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TMI Blog2024 (7) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... all the aforesaid matter are taken up for adjudication under this common order. 3. At the outset, Ld. Authorized Representative, Shri Mayank Patawari of the assessee (in short "Ld. AR"), has made a request seeking permission for not pressing the grounds of cross objection and additional grounds raised therein. To this effect, written applications have been submitted by the Ld. AR for our consideration, which are extracted as under: 4. Apropos, aforesaid requests of the assessee refraining themselves from pressing of grounds of cross objection and additional ground thereto, when confronted to Ld. CIT DR, he did not raise any objection. Considering the request of the assessee and no resistance by the department, the permission was granted as requested. Accordingly, the grounds of cross objection and additional ground thereto are dismissed as not pressed. Resultantly, CO Nos. 5, 6 & 7/RPR/2023 filed by the aforesaid assessee's, are dismissed as not pressed. 5. Adverting to the adjudication of appeals of the revenue, which are observed to be assailed for common, identical and interconnected controversies involved, therefore, to deliberate upon such analogous issues, we are taking th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated that out of total amount of Rs. 60 crores, sum of Rs. 33 crores had been paid by M/s RK Associates & Hoteliers Pvt Ltd (In short M/S RKAAHPL), Rs. 7 crores had been paid by the appellant (M/s BFP) and Rs. 20 crores by himself. He further explained that the appellant was having cash in hand balance of Rs. 8.72 crores as on date of search 10.10.2019 without deducting payments of Rs. 7 crores made to SBIL during the month of August and September, 2019. Likewise, M/s RKAAHPL have cash in hand balance of Rs. 35.01 as on 10.10.2019 without deducting payments of Rs. 33 crores made to SBIL during the month of August and September, 2019. Further, he claimed that he is managing partner in the appellant firm and the remaining amount of Rs. 20 crores paid to SBIL by him as he is a person of high networth and regular filer of return of income. Total income of Rs. 12 crores has been shown in the return of income filed for A.Y. and as a person of resources and in order to meet the obligation, he made cash payment of Rs. 20 crore to M/s .SBIL. He further submitted that after reconciliation of records, he would be able to tell about the exact nature and source of the cash investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 526 (Delhi) claiming that no incriminating material was found during the course of search suggesting suppression of sales and in absence of incriminating material, addition cannot be made. 2.5 The AO after considering entire facts and submission of the appellant, did not find the same acceptable for the following reasons (para 10 of the assessment order):- "10. Conclusion The submission made by the assessee cannot be accepted on the following grounds: - (1) As per tally data of the group companies which was seized during the course of search proceedings at the office premises of RK Associates Group shows that the cash balance as on 10.10.2019 in the two group entities as under: Brandavan Food Products Rs. 7,79,31,476/- RK Associates and Hoteliers Pvt Ltd Rs. 30,88,71,831/- In the tally data the amount of cash balance is shown as above. In the tally data or in the books of accounts the payments of Rs. 60 crore has not been entered. That the payment of Rs. 60 crore was not entered in the books of accounts and also the availability of the cash balance of Rs. 30.88 crore signifies that there was no payment made from the regular books of accounts and the amount paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration for the proposed transaction has been shown at Rs. 198.25 crores (exclusive of taxes). Please explain? Ans. Sir, Rs. 198.25 crores was the consideration quoted by SBTIL for a fully completed hotel project, however, since the buyer RK Associates group had doubts about the capability of SBTIL for a complete hotel project and RK Associates group agreed to SBTIL construction the project for Rs. 140 crores and the agreed deal was thus for Rs. 140 crores. It was decided the entire interiors will be done by RK Associates group after bringing in a suitable brand. Because of this only the sale deed was forecasted to be registered today and cash amount of Rs. 60 crores was paid upfront by RK Associates group. These transactions have been recorded by me in the page no 17 shown by you. I have been made aware of entire negotiation and the transaction and I am also aware of the amount and mode of payment of the agreed consideration, an amount of Rs. 60 crores was agreed to be paid in cash and has been paid by RK Associates group in cash. I came to know about the cash transaction telephonically by both parties. However I am not aware as to how the payment was actually made. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s registered for an amount of Rs. 50 crore. If the amount of Rs. 60 crore was paid out of regular books of accounts the same would have been included in the sale consideration. The fact that the sale consideration was Kept at Rs. 50 crore in the sale deed clearly shows the intention of both the buyer and seller to keep the amount of on money of Rs. 60 crores out of the books. (4) Shri Rahul Agrawal stated during statement that he directed to suppress the sales & the cash so generated has to be kept aside, later he retracted from statement with the explanation that he misunderstood the meaning of these terms. In fact, he stated that it was surplus cash and not the suppressed sales. Ans: Sir, I have approximately 400 Crores turnover combined in bath M/s Brandavan Food Products and RK Associates and Hoteliers Pvt Ltd. Out of the total turnover approximately 50 to 55% of my receipts are in cash and the remaining is through banking channels. I operate restaurants of approximately 20 units in the name of Comesum in main stations like Nizamuddin, Agra, Mathurs Gwalior Jhansi etc. The receipts from these restaurants and through catering in super-fast trains are mainly in cash. The cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual case the cash consideration would have been included in the sale dead because that would have also increased the book value of the resort project which hitherto remains at Rs. 50 Crores only. (5) The assessee relied upon the judicial pronouncement of Delhi High Court in the case of CIT vs. Kabul Chawla ITA No. 707, 709 & 713 of 2014. The decisions of honorable court as mentioned in the submission of the assessee are distinguishable as the facts in those cases. are completely different from the case of the assessee. In the case of the assessee there are incriminating documents seized during the course of search which shows that the amount of Rs .60 crore was paid in cash out of unaccounted business income. That the amount of Rs. 60 crore was paid in cash was also confirm by the statement of Shri Saurabh Gupta. Further the tally data seized during the course of search shows that the payment made in cash has not been entered in the books of accounts till the date of search, although the payment of Rs .60 crore was made in cash in the month of September itself. (6) The tally data of the group companies was seized during the course of search proceedings at the office premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is an afterthought arrangement to avoid the tax. Considering all the facts, the amount of Rs. 60 crore shall be treated as unaccounted business income in the hands of M/s R K Associate & Hotliers Private Limited, M/s Brandavan Food Products and Shri Rahul Agrawal in the same ratio as submitted by the assessee. Accordingly, an amount of Rs. 7,00,00,000/- shall be treated as unaccounted business income of the assessee for A. Y. 2020-21 and charged to tax accordingly. 7. Aggrieved by aforesaid order of Ld. AO making addition on account of unaccounted business income, the assessee preferred an appeal before the Ld. CIT(A), wherein various issues raised were discussed at length. The legal contentions raised by the assessee before the first appellate authority, objecting to the validity of assessment order passed u/s 143(3) has been deliberated upon by the Ld CIT(A), while deciding on the following grounds of appeal: 3.1 Ground No. 1, 3, 3.1 to 3.2: - Through these grounds of appeal, the appellant has challenged validity of assessment order passed u/s 143(3) on the following grounds: - (i) The order passed u/s 143(3) being bad in law and as well as on the facts, deserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of natural justice have also been followed by the AO. There is no dispute that the notice u/s. 143(2) of the Act was issued beyond time limit prescribed in the Act and order u/s.143(3) was barred by limitation. In such circumstances, the order u/s 143(3) of the Act cannot be held as bad in law. Accordingly, the contentions of the appellant are rejected. b. Regarding contention that no reasonable opportunity of being heard was provided and order was passed without issuing show cause notice, the appellant has submitted that the AO had sought explanation regarding source of payment of Rs. 7 crores which was duly explained with the support of documentary evidences submitted vide submission dated 26.08.2021. However, the AO did not ask for further explanation rejecting the contents of the submission and passed order on 29.09.2021, after the lapse of more than one month from the date of last submission without issuing a show cause notice for not accepting the submission of the appellant. The action of the AO was against the instruction of CBDT and various judicial pronouncements. The appellant has placed reliance upon CBDT's instruction no 20/2015 dated 29.12.2015 and on sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 crores in the hands of appellant. The appellant has further submitted that statement was recorded under the strenuous conditions wherein Shri Rahul Agrawal stated 'suppression of sales' instead of 'surplus of sales'. Further, no evidence during search and seizure proceedings was found which could support the suppression of sales by the appellant. Accordingly, the appellant submitted that statement recorded without any supporting concrete evidence cannot termed to be incriminating material in view of various judicial pronouncements. The appellant has placed reliance upon various judgments such as Anand Kumar Jain (2021) SCC Online (Del) 3174, Harjeev Aggarwal ITA No 8/2004 (Del HC), Best Infrastructure Pvt Ltd 397 ITR 182 (Del HC) and Mantri Share Brokers ITA No 502/2011 (Raj HC). The appellant has further submitted that statement recorded u/s 132(4) cannot be the sole basis for making addition to the total income. For