"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1336/DEL/2021 (Assessment Year: 2016-17) ITA No.1349/DEL/2021 (Assessment Year: 2017-18) DCIT, Central Circle, vs. Solitaire Realinfra Pvt. Ltd., Ghaziabad. Sector 25, Jaypee Greens Sports City in front of Buddha Circuit, Noida – 110 065 (Uttar Pradesh). (PAN :AACCH4156K) ITA No.1193/DEL/2021 (Assessment Year: 2017-18) Solitaire Realinfra Pvt. Ltd., vs. DCIT, Central Circle, Sector 25, Jaypee Greens Sports City Ghaziabad. in front of Buddha Circuit, Noida – 110 065 (Uttar Pradesh). (PAN : AACCH4156K) (APPELLANT) (RESPONDENT) ASSESSEE BY : Dr. Rakesh Gupta, Advocate Shri Somil Agarwal, Advocate REVENUE BY : Shri Dayainder Singh Sidhu, CIT DR Date of Hearing : 07.05.2025 Date of Order : 13.06.2025 O R D E R 2 ITA Nos.1336, 1349 & 1193/DEL/2021 PER S.RIFAUR RAHMAN,ACCOUNTANT MEMBER : 1. The Revenue has filed appeal against the order of ld. Commissioner of Income-tax Appeals, Kanpur-4[hereinafter referred to as ‘ld. CIT (A)] dated 14.07.2021 for Assessment Year2016-17. The Revenue and assessee has also filed cross appeals against the order of ld. CIT (A), Kanpur-4 dated 14.07.2021 for Assessment Year 2017-18. 2. Since the issues are common and the appeals are connected, therefore, the same are heard together and being disposed off by this common order. We take up Revenue’s appeal being ITA No.1336/Del/2021as lead case. 3. The Revenue has taken the following grounds of appeal in ITA No.1336/Del/2021for AY 2016-17:- “1. On facts and circumstances of the case and in law. the Ld. CITAL erred in deleting the addition made by AO to the tune of Rs.35,82,559/- on account of \"On Money” as the assessee has given huge amount of discount on sale of two flats and now the assessee has denied stating that these flats does not pertains to him. The order of Ld. CIT (A) is not acceptable as the addition was made on the basis of document seized from the premise of the assessee and the assessee could not offer any explanation during the course of assessment proceedings. The assessee has taken plea before Ld. CIT(A) that one of property belong to M/s. Pary Developers (P) Ltd. and stated that the assessee company has sold the development right to M/s Pary Developers (P) Ltd. However, no such agreement was submitted by the assessee company and moreover the addition was made on the basis of document which was found from the premise of the assessee. 2. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO to the tune of Rs.3,00,000/- on account of \"on Money as the same was received by the assessee in cash and the same was not taken into account. The addition was made on the basis of the document and from the perusal of the document, it was clear that the assessee has taken Rs.3,00,000/- in cash and now the assessee has out rightly refused that the project for which the money was taken did not relates to him. 3. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO to the tune of Rs.48,11,600/- on account of inflation of purchases as the assessee has raised bill twice on the delivery of trucks 3 ITA Nos.1336, 1349 & 1193/DEL/2021 of cements. Further, the purchases were made by M/s Jyoti Buildtech Pvt Ltd to which the assessee had subcontracted a project. However, no agreement was furnished and the assessee cannot claim purchases made by third party. 4. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by AO to the tune of Rs.2,32,00,000 /- on account of unsecured loans as the assessee has failed to substantiate the genuineness of loans along-with creditworthiness of the lenders. 5. On facts and circumstances of the case and in law, the Ld. CIT(A) also erred in deleting the addition made by AO to the tune of Rs.40,66,669/- made on account of unverifiable expenses made as \"Other Expenses\" as the assessee has failed to substantiate the expenses and produce its books of accounts for verification. 6. On facts and circumstances of the case and in law, the CITA) failed to allude to the relevant facts & circumstances and misread the facts to arrive at the conclusion.” 4. With regard to Ground No.1, ld. DR of the Revenue brought to our notice relevant facts from the assessment order are, a search and seizure operation under section 132 of the Income-tax Act, 1961 (for short ‘the Act) was conducted on 03.11.2016 at the premises of the assessee comprising M/s. VVIP & SSG Group of cases, at the premises of the assessee at Sector 25, Jaypee Greens Sport City, In front of Buddha Circuit, Noida. The cases were centralized and notices u/s 153A of the Act were issued and served on the assessee. In response, assessee filed its return of income on 16.10.2018 declaring total income of Rs.19,30,590/-. Subsequently, notices u/s 143(2) and 142(1) were issued and served on the assessee. 5. During search proceedings, certain documents and hard-disk were found and seized. From the Hard-Disk, the AO extracted the allotment letters relating to Villa No.C-12, measuring 1740 sq.ft. and flat measuring 4350 sq.fit. in 4 ITA Nos.1336, 1349 & 1193/DEL/2021 Solitarian City booked by Shri Ajay Gupta. He submitted that the AO has reproduced the allotment letter in the assessment order itself and he brought to our notice findings of the AO that assessee has given discount @ 14.84% on both the properties and the discount allowed to the extent of Rs.35,82,559/-. He submitted that the same cannot be verified/examined and reconciled from the books of account submitted by the assessee. The AO came to the conclusion that total discount offered by the assessee is nothing but on-money generated by the assessee by taking cash. Accordingly, AO proceeded to make the addition. 6. Aggrieved assessee preferred an appeal before the ld. CIT (A) and ld. DR brought to our notice detailed submissions submitted by the assessee before the ld. CIT(A). After considering the detailed submissions, he submitted that ld. CIT (A) deleted the addition made by the AO with the observation that AO made the addition on the basis of presumption and there is no evidence in support of such contention and further, he gave the benefit to the assessee that no incriminating material was found or seized in the course of search. He also submitted that the Unit No.S1-001 was not related to the assessee company and it belongs to third party. He objected to the above observations of the ld. CIT (A) and submitted that the ld. CIT (A) over-looked the fact that the assessee has offered such huge discount on sale of flat which is not the 5 ITA Nos.1336, 1349 & 1193/DEL/2021 norm of the business practice. This is nothing but on-money and he relied on the findings of the AO. 7. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 11-12 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 2-3, 5 & 9-10 of the appellate order. It is respectfully submitted that as regards the Unit-C-12 (Villa), in respect of which a very high discount is alleged to have been allowed, it is submitted that the said unit was never sold/booked. That the same is verifiable from the books of account of the appellant, complete soft copy whereof was available with the Id. AO and also from the list of the bookings furnished in the course of the assessment proceedings. Therefore, there is no question of any discount having been allowed. That as regards Unit-S1-001, (against which addition of Rs.2162559.00 has been made), it may be submitted that the same never belonged to the assessee and was not even being developed by the appellant. That the said unit was being developed by M/s Pary Developers (P) Ltd and this fact is also evident from the alleged document reproduced at page 4 of the assessment order, wherein the name of Pary Developers (P) Ltd. being the recipient and seller is duly mentioned. Without prejudice to above, it is submitted that there is no evidence of any on- money and in the absence of any finding, it cannot be presumed that the discount mentioned on the allotment letters represented on-money. In view of this the ground of appeal of revenue deserves to be dismissed and may please be so held.” 8. Considered the rival submissions and material placed on record. We observed that the AO has extracted two allotment letters given to Ajay Gupta for sale of two properties and as per the allotment letter, the assessee has offered discount of 14.84% and so allotted the property by freezing the net price of Rs.81.50 lakhs. With regard to other property S-1-001, the AO also treated the discount offered by the assessee as on-money. However, it is brought to our notice that the said property was sold by Pary Developers (P) 6 ITA Nos.1336, 1349 & 1193/DEL/2021 Limited and its transaction is not related to the assessee. Coming to the discounts offered to the assessee in Villa No.C-12, we also observed that it is a contract between the buyer and the allottee, the price agreed between them are final price and how the final price is arrived is part of the contract and there is no material brought on record by the AO to show that the assessee has in fact received the discount money as on-money. Therefore, we are inclined to agree with the findings of the ld. CIT (A). Accordingly, ground no.1 raised by the Revenue is dismissed. 