WINDOSR REALTY P.LTD, MUMBAI v. ACIT 13(3)(1), MUMBAI

CO 255/MUM/2018 | 2013-2014
Pronouncement Date: 27-11-2019 | Result: Allowed

Appeal Details

RSA Number 25519923 RSA 2018
Assessee PAN AAACE1883E
Bench Mumbai
Appeal Number CO 255/MUM/2018
Duration Of Justice 1 year(s) 3 month(s) 7 day(s)
Appellant WINDOSR REALTY P.LTD, MUMBAI
Respondent ACIT 13(3)(1), MUMBAI
Appeal Type Cross Objection
Pronouncement Date 27-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 27-11-2019
Assessment Year 2013-2014
Appeal Filed On 20-08-2018
Judgment Text
P A G E | 1 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI BEFORE SHRI S. RIFAUR RAHMAN ACCOUNTANT MEMBER AND SHRI RAVISH SOOD JUDICIAL MEMBER ITA NO. 1504 /MUM/201 7 C.O. NO. 255/MUM/2018 (ARISING OUT OF ITA NO.1504/MUM/2017) (ASSESSMENT YEAR: 2013 - 14 ) A.C.I.T - 13(3)(1) ROOM NO. 229 2 ND FLOOR AAYAKAR BHAVAN M.K.ROAD MUMBAI - 20 VS. M/S WINDSOR REALTY PVT. LTD. PODIUM WINDSOR OFF CST ROAD NEAR BKC SANTACRUZ (EAST) MUMBAI 400 098 PAN AAACE1883E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V. VINOD KUMAR D.R RESPONDENT BY: S /S HRI MAYUR KISNADWALA & SUNIL RAMANI A.R S DATE OF HEARING: 20.11 .2019 DAT E OF PRONOUNCEMENT: 2 7 .11 .2019 O R D E R PER RAVISH SOOD JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 21 MUMBAI DATED 27.12.2016 WHICH IN TURN ARIS ES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143(3) OF THE INCOME TAX ACT 1961 (FOR SHORT ACT) DATED 23.03.2016 FOR A.Y. 2013 - 14. THE REVENUE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL : 1. WHETHER ON THE FACTS AND THE CIRCUMSTA NCES OF THE CASE AND IN LAW THE ID. CIT (A) ERRED IN DELETING THE ADDITION OF RS. 9 50 00.000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENTS U/S 69 OF THE IT ACT 1961. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS FAILED TO TREAT ALL THE 9 ENTRIES FOUND ON LOOSE PAPER AT PAR. THE NATURAL PRESUMPTION SHOULD HAVE BEEN THAT IF 7 CHEQUE ENTRIES ON THE LOOSE PAPER ARE ACCEPTED BY THE ASSESSEE THE 2 CASH ENTRIES ON THE SAME LOOSE PAPER SHOULD BE ACCEPTED AS ASSESSEE'S T RANSACTION IN CASH. THE ENTIRE RECORD OF THE LOOSE PAPER COULD BE ACCEPTED OR REJECTED ONLY IN FULL AND NOT IN PARTS IN THE ABSENCE OF ANY CLINCHING EVIDENCE TO THE CONTRARY. THIS ASPECT HAS NOT BEEN APPRECIATED BY THE LD. CIT (A). P A G E | 2 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. 3. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRONEOUSLY ARRIVED AT THE CONCLUSION THAT THERE WERE NO CASH FOUND DURING THE SURVEY IGNORING THE FACT THAT THE ADDITION ON ACCOUNT OF BOGUS PURCHASES WAS CONFIRMED BY TH E LD. CIT (A) WHICH CLEARLY POINTS TO THE CASH GENERATION IN THE BUSINESS. ALSO DOCUMENTS FOUND AND STATEMENTS TAKEN DURING SURVEY REVEALED UNACCOUNTED SCARP SALES IN EARLIER YEARS WHICH CLEARLY INDICATE CASH GENERATION BY THE ASSESSEE. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR ALTER ALL OR ANY OF THE GROUNDS OF APPEAL WHICH MAY BE NECESSARY. ALSO THE ASSESSEE AS A CROSS - OBJECTOR HAS OBJECTED TO THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS: BEING AGGRIEVED BY THE ORDER OF T HE LEARNED ASSESSING OFFICER (AO ) U/S 143(3) OF THE INCOME TAX ACT 1961 (THE 'ACT') AS CONFIRMED BY LEARNED COMMISSIONER OF INCOME T AX (APPEALS) - 21 [CIT (A)]. PREFERS AN APPEAL AGAINST THE SAME ON FOLLOWING GROUNDS. W HI CH IT IS PRAYED MAY BE CONSIDERED WITHOUT PREJUDICE TO ONE ANOTHER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION 12.5% MADE BY THE LEARNED AO OF RS.1 11 84 319 ON ALLEGED UNSUBSTANTIATED PURCHASES DISREGARDING THE FACT THAT SUMMONS UNDER SECTION 133(6)/131 OF THE INCOME TAX ACT 1961 WERE DULY SERVED ON THE ALLEGED BOGUS PARTIES. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND DELETE OR MODIFY ANY OF THE ABOVE - REFERRED GROUNDS OF APPEAL. 2. BRIEFLY STATED THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT & LEASING OF PROPERTIES HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2013 - 14 ON 30.09.2014 DECLARING ITS TOTAL INCOME AT RS.74 69 54 160/ - . RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESS ED AS SUCH UNDER SEC. 143( 1 ) OF THE ACT. SUBSEQUENTLY THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT AS ON 09.05.2014 S URVEY PROCEEDINGS WERE CONDUCTED ON THE ASSESSEE COMPANY UNDER SEC.133A OF THE ACT. IT WAS NOTICED BY THE A.O THAT D URING THE COURSE OF THE SURVEY ACTION CERTAIN INCRIMINATING DOCUMENTS/LOOSE PAPERS WERE FOUND AND IMPOUNDED. ON A PERUSAL OF THE CONTENTS OF A LOOSE DOCUMENT THAT WAS IMPOUNDED DURING THE COURSE OF THE SURVEY ACT ION VIZ. ANNEXURE A - 2 - PAGE - 27 IT WAS OBSERVED BY THE A.O THAT THE SAME APPARENTLY REFERRED TO CERTAIN PAYMENTS/INVESTMENTS MADE BY THE ASSESSEE . OUT OF THE TOTAL 09 ENTRIES MENTIONED IN THE AFORESAID IMPOUNDED DOCUMENT 07 ENTRIES WERE WITH RESPECT TO CERTAIN PAYMENTS WHICH REFERRED TO THE NAMES OF THE PERSONS AND/OR A CONCERN TO WHOM THE SAME WERE MADE. IN THE P A G E | 3 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS GATHERE D BY THE A.O THAT THE 07 ENTRIES WERE ADMITTEDLY THE PAYMENTS WHICH WERE MADE BY THE AS SESSEE VIDE ACCOUNT PAYEE CHEQUES TO CERTAIN PERSONS VIZ. S/ S H. AVINASH BHOSALE & AMIT BHOSALE TOWARDS CONSULTATION FEES AND ADVANCE FOR PURCHASE OF LAND . ACCORDINGLY THE PAYMENTS STATED AGAINST THE AFORESAID 07 ENTRIES BEING IN THE NATURE OF DISCLOSE D TRANSACTIONS ARE NOT IN DISPUTE BEFORE US. IN FACT THE CONTROVERSY HINGES AROUND THE REMAINING 02 ENTRIES WHICH THOUGH FORMED PART OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 BUT WERE THEREIN SEPARATELY MENTIONED. AGAINST THE SAID 02 ENTRIES THOUGH THERE WAS NO MENTION OF THE PERSONS TO WHOM THE PAYMENTS WERE MADE HOWEVER ALIKE THE AFORESAID 07 ENTRIES THERE WAS A SPECIFIC MENTION OF AMOUNTS OF RS.7 50 00 000/ - AND RS.2 00 00 000/ - UNDE R THE COMMON HEAD I.E AMOUNT PAID AND ALSO A REFERENCE TO THE RESPECTIVE DATES OF PAYMENTS I.E 28/02/2013 AND 25/06/2012 UNDER THE COMMON HEAD I.E DATE OF PAYMENT . APART THEREFROM AS IN THE CA SE OF THE AFORESAID 07 ENTRIES THERE WERE CALCULATIO NS OF INTEREST ON THE SAID AMOUNTS AT VARYING RATES THOUGH FOR A FIXED PERIOD OF DAYS THEREIN MENTIONED . 