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TMI Blog2022 (8) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Co-ordinate bench did not consider the seized documents properly. The coordinate bench also considered the statement recorded u/s 132 (4) of the act of the company family as well as the preliminary restatement recorded u/s 131 - The coordinate bench in paragraph number 12 has dealt with such statement. In paragraph number 25 26 has considered the statement of the sellers as well as the statement of cross examination wherein all the buyers of confirmed that they have not received any own money consideration on the sale of land from Thakkar group. Further with respect to the disclosure made by them of additional income the affidavit is were filed which were considered in paragraph number 29 of the order that the same disclosure was made with an intention to buy peace and avoid further litigation and also denied the knowledge of receipt of the own money consideration is the subject transaction of sale of land to Thakkar group. It also dealt with in paragraph number 32 with respect to the additional income disclosed by the vendor‟s before the settlement commission. In view of this the coordinate bench has clearly taken into consideration all the statements of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee argued those appeals together and therefore, we dispose of those appeals by this common order. 02. ITA No. 2135/Mum/2021 for A.Y. 2012-13 and ITA number 2131/M/2021 for assessment year 2014 15 are filed by the Asst. Commissioner of Income-tax, Circle 2(3)(1), Mumbai (the learned Assessing Officer), against appellate order passed by the Commissioner of Income-tax (Appeals)-49, Mumbai [the learned CIT (A)] dated 13th August, 2021 in case of M/s Thakkar Housing Development Pvt. Ltd. 03. ITA number 2133/M/2021 for assessment year 2012 13 and ITA number 2132/M/2021 for assessment year 2014 15 is filed by the Asst Commissioner of income tax Circle 2 (3) (1), Mumbai (the learned AO) against the order passed by the Commissioner of income tax (appeals) 49, Mumbai dated 16/8/2021 in case of M/s Thakkar Grih Nirman Pvt Limited. 04. ITA number 2134/M/2021 is filed by the Asst Commissioner of income tax 2 (3) (1), Mumbai for assessment year 2014 15 against the order passed by the Commissioner of income tax (appeals) 49, Mumbai dated 16/8/2021 in case of M/s Thakkars Apna Ghar NIrman Pvt Ltd . 05. We first state the facts in case of ITA number In ITA No 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded and that, the name Thakker had been clearly mentioned against receipts in page No. 17 of Annexure A, Item No.7, seized from the same premise also. (f) The appellant craves to amend, alter, and delete any of the aforesaid grounds and add any additional grounds either before or at the time of hearing. 06. The grounds of appeal raised by the learned assessing officer in all other appeals are similar. Therefore, we first state the facts of the case in ITA number 21354 assessment year 2012 13 and decide it. The same decision is applied to other appeals thereafter. 07. The facts of the case show that assessee is a company engaged in the business of builders and construction. A Search and seizure action under Section 132 of the Income-tax Act, 1961 (the Act) was conducted on 8th September, 2015 on Kokani Group of Nasik. Based on that search, information was available that namely (1) M/s Thakker Apna Ghar Pvt. Ltd, (2) M/s Thakker Housing Development Pvt. LTd and (3) M/s Thakker Gruh Nirman Pvt. Ltd. (4) Dhannjay Marketing Pvt Ltd , (5) Asian Food Products Limited (6) Shri Karan Vijay Gupta [ collectively known as Thakker Group] purchased the land at survey number 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties Kokani Group filed a petition before Settlement Commission who passed an order under Section 245D(4) of the Act on 17th July, 2018, wherein the seller admitted of having received sale consideration of ₹65,00,00,000/- in cash from Thakker Group. The assessee was also confronted with above order, But still assessee denied any cash payment to Kokani Group for purchase of savargaon Land. 012. The learned Assessing Officer further issued show cause notice dated 18th December, 2018 asking the assessee to furnish the explanation with respect to proposed addition and the learned Assessing Officer also asked to produce sellers as a witness of the assessee. The assessee denied any cash payment once again but failed to produce the seller. Consequently, another notice dated 26th December, 2018 was issued to the assessee reiterating the same facts and seeking same explanation. Assessee submitted its reply on 28th December, 2018 denying the cash payment. Based on this, the learned Assessing Officer held that during the assessment year 2012-13, assessee has made a cash payment of ₹1,56,93,324/- for purchase of land at Savargaon and accordingly, the order under Section 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loose sheets were found and seized. The said sheets found and seized were forwarded to the Assessing Officer of the appellant. The Assessing Officer then proceeded with analysis of the seized material found from the premises of the sellers, namely, (i) Mr. Fakruddin S. Kokni (Party No. R-1), (ii) Mr. Imran Iftekar Kokni (Party No.R-2), (iii) Mrs. Nizamoddin