this, the appellant has placed reliance upon various decisions such as Kailashben Manharlal Choksi (2010) 328 ITR 411 (Guj), Anand Kumar Jain (2021) SCC Online (Del) 3174, Narendra Garg and Ashok Garg ITA No 1531 to 1532/2007 (Guj), , Dilbag Rai Aror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the appellant submitted that statement of Shri Rahu Agrawal is not based upon any evidence found during the course of search and seizure proceedings and therefore, the statement cannot be categorized as incriminating material. Accordingly, this cannot be sole basis for the purpose of making addition. I have found that search and seizure operation was conducted in the cases of two business groups viz. M/s Sir Biotech India Ltd (SBIL) represented by Shri Jai Prakash Agrawal and RKA Group represented by Shri Rahul Agrawal on 10.10.2019. During the course of search and seizure proceedings, at room no 412 of Hotel Fortune Miramar, Goa, occupied by Shri Sourabh Gupta, certain records were found maintained in laptop in form of excel sheet titled 'payment' in the folder 'Wydham, Goa' wherein, following details relating to purchase of under -construction hotel by group from SBIL group were found: Date Occasion Towards Value Instrument 18- July TS signing Part payment of sale deed value 3 DD 27-Aug Advance 1 20-Sep In Delhi 60 07-Oct Interbank transfer 43 10-Oct Sale deed Sale of land + building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disproving subsequent correction made in the said statement. However, Shri Rahul Agrawal has subsequently explained the source of cash payment of Rs. 60 crores, which includes the amount of cash payment of Rs. 7 crores made by the appellant, by placing cogent evidences with support of books of account completed after the search on the basis of valid piece of evidences, giving valid reasons for incompleteness of books of account. But the AO has not found same convincing for which no cogent reason has been given. On other hand the appellant by placing various evidences successfully proved that the cash payments were made out of surplus cash generated from sales and not from suppression of sales as stated by Shri Rahul Agrawal during statement proceedings u/s 132(4). It has been held by Hon'ble Supreme Court and other courts that it is open to the assessee so that the admission made in the statement was not correct. The decision of Hon'ble Supreme Court in the case of Pullangode Rubber Produce Company Limited 91 ITR 18 (SC), Nagubai Amal vs B Sharma Rat) AIR 1956 (SC) 593 and Awad Kishore Dass AIR 1979 (SC) 861 are squarely applicable to the case of the appellant. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of Rs. 7 crores was made out of unaccounted business income of the appellant. Though the AO has not rejected the books of account of the appellant u/s 145(3) but the above defect has been pointed out pointing out abovewhich caused the addition to the total income. While defect, the AO has placed reliance upon the statement of Shri Rahul Agrawal taken u/s 132(4) wherein, he had explained the modus operandi of suppression of sales of the appellant and explained the source of cash payment of Rs. 60 crores to SBIL out of suppressed sales. Since, no entry was passed in respect of cash payment to SBIL, the AO did not accept the contentions of the appellant that the cash lance in the books payment was made out of cash balance in the books of account of the appellant While rejecting the explanation offered by the appellant for the reasons mentioned in the assessment order, the AO has not accepted the retraction from the statement by Shri Rahul Agrawal, MOU presented subsequent to search and completed books of account. On consideration of submission made before me as well as before the AO, it has been found that during search and seizure proceedings, Shri Rahul Agrawal stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Further, before the Ld. CIT(A), the assessee has raised certain grounds, seeking adjudication of the same on merits, which are culled out as under: 2. That on the facts and the circumstances of the case and in law, the learned Assessing Officer (hereinafter referred to as 'the ld. AO") has erred in making an addition of Rs. 7,00,00,000/- (Rupees Seven Crores) to the income of the appellant by alleging the same as unaccounted business income for AY 2020-21. 2.1 That the ld. AO has grossly erred in making the addition of Rs. 7,00,00,000/- by alleging it as unaccounted business income by ignoring the fact that the same was already forming part of the sale proceeds as per regular books of accounts, GST returns and the audited financial statements of the appellant. 3.3. That the Ld. AO has erred in objectively rejecting the submissions of the appellant without going into the merits of the detailed explanations, evidences and judicial pronouncements placed on record by the appellant. 