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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
This appeal by the Assessee is arising out of the order of Commissioner of Income Tax (Appeals)-24, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-22/ITO-10(3)(2)/IT-156/2013-14 dated 28-10-2015. The Assessment was framed by the Income Tax Officer, ward-10(3)(2), Mumbai (in short ITO) for the assessment year 2008-09 vide order dated 30-03-2013 under section 143(3) of the Income Tax Act, 1961(hereinafter ‘the Act’).
At the outset, the learned Counsel for the assessee Sri Madhur Agarwal argued that the addition made by AO of unexplained expenditure of Rs. 1.4 crores on the basis of seized material under section 153C of the Act on the basis of search and seizure action under section 132 of the Greenary Realty Pvt. Ltd. (A.Y. 2008-09) Act carried out on 05-03-2009 in the case of Jai Corporation Group of companies, its employees and close associates, including the assessee and this fact is noted by AO in Para 4.2.5, wherein complete list of the parties are given including the assessee. The learned Counsel stated that similar issue was adjudicated by the Tribunal in various group of companies including the leading case of M/s. Avkash Land Realty Pvt. Ltd. vs. The DCIT, in which was confirmed by Hon’ble Bombay High Court in the case of CIT vs. M/s Hita Land Pvt. Ltd. order dated 23-06-2017, wherein Para 17 reads as under: - “17. We are surprised that the Revenue was advised to move the Tribunal to seek rectification of the alleged mistake appearing on the face of the record in it's final order. However, prior to that, it was maintained by the Revenue before the Division Bench of this Court that no such application is necessary and even if any ground which was not raised by it before the Tribunal can now be raised in this Court for the first time if that is raising a pure question of law. We do not see any reason for the shift in this stand and we are, therefore, not surprised when the Division Bench of this Court passed the following order on 27th March, 2017:
“Mr. Kotangle, learned Counsel appearing for the Appellant Revenue, seeks an adjournment of these Appeals to 1st Week of May, 2017. This on the ground that the Appellant Revenue has, on 6th March, 2017, filed a Miscellaneous Application for rectification under Section 254(2) of the Greenary Realty Pvt. Ltd. (A.Y. 2008-09) Income Tax Act, 1961 before the Tribunal, seeking to rectify the common impugned order dated 22nd March, 2013.
2 On 7th February, 2017, we passed the following order:-
“The learned Additional Solicitor General appearing on behalf of the Appellant Revenue, on instructions, seeks adjournment for a period of six weeks from today to enable the Revenue to move the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961.
At his request, appeals are adjourned to 27th March, 2017.”
3 We note that in spite of the fact that appeals were adjourned on 7th February, 2017, the Revenue did not file any application for rectification till 6th March, 2017. If the Revenue is seriously interested in prosecuting rectification application, they ought to have expedited the filing of the application before the Tribunal, with a request to it for early hearing. This is particularly so, as the impugned order on which rectification is sought, is dated 22nd March, 2013. Moreover, these appeals are pending for hearing since 2014 before us and have been adjourned from time to time since 27th June, 2016, when it first reached hearing.
Greenary Realty Pvt. Ltd. (A.Y. 2008-09) 4 In the above view, we do not accept Mr. Kotangle's request that the appeals be adjourned to 1st week of May, 2017. We adjourn the consideration of these appeals to 17th April, 2017. We expect the Revenue to atleast now expedite the hearing of its application for rectification, and obtain orders from the Tribunal, before the next date.”
4. We find that the CIT(A) has also adjudicated the issue exactly on the same facts and decision vide Para 2.4. 25 and 24.26 as under: - “2.4.25 I also find that exactly same issue came up for adjudication before the then Ld. CIT(A)-41, Mumbai in the case of one of the beneficiaries viz. Hita Land Pvt. Ltd. in appeal No. CIT(A0-41/DCCC-39/IT-638/10- 11 where vide order dated 28.10.2011, the assessee's grounds of appeal of similar nature were dismissed. Further, in yet another case of this group namely MIs Ekdanta Land Pvt. Ltd., the matter came up for adjudication before Ld. CIT(A)-2, Thane and on same set of facts, appellant's grounds of appeal were dismissed. I find lot of pervasive value in the above two orders where the same loose papers were taken into consideration for framing the assessments and which came to be confirmed by the respective Ld. CIT(A) referred to above.
