TaxTMI 
TaxTMI 
2019 (12) TMI 1438
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....he assessment proceedings and of the assessment framed in the case that too under section 144/143(3) of the Act without considering the material on record and more-so when the assessment order was passed without following principles of natural justice and on the basis of material collected at the back of the assessee but never confronted to the assessee. 3. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming addition of Rs. 17,91,73,500/- (instead of addition of Rs. 17,91,00,000/- made in assessment), being money received in bank account of the assessee during the impugned year, as alleged unexplained credit under section 68 of the Act. 4. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 17,91,73,500/- on account of amount received from M/s. Samyak Projects Ltd. during the impugned year as income generated by the assessee without appreciating correct facts of the case. 5. That in any view of the matter and in any case, the action of Ld. CIT (A) in confirming the addition of Rs. 17,91,73,500/- is bad in law and ....
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....ishtha (Prop. M/s. Yathartha Constructions). (Refer F/A). As per PAN jurisdiction, only the last named person is assessed to tax in Ward-38(3), New Delhi. Briefly, the facts are as under:- i. During the course of investigations by ADIT (Inv)-1, Faridabad, it came to light that there was a piece of land measuring 8.395 acres in Sec-91, Gurgaon in the books of M/s. Aravali Heights Infratech P Ltd. and 6.017 acres in the books of M/s. SRP Builders Ltd. Both these companies had got joint license from Directorate of Town & Country Planning, Haryana, for construction/development of a group housing complex on the joint land measuring 14.412 acres. ii. Sh. Yathartha Vashishtha (Prop. M/s. Yathartha Constructions) obtained 100% control in both companies by purchasing shares of these two companies from existing share holders vide MOU dated 25.06.2010. iii. M/s. Aravali Heights Infratech P. Ltd., M/s. SRP Builders Ltd. and Sh. Yathartha Vashishtha (Prop. M/s. Yathartha Construction) entered into further agreement with M/s. Samyak Project P. Ltd. on 09.09.2010. Under this agreement, the first three entities sold construction/development/ownership rights in t....
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....ade. 4. The assessee is an individual and proprietor of 'M/s. Yathartha Constructions' engaged in the business of civil contractor and developing of group housing complex. On the information received from the Investigation Wing as incorporated above, the Assessing Officer observed that assessee had received sum of Rs. 17.91 crores from M/s. Samyak Project Pvt. Ltd. and the payment of the said amount has also been confirmed by Shri S.K. Jain, the Director of M/s. Samyak Project Pvt. Ltd., during his statement on oath in response to summons issued u/s. 131 before the ADIT (Inv.) on 16.04.2012 and 24.12.2012. The statement has been incorporated in the assessment order and also in the impugned appellate order. From the material and information received and from the statement, the Assessing Officer concluded that the amount of Rs. 17.91 crore received from M/s. Samyak Projects Pvt. Ltd. which has been duly confirmed by the Director of the said company has not been offered as taxable income by the assessee nor any explanation was filed. Accordingly, he treated the said amount as unexplained cash credit which has been added u/s. 68. 5. Further, Assessing Officer noted from t....
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....m page 3 to 5 of the said agreement and (Paper Book Page No. 28-30), it may please be seen that subject matter of the agreement is a real estate project which was owned by M/s. Aravali Heights Infratech Private Limited and M/s. SRP Builders Limited. * Further from page 1 and 2 of the agreement dated 29/09/2011 (Paper Book Page No. 26-27), it may please be seen that first 3 parties has been described as owners, whereas the assessee has been described as a confirming party. * From page 7 (Paper Book Page No. 32) first term, it can be seen that these owners had transferred FSI in their project to M/s. Samyak Projects Pvt. Ltd. From the above, it is absolutely clear that money in question that had been paid by M/s. Samyak Projects Pvt. Ltd. had come against sale of the project by the owners and not by the assessee. In these circumstances liability to pay tax is on the owners. * For the reasons contained in the first para of Page 6 of agreement (paper book page no. 31) read with agreement dated 25/06/2010 (paper book page no. 9-15), the assessee was merely a confirmatory party in the deal and was repository of the funds received by him on behalf of th....