10. While deliberating upon the aforesaid grounds on merit, considering the submissions of the assessee a/w the material available, Ld. CIT(A) had observed that the contentions raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not available in the books of account of both the concerns. Thus, it has been concluded by the AO that no payment was made from the regular books of account. Subsequently, the appellant stated that the cash paid to SBIL was out of cash balance reflected in the books of account which was treated as an afterthought by the AO. (v) After perusal of transaction recorded in the laptop, Shri Saurabh Gupta also confirmed the payment of Rs. 60 crores in cash. (vi) The resort property was purchased for Rs. 50 crores which is evident from the sale deed executed after the search. Therefore, there was no intention to record the cash payment in the books of account by both the parties i.e. seller and purchaser. (vii) Shri Rahul Agrawal retracted from his statement given on the date of search stating that he mis-understood the meaning of suppressed sales and the cash paid was actually made out of surplus cash. The AO treated this retraction as an afterthought. (viii) MOU entered into between M/s Pacifica and the appellant, BFP and SCPL was not disclosed during search or post search proceedings. Therefore, this MOU was an afterthought arrangement to avoid the tax liability. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. It has been submitted that the major movement of cash balance is reported by the top management to the account department and thereafter entries are being made in tally data. Since, this was a high value transaction, the top management, for maintaining secrecy, may not have wanted to disclose the nature of payment and other details to the staff of account department. Since, registry of property was pending as on the date of search, the cash available in the books was utilized for making payment which may not have been sent to account department. In these circumstances, payments made in cash as investment in the Goa resort project, as per MOU could not be entered in the books of account. Further, cash balance as per the seized books of account was not found during the course of search and seizure proceedings which also establishes that the cash as per the incomplete books had already been utilized for making payments to SBIL. In support of this contention the appellant has also submitted copy of cash inventory prepared at the time of search and seizure proceedings as per which cash of Rs. 20,55,220/- was found from the office premises and Rs. 79,45,600/- was found at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant has submitted that the entities who had paid cash to SBIL entered into a MOU to invest their money on revenue sharing basis. The MOU is a written document and it contains all the elements of a valid contract. This MOU has been signed by the competent persons and has also been notarized. There are no explicit or implied provisions under the Act either in Indian Contract Act or Income Tax Act which state that only registered agreement / contract are inforceable or valid. The authenticity of the MOU cannot be suspected on the basis of non-registration. Further, on the basis of this MOU necessary entries in the books of account have also been made by the three parties who made the cash payment in the business interest. The appellant submitted that numerous courts have pronounced that business decisions may not be questioned by the AO on the basis of prudence or otherwise. The appellant has placed reliance upon decision of Hon'ble ITAT in the case of DCIT vs Deloite Haskns and Sales in ITA No 2970/Asd/2017, Hon'ble Delhi ITAT in the case of Neho Construction Ltd ITA No 3063/Del/2011. The decisions in the business interest have been taken by the appellant and MOU in this re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us reasons such as time lag between cash received and actual reporting and making entries into tally software, the software was under up- gradation and various data was under recovery, for the sake of secrecy top management had not intimated the high value of cash investment with SBIL to the account staff etc. I find that the various entries including sales/deposits in the bank account/cash investment with SBIL were not made in the books of account till the date of search and seizure proceedings. After search and seizure proceedings the appellant completed entries and presented before the AO for examination. The appellant has made entries in the books of account on the basis of bills/vouchers/statements of branches the appellant lawfully completed the books of account wherein, total cash payment of Rs. 7,00,00,000/- to SBIL has also been recorded on the following dates:- S. No. Date Amount 1 12.08.2019 10000000 2 31.08.2019 10000000 3 16.09.2019 10000000 4 21.09.2019 4000000 5 30.09.2019 36000000 Total 70000000 During the appellate proceedings, I have analysed the pending entries in the books of account and found that sales receipts including cash and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc were executed before the date of search but entries in the books of account could not be made due to various reasons as narrated earlier. The sales of the appellant are also matching with the GST returns which were filed prior to search and seizure proceedings. The appellant has also submitted evidences regarding pending entries like bank statements evidencing bank deposits and payment made, GST returns evidencing sales made to IRCTC and retail customers in trains/restaurants. Therefore, the appellant has validly updated its books of accounts which should have been taken into consideration by the AO. I find substance in the submission of the appellant that cash payments made to SBIL were not recorded in the books of account and these books of account at the time of search were incomplete for the genuine and practical reasons. Following data reveals that sales shown in GST returns