ACIT CEN CIR 25, MUMBAI v. METRO CONSTRUCTION COMPANY, NAVI MUMBAI

ITA 4811/MUM/2010 | 2005-2006
Pronouncement Date: 10-07-2013 | Result: Dismissed

Appeal Details

RSA Number 481119914 RSA 2010
Assessee PAN AAHFM6208R
Bench Mumbai
Appeal Number ITA 4811/MUM/2010
Duration Of Justice 3 year(s) 1 month(s)
Appellant ACIT CEN CIR 25, MUMBAI
Respondent METRO CONSTRUCTION COMPANY, NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 10-07-2013
Date Of Final Hearing 20-06-2013
Next Hearing Date 20-06-2013
Assessment Year 2005-2006
Appeal Filed On 10-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH MUMBAI . !' !' !' !' #$ %& #$ %& #$ %& #$ %& ' ' ' ' ( ( ( ( BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER . / ITA NO. 4811/MUM./2010 ( '* + ' + / ASSESSMENT YEAR : 200809 ) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25 AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400 020 .. -. / APPELLANT * V/S M/S. METRO CONSTRUCTION COMPANY E3/1:2 SECTOR1 VASHI NAVI MUMBAI 400 703 .... /0-. / RESPONDENT - . / PERMANENT ACCOUNT NUMBER AAHFM6208R . / ITA NO. 4027/MUM./2010 ( '* + ' + / ASSESSMENT YEAR : 200809 ) M/S. METRO CONSTRUCTION COMPANY E3/1:2 SECTOR1 VASHI NAVI MUMBAI 400 703 .. -. / APPELLANT * V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE25 AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400 020 .... /0-. / RESPONDENT - . / PERMANENT ACCOUNT NUMBER AAHFM6208R ' 2 3 / ASSESSEE BY : MS. RITIKA AGARWAL '* +4$ 2 3 / REVENUE BY : MR. S.D. SRIVASTAVA *' 2 $ / DATE OF HEARING 20.06.2013 % 5 2 $ / DATE OF ORDER 10.07.2013 M/S. METRO CONSTRUCTION COMPANY 2 % % % % / ORDER #$ %& #$ %& #$ %& #$ %& ' ' ' ' 6 6 6 6 / PER AMIT SHUKLA J.M. THESE CROSS APPEALS ARE PREFERRED BY THE EITHER PAR TY CHALLENGING THE IMPUGNED ORDER DATED 11 TH MARCH 2010 PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXXIX MUMBAI FOR THE QUANTUM OF ASSESSM ENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (FOR SHO RT THE ACT ) FOR THE ASSESSMENT YEAR 200809. WE FIRST PROCEED TO DISPOSE OFF THE REVENUES APPEAL IN ITA NO.4027/MUM./ 2010 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF ESTIMATED ON MONEY RECEIVED ON SALE OF F LATS AND UNACCOUNTED INCOME WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. FACTS IN BRIEF : THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING O F FIVE PARTNERS WHICH IS ENGAGED IN THE BUSINESS OF REAL E STATE DEVELOPERS AND CONSTRUCTION ACTIVITY SINCE 30 TH JANUARY 2003. THE ASSESSEE HAS CONSTRUCTED TWO RESIDENTIAL BUILDING ONE TULSI GAGAN A PROJECT WHICH WAS COMPLETED BY THE YEAR ENDING ON 31 ST MARCH 2007 AND THE OTHER TULSI PRERNA WHICH WAS UNDER PROGRESS AND WAS COMPLETED BY THE YEAR EN DING ON 31 ST MARCH 2009. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) WAS CARRIED OUT AT THE RESIDENTIAL / BUSINESS PREMISES OF THE METRO GROUP OF CASES ON 5 TH JUNE 2007. THE ASSESSEE WAS ALSO A PART OF THE SEARCH AN D SEIZURE OPERATION UNDER SECTION 132((1). IN PURSUANCE OF SUCH A SEARC H AND SEIZURE ACTION THE ASSESSEE FIRM DECLARED A SUM OF ` 7.50 CRORES VIDE LETTER DATED 31 ST JULY 2007 IN THE FOLLOWING MANNER: 8. IN ACTION UNDER SECTION 132 THE ASSESSEE FIRM H AS DECLARED A SUM OF ` 7.50 CRORES VIDE LETTER DATED 31.7.2007 AS UNDER: WE ARE FOLLOWING COMPUTED PROJECT METHOD OF ACCOU NTING FOR CONSTRUCTION PROJECT. WE HAVE COMPLETED PROJECT TU LSI GAGAN IN THE YEAR ENDED 31.3.2007 AND TULSI PRERNA IN T HE YEAR ENDED 31.3.2008. THE ESTIMATED INCOME IN PROJECT TU LSI GAGAN M/S. METRO CONSTRUCTION COMPANY 3 IS APPROXIMATELY ` 2 50 00 000 AND THE ESTIMATED INCOME IN PROJECT TULSI PRERNA IS APPROXIMATELY ` 5 00 00 000. WE CONFIRM THAT WE WILL DECLARE AN INCOME OF ` 7 50 00 000 IN THE RETURN OF INCOME TO BE FILED BY US FOR A.Y. 200708 AND 2008 09 RESPECTIVELY. 3. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CERTAIN PAPERS WERE FOUND AND SEIZED WHICH REFLECTED THAT THE ASSESSEE HAS RECEIVED ONMONEY ON THE SALE OF FLATS INASMUCH AS THERE WAS DISCREPA NCY IN THE AGREEMENT RATE AND THE ACTUAL RATE OF SALE. BASED ON SUCH SEIZED P APERS THE ASSESSEE WORKED OUT ONMONEY FOR VARIOUS FLATS AT ` 1.81 CRORES AND OFFERED FOR TAXATION. THE SEIZED MATERIAL ON WHICH ONMONEY WAS OFFERED WAS IN RESPECT OF 39 FLATS THE DETAILS OF WHICH HAVE BEEN INCORPO RATED AT PARA10 OF THE ASSESSMENT ORDER AS WELL AS PARA3.2 OF THE LEARNED COMMISSIONER (APPEALS)S ORDER. THE ASSESSING OFFICER WHILE CAR RYING OUT THE SCRUTINY PROCEEDINGS FOR THE YEAR OF SEARCH UNDER SECTION 14 3(3) OBSERVED THAT THE ASSESSEE HAS DECLARED THE ONMONEY ONLY ON THE FLA TS WHICH WERE NOTED IN THE SEIZED PAPERS AND THE DETAILS OF THE FLATS WHIC H WERE NOT APPEARING IN THE SEIZED PAPERS HAS NOT BEEN CONSIDERED BY THE ASSESS EE FOR THE PURPOSE OF DECLARATION OF ONMONEY. THUS HE CONCLUDED THAT TH E RECEIPT OF ONMONEY IN RESPECT OF OTHER FLATS WHICH WERE NOT FOUND IN T HE SEIZED PAPERS CANNOT BE RULED OUT. HE FURTHER NOTED THAT THE ASSESSEE HAS B EEN RECEIVING ONMONEY RANGING FROM ` 157 PER SQ.FT. TO ` 800 PER SQ.FT. ACCORDINGLY HE ESTIMATED THE ONMONEY IN RESPECT OF OTHER FLATS AT THE RATE OF ` 500 PER SQ.FT. THE DETAILS OF THESE 37 FLATS HAVE BEEN NOTED BY HIM IN PARA11 OF THE ASSESSMENT ORDER AND THEREBY WORKED OUT THE ESTIMAT ED UNDISCLOSED INCOME ON ACCOUNT OF ONMONEY IN RESPECT OF 37 FLATS AT ` 2 24 32 000. BESIDES THIS HE ALSO NOTED THAT A PAPER WAS ALSO FOUND AND SEIZE D WHICH SHOWS THAT THE ASSESSEE FIRM HAS INFLATED CERTAIN EXPENSES. BASED ON THE ENTRIES IN THE SAID SEIZED PAPER NUMBERED AS A1 / PAGE71 HE ADDED THE SUM OF ` 34 16 640. 