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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI B.R.R. KUMAR
O R D E R PER AMIT SHUKLA, JM
The aforesaid appeal has been filed by the assessee against the impugned order dated 26.04.2016, passed by Ld. CIT (Appeals), New Delhi for the quantum of assessment passed u/s.144/143(3) for the Assessment Year 2012-13. In the grounds of appeal
, the assessee has raised the following ground:
1. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in upholding the validity of the assessment proceedings and of the assessment framed in the case under section 144/ 143(3) of the Income Tax Act, 1961 (“The Act”), even though the mandatory notice u/s 143(2) was not served on the assessee.
2. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in upholding the validity of the assessment proceedings and of the assessment framed in the case that too under section 144/ 143(3) of the Act without considering the material on record and more-so when the assessment order was passed without following principles of natural justice and on the basis of material collected at the back of the assessee but never confronted to the assessee.
3. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming addition of Rs. 17,91,73,500/- (instead of addition of Rs. 17,91,00,000/- made in assessment), being money received in bank account of the assessee during the impugned year, as alleged unexplained credit under section 68 of the Act. 4. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.17,91,73,500/- on account of amount received from M/s Samayak Projects Ltd. during the impugned year as income generated by the assessee without appreciating correct facts of the case. 5. That in any view of the matter and in any case, the action of Ld. CIT (A) in confirming the addition of Rs. 17,91,73,500/- is bad in law and against the facts and circumstances, being a case of double taxation where the impugned amount has already been taxed in the hands of the real vendors and the impugned money received by the assessee has already been offered to tax in A.Y. 2013-14 as sale consideration for sale of shares.
6. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in holding the amount of Rs.35,91,73,500/- as taxable income of the assessee on account of alleged extinguishment of right over the property and more-so without appreciating the correct facts of the case and the such order passed was beyond jurisdiction.
7. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in not deleting the addition of Rs.2,84,88,000/-, added as alleged unexplained cash credits on account of cash deposited in bank account of the assessee during the impugned year and has further erred in not deciding the matter and setting aside part of the matter for verification by the Assessing Officer. 8. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in not deleting the addition of Rs.45,00,000/-, added as alleged unexplained cash credits on account of work contract receipts u/s 194C, and which had already been disclosed in the return of income by the assessee, and has further erred in not deciding the matter and setting aside the matter for verification by the Assessing Officer. 9. That the appellant craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other.”
2. The facts in brief are that, assessee has filed its return of income on 30.09.2012 declaring total income of Rs.20,18,440/-. The said return was also processed u/s. 143(1). Later on, the assessee’s case was selected for compulsory scrutiny on the basis of information received from ADIT (Inv.)-I, Faridabad. The content of such information as incorporated in the assessment order reads as under: “Information has been received from the office of the ADIT (Inv.)-1, Faridabad, vide letter No.ADIT/Inv-1/FBD/2013- 14/792 dated 01.08.2013, regarding the tax implications of certain transactions involving M/s. Aravali Heights Infratech P Ltd., M/s SRP Builders Ltd. and Sh. Yathartha Vashishtha (Prop. M/s Yathartha Constructions). (Refer F/A). As per PAN jurisdiction, only the last named person is assessed to tax in Ward-38(3), New Delhi. Briefly, the facts are as under:- i. During the course of investigations by ADIT (Inv)-1, Faridabad, it came to light that there was a piece of land measuring 8.395 acres in Sec-91, Gurgaon in the books of M/s Aravali Heights Infratech P Ltd. and 6.017 acres in the books of M/s SRP Builders Ltd. Both these companies had got joint license from Directorate of Town & Country Planning, Haryana, for construction/development of a group housing complex on the joint land measuring 14.412 acres. ii. Sh. Yathartha Vashishtha (Prop. M/s Yathartha Constructions) obtained 100% control in both companies by purchasing shares of these two companies from existing share holders vide MOU dated 25.06.2010. iii. M/s Aravali Heights Infratech P. Ltd., M/s SRP Builders Ltd. and Sh. Yathartha Vashishtha (Prop. M/s Yathartha Construction) entered into further agreement with M/s Samyak
Project P. Ltd. on 09.09.2010. Under this agreement, the first three entities sold construction/development/ownership rights in the land to the last named entity for a consideration ofRs.80.15 crores. iv. The above agreement was further modified on 29.09.2011 according to which all rights in the land were transferred by the entities to M/s. Samyak Project P. Ltd. for a consideration of Rs.82.07 crores. v. Sh.Yathartha Vashishtha (Prop. M/s. Yathartha Constructions) was also reported to have received Rs.35.91 crores from M/s. Samyak Project P. Ltd. against transfer of development, rights in favour of the latter. he amount of ?35.91 crores received by M/s Yathartha Constructions from M/s Samyak Project P. Ltd. is prima facie taxable in the hands of the former as income from their sources. The issue of deemed dividend u/s 2(22)(e) of the J.T. Act has also to be considered in the hands of this assessee as he has received consideration from M/s Samyak Project P Ltd. on behalf of M/s Aravali Heights Infratech P. Ltd. and M/s SRP Builders Ltd. vi The ADIT suggested a detailed examination of the matter in the hands of this assessee, i.e. Sh. Yathartha Vashishlha (Prop. M/s Yathartha Constructions), viii. A perusal of the payments received by M/s Yathartha Constrictions from M/s Samyak Project P. Ltd. (Annexure A-I of the letter of ADIT) reveal that a sum of Rs.18 crore was received by the former during F.Y. 2010-11 whereas sum of Rs.17.91 crores was received during the F.Y.2011-12. ix. The assessee has filed return for A. Y.2012-13 on 30.09.2012 declaring income of Rs.20,18,440/- (Refer F/B). The assessee is reportedly following cash system of accounting as per information disclosed in the returns of income.”
