TaxTMI 
TaxTMI 
2021 (6) TMI 1184
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.... the assessee before the Hon'ble ITSC which did not succeed? 3. Brief facts of the case are, assessee is a leading lifestyle and infrastructure company engaged in the construction and development of real estate projects. The assessee filed its original return of income for the assessment year 2009-10 on 30.09.2010 declaring total loss of Rs. 1,88,095/-. A search and seizure under section 132(1) of the Income Tax Act, 1961 (in short 'the Act'), was conducted on the assessee group on 21.03.2013. The notice under section 153C of the Act was issued and served on the assessee. Subsequently notices under section 143(2) and 142(1) of the Act were issued and served on the assessee. Meanwhile, the assessee filed an application before the Settlement Commission on 19.02.2015 and requested the Assessing Officer to abate the ongoing assessment proceedings. In the meantime, the Settlement Commission rejected the application filed by the assessee on 4.3.2015 under technical ground. 4. The Assessing Officer observed that the evidences regarding claiming bogus purchases were found during the search. Accordingly, the Assessing Officer issued a show cause notice to the assessee vide notice date....
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....s also required to be made for the purchase of lands from farmers, intermediaries and the like. The owners of the land were to be persuaded to port with their land. They were not interested in the money by way of cheque only. Part of the consideration they wanted in cash. The land aggregators and the person involved, wanted to have their share in the deal without the knowledge of the land owners, who otherwise would not have parted with their land. The process was to be completed at the earliest. The applicant company did not want to enter into any litigation. At the same time, acquisition of the land and for that purpose satisfying the owners and the parties in between was essential. This could have been achieved only by Payment of money that too in cash. The applicant company was advised to enter into the deal in such a fashion so that the accounted funds go out of the hands of the company through banking channels but is utilized thereafter in cash for the other purpose. With this process, the applicant has been able to acquire the desired pieces of land with peaceful possession and clear title In a hassle free manner. 2. Hence, In order to facilitate the smooth running ....
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....otting and subsequently sell the land either as a plot or after construction of residential houses thereon. At the time of purchase of land, the farmers insist on cash payment over and above the agreement value. We cannot fund this cash requirement by withdrawls from the bank. Therefore, these companies had entered into transactions with MIs Karma Industries Ltd. I accept that there were no actual purchases from M/s. Karma Industries Ltd. And we had received back cash after getting the commission deducted by M/s Karma Industries Ltd. The cash generated was used for cash payment to the farmers for land acquisition. Q.21 I am showing you Annexure-A3(loose paper folder) containing page no.1 to 15 found and impounded on 22.03.2013 from Room No. 3, Sej Hiro Chambers, Opp. Dutta Paths House, Thikral, Although, Raigad and statement recorded of Shri Nit in Nagwekar on 21.03.2013 u/s. 133A at Room No.3, Sej Hira Chambers, Opp. Dutta Paths House, Thikrol, Alibaugh, Raigod wherein in response to Q. No.22, he has stated that Rs.6,00,77,175/- cash component has been paid in the purchase of land which is having deed value of Rs.16,94,26,160/- from F.Y.2006-07 to F.Y. 2012-13 wh....
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.... 1893 3,360 3,70,000 9. 1720 26,654 Nil 10. 1749, 1934 68,900 Nil 11. Nagaon & Parhur 2,01,960 Nil 12. 1735 & Pathur 37,100 Nil 13. 1992 1,09,800 Nil 14. 1760 21,975 Nil 15. 1774 11,000 Nil 16. 1755, 1767, 1941 18,575 Nil 17. 1756, 1761, 1763, 1940 12,700 11,96,500 18. 306 32,800 Nil 19. 1932 7,000 Nil 20. 1754, 1680 55,000 42,45,000 Total 7,64,414 89,61,500 Further, I confirm that the amount referred in column 3 of the above table represents the amount of commission received in cheque against my PAN AGQPP5057J. I didn't receive any commission in cash. Column 4 of the above table represents the cash consideration paid for land dealings by M/s. Samira Habitats India Limited to the respective farmer l farmers in cash." "Q5. Please state the amount of commission you have got for facilitating M/s. Samira Habitats India Limited in the land dealings at Magoon. Please also state that there is any amount of cash paid by M/s Sam ira Habitats India Limited to land owners/ farmers during the purchase of....