and sales recorded in completed books of accounts are matching with insignificant variation in the month of August and September, 2019:- Month Sales as per seized books of account Sales as per audited books of account Difference (2- 3) Sales as per GST Difference in audited books of account and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in total sales and therefore, sales shown in the books of account for the year under consideration cannot be doubted. In view of the above factual finding, the appellant had every right to update its books of account by making pending entries including payments to SBIL and therefore, the completed and audited books of account should have been considered by the AO during the assessment proceedings. (ii) During the course of statement proceedings u/s 132(4) Shri Rahul Agrawal had admitted that payment of Rs. 60 crores was made in cash and it was out of the suppressed sale of the appellant and M/S. RKAAHPL. However, later on he retracted partly from his initial statement and submitted before the investigation wing as well as the AO that the said cash payment as made out of surplus cash available in the books of accounts of the group concerns namely M/s. BFP, M/s. RKAAHPL and M/s SCPL and not out of suppressed sales. As discussed in earlier part of the order that no material evidencing suppression of sales has been found in the case of appellant or any other group concern which supports the contentions of the appellant that the payments were made out of surplus sales, not from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that M/S Pacifica and three group entities including appellant entered into MOU to invest in acquiring the Goa hotel project on the basis of sharing of revenue after it became operation. As per the MOU, the investment made by the appellant in cash has been recorded as business investment in its books of account. It was an arrangement between the group entities to share revenue so generated after the hotel project became operational. The MOU was entered into much before the search and seizure proceedings. The AO has rejected the MOU on the ground that it was not presented during the search and seizure proceedings and it is also not a registered document. I find that the AO has not brought any evidence on record to prove that the said MOU was not in existence at the time of search. Veracity of the MOU has not been examined by the AO. Without any concrete material, the contents of the MOU cannot be rejected. Further, Hon'ble Bombay High Court in the case of Rakesh Ramani (supra) has held that the evidences filed by the assessee cannot be ignored on the ground that supportive evidence must be produced only at the time of search and seizure proceedings and not during the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted books of account and other evidences for examination. The AO mainly relying upon the statements of various persons as named above and incomplete books of account seized during search and seizure proceeding, wherein, payment entries relating to Rs 60 crores were not found, treated the amount of Rs. 7 crores as unaccounted business income of the appellant. As discussed in earlier paras retraction from the statement dated 10.10.2019 by Shri Rahul Agrawal is based upon supporting evidences, therefore, retraction is found admissible as held in various judicial pronouncements. Subsequent to search and seizure proceedings, the appellant established that the books of account of the appellant were not complete as on the date of search. Various entries in the books of account remained to be recorded for genuine reasons. The appellant during appellate proceedings as well as assessment proceedings submitted copy of cash book, wherein, cash payments to SBIL has been shown on various dates. The cash payments have been made out of available cash balance on the respective dates. Cash book of the appellant clearly shows that the cash had been generated to through their regular business ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed to complete its books of accounts upto the date of search. In this regard reliance is placed on the decision of the ITAT Ahmedabad Bench reported in 107 Taxman 85 in the case of V.M Thakkar Vs. ACIT wherein it has been held that "It is incumbent upon Authorised officer during search or during assessment to allow the assessee to complete his books till date of search". ....... 15. From the record, we also found that one major fact was ignored by the AO as well as by Id. CIT(A) that the sale of Rs. 33,57,039/- was duly recorded in the books of accounts and after inclusion of the same in total sales, cash balance, profits and stocks were derived which were accepted by both the authorities without any doubts. Thus, further addition by alleging the same as excess cash tantamount to taxation of an income twice. One in the shape of sales and profits embedded therein and again by making addition by alleging the same as unexplained excess cash. For this purpose, reliance may be placed on the following judicial pronouncements: (i) CIT v. Kailash Jewellery House ITA No. 613/2010 (Delhi High court) dt. 09.04.2010 (ii) CIT v. Jaora flour and Foods Pvt. Ltd. (MP) (2012) 344 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business income of the assessee as per the provisions of the IT Act, 1961? (2) Whether the Ld. CIT(A) erred in accepting the assessee's version as well as part retraction of statement