Income Tax Appellate Tribunal - Chennai
Dcit, Central Circle-1, Madurai vs C Nilavathy, Tuticorin on 31 July, 2019
आयकर अपील य अ धकरण, 'ए' यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL ' A' BENCH : CHENNAI ी एन.आर.एस. गणेशन, या यक सद य एवं ी इंटूर रामा राव, लेखा सद य के सम [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER] आयकर अपील सं./I.T.A. Nos.124, 130 & 131/CHNY/2019 नधारण वष /Assessment years : 2010-11, 2011-12 & 2013-14.
The Deputy Commissioner of Vs. C. Nilavathy,
Income Tax, No.137A, Pudurpandiapuram,
Central Circle -1, Tuticorin 628 002.
Madurai.
[PAN ABJPN 6222H]
(अपीलाथ /Appellant) ( यथ /Respondent)
आयकर अपील सं./I.T.A. Nos.164, 165, 166, 167, 168, 169 & 170/CHNY/2019 नधारण वष /Assessment years : 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 & 2014-2015.
The Deputy Commissioner Vs. Late Shri. D. Chandran,
of Income Tax, L/H. of Smt. C. Nilavathy,
Central Circle -1, No.137A, Pudurpandiapuram,
Madurai. Tuticorin 628 002.
[PAN ABQPC 5981R]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ# क$ ओर से/ Appellant by : Dr. S. Bharath, IRS, CIT
&'यथ# क$ ओर से /Respondent by : Shri. K.G. Raghunath, Adv
:- 2 -: ITA No.124, 130-131, 164-
170/19
सन
ु वाई क$ तार ख/Date of Hearing : 27-06-2019
घोषणा क$ तार ख /Date of Pronouncement : 31-07-2019
आदे श / O R D E R
PER BENCH:-
These are appeals filed by the Revenue directed against different orders of the learned Commissioner of Income Tax (Appeals)-19, Chennai (hereinafter called as 'CIT(A)') dated 04.10.2018 in respect of Smt. V. Nilavathy and late D. Chandran, L/H of Smt. V. Nilavathy respectively.
2. Since, the identical facts and issues are involved in these appeals, we proceed to dispose the same vide this common order.
3. There is a delay of thirteen days in filing the present appeals by the Revenue. The Assessing Officer filed petition praying for condonation of delay stating that delay had occurred on account of delay in transmission of assessment records from higher authorities and delay is neither willful nor wanton and therefore prayed for condoning the delay. Ld. Authorised Representative did not raise any serious objection for condoning the delay. In the circumstances, we :- 3 -: ITA No.124, 130-131, 164- 170/19 condone the delay of thirteen days in filing the appeals and admit the appeals for adjudication.
4. For the sake of convenience and clarity the facts relevant in ITA No.165/Chny/2019 in the case of late Shri. D. Chandran for assessment year 2009-10 are stated herein.
5. The Revenue raised the following grounds of appeal:
''1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law,
2. The earned CIT(A) erred in holding that AC relying on the 'unregistered sale agreement', which was not only entered in exceptional circumstances with several riders, but has also not materialized even today and finally given-up, is not justified without appreciating that the remaining 75 cents of land as mentioned in the seized sale agreement from the son of the same Sri.P.Ramaswamy and registered on the same day i.e.,16.09.2010 vide document no. 6881 of 2010.
2.1 The learned CIT(A) ought to have considered the fact that the assessee had claimed that the 25 cents of land was meant for pathway and therefore a higher price was offered, but the said land had not actually been registered, whereas without registering the said piece of land the assessee could not have promoted the land project 'Arun High Tech City" and sold plots in the project in the subsequent years.
2.2 The learned CIT(A) ought to have appreciated the fact that the assessee had maintained duplicate sets of Books of Accounts and hence, excess consideration would have passed to the vendor.
3. For these grounds and any other ground including amendment of grounds that may be raised during the :- 4 -: ITA No.124, 130-131, 164- 170/19
course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored''.