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....4860 Nil 11. 1998, 1671 76735 652000 12. 1889, 1903, 1928, 1919 93103 Nil 13. 1996, 2000, 2002, 2006 252816 Nil 14. 2043, 2046 70435 575000 Total 9,68,941 50,30,000 Further, I confirm that the amount re/erred in column 3 of the above table represents the amount of commission received in cheque against my PAN ADHPH3807Q I didn't receive any commission in cash. Column 4 of the above table represents the cash consideration paid for land dealings by MIS Somiro Habitats India Limited to the respective farmed farmers in cash." Statement of Shri Manohar Janardan Thakur:- "Q5. Please state the amount of commission you have got for facilitating M/s Samira Habitats India Limited in the land dealings at Nogaon. Please also state that there is any amount of cash paid by M/s. Samira Habitats India Limited to land owner's farmers during the purchase of land. If so, also state the quantum of payment mode by M/s Samira Habitats India Limited to the concerned land owner's/brokers. Ans: Sir, I confirm that I have facilitated MIS Samira Habitats India Limited in the land dealings at Nag....
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.... under:- Sr. no. Gut no. Commission Received in cash from company as well as owner / farmer Approx. Value of considera- tion paid in cash (Amount in Rs.) Amount paid to farmers / owners Financial Year 1. 20 11,04,000 35,05,000 29,53,000 2008-09 2. 22 3,40,000 10,80,000 9,10,000 2008-09 3. 24 4,22,000 13,40,000 11,29,000 2008-09 4. 36 18,50,000 58,73,000 49,48,000 2008-09 5. 28/1 6,90,000 21,91,000 18,46,000 2008-09 6. 28/2 90,000 2,86,000 2,41,000 2008-09 7. 18 2,50,000 7,95,000 6,70,000 2008-09 8. 34 3,10,000 9,85,000 8,30,000 2008-09 9. 16 6,22,000 19,75,000 16,64,000 2008-09 10. 26 3,00,000 9,55,000 8,05,000 2008-09 11. 27 4,22,000 13,40,000 11,29,000 2008-09 12. 13 422000 13,40,000 11,29,000 2008-09 13. 14 400000 12,70,000 10,70,000 2008-09 14. 21 220000 7,00,000 5,90,000 2008-09 7442000 2,36,35,000 1,61,93,000 Further....
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....o account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an opportunity of being heard, make the assessment] of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment" 6. Further, we would 0150 like to rely on the decision of the Hon'ble Supreme Court in the following cases- In the case of State of Orissa v. Maharaja Shri B.P. Singh Deo [1970] 76 ITR 690 (SC) the Hon'ble Supreme Court held that the mere fact that the material placed by the assessee before the AO is unreliable does not empower the officer to make an arbitrary order. The power to make a best judgment assessment is not on arbitrary power. In the case of State of Kerala v. C. Velukutty [1966] 60 ITR 239 (SC) the Hon'ble Supreme Court held that, though there is an element of guesswork in a best judgment assessment, it should not be a wild one, but should have a reasonable nexus to the available material and the circumstances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assess....
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....n this regard: Principal CITy. Ashwin Kantilal Raval (2015) 231 Taxman 615 (Guj.)(HC): During assessment proceedings, Assessing Officer mode addition to assessee's income by rejecting certificate issued by Structural Engineer certifying value of work-in-progress of a particular project Tribunal finding that said project was completed subsequently and profit earned in respect of same had already been assessed, deleted addition made by Assessing Officer. On facts, the HC held that the impugned order passed by Tribunal did not require any interference. (AY. 2009-10) CIT v/s Excel Industries Ltd. (SC(2013) 86 CCH 0086 ISCC: In this case, the Hon'ble SC of India held that Thirdly, the real question was the year in which the assessee was required to pay tax. There was no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it was not as if the Revenue has been deprived of any tax. The rate of tax remained the same In the present AY as well as in the subsequent AY. Therefore, the dispute raised by the Revenue was ....
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....fficer to delete 50% of the amount of bogus purchases as applied for the purpose of business and he further observed that the assessee also offered the same before Settlement Commission. 8. Aggrieved with the above order, the Revenue is in appeal before us. 9. Before us, the learned DR submitted by relying on the findings of Assessing Officer at Page-5 and 11 of the assessment order that the purchases declared by the assessee in its books of account are bogus beyond doubt. He submitted that assessee had categorically confirmed the findings and admitted fact of the search proceedings that it is engaged in accounting bogus purchases in its books of account by taking accommodation entries from various parties as per the confidential annexure to its application further he submitted that the assessee had not produced any evidence during assessment proceedings despite specific opportunities were provided to the assessee and he submitted that notice under section 133(6) of the Act issued by the Assessing Officer were remained un-served despite assessee was appraised of this fact. The Inspector has also mentioned in his report that the parties could not be traced. Therefore, he vehem....