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TMI Blog2015 (1) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... uch material, the additions were made only on the basis of assumptions and presumptions. In the above circumstances, we do not find any good reason to interfere with the findings of the CIT[A]. - Decided in favour of assessee. Validity of issuance of notice u/s 148 - objections raised by the assessee against the issuance of notice u/s 148 was not disposed off - Held that:- On the considered view that the impugned order of re-assessment passed by the Assessing Officer without disposing off the objections raised by the assessee against the issuance of notice u/s 148 by a separate order is liable to be quashed. We order accordingly. - Decided in favour of assessee. - ITA No. 2367/Ahd/13, 2368/Ahd/13, 2587/Ahd/13 and C.O. No. 39/Ahd/13, 40/Ahd/13, 41/Ahd/13 - - - Dated:- 9-1-2015 - SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER For the Appellant : : Shri T.P. Krishnakumar, CIT-DR For the Respondent : : Shri Anil Kshatriya, AR O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: These are the appeals filed by the Revenue and crossobjections filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 488 New Sharat 27822 494 473/2 Old Sharat 4097.50 509 487, 497 New Sharat 32729 500 480 OldSharat 8296 502 484 Govt. Hold 12950 505 485 Govt. Hold 16662 3.1 However, it was noticed that all the above plots of land were not transferred by the sellers, as agreed in the said banachithi. Thus, Shri Somabhai Ambalal Prajapati in his statement recorded under section 131 of the Act on 14.12.2011 in answer to question No. 3 has clarified that the plots of land bearing survey Nos. 502,505, 540, 497 487 were disputed and could not be transferred due to pending Civil suite, thus, in place of these, Block No. 512A, 512-B, 510 513 which are in the same vicinity at Bhadaj were transferred to the persons specified by the assessee. According to Somabhai this was done as they had already receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.58 512B 3.87 ReceivedRs6,26,00,250/- ₹ 13,02,00,000/- Received (-) ₹ 10,87,24,380/- For completed Dastavej Old+New ₹ 2,14,75,520/- Received but Dastavej yet to be done. Therefore, Dastavej of 9.82 vigha land is yet to be made. 3.4 This page clearly states that Shri Somabhai A Parajapati and others have got sales consideration of ₹ 13,02,00,000/- for sale of above referred to land. On the basis of above documents Shri Somabhai Ambalal Prajapati, Shri Vishnubhai Ambalal Prajapati, Shri Chandubhai Ambalal Prajapati their family members have accepted receipt of on-money for sale of above lands as per the rates mentioned in the said banachithi and disclosed the capital gains on the same in their returns of income. The disclosure made by the buyers is tabulated hereunder: Sr N Stock Mb. Regn. No. Sale Consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90,653 (64.000X551) 389 (F.Y.99-2000) 80,81,247 1) Somabhai A.Prajapati 80.81,247. (7) 512-A 8408 10/07/ 2007 1,17,99,000 2,09,560 (1.16.000X551) 305 (F.Y.96-97) 1.15,89,440 1) Maniben Somabhai. 2) Pankaj Somabhai. 3) Hiralben Somabhai. 4) Kamlesh Sombhai. 5) Nishaben Pankajbhai. * 19,31,573. 19,31,573. 19,31,573. 19,31.573. 19,31,573. 19,31,573. ro/Taraoen somaunar 2010-2011 - (8) 513 9480 18/06/2 009 96,67,069. 95,880 95,71,189. 1) Vishnub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and document. It is pertinent to note here that 'agreement to sell made in writing is a legal contract and vests a right of the purchaser on the properties agreed to be sold to him by the sellers. Thus, any legal contract will hold good until cancelled by way of any other legal contract. However, neither during the course of the search and survey operations conducted at the residential or business premises of the sellers any cancellation agreement wherein said banachithi was cancelled was found nor any such agreement has been furnished by the assessee during the assessment proceedings. Thus, the contention of the assessee that the banachithi was cancelled has not been proved to be correct. Further, if the banachithi would have been cancelled the original banachithi would have been in the possession of the sellers and not the assessee as claimed by the assessee. Further the lands agreed to have been sold have actually been transferred by the sellers after entering into agreement to sell with the assessee. The sellers have disclosed the sale consideration as per the rates mentioned in banachithi and offered capital gains on the same as per the share held by them in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 382-17/01/2006 3,50,001 1,50,50,100 2006-2007 (6) 512-B 8406 -10/07/2007 3,56,120 81,71,900 2008-2009 (7) 512-A 8408-10/07/2007 5,14,000 1,17,99,000 2008-2009 (8) 513 9480-.18/06/2009 23,37,000 96,67,069 2010-2011 (9) 502 505 8510-13/05/2010 80,75,000 3,33,96,683 2011-2012 3.18 The above plots were finally transferred by the sellers to Shri Ajay S. PateT (Sr 1 to 8 above) and To Shri Dhirubhai Amin (Sr. No. 9, above) and not to the assessee.ln view of the facts discussed above it is clear that the sellers have received an amount of ₹ 13.02 crores towards the sale of plots of land at Bhadaj as per the banachithi from the assessee as per detail below: Date Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 6,52,10,2097- in the case of appellant for A.Y. 2006-07 with the following observation: 5. The contentions of the assessee along with facts of the case are discussed hereunder: An agreement to sell (banachithi) was entered into between Shri Vivek. P. Patel and the Prajapati family for purchase of plots of land at village Bhadaj, Ahmedabad. The plots of land were ultimately transferred to the assessee who has created a charge in favour of the assessee on the land in question. The agreement is duly signed by both the parties wherein Shri Vivek. P. Patel is shown as the purchaser. The rate was agreed to between Shri Vivek. P. Patel and Prajapati family for purchase of said plots of land. During the course of search and survey operations conducted at the premises of the sellers various loose sheets and documents referred to above, were found where cash receipts, as per the agreed