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TMI Blog2024 (7) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... al filed by the Revenue is dismissed. - Shri G. S. Pannu, Vice President And Ms. Madhumita Roy, Judicial Member For the Appellant : Dr. Rakesh Gupta, Adv. And Shri Deepesh Garg, Adv. For the Respondent : Ms. Parul Singh, Sr. D.R. ORDER PER MS. MADHUMITA ROY JUDICIAL MEMBER : The instant appeal filed by the Revenue is directed against the order dated 30.06.2014 passed by the Ld. Commissioner of Income Tax (Appeals) XV, New Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred as to the Act ) arising out of the order dated 25.03.2013 passed by the ITO, Ward 12(2), New Delhi under Section 143(3) of the Act for Assessment Year 2010-11. 2. The brief fact leading to the case is this that the assessee is a developer in real estate project in the state of Orissa and Andhra Pradesh mainly in low cost group housing societies for sale. The assessee has been receiving cash advances from customers towards plots and land and low cost housing. During the year under consideration, the assessee received an amount of Rs. 7,09,87,186/- in cash and Rs. 89,55,697/- through cheques. The AO not having been convinced with the genuineness of the cash components comprising of small sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h projects also require environmental approval, if the project cost exceeded Rs. 50 crores. In addition, the appellant also filed before me the permission for construction accorded under Orissa Municipal Act 1950 by the Municipal Officer, Kendrapara and the issue of permission to lay out plan by Secretary, Kendrapara Regional Improvement Trust (KRIT), Kendrapara. Relevant project documents were also furnished. I find that the Ld. AO, in the impugned order, on the basis of the above documents, has endorsed that the appellant is developing a real estate project in the states of Orissa and Andhra Pradesh. Therefore, the genuineness of the project per se is in no doubt. 6.3 At present, the appellant is carrying out the following projects: (i) Office building at Kendraparahaving plot area of 3,661 square feet; (ii) Office building at Charichhaka having plot area of 8,323.80 square feet; (iii) Golden villa Phase-2, Duhuria, Kendrapara- Plot Area-175,111.20 square feet for 80 plots; (iv) Golden Plaza, Commercial Complex at Kasoti, Kendrapara-Plot area- 20,345.50 square feet; (v) Golden Villa Phase-I, Kajala, Kendrapara - the plot area is 2,62,013.40 square feet; (vi) Golden Central Plaza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. AO himself had carried out enquiry from 50 depositors, chosen on random basis, by issue of notice under Section 133(6). No adverse observation was made by the Ld. AO, except the fact that he was not convinced as to why majority of the deposit amounts were in cash, while in his view most of the villages have banking facilities these days. I find that in the affidavits submitted by these depositors, it has been mentioned that their source of income is agricultural income/cultivation, while those who had PAN number had given the same. The AO was, however not satisfied with the creditworthiness of such depositors. However, no further enquiries were conducted by the AO nor has the AO confronted the appellant about the results of these enquiries, which implies that the onus to the appellant could not be shifted, which was the requirement, if the AO was unsatisfied with the creditworthiness of such persons. Further, in response to the Ld. AO's note sheet entry dated 11.03.2013, as to why the advances may not be added to the income, the appellant, vide letter dated 22.03.2013, while furnishing detailed explanation, also furnished affidavits confirming source of income, address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositors, who had contributed more than Rs. 50,000 during the year, the appellant had furnished confirmation with necessary evidences. In support of this, since the bulk of the depositors are lowly paid agriculturists, no more conclusive evidence can be expected from them. Moreover, the Ld. AO has also not been able to gather any adverse evidence in the matter. Therefore, keeping in view the above facts, taking into account the totality of the facts, I find no reason to hold such deposits as unexplained. 6.8 The AO has however, observed that the appellant recognised these deposits as its revenue in subsequent year in accordance with AS 7 and AS 9. In respect of the above facts, the AO has to keenly monitor the F.Y. in which the appellant had cumulatively incurred 25% of the direct project cost and on ascertaining the same, should charge to revenue, the entire amount of deposits received till that point of time for taxation, as per AS 7. 6.9 In view of this, the addition made in this regard under Section 68 is not sustainable as based on the enquiry conducted by the AO and the information furnished by the appellant in respect of 130 depositors, no adverse view can be drawn of receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustained. 10. The ld. counsel for the assessee placed reliance on the decision of the Hon'ble High Court of Orissa at Cuttack in WP(C) No. 14492 of 2021 order dated 01.09.2023 in the case of GLP Developers Ltd IA No. 13957 of 2023. The ld. counsel for the assessee drew our attention to Para 6 of the said order where the Hon'ble High Court is giving direction for identifying the investors and to make payments accordingly to the investors/depositors. 11. The Ld. counsel for the assessee fairly submitted that as these documents and fate of the investigation being made by EOW and the CBI was not before the Assessing Officer, the issue may be restored to the file of the Assessing Officer for proper examination and determination. 12. Per contra, the ld. DR fairly conceded that the issue may be restored to the file of the Assessing Officer for fresh adjudication. 13. We have given thoughtful consideration to the rival submission and to the orders of the authorities below. We find that this is the second round of litigation before the ITAT. In the second round, as in the first round, the AO disbelieved the claim of assessee that the advances were received from various persons and h ..... 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