THE DCIT, (CENTRAL)-1, Indore v. M/s. N.R. Finance Pvt. Ltd., Indore

ITSSA 201/IND/2016 | 2012-2013
Pronouncement Date: 09-03-2021 | Result: Dismissed

Appeal Details

RSA Number 20122716 RSA 2016
Assessee PAN AAACN6750F
Bench Indore
Appeal Number ITSSA 201/IND/2016
Duration Of Justice 4 year(s) 4 month(s) 26 day(s)
Appellant THE DCIT, (CENTRAL)-1, Indore
Respondent M/s. N.R. Finance Pvt. Ltd., Indore
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 09-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 09-03-2021
Date Of Final Hearing 12-01-2021
Next Hearing Date 12-01-2021
Last Hearing Date 26-09-2018
First Hearing Date 20-07-2020
Assessment Year 2012-2013
Appeal Filed On 13-10-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE HON'BLE KUL BHARAT JUDICIAL MEMBER AND HON'BLE MANISH BORAD ACCOUNTANT MEMBER IT(SS)A NO.201 & ITA NO.1043/IND/2016 ASSESSMENT YEAR:2012-13 & 2013-14 DCIT(CENTRAL) - 1 INDORE / VS. M/S. N.R. FINANCE PVT. LTD. NEW SIYAGANJ HTL UNIT-2 MALL GODOWN ROAD INDORE (REVENUE) (RESPONDENT) P.A. NO.AAACN6750F CO NOS.39 & 40/IND/2018 (ARISING OUT OF ITA NO.201 & 1043/IND/2016) ASSESSMENT YEAR:2012-13 & 2013-14 M/S. N.R. FINANCE PVT. LTD. NEW SIYAGANJ HTL UNIT-2 MALL GODOWN ROAD INDORE / VS. DCIT(CENTRAL) - 1 INDORE (APPELLANT) (REVENUE ) P.A. NO.AAACN6750F APPELLANT BY S/SHRI MAHESH AGRAWAL & KUNAL AGRAWAL ARS REVENUE BY SHRI LAL CHAND CIT - DR ITA NOS.204 206 & 207/IND/2018 ASSESSMENT YEAR:2009-10 2011-12 & 2012-13 & ITANO.423/IND/2017 ASSESSMENT YEAR:2013-14 DCIT - 3(1) INDORE / VS. M/S. N.R. COMPANY 6 RTO ROAD SHRIRAM NAGAR INDORE (REVENUE) (RESPONDENT) P.A. NO.AAGFN616 9F N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 2 REVENUE BY SHRI LAL CHAND CIT - AR RESPONDENT BY SHRI S.S. SHEETAL ADV. DATE OF HEARING 12 . 0 1 . 20 2 1 DATE OF PRONOUNCEMENT 09 . 0 3 .20 2 1 / O R D E R PER MANISH BORAD A.M: THE ABOVE CAPTIONED SIX APPEALS FILED AT THE INSTA NCE OF THE REVENUE AND TWO CROSS OBJECTION FILED BY THE ASSESS EE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-III INDORE DATED 1 8.07.2019 & 05.12.2017. 2. AS SUBMITTED BY THE LD. COUNSELS FOR THE ASSESSE E(S) AND ALSO DULY ACCEPTED BY THE LD. DEPARTMENTAL REPRESENTATIV E THAT MOST OF THE ISSUES RAISED IN THESE APPEALS ARE COMMON AND A RE ARISING OUT OF THE SIMILAR FACTS THUS FOR THE SAKE OF CONVENIE NCE AND BREVITY ALL THESE APPEALS WERE HEARD TOGETHER ON THE REQUEST OF BOTH THE PARTIES AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 3. IN THE CASE OF M/S N.R. FINANCE PVT. LTD REVENUE HAS RAISED FOLLOWING GROUNDS IN THE APPEAL RELATING TO ASSESS MENT YEARS 2012- 13 AND 2013-14:- M/S N.R. FINANCE PVT. LTD IT(SS)NO.201/IND/2016 ASSESSMENT YEAR 2012-13 N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.2 72 71 700/- MADE BY T HE AO ON ACCOUNT OF ESTIMATION OF SALE CONSIDERATION ON THE BASIS OF SE IZED DOCUMENTS LPS-A3 FOUND FROM THE PREMISES OF THE BROKER SHRI KAMAL G OYAL WITHOUT APPRECIATING THE FACTS AND EVIDENCES BROUGHT INTO L IGHT BY THE AO DURING ASSESSMENT PROCEEDINGS. THE APPELLANT RESERVES THE RIGHT TO ADD AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. ITA NO.1043/IND/2016 ASSESSMENT YEAR 2013-14 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.13 31 01 675/- MADE BY THE AO ON ACCOUNT OF ESTIMATION OF SALE CONSIDERATION ON THE BASIS OF SE IZED DOCUMENTS LPS-A3 FOUND FROM THE PREMISES OF THE BROKER SHRI KAMAL G OYAL WITHOUT APPRECIATING THE FACTS AND EVIDENCES BROUGHT INTO L IGHT BY THE AO DURING ASSESSMENT PROCEEDINGS. THE APPELLANT RESERVES THE RIGHT TO ADD AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 4. ON 10.10.2018 WHEN THE INSTANT APPEALS CAME UP F OR HEARING LD. DEPARTMENTAL REPRESENTATIVE REQUESTED TO PROVID E AN OPPORTUNITY TO FILE ADDITIONAL GROUNDS AND THE SAME WAS ACCEPTED BY US. FOLLOWING ADDITIONAL GROUNDS WERE FILED COM MONLY FOR ASSESSMENT YEAR 2012-13 AND 2013-14 PERTAINING TO T HE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD :- N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 4 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE CASE OF THE ASSESSEE IS A T VARIANCE WITH THE ACTUAL REGISTERED SALE PRICE PAID FOR THE SAID PLOT S AS PER DOCUMENTS SUBMITTED BY THE ASSESSEE IN THE APPEAL PROCEEDINGS WITHOUT PROVIDING THE AO ANY OPPORTUNITY TO REBUT THE CLAIM OF THE AS SESSEE UNDER RULE 46A. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW THE LD. CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE WIT HOUT CALLING FOR REMAND REPORT FROM THE A. O. DESPITE THE FACT THAT ADDITIONAL EVIDENCES WERE SUBMITTED BY THE ASSESSEE AND 'WITHOUT PROVIDING AN Y OPPORTUNITY TO THE A.O. UNDER RULE 46A. 5. AGAINST THE APPEAL FILED BY THE REVENUE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD HAS ALSO FILED CROSS OBJECTIO N RAISING FOLLOWING GROUNDS OF APPEAL:- C.O. NO.39 & 40/IND/2018 A.Y. 2012-13 & A.Y 2013 -14 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 3 ('THE CIT(A )') ERRED IN UPHOLDING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME-TAX- CENTRAL INDORE ('THE AO') IN INITIATING THE PROCEE DINGS U/S 153A OF THE INCOME-TAX ACT 1961 ('THE ACT'). THE CROSS OBJECTO R PRAYS THAT THE PROCEEDINGS UNDER SECTION 153A OF THE ACT BE ANNULL ED AS BEING AB- INITIO AND/OR OTHERWISE VOID AND BAD-IN-LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) ERRED IN NOT QUASHING THE ASSESSMENT ORDER P ASSED BY AO BASED ON THIRD PARTY INFORMATION GATHERED AT THE BA CK OF APPELLANT WITHOUT PROVIDING OPPORTUNITY OF CROSS EXAMINATION INSPITE OF SPECIFIC REQUEST. ACCORDINGLY THE CROSS OBJECTOR PRAYS THAT THE ORDER PASSED IN N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 5 VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BE DECLA RED VOID ILLEGAL AND DIRECTED TO BE ANNULLED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ADDITIONAL GROUND OF DEPARTMENT APPEAL IS ERRING IN DOUBTING THE AUTHENTICITY OF THE REGISTERED SALE DEED DOCUMENTS EXECUTED BEFORE THE SUB-REGISTRAR OFFICE WHICH ARE DOCUMENTS IN PUB LIC DOMAIN AND CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCES. ACCOR DINGLY THE CROSS OBJECTOR PRAYS THAT THE ADDITIONAL GROUNDS OF DEPAR TMENT BE DIRECTED TO BE DISMISSED. 6. IN THE CASE OF ANOTHER ASSESSEE NAMELY M/S N.R. COMPANY REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL FOR ASSESSMENT YEARS 2009-10 2011-12 2012-13 AND 2013-14:- ITANO.204/IND/2018 ASSESSMENT YEAR 2009-10 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 89 47 147/- WITHOUT CONSIDERING THE SEIZED DOCUMENTS PAGE NO.64 66 AND 68 OF LPS-A3 FRO M THE PREMISE OF THE BROKER WHO SOLD THE PLOTS IN THE AREA DEVELOPED BY ASSESSEE AND THE FACT THAT THERE IS HUGE DIFFERENCE IN GUIDELINE VALUE AN D SALE CONSIDERATION SHOWN BY THE ASSESSEE WHICH SUPPORTS THAT THE SALE PRICE WAS SUPPRESSED IN BOOKS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN HOLDING THAT NO OPPORTUNITY WAS PROVIDED T O ASSESSEE FOR CROSS EXAMINATION EVEN WHEN IN STATEMENT OF THE PARTNER RECORDED U/S 131 OF THE ACT THE DETAILS OF SEIZED DOCUMENTS WERE PROVI DED TO HIM AS SUCH SUFFICIENT OPPORTUNITY WAS PROVIDED TO ASSESSEE FIR M AND THE ASSESSEE FIRM NEVER ASKED FOR CROSS EXAMINATIONS DURING THE COURS E OF ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES LEAVE TO ADD TO DEDUCT FROM OR OTHERWISE AMEND THE ABOVE GROUND OF APPEAL. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 6 ITA NO.206/IND/2018 ASSESSMENT YEAR 2011-12 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3 41 02 14 5/- WITHOUT CONSIDERING THE SEIZED DOCUMENTS PAGE NO.64 66 AND 68 OF LPS-A3 FROM THE PREMISE OF THE BROKER WHO SOLD THE PLOTS IN THE AREA DEVELOPED BY ASSESSEE AND THE FACT THAT THERE IS HUGE DIFFERENCE IN GUIDELINE VALUE AND SALE CONSIDERATION SHOWN BY THE ASSESSEE WHICH SUPPORTS THAT THE SALE PRICE WAS SUPPRESSED IN BOOKS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN HOLDING THAT NO OPPORTUNITY WAS PROVID ED TO ASSESSEE FOR CROSS EXAMINATION EVEN WHEN IN STATEMENT OF THE PAR TNER RECORDED U/S 131 OF THE ACT THE DETAILS OF SEIZED DOCUMENTS WER E PROVIDED TO HIM AS SUCH SUFFICIENT OPPORTUNITY WAS PROVIDED TO ASSESSE E FIRM AND THE ASSESSEE FIRM NEVER ASKED FOR CROSS EXAMINATIONS DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES LEAVE TO ADD TO DEDUCT FROM OR OTHERWISE AMEND THE ABOVE GROUND OF APPEAL. ITA NO.207/IND/2018 ASSESSMENT YEAR 2012-13 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21 11 75 3 97/- WITHOUT CONSIDERING THE SEIZED DOCUMENTS PAGE NO.64 66 AND 68 OF LPS-A3 FROM THE PREMISE OF THE BROKER WHO SOLD THE PLOTS IN THE AREA DEVELOPED BY ASSESSEE AND THE FACT THAT THERE IS HUGE DIFFERENCE IN GUIDELINE VALUE AND SALE CONSIDERATION SHOWN BY THE ASSESSEE WHICH SUPPORTS THAT THE SALE PRICE WAS SUPPRESSED IN BOOKS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN HOLDING THAT NO OPPORTUNITY WAS PROVID ED TO ASSESSEE FOR CROSS EXAMINATION EVEN WHEN IN STATEMENT OF THE PAR TNER RECORDED U/S 131 OF THE ACT THE DETAILS OF SEIZED DOCUMENTS WER E PROVIDED TO HIM AS N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 7 SUCH SUFFICIENT OPPORTUNITY WAS PROVIDED TO ASSESSE E FIRM AND THE ASSESSEE FIRM NEVER ASKED FOR CROSS EXAMINATIONS DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES LEAVE TO ADD TO DEDUCT FRO M OR OTHERWISE AMEND THE ABOVE GROUND OF APPEAL ITA NO.423/IND/2017 ASSESSMENT YEAR 2013-14 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.33 72 67 7 20/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM SALE OF PLO TS WITHOUT CONSIDERING THE SEIZED DOCUMENTS PAGE NO.64 66 AND 68 OF LPS-A3 FROM THE PREMISE OF THE BROKER WHO SOLD THE PLOTS IN THE AREA DEVELOPED BY ASSESSEE AND THE FACT THAT THERE IS HUGE DIFFERENCE IN GUIDELINE VALUE AND SALE CONSIDERATION SHOWN BY THE ASSESSEE WHICH SUPPORTS THAT THE SALE PRICE WAS UNDER MENTIONED IN BOOKS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN HOLDING THAT NO OPPORTUNITY WAS PROVID ED TO ASSESSEE FOR CROSS EXAMINATION EVEN WHEN IN STATEMENT OF THE PAR TNER RECORDED U/S 131 OF THE ACT THE DETAILS OF SEIZED DOCUMENTS WER E PROVIDED TO HIM AS SUCH SUFFICIENT OPPORTUNITY WAS PROVIDED TO ASSESSE E FIRM AND THE ASSESSEE FIRM NEVER ASKED FOR CROSS EXAMINATIONS DU RING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN LAW BY DELETING THE ADDITION OF RS.15 67 401/- MADE UNDER THE HEAD EXCESS DEVELOPMENT CHARGED CLAIMED W ITHOUT CONSIDERING THAT THE ASSESSEE REMAINED FAIL TO EXPL AIN THE REASON OF EXCESS PAYMENT. 4. THE APPELLANT CRAVES LEAVE TO ADD TO DEDUCT FRO M OR OTHERWISE AMEND THE ABOVE GROUND OF APPEAL N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 8 7. FROM PERUSAL OF THE GROUNDS RAISED BY THE REVEN UE FOR BOTH THE ASSESSEE(S) WE FIND THAT ONLY FOLLOWING THREE ISSUES NEEDS TO BE ADJUDICATED:- (I) WHETHER THE LD. CIT(A) ERRED IN DELETING THE A DDITIONS WHICH WERE MADE BY LD. A.O APPLYING THE ESTIMATED RATE P ER SQ. FEET ON SALE OF PLOT OF LANDS BASED UPON THE SEIZED DOCUME NTS BEARING PAGE 64 66 AND 68 OF LPS A3 SEIZED FROM THE PREMIS ES OF BROKER MR. KAMAL GOYAL AS AGAINST THE RATE PER SQ. FEET OF LAND SOLD BY THE RESPECTIVE ASSESSEE(S) DECLARED IN THE IR BOOKS OF ACCOUNTS. THE FOLLOWING CHART SHOWS THE IMPUGNED SUPPRESSE D INCOME COMPUTED BY THE LD. A.O. N.R. FINANCE PVT. LTD ASSESSMENT YEAR AREA IN SQ.FT RATE PER SQ.FT DISCLOSED IN BOOKS RATE PER SQ.FT APPLIED BY A.O ALLEGED SUPPRESSED INCOME 2012-13 35082 322.63 1100 27271700 2013-14 136927 327.93 1300 133102629 N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 9 N.R. COMPANY ASSESSMENT YEAR AREA IN SQ.FT RATE PER SQ.FT DISCLOSED IN BOOKS RATE PER SQ.FT APPLIED BY A.O ALLEGED SUPPRESSED INCOME 2009-10 114768 334.91 500 18947047 2011-12 58125 313.29 900 34102519 2012-13 270835 320.28 1100 211175466 2013-14 346146 325.65 1300 337267725 (II) THAT LD. CIT(A) ERRED IN NOT FOLLOWING THE PR OVISIONS OF RULE 46A OF I.T. RULES IN THE CASE OF M/S. N.R. FINANCE PVT. LTD FOR ASSESSMENT YEAR 2012-13 AND ASSESSMENT YEAR 2013-1 4 BY ACCEPTING THE DOCUMENTARY EVIDENCE NAMELY REGISTER ED SALE DEED WITHOUT PROVIDING AN OPPORTUNITY TO THE LD. A.O AN D NOT CALLING REMAND REPORT. (III) THAT LD. CIT(A) ERRED IN DELETING DISALLOWA NCE OF DEVELOPMENT CHARGES AT RS.15 67 401/- MADE BY LD. A.O FOR ASSES SMENT YEAR 2013-14 IN THE CASE OF ASSESSEE NAMELY M/S N.R. COM PANY (IN SHORT NRC). 8. AS REGARDS THE CROSS OBJECTION RAISED BY M/S N. R. FINANCE PVT. LTD (IN SHORT NRFPL) FOR ASSESSMENT YEAR 201 2-13 AND 2013- 14 THE SOLE GRIEVANCE IS THAT OPPORTUNITY OF CROSS EXAMINATION WAS N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 10 NOT PROVIDED AND THE ADDITIONS WERE MADE MERELY ON THE BASIS OF THIRD PARTY INFORMATION GATHERED AT THE BACK OF APP ELLANT. 9. WE OBSERVE THAT THE APPEALS BEFORE THE FIRST APP ELLATE AUTHORITY WERE FIRST DECIDED IN THE CASE OF M/S N.R. FINANCE PVT. LTD AND SUBSEQUENTLY IN THE CASE OF M/S N.R. COMPANY (IN SH ORT NRC). IN THE ORDER OF NRC LD. CIT(A) REFERRED TO THE FIND ING OF LD. CIT(A) GIVEN IN THE CASE OF M/S N.R. FINANCE PVT. LTD. TH EREFORE AS AGREED BY BOTH THE PARTIES WE ARE TAKING THE CASE OF M/S N.R. FINANCE PVT. LTD AS THE LEAD CASE AND THE COMMON ISSUE ARISING I N CASE OF BOTH THE ASSESSEE(S) SHALL BE DECIDED ON THE BASIS OF FA CTS OF M/S N.R. FINANCE PVT. LTD. 10. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED I N THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL COMPL EXES AND DEVELOPMENT OF RESIDENTIAL COLONY AND PLOTS. THE A PPELLANT IS ONE OF THE COMPANIES OF M/S APPOLO GROUP OF INDORE WHICH W AS SEARCHED U/S 132 OF THE ACT ON 29.01.2012. THE ASSESSEE COM PANY ENTERED INTO AN AGREEMENT FOR DEVELOPMENT OF LAND OWNED BY M/S N.R. COMPANY AND OTHERS AT GRAM BICHOLI HAPSI IN THE NAM E AND STYLE OF N.R. ESTATE VIDE AGREEMENT DATED 04.04.2007. SUB SEQUENTLY VIDE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 11 ANOTHER AGREEMENT DATED 05.02.2008 TERMS AND CONDIT IONS OF THE DEVELOPMENT AGREEMENT WERE CHANGED AND IN CONSIDER ATION OF RELINQUISHING THE PART OF DEVELOPMENT CHARGES ASSES SEE AGREED TO ACQUIRE PLOTS OF LAND SPREAD OVER FINANCIAL YEAR 20 08-09 TO 2012-13. SEARCH ACTION WERE ALSO CARRIED OUT U/S 132 OF THE ACT ON 29.01.2012 AT THE PREMISES OF MR. KAMAL GOYAL INDO RE WHO IS A BROKER AND DEALS IN REAL ESTATE TRANSACTIONS FOR VA RIOUS BUILDERS AND DEVELOPERS. ALONG WITH THE LOOSE PAPERS DIARY LPS A3 WAS ALSO SEIZED AND ON PAGE 64 66 AND 68 OF THIS DIARY THER E ARE SOME DETAILS OF PLOTS SOLD IN N.R. ESTATES AND THE RAT E OF SALE PER SQ. FEET WAS RANGING FROM RS.1115 TO RS.1131/- PER SQ. FEET. LD. A.O BASED ON THE INFORMATION APPEARING IN THE SEIZED DOCUMENT WAS OF THE VIEW THAT ASSESSEE HAS SUPPRESSED THE SALES BY SHOW ING THE SALES AT LOWER RATE WHEREAS FAIR MARKET VALUE OF THE LAND SO LD IS MUCH HIGHER AND THE TRANSACTIONS MUST HAVE BEEN CARRIED OUT AT THE HIGHER RATE. 11. LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE L D. A.O THAT THE ASSESSEE HAS NO RELATION WITH MR. KAMAL GOYAL AND T HERE IS NO FINANCIAL TRANSACTION EVER ENTERED WITH THE BROKER MR. KAMAL GOYAL. DETAILS SHOWN IN THE SEIZED DIARY DO NOT CORRELATE TO THE ACTUAL SALE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 12 TRANSACTION SINCE THE PARTIES SHOWN IN THE LOOSE DI ARY NEVER ENTERED INTO SUCH TRANSACTION AND THE SALE DEED WERE REGIST ERED IN OTHER NAMES. THERE IS NO INCRIMINATING MATERIAL FOUND DU RING THE COURSE OF SEARCH TO SHOW THAT ANY AMOUNT OVER AND ABOVE TH E SALE CONSIDERATION SHOWN IN THE REGISTERED SALE DEED HAS EVER BEEN RECEIVED FROM THE PURCHASERS. 12. HOWEVER LD. A.O WAS NOT CONVINCED AND HE MADE T HE ADDITIONS FOR VARIOUS ASSESSMENT YEARS APPLYING THE ESTIMATED RATE PER SQ. FEET OF LAND AT RS.500 RS.700/- RS.900/- RS.1100/ - AND RS.1300/- FOR ASSESSMENT YEAR 2009-10 TO 2013-14. AGAINST THE ALLEGED ADDITION OF SUPPRESSED INCOME ASSESSEE PREF ERRED APPEAL BEFORE LD. CIT(A) AND SUCCEEDED. 13. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L FOR ASSESSMENT YEAR 2012-13 AND 2013-14. 14. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTING THE ORDER OF LD. A.O SUBMITTED THAT THE FAIR MARKET VALUE OF THE LAN D SOLD BY THE ASSESSEE IS MUCH HIGHER THAN THE CONSIDERATION SHO WN IN THE BOOKS OF ACCOUNTS. SEIZED DOCUMENTS FROM THE PREMI SES OF MR. KAMAL GOYAL CLEARLY SPELLS OUT THE FACT OF ACTUAL S ALE PRICE AND THEREFORE THE ORDER OF LD. A.O SHOULD BE CONFIRMED. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 13 15. PER CONTRA LD. COUNSEL FOR THE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD TOOK US THROUGH THE PAPER BOOK FIL ED ON 10.09.2018 RUNNING FROM PAGE 1 TO 153 AS WELL AS T HE WRITTEN SUBMISSIONS FILED BEFORE US WHICH READS AS FOLLOWS: - AT THE OUTSET IT IS SUBMITTED THAT DESPITE AN EXTE NSIVE SEARCH PROCEEDING BEING UNDERTAKEN BY THE DEPARTMENT NO INCRIMINATIN G MATERIAL WAS FOUND AT APPELLANT'S PLACE. THE LD. AO SOLELY RELIE D ON THE NOTING IN THE DIARY SEIZED FROM THE PREMISES OF BROKER NAMELY SHR I KAMAL GOYAL. FURTHER THE ADDITIONS MADE BY THE LD. AO ARE BASED ON ESTIMATE GUESS WORK PRESUMPTIONS WHICH IS BAD ON FACTS AND IN LAW. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED TO THE LD. AO THAT THE APPELLANT DOES NOT HAVE AN BUSINESS REL ATION WITH THE BROKER SHRI KAMAL GO AL AND NO LOTS WERE SOLD THROUGH HIM. THE LD. AO DID NOT DISPUTE SUCH FACT BUT ALLEGED THAT THE BROKERAGE MI GHT HAVE BEEN PAID IN CASH TO THE SAID BROKER. SUCH ALLEGATION IS TOTALLY BASED ON PRESUMPTION AND HIGHLIGHTS THE FACT THAT ANY MATERIAL SEIZED FR OM SHRI KAMAL GOYAL PREMISES CANNOT BE TAKEN INTO CONSIDERATION FOR APP ELLANT'S CASE. MOREOVER THE LD. AO HIMSELF DISBELIEVED HIS PRESUM PTION WHERE NO ADDITION WAS MADE IN THE FORM OF IMAGINARY BROKERAG E HE ASSUMED TO HAVE BEEN PAID IN CASH. THE MAIN PREMISE OF THE ALLEGATION OF THE LD. AO WA S THAT THE RATES OF THE PLOT NUMBERS MENTIO.NED IN THE DIARY RANGE FROM RS. 1150/- TO RS. 1131/- PER SQ. FT. BUT ON THE CONTRARY THE APPELLAN T HAS SOLD WITHIN RANGE RS. 325/- TO RS. 350/- PER SQ. FT. SUCH ALLEG ATIONS DID NOT HOLD GOOD AS IT WAS SUBMITTED THAT LOT NUMBERS MENTIONED IN THE SEIZED DIAR DID NOT BELONGED TO THE APPELLANT. THE APPELLANT SU BMITTED THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 14 DEVELOPMENT AGREEMENT TO ESTABLISH THE FACT THAT IT S SHARE OF PLOTS IS DISTINCT FROM THE PLOT NUMBERS MENTIONED IN THE DIA RY SEIZED. FURTHER WITHOUT PREJUDICE TO THE ABOVE-MENTIONED CONTENTION IT WAS ALSO SUBMITTED THAT THE SALE CONSIDERATION IS PRE-DECIDE D AND NEGOTIATED AT THE TIME OF BOOKING OF PLOT. THE NEXT INCREASE OR D ECREASE IN THE MARKET PRICE OF THE PROPERTY HAS NO EFFECT TO THE ACTUAL S ALE CONSIDERATION DECIDED WITH BUYER IN LAUNCHING THE PROJECT. THIS F ACT WAS VERIFIABLE FROM THE BOOKS THAT MOST OF THE BOOKINGS OF LOTS WERE MA DE IN THE COMMENCEMENT PHASE OF THE PROJECT ONLY. THUS THE APPLICATION OF ESTIMATED SALE RATES IS HIGHLY ERRONEOUS AND BAD ON FACTS AND IN LAW. ALSO DURING THE COURSE OF SEARCH NOTHING INCRIMIN ATING WAS FOUND RELATED TO SUPPRESSION OF SALE. NO OTHER EVIDENCE W HETHER DOCUMENTARY OR CIRCUMSTANTIAL PERTAINING TO RECEIPT OF ON-MONE Y FOR ANY PLOT SOLD BY THE APPELLANT WERE FOUND IN COURSE OF SEARCH. IT IS ALSO PERTINENT TO MENTION NOTHING INCRIMINATING IN THE FORM OF CASH V ALUABLES OR UNACCOUNTED ASSETS WERE FOUND THERE WAS NO CORROBOR ATIVE EVIDENCE IN THE HANDS OF LD. AO TO JUSTIFY SUCH ALLEGED ADDITIO NS. THAT THE BOOKS OF THE ACCOUNT OF THE COMPANY ARE DU LY AUDITED UNDER THE PROVISION OF THE COMPANIES ACT AND U/S. 44AB OF THE INCOME TAX ACT 1961. NEITHER THE AUDITOR NOR THE DEPARTMENT HAVE R AISED ANY DOUBT / DISCREPANCY IN THE BOOK RESULTS. THE LD. AO TOOK A CONTRADICTOR STAND WHERE ON THE ONE HAND HE ACCEPTED THE BOOKS RESULTS AND ON THE OTHER ALLEGED ADDITION IN THE NATURE OF ESTIMATED SALE PR ICE WAS MADE. DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT HA D MADE A SPECIFIC REQUEST THAT IF ANY RELIANCE IS LACED ON THE SEIZED DIARY THEN AN OPPORTUNITY TO EXAMINE SHRI KAMAL GOYAL MAY KINDLY BE PROVIDED BUT SUCH REQUEST WAS NOT CONSIDERED BY THE LD. AO. THUS THE ALLEGED ADDITION MADE BY THE LD. AO WAS IN TOTAL IGNORANCE TO THE PRINCIPLES OF NATURAL JUSTICE. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 15 THE DEPARTMENT HAD RECORDED STATEMENTS OF BROKER SH RI KAMAL GOYAL DURING THE SEARCH PROCEEDINGS U/S 132(4) WHERE ON O ATH HE HAD STATED THAT NOTING IN THE DIARY ARE TRADE INQUIRIES. DURIN G THE COURSE OF APPELLANT HAD DEMONSTRATED THE FACT THAT NOTING MEN TIONED SEIZED DIARY IN THE FORM OF BUYERS SALE RATES & DATE OF SALE ETC . ARE NOT MATCHING WITH THE ACTUAL REGISTERED DOCUMENTS. THUS SUCH DEMONSTR ATION C1EARL CORROBORATES THE FACT THAT THE NOTING IN THE SEIZED DIARY WERE NOT RELATED TO THE APPELLANT AND WERE MERELY TRADE INQUIRES WHI CH HAD NOT CRYSTALIZED INTO AN MATERIAL TRANSACTION. ALSO THIS FACT ADEQUATELY PROVES THAT THE SEIZED DIARY BEING RELIED FOR THE ALLEGED ADDITION IS NOTHING BUT A 'DUMB DOCUMENT' AS DEPARTMENT FAILED TO LINK THE SA ME WITH ANOTHER CORROBORATIVE EVIDENCE AND THEREFORE IT HAS NO EVID ENTIARY VALUE IN THE EYES OF LAW. THE FOLLOWING IS THE SUMMARY OF JUDICIAL PRONOUNCE MENTS IN SUPPORT TO OUR CONTENTIONS AND MAY KINDLY BE CONSID ERED BY YOUR HONOURS:- S.NO. CITATION PROPOSITION 1 CIT VS KABUL CHAWLA 380 ITR 573 (DEL) SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME OF ASSESSEES. 2 SHRI KAMAL KISHORE KOTWANI V S. CIT I.T.(SS) ANO. 186/IND/2016 DTD 04.07.18 (HONBLE BENCH OF ITAT INDORE) 3 CITVS S.M. AGRAWAL 293 ITR 043(DEL) NO ADDITION ON THE BASIS OF DOCUMENT CAN BE MADE UNTIL CONTENTS OF IT ARE PROVED AGAINST THE PERSON AND THE SAME IS NOTHING BUT DUMB DOCUMENT 4 CIT VS. VED PRAKASH CHOUDHARY 305 ITR 245 (DEL) 5 CIT VS. KANTILAL PRABHUDAS PATEL 296 ITR 568 MP 6 ACIT VS NAROTTAM MISHRA (2018) 32 ITJ 510 (INDORE) NO ADDITION ON THE BASIS OF DOCUMENT RECOVERED FROM THIRD PARTY WITHOUT ANY CORROBORATIVE EVIDENCES. 7 CIT VS. ANIL BHALLA 322 ITR 191(DEL) 8 CIT VS VATIKA LANDBASE P LTD 383 ITR 320 (DEL) N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 16 9 DCIT VS SHRI MAHESH BANSAL 499 IND 2018 10 CIT(I) VS SHRI PUKHRAJ SONI 585 IND 2015 WHEN REGISTERED SALE DEEDS ARE AVAILABLE THEN LOOSE PAPER FOUND AT THE PREMISES OF OTHER PERSON NOT CONNECTED WITH ASSESSEE CAN NOT BE RELIED TO CONTRADICT VARY ADDING TO OR SUBTRACTING FROM ITS TERMS (I.E. REGISTERED SALE DEED) 11 CIT VS. SUNITA DHADDA (SUPREME COURT) DT 28.03.18 1. NOW THE DEPARTMENT HAD RAISED ADDITIONAL GROUNDS O F APPEAL WHICH HAVE MAINLY CONTENDED THE ADMISSIBILITY OF THE REGISTERE D SALE DEEDS AS AN EVIDENCE WITHOUT IT BEING REFERRED TO LD. AD U/R 46 A. IN THIS CONTEXT IT IS SUBMITTED THAT A DISTINCTION NEEDS TO BE MADE BETWE EN ADDITIONAL EVIDENCE U R 46A AND CLARIFICATORY EVIDENCE. THE SA LE REGISTRIES ARE PUBLIC DOCUMENT AND THE DOCUMENTS IN PUBLIC DOMAIN CANNOT BE TERMED AS ADDITIONAL EVIDENCE. SUCH DOCUMENTS ARE IN THE NATU RE OF CLARIFICATORY EVIDENCE AND THAT THE LD. CIT(A) HAVING CO-TERMINUS POWERS IS ENTITLED TO TAKE JUDICIAL NOTICE OF EVENTS RELEVANT TO THE ISSU E FOR ADJUDICATION. WE FURTHER SUBMIT THAT IN THE INSTANT CASE NO INQUI RY/INVESTIGATION WAS UNDERTAKEN BY THE LD. AO TO UNEARTH THE TRUE FACTUA L POSITION AND MERE RELIANCE WAS PLACED ON THE PARTICULARS MENTIONED IN THE SEIZED DIARY. THE SAME OBSERVATIONS ARE ALSO EVIDENT FROM ORDER OF LD . CIT(A). THE LD. AO WAS DUTY BOUND TO COLLECT COMPLETE MATERIAL AND TAK E THE CASE TO ITS LOGICAL END. WITHOUT PREJUDICE TO THE ABOVE DUE TO SUCH REASON ALSO THE REGISTERED SALE DEEDS CANNOT BE CONSIDERED AS ADDIT IONAL EVIDENCE BUT A CLARIFICATORY EVIDENCE AS IT BEING AN EXTENSION OF SAME TRAIL INITIATED BY THE LD. A.O. THE SALE REGISTERS BEING A LEGALLY EX ECUTED DOCUMENT HAS CLARIFIED THAT THE PARTICULARS MENTIONED IN THE SEI ZED DOCUMENTS VARY WITH THE ACTUAL TRANSACTION. HENCE WE HUMBLY SUBMIT THAT THE LD. CIT(A) WAS NOT REQUIRED TO CONFRONT THE SAME MATERIAL TO A O AND THERE IS NO N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 17 VIOLATION OF RULE 46A. WE PLACE RELIANCE IN THE CASE OF DY. CIT V RUNGTA MINES LTD (IT (SS) APPEAL NOS. 30 TO 33 (KOL) OF 2015 DATED 9-3-2018 WHICH HAS HELD AS UNDER ON THE ISSUE OF PUBLIC DOCUMENTS NOT BEING AD DITIONAL EVIDENCE 25. IN THE REVISED GROUNDS OF APPEAL THE DEPARTMEN T HAS CHALLENGED THE AFORESAID ACTION OF THE LD. CIT(A) AS VIOLATION OF RULE 46A WHEREIN THE LD. CIT(A) HAS NOT CONFRONTED THESE MATERIALS WITH AO A ND ELICITED A REMAND REPORT BEFORE TAKING INTO CONSIDERATION THESE NEW M ATERIALS. WHICH THE AO WAS NOT PRIVY TO DURING ASSESSMENT PROCEEDINGS. WE NOTE THAT AS PER THE SCHEME OF THE ACT THE LD. CIT(A) ENJOYSS PLENARY & CO-TERMINUS POWERS AS THAT OF AO WHILE DECIDING THE APPEAL BEFORE HIM. TH E APPEL1ATE PROCEEDING BEFORE THE LET CIT(A) IS AKIN TO CONTINUATION OF ASSESSMENT PROCEE DINGS. THE LET CIT(A) AFTER GIVING NOTICE TO ASSESSEE HAS POWER TO EVEN ENHANCE THE ASSESSMENT MADE BY AO. AS PER RULE 46A OF INCOM E-TAX RULES THE LD. CIT(A) HAS TO GIVE OPPORTUNITY TO AO BEFORE ADMITTI NG ADDITIONAL EVIDENCES. WE NOTE THAT THE LD. CIT(A) HAS BASED HIS DECISION ON THE MATERIALS PRODUCED BEFORE THE AO. HOWEVER IN ADDITION TO IT HAS GONE THROUGH THE FINANCIAL RESULT OF SIMILAR COMPANIES LOCATED AT OR ISSA AND WHICH ARE ENGAGED IN THE SAME ACTIVITY AS THAT OF THE ASSESSE E COMPANY. THE ANNUAL REPORTS OF THREE COMPANIES I) M/S. TATA SPONGE IRON LTD. (II) M/S. ORISSA SPONGE IRON & STEEL LTD. AND (III) M/S. MSP STEEL & POWER LTD. HAVE BEEN LOOKED INTO BY THE ID CIT(A) AND COMPARED THE CONSU MPTION OF IRON ORE WITH THAT OF ASSESSEE COMPANY WHICH IS AS UNDER: FINANCIAL YEAR TATA SPOUGE IRON ORISSA SPONGE IRON MS? STEEL & RUNGTA MINES LTD. LTD. & STEEL LTD. POWER LTD. (ASSESSEE) 2006-07 L59 1.51 2.09 1.65 2007-0S 1.68 1.55 2.04 1.69 2008-09 1.63 1.61 2.45 1.67 2009-10 1.59 1.79 1.93 1.65 2. 3. 4. 26. THE AFORESAID CHART WAS DRAWN BY THE LD. CIT(A) AFTER PERUSAL OF THE ANNUAL REPORT OF THE AFORESAID COMPANIES WHICH ARE IN PUBL IC DOMAIN AND CANNOT BE TERMED AS ADDITIONAL EVIDENCE. THE LD. CIT(A) WHO I S DISCHARGING THE APPELLATE JURISDICTION OVER THE DECISION OF A QUASI JUDICIAL AUTHORITY I.E. AO AND WHO ENJOYS PLENARY & CO-TERMINUS POWERS ARE ENTITLED TO TAKE JUDICIAL NO TICE OF EVENTS RELEVANT TO ISSUE FOR ADJUDICATION AND IN THIS CASE HAS TAKEN NOTE OF THE ANNUAL REPORT OF THESE THREE COMPANIES TO FORM AN OPINION ON THE ISSUE IN QUESTION CANNOT BE FAULTED. AFTER COMPARING THE RESULTS OF C ONSUMPTION OF IRON ORE BY SIMILAR COMPANIES ENGAGED IN SAME BUSINESS IN STATE OF ORISSA THE ID CIT(A) CAME TO THE CONCLUSION THAT IT IS NOT POSSIBLE THAT FE CONTENT OF IRON ORE CAN BE UNIVERSALLY HELD AS MORE THAN 65. WHICH IS EVIDENT FROM A GLANCE OVER THE RESULTS GIVEN IN THE CHART SUPRA. FURTHER THE LD. C1T(A) RE FERRED TO INFORMATION BULLETIN ISSUED BY ANDHRA PRADESH POLLUTION CONTROL BOARD WH ICH SUGGESTED YIELD RATIO OF 1.60 TO 1.75. THESE WE NOTE ARE PUBLIC DOCUMENTS WH ICH ARE READILY AVAILABLE IN PUBLIC DOMAIN WHICH CANNOT BE TERMED AS ADDITIONAL EVIDENCE. WE NOTE THAT IT IS NOT THE CASE OF THE DEPARTMENT THAT THESE REPORT S WHICH ARE TAKEN NOTE BY THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 18 ID CIT(A) ARE FALSE AND CONCOCTED AND THEREBY THE ID CIT(A) WAS MISLED TO PASS THE IMPUGNED ORDER. MOREOVER WE NOTE EVEN IF THESE DOCUMENTS ARE EXCLUDED THEN ALSO THE IMPUGNED ORDER OF ID CIT(A) SURVIVES. THEREFORE THERE IS NO MERIT IN THE CONTENTION OF THE DEPARTMENT RAISED IN THIS REVISED GROUND. 