Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE
These cross-appeals of the assessee and the Revenue for appeals of the assessee and the Revenue for appeals of the assessee and the Revenue for assessment year 2011 assessment year 2011-12 are directed against order dated 12 are directed against order dated 28.02.2019 passed by the Ld. Commissioner of Income-tax 28.02.2019 passed by the Ld. Commissioner of Income 28.02.2019 passed by the Ld. Commissioner of Income (Appeals)-40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the 40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the 40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the 14 are directed assessee for assessment year 2012 assessee for assessment year 2012-13 and 2013-14 are directed against two separate orders against two separate orders, both dated 20.02.2019 passed by the both dated 20.02.2019 passed by the Ld. CIT(A)54, Mumbai. Ld. CIT(A)54, Mumbai.
A common issue A common issue-in-dispute is involved in all these appeals and ved in all these appeals and therefore, these appeals have been heard together and disposed off these appeals have been heard together and disposed off these appeals have been heard together and disposed off by way this consolidated order for convenience and avoid repetition by way this consolidated order for convenience and avoid repetition by way this consolidated order for convenience and avoid repetition of facts.
2.1 Firstly, we take up the cross appeals for assessment year we take up the cross appeals for assessment year we take up the cross appeals for assessment year 2011-12. The ground 12. The grounds raised by the assessee are reproduced as s raised by the assessee are reproduced as under:
On the facts and in the circumstances of the case and in law On the facts and in the circumstances of the case and in law On the facts and in the circumstances of the case and in law the Hon’ble CIT(A) erred in sustaining total addition of the Hon’ble CIT(A) erred in sustaining total addition of the Hon’ble CIT(A) erred in sustaining total addition of Rs.54,96,161/ Rs.54,96,161/- to the returned income which she divided on to the returned income which she divided on pro rata basis according to the alleged cash payment made in pro rata basis according to the alleged cash payment made in pro rata basis according to the alleged cash payment made in the relevant asses the relevant assessment year merely on statement of third sment year merely on statement of third party, without brining on record any corroborative evidence that party, without brining on record any corroborative evidence that party, without brining on record any corroborative evidence that appellant company has paid the impugned amount in cash over appellant company has paid the impugned amount in cash over appellant company has paid the impugned amount in cash over and above the agreement price in making investment in flat at and above the agreement price in making investment in flat at and above the agreement price in making investment in flat at One Avighna Park project of M One Avighna Park project of M/s Nish Developers Pvt. Ltd. and /s Nish Developers Pvt. Ltd. and M/s Samridhi Dealers Pvt. Ltd. 3 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 the reasons assigned for doing so are wrong and contrary to the reasons assigned for doing so are wrong and contrary to the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Rules made there under. the provision of Income Tax Rules made there under. the provision of Income Tax Rules made there under. 2.2 The ground raised by the Revenue are reproduced as under: The ground raised by the Revenue are reproduced as under: The ground raised by the Revenue are reproduced as under:
Whether on the facts and circumstances of the 1. Whether on the facts and circumstances of the 1. Whether on the facts and circumstances of the case and in law, the id. CIT(A) has erred in restricting the addition of on CIT(A) has erred in restricting the addition of on- money to the extent of Rs.54,96,161/ money to the extent of Rs.54,96,161/- as against the addition as against the addition of Rs.4,15,00,000/ of Rs.4,15,00,000/- made by the A.O. as unaccounted A.O. as unaccounted investment of the assessee within the meaning of Section 69 of investment of the assessee within the meaning of Section 69 of investment of the assessee within the meaning of Section 69 of the Income-tax Act, 1961.?. tax Act, 1961.?.
2. Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in Whether on the facts and circumstances of the case and in law, the id. CITIA) has erred in estimating the addition only to CITIA) has erred in estimating the addition only to the extent of Rs.4,000/ the extent of Rs.4,000/- per sq. ft. being the differential rate per per sq. ft. being the differential rate per square feet in the form of on square feet in the form of on-money paid by the assessee to paid by the assessee to Nish Developers Private Limited, taking the basis of some other Nish Developers Private Limited, taking the basis of some other Nish Developers Private Limited, taking the basis of some other flats booked by some other parties during the same period, flats booked by some other parties during the same period, flats booked by some other parties during the same period, disregarding the fact that corroborative evidences of on disregarding the fact that corroborative evidences of on disregarding the fact that corroborative evidences of on-money paid by the assessee of Rs. 4,15,00,000/ paid by the assessee of Rs. 4,15,00,000/- Crore for the year e for the year under consideration, in the form of data from pendrive found under consideration, in the form of data from pendrive found under consideration, in the form of data from pendrive found and seized from Shri Pravin Mishra, a key employee of M/s and seized from Shri Pravin Mishra, a key employee of M/s and seized from Shri Pravin Mishra, a key employee of M/s Nish Dealers Pvt. Ltd., found during the course of search?. Nish Dealers Pvt. Ltd., found during the course of search?. Nish Dealers Pvt. Ltd., found during the course of search?. 