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2. That without prejudice, on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the Assessing Officer in relying upon the material seized in the case of search on M/s BPTP group of cases despite:-

i) that such material had no nexus/relevance with the case of the appellant and,

ii) that, the CIT(A) himself holding that such material did not belong to the appellant.

3. That on the facts and circumstances of the case and in law the CIT(A) erred in holding to quote, 'that seized documents definitely prove that interest is paid on PDC' despite-

2. The order of the CIT(A) is erroneous and is not tenable on facts and in law.

3. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal."

3. At the time of hearing the Ld. AR has not pressed ground no. 1, 4 & 5 of the assessee's appeal; therefore, the same are dismissed.

4. The assessing officer analysed few seized material and concluded that assessee is paving unaccounted interest on PDCs given to the seller of land. He also relied upon bank accounts of five sellers of the land to BPTP Group where there is huge cash deposit. The assessee company belongs to the BPTP Group. The BPTP Ltd and its Group companies are engaged in the business of real estate. This group is a leading real estate developer operating all over India but mainly it is working in the NCR area-Faridabad, Gurgaon, and Noida. This group is owned and controlled by Sh. Kabul Chawla. A search & seizure operation was carried out on BPTP Ltd and some of its group companies on 15- 11-2007. During the course of search operation on BPTP group, certain incriminating documents were found and seized. From perusal of these documents and as a result of several posts search inquiries, it was revealed that BPTP group companies had purchased huge tacts of land in different villages of Faridabad such as Kherikhurd, Kherikalan, Budena, Bhatola, etc. The A.O noticed from the seized documents that the group was following a business model as a part of which only part payments of the sale considerations in respect of lands purchased were paid at the time of execution of sale deed and the payment of balance sale consideration was invariably made through post dated cheques (PDCs) and for the intervening period i.e. period between the date of sale deed and the date of encashment of PDC, interest was paid in cash to the vendors of the land by the vendee company on monthly basis @ 1.25% p.m. on the amount of PDC. During the course of post search enquiries, it was noticed that the said payment of interest by the vendee company in cash was not accounted for by it in it's books of accounts. The Assessing Officer relied upon various documents seized from the premise of BPTP Group in support of interest paid. All these documents are part of Assessment Order. The Assessing officer held that it is well within its right to calculate the undisclosed expenditure of the assessee on rational basis. In the present case, this undisclosed expenditure is interest paid on PDCs based on the substantial number of seized document which clearly indicated the modus operandi of the group. Reliance was also placed on the judgement of Hon'ble Supreme Court in the case of H.M. Esufali H.M.Abdulali V/s Commissioner of Sales Tax, Madhya Pradesh 90 1TR 271 ( 1973 ). The A.O further held that the assessee paid interest in cash to the vendor(s) on the amount of PDCs @ 1.25% per month (15% per annum) outside its books of account. Thus, by applying the rate of 1.25% per month on the amount of PDCs for the intervening period i.e. from date of sale deed to date of encashment of PDCs, the total amount of unaccounted interest paid by the assessee company to the vendors, A.O. was computed such interest as under:-

T o t a l Rs. 48,01,436/-

5. Being aggrieved by the assessment order the assessee filed appeal before the CIT (A). The CIT (A) held that the Assessing Officer utilized documents seized from the premies of BPTP and group companies' however the assessment order nowhere mentions that any part of the seized material belong to assessee company. The CIT (A) further observed that the assessee company is one of the group companies of BPTC group and material seized from BPTP Ltd. and other associates company has shown some trend of unaccounted expenditure in form of PDC interest, some finding on additional payment for the acquisition of land. The Ld. DR has also submitted that there is no finding which was given by the Assessing Officer that certain seized material belongs to Assessee Company. The CIT (A) further held that there is no evidence which proves that interest is paid from the date of sale to date of encashment of post dated cheques. However there is concrete evidence in form of seized material to show that interest is paid and received by seller on the extension of PDCs while analyzing the seized document. Therefore in CIT(A)'s opinion wherever the dates of PDCs are extended interest is paid at 15% per annum in cash out of books of accounts. The same is evident from the seized material. The CIT(A) further held that:-

7. The Ld. DR. submitted that the order in case of M/s. Westline Developers Pvt. Ltd. is not applicable in the present case as the said order was related to Section 147 of the Act only and not to that of Section 143(3) of the Act as in the present case. The Ld. DR. however submitted that the interest is paid in cash to the group companies.

8. The Ld. AR in his rejoinder submitted that no interest was received by the assessee and there is no material found.

9. We have heard both the parties and perused all the documents. The CIT (A) clearly mentioned that the assessment order nowhere mentions any part of seized material belonged to Assessee Company, but the seized material is that of associates/group companies of BPTP Group. The assessee is also group company of the BPTP Group. This fact was never denied by the assessee at any point of time. The reliance by the Ld. AR on the order of M/s. Westline Developers Pvt. Ltd. is of no help to the assessee as the distinguishing factor has been pointed out by the Revenue. The present case is regarding Section 143(3) of the Act, thus the facts are different from the ratio laid down in case of Westline Developer Pvt. Ltd.. The CIT (A) has rightly made observations that there is concrete evidence in form of seized material to show that interest is paid and received by seller on the extension of PDCs while analysing the seized documents. The CIT(A)'s order is upheld.