TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 55
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....ntrol of 'Sareen Group' doing the business of real estate development by way of entering into a joint venture with MGF Development Pvt. Ltd. M/s. Moonlight Continental (P) Ltd. is also a registered company at the address of 75-E, Himalaya House, 23, K.G. Marg, New Delhi under the control and management of 'Sareen Group' doing the business of real estate development by a joint venture with MGF Development Pvt. Ltd. Thus, both these companies were in the joint venture with MGF Development Pvt. Ltd. The Columbia Holdings (P) Ltd. was in joint venture in respect of "Metro Polis" at Gurgaon and residential development known as "The Villas" at Gurgaon. M/s. Moonlight Continental (P) Ltd. was into a joint venture partner with MGF Development Pvt. Ltd. in respect of development of a commercial/ shopping mall under the name and style of "Metro Polis" at Gurgaon and MGF Metropolitan, Saket, New Delhi. A Search and seizure operation u/s 132(1) of Income-tax Act, 1961 was conducted on 12.09.2007 on the 'Sareen Group' and warrant was in the name of Sareen Estate Pvt. Ltd. at registered office at 75-E, Himalaya House, 23, K.G. Marg, New Delhi and its corporate office at Ground Floor and Second F....
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....ls given by the CIT (A) is the same, which read as under in the case of Columbia Holdings (P) Ltd. :- "3.3 I have gone through the submission filed by the appellant and observation of the Assessing Officer. Since the Assessing Officer was relying on the statement of Sh Shravan Gupta the undersigned vide this office letter dated 2.8.2011 asked the Assessing Officer to furnish the following details; You are requested to submit the copy of statement of Shravan Gupta recorded on 13th September, 2007. 2. Also furnish a copy of the letter submitted by the Shravan Gupta on 14/01/2008. 3. Whether any statement of Sh Sudhir Sareen and Sh Siddarth Sareen were recorded on the date of search. 4. The appellant has stated that the group has surrendered an amount of Rs.335.66 crores as against the sum of Rs.224 crores initially offered by the group. The detailed chart in respect of the same is enclosed herewith. Kindly confirm the same. 5. Also let the undersigned know whether the Assessment Order has been framed u/s 143(3) or 153 of the I T Act. All the above details should be furnished to the undersigned within 5 day of receipt of this letter. In response to the above query the Assessin....
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....r. In the grounds of appeal it did not challenge the addition of the said amount of Rs.18,052/-. At the hearing of the appeal, no one appeared on behalf of the taxing authority. At this stage, the assessee's representative raised three additional grounds before the Appellate Assistant Commissioner one of which was that the addition of Rs.18,052/- was improper The Appellate Assistant Commissioner admitted this ground and deleted the addition. The Tribunal held that the Appellate Assistant Commissioner was wrong in entertaining the additional ground in respect of the addition of the said amount of Rs.18,052/- and further in deleting this addition. Held, that the Appellate Assistant Commissioner had no jurisdiction to consider the ground of appeal against the addition of Rs.18,052/- relating to alleged suppressed sales of "sarki". Jivatlal Purtashi v. CIT[1967] 65ITR 261 (Bom) applied Chhat Mul Aggarwal v. CIT[1979] 116 ITR 694 (P&H) dissented from. Thus in this case the assessee had agreed to the addition before the Assessing Officer because he could not reconcile the sales and purchase. This case does not pertain to surrender of income during search and the facts of the case are e....
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....mount offered by it for the purposes of taxation. In fact the amount offered for taxation is almost 50% more than what has been stated by Shri Shravan Gupta. The group has paid taxes much more than what it had committed during the search. The fact that the assessee group has offered Rs.335.66 crores for the purposes of taxation has been reconfirmed by the Assessing Officer in the remand report. Though the Assessing Officer talks about hand written papers and type sheets found during the search but has nowhere quantified any amount of undisclosed income on this account. It is pertinent to mention that at the time of search the assessee had given a rough amount of the undisclosed income in the hands of the various companies and the "question of retraction can arise only when the amount offered for taxation is less than the amount committed during the search. In this particular case the amount offered is far more by the group as a whole. 5. The various Court decision are also in favour of the assessee. In the case of CIT, Ranchi Vs. Ravindra Kr. Jain [2011] 12 taxmann.com 257 it has been held that "Whether when amount, which assessee stated to have been deposited in bank, was not fou....
