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TMI Blog2019 (12) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration nothing has come out to be regarded as any incriminating material or fact to reveal any cash payments by the assessees for purchase of lands in question. The addition made by the AO is solely on his own presumption of payment of cash without any tangible material or evidence in support of his decision. When the seized material found from Shri Madan Mohan Gupta as well as other material gathered during post search inquiry has not established any direct or proxy connection with the transaction of purchase of land by the assessees then the assumption and presumption of the AO that the assessee might have paid cash over and above the consideration shown in the sale deeds is only surmises and conjectures. We note that the AO of the Saini brothers and father while framing the assessment U/s 144 r.w.s. 147 of the Act dated 18.03.2015 accepted the sale consideration as recorded in the sale deeds for the purpose of the assessing the capital gain. The AO however, made additions on account of unexplained investment by them on account of cash payment reflected in the seized material. AO has not disturbed the sale consideration received by Saini brothers and father in respect of sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sturbed the sale consideration received by Saini brothers and father in respect of sale of land to the assessees before us. The said finding of the Assessing Officer in case of Saini brothers and father demolished the case of the AO presuming the payment of cash by the assessee before us for purchase the land from Saini family members. Accordingly, when the transaction of sale of land and sale consideration is accepted by the AO of the Saini family members as recorded in the sale deeds then the addition made by the AO on account of cash payment by the assessees U/s 69B of the Act has no legs to stand in the absence of any incriminating material but the said addition is merely based on assumption of the AO. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... n money payment made by the assessee for purchase of lands as found in the statement of Shri Madan Mohan Gupta as recorded U.s 132(2) of the Act in search and seizure proceedings carried out on 23.05.2013 and thereafter the statement of Shri Shanka Lal Saini and Shri Kanhiya Lal Saini were also recorded on 05.08.2013. The Assessing Officer while passing the reassessment order on 27.03.2015 has made an addition of ₹ 83,46,000/- on account of unexplained investment in purchase of land. The assessee challenged the action of the AO before the ld. CIT(A) and also challenged the validity of reopening of the assessment. The ld. CIT(A) deleted the addition made by the AO by recording the reasons that the AO has made the addition on the basis of the impounded material wherein nothing incriminating material is found against the assessee and not even an entry was found recorded in respect of the transaction of purchase of lands by the assessee from Shri Madho Lal Saini, Shri Shanka Lal Saini and Shri Kanhiya Lal Saini. Further, there is no allegation or reference of the transaction of the assessee or name of the assessee was made by Shri Madan Mohan Gupta in his statement recorded U/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in respect of the land purchased by them from the Saini family members. The ld. DR has further contended that when all the other entries on the rest of the pages recording the name of the sellers, the amount mentioned in the cheque, area of the land involved, registration expanses are accepted by the Sani's then their denied of cash entries as recorded in the seized material is not acceptable. These entries have been made/recorded by Shri Madan Mohan Gupta and since it has been admitted by Shri Shankar Lal Saini and Shri Kanhiya Lal Saini in the statement that they are not well educated so Shri Mandan MohanGupta was working as a middle man and the entry recorded by him in the seized material is giving the correct picture of the transaction. The ld. DR has further submitted that Sani's have admitted their only source of investment in lands purchased is the sale of land at Jaisinghpur to the assesseess namely Shri Arun Goel, Shri Tarun Goel and M/s Pinkcity Reality P. Ltd. Therefore, the respective amounts of on money in the hands of these three assessees total amount of ₹ 10.3 crores has escaped assessment is proved by the seized material coupled with the stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Saini have denied any payment of cash and clearly stated in their statements that they purchased the property against the payment of cheque and no cash was paid then the addition made by the AO in respect of cash payment for purchase of land by assessee is without any basis but only on the being presumption and surmises. The ld. AR has relied upon the orders of the ld. CIT(A) on this issue and submitted that in the absence of any material disclosing any cash payment by the assessees to the Saini for purchase of the property the addition is not sustainable. He has further pointed out that even in the assessment framed in the hand of Shri Madho Lal Sain, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini the Assessing Officer has accepted the sale consideration in their hand as recorded in the sale deeds. Therefore, when the sale consideration was not disturbed by the AO of these sellers then the presumption of the Assessing Officer for payment of cash over and above sale consideration recorded the sale deed is contrary to the very fact which is recorded in the register sale deed and accepted the AO by Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h his two sons Shri Shankar Lal Saini and Shri Kanhiya Lal Saini. The details recorded in the seized diary found from Shri Madan Mohan Gupta reveal the payment of cash in respect of the land purchase by Saini family members i.e. father and sons. The statement of Shri Madan Mohan Gupta was recorded by Investigation Wing in which he has explained the transactions of land purchased by Saini family members. The department also recorded the statements of Shri Shankar Lal Saini and Shri Kanhiya Lal Saini and in their statement they have accepted the said transaction of purchased of land as it was through registered sale deeds but they have specifically denied any payment of cash over and above the purchase consideration shown in the respective sale deeds through cheques. On specific querry by the Department they said that they have paid purchase consideration through cheque and the sources of the said payment is the sale of land by them to Shri Arun Goel , Shri Tarun Goeal and Pinkcity Reality Pvt. Ltd. Therefore, in the search and seizure proceedings and in the subsequent investigation what was detected by the Department is the seized material containing the transaction of land purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the property purchased by the appellant or the name of the appellant is found. Shri Madan Mohan Gupta in his statement has nowhere stated that any amount of cash was paid by the appellant to Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Khaniya Lal Saini over and above the consideration mentioned in the registered sale deed in respect of the properties purchased by the appellant from these persons. In their statements recorded on oath, neither Shri Shankar Lal Saini nor Shri Khaniya Lal Saini has stated that they have received any cash from the appellant, over and above the consideration recorded in the sale deed in respect of the properties sold by them to the appellant. They, in an unambiguous manner have denied having received any cash from the appellant. After going through the impounded material, and statements of Shri Madan Mohan Gupta, Shri Shankar Lal Saini and Shri Khaniya Lal Saini. I am of the considered view that the AO has made the addition on the basis of reply of Shri Shankar Lal Saini and Khaniya Lal Saini to question No.7 in their statements recorded on 05.08.2013. The AO has made the addition drawing the conclusion that since at page No. 25 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained cash payment. After going through the assessment order, impounded material, statement of Shri Madan Mohan Gupta, Shri Shankar Lal Saini and Shri Khaniya Lal Saini and assessment orders of Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Khaniya Lal Saini, I have no hesitation in holding that the AO did not have any evidence to show that any cash, over and above the sales consideration recorded in the sale deed, was paid by Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. towards purchase of lands to Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Khaniya Lal Saini. The conclusion of the AO that since Shri Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Khaniya Lal Saini have paid cash (₹ 10,32,24,417/-) towards the purchase of land at Amer and Choumu Tehsil, therefore, this cash must have been paid by Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. to these persons towards the purchase of their land is farfetched and not based on any documentary or oral evidence. An addition made without any basis cannot be sustained. Therefore, the addition of ₹ 4,35,26,854/- made by the AO in the hands of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of cash payment by the assessees U/s 69B of the Act has no legs to stand in the absence of any incriminating material but the said addition is merely based on assumption of the AO. Accordingly, we do not find any error or illegality in the impugned order of the ld. CIT(A) qua this issue. 8. The identical issue has been raised by the Revenue in the other two appeals and therefore, in view of our findings on this issue the appeals of the Revenue in case of Shri Tarun Goeal and M/s Pinkcity Reality Pvt. Ltd. also deserves to be dismissed. 9. In the assessee's appeal the assessee has raised the issue of validity of reopening of assessment though all three assessees jave raised the additional ground and validity of reopening however, at the time of hearing, the ld. AR of the assessee has stated at bar that the assessee in case of Shri Tarun Goeal and M/s Pinkcity Reality Pvt. Ltd. does not press the issue of validity of reopening. Accordingly, the cross appeals in case of Shri Tarun Goeal and M/s Pinkcity Reality Pvt. Ltd. in ITA No. 245/JP/2017 & ITA No. 247/JP/2017 are dismissed being not pressed. 10. In case of Shri Arun Goel, the ld. AR of the assessee has contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruly the relevant facts necessary for assessment. 13. We have considered the rival submissions as well as relevant material on record. The Assessing Officer while reopening the assessment has recorded reasons as under:- "Assessment u/s 148/143(3) was completed in the case on 08.09.2011 and assessed income was ₹ 1,47,49,650/-. Later, a search and seizure operation u/s 132 of the I.T. Act, 1961 was carried out by Income Tax Department, Investigation Wing, Jaipur on 23.05.2013 at the residential premises of Shri Madan Mohan Gupta, A-30, Saraswati Colony, Sanaganer in the case of Rajendra Jain, Rajendra Bardiya & Others Group, Jaipur and certain incriminating documents were found and seized. The above incriminating documents include documents related to sale/purchase transactions made by Shri Kanhai Lal, Shri Shankar Lal and Shri Madho Lal Saini, R/o Patel nager, 22 Godown, Jaiapur. In these documents, it was mentioned that by Shri Kanhaiya Lal, Shri Shankar Lal and Shri Madho Lal Saini, R/o Patel Nagar, 22 Godown, Jaipur a cash payment of ₹ 10, 32, 24,417/- has been made for the purchases of properties and as per their statements they admitted that the source of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also found in the seized material therefore, the AO has formed the belief as per the details recorded in the seized material in respect of the land purchase and payment by the Saini family members and extrapolated the same to presume that the said cash payment of the Saini brothers and father is sourced from the payment made by the assessee in respect of the land purchases from Saini family members. Despite all these facts recorded in the reasons the Assessing Officer nowhere alleged that the income assessable to tax has escaped assessment due to the reasons of failure of the assessee to disclose fully and truly all material facts necessary for his assessment. There is no dispute that reopening of the assessment is after 4 years from the end of the relevant assessment year and therefore, for initiation of the proceedings U/s 147/148 of the Act it is a pre condition that when the original assessment is framed U/s 143(3) of the Act no action shall be taken U/s 147 of the Act unless the income chargeable to tax has escaped assessment for the reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. When the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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