6. The brief facts of the case are as under:
The respondent-assessee is an individual and Director in M/s.Nila Sea Foods Group of concerns. Search and Seizure operations under the provisions of Section 132 of the Income Tax Act, 1961 (in short ''the Act'') were conducted on 17.12.2013 in the said group of concerns and also respondent-assessee. Subsequently, notice u/s.153A of the Act was issued to the respondent-assessee on 02.01.2014 by the Assistant Commissioner of Income Tax, Circle I, Tuticorin. In response to which respondent-assessee had filed return of income admitting I,6,77,528/- which is same as the original return of income. Against the said return of income, the assessment was made at total income of I10,89,88,170/- vide order dated 31.03.2016 passed u/s.143(3) r.w.s. 153A of the Act. While doing so, the Assessing Officer made addition of I10,83,10,640/- on account of alleged unexplained investment in purchase of 17.75 acres of land at Sirudhoor Village, Madurai.
7. The factual background of the issue is that the respondent- assessee purchased 17.75 acres of land at Sirudhoor Village, Madurai during the period 2008-09 to 2012-2013 and developed the same :- 5 -: ITA No.124, 130-131, 164- 170/19 lands into plots in two phases in the name of ''Arun Hitech City''. Obviously, the lands were purchased for the purpose of its business and the plots were sold during the financial years 2011-12, 2012-13 and 2013-14. During the course of search and seizure operations, the Department authorities had seized material numbered ANN/RK/NSF/B&D/D-3, dated 29.01.2014, which is a sale agreement entered by Smt. C. Nilavathy, on 16.09.2010 for purchase of 25 cents of land in Sirudhoor Village, Madurai from one Shri. P. Ramasamy and others at I84,000/- per cent of land. Based on this information, the Assessing Officer had proposed to adopt same amount of consideration in respect of 17.75 acres of land purchased at Sirudhoor Village. Accordingly, respondent-assessee was asked to explain vide letter dated 17.12.2015 as to why purchase consideration at the rate of I84,000/- per cent should not be applied in respect of entire purchase of lands. In reply to the same, respondent-assessee filed detailed reply to the Assessing Officer vide letter dated 15.02.2016 stating that the land in the agreement was intended for providing passage to the land already purchased and plotted and it is further submitted that the deal had not come through for the reason that the land was held in the name of Minor. However, the Assessing Officer taking into consideration the fact that respondent-assessee's wife Smt. C. Nilavathy had bought the land from the sons of same Shri. P. :- 6 -: ITA No.124, 130-131, 164- 170/19 Ramasamy on 16.09.2010 vide document No.6881 of 2010 and also prevailing practice in real estate business of paying on-money for purchase of land, estimated cost of land at the rate of I70,000/- per cent and worked out the consideration of land bought as undisclosed investment at I12,42,50,000/- as against disclosed investment of I1,59,39,360/- and the balance amount of I10,83,10,640/- was brought to tax as unexplained investments.
8. Being aggrieved, by the above addition an appeal was preferred before the ld. CIT(A), who vide impugned order considering the submissions of the assessee that no extra money was paid for purchase of lands over and above the consideration shown in the registered sale deed and reflected in the books of accounts and the fact that no direct evidence was found suggesting payment of on- money towards purchase of properties and also fact that in the hands of group concerns which belongs to respondent-assessee, the settlement commission determined undisclosed income of I152 Crores pursuant to the application made before by it by the said group of companies for settlement of Income Tax cases held that no addition can be made on account of on-money payment for purchase of properties. Accordingly, the ld. CIT(A) deleted the addition.
:- 7 -: ITA No.124, 130-131, 164-
170/19
9. Being aggrieved by the above decision of the CIT(A), the
Revenue is in appeal before us in the present appeal. The ld CIT- Departmental Representative contented that the ld. CIT(A) ought not have deleted the addition since there is a prevailing practice in real estate business of paying on-money for purchase of land. He further submitted that without buying the pathway to the layout plots, cannot be sold.