rates, have been recorded to have been received by the Prajapati family. As per page no. 120 of Annexure A-22 seized from Khodal Bhavan, Khodiyar Krupa Bunglows, Near S. B. Trust Vadi, Nava Vadaj, Ahmedabad, vide panchnama dated 09.12.2009, advance of ₹ 11.00 lacs were paid by Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swer to question No. 3 has stated that the land bearing Block Nos. 502, 505, 487, 497, and 540 were disputed plots and thus could not be transferred. Thus, in order to honour the terms of the banachithi as the sellers had already received consideration for the sale of land Blocks bearing No. 510, 512-A, 512-B, 513 were transferred at the insistence and directions of Shri Vivek. P. Patel to the ultimate purchaser i.e. the assessee. The same was again reiterated by Shri Somabhai Prajapati and Shri Pankaj S. Prajapati, in reply to question no. 13 14 during the course of cross- examination. The same is reproduced hereunder for the sake of convenience:- Shri Somabhai Ambalal Prajapati in his statement recorded under section 132(4) of the Act, referred to above, has admitted to have received the sale consideration from Shri Vivek P. Patel. Further, Shri Somabhai in his statement recorded under section 131 of the Act during the assessment proceedings on 14.12.2011 has categorically stated that the land owned by them and agreed to sell vide the 'agreement to sell' entered into with Shri Vivek P. Patel were transferred as per his insistence to the persons spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This proves that there was indeed direct relationship between Shri Vivek P Patel and the assessee. Hence, the contention of the assessee and Shri Vivek P. Patel that they have no association before the date of search is not correct. For the sake of convenience, relevant extract of the statement dated 14.12.2011 of Shri Somabhai A. Prajapati is reproduced hereunder: The total plot-wise sale consideration disclosed by the sellers with regard to the sale of land as per the obligation cast upon them though the banachithi is as under Sr.No Block No. Document No. And Date Amount as per Document. Amount as per Disclosure Asst. Year. (D 509 5581 - 25/07/2005 6,50,000. 1,50,32,800 2006-2007 (2) 500 5812-02/08/205 4,00,000 1,02,98,990 2006-2007 (3) 494 5582-25/07/2005 1,51,000 50,75,720 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07- 2,44,53,600/- 510 35,00,001 /- 4,00,351/- 1,50,50,100/- 1,15,50,099/- 58, 11, 901 /- 29,73,571/- 7,10,22, 110/- 6, 52,10,209/- 5.2. It has also been confirmed by the sellers that the land was transferred to the assessee(Block Nos. 504, 494, 509, 500, 510, 512-A, 512-B 513 at Bhadaj) and Shri Dhirubhai Amin (Block No. 502 505 at Bhadaj) at the instance of Shri Vivek P. Patel and the assessee has grossly failed to prove otherwise. Further there was no satisfactory explanation to the source of such investment. 5.3. Thus, it is clear that an aggregate amount of ₹ 7,10,22,110/- was paid by the assessee during the relevant assessment year towards the purchase of the above mentioned plots of land. The assessee has failed to explain the source of the same. Further, the documented price of Block no. 509, 500, 494, 504 and 510 comes to ₹ 58,11,901/-. Thus, the difference amount of ₹ 6,52,10,209/- is treated as deemed to be the income of the assessee as per the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of the A. O. is solely based on the alleged agreement to sale dated 18- 01-2005 whereas as a corollary to the referred clauses of the registered sale deed it stands cancelled and terminated. Even the party to the agreement i.e. Vivekbhai Prahladbhai Patel has categorically denied that it was not acted upon and implemented for the reasons that all the disputes and objections etc were not removed and therefore sale was forfeited and there was no question of purchasing of land (kindly refer ans. no. 9 of statement dated 24-12-2009 of Vivek Prahladbhai Patel which is at P.B. page no. 193 of Paper Book - II). Assuming without admitting or conceding and in the alternative it can only be concluded that it could be a case of sale of same land to more than one buyer fraudulently and dishonestly which is a very common practice in land dealings where the same piece and parcel of land or property is sold to different buyers repeatedly at different consideration without making it known to each others. As per the ratio laid down by the honorable Punjab and Haryana high court(supra) it has to concluded that the oral evidences adduced by Somabhai A. Prajapati and Pankaj Prajapati as acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made investments. (i) Ushakant N Patel v CIT.282 ITR 553 (Guj) the tribunal lost sight of the fact that s. 69 of the Act opens with the words where in the financial year immediately preceding the assessment year, the assessee has made investment... Therefore, in the first instance it was incumbent upon the authority to establish that there were investments made by the assessee; that such investments were not recorded in the books of account maintained by the assessee: and that, such investments had been made in the financial year immediately preceding the assessment year in question, As per the binding ratio laid down by the Honorable jurisdictional High Court of Gujarat in the aforesaid judgment, firstly it was incumbent upon the A.O. to establish that said investment i.e. the alleged amount paid on account of impugned banachithi dated 18- 01-2005 was intact paid by the appellant assessee himself and no other assessee or person secondly such investments were not recorded in the books of account maintained by the appellant assessee and thirdly that such investments have been made in the financial year/s immediately preceding the assessment years in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. should not have made the additions u/s 69 of the Act being unwarranted as the case does not merit to apply the provisions of section 69 though invoked and therefore may kindly be directed to be deleted in full. F) Scope of an agreement of sale in the case of third party particularly when the appellant is not a party to such alleged agreement of sale and Effect and implication of general power of attorney in