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TMI Blog2017 (9) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... minently possible from the facts and circumstances peculiar to the assessee and its business. It is not as if any general observations have been made, particularly on law by the Tribunal and we, therefore, do not see its reasoning in paras 39 and 40 in isolation or read it out of context. If we peruse the order of the Tribunal in its entirety and for all the relevant assessment years, then, the reasons in paras 38 and 40 cannot give rise to any substantial question of law. It is a factual exercise which has been performed by the Tribunal and its conclusion that there could not be a double addition given the explanation for the source of expenditure, is also a permissible one. It is not as if such a conclusion is unknown to law. That is not even the stand of the Revenue before us. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership firm. It filed its original return of income declaring taxable income of ₹ 2,27,770/. This return was filed on 15.10.1990. The assessment in question was finalised under Section 143(3) of the I.T. Act, 1961 on 28.8.1992 determining the total income at ₹ 2,48,232/. The assessee-firm being engaged in the business of executing civil contracts had undertaken a development project for the construction of a commercial complex known as V.V. Market. This was a contract awarded by the then Jalgaon Municipal Council, Jalgaon. The work in respect of the development project commenced during the previous year relevant to the Assessment Year 1989-90. The assessee-firm has claimed upto 29.3.1994 that it is adopting project completion method as far as income from the development of V.V. Market is concerned. On the basis of this stand, the assessee did not offer any income from the said V.V. Market work. It is then stated that a search under Section 132 of the I.T. Act, 1961 was carried out on the office premises of the assessee-firm as well as the residence of the partners of the firm on 1181994. During the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration made by the senior partner was not considered at the time of determining the cost of construction, a further reference was made to the DVO to determine the cost of construction in V.V. Market. The DVO has furnished a revised valuation report dated 11.3.1997 determining the cost of construction of V.V. Market at ₹ 8,71,77,968/. 13. Since during the search various incriminating papers were found in the business premises as well as at the residence of the partners, the Assessing Officer concluded that the firm and its partners transferred various shops to purchasers on receipt of privilege money on much higher rate than that was recorded in the books of account of the assesseefirm. The details of such 'on money' earned has been made as an annexure to the assessment order. The issue regarding charging of 'on money' has been discussed by the Assessing Officer in the Assessment Order dated 27.3.1997 which was questioned by the assessee by filing appeals before the First Appellate Authority. The First Apppellate Authority decided the assessee's appeals by his order dated 29.5.1998. He granted partial relief to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shops on first floor. However, by the Appellate Order, the Assessing Officer was directed to apply the rate of 100% of the recorded price in respect of shops on first floor. That no estimate can be made in respect of shops/stalls sold to the nominees of the Jalgaon Municpal Council and this total 'on money' and computed as above was to be added to the recorded sale price for the purpose of determining the profits from the project. 17. In these circumstances, Mr. Suresh Kumar would submit that the Tribunal having upheld the exercise of the Assessing Officer, including the reference made to the DVO not once but twice, its final conclusion cannot be sustained. Thus, that is giving rise to substantial questions of law. 18. On the other hand, Mr. Nitesh Joshi would submit that the primary requirement of satisfying this Court that the appeals raise substantial questions of law has not been fulfilled in this case. The Revenue argued generally in the earlier round and such assertions and arguments of the Revenue were, with great respect, accepted by this Court necessitating the assessee filing appeals to the Hon'ble Supreme Court of India. Once the provisions of the law mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he initial disclosure of the assessee on this cash receipt was not found to be satisfactory. It was rather a misleading explanation and which led to several actions, including search and seizure. After the materials were seized, including incriminating documents, the Assessing Officer went about the exercise of scrutinising the revised return of income. During the course of the same, several queries and questions were raised. The 'on money' deals were probed in the backdrop of a contract awarded by the Jalgaon Municipal Council to the respondent/assessee contractor and developers. There were certain shops which were to be allotted to the nominees of the Municipal Council and certain shops could have been sold in open market. It is in relation to the shops and sold essentially in the open market that the issue arose for determination. The sums received in cash so as to book the shops were paid by the interested parties. These interested parties were identified, equally the shops and the consideration determined. If the total consideration was determined and certain component of it was received in advance or as 'on money' in cash, then, the Tribunal concluded tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question of making any addition under Section 69C does not arise because the source of the expenditure is duly explained. It is only the 'on money' which can be considered for the purpose of taxation. That is what the Tribunal therefore concluded and once the 'on money' is considered as revenue receipt, then any expenditure out of such money cannot be treated as unexplained expenditure, for that would amount to double addition in respect of the same amount. 22. It is not a general or vague observation and finding or an inference drawn contrary to any specific legal provision but it is a conclusion imminently possible from the facts and circumstances peculiar to the assessee and its business. It is not as if any general observations have been made, particularly on law by the Tribunal and we, therefore, do not see its reasoning in paras 39 and 40 in isolation or read it out of context. If we peruse the order of the Tribunal in its entirety and for all the relevant assessment years, then, the reasons in paras 38 and 40 cannot give rise to any substantial question of law. It is a factual exercise which has been performed by the Tribunal and its conclusion that there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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