TMI Blog2022 (4) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... amount, and consequently the profit would go down or the project would end up in loss and that the effect of addition made in the hands of the assessees firm as made in the assessment order would get neutralized/nullified over the period of the project. On this count also the addition made is not correct. During the search action under section 132 on 7.1.2014 in Bafna Panchal group of cases which covered the residential premises of Smt. Nitaben Patel, there is no record to show any incriminating materials relating to the purchase of this land was seized by the Revenue/Income Tax Department. Therefore, the addition made u/s. 69 of ₹ 10.10 is not sustainable in law and we are in conformity with the orders passed by the Ld. CIT(A) on this issue.- Decided against revenue. - ITA No. 2386/Ahd/2018 and Cross Objection No. 67/Ahd/2020 - - - Dated:- 16-3-2022 - S/SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER For the Appellant : Vijaykuamr Jaiswal, CIT-DR For the Respondents : Milin Mehta, AR ORDER Per T. R. Senthil Kumar, Judicial Member This appeal is filed by the Revenue against order dated 6.9.2018 in appeal No. CIT(A)-12/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sale deed furnished during the course of assessment proceedings, non-agricultural open land for the project i.e. Block No. 404, Old R.S. No. 510 511, Khata No. 83, Moje Bhayali, Vadodara admeasuring 8083 sq.mts. (8083 * 10.7639 = 87005 sq.ft. approx.) was shown to be purchased by Smt. Nitaben M. Patel, partner of the firm as her capital. It is further seen from page No. 20 of the Ld. CIT(A)'s appellate order that Smt. Nitaben purchased the above property by making payment through cheque starting from 28.7.2009 to 7.2.2011 by instalment during the financial year 2009-10 and 2010-11. However, as per the AO ₹ 10.10 crores ₹ 12.60 crores minus ₹ 2.5 cores) was clearly unexplained investment/expenditure in the form of purchase of land for the previous year relevant to the assessment year 2013-14. It is, for this reason, the AO reopened the assessment of the assessee-firm by issuance of notice under section 148 on 31.1.2017. In compliance thereof, the assessee replied that the original return filed under section 139(1) of the Act be treated as return filed in response to the notice under section 148 of the Act. After considering submissions and material on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be ignored that neither during the survey nor during the search, any evidence in regard to any undisclosed investment over and above purchased consideration of land as mentioned in the sale deed and over and above the capital share of the Partner as mentioned in the books of accounts have been found. Moreover, the firm having being constituted on 3/2/2011 and with no business and no receipt of any booking for the project, cannot have the fund at its disposal to have the amount to the tune of ₹ 10.10 crore to pay to Smt. Neetaben Patel. Therefore, this particular hypothesis does not hold water and stand the probability. 6.2 Without entering into the debate on the relied upon impounded page No. 10 of Annexure A/3 as to whether it is a dumb document, whether the scribbling there in are rough or whether the statement of Shri Jiten Oza u/s. 133A along with the said page could be relied upon or not for the impugned addition, I am of the view that there is apparently no wrong if for the purpose of estimation of project cost and to determine the rate at which the constructed property may be sold, a notional value of land which may be based on the market value of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Ld. DR, Mr. Vijaykumar Jaiswal for the Revenue contended that the CIT(A) has erred in deleting the addition of ₹ 10.10 crores without fully appreciating the addition based on the incriminating material found during the course of survey proceedings under section 133A of the Act. The Ld. DR further submitted that the CIT(A) has upheld reopening of the assessment under section 147 relying upon piece of loose sheet found during the course of survey proceedings, and therefore, the Ld. CIT(A) ought not have deleted the addition of ₹ 10.10 crores made by the AO. He therefore submitted that order passed by the AO is to be restored. 7. Per contra, the Ld. counsel for the assessee, Mr. Milin Mehta reiterated submissions made before the lower authorities. For the brevity, we reproduce the same as follows: (a) the statement made by Shri Jiten Oza is vague and such vague statement cannot be made a basis for making an addition in the case of the appellant, (b) the impounded page relied upon by the Department is a rough page and has lot many scribbling including irrelevant pictures and has nothing to do with actual investments, (c) the statement recorded duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oject Monalisa Lakewood . Statement was not rebutted by him at any point of time during the assessment proceedings also. Therefore, the addition made by the AO under section 69A of ₹ 10.10 crores is to be sustained. 10. We given ought thoughtful consideration and gone through the material available on record and the paper book filed by the assessee. It could be seen from the loose sheet that the land cost was ₹ 12.60 crores while the land cost reflected in the sale deed was ₹ 2.5 crores. The contention of the same cannot be accepted on two grounds; (a) the original cost of land purchased by Smt. Nitaben Patel for a consideration of ₹ 2.5 crores starting from 28.7.2009 upto 7.2.2011 by instalment payments during the financial year 2009-10 and 2010-11 and also introduced capital contribution ₹ 2,61,07,304/- by Smt. Nitaben to the firm on 31.3.2012. Thus, the land cost could not be estimated at ₹ 12.60 cores; (b) other entries in the loose sheet papers related to the cost of construction of nine bungalows, development expenses, over-head expenses etc. which are clearly matched with the expenses maintained by the assessee-firm in its books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the SLP. There need not be any debate with the proposition of law as laid down in the decision of the Rajasthan High Court, but a close look at the decision of the Rajasthan High Court would indicate that the confessional statement was not the only piece of evidence. There was no material to corroborate the statement made by the assessee in the form of confession. In the case on hand, as noted above, there is no material except the confessional statement of the assessee recorded under section 108 of the Customs Act. 12. In view of the concurrent findings recorded by both, the CIT(A) as well as the Appellate Tribunal, we are of the view that we should not disturb the finding of facts. None of the questions as proposed by the Revenue could be termed as substantial question of law. 12. In the present case on hand, the AO has not made any further enquiry with any other parties and made the addition based only on the loose sheet of paper found during course of survey action. The AO has made addition of ₹ 10.10 crores as unexplained investment which is not sustainable in law. Further, it can be seen from the loose sheet that working made are stated to be estimation only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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