TaxTMI 
TaxTMI 
2018 (9) TMI 1549
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....tice u/s 148 of the I.T. Act, 1961 was issued on 28.03.2014 with prior approval of the Joint Commissioner of Income Tax, Range-27, New Delhi vide her letter No.JCIT/Range-27/148/2013-14/609 dated 28.03.2014 which was duly served upon the assessee by Speed Post vide Ack.No. ED099387509IN for filing return of income for Asstt. Year 2007-08 within 30 days from the date of issue of the said notice in the prescribed form. In response to the said notice, no return was filed by the assessee. Subsequently, the Assessing Officer issued notice u/s 143(2) & 142(1) asking the assessee to explain the various details as stated therein. The assessee, in her submission, in response to query no.4 of the questionnaire, stated that the information of the cash paid of Rs. 10,95,000/- is wrongly coated by the Department. The Assessing Officer, therefore, issued letter to the Director of Income Tax (Inv.)-II, Mumbai to provide copy of statement recorded on oath of the Director of Hiranandani Group and other persons and evidence found during the course of search against the persons/parties who had purchased flats from Hiranandani Group and paid on money especially in the case of Smt. Indu Jain (the asses....
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....ey' is contained in the final statement of Shri Niranjan Hiranandani recorded u/s 132(4) of the Income Tax Act. 1961. The relevant portion of the statement dated 14-03-2014 is as under :- "Q.10: From the running statement of cash transaction pertaining to period from 1-04-2006 the ledger account of flat buyers has been extracted, and made part of-this statement as Annexure A-I, and it is being shown to you. As per this annexure the total 'on money' cash receipt (over and above the registered value of the flats) comes to Rs. 475,60,19,990/- kindly go through it and confirm. Ans: I have gone through the statement and I confirm that the total 'on money' cash receipt (over and above the registered value of the flats) comes to Rs. 475,60,19,900/-. This annexure A-1 referred to in the above question contains inter alia details of your assessee, as forwarded to you earlier in the form of excel sheet." 4. On the basis of above information obtained from Investigation Wing of the Department, the Assessing Officer noted that the assessee has paid an amount of Rs. 10,95,000/- as on money through Crescendo Associates, a concern of Hiranandani Group. The Assessi....
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....ting evidence collected by the Investigation Wing in the form of pen drive clearly showed that on money of Rs. 10,95,000/- was paid on 20.02.2007 and that the employees at various levels of Hiranandani Group, and also its promoter Sh. Niranjan Hiranandani admitted the receipt of cash from flat/shop buyers in respect of the properties booked in their statements recorded and the fact that the appellant did book the said property which was mentioned in the pen drive seized, the addition of Rs. 10,95,000/- made by the A.O. is hereby confirmed." 7. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :- "1. That information of reassessment proceeding u/s 147-151 is void ab initio being contrary to the legal procedure prescribed by the Act. 2. That the addition made by the A.O. and confirmed by the CIT(A) is also illegal as no material whatsoever relied upon by the A.O. was ever confronted to the appellant and therefore the same cannot be treated as evidence against the appellant for making the impugned addition. The appellant craves to add, or amend the ground of appeals if required and necessary." 8. ....
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....flat. Referring to the report of the Investigation Wing of the Department, which has been reproduced by the Assessing Officer in the body of the assessment order, ld. counsel for the assessee submitted that the name of the assessee nowhere appears in the said list. 11. So far as merit of the case is concerned, ld. counsel for the assessee referring to the decision of the Mumbai Bench of the Tribunal in the case of Anil Jaggi vs. ACIT reported in 89 taxmann.com 266 submitted that under identical circumstances the Tribunal has deleted the addition made by the Assessing Officer and upheld by the ld. CIT(A) on the basis of the same pen drive. He also referred to the following decisions where under identical circumstances such addition has been deleted by the Tribunal :- (i) Shri Sachinkumar Surya vs. ITO, ITA No.6237/Mum/2016 dated 25.07.2017. (ii) ITO vs. Shri Nikhil Vinod Aggarwal, ITA No.2574/Mum/2017 dated 13.10.2017. 12. He accordingly submitted that both legally as well as factually the addition made by the Assessing Officer and sustained by the ld. CIT(A) is not in accordance with law. 13. The ld. DR on the other hand heavily relied on the orders of th....
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.... of flats from M/s Lakeview Developers. We find that the genesis of the conclusion of the A.O that the assessee had paid "on money" of Rs. 2.23 crore for purchase of property under consideration is based on the contents of the pen drive which was seized from the residence of an ex-employee of Hiranandani group. We have perused the print out of the pen drive (Page 42 of APB) and find ourselves to be in agreement with the view of the ld A.R that though against the heading "Amount of on money paid" the name, address and PAN No. of the assessee is mentioned alongwith the details of the property purchased by him, viz. Flat no.2501 in "Somerset" building from Lakeview Developers (a Hiranandani group concern), however, the same would not conclusively prove suppression of investment and payment of "on money" by the assessee for purchase of the property under consideration. We find that the information as emerges from the print out of the pen drive falls short of certain material facts, viz. date and mode of receipt of „on money_, who had paid the money, to whom the money was paid, date of agreement and who had prepared the details, as a result whereof the adverse inferences as regard....
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....us are of a strong conviction that as the material relied upon by the lower authorities does not corroborate the adverse inferences drawn as regards the investment made by the assessee, therefore, the same cannot conclusively form a basis for concluding that the assessee had made payment of "on money" for purchase of the property under consideration. We thus in the backdrop of our aforesaid observations are of the considered view that the adverse inferences drawn by the A.O as regards payment of "on money" of Rs. 2.23 crore by the assessee for purchase of Flat No. 2501 from M/s Lakeview Developers are based on of premature observations of the A.O, which in the absence of any clinching evidence cannot be sustained. We thus are unable to subscribe to the view of the lower authorities and set aside the order of the CIT(A) sustaining the addition of Rs. 2.23 crores in the hands of the assessee." 15. I further find in the instant case the Assessing Officer has not given any opportunity to the assessee to cross-examine the witnesses on the basis of whose statements addition has been made. I find under identical circumstances the Mumbai Bench of the Tribunal in the case of Shri Nikhil ....