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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI & AND & SHRI KULDIP SINGH SHRI KULDIP SINGHSHRI KULDIP SINGH SHRI KULDIP SINGH
PER BENCH PER BENCH :- PER BENCH PER BENCH These appeals by the Department and the cross-objections by the assessees for the assessment year 2006-07 are directed against the order of learned CIT(A)-27, New Delhi dated 24th July, 2015.
Since in all these appeals common grounds have been raised by the Revenue and by the assessee in their cross-objections, therefore, all the above appeals and the cross-objections are being considered together.
The facts of the case are that there was search and seizure operation in this group of cases on 10th February, 2012. During the course of search, statement of Shri Lalit Mahajan i.e., the assessee in appeal No.5590/Del/2015 was recorded, in which, he admitted of cash
5 ITA-5585/Del/2015 & 11 others investment by him and other family members in respect of booking of space in Indirapuram Habitat Centre. The total payment in cash by various family members was `10 crores, details of which are given at page 2 of the assessment order, which is reproduced below for ready reference :-
S.No. Name of Investor Area/Unit No. Amount paid in Amount paid in Cheque Cash 1 Smt. Rinku Mahajan 2000 sq.ft. 30,80,000 99,92,000 2 Sh. Nitin Mahajan 3500 sq.ft. 53,90,000 1,75,26,000 3. Smt. Shivali Mahajan 2000 sq.ft. 30,80,000 99,92,000 4. Sh. Jatin Mahajan 3500 sq.ft. 53,90,000 1,75,26,000 5. Smt. Anila Mahajan 4500 sq.ft. 69,30,000 2,24,82,000 6. Sh. Lalit Mahajan 4500 sq.ft. 69,30,000 2,24,82,000 Total 3,08,00,000 10,00,00,000
However, during the course of assessment proceedings, the assessee filed letter dated 11th March, 2014 in which he denied to have made any investment in cash in Indirapuram Habitat Centre. The Assessing Officer recorded his statement u/s 131 in which also he reiterated the same i.e., denied making any cash investment in Indirapuram Habitat Centre. The Assessing Officer also noted that during the course of search in Aerens Group on 17th August, 2011, the hard disk of the computer was seized and the printout of the file named as ‘D.P. Correction Sheet.xls’ contained details of payments made by the family members of the Mahajan family for booking space in the said property. Therefore, the Assessing Officer, relying upon such excel sheet found during the course of search of Aerens Group and also the statement of Shri Lalit Mahajan during the course of search at Mahajan family, made the addition of `10 crores in the case of various family members as unexplained investment in the acquisition of space in Indirapuram Habitat Centre. On appeal, learned CIT(A) deleted the addition. The Revenue, aggrieved by the order of 6 ITA-5585/Del/2015 & 11 others the learned CIT(A), is in appeal. However, the assessee is in cross- objection because the assessee’s contention before the CIT(A) that the addition is beyond the scope of assessment framed u/s 153A was not accepted by the CIT(A).
At the time of hearing before us, it is stated by the learned counsel for the assessee that during the course of search of the assessee’s premises, no incriminating material was found to prove that any cash payment was made by the assessee for acquisition of space in Indirapuram Habitat Centre. That the addition is made purely on the basis of statement of one of the family members viz., Shri Lalit Mahajan. He submitted that this issue is squarely covered in favour of the assessee by the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Harjeev Aggarwal – [2016] 70 taxmann.com 95 (Delhi) and PCIT Vs. Best Infrastructure (India) (P.) Ltd. – [2017] 84 taxman.com 287 (Delhi). He further stated that the Assessing Officer also relied upon some material in the form of excel sheet claimed to have been found from the hard disk of Aerens Group of companies. That in the assessment u/s 153A, only the material found during the course of search of the assessee’s premises can be used against the assessee and not the material found in the case of some other assessee. That for utilizing the material found during the course of some other assessee, there is a specific provision i.e., Section 153C, which has not been invoked in this case and the assessment has been made u/s 153A. Under Section 153A, the Assessing Officer is supposed to make the assessment strictly on the basis of incriminating material found, if any, from the assessee’s premises. He stated that the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Kabul Chawla – [2016] 380 ITR 573 (Delhi) still holds good.
