TaxTMI 
TaxTMI 
2023 (3) TMI 600
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.... had admitted to have received unaccounted receipts from and made unaccounted cash expenditure on behalf of the Jai Corp Group, for purchase of land in lieu of commission/brokerage." (2) "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition made u/s.69C aggregating to Rs.17,67,72,393/- (5,40,00,000+ 12,23,72,393) even though agricultural land transactions actually took place in the hands of the assessee company (through nominated farmers), after making the said unaccounted/unexplained payment." (3) "On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition made u/s.69C aggregating to Rs. 17,67,72,393/- (5,40,00,000+ 12,23,72,393) even though it has been held in the impugned order that the transactions of the assessee company with Shri Madan Kolambekar were not on 'principal to principal' basis." (4) "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition made u/s.69C aggregating to Rs. 17,67,72,393/- (5,40,00,000+ 12,23,72,393) even though vide the impugned order, the action of the AO to ....
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....real estate operations were handled mainly by Mr.Virendra Jain, Mr.Gaurav Jain and Mr. Dilip Dherai. Mr. Virendra Jain and Mr.Gaurav Jain handled the acquisition of land for Jai Corp Ltd. and its various subsidiaries. As explained by Mr.Virendra Jain and Mr.Gaurav Jain in their statements, entire land acquisition process was supervised by them. These land dealings were done some times directly with the farmers but mainly through various land aggregators/brokers. 5. Mr. Madan Kolambekar was one of their land aggregators and had one of his offices at B-3. Vashi, Navi Mumbai. The group had purchased substantial agricultural land and 12.5% CIDCO plots through him Mr.LM Dhanda and Mr.Jeevan Anant Surve, the employees of "Jai Corp Group directly supervised the transactions through Mr. Madan Kolambekar. Further, Mr.Hiren Oza, another employee of group supervised the transactions of land done by the group through Mr.Madan Kolambekar. In their sworn statement, Mr Hiren Oza, Mr. Jeevan Anant Surve and Mr.L.M.Dhanda had accepted that they were visiting Mr.Madan Kolambekar's office three to four times a week. Mr. Mahendra Bhantia was also one of the land aggregators, through whom the gr....
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....ssue at hand in para 13 onwards of the Assessment Order. In para 13.1, the Assessing Officer has discussed the concept of 12.5% CIDCO plots of the land and related transactions. In para 13.2, the Assessing Officer has discussed the concept of land aggregators involved in the land transaction. In para 13.1.9 the Assessing Officer has discussed about land transactions of various group companies of Jai Corp group with Mr. Madan Kolambekar, which was as under: - (i). Iconic Realtors Ltd. - 12.5% CIDCO plots at Dronagiri Node (ii). Ekdant Reality & Developers Ltd.-12.5% CIDCO plots at Taloja Node (iii). Rudradev Developers Ltd. - 12.5% CIDCO plots at Wadhghar Node. (iv). Krupa Realtors Ltd. - 12.5 CIDCO plots at Ulwe Node, (v). Jailaxmi Realty Developers Ltd. - Agricultural land. 9. The Assessing Officer has also noted similar transactions of the group companies with Mr.Mahendra Banthia and Mr.Ganesh Mokashe, the land aggregators: The Assessing Officer has referred to the statements of Mr. Gaurav Jain and Mr. Hiren Oza who had explained the business relations of the group companies with the land aggregators. The statement of Mr.Gaurav Jain....
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....ncome by Mr. Madan Kolambekar also established that the transaction with Mr.Madan Kolambekar was not on principal to principal basis. 13. The Assessing Officer further observed that Mr.Hiren Oza was not only actively involved in controlling and monitoring of land transaction Mr.Madan Kolambekar, but also regularly reporting it to the top management of the group. The Assessing Officer has further rejected the claim of the assessee that the amount paid to Mr. Madan Kolambekar in respect of land transaction was in the nature of incentive. The Assessing Officer has further referred to Page No:52 of Annexure A-1 seized from the premises of Welldone Real Estate Pvt. Ltd. This page mentioned about the meeting convened to decide and finalise agricultural land acquisition process in the case of Jailaxmi Realty & Developers Ltd. The entire terms and procedure regarding advancing of funds to Mr.Madan Kokambekar and its utilisation was decided by the team of Jai Corp Group in the absence of Mr. Madan Kolambekar. Thus, the Assessing Officer concluded that Mr. Madan Kolambekar was not an independent land aggregator and the transactions of Jain Corp with him were not on principal to principal ....
