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TMI Blog2017 (3) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... ivil Application No. 21610 of 2016 has been preferred by the petitionerassessee Shri Paras Natvarlal Patel for appropriate writ, direction and order to quash and set aside the impugned notice dated 23.03.2016 under Section 148 of the Income Tax Act, 1961, by which, the Assessing Officer has sought to reopen the assessment for AY 2009-10 alleging inter alia that income chargeable to tax for AY 2009-10 has escaped assessment within the meaning of Section 147 of the Income Tax Act. 3.0. For the sake of convenience, the facts of Special Civil Application No. 21609 of 2016 are narrated, which are as under: 3.1. That the petitionerassessee filed return of income on 22.09.2009 showing Short Term Capital Gain of Rs. 3,52,415/- . The said capital gain was computed by deducting cost of acquisition at Rs. 1,60,085/- from the sale price of Rs. 5,12,500/- . The return was accepted under Section 143(1) of the Act. That the above computation of Short Term Capital Gain was arising from the sale of one half share in the land situated at Village Vankala, revenue survey no. 41, block no. 49 A admeasuring 6970 sq mtr for total consideration of Rs. 10,25,000/- . That thereafter, the respondent AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajesh Vaghani, one of the Key person of Vaishno devi Group: On perusal of statement it is noticed that Shri Rajesh Vaghani was when specifically asked in Question no.8 to explain the debit entry of 'Land Purchase' of Rs. 18,79,58,511/- in the provisional P&L Account of M/s. S.R. Corporation, he stated that this entry pertains to the land brought by one of the partners of the firm Shri Popatbhai H. Kakadia as his capital in the firm M/s. S.R. Corporation. It was further stated that Shri Popatbhai H. Kakadia has purchased this land from (1) Shri Chintanbhai Patel, (2) Shri Rajendra Kumar Kantilal Patel and (3) Shri Prakashbhai Vallabhbhai Sutaria. In view of the facts stated above it is clear that one of the partner of M/s. S.R. Corporation, Shri Popatbhai H. Kakadia has introduced the land at Rs. 18,79,58,511/- in the firm. The details of land are as under: Sr. Agreement No. Area Name of the Seller Name of the Purchaser Amount of consideration 1 SRT/1/ATV/11509/2008 14397.328 Sq. Yards Shri Chintanbhai Jadavbhai Patel Shri Popat Harjibhai Kakadia Rs.30,09,500 2 SRT/1/ATV/13004/2008 8336.051 Sq. Yards Shri Rajendra Kumar Kantilal Patel & Shri Paraskumar Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the purchasers or sellers in Sauda Chittihi viz, the purchasers Shri Sharad P Kakadia and Shri Rajesh Vaghani and sellers Shri Alpesh Kotadia and Shri Vinod S Ravani. It was also pointed out that none of the assessee petitioners have any connection with the SR Corporation. Therefore, it was requested to drop the reassessment proceedings. That by order dated 22.12.2016 the AO has overruled the objection of the petitioner. Hence, the petitioner has preferred present Special Civil Application No. 21609 of 2016. 3.3. Similar are the facts in the case of one another assessee Shri Paras Natvarlal Patel coowner of land sold, which is subject matter of Special Civil Application No. 21610 of 2016. 4.0. Shri J.P. Shah, learned senior counsel has appeared on behalf of respective petitionersassessee and Shri Sudhir Mehta, learned counsel has appeared on behalf of the revenue. 4.1. Shri J.P. Shah, learned counsel for the petitionersassessee has vehemently submitted that the impugned notice and reopening of the assessment for 2009-10 are absolutely bad in law. 4.2. It is vehemently submitted by Shri J.P. Shah, learned counsel for the petitioners assessee that as such there is no tangib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that as per the affidavit in reply filed by the AO, Rajesh Vaghani who is examined on oath stated that the land sold by the two was purchased at sale consideration of Rs. 10,46,000/- only and Rs. 18,23,19,011/- was spent on conversion of agricultural land to non agricultural land and for evicting unauthorized occupants of the land. It is submitted that the entire case of the respondent is on the statement of the said Shri Rajeshbhai Vaghani. It is submitted that therefore, how can any rupee from Rs. 18,23,19,011/- be added as unaccounted sale consideration received by two of the sellerspetitioners. 