9911796707
TMI Blog2015 (1) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... that unaccounted money had been received by the sellers of property which was purchased by the assessee. 3. The facts of the case as borne out by the order of the Commissioner of Income Tax (Appeals) are as under: "10. During the course of search in the case of one Shri Somabhai Ambalal Prajapati, certain documents were found which indicated that one Shri Vivek Prahladbhai Patel entered into agreements with him to purchase various plots of land. AO completed assessment in the case of Vivek Prahladbhai Patel for A.Y. 2005-06 with the following observation: "3. During the course of search in the case of Somabhai Ambalal Prajapati at Khodal Bhavan, Khodiyar Krupa Bunglows, Thaltej, Ahmedabad on 08.12.2009, it is found that Shri Somabhai A. Prajapati, Shri Vishnubhai A. Prajapati, Shri Chandubhai A. Prajapati have entered into banachithi (agreement to sell land) on 18.01.2005, for sale of land at Bhadaj with the assessee. The banachitthi was signed on 18.01.05 by Somabhai Ambalal Prajapati, Chandubhai Ambalal Prajapati and Vishnubhai Ambalal Prajapati as seller and the assessee as the buyer. The said 'banachithi' has been seized and inventorized at page no. 119 to 122 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,85,000/- 487 512A 5.58 512B 3.87 ReceivedRs6,26,00,250/- Rs. 13,02,00,000/- Received (-) Rs. 10,87,24,380/- For completed Dastavej Old+New Rs. 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 Rs. 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 Index Cost Capital Gain Name of Coowner Share (1) 500 5812 1,02,98,990 1,40,166 (73044X497) 259 (F.Y.94-95) 1,01,58,824 1) Chandubhai A.Prajapati 2) Prakash C. Prajapati. 3) Gitaben C. Prajapati. 4} Anilaben D/O. C. 5) Alpaben D/o, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of on-money received on Sale of land was paid to him by person coming from the office of the assessee and page no. 111 of Annexure A-22 was also working provided by the representative of the assessee, as there was some difference in consideration received." 11. After considering various submissions of Shri Vivek Prahladbhai Patel, AO made addition of Rs. 3,25,50,000/- u/s.69 in the case of Vivek Prahladbhai Patel with the following observation: "3.17 The contentions of the assessee along with facts of the case are discussed hereunder: * An agreement to sell (banachithi) was entered into between the assessee and the Prajapati family for purchase of plots of land at village Bhadaj, Ahmedabad which has created a charge in favour of the assessee on the land in question. * The agreement is duly signed by both the parties wherein the assessee is shown as the purchaser. * A rate was agreed to between the assessee and Prajapati family for purchase of sale 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasers. * Snri 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 the assessee. * 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 the assessee were transferred as per his insistence to the persons specified by him as the rights in the said land were already transferred to the assessee vide the banachithi dated 18.01.2005. * 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. (1) 509 5581 -25/07/2005 6,50,000. 1,50.32,800 2006-2007 (2) 500 5812 - 02/08/2005 4,00,000 1,02,98,990 2006-2007 (3) 494 5582-25/07/2005 1,51,000 50.75,720 2006-2007 (4) 504 5813-02/08/2005 11,10,900 2,55.64,500 2006-2007 (5) 510 382-17/01/2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar additions were made in the case of Shri Vivek Prahladbhai Patel for A.Y. 2006-07 and 2007-08. 13. Thereafter AO issued notices u/s. 147 in the case of appellant for A.Y. 2006- 07, 2008-09 and 2010-11. After considering various replies filed by the appellant, AO made addition of Rs. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chithi'. * It is pertinent to note here that the following lands that have been transferred by the sellers are not recorded in the banachithi. In this regard, Shri Somabhai A Prajapati in his statement recorded under section 131 of the Act on 14.12.2011 has specifically in answer 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 sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2009, i.e. on the same date as of power of attorney. Shri Somabhai Prajapati has categorically admitted in his statement dated 14.12.2011 that he has transferred block no 512-A, 512-B, 510 and 513 instead of Block no 502,505,487,497 and 540, as these were litigated land. 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 2006-2007 (4) 504 5813-02/08/2005 11,10,900 2,55,64.500 2006-2007 (5) 510 382-17/01/2006 3,50,001 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly added to the total income of the assessee." 14. For similar reasons addition of Rs. 1,91,00,780/- was made in the case of appellant for A.Y. 2008-09 and addition for Rs. 73,30,069/- was made in the case of the assessee for the A.Y. 2010-11." 