MANAV BUILDERS P LIMITED ,MUMBAI vs. DCIT-CC-47, MUMBAI , MUMBAI

Contesting the aforesaid additions, assessee preferred appeals before learned Commissioner (Appeals). After considering submissions of the assessee in the context of facts and materials on record, learned Commissioner (Appeals) observed that the document based on which addition was made in assessee’s case is the same document found in search and seizure operation conducted on the Rohan Group and the additions were primarily based on the statement recorded in course of the said search and seizure operation from Haresh M. Mehta, Ms. Chaulla Joshi, Mr. Vijay Jassani. Referring to the decision of the Tribunal in case of two other group entities i.e. M/s Goodwill Properties Pvt. Ltd. and M/s Silver Arch Builders and Promoters Pvt. Ltd., learned Commissioner (Appeals) observed that statement of employees recorded in course of search and seizure operation can be used only after they supported by other corroborative evidences. However, he observed, in assessee’s case the seized document viz. page No. 114 of Annexure 1-A indicated receipt of on money in respect of the project Siddhesh Jyoti E and F Wings being developed by the assessee. Thus, he observed, addition on account of on money receipt can only be made in respect of these two projects and not on all sales made by the assessee. Thus, modifying the order of the AO, learned Commissioner (Appeals) directed him to add 30% on the gross sales of Shiddhesh Jyoti E and F Wing towards on money receipt.

Learned counsel for the assessee submitted, based on a single seized document found in a search conducted in case of some other entity, additions 5 & 6082-6083/MUM/2019 Assessment Years: 2007-08 to 2014-15 have been made in case of the assessee on account of on money. She submitted, entries in the seized document relating to assessee’s project were properly explained by Ms. Chaulla Joshi, who was employee of the Rohan Group. She submitted, except the two figures of 18,000/- and 5,400/- mentioned against Siddhesh Jyoti E & F wing Project nothing else appears in the seized document. Thus, she submitted simply based on the entries found in the seized document not supported by any other corroborative evidence, no addition could have been made on account of on money receipt. She submitted, even the seized document does not mention receipt of on money. Therefore, addition has been made based on conjecture and surmises. She submitted, in course of assessment proceedings, assessee has furnished copies of affidavits of the persons from whom statements were recorded under section 132(4). She submitted, in the affidavits the concerned persons have retracted their statement on on–money. That being the case, in absence of any other evidences indicating receipt of money, no addition can be made simply based on the seized document. Finally, she submitted, in case of other group entities similar addition deleted by the first appellate authority was upheld by the Tribunal. In this context, she relied upon the following decisions:

It is a matter of record that based on the aforesaid seized document, additions on account of on money receipt were made in respect of various entities, forming part of Rohan Group. In some of the cases, namely, Goodwill Properties Private Limited and Silver Arch Builders and Promoters Pvt. Ltd. the 7 & 6082-6083/MUM/2019 Assessment Years: 2007-08 to 2014-15 First Appellate Authority has deleted the additions on account of on money since their name did not appear in the seized document. Even in the two decisions cited before us by the learned Counsel for the assessee, factual position is similar. Learned Commissioner (Appeals) has sustained a part of the addition the addition in case of the present assessee only for the reason that Siddhesh Jyoti E Wing, and F Wing appear in the seized document. However, whether the seized document actually refers to receipt of on money has to be proved through other corroborative evidences.

As it appears, to prove the content of seized document, the only other corroborative evidence available with the AO is the statements recorded from the Directors and employees of the Rohan Group. It is relevant to observe, in the statement recorded from Ms. Chaulla Joshi, a specific query was raised regarding the figures appearing against Siddhesh Jyoti E & F Wing. In reply, it has been stated that the figures of Rs. 18,000/- represent the quoted price for per square feet carpet area and the figure of Rs. 5,400/- represent rate per sq.ft. of built up area to arrive at the lump sum registered aggregate value. Except these evidences no other concrete evidence is available with the AO to establish on record that on money was actually received by the assessee. Therefore, proper enquiry has to be made with regard to the entries appearing in the name of Siddhesh Jyoti E & F Wing, as mentioned in seized document.

In course of hearing, it was brought to the notice of the Bench that based on the same seized document additions on account of on money was also made in case of Rohan Developers Pvt. Ltd. It was also brought to our notice that appeals relating to Rohan Developers Pvt. Ltd. involving identical issue have 8 & 6082-6083/MUM/2019 Assessment Years: 2007-08 to 2014-15 already been heard by the Tribunal. In our view, the decision of the co-ordinate Bench in case of Rohan Developers Pvt. Ltd. will have a crucial bearing on the issue involved in the present appeals, since, the additions therein have been made based on the very same seized document. In view of the aforesaid, we are inclined to restore the issue to the AO for fresh adjudication in the light of the decision of the co-ordinate Bench in case of M/s Rohan Developers Pvt. Ltd. (supra) and other materials on record including the orders passed by the Commissioner (Appeals) and Tribunal in respect of other group entities. It is made clear, the AO must confine himself only to the extent of additions sustained by learned Commissioner (Appeals) and nothing more. Needless to mention, the assessee must be provided reasonable opportunity of being heard before deciding the issue. Grounds are allowed for statistical purposes.

In the result, all the appeals are allowed for statistical purposes. Order pronounced in the open court on 24th November, 2021.