M/s. Shanti Enterprise,, Surat v. The Addl.CIT.,Range-2,, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.469/AHD/2009 ASSESSMENT YEAR:2005-06 DATE OF HEARING:2.8211 DRAFTED:18.2211 M/S. SHANTI ENTRPRISE MILLENEUM TEXXTILE MARKET SHOP NO.1013- 14 UMARWADA A KAMELA DARWAJA RING ROAD SURAT PAN NO.AALFS5217L V/S . ADDL. COMMISSIONER OF INCOME-TAX RANGE-2 SURAT (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI J.P.SHAH SR-AR RESPONDENT BY:- SHRI SHYAM KUMAR CIT-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX(APPEALS)-II SURAT IN APPEAL NO.CAS/II/1 434/07-08 DATED 12-11-2008. THE ASSESSMENT WAS FRAMED BY THE ADDL.CIT RANGE-2 SURAT U/S.143(3) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 31-12- 2007 FOR THE ASSESSMENT YEAR 2005-06. 2. THE FIRST GROUND OF THE ASSESSEES APPEAL REGARD ING VALIDITY OF ORDER AND LD. COUNSEL FOR THE ASSESSEE FAIRLY STATED THAT HE HAS INSTRUCTIONS FROM THE ASSESSEE NOT TO PRESS THIS GROUND AND ACCORDINGLY THIS GROUN D IS DISMISSED AS NOT PRESSED. 3. THE NEXT EFFECTIVE AND INTER-CONNECTED ISSUES IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE REJECTIO N OF BOOK RESULTS AND ALSO CONFIRMING ADDITION MADE ON ACCOUNT OF SUPPRESSION OF SALE RECEIPTS OF SHOPS SOLD TO CUSTOMERS. FOR THIS ASSESSEE HAS RAISED THE FOLLOW ING GROUND NO.II & III :- (II) REJECTION OF BOOK RESULT- ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 2 (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING REJECTION OF BOOK RESULT ON THE GROUNDS WHICH ARE N OT GERMANE AND PARTICULARLY WHEN THE ISSUES ARISING FOR REJECTION OF THE BOOKS WERE EXPLAINED AND RECONCILED. (2) THE APPELLANT SUBMITS THAT THE DISCREPANCIES NO TED IN THE BOOKS HAVING BEEN EXPLAINED AND RECONCILED THERE WAS NO JUSTIFIC ATION FOR REJECTION OF BOOK RESULT. (III) ADDITION OF RS.3 01 58 459/- AS SUPPRESSION O F SALE:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITION OF RS.3 01 58 459/- WHEN THE ESTIMATE OF SELLING RATE OF SHOPS WAS BASED ONLY ON PRESUMPTION AND COMPARING W ITH A CASE OF SALE WHICH WAS NOT COMPARABLE. (2) THE APPELLANT SUBMITS THAT THERE WAS NO CORROBO RATIVE EVIDENCE TO JUSTIFY THE ESTIMATE OF SELLING PRICE RATE. (3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ALSO NOT COMPREHENDED DISTINCTION BETWEEN BUILT UP AND SUPER BUILT UP AREA. (4) WITHOUT PREJUDICE TO THE ABOVE THERE WAS NO JU STIFICATION FOR SUSTAINING ADDITION IN RESPECT OF THE ALL THE SHOPS BY DETERMI NING DIFFERENCE IN RATE WHICH IS NOT AT ALL APPLICABLE. 4. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE-FIRM IS A CONTRACTOR/DEVELOPER OF SHOPPING COMPLEXES TEXTILE MARKETS ETC. CONSISTING OF 12 PARTNERS MAINTAINING ITS BOOKS OF ACCOUNT ON MERCAN TILE BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CONSTRUCTED MILLENNIUM TEXTILE MARKET AT PLOT NO.14 7 RING ROAD SURAT WHICH IS MODERN TEXTILE MARKET FULL OF BASIC REQUIREMENTS LI KE CIVIC AMENITIES BEAUTIFICATION AND WITH SO MANY VALUE ADDITIONS. ACCORDING TO HIM THIS IS ONE THE BIGGEST TEXTILE MARKET BECAUSE OF THE VAST LAND QUALITY OF CONSTRU CTION NUMBER OF SHOPS. THIS MILLENNIUM TEXTILE MARKET IS SITUATED AT THE FRONT ROAD SIDE WITH WIDE SURROUNDING APPROACH ROAD AND NOT ONLY THAT THIS PROJECT IS SI TUATED IN THE HEART OF THE TEXTILE MARKET BUT THERE ARE SO MANY PHASES OF CONSTRUCTION . ACCORDING TO HIM IN THE FIRST PHASE 1072 SHOPS HAVE BEEN CONSTRUCTED AND AT THE INITIAL STAGE MOST OF THE SHOPS WERE BOOKED AS CAN BE SEEN FROM THE BALANCE SHEET OF EARLIER YEARS. HUGE BOOKING ADVANCES WERE DECLARED IN THE FINANCIAL YEAR 2002-0 3 AT RS.37 07 21 921/- WHEREAS IN FINANCIAL YEAR 2003-04 IT WAS OF RS.24 93 31 675 /-. IN THIS YEAR BALANCE OF BOOKING DEPOSIT WERE SHOWN AT RS.23 74 76 050/- I.E. ASSESS MENT YEAR 2005-06 RELEVANT TO FINANCIAL YEAR 2004-05. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAS SHOWN ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 3 SALE OF 114 SHOPS INCLUSIVE OF HALLS FOR RS.6 04 93 580/- IN THE RELEVANT ASSESSMENT YEAR AND THE CARPET AREA OF TOTAL SALES OF SHOPS AN D HALLS AND OPEN SPACE WAS CLAIMED TO BE OF 24582.55 SQ.FT. ACCORDING TO HIM IF SELLING PRICE IS CALCULATED IN TERMS OF NUMBER OF SHOPS THE SELLING PRICE WOULD CO ME @ RS.50 645/- WHILE IF IT IS CALCULATED WITH REFERENCE TO CARPET AREA THEN THE S ELLING RATE WOULD BE @ 2460.80 PER SQ.FT AND THE COST OF CONSTRUCTION HAS BEEN SHO WN BY THE ASSESSEE @ 3327 OR MORE. THIS FACT IS NARRATED BY HIM BY STATING THAT SELLING PRICE HAS BEEN SUPPRESSED FROM BOTH THE ANGLES:- A) FROM THE COST OF CONSTRUCTION ANGLE BECAUSE SELL ING PRICE IS LOWER THAN COST OF CONSTRUCTION OF THE SHOPS. B) FROM THE POINT OF VIEW OF MARKET RATE THE SELLI NG RATE HAS BEEN SUPPRESSED SUBSTANTIALLY. NO SHOP CAN BE SOLD OUT @ RS.556000/ - OR RS.530645/- AS HAS BEEN SHOWN BY THE ASSESSEE BECAUSE OF THE FACT THAT NORMAL SELLING PRICE OF THE SHOPS RANGES FROM RS.13 LAKHS TO 21 LAKHS IN MI LLENNIUM MARKET CONSTRUCTED BY THE ASSESSEE. THE ELEMENT OF ON-MONE Y IS VERY MUCH VISIBLE FROM THE CIRCUMSTANTIAL EVIDENCES AS WELL AS FROM T HE CORROBORATIVE EVIDENCES LIKE ONE OF SALE DEED OF SURAT PEOPLES CO-OP. BANK LTD. 5. THE ASSESSING OFFICER FURTHER NOTED FROM THE TRA NSACTION OF SURAT PEOPLES CO-OP. BANK LTD. (SPCOBL IN SHORT) THAT THE ASSESSE E HAS SOLD 2776 SQ.FT. FOR A TOTAL CONSIDERATION OF RS.90 LAKH IN TERMS OF SQ.FT. COM ES TO RS.3242 PER SQ.FT. FOR HALL ON 2 ND FLOOR VIDE SALE DEED NO.SRT/3/NO.2842 OF 2005 DATE D 10-03-2005. ACCORDING TO ASSESSING OFFICER THE SELLING RATE RANGES FROM RS. 1859 TO 3271/- AND HE ALSO DISCUSSED THE SALE OF 17 SQ.FT. AT LOWER GROUND FLO OR TO SHRI NIRMAL S MALPANI AND SHRI BADRIPRASAD GAUTAM FOR A CONSIDERATION OF RS.2 2 LAKH AND ANOTHER PROPERTY PURCHASED BY THESE TWO PERSONS ON LOWER GROUND FLOO R IN F & G WING AD MEASURING ABOUT 2626 SQ.FT. LEASE OUT TO UTI BANK AT A MONTHL Y RENT OF RS.65 000/-. THE AO IN HIS SHOW-CAUSE NOTICE NO. ADDL. CIT RANGE-2/ASSMT/0 7-08 DATED 26-12-2007 REQUIRED THE ASSESSEE TO EXPLAIN IN RESPECT OF THI S ISSUE AS UNDER:- 2. IT IS FOUND FROM YOUR REPLY DATED 14.12.2007 TH AT YOU HAVE SOLD A BIG HALL OF 5402 SQ.FT. TO SURAT PEOPLES COOP. BANK LTD. FOR A AMOUNT OF RS.90 LAKHS WHEREAS THE INVESTIGATION FROM THE BANK REVEALS THA T TOTAL AREA OF HALL IS ONLY OF 4164 SQ.FT. ACCORDINGLY SELLING PRICE SHALL BE @ 2161 WHEREAS ACCORDING TO YOUR BOOKS OF ACCOUNT SELLING PRICE IS ONLY AT THE RATE OF 1666/- PER SQ.FT THUS ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 4 OBVIOUSLY A SUPPRESSION OF SELLING PRICE IN YOUR AC COUNTS. YOU ARE REQUESTED TO PLEASE EXPLAIN THE DISCREPANCY OF THE DOCUMENTS SO EXECUTED TO SURAT PEOPLES CO-OP. BANK AND DETAILS MENTIONED IN YOUR B OOKS OF ACCOUNT. ALSO EXPLAIN AS TO WHY THIS SHOULD NOT BE TAKEN AS AN EV IDENCE FOR ASCERTAINING THE SUPPRESSION OF INCOME. 3. IT IS FURTHER FOUND FROM THE DETAILS SUBMITTED B Y YOU THAT YOU HAVE SOLD SHIP NO.4225 AND 4226 TO SURAT ADATIYA KAPDA ASSOCIATION @ 1859/- AND HAVE SHOWN SELLING PRICE ONLY OF RS.450000/- BUT IF IT IS CALCULATED FROM THE TOTAL AREA SOLD I.E. 340 SQ.FT. THE SELLING PRICE WILL CO ME TO RS.632060/-. THUS THERE IS A CLEAR CUT SUPPRESSION OF RECEIPT OF 182060/-(R S.632060-450000). YOU ARE REQUESTED TO PLEASE EXPLAIN AS TO WHY THIS SHOULD N OT BE TAKEN AS FURTHER EVIDENCE TO ASCERTAIN THE SUPPRESSION OF RECEIPTS. 4. IT IS FURTHER NOTICED THAT YOU HAVE SHOWN TO HAV E SOLD SHOP NO.A/102 OF 96 SQ.FT. TO ONE SMITI NAGJIBHAI VARHANI (MINOR) AND H AVE SHOWN ONLY RS.60000/- WHICH COMES @ RS.625/- PER SQ.FT. WHERE AS YOUR COS T PRICE ITSELF IS @ RS.3825/-. THIS CLEARLY PROVES THE SUPPRESSION OF S ELLING PRICE GIVING RISE TO PRESUME OR GIVING REASON TO BELIEVE THAT EITHER ON MONEY HAS BEEN TAKEN OR ACTUAL RECEIPT HAS BEEN SUPPRESSED. THIS FACT CAN B E FOUND CORROBORATED IF THE SELLING PRICE OF CANTEEN M.G-203 IS CONSIDERED. SO MANY OTHER EXAMPLES ARE THERE WHICH REVEALS THE ABOVE FACTS HENCE NEEDS YO UR EXPLANATION. 