Vedica Procon Pvt. Ltd(Rename Iscon City Centre Pvt. Ltd, Ahmedabad V. The ACIT, Central Circle-2(4), Ahmedabad

ITSSA 32/AHD/2020

AI Insights

The case involves multiple appeals by both the assessee, Vedica Procon Pvt. Ltd., and the Revenue against the orders of the Commissioner of Income-Tax (Appeals), Ahmedabad, related to the assessment orders passed under sections 143(3) and 153C of the Income Tax Act, 1961 for the assessment years 2014-15 to 2016-17. The primary issue was the addition of Rs. 159,80,51,206/- to the assessee's income, which was alleged to be unaccounted cash receipts from a real estate project named 'Iscon VIP'. The Tribunal examined the evidence, including seized documents and affidavits, and concluded that the additions made by the Assessing Officer were not substantiated by adequate evidence, leading to the allowance of the assessee's appeals and dismissal of the Revenue's appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135998 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 16-02-2020
• Other Referred Cases: Nishant Construction Pvt. Ltd vs. ACIT, C.B.I. vs. V.C. Shukla & Others, Common Cause vs. Union of India, Andaman Timber Industries vs. Commissioner of Central Excise Kolkata II, Dhakeswari Cotton Mills Ltd vs. Commissioner of Income-tax, Kulwant Rai vs. Commissioner of Income-tax, V.C. Shukla vs. Union of India, Seth Gurmukh Singh vs. CIT, CIT vs. Kulwant Rai
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISANJEEVKUMARDEV
• Assessee Lawyers: SHRIDHIRENSHAHWITH
• Keywords: Sale consideration of property below Jantri Value

Judgement Text

आयकरअपीलीयअधिकरण,अहमदाबादनायपीप INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’D’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRISIDDHARTHANAUTIYAL,JUDICIALMEMBER Sr. No. IT(SS)A/C.O. No. Asstt. Year NameofAppellant Nameof Respondent 1-3. IT(SS)ANos.32- 34/Ahd/2020 2014-15 To 2016-17 VedicaProconPvt.Ltd. (RenamedasM/s.Iscon CityCentrePvt.Ltd) (Thereafterrenamedas M/s.IsconCityCentre LLP) IsconHouse, Off.C.G.Road, Ahmedabad OldPAN:AAECV0994K NewPAN:AAGFI1767E A.C.I.T, Central Circle-2(4), Ahmedabad 4-9 IT(SS)ANos.40 to42/Ahd/2020 With C.O.Nos64to 66/Ahd/2020 2014-15 to 2016-17 A.C.I.T, CentralCircle-2(4), Ahmedabad VedicaProconPvt. Ltd. (Renamedas M/s.IsconCity CentrePvt.Ltd) (Thereafter renamedas M/s.IsconCity CentreLLP) IsconHouse, Off.C.G.Road, Ahmedabad OldPAN: AAECV0994K NewPAN: AAGFI1767E (Applicant)(Respondent) Assesseeby:ShriDhirenShahwith MsNupurShah,A.Rs Revenueby:ShriSanjeevKumarDev,CIT.D.R सुनवाईकीतारीख/DateofHearing:17/08/2023 घोषणाकीतारीख /DateofPronouncement:31/08/2023 2IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 आदेश/ORDER PERBENCH: TheaboveappealsandCo’shavebeenfiledbytheAssesseeandthe RevenueagainsttheordersoftheLd.CommissionerofIncome-Tax(Appeals), Ahmedabad,arisinginthematteroftheAssessmentOrderpassedu/s143(3)/ 153CoftheIncomeTaxAct1961(here-in-afterreferredtoas"theAct")relevant totheAssessmentYearsasmentionedinthecausetitle.Since,theissuesinvolved inalltheseappealsareidentical,weproceedtodisposeofalltheappealsbythis commonorderforthesakeofconvenienceandbrevity. First,wetakeupIT(SS)ANo.32/AHD/2020,anappealbytheassessee forAY2014-15. 2.Theassesseehasraisedthefollowinggroundsofappeal: 1.TheLd.CIT(A)erredinlawandonfactsinissuingdirectionthattheadditionofRs. 159,81,51,206/-(correctfigureRs.159,80,51,206/-)assessedastotalincomeforA.Y. 2014-15cannotbeupheldandtheadditionisdirectedtobedeletedwiththedirectionthat theamountreceivedincashcorrespondingtothoseunitswillbetreatedaspartofreceipts intheyearsinwhichtherespectiveunitsaretransferred. 2.TheLd.CIT(A)haserredinlawandonfactsinholdingthat"Asthediariesandpages 81to86ofAnnexureA-86havebeenheldtoberelatedwithVIPProjectandtheactual cashreceiptasperAnnexureA-86isonlyRs.37,14,80.775/-,onlythisamountthehasto betreatedasunexplainedmoneyinthehandsoftheappellantasperthelateprovisions ofsection69AoftheAct,Havingheldthat,thedecisionofthejurisdictionalvs.ITAT AhmedabadandthejurisdictionalHighCourtofGujarathavetobefollowedthatsuch amounthastobetreatedaspartofthereceiptandforthepurposeofincomeonlyinthe financialyearsinwhichrevenuerelatedtorespectiveproperty/unitsarerecognizedbythe assesseeaspertheAccountingStandard.AccordinglythesaidamountofRs. 37,14,80,775/-cannotbetreatedasreceipt/incomeoftheappellantduringA.Y.2014-15, A.Y.2015-16andA.Y.2016-17.Thesaidamounthastobetreatedaspartofreceipt/ incomeintheyearinwhichtherespectiveunits/propertyaretransferredbythe appellant". 3.TheLd.CIT(A)haserredinlawandonfactsinobservingthat"VIP"Projectinmy consideredopinionisnotafictitious/hypotheticalprojectandotherwisealsothereisno barastobookingandthecollectionofthebookingamountbeforeformallaunchingofa particularproject.Insuchbooking,thename(orlocation)ofunitsandtheareaofunits 3IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 arenotmaterialasanywaytheybecomefinalonlyatthetimeofhandingoverof;the possession, 4.TheLd.CIT(A)erredinlawandonfactsinnotconsideringthefactsthatthematerial foundandseizedfromthirdpartybeingindependentrealestatebrokersnamely(i)Shri RajuJethanandTekwaniand(ii)ShriDharmendraJethanandBhambhaniforwhichthe provisionsofsection132(4)r.w.s292CoftheActisnot applicableinthecaseoftheappellantcompany. 5.TheLd.CIT(A)erredinlawandonfactsbynottreatingthematerialfoundandseized fromthepremisesofthirdpartybrokersShriRajuJethanandTekwaniandShri DharmendraJethanandBhambhanibeingdumbdocumentinthecaseoftheappellant companyinabsenceofanycogentmaterialand/orindependentclinchingevidencesbeing broughtonrecordinrespectoftheallegedcashreceiptsofbookingbytheappellant companyinviewofthedecisionoftheHon'bleIncomeTaxAppellateTribunal, Ahmedabad"C"BenchinthecaseofNishantConstructionPvt.Ltdvs.AC1T, Circle5,Ahmedabad,ITANo.1502/Ahd/2015(A.Y.2011-12)dated14.02.2017, reportedin57CCH83(2019).TheappealfiledbyRevenueagainstaboveorder beforeHon'bleGujaratHighCourtisdismissedvideorderdated09/04/2018in TaxAppealNo.898of2017reportedat[2019]101taxmann.com179(Guj)and further,SLPfiledagainstdecisionofHighCourtwasdismissedreportedat[2019] 101taxmann.com180(SC). 6.TheLd.CIT(A)haserredinlawandonfactsinnotfollowingtheprinciples andratiolaiddownbytheHon'bleApexCourtinthecaseofC.B.I.Vs.V.C. SHUKLA&Othersreportedin3SupremeCourtcases410(1998)andCommon Cause(ARegisteredSociety)andOthersvs.UnionofIndiaandothers[2017] 77taxmann.com245(SC). Theappellantcompanyreservesitsrighttoadd,amend,alterormodifyanyofthe groundsstatedhereinaboveeitherbeforeoratthetimeofhearing. 3.TheinterconnectedissuesraisedbytheassesseeisthattheLd.CIT-A erredinconfirmingtheadditiontothetuneofRs.37,14,80,775/-outofthetotal additionofRs.190,57,72,201/-insteadofdeletingthesameinentiretyunder section69AoftheActwiththedirectiontotheAOtosustaintheadditionforthe amountreceivedincashintheyearinwhichrespectiveunitsaretransferred. 4.Theassesseeinthepresentcase,aprivatelimitedcompany,isengagedin thebusinessofdevelopmentaswellassaleofrealestatecommercialprojects underdifferentschemes.Theassesseehase-fileditsoriginalreturnofincome declaring‘NIL’incomeon29-11-2015videacknowledgmentNo. 895089081291115.Asearch&seizureoperationalongwithsurveyundersection 132and133AoftheActhasbeenconductedatthespecificpremises/certain companiesofM/sIsconGroupandhousesofthreeindividualsnamelyShriSanjay 4IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 Patel,RajuTekwaniandDharmendraBhambhanion25-02-2016whichwas concludedon19-04-2016.Theassesseethoughispartofthegroup,butitwas notsubjectedtosearchandseizureoperationundersection132oftheAct.The assesseeduringtherelevanttimecomprisesofthreedirectorsnamelyShriJayesh TKotak,JateenGupta,andAmitGupta.Theabovesaidtwoindividualsoutof threewhoweresubjecttosearch&seizureoperationnamelyShriRajuTekwani andDharmendraBhambhaniarebrokersandShriSanjayPatelisanaccountant, associatedwiththeIsconGroupandkeeprecordsoftheassesseecompanyas wellasothergroupcompanies. 4.1Asaresultofsearchandseizureoperation,therewereunearthedvarious seizedmaterialssuchasloosepapers,diaries,digitalevidencefromthepremises ofShriRajuTekwani,DharmendraBhambhaniandShriSanjayPatelwhichwere havingthedirectnexuswiththeassessee.Thedetailsofthedocuments/materials seizedduringthesearchandsurveyoperationattheplaceofthreeindividuals mentionedabovehadbeeninventoried.Thegistofthesameisrecordedonpages 3to6oftheassessmentorder. 