THE ACIT, CENTRAL-2, INDORE vs. M/S. SILVER REALITIES & INFRASTRUCTURE PVT. LTD., INDORE

1 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE

BEFORE SHRI RAJPAL YADAV HON'BLE VICE PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER (Virtual hearing)

IT(SS)A Nos.259 to 269/Ind/2016 & ITA No.1330/Ind/2016 Assessment Years: 2010-11 to 2013-14

ACIT, Central-2 M/s. Silver Realities & Indore Infrastructure Pvt. Ltd., Indore बनाम/ (Appellant) (Respondent) Vs. P.A. No. AAJCS 3841 D

Appellant by Shri Rajib Jain, CIT-DR Respondent by S/Shri C.P. Rawka & Venus Rawka, CAs

Date of Hearing: 01.09.2021 Date of Pronouncement: 30.09.2021 आदेश / O R D E R PER MANISH BORAD: The above captioned appeals at the instance of Revenue are directed against the common order of Ld. Commissioner of Income Tax(Appeals)-III, [in short ‘CIT(A)’], Indore dated 28.09.2016 passed in common assessment order u/s

2 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 153A/143(3) dated 26.3.2015. In these appeals, the Revenue has

raised the grounds of appeals as under:

Grounds of appeal in IT(SS)A No.259/Ind/2016 (A.Y. 2010-11) 1. “On the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting the addition made by the AO of Rs.7,46,83,600/- on account of undisclosed receipts of ‘on-money’ received from sale of flats without appreciating the facts and evidences brought into light by the A.O. during assessment proceeding.”

Grounds of appeal in IT(SS)A No.260/Ind/2016 (A.Y. 2011-12) 1. “On the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting the addition made by the AO of Rs.12,03,50,000/- on account of undisclosed receipts of ‘on- money’ received from sale of flats without appreciating the facts and evidences brought into light by the A.O. during assessment proceeding.”

Grounds of appeal in IT(SS)A No.261/Ind/2016 (A.Y. 2012-13) 1. “On the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting the addition made by the AO of Rs.49,58,74,800/- on account of undisclosed receipts of ‘on- money’ received from sale of flats without appreciating the facts and evidences brought into light by the A.O. during assessment proceeding.” 2. Grounds of appeal in ITA No.1330/Ind/2016 (A.Y. 2013-14) 1. “On the facts and in the circumstances of the case the Ld. CIT(A) erred in deleting the addition made by the AO of Rs.39,10,91,600/- on account of undisclosed receipts of ‘on- money’ received from sale of flats without appreciating the facts and evidences brought into light by the A.O. during assessment proceeding.”

deletion of the additions made by the Assessing Officer on

account of undisclosed receipts of ‘on-money’ received

3 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 from sale of flats. As all four appeals relate to the same

assessee and the issue raised is common, the same were heard

together and are being disposed off by this common order for sake

of convenience and brevity. Briefly stated facts as culled out from

the records are that the assessee co. constructed and sold

residential units and commercial space in the Silver Spring

Township spread over 139 acres situated at the Bypass, A.B.

Road, Indore. During search and seizure action on the Jhaveri

Group, certain documents regarding the receipt of “on-money”

were found and seized in respect of the project “Silver Mansion”

and “Silver Mansion Extension” developed by the Jhaveries

showing the sale of plots in both these projects @1500/- per sq.

ft. The Assessing Officer relied on these evidences. The post

search enquiries were conducted in the following projects: -

a. “Shikharji Project” developed by another member of the Jhaveri Group, Smt. Komal Jhaveri. b. M/s. Ajitnath Reality P. Ltd. c. M/s. Padamprabhu Infrastructure P. Ltd.

In the post search enquiries conducted in the above cases, some

of the purchasers of the plots admitted that they have paid “on-

money” for purchase of the plots. Thus, the Assessing Officer

noted that the assessee co. did not show correct receipts in the

4 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 books of account and formed the view that the rate of the

constructed housing units in the assessee’s projects cannot be

less than Rs.1500/- per sq. ft. i.e. the rate at which developed

plots were sold in “Silver Mansion” and “Silver Mansion

Extension” projects. The Assessing Officer, referring to the

summons issued to some Shri Ramesh Chandra Gupta, Garima

Chelani and Kokila Chelani, took the average sale price as per

books of account to be Rs.1100 per sq. ft. and estimated that

Rs.400 per sq. ft. was suppressed and computed the “on-money” Rs.7,46,83,600/-, Rs.12,03,50,000/-, at Rs.49,58,74,800/- and Rs.39,10,91,600/- for the assessment years 2010-11 to 2013-14, respectively.

assessment years under consideration before the ld. CIT(A) and

the ld. CIT(A), having gone through facts and circumstances of

the case in the light of judicial pronouncements as noted in the

impugned order, deleted the additions made by the Assessing

Officer.