16. SINCE SIMILAR ISSUE RELATING TO TWO DIFFERENT A SSESSEE(S) ARISING OUT OF THE COMMON FACTS ARE UNDER CONSIDERATION OP PORTUNITY WAS ALSO GIVEN TO THE LD. COUNSEL FOR THE ASSESSEE APPE ARING ON BEHALF OF M/S N.R. COMPANY WHO TOOK US THROUGH THE PAPER BOOK RUNNING FROM PAGE 1 TO 89 AND RELIANCE WAS PLACED ON THE FO LLOWING WRITTEN SUBMISSIONS SPECIFICALLY WITH REGARD TO THE ALLEGED UNDISCLOSED SALES RECEIPTS OF SALE OF PLOTS OF N.R. ESTATES. I) THE ASSESSEE SUBMITS THAT THE ABOVE ADDITION WAS M ADE BY LEARNED AO SOLELY RELYING UPON CERTAIN INFORMAT ION PROVIDED TO HER BY DCIT (CENTRAL) INDORE. ACCORDING TO THE SAID INF ORMATION DURING THE COURSE OF THE PROCEEDINGS OF SEARCH AT ONE APOLLO G ROUP OF INDORE AND CERTAIN OTHER PERSONS INCLUDING THE RESIDENTIAL PRE MISES OF A BROKER NAMED KAMAL GOYAL CERTAIN DOCUMENTS WERE FOUND AND ACCORDING TO THE SAID DOCUMENT AND IN PARTICULAR A DIARY SEIZED FROM RESIDENTIAL PREMISES OF THE BROKER KAMAL GOYAL IT WAS REVE ALED THAT THE RATES OF PLOTS IN THE COLONY NR ESTATE WERE IN T HE RANGE OF RS 1150 TO RS 1311 PER SQ FT. AS ACCORDING TO THE INFORMA TION THESE WERE THE RATES QUOTED TO THE CUSTOMERS BY SAID BROKER KAMAL GOYAL THE DCIT TAKING COGNIZANCE OF THE INFORMATION AVAILABLE FR OM THE DIARY SEIZED FROM BROKER KAMAL GOYAL WORKED OUT YEAR WISE ESTIMA TED AVERAGE RATES AND FORWARDED THE INFORMATION TO THE AO . BASED ON THE SAID INFORMATION AND THE ESTIMATION OF AVERAGE RATES AS WORKED OUT B Y DCIT (CENTRAL) INDORE AO ASSUMED THAT THE RATES AT WHICH THE ASSE SSEE HAS SOLD PLOTS N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 19 TO VARIOUS BUYERS ARE NOT ACTUAL RATES AND THE SALE OF PLOTS MIGHT HAVE BEEN EFFECTED AT HIGHER RATES. THE AO THEREFORE P ROPOSED TO TREAT THE DIFFERENCE BETWEEN THE ESTIMATED RATES AS COMPUTED BY DCIT (CENTRAL) INDORE ON THE BASIS OF THE INFORMATION GATHERED BY HIM FROM THE BROKERS DIARY AND THE ACTUAL RATES AS PER THE BOOKS O F ACCOUNTS OF THE ASSESSEE AS UNACCOUNTED INCOME OF THE ASSESSEE. T HE LEARNED AO ACCORDINGLY REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ADDITION AS PROPOSED BE NOT MADE TREATING THE DIFFERENCE BET WEEN THE ESTIMATED RATE AND ACTUAL RATE AS UNACCOUNTED INCOME. IT IS I MPORTANT TO BRING IT TO THE NOTICE OF THIS HONBLE AUTHORITY THAT THE ENTIR E ASSUMPTION OF THE AO REGARDING SALES OF HIGHER RATE WAS BASED SOL ELY UPON THE ADVICE OF HIGHER AUTHORITY VIZ. DCIT-(CENTRAL) INDORE WHO HAD WORKED OUT THE ESTIMATED PREVAILING RATES ON THE BASIS OF HI S OWN IMAGINATION WITHOUT ANY CONCRETE / COGENT EVIDENCE / MATERIAL TO SHOW THAT ASSESSEE HAS IN FACT EFFECTED ANY SUCH SALES AT HIGHER RATES THAN THOSE REFLECTED IN THE BOOKS OF ACCOUNTS. THE ENTI RE ADDITION WAS THUS BASED UPON THE ADVICE / DICTATE OF THE HIG HER AUTHORITY WITHOUT ANY INDEPENDENT APPLICATION OF THE MIND OF AO AND WITHOUT ANY ATTEMPT TO VERIFY AS TO WHETHER THE ASSESSEE HAS IN FA CT EFFECTED ANY SALES AT HIGHER RATES. THE AO BEING A QUASI- JUDICIAL AUTHORITY IS REQUIRED TO MAKE HIS ASSESSMENT INDEPENDENTLY BY APPLICATION OF HIS OWN MIND AND ASSESSMENT MERELY ON THE DICTATE OR ADVIC E OF ANOTHER AUTHORITY IS VITIATED IN LAW AND DESERVES TO BE SET ASIDE ON THAT GROUND ALONE. RELIANCE IN THIS RESPECT IS PLACED UPON FOLLOWING D ECISIONS:- A) IN CASE OF DINSHAW DARAVSHAW SHROFF VS CIT REPORTE D IN 11 ITR 172 B) IN CASE OF UNION OF INDIA & OTHERS VS. SHEO SHANKER SITARAM & ANOTHER REPORTED IN 95 ITR 523 C) IN CASE OF J.K. SYNTHETICS LTD & OTHER VS. CBDT & OTHERS REPORTED IN 83 ITR 335 N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 20 D) IN CASE OF THE HYDERABAD ALLWYN METAL WORKS LTD. VS . DCCT REPORTED IN 29 STC 153 E) IN CASE OF ELPHINSTONE PICTURE PALACE VS UNION OF I NDIA & ANOTHER REPORTED IN 74 ITR 115 F) IN CASE OF AMBICA OIL & GENERAL MILLS VS. TT OFFICE R CUM ASSESSING OFFICER REPORTED IN 158 TAXMAN 167(DEL) G) IN CASE OF GENESYS INTERNATIONAL CORPORATION LTD. V S. ACIT REPORTED IN (2012) 28 TAXMAN.COM 134 II) THE ASSESSEE SUBMITS THAT IN RESPONSE TO THE ABOVE PROPOSAL OF AO FOR MAKING ADDITION ON THE ASSUMPTION OF SALES AT HIGHER RATE THE ASSESSEE SUBMITTED DETAILED REPLIES FROM TIME TO TIME AND EMPHATICALLY DENIED THE ALLEGATION REGARDING UNACC OUNTED INCOME OR SALES AT HIGHER RATE THAN THOSE REFLECTED IN RELEV ANT DOCUMENTS AND THE BOOKS OF ACCOUNTS. THE SUMMARY OF THE REPLIES SUBMITTED BY ASSESS EE IS AS UNDER:- A) REPLY DATED 27/11/2015 ---IN RESPONSE TO THE SUMMONS DATED 23/11/2015 ISSUED BY AO REQUIRING THE ASSESSE E TO SHOW CAUSE AGAINST PROPOSED ADDITION OF THE DIFF ERENCE BETWEEN THE RATES AS PER BROKERS DIARY AND THE ACT UAL RATES AS PER THE BOOKS OF THE ASSESSEE IT WAS SUBMITTED TH AT THE ASSESSEE HAS NO BUSINESS CONNECTION WITH SAID BROK ER KAMAL GOYAL AND THE MATERIAL / INFORMATION CONTAINED IN H IS DIARY COULD NOT BE USED AGAINST THE ASSESSEE FOR ANY MAK ING ALLEGATION OF SALES AT HIGHER RATES . IN SUPPORT O F ITS CONTENTION THAT ASSESSEE HAS NO CONNECTION WITH SAID BROKER KAMAL GOYAL ASSESSEE SUBMITTED DETAILS OF BROKE RS WHO HAD WORKED FOR ASSESSEE ALONG WITH DETAILS OF THE BROKE RAGE PAID TO THEM . THE ASSESSEE ALSO SUBMITTED A DETAILED LIST OF THE PLOTS SOLD BY IT DURING THE YEAR UNDER CONSIDERATION ALON G WITH N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 21 RESPECTIVE PLOT NOS. THEIR RESPECTIVE AREAS DATE S OF SALES SALE PRICE ETC. REFUTING THE PROPOSAL OF AO TO MAKE ADDI TION ON THE BASIS OF GUIDELINE VALUE FOR STAMP DUTY PURPOSES T HE ASSESSEE SUBMITTED THAT NO SUCH ADDITION COULD BE MADE AS TH E PROVISIONS OF SECTION 50C WERE NOT APPLICABLE TO TH E PRESENT CASE. B) REPLY DATED 03-10-2015 ---- THE ASSESSEE REITERATED THE FACT THAT IT HAS NO CONNECTION WITH KAMAL GOYA L AND HE HAD NEVER ACTED AS BROKER FOR ASSESSEE .THE ASSES SEE FURTHER EXPLAINED THAT SINCE THE ASSESSEE WAS THE ORIGIN AL SELLER OF THE PLOTS THE PRICE AT WHICH THE PLOTS WERE SOLD T O THE BUYER BEING A LAUNCHING PRICE WAS BOUND TO BE LOWER AN D MERELY BECAUSE SUBSEQUENTLY THE RATES IN THE COLONY HAVE IMPROVED AND THE PLOTS ARE BEING DEALT WITH AT HIGHER RATE DID NOT MEAN THAT ASSESSEE HAS SOLD THE PLOTS AT HIGHER RATES T HAT TOO WITHOUT ANY SPECIFIC EVIDENCE THAT THERE IS ANY UNDERSTATEMENT OF CONSIDERATION IN ANY OF THE SALES EFFECTED BY THE ASSESSEE . THE ASSESSEE HAD ALSO CONTENDED THA T THE INFORMATION CONTAINED IN THE BROKERS DIARY DID NOT RELATE TO THE ASSESSEES TRANSACTIONS. IN FACT THE DIARY WAS IN NATURE OF A DUMB DOCUMENT WITHOUT CONTAINING ANY PARTICULARS OR ANY CONCRETE MATERIAL TO CONNECT THE ASSESSEE WITH THE SAME. THE DIARY DID NOT DISCLOSE THE NAME OF BUYER SELLER E TC . NO ASSUMPTION COULD BE MADE THAT NOTING IN THE DIARY R ELATE TO ASSESSEE S TRANSACTIONS. THE ASSESSEE RELIED UPON THE PROVISIONS OF SECTION 49 OF INDIAN REGISTRATION ACT AND SUBMITTED THAT SINCE THE TRANSACTIONS OF SALE OF PL OTS RELATE TO IMMOVABLE PROPERTY COMPULSORILY REGISTERABLE UNDER THE INDIAN REGISTRATION ACT NO OTHER DOCUMENT EXCEPT THE REGISTERED SALE DEED COULD BE ACCEPTED AS EVIDENCE IN RESPECT N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 22 OF SUCH TRANSACTION. ASSESSEE ALSO CONTENDED THAT IN ABSENCE OF ANY CORROBORATIVE EVIDENCE NO ADDITION ON THE B ASIS OF THE INFORMATION FROM BROKERS DIARY COULD BE MADE IN TH E HANDS OF ASSESSEE . THE ASSESSEE ALSO SUBMITTED THAT THE BUR DEN TO PROVE THE ALLEGATION WAS SOLELY UPON THE DEPARTMENT AND NO ADDITION COULD BE MADE WITHOUT BRINGING ON RECORD A NY COGENT AND CONCRETE EVIDENCE. C) SUBMISSION DATED 23/12/2015 --- THE ASSESSEE REITERATED THAT IT HAD NO CONNECTION WITH BROKER KAMAL GOYAL B Y SUBMITTING THE DETAILS/ NAMES OF BROKER WHO HAD DE ALT WITH ASSESSEE ALONG WITH PLOT NOS. IN RESPECT OF WHICH BROKERAGE WAS PAID TO THEM . COPIES OF A/CS OF THE BROKERS WH O HAD ACTED AS BROKERS FOR ASSESSEE WERE ALSO FILED. NOT ONLY THIS THE ASSESSEE ALSO SUBMITTED COPIES OF ACCOUNTS OF ALL BUYERS / PARTIES TO WHOM THE SALES WERE EFFECTED BY ASSESSEE IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO SU BMITTED A DETAILED CHART WITH NAMES OF THE PARTIES TO WHOM PLOTS WERE SOLD ALONG WITH DETAILS OF PLOT NOS. AREAS RATES AT WHICH THE PLOTS WERE SOLD AND BROUGHT TO THE NOTICE THAT NONE OF THE TRANSACTIONS MATCHED WITH THE INFORMATION COLLECTED FROM BROKERS DIARY . BY BRINGING ON RECORD THE MISMATC H BETWEEN THE NAMES THE DATES OF TRANSACTIONS PLOT AREAS ETC. AS COLLECTED FROM BROKERS DAIRY AND THE ACTUAL TRANS ACTIONS EFFECTED BY ASSESSEE THE ASSESSEE SUCCESSFULLY DE MOLISHED THE ALLEGATIONS OF THE AO AND ALSO BROUGHT ON RECOR D THE FACTS THAT THE INFORMATION AVAILABLE IN THE BROKERS DIAR Y COULD NOT BE SAID TO BE RELIABLE EVIDENCE FOR MAKING ANY ADDI TION IN THE HANDS OF ASSESSEE AND NO ADDITION COULD BE MADE SOL ELY ON THE BASIS OF INFORMATION CONTAINED IN THE BROKERS DIAR Y . N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 23 III) THE ASSESSEE T SUBMITS THAT IGNORING THE SUBMISSION S MADE BY ASSESSEE AND IGNORING THE FACTUAL POSITION THAT NONE OF THE TRANSACTIONS ALLEGED IN THE BROKERS DIARY COUL D BE CO- RELATED WITH THE ASSESSEES ACTUAL TRANSACTIONS LE ARNED AO HAS ARRIVED AT THE CONCLUSION THAT THE ASSESSEE MIG HT HAVE SOLD THE PLOTS AT HIGHER RATES AND HAS MADE AN ADDI TION IN THE HANDS OF THE ASSESSEE ON THE BASIS OF ESTIMATED RATE OF SALE OF RS 1300/- PER SQ. FT. . IT IS IMPORTANT T O NOTE THAT NO ATTEMPT HAS BEEN MADE BY AO TO BRING ANY PO SITIVE COGENT OR CONCRETE EVIDENCE TO PROVE THAT THE ASSES SEE HAS IN FACT EFFECTED SALES OF THE PLOTS IN QUESTION AT THE RATES HIGHER THAN THE RATES RECORDED IN THE REGISTERED SA LE DEEDS . IT IS FURTHER IMPORTANT TO NOTE THAT THE LEARNED AO ALSO MISERABLY FAILED TO PROVE THE NEXUS BETWEEN THE INF ORMATION CONTAINED IN BROKERS DIARY AND THE ASSESSEE DESPIT E SPECIFIC INFORMATION PROVIDED BY ASSESSEE REGARDING MISMATCH IN BROKERS DIARY AND ASSESSEES TRANS ACTIONS. AS A MATTER OF FACT THE AO DID NOT MAKE ANY ATTEMPT TO VERIFY AS TO WHETHER IN FACT THE SAID INFORMATION R ELATES TO ASSESSEES TRANSACTIONS BUT SHE PROCEEDED ON ASSUMPTION THAT THE ASSESSEE HAS SOLD THE PLOTS AT HIGHER RATES OBVIOUSLY BECAUSE OF ADVICE OF THE HIGHER AUTHORITY.UNDER THE CIRCUMSTANCES THE NOTINGS IN TH E DIARY OF KAMAL GOYAL CAN HARDLY CONSTITUTE EVIDENCE AGA INST ASSESSEE MUCH LESS RELIABLE COGENT POSITIVE OR ACCEPTABLE AND THE ADDITION BASED ON THE SAME IS UNSUSTAINABLE IN LAW . IV) IN RESPONSE TO THE SUMMONS ISSUED BY THE AO THE RE PLY SUBMITTED BY THE BROKER KAMAL GOYAL IS ABSOLUTELY V AGUE AND DOES NOT ESTABLISH ANY NEXUS WITH THE INFORMATI ON N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 24 CONTAINED IN HIS DIARY AND THE APPELLANT . THE SAID REPLY CAN BY NO STRETCH OF IMAGINATION BE TREATED AS AN E VIDENCE MUCH LESS COGENT OR POSITIVE EVIDENCE TO LEVEL AN A LLEGATION AGAINST THE ASSESSEE REGARDING SALE OF PLOTS AT THE RATES MENTIONED IN HIS DIARY . THE SAID PERSON KAMAL GOYA L HAS NOT UTTERED A SINGLE WORD WHICH CAN LEAD TO THE INF ERENCE THAT HE HAS AT ANY TIME ACTED AS BROKER FOR THE ASS ESSEE NOR THE SAID LETTER CAN CONSTITUTE AN EVIDENCE TO S AY THAT THE ASSESSEE HAS EFFECTED SALE OF PLOTS THROUGH HIM OR THROUGH THE CHAIN OF BROKERS AS ALLEGED BY HIM . MO REOVER THE PLOT NOS. REFERRED TO IN HIS DIARY AS WELL AS R EPLY DO NOT MATCH WITH THE PLOT NOS. SOLD BY THE ASSESSEE. AS A LREADY STATED ABOVE THE INFORMATION CONTAINED IN HIS DAIRY REGARDING THE PLOT NOS. AS WELL AS THE PARTIES DOES NOT TALLY WITH THE ACTUAL SALES EFFECTED BY THE ASSESSEE. UND ER THE CIRCUMSTANCES THE ADDITION MADE BY AO PLACING HEAV Y RELIANCE UPON THE BROKERS DIARY IS IN FACT AN ADDI TION WITHOUT ANY BASIS TO SUPPORT THE SAME AND T HUS WAS RIGHTLY DELETED . IN FACT THERE IS NO EVIDENCE AT ALL EITHER AVAILABLE IN THE BROKERS DIARY OR BROUGHT ON RECOR D BY AO WHICH CAN JUSTIFY THE CONCLUSION REGARDING UNACCOUN TED SALES DRAWN BY AO . V) THE ASSESSEE FURTHER SUBMITTED THAT NO ATTEMPT H AS BEEN MADE BY AO TO CORROBORATE THE INFORMATION FROM THE BROKERS DIARY WITH THAT OF ASSESSEES TRANSACTION OF SALE OF PLOT BEFORE MAKING ALLEGATION OF RECEIPT OF UNACCOU NTED MONEY IN SALE OF PLOTS. AS A MATTER OF FACT THE ASS ESSEE HAD HIMSELF PROVIDED ALL DETAILS OF THE TRANSACTION OF SALE OF PLOTS EFFECTED BY ASSESSEE DURING PERIOD UNDER CONSIDERATION WHICH CONTAINED DETAILS OF PLOT NOS. DATE OF N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 25 SALES NAMES OF PARTIES IN WHOSE FAVOR THE DOCUMENT S WERE REGISTERED AND THE SALE CONSIDERATION RECEIVED BY ASSESSEE BUT THE AO EVEN DID NOT SUMMON THE RESPECTIVE BUYER S TO VERIFY THE FACTS . THE ASSESSEE THEREFORE SUBMIT TED THAT IN ABSENCE OF ANY NEXUS BETWEEN THE INFORMATION CONTAI NED IN BROKERS DIARY AND THE ASSESSEES TRANSACTION NO A DDITION ON THE BASIS OF SUCH VAGUE UNCERTAIN AND UNCORROBO RATED INFORMATION COULD BE MADE IN THE HANDS OF THE ASSES SEE. THE ASSESSEE SUBMITTED THAT IN CASE OF A TRANSACT ION OF SALE / PURCHASE OF IMMOVABLE PROPERTY WHICH IS REQU IRED TO BE COMPULSORILY REGISTERED THE PARTIES TO TRANSACT ION ARE SELLER BUYER AND TWO INDEPENDENT WITNESSES. SURPR ISINGLY THE AO RESTED HIS CONCLUSION ONLY ON NOTINGS OF BR OKERS DIARY WITHOUT EVEN MAKING ATTEMPT TO VERIFY THE FAC TS FROM THE PARTIES TO TRANSACTIONS VIZ. THE BUYER OR THE WITNESSES . IN VIEW OF THIS UNLESS THERE IS CLINCHING EVIDENCE TO SHOW THAT ANY MONEY / CONSIDERATION OVER AND ABOVE THE CONSIDERATION STATED IN THE