and thereby agreeing that the cash payment of the assessee, along with its group entities, of 60 crores (over and above Rs 50 crores paid through banking channels) was made not out of "suppressed" cash sales but out of "surplus" cash available, ignoring that the sale consideration of the property was only Rs 50 crores in the registered sale deed? (3A) Whether the Ld. CIT(A) erred in accepting the assessee's version as well as part retraction of statement and thereby agreeing that the cash payment was made not out of "suppressed" cash sales but out of "surplus" cash available, ignoring that the impugned cash payment of Rs. 7 crores had not been entered in the books of accounts even till date of search on 10.10.2019? (3B) Whether the Ld. CIT(A) erred in accepting the assessee's explanation on delay in entering the impugned cash payment of Rs 7 crores in the books of accounts, ignoring: a) the specific admission in the statement recorded u/s 132(4), quoted on page 5 of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the statement recorded u/s 132(4) which was retracted at later stage knowing the fact of evidentiary value of statement recorded u/s 132(4) of the IT Act and while retracting from the statement given earlier, the assessee could not produce substantive corroborative evidence in support of his retraction and Ld. CIT(A) further ignored the fact that in concluding part of the statement, the assessee agreed and gave his consent that the statement given by him is correct and accordingly put his signature? 7. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in ignoring that the SLP was dismissed in favour of revenue in the case of Kishore Kumar B. [2014] 52 taxmann.com 449 (Madras), wherein it has been held that "where assessee himself stated about his undisclosed income in sworn statement recorded during search, addition could be made on the basis of admission without scrutinizing documents? 13. We have given thoughtful consideration to the submissions, contentions, material evidence and relevant case laws in the present case and our ground wise deliberation and adjudication on the issues raised by the department, follows as under: 14. Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee, without rejecting the books of accounts, thus the resultant income embedded in the sales recorded which was declared in the return of income by the assessee and already considered for computing the assessed income. Further, the observation and action itself impliedly shows that the Ld. AO was convinced that the amount invested has been generated from the business of the assessee and books of accounts of the assessee consisting of such sale receipts are accepted, thus, the addition of the income which is already recorded in the books of the assessee and the resulted profit have been offered for tax in the return of income filed by the assessee, cannot be taxed again by characterising the same as unaccounted income of the assessee. With such submissions, it was the prayer that the order of Ld. CIT(A) was under proper insight of the facts and in accordance with the prescribed provisions of law, wherein the unlawful addition by the Ld. AO was rightly deleted and, therefore, the same deserves to be uphold. 14.3 We have considered the rival submissions, perused the material available on record and case laws relied upon. On perusal of the available material before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipts have taken a note that since the amount of Rs. 7.00 Crores is part of sales proceeds of the assessee and due taxes have already been paid, thus, the utilization of such amount for making payment / investment with SBIL group as per MOU, taxing the impugned amount again as unaccounted income would lead to double taxation which is against the settled principle of law as laid down under various judicial pronouncements. 14.5 Ld. CIT(A) also deliberated on the issue of incomplete books of assessee. It was the submission of assessee before Ld. CIT(A) that the books of accounts were incomplete on the date of search for various reason such as time lag between cash receipts and actual reporting and making entries into tally software, the software was under upgradation and various data was under recovery, for the sake of secrecy top management had not intimated the high value of cash investment with SBIL to the accounts staff. To verify such contentions of the assessee, Ld. CIT(A) have examined and observed that the cash found from the office premises and residence of the assessee during the search was duly reconciled with the completed books of accounts, such facts were submitted befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, which in absence of any contrary argument, material, decision or evidence brought on record by the revenue, deserves to be affirmed, thus, we uphold the same. Resultantly, ground no. 1 of the revenue stands rejected. 15. Ground No. 2 to 7: Regarding error on the part of Ld. CIT(A) in accepting the assessee's version as well as part retraction from the statement, ignorance of incriminating material, acceptance of retraction by the key person of the assessee. 