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TMI Blog2024 (1) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... eging profiteering by the Respondent in respect of purchase of Flat Nos. C-1105 and G-1115 respectively in the Respondent's project "Prateek Edifice", situated in Sector-107, Noida, Uttar examined by the Standing Pradesh. The aforesaid reference was Committee on Anti-profiteering, whereby it was decided to refer the matter to the DGAP, to conduct a detailed investigation. The said application Was examined by the DGAP and the Investigation Report dated 27.11.2020 under Rule 129(6) of the Rules, was furnished to the NAA. Vide the said Report, it was submitted that on the basis of the CENVAT/Input Tax Credit availability pre and post-GST and the details of the amount collected by the Respondent from home buyers during the period 01.07.2017 to 31.12.2019, the amount of benefit of input tax credit that has not been passed on by the Respondent to the recipients or in other words, the profiteered amount worked out to Rs. 11,99,09,043/- (including GST) which was inclusive of profiteered amount of Rs. 1,75,220/- in respect of the Applicant No. 1 and profiteered amount of Rs. 59,437/- in respect of the Applicant No. 2. It was also mentioned that the Respondent had passed on ITC benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer agreements and customer ledgers for Applicant No. 1, Applicant No. 2 and Sh. Vikas Agarwal and stated that Applicant No. 1 and Sh. Vikas Agarwal had booked unit No. C-1105 & 1106 on same date, but the ad hoc charges to be charged from them were separate. The Respondent also submitted that benefit of ITC given to each customer was computed individually depending on various factors such as cost of flat, installment due date, installment payment date, date of booking etc. and thus the benefit of ITC given to both Applicant No. 1 and Sh. Vikas Agarwal was not comparable. C. On scrutiny of all the documents submitted by the Respondent in relation to the above mentioned issue, it was observed that the demand and advances received from both the Applicants & Sh. Vikas Agarwal as reflected in the home buyers list submitted by the Respondent during the earlier investigation was different. Further, the submission of Respondent that benefit of ITC given to each customer was computed individually depending on various factors such as cost of flat, installment due date, installment payment date, date of booking etc. was considerable as it was noticed that the Respondent had passed on diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, the profiteering computation was also correct in respect of all the buyers as mentioned in the report dated 27.11.2020. II. Reply to the observations made by NAA vide Para 6(b) of 1.O. No. 08/2022 dated 27.07.2022:- a. The total saleable area reflected in the Report dated 27.11.2020 was based on the home buyers list furnished by the Respondent during the course of investigation. On the objection raised by Applicant No. 1 and as per the directions of the NAA that the DGAP was directed to re-calculate the saleable area based upon his RERA documents/registration, the Respondent was requested to submit reconciliation of the area in home buyers list vis-a- vis the area reflected in RERA registration. In response, the Respondent furnished a reconciliation statement as per Uttar Pradesh RERA registration of project "Prateek Edifice" and a copy of project report summary of RERA. In order to cross verify the project report summary of RERA, the relevant papers were also downloaded from the website of UP RERA. Both the summaries were found to be the same. Further it was noticed that in the RERA summary only the unit carpet area and balcony area and their sum was reflected, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal estate. C. That the total saleable area of 12,19,138 sq. ft. was correctly taken in the Report dated 27.11.2020 as per home buyers list furnished by the Respondent. The same was corroborated by the fact that as per RERA summary the total saleable area (carpet area + balcony area - loading) was 10,16,795 sq. ft., which was less than the super area reflected in the home buyers list. This also explained that area of 2,02,343 the Respondent had loaded an (12,19,138-10,16,795) sq. ft. III. Thus, with reference to the above issue raised by the Applicant No. 1 before NAA, on scrutiny of documents, it was observed that total saleable area i.e. 12,19,138 sq. ft. considered for computation of profiteering in the report dated 27.11.2020 was correct and in order. That the earlier report dated 27.11.2020 submitted by the DGAP establishing and determining profiteering to the tune of Rs. 11,99,09,043/ (including GST) be considered as findings of this investigation. IV. That the provisions of Section 171(1) of the Act, requiring that "any reduction in rate of tax on any supply of goods or services or the benefit of ITC shall be passed on to the recipient by way of commensurate reduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irly and reasonably and has not considered all the material relevant to issues raised by Applicant No. 1 in his affidavit dated 18.05.2022. II. Vide para 8 of 1.O. No. 08/2022 dated 27.07.2022, the NAA directed DGAP to calculate profiteered amount in respect of not only Applicant No. 1, but also other home buyers. Apart from Applicant No. 1, some of such homebuyers, having not been paid full profiteered GST benefit include Sh. Rajender Shankar and Sh. Afzal Ahmed Khan. III. No such credit notes were ever issued to the Applicant No. 1, his cousin Sh. Vikas Agarwal and other home buyers i.e. Sh. Rajender Shankar and Sh. Afzal Ahmed Khan as mentioned by the Applicant No. 1 in Annexure -C to the above submissions and were claimed to be forged and fabricated. IV. In the DGAP's report dated 27.11.2020 verification of receipt of benefit of ITC was done by sending emails to the homebuyers at the email addresses provided by the Respondent. since the email ids provided by the Respondent were wrong hence no such verification email was ever received by Applicant No. 1 and other home buyers as mentioned in para 6(III) above. V. DGAP's report dated 14.02.2023 was completely silen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) check correct saleable area as per RERA records. Both the above points had been re-investigated properly and thoroughly by the DGAP and findings were recorded in the Report dated 14.02.2023. II. The Applicant No. 1 had got benefit of ITC of Rs. 16,419/- as against the profiteered amount of Rs. 57,900/-, which was already less than what was required to be passed on to him. In case of Sh. Afzal Ahmed Khan and Sh. Rajender Shankar, they had received Rs. 2,06,416/- and Rs. 16,36,867/- respectively as benefit of ITC as against profiteered amount of Rs. 2,00,885/- and Rs. 15,74,230/- respectively. III. The DGAP had verified the credit notes issued to Sh. Vikas Agarwal with other documents such as ledgers and found that credit Note No. 00128/18-19 dated 10.11.2022 for Rs. 18,385/- and credit Note No. 00085/18-19 dated 10.11.2022 for Rs. 65,142/- (total Rs. 83,527/-) had been passed on. The same had been duly entered in the customer's ledger. IV. The DGAP had obtained email ids/phone numbers from the home buyers list, which had to be provided by the Respondent. In the present case also as per practice, emails had been sent to home buyers and outcome of the same was mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of rounding off of figures. The figure of 12,39,814 sq. ft. mentioned by the Applicant No. 1 had not been found in the RERA summary. Further, the calculations submitted by the Applicant No. 1 for 12,39,814 sq. ft. and declaration submitted to New Okhla Industrial Development Authority (NOIDA) for 12,79,980.50 sq. ft. by the Respondent had been considered and as per the practice followed by the DGAP for consideration of area of a project, the project Report submitted to RERA had been taken as authentic fact. Further the figure of 12,79,980.50 sq. ft. in the declaration submitted by the Respondent to NOIDA under Section 12(1) of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 & Rule 3 of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Rules, 2011 could not be treated as the final figure as there was a provision to amend the said declaration in terms of Section 12(2) of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. Accordingly, the figures provided by the Applicant No. 1 were not justifiable in the instant case as DGAP had taken the saleable are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023 is that vide Para 8 of 1.O. No. 08/2022 dated 27.07.2022, the NAA directed DGAP to calculate profiteered amount in respect of not only Applicant No. 1, but also other home buyers. Apart from Applicant No. 1, some of such homebuyers, having not been paid full GST benefit included Sh. Vikas Agarwal, Sh. Rajender Shankar and Sh. Afzal Ahmed Khan as mentioned by the Applicant No. 1 vide Annexure -C to his submissions dated 24.07.2023. Applicant No. 1. further, added that there is no mention and discussion about compliance of Para 8 of 1.O. No. 08/2022 in DGAP's report dated 14.02.2023. Only Para 6(a) & 6(b) has been addressed in the DGAP's report dated 14.02.2023. c) The Applicant No. 1 further contended that DGAP's report dated 14.02.2023 is completely silent about the manipulated and false claim of the Respondent as to the turnover of Rs. 50,85,24,517/- during pre-GST period of April 2016 to June 2017 and falsity of the said claim of the Respondent to said turnover is evident from the audited balance sheet of the Respondent for FY 2013-18. d) The Applicant No. 1 also requested for forensic audit qua the accounts of the Respondent to ascertain correct figure of to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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