5.TheAO,onperusaloftheseizeddocuments/materialsobservedthatthe assesseeisintheprocessofdevelopingarealestateprojectunderthename& styleofIsconVIP.ItwasalsofoundbytheAOthatShriSanjayPatel,Raju TekwaniandDharmendraBhambhaniareinvolvedinbooking/saleofshops/flats intheprojectnamelyIsconVIPtobedevelopedbytheassesseeand collects/handlingtheon-moneyforthebooking/saleofunitsonbehalfofthe assessee. 5.1TheAObasedonseizeddocuments/materialsfurtherobservedasdetailed under: A.TheassesseeunderthenameofIsconVIPprojectwasconstructing multistorycommercialbuildingcomprisingof4blocks(A,B,CandD)and therewere3floorsineachblock(Ground,FirstandSecond)whichwas locatedatNewClothMarket,Raipur,Ahmedabad. 5IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 B.Thecashtransactionsrelatingtothisunderconstructionprojectwere operatedandcontrolledbyShriDharmendraBhambhani,SanjayPateland GovindbhaiThakkarwhereasRajuTekwaniwasplayingtheroleofbooking offlats/shops. C.TheloosepapersbearingSr.Nos.71to87ofAnnexureA-86seizedfrom theresidentialpremisesofShriRajuTekwanicontainedthedetailsofthe unitssold,bookingamount,nameoftheclients,area,chequepaymentas P-1andcashpaymentasP-2. D. ShriRajuTekwanihasalsoacceptedinhisstatementrecordedu/s132(4) oftheActduringthesearchproceedingsthatthedocuments/materials seizedfromhisresidencearerelatedtotheVIPIsconProjecttobe developedbytheassesseecompany. E. Aspertheimpugnedseizeddocuments,therewerethetotalbookingof 140shopshavingareaof94,612squarefeetagainsttheconsiderationof Rs.190,57,72,201/-only.AsumofRs.37,14,80,775/-outofthetotalsale considerationwasrecordedincolumnP-2oftheseizeddocumentswhich impliesthattheelementofcashamountingtoRs.37,14,80,775/-was received. F.Similarly,theloosepapersbearingSr.No.110to116ofAnnexureA-24 seizedduringthesearchproceedingfromtheresidentialpremisesofShri DharmendraBhambhaniwerealsocontainingthesameasdetailsoffloor, block,area,nameofclientwhere158shopswerementionedwiththe paymentofRs.7.9croresincolumn‘before’meansalreadyreceived. G.Likewise,theloosepapersbearingSr.Nos.104and105ofAnnexureBS-1 seizedfromtheresidentialpremisesofShriSanjayPateldescribedthe detailsofpracticeoftakingon-moneyonbehalfoftheIsconGroup.Onthe sameseizeddocuments,thecashpaymentsofRs.76,00,000/-andRs. 37,50,000/-inthenameofShriYogeshPujara,apersonrelatedtoIscon Groupwerealsorecorded. G.Apdffilewithtitle“vip-disc-pdf”wasalsofoundfromthelaptopseized fromShriSanjayPatelwhichwasintheformatoftheaccountmaintained 6IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 inthetallysoftware.Thenameoftheaccountwasrecordedas“CashIscon Commercial-Raipur”andtheentrieswererecordedfrom01-01-2014to30- 06-2014depictingthepaymentofRs.5,96,57,400/-mostlytoShriRaju TekwaniandShriDharmenderaBhambhani. H.However,ShriSanjayPatelhasnotofferedanyexplanationeitherduring thesearchproceedingsorevenpostsearchproceedingtoo.Onthe contrary,thepresidentofthecompanynamelyShriVenkataramnaand directorofM/sJPIsconPrivateLimited(maincompanyofIsconGroup) hasfiledtheletteracceptingthatallthematerials/documentsseizedduring thesearchproceedingpertainstoM/sJPIsconPrivateLimitedandits Groupcompaniesandthesamewillbeusedduringtheassessment proceedingsofrespectivecompanies. I. Therewererecoveredmanycustomerdiariesduringsearchandseizure operationfromtheresidentialpremisesofShriRajuTekwaniandShri DharmenderaBhambhani,markedasAnnexureA-2,A-36,A-19,A-34,and A-86etc,whichwerewrittenincodedformandthedateswererecordedin someofthediariesof9yearsbacktodisguisetherelevantdateof transaction.Thesediarieswere.decodedandco-relatedwithother documentssuchasphoto/imagerecordedinthephoneofShriRaju TekwaniandhissonPawanTekwaniwhichevidencesthatthetransactions werecarriedoutintheyearunderconsiderationrelatingtoVIPIscon project. J.Withrespecttothecustomerdiariesasdiscussedabove,ShriDharmendra Bhambhaniacceptedthatthetransactionrecordedinthesaiddiariesare theactualtransactionsofreceiptsandpaymentsofcash.Healsosubmitted throughhisreplydated17-06-2016thatthediariesaretherecordsof bookingoftherelevantunitsbytheclients/customerintheVIPIscon project. K.ShriDharmendraBhambhanifurthersubmittedthattheIsconGroupwas notacceptingthepaymentbychequeasthelandwasindispute.Therefore, hecollectedthecashfromthebuyerafterprovidingthediariestothem. 7IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 Thecashcollectedwashandedovertotheemployees/representativesof theIsconGroupaftertakingtheirsignature. L.TherewasphonerecordsofShriPawanTekwanis/oRajuTekwani depictingthedetailsofcashamountinrespecttotheVIPIsconProject. 5.2Inviewoftheabove,theAObelievedtheunitsweremostlybookedbythe brokers/investors/customersbeforetheprojectcameintoexistence.Assuch,the assesseehasrelinquisheditsrightovertheunitsallocatedtothe brokers/customers/investorsafteracceptingthecashpaymentfromthem.Asper theAO,theassessee,thus,wassomewhereinvolvedinsaleofitsrightoverthe unitsandthesamehasbeencoveredunderthevirtualsaleswhichisdifferent fromactualsale. 5.3Asthedocuments/loosepaper/othermaterialswereseizedduringsearchin thecasesofShriSanjayPatel,RajuTekwaniandDharmendraBhambhaniwhich werehavingthebearingonthedeterminationoftotalincomeoftheassesseefor theyearunderconsideration,therefore,theAOissuedthenoticeu/s153Cofthe Actdated31-03-2018.Inresponsetothenoticetheassesseehasfileditsreturn ofIncomeon26-04-2018declaringlossofRs.37,129/-only.Basedontheabove seizeddocuments,theAOvidenoticedated06-12-2018soughtclarificationfrom theassessee. 5.4Theassesseeinresponsetosuchnoticevideletterdated11-12-2018 submittedthatintheyearunderconsideration,itwasinvolvedinacquiringa freeholdlandbelongingtoM/sOmexInvestorsLimited,throughthebidding process,admeasuring13895sq.meterssituatedattownplanningschemeNo.18, FPNo.32/P,bearingsurveyNo.25,27/b/a,31,38MojeRaipur,RaipurCloth Market,Ahmedabad.Thesaidlandwasauctionedbytheofficialliquidatorinthe directionoftheHon’bleGujaratHighCourtvideorderdated17-12-2013. 5.5Theassesseewasoneofthehighestbiddersforthesaidland.Assuch,the bidpricequotedbytheassesseewasRs.148Croreswhichwasthehighest bidding.Thereafter,thetransferprocessofthesaidlandwasinitiatedwiththe 8IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 instructionsforthepaymentofthesaidlandthroughletterissuedbytheofficial liquidatordated19-12-2013. 5.6However,forthepaymentoflastinstalmentofRs.106.50croresdueon 16-04-2014,theassesseefiledanapplicationbeforetheHon’bleGujaratHigh Courtrequestingtoextendthetimetopaytill31-07-2014andconsequentlythe Hon’bleGujaratHighCourthasallowedtheapplicationbyorderdated31-03-2014. 5.7Inthemeantime,anotherbiddernamelyM/sBalleshwarGreensPrivate Limited&othersraisedtheobjectionagainsttheHon’bleHighCourtorderdated 31-03-2014andofferedthebidpriceofRs.160Croresforthesaidlandwhich wassubsequentlydisposedofagainsttheassesseevideanorderdated17-04- 2014. 5.8Theassessee,thereafter,filedareviewapplicationbeforetheDivision BenchoftheHighCourtwhichwasdisposedofvideorderdated22-04-2014 partlyinitsfavouraftermakingsomeminormodificationintheorderofthe Hon’bleGujaratHighCourtdated17-04-2014. 6.Ontheotherhand,anotherbiddernamelyM/sBalleshwarGreensPrivate Limited&othersbeingaggrievedtothisrelieffiledwrittorecalltheorderofthe Hon’bleGujaratHighCourtdated17-12-2013andraisedtheobjectionagainstthe abovesaidorderwhichwassubsequentlyallowedinitsfavour(M/sBalleshwar GreensPrivateLimited&others)videanorderdated11-08-2014bytheHon’ble HighCourt. 7.TheassesseeaggrievedbytheorderofHon’bleGujaratHighCourtdated 11-08-2014,carriedthematterbeforethedivisionbenchofHon’bleHighcourt whereitfailsagainbytheorderoftheHon’bleCourtdated04-12-2014.The assesseethereforefiledanSLPbeforetheHon’bleSupremeCourtandfinallygot theabovesaidlandinitsfavourvideorderdated13-08-2015. 9IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 7.1Thus,itwascontendedbytheassesseethatitgotthepossessionoflandin pursuancetotheorderofHon’bleSupremeCourtandaconveyancedeedhas beenexecutedforthesaidlandon03-11-2015.Thereafter,theassessee immediatelyafterexecutionofconveyancedeedstartedtheproceduretodevelop commercialprojectonthesaidlandandaccordinglysubmittedthedevelopment planbeforetheAhmedabadMunicipalCorporationwhichwasapprovedon02-05- 2016andsubsequently,itreceivedthegrantofpermissionforthedevelopment videletterdated08-06-2016todevelopthecommercialprojectunderthename andstyleof“IsconCommercialCentre”. 