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TMI Blog2013 (12) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the assessee, the DR, once again, showed his helplessness on the issue of producing the material relied upon by the AO to initiate and make an assessment under section 158BD – Decided against assessee. - IT(SS) No. 57/Mum/2009 - - - Dated:- 13-2-2013 - Shri D. Karunakara Rao And Shri Vivek Varma,JJ. For the Appellant : Shri Pankaj Kumar For the Respondent : Shri Hari S. Raheja ORDER Per Vivek Varma, JM: The appeal is filed by the department, against the order of CIT(A) XXVII, Mumbai, dated 09.03.2009, wherein, the following grounds have been taken: 1. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in holding the agreement made between assessee and developer was a fraud made by brother of assessee and deleted the additions made on account of on money received by assessee which was identified on the basis of incriminating papers seized during the action u/s. 132 of I.T. Act, in the case of CPDPL (Developer of the property). 2. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition made in respect of receipt of on money holding that the AO has not brought any confirmation or material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney having been received on the sale of some flats. This information was forwarded to the AO having jurisdiction over the assessee who initiated proceedings u/s 158BD on the assessee and made the addition on account of practice of on money in the real estate business and made an addition of Rs. 5,56,839/-, being the 4.42% share of the assessee on the total on money received by CPDPL. 6. Aggrieved the assessee approached the CIT(A), wherein the assessee reiterated its stand that, neither he sold his share in the property nor did he receive any kind of proceeds either as sale proceed or on money. During the appellate proceedings, the assessee requested the AO to supply him the copies of the relevant material, on which the AO had based his case and made the addition, the extract of the letter dated 17.03.2008 is as under, "The Asst. Comm. Of Income-tax 17(3) Mumbai Dear Sir, Sub: Asst. Year 2005-06 Copies of material and statement I have received the assessment order making an addition of Rs. 5,56,839/-, against which I have filed an appeal to the Commissioner of Income-tax (Appeals). From the assessment order it is seen that you have relied upon pages 1 to 5 of Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 143(3) r.w.s. 158BD of the I.T. Act on 28.09.2007 on the basis of information received from DCIT, Central Circle 10, Mumbai. The reason for addition of Rs. 5,56,839/- has been fully discussed by AO as per order u/s 143(3) r.w.s. 158BD. The material and statement asked for as above are not in the possession of this office. Sd/- (KAMAL MANGAL) Asstt. Commissioner of Income Tax 17(3)," 7. The CIT(A), after going through the entire facts of the case, came to a conclusion that, "Nothing has been brought on record by the AO on the question of payment of such alleged share to the appellant or for that matter other co-owners. M/s CPDPL was neither confronted with the question whether any payment in respect of on money has been made to the appellant in this case. It is a fact that on money transaction is outside the books of accounts. As already stated M/s CPDPL was not questioned in respect of payment of on money to the appellant at the same percentage as in the Development Agreement as the Development Agreement will never include a clause to refer any transaction like on money sharing which is outside the books of accounts. Therefore, based on the facts and material on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been perpetuated to deprive the coowners of their valuable rights. 05. That the AO did not have any material whatsoever to use the same against the assessee at any appropriate time. 06. That the AO was not in possession of the material and statements, which have been used against the assessee. 07. That the case of fraud and forgery was filed before the Hon'ble Bombay High Court sometimes in 2002, which was prior to the search under section 132 of the Income Tax Act on Keystone Realtors (P) Ltd., which was on 21.01.2003. 13. On the basis of the above facts, which should have been the main foundation for making the addition, we find that the foundation itself is shaky and even the basic material on which the addition should have been made is found to be missing, which clearly falls within the parameters of the ratio laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari vs ACIT, reported in 289 ITR 341, wherein the Hon'ble Apex Court, clearly laid down that for the purposes of initiating proceedings u/s 158BD, the AO who had conducted search, must record reasons for transferring material connected with another person and transfer the material to the AO havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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