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TMI Blog2021 (8) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... question. Reliance upon the decision of Sanhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] wherein held that where loose papers found and seized did not establish co-relation document wise with assessment year, notice issued under section 153C had rightly been quashed and set aside. We have considered the judicial pronouncement as supra wherein it is held that where loose paper found and seized did not establish co-relation document wise with assessment year in question notice issued u/s. 153C had rightly been quashed and set aside. Before us, the Revenue could not point out to the contrary. In the light of the above facts and findings and after considering the decision of the ld. CIT(A), the appeal of the Revenue is dismissed. Therefore, this appeal of the revenue is dismissed. - IT(SS)A No. 104/Ahd/2014 - - - Dated:- 20-7-2021 - Shri Rajpal Yadav, Vice President And Shri Amarjit Singh, Accountant Member For the Revenue : Shri O.P. Sharma, CIT-D.R. For the Assessee : Shri S.N. Soparkar, Sr. A.R., Smt. Arti N. Shah, A.R. Shri Parin Shah, A.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- This revenue s appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seeking explanation as under:- A land situated at Shilaj (sim), Taluka Daskroi, block No.482, admeasuring about 24686 sq.mts and block No. 742 admeasuring about 18616 sq.mts. was transacted by you as confirming party, M/s. Saumya Construction Pvt. Ltd. as third party and 'Aryaman Co-op Housing Society Ltd. as purchaser from Shri Rohit P Modi Pareshabem K Modi through sale deed dated 1.6.2006. Shri Rohit P Modi has, in his assessment has admitted receipt of ₹ 11,05,51 ,000/- as on money received in cash. The documented price of the land was ₹ 1,20,00,000/- which was paid by cheque on 3.1.2006 and the sale documents were finally executed on 9.6.2006. The assessment has been finalized in the case of Shri Modi and Pareshaben K Modi making the additions on account of cash received over and above the documented price. In this connection, you are hereby required to show cause as to why the on money payment of ₹ 11,05,51,000/- should not be added as unexplained investment in property for the AY 2006-07 pertaining to the FY 2005-06 in which the cash payment was made. In response, vide letter dated 24th December, 2011 the assessee has submitted as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney was paid by The Sandesh Ltd. in. the absence of any direct evidence that the on money has been paid by another person than The Sandesh Ltd. Therefore, the Assessing Officer has added an amount of ₹ 11,05,59,000/- on protective basis to the total income of the assessee as unexplained investment for purchase of land. 4. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has deleted the addition made by the Assessing Officer stating that the purchaser of the land was Saumaya Construction Pvt. Ltd. and the cash has been paid for the purchaser of the land by Saumaya Construction Pvt. Ltd only and not by Sandesh Ltd. The relevant part of the decision is reproduced as under:- 7 I have gone through (he Assessment Order and submission of the AR of the App carefully. The facts of the case on the basis of the registered documents and note memorandums are that Smt. Pareshaben Modi and Rohit P. Modi had entered into an MOD Block No. 482 and 782 at Village: Shilaj, Ta: Dascroi 16 The Sandesh Ltd. on 13.4.2005 consideration of ₹ 1.20 crore. At the time of entering into this agreement Smt. Pareshaben and Rohit P. Modi were not owners of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shilaj Taluka Daseroi and purchased by Saumya Construction IM. Ltd. from Rohit Modi. This contention of the Saumya Construction IM. Ltd. is not correct in view of the fact that the conveyance deed executed by Rohit Modi dated 1.6.20066 is in respect of block no. 482 and 782 at villge Shilaj tluka Daseroi and on the conveyance deed executed by Rohit Modi dated 1.6.2006 seized the workds tapovan Shilaj and sales are written on the first page clearly indicating that the on-money payment mentioned in the documents identified as Annex. A-1/14 pages 51 and 55 is respect of lands purchased by Saumya Construction Pvt. Ltd. from Rohit Modi through conveyance deed executed on 1.2006 7.3 Further it is seen that on the copy of the conveyance deed relating to this land executed on 1.6.2006 seized during the search in the case of Rohit Modi Group the word RPM/ PKM - Saumya are mentioned. A scanned copy of the first page of the conveyance deed is as under: .............................................................................................................................................................. ................................................................