4. ON A PERUSAL OF THE CONTENTS OF THE IMPOUNDED DOCUMENT THE A.O HELD A CONVICTION THAT THE AFORESAID 02 ENTRIES OF RS.7 50 00 000 / - AND RS.2 00 00 000/ - WERE IN THE NATURE OF CERTAIN UNACCOUNTED PAYMENTS MADE/AMOUNTS INVESTED BY THE ASSESSEE. AS IS DISCERNIBLE FROM THE ORDER OF THE LOWER AUTHORITIES THE DIRECTORS OF THE ASSESSEE COMPANY VIZ. SH. AKSHAY R. RAHEAJ AND SH. GOPAL NARAN G HAD IN THEIR RESPECTIVE STATEMENTS RECORDED UNDER SEC. 131 OF THE ACT BOTH IN THE COURSE OF THE SU R VEY PROCEEDINGS AND ALSO THE POST - SURVEY PROCEEDINGS ON BEING CONFRONTED WITH THE AFORESAID 02 ENTRIES AGGREGATING TO RS. 9 50 00 000/ - VIZ. (I). RS.7 50 00 000/ - DATED 25.06.2012 ; AND ( II). RS.2 00 00 000/ - DATED 28.02.2013 APPEARING IN ANNEXURE A - 2 AND PAGE 27 HAD STATED THAT THE S AME WERE THE AMOUNTS WHICH WERE TO BE PAID TO S/ S HRI AVINASH BHOSALE & AMIT BHOSALE AS ADVANCE FOR PURCHASE OF LAND BY THE ASSESSEE COMPANY AT VILLAGE: MUNDWA PUNE WHICH IT PROPOSED TO ACQUIRE FOR SETTING UP A RESIDENTIAL - CUM - COMMERCIAL PROJECT BUT THE SAID PAYMENTS HAD NOT BEEN MADE TILL DATE. HOWEVER THE A.O HELD A CONVICTION T HAT IN THE ABSENCE OF ANY EXPLANATION OR JUSTIFICATION BY THE ASSESSEE IT WAS TO BE INFERRED THAT THE AFORESAID AMOUNTS MENTIONED AGAINST THE 02 ENTRIES IN ANNEXURE A - 2 PAGE 27 WERE THE UNEXPLAINED INVESTMENTS MADE BY THE ASSESSEE. ACCORDINGLY ON THE BASIS OF HIS AFORESAID CONVICTION THE A.O MADE AN ADDITION RS.9 50 00 000/ - UNDER SEC.69 OF THE ACT. P A G E | 4 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. 5. ALSO IN THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE COMPANY HAD PURCHASED VARIOUS ITEMS OF FURNITURE AND FIXTURES AND OTHER DECORATIVE ITEMS AGGREGATING TO RS.8 94 74 548/ - FROM TWO CONCERNS VIZ. (I) M/S PRIYA EXIM P VT . LTD.: RS.7 32 02 649/ - AND (II) M/S KOTSONS IMPEX PVT. LTD. : RS.1 62 71 899/ - . AS OBSERVED BY THE A.O THE AFORESAID ITEMS PURCHASED BY THE ASSESSEE FORMED PART OF THE WORK - IN - PROGRESS OF ITS PROJECT WINDSOR GRA N DE. INFORMATION WAS RECEIVED BY THE A.O FROM THE S ALES TAX DEPARTMENT MAHARASHTRA AS PER WHICH THE AFORESAID SUPPLIER PARTIES FROM WHOM THE ASSESSEE HAD CLAIMED TO HAVE MADE THE PU RCHASES APPEARED IN THE LIST OF THE TAINTED DEALERS WHO WERE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES/BILLS WITHOUT ACTUAL SUPPL YING OF THE MATERIAL IN PHYSICAL FORM. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE IN ORDER TO S UBSTANTIATE THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS PLACED ON RECORD SUPPORTING DOCUMENTS/DETAILS VIZ. BILLS INVOICES TRAIL OF EMAILS COPIES OF ORDERS BANK STATEMENTS AND THE PHOTOS OF ALL THE ITEMS LYING /FIXED AT THE SITE OF ITS PROJEC T VIZ. WINDSOR GRA N DE. IN ORDER TO VERIFY THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS THE A.O ISSUED NOTICE S UNDER SEC. 133(6) TO THE AFOREMENTIONED PARTIES. ONE OF THE PARTY NAMELY M/S PRIYA EXIM PVT. LTD. COMPLIED WITH THE SAID NOTICE AND SU BMITTED ITS REPLY. HOWEVER THE SUMMON WHICH WAS THEREAFTER ISSUED BY THE A.O UNDER SEC.131 OF THE A.O TO M/S PRIYA EXIM PVT. LTD. WAS NOT COMPLIED WITH BY THE LATTER. ON THE OTHER HAND THE OTHER PARTY NAMELY M/S KOTSONS IMPEX PVT. L TD. DID NOT SUBMIT AN Y RE PLY. IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE IN THE COURSE OF THE SURVEY PROCEEDINGS HAD SUBMITTED THAT THEY HAD PURCHASE D THE AFORESAID ITEMS FROM M/S SOURCES LIMITED. IT WAS THE CLAIM OF THE ASSESSEE THAT THE AFORESAID CONCERN HAD PROVIDED THE BILLS OF M/S PRIYA EXIM PVT. LTD. AND M/S KOTSON IMPEX PVT. LTD. IN ORDER TO VERIFY THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS THE A.O DEPUTED HIS INSPECTOR TO PHYSICALLY VERIFY AS TO WHETHER THE ASSESSEE WAS IN POSSESSION OF THE VARIOUS ITEMS AT ITS PROJECT SITE OR NOT . AS PER THE REPORT DATED 04.03.2016 IT WAS SUBMITTED BY THE INSPECTOR THAT HE HAD PHYSICALLY SEEN AND VERIFIED ALL OF THE ITEMS AS PER THE LIST AND THE PHOTO ALBUM THAT WAS SUBMITTED BY THE ASSESSEE. ON THE BASIS OF THE A FORESAID FACTS THE A.O WAS OF THE VIEW THAT THE ASSESSEE HAD ACTUALLY PURCHASED THE AFORESAID GOODS WHICH WERE PUT TO USE IN ITS SAMPLE FLATS. HOWEVER THE A.O HELD A CONVICTION THAT THE ASSESSEE WOULD HAVE PROCURED THE AFORESAID ITEMS NOT FROM THE ABOVEM ENTIONED DEALERS BUT FROM THE OPEN/GREY MARKET . ACCORDINGLY THE A.O BACKED BY HIS AFORESAID CONVICTION DISALLOWED 12.5% OF THE AGGREGATE VALUE OF THE PURCHASES P A G E | 5 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. WHICH WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES AND CARRIE D OUT A DISALLOWANCE OF RS.1 11 84 319/ - (I.E. 12.5% OF THE IMPUGNED PURCHASES OF RS.8 94 74 548/ - ). 6. AGGRIEVED THE ASSESSEE ASSAILED THE ASSESSMENT FRAMED BY THE A.O BEFORE THE CIT(A). OBSERVING THAT THE PAYMENTS MENTIONED IN ANNEXURE A - 2 PAGE 27 V IZ. (I) RS.7 50 00 000/ - DATED 25.06.2012; AND (II) RS.2 00 00 000/ - DATED 28.02.2013 WERE IN THE NATURE OF PROPOSED PAYMENTS WHICH WERE TO BE MADE ON A FUTURE DATE THE CIT(A) DELETED THE ADDITION MADE BY THE A.O. ALSO WHILE CONCLUDING AS HEREINABOVE IT WAS NOTICED BY THE CIT(A) THAT THE CLAIM OF THE ASSESSEE THAT IT HAD NOT MADE ANY PAYMENTS TO S/ S H. AVINASH BHOSALE & AMIT BHOSALE WAS DULY ENDORSED BY THE SAID PERSONS. APART THEREFROM IT WAS OBSERVED BY HIM THAT EVEN OTHERWISE THERE WAS NO MENTION OF ANY NAME OR THE INITIALS ETC. OF THE PERSONS TO WHOM THE AFORESAID AMOUNTS AGGREGATING TO RS. 9 50 00 000/ - WERE ALLEGED BY THE DEP ARTMENT TO HAVE BEEN PAID BY THE ASSESSEE . IN SUM AND SUBSTANCE TAKING COGNIZANCE OF THE FACT THAT THERE WAS NOT EVEN A SHRED OF ANY CORROBORATIVE EVIDENCE TO SUPPORT THE PRESUMPTION THAT THE ASSESSEE HAD MADE THE AFORESAID PAYMENTS THE CIT(A) FOUND FAVO UR WITH THE CLAIM OF THE ASSESSEE AND DELETED THE AFORE SAID ADDITION. HOWEVER THE CIT(A) WAS NOT INCLINED TO DISLODGE THE DISALLOWANCE OF 12.5% OF THE AGGREGATE VALUE OF THE IMPUGNED PURCHASES AGGREGATING TO RS.8 94 74 548/ - WHICH WERE CLAIMED BY THE ASSE SSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED TWO PARTIES VIZ. (I) M/S PRIYA EXIM PVT. LTD.: RS.7 32 02 649/ - ; AND (II) M/S KOTSONS IMPEX PVT. LTD: RS.1 62 71 899/ - . ACCORDINGLY THE CIT(A) UPHELD THE CONSEQUENTIAL DISALLOWANCE OF RS 1 11 84 319/ - MADE BY THE A.O . 7. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. APART THEREFROM THE ASSESSEE IS ALSO BEFORE US AS A CROSS - OBJECTOR. HOWEVER THE CROSS - OBJECTION FILED BY THE ASSESSEE INVOLVES A DELAY OF 36 DAYS. THE ASSESSEE EXPLAINING THE REASONS LEADING TO THE DELAY IN FILING OF THE CROSS - OBJECTION H AS FILED AN AFFIDAVIT DATED 19.11.2018. IT IS THE CLAIM OF THE ASSESSEE THAT THE DELAY OF 36 DAYS IN FILING OF THE CROSS - OBJECTION WAS DUE TO THE PROLONG E D DIFFERENCES AND DISPUTE S BETWEEN THE PROMOTERS OF THE ASSESSEE COMPANY. I T WAS SUBMITTED BY THE LD. A.R THAT AS THE DELAY IN FILING THE CROSS - OBJECTION HAD OCCASIONED DUE TO COMPELLING AND UNAVOIDABLE CIRCUMSTANCES THEREFORE IN ALL FAIRNESS THE SAME MAY BE CONDONED. PER CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT P A G E | 6 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. D.R) DID NOT OBJECT TO THE SEEKING OF CONDONATION OF THE DELAY IN FILING OF THE CROSS - OBJECTION BY THE ASSESSEE. WE HAVE GIVEN A THOUGHTFUL C ONSIDERATION AND FIND SUBSTANTIAL FORCE IN THE CLAIM OF THE ASSESSEE COMPANY THAT DUE TO THE DIFFERENCES AND DISPUTE S BETWEEN ITS PROMOTERS VIZ. S/SH. GOPAL NARANG AND AKSHAY RAHEJA THE DELAY IN FILING OF THE CROSS - OBJECTIONS HAD ARISEN. IN FACT THE AFO RESAID FACTUAL POSITION AS HAD BEEN CANVASSED BEFORE US IS SUPPORTED BY AFFIDAVIT OF THE ASSESSEE COMPANY . IN OUR CONSIDERED VIEW THERE IS SUBSTANCE IN THE CLAIM OF THE LD. A.R THAT THE DELAY INVOLVED IN FILING OF THE CROSS OBJECTION WAS NOT INTENTIONAL BUT WAS BACKED BY THE AFORESAID COMPELLING CIRCUMSTANCES. ACCORDINGLY IN THE TOTALITY OF THE FACTS OF THE CASE BEFORE US WE ARE OF THE CONSIDERED VIEW THAT IN ALL FAIRNESS THE AFORESAID DELAY OF 36 DAYS INVOLVED IN FILING OF THE CROSS - OBJECTION MERITS T O BE CONDONED. 