9. With regard to Ground No.2, the relevant facts brought on record by the ld. DR of the Revenue from the assessment order, during the course of search, hard-disk was found and seized. From the hard-disk, a sheet was extracted which is reproduced by the AO at page 6 of the assessment order and the AO observed that assessee has received cash payment of Rs.3 lakhs against its Unit No.D-201 and A-502 during the year under consideration. When the assessee was asked to explain the above transaction, in response assessee has filed copy of ledgers, however not filed the receipt of the purchaser. By relying on the excel sheet extracted from the hard-disk, he came to the conclusion that assessee has received Rs.3 lakhs in cash as on-money. Accordingly, he proceeded to make the addition. 10. Ld. DR further brought to our notice findings of the ld. CIT (A) who has deleted the addition by observing that it is also presumption of the AO and 7 ITA Nos.1336, 1349 & 1193/DEL/2021 who has made the addition based on the material found during search. The AO made the addition after giving proper opportunity to the assessee. However, assessee failed to submit the relevant supporting documents. 11. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 13-14 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 3, 6 & 13 of the appellate order. It is respectfully submitted that the Project Solitarian Estate was being developed by M/s Solitarian Buildinfra (P) Ltd a group concern of the appellant, whose cases were also centralized with the office of the Ld. AO. That copy of the Project Brochure is also submitted. It may also be submitted that the entire amount mentioned in the alleged seized document formed part of the regular books of account of M/s Solitarian Buildinfra (P) Ltd. The said party had also paid applicable service tax on the amounts mentioned in the sheet. In view of this the ground of appeal of revenue may please be dismissed and may please be so held.” 12. Considered the rival submissions and material placed on record. We observed that the AO has made the addition based on the excel sheet found in the hard-disk during search. The AO observed that there is a transaction of Rs.3 lakhs recorded against Flat No.D-201 and A-502. After considering the findings of the ld. CIT (A) and submissions of the ld. AR of the assessee, it is brought to our notice that the entire transfer referred by the AO relates to Solitairian Buildinfra (P) Ltd. and it is not related to the assessee. It is submitted that Solitairian Buildinfra (P) Ltd. has recorded the abvoesaid transaction in its books of account and also paid applicable service-tax on the abovesaid amount. Since the above transaction is not related to the assessee, 8 ITA Nos.1336, 1349 & 1193/DEL/2021 therefore, we do not see any reason to disturb the findings of the ld. CIT(A). Accordingly, Ground No.2 raised by the Revenue is dismissed. 13. With regard to Ground No.3 raised by the Revenue, ld. DR of the Revenue brought to our notice relevant facts from the assessment order, during the search proceedings at the office premises of the assessee, some loose papers were found and the relevant annexures were reproduced at pages 7 to 10 of the assessment order. Ld. DR brought to our notice findings of the AO that the above pages indicate that a single vehicle delivers so much of quantity at the same time. The AO discussed the discrepancies in the assessment order that Sl.No.840 and 841 in page 2 dated 01.10,2015 and it was shown to have delivered 780 bags and 620 bags of cement from the same vehicle. The AO observed that it is not practically possible for vehicle to load such quantity and same bags and deliver at the same time. Ld. DR submitted that the AO has rejected the explanation of the assessee that the items of two different challans and invoices were loaded on the truck at the same time as the capacity of the truck is more. He also brought to our notice a detailed chart prepared by the AO which is reproduced at page 12 of the assessment order. By referring to the above, AO treated the abovesaid quantity of 20920 bags of cements were nothing but inflated purchases and recorded to reduce the net profit declared by the assessee in the books of account. Accordingly, he made the addition. 9 ITA Nos.1336, 1349 & 1193/DEL/2021 14. Further, ld. DR of the Revenue brought to our notice findings of the ld. CIT(A) that the purchase of construction material like cements, vehicle wise details were found in the ledger of purchases were purchased by the third party contractor i.e. Jyoti Buildtech Private Limited who was working on the assessee’s site and further ld. CIT (A) gave the relief to the assessee on the basis that the material receipts were supported by proper excise tax invoices, transporter GRs and material receipt notes drawn at site, where all the invoices were in the name of the said contractor. He submitted that ld. CIT(A) has deleted the addition based on the information submitted by the assessee without giving any opportunity to the AO. 15. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 16-17 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 3-4, 6 & 15 of the appellate order. It is submitted that the purchases were not made by the appellant at all and were therefore never claimed as expenditure by the appellant. Therefore, by no stretch of imagination could any disallowance have been made in the appellant's case in respect of the same. Further, the appellant had given a sub contract to another company for some construction work at its site, and the cement had being unloaded at the appellant's premises on behalf of the said sub-contractor. The same is also evident from the fact that the cement bills were neither in the appellant’s name nor the same formed part of the appellant's accounts. Further, the copies of the bills, along with GRs issued by the transporter, and the material inward notes are also submitted. In view of this the ground of appeal of revenue may please be dismissed and may please be so held.” 16. Considered the rival submissions and material placed on record. After considering the assessment order and findings of the ld. CIT (A), we 10 ITA Nos.1336, 1349 & 1193/DEL/2021 observed that the AO has considered the transportation details of cement bags in the purchase ledger and found that such huge quantities cannot be delivered on the same vehicle and he treated all the purchases relating to the assessee as bogus. Whereas it is brought to our notice that all the purchases were belonged to the sub-contractors, namely, Jyoti Buildtech Private Limited and none of the purchases were recorded by the assessee as their own purchases. It is also brought to our notice that all these invoices were routed through excise office and transport receipts were supported by delivery of such quantities in the place of sub-contractors. Since these purchases are not recorded in the books of account of the assessee, the allegation of bogus transaction is not proved. It is only a suspicion and presumption of the Assessing Officer. Accordingly, ground no.3 raised by the Revenue is dismissed. 17. With regard to Ground No.4, ld. DR of the Revenue brought to our notice relevant facts from the assessment order, during assessment proceedings, the AO observed that the assessee has taken loan of Rs.10,88,13,314/-. When the assessee was asked to furnish the complete names and postal addresses, confirmation, copy of ITR and relevant bank statements from whom assessee has taken unsecured loan and also asked to justify the genuineness of the transaction. In response, assessee has submitted the details of the parties, PAN numbers, amount received etc. After considering the above 11 ITA Nos.1336, 1349 & 1193/DEL/2021 submissions, the AO observed that the assessee has taken loan from various parties but assessee has submitted details from seven parties, it has submitted only details, but assessee has not submitted any confirmation or not submitted any papers relating to these transactions and the total of loans from abovesaid seven parties amounts to Rs.2,32,00,000/-. Since assessee has not submitted any details the AO proceeded to make the abovesaid addition u/s 68 of the Act and observed that onus lies on the assessee to explain the nature and sources of any sum credited in its books of account. Since there is no material submitted by the assessee, he proceeded to make the addition u/s 68 of the Act to the extent of Rs.2,32,00,000/-. 