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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 ..... ccordingly the ground raised by the assessee is dismissed. Addition u/s 68 - As assessee got the money as confirming party and not on behalf of someone else or as some kind of advance. It fairly evident from the records that assessee has received the amount from M/s. Samyak Projects Pvt. Ltd. which is nothing but income of the assessee, because M/s. Aravali Heights Infratech P. Ltd. had entered into an agreement with M/s. Yathartha Constructions vide MOU where M/s. Samyak Projects Ltd. acquire the right to develop the said land along with purchase of share resulting in 100% control in both the companies. Onus in the confirming party had agreed to transfer the interest in land to M/s. Samyak Projects Ltd. to a total consideration of ₹ 81.88 crores. Thus, in the entire deal assessee gets an amount of ₹ 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. Deposits in accounts of the assessee neither any evidence has been filed before the authorities below in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in law and on facts in confirming addition of ₹ 17,91,73,500/- (instead of addition of ₹ 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 ₹ 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 ₹ 17,91,73,500/- is bad in law and against the facts and circumstances, being a case of double taxation where the impugned amount has already been taxed in the hands of the real vendors and the impugned money received by the assessee has already been offered to tax in A.Y. 2013-14 as sale consideration for sale of shares. 6. That having regard to facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in holding the amount of ₹ 35,91,73,500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 80.15 crores. iv. The above agreement was further modified on 29.09.2011 according to which all rights in the land were transferred by the entities to M/s. Samyak Project P. Ltd. for a consideration of ₹ 82.07 crores. v. Sh. Yathartha Vashishtha (Prop. M/s. Yathartha Constructions) was also reported to have received ₹ 35.91 crores from M/s. Samyak Project P. Ltd. against transfer of development, rights in favour of the latter. he amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 2,84,88,000/- was deposited in the account of Yathartha Construction in cash and further sum of ₹ 45 lac received from M/s. Aravali Heights Infratech Pvt. Ltd. as payment relating to falling u/s. 194C was not shown as a taxable income of the assessee. Accordingly, Assessing Officer added both amount and made addition of ₹ 3,29,88,000/-. Accordingly, the assessment was completed on an income of ₹ 21,42,21,440/-. 6. Before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 could have been detrimental to the interest of the buyer, viz., M/s. Samyak Projects Pvt. Ltd. He was made confirmatory party just to morally and legally bound the assessee for smooth execution of agreement. On the other hand, the assessee was to obtain the shares/control over these companies. The impugned project consisted of a great value in the company. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 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 his rights over the land property in favour of the vendors at a total of consideration of ₹ 80,15,40,000/-. As first installment of the payment, the vendors have paid an amount of ₹ 14 crore to M/s. Yathartha Construction on 3rd, 6th and 9th September, 2010. 8. That on 29th September, 2011, an agreement was signed between M/s. Aravali Heights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 17,91,73,500/-. 10. Regarding addition of ₹ 2,84,88,000/- assessee stated that amount deposited in the bank account was only ₹ 1,67,84,000/- and not ₹ 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 ₹ 1,67,96,450/- from his bank account during the year and out of that amount of ₹ 1,64,84,000/- has been deposited. The source of the said deposit was received by assessee for a sum of ₹ 1 crore from M/s. Samyak Projects Pvt. Ltd. in the immediately preceding year in cash which is included in ₹ 35.91 crore and assessee has also withdrawn ₹ 2.53 crore, and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported 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 is violation of principles of natural justice. On merits, he relied upon the submission and explanation given by the assessee before the Ld. CIT (A) which has been incorporated above. 14. Ld. CIT-DR, Mr. S.S. Rana on behalf of the Revenue rebutting the contention raised by the assessee submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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 order of the Ld. CIT (A) and submitted that the Investigation Wing has given a very categorical information and there was a statement on oath confirmed by Shri S.K. Jain Director of M/s. Samyak Projects Ltd. that he has given the said money to the assessee and the said money has not been disclosed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 section 144 of the Act. On facts and circumstances of the case, the appellant's grounds of appeal on these issues are dismissed. Not only that, even the assessment records which has been produced before us by the ld. CIT-DR, no such letter is there on record. The aforesaid finding of the ld. CIT (A), thus gets corroborated that there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 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. Sri Yathartha Vashishtha (Prop. M/s. Yathartha Constructions) obtained 100% control in both companies by purchasing shares of these two companies from existing share holders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 09.09.2010, that all works has to be done on the said land by Samayak Projects Pvt. Ltd. (referred as record party) after the payment made In clause 2b (it is on payment made up to 31.03.2011, as per record). Thus no work was done on said land of whatsoever nature by first party confirming part/recorded owner (as per agreement dated 09.09.2010). It Is also brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /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 ₹ 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 agreement dated 29.09.2011 after making the complete payment of ₹ 82.45 crores including PDC Cheques. Q.9 Please explain whether you have done any Improvement after taking full and final possession over the above said plot In term of leveling of land, Boundary wall and any other development/construct what so ever, if yes, please give the details of the total Investment made ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. ₹ 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 received ₹ 95 Crores from API? Ans. I have received of ₹ 95 Crores out of 34.5% out of my share from API as advance and security. Q17. Please explain whether any court proceedings are Undergoing with Director of the company Mr. Vashisht? Ans. Yes Mr. S.K. Vasisht has filed criminal case against me at Noida for robbery of ₹ 9000/- and snatching of ATM card as per FIR. The paper boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention 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 that whether, improvement on ground work and construction of boundary wall have been made over the above said plot land only by M/s. Ansal properties infrastructure Ltd. Ltd. (AP-i) after entering into MOU with them. Q. 24 Please explain whether agreements entered with M/s. Aravali Heights Infrastructure Pvt. Ltd. and other persons and possession letter issued in favour of you and GPA executed in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores. Thus, in the entire deal assessee gets an amount of ₹ 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 ₹ 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 ₹ 1,67,84,000/- has rightly been taxed as unexplained. Ld. CIT (A) has observed that the assessee has not been able to provide any evidence in support of his claims and merely giving a generalized statement that the cash deposits are from the cash withdrawal made earlier is not sufficient evidence. The assessee has not been able to correlate the cash withdrawn and subsequent deposits. In absence of any cogent reason and evidence, the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
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