4. The CIT(A) held as under:- "Appellant in the written submissions argued that B) No oral agreement contradicting/varying the terms of document could be offered. (i) Paramjitsingh v ITO, (2010} 323ITR 588 (Pun & Hry) (ii) SmtSunita Dhadda vDCIT, ITA No. 751/JP/2011 (A.Y.2008-09) ITAT Jaipur Bench "A" Jaipur. (iii) Hanumant Kumar Talesra v ITO ward-2 (1), Udaipur in ITA No. 383/JU/2008 (A. Y. 2004-05). It is respectfully submitted that following 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date. The ratio laid down that, it follows that no oral agreement contradicting/ varying the terms of a document could be offered squarely applies to the facts of the case in terms of the express clause cited above. Once the aforesaid principle is clear then the ostensible sale consideration disclosed in the sale deed dated September 24,2002 (A-7) has to be accepted and it cannot be contradicted by adducing any oral evidence squarely applies to the facts of the Appellant's case in as much as that the Appellant (Shri Ajay. S. Patel) was not a party to the banachithi dated 18-01- 2005 and he was a party to the sale deed executed on a later dates i.e.25-7- 2005, 2-8-2005, 16-1-2006 and 10-07-2007 particularly 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. C) Addition made on suspicious. Umacharan Shaw & Bros v CIT, (1959) 37ITR 271 (SC). "suspicious how so ever strong cannot take t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant assessee has not made the said investment but was made by third party. Therefore, on this count only no additions u/s.69 could have been made in the financial years immediately preceding the assessment year/s in question. In view of this the other two ratios laid down by the Honorable High Court are not to be looked into at all as all these three conditions shall have to be fulfilled simultaneously and if the first condition is not satisfied then the others need not be discussed at all. However for the sake of clarity it is-respectfully submitted that the appellant assesses is maintaining regular books of account and the A.O. has worked out the difference for making additions on the basis of balance sheet prepared upon closing and adjusting such books of account. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered agreement to sell can be cancelled / annulled only by way of a written registered document. However, no such requirement of law is postulated under The Registration Act in the case of unregistered agreement to sell because right created by unregistered agreement to sell is not enforceable. So far the appellant is concerned he can claim this right into the properties in question on the basis of 'Sale Deed' registered in his favour and he can be held responsible to explain the source of sale consideration mentioned in the Sale Deed. But, he cannot be called upon to explain qua the transaction effected between third party/s. In the instant case the A.O has fastened the liabilities of the third party/s to assessee. Interestingly, the A.O. failed to appreciate that the land in question was not transferred by the Power of Attorney holder in favour of assessee, against the assessee. Further, it is submitted that the A.O. has not brought on record any evidence in support of his conjecture that the appellant paid any money in excess of the sale consideration recorded in the Sale Deed. Merely, on the basis of surmises no addition can be made and if so made cannot be susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded that the seller has to get the buyers name entered in all government and semi government records. And for this land whatever paper work, acts, procedure is to be done and for that "I (Vishnubhai) have for and on mv behalf given powers to Shri Vivekbhai Prahladbhai Patel, therefore he is empowered to do the following acts as mv Power of Attorney holder" (kindly refer to P.B.Page No 106 of Paper book-l). It is not the case ofA.O. that Shri Vivek P. Patel negotiated on behalf of the appellant or he was benamidar of appellant. Neither in the statement recorded the seller of land has stated that Shri Vivek P. Patel acted on his behalf in pursuance of this power of attorney nor there is any evidence on record that it has been used to get the land transferred in my name in any of the government record. Under these facts and circumstances of the case the A.O. is not justified in making addition in appellant's case. Therefore, same deserves to be deleted. It is submitted that addition deserves to be deleted on both legal and factual grounds. It is submitted that A.O. has wrongly applied section 69 while framing the Assessment Order and in the reasons regarding for issuance of notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 or 69B, it is necessary to show that investments have been made in the financial year immediately preceding the relevant assessment year and the same were not recorded in the books. In this case, there is no- such material on record on the basis of which it can be concluded that appellant made any such investment in the relevant financial years. (viii) As mentioned earlier, protective addition was made in the case of Shri Vivek Prahladbhai Patel for A.Y. 2005-06, 2006-07 and 2007-08. The addition for all three years have been also confirmed by the undersigned vide order dated 28/12/2012 in Appeal No. CIT(A)-III/235,237&236/AC-CC2(2)/l 1/12. 