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.... source side shown as 'development charges' was nothing but cash payment. This fact was admitted by Mr.Hiren Oza in his statement recorded during the search proceedings. 20. Further, deployment side of page No.65 showed payment of Rs..3,75,50,000/- to Mr. Suresh Raut & Mitra Mandal and Rs..3,24,62,835/- as payment to Mitra Mandal & Others. From the books of accounts of Mr.Madan Kolambekar, the Assessing Officer found that payment of Rs..3,24,62,835/- made to Mitra Mandal were reflected in the books of account, but the payment of Rs..3,75,00,000/- made to Mr.Suresh Raut and Mitra Mandal was not appearing in the books of account of Mr. Madan Kolambekar and also in the books of Jai Corp Group entities. Thus, the payment of Rs..3.75,00,000/- shown as deployment charges was cash payment made to Mr Madan Kolambekar by Jai Corp Group. 21. Thus, on the basis of material seized from the office of Mr. Madan Kolambekar, from the possession of Mr. Hiren Oza and from office of M/s.Welldone Real Estate Pvt. Ltd., the Assessing Officer concluded that the total amount of Rs..30,67,72,393/- (13,00,00,000+ 12,23,72,393 + 5,40,00,000) was transferred from Jai Corp Group to Mr.Madan Kola....
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....the decision of the ITAT in the case of M/s. Krupa Land Ltd., and decision of the Hon'ble Jurisdictional High Court in the case of M/s. Lavanya Land Pvt. Ltd., & other entities of the group concern, deleted the additions made by the Assessing Officer. 26. Aggrieved revenue is in appeal before us. It is observed that this appeal was filed on 27.05.2022 after corona pandemic period. After considering the Hon'ble Supreme Court decision on extension of limitation period, the delayed period of filing the appeal is condoned. 27. At the time of hearing, Ld. DR brought to our notice Page No. 84 of the Assessment Order and submitted that during search incriminating material were found which are listed by the Assessing Officer in the case of M/s. Welldone Realty Pvt. Ltd., and discussed in detail in Para No. 13.14.1 of the Assessment Order and submitted that assessee is one of the group concerns who are involved in purchasing of the land and transferred huge funds from assessee to M/s. Deva Realtors which are appearing under the head "loans and advances" in the books of the assessee and he submitted that an amount of Rs..12,23,72,393/- which is the amount Assessing Officer made....
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....supra) and decision of the Hon'ble Jurisdictional High Court in the case of CIT v. M/s. Lavanya Land Pvt. Ltd., (supra). Since the facts in the present appeal are exactly similar to the above facts on which the Hon'ble Jurisdictional High Court has deleted the addition, relevant ratio of the decision are reproduced below: - "20. The Tribunal noted the grounds of Appeal. It also noted the facts pertaining to the search and seizure action under Section 132 and the statement of Dilip Dherai. The Tribunal noted the fact that the entire land acquisition was looked after by Central Leadership Team of which Mr. Dilip Dherai, Mr. Anand Jain, Mr. Sanjay Punkhia and Mr. Ajit Warthy are key members. The Tribunal also referred to the seized documents. The Tribunal then referred to the order passed by the Commissioner of Income Tax (Appeals). Then the Tribunal noted the arguments of both sides. These arguments were noted in great details. Then, the Tribunal, in paragraph 18 and 19, held as under: "18. Thus it is clear that before issuing notice u/s. 153C, the primary condition has to be fulfilled and which is that the money, bullion, documents etc., seized should belon....
