Pr. Commissioner Of Income Tax-3, Ahmedabad v. Nishant Construction Pvt. Ltd

C/TAXAP/809/2017 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 809 of 2017With R/TAX APPEAL NO. 898 of 2017 ========================================================== PR. COMMISSIONER OF INCOME TAX-3, AHMEDABADVersus NISHANT CONSTRUCTION PVT. LTD. ========================================================== Appearance:MR MANISH BHATT FOR MRS MAUNA M BHATT(174) for the PETITIONERMR S N SOPARKAR, SR ADV and Mr. B S SOPARKAR for the RESPONDENT ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIandHONOURABLE MR.JUSTICE B.N. KARIA Date : 09/04/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These two appeals concerning the same assessee for two separate assessment years raised same questions. We may peruse facts from Tax Appeal No. 898 of 2017 challenging the judgement of the Income Tax Appellate Tribunal dated 14.02.2012 raising following question for our consideration:separate assessment years raised same questions. We may peruse facts from Tax Appeal No. 898 of 2017 challenging the judgement of the Income Tax Appellate Tribunal dated 14.02.2012 raising following question for our consideration: “Whether the Appellate Tribunal was correct in law and on facts in deleting the addition of Rs. 32.56 crores made by the A.O. during the year under consideration?” 2. The respondent-assessee is engaged in the construction development of projects. The assessee was subjected to survey operation during which, certain documents were found and development of projects. The assessee was subjected to survey operation during which, certain documents were found and impounded. One such document was a loose paper containing certain figures of the area and rate of sale of constructed area. On the basis of such documents, further inquiries were made by the Assessing Officer. He collected material pertaining to the rates prevailing in the market and came to the conclusion that the assessee had received on-money in sale of flats in the schemes known as Ratnakar 3 and Ratnakar 4 situated in Satellite area of city of Ahmedabad. He therefore, made addition to the tune of Rs. 32.56 crores (rounded off). 3. Assessee carried the matter in appeal before the Commissioner. Commissioner (Appeals) confirmed the addition placing heavy reliance on the following three factors:Commissioner. Commissioner (Appeals) confirmed the addition placing heavy reliance on the following three factors: (i)Above noted loose documents contained reference to constructed areas and rate of sale; (ii)The assessment proceedings concerning the builders M/s. Sambhav Infrastructure Pvt. Ltd in which the assessee had admitted to have received sizeable on-money during sale of flats in the same vicinity; (iii)From survey and the material collected by the Assessing Officer from the website which, according to him indicated prevailing market rates. 4. The issue was carried in further appeal by the assessee before the Tribunal. The Tribunal at one stage remanded the proceedings for giving opportunity to the assessee to seek cross-examination of representative of M/s. Sambhav Infrastructure Pvt. Ltd. The assessee had therefore come to the High Court and complained about the remand of the proceedings containing that no cross-examination was sought or is being insisted upon. The High Court therefore requested the Tribunal to decide the appeal on merits. Thereupon, the Tribunal ruled in favour of the assessee principally holding that there was no reliable or independent evidence to come to the conclusion that the assessee had accepted on-money in the sale of the constructed properties. 4. The issue was carried in further appeal by the assessee before the Tribunal. The Tribunal at one stage remanded the proceedings for giving opportunity to the assessee to seek cross-examination of representative of M/s. Sambhav Infrastructure Pvt. Ltd. The assessee had therefore come to the High Court and complained about the remand of the proceedings containing that no cross-examination was sought or is being insisted upon. The High Court therefore requested the Tribunal to decide the appeal on merits. Thereupon, the Tribunal ruled in favour of the assessee principally holding that there was no reliable or independent evidence to come to the conclusion that the assessee had accepted on-money in the sale of the constructed properties. 5. We have heard learned counsel for the parties and perused the documents on record. The Tribunal discarded loose document on the ground that the same did not pertain to assessee's schemes Ratnakar 3 and Ratnakar 4 since the document referred to the areas and rates of the penthouse whereas scheme Ratnakar 3 does not have a penthouse and scheme Ratnakar 4 does not have 4 BHK Flats and though has penthouse, area does not match with the loose document. This therefore is substantially a question of fact. If we eliminate these documents from consideration, what Revenue would have are the admissions made by the representative of M/s. Sambhav Infrastructure Pvt. Ltd of having received on-money in sale of flats and the comparison by the Revenue authorities documents on record. The Tribunal discarded loose document on the ground that the same did not pertain to assessee's schemes Ratnakar 3 and Ratnakar 4 since the document referred to the areas and rates of the penthouse whereas scheme Ratnakar 3 does not have a penthouse and scheme Ratnakar 4 does not have 4 BHK Flats and though has penthouse, area does not match with the loose document. This therefore is substantially a question of fact. If we eliminate these documents from consideration, what Revenue would have are the admissions made by the representative of M/s. Sambhav Infrastructure Pvt. Ltd of having received on-money in sale of flats and the comparison by the Revenue authorities of the given rates for the constructed properties in the same area. Firstly neither the Assessing Officer nor the CIT (Appeals) had compared the rates of M/s. Sambhav Infrastructure Pvt. Ltd or any other constructed properties which was sold during the same time in the same area. Even after making the additions in case of M/s. Sambhav Infrastructure Pvt. Ltd with the aid of the confessional statements made by the representative, neither the Assessing Officer nor the CIT (Appeals) co-related the sale with that of the assessee by establishing that the sales were during the same period in relation to the properties which offered similar advantages. In fact, their contention was that this demonstrated a uniform trend or a pattern in the industry of cash transactions. 6. The reference to the material collected from the website was also bereft of comparabilityin terms of area, location and period. All in all, the entire issue was factual in nature. The Tribunal having considered the relevant facts, no question of law arises. also bereft of comparabilityin terms of area, location and period. All in all, the entire issue was factual in nature. The Tribunal having considered the relevant facts, no question of law arises. Tax Appeals are dismissed. (AKIL KURESHI, J) JYOTI V. JANI (B.N. KARIA, J)