VEDICA PROCON PVT. LTD(RENAME ISCON CITY CENTRE PVT. LTD,AHMEDABAD vs. THE ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD

आदेश/O R D E R

PER BENCH:

The above appeals and Co’s have been filed by the Assessee and the Revenue against the orders of the Ld. Commissioner of Income-Tax (Appeals), Ahmedabad, arising in the matter of the Assessment Order passed u/s 143(3)/ 153C of the Income Tax Act 1961 (here-in-after referred to as "the Act") relevant to the Assessment Years as mentioned in the cause title. Since, the issues involved in all these appeals are identical, we proceed to dispose of all the appeals by this common order for the sake of convenience and brevity.

First, we take up IT(SS)A No. 32/AHD/2020, an appeal by the assessee for AY 2014-15.

3 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 are not material as any way they become final only at the time of handing over of ; the possession, 4. The Ld. CIT (A) erred in law and on facts in not considering the facts that the material found and seized from third party being independent real estate brokers namely (i) Shri Raju Jethanand Tekwani and (ii) Shri Dharmendra Jethanand Bhambhani for which the provisions of section 132(4) r.w.s 292C of the Act is not applicable in the case of the appellant company. 5. The Ld. CIT(A) erred in law and on facts by not treating the material found and seized from the premises of third party brokers Shri Raju Jethanand Tekwani and Shri Dharmendra Jethanand Bhambhani being dumb document in the case of the appellant company in absence of any cogent material and/or independent clinching evidences being brought on record in respect of the alleged cash receipts of booking by the appellant company in view of the decision of the Hon'ble Income Tax Appellate Tribunal, Ahmedabad "C" Bench in the case of Nishant Construction Pvt.Ltd vs. AC1T, Circle 5, Ahmedabad, ITA No. 1502/Ahd/2015 (A.Y. 2011-12) dated 14.02.2017, reported in 57 CCH 83 (2019). The appeal filed by Revenue against above order before Hon'ble Gujarat High Court is dismissed vide order dated 09/04/2018 in Tax Appeal No. 898 of 2017 reported at [2019] 101 taxmann.com 179 (Guj) and further, SLP filed against decision of High Court was dismissed reported at [2019] 101 taxmann.com 180 (SC). The Ld. CIT(A) has erred in law and on facts in not following the principles 6. and ratio laid down by the Hon'ble Apex Court in the case of C.B.I. Vs. V.C. SHUKLA & Others reported in 3 Supreme Court cases 410 (1998) and Common Cause (A Registered Society) and Others vs. Union of India and others [2017] 77 taxmann.com 245 (SC). The appellant company reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing.

4 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 Patel, Raju Tekwani and Dharmendra Bhambhani on 25-02-2016 which was concluded on 19-04-2016. The assessee though is part of the group, but it was not subjected to search and seizure operation under section 132 of the Act. The assessee during the relevant time comprises of three directors namely Shri Jayesh T Kotak, Jateen Gupta, and Amit Gupta. The above said two individuals out of three who were subject to search & seizure operation namely Shri Raju Tekwani and Dharmendra Bhambhani are brokers and Shri Sanjay Patel is an accountant, associated with the Iscon Group and keep records of the assessee company as well as other group companies.

4.1 As a result of search and seizure operation, there were unearthed various seized materials such as loose papers, diaries, digital evidence from the premises of Shri Raju Tekwani, Dharmendra Bhambhani and Shri Sanjay Patel which were having the direct nexus with the assessee. The details of the documents/materials seized during the search and survey operation at the place of three individuals mentioned above had been inventoried. The gist of the same is recorded on pages 3 to 6 of the assessment order.

5.1 The AO based on seized documents/ materials further observed as detailed under: A. The assessee under the name of Iscon VIP project was constructing multistory commercial building comprising of 4 blocks (A, B, C and D) and there were 3 floors in each block (Ground, First and Second) which was located at New Cloth Market, Raipur, Ahmedabad.

5 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 B. The cash transactions relating to this under construction project were operated and controlled by Shri Dharmendra Bhambhani, Sanjay Patel and Govindbhai Thakkar whereas Raju Tekwani was playing the role of booking of flats/shops. C. The loose papers bearing Sr. Nos. 71 to 87 of Annexure A-86 seized from the residential premises of Shri Raju Tekwani contained the details of the units sold, booking amount, name of the clients, area, cheque payment as P-1 and cash payment as P-2. D. Shri Raju Tekwani has also accepted in his statement recorded u/s 132(4) of the Act during the search proceedings that the documents/materials seized from his residence are related to the VIP Iscon Project to be developed by the assessee company. E. As per the impugned seized documents, there were the total booking of 140 shops having area of 94,612 square feet against the consideration of Rs. 190,57,72,201/- only. A sum of Rs. 37,14,80,775/- out of the total sale consideration was recorded in column P-2 of the seized documents which implies that the element of cash amounting to Rs. 37,14,80,775/- was received. F. Similarly, the loose papers bearing Sr. No. 110 to 116 of Annexure A-24 seized during the search proceeding from the residential premises of Shri Dharmendra Bhambhani were also containing the same as details of floor, block, area, name of client where 158 shops were mentioned with the payment of Rs. 7.9 crores in column ‘before’ means already received.

G. Likewise, the loose papers bearing Sr. Nos. 104 and 105 of Annexure BS-1 seized from the residential premises of Shri Sanjay Patel described the details of practice of taking on-money on behalf of the Iscon Group. On the same seized documents, the cash payments of Rs. 76,00,000/- and Rs. 37,50,000/- in the name of Shri Yogesh Pujara, a person related to Iscon Group were also recorded. G. A pdf file with title “vip-disc-pdf” was also found from the laptop seized from Shri Sanjay Patel which was in the format of the account maintained