4. BEFORE THE LEARNED COMMISSIONER (APPEALS) THE ASSE SSEE SUBMITTED THAT DURING THE COURSE OF SEARCH CERTAIN PAPERS WE RE FOUND WHICH SUGGESTED THAT IN SOME CASES THERE WAS DISCREPANCY IN THE SAL E AGREEMENT RATE AND M/S. METRO CONSTRUCTION COMPANY 4 ACTUAL SALE RATE OF THE FLATS. THUS IN ORDER TO BU Y PEACE AND WITH A VIEW TO AVOID PROTRACTED LITIGATION THE ASSESSEE DECLARED THE SUM AS ONMONEY OF ` 1.81 CRORES IN RESPECT OF 39 FLATS AS NOTED IN THE SEIZED PAPER. THE ASSESSING OFFICER DID NOT FIND ANY DISCREPANCY IN THE AMOUNT SO DECLARED AND THEREBY ACCEPTED THE DISCLOSURE MADE BY THE ASSESSEE VISA VIS THE 39 FLATS. BEYOND THIS THE ASSESSING OFFICER HAS COMPLETELY ERRED IN LAW AND ON FACTS IN MAKING FURTHER ADDITION OF ` 2 24 32 000 ON ACCOUNT OF ONMONEY WHICH WAS PURELY BASED ON PRESUMPTION AND SURMISES WITHOU T ANY MATERIAL ON RECORD. IT WAS SUBMITTED THAT WHILE MAKING AN ASSES SMENT UNDER SECTION 143(3) PURE GUESS WORK BASED ON SURMISES CANNOT BE MADE BASIS FOR ASSESSMENT WITHOUT ANY REFERENCE TO ANY MATERIAL OR EVIDENCE. RELIANCE WAS PLACED ON A CATENA OF CASES WHICH HAS BEEN LISTED A T PAGE9 OF THE APPELLATE ORDER. FURTHER RELIANCE WAS ALSO PLACED ON THE DECI SION ALLAHABAD BENCH OF THE TRIBUNAL IN R.M.L. MEHROTRA V/S JCIT 68 ITD 28 8 (ALL.) AND THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S M.K .E. MENON [2000] 112 TAXMAN 96 (BOM.). IN BOTH THESE JUDGMENTS IT HAS B EEN HELD THAT WHILE COMPUTING THE UNDISCLOSED INCOME ESTIMATION CANNOT BE RESORTED TO. VARIOUS OTHER JUDGMENTS WERE ALSO RELIED UPON WHICH WERE MO STLY RENDERED IN THE CONTEXT OF BLOCK ASSESSMENT PROCEEDINGS. 5. BESIDES VARIOUS LEGAL CONTENTIONS THE ASSESSEE SUB MITTED THAT IN RESPECT OF 37 FLATS ON WHICH THE ASSESSING OFFICER HAS ESTIMATED THEY WERE FOUND TO BE IN CONFORMITY WITH THE SALE AGREEMENT V ALUE WHICH WAS MOSTLY ON A MUCH HIGHER RATE EVEN AFTER ADDING THE COST OF ONMONEY. ONE OF THE MOST IMPORTANT ARGUMENTS WHICH WERE RAISED WAS THAT THE SALE OF FLATS DEPENDS UPON VARIOUS FACTORS AND SALE RATES CANNOT BE UNIFORM IN CASE OF REAL ESTATE DUE TO FOLLOWING FACTORS: A) FLATS WITH WEST OPEN WOULD NORMALLY FETCH A H IGHER PRICE AS SUCH FLATS ARE BREEZIER THEN THE OTHER FLATS. B) FLATS ON HIGHER FLOORS WOULD NORMALLY FETCH A HI GHER PRICE THEN THE FLATS ON LOWER FLOORS. C) FLATS WITH RELATIVELY POOR VENTILATION WOULD FET CH A LOWER PRICE AS COMPARED TO BETTER VENTILATED FLATS. M/S. METRO CONSTRUCTION COMPANY 5 D) FLATS WITH A SEA VIEW OR A GARDEN VIEW OR A TEMPLE VIEW WOULD NORMALLY FETCH A HIGHER PRICE THEN OTHER FLATS. E) FLATS IN ACCORDANCE WITH VAASTU PRINCIPLES WOU LD NORMALLY FETCH A HIGHER PRICE. BUYERS WITH PURCHASING POWER READY TO MAKE A DOWN P AYMENT WOULD HAVE MORE BARGAINING POWER AND CAN DEMAND BETTER TERMS A S COMPARED TO A BUYER WHO IS GOING TO OPT FOR FINANCE AND MAY TAKE LONGER TIME TO MAKE THE PAYMENTS. G) FLATS SOLD AT THE INITIAL STAGES OF CONSTRUCTION WOULD FETCH A LOWER PRICE THEN THE FLATS SOLD AT LATER STAGES OF CONSTRUCTION. H) RATES OF FLATS TEND TO INCREASE POST ANY EVENT S UCH AS ANNOUNCEMENT OF A CONSTRUCTION OF TEMPLE OR A SCHOOL OR A MALL OR SHO PPING CENTRE OR A NEW ROAD OR A BUS STOP ETC. NEAR THE HOUSING PROJECT AND H ENCE FLATS SOLD POST SUCH ANNOUNCEMENT WOULD FETCH A HIGHER PRICE AS COMPARE TO FLATS SOLD EARLIER. I) THE APPELLANT HAS TO CONSIDER REQUESTS FOR REDU CTION OF RATES IN SOME SPECIAL CASES WHERE REFERENCES ARE GIVEN BY VERY IN FLUENTIAL PERSONS. IN SUCH CASES THE RATES AS WHICH THE FLATS ARE SOLD MAY FE TCH LOWER RATES. 6. ANOTHER IMPORTANT FACT WHICH WAS BROUGHT TO THE NOT ICE OF THE LEARNED COMMISSIONER (APPEALS) WAS THAT THERE WERE CERTAIN OTHER INSTANCES OF SALE OF 10 FLATS IN WHICH THE VALUE AS PER SALE AGREEMEN T AND WHICH DOES NOT FIND ANY MENTION IN THE SEIZED MATERIAL HAS BEEN ACCEPTE D BY THE ASSESSING OFFICER. THIS FACT HAS BEEN RECORDED IN PARA9 OF T HE LEARNED COMMISSIONER (APPEALS)S ORDER. FURTHER RELIANCE WAS ALSO PLACE D ON THE CBDT INSTRUCTION NO.F.NO.286/2/ 2603IT(INV.-II) DATED 10 TH MARCH 2003 WHEREIN INSTRUCTION HAS BEEN GIVEN TO THE DEPARTMENTAL OFFICIALS TO REF RAIN FROM MAKING ATTEMPTS TO OBTAIN CONFESSION ON UNDISCLOSED INCOME WITHOUT CORROBORATIVE EVIDENCE AND FOCUS SHOULD BE MADE ON EVIDENCE / MATERIAL GAT HERED DURING THE COURSE OF SEARCH. THUS IT WAS PLEADED THAT WITHOUT SEIZED MATERIAL NO ADVERSE INFERENCE SHOULD BE DRAWN. THEREAFTER THE ASSESSEE GAVE ANALYSIS OF THE RATES OF EACH AND EVERY FLAT ON WHICH THE ASSESSING OFFICER HAS ESTIMATED THE ONMONEY ON THE FLATS WHICH DO NOT FIND ANY MENTION IN THE SEIZED MATERIAL AND THE REASONS FOR JUSTIFYING THE SALE RATES. THE SAID STATEMENT OF FLATWISE DETAILS AND THE REASONS HAVE BEEN GIVEN AT PAGES20 TO 27 OF THE APPELLATE ORDER WHICH IS NOT REPEATED HERE BUT HAS A HUGE REL EVANCE IN THIS CASE. THE SUM AND SUBSTANCE OF THE REASONS GIVEN IN RESPECT O F EVERY FLAT WERE THAT (I) THESE FLATS WERE SOLD AT HIGHER RATE AS COMPARE D TO OTHER FLATS ON THE M/S. METRO CONSTRUCTION COMPANY 6 SAME FLOOR THEREFORE THERE COULD NOT BE ANY CASE OF MAKING ANY ADDITION ON ACCOUNT OF ALLEGED ESTIMATE OF ONMONEY. THE ACTUAL SALE RATES WERE BEEN PROVIDED; (II) INSTANCES OF SALE OF FLATS HAVE BEEN GIVEN WHEREIN THE SALE HAS BEEN MADE ON THE SAME RATE; WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER; (III) MOST OF THE FLATS WHICH ARE NOT APPE ARING IN THE LIST OF SEIZED MATERIAL HAVE BEEN SOLD AT A MUCH HIGHER RATE WHIC H IS EVEN HIGHER THAN AFTER ADDING THE COST OF ONMONEY ON THE SALE RATE OF THOSE FLATS WHICH FOUND MENTION IN THE SEIZED MATERIAL; (IV) INSTANCES WERE GIVEN WHERE THE BOOKING HAS BEEN MADE AT THE INITIAL PERIOD I.E. AT THE TI ME OF CONSTRUCTION WHERE THE PRICES WERE LOW AND VARIOUS OTHER INSTANCES HAVE BE EN GIVEN FOR JUSTIFYING THE RATES ON WHICH IT WAS SOLD AND THEREFORE THER E COULD NOT BE ANY CASE OF FURTHER ESTIMATION ON ACCOUNT OF ONMONEY. 7. BASED ON THESE SUBMISSIONS AS WELL AS FACTS AND CIR CUMSTANCES BROUGHT ON RECORD BY THE ASSESSEE THE LEARNED COMM ISSIONER (APPEALS) DELETED THE ADDITION AFTER OBSERVING AND HOLDING AS UNDER: 13. I HAVE CONSIDERED THE FACTS AND SUBMISSIONS. I N THIS CASE DOCUMENTS WERE FOUND DURING THE SEARCH THAT ON MONEY WAS RECEIVE D ON SOME OF THE FLATS SOLD BY THE APPELLANT AND THE APPELLANT HAS OFFERED THE SAME AS INCOME AND PAID THE TAXES. THE A.O. HAS ALSO ACCEPTED THE AMOUNT ARRIVE D BY THE APPELLANT IN THE ASSESSMENT WITH RESPECT TO SUCH FLATS. IT IS ALSO S EEN THAT IN SOME OF THE FLATS MENTIONED IN THE SAME SEIZED MATERIAL THAT THERE WA S NO ON MONEY RECEIVED. 13.1 IN THE ASSESSMENT ORDER THE A.O. HAS STATED TH AT THE ON MONEY RECEIVED ON SUCH FLAT RANGES FROM RS.157/- PER SQ. FT. TO RS .800/- PER SQ.FT. THE A.O. ESTIMATED THE ON MONEY ON OTHER FLATS AT RS.500/- PER SQ.FT. AND ADDED RS.2 24 32 000/-. THE APPELLANT HAS SUBMITTED THAT THER. WAS NO EVIDENCE TO SHOW THAT THE APPELLANT HAS RECEIVED ANY ON MONEY IN THESE FLATS IN WHICH THE A.O. HAS MADE ESTIMATION OF ON MONEY. THE APPELLA NT HAS CONTENDED THAT NO ON MONEY WAS RECEIVED FOR THESE FLATS. THE APPELL ANT HAS ALSO FURNISHED THE COMPARISON TO SHOW THAT THESE FLATS WERE SOLD FOR M ORE PRICE THAN THE PRICES LISTED IN THE SEIZED MATERIAL BASED ON WHICH THE AD DITIONAL INCOME WAS OFFERED AND ASSESSED. 13.2 I FIND THAT THE ADDITION HAS BEEN MADE PURELY ON ESTIMATE BASIS AND IT IS NOT BASED ON ANY EVIDENCE FOUND DURING THE SEARCH P ROCEEDINGS. FROM THE SAME SEIZED MATERIAL ITSELF IT IS SEEN THAT IN SOME OF THE FLATS NO ON MONEY WAS RECEIVED. WHEN IT IS SO IT IS NOT CORRECT ON THE P ART OF THE A.O. TO ESTIMATE THE ON MONEY FOR EVERY FLAT SOLD. THE BOARDS INSTRUC TION REFERRED BY THE APPELLANT ALSO EMPHASIZES THE FACT THAT THE ASSESSMENTS CONSE QUENT TO SEARCH SHOULD BE BASED ON EVIDENCES COLLECTED. IN THESE CIRCUMSTANCE S I AM OF THE VIEW THAT THE ADDITION MADE BY THE A.O. ON ESTIMATE BASIS WITHOUT ANY EVIDENCE CANNOT BE SUSTAINED. I DIRECT THE A.O. TO DELETE THE ADDITION OF RS.2 24 32 000/-. 13.3 GROUND NO.2 IS ALLOWED. M/S. METRO CONSTRUCTION COMPANY 7 8. REGARDING ADDITION ON ACCOUNT OF INFLATED EXPENSES THE SAME HAS BEEN CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS) FOR WHICH THE ASSESSEE HAS COME INTO APPEAL WHICH SHALL BE DEALT WITH WHI LE DISCUSSING THE ASSESSEES APPEAL. 9. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATIVE MR. S.D. SRIVASTAVA ON BEHALF OF THE REVENUE SUBMITTED THA T INSOFAR AS THE FACTS ARE CONCERNED THE SAME ARE NOT DISPUTED AS THE ESTIMAT E HAS BEEN MADE BY THE ASSESSING OFFICER ON THE FLATS WHICH WERE NOT FOUND MENTIONED IN THE SEIZED MATERIAL. HOWEVER HE SUBMITTED THAT ONCE IT HAS BE EN FOUND THAT ONMONEY HAS BEEN RECEIVED IN RESPECT OF SOME FLATS THEN TH E PRESUMPTION IS THAT THE SAME ONMONEY PERMEATES THE ENTIRE TRANSACTIONS IN RELATION TO OTHER FLATS ALSO. EVEN IF THE SEIZED MATERIAL HAS NOT BEEN FOUN D WITH RESPECT TO SOME OF THE FLATS THEN ALSO THE ASSESSING OFFICER CAN TAK E THE SAME AS BASIS FOR MAKING THE ESTIMATION IN RESPECT OF OTHER FLATS FOR WHICH NO SEIZED MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH. IN SUPP ORT OF HIS CONTENTION HE RELIED UPON THE JUDGMENT OF ANDHRA PRADESH HIGH COU RT IN GOPAL LAL BHADRUKA V/S DCIT [2012] 346 ITR 106 (A.P.) AND OT HER TWO JUDGMENTS OF HONBLE DELHI