3. "Whether on the facts and circumstances of the case and in 3. "Whether on the facts and circumstances of the case and in 3. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not accepting the statement of CIT(A) has erred in not accepting the statement of Shri Gulabchand Jain as evidence even though no evidence has Shri Gulabchand Jain as evidence even though no evidence has Shri Gulabchand Jain as evidence even though no evidence has been brought on record been brought on record for cO-ercion particularly when the ercion particularly when the admittance of payment of Rs.1.14.00.000/ admittance of payment of Rs.1.14.00.000/- for the flat by Shri for the flat by Shri Gulabchand Corroborated the evidence found during the course d Corroborated the evidence found during the course d Corroborated the evidence found during the course of search in the case of M/s Nish of search in the case of M/s Nish Developers (P) Ltd.?" Developers (P) Ltd.?" 4. "Whether on the facts and circumstances of the case and in 4. "Whether on the facts and circumstances of the case and in 4. "Whether on the facts and circumstances of the case and in law, the Id. CIT(A) took cognizance of and relied upon the law, the Id. CIT(A) took cognizance of and relied upon the law, the Id. CIT(A) took cognizance of and relied upon the statement of Shri Gulabchan statement of Shri Gulabchand of having paid on money to d of having paid on money to partly confirm the addition made by the AO and thereby dis partly confirm the addition made by the AO and thereby dis partly confirm the addition made by the AO and thereby dis- regarding specific evidence directly related to the case in favour regarding specific evidence directly related to the case in favour regarding specific evidence directly related to the case in favour of general evidence?" of general evidence?" 3. Briefly stated, facts of the case are that a search and the Briefly stated, facts of the case are that a search and the Briefly stated, facts of the case are that a search and the seizure action in the case of n the case of ‘Nish Developers (P.) Ltd. Nish Developers (P.) Ltd., Mumbai’ was M/s Samridhi Dealers Pvt. Ltd. 4 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 carried out by the Investigation Wing of the Income carried out by the Investigation Wing of the Income- -tax Department on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a project developed by M/s Nish Developers Pvt. Ltd. Simultaneously project developed by M/s Nish Developers Pvt. Ltd. Simultaneously project developed by M/s Nish Developers Pvt. Ltd. Simultaneously a search action was conducted at the residential premises of Shri the residential premises of Shri Sanjay Jain i.e. Director of the assessee Sanjay Jain i.e. Director of the assessee-company and survey company and survey action u/s 133A of the Income u/s 133A of the Income-tax Act, 1961 (in short ‘the Act’) was tax Act, 1961 (in short ‘the Act’) was carried out at the premises of the assessee carried out at the premises of the assessee-company company ‘M/s Samridhi Dealers Pvt. Ltd.’ on 04.04.2014. The statement of Shri Sanjay Jain on 04.04.2014. The statement of Shri Sanjay Jain on 04.04.2014. The statement of Shri Sanjay Jain Director of the assessee assessee company was recorded wherein he stated company was recorded wherein he stated that all financial matters that all financial matters were dealt with by his uncle, Shri dealt with by his uncle, Shri ‘Gulabchand Jain’ who who was also a Director of M/s Samr also a Director of M/s Samridhi Dealers Pvt. Ltd. Statement of Shri Gulabchand Jain Pvt. Ltd. Statement of Shri Gulabchand Jain was also also recorded u/s 131 of the Act wherein he admitted to have paid an amount of wherein he admitted to have paid an amount of wherein he admitted to have paid an amount of Rs.1.14 corres as on- -money to M/s Nish Developers Pvt. Ltd. for the money to M/s Nish Developers Pvt. Ltd. for the flat purchased/booked /booked. During the course of search in the case of ch in the case of M/s Nish Developers Pvt. M/s Nish Developers Pvt. Ltd., a pen drive was found and seized ve was found and seized from Shri Pravin Mishra, a key employee of M/s Nish Developers from Shri Pravin Mishra, a key employee of M/s Ni from Shri Pravin Mishra, a key employee of M/s Ni Pvt. Ltd. The data in the pen in the pen drive cantained details of on details of on-money received in respect of flats booked in ‘One A received in respect of flats booked in ‘One Avighna’ including on vighna’ including on- money in respect of flat booked by th money in respect of flat booked by the assessee. The total on e assessee. The total on-money of Rs.5.21 crores in respect of flat of the assessee in respect of flat of the assessee was reflected in was reflected in the pendrive for three assessment years i.e. 2011 the pendrive for three assessment years i.e. 2011- -12 to 2013-14. The relevant break up of The relevant break up of said sum of Rs.5.21 crores m of Rs.5.21 crores is reproduced as under:
M/s Samridhi Dealers Pvt. Ltd. 5 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019