7.2Theassessee,thus,inviewoftheabovesaidfacts,contendedthatthe possessionoflandwashandedovertoitaftertheF.Y.2013-14.Therefore,the questionofprojectlaunch,buildorexecuteanddeterminationofanyincomedoes notariseintheF.Y.2013-14relevanttotheA.Y.2014-15.Accordingly,theNo.of shops,area94,612squaremetersandtheamountofRs.190,57,72,201/-are irrelevantinthegivenfactsandcircumstances. 7.3TheassesseefurthersubmittedthatShriDharmendraBhambhaniandShri RajuTekwaniarenotemployeesofthecompanyastheyareindependentestate brokers.Therefore,theseizedmaterials/documentsgatheredfromtheirpremises cannotbeusedtodrawanyadverseinferenceagainsttheassessee.Furthermore, theprovisionsofsection132(4A)r.w.s.292CoftheActprovidesthepresumption thatthedocumentsfoundfromthepremisesofthesearchpartybelongstothem. Assuch,theimpugnedseizeddocumentswerenotrecoveredfromthepremises oftheassessee. 7.4Overandabove,ShriDharmendraBhambhaniandShriRajuTekwanihave alsofiledanapplicationbeforetheHon’bleSettlementCommissionalongwiththe explanationwhichwasadmittedbytheHon’bleSettlementCommissionu/s 245D(1)oftheIncomeTaxAct.TheHon’bleSettlementCommissionfurthercalled thereportfromthePr.Commissionerundersection245D(2C)oftheActdated29- 10IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 01-2018whoin-turnhassubmittedthereportunderRule-9oftheIncomeTax Rulesalongwithseizedmaterialsanddocumentsfoundduringthesearch. 7.5Theassesseeincontinuationofearliersubmissionalsosubmitsthatithad startedpreparatoryworkandreceivedtheadvanceamountofRs.3,67,50,601/- onlyfrompre-launchingbookingfromitsprospectivemembersoftheproposed commercialprojectaftertheorderoftheHon’bleSCdated13-08-2015i.e.F.Y. 2015-16correspondingtotheA.Y.2016-17.Thesaidpaymenthasalsobeen reflectedinthebooksofaccountunderthehead“OtherCurrentLiabilities”. 7.6Inadditiontotheabove,theassesseealsocontendedthatnothingwas foundduringthesearchproceedingsattheotherpremisesoftheIsconGroup, indicatingthatithasreceivedanybookingortokenamountbeforeOctober2015. 7.7Furthermore,noneofthedirectoroftheassesseecompanywasconfronted duringthesearchproceedingwiththeseizedmaterialsgatheredfromthe premisesofShriDharmendraBhambhaniandShriRajuTekwaniaswellasduring thepostsearchproceedingtoo.Inotherwords,thedirectorsofthecompany werenotconfrontedwiththeseizedmaterials/documents. 7.8Theassesseefurthersubmittedthatithadstartedthedevelopmentof projectfromJune2016(i.e.afteracquiringthelandandobtainingthepermission fordevelopmentfromAhmedabadMunicipalCorporation).Therefore,the calculation/determinationofanyincomeinrespecttothesaidcommercialscheme intheyearunderconsiderationisoutoftheboxofLaw,AccountingStandards andAccountingPrinciplesaswellasvariousjudicialpronouncements. 7.9Theassesseealsosubmittedthattheallegationfortransactionsofsaleof Rs.190,57,72,201/-isbasedontheappraisalreportcommunicatedbythesearch inchargeofficeroftheInvestigationDepartmenttotheAO.Assuch,thereport preparedbytheSearchinchargeofficerisaunilateralactandmeantforinternal correspondenceasthereportdoesnottalksaboutthecorrectfactsofthecase.As 11IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 such,theappraisalreporthasnolegalsanctityundertheprovisionsoftheIncome TaxAct.TheAOisrequiredtobringoutonrecordsufficientmaterials/evidenceto makeproposedadditionintheassessmentofsearchcases.Theassesseethusin viewoftheaboverequestedtheAOtodroptheallegationforthealleged transactionsofsaleofRs.190,57,72,201/-only. 7.10However,theAOrejectedallthecontentionsoftheassesseebyobserving thefollowingfactsgatheredduringtheassessmentproceedings: a.TheVIPProjectwasnotthenotionalproject.Itwastheactualprojectas invitationcardforformallaunchoftheprojectdated12-12-2015wasfound fromthewhatts-appchatofShriRajuTekwaniandShriDharmendra Bhambhani.TheJPIsconGroupalsopostedthedetailsabouttheproject onitswebsiteon12-09-2016andavideowasuploadedonyou-tube relatingtotheprojecton08-01-2016. b.ThecontentionofShriRajuTekwanithatthepaymentswerereturnedto thecustomers,neitherknownfromtheseizeddocumentsduringthecourse ofsearchnortheassesseehassubmittedanythinginsupportofthesaid contention. c.TheIsconVIPProjectwasoneofthecurrentcommercialprojectsofJP IsconGroup.Thesaidcommercialprojecthavelargeno.ofshops.Asit wasthepracticeofthegroupcompanytochargetheon-moneyincash, thegroupcompanywasacceptingtheconsiderationonsale/bookingof shopsintwoformsoneinchequeandanotherincashmarkedaspayment- 2whichhadremainedunaccounted. d.Evidence/loosepapersseizedduringsearchfromthepremisesofShri DharmendraBhambhani,ShriRajuTekwaniandShriSanjayPatelwere havingthedirectnexuswiththeIsconGroup. e.Someofthecustomerdiarieswererecordedinbackdatingof9years(i.e. 2005and2006)whilst,thecompanywasincorporatedon22-11-2010and theauctionofthelandwasdoneintheyear2013.Therefore,the transactionsrecordedindiarieswererelatedtoVIPIsconProjectwouldbe afterthedateofauctiononly. 12IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 f.Thecustomerdiarieswereevidencingthedetailsaboutthecashreceipt anddetailsoftheshopwhichwererecordedwithrespecttotheVIPIscon Projectonly. g.HandwrittenpocketdiariesofShriRajuTekwani,PhoneofShriPawan Tekwanis/oRajuTekwaniwereclearlyshowingtherecordofthecash paymentsandreceiptswithrespecttotheunitsoftheVIPIsconProject. Pageno.130ofloosepaperofAnnexureA-23ofhandwrittenbook evidencingtherecordsofpaymentsreceivedagainst6shopswhichwere bookedforRs.3,83,24,000/-outofwhich1.91croreswerereceived throughbankingchannelandrestofRs.1.49croreswerereceivedincash. Theaforesaidrecordwasnotedinahandwrittenbookon16-12-2015. h.Similarly,pageNo.54ofAnnexureA-86wasfound,explainingthe computationofbrokeragewithrespecttothesaleofthreeshopsofIscon VIPandpageNo.30ofAnnexureA-86describingthepaymentmadeby thebuyernamelyShriKamalTolaniagainsttheshopNo.A-23from DharmendraBhambhaniandRajuTekwaniinIsconVIPproject. i.Furthermore,transactionsrelatingtoshopNo.A-405,B-401,402,403,and C-208,216,217wererecordedintheloosepapersfoundfromthe premisesofShriRajuTekwani.Exactly,thesamepapers,recordingthe transactionintheloosepaperswerealsofoundfromthepremisesofShri DharmenderaBhambhani.Likewise,thepdffile,seizedfromthelaptopof ShriSanjayPatel,wasalsocontainingthedetailsofsameshopnumbers whichwerebrokeredbyShriRajuTekwaniandDharmendraBhambhani. j.ThePDFfilefoundfromtheseizedlaptopofShriSanjayPatelwasthe print-outoftallyfile“zyx”andsimilarfilewasalsofoundandseizedduring searchinthepremisesofShriKalindiShahSeniorMarketingManagerof M/sJPIsconLtd. k.ShriJateenGupta,oneofthedirectorsoftheassesseecompany,also statedthattheZyxfileswererecordingthetransactionsofbookingand cashreceivedthereon.ThetransactionsrecordedinZyxfileswereexactly matchingwithtransactionsrecordedintheExcelSheetnamely“Platinum- Final-BookingChart-28-03-2015(Version1)” 13IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 l.ShriRajuTekwaniandDharmendraBhambhanihavealsoacceptedthe cashtransactionswithrespecttotheVIPIsconProjectduringthe statementrecordedu/s132(4)oftheIncomeTaxAct. m.ThetransactionsrelatingtothereceiptofcashwithrespecttoVIPIscon ProjectwererecordedinthehandwrittenbookofShriDhramendra Bhambhaniupto3to4daysbeforethedateofsearchwhichimpliesthat thediarywasusedforthebusinesstransactionsoftheassesseewhichwas notdisclosed. 7.11TheAObasedontheabove,notedthattotalcashreceived/receivable againstbooking/saleofshops/flatsinthreeyearswasofRs.190,57,72,201/- whereastheassesseehasreceivedthesumofRs.159,80,51,206/-duringthe year.TheAO,therefore,inviewoftheabovesaiddiscussionaddedthesumofRs. Rs.159,80,51,206/-tothetotalincomeoftheassesseeu/s68oftheIncomeTax Act. 8.BeingaggrievedbytheorderoftheAO,theassesseefiledanappealbefore theLd.CIT-A.TheassesseebeforetheLd.CIT-Areiteratedthesubmissionas madebeforetheAOandfurthersubmittedasdetailedunder: a-Thatthesearchandsurveyproceedingswerenotconductedatthe premisesoftheassesseecompany.Thesurveyproceedingswerealsonot carriedoutonthelandforanycommercialschemewheretheprojectwas tobedeveloped. b-ThesearchproceedingswerecarriedoutattheofficepremisesofJPIscon PrivateLimitedandresidentialpremisesofdirectorsoftheassessee companyordirectorsoftheJPIsconPrivateLimitedaswellasMs.Kalindi Shahakeypersonofmarketingandbookingofrealestateprojectbuiltand developedbytheIscongroup,buttherehadnotbeenseizedorfoundany incriminatingdocumentsevidencingthattheprojectwasexistinginthe year2014and2015. c-TheAOwasonlyrelyingonthedocumentsseizedfromthepossessionof ShriDharmendraBhambhaniandShriRajuTekwani.However,thesaid seizeddocumentswerenotconfrontedtothepresident,directors,andkey 14IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 personsoftheIsconGroup.Duringthesearchproceedingsvizavizpost searchproceedings,theinvestigationdepartmentdidnotcarryoutany crossenquiryfromtheappellantcompany.TheAOfurtherdidnotbringon recordanycogentmaterialaftermakingnecessaryenquiriesfromthe clientswhosenameswerefoundintheexcelsheet.Thus,itisevidentthat theydidnotmakeanyallegedcashpaymenttothebrokersortothe assesseecompanythroughthebrokers. d-TheAOdidnotprovidetheopportunityofcrossexaminationtothe assesseecompanyanditsdirectorsofthestatementrecordedu/s132(4) and131oftheActofboththebrokers.Thus,theimpugnedstatements wererecordedbehindthebackoftheassesseeandnocredencecanbe giventosuchdocuments.Likewise,theseizeddocumentsgatheredfrom thepremisesofShriDharmendraBhambhaniandShriRajuTekwaniwere notsuppliedtotheassesseeforitsrebuttal. e-Theexcelsheetseizedandfoundfromthepossessionofbothbrokers duringsearchwasaXeroxcopyandthesamedidnotseemtobebelonging totheassesseecompanyinanymannerastherewasnosignatureofany directors/employees/salesexecutivesoftheassesseecompany. f-TheAObasedonthatexcelsheetfoundinthecomputer,preparedadata sheetspecifyingUnitNo.,Sq.Ft.andbookingrateofeachfloor,forthe periodJantoMarch2014andatthelastpagerecordedthat“Inthetable above,itisrecordedthat140shopshavingareaof94612sq.ft.arebookedfora considerationofRs.190,57,72,201/-outofthisamount,intheformofmoney.TotalofP1 isNil.”Inthisregard,theassesseesubmittedthatthelandwasacquiredon 03-11-2015andtheplanforcommercialprojectwassubmittedbeforethe AhmedabadMunicipalCorporationfor421shopshavingdifferentarea whichwasdifferentfromdatapreparedbytheAO. g-WithrespecttoPDFfilewiththetitle“vip-disc-pdf”foundfromtheseized laptopofShriSanjayPatel,itwastobenotedthatthesaidPDFfilewas alsoneverconfrontedtodirectorsoftheassesseeorIsconGroupduring searchproceedingsandpostsearchproceedingtoo.ThesaidPDFfilewas alsonotconfrontedtoShriSanjayPatelduringtheassessmentproceeding 15IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 u/s153AoftheActframedonhim.ThesaidPDFfilewasfirsttimeplaced beforetheHon’bleSettlementCommissionwiththereportofPr.CIT CentralAhmedabadsubmittedunderrule9oftheIncomeTaxRules. Thereafter,arebuttalrejoinderwassubmittedbybothbrokers,Shri DharmendraBhambhaniandRajuTekwanialongwithsworn-inaffidavitof ShriSanjayPateldated23-06-2018whereShriSanjayPateldisclosesthat thesignatureofhimandemployeesoftheIsconGroupwereusedonthe diariestosatisfytheprospectivecustomersandtocollectthecashby brokersforahypotheticalproject.Alltheseactivitieswerecarriedout withouttheknowledgeofthedirectorsoftheassesseeandassessee company. h-Assuch,thewordvirtualsalehasnotbeendefinedundertheAct,whereas thewordvirtualisnormallydefinedassomethingisthere,butnotinfact, actualform,orname.Similarly,thesaleisalsonotdefinedunderthe IncomeTaxAct,howeverthewordsaleasperBlack’sLawDictionary definesasunder: “Salen.(bef.12c)1.Thetransferorofpropertyoftitleforaprice.SeeUCC2- 106(1).2.Theagreementbywhichsuchatransfertakesplace.Thefourelements are(1)partiescompetenttocontract,(2)mutualassent,(3)athingcapableof beingtransferred,and(4)apriceinmoneypaidorpromised” Whereasthelandwasacquiredintheyear2015andtheprojectwas launchedintheyear2016,therefore,thequestionofbooking/saleofshops intheF.Y.2013-14doesnotariseasitisnotcoveredundersale. i-Thedocuments/loosepapers/digitalevidenceseizedduringthecourseof searcharedumbdocumentsasitisnotconnectedwiththeassessee companyandthesaiddocumentswerenotseizedfromthepremisesofthe assesseecompanyoritsdirectorsorkeypersons. 9.Theassessee,thereforeinviewoftheabove,opinedthattheincomeofRs. 159,80,51,206/-whichisanotionalincomeandallegedtobereceivedagainsta non-existentprojectcannotbeaddedtothetotalincomeofit. 16IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 9.1ItwasalsopointedoutbytheassesseethattheAOwasprovidedan opportunitytomakehissubmissionduringtheappealproceeding.However,the AOhasreiteratedhisobservationandsubmitsthatthecaseoftheassesseehas beencoveredu/s153CoftheIncomeTaxActandmerelythepremisesofthe assesseewasnotsearched/surveyeddoesnotmeanthattheseizeddocuments werenotinthepossessionoftheassessee.TheAOfurthersubmittedthatthe materialsseizedduringthecourseofsearchareevidencingthatthebookingsof theVIPIsconprojectwasstartedasearlyasthesalewasconfirmedbythe Hon’bleGujaratHighCourtinfavouroftheassesseedated17-12-2013i.e.F.Y. 2013-14. 10.However,theLd.CIT-Aafterconsideringtheassessmentorderandthe submissionoftheassesseeobservedcertainfactsasdetailedunder: IssuesgoingagainsttheAssessee; a-Theassesseeatthetimeofacquiringthelandthroughabiddingprocess wasnotpartoftheIscongroup.Assuch,theIsconGrouplater-onhad acquiredM/sVedicaProconPrivateLimited. b-ThestatementsrecordedduringsearchinthecaseofShriDharmendra BhambhaniandRajuTekwaniwerenotverymuchclearthatthebooking amountcollectedbythemwasforprojecttobedevelopedbytheassessee orforadifferentprojectwhichmaybeaVIPas“VedicaIndustrialPark”a differentprojectfrom“IsconCommercialCentre”. c-ThecontentionsoftheassesseethattheVIPprojectisa fictitious/hypotheticalprojectwasnotfactuallycorrectastheassessee couldmakeaplan/designforaprojectandcollectthebookingamount beforelaunchingtheprojectformerly. d-TheappellantassuchuploadedtheformalinvitationforlaunchoftheVIP projectonitswebsite. e-IfthebrokersShriDharmenderaBhambhaniandRajuTekwaniwere collectingthebookingamountfortheVIPIsconProjectwiththesignature ofoneoftheemployeesoftheassesseecompanynamelyShriSanjayPatel 17IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 withouttheknowledgeoftheassesseecompany,assubmittedinaffidavit beforeHon’bleSettlementCommissionthenitbecomesthecaseof misrepresentation/impersonationandassesseewasneededtofileanFIR whichwasnotdonebytheassesseecompany. f-Accordingtotheassesseecompany,thebrokerschosetogobeforethe Hon’bleITSC.However,itdidnotbringanythingonrecordthattheamount ofRs.10,00,00,000/-appearingintheseizeddiariesandamountofRs. 37,14,80,775/-appearingintheseizedloosepaperwereofferedfortaxor consideredtowardsincomputationofincomebytheso-calledbrokers. g-WithrespecttothePDFfile,theamountofRs.5.96crores,mostlypaidto thebrokers,wasdisputedbeforetheITSConthegroundthattheproject wasahypotheticalproject. h-Theassesseealsodidnotbringanythingonrecordabouttheentries recordedinPDFfilewhichwasprintoutoftallyfile“Zyx”thatthesewere notrelatingtotheVIPProject. IssuesgoingagainsttheRevenue; i-Thestatementsrecordedduringthesearchproceedingsandpostsearch proceedingsdidnotclearlyindicatewhetherVIPprojectrelatestoassessee company. ii-Theincriminatingdocumentsseizedduringthecoursesofsearchfromthe premisesofShriDharmendraBhambhani,RajuTekwaniandSanjayPatel werenotconfrontedbythedirectorsandkeypersonsoftheassessee company. iii-TheAOhasnotmadeanyenquiryaboutthepeoplewhosenameappeared intheloosepaperforbookingtheshopsduetowhichproposedaddition wasmade.Assuch,theprovisionofsection132(4)wouldbeprimarily applicabletobrokersandnottheassesseecompany. iv-Thepersonsbookingtheunitsintheproject“IsconCommercialCentre” launchedaftergrantingthedevelopmentpermissionwerenotthesame 18IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 personswhosenamewereappearinginthediariesandloosepapersseized duringsearchexceptthreenameswhichwerecommoninthetwolists. v-Theprovisionofsection68shouldnotbeinvokedtotheassesseecompany astheevidencegatheredwerenotpartofthebooksofaccountswhilstthe provisionofsection69Awouldbeapplyastheamountscollectedbythe brokerswereunexplainedmoneyandunaccountedmoney. vi-TheAOhasnotrecordedanyfindingsforRs.10,00,00,000/-mentionedin thediariesseizedduringthecoursesofsearchwhythesamewasnot addedtothetotalincomeoftheassesseeneithergavehisopinionasto whetherthenameofthepersonsappearinginthediarieswerethesameas recordedinloosepapersbearingSr.No.81to86ofAnnexureA-86having recordsof140shopsvaluingRs.190,57,72,201/-outofwhichRs. 37,14,80,775/-wererecordedascashreceived. vii-TheAOhasnotedthattheassesseehasreceivedcashpaymentonlyRs. 