18. Aggrieved assessee preferred an appeal before the ld. CIT (A) and submitted the detailed submissions. After considering the detailed submissions and also additional evidences submitted before him, ld. CIT (A) remanded the additional evidences to the AO. The AO submitted the remand report which is reproduced at page 20 of the appellate order wherein AO has rejected various details submitted by the assessee by observing that assessee has not submitted any cogent evidence regarding the above mentioned loans and he rejected the same. Ld. DR submitted that ld. CIT (A) observed in remand report that the AO has not verified the documents submitted by the assessee and the AO has not contradicted or raised any objection with regard to any of the documents submitted by the assessee. With the above observation, ld. 12 ITA Nos.1336, 1349 & 1193/DEL/2021 CIT (A) observed that the addition made by the AO has no relevance to any incriminating material found during search, the assessee has submitted complete details of the lenders including their names, addresses and PAN numbers and he observed that all these seven parties were duly incorporated companies. Since the AO has not made any independent enquiry with respect to abovesaid seven parties and further observed that these parties have submitted confirmations and also assessee has paid the interest expenditures and claimed the same as business expenditures even the AO allowed the same. With regard to above, ld. DR objected to the deletion of abovesaid unsecured loans and submitted that he relied on the findings of the AO who has given several opportunities to the assessee during assessment proceedings and assessee has not submitted any cogent material before the AO. 19. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on page 21 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 4, 6 & 17-19 of the appellate order. It is respectfully submitted that the identity of the lenders was proved beyond doubt, the amount having been received through online fund transfer from the same company into the regular bank account of the appellant and was classified as a loan in its audited financial statements and almost 50% of the loans had also been duly repaid in the succeeding year itself. That none of the submissions of the appellant were found to be false or erroneous. Therefore, no addition could be made. That the appellant was not even required, in terms of the express provisions of the Act for the impugned year, to prove the source of source of the said amount since the said condition is applicable only in respect of share application money, which is specified under the proviso to section 68 itself. That as is evident from the above, all the loans were from companies being artificial judicial persons, whose addresses and financial statements are available in the public domain and whose PANs were also available with the Ld. AO. 13 ITA Nos.1336, 1349 & 1193/DEL/2021 In view of this the ground of appeal of revenue may please be dismissed and may please be so held.” 20. Considered the rival submissions and material placed on record. We observed that the assessee has taken huge unsecured loan from various parties to the extent of Rs.10.88 crores and assessee has submitted all the relevant details before the AO except seven parties during assessment proceedings. However, assessee has submitted additional evidences at the time of appellate proceedings and the same was remanded back to the AO. The AO in remand report has not verified the details which were submitted by the assessee, in our considered view, all these details submitted by the assessee are similar to the details submitted for other unsecured loans which were submitted before the AO and the AO has duly accepted the same. The documents submitted by the assessee are exactly similar to the other loans which were accepted by the AO but failed to verify as proper. Since the similar documents were submitted during remand proceedings, AO failed to verify the same. We observed that ld. CIT (A) has considered the documents submitted before him and clearly observed that the assessee has submitted the relevant information and also the AO has not alleged the relevant interest expenditure claimed by the assessee and accepted them. Further all these parties have already submitted the confirmations and also lenders are duly incorporated entities. Therefore, there is no room for any doubt of receipt of unsecured loan by the assessee. The assessee has proved the identity, 14 ITA Nos.1336, 1349 & 1193/DEL/2021 creditworthiness and genuineness of the unsecured loans. Accordingly, we do not see any reason to disturb the findings of the ld. CIT (A) and ground no.4 is dismissed. 21. With regard to Ground No.5 raised by the Revenue, ld. DR of the Revenue brought to our notice relevant facts from the assessment order, during assessment proceedings, AO observed that assessee has claimed expenses under the head ‘other expenses’ and ‘administrative expenses’ to the extent of Rs.4,32,29,427/-. Vide questionnaire dated 28.09.2018, assessee was asked to furnish the details of expenses debited to the Profit & Loss Account having value of more than Rs.10 lakhs. The AO observed that assessee has not submitted any details regarding the abovesaid expenditure and he observed from the expenses claimed by the assessee that there are interest expenditure as penalty and late filing of service tax were claimed by the assessee which are in the nature of penal interest. Therefore, he disallowed to the extent of Rs.26,62,735/- claimed by the assessee as penal charges and also proceeded to disallow 10% of the remaining expenditure to the tune of Rs.40,66,669/- and he proceeded to disallow the same to the extent of Rs.67,29,404/-. 22. Ld. DR of the Revenue also brought to our notice findings of the ld. CIT(A) at page 23 of the appellate order wherein ld. CIT (A) has deleted the penalty charges with the observation that these are of penal interest and not penalty 15 ITA Nos.1336, 1349 & 1193/DEL/2021 by relying on the decision of Lachmandas Mathura vs. CIT reported in 254 ITR 799 and further submitted that ld. CIT (A) deleted the ad hoc disallowance. Ld. DR objected to the deletion of the above disallowance in absence of any detailed submission from the assessee’s side and he prayed that the addition made by the AO may be sustained. 23. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 26-28 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 5, 7 & 23-25 of the appellate order. It is respectfully submitted that the books of account of the appellant are audited under the Companies Act as well as the Income Tax Act and the Books of account have also not been rejected by the Ld. AO. It may be submitted that all the expenses were fully verifiable and supported by proper bills/vouchers and no disallowance was called for. That the Ld. AO also failed to appreciate that the expenses included several expenses of a statutory nature eg. Audit Fees, ROC fee etc. which did not call for any disallowance at all. However, the Ld. AO did not point out any particular expense which he found as unverifiable and also did not call for any vouchers/bills in particular. Therefore, the addition was made in an adhoc manner and without any basis, material or evidence and is therefore bad in law. In view of this the ground of appeal of revenue may please be dismissed and may please be so held.” 24. Considered the rival submissions and material available on record. We observed that the AO has asked the assessee to submit information on sample basis for the transactions value of Rs.10 lakhs or more. Since the assessee has not submitted any details, he proceeded to make ad hoc disallowance of 10%. We observed that the assessee has claimed expenditure duly audited in its books of account and if required the AO could have verified the details and there is no room for disallowance on ad hoc basis without bringing on 16 ITA Nos.1336, 1349 & 1193/DEL/2021 record the actual basis of disallowance and relevant reasons by duly verification by giving further opportunity to the assessee. In the given case, the AO has merely disallowed the same by observing that assessee has not submitted any details and further this is an assessment concluded u/s 153 of the Act and no disallowance can be made without there being any incriminating material found during search. Therefore, we do not see any reason to disturb the finding of the ld. CIT (A) and accordingly, ground no.5 raised by the Revenue is dismissed. 25. Ground No.6 is general in nature and does not require any adjudication. 26. In the result, the appeal filed by the Revenue for AY 2016-17 is dismissed. 27. Now we take up Revenue’s appeal for AY 2017-18 where Revenue has raised the following grounds of appeal :- “1. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO to the tune of Rs.4,15,01,981/- found during the course of search proceedings and he assessee has failed to offer any explanation neither at the time of search proceedings nor at the time of assessment proceedings. 2. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO to the tune of Rs.25,25,000/-as the addition was made on the basis of the document and from the perusal of the document, it was clear that the assessee has given huge discount to and the same has been received back in cash to generate the cash. 3. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO to the tune of Rs.75,45,059/- as total addition of Rs.2,59,88,537/- was made but the Ld. CIT (A) has shifted an amount of Rs.75,45,059/- in the case of Pary Developers Pvt. Ltd. whereas the paper was found from the premise of the assessee. 4. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO to the tune of Rs.42,74,27,287 made on account 17 ITA Nos.1336, 1349 & 1193/DEL/2021 of “On Money\" received in cash for booking of facts as was evident from the document found from the premise of the assessee. 5. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO to the tune of Rs.1,48,00,000/- on account of unsecured loans as the assessee has failed to substantiate the genuineness of loans along with creditworthiness of the lenders 6. On facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition made by AO as per provision of section 2(22)(e) of the Act as the director of the assessee company had substantial interest in the companies from which it has taken loans to the tune of Rs.6,21,30,000/-. 7. On facts and circumstances of the case and in law, the Ld. CIT(A) also erred in deleting the addition made by AO to the tune of Rs.39,68,502/- made on account of unverifiable expenses made as \"Other Expenses\" as the assessee has failed to substantiate the expenses. 8. On facts and circumstances of the case and in law, the CITIA) failed to allude to the relevant facts & circumstances and misread the facts to arrive at the conclusion.” 28. At the time of hearing, ld. DR of the Revenue submitted the relevant facts from the assessment order ground-wise. 29. With regard to Ground No.1, ld. DR submitted that during the course of search proceedings, It is found that cash-in-hand to the extent of Rs.4,15,01,981/- was mentioned in the trial balance of the company. However, there was no cash found at the premises. During the course of post-search enquiry, the Director of the assessee company stated that the abovesaid cash were given to the officers of the assessee company which were later on collected and deposited in the bank on 15.11.2016. The AO observed that the company has not produced any persons to whom abovesaid cash have been given. Further the assessee no doubt agreed that this cash were not lying at the office premises. However, the same was with the other 18 ITA Nos.1336, 1349 & 1193/DEL/2021 office staff for day-to-day expenses like for payment of drivers, supervisors, field man and engineers at site incharge. After considering the reply of the assessee, the AO found that the abovesaid explanation is not acceptable. Accordingly, he proceeded to make the abovesaid cash as shortage of cash u/s 68 of the Act. 30. Further ld. DR brought to our notice findings of the ld. CIT (A) at page 14 and 15 of the appellate order and ld. CIT (A) deleted the same by observing as under :- “The Assessment order passed by the AO, the Written Submissions filed by the appellant, the remand report sent by the A.O and the Rejoinder of the appellant have been considered. The AO has made this addition on the basis that no cash was found at the office premises during the course of search and as the cash in hand as per the books of accounts was Rs.41501981/- the same be added in the Income of the appellant under section 68. As per the explanations of the appellant the appellant is engaged in contractual work and the payments and cash are required at site and not at the office and there was no search at the various sites where the work was going on The appellant has also contended that the addition has been made u/s 68 which is an addition on account of unexplained credits, whereas the cash in hand as per the books of accounts is a debit balance. Further no addition can be made on account of shortage of cash, available as per books of account and not found at the premises of the search. The AO has not disturbed the cash book showing that certain cash is entered which is incorrect or unexplained, nor has AO given the name of the party of whose identity, genuineness of creditworthiness is required to be proved for the purposes of addition u/s 68 to 69D. The reply of the appellant was sent for remand report on all the grounds and the AO has stated that the appellant's version that cash was lying with different persons is an afterthought. It has been further stated by the appellant that the date of search was 3/11/2016 and subsequently on 8/11/2016 demonetization was announced by the Government for discontinuance of the Notes of Rs.500 and Rs.1000 denomination. The appellant had collected cash from various sites and persons and deposited an amount of Rs.4,00,00,000/- in the Indian Overseas bank on 15.11.2016 (Rs.2,45,00,000,00) and 16.11.2016(Rs.1,55,00,000.00) the copy of bank statement has been submitted and also the cash book for the relevant dates. The AO has accepted the cash book and the books of accounts during the course of assessment and just after 12 days of 19 ITA Nos.1336, 1349 & 1193/DEL/2021 search the entire shortage of cash found during the course of search has been deposited by the appellant in the bank. Therefore, the AO's version in the remand report that the cash stated to be lying at various sites and employees as an imprest, is an afterthought cannot be accepted. In view of the above facts and the fact that the provisions of section 69C are not attracted in such cases, the addition of Rs.4,15,01,981/- is hereby deleted as the same is incorrect in fact as well in law.” Ld. DR objected to deletion of cash and he vehemently supported the findings of the Assessing Officer. 31. On the other hand, ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 14-15 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 2-3, 8 & 12-13 of the appellate order. It is respectfully submitted that during the course of the assessment proceedings it was explained that the appellant's business activity requires its staff to maintain some cash balance at each of the sites for making payments to labourers and other expenses relating to construction that have to be paid immediately and therefore the cash balance as per the books of account also included the cash which was with the staff at the sites, at the relevant point of time. That subsequently, upon announcement of demonetization of currency notes of Rs. 1000/-and Rs. 500/- w.e.f. the midnight of 08.11.2016, the appellant collected back all the cash from the various staff/sites and deposited a sum of Rs.4 crores, being the demonetized currency out of the total cash balance, in its regular bank account. Therefore, the explanation offered by the appellant was fully supported by the fact that cash was deposited within 1 week from the date of the Search u/s 132. That the Ld. A O accepted the cash book of the appellant and also the cash deposited in the bank account. In view of this the ground of appeal of revenue may please be dismissed and may please be so held.” 32. Considered the rival submissions and material placed on record. We observed that the assessee has deposited the abovesaid cash during demonetization period and the search was conducted on 03.11.2016. Therefore, the cash declared by the assessee in its books of account were 20 ITA Nos.1336, 1349 & 1193/DEL/2021 redeposited within a week from the date of search. It demonstrates that cash held by the assessee at different sites are found to be genuine and assessee has collected cash held by it at different sites redeposited the same within seven days of search conducted at the premises of the assessee. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A) and accordingly, ground no.1 raised by the Revenue is dismissed. 33. With regard to Ground No.2, ld. DR of the Revenue brought to our notice discount offered by the assessee to Ajay Gupta and the relevant facts which are exactly similar to the facts dealt in Ground No.1 in AY 2016-17 and we have already considered the similar issue in Ground No.1 of the Department’s Appeal in AY 2016-17. Since the facts are exactly similar to the same, he relied on the submissions made in AY 2016-17. 34. Since the issue involved is exactly similar to the AY 2016-17, even ld. AR of the assessee relied on the similar submissions. 35. Considered the rival submissions and material available on record. Since the facts are exactly similar to Ground No.1 in AY 2016-17 our above findings in Ground No.1 in AY 2016-17are applicable mutatis mutandis in Ground No.2 in AY 2017-18. Accordingly, Ground No.2 of AY2017-18 is dismissed. 36. With regard to Ground No.3 of Revenue’s appeal and Ground Nos.9 to 13 of the assessee’s appeal, ld. DR brought to our notice page 12 of the assessment order and submitted that during search proceedings at the premises of 21 ITA Nos.1336, 1349 & 1193/DEL/2021 assessee, certain incriminating material found in the form of hard-disk and from the excel sheet extracted from the same show that assessee has indulged in recording two types of booking, one was clear booking and other was booking through vouchers. The second table shows the receipt through vouchers. When the assessee was confronted with the above information, the assessee has not explained satisfactorily nor produced any documentary evidences. In absence of any explanation or details submitted by the assessee, the AO proceeded to make the addition u/s 69 of the Act to the extent of Rs.2,59,88,537/-. 37. Ld. DR of the Revenue brought to our notice page 33 of the appellate order and he objected to the relief granted to the assessee to the extent of Rs.75,45,059/- with the observation that these books were related to Pary Developers Pvt. Ltd. He submitted that these documents were found at the premises of the assessee, therefore, addition should have been sustained in the hands of the assessee. With regard to sustenance of part addition of Rs.1,84,73,478/-, he relied on the findings of the lower authorities. 