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.... the light of the impugned seized documents, we have no hesitation to hold that action taken u/s. 153C of the Act is bad in law." 21. Thereafter, in paragraph 20, the Tribunal considered the merits and once again, at great length. The particular argument revolving around the statement of Dilip Dherai and his answer to question No. 24 was also considered in paragraph 21 of the impugned order. Then, in paragraph 22, the Tribunal refers to the additions made under Section 69C. After reproducing Section 69C and adverting to the fact that Dilip Dherai has retracted his statement, the Tribunal arrived at the conclusion that merely on the strength of the alleged admission in the statement of Dilip Dherai, the additions could not have been made. The concurrent findings of fact would demonstrate that the essential ingredients of Section 69C of the IT Act enabling the additions were not satisfied. This is not a case of 'no explanation'. Rather, the Tribunal concluded that the allegations made by the authorities are not supported by actual cash passing hands. The entire decision is based on the seized documents and no material has been referred which would conclusively show t....
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....s its case any further. We are of the opinion that the Revenue has rightly been faulted for its approach by the Tribunal. The above are pure findings of fact and consistent with the material placed on record. Thus, the jurisdiction and vesting in the Assessing Officer could have been exercised and the satisfaction in that regard was enough, are not matters which can be decided in the further appellate jurisdiction of this Court. It is not possible for us to reappraise and reappreciate the factual findings. The finding that Section 153C was not attracted and its invocation was bad in law is not based just on an interpretation of Section 153C but after holding that the ingredients of the same were not satisfied in the present case. That is an exercise carried out by the Tribunal as a last fact finding authority. Therefore, the finding is a mixed one. There is no substantial question of law arising from such an order and which alternatively considers the merits of the case as well. 23. As a result of the above conclusion, we cannot agree with the learned Additional Solicitor General that we can pass a different order and entertain these Appeals for the current year of the sea....
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....cuments seized from the premises of Shri Dilip Dherai and M/s. Jai Corp group. The Ld. DR strongly contended that the retraction of Shri Dilip Dherai is only self serving and has to be rejected as an afterthought. For this preposition the Ld DR relied upon several judgements. It is the say of the Ld. DR that the statement of Shri Dilip Dherai was recorded u/s. 132(4) of the Act on 5.3.2009 whereas Shri Dilip Dherai has filed an affidavit on 14.5.2009 retracting from his admission on 5.3.2009. The Ld. DR pointed out that after 5.3.2009 Shri Dilip Dherai appeared before the DDIT on 6.4.2009, 8.4.2009, 20.4.2009, 22.4.2009 & 8.5.2009 and none of these appearances Shri Dilip Dherai never stated that his statement on oath recorded on 5.3.2009 was done under threat, force, coercion. Therefore, the affidavit filed by Shri Dilip Dherai is only an afterthought. In his written submission, the Ld. DR has pointed out that Shri Dilip Dherai in order to escape the consequences of law, has filed the affidavit as an afterthought which deserves to be ignored especially when the affidavit has been controverted and repelled by the Authorised Officer Shri Manoj Kumar. Thereafter in his written submiss....
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..... 38.45 Cr in cash. I was provided with these cash as and when required by Shri Sanjay Punkhia‖ 22. However, subsequently Shri Dilip Dherai has retracted from his statement which has been strongly objected by the Ld. DR in his submission. The entire dispute revolves around the alleged cash payment amounting to Rs. 43 crores approx. and which has been added u/s. 69C of the Act. Sec. 69C of the Act reads as under: "Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the AO, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. 23. A perusal of the aforementioned section shows that the requirement of the section is that an expenditure has been found to have been incurred by an assessee in any financial year. Consequently, the assessee fails to indicate satisfactorily the source of such expenditure or any part thereof. Then section 69C is attracted in such circumstances. The emphas....
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....ew of the aforesaid decision, in the present case, none of the sellers have been examined by the AO to strengthen his views that cash has been paid over and above the registered amount. There is not even a single document/evidence of parties involved in the sale of land at different villages brought on record to show that an amount other than the payment of consideration has exchanged hands. No confession from the sellers have been brought on record. The entire additions have been made merely on the strength of loose papers found during the course of the search not supported by any independent authority. Considering the entire addition, in the light of the provisions of Sec. 69C, as per A.O's own interpretation, investments in purchase of land have been fully financed by some other persons, therefore, the addition in the hands of the assessee cannot be justified as the assessee has not incurred any expenditure. There may be one more possibility that the persons who were doing land purchase might have inflated the sale price in these loose sheets just to extract monies from their higher authorities in the guise of On-Money to be paid to the vendors. May be because of his possibility....