TMI Blog2012 (7) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit in the hands of the appellant contractor company – additions deleted - ITA Nos.2614 to 2617/Del/2011, ITA Nos.2722 to 2725/Del/2011 - - - Dated:- 10-2-2012 - I P Bansal, K G Bansal, JJ. For Appellant: Shri T R Talwar, Adv. For Respondent: Mrs Geetmala Mohanany, CIT, DR ORDER Per: Bench: All these appeals are filed by the revenue. The issue raised in ITA Nos.2614 to 2617/Del/2011 and ITA Nos.2722 to 2725/Del/2011 are identical. The issue raised in ITA Nos.2382 to 2387/Del/2011 is consequential to the decision taken in other appeals. All these appeals were argued together by both the parties, hence, for the sake of convenience all of them are decided by this common order. Grounds of appeal in ITA Nos.2614 to 2617/Del/2011 and ITA Nos.2722 to 2725/Del/2011 are identical except difference of figures. The grounds of appeal in ITA No.2614/Del/2011 read as under:- On the facts and in the circumstances of the case, the ld. CIT (A) has erred in deleting addition of Rs.1,21,73,148/- made by the A.O. on account of unexplained investment in construction of Mall. 2 (a) the order of the CIT (A) is erroneous and not tenable in law and on facts. (b) The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,53,05,051/- 3. 2006-607 923281818/- 951137895/- 2,78,56,077/- 4. 2007-08 797352285/- 811790665/- 1,44,38,380/- Total: 287,13,10,409/- 294,10,83,065/- 6,97,72,656/- 2.1. The difference amount was added to the income of the assessee in the respective years. ITA Nos.2722 to 2725/Del/2011 3. The other facts relating to this case are similar except difference in figures. The cost of construction made by this assessee was value at Rs. 467,30,50,071/- against the cost of construction shown by the assessee in its return at Rs. 450,58,20,428/-. The position is as worked out in the following chart:- S.No. Period of construction Cost of construction as per the return (Rs.) Cost of construction as estimated by Distt. Valuation Officer (Rs.) Difference (Rs.) 1. 2004-05 494600000/- 512956653/- 1,83,56,653/- 2. 2005-06 797345555/- 826938348/- 2,95,92,793/- 3. 2006-607 1674764870/- 1736922325/- 6,21,57,745/- 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments on account of construction were not completely recorded in the books of account and this presumption was not found correct when the assessee had explained the expenses and those were verified by the Assessing Officer with the supporting evidence vis-a-vis the books of account. The Assessing Officer also did not reject the books of account u/s 145(3) by pointing out any defect. Learned CIT (A) also held that even if the report of the DVO is considered to be validly obtained, then also, the difference in the cost of construction shown by the assessee and estimated by DVO was meager which is fairly marginal and is in the acceptable error margin range. The report of the DVO is only an estimation and the variation is bound to be there for various reasons/factors. Thus, taking into accounts all these factors he has deleted the amount added to the income of the assessee. The revenue is aggrieved with such deletion in all these cases and has filed the aforementioned appeals. 6. At the outset, it was pointed out by the learned AR that in group cases of M/s Ambience Developers and Infrastructure Pvt. Ltd. similar additions were made in respect of assessment years 2003-04 to 2007- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncomplete, incorrect or method of accounting is not regularly followed. In this case, assessee has given a proper explanation about seized documents before AO, then before the CIT(A) which is forwarded to AO in remand proceedings. In the absence of any specific order of AO u/s 145(3), we are unable to accept learned DR s arguments that the books have been impliedly rejected. Therefore, the CIT(A) s finding on this aspect is upheld. (B) Whether assessee did not explain alleged incriminating seized documents? 16. From the facts, it emerges that during the course of search, some alleged incriminating documents from group entities was found during the course of search. Assessee agreed to declaration of Rs.40 crores in group entities which has been implemented by paying taxes and of group entities. There is no dispute on this issue. From the assessee s paper book page 4 onwards, vide letter dated 23.9.2009, assessee has offered an explanation annexure-wise on the seized documents alongwith copies of the supporting accounts and documents. In our view, the assessee has discharged its onus by furnishing the explanation. In the assessment order, AO has nowhere controverted any of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year. 18. Section 69 is not applicable in the case of the assessee as it pertains to investments which are not recorded in the books of accounts. Section 69B deals with a situation where AO finds that amount of investment exceeds the amount recorded in this behalf in the books of account and assessee does not offer satisfactory explanation. In such case, the excess investment may be deemed to be income of the assessee. This Section can be attracted when the AO asks the assessee an explanation about inadequate investment. As already explained, in this case, neither AO put up a question about inadequate cost of construction in the books of account nor assessee s explanation offered in respect of seized documents is adverted to by the AO which is placed on paper book page 4 onwards. Thus, Section 69B was not properly applied by the AO in these facts. There being no defect in the books of account nor any finding about inadequate cost of construction based on any cogent material and overlooking of assessee s explanation about seized documents, there was no justification for the AO to make a proposal under Section 142A in view of Hon'ble Supreme Court judgment in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference is to be looked from percentage point of view. In our view, a shaky difference of 3.86% on a DVO summary valuation as mentioned above is to be ignored. 21. In view of the foregoing reasons and circumstances, we see no infirmity in the orders of CIT(A) deleting the additions in all these years. The orders of CIT(A) are, therefore, upheld and the appeals filed by the Revenue are dismissed. 22. In the result, appeals filed by the Revenue are dismissed. Decision pronounced in the open Court on 5th August, 2011. 9. It has been pointed out by the learned AR that the facts and circumstances of these appeals are pari materia with the facts of aforementioned case of M/s Ambience Developers and Infrastructure Pvt. Ltd. and the learned DR could not controvert this fact, therefore, respectfully following the aforementioned decision of coordinate Bench, we found no merit in these departmental appeals and thus are dismissed. ITA Nos.2382 to 2387/Del/2011 10. Grounds of appeal in ITA Nos.2382 to 2387/Del/2011 are identical except difference of figures. The grounds of appeal in ITA No.2382/Del/2011 read as under:- On the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j, New Delhi. Rs.1,53,05,051/- Rs.8,63,74,922/- Addition @ GP of 9.06% Rs.78,25,567/- Assessment Year 2007-08 1. Addition made on account of unexplained investment in the construction for this Assessment Year in the cases of i) Ambience Mall at Gurgaon Rs.4,68,24,043/- ii) Five Star Hotel Service Apptts. Project at Gurgaon Rs.6,21,57,745/- iii) Ambience Mall at Vasant Kunj, New Delhi. Rs.2,78,56,077/- Rs.13,68,37,865/- Addition @ GP of 10.84% Rs.1,48,33,224/- Assessment Year 2008-09 1. Addition made on account of unexplained investment in the construction for this Assessment Year in the cases of i) Ambience Mall at Gurgaon Rs.3,82,40,303/- ii) Five Star Hotel Service Apptts. Project at Gurgaon Rs.5,71,22,742/- iii) Ambience Mall at Vasant Kunj, New Delhi. Rs.1,44,38,380/- Rs.10,98,01,425/- Addition @ GP of 18.33% Rs.2, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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