37,14,80,775/-outofRs.190,57,72,201/-thereforehecannottreatwhole amountofRs.190,57,72,201/-asundisclosed/unaccountedincomeofthe assessee. viii-TheAOalsodidnotconsidertheAccountingStandard-9,applicabletothe assesseecompanyandnotconsideredvariousjudicialpronouncements whereitwasdecidedthattheincomewouldberecognizedintheyearin whichthetitle/ownershipoftherespectiveunits/propertiesaretransferred. 11.TheLd.CIT-A,thus,inviewoftheabovewasoftheopinionthatthe contentionoftheassesseethatthebrokerswerenotworkingwithit,nobookings weremadewithrespecttothecommercialprojectatRaipurAhmedabad,hadnot receivedanymoneyfromthebrokerswasnotacceptableasassesseewasa successfulbidderofthelandandpossesstherightoverthelandfromDec,2013. TheVIPprojectthereforewastherealprojectandthebrokershadstartedthe bookingsofthesaidprojectthroughdiary(asthediarysystemforbookingofreal estateandaccountingtheretoareprevailinginGujarat)eitheronitsownaccount oronthebehalfoftheassessee. 19IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 11.1Theassesseehasalsonotcontrovertedwithrespecttotheamount recordedinthePDFfilewhichwasmostlypaidtoShriDharmendraBhambhani andRajuTekwaniwhetheritwaspaidforVIPprojectoranyotherproject. 11.2TheLd.CIT-AfurtherwasoftheviewthattheamountrecordedofRs. 37,14,80,775/-incolumnP-2ofloosepaperatSr.No.81to86ofAnnexureA-86 wastheactualcashreceiptandthesameshouldbetreatedasunexplainedmoney u/s69AoftheIncomeTaxActinthehandsoftheassessee. 11.3TheLd.CIT-A,thusfollowingthedecisionofHon’bleHighCourtofGujarat inthecaseofCommissionerofIncomeTax-IVvs.ShivalikBuildwell(P)Ltd. reportedin40taxmann.com219,treatedthesumofRs.37,14,80,775/-aspartof thereceiptsoftheassesseeforthefinancialyear/yearsinwhichtheassesseehas recognizedtherevenueinaccordancewiththeAccountingStandardandaddition madebytheAOofRs.159,81,51,206/-duringtheassessmentwasdirectedtobe deleted.Thustheld.CIT-Aallowedtheappealoftheassesseeinpart. 12.Beingaggrievedbytheorderoftheld.CIT-A,theassesseeandthe Revenueareinappealbeforeus.TheassesseehasalsofiledtheCOinadditionto theappealbeforeus.ThegroundsofappealfiledbytheRevenueinIT(SS)ANo. 40/AHD/2020fortheAY2014-15areasunder: 1.Onthefactsandinthecircumstancesofthecaseandinlaw,theLd.CIT(A)has erredindeletingtheadditionofRs.1,59,80,51,206/-madebytheAssessingOfficeru/s.68 oftheActonaccountofbookingofshopsandreceivingcashinProjectIsconVIPRaipur withthedirectionthattheamountreceivedincashcorrespondingtothoseunitswillbe treatedaspartofreceiptsintheyearsinwhichtherespectiveunitsaretransferred. 2.Onthefactsandinthecircumstancesofthecaseinlaw,theLd.CIT(A)oughtto haveupheldtheorderoftheAO. 3.Itis,therefore,prayedthattheorderoftheLd.CIT(A)besetasideandthatofthe AOberestoredtotheaboveextent. 13.Likewise,theobjectionsraisedbytheassesseeintheCObearingNo. 64/AHD/2020fortheAY2014-15readsasunder: TheLd.CIT(A)haserredinlawandonfactsingivingthedirectiontotheAssessingthat theamountreceivedincashcorrespondingtothoseunitswillbetreatedaspartreceiptsin theyearsinwhichtherespectiveunitsaretransferredwhiledeletingtheadditionofRs. 20IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 159,80,51,206/-madebytheAssessingOfficeru/s.68oftheActonaccountofbookingof shopsandreceivingcashinProjectIsconVIPatRaipur.Onfactsandcircumstancesofthe case,theLd.CIT(A)oughttohavedeletedtheadditionofRs.159,80,51,206/-without givingsuchdirectionasaforesaidtotheAssessingOfficer. 2.TheRespondentcravesrighttoadd,amend,alter,modify,substitute,deleteormodify alloranyoftheabovegroundsofcrossobjection. 14.Theld.ARbeforeusfiledtwosetsofpaperbooks.Thefirstsetofpaperis runningfrompages1to388fortheAY2014-15andthe2 nd setofpaperbookis runningfrompages1to443pertainingtotheAYs2014-15to2016-17.Theld.AR alsofiledWSdated5-7-2023and28-08-2023inresponsetothequeriesraisedby theBench.Theld.ARcontendedthatthedocumentsfoundfromthepremisesof the3 rd partyduringthesearchcarriedoutundersection132oftheActhaveno nexuswiththeprojectoftheassesseecompany.Theassesseehasundertaken theprojectof421shopswhereasaccordingtotheseloosepapersthenumberof shopswasrecorded140/158.Likewise,thenamesofthepartiesrecordedinthe seizeddocumentsdidnotmatchtheactualsaletransactionsshownbythe assesseeinthebooksofaccounts. 14.1Theseizeddocumentspertaintothefinancialyear2013-14corresponding toassessmentyear2014-15whereastheassesseehasacquiredthelandafterthe verdictoftheHon’bleSupremeCourtdated13 th August2015inthefinancialyear 2015-16correspondingtoassessmentyear2016-17.Furthermore,thelandin questionwasindisputeinearlieryearsandthereforetherewasnopossibilityof theassesseehavingreceivedanyamountfromtheprospective buyer/investor/brokeragainsttheproject.Similarly,theprojectoftheassessee wasapprovedbytheAMCvideorderdated02 nd May,2016andgrantthe permissiondated08 th June,2016forthedevelopmentoftheproject. 14.2TheassesseehasneverlaunchedanyprojectwiththenameVIPIscon.As such,thenameoftheprojectwas“IsconCommercialCentre”.Theexcelsheet foundfromthepremisesofthe3 rd partiesdoesnotcontainthenameofthe assessee. 21IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 14.3TheLd.ARalsocontendedthattheopportunityofcrossverificationwas notaffordedbytherevenueofthepartiesnamelythebrokersShriRajuTekwani andShriDharmendraBhambhanionwhosestatementstheadditionsweremade. Similarly,theseizedmaterialsreliedonbytheRevenueformakingtheadditionin thehandsoftheassesseehavenotbeensuppliedfortherebuttaltotheassessee. 14.4Thedocumentsfoundduringthesearchwereloosepapersanddiariesbut withoutanycorroborativeevidenceinsupportofsuchseizeddocuments. Therefore,noadditionmerelybasedonthestatementcanbemadeinthehands oftheassessee. 15.Ontheotherhand,theLd.DRsubmittedthatthebrokersasdiscussed abovewereinvolvedincollecting“onmoney”onbehalfoftheassesseefromthe prospectivebuyers.Thisfactwasalsoadmittedbytheaccountantoftheassessee whowasalsohandlingtheothergroupmatters.Thus,thestatementfurnishedby theaccountantcannotbebrushedaside. 16.BothTheLd.ARandDRvehementlysupportedtheorderoftheauthorities belowasfavourabletothem. 17.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecordincludingthejudgmentscitedbyboththeparties. Fromtheprecedingdiscussion,wefindthattherewasasearchandseizure operationattheIsconGroup,theemployeesofthegroupandcertainbrokersof thegroup.Theassessee,thoughbelongingtotheIsconGroupbutitwasnot subjecttothesearchandseizureoperation.Fromthepremisesofthe3 rd parties namelythebrokersShriRajuTekwaniandShriDharmendraBhambhaniandthe employee,ShriSanjayPateloftheIscongroup,variousdocuments,diaries, newspapersloosepapers,digitaldocumentswereunearthedcontainingthe financialtransactionsalongwithunitssold,bookingamount,nameoftheclients, area,chequepaymentasP-1andcashpaymentasP-2relatingtotheproject namelyVIPIscon.Basedontheseizeddocuments,theinferencewasdrawnby 22IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 theRevenuethattheassesseewascomingupwiththecommercialrealestate projectunderthenameandstyleofVIPIsconProject.Thus,thefinancial transactionsrecordedintheloosepapers/diarieswererelatedtosuchaproject. Basedonthesefinancialtransactions,theAOdeterminedtheamountofRs. 190,57,72,201/-bytreatingthesameasrepresentingonmoneyreceived/tobe receivedfromthecustomers/investors/brokersagainstrelinquishmentofrightfor certainunitstobesoldoftheproject.TheimpugnedamountofRs. 190,57,72,201/-wasdividedinthreeyearsasdetailedbelow: YearsAmount A.Y.2014-15Rs.159,80,51,206/- A.Y.2015-16Rs.1,96,21,858/- A.Y.2016-17Rs.28,80,99,138/- 17.1Accordingly,theAOheldthatthesefinancialtransactionswereoutsidethe booksofaccountsandmadetheadditionforthesameintherespective assessmentyears. 17.2However,thelearnedCIT-Afoundthattheactualamountofcashreceipt wasrecordedintheseizeddocumentsisofRs.37,14,80,775/-whichaloneshould bemadesubjecttotaxinthefinancialyearsinwhichtherevenueisrecognizedin accordancewiththeaccountingstandardissuedbytheICAI. 17.3Nowthecontroversyariseswhethertheassesseewasengagedinthe activityofreceivingthebookingamountincashfromthecustomerswhichwere notrecordedinthebooksofaccounts.Admittedly,theassesseewasthe successfulbidderinthebiddingprocesswhichwas1 st timemadeinthemonthof December2013butthesamewassubjectmatterofdisputeforoneortheother reasonswhichhasbeenelaboratedintheprecedingparagraph.Thematterwas carrieduptotheHon’bleApexCourtwhichsettledthedisputeinfavourofthe assesseevideorderdated13 th August2015.Finally,thelandwasallottedtothe assesseedated03 rd November2015andthereaftertheassesseegottheapproval fortheconstructionoftheimpugnedprojectvideletterdated8 th June2016from theofficeoftheAhmedabadMunicipalCorporation.Thisfactisnotdisputed.Thus, 23IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 itapparentlyappearsthatthelandinquestionwasindisputeandthereforeno prudentperson/investor/businessman/prospectivebuyerwillmakeany investmentinsuchdisputedprojecttilltheendofthedispute. 