HIGH COURT IN CIT V/S LACHMAN DASS BH ATIA [2012] 254 CTR (DEL.) 383 AND CIT V/S CHETAN DAS LACHMAN DAS [201 2] 254 CTR (DEL.) 392. IN ALL THESE JUDGMENTS HE SUBMITTED THAT THE HIGH COURTS HAVE HELD THAT EVEN IF SOME MATERIAL HAS BEEN FOUND IN THE SE IZED MATERIAL DURING THE COURSE OF SEARCH THE SAME CAN ALSO BE THE BASIS FO R ESTIMATING THE INCOME OF UNDISCLOSED INCOME IN RESPECT OF OTHER TRANSACTI ONS WHICH WERE NOT FOUND MENTION IN THE SEIZED MATERIAL. HE FURTHER RELIED U PON THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN DIAMOND INVESTMENT & ORS . V/S DEPARTMENT OF INCOME TAX IN ITA NO.5537/MUM./2009 ORDER DATED 2 9 TH JULY 2010 THAT THE ASSESSING OFFICER CAN DRAW INFERENCE FROM THE SURRO UNDING CIRCUMSTANCES WITH REGARD TO THE PAYMENT OF ONMONEY. 10. PER CONTRA THE LEARNED COUNSEL MS. RITIKA AGARWAL SUBMITTED THAT THERE WERE THREE KINDS OF FLATS WHICH WERE SOLD DUR ING THE YEAR AND INCOME HAD BEEN SHOWN FROM THEM FIRSTLY THE FLATS WHICH WERE MENTIONED IN THE M/S. METRO CONSTRUCTION COMPANY 8 SEIZED MATERIAL ON WHICH THERE WERE ALLEGED TRANSAC TIONS OF ONMONEY; SECONDLY THE FLATS WHICH DO NOT FIND ANY MENTION I N THE SEIZED MATERIAL OR DOCUMENTS WHERE THE ASSESSING OFFICER HAS ESTIMATED THE ONMONEY AND LASTLY THOSE FLATS WHICH HAVE NOT BEEN FOUND TO BE MENTIONED IN THE SEIZED MATERIAL AND NO ESTIMATE HAS BEEN MADE BY THE ASSES SING OFFICER I.E. THEY HAVE BEEN ACCEPTED TO BE SOLD ON THE ACTUAL SALE PR ICE AS PER THE AGREEMENT. THUS SHE SUBMITTED THAT THE ASSESSING OFFICER HIMS ELF HAS AGREED THAT SOME OF THE FLATS HAVE BEEN SOLD ON THE VALUE MENTIONED IN THE SALE AGREEMENT AND HENCE THERE COULD NOT BE UNIVERSAL APPLICATIO N OF ONMONEY IN RESPECT OF SALE OF EVERY FLAT. REGARDING THE FLATS ON WHICH ONMONEY HAS BEEN ESTIMATED BY THE ASSESSING OFFICER SHE SUBMITTED T HAT DETAIL REASONS HAVE BEEN GIVEN BEFORE THE LEARNED COMMISSIONER (APPEALS ) WITH REGARD TO THE SALE RATES AND NO MATERIAL WHATSOEVER HAS BEEN FOUN D AT THE TIME OF SEARCH OR ANY ENQUIRY HAS BEEN DONE BY THE ASSESSING OFFIC ER TO SUBSTANTIATE THAT ONMONEY HAS BEEN RECEIVED IN RESPECT OF OTHER FLAT S ALSO. WHILE FRAMING AN ASSESSMENT UNDER SECTION 143(3) THE ASSESSING OFFI CER CANNOT RESORT TO WILD GUESS OR PRESUMPTION WITHOUT ANY ADVERSE MATERIAL O N RECORD. FOR COMING TO A CONCLUSION THAT THE ASSESSEE HAS RECEIVED ONMONE Y IN RESPECT OF OTHER FLATS ALSO SOME KIND OF ENQUIRY OR MATERIAL MUST BE THERE ON THE RECORD OTHERWISE THERE CANNOT BE A PRESUMPTION OF RECEIVIN G THE ONMONEY IN RESPECT OF ALL THE FLATS. THE REASONS FOR VARIOUS R ATES OF FLATS HAVE BEEN ELABORATELY PLACED BEFORE THE LEARNED COMMISSIONER (APPEALS) WHICH HAS BEEN ACCEPTED BY HIM AND THERE IS NO REBUTTAL OF TH ESE VITAL FACTS BY THE DEPARTMENT. SHE FURTHER SUBMITTED THAT THE RATE OF THE FLAT CANNOT BE SAME FOR EVERY FLAT AS THERE ARE VARIOUS FACTORS ON WHIC H SALE IS UNDERTAKEN BECAUSE IT DEPENDS UPON THE MUTUAL UNDERSTANDING AN D NEGOTIATION WITH THE PARTIES AND FACTORS LIKE INITIAL BOOKINGS LOCATION OF FLATS VAASTU OF THE FLATS AND TERMS AND CONDITIONS OF THE PAYMENTS ETC. THES E FACTORS HAVE TO BE TAKEN INTO CONSIDERATION WHILE DETERMINING THE SALE RATE OF THE FLATS. SHE FURTHER SUBMITTED THAT IF THE COMPARISON OF THE RAT ES OF FLATS ONE MENTIONED IN THE SEIZED MATERIAL AND OTHERS FOR WHICH THERE I S NO SEIZED MATERIAL OR INCRIMINATING DOCUMENTS THEN IT CAN BE SEEN THAT F OR THE LATER CATEGORY OF THE FLATS MOST OF THEM HAVE BEEN SOLD AT A VERY HIG H RATES EVEN MORE THAN M/S. METRO CONSTRUCTION COMPANY 9 AFTER ADDING UP THE ONMONEY. THUS PRESUMPTION CAN NOT BE RAISED AGAINST THE ASSESSEE THAT THE OTHER FLATS HAVE BEEN SOLD AT A HIGHER RATE THAN WHAT HAS BEEN MENTIONED IN THE AGREEMENT. SHE THUS STR ONGLY RELIED UPON THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS). 11. IN THE REJOINDER THE LEARNED DEPARTMENTAL REPRESEN TATIVE POINTED OUT THAT IF THE CONTENTIONS OF THE ASSESSEE REGARDING S ALE OF FLATS AT A HIGHER RATE IS ACCEPTED ON THE SECOND CATEGORY OF FLATS (WHICH DO NOT FIND ANY MENTION IN THE SEIZED MATERIAL) THEN THERE ARE FEW INSTANCES OF LOWER RATES ALSO AND IN SUCH CASES IT CAN BE SAFELY PRESUMED THAT ONMONEY HAS BEEN RECEIVED AND ESTIMATE CAN BE RESORTED TO. 12. WE HAVE GIVEN OUR ANXIOUS CONSIDERATION TO THE RIVA L CONTENTIONS PERUSED THE RELEVANT FINDINGS OF THE LEARNED COMMIS SIONER (APPEALS) AS WELL AS THE ASSESSING OFFICER AND THE MATERIAL PLACED ON RECORD. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CERTAIN PAPERS WER E SEIZED WHICH INDICATED THAT THE ASSESSEE HAS RECEIVED SOME ONMONEY IN RES PECT OF SALE OF SOME FLATS. THE DETAILS OF THESE FLATS HAVE BEEN INCORPO RATED AT PAGE10 OF THE ASSESSMENT ORDER AND ALSO AT PAGES2 AND 3 OF THE A PPELLATE ORDER. BASED ON THESE DOCUMENTS THE ASSESSING OFFICER HAS ESTIM ATED THE ONMONEY @ ` 500 PER SQ.FT. WITH RESPECT TO OTHER FLATS ALSO FOR WHICH THERE IS NO SEIZED MATERIAL OR ANY OTHER DOCUMENTS FOR RECEIVING ANY K IND OF ONMONEY. ON A PERUSAL OF THE RECORD IT IS ALSO SEEN THAT THERE A RE THIRD CATEGORY OF FLATS WHEREIN NEITHER THEY FOUND MENTION IN THE SEIZED MA TERIAL NOR ANY ESTIMATE OF ONMONEY HAS BEEN MADE BY THE ASSESSING OFFICER. THIS TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THIS INTER ALIA INDICATES THAT THE ASSESSING OFFICER HIMSELF HAS NOT UNIVERSALLY APPLI ED THE ESTIMATE OF ON MONEY IN RESPECT OF ALL THE FLATS SOLD BY THE ASSES SEE. THIS IS A CASE OF ASSESSMENT FOR THE YEAR OF SEARCH AND HENCE NORMA L ASSESSMENT UNDER SECTION 143(3) HAS BEEN DONE AND PRINCIPLES APPLICA BLE FOR NORMAL ASSESSMENT ARE TO BE APPLIED. EVEN UNDER THE ASSESS MENT UNDER SECTION 153A IT IS NOT NECESSARY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF SEARCH ALBEIT CA N BE ON THE BASIS OF M/S. METRO CONSTRUCTION COMPANY 10 INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WH ICH COULD BE RELATED TO THE EVIDENCE OR MATERIAL FOUND DURING THE COURSE OF SEA RCH ESPECIALLY WHERE ASSESSMENT ARE NOT FINAL AND ARE ABATED. THIS HOWE VER DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY AND WITHOUT GIVING CREDENCE TO THE SEIZED MATERIAL. TRIGGERING POINT O F THE ASSESSMENT IN SUCH CASES HAS TO BE MADE ON THE BASIS OF SEIZED MATERIA L ONLY AND BASED ON EVIDENCE FOUND THE ASSESSING OFFICER CAN CARRY OUT FURTHER ENQUIRY OR GATHER SUCH OTHER INFORMATION FOR MAKING THE ASSESSMENT FO R WHICH SOME MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH AND SEIZ URE OPERATION. IN THE CASE OF ASSESSMENT UNDER SECTION 143(3) WHICH ARE MADE FOR THE YEAR OF SEARCH THE SAME PRINCIPLE WILL APPLY AND THE ASSES SING OFFICER HAS TO HAVE MATERIAL OR INFORMATION FOR MAKING ANY KIND OF ADDI TION. THE SEIZED MATERIAL CAN CERTAINLY CONSTITUTE A BASIS OR STARTING POINT OF ENQUIRY WHETHER ASSESSEE HAS BEEN TAKING ONMONEY IN RESPECT OF SAL E OF OTHER FLATS ALSO. IF THE ASSESSING OFFICER ON FURTHER PROBE OR ENQUIRY I S ABLE TO UNEARTH SOME INFORMATION OR MATERIAL THAT IS ON SALE OF THE OTHE R FLATS ALSO ASSESSEE HAS BEEN TAKING ONMONEY THEN ADVERSE INFERENCE CAN BE DRAWN QUA THOSE FLATS FOR WHICH EVIDENCE HAS BEEN GATHERED. UNDERSTATEMEN T OF SALE RATE CANNOT BE BASED ON PRESUMPTION OR SUSPICION. ESTIMATE OF O NMONEY IN RESPECT OF EVERY SALE OF FLATS DEHORS ANY MATERIAL CANNOT BE RESORTED TO. 13. IN THIS CASE ONCE THE MATERIAL WAS FOUND IN THE FO RM OF SEIZED MATERIAL WHICH SHOWS SOME ALLEGED TRANSACTIONS OF ONMONEY I N RESPECT OF SOME FLATS THE ASSESSING OFFICER OUGHT TO HAVE TAKEN CL UE FROM THIS AND COULD HAVE CARRIED OUT FURTHER ENQUIRY FROM THE FLAT OWNE RS OR OTHERWISE. THERE IS NOTHING ON THE RECORD THAT AT THE TIME OF SEARCH S TATEMENT UNDER SECTION 132(4) WAS RECORDED WHEREIN THE ASSESSEE WAS ASKED ABOUT THE ALLEGED ON MONEY WITH RESPECT TO SALE OF ALL THE FLATS. IF NOT HING WAS CONFRONTED TO THE ASSESSEE AT THE TIME OF SEARCH THEN THERE CANNOT BE ANY PRESUMPTION THAT THE ASSESSEE WAS INVOLVED IN TAKING OF ONMONEY IN RESPECT OF SALE OF EVERY FLATS. EVEN THE APPROACH OF THE ASSESSING OFFICER F OR EXCLUDING SOME OF THE FLATS FOR MAKING ANY KIND OF ESTIMATE OF ONMONEY ALSO GOES TO SHOW THAT THE ASSESSEE HAD NOT RECEIVED ANY KIND OF ONMONEY IN RESPECT OF VARIOUS M/S. METRO CONSTRUCTION COMPANY 11 OTHER FLATS EXCEPT FOR THOSE MENTIONED IN THE SEIZE D MATERIAL. OTHERWISE ALSO THE RATE OF SALE OF FLATS DEPENDS UPON VARIOUS FACT ORS AND THERE CANNOT BE UNIFORM OR SET PATTERN OF THE RATES IN REAL ESTATE. THE RATE OF THE FLATS ARE DEPENDENT UPON THE LOCATION DIRECTION OF THE FLAT BASED ON VAASTU PRINCIPLES PREMIUM LOCATION OF THE FLAT INITIAL BOOKINGS STA GE OF DEVELOPMENT NEGOTIATION AMONG THE PARTIES ETC. THE ASSESSEE HA D AMPLY DEMONSTRATED BEFORE THE LEARNED COMMISSIONER (APPEALS) THAT MOST OF THE RATES OF THE FLATS WHICH DO NOT FOUND MENTION IN THE SIEZED DOCUMENTS HAVE BEEN SOLD AT A MUCH HIGHER PRICE THAN THOSE MENTIONED IN THE SEIZE D MATERIAL EVEN AFTER ADDING UP THE COST OF ONMONEY. THIS VITAL FACT HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. THE LEARNED COMMISSIONER (APPEALS) HAS ANALYSED THE RATE OF EACH AND EVERY FLAT WHICH HAS BEEN ESTIMATED BY THE ASSESSING OFFICER IN A TABULAR FORM WHICH HAS BEEN INCORPORATED FROM PAGES 20 TO 27 AND THE SAME REMAINS UNREBUTTED AT THIS STAGE ALSO. ONCE T HE REASONS FOR THE RATES MENTIONED IN THE SAID FLATS ARE UNREBUTTED THERE REMAINS NO GROUND TO PROCEED ON A HYPOTHESIS OR PRESUMPTION THAT THE ASS ESSEE MUST HAVE RECEIVED ONMONEY IN RESPECT OF THESE FLATS ALSO. 14. IT IS A TRITE LAW THAT THE ESTIMATE HAS TO BE BASED ON COGENT MATERIAL ON RECORD AND NOT ON THE BASIS OF SUSPICION HOWEVE R STRONG IT MAY BE. THE RESORTING OF ESTIMATE IN THE ASSESSMENT HAS TO HAVE A LIVE LINK NEXUS WITH THE MATERIAL AND EVIDENCE ON RECORD AND THE ASSESSE E IS UNABLE TO CONTROVERT SUCH EVIDENCE OR MATERIAL FOUND IN ITS CASE IN RELA TION TO WHICH ESTIMATE OF HIS INCOME IS BEING MADE. PURE GUESS WORK AND A WIL D ESTIMATE DIVORCED FROM THE EVIDENCE OR MATERIAL ON RECORD CANNOT BE R ESORTED TO. THUS ON THESE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VI EW OF THE DETAILED EXPLANATION GIVEN BY THE ASSESSEE BEFORE THE LEARNE D COMMISSIONER (APPEALS) WHICH HAS BEEN ELABORATELY DEALT WITH IN THE APPELLATE ORDER WE DO NOT FIND ANY REASON TO DEVIATE FROM THE CONCLUSION DRAWN BY THE LEARNED COMMISSIONER (APPEALS) AND ACCORDINGLY THE SAME A RE CONFIRMED. M/S. METRO CONSTRUCTION COMPANY 12 15. NOW COMING TO THE VARIOUS CASE LAWS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. FIRST OF ALL ALL THES E DECISIONS ARE BASED ON THE PECULIAR FACTS WHICH IS EVIDENT FROM THE ANALYS IS GIVEN HEREIN BELOW: I) DIAMOND INVESTMENT & ORS. V/S DEPARTMENT OF INCOME TAX IN ITA NO.5537/MUM./2009 ORDER DATED 29 TH JULY 2010 THIS WAS AN EXPARTE ORDER AND THE FACTS RECORDED B Y THE TRIBUNAL WERE THAT THE ASSESSEE HAD CHARGED DIFFERENTIAL RAT ES FROM VARIOUS PARTIES AND THE ASSESSING OFFICER FOUND THAT THERE WAS NO PROPER EXPLANATION AS TO WHY LOWER RATE WAS CHARGED IN RES PECT OF TWO FLATS WITH A PARTICULAR PARTY. IT WAS IN THIS BACKGROUND THE ASSESSING OFFICER MADE AN ADDITION ON ACCOUNT OF SUPPRESSED SALE WITH REGARD TO THE FLAT SOLD TO THAT PARTY. ON THESE FACTS THE TRIBUNAL HAD COME TO A CONCLUSION THAT THE ASSESSING OFFICER CAN DRAW INFE RENCE FROM THE SURROUNDING CIRCUMSTANCES SPECIFICALLY WHEN THE ASS ESSING OFFICER HAS BROUGHT ON RECORD THAT THE FLATS IN THE SAME BUILDI NG HAD BEEN SOLD TO HIGHER PRICE THAN SOLD TO A PARTICULAR PARTY. IN TH E PRESENT CASE A DETAILED EXPLANATION HAS BEEN GIVEN THAT IN RESPECT OF THE FLATS WHICH DO NOT FORM PART OF THE SEIZED MATERIAL HIGHER RAT ES HAVE BEEN CHARGED. THUS THE SAID JUDGMENT DOES NOT APPLY AT ALL TO THE FACTS OF THE PRESENT CASE. II) GOPAL LAL BHADRUKA V/S DCIT [2012] 346 ITR 106 (AL L.) IN THIS CASE DURING THE COURSE OF SEARCH AND SEIZU RE OPERATION IT CAME TO THE LIGHT THAT THE SALE CONSIDERATION AS PE R THE SALE DEED DID NOT TALLY WITH THE ACTUAL PAYMENTS MADE BY THE PURC HASERS AND THERE WAS SUPPRESSION OF SALE RECEIPTS. ON SCRUTINY OF EI GHT SALE DEEDS IT APPEARED THAT RECEIPT OF ONMONEY WAS PAID TO A.H. STATEMENT OF G WAS RECORDED ON MORE THAN ONE OCCASION AND HE CONFI RMED THE RECEIPT OF ONMONEY. MOST OF THE PURCHASERS OF EIGHT PLOTS FROM WHOM EVIDENCE OF PAYMENT OF ONMONEY WAS FOUND HAVE CON FIRMED THE PAYMENT OF ONMONEY. THE MAIN ISSUE BEFORE THE ASSE SSING OFFICER WAS THE SUPPRESSION OF SALE PROCEEDS AND ESTIMATION OF UNDISCLOSED INCOME OF A.H. AND SUBSTANTIVE ADDITION WAS MADE IN RESPECT OF A.H. WHILE PROTECTIVE ASSESSMENT WAS MADE IN RESPECT OF SALE ON G AND A. M/S. METRO CONSTRUCTION COMPANY 13 THE MAIN CONTENTION OF THE ASSESSEE WAS THAT THE AC KNOWLEDGEMENT OF ONMONEY BY G AND A CANNOT BE HELD TO BE SUFFICIENT EVIDENCE TO SHOW THAT TRUE SALE PROCEEDS HAVE BEEN SUPPRESSED BY A.H . AND HAS RECEIVED ONMONEY. THE APPELLATE AUTHORITY HAD COME TO A CONCLUSION THAT THERE WAS SUFFICIENT MATERIAL TO CONCLUDE WITH A.H. WHO HAD RECEIVED ONMONEY. THE TRIBUNAL ALSO CONFIRMED THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) BASED ON THE FACT RE CORDED BY THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APP EALS). THE HONBLE HIGH COURT APPRECIATED THE FACTS RECORDED B Y THE TRIBUNAL HELD THAT NO SUBSTANTIAL QUESTION ARISES IN THIS CASE. F URTHER THE HIGH COURT AFTER ANALYZING THE PROVISIONS OF SECTION 153A 153 C OBSERVED THAT THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME COURT IN CST V/S ESUFALI H.M. ABDULALI [1973] 90 ITR 271 WILL ALSO APPLY I N CASE OF SECTION 153 AND 153C AND IF THERE IS ADEQUATE MATERIAL BEFORE T HE ASSESSING OFFICER WITH REGARD TO THE RECEIPT OF ONMONEY THE ASSESSING OFFICER CAN DRAW AN ADVERSE INFERENCE. IN THE PRESENT CASE THE FACTS ARE ENTIRELY DIFFERENT AS THE ASSESSEE ON THE BASIS OF SIZED MATERIAL WHEREIN THE RECEIPT OF ONMONEY ON SOME FLATS WAS M ENTIONED HAS DISCLOSED THE SAME IN THE RETURN OF INCOME. WITH RE GARD TO THE OTHER FLATS DETAIL REASONING AND EXPLANATION WAS GIVEN A ND IT WAS ALSO PROVED THAT THESE FLATS WERE SOLD AT A MUCH HIGHER RATE. THIS FACT HAS NOT BEEN CONTROVERTED BY THE ASSESSING OFFICER OR B EFORE US. THUS WITHOUT ANY FURTHER EVIDENCE TO CORROBORATE THE REC EIPT OF ONMONEY IT CANNOT BE HELD THAT THE SAME ONMONEY PERMEATED THROUGH IN RESPECT OF EACH AND EVERY FLAT SOLD BY THE ASSESSEE . THUS THE JUDGMENT OF HON'BLE HIGH COURT CANNOT BE APPLIED ON THE FACTS OF THE PRESENT CASE AS THE SAID DECISION WAS BASED ON ITS OWN FACTS WHERE THERE WAS SUFFICIENT AND AMPLE MATERIAL TO REJECT T HE ASSESSEES CONTENTIONS. III) CIT V/S LACHMAN DASS BHATIA [2012] 254 CTR (DEL.) 383 IN THIS CASE THE HONBLE HIGH COURT UPHELD THE CON CURRENT FINDING OF THE CIT AND THE TRIBUNAL THAT THERE WAS NO BASIS OF MAKING ANY ADDITION TOWARDS LOW GROSS PROFIT AS IN THE SEARCH ON THE ASSESSEE DID NOT YIELD ANY INCRIMINATING MATERIAL ON THE BASIS O F WHICH IT CAN BE SAID THAT THE ASSESSEE WAS INDULGING IN ANY KIND OF UNDE R INVOICING AND M/S. METRO CONSTRUCTION COMPANY 14 SUPPRESSION OF SALE. THE DOCUMENTS ON WHICH THE ASS ESSING OFFICER HAD PLACED RELIANCE WAS SEIZED FROM DIFFERENT PERSON AN D NOT FROM THE ASSESSEE AND THERE WAS NO NEXUS BETWEEN THE SAID MA TERIAL. THUS THE ENTIRE DECISION IS NOT APPLICABLE TO THE FACTS OF T HE PRESENT CASE. IV) CIT V/S CHETAN DAS LACHMAN DAS [2012] 254 CTR (DEL .) 