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TMI Blog2019 (12) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case that too under section 144/143(3) of the Act without considering the material on record and more-so when the assessment order was passed without following principles of natural justice and on the basis of material collected at the back of the assessee but never confronted to the assessee. 3. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming addition of Rs. 17,91,73,500/- (instead of addition of Rs. 17,91,00,000/- made in assessment), being money received in bank account of the assessee during the impugned year, as alleged unexplained credit under section 68 of the Act. 4. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 17,91,73,500/- on account of amount received from M/s. Samyak Projects Ltd. during the impugned year as income generated by the assessee without appreciating correct facts of the case. 5. That in any view of the matter and in any case, the action of Ld. CIT (A) in confirming the addition of Rs. 17,91,73,500/- is bad in law and against the facts and circumstances, being a case of double taxation where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed to tax in Ward-38(3), New Delhi. Briefly, the facts are as under:- i. During the course of investigations by ADIT (Inv)-1, Faridabad, it came to light that there was a piece of land measuring 8.395 acres in Sec-91, Gurgaon in the books of M/s. Aravali Heights Infratech P Ltd. and 6.017 acres in the books of M/s. SRP Builders Ltd. Both these companies had got joint license from Directorate of Town & Country Planning, Haryana, for construction/development of a group housing complex on the joint land measuring 14.412 acres. ii. Sh. Yathartha Vashishtha (Prop. M/s. Yathartha Constructions) obtained 100% control in both companies by purchasing shares of these two companies from existing share holders vide MOU dated 25.06.2010. iii. M/s. Aravali Heights Infratech P. Ltd., M/s. SRP Builders Ltd. and Sh. Yathartha Vashishtha (Prop. M/s. Yathartha Construction) entered into further agreement with M/s. Samyak Project P. Ltd. on 09.09.2010. Under this agreement, the first three entities sold construction/development/ownership rights in the land to the last named entity for a consideration of Rs. 80.15 crores. iv. The above agreement was further modified on 29.09.2011 accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the information received from the Investigation Wing as incorporated above, the Assessing Officer observed that assessee had received sum of Rs. 17.91 crores from M/s. Samyak Project Pvt. Ltd. and the payment of the said amount has also been confirmed by Shri S.K. Jain, the Director of M/s. Samyak Project Pvt. Ltd., during his statement on oath in response to summons issued u/s. 131 before the ADIT (Inv.) on 16.04.2012 and 24.12.2012. The statement has been incorporated in the assessment order and also in the impugned appellate order. From the material and information received and from the statement, the Assessing Officer concluded that the amount of Rs. 17.91 crore received from M/s. Samyak Projects Pvt. Ltd. which has been duly confirmed by the Director of the said company has not been offered as taxable income by the assessee nor any explanation was filed. Accordingly, he treated the said amount as unexplained cash credit which has been added u/s. 68. 5. Further, Assessing Officer noted from the individual transaction statement downloaded from the AST that an amount of Rs. 2,84,88,000/- was deposited in the account of Yathartha Construction in cash and further sum of Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Builders Limited. * Further from page 1 and 2 of the agreement dated 29/09/2011 (Paper Book Page No. 26-27), it may please be seen that first 3 parties has been described as owners, whereas the assessee has been described as a confirming party. * From page 7 (Paper Book Page No. 32) first term, it can be seen that these owners had transferred FSI in their project to M/s. Samyak Projects Pvt. Ltd. From the above, it is absolutely clear that money in question that had been paid by M/s. Samyak Projects Pvt. Ltd. had come against sale of the project by the owners and not by the assessee. In these circumstances liability to pay tax is on the owners. * For the reasons contained in the first para of Page 6 of agreement (paper book page no. 31) read with agreement dated 25/06/2010 (paper book page no. 9-15), the assessee was merely a confirmatory party in the deal and was repository of the funds received by him on behalf of the owners of the project" The assessee had acquired a right to obtain control in these project-owning companies subject to certain conditions. He, therefore, could have been a vital figure had he obtained such control prior to completion of projects and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. SRP Builders are owners of total of 115 kanals and 6 marlas (approx. 