20. I, therefore, hold that AO is not justified to make in the case of appellant towards purchase of these plots of land. The additions of Rs. 6,52,10,209/- for A.Y. 2006-07 and Rs. 1,91,00,780/- for A.Y. 2008-09 are directed to be deleted. Ground No.3, 4 & 5 of the appeal are allowed for both the years." 6. The DR has filed written submissions which are to quote as under :- a. The assessee is not a party to the agreement dated 18-1-2005 between Somabhai Prajapati and Vivek Prahladbhai Patel, concerning the land purchased by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vek Patel purchased it from the Prajapati's. 6. It may also be noted that while Vivek Patel entered into the agreement with the Prajapati's on 18-1-2005, he started selling the relevant land to the assessee Ajay Patel from 25-7-2005 onwards. 7. It is inconceivable that Vivek Patel will sell the land at a lower rate than the price at which he bought it. In any case, no fall in prices has been proved. 8. The seller of the land the Prajapati's has offered capital gains on the enhanced value of the land and not on the documented consideration. 9. It is clear that Vivek Patel is making false statement when he says in his C.E. by Ajay Patel on 14-8-2012 [CIT[A]'s page 35, Q. 11 Ajay S Patel] and reexamination on 4-9-2012 page 38 CITA[A]'s Q. 10, that he has been knowing Ajay Patel only after the search of Somabhai Prajapati. The POA reveals that Vivek Patel knew Ajay Patel at least six months before the search in the course of his dealings relating to block no. 513. It should therefore be concluded that all statements made by Vivek Patel not supported by documentary evidences, should be disbelieved. 10. The assessment order in this case though mentioned as protective, is a subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2008-2009ITA No 2368/A/2013 A.Y. 2010-2011 ITA No 2587/A/2013 & Cross Objection No 39/Ahd/2014 A.Y. 2006-07 Cross Objection No 40/Ahd/2014 A.Y. 2008-09 Cross Objection No 41/Ahd/2014 A.Y. 2010-11 SYNOPSIS & SUMMARY OF ARGUMENTS A REVENUE'S CASE, RESPONDENT ASSESSEE'S BRIEF CONTENTION ON IT AND ON ADDITIONAL GROUND NO. 1 & 2 * The controversy revolves round a Xerox copy of an unregistered banachitthi found and seized from the premises of Shri Somabhai Prajapati at Khodal Bhavan, Khodiyar Krupa Bunglows, S.B.Trust wadi, Nava Vadaj, Ahmedabad. As per the banachitthi certain plots of land as enumerated in the Assessment Order were agreed to be sold by Shri Somabhai Prajapati to one Shri Vivek P Patel. * It is observed by the A.O. that the document is acknowledged by Shri Vivek Patel to have been signed. It is further observed that out of the nine plots of land as mentioned in banachitthi all of them were not transferred since five of the plots could not be transferred due to pendency of disputes in Civil Court. * It is further observed that in place of plots agreed to be transferred wherein the disputes were pending; the other four plots in the nearby vicinity were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned banachitthi) is to be cancelled by way of a written agreement that would wholly apply to the proposition that if any addition to the term of contract is to be made it should also be in writing. An agreement has to be read in accordance to the terms recorded into the agreement. In the agreement there is nothing stated that the land is required to be transferred in favour of the persons specified by Shri Vivek Patel. The oral evidence cannot overwrite or take precedence over the written document, as per the settled Law if there is any documentary evidence that should always have precedence over the oral evidence. A conjoint reading of both the banachitthi and the Sale Deed would make it clear that the case of revenue is baseless, since the entire addition has been made only based on inference drawn from the copy of banachitthi which was cancelled by the executors of the same. Thus it is a case of no evidence. * The A.O. has categorically observed that (Para 4.5 of Assessment Order) " Shri Vivek P Patel has entered into banachitthi have been sold by Shri Somabhai and others mentioned above to purchase lands at the rates mentioned therein. The lands as recorded in the banach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Sale consideration from Vivek Patel or through the agent of Vivek Patel. * There is a finding that land was transferred as described in banachitthi by A.O. but major part of the land described into the Sale Deed does not figure in the banachitthi. * There is also no evidence suggesting that the sale consideration paid by the appellant upon execution of the Sale Deed was returned to him. * The major part of sale consideration was paid by the appellant through banking channel. No evidence has been placed on record by the A.O. that this amount was received by the appellant from Vivek Patel for making payment to Somabhai Prajapati. * Conversely, there is also no evidence placed on record suggesting that the assessee paid money to Vivek Patel for making payment to Somabhai Prajapati. * Undisputedly Somabhai Prajapati has