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.... in the various judgments cited supra, the addition of Rs.7,64,20,466/- cannot be sustained because no incriminating material justifying such an addition has been found during the search from the assessee. Further, the assessee group has offered Rs.335.66 crores as against Rs.225 crores committed during the search. Neither the Assessing Officer nor the investigation wing could pin point any concealment of the amount which the Assessing Officer has added, therefore, the addition of Rs.7,64,20,466/- is hereby deleted. These grounds are decided in favour of the appellant." 3. Thus, CIT (A) deleted the addition and the revenue is in appeal before us by taking the following grounds :- "1. The order of Ld. CIT (A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld CIT(A) has erred in deleting the addition of Rs.7,64,20,466/- made by the Assessing officer on account of difference of amount between the surrendered amount u/s 132(4) of IT Act, 1961 and the surrendered amount declared in the return of income. 3. Reliance is placed on the decision of the Hon'ble Supreme Court of India dated 25.10.1996 in Special Leave Petition(C) NO.14028 of 1996....
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.... decision of Hon'ble Kerala High Court in the case of V. Kunhambu and Sons v. Commissioner Of Income Tax reported in (1996) 219 ITR 235, Hon'ble Supreme Court decision in Special Leave Petition(C) No.14028 of 1996 in the case of Surjeet Singh Chhabra Vs. Union of India and Others dated 25.10.1996 and Hon'ble Punjab & Haryana High Court decision in the case of Rakesh Mahajan vs. CIT reported in 214 CTR 218. 5. On the other hand, ld. AR submitted that Shri Shravan Gupta, Managing Director of Emaar MGF Land Limited admitted additional income of Rs.225 crores although the statement recorded u/s 132(4) was not available with the Assessing Officer. In the statement recorded u/s 131 of the Act on 16.10.2007, Shri Shravan Gupta bifurcated the amount of Rs. 225 crores as Rs.160 crores was attributed to M/s. Emaar MGF Land Limited on the basis of recognition of revenue by following the percentage completion method of accounting and the remaining Rs.65 crores was attributed as income in the books of other Emaar MGF Group companies/concerns/individuals and other entities on the basis of material found and seized during the search operations and change in the method of accounting. Ld. AR submi....
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....n there was no discloser of any income by the 'Sareen Group'. It was only Shri Shravan Gupta, Managing Director of Emaar MGF Land Limited who made discloser of income. Assessees were not part of Emaar group but having only a connection as investor and joint venture with MGF Development Ltd. Further copy of statement of Shri Gupta was not furnished to the assessee. In the case of V. Kunhambu And Sons, admission of unaccounted investment was made in the statement recorded but however, in the assessee's case, it was only the change of method of accounting and that too has resulted into enhancement of the income. The ld. AR further submitted that in the case of Surjeet Singh Chhabra, the matter was relating to confiscation of gold and appellate authority has initially referred back the matter to the primary authority to reconsider the matter under the Customs Act. On appeal, the confiscation was confirmed as bringing gold without permission is in contravention of Customs Duty Act and FERA. While in assessee's case the addition was without any evidence or seized material. The CIT (A) has rightly deleted the addition in the absence of any evidence. Similarly, in the case of Rakesh Mahaja....
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....cial process and when its statutory process is exercised by the A.D. which is detrimental to the assessee it is not and cannot be administrative in nature and attracts the principle of natural justice. (vi) State of Kerala v. K.P. Shaduli Yusuff (1977) 39 STC 478 (SC) (vii) P.S. Abdul Majeed v. AgriculturallTO (1994) 209 ITR 821 (Kerala) "Assessee prayed for an opportunity to cross examine. When such a request was made it was incumbent upon the A.D. to afford opportunity to cross examine. Denial of the right to cross examine is sufficient to vitiate the order". viii) ASSISTANT COMMISSIONER OF INCOME-TAX V. ANOOP KUMAR [2005)147 TAXMAN 26 (ASR.) (MAG.) In the above mentioned case it was held that no addition could be made merely by relying on the statement recorded under section 132(4) when there is no evidence or material to justify such addition. (ix) Kailashben Manharlal Chokshi v. Commissioner of Income-tax HIGH COURT OF GUJARAT [2008] 174 TAXMAN 466 (GUJ.) Where it was held that Merely on basis of admission, the assessee could be subjected to such addition, when despite retraction revenue could not furnish any corroborative evidence in support of such admission." 6. We....