14.412 acres) land at residential sector 91 of Gurgaon-Manesar Urban Master plan 2021. 3. That Sh. Vikram Singh had relinquished his part of the land to M/s. Aravali Heights Infratech P Ltd. and M/s. SRP Builders Limited for a consideration of Rs. 3.11 crore. 4. That M/s. SRP Builders and M/s. Aravali Heights Infratech Pvt. Ltd. had entered into an agreement with M/s. Yathartha Construction vide an MOU dated 25/06/2010 where in M/s. Yathartha Construction would acquire the right to develop the said land along with purchase of shares resulting in gradual 100% control in M/s. SRP Builders Ltd. and M/s. Aravali Heights Infratech P Ltd.. 5. That as per MOU, an amount of Rs. 55.68 Cr would be given by M/s. Yathartha Construction to the vendors. 6. That as part of MOU, M/s. Yathartha Construction had paid an amount of Rs. 12.42 crore to the vendors on 25/06/2010. 7. That on 09/09/2010, an agreement was signed between M/s. Yathartha Construction and the vendors (i.e. M/s. Aravali heights Infratech P. Ltd., Sh. Vikram Singh and M/s. SRP Builders Limited) wherein, M/s. Yathartha construction agreed to relinquish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been invested in such shares, later on sold to M/s. Samyak Projects Ltd. The income generated out of such share transfer is to be taxed under the head 'capital gain'. However, the assessee's claim that amount of Rs. 35,91,73,500/- is in the nature of advance is divorced from the facts and is not borne out from any material on record. The amount received from M/s. Samyak Projects Ltd. is on account extinguishment of his right over the property agreement of the assessee has entered into previously with the original owner of the land and the said amount is full and final payment. Since the assessee was never the owner of the land, hence, the entire amount he got in the deal as confirming party is required to be taxed in his hand. Therefore, Assessing Officer is justified in taxing the amount of Rs. 17,91,73,500/-. 10. Regarding addition of Rs. 2,84,88,000/- assessee stated that amount deposited in the bank account was only Rs. 1,67,84,000/- and not Rs. 2,84,88,000/- and the details of such deposits have not been made available. It was further submitted that assessee has withdrawn sum of Rs. 1,67,96,450/- from his bank account during the year and out of that amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een sent on the old address including the second notice u/s. 143(2). Hence, in absence of any valid service of notice, the assessment record is bad in law and in support he strongly relied upon judgment of Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon as reported in (2010), 321 ITR 362 (SC) and following other decisions:- "1. Delhi High Court in the case of Veena Devi karnani vs. ITO in WP(C) 7540/2018 order dated 14.09.2018. 2. Bengaluru High Court in the case of Nittur Vasanth Kumar Mahesh, order dated 11.04.2019 3. Bombay High Court in the case of Harjeet Surajprakash Girotra, order dated 16.07.2019. 4. Pune ITAT B Bench in the case of Anil Kisanlal Marda, order dated 01.07.2019." 13. On merits, he submitted that first of all, the material gathered by the ADIT Wing was never supplied by the assessee in the final show notice issued u/s. 144, and therefore, such material cannot be used against the assessee. He further submitted that though the show cause notice issued u/s. 144 was served upon the assessee on 02.03.2015 and assessment order has been passed shortly thereafter, that is, on 10.03.2015 without giving proper opportunity. Hence, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim is false but also mala fide. He further submitted that the notice u/s. 143(2) generated by the Department on the basis of the address of the assessee given in PAN data base and PAN data showed the same address. In support of his argument, he relied upon the following two judgments of the Hon'ble Jurisdictional High Court:- 1. In CIT Vs. Madhsy Films (P.) Ltd. (2008) 301 ITR 69 (Delhi), the Hon'ble Delhi High Court held that, where notice issued to assessee under section 143(2) had been dispatched by speed post at its address as per its return and same had not been received back, it could be presumed that it had reached assessee, particularly when no affidavit had been filed by assessee to effect that notice was not received by it. 2. CIT Vs. Yamu Industries Ltd. 306 ITR 309 (Delhi), where Hon'ble Delhi High Court held that where notice under section 143(2) sent by registered post at correct address of assessee had not been received back 'unserved' within period of thirty days of its issuance, there was a presumption under law that said notice had been duly served upon assessee within period of limitation." 15. On merits, he strongly relied upon the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter was never shown nor filed before him, which is clear from his finding given at page 8 of his order which reads as under: "The appellant has claimed that it has submitted a letter dated 05/07/2013 about the change of address. However, I have found that the appellant had filed its return of income for A.Y 2013-14 on 30/09/2013 giving the same address i.e. 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi-110025. Therefore the appellant's claim that it has changed its address from 152, 2nd Floor, Mohan Bhawan, Sarai Julena, Delhi-110025 is not tenable. Further, the appellant has also failed to produce any such letter that it has claimed to have filed before the A.O on 05/07/2013 informing him about the change of address. In view of the obvious contradiction in the appellant's claim, I find no merit in the argument of the appellant in not receiving the notices when it was served at the address given in the return of income for the year under consideration as also the same address as mentioned in the subsequent year's return. Appellant has himself admitted that it did receive show cause notice sent by the A.O on the same address before assessing the income under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and said notice has not returned back, then it is deemed to have been affected in time to the assessee. The Hon'ble Jurisdictional High Court in the case of CIT vs. Madhsy Films Pvt. Ltd. as reported in (2008) 301 ITR 69 (Del.), in the context of notices issued u/s. 143(2) held that, where notice has been issued to the assessee u/s. 143(2) and has been sent by the speed post on the given address as per the return of income and if the same has not been received back, then it is presumed that it has reached the assessee. Similar view has been taken in the case of CIT vs. Yamu Industries Ltd. as reported in (2008) 306 ITR 309 (Del). Accordingly, we hold that here in this case notice has not only been sent on the address mentioned in the return of income but also been duly served under the law within statutory time limit and accordingly the ground raised by the assessee is dismissed. 19. On merits of the addition, we find that here in this case during the investigation proceedings it was found that there was a piece of land measuring 8.395 acres in Sec-91, Gurgaon in the books of M/s. Aravali Heights Infratech P Ltd. and 6.017 acres in the books of M/s. SRP Builders Ltd. Both thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.-referred as first part or owner & Yathartha Construction-referred as confirming party & Samayak Projects Pvt. Ltd. kindly explains major highlights of this agreement. Ans. Before this, I would like to draw your attention to agreement dated 09.09.2010 between the above mentioned parties (copy submitted). As per clause 7 & 8 read with clause 2b of this agreement Samayak Projects Pvt. Ltd. was given the right to commence ground work on the land In question at the cost & expenses of/Samayak Projects Pvt. Lid. As far as I remember detail of payment schedule as per clause 2b of this agreement was made by 31.03.2011 (part of record will be submitted). It Is also reflected in the balance sheet of Samayak as on 31.03.2011. Q 7. As per clause 7 & 8 of agreement dated 9th Sep, 2010, you were given right to complete ground work on the land admeasuring, 14.412 Acres. Kindly explain in which shape the above land was given to you. Ans. The land given was plain/raw land having no excavation In any part of the land. No boundary wall was constructed except small cemented poles on periphery of the land for identification, it was also agreed as per clause no. 7 & 8 of agreement dated 09.