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M/s Civitech Housing India (P) Ltd., 65, Shrestha Vihar, Delhi 110 092. Vs. Assistant Commissioner of Income Tax, Central Circle-3, New Delhi.
August, 11th 2014
                                 `B' : NEW DELHI
                    DELHI BENCH `B

                               GARG, JUDICIAL MEMBER

                        ITA No.
                      Assessment Year : 2010-

M/s Civitech Housing India    Vs.    Assistant Commissioner of
(P) Ltd.,                            Income Tax,
65, Shrestha Vihar,                          Circle-3,
                                     Central Circle-
Delhi ­ 110 092.                     New Delhi.
     (Appellant)                         (Respondent)

            Appellant by       :    Shri Akash Garg, Advocate.
            Respondent by      :    Smt. Parwinder Kaur, Sr.DR.


      This appeal by the assessee is directed against the order of
learned CIT(A)-II, New Delhi dated 4th February, 2013 for the AY 2010-

2.    The only ground raised by the assessee reads as under:-

      "That the learned CIT(A) has erred in law and on facts in
      sustaining the addition of Rs.8,16,767 on account of
      discrepancy in cash by holding the explanation of the
      appellant as not reliable."

3.    The facts of the case are that there was a survey under Section
133A of the Income-tax Act, 1961 at the assessee's business premises.
During the course of survey, cash of `15,76,800/- was found while, as
per assessee's books of account, cash balance was only `1,86,124/-.
The assessee was asked to explain the discrepancy in the cash at the
time of survey. Then, it was explained that the cash of `5,73,909/- is
relating to M/s Corporate Realtors P.Ltd.     However, regarding the
                                   2                         ITA-1237/D/2013

balance cash, no satisfactory explanation was given.         During the
course of assessment proceedings, it was claimed by the assessee that
the sum of `8,50,000/- was received as advance against the booking of
flats - the sum of `6,00,000/- from M/s Sridhar Financial Services Ltd.
and `2,50,000/- from Ms. Ridhi Gupta. The Assessing Officer did not
accept the same and made the addition of `8,16,767/- for excess cash
found during the course of survey.         On appeal, learned CIT(A)
considered the issue at length and sustained the addition with the
following finding:-

      "6. Ground 2 of the appeal is considered next. Perusal
      of the facts emanating from the survey and the
      assessment proceedings reveal that cash variation of
      Rs.8,16,767 between cash found at the time of survey and
      the cash books of the appellant company and Corporate
      Realtors P Ltd could not be reconciled.

·         The appellant was required to explain the cash of
      Rs.8,16,767, whereas it has come up with the figure of
·         Even the explanation came after more than two years
      from the date of survey, when in the month of December
      2011, it was claimed that it represented the cash receipts
      of bookings by two parties.
·         It is worth noting that in its explanation of 9/12/2011,
      the appellant claimed to have received cash of Rs.6,00,000
      from Sridhar Financial Services Ltd and Rs.2,50,000 from
      Ridhi Gupta, but in its explanation of 20/12/2011, cash of
      Rs.6,00,000 was claimed to have been received from Ridhi
      Gupta and Rs.2,50,000 from Sridhar Financial Services Ltd.
·         The one page allotment letter enclosed with the
      explanation also does not match the 17 page specimen
      allotment letter filed by the appellant before the AO as per
      letter dated 29/11/2011, which comprises of the allotment
      agreement, declaration and signature of the allottee and
      the witnesses, unit and price detail and the payment plan.
·         There is no ring of truth in the explanation filed by the
      appellant since there is no independent corroborative
      evidence to establish even the possibility of such an
      aborted transaction as the appellant would like the tax
      authorities to believe. It is noted that as per clause 2 of
      the terms and conditions of the specimen allotment, the
      appellant company alone has the `right' to cancel the
                                  3                         ITA-1237/D/2013

     allotment agreement in the event of delay or failure in
     payment of instalment, which would result in forfeiture of
     the entire earnest money deposited by the allottee, leaving
     no right or lien with the allottee to the unit booked. The
     clause also states that the sum paid over and above the
     registration money would be refunded. However, the
     appellant has not given any explanation in respect of the
     `earnest money' or `registration money' with regard to
     Ridhi Gupta and Sridhar Financial Services Ltd or the
     circumstances in which the booking was `cancelled' and
     the entire amount `refunded' by it.
·        Since squaring up of accounts is not an evidence of
     genuineness of the transaction, in the case at hand also,
     cheque payment to Ridhi Gupta and Sridhar Financial
     Services Ltd. does not explain the cash of Rs.8,16,767
     found at the time of survey.
·        The appellant cannot seek shelter behind Jai Prakash
     Gupta, the other Director, and father of Subodh Goel, who
     is the managing director of the appellant company and
     hence in complete control of the affairs of the appellant
     company. Also, the fact that Jai Prakash Gupta and Subodh
     Goel are father and son and living jointly, there is no
     reason to believe that Subodh Goel would be unaware of
     the financial affairs of the company.
·        But a major discrepancy found in the submissions of the
     appellant establishes beyond doubt that there is no truth in
     the explanation offered by the appellant. It is seen from
     the details of commission payment submitted by the
     appellant as per its letter dated 29/11/2011 that a property
     consultant by the name of Rashtriya Properties, G-9, plot
     no.3, Pankaj Plaza II, KKD, Community Centre, Delhi
     110092 raised a bill of Rs.1,16,918 as commission in
     respect of sale of flat no.706, tower 6 as per bill dated
     13/1/2010, the very flat in respect of which the appellant is
     claiming to have cancelled the booking.

     Under the circumstances, the explanation of the appellant
     with regard to Rs.8,16,767 is not reliable and deserves to
     be rejected. The AO was justified in concluding that the
     explanation offered by the appellant was an afterthought.
     Therefore, ground 2 of the appeal is dismissed."

The assessee, aggrieved with the order of learned CIT(A), is in appeal
before us.
                                    4                           ITA-1237/D/2013

4.    We have considered the submissions of both the sides and
perused relevant material placed before us. The learned counsel for
the assessee argued at length. However, he was unable to rebut the
finding recorded by the learned CIT(A). During the course of survey,
no explanation was given for excess cash found at `8,16,767/-. During
the course of assessment proceedings, the assessee claimed to have
received the advance against the sale of flats to two parties but could
not explain how and why both the bookings were cancelled and the
entire amount was refunded. The CIT(A) has also recorded the finding
that even before booking, the said flats were sold to third parties for
which the assessee has paid the commission also to the broker who
effected the sales.      In view of these facts, we do not find any
justification to interfere with the finding of fact recorded by the CIT(A)
which remains uncontroverted before us.       We, therefore, uphold the
order of learned CIT(A) and dismiss the appeal filed by the assessee.

5.    In the result, the appeal of the assessee is dismissed.
      Decision pronounced in the open Court on 8th August, 2014.

                  Sd/-                                  Sd/-
     (CHANDRA MOHAN GARG)                             AGRAWAL)
                                                (G.D. AGRAWAL)
        JUDICIAL MEMBER                         VICE PRESIDENT

Dated : 08.08.2014

Copy forwarded to: -

1.    Appellant    : M/s Civitech Housing India (P) Ltd.,
                  65, Shrestha Vihar, Delhi ­ 110 092.

2.    Respondent : Assistant Commissioner of Income Tax,
                         Circle-3, New Delhi.
                Central Circle-
3.    CIT
4.    CIT(A)
5.    DR, ITAT

                              Assistant Registrar
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