the name of third party particularly when the appellant is not grantor of such power of attorney. Suraj Lamp industries Ltd v State of Haryana in SLP (C) 13917 of 2009 the Hon'ble Apex Court has held:- Submissions regard/my an agreement of sale. It is submitted that the facts of case of the assessee are on much better footing inasmuch as the assessment framed on the basis of such illegal and void documents is not sustainable in the eyes of law. Even otherwise, the contract (between third party) purported to have been executed between Mr. Prajapati and Mr. V. Patel would not bind the appellant i.e. (Ajay Patel). Merely, because no document of cancellation of contract is recovered or furnished cannot be foundation for the assessment or reopening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se that reads as under :- (kindly refer to P.B. Page Nos. 169 170 of Paper book No. IV) As the land specified in the schedule is sold to you therefore on the basis of this sale deed you are -party of second part entitled and rightful to get the land transferred in your name in the government or semi-government record and for that if necessary as a seller my signatures, answers, confirmations, applications etc are required confirmations, applications etc and myself as a seller being party of the first part is bound to do so As per this clause, the seller of land was bound to sign such papers etc, which was required for mutation in revenue records. Therefore, the Power of Attorney executed in favour of Vivek P. Patel was the act of seller and not of the appellant. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to the specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (See section 1A section 2 of the Powers of Attorney's Act, 1882). None the less a power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unita Dhadda v/s. DCIT ITAT, 'A' Bench, Jaipur. 5. The Commissioner of Income Tax (Appeals) held as under: 19. When the present case is examined in view of this legal and factual position, it is found that (i) Appellant is not a party to banakhat dtd. 18/1/2005. (ii) There is no material on record to hold that Shri Vivek Prahladbhai Patel acted as benamidar of appellant. (iii) The seized material (banachitti dtd. 18/1/2005) was not found from the premises of appellant and there is no corroborative material to suggest that appellant actually paid cash. (iv) Power of Attorney was given by Shri Vishnu Prajapati in favour of Shri Vivek Patel. Thus Shri Vivek Patel was acting as agent of Shri Vishnubhai Prajapati and not as agent of appellant. (v) Nowhere in his statement Shri Somabhai Prajapati stated that any payment in cash was received by him from the appellant. In fact he categorically stated that money was received from Shri Vivek Patel only. (vi) No agreement between Vivek Patel and appellant has been brought on record. It was claimed by the seller of land in his statement that he transferred plots of land in /avow of appellant on instructions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and upheld in first appeal. 2. The further contention that Vivek Patel withdrew from the agreement and did not deal in any of the said land has been proved to be untrue on account of several evidences against him. A brief note of such evidences submitted in the form of pleading before the ITAT on 25-9-2014 in the course of appeal in the case of Vivek Patel is submitted herewith. 3. The submissions would prove that Shri Vivek Patel acted as per the agreement dated 18-1-2005, paid further amounts due and therefore, acquired the right to deal with the land. 4. Particularly, the POA dt 18-6-2009 [CIT{A} s page 17] specifically proves that he had been given the authority to deal with one such land block no. 513. This was towards the end of the land transactions. Though other such POA were not found, it only means that the earlier ones were no longer necessary as those transactions had already been completed where the present one was still in existence as it related to the latest transaction and the search u/s. 132 on 8-12-2009 itself was carried out shortly after the POA was made [copy of the POA enclosed]. 5. This shows that Vivek Patel was transacting in the land belong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, it can be seen that Shri Ajay S Patel purchased the land as a nominee of Vivek Patel as affirmed by the seller Somabhai Prajapati. The sale which took place shortly after the agreement between Vivek Patel and Prajapati s was at the price agreed upon between these persons or at a higher price, since the cost of land appreciates as is commonly known. Since no evidence has been let in about any market down turn in land and even for the few properties were there was legal dispute, substitution had been made by the Prajapati s the assessment of the extra consideration over and above the accounted value worked out on the basis of the agreement dt 18-1-2005 may be restored and the CIT[A] s order modified. Detailed submissions on facts are as per oral submissions. The legal issues as per oral submissions may also be considered. Encl:- i) Summary of submissions in the case of Shri Vivek Patel ii) Copy of the POA dt 18-6-2009. [T.P. KRISHNA KUMAR] Commissioner of Income Tax, C Bench, ITAT-III Ahmedabad. Date:- 15-10-2014. Place:- Ahmedabad. 7. The assessee has also filed written submissions which are to quote as under:- BEFORE THE INCOMETAX APPELLATE TRIBU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced from one of the specific terms of Registered Sale Deed executed in favour of the assessee categorically and explicitly states that We sellers additionally undertake and assure to the purchaser that the sellers and their successors, assigner and administrator have not given (assigned) our rights, shares, interest in relation to the land described in the schedule or any of its part to any other person in any such way. A bare reading of this term would indicate that the seller had made it clear that they have not assigned their rights, share, interest in relation to the land in question or any of its part to any other person in any such way that means no third party rights or interest whatsoever was related by the seller unto the land in question. It is also noteworthy that the terms of banachitthi does not speak that land will be transferred either in favour of Shri Vivek Patel or the person s specified by him. (but upon fulfillment of all the agreed conditions as laid down in the banachitthi, the plots of land would be sold to Shri Vivek P Patel). The term that land would be transferred in favour of person specified by Shri Vivek Patel does not find any mention in banachitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,10,209/-(in F.Y. 2006-07), ₹ 1,99,70,900/- (in F.Y. 2007- 08) ₹ 73,30,069/- (in F.Y. 2009-10) was paid by the assessee whereas in para 4.5 the A.O. has given a finding that The sale consideration has been received by Shri Somabhai Ambalal Prajapati and others through an agent / employee of Shri Vivek P Patel. The assessee has furnished an Affidavit dated 04/07/2012 duly notorised, in rebuttal, before the Ld. CIT(A) and the fact that Ld. CIT(A) has grossly failed to take cognigence of this Affidavit nor he has cross examined the assessee, hence the Affidavit prevails. The only case of A.O. is that since the assessee is holding title unto the land therefore he presumed that, the amount of ₹ 6,52,10,209/- (in F.Y. 2006-07), ₹ 1,99,70,900/- (in F.Y. 2007-08) ₹ 73,30,069/- (in F.Y. 2009-10) would have been paid by the assessee, such finding is devoid of any merit and not supported by any evidence. Significantly, the thursts upon the revenue to prove its stand is not met. [Refer Question and Answer No.23 of statement dated 14/08/2012 of Shree Somabhai A. Prajapati in crossexamination by Shree Ajay S. Patel and see Paragraph No.18 at page No.34 of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant assessee is maintaining regular books of accounts and the A.O. has worked out the difference for making addition on the basis of the balance sheet prepared upon closing and adjusting such books of Accounts. Therefore, this ratio could become applicable if the assessee is not maintaining books of account at all and as such it becomes imperative to add it back under section 69 of the Act. It is an undisputed and admitted fact that the appellant assessee is maintaining regular books of account. Therefore, on this count only no additions u/s.69 could have been made or should be sustained in all the three A.Ys. i.e. 2006-07, 2008-09 2010-11 as held by Ld. CIT(A) and it may kindly be upheld so. (iii) The A.O. has to establish that such investments have been made in the financial year 2005-06, 2007-08 2009-10 relevant to assessment years 2006-07, 2008-09 2010-11 respectively for making addition u/s.69 of the Act but the facts and material available on record in the form of the impugned banachitthi dated 18-01-2005 and the statements of connected persons as relied by A.O. to make the additions in the respective A.Ys. goes to prove that it was invested (paid) in F.Ys.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been made or should be sustained in all the three A.Ys. i.e. 2006-07, 2008-09. (iii) The A.O. has to establish that as per the above stated third ratio the A.O. has to establish that such investments have been made in the financial year 2005-06, 2007-08 2009-10 relevant to assessment years 2006-07, 2008-09 2010-11 respectively for making addition u/s.69 of the Act but the facts and material available on record in the form of the impugned banachitthi dated 18-01-2005 and the statements of connected persons as relied by A.O. to make the additions in the respective A.Ys. went to prove that it was invested (paid) [even if by the third party] in F.Ys.2004-05, 2005-06 2006-07 relevant to A.Ys. 2005-06, 2006-07 2007-08. Therefore, it may kindly be held that the additions made u/s. 69 of the Act in A.Ys. 2008-09 2010-11 are liable to be deleted and it may be held so. B ON BANACHITTI 1. Whether there has been novation, rescission or substitution of the contract. 2. The appellant disputes the seized photostate copy of an unregistered Banachitti dated 18-01-2005 (Kindly refer to P.B. Page No 1 to 10) on the ground of non- fulfillment of substantive conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Answer No.2 of Statement dated 14/08/2012 of Vivek P. Patel in cross-examination by Ajay S. Patel). The same is reproduced below. Que:2 As written on page No.3 of this Banachitti, you have paid ₹ 11,00,000/- (Rupees eleven lakh) towards part consideration. What do you have to say in this regard? Ans:2 In this regard I have to state that above said rupees eleven lakh (Rs.11 lakh) were given by way of cheque. However, because of non-honoring of conditions of Banachitti and also there were interested parties who were landlords and they have not signed the Banachitti, therefore it was noticed that the above Banachitti was a fraud. So, I got the money (cheque) back since that cheque was not encashed and this Banachitti was accordingly cancelled. Thus the case is falling under the category of a fraudulent contract. 4. The appellant, therefore, consistently said stated that the contract has been repudiated by the appellant unilaterally as a result of non-fulfillment of stipulated substantive conditions(BREACH OF TERMS OF CONTRACT) by the seller as the appellant had a right to repudiate the contract though not specifically specified in the Banachatti but as was not bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the specific express clause narrated in the registered Sale Deed executed in favour of the appellant by the sellers of land which reads as under: We the sellers additionally undertake and assure to the purchaser that the sellers and their successor, assignees, and administrators have not given the land described in the schedule or any of its parts to any other persons by way of mortgage, sale or gift or is not in writing in any which way According to the above cited express clause it has to be concluded that the sellers have categorically expressed and under taken that they have not sold this land to any other person or have created any other charge of whatsoever nature on this land. This tantamount to hold that if any such charge if at all was created then it rescind automatically. The A.O. is very much in possession of these documents as evident from paragraph no.5.1 5.3 of the assessment order wherein the A.O. has added the difference between the documented price and the alleged actual amount paid instead of difference between amount shown in the balance sheet and the alleged actual amount paid. This goes to prove beyond doubt that whatever might have transpi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in view of the facts disclosed in the referred clause. It may therefore be kindly held that the agreement of sale dated 18/01/2005 stands cancelled by this legal document in the form of registered Sale Deed referred above and therefore no additions so made is liable to be sustained and as such it may kindly be directed to be deleted in full. 6 Another significant fact to be noted is that. 1) banachitthi was executed on 18/01/2005. 2) last of the payment in pursuance of the said banachitthi is alleged to have been made by 20/04/2006. 3) photostate copy of the banachitthi was seized by the department on 08/12/2009. 4) had it been the case as alleged by Somabhai department that as per the direction of Vivek P. Patel the Sale Deeds were registered in the names of assessee and other persons than by necessary implication of said Banachitthi it becomes imperative on the part of Prajapati to include the name of Vivek P. Patel in such Sale Deed as confirming party or otherwise because as far as the Sale Deed registered on 13/05/2010 i.e. the dates falling after search or their action of disclosing the same as capital gain, is conspicuously absent in the said Sale Deeds r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r banachithi dated 18/1/2005 was cancelled and not acted upon, particularly by Vivek Patel and more particularly in view of the fact that there is no mention of this banachithi or Vivek Patel in the final registered Sale Deed dated 14/05/2010. g) In this view of the matter and later evidences in the form of Registered Sale Deed available on record of A.O. and also relied by the A.O. to make the additions, the same may kindly be considered while deciding the appeals. It is further prayed that same may be taken into consideration while adjudicating the grounds of appeal in the interest of Justice equity being documents relied by the respondent too. It is more particularly so because the documents has to be read as a whole and not partly or selectively as has been done by A.O. to form the basis for making addition and the operative part as above of the same document as relied by the respondent reveals otherwise which is completely ignored by the A.O. h) As at the bottom line on page 7 of the enclosed sale deed it is categorically assured by the seller to the purchaser that he has never ever given in writing to anybody else for sale of said land by way of Banakhat, Banachitthi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he original banachitthi might be with the buyers of land because they paid him. While in Cross Examination taken by assessee before A.O., on 14/08/2012, he stated that he had no monetary transactions with Vivekbhai before banachitthi dated 18/01/2005. About conditions of agreement, in replying question No. 8 he has stated that no supplementary agreement (banachitthi) or additional agreement was made in writing but it was orally decided to offer alternative land of same measurement that of disputed one and to execute by making such document. Whereas, in Cross Examination by Shri Ajay Patel, on 14/08/2012 before A.O. on being asked as to what happened after banachitthi executed in replying question No. 5 he stated that after this banachitthi, Vivekbhai gave him eleven lakhs in cash and had promised to pay balance installment. B. ABOUT TERMS CONDITIONS OF BANACHITTHI. QUESTIONS ANSWERS IN STATEMENTS (1) Statement Cross examination of Shri Somabhai by Vivek Patel on 14/08/2012. [Kindly refer to P.B. Page No. 435] Q.4: We have come to know that you or your family members are not the owners of the lands mentioned on second page of banachitthi to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... block No. 500 was done in F.Y. 2005-06. For Block 540 title was not cleared till then. Whereas in Cross Examination by Ajay Patel on 14/08/2012, in question No. 12 he stated that he had not paid premium for Block No. 500 as per condition No. 5 of banachitthi for conversion into old tenure but deed was executed as per new tenure. C. ABOUT PAYMENT TOWARDS LAND VIS-A VIS BANACHITTHI. QUESTIONS ANSWERS IN STATEMENTS (1) Statement of Shri Somabhai u/s 131 dated 14/12/2011 before A.O. [Kindly refer to P.B. Page No. 180] Q.4: As per agreement to sale (Annex.A.22) you received ₹ 11,00,000/- (rupees eleven lakh) which was required to be set off against full payment in final sale deed. Please state as to how did you receive this amount? Through whom you have received? And when did you receive? Ans: This ₹ 11 lakh was received on the said date as per banachitthi in cash from Shri Vivek Prahlad Patel. (2) Cross-Examination of Shri Somabhai by Vivek Patel on 14/08/2012 [Kindly refer to P.B. Page No. 440] Q.16: You stated that you received rupees 11 lakhs as per banakhat. Vivek has stated that payment is made by cheque in his statement dated 24/12/09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of receipt of cash, in replying question No. 6 he remained evasive. Also, in replying question No. 7, as to the name of person delivering money, he declined saying he didn t know any person. In further question No. 8, he stated that he received money in 15 to 20 installments. In a specific question to produce date-wise record question No. 9 he stated that he didn t keep such record. In replying to question No.11, about receipt of money from other than Vivekbhai, he categorically stated that he didn t receive money from anyone else. D. ABOUT DIFFERENT LAND VIS- -VIS BANACHITTHI. QUESTIONS ANSWERS IN STATEMENTS (1) Statement u/s 131 dated 14/12/2011 before A.O. of Somabhai Prajapati [Kindly refer to P.B. Page No. 177] Q.3: Have you struck this deal only at the rates mentioned against each land stated in the banachitthi? Ans: The sale deeds in respect of lands of block Nos. 504, 494,509,and 500 mentioned in the banachitthi were executed and out of remaining block Nos.502,505,487 540 which were affected by civil suits, hence no sale deed could be made then, whereas, we had