The Dy. CIT, Central Circle-2(4), Ahmedabad V. Shayona Harmony Developers, Ahmedabad

ITSSA 267/AHD/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4947 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 21-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R. B. TAINK
• Section: 145; 54; 144; 143(3); 274

Judgement Text

, ‘D’ । IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD (Convened through Virtual Court) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR आयकर अपील (एस. एस.) सं./I.T(SS) .A. No. 267/Ahd/2017 ( Assess ment Ye ar : 2014-15) De pu ty C o mmi ss io ner o f In co me- tax Ce ntr al C ir cle – 2 ( 4), Ah me da bad , 3 r d F lo or, Aa yk a r Bh av an A n nex e, As hra m R oad , Ah m eda ba d - 38 00 09 / V s . Sh ay on a Ha r mony De vel op er s 32, V iv id h Bh ar ti S oci et y, Nr. N at io na l Han dl oo m, Na va Va da j, A h me dab ad - 38 00 60 यी ल सं./ ीआ आर सं./P A N / G IR N o . : A B Y FS 1 9 5 3 P (अपील Appellant) . . ( य / Respondent) अपील र स /Appellant by : Sh ri Pu ru sh ot ta m K u mar, Sr. D R य क र स / Respondent by : Shri R. B. Taink, A.R. स क र! D a t e o f H e a r i n g 10/03/2022 "#$% क र! /D a t e o f P r o n o u n c e m e n t 23/03/2022 ORDER PER MAHAVIR PRASAD, JM: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Inco me IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 2 - Tax (Appeals)-1 2, Ah medabad (‘CIT (A)’ in sho rt), dated 28.03.2017 arising in the assessment order dated 28.03.2016 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 153B(1)(b) of th e Income Tax Act, 1961 (the Act) concerning AY. 2014-15. 2. The Revenue has taken following grounds of appeal: “ 1 . O n t h e f a c t s a n d i n t h e c i rc u m st a n c e s o f t h e c ase a n d i n l a w, t h e L d . CI T (A ) h a s e r re d i n l a w a n d / o r o n f a c ts i n d e l e t i n g a d d i t i o n o n a c c o u n t o f o n m o n e y re c e i p t / u n re c o rd e d s a l e c o n s i d e r a t i o n o f R s. 2 , 5 4 , 3 3 , 3 3 3 / - . 2 . O n t h e f a c t s a n d i n t h e c i rc u m st a n c e s o f t h e c a se a n d i n l a w, t h e L d . CI T (A ) o u g h t t o h a v e u p h e l d t h e o rd e r o f t h e A . O . 3 . I t i s, t h e r e f o re , p r a y e d t h a t t h e o r d e r o f t h e Ld . CI T (A ) b e se t a s i d e a n d t h a t o f t h e A . O . b e r e s t o r e d t o t h e ab o v e e x t e n t . ” 3. The facts o f the case are that asse ssee is engaged in the business of building construction/real estate. The AO, while completing the assessment , made following additions: A d d i t i o n o n a c c o u n t o f A . Y . 2 0 1 4 - 1 5 U n r e c o r d e d s a l e c o n s i d e r a t i o n ( o n - m o n e y) 2 , 5 4 , 3 3 , 3 33 U n a c c o u n t e d e x p e n s e s 1 3 , 5 2 , 7 8 0 T o t a l 2 , 6 7 , 8 6 , 1 1 3 The AO stated th at during the search operation taken place to the various place of group including connecting place of Shri Suresh R. Patel and Shayona rand Corporation, several incriminating documents / deeds / papers we re found. On screening the said, at time of sea rch operation, post Search action and also during the course of asse ssment proceedings it IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 3 - was noticed that Shri Suresh R . Patel and other partners of the assessee firm we re making purchase/sale transactions of land as well as receiving amount being sale consideration on behalf of groups including Shayona Land Corporation. Sh ri Sure sh Patel, a partner o f the firm adopted at simila r policy regarding fixation of sale for all projects like Aaryamaan of Gajanand Corporation wherein Suresh R. Pa tel is a one of the partner and having 25% therein. Aa rya maa n was a residential project of the Shayona Group. On going through the various seized mate rials as wel l as state ment of various person s it was establish that the modus operandi of the group wherein the assessee is involved either directly or through any partner o f the firm or any person of the Shayona Group that the assessee firm has booked "sale consideratio n" at Rs. 60 against actual sale receipts of 100. In short there was a 60/40 ratio of actual sale receipt. Rs. 60 out of 100 was booked in the books of accounts and offered fo r tax. Balance Rs. 40 was being taken either in "Cash" or in any kind in the form of "On -money". The said amount was found out from the books as well as on recorded sale consideration. For instance, in the case of Shri Sunil Jagdishbhai Patel, allottee of Flat 1-104, of Shayona Group, it was no ticed that the group has received 30 lacs as against only Rs. 18,99,500/- was booked as sale consideration and remaining Rs.11,00,500/- being "On Money" was paid by Shri Sunil J. Patel paid in cash from ti me to ti me. It was