categorically stated that there is no other proof than the agreement to sale to demonstrate that the land was transferred on the instruction of Vivek Patel. * Further in the peculiar facts & circumstances of the appellant's case the authorities below firstly, wrongly invoked the provision of section 69 of the Act and secondly applied it wrongly. In the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection:- The Ld.CIT(A) has erred in holding that issuance of notice u/s.148 was perfectly justified and thereby conforming the action of the A.O. in as much as that there was no relevant material available on record on which a reasonable person could have formed a requisite belief and therefore in the absence of any such material no belief could have been formed as there is no cause or justification to support the reason. 3. Ground No.2 of cross objection:-In view of the binding ratio laid down by the Hon'ble jurisdictional High Court of Gujarat in Ushakant N Patel v CIT, 282 ITR 553 (Guj) that:- Firstly it was incumbent upon the A.O. to establish that said investment i.e. the alleged amount paid on account of impugned banachitthi dated 18-01-2005 was infact 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 those such investments have been made in the financial year/s immediately preceding the assessment year/s in question. And on the facts and circumstances of the appellant case:- (i) It is established and proved beyond doubt that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (i) the land in question has been agreed to be sold by the vendor to the buyer in terms of above mentioned 7 conditions. (ii) the conditions thereof were agreeable to both the parties. (iii) the same will(shall) be acceptable and binding to the seller and their decedents, legal heir & heritance. Therefore, the buyer was required to perform on condition No.1 & 2 only after fulfillment of conditions No.3 to 7 by the seller alone and not otherwise. The above referred clause therefore clearly speaks that: (i) the land in question has been sold by the vendor to the buyer in terms of above mentioned substantive conditions only. (ii) since the seller was under heavy obligation to perform and subject to fulfillment of substantive condition No.3 to 7 above by the seller than all the 7 conditions are agreeable to both i.e. seller & buyer. (iii) as per the last sentence of this clause only the seller is bound unilaterally and the buyer cannot be forced to be bound or treated as bound on account of this Banachitti particularly in view of the specific clause above and also due to non-inclusion of such specific condition to this particular effect. In other words it is a speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed block of lands in favour of Shri Vivek Patel ,on fulfillment of the laid down terms which relates to performance or discharge of the contract. In other words on the peculiar facts and circumstances of the case the contract is also void or voidable and may kindly be treated as such as if it never existed. 5. It is the say of the A.O. that since agreement to sale made is in writing and is a legal contract and therefore any legal contract will hold good until cancelled by way of any other legal contract and neither such cancellation agreement was found during the course of search nor furnished by the appellant during the assessment proceedings. The appellant says and states that the very foundation of the case is based on the sale documents registered in favour of the appellant as made available to the A.O. by the appellant himself and the additions u/s.69 are made by working out the difference of sum appearing in the Banachitthi and amount specified in the registered Sale Deed. But as per P.B. Page No.129 & 130 in the terms laid down at serial No.14 it has been specifically stated by the seller as under :- "We the seller additionally undertake and assure to the purchasers th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusively between the sellers of the land and the Appellant. 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 ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dist: Ahmedabad and marked as Supplementary Paper Book Page Nos. 397 to 422. Now the facts emerging from the reading of all the documents is 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 of parties and signatory to it. On the other hand the same Chandubhai Prajapati was not owner of Block Nos. 502 & 505 as on 18/01/2005 i.e. date of signing banachithi, but his name was entered on 9/7/2007 by Registered Sale Deed. d) Block Nos. 502 & 505 were sold on 14/5/2010 to Dhirubhai Amin by Chandubhai A. Prajapati himself by the Registered Sale Deed as relied by the A.O. e) By a clear and specific undertaking Shri Chandubhai Ambalal Prajapati has stated in the above said Sale Deed dated 14/5/2010 as narrated in the highlighted portion above in bold letters at para i) above (SUPRA) i.e. that we have never ever given any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 69B can be made in both the cases and therefore, the additions made may also be deleted in full. C CONTRADICTION IN BRIEF EMERGING FROM THE STATEMENTS