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement dated 24.12.2012: Q. 7. Please explain whether payment for acquiring land right In respect of land measuring 14.41 acres situated at Sector-91 Gurgaon has been paid In full and final manner, If yes phase give the details with evidence? Ans. We have made full and final payment In lieu of the land rights acquired from the M/s. Aravali Heights infrastructure Pvt. Ltd. M/s. Yathartha Constructors a M/s. SRP Builders Pvt. Ltd. and Sh. Vikram Singh. The detail of payment have been duly mentioned in agreement doted 25.09.2012 and copy for the same is given to you. Q. 8 Please explain whether possession of the plot situated at 91, Gurgaon acquired from above sale' parties have been taken by you or your company. If yes Please furnish the evidence of same Including a possession letter? Ans. We have taken the possession of above said fond for carrying out ground work after making the payment of Rs. 40 crores in terms of agreement doted 9.9.2010 but could not taken the full and final possession till the 29,09.2011 because of the part payment. However, we have taken the full and final possession for all purpose on 29.09.2011 vide possession letter dated Nil and as per agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 25.08.2012. Thus the general Power of Attorney is stand valid in my favour. Q14. Please explain whether you have handed over the Physical Possession over the, land for development and constructor to M/s. Ansal Properties and Infrastructure Ltd. If yes, please furnish the evidence for the same? Ans. Yes, we have handed over the Physical Possession to them for development and construct of the land and they are carrying out development activities on the plot of land. So far, they have completed boundary wall around the plot of land and done some ground work. Q15 Please explain the nature and terms and conditions of agreement made with M/s. Amol Properties and Infrastructure Ltd. (API)? Ans. We are entered into MOU with API for the development and constructor of the payment for residential apartment in ore and revenue saving basis we have received approx. Rs. 95 crores. So far from API till today as per MOU from we will received 34.5% share in the revenue received from sale of the project if some portion of built-up area remain unsold turn same share of 34.5%of total remaining on sated are will remain with me. Q16. Please explain at what capacity in what shape you have rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and situated at Sector-91 Gurgaon after taking possession from them first time in the first week of Feb. 2011 after making payment of Rs. 40 crores as terms and condition of agreement dated 09.09.2010. Even they also did not ask and challenged the passion given to us in the first week of Feb. 2013. Q. 23 Please explain whether M/s. Aravali Heights Infrastructure Pvt. Ltd., and other persons mention above have incurred any expenditure and made any Improvement on the above said plot of land after entering into agreement first time with you on 9.9.2010 and after executing GPA in favour of you on 29.10.2011? if yes, please give the details of expenditure incurred or improvement made, if any. Ans. No the above mentioned parties namely M/s. Aravali Heights Infrastructure Pvt. Ltd. and other companies have incurred any expenses on the improvement and development on the above said plot after entering into agreement with us on 9.9.2010 and therefore. The terms and condition of all the four agreement made with them from time to time have not allowed them and no obligation to carry out any activities of development and improvement including construction thereon. I categorically clearly th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d between both the parties, Aravali Heights, SRS Builders Ltd. and M/s. Samyak Projects Ltd. as first and second party M/s. Yathartha Constructions was a confirming party on one side and M/s. Samyak Projects Ltd. on the other side wherein the onus in the confirming party had agreed to transfer the interest in land to M/s. Samyak Projects Ltd. to a total consideration of Rs. 81.88 crores. Thus, in the entire deal assessee gets an amount of Rs. 35,91,73,500 which definitely is an income of the assessee which has not been shown. Thus, the finding arrived by the Ld. CIT (A) cannot be tinkered and accordingly this issue is decided against the assessee and the grounds raised on this issue are dismissed. 22. Lastly, on the issue of Rs. 1,67,84,000/- on account of deposits in accounts of the assessee, neither any evidence has been filed before the authorities below in support of any cash withdrawal which has been claimed to have been re-deposited nor any proper supporting documents or the explanation about the source of deposit has been filed. In absence of any rebuttal or explanation, the amount of deposits of Rs. 1,67,84,000/- has rightly been taxed as unexplained. Ld. CIT (A) has obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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