AY 11-12 27.09.2010 27.09.2010 Nemichand Jain 50.00 50.00 AY 11-12 27.09.2010 27.09.2010 Nemichand Jain 25.00 25.00 Nemichand Jain AY 11-12 4.10.10 4.10.10 35.00 35.00 Nemichand Jain AY 11-12 7.10.10 7.10.10 30.00 30.00 Nemichand Jain AY 11-12 28.12.10 28.12.10 25.00 25.00 Nemichand Jain AY 11-12 31.12.10 31.12.10 15.00 15.00 Nemichand Jain AY 11-12 12.10.10 12.10.10 35.00 35.00 Nemichand Jain AY 11-12 19.10.10. 19.10.10. 50.00 50.00 Nemichand Jain AY 11-12 25.10.10 25.10.10 35.00 35.00 Nemichand Jain AY 11-12 02.11.10 02.11.10 15.00 15.00 Nemichand Jain AY 11-12 15.01.11 15.01.11 25.00 25.00 Nemichand Jain AY 11-12 01.02.11 01.02.11 25.00 25.00 Nemichand Jain AY 11-12 03.03.11 03.03.11 25.00 25.00 Total (A) 415 415 AY 12-13 06.09.11 06.09.11 Nemichand Jain 25.00 25.00 AY 12-13 07.09.11 07.09.11 Nemichand Jain 25.00 25.00 AY 12-13 29.12.11 29.12.11 Nemichand Jain 25.00 25.00 Total (B) 75.00 75.00 AY 13-14 06.09.12 06.09.12 Nemichand Jain 20.00 20.00 AY 13-14 10.09.12 10.09.12 Nemichand Jain 11.00 11.00 Total (C) 31.00 31.00 Total (A+B+C) 521 521 3.1 In view of the material belonging to the assessee found d In view of the material belonging to the assessee found d In view of the material belonging to the assessee found during the course of the search of the course of the search of third person,a notice u/s 153C of the notice u/s 153C of the Act was issued on 19.10.2016. In response Act was issued on 19.10.2016. In response, the assessee filed the assessee filed return of income on 27.10.2016 declaring total income of Rs.1016/- return of income on 27.10.2016 declaring total income of Rs.1016/ return of income on 27.10.2016 declaring total income of Rs.1016/ i.e. the same income which was declared by the assessee in the i.e. the same income which was declared by the assessee in the i.e. the same income which was declared by the assessee in the original return of income filed on 30.09 original return of income filed on 30.09.2011. In the return of .2011. In the return of income filed, the assessee submitted that though a sum of Rs.1.14 the assessee submitted that though a sum of Rs.1.14 the assessee submitted that though a sum of Rs.1.14 crores was admitted during the course of recording of the statement crores was admitted during the course of recording of the statement crores was admitted during the course of recording of the statement before the DDIT Investigation before the DDIT Investigation, Mumbai but the same was not but the same was not included in the return o included in the return of income filed u/s 153C of the A u/s 153C of the Act for the reason that the disclosure was taken by force hence, Sh. reason that the disclosure was taken by force hence reason that the disclosure was taken by force hence Gulabchand Jain, director of the company Gulabchand Jain, director of the company filed a retraction letter. retraction letter.
M/s Samridhi Dealers Pvt. Ltd. 6 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 Shri Gulabchand Jain director of the company also appeared before Shri Gulabchand Jain director of the company also appeared before Shri Gulabchand Jain director of the company also appeared before the Assessing Officer. In response to the Assessing Officer. In response to the summon issued u/s 131 of the summon issued u/s 131 of the Act, he submitted that he had already retracted his statement submitted that he had already retracted his statement submitted that he had already retracted his statement given before the Investigation Wing. He further stated that no on Investigation Wing. He further stated that no on Investigation Wing. He further stated that no on- money in cash had been given cash had been given for booking of flat in for booking of flat in project of M/s Nish Developers Pvt. Ltd. T Nish Developers Pvt. Ltd. The Assessing Officer, in the view of date in the view of date wise payment of on-money recorded in the pendrive found from Shri money recorded in the pendrive found from Shri money recorded in the pendrive found from Shri Pravin Mishra and statement of Pravin Mishra that said amount Pravin Mishra and statement of Pravin Mishra that Pravin Mishra and statement of Pravin Mishra that represented ‘on-money money’ received in respect of flats bo received in respect of flats booked by the assessee, made addit made addition for the unexplained investment of unexplained investment of Rs.4.15 crores paid relevant to the year under consideration. relevant to the year under consideration. relevant to the year under consideration.
On further appeal, the Ld. CIT(A) held that in assessee has On further appeal, the Ld. CIT(A) held that in assessee has On further appeal, the Ld. CIT(A) held that in assessee has paid on-money, however however as far as the amount of amount of ‘on-money’ recorded in the pendrive recorded in the pendrive, he was not agreed. He however taken note He however taken note of two instances of flat booked @ Rs.24,106/ of flat booked @ Rs.24,106/- and and @ Rs.25,239/- per sq. ft. respectively and per sq. ft. respectively and compared those two rate with those two rate with the flat booked by the assessee @ Rs.20,927/ d by the assessee @ Rs.20,927/-. It was held by t was held by the Ld. CIT(A) that on-money was paid a was paid at the rate of Rs.4000/- per SFT was per SFT was paid by the assessee and by the assessee and accordingly he sustained the addition of Rs.69 he sustained the addition of Rs.69 lakhs (=1725 x 4000) (=1725 x 4000) which was to be apportioned in the three which was to be apportioned in the three assessment years in the same ratio as on assessment years in the same ratio as on-money added by the money added by the Assessing Officer. The rel Assessing Officer. The relevant finding of the Ld. CIT(A) is evant finding of the Ld. CIT(A) is reproduced as under: reproduced as under:
M/s Samridhi Dealers Pvt. Ltd. 7 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019