8. WE SHALL NOW FIRST ADVERT TO THE APPEAL OF THE REVENUE. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) HAS ASSAILED THE DELETION OF THE ADDITION OF RS.9 50 00 000/ - THAT WAS MADE BY THE A.O UNDER SEC. 69 OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENTS MADE BY THE ASSESSEE . IT WAS AVERRED BY THE LD. D.R THAT NOW WHEN THE CIT(A) HAD ACCEPTED THAT THE 0 7 ENTRIES (OUT OF 9 ENTRIES) APPEARING IN THE LOOSE DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WERE THE ACTUAL PAYMENTS MADE BY THE ASSESSEE THEREFORE THERE WAS NO REASON FOR HIM TO HAVE DIFFERENTLY CONSTRUE D THE SIMILARLY PLACED REMAINING 0 2 ENTRIES FORMING PART OF THE SAID IMPOUNDED DOCUMENT. IT WAS AVERRED BY THE LD. D.R THAT THE CIT(A) WAS IN ERROR IN DIFFERENTLY CONSTR UING THE CONTENTS OF THE AFORESAID 0 2 ENTRIES IN THE ABSENCE OF ANY JUSTIFIABLE REASON. IT WAS SUBMITTED BY THE LD. D.R THAT THE CIT(A) WAS IN ERROR IN FAILING TO APPRECIATE THAT AS THE CONTENTS OF A DOCUMENT IMPOUNDED IN THE COURSE OF THE SURVEY PROC EEDINGS WAS EITHER TO BE ACCEPTED OR REJECTED IN FULL THEREFORE THE HALF HEARTED APPROACH ADOPTED BY HIM BY ALLOWING THE CLAIM OF THE ASSESSEE AND READING THE CONTENTS OF THE AFORESAID 02 ENTRIES IN A MANNER CONTRARY TO THAT WHICH WAS ADOPTED BY HIM FOR READING THE CONTENTS OF THE REMAINING 07 ENTRIES WAS NOT PERMISSIBLE. ALSO IT WAS SUBMI TTED BY THE LD. D.R THAT NOW WHEN THE 07 ENTRIES ADMITTEDLY REFERRED TO THE AMOUNT OF PAYMENTS MADE BY THE ASSESSEE ALONGWITH THE RESPECTIVE DATES OF MAKING OF SUCH PAYMENTS THEREFORE GOING BY THE PRINCIPLE OF PREPONDERANCE OF HUMAN PROBABILITIES IT COULD SAFELY BE GATHERED THE CONTENTS OF THE 02 ENTRIES WERE ALSO IN CONTEXT OF THE PAYMENTS THAT WERE ACTUALLY MADE BY THE ASSESSEE. ACCORDINGLY IN THE BACKDROP OF HIS AFORESAID CONTENTIONS IT WAS THE CLAIM OF THE LD. D.R THAT P A G E | 7 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. NOW WHEN THE REMAINING TWO ENTRIES FORMING PART OF ANNEXURE A - 2 PAGE 27 VIZ. (I) 28.02.2013: RS.2 00 00 000/ - ; AND (II) 25.06.2012: RS.7 50 00 000/ - FORM ED PART OF THE IMPOUNDED DOCUMENT WHICH ADMITTEDLY REFERRED TO 7 TRANSACTIONS IN RESPECT OF THE PAYMENTS MADE BY THE ASS ESSEE TO S/ S H. AVINASH BHOSALE & AMIT BHOSALE THEREFORE THERE WAS NO JUSTIFIABLE REASON FOR THE CIT(A) TO CONCLUDE THAT THE AFORESAID REMAINING 0 2 ENTRIES DID NOT REPRESENT THE PAYMENTS WHICH HAD ALREADY BEEN MADE BY THE ASSESSEE TO THE AFOREMENTIONED PERSONS. ACCORDINGLY IT WAS SUBMITTED BY THE LD. D.R THAT AS THE CIT(A) HAD MOST ARBITRARILY VACATED THE ADDITION OF RS.9 50 00 000/ - THAT WAS MADE BY THE A.O BY WAY OF A REASONED ORDER THEREFORE HIS ORDER MAY BE SET ASIDE AND THAT OF THE A.O BE REST ORED . 9. PER CONTRA THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A). IT WAS SUBMITTED BY THE LD. A.R THAT ADMITTEDLY THE 0 7 ENTRIES MENTIONED IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 REFERRED TO THE PAYMENTS WHICH WERE MADE BY THE ASSESSEE TO S/ S HRI AVINASH BHOSALE & AMIT BHOSALE . INSOFAR THE FIRST 0 2 ENTRIES (OUT OF 07 ENTRIES) OF RS.2 75 75 000/ - EACH WERE CONCERNED IT WAS SUBMITTED BY THE LD. A.R THAT THE SAME WERE THE PAYMENT S WHICH WERE MADE BY THE ASSESSEE TO THE AFORESAID PERSONS/THEIR F I RM FOR THE CONSULTANCY SERVICES WHICH WERE RENDERED BY THEM FOR RESOLVING CERTAIN CLAIMS AND DISPUTE WITH M/S JASANI REALITY PVT. LTD. AS REGARDS THE OSHIWADA PROJECT OF THE ASSESSEE COMPAN Y . AS REGARDS THE REMAINING 0 5 ENTRIES (OUT OF 07 ENTRIES) IT WAS SUBMITTED BY THE LD. A.R THAT THE SAME WERE IN THE NATURE OF ADVANCES THAT WERE GIVEN BY THE ASSESSEE FOR PURCHASE OF LAND AT V ILLAGE: MUNDWA PUNE WHICH THE ASSESSEE HAD PROPOSED TO ACQUIRE FOR SETTING UP A RESIDENTIAL - CUM - COMMERCIAL PROJECT. IN ORDER TO FORTIFY THE AFORESAID FACTUAL POSITION IT WAS SUBMITTED BY THE LD. A.R THAT THE SAID FACTUAL POSITION WAS CONFIRMED BY BOTH THE DIRECTORS OF THE ASSESSEE COMPANY I.E S/ S HRI AKSHA Y R. RAHEJA & GOPAL NARANG IN THEIR RESPECTIVE STATEMENTS WHICH WERE RECORDED UNDER SEC. 131 OF THE ACT BOTH AT THE TIME OF THE SURVEY PROCEEDINGS AS WELL AS POST - SURVEY PROCEEDINGS. ALSO IT WAS SUBMITTED BY THE LD. A.R THAT THE SAID FACTUAL POSITION WA S ALSO CONFIRMED BY S/ S HRI AVINASH BHOSALE & AMIT BHOSALE IN THEIR RESPECTIVE REPLIES TO THE NOTICES UNDER SEC.133(6) WHICH WERE ISSUED BY THE A.O TO THEM IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. IN FACT IT WAS AVERRED BY THE LD. A.R THAT SHRI AVINAS H BHOSALE IN HIS S TATEMENT RECORDED BY THE A.O UNDER SEC.131 ON 03.03.2016 HAD CATEGORICALLY ADMITTED THE FACT AS REGARDS THE RECEIPT OF CONSULTANCY CHARGES OF RS. P A G E | 8 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. 2 75 00 000 AS WELL AS THE PAYMENTS AGGREGATING TO RS.25 00 00 000/ - FROM THE ASSESSEE C OMPANY AS ADVANCE FOR THE PROPOSED PURCHASE OF AGRICULTURAL LAND AT SURVEY NO. 83 VILLAGE MUNDWA PUNE. ACCORDINGLY IT WAS SUBMITTED BY THE LD. A.R THAT THOUGH SH. AVINASH BHOSALE IN HIS STATEMENT RECORDED UNDER SEC. 131 DATED 03.03.2016 HAD CONFIRM ED THE RECEIPT OF AMOUNTS PERTAINING TO ALL THE 07 ENTRIES HOWEVER THERE WAS NO MENTION OF RECEIPT OF THE AMOUNT AGGREGATING TO RS. 9 50 00 000/ - [RS. 2 00 00 000/ - (+) RS. 7 50 00 000/ - ] MENTIONED AGAINST THE REMAINING 02 ENTRIES STATED IN THE IMPOU NDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 . ACCORDINGLY ON THE BASIS OF HIS AFORESAID CONTENTIONS IT WAS THE CLAIM OF THE LD. A.R THAT THE PAYMENTS AGGREGATING TO RS.9 50 00 00 000/ - VIZ. (I) RS.2 0 0 00 000/ - ; AND (II) RS.7 50 00 000/ - FORMING PART OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WERE MERELY A TENTATIVE WORKING OF THE PAYMENTS WHICH WERE YET TO BE MADE TO THE AFOREMENTIONED PERSONS I.E S/ S HRI AVINASH BHOSALE & AMIT BHO SALE AND WERE