DOCUMENTS HAS PASSE D AND HAS ACTUALLY BEEN RECEIVED BY APPELLANT NO ADDITION COULD BE MADE MERELY ON THE B ASIS OF IMAGINATION PRESUMPTION SURMISES AND CONJECTURES AND THE BURDEN TO PROVE THAT ANY EXCESSIVE CONSIDERATIO N HAS PASSED IN THE TRANSACTION WAS ENTIRELY UPON THE DEPARTMENT. RELIANCE IN THIS RESPECT IS PLACED ON F OLLOWING JUDGMENTS A) JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF N. RAMANNA REDDY VS. JCTO REPORTED IN (1971) 28 STC 68 3 WHERE IT IS HELD :-- THAT IF THE TAXING AUTHORITY INTENDS TO BRING TO T AX THE TURNOVER OF DEALER WHICH ACCORDING TO HIM HA S ESCAPED ASSESSMENT BY REASON OF DELIBERATE ATTEMPT ON TH E PART OF N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 26 DEALER TO AVOID NET OF TAXATION THEN IT IS FUND AMENTAL THAT THE DEALER SO CALLED UPON SHOULD BE GIVEN A JUS T AND FAIR TRIAL AND INDEED A FAIR OPPORTUNITY TO EXPLAIN H IMSELF WITH ALL MATERIAL ON WHICH HE COULD SUPPORT HIS CASE . THE ESSENTIAL ELEMENT IN SALES ARE SELLER BUYER THE GOODS (HERE THE PLOTS) AND THE CONSIDERATION FOR SALE OR PURCHA SE OF GOODS AND UNLESS A NEXUS IS ESTABLISHED BETWEEN TWO SUCH PERSONS AND CONVINCING PROOF IS AVAILABLE TO SHOW THAT CONS IDERATION DID PASS AS A RESULT OF SUCH SALE IT WOULD BE DI FFICULT TO ASSUME THAT A SALE OF GOODS FROM ONE PERSON TO OTHE R HAS RESULTED. WHERE THERE IS NO CLINCHING EVIDENCE TO E STABLISH JURAL RELATIONSHIP OF VENDOR AND PURCHASER THE ONU S ON THE DEPARTMENT BECOME HEAVIER FOR IT SHOULD SCRUTINIZ E THE MATERIAL WITH LYNX EYE AND AFFORD TO THE ASSESSEE AT EVERY MATERIAL POINT OF TIME AN OPPORTUNITY TO COUNTERMAN D THE SAME OR LET IN EVIDENCE TO OUTWEIGH THE WEIGHT OF SUCH MATERIAL . IF THE PRINCIPLES LAID DOWN IN THE ABOVE CASE ARE APPLIED TO THE FACTS OF THE PRESENT CASE IN ABSENCE OF ANY AT TEMPT ON THE PART OF AO TO ESTABLISH NEXUS OF THE MATERIAL WITH THE ASSESSEE AND IN ABSENCE OF ANY CLINCHING EVIDENCE AGAINST TH E ASSESSEE HAVING BEEN BROUGHT OUT BY DEPARTMENT DEPARTMENT S BURDEN IS NOT DISCHARGED AND THE ADDITION MUST FALL TO THE GR OUND . THE SAME PRINCIPLES ARE REITERATED IN FOLLOWING JUD GMENTS . B) CIT VS. VEDPRAKASH CHOUDHARY REPORTED IN (2008) 305 ITR 245 (DEL) IN THIS CASE ALSO THE ADDITION BASED ON THE ALLEGATION OF TRANSFER OF MONEY WAS HELD TO BE WITHOUT ANY CORROBORATIVE EVIDENCE AND ACCORDINGLY DELETED . C) CIT VS. SM AGRAWAL REPORTED IN (2007) 293 ITR 43 (DEL) ADDITION DELETED FOR WANT OF RELEVANT OR ADMISSIB LE EVIDENCE AS ALSO FOR WANT OF OPPORTUNITY OF CROSS EXAMINATION . D) CIT VS. DK GUPTA REPORTED IN (2009) 308 ITR 230 IN ABSENCE OF CORROBORATIVE OR DIRECT EVIDENCE THE A DDITION N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 27 BASED ON PRESUMPTION THAT NOTINGS OR JOTTINGS HAD MATERIALIZED INTO TRANSACTIONS GIVING RISE TO UNDIS CLOSED INCOME DELETED . VI) THE ASSESSEE ALSO SUBMITTED THAT THE LEGAL POSITIO N THAT SUSPICION CANNOT TAKE THE PLACE OF PROOF AND THAT N O ASSESSMENT CAN BE MADE ON THE BASIS OF SURMISES AND CONJECTURES IS ALSO SETTLED BY NUMBER OF DECISIONS SOME OF WHICH ARE AS UNDER A) UMACHARAN SHAW & BROTHER V/S CIT (1959) 37 ITR 271 B) CIT V/S RAVIKUMAR (2007) 294 ITR 78 (P&H) . C) CIT V/S ANUPAM KAPOOR (2008) 299 ITR 179 . VII) THE ASSESSEE FURTHER SUBMITTED THAT AS STATED HEREIN ABOVE THE ALLEGATION OF THE AO IS THAT THE SALES OF PLOTS EFFECTED BY THE ASSESSEE ARE AT HIGHER RATES THA N THE RATES WHICH ARE REFLECTED IN BOOKS OF ACCOUNTS . IN THIS RESPECT THE APPELLANT DESIRES TO SUBMIT BEFORE THIS HONBL E AUTHORITY THAT THE PLOTS HAVE BEEN SOLD BY ASSESSEE UNDER TH E REGISTERED SALE DEEDS EXECUTED BETWEEN THE PARTIES AND SINCE THE TRANSACTION IN QUESTION IS COMPULSORILY R EGISTERABLE AS PER PROVISIONS OF SECTION 17 OF THE INDIAN REGIS TRATION ACT HENCE IN VIEW OF THE PROVISIONS OF SECTION 91 & 92 OF THE INDIAN EVIDENCE ACT NO OTHER EVIDENCE EXCEPT THE D OCUMENT ITSELF IS ADMISSIBLE AS EVIDENCE REGARDING THE TERM S OF THE TRANSACTION EMBODIED IN SUCH DOCUMENTS . A REFEREN CE TO THE SAID PROVISIONS OF THE INDIAN EVIDENCE ACT WOUL D SHOW THAT ACCORDING TO SECTION 91 THEREOF WHEN THE TERM S OF THE CONTRACT OR OF A GRANT OR OF ANY OTHER DISPOSITIO N OF PROPERTY HAVE BEEN REDUCED TO THE FORM OF A DOCUMENT AND I N ALL CASES IN WHICH ANY MATTER IS REQUIRED BY LAW TO BE REDUCED TO THE FORM OF A DOCUMENT NO EVIDENCE SHALL BE GIV EN IN N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 28 PROOF OF THE TERMS OF SUCH CONTRACT GRANT OR OTHE R DISPOSITION OF PROPERTY OR OF SUCH MATTER EXCEPT TH E DOCUMENT ITSELF OR SECONDARY EVIDENCE OF ITS CONTEN TS IN CASES IN WHICH SECONDARY EVIDENCE IS ADMISSIBLE UND ER THE PROVISIONS OF LAW . SIMILARLY AS PER SECTION 72 OF THE EVIDENCE ACT WHERE THE TERMS OF SUCH CONTRACT GRANT OR OTHE R DISPOSITION OF PROPERTY OR ANY MATTER REQUIRED TO B E REDUCED TO THE FORM OF A DOCUMENT HAVE BEEN PROVED ACCORDI NG TO SECTION 91 NO EVIDENCE OF ANY ORAL AGREEMENT OR S TATEMENT SHALL BE ADMITTED AS BETWEEN THE PARTIES TO ANY S UCH INSTRUMENT OR THEIR REPRESENTATIVE IN INTEREST FOR THE PURPOSE OF CONTRADICTING VARYING ADDING OR SUBTRACTING FROM ITS TERMS. IN VIEW OF THE AFORESAID PRINCIPLES OF THE EVIDENCE ACT AS AGAINST THE REGISTERED SALE DEEDS EXECUTED BY APPELLANT IN FAVOR OF THE BUYERS STATING THEREIN T HE CONSIDERATION FOR WHICH THE PROPERTY HAS BEEN TRANS FERRED TO THE BUYERS THE DIARY NOTINGS OF A STRANGER VIZ BROKER KAMAL GOYAL ARE NOT ADMISSIBLE AS EVIDENCE . AS A M ATTER OF FACT THE ONLY ADMISSIBLE EVIDENCE IS THE REGISTERED SALE DEED ITSELF. THE NOTINGS OF THE DIARY HAVE THUS NO EVIDE NTIARY VALUE IN THE EYES OF LAW AND NO ADDITION ON THAT BASIS CAN BE MADE . RELIANCE IN THIS RESPECT IS MADE UPON THE DE CISION OF ITAT INDORE BENCH IN THE CASE OF SHRI PARSHWANAT H CONSTRUCTION V/S ITO REPORTED IN (2014) 24 ITJ 409 WHERE THE HONBLE ITAT HAS APPLIED THE AFORESAID PRINCIP LES OF THE EVIDENCE ACT AND HELD THAT WHEN THE SALE IS EVIDENC ED BY REGISTERED SALE DEED DULY SIGNED AND VERIFIED I.E WHEN THE DOCUMENT IS IN WRITING AND REGISTERED THE ORAL EV IDENCE LOSES ITS CREDIBILITY . IN THE INSTANT CASE THERE IS NOT EVEN AN ORAL EVIDENCE ( BECAUSE BROKERS REPLY RELIED UPON BY AO N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 29 CANNOT BE EQUATED WITH STATEMENT). A REFERENCE IN T HIS RESPECT MAY ALSO BE ON FOLLOWING DECISIONS . A) DECISION OF DELHI HIGH COURT IN CASE OF CIT V/S RAJEEV MEHTA REPORTED IN (2008) 171 TAXMANN 198 AT 200 B) PARAMJEET SINGH V/S ITO (2010) 195 TAXMANN 273 (P&H) .= 323 ITR 588 . C) CIT V/S MAHESH KUMAR (2011) 196 TAXMANN 415 (DEL) . IN THE SAID JUDGMENT THEIR LORDSHIPS HAVE ALSO HELD THAT THE PRIMARY BURDEN OF PROOF REGARDING UNDERSTATEMENT OR CONCEALMENT IS UPON THE REVENUE. D) IN CASE OF SMT. SUNITA DHADDA VS. DCIT REPORTED IN 148 TTJ 719 (ITAT) . E) IN CASE OF SMT. K. NARASAMMA VS. ITO REPORTED IN 32 ITD 494 (HYD-ITAT) . VIII) THE ASSESSEE FURTHER SUBMITS THAT APART FROM THE A BOVE LEGAL ISSUES REGARDING ADMISSIBILITY OF THE EVID ENCE ANOTHER IMPORTANT ISSUE IS REGARDING BURDEN OF PROOF. IN THE INSTANT CASE SINCE THE ALLEGATION REGARDING UNDERSTATEMENT OF CONSIDERATION HAS BEEN MADE BY DEPARTMENT THE BURDEN OF PROOF IS UPON THE DEPART MENT I.E REVENUE AND UNLESS THE AO BRINGS ON RECORD SOME DEF INITE POSITIVE OR COGENT EVIDENCE TO PROVE THAT THE ASSES SEE HAS ACTUALLY RECEIVED THE AMOUNT IN EXCESS OF WHAT IS S TATED IN THE REGISTERED DOCUMENT NO ADDITION IS TO BE MADE I N THE HANDS OF ASSESSEE . IN THE INSTANT CASE THE REVENU E HAS MISERABLY FAILED TO DISCHARGE THE SAID BURDEN AS SUCH THE ADDITION BEING WITHOUT ANY EVIDENCE IS LIABLE TO BE SET N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 30 ASIDE . RELIANCE IN THIS RESPECT IS PLACED ON FOLLO WING DECISIONS A) CIT V/S SMT SUSHILA DEVI (2002) 256 ITR 179 . B) CIT V/S SMT KC AGNES (2003) 128 TAXMANN 848. C) KP VERGESE V/S ITO (1981) 131 ITR 596 SC . D) CIT V/S MS SUSHILA MITTAL (2001) 250 ITR 531 IX) THE ASSESSEE FURTHER SUBMITS THAT IF THE JOTTI NGS CONTAINED IN THE DIARY OF BROKER KAMAL GOYAL (WHIC H ARE THE SOLE BASIS OF PRESENT ADDITION IN QUESTION) ARE CAREFULLY SEEN IT WOULD BE APPARENT THAT THE DIARY NOTIN GS ARE NOTHING BUT IN THE NATURE OF DUMB DOCUMENTS WIT HOUT CONTAINING ANY PARTICULARS ABOUT ANY PARTICULAR TRA NSACTION BETWEEN THE ASSESSEE AND ANY OTHER BUYER. IN FACT THE DIARY DOES NOT EVEN MENTION THE NAME OF ASSESSEE . UNDER THE CIRCUMSTANCES THE SAID DIARY NOTINGS CANNOT BE THE BASIS OF ANY ADDITION AGAINST THE ASSESSEE . AT THIS STAGE IT MAY ALSO BE IMPORTANT TO NOTE THAT SINCE THE SAI D DIARY WAS RECOVERED FROM THE PREMISES OF KAMAL GOYAL IT W AS FOR KAMAL GOYAL TO EXPLAIN THE SAID TRANSACTIONS. AS SU CH THE ADDITION ON BASIS OF SUCH DUMB DOCUMENTS CANNOT BE SUSTAINED. RELIANCE IN THIS RESPECT IS PLACED ON FO LLOWING DECISIONS A) GYANKUMAR AGRAWAL VS. ACIT REPORTED IN 30 TAXMAN.COM 114 (ITAT-HYD). B) ASHWANI KUMAR VS. ITO REPORTED IN 39 ITD 183 (DEL) C) CIT VS. GIRISH CHOUDHARY REPORTED IN 163 TAXMAN 608(DEL) . D) CIT VS. S. M. AGGARWAL REPORTED IN 162 TAXMAN 3 (DE L) . E) CIT VS. VATIKA LANDBASE P. LTD . REPORTED IN 383 IT R 320(DEL) . N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 31 F) ACIT VS. ASHOK KUMAR VIG REPORTED IN [2007] 15 SOT 85 (ITAT-RANCH-URO]. G) SMT. K.V. LAKSHMI SAVITRI DEVI VS. ACIT REPORTED IN 30 TAXMANN.COM 117 (ITAT-HYD) X) WITHOUT PREJUDICE TO ALL THE ABOVE GROUNDS THE AS SESSEE FURTHER SUBMITTED THAT ASSUMING WITHOUT ADMITTING THAT ANY ADDITION ON THE GROUND OF UNDERSTATEMENT OF CONSIDERATION I.E SUPPRESSION OF SALE IS TO BE MADE THE ENTIRE SALES CONSIDERATION CANNOT BE ADDED BUT ONLY APPROPRIATE NET PROFIT RATE CAN BE APPLIED TO SUCH DIFFERENTIAL CONSIDERATION . THE SAID PRINCIPLE IS WELL SETTLED BY SEVERAL JUDICIAL PRONOUNCEMENTS WHICH ARE AS UND ER :- A) IN CASE OF CIT VS. BALCHAND AJIT KUMAR REPORTED IN 7ITJ 324(MP) B) IN CASE OF MAN MOHAN SADANI VS. CIT REPORTED IN 11 ITJ 587 MP C) IN CASE OF . SHARDA REAL ESTATE PRIVATE LIMITED VS . ACIT REPORTED IN 21 ITJ 20(ITAT INDORE ) D) IN CASE OF CIT VS. SHARDA REAL ESTATE PRIVATE LIMIT ED REPORTED IN 23 ITJ 233 (MP) E) IN CASE OF DCIT VS. HVAC SYSTEMS (P. ) LTD. REPORTE D IN 44 SOT 81 (URO- BANGLORE) F) IN CASE OF ITO VS. ANKUR GARG REPORTED IN 42 ITR ( TRI ) 475 (AGRA) . 17. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE WRI TTEN SUBMISSIONS FILED BY BOTH THE PARTIES. THE FIRST C OMMON ISSUE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 32 RELATES TO THE ADDITION MADE FOR THE ALLEGED UNDISC LOSED SALES RECEIPTS ON THE SALE OF PLOTS IN THE PROJECT N.R. ESTATE. TO KEEP THE FACTS STRAIGHT AND CONCISE WE FIND THAT M/S N.R. CO MPANY OWNED A PIECE OF LAND AND WAS PLOTTED UNDER THE SCHEME NAME D AS N.R. ESTATE. M/S N.R. COMPANY APPROACHED M/S N.R. FINA NCE PVT. LTD TO DEVELOP THE N.R. ESTATE AGAINST THE CONSIDERAT ION OF GIVING SOME PLOTS. PLOTS OF LANDS OF N.R. ESTATE WERE SOLD BO TH BY M/S N.R. COMPANY AND M/S N.R. FINANCE PVT. LTD. SALE CONSID ERATION WERE DULY DISCLOSED IN THE BOOKS OF ACCOUNTS. SEARCH AC TION WAS CARRIED OUT U/S 132 OF THE ACT IN THE CASE OF APPOLO GROUP OF WHICH ONE OF THE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD WAS A LSO A PART. SEARCH WAS ALSO CONDUCTED AT THE PREMISES OF A BROK ER NAMELY MR. KAMAL GOYAL AND FROM HIS POSSESSION VARIOUS LOOSE P APERS INCLUDING DIARY WAS FOUND NAMED AS LPS A3. AT PAGE 64 66 AND 68 AND ALSO PAGE NO.29 LPS A5 AND PAGE NO.5 OF LPS 16 THERE WAS INFORMATION ABOUT THE SALE OF SOME OF THE PLOTS OF LANDS OF N.R. ESTATE AND IN THIS SEIZED DIARY RATE OF SALE PER S Q. FEET WERE RANGING IN BETWEEN RS.1150 TO 1131. THE DATE OF SALE WERE F ALLING IN FINANCIAL YEAR 2012-13. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 33 18. BASED ON THIS INFORMATION THE SALE TRANSACTIONS SHOWN BY BOTH THE ASSESSEE(S) WERE EXAMINED AND LD. A.O FORMED A VIEW THAT THE PER SQ. FEET RATE OF PLOT OF LAND IS MUCH LOWER THA N THOSE APPEARING IN THE SEIZED DIARY. THOUGH BOTH THE ASSESSEE(S) S UBMITTED THAT THEY HAVE NO RELATION OF ANY NATURE WITH MR. KAMAL GOYAL AND THE ALLEGED INFORMATION IN THE DIARY SEEMS TO BE ROUGH SINCE THE ACTUAL TRANSACTION HAS TAKEN PLACE WITH OTHER PERSONS WHOS E NAMES ARE NOT APPEARING IN THE SEIZED DIARY. ASSESSEE(S) ALS O SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND FROM THE PREMIS ES OF THE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD WHICH COU LD PROVE THAT ANY ON MONEY WAS RECEIVED. LD. A.O HOWEVER ESTIM ATED THE RATE OF SALE AS PER HIS OWN WORKING AND MADE ADDITION IN TH E HANDS OF BOTH THE ASSESSEE(S) IN THE RESPECTIVE ASSESSMENT YEARS FOR THE AREA OF PLOTS OF LAND SOLD BY THEM. IN THE INSTANT APPEAL T HE COMMON ISSUE RELATING TO THE SUPPRESSED INCOME OF SALES FOR RESP ECTIVE ASSESSMENT YEARS UNDER APPEAL WERE COMPUTED BY THE LD. A.O IN THE FOLLOWING MANNER:- N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 34 N.R. FINANCE PVT. LTD ASSESSMENT YEAR AREA IN SQ.FT RATE PER SQ.FT DISCLOSED IN BOOKS RATE PER SQ.FT APPLIED BY A.O ALLEGED SUPPRESSED INCOME 2012-13 35082 322.63 1100 2 72 71 700 2013-14 136927 327.93 1300 13 31 02 629 N.R. COMPANY ASSESSMENT YEAR AREA IN SQ.FT RATE PER SQ.FT DISCLOSED IN BOOKS RATE PER SQ.FT APPLIED BY A.O ALLEGED SUPPRESSED INCOME 2009-10 114768 334.91 500 1 89 47 047 2011-12 58125 313.29 900 3 41 02 519 2012-13 270835 320.28 1100 21 11 75 466 2013-14 346146 325.65 1300 33 72 67 725 19. WE FURTHER OBSERVE THAT IN THE CASE OF M/S N.R. FINANCE PVT. LTD LD. CIT(A) DELETED THE ALLEGED ADDITION FOR SUP PRESSED SALES/INCOME OBSERVING AS FOLLOWS:- 3.2 I HAVE GONE THROUGH THE ASSESSMENT ORDER THE W RITTEN AND VERBAL SUBMISSION MADE BY THE APPELLANT. THE ASSESS ING OFFICER HAS RELIED ON PAGE NOS. 64 66 AND 68 OF LPS A-3 P AGE NO. 29 OF LPS A-5 AND PAGE NO. 5 OF LPS A-16 FOUND AND SEIZED FROM THE PREMISES OF SHRI KAMAL GOYAL A BROKER. IN PARA 9.6 OF THE ASSESSMENT ORDER IT IS STATED THAT ON THE PERUSAL O F VARIOUS PAGES AND THE SEIZED DAIRY IT CAN BE SEEN THAT IT C ONTAINS DETAILS OF THE TRANSACTIONS IN RESPECT OF THE PLOTS OF 'N.R . ESTATES' IN WHICH THE RATES WERE REFLECTED AT RS. 1150/- TO 113 1/- PER SQ. FT. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 35 HOWEVER THE ASSESSEE HAD RECORDED THE SALES AT RS. 325/- TO RS. 350/- PER SQ. FT. 3.2.1 LOOKING AT THE HUGE DIFFERENCE IN THE TWO RAT ES THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE AMOUNT ESTIMATED AS PER LPS-A-3 SHOULD NOT BE CONSIDERED AS THE SALE PRICE OF THE PLOTS FOR ARRIV ING U AT THE ACTUAL SALES CONSIDERATION OF PLOTS. THE SHOW CAUS E NOTICE DATED 23.01.2015 IS BEING REPRODUCED AS UNDER: '1. DURING THE COURSE OF SEARCH PROCEEDINGS VARIOUS DO CUMENTS WERE FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF SHRI KAMAL GOYAL 502 YASH TOWER 18- 19 DURGA NAGAR JANKI NAGAR INDOR E. HERE IT IS NOTABLE THAT SHRI KAMAL GOYAL IS A BROKER. THE DOCUMENT A-3 SEIZED FROM THE SAID PREMISES IS A DIARY OF CALENDAR YEAR 2012 ON PERUSAL OF THE SAID DIARY IT IS SEEN THAT THE TRANSACTIONS PERTAIN TO THE PERIOD 01 .01.2012 TO 20.09.2012 (PRIOR TO DATE OF SEARCH). FROM THE DOCUMENT A-3 IT IS ALSO SEEN THA T THE RATES OF THE PLOTS ARE SHOWN BETWEEN RS 1 150/- TO RS. 1 311/_. HOWEVER AS PER THE BOOKS OF ACCOUNTS OF M/ S NR FINANCE PVT. LTD. THE PLOTS IN N. R. ESTATES HAVE BEEN REGISTERED BETWEEN THE RATE OF RS 250/- TO RS. 500/- PER SQ. FT. 2. SINCE SHRI KAMAL GOYAL IS A BROKER THE ABOVE RATES QUOTED TO THE CUSTOMER MAY BE A BIT HIGHER THAN THE ACTUAL SALE PRICE. TAKING THE ABOVE RATES AS A BIT HIGHER AN AVERAGE RATE OF NR ESTATES MAY BE ESTIMATED IN VIEW OF THE FACTS THAT R ATES IN PROPERTIES APPRECIATES EVERY YEAR. ACCORDINGLY YOU ARE REQUESTED TO SHOW CAUSE AS TO WHY THE ASSESSMENT YEAR WISE AVERAGE RATE SALE OF FLATS IN NR ESTATES BE ESTIMATED AS UNDER: - ASS ESSMENT YEAR AVERAGE ESTIMATED RATE 2009-10 500/- 2010-11 700/- 201 1-12 900/- 2012-13 1100/ - N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 36 3. YOU ARE ALSO REQUESTED AS TO WHY THE DIFFERENCE OF ACTUAL AMOUNT RECEIVED AS PER ABOVE TABLE AND AS SHOWN IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY MAY NOT BE TREA TED AS UNACCOUNTED INCOME OF THE ASSESSEE COMPANY AND ADDI TION OF THE SAME AMOUNT BE MADE THE TOTAL INCOME OF THE ASS ESSEE COMPANY FOR RESPECTIVE ASSESSMENT YEAR. ' 3.2.2 IN RESPONSE TO THE SAID SHOW CAUSE NOTICE TH E ASSESSEE FILED WRITTEN SUBMISSIONS STATING THAT NO INCRIMINA TING DOCUMENTS HAVE BEEN FOUND AT THE ASSESSEE'S PREMISES AND IT I S FOR THIS REASON NO ADDITIONS CAN BE MADE ON ACCOUNT OF UNACC OUNTED TRANSACTION IN ITS HANDS. 3.2.3 THE ASSESSING OFFICER HELD THAT THE SAID DIAR Y HAS BEEN FOUND DURING THE COURSE OF SEARCH PROCEEDINGS CARRI ED ON AT THE PREMISES OF SHRI KAMAL GOYAL AND IT CONTAINS DETAIL S OF TRANSACTIONS IN PLOT OF 'N.R. ESTATE' FOR THE PERIO D OF 01.01.12 TO 20.09.12 AT A RATE OF RS. 1150/- TO RS.1131/-. THER EFORE IT PROVIDES CLEAR DETAILS ABOUT THE RATES AT WHICH THE TRANSACTION HAVE BEEN UNDERTAKEN IN THE PLOTS OF THE COLONY DEV ELOPED AND THE DOCUMENT CANNOT BE IGNORED. 3.2.4 FURTHER THE ASSESSING OFFICER REBUTTED THE S UBMISSIONS OF THE ASSESSEE FOR THE FOLLOWING REASONS: I) THE ASSESSEE HAS STATED THAT IT DOES NOT KNOW AN Y PERSON NAMED SHRI KAMAL GOYAL AND FURTHER NO BROKERAGE HAS BEEN PAID TO HIM AS PER BOOKS OF ACCOUNTS OF THE ASSESSE E COMPANY. HOWEVER THE FACT THAT SHRI KAMAL GOYAL IS A BROKER IS NOT IN DISPUTE. THE RATES AT WHICH PLOTS WERE SOLD IN THE PROJECT DEVELOPED BY THE ASSESSEE COMPANY WE RE HIGHER THAN THE RATES AT WHICH THE TRANSACTIONS WERE RECORDED IN THE BOOKS OF THE ASSESSEE. SINCE THE ASSESSEE COULD NOT RECORD THE FULL BROKERAGE IN RESPECT OF SALE OF PLO TS IN THE BOOKS OF ACCOUNT IT MIGHT HAVE PAID THE BROKERAGE IN CASH. AS REGARDS THE BROKERAGE IN RESPECT OF THE SALE VAL UE REFLECTED 'IN' THE BOOKS WHICH HAS NOT BEEN PAID IT WOULD BE SUFFICIENT TO STATE THAT THE ASSESSEE HAS REFLECTED VERY THIN MARGIN ON SALE OF PLOTS AND FOR THIS REASON ALSO TH E BROKERAGE MIGHT HAVE NOT BEEN REFLECTED. THE L.LI/ ASSESSEE HAS REFLECTED PURCHASE OF PLOT AT RS.269.64 PER SQ. FT. AND HAS REFLECTED SALES OF RS.270/- TO RS.560/- PER SQ. FT. IN ALL THE FIVE YEARS VIZ A.YS. 2009-10 TO 2013-14. MOST OF THE SALES HAVE BEEN SHOWN IN THE RANGE OF RS. 270/- TO RS.325/- AND ONLY THREE SALE ARE AT RS.560/-. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 37 II) THE ASSESSEE HAS FURTHER STATED THAT THE RATES QUOTED IN THE DIARY MAY BE IN RESPECT OF RESALE TRANSACTIONS PROPOSED TO BE CARRIED OUT BY THE BROKER. IF AT AN THE RATES WERE IN RESPECT OF TRANSACTION PROPOSED TO BE CARRIED OUT B Y THE BROKER THEN THE SAME WOULD NOT HAVE BEEN RECORDED I N THE DIARY. FURTHER IF THE RATE AT WHICH RESALE TRANSAC TION ARE BEING UNDERTAKEN AT A HIGHER RATE THEN BY NO STRETCH OF IMAGINATION IT CAN BE CONSIDERED 'THAT THE ASSESSEE HAS BEEN SELLING ITS PLOTS AT A SUCH AN ABNORMAL LOWER RATE. III) THE ASSESSEE IN ITS SUBMISSION HAS STATED THAT NO OPPORTUNITY TO CROSS EXAMINE THE WITNESS HAS BEEN PROVIDED TO IT. IN THIS RESPECT IT CAN BE STATED TH AT THE ASSESSEE HAS ALREADY BEEN SUPPLIED THE COPY OF LPS- A-3 FOUND AND SEIZED FROM THE PREMISES OF SHRI KAMAL GOYAL WHICH IS SELF EXPLANATORY AND THEREFORE THE PLEA O F THE ASSESSEE FOR CROSS-EXAMINING DOES NOT HOLD ANY GROU ND. 3.2.5 THE ASSESSING OFFICER HAS DETERMINED THE INCO ME AS UNDER: PARTICULARS / ASSTT YEARS 2009-10 2010- 11 2011-12 2012-13 2013-14 PLOT AREA SOLD (IN SQ. FT) 53680 41812 21202 35082 136927 RATE ESTIMATED (IN RS.) 500 700 900 1100 L300 ESTIMATED SALE CONSIDERATION (A) 26840000 29268400 19081800 38590200 178005100 SALE CONSIDERATION IN BOOKS (B) 16544355 19576000 6800700 11318500 44903425 COST OF PLOTS (C) 14474278 11274196 5716913 9459513 36920726 ESTIMATED PROFIT ON SALE OF PLOT(A-C) 12365722 17994204 13364887 29130687 141084374 PROFIT REFLECTED IN BOOKS LB-C) 2070077 8301804 1083787 J858987 7982699 SUPPRESSION OF INCOME ON SALE OF PLOT 10295645 9692400 12281100 27271700 133101675 2. 3. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 38 3.3.1 FROM THE ABOVE STATEMENT OF SHRI KAMAL GOYAL IT IS SEEN THAT SEIZED DOCUMENT A-5 CONTAINS COMMON DETAILS OF ALL THE DEALS AND SEIZED DOCUMENT A-16 REFERS TO THE TRADE ENQUIRIES. EVEN THE ASSESSING OFFICER HAS PLACED NO RELIANCE ON ENTRIES IN LPS A- 5 AND LPS A-16 FOR ESTIMATING THE INCOME OF THE APPELLANT. THE ASSESSI NG OFFICER HAS ESTIMATED THE SALE PRICE THE PLOTS AS PER THE P AGE NOS. 64 66 AND 68 OF LPS A-3 WHICH ARE REPRODUCED IN PARA 3.1 3.3.2 P AGE NO. 64 OF LPS A-3 BEARING THE DATE 01.0 5.2012 IS IN RESPECT OF PLOT NO.. G 12A. ON THE LEFT HAND SIDE OF THE S AID PAGE IT IS WRITTEN - N R ESTATE G12A 4800 SQ. AND 1211/-. ON THE RIGHT HAND SIDE IT IS WRITTEN THAT IT IS SOLD BY NANAK AN D PURCHASED BY SANJEEV. IN THE ASSESSMENT ORDER ON TOP OF THE REPR ODUCTION OF SEIZED DOCUMENT IT IS TYPED THAT 'SHRI NANAK HAS SO LD A PLOT TO SOME SANJEEV GANG. SHRI NANAK RAM KALRA IS A PARTNE R IN N.R. COMPANY'. THE APPELLANT HAS SUBMITTED WITH DOCUMENT ARY PROOF THAT THE PLOT G 12A WAS FIRST TIME SOLD TO MRS. SHW ETA KEDIA IN MARCH 2013. THE SALE CONSIDERATION IS SHOWN AT RS. 14 49 900/- FOR THE 4833 SQ. FT. PLOT WHICH WORKS OUT TO RS. 30 0 PER SQ. FT. 3.3.3 PAGE NO. 66 OF LPS A-3 BEARING THE DATE 15.05 .2012 IS M RESPECT OF PLOT NO.D20 . ON THE LEFT HAND SIDE OF THE SAID PAGE IT IS WRITTEN - N R ESTATE D20 4000 SQ. AND 1275/-. ON THE RIGHT HAND SIDE IT IS WRITTEN THAT IT IS SOLD BY KOTHARI AND PURCHASED BY AL. THE APPELLANT HAS SUBMITTED WITH DOCUMENTARY PROOF THAT THE PLOT D20 WAS FIRST TIME SOLD TO MRS. SHARDA JAIN IN MARC H 2013. THE SALE CONSIDERATION IS SHOWN AT RS. 15 53 175/ - FOR THE 4779 SQ. FT. PLOT WHICH WORKS OUT TO RS. 325 PER SQ. FT. 3.3.4 PAGE NO. 68 OF LPS A-3 BEARING THE DATE 27.05 .2012 IS IN RESPECT OF PLOT NO. S-385 SILICON AND PLOT G 12A O F N R ESTATE. THE PROJECT SILICON IS NOT CONNECTED WITH THE APPELLANT 'S BUSINESS. REGARDING THE PLOT G-12A OF N R ESTATE IT IS WRITTE N 4800 SQ. AND 1311/-. ON THE RIGHT HAND SIDE THE NAMES OF THE BUY ER AND SELLER IS WRITTEN WHICH IS NOT LEGIBLE. THE APPELLANT HAS ALREADY SUBMITTED DOCUMENTARY PROOF REGARDING PLOT G-12A WH ICH IS DISCUSSED IN PARA 3.3.2 ABOVE. 3.4 THUS IT IS SEEN THAT THE SALE PRICE OF THE PLO TS OF N R ESTATE MENTIONED IN THE SEIZED DOCUMENTS PAGE NOS. 64 66 AND 68 OF LPS A-3 ON WHICH THE ASSESSING OFFICER HAS PLACED RELIANCE TO ESTIMATE THE INCOME OF THE APPELLANT IS AT VARIANCE WITH THE ACTUAL REGISTERED SALE PRICE PAID FOR THE SAID PLOTS AS PE R THE DOCUMENTS SUBMITTED BY THE APPELLANT IN THE APPEAL PROCEEDING S. AT THIS N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 39 STAGE BEFORE DRAWING A FINAL CONCLUSION IT IS REL EVANT AND NECESSARY TO CONSIDER THE RATIOS OF THE FOLLOWING D ECISIONS. 3.4.1 THE HON'BLE HIGH COURT OF DELHI IN THE CASE O F C!T VS. ANIL BHALLA (2010) 322 ITR 191 (DEL.) OBSERVED THAT NO I NDEPENDENT MATERIAL OR EVIDENCE HAD BEEN BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE NOTINGS/JOTTINGS RECORDED ON THE LOOSE SHEET OR PAPER REPRESENTED AN UNACCOUNTED TRANSACTION THEN THE EXPLANATION OF THE ASSESSEE SHOULD BE ACCEPTED. IN THIS SITUATION THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE LOOSE SH EET OR DOCUMENT DOES NOT REPRESENT ANY INVESTMENT OR EXPENDITURE OV ER AND ABOVE THE BOOKS OF ACCOUNTS OF THE ASSESSEE OUT OF INCOME ALLEGED TO BE EARNED FROM UNACCOUNTED SOURCES . 3.4;2 THE HON'BLE LTAT HYDERABAD 'B' BENCH IN THE C ASE OF DCIT VS M. AJA BABU FOLLOWING THE DECISION OF HON'BLE HIGH COURT OF DE LHI IN THE CASE OF C!T . NIL BHALLA (SUPRA) CIT VS. DMESH JAM (HUF) 211 TAXMAN 23 (DEL) AND CIT VS. JMPAL AGGARWAL 212 TAX MAN 1 (DEL) ITAT MUMBAL M THE CASE OF ACIT VS. JP MORGAN INDIA PVT. LTD. 46 SOT 250(MUMBAI) HELD THAT THE ADDITION MAD E BY THE AO BASED ON THE LOOSE PAPER WHICH IS NOT A CONCLUSIVE EVIDENCE AND THEREFORE THE SAME IS NOT SUFFICIENT FOR MAKING TH E ADDITION. THE TRIBUNAL ALSO HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENT/NOTEBOOK/LOOSE SLIPS IN ABSENCE OF AN Y OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MADE INVESTM ENT IN LAND. THE RELEVANT OBSERVATIONS AND FINDINGS OF THE TRIBU NAL IN THIS CASE READ AS UNDER:- 17 WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES PERUS ED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE THE ADDITION WAS MADE BY THE A O BASED ON THE LOOSE PAPER AND THE SAME IN OUR VIEW CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE. AS HELD BY THE CIT(A) IN T HE IMPUGNED ORDER EXCEPT RELYING THE NOTINGS IN THE LOOSE SLIPS NO ATTEMPT HAS BEEN MADE TO CORROBORATE THE NOTINGS WITH INDEPENDENT EVIDENCE. THE PARTIES TO THE 'TRANSACTION PARTICULARLY THE VENDOR HAS NOT EXAMINED. IN EVERY TRANSACTION THERE IS A CIRCLE CONCERNING TWO PARTIES. IT IS NOT KNOWN WHETHER THE VENDOR HAS DISCLOSED THE CONSIDERATION AS NOTED IN THE DIARY. THEREFORE MERELY ON THE BASIS OF PRESUMPTION AND SOME CORROBORATED NOTINGS ADDITIONS CANNOT BE MADE.' IN OUR OPINION THE DELETION OF ADDITION BY T HE CIT(A) IS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE FOLLOWING CASES SUPPORT THE ACTION O F THE CIT(A): N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 40 1. CIT VS. ANIL BHALLA [2010) 322 ITR 191 (DEL.) - WHEREIN HELD THAT THE NOTINGS RECORDED ON THE LOOSE SHEET OF PAPER DO NOT REPRESENT ANY EXPENDITURE INCURRED BY THE ASSESSEE DIRECTOR AN D THAT THE ENTRIES RELATED TO THE COMPANY IN AS MUCH AS THE ASSESSEE COULD EXPLAIN FROM THE BOOKS OF THE COMPANY THAT THESE PR OJECTS WERE UNDERTAKEN BY IT AND UPHELD THE DELETION OF THE IMP UGNED ADDITION UNDER S. 69C FINDINGS ARRIVED AT BY THE TRIBUNAL ARE PURE FINDINGS OF FACTS AND THE SAME DO NOT WARRANT ANY INTERFERENCE. 2. ACIT VS. J.P. MORGAN INDIA (P) LTD. [2011J 46 SOT 250 (MUM) 3. CIT VS. DINESH JAIRI HUF [20 12J 211 TAXMAN 23 (DELHI) 4. CIT VS. JAIPAL AGGARWAL [20 13J 212 TAXMAN 1 (DELHI)- WHEREIN IT WAS HELD THAT DUMB DOCUMENTS SEIZED I.E. FROM WHICH NOTHING COULD BE CLEARLY UNDERSTOOD CANNOT FORM A JUSTIFIED BASE FOR MAKING ADDITIONS TO INCOME OF THE ASSESSEE. 17.1 IN VIEW OF THE ABOVE DISCUSSION WE ARE OF THE V IEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER BASED ON THE LOOSE PAPER WHICH IS NOT A CONCLUSIVE EVIDENCE AND THEREFORE THE SAME IS NOT SUFFICIENT TO MAKE THE ADDITION. IN OUR OPINION NO ADDITION CAN 'BE MADE ON THE BASIS OF DUMB DOCUMENTS/NOTE BOO K/LOOSE SLIPS IN THE ABSENCE OF ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS MADE INVESTMENTS IN LAND. NOTING ON TH E NOTE BOOK/ DIARY/ LOOSE SHEETS ARE REQUIRED TO BE SUPPORTED/ CORROBORATED BY OTHER EVIDENCE AND SHOULD ALSO INCL UDE THE STATEMENT OF A PERSON WHO ADMITTEDLY IS Q PARTY TO THE NOTING AND STATEMENT FROM ALL THE PERSONS WHOSE NAMES THERE ON THE NOTE BOOK/ LOOSE SLIPS AND THEIR STATEMENTS TO BE R ECORDED AND THEN SUCH STATEMENT UNDOUBTEDLY SHOULD BE CONFRONTE D TO THE ASSESSEE AND HE HAS TO BE ALLOWED TO CROSS EXAMINE THE PARTIES. THE VENDOR HAS NOT EXAMINED IN THIS CASE. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DIREC TING THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON THE BASIS OF LOOSE PAPER AND THE ORDER OF THE CIT(A) IS HEREBY UPHELD DISMISSING THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE. 18. AS A RESULT APPEAL IN ITA NO. 1756/ HYD/2012 IS DISMISSED.' 