6. THE ASSESSING OFFICER FURTHER REJECTED THE BOOK RESULTS ONLY ON THE BASIS THAT THERE ARE DISCREPANCIES IN THE CLOSING BALANCE OF B OOKING DEPOSITS MADE IN VARIOUS ACCOUNTS BY INTENDING PURCHASER OF SHOPS AND THE OP ENING BALANCE AT THE BEGINNING OF THE NEXT YEAR. THE ASSESSEE BEFORE THE ASSESSING OFFICER STATED THAT IT HAS PROMOTED AND BUILT MILLENNIUM MARKET ON RING ROAD A ND HAS SHOWN BOOKING OF SHOPS IN FINANCIAL YEARS 2002-03 2003-04 AND 2004- 05 AND HAD DISCLOSED SUBSTANTIAL SUMS AS BOOKING DEPOSITS. THE ASSESSEE CLAIMED THAT THAT THE BIFURCATION OF DEPOSITS INTO MORE THAN ONE DEPOSIT IS AS A RESU LT OF BIFURCATION OF BOOKING IN ONE NAME CONVERTED INTO MORE THAN ONE NAME AND THIS PR ACTICE IS NORMAL IN PROPERTY TRANSACTIONS. BUT THE CIT(A) CONFIRMED THE REJECTIO N OF BOOK RESULTS BY GIVING FOLLOWING FINDINGS IN PARA-6..2 TO 6.5 AS UNDER:- 6.2 COMING TO THE SECOND ASPECT OF THE MATTER THE ARS CLAIM OF BIFURCATION OF THE VARIOUS ACCOUNTS IS SIMPLY NOT BACKED UP BY ANY EVIDENCE. IF THE ARS EXPLANATION IS TO BE ACCEPTED THEN THE ACCOUNTS OF VARIOUS PURCHASERS WOULD HAVE SHOWN THE ADJUSTMENTS MADE NOT ONLY IN THE OW NERSHIP OF THE SHOPS BUT ALSO IN THE AMOUNTS PAID OR TRANSFERRED TO SOME OTH ER ACCOUNT. SIMILAR ADJUSTMENTS WOULD ALSO HAVE BEEN MADE WHERE A SINGL E OWNERSHIP WAS TRANSFORMED INTO A JOINT OWNERSHIP. THE ASSESSING O FFICER'S EXAMINATION DID NOT REVEAL ANY SUCH ADJUSTMENT IN THE ACCOUNTS OF T HE BUYERS. THEREFORE THE AR EXPLANATION OF THE DISCREPANCIES IN THE CLOSING AND CARRIED/BROUGHT FORWARD BALANCES IS SIMPLY NOT ACCEPTABLE. ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 5 6.3 IN PARA-4.1(V) AND (VI) THE AO HAS POINTED OUT THE VARIATION IN THE SELLING PRICES OF DIFFERENT SHOPS AND HALLS ETC. THE AR'S H AD UNNECESSARILY HARPED DON THE SUPPRESSION OF SALES BY SELLING SHOPS AT A CHEAPER RATE. IT IS QUITE OBVIOUS THAT SUCH CRYPTIC ARGUMENT HAS BEEN MADE BY THE AR SIMPLY FOR ARGUMENTS SAKE. IT CANNOT BE A MATTER OF ARGUMENT THAT THERE IS ALWAYS A GOING RATE OR A MARKET RATE NOT ONLY OF FLATS AND S HOPS BUT ALSO FOR EVEN PERISHABLE COMMODITIES. THIS MEANS THAT GIVEN CERTA IN MEASURES AND CHARACTERISTICS WHICH ARE CONSTANT AND COMMON PART ICULAR PROPERTY WILL SELL AT THE SAME RATE AT DIFFERENT PARTS OF THE SAME MARKET . SIMILARLY WHEN A BUILDING COMPRISES OF SHOPS AND FLATS IT HAS A RATE WHICH IS COMMON TO ALL UNLESS CERTAIN SPECIAL FEATURES ARE ADDED TO SOME. IN THE CASE OF THE ASSESSEE THE AO GAVE THE CLEAR FINDING THAT THE HALL PURCHASED B Y THE SURAT PEOPLES CO- OP BANK IN THE SAME MARKET WAS @ RS.3242 PER SQ. FT . WHICH WAS INFORMED BY THE BANK ITSELF. THEREFORE IT COULD SAFELY BE P RESUMED THAT HALLS OF SIMILAR SIZES WOULD SELL AT THE SAME RATE. IN FACT WHERE A BUILDING BASICALLY COMPRISES ONLY OF SHOPS WHEN A PERSON BUYS A HALL WHICH COVE RS A SPACE EQUIVALENT TO SEVERAL SHOPS WHAT WOULD OPERATE IS THE ECONOMICS OF SCALE. IN OTHER WORDS THE HALL WOULD SELL AT A LOWER RATE THAN INDIVIDUAL SHOPS. IN THE CASE OF THE ASSESSEE IT WAS FOUND TO BE JUST THE OPPOSITE. THE OTHER HALL WHICH WAS PURCHASED BY NIRAMAL S MALPANI AND BADRIPRASAD GAUT AM WAS SOLD AT A MUCH LESSER RAT4E OF 837.77 PER SQ. FT. NEITHER THE ASSESSEE NOR THE AR HAS FURNISHED ANY EXPLANATION REGARDING SUCH A VAST DIF FERENCE IN THE SELLING RATES. 6.4 THE AO THEREFORE WAS FULLY JUSTIFIED IN TAKING THE VIEW THAT THE ASSESSEE HAD SUPPRESSED THE SALE PROCEEDS. THIS VIEW OR FIND ING WAS REINFORCED BY THE OBSERVATION OF THE AUDITORS IN THE AUDIT REPORT [ PARA-4.1(VII) ]. IN ANNEXURE-F TO THE AUDIT REPORT IT HAD BEEN CLEARLY MENTIONED T HAT NO DOCUMENTARY EVIDENCE OF SALE HAD BEEN PRODUCED BEFORE THE AUDIT ORS. THE AUTHORIZED REPRESENTATIVE'S RESPONSE IS THAT IF SUCH EVIDENCE WAS NOT PRODUCED BEFORE THE AUDITORS THEY COULD HAVE BEEN PRODUCED BEFORE THE AO IF THEY HAVE BEEN ASKED FOR. THIS IS INDEED A VERY WEAK ARGUMENT WHIC H VIRTUALLY EXPOSES THE VULNERABILITY OF THE ASSESSEES POSITION. IN ALMOST ALL CASES EVEN WHEN BOOKS OF ACCOUNT ARE NOT PRODUCED THE AUDIT REPORT IS CIT ED AND RELIED UPON AS THE SUPREME AUTHORITY AND THE FINAL CERTIFICATE OF THE CORRECTNESS AND GENUINENESS OF THE BOOKS OF ACCOUNT OR ACCOUNTING RESULTS. IN T HIS CASE NO EXPLANATION HAS BEEN FURNISHED AS TO WHY SUCH DOCUMENTS HAD NOT BEE N FURNISHED BEFORE THE AUDITORS AND HOW THE SAME COULD NOW BE ACCEPTED AS GENUINE AND AUTHENTIC. QUITE CLEARLY SUCH DOCUMENTS WERE NOT PRODUCED BEF ORE THE AUDITORS SINCE THE MANIPULATIONS DONE BY THE ASSESSEE WOULD BE TOT ALLY EXPOSES. 