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Acit, Central Circle-2, New Delhi Room No. 323, 3rd Floor, Ara Centre, Jhandewalan Extn., New Delhi Vs. M/s D.J. Infrastructure Dev. Pvt. Ltd., 201, Surya Kiran Building, 19, Kg. Marg, New Delhi
June, 12th 2015
                                                           ITA NO. 1019/Del/2012

                       DELHI BENCH "B", NEW DELHI
                    I.T.A. No. 1019/DEL/2012
                           A.Y. : 2007-08
DELHI                               VS. DEV. PVT. LTD.,
ROOM NO. 323, 3RD
                  FLOOR, ARA              201, SURYA KIRAN
CENTRE,                                   BUILDING,
                                          NEW DELHI
                                          (PAN: AACCD2756K)
(APPELLANT)                                      (RESPONDENT)

        Department by                   :    Sh. SANJAY PRASAD, CIT (DR)
         Assessee by                    :    Sh. ADESH JAIN & AKSHAT JAIN,

                      Date of Hearing : 10-06-2015
                      Date of Order         : 11-06-2015
     Revenue has filed this appeal against the Order dated
10.6.2015    passed by      the   Ld.       Commissioner   of   Income     Tax
(Appeals), III, Delhi pertaining to assessment year 2007-08 on the
following grounds:-

            "1.    On the facts and in the circumstances of the case,
                   the CIT(A) has erred in law and on facts in deleting
                   the addition of Rs. 47,02,750/- made by the AO on
                   account of unexplained expenses in respect of
                   Motia Khan Property.

            2.     On the facts and in the circumstances of the case,
                   the CIT(A) has erred in law and on facts in holding

                                                         ITA NO. 1019/Del/2012

                  that the issue unexplained expenses in respect of
                  Motia Khan Property has been adjudicated upon by
                  the Hon'ble Settlement Commission.

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

           4.     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.

2.    The brief    facts of the   case are that   a search and seizure
action u/s. 132 of the I.T. Act was carried out in the Gopal Zarda
group of cases on 15.1.2009 and during the course of search at the
residential premises of Sh. Ashok Kumar Aggarwal, Director Gopal
Corporation Ltd. at B-6, Kalindi Colony, 3rd floor, Maharani Bagh, New
Delhi certain documents belonging to the assessee were seized. On
the basis of documents so found which belonged to the assessee
company and seized from a person u/s. 132 of the I.T. Act. After
recording the satisfaction note u/s. 153C of the Act, notice u/s. 153C
of the Income Tax Act, 1961 was issued on 21.6.2010 and duly
served upon the assessee requiring it to furnish the true and correct
return of income for the AY 2007-08 within 21 days from the date of
receipt of the notice. The assessee did not file its return of income
within the time stipulated in the notice u/s. 153C.         The return of
income was filed on 13.9.2010 declaring total income at Rs. 15,280/-
Delay in filing of return of income was more than two months.
Earlier assessee had filed his original return of income declaring
same income.       Subsequently notice u/s. 143(2) of the Act dated
14.9.2010 was issued and served upon the assessee. Previously,
notice u/s. 142(1) of the Act dated 28.7.2010 along               with the
questionnaire     were   issued   and   served    upon   the     assessee.

                                                      ITA NO. 1019/Del/2012

Thereafter, during the course of assessment proceedings, the
assessee has been requested to furnish the details as requested
vide notice u/.s 142(1) of the Act.   In response to these notices,
authorized representative attended the assessment proceedings
from time to time and furnished various details. AO noted that the
onus is on the assessee to prove which remains unexplained. After
considering the facts and circumstances of the case, AO made an
addition of Rs. 47,02,750/- on account      of unexplained    source of
expenses u/s. 69C r.w.s. 37 of the Act and completed the
assessment vide order dated 29.12.2010 passed u/s. 153C r.w.s.
143(3) of the I.T. Act, 1961.

3.   Against the     aforesaid assessment order of the        Assessing
Officer, Asseessee appealed before the Ld. First Appellate Authority,
who vide impugned order 15.12.2011 has allowed the appeal of the
assesee and deleted the addition in dispute.

4.   Aggrieved by the aforesaid impugned order dated 15.12.2011,
Revenue is in appeal before the Tribunal.

5.   At the time of hearing Ld. Departmental Representative has
relied upon the order of the Assessing Officer and reiterated on the
contentions raised in the grounds of appeal filed by the Revenue.

6.   On the other hand, Ld. Counsel of the assessee relied upon
the order of the Ld. CIT(A) and submitted that the order of the Ld.
CIT(A) may be upheld.

7.   We have heard both the parties and perused the records
especially the impugned order dated 15.12.2011, we find that AO
has made the addition of Rs. 47,02,750/- to the income of the
assessee on account of unexplained and unaccounted expenses in
the Motia Khan property. During the course of search proceedings

                                                    ITA NO. 1019/Del/2012

u/s. 153C, certain papers annexurized as Page No. 47 of Annexure
A-1 was found. On this paper, details of expenses and payment of
share   premium is mentioned.     The AO contended that since the
Directors of the assessee company has accepted the payment and
receipt of Premium mentioned in Annexure A-1 of the seized
documents therefore the amount of expenses mentioned on Page
NO. 47 of Annexure A-I is also correct. The AO further contended
that during the period under consideration construction of two
properties i.e. Hotel Motia Khan property of the assessee company
and Hotel project in Mehrauli in the name of M/s Penguine Farms
Pvt. Ltd. was in progress.       These lands were purchased in
assessment year 2006-07 and assessment year 2008-09. The plea
of the AO was that since these two project lands were acquired and
hotel projects were launched by the owners of both the companies,
therefore, these expenses were related to both these companies
and thus made addition of Rs. 47,02,750/- (50% of total expenditure
of Rs. 94,05,500/-) each in the hands of the assessee company and
M/s Penguine Farms Pvt. Ltd.