“5.4 The submissions of the Ld. Counsel have been considered. The submissions of the Ld. Counsel have been considered. The submissions of the Ld. Counsel have been considered. It is the contention of the Id.Counsel that the addition has been It is the contention of the Id.Counsel that the addition has been It is the contention of the Id.Counsel that the addition has been made by the Ld.AO on the basis of a third party statement. The made by the Ld.AO on the basis of a third party statement. The made by the Ld.AO on the basis of a third party statement. The name mentioned in the data recorded by Shri Praveen Mishra is mentioned in the data recorded by Shri Praveen Mishra is mentioned in the data recorded by Shri Praveen Mishra is Shri Nemichand Jain. No statement of Shri Nemichand Jain has Shri Nemichand Jain. No statement of Shri Nemichand Jain has Shri Nemichand Jain. No statement of Shri Nemichand Jain has been taken nor did he make any admission at any point of been taken nor did he make any admission at any point of been taken nor did he make any admission at any point of time. Shri Gulabchand Jain has given a statement that cash of Shri Gulabchand Jain has given a statement that cash of Shri Gulabchand Jain has given a statement that cash of Rs.1.14 crores was Rs.1.14 crores was paid to M/s. Nish Developers Pvt. Ltd. He paid to M/s. Nish Developers Pvt. Ltd. He had subsequently retracted this statement for the reason that had subsequently retracted this statement for the reason that had subsequently retracted this statement for the reason that he was pressurized and coerced into making such an he was pressurized and coerced into making such an he was pressurized and coerced into making such an admission. Inspite of the search Inspite of the search undertaken in the assessee's undertaken in the assessee's premises, the investigation team could premises, the investigation team could not unearth any not unearth any incriminating material or any evidence that on incriminating material or any evidence that on-money has been money has been paid by the assessee. It is a fact that other than the statement paid by the assessee. It is a fact that other than the statement paid by the assessee. It is a fact that other than the statement of Shri Gulabchand Jain, there is no corroborative evidence of Shri Gulabchand Jain, there is no corroborative evidence of Shri Gulabchand Jain, there is no corroborative evidence which was found during the search. It is also the Id. which was found during the search. It is also the Id. which was found during the search. It is also the Id.Counsel's contention that no cross contention that no cross-examination of Shri Praveen Mishra examination of Shri Praveen Mishra has been provided to the assessee. The Ld.AO proposed to add has been provided to the assessee. The Ld.AO proposed to add has been provided to the assessee. The Ld.AO proposed to add Rs.5.21 Crores which was the on Rs.5.21 Crores which was the on-money paid by the assessee money paid by the assessee as per the pendrive. The assessee has purchased the flat with as per the pendrive. The assessee has purchased the flat with as per the pendrive. The assessee has purchased the flat with a carpet area of 1725 sq. ft. at a consideration of rpet area of 1725 sq. ft. at a consideration of rpet area of 1725 sq. ft. at a consideration of Rs.3,61,00,000/ Rs.3,61,00,000/-, The stamp duty value of this flat is duty value of this flat is Rs.3,58,00,000/ Rs.3,58,00,000/-. The rate per sq. ft. works out to Rs.20,927/ . The rate per sq. ft. works out to Rs.20,927/- which is higher than the stamp value rate. If the amount of which is higher than the stamp value rate. If the amount of which is higher than the stamp value rate. If the amount of Rs.5.21 Crores is added to th Rs.5.21 Crores is added to the consideration of Rs.3.61 Crores, e consideration of Rs.3.61 Crores, it will make the total consideration paid Rs.8,82,00,000/ it will make the total consideration paid Rs.8,82,00,000/ it will make the total consideration paid Rs.8,82,00,000/- and the per sq. ft. rate would be Rs.51,130/ the per sq. ft. rate would be Rs.51,130/- which is abnormally which is abnormally high and not feasible. Therefore, it does not appear that the high and not feasible. Therefore, it does not appear that the high and not feasible. Therefore, it does not appear that the assessee has paid on assessee has paid on-money of Rs.5.21 Crores for this flat. .21 Crores for this flat. 5.5 Though there are no corroborative evidences for payment of .5 Though there are no corroborative evidences for payment of .5 Though there are no corroborative evidences for payment of on-money detected during the search or during the assessment money detected during the search or during the assessment money detected during the search or during the assessment proceedings, there is an indicator that on proceedings, there is an indicator that on-money would have money would have been paid by the assessee. The appeal of M/s. been paid by the assessee. The appeal of M/s. Nish Developers Nish Developers Pvt. Ltd. was disposed off by the undersigned.During the Pvt. Ltd. was disposed off by the undersigned.During the Pvt. Ltd. was disposed off by the undersigned.During the course of appellate proceedings in that case, the undersigned course of appellate proceedings in that case, the undersigned course of appellate proceedings in that case, the undersigned had an occasion to call for the list of purchasers along with the had an occasion to call for the list of purchasers along with the had an occasion to call for the list of purchasers along with the date of booking and the rate at which the flats were bo date of booking and the rate at which the flats were bo date of booking and the rate at which the flats were booked. It was also held that a lot of purchasers have paid on was also held that a lot of purchasers have paid on was also held that a lot of purchasers have paid on-money to the builder. It is noticed that around the same time as the the builder. It is noticed that around the same time as the the builder. It is noticed that around the same time as the assessee's booking of the flat, two flats were booked @ assessee's booking of the flat, two flats were booked @ assessee's booking of the flat, two flats were booked @ Rs.24,106/- and Rs.25,239/- per sq. ft., respectively whereas per sq. ft., respectively whereas the