7 ITA-5585/Del/2015 & 11 others
The learned counsel further stated that even on merits, the addition made by the Assessing Officer was deleted by the ITAT in the case of Shri Subhash Khattar vide which is affirmed by the Hon'ble Jurisdictional High Court in ITA No.60/2015 dated 25th July, 2017. Similarly, addition made in the case of Asha Rani Lakhotia was also deleted by the ITAT, Delhi Benches in ITA No.424/Del/2015. He stated that the addition in the case of Subhash Khattar as well as Asha Rani Lakhotia was also made on the basis of same excel sheet found during the course of search at Aerens Group for alleged payment for acquisition of space at Indirapuram Habitat Centre.
Learned DR, on the other hand, stated that during the course of search of Aerens Group who is the builder and developer of Indirapuram Habitat Centre, it was found that in the booking of space in the said complex, huge cash payment was being received by them. An excel sheet was found from the hard disk of their computer which gives in a tabulated form the receipt of payment by cheques and cash. In fact, the search at the assessee’s premises was as a consequence of the material found during the course of search of Aerens Group. Therefore, the material found from the search at Aerens Group has a direct link with the case of the assessee. She further stated that during the course of search at Mahajan family, statement of one of the family members Shri Lalit Mahajan was recorded and he admitted on behalf of all the family members that cash payment to the tune of `10 crores was made for acquisition of space in Indirapuram Habitat Centre. That the statement under Section 132(4) has a legal sanctity and that by itself constitutes an evidence and addition can be made on the basis of assessee’s statement. For this purpose, she also referred to Section 132(4) and explanation thereto. She has also relied upon the following case laws :-
8 ITA-5585/Del/2015 & 11 others (i) B. Kishore Kumar Vs. CIT – 62 taxmann.com 215.
(ii) Bhagirath Aggarwal Vs. CIT – 31 taxmann.com 274. (iii) CIT Vs. M.S. Aggarwal – [2018] 93 taxmann.com 247 (Delhi). (iv) Smt. Dayawanti Vs. CIT – [2017] 390 ITR 496 (Delhi). (v) M/s Pebble Investment and Finance Ltd. Vs. ITO – [2017-TIOL- 238-SC-IT). (vi) Greenview Restaurant Vs. ACIT – [2003] 263 ITR 169 (Gauhati). (vii) Raj Hans Towers (P) Ltd. Vs. CIT – 56 taxmann.com 67. (viii) PCIT Vs. Avinash Kumar Setia – [2017] 81 taxmann.com 476 (Delhi).
In the rejoinder, it is stated by the learned counsel that when the SLP is dismissed by the Hon'ble Supreme Court without speaking order, Article 141 does not attract. In support of this contention, he relied upon the decision of Hon’ble Apex Court in the case of Kunhayammed and Others Vs. State of Kerala and Another – [2000] 245 ITR 360 (SC). He also stated that the decision of Hon'ble Jurisdictional High Court in the case of Smt. Dayawanti Vs. CIT – 2017] 390 ITR 496 (Delhi) relied upon by the learned DR is stayed by the Hon’ble Apex Court vide order dated 3rd October, 2017.
We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, we find that in these appeals, following two questions arise for our consideration :-
(i) Whether any material found in the search of any other person than the assessee in appeal can be considered in the assessment under Section 153A of the assessee.
9 ITA-5585/Del/2015 & 11 others (ii) Whether the addition can be made only on the basis of statement given by the assessee during the course of search.
Now, we consider the arguments of both the sides in the light of the facts of the case. The scope of assessment under Section 153A has been considered by the Hon'ble Jurisdictional High Court in the case of Kabul Chawla (supra). In the above mentioned case, Hon'ble Jurisdictional High Court has considered all earlier decisions of Hon'ble Delhi High Court and has also considered the decisions of other High Courts and Tribunals and summarized the legal position in paragraph 37 and at the conclusion of the case in paragraph 38, which are reproduced below:-
“Summary of the legal position.
On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under:-
i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the ‘total income’ of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs “in
10 ITA-5585/Del/2015 & 11 others which both the disclosed and the undisclosed income would be brought to tax”. iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.” v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word ‘assess’ in Section 153A is relatable to abated proceedings (i.e. those pending on the date of search) and the word ‘reassess’ to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.
Conclusion
The present appeals concern AYs 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed.”
11 ITA-5585/Del/2015 & 11 others
In clause (iv) above, their Lordships held “Obviously an assessment has to be made under this Section only on the basis of seized material”. In clause (v), the same is reiterated by holding “In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made”. In clause (vii), it is stated “Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search”.
Similar view was expressed by their Lordships in the case of CIT Vs. RRJ Securities Ltd. – [2016] 380 ITR 612 (Delhi).