3.4.3 HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. ATAM VALVES (P) LTD (2011) 332 ITR 468 (P&H) HELD THAT WHEN THE LOOSE PAPERS DID NOT RELATE TO CERTAIN PAYME NTS DURING THE RELEVANT PERIOD IN QUESTION THEN IN ABSENCE OF AN Y SUPPORTING MATERIAL OR EVIDENCE THESE LOOSE SHEETS BY ITSELF WERE NOT FOUND TO BE SUFFICIENT ENOUGH FOR MAKING A SUSTAINABLE AND JUSTIFIED ADDITION. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 41 3 .4.4 ITAT DELHI 'E' BENCH IN THE CASE OF ATUL KUMAR JAIN (1999) 64 11J 786 (DELHI) VS. DCIT HELD THAT WHEN THE SEIZED PAPERS H AVE BEING NOT CORROBORATED BY ANY INDEPENDENT EVIDENCE IT CANNOT BE CONSIDERED AS A RELIABLE DOCUMENT OR ACCEPTABLE PIE CE OF EVIDENCE AS A PROOF OF INVESTMENT IN THE HOUSE PROPERTY AND THEREFORE THESE KIND OF DOCUMENTS/PAPERS ARE LIABLE TO BE IGNORED A ND ADDITION MADE ON THE BASIS OF SUCH DOCUMENT IS NOT SUSTAINAB LE AND IN ACCORDANCE WITH LAW. 3.4.5 IN CIT V / S KULWANT RAI (2007) 291 ITR 36 (DEL) THE RULING OF THE SUPREME COURT IN DHAKESHWARI COTTON MILLS LTD V CIT (1954) 26 ITR 775 (SC) WAS RELIED UPON. THE SUPREME COURT HE LD THAT EVEN THOUGH INCOME TAX AUTHORITIES INCLUDING THE ASSESSING OFFICER HAS UNFETTERED DISCRETION AND NOT STRICTLY BOUND BY THE RULES AND PLEADINGS AS WELL AS MATERIALS ON RECORD AND IS LEG ITIMATELY ENTITLED TO ACT ON THE MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE NEVERTHELESS SUCH DISCRETION DOES NOT ENTITLE THEM TO MAKE A PURE GUESS AND BASE AN ASSESSMENT ENTIRELY UPON IT WITHO UT REFERENCE TO ANY MATERIAL OR EVIDENCE AT ALL. GIVEN THE ABOVE ST ATE OF LAW THE DELHI HIGH COURT STATED THAT IT HAS NO HESITATION IN SO CONCLUDING SINCE THE DOCUMENT SEIZED WAS BOTH UNDATED AND UNSIGN ED AND EVEN TAKEN AT FACE VALUE DID NOT LEAD TO FURTHER EN QUIRY ON BEHALF OF THE AO. 3.4.6 ITAT HYDERABAD IN ITA 329/HYD/201 2 DATED 04.01.2014 IN THE CASE OF DCIT VS. SHRI BABU RAO WHERE IN PARA 2 6 TO 29 HELD THUS:- '26. IT IS CLEAR FROM THE ABOVE PROVISIONS OF SECTION 153A THA T THE INCOME OF THE ASSESSEE IN CASE OF A PERSON WHERE SEARCH IS INITIATED U/ S. 132 THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/ S. 132A THE ASSESSING OFFICER AFTER ISSUE OF A NOTICE TO FURNISH INCOME OF THE ASSESSEE IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN 6 ASSESSMENT YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR. REL EVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION MADE THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN. RESPECT OJ EACH ASSESSMENT YEAR FALLING WITHIN SUC H 6 ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITIONED AS THE CASE MAY BE ON BRINGING ON RECORD THE MATERIAL TO SHOW THAT THERE IS UNDISCLOSED INCOME OF THE ASSESSEE. IN OTHER WORDS THERE SHOULD BE MATERIAL ON RECORD TO SHOW THAT THE INCOME IS ASSESSED ON THE BASIS OF MATERIAL! EVIDENCE IN HANDS OF THE ASSESSING OFFICER. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 42 27. BEING SO IN OUR OPINION GUESS WORK IS NOT POSSIBLE IN CASE OF SEARCH ASSESSMENT FRAMED U/ S. 143(3) OR U/S. 153A OF THE ACT WITHOUT ANY PROPER MATERIAL. THE AO SHALL HAVE THE BA SIS FOR ASSUMING THAT THE EXPENDITURE INCURRED BY THE ASSES SEE IS OUT OF UNDISCLOSED INCOME. IT IS NOT PERMISSIBLE TO ASSESS THE UNDISCLOSED INCOME IN THE ABSENCE OF ANY OTHER EVIDEN CE ON ARBITRARY BASIS. THE UNSUBSTANTIATED LOOSE SHEETS CAN NOT BE CONSIDERED AS A CONCLUSIVE EVIDENCE TO MAKE ANY ADDITION TOWARDS UNDISCLOSED INCOME. IT WAS HELD BY THE SUPRE ME COURT IN THE CASE OF CBI VS. V. C. SHUKLA (1998) 3 SCC 410 THAT 'FILE CONTAINING LOOSE SHEETS OF PAPERS ARE NOT BOOKS' AN D HENCE ENTRIES TBEREIN ARE NOT ADMISSIBLE U/ S. 34 OF THE EVIDENCE ACT 1872. 28. IN THE PRESENT CASE THE SEIZED MATERIAL (TWO NOT E BOOKS) MARKED AS KBR/ A/ 02 . AND KBR/ A/ 04 WHEREIN CERTAIN ENTRIES ARE FOUND RECORDING VARIOUS TRANSACTIONS PERTAINING TO THE ASSESSEE. THESE ENTRIES IN THE NOTEBOOK ARE UNSUBST ANTIATED AND ON THAT BASIS THE AO REACHED TO THE CONCLUSION THAT THE FIGURES MENTIONED THEREIN ARE TO BE READ BY ADDING 3 ZEROS AND THEREBY HE CAME. TO CONCLUDE THAT THERE IS UNDISCLOSED INCOME M THESE 6 ASSESSMENT YEARS. IN OUR OPINION THE DOCUMENT RECO VERED DURING THE COURSE OF WAS A DUMB DOCUMENT AND LED NOWHERE. THE CIT(A) RIGHTLY CAME THE CONCLUSION THAT I T CANNOT BE ACTED UPON AND DELETED THE ADDITION. 29. OTHER THAN THE LOOSE PAPER THE AO HAS NOT BROUGHT ON RECORD ANY CORROBORATIVE MATERIAL OR EVIDENCE TO SHOW THAT THE INFERENCE MADE BY HIM IS CORRECT. THE CIT(A) AFTER TAKING THE TOTALITY OF THE CIRCUMSTANCES INTO CONSIDERATION CAME TO THE CONCLUSION THAT THE ADDITION MADE BY THE AO IS NOT JUSTIFIED AND THE ARGUMENT PUT FORTH BY THE ASSESSEE IS SUPPORTED BY DOCUMENTARY EVIDENCE. THIS WAS NOT A CASE WHERE RELEVANT EVIDENCE HAD BEEN IGNORED BY THE CIT(A) AND THEIR RELEVANT EVIDENCE HAS BEEN TA KEN INTO CONSIDERATION. THE ONLY TEST THAT WAS REQUIRED TO BE APPLIED WAS WHETHER ON THE FACTS FOUND AND THE STATE OF EVIDENC E ON RECORD THE CONCLUSION ARRIVED AT BY THE CIT(A) WAS ONE WHIC H COULD BE ARRIVED BY A REASONABLE PERSON PROPERLY INFORMED IN LAW. APPLYING THIS TEST IT COULD NOT BE SAID THAT THE DECISION RECORDED BY THE CIT(A) ONE WHICH COULD NOT HAVE BEEN ARRIVED A T BY A REASONABLE PERSON PROPERLY INFORMED IN LAW CONSIDERI NG THE STATE OF EVIDENCE ON RECORD. HENCE IN OUR CONSIDERED OPI NION THE CIT(A) HAS REACHED A CORRECT CONCLUSION IN DELETING THE ADDITION MADE BY THE AO ON THE BASIS OF LOOSE SHEETS. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 43 3.4.7 THE HON'BLE ITAT JABALPUR IN THE CASE OF ACIT VS. SATYAPAL (2007) 295 ITR (AT) 352 (JAB.) HELD AS UNDER:- 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND DURING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT ANY SECON D INTERPRETATION MUST REFLECT ALL THE DETAILS ABOUT THE TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN THE VARIOUS CO MPONENTS AS MENTIONED IN SECTION 4 OF THE INCOME TAX ACT MUST B E FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGATIONS AND CORREL ATIONS WITH THE OTHER MATERIAL FOUND EITHER DURING THE COURSE OF THE SEAR CH OR ON INVESTIGATION. AS A RESULT WE HOLD THAT DOCUMENT NO. 7 IS A NON-SPEAKING DOCUMENT. 3.4.8 HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V S. S.M. AGRAWAL 293 ITR 043 (DEL) HELD THAT UNLESS AND UNTIL THE CO NTENTS OF THE DOCUMENT ARE PROVED AGAINST THE PERSON THE POSSESS ION OF THE DOCUMENT OR HANDWRITING OF THAT PERSON ON SUCH DOCU MENT BY ITSELF COULD NOT PROVE THE CONTENTS .OF THE DOCUMENT. IT WA S FURTHER HELD THAT THE DOCUMENT RECOVERED DURING THE COURSE OF SE ARCH FROM THE ASSESSEE WAS HELD TO BE DUMB DOCUMENT AND THE ADDITI ON ON THE BASIS OF THE SAME IS NOT SUSTAINABLE. 3.4.9 THE HON'BLE DELHI HIGH COURT IN THE CASE OF C IT VS. VATIKA LANDBASE (P.) LTD. (2016) 383 ITR 320 (DEL) HELD TH AT THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF DOCUM ENTS FOUND AND SEIZED FROM THE COMPUTER OF AN EMPLOYEE OF THE ASSE SSEE COMPANY SHOWING THAT THE RATE OF SALE OF FLOOR SPACE IN COM MERCIAL WAS HIGHER THAN THE RATE SHOWN BY THE ASSESSEE WAS NOT SUSTAINABLE AS THE RATES MENTIONED IN THE SEIZED DOCUMENTS DID NOT REPRESENT ANY COMPLETED OR MATERIALIZED TRANSACTION. MOREOVER THE ASSESSIN G OFFICER DID NOT MAKE ANY ENQUIRY FROM THE SAID EMPLO YEE OR FROM THE BUYERS OF FLATS IN RESPECT OF ACTUAL PRICE PAID BY THEM. 3.4.10 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. VED PRAKASH CHOUDHARY (2008) 305 ITR 245 (DEL) HAS HELD THAT IN THE ABSENCE OF CORROBORATIVE MATERIAL THE ADDITION MAD E ON THE BASIS OF SKETCHY DOCUMENT WHICH WAS UNPROVED CANNOT BE SUSTA INED IN LAW. 3.4.11. THE HON 'BLE DELHI HIGH COURT IN THE CASE O F CIT VS. VIVEK AGRAWAL 231 TAXMAN 392 (DEL) HAS HELD THAT UNLESS T HE AMOUNTS STATED THE DOCUMENT WERE ACTUALLY PAID IT CANNOT BE PRESUMED THAT THE AMOUNT MENTIONED IN THE SALE DEED WAS NOT CORRE CT. 3.4.12 THE HON'BLE M.P. HIGH COURT IN THE CASE OF C IT VS. KANTILAL PRABHUDAS PATEL (2008) 296 ITR 568 (MP) HAS HELD TH AT THE ADDITION CANNOT BE MADE ON GUESS WORK OR ESTIMATES. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 44 4. TURNING TO THE FACTUAL MATRIX OF THE PRESENT CAS E IF WE LOGICALLY ANALYZE THE CONTENTS OF THE DOCUMENTS SEIZED FROM T HE PREMISES OF THE BROKER SHRI KAMAL GOYAL AND ITS RELIABILITY IN THE LIGHT OF THE DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT RE GARDING THE ACTUAL REGISTERED SALE DOCUMENTS IN RESPECT OF PLOT NOS. G-12A AND D-20 OF N R ESTATE THE SALE PRICE MENTIONED IN THE SEIZED DOCUMENTS 64 66 AND 68 OF LPS-A3 CANNOT BE MADE THE BASIS OF THE ESTIMATE MADE IN THE APPELLANT'S CASE. IT IS SE EN THAT . THE PLOT NOS. G-12A AND D-20 HAVE BEEN SOLD FOR THE FIRST TI ME IN MARCH- 2013 AND AT RATES OF RS. 300 PER SQ. FT. AND RS. 32 5 PER SQ. FT. RESPECTIVELY. FURTHER ON BOTH PAGE NOS. 64 AND 68 THE PLOT NO. MENTIONED IS G-12A BUT THE RATES WRITTEN ON PAGE NO S. 64 AND 68 ARE 1211 AND 1311. IN VIEW OF THESE FACTS THE ASSES SING OFFICER WAS NOT CORRECT IN ESTIMATING THE SALES OF THE APPE LLANT ON THE BASIS OF THE NOTINGS ON PAGE NOS. 64 66 AND 68 OF LPS-A3 SEIZED FROM THE PREMISES OF SHRI KAMAL GOYAL. 4.1 ON CAREFUL CONSIDERATION OF ENTIRE MATERIAL PLA CED BEFORE ME INTER ALIA THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE IN THE APPEAL PROCEEDINGS IT IS SEEN THAT NO EFFORT HAS B EEN MADE BY THE ASSESSING OFFICER OF MAKING ANY FURTHER INVESTIGATI ON OR INQUIRY AND HE HAS SIMPLY PROCEEDED TO MAKE ADDITIONS ON TH E BASIS OF THE DOCUMENTS IN QUESTION WHICH IS NOT AN ACCEPTABL E SUSTAINABLE AND JUSTIFIED APPROACH. THE ASSESSING OFFICER HAS A CCEPTED THE RATES MENTIONED IN THE SEIZED DOCUMENTS PAGE NOS. 6 4 66 AND 68 OF LPS-A3 BUT HAS NOT BROUGHT OUT ANY CORROBORATIVE MATERIAL TO SHOW THAT THE INFERENCE MADE BY HIM IS CORRECT AND SUSTAINABLE. 4.2 THE APPELLANT COMPANY HAD NO DEALINGS WITH THE BROKER SHRI KAMAL GOYAL AND THE ASSESSING OFFICER HAS ALSO NOT DISPUTED THIS FACT. 4.3 FURTHER THE APPELLANT HAD ASKED FOR OPPORTUNIT Y TO CROSS EXAMINE THE WITNESS DURING THE ASSESSMENT PROCEEDIN GS WHICH WAS NOT GIVEN TO THE APPELLANT. 4.4 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE AND THE DISCUSSIONS IN THE PRECEDING PARAGRAPHS THE ADDITI ON OF RS. 1 02 95 645/- FOR AY 2009-10 RS. 96 92 400/- FOR A .Y. 2010-11 RS. 1 22 81 10 0 / - FOR A.Y. 2011- 12 RS. 2 72 71 700/- FOR A.Y. 2012-13 AND RS. 13 31 01 675/- FOR A.Y. 2013-14 MAD E ON ACCOUNT OF ESTIMATION OF SALE CONSIDERATION ON THE BASIS OF SEIZED DOCUMENT PAGE NOS. 64 66 AND 68 OF LPS-A3 FOUND F ROM THE PREMISES OF THE BROKER SHRI KAMAL GOYAL IS HEREBY DELETED. GROUND NOS. 2 3 AND4 FOR A.YS 2009-10 TO 2012-13 AN D GROUND N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 45 NOS. 2 AND3 FOR A.Y 2013-14 ARE ALLOWED. 20. IN THE CASE OF ANOTHER ASSESSEE NAMELY M/S N.R. COMPANY WHICH WAS DECIDED BY THE LD. A.O ON A LATER DATE SI MILAR ADDITION WAS MADE WHICH WAS ALSO STRIKED OFF BY LD. CIT(A) R EFERRING TO THE FINDING OF LD. CIT(A) GIVEN IN THE CASE OF M/S N.R. FINANCE PVT. LTD OBSERVING AS FOLLOWS:- 2.7 AS CAN BE SEEN FROM THE ABOVE THE ADDITIONS MADE O N ACCOUNT OF ESTIMATION OF SALE CONSIDERATION ON THE BASIS OF THE SEIZED DOCUMENTS PAGE NOS. 64 66 AND 68 OF LPS-A3 FOUND F ROM THE PREMISES OF THE BROKER SHRI KAMAL GOYAL HAVE NOT BEEN SUSTAINED IN THE CASE OF M/S N.R. FINANCE PVT. LTD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS M/S N. R. FINANCE PVT. LTD. HAD ASKED FOR OPPORTUNITY TO CROSS EXAMINE SHRI KAMAL G OYAL BUT THE SAME WAS NOT GRANTED. 2.8 THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS OF THE APPELLANT COMPANY ISSUED SUMMONS TO SHRI KAMAL GOYAL WHO FILED HIS SUBMISSIONS ON 30/11/2015 . THE SAME ARE REPRODUCED AS UNDER:- 'DURING THE COURSE OF SUMMON PROCEEDING AS ISSUED U /S 131 OF THE INCOME TAX ACT YOU HAVE SHOWN CERTAIN PAPERS AS FOUND AND SEIZED DURING THE COURSE OF SEARCH IN MY RESI DENTIAL AND BUSINESS PREMISES WHEREIN CERTAIN DETAILS WERE REC ORDED IN CONNECTION WITH THE SALE AND PURCHASE OF PLOTS IN NR ESTATES. IN THIS RESPECT I HAVE TO SUBMIT AS UNDER:- 1} I HAVE SEEN ALL THE PAPERS AS SHOWN BY YOU AT THE T IME OF HEARING WHICH WAS SEIZED DURING THE COURSE OF SEAR CH IN MY POSSESSION. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 46 2.1} I ACT AS A PROPERTY BROKER AND ENGAGED IN THE BUSIN ESS C PURCHASE AND SALE OF PLOTS HOUSES ETC. 2 2} THAT IN BROKING BUSINESS ENTIRE TRANSACTIONS WERE E XECUTED THROUGH BROKERS ONLY AND WE ARE NOT IN TOUCH WITH THE ACTUAL BUYER AND SELLER. 2.3} THAT IN MOST OF THE TRANSACTIONS THREE BROKE RS INVOLVED FOR EXECUTION OF A DEAL ONE BROKER REPRESENT THE SELL ER PARTY ONE REPRESENT THE BUYER AND THIRD ONE WHO KNOW BOT H THE BROKERS AND THEREFORE BROKERAGE AS RECEIVED DISTRI BUTED AMONGST THE THREE BROKERS. 3.1} THAT ON PAGE NO 64 DETAIL OF PLOT NO G-12A OF 4800 SQ FTS WHICH WAS SOLD AT RS 1211/- PER SQ FTS WAS RECORDED. THAT ON RIGHT SIDE NAME OF THE BROKER OF SELLER AND BUYER WAS RECORDED. THE SAID TRANSACTION WAS EXECUTED ON 01-05-2012. 3.2} THAT ON PAGE NO 66 DETAIL OF PLOT NO D-20 OF 4800 SQ FTS WHICH WAS SOLD AT RS 1225/- PER SQ FTS WAS RECORDED. THAT ON RIGHT SIDE NAME OF THE BROKER OF SELLER AND BUYER WAS RECORDED. THE SAID TRANSACTION WAS EXECUTED ON 15-05-2012. 3.3} THAT ON PAGE NO 68 DETAIL OF PLOT NO G-12A OF 4800 SQ FTS WHICH WAS AGAIN SOLD AT RS 1311/- PER SQ FTS WAS RECORDED. THAT ON RIGHT SIDE NAME OF THE BROKER OF SELLER AND BUYER WAS RECORDED . THE SAID TRANSACTION WAS EXECUTED ON 27-05-2012. 3.4} THAT ON PAGE NO 29 OF A-5 IS THE COPY OF LEDGER WHEREIN THE AMOUNT AS RECEIVED BY ME FROM THE BROKER OF BUYER AND ALSO PAID TO THE BROKER OF SELLER WAS RECORDED FOR MY MEMORY PURPOSES. 