17.4Atthisjuncture,itisalsoimportanttonotethatwhenthelandwas originallyallottedtotheassessee,beingM/sVedicaProconprivateLtd,itwasnot apartoftheIsconGroup.ThefindingtothiseffectwasgivenbytheLd.CIT-A whichisundisputed.ForreadyreferencethefindingoftheLd.CIT-Aisextracted below: Theappellantbecamethesuccessfulbidderintheauctionofthatproperty(land) andmadepartpaymenttowardstheamountneededinJanuary2014.Atthattimeof auctionandmergingasthesuccessfulbidder,thenameoftheappellantcompanywas VedicaProconPvt.Ltd.whichwasnotpartoftheIsconGroupofconcernsthenanditwas onlylaterthattheIsconGroupcametoacquireM/s.VedicaProconPvtLtd.andgothrough thelitigationrelatedtothesaidlandasnarratedbefore. 17.5Fromtheabovefindingitisinferredthattheimpugnedprojectcameunder thecontroloftheassesseeonalaterdatei.e.whenthecompanynamelyM/s VedicaProconprivateLtdwasacquiredbytheassessee.However,inthisregard nospecificdatehasbeenmentionedbytheauthoritiesbelowintheirrespective orderssuggestingthedatewhentheassesseeacquiredthecompanynamelyM/s VedicaProconprivateLtd.Thus,insuchasituationhowisitpossibleforthe companytohavereceivedthecashwithoutrecordingthesameinthebooksof accountsintheyearunderconsideration.Aconjointreadingoftheabovefacts revealsthattherewasnomoneyreceivedbytheassesseeincashintheyear underconsideration. 17.6Thebrokers,namelyShriDharmendraBhambhaniandShriRajuTekwani werenottheemployeesoftheassesseecompany.Assuch,thesebrokerswere carryingouttradinginlandactivityintheirindividualcapacity.Thus,thedetailsof thetransactionsfoundfromtheirrespectivepremiseshavetobeexplainedby them.Theprovisionsofsection132(4A)oftheActpresumethatthedocuments foundonthepremisesofthesearchpartiesbelongtothem.However,these respectivepartiesinthestatementrecordedundersection132(4A)oftheAct havecategoricallystatedthattheyhavereceivedtheon-moneyinrelationtothe 24IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 IsconVIPproject.However,wenotethattheopportunityofcross-examination hasnotbeenaffordedtotheassessee,whichwasaviolationoftheprincipleof naturaljustice.Theassesseeduringtheappellateproceedingscontendedthatthe opportunityofcrossexaminationofthebrokersandtheotherpartieswasnot providedwhichcanbefoundoutfromtheorderoftheLd.CIT-A.Therelevant extractofthesubmissionoftheassesseereadsasunder: 4.14TheappellantcompanyhastosubmitthattheLd.AOhasrelieduponthe statementsofbothbrokersrecordedu/s132(4}oftheActand/oru/s.131oftheActin theircaseswhichwererecordedbehindthebackoftheappellantcompanyandits directorsandtherefore,withoutthesaidstatementsofbothbrokersbeingtestedbycross examinationthesameshallbeagainsttheprincipleofnaturaljusticeandtheLd.AOought tohavegrantedtheopportunityofcrossexaminationtotheappellantcompanyandtoits directorsofsaidtwobrokersabouttheirsocalledstatementandoftheseizedmaterial foundintheircases.TherelianceplacedbytheLd.AOonthestatementofbothbrokers wheretheyhavemadeadmissionformakinganallegation,noadditioncanbemadein thecaseoftheappellantcompany 17.7TheHon’bleSupremeCourtinthecaseofAndamanTimberIndustriesvs. CommissionerofCentralExciseKolkataIIreportedin62taxmann.com3has categoricallyheldthatopportunityofcross-examinationisoneoftheprerequisite principalsofnaturaljusticeandequitybeforemakingtheadditioninthehandsof theassessee.Therelevantextractofthejudgmentisreproducedasunder: “Notallowingtheassesseetocross-examinethewitnessesbythe AdjudicatingAuthoritythoughthestatementsofthosewitnesseswere madethebasisoftheimpugnedorderisaseriousflawwhichmakesthe ordernullityinasmuchasitamountedtoviolationofprinciplesof naturaljusticebecauseofwhichtheassesseewasadverselyaffected.It istobeborneinmindthattheorderoftheCommissionerwasbased uponthestatementsgivenbytheaforesaidtwowitnesses.Evenwhen theassesseedisputedthecorrectnessofthestatementsandwantedto cross-examine,theAdjudicatingAuthoritydidnotgrantthisopportunity totheassessee.Itwouldbepertinenttonotethatintheimpugnedorder passedbytheAdjudicatingAuthorityhehasspecificallymentionedthat suchanopportunitywassoughtbytheassessee.However,nosuch opportunitywasgrantedandtheaforesaidpleaisnotevendealtwithby theAdjudicatingAuthority. AsfarastheTribunalisconcerned,therejectionofthispleaistotally untenable.TheTribunalhassimplystatedthatcross-examinationofthe saiddealerscouldnothavebroughtoutanymaterialwhichwouldnot beinpossessionoftheassesseethemselvestoexplainastowhytheirex- factorypricesremainstatic.ItwasnotfortheTribunaltohave guessworkastoforwhatpurposestheassesseewantedtocross- examinethosedealersandwhatextractiontheassesseewantedfrom them.[Para6]Asmentionedabove,theassesseehadcontestedthe 25IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 truthfulnessofthestatementsofthesetwowitnessesandwantedto discredittheirtestimonyforwhichpurposeitwantedtoavailthe opportunityofcross-examination.Thatapart,theAdjudicating Authoritysimplyreliedupontheprice-listasmaintainedatthedepotto determinethepriceforthepurposeoflevyofexciseduty.Whetherthe goodswere,infact,soldtothesaiddealers/witnessesattheprice-which ismentionedintheprice-listitselfcouldbethesubjectmatterofcross- examination.Therefore,itwasnotfortheAdjudicatingAuthorityto presupposeastowhatcouldbethesubjectmatterofthecross- examinationandmaketheremarksasmentionedabove.[Para7] Ifthetestimonyofthesetwowitnessesisdiscredited,therewasno materialwiththedepartmentonthebasisofwhichitcouldjustifyits action,asthestatementoftheaforesaidtwowitnesseswastheonly basisofissuingtheShow-CauseNotice.[Para8] Hence,impugnedorderoftheTribunalwassetasideandthisappeal wasallowed.[Para9]” 17.8Movingfurther,wealsonotethatthereweretheseizeddocumentswhich wereusedformakingtheadditioninthehandsoftheassesseebutthesame werenotsuppliedtotheassesseeeventhoughtheassesseehasmadearequest forthenecessarydocuments.Therelevantextractofthesubmissionofthe assesseeisreproducedasunder: 5.3.1So,theelementaryprincipleofnaturaljustice,asappliedtoincome-tax proceedingsisthattheassesseeshouldhaveknowledgeofhematerialthatisgoingtobe usedagainsthimsothathemaybeableomeetwithit.Where,forinstance,the statementofapersonisrecordedbehindthebackoftheappellantbutnottestedby cross-examination,suchastatementcannotbeallowedtobeusedtotheprejudiceofthe appellantcompany. 17.9Thedocumentsusedforthepurposeoftheadditioncannotbethebasis untilandunlessthesameissuppliedtotheotherpartyforrebuttal.Inholdingso, wedrawsupportandguidancefromthejudgmentofHon’bleApexCourtinthe caseofDhakeswariCottonMillsLtd.vs.CommissionerofIncome-taxcitedin [1954]26ITR775(SC)whereitwasheldasunder; “Asregardsthesecondcontention,althoughITOisnotfetteredby technicalrulesofevidenceandpleadings,andthatheisentitledtoact onmaterialwhichmaynotbeacceptedasevidenceinacourtoflaw, buttheretheagreementends;becauseitisequallyclearthatinmaking theassessmentundersection23(3)heisnotentitledtomakeapure guessandmakeanassessmentwithoutreferencetoanyevidenceorany materialatallandtheremustbesomethingmorethanbaresuspicionto supporttheassessmentundersection23(3).Theruleoflawonthis 26IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 subjecthasbeenfairlyandrightlystatedbytheLahoreHighCourtin thecaseofSethGurmukhSinghv.CIT[1944]12393.Intheinstant case,theTribunalviolatedcertainfundamentalrulesofjusticein reachingitsconclusions.Firstly,itdidnotdisclosetotheassesseewhat informationhadbeensuppliedtoitbythedepartmentalrepresentative. Next,itdidnotgiveanyopportunitytotheassesseetorebutthe materialfurnishedtoitbyhim,andlastly,itdeclinedtotakeallthe materialthattheassesseewantedtoproduceinsupportofitscase.The resultwasthattheassesseehadnothadafairhearing.Theestimateof thegrossrateofprofitonsales,bothbytheITOandtheTribunal,was basedonsurmises,suspicionsandconjectures.TheTribunaltookfrom therepresentativeofthedepartmentastatementofgrossprofitratesof othercottonmillsbutdidnotshowthatstatementtotheassesseedidnot givehimaopportunitytoshowthatstatementhadnorelevancy whatsoevertothecaseofthemillinquestion.Itwasnotknownwhether themillswhichhaddisclosedtheseratesweresimilarlysituatedand circumstanced.NotonlydidtheTribunalnotshowtheinformation givenbytherepresentativeofthedepartmenttotheassessee,butit refusedeventolookatbooksandpaperswhichassessee's representativeproducedbeforetheAccountantMemberinhischamber. Theassessmentinthiscaseandintheconnectedappeal,wasabovethe figureofRs.55lakhsanditwasjustandproperwhendealingwitha matterofthismagnitudenottoemployunnecessaryhasteandshow impatience,particularlywhenitwasknowntothedepartmentthatthe booksoftheassesseewereinthecustodyoftheSub-DivisionalOfficer. ThusboththeITOandtheTribunalinestimatingthegrossprofitrate onsalesdidnotactonanymaterialbutactedonpureguessand suspicion.ItwasthusafitcasefortheexerciseofpowerunderArticle 136. Intheresult,theappealwastobeallowedandtheorderoftheTribunal wastobesetasideandthecasewastoberemandedtoitwithdirection thatinarrivingatitsestimateofgrossprofitsandsalesitshouldgive fullopportunitytotheassesseetoplaceanyrelevantmaterialonthe pointthatithasbeforetheTribunal,whetheritisfoundinthebooksof accountorelsewhereanditshouldalsodisclosetotheassesseethe materialonwhichtheTribunalisgoingtofounditsestimateandthen affordhimfullopportunitytomeetthesubstanceofanyprivate inquiriesmadebytheITOifitisintendedtomaketheestimateonthe footofthoseenquiries.” 17.10Itisalsosignificanttonotethatboththebrokerswhoweresubjectto searchhaveapproachedthesettlementcommission.Intheprocessofsettlingthe disputeinthesettlementcommission,theaffidavitoftheemployeeofthe assesseenamelyShriSanjayPatelhasstatedthatboththebrokershavetakenhis signaturetojustify/misleadthepublicthattheprojectbelongstoIsconGroupso 27IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 thattheycancollectthecashfromthem.Thenecessaryextractoftheaffidavitas recordedintheorderofld.CIT-Aisreproducedasunder: 3.ThatbothbrokersShriRajuJethanandTekwaniandDharmendraJethanand Bhambhanidoingthebrokerageactivitiesinthemarketintheirindependentcapacityfor thevariousrealestateschemesbuiltanddevelopedbyvariousbuilders,theyhappenedto knowmealsoandofferedmetoworkparttimeforthem. Whentheprospectivecustomersforthehypotheticalcommercialproject*VZP*demanded toprovidesomesortofendorsementfrombothbrokers,theyhavepreparedfewdiaries andtookmysignaturejusttogaintheconfidenceofthecustomersandtoretainthemin theirfold.WhenIwasnotavailable,Ihaveinvolvedoneofmycolleaguestosignthe diaries.ItcanbeeasilyverifiedfromtheseizedmaterialofIsconGroupthatIwasnever involvedinsigningofanydiariesforotherIsconProject. 4.ThatinrespectofwhateverIhavestatedinPara5ofmysworn-inaffidavitdated 23,06.2018inrespectofonefiletitled"vip-disc-pdfwhichwasfound01mylaptopand seizedfrommyresidencewhichisunderthetitle"zyk"cashIsconCommercial-Raipur Bookfortheperiod01.01.2014to30.06.2014.Thesaidfilecontainsthenotingofdiscount offeredbybothbrokersMr.Raju.JethanandTekwaniandDharmendraJethanand BhambhanitotheprospectivebuyercustomersstatinghypotheticalShopNumber,Area anddiscountpersq,ftforwhichcreditamountofdiscountisstatedunderthehead "credit".Thesaiddetailsofdiscountproposedtobeofferedbybothbrokerstothe prospectivebuyerswasgotpreparedbybothbrokersfrommetoshowittothe prospectivebuyersthediscountedbookingrateforthedifferentshopsinthehypothetical commercialproject"VIP 0 ,whichwasnotintheknowledgeofthedirectorsofVedica ProconPvt.Ltd.orthemanagementofJPIsconPvt,Ltd." 17.11Thegenuinenessoftheimpugnedaffidavithasnowherebeendoubtedby theauthoritiesbelowaswellasbytheLd.DRappearingonbehalfoftheRevenue atthetimeofthehearing.Thus,theaboveaffidavitalsoshowsthatthesewere thebrokerswhoareengagedincollectingthecashfromthepartieswithoutthe knowledgeoftheassessee.Furthermore,wealsonotethattheincomeofthe assesseeshouldbebasedontangiblematerials.Inotherwords,theincomewhich hasbeenallegedbelongingtotheassesseeshouldbeavailablewiththeassessee eitherintheformofsomeinvestmentortheexpenditurewhichhasbeenincurred bytheassesseeoutofsuchincome.Butnosuchfindinghasbeengivenbythe authoritiesbelow.NeitheranymaterialhasbeenbroughtonrecordbytheLd.DR suggestingthattheassesseehasmadeaninvestmentoutoftheunaccounted incomeorincurredtheexpendituresomewhereelsewithoutrecordingthesamein thebooksofaccounts.Theincomecannotbedecidedmerelybasedonpapers. Documentswhicharefoundduringthesearchmaybeincriminatinginnaturebut thesameshouldbesupportedbycorroborativeevidence.However,wefindthat nocorroborativeevidenceinsupportofthesematerialshasbeenbroughton 28IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 record.Itisalsoseenthatthenamesofthepartieswerealsorecordedwhohave madeinvestmentintheprojectoftheassessee.However,noverification whatsoeverhasbeencarriedoutbytheauthoritiesbelowfromtherespective partiestoestablishthefactthattheassesseehascarriedouttransactionswhich werenotaccountedforinthebooksofaccounts.Inholdingso,wedrawsupport andguidancefromtheorderofITATAhmedabadCBenchinthecaseofNishant ConstructionPrivateLimitedvs.ACITITANo.1502/AHD/2015dated14-12-2017 whereitwasheldasunder: “25.Comingtotheevidentiaryvalueoftheimpoundedloosesheetmentioned elsewhere,theHon’bleSupremeCourtinthecaseofCommonCause(A www.taxguru.inITANo.1502/Ahd/2015.A.Y.2011-1212RegisteredSociety)and Othersvs.UnionofIndiaandOthersinWritPetitionCivilAppealNo.505of2015 hasobservedasunder:-16.Withrespecttothekindofmaterialswhichhavebeen placedonrecord,thisCourtinV.C.Shukla'scase(supra)hasdealtwiththematter thoughatthestageofdischargewheninvestigationhadbeencompletedbutsame isrelevantforthepurposeofdecisionofthiscasealso.ThisCourthasconsidered theentriesinJainHawaladiaries,notebooksandfilecontainingloosesheetsof papersnotintheformof"BooksofAccounts"andhasheldthatsuchentriesin loosepapers/sheetsareirrelevantandnotadmissibleunderSection34ofthe EvidenceAct,andthatonlywheretheentriesareinthebooksofaccounts regularlykept,dependingonthenatureofoccupation,thatthoseareadmissible17. IthasfurtherbeenlaiddowninV.C.Shukla(Supra)astothevalueofentriesinthe booksofaccount,thatsuchstatementshallnotalonebesufficientevidenceto chargeanypersonwithliability,eveniftheyarerelevantandadmissible,andthat theyareonlycorroborativeevidence.Ithasbeenheldeventhenindependent evidenceisnecessaryastotrustworthinessofthoseentrieswhichisarequirement tofastentheliability. 26.TheHon’bleSupremeCourtfurtherobserved:- 17.FromaplainreadingoftheSectionitismanifestthattomakeanentry relevantthereunderitmustbeshownthatithasbeenmadeinabook,that bookisabookofaccountandthatbookofaccounthasbeenregularlykept inthecourseofbusiness.FromtheaboveSectionitisalsomanifestthat eveniftheaboverequirementsarefulfilledandtheentrybecomes admissibleas/relevantevidence,still,thestatementmadethereinshallnot alonebesufficientevidencetochargeanypersonwithliability.Itisthus seenthatwhilethefirstpartofthesectionspeaksoftherelevancyofthe entryasevidence,thesecondpartspeaks,inanegativeway,ofits evidentiaryvalueforchargingapersonwithaliability.Itwill,therefore,be necessaryforustofirstascertainwhethertheentriesinthedocuments,with whichweareconcerned,fulfilltherequirementsoftheabovesectionsoas tobeadmissibleinevidenceandifthisquestionisansweredinthe affirmativethenonlyitsprobativevalueneedbeassessed. 27.Withrespecttoevidentiaryvalueofregularaccountbook,theHon’bleSupreme CourtinthecaseofV.C.Shukla1998(3)SCC410haslaiddown:- 29IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 ”37.InBeniv.BisanDayalitwasobservedthatentriesinbooksof accountarenotbythemselvessufficienttochargeanypersonwithliability, thereasonbeingthatamancannotbeallowedtomakeevidenceforhimself bywhathechoosestowriteinhisownbooksbehindthebackoftheparties. Theremustbeindependentevidenceofthetransactiontowhichtheentries relateandinabsenceofsuchevidencenoreliefcanbegiventotheparty whoreliesuponsuchentriestosupporthisclaimagainstanother.InHira Lalv.RamRakhatheHighCourt,whilenegativingacontentionthatit havingbeenprovedthatthebooksofaccountwereregularlykeptinthe ordinarycourseofbusinessandthat,therefore,allentriesthereinshouldbe consideredtoberelevantandtohavebeenproved,said,thattheruleas laiddowninSection34ofTieActthatentriesinthebooksofaccount regularlykeptinthecourseofbusinessarerelevantwhenevertheyreferto amatterinwhichtheCourthastoenquirewassubjecttothesalientproviso thatsuchentriesshallnotalonebesufficientevidencetochargeanyperson withliability.Itisnot,therefore,enoughmerelytoprovethatthebooks havebeenregularlykeptinthecourseofbusinessandtheentriestherein arecorrect.Itisfurtherincumbentuponthepersonrelyinguponthose entriestoprovethattheywereinaccordancewithfacts." 28.Itisapparentfromtheaforesaiddiscussionthattheloosesheetofpapersare whollyirrelevantasevidencebeingnotadmissibleu/s.34soastoconstitute evidencewithrespecttothetransactionsmentionedthereinbeingofnoevidentiary value. 29.Moreover,theAssessingOfficedidnotmakeanyinquiryfrombuyersofflatin respectofactualpricespaidbythem.Healsodidnotmakeanyotherinquiryin ordertocorroboratehisconclusion.Thereisnoincriminatingevidencetoshow thattheassesseehassoldtheflatsatahigherrate. 30.Inourunderstandingofthefacts,theimpoundedloosesheetcanatthemostbe termedas“dumbdocument”whichdidnotcontainfulldetailsaboutthedates,and itscontentswerenotcorroboratedbyanymaterialandcouldnotrelieduponand madethebasisofaddition. 31.InthecaseofCITvs.KulwantRai291ITR36therulinggiveninthecaseof DhakeswariCottonMillsLtd.26ITR775bytheHon’bleSupremeCourthasbeen relieduponwhereintheHon’bleSupremeCourthasheld“eventhoughIncome TaxAuthoritiesincludingtheAssessingOfficerhasunfettereddiscretionandnot strictlyboundbytherulesandpleadingsaswellasmaterialsonrecordandis legitimatelyentitledtoactonthematerialwhichmaynotbeacceptedasevidence, neverthelesssuchdiscretiondoesnotentitlethemtomakeapureguessandbasean assessmententirelyuponitwithoutreferencetoanymaterialorevidenceatall”. 32.Consideringthefactsofthecaseinhandintotalityandinthelightofthe judicialdecisionsreferredtohereinabove,wedonotfindanymeritinthe impugnedadditions.We,therefore,setasidethefindingsoftheld.CIT(A)and directtheA.O.todeletetheadditionofRs.32.56crores. 33.Intheresult,theappealfiledbytheAssesseeisaccordinglyallowed.” 17.12OnperusaloftheorderoftheAO,wenotethattheAOhasgivenafinding basedontheseizeddocumentsthattheassesseehasreceivedchequepayment 30IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 aswellascashpaymentfromtheparties.Therelevantextractofthefindingof theAOisreproducedasunder: BlockShopNo.AreaRateConsiderationPayment1Payment 2 A20653612025644540032000003000000 A20753612025644540032000003000000 B20953612025644540032000003200000 C20953611700627120031500001750000 C21053611700627120031500001750000 B21453612025644540032000002250000 383240001910000014950000 17.13However,wefindthattheassessmentorderissilentaboutthefactthatin whoseaccounttheimpugnedamountofchequewasreceivedbytheassessee.No detailaboutthepartywhohaspaidsuchamounttotheassesseeandwhatwas thenatureoftransaction.Likewise,thereisnowhisperintheorderoftheAO whethersuchamountrepresentingthereceiptofmoneyinchequewasrecorded inthebooksofaccountsoftheassesseeorinthebooksofaccountsofthe brokers.Thus,intheabsenceofsuchfindingsnoinferencecanbedrawnagainst theassessee. 17.14Theassesseelauncheditsprojectintheassessmentyear2015-16andhas showncurrentliabilitiesrepresentingtheadvancebookingreceivedfromthe partiesamountingtoRs.3,67,50,361/-only.Thenamesofthesepartieswhohave bookedtheunitintheprojectnamely“IsconCommercialCentre’weredifferent withthenameofthepartieswhowerefoundduringsearchatthepremisesofthe brokersandtheemployeeoftheassesseeexcept3names.However,thequestion ariseswhetherthese3nameswererepresentingthesamepartieswhothebuyers wereaspertheseizeddocuments.Inthisregard,wenotethatnosuchfindings tothiseffecthavebeengivenbytheauthoritiesbelowandfurthermoreno verificationhasbeencarriedouttoestablishthestandoftheRevenue.Thus,the questionofmakingtheadditionwithrespecttotheallegedamountofcashofRs. 37,14,80,775/-inthesucceedingyearsinwhichthetransactionfortransferring theunittakesplaceisdirectedbytheLd.CIT-Aisdevoidofanymeritandliable 31IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 tobequashed.Besidestheabove,theld.CIT-Awhileadjudicatingtheissuecan givethefindingfortheassessmentyearwhichisindisputebeforehim.However, theld.CIT-Ainthepresentcasehasexceededhisjurisdictionbygivingdirections tomaketheadditioninthelateryear/years.Inthisregard,wedrawsupportand guidancefromtheorderChennaiTribunalinthecaseSunMetalFactory(I)(P.) Ltd.Vs.AssistantCommissionerofIncomeTaxreportedin124ITD14whereinit washeldasunder: “Onthefactsofthecase,thequestionaroseastowhethertheactionofthe Commissioner(Appeals)ingivingthedirectiontotheAssessingOfficerto issuenoticeundersection148bytreatingtheactionundersection150was justifiedornot.Theappellateauthoritycangivefindingsanddirections onlyinrespectofyear/periodwhichisbeforethatauthorityandno directionorfindingcanbegiveninrespectofotheryears.Thus,inthe instantcase,theCommissionerafterholdingthattheadditionmadebythe AssessingOfficerwasnotbasedontheevidencefoundduringthesearch, thesamecouldnotenlargethescopeofappealforgivingthedirectionto theAssessingOfficerforreopeningoftheassessmentfortheassessment year1999-2000.TheCommissioner(Appeals)hadfailedtorecorda categoricalfindingjustifyingthedirectiongiventotheAssessingOfficer whentheAssessingOfficerhimselfhadnotchosenforreopeningthe assessment.Accordingly,thedirectionsgivenbytheCommissioner (Appeals)intheimpugnedorderweretobesetaside.Theappealofthe assesseestoodallowed.[Para7]” 17.15Inviewoftheaboveandafterconsideringtheargumentsofbothsides,the groundofappealoftheassesseeandobjectionsfiledintheCObearingNo. 64/Ahd/2020forA.Y.2014-15filedbytheassesseeareallowedwhereasthe groundofappealoftherevenuebearingno.IT(SS)A40/Ahd/2020forA.Y. 2014-15isdismissed. 17.16Intheresult,theappealandtheCOoftheassesseeareallowedwhereas theappealoftheRevenueisdismissed. 18.ComingtootherappealsoftheassesseebearingIT(SS)ANo.33& 34/Ahd/2020forA.Y.2015-16&2016-17. 19.Attheoutset,wenotethattheissuesraisedbytheAssesseeinitsgrounds ofappealsfortheAYs2015-16&2016-17areidenticaltotheissuesraisedbythe 32IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 AssesseeinITANo.32/Ahd/2020fortheassessmentyear2014-15.Therefore, thefindingsgiveninITANo.32/Ahd/2020shallalsobeapplicabletotheabove- mentionedtwoappealsoftheassesseefortheyearsunderconsiderationi.e.AY 2015-16&2016-17.ThegroundofappealoftheAssesseefortheassessment 2014-15hasbeendecidedbyusvideparagraphNo.17ofthisorderinfavourof theassessee.ThelearnedARandtheDRalsoagreedthatwhateverwillbethe findingsfortheassessmentyear2014-15shallalsobeappliedfortheyearunder considerationi.e.AY2015-16&2016-17.Hence,thegroundsofappealsfiledby theassesseeareherebyallowed. 20.IntheresulttheappealsfiledbytheassesseebearingIT(SS)ANos.33& 34/Ahd/2020forA.Y.2015-16&2016-17areherebyallowed. 21.ComingtotheappealsfiledbytheRevenuebearingIT(SS)ANos. 40/Ahd/2020alongwiththeCONo.64/Ahd/2020forA.Y.2014-2015. 23.Attheoutset,wenotethattheissueraisedbytheRevenueandCOraised bytheassesseehasalreadybeenadjudicatedalongwiththeappealofthe assesseebearingNo.IT(SS)ANo.32/AHD/2020forA.Y.2014-15infavourofthe assesseeandagainstRevenuevideparagraphNo.17ofthisorder.Respectfully followingthesame,theappealfiledbytheRevenueisdismissedandtheCOfiled bytheassesseeisallowed. 24.Intheresult,theappealfiledbytheRevenuebearingIT(SS)ANo. 40/Ahd/2020isdismissedwhereastheCO40/Ahd/2020forA.Y.2014-15filedby theassesseeisallowed 25.ComingtotheothersappealsfiledbytheRevenuebearingIT(SS)ANos. 41-42/Ahd/2020alongwiththeCONos.65-66/Ahd/2020forA.Ys.2015-2016& 2016-17. 33IT(SS)ANo.32/Ahd/2020with8others A.Y2014-15 26.Attheoutset,wenotethattheissuesraisedbytheRevenueinitsappeals andtheobjectionsintheCOraisedbytheassesseeareidenticaltotheissues raisedinIT(SS)ANo.40/Ahd/2020withC.O.No.64/Ahd/2020forA.Y.2014-15 whichhasalreadybeenadjudicatedalongwiththeappealoftheassesseebearing No.IT(SS)ANo.32/AHD/2020forA.Y.2014-15infavouroftheassesseeand againstRevenuevideparagraphNo.17ofthisorder.Respectfullyfollowingthe same,theappealsfiledbytheRevenuearedismissedandtheCOsfiledbythe assesseeareallowed. 27.Thecombinedresultsofalltheappealsareasfollows: Sr. No. IT(SS)A/C.O. No. Asstt. Year AppealbyResult 1-3. IT(SS)ANos.32- 34/Ahd/2020 2014-15 To 2016-17 Assessee Theappealsfiled bytheassessee areallowed 4-9 IT(SS)ANos.40 to42/Ahd/2020 With C.O.Nos64to 66/Ahd/2020 2014-15 to 2016-17 A.C.I.T, CentralCircle-2(4), Ahmedabad Theappealsfiled bytherevenue aredismissed whereastheCOs filedbythe assesseeare allowed. OrderpronouncedintheCourton31/08/2023atAhmedabad. Sd/-Sd/- (SIDDHARTHANAUTIYAL)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated31/08/2023 Manish