8.    We further find that the Ld. CIT(A) has observed that the crux
of the submission of the assessee dated 13.12.2011 were around
the preposition that the additions made in case of the assessee with
regard to unexplained and undisclosed expenses related to property
at Motia Khan by the AO are covered by the order U/S 2450(4)
passed by the Settlement Commission dated 31.12.2010 therefore
in terms of the Section 245-I of the IT Act the matters which are
covered by the Order of Settlement Commission could neither be re-
opened nor eligible for any further addition under any proceedings
under this Act.

8.1   After perusing of the assessment order, the submissions made
by the assessee as well as the findings given by the Settlement

                                                     ITA NO. 1019/Del/2012

Commission in Order dated 31.12.2010 passed u/s 245D(4) of the IT
Act is of the view that there is no case for addition made by the AO
on account of unexplained and unaccounted expenses with respect
to property at Motia Khan, as made in the assessment order. While it
is true that the assessment order has been passed on 29.12.10 and
therefore the AO was not having the benefit of having the
Settlement Commission Order and finding given therein but then
now as the Order of the Settlement Commission has already been
passed upon consideration      of the   entire   issues   and    having
considered the addition to income with respect to the concerned
properties in respect of the assessee group, therefore in terms of
Section 245-I of the Act the additions made in the assessment order
are rightly been deleted by the Ld. CIT(A). In this connection, Ld.
CIT(A) has referred the relevant portion of Settlement Commission's
Order where a specific finding with reference to which the addition
has been made. The relevant portion of the order of the Ld. CIT(A) is
reproduced as under:-

           "The issue of unexplained and unaccounted expenses on
     account of Property at Motia Khan, as discussed by the
     Assessing Officer in his Assessment Order was already
     considered on Page No. 27 to 31 in the Order of the Income
     Tax Settlement Commission u/s. 245D(4) of the Act dated 31st
     December, 2010. The relevant para 24 of the Order reiterating
     the judgment of Hon'ble Settlement Commission is presented
     hereunder for your kind perusal:

           "We have considered the rival submissions. The issues
           were discussed in detail during the hearing. There is one
           item which is figuring in the statement of      Shri Gopal
           Gupta where he has surrendered Rs. 6.5 crores. Even
           going by the calculation a/premium, the amount comes
                                                      ITA NO. 1019/Del/2012

           to Rs.13.3 crores (1/3rd of Rs.40 crores). The applicants
           have declared more. So the amount of disclosure need
           not be disturbed. Regarding the hand in which this
           amount should be taxed, - Shri Dinesh Jain or Smt. Lata
           Jain - it is immaterial since it would be revenue neutral.
           So we may allow taxing this amount in the hands of Smt.
           Lata Jain. Regarding the year of taxability, the seized
           documents do not indicate any date of receipt of the
           premium. However from the cash flow statement given
           by Smt. Lata Jain and Roshan Agarwal, it is noticed that
           one part of Rs.55 crores was received from Shri Gopal
           Gupta on 08.11.2006. Rs.2.5 crore was received on
           16.4.2007. When questioned why the premium would be
           taxed in A. Y 2008-09, it was replied that the first
           installment was given as advance. Final appropriation
           was made when the shares were actually transferred. In
           the light of explanation given by the applicant no
           interference is being made."

8.2   Keeping in view of the above, it is clear that the Settlement
Commission has not made any further addition in respect to the
Property at Motia Khan, Karol Bagh. The      Settlement Commission
has however made an addition of Rs.5 crores in the hands of both
Pradeep Aggarwal Group and Dinesh Jain group on account of
unexplained transactions (recorded on loose papers which includes
page 47 of Annexure A-I) in respect of the properties brought before
the Settlement Commission and hence any further addition made by
the Assessing Officer would result in a case of double addition.

8.3   In this connection, Ld. CIT(A) has reproduced the relevant para
68 on Page 72 of the Order passed by Hon Settlement Commission
at Page no. 12 of this impugned order which is as under:-

                                                     ITA NO. 1019/Del/2012

       "While going through the seized material, there have been
       indications of several investments of a small amount which
       could not be deciphered. The applicant could not explain these
       notings. It appears that . there were heavy cash transactions
       and applicants had sufficient rolling fund in cash. Taking an
       overall view, we take unexplained cash of Rs. 5 crores in the
       hand of the main applicant of the two groups".
8.4    Keeping in view of the facts and circumstances explained
above, we are of the considered view that the Settlement
Commission has made total addition of Rs.2.5 crores each in the
hands of Dinesh Jain Group and Pardeep Aggarwal Group based on
the aforesaid seized paper at pages 47 of A-I and consequently the
addition of Rs.47,02,750/- made by the Assessing Officer has rightly
been     deleted by the Ld. CIT(A).   Therefore, we do not see any
reason to interfere with the well reasoned order of the Ld. CIT(A),
accordingly, we uphold the same and decide the issue against the
Revenue by dismissing this ground of appeal.

9.   In the result, the Appeal filed by the Revenue stands
       Order pronounced in the Open Court on 11/06/2015.

       Sd/-                                             Sd/-
[J.S. REDDY]                                      [H.S. SIDHU]
ACCOUNTANT MEMBER                              JUDICIAL MEMBER
Date 11/6/2015
Copy forwarded to: -
1.     Appellant -
2.     Respondent -
3.     CIT
4.     CIT (A)
5.     DR, ITAT                  TRUE COPY
                                                 By Order,

                                                 Assistant Registrar,
                                                 ITAT, Delhi Benches

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