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सुनवाई क� तार�ख / Date of Hearing : 03-01-2017 घोषणा क� तार�ख / Date of Pronouncement : 03 -01-2017 आयकर अ�ध�नयम, 1961 क� धारा 254(1) के अ�तग�त आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) Per Pawan Singh, J.M. �या�यक सद�य iou iou iou �संह के अनुसार: iou 1. The present appeal u/s 53 of the Income-tax Act is filed by assessee against the order of ld. Commissioner of Income-tax (Appeals)-40, Mumbai (for short the CIT(A) dated 06.03.2014 for Assessment Year(AY) 2011-12. The assessee has raised the following grounds of appeal: 1. "Whether on the facts and in the circumstances of the case and in law, the CIT(A) was correct in deleting the addition made by AO, on account of receipt of possible on- money?" 2. "Whether on the facts and in the circumstances of the case and in law, the CIT(A) was correct in applying the law pronounced in the cases of Biren V Salva vs. ACIT (2006) 100 TTJ 1006?" 3. "Whether on the facts and in the circumstances of the case and in law, the CIT(A) was correct in holding that the diary seized and marked as annexure A-2, was a conclusive piece of evidence and could be relied upon?" 4. "The Appellant craves leave, to amend add/ or to alter any of ground of appeal, if need be". 5. "The Appellant, therefore, prays that on the ground stated above, the order of the CIT(A)-40, Mumbai may be set aside and that of the Assessing Officer restored".
2. In brief the facts are that the assessee-company is engaged in real estate, hospitality, entertainment and education sectors. The name of flagship company of assessee is Kanakia Spaces Private Limited (in short ‘KSPL’). The assessee group company has numerous commercial and residential projects in Mumbai consisting of KSPL, Kanakia Hospitality Pvt. Ltd., Centaur Mercantile P. Ltd, Supreme Real Estate Developers P. Ltd. and M/s Sarang Property Developers P. Ltd. (the assessee). A search and seizure action u/s 132 of the Act was conducted at the business and residential premises of its Directors on 29.03.2011 and concluded on 24.05.2011. Pursuant to search and seizure action assessment order was framed u/s 143(3) r.w.s. 153(c) of the Act. In assessment order the Assessing Officer (AO) made the addition of Rs. 19,49,789/- on account of unexplained expenditure and Rs. 5,80,43,425/- on account of unexplained cash credit. On appeal before the ld. CIT(A), the addition on account of cash credit of Rs. 5,80,43,425/- was deleted and the addition of Rs. 19,49,789/- was upheld. Thus, being aggrieved by the order of ld. CIT(A), the revenue has filed the present appeal before us.
At the outset of the hearing the ld. Authorized Representative (AR) of assessee argued that the grounds of appeal
raised in the present appeal are squarely covered by the decision of Tribunal in assessee’s group case in ITA No. 3562/Mum/2014. The ld. Departmental Representative (DR) for Revenue not disputed the factual and legal position.
4. We have considered the contention of the parties and gone through the order of co-ordinate bench of this Tribunal in assessee group case in wherein the co- ordinate bench of this Tribunal made the following order: 2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee company is engaged in the business of real estate development and is part of Kanakia Group. A search action was carried out upon the Kanakia Group on 29/03/2011. Pursuant to search, assessment was framed u/s 143(3) of the Act. The whole addition was made by the Assessing Officer on the plea that assessee booked certain bogus purchases in its books of accounts, which were paid through cheque. The assessee passed necessary journal entries wherein, purchases were reversed and the resultant cash has been brought in to books of accounts. The ld. Assessing Officer was of the view that such back must be out of on-money, charged by the assessee and cash was generated by way of booking of bogus purchases. Totality of facts/seized papers (contained in annexure A/1), clearly indicates that cash flow depicts the receipt of cash against the payment in cheque towards purchases. The said cash flow reveals the balance available from 2007 onwards and further such cash was showed in the closing balance evidencing that the cash was available. The cash flow has been reproduced at page 11 & 12 of the assessment order. The statements of Directors as well as some of the employees were recorded, wherein, the factum of receipt of cash against bogus purchases has been tendered. However, accept the statement, there is no evidence on record that on-money was charged by the assessee and the seized papers, found during the search, pertaining the sister concern of the assessee, M/s Kanakia Spaces Pvt. Ltd. and the statement relied upon by the Assessing Officer was subsequently retracted. There is no evidence on record that cash generated by the assessee was out of bogus purchases and use of utilization of cash was even not discovered during seizure action. The statements were retracted by the employee on the very next day and M/s Kanakia Spaces Pvt. Ltd. approach the Hon’ble Settlement Commission, wherein, it was concluded that there is no on-money charged by the sister concern. It is also noted that the ld. Commissioner of Income Tax (Appeals) deleted the addition considering the factual matrix and found that the Assessing Officer partially accepted the seize paper accepting the fact that the assessee made bogus purchases at the same time denied the assessee the benefit of cash generated out of such bogus purchases stating that the said cash was spend elsewhere for which no evidence was brought on record. In such a situation, the assessee get supports from the decision in the case of Viren V. Savla vs ACIT (100 TTJ 1006 (Mum.), wherein, it was held that the seized material should be read and accepted as a whole and should be