Kokni (Party No.R-4) and (iv) Mr. Tamizuddin Kokni (Party No.R-5). Based on the information and considering the fact that the seller of the subject land i.e. Kokni family members had stated in the statement recorded u/s 132(4) of the Act, during the course of search in their hands that they accepted the cash over and above the consideration stated in the sale deed to the tune of Rs. 11,94,19,700/-, the Assessing Officer drew inference that the Thakker Group had paid on-money of Rs.65,21,25,992/- at the time of purchase of land to the Kokni group and said consideration was divided among the buyers of the land in the proportion of the land purchased by them. The appellant being purchaser of 20 acres of the land out of 92.6 was held to have paid on-money payment to the extent of Rs. 14,10,00,214/- which was taxed in the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A r.w.S. 143(3) of the Act at a total income of Rs. 10,06,60,053/3 The factual matrix of the case leading to the above addition is as under The appellant along with other 5 parties purchased land at Survey No. 53/2 area admeasuring 20H.65R (18H 46R), Survey No 54 area admeasuring 09H 18R. (08H.97R) Survey No.55 area admeasuring 10H 41R. (09H 57R) o total area admeasuring 92 Acres 20 Gunthe of Savargaon, Tal Dist. Nashik for consideration of Rs. 65,21,25,992 vide Sale Deed dated 05.07.2013 from 14 parties known as Kokani group of Nashik. The purchaser of the property in question along with the appellant includes following 6 parties: (i) M/s. Thakkers Housing Development Pvt. Ltd. (ii) M/s Dhananjay Marketing Pvt. Ltd. (iii) M/s. Thakkers Apna Ghar Pvt. Ltd. (iv) M/s Asian Food Products Ltd. (V) Shri Karan Vijay Gupta (vi) M/s. Thakkers Gruh Nirman Pvt. Ltd. (hereinafter called Thakker Group ) 4. The seller of the said lands are as under (i) Ms. Farzana Sallauddin Kokani (ii) Mr. Fakruddin Sallauddin Kokani (iii) Ms. Noorbano Sallauddin Kokani (iv) Mr. Kadarsaheb Kutubuddin Kokani (v) Ms. Yasmin Kadarsaheb Kokani ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, he drew adverse inference that vendors i.e. Kokani group had received cash from the Thakker group of companies over and above the stated consideration in proportion to the share of land held by him in the subject land sold to Thakker group. 7. Similarly, the Assessing Officer also analyzed the seized documents found and seized from the premises of Mr. Tamizuddin Kokani marked as Annexure- A, Item No.1 2, concluded that the said Mr. Tamizuddin Kokani incurred cash expenses to the extent of Rs. 3. 34 crores on development of various lands at Savargaon The scanned images of seized documents are reproduced vide page no. 13 and 14 of the assessment order. However, despite several notices issued to the said Mr. Tamizuddin Kokani, he had not turned up for examination before the Assessing Officer. However, the Assessing Officer taking note of the fact that the share of the said Mr. Tamizuddin Kokani out of the cash receipt of Rs.11.94 crores is only Rs.1.41 crores and in the absence of any other source of income, he presumed that this cash expenses were incurred on development of land was out of on money received on the sale of the subject land to the Thakker group. 8. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt ofRs.3.36 crores received on behalf of all the sellers of Kokani family on the ground that entire amount of Rs.3.31 crores received on behalf of all the sellers, as to how only Mr. Rehana Tamizuddin Kokani of such Kokani group alone incurred Rs.3,31,05,459/- on his behalf. Based on the above analysis and findings, the Assessing Officer came to conclusion that all the sellers of Kokani family had received sale consideration over and above the sale consideration received by cheque and equivalent amount in cash also. The said amount of Rs. 65,21,25,992/- was divided among all the sellers of the land of Kokani family in proportion to the land held by them. The details of apportionment of the said alleged on-money received are contained in page no.20 of the assessment order. 11. Similarly, the Assessing Officer presumed that the Thakker group of companies who purchased the land from Kokani group of companies have paid consideration in cash, in order to examine them, a notice u/s 131 of the Act was issued on 02.01.2015 to one Mr. Gaurav J. Thakker, who is stated to have been denied having paid any consideration over and above what is stated in the sale consideration. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denied the allegation of receipt of any on-money over and above the stated consideration of Rs.65,21,25,992/- on cross examination. III. The appellant also ruled out the probability of payment of on money consideration citing the fact that the stated consideration in a sale deed was Rs.65,21,25,992/- as against the valuation as per Stamp Duty Ready Reckoner of Rs.6,52,00,000/- i.e. ten times higher than the stamp duty valuation and also giving comparable sale instance of locality. IV. During the course of search proceedings in the Thakker group of companies on 15.01.2015, no evidence whatsoever was found in support of payment of on-money consideration of Rs. 65,21,24,992/- over and above the apparent consideration. The sellers of the land were also entered into other land deals. Therefore, it cannot be presumed that, at all, there is receipt