OF SHRI SOMABHAI PARAJAPATI AND HIS SON PANKAJ PARAJAPATI ON MATERIAL ISSUES: A. ABOUT 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.6: Where is the original banachitthi? Ans: The original might be with them, because they had paid us. Hence the original might be with them. (2) Statement - Cross examination of Shri Somabhai Prajapati on 14/08/2012 by Vivek Patel [Kindly refer to P.B. Page No.434] Q.2: I am showing you a copy of banachitthi dated 18/1/2005. Please state whether you entered into monetary transaction prior to this banachitthi? Ans: I had no monetary transaction before the above banachitthi, with Vivekbhai. Q.8: The amount of money as per condition of agreement to sale had to be paid after they are fulfilled and last date stipulated was up to 25/04/2006 please state as to whether any supplementary agreement to sale was executed for making such modifications of the above banachitthi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly we were prepared to purchase the lands at the rates stated the banachitthi. What have you to say? Ans: In reply, I have to state that all conditions of clauses 3 to 7 are not fulfilled because in some part of lands they involved Civil Court litigations which were pending hence all conditions were not fulfilled. However, we had a deal for about 50 bighas of land of other survey numbers. But due to above litigation we had completed the deal for that later on. Q.6: When conditions of clauses 3 to 7 of banachitthi were not fulfilled then can you say when the conditions were fulfilled? Ans: It is stated that as stated in col.4 of banachitthi Block No.505& 502 were cleared after some time and document for Block No. 500 was done in F.Y.2005-06 and in respect of Block No.540, title is not cleared as yet over and above I have to state that other compliance of condition of banachitthi is as stated in above ans. No.5 (2) Cross - Examination of Shri Somabhai by Ajay Patel on 14/08/2012 before A.O. [Kindly refer to P.B. Page No. 193] Q.12: Now see condition no.5 of banachitthi in which it is written that you have to pay the premium and convert into old tenure the land of Block No.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anachitthi in cash and even some documents were not executed. Please state as to how Vivekbhai gave you such a huge amount in full without any security, writing or lien? Ans: Against the agreement to sale, we executed some of the sale deeds but against remaining documents we have not given any security, writing or lien to Shri Vivekbhai. (3) Cross-Examination of Somabhai by Ajay Patel on 14/08/2012. [Kindly refer to P.B. Page No. 192] Q.6: When did you receive this amount and how? Ans: This I have already replied in Ans 4-9 of my statement dated 14/12/2011 Q.7: You say different persons from his office were coming and giving you the money. Please give name of any such person? Ans: I don't know the name of any one, the receipt of money was confirmed with Vivekbhai by talking on phone. Q.8: In how many installments you received money? Ans: I received the money in about 15 to 20 installments. Q.9: When such a big amount is involved and you received in 15-20 installments (you have not received money on the stipulated date per banachitthi), then you must have kept date wise record. Please produce the said record: Ans: No, sir, I have not kept such record. Q.11: Hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. I don't know him much. As and when sale deed was to be made, it was getting prepared by Vivekbhai through his Advocates and signatures of myself as well as my family members were taken in the office of Sub- Registrar. (2) Statement Cross - Examination by Vivek Patel on 14/8/2012 of Somabhai Prajapati [Kindly refer to P.B. Page No. 435,436, 438 & 442] 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 sale 14.60 bighas of land? Please explain. Ans: In reply I have to state that we are not full owners of 14.60 bighas of land shown in banachitthi but as stated in 509, we are not full owners but in 509 B which is half the area as shown above,we are the owners. Q.5: I invite your attention to clauses 3 to 7 Page 2 & 3 of banachitthi according to which if all conditions are fulfilled then and only we were prepared to purchase the lands at the rates stated the banachitthi. What have you to say? Ans: In reply, I have to state that all conditions of clauses 3 to 7 are not fulfilled because in some part of lands they involved Civil Court litigations which were pending hence all conditions were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [Kindly refer to P.B. Page No. 476 & 477] Q.4: Please state what does paper 112, 113 &118 reveal? Ans: On the back side of pages 112,113 & 118 of Anne. A.22 are written block numbers which reveals disputed blocks. Page no. 118 reveal details of block number, area, bighas and where sale deed executed or not against them. And status of 'Disputes' is written which papers are of the opposite party in banachitthi. Q.5: Please explain how come these papers 112,113 &118 are lying in your house when they are stated to be of other party? Ans: Whatever is written therein relate to details of land wise disputes which were sent by their office for obtaining clearance, for which execution of sale deeds were pending. Back side of paper 118 and 111,112,113 are documents received together wherein detailed account is mentioned and it is written in respect of pending documents which are got to be cleared. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS * In his statement u/s 131 dated 14/12/2011 before A.O., in replying question No. 3 he stated that Sale deeds for block No. 504,494, 509 & 500 per banachitthi were executed, but remaining blocks were affected by Civil Suits hence were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STATEMENTS (1) Statement u/s 131 dated 14/12/2011 before the A.O. of Somabhai Prajapati [Kindly refer to P.B. Page No. 182 & 183] Q.09: When and in what manner did you received this amount? Ans : I have received these amounts in cash on behalf of Shri Vivek Prahladbhai Patel as per the Agreement to Sell on the dates as mentioned in the Agreement to Sell- January 2005, June 2005, November 2005 and April 2006 or on the nearby dates, in the ratio mentioned in the Agreement to Sell. And these amounts were being sent to me by different persons from the office of Shri Vivek Prahladbhai Patel. And I was giving them the proof for having received the said amount, by writing in their Diary "Money received" and putting my signature. This diary was being taken back by them and its confirmation was being taken by Shri Vivekbhai on phone. Q.10: In the sale deeds executed, the name of purchaser is shown as Ajay Surendrabhai Patel. And in none of the documents name of Vivekbhai Prahladbhai Patel is mentioned either as purchaser or as conforming party. Then how can you say that this amount is given to you by Vivekbhai? Ans: In replying this, I want to say that the entire deed was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numbers. I have not shown the remaining amount in the return. In this connection, we three brothers have signed and filed disclosure petition in your office admitting that out of Rs. 13,02,00,000/-, amount of Rs. 5,00,00,000/- is disclosed by my son Pankaj in his statement u/s 132(4).We have disclosed Rs. 7,40,00,000/- as undisclosed income from above transaction. I confirm the above disclosure and repeat the undisclosed income of Rs. 13,00,00,000/- which includes Rs. 5,00,00,000/-declared by my son. Out of above, Rs. 12,40,00,000/- is the on money received in the above land and balance of Rs. 60,00,000/- are declared against paper or asset that may be found. The year wise working of disclosed income will be given later on. (2) Statement u/s 132(4) dated 08/12/2009 of Shri Pankaj S Prajapati before ADIT. [Kindly refer to P.B. Page No. 467 & 468] Q.20. I Show you the papers at Annexure A-10 which were found during the course of search today from your premises. There appear many cash transactions. Out of this, I am showing you Page no 18 to 105, so please explain in detail ? Ans: The above seized papers (Loose Papers) relate to our business (Business related to Bricks) and of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. amount as per document (as per table above para 5.1 of the assessment order) as claimed by Somabhai Prajapati that it was given back in cash on execution of the register sale deed which works out at Rs. 1,55,10,521/-. No Fund flow for this outgoing is neither supplied by the A.O. nor placed on record (Body of Assessment Order). On the other hand the disclosure of Income in the hands of respective owners of the land in their proportionate share is disclosed as Long term capital gain in A.Y.'s 2006-07, 2008-09 and 2010-11 by claiming equal amount of deduction u/s 54B of the Income Tax Act by the members of Prajapati family. Though it is not the case of appellant but what the appellant tries to bring on record is that Shri Somabhai Prajapati and his other family members are not as straight forward as it is being projected by the revenue authorities but he was assisted by Legal Eagles and Accommodated by the authorities below in as much as that neither this out flow of cash was considered which tantamount to reduce the availability of fund to make investment and thereafter to claim deduction u/s 54B of the Act nor the provisions of section 2 (47) of the Income tax Act 1961 read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has not discharged their onus by bringing on record the alleged sale consideration was received from the assessee. * Contract cannot be in vacuum, the rights unto a property are transferred by way of a written and registered document. The case as built by A.O. is that a written agreement was cancelled and a new oral agreement was made on the basis of which the land was sold to third party. * Nothing has been placed on record that the so called third party has any link with assessee. * How can a person entrust such valuable rights to a stranger. * Can the settled principles of law be ignored merely for the sake of making addition. * The revenue is making the assessee liable to tax on the basis that a banachitthi that was executed between the assessee and Somabhai Prajapati. It would be appropriate to produce the terms & condition of the so called banachitthi. The relevant conditions are separately reproduced in the synopsis under the head Banachitthi. * Both the parties to the banachitthi were required to comply with the conditions as stipulated in the banachitthi. * Undisputed facts remain that Shri Somabhai Prajapati failed to comply with the conditions as stipulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities below failed to appreciate the fact that it is a common practice in real estate business that the land is sold to the third parties ignoring the earlier banachitthi with someone. * Therefore, the banachitthi cannot be a concluding document in the light of the fact that there is no evidence suggesting that the sale consideration was paid out of the fund of assessee and at the instance of assessee. There is nothing on record that money was handed over by the assessee or paid by the assessee but the entire addition is made on the basis of a concocted story. * Undisputed facts remain that no documentary evidence suggesting that money was paid by the assessee from his possession or from the business premises or residence. * It is an undisputed fact that Shri Somabhai Prajapati in his cross-examination has stated that there is no evidence to prove his contention that on money was given by assessee. Therefore, admittedly it is a case of no evidence. * Strangely the authorities below failed to appreciate the statement made by Shri Somabhai that whenever alleged person of assessee came for handing over money he took signature of Prajapati in diary. Out of the total alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only his primary burden in explaining both the above two propositions but proving it to be true and all other presumptions which may be raised in this behalf on banachitthi and the terms under its reference. On the other hand the department in effective and convincing terms has failed to rebut the same except giving some general observations that the claim cannot be considered and on two other counts that 1.)the sellers have disclosed the same and offered it as income under the head capital gain and 2.) Shri Somabhai S. Prajapati's statement that the mutation of those plots referred in Banachitthi and other plots in lieu of those not cleared in the name of third parties as per oral direction of Vivek Patel. Significantly the appellant has proceeded with his line of arguments in defense before the Ld. CIT(A) on the same premises as has been done by the A.O. by opening with the following sentence that: "Then the submissions of the appellant on each of the reasons can be judged in the same prospective as has been done by the A.O. by which the A.O. has based his decision on the grounds." (Please see submissions of Ajay S. Patel in P.B.-II Page Nos. 233 to 396) Also in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RULE 5 OF RULE 18 OF INCOME TAX (APPELLATE TRIBUNAL)RULES,1963 TO CRAVE LEAVE TO SUBMIT SUPPLEMENTARY PAPER BOOK. MAY IT PLEASE THE HON'BLE MEMBERS OF THE BENCH, With due respect to the Hon'ble Members of Ahmedabad 'C' Bench of Income Tax Appellate Tribunal, Ahmedabad, the respondent assessee begs to state as follows: A. PRELIMINARY: (1) That the applicant - respondent has been assessed to Income tax by the Deputy Commissioner of Income Tax. Central Circle 2(2) Ahmedabad, bearing PAN: AETPP8820Q. (2) That while framing the assessment for A.Y. 2008-09, the Assessing Officer had made an addition of Rs. 1,91,00,780/- towards deemed income u/s 69 of the Act as per his order u/s 147 r.w.s 143(3) of the Act dated 18-01-2013. (3) That being aggrieved by the impugned order, the respondent preferred an appeal before the Learned Commissioner of Income Tax (Appeal) III Ahmedabad, who has deleted the impugned addition vide appellate order dated 10-07-2013. (4) Aggrieved, the department has preferred Second appeal before the Hon'ble tribunal which is registered at ITA.NO.2368/Ahd/2013. (5) Incidentally, the respondent has also filed C.O. on 27-02-2014, raising ground of cross o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndled by another Counsel. Since the additions were made in all the three assessment years under appeal on the basis of eight registered Sale Deeds executed in favour of respondent, his arguments before the Ld CIT(A) were mainly confined around these eight registered Sale Deeds and the appeal was allowed by deleting the additions made u/s 69 of the Act for all the three assessment years. (5) As narrated in sub paragraph 4 & 5 of part A under the head Preliminary above, appeal and Cross Objections were filed by the department and respondent respectively. (6) The appeals and Cross Objections are pending for hearing. During the course of prepration of the case for argument before this Hon'ble Bench and on deeper scrutiny, the respondent has been in a position to analyse that registered sale deed No.8510 dated 13-05-2010 in respect of sale of block No. 502 & 505 as has been relied by the Assessing Officer, it has been established on record that the party of the first part namely Chandubhai Ambalal Prajapati has categorically stated on