5 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 4. Being aggrieved, the Revenue is in appeals before this

Tribunal for all the present assessment years.

Officer. Per contra, the ld. counsel for the assessee referred and

relied on the findings of Ld. CIT(A) and submitted that the

additions based on the documents found during search were not

related to assessee company as all the group concerns of Jhaveri

Group are engaged in the business of development of land and

sale thereof after plotting, whereas, the assessee company has

not sold a single inch of land. It’s main and core business is to

construct residential and commercial units. The seizure made in

other cases has no bearing whatsoever in the assessee’s case.

Learned Counsel for the assessee also submitted that the

Assessing Officer referred to the summons issued to some Shri

Ramesh Chandra Gupta, Garima Chelani and Kokila Chelani.

However, the assessee has no business transactions with these

persons. Further, no single incriminating document pertaining to

assessee was found/seized from the said premises. The operation

under section 132 was simultaneously carried out in the project

office of the company and there also, no incriminating document

was found or seized.

6 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

the records placed before us. We find that the Ld. CIT-DR, except

placing his reliance on the findings of the Assessing Officer, could

not bring any corroborative material on record to justify the

additions made by the Assessing Officer. We find that assessee is

a private limited company incorporated by Shri Mukesh Jhaveri

and Shri Abhishek Jhaveri on 27.09.2005 and engaged in the

business of construction of residential and commercial units and

sale thereof of apartment, row houses, bungalows and shops.

Search & seizure operations u/s 132 were carried out on

21.09.2012 on the business as well as residential premises of the

Jhaveri Group of Indore of which assessee company is a part.

Notices u/s 153A were issued and in compliance to the same,

assessee filed returns for respective years u/s 153A. Notices u/s

143(2) were issued on 25.06.2014 along with the questionnaire

u/s 142(1). All the notices and hearings were duly complied by

assessee from time to time along with the books of accounts,

bank statements and other documents which were produced

before the Assessing Officer. After completing the assessment

proceedings u/s 153A r.w.s. 143(3), the Assessing Officer passed

assessment order whereby he made the following additions:-

7 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

A.Y. Amount 2010-11 Rs. 7,46,83,600/- 2011-12 Rs. 12,03,50,000/- 2012-13 Rs. 63,22,72,745/- 2013-14 Rs. 63,82,56,646/-

and submissions thereof in the light of the judicial

pronouncements deleted the additions observing as under:

“5.1 I have gone through the assessment order and the submissions made by the appellant. The appellate company has constructed and sold residential units and commercial space in the Silver Spring Township spread over 139 acres situated at the Bypass, A.B. Road, Indore. During the search and seizure action on the Jhaveri Group certain incriminating documents regarding the receipt of ‘on money’ were found and seized in respect of the projects ‘Silver Mansion’ and ‘Silver Mansion Extension’ developed by the Jhaveries showing the sale of plots in the said two projects @ Rs. 1500/- per sq. ft. The Assessing Officer has relied on this evidence seized in respect of the projects ‘Silver Mansion’ and ‘Silver Mansion Extension’ and the post search enquiries conducted in respect of the following projects:- (i) ‘Shikharji’ project developed by another member of the Jhaveri Group, Smt. Kokila Jhaveri. (ii) M/s Ajitnath Reality Pvt. Ltd. (iii) M/s Padmaprabhu Infrastructure Pvt. Ltd. In the post search enquiries conducted in the above cases some of the purchasers of the plots admitted that they have paid on money for purchase of the plots. The Assessing Officer held that on the basis of evidences seized in respect of ‘Silver Mansion’ and ‘Silver Mansion Extension’ projects and the post search evidences gather regarding acceptance of on money by the Jhaveri Group in its various projects, the assessee company has not shown correct receipts in its books of accounts. The Assessing Officer took the view that the rate of the constructed housing units in the assessee's project cannot be less than Rs. 1500/- per sq. ft., the rate at which developed plots have been sold in ‘Silver Mansion’ and ‘Silver Mansion Extension’ projects. The Assessing Officer took the average sale price as per the books of accounts to be Rs. 1100/- per sq. ft. and estimated that Rs. 400/- per sq. ft. has been suppressed and made the year wise computation of the on money as under:-

