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TMI Blog2019 (4) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance - HELD THAT:- Assessee being a company, is a separate juristic entity, therefore any element of ‘personal expenses’ would therefore need to be demonstrated with reference to the directors. The said proposition has been rendered in the case of Sayaji Iron & Engeneering Co. Vrs. CIT (2001 (7) TMI 70 - GUJARAT HIGH COURT). Thus, CIT(A) had rightly deleted the disallowances while keeping in view the above judgments. Even before us, no new facts or contrary judgments have been brought on record in order to controvert or rebut the findings so recorded by CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings so recorded by the CIT(A). - this ground raised by the revenue stands dismissed. - I.T.A. No.4023 & 4026/Mum/2016 - - - Dated:- 1-3-2019 - Shri Sandeep Gosain, JM And Shri N. K. Pradhan, AM For the Appellant : Shri Awangshi Gimson, DR For the Respondent : Shri Vijay Mehta/Govind Jhaveri, AR ORDER PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER: The present two appeals have been filed by the revenue are against the order of Commissioner of Income Tax (Appeals)-47, Mumbai dated 14.03.16 for AY 2008-09 2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,54,730/-. The return was taken up for scrutiny thereafter. Assessment u/s 143(3) r.w.s 153A for A.Y. 2008-09, was completed vide assessment order dated 29.03.2014 determining total income at ₹ 8,63,02,410/- on account of addition of 'on-money' of ₹ 3,87,28,680 and disallowance of additional claim of ₹ 1,18,997/-. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, partly allowed the appeal of the assessee and deleted the additions. Now before us, the revenue has preferred the appeals for respective years. However at present we are dealing with the appeal filed by the revenue bearing ITA No. 4023/Mum/2016 on the grounds mentioned herein above. 5. The solitary ground raised by the revenue relates to challenging the order of Ld. CIT(A) in deleting the addition of on-money of ₹ 3,87,28,680/- received on sale of flats. 6. Ld. DR appearing on behalf of the department relied upon the orders passed by the AO and submitted that Ld. CIT(A) has erred in deleting the additions of on-money received by the assessee on sale of flats by wrongly relying upon the observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jasani (Accountant in the Group), Mr. Paresh Panchlotiya (Office Assistant/Liaison Officer) for the proposition that on money was collected on sale transactions and accordingly asked the appellant to explain as to why such addition should not be made in its hands. 9. Late Shri Jitendra Mehta, Director rebutted the conclusions drawn by the AO by stating that none of the individuals whose statements were relied upon by the AO were in anyway authorised to close sales transactions It was further stated that copies of the said statements had not been provided to him. It was stated that though Shri Haresh Mohanlal Mehta was Director in one of the many concerns of Rohan Group (Rohan Developers Private Limited), he was not involved in sales and was not handling the day to day activities in the period pertaining to the search-related proceedings nor was he receiving any remuneration from the assessee company. It was submitted that no sales person or other staff of the company was reporting to Shri Haresh Mohanlal Mehta. It was further stated that Shri Haresh Mohanlal Mehta independently owned a construction company in the name of Raj Doshi Exports Ltd. It was submitted that the admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vijay Jasani, Paresh Panchlotia had categorically mentioned that in the statements of above said persons, no specific mention of either the assessee company or of the project undertaken by it was given and none of the statement reflect any specific details regarding the receipt of on-money by the assessee company in relation to the project i.e. carried on by it. It was also noticed that all the statements made by the above persons were subsequently retracted through affidavits. Since the AO had taken a specific stand that the disclosure of ₹ 100 crores by Late Shri Jitendra Mehta was indicative of the fact that the group had received on-money and in this respect a detail chart has been mentioned in the order of Ld. CIT(A) in para no. 5.2.10. However, perusal of the chart shows that the income offered was in respect to specific entities /persons and also with reference to specific sources /documents found in the search e.g. horse racing loss and property income in the case of Mr. Harresh Mehta, income with reference to seized paper at page 97, Annexure A-1 in the case of M/s Manav Builders Pvt. Ltd. etc. Hence in such circumstances, Ld. CIT(A) has correctly held that when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve portion of the order of Hon ble ITAT contained in para no. 2 to 5, which is reproduced below:- 2.The brief facts of the case are that Rohan group of entities along with directors, family members and related parties were subject to search and seizure operations u/s. 132 of the Act on 26/05/2011,that the assessees was also associated with the said group.Subsequent to the search a notice u/s. 153A was issued to the assessee on 11/01/2013.It filed a return on 04/03/2013, declaring income at ₹ 36.65 lakhs. During the assessment proceedings, the AO found that the assessee had undertaken the construction of a commercial project Rameswaram.During the search proceedings statements of Haresh Mohanlal Mehta(HMM), one of the directors of the Rohan group,were recorded,who admitted that that 30% on money was accepted over and above the receipt value of the agreement and the same was not recorded in the regular books of accounts.The AO also took note of the statements of sales and marketing executive, accountant of the group and of the liason officer for the proposition that on money was collected on sale transactions and accordingly asked the assessee to explain as to why such addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of non-abated assessments addition had to based on incriminating material seized during the search, that the only document referred to in the impugned order was page 114 of annexure A-1 and the statements of HMM along with the statements of employees,that the perusal of the seized paper revealed that there was no mention of the assessee or the project undertaken by it on the said paper,that the above referred paper did not make any mention of the assessee,that the perusal of the statements of the employees reflected that no specific mention of receipt of on money, that the impugned assessment was not based on any incriminating material pertaining to the assessee seized during the search, that the addition made on account of on money was not emanating from the material found and seized during the search action.Finally,she deleted the addition made by the AO. 4.During the course of hearing before us,the Departmental Representative stated that the employees of the assessee had accepted the fact that on money at the rate of 30% of the registered value was accepted by the company.As stated earlier, none appeared on behalf of the assessee. 5.We have perused the available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now we take up ITA No. 4026/Mum/2016 filed by revenue. 17. Since we have already decided the appeal filed by revenue in ITA No. 4023/Mum/2016 and dismissed the same on merits qua additions made by AO on account of on-money. Therefore following our own decision in ITA No. 4023/Mum/2016, we apply the same findings in order to maintain judicial consistency which is applicable mutatis mutandis in the present appeal of the revenue. 18. However, for the year under consideration, the revenue has also challenged the order of Ld. CIT(A) in deleting the disallowance on conveyance and telephone expenses. 19. On this ground, we have heard the counsels for both the parties and perused the material placed on record as well as orders passed by the revenue authorities, we find that the disallowance was made by the AO stating that the assessee was unable to establish that these expenses were incurred solely for business purposes and thus made adhoc disallowance. However, the assessee being a company, is a separate juristic entity, therefore any element of personal expenses would therefore need to be demonstrated with reference to the directors. The said proposition has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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