS NO OBJECTION BY BOTH THE P ARTIES, ALL THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 8 CONVENIENCE AND BREVITY. AS SUBMITTED BY LD. COUNSE L FOR THE ASSESSEE AND ALSO BY LD. DEPARTMENTAL REPRESENTATIV E M/S SIGNATURE BUILDERS IS THE LEAD CASE. 8. CROSS APPEALS HAVE BEEN FILED FOR ASSESSMENT YEA RS 2012-13 TO 2014-15. 9. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE APPELLANT IS A PARTNERSHIP FIRM INCORPORATED ON 17.11.2009 AND IS PART OF THE SIGNATURE GROUP OF BHOPAL ENGAGED IN THE BUSINESS OF BUILDER S & DEVELOPERS. SEARCH AND SEIZURE OPERATIONS U/S 132 O F THE I.T. ACT, 1961 WAS CONDUCTED ON THE BUSINESS PR EMISES OF THE ASSESSEE GROUP AND ITS ASSOCIATE CONCERNS AS WELL A S ON THE RESIDENTIAL PREMISES OF THE PARTNERS AND PERSONS RELATED TO THESE CONCERNS ON 29.01.2014. CONSEQUENTLY, NOTICE U/S 15 3A OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE TO FILE THE RETURNS OF INCOME. IN RESPONSE TO THE NOTICE THE ASSESSEE HAS FILED RETUR NS OF INCOME ON 28.03.2015. DETAILS RELATING TO RETURN OF INCOME FOR A.YS 2012-13 TO 2013-14 ARE AS UNDER:- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 9 A.Y DATE OF FILING OF RETURN U/S 139(1) TOTAL INCOME (IN RS) DATE OF FILING OF RETURN U/S 153A TOTAL INCOME DECLARED IN RETURN U/S 153A (IN RS.) ADDITIONAL INCOME OFFERED (IN RS.) 2012 - 13 26.02.13 16,650 28.03.15 16,560 NI L 2013 - 14 28.09.13 22,97,250 28.03.15 22,97,250 NIL 10. REGULAR RETURN OF INCOME FOR A.Y 2014-15 WAS FI LED ON 29.11.2014 DECLARING TOTAL INCOME OF RS. 47,85,080/ -. THEREAFTER NOTICES U/S 143(2) AS WELL AS 142( 1) OF THE ACT WE RE ISSUED FROM TIME TO TIME ASKING THE ASSESSEE TO FURNISH DETAILS /EXPLANATION. A CONSOLIDATED ASSESSMENT ORDER WAS PASSED U/S 143(3) R.W.S 153A OF THE ACT ON 23.03.2016 AFTER MAKING ADDITIONS ON ACC OUNT OF UNDISCLOSED INVESTMENT IN THE PROJECT, UNDISCLOSED INVESTMENT AS PER DVOS REPORT. UNEXPLAINED UNSECURED LOAN, COSH F OUND DURING SEARCH AND INCOME DECLARED IN THE STATEMENT RECORDE D U/S 132(1) BUT NOT SHOWN IN THE RETURN. THE DETAILS OF THE ASS ESSED INCOME AND ITS COMPUTATION ARE GIV EN BELOW: M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 10 A.Y. 2012-13 INCOME SHOWN IN THE RETURN RS 16,560/ - ADD: UNDISCLOSED INVESTMENT IN PURCHASE OF LAND RS. 10 ,00,000/ - UNDISCLOSED INVESTMENT U/S 69B AS PER DVOS REPORT RS. 2,73,48,559 / - UNEXPLAINED UNSECURED LOANS RS. 36 ,00,000/ - TOTAL INCOME ASSESSED RS. 3,19,65,199 / - A.Y. 2013-14 INCOME SHOWN IN THE RETURN RS 22,97,250/ - ADD: ADMISSION OF UNDISCLOSED INCOME U/S 132(4) RS. 2 5 ,00,000/ - UNDISCLOSED INVESTMENT U/S 69B AS PER DVOS REPORT RS. 5,32,58,155 / - TOTAL INCOME ASSESSED RS. 5,80,55,405 / - A.Y. 2014-15 INCOME SHOWN IN THE RETURN RS 47,85,080/ - ADD: UNEXPLAINED CASH U/S 69A RS. 1,43,910 / - INTEREST OF INCOME TAX RS. 68,665/ - ADMISSION OF UNDISCLOSED INCOME U/S 132(4) RS. 3,00,00,000/ - UNDISCLOSED INVESTMENT U/S 69B AS PER DVOS REPORT RS. 4,38,32,956 / - UNEXPLAINED UNSECURED LOANS RS. 15 ,00,000/ - M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 11 TOTAL INCOME ASSESSED RS. 8,03,30,611 / - 11. A GAINST THIS IMPUGNED ASSESSMENT ORDER PASSED U/S 15 3A R.W.S 143(3)/143(3), THE ASSESSEE HAS PREFERRED APPEALS B EFORE LD. CIT(A) AND PARTLY SUCCEDED. 12. NOW BOTH THE ASSESSEE(S) AND REVENUE ARE IN APP EALS AGAINST THE FINDING OF LD. CIT(A). 13. AS REGARDS GROUND NO.1 OF ASSESSEE APPEAL IN TH E CASE OF SIGNATURE BUILDERS VIDE ITA NO.184/IND/2018 FOR ASSESSMENT YE AR 2012-13 SINCE THE SAME HAS NOT BEEN PRESSED THIS GROUND IS DISMIS SED AS NOT PRESSED. 13. AS REGARDS GROUND NO.2 OF ASSESSEES APPEAL IN THE CASE OF SIGNATURE BUILDERS VIDE ITA NO.184/IND/2018 FOR ASS ESSMENT YEAR 2012- 13 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A ) CONFIRMING THE ADDITION U/S 68 FOR THE UNEXPLAINED UNSECURED LOAN OF RS.12,00,000/- FROM RIMSHA MAHESHWARI LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT; THE ASSESSEE HAS TAKEN A LOAN OF RS.12,00,000/- FRO M SMT. RIMSHA MAHESHWARI. THE ASSESSEE SUBMITTED THE CONFIRMATION FROM THE SAID PARTY. THE LD. A.O. MADE THE ADDITION ON THE GROUND THAT THE BANK STATEMENTS AND THE COPIES OF THE ITR ARE NOT FILED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 12 BEFORE THE LD. CIT(A) THE BANK STATEMENT WAS FILED BUT THE COPY OF THE ITR WAS NOT FILED. THE LD. CIT(A) DISMISSED THE APPEAL ON THE GROUND THAT THE CREDIT WORTHINESS HAS NOT BEEN PROVED. ARGUMENTS IT IS HUMBLY SUBMITTED THAT THE CONFIRMATION HAS BE EN FILED. THE BANK STATEMENT OF THE LENDER HAS BEEN FILED. (PG.158) SI NCE THE TRANSACTIONS ARE ROUTED THROUGH THE BANKING CHANNEL. IT IS FURTH ER SUBMITTED THAT FROM THE BANK STATEMENT IT CAN BE SEEN THAT THE LEN DER IS A SALARIED PERSON AND THE AMOUNTS IN THE BANK ARE CREDITED BY CHEQUES WHICH CONSEQUENTLY PROVE THAT THE LENDER IS A PERSON OF M EANS. UNDER THESE CIRCUMSTANCES THE ADDITION IS UNCALLED FOR. 14. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTING THE ORDERS OF LOWER AUTHORITIES. 15. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DECISIONS RELIED BY LD. COUNSEL FOR THE ASSESSEE. THROUGH GROUND NO.2 FOR ASSESSME NT YEAR 2012-13 THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) C ONFIRMING THE ADDITION OF UNEXPLAINED UNSECURED LOAN OF RS.12,00,000/- ON THE GROUND THAT THE ASSESSEE FAILED TO PROVE THE CREDITWORTHINESS OF TH E CASH CREDITOR RIMSHA MAHESHWARI. ON PERUSAL OF RECORD WE OBSERVE THAT I N ORDER TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE C ASH CREDITOR RIMSHA MAHESWHARI, ASSESSEE HAD BEEN PROVIDED SUFFICIENT O PPORTUNITY. INSPITE OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 13 THAT ASSESSEE HAS ONLY PROVIDED COPY OF CONFIRMATIO N LETTER AND COPY OF BANK ACCOUNT WHICH TOO IS NOT LEGIBLE. THERE IS NO EVIDENCE TO SHOW THE PERMANENT ACCOUNT NUMBER, IDENTITY DETAILS, DETAILS OF BANK ACCOUNT, INCOME TAX RETURN AND SALARY CERTIFICATE. THE COPY OF BANK STATEMENT PROVIDED AT PAGE 159 OF PAPER BOOK SHOWS THAT ASSES SEE IS RECEIVING SALARY OF RS.21,666/- PER MONTH BUT ASSESSEE HAS BE EN UNSUCCESSFUL TO PROVIDE THE DETAILS OF OTHER CREDIT ENTRIES. IN TH IS SITUATION WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS FAILED TO DIS CHARGE ITS ONUS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CASH CREDI TOR. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE FIND NO REAS ON TO INTERFERE IN THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION FOR U NEXPLAINED LOAN OF RS.12,00,000/- RECEIVED FROM RIMSHA MAHESHWARI. TH US GROUND NO.2 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 S TANDS DISMISSED. 16. GROUND NO.3 OF THE ASSESSEES APPEAL FOR ASSESS MENT YEAR 2012-13 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 17. NOW WE TAKE UP GROUND NO.3 RAISED FOR ASSESSMEN T YEARS 2013-14 AND 2014-15 IN THE CASE OF SIGNATURE BUILDERS VIDE ITA NO.185&186/IND/2018 THROUGH WHICH COMMON ISSUE HAS BEEN RAISED BY THE ASSESSEE CONTENDING THAT LD. CIT(A) WAS NOT JUS TIFIED IN CONFIRMING M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 14 THE ADDITION MADE BY THE LD. A.O FOR THE AMOUNT DEC LARED BY THE ASSESSEE AS ADDITIONAL INCOME OF RS.25,00,000/- AND RS.3,00, 00,000/- FOR ASSESSMENT YEAR 2013-14 AND 2014-15 RESPECTIVELY I N THE STATEMENT GIVEN DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT. 18. BRIEF FACTS RELATING TO THIS COMMON ISSUE AS CU LLED OUT FROM THE RECORDS AND AS NARRATED BY THE LD. COUNSEL FOR THE ASSESSEE ARE THAT A SEARCH WAS CONDUCTED AT THE PREMISES OF THE SIGNATU RE GROUP ON 29.01.2014 AND ALSO AT THE PREMISES OF THE ASSESSEE FIRM. IN THE CASE OF THE ASSESSEE THE SEARCH COMMENCED ON 29.01. 2014 AT 08.45 A.M AND WAS CONCLUDED AT 08.00 AM ON 02.02.2014. TH E PROCEEDINGS CONTINUED FOR 4 DAYS (96 HOURS) WITHOUT ANY BREAK. THE STATEMENT OF MR. RAJ KUMAR KHILWANI COMMENCED ON 01 /02/2014 AND WAS CONCLUDED ON 02/02/2014. DURING THE COURSE OF THE STATEMENT, THE ASSESSEE DECLARED THE ADDITIONAL INC OME OF RS.25,00,000/- FOR THE A.Y. 2013-14 AND RS. 3 CRORE S FOR THE A.Y. 2014-15 (PG.222-240 OF PB AT PAGE 239). IN THE STATEMENT Q.27 WAS ASKED AS DURING THE COURSE OF SEARCH AT BHOPAL AND RAIPUR MANY LOOSE PAPERS HAVE BEEN FOUND FOR WHICH NO SATISFACT ORY ANSWER AND EXPLANATIONS HAVE BEEN GIVEN. IN RELATION TO THESE PAPERS, AN M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 15 OPPORTUNITY IS GIVEN FOR EXPLANATION AFTER CONSULTI NG THE OTHER PARTNERS/ DIRECTORS. THE ASSESSEE GAVE A REPLY AS I HAVE SEEN THE LOOSE PAPERS OF RAIPUR OFFICE AND CONSULTED THE PAR TNERS/ DIRECTORS. FOR THESE LOOSE PAPERS AND FOR RECEIPT OF UNACCOUNT ED MONEY FOR SALE OF SOME UNITS I OFFER A SUM OF RS.11 CRORES AS UNDI SCLOSED INCOME FOR F.Y.2013-14 IN THE FOLLOWING FIRMS A. SIGNATURE DEVELOPERS B. SIGNATURE INFRASTRUCTURE C. SIGNATURE BUILDERS D. SIGNATURE BUILDERS AND COLONISERS 19. THE ADDITIONAL INCOME DISCLOSED IN VARIOUS CASE S HAS BEEN MENTIONED BY THE LD. A.O. AT PG.9 OF THE ORDER WHIC H INCLUDED THE AMOUNT OF RS.3,25,00,000/- IN THE CASE OF THE ASSES SEE. 20. IT WAS SUBMITTED BEFORE THE LD. A.O. THAT IN AB SENCE OF ANY INCRIMINATING PAPER, NO ADDITION CAN BE MADE. HOWEV ER, THE LD. A.O. HAS MADE THE ADDITION SIMPLY ON THE BASIS OF THE ST ATEMENT RECORDED DURING THE COURSE OF THE SEARCH. THE LD. A .O. HAS NARRATED NUMBER OF DOCUMENTS FOUND DURING THE COURSE OF THE SEARCH AT PG. 14 & 15 OF THE ORDER. NONE OF THESE DOCUMENTS PERTA INS TO THE ASSESSEE. IN PARA 9 THE LD. A.O. HAS MERELY RELIED ON THE STATEMENT M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 16 RECORDED U/S 132(4). ON PG.24 HE HAS MERELY STATED THAT SEVERAL INCRIMINATING DOCUMENTS WERE CONFRONTED FOR WHICH T HE ASSESSEE WAS UNABLE TO EXPLAIN. ON THE SOLE GROUND OF THE DE CLARATION IN THE STATEMENT THE ADDITION HAS BEEN MADE. THE LD. CIT(A ) UPHELD THESE ADDITIONS RELYING ON THE EVIDENCE AND HOLDING THAT THE DECLARATION MADE U/S 132(4) IS BINDING ON THE ASSESSEE. 21. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL. 22. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO ADDITION WAS WARRANTED AS THE SURRENDER HAS NOT BEEN MADE WITH R EFERENCE TO ANY LOOSE PAPER SEIZED DURING THE COURSE OF SEARCH AND WAS ACCORDINGLY NOT IN ACCORDANCE WITH THE PROVISIONS O F SECTION 132(4) OF THE ACT. THE AO HAS FAILED TO BRING ON RECORD AN Y SPECIFIC INSTANCE OF THE ASSESSEE HAVING EARNED ANY UNDISCLO SED INCOME OR HAVING MADE ANY UNEXPLAINED INVESTMENT WHICH COULD JUSTIFY THE ADDITION UNDER REFERENCE. THE SOLE BASIS FOR MAKING THE ADDITION IS THE STATEMENT MADE BY ONE OF THE PARTNERS. THE LD. A.O. HAS MADE VARIOUS ADDITIONS FOR THE DOCUMENTS FOUND. THUS, AL L THE LOOSE PAPERS AND THE INVESTMENTS HAVE BEEN CONSIDERED BY THE A.O. AND M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 17 ACCORDINGLY HE HAS MADE THE ADDITIONS UNDER VARIOUS HEADS. AFTER MAKING THE ADDITIONS ON THE BASIS OF VARIOUS PAPERS THERE REMAINS NO SCOPE FOR MAKING THE ADDITION ON THE BASIS OF DE CLARATION MADE IN THE STATEMENT. IT COULD BE OBSERVED THAT THE QUE STION ASKED AND THE ANSWER GIVEN IN THE STATEMENT RECORDED WERE BOT H VAGUE AND GENERAL IN NATURE AND WERE NOT WITH REFERENCE TO AN Y SPECIFIC DOCUMENT OR ASSET FOUND DURING THE COURSE OF SEARCH WHICH WOULD INDICATE THE ACCEPTANCE OF THE ASSESSEE OF EARNING OF ANY UNRECORDED INCOME. RATHER THE ASSESSEE HAS MADE A C ATEGORICAL UNAMBIGUOUS STATEMENT THAT THE ASSESSEE HAS NOT EAR NED ANY UNRECORDED INCOME. REFERENCE IN THIS REGARDS MAY BE MADE TO THE STATEMENT OF MR. RAJKUMAR KHILWANI RECORDED ON 01-0 2/02.2014 Q-9: DO YOU TAKE ANY PAYMENT FROM CUSTOMERS IN CASH OTHER THAN THE SALE PRICE MENTIONED IN THE REGISTRE E AND ADDITIONAL CHARGES RECOVERED. A-9: NO. NO ADDITIONAL PAYMENT IS TAKEN IN CASH IN ADDITION TO ABOVE 23. IT IS FURTHER SUBMITTED THAT NO ADDITION CAN BE MADE WITHOUT FINDING ANY INCRIMINATING MATERIAL MERELY ON THE BA SIS OF THE DECLARATION. IN THIS CONNECTION THE ATTENTION IS DR AWN TO THE DIRECT JUDGMENT OF THE HONBLE INDORE TRIBUNAL IN THE CASE OF SHRI SUDIP M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 18 MAHESHWARI IN ITA 524/IND/2013 PRONOUNCED ON 13/02/ 2019 AND IN THE CASE OF M/S ULTIMATE BUILDERS IN ITA 134/2019 PRONOUNCED ON 09/08/2019. THE HONBLE TRIBUNAL HAS RELIED ON THE VARIOUS JUDGMENTS OF THE VARIOUS HIGH COURTS SPECIALLY THE DECISION OF THE HON. JHARKHAND HIGH COURT IN THE CASE OF SHRI GANESH TRADING CO. V/S. CIT (2013), 257 CTR 0159 AND THE DECISION OF HON. GUJRAT HIGH COURT IN THE CASE OF KAILASHBEN MANGARLAL CHOKSI V/S. CIT (2008) 14 DTR 257 . UNDER THESE CIRCUMSTANCES THE ADDITIONS SUSTAINED BY THE LD. CIT(A) ARE BAD IN LAW. IN VIEW OF THIS, IT IS H UMBLY PRAYED THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) DESERVES T O BE DELETED. 24. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHE MENTLY ARGUED SUPPORTING THE ORDER OF LOWER AUTHORITIES AND SUBMI TTED THAT THE STATEMENT GIVEN BY VARIOUS PERSONS ON BEHALF OF THE ASSESSEE COMPANY WAS THE STATEMENT ON OATH GIVEN U/S 132(4) OF THE ACT AND THERE WAS NO COERCION OR UNDUE INFLUENCE AND NO PRESSURE BY THE REVENUE AUTHORITIES FOR MAKING SUCH SURRENDER. FURTHER THERE WAS NO RE TRACTION WITHIN THE REASONABLE TIME AND THE ACTION OF THE ASSESSEE WAS AN AFTER THOUGHT. LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION AND SAME NEEDS TO BE UPHELD. 25. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 19 BEFORE US AND CAREFULLY GONE THROUGH THE DECISIONS RELIED BY LD. COUNSEL FOR THE ASSESSEE. THROUGH GROUND NO.3 RAISED FOR AS SESSMENT YEARS 2013-14 & 2014-15 ASSESSEE HAS CHALLENGED THE FIND ING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.25,00,000/- AND RS.3, 00,00,000/- MADE BY THE LD. AO FOR ASSESSMENT YEARS 2013-14 & 2014-15 R ESPECTIVELY FOR THE AMOUNT DECLARED BY THE ASSESSEE U/S 132(4) OF THE A CT CONTENDING THAT THE SAME IS WITHOUT CORROBORATING WITH ANY INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 26. WE OBSERVE THAT THE SEARCH WAS CONDUCTED ON SIG NATURE GROUP INCLUDING THE ASSESSEE ON 29.1.2014. CERTAIN LOOSE PAPERS WERE SEIZED. ADDITIONAL INCOME OF RS.3,25,00,000/- (RS. 25,00,00 0/- + RS.3,00,00,000/-) WAS OFFERED FOR ASSESSMENT YEARS 2013-14 AND 2014- 15 RESPECTIVELY. HOWEVER IN THE RETURN OF INCOME F ILED POST SEARCH U/S 153A OF THE ACT SUCH ADDITIONAL INCOME OF RS.25,00, 000/- AND RS.3,00,00,000/- WAS NOT OFFERED IN THE RETURN OF I NCOME. DURING THE ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT VARIOU S LOOSE PAPERS AND DOCUMENTS NARRATED BY THE LD. A.O FOUND DURING THE COURSE OF SEARCH DOES NOT PERTAIN TO THE ASSESSEE. SINCE THERE WAS NO SUCH INCRIMINATING MATERIAL RELATING TO THE ASSESSEE FOUND DURING THE COURSE OF SEARCH M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 20 RELATING TO THE ADDITION IN QUESTION THE ALLEGED AD DITION WAS MADE PURELY ON THE BASIS OF THE STATEMENT GIVEN U/S 132(4) OF T HE ACT. 27. WE ALSO OBSERVE THAT IN THE ASSESSMENT ORDER AS WELL AS ORDER OF THE FIRST APPELLATE AUTHORITY THERE IS NO MENTION OF AN Y INCRIMINATING MATERIAL HAVING ITS NEXUS WITH THE ALLEGED INCOME DECLARED U /S 132(4) OF THE ACT. THE LD. A.O HAS FAILED TO PROVE ON RECORD ANY SPECI FIC INSTANCE WITH SUPPORT OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH WHICH COULD SHOW THAT THE ASSESSEE HAS EARNED THE A LLEGED UNDISCLOSED INCOME. IT IS NOT IN DISPUTE THAT VARIOUS OTHER AD DITIONS HAVE BEEN MADE BY THE LD. A.O FOR THE UNDISCLOSED INVESTMENT U/S 6 9B, UNDISCLOSED INVESTMENT IN PROJECTS OF LAND AND UNEXPLAINED UNSE CURED LOAN AS WELL AS UNEXPLAINED CASH U/S 69A OF THE ACT. HOWEVER SPECI FICALLY WITH REGARD TO THE ADDITION OF RS.25,00,000/- AND RS.3,00,00,000/- MADE FOR THE ASSESSMENT YEARS 2013-14 AND 2014-15 THE SAME IS PU RELY BASED ON THE STATEMENT GIVEN ON OATH U/S 132(4) OF THE ACT BY TH E AUTHORISED REPRESENTATIVE ON BEHALF OF THE ASSESSEE WHICH WAS COLLECTIVELY SURRENDERED AS ADDITIONAL INCOME ON BEHALF OF VARIO US GROUP CONCERNS. BUT WITHOUT THE SUPPORT OF ANY INCRIMINATING MATERI AL ON WHICH THE REVENUE AUTHORITIES WERE ABLE TO LAY THEIR HANDS, T HIS ADDITION TOTALLING TO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 21 RS.3.25 CRORES (RS.25,00,000/- + RS.3,00,00,000/-) IS BASED ONLY ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT. 28. NOW THE MOOT QUESTION REMAINS THAT WHETHER THE LD. A.O WAS JUSTIFIED IN MAKING THE ADDITION PURELY ON THE BASI S OF STATEMENT GIVEN U/S 132(4) OF THE ACT WITHOUT PROVING ON RECORD ANY COR ROBORATIVE EVIDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH WHICH COULD HAVE DIRECT NEXUS WITH THE ALLEGED ADDITION OF RS.3.25 C RORES. 29. WE OBSERVE THAT SIMILAR ISSUE CAME UP BEFORE TH IS TRIBUNAL IN ANOTHER GROUP CONCERN M/S ULTIMATE BUILDERS V/S ACIT ITA NO.134/IND/2019 ORDER DATED 09.08.2019 . M/S ULTIMATE BUILDERS WAS ALSO SUBJECTED TO SEARCH U/S 132 OF THE ACT ON 29.1 .2014 BEING PART OF THE SAME SIGNATURE GROUP. FROM PERUSAL OF THE IMPUGNED ORDER OF LD. CIT(A) IN THE CASE OF M/S SIGNATURE BUILDERS OBSERVED AT P AGE 64 & 65, LD. CIT(A) HAS GIVEN THE BRIEF DETAILS OF THE ADDITIONA L INCOME ADMITTED BY THE AUTHORISED PERSON OF M/S SIGNATURE GROUP WHICH IS AS FOLLOWS; S.NO CONCERN/F.Y 2012 - 13 2013 - 14 TOTAL 1 SIGNATURE INFRASTRUCTURE 50 300 350 2 SIGNATURE BUILDERS 25 300 325 3 SIGNATURE BUILDERS AND 25 300 325 M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 22 COLONISERS 4 SIGNATURE DEVELOPERS 100 100 TOTAL 1100 5 OM BUILDERS 275 275 6 OM CONSTRUCTION 50 750 800 7 SAINATH INFRASTRUCTURE P LTD 25 25 TOTAL 1100 8 ULTIMATE BUILDERS 225 225 9 VIRASHA INFRASTRUCTURE 225 225 TOTAL 450 10 M/S SAINATH COLONIZERS PVT. LTD 110 110 11 SHRI ANIL K ERED K HILWANI 40 40 TOTAL 150 30. FROM THE ABOVE WE FIND THAT IN THE CASE OF M/S ULTIMATE BUILDERS ALSO ADDITIONAL INCOME WAS SURRENDERED IN THE STATE MENT GIVEN U/S 132(4) OF THE ACT FOR WHICH THE ADDITION WAS MADE BY THE LD. A.O WITHOUT CORROBORATING IT WITH ANY INCRIMINATING MATERIAL AN D THE ADDITION WAS CONFIRMED BY LD. CIT(A). WHEN THE MATTER TRAVELLED BEFORE THIS TRIBUNAL THE ADDITION OF RS.2.25 CRORES WAS DELETED BY THIS TRIBUNAL OBSERVING AS FOLLOWS:- 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUDGMENTS REFERRED TO AND RELIED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 23 BY BOTH THE PARTIES. THE SOLE GRIEVANCE OF THE ASS ESSEE RAISED IN GROUND NO.1 OF THE INSTANT APPEAL IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.2,25,00,000/- MADE BY THE LD. A.O ON ACCOUNT OF UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH BY THE PARTNER OF THE ASSESSEE FIRM. 10. AT THE COST OF REPETITION WE WOULD LIKE TO RECITE AND RECAPITULATE THE FACTS ONCE MORE. THE ASSESSEE IS A PARTNERSHIP FIR M ENGAGED IN REAL ESTATE BUSINESS. IT IS THE PART OF SIGNATURE GROUP. SEAR CH ACTION WAS INITIATED IN THE SIGNATURE GROUP AND ITS ASSOCIATES ON 29.1.2014 . THE ASSESSEES ASSOCIATION WITH THE SIGNATURE GROUP IS ON ACCOUNT OF THE COMMON PARTNERS IN VARIOUS CONCERNS. ASSESSEE IS SEPARATELY ASSESS ED TO TAX. SEARCH U/S 132(4) OF THE ACT WAS INITIATED IN THE CASE OF THE ASSESSEE ON 29.1.2014 AND WAS CONCLUDED ON 31.1.2014. THIS FACT IS PROVE D ON THE BASIS OF PANCHANAMA PREPARED BY THE OFFICER OF THE SEARCH TEAM WHICH IS PLACED AT PAGE 62-64. NO SURRENDER WAS MADE IN THE STATEM ENTS TAKEN BY THE SEARCH TEAM DURING THE COURSE OF SEARCH FROM 29.1.2 014 TO 31.1.2014. THERE IS NO MENTION OF ANY INCRIMINATING MATERIAL R EFERRED BY THE LD. A.O ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE. 11 . THE SEARCH ACTION IN THE CASE OF SIGNATURE GROUP CONTINUED EVER AFTER 31.1.2014. ON 02.02.2014, MR. VIPIN CHOUHAN WHO IS THE PARTNER OF THE ASSESSEE FIRM GAVE A STATEMENT BEFORE THE SEARC H TEAM WHEREIN HE MADE SURRENDER OF RS.2,25,00,000/- ON BEHALF OF THE APPELLANT FIRM AND AGREED TO OFFER IT TO TAX. IN THE VERY SAME STATEM ENT HE ALSO MADE SURRENDER ON BEHALF OF ANOTHER FIRM M/S. VIRASHA IN FRASTRUCTURE IN THE CAPACITY OF A PARTNER. IN THE VERY SAME STATEMENT HE ALSO MADE SURRENDER ON BEHALF OF OTHER COMPANIES OF SIGNATURE GROUP. L D. A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS NOT OFFERED SURRENDERED INCOME OF RS.2,25,00,000/- FOR TAX AND CONFRONTED THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS U/S 14 3(3) OF THE ACT, ASSESSEE MADE THE RETRACTION BY SUBMITTING THAT NO SUCH UNDISCLOSED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 24 INCOME WAS EARNED AND THEREFORE NO SUCH INCOME WAS REQUIRED TO BE OFFERED TO TAX. HOWEVER, LD. A.O GIVING REFERENCE TO THE STATEMENT OF MR. VIPIN CHOUHAN, PARTNER OF ULTIMATE BUILDERS AND ALS O GIVING REFERENCE TO THE SEIZED DOCUMENTS FOUND DURING THE SEARCH AT SIG NATURE GROUP MADE ADDITION FOR UNDISCLOSED INCOME. WHEN THE MATTER C AME UP BEFORE LD. CIT(A) ADDITION WAS CONFIRMED. HOWEVER THE BASIS O F ADDITION WAS ACCEPTED TO HAVE BEEN MADE ONLY ON THE BASIS OF THE STATEMENT OF MR. VIPIN CHOUHAN. NO REFERENCE WAS MADE TO ANY INCRIMINATIN G MATERIAL HAVING ITS BEARING ON THE SURRENDERED INCOME. DURING THE COURS E OF HEARING BEFORE US LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT DURING THE COURSE OF SEARCH I.E. BETWEEN 29.1.14 TO 31.1.2014 NO CASH OR UNRECO RDED ASSETS WAS FOUND, NO INCRIMINATING MATERIAL WAS FOUND AND NO I NCOME WAS OFFERED TO TAX IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT OF THE PERSON FOUND TO BE IN THE POSSESSION AND CONTROL OF THE BOOKS OF PR EMISES. RELEVANT QUESTIONS ASKED ABOUT THE LOOSE PAPER FOUND WERE DU LY REPLIED IN THE STATEMENT. 12. LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THA T SINCE THE SEARCH IN THE CASE OF ASSESSEE WAS CONCLUDED ON 31.1.2014 THE ALLEGED STATEMENT OF THE PARTNER MR. VIPIN CHOUHAN TAKEN ON 02.02.201 4 CANNOT BE CONSTRUED AS A STATEMENT GIVEN DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT SO FAR AS RELATING TO THE ASSESSEE SINCE TH E SEARCH IN ITS CASE ALREADY CONCLUDED ON 31.1.2014. HE FURTHER SUBMITT ED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND AS HELD BY HONBLE TRIBUNAL IN THE LATEST DECISION IN THE C ASE OF ACIT(1) VS. SUDEEP MAHESHWARI (SUPRA) THAT NO ADDITION WAS CALLED FOR WHICH HAS BEEN MADE MERELY ON THE BASIS OF THE STATEMENT WITHOUT CORREL ATING THE DISCLOSURE MADE IN THE STATEMENT WITH THE INCRIMINATING MATERI AL GATHERED DURING THE COURSE OF SEARCH. 13. SO THE CONTENTION OF THE LD. COUNSEL FOR THE ASSES SEE CAN BE SUMMARISED THAT THE ADDITION CANNOT BE MADE MERELY ON THE BASIS OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 25 STATEMENT WHICH TOO WAS TAKEN AFTER CONCLUSION OF THE SEARCH AND NO CORRELATION HAS BEEN MADE WITH THE INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH. 14. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE GAVE REFERENCE TO VARIOUS JUDGEMENTS REFERRED ABOVE. SHE MAINLY PLA CED EMPHASIS ON THE JUDGMENT OF HONBLE HIGH COURT OF MADRAS IN THE CAS E OF KISHORE KUMAR V/S DCIT (SUPRA) HOLDING THAT WHEN THERE WAS A CLE AR ADMISSION OF UNDISCLOSED INCOME IN THE STATEMENT SWORN IN U/S 13 2(4) OF THE ACT THERE IS NO NECESSITY TO SCRUTINISE THE DOCUMENTS. 15. NOW SO FAR AS THE FIRST CONTENTION OF THE ASSESSEE THAT THE STATEMENT RELIED ON BY THE REVENUE AUTHORITIES CANNOT BE CONS TRUED AS A STATEMENT GIVEN U/S 132(4) OF THE ACT, WE WILL LIKE TO FIRST REPRODUCE THE PROVISIONS OF SECTION 132(4) OF THE ACT; (4) THE AUTHORISED OFFICER MAY, DURING THE COURSE OF THE SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOND TO BE IN POS SESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JE WELLERY TO OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDER THIS ACT. 1 EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTION M AY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH, BUT ALSO IN RESPECT OF ALL MA TTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PR OCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDE R THIS ACT. 16. THE ABOVE SUB SECTION 4 OF SECTION 132 OF THE ACT STARTS WITH REFERENCE TO AUTHORISED OFFICER, WHICH MEANS THA T THE OFFICER WHO IS AUTHORISED TO CONDUCT SEARCH ON THE ASSESSEE. IN T HE INSTANT CASE IT IS M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 26 STATED BEFORE US THAT THE AUTHORISED OFFICER OF THE ASSESSEE AND THAT OF THE OTHER CONCERNS OF SIGNATURE GROUP ARE DIFFERENT. 