8 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

A.Y. Booked Total receipts as Actual Receipts Un money per Area (In @Rs.1500/sq.ft. received assessee Sq. Ft.) (Col.3 - Col.2) @Rs.1100/sq.ft. (1) ( (3) (4) 2 ) 2010-11 186709 20,53,79,900 28,00,63,500 7,46,83,600 Z011-12 300875 33,09,62,500 45,13,12,500 12,03,50,000 2012-13 1239687 1,36,36,55,700 1,85,95,30,500 49,58,74,800 Z013-14 977729 1,07,55,01,900 1,46,65,93,500 39,10,91,600 2,97,54,99,998 4,05,74,99,997 1,08,19,99,996

The appellant company was started by the Jhaveris on 27/09/2005. In November, 2005 Fire Capital Fund of Mauritius invested in the appellant company and acquired 49% shares. Therefore, it is evident that the appellant company does not wholly belong to the Jhaveri Group. The second point to be considered is that the appellant company has developed the project ‘Silver Spring Township’ which has multiple housing options of 2, 3, 4 and 5 bedroom units, 3 types of Villas, Town Houses, Terrace Cottages, Duplexes and Commercial units. On the other hand all the projects of the Jhaveri Group are in respect of development of land and sale of plots. The Assessing Officer has relied on the evidences found and seized in respect of the ‘Silver Mansion’ and ‘Silver Mansion Extension’ projects and the post search enquiries conducted in respect of various projects of the Jhaveri Group which are for development of land and sale of plots.

In the appeal proceedings the appellant pointed out that the Assessing Officer has adopted the average rate of Rs. 1100/- per sq. ft. on the approximate figure of total area sold/booked of 27 lacs sq. ft. upto 31/03/2013 which is not as per the actual sales declared in the P&L account by the appellant in A.Ys 2010-11 to 2013-14 and this itself makes it evident that the additions have been made without examining the actual details submitted to the Assessing Officer. The appellant also submitted the details for A.Ys 2010-11 to 2013-14 regarding the sale price of the various categories of sales made i.e. row houses, apartments,

9 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

terrace cottage, town house etc.; the built up area and the circle rates for the different categories. It is seen that the appellant has not booked any sale below the rates prescribed by the Circle Rate of Authority i.e. Sub-Registrar of Indore. The details are as under :-

Financial Year 2009-10 Product Name Sale Value Guideline Value Size Villa Ruby 1.00 to 1.21 Crore 5770445/- Plot 4500 sq. ft. and Built Up 4456 sq. ft. Villa Pearl 66.5 lacs 3547998/- Plot 2700 sq. ft. and Built Up 2893 sq. ft Mid-rise apartments 41.5 lacs 2329680/- 2089 sq. ft. Built Up Area Terrace Cottage 61 lacs 3514200/- 3386 Sq. Ft. Built Up (1667 Sq. Ft. sold out) Town House 55 lacs 2579650/- Plot 1635 sq. ft. and Built Up 2539 sq. ft. Flats Rs. 1700/- per sq. ft. Rs. 1115 per sq. ft. -

Financial Year 2010-11 Product Name Sale Value Guideline Value Size Villa Ruby 1.00 - 1.21 Crore 5979553/- Plot 4500 sq. ft. and Built Up 4456 sq. ft. Villa Pearl 66.5 lacs 3673463/- Plot 2700 sq. ft. and Built Up 2893 sq. ft Mid-rise apartments 41.5 lacs 2523820/- 2089 sq. ft. Built Up Area Terrace Cottage 61 lacs 3807050/- 3386 Sq. Ft. Built Up Town House 60 lacs 2655618/- Plot 1635 sq. ft. and Built Up 2539 sq. ft. Flats 1700/- per sq. ft. 1208/- per sq. ft. -

Financial Year 2011-12 Product Name Sale Value Guideline Value Size Villa Ruby 1.10 - 1.35 crore 7010997/- Plot 4500 sq. ft. and

10 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

Built Up 4456 sq. ft. Villa Pearl 85 lacs 4306618/- Plot 2700 sq. ft. and Built Up 2893 sq. ft Mid-rise apartments 50 lacs 2912100/- 2089 sq. ft. Built Up Area Terrace Cottage 61 lacs 4392750/- 3386 Sq. Ft. Built Up Town House Sold Out 3110884/- Plot 1635 sq. ft. and Built Up 2539 sq. ft. Flats 1875/- per sq. ft. 1394/- per sq. ft. -

Financial Year 2012-13 Product Name Sale Value Guideline Value Size Villa Ruby 1.20 - 1.51 crore 666u we/- Plot 4500 sq. tt. and Built Up 4456 sq. ft. 65 lacs 5316166/- Villa Pearl Plot 2700 sq. ft. and Built Up 2893 sq. ft Mid-rise apartments 50 lacs 3882800/- 2089 sq. ft. Built Up Area I errace Cottage b1 lacs 3098600/- Plot 1635 sq. ft. and Built Up 2539 sq. ft. I own House Sold Out 3794074/- -----do---- i-Iats Z500/- per sq. ft. 1858/- per sq. ft.

At this stage, before drawing a final conclusion, it is relevant and necessary to consider the ratios of the following decisions.

The Hon'ble High Court of Delhi in the case of CIT vs. Anil Bhalla (2010) 322 ITR 191 (Del.) observed that no independent material or evidence had been brought on record by the AO to establish that the notings/jottings recorded on the loose sheet or paper represented an unaccounted transaction, then the explanation of the assessee should be accepted. In this situation, the Tribunal was right in holding that the loose sheet or document does not represent any investment or expenditure over and above the books of accounts of the assessee out of income alleged to be earned from unaccounted sources.

11 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

T he Hon'ble ITAT Hyderabad ‘B’ Bench in the case of DCIT vs. M. Aja Babu following the decision of Hon'ble High Court of Delhi in the case of CIT vs. Anil Bhalla (supra), CIT vs. Dinesh Jain (HUF) 211 Taxman 23 (Del) and CIT vs. Jaipal Aggarwal 212 Taxman 1 (Del), ITAT Mumbai in the case of ACIT vs. JP Morgan India Pvt. Ltd. 46 SOT 250(Mumbai), held that the addition made by the AO based on the loose paper, which is not a conclusive evidence and therefore, the same is not sufficient for making the addition. The Tribunal also held that no addition can be made on the basis of dumb document/notebook/loose slips in absence of any other material to show that the assessee has made investment in land. The relevant observations and findings of the Tribunal in this case read as under:-

17 We have heard the arguments of both the padies, perused the record and have gone through the orders of the authorities below. In this case, the addition was made by the AO based on the loose paper and the same, in our view, cannot be considered as conclusive evidence. As held by the CIT(A) in the impugned order ”except relying , the notings in the loose slips, no attempt has been made to corroborate the notings with independent evidence. The parties to the ’transaction particularly the vendor has not examined. In every transaction there is a circle concerning two padies. /t is not known whether the vendor has disclosed the consideration as noted in the diary. Therefore, merely on the basis of presumption and some corroborated notings additions cannot be made.” In our opinion, the deletion of addition by the CIT(A) is justified and no interference is called for in the order of the CIT(A). The following cases suppod the action of the CIT(A):

12 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

17.1 In view of the above discussion, we are of the view that the addition made by the Assessing Officer based on the loose paper, which is not a conclusive evidence and, therefore, the same is not sufficient to make the addition. In our opinion, no addition can be made on the basis of dumb documents/note book/loose slips in the absence of any other material to show that the assessee has made investments in land. Noting on the note book/diary/loose sheets are required to be suppoded/corroborated by other evidence and should also include the statement of a person who admittedly is a pady to the noting and statement from all the persons whose names there on the note book/loose slips and their statements to be recorded and then such statement undoubtedly should be confronted to the assessee and he has to be allowed to cross examine the padies. The vendor has not examined in this case. Therefore, we do not find any infirmity in the order of the CIT(A) in directing the Assessing Officer to delete the addition made on the basis of loose paper and the order of the CIT(A) is hereby upheld dismissing the grounds raised by the revenue on this issue.

Hon'ble Punjab & Haryana High Court in the case of CIT vs. Atam Valves (P) Ltd. (2011) 332 ITR 468 (P&H) held that when the loose papers did not relate to certain payments during the relevant period in question, then in absence of any supporting material or evidence, these loose sheets by itself were not found to be sufficient enough for making a sustainable and justified addition.

ITAT Delhi ‘E’ Bench in the case of Atul Kumar Jain (1999) 64 TTJ 786 (Delhi) vs. DCIT held that when the seized papers have being not corroborated by any independent evidence it cannot be considered as a reliable document or acceptable piece of evidence as a proof of investment in the house property and therefore, these kind of documents/papers are liable to be ignored and addition made on the basis of such document is not sustainable and in accordance with law.

In CIT v/s Kulwant Rai (2007) 291 ITR 36 (Del) the ruling of the Supreme Court in Dhakeswari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC) was relied upon. The Supreme Court held that even though Income Tax Authorities including the Assessing Officer has unfettered discretion and not strictly bound by the rules and pleadings as well as materials on record and is legitimately entitled to act on the material which may not be accepted as evidence, nevertheless such discretion does not entitle them to make

13 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

a pure guess and base an assessment entirely upon it without reference to any material or evidence at all. Given the above state of law the Delhi High Court stated that it has no hesitation in so concluding, since the document seized was both undated and unsigned and even taken at face value did not lead to further enquiry on behalf of the AO. ITAT, Hyderabad in ITA 329/Hyd/2012 dated 04.01.2014 in the case of DCIT vs. Shri Babu Rao where in Para 26 to 29 held thus:-

“26. It is clear from the above provisions of section 153A that the income of the assessee in case of a person where search is initiated u/s. 132, the books of account or other documents or any assets are requisitioned u/s. 132A, the Assessing Officer after issue of a notice to furnish income of the assessee in respect of each assessment year falling within 6 assessment year immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition made, the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such 6 assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisitioned, as the case may be, on bringing on record the material to show that there is undisclosed income of the assessee. In other words, there should be material on record to show that the income is assessed on the basis of material/ evidence in hands of the Assessing O/Nicer.

14 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

and led nowhere. The CIT(A) rightly came to the conclusion that it cannot be acted upon and deleted the addition.

The Hon'ble ITAT Jabalpur in the case of ACIT vs. Satyapal (2007) 295 ITR (AT) 352 (Jab.) held as under:- “The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the rele vant assessment year. Any gap in the various components as mentioned in section 4 of the Income Tax Act must be filled up by the Assessing Officer through investigations and correlations with the other material found either during the course of the search or on investigation. As a result, we hold that document No. 7 is a non- speaking document.

Hon'ble Delhi High Court in the case of CIT vs. S.M. Agrawal 293 ITR 043 (Del) held that unless and until the contents of the document are proved against the person, the possession of the document or handwriting of that person on such document by itself could not prove the contents of the document. It was further held that the document recovered during the course of search from the assessee was held to be dumb document and the addition on the basis of the same is not sustainable.

The Hon'ble Delhi High Court in the case of CIT vs. Vatika Landbase (P.) Ltd. (2016) 383 ITR 320 (Del) held that the addition made by the Assessing Officer on the basis of documents found and seized from the computer of an employee of the assessee company showing that the rate of sale of floor space in commercial was higher than the rate shown by the assessee was not sustainable as the rates

15 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016

mentioned in the seized documents did not represent any completed or materialized transaction. Moreover, the Assessing Officer did not make any enquiry from the said employee or from the buyers of flats in respect of actual price paid by them. The Hon'ble Delhi High Court in the case of CIT vs. Ved Prakash Choudhary (2008) 305 ITR 245 (Del) has held that in the absence of corroborative material, the addition made on the basis of sketchy document which was unproved cannot be sustained in law. The Hon'ble Delhi High Court in the case of CIT vs. Vivek Agrawal (2015) 231 Taxman 392 (Del) has held that unless the amounts stated the document were actually paid it cannot be presumed that the amount mentioned in the sale deed was not correct. The Hon'ble M.P. High Court in the case of CIT vs. Kantilal Prabhudas Patel (2008) 296 ITR 568 (MP) has held that the addition cannot be made on guess work or estimates.