3.5} THAT ON PAGE NO 5 OF A- 16 IS THE MEMORY PAID WHEREIN THE RATE OF DIFFERENT PLOTS OF DIFFERENT COLONY WAS NOTED. THAT PLOTS WHICH ARE AVAILABLE FOR SALE WAS RECORDED IN THIS PAGE. THAT NO FINANCI AL TRANSACTION WAS RECORDED IN THIS PAGE. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 47 THIS LETTER MAY PLEASE BE TREATED AS COMPLIANCE T O THE SUMMON AS ISSUED U/ S 131 OF THE INCOME TAX ACT. ' 2.9 SHRI KAMAL GOYAL IN HIS REPLY HAS REITERATED THE NO TINGS ON PAGE NOS. 64 66 AND 68 OF THE SEIZED DIARY. THE AP PELLANT HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT IT HAD NO BUSINESS CONNECTION WITH THE BROKER SHRI KAMAL GOYAL AND HAD SUBMITTED THE DETAILED CHART WITH THE NAMES OF THE PARTIES TO WHOM THE SAID PLOTS MENTIONED IN THE SEIZED DOCUMENTS WERE SOLD. HERE ALSO THE ASSESSING OFFICER DID NOT GIVE THE OPPORTUNITY TO T HE APPELLANT TO CROSS EXAMINE SHRI KAMAL GOYAL THE APPELLANT IN ITS SUBMISSIONS HAS PLACED RELIANCE ON VARIOUS DECISION S WHEREIN IT IS HELD THAT AS PART OF PRINCIPLES OF NATURAL JUSTI CE OPPORTUNITY OF CROSS EXAMINATION SHOULD BE PROVIDED. 2.10 IN THIS CONTEXT RELIANCE IS PLACED ON DECISION OF HO N'BLE ITAT INDORE IN THE CASE OF SHRI MAHENDRA KUMAR AGRAWAL I N ITA NO. 742/IND/2015 DATED 05/07/2016 WHEREIN IN IT IS HELD THAT IT IS A SETTLED PROPOSITION OF LAW THAT BEFORE USING ANY MA TERIAL RECEIVED OR STATEMENT RECORDED BEHIND THE BACK OF THE ASSESSEE OF A THIRD PARTY THE SAME SHOULD BE CONFRONTED TO THE ASSESSE E OTHERWISE THE SAME MATERIAL CANNOT BE USED OR READ AGAINST THE AS SESSEE. THE HON'BLE ITAT HAS RELIED ON THE RECENT DECISION OF T HE HON'BLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA VS. ACI T IN ITA NO. 58 OF 2001 IN ITS ORDER DATED 30/06/2016 WHEREIN IT IS HELD THAT THE REVENUE WAS NOT JUSTIFIED IN MAKING ADDITION AT THE TIME OF REASSESSMENT WITHOUT HAVING GIVEN THE ASSESSEE AN O PPORTUNITY TO CROSS EXAMINE THE DEPONENT ON THE STATEMENT RELIED UPON BY THE ACIT. FORGET ABOUT DENIAL OF CROSS EXAMINATION THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT SHORT TO CONCLUDE THAT THE LOAN WAS BOGUS TRANSACTI ON. THIS NOT HAVING BEEN DONE THE DENIAL OF SUCH OPPORTUNITY GO ES TO THE ROOT OF N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 48 THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT. FURTHER RELIANCE IS PLACED ON THE DECISION OF HON'B LE M. P. HIGH COURT IN THE CASE OF PRAKASH CHANDRA NAHTA V / S CI T 201 ITR 134. 2.11 THE ASSESSING OFFICER HAS PRIMARILY RELIED UPON THE NOTINGS ON PAGE NOS. 64 66 AND 68 OF THE DIARY SEIZED FROM SHR I KAMAL GOYAL. AS DISCUSSED ABOVE THE ADDITIONS MADE ON BASIS OF THE SAID NOTINGS HAVE BEEN DELETED IN THE CASE OF M/S N.R. F INANCE PVT. LTD. FURTHER THE STATEMENT OF SHRI KAMAL GOYAL CANNOT B E RELIED UPON AS THE ASSESSING OFFICER HAS NOT PROVIDED THE OPPORTUN ITY OF CROSS EXAMINATION TO THE APPELLANT AND IT GOES AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT IS SEEN THAT NO EFFORT HAS BEEN MADE BY THE ASSESSING OFFICER OF MAKING ANY FURTHER INVESTIGATION OR INQUIRY AND ADDITIONS HAVE BEEN MADE SIMPLY ON THE BASIS OF THE AFOREMENTIONED DOCUMENTS WHICH IS NOT AN ACCEPTABLE SUSTAINABLE AND JUSTIFIED APPROACH. THE ASSESSING OFFICER HAS ACCEPTED THE RATES MENTIONED IN THE SEIZED DOCUMENTS PAGE NOS 64 66 AND 68 OF LPS-A3 SEIZED FROM THE PREMISES OF SHRI KAMAL GOYAL BUT HAS NOT BROUGHT OUT ANY CORROBORATIVE MATERIAL TO SHOW THAT THE INFERENCE MADE BY HER IS CORRECT AND SUSTAINABLE. 2.12 IN VIEW OF THE ABOVE THE ADDITION OF RS.1 89 47 147/- MADE ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM SALE O F PLOTS IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 21. THE ABOVE FINDING OF LD. CIT(A) IN THE CASE OF BOTH THE ASSESSEE(S) WITH RESPECT TO THE ISSUES WERE SIMILAR AND THEREFORE THE FINDING OF ONLY ONE OF THE ASSESSMENT YEAR OF RESPE CTIVE ASSESSEE HAS BEEN REPRODUCED ABOVE. APPEALS OF THE REVENUE FOR SOME OF THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 49 ASSESSMENT YEARS GOT DISMISSED ON ACCOUNT OF LOW TAX EFFECT ON THE BASIS OF CBDT CIRCULAR NO 17 OF 2019 DATED 8TH AUGUST 2019. 22. NOW THE QUESTION BEFORE US IS THAT WHETHER T HE LD. A.O WAS JUSTIFIED IN APPLYING THE ESTIMATED RATE PER SQ. FE ET OF LAND FOR THE PLOTS SOLD BY BOTH THE ASSESSEE(S) AS AGAINST THE S ALES SHOWN IN THE REGULAR BOOKS OF ACCOUNTS DULY EVIDENCED BY REGISTE RED SALE DEEDS?. 23. WE OBSERVE THAT IN THE ALLEGED SEIZED DIARY FOU ND FROM THE PREMISES OF MR. KAMAL GOYAL THERE WAS INFORMATION O F FEW PLOTS OF LAND AND THE RATE OF SALE PER SQ.FEET WAS RANGING F ROM RS.1150/- TO RS.1131/- PER SQ.FT BUT THE LD. A.O FAILED TO RECOR D THE BASIS FOR ADOPTING RS.500/- RS.900/- AND RS.1300/- FOR ASSESS MENT YEAR 2009-10 2011-12 AND 2013-14 AND THE SAME IS PURELY AN ESTIMATE. EVEN THE LD. A.O HAS FAILED TO TAKE ANY VALUATION REPORT FROM DEPARTMENTAL VALUATION OFFICER TO SUPPORT THE RATE ADOPTED BY HIM. 24. WE ALSO OBSERVE THAT NO INCRIMINATING MATERIAL WAS FOUND FROM THE PREMISES OF M/S N.R. FINANCE PVT. LTD AND SIMIL ARLY NO EVIDENCE WAS GATHERED IN THE CASE OF M/S N.R. COMPANY TO SHO W THAT ANY CONSIDERATION OVER AND ABOVE THE DISCLOSED SALE CON SIDERATION IN THE BOOKS OF ACCOUNTS HAS BEEN RECEIVED. IT IS NOT IN DISPUTE THAT THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 50 SALES RECORDED IN THE BOOKS OF ASSESSEE ARE DULY SU PPORTED BY REGISTERED SALE DEED SIGNED BY BOTH THE BUYERS AND SELLERS AND STATING THE CONSIDERATION PAID/RECEIVED BEFORE THE REGISTERING AUTHORITY AND TRANSACTION HAS TAKEN PLACE THROUGH P ROPER BANKING CHANNEL. LD. A.O HAS NOT REJECTED THE BOOKS OF ACC OUNTS U/S 145(2) OF THE ACT. 25. WE FURTHER OBSERVE THAT REVENUE HAS FAILED TO P ROVE THAT BOTH THE ASSESSEE(S) EVER ENTERED INTO ANY TRANSACTION O F ANY NATURE WITH MR. KAMAL GOYAL. EVEN IN THE AFFIDAVIT GIVEN BY MR . KAMAL GOYAL HE HAS NOT STATED ANYTHING ABOUT THE ASSESSEE(S) EXCEP T THAT SOME PLOT OF LAND OF N.R. ESTATE WAS SOLD AND IT IS ALSO PE RTINENT TO NOTE THAT EVEN AFTER SPECIFIC REQUEST ASSESSEE WAS NOT OFFERE D ANY OPPORTUNITY TO CROSS EXAMINE MR. KAMAL GOYAL WHICH ITSELF DEFIE S THE PRINCIPAL OF NATURAL JUSTICE. 26. WE OBSERVE THAT THE CONTENTS OF THE SEIZED DIAR Y SHOWING FEW TRANSACTIONS OF SALE OF PLOT AT N.R. ESTATE ARE T OTALLY DIFFERENT WITH THE ACTUAL TRANSACTION WHICH TOOK PLACE FOR PLOT NU MBERS MENTIONED IN THE SEIZED DIARY. BESIDES THE MISMATCHING OF DA TES AND NAMES EVEN THE ACTUAL PLOT SIZE DO NOT TALLY. THIS FACT IS MORE CLEAR FROM THE FOLLOWING CHART SHOWING RELEVANT INFORMATION AB OUT THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 51 MISMATCH OF DETAILS AVAILABLE IN THE DIARY VIS--VI S THE ACTUAL SALES DATES. AS PER DIARY AS PER SALE PROCEED/SALE DEED & AGREEMENT) MENTIONED PLOT AREA RATE NAME OF DATE OF PLOT AREA RATE OF SALE NAME OF IN DIARY NO (SQ.FT) OF PURCHASER SALE NO (S Q.FT) PURCHASER SALE I-MAY-12 G12A 4800 1211 SANJIV 7-MAR-13 G12A 4833 300 SHWETA GAANG KEDIA 15-MAY- 12 D 20 4800 1225 AL 25-MAR-13 D20 4779 325 SHRADHA JAIN -- G18 4000 1150 HIMANSHU 28-MAR-13 G 18 4801 269.640075 N.R. FINANCES PVT. LTD -- 134 3600 1150 HIMANSHU 29-MAR-12 134 3599 300 DEEPAK BHATIA -- 135 3600 1150 HIMANSHU 28-MAR-13 135 3599 325 PUNIT MANDHWANI -- F 19 4000 1300 HIMANSHU 5-NOV-12 F 19 4001 349.912522 NAMRTA LALWANI -- F22 4000 1300 HIMANSHU 11-AUG- 12 F22 4001 269.64009 N.R. FINANCES PVT. LTD -- D 18 1150 OK 28-MAR- 13 D 18 4001 269.46009 N.R. FINANCES PVT. LTD -- 140 1100 OK 20-JAN-12 140 3595 300.417246 MANJU SATI -- 141 1100 OK 141 3595 NOT SALE TILL DATE -- D 16 1125 OK 31-MAR- 13 D 16 6415 325.779423 VIKASH THAKAR -- D 17 1125 OK 30-MAR-13 D 17 7578 325 UMRANI YADAV -- C6 6500 1250 OK 28-MAR-13 C6 6074 269.639941 N.R. FINANCES PVT. LTD -- B 17 CW B 17 THAT PLOT NO. NOT EXIST IN N .R. ESTATE COLONY N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 52 27. FROM THE ABOVE CHART IT IS VERY MUCH CLEAR THAT THE INFORMATION CONTAINED IN THE SEIZED DIARY WHICH HAS BEEN HEAVILY RELIED UPON BY THE LD. A.O SEEMS TO BE CLUELESS SHO WING NO NEXUS WITH THE ACTUAL TRANSACTION TOOK PLACE. THERE IS N O MENTION OF THE ASSESSEE FIRMS NAME IN THE DIARY. THE BROKER MR. K AMAL GOYAL HAS ALSO NOT UTTERED A WORD ABOUT HAVING ENTERED INTO A NY TRANSACTION WITH THE ASSESSEE(S) EXCEPT THE NOTINGS MADE IN THE SEIZED DIARY. LD. A.O HAS FAILED TO BRING ANY CLINCHING EVIDENCE TO SUPPORT THE ESTIMATED RATE ADOPTED BY HIM. ALL THESE FACTS COL LECTIVELY INDICATE ONLY ONE THING THAT THE ALLEGED DOCUMENT I.E. FEW P AGES OF THE SEIZED DIARY SHOWING SOME INCOMPLETE INFORMATION ABOUT SAL E OF PLOTS AT N.R. ESTATE IS MERELY A DUMB DOCUMENT WHICH UNDER NO CIRCUMSTANCES CAN BE USED AGAINST THE ASSESSEE TO M AKE THE ADDITIONS. 28. THIS VIEW IS WELL SUPPORTED BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V/S VATIKA LANDBASE (P) LTD (2016) 383 ITR 320 (DEL) WHEREIN THE HON'BLE COURT HELD THAT:- THE ADDITION MADE BY THE ASSESSING OFFICER ON THE B ASIS OF DOCUMENTS FOUND AND SEIZED FROM THE COMPUTER OF AN EMPLOYEE OF THE ASSESSEE COMPANY SHOWING THAT THE RATE OF SALE OF FLOOR SPA CE IN COMMERCIAL WAS HIGHER THAN THE RATE SHOWN BY THE ASSESSEE WAS NOT SUSTAINABLE AS THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 53 RATES MENTIONED IN THE SEIZED DOCUMENTS DID NOT RE PRESENT ANY COMPLETED OR MATERIALIZED TRANSACTION. MOREOVER THE ASSESSING O FFICER DID NOT MAKE ANY ENQUIRY FROM THE SAID EMPLOYEE OR FROM THE BUYERS OF FLATS IN RESPECT OF ACTUAL PRICE PAID BY THEM. 29. THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. KANTILAL PRABHUDAS PATEL (2008) 296 ITR 568 (MP) HAS ALSO HELD THAT THE ADDITION CANNOT BE MADE ON GUESS WORK OR ESTIMATES. 30. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF N. RAMANNA REDDY VS. JCTO REPORTED IN (1971) 28 STC 683 WHERE IT IS HELD :-- THAT IF THE TAXING AUTHORITY INTENDS TO BRING TO T AX THE TURNOVER OF DEALER WHICH ACCORDING TO HIM HAS ESCAPED AS SESSMENT BY REASON OF DELIBERATE ATTEMPT ON THE PART OF DEAL ER TO AVOID NET OF TAXATION THEN IT IS FUNDAMENTAL THAT THE DEALE R SO CALLED UPON SHOULD BE GIVEN A JUST AND FAIR TRIAL AND INDEED A FAIR OPPORTUNITY TO EXPLAIN HIMSELF WITH ALL MATERIAL ON WHICH HE COULD SUPPORT HIS CASE . THE ESSENTIAL ELEMENT IN SALES ARE SEL LER BUYER THE GOODS (HERE THE PLOTS) AND THE CONSIDERATION FOR SA LE OR PURCHASE OF GOODS AND UNLESS A NEXUS IS ESTABLISHED BETWEEN TWO SUCH PERSONS AND CONVINCING PROOF IS AVAILABLE TO SHOW THAT CONS IDERATION DID PASS AS A RESULT OF SUCH SALE IT WOULD BE DIFFIC ULT TO ASSUME THAT A SALE OF GOODS FROM ONE PERSON TO OTHER HAS RESULT ED. WHERE THERE IS NO CLINCHING EVIDENCE TO ESTABLISH JURAL RELATIONSH IP OF VENDOR AND PURCHASER THE ONUS ON THE DEPARTMENT BECOME HEAVIE R FOR IT SHOULD SCRUTINIZE THE MATERIAL WITH LYNX EYE AND AFFORD T O THE ASSESSEE AT EVERY MATERIAL POINT OF TIME AN OPPORTUNITY TO COUN TERMAND THE SAME OR LET IN EVIDENCE TO OUTWEIGH THE WEIGHT OF SUCH MATERIAL . 31. IN THE LIGHT OF ABOVE STATED JUDICIAL PRONOUNCE MENTS AND THE FACTS AS NARRATED ABOVE AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE FIND MERIT IN THE FINDING OF LD. CIT(A) AND SUBMISSION MADE BY BOTH THE ASSESSEE(S) AND ARE OF THE CONSIDE RED VIEW THAT N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 54 THE ADDITIONS MADE BY LD. A.O APPLYING THE ESTIMATE D RATE OF PER SQ. FEET OF LAND SOLD BY BOTH THE ASSESSEE(S) SEEMS TO BE PURELY A GUESS WORKS AND IS MERELY MADE ON SURMISES AND CONJECTURE S AND THE IMPUGNED ADDITIONS HAS THUS BEEN RIGHTLY DELETED BY LD. CIT(A) IN VIEW OF OUR FOLLOWING FINDING:- (I) THE ALLEGED SEIZED DOCUMENT IN THE FORM OF PAG E NO.64 66 AND 68 OF LPS-A3 SEIZED DIARY FOUND FROM THE PREMI SES OF MR. KAMAL GOYAL IS MERELY A DUMB DOCUMENT HAVING NO DIRECT NEXUS WITH ANY TRANSACTIONS OF SALE OF PLOT OF LAND IN N.R. ESTATE HAVING CARRIED OUT BY ANY OF THE ASS ESSEE(S) NAMELY M/S N.R. FINANCE PVT. LTD AND M/S N.R. COMP ANY. (II) NO OTHER CORROBORATIVE OR CLINCHING EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE LD. A.O TO PROVE THAT ANY AMOUNT OVER AND ABOVE THE SALE CONSIDERATION DECLARED I N THE BOOKS OF ACCOUNTS OF THE ASSESSEE(S) WAS EVER RECEIVED B Y THE RESPECTIVE ASSESSEE(S). (III) NO OPPORTUNITY OF CROSS EXAMINATION WITH MR. KAMAL GOYAL WAS PROVIDED EVEN THOUGH REQUESTED BY BOTH THE ASS ESSEE(S). (IV) NO PROOF OF ANY FINANCIAL TRANSACTION EVER TA KEN PLACE BETWEEN THE BROKER MR. KAMAL GOYAL AND TWO ASSESSE E(S) N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 55 NAMELY M/S N.R. FINANCE PVT. LTD & M/S N.R. COMPAN Y. LD. A.O HAS HIMSELF MENTIONED THE PHRASE THAT BROKERA GE MIGHT HAVE BEEN VERY MUCH IN CASH IN THE ASSESSMENT ORD ER WHICH SHOWS THAT LD. A.O HIMSELF WAS NOT CERTAIN ABOUT THE TRANSACTION OF BROKERAGE. (V) NO OTHER EFFORT WAS MADE BY LD. A.O TO ENQUIRE FROM THE PLOT HOLDERS SO AS TO PROVE THAT EXCESS AMOUNT WAS PAID BY THEM TO THE ASSESSEE. 32. IN THE RESULT FINDING OF LD. CIT(A) IS CONFIRME D AND THE RESPECTIVE GROUNDS OF REVENUE CHALLENGING THE DELET ION OF ADDITIONS AT RS.2 72 71 700/- AND RS.13 31 01 675/- FOR ASSES SMENT YEAR 2012-13 AND ASSESSMENT YEAR 2013-14 IN THE CASE OF M/S N.R. FINANCE PVT. LTD AND CHALLENGING THE DELETION OF A DDITION OF RS. 1 89 47 147/- RS. 3 41 02 145/- RS. 21 11 75 397/ - AND RS. 33 72 67 720/- FOR ASSESSMENT YEARS 2009-10 2011-1 2 2012-13 AND 2013-14 RESPECTIVELY IN THE CASE OF M/S N.R. CO MPANY ARE DISMISSED. 33. NOW WE TAKE UP THE ADDITIONAL GROUND RAISED BY THE REVENUE IN THE CASE OF M/S N.R. FINANCE PVT. LTD FOR ASSESSMEN T YEARS 2012- 13 AND 2013-14 CONTENDING THAT LD. CIT(A) ERRED IN ACCEPTING THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 56 ADDITIONAL EVIDENCE IN THE FORM OF REGISTERED SALE DEEDS WITHOUT GIVING ANY OPPORTUNITY TO THE LD. A.O AS PROVIDED U NDER RULE 46A OF THE I.T. RULES AND ALSO NOT CALLING OF REMAND REPOR T. 34. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. WE FIND THAT EVIDENCE INDICATED BY THE LD. DEPARTMENTAL REPRESENTATIVE IS REGISTERED SALE DEE DS. THERE IS NO DISPUTE TO THE FACT THAT REGISTERED SALE DEED IS AV AILABLE ON PUBLIC DOMAIN. THE TRANSACTION OF PURCHASE AND SALE OF I MMOVEABLE PROPERTY ARE REGISTERED BEFORE THE REGISTERING AUTH ORITY APPOINTED BY THE GOVERNMENT AND THE DOCUMENTS ARE AVAILABLE ON P UBLIC DOMAIN. THESE DOCUMENTS COULD HAVE BEEN CALLED FOR BY THE L D. A.O WITHOUT INFORMING THE ASSESSEE(S). IN THESE GIVEN FACTS AN D CIRCUMSTANCES OF THE CASE AND ALSO UNDER THE PROVISIONS OF I.T. A CT WHICH PROVIDES CO-TERMINUS POWER TO LD. CIT(A) AS ARE THERE WITH T HE LD. A.O WE ARE OF THE CONSIDERED VIEW THAT THE ALLEGED ADDITIO NAL EVIDENCE CANNOT BE CATEGORIZED AS ADDITIONAL EVIDENCE FOR TH E ISSUE RAISED IN THE INSTANT APPEALS. WE ACCORDINGLY DISMISS THE AD DITIONAL GROUND RAISED BY THE REVENUE IN THE CASE OF M/S N.R. FINAN CE PVT. LTD FOR ASSESSMENT YEAR 2012-13 AND 2013-14. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 57 35. NOW WE TAKE UP GROUND NO.3 OF REVENUES APPEAL FOR ASSESSMENT YEAR 2013-14 IN THE CASE OF M/S N.R. COM PANY CHALLENGING THE DELETION OF ADDITION OF RS.15 67 4 01/- BY LD. CIT(A) WHICH WAS MADE BY THE LD. A.O FOR THE EXCESS DEVELO PMENT CHARGES CLAIMED BY THE ASSESSEE. 36. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT DUR ING THE COURSE OF SCRUTINY PROCEEDINGS ON PERUSAL OF P&L ACCOUNT ALON G WITH THE COMPUTATION OF INCOME OF THE ASSESSEE FOR THE F.Y 2 012-13 IT WAS FOUND THAT THE ASSESSEE HAS DEBITED DEVELOPMENT CHA RGES OF RS.7 38 24 795/- ON ACCOUNT OF EXPENSES AND PROVISI ONS AT RS.3 65 38 200/- AND RS.3 72 86 595/- RESPECTIVELY ON TOTAL SALES OF PLOTS OF RS.19.93 CRORES AFTER DEVELOPING THE SA ME WITH CLOSING STOCK OF RS. 1.22 CRORES. THE ASSESSEE WAS ASKED T O EXPLAIN THE SAME WITH DOCUMENTARY EVIDENCE. SUBMISSION MADE BY THE ASSESSEE WERE CONSIDERED BUT NOT FOUND ACCEPTABLE B Y LD. A.O WHO DISALLOWED DEVELOPMENT CHARGES TO THE EXTENT OF RS. 15 67 401/- OBSERVING AS FOLLOWS:- 5.2 AFTER CONSIDERING THE ABOVE SUBMISSION IT IS FO UND THAT THE ASSESSEE HAS GIVEN TOTAL AREA OF 473221 SQ. FT. AGAINST DEVE LOPMENT CHARGES AS AGAINST 468396 SQ. FT. AGREED UPON AS PER SUPPLEMEN TARY AGREEMENT N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 58 DATED 05/04/2008. DURING THE YEAR THE CHARGES DEBIT ED IN P&L ACCOUNT ARE THEREFORE EXCESS BY 4825 SQ. FT. I.E. (4825 X 2 69) = 12 97 925/-. SINCE THIS AMOUNT IS PAID IN EXCESS OF EXPENDITURE TO BE INCURRED U/S. 37(1) UNDER THIS HEAD THE ASSESSEE WAS ASKED TO EXPLAIN T HE SAME. ALSO THE EXCESSIVE EXPENDITURE INCURRED ON THIS EXCESS AREA @ 55.85 PER SQ. FT. I.E. (4825 X 55.85 PER SQ. FT.) = 269476/- IS NOT ALLOWABLE . THE ASSESSEE HAS NOT GIVEN ANY SATISFACTORY REPLY FOR THE SAME STATI NG THAT THE DIFFERENCE MAY BE DUE TO THE REASON OF DIFFERENCES IN PLOTS SI ZE GIVEN TO THE DEVELOPER AT THE TIME OF ACTUAL POSSESSION. THE ASSESSEE HAS ADMITTED THAT THE EXTRA CHARGES ARE PAID BEYOND THE AGREEMENT AMOUNTING TO RS. 15 67 401/- (RS. 12 97 925/- PLUS RS. 2 69 476/-) AND THEREFORE THE SAME ARE DISALLOWED U/S. 37(1) AN4 ADDED BACK TO THE TOTAL INCOME. 37. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND SUCCEEDED. 38. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 39. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGU ED SUPPORTING THE ORDER OF LD. A.O. 40. PER CONTRA LD. COUNSEL FOR THE ASSESSEE RELIED THE FINDING OF LD. CIT(A) AND ALSO REFERRED TO THE FOLLOWING WRITT EN SUBMISSIONS REPRODUCED BELOW:- B) DISALLOWANCE OF DEVELOPMENT EXPENSES TO THE TUN E OF RS 1567401/- WITH REFERENCE TO THE ADDITION ON ACCOUNT OF DISALL OWANCE OF ALLEGED EXCESS CLAIM OF DEVELOPMENT CHARGES IT IS SUBMITTE D AS UNDER: N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 59 A) M/S. N.R. CO. THE ASSESSEE IS THE ORIGINAL LAND OWN ER OF THE PROJECT NAMED AND SOLD AS 'N.R.ESTATE'. B) THE ASSESSEE FIRM ON 04/04/2007 HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S. N.R. FINANCE (A NON-RELATED CON CERN THOUGH THERE IS A SIMILARITY IN NAME) AND AS PER THE AGREEMENT THE DEVELOPMENT OF THE LAND WAS TO BE MADE BY M/S N.R. FINANCE. COPY OF AG REEMENT IS ENCLOSED HEREWITH. C) THE TOTAL DEVELOPMENT AMOUNT AGREED WAS RS.23 11 00 000/- FOR THE TOTAL PLOT AREA OF 14 63 796 SQ. FT. D) THUS THE DEVELOPMENT COST WORKED OUT TO RS. 157.87 PER SQ. FT. THIS DEVELOPMENT COST WAS DEBITED IN THE BOOKS OF ACCOUN TS YEAR WISE AS PER THE BILL RECEIVED FROM THE DEVELOPER ON THE BASIS O F ACTUAL WORK COMPLETED DURING EACH RESPECTIVE YEAR. E) WHEN THE ASSESSEE FIRM COULD NOT PAY THE DEVELOPMEN T AMOUNT TE THE DEVELOPER IT MUTUALLY ENTERED INTO A SUPPLEMENTARY DEVELOPMENT AGREEMENT DATED 05/04/2008 WITH THE DEVELOPER. THE COPY OF AGREEMENT IS ALSO ENCLOSED HEREWITH. AS PER THIS SUPPLEMENTAR Y DEVELOPMENT AGREEMENT THE ASSESSEE FIRM AGREED TO GIVE DEVELO PED PLOTS TO THE DEVELOPER. F)THESE DEVELOPED PLOTS WERE OF THE SOLD PLOTS TO T HE DEVELOPER. DETAILS DEVELOPER IS ENCLOSED HEREWITH. THE SAID SALES ARE INCLUDED IN THE GROSS SALES SHOWN BY THE ASSESSEE AS PER TRADING A/C ENCL OSED HEREWITH. G) OUT OF THE TOTAL PLOT AREA OF 14 63 796 SQ. FT. TO TAL AREA OF 4 68 396 SQ. FT OF AREA WAS AGREED TO BE GIVEN TO THE DEVELOPER M/S N.R. FINANCES PVT. LTD.' AGAINST THE REMAINING DEVELOPMENT CHARGES OF RS 12 63 00 000/- AS PER SUPPLEMENTARY DEVELOPMENT AGREEMENT DATED 05/0412008. N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 60 H) THUS THE SELLING RATE PER SQ. FT. WORKED OUT TO RS. 269/64 . WHICH WAS AGREED BETWEEN THE PARTIES WAY BACK IN 2008. I) ACCORDINGLY AS PER THE DEVELOPMENT WORK COMPLETED B Y THE DEVELOPER THE PART OF THE AGREED AREA WAS YEAR WISE GIVCN TO THE DEVELOPER AS PER DETAILS ENCLOSED HEREWITH. J) IN THE YEAR UNDER CONSIDERATION OUT OF THE TOTAL AR EA OF 6 67 591 SQ. FT. AREA OF 3 21 445 SQ. FT WAS GIVEN TO THE DEVELOPER WHEREAS REMAINING AREA OF 3 46 146 WAS SOLD TO THIRD PARTIES AS PER DETAIL S ENCLOSED HEREWITH. K) THUS AS AGAINST 4 68 396 SQ. FT AGREED TO BE SOLD TO THE DEVELOPER A TOTAL OF 4 73 221 SQ. FT WAS SOLD TO THE DEVELOPER. 1) OVERALL 4 825 SQ. FT. EXTRA AREA WAS GIVEN (SOLD) T O THE DEVELOPER THROUGHOUT VARIOUS ASSESSMENT YEARS. M) THE ADDITION MADE ON THIS ACCOUNT IS NOT JUSTIFIED BECAUSE WHEN THE EXTRA AREA SOLD TO THE DEVELOPER IS ALREADY INCLUDE D IN THE -GROSS SALES JUST LIKE . SALES TO OTHER PARTIES AND THE PROFIT A RISING THEREON HAS ALREADY BEEN OFFERED FOR TAX JUST LIKE OTHER SALES TO THIRD PARTIES WHERE IS THE QUESTION FOR DISALLOWANCE OF DEVELOPMENT EXPENSES W HEN THE APPELLANT ASSESSEE HAS CHARGED FOR THE SAID AREA. N) IN PRACTICAL IT MAY BE A POSITION THAT WHEN THE APP ELLANT ASSESSEE COULD NOT FIND A BUYER OF A PLOT IN THE OPEN MARKET IT H AD SOLD THE PLOT TO THE DEVELOPER JUST LIKE SALES TO OTHER PARTIES AND ACCO RDINGLY CREDITED THE SALES A/C AND DEBITED THE ACCOUNT OF THE DEVELOPER. 0) IT MAY FURTHER BE APPRECIATED THAT AGAINST THE TOTA L PIN AREA OF 14 63 796 SQ. FT. TO BE DEVELOPED BY THE DEVELOPER ONLY 12.87 315 SQ. FT. WAS DEVELOPED BY THE DEVELOPER UP TO AY 13-14 DETAI LS OF WHICH ARE ENCLOSED HEREWITH. THUS THERE IS NO CLAIM OF EXTRA DEVELOPMENT CHARGES N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 61 SINCE DEVELOPMENT EXPENSES HAVE BEEN CLAIMED FOR 12 87 315 SQ. FT. AS PER BILLS YEAR WISE RECEIVED FROM THE DEVELOPER COP Y OF WHICH ARE ENCLOSED HEREWITH. TDS WAS ALSO DEDUCTED ACCORDINGLY. IN VIEW OF THE AFORESAID SUBMISSIONS THE DEPARTME NTAL APPEAL DESERVES TO BE DISMISSED AND OBLIGE . 41. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THROUGH GROUND NO.3 FOR ASSESSME NT YEAR 2013- 14 IN THE CASE OF M/S N.R. COMPANY THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION MADE BY LD. A.O TOWARDS DEVELO PMENT CHARGES AT RS.15 67 401/-. WE OBSERVE THAT AS PER THE AGRE EMENT BETWEEN THE ASSESSEE AND M/S N.R. FINANCE PVT. LTD 468396 S Q.FT OF AREA WAS AGREED TO BE GIVEN TO DEVELOPER M/S N.R. FINA NCE PVT. LTD (IN SHORT NRFL) AGAINST THE AGREED DEVELOPMENT CHARGE S OF RS. 12.63 CRORES. SELLING RATE WAS FIXED IN THE YEAR 2008 AT RS. 269.64/- PER SQ. FT BUT FINALLY AS AGAINST THE 468396 SQ. FT OF LAND AGREED TO BE SOLD TO THE DEVELOPER 473221 SQ. FT OF LAND WAS SO LD IN OTHER WORDS 4825 SQ. FT OF EXTRA AREA WAS GIVEN. LD. A.O DENIE D THE BENEFIT OF DEVELOPMENT CHARGES COMPUTED AT RS.15 67 401/. ON T HIS EXTRA LAND SOLD TO DEVELOPER AT 4825 SQ. FT. LD. CIT(A) DELETED THIS ADDITION OBSERVING AS FOLLOWS:- N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 62 8.2 IT IS TRUE THAT AS AGAINST TOTAL AREA OF 4 68 396 SQ. FT TO BE SOLD TO THE DEVELOPER AS PER THE SUPPLEMENTARY AGREEMENT DATED 05/04/2008 THE APPELLANT HAS SOLD EXTRA 4825 SQ. FT TOTALLING TO 4 73 221 SQ. FT. HOWEVER THE EXTRA AREA SOLD TO THE DEVELOPER IS ALREADY INC LUDED IN THE GROSS SALES BOOKED BY THE APPELLANT AND THE DEVELOPMENT CHARGES DEBITED IN THE BOOKS OF ACCOUNTS ARE @ 157.87 SQ. FT FOR 4 68 396 SQ. FT ONLY. THE ACCOUNT OF THE DEVELOPER HAS BEEN PLACED ON RECORD. THE YEAR W ISE DEVELOPMENT CHARGES PAID TO N.R. FINANCE PVT. LTD IS AS UNDER : - FIN. YEAR AREA AMOUNT SERVICE VAT BILL AMOUNT TDS 2008-09 170000 26839600 1105792 536792 28482184 645 404 2009-10 258727 40847817 1682930 816956 43347703 877 694 2010-11 226471 35755250 1473116 715105 37943471 758 869 2011-12 415714 65633000 2704080 1312660 69647740 13 92998 2012-13 216403 34165730 1689155 683315 36538200 730 764 1287315 203241397 8655073 4064828 215901298 440572 9 8.3 IT IS SEEN THAT THERE IS NO DISCREPANCY IN THE ABOVE ACCOUNT OF THE DEVELOPER AND NO EXTRA PAYMENT HAS BEEN MADE. FOR THE EXTRA AREA OF 4825 SQ. FT THE SALES HAVE BEEN BOOKED IN THE P&L A CCOUNT. THE TOTAL SALES FOR A.Y 2013-14 AMOUNT TO RS.50 11 64 604/- WHICH I NCLUDE A SUM OF RS.12 75 99 330/- ON ACCOUNT OF RS.4 73 221/- SQ. F T OF DEVELOPED PLOTS GIVEN TO M/S N.R FINANCE PVT. LTD AS PER THE SUPPLE MENTARY AGREEMENT. THE LEDGER ACCOUNT OF THE DEVELOPMENT CHARGES PAID TO M/S N.R. FINANCE PVT. LTD IS ALSO PLACED ON RECORD FOR F.YS. 2008-09 TO 2012-13 AND IT IS SEEN THAT THE TOTAL DEVELOPMENT CHARGES PAID TILL F .Y 2012-13 AMOUNT TO ONLY RS.20 32 41 397/-. THEREFORE NO EXCESS DEVEL OPMENT CHARGES HAVE BEEN PAID BY THE APPELLANT COMPANY. 8.4 IN VIEW OF THE ABOVE THE ADDITION OF RS.15 67 401/- IS DELETED. GROUND NO.2 IS ALLOWED. 42. FROM PERUSAL OF THE FINDING OF LD. CIT(A) WE FI ND NO INCONSISTENCY SINCE SALE CONSIDERATION RECEIVED FRO M SALE OF EXTRA LAND TO M/S N.R. FINANCE PVT. LTD IS ALREADY INCLUD ED IN THE GROSS SALES SHOWN BY THE ASSESSEE AND THE PROFIT ARISING THERE FROM HAS BEEN OFFERED TO TAX. THIS FACT IS DULY VERIFIABLE FROM THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 63 DEVELOPMENT CHARGES PAID TO M/S N.R. FINANCE PVT. L TD FOR ASSESSMENT YEAR 2009-10 TO ASSESSMENT YEAR 2013-14. WE THUS CONFIRM THE FINDING OF LD. CIT(A) AND DISMISS GROUN D NO.3 RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2013-14 IN THE C ASE OF M/S N.R. COMPANY. 43. NOW WE TAKE UP THE CROSS OBJECTIONS FILED BY TH E ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD FOR ASSESSMENT YE AR 2012-13 AND ASSESSMENT YEAR 2013-14 RAISING THE ISSUE THAT NO OPPORTUNITY WAS NOT GIVEN TO CROSS EXAMINE THE BROKER MR. KAMAL GOYAL ABOUT THE CONTENTS APPEARING IN THE SEIZED DIARY. WE FIN D THAT SINCE WE HAVE ALREADY DISMISSED REVENUES APPEAL AND CONFIR MED THE FINDING OF LD. CIT(A) DELETING THE IMPUGNED ADDITION MADE B Y LD. A.O BY ESTIMATING THE UNACCOUNTED SALES APPLYING THE ESTIM ATED RATE OF SALE PER SQ. FT OF LAND SOLD BUT STILL FOR ACADEMI C PURPOSE WE DECIDE TO DEAL WITH THIS ISSUE ALSO. 44. IN THE PRECEDING PARAS WE HAVE ALREADY MADE SPE CIFIC OBSERVATION THAT THE ACTION OF LD. A.O OF MAKING AD DITIONS BASED ON THE THIRD PARTY INFORMATION WITHOUT PROVIDING OPPOR TUNITY OF CROSS EXAMINATION DEFIES THE PRINCIPAL OF NATURAL JUSTICE WHICH THE ASSESSEE IS DULY ELIGIBLE FOR. THERE IS SUFFICIENT MERIT IN THE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 64 ASSESSEES CROSS OBJECTION SINCE THE SPECIFIC REQUE ST WAS MADE TO LD. A.O FOR PROVIDING CROSS EXAMINATION BUT THE SAM E WAS DENIED. THUS EVEN ON THIS LEGAL ISSUE ITSELF THE ASSESSEE D ESERVES TO SUCCEED AND THE ADDITIONS MADE BY LD. A.O BASED ON THE SEIZ ED DOCUMENT FOUND FROM THE PREMISES OF BROKER MR. KAMAL GOYAL D ESERVES TO BE DELETED. IN THE RESULT GROUNDS RAISED BY THE ASSES SEE IN CROSS OBJECTIONS FOR ASSESSMENT YEARS 2012-13 AND 2013-14 ARE ALLOWED IN THE CASE OF M/S N.R. FINANCE PVT. LTD. 45. IN THE RESULT ALL THE GROUNDS RAISED BY THE REV ENUE IN THE CASE OF M/S N.R. FINANCE PVT. LTD AND M/S. N.R. COMPANY ARE DISMISSED AND ACCORDINGLY ALL THE APPEALS OF REVENUE VIDE IT (SS) A NO. 201 ITA NOS.1043/IND/2016 204 206 207/IND/2018 & 423/I ND/2017 ARE DISMISSED AND THE CROSS OBJECTION RAISED BY THE ASSESSEE NAMELY M/S N.R. FINANCE PVT. LTD VIDE CO NOS. 39&4 0/IND/2018 ARE ALLOWED AS PER THE TERMS INDICATED ABOVE. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09.03 .2021 SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 09/03/2021 /DEV N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 65 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR INDORE N.R. COMPANY & N.R.FINANCE LTD. ITA NO.204 206 207/IND/2018 & 423/IND/2017&ORS 66