17. AFTER THE WORD THE AUTHORISED OFFICER IT READS DU RING THE COURSE OF SEARCH OR SEIZURE, EXAMINATION OF BOTH THE PERSON. DURING THE COURSE OF SEARCH IS A PERIOD DURING WHICH THE SEARCH IS INIT IATED AND CONCLUDED. IN THE INSTANT CASE THE SEARCH WAS INITIATED ON 29.1.2 014 AND CONCLUDED ON 31.1.2014 BY A AUTHORISED OFFICER FOR THE ASSESSEE WHICH IS VERIFIABLE FROM THE PANCHANAMA FRAMED BY THE SEARCH TEAM. THE STAT EMENT OF MR. VIPIN CHOUHAN WAS TAKEN ON 02.02.2014 BY ANOTHER AUTHORIS ED OFFICER AND THIS DATE IS AFTER THE CONCLUSION OF THE SEARCH IN THE C ASE OF THE ASSESSEE ON 30.01.2014. 18. THERE MAY HAVE BEEN SOME FORCE IN THE CONTENTION O F THE REVENUE AUTHORITIES IF THE STATEMENT U/S 132(4) OF THE ACT WAS TAKEN DURING THE COURSE OF SEARCH AT THE ASSESSEES PREMISES OR DURI NG THE CONTINUATION OF SEARCH, THE STATEMENT MAY HAVE BEEN RECORDED ON OTH ER PLACES BUT THE FACT IS THAT SO FAR AS THE ASSESSEE M/S. ULTIMATE BUILDE RS IS CONCERNED THE SEARCH CONCLUDED ON 31.01.2014 AND BEFORE THE CONCL USION OF THE SEARCH NO SURRENDER OF UNDISCLOSED INCOME WAS MADE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT BY THE PERSONS AVAILABLE AT T HE ASSESSEES BUSINESS PREMISES. 19. AS REGARDS THE STATEMENT OF MR. VIPIN CHOUHAN GIVE N ON 02.02.2014 IS CONCERNED, WE FIND THAT THIS STATEMENT CONTAINS THE SURRENDER FOR VARIOUS GROUP CONCERNS AND NOT SPECIFICALLY FOR THE ASSESSEE M/S. ULTIMATE BUILDERS. REFERENCE WAS ALSO GIVEN TO OTHER BUSINE SS CONCERNS NAMELY M/S. VIRASHA INFRASTRUCTURE, SIGNATURE INFRASTRUCTU RE, SIGNATURE BUILDERS AND SIGNATURE BUILDERS AND COLONISERS. CERTAINLY T HE SEARCH IN THE CASE OF CONCERNS OTHER THAN THE ULTIMATE BUILDERS DID NOT C ONCLUDE ON 02.02.2014 BUT AT THAT POINT OF TIME ON 02.02.2014 THE SEARCH IN THE CASE OF ULTIMATE BUILDERS STOOD CONCLUDED TWO DAYS BEFORE ON 31.1.20 14. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 27 20. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT THE A LLEGED STATEMENT GIVEN BY MR. VIPIN CHOUHAN ON 02.02.2014 MAY BE CON STRUED AS THE SECTION 132(4) OF THE ACT FOR ALL THE OTHER CONCERN S NAMED ABOVE EXCEPT FOR THE ASSESSEE I.E. M/S. ULTIMATE BUILDERS. THEREFOR E THE STATEMENT REFERRED TO BY THE LD. A.O ON THE BASIS OF WHICH THE ADDITIO N HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE IN OUR VIEW CANNOT BE CONSTRU ED AS THE STATEMENT U/S 132(4) OF THE ACT. 21. COMING TO THE ISSUE OF ADDITION MADE BY THE LD. A. O ON THE BASIS OF THE STATEMENT BUT NO REFERENCE BEEN GIVEN TO THE I NCRIMINATING MATERIAL, WE FIND THAT IN THE ASSESSMENT ORDER LD. A.O HAS RE FERRED TO VARIOUS SEIZED DOCUMENTS BUT NONE OF THEM IS DIRECTLY RELAT ED TO THE ASSESSEE. THESE SEIZED DOCUMENTS ARE OF THE SIGNATURE GROUP A ND LD. A.O HAS ONLY MENTIONED THE DETAILS OF THE SEIZED DOCUMENT WITHOU T UTTERING A WORD ABOUT THEIR NEXUS WITH THE BUSINESS TRANSACTION CAR RIED OUT BY THE ASSESSEE OR BY POINTING OUT ASSESSEES CONNECTION WITH THE SEIZED DOCUMENT IN NAME OR OTHERWISE. THUS IT CAN BE SAFE LY CONCLUDED THAT THE ADDITION MADE BY THE LD. A.O WAS NOT ON THE BASIS O N THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH BUT ONLY ON THE BASIS OF STATEMENT OF MR. VIPIN CHOUHAN GIVEN ON 02.02.2014. 22. RECENTLY THE CO-ORDINATE BENCH IN THE CASE OF ACIT (1) VS. SUDEEP MAHESHWARI (SUPRA) IN WHICH THE UNDERSIGNED WAS ALS O A CO-AUTHOR WHILE ADJUDICATING THE ISSUE THAT WHETHER ADDITION CAN B E MADE MERELY ON THE BASIS OF STATEMENT GIVEN DURING THE COURSE OF SEARC H WITHOUT CORRELATING THE STATEMENT WITH INCRIMINATING MATERIAL, WE HAVE DECIDED THE ISSUE OBSERVING AS FOLLOWS:- 6. IT IS THE CASE OF THE ASSESSEE THAT DURING THE COURSE OF SEARCH & SEIZURE, NO INCRIMINATING MATERIAL OR UNDISCLOSED I NCOME OR INVESTMENTS WERE FOUND. IT IS STATED THAT THE ASSESSEE WAS UND ER MENTAL PRESSURE AND TIRED. THEREFORE, TO BUY PEACE OF MIND, HE ACCEPTE D AND DECLARED RS.3 CRORES IN PERSONAL NAME. IT IS ALSO STATED THAT TH E CASE LAWS AS RELIED BY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 28 THE A.O. ARE NOT APPLICABLE ON THE FACTS OF THE PRE SENT CASE. THE ASSESSEE HAS RELIED ON THE DECISION OF THE HON'BLE SUPREME C OURT RENDERED IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. 91 ITR 1 8 (SC), WHEREIN THE HON'BLE COURT HAS HELD THAT ADMISSION CANNOT BE SAI D THAT IT IS CONCLUSIVE. RETRACTION FROM ADMISSION WAS PERMISSIBLE IN LAW AN D IT WAS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT WAS I NCORRECT. HOWEVER, RELIANCE IS PLACED ON THE JUDGEMENT OF THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMA L KOCHAR (2015) 55 TAXMANN.COM 292 (GUJARAT), WHEREIN IT HAS BEEN HELD THAT MERELY ON THE BASIS OF ADMISSION THAT FEW BENAMI CONCERNS WERE BE ING RUN BY ASSESSEE, ASSESSEE COULD NOT BE BASIS FOR MAKING THE ASSESSEE LIABLE FOR TAX AND THE ASSESSEE RETRACTED FROM SUCH ADMISSION AND REVENUE COULD NOT FURNISH ANY CORROBORATIVE EVIDENCE IN SUPPORT OF SUCH EVIDE NCE. IT WAS FURTHER URGED BY THE ASSESSEE THAT ADMISSION SHOULD BE BASE D UPON CERTAIN CORROBORATIVE EVIDENCES. IN THE ABSENCE OF CORROBO RATIVE EVIDENCES, THE ADMISSION IS MERELY A HOLLOW STATEMENT. WE HAVE GI VEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS OF THE PARTI ES. IT IS UNDISPUTED FACT THAT THE STATEMENT RECORDED U/S 132(4) OF THE ACT H AS A BETTER EVIDENTIARY VALUE BUT IT IS ALSO A SETTLED POSITION OF LAW THAT THE ADDITION CANNOT BE SUSTAINED MERELY ON THE BASIS OF THE STATEMENT. TH ERE HAS TO BE SOME MATERIAL CORROBORATING THE CONTENTS OF THE STATEMEN T. IN THE CASE IN HAND, REVENUE COULD NOT POINT OUT AS WHAT WAS THE MATERIA L BEFORE THE A.O., WHICH SUPPORTED THE CONTENTS OF THE STATEMENT. IN THE ABSENCE OF SUCH MATERIAL, COUPLED WITH THE FACT THAT IT IS RECORDED BY THE LD. CIT(A) THAT THE ASSESSEE HIMSELF HAD SURRENDERED A SUM OF RS.69,59, 000/- AND RS.75,00,000/- IN A.Y. 2008-09 AND 2009-10 RESPECTI VELY. THE A.O. FAILED TO CO-RELATE THE DISCLOSURES MADE IN THE STATEMENT WITH THE INCRIMINATING MATERIAL GATHERED DURING THE SEARCH. THEREFORE, NO INFERENCE IS CALLED FOR IN THE FINDING OF THE LD. CIT(A) AND IS HEREBY AFFI RMED. GROUND RAISED BY THE REVENUE IS DISMISSED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 29 23. HONBLE GUJARAT HIGH COURT IN THE CASE OF KAILASHB EN MANGARLAL CHOKSHI VS. CIT - (2008) 14 DTR 257 (GUJ.), HELD TH AT MERELY ON THE BASIS OF ADMISSION, THE ASSESSEE COULD NOT HAVE BEEN SUBJ ECT TO ADDITIONS, UNLESS AND UNTIL SOME CORROBORATIVE EVIDENCE IS FOU ND IN SUPPORT OF SUCH ADMISSION. 24. HON'BLE JHARKHAND HIGH COURT SHREE GANESH TRADING CO. V/S COMMISSIONER OF INCOME-TAX, TAX CASE NO.8 OF 1999 O RDER DATED 03.01.2013 HELD AS UNDER; 4. WE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNS EL FOR THE PARTIES AND PERUSED THE REASONS GIVEN IN THE IMPUGNED ORDER S AS WELL AS REASONS GIVEN IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI ( SUPRA). 5. IT APPEARS FROM THE STATEMENT OF FACTS THAT THERE WAS A SEARCH IN THE BUSINESS PREMISES OF THE PETITIONERS FIRM AS WELL AS IN THE RESIDENTIAL PREMISES OF ITS PARTNER, SHRI SHEO KUMAR KEJRIWAL, ON 24TH SEPTEMBER, 1987. DURING THE COURSE OF SEARCH, THE STATEMENT OF SHRI SHEO KUMAR KEJRIWAL HAD BEEN RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT AND IN THE STATEMENT, HE STATED THAT HE WAS PARTNER IN THE GANESH TRADING COMPANY, I.E. THE PRESENT ASSESSEE-FIRM IN HIS INDI VIDUAL STATUS AND THAT HE SURRENDERED RS. 20 LACS FOR THE ASSESSMENT YEAR 1988-89 AS INCOME, ON WHICH TAX WOULD BE PAID. HE FURTHER STATED THAT OTH ER PARTNERS WOULD AGREE TO THE SAME; OTHERWISE IT WOULD BE HIS PERSON AL LIABILITY. HOWEVER, IN THE RETURNS FILED AFTER SEARCH, THE INCOME OF RS. 2 0 LACS SURRENDERED BY SHRI SHEO KUMAR KEJRIWAL WAS NOT DECLARED BY THE AS SESSEE-FIRM. ON BEING ASKED TO EXPLAIN THE REASON FOR NOT SHOWING T HE SURRENDERED AMOUNT IN THE RETURNS, IT WAS SUBMITTED BY THE ASSESSEE TH AT DECLARATION MADE BY THE PARTNER WAS MISCONCEIVED AND DIVORCED FROM REAL FACTS. IT WAS CONTENDED THAT THE DECLARATION WAS MADE AFTER PERSU ASION, WHICH, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI BINOD PODDAR, IN FACT, WAS BECAUSE OF COERCION EXERTED BY THE SEARCH OFFICERS. IN EXPLANATION, IT WAS SUBMITTED THAT THE FIRM OR THE INDIVIDUAL HAD NO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 30 UNDISCLOSED INCOME. THE ASSESSEES SAID RETRACTION WAS NOT ACCEPTED BY ANY OF THE AUTHORITIES BELOW ON THE GROUND THAT THE STATEMENT GIVEN BY THE ASSESSEE APPEARS TO BE VOLUNTARILY GIVEN STATEMENT DISCLOSING UNDISCLOSED INCOME OF RS. 20 LACS. ACCORDING TO THE LEARNED COU NSEL FOR THE ASSESSEE, SHRI BINOD PODDAR, THE ASSESSING OFFICER HAD FULL J URISDICTION TO PROCEED FOR FURTHER ENQUIRY AND COULD HAVE COLLECTED EVIDENCE I N SUPPORT OF ALLEGED ADMISSION OF UNDISCLOSED INCOME OF THE ASSESSEE. 6. WE ARE OF THE CONSIDERED OPINION THAT STATEMENT RE CORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 IS EVIDENCE BUT ITS RELIABILITY DEPENDS UPON THE FACTS OF THE CASE AND PARTICULARLY SURROUN DING CIRCUMSTANCES. DRAWING INFERENCE FROM THE FACTS IS A QUESTION OF L AW. HERE IN THIS CASE, ALL THE AUTHORITIES BELOW HAVE MERELY REACHED TO THE CO NCLUSION OF ONE CONCLUSION MERELY ON THE BASIS OF ASSUMPTION RESULT ING INTO FASTENING OF THE LIABILITY UPON THE ASSESSEE. THE STATEMENT ON O ATH OF THE ASSESSEE IS A PIECE OF EVIDENCE AS PER SECTION 132(4) OF THE INCO ME TAX ACT AND WHEN THERE IS INCRIMINATING ADMISSION AGAINST HIMSELF, T HEN IT IS REQUIRED TO BE EXAMINED WITH DUE CARE AND CAUTION. IN THE JUDGMENT OF KAILASHBEN MANHARLAL CHOKSHI (SUPRA), THE DIVISION BENCH OF GU JARAT HIGH COURT HAS CONSIDERED THE ISSUE IN THE FACTS OF THAT CASE AND FOUND THE EXPLANATION GIVEN BY THE ASSESSEE TO BE MORE CONVINCING AND THA T WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. HERE IN THIS CASE ALSO, N O SPECIFIC REASON HAS BEEN GIVEN FOR REJECTION OF THE ASSESSEES CONTENTI ON BY WHICH THE ASSESSEE HAS RETRACTED FROM HIS ADMISSION. NONE OF THE AUTHO RITIES GAVE ANY REASON AS TO WHY ASSESSING OFFICER DID NOT PROCEED FURTHER TO ENQUIRE INTO THE UNDISCLOSED INCOME AS ADMITTED BY THE ASSESSEE IN H IS STATEMENT UNDER SECTION 134(2) IN FACT SITUATION WHERE DURING THE C OURSE OF SEARCH, THERE WAS NO RECOVERY OF ASSETS OR CASH BY THE DEPARTMENT . THIS FACT ALSO HAS NOT BEEN TAKEN CARE OF AND CONSIDERED BY ANY OF THE AUTHORITIES THAT IN A CASE WHERE THERE WAS SEARCH OPERATION, NO ASSETS OR CASH WAS RECOVERED FROM THE ASSESSEE, IN THAT SITUATION WHAT HAD PROMP TED THE ASSESSEE TO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 31 MAKE DECLARATION OF UNDISCLOSED INCOME OF RS. 20 LA CS. MERE READING OF STATEMENT OF ASSESSEE IS NOT THE ASSESSMENT OF EVID ENTIARY VALUE OF THE EVIDENCE WHEN SUCH STATEMENT IS SELF-INCRIMINATING. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT IN THE PRESENT CASE, A WRONG INFERENCE HAD BEEN DRAWN BY THE AUTHORITIES BELOW IN HOLDING THAT THERE WAS UNDISCLOSED INCOME TO THE TUNE OF RS. 20 LACS. 7. IN VIEW OF THE ABOVE REASONS, WITHOUT ANSWERING TH E QUESTION ABOUT RETROSPECTIVE OPERATION OF THE PROVISO TO SECTION 1 34(4), WE ARE HOLDING THAT THE AUTHORITIES BELOW HAVE COMMITTED ERROR OF LAW I N DRAWING INFERENCE FROM THE MATERIALS PLACED ON RECORD, I.E. ADMISSION OF THE ASSESSEE COUPLED WITH ITS RETRACTION BY THE ASSESSEE. THE REVENUE MA Y NOW PROCEED ACCORDINGLY. 25. IN THE LIGHT OF RATIO LAID DOWN IN VARIOUS JUDGMEN TS REFERRED ABOVE INCLUDING ONE IN THE CASE OF ACIT(1) VS. SUDEEP MAH ESHWARI (SUPRA) DECIDED BY US WHEREIN ALSO WE, AFTER REFERRED VARIO US JUDGMENTS OF HON'BLE HIGH COURTS HAVE HELD THAT ADDITIONS CANN OT BE SUSTAINED MERELY ON THE BASIS OF STATEMENT GIVEN DURING THE COURSE O F SEARCH WITHOUT CORRELATING THE ADDITION WITH THE INCRIMINATING SEI ZED MATERIAL. THEREFORE THE DECISION RELIED BY LD. DEPARTMENTAL REPRESENTAT IVE LAYING DOWN THE RATIO THAT ADDITION CAN BE MADE EVEN ON THE BASIS O F STATEMENT GIVEN DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT I RRESPECTIVE OF THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND OR NOT, WILL NOT SUPPORT REVENUE IN THE INSTANT CASE. 26. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE A ND RESPECTFULLY FOLLOWING THE JUDGEMENTS AND DECISIONS REFERRED ABO VE WE FIND THAT FIRSTLY THE STATEMENT GIVEN BY MR. VIPIN CHOUHAN U/S 132(4) OF THE ACT ON 02.02.2014 CANNOT BE CONSIDERED AS THE STATEMENT GI VEN U/S 132(4) OF THE ACT IN THE INSTANT CASE OF THE ASSESSEE FIRM SINCE THE SEARCH ACTION IN CASE OF ASSESSEE WAS CONCLUDED ON 31.1.2014 BY THE AUTH ORISED OFFICER. SECONDLY AS REGARDS TO OTHER BUSINESS CONCERNS REFE RRED BY MR. VIPIN M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 32 CHOUHAN IN HIS STATEMENT GIVEN ON 02.02.2014 AND IN CASE OF SUCH BUSINESS CONCERN WHEREIN SEARCH ACTION U/S 132 OF T HE ACT WAS CONTINUING THE SAID STATEMENT DATED 02.02.2014 WILL BE CONSIDE RED AS THE STATEMENT U/S 132(4) OF THE ACT. THIRDLY, NO REFERENCE HAS B EEN GIVEN BY THE REVENUE AUTHORITIES TO ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH AT THE BUSINESS PREMISES OF THE ASSESSEE, WHICH COU LD BE CORRELATED TO THE ALLEGED SURRENDERED INCOME EARNED BY THE ASSESSEE F ROM UNDISCLOSED SOURCES. 27. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT THE FI NDING OF LD. CIT(A) NEEDS TO BE SET ASIDE AND THE ADDITION OF RS.2,25,0 0,000/- DESERVES TO BE DELETED SINCE IT HAS BEEN MADE ON THE BASIS OF A ST ATEMENT NOT GIVEN U/S 132(4) OF THE ACT AND WITHOUT REFERRING TO ANY INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. ADDITION FOR UNDISCLO SED INCOME OF RS.2,25,00,000/- IS DELETED. ACCORDINGLY GROUND NO .1 RAISED IN THE APPEAL BY THE ASSESSEE IS ALLOWED. 31. FROM PERUSAL OF THE ABOVE FINDING OF THIS TRIBU NAL IN THE CASE OF M/S ULTIMATE BUILDERS (SUPRA), WE FIND THAT THE COMMON ISSUE RAISED IN GROUND NO.3 OF M/S SIGNATURE BUILDERS IS IDENTICAL TO THE ISSUE RAISED AND ADJUDICATED IN THE CASE OF M/S ULTIMATE BUILDERS (SUPRA). WE THEREFORE RESPECTFULLY FOLLOWING THE SAME AND ALSO IN VIEW OF THE IDENTICAL FACT THAT IMPUGNED ADDITION O F RS.25,00,000/- AND RS.3,00,00,000/- MADE BY THE LD. A.O WAS PURELY BASED ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH WHICH M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 33 COULD SUPPORT THE IMPUGNED ADDITION, WE THUS DELET E THE ADDITION OF RS.25,00,000/- FOR ASSESSMENT YEAR 2013-14 AND RS.3,00,00,000/- FOR ASSESSMENT YEAR 2014-15 AND SE T ASIDE THE FINDING OF BOTH THE LOWER AUTHORITIES AND ACCORDING LY ALLOW GROUND NO.3 RAISED IN ASSESSEES APPEAL FOR ASSESSMENT YEA RS 2013-14 AND 2014-15 RAISED IN ITA NO.185-186/IND/2018. 32. IN THE RESULT ASSESSEES APPEAL FOR 2012-13 (IT A NO.184/IND/2018) IS DISMISSED AND APPEAL FOR ASSESS MENT YEAR 2013-14 AND ASSESSMENT YEAR 2014-15 (ITA NO.185&186 /IND/ 2018) ARE ALLOWED. 33. NOW WE TAKE UP THE REVENUES APPEAL VIDE ITA NO .174 TO 176/IND/2018 FOR ASSESSMENT YEARS 2012-13 TO 2014-1 5 IN THE CASE OF M/S SIGNATURE BUILDERS. 34. THROUGH GROUND NO.1 RAISED FOR ASSESSMENT YEARS 2012-13 TO 2014-15 COMMON ISSUE HAS BEEN RAISED BY THE REVENUE CHALLENGING THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.2,73,48,559/-, RS,5,32,58,155/- AND RS.4,38,32,956/- MADE FOR ASSE SSMENT YEARS 2012-13, 2013-14 AND 2014-15 RESPECTIVELY WHICH WA S MADE BY THE LD. A.O. ON ACCOUNT OF UNDISCLOSED INVESTMENT U /S 69B OF THE ACT BASED ON THE DEPARTMENTAL VALUATION OFFICER REP ORT. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 34 35. BRIEF FACTS RELATING TO THIS ISSUE AS CULLED OU T FROM THE RECORDS ARE THAT DURING THE COURSE OF SEARCH OPERATIONS ON THE GROUP, THE VALUATION OF THE PROJECT SIGNATURE RESIDENCY, NEAR JK HOSPITAL, KOLAR ROAD, BHOPAL WAS DONE BY THE REGISTERED VALUE R ON 30.01.2014 AND ACCORDINGLY VALUATION REPORT WAS FUR NISHED BY THE REGISTERED VALUER. AS PER THE VALUATION REPORT, TH E TOTAL VALUE OF THE PROJECT WAS ASCERTAINED AT RS.50.46 CRORE. THIS FAC T WAS CONFRONTED WITH SHRI VIPIN CHAUHAN, PARTNER OF THE ASSESSEE FI RM, DURING THE COURSE OF HIS STATEMENT RECORDED ON 24.07.2014 AND HE WAS REQUESTED TO RECONCILE THE VALUE ASCERTAINED BY THE REGISTERED VALUER WITH THE BOOKS OF ACCOUNT OF THE FIRM AND EXPLAIN T HE DIFFERENCES. A COPY OF THE REPORT OF THE REGISTERED VALUER WAS ALS O PROVIDED. IN THE STATEMENT HE HAS STATED THAT THE ACTUAL COST INCURR ED IN THE PROJECT HAS BEEN SHOWN IN THE BOOKS OF THE FIRM, WHICH IS A PPROXIMATELY RS.29.08 CRORE. AS REGARDS THE DIFFERENCE, HE STAT ED THAT SINCE THE VALUATION WAS DONE ON THE BASIS OF ESTIMATION THERE FORE DETAILED EXPLANATION REGARDING THE DIFFERENCE WILL BE SUBMIT TED AFTER EXAMINING THE VALUATION REPORT IN DETAIL. IN VIEW OF THE ABOVE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TO ASC ERTAIN THE EXACT QUANTUM OF SUCH INVESTMENT IN CONSTRUCTION OF ABOVE PROJECT, M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 35 REFERENCE WAS MADE TO DVO, BHOPAL VIDE LETTER DATED 22.12.2015 BY THIS OFFICE AND THE VALUATION REPORT WAS SUBMITTED BY HIM ON 14.03.2016. AS PER THE LD. A.O THERE WERE DIFFEREN CES IN THE VALUE OF CONSTRUCTION OF BUILDING AS VALUED BY DVO AND AS PER THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE YEAR WISE DIFFEREN CE IN INVESTMENT IN CONSTRUCTION OF BUILDING AS PER THE DVO REPORT I S AS UNDER:- F.Y A.Y DECLARED BY THE ASSESSEE EXAMINED BY VALUATION CELL 2010 - 11 2011 - 12 2,05,72,030/ - 3,05,54,517/ - 2011 - 12 2012 - 13 5,52,89,531/ - 8,26,38,090/ - 2012 - 13 2013 - 14 11,19,18,795/ - 16,76,76,950/ - 2013 - 14 2014 - 15 15,05,33,868/ - 22,43,66,824/ - 2014 - 15 2015 - 16 15,91,35,825/ - 23,52,43,301/ - 2015 - 16 (31.01.2016) 2016 - 17 6,20,29,565/ - 9,25,62,317/ - TOTAL 55,95,79,614/ - 83,30,42,000/ - 36. COPY OF THE VALUATION REPORT SUPPLIED TO THE AS SESSEE FOR COMMENTS. THE ASSESSEE WAS ALSO REQUIRED TO SHOW C AUSE AS TO WHY THE DIFFERENCE SHOULD NOT BE ADDED AS UNDISCLOS ED INVESTMENT IN THE HANDS OF ASSESSEE FOR RELEVANT ASSESSMENT YE ARS. 37. THE ASSESSEE GAVE DETAILED REPLY CHALLENGING TH E CORRECTNESS OF THE DEPARTMENTAL VALUATION REPORT AND CRUX OF THE A SSESSEES SUBMISSION CAN BE SUMMARISED AS FOLLOWS:- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 36 THUS AS THE COST THE DIFFERENCE BETWEEN THE COST O F CONSTRUCTION INCURRED BY THE ASSESSEE AND COST OF CONSTRUCTION ESTIMATED BY THE VALUATION OFFICER IS ON ACCOUNT OF ADOPTING THE CONSTRUCTED AREA AND STAGE OF COMPLETION WITHOUT ANY MEANING FULL PHYSICAL VERIFICATION, CON SIDERING RATES OF DELHI PLINTH AREA RATE WHICH IS UNIVERSALLY ACCEPTED TO B E A HIGHER RATE AND BY ADOPTING A FORMULA WHICH AS DETAILED ABOVE IS AN AR BITRARY FORMULA DEVISED SIMPLY TO ENHANCE THE ESTIMATED COST, AND A DOPTING OF UNSUBSTANTIATED RATES THE DIFFERENCE IS REQUESTED T O BE IGNORED AND THE VALUE SHOWN BY THE ASSESSEE BE ACCEPTED. FURTHER IN CASE THE VALUE ESTIMATED BY THE DVO IS A DOPTED THAN CONSEQUENTIAL DEDUCTION OF THE SAME MAY KINDLY BE A LLOWED FROM THE RETURNED INCOME AND THUS THE ADDITION WILL BECOME R EVENUE NEUTRAL. IT MAY BE MENTIONED THAT THE ADDITION CAN BE MADE ONLY U/S 69B WHICH DOES NOT HAVE ANY PROVISION FOR NOT ALLOWING CONSEQUENTI AL ADJUSTMENT TO THE INCOME. PROVISIONS OF SECTION 69C HAVE NO APPLICABILITY IN THE CASE AS THE ASSESSEE IS NOT FOUND TO HAVE INCURRED ANY EXPENDITURE AND T HE DIFFERENCE IS ONLY ON ACCOUNT OF DIFFERENCE IN ESTIMATE. AS REGARDS, THE VALUATION DONE BY THE REGISTERED VA LUER DURING SEARCH PROCEEDINGS, THE ASSESSEE HAS FILED THE WRITTEN SUB MISSION AS UNDER:- THE VALUATION REPORT PREPARED BY THE VALUER AT THE INSTRUCTIONS OF THE DEPARTMENT IS A VAGUE REPORT WHICH HAS BEEN PRE PARED ON A ROUGH ESTIMATED BASIS. AS PER THE BOOKS OF ACCOUNT S OF THE ASSESSEE THE TOTAL DIRECT EXPENSES INCURRED ON THE PROJECT (EXCLUDING COST OF LAND) IS RS.33,12,15,143/- AS PER DETAILS B ELOW: F.Y. 2010-11 RS.2,05,72,030/- F.Y. 2011-12 RS.5,52,53,932/- F.Y 2012-13 RS.10,48,55,314/- F.Y 2013-14 RS.15,05,33,867/- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 37 TOTAL RS.33,12,15,143/- IT MAY BE MENTIONED THAT AT THE TIME OF SEARCH AND EVEN TODAY THE PROJECT IS UNDER CONSTRUCTION. VALUATION OF THE COST INCUR RED ON THE PROJECT DURING THE COURSE OF ITS IMPLEMENTATION IS NOT JUSTIFIED A S EACH FLAT, EACH ROOM AND EACH SEGMENT OF THE PROJECT IS IN DIFFERENCE STAGE OF CONSTRUCTION/COMPLETION AND APPLYING OF ANY COMMON FORMULA/RATE TO DETERMINE THE COST WOULD NOT BE ABLE TO ASCERTAIN T HE ACTUAL COST INCURRED. ACCORDINGLY IT IS REQUESTED THAT THE VALUERS REPORT MAY KINDLY BE IGNORED. 38. THE REPLY OF THE ASSESSEE WAS CONSIDERED BY THE LD. A.O WHICH WAS NOT FOUND ACCEPTABLE BASED ON THE FOLLOWING REA SONS; I. THE REFERENCE MADE ON THE DVO IS AS PER THE LAW . FURTHER, THE DVO IS THE GOVT. AUTHORITY TO DETERMIN E THE COST OF INVESTMENT. THE METHOD FOLLOWED BY THE DVO FOR VALUATION IS THE MOST SCIENTIFIC METHOD AND THE VAL UATION HAS BEEN DONE BY HIM AS PER THE PRESCRIBED PROCEDUR E & RATES LAID DOWN BY CENTRAL PUBLIC WORKS DEPARTMENT. II. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NOT SUBMITTED ANY MATERIAL EVIDENCE, W HICH SUBSTANTIATE HIS CLAIM. THE ASSESSEE HAS ALSO NOT SUBMITTED CONSTRUCTION ACCOUNT BEFORE THE ASSESSING OFFICER. III. THE YEAR WISE DIFFERENCE IN INVESTMENT IN CONS TRUCTION OF BUILDING AS PER THE DVOS REPORT AND AS DECLARED BY THE ASSESSEE IS AS UNDER:- A.Y DECLARED BY THE ASSESSEE EXAMINED BY VALUATION CELL DIFFERENCE (IN RS.) M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 38 2011 - 12 2,05,72,030/ - 3,05,54,517/ - 99,82,487/ - 2012 - 13 5,52,89,531/ - 8,26,38,090/ - 2,73,48,559/ - 2013 - 14 11,19,18,795/ - 16,76,76,950/ - 5,57,58, 155/ - 2014 - 15 15,05,33,868/ - 22,43,66,824/ - 7,38,32,956/ - 2015 - 16 15,91,35,825/ - 23,52,43,301/ - 7,61,07,476/ - 2016 - 17 6,20,29,565/ - 9,25,62,317/ - 3,05,32,752/ - 55,95,79,614/ - 83,30,42,000/ - 27,35,62,385/ - 39. FURTHER THE LD. A.O AFTER GIVING SET OFF OF ADD ITION MADE FOR THE UNDISCLOSED INCOME OF RS. 25,00,000/- AND RS.3,00,0 0,000/- FOR ASSESSMENT YEARS 2013-14 AND 2014-15 MADE ON THE BA SIS OF STATEMENT GIVEN U/S 132(4) OF THE ACT MADE ADDITION FOR UNDISCLOSED INVESTMENT U/S 69B OF THE ACT OBSERVING AS FOLLOWS: - THUS, AFTER CONSIDERING THE EVIDENCES PLACED ON RE CORD AND VALUATION REPORT SUBMITTED BY THE DVO, BHOPAL AND THE NON-SUBMISSION OF SATISFACTORY EXPLANATION ON THE SOURCE OF SUCH INVE STMENTS AND FOLLOWING THE CITED CASES (SUPRA), I AM TO HOLD THAT THE INVESTMENT IN CONSTRUCTION OF THE PROJECT SIGNATURE RESIDENCY, NEAR JK HOSPITAL, KOLAR ROAD, BHOPAL, WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT OF AS SESSEE IS TREATED AS UNDISCLOSED INVESTMENT AND DEEMED INCOME FROM UNDISCLOSED SOURCES U/S 69B OF THE ACT. THEREFORE THE AMOUNT SHOWN IN BELO W MENTIONED TABLE IS TREATED AS UNDISCLOSED INVESTMENT U/S 69B OF THE AC T FOR A.Y 2008-09 TO 2014-15:- A.Y UNDISCLOSED INVESTMENT (IN RS.) 2011-12 99,82,487/- 2012-13 2,73,48,559/- 2013-14 5,57,58,155/- 2014-15 7,38,32,956/- TOTAL 16,69,22,157/- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 39 HOWEVER, SINCE ADDITIONS ON ACCOUNT OF UNDISCLOSED INCOME OF RS.25,00,00/- AND RS.3,00,00,000/- FOR A.Y 2013-14 AND A.Y 2014-15 RESPECTIVELY, HAS ALREADY BEEN MADE ON ACCOUNT OF A DMISSION OF UNDISCLOSED INCOME DURING SEARCH, IN THE EARLIER PA RA OF THIS ORDER, THE SET OFF OF THESE ADDITIONS ARE GIVEN IN RESPECT OF ADDI TIONS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF THE PROJE CT AT RS.5,57,58,155/- AND RS.7,38,32,956/- FOR A.Y 2013-14 AND 2014-15 RE SPECTIVELY. THUS, THE NET ADDITION ON ACCOUNT OF UNEXPLAINED INVESTME NT IN CONSTRUCTION OF THE PROJECT FOR A.Y 2013-14 AND 2014-15 WORKS OUT TO RS.5,32,58,155/- (RS.5,57,58,155/- (-) RS.25,00,000/-) AND RS.4,38,3 2,956/- (RS.7,38,32,956/- (-) RS.3,00,00,000/-).THEREFORE T HE AMOUNT SHOWN IN BELOW MENTIONED TABLE IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B OF THE AC T FOR A.Y 2011-12 TO 2014-15. A.Y UNDISCLOSED INVESTMENT (IN RS.) 2011-12 99,82,487/- 2012-13 2,73,48,559/- 2013-14 5,32,58,155/- 2014-15 4,38,32,956/- TOTAL 13,44,22,157/- 40. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). DURING THE COURSE OF HEARING BEFORE LD. CIT(A) ASSESSEE S UBMITTED AS UNDER; 1.THAT THE ASSESSEE HAD COMMENCED CONSTRUCTION OF A PROJECT IN THE NAME OF SIGNATURE RESIDENCY STARTING FROM F.Y 2010-11 WH ICH WAS UNDER CONSTRUCTION EVEN DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. THE EXPENSES INCURRED ON THE PROJECT WERE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS, WERE SUPPORTED BY PROPER SUPPORTING EV IDENCES AND FORMED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 40 PART OF THE SALES/WIP SHOWN BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN MAINTAINING REGULAR BOOK S OF ACCOUNTS WHICH WERE DULY AUDITED AND THE AUDIT REPORT ALONG WITH A UDITED FINANCIAL STATEMENTS WERE DULY FURNISHED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BOOKS OF ACCOUNTS AND VOUCH ERS WERE PRODUCED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCE EDINGS WHICH IS DULY CONFIRMED BY THE AO IN PARA 2 OF THE ASSESSMENT ORD ER AND NO DEFICIENCY HAVE BEEN NOTICED BY THE AO. 2. IT WAS FURTHER SUBMITTED THAT THE DETAILED OBJEC TIONS WERE RAISED BEFORE THE AO WHICH HAVE NOT BEEN CONSIDERED. A SPECIFIC R EQUEST WAS MADE TO THE AO TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE DVO ON THE VALUATION REPORT SUBMITTED BY HIM BUT TH E REQUEST WAS IGNORED AND NO OPPORTUNITY OF CROSS EXAMINATION WAS PROVIDED. THUS, IT WAS SUBMITTED THAT THE RATES ADOPTED FOR V ALUATION MADE BY THE VALUER IN OTHER CASES ARE MUCH LESS THAN THE VALUAT ION MADE BY DVO. THE DVO HAS NOT GIVEN ANY DETAILS AS TO HOW THE RATES A DOPTED BY HIM WERE ARRIVED. THE OBJECTION OF THE ASSESSEE MADE BEFORE THE AO REQUESTING HIM TO DIRECT THE DVO TO PROVIDE THE DETAILS OF THE CAL CULATIONS ADOPTED BY HIM WAS IGNORED. THE RATES FIXED BY COLLECTOR ARE FIXED FOR THE COLLECTION OF STAMP DUTY AND ARE CONSIDERED TO BE VERY NEAR TO TH E ACTUAL PRICES/COST AND ARE ADOPTED AS CONCLUSIVE FOR THE PURPOSE OF AP PLICATION OF SECTION 50C, SECTION 56, AND SECTION 43CA OF THE ACT. THE R ATES OF CONSTRUCTED AREA FOR F.Y 2013-14 FIXED BY THE COLLECTOR WAS RS. 1100/- PER SQUARE FEET AS AGAINST RS. 1819 CONSIDERED BY THE DVO/AO FOR UN FINISHED BUILDING. IT WAS FURTHER SUBMITTED THAT THE ADOPTION OF CPWD RAT ES OF DELHI CANNOT BE ADOPTED IN BHOPAL WHICH IS MUCH CHEAPER. THE DVO HA S ADOPTED THE RATE OF RS.9913/- PER SQ. M. FOR SLIT AREA AND RS.18075/ - PER SQ. M. FOR EACH FLOOR. THE SECURITY ROOM HAS BEEN VALUED @ 15073 PE R SQ. M. THUS, IT WAS SUBMITTED THAT THE RATES ADOPTED BY THE LD. DVO WAS UNREALISTIC AND VERY HIGH. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 41 3.AFTER CONSIDERING THE VARIOUS OBJECTIONS RAISED B Y THE ASSESSEE AND ANALYSING THE DIFFERENT CASE LAWS, THE LD. CIT(A) A LLOWED THE ASSESSEES APPEAL. 41. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 42. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED AND STRONGLY SUPPORTED THE FINDING OF LD. A.O CONTENDIN G THAT THE IMPUGNED ADDITION FOR UNDISCLOSED INVESTMENT HAS BE EN RIGHTLY MADE BY THE LD. A.O ON THE BASIS OF DEPARTMENTAL VA LUATION OFFICER WHO HAS RIGHTLY CARRIED OUT THE VALUATION AS PER TH E GUIDELINES PROVIDED UNDER RESPECTIVE RULES. 43. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DETA ILED FINDING OF LD. CIT(A) AND ALSO MADE FOLLOWING WRITTEN SUBMISSI ON:- IN THE COURSE OF THE ASSESSMENT PROCEEDINGS ALL THE INFORMATION AS REQUIRED BY THE AO FROM TIME TO TIME WAS FURNISHED. THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE, BUILDERS AND DEVELOPER S. THE ASSESSEE DURING THE RELEVANT PERIOD WAS DEVELOPING A RESIDENTIAL CO MPLEX IN THE NAME OF SIGNATURE RESIDENCY. THE EXPENSE INCURRED ON THE PU RCHASE OF LAND AND CONSTRUCTION EXPENSES ON THE PROJECT WERE THE BUSIN ESS EXPENSES OF THE ASSESSEE. THE ASSESSEE HAD MAINTAINED REGULAR BOOKS OF ACCOUNT IN WHICH ALL THE EXPENSES INCLUDING THE COST OF CONSTRUCTION WERE DULY RECORDED. THESE BOOKS WERE PRESENTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND WERE DULY CHECKED BY HIM AND NO DEFICIENCY WAS FOUND IN THE BOOKS OF ACCOUNT OR THE RECORDS MA INTAINED. NO EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH OR AFTER WORD S DURING POST SEARCH M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 42 ENQUIRY OR PRE ASSESSMENT ENQUIRIES TO SUGGEST THAT THE ASSESSEE HAS INCURRED ANY UNRECORDED EXPENSE. 2. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS A REFERENCE WAS MADE TO THE DVO TO ESTIMATE THE COST OF CONSTRUCTION OF THE PROJECT WHO GAVE A HIGHLY INFLATED VALUATION TAKING INTO ACCOUNT UNSUB STANTIATED RATES AND ADOPTING VAGUE PROCEDURES. THE ASSESSEE RAISED VARI OUS OBJECTIONS TO THE VALUATION MADE (PG.138 OF PB). IT WAS SUBMITTED THA T THE DVO HAS VALUED THE PROPERTY ON THE BASIS OF RATES OF DELHI PLINTH AREA WITHOUT THE MEANINGFUL PHYSICAL VERIFICATION OF THE PROPERTY. T HE ASSESSEE ALSO DEMANDED AN OPPORTUNITY TO CROSS EXAMINE THE DVO (P G.195(N) OF PB). THE AO HOWEVER, DISREGARDED THE OBJECTIONS OF THE A SSESSEE WITHOUT MENTIONING ANY REASONS TO DO SO AND ALSO IGNORED TH E REQUEST OF THE ASSESSEE TO PROVIDE OPPORTUNITY TO CROSS EXAMINE TH E DVO AND MADE ADDITIONS OF THE DIFFERENCE. ARGUMENTS IT IS HUMBLY SUBMITTED THAT NO INCRIMINATING MATERI AL WAS FOUND DURING THE COURSE OF THE SEARCH TO SHOW THAT THE ASSESSEE HAS INCURRED ANY EXTRA EXPENDITURE ON THE CONSTRUCTION OF BUILDINGS. NORMALLY A BUILDER WOULD CONSTRUCT THE BUILDING INCURRING THE MINIMUM EXPENDITURE. NO BUILDER WOULD LIKE TO SHOW A LESSER COST IN THE CON STRUCTION SINCE THE TAXABLE PROFIT WOULD BE MORE IF THE COST IS REDUCED . DURING THE COURSE OF THE VALUATION, THE BUILDING WAS INCOMPLETE AND THE EXACT VALUATION COULD NOT BE ASCERTAINED. THE DVO HAS VALUED THE UN FINISHED BUILDING AT AN EXORBITANT RATE WHICH IS APPROX. DOUBLE VALUE AS HAS BEEN DONE BY THE DEPARTMENTAL VALUER IN OTHER CASES. THE OPPORTU NITY FOR CROSS EXAMINATION OF THE DVO WAS NOT GRANTED BY THE LD. A .O. WHICH WOULD HAVE BROUGHT THE NECESSARY EVIDENCE ABOUT THE EXORB ITANT VALUATION. EVEN TODAY THE COMPLEXES ARE CONSTRUCTED AT THE VAL UE OF ABOUT 1500 M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 43 PER SQUARE FEET. THE COLLECTORS GUIDELINE PRICE IS THE BEST NORM FOR DETERMINING THE VALUE. FURTHER THE ADDITIONS MADE ARE ILLEGAL AND INVALID ON THE FOLLOWING GROUNDS: A. THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUN TS WHICH ARE NOT FOUND TO BE INCOMPLETE OR UNRELIABLE. THE BOOKS OF ACCOUNTS ARE NOT REJECTED. ACCORDINGLY ADDITION CANNOT BE MADE ON TH E BASIS OF DVO REPORT. B. EVEN IF RELIANCE WAS PLACED ON THE REPORT OF DVO, S ET OFF OF THE CORRESPONDING EXPENSES SHOULD HAVE BEEN GIVEN WHICH WOULD HAVE RESULTED IN NIL ADDITION. C. NO ADDITIONS COULD HAVE BEEN MADE WITHOUT CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE AND WITHOUT PROVIDING T HE ASSESSEE WITH AN OPPORTUNITY TO CROSS EXAMINE THE DVO SPECIALLY W HEN THE ASSESSEE HAS MADE A SPECIFIC REQUEST FOR THE SAME. D. NO EXACT VALUATION COULD HAVE BEEN DONE TILL THE CO MPLETION OF THE PROJECT. FURTHER, THE DVO HAS NOT GIVEN THE VALUATI ON ON ACTUAL DETAILED MEASUREMENT BASIS. E. VALUATION SHOULD HAVE BEEN DONE TAKING THE LOCAL PR ICES IN CONSIDERATION IN PLACE OF DELHI RATES WHICH ARE UNI VERSALLY ACCEPTED TO BE ON A HIGHER SIDE. (I) REFERENCE IN THIS REGARDS MAY BE MADE TO THE DE CISION OF THE DELHI HIGH COURT IN THE CASE OF CIT V AMBIENCE HOTEL & RESORTS LTD (2012) 83 CCH 0021 (DELHI HC). (II) REFERENCE MAY ALSO BE MADE TO THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF K.K.SESHAIYER V C IT (2000) 246 ITR 351. (III) CIT V SURAJ TOWERS (2015) 230 TAXMAN 306(KARN ATAKA HC) WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT INCOME FROM UNDISCLOSED SOURCESADDITION UNDER S. 69B UNDISCLOSED INVESTMENT IN PROPERTY VIS-A-VIS REPORT OF DVOPRIMARY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 44 BURDEN OF PROOF TO PROVE UNDERSTATEMENT OR CONCEALM ENT OF INCOME IS ON THE REVENUEOPINION OF THE DVO, PER SE, IS NOT A N INFORMATION AND CANNOT BE RELIED UPON WITHOUT THE BOOKS OF ACCO UNT BEING REJECTEDMOREOVER, NO EVIDENCE MUCH LESS INCRIMINAT ING EVIDENCE WAS FOUND AS A RESULT OF THE SEARCH TO SUGGEST THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE CONSIDERATI ON MENTIONED IN THE REGISTERED PURCHASE DEEDADDITION NOT JUSTIF IED (IV) IN THE CASE OF CIT VS. MEERUT CEMENT CO.(P.) LTD. (2006) 202 CTR (ALL.) 506 T HE HONBLE ALLAHABAD HIGH COURT HELD THAT THE REPOR T OF THE DVO SUFFERED FROM MATERIAL DEFECTS AND THE R EVENUE HAS NOT POINTED OUT A SINGLE INSTANCE OF UNRECORDED EXPENDI TURE, ADDITION UNDER SECTION 69B MADE ONLY ON THE BASIS OF DVOS REPORT COULD NOT BE SUSTAINED. THE ADDITION IS MADE HOLDING THE DIFFERENCE AS UNEX PLAINED INVESTMENT U/S 69B OF THE ACT. THE LD. A.O. RELIED ON THE VARIOUS DECISIONS WHICH ARE NOT APPLICABLE IN THE INSTANT C ASE AT PAGE 31 OF THE ASSESSMENT ORDER. IN THIS REGARDS IT MAY BE MENTIONED THAT IN CASE TH E AO HAS FORMED AN OPINION THAT THE ASSESSEE HAS INCURRED SOME UNAC COUNTED EXPENSES ON THE CONSTRUCTION HE WAS DUTY BOUND TO A DJUST THE CONSTRUCTION EXPENSES AND SHOULD HAVE INCREASED THE COST OF CONSTRUCTION BY A SIMILAR AMOUNT WHICH WOULD NULLIF Y THE EFFECT OF ADDITION, IF ANY. THE ASSESSEE WOULD BE ENTITLED TO CLAIM ADJUSTMENT OF EXPENSES, IF THE ADDITION IS MADE ON THE COUNT THAT THE APPELLANT HAD SHOWN LOWER AMOUNT OF COST OF CONSTRUCTION. IT WOUL D ULTIMATELY RESULT INTO SQUARING OFF THE WHOLE ADDITION SINCE ON ONE S IDE THE ADDITION IS MADE AND ON THE OTHER SIDE THE DEDUCTION IS TO BE A LLOWED AS BUSINESS EXPENDITURE. THUS, THE WHOLE EXERCISE WOULD BE REVE NUE NEUTRAL. IN THIS CONNECTION, ATTENTION IS DRAWN TO THE FOLLOWIN G JUDGMENTS M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 45 ( V) CIT V. STAR BUILDERS (2007)294 ITR 338 (GUJ.)WHE REIN IN PARA 4 OF THE ORDER IT WAS HELD BY THE COURT THAT: ASSUMING BUT NOT ACCEPTING THAT SOME UNEXPLAINED IN COME HAS BEEN INVESTED IN THE CONSTRUCTION, THE FACT REMAINS THAT THE BUSINESS OF THE ASSESSEE IS CONSTRUCTION. IF WE ADD ON ACCOU NT OF UNEXPLAINED INCOME IN THE INVESTMENT, THAT WILL GIVE RISE TO TH E COST OF THE CONSTRUCTION AND THE RESULT WILL REMAIN THE SAME I. E. 'ZERO'. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSES SEE AND THE PAPERS FILED DURING THE COURSE OF THE APPEAL THE LD . CIT(A) ALLOWED THE APPEAL. IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED THAT T HE ORDER OF THE LD. CIT(A) IS CORRECT IN DELETING THE SAID ADDITION. T HUS, THE ADDITION DELETED BY LD. CIT(A) IS CORRECT AND MAY PLEASE BE UPHELD. 44. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE ORD ERS OF LD. CIT(A) AS WELL AS THE SUBMISSIONS AND VARIOUS CASE LAWS RE LIED AND REFERRED TO BY LD. COUNSEL FOR THE ASSESSEE. REVEN UES SOLE GRIEVANCE THROUGH GROUND NO.1 RAISED IN ITS APPEAL FOR ASSESSMENT YEAR 2012-13 TO 2014-15 IS WITH REGARD TO THE FINDI NG OF LD. CIT(A) DELETING THE ADDITION ON ACCOUNT OF UNDISCLOSED INV ESTMENT U/S 69B OF THE ACT WHICH WAS MADE BY THE LD. A.O TOWARDS T HE DIFFERENCE IN COST OF INVESTMENT IN THE PROJECTS SIGNATURE RESIDE NCY SHOWN IN THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 46 BOOKS OF ACCOUNTS VIS-A-VIS ESTIMATED BY THE DEPART MENTAL VALUATION OFFICER CALCULATED AT RS.2,73,48,559/-,RS .5,32,58,155/- AND RS.4,38,32,956/- FOR ASSESSMENT YEARS 2012-13, 2013-14 & 2014-15 RESPECTIVELY. 45. WE OBSERVE THAT DURING THE COURSE OF SEARCH ONE OF THE PROJECT NAMELY SIGNATURE RESIDENCY SITUATED NEAR JK HOSPITA L, KOLAR ROAD, BHOPAL WAS VALUED BY THE REGISTERED VALUER ON 30.01 .AT RS.50.46 CRORES. THIS FACT WAS CONFRONTED BEFORE LD. A.O BY SHRI VIPIN CHOUHAN, PARTNER OF THE FIRM WHO STATED THAT THE AC TUAL COST INCURRED IN THE PROJECT HAS BEEN SHOWN IN THE BOOKS OF THE FIRM AT APPROX. RS. 29.08 CRORES. AS REGARDS THE DIFFERENC E HE STATED THAT SINCE THE VALUATION WAS DONE ON THE BASIS OF ESTIMA TION, THE DETAILED EXPLANATION REGARDING DIFFERENCE WILL BE S UBMITTED AFTER EXAMINING THE VALUATION REPORT IN DETAIL. THIS PRO JECT WHICH WAS COMMENCED DURING THE FINANCIAL YEAR 2010-11 WAS UND ER CONSTRUCTION DURING FINANCIAL YEAR 2015-16. AS PER THE BOOKS OF ACCOUNTS TOTAL COST OF CONSTRUCTION DECLARED IN THE BOOKS OF ACCOUNTS FOR THE PERIOD FINANCIAL YEAR 2010-11 TO F INANCIAL YEAR 2015-16 (UP TO 31.01.2016) WAS RECORDED AT RS.55,94 ,79,613/-, WHEREAS SUBSEQUENT TO THE REFERENCE TO THE DEPARTME NTAL VALUATION M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 47 OFFICER VIDE LETTER DATED 22.12.2015 THE PROPERTY W AS INSPECTED ON 4.02.2016. THIS PROJECT IS SPREAD OVER AN AREA OF 6.6 ACRE COMPRISING OF 96 MIG FLATS, 336 HIG FLATS AND CLUB HOUSE. WITHIN FEW HOURS OF INSPECTION BY THE DEPARTMENTAL VALUATI ON OFFICER ON 4.02.2016, THE DVO SUBMITTED THE REPORT ON 14.3.201 6 ESTIMATING THE VALUATION OF THE COST OF CONSTRUCTION IN THE PR OJECT SIGNATURE RESIDENCY FOR THE FINANCIAL YEAR 2010-11 TO FINANCI AL YEAR 2015-16 (UP TO 31.1.2016) AT RS.83,30,42,000/-. BEFORE THE ASSESSMENT WAS COMPLETED ON 23.03.2016 THE ASSESSEE WAS CONFRONTED WITH THE VALUATION REPORT DATED 14.3.2016 TO WHICH THE DETAI LED REPLY WAS FILED ON 17.3.2016 BY THE ASSESSEE POINTING OUT VAR IOUS ANOMALIES IN THE VALUATION REPORT ALONG WITH CHALLENGING THE METHOD OF VALUATION I.E COST INCREASING METHOD ADOPTED BY THE DVO AND ALSO CHALLENGED THE APPLICATION OF THE DELHI PLINTH AREA RATE. THE SUBMISSION MADE BY THE ASSESSEE WERE NOT SUFFICIENT TO CONVINCE THE LD. A.O AND HE MADE THE ADDITION FOR UNDISCLOSE D INVESTMENT U/S 69B OF THE ACT. HOWEVER THE LD. A.O DID NOT RE JECTED THE BOOKS OF ACCOUNTS AND ALSO FAILED TO BRING ON RECORD ANY POSITIVE MATERIAL OR COGENT EVIDENCE TO ESTABLISH THAT THE ASSESSEE H AS MADE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 48 INVESTMENT OUT OF BOOKS I.E. OVER AND ABOVE THE AMO UNT INVESTED AS SHOWN IN THE BOOKS. 46. THE ISSUE BEFORE US CAN BE SUMMARISED IN A QUES TION THAT WHETHER THE LD. A.O WAS JUSTIFIED TO MAKE ADDITION FOR UNDISCLOSED INVESTMENT IN CONSTRUCTION OF BUILDING PROJECTS SOL ELY ON THE BASIS OF DEPARTMENTAL VALUATION REPORT WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND WITHOUT BRINING ON RECORD ANY MATERIAL EVIDENCE TO PROVE SUCH UNACCOUNTED INVESTMENTS IN THE CASE OF T HE ASSESSEE WHO WAS SUBJECTED TO SEARCH U/S 132 OF THE ACT. 47. WE OBSERVE THAT LD. CIT HAS DEALT WITH THE ISSU E IN DETAIL EXAMINING THE FACTS AND ALSO REFERRING TO VARIOUS J UDGMENTS SQUARELY APPLICABLE ON THE INSTANT ISSUE RAISED BEF ORE US BY THE REVENUE AUTHORITIES. THE RELEVANT EXTRACT OF LD. C IT(A) FINDING IS REPRODUCED BELOW:- 5.8 AS FAR AS MERIT OF THIS ISSUE IS CONCERNED AO MADE ADDITION OF RS. 99,82,487/-, RS. 2,73,48,559/-, RS. 5,32,58,155 /- AND RS. 4,38,32,956/- IN THE YEAR A.Y 2011-12 TO 2014-15 TOWARDS DIFFERENCE IN COST OF INVESTMENT IN THE PROJECT 'SIGNATURE RES IDENCY' SHOWN IN THE BOOKS VIS-A-VIS ESTIMATED BY OVA. THIS IS AN UNDISPUTED FACT THAT THE IMPUNGED ADDITION WAS MADE SOLELY ON THE BASIS OF V ALUATION REPORT AND A.O. DID NOT BRING ANY POSITIVE MATERIAL OR COG ENT EVIDENCE TO ESTABLISH THAT ACTUALLY ASSESSEE MADE INVESTMENT OU T OF BOOKS I.E. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 49 OVER AND ABOVE THE AMOUNT OF INVESTMENT SHOWN IN TH E BOOKS. THIS IS SETTLED LAW THAT ADDITION MADE SOLELY ON THE BASIS OF VALUATION REPORT IS NOT SUSTAINABLE IN LAW. THIS PROPOSITION FINDS SUPPORT FROM THE FOLLOWING CASE LAWS:- (1) CIT VS. CHOUHAN RESORTS359 ITR 394 (P&H )- SECTION 698 OF THE INCOME-TAX ACT, 1961 - UNDISCLOSED INVESTMENTS - ASSESSMENT YEAR 2007-08 - NO ADDITION COULD BE MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION OF BUILDING ON BASIS OF REPORT OF CVO WITHOUT BOOKS OF ACCOUNT BEING REJECTED, WHEREI N EVERY EXPENDITURE RELATING TO CONSTRUCTION WAS RECORDED (2) FAMILY OF SP 5.5.5. P- SUBRAMANIUM CHETTIAR VS. ITQ 372 ITR 203(MAD}- SECTION 698 OF THE INCOME-TAX ACT, 1961 - UNDISCLOSED INVESTMENTS (VALUATION BY OVO) - ASSESSMENT YEAR 1996-97 - WHETHER PRIMARY BURDEN TO PROVE UNDER STATEMENT OR CONCEALMENT OF I NCOME IS ON REVENUE AND IT IS ONLY WHEN SUCH BURDEN IS DISCHARG ED THAT IT WOULD BE PERMISSIBLE TO RELY UPON VALUATION GIVEN BY DIST RICT VALUATION OFFICER (OVO) - HELD, YES - WHETHER OPINION OF CVO, PER SE, IS NOT AN INFORMATION AND CANNOT BE RELIED UPON WITHOUT BOOKS OF ACCOUNT BEING REJECTED - HELD, YES - WHETHER IN INSTANT CAS E, SINCE MATTER WAS REFERRED TO OVO WITHOUT REJECTING BOOKS OF ACCO UNT OF ASSESSEE, ASSESSING OFFICER WAS NOT ENTITLED TO RESORT TO SEC TION 698 - HELD, YES [PARAS 8 AND 9] 4. EVEN THOUGH THIS APPEAL WAS ADMITTED ON THE QUES TIONS OF LAW REFERRED TO SUPRA, THE LEARNED COUNSEL ON EITHER SIDE FAIRLY CO NCEDE THAT THE CORE ISSUE TO BE DETERMINED IN THIS APPEAL IS 'WHETHER THE ASSESSING OFFICER IS ENTITLED TO RESORT TO SECTION 698 OF THE ACT AND, CONSEQUENTLY, REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER, WHEN THE BOOKS OF ACCOUNT WERE N OT REJECTED?' 5. THE MAIN PLEA TAKEN BY THE LEARNED COUNSEL FOR T HE ASSESSEE IS THAT THE ONUS PROBANDI LIES ON THE ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSEE HAS M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 50 UNDERSTATED OR CONCEALED THE ACTUAL COST OF CONSTRU CTION AND WITHOUT DISCHARGING THE ONUS, THE ASSESSING OFFICER IS NOT EMPOWERED TO RELY UPON THE VALUATION GIVEN BY THE DEPARTMENTAL VALUATION OFFICER, WHEN THE BOO KS OF ACCOUNT WERE NEVER REJECTED. 6. THE LEARNED STANDING COUNSEL FOR THE REVENUE IS NOT DISPUTING THE FACT THAT THE BOOKS OF ACCOUNT FURNISHED BY THE ASSESSEE WERE NEV ER REJECTED BY THE DEPARTMENT. 7. IN THE CASE ON HAND, IT IS BEYOND ANY CAVIL THAT THE BOOKS OF ACCOUNT FURNI SHED BY THE ASSESSEE WERE NEVER REJECTED. NO EXPLANATION WAS CALLED FOR FROM THE ASSESSEE STATING THAT THERE WAS CONCEALMENT OR UNDE RSTATEMENT OF AMOUNT IN THE BOOKS OF ACCOUNT. THE INITIAL BURDEN CAST ON THE DE PARTMENT TO PROVE THAT THERE WAS UNDERSTATEMENT OR CONCEALMENT OF INCOME HAS NOT BEEN DISCHARGED AND, THEREFORE, THE ASSESSING OFFICER IS NOT EMPOWERED TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER OR RELY ON SUCH REPO RT. 8. 'THE ABOVE SAID VIEW OF THIS COURT IS FORTIFIED BY THE FOLLOWING DECISIONS: (I) IN SARQAM CINEMA V. CIT {2010/328 ITR 513[2011]197 TAXMAN 203, THE SUPREME COURT HAS HELD AS UNDER (PAGE 514) : 'IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL DE CIDED THE MATTER RIGHTLY IN FAVOUR OF THE ASSESSEE INASMUCH AS THE TRIBUNAL CA ME TO THE CONCLUSION THAT THE ASSESSING AUTHORITY COULD NOT HAVE REFERRED TH E MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) WITHOUT THE B OOKS OF ACCOUNT BEING REJECTED. IN THE PRESENT CASE, A CATEGORICAL FINDI NG IS RECORDED BY THE TRIBUNAL THAT THE BOOKS WERE NEVER REJECTED. THIS ASPECT H AS NOT BEEN CONSIDERED BY THE HIGH COURT. IN THE CIRCUMSTANCES, RELIANCE PLA CED ON THE REPORT OF THE OVA WAS MISCONCEIVED.' (EMPHASIS SUPPLIED) (II) FOLLOWING THE ABOVE DECISION OF THE SUPREME C OURT, A DIVISION BENCH OF THE DELHI HIGH COURT IN CIT V. 8AJRANG LAL 8ANSAL [201 11335 ITR 572/200 TAXMAN 188 (MAQ.}/12 TAXMANN.COM 88, HAS HELD AS UNDER (HEADNOTE) : M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 51 'THE PRIMARY BURDEN TO PROVE UNDERSTATEMENT OR CONCEALMENT OF INCOME WAS ON THE REVENUE AND IT WAS ONLY WHEN SUCH BURDEN WAS DISCHARGED THAT IT WOULD BE PERMISSIBLE TO RELY UPON THE VALUATION GIVEN BY THE DISTRICT VALUATION OFFICER. THE OPINION OF THE DISTRICT VALU ATION OFFICER, PER SE, WAS NOT AN INFORMATION AND COULD NOT BE RELIED UPON WIT HOUT THE BOOKS OF ACCOUNT BEING REJECTED WHICH HAD NOT BEEN DONE IN THE ASSESSEE'S CASE. MOREOVER, THERE WAS NO EVIDENCE FOUND AS A RESULT OF THE SEARCH TO SUGGEST THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE CO NSIDERATION MENTIONED IN THE RETURN OF THE ASSESSEE.' (EMPHASIS1 SUPPLIED) (III) IN K.K. KESHAIYER V CIT (2000) 246 ITR 351/(2 001)114 TAXMAN 353 (MAD.), A DIVISION BENCH OF THIS COURT HELD AS UNDE R (HEADNOTE) : 'WHEN THE ACTUAL COST OF CONSTRUCTION WAS DULY RECO RDED BY THE ASSESSEE AND THAT COST ALSO WAS SET OUT IN THE AGREEMENT WIT H THE CONTRACTOR, SPECIFYING THE RATES, AND WHICH RATES HAD BEEN ACCE PTED BY THE TRIBUNAL, AND THERE WAS NO FINDING THAT THE BUILDING WAS LARG ER THAN THE ASSESSEE HAD CLAIMED OR HAD BETTER QUALITY OF CONSTRUCTION OR FIXTURES THAN THE ASSESSEE HAD RECORDED IN HIS BOOKS, THE OPINION OF THE VALUE R COULD NOT BE STRAIGHTAWAY SUBSTITUTED FOR THE ACTUAL COST THAT W AS RECORDED IN THE ASSESSEE'S BOOKS. THE TRIBUNAL HAD NOT FOUND THAT T HE BOOKS MAINTAINED BY THE ASSESSEE WERE NOT CREDIBLE. THEREFORE, THE TRIB UNAL WAS NOT RIGHT IN NOT ACCEPTING THE VALUATION OF HOUSE PROPERTY SUBMITTED BY THE ASSESSEE.' 9. IN VIEW OF THE FINDINGS RECORDED ABOVE AND THE L AW ENUNCIATED IN THE DECISIONS REFERRED TO SUPRA, THIS APPEAL DESERVES TO BE ALLOWED. (3) CITVS. KHUSHAL CHAND NIRMAL KUMAR 263 ITR 77 (M .P) SECTION 158BC OF THE INCOME-TAX ACT, 1961 - BLOCK ASSESSMENT IN SEARCH CASES - PROCEDURE FOR _ BLOCK PERIOD 1-4-1986 TO 31-3-1996 - WHETHER NO ADDITIONS COULD BE MADE IN INCOME OF ASSESSEE MEREL Y ON BASIS OF REPORT OBTAINED FROM DEPARTMENTAL VALUATION OFFICER , WHOSE EVIDENCE WAS NOT FOUND DURING COURSE OF SEARCH - HELD, YES - WHE THER, IN INSTANT CASE, SINCE NOTHING WAS FOUND DURING SEARCH IN ASSESSEE'S PREMISES WITH REGARD TO INVESTMENT IN HOUSE, TRIBUNAL WAS JUSTIFIED IN DELE TING ADDITIONS MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION - HELD, YES M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 52 CIT VS. MANOJ JAIN287 ITR 285(DELHI)- SECTION 158BC OF THE INCOME-TAX ACT, 1961 - BLOCK A SSESSMENT IN SEARCH CASES - PROCEDURE FOR - TRIBUNAL HAVING FOUN D AS A FACT THAT SEARCH ON ASSESSEE'S PREMISES DID NOT LEAD TO SEIZU RE OF ANY INCRIMINATING EVIDENCE TO SUGGEST THAT ANY INCOME H AD NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR TAX PURPOSE, DELE TED ADDITION MADE BY ASSESSING OFFICER ON BASIS OF REPORT OF VAL UATION OFFICER IN REGARD TO TWO OF PROPERTIES PURCHASED BY ASSESSEE - WHETHER IN VIEW OF CLEAR FINDING OF FACT BY TRIBUNAL NO SUBSTA NTIAL QUESTION OF LAW AROSE FOR CONSIDERATION - HELD, YES (5) (IT VS. SADHNA GUPTA352 ITR 595 (DELHIJ- SECTION 69B OF THE INCOME-TAX ACT, 1961 - UNDISCLOS ED INVESTMENTS LLNVESTMENT IN PROPERTY] - ASSESSMENT YEAR 2007-08 _ WHETHER, WHERE THERE WAS NO OTHER MATERIAL TO INDICATE THAT ANY EXTRA CONSIDERATION HAD PASSED FROM ASSESSEE, OVER AND AB OVE DECLARED VALUE IN RESPECT OF PURCHASE OF PROPERTY, ADDITION UNDER SECTION 69B COULD BE MADE BASED MERELY ON REPORT OF DISTRICT VALUATION OFFICER - HELD, NO [PARA 4] [IN FAVOUR OF ASSESSEE] BADAR DURREZ AHMED, J. _ THIS APPEAL HAS BEEN FILED BY THE REVENUE UNDER SECTION260A OF THE INCOME T' ACT, 1961 (HEREINAFTER REFERRED TO AS THE SAID ACT) BEING AGGRIEVED BY THE ORDER DATED 30.11.2011 PASSED BY THE INCOME TAX APPELLATE TRIBUNA1 IN ITA NO.5266 (DEL/2010 REL ATING TO ASSESSMENT YEAR ' 200708. IT APPEARS THAT THIS HAD BEEN ADMITTED FOR HEARING BY AN ORDER PASSED BY THIS, COURT ON 30.07.2012. HOWEVER, LEARN ED COUNSEL FOR THE PARTIES POINTED OUT THAT THERE IS SOME TYPOGRAPHICA L ERROR IN THE QUESTION OF LAW WHICH HAS BEEN FRAMED. CONSEQUENTLY, WE REFRAME THE SUBSTANTIAL QUESTION OF LAW AS UNDER:- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 53 'WHETHER THE TRIBUNAL FELL IN ERROR IN NOT PLACING RELIANCE ON THE DISTRICT VALUATION OFFICERS REPORT UNDER SECTION 1 42A AND THEREBY DELETING THE ADDITION OF RS. 2,81,83,000/- MODE BY THE ASSESSING OFFICER UNDER SECTION 69B OF THE INCOME TAX ACT, 19 61? 2. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. T HE [ACTS ORE THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.2,81,83,00 0/- UNDER SECTION 69B OF THE SAD ACT ON THE BASIS OF VALUATION REPORT WHICH HE RECEIVED FROM THE DISTRICT VALUTION OFFICER, (DVO). THIS WAS IN RESP ECT OF PURCHASE OF A PROPERTY BY THE RESPONDENT/ASSESSEE AT 2-B, GAEL LO NE, UNDER HILL ROAD, CIVIL LINES, DELHI. THE ASSESSEE HAD DISCLOSED THAT THE SAID PROPERTY HAD BEEN PURCHASED THROUGH TWO SOLE DEED, DATED 03.05.2 006 FOR A TOTAL SUM OF RS.59,50,000/-. THE PURCHASE 'CONSIDERATION AS P ER THE SOLE DEEDS SIGNIFIED A ROTE OF RS. 8,500/- PER SQ. YD., WHICH APPEARED TO BE LOW TO T HE ASSESSING OFFICE, AND, THEREFORE, HE REFERRED THE M ATTER OF VALUATION TO THE DVO. THE DVO SUBMITTED HIS REPORT AND INDICATED TH AT IN HIS OPINION THE TOTAL FAIR MARKET VALUE OUGHT TO BE RS. 3,41,33,00 0/- AS AGAINST THE DECLARED VALUE OF RS. 59,50,000/-. THE DIFFERENCE OF RS. 2,81,83,000/- WAS ADDED BY THE ASSESSING OFFICER BY INVOKING THE PROV ISIONS OF SECTION 69B OF THE SAID ACT. 3. BEING AGGRIEVED BY THE SAID ADDITION THE RESPOND ENT ASSSSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS) WHO DELETED THE S AID ADDITION AFTER REFERRING TO THE DECISION K.P. VARGHESE V ITO (1981 ) 131 ITR 597/7 TAXMAN 13(SC). THE COMMISSIONER OF INCOME TAX (APP EALS) HELD THAT THE ADDITION HAD BEEN MADE ON THE BASIS OF THE VALUATIO N REPORT WITHOUT THERE BEING ANY OTHER MATERIAL TO INDICATE THAT ANY EXTRA CONSIDERATION HAD PASSED IN RESPECT OF THE SAID PURCHASE OF PROPERTY. THEREAFTER, THE REVENUE, BEING AGGRIEVED BY THE ORDER PASSED BY THE CIT(APPEALS),PREFERRED AN APPEAL BEFORE THE TRIBUNA L WHICH HAS BEEN DISMISSED BY THE TRIBUNAL BY CONFIRMING THE DELETIO N MADE BY THE CIT M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 54 (APPEALS). 4. THE ONLY POINT TO BE CONSIDERED IS WHETHER THE V ALUATION RENDERED BY THE DVO IS TO BE TAKEN INTO ACCOUNT OR NOT. IT HAS BEEN ARGUED BY THE LEARNED COUNSEL FOR THE REVENUE THAT THE ASSESSING OFFICER WAS JUSTIFIED IN REFERRING THE MATTER TO THE DVO FOR AN OPINION WIT H REGARD TO THE FAIR MARKET VALUE OF THE PROPERTY AND ONCE THAT OPINION HAS BEEN RENDERED, THE SOME HAS TO BE TAKEN INTO ACCOUNT AND IF MOT WERE T O BE SO, THE ADDITION OF RS.2,81,83,000/- WOULD BE FULLY JUSTIFIED. CONSEQU ENTLY, IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR THE REVENUE THAT THE TRI BUNAL HAD ERRED IN DELETING THE ADDITION. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE RESPONDE NT REFERRED TO A DIVISION BENCH DECISION OF THIS COURT IN THE CASE OF CIT V, PUNEET SABHARWAL (2011) 338 ITR 485 16 TAXMANN.COM 320 /(2 012) 204 TAXMAN16 (DELHI) (MAG.) IN THAT DECISION A SPECIFI C QUESTION HAD BEEN RAISED AS TO WHETHER THE INCOME TAX APPELLATE TRIBU NAL WAS RIGHT IN HOLDING THAT NOTWITHSTANDING THE REPORT OF THE DVO THE REVENUE HAD TO PROVE THAT THE ASSESSEE HAD RECEIVED EXTRA CONSIDE RATION OVER AND ABOVE THE DECLARED VALUE OF THE SAME. THAT QUESTION WAS A NSWERED BY THIS COURT IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE DIVISION BENCH IN THE CASE OF PUNEET SABHARWAL (SUPRA) HAD ALSO PLACE D RELIANCE ON THE DECISION OF SUPREME COURT IN K.P. VARGHESE (SUPRA) AS ALSO ON ANOTHER DECISION OF A DIVISION BENCH OF THISCOURT IN CIT V. SMT. SRAJ DEVI(2010) 328 ITR 604/(2011) 197 TAXMAN 173 (DELHI) (MAQ.) WHEREI N THIS COURT HELD THAT THE PRIMARY BURDEN WAS DISCHARGED THAT RELIANC E COULD BE PLACED ON THE VALUATION REPORT OF THE DVO. THERE ARE SEVERAL OTHER DECISIONS OF THIS COURT IN THE SAME VEIN. ONE SUCH CASE BEING THE CA SE OF CIT V VINOD SINGHAL (IT APPEAL NO.482/2010 DECIDED ON 05.05.201 0) WHERE, AGAIN, RELIANCE WAS PLACED ON THE VERY SAME DECISION OF TH E SUPREME COURT IN K.P. VARGHESE (SUPRA) AND ALSO ON A DECISION OF THI S COURT IN CIT V. SMT. SHAKUNTALA DEVI (2009)316 ITR 46. IT WAS OBSERVED T HAT THERE MUST BE A FINDING THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OV ER AND ABOVE THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 55 CONSIDERATION STATED IN THE SALE DEED AND FOR THIS THE PRIMARY BURDEN WAS CAST ON THE REVENUE. IT IS ONLY WHEN THIS BURDEN I S DISCHARGED BY THE REVENUE THAT IT WOULD BE PERMISSIBLE TO RELY UPON T HE VALUE AS GIVEN IN THE VALUATION REPORT OF THE DVO 5. THE LAW SEEMS TO BE WELL SETTLED THAT UNLESS AND UNTIL THERE IS SOME OTHER EVIDENCE TO INDICATE THAT EXTRA CONSIDERATION HAD FLOWED IN THE TRANSACTION OF PURCHASE OF PROPERTY, THE REPORT OF THE DVO CANNOT FORM THE BASIS OF ANY ADDITION ON THE PART OF THE REVENUE. IN THE PRESEN T CASE THERE IS NO EVIDENCE OTHER THAN THE REPORT OF THE DVO AND, THER EFORE, THE SAME CANNOT BE RELIED UPON FOR MAKING AN ADDITION. IN THESE CI RCUMSTANCES, THE QUESTION WHICH HAS BEEN FRAMED IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS DISMISSED. (6) CIT VS LAHSA CPVT. LTD 357 ITR 671 (DELHI)- SECTION 142A OF THE INCOME-TAX ACT, 1961 - ESTIMATE MODE BY VALUATION OFFICER - ASSESSMENT YEAR 1999-2000 _ WHETHER ADDIT ION CON BE MODE SOLELY RELYING UPON REPORT OF DEPARTMENTAL VALUATION OFFICER - HELD, NO [PARA 5) 1. REVENUE IN THIS APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 ('ACT' FOR SHORT) IMPUGNS ORDER DATED 25.06.2010, P ASSED BY THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF M/S LABSA CON STRUCTION PVT LTD.' ON THE GROUND OF PERVERSITY. THE APPEAL PERTAINS TO T HE ASSESSMENT YEAR, 1999-2000. (INCORRECTLY MENTIONED IN THE IMPUGNED O RDER AS ASSESSMENT YEAR 2006-07). 2. PROPERTY IN QUESTION BEARING NO.C-20, NDSF, SOUT H EX., PART-II, NEW DELHI HAD TWO SELLERS. THE RESPONDENT/ASSESSEE- LA HSA CONSTRUCTION PVT. LTD. HAD SOLD 50 SHALE OF THE PROPERTY IN FAVOUR OF MRS. MADHU ARORA, WHEREAS THE SECOND GROUP OF OWNERS CONSISTING OF F OUR INDIVIDUALS HAD SOLD 50 OF THE PROPERTY IN FAVOUR OF MRS. MADHU ARO RA AND HER HUSBAND M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 56 MR. OM PRAKASH ARORA. 3. IT IS STATED BY THE COUNSEL FOR THE RESPONDENT THAT REVENUE HAD ACCEPTED THE ORDER OF THE TRIBUNAL IN THE CASE OF S AID FOUR INDIVIDUAL> AS ADDITION WAS MAD' SOLELY ON THE REPORT OF THE DEPAR TMENTAL VALUATION OFFICER,. THIS STATEMENT IS NOT CONTROVERTED OR' AC CEPTED BY THE COUNSEL FOR THE REVENUE AS HE HAS NO INFORMATION.. 4. THE DEPARTMENTAL VALUATION OFFICER HAD OPINED TH AT THE VALUE OF THE PROPERTY AT THE TIME OF PURCHASE WAS RS.2,84,72,600/- AND TH IS BECAME THE BASIS OF THE ADDITION MADE BY THE ASSESSING OFFICER . THE RESPONDENT/ASSESSEE HAD DISCLOSED SALE CONSIDERATIO N OF AS RS. 39,00, 000/- FOR SALE OF THEIR 50% SHARE, IN THE PROPERTY O MRS. MADHU ARORA AND MR. OM PRAKASH ARORA PAID AN AMOUNT OF RS.44,00,000 /- TO THE FOUR INDIVIDUAL CO-OWNERS FOR PURCHASE OF THE BALANCE 50 % SHARE. THUS, IN ALL THEY HAD SHOWN SALE CONSIDERATION OF RS. 83, 00,000 /-, INSTEAD OF RS..2,84,72,600/-, AS OPINED BY THE DEPARTMENTAL VA LUATION OFFICER. THIS PROPERTY WAS SOLD IN THE PERIOD RELATING TO THE ASS ESSMENT YEAR 2004-05 FOR RS.1,00,00,000/- NO ADDITION WAS MADE BY THE A SSESSING OFFICER ON THIS SALE CONSIDERATION. 5. INANERAN ADDITION CAN BE MADE SOLELY AND ON THE BAS IS OF THE REPORT OF DEPARTMENTAL VALUATION OFFICER, IS NO LONGER RES INTEGRA AND IS COVERED BY THE DECISION OF THIS COURT IN CIT V S.K. CONSTRUCTION CO (2008)167 TAXMAN171, CIT V NAVIN GERA (2OIO) 328 ITR 516/[2011) 198 TAXMAN 93(DELHI), CIT V. SMT. SURAJ DEVI (2010) 328 ITR 604/2011 197 TAXMAN 173 (DELHI) (MAG.) ANDCIT V BAJ RANG LAL BANSAL (2011) 335 ITR 572/200 TAXMAN 188 (MAG.)/12 TAXMANN .,COM 88 (DELHI).. IT HAS BEEN REPEATEDLY HELD THAT ADDITION CANNOT BE JUSTIFIED SOLELY RELYING UPON THE VALUATION REPORT. DECISION OF THE SUPREME COURT IN THE CASE OF K.P. VARGHESE V ITO (1981) 131 ITR 597/7 TAXMAN 13 HAS BEEN FOLLOWED. 6. IN VIEW OF THE AFORESAID POSITION OF THE TRIBUN AL DOES NOT REQUIRE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 57 INTERFERENCE. NO SUBSTANTIAL QUESTION OF LAW ARISE S. THE APPEAL IS ACCORDINGLY DISMISSED. ' (7) CIT V/S PRATAP SINGH AMROSINGH RAJENDRA SINGH 2 00 ITR 788 HELD, THAT THERE WAS NO DISPUTE THAT THE ASSESSEE M AINTAINED PROPER BOOKS OF ACCOUNT AND THE SAME HAD BEEN ACCEPTED IN THE PAST AND NO DEFECTS WERE POINTED OUT IN THE BOOKS. THE EXPENSES WERE FULLY SUPPORTED BY VOUCHERS. FALL DETAILS WERE ALSO MENTIONED IN RESPECT OF EACH ITEM IN THE BOOKS SIMPLY BECAUSE THE VALUATION REPORT WAS O F A HIGH AMOUNT, THE BOOKS COULD NOT BE SAID TO BE UNRELIABLE. THE TRIBU NAL WAS THEREFORE, JUSTIFIED IN DELETING THE ADDITION OF RS. 55,780/- (8) CIT V/S VIJAY KUMAR D GUPTA (2014) 365 ITR 470 (GUJ) ' ....MOREOVER, IT IS APPARENT THAT THE ONLY REASON FOR MAKING THE ADDITION UNDER SECTION 69 OF THE ACT IS THAT THERE IS A DIFF ERENCE IN THE COST OF CONSTRUCTION AS DETERMINED BY THE VALUATION OFFICER AND AS SHOWN BY THE ASSESSEE. AT NO STAGE OF THE ASSESSMENT PROCEEDING S DOES THE ASSESSING OFFICER APPEAR TO HAVE MENTIONED THAT THE BOOKS OF ACCOUNTS ARE DEFECTIVE OR THAT THE COST OF CONSTRUCTION AS SHOWN IN THE BO OKS OF ACCOUNT IS NOT THE TRUE COST OF CONSTRUCTION. THUS, WHILE MAKING THE REFERENCE TO THE VALUATION OFFICER, THE ASSESSING OFFICER HAS NOT RE CORDED ANY DEFECT IN THE BOOKS OF ACCOUNT NOR HAS HE REJECTED THE SAME. EXC EPT FOR THE DIFFERENCE IN THE ESTIMATED COST DETERMINED BY THE VALUATION OFFI CER AND THE ACTUAL COST AS SHOWN BY THE ASSESSEE, THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE H AD MADE ANY UNACCOUNTED INVESTMENT IN THE CONSTRUCTION OF THE B UILDING IN QUESTION AND THAT BOOKS OF ACCOUNT DO NOT REFLECT THE CORRECT CO ST OF CONSTRUCTION. UNDER THE CIRCUMSTANCES, THERE WAS NO OCCASION FOR THE AS SESSING OFFICER TO MAKE A REFERENCE TO THE VALUATION OFFICER. AS HELD BY T HE SUPREME COURT IN THE CASE OF SARGAM CINEMA (SUPRA) UNLESS THE BOOKS OF A CCOUNTS ARE REJECTED, M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 58 THE ASSESSING OFFICER CANNOT MAKE A REFERENCE TO VA LUATION OFFICER. THE REFERENCE MADE TO THE VALUATION OFFICER, NOT BEING IN CONSONANCE WITH THE PROVISION OF LAW, WAS, THEREFORE, INVALID. ACCORDI NGLY, THE REPORT MADE BY THE VALUATION OFFICER PURSUANT TO SUCH AN INVALID R EFERENCE COULD NOT HAVE BEEN MADE THE BASIS FOR ADDITION UNDER SECTION 69 O F THE ACT. 9 WHETHER AN ADDITION CAN BE MADE SOLELY AND SIMPLY ON THE BASIS OF THE VALUATION REPORT SUBMITTED BY DVO, IS NO LONGER RES INTEGRA AND IS COVERED BY THE VARIOUS DECISION OF HON'BLE COURTS MENTIONED BELOW:- CIT V S.K. CONSTRUCTION CO. (2008) 167 TAXMAN 171 CIT V NAVIN GERA (2010) 328 ITR 516/(2011) 198 TAXM AN93 (DELHI) CIT V SMT. SURAJ DEVI (2010) 328 ITR 604/(2011) 197 TAXMAN 173 (DELHI) (MAG.) CIT V BAJRANG LAL BANSAL (2011) 335 ITR 572/200 TAX MAN 188 (MAG.)/12TAXMANN.COM 88(DELHI) IT HAS BEEN REPEATEDLY HELD THAT ADDITION CANNOT B E JUSTIFIED SOLELY RELYING UPON THE VALUATION REPORT. DECISION OF THE SUPREME COURT IN THE CASE OF K. P. VARGHESE V. ITO [1981) 131 ITR 5 97/7 TAXMAN 13 NIRPALSINGH VIS CIT (2013) 3591TR 398 (P & H) RAGHURAJ AGRO INDUSTRIES (P)LTD (2013) 38 TAXMANN.COM 318(AII). (10) CIT V/S VRIDNABAN REAL ESTATE (P) LTD (2012 ) 254 CTR (ALL)10 ALTHOUGH ABOVE CITED CASE PERTAINS TO RE-OPENING OF THE CASE BASED ON OVA'S REPORT BUT RATIO LAID DOWN IS EQUALLY APPLICA BLE TO THE INSTANT CASE. HON'BLE COURT HAS DELETED THE RE-OPENING OF ASSESSM ENT U/S 147 BY HOLDING THAT OVO'S REPORT PERSE IS NOT AN INFORMATI ON FOR THE PURPOSE OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 59 REOPENING OF ASSESSMENT U/S147-AO HAS TO APPLY HIS MIND ON THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELI EF THEREO N FOR RE-OPENING OF ASSESSMENT-THERE HAS TO BE SOMETHING MORE THAN T HE REPORT OF OVA FOR THE BELIEF OF AO BY OBSERVING SO, HON'BLE COURT DISMISSED THE APPEAL OF REVENUE. 5.9 C ONSIDERING THE AFORESAID FACT AND CIRCUMSTANCES OF THE MATTER AND THE LAW AS INTERPRETED BY SEVERAL HIGH COURTS A ND THE HON'BLE SUPREME COURT - THE FINDINGS ON THIS ISSUE IN RESPE CT OF PECULIAR FACTS OF THIS CASE ARE AS BELOW; ADMITTEDLY, THE ASSESSEE FIRM MAINTAINED ITS REGULA R BOOKS OF ACCOUNTS SUPPORTED BY BILLS/VOUCHERS AND OTHER RECO RDS WHICH WERE SUBJECTED TO AUDIT. THE AO HAS NEITHER POINTED OUT ANY DEFECT IN BOOKS NOR BROUGHT ANY POSITIVE MATERIAL ON RECORD T O ESTABLISH ALLEGED UNACCOUNTED INVESTMENT IN PROJECT 'SIGNATURE RESIDE NCY'. MOST IMPORTANTLY, AO HAS NOT EVEN REJECTED THE BOOKS OF ACCOUNTS EVEN ALTER RECEIPT OF VALUATION REPORT. IN VIEW OF THESE FACTS, VALUATION REPORT OBTAINED FROM DVO CANNOT FORM A FOUNDATION I PSO FACTO FOR MAKING ADDITION TOWARDS ALLEGED SUPPRESSION OF COST OF INVESTMENT. NEITHER DVO NOR AO HAS POINTED OUT THAT CERTAIN EXP ENDITURE ON CERTAIN ITEMS/CONSTRUCTION WAS INCURRED WHICH WAS N OT RECORDED IN THE BOOKS MAINTAINED BY THE ASSESSEE. HENCE, ADDITI ONS MADE BY AO IS NOT SUSTAINABLE IN LAW BEING BASED MERELY ON VAL UATION REPORT RECEIVED FROM OVO. II) THE A.O. HAS NOT MENTIONED ANY REASON IN THE AS SESSMENT ORDER OR IN THE REFERENCE TO THE VALUATION, THAT HE HAD ANY INCRIMINATING MATERIAL WHICH LED TO FORM HIS BELIEF THAT THE APPELLANT HAD UNDER SLATED THE COST OF CONSTRUCTION REFERRED FOR VALUAT ION. IT IS VERY RELEVANT TO UNDERSTAND THAT THE APPELLANT WAS SUBJE CTED TO SEARCH AND SEIZURE AC1ION U/S 132 OF THE ACT WHICH APPARENTLY DID NOT YIELD M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 60 TO SEIZURE OF ANY INCRIMINATING PAPERS/DOCUMENTS SUGGESTING UNACCOUNTED INVESTMENT IN THE PROJECT 'SIGNATURE RE SIDENCY'. LACK OF ANY INCRIMINATING MATERIAL/EVIDENCE REGARDING UNDER REPORTING OF COST OF CONSTRUCTION BEING POINTED OUT BY THE A.O .. IN SPI TE OF SEARCH AND SEIZURE AC1ION ADDITION SIMPLY MADE ON THE BASIS 01 OVO'S REPORT IS EVEN MORE UNJUSTIFIED AND UNWARRANTED. III) DURING ASSESSMENT PROCEEDINGS, APPELLANT RAISE D SEVERAL OBJECTIONS WITH REGARDS TO METHODOLOGY ADOPTED BY D VO AS WELL AS VALUATION ASPECT BUT AO HAS TOTALLY FAILED TO CONSI DER THE SAME. HE HAS MECHANICALLY ADOPTED THE ESTIMATE OF VALUE OF CONSTRUCTION PROVIDED BY DVO. ONE SHOULD NOT LOSE SIGHT PF THE FACT THAT AT THE END 01 THE DAY, COST DERIVED BY DVO IN HIS REPORT IS NOTHI NG BUT AN 'ESTIMATE' WHICH IS BOUND OF HAVE SOME AMOUNT OF ESTIMATION, GUESS WORK & OPINION INVOLVED AND ESTIMATE CANNOT BE 'EXACT'. AF TER ALL IT IS AN ESTIMATE DONE BY AN EXPERT AND IT IS A POPULAR M AXIM 'TO ERR IS HUMAN'. IT IS EVIDENT FROM THE VERY FACT THAT APPEL LANT HAS RAISED VARIOUS DISCREPANCIES IN THE DVO'S REPORT HOWEVER. A.O. DID NOT FIND IT APPROPRIATE TO INVITE COUNTER COMMENTS OF D VO ON OBJECTIONS RAISED BY THE ASSESSEE. ALTHOUGH, IT IS A SETTLED LEGAL PO SITION THAT VALUATION REPORT SUBMITTED BY DVO IS NOT BINDING UPON AO, BUT IN THE PRESENT CASE AO HAS ADOPTED AND USED THE VALUATION REPORT A S IT IS BINDING ON HIM. APPELLANT HAS POINTED OUT SEVERAL GLARING M ISTAKES AND OMISSIONS IN VALUATION REPORT, ON WHICH AO HAS MAIN TAINED A CONSPICUOUS SILENCE WHICH IS UNBECOMING OF A QUASI-JUDICIAL AUTHORITY (IV) IT IS IMPORTANT TO NOTE THAT OVO HAS PREPARED HIS REPORT BASED ON DPAR- 2007 AFTER APPLYING COST INDEX ON ABOVE DPAR AS BASE 100. INTERESTINGLY, DVO HAS APPLIED SAME RATE FOR COST OF CONSTRUCTION OF THE PROJECT EVEN THOUGH THE INVESTMENT IS SPREAD O VER MANY YEARS. AS PER APPELLANT, OVO SHOULD HAVE ADOPTED MPPWD R ATES AFTER M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 61 MAKING CERTAIN ADJUSTMENT FOR THE CONSTRUCTION DONE BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEARS. HON'BLE ALLAHABAD H IGH COURT IN THE CASE OF CIT V/S RAJ KUMER 182 ITR 436 (ALL) HAS HELD THAT VALUE OF PROPERTY UNDER PWD RATES IS MUCH LOWER THAN THE CO ST OF VALUE OF PROPERTY AS PER CPWD RATES. SIMILARLY, IN THE CASE OF CIT V/S PREM KUMERE MURDLYE 296 ITR 508 (RAJ) WHEREIN HON'BLE COURT REFUSED TO INTERFERE IN THE ORDER OF ITAT HOLDING THAT APPROP RIATE TO BE TAKEN INTO CONSIDERATION WOULD BE PWD RATES AND HOLDING DIFFER ENCE BETWEEN CPWD RATES AND PWD RATES AT 20. SIMILAR VIEWS HAVE BEEN EXPRESSED IN THE CASE OF ITO V/S NILESH MEHESHWERI (2011) 53 DTR 43 (ITAT JAIPUR). IN VIEW OF THIS, A DIFFERENCE OF 20 BETWEEN COST SH OWN IN BOOKS AND ESTIMATED BY DVO FALLS WITHIN 'TOLERANCE BAND' AS HELD BY VARIOUS COURTS. FURTHER, APPELLANT PURCHASED MATER IAL ON WHOLESALE BASIS WHICH BRINGS 'ECONOMY OF SCALE' INTO CONSTRUC TION COST WHICH AS PER APPELLANT WOULD RESULT INTO SAVINGS UPTO 25. A O HAS ACKNOWLEDGED THIS ASPECT BUT DID NOT PROVIDE ANY R ELIEF WHILE MAKING ADDITION. APPELLANT HAS ALSO ARGUED ABOUT S AVINGS IN COST OF CONSTRUCTION FOR OTHER REASONS AS WELL I.E. SE LF-SUPERVISION. CONSULTANCY CHARGES ETC. HOWEVER. AO FAILED TO AL LOW ANY BENEFIT TO THE ASSESSEE ON ANY OF THE COUNT WHICH IS NOT JUSTIFIED. I AM OF THE VIEW THAT AS A CONSEQUENCE OF SUCH UND ER REPORTING, THE AO IS REQUIRED TO REJECT THE BOOKS OF ACCOUNTS OF THE ASSESS E . IN THE CASE OF THE APPELLANT THE AO HAS NEITHER REJECT ED THE BOOKS OF ACCOUNTS BEFORE MAKING A REFERENCE TO DVO FOR VALUA TION OF PROPERTY NOR HE DID AFTER RECEIPT OF VALUATION REPORT FROM D VO. APART FROM THE CASE LAWS REFERRED IN PARA 5.8 OF THIS ORDER. IT IS PERTINENT TO REFER TO THE DECISION OF ITO V IS DREAMLAND ENTERPRISES 80 TAXMEN 143 (ITAT AHD) WHEREIN IT WAS HELD THAT WHEN THE COST OF CONSTRUCT ION DECLARED BY THE ASSESSEE WAS SUPPORTED BY REGULAR BOOKS OF A CCOUNTS AND VOUCHERS, CORRECTNESS OF WHICH WAS NOT DISTURBED BY THE AO OR DVO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 62 BY BRINGING ANY SPECIFIC MATERIAL ON RECORD, THE CI T{A) WAS FULLY JUSTIFIED IN HOLDING THAT NO ADDITION COULD BE VALI DLY MADE ON ACCOUNT OF ANY UNDERSTATEMENT OF COST OF CONSTRUCTION MEREL Y BECAUSE OF DIFFERENCE AS ESTIMATED BY THE DVO. HENCE, ON THIS COUNT. I AM OF THE VIEW THAT ADDITION MADE MERELY ON THE BASIS OF DVO' S REPORT IS NOT SUSTAINABLE. VI) THE VALUATION REPORT OF DVO IS NOT BINDING ON THE AO BECAUSE IT IS MERELY AN OPINION OF AN EXPERT. IN THE CONTEXT O F THE CONTROVERSY IN ISSUE, IT MAY ALSO BE GERMANE TO NOTICE THE EXPRESS ION USED BY LEGISLATURE I.E. 'ESTIMATE'. THUS, RESORT CAN BE MA DE TO THE SAID PROVISION BY THE AO FOR THE PURPOSE OF 'ESTIMATING' THE VALUE OF ANY INVESTMENT. BULLION, JEWELLERY OR ANY VALUABLE ARTI CLE ETC. HOWEVER, THIS IS SETTLED LEGAL POSITION THAT ADDITION CANNOT BE MADE SOLELY ON THE BASIS OF VALUATION REPORT WHICH IS ONLY GIVE AN ESTIMATE AS HELD BY VARIOUS HIGH COURTS, DISCUSSED EARLIER. VII) IT IS APPARENT FROM RECORD THAT ASSESSING OFF ICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESS EE HAD MADE ANY UNACCOUNTED INVESTMENT IN CONSTRUCTION OF THE BUILD ING IN QUESTION AND THAT BOOKS OF ACCOUNTS DO NOT REFLECT THE CORRE CT COST OF CONSTRUCTION. IT IS EVIDENT THAT ONLY REASON FOR MA KING THE ADDITION U/S 69B OF THE ACT IS THAT THERE IS A DIFFERENCE IN THE COST OF CONSTRUCTION AS ESTIMATED BY THE VALUATION OFFICER AND AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. VIII) THE AO HAS MENTIONED IN THE ASSESSMENT ORDER THAT CONSTRUCTION ACCOUNT WAS NOT PRODUCED BEFORE HIM FO R VERIFICATION WHICH IS CONTRARY TO HIS STATEMENT IN PARA 2 OF THE ASSESSMENT ORDER WHEREIN HE HAS MENTIONED THAT BOOKS OF ACCOUNTS WER E PRODUCED AND VERIFIED BY HIM. HOWEVER DURING THE APPEAL PROCEEDINGS THE ASSESSEE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 63 WAS DIRECTED TO FURNISH THE COPY OF CONSTRUCTION AC COUNT FOR THE PERIOD UNDER CONSIDERATION AND TO PRODUCE THE BOOKS OF ACC OUNTS AND SUPPORTING VOUCHERS FOR VERIFICATION WHICH WAS DULY COMPLIED BY THE ASSESSEE. 5.10 IT IS INTERESTING TO NOTE THAT VALUATION OF THE PROPE RTY UNDER CONSIDERATION WAS DONE BY THE DVO ALTER APPLYING COS T INDEX ON THE BASIS OF DPAR-2007 (AS BASE). IT IS SETTLED LAW THA T DPAR RATES ADOPTED BY DVO ARE HIGHER THAN PWO RATES. HON' BLE HI GH COURT OF RAJASTHAN IN THE CASE OF CIT V IS PREM KUMARI MURDIYA 296 ITR 344 (RAJ ) REFUSED TO INTERFERE IN THE ORDER OF IT AT HOLDING THAT APPROPRIATE RATE TO BE TAKEN INTO CONSIDERATION WOULD BE PWO RATES AND HOLDING DIFFERENCE BETWEEN CPWO RATES AND PWO RATES AT 20. SIMILARLY, I N THE CASE OF ITO V/ S NILESH MAHESHWARI (2011) 53 DTR 43 (ITAT JAIPUR) HELD ALTER RELYING ON THE DECISION OF TEK CHAND V/S ITO 51 TTJ (JPR) 607 THAT THERE IS VARIATION IN LOCAL PWD RATES AND CPWD RATE BY MARGI N OF 20. IT HAS BEEN HELD IN THE CASE OF CIT V/ S LAHSA CONSTRUCTION (P) L TD (2013) 357 ITR 671 (DELHI) THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF VALUATION REPORT OF OVO. LD AR ALSO PLACED RELIANCE O N THE DECISION OF CIT V/ S VS PRALAP SINGH AMRO SINGH (1993) 200 ITR 788 (RAJ) THAT ADDITION TO INCOME COULD NOT BE MADE ON THE BASIS OF THE REPORT OF THE VALUATION OFFICER. 5.11 AS FAR AS CASE LAWS RELIED UPON BY THE A.O. ARE CONC ERNED, ON PERUSAL IT IS SEEN THAT NONE OF THE CASE LAWS RELIED U PON BY THE A.O. ARE APPLICABLE TO THE FACTS OF THIS CASE. THE CASE LA WS REFERRED BY AO ARE AS UNDER:- A. CIT V OMPRAKASH BAGARIA (HUF) 2871TR 523 (MP) IN THIS CASE THE AD ISSUED A COMMISSION UNDER S. 13 1(1)(D) TO DISTRICT VALUATION OFFICER ON 23RD AUG, 1996, TO DETERMINE THE COST OF CONSTRUCTION M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 64 OF THE BUILDING FOR THE PURPOSE OF MAKING ON ESTIMATE OF THE INVESTMENT REFERRED TO IN S, 69, ADDITIONS WERE MODE ON THIS BASIS AND THE ASSES SEE HAD FILED ON APPEAL BEFORE THE HIGHER AUTHORITIES C HALLENGING THAT REFERENCE TO VALUATION OFFICER IS PERMISSIBLE ONLY U/S 55A OF THE ACT TO DETERMINE THE MARKET VALUE OF CAPITOL ASSET AND NO REFERENCE CAN BE MODE U/S 131(1)(D), THE APPEAL WAS PENDING BEFORE THE HIGH COURT. DURIN G THE PENDENCY OF THE APPEAL BEFORE THE HIGH COURT THE FINANCE ACT 2004 M ODE AMENDMENT IN SECTION 142A PROVIDING THE AO WITH POWER TO MAKE A REFERENCE TO THE DVO FOR ESTIMATING THE VALUE OF INVESTMENT AND THE AMEN DMENT WAS MADE EFFECTIVE WITH RETROSPECTIVE EFFECT FROM 15.11.72. THE PROVISO TO THE SECTION PROVIDED THAT THE AMENDED SECTION WILL NOT APPLY TO ASSESSMENT WHICH HAS BECOME FINAL AND CONCLUSIVE ON OR BEFORE 30.09.2004 . IN THESE CIRCUMSTANCES THE COURT HELD THAT OS THE APPEAL IS PENDING BEFORE IT, THE ASSESSMENT HAS NOT BECOME FINAL AND CONCLUSIVE AND HENCE THE AMENDED SECTION 142A OF THE ACT WILL BE APPLICABLE AS IT HA S BEEN AMENDED W.E,F 15.11.72 AND ACCORDINGLY THE REFERENCE MADE TO THE DVO WAS A VALID REFERENCE. THUS THE ISSUE FOR DECISION BEFORE THE COURT IN THA T CASE WAS WHETHER AMENDED PROVISIONS OF SECTION 142A MADE IN 2004 CON BE MADE APPLICABLE TO CASES IN WHICH ASSESSMENTS ORE ALREAD Y COMPLETED. THU' IT WOULD BE SEEN THAT THE ,AID JUDGMENT HA' NO APPLICA BLE TO THE CASE OF THE ASSESSEE. SHAKTI TOURIST HOME V CIT 308 ITR 228 (KERALA): THE CITATION MENTIONED IN THE ASSESSMENT ORDER IS NOT CORRECT. THE CORRECT CITATION IS 308 /TR 0028. IN THIS CASE THE ISSUE BEFORE THE HIGH COURT WAS WHETHER IT CAN MAKE CHANGES IN THE VALUATION MODE AND WHETHER THE ADDITION TOWARD, UNEXPLAINED INVESTMENT MODE BY THE AO IN ONE YEAR CAN BE SPREAD OVER MANY YEARS, IN THIS REFERENCE THE COURT HELD THAT 'WE DO NOT FIND WE HAVE ANY AUTHORITY TO ENTER INTO THE CONTROVERSY ON VALUATION OF ASSETS W HICH IS A PURE FACTUAL ISSUE' AND THE COURT FURTHER HELD THAT ''THE CLAIM FOR SPREADING OVER OF THE INVESTMENT FOR SEVERAL YEARS CON BE GRANTED ONLY IF IT IS PROVED THAT THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 65 INVESTMENT IS MODE IN SEVERAL YEARS. THERE IS NO SUCH EVIDENCE IN THIS CASE'. THUS IT WOULD BE SEEN THAT THE SAID JUDGMENT HAS NO APPLICABILITY TO THE CASE OF THE ASSESSEE. CIT V A O ALI MOHAMMAD 296 ITR 570 (MAD) THE ISSUE IN THIS CASE WAS THAT THE DVO HAD ESTIMAT ED THE COST OF CONSTRUCTION AT RS.64,88,000/- AS AGAINST RECORDED COST OF RS.47,42,629/- . THE ADDITION MODE WAS RESTRICTED TO RS. 9 LOKH AN D TOO WAS, DIRECTED TO BE SPREAD OVER 0 PERIOD OF 5 YEARS BY THE CIT(A) AND THE ITAT BOTH. THIS WAS CHALLENGED BY THE DEPORTMENT BEFORE THE HIGH CO URT AND THE COURT HELD THAT ''THE VALUATION IS NOT A MATHEMATICAL PRECISIO N AND THERE IS BOUND TO BE DIFFERENCE BETWEEN ONE VALUER TO ANOTHER VALUER AND IT IS, ONLY A PURE QUESTION OF FACT' CIT VS, P. MOHONOKALA (2007) 210 CTR (SC) 20 : (2007) 291 1 TR 278 (SC), REFERRED TO BY THE HIGH COURT HELD 'THAT WHENEVER T HERE IS A CONCURRENT FACTUAL FINDING BY THE AUTHORITIES BELOW, THE SOME SHOULD BE ACCEPTED AND NO INTERFERENCE SHOULD BE CALLED FOR BY THE HIGH CO URT' THUS IT WOULD BE SEEN THAT THE ISSUE BEFORE THE HIG H COURT WAS, ENTIRELY DIFFERENT 5.12 IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN TH E ADDITION 01 RS. 99,82.487/-, RS. 2,73.48,559/-, RS. 5,32,58, 155/- AND AS. 4,38,32,956/- IN A.Y 2011-12 TO 2014.15 MERELY MADE ON THE BASIS OF VALUATION REPORT WHICH IS NOTHING BUT AN ESTIMATE O F VALUATION OF 'COST OF INVESTMENT' AND DVO'S REPORT CANNOT BE TAKEN AS A C ONCLUSIVE PROOF OF UNDISCLOSED INVESTMENT MADE IN THE PROJECT SIGNATURE RESIDENCY OF THE ASSESSEE FIRM. THEREFORE APPEAL ON THIS GROUND IS ALLOWED. 48. FROM PERUSAL OF THE ABOVE DETAILED FINDING OF L D. CIT(A) AND M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 66 VARIOUS CASE LAWS REFERRED AND RELIED BY THE LD. CO UNSEL FOR THE ASSESSEE WE ARE OF THE CONSIDERED VIEW THAT THE RAT IO LAID DOWN BY THE DECISION REFERRED HEREIN ABOVE ARE SQUARELY APP LICABLE TO THE ISSUE AND FACTS RAISED BEFORE US BY THE REVENUE AUT HORITIES WITH REGARD TO THE ADDITION MADE FOR UNEXPLAINED INVESTM ENT U/S 69B OF THE ACT FOR THE AMOUNT INCURRED FOR CONSTRUCTION OF THE PROJECT AND ADDITION MADE SOLELY ON THE BASIS OF DEPARTMENTAL V ALUATION OFFICER REPORT EVEN THOUGH BOOKS OF ACCOUNTS OF THE ASSESSE E AS WELL AS THE BOOK RESULTS HAVE NOT BEEN REJECTED BY THE LD. A.O NOR ANY MATERIAL EVIDENCE WAS UNEARTHED DURING THE COURSE OF SEARCH AND IN THE ASSESSMENT PROCEEDINGS WHICH COULD PROVE THAT UNACC OUNTED INVESTMENT HAS BEEN MADE BY THE ASSESSEE IN THE RES IDENTIAL PROJECT SIGNATURE RESIDENCY. WE THEREFORE IN THE GIVEN FAC TS AND CIRCUMSTANCES OF THE CASE, RESPECTFULLY FOLLOWING J UDICIAL PRONOUNCEMENTS REFERRED AND RELIED BY THE LD. COUNS EL FOR THE ASSESSEE AND LD. CIT(A) AND ALSO IN THE LIGHT OF TH E FACT THAT FIRSTLY THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUN TS WHICH ARE NOT FOUND TO BE INCOMPLETE OR UNRELIABLE AND ALSO HAVE NOT BEEN REJECTED BY THE LD. A.O AND SECONDLY VALUATION WAS DONE OF THE INCOMPLETE PROJECT WHICH HAS BEEN VALUED NOT ON THE BASIS OF LOCAL M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 67 PRICE BUT ON THE BASIS OF DELHI RATES WHICH ARE UNI VERSALLY ACCEPTED ON HIGHER SIDE. THEREFORE SINCE NO DEFECTS WERE PO INTED OUT IN THE BOOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSES SEE AND ARE DULY AUDITED AND NO INCRIMINATING MATERIAL WAS FOUN D IN THE SEARCH TO SHOW THAT UNACCOUNTED INVESTMENT IN THE BUILDING PROJECT HAS BEEN MADE, ADDITION MADE PURELY ON THE BASIS OF DEP ARTMENTAL VALUATION REPORT, WE FIND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) WHO WAS RIGHTLY DELETED THE ADDITION FOR THE ALLEGED UNDISCLOSED INVESTMENT U/S 69B OF THE ACT MADE BY T HE LD. A.O AT RS.2,73,48,559/-, RS.5,32,58,155/- AND RS.4,38,32,9 56/- FOR ASSESSMENT YEARS 2012-13, 2013-14 AND 2014-15 RESP ECTIVELY. WE ACCORDINGLY CONFIRM THE FINDING OF LD. CIT(A) ON THIS ISSUE AND DISMISS REVENUES COMMON GROUND NO.1 RAISED FOR AS SESSMENT YEARS 2012-13, 2013-14 AND 2014-15 IN ITA NO.174 T O 176/IND/2018. 49. AS REGARDS COMMON GROUND NO.2 OF REVENUES APP EAL FOR ASSESSMENT YEARS 2012-13, 2013-14 AND 2014-15 IN C ASE OF M/S. SIGNATURE BUILDERS THE REVENUE HAS CHALLENGED THE F INDING OF LD. CIT(A) ALLOWING THE ASSESSEES CLAIM OF SET OFF INC OME AGAINST THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 68 ADDITIONS MADE U/S 69B OF THE ACT. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS WHEN THE LD. A.O INITIATED T O MAKE ADDITION U/S 69B OF THE ACT FOR THE UNEXPLAINED INV ESTMENT IN THE CONSTRUCTION OF RESIDENTIAL PROJECTS IT WAS SUBMITT ED BEFORE THE LD. A.O THAT PROVISION OF SECTION 69C SPECIFICALLY MENT IONS THAT IN CASE OF UNEXPLAINED EXPENDITURE FOUND DURING THE COURSE OF ASSESSMENT AND IF THE ASSESSEE IS UNABLE TO EXPLAIN THE SOURCE SHALL BE DEEMED TO BE THE INCOME OF THE ASSESSEE AND THE ASSESSEE S HALL NOT BE ENTITLED TO CLAIM OF DEDUCTION UNDER ANY HEAD OF IN COME. HOWEVER IN SECTION 69B OF THE ACT THERE IS NO SUCH PROVISIO N WHICH IMPLIES THAT IN CASE THE ADDITION IS MADE U/S 69B, THE ASSE SSEE IS ENTITLED TO CLAIM ADJUSTMENT OF SUCH EXPENSES. IT WAS ALSO SUBMITTED THAT THE ADDITION MADE ON THE COUNT THAT THE APPELLANT H AD SHOWN LOWER AMOUNT OF COST OF CONSTRUCTION, WOULD ULTIMATELY RE SULT INTO SQUARING OFF THE WHOLE ADDITION SINCE ON ONE SIDE THE ADDITION IS MADE AND ON THE OTHER SIDE THE DEDUCTION IS TO BE A LLOWED AS BUSINESS EXPENDITURE. THUS THE WHOLE EXERCISE WO ULD BE REVENUE NEUTRAL. HOWEVER THE LD. A.O WAS NOT SATISFIED AND REJECTED THE CLAIM AGAINST WHICH THE ASSESSEE WENT AN APPEAL BEF ORE LD. CIT(A) AND SUCCEEDED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 69 50. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 51. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTING THE ORDER OF LD. A.O. 52. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORT ED THE FINDING OF LD. CIT(A). 53. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUE THROUGH THIS COMMON GROU ND NO.2 HAS CHALLENGED THE FINDING OF LD. CIT(A) ALLOWING THE S ET OFF OF INCOME AGAINST ADDITION MADE U/S 69B OF THE ACT. WE OBSER VE THAT LD. CIT(A) DEALT WITH THIS ISSUE OBSERVING AS UNDER:- 6.1 THE GROUND IS RELATING TO CLAIM OF THE APPELLANT TO ALLOW SET-OFF OF INCOME AGAINST THE ADDITIONS MADE U/S 69B OF THE ACT . IT IS SEEN THAT THE ASSESSEE IS MAINLY INVOLVED IN THE BUSINESS OF DE VELOPMENT AND SALE OF REAL ESTATE AND IN THE COURSE OF ITS BUSINES S IT HAS DEVELOPED A PROJECT IN THE NAME OF 'SIGNATURE RESIDENCY' WHICH I S A RESIDENTIAL COMPLEX PROJECT SPREAD OVER AN AREA OF 6.6 ACRE WHIC H COMPRISED OF 96 MIG FLATS AND 336 HIG FLATS AND CLUB HOUSE. DURING A SSESSMENT PROCEEDINGS REFERENCE WAS MADE TO THE DVO TO ESTIMA TE THE CONSTRUCTION EXPENSES AND ADDITION WERE MADE FOR TH E DIFFERENCE IN VALUE RECORDED IN THE BOOKS OF ACCOUNT AND THE VALU E ESTIMATED BY THE DVO. THE ASSESSEE HAS CLAIMED THAT THE PROPERTY VAL UED IS ITS STOCK IN HAND AND ANY EXPENSES INCURRED ON THE PROJECT GOES TO REDUCE ITS M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 70 PROFIT. THUS IT IS ARGUED THAT IF ANY ADDITION IS MA DE TOWARDS UNEXPLAINED INVESTMENT, THE CORRESPONDING DEDUCTION IS REQUIRED TO BE ALLOWED. THE CLAIM WAS MADE BY THE APPELLANT BEFORE T HE AO, HOWEVER THE SAME WAS NOT ACCEPTED AND NO SPECIFIC REASON FO R THE REJECTION IS ASSIGNED BY THE AO. 6.2 DURING THE APPELLATE PROCEEDINGS, ID. AR OF THE APPE LLANT HAS FILED THE WRITTEN SUBMISSIONS DATED 09.02.2018. THE R ELEVANT EXTRACT OF HIS SUBMISSION IS REPRODUCED AS UNDER: 'THE ADDITION REGARDING UNEXPLAINED INVESTMENT IS M ADE BY THE AO U/S 69B AFTER MAKING DETAILED DISCUSSION IN PAGE 30-31 OF THE ASSESSMENT ORDER. RELIANCE IS PLACED BY HIM ON THE JUDGMENT OF MP. HIGH COURT IN THE CASE OF CIT V OMPRAKASH BAGRIA (HUF) 287 ITR 523 AND VARIOUS OTHER JUDGMENTS OF THE SUPREME COUR T AND VARIOUS OTHER HIGH COURTS TO SUBSTANTIATE THAT THE ADDITION UNDER CONSIDERATION IS REQUIRED TO BE MADE U/S 69B IN THIS REGARDS IT MAY BE MENTIONED THAT IN CASE TH E AA HAS FORMED AN OPINION THAT THE ASSESSEE HAS INCURRED SOME UNAC COUNTED INVESTMENT ON THE CONSTRUCTION HE WAS DUTY BOUND TO ADJUST THE CONSTRUCTION EXPENSES AND SHOULD HAVE INCREASED THE EXPENSES BY A SIMILAR AMOUNT WHICH WOULD NULLIFY THE EFFECT OF AD DITION IF ANY. IT MAY BE MENTIONED THAT PROVISIONS OF SECTION 69C SPECIFICALLY MENTIONS THAT IN CASE OF UNEXPLAINED EXPENDITURE FO UND DURING THE COURSE OF ASSESSMENT WILL BE DEEMED TO BE THE INCOM E OF THE ASSESSEE AND THE ASSESSEE SHALL NOT BE ENTITLED TO CLAIM THE SAME AS DEDUCTION UNDER ANY HEAD OF INCOME. HOWEVER IN SECTION 69B THERE IS NO SUCH PROVISION A ND WHICH IMPLIES THAT IN CASE ADDITION IS MADE U/S 69B, THE ASSESSEE IS ENTITLED TO CLAIM ADJUSTMENT OF SUCH EXPENSES. THE ADDITION MAD E ON THE COUNT THAT THE APPELLANT HAD SHOWN LOWER AMOUNT OF COST O F CONSTRUCTION, WOULD ULTIMATELY RESULT INTO SQUARING OFF THE WHOLE ADDITION SINCE ON ONE SIDE THE ADDITION IS MADE AND ON THE OTHER S IDE THE DEDUCTION IS TO BE ALLOWED AS BUSINESS EXPENDITURE. THUS, THE WHOLE EXERCISE WOULD BE REVENUE NEUTRAL. THE SAID CONTENTION OF THE ASSESSEE IS DULY SUPPORT ED BY VARIOUS JUDGMENTS, SOME OF WHICH ARE GIVEN HEREIN BELOW: M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 71 CIT V SURAJ TOWERS (2015) 230 TAXMAN 306(KARNATAKA HC) WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT 'IN TERMS OF S. 69B, EXCESS AMOUNT MIGHT BE DEEMED TO BE INCOME OF ASSESSEE FOR FINANCIAL YEAR-HOWEVER, WHEN EXCESS AM OUNT WAS IN NATURE OF INVESTMENT ON BUILDING AND THAT BUILDING WAS SOLD TO PROSPECTIVE PURCHASER, THAT INVESTMENT WAS IN NATUR E OF EXPENDITURE-UNEXPLAINED INCOME HAS TO BE SET OFF AG AINST EXPENDITURE AND NET TAX COULD BE 'NIL '-NO CASE FOR INTERFERENCE WAS MADE OUT-REVENUE' S APPEAL DISMISSED' SIMILAR FINDINGS HAVE BEEN GIVEN BY THE HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF C1T V STAR BUILDERS (2007)294 ITR 33 8 WHEREIN IN PARA 4 OF THE ORDER IT WAS HELD BY THE COURT THAT: 'ASSUMING BUT NOT ACCEPTING THAT SOME UNEXPLAINED I NCOME HAS BEEN INVESTED IN THE CONSTRUCTION, THE FACT REMAINS THAT THE BUSINESS OF THE ASSESSEE IS CONSTRUCTION IF WE ADD ON ACCOUNT OF UNEXPLAINED INCOME IN THE INVESTMENT, THAT WILL GIV E RISE TO THE COST OF THE CONSTRUCTION AND THE RESULT WILL REMAIN THE SAME I.E. 'ZERO'. UNDER THE CIRCUMSTANCES IT IS REQUESTED THAT IN CAS E THE VALUATION MADE BY THE DVO IS ADOPTED WHOLLY OR PARTLY AND ADD ITIONS ARE SUSTAINED ON THIS ACCOUNT THAN THE AO BE DIRECTED T O MAKE CORRESPONDING ADJUSTMENTS TO THE EXPENSES INCURRED BY THE ASSESSEE ON CONSTRUCTION. DISCUSSION AND APPELLATE DECISION:- 6.3 SUBMISSION FILED BY APPELLANT ALONG WITH THE DETAIL S / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. CASE L AWS RELIED UPON BY THE APPELLANT HAVE BEEN PERUSED AND CONSIDERED. DUE CONSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVE D AT IN THE ASSESSMENT ORDER AND IN THE REMAND REPORT. IT IS SEEN THAT AS PER THE PROVISIONS OF SECTION 14 2A (1) REFERENCE CAN BE MADE TO THE VALUATION OFFICER FOR ESTIMATING ' . .. . THE VALUE INCLUDING FAIR MARKET VALUE, OF ANY ASSET, PROPERTY OR INVESTMENT .. ' THUS THE ACT DOES NOT PROVIDE FOR ANY REFERENCE TO BE MADE FOR ASCERTAINING OR ESTIMATING THE UNEXPLAINED EXPENSES . FURTHER IT IS SEEN THAT THE PROVISION OF SECTION 69 C PROVIDES THAT WHERE THE ASSESSEE IS FOUND TO HAVE INCURRED ANY EXPENDIT URE AND HE FAILS TO EXPLAIN THE SOURCE OF SUCH EXPENDITURE TO THE SATIS FACTION OF THE ASSESSING OFFICER THE EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 72 THE ASSESSEE. THE PROVISO TO THE SECTION PROVIDES T HAT SUCH EXPENDITURE WILL NOT BE ALLOWED AS DEDUCTION UNDER A NY HEAD OF INCOME. SIMILARLY PROVISION OF SECTION 69 AND 69B PROVIDE T HAT WHERE THE ASSESSEE IS FOUND TO HAVE MADE ANY INVESTMENT, THE SOURCE OF WHICH IS NOT EXPLAINED TO THE SATISFACTION OF THE ASSESSI NG OFFICER THE VALUE OF UNEXPLAINED PORTION OF THE INVESTMENT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE. IT IS INTERESTING TO NOTE H ERE THAT THE PROVISO REGARDING ALLOWANCE OF SUCH ADDITION AS DEDUCTION W HICH IS PROVIDED IN SECTION 69C DOES NOT FIND PLACE IN SECTION 69 AN D 69B. IN CASE OF BUILDERS/DEVELOPERS/CONTRACTORS THE EXPE NSE INCURRED ON ACCOUNT AND THUS IS AN EXPENSE. THUS PROVISIONS OF SECTION 69C WOULD BE APPLICABLE TO SUCH CASES AND IF THE ASSESSEE IS FOUND TO HAVE INCURRED ANY UNEXPLAINED EXPENSE THE SAME WILL BE D EEMED TO BE THE INCOME OF THE ASSESSEE & THE ASSESSEE WOULD NOT BE ENTITLED TO CLAIM ANY DEDUCTION OF THE UNEXPLAINED EXPENSE. HOWEVER T HE LAW DOES NOT PROVIDE ANY POWER TO THE AO TO MAKE A REFERENCE TO THE DVO FOR DETERMINATION OF UNEXPLAINED EXPENSE AND IN SUCH CA SE THE REPORT OF THE DVO IF OBTAINED WILL HAVE TO BE IGNORED AND NO A DDITION WOULD BE PERMISSIBLE ON THE BASIS OF THE DVO REPORT. THE AO IN THE CASE OF THE ASSESSEE HAS MADE ADDITIO N U/S 69B OF THE ACT. THE SAID SECTION DOES NOT PUT ANY RESTRICTION ON THE ASSESSEE IN MAKING A CLAIM FOR DEDUCTION OF THE EXPENSE INCURRE D. THUS ONCE THE ASSESSEE IS FOUND TO HAVE INCURRED ANY UNEXPLAINED EXPENSE THE SAME WILL DEEMED TO BE THE INCOME OF THE ASSESSEE. HOWEV ER IN ABSENCE OF ANY RESTRICTION U/S 69B, THE AO WOULD BE DUTY BOUND TO PROVIDE THE DEDUCTION OF THE EXPENSE INCURRED. THUS THE ADDITIO N WOULD BE REVENUE NEUTRAL AND NO EFFECTIVE ADDITION CAN BE MA DE IN SUCH CASE. RELIANCE IN THIS REGARDS IS PLACED ON THE FOLLOWING JUDGMENTS: CLT V SURAJ TOWERS (2015) 230 TAXMAN 306(KARNATAKA HC) WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT 'IN TERMS OF S. 698, EXCESS AMOUNT MIGHT BE DEEMED TO BE INCOME OF ASSESSEE FOR FINANCIAL YEAR-HOWEVER, WHEN EXCESS AMOUNT WAS IN NATURE OF INVESTMENT ON BUILDING AND THAT BUILDING WAS SOLD TO PROSPECTIVE PURCHASER, THAT INVESTMENT WAS IN NATURE OF EXPENDITURE-UNEXPLAINED INCOME HAS TO BE SET OFF AGAINST EXPENDITURE AND NET TAX COULD BE 'NIL'NO CASE FOR INTERFERENCE WAS MADE OUT-REVENUE'S APPEAL DISMISSED' M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 73 CIT V. STAR BUILDERS (2007)294 ITR 338 (GUJARAT HIG H COURT) WHEREIN IN PARA 4 OF THE ORDER IT WAS HELD BY THE C OURT THAT: 'ASSUMING BUT NOT ACCEPTING THAT SOME UNEXPLAINED I NCOME HAS BEEN INVESTED IN THE CONSTRUCTION, THE FACT REMAINS THAT THE BUSINESS OF THE ASSESSEE IS CONSTRUCTION. IF WE ADD ON ACCOUNT OF UNEXPLAINED INCOME IN THE INVESTMENT, THAT WILL GIV E RISE TO THE COST OF THE CONSTRUCTION AND THE RESULT WILL REMAIN THE SAM E I.E. 'ZERO'. THUS AS PER THE PROVISIONS OF THE ACT AND RELYING ON THE JUDGMENTS OF THE HIGH COURTS REFERRED ABOVE I AM OF THE FIRM OPINION THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTI ON OF ANY EXPENSES WHICH HAS BEEN DEEMED TO BE ITS INCOME U/S 69B. ACCORDINGLY THE AO IS DIRECTED TO PROVIDE DEDUCTION OF THE ADDITION MADE U/S 69B TOWARDS UNEXPLAINED EXPENDITUR E INCURRED BY THE ASSESSEE. IN VIEW OF THE ABOVE DISCU SSION GROUND NO. 4 FOR AYS 2011-12 TO 2014-15 IS HEREBY ALLOWED. 54. WE HAVE PERUSED THE ABOVE FINDING OF LD. CIT(A) AND FIND NO REASON TO INTERFERE IN THE SAME AS IT HAS BEEN ARRI VED AT AFTER CONSIDERING THE SETTLED JUDICIAL PRECEDENCE WHICH H AS NOT BEEN REBUTTED BY LD. DEPARTMENTAL REPRESENTATIVE. IN TH E RESULT THE COMMON GROUND NO.2 RAISED BY THE REVENUE FOR ASSESS MENT YEARS 2012-13 TO 2014-15 IS DISMISSED. 55. AS REGARDS GROUND NO.3 OF REVENUES APPEAL IN T HE CASE OF M/S. SIGNATURE BUILDERS FOR ASSESSMENT YEAR 2012-13 THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF UNDISCLOSED INV ESTMENT AT RS.10,00,000/- IN PURCHASE OF LAND IS UNDER CHALLEN GE. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE HAD PU RCHASED LAND FROM M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 74 SMT. KAMLA DEVI SAHU VIDE REGISTERED PURCHASE AGREE MENT DATED 24.02.2010 FOR TOTAL PURCHASE CONSIDERATION OF RS.3 0,00,000/-. DURING POST SEARCH ENQUIRIES IT WAS OBSERVED BY THE DEPARTMENT THAT THERE WAS CASH DEPOSIT OF RS. 24,00,000/- AND RS. 10,00,000/- IN THE BANK ACCOUNT OF THE SELLER DURING F.Y 2009-1 0 AND F.Y 2010- 11 RESPECTIVELY. THE DEPARTMENT HAD ISSUED SUMMONS TO THE SELLER WHO HAD NOT RESPONDED TO THE SUMMONS AND HAVE NOT A PPEARED BEFORE THE AO AND ACCORDINGLY NO EXPLANATION OF THE SOURCE OF CASH DEPOSIT IN THE ACCOUNT OF THE SELLER COULD BE OBTAI NED. UNDER THE CIRCUMSTANCES THE CASH DEPOSITED IN HER ACCOUNT WAS PRESUMED TO BE CASH PAYMENT MADE BY THE ASSESSEE FOR THE SIMPLE REASON THAT THE DATES OF THE CASH DEPOSITS WERE NEAR ABOUT THE DATES ON WHICH CHEQUE PAYMENTS WERE MADE BY THE ASSESSEE AND ADDIT ION WERE MADE IN THE HANDS OF THE ASSESSEE U/S 69 AS UNEXPLA INED INVESTMENT. THE LAND WAS REGISTERED IN THE FAVOUR O F THE ASSESSEE ON 24.02.2010 WHEREAS CASH OF RS. 10,00,000/- WAS DEPO SITED IN THE ACCOUNT OF THE SELLER ON 10.08.2010 AND NO PRUDENT UNRELATED PERSON(SELLER) WILL GET THE PROPERTY REGISTERED IN FAVOUR OF THE PURCHASER WITHOUT OBTAINING THE CASH PAYMENTS FIRST . THE OBJECTION OF THE ASSESSEE IN THIS REGARD WAS HOWEVER REJECTED BY THE AO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 75 MENTIONING THAT THE CASH WAS DEPOSITED NEAR ABOUT T HE DATE OF PAYMENT BY CHEQUE. 56. BEFORE THE LD. CIT(A) THE ARGUMENTS WERE ADVANC ED THAT THERE IS NO PROOF OF ANY CASH PAYMENT BY THE ASSESSEE AND THE DEPOSITS OF CASH IN THE ACCOUNT OF THE SELLER CANNOT BE CONNECT ED WITH THE ASSESSEE. FURTHER IF ANY ADDITION IS REQUIRED TO BE MADE, THE SAME SHOULD HAVE BEEN MADE IN HER HANDS. THE ASSESSEE WA S UNDER NO OBLIGATION TO EXPLAIN SUCH CASH DEPOSIT. THERE IS N O MATERIAL ON RECORD TO SUGGEST THAT THE CASH WAS DEPOSITED BY TH E ASSESSEE. THE DEPARTMENT HAS FAILED TO OBTAIN ANY SUCH ALLEGATION FROM THE SELLER. AFTER CONSIDERING THE ARGUMENTS, THE LD. CIT(A) HAS DELETED THE ADDITION. 57. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 58. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTING THE ORDER OF LD. A.O. 59. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORT ED THE FINDING OF LD. CIT(A) AND FURTHER SUBMITTED THAT THE ADDITI ON CANNOT BE MADE IN THE HANDS OF THE ASSESSEE FOR DEPOSITS IN O THER CASE WITHOUT ANY PROOF OR CONFIRMATION FROM ANYBODY WHIC H SHOWS THAT M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 76 THE AMOUNT IS DEPOSITED BY THE ASSESSEE AND THUS TH E ADDITION MADE BY THE LD. A.O IS MERELY ON SURMISES WITHOUT A NY BASIS OF POSITIVE EVIDENCE. 60. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE REVENUE HAS CHALLENGED THE D ELETION OF ADDITION MADE BY LD. CIT(A) AT RS.10,00,000/- FOR U NDISCLOSED INVESTMENT IN PURCHASE OF LAND. LD. CIT(A) AFTER C ONSIDERING THE SUBMISSIONS AND OTHER RELEVANT MATERIAL FACTS DELET ED THE ADDITION OBSERVING AS UNDER:- 7.3 SUBMISSION FILED BY APPELLANT ALONG WITH THE DETAIL S / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. DUE CO NSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVED AT IN THE ASSESS MENT ORDER. THE APPELLANT DURING ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS STRONGLY OPPOSED THE ADDITION MADE BY T HE AO ON ACCOUNT OF CASH DEPOSIT IN THIRD PARTY ACCOUNT I.E. SMT KAML A DEVI SAHU. ON PERUSAL OF WRITTEN SUBMISSION FILED BY THE ASSESSEE BEFORE AO IT HAS BEEN CLAIMED THAT THE LAND PURCHASED FROM SMT KAMLA DEVI SAHU IS ADJOINING TO SLUM CLUSTER AND HAS BEEN ENCROACHED B Y THE SLUM DWELLERS THEREFORE, THE ASSESSEE WAS NOT IN POSSESS ION OF THE SAID LAND. THE APPELLANT HAS ALSO FILED A SUIT IN THE CO URT IN ORDER TO GET THE ENCROACHMENT REMOVED AND PROVIDE EFFECTIVE POSSESSI ON OF THE LAND. THE ASSESSEE ALSO REQUESTED AO TO GET THE STATUS OF THE LAND VERIFIED. THE APPELLANT HAS ALSO TAKEN AN ALTERNATE PLEA THAT NO OVER AND ABOVE PAYMENT TO THE REGISTERED VALUE WAS PAID AND THE CA SH HAS BEEN DEPOSITED IN THE ACCOUNT OF SMT KAMLA DEVI SAHU SO THE SAME MAY BE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 77 VERIFIED FROM HER. FURTHER, APPELLANT STATED THAT N O SUMMONS WERE ISSUED TO THE ACCOUNT HOLDER. OTHERWISE ALSO ON MERITS IT IS SEEN THAT THE ADDITI ON IS MADE ON THE BASIS OF CASH FOUND DEPOSITED IN THE BANK ACCOUNT O F THE SELLER NEAR ABOUT THE DATES ON WHICH THE PROPERTY HAS BEEN PURC HASED BY THE ASSESSEE/PAYMENTS HAVE BEEN MADE. SUMMON WERE ISSUE D TO THE SELLER FOR EXPLAINING THE SOURCE OF CASH DEPOSITS IN THE B ANK ACCOUNT BUT SHE HAS NOT RESPONDED TO THE SUMMONS ISSUED AND HENCE N O STATEMENT OF THE SELLER WAS RECORDED. NO EVIDENCE IS FOUND DURING THE COURSE OF SEARCH OR DURING THE ASSESSMENT PROCEEDING TO INDIC ATE THAT THE ASSESSEE HAS MADE ANY UNRECORDED PAYMENT TO THE SELLER. THE PURCHASE PRICE OF THE LAND UNDER CONSIDERATION IS RS. 30 LAKHS AS AGAINST ITS MARKET VALUE FOR THE PURPOSE 01 STAMP DUTY BEING RS. 1.69 CRORES AND THE REASON TOR DIFFERENCE IS EXPLAINED TO BE PURCHASE OF LAND AT LOWER VALUE DUE TO ENCROACHMENT ON LAND TOR WHICH SUIT IS CLAIMED TO BE PENDING IN THE COURTS AND THE AO HAD NOT DISPUTED THIS FACTUAL POSITION. THE PROPERTY HAS BEEN PURCHASED B Y REGISTERED PURCHASE DEED ON 24.02.2010 WHEREAS RS. 10 LAKH ARE DEPOSITED IN THE BANK ACCOUNT 01 THE SELLER ON 10.08.2010. THE CASH OF RS. 24 LAKH IS DEPOSITED IN THE ACCOUNT 01 THE SELLER DURING F.Y 2009-10 A.Y 2010- 11) & RS.L0 LAKH DURING F.Y 2010-12L A.Y 2011-12) THE ONUS OF EXPLAINING THE SOURCE OF CASH DEPOSITED IN THE ACCOUNT OF THE SELLER WAS ON THE ACCOUNT HOLDER I.E. SMT KAMLA DEVI SAHU) AND THE SAME CANNOT BE SHIFTED TO THE PURCHASER I.E. AP PELLANT) WITHOUT BRINGING ON RECORD ANY MATERIAL EVIDENCE TO ESTABLI SH THAT THE CASH DEPOSITED HAD BEEN PAID BY THE ASSESSEE. THE CASH D EPOSIT OF 10.08.2010 CANNOT BE LINKED TO THE PURCHASE DEED RE GISTERED ON 24.02.2010 AS IT IS NOT PROBABLE THAT A PERSON WOUL D AGREE TO TAKE CASH F OR A SALE TRANSACTION EIGHT MONTHS AFTER THE EXECUTION 0F M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 78 REGISTERED SALE DEED. THE ADDITIONS ARE ACCORDINGLY REQUIRED TO BE DELETED. FURTHER. IT IS TRITE LAW THAT NO ADDITION CAN BE MADE ON ACCOUNT 0F SHEAR PRESUMPTION. HOWEVER. HOW STRONG THE PRESUMPT ION MAY BE. IT HAS BEEN PRESUMED BY THE AO THAT CASH DE POSITED IN THE BANK ACCOUNT 0F SELLER WAS DEPOSITED BY THE APPELLANT AND TREATED TH E SAME AS UNEXPLAINED INVESTMENT MADE BY THE APPELLAN T. THIS IS POTENTLY WRONG AND UNJUSTIFIED APPROACH ON THE PART OF THE A.O. BECAUSE HE HAS MADE SUCH HUGE ADDITION SIMPLY ON PR ESUMPTION AND ASSUMPTION WITHOUT BRINGING ANY POSITIVE EVIDENCE O N RECORD. IN THE CASE OF CIT V/S RAM NARAIN GAEL 224 ITR 180 (P & H) IT HAS BEEN HELD THAT SUSPICION HOWEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE. HON'BLE P & H HIGH COURT IN THE CASE OF CIT V/S FAQUIR CHAMAN LAL 262 ITR 295 (P & H) HAS HELD THAT IT IS WELL SETTLED PROPOSITION THAT T HE PRESUMPTION HOWEVER STRONG CANNOT SUBSTITUTE EVIDEN CE. SIMILAR WERE THE FINDINGS OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V/S EMERALD COMMERCIAL LTD & ANR 250 ITR 539( CAL), IN VIEW OF THE ABOVE DISCUSSION ADDITIONS MADE BY THE AO DOES NOT HOLD G ROUND. THUS, ADDITION OF RS, 24,00,000/- IN AY 2011-12 AND RS, 1 0,00,000/- IN AY 2012-13 MADE BY THE AO ON ACCOUNT OF UNEXPLAINED IN VESTMENT IN PURCHASE OF LAND IS HEREBY DELETED. THE APPEALS ON THIS GROUND ARE ALLOWED. 61. FROM PERUSAL OF THE ABOVE FINDING OF LD. CIT(A) AND EXAMINING THE FACTS PLACED BEFORE US, WE OBSERVE THAT THE ADD ITION WAS MADE ON THE BASIS OF CASH DEPOSITS IN THE BANK ACCOUNT O F SELLER WHO DO NOT RESPONSE TO THE SUMMONS OF THE DEPARTMENT NOR E VER APPEARED BEFORE THE LD. A.O SO AS TO EXPLAIN THE CASH DEPOSI TS IN HER ACCOUNT. UNDER THESE CIRCUMSTANCES WE FIND NO JUSTIFICATION IN THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 79 OBSERVATION OF THE LD. A.O THAT THE CASH DEPOSIT OF RS.10,00,000/- IN THE ACCOUNT OF SELLER ON 10.8.2010 IS IN CONNECT ION WITH THE LAND SOLD VIDE REGISTRY DEED IN FAVOUR OF THE ASSESSEE O N 24.02.2010 WAS PAID BY THE ASSESSEE. IN THESE GIVEN FACTS THE DEP OSIT OF CASH IN THE ACCOUNT OF THE SELLER CANNOT BE CONNECTED WITH THE ASSESSEE WITHOUT ANY MATERIAL ON RECORD TO SUGGEST SUCH TRANSACTION. THEREFORE LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND DELETE D THE ADDITION. NO INTERFERENCE IS THUS CALLED FOR. GROUND NO.3 OF THE REVENUE APPEAL (IT(SS)A NO.174/IND/2018) FOR ASSESSMENT YEA R 2012-13 STANDS DISMISSED. 62. AS REGARDS GROUND NO.3 RAISED BY THE REVENUE (I T(SS)A NO.176/IND/2018) FOR ASSESSMENT YEAR 2014-15 FOR TH E ADDITION OF UNEXPLAINED CASH U/S 69A OF THE ACT AT RS.1,43,910/ - MADE BY THE LD. A.O AND SUBSEQUENTLY DELETED BY LD. CIT(A), B RIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH CASH IN H AND AS SHOWN IN THE BOOKS WAS RS.4,06,672/- OUT OF WHICH RS. 3,00,0 00/- WAS CLAIMED TO BE KEPT WITH THE PARTNER AND BALANCE WAS CLAIMED TO BE LYING IN THE OFFICE BUT LD. A.O DID NOT ACCEPT THIS CONTENTION AND MADE ADDITION FOR RS.1,43,910/- WHICH WAS DELETED B Y LD. CIT(A) M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 80 AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE THE T RIBUNAL. 63. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTING THE ORDER OF LD. A.O. 64. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORT ED THE FINDING OF LD. CIT(A). 65. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THROUGH GROUND NO.4 REVENUE HAS CHALLENGED THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.1,43,910/- MADE BY THE LD. A.O U/S 69A AS UNEXPLAINED CASH. W E OBSERVE THAT LD. CIT(A) DELETED THE ADDITION OF RS.1,43,910 /- OBSERVING AS FOLLOWS:- 10.2 SUBMISSION FILED BY APPELLANT ALONG WITH THE DETAILS / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. DUE CO NSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVED AT IN THE ASSESSME NT ORDER. DURING THE COURSE OF SEARCH THE ASSESSEE WAS FOUND TO BE IN PHYSICAL POSSESSION OF CASH OF RS. 1,43,910/- AT THE TIME OF SEARCH. THE APPELLANT BEFORE AO AND BEFORE ME HAS CLAIMED THAT A S PER ITS BOOKS OF ACCOUNTS CASH IN HAND AS ON DATE OF SEARCH WAS RS.4 ,06,672/- PUT OF WHICH RS. 3,00,000/- WAS KEPT BY SHRI VIPIN CHAUHAN AND BALANCE OF RS. 1,06,672/- IS PART OF CASH FUND AT PREMISES OF THE APPELLANT. THE AO HAD HOWEVER NOT ACCEPTED THE CLAIM OF THE ASSESS EE ON THE BASIS THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDENCE. IT HAS TO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 81 BE APPRECIATED THAT THE CASH BALANCE AS PER BOOKS O F ACCOUNT MAINTAINED IN REGULAR COURSE OF BUSINESS IS REQUIRE D TO BE VERIFIED FROM THE CASH BOOK AND NO OTHER SUPPORTING EVIDENCE IS R EQUIRED. THE AO HAD NOT BROUGHT ON RECORD ANY OBSERVATION THAT THE CLAIM OF THE ASSESSEE OF HAVING A CASH BALANCE OF RS. 4,06,672/- AS PER THE BOOKS OF ACCOUNT SEIZED AND AS PER THE BOOKS OF ACCOUNT P RODUCED BEFORE THE AO IS INCORRECT. IN FACT APPELLANT HAS FURNISHED BO OKS OF ACCOUNTS BEFORE AO WHICH WERE DULY VERIFIED BY HIM. THEREFOR E THE ADDITION MADE BY THE AO ON THIS ACCOUNT TO THE TUNE OF RS. 1 ,43,910/- IS DIRECTED TO BE DELETED. THE APPEAL ON THIS GROUND I S ALLOWED. 