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....n perusal of the facts and material on record, have given following findings of fact: 1. That the appellant had received an amount of Rs. 17.91 crore from M/s. Samyak Projects Ltd. during the year under consideration. 2. That M/s. Aravali Heights Infratech Pvt. Ltd., Sh. Vikram Singh, and M/s. SRP Builders are owners of total of 115 kanals and 6 marlas (approx. 14.412 acres) land at residential sector 91 of Gurgaon-Manesar Urban Master plan 2021. 3. That Sh. Vikram Singh had relinquished his part of the land to M/s. Aravali Heights Infratech P Ltd. and M/s. SRP Builders Limited for a consideration of Rs. 3.11 crore. 4. That M/s. SRP Builders and M/s. Aravali Heights Infratech Pvt. Ltd. had entered into an agreement with M/s. Yathartha Construction vide an MOU dated 25/06/2010 where in M/s. Yathartha Construction would acquire the right to develop the said land along with purchase of shares resulting in gradual 100% control in M/s. SRP Builders Ltd. and M/s. Aravali Heights Infratech P Ltd.. 5. That as per MOU, an amount of Rs. 55.68 Cr would be given by M/s. Yathartha Construction to the vendors. 6. That as part of MOU, M/s. Yathartha Co....
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....d amount can be only taxed as capital gain, is devoid of any logic and merits. He further held that there is no denying fact that assessee has generated an income of Rs. 35,91,73,500/- in the entire chain of transaction and the income so generated is required to be brought to tax and what assessee is claiming is merely the application of such income which has been invested in such shares, later on sold to M/s. Samyak Projects Ltd. The income generated out of such share transfer is to be taxed under the head 'capital gain'. However, the assessee's claim that amount of Rs. 35,91,73,500/- is in the nature of advance is divorced from the facts and is not borne out from any material on record. The amount received from M/s. Samyak Projects Ltd. is on account extinguishment of his right over the property agreement of the assessee has entered into previously with the original owner of the land and the said amount is full and final payment. Since the assessee was never the owner of the land, hence, the entire amount he got in the deal as confirming party is required to be taxed in his hand. Therefore, Assessing Officer is justified in taxing the amount of Rs. 17,91,73,500/-. ....
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.... at page 2 and the dispatch register obtained from Department through RTI pointing out that the notice was sent on the old address mentioned as "152, 2nd Floor, Mohan Bhawan, Sarai Junega, Delhi 25". However, there is no service record that the said notice was served upon the assessee. He further pointed out that all the notices sent by the Assessing Officer have been sent on the old address including the second notice u/s. 143(2). Hence, in absence of any valid service of notice, the assessment record is bad in law and in support he strongly relied upon judgment of Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon as reported in (2010), 321 ITR 362 (SC) and following other decisions:- "1. Delhi High Court in the case of Veena Devi karnani vs. ITO in WP(C) 7540/2018 order dated 14.09.2018. 2. Bengaluru High Court in the case of Nittur Vasanth Kumar Mahesh, order dated 11.04.2019 3. Bombay High Court in the case of Harjeet Surajprakash Girotra, order dated 16.07.2019. 4. Pune ITAT B Bench in the case of Anil Kisanlal Marda, order dated 01.07.2019." 13. On merits, he submitted that first of all, the material gathered by th....
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.... 30.09.2013 wherein assessee himself has mentioned the same address. This return has been filed after so called intimation letter dated 05.07.2013. Further, even in the notice issued to the HDFC u/s. 133(6) the reply of which was received on 19.10.2015, the address in the bank account of the assessee was exactly the same as mentioned in the notice u/s. 143(2). Thus, not only the assessee's claim is false but also mala fide. He further submitted that the notice u/s. 143(2) generated by the Department on the basis of the address of the assessee given in PAN data base and PAN data showed the same address. In support of his argument, he relied upon the following two judgments of the Hon'ble Jurisdictional High Court:- 1. In CIT Vs. Madhsy Films (P.) Ltd. (2008) 301 ITR 69 (Delhi), the Hon'ble Delhi High Court held that, where notice issued to assessee under section 143(2) had been dispatched by speed post at its address as per its return and same had not been received back, it could be presumed that it had reached assessee, particularly when no affidavit had been filed by assessee to effect that notice was not received by it. 2. CIT Vs. Yamu Industries Ltd....