15.1 On the aforesaid grounds, reiterating the same, it is the submission of Ld. CIT-DR that, the Ld. CIT(A) was in error while deciding the issue accepting the assessee's version as well as part retraction of statement that the assessee had agreed regarding cash payment of Rs. 60 crores over and above Rs. 50 crores paid through banking channels, that the same was not made out of 'suppressed' cash sale but out of 'surplus' cash available, ignoring the fact that sale consideration of the property was only Rs. 50 crores in the registered sale deed. It is further disagreed, that the impugned cash payment of Rs. 7 crore had not been entered in the books of accounts even till the date of search i.e., 10.10.2019. Ld. CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch fact is duly appreciated and recorded by the Ld. AO in the assessment order. Before us, on this issue during the hearing also when the Ld. AR was confronted to place the details of turnover for the AY 2019-20 along with month wise details of GST returns incorporating the date of filing of such returns, such details were furnished and found to be in consonance with the observations and details reproduced by Ld. CIT(A) in his order. Ld. AR further placed before us a written submission on all the aforesaid issues raised by the department, the same is extracted as under: 15.3 With the aforesaid written submissions, it was the prayer of Ld. AR on behalf of the assessee that the order of Ld. CIT(A) was a reasoned, speaking and justified order on the facts of the present case and under the settled principle of law, wherein each and every aspect emerging from the order of Ld. AO are considered under proper appreciation of the facts and circumstances of the case on each possible aspect, in terms of the mandate of law and according to the available jurisprudence by the Hon'ble Courts, therefore, the same is worth considering and deserves to be upheld. 15.4 We have considered the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings, it was not even registered, it is a mutual document, it is just an afterthought arrangement to evade tax. Herein, we may observe that Ld. AO had not considered the explanations of the assessee, he brushed aside all the material and factual evidence also disbelieving the same treating them as afterthought, however, simultaneously, he observed that such transactions are recorded in books afterwards as an afterthought thus are unaccounted business income of the assessee. Surprisingly, Ld AO accepted the books of accounts, no defect have been pointed out in such books, more over the books are not rejected by invoking provisions of relevant Section 145(3) of the Act, he accepted the returned income resulted from such books of accounts. Ld. AO regarded the MOU as a bogus document but have believed the amounts paid in cash in accordance with terms of the said alleged counterfeit document. He imposed the additions in the hands of entities, which as explained by the assessee are investors in the hotels project as per MOU, though, they are not a party in the main sale deed which is the genesis of the payment of cash payment of Rs. 60.00 Crore for acquiring the subject hotel property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Nagubai Amal vs B Sharma Rat) AIR 1956(SC) 593 and Awad Kishore Dass AIR 1979 (SC) 861. (c) No specific defects in the books of accounts are pointed out by the Ld. AO. (d) Rejection of books of accounts u/s 145(3) while making the addition was not done by the Ld. AO, thus, addition to total income is not sustainable, if the books of accounts of the assessee have not been rejected u/s 145(3), reliance was placed on Ompakash Overseas (2008) 173 taxman 185 (P&l-I), Anil Kumar & Co (2016) 386 ITR 702 (Kar) and Talbros Engineering Ltd (2016) 386 ITR 154 (P&H), (e) Books of accounts of the assessee have regularly been audited on which no negative inference has been drawn by the Ld. AO. (f) The sales which is recorded in the books of accounts and resultant profit was offered for tax in such a situation utilization of such sales proceeds in payment or investment cannot be taxed again treating the same as unaccounted income of the assessee. Reliance was placed on Laxmipat Singhania (1969) 72 ITR 291 (SC), Jain Brothers and Others (1970) 77 ITR 107(SC), Nagarjuna Fertilizers and Chemicals Limited ITTA No 100/2003 (AP) and Mahaveer Kumar Jain CA No 4166/2006 (SC). (g) The opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no abnormal increase and decrease in total sales, therefore, sales shown in books of accounts for the year under consideration cannot be doubted. It is observed that the appellant had every right to update its books of accounts by making pending entries including payments to SBIL and, therefore, the completed and audited books of accounts should have been considered by the Ld. AO during the assessment proceedings. 15.7 In backdrop of the aforesaid observations, the Ld. CIT(A) finally concluded as under: "Accordingly, It is concluded that the retraction from statement is acceptable. Contents of MOU cannot be doubted. The books of account of the appellant have not been rejected and no deficiency has also been pointed out by the AO. The results of audited books of account have been accepted by the AO. The amount of cash of Rs. 7 crores invested with SBIL is found to be out of cash available in the books of the appellant. In lieu of such investment, the appellant has received share in revenue of M/S. Pacifica as per the terms and conditions of MOU. Therefore, addition of Rs. 7 crore on account of unaccounted business income in the hands of the appellant is not found sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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