Itxa/1963/2017 Of Pr. Commissioner Of Income Tax-2 v. Nexus Builders And Developers Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1963 OF 2017 Pr. Commissioner of Income Tax -2 ….Appellant V/s. Nexus Builders and Developers Pvt. Ltd. ….Respondent ---- Mr. Suresh Kumar for appellant.Mr. S.C. Tiwari a/w. Ms. Hetal Laghave for respondent. ---- CORAM : K.R. SHRIRAM & AMIT B. BORKAR, JJ. DATED : 29[th] NOVEMBER 2021 P.C. : 1The following substantial questions of law are proposed in this appeal : (a) Whether on the facts and circumstances of the case andin law the Hon’ble ITAT was right in deleting the additionmade u/s. 69A of the IT Act without appreciating the factthat the same is based on, documents and CD’s impoundedduring the course of survey proceeding which shows that theassessee is indulging in the activity of receiving “on-money”in cash on sale of flats, which is over and above the salevalue shown in the registered sale deed and which is notdisclosed in the return of income filed. (b) Whether on the facts and circumstances of the case andin law the Hon’ble ITAT was right in deleting the additionmade u/s. 69A of the IT Act by not properly appreciating theevidence in form of impounded documents and CD’s whichare admissible evidence u/s. 65B of the Indian Evidence Act,1872. 2The facts in brief are during a survey and search in the office premises of respondent, a CD was found. In the CD, a letter in respect of sale transaction with one Mr. Devendra Singh Tomar was found. According to the Assessing Officer, the letter dated 8[th] August 2008 addressed to thesaid Devendra Singh Tomar showed that the sale price payable by DevendraSingh Tomar is Rs.57,73,000/- towards the purchase of flat, whereas theagreement value with reference to the same was Rs.49,18,000/-. TheAssessing Officer called upon respondent to show cause as to why thedifference in the sale price of Rs.8,55,000/- should not be added to the totalincome of respondent and further, why the same proportion should not beadopted for the other flats sold during the year 2008-2009. During that year,respondent had sold many other flats. Respondent showed cause andexplained why the difference should not be added. Respondent’s contentionswere rejected and the Assessing Officer simply multiplied this figure ofRs.8,55,000/- to the number of flats sold and added a sum ofRs.3,05,89,980/- under Section 69A of the Income Tax Act, 1961 asdisallowance on account of undisclosed money. 3Respondent impugned this order of the Assessing Officer byway of an appeal before Commissioner of Income Tax (Appeal) [CIT (A)],who dismissed the appeal but reduced the undisclosed income toRs.2,97,34,980/-. Aggrieved by this order, respondent preferred an appealbefore the Income Tax Appellate Tribunal (ITAT), who set aside the order ofthe CIT (A) by an order dated 31[st ]January 2017, which is impugned in thisappeal. 4We have considered the appeal memo and the impugned orderwith the assistance of Mr. Suresh Kumar and Mr. Tiwari. We do not see anyreason to interfere with the order impugned. The crux is that there was noevidence found against respondent and no enquiry was carried out by theAssessing Officer to find out more details and the entire addition has beenmade on hypothetical basis. 5The ITAT has also accepted the explanation of respondent thatinitially the said flat, of which the letter was found, was negotiated and soldfor a sum of Rs.59,34,000/- to one Mr. Milind Bhingare and the party hadmade a token payment of Rs.1 lakh. The booking was cancelled on theground that the agreed price was much higher than prevailing market priceand Rs.1 lakh was returned to Mr. Milind Bhingare. Thereafter,Mr. Devendra Singh Tomar approached respondent and negotiated topurchase the flat at Rs.49,18,000/- which amount the said Devendra SinghTomar paid in three installments. The said Devendra Singh Tomar has alsofiled an affidavit giving details as well as proofs of payment. In our view, theconclusions of the Assessing Officer and supported by CIT (A) are allconjectures. 5The ITAT has also accepted the explanation of respondent thatinitially the said flat, of which the letter was found, was negotiated and soldfor a sum of Rs.59,34,000/- to one Mr. Milind Bhingare and the party hadmade a token payment of Rs.1 lakh. The booking was cancelled on theground that the agreed price was much higher than prevailing market priceand Rs.1 lakh was returned to Mr. Milind Bhingare. Thereafter,Mr. Devendra Singh Tomar approached respondent and negotiated topurchase the flat at Rs.49,18,000/- which amount the said Devendra SinghTomar paid in three installments. The said Devendra Singh Tomar has alsofiled an affidavit giving details as well as proofs of payment. In our view, theconclusions of the Assessing Officer and supported by CIT (A) are allconjectures. 6In our view, the Tribunal has not committed any perversity orapplied incorrect principles to the given facts and when the facts andcircumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises anysubstantial question of law. 7The appeal is devoid of merits and it is dismissed with no order as to costs. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.)