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TMI Blog2017 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of India. 2.1. A similar notice has been issued and the assessment year 2009-10 is sought to be reopened in the case of another assessee Alpesh Gokulbhai Kotadia, the said assessee Alpesh Gokulbhai Kotadia has preferred Special Civil Application No.21741 of 2016 challenging the impugned notice under Section 148 of the Income Tax Act. 3.0. For the sake of convenience, the facts of Special Civil Application No. 21691 of 2016 are narrated, which are as under: 3.1. That the assessee is partner in various firms and deriving income from business and other sources. The assessee filed return of income for AY 2009-10 declaring total income at Rs. 4,73,750/- on 22.03.2010. 3.2. A search under Section 132 was carried out at the business as well as residential premises of partnership firms of the Infrastructure Group of cases along with assessee on 19.01.2011. The assessee did not offered any additional income in the return filed in response to the notice under Section 153 A of the Act. That in the order passed under Section 143(3) r/w Section 153 A of the Act, returned income was accepted by the department after making detailed inquiry. 3.3. That subsequently a notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. Name of the seller Name of the Purchaser Amount of consideration 1 No. SRT/1/ATV/11509/2008 Area 14397 sq yrds. Shri Chintanbhai Jadavbhai Patel Shri Popat Harjibhai Kakadia 30,09,500/- 2 No. SRT/1/ATV/ 13004/2008 Area 8336.051 sq yards Shri Rajendrakumar Kantilal Patel & Shri Paraskumar Natwarlal Patel Shri Popat Harjibhai Kakadia 10,25,000/- 3 No. SRT/1/ATV/13002/2008 Area 7577.793 sq yards Shri Prakashbhai Vallabhbhai Sutaria Shri Popat Harjibhai Kakadia 15,75,000/- 5. While recording the statement of Shri Rajesh Vaghani, one of the key person of Vaishno Devi Group was specifically asked to explain this entry found in provisional P & L Account of M/s. S.R. Corporation. In answer to this question, it was stated by him that this entry pertains to the land brought by one of partners of the firm Shri Shri Popat Harjibhai Kakadia as his capital in the firm M/s. S.R. Corporation, it was further stated that Shri Popat Harjibhai Kakadia has purchased this land from (1) Shri Chintanbhai Patel, (2) Shri Rajendrakumar Kantilal Patel and (3) Shri Prakashbhyai Vallabhbhai Sutaria for a consideration of Rs. 56,39,500/. In addition to this, the firm has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d total consideration as per sauda chitthi comes to Rs. 18,79,58,511/- . As per the reasons recorded as the sale deed which was made by different sellers sale consideration was less than what was recorded in sauda chitthi and recorded consideration of Rs. 56,39,500/- and therefore, AO was of the opinion that difference between Rs. 56,39,500/- ( as mentioned in the sale deed) and Rs. 18,79,58,511/- ( as per sauda chitthi) is received by the assessee i.e. Vinodbhai Ravani (Petitioner of Special Civil Application No.21691 of 2016) and Alpesh Kotadia (Petitioner of Special Civil Application No.21741 of 2016) in cash and therefore, according to the AO the income to the extent of Rs. 18,79,58,511/- has escaped assessment. 3.5. On receipt of the reasons recorded to reopen the assessment for AY 2009-10, the petitioner assessee by letter dated 1.6.2016 objected to the reassessment proceedings and requested for sized material / documents and statements recorded for raising detailed objections. On receiving the details, thereafter the petitioner raised the objection to the reassessment proceedings with detailed submissions. The reassessment proceedings were objected by the assessee mainly on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 of the Act. 5.1. It is vehemently submitted by Shri S.N. Soparkar, learned counsel for the assessee that the assessment for AY 2009-10 is sought to be reopened by the AO solely relying upon the sauda chitthi recovered at the time of search of the premises of one Shri Rajesh Vaghani and that the statement of Shri Rajesh Vaghani, recorded during the course of search. It is vehemently submitted that as such the sauda chitthi was made on 12.03.2008 by the assessee as one of the seller which was immediately got cancelled on 26.03.2008. It is submitted that even thereafter also no transaction has taken place between the petitionerassessee and any other person and it has come on record that subsequently the sale deed was executed by the original lands owners in favour of one Shri Popat Kakadiya. It is submitted that entire sale consideration was received by the original land owners Shri Chintan Patel, Shri Rajendra Patel and another. It is submitted that therefore, as such no sale consideration was received by the petitionerassessee. It is submitted that as such there is no material / tangible material available with the AO to form any belief that any amount was received by the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sauda chitthi is not made in the year under consideration, there cannot be any income escaped from those transactions during the year under consideration. It is submitted that the assessee is following mercantile system of accounting as is clear from the assessment order. It is submitted that therefore, also learned AO has materially erred in reopening the assessment for AY 2009-10 on the ground that income chargeable to tax has escaped assessment for AY 2009-10 within the meaning of Section 147 of the Act. Making above submissions and relying upon the above decision, it is requested to allow the present petitions. 6.0. Present petition is vehemently opposed by Shri Sudhir Mehta, learned counsel for the revenue. It is submitted that the sauda chitthi dated 12.03.2008 was signed by the respective petitionersassessee, in which, sale consideration was stated to be Rs. 18,79,58,511/- . It is submitted that however, subsequently when sale deed was executed it has been found that sale deed is executed for sale consideration of Rs. 56,39,500/- only. It is submitted that therefore, even Shri Rajesh Vaghani one of the key person of the Vaishno Devi Group from whose possession sauda chit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the revenue. 7.1. From the reasons recorded, it appears that on the basis of the statement of Shri Rajesh Vaghani recorded during the course of search proceeding on 28.11.2013 in Vaishno Devi Group and on the basis of one sauda chitthi dated 12.03.2008 signed by the respective petitioners, according to the AO, the sale consideration for the land in question comes of Rs. 18,79,58,511/- and subsequently when the sale deed has been executed, the same is for sale consideration of Rs. 56,39,500/- and therefore, the balance amount of Rs. 18,23,19,011/- can be said to have been received by the petitioners assessee in cash as on money and therefore, the same is required to be added into their income and therefore, AO has formed a belief that the income of the assessee has escaped assessment to the extent of Rs. 18,23,19,011/- during the AY 2009-10. 7.2. However, it is required to be noted that the respective petitionersassessee were never owners of the land in question. It is also required to be noted that in fact the subsequently sale deeds are executed by the original land owners in favour of one Shri Popatbhai Kakadia. It is an admitted position that the respective peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t during AY 2009-10. In case of both the assessee the resultant effect would be that according to the AO Rs. 36,46,38,222/- is received in cash. If the difference is found to be Rs. 18,23,19,011/- ( in case of each petitioners), it can be said to be non application of mind. No reasonable and prudent person would form such a belief. Under the circumstances also, on the aforesaid ground alone, the impugned reassessment proceedings cannot be sustained. On the aforesaid ground, the present petitions are required to be allowed by quashing and setting aside the impugned notices under Section 148 of the Act. 7.5. As observed herein above, even as per the statement of Shri Rajesh Vaghani, the sauda chitthi was immediately cancelled. There is no tangible material along with the sauda chitthi that any sale consideration is received by the respective assessee. As observed herein above, subsequently the sale deeds have been executed by the original land owners in favour of one Shri Popat Kakadiya and the original land owners have received full sale consideration of Rs. 56,39,500/- . Under the circumstances, it cannot be said that any income had accrued to the assessee. Once no income had accr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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