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....the said letter was also mentioned in the submissions made before the Ld. CIT (A), and therefore, once intimation has been given to the Assessing Officer, then it was incumbent upon the Assessing Officer to serve the notice on the change of address. However, the averments made by the ld. counsel on the face of the assessment records, does not appeal to us for the reason that:- * Firstly, it has been held by the ld. CIT (A) that during the course of the appellate proceedings that this letter was never shown nor filed before him, which is clear from his finding given at page 8 of his order which reads as under: "The appellant has claimed that it has submitted a letter dated 05/07/2013 about the change of address. However, I have found that the appellant had filed its return of income for A.Y 2013-14 on 30/09/2013 giving the same address i.e. 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi-110025. Therefore the appellant's claim that it has changed its address from 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi-110025 is not tenable. Further, the appellant has also failed to produce any such letter that it has claimed to have filed before the A.O on 05/07/20....
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....ttal presumption but in absence of any proof to the contrary, there is a strong presumption of a proper service of notice. Here, in this case, the record shows that the notice has been sent through speed post by the Assessing Officer and the dispatch Register shows a bulk speed post of various notices sent to various assessee's on the same date mentioning the speed post sent from the office of the ITO, Ward-38(3) which is 902-96 and the ED Number has been mentioned as 440. Once a notice has been sent on a proper address and said notice has not returned back, then it is deemed to have been affected in time to the assessee. The Hon'ble Jurisdictional High Court in the case of CIT vs. Madhsy Films Pvt. Ltd. as reported in (2008) 301 ITR 69 (Del.), in the context of notices issued u/s. 143(2) held that, where notice has been issued to the assessee u/s. 143(2) and has been sent by the speed post on the given address as per the return of income and if the same has not been received back, then it is presumed that it has reached the assessee. Similar view has been taken in the case of CIT vs. Yamu Industries Ltd. as reported in (2008) 306 ITR 309 (Del). Accordingly, we hold that he....
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....r 2010-11 and balance sum of Rs. 17.91 crore was received during the financial Year 2011-12. In the statement recorded on oath of Shri S.K. Jain, Director of the Samyak Projects Ltd., he has categorically stated that the money was given to the assessee as confirming party and is not in the nature of advance. For the sake of ready reference the relevant portion of statement is incorporated herein below: "Q6. I am showing you agreement dated 29.09.2011 between I) Aravali Height Infratech Pvt. Ltd. 2) Vikarm Singh 3) SRP Builders Ltd.-referred as first part or owner & Yathartha Construction-referred as confirming party & Samayak Projects Pvt. Ltd. kindly explains major highlights of this agreement. Ans. Before this, I would like to draw your attention to agreement dated 09.09.2010 between the above mentioned parties (copy submitted). As per clause 7 & 8 read with clause 2b of this agreement Samayak Projects Pvt. Ltd. was given the right to commence ground work on the land In question at the cost & expenses of/Samayak Projects Pvt. Lid. As far as I remember detail of payment schedule as per clause 2b of this agreement was made by 31.03.2011 (part of record will be sub....
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....c-91, Manesar, Gurgaon as on date. Ans. To the best of my knowledge on some part of land there is some grass and little pit of ground improvement by the Developer. Q. 11. As per schedule-1 of agreement dated 29.09.2011 Samayak Projects Pvt. Ltd. was supposed to make payment of Rs. 82,07,39,540/-, Kindly specify whether all the payments have been made by Samayak to the parties of agreement. Ans. Samayak Projects Pvt. Ltd. has made payment of 82,45,74,329/- upto date. I am providing you Certificate dated 15.12.2012 from C.A. showing details of payment made against this agreement. Statement dated 24.12.2012: Q. 7. Please explain whether payment for acquiring land right In respect of land measuring 14.41 acres situated at Sector-91 Gurgaon has been paid In full and final manner, If yes phase give the details with evidence? Ans. We have made full and final payment In lieu of the land rights acquired from the M/s. Aravali Heights infrastructure Pvt. Ltd. M/s. Yathartha Constructors a M/s. SRP Builders Pvt. Ltd. and Sh. Vikram Singh. The detail of payment have been duly mentioned in agreement doted 25.09.2012 and copy for the same is g....
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....Yes we have received Rs. 16 Cr. out of 63 Crores (Approx.) Q13. Please explain whether M/s. Aravali Heights Infratech Pvt. Ltd., M/s. SRR Builders Led. M/s. Yathartha Construction and Sh. Vikram Singh have made any general Power and Attorney In favour of you. If yes give the copy of the same and state the exact status of GPA as on the date? Ans. 13. Yes the above referred persons through their Authorized Signatory have made GPA In favour of me on 29.09.2011 duly registered with the Sub-Registrar of Noida Authority for oil purpose Including development and constructor Sale of flats, sale of land etc. The GPA Is still active till date. The same was again affirmed by the agreement dated 25.08.2012. Thus the general Power of Attorney is stand valid in my favour. Q14. Please explain whether you have handed over the Physical Possession over the, land for development and constructor to M/s. Ansal Properties and Infrastructure Ltd. If yes, please furnish the evidence for the same? Ans. Yes, we have handed over the Physical Possession to them for development and construct of the land and they are carrying out development activities on the plot of land. So....
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....ossession letter duly signed by them in support of the same apart from the agreement dated 29.09.2011. I also explain earlier that possession from ground work land already been with us w.e.f. first week of Febaruary,2011 on payment of Rs. 40 crores paid by us as per agreement dated 09.09.2012. Q. No. 22 Please explain whether M/s. Aravali Heights Infrastructure Pvt. Ltd., M/s. SRP Builders Ltd., M/s. Yatharath Construction and Sh. Vikaram Singh has taken back passion of above said plot of land situated in Sector-91, Gurgaon after executing GPA in favour of you and after entering into agreement on 09.09.2010? if yes please give the compete particulars?. Ans. No, we never given passion back to M/s. Aravali Heights and Infrastructure Pvt. Ltd. and other mentioned above of plot of land situated at Sector-91 Gurgaon after taking possession from them first time in the first week of Feb. 2011 after making payment of Rs. 40 crores as terms and condition of agreement dated 09.09.2010. Even they also did not ask and challenged the passion given to us in the first week of Feb. 2013. Q. 23 Please explain whether M/s. Aravali Heights Infrastructure Pvt. Ltd., and othe....
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....jects Pvt. Ltd. which is nothing but income of the assessee, because M/s. Aravali Heights Infratech P. Ltd. had entered into an agreement with M/s. Yathartha Constructions vide MOU where M/s. Samyak Projects Ltd. acquire the right to develop the said land along with purchase of share resulting in 100% control in both the companies. As per the MOU amounting to Rs. 55.68 crore would be given to M/s. Yathartha Constructions and part of the same amount was also paid. Later on 9.9.2010 agreement was signed between M/s. Yathartha Construction and the ventures wherein M/s. Yathartha Constructions agreed to relinquish his right over the land property in favour of the venture at the total consideration of Rs. 80,15,40,000/- and even the first installment was paid on September, 2010. Later on 29th September, 2011 an agreement was signed between both the parties, Aravali Heights, SRS Builders Ltd. and M/s. Samyak Projects Ltd. as first and second party M/s. Yathartha Constructions was a confirming party on one side and M/s. Samyak Projects Ltd. on the other side wherein the onus in the confirming party had agreed to transfer the interest in land to M/s. Samyak Projects Ltd. to a total conside....