In the case of Principal CIT, Delhi-2 Vs. Best Infrastructure (India) (P.) Ltd. – [2017] 397 ITR 82 (Delhi), their Lordships of Jurisdictional High Court reiterated the similar view in paragraph 33 of the order, which reads as under :-
“33. At this stage, it requires to be noticed that the decision of this Court in Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra) took note inter alia of the decision of the Bombay High Court in Commissioner of Income Tax v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78 (Bom), wherein it was held that if no incriminating material was found during the course of search, in respect of each issue, then no addition in respect of any such issue can be made to the assessment under Sections 153A and 153C of the Act. The decisions of this Court in CIT v. Anil Kumar Bhatia (supra) and CIT v. Chetan Das Lachman Das [2012] 254 CTR 392 (Del) were extensively discussed in Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra). The Court in Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra) had also discussed and concurred with the decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (2013) 36 Taxman 523 (Raj) which had held that the assessment in respect of each of the six
12 ITA-5585/Del/2015 & 11 others assessment years, preceding the year of search "is a separate and distinct assessment." It was further held in the said decision that "If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated."
From a reading of the above decisions of Hon'ble Jurisdictional High Court, it is evident that completed assessment can be interfered with by the Assessing Officer on the basis of any incriminating material unearthed during the course of search. If in relation to any assessment year no incriminating material is found, no addition or disallowance can be made in relation to that year in exercise of power under Section 153 of the Act. Obviously, the reference to the incriminating material in the above decisions of Hon'ble Jurisdictional High Court is in regard to incriminating material found as a result of search of the assessee’s premises and not of any other assessee. The legislature has provided Section 153C by invoking the same the Revenue can utilize the incriminating material found in the case of search of any other person to the different assessee. Section 153C is reproduced below for ready reference :-
“Assessment of income of any other person.
153C. [(1)] [Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that, -
(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,
13 ITA-5585/Del/2015 & 11 others a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub- section (1) of section 153A]:].”
Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person.
Now, coming to question No.2, we find that this issue is also covered by the decision of Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra) and Best Infrastructure (India) (P.) Ltd. (supra). In the case of Harjeev Aggarwal (supra), Hon'ble Jurisdictional
14 ITA-5585/Del/2015 & 11 others High Court considered the evidentiary value of the statement recorded during the course of search. The relevant portion is paragraph 19, 20 & 24, which are reproduced below for ready reference :-
“19. In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132(4) of the Act would by itself be sufficient to assess the income, as disclosed by the assessee in its statement, under the Provisions of Chapter XIV-B of the Act.
20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words “evidence found as a result of search” would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation.
24. If the Revenue’s contention that the block assessment can be framed only on the basis of a statement recorded under Section 132(4) is accepted, it would result in ignoring an important check on the power of the AO and would expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circumstances which can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing undisclosed income of an assessee.”
15 ITA-5585/Del/2015 & 11 others
Thus, Hon'ble Jurisdictional High Court has held “The words “evidence found as a result of search” would not take within its sweep statements recorded during search and seizure operations”. Their Lordships further observed “However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation”. In paragraph 24, their Lordships have mentioned about the prevailing practice of extracting statement by exerting undue influence or coercion by the search party. Though the above decision in the case of Harjeev Aggarwal is with reference to the meaning of undisclosed income u/s 158BB of the Income-tax Act, however, in our opinion, the above observation of Hon'ble Jurisdictional High Court would be squarely applicable while considering the evidentiary value of the statement while making the assessment u/s 153A.
In the case of Best Infrastructure (India) (P.) Ltd. (supra), Hon'ble Jurisdictional High Court reiterated in paragraph 38 “Fifthly, statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal”.
Learned DR has relied upon several decisions so as to buttress her case that the statement recorded under Section 132(4) has an evidentiary value and the addition can be made under Section 153A on the basis of such statement without there being any incriminating material. The first case relied upon by her is of Hon’ble Madras High Court in the case of B. Kishore Kumar Vs. CIT - 52 taxmann.com 449. She has also stated that the SLP against this decision is dismissed by the Hon’ble Apex Court which is reported in 62 taxmann.com 215. We
16 ITA-5585/Del/2015 & 11 others have gone through the decision of Hon’ble Madras High Court and from the brief facts as noted in paragraph 2.1 of the judgment, it is clear that during the course of search, loose sheets and noting on the telephone diaries were found and seized by the Revenue during the course of search. In paragraph 2.3 again, it is mentioned that the assessment was completed by the Assessing Officer based on the admission made by the assessee during the search and the record seized. Again, in paragraph 5, it is mentioned “we find that the case of the assessee was decided on the basis of his own sworn statements and admitted documents”. Thus, in the case before the Hon’ble Madras High Court, the incriminating material was found and seized and statement was based on such incriminating material. Therefore, the above decision would not be applicable to answer the question whether addition can be made under Section 153A solely on the basis of statement.
The next decision relied upon by the learned DR is of Hon'ble Delhi High Court in the case of Bhagirath Aggarwal (supra). In this case, Hon'ble Jurisdictional High Court held as under :- “Held, dismissing the appeal, that it was the assessee who had admitted and surrendered a sum of Rs.1.75 crores as his undisclosed income. It was incumbent upon him to show that he had made a mistake in making that admission and that the admission was incorrect. He had access to all the documents which had been seized inasmuch as copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. Thus, the assessee could not resile from his statements made on November 10, 11, 2005, and November 21, 2005. The statements recorded under section 132(4) were clearly relevant and admissible and they could be used as evidence. In fact, once there was a clear admission, voluntarily made, on the part of the assessee, that would constitute a good piece of evidence for the Revenue.” (emphasis by underlining provided by us)
17 ITA-5585/Del/2015 & 11 others
From the above, it is evident that in this case also, certain documents were seized and copies of which were supplied to the assessee. Thus, admittedly, there was incriminating material in the above case.
The next decision relied upon by the learned DR is M.S. Aggarwal (supra). In this case, Hon'ble Delhi High Court did not agree with the earlier decision of the same High Court in the case of Harjeev Aggarwal (supra) and direct that the matter be placed before the Hon’ble Chief Justice for being referred to a Larger Bench for deciding the issues. We have asked both the parties to express their views whether after the decision of Hon'ble Delhi High Court in the case of M.S. Aggarwal (supra), the earlier decision of Harjeev Aggarwal (supra) still remains as a binding precedent. Learned DR stated that when Hon'ble Delhi High Court itself have expressed the view that the decision in the case of Harjeev Aggarwal (supra) needs to be reconsidered and reappraised, it cannot be considered as a binding precedent so long as this issue is not settled by the Larger Bench. The learned counsel for the assessee stated that the decision of Hon'ble Delhi High Court in the case of Harjeev Aggarwal (supra) continues to be binding precedent until it is reversed by the Hon'ble Supreme Court or a contrary view is given by the Larger Bench. In support of his contention, he relied upon the order of the ITAT, Delhi Bench ‘I-1’ in the case of Cairn India Ltd. Vs. DCIT in wherein similar situation arose and ITAT held as under :-
"46. The ld.DR relied on the judgment in the case of Dynamic Orthopedics P.Ltd. vs. CIT (2010) 321 ITR 300 (SC) to contend that the provisions of section 205 of the Companies Act stand incorporated into section 115J of the Act. He read some observations of the Hon’ble Apex Court in Dynamic Orthopaedics (SC)(supra) expressing disagreement with the ratio laid down in the case of 18 ITA-5585/Del/2015 & 11 others
Malayala Manorama (supra). We are in full agreement with the ld.DR to the extent that the Hon'ble Supreme Court did record its respectful dissent with Malayala Manorama (SC)(supra) to the effect that depreciation need not be computed as per Schedule XIV of the Companies Act in computing profits for the purpose of section 115J. However, what is significant to note is that the Hon'ble Supreme Court made these observations while directing the Registry to place the civil appeal before the Hon’ble Chief Justice of India for appropriate directions as the matter needs reconsideration by a larger bench. In other words, this is simply a referral order for consideration of the issue by a larger bench and not an enunciation of law by the Apex Court. The ld.AR placed on record a report pointing out that the above appeal referred to a larger bench in Dynamic Orthopaedics is still pending before the Hon'ble Supreme Court. The position, which therefore, emerges is that the decision in the case of Malayala Manorama (SC)(supra) cannot be construed as overruled. It still holds the field as a binding precedent.”
The identical situation is here. The decision of Hon'ble Delhi High Court in the case of Harjeev Aggarwal (supra) is referred to for consideration by the Larger Bench. Therefore, following the above decision of ITAT, we hold that merely by reference to Larger Bench, it cannot be construed that decision in the case of Harjeev Aggarwal (supra) is overruled. The above decision continues to be binding precedent.
Learned DR has also relied upon the decision of Hon'ble Jurisdictional High Court in the case of Smt. Dayawanti (supra). However, we find that Hon’ble Apex Court in the case of Smt. Dayawanti vide order dated 3rd October, 2017 have stayed the operation of this order. Once the operation of the order of Hon'ble Delhi High Court in the case of Smt. Dayawanti (supra) has been stayed by the Hon’ble Apex Court, it cannot be held to be a binding precedent.
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Learned DR has also relied upon the following three cases which were relating to survey proceedings :-
(i) M/s Pebble Investment and Finance Ltd. Vs. ITO – [2017-TIOL- 238-SC-IT). (ii) Raj Hans Towers (P) Ltd. Vs. CIT – 56.taxmann.com 67. (iii) PCIT Vs. Avinash Kumar Setia – [2017] 81 taxmann.com 476 (Delhi).
As the above decisions were relating to survey proceedings, the same will have no application for interpreting the scope of assessment under Section 153A.
The next decision relied upon by the learned DR is of Hon’ble Gauhati High Court in the case of Greenview Restaurant (supra). We find that the facts in this case are altogether different as assessment was completed under Section 143(3) and not under Section 153A. Therefore, the above decision would not be applicable so far as the scope of assessment under Section 153A is concerned.
In view of the above, we, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra) and Best Infrastructure (India) (P.) Ltd. (supra), hold that the statement recorded during the course of search on standalone basis without reference to any other material discovered during the search and seizure operation would not empower the Assessing Officer to make the addition merely because any admission was made by the assessee during the search operation. Admittedly, in this case, during the course of search of assessee’s premises, no incriminating material was found except the statement of one family member viz., Shri Lalit Mahajan. Solely on the basis of the statement of Shri Lalit Mahajan,
20 ITA-5585/Del/2015 & 11 others the addition was in the case of all the family members, which cannot be done in view of the decision of Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra) and Best Infrastructure (India) (P.) Ltd. (supra).
However, for the sake of completeness, we have also gone through the statement of Shri Lalit Mahajan which is reproduced by the Assessing Officer in the assessment order and, for ready reference, we reproduce the same herein below:- 4. Subsequently, search was conducted at the corporate office of Mahajan group of Okhla Industrial Area and on 11.02.2012 statement of head of the Mahajan family, Sh. Lalit Mahajan was recorded on oath. He admitted in his statement of making cash investment in the above stated projects of AEZ group. The relevant extracts of his statement are reproduced here below in respect of project at Indirapuram Habitat Centre :-
“Que.6 Please give details of consideration paid for booking of 20,000 sq.ft space in Indirapuram Habitant Centre as stated by you. Please also state when these spaces were booked.
Ans. The details in respect of booking of spaces in Indirapuram Habitant Centre is as under:
S.No. Name of Investor Area/Unit No. Amount paid in Amount paid in cheque cash 1 Smt. Rinku Mahajan 2000 sq.ft 30,80,000 99,92,000 2 Sh. Nitin Mahajan 3500 sq.ft 53,90,000 1,75,26,000 3 Smt. Shivali Mahajan 2000 sq.ft 30,80,000 99,92,000 4 Sh. Jatin Mahajan 3500 sq.ft 53,90,000 1,75,26,000 5 Smt. Anila Mahajan 4500 sq.ft 69,30,000 2,24,82,000 6 Sh. Lalit Mahajan 4500 sq.ft 69,30,000 2,24,82,000 Total 3,08,00,000 10,00,00,000
From the above, it can be seen that with reference to question No.6, he admitted the cash payment of `10 crores by six family
21 ITA-5585/Del/2015 & 11 others members including him. When in question No.7 he was asked to state as to whom the payment was made and when, in reply thereto, he stated “The cash payment was made to Sh. Sanjeev Aeren of AEZ Group during the F.Y. 2006-07 to 2008-09 “. If the payment is made during the financial year 2006-07 to 2008-09, the addition, if any, can be made in those years and not in assessment year 2006-07, which is the year under consideration. In the year under consideration, i.e., 2006-07, if any cash payment is made by the assessee during the financial year 2005-06, that can only be considered and not the payments made in the subsequent years. The learned DR stated that since the space was booked during the financial year under consideration, the entire cash payment is to be considered in this year. We are unable to agree with this contention of the learned DR. The addition for unexplained investment can be made only in the year when the investment is made and not in any other year. In view of the above, even as per the statement of Shri Lalit Mahajan, no addition can be made in this year. In view of the above, we do not find any justification to interfere with the order of the learned CIT(A). The same is upheld.
In the result, the appeals of the Revenue are dismissed and the cross-objections of the assessees are allowed.
Decision pronounced in the open Court on 19.03.2019.