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TMI Blog2018 (4) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... stained by the CIT(A) in respect of payments made by the assessee to the aforesaid five parties. Thus, the addition of 8.45 lac sustained by the CIT(A) is deleted. Addition on account of redevelopment/deemed rental income - Held that:- In case the CIT(A) had any doubts as regards the veracity of the said documents, he could have directed the Assessing Officer to have made necessary verifications from the said respective builders, so that the truth may have surfaced. We are further of the view that as the assessee had claimed that the huts under consideration were demolished, therefore, the alternative view of the Assessing Officer that in case the addition made towards redevelopment allowance does not survive, the addition would be called for in the hands of the assessee on account of deemed rental income also cannot be accepted. We are of the view that as claimed by the A.R, now when the huts in itself were demolished and were no more in existence, therefore, the aforesaid alternative contention of the department cannot be sustained. Nothing has been placed on our record or canvassed before us by the ld. D.R to controvert the aforesaid contention of the A.R. In terms of our afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of principle whereas disallowed labour charges to remaining five parties on the different principle which is not only self contradictory but also untenable in the eyes of law. 1 d The confirmation of addition of ₹ 8,45,000/- by the CIT (Appeal) requires to be deleted / quashed and the relief may be granted to the appellant. 2a The Learned CIT (Appeal) has erred in confirming an addition of ₹ 2,30,000/- made by the AO on imaginary and estimated basis on account of non existing redevelopment allowance. 2b While confirming the disallowance, the learned CIT (Appeal) observed that existence of assets in the form of room / cottage not established and there was no contractual agreement for the payment or otherwise of redevelopment allowance, overlooking the fact that in the body of the assessment order itself the A O has specifically mention about existence of assets in the form of room at Three different places, moreover a confirmatory letters was produced from builders and contractors confirming fact that no redevelopments allowance or alternative accommodation rent has been paid to the appellant. 2c The learned CIT ( Appeal ) while confirming an estimated additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Co-op Housing Society Ltd. Shakti Nagar, Marve Road,Malad (W), Mumbai - 400 064 2,00,000/- 2. M/s.GuduKanu Enterprises Room No. 187 Samart Ashok Nagar, Chakkala Vile Parle (E), Mumbai - 400 009 70,000/- 3. M/s. Kuber Enterprises H-Plot No.3, Govind Nagar Malad (E), Mumbai - 400097 2,00,000/- 4. M/s. Shyam Arts Flat No. 14 D. Wing, Govardhan Nagar, Barsopada Road, Behind Kandiwali (W), Mumbai -400 067 75,000/- 5. M/s. S.L. Construction Shivaji Nagar, Gate No.2, Madh Village, Madh island,Via Versova, Andheri (W), Mumbai -400 061 3,00,000/- However, all the aforesaid notices were returned unserved. The Assessing Officer in the backdrop of the aforesaid facts, called upon the assessee to explain as to why the payments made to the aforementioned parties may not be treated as bogus. Subsequently, the Assessing Officer in addition to the aforesaid parties also called upon the assessee to substantiate the genuineness of the payment of ₹ 4.00 lac made to one M/s. Maa Durga Construction. The Assessing Officer directed the assessee to furnish complete details in respect of the aforesaid parties, viz. (i).name & age of the Chief Executive Officer/Proprietor/Princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee for A.Y. 2009-10, which though was pending in appeal before the CIT(A), but however, as there was no change in the facts of the case during the year under consideration, therefore, made the addition in the hands of the assessee for the year under consideration. The Assessing Officer inter-alia made certain other additions and vide his order dated 28/02/2013, assessed the income at ₹ 21,92,880/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A). During the course of the appellate proceedings the assessee submitted copies of ledger accounts, bills and PAN nos. of labour contractors along with their bank statements highlighting the payments made to them. The assessee taking support of the aforesaid documentary evidence claimed that the same clearly proved that the above mentioned six parties were genuine and payments were made to them for the labour work carried out by them. The CIT(A) after deliberating on the contentions raised by the assessee in the backdrop of the facts available on record, was however, not persuaded to be in agreement with the claim raised by the assessee before him. The CIT(A) taking cognizance of the fact that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il work was carried out, therefore, the same did not inspire much of confidence to support the claim of the assessee. The CIT(A) further after carrying out a comparative analysis of the bills raised by the aforementioned parties as against their respective PAN cards, recorded his observations as regards the discrepancies emerging therefrom, as under:- " The bill of Shri Arun Tank is found to be signed by him in English while his PAN card bears his signature in Gujarati. • The signatures of Shri Guddu Kanu (Prop. M/s.Gudu Kanu Enterprises) and Shri Shalikram Yadav (Prop. M/s.S.L.Construction) on the bills are totally different from the ones on the respective PAN cards. • Shri Govind Tiwari, Prop. Kuber Enterprises is seen to have signed the bill in English as "G.Tiwari" which has no similarity at all with his signature on the PAN card. • The bill of M/s. Shyama Arts dated 27.03.2010 is found to be signed by "Shayam Kumari Soni" (female) in English whereas the PAN card is in the name of Mr.Satrohan C. Soni (male) and bears his signature in Hindi. • The addresses of M/s.Kuber Enterprises [H-Plot No.3, Govind Nagar, Malad (East), Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the redevelopers, viz. M/s. Hubtown Ltd. for Mayanagar Project and M/s. Aarti Projects & Constructions for Rajivnagar Project, wherein both the said respective builders had clearly stated that no redevelopment allowance or alternate accommodation rent was paid by them to the assessee. However, the CIT(A) being of the view that as the assessee had failed to produce the relevant redevelopment agreements either during the course of assessment proceedings or before him, therefore, the Assessing Officer had rightly drawn adverse inference in the matter of estimation of annual redevelopment allowance to the best of his judgment. The CIT(A) was further of the view that as the assessee himself was working as a contractor at the Rajivnagar (redevelopment site), therefore, the confirmation letters obtained by the assessee from the redevelopers, viz. M/s. Hubtown Ltd. and M/s. Aarti Projects & Constructions, wherein the respective builders had denied making of any payments by way of redevelopment allowance or alternate accommodation rent to the assessee, could safely be characterised as a self serving evidence, which thus, could not be relied upon. The CIT(A) observed that as similar addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further in order to drive home his contention that no adverse inference as regards the veracity of the payments made to the aforementioned five parties was liable to be drawn, submitted that the assessee in order to remove any scope of doubt, had placed on record of the lower authorities the copies of the bank statements evidencing the making of the aforesaid payments. The ld. A.R adverting to the addition of ₹ 2.30 lac made by the Assessing Officer on account of redevelopment allowance/deemed rental income, submitted that the said addition was merely backed and supported by whimsical presumptions of the Assessing Officer, and there was no basis for making of such addition. That as regards the ground of appeal No.3 raised by the assessee in respect of disallowance of ₹ 25,746/- made by the Assessing Officer as regards the telephone expenses, it was averred by the ld. A.R that the same was not being pressed. Per contra, the ld. Departmental Representative (for short, 'D.R') relied on the orders of the lower authorities and submitted that as the assessee had failed to substantiate the genuineness and veracity of the payments made towards labour expenses, therefore, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer on account of redevelopment allowance/deemed rental income, which thereafter had been sustained as such by the CIT(A). We shall first take up the issue as regards the disallowance of ₹ 8.45 lakhs made by the Assessing Officer in respect of labour expenses which was claimed by the assessee to have been paid to the aforementioned five parties. We find that it remains as a matter of fact that the assessee in order to fortify his claim as regards the genuineness of the payments made to the aforementioned parties, had placed on record copies of ledger accounts, bills and PAN numbers of the labour contractors along with the bank statements which duly evidenced the factum of making of respective payments by the assessee to the said parties. We further find that the assessee, who was directed by the authorities below to place on record the copies of the returns of income of the respective parties to whom the payments towards labour charges of ₹ 8.45 lakhs was claimed to have been made, not being in a position to obtain the copies of such returns of income from the said parties, therefore, had in all fairness furnished with the lower authorities the jurisdiction details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e borne on their