TaxTMI 
TaxTMI 
2012 (6) TMI 900
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....ashkary of the Lashkary Group who was searched on 06.08.08 as its share holders. During the period relevant to the assessment year 2007-08 there was no Trading Activity. The return of income for AY 2007-2008 declaring NIL income was filed 04-03-2009. During this year, the assessee company purchased a land admeasuring 6.06 hectare. The land in question is situated at village Bhavgarh Bhanda, Teh. Sanganer, Distt. Jaipur. The assessee purchased this land through "Agreement to Sale" for Rs. 1,25,00,000/- Further the assessee company also got executed "Will" and Power of Attorney from the owner of the land in favour of Shri Arun Lashkary. Shri Arun Lashkary, having power of attorney of the legal owner of the land (Shri Deen Dayal & others) transferred legal title/legal ownership of this land to the assessee company by executing the "Registered Sale Deed" on 20.10.2007. The assessee company applied to JDA for approval of residential scheme and finally got the scheme approved from JDA. The assessee company deposited Rs. 1,00,74,005.00 in Oct 2007 (AY 2008-2009) with JDA against approval/conversion charges. The JDA issued three 'pattas' in favor of the assessee company on 05.11.2007 one f....
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....rores for 6.06 hectares and incurred further Rs. 1.25 crores for registration and others or for instance the case of the assessee who owns Pushp Garden property at Murlipura whose purchase rate/market rate is not 22.5 (omitting three zeroes). The purchase prices have been verified from the deeds lying under seizure with the department. The AO mentioned that the market value of the land as per the documents seized from the assessee at Ann A 40 is Rs. 6000/sq yard. As for column three, there aren't any expenses that correspond to these figures in such land accounts on jambandi/conversion either before or after purchase and in none of the properties, these expenses match. As for column four, these are not the area of land owned by the assessee group as Bhavgarh Banda is a 72,000 sq yard; Pushp Garden is 21000 sq yard and so and so forth. The total of column 4 (18.3) is not the area owned by the assessee group in either bigha/sq yards/sq feet/ hectare. In view of these facts, A.O. observed that the statement given by Sh. Pawan Lashkary during post search inquiry was not correct on this issue. The department has seized another paper Ann A 40, page 77. In this paper, land expenses have b....
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....and again stressed that the JV papers were not prepared by him but by Chhabra & Co. However the assessee has not proved this sufficiently. A mere statement does not rebut the presumption of s. 132 (4A) and as has been seen, the assessee is quite capable of changing his statements to suit his convenience. The AO mentioned that thus piecing together these important papers seized during search and the contradictory explanation of the assessee at various instances, one can safely arrive at the conclusion that the coding that the assessee had written as 330 in page 37 of Exhibit 57 is indeed 3.3 crores. But as stated by him it is not the market value but the actual expenses of the land which he has incurred because the market value as he himself has made is Rs. 37 crores. The AO mentioned that the above said seized paper 37 of Exhibit 57 is not dumb paper as the assessee has tried to impress because the scribbling in the seized papers are corroborated with the books maintained by the assessee. The scribbling at Ann A 37 are on the land banks owned by the assessee. The document of email amply proves that the market rate of this property is Rs. 6000 per sq yard and for 62000 sq yards; it ....
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....tsalya. (The AO reproduced the copy of seized page 37 of Annexure A-57) Actually it is 45. The copy of seized page is at PB page 36. 4 Omitted by writing three zeros- indicates purchase rate/market rate. The assessee stated in search statement that market rate of the land is mentioned in the column before the name of the land. (The ld AO inserted the words purchase rate at her own without appreciating the search statement in this regard). 2.2 In para 3 of the Assessment Order the Ld. AO mentioned that Shri Pawan Lashkary the key person of the group has scribbled names of the properties owned by the companies in Lashkary group. Whereas the fact is that the Lashkary group owned about 40 properties in the group (List PB page 442 to 451) whereas names of only nine properties were listed in the impugned seized annexure page 37 of Annexure A-57. This shows that this paper was not prepared to jotting down the cost of the properties. If it was so, than all the properties under the group would have been listed - not few of them. Shri Pawan Lashkary listed only nine properties out of total 40 properties. This shows the intention of Shri Pawan Lashkary was not to jotting ....
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....e in question No 10 of the statement of Shri Pawan Lashkary before the DDIT on 17.11.2008 is not reliable and she has rejected this statement in toto. Therefore, no inference should be drawn on the basis of rejected statement. 2.4 In para 6 of the assessment order the ld. AO mentioned that the market value of these lands as per the documents seized from the assessee at Annexure A-24 is Rs. 13000/- per Sq Yard. In this regard at the outset we object the observation of the ld AO that this document was seized from assessee. Factually, this paper was not seized from the possession of the assessee company. The registered address of the assessee company is B-304, Janta Colony, Jaipur whereas these papers (Annexure A-24 & A-57) were seized from 73-74, Talkatora, Jaipur which is premises of M/s Pawan Enterprises. Secondly this paper does not show the market value of the property but it was an asking price from a particular prospective person who offered for joint venture. The person was totally unknown to the assessee. Further the person was from outside Jaipur and his past history, creditworthiness, past experience; goodwill etc. were not known to the assessee. ....
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....007-2008, AY 2008-2009 and AY 2009-2010 34,78,590.00 Deposited in JDA against conversion etc AY 2008-2009 and AY 2009-2010 1,28,89,926.00 Construction for demarcation etc AY 2008-2009 84321.00 Thus, the land cost was only 125.00 lacs whereon the expenses for JDA charges were Rs. 128.90 lacs. The question for matching the figure in column 3 does not arise because this represents an estimated figure of expenses to be incurred. 2.5 The ld. AO failed to appreciate the figures mentioned on seized annexure A-24 page 159 and 161 (Copy at PB Page 32 to 34) and Annexure A-40 page 73-76 (copy at PB page 27-31). Ld. AO wrongly interpreted/concluded that market value of the land at "Bhavgarh" Rs. 37,06,98,000. The assessee advertised in News paper for sale of the land (PB page 37). In response to this advertisement, several persons approached to the assessee by Email or on phone. The copy of some of the Emails is at PB Page 39 to 44. One of the Emails was from G.K.Sharma. The assessee quoted him the market rate of Rs. 6000/- per SQ for outright sale (the value comes to Rs. 37.06 crores for the land of the assessee). The assessee quoted a very high r....
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.... and "Pushp Garden" . Whereas the seized paper 37 of Annexure A-57 was prepared at different point of time for different builder and it was a composite proposal for 9 projects. 2.8 The addition is not based on material, but surmises, conjectures presumptions and assumptions purely on the basis of deaf and dumb documents. a) The ld AO wrongly concluded that the column 4 of the seized annexure A-57 page 37 represents to cost of land. Copy of said page is PB Page 36. The entire finding is based on presumption, assumption, probabilities and possibilities. No any positive material was brought on record to show that column 4 of the seized paper represents the cost of land. Figures mentioned on the seized paper have no nexus with the entries in the books of accounts or documents seized by the department. The seized paper is not a speaking document. No date is mentioned. Nothing has been mentioned to visualize whether it is cost or sale or asking price. One may interpret the figures of this column as he wish. One can also say at another extreme that this column shows the unaccounted payments against the land made by the assessee as against the cost presumed by th....
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....r as under:- "The explanation of entries noted on this page is that we did not have sufficient funds, skills and experience to develop group housing scheme/projects independently. So, we advertised in news paper for sale of land approved/under approval for group housing/projects. The advertisement cutting of the news paper is also under seizure vide page 102 to 106 of Exhibit A-24 seized from 7375 Talkatora, Jaipur. Alternatively, we were thinking to develop schemes/group housing projects on various lands of our group on joint venture/ collaboration agreement/Partnership basis. We were approached by several parties for joint venture agreement. The print outs of several Emails are under seizure vide said Exhibit A-24. During the course of the discussion in respect of Joint Venture/Collaboration Agreement/Partnership with one of the prospective party, I prepared this paper for negotiation with the party. The contents of this seized page 37 of Exhibit A-57 are explained as under:- a) The offer against our share in profit/loss of joint venture was mentioned in Column 1 of the said seized paper. For example we offered our share of 26.66% in profit or loss; if joint ven....
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....the order sheet for both the cases.) The assessee further filed detailed reply vide letter dated 11.12.2010 copy at PB Page 70 to 71. The explanation of the assessee was as under: - " Reply to your Show cause query in order sheet for proposed addition of Rs. 3,22,64,977/- on account of unexplained expenditure in the land a) First of all this is to submit that the figures given for proposed addition are in respect of M/s Rising Buildestates Pvt Ltd and not in the case of the assessee and in the case of the assessee these figures are different. b) In the show cause query your honour is also admitting that the Page No. 76 of Annexure A-40 is estimation of joint venture and the rate of Rs. 6000/- per SY mentioned at email printout seized vide page 142 of seized Annexure A-24 is asking price of the land if sold outright basis. The Page 73-74 of Ann A-40 is neither a separate estimate nor separate projection but connected working in connection with Page 76 of Ann A-40. These projections were prepared by the same person who offered the proposal of joint venture to the assessee. In the page 73-74 the projection is made monthly basis while in Page 76 is summary of....
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....vement of investment by developer, expected profit from the share received by the owner in the built up area, period of completion of project, size of project, expected FAR from JDA, expected availability of height etc. Thus, the upfront price and sharing ratio may vary person to person and project to project. Therefore the ld. AO was of the opinion till 11.12.2010 that seized annexure A-24 page 159 shows the cost of land and in her three repetitive show cause notices, she reiterated that the cost of the land was Rs. 4,55,88,400/- and seized paper 159 of Annexure A-24 shows the actual cost of the land (in case of Rising Buildestates Pvt Limited). In the case of show cause notice to the assessee she whispered about the figure of Rs. 7,41,39,600/- on the basis of page 74 of Annexure A-40, but at the end of the notice, she repeated the figures of notice issued for Rising Buildestates Pvt Ltd. After seeing the detailed explanation of the assessee, she felt that the addition against cost of the land cannot be sustained on the basis of seized annexure A-24 page 159/A-40 page 74. Then, she changed her stand and held that column 4 of seized page 37 of Annexure A-57 shows the....
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....p group housing scheme/projects independently. So, we advertised in news paper for sale of land approved/under approval for group housing/projects. The advertisement cutting of the news paper is also under seizure vide page 102 to 106 of Exhibit A-24 seized from 73-75 Talkatora, Jaipur. Alternatively, we were thinking to develop schemes/group housing projects on various lands of our group on joint venture/ collaboration agreement/Partnership basis. We were approached by several parties for joint venture agreement. The print outs of several Emails are under seizure vide said Exhibit A-24. During the course of the discussion in respect of Joint Venture/Collaboration Agreement/Partnership with one of the prospective party, I prepared this paper for negotiation with the party. The contents of this seized page 37 of Exhibit A-57 are explained as under:- a) The offer against our share in profit/loss of joint venture was mentioned in Column 1 of the said seized paper. For example we offered our share of 26.66% in profit or loss; if joint venture in respect of Land at Bhavgarh Bandha is finalized. b) The particulars of the land proposed for joint venture/collaboration are....
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....y the assessee vide letter dated 11.12.2010 (PB page 71) the relevant para of the letter was as under: - " As regard page 37 of Exhibit A-57 (seized from 73-75 Tal Katora, Jaipur), we would like to mention here that this page was prepared at different point of time at the time of negotiation with some other party and some figures/notings were written on this paper during the discussion with some other party and figure mentioned in column no 4 represents to amount offered for credit in assessee's capital account against the land contribution by the assessee (or say upfront price); if the joint venture/collaboration is made on the sharing basis mentioned in column no. 1. The upfront price and sharing ratio depends on several factors such as reputation of developer, nature and quality of development work to be carried out by the developer, involvement of investment by developer, expected profit from the share received by the owner in the built up area, period of completion of project, size of project, expected FAR from JDA, expected availability of height etc. Thus, the upfront price and sharing ratio may vary person to person and project to project.." Therefore the ....
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....e given to Shri Pawan Lashkary against his working for 90B proceedings, land conversion matter, approval of plan by JDA and looking after day to day construction activities of the proposed project. Balance 80% will be divided among the builder and land owner in the ratio of 2/3:1/3 respectively. According to this offer, the assessee company would get 26.66% share in the built-up area and Shri Pawan Lashkary would get 20% in the built-up area against the working. The assessee company would get 3.30 crores against the agricultural land + 26.66% share in built-up area with no responsibility of conversion of land, approval of plan from JDA. ii) Similar conditions were for "Pushp Garden". The land in question was proceeded u/s 90B but the issue of Patta by JDA was pending. Under the proposal the assessee company would get 22.50% share in the built-up area and Shri Pawan Lashkary would get 15% in the built-up area against the working in JDA for issue of the Patta and day to day construction activities. iii) The sharing ratio of 50% 40% 60% 60% and 45% was offered for Mahal Road, Dabla Khurd, Chaksu, Gunsi and Vatsalya project respectively looking to the reputation of th....
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....e contents of the affidavit are incorrect. Shri Pawan Lashkary presented himself before the AO (PB Page 69) after filing the affidavit but the statement of Shri Pawan Lashkary were not recorded by the AO to controvert the contents of the affidavit. The contents of affidavits, which are not vague should be accepted correct. Reliance is placed on the following decisions:- (i) Mehta Parikh & Co v CIT [1958] 30 ITR 181 (SC) (ii) Dilip Kumar Rao Vs CIT (1974) 94 ITR 1 (Bom); (iii) Malwa Knitting Works Vs CIT (1977) 107 ITR 379, 381 MP and (iv) Sri Krishna Vs CIT (1983) 142 ITR 618 (All). The ld AO has rejected the statement of Pawan Lashkary before the DDIT and Affidavit of Pawan Lashkary filed before her, even than what is left behind is the dumb document bereft of any details without there being any enquiry by the AO to correlate the same with other documents seized, regular books of accounts, records kept by outside agencies or statements of concerned parties-The four essential components of s. 4 of Income Tax Act, viz., the taxable event, the person chargeable, the assessment year in which charge is leviable and the total income are....
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.... howsoever strong cannot take the place of legal proof. 2.20 This paper does not reflect the investment made by the assessee company. If the department considers it as investment of the Assessee for the land, it is burden on the department to prove the figures appearing on the paper found in the search represents undisclosed investment of the Assessee. This burden is not discharged and therefore, on the basis of this paper no addition can be made. Reliance is placed on the following decisions:- i) Commissioner Of Income Tax Vs. Naresh Khattar (HUF) (2003) 261 ITR 664 (Del) To invoke the provisions of s. 69B, the burden is on the Revenue to prove that the real investment exceeds the investment shown in the books of account ii) J.S. Parkar v V.B.Parkar 94 ITR 616,644 (Bom). Kindly see observations in the dissenting judgment of Mukhi, J. in It is to be noticed that section 69 and section 69A do statutorily place a burden on the assessee to explain the source of investment or the source of the acquisition of the gold, but that burden can only arise after the initial burden on the taxing authorities of proving the factum ....
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....presumption under s. 132(4A) is not available to the authorities while framing the regular assessment. 2.23 The surrounding circumstances and capability to earn the undisclosed income should be taken into account before making addition u/s 69 of Income Tax Act. The assessee company was incorporated on 29.06.2005. In AY 2006-2007 and AY 2007-2008, there was no any trading operations. The company was not capable to earn undisclosed income to make undisclosed investment in the land. Therefore, without having any business operation, it is not possible to have any type of income whether disclosed or undisclosed. The Ld AO failed to consider this aspect. Therefore addition cannot be made in the hands of the assessee company. Reliance is placed on the decision of Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs Smt. P. K. Noorjahan 237 ITR 570 (SC) and CIT Vs Bharat Engineering and Construction Co. (1972) 83 ITR 187 (SC). 2.24 The Ld AO has relied upon the decision of Mahavir Wollen Mills Vs CIT (Del) 245 ITR 297 (2000). The ld AO misplaced the reliance on this decision as the facts of this case are totally different. In this case during ....
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....e to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S.', 'T.2' and 'D-Shop' cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of notings and jottings, it cannot be said that these are the transactions carried out by the assessee for advancing money or for taking money. Thus, in our opinion, this is a dumb document." Hon'ble High Court confirmed the findings of the Tribunal and relevant findings was as under:- "12. It is well settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or handwriting of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities i.e. CIT(A) and the Tribunal." "15. Similarly, in the present case, as already held above, the documents recovered during the course of search from the assessee are dumb documents and there are concurr....
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....se as per requirement of the statute." Hon'ble High Court confirmed the findings of the Tribunal and relevant findings was as under:- "13. Similarly, the document Annex. A-37 recovered during the course of search in the present case is a dumb document and lead us nowhere. Thus, the Tribunal rightly deleted the addition of Rs. 48 lakhs made by the AO on account of undisclosed income on the basis of seized material." 3) JAYANTI LAL PATEL vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. (1998) 233 ITR 588 (Raj) During search at the residence of Dr. Tomar, the Department official found a slip containing some figures. This piece of paper claimed to have been recovered at the time of search contains figures under two columns. In one column, the total of these figures comes to Rs. 17,25,000 from 31st May, 1989, to 8th Dec., 1989, and in the other column, the total of these figures comes to Rs. 22,12,500. An addition of Rs. 22,12,500 on the basis of figures on a small piece of paper in respect of purchase of Plot No. B-4, Govind Marg, Jaipur was made by the AO. This plot B-4, Govind Marg, Jaipur, has been purchased jointly by Dr. Tomar, Dr. Mrs. Tomar and....
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....e Tribunal was as under:- "20.1 After perusing the findings of the CIT(A) and the submissions of both the parties, we do not find any infirmity in these findings. Firstly the finding of the CIT(A) has not been controverted by the learned Departmental Representative by filing any positive evidence. The copies of the pages found from the possession of the assessee are placed in the paper book and after going through these papers, we find that these are simply deaf and dumb documents and they cannot be considered for making any addition. This is a settled principle of law that any document or entry recorded in those documents should be corroborated with a positive evidence. Here in the present case nothing has been corroborated or proved that assessee was dealing in money lending business." 7) N.K. MALHAN vs. DEPUTY COMMISSIONER OF INCOME TAX* (2004) 91 TTJ (Del) 938 The findings of Hon'ble Tribunal was as under:- We have perused the aforesaid explanation and the seized document placed at assessee's paper book-I pp. 48 and 50. The document does not state of any date or the year against the entries written therein. It does not show whether the ....
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.... in respect of the various figures noted therein. The slip does not indicate whether the figures referred to quantities of money or to quantities of goods and whether one side, and if so, which side represents receipts which side represented outgoings. Thus, is, thus, a dumb document and as the orders of the authorities below would show they have merely added the total of the right side of the slip without supplying the figures any language to indicate their meanings. In the case of such a dumb document, the provisions of s. 132(4A) do not permit anyone to presume that the total of the figures of right side of the slip represents the assessee's income. The presumption at the most is attracted to the figures and a further presumption that they represent the income of the assessee is not permissible under s. 132(4A). When a dumb document, like the present slip, is recovered and the Revenue wants to make use of it, it is the duty of the Revenue to collect necessary evidence which may provide an acceptable narration to the various entries. The evidence collected should be such that any reasonable man would accept the hypothesis advanced by the Revenue that the figures written on th....
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....at they are party wise account as there is no mention of any bill having been raised against the said transactions. The amounts mentioned therein appeared to be a consolidated figure but date on which these amounts are shown as outstanding is not mentioned. In both the years there are only one instance of payment received appears but the date and mode of receipt are not mentioned. The AO has also noted that cheques received as per this diary are duly recorded in the books of account. These accounts cannot be treated as reliable and properly maintained for another reason also. The next year's accounts give no indication regarding movement of amount. The parties show drastic reduction in the balances but how the payments were accounted for is not forthcoming from these entries. The Authorised Representative has invited attention to the fact that the AO did make enquiry, which the assessee has not disputed. However, the AO has not brought on record the result of such an enquiry. The only plausible conclusion, under these circumstances, would be that the findings of such an exercise was favourable to the assessee. Coming to the applicability of provisions of s. 132(4A), the assessee ha....
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....be made in the hands of assessee on the basis of the dumb loose slips seized from his residence, in the absence of any corroborative material to show payment of any undisclosed consideration by the assessee towards purchase of land. 13) Hissaria Bros Vs ACIT (ITA No. 179/JDPR/1998) 22 Taxworld 684 ITAT Jaipur. It was held that addition cannot be made on the basis of vague figures found noted on seized loose paper without proving that the alleged amount are receipts and income of the assessee. 14) ITO Vs Mannalal Jhalani (ITA No. 250 TO 260/JP/1998) 22 Taxworld 551 ITAT Jaipur. It was held that addition cannot be made simply recovery of some papers found and seized during the course of search without making necessary verification and examination. 15) Ashwani Kumar Bhardwaj Vs DCIT 21 Taxworld 358 ITAT Jaipur. It was held in para 29.6 that no addition can be made on the basis of deaf and dumb documents. 16) Mohd. Illias Choudhary Vs DCIT 25 Tax World 394 ITAT Jaipur. It was held that the addition cannot be justifiably be made as undisclosed income on the basis of certain entries found recorded on a seized paper without making any inquiry and invest....
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....eflect the intention of Sh. Pawan Lashkery in writing the cost of the properties but for the purpose of entering into a supposed joint venture with some unknown entity in respect of which no material was seized during the course of search nor the Assessee-company or its Id. Counsel able to furnish during the course of assessment proceedings or even as an additional evidence at such a later stage at the level of appeal before your good-self. Not a single shred of evidence in favour of the story of purported joint venture has been furnished by the Ld. Counsel who wishes the Department to accept his point of view without challenge! It is only a matter of pondering as to what was the basis on which the Assessee-group agreed or thought it fit to enter in to the supposed joint venture in which the range of their share varied from 26.66% to 80%- not to forget the fact that no evidence in this regard has also been filed by the Assessee-group or their Ld. Counsel. 4. Para 2.4: The Assessee-group has stated that Sh. Pawan Lashkery was totally confused and made the statement ex-tempore at the time of search and thus his statement does not reflect the true nature of the impugned docum....
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....ent has been submitted which require specific comment. In respect of the numerous case laws cited, it is submitted that the same are mounted on different facts and circumstances which are wholly different from those of the instant case of the Assessee-company and such the ration does not apply in the instant case. 4. The Ld AR in his rejoinder submitted as under:- 4.1. The Ld AO has not brought any new facts or evidence in support of her contention and has repeated the findings made in the assessment order. The facts and submissions and case laws cited in the written submission of the assessee has not been controverted by any positive evidence. 4.2 In para 2 of written submission the ld. AO accepted the typing error regarding mentioning of figures of "95" as against the correct figure of "45". Regarding other mistake pointed out by assessee in written submission regarding insertion of word purchases rate by AO as her own we draw your kind attention on the statement of Shri Pawan Lashkary dated 17.11.2008 wherein at page 6 of statement (PB Page 50) wherein he stated that the market rate of the land is mentioned in the column before the....
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....he AO to prove the investment. Therefore, here the onus was on the ld AO to prove by positive evidence that the assessee has mentioned cost of the properties in column 4 of the seized paper and the assessee's explanation is wrong. In the case of the assessee, the Ld AO has not brought any document or material to prove that the cost is mentioned in column 4 of the seized paper. The onus of the ld AO cannot stand discharged merely rejecting the explanation of the assessee. The ld AO had vast statutory power to make inquiries from the seller of the land or from other persons but instead of making any inquiry or bringing any positive evidence against the assessee, she rejected the explanation of the assessee merely on surmises and conjectures. Further, the preponderance of probabilities is also in favour of the assessee. There are lots of Emails in the seizure (PB page 35 to 44) from different parties and in some of the mails there is proposal of joint venture also. Further some proposal come to assessee on telephones/through brokers/directly discussion with parties for which no direct evidence can be submitted. Further the seized paper 73 to 76 of Annexure A-42 (PB Page 27 to 31) is a....
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....his was an asking price. The asking price always differ from market price and the vary party to party, time to time, place to place. Further if it is presumed that this is market price of land still it does not matter in the case of the assessee because in the case of assessee the issue is regarding Up-front price to be received in case of joint venture and the same cannot be remain same in each case. The price and sharing ratio depends on several factors such as reputation of developer, nature and quality of development work to be carried out by the developer, involvement of investment by developer, expected profit from the share received by the owned in built up area, period of completion of project, size of project, expected FAR from JDA, expected availability of heights etc. Further, this may also be seen from the fact that the upfront price offered by a prospective buyer (Email) in respect of Pushp Garden scheme was Rs. 4,55,88,400/- and the figure 400 mentioned in the column 4 of the seized paper against the name Pushp Garden, this clearly shows that figure mentioned in column 4 of the seized paper 37 was an offer of upfront price of the same land from another prospe....
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....tting figure 50 and this fact has been admitted by the power of attorney-holder that figure 50 is omitted. 330 figure is nothing but the cost of purchase of land from the seller. The Assessing Officer has examined the issue at great length. Statement of power of attorney holder was also recorded who has given statement at different point of time, therefore, his statement was brushed aside by the Assessing Officer rightly. Thereafter, after analyzing the seized paper, the Assessing Officer concluded that the figure of 330 indicates Rs. 3.3 crore and assessee has given the payment to the seller to the tune of Rs. 1.25 crore only and, therefore, the remaining figure was treated as unaccounted investment and, therefore, was rightly added under section 69B. Attention of the Bench was drawn on various pages of the paper book i.e. page 36, 59 to 61 and also pages 32 to 35. The Ld. D/R also filed certain additional supporting evidences and in respect to additional supporting evidences, it was submitted that these additional supporting evidences are crucial to decide the issue. It was also submitted that they could not be considered by the Assessing Officer during the assessment proceedings....
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....sessment order, remand report, the material available on record and cases citied by both the parties. On perusal of assessment order, I find that the AO has made the addition of Rs. 2,00,19,492/- by applying the provisions of section 69B of Income Tax Act. From the assessment order, I find that the AO has finally made the addition on the basis of noting available on the seized page 37 of Exhibit A-57, seized from 73-74, Talkatora Jaipur. The AO has referred another seized papers page 73 to 77 of Annexure A-40 seized from 7374 Tal Katora to support her view that the market value of the properties is not mentioned on the seized Page 37 of Exhibit A-57. The AO further mentioned that the Shri Pawan Lashkary has not made correct statement in the post search inquiry, wherein he stated that area of the land is mentioned under column 4 of the Page 37 of Exhibit A-57. The AO mentioned that Sh. Pawan Lashkary has filed sworn affidavit during the course of the assessment proceedings explaining the contents of the above referred seized paper wherein it explained that the market value of the land for the joint venture purpose was mentioned over the said seized paper. The AO mentioned that this ....
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....paper 73 to 77 of Annexure A-40 is the projection for the joint venture prepared by some third party developer and apparently given to Sh. Laskhkary as proposal for discussion. On page 76-77 of Ann A-40 working for land area, built up area, cost of land, cost of building, marketing expenses, administrative expenses etc are estimated/projected for joint venture. At bottom of the page, 20% is mentioned against 'cost % to be paid upfront to owner'. The total land area is taken 61783 sq yards and land cost is taken Rs. 6000/- per sq yards and total cost of the land is taken Rs. 37,06,98,000/- on this seized paper. On page 75 of the seized Annexure A-40 projection is made for inputs, costings and revenues. On page 74 of the seized Annexure A-40 Projection was made for Fund Flow assuming all the flats are sold within 6 months. In this paper land expenses are taken Rs. 74139600/- as outflows of fund in 1st Month of 1st year. Rs. 7,41,39,600 is exactly 20% of Rs. 37,06,98,000/-. Therefore, the figure Rs. 37,06,98,000/- is full value of the land estimated for joint venture and the figure 7,41,39,600/- is the amount to be paid to the land owner against the joint venture as indicated by the a....
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....ctice of the trade that the land owner is paid part amount of the value of the land in cheque/cash and balance against the land value is payable by sharing the construction area in between the developer and land owner. 5.5 Without prejudice to above, it may be mentioned that assessment proceedings in the case of appellant M/s Countrywide Buildestate Pvt. Ltd as well as another company of the group M/s Rising Buildestate Pvt. Ltd were going on almost simultaneously. Almost same or similar nature of seized pages has been referred during the course of assessment proceedings in both cases for the purpose of show cause. In the opportunity given by way of order sheet noting in the case of appellant M/s Countrywide Buildestate Pvt. Ltd., the A.O. has referred to e-mails discussed above and page 74 of A-40 mentioning figure of Rs. 7,41,39,600/- in respect of appellant as well as figure of Rs. 4,55,88,400/- mentioned on page 159 of Ann. A-24 in respect of M/s Rising Buildestate Pvt. Ltd. (the contents of order sheet giving show cause in the case of another company namely M/s Rising Buildestate Pvt Ltd and the appellant are same except the change in heading). Though in this order sh....
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....from the share received by the owner in the built up area, period of completion of project, size of project, expected FAR from JDA, expected availability of height etc. Thus, the upfront price and sharing ratio may vary person to person and project to project. " The appellant has further explained before me the reason of variation in figure of 7,41,39,600 and 330 as under:- 'As regard difference in the upfront price of Rs. 7,41,39,600/- mentioned on the seized page 74 (PB page 30) and figure 330 mentioned on seized page 37 (PB page 36) in respect of Bhavgarh, we submit that upfront price of Rs. 7,41,39,600/- was calculated for the whole land i.e. 61783 SY Yards (which includes the land under internal roads) as clear from the calculation given on seized paper 77 (PB page 27), whereas this scheme consists three plots Viz plot No 1 measuring 23217.53 SY plot No 2 measuring 32436.84 SY and Plot No 3 measuring 2987.41 SY. The offer from the buyer (under email) was for the whole land whereas the offer from another buyer (figure written in seized paper page 37) was only for one plot measuring 23217.53. This was the reason of difference in between 74139600 and 330.'....
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....ussed and observed in the appeal order no. 403/1011 in the case of M/s Rising Buildestate Pvt. Ltd). After perusing the records and analyzing the arguments of both the sides, it was held in the appeal order in the case of M/s Rising Buildestate that A.O. has not brought out any positive material to establish that entry in column no. 4 of the impugned seized page 37 of Ann. A-57 represents cost and has also not given any correlation or justification or the basis for treating the entries in column no. 4 as the cost of the land. A.O. has merely rejected the explanation of these entries given by the appellant that these represent the estimated upfront charges of the proposal of joint venture on these lands and after rejecting the explanation, the A.O. has just mentioned that the figure in column 4 represents the cost of the land. It was finally held that A.O. is not justified in making addition u/s 69 without bringing positive evidence on record. The further common discussion in the aforesaid appeal order no. 403/10-11 in the case of M/s Rising Buildestate Pvt. Ltd, which is also equally applicable to the present case of the appellant i.e M/s Countrywide Buiidestate Pvt. Ltd is reprodu....
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....e appellant. Such addition to be made u/s 69 B is contradistinct from the claim of the deduction or allowance made by the assessee wherein the addition can be made if the evidence so furnished or explanation so given by the appellant is found to be lacking or incorrect/rejectable. In the case of addition u/s 69, the A.O. has to bring positive material to establish unaccounted investment/payment. In the instant case, no positive material could be brought out on record to establish that the impugned seized page in column no. 4 reflects the actual cost of the properties named in column no. 3. 5.10 The AO has relied on the decision of Delhi High Court in the case of Mahavir Woolen Mills Vs CIT (Del) 245 ITR 297 (2000). In this case part of the entries mentioned in the seized paper tallied with the entries in the ledger accounts maintained by the assessee. But in the case of this assessee the entries of the impugned seized document has no correlation with the books of account and other seized documents to show the actual cost of the properties is mentioned on page 37 of Annexure A-57. On the other hand, another decision of Delhi High Court namely Commissioner of Income Tax Vs. ....
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....above the amount recorded in sale agreement/registered sale deed was made. It has been explained that search was conducted on the assessee group on 6.8.2008 and certain documents related to land purchase at village Bhawgarh Bandha was found and seized. It was explained that as per Sale Deed dated 16/17.11.2006 there was a sale of agricultural land by Shri Badrinarain and Shri Mohan Lal to Shri Suresh Kalarwal, Shri Lavish Raman and Shri Nanag Ram. Thereafter, there is a sale agreement dated 18.11.2006 between Shri Suresh Kalarwal, Shri Lavish Raman, Shri Deen Dayal and Shri Nanag Ram and assessee M/s. Countrywide Buildestate Pvt. Ltd. for the purchase of this agricultural land. As per agreement seized, an amount of Rs. 20,00,000/each was paid to Shri Suresh Kalarwal, Shri Lavish Raman and ShriNanag Ram and an amount of Rs. 65,00,000/- was paid to Shri Deen Dayal. It was further explained that as per Sale Deed dated 20.10.2007 between M/s. Countrywide Buildestate Pvt. Ltd. (purchaser) and Shri Arun Lashkary (seller) who is a power of attorney holder of Shri Suresh Kalarwal, Shri Lavish Raman, Shri Deen Dayal and Shri Nanag Ram for land. As per this Deed, the assessee group purchased....
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....arwal, Shri Lavish Raman, Shri Deen Dayal and Shri Nanag Ram, Shri Mohan Lal, Shri Badri Narain and of Shri Pawan Laskary. In reply to the above discussed written note filed by the department, the assessee has also filed a reply by which it was strongly stated that the supporting evidences should not be accepted now as they were before the AO at that point of time. It was strongly stated that neither these statements of original land owners were known to the assessee for its reply nor the assessee was allowed to cross examine these people. Reliance is placed on various case laws including Dal Chand & Sons vs. CIT, 12 ITR 458 (Lahore), in case of Kishani Chand Chela Ram, 125 ITR 713 (SC) and many more mentioned in the written note filed by ld. A/R which was filed in response to written note filed on behalf of the department. We have taken into consideration all these supporting evidences as well as written note and reply of the ld. Counsel of the assessee and after taking into consideration, we find that ld. CIT (A) has examined the issue in detail as mentioned above and the finding of ld. CIT (A) remained uncontroverted, therefore, in our considered view, the findings of ld. CIT....
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....the department should not be admitted and cannot be admitted because as per this written note it is amply proved that the statements were before the AO, however, he has not taken into consideration knowingly. Now they want to take into consideration these supporting evidences, in our view is not permissible either in the eyes of law or in the facts of the present case, therefore, we refuse to accept these supporting evidences, as, in fact, these evidences are not supporting evidences but are totally new evidences which were not taken into consideration by the AO. Now the department wants to take into consideration these evidences just to make a new case which cannot be allowed. Accordingly we decline to take into consideration these additional evidences at this point of time. Various courts at various levels have held that if any document which was relied by the AO, wanted to rely by the department, then the first and foremost duty of the department is that the piece of evidence which they want to rely upon has to be confronted to the assessee or the other party as the case may be. If there is any statement of any person which they want to take into consideration, then cross exa....
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....wants to utilize the statement recorded at the back of the assessee which was neither confronted to the assessee nor assessee has opportunity to cross examine the same. Therefore, at this stage, the statement of any third party which the department wanted to rely upon cannot be considered as it will tantamount to make a new case. 16. We have already decided similar case in case of M/s. Rising Buildestate Pvt. Ltd. in ITA No. 962/JP/2011 by order dated 22.6.2012 in which the identical facts are involved. The addition was made on the basis of column no. 4 of page 37 of Annexure A-57. The addition was deleted by Ld. CIT (A) and the order of Ld. CIT (A) has been confirmed by us. Since the facts are identical in the present case, therefore, in view of the above facts and circumstances discussed above and in view of the reasoning given by us in that case i.e. M/s. Rising Buildestate Pvt. Ltd., we confirm the order of Ld. CIT (A) in this case also. 17. The cross objection filed by assessee in support of the order of Ld. CIT (A) which does not require any separate adjudication upon, therefore, the same is treated as infructuous in nature. 18. In the result, appeal of the departmen....