On careful consideration of the entire material placed before me, inter alia the assessment order and the submissions made in the appeal proceedings, it is seen that the Assessing Officer has simply proceeded to make additions on the basis of the documents found and seized in respect of the ‘Silver Mansion’ and ‘Silver Mansion Extension’ projects and the post search enquiries conducted in respect of various projects of the Jhaveri Group. No incriminating document was found and seized during the course of the search showing the receipt of on money for the “Silver Spring Township” project of the appellant company. No effort has been made by the Assessing Officer of making any investigation or inquiry to substantiate his theory of suppression of sales. The Assessing Officer has estimated the unaccounted sale consideration @ Rs. 400/- per sq. ft. but has not brought out any corroborative material to show that the inference made by him is correct and sustainable. It is also very pertinent to note that the appellant company is not wholly owned by the Jhaveris and its nature of business is different from that of the other projects of Jhaveris and the Assessing Officer has not disputed this fact. Therefore, to estimate the additions on the basis of incriminating documents found in the other projects of the Jhaveri Group is not an acceptable, sustainable and justified approach.

16 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 In view of the facts and circumstances of the case and the discussions in the preceding paragraphs, the addition of Rs. 7,46,83,600/-, Rs. 12,03,50,000/-, Rs. 49,58,74,800/- and Rs. 39,10,91,600/- made for A.Ys 2010-11, 2011-12, 2012-13 and 2013-14 respectively on account of undisclosed receipts is hereby deleted. Ground Nos. 1,2,3,4 and 5 for A.Ys 2010-11, 2011-12, 2012-13 and 2013-14 are allowed.”

present case, we find that the entire procedure of additions in

assessee’s case was based on the documents found during search

which related to other group companies named Silver Mansion,

Silver Mansion Extension and have no any relevance or relation

with the assessee co. as none of the concerns, belonging to

Jhaveri Group, have the line of business in which the assessee

company deals. We find that all the group concerns of Jhaveri

Group are engaged in the business of development of land and

sale thereof after plotting, whereas, the assessee company has

not sold a single inch of land. It’s main and core business is to

construct residential and commercial units. The units are in the

shape of apartment, row houses, bungalows and shops. Learned

Counsel for the assessee explained that the rate fixed for the

purpose of sale is as per the deal struck by the assessee with the

prospective buyer and which is in unit of per sq Feet and for the

purpose of calculation of saleable area, ingredients of space

17 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 utilized in the construction of common area, roads, clubs,

gardens, staircases and parking etc. are apportioned in the

number of unit. Resultantly, a customer is required to pay 30%

more than the carpet area bought by him. The Assessing Officer

wrongly estimated rate per square feet, by comparing the rates

adopted in the adjoining township, ‘Silver Mansion’, is a project

of Jhaveri Group, totally disjoint with the assessee company. The

said project, deals in the sale of plot only. Therefore, the

comparison made by the Assessing Officer is baseless. Further,

the Assessing Officer elaborated, the seizure made, in other cases

of Jhaveri Group which has no bearing in the assessee’s case but

the Assessing Officer without establishing the relevance by

bringing any cogent material made the additions. Similarly,

some enquires conducted in the cases of Shikharji, Ajitnath

Reality Pvt. Ltd. and Padmaprabhu Infrastructure Pvt. Ltd. were

irrelevant as is evident from the computation of income of the

assessee. Even otherwise, the issue of M/s Shikharji is before the

Settlement Commission and therefore, the comparing the case of

Shikarji with that of assessee is unjustified. We find that the

Assessing Officer failed to pinpoint a single mistake in the books

of accounts maintained by the assessee. He could not pin-point

18 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 any enquiry made in the assessee’s case from which adverse

inference could be drawn. He did not conduct any enquiry in the

assessee’s case which is apparent from the fact that no such

details of enquiry have been incorporated in the assessment

order. We find that the assessee filed complete details before the

Assessing Officer in respect of sale and also the details product-

wise of Phase one & two. We find that the assessee’s books of

accounts are audited and no any incriminating document were

found relating to the assessee company during the course of

search and no any defect to the maintenance of the books of

accounts were noticed by the search team and the Assessing

Officer during the course of Assessment proceedings . Therefore,

we are of the view that the additions made were uncalled for. Our

view is supported by the ratio laid down in the following judicial

pronouncements:

19 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 6. Commissioner Of Income Tax Vs. Gurinder Singh Bawa, High Court Of Bombay, (2016) 386 Itr 0483 (Bom) 7. Principal Commissioner Of Income Tax Vs. Saumya Construction P. Ltd., High Court Of Gujarat, (2016) 387 Itr 0529 (Guj) 8. Principal Commissioner Of Income Tax Vs. Dharampal Premchand Ltd., High Court Of Delhi, (2017) 99 Cch 0202 Delhc

the summons issued to some Shri Ramesh Chandra Gupta,

Garima Chelani and Kokila Chelani are concerned, we find that

the Assessing Officer could not bring any cogent material to

establish that the assessee has business transactions with these

persons. Therefore, the observations are baseless. Further, so far

as the Assessing Officer’s observation in respect of placing a

figure of Rs. 1500/- per square feet is concerned, we find that the

learned Counsel for the assessee explained that M/s Silver

Realities and Infrastructure Pvt. Ltd was incorporated by Shri

Mukesh Jhaveri and Abhishek Jhaveri on 27.09.2005 and later

on in Nov 2005, Fire Capital Fund belonging to Republic of

Mauritius joined hands with Jhaveris. Resultantly, 51% shares

are held by Jhaveris and 49% by Fire Capital Fund. The

investment made by Fire Capital Fund is from US Investors

routed through Mauritius. Therefore, the observations made by

20 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 the Assessing Officer are not justified as the assessee co. does

not belong to Jhaveri Group accordingly. As explained above, we

find that the assessee started its projects being incorporated by

Shri Mukesh Jhaveri and Abhishek Jhaveri on 27.09.2005,

whereas the seized documents relating to search & seizure

operations u/s 132 carried out on 21.09.2012 on the business as

well as residential premises of the other group concerns/projects

named Silver Mansion, Silver Mansion Extension. Thus, it is

clear that the assessee’s projects are relating to much prior

period to the period of the projects of Silver Mansion, Silver

Mansion Extension as the date of search is 21.09.2012.

Therefore, the observations made by the Assessing Officer are not

justified as the projects of the assessee co. have nothing to do

with the projects of the Silver Mansion, Silver Mansion

Extension. Further, we find that the Assessing Officer made the

addition of Rs.37,07,335/- on the basis of the aforesaid seized

document and the same has been owned up by Shri Mukesh

Jhaveri and Shri Abhishek Jhaveri in 50:50 ratio and paid due

taxes which has been accepted by the Settlement Commission

vide order dated 22.8.2016. Therefore, the ld. CIT(A) had deleted

the addition of Rs.37,07,335/-. Thus, we find that the tax in

21 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 respect of the seized document has been paid and the seized

document has no relevance so far as the case of the present

assessee is concerned.

the light of the judicial pronouncements (supra), we find that no

single incriminating document pertaining to assessee was found

from the premises of other concerns as narrated above showing

that any “on-money” was received by the assessee. Further, the

operation under section 132 was simultaneously carried out in

the project office of the company and there also no incriminating

document was found or seized as is evident from the contents of

the Assessment Order itself which show no reference to

incriminating documents or undisclosed assets before making

any addition for alleged “on-money”. Before us, ld. CIT-DR could

not controvert the findings of the ld. CIT(A) by bringing any

contrary material on record . Accordingly, we do not find any

reason to interfere with the findings recorded by the ld. CIT(A).

The same is confirmed. Thus, the only issue raised in the appeals

of the Revenue for the assessment years 2010-11 to 2013-

14, respectively, is dismissed.

22 Silver Realty SS 259, 260, 261 and ITA 1330 of 2016 Finally, the appeals filed by the Revenue i.e. IT(SS)A

Nos.259 to 261/Ind/2016 and ITA No.1330/Ind/2016 are

dismissed.

Order was pronounced as per Rule 34 of I.T.A.T., Rules 1963 on 30.09.2021.

Sd/- Sd/- (RAJPAL YADAV) (MANISH BORAD) VICE-PRESIDENT ACCOUNTANT MEMBER

Indore; �दनांक Dated : 30/09/2021 !vyas! Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar, Indore