6.5 GIVEN SUCH FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE IT IS HELD THAT THE AO WAS FULLY JUSTIFIED IN REJECTING T HE BOOK RESULTS U/S.2145(34) OF THE ACT. HENCE THE ASSESSEES APPEAL ON THIS GROUN D IS REJECTED. 7. WE FIND THAT THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS AFTER GOING THROUGH THE BOOKS OF ACCOUN T NOTED THAT THERE IS DISCREPANCY IN THE OPENING AND CLOSING BALANCES OF VARIOUS DEPO SITS OF CUSTOMERS. ACCORDINGLY ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 6 HE REQUIRED THE ASSESSEE TO EXPLAIN. THE ASSESSEE STATED THAT THE BIFURCATION OF DEPOSITS INTO MORE THAN ONE DEPOSIT IS AS A RESULT OF BIFURCATION OF BOOKING IN ONE NAME CONVERTED INTO MORE THAN ONE NAME AND THIS PR ACTICE IS NORMAL IN PROPERTY TRANSACTIONS. THE ASSESSING OFFICER AS WELL AS CIT (A) HAS NOT BELIEVED THE EXPLANATION AND CONFIRMED THE REJECTION OF BOOK RES ULT. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE STATED THE FACT FROM A DETAILED CHART ENCLOSED IN ASSESSEES PAPER BOOK ENTAILING PARTICULARS OF NAME OF DEPOSITORS AM OUNT RECEIVED FROM THE SAME AMOUNT BIFURCATED INTO VARIOUS SHOPS AMOUNT APPROP RIATED TOWARDS SALES BOOKING AMOUNT REFUNDED WHERE APPLICABLE AND HOST OF OTHER DETAILS THAT CLEARLY GIVE TRAIL RIGHT FROM 01-04-2002 UNTIL THE CURRENT ASSESSMENT YEAR. THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED IN BRIEFLY THE MODALITY OF BIFUR CATION OF SHOPS BY GIVING AN EXAMPLE AN INDIVIDUAL MAY DEPOSIT X SUM FOR BOOK ING CERTAIN NUMBER OF SHOPS. AT A LATER SAGE HE MAY REQUEST TO BIFURCATE THE DEPOS IT INTO THE NAMES OF MORE THAN ONE PERSON. WHO COULD BE FAMILY MEMBERS OR GROUP CO NCERNED OF THAT INDIVIDUAL AND AS SUCH X GETS DIVIDEND INTO X AND WHERE N WO ULD REPRESENT NUMBER OF PERSONS BASED ON RESPECTIVE SHARES. ONCE THIS DISCUSSION IS VIEWED CONJUNCTIVELY WITH THE CHART ENCLOSED IT SHOULD ADDRESSED TO THE SATISFAC TION OF THE AUTHORITIES THE SO-CALLED DISCREPANCY OF BIFURCATION PIN-POINTED. THEREFORE ACCORDING TO THE LD. COUNSEL ON EXAMINATION OF LEDGER ACCOUNTS AT LESS IN THE CASE S WHERE BIFURCATIONS HAVE TAKEN PLACE COMING TO THE FINDING THAT A THROUGH OPENING AND CLOSING BALANCES DO NOT MATCH WHEREAS THE ACTUALLY ONCE THE AGGREGATE OF B IFURCATION IS LINKED WITH THE ROOT THE ENTIRE BIFURCATION WILL MATCH. AFTER GOING THRO UGH THE CHART EXPLAINING DISCREPANCY WE FIND THAT THE SAME WAS BEFORE LOWER AUTHORITIES AND NOW THE REVENUE COULD NOT POINT OUT ANY DEFECT. EVEN WE ARE OF THE VIEW THAT THE ASSESSEE HAS SATISFACTORY EXPLAIN THE SO-CALLED DEFECTS BY R ECONCILING THE SAME WITH THE DOCUMENTARY EVIDENCES SUCH AS THE SALE DEEDS. IN VI EW OF THESE FACTS WE ARE OF THE VIEW THERE IS NO REASON TO REJECT THE BOOK RESULTS AND THE LOWER AUTHORITIES HAVE ERRED IN DOING THE SAME. WE ACCEPT THE BOOK RESULTS . 8. AS REGARDS TO THE ISSUE ON MERITS THE ASSESSEE REPLIED THAT ADMITTEDLY FURNISHING OF 5402 SQ.FT. ON 14-12-2007 WAS AN ERRO R IN SUBMITTING DETAILS BY THE ASSESSEE AS IT WAS FURNISHED IN HASTE AND CORRECTE D THE ERROR THAT MAY BE READ AS 4164 SQ.FT. INSTEAD OF 5402 SQ.FT. THE ASSESSEE ALS O BROUGHT ANOTHER INSTANCE CITED IN RESPECT OF SHOPS SOLD BEARING SHOP NO.4225 AND 4 226 TO SURAT ADATIYA KAPADA ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 7 ASSOCIATION (SAKA IN SHORT) ONLY FOR RS.450000 INST EAD OF THE MARKET RATE OF RS.632060/- AS SPECIAL DISCOUNT RATE WAS OFFERED T O SAKA IT BEING ONE OF THE IMPORTANT TEXTILE TRADE ASSOCIATION. APART FROM THI S THERE IS NO OTHER EVIDENCE TO SUBSTANTIATE THE SUPPRESSION. HE FURTHER EXPLAINED THAT THE NEXT REFERENCE TO A/102 AD MEASURING 96 SQ.FT. TO ONE SMITI NAGJIBHAI VARHA NI (MINOR) FOR RS.60000 WHICH WORKS OUT TO BE RS.625 PER SQ.FT. AGAINST THE COST PER SQ.FT. OF RS.3825 PER SQ.FT. ACCORDING TO HIM THIS PARTICULAR SHOP HAD TO BE SO LD AT THROW AWAY PRICES BECAUSE THE LOCATION OF THIS SMALL AREA OF 96 SQ.FT. HAS BE EN UNDER THE STAIRS AND ONE IS REQUIRED TO STOOP DOWN TO ENTER THE SHOP ON ACCOUNT OF THE TRIANGLE BEING CREATED WITHIN THE SHOP DUE TO THE STAIRS. THE ASSESSING O FFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND COMPARING THE SELLI NG RATE WITH THE SALE TRANSACTION MADE WITH SPCOBL DETERMINED SUPPRESSION OF SELL AT RS.3 01 58 459/- BY MAKING ESTIMATES. AGGRIEVED ASSESSEE PREFERRED APPEAL BEF ORE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN DE TERMINING SUPPRESSION OF SALE AS DISCUSSED ABOVE EXACTLY ON THE SAME REASONING AS GI VEN BY THE ASSESSING OFFICER. AGGRIEVED THE ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 9. BEFORE US THE LD. SR-COUNSEL FOR ASSESSEE SHRI J.P. SHAH STATED THAT THE ASSESSING OFFICER HAS BROUGHT OUT THREE INSTANCES F OR TREATING THE SALE OF SHOPS ON SUPPRESSED RECEIPTS OR ON-MONEY RECEIPTS. HE STATE D THAT THE FIRST INSTANCE BEING SHOPS SOLD TO SAKA FOR A SUM OF RS.4.50 LAKHS FOR S HOP NO.4225 AND 4226 AS AGAINST THE MARKET RATE OF RS.6 32 060/-. IT WAS S TATED THAT FOR THE TEXTILE MARKET TO BECOME SUCCESSFUL IT IS ESSENTIAL THAT THE ASSESSE E ESTABLISHES PRESENCE OF AN IMPORTANT ASSOCIATION WITHIN THE MARKET PREMISES SO THAT PROSPECTIVE CUSTOMERS WOULD GET CONFIDENCE FOR ESTABLISHING SHOPS IN THE MARKET AND CONSIDERING THIS FACT A SPECIAL DISCOUNT WAS OFFERED TO SAKA. ACCORDING TO HIM THERE IS NO OTHER EVIDENCE TO SUBSTANTIATE THE SUPPRESSION OF SALE PRICE. HE STATED THAT ONE MORE REFERENCE WAS MADE BY THE ASSESSING OFFICER REGARDING ONE SMA LL SHOP OF 96 SQ.FT. SOLD TO ONE SMITI NAGJIBHAI VARHANI (MINOR) FOR RS.60 000/- THE PRICE IN TERMS OF SQ.FT. WORKED OUT AT RS.625/- AS AGAINST THE COST INCURRED BY THE AS SESSEE PER SQ.FT. AT RS.3825 PER ST.FT. LD. COUNSEL FOR THE ASSESSEE STATED THAT TH IS PARTICULAR SHOP HAD TO BE SOLD AT THROW AWAY PRICE DUE TO ITS LOCATION SMALL AREA AN D PARTICULARLY THIS WAS UNDER THE STAIR CASE AND ONE IS REQUIRED TO STOOP DOWN TO ENT ER THE SHOP ON ACCOUNT OF TRIANGLE CREATED WITHIN THE SHOP DUE TO STAIR CASE. LD. COU NSEL FOR THE ASSESSEE MAINLY ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 8 ARGUED THAT THE REVENUES MAIN PLEA WITH RESPECT TO DISCREPANCY IN RESPECT OF PROPERTY SOLD TO SPCOBL FIRST OF ALL HE STATED TH AT THERE WAS AN ERROR IN FURNISHING INFORMATION BY THE ASSESSEE WHEREIN IT IS MENTIONE D THAT THE AREA SOLD WAS 5402 SQ.FT. WHEREAS THE SAME WAS ONLY 4164 SQ.FT. HE ST ATED THAT THE SELLING RATE SPCOBL WAS 3242 PER SQ.FT. FOR THE SECOND FLOOR AS AGAINST THE ASSESSEE HAS SOLD OTHER SHOPS ON SECOND FLOOR AT RS.1859 PER SQ.FT. A ND ACCORDING TO AO THERE IS SUPPRESSION OF SALE PRICE AT RS.1383 PER SQ.FT. AND AS PER CHART THE COMPLETE DETAILS AS REPRODUCED BELOW IN PARA- OF THIS ORDER WHICH IS REPRODUCED FROM THE ASSESSMENT ORDER. HE STATED THAT THIS IS ACTUAL A SOLITARY TRANSACTION BY VIRTUE OF WHICH THE ASSESSING OFFICER HAS ADOPTED A BENCH-MAR K RATE OF 3242 TO 4654 PER SQ.FT. FOR ALL THE FLOOR AS MENTIONED IN THE ABOVE CHART. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE CASE LAW OF HONBLE APEX COURT IN T HE CASE OF CIT V. CALCUTTA DISCOUNT CO. LTD. (1973) 91 ITR 8 (SC) AND STATED THAT THERE IS NO MA TERIAL BEFORE THE AO BY VIRTUE OF WHICH HE CAN TREAT THE SUPPRESSION OF SAL E PRICE OF SHOPS JUST ON THE BASIS OF ONE SOLITARY INSTANCE OF SPCOBL. HE STATED THAT THE AO HAS NEVER TRIED TO BRING ON RECORD COMPARABLE INSTANCES OF SALE IN THE LOCAL ITY AND ALSO THIS PROPERTY WAS NOT REFERRED TO DISTRICT VALUATION OFFICER FOR FINDING OUT THE FAIR MARKET PRICE OF THE SHOPS ON THE DATE OF SALES. HE STATED THAT EVEN THE PURCH ASERS OF SHOPS HAVE NOT BEEN EXAMINED VIS--VIS THE PRICE PAID BY THEM AND PRICE PAID BY SPCOBL AND ACCORDINGLY HE STATED THAT THE RATIO LAID DOWN BY HONBLE APEX COURT IN THE CASE OF CALCUTTA DISCOUNT CO. LTD. (SUPRA) CLEARLY ESTABLISHES THAT UNLESS THE ITO O N THE BASIS OF MATERIAL BEFORE HIM IS ABLE TO COME TO CON CLUSION THAT THE ASSESSEE HAD REALLY MADE PROFITS IN THE TRANSACTIONS IT IS NOT PERMISSIBLE FOR HIM TO ADD BACK TO THE ASSESSEES RETURNED INCOME ANY FRACTION OF