6 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 in the tally software. The name of the account was recorded as “Cash Iscon Commercial-Raipur” and the entries were recorded from 01-01-2014 to 30- 06-2014 depicting the payment of Rs. 5,96,57,400/- mostly to Shri Raju Tekwani and Shri Dharmendera Bhambhani. H. However, Shri Sanjay Patel has not offered any explanation either during the search proceedings or even post search proceeding too. On the contrary, the president of the company namely Shri Venkataramna and director of M/s J P Iscon Private Limited (main company of Iscon Group) has filed the letter accepting that all the materials/documents seized during the search proceeding pertains to M/s J P Iscon Private Limited and its Group companies and the same will be used during the assessment proceedings of respective companies. I. There were recovered many customer diaries during search and seizure operation from the residential premises of Shri Raju Tekwani and Shri Dharmendera Bhambhani, marked as Annexure A-2, A-36, A-19, A-34, and A-86 etc, which were written in coded form and the dates were recorded in some of the diaries of 9 years back to disguise the relevant date of transaction. These diaries were. decoded and co-related with other documents such as photo/image recorded in the phone of Shri Raju Tekwani and his son Pawan Tekwani which evidences that the transactions were carried out in the year under consideration relating to VIP Iscon project. J. With respect to the customer diaries as discussed above, Shri Dharmendra Bhambhani accepted that the transaction recorded in the said diaries are the actual transactions of receipts and payments of cash. He also submitted through his reply dated 17-06-2016 that the diaries are the records of booking of the relevant units by the clients/customer in the VIP Iscon project. K. Shri Dharmendra Bhambhani further submitted that the Iscon Group was not accepting the payment by cheque as the land was in dispute. Therefore, he collected the cash from the buyer after providing the diaries to them.

7 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 The cash collected was handed over to the employees/representatives of the Iscon Group after taking their signature. L. There was phone records of Shri Pawan Tekwani s/o Raju Tekwani depicting the details of cash amount in respect to the VIP Iscon Project. 5.2 In view of the above, the AO believed the units were mostly booked by the brokers/investors/customers before the project came into existence. As such, the assessee has relinquished its right over the units allocated to the brokers/customers/investors after accepting the cash payment from them. As per the AO, the assessee, thus, was somewhere involved in sale of its right over the units and the same has been covered under the virtual sales which is different from actual sale.

5.3 As the documents/loose paper/other materials were seized during search in the cases of Shri Sanjay Patel, Raju Tekwani and Dharmendra Bhambhani which were having the bearing on the determination of total income of the assessee for the year under consideration, therefore, the AO issued the notice u/s 153C of the Act dated 31-03-2018. In response to the notice the assessee has filed its return of Income on 26-04-2018 declaring loss of Rs. 37,129/- only. Based on the above seized documents, the AO vide notice dated 06-12-2018 sought clarification from the assessee.

5.4 The assessee in response to such notice vide letter dated 11-12-2018 submitted that in the year under consideration, it was involved in acquiring a freehold land belonging to M/s Omex Investors Limited, through the bidding process, admeasuring 13895 sq. meters situated at town planning scheme No. 18, FP No. 32/P, bearing survey No. 25, 27/b/a, 31, 38 Moje Raipur, Raipur Cloth Market, Ahmedabad. The said land was auctioned by the official liquidator in the direction of the Hon’ble Gujarat High Court vide order dated 17-12-2013.

5.5 The assessee was one of the highest bidders for the said land. As such, the bid price quoted by the assessee was Rs. 148 Crores which was the highest bidding. Thereafter, the transfer process of the said land was initiated with the

8 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 instructions for the payment of the said land through letter issued by the official liquidator dated 19-12-2013.

5.6 However, for the payment of last instalment of Rs. 106.50 crores due on 16-04-2014, the assessee filed an application before the Hon’ble Gujarat High Court requesting to extend the time to pay till 31-07-2014 and consequently the Hon’ble Gujarat High Court has allowed the application by order dated 31-03-2014.

5.7 In the meantime, another bidder namely M/s Balleshwar Greens Private Limited & others raised the objection against the Hon’ble High Court order dated 31-03-2014 and offered the bid price of Rs. 160 Crores for the said land which was subsequently disposed of against the assessee vide an order dated 17-04- 2014.

5.8 The assessee, thereafter, filed a review application before the Division Bench of the High Court which was disposed of vide order dated 22-04-2014 partly in its favour after making some minor modification in the order of the Hon’ble Gujarat High Court dated 17-04-2014.

9 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 7.1 Thus, it was contended by the assessee that it got the possession of land in pursuance to the order of Hon’ble Supreme Court and a conveyance deed has been executed for the said land on 03-11-2015. Thereafter, the assessee immediately after execution of conveyance deed started the procedure to develop commercial project on the said land and accordingly submitted the development plan before the Ahmedabad Municipal Corporation which was approved on 02-05- 2016 and subsequently, it received the grant of permission for the development vide letter dated 08-06-2016 to develop the commercial project under the name and style of “Iscon Commercial Centre”.

7.2 The assessee, thus, in view of the above said facts, contended that the possession of land was handed over to it after the F.Y. 2013-14. Therefore, the question of project launch, build or execute and determination of any income does not arise in the F.Y. 2013-14 relevant to the A.Y. 2014-15. Accordingly, the No. of shops, area 94,612 square meters and the amount of Rs. 190,57,72,201/- are irrelevant in the given facts and circumstances.

7.3 The assessee further submitted that Shri Dharmendra Bhambhani and Shri Raju Tekwani are not employees of the company as they are independent estate brokers. Therefore, the seized materials/documents gathered from their premises cannot be used to draw any adverse inference against the assessee. Furthermore, the provisions of section 132(4A) r.w.s. 292C of the Act provides the presumption that the documents found from the premises of the search party belongs to them. As such, the impugned seized documents were not recovered from the premises of the assessee.

7.4 Over and above, Shri Dharmendra Bhambhani and Shri Raju Tekwani have also filed an application before the Hon’ble Settlement Commission along with the explanation which was admitted by the Hon’ble Settlement Commission u/s 245D(1) of the Income Tax Act. The Hon’ble Settlement Commission further called the report from the Pr. Commissioner under section 245D(2C) of the Act dated 29-

10 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 01-2018 who in-turn has submitted the report under Rule-9 of the Income Tax Rules along with seized materials and documents found during the search.

7.5 The assessee in continuation of earlier submission also submits that it had started preparatory work and received the advance amount of Rs. 3,67,50,601/- only from pre-launching booking from its prospective members of the proposed commercial project after the order of the Hon’ble SC dated 13-08-2015 i.e. F.Y. 2015-16 corresponding to the A.Y. 2016-17. The said payment has also been reflected in the books of account under the head “Other Current Liabilities”.

7.6 In addition to the above, the assessee also contended that nothing was found during the search proceedings at the other premises of the Iscon Group, indicating that it has received any booking or token amount before October 2015.

7.7 Furthermore, none of the director of the assessee company was confronted during the search proceeding with the seized materials gathered from the premises of Shri Dharmendra Bhambhani and Shri Raju Tekwani as well as during the post search proceeding too. In other words, the directors of the company were not confronted with the seized materials/documents.

7.8 The assessee further submitted that it had started the development of project from June 2016 (i.e. after acquiring the land and obtaining the permission for development from Ahmedabad Municipal Corporation). Therefore, the calculation/ determination of any income in respect to the said commercial scheme in the year under consideration is out of the box of Law, Accounting Standards and Accounting Principles as well as various judicial pronouncements.

7.9 The assessee also submitted that the allegation for transactions of sale of Rs. 190,57,72,201/- is based on the appraisal report communicated by the search in charge officer of the Investigation Department to the AO. As such, the report prepared by the Search in charge officer is a unilateral act and meant for internal correspondence as the report does not talks about the correct facts of the case. As

11 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 such, the appraisal report has no legal sanctity under the provisions of the Income Tax Act. The AO is required to bring out on record sufficient materials/ evidence to make proposed addition in the assessment of search cases. The assessee thus in view of the above requested the AO to drop the allegation for the alleged transactions of sale of Rs. 190,57,72,201/- only.

7.10 However, the AO rejected all the contentions of the assessee by observing the following facts gathered during the assessment proceedings: a. The VIP Project was not the notional project. It was the actual project as invitation card for formal launch of the project dated 12-12-2015 was found from the whatts-app chat of Shri Raju Tekwani and Shri Dharmendra Bhambhani. The JP Iscon Group also posted the details about the project on its website on 12-09-2016 and a video was uploaded on you-tube relating to the project on 08-01-2016. b. The contention of Shri Raju Tekwani that the payments were returned to the customers, neither known from the seized documents during the course of search nor the assessee has submitted anything in support of the said contention. c. The Iscon VIP Project was one of the current commercial projects of JP Iscon Group. The said commercial project have large no. of shops. As it was the practice of the group company to charge the on-money in cash, the group company was accepting the consideration on sale/booking of shops in two forms one in cheque and another in cash marked as payment- 2 which had remained unaccounted. d. Evidence/loose papers seized during search from the premises of Shri Dharmendra Bhambhani, Shri Raju Tekwani and Shri Sanjay Patel were having the direct nexus with the Iscon Group. e. Some of the customer diaries were recorded in backdating of 9 years (i.e. 2005 and 2006) whilst, the company was incorporated on 22-11-2010 and the auction of the land was done in the year 2013. Therefore, the transactions recorded in diaries were related to VIP Iscon Project would be after the date of auction only.

12 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 f. The customer diaries were evidencing the details about the cash receipt and details of the shop which were recorded with respect to the VIP Iscon Project only. g. Handwritten pocket diaries of Shri Raju Tekwani, Phone of Shri Pawan Tekwani s/o Raju Tekwani were clearly showing the record of the cash payments and receipts with respect to the units of the VIP Iscon Project. Page no. 130 of loose paper of Annexure A-23 of handwritten book evidencing the records of payments received against 6 shops which were booked for Rs. 3,83,24,000/- out of which 1.91 crores were received through banking channel and rest of Rs. 1.49 crores were received in cash. The aforesaid record was noted in a handwritten book on 16-12-2015. h. Similarly, page No. 54 of Annexure A-86 was found, explaining the computation of brokerage with respect to the sale of three shops of Iscon VIP and page No. 30 of Annexure A-86 describing the payment made by the buyer namely Shri Kamal Tolani against the shop No. A-23 from Dharmendra Bhambhani and Raju Tekwani in Iscon VIP project. i. Furthermore, transactions relating to shop No. A-405, B-401, 402, 403, and C-208, 216, 217 were recorded in the loose papers found from the premises of Shri Raju Tekwani. Exactly, the same papers, recording the transaction in the loose papers were also found from the premises of Shri Dharmendera Bhambhani. Likewise, the pdf file, seized from the laptop of Shri Sanjay Patel, was also containing the details of same shop numbers which were brokered by Shri Raju Tekwani and Dharmendra Bhambhani. j. The PDF file found from the seized laptop of Shri Sanjay Patel was the print-out of tally file “zyx” and similar file was also found and seized during search in the premises of Shri Kalindi Shah Senior Marketing Manager of M/s JP Iscon Ltd. k. Shri Jateen Gupta, one of the directors of the assessee company, also stated that the Zyx files were recording the transactions of booking and cash received thereon. The transactions recorded in Zyx files were exactly matching with transactions recorded in the Excel Sheet namely “Platinum- Final-Booking Chart- 28-03-2015 (Version 1)”

13 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 l. Shri Raju Tekwani and Dharmendra Bhambhani have also accepted the cash transactions with respect to the VIP Iscon Project during the statement recorded u/s 132(4) of the Income Tax Act. m. The transactions relating to the receipt of cash with respect to VIP Iscon Project were recorded in the handwritten book of Shri Dhramendra Bhambhani up to 3 to 4 days before the date of search which implies that the diary was used for the business transactions of the assessee which was not disclosed. 7.11 The AO based on the above, noted that total cash received/receivable against booking/sale of shops/flats in three years was of Rs. 190,57,72,201/- whereas the assessee has received the sum of Rs. 159,80,51,206/- during the year. The AO, therefore, in view of the above said discussion added the sum of Rs. Rs. 159,80,51,206/- to the total income of the assessee u/s 68 of the Income Tax Act.

14 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 persons of the Iscon Group. During the search proceedings viz a viz post search proceedings, the investigation department did not carry out any cross enquiry from the appellant company. The AO further did not bring on record any cogent material after making necessary enquiries from the clients whose names were found in the excel sheet. Thus, it is evident that they did not make any alleged cash payment to the brokers or to the assessee company through the brokers. d- The AO did not provide the opportunity of cross examination to the assessee company and its directors of the statement recorded u/s 132(4) and 131 of the Act of both the brokers. Thus, the impugned statements were recorded behind the back of the assessee and no credence can be given to such documents. Likewise, the seized documents gathered from the premises of Shri Dharmendra Bhambhani and Shri Raju Tekwani were not supplied to the assessee for its rebuttal. e- The excel sheet seized and found from the possession of both brokers during search was a Xerox copy and the same did not seem to be belonging to the assessee company in any manner as there was no signature of any directors/employees/sales executives of the assessee company. f- The AO based on that excel sheet found in the computer, prepared a data sheet specifying Unit No., Sq. Ft. and booking rate of each floor, for the period Jan to March 2014 and at the last page recorded that “In the table above, it is recorded that 140 shops having area of 94612 sq.ft. are booked for a consideration of Rs.190,57,72,201/- out of this amount, in the form of money. Total of P1 is Nil.” In this regard, the assessee submitted that the land was acquired on 03-11-2015 and the plan for commercial project was submitted before the Ahmedabad Municipal Corporation for 421 shops having different area which was different from data prepared by the AO. g- With respect to PDF file with the title “vip-disc-pdf” found from the seized laptop of Shri Sanjay Patel, it was to be noted that the said PDF file was also never confronted to directors of the assessee or Iscon Group during search proceedings and post search proceeding too. The said PDF file was also not confronted to Shri Sanjay Patel during the assessment proceeding

15 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 u/s 153A of the Act framed on him. The said PDF file was first time placed before the Hon’ble Settlement Commission with the report of Pr. CIT Central Ahmedabad submitted under rule 9 of the Income Tax Rules. Thereafter, a rebuttal rejoinder was submitted by both brokers, Shri Dharmendra Bhambhani and Raju Tekwani along with sworn-in affidavit of Shri Sanjay Patel dated 23-06-2018 where Shri Sanjay Patel discloses that the signature of him and employees of the Iscon Group were used on the diaries to satisfy the prospective customers and to collect the cash by brokers for a hypothetical project. All these activities were carried out without the knowledge of the directors of the assessee and assessee company. h- As such, the word virtual sale has not been defined under the Act, whereas the word virtual is normally defined as something is there, but not in fact, actual form, or name. Similarly, the sale is also not defined under the Income Tax Act, however the word sale as per Black’s Law Dictionary defines as under: “Sale n.(bef. 12c) 1. The transferor of property of title for a price. See UCC 2- 106(1). 2. The agreement by which such a transfer takes place. The four elements are (1) parties competent to contract, (2) mutual assent, (3) a thing capable of being transferred, and (4) a price in money paid or promised” Whereas the land was acquired in the year 2015 and the project was launched in the year 2016, therefore, the question of booking/sale of shops in the F.Y. 2013-14 does not arise as it is not covered under sale. i- The documents/loose papers/digital evidence seized during the course of search are dumb documents as it is not connected with the assessee company and the said documents were not seized from the premises of the assessee company or its directors or key persons. 9. The assessee, therefore in view of the above, opined that the income of Rs. 159,80,51,206/- which is a notional income and alleged to be received against a non-existent project cannot be added to the total income of it.

16 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 9.1 It was also pointed out by the assessee that the AO was provided an opportunity to make his submission during the appeal proceeding. However, the AO has reiterated his observation and submits that the case of the assessee has been covered u/s 153C of the Income Tax Act and merely the premises of the assessee was not searched/surveyed does not mean that the seized documents were not in the possession of the assessee. The AO further submitted that the materials seized during the course of search are evidencing that the bookings of the VIP Iscon project was started as early as the sale was confirmed by the Hon’ble Gujarat High Court in favour of the assessee dated 17-12-2013 i.e. F.Y. 2013-14.

Issues going against the Assessee;  a- The assessee at the time of acquiring the land through a bidding process was not part of the Iscon group. As such, the Iscon Group later-on had acquired M/s Vedica Procon Private Limited. b- The statements recorded during search in the case of Shri Dharmendra Bhambhani and Raju Tekwani were not very much clear that the booking amount collected by them was for project to be developed by the assessee or for a different project which may be a VIP as “Vedica Industrial Park” a different project from “Iscon Commercial Centre”. c- The contentions of the assessee that the VIP project is a fictitious/hypothetical project was not factually correct as the assessee could make a plan/ design for a project and collect the booking amount before launching the project formerly. d- The appellant as such uploaded the formal invitation for launch of the VIP project on its website. e- If the brokers Shri Dharmendera Bhambhani and Raju Tekwani were collecting the booking amount for the VIP Iscon Project with the signature of one of the employees of the assessee company namely Shri Sanjay Patel

17 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 without the knowledge of the assessee company, as submitted in affidavit before Hon’ble Settlement Commission then it becomes the case of misrepresentation/impersonation and assessee was needed to file an FIR which was not done by the assessee company. f- According to the assessee company, the brokers chose to go before the Hon’ble ITSC. However, it did not bring anything on record that the amount of Rs. 10,00,00,000/- appearing in the seized diaries and amount of Rs. 37,14,80,775/- appearing in the seized loose paper were offered for tax or considered towards in computation of income by the so-called brokers. g- With respect to the PDF file, the amount of Rs. 5.96 crores, mostly paid to the brokers, was disputed before the ITSC on the ground that the project was a hypothetical project. h- The assessee also did not bring anything on record about the entries recorded in PDF file which was printout of tally file “Zyx” that these were not relating to the VIP Project.

Issues going against the Revenue; 

i- The statements recorded during the search proceedings and post search proceedings did not clearly indicate whether VIP project relates to assessee company. ii- The incriminating documents seized during the courses of search from the premises of Shri Dharmendra Bhambhani, Raju Tekwani and Sanjay Patel were not confronted by the directors and key persons of the assessee company. iii- The AO has not made any enquiry about the people whose name appeared in the loose paper for booking the shops due to which proposed addition was made. As such, the provision of section 132(4) would be primarily applicable to brokers and not the assessee company. iv- The persons booking the units in the project “Iscon Commercial Centre” launched after granting the development permission were not the same

18 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 persons whose name were appearing in the diaries and loose papers seized during search except three names which were common in the two lists. v- The provision of section 68 should not be invoked to the assessee company as the evidence gathered were not part of the books of accounts whilst the provision of section 69A would be apply as the amounts collected by the brokers were unexplained money and unaccounted money. vi- The AO has not recorded any findings for Rs. 10,00,00,000/- mentioned in the diaries seized during the courses of search why the same was not added to the total income of the assessee neither gave his opinion as to whether the name of the persons appearing in the diaries were the same as recorded in loose papers bearing Sr. No. 81 to 86 of Annexure A-86 having records of 140 shops valuing Rs. 190,57,72,201/- out of which Rs. 37,14,80,775/- were recorded as cash received. vii- The AO has noted that the assessee has received cash payment only Rs. 37,14,80,775/- out of Rs. 190,57,72,201/- therefore he cannot treat whole amount of Rs. 190,57,72,201/- as undisclosed/unaccounted income of the assessee. viii- The AO also did not consider the Accounting Standard-9, applicable to the assessee company and not considered various judicial pronouncements where it was decided that the income would be recognized in the year in which the title/ownership of the respective units/properties are transferred. 11. The Ld. CIT-A, thus, in view of the above was of the opinion that the contention of the assessee that the brokers were not working with it, no bookings were made with respect to the commercial project at Raipur Ahmedabad, had not received any money from the brokers was not acceptable as assessee was a successful bidder of the land and possess the right over the land from Dec, 2013. The VIP project therefore was the real project and the brokers had started the bookings of the said project through diary (as the diary system for booking of real estate and accounting thereto are prevailing in Gujarat) either on its own account or on the behalf of the assessee.

19 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 11.1 The assessee has also not controverted with respect to the amount recorded in the PDF file which was mostly paid to Shri Dharmendra Bhambhani and Raju Tekwani whether it was paid for VIP project or any other project.

11.2 The Ld. CIT-A further was of the view that the amount recorded of Rs. 37,14,80,775/- in column P-2 of loose paper at Sr.No. 81 to 86 of Annexure A-86 was the actual cash receipt and the same should be treated as unexplained money u/s 69A of the Income Tax Act in the hands of the assessee.

11.3 The Ld. CIT-A, thus following the decision of Hon’ble High Court of Gujarat in the case of Commissioner of Income Tax-IV vs. Shivalik Buildwell (P) Ltd. reported in 40 taxmann.com 219, treated the sum of Rs. 37,14,80,775/- as part of the receipts of the assessee for the financial year/ years in which the assessee has recognized the revenue in accordance with the Accounting Standard and addition made by the AO of Rs. 159,81,51,206/- during the assessment was directed to be deleted. Thus the ld. CIT-A allowed the appeal of the assessee in part.

20 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 159,80,51,206/- made by the Assessing Officer u/s. 68 of the Act on account of booking of shops and receiving cash in Project Iscon VIP at Raipur. On facts and circumstances of the case, the Ld. CIT (A) ought to have deleted the addition of Rs. 159,80,51,206/- without giving such direction as aforesaid to the Assessing Officer. 2. The Respondent craves right to add, amend, alter, modify, substitute, delete or modify all or any of the above grounds of cross objection. 14. The ld. AR before us filed two sets of paper books. The first set of paper is running from pages 1 to 388 for the AY 2014-15 and the 2nd set of paper book is running from pages 1 to 443 pertaining to the AYs 2014-15 to 2016-17. The ld. AR also filed WS dated 5-7-2023 and 28-08-2023 in response to the queries raised by the Bench. The ld. AR contended that the documents found from the premises of the 3rd party during the search carried out under section 132 of the Act have no nexus with the project of the assessee company. The assessee has undertaken the project of 421 shops whereas according to these loose papers the number of shops was recorded 140/158. Likewise, the names of the parties recorded in the seized documents did not match the actual sale transactions shown by the assessee in the books of accounts.

14.1 The seized documents pertain to the financial year 2013-14 corresponding to assessment year 2014-15 whereas the assessee has acquired the land after the verdict of the Hon’ble Supreme Court dated 13th August 2015 in the financial year 2015-16 corresponding to assessment year 2016-17. Furthermore, the land in question was in dispute in earlier years and therefore there was no possibility of the assessee having received any amount from the prospective buyer/investor/broker against the project. Similarly, the project of the assessee was approved by the AMC vide order dated 02nd May, 2016 and grant the permission dated 08th June, 2016 for the development of the project.

14.2 The assessee has never launched any project with the name VIP Iscon. As such, the name of the project was “Iscon Commercial Centre”. The excel sheet found from the premises of the 3rd parties does not contain the name of the assessee.

21 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 14.3 The Ld. AR also contended that the opportunity of cross verification was not afforded by the revenue of the parties namely the brokers Shri Raju Tekwani and Shri Dharmendra Bhambhani on whose statements the additions were made. Similarly, the seized materials relied on by the Revenue for making the addition in the hands of the assessee have not been supplied for the rebuttal to the assessee.

14.4 The documents found during the search were loose papers and diaries but without any corroborative evidence in support of such seized documents. Therefore, no addition merely based on the statement can be made in the hands of the assessee.

22 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 the Revenue that the assessee was coming up with the commercial real estate project under the name and style of VIP Iscon Project. Thus, the financial transactions recorded in the loose papers/ diaries were related to such a project. Based on these financial transactions, the AO determined the amount of Rs. 190,57,72,201/- by treating the same as representing on money received/to be received from the customers/investors/brokers against relinquishment of right for certain units to be sold of the project. The impugned amount of Rs. 190,57,72,201/- was divided in three years as detailed below: Years Amount A.Y. 2014-15 Rs. 159,80,51,206/- A.Y. 2015-16 Rs. 1,96,21,858/- A.Y. 2016-17 Rs. 28,80,99,138/- 17.1 Accordingly, the AO held that these financial transactions were outside the books of accounts and made the addition for the same in the respective assessment years.

17.2 However, the learned CIT-A found that the actual amount of cash receipt was recorded in the seized documents is of Rs. 37,14,80,775/- which alone should be made subject to tax in the financial years in which the revenue is recognized in accordance with the accounting standard issued by the ICAI.

17.3 Now the controversy arises whether the assessee was engaged in the activity of receiving the booking amount in cash from the customers which were not recorded in the books of accounts. Admittedly, the assessee was the successful bidder in the bidding process which was 1st time made in the month of December 2013 but the same was subject matter of dispute for one or the other reasons which has been elaborated in the preceding paragraph. The matter was carried up to the Hon’ble Apex Court which settled the dispute in favour of the assessee vide order dated 13th August 2015. Finally, the land was allotted to the assessee dated 03rd November 2015 and thereafter the assessee got the approval for the construction of the impugned project vide letter dated 8th June 2016 from the office of the Ahmedabad Municipal Corporation. This fact is not disputed. Thus,

23 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 it apparently appears that the land in question was in dispute and therefore no prudent person/ investor /businessman/ prospective buyer will make any investment in such disputed project till the end of the dispute.

17.4 At this juncture, it is also important to note that when the land was originally allotted to the assessee, being M/s Vedica Procon private Ltd, it was not a part of the Iscon Group. The finding to this effect was given by the Ld. CIT-A which is undisputed. For ready reference the finding of the Ld. CIT-A is extracted below: The appellant became the successful bidder in the auction of that property (land) and made part payment towards the amount needed in January 2014. At that time of auction and merging as the successful bidder, the name of the appellant company was Vedica Procon Pvt. Ltd. which was not part of the Iscon Group of concerns then and it was only later that the Iscon Group came to acquire M/s.Vedica Procon Pvt Ltd. and go through the litigation related to the said land as narrated before. 17.5 From the above finding it is inferred that the impugned project came under the control of the assessee on a later date i.e. when the company namely M/s Vedica Procon private Ltd was acquired by the assessee. However, in this regard no specific date has been mentioned by the authorities below in their respective orders suggesting the date when the assessee acquired the company namely M/s Vedica Procon private Ltd. Thus, in such a situation how is it possible for the company to have received the cash without recording the same in the books of accounts in the year under consideration. A conjoint reading of the above facts reveals that there was no money received by the assessee in cash in the year under consideration.

17.6 The brokers, namely Shri Dharmendra Bhambhani and Shri Raju Tekwani were not the employees of the assessee company. As such, these brokers were carrying out trading in land activity in their individual capacity. Thus, the details of the transactions found from their respective premises have to be explained by them. The provisions of section 132(4A) of the Act presume that the documents found on the premises of the search parties belong to them. However, these respective parties in the statement recorded under section 132(4A) of the Act have categorically stated that they have received the on-money in relation to the

24 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 Iscon VIP project. However, we note that the opportunity of cross-examination has not been afforded to the assessee, which was a violation of the principle of natural justice. The assessee during the appellate proceedings contended that the opportunity of cross examination of the brokers and the other parties was not provided which can be found out from the order of the Ld. CIT-A. The relevant extract of the submission of the assessee reads as under: 4.14 The appellant company has to submit that the Ld. AO has relied upon the statements of both brokers recorded u/s 132(4} of the Act and/or u/s. 131 of the Act in their cases which were recorded behind the back of the appellant company and its directors and therefore, without the said statements of both brokers being tested by cross examination the same shall be against the principle of natural justice and the Ld. AO ought to have granted the opportunity of cross examination to the appellant company and to its directors of said two brokers about their so called statement and of the seized material found in their cases. The reliance placed by the Ld. AO on the statement of both brokers where they have made admission for making an allegation, no addition can be made in the case of the appellant company 17.7 The Hon’ble Supreme Court in the case of Andaman Timber Industries vs. Commissioner of Central Excise Kolkata II reported in 62 taxmann.com 3 has categorically held that opportunity of cross-examination is one of the prerequisite principals of natural justice and equity before making the addition in the hands of the assessee. The relevant extract of the judgment is reproduced as under: “Not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, the rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the assessee themselves to explain as to why their ex- factory prices remain static. It was not for the Tribunal to have guesswork as to for what purposes the assessee wanted to cross- examine those dealers and what extraction the assessee wanted from them. [Para 6] As mentioned above, the assessee had contested the

25 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price-list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price-which is mentioned in the price-list itself could be the subject matter of cross- examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross- examination and make the remarks as mentioned above. [Para 7] If the testimony of these two witnesses is discredited, there was no material with the department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show-Cause Notice. [Para 8] Hence, impugned order of the Tribunal was set aside and this appeal was allowed. [Para 9]” 17.8 Moving further, we also note that there were the seized documents which were used for making the addition in the hands of the assessee but the same were not supplied to the assessee even though the assessee has made a request for the necessary documents. The relevant extract of the submission of the assessee is reproduced as under:

5.3.1 So, the elementary principle of natural justice, as applied to income-tax proceedings is that the assessee should have knowledge of he material that is going to be used against him so that he may be able o meet with it. Where, for instance, the statement of a person is recorded behind the back of the appellant but not tested by cross-examination, such a statement cannot be allowed to be used to the prejudice of the appellant company. 17.9 The documents used for the purpose of the addition cannot be the basis until and unless the same is supplied to the other party for rebuttal. In holding so, we draw support and guidance from the judgment of Hon’ble Apex Court in the case of Dhakeswari Cotton Mills Ltd. vs. Commissioner of Income-tax cited in [1954] 26 ITR 775 (SC) where it was held as under; “As regards the second contention, although ITO is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under section 23(3) he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all and there must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this

26 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 subject has been fairly and rightly stated by the Lahore High Court in the case of Seth Gurmukh Singh v. CIT [1944] 12 393. In the instant case, the Tribunal violated certain fundamental rules of justice in reaching its conclusions. Firstly, it did not disclose to the assessee what information had been supplied to it by the departmental representative. Next, it did not give any opportunity to the assessee to rebut the material furnished to it by him, and lastly, it declined to take all the material that the assessee wanted to produce in support of its case. The result was that the assessee had not had a fair hearing. The estimate of the gross rate of profit on sales, both by the ITO and the Tribunal, was based on surmises, suspicions and conjectures. The Tribunal took from the representative of the department a statement of gross profit rates of other cotton mills but did not show that statement to the assessee did not give him a opportunity to show that statement had no relevancy whatsoever to the case of the mill in question. It was not known whether the mills which had disclosed these rates were similarly situated and circumstanced. Not only did the Tribunal not show the information given by the representative of the department to the assessee, but it refused even to look at books and papers which assessee's representative produced before the Accountant Member in his chamber. The assessment in this case and in the connected appeal, was above the figure of Rs. 55 lakhs and it was just and proper when dealing with a matter of this magnitude not to employ unnecessary haste and show impatience, particularly when it was known to the department that the books of the assessee were in the custody of the Sub-Divisional Officer. Thus both the ITO and the Tribunal in estimating the gross profit rate on sales did not act on any material but acted on pure guess and suspicion. It was thus a fit case for the exercise of power under Article 136. In the result, the appeal was to be allowed and the order of the Tribunal was to be set aside and the case was to be remanded to it with direction that in arriving at its estimate of gross profits and sales it should give full opportunity to the assessee to place any relevant material on the point that it has before the Tribunal, whether it is found in the books of account or elsewhere and it should also disclose to the assessee the material on which the Tribunal is going to found its estimate and then afford him full opportunity to meet the substance of any private inquiries made by the ITO if it is intended to make the estimate on the foot of those enquiries.” 17.10 It is also significant to note that both the brokers who were subject to search have approached the settlement commission. In the process of settling the dispute in the settlement commission, the affidavit of the employee of the assessee namely Shri Sanjay Patel has stated that both the brokers have taken his signature to justify/mislead the public that the project belongs to Iscon Group so

27 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 that they can collect the cash from them. The necessary extract of the affidavit as recorded in the order of ld. CIT-A is reproduced as under: 3. That both brokers Shri Raju Jethanand Tekwani and Dharmendra Jethanand Bhambhani doing the brokerage activities in the market in their independent capacity for the various real estate schemes built and developed by various builders, they happened to know me also and offered me to work part time for them. When the prospective customers for the hypothetical commercial project *VZP* demanded to provide some sort of endorsement from both brokers, they have prepared few diaries and took my signature just to gain the confidence of the customers and to retain them in their fold. When I was not available, I have involved one of my colleagues to sign the diaries. It can be easily verified from the seized material of Iscon Group that I was never involved in signing of any diaries for other Iscon Project. 4. That in respect of whatever I have stated in Para 5 of my sworn-in affidavit dated 23,06.2018 in respect of one file titled "vip-disc-pdf which was found 01 my laptop and seized from my residence which is under the title "zyk" cash Iscon Commercial - Raipur Book for the period 01.01.2014 to 30.06.2014. The said file contains the noting of discount offered by both brokers Mr. Raju. Jethanand Tekwani and Dharmendra Jethanand Bhambhani to the prospective buyer customers stating hypothetical Shop Number, Area and discount per sq, ft for which credit amount of discount is stated under the head "credit". The said details of discount proposed to be offered by both brokers to the prospective buyers was got prepared by both brokers from me to show it to the prospective buyers the discounted booking rate for the different shops in the hypothetical commercial project "VIP0, which was not in the knowledge of the directors of Vedica Procon Pvt. Ltd. or the management of JP Iscon Pvt, Ltd." 17.11 The genuineness of the impugned affidavit has nowhere been doubted by the authorities below as well as by the Ld. DR appearing on behalf of the Revenue at the time of the hearing. Thus, the above affidavit also shows that these were the brokers who are engaged in collecting the cash from the parties without the knowledge of the assessee. Furthermore, we also note that the income of the assessee should be based on tangible materials. In other words, the income which has been alleged belonging to the assessee should be available with the assessee either in the form of some investment or the expenditure which has been incurred by the assessee out of such income. But no such finding has been given by the authorities below. Neither any material has been brought on record by the Ld. DR suggesting that the assessee has made an investment out of the unaccounted income or incurred the expenditure somewhere else without recording the same in the books of accounts. The income cannot be decided merely based on papers. Documents which are found during the search may be incriminating in nature but the same should be supported by corroborative evidence. However, we find that no corroborative evidence in support of these materials has been brought on

28 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 record. It is also seen that the names of the parties were also recorded who have made investment in the project of the assessee. However, no verification whatsoever has been carried out by the authorities below from the respective parties to establish the fact that the assessee has carried out transactions which were not accounted for in the books of accounts. In holding so, we draw support and guidance from the order of ITAT Ahmedabad C Bench in the case of Nishant Construction Private Limited vs. ACIT ITA No. 1502/AHD/2015 dated 14-12-2017 where it was held as under:

“25.Coming to the evidentiary value of the impounded loose sheet mentioned elsewhere, the Hon’ble Supreme Court in the case of Common Cause (A www.taxguru.in ITA No. 1502/Ahd/2015 . A.Y. 2011-12 12 Registered Society) and Others vs. Union of India and Others in Writ Petition Civil Appeal No. 505 of 2015 has observed as under:- 16. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla's case (supra) has dealt with the matter though at the stage of discharge when investigation had been completed but same is relevant for the purpose of decision of this case also. This Court has considered the entries in Jain Hawala diaries, note books and file containing loose sheets of papers not in the form of "Books of Accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible under Section 34 of the Evidence Act, and that only where the entries are in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible 17. It has further been laid down in V.C. Shukla (Supra) as to the value of entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. 26.The Hon’ble Supreme Court further observed:- 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as/ relevant evidence, still, the statement made therein shall not alone be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfill the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 27.With respect to evidentiary value of regular account book, the Hon’ble Supreme Court in the case of V.C. Shukla 1998 (3) SCC 410 has laid down :-

29 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 ” 37. In Beni v. Bisan Dayal it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been proved, said, that the rule as laid down in Section 34 of Tie Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer to a matter in which the Court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts." 28.It is apparent from the aforesaid discussion that the loose sheet of papers are wholly irrelevant as evidence being not admissible u/s. 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. 29.Moreover, the Assessing Office did not make any inquiry from buyers of flat in respect of actual prices paid by them. He also did not make any other inquiry in order to corroborate his conclusion. There is no incriminating evidence to show that the assessee has sold the flats at a higher rate. 30.In our understanding of the facts, the impounded loose sheet can at the most be termed as “dumb document” which did not contain full details about the dates, and its contents were not corroborated by any material and could not relied upon and made the basis of addition. 31.In the case of CIT vs. Kulwant Rai 291 ITR 36 the ruling given in the case of Dhakeswari Cotton Mills Ltd. 26 ITR 775 by the Hon’ble Supreme Court has been relied upon wherein the Hon’ble Supreme Court has held “ 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 a pure guess and base an assessment entirely upon it without reference to any material or evidence at all”. 32.Considering the facts of the case in hand in totality and in the light of the judicial decisions referred to hereinabove, we do not find any merit in the impugned additions. We, therefore, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition of Rs. 32.56 crores. 33.In the result, the appeal filed by the Assessee is accordingly allowed.” 17.12 On perusal of the order of the AO, we note that the AO has given a finding based on the seized documents that the assessee has received cheque payment

30 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 as well as cash payment from the parties. The relevant extract of the finding of the AO is reproduced as under:

Block Shop No. Area Rate Consideration Payment 1 Payment 2 A 206 536 12025 6445400 3200000 3000000 A 207 536 12025 6445400 3200000 3000000 B 209 536 12025 6445400 3200000 3200000 C 209 536 11700 6271200 3150000 1750000 C 210 536 11700 6271200 3150000 1750000 B 214 536 12025 6445400 3200000 2250000 38324000 19100000 14950000

17.13 However, we find that the assessment order is silent about the fact that in whose account the impugned amount of cheque was received by the assessee. No detail about the party who has paid such amount to the assessee and what was the nature of transaction. Likewise, there is no whisper in the order of the AO whether such amount representing the receipt of money in cheque was recorded in the books of accounts of the assessee or in the books of accounts of the brokers. Thus, in the absence of such findings no inference can be drawn against the assessee.

17.14 The assessee launched its project in the assessment year 2015-16 and has shown current liabilities representing the advance booking received from the parties amounting to Rs. 3,67,50,361/- only. The names of these parties who have booked the unit in the project namely “Iscon Commercial Centre’ were different with the name of the parties who were found during search at the premises of the brokers and the employee of the assessee except 3 names. However, the question arises whether these 3 names were representing the same parties who the buyers were as per the seized documents. In this regard, we note that no such findings to this effect have been given by the authorities below and furthermore no verification has been carried out to establish the stand of the Revenue. Thus, the question of making the addition with respect to the alleged amount of cash of Rs. 37,14,80,775/- in the succeeding years in which the transaction for transferring the unit takes place is directed by the Ld. CIT-A is devoid of any merit and liable

31 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 to be quashed. Besides the above, the ld. CIT-A while adjudicating the issue can give the finding for the assessment year which is in dispute before him. However, the ld. CIT-A in the present case has exceeded his jurisdiction by giving directions to make the addition in the later year/years. In this regard, we draw support and guidance from the order Chennai Tribunal in the case Sun Metal Factory (I) (P.) Ltd. Vs. Assistant Commissioner of Income Tax reported in 124 ITD 14 wherein it was held as under: “On the facts of the case, the question arose as to whether the action of the Commissioner (Appeals) in giving the direction to the Assessing Officer to issue notice under section 148 by treating the action under section 150 was justified or not. The appellate authority can give findings and directions only in respect of year/period which is before that authority and no direction or finding can be given in respect of other years. Thus, in the instant case, the Commissioner after holding that the addition made by the Assessing Officer was not based on the evidence found during the search, the same could not enlarge the scope of appeal for giving the direction to the Assessing Officer for reopening of the assessment for the assessment year 1999-2000. The Commissioner (Appeals) had failed to record a categorical finding justifying the direction given to the Assessing Officer when the Assessing Officer himself had not chosen for reopening the assessment. Accordingly, the directions given by the Commissioner (Appeals) in the impugned order were to be set aside. The appeal of the assessee stood allowed. [Para 7]” 17.15 In view of the above and after considering the arguments of both sides, the ground of appeal of the assessee and objections filed in the CO bearing No. 64/Ahd/2020 for A.Y. 2014-15 filed by the assessee are allowed whereas the ground of appeal of the revenue bearing no. IT(SS)A 40/Ahd/2020 for A.Y. 2014-15 is dismissed.

17.16 In the result, the appeal and the CO of the assessee are allowed whereas the appeal of the Revenue is dismissed.

32 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 Assessee in ITA No. 32/Ahd/2020 for the assessment year 2014-15. Therefore, the findings given in ITA No. 32/Ahd/2020 shall also be applicable to the above- mentioned two appeals of the assessee for the years under consideration i.e. AY 2015-16 & 2016-17. The ground of appeal of the Assessee for the assessment 2014-15 has been decided by us vide paragraph No. 17 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2014-15 shall also be applied for the year under consideration i.e. AY 2015-16 & 2016-17. Hence, the grounds of appeals filed by the assessee are hereby allowed.

33 IT(SS)A No.32/Ahd/2020 with 8 others A.Y 2014-15 26. At the outset, we note that the issues raised by the Revenue in its appeals and the objections in the CO raised by the assessee are identical to the issues raised in IT(SS)A No. 40/Ahd/2020 with C.O. No. 64/Ahd/2020 for A.Y. 2014-15 which has already been adjudicated along with the appeal of the assessee bearing No. IT(SS)A No. 32/AHD/2020 for A.Y. 2014-15 in favour of the assessee and against Revenue vide paragraph No. 17 of this order. Respectfully following the same, the appeals filed by the Revenue are dismissed and the COs filed by the assessee are allowed.

Sr. IT(SS)A/C.O. Asstt. Appeal by Result No. No. Year 2014-15 The appeals filed IT(SS)A Nos.32- 1-3. To Assessee by the assessee 34/Ahd/2020 2016-17 are allowed The appeals filed IT(SS)A Nos.40 by the revenue to 42/Ahd/2020 2014-15 A.C.I.T, are dismissed 4-9 With to Central Circle-2(4), whereas the COs C.O.Nos 64 to 2016-17 Ahmedabad filed by the 66/Ahd/2020 assessee are allowed.

Order pronounced in the Court on 31/08/2023 at Ahmedabad.

Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 31/08/2023 Manish