392 IN THIS CASE IT WAS FOUND THAT THE ASSESSEE HAS RE CORDED TWO RATES AS FOUND FROM THE SEIZED PAPERS BUT ENTERED ONLY THE L OWER RATE IN THE SALES BILL. THE ENTIRE SEIZED MATERIAL SHOWED THAT THE ASSESSEE WAS SUPPRESSING THE PROFIT RATE DISCLOSED IN THE BOOKS OF ACCOUNT. ON THE BASIS OF SEIZED MATERIAL THE ASSESSING OFFICER REJ ECTED THE BOOK RESULTS AFTER APPLYING THE PROVISIONS OF SECTION 145 AND ES TIMATED THE TRUE INCOME EARNED BY THE ASSESSEE. IT WAS IN THIS BACKG ROUND THE HIGH COURT IN PRINCIPLE UPHELD THE CONTENTIONS OF THE A SSESSING OFFICER HOWEVER THE ENTIRE MATTER WAS SET ASIDE TO THE TRI BUNAL TO EXAMINE WHETHER THE LEARNED COMMISSIONER (APPEALS) WAS JUST IFIED IN SUBSTANTIALLY REDUCING THE ADDITIONS BY HOLDING THA T THE SALES TURNOVER CANNOT BE ESTIMATED ON THE BASIS OF SEIZED MATERIAL . SINCE THERE WAS A DISCREPANCY IN THE FACTS RECORDED BY THE TRIBUNAL THE FINDINGS OF THE TRIBUNAL WAS NOT APPRECIATED AND THE MATTER WAS RES TORED BACK TO THE TRIBUNAL FOR FRESH CONSIDERATION. THIS CASE ALSO DO ES NOT APPLY TO THE FACTS OF THE PRESENT AND IS DISTINGUISHABLE. 16. IN VIEW OF OUR FINDINGS WE HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ESTIMATED ONMONEY IN RESPECT OF VARIOUS FLATS IS NOT SUSTAINABLE AND THE REASONING GIVEN AN D CONCLUSION DRAWN BY THE LEARNED COMMISSIONER (APPEALS) AFTER DUE APPRECIATI ON OF FACTS AND MATERIAL ON RECORD IS LEGALLY AND FACTUALLY CORRECT. WE DO N OT FIND ANY REASON TO DEVIATE FROM SUCH A FINDING. THUS THE GROUND RAISE D BY THE REVENUE IS TREATED AS DISMISSED. 17. 4 $7 ' 2 4 * $ 89 : 17. IN THE RESULT REVENUES APPEAL IS TREATED AS D ISMISSED. M/S. METRO CONSTRUCTION COMPANY 15 WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.4811/MUM./2010 . 18. THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF TH E ADDITION ON ACCOUNT OF ALLEGED INFLATION OF EXPENSES. THE ASSES SING OFFICER ON THE BASIS OF SOME SEIZED PAPERS NUMBERED A1 / PAGE71 NOTED THAT THE ASSESSEE HAS INFLATED FOLLOWING EXPENSES: BHARAT BHAI EXTRA BILL ` 8 08 480 FULJI (ADJUSTMENT BILL) ` 23 85 708 YOGESH SIR EXTRA BILL AMOUNT ` 2 22 452 ` 34 16 60 19. BEFORE THE LEARNED COMMISSIONER (APPEALS) THE ASSE SSEE CONTENDED THAT BEFORE THE ASSESSING OFFICER VIDE LETTER DATE D 10 TH SEPTEMBER 2009 IT HAS BEEN EXPLAINED AT GREAT LENGTH WHY NO ADDITION CAN BE MADE MERELY ON THE BASIS OF ROUGH NOTINGS WITHOUT ANY CORROBORATIV E EVIDENCE AND THESE PAPERS HAD NO EVIDENTIARY VALUE. IT WAS ALSO SUBMIT TED THAT THE SAID PAPER WAS A DUMB DOCUMENT AND DOES NOT RELATE TO THE ASSE SSEE THEREFORE NO ADVERSE INFERENCE CAN BE DRAWN. RELIANCE WAS ALSO P LACED ON SEVERAL DECISIONS WHICH HAVE BEEN INCORPORATED BY THE LEARN ED COMMISSIONER (APPEALS) FROM PAGES29 TO 33 OF HIS ORDER. THE LEA RNED COMMISSIONER (APPEALS) HOWEVER CONFIRMED THE ADDITION AFTER OB SERVING AND HOLDING AS UNDER: 15. I HAVE CONSIDERED THE FACTS AND SUBMISSION. I HAVE SEEN THE COPY OF THE SEIZED DOCUMENT. THE DOCUMENT WAS SEIZED FROM T HE APPELLANTS PREMISES. IT IS NOT A DUMB DOCUMENT. NAMES OF THE P ARTNERS AND CONTRACTORS ARE APPEARING IN THIS SEIZED MATERIAL. THESE AMOUNT S WERE QUALIFIED WITH THE WORDS EXTRA BILL ADJUSTMENT BILLS. FROM THIS I T IS CLEAR THAT THE APPELLANT HAS INFLATED THE EXPENSES. IT IS THE DUTY OF THE AP PELLANT TO EXPLAIN THE NATURE OF THE EXPENSES AND THE SOURCES FOR SUCH EXPENSES. THE APPELLANT HAS FAILED TO DO SO. THE DECISIONS RELIED ON BY THE APPELLANT IS DISTINGUISHABLE SINCE THOSE CASES ARE CONCERNED WITH DUMB DOCUMENTS. WHER EAS IN THIS CASE DOCUMENTS WERE FOUND IN THE POSSESSION OF THE APPEL LANT THE PAYMENT ALSO STATED TO BE MADE TO THE PARTNERS FOR EXTRA BILLS AND ADJUSTMENT BILLS. IN VIEW OF SECTION 132(4A) OF THE I.T. ACT IT SHOULD BE TAKEN THAT THE CONTENTS ARE TRUE SINCE THE APPELLANT COULD NOT PROVE THAT T HE CONTENTS IN THE DOCUMENTS ARE NOT TRUE. IN VIEW OF THESE FACTS I U PHOLD THE ORDER OF THE A.O. ON ACCOUNT OF INFLATION OF EXPENSES. ADDITION OF RS .34 16 640/- IS CONFIRMED. M/S. METRO CONSTRUCTION COMPANY 16 20. BEFORE US THE LEARNED COUNSEL ON BEHALF OF THE AS SESSEE FIRST OF ALL POINTED THE RELEVANT PAGE71 APPEARING IN THE LOOSE PAPER OF ANNEXURE A1 WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGE77. HER PRELIMINARY SUBMISSION WAS THAT THE SAID DOCUMENT WAS NOT FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION IN CASE OF THE ASSESSEE F ROM ANY OF ITS PREMISES. EVEN IN THE PANCHANAMA PREPARED IN CASE OF THE ASSE SSEE THIS ANNEXURE OR DOCUMENT DOES NOT FIND ANY