NOT AN AUTHENTIC RECORD OF TRANSACTIONS EVIDENCING ANY PAYMENTS MADE TO THEM. IN ORDER TO FORTIFY HIS AFORESAID CONTENTION THE LD. A.R TOOK US THROUGH THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 [ AS REPRODUCED IN THE ORDER OF THE CIT ( A )] . ON A PERUSAL OF THE AFORESAID IMPOUNDED DOCUMENT IT STOOD REVEAL ED THAT ON THE EXTREME RIGHT SIDE(ON TOP) A DATE I.E 11.02.2013 WAS MENTIONED. IT WAS AVERRED BY THE LD. A.R THAT THE AFORESAID DATE I.E 11.02.2013 HAD A STRONG BEARING ON ADJUDICATING THE IMPORT OF THE CONTENTS OF THE AFORESAID IMPOUNDED DOCUMENT I.E ANNEXURE A - 2 - PAGE 27 . IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID DATE 11.02.2013 COULD SAFELY OR RATHER INESCAPABLY BE CONSTRUED AS THE DATE ON WHICH THE PRINT OUT OF THE AFORESAID COMPUTER ISED SHEET WAS TAKEN BY THE ASSESSES ACCOUNTANT . LD. A.R TOOK US THROUGH THE CONTENTS OF THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 AND SUBMITTED THAT THE SECOND PART OF THE AFORESAID IMPOUNDED DOCU MENT I.E ANNEXURE A - 2 PAGE 27 REFER RED TO THE IMPUGNED 02 ENTRIES UNDER CONSIDERATION . TAKING US THROUGH THE FIRST ENTRY (OF 02 ENTRIES) IT WAS SUBMITTED BY THE LD. A.R THAT AN AMOUNT OF RS.2 00 00 000/ - WITH A CORRESPONDING DATE UNDER THE COMMON H EAD VIZ. DATE OF PAYMENT WAS MENTIONED AS 28.02.2013 . IT WAS SUBMITTED BY THE LD. A.R THAT IT WAS THE CLAIM OF THE REVENUE THAT THE 02 ENTRIES MENTIONED IN THE SECOND PART OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 REFER RED TO THE PAYMENTS WHICH WERE MADE BY THE ASSESSEE TO THE AFOREMENTIONED PERSONS I.E S/ S HR I AVINASH BHOSALE & AMIT BHOSALE . IT WAS SUBMITTED BY THE OLD. A.R THAT IF THAT WOULD HAVE BEEN SO THEN IT WAS IMPOSSIBLE TO COMPREHEND AS TO HOW IN THE PRINT OUT OF THE AFORESAID IMPOUNDED P A G E | 9 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 THAT WAS TAKEN AS ON 11.02.2013 A PAYMENT OF AN AMOUNT OF RS. 2 00 00 000/ - MADE ON 28.02.2013 COULD HAVE FOUND A MENTION . I T WAS AVERRED BY THE LD. A.R THAT A CONJOINT PERUSAL OF THE CONTENTS OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 THEREIN CONCLUSIVELY PROVED TO THE HILT THAT THE 02 ENTRIES THEREIN STATED VIZ. (I) 28.02.2013: RS.2 00 00 000/ - ; AND (II) 25.06.2012: RS.7 50 00 000/ - WE RE THE TENTATIVE PAYMENTS WHICH HAD YET NOT BEEN MADE TO THE AFOREMENTIONED PARTIES . IN THE BACKDROP OF HIS AFORESAID SUBMISSION IT WAS THE CLAIM OF THE LD. A.R THAT THE CIT(A) AFTER DULY APPRECIATING THE FACTS OF THE CASE HAD RIGHTLY VACATED THE ADDITIO N OF RS.9 50 00 000/ - MADE BY THE A.O. 10. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE JUDICIAL PRONOUNCEMENT S RELIED UPON BY THEM. ADMI TTEDLY IN THE COURSE OF THE SURVEY PROCEEDINGS CONDUCTED U/S 133A ON 09.05.2014 THE AFORESAID DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 (LOOSE DOCUMENT) WAS FOUND AND IMPOUNDED FROM THE PREMISES OF THE ASSESSEE COMPANY . THE ENTIRE CONTROVERSY INVOLVED IN THE CASE BEFORE US HINGES AROUND CONSTRUING OF THE CONTENTS OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 . IN ORDER TO APPRECIATE THE CONTENTS OF THE AFORESAID DOCUMENT IN OUR CONSIDERED VIEW IT WOUL D BE RELEVANT TO REPRODUCE THE SAID DOCUMENT WHICH READS AS UNDER: PAYMENT MADE TO AMOUNT PAID INTEREST TO BE CALCULATED FROM DATE OF PAYMENT NO. OF DAYS 24% 21% 18% 15% 12% 6% RS. RS. RS. RS. RS. RS. RS. AMIT CONSULTANC Y 2 75 75 000 01.01.2011 03.10.2011 275 49 86 164 43 62 894 37 39 623 31 16 353 24 93 082 12 46 541 AVINASH BHOSALE 2 75 75 000 01.01.2011 03.10.2011 275 49 86 164 43 62 894 37 39 623 31 16 353 24 93 082 12 46 541 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 01.01.2011 27.12.2011 360 1 18 35 616 1 03 56 164 88 76 712 73 97 260 59 17 808 29 58 904 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 01.01.2011 10.04.2012 465 1 52 87 671 1 33 76 712 1 14 65 753 95 54 795 76 43 836 38 21 918 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 01.01.2011 10.04.2012 465 1 52 87 671 1 33 76 712 1 14 65 753 95 54 795 76 43 836 38 21 918 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 01.01.2011 30.09.2012 638 2 09 75 342 1 83 53 425 1 57 31 507 1 31 09 589 1 04 87 671 52 43 836 P A G E | 10 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 01.01.2011 30.12.2012 729 2 39 67 123 2 09 71 233 1 79 75 342 1 49 75 342 1 1 9 83 562 59 91 781 TOTAL (A) 30 51 50 000 9 73 25 751 8 51 60 034 7 29 94 315 6 08 28 596 4 86 62 877 2 43 31 438 2 00 00 000 01.01.2011 28.02.2018 789 1 03 75 890 90 78 904 77 81 918 64 84 932 51 87 945 25 93 973 7 50 00 000 01.01.2011 26.06.2012 541 2 66 79 452 2 33 44 521 2 00 09 589 1 66 74 658 1 33 39 726 66 69 863 TOTAL (B) 9 50 00 000 3 70 55 342 3 24 23 425 2 77 91 507 2 31 59 589 1 85 27 671 92 63 836 TOTAL (C) 2 00 00 000 2 00 00 000 2 00 00 000 2 00 00 000 2 00 00 000 2 00 00 000 TOTAL (A)+(B)+(C) 40 01 50 0000 15 43 81 093 13 75 83 459 12 07 85 822 10 39 88 185 8 71 90 548 5 35 95 274 WE FIND THAT THE AFORESAID IMPOUNDED DOCUMENT REFERS TO TWO COMMON DATES VIZ. (I) DATE MENTIONED ON THE EXTREME LEFT SIDE ( ON T OP): 30.12.2010; AND (II) DATE MENTIONED ON THE EXTREME RIGHT SIDE (ON TOP): 11.02.2013. INSOFAR THE DATE 30.12.2010 IS CONCERNED WE FIND THAT THE SAME AS THEREIN STATED REFERS TO THE DATE OF TRANSACTION I.E THE DATE ON WHICH THE TRANSACTIONS THEREIN REFERRED IN THE DOCUMENT WERE SUP POSED TO BE ENTERED INTO. OUR AFORESAID VIEW IS FORTIFIED BY THE VERY FACT THAT W.E.F. 01.01.2011 (IN CONTEXT OF ALL THE 0 9 ENTRIES ) THE RE ARE CALCULATIONS OF INTEREST AT VARIABLE RATES WITH A COMMON CUT OFF DATE/BASE DATE OF 01/01/2011 IN EACH CASE . AS REGARDS THE DATE MENTIONED ON THE EXTREME RIGHT SIDE ( ON TOP ) OF THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WE FIND THAT THE SAME I.E 11.02.2013 IS THE DATE ON WHICH THE PRINT OUT OF THE AFORESAID DOCUMENT WAS TAKEN BY THE ASSES SEE AND/OR ITS ACCOUNT ANT (FROM WHOSE TABLE THE AFORESAID DOCUMENT WAS IMPOUNDED DURING THE COURSE OF THE SURVEY PROCEEDINGS). ADMITTEDLY THE PAYMENTS MENTIONED IN THE FIRST PART OF THE AFORESAID DOCUMENT I.E THE 0 7 ENTRIES THEREIN REFERRED TO THE PAY MENTS WHICH WERE MADE BY THE ASSESSEE TO THE AFOREMENTIONED PERSONS I.E S/ S HRI AVINASH BHOSALE & AMIT BHOSALE OR THEIR CONCERN . AS FOR THE 02 ENTRIES (OUT OF 07 ENTRIES) AGAINST WHICH AN AMOUNT OF RS. 2 75 00 000/ - EACH IS STATED THE SAME ARE IN CONT EXT OF THE CHARGES PAID BY THE ASSESSEE COMPANY TO S/SHRI AVINASH BHOSALE & AMIT BHOSALE OR THEIR CONCERN FOR THE CONSULTANCY SERVICES WHICH WERE RENDERED BY THEM FOR RESOLVING CERTAIN CLAIMS AND DISPUTE PERTAINING TO M/S JASANI REAL TY PVT. LTD. WITH REGARD TO THEIR OSHIWADA PROJECT. AS REGARDS THE REMAINING 05 