4.6. It is vehemently submitted by Shri J.P. Shah, learned counsel for the petitioners assessee that if the sale has taken place between the petitionerssellers and Popatbhai Kakadia on 27.03.2008, how can Shri Alpesh Kotadia and Shri Vinod Ravani entered into a sauda chittihi on 12.03.2008 to Sharda Kakadia and Rajesh Vaghani of the land which Shri Alpesh Kakadia and Shri Vinod Ravani were not owning and in that case how can unaccounted capital gain arise in case of two of real sellers of the land i.e. Shri Rajendra Patel and Shri Parasbhai (petitioners). 4.7. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were not the legal owner of the said land and they just acted as a middle man to facilitate the transfer of said land to Shri Popat H Kakadia. It is submitted that Shri Shard P Kakadia who appeared as one of the purchaser of said land in the said sauda chittihi is son of actual purchaserShri Popat H Kakadia. It is submitted that thus it is clear that Shri Vinod Ravani and Shri Alpesh Kotadia acted on behalf of the assessee and Shri Sharad P Kakadia acted on behalf of Shri Popat H Kakadia and amount mentioned in said sauda chittihi was ultimately transferred to the assessee. It is submitted that therefore, the AO is justified in forming belief that income chargeable to tax has escaped assessment for the AY 2009-10. 5.4. It is vehemently submitted by Shri Sudhir Mehta, learned counsel for the revenue that it is found from the provisional P & L account of SR Corporation, seized during the search proceedings that Shri Popatbhai Kakadia brought the land into partnership firm showing the value of land, much more than mentioned in the sale deed. It is submitted that it is found from the provisional P & L Account of M/s. SR Corporation that major entry in the debit side is "land purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chargeable to tax to the extent of Rs. 2,53,22,926/- ( in case of each petitioners) has escaped assessment within the meaning of Section 147 of the Income Tax Act for AY 2009-10. 6.2. However, it is required to be noted that the petitioners and original owners were not party and / or signatory to the sauda chittihi dated 12.03.2008. The said sauda chittihi has been signed by one Shri Alpesh Kotadia and Shri Vinod Ravani as seller, though admittedly they were not owners. Even the said sauda chittihi dated 12.03.2008 was entered into between the aforesaid two persons Shri Alpesh Kotadia and Shri Vinod Ravani as sellers and Shri Sharad Kakadia and Shri Rajesh Vaghani as buyers, however subsequent sale deeds are executed by the petitioners as owners /- sellers and one Shri Popat Kakadia on 27.03.2008. Therefore, on the basis of the aforesaid sauda chittihi, AO could not have formed the opinion /- reasonable belief that the sellers have received Rs. 5,16,91,852/as sale consideration. There is no other tangible material with the AO, by which, it can prima facie be considered that Rs. 5,16,91,852/- has been received by the sellers as sale consideration. 7.0. It is also required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale deed has been executed. Therefore, it can be said that income has arisen in the AY 2008-09 and therefore, if at all any income has escaped assessment, the same can be said to be in AY 2008-09. By impugned notice, assessment for AY 2009-10 is sought to be reopened on the ground that income chargeable to tax has escaped assessment in 2009-10. When, it was pointed out to AO that the transfer had taken place on 27.03.2008 and therefore, it can be said that the income has arisen in the year 2008-09 and therefore, there cannot be any escapement of income in the year 2009-10, while disposing of the objection raised by the assessee against the reasons recorded, the AO has overruled the said objection by observing that as the document was registered with the SubRegistrar on 25.07.2008 and the payment of Rs. 5,23,000/- with regard to said transfer was received by assessee vide cheque no. 193533 on 3.4.2008, the transfer of land as well as sale consideration has been received by the assessee in AY 2009-10 and therefore, impugned notice is valid. However, from the sale deed dated 27.03.2008, it appears that entire sale consideration has been paid vide cheque dated 27.03.208.. Even ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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