bottom of page 7 & top of page 8 of the said Sale Deed that he has never ever given away the land under consideration by way of sale, mortgage, or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 18/1/2005, the search was conducted on 8/12/2009 & the disclosure was made under the head Capital Gain by the respective owners of land though all were not parties to banachithi, Shri Chandubhai Prajapati has consciously and specifically stated to give the aforesaid assurance & undertaking which clearly goes to the root of the matter and the issue to be decided as to whether 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 admitted and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; In the land records of form Nos. 7 & 12 of the lands of Block No. 505 and 502, the name of Government is entered. Hence, the payment for the same is not to be made at present but the same is to be paid at the time of second installment. During that period, the seller get cleared the entry in the name of the Government. (see clause No.4 of Banchitthi at P.B.-I Page No.7&8) The land of Block Nos. 500 and 540 is sold by the seller to the purchaser on a condition of it being the land of Old Tenure [on a condition not to pay premium at the time of non-agriculture]. But if at the time of non-agriculture or at the time of certificate of Solicitor, if it is found to be of New Tenure, then the premium shall be paid by the seller. (see clause No.5 of Banchitthi at P.B.-I Page No.8) In the land of Block No. 540, a stay order is passed by the Ld. Gujarat Revenue Tribunal vide its order No. T.E.N.N.A./412/96[7] dated 10-6-96 and as per the provisions of Section 32 to 7{B}{B}{8}, it has gone in 'Gharkhed'. By removing its orders, the same shall have to be brought in the position of land of Old Tenure. (see clause No.6 of Banchitthi at P.B.-I Page No.8&9) The land of Block No. 500 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it was not to be made then but, was to be made at the time of Second installment and as per the schedule of payment it was to be made on 20/06/2005. In other words, after signing of the Banachitthi on 19/01/2005, the first payment being 50% as that of 20/01/2005 and 20/06/2005 was due on 20/06/2005 which is falling in the Financial Year 2005-06 related to A.Y.2006-07. No payment for block No.505 & 502 was to be made by the assessee till Mr. Somabhai S. Prajapati clears the entry appearing in the name of Government in form No.7/12 on or before 20/06/2005 i.e. due date of payment of second installment but Shri Somabhai S. Prajapati failed to clear the entry in the name of Government as appearing in extract of 7/12 record before the said date i.e. 20/06/2005, due date of payment of second installment. Neither the revenue department nor Somabhai Prajapati has placed any evidence to establish that the condition of clause 4 was fulfilled. Non fulfillment of this condition was the reason for cancellation of banachitthi. Block No. 540 remains unsold due to the fact that the defects were not cleared and no title certificate was even obtained and given. (Kindly refer to Ans. No. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Gujarat delivered in the case of General Motors India P. Ltd. as reported in [2013] 354 ITR 244/257 (Guj.). In view of the binding ratio as laid down by the Jurisdictional High Court, the notice u/s 148 and the assessment order passed under the Act may kindly be quashed by respectfully following the same. Place: Ahmedabad Date: 29-9-2014 Respondent" 8. We have heard the rival submissions and perused the orders of the lower authorities and material available on record. The assessee purchased the following plots of land vide Registered Deed of Sale from the Prajapati's as under:- Sr.No Block No. Document No. And Date Amount as per Document. Asst. Year. (1) 509 5581 -25/07/2005 6,50,000 2006-2007 (2) 500 5812 - 02/08/2005 4,00,000 2006-2007 (3) 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 6,52,10,209 was made in the assessment year 2006-07, Rs. 1,91,00,780 was made in assessment year 2008-09 and Rs. 73,30,069 was made in the assessment year 2010-11 in the hands of the assessee u/s. 69 of the Act being undisclosed investments. 13. On appeal, CIT[A] deleted the above addition on the ground that the seized agreement of sale was executed between the seller an Shri Vivek Patel, and no material has been brought on record to show that the assessee actually paid amount in question during the FY preceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial 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 objection filed by the assessee under section 148 of the Act and assessment order has been passed or the order deciding an objection under section 148 of the Act has not been communicated to the assessee and assessment order has been passed or the objection filed under section 148 has been decided along with the assessment order. If the objection under section 148 has been rejected without there being any tangible material available with the Assessing Officer to form an opinion that there is escapement of income from assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