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - ₹ 2,41,39,000/~ SaltiofFP-90 -Rs.l,82,200,00/- Sale FP..28' ₹ 2,00,00,000/- (v) Ghuma-226-228 - Purchase - ₹ 2,31,20,000/- Sale - ₹ 3,05,00,000/- (vi) Sargasan-438 - Purchase - ₹ 3,11,04,000/- Sale -₹ 2,31,94,00/- ₹ 1,41,00,000/-outstanding (vii) Ghuma-633 - Purchase - ₹ 1,27,54,000/- Sale - ₹ 63,93,000/- + ₹ 63,93,000/- outstanding to be received in two installments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xxii) Shela - Purchase ₹ 32,29,20,000/- Sale ₹ 40,24,00,000/- (xxiii) Ghunghat - Purchase ₹ 20,00,000/- (xxiv) Super Plaza - Purchase ₹ 78,78,000/- 10.1 As per the documents referred above, various noting 'RP', 'PD' and 'KM' were made against the entries of land transactions. During the course of search proceedings and after search enquiries the assessee accepted that 'RP' is referred to 'Rohit P. Modi', who is key person of Himalaya Group. 'PD' is referred to 'P. Dubey' and 'KM' is referred as 'K. Mehta'. During the course of assessment proceedings, the assessee had owned-up all the unaccounted transactions recorded against the names of 'PD' and 'KM'. The assessee stated that the name of these persons were used for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain Vatika 61360000 5 Surendra Nagar 300000 6 Super Plaza 7878000 Total 221299536 13014210 10.3 The assesses submitted cash flow chart explaining the source of investment and reflection of profit as per which the out of book profit on the sale of land amounting ₹ 110079W has been shown as under- Sr. Village Purchase Sale Profit 1 Tapovan 10000000 103546000 12000000 110551000 2000000 7005000 2 Shela 316008 17099530 600000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in favour of Saumya Construction Pvt. Ltd. Further Rohit Modi in his affidavit filed has stated that he has not received any payment from The Sandesh Ltd. Though when The Sandesh Ltd. was asked to produce Rohit Modi the AR of The Sandesh Ltd, expressed his inability to do so because Rohit Modi was not available. 7.11 It is also clear that if The Sandesh Ltd. had paid a sum of ₹ 11,05,51,000/- then The Sandesh Ltd. would not have sold the same land to Saumya Construction Pvt. Ltd. for a sum of ₹ 4,41,58,352/-. U is seen that from the meaningful reading of the details filed by Rohit Modi before the CIT(A)-III, Ahmedabad, the affidavit filed by Rohit Modi before the AO and the seized document as discussed above, it becomes clear that the on-money of ₹ 11,05,51,000/- was paid by Saumya Construction Pvt. Ltd. to Rohit Modi for the purchase of the Land identified as block no.482 and 782 at village Shilaj Taluka Dascroi. 7.12 . In view of the above and the fact that Rohit Modi on the conveyance Deed in respect of Tapovan land has mentioned that the sale is to Saumya, it becomes clear that the purchaser of the land was Saumya Construction Pvt. Ltd. and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dum of agreed terms on 2nd May, 2005 with Saumaya Construction for development of Tabovan land which was already surrendered to Saumaya Construction Pvt. Ltd. The ld. CIT(A) after considering the relevant material has elaborated in his finding as reproduced above in this order holding that Saumaya Construction Ltd. was the purchaser as all the rights of development had been handed over to Saumaya Construction by the conveyance deed dated 1st June, 2006 for payment of ₹ 4,41,58,352/-. The ld. CIT(A) has also pointed out that the Sandesh Ltd. had surrendered all its rights in favour of Saumya Construction Pvt. Ltd. and Mr. Rohit Modi in his affidavit filed stated that he has not received any payment from the assessee. The ld CIT(A) held that on money was paid by the Saumya Construction for the purchase of impugned land. The Revenue could not controvert the findings of the ld. CIT(A) with any relevant material. During the course of appellate proceedings before us the assessee has also filed application under Rule 27 of the Appellate Tribunal Rule 1963. The content of this application is reproduced as under:- 1 The appeal of the Department bearing I.T.A. No.l04/Ahd/2014 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reopening by way of issue of notice u/s. 153C is illegal and bad at law. 5. It is further submitted that the said document mentioned in the reasons recorded was not an incriminating document at all. A copy of the said document dated 19.04.2008 between Saumya Construction. Sandesh Limited and Pusti Enterprises is enclosed herewith. The names of Shri Rohit Modi and Pareshabcn Modi of Himalaya Group have not been not mentioned therein nor they have any connection with the transaction contained in the aforesaid document. 6. In view of the above, the order u/s.153C in case of Respondent is bad at law. On this ground, the appeal filed against Respondent deserves to be dismissed. We have perused the copy of article of agreement between Saumya, Sandesh and Pusti Enterprises Ltd. dated 19-04-2008 enclosed in the paper book of document II filed by the assessee in support of its application under Rule 27 which was stated to be seized during the course of search action u/s. 132(1) of the Act in the case of Saumya Construction Pvt. Ltd. on 07-10- 2009, on the basis of which the Assessing Officer has recorded reasons for initiation of proceedings u/s. 153C of the Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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