TaxTMI 
TaxTMI 
2023 (12) TMI 861
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....opened by issuing a notice dated 03-03-2017 u/s. 148 of the Act, recording the reason, from the proceedings before the Income Tax Settlement Commission by M/s. Dev Procon Ltd., which has submitted a Fund flow statement showing Rs. 80 crores as advance received from various customers in its Dev Aurum Scheme, during the Financial Year 2012-13 and the assessee firm has advanced an amount of Rs. 1.64 crores in cash for purchase of a shop in Dev Aurum Scheme. However on perusal of the Return of Income filed by the assessee firm, there is reason to believe that the cash advance to the tune of Rs. 1.64 crores is from undisclosed sources and therefore liable to be added to the total income of the assessee. This amount has escaped from assessment and assessable as unexplained investment and therefore notice u/s. 148 of the Act is issued. 2.1. The assessee vide its objection requested to provide the details of payment of Rs. 1.64 crores in cash to M/s. Dev Procon Ltd. (hereinafter referred as DPL), whether DPL had submitted any fund flow statement in the course of hearing before ITSC, more particularly any statement from DPL that the assessee had advanced an amount of Rs. 1.64 crores in c....
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....llows: 4.1. After considering the Remand Report, the Ld. CIT(A) held that the addition made by the A.O. is purely on the basis of cash flow statement submitted by the M/s. Dev Procon Ltd. before Hon'ble Settlement Commission, which was made after the date of search. Even in the cash flow statement name of the assessee is not disclosed by M/s. Dev Procon Ltd., but an adhoc amount of Rs. 80 crores was disclosed. Thus respectfully following judicial precedent of Hon'ble Delhi High Court in the case of Vineeta Gupta and other decisions, the Ld. CIT(A) deleted the addition made by the Assessing Officer. 5. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal: 1) "The Ld. CIT(A) has erred in law and on facts in deleting the addition made of Rs. 1,64,00,000/- on account of alleged cash payment from undisclosed sources to M/s Dev Procon Ltd. for purchasing a shop." 2) "The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary?" 3) "It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored". 6. Ld. Sr. D.R.....
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....ation of gross receipts in respect of commercial units at Rs. 297 crore, by not offering any adverse comment. The working of quantification of gross receipt of Rs. 207 crore is placed page no 597 of the SOF. It needs to be mentioned that the quantification of gross receipt of Rs. 297 crores takes into consideration the deal value in respects of 43 units, for which notings were found during the course of search, In fact it is on the basis of these 43 units the quantification of Rs. 297 crore is worked out." 9.1. Based on the above Rule 9 Report and Rejoinder, the Income Tax Settlement Commission passed order as follows: "...(b) Dev Procon Limited received an advance on-money receipt of Rs. 80 crores from customers/investors for its Dev Aurum Project. The Department has suggested that the sum of Rs. 80 crores be taxed since the Applicant Company was unable to furnish the sales agreements, vouchers, etc. On the other hand, the AR of the Applicant stated that his on-money receipts was from the customers/investors from whom the corresponding cheque amount was received. He also stated that part of the details of such on-money receipt was itself was found and seized during the....
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....ad made undisclosed investment in aforesaid bunglow Whether as findings recorded by Tribunal were based on appreciation of facts, no interference was called for-Held, Yes [Paras 9 and 10] [In favour of assessee]" 10.2. The Hon'ble High Court of Delhi in the case of CIT Vs. Vineeta Gupta reported in [2014] 46 taxmann.com 439 wherein it was held as follows: "Section 69B, road with section 245D, of the Income-tax Act, 1961 - Undisclosed investments (Settlement Commission) - Assessment years 2003- 04 to 2009-10 - During search, assessee along with her husband admitted that she had acquired 1/3 share in a property valuing 133 crores She had offered Rs. 36.73 crores as her undisclosed investment - Thereafter, she had approached Settlement Commission with disclosure of 7.61 crores and, thus, total disclosure amounted to Rs. 44.34 crores - Accordingly, Settlement Commission passed order - Revenue challenged said order on ground that sellers of said property offered higher amount in respect of said property as undisclosed investment Whether declaration made by sellers in respect of said - transactions could not bind assessee - Held, yes Whether since in Settlement Commission pro....
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.... owner of the amount recovered from someone else, then the burden lies on the Department to prove the ownership of the assessee...." 11. Respectfully following the above judicial precedents, we have no hesitation in upholding the order passed by the Ld. CIT(A) who deleted the addition of Rs. 1.64 crores as unexplained investments in the hands of the assessee. Thus we do not find any merits in the grounds raised by the Revenue and the same is hereby dismissed. 12. In the result, the appeal filed by the Revenue is hereby dismissed. Order pronounced in the open court on 13-10-2023 ============= Document 1 3.3. No. CIT(A), Ahmedabad-5/10773/2017-18 A.Y.2013-14 8.3.1 In response to the said letter, the AO vide letter dated 09.09.2022 provided documents like copy of the Hon'ble ITSC order u/s.254D(4) of the Act dated 29.09.2016, copy of fund flow statement submitted by M/s. Dev Procon Ltd., copy of property documents etc. Copy of the AO's letter and fund flow statement are reproduced for ready reference:- OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-2(1)(1), AHMEDABAD Room No.406, 4 Floor, Aayakar Bhavan (Vejalpur), Nr. Sachin T....
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....17 determined total income of Rs.1,65,13,060/- after making addition of Rs.1,64,00,000/- on account of unexplained investment. On going through the assessment order and after carefully examining the documentary evidences available on records, some momentous points are observed/noticed, which are discussed hereunder for better clarification: TRIVIC 31 Document 2 No. CIT(A), Ahmedabad-5/10773/2017-18 10 A.Y.2013-14 A search was conducted u/s 152 by the deportment on 03.01.2013 in Dev Group during which M/s. Dev Procon Limited, one of the main concern of Dev Group filed application for settlement before Hon'ble ITSC. The ITSC posted order u.245D(4) of the Act in this case on 29.09.2016.-As per Annexure A 199 During the course of hearing before ITSC, M/s. Dev Proton Limited submitted a fund flow statement showing Rs.80 Crores as advance from customers who booked property in its "Dev Aurum" Scheme in FY 2013-14-As per Annexure B Femina Town was one of the customer who had paid an advance of Rs.1,64,00,000/- in cash The assessee Femine Town as per its submission has purchased a shop at Ground Floor in the Dev Aurum Project at Rs.1,7....