respective PAN cards could form a basis for drawing of adverse inference as regards the genuineness of the claim of the assessee. We find that the CIT(A) had observed certain discrepancies in the signatures, for the reason that either the signatures in certain cases as appearing on the bills were in English, while for those on the PAN cards were in Gujarati or/and in certain situations signatures on the bills did not tally with those borne on the respective PAN cards. We however, are unable to persuade ourselves to justify drawing of adverse inferences on the basis of the aforesaid reasoning, for the reason that now when the said respective parties were holding the PAN cards issued by the department and the complete income tax credentials of the said respective parties along with their addresses were available with it, thus, nothing stopped them from verifying the authenticity of the claim of the assessee by looking into the income tax records of the said respective parties. We are further of the view that even otherwise, there is no restriction or bar on the part of an assessee to put his signature in vernacular or in English, as per his choice, and thus no advers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the lower authorities had placed on record the confirmation letters dated 05/01/2016 from the redevelopers, viz. (i) M/s.Hubtown Ltd. for Mayanagar Project; and (ii) M/s. Aarti Projects & Constructions for Rajivnagar Project, wherein the said respective redevelopers had categorically stated that no redevelopment allowance or alternate accommodation rent was paid to the assessee, but however, the said material documentary evidence which seized the issue under consideration was discarded by the CIT(A) for the reason that as the assessee was himself working as a contractor at the Rajivnagar site, therefore, confirmation letters submitted by him from M/s. Hubtown Ltd. and M/s. Aarti Projects & Constructions during the course of appellate proceedings, wherein the said respective parties had denied making of any payment or any alternate accommodation rent to the assessee were to be rejected as being nothing better than self serving evidence. We find it beyond comprehension as to how such well substantiated claim of the assessee could have been rejected by the CIT(A) by characterising the same as a self serving evidence. We feel that in case the CIT(A) had any doubts as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that existence of assets in the form of room / cottage not established and there was no contractual agreement for the payment or otherwise of redevelopment allowance, overlooking the fact that in the body of the assessment order itself the A O has specifically mention about existence of assets in the form of room at Three different places, moreover a confirmatory letters was produced from builders and contractors confirming fact that no redevelopments allowance or alternative accommodation rent has been paid to the appellant. 3c The learned CIT ( Appeal ) while confirming an estimated addition on account of redevelopment allowance has merely acted on surmises, suspicion, presumption and preceding assessment order overlooking the documentary evidences produced / available before him. 3d The addition of ₹ 2,30,000/- which is made purely on guess work deserves to be deleted. 4 The appellant craves leave to add, alter, amend, modify or revise the grounds of appeal." 11. Before adverting to the issues under consideration, we may herein observe that the appeal of the assessee for the year under consideration, viz. A.Y. 2011-12 involves a delay of 120 days. During the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to find any infirmity in the order of the CIT(A) upholding the validity of the reopening of the assessment made by the Assessing Officer under section 147 of the Act. 15. The assessee had further assailed before us the validity of the confirming of the disallowance of labour expenses of ₹ 1,58,271/- and an addition of ₹ 2.30 lac on an estimate basis in respect of redevelopment allowances by the CIT(A). We find that as the facts and the issues pertaining to both the aforesaid additions/disallowances remain the same, as were there before us in the appeal of the assessee for A.Y. 2010-11, viz. ITA No. 2020/MUM/2017, therefore, our observations recorded therein shall apply mutatis mutandis for disposal of the respective grounds of appeal, viz. ground of appeal No.2 and grounds of appeal No. 3(a) to 3(d), so raised by the assessee in the present appeal before us. Thus, the appeal of the assessee is partly allowed in terms of our aforesaid observations. 16. In the result, appeal of the assessee for A.Y. 2010-11 in ITA No. 2020/MUM/2017 is allowed, while for, the appeal of the assessee for A.Y. 2011-12 in ITA No. 2021/MUM/2017 is partly allowed. Order Pronounced in open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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