also noticed in the case of Shri Suketukumar Babulal Upadhyay a me mbe r o f the flat No. I. 302 o f Shayona group that Shri Suketukumar B abulal Upadhyay has actual paid Rs. IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 4 - 32,44,000/-against purchase of flat no. I. 302. As a gainst the Shayona Group has booked Rs. 25,15,200/- only as a sale consideration and relevant deed was executed for 25,15,200/-. Shri Suketukuma r Babulal Upadhyay has paid balance Rs. 7,28,800/- in cash to Shayona Gro up. As the modus operandi in respect of fix ation of sale pri ce as well as o ffer of sale consideration was simila r fo r entire Shayona Group as well as connected group to the assessee, th e assessee firm was also in receipt of "On M oney" in 60/40 ratio. Looking to the papers seized, state ments recorded as well as action taken in this regards it was established fact that all concerns of the Shayona Group including the Shayona Land Corporation the assessee , was tak ing on money which were out of b ooks and was not o ffe red for taxation. During the peri od under consideration, the assessee has released / handed over possession of 12 units of Shayona Harmony Bungalow and actual sale consideration received Rs. 6,35,83,3 33/-. The assessee has offe red sale consideration for Rs. 3 ,81,50,000/-, only. Balance amount of Rs. 2,5 4,33,333/- being on money received on cash for otherwise re mains to be taxed. Asse ssee failed to furnish details alongwith documentary evidences in support of his claim as wel l as failed to furnished explanations satisfactory, on this issue, Rs. 2,54,33,333/- is added to total income consi dering unrecorded sale consideration. Penalty proceedings u/s 274 r.w.s. 271(l)(c) of the IT Act initiated separately for concealing income. (Addition of R s. 2 ,54,33,333/-) IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 5 - 4. Thereafter, a ssessee pre ferred first statutory appeal before the learned CIT(A) who granted relief to the assessee by observing as u nder: “The Assessing Officer, without recording any finding that the books of account maintained by the assessee were incorrect, rendering it impossible to deduce the profits, proceeded to reject the book results, invoking the provisions of section 145 of the Act. No specific discrepancies or defects in the books of account of the assessee have been pointed out before us nor was any material brought to our notice to establish that purchases were inflated or receipts suppressed. In these circumstances, there was no justification in invoking the provisions of section 145 of the Act [CIT v. Vikram Plastics [1999] 239 ITR 161 (Guj.). Since the Assessing Officer had not recorded any findings for rejecting the book results and applying the gross profit rate of 26 per cent in the year under consideration, we are of the opinion that the ld. CIT(A) was justified in deleting the addition. Even the revenue have not placed before us any material controverting the aforesaid findings of facts recorded by the ld. CIT(A). If there was no challenge to the transactions represented in the books, then it is not open to revenue to contend that what is shown by the entries is not the real state of affairs. In the light of these observations of the Hon'ble jurisdictional High Court, we uphold the findings of the ld. CIT(A). Consequently, grounds No. 1 and 2 are dismissed.” 5. Now, Revenue ca me before us. 6. At the outset, learned AR contended that matter is squarely covered by the ITAT in assessee ’s g roup concern by this Bench with following observations: 7. We have gone through the relevant record and impu gned order and heard both the parties. We are of the opinion that learned CIT(A) h as passed a detailed and reasoned order as under: IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 6 - “ 9 . I h a v e c a r e f u l l y g o n e t h r o u g h t h e a s s e s s m e n t o rd e r s , s u b m i s s i o n s f i l e d b y t h e a p p e l l a n t a s a l s o t h r o u g h t h e r e c o r d s o f t h e A O . H a v i n g d o n e s o , a t t h e o u t s e t , 1 h a v e n o h es i t a t i o n i n u n c o n d i t i o n a l l y a n d u n a m b i g u o u s l y o b s e r v i n g t h a t t he a c t i o n o f t h e L d . A O i n m a k i n g t h e o n - m o n e y a d d i t i o n i n t h e ha n d s o f t h e a p p e l l a n t i s b a s e d o n a b s o l u t e l y n o c r e d i b l e e v i d e nc e , a n d t h e r e f o r e , t h e A R i s r i g h t t h a t t h e a d d i t i o n i s a g ai n s t t h e l a w a s e x p l a i n e d b y t h e S u p r e m e C o u r t . A s s u c h , i n t h e f a ce o f t h e a p p e l l a n t ' s s u b m i s s i o n b e f o r e t h e A O a s r e c o r d e d b y h e r o n p a g e n o . 4 - 5 o f t h e a s s e s s m e n t o r d e r , i t i s w h o l l y i n c o n ce i v a b l e a s t o h o w a n d w h y t h e A O c o u l d p r o c e e d t o m a k e t h e a d d i t io n o f o n - m o n e y r e c e i p t i n t h e h a n d s o f t h e a p p e l l a n t . T h e m et h o d a d o p t e d b y t h e A O f o r a r r i v i n g a t t h e e s t i m a t e o f " o n - m o n e y r e c e i p t s " i s e q u a l l y u n u s u a l a n d c u r i o u s . T h e A O , b a s e l e s s l y a n d w i t h o u t g i v i n g e v e n a s e m b l a n c e o f w i n d o w t o h e r m i n d , h a s a r b i t r a r i l y c o m e t o a w h o l l y i l l - c o n c e i v e d c o n c l u s i o n t h a t t h e r e c o r d e d r e c e i p t s r e p r e s e n t 6 0 % o f t h e " a c t u a l r e c e i p t s " s o t h a t t h e o n - m o n e y r e c e i p t s h o u l d a m o u n t t o 6 6 . 6 6 % o f t h e r e c o r de d r e c e i p t s . I h a v e n o t e d t h a t t h e A O h a s r e l i e d o n l y a n d e x c l u s i ve l y o n m a t e r i a l s e i z e d / i m p o u n d e d f r o m t h i r d p a r t y p r e m i s e s w h i l e r em a i n i n g c o m p l e t e l y u n m i n d f u l o f t h e f a c t t h a t t h e f u n d a m e n ta l d i s c i p l i n e o f a s s e s s m e n t p r o c e e d i n g s , a n d i n d e e d t h e b a s i c l a w o f e v i d e n c e , r e q u i r e s t h a t m a t e r i a l s e i z e d o n l y f r o m t h e a p p e l l an t ' s p r e m i s e s c a n b e m a d e t h e f o u n d a t i o n o f t h e a d d i t i o n i n r e g u la r a s s e s s m e n t b e i n g f r a m e d b y h e r u / s 1 4 3 ( 3 ) . T h e A O h a s , a s r i g ht l y s u b m i t t e d b y t h e A R , a l s o r e m a i n e d o b l i v i o u s t o t h e f a c t t h a t t h e f u n d a m e n t a l p r i n c i p l e s o f a u d i a l t e r a m p a r t e m m a n d a t e s a q u a s i -j u d i c i a l a u t h o r i t y l i k e h e r t o u s e , i f a t a l l , t h i r d p a r t y ev i d e n c e s o n l y a f t e r f i r s t g r a n t i n g t h e o p p o r t u n i t y o f r e b u t t i n g t h e c o nt e n t s / i n f e r e n c e s f r o m s u c h t h i r d p a r t y e v i d e n c e s . T h e A O h a s a l s o a tt e m p t e d t o p r o v i d e a n a p p a r e n t j u s t i f i c a t i o n t o h e r a c t i o n b y u s i n g w o r d s a n d p h r a s e s l i k e " t h e g r o u p i s i n d u l g e d i n " o r " t h e d e pa r t m e n t h a s c o l l e c t e d e n o u g h e v i d e n c e s " o r " t h e f a c t s a n d m a t e ri a l s g a t h e r e d d u r i n g t h e s e a r c h s p e a k l o u d l y a b o u t t h e m o d u s o p e ra n d i o f t h e g r o u p i n c o l l e c t i n g o n - m o n e y i n a l l t h e i r p r o j e c t s o n 6 0 : 4 0 b a s i s " w i t h o u t r e a l i z i n g t h a t t h e c o n c e p t o f " g r o u p " i s a li e n t o I n c o m e - t a x A c t , o r t o g e n e r a l l a w o f e v i d e n c e . T h e " m o d u s o p e r a n d i " o f t h e " g r o u p " a s c o n c e i v e d b y A O t o h a v e b e e n " u n e a r th e d " d u r i n g t h e s e a r c h , i f a t a l l s o , w o u l d o n l y b e a s t a r t i n g p o i n t o f f u r t h e r e n q u i r y a n d i n v e s t i g a t i o n a g a i n s t t h e a p p e l l a n t b y t h e A O a n d c e r t a i n l y c a n n o t b e a n " e v i d e n c e " , m u c h l e s s a c o n cl u s i v e e v i d e n c e , a g a i n s t t h e a p p e l l a n t . T h e r e i s n o m a t e r ia l g a t h e r e d b y t h e A O o r u n e a r t h e d d u r i n g t h e s e a r c h w h i c h c a n b e c o n s i d e r e d a d v e r s e t o o r a g a i n s t t h e a p p e l l a n t . I h a v e t h e r e f o r e c o m e t o a c o n s i d e r e d c o n c l u s i o n t h a t t h e a d d i t i o n o f " o n - m o n ey r e c e i p t s " m a d e b y t h e A O f o r t h e y e a r u n d e r a p p e a l a r e w h o l l y b a s e l e s s a n d u n s u p p o r t e d b y a n y c r e d i b l e e v i d e n c e a g a i n s t t he a p p e l l a n t a n d t h e r e f o r e n o t s u s t a i n a b l e . M o r e o v e r , e v i d e n c e s t h e m s e l v e s r e f e r r e d t o b y t h e A O i n t h e a s s e s s m e n t o r d e r s , a r e n o t o n l y i r r e l e v a n t a n d t h e r e f o r e u n u s a b l e a g a i n s t t h e a p p e ll a n t , t h e y , e v e n IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 7 - i f h e l d t o b e c r e d i b l e a g a i n s t t h e a p p e l l a n t , a l s o c a n n o t j u s t i f y o r v a l i d a t e t h e a d d i t i o n m a d e b y t h e A O o n p r e s u m p t i o ns a n d s u r m i s e s a t 6 6 . 6 6 % o f r e c o r d e d r e c e i p t s f o r e a c h y ea r . T h e r e i s n o v a l i d o r m e a n i n g f u l e x p l a n a t i o n a s t o o n w h a t b a s i s t h e A O h a s h e l d f i r s t l y t h a t r e c e i p t s h o w n i n t h e b o o k s b y t h e a p p e l l a n t i s o n l y 6 0 % o f t h e a c t u a l r e c e i p t s . S i m i l a r l y , t h e r e i s n o l e g a l l y s a n c t i f i e d o r f a c t u a l l y s u p p o r t e d b a s i s w i t h t h e A O t o f u r t h e r h o l d t h a t a p p e l l a n t h a s e a r n e d s u c h u n a c c o u n t e d r e c e i p t s f o r t h e y e a r u n d e r a p p e a l f o r a p e r i o d w h i c h e v e n s u c c e e d s t h e d a t e o f s e a r c h . T h e r e i s n o p r e s u m p t i o n i n l a w t h a t a l l " g r o u p m e m b e r s " ar e f o l l o w i n g " m o d u s o p e r a n d i o f o n e o f t h e g r o u p m e m b e r s " . S i m i la r l y , t h e r e i s n o p r e s u m p t i o n i n l a w t h a t a n a s s e s s e e w o u l d c o nt i n u e , f r o m y e a r t o y e a r , t o e n g a g e i n a n d e a r n u n a c c o u n t e d i n co m e e v e n i f c a t e g o r i c a l e v i d e n c e s o f s u c h u n a c c o u n t e d e a r n i n g by t h e v e r y a p p e l l a n t f o r o n e y e a r a r e a l s o i n A O ' s p o s s e s s i o n . T h e A O ' s e x t r a p o l a t i o n o f a l l e g e d " a d v e r s e i n f e r e n c e " a g a i n st t h e a p p e l l a n t o n t h e b a s i s o f d o c u m e n t s s e i z e d / i m p o u n d e d f r o m w h o l l y u n r e l a t e d t h i r d p a r t i e s a n d p o s s i b l y ( a n d i f a t a l l ) r e l a t a b l e t o o n l y o n e o f t h e y e a r s e v e n a g a i n s t s u c h t h i r d p a r t i e s , b y o b s e rv i n g t h a t " a l l t h e s e g o t o p r o v e t h a t t h e d e p a r t m e n t h a s g a t h e r e d p l e n t y o f e v i d e n c e s o n t h e b a s i s o f w h i c h t h i s c o n c l u s i o n i s d r a w n " h a s n o l e g a l s a n c t i o n . T h u s , a d d i t i o n h a s n o f o u n d a t i o n e x c e p t i n s u s p i c i o n a n d s u r m i s e o f t h e A O . S u s p i c i o n , h o w - s o -e v e r s t r o n g , c a n n o t p a r t a k e t h e c h a r a c t e r o f e v i d e n c e , a n d , t h e A O i s i n d e e d o b l i g e d t o p o s i t i v e l y b r i d g e t h e g a p b e t w e e n s u s p i ci o n a n d e v i d e n c e . I d o n o t t h i n k f i r s t l y t h a t t h e s e i z e d e v i d e n c es r e f e r r e d t o b y t h e A O s h o w a n y t h i n g b e y o n d t h e f a c t t h a t s o me o n - m o n e y i s p o s s i b l y c h a r g e d b y G a j a n a n d C o r p o r a t i o n i n A r y a m a n S c h e m e , a n d b y N a r a y a n D e v e l o p e r s i n S h a y o n a G r e e n S c h e m e . T h e t h i r d d o c u m e n t p r i n t e d b y t h e A O i n t h e a s s e s s m e n t o r d e r i s m e r e l y p r o j e c t i o n t h a t i n S h a y o n a P u s h p S c h e m e o f P o o j a B ui l d c o n , t h e r e i s a r e c e i p t / l i k e l i h o o d o f " e x t r a - r e c e i p t " o f R s . 4 .0 8 c r o r e s a s a g a i n s t " b o o k - r e c e i p t " o f R s . 4 7 . 7 6 c r o r e s . T h e A O ha s c o n s p i c u o u s l y n o t s h o w n a t a l l o r e v e n a r g u e d a s t o w h y a n d h o w s u c h " e v i d e n c e s " , e v e n i f p o s s i b l y a c c e p t a b l e a g a i ns t t h e a p p e l l a n t f o r t h e y e a r s u n d e r r e f e r e n c e , w o u l d s t i l l l e a d t o a c o n c l u s i o n t h a t 6 6 . 6 6 % o f t h e r e c o r d e d a m o u n t s h a v e b e e n r e c e i v e d as " o n - m o n e y " b y t h e a p p e l l a n t f o r t h e r e s p e c t i v e a s s e s s m e n t y e a rs . T h e A O h a s r e f e r r e d t o " w i d e v a r i a t i o n " i n t h e s a l e - p r i c e o f f l a t s a s i s e v i d e n t f r o m t h e A n n e x u r e t o t h e a s s e s s m e n t o r de r . H o w e v e r , t h i s " w i d e v a r i a t i o n " c a n n o t p e r s e a n d i n l a w , i n t h e a b s e n c e o f c a t e g o r i c a l e v i d e n c e o f r e c e i p t o f o n - m o n e y b y t h e a p p e l l a n t , b e o f a n y m e a n i n g f u l i m p o r t . M o r e o v e r , t h e A O h a s n o t v a l i d l y a l s o r e j e c t e d (a n d t h e r e d o e s n o t a l s o a p p e a r a n y b a s i s o r r e a s o n f o r t h a t ) t h e b o o k s o f a c c o u n t s u / s 1 4 5 s o a s t o e v e n en a b l e h e r i n e s t i m a t i n g t h e i n c o m e o f t h e a p p e l l a n t u / s 1 4 4 . T h u s t h e a d d i t i o n o f " o n - m o n e y " r e c e i p t f o r t h e y e a r u n d e r r e f e r e n c e i s p r e s u m p t u o u s a n d c o n j e c t u r a l a n d i s b a s e d o n n o e v id e n c e . T h e r e i s i n d e e d n o d o c u m e n t s e i z e d f o r m t h e a p p e l l an t o r e l s e w h e r e w h i c h e v e n p o i n t t o u n a c c o u n t e d r e c e i p t by t h e IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 8 - a p p e l l a n t . I m a y c o n c l u d e b y o b s e r v i n g t h a t t h e a d d i t i o n o f o n- m o n e y r e c e i p t s m a d e b y t h e . A O i s c o n s p i c u o u s l y , p a te n t l y a n d e v i d e n t l y f o u n d e d o n " n o e v i d e n c e " a n d i s t h u s w h o ll y w i t h o u t m e r i t . T h e r e f o r e I h a v e n o h e s i t a t i o n i n d e l et i n g t h e s a m e . B e f o r e p a r t i n g w i t h t h e i s s u e , I w o u l d q u o t e f r o m th e f o l l o w i n g J u r i s d i c t i o n a l T r i b u n a l a n d f r o m D e l h i H i g h C o u r t ju d g m e n t s r e l i e d u p o n b y t h e A R , w h i c h i n s t r u c t i v e l y a l s o r e fe r t o a s e r i e s o f o t h e r A u t h o r i t i e s a n d l a y d o w n a p r o p o s i t i o n o f l a w t h a t w h i l e , t h e A O i s n o t f e t t e r e d b y t h e s t r i c t r u l e s o f e v i d e n c e , h e h a s , a t t h e s a m e t i m e , n o a u t h o r i t y t o a c t w i t h o u t a n y r e l e v a n t m a t e r i a l , a n d f u r t h e r , t h a t e v e n t h e " b e s t j u d g m e n t a s s e s s m e n t " ca n n o t a l s o b e b a s e d o n m e r e s u s p i c i o n o r o n p u r e g u e s s w o r k o f t he A O . A s n o t e d i n t h e D e l h i H i g h C o u r t j u d g e m e n t , t h e r e l i a nc e o n " n o t o r i o u s p r a c t i c e s i n t h e i n d u s t r y " o f c h a r g i n g "o n - m o n e y " h a s a l s o b e e n d i s a p p r o v e d b y t h e A p e x C o u r t . (E m p h a s i s m i n e ) : D i s c o v e r y E s t a t e s ( P . ) L t d . ( 2 0 1 3 ) 3 1 t a x m a n n . c o m 18 0 ( D e l ) " 1 7 . I t o n l y r e m a i n s f o r u s t o r e f e r t o t h e o b s e r v at i o n s o f t h e a s s e s s i n g o f f i c e r t o t h e e f f e c t t h a t n o o n e m a k e s a l o s s i n r e a l e s t a t e b u s i n e s s a n d t h a t t h e m a r k e t p e r c e p t i o ns i n d i c a t e t h a t t h e p r i c e s o f t h e i m m o v e a b l e p r o p e r t i e s a r e a lw a y s o n t h e u p w a r d t r e n d . T h e s e o b s e r v a t i o n s h a v e , i n t e r a li a , f o r m e d t h e b a s i s o f t h e a d d i t i o n s m a d e b y t h e a s s e ss i n g o f f i c e r . I t w a s e v e n s u g g e s t e d b e f o r e u s o n b e h a l f o f t h e r e v e n u e t h a t i t i s a " n o t o r i o u s p r a c t i c e " p r e v a i l i ng i n r e a l e s t a t e c i r c l e s t h a t i n a l l p r o p e r t y t r a n s a c t i o n s t he r e i s n o n - d i s c l o s u r e o f t h e f u l l c o n s i d e r a t i o n . A s p o i n t e d o ut e a r l i e r , t h i s c a n n o t p e r s e c o n s t i t u t e t h e b a s i s o f \ t h e a d di t i o n , t h o u g h w e m u s t h a s t e n t o a d d t h a t i t c a n v e r y w e l l b e a s t a r t i n g p o i n t f o r f u r t h e r i n v e s t i g a t i o n . I n L a l c h an d B h a g a t A m b i c a R a m v . C I T [ 1 9 5 9] 3 7 I T R 2 8 8 , t h e S u p r e m e C ou r t d i s a p p r o v e d t h e p r a c t i c e o f m a k i n g a d d i t i o n s i n t h e a s s e s s m e n t o n m e r e s u s p i c i o n a n d s u r m i s e s o r b y t a ki n g n o t e o f t h e " n o t o r i o u s p r a c t i c e " p r e v a i l i n g i n t r a de c i r c l e s . I t w a s o b s e r v e d a s u n d e r : " A d v e r t i n g t o t h e v a r i o u s p r o b a b i l i t i e s w h i c h w e i g he d w i t h t h e I n c o m e - t a x O f f i c e r w e m a y o b s e r v e t h a t t h e n o t or i e t y f o r s m u g g l i n g f o o d g r a i n s a n d o t h e r c o m m o d i t i e s t o B e n ga l b y c o u n t r y b o a t s a c q u i r e d b y S a h i b g u n j a n d t h e n o t o r i et y a c h i e v e d b y D h u l i a n a s a g r e a t r e c e i v i n g c e n t r e f o r s u c h c o m m o d i t i e s w e r e m e r e l y a b a c k g r o u n d o f s u s p i c i o n an d t h e a p p e l l a n t c o u l d n o t b e t a r r e d w i t h t h e s a m e b r u s h as e v e r y a r h a t d a r a n d g r a i n m e r c h a n t w h o m i g h t h a v e b e e n i n du l g i n g i n s m u g g l i n g o p e r a t i o n s , w i t h o u t a n i o t a o f e v i d e n ce i n t h a t b e h a l f . " " IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 9 - B u d h a l a l & C o . [ 2 0 1 1 ] 1 0 t a x m a n n . c o m 5 2 ( A h d . ) 5 . We h a v e h e a r d b o t h t h e p a r t i e s a n d g o n e t h r o u g h t h e f a c t s o f t h e c a s e . I n d i s p u t a b l y , G P r a t e i n t h e y e ar u n d e r c o n s i d e r a t i o n d e c l i n e d t o 2 4 . 9 2 p e r c e n t M ' s - d - i / i :s 2 8 . 1 3 p e r c e n t o f t h e p r e c e d i n g y e a r w h i l e t h e I d . C I T ( A ) c o n c l u d e d t h a t t h e a s s e s s e e h a d l o g i c a l l y e x p l a i n e d w i t h e l a b o r a t e r e a s o n s , t h e f a l l i n G P d u r i n g t h e y e a r un d e r c o n s i d e r a t i o n a n d t h e A s s e s s i n g O f f i c e r d i d n o t p o in t o u t a n y s p e c i f i c d e f e c t s i n t h e b o o k s o f a c c o u n t m a i n t ai n e d b y t h e a s s e s s e e . W e f i n d f r o m t h e a s s e s s m e n t o r d e r t h a t t h e A s s e s s i n g O f f i c e r d i d n o t p o i n t o u t a n y d e f e c t s i n t h e b o o k s o f a c c o u n t w h i l e i g n o r i n g t h e b o o k r e s u l t s n o r b r o ug h t a n y m a t e r i a l o n r e c o r d r e g a r d i n g t h e g e n u i n e n e s s o f p u r c h a s e s , s a l e s o r e x p e n d i t u r e i n c u r r e d b y t h e a s se s s e e b e f o r e d i s c a r d i n g t h e b o o k r e s u l t s. H o n ' b l e G a u h a t i H i g h C o u r t i n A l u m i n u m I n d u s t r i e s ( P . ) L t d . v . C I T [ 1 9 9 5] 8 0 T a x m a n 1 8 4 o b s e r v e d t h a t a l o w e r r a t e o f g r o s s p r o fi t d e c l a r e d b y t h e a s s e s s e e a s c o m p a r e d t o t h e p r e v i o us y e a r , w o u l d n o t i n i t s e l f b e s u f f i c i e n t t o j u s t i f y a n y a dd i t i o n . T h e m e r e f a c t t h a t t h e p e r c e n t a g e o f l o s s o r g r o s s p r o fi t i s h i g h o r l o w i n a p a r t i c u l a r y e a r d o e s n o t n e c e s s a r i l y l ea d t o i n f e r e n c e t h a t t h e r e h a s b e e n s u p p r e s s i o n . L o w p r o fi t i s n e i t h e r & c i r c u m s t a n c e n o r m a t e r i a l t o j u s t i f y a d d it i o n o f p r o f i t s . T h e r a t i o o f t h e j u d g m e n t s i n D h a k e s w a r i C o t t o n M i l l s L t d . v . C J T [ 1 9 5 4] 2 6 I T R 7 7 5 (S C ) ; R a g h u h a r M a n d a l H a r i h a r M a n d a l v . S t a t e o f B i h a r [ 1 9 5 7] 8 S T C 7 7 0 ( S C ) ; S t a t e o f K e r a l a v . C . V e l u k u t t y [ 1 9 6 6] 6 0 I T R 2 3 9 ( S C ) ; S t a t e o f O r i s s a v . M a h a r a j a S h r i B . P . S i ng h D e o [ 1 9 7 0] 7 6 I T R 6 9 0 ( S C ) ; B r i j B h u s a n L a l P a r d u m a n K u m a r v . C J T [ 1 9 7 8] K 5 2 4 (S C ); C h o u t h m a l A g a r w a l l a v . C I T [ 1 9 62] 4 6 I T R 2 6 2 ( A s s a m ) ; R . V . S . & S o n s D a i r y F a r m v . C I T [ 2 0 0 2] 2 5 7 I T R 7 6 4 / [ 2 0 0 3] 1 3 0 T a x m a n 6 1 5 ( M a d . ) ; I n t e r n a t i o n a l F o r e s t C o . v . C I T [ 1 9 7 5] 1 0 1 I T R 7 2 1 ( J . & K . ) ; M . D u r a i R a j v . C I T [ 1 9 7 2] 8 3 I T R 4 8 4 ( K e r ) ; R a m c h a n d r a R a m m v a s v . S t a t e o f O r i s s a [ 1 9 7 0] 2 5 S T C 5 0 1 ( O n s s a ) ; A c t i o n E l e c t r i c a l s v . D y . C I T [ 2 0 0 2] 2 5 8 IT R 1 8 8 / [ 2 0 0 3] 1 3 2 T a x m a n 6 4 0 ( D e l h i ) a n d K a m a l K u m a r S a h a r i a v . C I T [ 1 9 9 5] 2 1 6 I T R 2 1 7 / J 1 9 9 9] 7 3 T a x m a n 2 2 9 ( G a u . ) i n d i c a t e t h a t t h e A s s e s s i n g O f f i c e r i s n o t fe t t e r e d b y a n y t e c h n i c a l r u l e s o f e v i d e n c e a n d p l e a d i n g s , a n d h e i s e n t i t l e d t o a c t o n m a t e r i a l w h i c h a r e n o t a c c e p t a b le i n e v i d e n c e i n a c o u r t o f l a w , b u t w h i l e m a k i n g t h e a s s e s s m e n t u n d e r t h e p r i n c i p l e s o f b e s t j u d g m e n t , t h e I n c o m e - ta x O f f i c e r i s n o t e n t i t l e d t o m a k e a p u r e g u e s s w i t h o ut r e f e r e n c e t o a n y e v i d e n c e o r m a t e r i a l . T h e r e m u s t be s o m e t h i n g m o r e t h a n a m e r e s u s p i c i o n t o s u p p o r t t h e a s s e s s m e n t . L o w p r o f i t i n a p a r t i c u l a r y e a r i n i t s el f c a n n o t b e a g r o u n d f o r i n v o k i n g t h e p o w e r s o f b e s t j u d g m e nt a s s e s s m e n t w i t h o u t s u p p o r t o f a n y m a t e r i a l o n r e c o rd . T h e IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 10 - H o n ' b l e G u j a r a t H i g h C o u r t i n t h e c a s e o f C I T v . A mi t b h a i G u n v a n t b h a i [ 1 9 8 1] 1 2 9 I T R 5 7 3 h e l d t h a t i f t h e r e wa s n o c h a l l e n g e t o t h e t r a n s a c t i o n s r e p r e s e n t e d i n t h e b oo k s t h e n i t i s n o t o p e n t o r e v e n u e t o c o n t e n d t h a t w h a t i s sh o w n b y t h e e n t r i e s i s n o t t h e r e a l s t a t e o f a f f a i r s . S e c o nd l y , e v e n i f f o r s o m e r e a s o n , t h e b o o k s a r e r e j e c t e d i t i s n o t op e n t o t h e A s s e s s i n g O f f i c e r t o m a k e a n y a d d i t i o n o n e s t i m a t e b a s i s o r o n p u r e g u e s s w o r k . T h e A s s e s s i n g O f f i c e r , w i t h o u t re c o r d i n g a n y f i n d i n g t h a t t h e b o o k s o f a c c o u n t m a i n t a i n e d b y t h e a s s e s s e e w e r e i n c o r r e c t , r e n d e r i n g i t i m p o s s i b l e to d e d u c e t h e p r o f i t s , p r o c e e d e d t o r e j e c t t h e b o o k r e s ul t s , i n v o k i n g t h e p r o v i s i o n s o f s e c t i o n 1 4 5 o f t h e A c t . N o s p e c i f i c d i s c r e p a n c i e s o r d e f e c t s i n t h e b o o k s o f ac c o u n t o f t h e a s s e s s e e h a v e b e e n p o i n t e d o u t b e f o r e u s n o r w as a n y m a t e r i a l b r o u g h t t o o u r n o t i c e t o e s t a b l i s h t h a t p ur c h a s e s w e r e i n f l a t e d o r r e c e i p t s s u p p r e s s e d . I n t h e s e c i r c u m s t a n c e s , t h e r e w a s n o j u s t i f i c a t i o n i n i n v o k in g t h e p r o v i s i o n s o f s e c t i o n 1 4 5 o f t h e A c t [ C I T ( A ) v . V i kr a m P l a s t i c s [ 1 9 9 9] 2 3 9 I T R 1 6 1 ( G u j . ) . S i n c e t h e A s s e ss i n g O f f i c e r h a d n o t r e c o r d e d a n y f i n d i n g s f o r r e j e c t i n g t h e b o o k r e s u l t s a n d a p p l y i n g t h e g r o s s p r o f i t r a t e o f 2 6 p er c e n t i n t h e y e a r u n d e r c o n s i d e r a t i o n , w e a r e o f t h e o p i n i o n t h a t t h e l d . C I T ( A ) w a s j u s t i f i e d i n d e l e t i n g t h e a d d i t i o n . E v e n t h e r e v e n u e h a v e n o t p l a c e d b e f o r e u s a n y m a t e r i a l c o n t r o v e r t i n g t h e a f o r e s a i d f i n d i n g s o f f a c t s r e c o rd e d b y t h e l d . C I T ( A ) . I f t h e r e w a s n o c h a l l e n g e t o t h e t r a n s ac t i o n s r e p r e s e n t e d i n t h e b o o k s , t h e n i t i s n o t o p e n t o r ev e n u e t o c o n t e n d t h a t w h a t i s s h o w n b y t h e e n t r i e s i s n o t t he r e a l s t a t e o f a f f a i r s . I n t h e l i g h t o f t h e s e o b s e r v a t i o ns o f t h e H o n ' b l e j u r i s d i c t i o n a l H i g h C o u r t , w e u p h o l d t h e f in d i n g s o f t h e l d . C 1 T ( A ) . C o n s e q u e n t l y , g r o u n d s N o . 1 a n d 2 a re d i s m i s s e d . 1 0 . T h u s , t h e a d d i t i o n o f R s . 2 , 5 4 , 3 3 , 3 3 3 / - b e i n g w h o l l y w i t h ou t m e r i t i s d e l e t e d . G r o u n d 3 i s t h u s a l l o w e d . ” Sa me does not require any kind of interference at o ur end. 8. ITAT in assesse e’s own case IT(SS)A Nos. 24 0 to 243/Ahd/2017 for A.Ys. 2011-12 to 2014-15 dismi ssed the Revenue’s appeal by observing as under: “ 7 . We h a v e h e a r d b o t h t h e s i d e s a n d p e r u s e d t h e m at e r i a l o n r e c o r d . T h e a s s e s s e e w a s e n g a g e d i n t h e b u s i n e s s o f d e v e l o p m e n t IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 11 - a n d c o n s t r u c t i o n . T h e r e w a s a s e a r c h a c t i o n u / s . 1 32 o f t h e A c t c a r r i e d o u t o n 1 5 l O c t o b e r , 2 0 1 3 i n t h e c a s e o f t h e a s s e s s e e . D u r i n g t h e c o u r s e o f a s s e s s m e n t , t h e a s s e s s i n g o f f ic e r n o t i c e d t h a t a s s e s s e e h a s w o r k e d a s d e v e l o p e r f o r S h a y o n a C i t y an d S h a y o n a E s t a t e . T h e a s s e s s i n g o f f i c e r s t a t e d t h a t i n t h e g ro u p c a s e s o f o t h e r p r o j e c t p e r t a i n i n g t o A r y a m a a n S c h e m e o f G a j an a n d C o r p o r a t i o n t h e r e w a s o n m o n e y r e c e i p t w h i c h w a s v ol u n t a r i l y d i s c l o s e d a n d a d d i t i o n s w e r e m a d e f o r a s s e s s m e n t y ea r 2 0 1 2 - 1 3 a n d 2 0 1 3 - 1 4 . I n s h o r t t h e r e w a s a 6 0 / 4 0 r a t i o o f a ct u a l s a l e r e c e i p t m e a n i n g t h a t R s . 6 0 o u t o f 1 0 0 w a s b o o k e d in t h e b o o k s o f a c c o u n t a n d o f f e r e d f o r t a x b a l a n c e 4 0 w a s b e i n g t ak e n e i t h e r i n c a s h o r i n a n y k i n d i n t h e f o r m o f o n m o n e y . O n t h e b a s i s o f i n c r i m i n a t i n g d o c u m e n t s e i z e d i n t h e c a s e o f t h e g ro u p c a s e s t h e a s s e s s i n g o f f i c e r w a s o f t h e v i e w t h a t e n t i r e S h a y on a G r o u p a s w e l l a s c o n n e c t e d g r o u p t o t h e a s s e s s e e f i r m w a s i nd u l g e d i n r e c e i p t o f o n m o n e y i n 6 0 / 4 0 . T h e r e f o r e , t h e a s s e s si n g o f f i c e r h a s c o m p u t e d R s . 3 , 1 8 , 7 9 , 3 3 4 / - b e i n g o n m o n e y r e c e i v e d i n c a s h a n d a d d e d t o t h e t o t a l i n c o m e o f t h e a s s e s s e e . T h e a s s es s e e c h a l l e n g e d t h e i m p u g n e d a d d i t i o n b e f o r e t h e l d . C I T (A ) t h a t a ss e s s i n g o f f i c e r h a s m a d e s a i d a d d i t i o n i n t h e a b s e n c e o f i n c r i m i n a ti n g d o c u m e n t s e i z e d f r o m t h e a s s e s s e e . T h e l d . C I T ( A ) h a s c a t e g or i c a l l y s t a t e d r e g a r d i n g d i a r y s e i z e d f r o m S u r e s h b h a i R . P a t e l a n d t h e a s s e s s i n g o f f i c e r h a s h e r s e l f s t a t e d t h a t r e c o r d i n g i n t h e d ia r y w a s p e r t a i n e d t o r e c e i p t f r o m s a l e o f f l a t s p e r t a i n i n g t o A r y a m a an s c h e m e o f G a j a n a n d C o r p o r a t i o n . O b v i o u s l y t h e s e d o c u m e n t s d i d n o t b e l o n g t o t h e a s s e s s e e f i r m . T h e o t h e r d o c u m e n t w h i c h w a s r e f e r r e d b y t h e a s s e s s i n g o f f i c e r w a s p e r t a i n e d t o M / s . N a r a y a n D e v e l o p e r n o t s e i z e d f r o m t h e a s s e s s e e . O n t h e b a s i s o f o t h e r g r ou p c a s e s , t h e a s s e s s i n g o f f i c e r h a s s t a t e d t h a t m o d u s o p e r a n d i o f t h e a s s e s s e e w a s a l s o t h e s a m e t h a t t h e s a l e c o n s i d e r a t i o n w a s re c o r d e d a t R s . 6 0 a s a g a i n s t t h e a c t u a l s a l e r e c e i p t o f R s . 1 0 0 / - . I n o r d e r t o g e t c l a r i f i c a t i o n a b o u t i n c r i m i n a t i n g d o c u m e n t s e i z e d fr o m t h e a s s e s s e e t h e l d . C I T ( A ) h a s a l s o p r o v i d e d o p p o r t u n it y t o t h e r a n g e h e a d t o d i r e c t t h e a s s e s s i n g o f f i c e r t o f u r n i s h s p ec i f i c r e p o r t o n t h e i s s u e . H o w e v e r , t h e a s s e s s i n g o f f i c e r h a s r e f e rr e d s e i z e d d o c u m e n t f o u n d f r o m t h e p o s s e s s i o n o f S u r e s h R . P a te l p a r t n e r p e r t a i n i n g t o A r y a m a a n S c h e m e o f G a j a n a n d C o r p o r a t io n a n d s t a t e d t h a t t h e s a m e m o d u s o p e r a n d i w a s a p p l i e d t o t h e e n t i r e g r o u p . T h e r e f o r e , t h e l d . C I T ( A ) h e l d t h a t t h e a s s es s i n g o f f i c e r h a s r e l i e d o n l y a n d e x c l u s i v e l y o n m a t e r i a l s e i z e d i m p ou n d e d f r o m t h i r d p a r t y p r e m i s e s p e r t a i n i n g t o t h e o t h e r c a s e s f o r c o m p l e t i n g t h e a s s e s s m e n t p r o c e e d i n g s u / s . 1 5 3 A o f t h e a c t i n t h e c a s e o f t h e a s s e s s e e a n d t h e a s s e s s i n g o f f i c e r c o u l d n o t d e m o n st r a t e t h a t a n y i n c r i m i n a t i n g m a t e r i a l w a s s e i z e d f r o m t h e a s s e s s e e d u r i n g t h e c o u r s e o f s e a r c h t o s u b s t a n t i a t e t h a t a s s e s s e e h a d c o l l e c t e d o n m o n e y o n t h e s a l e o f U n i t o f p r o j e c t n a m e l y S h a y o n a T i l a k - 2 o n 6 0 / 4 0 b a s i s . I n t h e l i g h t o f t h e a b o v e f a c t s a n d f in d i n g o f l d . C I T ( A ) , w e d o n o t f i n d a n y i n f i r m i t y i n t h e d e c i s i on o f l d . C I T (A ) a f t e r p l a c i n g r e l i a n c e o n t h e d e c i s i o n o f H o n ' b l e Ju r i s d i c t i o n a l H i g h C o u r t i n t h e c a s e o f S a u m y a C o n s t r u c t i o n 3 8 7 IT R 5 2 9 ( G u j ) IT(SS)A No. 267/Ahd/2017 [DCIT vs. Shayona Harmony Developers) AY 2014-15 - 12 - w h e r e i n i t i s h e l d t h a t i f i n r e l a t i o n t o a n y a s s e ss m e n t y e a r n o i n c r i m i n a t i n g m a t e r i a l i s f o u n d n o a d d i t i o n o r d i s al l o w a n c e c a n b e m a d e i n r e l a t i o n t o t h a t a s s e s s m e n t y e a r i n e x e r c i se o f p o w e r u / s . 1 5 3 A o f t h e A c t . T h e r e f o r e , t h e s e t h r e e g r o u n d s o f a p p e a l o f t h e r e v e n u e a r e d i s m i s s e d . ” Afte r considering the ITAT’s order in assessee’s own case, we dismi ss the appeal of the Revenue. 9. In the result, the appeal of the Rev enue is dismissed . Sd/- Sd/- ( WAS EEM AHMED) (MAHAVIR PRASAD) ACC OUNTANT MEMB ER JUDICIAL MEMBER Ahmedabad: Dated 23/03/2022 True Copy S.K.SINHA ेश ! " #े" / Copy of Order Forwarded to:- &. र / Revenue 2. आ दक / Assessee ). सं*ं+, आयकर आय - / Concerned CIT 4. आयकर आय - - अपील / CIT (A) 0. 1 2 3ीय 4 4 +,5 आयकर अपील!य अ+,कर%5 अ67द * द / DR, ITAT, Ahmedabad 8. 3 9: ; ल / Guard file. By order/आद श स 5 उप/स6 यक पं ीक र आयकर अपील!य अ+,कर%5 अ67द * द । This Order pronounced in Open Court on 23/03/2022