66. FROM PERUSAL OF THE FINDING OF LD. CIT(A) WE FI ND THAT LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND DELETE D THE ADDITION OF RS.1,43,910/- WHICH THUS CALLS FOR NO INTERFERENCE AND THUS GROUND NO.4 OF REVENUE STANDS DISMISSED. 66A. THUS IN THE CASE OF SIGNATURE BUILDERS, ASSESS EES APPEAL FOR ASSESSMENT YEAR 2012-13 IS DISMISSED AND THAT OF AS SESSMENT YEARS 2013-14 & 2014-15 ARE ALLOWED WHEREAS REVENUES APP EAL FOR ASSESSMENT YEARS 2012-13 TO 2014-15 STANDS DISMISSE D. 67. NOW WE TAKE UP THE APPEALS IN THE CASE OF M/S S IGNATURE INFRASTRUCTURE. THE ASSESSEE(S) APPEAL PERTAINS TO ASSESSMENT YEAR 2013- 14 & 2014-15 VIDE IT(SS) NO. 187 & 188/IND/2018 AN D THAT OF REVENUE FOR ASSESSMENT YEAR 2012-13 (IT SS(A) NO.02/IND/201 9). IN ASSESSES APPEAL THE COMMON GROUND RAISED IS AGAINST THE FIND ING OF LD. CIT(A) CONFIRMING THE ADDITION MADE BY THE LD. A.O AT RS.5 0,00,000/- AND RS.3,00,00,000/- FOR ASSESSMENT YEARS 2013-14 & 201 4-15 MADE ON THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 82 BASIS OF INCOME DECLARED BY THE ASSESSEE IN THE STA TEMENT GIVEN U/S 132(4) OF THE ACT. 68. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT SIMILAR ISSUE IS ALSO RAISED IN THE CASE OF ANOTHER GROUP CONCERN M/S SIGNATURE BUILDERS IN ITA NO.185 & 186/IND/2018 AND THE SUBMISSIONS AND CONTENTIONS RAISED THEREIN MAY BE C ONSIDERED FOR ADJUDICATING THE INSTANT ISSUE IN THE CASE OF M/S S IGNATURE INFRASTRUCTURE. 69. LD. DEPARTMENTAL REPRESENTATIVE IS FAIR ENOUGH TO ACCEPT THAT THE ISSUE RAISED BY THE ASSESSEE NAMELY M/S SIGNATU RE INFRASTRUCTURE IN IT(SS)A NO.187&188/IND/2018 ARE S IMILAR TO THE ISSUE RAISED BY THE ASSESSEE NAMELY M/S SIGNATURE B UILDERS IN ITA NO.185&186/IND/2018 AND ACCORDINGLY SUPPORTED THE F INDING OF BOTH THE LOWER AUTHORITIES. 70. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE REC ORDS AND SUBMISSIONS MADE BEFORE US. THE ASSESSEE NAMELY M/S SIGNATURE INFRASTRUCTURE HAS RAISED THE COMMON ISSUE FOR ASSE SSMENT YEAR 2013-14 AND 2014-15 WITH REGARD TO THE ADDITION OF RS.50,00,000/- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 83 AND RS.3,00,00,000/- CONFIRMED BY THE LD. CIT(A) WH ICH WAS MADE BY THE LD. A.O ON THE BASIS OF INCOME DECLARED BY T HE ASSESSEE IN THE STATEMENT GIVEN U/S 132(4) OF THE ACT. WE OBSER VE THAT IN THE CASE OF ASSESSEES APPEAL M/S SIGNATURE BUILDERS SI MILAR ISSUE WAS RAISED FOR ASSESSMENT YEAR 2013-14 AND 2014-15 FOR THE ADDITION MADE ON THE BASIS OF INCOME DECLARED BY THE ASSESSE E U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH CARRIED OUT ON 29.01.2014. INCOME WAS DECLARED BY THE AUTHORISED REPRESENTATIV E OF THE SIGNATURE GROUP UNDER THE NAME OF VARIOUS CONCERNS IN THE STATEMENT MADE U/S 132(4) OF THE ACT. SUBSEQUENTLY WHEN THE ASSESSEE WAS REQUIRED TO FILE RETURN OF INCOME IN R ESPONSE TO NOTICE U/S 153A OF THE ACT THE IMPUGNED INCOME WAS NOT SHO WN IN THE INCOME TAX RETURN ON THE BASIS OF THE ASSESSEES OB SERVATION THAT THERE WAS NO INCRIMINATING MATERIAL SEIZED DURING T HE COURSE OF SEARCH WHICH COULD SUPPORT THE IMPUGNED AMOUNT. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO THE ADDITION MADE BY THE LD. A.O WAS PURELY ON THE BASIS OF STATEMENT GIVEN DURI NG THE COURSE OF SEARCH. NOWHERE IN THE ASSESSMENT ORDER THE LD. A. O HAS BROUGHT ON RECORD ANY INCRIMINATING MATERIAL OR LOOSE PAPER SEIZED DURING THE COURSE OF SEARCH HAVING ITS NEXUS WITH THE ADDI TION MADE ON THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 84 BASIS OF STATEMENT. WE FURTHER OBSERVE THAT IN ONE OF THE GROUP CONCERN M/S ULTIMATE BUILDERS ITA NO.134/IND/2019 ORDER DAT ED 9.8.2019 SIMILAR ISSUE CAME FOR ADJUDICATION AND THIS TRIBU NAL ON THE BASIS OF THE FACTS OF THE CASE AS WELL AS RELYI NG ON THE JUDICIAL PRONOUNCEMENTS DELETED THE ADDITION SINCE THE SAME WERE MADE WITHOUT REFERRING TO THE INCRIMINATING MATERIAL FOU ND DURING THE COURSE OF SEARCH. THE FINDING OF THIS TRIBUNAL IN THE CASE OF M/S ULTIMATE BUILDERS HAS BEEN REPRODUCED IN THE PRECED ING PARAS WHILE DEALING WITH THE SIMILAR ISSUE RAISED IN THE CASE O F M/S SIGNATURE BUILDERS. SINCE THE ISSUE AND FACTS REMAINS THE SA ME LD. DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT THIS FACT THAT THE IMPUGNED ADDITION WAS NOT BASED ON INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH AND IS JUST ON THE BASI S OF THE STATEMENT GIVEN U/S 132(4) OF THE ACT. WE IN THE C ASE OF M/S SIGNATURE BUILDERS HAVE HELD IN PARA 21 OF THIS OR DER AS FOLLOWS:- 21. FROM PERUSAL OF THE ABOVE FINDING OF THIS TRIBU NAL IN THE CASE OF M/S ULTIMATE BUILDERS (SUPRA), WE FIND THAT THE COMMON ISSUE RAISED IN GROUND NO.3 OF M/S SIGNATURE BUILDE RS IS IDENTICAL TO THE ISSUE RAISED AND ADJUDICATED IN TH E CASE OF M/S ULTIMATE BUILDERS (SUPRA). WE THEREFORE RESPECTFUL LY FOLLOWING THE SAME AND ALSO IN VIEW OF THE IDENTICAL FACT TH AT IMPUGNED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 85 ADDITION OF RS.25,00,000/- AND RS.3,00,00,000/- MA DE BY THE LD. A.O WAS PURELY BASED ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT AND THERE WAS NO REFERENCE TO ANY INCRIMINA TING MATERIAL FOUND DURING THE COURSE OF SEARCH WHICH CO ULD SUPPORT THE IMPUGNED ADDITION. WE THEREFORE DELETE THE ADD ITION OF RS.25,00,000/- FOR ASSESSMENT YEAR 2013-14 AND RS.3,00,00,000/- FOR ASSESSMENT YEAR 2014-15 AND SE T ASIDE THE ACTION BY BOTH THE LOWER AUTHORITIES AND ACCORD INGLY ALLOW GROUND NO.3 OF ASSESSEES APPEAL FOR ASSESSMENT YEA RS 2013- 14 AND 2014-15 RAISED IN ITA NO.185-186/IND/2018. 71. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISIO N OF THIS TRIBUNAL IN THE CASE OF M/S ULTIMATE BUILDERS (SUPRA) AND ALSO OTHER FACTS OF THE CASE ARE OF THE CONSIDERED VIEW THAT T HE FINDING OF LD. CIT(A) DESERVES TO BE SET ASIDE AND ADDITION OF RS. 50,00,000/- AND RS.3,00,00,000/- MADE FOR ASSESSMENT YEAR 2013-14& 2014-15 IS DIRECTED TO BE DELETED. ACCORDINGLY GROUND NO.1 RA ISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2013-14 (IT(SS)A NO.18 7/IND/2019) AND FOR ASSESSMENT YEAR 2014-15 (IT(SS)A NO.188/IND /2019) ARE ALLOWED. 72. THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE ABOVE APPEALS ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 86 73. NOW WE TAKE UP REVENUES APPEAL FOR ASSESSMENT YEAR 2012- 13 IT(SS)A NO.02/IND/2019. GROUND NO.1 RAISED BY T HE REVENUE READS AS FOLLOWS:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CLT(A) ERRED IN DELETING THE ADDITION OF RS. 3,36,13,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT U/S 69B.. 74. BRIEF FACTS RELATING TO THIS GROUND ARE THAT TH E ASSESSEE HAD PURCHASED 6.40 ACRES OF LAND AT VILLAGE BAGLI FROM SHRI MOTILAL VIDE THREE REGISTERED PURCHASE DEEDS DATED 19.07.2011, 2 3.01.2012 AND 31.05.2012 FOR A TOTAL PURCHASE CONSIDERATION OF RS . 2,91,62,000/- WHICH WAS DULY RECORDED IN THE REGULAR BOOKS OF ACC OUNTS OF THE ASSESSEE. DURING POST SEARCH INVESTIGATION STATEMEN T OF MR. MOTILAL WHO WAS THE SELLER OF THE LAND WAS RECORDED WHO STA TED THAT HE HAS SOLD THE LAND UNDER CONSIDERATION TO MR. THAKUR PRA SAD @RS. 1 CRORE PER ACRE. BASED ON THIS STATEMENT SHOW CAUSE WAS ISSUED TO THE ASSESSEE PROPOSING AN ADDITION OF RS. 3,48,30,0 00/- AS UNEXPLAINED INVESTMENT IN PURCHASE OF THE LAND(RS. 6.40 CRORE 2.92 CRORE). DETAILED SUBMISSIONS WERE MADE BEFORE THE AO ON THE PROPOSED ADDITION WHICH WERE FOUND NOT ACCEPTABLE A ND THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 87 ADDITION WAS MADE BY THE AO AFTER MAKING THE FOLLOW ING OBSERVATION: I. THE SELLER HAS SPECIFICALLY CONFIRMED THE SALE AT R S. 1 CRORE PER ACRE. II. THE CONTENTION OF THE ASSESSEE THAT THE SELLER HAS NEVER HAD ANY INTERACTION WITH THEM IS NOT RELEVANT AS TH E LAND HAS BEEN PURCHASED BY THE ASSESSEE FROM THE SELLERS AND THE PAYMENTS ARE MADE BY THE ASSESSEE DIRECTLY TO THE S ELLER III. THE ASSESSEES CONTENTION REGARDING NOT PROVIDING T HE DETAILS OF UTILISATION OF THE SALE PROCEEDS IS NOT RELEVANT AS THE SELLER HAS SPECIFICALLY CONFIRMED THE SALE RATE OF RS. 1 CRORE PER ACRE. 75. A SPECIFIC REQUEST WAS MADE FOR SUPPLYING A COP Y OF THE STATEMENT OF THE SELLER AND FOR PROVIDING AN OPPORT UNITY TO CROSS EXAMINE THE SELLER. HOWEVER THE REQUEST WAS NOT ACC EPTED. IT WAS FURTHER SUBMITTED BEFORE THE LD. A.O. THAT NO EVIDE NCE WAS FOUND DURING THE COURSE OF SEARCH OR AFTER WORDS TO SUBST ANTIATE THAT THE ASSESSEE HAS MADE ANY PAYMENT OVER AND ABOVE THE VA LUE RECORDED IN THE BOOKS OF ACCOUNTS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS ENTITLED TO CLAIM ADJUSTMENT OF SUCH EXPENSES. T HE ADDITION MADE ON THIS COUNT WOULD ULTIMATELY RESULT INTO SQUARING OFF THE WHOLE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 88 ADDITION SINCE ON ONE SIDE THE ADDITION IS MADE AND ON THE OTHER SIDE THE DEDUCTION IS TO BE ALLOWED AS COST OF CONS TRUCTION.THE LD. A.O. HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND MADE THE ADDITION. 76. IN APPEAL BEFORE THE LD. CIT(A) THE CONTENTIONS WERE RAISED. THE LD. CIT(A) WAS PLEASED TO REMAND THE MATTER AND ALLOW THE ASSESSEE TO CROSS EXAMINE THE SAID PERSON. THE LD. CIT(A) HAS REPRODUCED THE COPY OF THE STATEMENT AT PG. 13 OF T HE ORDER. FOR REPLY TO Q.6 THE SELLER SPECIFICALLY SAID THAT THE LAND IN QUESTION HAS BEEN SOLD FOR RS.1 CRORE PER HECTARE. THE LD. CIT(A ) ON THE BASIS OF THIS STATEMENT CONCLUDED THAT THE LAND IN QUESTION WAS SOLD FOR RS.1 CRORE PER HECTARE AND NOT 1 CRORE PER ACRE. HE FURTHER OBSERVED THAT IN THE REMAND REPORT THE A.O. HAS NOT BROUGHT ON RECORD ANY CONVINCING MATERIAL TO DISBELIEVE THE STATEMENT. AC CORDINGLY, THE CIT(A) HAS DELETED THE ADDITION. 77. NOW THE REVENUE IS IN APPEAL BEFORE THIS TRIBUN AL. 78. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF LD. A.O. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 89 79. PER CONTRA LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE DETAILED FINDING OF LD. CIT(A) AND SUBMITTED THAT I N THE FIRST STATEMENT OF THE SELLER HE ASSERTED THAT THE LAND I S AGREED TO BE SOLD TO THAKUR PRASAD RAJPUT AND HE IS NOT IN KNOWLEDGE OF THE FACT THAT THE LAND IS SOLD TO SIGNATURE INFRASTRUCTURE, BHOPA L. THE STATEMENT OF THE FARMER WAS RECORDED AFTER THE SEARCH AND THE COPY OF THE SAME WAS NOT PROVIDED TO THE ASSESSEE. WITHOUT PROV IDING ANY OPPORTUNITY TO CROSS EXAMINE, THE SAID STATEMENT IS NOT BINDING ON THE ASSESSEE. THE SELLER ALSO WAS NOT ABLE TO GIVE THE COMPLETE ACCOUNT OF THE SALE CONSIDERATION. DURING THE APPEL LATE PROCEEDINGS THE MATTER WAS REMANDED TO THE LD. A.O. FOR GIVING THE OPPORTUNITY OF CROSS EXAMINATION. IN THE CROSS EXAMINATION, THE SELLER SPECIFICALLY ASSERTED THAT THE LAND HAS BEEN SOLD F OR RS. 1 CRORE PER HECTARE AND NOT RS. 1 CRORE PER ACRE (PG.14 OF LD. CIT(A) ORDER). THUS, IT IS VERY CLEAR THAT THE LAND WAS SOLD FOR R S.2.8 CRORES AND NOT RS.6.4 CRORES. THUS, THE ADDITION WAS MADE ON T HE WRONG ASSUMPTION OF FACTS. THE LD. A.O. HAS NOT BEEN ABLE TO BRING ON RECORD ANY EVIDENCE TO SHOW THAT THE LAND IN QUESTI ON WAS PURCHASED FOR MORE THAN THE CONSIDERATION SHOWN IN THE REGISTERED DOCUMENT. THERE IS NO EVIDENCE FOUND DURING THE COU RSE OF SEARCH M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 90 WHICH SHOW THAT THE ASSESSEE HAS PAID ANY EXTRA AMO UNT. UNDER THESE CIRCUMSTANCES THE LD. CIT(A) WAS RIGHT IN DEL ETING THE ADDITION. 80. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US AND CAREFULLY GONE THROUGH THE SUB MISSION FILED BY THE ASSESSEE. REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) DELETING THE ADDITION OF RS.3,36,13,000/- MADE BY T HE LD. A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE ACT . WE FIND THAT DURING THE COURSE OF POST SEARCH INVESTIGATION IT W AS FOUND THAT THE ASSESSEE FIRM PURCHASED LAND TOTALLING TO 2.59 HECT ARE (6.40 ACRES) AT VILLAGE BAGLI FROM SHRI MOTILAL S/O SHRI KALURAM RAJPAL RESIDENT OF VILLAGE KATARA VIDE 3 REGISTRIES DATED 19.7.11, 23.1.2012 AND 31.5.2012 FOR A TOTAL CONSIDERATION OF RS.2,91,62,0 00/-. DURING THE COURSE OF POST SEARCH ENQUIRIES STATEMENT OF SELLER SHRI MOTITAL WAS RECORDED ON OATH U/S 131 OF THE ACT ON 9.6.2014 WHE REIN HE STATED THAT HE SOLD 6.40 ACRES OF LAND OAT VILLAGE BAGLI @ RS.1 CRORE PER ACRE . BEFORE LD. A.O IT WAS SUBMITTED BY THE ASSESSEE THAT THE STATEMENT OF THE FARMER WAS RECORDED AFTER THE SEAR CH AND THE COPY OF THE SAME WAS NOT PROVIDED. OPPORTUNITY TO CROSS EXAMINE THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 91 FARMER IS ALSO NOT PROVIDED. THE STATEMENT IS NOT RELIABLE AND IS NOT UNSUBSTANTIATED. ALSO MR. MOTITAL (SELLER) HAD SPEC IFICALLY CONFIRMED THAT HE HAD NEVER INTERACTED WITH THE ASSESSEE OR H IS REPRESENTATIVE AND AS SUCH THE STATEMENT IS OF THIRD PARTY. THE M ARKET VALUE OF THE LAND AS PER THE COLLECTOR GUIDELINE FOR THE PU RPOSE OF CALCULATION OF STAMP DUTY WAS RS.3,04,99,111/- ONLY AS AGAINST THE CONSIDERATION PAID AT RS.2,91,62,000/-. THE DIFFER ENCE IN BOTH THE PRICES IS LESS THAN 5%. ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE OUT OF WHICH RS.1,20,00,000/- WAS PAID TO SHRI THAKUR PRASAD (HE IS THE PERSON TO WHOM THE SE LLER MR. MOTITAL HAS STATED TO HAVE SOLD THE LAND WHO HAS THEREAFTER SOLD IT TO THE ASSESSEE NAMELY M/S. SIGNATURE INFRASTRUCTURE) AND THE BALANCE PAYMENT WAS MADE IN THE NAME OF THE SELLER. HOWEVE R LD. A.O WAS NOT SATISFIED WITH THE SUBMISSIONS AND HE APPLIED T HE RATE OF RS.1 CRORE PER ACRE ON THE LAND PURCHASED BY THE ASSESSE E AND ACCORDINGLY MADE ADDITION FOR RS.3,36,13,000/- FOR ASSESSMENT YEAR 2012-13 AND RS.20,25,000/- FOR ASSESSMENT YEAR 2013-14. THE INSTANT APPEAL RELATES TO ASSESSMENT YEAR 2012- 13. WHEN THE MATTER TRAVELLED BEFORE THE FIRST APPELLATE AUTHORI TY HE AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CALLED FOR REMAND M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 92 REPORT SINCE THE ASSESSEE WAS NOT GIVEN THE OPPORTU NITY TO CROSS EXAMINE NOR COPY OF THE STATEMENT WAS PROVIDED TO T HE ASSESSEE. THE LD. A.O AFTER GIVING OPPORTUNITY TO CROSS EXAMI NE SUBMITTED THE REMAND REPORT ON 29.6.2018. IN THIS REMAND REPORT PLACED AT PAGE 16-17 OF THE IMPUGNED ORDER OF LD. CIT(A) DATED 30. 10.2008, THE STATEMENT OF THE SELLER MR. MOTILAL WAS AGAIN TAKEN . INCIDENTALLY IN THE ORIGINAL STATEMENT GIVEN DURING THE COURSE OF P OST SEARCH ENQUIRY HE STATED TO HAVE SOLD THE LAND AT RS. 1 CR ORE PER ACRE BUT IN THE REMAND PROCEEDINGS IN REPLY TO QUESTION NO. 6 HE STATED TO HAVE SOLD THE LAND @RS.1 CRORE PER HACTRE. THE ASSESSEE ALSO FILED A REJOINDER TO THE REMAND REPORT ON 29.6.2018 WHICH READS AS FOLLOWS:- THE AO WAS ALSO ISSUED DIRECTIONS TO PROVIDE THE AS SESSEE WITH AN OPPORTUNITY TO CROSS EXAMINE SHRI. MOTILAL RAJPUT. THE AO HAD PROVIDED THE ASSESSEE WITH AN OPPORTUNITY TO CROSS EXAMINE T HE SAID PERSON ON 20.06.2018 AND HAVE SUBMITTED HER REPORT ON THE CRO SS EXAMINATION ALONG WITH COPY OF THE STATEMENT OF MR. MOTILAL RECORDED DURING THE COURSE OF CROSS EXAMINATION. THE SAID PERSON IN HIS INITIAL STATEMENTS RECORDED ON 09.06.14 DURING POST SEARCH PROCEEDINGS HAVE STATED THAT HE HAS SOLD THE LAND UNDER CONSIDERATION TO THE ASSESSEE FOR RS. L,OO,OO,000/-(PER ACRE) TOTAL SALE VALUE RS. 6.40 CROEE AND HAVE INVE STED THE SALE PROCEEDS IN PURCHASE OF 10 ACRES OF LAND IN OBEDULLAGANJ, 15 ACRE IN SULTANPUR AND 6 ACRE IN JHAGARIA AND THE BALANCE AMOUNT WAS STATED BY HI M TO HAVE BEEN USED BY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 93 HIM IN REPAYMENTS OF LOANS EARLIER TAKEN. IN A SEPARATE REPLY MADE DURING THE INITIAL STATEMENT OF 09.06.14 THE COST OF THESE INV ESTMENTS WAS MENTIONED AS RS. 60 LAC, RS.40 LAC & RS. 180 LAC RESPECTIVELY. THE TOTAL VALUE OF INVEST MENTS RECORDED IN THE STATEMENT WAS RS. 280 LAKH. ACCORDI NGLY AFTER GETTING THE ABOVE FACTS VERIFIED FROM SHRI. MOTI LAL HE WAS INFORMED THAT AS PER THE DETAILS GIVEN BY HIM IN HIS INITIAL STATEMENT HE HAS RECEIVED RS. 6.40 CRORE (6.40 ACRE OF LAND @ RS. 1 CRORE PER ACRE) OUT OF WHICH HE HAS INVESTED RS. 280 LAC AND HAVE UTILISED THE BALANCE HAS BEEN USED FOR REPAYMENT OF LOANS TAKEN. THE AMOUNT OF LOANS CLAIMED BY HIM TO HAVE BEEN REPAID WAS MATHEMATICALLY COMPUTED AND INFORMED TO HIM DURING CROSS EXAMINATION AT RS.360 LAKH AND HE WAS REQUESTED TO PROVIDE THE NAME OF THE PERSONS WHO HAVE GIVEN HIM SUCH HEAVY LOANS. IN REPLY TO THIS QUESTION HE HAS MADE A CATEGORICAL STATEMENT T HAT HE HAS NEITHER RECEIVED ANY SUCH LOAN AND HAS NOR REPAID ANY LOAN. HE WAS THEREAFTER TOLD THAT IN SUCH A SITUATION EITHER THE SALE PRICE STATED TO HAVE BEEN RECEIVED BY HIM IN HIS INITIAL STATEMENT WAS WRONG OR THE VALUE OF INV ESTMENTS MENTIONED BY HIM WERE WRONG. IN REPLY HE MADE A CATEGORICAL STATEMEN T THAT HE HAS MADE THE SALE AT RS.L CRORE PER HECTRE AND NOT AT RS.L CRORE PER ACRE AND ALSO CONFIRMED THAT THE INVESTMENTS STATED BY HIM ARE CORRECT. THUS SHRI.MOTILAL ON CROSS EXAMINATION HAVE ADMITTE D THAT THE SALE PRICE OF RS.1 CRORE PER ACRE STATED BY HIM IN HIS INITIAL STATEMENT DATED 09.06.14 WAS NOT CORRECT AND THE SALE HAS ACTUALLY BEEN MADE BY HIM AT RS. 1 CRORE PER HECTER. THUS THE SALE VALUE ADMITTED MR. MOTILAL IS RS. 2.59 CRORE ( 1,00,00,000/2.47*6.40) AS AGAINST THE PURCHASE VALU E RECORDED IN THE BOOKS OF ASSESSEE AT RS. 2.92 CRORE. IT MAY BE MENTIONED THAT MR. MOTILAL HAS SPECIFICALLY CONFIRMED THAT HE DOES NOT KNOW THE AS SESSEE AND HE HAD SOLD THE PROPERTY TO MR. THAKURDAS WHO HAS SOLD THE PROPERTY TO THE ASSESSEE. THUS ADMISSION MADE SOLELY ON THE BASIS OF THE STAT EMENT OF MR.MOTILAL IS REQUESTED TO BE DELETED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 94 81. LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT, REJOINDER FILED BY THE ASSESSEE AND OTHER SUBMISSIONS FILED DURING THE COURSE OF THE APPELLATE PROCEEDINGS AND ALSO CONSIDERING THE FACT THAT IN THE INITIAL STATEMENT THE SELLER HAVE STATED TO SOLD TH E LAND @ RS.1 CRORE PER ACRE AND IN THE REMAND PROCEEDINGS HE STATED TO HAVE SOLD @RS.1 CRORE PER HECTRE AND LOOKING TO THIS FACT THA T 1 HECTRE IS EQUIVALENT TO 2.47 ACRE WHICH COMPLETELY CHANGES TH E CALCULATION OF THE INVESTMENT MADE BY THE ASSESSEE IN THE LAND IN QUESTION, DELETED THE ADDITION OF RS.3,36,13,000/- FOR ASSESS MENT YEAR 2012- 13 OBSERVING AS FOLLOWS:- 5.4 SUBMISSION FILED BY APPELLANT ALONG WITH THE DETAIL S / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. DUE CO NSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVED AT IN THE ASSESSMENT ORDER AND THE REMAND REPORT. IT IS SEEN THAT THE ADDITION IS MADE SOLELY ON THE BASIS OF STATEMENT OF MR. MOTILAL RECORDED DURING POST SEARCH ENQUIRY. IT IS SEEN THAT DURING SEARCH NO PAPER WAS FOUND/SE IZED WHICH COULD INDICATE THAT THE ASSESSEE HAS PURCHASED THE LAND U NDER CONSIDERATION FOR A CONSIDERATION OTHER THAN WHAT IS MENTIONED IN THE REGISTERED PURCHASE DEED. NO EVIDENCE OF THE ASSESSEE HAVING M ADE ANY PAYMENT IN EXCESS OF THE AMOUNT RECORDED IN THE BOO KS/REGISTERED PURCHASE DEED WAS FOUND. THE ASSESSEE HAD PURCHASED THE LAND UNDER CONSIDERATION FOR A TOTAL PURCHASE CONSIDERAT ION OF RS.2,91 ,62,000/- AS AGAINST ITS MARKET VALUE OF RS. 3,05,9 9,000/- FIXED BY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 95 COLLECTOR OF STAMPS FOR THE PURPOSE OF PAYMENT OF ST AMP DUTY AND THE DIFFERENCE BETWEEN THE TWO VALUES IS LESS THAN 5. 5.5 DURING POST SEARCH ENQUIRIES STATEMENT OF THE SELLER MR. MOTILAL WAS RECORDED ON 09.06.14 WHO STATED THAT HE HAS SOL D 6.40 ACRE OF LAND @ RS. ONE CRORE PER ACRE, AGGREGATING TO RS. 6.40 CRO RE TO MR. THAKURDAS AGAINST WHICH THE ASSESSEE HAS SHOWN THE PURCHASE OF LAND AT RS. 2,91,62,000/- THE ASSESSEE HAD MADE A RE QUEST BEFORE THE AO TO ALLOW CROSS EXAMINATION OF THE SAID PERSON WHIC H WAS DENIED FOR VARIOUS REASONS. HOWEVER IN VIEW OF THE WELL SETTLED LAW THAT NO STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CAN BE USED AGAINST THE ASSESSEE AS EVIDENCE WITHOUT PROVIDING THE ASSE SSEE WITH AN OPPORTUNITY OF CROSS EXAMINATION, DIRECTIONS WERE ISSU ED TO THE AO TO PROVIDE THE ASSESSEE AN OPPORTUNITY OF CROSS EXAMINA TION OF MR. MOTILAL, THE SELLER. DURING CROSS EXAMINATION, THE SELL ER HAS RETRACTED FROM HIS EARLIER STATEMENT DATED 09.06.14 AND HAVE S TATED DURING CROSS EXAMINATION THAT THE LAND WAS SOLD BY. HIM @ RS. ONE CRORE PER HECTARE WHICH WAS ERRONEOUSLY STATED IN THE EARLIER S TATEMENT OF 09.06.14 AS RS. ONE CRORE PER ACRE. THUS THE SALE P RICE RECEIVED BY HIM WAS RS. 2.59 CRORE ON SALE OF 6.40 ACRE (2.59 HECTA RE). THE AO IN HIS REMAND REPORT HAS NOT BROUGHT ON RECORD ANY CONVINC ING MATERIAL TO DISBELIEVE THE STATEMENT OF THE SELLER RECORDED DURING CROSS EXAMINATION. THUS IT IS SEEN THAT THE SOLE BASIS FOR THE ADDITIO N WAS THE STATEMENT OF MR. MOTILAL RECORDED ON 09.06.14 AND NO CORROBORATIVE E VIDENCE WAS FOUND DURING SEARCH TO SUBSTANTIATE THE STATEMENT AND THE STATEMENT ITSELF HAVING BEEN RETRACTED DURING CROSS EXAMINATION NO J USTIFIABLE REASON REMAINS TO SUSTAIN THE ADDITION. THE ADDITION IS TH EREFORE DIRECTED TO BE DELETED. IN VIEW OF THE ABOVE GROUND NO 3 FOR A.Y 2 012-13 IS ALLOWED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 96 82. THE ABOVE FINDING OF LD. CIT(A) STANDS UNCONTRO VERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE WHO HAS FAILED TO F ILE ANY EVIDENCE IN SUPPORT OF ITS CONTENTION AND OBSERVATION OF LD. A.O. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF T HE CASE ARE OF THE CONSIDERED VIEW THAT THE SOLE BASIS ON WHICH THE IM PUGNED ADDITION WAS THE PRICE OF RS.1 CRORE PER ACRE STATED BY THE SELLER WHICH WAS SUBSEQUENTLY REVISED/RECTIFIED IN THE REMAND PROCEE DINGS BY THE SELLER STATING AT RS.1 CRORE PER HECTARE AND THE SA ME IF APPLIED TO THE TRANSACTION UNDER CONSIDERATION AND THE SAME WI LL ARRIVE AT 2.59 CRORES WHICH IS LESS THAN THE ACTUAL PURCHASE CONSIDERATION PAID BY ASSESSEE AT RS.2.91 CRORES (APPROX.) AND TH US DO NOT CALL FOR ANY ADDITION FOR UNEXPLAINED INVESTMENT IN THE PURC HASE OF 2.59 HA OF LAND AT VILLAGE BAGLI BY THE ASSESSEE. SINCE THE RE IS NO INCONSISTENCY IN THE FINDING OF LD. CIT(A) WE UPHOL D THE SAME AND DISMISS REVENUES GROUND NO.1 FOR ASSESSMENT YEAR 2 012-13. 83. NOW WE TAKE UP GROUND.2 FOR ASSESSMENT YEAR 20 12-13 WHICH READS AS FOLLOWS; (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4,32,40,000/- MADE BY THE ASSESSING M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 97 OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PUR CHASE OF LAND AT VILLAGE BAGLI.. 84. BRIEF FACTS OF THIS ISSUE IS THAT DURING THE CO URSE OF SEARCH FOUR UNSIGNED AGREEMENTS WERE FOUND. OUT OF THESE TWO AG REEMENTS RELATED TO PURCHASE OF 2.40 ACRE OF LAND IN WHICH S ALE RATES WERE MENTIONED @ RS. 20 LACS PER ACRE AND RS. 1.12 CRORE PER ACRE. THE OTHER TWO AGREEMENTS RELATED TO PURCHASE OF 4.20 AC RE OF LAND IN WHICH SALE RATES WERE MENTIONED @ RS. 20 LACS PER A CRE AND RS. 1.12 CRORE PER ACRE.THE ASSESSEE DURING THE COURSE OF ASSESSMENT SUBMITTED THAT BOTH ALL THE FOUR ARE DRAFT PURCHASE AGREEMENTS WHICH WERE NOT EXECUTED AND THUS REMAINED UNSIGNED. THE ASSESSEE ALSO INFORMED THE AO THAT THE ASSESSEE HAS PURCHASED 2.19 ACRE OF LAND OUT OF THE LAND OF 2.40 ACRE MENT IONED IN THE DRAFT AGREEMENT FOR RS. 100 LAKH THROUGH REGISTERED SALE DEED ON 15.10.2011. THE ASSESSEE ALSO INFORMED THE AO THAT THE ASSESSEE HAS PURCHASED 4.01 ACRE OF LAND OUT OF THE LAND OF 4.20 ACRE MENTIONED IN THE DRAFT AGREEMENT FOR RS. 162 LAKH T HROUGH REGISTERED SALE DEED ON 02.11.2011. THUS IT WAS CON TENDED THAT THE QUANTITY OF LAND AND THE RATE OF SALE WERE BOTH UND ER NEGOTIATION WHICH IS VERIFIABLE FROM THE FACT THAT THE LAND ACT UALLY PURCHASED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 98 AND THE RATE ACTUALLY PAID WAS DIFFERENT THAN WHAT WAS APPEARING IN THE DRAFT UNSIGNED AGREEMENT. THE FACT THAT THE AGR EEMENTS WERE DRAFT AGREEMENT WAS ALSO OBVIOUS FROM THE FACT THAT THE AGREEMENTS WERE UNSIGNED. THUS THERE WERE THREE RATES AVAILABL E WITH THE AO OF RS. 20 LACS PER ACRE AND RS. 1.12 LAC PER ACRE APPE ARING IN THE DRAFT UNSIGNED AGREEMENTS AND RS.45.66/40.40 LAKH PER ACR E RECORDED IN THE REGISTERED SALE DEED DULY SIGNED BY THE SELLER, THE PURCHASER AND THE WITNESS IN PRESENCE OF THE REGISTRAR. THE AO HO WEVER CHOSE TO ADOPT THE PURCHASE RATE OF RS. 1.12 CRORE PER ACRE IN PREFERENCE TO THE OTHER TWO RATES ON THE BASIS OF THE REASONING T HAT THE AGREEMENT THOUGH UNSIGNED CONTAINS VERY SPECIFIC INFORMATION REGARDING THE PROPERTY DETAILS, THE PARTIES, RATE, TOTAL CONSIDER ATION, ADVANCE PAYMENT ETC WHICH ESTABLISH THAT THE AGREEMENTS ARE NOT DRAFT BUT HAVE ACTUALLY BEEN EXECUTED AND FURTHER THE PROPERT Y HAS SUBSEQUENTLY BEEN PURCHASED BY THE ASSESSEE. THE LD . AO ADOPTED THE HIGHER RATE AND MADE THE ADDITION IGNORING THE AVAILABILITY OF A SIMULTANEOUS AGREEMENT MENTIONING A MUCH LOWER RATE . 85. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESS EE ON THE GROUND THAT THE A.O. HAS FAILED TO CONSIDER TWO SET S OF AGREEMENT AND THE ACTUAL REGISTERED SALE DEED. HE FURTHER OBS ERVED THAT THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 99 A.O. HAS FAILED TO BRING ON RECORD ANY REASON FOR A DOPTING THE AGREEMENT WHICH MENTIONS THE RATE OF 1.12 CRORES PE R ACRE IN PREFERENCE TO THE AGREEMENT MENTIONING THE RATE OF RS. 20 LAKHS PER ACRE. THE LD. CIT(A) FURTHER OBSERVED THAT NONE OF THE PARTIES TO THESE AGREEMENTS HAVE MADE ANY STATEMENT THAT THE H IGHER CONSIDERATION IS PAID THAN MENTIONED IN THE SALE DE ED. IT WAS OBSERVED THAT THE A.O. HAS FAILED TO BRING ON RECOR D ANY OTHER SALE INSTANCES OF THE SAME AREA. UNDER THESE CIRCUMSTANC ES THE ADDITIONS ARE UNCALLED FOR. THUS, THE LD. CIT(A) DE LETED THE ADDITION. 86. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 87. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTED THE ORDER OF LD. A.O. 88. PER CONTRA LD. COUNSEL FOR THE ASSESSEE RELIED IN THE FINDING OF LD. CIT(A) AND ALSO MADE FOLLOWING WRITTEN SUBMISSI ONS; IT IS HUMBLY SUBMITTED THAT THE DRAFT AGREEMENT WER E UNSIGNED. THE COMPLETE LOOSE PAPERS HAVE TO BE CONSIDERED. THE LD . AO IGNORED THE FACT THAT THE SALE DEED IS EXECUTED DULY SIGNED BY THE S ELLERS AND THE PURCHASERS IN FRONT OF THE WITNESSES. NEITHER THE P URCHASER NOR THE SELLER HAS CONFIRMED ANY VARIATION IN THE SALE CONSIDERATI ON. NO EVIDENCE HAS BEEN FOUND DURING THE COURSE OF SEARCH OR AFTERWARD S INDICATING THAT THE ASSESSEE HAS MADE ANY UNRECORDED PAYMENT. THUS THE ADDITION MADE WAS CORRECTLY DELETED BY THE LD. CIT(A). M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 100 IN THIS REGARDS THE ASSESSEE PLACES RELIANCE ON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CIT V KHANDELWAL SHRINGI & CO (2017) 299 CTR (RAJ) 437 THE HEAD NOTE OF THE JUDGMENT REPORTED IS GIVEN HEREIN BELOW FOR READY REFERENCE: INCOME FROM UNDISCLOSED SOURCES- ADDITION UNDER S. 69B- UNEXPLAINED INVESTMENT IN PURCHASE OF LAND-AO MADE ADDITION ON THE BASIS THAT THE MARKET VALUE OF 10.21 HECTERS OF LAND PURCHASED BY THE ASSESSEE WAS RS. 7 CRORE AS AGAINST THE DECLARED CONSIDERATION OF RS . 1.87 CRORE- THIS OPINION OF THE AO WAS BASED ON AN EARLIER AGREEMENT TO SALE SUPPOSEDLY ENTERED INTO BY THE SELLER WITH ANOTHER PARTY FOR S ALE OF 13.25 HECTERS OF LAND, INCLUDING THE IMPUGNED LAND, FOR RS. 8.25 CRO RE- ON APPEAL, THE CIT(A) FOUND THAT SINCE THE SAID EARLIER AGREEMENT WAS NEVER EXECUTED, SAME CANNOT BE TAKEN AS EVIDENCE OF THE FAIR MARKET VALUE OF THE LAND IN QUESTION AND THAT THE AO DID NOT ADDUCE ANY OTHER E VIDENCE TO SHOW THAT THE MARKET VALUE OF 10.21 HECTERS OF LAND WAS RS. 7 CRORE- IMPUGNED ADDITION RIGHTLY DELETED BY TRIBUNAL. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T IN CASE THE AO HAS FORMED AN OPINION THAT THE ASSESSEE HAS INCURRED SO ME UNACCOUNTED INVESTMENT ON THE PURCHASE OF LAND HE WAS DUTY BOUN D TO VALUE THE STOCK ACCORDINGLY WHICH WOULD NULLIFY THE EFFECT OF ADDITION IF ANY. THE ATTENTION IS DRAWN TO THE FOLLOWING JUDGMENTS: A. CIT V SURAJ TOWERS 230 TAXMAN 306 (KARNATAKA HC) IN TERMS OF S. 69B, EXCESS AMOUNT MIGHT BE DEEMED T O BE INCOME OF ASSESSEE FOR FINANCIAL YEARHOWEVER, WHEN EXCESS AM OUNT WAS IN NATURE OF INVESTMENT ON BUILDING AND THAT BUILDING WAS SOLD TO PROSPECTIVE PURCHASER, THAT INVESTMENT WAS IN NATUR E OF EXPENDITURE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 101 UNEXPLAINED INCOME HAS TO BE SET OFF AGAINST EXPEND ITURE AND NET TAX COULD BE NIL B. CIT V. STAR BUILDERS 294 ITR 338 (GUJRAT) ASSUMING BUT NOT ACCEPTING THAT SOME UNEXPLAINED IN COME HAS BEEN INVESTED IN THE CONSTRUCTION, THE FACT REMAINS THAT THE BUSINESS OF THE ASSESSEE IS CONSTRUCTION. IF WE ADD ON ACCOUNT OF U NEXPLAINED INCOME IN THE INVESTMENT, THAT WILL GIVE RISE TO THE COST OF THE CONSTRUCTION AND THE RESULT WILL REMAIN THE SAME I.E. 'ZERO'. IN VIEW OF THE ABOVE IT IS HUMBLY SUBMITTED THAT TH E ORDER OF THE LD. CIT(A) WAS CORRECT AND MAY PLEASE BE UPHELD. 89. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUE'S GRIEVANCE IN GR OUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.4,32,40,000/- MADE BY THE LD. A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND AT VILLA GE BAGLI. THE BASIS OF THE IMPUGNED ADDITION WERE 4 UNSIGNED AGREEMENTS FOUND DURING THE COURSE OF SEAR CH. 2 AGREEMENTS RELATED TO PURCHASE OF 2.40 ACRE LAND IN WHICH SALE RATES WERE MENTIONED @ RS.20,00,000/- PER ACRE AND RS.L,12,00,000/- PER ACRE. THE REMAINING 2 AGREEMENTS RELATES TO PURCHASE OF 4.20 ACRE LAND OU T OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 102 WHICH IN ONE AGREEMENT SALE RATE WAS MENTIONED RS.20,00,000/- PER ACRE AND IN OTHER 1,12,00,000/- PER ACRE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS I T WAS SUBMITTED BY THE ASSESSEE THAT THE ACTUAL TRANSACTION PLACE OUT OF THE AREA OF KHASRA MENTIONED AT 2.40 ACRE AND 4.2 ACRE MENTIONED IN THE DRAFT AGREEMENTS. THE ASSESSEE PURCHASED 2.19 ACRE AT A CONSIDERATION OF RS.1 CRORE VIDE REGISTERED SALE DEED DATED 15.10.11 AND 4.01 ACRE FOR A CONSIDERATION OF RS.1.62 CRORES VIDE REG ISTERED SALE DEED EXECUTED ON 2.11.2011. THE RATE PER ACRE OF 2.19 ACRE LAND PURCHASE DEAL IS AT RS.45.66 LAKHS AND FOR THE 4.01 ACRE IT IS RS.40,39,900/-. IT WAS ALSO STATED THAT THE SEIZED LOOSE PAPERS IN THE FORM OF 4 AGREEMENTS WER E FOR THE PURPOSE OF NEGOTIATIONS BUT THE ACTUAL TRANSACT ION TOOK PLACE AT PRICE IN BETWEEN THE LOW AND HIGH PRICE ME NTIONED IN THE DRAFT AGREEMENT. HOWEVER, LD. A.O DECIDED TO PICK UP THE HIGHER RATE OF LAND PER ACRE MENTIONED IN TH E DRAFT AGREEMENT I.E. RS.1.12 CRORES PER ACRE AND APPLIED THE SAME IN TOTAL LAND PURCHASE BY THE ASSESSEE WHICH RESULTED IN THE ADDITION FOR UNEXPLAINED INVESTMENT OF M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 103 RS.4,32,40,000/-ONLY. 90. LD. CIT(A) WHILE EXAMINING THE FACTS IN THE LIG HT OF THE JUDGMENTS REFERRED AND RELIED BY THE LD. COUNSEL FO R THE ASSESSEE MAINLY APPLIED THE RATIO THAT IT WAS NOT J USTIFIED ON THE PART OF THE LD. A.O TO PICK AND CHOOSE THE R ATES MENTIONED IN THE DRAFT AGREEMENTS THEREBY TAKING TH E HIGHER RATE AND IGNORING THE LOWER RATE AND ACCORDI NGLY OBSERVED AS FOLLOWS:- 6.3 SUBMISSION FILED BY APPELLANT ALONG WITH THE D ETAILS / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. CASE L AWS RELIED UPON BY THE APPELLANT HAVE BEEN PERUSED AND CONSIDERED. DUE CONSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVE D AT IN THE ASSESSMENT ORDER. IT IS SEEN THAT TWO SETS OF UNSIG NED DRAFT AGREEMENTS WERE FOUND DURING THE SEARCH. IN ONE SET OF AGREEMENTS THE SALE CONSIDERATION WAS CALCULATED @ RS. 1.12 CRORE PER ACRE AND IN THE OTHER SET THE SALE VALUE WAS CALCULATED @ RS. 20 LAKH PER ACRE FOR THE SAME LAND. BOTH THE SET OF AGREEMENTS WERE UNSI GNED AND WERE SEIZED DURING SEARCH AT THE SAME TIME AND WERE ACCO RDINGLY HAVING SAME EVIDENTIARY VALUE. SUBSTANTIAL PART OF THESE L ANDS WERE SUBSEQUENTLY PURCHASED BY THE ASSESSEE @ RS. 40.401 45.66 LAC PER ACRE THROUGH REGISTERED PURCHASE DEED WHICH WERE DU LY RECORDED IN THE BOOKS OF THE ASSESSEE AND SOURCE OF WHICH WAS E XPLAINED. THE AO HAD ADOPTED THE SALE RATE OF RS. 1.12 CRORE PER ACR E MENTIONED IN ONE SET OF THE AGREEMENTS IN . PREFERENCE TO THE OTHER SET AFTER MAKING THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 104 FOLLOWING OBSERVATION 'IHE AGREEMENT THOUGH UNSIGNED CONTAINS VERY SPECIFIC INFORMATION REGARDING THE PROPERTY DETAILS, THE PARTIES, RATE, TOTAL CONSIDERATION, ADVANCE PAYMENT ETC WHICH ESTABLISH THAT THE AGREEMENTS ARE NOT DRAFT BUT HAVE ACTUALLY BEEN EXECUTED. FURTHER THE PROPERTY HAS SUBSEQUENTLY BEEN PURCHASED BY THE ASSESSEE'. THE AO HAS HOWEVER FAILED TO BRING ON RECORD ANY REASONS FOR ADOPTING THE AGREEMENT HAVING A MENTION OF THE SALE RATE AT RS. 1.12 CRORE PER ACRE IN PREFERENCE TO THE AGREEMENT MENTIONING SALE CONSIDE RATION AT RS. 20 LAKH PER ACRE. BOTH THE AGREEMENTS WERE UNSIGNED AN D SIMILAR IN ITS CONTENT EXCEPT FOR THE RATES AND THE OBSERVATIONS MA DE BY THE AO WERE EQUALLY APPLICABLE TO BOTH. NONE OF THE PARTIES TO THES E AGREEMENTS HAVE MADE A STATEMENT THAT THE CONSIDERATION PAID W AS IN EXCESS OF THE CONSIDERATION STATED IN THE REGISTERED PURCHASE DEED. THE AO HAVE ALSO FAILED TO BRING ON RECORD ANY INSTANCE OF SALE H AVING BEEN UNDERTAKEN IN THE SAME AREA FOR A NEAR ABOUT CONSID ERATION. THE LOGIC FOR DRAFTING AN AGREEMENT MENTIONING A VALUE OF RS. 20 LACS PER ACRE WHEN THE ACTUAL PURCHASE HAS TAKEN PLACE AT RS. 40-4 5 LAC PER ACRE CAN ONLY BE THAT IT WAS DONE AT A NEGOTIATION STAGE . THUS THERE WAS NO REASON TO DISBELIEVE THE SUBMISSION OF THE ASSESSEE THAT THE AGREEMENTS SEIZED WERE DRAFT AGREEMENTS ESPECIALLY WH EN THEY WERE UNSIGNED AND NO EVIDENCE OF THE ASSESSEE HAVING MAD E ANY EXCESS PAYMENT HAS BEEN FOUND IN SEARCH. THE ONUS OF ESTAB LISHING THE INVESTMENT WAS ON THE AO AND HE HAS FAILED TO DISCHARG E HIS ONUS. 6.4 IT IS ALSO SEEN THAT THE LAND PURCHASED IS' AN INVES TMENT OF THE ASSESSEE AND EVEN IF ANY ADDITION IS MADE TOWARDS UN EXPLAINED INVESTMENT IN PURCHASE OF LAND U/S 69B AN CORRESPOND ING ADJUSTMENT WILL BE REQUIRED TO BE MADE WHICH WOULD BE REVENUE NE UTRAL AND HAVING NO EFFECTIVE ADDITION. RELIANCE IN THIS REGAR DS IS PLACED ON THE FOLLOWING JUDGMENTS: M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 105 CIT V SURAJ TOWERS (2015) 230 TAXMAN 306(KARNATAKA HC) WHEREIN IT WAS HELD BY THE HONBLE HIGH COURT THAT:- 'IN TERMS OF S. 698, EXCESS AMOUNT MIGHT BE DEEMED TO BE INCOME OF ASSESSEE FOR FINANCIAL' YEAR-HOWEVER, WHEN EXCESS AMOUNT WAS IN NATURE OF INVESTMENT ON BUILDING AND THAT BUILDING WAS SOLD TO PROSPECTIVE PURCHASER, THAT INVESTMENT WAS IN NATURE OF EXPENDITURE-UNEXPLAINED INCOME HAS TO BE SET OFF AGAINST EXPENDITURE AND NET TAX COULD BE 'NIL'-NO CASE FOR INTERFERENCE WAS MADE OUT-REVENUE'S APPEAL DISMISSED' CIT V. STAR BUILDERS (2007)294 ITR 338 (GUJARAT HIG H' COURT) WHEREIN IN PARA 4 OF THE ORDER IT WAS HELD BY THE COURT THAT:- 'ASSUMING BUT NOT ACCEPTING THAT SOME UNEXPLAINED INCOME HAS BEEN INVESTED IN THE CONSTRUCTION, THE FACT REMAINS THAT THE BUSINESS OF THE ASSESSEE IS CONSTRUCTION. IF WE ADD ON ACCOUNT OF UNEXPLAINED INCOME IN THE INVESTMENT, THAT WILL GIV E RISE TO THE COST OF THE CONSTRUCTION AND THE RESULT WILL REMAIN THE SAME I.E. 'ZERO'. THUS AS PER THE PROVISIONS OF THE ACT AND RELYING ' ON THE JUDGMENTS OF THE HIGH COURTS REFERRED ABOVE I AM OF THE FIRM OPINION THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDU CTION OF ANY EXPENSES WHICH HAS BEEN DEEMED TO BE ITS INCOME U/S 69B. ACCORDINGLY THE ASSESSEE WOULD BE ENTITLED A DEDUCT ION OF THE ADDITION MADE U/S 69B TOWARDS UNEXPLAINED EXPENDITU RE INCURRED BY THE ASSESSEE (IF ANY) HOWEVER THE ADDIT ION ITSELF IS DIRECTED TO BE DELETED THIS FINDING REMAINS ACADEMI C IN NATURE. IN VIEW OF THE ABOVE GROUND # 4 FOR A.Y 2012-13 IS ALLOWED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 106 91. FROM PERUSAL OF THE FINDING OF LD. CIT(A) AS WELL A S THE RATIO LAID DOWN BY HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V SURAJ TOWERS (SUPRA) AND THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V STAR BUILDERS (SUPRA) , WE ARE OF THE CONSIDERED VIEW THAT LD. A.O FAILED TO DISCHARG E ITS ONUS AND THERE WAS NO LOGIC IN THE ACTION OF THE LD. A.O FOR ADOPTING THE SALE RATE OF RS.1.12 CRORES PER ACRE EVEN FROM THE VERY SAME SEIZED RECORDS SHOWED THE RATE OF RS.20,00,000/- PER ACRE WAS MENTIONED AND FURTHER W AS NOT JUSTIFIED IN ACCEPTING THE ACTUAL PURCHASE CONS IDERATION PAID BY THE ASSESSEE RANGING BETWEEN 40 TO 45 LAKHS PER HECTRE. THUS THERE REMAINS NO REASON TO DISBELIEVE THE SUBMISSION OF THE ASSESSEE THAT THE UNSIGNED DRAFT AGREEMENTS CANNOT BE THE BASIS TO MAKE ANY ADDITION IN THE HANDS OF THE ASSESSEE. THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V/S KHANDELWAL SHRINGI & CO (SUPRA) (2017) 299 CTR (RAJ) 437 IS SQUARELY APPLICABLE ON THE FACTS OF THE INSTANT CASE WHEREIN HON'BLE COURT HAD OBSERVED THAT THE LD. AO HAD MADE THE ADDITION ON THE BASIS OF EARLIER AGREEMENT TO SALE SUPPOSEDL Y ENTERED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 107 INTO BY THE SELLER WITH ANOTHER PARTY WHICH WAS NEV ER EXECUTED AND THE SAME CANNOT BE TAKEN AS AN EVIDENC E OF THE FAIR MARKET VALUE OF THE LAND IN QUESTION AND FURTH ER SINCE THE LD. A.O DID NOT ADDUCE ANY OTHER EVIDENCE TO SH OW THAT THE MARKET VALUE APPLIED BY HIM, THE ADDITION MADE BY THE LD. A.O HAS BEEN RIGHTLY DELETED BY THE TRIBUNAL. 92. IN THE INSTANT CASE ALSO THE RATES MENTIONED IN THE UNSIGNED DRAFT AGREEMENTS IS THE BASIS AND LD. A.O HAD APPLIED THE HIGHER RATE MENTIONED IN THE SEIZED UNSIGNED TWO DRAFT AGREEMENTS I.E. 1.12 CRORES PER ACRE AND COMPLETELY IGNORED THE RATE OF RS. 20,00,000/ - PER ACRE MENT IONED IN THE OTHER TWO DRAFT AGREEMENTS. LD. A.O HAS ALSO IGNORED THE ACTUAL REGISTERED SALE DEED SHOWING THE PURCHASE OF LAND IN QUESTION AT A PRICE IN BETWEEN RS.40,00,000/ - A ND RS.45,00,000/-PER HECTARE. LD. A.O HAS FAILED TO BR ING ON RECORD ANY OTHER DOCUMENTARY EVIDENCE TO SUPPORT THE FAIR MARKET VALUE OF 1.12 CRORES ADOPTED BY HIM . IN THESE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND N O JUSTIFICATION IN THE ACTION OF THE LD. A.O IN MAKIN G THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 108 ADDITION FOR UNDISCLOSED INVESTMENT MERELY ON THE B ASIS OF UNSIGNED DRAFT AGREEMENTS WHICH ALSO HAVE NOT BE EN GIVEN EQUAL WEIGHTAGE AND THE LD. A.O. HAS MERELY PICKED THOSE DOCUMENTS SHOWING HIGHER PURCHASE CONSIDERATION WHICH ID OUR VIEW IS NOT JUSTIFIED. THUS THE LD. CIT(AL HAS RIGHTLY DELETED THE ADDITION. WE THUS UPHOLD THE SAME. IN THE RESULT GROUND NO.2 OF REVEN UE'S APPEAL STANDS DISMISSED. 93. NOW WE TAKE UP GROUND NO.3 WHICH READS AS FOLLO WS; (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 98,35,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE U/ S 40(A) OF THE INCOME TAX ACT, 1961 94. BRIEF FACTS RELATING TO THIS ISSUE AS NARRATED BY THE LD. COUNSEL FOR THE ASSESSEE ARE THAT LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT, ON VERIFICATION THE REGISTERED PURCHASE DEEDS THE LD. A.O HAD OBSERVED THAT THE ASSESSEE HAD MADE THE UNDER NOTED PAYMENTS IN CASH FOR PURCHASE OF LAND. ALL THESE PAYMENTS WERE DULY RECORDED IN THE REGULAR BO OKS M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 109 OF ACCOUNT, HOWEVER DISALLOWANCE WAS MADE BY THE AO U/S 40A(3) DISREGARDING THE FACTUAL LEGAL SUBMISSIO NS MADE BEFORE HIM. SR.N O. NAME & ADDRESS OF THE SELLER DATE OF REGISTRY AMOUNT PAID IN CASH 1 SHRI MANPHOOL SINGH BAGLI 24.10.11 32,00,000/ - 2 SHRI MANPHOOLSINGH & OTHERS 01.06.11 78,00,000/ - AS REGARDS THE PAYMENT OF RS.32,00,000/-, IT WAS SU BMITTED BEFORE THE AO THAT THE PROPERTY WAS REGISTERED ON 24.10.2011. HOWEVER, THE PAYMENT WAS MADE EARLIER ON 23.10.2011 WHICH IS SUN DAY. THIS FACT IS EASILY VERIFIABLE FROM THE COPY OF LEDGER ACCOUNT. THE CORRECTNESS OF THIS ENTRY CAN BE VERIFIED FROM THE CASH BOOK WHICH HAS BEEN SEIZED DURING THE COURSE OF SEARCH. FURTHER THE PURCHASE DEED HAD SPECIFICALLY MENTIONED THAT THE PAYMENT HAS BEEN RECEIVED EARLIE R. THUS, THE PAYMENT WAS MADE ON A SUNDAY AND IS ACCORDINGLY COV ERED BY THE EXCEPTION PROVISIONS OF RULE 6DD(J). BALANCE PAYMEN T OF RS. 765000/- WAS INCLUDED IN THE PAYMENT MADE BY CHEQUE ISSUED O N 25.06.2011 FOR RS. 10,00,000/- AND THUS NO DISALLOWANCE WAS CALLED FOR. AS REGARDS THE PAYMENT OF RS.78,00,000/-, IT WAS SU BMITTED BEFORE THE LD. AO THAT THE PAYMENT AGAINST THE SAID PURCHASE W AS PARTLY MADE BY CHEQUE AS DETAILED HEREUNDER: AMOUNT PAID CH NO DATE DRAWN ON ISSUED IN M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 110 THE NAME OF RS.50,000/ - 6482 14.02.11 HDFC BANK MANPHOOL SINGH RS.2,65,000/ - 25086 25.06.11 HDFC BANK MANPHOOL SINGH RS. 10,00,000 25087 25.06.11 HDFC BANK GOPAL SINGH RS.50,000/ - 6491 14.02.11 HDFC BANK GOPAL SINGH RS. 10,00,000 25088 25.06.11 HDFC BANK BALA PRASAD RS.50,000/ - 6486 14.02.11 HDFC BANK BALA PRASAD RS. 10,00,000 25085 25.06.11 HDFC BANK GORELAL RS.50,000/ - 6491 14.02.11 HDFC BANK GORELAL THUS RS. 34,65,000/- WAS PAID BY CHEQUE AGAINST THE SAID PURCHASE AND BALANCE OF RS. 4335000/- ONLY WAS PAID IN CASH. TH E PAYMENT WAS REQUIRED TO BE MADE IN CASH BECAUSE THE SELLERS HAD INSISTED THAT THE PAYMENT OF AT LEAST 50,00,000/- SHOULD BE MADE TO T HEM AT THE TIME OF REGISTRIES AND HAVE INSISTED THAT THEY SHOULD BE PA ID EITHER BY DRAFT OR CASH. AS THE ASSESSEE WAS NOT HAVING SUFFICIENT TIM E TO ARRANGE FOR DRAFT, THE ASSESSEE WAS FORCED TO MAKE PAYMENT IN CASH WHI CH WAS MADE BEFORE THE REGISTRAR AT THE TIME OF REGISTRATION. THUS, TH E AMOUNT IS NOT DISALLOWABLE U/S 40A(3). IT WAS FURTHER MENTIONED THAT ALL THESE PAYMENTS WE RE FOUND DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE FIRM AND WE RE IN CONFORMITY WITH THE PAYMENTS MENTIONED IN THE REGISTERED SALE DEEDS . ALL THESE PAYMENTS ARE MADE BY THE ASSESSEE ONLY IN EXTREME CIRCUMSTANCES WHERE THE PAYEES WERE NOT PREVIOUSLY KNOWN TO THE ASSESSEE AND HAVE INSISTED ON CASH PAYMENT AND THE ASSESSEE WAS NOT IN A POSITION TO MAKE PAYMENTS THROUGH NORMAL BANKING CHANNELS. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 111 THE DETAILS AND FACT OF SUCH CASH PAYMENT IS DULY RECORDED IN THE REGISTERED SALE/PURCHASE AGREEMENT WHICH CONTAINS F ULL PARTICULARS OF THE SELLER. THE DOCUMENTS ARE REGISTERED BY THE REG ISTERING AUTHORITY ONLY AFTER VERIFYING AND PUTTING ON RECORD THE PHOTO, ID PROOF AND ADDRESS PROOF OF THE PARTIES. THUS THE GENUINENESS OF THESE PAYMENTS AND THE IDENTITY OF THE PARTIES TO THE TRANSACTIONS ARE WEL L ESTABLISHED. THE LD. CIT(A) HAS ALLOWED THE APPEAL ACCEPTING THE CONTENTION OF THE ASSESSEE. 95. NOW THE REVENUE IS IN APPEAL BEFORE THIS TRIBUN AL. 96. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDING OF LD. A.O. 97. LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE FIND ING OF LD. CIT(A) AND ALSO REFERRED AND RELIED VARIOUS JUDGMENTS AND FOLLOWING WRITTEN SUBMISSIONS; IT IS HUMBLY SUBMITTED THAT ALL THE TRANSACTIONS AR E RECORDED IN THE BOOKS. THE IDENTITY OF THE SELLER IS VERIFIABLE FRO M THE REGISTERED DOCUMENT. THE TRANSACTION IS GENUINE AND AS SUCH NO DISALLOWANCE COULD HAVE BEEN MADE. IN THIS CONNECTION, ATTENTION IS DR AWN TO THE FOLLOWING JUDGMENTS: A. GURDAS GARG VS. CIT, BATHINDA, 63 TAXMAN. 289 WHERE THE IDENTITY OF THE PURCHASER AND THE GENUINE NESS OF THE TRANSACTION IS NOT IN DOUBT DISALLOWANCE U/S 40A (3 ) CANNOT BE MADE. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 112 B. HARSHILA CHORADIA V ITO (298 ITR 349) THE EXEMPTION CONTAINED UNDER RULE 6 DD ARE NOT EXH AUSTIVE AND THAT THE SAID RULE MUST BE INTERPRETED LIBERALLY IN CASE WHERE THE GENUINENESS OF PAYMENT AND IDENTITY OF RECEIVER IS ESTABLISHED, DISALLOWANCE U/S 40A (3) IS NOT JUSTIFIED. THE AFORESAID JUDGMENTS IN TURN ARE BASED ON THE J UDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ATTAR SINGH GU RMUKH SINGH V. ITO [1991] 191 1TR 667. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T THE LAND PURCHASED HAS BEEN SHOWN AS STOCK. THUS THE ASSESSEE HAS NOT MADE ANY CLAIM OF EXPENSE DURING THE YEAR. AS THE ASSESSEE HAS NOT MA DE ANY CLAIM FOR ALLOWANCE OF THE EXPENSES, THERE CANNOT BE ANY DISA LLOWANCE OF THE SAME. 98. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. THROUGH GROUND NO.3 REVENUE IS AGGRIEVED WITH THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.98,35,000/- MADE BY LD. A.O ON ACCOUNT OF DISALLOWANCE U/S 40A(3L OF THE ACT. WE NOTE THAT THE ASSESSEE DURING THIS COURSE OF BUSINESS MADE THE TRANSACTION OF PURCHASE FOR LAND. IN ONE O F SUCH TRANSACTION VIDE REGISTRY DATED 24.10.11 AND 01.06.11 FOR THE LAND PURCHASED FROM MR. MANPHOOL SINGH BAGLI PAYMENT OF CASH OF RS.32,00,000/_ AND RS. 78,00,000/- RESPECTIVELY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 113 WAS PAID. THE LD. A.O SHOW CAUSED FOR THE DISALLOWA NCE U/S 40A(3) OF THE ACT FOR THE CASH PAYMENT MADE FOR PUR CHASE. IT WAS STATED BY THE ASSESSEE THAT AS REGARDS THE REGI STRY DATED 24.10.2011, THE PAYMENT WAS MADE A DAY EARLIER I.E. 23.10.2011 WHICH IS SUNDAY AND IS THUS COVERED UNDE R THE EXCEPTION PROVIDED IN RULE 6DD(J) OF THE I.T RULES. AS REGARDS CASH PAYMENT OF RS.78,00,000/- PAID FOR THE PURCHAS E OF LAND THROUGH REGISTERED SALE DEED DATED 1.6.2011 IT WAS STATED THAT PART PAYMENT WAS MADE BY CHEQUE AND THE REMAINING WAS IN CASH. BOTH THE IMPUGNED CASH PAYME NTS ARE PART OF THE TRANSACTIONS CARRIED OUT THROUGH RE GISTERED SALE DEED EXECUTED BEFORE THE REGISTERING AUTHORITY . WE FURTHER NOTE THAT LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE DELETED THE DISALLOWANCE OBSER VING AS FOLLOWS:- 7.4SUBMISSION FILED BY APPELLANT ALONG WITH THE DETAILS / MATERIAL BROUGHT ON RECORD HAVE BEEN DULY CONSIDERED. CASE L AWS RELIED UPON BY THE APPELLANT HAVE BEEN PERUSED AND CONSIDERED. D UE CONSIDERATION HAS BEEN GIVEN TO THE FINDINGS ARRIVED AT IN THE AS SESSMENT ORDER AND IN THE REMAND REPORT. IT IS SEEN THAT THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS HAS CLAIMED THAT THOUGH THE PURCHASE DEED M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 114 WAS REGISTERED ON 24.10.2011 THE PAYMENT OF RS. 24,35,000/- WAS MADE EARLIER ON 23.10.2011 WHICH IS A SUNDAY AND HENCE IS COVERED BY THE PROVISIONS OF SECTION 6DD(J). THE AO HAD DISBELIEVED T HE EXPLANA1ION OF THE ASSESSEE ON THE REASONING THAT:- 'THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT WAS MADE ON SUNDAY IS NOT ACCEPTABLE AS THE DATE IS NOT MENTIONED IN THE SALE AGREEMENT AND HENCE IT SHALL ALWAYS BE TREATED THAT THE PAYMENT WAS MADE ON THE DATE OF AGREEMENT. THE ASSESSEE HAS NOT PRODUCED ANY SUPPORTING DOCUMENT L IKE CASH RECEIPT'. ON VERIFICATION OF THE PURCHASE DEED IT IS OBSERVED THAT THE DEED HAD SPECIFICALLY MENTIONED THAT THE PAYMENT HAS BEEN REC EIVED EARLIER ( PURV MAI BALA BALA NAGAD AADA KIYE GAI) THUS IT IS SE EN THAT THERE WAS NO REASON FOR THE AO TO TREAT THAT THE CASH PAYMENT WAS RECEIVED ON THE DATE OF REGISTRATION. IT IS FURTHER SEEN THAT T HE ASSESSEE HAS CLAIMED THAT THE PAYMENT MADE IS DULY RECORDED IN THE CASH B OOK SEIZED DURING THE SEARCH AND HAVE SUBMITTED THE COPY OF SEIZED CASH BOOK FOR VERIFICATION OF THIS FACT. THE AO HAD NOT DISPUTED T HE CORRECTNESS OF THIS CLAIM OF THE ASSESSEE. THUS ONCE THE DATE OF PAYMEN T ON SUNDAY WAS EVIDENCED FROM THE SEIZED CASH BOOK AND THE PURCHASE DEED MADE A SPECIFIC MENTION EARLIER, THE AO WAS NOT JUSTIFIED IN M AKING DISALLOWANCE OF RS. 24,35000/- AND THE DISALLOWANCE MODE IS DIRECTED TO BE DELETED. 7.5 IT IS FURTHER SEEN THAT THE GENUINENESS OF THE PAYM ENTS AND THE IDENTITY OF THE SELLERS OF THE LAND ORE ESTABLISHED BEYOND ANY DOUBTS AND THE AO HAS ALSO NOT RAISED ANY DOUBT ABOUT THE SOME . THE ONLY POINT FOR CONSIDERATION IS WHETHER THE PAYRI1ENT THOUGH GENUI NE SHOULD BE DISALLOWED ON ACCOUNT OF VIOLATION OF SECTION 40A ( 3) OF THE ACT AND NOT BEING COVERED BY THE SPECIFIC EXEMPTIONS PROVIDED I N SECTION 6 DD.- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 115 IT IS SEEN THAT THE CASH PAYMENT AND THE PURCHASE O F LAND ORE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT. NOW THE O NLY ISSUE WHICH REMAINS FOR ADJUDICATION IS WHETHER A GENUINE RECOR DED TRANSACTION UNDERTAKEN IN CASH IN THE BEST INTEREST OF THE BUSI NESS AND OTHERWISE ALLOWABLE CAN BE DISALLOWED ONLY ON A MERE TECHNICA L DEFAULT. REFERENCE IN THIS REGARDS IS MODE TO THE DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF ATTAR SINGH GURMUKH SINGH V. ITO 59 TAXMANN.COM 11 WHEREIN THE OBJECT OF INSERTION OF SECTION 40A(3) A ND RULE 6DD WAS EXPLAINED BY THE HON'BLE COURT AS UNDER: 'THE TERMS OF SECTION 40A (3) ARE NOT ABSOLUTE. CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT [ACTORS ARE NOT EXCLUDED. THE GENUINE AND BONA FIDE TRANSACTIONS ARE NOT TAKEN OUT OF' THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A (3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECE IVED THE CASH PAYMENT. RELYING ON THESE OBSERVATION OF THE SUPREME COURT H ON'BLE RAJASTHAN HIGH COURT IN THE CASE OF HARSHILA CHORDIA VS. ITO 298 I TR 349 HAS HELD THAT LIST OF EXCEPTIONS PROVIDED UNDER RULE 600 IS NOT EXHAUSTIVE. MEANING THEREBY THAT MORE COULD BE READ INTO IT, IF THE SAM E DOES NOT VIOLATE THE REASON FOR WHICH SECTION 40A (3) WAS INTRODUCED, TH E COURT HELD THAT:- ' .....APPARENTLY, THIS PROVISION WAS DIRECTLY RELA TED TO CURB THE EVASION OF TAX AND INCULCATING THE BANKING HABITS. THEREFORE, THE CONSEQUENCES, WHICH WERE TO HE/ALL ON ACCOUNT OF NON-OBSERVAT ION OF' SUB-SECTION (3) OF SECTION 40A MUST HAVE NEXUS TO THE FAILURE OF SUCH OBJECT. THEREFORE THE GENUINENESS OF THE TRANSACTIONS AND IT BEING FREE FROM DEVICE OF EVASION OF TAX IS RELEVANT CONSIDERATION WHICH HAS BEEN OVERLOOKED BY THE TRIBUNAL M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 116 THE JAIPUR BENCH OF THE ITAT IN ITS RECENT JUDGMENT IN THE CASE OF M/S A DAGA ROYAL ARTS V ITO (ITA 1065/ JP /2016) DELIVERE D ON 15.05.2018 HAVE CONSIDERED VARIOUS DECISIONS OF VENOUS COURTS AND T RIBUNALS AND CONCLUDED THAT:- 'IN THE ENTIRETY OF/ACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE LEGAL PROPOSITION LAID DOWN BY T HE VARIOUS COURTS AND COORDINATE BENCHES REFERRED SUPRA, WE ARE OF THE VIEW THAT THE IDENTITY OF THE PERSONS .FROM WHOM THE VARIOUS PLOTS OF LAND HAVE BEEN PURCHASED AND SOURCE OF / CASH PAYMENTS AS WITHDRAWALS FROM THE ASSESSEE'S B ANK ACCOUNT HAS BEEN ESTABLISHED THE GENUINENESS O F THE TRANSACTION INN BEEN ESTABLISHED AS EVIDENCED B Y THE REGISTERED SALE DEEDS AND LASTLY, THE T EST OF BUSINESS EXPEDIENCY HAS BEEN MET IN THE INSTANT CAS E. FURTHER, AS HELD BY THE HONBLE RAJASTHAN HIGH COURT IN CASE OF HARSHILA CHORDIA (SUPRA), THE CONSEQUENCES, WHICH WERE TO BEFALL ON ACCOUNT OF NON-OBSERVATION OF SUB- SECTION (3) OF SECTION 40A MUST HAVE NEXUS TO THE F AILURE OF SUCH OBJECT. THEREFORE THE GENUINENESS OF THE TRANSACTIONS AND I T BEING FREE FROM VICE OF ANY DEVICE OF EVASION OF TAX IS RELEVANT CONSIDERAT ION. THE INTENT AND THE PURPOSE FOR WHICH SECTION 40A (3) HAS BEEN BROUGHT ON THE STATUTE BOOKS HAS BEEN CLEARLY SATISFIED IN THE INSTANT CASE. THEREFORE, BEING A C ASE OF GENUINE BUSINESS TRANSACTION, 110 DISALLOWANCE IS CALLED FOR BY INVOKING THE PROVISIONS OF SECTION 40,A (3) OF THE ACT, THE APPELLANT SUBMITTED THAT HE HAD PURCHASED THE L AND FROM AGRICULTURIST, THE SELLER REFUSED TO ACCEPT THE PAYMENT BY CHEQUE, THEREFORE, THE APPELLANT HAS TO MAKE THE PAYMENT IN CASH. IT HAS B EEN HELD IN THE CASE OF GURDAS GARG V /S THE COMMISSIONER OF INCOME TAX APP EALS, IT APPEAL NO, 413 OF 2014 THE HON'BLE HIGH COURT OF PUNJAB AND HA RYANA HELD THAT '' THE IDENTITY OF THE PAYEES I.E.: THE VENDORS IN RESPECT OF THE LAND PURCHASED BY THE APPLICANT WAS ESTABLISHED ', EACH OF THESE AGRE EMENT WAS CERTIFIED BY THE STOMP REGISTRATION AUTHORITY ',THE TRANSACTION WERE GENUINE AND BAR M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 117 AGAINST THE GRANT OF DEDUCTION UNDER SECTION 40A(3) WAS NOT ATTRACTED. IN CASE OF RAKESH KUMAR V /S ASST. C:T THE IT AT AM RITSAR BENCH ALSO HELD THAT; ...SALE DEEDS OF PROPERTIES WERE REGISTERED WITH REVENUE DEPT. OF' GOVT.. T HE PAYMENTS CANNOT HE DISALLOWED UNDER SECTION 40A(3) OF THE ACT. IN THE PRESENT CASE, THE GENUINENESS OF PAYMENT HAS NOT BEEN DOUBTED AS ASSESSING OFFICER HIMSELF HAS HELD MET SALE DEEDS O F PROPERTIES WERE REGISTERED WITH THE REVENUE DEPARTMENT OF GOVT. TH EREFORE, THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE ABOVE DECISION OF HON' BLE PUNJAB AND HARYANA HIGH COURT, THE HON' BLE IT AT INDORE BENCH , INDORE VIDE IT A NO. 522/LND/20 14 DATED 14.07,2016 IN THE CASE OF TIRUP ATI CONSTRUCTIONS HAS ALLOWED COMPLETE RELIEF ON THE AFORESAID POINT OF ADDITION TO THE APPELLANT. THE HON'BLE ITAT INDORE BENCH INDORE IN THE CASE OF VIJAY KUMAR JAISWAL VS ACIT, 28 IT J 289 IN THIS CASE H' BLE IT AT HELD THAT THE PAYMENT WERE MODE AT THE DIRECTION OF THE DEPARTMENT AND THE SIT UATION WAS NOT WITHIN THE CONTROL OF THE APPELLANT AND IT AT DELETED THE SAID DISALLOWANCES. ITAT INDORE BENCH INDORE IN THE CASE OF ITO VS JITE NDRA KUMAR MANDLECLLA, 23 ITJ 644 IN THIS CASE THE FACTS OF THE CASE WAS AS UNDER : ASSESSEE MADE PAYMENT OF BUSINESS EXPENDITURE ABOVE RS.20000 /- IN CASH. AO MADE DISALLOWANCE OF THE SAME. ITAT HELD THAT OBJE CT BEHIND THE PROVISION IS THAT PERSONS ARE NOT ALLOWED TO SHOW FALSE EXPENDIT URE FOR AVOIDING INCOME TAX AND THEREFORE, ONCE THE GENUINENESS OF PAYMENT AND IDENTITY OF THE PAYEE IS ESTABLISHED FULLY, THE OBJECT IS ACHIEVED AND IN SU CH A SITUATION, IF THE PAYMENT HAS BEEN MADE LOOKING TO THE NECESSITY OF SETTLEMEN T OR DIFFICULTY OF PAYEE AS PAYEE WAS IN NEED OF MONEY AFTER BANKING HOURS. TH E SAME CANNOT BE SAID TO M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 118 HAVE BEEN MADE IN VIOLATION OF OBJECT OF THE RULES EXPENDITURE IS THEREFORE ALLOWABLE IN PRESENT CASE, AS SAME IS GENUINE AND D ULY RECORDED AND OUT OF BUSINESS EXIGENCIES. 7.6 IN THE CASE OF THE ASSESSEE THE GENUINENESS 01 THE PAYMENTS ARE FREE FROM DOUBT AND THERE IS NO ATTEMPT MADE BY THE ASSESSEE TOR EVASION OF ANY OF ITS TAX LIABILITY BY MAKING PAYMENT IN CASH AND ACCORDINGLY RESPECTING THE JUDGMENTS OF THE VARIOUS COURTS MENTIONED ABOVE THE ADDITION MADE OF PS. 98,35,000/- IS DIRECTED TO BE DELETED. IN VIEW OF THE ABOVE, GROUND # 5 FOR A.Y 2012-13 _ ALLOWED. 99. THE ABOVE FINDING OF LD. CIT(A) IS DULY SUPPORT ED BY JUDICIAL PRONOUNCEMENTS REFERRED HEREIN ABOVE WHICH ARE SQUARELY APPLICABLE ON THE FACTS OF THE INSTANT CAS E WHERE ALSO THE GENUINENESS OF THE PAYMENT WERE NOT DOUBTED AND THERE IS NO IOTA OF EVIDENCE TO SHOW THAT THE ASSESSEE WA NTED TO EVADE ANY TAX LIABILITY AND MORE SO THE TRANSACTION S HAVE BEEN CARRIED OUT BEFORE THE REGISTERING AUTHORITY O F STATE GOVERNMENT AND IMPUGNED CASH PAYMENTS ARE PART OF T HE CONSIDERATION APPEARING IN THE REGISTERED DEED. WE THUS RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS REFE RRED HEREIN ABOVE FIND NO INCONSISTENCY IN THE FINDING OF LD. CIT(A) DELETING THE DISALLOWANCE U/S 40A(3) OF THE ACT FOR THE ALLEGED CASH PAYMENT OF RS.98,35,000/- U/S 40A(3) OF THE AC T AND M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 119 THE SAME IS UPHELD. REVENUES GROUND NO.3 FOR ASSE SSMENT YEAR 2012-13 (IT(SS)A NO.02/IND/2019) IS DISMISSED. 100. GROUND NO.4 IS GENERAL IN NATURE WHICH NEEDS N O ADJUDICATION. 101. IN THE RESULT APPEAL OF THE REVENUE FOR ASSESS MENT YEAR 2012-13 IN THE CASE OF SIGNATURE INFRASTRUCTURE VI DE APPEAL NO. IT(SS)A NO.02/IND/2019 STANDS DISMISSED. 102. NOW WE TAKE UP REVENUES APPEAL NO. IT(SS)A NO.13/IND/2019 FOR ASSESSMENT YEAR 2014-15 IN THE C ASE OF M/S SIGNATURE COLONISERS PVT. LTD. 103. THE SOLE GRIEVANCE IN GROUND NO. 1 & 2 OF REVE NUES GROUND NO. 1 & 2 REVOLVES AROUND THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.2,45,00,000/- MADE BY THE LD. A.O U/ S 68 OF THE ACT FOR UNEXPLAINED UNSECURED LOAN RECEIVED FROM NON RESIDENT INDIAN SHRI RAJESH SADHW ANI. 104. BRIEF FACTS RELATING TO THIS ISSUE ARE A SEARC H WAS CONDUCTED ON THE SIGNATURE GROUP OF CASES IN WHICH A M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 120 SEARCH WAS ALSO UNDERTAKEN ON THE ASSESSEE. THE ASSESSEE I S A COMPANY WHICH WAS INCORPORATED ON 09/01/2012. THE ASSESSEE HAS TAKEN A LOAN OF RS.2,45,00,000/- FROM SHRI RAJESH SADHWANI FOR THE PURPOSE OF ITS BUSINESS. DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE CONFIRMATION, PAN CARD WAS FILED. THE SAID CREDITOR IS A NON- RESIDENT INDIAN ORIGIN, DOING THE BUSINESS IN DUBAI. HE IS THE MANAGING PERSON OF THE COMPANY IN THE NAME OF SMART TEXTILES LLC, AL-FAHIDI STREET, BUR DUBAI. ALL THE AMOUNTS HAVE BEEN RECEIVED THROUGH BANKING CHANNELS . SOME OF THE RELEVANT DOCUMENTS COULD NOT BE FILED B EFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS T HESE WERE NOT AVAILABLE WITH THE ASSESSEE AT THAT TIME. HOWEVER, SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS ABLE TO OBTAIN THE REQUIRED PAPERS WHICH WERE FILED BEFORE THE LD. CIT(A) WITH AN APPLICATION UNDER RULE 46A. LD. CIT(A) ACCORDINGLY EXAMINED THE DOCUM ENTS PLACED BEFORE IT AND WAS SATISFIED WITH THE IDENTITY AND CREDITWORTHINESS OF SHRI RAJESH SADHWANI WHO GAVE UNSECURED LOAN TO THE ASSESSEE AND DELETED THE ADDI TION M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 121 MADE U/S 68 OF THE ACT. 105. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUN AL. 106. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARG UED AND SUPPORTED THE FINDING OF LD. A.O. 107. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPOR TED THE FINDING OF LD. CIT(A) AND ALSO FILED FOLLOWING WRITTEN SUBMISSIONS:- WHILE FRAMING THE ASSESSMENT THE LD. AO DID NOT DOU BT THE IDENTITY OF THE LENDER AND HIS CREDITWORTHINESS. IT WAS SUBMITTED B EFORE THE LD. A.O. THAT ALL THE TRANSACTION WERE ENTERED THROUGH THE BANKIN G CHANNEL. THE LD. A.O. HOWEVER, DID NOT ACCEPT THE ASSESSEES PLEA AN D MADE THE ADDITION WITH THE REMARK THAT THE CONFIRMATION LETTER HAS BE EN SIGNED BY SHRI MANISH IDNANI AS AN AUTHORIZED PERSON FOR SHRI RAJE SH SADHWANI AND NO DOCUMENTARY EVIDENCE FOR SUCH AUTHORIZATION HAS BEE N FILED. THE LD. A.O. FURTHER REMARKED THAT MERE FILING OF THE CONFIRMATI ON DOES NOT ESTABLISH THE CREDIT WORTHINESS AND THE GENUINENESS OF THE TR ANSACTION. HE THEREFORE, MADE THE ADDITION OF RS. 2,45,00,000/- U /S 68 OF THE ACT. BEFORE THE LD. CIT(A) THE ASSESSEE FILED COMPLETE D ETAILS UNDER RULE 46A WHICH CONSISTED OF THE FOLLOWING PAPERS 1. COPY OF PASS PORT 2. ELECTRICITY BILL OF DUBAI TO PROVE THE ADDRESS 3. COPY OF THE PAN CARD BEARING NUMBER BHFPS0322A M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 122 4. THE AMOUNT RECEIVED THROUGH DEMAND DRAFT PREPARED A T DUBAI. THE ADVISES OF DD PREPARED IN THE NAME OF THE ASSES SEE AND THE NAME OF THE LENDER. 5. ON THE DIRECTION OF THE LD. CIT(A) THE FOLLOWING PA PERS WERE ALSO FILED TO ESTABLISH THE CREDITWORTHINESS OF THE LEND ER: A. THE LENDER IS CARRYING ON HIS BUSINESS UNDER THE BU SINESS NAME OF SMART GULF GENERAL TRADING L.L.C SINCE 09.03.1988 . THE COPY OF LICENSE ISSUED BY THE DUBAI AUTHORITIES AS FILED. B. THE LENDER IS OWNING 49% OF THE SHARES AND BALANCE 51% OF THE SHARES HAVE BEEN ALLOTTED TO LOCAL RESIDENTS OF DUB AI. IT MAY BE SUBMITTED THAT THE LAWS OF DUBAI REQUIRES THAT ANY FOREIGN NATIONAL CAN DO BUSINESS IN DUBAI ONLY AFTER TAKING A LOCAL PERS ON AS PARTNER WHO SHOULD HOLD THE MAJORITY SHARE. THIS FACT IS READIL Y VERIFIABLE FROM THE DETAILS OF SHARE CAPITAL APPEARING IN THE NOTES TO THE FINANCIAL STATEMENTS ANNEXED TO THE FINANCIAL STATEMENTS, THE COPY OF THE SAME WAS FILED. C. THE COPY OF AUDITED FINANCIAL STATEMENTS AND BANK S TATEMENT OF SMART GULF GENERAL TRADING L.L.C FOR THE YEAR ENDED ON 31.03.13, 31.3.14 AND 31.03.15 WAS FILED TO PROVE THAT THE PR OFITS WERE SUBSTANTIALLY HIGH. THE POSITION OF THE PROFITS WAS AS UNDER 2013 2014 2015 SHARE CAPITAL 3000 LAKH 2779 LAKH 3177 LAKH NET PROFIT 258.37 LAKH 235.46 LAKH 240.06 LAKH THE FIGURES APPEARING IN THE AUDITED FINANCIAL STAT EMENT IN AED ARE CONVERTED INTO INR BY TAKING CONVERSION RATE OF 18 INR PER AED. IT WOULD BE OBSERVED THAT IN THE YEAR 2013 IN WHICH THE ASSE SSEE HAS RECEIVED THE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 123 FUNDS FROM THE LENDER, NET WITHDRAWALS OF APP 786.4 0 LAKH WAS MADE FROM LLC. D. THE COPY OF BANK STATEMENT OF THE BUSINESS ENTITY O F THE LENDER WAS FILED WHICH SHOWED THAT THE SAID FIRM IN THE NO RMAL COURSE HELD BANK BALANCE OF RS. 5 TO 10 CRORES. E. THE COPY OF BANK STATEMENT OF THE LENDER WAS FILED WHICH SHOWED THAT THE NORMAL BANK BALANCES WERE OF RS. 5 TO 10 CRORES. THE ABOVE PAPERS WERE ADMITTED BY THE LD. CIT(A) UN DER RULE 46A AND WERE SENT TO THE A.O. FOR HIS COMMENTS (PARA 3.2 PG .5 OF CIT(A)S ORDER). THE LD. A.O. SUBMITTED THE REMAND REPORT (PG.1E-1G OF THE PB). THE LD. A.O. IN PARA 4 STATED THAT ALL THE ABOVE PAPERS ARE SEEN. HE HOWEVER, DOUBTED THE GENUINENESS OF THE TRANSACTION ON THE G ROUND THAT THE LEDGER ACCOUNT OF THAT PERSON SUBMITTED BEFORE THE AO HAS DESCRIBED THE AMOUNT RECEIVED AS RECEIPT TOWARDS SHARE CAPITAL W HEREAS IN THE SUBMISSIONS FILED THE RECEIPT IS MENTIONED AS UNSEC URED LOAN. THE LD. A.O. FURTHER REMARKED THAT THE ASSESSEE HAD NOT FIL ED DOCUMENTS REQUIRED BY THE RBI FOR SUBSCRIBING TO THE SHARE CA PITAL. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE AMO UNT WAS REMITTED BY THE SENDER TOWARDS HIS APPLICATION FOR ISSUE OF SHA RE CAPITAL. HOWEVER THE AUTHORIZED CAPITAL OF THE COMPANY WAS ONLY 1 LAC AN D HENCE SHARES COULD NOT HAVE BEEN ISSUED TO THE PAYER AND THE AMOUNT WA S CREDITED IN THE LOAN ACCOUNT. IT WAS FURTHER SUBMITTED THAT NO AGRE EMENTS COULD BE REACHED REGARDING THE TERMS AND CONDITIONS ABOUT TH E ISSUE OF SHARES AND AS SUCH IT WAS TREATED AS AN UNSECURED LOAN. IT WAS FURTHER SUBMITTED THAT THE GENUINENESS OF THE TRANSACTION O F RECEIPT OF MONEY IS NOT QUESTIONED BY THE AO, BUT HE HAS RAISED DOUBT R EGARDING THE ENTRIES IN THE BOOKS AS TO WHETHER THE AMOUNT IS RECEIVED A S SHARE CAPITAL OR AS AN UNSECURED LOAN. THE ADDITION MADE IS ACCORDINGL Y REQUESTED TO BE DELETED. THE LD. CIT(A) AFTER CONSIDERING ALL THE D OCUMENTS ALLOWED THE ASSESSEES APPEAL. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 124 108. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH IT. RE VENUES SOLE GRIEVANCE FOR 2014-15 IN THE CASE OF M/S SIGNATURE COLONISERS PVT. LTD IS WITH REGARD TO DELETION OF A DDITION OF RS.2,45,00,000/- BY LD. CIT(A) WHICH WAS MADE BY TH E LD. A.O U/S 68 OF THE ACT FOR UNEXPLAINED CASH CREDIT R ECEIVED FROM NON RESIDENT INDIAN SHRI RAJESH SADHWANI. 109. FROM PERUSAL OF THE RECORD WE OBSERVE THAT SHR I RAJESH SADHWANI IS A NON RESIDENT INDIAN AND LIVES IN DUBAI AND IS THE MANAGING PERSON OF THE COMPANY IN THE NAME OF SMART TEXTILES LLC, A1-FAHIDI STREET, BUR D UBAI. THE IMPUGNED AMOUNT OF RS.2,45,00,000/- HAS BEEN RECEIVED THROUGH BANKING CHANNEL. LD. A.O HAS NOT DOUBTED THE IDENTITY AND CREDITWORTHINESS OF THE LE NDER. ONLY BECAUSE OF THE CONFIRMATION LETTER WAS SIGNED BY MR. MANISH IDNANI HAS AUTHORIZED PERSON FOR SHRI RAJESH SADHWANI AND NO DOCUMENTARY EVIDENCE FOR SUCH AUTHORIZATION HAVING BEEN FILED RAISED DOUBT IN THE MIND OF LD. A.O ABOUT THE GENUINENESS OF THE TRANSACTION. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 125 110. WE HOWEVER OBSERVE THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) ASSESSEE FI LED OTHER EVIDENCES UNDER RULE 46A OF THE IT RULES TO BE CONS IDERED FOR PROVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN PROVIDER NAMELY SHRI RAJESH SADHWANI WH ICH INCLUDED COPY OF PASSPORT, PAN CARD, ELECTRICITY BILL OF DUBAI, COPY OF AUDITED FINANCIAL STATEMENTS AND BAN K STATEMENTS OF SMART GULF GENERAL TRADING COMPANY, LLC, COPY OF BANK STATEMENT. LD. CIT(A) AFTER EXAMINING THE SAME AND THEREAFTER GOING THROUGH THE REMAND REPORT DATE D 22.05.2018 MADE BY THE LD. A.O DELETED THE IMPUGNED ADDITION OF RS.2,45,00,000/- OBSERVED AS FOLLOWS:- 4.2 GROUND NO.2 :- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS 2,45,00,000/- ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN U/S 68. THE AO DURING AS SESSMENT PROCEEDINGS FOUND THAT ASSESSEE HAS TAKEN UNSECURED LOANS OF RS. 4,88,00,000/-. OUT OF WHICH UNSECURED LOANS REC EIVED FROM SHRI DINESH KUMAR IDNANI AND SHRI MANISH KUMAR IDNA NI HAVE ALREADY BEEN EXPLAINED BEFORE AO. HOWEVER, NO DETAI L WHAT SO EVER WAS FILED BY THE APPELLANT WITH REGARD TO UNSE CURED LOAN TAKEN FROM SHRI RAJESH SADHWANI. THE ASSESSEE WAS A SKED BY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 126 AO TO FURNISH CONFIRMATIONS, BANK ACCOUNT STATEMENT AND ITR OF THE CREDITORS. THE ASSESSEE BEFORE AO FAILED TO FUR NISH THE DESIRED DOCUMENTS. THE APPELLANT DURING APPELLATE P ROCEEDINGS, FURNISHED CONFIRMATION, BANK ACCOUNT STATEMENT AND COPY OF ITR OF SHRI RAJESH SADHWANI. A COPY OF THESE ADDITIONAL EVIDENCES WAS ALSO FORWARDED TO AO FOR COMMENTS. APPELLANT DURING APPELLATE PROCEEDINGS SUBMITTED TH AT THE FIRM WAS CONSTITUTED ON 09.01.2012. APPELLANT DURING THE YEAR UNDER CONSIDERATION HAS TAKEN UNSECURED LOAN OF RS. 2,45,00,000/- FROM SHRI RAJESH SADHWANI THROUGH DEMAND DRAFTS. SHRI RAJESH SADHWANI IS A NRI HAVING PASSPO RT OF CANADA AND IS RESIDING AT DUBAI HAVIUG ADDRESS FLAT NO 5- 1004, 381IPALM JUMEIRA, PREMISES NUMBER 381062953 P O BOX NO 12741, DUBAI AND ALSO HAVING PAN NO BHFPS0322A. THE UNSECURED LOAN HAS BEEN RECEIVED THROUGH DEMAND DRA FTS BEING PREPARED IN DUBAI. THE BRIEF DETAILS OF DEMAND DRAF TS ARE AS UNDER:- S.N O DEMAND DRAFT NO DATE OF ISSUE AMOUNT INR 1 00220061300139 20.06.2013 RS. 9,00,000 2 00220061300138 20.06.2013 RS. 9,00,000 3 00220061300136 20.06.2013 RS. 9,00,000 4 00220061300143 20.06.2013 RS. 9,00,000 5 00220061300142 20.06.2013 RS. 9,00,000 6 00220061300141 20.06.2013 RS, 9,00,000 M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 127 7 00220061300140 20.06.2013 RS. 9,00,000 8 00220061300145 20.06.2013 RS. 9,00,000 9 00220061300144 20.06.2013 RS. 9,00,000 10 00220061300147 20.06.2013 RS. 9,50,000 11 00220061300146 20.06.2013 RS. 9,50,000 12 -- -- RS. 9,40,000 13 00020069 31.08.2013 RS. 9,40,000 14 00020070 31.08.2013 RS. 9,40,000 15 00020071 31.08.2013 RS. 9,40,000 16 00020072 31.08.2013 RS. 9,40,000 17 202885 10.L0.2013 RS.7,00,000 18 202884 10.L0.2013 RS.7,00,000 19 202875 30.09.2013 RS. 5,00,000 20 202874 30.09.2013 RS, 5,00,000 21 202872 30.09.2013 RS. 9,00,000 22 202871 30.09.2013 RS.8,50,000/- 23 202870 30.09.2013 RS.8,50,000/- 24 202869 30.09.2013 RS.8,50,000/- 25 202901 24.10.2013 RS.8,00,000/- 26 202900 24.10.2013 RS.8,00,000/- 2,21,50,000/- APPELLANT HAS FILED COPY OF CONFIRMATION RECEIVED F ROM SHRI RAJESH SADHWANI WHEREIN IT HAS BEEN STATED THAT LOA N OFRS. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 128 2,45,00,000/- WAS GIVEN THROUGH CHEQUES ON DIFFEREN T DATES. APPELLANT HAS ALSO FILED COPY OF PASSPORT, ELECTRIC ITY BILL AND PAN CARD OF SHRI RAJESH SADHWANI. THE APPELLANT DUR ING APPELLATE PROCEEDINGS FURNISHED THE DETAILS OF SOUR CE OF INCOME OF CREDITOR IN ORDER TO PROVE CREDITWORTHINESS OF T HE CREDITOR. IN REPLY, APPELLANT SUBMITTED THAT SHRI RAJESH SADHWAN I IS CARRYING ON HIS BUSINESS UNDER THE NAME 'SMART GULF GENERAL TRADING LLC' SINCE 09.03.1988 IN DUBAI. IN SUPPORT A COPY OFLICENSE FOR DOING BUSINESS ISSUED BY DUBAI AUTHOR ITIES HAVE BEEN FILED. SHRI RAJESH SADHWANI IS OWING 49 SHARES OF THE COMPANY AND REMAINING 51 SHARES WERE ALLOTTED TO DI FFERENT RESIDENTS OF DUBAI. ACCORDING TO LAW OF DUBAI FOREI GN NATIONALS CAN DO BUSINESS ONLY WHEN A LOCAL PERSON IS PARTNER HOLDING MAJORITY SHARES. IN SUPPORT THE APPELLANT FILED DET AILS OF SHARE CAPITAL AND FINANCIAL STATEMENT OF THE COMPANY. APP ELLANT HAS ALSO FILED COPY OF AUDITED FINANCIAL STATEMENT AND BANK ACCOUNT STATEMENT OF SMART GULF GENERAL TRADING LLC AS ON 31.03.2013,31.03.2014 AND 31.03.2015. ON PERUSAL OF FILED AUDITED FINANCIAL STATEMENT IT IS SEEN THAT FOR FY 2013-14 THE NET PROFIT WAS 258.37IACS, FOR FY 2014-15 NET PROFI T WAS 235.46 LACS AND FOR FY 2015-16 NET PROFIT WAS 240.06 LACS (ON TAKING CONVERSION RATE OF 18 INR/AED. THUS, LOAN PARTY FUR NISHED THE LOAN CONFIRMATION, COPY OF BANK ACCOUNT AND PROOF O F FILING OF THE RETURN. BY FILING THE ABOVE DOCUMENTS THE APPELLANT IS ABLE TO ESTABLISH THE- M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 129 I. IDENTITY OF THE CREDITOR - THE CREDITOR IS INCOME T AX PAYER AND FILED THE LOAN CONFIRMATION. II. GENUINENESS OF THE TRANSACTION- THE APPELLAN T HAS TAKEN THE LOAN THROUGH BANKING CHANNEL. THE APPELLANT IS IN THE RECEIPT OF LOAN BY DEMAND DRAFT. III. CREDITWORTHINESS OF THE CREDITOR THE CREDITOR IS INCOME TAX PAYER AND FILING THE INCOME TAX RETURN. THE PERSON NOT ONLY GIVEN THE LOAN TO THE APPELLANT BUT TO OTHER PARTIE S ALSO. FROM THE ABOVE IT IS CLEAR THAT THE APPELLANT HAS S ATISFIED ALL THE THREE CONDITIONS REQUIRED FOR GENUINENESS OF THE TR ANSACTION. THE SAME VIEW HAS BEEN UPHELD BY HONB'LE ITAT IN TH E FOLLOWING CASES:- UMESH ELECTRICALS VIS ASST. CIT(2011) 18 IT] 635 (T RIB.- AGRA): (2011) 131 ITD 127: (2011) 141 TTJ ESTABLISHMENT OF IDENTITY AND CREDIT-WORTHINESS PRO VED- ASSESSEE PRODUCED THE BANK ACCOUNT OF CREDITOR IN H IS BANK ACCOUNT ON THE SAME DAY ON WHICH LOAN WAS GIVEN- AS SESSEE FURNISHED THE CASH FLOW STATEMENT OF CREDITOR-BASED ON INQUIRY, AO NOTED THAT CREDITOR WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES-HELD- IN GROUP CASES, IT HAS BEEN HELD THAT THERE WAS NO EVIDENCE AGAINST THE CREDITOR TO PROVE THAT HE WAS PROVIDING ACCOMMODATION ENTRIES-FURTHER, MERE DEPOSIT OF MONEY BY THE CREDITOR ON THE SAME DAY, DOES NOT EST ABLISH THAT M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 130 THE LOAN IS NOT GENUINE-ASSESSEE HAS PROVED THE SOU RCE OF CREDIT AND ALSO THE SOURCE OF SOURCE -ADDITION CANNOT BE M ADE. ASEEM SINGH V/ ASST. CLT (2012) 19LTJ 52 (TRIB.-IND ORE) IDENTITY AND CREDIT-WORTHINESS PROVED-ASSESSEE TOOK LOAN OF RS.1,OO,OOO/- CONFIRMATION OF CREDITOR WAS FILED-LOWER AUTHORITIE S MADE ADDITION U/S 68 HOLDING THAT AMOUNT WAS DEPOSITED IN CASH IN THE BANK ACCOUNT OF LENDER IMMEDIATELY PRIO R TO DATE OF LOAN - HELD- ASSESSEE HAS ESTABLISHED THE IDENTITY- THE PARTY HAS CONFIRMED THE TRANSACTION-IF AO DOUBTED THE TRA NSACTION, AO SHOULD HAVE CALLED CREDITOR U/S 131- ADDITION CANNOT BE MADE. THUS, APPELLANT HAS FURNISHED ALL THE REQUIRED DETA ILS IN ORDER TO PROVE GENUINENESS OF THE TRANSACTION AND CREDITWORT HINESS OF THE CREDITOR. THEREFORE, THE A 0 WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 2,45,00,000/ON ACCOUNT OF UNSECURED LOAN FROM SHRI RAJESH SADHWANI. THUS, KEEPING IN VIEW THE DOC UMENTARY EVIDENCES FILED BY THE APPELLANT AND CASE LAWS CITE D ABOVE, THE ADDITION MADE BY THE AO AMOUNTING TO RS. 2,45,00,00 0/- IS DELETED . THEREFORE, THE APPEAL ON THIS GROUND IS ALLOWED. 111. FROM PERUSAL OF THE FINDING OF LD.CIT(A), VARIOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE TO SUPP ORT THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SHRI RAJESH SADHWANI WHICH ARE IN ITSELF SUFFICIENT ENOUGH TO S ATISFY M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 131 THAT THE ALLEGED AMOUNT OF RS.2,45,OO,OOO/- SHOULD NOT HAVE BEEN TREATED AS UNEXPLAINED CASH CREDIT AND FU RTHER IN VIEW OF THE DECISION OF THIS TRIBUNAL RELIED BY LD. CIT(A) IN THE CASE OF UMESH ELECTRICALS VIS ACIT (SUPRA) AND ASEEM SINGH V/S ACIT (SUPRA) WE ARE SATISFIED WITH THE FINDING OF LD. CIT(A) AND OF THE CONSIDERED VIEW THAT SINCE THE A SSESSEE HAS FURNISHED ALL THE REQUIRED DETAILS TO PROVE THE IDENTITY OF THE LENDER, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LENDER I.E. SHRI RAJESH SAD HWANI THERE IS NO JUSTIFICATION AT THE END OF THE LD. A.O IN MAKING THE ADDITION FOR UNEXPLAINED CASH CREDIT OF RS.2,45 ,00,000/- U/S 68 OF THE ACT. WE THUS CONFIRM THE FINDING OF LD. CIT(A). IN THE RESULT APPEAL OF THE REVENUE IN GROUND NO.3 I S DISMISSED. 112. REMAINING GROUNDS OF REVENUE ARE GENERAL IN NA TURE WHICH NEEDS NO ADJUDICATION. REVENUES APPEAL IN T HE CASE OF M/S SIGNATURE COLONISERS PVT. LTD FOR ASSESSMENT YEAR 2014-15 IS DISMISSED. M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 132 113. IN THE RESULT (I) IN THE CASE OF M/S SIGNATURE BUILDERS, ASSESSEES APPEAL FOR 2012-13IS DISMISSED AND THAT F OR ASSESSMENT YEAR 2013-14 AND 2014-15 ARE ALLOWED WHEREAS THE REVENUE'S APPEAL FOR ASSESSMENT YEAR 20 12-13 TO 2014-15 ARE DISMISSED (II) IN THE CASE OF M/S SIG NATURE INFRASTRUCTURE, ASSESSEE'S APPEAL FOR ASSESSMENT Y EAR 2013- 14 AND 2014-15 ARE ALLOWED AND REVENUE'S APPEAL FOR ASSESSMENT YEAR 2012-13 IS DISMISSED AND (III) IN TH E CASE OF M/S SIGNATURE COLONISERS PVT. LTD, REVENUES APP EAL FOR ASSESSMENT YEAR 2014-15 IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 08.01 .2021. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 08 TH JANUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE M/S SIGNATURE BUILDERS & ORS ITA NO.184 TO 186/IND/2018 & ORS 133