INCOME A ND HE ALSO REFERRED TO THE DECISION OF HONBLE APEX COURT IN THE CASE OF K.P.VARGHESE V. ITO (1981) 131 ITR 597 (SC) AND JURISDICTIONAL HIGH COURT IN THE CASE OF MARGHABHAI KISHABHAI PATEL & CO. V CIT (1997) 108 ITR 54 (GUJ) SRI RAMALINGA CHOODAMBIKAI MILLS LTD. V CIT (1955) 28 ITR 952 (MAD). HE ALSO REFERRED TO THE L ATEST DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT V. B.N. CORPORATION (2000) 245 ITR 238 (GUJ) WHEREIN THE HONBLE HIGH COURT HAS ANSWERED THE FOL LOWING QUESTION:- (1) WHETHER THE TRIBUNAL IS RIGHT IN LAW AND ON FA CTS IN DELETING HE ADDITION OF RS.6 24 000 IN RESPECT OF SALE OF 5 FLATS? THE HONBLE HIGH COURT HAS HELD AS UNDER:- ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 9 4. SO FAR AS THE FIRST QUESTION IS CONCERNED IT A PPEARS THAT SALE PROCEEDS OF 5 FLATS WHICH IS SUBJECT-MATTER OF THE SAID QUESTION CANNOT BE TREATED AS INCOME OF THE ASSESSEE FOR THE PERIOD IN QUESTION F OR THE REASON THAT DURING THE SEARCH THERE WAS NO EVIDENCE WITH REGARD TO SAL E OF 5 FLATS AND THEREFORE ADDITION OF RS.6.24 LACS WAS RIGHTLY DELETED BY THE TRIBUNAL. IT IS NOT IN DISPUTE THAT AT THE TIME OF SEARCH IT WAS FOUND THAT 40 FLA TS WERE SOLD BY THE RESPONDENT-ASSESSEE AND THE ON MONEY WHICH WAS RE CEIVED BY THE RESPONDENT-ASSESSEE WAS TAXED BY THE APPELLANT DEPA RTMENT. AS THERE IS NO EVIDENCE WITH REGARD TO SALE OF 5 FLATS REFERRED TO IN THE SAID QUESTION AND AS THE APPELLANT DEPARTMENT COULD NOT SOW ANYTHING WIT H REGARD TO RECEIPT OF ANY AMOUNT TOWARDS SALE PROCEEDS OF THE SAID 5 FLATS DU RING THE PERIOD IN QUESTION IN OUR OPINION NO QUESTION OF LAW ARISES . 10. ON THE OTHER HAND LD. CIT-DR SHRI S.R. MALIK RELIED ON THE DISCREPANCIES NOTED BY THE ASSESSING OFFICER IN HIS ASSESSMENT OR DER AND AS NARRATED ABOVE HE HEAVILY RELIED ON THE INSTANCE OF SPCOBL AND STATED THAT THIS IS THE BENCH MARK FOR TAKING SELLING RATE AND THAT WAS THE ACTUAL FAIR MA RKET PRICE OF THE PROPERTY. HE STATED THAT THE ORDERS OF THE LOWER AUTHORITIES ARE PERFECTLY AS PER LAW AND SHOULD BE SUSTAINED. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND GOING T HROUGH THE CASE RECORDS INCLUDING ORDER OF CIT(A) ASSESSMENT ORDER ARGUME NTS OF BOTH THE SIDES AND THE CASE LAWS RELIED ON. THE ABOVE FACTS ARE UNDISPUTED AND IT IS A FACT THAT THE ASSESSEE-FIRM HAS SOLD ONE HALL OF 4164 SQ.FT. TO S PCOBL @ 3242/- ON SECOND FLOOR. THE ASSESSING OFFICER TAKING BENCH-MARK HAS POINTED OUT SUPPRESSION OF SELLING RATE AT 1383 PER SQ.FT. FROM GROUND FLOOR TO SECOND FLO OR AND THE RELEVANT CHART IS BEING AGAIN REPRODUCED AS UNDER:- SOLD AREA IN SQ.FT. DURING THE YEAR SELLING RATE AS SHOWN BY THE ASSESSEE SUPPRESSION OF SELLING RATE AS EVIDENCED BY SALE DEED OF SURAT P.COOP. BANK SELLING RATE OUGHT TO BE TOTAL SUPPRESSION OF SALE PRICE DURING THE YEAR LOWER GROUND FLOOR 4956.55 3271 1383 4654 6854909 U.G.F. 3650 3741 1383 5124 5047950 ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 10 F.F 2210 2565 1383 3948 3056430 S.F. 10990 1859 1383 3242 15199170 TOTAL 30158459 WE FIND FROM THE ABOVE THAT THE ASSESSING OFFICER A S WELL AS CIT(A) HAS RELIED ON ONE INSTANCE I.E. THE RATE OF SELL AS PER SALE DE ED OF SPCOBL. THE ASSESSING OFFICER HAS NOT REFERRED THE INDIVIDUAL SHOPS SOLD BY THE ASSESSEE TO THE DVO FOR ASCERTAINING THE FAIR MARKET VALUE OF EACH SHOP SOL D. EVEN THE AO HAS NOT EXAMINED THE PARTIES TO WHOM THE ASSESSEE-FIRM HAS SOLD THE SHOPS AND EVEN THE SALE DEEDS WERE NOT CALLED FOR AND EXAMINED. THE AO HAS NEVER TRIED TO ENQUIRE INTO THE CIRCLE RATES FIXED BY THE SUB-REGISTRAR OF THE AREA FOR TH E PURPOSES OF STAMP DUTY VALUATION. IN VIEW OF THESE FACTS NOW THE QUESTION ARISES IS AS UNDER:- WHETHER IN THE GIVEN FACTS AND CIRCUMSTANCES THE ADDITION MADE BY TAKING THE SUPPRESSION OF SALE RECEIPTS BY THE ASSESSING O FFICER ON THE BASIS OF SOLITARY TRANSACTIONS ENTERED BY THE ASSESSEE-FIRM WITH THE SURAT PEOPLES CO- OPERATIVE BANK LTD. CAN BE SUSTAINED OR NOT? THE ABOVE FACTS NARRATED ARE UNDISPUTED. ALL THE S HOPS SOLD BY THE ASSESSEE-FIRM ARE REGISTERED WITH THE SUB-REGISTRAR AND SALE DEED S ARE MADE FOR