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TMI Blog2017 (11) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the third parties from whom such incriminating material was seized by the Revenue which revenue intend to rely to prejudice the assessee . - Decided in favour of revenue for statistical purposes. - I.T.A. No. 5752/Mum/2015 - - - Dated:- 23-11-2017 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Revenue : Ms. Pooja Swaroop For The Assessee : Ms. Ritika Agarwal ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the Revenue, being ITA No. 5752/Mum/2015 for assessment year 2008-09, is directed against the appellate order dated 07-10-2015 passed by learned Commissioner of Income Tax (Appeals)-26, Mumbai (hereinafter called the CIT(A) ), for assessment year 2008-09, appellate proceedings had arisen before learned CIT(A) from the assessment order dated 26-03-2014 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter called the Act ). 2. The grounds of appeal raised by the Revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the tribunal ) read as under:- 1. On the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plots. Mr. Madan Kolambekar is one of the land aggregators for Jain Corp Group. The Jai Corp Group has given advances to Mr. Madan Kolambekar from its various entities namely, M/s. Iconic Realtoers Ltd, M/s. Ekdant Realty Developers Ltd, M/s. Rudradev Developers Ltd. and M/s Krupa Realtors Ltd, to work out the acquisition of lands/plots. The entire funding for the said land acquisitions have been made by the Jai Corp Group only. Mr. Madan Kolambekar brings offers of land deals to [ain Corp Group and after getting the consent of Jain Corp Group, he utilizes the money received as advance for making advances to various farmers/ investors / sellers. At later stage, it is mutually, decided that whether the land would be directly purchased in the name of Jain Corp Group entities or it will be routed through Mr. Madan Kolambekar. The details of unaccounted payments made to sellers of the plots who had entered into deals with Mr. Madan Kolambekar/Jai Corp Group entities have been discussed in Page Nos.89 to 114 of the Appraisal Report in the case of Madan Kolambekar Group and also Page No.100 to 140 of the Appraisal report in the case of Jai Corp Group. Analysis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 132 of the Act was carried out on 02/01/2009 in the case of Mr. Madan Kolambekar Group of cases, mainly dealing in the business of properties / real estate based in Navi Mumbai. The details of unaccounted payments to sellers of the plot who had entered deals with Mr. Madan Kolombekar / Jai Corp Group entities have been discussed on Page Nos. 89 to 114 of the Appraisal Report in the case of Madan Kolombekar Group , and also Page No. 100 to 140 of the Appraisal Report in the case of Jai Corp Group. Analysis of the evidences found and incriminating documents seized (especially from details contained under the head Development Charge ), it was revealed that M/s V M Constructions had made a land deal (LOI stage ), in respect of CIDCO plot (Sector-48, Plot No.5, Area -2000) in Dronagiri node for which M/s V M Constructions have received unaccounted cash of ₹ 2,71,00,000/- on 28/01/2008. Page No. 221 of Annexure A-3, seized and impounded indicates the payments received by M/s V M Constructions. In spite of the concrete evidence as above with the department, the undersigned have also gone through in details of the above land deal. Ward Inspector was deputed to field enquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in the business of properties/real estate in Navi Mumbai. Unaccounted payments were made by Mr Madan Kolambekar/Jai Corp Group to sellers of the plot of land which are duly entered by these entities in their books of accounts , the details of which are mentioned in appraisal report page no. 89 to 114 in the case of Madan Kolambekar Group and page no. 100 to 140 of the appraisal report in the case Jai Corp Group , both the said parties were subjected to search u/s. 132 of the Act. It was observed by the AO that the assessee has not entered these cash receipt of ₹ 2.75 crores in its books of accounts and the same was not offered for tax. It was observed by the A.O. based on analysis of incriminating documents seized that the assessee had made land deal ( LOI stage) , in respect of CIDCO Plot no. 5, Sector-48 of area of 2000 square meters at Dronagiri Node, Navi Mumbai wherein the assessee had received cash of ₹ 2,71,00,000/- on 28.01.2008 . Reference was made to seized document vide page no. 221 of Annexure A-3 seized and impounded by the revenue which indicates that the payment was received by the assessee in cash which was not offered for tax by the assessee. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Central Circle 39. There has also been no effort to find out what the appellant had done with the money it is said to have received. In the absence of worthwhile or meaningful effort to ascertain the factual position, it becomes difficult to sustain an addition based only on the entries found in the books of a third party even if the party is the purchaser of the property from the appellant. As a result, it is seen, the A.O. has not gone beyond the initial stages of the verification and had not taken the reopening of the assessment to its logical conclusion. The entries which were found on a sheet of paper found in the premises of the purchaser, have not been corroborated by any other material or other evidence. As submitted by the appellant the absence of any supporting documents or evidence renders the assessment of the amount, arbitrary in nature. The third party, no doubt, is purchaser of the property for which the unaccounted money is said to have been received by the appellant. However even in a situation like this, it would not be proper and correct to come to a conclusion that the appellant had received the money in the absence of any other supporting documents or evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 26 . The said plot of land was purchased for ₹ 1.62 crores on 20.12.2007 which was later sold for ₹ 1.75 crores on 26.02.2008 to Madan Kolambekar . It was submitted and statement was made at bar by learned counsel for the assessee before the tribunal that the Revenue has not given copy of seized material to the assessee and the seized material as contained in page no. 76/paper book was obtained in pursuance to an RTI application made by the assessee . It was also submitted that reasons for reopening of the assessment u/s 147 were not furnished by the A.O. to the assessee. It was submitted by learned counsel for the assessee that second opportunity cannot be given to the A.O and no addition can be sustained . It was also submitted that no addition can be made in pursuance to document seized from 3rd party without confronting the same to the assessee and without providing an opportunity to rebut to the assessee and to cross examining the said third party from whom said document was seized. The Ld. DR in rebuttal submitted that assessee was duly given copy of reasons for reopening on 3rd August, 2013 which duly found mentioned in the appellate order of learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee that reasons recorded were not provided nor the copies of seized material were provided to the assessee. The learned DR disputed the contention of the learned counsel for the assessee and claimed that reasons for reopening of the assessment u/s 147 were duly supplied to the assessee on 12-03-2008 which found mentioned in learned CIT(A) appellate orders while it is claimed by the assessee that so far as seized material is concerned, the same was obtained vide RTI application. Revenue has also prepared appraisal report in the case of Madan Kolambekar Group as well Jai Corp Group wherein it is claimed by the Revenue that there is mention of receipt of ₹ 2.71 crore in cash by the assessee against the sale of the afore-said plot. The learned CIT(A) has deleted the additions by entering into blame game wherein the AO was blamed for not following proper procedure and enquiry during assessment proceedings . The powers of the learned CIT(A) are co-terminus with the powers of the AO and in case the learned CIT(A) finds any deficiency in the manner assessment proceedings were conducted by the AO, he is duty bound to conduct proper enquiries. The learned DR has rightly re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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