Greenary Realty Pvt. Ltd. (A.Y. 2008-09) 2.4.26 Facts and circumstances of the present case are covered by the decisions of Hon'ble Delhi High Court (supra) because in present case, it is confirmed by the land owner also that they have received cash payment which was duly declared in the return of income and paid taxes accordingly. Although, the search and survey was conducted only in two cases of M/s Pathik Constructions and Shri Sunil Gulati, they have confirmed that cash payments have been received from the appellant company over and above the cheque payments declared in their books of account. Since the Ld. AR of the appellant has failed to submit any documentary evidence to rebut the entries of seized papers and statement recorded during the course of search of Shri Dilip Dherai, therefore, the addition made by the Ld. AO of Rs.18400.000/- u/s 69C of the l.T. Act is upheld and the grounds of appeal no.(c) & (d) are dismissed.”
We have gone through the grounds of appeals raised by assessee which reads as under:
“1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in rejecting the appellant's contention that initiation of proceedings u/s. 153C of the I.T. Act, 1961 (the Act') are had-in-law even though no assessment or re- assessment proceedings in relation to this year
Greenary Realty Pvt. Ltd. (A.Y. 2008-09) were pending as on the date of the search u/s. 132 of the act.
On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in rejecting the appellant's contention that invoking of provisions of section 153C of the Act was had-in-law in view of the fact that there was no money, bullion, jewellery or other valuable articles or things or books of account or documents seized which are belonging or belonged to the appellant and which disclosed that the appellant had incurred unaccounted expenditure.
3. On the facts and in the circumstances of the case and in law, the learned CIT A) erred in confirming the addition on account of alleged unexplained expenditure in lands u/s.69C of the Act, ignoring the explanation of seized material and appellant's reliance of various decisions. It is prayed that the addition on account of alleged unexplained expenditure of Rs.18400000/- may be deleted.
On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in bringing new evidences of Pathik Construction and Sh. Sunil Gulati on record and discussing the same in the appellate order even though the same has no connection with the facts of the appellant. The learned A.O. has also made no reference of these evidences while reaching its conclusion in the assessment order. These evidences are, therefore, irrelevant and out of context so far as the appellant is concerned. It is prayed that these evidences may kindly be ignored.
Greenary Realty Pvt. Ltd. (A.Y. 2008-09) 5. On the facts in the circumstances of the case and in law, the Hon'ble CIT (A) erred in relying on the decision of Hon'ble Delhi High Court in the case of Malik Bros (P) Ltd vs CIT(162 Taxman 43). In the appellant's case, none of the land owners front land has been purchased by the appellant confirmed the receipt of cash payment. These remarks of the Hon’ble CIT (A) are erroneous remarks. It is therefore prayed that these erroneous remarks of the Hon’ble CIT (A) may kindly be deleted.
6. On the facts in the circumstances of the case and in law, the Hon'ble CIT (A) erred in relying order of the Bita Land Private limited passed by the CIT (A) 41 vide order CIT (A)/DCCC39/11-638/10-11 dated 28/10/2011. Though the issues are similar and identical the said order has been quashed by the Hon'ble ITAT. Mumbai Bench. The Hon'ble CIT (A) erred not considering the same while passing the order. It is therefore prayed that addition confirmed by the learned CIT (A) may kindly be deleted following the decision of the Hon'ble ITAT. Mumbai.
7. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in confirming the charge of interest u/s.234B and 234C of the Act, having regard to the fact of the case. The appellant denies it liability for payment of interest u/s.234B & 234C of the Act.”
We find that the appeal of the assessee is squarely covered in other group cases and wherein the same seized material is used for making addition of unexplained expenditure. As the issue is covered and adjudicated by the Tribunal in other group cases and which was affirmed
Greenary Realty Pvt. Ltd. (A.Y. 2008-09) by Hon’ble Bombay High Court, respectfully following the same, we allow the appeal of the assessee.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 16-11-2017.