MENTION ABOUT SUCH KIND OF ANNEXURE OR LOOSE PAPER. TO PROVE THIS CONTENTION SHE SUBMITTED A PH OTOCOPY OF PANCHANAMA AND DETAILS OF ANNEXURE WHICH WERE SEIZED DURING TH E COURSE OF SEARCH AND SEIZURE IN ASSESSEES CASE. THE LOOSE PAPERS WHICH HAVE BEEN MENTIONED IN THE PANCHANAMA ARE ENTIRELY DIFFERENT AND THE ANNEX URE A1 / PAGE71 ON WHICH THE ASSESSING OFFICER HAS PLACED RELIANCE IS ENTIRELY DIFFERENT. THUS THE ALLEGED SEIZED DOCUMENT ON WHICH THE ASSESSING OFFI CER HAS MADE THE ADDITION DOES NOT BELONG TO THE ASSESSEE AND HENCE NO ADDITION IS CALLED FOR. FURTHER THE SAID DOCUMENT WHICH CONTAINS SOME ENTRIES IS NOT BASED ON DOUBLE ENTRY SYSTEM AS THERE IS NO MATCHING DEBIT / CREDIT SIDE ENTRIES. VARIOUS INSTANCES HAVE BEEN POINTED OUT BY HER BEFO RE US TO SHOW THAT THERE IS NO CORELATION BETWEEN THE DEBIT AND CREDIT SIDE ENTRIES AND HENCE IT CANNOT BE SAID THAT THESE ENTRIES SUGGEST ANY KIND OF INFLATED EXPENSES. THUS NO ADDITION CAN BE MADE FIRSTLY ON THE GROU ND THAT IT WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE AND DOES NOT FO RM PART OF THE PANCHANAMA AT THE TIME OF SEARCH IN THE ASSESSEES CASE AND SECONDLY THE ENTRIES IN THE SAID DOCUMENTS DOES NOT IN ANY MANN ER RELATE TO THE ASSESSEE AS IT MENTIONS THE NAME OF MR. S.C. JAIN A ND MR. BHARATBHAI WITHOUT SPECIFYING THE DETAILS OF PROJECT FOR WHICH ANY KIND OF ALLEGED TRANSACTION HAS TAKEN PLACE. 21. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESE NTATIVE HEAVILY RELYING ON THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) SUBMITTED THAT THE NAME OF MR. S.C. JAIN IS NOT UNFAMILIAR A S HE IS ONE OF THE PARTNERS OF THE ASSESSEE FIRM AND THE ONUS WAS ON THE ASSESS EE TO SHOW THAT THE ENTRIES IN THE SAID DOCUMENT DOES NOT PERTAIN TO TH E ASSESSEE. OTHERWISE HE M/S. METRO CONSTRUCTION COMPANY 17 SUBMITTED THAT THE MATTER CAN GO BACK TO THE FILE O F THE ASSESSING OFFICER TO VERIFY THE CONTENTIONS OF THE ASSESSEE. 22. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS PERUSED THE RELEVANT FINDINGS OF THE LEARNED COMMISSIONER (APPE ALS) AND THE MATERIAL PLACED ON RECORD. ON A PERUSAL OF THE DOCUMENT ANNEXURE A1 / PAGE71 WHICH IS APPEARING AT PAGE77 OF THE PAPER BOOK SHO WS CERTAIN ENTRIES ON THE DEBIT AND CREDIT SIDE AND FURTHER ENTRIES IN TH E NAME OF MR. BHARATBHAI FULJI YOGESH SIR . PRIMAFACIE THE SAID ENTRIES ARE NOT BASED ON DOU BLE ENTRY SYSTEM AND THERE IS NO CORELATION BETWEEN AN Y OF THE FIGURES GIVEN ON THE DEBIT / CREDIT SIDE. THE MAIN CONTENTION OF THE LEARNED COUNSEL IS THAT THE SAID DOCUMENT DOES NOT RELATE TO THE ASSESSEE FIRM AS IT WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE FIRM AT THE TIME OF SEARCH AND ALSO THERE IS NO MENTION IN THE PANCHANAMA PREPARED IN THE ASSESSEE S CASE. EVEN THE ASSESSING OFFICER HAS NOT MENTIONED AS TO FROM WHER E THE DOCUMENT WAS FOUND. IF THAT IS THE FACT THEN THERE CANNOT BE A NY PRESUMPTION UNDER SECTION 292C WHICH POSTULATES THAT ONUS IS UPON THE ASSESSEE TO EXPLAIN THE NATURE OF ALL THE DOCUMENTS AND THE ENTRIES GIVEN T HEREIN IF FOUND FROM THE POSSESSION OF THE ASSESSEE AT THE TIME OF SEARCH. U NDER THESE FACTS AND CIRCUMSTANCES AND WITHOUT GOING INTO THE MERITS OF THE ADDITION WE ARE OF THE VIEW THAT THIS MATTER REQUIRED TO BE RESTORED B ACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THIS FACT. CONSEQUENTLY WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER ( APPEALS) AND RESTORE BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICE R TO VERIFY THIS CONTENTION OF THE ASSESSEE AND TO VERIFY WHETHER THE SAID DOCUMEN T I.E. PAGE71 OF ANNEXURE A1 WAS PART OF PANCHANAMA PREPARED IN CASE OF THE AS SESSEE OR NOT. IF THE SAID DOCUMENT DOES NOT PERTAIN TO THE A SSESSEE THEN NEEDLESS TO SAY THAT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. THE ASSESSING OFFICER SHALL PROVIDE DUE AND EFFECTIVE O PPORTUNITY OF HEARING TO THE ASSESSEE TO EXPLAIN THESE FACTS. CONSEQUENTLY THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURP OSES. M/S. METRO CONSTRUCTION COMPANY 18 23. 4 $7 '* +4$ 2 ;2 <=> #! '$ ? * $ 89 : 23. IN THE RESULT ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 24. '* +@ % 'A ' 2 4 * $ 89 '* +4$ 2 ;2 <=> #! '$ ? * $ 89 : 24. TO SUM UP REVENUES APPEAL IS TREATED AS DISMI SSED AND ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOS ES. % 2 5 B C*7 10 TH JULY 2013 2 D : ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY 2013 SD/- . .. . B. RAMAKOTAIAH ACCOUNTANT MEMBER SD/- #$ #$ #$ #$ %& %& %& %& ' ' ' ' AMIT SHUKLA JUDICIAL MEMBER MUMBAI C* C* C* C* DATED : 10 TH JULY 2013 % 2 /'$#E FE $ / COPY OF THE ORDER FORWARDED TO : (1) '* +4$ / THE ASSESSEE; (2) ' / THE REVENUE; (3) G () / THE CIT(A); (4) G / THE CIT MUMBAI CITY CONCERNED; (5) E'JD /'$'* / THE DR ITAT MUMBAI; (6) DK+ L / GUARD FILE. 0E$ /'$ / TRUE COPY %* / BY ORDER / . MN / PRADEEP J. CHOWDHURY '4O '* M' / SR. PRIVATE SECRETARY < / 8 / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI