ACIT 2(3) (1), MUMBAI vs. M/S. THAKKR HOUSING DEVELOPMENT PVT. LTD, MUMBAI

These are the five appeals filed by The Assistant Commissioner Of Income Tax, Circle (2) (3) (1), Mumbai in case of three different assesses, where same issue arising out of same transaction are involved, therefore, the revenue as well as the assessee argued those appeals together and therefore, we dispose of those appeals by this common order.

ITA No. 2135/Mum/2021 for A.Y. 2012-13 and ITA number 2131/M/2021 for assessment year 2014 – 15 are filed by the Asst. Commissioner of Income-tax, Circle 2(3)(1), Mumbai (the learned Assessing Officer), against appellate order passed by the Commissioner of Income-tax (Appeals)-49, Mumbai [the learned CIT (A)] dated 13th August, 2021 in case of M/s Thakkar Housing Development Pvt. Ltd.

ITA number 2133/M/2021 for assessment year 2012 – 13 and ITA number 2132/M/2021 for assessment year 2014 – 15 is filed by the Asst Commissioner of income tax – Circle 2 (3) (1), Mumbai (the learned AO) against the order passed by the Commissioner of income tax (appeals) – 49, Mumbai dated 16/8/2021 in case of M/s Thakkar Grih Nirman Pvt Limited.

We first state the facts in case of ITA number In ITA No 2135/M/2021 where learned Assessing Officer in case of assessment year 12-13 of Assessee M/S Thakkar Housing Development Private Limited has raised following grounds of appeal:-

The grounds of appeal raised by the learned assessing officer in all other appeals are similar. Therefore, we first state the facts of the case in ITA number 21354 assessment year 2012 – 13 and decide it. The same decision is applied to other appeals thereafter.

The facts of the case show that assessee is a company engaged in the business of builders and construction. A Search and seizure action under Section 132 of the Income-tax Act, 1961 (the Act) was conducted on 8th September, 2015 on Kokani Group of Nasik. Based on that search, information was available that namely (1) M/s Thakker Apna Ghar Pvt. Ltd, (2) M/s Thakker Housing Development Pvt. LTd and (3) M/s Thakker Gruh Nirman Pvt. Ltd. (4) Dhannjay Marketing Pvt Ltd , (5) Asian Food Products Limited (6) Shri Karan Vijay Gupta [ collectively known as „Thakker Group] purchased the land at survey number 53/2 area admeasuring 20H.65R, survey number 54 area admeasuring 9H18R and survey number 55 area admeasuring 10H.41R i.e. Total area admeasuring 92 acres and 20 Gunthas of Savargaon Taluka District Nashik for consideration of ₹ 652,125,992/– as per sale deed dated 5/7/2013 from 14 parties known as Kokani group of Nasik. During the course of search on Kokani group certain loose sheets were found and seized which were forwarded to the AO of the assessee. The learned AO analysed the seized material found from the premises of the sellers and statement recorded u/s 132 (4) of the act wherein the sellers have accepted the cash over and above the consideration stated in the sale deed to the tune of ₹ 119,419,700/– and therefore the learned AO

Satisfaction was recorded by the learned Assessing Officer that the purchase of land by Thakker Group from Kokani Group parties shows cash payment of ₹65,21,25,992/- on various occasions. As assessee being one of the party, based on satisfaction note, notice under Section 153C of the Act was issued on 30th March, 2013. On 9th April, 2018, Assessee requested for satisfaction note which was provided. Subsequently, on 23rd April, 2018 assessee filed nil return of income for A.Y. 2010-11 to A.Y. 2015-16.

After issue of necessary statutory notices, the learned Assessing Officer issued a show cause notice on 17th November, 2018, wherein assessee was required to explain why a sum of ₹14,10,00,000/- should not be added under Section 69 of the Act being share of the assessee paid for purchase of Savargaon land for A.Y. 2010-11 to 2015-16. By this show cause notice, the learned Assessing Officer also provided the opportunity of cross examination of the seller parties to the assessee.

In response to the above notice, the assessee contended that it did not pay any sum in cash to Kokani family members as alleged by the Department. Regarding cross examination, in response to summons to the seller party, none of them appeared on the appointed date. The Director of the assessee company attended on the same date.

Subsequent to the issue of show cause notice, the seller parties Kokani Group filed a petition before Settlement Commission

The learned Assessing Officer further issued show cause notice dated 18th December, 2018 asking the assessee to furnish the explanation with respect to proposed addition and the learned Assessing Officer also asked to produce sellers as a witness of the assessee. The assessee denied any cash payment once again but failed to produce the seller. Consequently, another notice dated 26th December, 2018 was issued to the assessee reiterating the same facts and seeking same explanation. Assessee submitted its reply on 28th December, 2018 denying the cash payment. Based on this, the learned Assessing Officer held that during the assessment year 2012-13, assessee has made a cash payment of ₹1,56,93,324/- for purchase of land at Savargaon and accordingly, the order under Section 143(3) read with section 153C of the Act was passed on 30th December, 2018 wherein the learned assessing officer assessed the total income of the assessee at Rs 1,56,93,324/– against returned of income filed by the assessee at Rs Nil.

The assessee carried the matter before the learned CIT (A), who passed the order on 30th August, 2021 for A.Y. 2011-12, 2012-13, 2013-14 and 2014-15 deleting the above addition.

The learned CIT (A) dealt with the addition in paragraph no. 10 of his order as under:-

This takes care of the argument of Mr. Sabharwal that judicial notice can be taken of the practice prevailing in the property market of not disclosing the full consideration for transfer of properties. 53. The Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) held that the capital gains is intended to tax the gains of assessee not what an assessee might have gained and what is not gained cannot be computed as gain and the assessee cannot fastened with the liability on a fictional income. Similarly, the Hon'ble Supreme Court in the case of CIT VS. Shivakami Co. (P) Ltd. (1986) 159 ITR 71 (SC) held that unless there is evidence that more than what was stated was received, no higher price can be taken to be the basis for making addition. In the present case, we do not find any material on record suggesting the payment of onmoney consideration at the time of purchase of land by the respondentassessee and its group companies. Therefore, it can be said that the Assessing Officer had failed to bring on record any reliable evidence to prove that the respondent assessee had made investment in purchase of lands over and above the stated consideration. Therefore, we do not see any perversity in the findings of the Id. CIT(A) in deleting the addition based on the seized material. The findings given by

Thus the crux of the matter is that the learned CIT – A allowed the appeal of the assessee by following the order of the coordinate bench in the case of the other co-owners which were decided on the same set of facts and the same transaction involving same seized material. Therefore, aggrieved with that order, the learned Assessing Officer is in appeal before us.

The learned Departmental Representative submitted that though the learned CIT – A has followed the order of the coordinate bench in case of another CO-buyer where, the

Therefore, it was submitted that the learned CIT – A has merely followed the appellate orders in the case of Dhananjaya marketing private limited without appreciating that the said assessment orders in these cases been passed Under different sections by different officers on different dates with different set of facts. Therefore, it was submitted that though the order of the CIT – A follows the order of the coordinate bench in the case of another Co buyers, but same cannot be followed in the case of the assessee.

The learned Authorized Representative at the time of commencement of hearing stated that these appeals are covered in favour of the assessee by the decision of co-ordinate Bench in case of Dhananjay Marketing Pvt. Ltd. ITSSA no. 65/Pun/2017 for A.Y. 2014-15 dated 19th May, 2021 as well as in the order of Asian Food Products Limited ITSSA No. 64/Pun/2017 for A.Y. 2014-15 vide order dated 21st June, 2021. He submitted that the learned CIT – A has followed these decisions. The learned Authorized Representative stated that the purchaser of the property in question, is one of the co- owners and Dhananjay Marketing Pvt. Ltd. and Asian Food Pvt. Ltd. are also amongst other co-owners. He therefore submitted that if the issue has already been decided by the coordinate bench in the case of one of the co-owners on the same set off documents from same set off purchasers and on the same transaction, there is no reason for the Tribunal to take a different view in the case of this assessee. In this regard, he submitted that the issue is squarely covered in favour of the

The learned authorised representative further filed a paper book containing 302 pages. He referred to the page number 264 of the paper book wherein the statement recorded u/s 132 (4) of Mr. fakruddin Kokani is placed. He referred to question number 12, question number 14 and submitted that in answer to both these questions there is no name or reference of the Thakkar group made by him. He further referred to page number 271 – 279 with the statement recorded u/s 131 of the same person along with two other persons on 13/12/2016 which is in cross examination of these parties in question number 5 there is a categorical denial that any cash payment was received from the assessee or group concerns. It was further confirmed that the entire sale consideration was received through cheques only. The learned that AR further referred the order of the coordinate bench in case of Dhananjaya marketing private limited and submitted that at para number 45 there is a categorical finding of the ITA T that those vendors are also engaged in the land deeds other than the subject land i.e. savargaon land. He further referred to the page number 43 of the assessment order wherein there is a safe space reference of the payment by cheque and there is no mention that whether it any consideration is paid by the assessee on its group concern in cash the specific reference was made to para number 44 of the assessment order and submitted that except at page number 43 and page number 44

On the arguments of the learned departmental representative he submitted that the coordinate bench in the case of the other co-owners i.e. other buyers of the same land covers all these issues. With respect to the offer to the Maharashtra industrial development Corporation for purchase of the above land, he referred page number 220 of the paper book where there is a specific letter dated 30/05/2017 and on page number 221 letter dated 6/12/2014 where the above land was offered for setting up of the industry and to be acquired by MIT C at the rate of ₹ 90 lakhs per acre. He submitted that this rate is almost similar to the cheque payment made by the assessee and therefore the price of the land cannot be more than that. Therefore, on these evidences also it is proved that there is no cash payment made by the buyers.

He further submitted that whatever is the disclosure made by the seller‟s before the settlement commission is not with relation to the cash amount allegedly paid by the assessee and the group concerns. He submitted that this aspect has been considered by the coordinate bench at paragraph number 44 in case of Dhananjaya marketing private limited.

He further statement that all the statements recorded of Kokani group family members either u/s 132 of the act or u/s 131 of the act have already been considered by the coordinate bench in the case of the Dhananjaya marketing private limited as well as Asian Food products Ltd.

In the end he submitted all the issues covered in the case of the appeal of the learned assessing officer have already been dealt with in case of two joint buyers of the land along with

In the rejoinder, the learned departmental representative referred to the statement u/s 132 of the act of Mr. Aijaz Kutubdin Kokani dated 9/9/2015 wherein in answer to question number 10 years categorically stated that all the 13 members who are the owners of the land of Savargaon has received a total consideration of ₹ 33,600,000 in cash over and above the recorded land transaction. Therefore it was submitted that the statement u/s 132 four and preliminary statements recorded u/s 131 of the act are saying that the cheque in case was received from Tucker group of companies for sale of the above land.

We have carefully considered the rival contention and perused the orders of the lower authorities. We have also carefully considered the decision of the coordinate bench in the case of other co buyers namely, (1) Dhananjaya marketing private limited in ITA number 65, 67 and 69/PUN/2017 for assessment year 2012 – 13 and 2014 – 15 dated 19/05/2021 and order in case of (2) Asian food products Ltd in ITA number 64, 70, 71 – 73/pun/2017 for assessment year 2011 – 12 to 2014 – 15 dated 21/6/2021. We find that the coordinate bench has considered the above issue and held that that the learned assessing officer has failed to bring on record any reliable evidence to prove that the respondent assessee has made investment in purchase of land over and above the stated consideration.

The coordinate bench also considered the statement recorded u/s 132 (4) of the act of the company family as well as the preliminary restatement recorded u/s 131 of the act. The coordinate bench in paragraph number 12 has dealt with such statement. In paragraph number 25 – 26 has considered the statement of the sellers as well as the statement of cross examination wherein all the buyers of confirmed that they have not received any own money consideration on the sale of land from Thakkar group. Further with respect to the disclosure made by them of additional income the affidavit is were filed which were considered in paragraph number 29 of the order that the same disclosure was made with an intention to buy peace and avoid further litigation and also denied the knowledge of receipt of the own money consideration is the subject transaction of sale of land to Thakkar group. It also dealt with in paragraph number 32 with respect to the additional income disclosed by the vendor‟s before the settlement commission. In view of this the coordinate bench has clearly taken into consideration all the statements of the family members of the Kokani group as well as disclosure made by them before the settlement commission.

Further, merely because there is an error in mentioning the date of search in the order of the coordinate bench does not make the findings of the coordinate bench not binding on us. Further merely as the orders were passed either u/s 153A on u/s 153C, the findings of the coordinate bench does not change because the same was rendered after considering seized material, statement of the vendors, disclosure of the vendors before the settlement commission, the statement in cross

Thus in the present case, the learned it authorised representative has produced before us 2 orders of the coordinate bench in case of the joint buyers of the property along with the respondent assessee is in this appeal. On the identical facts, same transaction, on the basis of same seized material, on the basis of same statements of the buyer and disclosure made by them before the settlement commission, in those cases of the joint buyers the additions have been deleted. Therefore, those orders become binding on us as there is no change in any of the facts pointed out before us which is a material bearing on the findings given by the coordinate bench. Therefore judicial discipline demands that those judicial precedents is to be followed.

Further the ld CIT (A) has followed two decision of coordinate benches in case of two different joint buyers of the same property on the same set of facts, no infirmities can be found therein.

Therefore, we respectfully following the decision of the coordinate bench in case of Dhananjaya marketing private limited and Asian Foods products Ltd, confirm the orders of the ld CIT (A) and accordingly all the grounds of appeal are dismissed.

Further as the same set of facts also exists in all other four appeals, for reason given therein, confirming the order the orders of the ld CIT (A) in those appeals , we dismiss appeals of the ld AO.