38. On the other hand, ld. AR of the assessee submitted with regard to sustenance of part addition and deletion of addition as under :- “Ground No. 3 of the Departmental appeal & Ground Nos. 9-13 of the assessee’s appeal: These grounds relate to the total addition of Rs.2,59,88,537/- u/s 69A the on the basis of loose papers found during search. Ld. CIT(A) has rightly deleted the amount of Rs. 75,45,059/- for which department is in appeal and Ld. CIT(A) has erred in upholding the amount of Rs.1,84,43,478/- for which assessee is in appeal. 22 ITA Nos.1336, 1349 & 1193/DEL/2021 Findings of Ld. CIT(A) deleting the part addition are on pages 33-35 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 4, 8 & 31-32 of the appellate order. It is respectfully submitted that the LP on the basis of which the addition has been made is a summary drawn by one of the main brokers of the appellant company viz. M/s Investor Clinic for calculation of its brokerage. That the sheet contains the unit wise details of commission worked out by the said broker, whose initials IC are also mentioned in the LP itself. It may be submitted that all the bookings mentioned therein from part of the regular books of account of the appellant and the 'voucher case' equated with on money by the Ld. AO is infact the 'deferred payment scheme launched by the appellant as an early bird option. It is also relevant here to mention that several of these bookings got cancelled subsequently. That the reason that the same has been mentioned as a voucher case in the sheet is to ensure that the demand be not raised to this extent on the buyers upon each milestone as per the construction linked plan and that the deferment of payment being the appellant builder's prerogative, the Broker's commission is not withheld (since brokerage depends on collection as per industry practice). Therefore, in fact, there was no on-money as alleged by the Ld. AO. It may also be submitted that of the 31 cases referred to in the LP, as many as 9 of the units were not even sold by the appellant since the units belonged to M/s Pary Developers (P) Ltd. who were developing 5 towers in the Project on their own account after purchasing the development nights for the same from the appellant. That the development rights for the Towers T2 T3, S1, S2 and S5 were owned by M/s Pary Developers (P) Ltd. and neither the sale consideration could be decided by the appellant nor the commission was payable in respect of the same by the appellant and therefore, amount of Rs.75,45,059/- related to M/s Pary Developers (P) Ltd. However, the broker having made a single list for all units in the Project Solitarian City, the entire amount was added to the appellant's income. Further, the Affidavit from M/s Investor Clinic is also submitted during appellate proceedings. In view of this the ground of appeal of revenue may please be dismissed and the grounds of appeal raised by assessee may please be allowed and may please be so held.” 39. Considered the rival submissions and material placed on record. We observed from the records submitted before us that to the extent of Rs.75,45,059/-, the information contained in the chart clearly indicate that these transactions are relating to Pary Developers Pvt. Ltd.. Therefore, these transactions are not related to the assessee even though it is found during 23 ITA Nos.1336, 1349 & 1193/DEL/2021 search at the possession of the assessee. It is being the information relating to other related party, the addition cannot be made in the hands of the assessee. In our view, ld. CIT (A) has rightly deleted the addition to the tune of Rs.75,45,059/-. Accordingly, ground no.3 raised by the Revenue is dismissed. 40. With regard to sustenance of addition as contested by the assessee in Grounds No.9 to 13 of the assessee’s appeal, we observed that certain loose papers were found during the search containing the details of sale of units to 31 parties. As per the details, the Assessing Officer observed that the assessee has sold these units through the broker, namely, I.C. and as per the working, assessee has sold the property on the basis of basic price plus the price mentioned as voucher. Since the voucher price was not recorded in the books of account maintained by the assessee, the Assessing Officer treated the same as unaccounted money and made the addition u/s 69A of the Act. The above addition includes certain transactions relating to Pary Developers and to that extent, the ld. CIT(A) has already deleted the addition. With regard to the transactions relating to the assessee, it was sustained. Before us, assessee made a submission that the broker, Investor Clinic (IC) who has drawn up the above working sheet which indicates the price quoted by the assessee and the voucher case was deferred payment scheme launched by the assessee as early bird option. Further assessee submitted that the units sold on the abovesaid 24 ITA Nos.1336, 1349 & 1193/DEL/2021 scheme was subsequently got cancelled. After careful consideration of the submissions, in our considered view, no doubt, there is nothing concrete in the findings of the Assessing Officer in this regard. However, the information contained in the spread sheet discloses the fact that the deferred payment scheme was offered to the buyers and the brokers, the same are not properly extracted and accounted for in the books maintained by the assessee. In absence of proper documents, we are not inclined to pass on the benefit of doubt to the assessee, therefore, we are inclined to sustain the addition made by the Assessing Officer in the hands of the assessee. Accordingly, Ground Nos.9 to 13 raised by the assessee are dismissed. 41. With regard to ground no.4, ld. DR of the Revenue brought to our notice facts from the assessment order, during the course of search operation u/s 132 of the Act at the premises of the assessee incriminating material in the form of Hard-Disk was found and seized and AO extracted the scanned excel sheets from the hard disk which was reproduced at page 15 and 16 of the assessment order. He further brought to our notice that the above two tables are one single sheet and in this sheet, details of unit wise cash receipt were given which proved that the cash has been taken by the assessee company and it is its regular practice to receive cash from the customers. During the course of search operation u/s 132, various document/material other than above scanned sheet was also found and seized and on the basis of these 25 ITA Nos.1336, 1349 & 1193/DEL/2021 document/material, it is established that the assessee company has taken cash money in the form of on-money He further brought to our notice that during the course of assessment proceedings, the assessee company was required to explain the contents of the above scanned sheets and was also required to provide the list of customers to whom total flats in Solitarian City were sold including Villas along with complete name & addresses & PAN No. vide various notices u/s 142(1). In response to this, the counsel of the assessee offered no comments, therefore, AO observed that it is obvious that the assessee has nothing to submit in this regard. He brought to our notice that that there are total 1520 flats in Solitarian Realinfra and out of that, total of 507 flats measuring 5,50,812 Sq ft area were sold and total BSP for these 507 Flats are Rs.166,18,33,008/- and other charges are Rs.37,35,35,030/-. He brought to our notice that on the basis of other document/material, if it is considered that 21% cash is being taken from all the sold area i.e. flats/villas then the on-money generated from the sold area would be Rs.42,74,27,287/ - and accordingly AO, considering the Facts of the case and in absence of any reply/explanation and documentary evidence, inferred that the total cash amount of Rs.42,74,27,287- has been taken by the assessee company in the form of on-money against sold flats/villas and the same is added to the total income of the assessee company under section 69A of the Act, to be taxed as per provision of section 115BBE; 26 ITA Nos.1336, 1349 & 1193/DEL/2021 42. Ld. DR of the Revenue brought to our notice pages37 & 38 of the appellate order and submitted that the ld. CIT (A) deleted the addition of Rs.42,74,27,787/-with the observation that the AO just calculated the cash receipt in respect of the property as \"on money' on the basis of the excel sheet paper and then arrived at a percentage of 21% on conjectures and multiplied the same with the total sales (being extrapolation of the seized material) to the entire sales made by the assessee and AO did not verify the factual matrix even when the documents were sent to him for his remand report just stating the same to be an afterthought from the facts and details on record, it is concluded that the assessee has explained the extracted details from the impounded hard disks, as being details of receipts against flat bookings in its project, by various customers. He further brought to our notice that ld. CIT (A) observed that from a perusal of the said extracted details, it can be seen that the same contain the details, viz., registration number, name of the customer, unit allotted, receipt date, receipt number, amount, service tax, net amount, mode of payment etc. and in this regard, the assessee submitted that the extract of the Hard disk considered by the AO, contains details of regular receipts against flat bookings, which form part of the regular books of account of the assessee and service tax liability in respect of the same has also been duly discharged. Ld. CIT (A) further observed that there is no doubt that a portion of cash has been taken from the flat owners but the same 27 ITA Nos.1336, 1349 & 1193/DEL/2021 is routed through books of accounts and on the same, the applicable service tax has been duly paid. Ld. DR further brought to our notice that ld. CIT (A) observed that the explanation offered by the assessee is supported by various documents submitted along with the written submissions and is found to be in order and copy of each party's account showing the amount as per the extracted details being amount received forms part of their ledger accounts, filed in the paper book and thus forms part of the sales recorded in the regular books of accounts. Ld. CIT (A) observed that since these receipts are found to be forming part of the regular books of account, which were also impounded in the course of search and seizure operation at the appellant group's premises, and were thus in the possession of the AO even in the course of the assessment proceedings, these cannot be treated as ‘on-money' as alleged by the AO. Ld. CIT (A) further observed that the AO has used this extracted data to extrapolate and work out estimated addition in the form of \"on money on the total flats sold by the appellant, however since the impounded material itself was neither properly examined nor properly construed by the AO, the same cannot form a basis of such an estimated addition. Ld. DR further brought to our notice that ld. CIT (A) concluded and held that thus as is evident from the page extracted from the Hard-disk, no amount of cash or on-money has been received nor any evidence to that effect has been stated by the AO in his Order and the AO has completely 28 ITA Nos.1336, 1349 & 1193/DEL/2021 confused the cash receipts, which were duly accounted for and has considered the same as on-money without verifying the same with the books of accounts. Ld. CIT (A) further observed that in the appellate proceedings also, when the matter was remanded back to the AO for verification of this issue, no specific finding could be given by him. Therefore, ld. CIT (A) held that the receipts in cash and cheque have been verified with the books of accounts and it is concluded that all these receipts are accounted for and this addition is based on conjectures and without verification from either the books of accounts or any of the unit-buyers and hence the addition of Rs.42,74,27,287 is hereby deleted. Ld. DR objected to the deletion of the above disallowance in absence of any detailed submission from the assessee’s side and also submitted that the assessee has received cash as part of consideration. Therefore, on-money receipts cannot be ruled out. He prayed that the addition made by the AO may be sustained. 43. Ld. AR of the assessee submitted as under :- “Findings of Ld. CIT(A) are on pages 37-38 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 4-5, 8-9 & 35-36 of the appellate order. It is respectfully submitted that the alleged loose paper was explained by the appellant in the course of the assessment proceedings and it was clearly demonstrated that the entire noting on the page was in respect of booking amounts received from customers which was duly reflected in the regular books of account. The details of the cash received in the 34 noted contained in the assessment order itself contained details of the units, the receipt numbers, the amount of service tax paid thereon etc. That copies of the ledger accounts of the respective parties wherein the same were duly recorded were available with the Ld. AOs office, who had the complete accounts data of the appellant. That copies of the ledger accounts of the parties, along with the list is also submitted during appellate proceedings. 29 ITA Nos.1336, 1349 & 1193/DEL/2021 That the entire amounts therefore formed part the regular books of account and the appellant had duly paid service tax and other applicable taxes in respect of the same. That in respect of amounts received in cash as well, the same was also part of the regular books of account and was fully verifiable from the regular books of account of the appellant which were also available with the Ld. AO. In view of this, the addition made by the assessing officer is without any basis, material or evidence and merely on surmises and conjectures and therefore, this ground of appeal of revenue may please be dismissed and may please be so held.” 44. Considered the rival submissions and material placed on record. We observed that during search proceedings, a hard-disk was found and seized as per the spread sheet found which was reproduced in the assessment order. From the above spread sheet, the Assessing Officer observed that assessee has received cash from the customers and, therefore, he came to the conclusion that it is in the form of on-money. In the above spread sheet, the assessee has received cash from 34 cases. Therefore, he was of the opinion that assessee is habitually collecting cash to the extent of 21% of the total price. Accordingly, he calculated the cash portion collected by the assessee from the total of the sale price of 507 flats i.e. Rs.1,66,18,33,008/- and determined the 21% of the above as on-money received by the assessee and accordingly proceeded to make the addition of Rs.42,74,27,287/- as on- money received. Ld. CIT (A) considered the detailed submissions of the assessee and deleted the addition with the observation that the assessee has received cash which were duly accounted for and paid the relevant service- tax based on the various documents submitted along with written submissions before him. When the matter was remanded back to the Assessing Officer 30 ITA Nos.1336, 1349 & 1193/DEL/2021 and in the remand report, Assessing Officer merely observed that nothing new has been furnished by the assessee and the addition was made on the basis of seized documents and assessee could not offered any explanation. However, ld. CIT (A) considered the submissions made by the assessee in detail and found that all the cash receipts made by the assessee are already accounted for in their books of account which tallies with the gross receipts matching with the service-tax records and gross sale value of the project. Therefore, we do not see any reason to disturb the findings of the ld. CIT (A). Accordingly, Ground No.4 raised by the Revenue is dismissed. 45. With regard to Ground No.5, since the facts are exactly similar to Ground No.4 in AY 2016-17 our above findings in Ground No.4 in AY 2016-17are applicable mutatis mutandis in Ground No.5 in AY 2017-18. Accordingly, Ground No.5 of AY 2017-18 is dismissed. 46. With regard to Ground No.6 of the Revenue’s appeal and Ground Nos.14 to 17 of the assessee’s appeal, ld. DR of the Revenue brought to our notice that on perusal of the unsecured loans, it was found that the assessee has taken unsecured loan to the extent of Rs.6,21,30,000/- during the year under consideration and he submitted that assessee has substantial shareholding in the three companies, namely, HP Agro Developers Pvt. Ltd., Jyoti Aquatech Pvt. Ltd. and Sahni Aquatech Pvt. Ltd. from whom assessee has taken unsecured loan. Ld. DR of the assessee submitted that during assessment 31 ITA Nos.1336, 1349 & 1193/DEL/2021 proceedings, the Director of the assessee company was confronted with these details. He however stated that he is not well aware of the Income-tax Act and whatever outcome according to the rule, it would be accepted and he brought to our notice submissions which were reproduced at pages 20 to 22 of the assessment order. During the assessment proceedings, the assessee was asked to explain whether the assessee and its Directors are holding any substantial interest in those companies from whom assessee has received unsecured loans and to explain whether provisions of section 2(22)(e) of the Act should be applied or not. However, in written submissions, vide letter dated 14.12.2018, it was submitted that provisions of section 2(22)(e) of the Act should not be applied in the case of the assessee. In absence of any explanation offered by the assessee and not satisfied with the submissions of the assessee, the AO treated the same as deemed dividend u/s 2(22)(e) of the Act. 47. Ld. DR of the Revenue brought to our notice findings of the ld. CIT (A)that assessee has filed detailed submissions and relevant papers before the ld. CIT (A) and ld. CIT (A) remanded the matter back to the AO and the AO submitted the remand report which is reproduced at page 45 of the appellate order where it is clearly brought to record by the AO that provisions of section 2(22)(e) are rightly invoked in the case of the assessee. After considering the remand report submitted by the AO, ld. CIT (A) gave relief 32 ITA Nos.1336, 1349 & 1193/DEL/2021 to the assessee to the extent of reserves held by HP Agro Developers Pvt. Ltd. and Jyoti Aquatech Pvt. Ltd. and Sahni Aquatech Pvt. Ltd. does not hold any reserves. Accordingly, to the extent of reserves held by these companies, ld. CIT (A) has sustained section 2(22)(e) addition in the hands of the assessee. 48. Ld. DR submitted that it is a fact on record that assessee has received entire loan from these companies to the extent of Rs.6.27 crores and he objected to the relief granted to the assessee to the extent of Rs.1.61 crores based on the reserves held by these companies. 49. On the other hand, ld. AR of the assessee submitted as under :- “Ground No. 6 of the Departmental appeal & Ground Nos. 14-17 of the assessee’s appeal: These grounds relate to the total addition of Rs. 6,21,30,00/- made u/s 2(22)(e) on account of deemed dividend. Ld. CIT(A) has rightly deleted the amount of Rs. 4,60,75,106/-/- for which department is in appeal and Ld. CIT(A) has erred in upholding the amount of Rs.1,60,54,894/- for which assessee is in appeal and that too when assessee is not a shareholder of lender companies. Findings of Ld. CIT(A) deleting addition of Rs. 4,60,75,106/- are on pages 47-49 of the appellate order and are relied upon. Reliance is also placed on statement of facts, grounds of appeal and written submissions reproduced at pages 6-7, 9-10 & 43-45 of the appellate order. It is respectfully submitted that the appellant company is not a beneficial or registered share-holder in any of the three companies. Therefore, by no stretch of imagination could the amount received by it from the said company have been treated as 'deemed dividend'. Your honour's kind attention is humbly drawn towards the following judicial rulings in this behalf:  CIT vs. Ankitech Private Limited, (2012) 340 ITR 0014 (Delhi-HC) (CLC 1- 28)  CIT vs. Madhur Housing and Development Company, (2018) 401 ITR 0152 (SC) (CLC 29-31) 33 ITA Nos.1336, 1349 & 1193/DEL/2021 In view of this the ground of appeal of revenue may please be dismissed and the grounds of appeal raised by assessee may please be allowed and may please be so held.” 50. Considered the rival submissions and material placed on record. After considering the material facts available on record and it is found that the above said three group companies have lent unsecured loan to the assessee during the year under consideration. However, there is no information available on record with regard to actual shareholding of the assessee with the abovesaid group concerns. It is fact on record to the extent of reserves held by these companies to the extent those companies lent unsecured loans to the shareholders attracts the provisions of section 2(22)(e) of the Act. The unsecured loans received by the assessee from the group companies who had reserves, to the extent of such reserves are considered as deemed dividend. We observed that ld. CIT (A) has held that provisions of section2(22)(e) to the extent of reserves held by these companies and we observed that HP Agro Developers Pvt. Ltd. and Jyoti Aquatech Pvt. Ltd. held reserves to the extent of Rs.1.61 crores and Sahni Aquatech Pvt. Ltd. has zero reserves. Therefore, to the extent of distributable profit, the ld. CIT (A) has sustained unserved loan as the deemed dividend. Therefore, we do not see any reason to disturb the same. Accordingly, the Ground No.6 raised by the Revenue as well as Ground Nos.14 to 17 raised by the assessee are dismissed. 34 ITA Nos.1336, 1349 & 1193/DEL/2021 51. With regard to Ground No.7, since the facts are exactly similar to Ground No.5 in AY 2016-17 our above findings in Ground No.5 in AY 2016-17are applicable mutatis mutandis in Ground No.7 in AY 2017-18. Accordingly, Ground No.7 of AY 2017-18 is dismissed. 52. Ground No.8 of Revenue’s appeal is general in nature, hence not adjudicated. 53. In the result, the appeal filed by the Revenue for AY 2017-18 is dismissed. 54. Coming to assessee’s appeal for AY 2017-18, grounds of appeal raised by the assessee read as under :- “1. That the order passed u/s 153A of the Act by the Ld. AO is bad in law as the year is a broken period and the order ought to have been passed u/s 143(3) rather than 153A of the Act. That the order did not require the prior approval of the Additional CIT. 2. That the order passed under Section 153A of the Act is bad in law as the approval of the L.D Additional CIT was taken in haste at the last date and from the records it would be clear that the approval has been made in a mechanical manner as with the number of orders approved on the last days could not be by application of mind and as per law the approval has to be done by application of mind. Thus the compliance of section 153D has not been made in a proper way and so the order is bad in law and required to be quashed. 3. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the addition of Rs.5,70,625.00 made on the basis of a loose paper wherefrom it was inferred that the appellant has received Rs.5,70,625.00 as On-Money in respect of a flat booking without considering the fact that no such on-money was received by the appellant and this fact has also been confirmed by the Flat Buyer. 4. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the above addition of Rs.5,70,625.00 without considering the fact that the said document was not in the handwriting of the appellant. 5. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the addition of Rs.5,70,625.00 without considering the fact that the total amount credited to the said party's account as per the regular books of account of the appellant in FY 2015-16 was Rs.578625.00, which could also have been erroneously mentioned as cash receipt by the author of the note. 35 ITA Nos.1336, 1349 & 1193/DEL/2021 6. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the addition of Rs.25,00,000.00 made by the L.D A.O on the basis of a loose paper wherein some calculations pertaining to Villa B-06 were made and amounts in the nature of rough noting were written, without considering the fact that the document is a rough estimate and a dump document. 7. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the addition of Rs.25,00,000.00 without considering the fact that the \"Villa/Property” referred to in the alleged document was never sold by the appellant. 8. That the Ld. CIT(A) -IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal as regards the addition of Rs.25,00,000.00 without considering the fact that the amounts mentioned in the alleged document as received in \"white\" were not received by the appellant and therefore the amounts mentioned to be received in Black\" cannot be pre-assumed to be received by the appellant. 9. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in holding an addition of Rs.1,84,43,,478,00 out of an addition of Rs.2,59,88,537.00 made by the Ld. A.O under Section 69A of the Act on the basis of a loose paper containing details of the Flat Bookings wherein certain amounts were mentioned as \"Voucher case” which were construed as \"On-Money\" by the A.O. 10. That the LD CIT(A)-IV Kanpur erred in law as well as on facts in upholding the addition made by the L.D AO and stating that the amounts mentioned as “Voucher case” are On-Money\" received by the appellant. The L.D CIT (A) has however given relief to the extent that amounts mentioned as \"Voucher Case\" for properties not development by the appellant have been reduced from the addition made in the hands of the appellant. 11. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in upholding an addition of Rs.1,84,43,478.00 without considering the fact that the addition was made by mis-construing the facts of the appellant’s case. 12. That the Ld. CIT(A) -IV, Kanpur erred in law as well as on facts in upholding an addition of Rs.1,84,43,478.00 without considering the facts that the entire loose paper was duly explained and formed part of the regular books of account of the appellant. 13. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in upholding an addition of Rs.1,84,43,478.00 without considering the fact that the amounts mentioned as \"Voucher Case\" cannot be construed as \"On-Money. 14. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in upholding an addition of Rs.1,60,54,894.00 out of an addition of Rs.6,21,30,000.00 made under Section 2(22)(e) of the Act on account of deemed 36 ITA Nos.1336, 1349 & 1193/DEL/2021 dividend without considering the fact that no such addition was possible since the appellant was neither a registered shareholder nor a beneficial shareholder of the said company and has ignored several judgments cited by the appellant on this issue 15. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in upholding an addition of Rs1,60,54,894.00 out of an addition of Rs.6,21,30,000.00 without considering the fact that the loan advanced was in the ordinary course of business and had business expediency. 16. That the Ld. CIT(A) has failed to appreciate that the loan was not a loan perse but an inter-corporate transaction during the regular course of business with a related Concern, due to business needs and no benefit had been passed on to any of the shareholders from this amount. 17. That the Ld. CIT(A)-IV, Kanpur erred in law as well as on facts in upholding an addition of Rs.1,60,54,894.00 out of an addition of Rs.6,21,30,000.00 in the hands of the appellant company even though the addition if any under section 2(22) (e) of the Act could have been made only upon the Substantial Shareholders. The advance has been made to the company and the addition if any sustainable could only be made in the hands of the Shareholders and the appellant company does not hold any shares in the lending company. The addition thus made is bad in law. 18. That the order appealed against is contrary to the facts, law, principles of natural justice and equity.” 55. Ground Nos.1 & 2 are general in nature, hence do not require any adjudication. 56. With regard to Ground Nos.3 to 5, ld. AR of the assessee brought to our notice page 1 of the assessment order wherein a loose paper was reproduced by the AO which was found during the search proceedings. The basis of addition was that the Flat No.S3-1703 sold at the cost of Rs.45,60,000/- and the kachha slip shows the detail of receipt of additional Rs.5,70,625/-. Based on the above slip, addition was made in the hands of the assessee. In this regard, ld. AR of the assessee placed reliance on statement of facts, grounds of appeal and written submissions reproduced at pages 3, 8 & 18-19 of the 37 ITA Nos.1336, 1349 & 1193/DEL/2021 appellate order. Accordingly, ld. AR of the assessee prayed that the grounds may be allowed. 57. On the other hand, ld. DR of the Revenue objected to the submissions and relied on the findings of the lower authorities. 58. Considered the rival submissions and material placed on record. We observed that the above loose sheet was found during the search proceedings wherein details of flat booking and statement of the same was recorded which matches with the booking amount and also recording of additional cash payment. Therefore, the material found during the search cannot be ignored. Therefore, we do not see any reason to disturb findings of the ld. CIT (A) and the grounds no.3 to 5 are dismissed. 59. With regard to Ground Nos.6 to 8, loose paper was found during the search and same was reproduced at page 11 of the assessment order. As per the loose sheet, it is mentioned at A-56, Sector 136, Noida page no.24 of Annexure LP-5 was found and certain notings were made as W and BL. The AO treated the same as White and Black portion of the settlement and the amount mentioned is Rs.53,63,713/- out of which it is mentioned as white part as Rs.28,63,712/- and black part as Rs.25 lakhs. Accordingly, he treated the black part as cash portion received by the assessee as on-money and proceeded to make the addition. 38 ITA Nos.1336, 1349 & 1193/DEL/2021 60. Ld. AR of the assessee submitted that these grounds relate to the addition of Rs.25,00,000/- made on the basis of loose papers and amount written in rough noting. In this regard, ld. AR placed reliance on statement of facts, grounds of appeal and written submissions reproduced at pages 4, 8 & 28 of the appellate order. Accordingly, he prayed that the grounds may be allowed. 61. On the other hand, ld. DR of the Revenue relied on the order of the ld. CIT(A). 62. Considered the rival submissions and material placed on record. We observed that the ld. CIT (A) has confirmed the addition made by the AO by observing as under :- “Assessment order passed by the AO, the Written Submissions filed by the appellant, the remand report sent by the A.O and the Rejoinder of the appellant have been considered. The AO has made an addition on the basis of a loose paper which was found and seized during the course of search from premise A-56, Sector 136, Noida. The paper has been scanned in the assessment order. From the paper it is evident that in this calculations relating to Villa-B-06 were written. Though in this loose paper date is not written but it belongs to the person from whose premise it is found as per the presumption of section 132(4A) and section 292C of IT Act and it was duty of the person from whose premise it was recovered, to explain the period. Further the LP also does not mention any amount received or paid but in both the cases, in case of unaccounted receipt, as well as unaccounted payment, the amount written in 'black’, needs to be taxed in the hands of the assessee. The paper mentions Rs.25,00,000/- as 'black'. The AR of the assessee has contended that in this page brokerage amount is written as Rs.12,51,675/-, which by no means can be in respect of property for which the consideration shown by the AO is Rs.53,63,713/- . But it is possible that the black and white amounts are just initial payments/receipts and not full payments/receipts and the brokerage is for full consideration. Though final sale of Villa B-06 has not been executed till date of search but the advance receipts in white and black could not be ruled out by the assessee giving cogent evidences. In the remand report the AO has not given any further finding and has dittoed the observations of the AO. In view of the above the addition of Rs.25,00,000/- made by the AO is hereby confirmed.” 39 ITA Nos.1336, 1349 & 1193/DEL/2021 63. We further observed that ld. AR placed reliance on the submissions submitted before the ld. CIT (A) at page 28 which is reproduced below :- \"ADDITION ON ACCOUNT OF ALLEGED ON-MONEY: Rs.2500000/- That in the course of the Search, another hand written, undated rough noting was found wherein some calculation pertaining to Villa-B-06 was made. It may be submitted that the is unsigned, without any names, has not found to be authored by any of the appellant's directors or staff and can at best be treated as a dump paper since it does not contain any details of any amount having been received or paid vis-a-vis the appellant. That the page contains some noting as such as 'BL', brokerage etc. and rough notings in round figures such as 10+20-20 etc. That an amount of Rs.25,00,000/- is mentioned against the word 'black'. It has been inferred by the ld. A.O. that the same refers to the cash received by the appellant in respect of Villa-B06. It may however be mentioned that the notings on the page are rough notings with no financial or revenue implication since the Villa B-06 was never sold by the appellant and no amount has ever been received w.r.t. the same (not even the amount mentioned as 'white' amount). Therefore the page was a mere dumb paper and could have been a rough proposal or noting by any of the brokers or other marketing person and therefore no adverse inference on the basis of the same is possible.” 64. We observed that another hand written undated rough noting pertaining to Villa-B-06 found during the course of search w is unsigned, without any names and has not found to be authored by any of the assessee’s directors or staff and it does not contain any details of any amount having been received or paid vis-a-vis the assessee. Further we observed that the amount of Rs.25,00,000/- mentioned against the word 'black' and it was inferred by the A.O. that the same refers to the cash received by the assessee in respect of Villa-B06, however ld. AR submitted that the Villa B-06 was never sold by the assessee and no amount has ever been received w.r.t. the same and this fact has already been on record in the appellate order itself. Further We observed that brokerage amount is written as Rs.12,51,675/- which is unreasonable percentage of the brokerage of the property of an amount of 40 ITA Nos.1336, 1349 & 1193/DEL/2021 Rs.53,63,713/-. In normal practices, it can only be around 2%. Accordingly, we are of the opinion that when a property was not sold and no amount including the ‘W’ portion alleged as official amount for the transaction was ever received by the assessee with respect to the said property, the addition cannot be made. Accordingly, we delete the addition and allow ground nos.6 to 8 raised by the assessee. 64. Ground Nos.9 to 13 of assessee’s appeal are already decided against the assessee while dealing with Ground No.3 of Revenue’s appeal for Assessment Year 2017-18 above. 65. Ground Nos.14 to 17 of assessee’s appeal are already decided against the assessee while dealing with Ground No.6 of Revenue’s appeal for Assessment Year 2017-18. 66. Ground No.18 raised by the assessee is general in nature, hence does not require any adjudication. 67. In the result, the appeal of the assessee for AY 2017-18 is partly allowed. 68. To sum up : both the appeals of the Revenue for AYs 2016-17 & 2017-18 are dismissed and the appeal of the assessee for AY 2017-18 is partly allowed. Order pronounced in the open court on this 13th day of June, 2025. Sd/- sd/- (ANUBHAV SHARMA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:13.06.2025 TS 41 ITA Nos.1336, 1349 & 1193/DEL/2021 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "