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TMI Blog2013 (5) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... C.1/173/2011-12 dated 26-09-2012 for the assessment year 2007-08 by Shri Arvindvhai R. Shah [IT(SS)A No.548/Ahd/12] (v) CIT(A)-II/CC.1/170/2011-12 dated 26-09-2012 for the assessment year 2006-07 by Shri Prvinchandra R. Shah [IT(SS)A No.549/Ahd/12] (vi) CIT(A)-II/CC.1/174/2011-12 dated 26-09-2012 for the assessment year 2006-07 by Shri Jayantilal R. Shah [IT(SS)A No.550/Ahd/12] 2. In all these cases, since the facts are similar, identical and interconnected, they are heard together and disposed of by this consolidated order for the sake of convenience. 3. In all the appeals the assessees have raised three common grounds wherein grounds No.2 and 3 are general in nature and do not survive for adjudication. The lone common ground No.1 (except the figures) raised by the assessees is reproduced herein below for reference:- "1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making additions of (a) Rs.42,40,640/- [in ITA(SS) A No.544/A/12 for AY 2008-09], (b) Rs.5,63,470/- [in IT(SS)A No.545/Ahd/ for AY 2009-10], (c) Rs.38,52,703/- [in IT(SS)A No.546/Ahd/12 for AY 2006-07], ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs at rates far less than Rs.2,80,000/- per bigha. 7. With respect to the agreements the assessee had made the following submissions before the learned AO:- (i) Since Mr. Natvarsingh Nathusingh Admar had failed to execute the agreements both the agreements were cancelled. (ii) It was realized by the assessees' group that the land price in the area was far less than what was quoted by Mr. Natvarsingh Nathusingh Admar. (iii) It was further realized that the assessee was not the owner of the land who had unscrupulously planned to extract money from the assessees' group by inflating the land price. (iv) Mr. Natvarsingh Nathusingh Admar had admitted before the learned AO that he had entered into such agreement with the assessees' group and received an advance of Rs.90,00,000/- for transferring the land to them after procuring, leveling and converting the same into non- agriculture land. He further admitted that since he was not able to keep up to his commitment the agreements were cancelled and the money was returned. (vi) In these circumstances, the assessees' group had purchases the land directly from the landowners at the market rate which was either above or equal to jantry ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was acting as a middleman. (ix) There was enough evidences for the assessees group having advanced Rs.90,00,000/- to Shri Natvarsingh Nathusingh Admar but there was no evidence for cancelling the agreements and return of Rs.90,00,000/-. (x) Though in the statement of Shri Natvarsingh Nathusingh Admar in question No.5 recorded, it was stated that he was supposed to purchase the land from the landowners @ Rs.70,000/- to Rs.80,000/- per bigha and subsequently transfer the same to the assessees group after leveling the land and converting the same to non- agriculture land. He had admitted in question No.6 that he was unable to purchase the land @ Rs.70,000/- to Rs.80,000/- per bigha and therefore he cancelled the agreements executed and returned the advance received for Rs.90,00,000/-. These facts clearly prove that the prevailing land price was not Rs.70,000/- to Rs.80,000/- per bigha but Rs.2,80,000/- per bigha as stated in the agreement. (xi) The assessees group was introduced to Shri Natvarsingh Nathusingh Admar by common friend Shri Rajeshbhai, since he was a native of the place where the Textile Park was supposed to be promoted knowing many people and having many relatives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; (E)Total 5,63,470 12 Survey No.692/a, 708/5, Block No.705 Mahendra R. Shah and Arvind R. Shah (50%) each (Rs.18,53,727 X 2) 2007-08 Sic. 37,07,453 37,07,454 (F) Total 37,07,454 Grand Total Sic. 2,09,72,810 2,09,72,815 10. When the matter was taken up before the learned CIT(A), all these additions were sustained by the learned CIT(A) citing the following reasons:- (i) The appellant had purchased the same land as mentioned in both the agreements within the time limit prescribed in the agreements. (ii) There was no evidence with respect to cancellation of the agreements. (iii) No prudent businessman dealing in land would advance a substantial amount of Rs.90 lacs in cash to a person who is not the owner of the land. This establishes the fact that the assessee had accepted Mr. Natvarsingh as the middleman through whom the land would have been purchased at the rate stipulated in the agreements. (iv) Nowhere in the agreements it was stated that the land would be purchased after converting the same into non- agriculture land and after leveling the same. 11. The learned AR stoutly argued before us that the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessees in order to establish that the assessee had paid amount over and above the value shown in the registered documents. 14. From the above facts, it is apparent that the revenue had made addition only on the basis of surmises and conjunctions that the assessee would have paid Rs.2,80,000/- per bigha. The onus thrusts upon the revenue to prove its stand is not met. As pointed out by the assessee, the decision rendered in K. P. Varghese Vs ITO 131 ITR 597 (SC) comes to its rescue. There is no evidence to show that the assessee had paid on-money for purchase of the land. The entire addition was made only based on the inference drawn from the two agreements found during the search which were claimed to be cancelled by the executors of the same. There was nothing on record to show that the agreements were acted upon as per the terms stipulated therein. There was no trace of cash payment in excess of the amount shown in the registered documents either with the assessee or with the owners of the land who had sold the land to the assessees. Further, the landowners were not examined or investigation made on them to verify whether they had received on- money for the sale of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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