Accordingly, Assessing Officer issued notice u/s. 143(2) on 24.09.2013 which as per him was served upon the assessee within the statutory time limit. Later on, the case was transferred to Circle-63(1), New Delhi and thereafter another notice u/s. 143(2) was issued on 02.02.2015. However, as per the Assessing Officer none of the notices were complied with nor any reply was filed. The Assessing Officer also issued a show cause notice u/s. 271(1)(b) for non compliance. However, again no compliance was made. Finally, the Assessing Officer issued show cause notice to the assessee to submit the reply, the content of the notice has been incorporated in page 2 of the assessment order. However, again no such compliance was made.
The assessee is an individual and proprietor of ‘M/s. Yathartha Constructions’ engaged in the business of civil contractor and developing of group housing complex. On the information received from the Investigation Wing as incorporated above, the Assessing Officer observed that assessee had received sum of Rs.17.91 crores from M/s. Samyak Project Pvt. Ltd. and the payment of the said amount has also been confirmed by Shri S.K. Jain, the Director of M/s. Samyak Project Pvt. Ltd., during his statement on oath in response to summons issued u/s.131 before the ADIT (Inv.) on 16.04.2012 and 24.12.2012. The statement has been incorporated in the assessment order and also in the impugned appellate order. From the material and information received and from the statement, the Assessing Officer concluded that the amount of Rs.17.91 crore received from M/s. Samyak Projects Pvt. Ltd. which has been duly confirmed by the Director of the said company has not been offered as taxable income by the assessee nor any explanation was filed. Accordingly, he treated the said amount as unexplained cash credit which has been added u/s.68.
5. Further, Assessing Officer noted from the individual transaction statement downloaded from the AST that an amount of Rs.2,84,88,000/- was deposited in the account of Yathartha Construction in cash and further sum of Rs.45 lac received from M/s. Aravali Heights Infratech Pvt. Ltd. as payment relating to falling u/s.194C was not shown as a taxable income of the assessee. Accordingly, Assessing Officer added both amount and made addition of Rs.3,29,88,000/-. Accordingly, the assessment was completed on an income of Rs.21,42,21,440/-.
6. Before the Ld. CIT (A), the assessee had challenged the non service of notice u/s 143(2), dated 24.09.2013. Ld. CIT (A) on perusal of the assessment record noted that the notice u/s 143(2) was sent to the assessee on the address given on the return of income filed before the Assessing Officer which was as under:- “Shri Yatharth Vashisth, Prop. M/s. Yatharth Constructions 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi.” The assessee’s submission was that he had submitted a letter dated 05.07.2013 before the Assessing Officer about the intimation of change of address. This assertion of assessee has been rebutted by the Ld. CIT (A) on the ground that assessee had filed his return of income for the Assessment Year 2013-14, i.e., for the subsequent year on 30.09.2013 giving the same address which is after 05.07.2013 and therefore, the claim of the assessee that he has given intimation of change of address is not tenable. Apart from that, Ld. CIT(A) has also given a finding of fact that assessee has never produced any such letter stated to be filed on 05.07.2013 before him, informing the Assessing Officer about the change of address. Thus on this basis of material on record he dismissed the assessee’s objection about non service of notice u/s. 143(2).
7. Before the Ld. CIT (A), on merits, the assessee submitted that the assessee has declared his income u/s.44AD as he did not maintain any books of account, and therefore, provision of Section 68 cannot be applicable. From the documents relied upon by the Investigation Wing, it was submitted that following facts are apparent from the records which needs to be considered:- “Attention of your good-self is drawn towards agreement dated 29/09/2011, whereby the terms of agreement dated 09/09/2010 had been consolidated and clarified in detail. • From page 3 to 5 of the said agreement and (Paper Book Page No. 28-30), it may please be seen that subject matter of the agreement is a real estate project which was owned by M/s Aravali Heights Infratech Private Limited and M/s SRP Builders Limited. • Further from page 1 and 2 of the agreement dated 29/09/2011 (Paper Book Page No. 26-27), it may please be seen that first 3 parties has been described as owners, whereas the assessee has been described as a confirming party. • From page 7 (Paper Book Page No. 32) first term, it can be seen that these owners had transferred FSI in their project to M/s Samyak Projects Pvt. Ltd. From the above, it is absolutely clear that money in question that had been paid by M/s Samyak Projects Pvt. Ltd. had come against sale of the project by the owners and not by the assessee. In these circumstances liability to pay tax is on the owners. • For the reasons contained in the first para of Page 6 of agreement (paper book page no. 31) read with agreement dated 25/06/2010 (paper book page no. 9- 15), the assessee was merely a confirmatory party in the deal and was repository of the funds received by him on behalf of the owners of the project"
The assessee had acquired a right to obtain control in these project-owning companies subject to certain conditions. He, therefore, could have been a vital figure had he obtained such control prior to completion of projects and which could have been detrimental to the interest of the buyer, viz., M/s Samyak Projects Pvt Ltd. He was made confirmatory party just to morally and legally bound the assessee for smooth execution of agreement. • On the other hand, the assessee was to obtain the shares/control over these companies. The impugned project consisted of a great value in the company. It is also submitted that the assessee had not obtain control over the companies as yet since the shares were not transferred in his name. In such a situation, the directors/shareholders in control of these companies would have had a free run if money was allowed to be lying in the account of these companies.
To secure his own interest the assessee received a part of the money from M/s Samyak Projects Pvt. Ltd. However, it may please be seen that the money and the receipt it represented did not belong to the assessee per se, but were the income of these companies only. • Further, it may be seen that the assessee had paid an amount of Rs. 17.12 crores to these land owners out of this sum of Rs. 35.91 crore. • Further, later the assessee had also purchased and sold the shares of these two companies to M/s Samyak Projects Pvt. Ltd. An agreement to this effect was entered into on 29/09/2011 itself i.e. the very date on which M/s Aravali Heights Infratech Private Limited and M/s SRP Builders Limited transferred their project to M/s Samyak Projects Pvt. Ltd. Out of this Rs. 35.91 crore, the assessee had adjusted Rs. 18.35 crore against sale of these shares to M/s Samyak Projects Pvt. Ltd. This deal was completed in August next year and capital gain tax had been paid next year. The relevant documents in this regard are also attached in paper book, showing the transfer of these shares to M/s Samyak Projects Pvt. Ltd. and Rs. 18.35 crores as sale consideration against sale of these shares. Thus, the nature of this receipt of Rs.35.91 crore is also clearly established in the hands of the assessee and cannot be added as taxable income of the assessee.”
Ld. CIT (A) after considering the submissions and on perusal of the facts and material on record, have given following findings of fact:
1. 1. That the appellant had received an amount of Rs.17.91 crore from M/s Samyak Projects Ltd during the year under consideration.
2. That M/s Aravali Heights Infratech Pvt Ltd, Sh Vikram Singh, and M/s SRP Builders are owners of total of 115 kanals and 6 marlas (apprpx.14.412 acres) land at residential sector 91 of Gurgaon- Manesar Urban Master plan 2021.
3. That Sh Vikram Singh had relinquished his part of the land to M/s Aravali Heights Infratech P Ltd and M/s SRP Builders Limited for a consideration of Rs.3.11 crore.
4. That M/s SRP Builders and M/s Aravali Heights Infratech Pvt Ltd had entered into an agreement with M/s Yatharth Construction vide an MOU dated 25/06/2010 where in M/s Yatharth Construction would acquire the right to develop the said land along with purchase of shares resulting in gradual 100% control in M/s SRP Builders Ltd and M/s Aravali Heights Infratech P Ltd. .
That as per MOU, an amount of Rs.55.68 Cr would be given by M/s Yatharth Construction to the vendors.
That as part of MOU, M/s Yatharth Construction had paid an amount of Rs. 12.42 crore to the vendors on 25/06/2010.
That on 09/09/2010, an agreement was signed between M/s Yatharth Construction and the vendors (i.e M/s Aravali heights Infratech P. Ltd, Sh Vikram Singh and M/s SRP Builders Limited) wherein, M/s Yatharth construction agreed to relinquish his rights over the land property in favour of the vendors at a total of consideration of Rs.80,15,40,000/-. As first installment of the payment, the vendors have paid an amount of Rs.14 crore to M/s Yatharth Construction on 3rd, 6th and 9th September, 2010.
8. That on 29th September, 2011, an agreement was signed between M/s Aravali Heights Infratech P. Ltd, M/s SRS Builders Limited and Sh Vikram Singh as first, second and 3rd party (collectively referred as ‘owners’), M/s Yatharth Construction as confirming/fourth party on one side and M/s Samyak Projects Pvt. Limited as the party of the second part on the other side. That the owners and the confirming party had agreed to transfer their interest in the land property to M/s Samyak Projects Limited for a total consideration of Rs.82,07,39,540/-.
That in the entire deal M/s Yatharth Construction has got an amount of Rs.35,91,73,500/- from M/s Samyak Projects Limited. Out of the above mentioned amount M/s Yatharth construction had got an amount of Rs.17,91,73,500/- during the year under consideration. That the appellant was not the owner of the property in question.
2. That he entered into a development agreement with the owners and got the right to develop the property. The same right he has sold it back to the owner. Thereafter the owners and the appellant has transferred the right to M/s Samyak Projects Limited. And in the process, the appellant got an amount of Rs.35,91,73,500/-. Out of the above mentioned amount M/s Yatharth Construction had got an amount of Rs.17,91,73,500/- during the year under consideration.
9. On the analysis of the aforesaid facts and material on record, Ld. CIT (A) held that assessee has earned an income of Rs.17,91,73,500/- during the year under consideration and assessee’s claim that it has got the right over the shareholding of M/s. Aravali Heights and SRP Builders Ltd. whichhas been stated to be sold to M/s. Samyak Projects Pvt. Ltd. in subsequent year and therefore, the said amount can be only taxed as capital gain, is devoid of any logic and merits. He further held that there is no denying fact that assessee has generated an income of Rs.35,91,73,500/- in the entire chain of transaction and the income so generated is required to be brought to tax and what assessee is claiming is merely the application of such income which has been invested in such shares, later on sold to M/s. Samyak Projects Ltd. The income generated out of such share transfer is to be taxed under the head ‘capital gain’. However, the assessee’s claim that amount of Rs.35,91,73,500/- is in the nature of advance is divorced from the facts and is not borne out from any material on record. The amount received from M/s. Samyak Projects Ltd. is on account extinguishment of his right over the property agreement of the assessee has entered into previously with the original owner of the land and the said amount is full and final payment. Since the assessee was never the owner of the land, hence, the entire amount he got in the deal as confirming party is required to be taxed in his hand. Therefore, Assessing Officer is justified in taxing the amount of Rs.17,91,73,500/-.