THESE TRANSACTIONS. THE ASSESSING OFFICER HAS SIMPLY REJ ECTED THE SALE DEEDS AND ADOPTED A HIGHER SALE CONSIDERATION FOR THE PURPOSES OF COM PUTING INCOME OF THE ASSESSEE- FIRM FROM THE BUSINESS OF CONSTRUCTION AND SALE OF COMMERCIAL COMPLEX. WE FURTHER FIND THAT THE ALLEGATION OF THE ASSESSING OFFICER T HAT THE SHOPS ARE SOLD BELOW THE CONSTRUCTION COST IN TERMS OF SQ. FT. THIS ALLEGAT ION IS WITHOUT ANY BASIS AND THE LD. COUNSEL FOR THE ASSESSEE BEFORE US HAS DEMONSTRATED THAT THE COST OF CONSTRUCTION IS LESSER THAN THE SALE CONSIDERATION OF EACH SHOP IN TERMS OF SQ. FT. THESE PURCHASERS OF SHOPS HAVE DECLARED FULL VALUE OF CONSIDERATION IN THE SALE DEEDS REGISTERED AND THERE IS NO UNDER STATEMENT OF THE CONSIDERATION IN RESPECT OF SALE OF THESE SHOPS. WE FIND THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE-FIRM HAS NOT ENTERED INTO HONEST TRANSACTIONS AND TRANSACTIONS ARE FOR O THER CONCEIVABLE REASONS I.E. FOR ATTEMPTING TO AVOID OR REDUCE TAX LIABILITY AND THE Y ARE NOT RECORDING ACTUAL CONSIDERATION. WE FEEL THAT IT IS QUITE POSSIBLE T HAT THOUGH THE FAIR MARKET VALUE OF A PARTICULAR SHOP IS HIGH THE ASSESSEE MAY TRANSFER IT TO A PERSON DIRECTLY OR INDIRECTLY CONNECTED WITH HIM FOR A NOMINAL SUM FOR MORE THAN ONE REASON AND SUCH REASONS CANNOT PER-TAKE OF THE OBJECT OF AVOIDING OR REDUCI NG THE TAX LIABILITY OF THE ASSESSEE- ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 11 FIRM. THE HONBLE MADRAS HIGH COURT IN THE CASE OF SIVAKAMI CO. PVT. LTD. V. CIT (1973) 88 ITR 311 (MAD) HAS HELD THAT THE BURDEN OF PROVING THAT CERTAIN SALES WERE EFFECTED WITH THE OBJECT OF AVOIDANCE OR REDUCTION OF TAX ON CAPITAL GAINS IS ON REVENUE AND IT IS NOT ENOUGH IN THE EXPLANATION OFF ERED BY THE ASSESSEE WAS NOT ACCEPTABLE AND THERE ARE STRONG SUSPICION AS TO THE REAL MOTIVE WHICH PROMPTED THE ASSESSEE TO SELL THE ASSETS. THERE MUST BE SOMETHI NG POSITIVE TO SUGGEST THAT THE SALES WERE EFFECTED WITH THE OBJECT OF AVOIDANCE OR REDUCTION OF TAX LIABILITY FOR CAPITAL GAINS AND THIS WAS AFFIRMED BY HONBLE APEX COURT I N (1986) 159 ITR 71 (SC). WE ARE OF THE VIEW THAT UNLESS THERE IS EVIDENCE THAT MORE THAN WHAT IS STATED IN THE DOCUMENTS OR WAS RECEIVED NO HIGHER PRICE CAN BE T AKEN TO BE THE BASIS FOR COMPUTATION OF TAX EITHER IN BUSINESS TRANSACTION O R CAPITAL GAIN TRANSACTIONS. THE ENTIRE ONUS IS ON REVENUE AND THE INFERENCES MIGHT BE DRAWN IN CERTAIN CASES BUT COME TO A CONCLUSION THAT A PARTICULAR HIGHER AMOUN T WAS IN FACT RECEIVED MUST BE BASED ON SUCH MATERIAL FROM WHICH SUCH AN IRRESISTI BLE CONCLUSION FOLLOWS. IN OUR CONSIDERED VIEW IN THE PRESENT CASE THE REVENUE C OULD NOT LAY PRIMARY FACTS FROM WHICH INFERENCE CAN BE DRAWN THAT THE FULL CONSIDER ATIONS RECORDED BY ASSESSEE-FIRM IN ITS ACCOUNT AND THE SALE DEEDS IS NOT THE FULL C ONSIDERATION OR THE ACTUAL PRICE RECEIVED BY THE ASSESSEE FOR THE TRANSFER OF SHOPS WERE THE UNDER-STATED PRICE. 12. FURTHER THE HONBLE APEX COURT WHILE INTERPRETI NG SEC. 52(2) OF THE ACT IN THE CASE OF K.P.VARGHESE (SUPRA) HAS LAID DOWN THE RATIO IN REGARD TO FULL VALUE OF CONSIDERATION AS IT CLEARLY INDICATES THAT THE FOCUS OF SECTION 52(2) OF THE ACT IS ON THE CONSIDERATION DECLARED OR DISCLOSED BY THE ASSE SSEE AS DISTINGUISHED FROM THE CONSIDERATION ACTUALLY RECEIVED BY HIM. IT CONTEMPL ATES WHERE THE CONSIDERATION RECEIVED BY THE ASSESSEE IN RESPECT OF THE TRANSFER IS NOT TRULY DECLARED O DISCLOSED BY HIM BUT IS SHOWN AT A DIFFERENT FIGURE. THIS OF COURSE IS A VERY SMALL FACTOR AND BY ITSELF OF LITTLE CONSEQUENCES BUT ALONG WITH THE OT HER FACTORS APPEARING IN SECTION 52(2) OF THE ACT IT ASSUMES SAME SIGNIFICANCE AS T HROWING LIGHT ON THE TRUE INTENT OF SECTION 52(2) OF THE ACT. THE WORD DECLARED USED IN SEC. 52(2) OF THE ACT WILL NOT APPLY TO A CASE WHERE ASSESSEE HAS NOT RECEIVED ANY EXTRA AMOUNT OVER AND ABOVE WHAT IS SHOWN IN THE TRANSACTION BETWEEN THE PARTIE S. IN THE PRESENT CASE BEFORE US NO DOUBT PERTAINS TO COMPUTATION OF BUSINESS INCOME BUT THE PRINCIPLE APPLIES IN THE SAME WAY AS SEC. 52(2) OF THE ACT INTERPRETED BY HO NBLE APEX COURT IN THE CASE OF K.P.VARGHESE (SUPRA). IN THESE CIRCUMSTANCES WE DELETE THE ADD ITION AND REVERSE ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 12 THE ORDERS OF THE LOWER AUTHORITIES. THESE INTER-C ONNECTED ISSUES OF THE ASSESSEES APPEAL WITH RESPECT TO REJECTION OF BOOK RESULTS A ND ON MERITS ARE ALLOWED. 13. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING ADDITION OF SALES RETURNS. FOR THIS ASSESSEE HAS RAISED FOLLOWING GROUND (IV) :- (IV) ADDITION OF RS.8 11 000/- IN RESPECT OF SALE RETURN:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) WAS NOT JUSTIFIED IN NOT DELETING THE AFOREMENTIONED AMOUNT. (2) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSI ONER OF INCOME-TAX (APPEALS) HAS NOT PROPERLY APPRECIATED THE FACTUAL ASPECTS OF THE CASE IN CONFIRMING THE ADDITION. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASES. WE FIND THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AFTER GOING THROUGH THE BOOK S OF ACCOUNT NOTED THAT THERE IS DISCREPANCY IN THE OPENING AND CLOSING BALANCES OF VARIOUS DEPOSITS OF CUSTOMERS. ACCORDINGLY HE REQUIRED THE ASSESSEE TO EXPLAIN. THE ASSESSEE STATED THAT THE BIFURCATION OF DEPOSITS INTO MORE THAN ONE DEPOSIT IS AS A RESULT OF BIFURCATION OF BOOKING IN ONE NAME CONVERTED INTO MORE THAN ONE N AME AND THIS PRACTICE IS NORMAL IN PROPERTY TRANSACTIONS. THE ASSESSING OFFICER AS WELL AS CIT(A) HAS NOT BELIEVED THE EXPLANATION AND ADDITION WAS CONFIRMED. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE STATED THE FACT FROM A DETAILED CHART ENCL OSED IN ASSESSEES PAPER BOOK ENTAILING PARTICULARS OF NAME OF DEPOSITORS AMOUNT RECEIVED FROM THE SAME AMOUNT BIFURCATED INTO VARIOUS SHOPS AMOUNT APPROPRIATED TOWARDS SALES BOOKING AMOUNT REFUNDED WHERE APPLICABLE AND HOST OF OTHER DETAIL S THAT CLEARLY GIVE TRAIL RIGHT FROM 01-04-2002 UNTIL THE CURRENT ASSESSMENT YEAR. THE L D. COUNSEL FOR THE ASSESSEE EXPLAINED IN BRIEFLY THE MODALITY OF BIFURCATION OF SHOPS BY GIVING AN EXAMPLE AN INDIVIDUAL MAY DEPOSIT X SUM FOR BOOKING CERTAIN NUMBER OF SHOPS. AT A LATER SAGE HE MAY REQUEST TO BIFURCATE THE DEPOSIT INTO THE NA MES OF MORE THAN ONE PERSON. WHO COULD BE FAMILY MEMBERS OR GROUP CONCERNED OF T HAT INDIVIDUAL AND AS SUCH X GETS DIVIDEND INTO X/N WHERE N WOULD REPRESENT NUMBER OF PERSONS BASED ON RESPECTIVE SHARES. ONCE THIS DISCUSSION IS VIEWED C ONJUNCTIVELY WITH THE CHART ENCLOSED IT SHOULD ADDRESSED TO THE SATISFACTION O F THE AUTHORITIES THE SO-CALLED DISCREPANCY OF BIFURCATION PIN-POINTED. THEREFORE ACCORDING TO THE LD. COUNSEL ON ITA NO.496/AHD/2009 A.Y 2005-06 M/S SHANTI ENTERPRISE V. ACIT RNG-2 SRT PAGE 13 EXAMINATION OF LEDGER ACCOUNTS AT LESS IN THE CASE S WHERE BIFURCATIONS HAVE TAKEN PLACE COMING TO THE FINDING THAT A THROUGH OPENING AND CLOSING BALANCES DO NOT MATCH WHEREAS THE ACTUALLY ONCE THE AGGREGATE OF B IFURCATION IS LINKED WITH THE ROOT THE ENTIRE BIFURCATION WILL MATCH. IN VIEW OF THES E ARGUMENTS LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ENTIRE DETAILED CHART PAGE 1 TO 30 RIGHT FROM THE PERIOD 01- 04-2002 TO 31-03-2005 CAN BE VERIFIED IN CASE THIS ISSUE IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 15. AFTER HEARING THE LD. COUNSEL FOR THE ASSESSEE THE LD. CIT-DR HAS NOT OBJECTED FOR VERIFICATION OF THESE DETAILS TO THE F ILE OF THE ASSESSING OFFICER. IN PRINCIPLE WE ARE IN FULL AGREEMENT WITH THE VIEW O F LD. COUNSEL FOR THE ASSESSEE THAT THE BIFURCATION OF BOOKING IN ONE NAME CONVERTED I NTO MORE THAN ONE AND BIFURCATING THE AMOUNTS ALSO IS NOT UNUSUAL IN PROPERTY TRANSAC TIONS. AS IN THE ISSUE OF REJECTION OF BOOK RESULTS WE HAVE ALREADY ACCEPTED THE DISCR EPANCIES EXPLAINED BY THE ASSESSEE BY WAY OF RECONCILIATION THE DIFFERENCE I N CLOSING BALANCES OF ACCOUNTS AND OPENING BALANCES OF NEXT YEAR IS DELETED. 16. IN THE RESULT ASSESSEES APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN OPEN COURT ON 22/02/2011 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 22/02/2011 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-II SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD