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TMI Blog2017 (9) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... nating documents seized fromthe residence of the assessee and other persons, admission of key persons of the Group u/s 132(4) and the valuation report of the DVO proving that on-money was received on sale of land by the assessee." 2. D.B. Income Tax Appeal No. 141/ 2014 "Whether the order of Tribunal is perverse in deleting the addition of Rs. 69,12,400/- on account of capital gains on sale of land, ignoring the incriminating documents seized, admission of the key persons of the Group u/s 132(4), and the valuation report of the DVO, which proved that on-money was received on sale of land by the assessee?" 3. D.B. Income Tax Appeal No.143/2014 "Whether ITAT is perverse in deleting the addition of Rs. 76,81,215/- on account of Capital gains, ignoring the incriminating documents seized from the residence of the assessee and other persons, admission of key persons of the Group u/s 132(4) and the valuation report of the DVO proving that on-money was received on sale of land by the assessee." 4. D.B. Income Tax Appeal No.144/2014 "Whether ITAT is perverse in deleting the addition of Rs. 35,91,863/- on account of Capital gains, ignoring the incriminating documents seized from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the disallowance of Rs. 16,38,750/- made by the AO u/s 54B despite the fact that the assessee did not purchase new agricultural land in his name". 4. Briefly stated, the facts of the case are tht a search and seizureoperation was conducted u/s 132 of the Income-tax Act, 1961, ['the Act', for short] on 23.07.2004 at the residentia premises of the assessee at Dhani, Naharwali Pithawas, Village Hatoj, Kalwar Road, Jaipur. Consequent upon this search, a Return of Income (ROI) was filed by him on 11.09.2006 declaring total income of Rs. 4,09,788/-. From agricultural activities, an income of Rs. 45,000/- for rate purposes was also shown. The assessee has shown income from capital gain on the sale of land. The assessee sold a piece of land measuring 105.56 bighas by 14 persons jointly to Smt. Tara Gupta w/o Shri N.K. Gupta & Smt. Chandrakanta Agrawal w/o Shri Ram Gopal Saraf. The details of land sold alongwith the name(s) of the purchaser and seller(s), are as under: Sr. No. Name of the Purchaser Name(s) of the Seller Kharsra No. Area of the land 1 Smt. Tara Gupta S/Shri Luna Saini, Prabhat Saini & Shri Sedu Saini 438 to 445 & 447 24.45 bigha 2 Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am. An unsigned agreement executed with Shree Karni Impex by Sunda Ram HUF was found wherein land was agreed to be sold @Rs. 11,21,000/- per bigha. The DVO has assessed the rate of the land at Rs. 9,31,625/- per bigina. The assessee has also purchased land by making cash payment and without making any cash withdrawals from the bank. In our considered opinion the above pieces of evidence may be relevant but not decisive for the purpose of making huge additions. When all the above evidence are pitted against the order and finding of the settlement commission in the case of purchaser, the Mangalam Group, differential view cannot be taken in the cases of sellers, as has suggested by the ld. CIT (DR). The assessee is undisputedly an illiterate person. Thus, much importance cannot be given to the statements recorded u/s 132(4) of the Act when it is stated by the reasonings of the Settlement Commission. Admittedly, no cash was found during the course of search and even the buyer was not interrogated in this regard. Therefore, the statement recorded u/s 132(4) cannot be relied on to make the addition. Further, Shri Rajesh Mali is not a party to these transactions. No opportunity to cross e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was not sold to M/sKai Impex as appearing in the agreement bat sold to M/s. Manglam Group and there is no relationship between M/s. Karni Impex and Manglam Group also indicate that the agreement has nothing to do with the sale under consideration. (iii) None of the parties, mentioned in agreement,have accepted that they have entered into any agreement with M/s. Karni Impex. (iv) Regarding the statement of some ofcoparceners most of the persons whose statements were recorded are not coparcener of the appellant HUF. No evidence was established by Ao which confirmed the statement of Shri Mangla Ram. (v) Circumstantial evidences would have playedvital role had there been no search. Once a search action has taken place at the premises of the appellant and no evidence was found regarding the receipt of cash or deposits of any cheque or any investments made by the appellant HUF or its coparcener only on the basis of third party's statement which is also not supported by any other independent evidence addition will not be justified. Addition cannot be made only on the basis of statement of some person unless it is substantiated with material on record. The AO had no such indep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th M/s Karni Impex there is mathematical equation tallying in the notings the amount received by cheque and amount received in cash in the loose paper, it cannot be sole basis for addition unless and until the amount is substantiated in material. No material was established by the A o which confirm the receipt of considerations more than the amount shown in the registered value. The circumstantial evidences could have played a vital role had there been no search. Once search action is taken place at the premises of the appellant and no evidence, was found regarding the receipt of cash or deposits or any cheques or any investments made by the appellant or its family members, only on the basis of third party statements, own retracted statements which is also not supported by any other independent evidence, the addition cannot be justified. Addition cannot be made on the basis of statements of some persons unless it is substantiated with material on record. The A. O had no such independent material on record. A search action u/s 132 is supposed to be the last resort to collect material against the assessee and in present case search action has not resulted into any recovery of any inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des, the sellers in their affidavit (pages 30 to 31 o the paper book) have affirmed that the agreed consideration for the sale of the property was Rs. 10 lacs only. It is also established position of law that an addition cannot be made solely on the basis of surrender made during the course of search or survey in absence of corroborative evidence in support. Therefore, we order to delete the impugned addition and allow the appeal of the assessee. ITA No 1506 & Co 162 SHRI NANAG RAM SAINI 10. The Revenue has raised the following grounds: "1. In the facts and in the circumstances of the case, the ld. CIT (A) has red in reducing the sale consideration from Rs. 48,59,400/- to Rs. 45,7o,000/- ignoring the statement of the assessee u/s 132(4) supported by other corroborative evidence. 2. On the facts and in the circumstances of the case, the ld. CIT (A) has erred in increasing the investment eligible for deduction u/s 54B from Rs. 8,14,000/- to Rs. 31,50,000/- relying on the statement of the assessee u/s 132(4) without any supporting evidences." 10.1 The assessee has raised the following cross objection: "On the facts and in the circumstances of the case, the ld. CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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