already received full payment of deal. Hence, against the same lands we execute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore in full. But as shown in this statement amount for block no.540 of 4.97 Bighas is outstanding. Please explain whether this amount is inclusive of ₹ 10,87,24,380/- for the completed document? Ans: In this context, I have to inform that the sale deed for Block No. 540 was to be executed. In answer to Q.No.6 I have specifically stated that the consideration for block No.540 was received but sale deed was to be executed. Whereas, I have, by mistake I answered that sale deed was executed but the sale deed for Block No.540 was cleared and against which we have executed sale deed of another land. Q.18: If you have received full payment up to 24/04/2006, then why sale deeds of land 512A, 512B 513 were made after one and half to three years: when full Payment was received it could have executed at that time? Ans: We tried to solve the civil disputes in above stated block Nos but since they could not be solved, we offered other lands and sale deeds were executed. (3) Cross Examination of Shri Somabhai by Ajay Patel on 14/08/2012. [Kindly refer to P.B. Page No. 198] Q.21: Have you transferred any land in the name of Vivekbhai? Ans: No, we have not transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause there were Civil Litigations hance the deeds were kept on hold but they offered about 50 Bighas of land of alternative Survey Numbers other than stated in banachitthi. While replying question No. 11, he stated that Sale Deed for Block No. 540 was not executed since title was not clear against which he executed Sale Deed for another land. When a leading question No.18 was asked as to why Sale Deeds for land 512,512B 513 were made after one and half to three years when full payment was received on 24/04/2006, he stated that he had offered other lands and deeds were executed since he could not solve Civil Litigations. In Cross Examination by Ajay Patel on 14/08/2012 in question No.21, he stated that he had not transferred any land in the name of Vivek Patel but in the names of persons suggested by him. Further while replying question No.22, he categorically stated that Vivekbhai was never a confirming party in any deals. Whereas, his son Pankaj Prajapati in his statement u/s 131 dated 13/12/2011, before A.O. has stated that details noted in Annexure A 22 (pages 112,113 118) reveal disputed block with area, bighas, status of Sale Deeds executed or pending and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q.09 : When such a big amount is involved and when you have received in 15 to 20 installments (you have not received the moneys on the date of the agreement to sale) you must have kept date-wise record. Please produce the said record. Ans: No sir, I have no such record. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS In his statement u/s 131 recorded on 14/11/2011, in the assessment proceedings, before the A.O. in a specific question (No.10) as to when Sale Deeds are executed in the name of Ajay S. Patel as purchasing party, and in none of it name of Vivek Patel is shown as either purchaser or confirming party, then how can he say that the amount is given to him by Vivek Patel, he replied that entire deal was done with Vivekbhai as per banachitthi and he used to send money and deeds were made in names suggested by Vivek Patel. As and when Sale Deed was executed then and then the amount of document was returned back to Vivek in cash, and accounts were settled internally. Then on the other hand when he repaid the amount in cash which was paid by cheques for registered sale-deeds, he must have obtained the signature of Vivek Patel being receipt in his diary or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab of Sola ₹ 750000/- (cash) Chauhansab Sola ₹ 50,000/- (cash These cash was paid from the sale of land. Page No 80 (Back Side) Rs.50,000/- paid in cash Mamlatdar Sudirbhai The total payment of ₹ 15,66,500/- made in cash Q.27: What have you to say about aforesaid doubtful loose papers cash payments noting jottings which you are unable to reconcile with books of a/c? Ans: I agree that some of the cash transactions don t tally with my books. Hence I voluntarily offer undisclosed income of Rs. five Crores as unrecorded income of myself my family which is binding on me used my family. I will submit year wish break up later on. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS In his statement u/s 132(4) dated 25/01/2010, before the ADIT(Inv), in specific question (No.7) about disclosure of income in his return of income, he stated that he had shown Capital Gain out of sale of above lands, and added that they (three brothers) have filed a disclosure petition admitting that out of ₹ 13,02,00,000/-, amount of ₹ 5 crores is disclosed by his son Pankaj u/s 132(4) and rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard are inadequate to uphold the view taken by revenue. The stands reiterated are basically by way of argument based on oral evidence and not supported by solid documentary evidence. The addition has been made on the basis of deposition from Somabhai S. Prajapati. Whereas at the time of search, the documents were recovered in the presence of his son Pankaj and his statement u/s 132(4) was recorded on these documents. The deposition given by Somabhai S. Prajapati his son are confusing unreliable. As demonstrated herein before the statements of both the persons are absolutely contradictory. Therefore, from the replies it is not proved categorically that the payment was made by Vivek P. Patel himself in pursuance of Banachitthi dated 18/01/2005 and replies were always in the alternative, contradicting the terms of relied Banachitthi. Therefore, also, it may kindly be held that the statements are clearly confused and unreliable statements. In the circumstances it has to be concluded that evidence had not been brought in reasonable quantity to establish that either Vivek P Patel or Shri Ajay S Patel has Invested the sums in pursuance of banachtthi as alleged by department and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is that Shri Somabhai Prajapati executed certain Sale Deed in favour of third parties at the instance of assessee. There is no dispute with regard to the fact that Sale Deed executed by respective seller does not speak of anything whether the Sale Deeds were executed at the instance of assessee. The Hon ble Punjab Haryana High Court has categorically held that once the documentary evidence is available, the revenue authority should not base the case on oral evidence. Undisputed facts remain that the person in whose name land has been transferred by way of registered Sale Deed has not stated that such Sale Deed was executed at the instance of assessee and any money was given to Shri Somabhai on behalf of the assessee. The revenue has not placed any material on record that the payment of sale consideration which was mostly made through banking channel has any link with the assessee. If the person in whose favour the land has been transferred on the basis of registered Sale Deed is able to prove that the sale consideration as described in the Sale Deed was made out of the source and fund of such person. In the absence of any link with the assessee, revenue authorities are not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of Prajapati. C Admittedly, the allegation of Prajapati that the amount received through banking channel was return to assessee without even obtaining any signature or any receipt thereof. The entire case is based on false concocted statement of Prajapati which has no evidentiary value and cannot be relied upon. Undisputedly no fund flow statement has been placed on record proving that money received by banking channel was returned to the assessee. D Whether money received through banking channel are withdrawn, there is no detail of withdrawal date, amount etc. In the absence of such material evidence, the authorities below were not justified in making the assessee liable. I It creates a serious doubt that whether Vivek has actually paid the sum in pursuance of Banachitthi dated 18/01/2005. See Dr. Keyur Parikh v ACIT, central circle-2(3) ,Ahmedabad IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER IT(ss)A No.604/Ahd/2011 A.Ys: 2008-09 and other applicable case laws. II Presumption u/s 292C is not applicable since no search u/s 132 is carried out in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the appellant s case and from the material available on record, the following propositions requires to be decided. (1) Whether there has been novation, rescission or substitution of the contract in the form of Banachitti dated 18/01/2005. (2) Whether the impugned Banachitti dated 18/01/2005 was fraudulent, void/voidable and cancelled ?. (3) Whether under such circumstances what a person would normally do as to whether at the first instance pay the entire sum for the plots of land agreed to be sold without fulfilling the agreed substantive conditions by the seller and also without a clear title and sit idle and wait for a better title because the impugned sum ₹ 9,16,41,058/- (serial No.1 to 8 as per table above Paragraph 5.1 of the assessment order) out of ₹ 11,69,62,741/- (serial No.1 to 9 as per table above Paragraph 5.1 of the assessment order) is alleged to have been paid between the period 18/01/2005 to 28/04/2006 and the last of the Sale Deed in the case of appellant is registered in F.Y. 2009-10 AND (4) Whether on the peculiar facts and circumstances of the case, can a free hand is to be given to the department to add t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition u/s 69 or 69B of the Act was liable to be made or sustained now. The C.O has been registered as appeal no. 40/Ahd/2014 and the same is in the process of hearing. B. REGARDING CAUSE OF SUBMITTING SUPPLEMENTARY PAPER BOOK ON MERIT. The facts in brief leading to the present application for submission of documents in the form of supplementary paper book at this juncture are briefly as under:- (1) As may be perused from the impugned assessment order dated 18-01-2013, the Assessing Officer has processed to scrutinize the issue of sale of plots of land on the basis of a banachitthi found and seized from the premises of Shri Somabhai Ambalal Prajapati in the course of search u/s 132 of the Act on 08-12-2009. The Assessing Officer has taken cognizance of such plots including block Nos. 502 505 as noted on the first page of the impugned assessment order. (2) Thereafter, vide Para 2.1 of the Assessment Order he has noted the contents of a statement of said Shri Somabhai Prajapati and has brought on record that plots of land bearing Block No. 502, 505, 540, 497 487 were disputed . Hence all the lands were not transferred by the sellers, as agreed, in the banachitth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t hereby assure and undertake you i.e. the Party of the Second Part and states that we have never ever given anything in writing as banakhat, banachithi or whatsoever nature in writing relating to sale of the above land to anybody else and/or even if anything given in writing, it is no longer in operation as of today, having been cancelled. Also, we the seller of this land has not sold, mortgaged, or gifted or given in writing to transfer or assign in whatsoever manner or have not appointed anybody as power of attorney holder to administer and/or to manage any affairs in respect of this land, or we have neither created any liability thereupon nor obtained any solvency certificate for the above land . It is pertinent to mention here that: a) In the banachithi dated 18/01/2005, Shri Chandubhai Ambalal Prajapati was a party to it and signatory. b) All the nine plots of land agreed to be sold were by only one banachithi dated 18/01/2005, which includes Block Nos. 502 505. c) Since banachithi dated 18/01/2005 though was only one document but all nine Blocks were agreed to be sold by this instrument only wherein Shri Chandubhai A. Prajapati was one of the parties and signat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is compeletly ignored by the A.O. Apart from this, at the bottom line on page 7 of the enclosed sale deed it is categorically assured by the seller to the purchaser that he has never ever given in writing to anybody else for sale of said land by way of Banakhat, Banachitthi, or in any other form in the past, and is liable to cancelled in the event of existence of such writing. (7) Thus, the copy of above said Sale Deed (document) being produced now being a vital one to reach to the root cause of the action and decide the issue, which has been relied upon by the Assessing Officer in his assessment order as stated above. However, since the same is being produced now so that the issue involved in the ground taken before the Hon ble tribunal may be decided in all fairness by granting leave to the respondent by this Hon ble Bench of Tribunal and to accept the same for being admitted as supplimentary paper book . 2. Having regard to the above stated facts and peculiar circumstances of the case, the respondent most humbly prays to this Hon ble Bench to grant leave for the above referred document as relied upon by the A.O. and as referred to in the Assessment Order in the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and of Block No. 500 is given on a condition of it being the land of Old Tenure but in the Village Form No. 5, the entry No. 2744 is made. It is the responsibility of the seller to convert the said land into Old Tenure land by giving its proper explanation. (see clause No.7 of Banchitthi at P.B.-I Page No.9) No No No No No In reply to Question No.6 of statement dated 14/08/2012 on cross examination of Shri Somabhai Prajapati by Vivek P. Patel, it was answered that the title of Block No. 540 is not clear. In reply to Question No.7 of statement dated 14/08/2012 on cross examination of Shri Somabhai Prajapati by Vivek P. Patel, it was answered that We have not received any title clearance certificate till now and we have not given any title clearance certificate (kindly refer to P.B. Page No. 435 436). Neither the revenue department nor Somabhai Prajapati has placed any evidence to establish that the condition of clause 3 of title clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate was even obtained and given. (Kindly refer to Ans. No. 6 of statement dated 14/08/2012 of Somabhai Prajapati on cross examination by Vivek P. Patel at P.B. Page No.436). Neither the revenue department nor Somabhai Prajapati has placed any evidence to establish that the condition of clause 5 was fulfilled. Non fulfillment of this condition was the reason for cancellation of banachitthi. The operative stay order dated 10/06/1996 was to be vacated and the land is to be converted into old tenure one which was not done and therefore no payment was liable to be made and for the reasons as submitted in respect of Block No. 505 502 above, the Banachitthi was cancelled by Vivek P. Patel. Neither the revenue department nor Somabhai Prajapati has placed any evidence to establish that the condition of clause 6 was fulfilled. Non fulfillment of this condition was the reason for cancellation of banachitthi. According to this term and condition, the land in question was to be sold as land of old tenure and as per Ans. No. 12 of statement dated 14/08/2012 of Shri Somabhai Prajapati and Pankaj Prajapati on cross examination by Ajay S. Patel clearly stated that I have not pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 494 5582-25/07/2005 1,51,000 2006-2007 (4) 504 5813-02/08/2005 11,10,900 2006-2007 (5) 510 382-17/01/2006 3,50,001 2006-2007 26,61,901/- (6) 512-B 8406 -10/07/2007 3,56,120 2008-2009 (7) 512-A 8408-10/07/2007 5,14,000 2008-2009 8,70,120 (8) 513 9480-18/06/2009 23,37,000 2010-2011 23,37,000 9. Further, it is not indispute that the consideration disclosed in the registered Deed of Sale was duly disclosed by the assessee in his return of income. A search and seizure operation was conducted in the case of one Shri Somabhai Ambalal Prajapati on 8-12-2009. In the course of the search, an agreement for sale [Banachitti] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lots. 11. The consideration mentioned as agreed upon in the agreement of sale was higher than the consideration shown as actually paid in the registered Deed of Sale. The difference amount of the plots registered in the assessment year 2006-07 was ₹ 6,52,10,209 in assessment year 2008-09 was ₹ 1,91,00,780 and in the assessment year 2010-11 was ₹ 73,30,069. The seller claimed to have received actually the amount mentioned in the agreement for sale and not merely the amount which was mentioned in the Registered Deed of sale. On the basis of the above seized Agreement of sale and statement of Shri Somabhai Ambalal Prajapati and Shri Pankaj S Prajapati, the AO inferred that the assessee being the ultimate purchaser of the plots of land, must have paid the price which was mentioned in the agreement of sale. 12. Therefore, the AO added the difference amount in the year in which the plots were purchased by the assessee by Registered Deed by assuming that the difference amount of the agreement amount and registerd deed amount must have been paid by the assessee in the year in which registered deed was executed in his favour. Thus, addition of ₹ 6,52,10,209 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon ble Gujarat High Court in the case of General Motors India P. Ltd v. DCIT, [2013] 354 ITR 0244. 18. On the other hand, the DR supported the orders of the lower authorities. 19. We find that, in the instant case, it is not in dispute that the assessee in his objection against the issuance of notice u/s 148 of the Act vide his letter dated 24.12.2011 which was received by the Assessing Officer on 26.12.2011. Thereafter, the Assessing Officer passed the impugned order of re-assessment on 25.03.2013. No material could be brought before us to show that the objections raised by the assessee against the issuance of notice u/s 148 was disposed off by the Assessing Officer by passing a speaking order thereon and allowing reasonable time to the assessee after communicating the fate of the objections before proceeding with the re-assessment. The Hon ble Gujarat High Court in the case of General Motors India P. Ltd v. DCIT (supra) has held as under:- From the aforesaid discussion, we are of the considered opinion that the writ petition under article 226 of the Constitution of India is maintainable where no order has been passed by the Assessing Officer deciding the objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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