10. On the other hand, the ld. Authorised Representative submitted that addition was made merely on surmises and presumptions and the seized material which is only in the nature of incriminating material found during the course of search operation u/s.132 of the Act. He further submitted that the seized documents does not belong to the respondent-assessee but wife of the respondent-assessee. In any event the sale agreement was never acted upon and the consideration mentioned in the sale agreement had no evidential value. He also placed reliance on the decision of Hon'ble Supreme Court in the case of Common Cause (Registered Society) vs. Union of India, 394 ITR 220.
11. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the addition on :- 8 -: ITA No.124, 130-131, 164- 170/19 account of alleged unexplained investments in purchase of lands. These lands were bought by the assessee during the previous year relevant to impugned assessment year against stated consideration of I1,59,39,360/-. However, during the course of search and seizure operations, the Department has found one sale agreement dated 16.09.2010 entered by wife of the assessee namely Smt. C. Nilavathy for purchase of 25 cents of land in Sirudhoor Village, Madurai with sons of Shri. P. Ramasamy at the rate of I84,000/- per cent. Based on this material, the Assessing Officer extrapolated the cost for purchase of the lands at the rate of I70,000/- per cent and accordingly, treated the difference as unexplained investments and brought to tax. Therefore the question that arises for determination is whether the Assessing Officer is justified in doing so, the submission of the assessee is that the said agreement was never acted upon and further the subject land is situated at Main Road intended to be used for the passage of the layout remains uncontroverted. Therefore, in these backdrop of facts the issue that arises for determination is whether the Assessing Officer is justified in extrapolating the cost of investment so as to enable him to make addition as unexplained investments. The observation made by the Assessing Officer that it is normal practice in real estate business to pay on-money goes to suggest that the addition made by the Assessing Officer is based on :- 9 -: ITA No.124, 130-131, 164- 170/19 mere surmises and presumptions. The Assessing Officer had not even attempted to bring corroborative evidence in support of the presumption drawn by him. The assessee the land by way of registered sale deed and the consideration shown in the sale deeds have been duly reflected in the books of account . The Assessing Officer not even chosen to cross examine the vendor in order to find out the real consideration passed on in the transaction. The Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh vs. ITO, (2010) 323 ITR 588 considering the provisions of Sections 91 and 92 of the Indian Evidence Act, 1872 held that in case where the purchase of the property was evidenced by duly registered written sale deed, the same could not be disbelieved even on any oral submission made by the assessee or any other persons. Similarly, the Jurisdictional High Court in the case of CIT vs. P.V. Kalyanasundaram, (2006) 282 ITR 259, where the addition of income was made based on a statement given by the seller, held that in the absence of independent enquiry made by the Assessing Officer relating to the value of the property purchased, the addition cannot be made. This decision of Hon'ble Jurisdictional High Court was confirmed by the Hon'ble Supreme Court in (2007) 294 ITR 49. The facts of the present case are much more on stronger footing as there was no statement recorded from the vendor that higher consideration than shown in the :- 10 -: ITA No.124, 130-131, 164- 170/19 sale deed was paid. Even, the Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO, (1981) 131 ITR 597 had laid down the proposition of law that the burden of proving understatement of consideration is always on the Revenue. Similarly, the Hon'ble Delhi High Court in the case of CIT vs. Suraj Devi, (2010) 328 ITR 604 held that primary burden of proof to prove understatement or concealment of income is on the Revenue. Only when such burden is discharged it would be permissible to rely upon the external evidence like DVO report. In the present case, no evidence was found as a result of search operations suggesting that payment of consideration over and above consideration shown in the registered deed. Addition merely based on the agreement entered by third party cannot be the basis of addition. Similar view was taken by the Punjab and Haryana High Court in the case of PCIT VS. Kulwinder Singh, (2019) 415 ITR
49. The finding of the ld. CIT(A) that addition is not warranted on account of unexplained investments if any telescoping the undisclosed income determined by the Settlement Commission in the hands of the group concerns belonging to the assessee remains unconverted. The significant material that to be noted is that the seized material does not belong to the respondent-assessee and nor it is the case of the Assessing Officer that it was found during the course of search operation in the case of the respondent- assessee. In the backdrop of :- 11 -: ITA No.124, 130-131, 164- 170/19 the facts the issue that may arise for consideration is whether in the assessment framed pursuant to notices issued u/s.153A of the Act an addition can be made dehorse the seized material. The Hon'ble Bombay High Court in the case of Continental Warehousing Corporation, 374 ITR 645 held that in the absence of any incriminating material found as a result of search proceeding no addition can be made. Similar view was taken by the numerous High Courts namely Pr.CIT v. Meeta Gutgutia [2018] 96 taxmann.com 468/257 Taxman 441 (SC) ; ii) Pr. CIT v. Saumya Construction (P.) Ltd. [2016] 387 ITR 529/[2017] 81 taxmann.com 292 (Guj); iii) Pr. CIT v. Devangi [2017] 88 taxmann.com 610/394 ITR 184 (Guj.) iv) Pr. CIT v. Jay Infrastructure and Properties (P.) Ltd. [Tax Appeal No. 740 of 2016, dated 10-10-2016] and CIT v. Kabul Chawla [2015] 61 taxmann.com 412/234 Taxman 300/[2016] 380 ITR 573 (Delhi), CIT vs. Murali Agro Products, 49 taxmann.com 172. In the light of above factual legal positions, the addition cannot be made on account of alleged investment in the purchase of properties cannot be sustained in the eyes of law. Therefore, we do not find any reason to interfere with the order of the ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed.
:- 12 -: ITA No.124, 130-131, 164-
170/19
12. In the result, the appeal of the Revenue in ITA
No.165/CHNY/2019 for assessment year 2009-2010 in respect of late Shri. D. Chandran stands dismissed.
ITA Nos. 164 and 166 /CHNY/2019 for assessment years 2008-09 and 2010-2011 of late Shri. D. Chandran.
13. Since, the facts in the present appeals are identical to the facts in ITA No.165/Chny/2019, for assessment year 2009-2010, for the reasons mentioned therein, we dismiss the appeals of the Revenue on the above lines indicated in appeal ITA No.165/Chny/2019 supra. Hence, the above captioned appeals filed by the Revenue are dismissed.
14. In the result, the appeals filed by the Revenue in ITA Nos.164 & 166/CHNY/2019 for assessment years 2008-09 and 2010-2011 of late Shri. D. Chandran stand dismissed.
ITA Nos. 124, 130 and 131/CHNY/2019 for assessment years 2010-2011, 2011-12 and 2013-2014 of Smt. C. Nilavathy.
15. Since, the facts in the present appeals are identical to the facts in ITA No.165/Chny/2019, for assessment year 2009-2010 in respect :- 13 -: ITA No.124, 130-131, 164- 170/19 of late Shri. D. Chandran for the reasons mentioned therein, we dismiss the appeals of the Revenue on the above lines indicated in ITA No.165/Chny/2019 supra. Hence, the above captioned appeals filed by the Revenue are dismissed.
16. In the result, the appeals filed by the Revenue in ITA Nos.124, 130 and 131/CHNY/2019 for assessment years 2010-2011, 2011-12 and 2013-2014 in respect of Smt. C. Nilavathy are dismissed.
17. Now, we take up appeal of the Revenue in ITA No.169/CHNY/2019 for assessment year 2013-14 in respect of late Shri. D. Chandran for adjudication.
18. The Revenue raised the following grounds of appeal:-
1. ''The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2. The learned CIT(A) erred in holding that AO relying on the 'unregistered sale agreement', which was not only entered in exceptional circumstances with several riders, but has also not materialized even today and finally given- up, is not justified without appreciating that the remaining 75 cents of land as mentioned in the seized sale agreement from the son of the same Sri.P.Ramaswamy and registered on the same day i.e.,16.09.2010 vide document no. 6881 of 2010.
2.1 The learned CIT(A) ought to have considered the fact that the assessee had claimed that the 25 cents of land :- 14 -: ITA No.124, 130-131, 164- 170/19
was meant for pathway and therefore a higher price was offered, but the said land had not actually been registered, whereas without registering the said piece of land the assessee could not have promoted the land project "Arun High Tech City" and sold plots in the project in the subsequent years.
2.2 The learned CIT(A) ought to have appreciated the fact that the assessee had maintained duplicate sets of Books of Accounts and hence, excess consideration would have passed to the vendor.
3 The ld.CIT(A) ought to have followed decision of the Hon' Jurisdictional High Court in the case of CIT vs.Rangroop Chand Chordia (241 Taxmann 221) that loose sheets constitute documents u/s. 132 of the Act. 3.1 The ld.CrT(A) failed to appreciate that the scribblings found during the course of search u/s.132 are incriminating documents and the assessing Officer has rightly made an addition based on the notings in the seized material and arriving at the sale price accordingly. 3.2 The Id.CIT(A) ought to have appreciated the fact that as per the scribblings the assessee himself has fixed the sale price at Rs.3,80,000/-(13.2.2013) per cent for the Asst. Year 13-14 which also seems in consonance with the purchase rate adopted by AO of Rs.60,000 for AY 2008-09, Rs.70,000/- for AY 2009-10, Rs.84,000/- per cent for Asst. Year 2011-12 to 2013-14 and the Assessing Officer has rightly adopted the same.
4. The ld.CIT(A) erred in allowing the development charges claimed by the assessee in entirety.
4.1 The ld.CIT(A) ought to have called for a remand report from the AC on the veracity of the new evidence furnished by Assessee as he has claimed that the expense was towards filling the lake and seems to have furnished the details of the extent of the lake and the expenses incurred thereon before the ld.CIT(A).
:- 15 -: ITA No.124, 130-131, 164- 170/19
5. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored''.
19. The brief facts of the case are that Respondent- assessee is an individual and Director in M/s.Nila Sea Foods Group of concerns. The return of income for the AY 2013-14 was filed on 18.06.2014 disclosing total income of I66,55,150/- Subsequently, search and seizure operations was conducted u/s.132 of the Act in the case of Nila group of concerns as well as respondent-assessee. Notice u/s.153A of the Act dated 02.01.2014 was issued by the ACIT, Circle I, Tuticorin. In response to which respondent-assessee had filed the same return of income same as original return of income. Against the said assessment, the assessment was completed by the Deputy Commissioner of Income Tax, Circle -1, Madurai vide order dated 31.03.2016 passed u/s.143(3) r.w.s. 153A of the Act at total income of I1,29,57,930/-. While doing so, the Assessing Officer made addition on account of alleged understatement of consideration received on sale of plots in ''Arun Hi-tech City''.
20. The facts leading to the addition are that during the course of search operations in the case of M/s.Nila Sea Foods Group of concern a notebook was seized and numbered as ANN/KJ/NSF/B &D/S-4, :- 16 -: ITA No.124, 130-131, 164- 170/19 dated 17.12.2013, wherein certain noting were made relating to the sale of plots stated to have been made by the respondent-assessee. Noting were extracted vide page 3 of the assessment order. Based on this noting and statement recorded u/s.133A of the Act from the marketing manager of Arun Hi-tech City, the Assessing Officer inferred that the sale consideration was received over and above what was stated in the registered sale deed which were unaccounted and the same was utilized for the purpose of making fixed deposits of I3,35,00,000/-, whose details were given at page 5 of the assessment order. Accordingly, the Assessing Officer inferred that higher sale consideration of I3,80,000/- per cent was received during the previous year relevant to the assessment year under consideration for sale of 26 cents of land and therefore computed the difference between the sale consideration shown in the books of accounts and the sale consideration adopted at I3,80,000/- per cent and the balance amount was brought to tax as suppressed sale consideration.
21. Being aggrieved, an appeal was preferred before the ld.CIT(A) who vide impugned order held that seized material in the form of noting and scribbling found at the premises of M/s. Nila Sea Foods P. Ltd has no evidential value in the absence of any corroborative evidence. Further, he held that the fixed deposits are made out of :- 17 -: ITA No.124, 130-131, 164- 170/19 accounted income, disclosed, and on the known source of income. Accordingly, he directed the Assessing Officer to delete the addition.
22. Being aggrieved by the order of the ld. CIT(Appeals), the Revenue is in appeal before us in the present appeal. The grounds of appeal No.1 & 5 are general in nature therefore, does not require any adjudication.
23. Ground No.2 challenges the addition on account of unexplained investments. This ground of appeal does not emanate from the orders of the lower authorities. We find that from the assessment order that no addition was made by the Assessing Officer on account of unexplained investments. Thus, grounds of appeal No.2 stands dismissed.
24. Ground No.3 challenges the direction of the ld. CIT(A) to delete the addition made on account of alleged suppressed sale consideration of I63,02,785/-. The ld. CIT-Departmental Representative contented that the seized material found in the form of noting and scribbling constitutes incriminating material and therefore the ld. CIT(A) ought not have deleted the addition. Reliance was placed on the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. T. Rangroopchand Chordia, (2016) 241 Taxman 221.
:- 18 -: ITA No.124, 130-131, 164- 170/19
25. On the other hand, the ld. Authorised Representative placed reliance on the order of the ld. CIT(A).
26. We heard the rival submissions and perused the material on record. The sole basis on which the addition was made on account of alleged suppressed sale consideration is in the form of noting and scribbling seized in the premises of M/s. Nila Sea foods (P) Ltd in which the respondent - assessee is a director and statement recorded from the respondent-assessee and marketing manager of 'Arun Hi-tech City''. When the noting is confronted to the assessee by the Assessing Officer during the search proceedings, respondent-assessee now where stated that these noting represents the suppressed sale consideration. Even from the perusal of the noting extracted at page 3 of the assessment order, we are unable to discern anything which indicates that actual sale consideration received by the respondent- assessee is suppressed nor is there on record to show that Assessing Officer had brought any corroborative evidence. The Hon'ble Supreme Court in the case of P.V. Kalyanasundaram , 294 ITR 49 held that in the absence of any corroborative material, the loose sheets and noting in the diaries does not form basis for making addition. Even from the statement recorded from the director, it is clear that fixed deposits are made out of the known sources of income as it is :- 19 -: ITA No.124, 130-131, 164- 170/19 apparent that fixed deposits are made by debiting the bank account of the assessee and it is not the case of the Assessing Officer that these bank accounts are undisclosed. Thus, the findings of the Assessing Officer that incriminating material in the form of sworn statements from the Director establish the factum receipt of higher consideration on sale of plots is contradictory to the evidence on record. Similarly, the Hon'ble Delhi High Court in the case of Suraj Devi, (supra) had held that primary burden of proof to prove understatement or concealment of income is on the Revenue. Even, the Hon'ble Supreme Court in the case of K.P. Varghese (supra) had laid down the proposition of law that the burden of proving understatement of consideration is always on the Revenue. In the light of the above facts and legal positions, the findings of the ld. CIT(A) that there is no evidence of suppression of sale consideration cannot be faulted and therefore we do not find any reason to interfere with the order of the ld. CIT(A). Accordingly, grounds of appeal No.3 of the Revenue stands dismissed.
27. Ground No.4 challenges the direction of the ld. CIT (A) in allowing development expenditure claimed by the assessee. In the return of income for the assessment year 2013-14, assessee claimed development expenditure of I94,31,500/-. However, the Assessing :- 20 -: ITA No.124, 130-131, 164- 170/19 Officer apportioned the development expenditure to the extent of 28.85 acres of land, which is I3,269/- per cent and the Assessing Officer allowed proportionate expenditure. Whereas it was contended that expenditure was incurred only in respect of 2.358 acres of land which required filing as it was lake and substantial expenditure was incurred during the previous year relevant to the impugned assessment year and 26 cents of land out 2.358 acres of land was sold and therefore a sum of I10,39,944/- was claimed as development expenditure for the assessment year 2013-14 and balance of expenditure shown in the closing stock. Hence, it is submitted that this development expenditure should be allowed as deduction. The ld. CIT(A) after considering the submissions made by the assessee held as follows:-
''4.3.2 I have considered the assessee's submissions carefully. As could be seen from details of computation of income from the sale of plots in A.Y.2013-14, the assessee claimed the developmental expenses of Rs.94,31,500/-, against the land of 2.358 acres of land and not in relation to the entire 28.85 acres of land. Hence the expenses pertain to 2.358 acres only, and accordingly to be apportioned for 2.358 acres. In fact, the assessee in his return of income filed for A.Y.2013-14, claimed only Rs. 10,39,944/- as developmental expenses against the sales of 26 cents sold in the year, and balance of Rs.83,91,556/- was taken to the closing stock of 2.098 acres (i.e. 2.358 acres -- 0.26 acres). Hence the Assessing Officer is not justified in spreading the expenses to the entire land of 28.85 acres of land. The Assessing Officer is directed to allow the developmental expenses as claimed by the assessee in his returns''.
:- 21 -: ITA No.124, 130-131, 164- 170/19 And the finding of the ld. CIT(A) is based on proper appreciation of facts and material on record. We do not find any reason to interfere with the order of the ld. CIT(A). Accordingly, the grounds of appeal No.4 is dismissed.
28. In the result, the appeal of the Revenue in ITA No.169/CHNY/2019, for assessment year 2013-2014 stands dismissed.
29. Now, we take up appeals of the Revenue in ITA Nos.167 and 168/CHNY/2019 for assessment years 2011-12 and 2012-2013 in respect of late Shri. D. Chandran for adjudication.
30. In both the appeals, the Revenue raised following common grounds of appeal.
''1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2. The learned CIT(A) erred in holding that AD relying on the 'unregistered sale agreement', which was not only entered in exceptional circumstances with several riders, but has also not materialized even today and finally given-up, is not justified without appreciating that the remaining 75 cents of land as mentioned in the seized sale agreement from the son of the same Sri.P.Ramaswamy and registered on the same day i.e.,16.09.2010 vide document no. 6881 of 2010. 2.1 The learned CIT(A) ought to have considered the fact that the assessee had claimed that the 25 cents of land was meant for pathway and therefore a higher price was offered, but the said land had not actually been registered, whereas without registering the said piece of land the assessee could :- 22 -: ITA No.124, 130-131, 164- 170/19 not have promoted the land project "Arun High Tech City"
and sold plots in the project in the subsequent years. 2.2 The learned CIT(A) ought to have appreciated the fact that the assessee had maintained duplicate sets of Books of Accounts and hence, excess consideration would have passed to the vendor.
3 The ld.CIT(A) ought to have followed decision of the Hon' Jurisdictional High Court in the case of CIT vs.Rangroop Chand Chordia (241 Taxmann 221) that loose sheets constitute documents u/s.132 of the Act.
3.1 The ld.CIT(A) failed to appreciate that the scribblings found during the course of search u/s.132 are incriminating documents and the assessing Officer has rightly made an addition based on the notings in the seized material and arriving at the sale price accordingly.
3.2 The ld.CIT(A) ought to have appreciated the fact that as per the scribblings the assessee himself has fixed the sale price at Rs.3,80,000/-(13.2.2013) per cent for the AY 13-14 which also seems in consonance with the purchase rate adopted by AO ofRs.60,000 for AY 2008-09, Rs.70,000/- for AY 2009-10, Rs.84,000/- per cent for Asst. Year 2011-12 to 2013-14 and the Assessing Officer has rightly adopted the same.
4. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored''.
31. The grounds of appeal No.1 & 4 are general in nature therefore, does not require any adjudication.
32. Ground No.2 raised by the Revenue in the present grounds of appeal is with regard to unexplained investments made towards purchase of lands. This issue is decided against the Revenue in ITA :- 23 -: ITA No.124, 130-131, 164- 170/19 No.165/CHNY/2019 for assessment year 2009-2010 in respect of late Shri. D. Chandran at para 11 of the impugned order. Accordingly, we dismiss the ground No.2 raised by the Revenue in both the appeals.
33. Ground No.3 challenges the direction of the ld. CIT(A) to delete the addition made on account of alleged sale of land. This issue is also decided against the Revenue in ITA No.169/CHNY/2019 for assessment year 2013-2014 in respect of late Shri. D. Chandran at para 26 of the impugned order. Accordingly, we dismiss the ground No.3 raised by the Revenue in both the appeals.
34. In the result, the appeals of the Revenue in ITA Nos.167 and 168/CHNY/2019, for assessment years 2011-12 and 2012-13 stand dismissed.
35. Now, we take up appeal of the Revenue in ITA No.170/CHNY/2019 for assessment year 2014-15 in respect of late Shri. D. Chandran for adjudication.
36. The Revenue raised the following grounds of appeal:-
''1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2 The ld.CIT(A) erred in deleting the addition made by the assessing officer based on the notebook with scribbling.
2.1 The Id.CIT(A) ought to have followed decision of the Hon' Jurisdictional High Court in the case of CIT :- 24 -: ITA No.124, 130-131, 164- 170/19
vs.Rangroop Chand Chordia (241 Taxmann 221) that loose sheets constitute documents u/s.132 of the Act. 2.2 The ld.CIT(A) failed to appreciate that the scribblings found during the course of search u/s.132 are incriminating documents and the assessing Officer has rightly made an addition based on the notings in the seized material and arriving at the sale price accordingly. 2.3 The ld.CIT(A) ought to have appreciated the fact that as per the scribblings the assessee himself has fixed the sale price at Rs.3,80,000/-(132.2013) per cent for the Asst. Year 13-14 which also seems in consonance with the purchase rate adopted by AO of Rs.60,000 for AY 2008-09, Rs.70,000/- for AY 2009-10, Rs.84,000/- per cent for Asst. Year 2011-12 to 2013-14 and the Assessing Officer has rightly adopted the same.
3. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored''.
37. The grounds of appeal No.1 & 3 are general in nature therefore, does not require any adjudication.
38. Ground No.2 challenges the direction of the ld. CIT(A) to delete the addition made on account of alleged sale of land. This issue is also decided against the Revenue in ITA No.169/CHNY/2019 for assessment year 2013-2014 in respect of late Shri. D. Chandran at para 26 of the impugned order. Accordingly, we dismiss the ground No.2 raised by the Revenue.
:- 25 -: ITA No.124, 130-131, 164-
170/19
39. In the result, the appeal of the Revenue in ITA
No.170/CHNY/2019, for assessment years 2014-15 stands dismissed.
40. To summarize the result, the appeals of the Revenue in ITA Nos.124, 130, 131/CHNY/2019 for assessment years 2010-11, 2011-12 and 2013-2014 in respect of Smt. C. Nilavathay stand dismissed and appeals of the Revenue in respect of late D.Chandran in ITA Nos.164, 165, 166, 167, 168, 169 & 170/CHNY/2019 for assessment years 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 & 2014-2015 are also stand dismissed.
Order pronounced on 31st day of July, 2019, at Chennai.
Sd/- Sd/-
(एन.आर.एस. गणेशन) (इंटूर रामा राव)
(N.R.S. GANESAN) (INTURI RAMA RAO)
या यक सद य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER
चे नई/Chennai
.दनांक/Dated:31st July, 2019.
KV
आदे श क$ & त0ल1प अ2े1षत/Copy to:
1. अपीलाथ#/Appellant 3. आयकर आयु3त (अपील)/CIT(A) 5. 1वभागीय & त न7ध/DR
2. &'यथ#/Respondent 4. आयकर आयु3त/CIT 6. गाड फाईल/GF