ENTRIES (OUT OF 07 ENTRIES) AGGREGATING TO RS. 25 00 00 000/ - WE FIND THAT THE SAME WERE THE PAYMENTS WHICH WERE MADE BY THE ASSESSEE TO S/ S HRI AVINASH BHOSALE & AMIT BHO SALE AS ADVANCE FOR PURCHASE OF LAND AT VILLAGE MUNDWA PUNE WHICH THE ASSESSEE HAD PROPOSED TO P A G E | 11 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. ACQUIRE FOR SETTING UP A RESIDENTIAL - CUM - COMMERCIAL PROJECT . INSOFAR THE AFORESAID 0 7 ENTRIES ARE CONCERNED ( I.E 02 ENTRIES + 05 ENTRIES) THERE IS NO DISPUTE AS REGARDS THE PAYMENT OF THE AMOUNT S THEREIN MENTIONED WHICH WE FIND HAD ADMITTEDLY BEEN MADE BY ACCOUNT PAYEE CHEQUES BY THE ASSESSEE TO THE AFOREMENTIONED PERSONS . AS NOTICE D BY US HEREINABOVE THE CONTROVERSY INVOLVED IN THE PRESENT APPEAL H INGES AROUND THE CONSTRUING OF THE NATURE OF TRANSACTIONS PERTAINING TO THE REMAINING 02 ENTRIES MENTIONED IN THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 2. ON A PERUSAL OF THE AFORESAID DOCUMENT WE FIND THAT THE SAME REFERS TO TWO PAYMEN TS VIZ. (I) RS.2 00 00 000/ - (AGAINST WHICH THE DATE OF PAYMENT MENTIONED IS 28.02.2013 ) ; AND (II). RS . 7 50 00 000/ - (AGAINST WHICH THE DATE OF PAYMENT MENTIONED IS 25.06.2012 ). IT IS THE CLAIM OF THE REVENUE THAT ALIKE THE AFORESAID 0 7 ENTRIES WHICH ARE ADMITTEDLY THE PAYMENTS MADE BY THE ASSESSEE TO S/SH. AVINASH BHOSALE & AMIT BHOSALE THE SAID 02 ENTRIES ARE ALSO TO BE SIMILARLY CONSTRUED AND THEREIN FORMING PART OF THE SAME IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 HAS TO BE UNDERST OOD AS THE UNRECORDED CASH PAYMENTS THAT WERE MADE BY THE ASSESSEE TO THE AFOREMENTIONED PARTIES . 11. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW TAKEN BY THE A.O. AS IS DISC ERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT THE DIRECTORS OF THE ASSESSEE COMPANY I.E S/ S HRI AKSHAY R. RAHEJA & GOPAL NARANG HAD IN THEIR RESPECTIVE STATEMENTS RECORDED UNDER SEC. 131 OF THE ACT BOTH AT THE TIME OF SURVEY PROCEEDINGS AS WELL AS IN THE COURSE OF THE POST SURVEY PROCEEDINGS HAD CATEGORICALLY STATED THAT THE AMOUNTS MENTIONED AGAINST THE 02 ENTRIES IN THE SECOND PART OF THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WERE IN THE NATURE OF THE TENTATIVE PAYMENTS WH ICH THOUGH WERE TO BE MADE TO THE AFOREMENTIONED PERSONS I.E S/ S HRI AVINASH BHOSALE & AMIT BHOSALE BUT HAD NOT BEEN MADE TILL DATE . IN FACT IT WAS STATED BY THEM THAT AS THE ASSESSEE COMPANY COULD NOT PROCEED FURTHER IN RESPECT OF THE AFORESAID PURCHASE OF LAND ON ACCOUNT OF LAND ACQUISITION ISSUE S AND CERTAIN INTERNAL DISPUTES THAT HAD EMERGED BETWEEN THE DIRECTORS THEREFORE THE WHOLE TRANSACTION HAD CAME TO STANDSTILL. AS OBSERVED BY US HEREINABOVE THE AFORESAID 02 ENTRIES IN THE SECOND PART OF TH E IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 DOES NOT MAKE ANY REFERENCE OF THE NAME AND/OR INITIALS OF THE PERSON/PERSONS TO WHOM THE IMPUGNED PAYMENTS AGGREGATING TO RS.9 50 00 000/ - PERTAINED . ALSO AS OBSERVED BY US HEREINABOVE BOTH DIRECTORS OF T HE ASSESSEE COMPANY I.E P A G E | 12 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. S/ S H. AKSHAY R. RAHEJA & GOPAL NARANG HAD CATEGORICALLY STATED IN THEIR RESPECTIVE STATEMENTS RECORDED UNDER SEC. 131 OF THE ACT THAT THE AMOUNTS MENTIONED AGAINST THE 02 ENTRIES IN THE S ECOND PART OF THE IMPOUNDED DOCUMENT VIZ . ANNEXURE A - 2 PAGE 27 WERE THE AMOUNTS WHICH HAD YET NOT BEEN PAID TO THE AFOREMENTIONED PERSONS VIZ. S/ S H. AVINASH BHOSALE & AMIT BHOSALE . AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT THE AFORESAID FACTUAL POSITION HAD CATEGORICALLY BEEN STATED BY SHRI AKSHAY R. RAHEJA D IRECTOR OF THE ASSESSEE COMPANY IN HIS STATEMENT RECORDED UNDER SEC.131 IN THE COURSE OF THE SURVEY PROCEEDINGS CONDUCTED ON 09.05.2014 . IT WAS CATEGORICALLY CLAR IFIED BY HIM THAT THE AMOUNT OF RS.9 50 00 000/ - [ RS.7 50 00 000/ - (+) RS.2 00 00 000/ - ] WAS TO BE PAID ON THE DATES MENTIONED IN ANNEXURE A - 2 PAGE 27 BUT THE SAME HAD REMAINED UNPAID. FURTHER HE HAD CLARIFIED THAT THOUGH THE AFORESAID AMOUNTS VIZ. (I) . RS.7 50 00 000/ - AND (II). RS.2 00 00 000/ - WERE WRONGLY MENTIONED UNDER THE COMMON HEAD I.E A MOUNT PAID HOWEVER NO SUCH PAYMENT WAS MADE. THE RELEVANT EXTRACT OF THE AFORESAID STATEMENT OF SHRI AKSHAY R. RAHEJA RECORDED UNDER SEC.131 DATED 09.05.20 14 IS REPRODUCED AS UNDER: Q.20 PLEASE REFER TO YOUR RESPONSE TO Q. NO.18 AND 19 ABOVE WHEREIN YOU HAVE STATED THAT IN THE COLUMN 'AMOUNT PAID' REFLECTS THE AMOUNTS PAID TO AMIT CONSULTANCY AMIT BHOSALE AND AVINASH BHOSALE TOWARDS THE ADVANCES OF LAND. ON THE SAID PAGE NO.27 BELOW THE ABOVE SAID TABLE ONE MORE TABLE IS SHOWN IN WHICH BELOW THE COLUMN 'AMOUNT PAID' AN AMOUNT RS.9 50 00 000/ - (RS.7 50 00 000 + RS.2 00 00 000) IS SHOWN. PLEASE EXPLAIN THE SAID TRANSACTION ALONGWITH DOCUM ENTARY EVIDENCE. ANS. THE AMOUNT OF RS.9 50 00 000/ - . (RS.7 50 00 000 + RS.2 00 00 000) WAS TO BE PAID TO AVINASH & AMIT BHOSALE BUT HAS NOT BEEN PAID TILL DATE . Q . 21 IN RESPONSE TO Q.NO.20 ABOVE YOU HAVE STATED THAT THE AMOUNT OF RS.9 50 00 000 (RS.7 50 00 000 + RS.2 00 00 000) IS YET TO BE PAID IN THIS REGARD YOU ARE REQUIRED TO EXPLAIN THAT AS TO WHY THE SAID AMOUNT OF RS.9 50 00 000/ - IS MENTIONED IN THE AMOUNT PAID COLUMN. ANS. SIR INADVERTENTLY THE SAID AMOUNT OF RS.9 50 0 0 000/ (RS.7 50 00 000 + RS.2 00 00 000) IS MENTIONED IN THE PAID COLUMN. Q.22 PLEASE REFER TO YOUR RESPONSE TO Q. NO.20 AND 21 ABOVE WHEREIN YOU HAVE STATED THAT THE AMOUNT OF RS.9 50 00 000 (RS.7 50 00 000 + RS.2 00 00 000) SHOWN BELOW THE 'AMOUNT PAID' COLUMN IS THE AMOUNT WHICH WAS YET TO BE PAID. BUT IT IS SEEN AGAINST THE SAID AMOUNT THE DATES OF PAYMENT ARE ALSO MENTIONED AND INTEREST IS ALSO CALCULATED SHOWING THE NUMBER OF DAYS FOR WHICH THE INTEREST I S TO BE PAID. PLEASE EXPLAIN. ANS. SIR IT IS TRUE THAT AGAINST THE AMOUNT OF RS.9 50 00 000/ - (RS.7 50 00 000 + RS.2 00 00 000) THE DATES OF PAYMENT AND INTEREST IS ALSO CALCULATED SHOWING THE NUMBER OF DAYS. IN THIS REGARD I WISH TO STATE THAT ACTUALLY THE SAID AMOUNT OF RS. 9 50 00 000/ - (RS.7 50 00 000 + RS.2 00 00 000) P A G E | 13 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. WAS TO BE PAID ON THE DATES MENTIONED ON PAGE NO.27 WHICH WAS TO BE ON THESE DATES BUT THE SAME REMAINED UNPAID / YET TO BE PAID. Q.24 PLEASE REFER TO THE PAGE NO.27 OF THE LOOSE PAPER FILE FOUND AND IMPOUNDED AND MARKED AS ANNEXURE - A FROM YOUR PREMISE DURING THE COURSE OF SURVEY ACTION WHEREIN IN REPLY TO Q . NO. 19 YOU HAVE STATED THAT COLUMN 'DATE OF PAYMENT' REFLECTS THE AMOUNTS PAID ON A PARTICULAR DATE MENTIONED IN THE 'DATE OF PAYMENT'. FURTHER IN REPLY TO Q.NO.20 TO 22 YOU HAVE STATED THAT THE AMOUNT OF RS.9 50 00 000/ - (RS.7 50 00 000 + RS.2 00 00 000) WHICH ARE STATED TO BE PAID ON THE DATES MENTIONED IN COLUMN 'DATE OF PAYMENT' BUT YOU HAVE REPLIED THAT THE SAME IS YET TO BE PAID AND THE SAME IS INADVERTENTLY MENTIONED IN COLUMN 'DATE OF PAYMENT'. PLEASE EXPLAIN THE CONTRADICTION THAT ON THE SAME SHEET OUT OF 9 ROWS IN 7 ROWS THE AMOUNT REFLECTED IN 'AM OUNT PAID' COLUMN IS PAID ON THE DATE REFERRED IN THE SAME SHEET ON THE OTHER HAND IN TWO ROWS THE AMOUNTS MENTIONED IN THE SAME COLUMN I.E. 'AMOUNT PAID' IS NOT PAID. HOWEVER THE DATE IS ALSO MENTIONED AGAINST THE AMOUNT PAID. PLEASE EXPLAIN WHY TWO DIFF ERENT STANDS TAKEN BY YOU IN REPLY TO Q. NOS. 19 TO 22 SHOULD BE BELIEVED TO BE TRUE. ANS. SIR THIS IS A MISTAKE AS NO PAYMENT HAS BEEN MADE. Q.25 PLEASE REFER TO THE PAGE NO. 27 OF THE LOOSE PAPER FILE FOUND AND IMPOUNDED AND MARKED AS ANNEXURE - A FROM YOUR PREMISE DURING THE COURSE OF SURVEY ACTION THE GIST OF SOME OF THE ENTRIES ARE AS UNDER : - ENTRY IN ROW NO. PAYMENT MADE TO AMOUNT DATE OF PAYMENT 6 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 30.09.2012 7 AVINASH BHOSALE & AMIT BHOSALE 5 00 00 000 30.12.2012 9 7 50 00 000 25.06.2012 IT IS SEEN THAT IN ROW NO.6 AND 7 THE PAYMENT MADE IN SEPTEMBER 2012 AND DECEMBER 2012 ARE DULY RECORDED. THIS INDICATE THAT THIS SHEET IS PREPARED AFTER DECEMBER 2012. IN REPLIES TO QUESTIONS MENTIONED SUPRA YOU HAVE EXPLAINED AND CONFIRMED THAT THE PAYMENTS OF ENTRIES NO.6 AND 7 ARE MADE ON THE DATES MENTIONED AGAINST THEM BUT THE PAYMENT OF ENTRY NO.9 IS NOT YET PAID. IT IS ALSO SEEN THAT THE INTEREST ON PAYMENT OF RS.7 50 00 000/ - (ENTRY NO.9) IS ALSO CALCULATED ON PAGE NO.27. AS THE PAGE NO.27 IS PREPARED AFTER DECEMBER 2012 HOW THE INTEREST IS CALCULATED WHEN IT WAS CLEAR THAT THE PA YMENT SUPPOSED TO BE MADE ON 25.06.2012 IS NOT MADE. PLEASE COMMENT ON THE ABOVE DISCREPANCY. ANS. SIR THE PAYMENT OF RS.7 50 00 000/ - MENTIONED IN ROW NO.9 IS ACTUALLY NOT PAID THOUGH THE DATE OF PAYMENT 25.06.2012 FALLS PRIOR TO 30.12.2012. AGAIN DU RING THE COURSE OF THE POST SURVEY PROCEEDINGS S TATEMENT OF SHRI AKSHAY R. RAHEJA DIRECTOR OF THE ASSESSEE COMPANY WAS AGAIN RECORDED BY THE A.O U/S 131 ON 27.06.2014. ON A SPECIFIC QUERY RAISED BY THE A.O AS REGARDS THE AFORESAID 02 ENTRIES OF RS.7 50 00 000/ - AND RS.2 00 00 000/ - MENTIONED IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 IT WAS P A G E | 14 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. ONCE AGAIN CONFIRMED BY HIM THAT THOUGH THE AFORESAID PAYMENTS WERE TO BE MADE BUT THE SAME HAD NOT BEEN MADE TILL DATE. 12. ALSO THE STATE MENT OF SHRI GOPAL NARANG D IRECTOR OF THE ASSESSEE COMPANY WAS RECORDED IN THE COURSE OF THE SURVEY PROCEEDINGS ON 09.05.2014 UNDER SEC.131 OF THE ACT . IT WAS CATEGORICALLY AFFIRMED BY HIM THAT THE PAYMENTS AGGREGATING TO RS.9 50 00 000/ - [ RS.7 50 00 000/ - (+) RS.2 00 00 000/ - ] WERE THOUGH TO BE MADE TO S/ S H. AVINASH BHOSALE & AMIT BHOSALE H OWEVER THE SAME HAD NOT BEEN MADE TILL DATE. RELEVANT EXTRACT OF THE STATEMENT OF SHRI GOPAL NARANG RECORDED UNDER SEC.131 ON 09.05.2014 READS AS UNDER: . Q.19 PLEASE REFER TO YOUR ANSWER IN THE ABOVE QUESTION RELATED TO THE EXPLANATION OF THE PAGE NO.27 WHEREIN YOU HAVE STATED THAT THE AMOUNT HAS NOT BEEN PAID TILL DATE. BUT IN THE PAGE NO.27 IT IS CLEARLY MENTIONED THAT THE AMOUNT HAS PAID AND DATE OF PAYMENT IS 28.02.2013 (RS.2 00 00 000/ - ) AND 25.06.2012 (RS.7 50 00 000/ - ). FOR RS.30 51 50 000/ - YOU HAVE ACCEPTED AMOUNT PAID TO AVINASH BHOSALE AND AMIT BHOSALE BUT IN SAME PAGE AMOUNT OF RS 9 50 00 000/ - YOU ANSWER THAT AMOUNT TO BE PAID TO AVINASH BHOSALE AN D AMIT BHOSALE. PLEASE EXPLAIN THIS CONTRADICTORY STATEMENT. ANS. THOUGH THE ENTRIES ARE APPEARING ON THE SAME PAGE THE PAYMENTS WERE TO BE MADE HAVE NOT BEEN MADE UP TO DATE FOR AMOUNT OF RS.9 50 00 000/ - (RS.7 50 00 000 AND RS.2 00 00 000) . FURTHER IN THE COURSE OF THE POST SURVEY PROCEEDINGS THE A.O HAD AS ON 30.06.2014 ONCE AGAIN RECORDED THE STATEMENT OF SHRI GOPAL NARANG DIRECTOR UNDER SEC.131 OF THE ACT . ONCE AGAIN SHRI GOPAL NARANG DIRECTOR OF THE ASSESSEE COMPANY ON BEING CALLED UPON TO EXPLAIN THE 02 ENTRIES VIZ. (I). RS.7 50 00 000/ - ; AND (II). RS.2 00 00 000/ - MENTIONED IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 HAD REITERATED THAT THE AFORESAID PAYMENTS WERE TO BE MADE BUT HAD NOT BEEN PAID TILL DATE. RELEVANT E XTRACT OF THE AFORESAID STATEMENT OF SHRI GOPAL NARANG THAT WAS RECORDED UNDER SEC. 131 ON 30.06.2014 READS AS UNDER: Q.6. I AM SHOWING YOU YOUR STATEMENT DATED 10.05.2014. KINDLY EXPLAIN THE TWO ENTRIES OF RS.7 50 00 000/ - AND RS.2.00 00 000/ - APPEA RING IN THE PAGE NO.27 MARKED AS ANNEXURE A2 OF STATEMENT OF PAYMENTS MADE TO MR. AMIT BHOSALE AND MR. AVINASH BHOSALE IN WHICH DATED OF PAYMENTS MENTIONED AS 25.06.2012 AND 28.02.2013 RESPECTIVELY. ANS. SIR I CONFIRM HAVING SEEN MAY SWORN STATEMENT DATED 10.05.2014. IN THIS REGARD THOUGH THE TWO ENTRIES ARE APPEARING ON THE SAME PAGE HOWEVER THE PAYMENTS WERE TO BE MADE BUT HAVE NOT BEEN MADE TILL DATE. 1 3 . THE A.O IN ORDER TO VERIFY THE GENUINENESS AND VERACITY OF THE AFORESAID CLAIM OF THE ASSESSEE THAT THOUGH THE PAYMENTS VIZ. (I) RS.7 50 00 000/ - ; AND (II). RS.2 00 00 000/ - P A G E | 15 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. MENTIONED AGAINST THE 02 ENTRIES IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WERE THE AMOUNTS WHICH WERE TO BE PAID BY THE ASSESSEE TO S/SH. AVINA SH BHOSALE & AMIT BHOSALE FOR PURCHASE OF LAND AT VILLAGE: MUNDWA PUNE THAT WAS PROPOSED TO BE ACQUIRED BY THE ASSESSEE COMPANY FOR SETTING UP A RESIDENTIAL - CUM - COMMERCIAL PROJECT BUT THE SAME HAD ACTUALLY NOT BEEN PAID TO THEM ISSUED NOTICES UNDER SEC.133(6) DATED 19.01.2016 TO THE AFOREMENTIONED PERSONS I.E S/ S H. AVINASH BHOSALE & AMIT BHOSALE . AS PER THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT BOTH OF THE AFORESAID PERSONS HAD CONFIRMED THE IR TRANSACTIONS WITH THE ASS ESSEE COMPANY AND HAD EXPLAINED THAT WHAT ALL AMOUNTS WERE RECEIVED FROM THE ASSESSEE WERE DULY REFLECTED IN THEIR BOOKS OF ACCOUNTS. ALSO THE A.O RECORDED THE STATEMENT OF SHRI AVINASH BHOSALE UNDER SEC. 131 ON 03.06.2016. IN HIS AFORESAID STATEMENT SHRI AVINASH BHOSALE HAD DULY CONFIRMED THE 07 ENTRIES AGGREGATING TO RS.30 51 50 000/ - [ RS.2 75 75 000/ - (+) RS.2 75 75 000/ - (+) RS.25 00 00 000/ - ] . AL THOUGH SH. AVINASH BHOSALE IN HIS STATEMENT RECORDED UNDER SEC. 131 DATED 03.03.2016 HAD CONFIRMED THE RECEIPT OF AMOUNTS PERTAINING TO ALL THE 07 ENTRIES HOWEVER THERE WAS NO MENTION IN HIS STATEMENT OF RECEIPT OF THE AMOUNT S MENTIONED AGAINST THE REMAINING 02 ENTRIES STATED IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 . ALSO IT WAS STATED BY HIM THAT NO INTEREST PAYMENT WAS ACTUALLY MADE BY THE ASSESSEE COMPANY TO EITHER OF THEM. 1 4 . WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION IN THE BACKDROP OF THE CONTENTIONS ADVANCED BY THE AUTHORISED REPRESENTATIV ES FOR BOTH THE PARTIES AND THE FACTS EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES. AL THOUGH WE ARE NOT OBLIVIOUS OF THE FACT THAT SEC.292C ENVISAGES A PRESUMPTION THAT WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENT S MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH UNDER SEC.132 OR SURVEY UNDER SEC.133A THEN IT MAY IN ANY PROCEEDINGS UNDER THIS ACT BE PRESUMED VIZ. (I) THAT SUCH BOOKS OF ACCOUNT OTHER DOCU MENT S MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY OR TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON ARE IN THAT PERSONS HANDWRITING AND IN THE CASE OF A DOC UMENT STAMP ED EXECUTED OR ATTESTED THAT IT P A G E | 16 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. ALTHOUGH THE AFORESAID SEC.292C INTER ALIA ENVISAGES A PRESUMPTION THAT THE CONTENTS OF SUCH BO OKS OF ACCOUNT AND OTHER DOCUMENT S FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF THE SURVEY PROCEEDINGS CONDUCTED UNDER SEC.133A ARE TO BE TAKEN TO BELONG TO SUCH PERSON AND THE CONTENTS THEREOF ARE TRUE HOWEVER THE SAID PRESUMPTION IS A REBUTTAL ONE . WE FIND THAT THOUGH 02 ENTRIES OF THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 CATEGORICALLY MAKES A REFERENCE TO AMOUNT S OF RS.2 00 00 000/ - AND RS.7 50 00 000/ - UNDER THE COMMON HEAD I.E A MOUNT PAID ALONGWITH A REFERENCE TO THE CORRESPONDING DATES I.E 28.02.2013 AND 25.06.2012 RESPECTIVELY WHICH ARE MENTIONED UNDER A COMMON HEAD I.E DATE OF PAYMENT HOWEVER THE ASSESSEE HAD DECLINED OF HAVING MADE ANY SUCH PAYMENT . IN FACT IT HAS CONSISTENTLY BEEN THE CLA IM OF THE ASSESSEE THAT THE AFORESAID AMOUNTS REFERRED TO THE TENTATIVE PAYMENTS WHICH WERE TO BE MADE TO THE AFOREMENTIONED PARTIES VIZ. S/SH. AVINASH BHOSALE & AMIT BHOSALE BUT HAD NOT BEEN ACTUALLY MADE TO THEM . 1 5 . WE SHALL NOW TEST THE MAINTAINABILI TY OF THE CLAIM OF THE REVENUE THAT NOW WHEN THE REMAINING 02 ENTRIES APPEARING IN THE IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 VIZ. (I) 28.02.2013: RS.2 00 00 000/ - ; AND (II) 25.06.2012: RS.7 50 00 000/ - FORMED PART OF A DOCUMENT WHICH ADMITTEDL Y REFERRED TO 07 ENTRIES WHERE PAYMENTS WERE ACTUALLY MADE BY THE ASSESSEE TO S/SH. AVINASH BHOSALE & AMIT BHOSALE THEREFORE THERE WAS NO JUSTIFIABLE REASON FOR NOT PRESUMING THAT THE AFORESAID 02 ENTRIES ALSO REFERRED TO THE PAYMENTS WHICH WERE MADE BY THE ASSESSEE TO THE AFOREMENTIONED PERSONS. A S OBSERVED BY US HEREINABOVE THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 WAS IN ITSELF PRINTED ON 11.02.2013 . ACCORDINGLY IN CASE AS CANVASSED BY THE REVENUE THAT THE AMOUNT OF RS . 2 00 00 000/ - WAS A PAYMENT THAT WAS MADE BY THE ASSESSEE ON 28.02.2013 THEN IT IS DIFFICULT FOR US TO COMPREHEND THAT AS TO HOW SUCH TRANSACTION COULD HAVE BEEN RECORDED IN THE IMPOUNDED DOCUMENT WHICH AS OBSERVED BY US WAS PRINTED AS ON 11.02.2013 . AS SUCH THE AFORESAID CLAIM OF THE REVENUE IS DIVORCED OF ANY LOGIC AND BEYOND COMPREHENSION. APART THEREFROM IN THE BACKDROP OF THE FACT THAT THE AFORESAID IMPOUNDED DOCUMENT VIZ. ANNEXURE A - 2 PAGE 27 REFERS TO CALCULATION OF INTEREST S AT VARIOUS RATES THEREIN FURTHER FORTIFIES THE CLAIM OF THE ASSESSEE THAT THE AMOUNTS OF RS.2 00 00 000/ - AND RS.7 50 00 000/ - WERE THOUGH TO BE PAID BY THE DATES MENTIONED THEREIN I.E 28.02.2013 AND 25.06.2012 HOWEVER THE SAME HAD P A G E | 17 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. NOT BEEN PAID TILL DATE. WE FIND THAT THE AFORESAID FACTUAL POSITION HAD ALSO BEEN AFFIRMED BY THE AFOREMENTIONED PERSONS I.E S/ S H. AVINASH BHOSALE & AMIT BHOSALE TO WHOM A S PER THE REVENUE THE AFORE SAID PAYMENTS WERE MADE BY THE ASSESSEE. IN FACT WE FIND THAT THE REVENUE HAD NOT BEEN ABLE T O PLACE ON RECORD ANY MATERIAL WHICH COULD DISLODGE OR DISPROVE THE AFORESAID CLAIM OF THE ASSESSEE AND THEREIN PROVE TO THE CONTRARY THAT THE AFORESAID AMOUNTS AGGREGATING TO RS. 9 50 00 000/ - WERE ACTUALLY PAID BY THE ASSESSEE. RATHER WE ARE ALSO PER SUADED TO SUBSCRIBE TO THE REASONING GIVEN BY THE ASSESSEE FOR THE FAILURE ON ITS PART TO MAKE THE AFORESAID PAYMENTS . IT IS THE CLAIM OF THE ASSESSEE THAT AS IT WAS PASSING THROUGH A FINANCIAL CRISIS AND ALSO THERE WERE CERTAIN INTERNAL DISPUTES AMONGST THE DIRECTORS OF THE ASSESSEE COMPANY THEREFORE THE PURCHASE TRANSACTION OF THE AFORESAID LAND AT V ILLAGE : MUNDWA PUNE WHICH WAS PROPOSED TO BE ACQUIRED FOR SETTING UP A RESIDENTIAL - CUM - COMMERCIAL PROJECT HAD CAME TO A STANDSTILL. THE AFORESA ID CLAIM OF THE ASSESSEE IS ALSO SUPPORTED BY THE FACT THAT AN AMOUNT OF RS. 2 00 00 000/ - HAD THEREAFTER BEEN RECEIVED BACK BY THE ASSESSEE COMPANY FRO M THE AFOREMENTIONED PERSONS I.E S/ S H. AVINASH BHOSALE & AMIT BHOSALE ON 05.03.2013. IN THE BACKDROP OF THE AFORESAID FACTS WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) AFTER DULY APPRECIATING THE FACTS OF THE CASE HAD BY WAY OF A VERY WELL REASONED ORDER VACATED THE ADDITION OF RS.9 50 00 000/ - [ RS.7 50 00 000/ - (+) RS.2 00 00 000/ - ] THAT WAS MADE BY THE A.O . ACCORDINGLY FINDING NO INFIRMITY IN THE ORDER OF THE CIT(A ) TO THE EXTENT HE HAD DELETED THE ADDITION OF RS.9 50 00 000/ - WE UPHOLD HIS ORDER . 1 6 . THE APPEAL OF REVENUE IS DISMISSED. C.O. NO.255/MUM/2018 (ARISING OUT ITA NO. 1504/MUM/2017) 1 7 . WE SHALL NOW ADVERT TO TH E CROSS - OBJECTION FILED BY THE ASSESSEE. AS OBSERVED BY US HEREINABOVE THE ASSESSEE COMPANY HAD DURING THE YEAR CLAIMED TO HAVE PURCHASED VARIOUS ITEMS OF FURNITURE AND FIXTURES AND OTHER DECORATIVE ITEMS FROM TWO CONCERN S V IZ. (I) M/S PRIYA EXIM P VT . LTD. : RS.7 32 02 649/ - ; AND (II) M/S KOTSONS IMPEX PVT. LTD.: RS.1 62 71 899/ - . I NFORMATION WAS RECEIVED BY THE A.O FROM THE S ALES TAX DEPARTMENT MAHARASHTRA THAT THE AFORESAID CONCERN S WERE INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES/BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL IN PHYSICAL FORM. ON THE BASIS OF THE AFORESAID INFORMATION THE A.O IN THE COURSE OF THE ASSESSMENT PROCEEDINGS CALLED UPON THE ASSESSEE TO P A G E | 18 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. SUB STANTIATE THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS. IT WAS S UBMITTED BY THE ASSESSEE THAT THE AFORESAID ITEMS PURCHASED FORMED PART OF THE WORK - IN - PROGRESS OF ITS PROJECT WINDSOR GRANDE . FURTHER IN ORDER TO SUBSTANTIATE THE GENUINENESS O F ITS AFORESAID PURCHASE TRANSACTIONS THE ASSESSEE PLACED