assessee has booked it @ Rs.20,927/ ssee has booked it @ Rs.20,927/-. It appears that the . It appears that the M/s Samridhi Dealers Pvt. Ltd. 8 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 assessee had also paid on assessee had also paid on-money and it is for the same reason money and it is for the same reason that he made an admission of Rs. 1.14 crores. No other reason that he made an admission of Rs. 1.14 crores. No other reason that he made an admission of Rs. 1.14 crores. No other reason can explain the difference in booking rate by the assessee. can explain the difference in booking rate by the assessee. can explain the difference in booking rate by the assessee. Therefore, it is p Therefore, it is presumed that the assessee had also paid resumed that the assessee had also paid certain amount of on certain amount of on-money which is estimated based on the money which is estimated based on the booking rates of similar flats around the same time. The booking rates of similar flats around the same time. The booking rates of similar flats around the same time. The differential rate of a round figure of Rs.4,000/ differential rate of a round figure of Rs.4,000/- (25000 (25000-20927) per sq. ft. is estimated as the on per sq. ft. is estimated as the on-money paid by the assessee. oney paid by the assessee. The flat purchased by the assessee has a carpet area of 1,725 The flat purchased by the assessee has a carpet area of 1,725 The flat purchased by the assessee has a carpet area of 1,725 sq. ft. and the same sq. ft. sq. ft. and the same and the same was purchased at a cost of was purchased at a cost of was purchased at a cost of Rs.3,61,00,000/ Rs.3,61,00,000/-, this gives the rate per sq. ft. as Rs.20,927/ , this gives the rate per sq. ft. as Rs.20,927/-, If the differential rate of Rs.4,000/ If the differential rate of Rs.4,000/- is taken, the is taken, the same would work out to Rs.69,00,000/ work out to Rs.69,00,000/- (1,725 X 4,000/-). It is held that the ). It is held that the assessee has paid on assessee has paid on-money of Rs.69,00,000/ money of Rs.69,00,000/- for the purchase of this flat and the same amount will have to be purchase of this flat and the same amount will have to be purchase of this flat and the same amount will have to be apportioned in the three years in the same ratio as the on apportioned in the three years in the same ratio as the on apportioned in the three years in the same ratio as the on- money added by the Ld.AO. The ed by the Ld.AO. The addition for this year addition for this year accordingly works out to Rs.54,96,161/ accordingly works out to Rs.54,96,161/-. The Ld.AO is directed . The Ld.AO is directed to restrict the disallowance to Rs.54,96,161/ to restrict the disallowance to Rs.54,96,161/- and the appellant and the appellant gets relief for the balance amount. This ground of appeal is gets relief for the balance amount. This ground of appeal is gets relief for the balance amount. This ground of appeal is Partly Allowed. Partly Allowed.”
5. Before us, the Ld. Counsel of the assessee assailed the order of ore us, the Ld. Counsel of the assessee assailed the order of ore us, the Ld. Counsel of the assessee assailed the order of the Ld. CIT(A). Firstly Firstly that the Ld. CIT(A) has sustained the that the Ld. CIT(A) has sustained the addition merely on the basis of estimation of the rates of the two addition merely on the basis of estimation of the rates of the two addition merely on the basis of estimation of the rates of the two flats. Secondly, addition was made by the Assessing Officer , addition was made by the Assessing Officer relying , addition was made by the Assessing Officer on the statement of third party the statement of third party i.e. Sh. Pravin Mishra i.e. Sh. Pravin Mishra which was also retracted. Thirdly hirdly the disclosure made by the assessee and the disclosure made by the assessee and amount recorded in the pendrive are different and the assessee has amount recorded in the pendrive are different and the assessee has amount recorded in the pendrive are different and the assessee has also retracted his statement. Fourthly, no cross- also retracted his statement -examination of Shri Pravin Mishra i.e. a key person on whose statement addition Shri Pravin Mishra i.e. a key person on whose statement addition Shri Pravin Mishra i.e. a key person on whose statement addition has been made was has been made was, provided to the assessee despite being provided to the assessee despite being specifically asked.
M/s Samridhi Dealers Pvt. Ltd. 9 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 5.1 Further, he support Further, he supported the contention that no addition for on the contention that no addition for on- money should be made in the case of the money should be made in the case of the assessee. He He relied on the decision of the Tribunal in the case of decision of the Tribunal in the case of M/s Sanjay V. Parmar in M/s Sanjay V. Parmar in and CO No. 61/M/2020 for assessment ITA No. 3534/M/2019 and CO No. 61/M/2020 for assessment ITA No. 3534/M/2019 and CO No. 61/M/2020 for assessment year 2014-15 and in the case of and in the case of Jayesh Kewalchan in ITA No. Jayesh Kewalchan in ITA No. 5640/M/2017 for assessment year 2013 5640/M/2017 for assessment year 2013-14. The Ld. Counsel . The Ld. Counsel also referred to the decision in the case of also referred to the decision in the case of Nish Developers Pvt. Nish Developers Pvt. Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 but he 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 submitted that rate fixed for calculation of the submitted that rate fixed for calculation of the ‘on on-money’ in the said case might not be followed in the case of the assessee. said case might not be followed in the case of the assessee. said case might not be followed in the case of the assessee.