Regarding addition of Rs.2,84,88,000/- assessee stated that amount deposited in the bank account was only Rs. 1,67,84,000/- and not Rs.2,84,88,000/- and the details of such deposits have not been made available. It was further submitted that assessee has withdrawn sum of Rs.1,67,96,450/- from his bank account during the year and out of that amount of Rs.1,64,84,000/- has been deposited. The source of the said deposit was received by assessee for a sum of Rs.1 crore from M/s. Samyak Prokjects Pvt. Ltd. in the immediately preceding year in cash which is included in Rs.35.91 crore and assessee has also withdrawn Rs.2.53 crore, and therefore, there was a sufficient sum available with the assessee. The Ld. CIT(A) held that none of the submissions and explanation of the assessee are supported by any evidence and is merely a blank statement that the cash deposits are from the cash withdrawal made earlier and accordingly he has confirmed the addition of Rs.1,67,84,000/- instead of Rs.2,84,88,000/-.
Lastly, with regard to the addition of Rs.45 lacs, he directed the Assessing Officer to verify the computation of income filed and give relief if the amount has already been offered to tax.
Before us, ld. counsel for the assessee, Mr. Kapil Goel challenging the validity of the assessment order on the ground that notice u/s 143(2) issued on 24.09.2013 was never served upon the assessee within the stipulated period, therefore, assessment could not have been completed u/s.143(3) and consequently, entire addition needs to be quashed. In the course of his argument, he submitted that the assessee after filing of return of income on 30.09.2013 had filed a letter dated 5th July, 2013 intimating the Assessing Officer that assessee has shifted his office to, “House no. 416, Sector 21-B, Faridabad, Haryana”. He also pointed out that the said letter bears the acknowledgement stamp of the Assessing Officer also. He further pointed out that this objection letter was also part of the submission before the Ld. CIT (A) and Ld. CIT(A) has wrongly held that no such intimation was given to the Assessing Officer. Once assessee has intimated the change the address then it was incumbent upon the Assessing Officer to serve the notice on the change of address of the assessee. He also filed the copy of the notice dated 24.09.2013 which has been placed in the paper book at page 2 and the dispatch register obtained from Department through RTI pointing out that the notice was sent on the old address mentioned as “152, 2nd Floor, Mohan Bhawan, Sarai Junega, Delhi 25”. However, there is no service record that the said notice was served upon the assessee. He further pointed out that all the notices sent by the Assessing Officer have been sent on the old address including the second notice u/s. 143(2). Hence, in absence of any valid service of notice, the assessment record is bad in law and in support he strongly relied upon judgment of Hon’ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon as reported in (2010), 321 ITR 362 (SC) and following other decisions:-
“1. Delhi High Court in the case of Veena Devi karnani vs. ITO in WP(C) 7540/2018 order dated 14.09.2018. 2. Bengaluru High Court in the case of Nittur Vasanth Kumar Mahesh, order dated 11.04.2019 3. Bombay High Court in the case of Harjeet Surajprakash Girotra, order dated 16.07.2019. 4. Pune ITAT B Bench in the case of Anil Kisanlal Marda, order dated 01.07.2019.”
On merits, he submitted that first of all, the material gathered by the ADIT Wing was never supplied by the assessee in the final show notice issued u/s.144, and therefore, such material cannot be used against the assessee. He further submitted that though the show cause notice issued u/s.144 was served upon the assessee on 02.03.2015 and assessment order has been passed shortly thereafter, that is, on 10.03.2015 without giving proper opportunity. Hence, there is violation of principles of natural justice. On merits, he relied upon the submission and explanation given by the assessee before the Ld. CIT (A) which has been incorporated above.
Ld. CIT-DR, Mr. S.S. Rana on behalf of the Revenue rebutting the contention raised by the assessee submitted that, it is an undisputed fact that the notice u/s.143(2) was issued on 24.09.2013 and it was sent through speed post on the address mentioned in the return of income filed by the assessee within the statutory time limit. He had also enclosed the copy of order sheet entries and the details of notice sent along with speed post number and the address on which the notice was issued. He also annexed the copy of notice u/s. 143(2) alongwith the proof of sending the notice by speed post No. ED444. He further pointed out that the assessee before the Ld. CIT(A) has failed to produce the letter dated 05.07.2013; and not only that, in the assessment record also there is no such letter filed by the assessee. In support of his averment, he has also produced the assessment records. Another glaring fact as culled out from the assessment records, he pointed out that so called acknowledgement seal given in the alleged letter is fake or non genuine. This he tried to establish from the assessment record that the Assessing Officer’s seal appearing in all the notices sent during the same period was a round seal and the seal which is the said letter of assessee is a rectangular shape and does not appear any emblem or diary number or any acknowledgement. Thus, authenticity of this seal is in serious doubts. Hence, this so called letter dated 05.07.2013 intimating the change of address to the Assessing Officer is nothing but afterthought. Even without prejudice, he submitted that, if the assessee is claiming that he has filed such letter before the Assessing Officer intimating the address, then how post that letter the assessee has filed the return of income for the Assessment Year 2013-14 on 30.09.2013 wherein assessee himself has mentioned the same address. This return has been filed after so called intimation letter dated 05.07.2013. Further, even in the notice issued to the HDFC u/s 133(6) the reply of which was received on 19.10.2015, the address in the bank account of the assessee was exactly the same as mentioned in the notice u/s.143(2). Thus, not only the assessee’s claim is false but also mala fide. He further submitted that the notice u/s. 143(2) generated by the Department on the basis of the address of the assessee given in PAN data base and PAN data showed the same address. In support of his argument, he relied upon the following two judgments of the Hon’ble Jurisdictional High Court:-
In CIT Vs Madhsy Films (P.) Ltd. (2008) 301 ITR 69 (Delhi), the Hon’ble Delhi High Court held that, where notice issued to assessee under section 143(2) had been dispatched by speed post at its address as per its return and same had not been received back, it could be presumed that it had reached assessee, particularly when no affidavit had been filed by assessee to effect that notice was not received by it.
CIT Vs. Yamu Industries Ltd 306 ITR 309 (Delhi), where Hon’ble Delhi High Court held that where notice under section 143(2) sent by registered post at correct address of assessee had not been received back ‘unserved’ within period of thirty days of its issuance, there was a presumption under law that said notice had been duly served upon assessee within period of limitation.”
On merits, he strongly relied upon the order of the Ld. CIT (A) and submitted that the Investigation Wing has given a very categorical information and there was a statement on oath confirmed by Shri S.K. Jain Director of M/s. Samyak Projects Ltd. that he has given the said money to the assessee and the said money has not been disclosed in the return of income, therefore, the Assessing Officer is justified in making the addition u/s.68. Further, in support, he relied upon the following judgments:-
“1. PCIT vs. NRA Iron & Steel P. Ltd., (2019) 412 ITR 161 (SC) 2. PCIT vs. NDR Promoters Pvt. Ltd., (2019) 410 ITR 379 (Delhi) 3. Pratham Telecom India Pvt. Ltd. vs. DCIT, (2018-TIOL- 1983-HC-MIM-IT. 4. J J Development Pvt. Ltd. vs. CIT (2018-TIOL-395-SC- IT) 5. CIT vs. Nipun Builders & Developers P. Ltd., 350 ITR 407. 6. CIT vs. Nova Promoters & Finlease P. Ltd., 342 ITR 169.”
We have heard the rival submissions and perused the relevant material placed on record. The assessee has filed his return of income on 30.09.2013 wherein the following address was mentioned:- “Shri Yatharth Vashisth, Prop. M/s. Yatharth Construction, 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi.” The said address was also there in the PAN data base of the assessee. In case, there is a change in address then it is incumbent upon the assessee u/s. 139A (5)(d) of the Income Tax Act to intimate the Assessing Officer change of address or the name or the nature of business on the basis of which PAN was allotted to him. If there is no such intimation then any notices sent on the address mentioned in the return of income has to be treated as the correct address. The entire case of the ld. counsel hinges upon the fact that the assessee vide letter dated 5th July, 2015 has intimated the Assessing Officer for the change of address. The scanned copy of the said letter is incorporated hereunder:
It has been submitted before us that the said letter was also mentioned in the submissions made before the Ld. CIT (A), and therefore, once intimation has been given to the Assessing Officer, then it was incumbent upon the Assessing Officer to serve the notice on the change of address. However, the averments made by the ld. counsel on the face of the assessment records, does not appeal to us for the reason that:- Firstly, it has been held by the ld. CIT (A) that during the course of the appellate proceedings that this letter was never shown nor filed before him, which is clear from his finding given at page 8 of his order which reads as under: “The appellant has claimed that it has submitted a letter dated 05/07/2013 about the change of address. However, I have found that the appellant had filed its return of income for A.Y 2013-14 on 30/09/2013 giving the same address i.e. 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi-110025. Therefore the appellant’s claim that it has changed its address from 152, 2nd Floor, Mohan Bhawan, Sarai Julena , Delhi-110025 is not tenable. Further, the appellant has also failed to produce any such letter that it has claimed to have filed before the A.O on 05/07/2013 informing him about the change of address. In view of the obvious contradiction in the appellant’s claim, I find no merit in the argument of the appellant in not receiving the notices when it was served at the address given in the return of income for the year under consideration as also the same address as mentioned in the subsequent year’s return. Appellant has himself admitted that it did receive show cause notice sent by the A.O on the same address before assessing the income under section 144 of the Act. On facts and circumstances of the case, the appellant’s grounds of appeal on these issues are dismissed.”
Not only that, even the assessment records which has been produced before us by the ld. CIT-DR, no such letter is there on record. The aforesaid finding of the ld. CIT (A), thus gets corroborated that there was no such letter in existence in the file of the Department. Another peculiar fact which has been pointed out by the ld. CIT-DR is that the seal of office of ITO, Ward-38(3) is entirely different from the seal of the same office available on assessment record which is a round seal with Ashok Emblem and such a seal is appearing in most of the notices and in the assessment folders; and there is no such rectangular seal which is appearing in the letter dated 5th July 2013. Moreover, if any official seal is stamped for acknowledging the receiving of Dak or letter, then there is always a diary number or acknowledgement number which is too absent in the said seal.
Lastly, if assessee has intimated the change of address on 5th of July 2013, then why assessee has filed his return of income for the A.Y. 2013-14 on 30/09/2013 giving the same address. This goes to show that this letter of intimation is after thought.
Accordingly, the claim of the assessee is not only fallacious but also spurious, hence, the explanation that the change of address was intimated to the Assessing Officer is incorrect and same is rejected.
18. It is a well settled law that if a notice has been spent through registered post or speed post on the address mentioned by the assessee in the return of income which is as PAN data base, then in terms of Section 27 of the General Clauses Act, 1987, service is deemed to have been affected unless the contrary is proved. Though, this presumption u/s.27 of the General Clauses Act is rebuttal presumption but in absence of any proof to the contrary, there is a strong presumption of a proper service of notice. Here, in this case, the record shows that the notice has been sent through speed post by the Assessing Officer and the dispatch Register shows a bulk speed post of various notices sent to various assessee’s on the same date mentioning the speed post sent from the office of the ITO, Ward-38(3) which is 902-96 and the ED Number has been mentioned as 440. Once a notice has been sent on a proper address and said notice has not returned back, then it is deemed to have been affected in time to the assessee. The Hon’ble Jurisdictional High Court in the case of CIT vs. Madhsy Films Pvt. Ltd as reported in (2008) 301 ITR 69 (Del.), in the context of notices issued u/s. 143(2) held that, where notice has been issued to the assessee u/s.143(2) and has been sent by the speed post on the given address as per the return of income and if the same has not been received back, then it is presumed that it has reached the assessee. Similar view has been taken in the case of CIT vs. Yamu Industries Ltd. as reported in (2008) 306 ITR 309 (Del). Accordingly, we hold that here in this case notice has not only been sent on the address mentioned in the return of income but also been duly served under the law within statutory time limit and accordingly the ground raised by the assessee is dismissed.
On merits of the addition, we find that here in this case during the investigation proceedings it was found that there was a piece of land measuring 8.395 acres in Sec-91, Gurgaon in the books of M/s Aravali Heights Infratech P Ltd. and 6.017 acres in the books of M/s SRP Builders Ltd. Both these companies had got joint license from Directorate of Town & Country Planning, Haryana, for construction/ development of a group housing complex on the joint land measuring 14.412 acres. Sri Yathartha Vashishtha (Prop. M/s Yathartha Constructions) obtained 100% control in both companies by purchasing shares of these two companies from existing share holders vide MOU dated 25.06.2010. M/s Aravali Heights Infratech P. Ltd.; M/s SRP Builders Ltd.; and Sri Yathartha Vashishtha (Prop. M/s Yathartha Construction) entered into further agreement with M/s Samyak Project P. Ltd. on 09.09.2010. Under this agreement, the first three entities sold construction/development/ownership rights in the land to the last named entity for a consideration of Rs.80.15 crores. The above agreement was further modified on 29.09.2011 according to which all rights in the land were transferred by the entities to M/s. Samyak Project P. Ltd. for a consideration of Rs.82.07 crores. Assessee was also reported to have received Rs.35.91 crores from M/s. Samyak Project P. Ltd. against transfer of development rights in favour of the later. Thus, the amount of Rs. 35.91 crores received by M/s Yathartha Constructions from M/s Samyak Project P. Ltd. is not any kind of advance as claimed by the assessee but taxable receipts, as assessee has received the amount on account of extinguishment of rights emanating from the agreement entered previously with original owner. In fact assessee was never the owner of the property but has received the amount only as confirming party which is prima facie taxable in the hands of the assessee as income from their sources.
Further, from the perusal of the payment receipts of M/s. Yathartha Constructions from M/s. Samyak Projects Pvt. Ltd., it is evident that sum of Rs.1 crore was received by the assessee during the financial year 2010-11 and balance sum of Rs.17.91 crore was received during the financial Year 2011-12. In the statement recorded on oath of Shri S.K. Jain, Director of the Samyak Projects Ltd., he has categorically stated that the money was given to the assessee as confirming party and is not in the nature of advance. For the sake of ready reference the relevant portion of statement is incorporated herein below: “Q6. I am showing you agreement dated29.09,2011 between I) Aravali Height Infratech Pvt. Ltd. 2) Vikarm Singh 3) SRP Builders Ltd.-referred as first part or owner & Yatharth Construction-referred as confirming party & Samayak Projects Pvt. Ltd. kindly explains major highlights of this agreement.
Ans. Before this, I would like to draw your attention to agreement dated 09.09.2010 between the above mentioned parties (copy submitted). As per clause 7 & 8 read with clause 2b of this agreement Samayak Projects Pvt. Ltd. was given the right to commence ground work on the land In question at the cost & expenses of/Samayak Projects Pvt. Lid. As far as I remember detail of payment schedule as per clause 2b of this agreement was made by 31.03.2011 (part of record will be submitted). It Is also reflected in the balance sheet of Samayak as on 3J.03.2011. Q 7. As per clause 7 & 8 of agreement dated 9th Sep, 2010, you were given right to complete ground work on the land admeasuring, 14.412 Acres. Kindly explain in which shape the above land was given to you. Ans. The land given was plain/raw land having no excavation In any part of the land. No boundary wall was constructed except small cemented poles on periphery of the land for identification, it was also agreed as per clause no. 7&8 of agreement dated 09.09.2010, that all works has to be done on the said land by Samayak Projects Pvt. Ltd. (referred as record party) after the payment made In clause 2 b (it is on payment made up to 31.03.2011, as per record). Thus no work was done on said land of whatsoever nature by first party & confirming part/recorded owner (as per agreement dated 09.09.2010). It Is also brought to your knowledge that as per clause no. 9 of agreement dated 09.09.2010, the first party and the confirming party have also given to Samayak or its nominee right to book/allot/sole of built up area. By clause 14 of agreement dated 09.09.2010 Samayak Projects Pvt. Ltd. was given full right to nominate or assign this agreement In favour of any party. Q 8. As per agreement dated 29.09.2011 schedule-l (detail of payments so far M/s.Samayak Projects Pvt. Has to made payment of Rs. 82,07,39,540/-. Kindly explain whether any obligations were there on the part of I" party (I.e. Aravall Heights Infratech Pvt. Ltd.), Vikarm Singh, SRP Builders Ltd & Yatharth Construction toward the liability) said land (with regard to expenditure of Acres approx situated in Sec-91, Manesar, Gurgaon. Ans. As per agreement dated 29.09.2011 between the abovementioned parties, the first party mentioned in question 8 had to execute sale deed for transfer of title after getting requisite permission from concerned authorities. Beside this the first party had no other obligation towards land. Q 9. When was MOU for collaboration/agreement on land admeasuring approx. 14 acres, Sec-91, Manesar, Gurgaon was done by Samayak Projects Pvt. Ltd. Ans. MOU for collaboration was entered into in the month of January, 2011 between Samayak Projects Pvt. Ltd & Ansal API. Q 10. Kindly specify what Is the present status of land admeasuring 14 Acres, Sec-91, Manesar, Gurgaon as on date. Ans. To the best of my knowledge on some part of land there is some grass and little pit of ground improvement by the Developer. Q.11 . As per schedule-1 of agreement dated 29.09.2011 Samayak Projects Pvt. Ltd. was supposed to make payment of Rs. 82,07,39,540/-, Kindly specify whether all the payments have been made by Samayak to the parties of agreement. Ans. Samayak Projects Pvt. Ltd. has made payment of 82,45,74,329/- upto date. I am providing you Certificate dated 15.12.2012 from C.A. showing details of payment made against this agreement. Statement dated 24.12. 2012: Q.7. Please explain whether payment for acquiring land right In respect of land measuring 14.41 acres situated at Sector-91 Gurgaon has been paid In full and final manner, If yes phase give the details with evidence? Ans. We have made full and final payment In lieu of the land rights acquired from the M/s Aravali Heights infrastructure Pvt. Ltd. M/s Yatharth Constructors a M/s SRP Builders Pvt. Ltd. and Sh. Vikram Singh. The detail of payment have been duly mentioned in agreement doted 25.09.2012 and copy for the same is given to you. Q.8 Please explain whether possession of the plot situated at 91, Curgaon acquired from above sale' parties have been taken by you or your company. If yes Please furnish the evidence of same Including a possession letter? Ans. We have taken the possession of above said fond for carrying out ground work after making the payment of Rs. 40 crores in terms of agreement doted 9.9.2010 but could not taken the full and final possession till the 29,09.2011 because of the part payment. However, we have taken the full and final possession for all purpose on 29.09.2011 vide possession letter dated Nil and as per agreement dated 29.09.2011 after making the complete payment of Rs. 82.45 crores including PDC Cheques. Q,9 Please explain whether you have done any Improvement after taking full and final possession over the above said plot In term of leveling of land, Boundary wall and any other development/construct what so ever, if yes, please give the details of the total Investment made thereafter? Ans. We have not made any investment/improvement over the plot of land. However we had entered into an agreement with JMD Ltd. for doing development and constructors through agreement dated September, 2010. They have started little digging work but due to certain dispute the agreement was cancelled with them in the month of April, 2011. The copy of the both agreement will be submitted to you. However we again entered into MOU with M/s Ansal Properties & Infrastructure Pvt. Ltd. for the development and construct of project nearly in April, May, 2011 and they have started development work on (Boundary wall & Ground work) the land. Off course we have entered into an agreement with these companies after taking due possession of ground work in terms of agreement dated 09. V9.2009.09.2010. However, we have taken the final possession from M/s Aravali Heights. SRR, Yathartha Constructor and Shri Vikram Singh for oil purpose on 29.09.2011
Q.1O Please explain you have handed over possession to M/s JMD Limited for development and constructor of the land. If yes, please furnish the evidence? Ans. Yes we have given possession for ground work to M/s JMO Ltd through agreement mode in the month of September, 2010. Q.11. Please explain whether you have received any payment from M/s JMD Ltd, Ans. Yes we have received Rs. 16 Cr. out of 63 Crores (Approx.) Q13. Please explain whether M/s Aravali Heights Infratech Pvt. Ltd., M/s SRR Builders Led. M/s Yatharth Construction and Sh. Vikram Singh have made any general Power and Attorney In favour of you. If yes give the copy of the same and state the exact status of GPA as on the date? Ans. l3. Yes the above referred persons through their Authorized Signatory have made GPA In favour of me on 29.09.2Gil duly registered with the Sub-Registrar of Noida Authority for oil purpose Including development and constructor Sale of flats, sale of land etc. The GPA Is still active till date. The same was again affirmed by the agreement dated 25.08,2012. Thus the general Power of Attorney is stand valid in my favour. Q14. Please explain whether you have handed over the Physical Possession over the, land for development and constructor to M/s Ansal Properties and Infrastructure Ltd. If yes, please furnish the evidence for the same? Ans. Yes, we have handed over the Physical Possession to them for development and construct of the land and they are carrying out development activities on the plot of land. So far, they have completed boundary wall around the plot of land and done some ground work. Q15 Please explain the nature and terms and conditions of agreement made with M/s Amol Properties and Infrastructure Ltd. (API)?
Ans. We are entered into MOU with API for the development and constructor of the payment for residential apartment in ore and revenue saving basis we have received approx. Rs.95 crores. So far from API till today as per MOU from we will received 34.5% share in the revenue received from sale of the project if some portion of built-up area remain unsold turn same share of 34.5%of total remaining on sated are will remain with me. Q16. Please explain at what capacity in what shape you have received Rs. 95 Crores from API? Ans. I have received of Rs. 95 Crores out of 34.5% out of my share from API as advance and security. Q17. Please explain whether any court proceedings are Undergoing with Director of the company Mr. Vashisht? Ans. Yes Mr. S.K. Vasisht has filed criminal case against me at Noida for robbery of Rs. 9000/- and snatching of ATM card as per FIR. The paper book (FIR) and other relevant papers/documents will be submitted to you. We have filed application before Hon’ble High Court Allahabad under section 482 for quashing the false allegation charge sheet against me. Q. No.
Please explain whether any proceedings have been filed against you at Gurgaon Court ( In any Court) ? Ans. Mr. S. K. Vashist has filed a suit in the Gurgaon Court for demand of some amount (Rs. Five Crores ) against sale of the plot situated at Sector 91, Gurgaon and some has been referred by the Hon’ble Court for arbitration to Delhi before three arbitrators approved by us on agreed basis namely Justice R.S. Sodi, Justice Kulshret and Hon’ble Justice Arun Kumar. Q.20 Please explain whether there is any dispute over the possession over the land situated at Section-91, Gurgaon, acquired from Aravali and Other? If yes give the complete particulars and copy of dispute filed in any court. Ans. There is no dispute on possession of aforesaid land neighbor between us nor any court. As I have already stated and explain above that we have already over and full and final
possession from Aravali and other companies on 29.09.2011 as per agreement I am submitting the copy of possession letter duly signed by them in support of the same apart from the agreement dated 29.09.2011. I also explain earlier that possession from ground work land already been with us w.e.f. first week of Febaruary,2011 on payment of Rs.40 crores paid by us as per agreement dated 09.09.2012. Q. No.22 Please explain whether M/s.Aravali Heights Infrastructure Pvt. Ltd., M/s. SRP Builders Ltd., M/s. Yatharath Construction and Sh. Vikaram Singh has taken back passion of above said plot of land situated in Sector- 91, Gurgao after executing GPA in favour of you and after entering into agreement on 09.09.2010? if yes please give the compete particulars ?. Ans. No, we never given passion back to M/s. Aravali Heights and Infrastructure Pvt. Ltd and other mentioned above of plot of land situated at Sector-91 Gurgaon after taking possession from them first time in the first week of Feb.2011 after making payment of Rs.40 crores as terms and condition of agreement dated 09.09.2010 . Even they also did not ask and challenged the passion given to us in the first week of Feb.2013. Q.23 Please explain whether M/s. Aravali Heights Infrastructure Pvt. Ltd., and other persons mention above have incurred any expenditure and made any Improvement on the above said plot of land after entering into agreement first time with you on 9.9.2010 and after executing GPA in favour of you on 29.10.2011?? if yes, please give the details of expenditure incurred or improvement made, if any. Ans. No the above mentioned parties namely M/s. Aravali Heights Infrastructure Pvt. Ltd and other companies have incurred any expenses on the improvement and development on the above said plot after entering into agreement with us on 9.9.2010 and therefore. The terms and condition of all the four agreement made with them from time to time have not allowed them and no obligation to carry out any activities of development and improvement including construction thereon. I categorically clearly that whether, improvement on ground work and construction of boundary wall have been made over the above said plot land only by M/s.Ansal properties infrastructure Ltd. Ltd. ( AP-i) after entering into MOU with them. Q.24 Please explain whether agreements entered with M/s.Aravali Heights Infrastructure Pvt. Ltd and other persons and possession letter issued in favour of you and GPA executed in favour of you by them are subject matter or any dispute before any Court of law. If yes, please give the evidence of them? Ans. No, no Courts proceedings are pending in any court of law in respect of agreement, GPA and possession letter issued /signed in favour of us by them. However a case filed against me by in Shri S.K. Vasant in Gurgaon Court for claim of Rs.5 crore which has no relevance with these documents) I stated above that this matter give /referred to the arbitrator, Delhi. However, during the pendency of arbitrator proceeding we both the parties have resolved the matter out of the arbitrator/Court and entered into agreement finally on 25.08.2012 and the copy of same has already been submitted to arbitrator Court and to your goodself it is further stated that agreement, GPA and possession were never challenged in any court of law by them.”
In the light of these categorical information and material it is clear that assessee got the money as confirming party and not on behalf of someone else or as some kind of advance. It fairly evident from the records that assessee has received the amount of Rs.17.91 crore from M/s. Samyak Projects Pvt. Ltd. which is nothing but income of the assessee, because M/s. Aravali Heights Infratech P. Ltd. had entered into an agreement with M/s. Yathartha Constructions vide MOU where M/s. Samyak Projects Ltd. acquire the right to develop the said land along with purchase of share resulting in 100% control in both the companies. As per the MOU amounting to Rs.55.68 crore would be given to M/s. Yathartha Constructions and part of the same amount was also paid. Later on 9.9.2010 agreement was signed between M/s. Yathartha Construction and the ventures wherein M/s. Yathartha Constructions agreed to relinquish his right over the land property in favour of the venture at the total consideration of Rs.80,15,40,000/- and even the first installment was paid on September, 2010. Later on 29th September, 2011 an agreement was signed between both the parties, Aravali Heights, SRS Builders Ltd. and M/s. Samyak Projects Ltd. as first and second party M/s. Yathartha Constructions was a confirming party on one side and M/s. Samyak Projects Ltd on the other side wherein the onus in the confirming party had agreed to transfer the interest in land to M/s. Samyak Projects Ltd. to a total consideration of Rs.81.88 crores. Thus, in the entire deal assessee gets an amount of Rs.35,91,73,500 which definitely is an income of the assessee which has not been shown. Thus, the finding arrived by the Ld. CIT (A) cannot be tinkered and accordingly this issue is decided against the assessee and the grounds raised on this issue are dismissed.
Lastly, on the issue of Rs. 1,67,84,000/- on account of deposits in accounts of the assessee, neither any evidence has been filed before the authorities below in support of any cash withdrawal which has been claimed to have been re- deposited nor any proper supporting documents or the explanation about the source of deposit has been filed. In absence of any rebuttal or explanation, the amount of deposits of Rs. 1,67,84,000/- has rightly been taxed as unexplained. Ld. CIT (A) has observed that the assessee has not been able to provide any evidence in support of his claims and merely giving a generalized statement that the cash deposits are from the cash withdrawal made earlier is not sufficient evidence. The assessee has not been able to correlate the cash withdrawn and subsequent deposits. In absence of any cogent reason and evidence, the authorities below are justified in holding cash deposits as unexplained. Accordingly, this ground is also dismissed.
Lastly, on the issue of sum of Rs.45 lacs, Ld. CIT(A) has already directed the Assessing Officer to verify from the computation of income filed alongwith the return of income whether the same has been offered to tax or not. Accordingly, the appeal of the assessee is dismissed. No interference is called for on such direction.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on 16th December, 2019.