ON RECORD SUPPORTING DOCUMENTS/DETAILS VIZ. BILLS INVOICES TRAIL OF EMAILS COPIES OF ORDERS BANK STATEMENTS AND THE PHOTOS OF ALL THE ITEMS LYING/FIXED AT ITS PROJECT SITE VIZ. WINDSOR GRANDE. IN ORDER TO VERIFY THE GENUINENESS OF THE AFORESAID PURCHASE TRANSACTIONS THE A.O ISSUED NOTICE S UNDER SEC. 133(6) TO THE AFOREMENTIONED PARTIES. ONE OF THE PARTY NAMELY M/S PRIYA EXIM PVT. LTD. COMPLIED WITH THE AFORESAID NOTICE AND SUBMITTED ITS REPLY . HOWEVER THE SUMMON WHICH WAS SUBSEQUENTLY ISSUED BY THE A.O UNDER SEC.131 TO M/S PRIYA EXIM PVT. LTD. WAS NOT COMPLIED WITH BY THE LATTER. ON THE OTHER HAND THE OTHER PARTY NAMELY M/S KOTSONS IMPEX PVT. LTD. DID NOT SUBMIT ANY REPLY. IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE IN THE COURSE OF THE SURVEY PROCEEDINGS HAD SUBMITTED THAT THEY HAD PURCHASED THE AFORESAID ITEMS FROM M/S SOURCES LIMITED. IT WAS THE CLAIM OF THE ASSESSEE THAT THE AFORESAID CONCERN HAD PROVIDED THE BILLS OF M/S PRIYA EXIM PVT. LTD. AND M/S KOTSON IMPEX PVT. LTD. ON THE BASIS OF THE AFORESAID FACTS THE A.O DEPUTED HIS INSPECTOR TO PHYSICALLY VERIFY AS TO WHETHER THE ASSESSEE WAS IN ACTUAL POSSESSION OF THE VARIOUS ITEMS AT ITS PROJECT SITE OR NOT. AS PER THE REPORT DATED 04.03.2016 IT WAS SUBMITTED BY THE INSPECTOR THAT HE HAD PHYSICALLY VERIFIED THAT ALL OF THE ITEMS AS PER THE LIST AND THE PHOTO ALBUM THAT WAS SUBMITTED BY THE ASSE SSEE WERE AVAILABLE AT THE ASSESSES PROJECT SITE. ON THE BASIS OF THE AFORESAID FACTS TH E A.O WAS OF THE VIEW THAT THE ASSESSEE HAD ACTUALLY PURCHASE D THE AFORESAID GOODS WHICH WERE THEREAFTER WERE PUT TO USE IN ITS SAMPLE FLATS. HOWEVER AT THE SAME TIME THE A.O HELD A CONVICTION THAT THE ASSESSEE WOULD HAVE PROCURED THE AFORESAID ITEMS NOT FROM THE ABOVEMENTIONED DEALERS BUT AT A DISCOUNTED VALUE FROM THE OPEN/GREY MARKET. ACCORDINGLY THE A.O BACKED BY HIS AFORESAID CONVICTION DISALLOWED 12.5% OF THE AGGREGATE VALUE OF THE PURCHASES WHICH WERE CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FRO M THE AFOREMENTIONED PARTIES AND CARRIED OUT A DISALLOWANCE OF RS.1 11 84 319/ - (I.E. 12.5% OF THE IMPUGNED PURCHASES OF RS.8 94 74 548/ - ). ON APPEAL THE AFORESAID ADDITION/DISALLOWANCE OF RS. 1 11 84 319/ - WAS PRINCIPALLY UPHELD BY THE CIT(A). AT THE SAM E TIME THE CIT(A) DIRECTED THE A.O TO AFFORD AN OPPORTUNITY TO THE ASSESSEE TO DEMONSTRATE THAT THE CORRECT AMOUNT OF PURCHASES WERE DEBITED BY IT IN ITS PROFIT & LOSS ACCOUNT. ALSO THE A.O WAS DIRECTED TO RE - COMPUTE THE DISALLOWANCE IF WARRANTED AFTER CARRYING OUT NECESSARY VERIFICATION. P A G E | 19 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. 1 8 . AGGRIEVED THE ASSES S EE HAS OBJECTED TO THE ORDER OF THE CIT(A) WHEREIN THE LATTER HAD REFRAINED FROM VACAT ING THE ADDITION/DISALLOWANCE OF RS. 1 11 84 319/ - (12.5% OF THE AGGREGATE VALUE OF IMPUGNED PURCHASES OF RS. 8 94 74 548/ - ). AS OBSERVED BY US HEREINABOVE THE FACT THAT THE ASSESSEE HAD CLAIMED TO HAVE PLACED ITS ORDER FOR THE GOODS/MATERIAL (WHICH THEREAFTER FORMED PART OF ITS WORK - IN - PROGRESS) WITH M/S SOURCES UNLIMITED BUT THEREAFTER WAS IN RECEIPT OF BILLS FROM THE AFORESAID TWO TAINTED PARTIES VIZ. (I). M/S PRIYA EXIM PVT. LTD; AND (II). M/S KOTSONS IMPEX PVT. LTD. IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION OF THE ASSESSEE DOES NOT INSPIRE MUCH OF CONFIDENCE AS REGARDS THE GENUINENESS OF THE IMPUGNED PURCHASE TRANSACTIONS. ADMITTEDLY AS PER THE VERIFICATIONS CARRIED OUT BY THE A.O (THROUGH HIS INSPECTOR) THE FACT THAT THE ASSESSEE HAD ACTUALLY PURCHASED THE GOODS (FORMING PART OF ITS WORK - IN - PROGRESS) STANDS PROVED AND IS NOT IN DISPUTE. IN FACT IN THE BACKDROP OF THE PECULIAR PURCHASE TRANSACTIONS COUPLED WITH THE FACT THAT AS PER THE INFORMATION SHARED BY THE SALES TAX DEPARTMENT MAHARASHTRA THAT THE AFORESAID TWO CONCERN S VIZ. (I). M/S PRIYA EXIM PVT. LTD; AND (II). M/S KOTSONS IMPEX PVT. LTD. WERE INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES/BILLS WITHOUT ACTUALLY SUPPLYING THE MATERIAL IN PHYSICAL FORM THE A.O IN OUR CONSIDERED VIEW TAKING COGNIZANCE O F THE FACT THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE GENUINENESS OF THE IMPUGNED PURCHASE TRANSACTIONS ON THE BASIS OF IRREFUTABLE DOCUMENTARY EVIDENCE HAD THUS EVERY GOOD REASON TO CONCLUDE THAT THE ASSESSEE HAD PURCHASED THE GOODS NOT FROM THE AFORES AID PARTIES BUT AT A DISCOUNTED VALUE FROM THE OPEN/GREY MARKET. AT THE SAME TIME WE ALSO CANNOT REMAIN OBLIVIOUS OF THE FACT THAT ONE OF THE SUPPLIER PARTY VIZ. M/S PRIYA EXIM PVT. L TD. HAD COMPLIED WITH THE NOTICE ISSUED BY THE A.O U/S 133(6) AND HAD S UBMITTED ITS REPLY. BUT THEN THE AFORESAID PARTY HAD FAILED TO PUT UP AN APPEARANCE BEFORE THE A.O IN COMPLIANCE TO NOTICE ISSUED UNDER SEC. 131 OF THE ACT. INSOFAR THE OTHER SUPPLIER PARTY VIZ. M/S KOTSONS IMPEX PVT. LTD. IS CONCERNED WE FIND THAT THE LATTER HAD NOT COMPLIED WITH THE NOTICE ISSUED BY THE A.O UNDER SEC. 133(6) OF THE ACT. AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES THE A.O HAD NEVER DIRECTED THE ASSESSEE TO PRODUCE THE AFORESAID PARTIES FOR NECESSARY VERIFICATION BEFORE H IM. ALSO AT NO STAGE ANY VERIFICATIONS HAD BEEN CARRIED OUT BY THE A.O FROM M/S SOURCES UNLIMITED ON WHOM THE ASSESSEE HAD CLAIMED TO HAVE PLACED ITS PURCHASE ORDERS. IN OUR CONSIDERED VIEW NEITHER THE ASSESSEE HAD BEEN ABLE TO SUBSTANTIATE THE GENUINEN ESS OF THE PURCHASE TRANSACTIONS ON THE BASIS OF ANY IRREFUTABLE DOCUMENTARY EVIDENCE NOR THE P A G E | 20 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD. REVENUE HAS CARRIED OUT THE REQUIRED EXTENSIVE VERIFICATIONS FOR AR RIVING AT A FAIR CONCLUSION AS REGARDS THE GENUINENESS OF THE PURCHASE TRANSACTIONS . ACCORDINGLY IN ALL FAIRNESS WE SET ASIDE THE ORDER OF THE CIT(A) IN CONTEXT OF THE ISSUE UNDER CONSIDERATION AND RESTORE THE MATTER TO THE FILE OF THE A.O FOR CARRYING OUT NECESSARY VERIFICATIONS. NEEDLESS TO SAY THE A.O SHALL IN THE COURSE OF THE SET ASIDE PROCEEDINGS AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHO SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE THE GENUINENESS OF THE IMPUGNED PURCHASE TRANSACTIONS ON THE BASIS OF FRESH DOCUMENTARY EVIDENCE. 1 9 . RESULTANTLY THE CROS S - OBJECTION FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 20 . THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CROSS - OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 2 7 .11 .2019 S D / - S D / - ( S.RIFAUR RAHMAN) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 27 .11.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI P A G E | 21 ITA NO.1504/MUM/2017 A.Y. 2013 - 14 & C.O. 255/MUM/2018 ACIT - 13(3)(1) VS. M/S WINDSOR REALTY PVT. LTD.