On the other hand, the Ld. Departmental Representative (DR) On the other hand, the Ld. Departmental Representative (DR) On the other hand, the Ld. Departmental Representative (DR) submitted that the inform submitted that the information contended in the pendrive ation contended in the pendrive was corroborated by the statement of the three buyers which was by the statement of the three buyers which was by the statement of the three buyers which was recorded during the course of search proceedings during the course of search proceedings during the course of search proceedings, he submitted that such a fact is recorded on page 47 of the order of the Tribunal recorded on page 47 of the order of the Tribunal recorded on page 47 of the order of the Tribunal in the case of Nish Developers Pvt. Ltd. in the case of Nish Developers Pvt. Ltd. (supra). (supra). Further, he submitted that the pendrive is date submitted that the pendrive is date-wise payment of cash paid by wise payment of cash paid by the assessee has been recorded. He further submitted that the Ld. ssessee has been recorded. He further submitted that the Ld. ssessee has been recorded. He further submitted that the Ld. CIT(A) has confused himself CIT(A) has confused himself regarding application of the sale rate of application of the sale rate of the flats of the building. He submitted that there could not be any of the building. He submitted that there could not be any of the building. He submitted that there could not be any uniform rate for all the flats and rate of the flats uniform rate for all the flats and rate of the flats diff differs on basis of floor. He submitted that the Ld. CIT(A) himself has directed to take floor. He submitted that the Ld. CIT(A) himself has directed to take floor. He submitted that the Ld. CIT(A) himself has directed to take the statement of on- -money on said pendrive for apportionment said pendrive for apportionment of M/s Samridhi Dealers Pvt. Ltd. 10 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 addition sustained by him addition sustained by him in the three years. So according to him . So according to him, on one side he is taking the information on one side he is taking the information of on-money paid by the money paid by the assessee for apportionment of the addition sustained but for the assessee for apportionment of the addition sustained but for the assessee for apportionment of the addition sustained but for the purpose of sustaining addition he is adopting only sales rate purpose of sustaining addition he is adopting only sales rate purpose of sustaining addition he is adopting only sales rate recorded in respect of in respect of two flats. According to him, the Ld. CIT(A) is two flats. According to him, the Ld. CIT(A) is not justified in selectively takin not justified in selectively taking rate of two flats for computing the g rate of two flats for computing the on-money payment.
We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that in the case issue-in- -dispute is in respect of amount of on dispute is in respect of amount of on-money assessed in respect of flat booked by the assessee in respect of flat booked by the assessee in respect of flat booked by the assessee-company. The Director of the assessee company himself admitted payment of on- Director of the assessee company himself admitted payment of on Director of the assessee company himself admitted payment of on money Rs.1.14 crores during the statement recorded u/s 131 of the money Rs.1.14 crores during the statement recorded u/s 131 of the money Rs.1.14 crores during the statement recorded u/s 131 of the Act however later on he retracted and said on Act however later on he retracted and said on-money was not money was not offered in the return of income ed in the return of income by the assessee.
7.1 Further, the information of the on Further, the information of the on-money payment made by money payment made by the assessee recorded in the pendrive found from key person of the the assessee recorded in the pendrive found from key person of the the assessee recorded in the pendrive found from key person of the ‘Nish Develpers Pvt. Ltd. i.e. Shri Pravin Mishra Nish Develpers Pvt. Ltd. i.e. Shri Pravin Mishra, reflects reflects total on- money payment of Rs.5.21 crores relevant to three assessment money payment of Rs.5.21 crores relevant to three assessment money payment of Rs.5.21 crores relevant to three assessment years from assessment year 2011 years from assessment year 2011-12 to 2013-14. The said amount 14. The said amount relevant to the assessment years is of Rs.4.15 crores. The Assessing relevant to the assessment years is of Rs.4.15 crores. The Assessing relevant to the assessment years is of Rs.4.15 crores. The Assessing Officer accordingly made the said addition Officer accordingly made the said addition of Rs.4.15 of Rs.4.15 crores in the year under consideration year under consideration. The Ld. CIT(A) has following the two . The Ld. CIT(A) has following the two
M/s Samridhi Dealers Pvt. Ltd. 11 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 instances of sale of the fla of sale of the flats as reflected in the pendrive sustained ts as reflected in the pendrive sustained the addition of the amount of Rs.68 lakhs for three assessment the amount of Rs.68 lakhs for three assessment the amount of Rs.68 lakhs for three assessment years. According to the Ld. CIT(A) those two years. According to the Ld. CIT(A) those two flats were booked flats were booked around same time when the assessee booked flat. Therefore, he around same time when the assessee booked flat. around same time when the assessee booked flat. took differential rate of around Rs.4,000/ differential rate of around Rs.4,000/- and after and after multiplying with carpet area of of 1750 sq. ft. of assessee’s flat of assessee’s flat, he estimated disallowance to Rs.69 lakhs. disallowance to Rs.69 lakhs.
