DCIT CEN CIR 8(4), MUMBAI vs. HARSH DEEP CONSTRUCTION, MUMBAI

Harsh Deep Construction, DCIT Cen. Cir -8 (4), Room No. 658, 6th Floor, Ground Floor, बिधम/ ShaileshBldg, Out house Aaayakar Bhavan, M. K. linking Road, Road, Mumbai-400020 Vs. Santacruz(west), Mumbai-400054. स्थायीलेखासं./जीआइआरसं./ PAN No. AAEFH7011A (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Shri M. C. Omi Ningshen, DR प्रत्यथीकीओरसे/Respondentby : Shri SashiTulsiyan, AR सुनवाईकीतारीख/ : 28.09.18 Date of Hearing घोषणाकीतारीख / : 04.10.2018 Date of Pronouncement आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

Harsh Deep Construction, 2. The brief facts of the case are thatthe assessee is engaged in the business of construction of residential and commercial buildings in Mira Road and its surrounding areas. The return of income was filed on 27.09.10declaring total income of Rs. 3,35,23,570/-. Thereafter, the case of assessee was selected for scrutiny and after serving statutory notices and seeking reply of the assessee, order of assessment u/s 143(3) was completed by the AO on a total income of Rs. 4,08,98,480/- after making addition of Rs. 73,74,906/-.

Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties,partly allowed the appeal of the assessee. Now before us, the revenue has preferred the present appeal.

Harsh Deep Construction, 4. Ld. DR appearing on behalf of revenue submitted before us that Ld. CIT(A) without appreciating the fact in the statement of Shri Dilesh C. Shah, partner, recorded u/s 132(4) of the Act wherein it has been categorically admitted that the assessee had received on-money against the sales of flats of 1,32,270 Sq. feet of Rs. 14.70 crores and as such it is clear that assessee firm was indulged in charging on-money in cash on sale of flats. It was further submitted that as per the facts of the case, a search was conducted on the assessee on 16.10.08 and during the search, incriminating document was found, in which it was mentioned that the assessee received on-money against sale of flat amounting to Rs. 14,17,00,000/- on the sale of 1,37,270 Sq. Ft. of built up area. The total built up area of the project was 1,44,156 Sq. Ft. and the balance unsold area was sold during the year under consideration. It was also submitted that during the search, the statement u/s 132(4) of I.T. Act was recorded of the assessee. The AO during the course of assessment was of the view that on-money receipt during the year under consideration cannot Harsh Deep Construction, be ruled out considering the admissions made by assessee in the statement recorded u/s 132(4) of the I.T. Act. It was further submitted that assessee had sold almost 95% of the project before the search in which he had received on- money payment against the sale of flat. It was further submitted by Ld. DR that the per sq. ft. rate of sale price was not fluctuated in the current year as compared to last years in which on-money payment was received. It was further submitted that there was no increase in sale price and assessee had sold remaining 5% flats of the project during the year at the almost same price that was in earlier years. It was submitted that AO after considering this fact, had rightly concluded that the partial price which was received by the assessee as on-money payment against the sale of flat was not incorporated in agreement value for further sale of 5% of the project and thus relied upon the orders passed by AO.

Harsh Deep Construction, Ld. CIT(A) dealt with the entire facts of the case and concluded that AO had not brought sufficient material to justify the additions and the additions were made on the basis of suspicion. We are also of the view that howsoever strong the suspicion may be, but the same cannot take place of proof. Even the Coordinate Bench of ITAT in assessee’s own case for AY 2008-09 & 2009-10 had deleted the identical additions by holding as under:- 24. In the instant case, it is an admitted fact that the revenue has not seized any other valuables, cash or investments corroborating the figure of Rs..15.00 crores. Further the notings made in panchanama shows that the search commenced in the residence of Shri Harshad Doshi at 1.30 a.m. (almost midnight) on 17.10.2008 and continued upto 1.00 am (again mid night) on 18.10.2008. We have noticed earlier that Shri Dilesh Shah was called upon to the residence of Shri Harshad Doshi. The copy of sworn statement furnished in page no.2 of the paper book shows that the search officials did not record the time at which the recording of statement was commenced, even though the sheet contained a column for recording the time. Hence there could be merit in the contentions of the assessee that the statement was recorded at the fag end of the Harsh Deep Construction, search and Shri Dilesh Shah was exhausted and he was constrained to admit the additional income. Further, we have noticed that the noting found in the loose sheet did not tally with the entries made in the books of account. No other material was brought on record by the AO to corroborate the noting made in the loose sheet. None of the buyers of the flat was examined to ascertain the truth. Under these set of facts, we are of the view that the loose sheet referred above cannot be considered to be a document that could be relied upon. Further, the facts and circumstances show that Shri Dilesh Shah was under some compulsion to admit additional income. The very fact that the assessee did not offer the same in the return of income shows that the assessee was not in agreement with the admission so made, as according to it, the same did not reflect the truth. Even though there is no proper explanation as to why the affidavit prepared within two days of the search, was filed after expiry of two years, yet the surrounding circumstances show that the assessee was under the belief that the admission has been wrongly made. Further, we have also, for the reasons discussed supra, noticed that the statement taken from Shri Dilesh Shah may not be a statement taken as per the provisions of sec. 132(4) of the Act. In view of the foregoing discussions, we are of the view that the tax authorities are not justified in placing reliance on the Harsh Deep Construction, page no.90 of the Annexure I and the sworn statement taken from Shri Dilesh Shah.

After having gone through the facts of the present case as well as orders passed by the Coordinate Bench of ITAT in assessee’s own case and judgments relied upon by both the parties, we find that the Coordinate Bench had already dealt with the search and seizure operations carried out on the premises of the assessee’s group on 16.10.08 and the statement recorded by Shri Dinesh C. Shah and deleted the additions by detailed order. Even in the present case, apart from the said statement, there is no other corroborative evidence/material for making additions and the revenue has not been able to demonstrate before us as to whether the alleged on-money receipt by the assessee was not accounted at all, i.e. the revenue did not made any enquires either Harsh Deep Construction, with the purchasers of the flat or the group concern in this regard not did the revenue examined the books of account of the group to vindicate their stand, therefore the Ld. CIT(A) has rightly deleted the additions by holding that no additions can be made on the basis of such statement. Even otherwise, respectfully following the decision of the Coordinate Bench of Hon’ble ITAT and in order to maintain judicial consistency, we apply the same findings in the present case which are applicable mutatis mutandis in the present case. Therefore, we dismiss the appeal filed by the revenue.