7.2 Before us, the Ld. Counsel of the assessee submitted that the Ld. Counsel of the assessee submitted that the Ld. Counsel of the assessee submitted that no cross-examination was provided to the examination was provided to the assessee of Shri Pravin assessee of Shri Pravin Mishra, but in our opinion addition has not been made merely on ut in our opinion addition has not been made merely on ut in our opinion addition has not been made merely on the basis of his statement and it is on the basis of the entries the basis of his statement and it is on the basis of the entries the basis of his statement and it is on the basis of the entries recorded in the pendrive data maintained by Shri Pravin Mishra on e pendrive data maintained by Shri Pravin Mishra on e pendrive data maintained by Shri Pravin Mishra on behalf of the company company M/s Nish Developers Pvt. Ltd. M/s Nish Developers Pvt. Ltd. It is also not out of place that director of the director of the assessee company himself admitted company himself admitted payment of on-money of Rs.1.44 crores though same was retracted money of Rs.1.44 crores though same was retracted money of Rs.1.44 crores though same was retracted later on. In the case of Sanjay V. Parmar (supra) on. In the case of Sanjay V. Parmar (supra), relied upon by relied upon by the Ld. Counsel of the assessee, Ld. Counsel of the assessee, the Tribunal has recorded that no flat he Tribunal has recorded that no flat was booked in the name of the said assessee in the building ‘One was booked in the name of the said assessee in the building ‘One was booked in the name of the said assessee in the building ‘One Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore addition Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore ad Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore ad was deleted but facts of the instant case are different as the was deleted but facts of the instant case are different was deleted but facts of the instant case are different assessee has booked the flat in its name. We find that in the case of assessee has booked the flat in its name. We find that in the case of assessee has booked the flat in its name. We find that in the case of M/s Nish Developers Pvt. Ltd. M/s Nish Developers Pvt. Ltd. (supra) the Tribunal after considering the Tribunal after considering the objections against considering the rates provided in the the objections against considering the rates pr the objections against considering the rates pr pendrive directed to apply rate of Rs.22,214/ pendrive directed to apply rate of Rs.22,214/- for the flat sold and the flat sold and M/s Samridhi Dealers Pvt. Ltd. 12 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 any flat sold lower than this rate lower than this rate, the difference was directed to be the difference was directed to be considered as on-money received on money received on the said flat. The relevant the said flat. The relevant finding of the Tribunal in para 28 in th finding of the Tribunal in para 28 in the case of Nish Developers Nish Developers Pvt. Ltd. (supra) is reproduced as under: is reproduced as under:
“28. In the present case also during cross examination before 28. In the present case also during cross examination before 28. In the present case also during cross examination before AO during assessment proceeding, Mr Pravin Mishra admitted AO during assessment proceeding, Mr Pravin Mishra admitted AO during assessment proceeding, Mr Pravin Mishra admitted that he has prepared all this data on his own imagination that he has prepared all this data on his own imagination that he has prepared all this data on his own imagination which is not related to the assessee. The cross examination not related to the assessee. The cross examination not related to the assessee. The cross examination being conducted in the presence of the AO, the AO has also not being conducted in the presence of the AO, the AO has also not being conducted in the presence of the AO, the AO has also not reexamined Mr Pravin Mishra, thus acceding to the same. In reexamined Mr Pravin Mishra, thus acceding to the same. In reexamined Mr Pravin Mishra, thus acceding to the same. In case the AO was not convinced of the said statement, he ought case the AO was not convinced of the said statement, he ought case the AO was not convinced of the said statement, he ought to have re-examined o examined or carried out further investigation to r carried out further investigation to gather gather gather further further further evidences evidences evidences for for for substantiating substantiating substantiating his his his stand. stand. stand. Therefore, considering the facts of the case and judicial Therefore, considering the facts of the case and judicial Therefore, considering the facts of the case and judicial pronouncements in this regard, the order of CIT(A) on the issue pronouncements in this regard, the order of CIT(A) on the issue pronouncements in this regard, the order of CIT(A) on the issue of pen drive cannot be accepted. Conside of pen drive cannot be accepted. Considering all these facts of ring all these facts of the assessee, we are of the view that the order of Ld. CIT(A) the assessee, we are of the view that the order of Ld. CIT(A) the assessee, we are of the view that the order of Ld. CIT(A) applying a blanket rate of 20% on the on applying a blanket rate of 20% on the on-money calculated on money calculated on the basis of data in the pen drive wherein the name of the the basis of data in the pen drive wherein the name of the the basis of data in the pen drive wherein the name of the customers were not even matching with the data in customers were not even matching with the data in customers were not even matching with the data in the pen drive and also the fact the amounts mentioned against the drive and also the fact the amounts mentioned against the drive and also the fact the amounts mentioned against the various flats purchasers having glaring and huge variations various flats purchasers having glaring and huge variations various flats purchasers having glaring and huge variations and that the pen drive was recovered from the premises of the and that the pen drive was recovered from the premises of the and that the pen drive was recovered from the premises of the employee of the assessee, the onus is on the Revenue to prove employee of the assessee, the onus is on the Revenue to prove employee of the assessee, the onus is on the Revenue to prove that data in pen drive are related to affairs of the assessee. ata in pen drive are related to affairs of the assessee. ata in pen drive are related to affairs of the assessee. Though the AO has not done his duty to determine correct Though the AO has not done his duty to determine correct Though the AO has not done his duty to determine correct income of the assessee by carrying out proper investigation of income of the assessee by carrying out proper investigation of income of the assessee by carrying out proper investigation of the case, yet the Tribunal being highest fact finding body is the case, yet the Tribunal being highest fact finding body is the case, yet the Tribunal being highest fact finding body is equally duty boun equally duty bound to determine correct income of the assessee d to determine correct income of the assessee based on the facts available on record. Considering the based on the facts available on record. Considering the based on the facts available on record. Considering the statement of third parties and sales pattern of the assessee as statement of third parties and sales pattern of the assessee as statement of third parties and sales pattern of the assessee as submitted before us by the assessee as also before the submitted before us by the assessee as also before the submitted before us by the assessee as also before the authorities below, we observe that authorities below, we observe that the selling rate of the flats in the selling rate of the flats in the assessee's project is varying from the assessee's project is varying from Rs.20,000 per sq Ft to Rs.20,000 per sq Ft to Rs.30,000 per sq. ft. during this period. Rs.30,000 per sq. ft. during this period. Such variation pattern Such variation pattern suggest that there may be some involvement of on suggest that there may be some involvement of on suggest that there may be some involvement of on-money in these transactions. This fact was also these transactions. This fact was also admitted by five buyers admitted by five buyers in their statement recorded U/s in their statement recorded U/s '132(4) of the Act during the '132(4) of the Act during the course of search. Therefore to meet ends of justice, it would be course of search. Therefore to meet ends of justice, it would be course of search. Therefore to meet ends of justice, it would be M/s Samridhi Dealers Pvt. Ltd. 13 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 reasonable to determine on reasonable to determine on-money by comparing average rate money by comparing average rate of sale for each year with the transaction to of sale for each year with the transaction to determine on determine on- money for the period upto the date of search for all 71 flats sold money for the period upto the date of search for all 71 flats sold money for the period upto the date of search for all 71 flats sold during this period, as out of 72 flats one of the flat was during this period, as out of 72 flats one of the flat was during this period, as out of 72 flats one of the flat was cancelled. In other words as per data available on records, cancelled. In other words as per data available on records, cancelled. In other words as per data available on records, average rate for A Y 2011 average rate for A Y 2011-12 works out to Rs.22,214/> so 12 works out to Rs.22,214/> so any flats sold during this year lower than this rate. the difference flats sold during this year lower than this rate. the difference flats sold during this year lower than this rate. the difference should be considered as on should be considered as on-money received on account of sale money received on account of sale of the said flat. In our considered this aspect needs to of the said flat. In our considered this aspect needs to of the said flat. In our considered this aspect needs to examined at the level of AO to ascertain the amount of on examined at the level of AO to ascertain the amount of on examined at the level of AO to ascertain the amount of on- money. Accordingly, we set aside the order of Id CIT(A) on this ordingly, we set aside the order of Id CIT(A) on this ordingly, we set aside the order of Id CIT(A) on this issue and direct the AO to examine working of average 'sale issue and direct the AO to examine working of average 'sale issue and direct the AO to examine working of average 'sale rate on the basis of sales data on yearly basis and determine rate on the basis of sales data on yearly basis and determine rate on the basis of sales data on yearly basis and determine on-money for A Y 2011 money for A Y 2011-12 to A Y 2014-15 on the same lines 15 on the same lines Needless to mention th Needless to mention that the AO will give sufficient opportunity at the AO will give sufficient opportunity of hearing to the assessee. of hearing to the assessee.” 7.3 Since, the Tribunal Since, the Tribunal (supra) in the case of Nish Developers Pvt. Nish Developers Pvt. Ltd. has directed to adopt the rate of R irected to adopt the rate of Rs.22,214/- per sq. ft. per sq. ft. as the reasonable market rate and reasonable market rate and difference amount recorded by Nish ecorded by Nish Developers Pvt. Ltd. as the on as the on-money received by the said company. money received by the said company. Thus the amount of on Thus the amount of on-money received by the Nish Developers P. Nish Developers P. Ltd. i.e. company becomes the amount of on company becomes the amount of on-money paid by the money paid by the customers for booking booking of those flats. In the instant case, the rate ant case, the rate which the assessee has booked which the assessee has booked i.e. Rs.20,927/-, is s found to lower than Rs.22,214/- per sq. ft. per sq. ft. fixed by the Tribunal (supra) fixed by the Tribunal (supra) and therefore, difference amount i.e. Rs. therefore, difference amount i.e. Rs.2927/- is held to be on is held to be on-money paid by the assessee. Accordingly, paid by the assessee. Accordingly, 2927 x 1750 = 51,22,250/ 1750 = 51,22,250/- is sustained in the case of the assessee. The respective ground of sustained in the case of the assessee. The respective ground of sustained in the case of the assessee. The respective ground of Revenue and the assessee are accordingly partly allowed. This Revenue and the assessee are accordingly partly allowed. This Revenue and the assessee are accordingly partly allowed. This amount of addition sustained is accordingly amount of addition sustained is accordingly directed to be directed to be apportioned in three assessment years in the ratio of the payment apportioned in three assessment years in the ratio of the payment apportioned in three assessment years in the ratio of the payment
M/s Samridhi Dealers Pvt. Ltd. 14 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019 made by the assessee for booking of the flat. Therefore, for made by the assessee for booking of the flat. Therefore, for made by the assessee for booking of the flat. Therefore, for allocation of addition in all three assessment years matter is allocation of addition in all three assessment years matter is allocation of addition in all three assessment years matter is restored to the file of the Ld. Assessing Officer for verification and restored to the file of the Ld. Assessing Officer for verification restored to the file of the Ld. Assessing Officer for verification then decide the amount of addition accordingly. Since, the ground then decide the amount of addition accordingly. Since, the ground then decide the amount of addition accordingly. Since, the ground in appeal of the assessee for assessment year 2012 in appeal of the assessee for assessment year 2012-13 and 2013 13 and 2013-14 are identical with ground raised in assessment year 2011 ground raised in assessment year 2011-12 and ground raised in assessment year 2011 therefore following our finding above therefore following our finding above, the appeals in a the appeals in assessment year 2012-13 and 2013 13 and 2013-14 are also allowed partly for statistical 14 are also allowed partly for statistical purposes.
In the result, the appeal In the result, the appeals of the Revenue as well as appeals of of the Revenue as well as appeals of the assesee are partly allowed for statistical purposes. the assesee are partly allowed for statistical purposes. the assesee are partly allowed for statistical purposes.
Order pronounced under Rule 34(4) of the Order pronounced under Rule 34(4) of the Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 23/03/2023. /2023. Sd/- Sd/- - (PAVAN KUMAR GADALE PAVAN KUMAR GADALE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 23/03/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to :
1. 1. The Appellant 2. The Respondent.
3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, BY ORDER,
M/s Samridhi Dealers Pvt. Ltd. 15 2207 to 2209/M/2019 ITA Nos. 2918, 2207 to 2209/M/2019