of any on-money by Konkani group, it is only from Thakker Group. V. The appellant along with other co-owners of subject land offered to sell the land to MIDC for consideration of Rs.90 lakhs per acre vide offer letter dated 06.12.2014 and therefore this fact only suggests that there was no possibility of buying the land worth Rs. 83,25,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) deleted the addition in the hands of Thakker group of companies of on-money consideration except Rs. 11,94,90,700/- which was admitted by Kokani group u/s 132(4) of the Act. The Id. CIT(A) also deleted the addition made for the assessment years 2011-12 and 2012-13, as the seized material does not indicate any payment of on-money consideration during period relevant for those assessment years. Thus, the Ld. CIT(A) confirmed the addition in the hands of appellant only to the extent of Rs.2,58,20,476/- 1.e. 0.2162% of Rs. 11,94, 19.700/- for A. Y. 2014-15. Being aggrieved by that part of the order which is against the assessee, the appellant is in appeal in IT(SS)A No.65/PUN/2017 and the Revenue is in appeal being aggrieved by that part of CIT(A) order which is against the Revenue in IT(SS)A No. 69/PUN/2017. 17. Now, we shall take up the appeal of assessee in IT(SS)A No.65/PUN/2017. 18. The appellant raised the following grounds: 1. The learned CIT(A) erred in upholding the initiation of legally untenable proceedings u/s 153A and in issuing legally untenable Notice u/s 153A in absence of any incriminating material or unexplained asset found during search action at 7, Thakk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the Settlement Commission in the hands of vendors is not binding in the hands of buyers of the land, reliance in this regard was placed on the decisions of CIT Vs. Vineeta Gupta (2014) 46 taxmann.com 439 (Del) and P.G. Foils Ltd. Vs. Income-tax Settlement Commission (2008) 302 ITR 331 (Mad). 23. In rejoinder, Ld. CIT-DR placing heavy reliance on the orders of assessment as well as Ld. CIT(A), submitted that the statement recorded by the Department from Kokani group u/s 132(4) of the Act is an established factum of payment of on-money consideration and the Kokani group of people have no other source of income except the sale of subject lands to the appellant group of companies. It is submitted that the statement recorded u/s 132(4) of the Act read with seized material are conclusive proof of payment of on-money consideration at the time of purchase of the subject lands. Thus, he prayed to uphold the addition as confirmed by the Ld. CIT(A). 24. We have heard the rival contentions and perused the record. The only issue in the present appeal relates to the addition of Rs.2,58,20,476/- based on the statement given by third party namely Kokani group of companies dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the record that the Thakker group of companies including the appellant were afforded an opportunity to cross-examine the vendors. During the course of such cross-examination, all of them categorically stated that they have not received any on-money consideration on the sale of Savargaon land from Thakker group and it was further stated that the additional income was offered only in order to buy peace of the Department. The statements of cross-examination were placed at page nos. 256 to 264 of the Paper Book filed by the appellant. 29. The vendors also filed an affidavit stating that the declaration of additional income was made only with an intention to buy peace of the Department and avoid further litigation and also denied the knowledge of receipt of the on-money consideration as the subject transaction of sale of land to Thakker was negotiable by two of the deceased family members namely, Moinuddin Ziauddin Kokani and Imran Iftekhar Kokani. The said affidavits were placed at page no. 265 to 291 of the Paper Book. 30. In the above factual backdrop, we are required to evaluate the evidentiary value of the statement given by the vendors u/s 132(4) of the Act during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one person is not legal evidence in the assessment of another person. Reference can be made to the decision of N. S. Choodamani vs. CIT, 35 ITR 676 (Kerala). The assessment of each person is separate and distinct and an addition is to be made only on the basis of independent corroborative evidence, brought on record by the Assessing Officer. It is trite law that the assessment is final and conclusive between parties and only in relation to assessment for the financial year for which it is made. Reference can be made decision of Hon'ble Supreme Court in the case of M.M. Ipoh Ors. vs. CIT, 67 ITR 106 (SC). 34. This is underlying principle in the decision by Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd vs. CIT, 243 ITR 83, wherein the Hon'ble Supreme Court after referring to the earlier decision in the case of Smt. Taradevi Agrawal, 88 ITR 323 held that merely because of an assessment of income in the wrong hands is not bar to assess the same income in the right hands and failure by the Assessing Officer to assess the income in the right hands renders the assessment order erroneous. 35. Further, we notice that both Assessing Officer as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of any independent corroborative evidence. As held by the Hon'ble Supreme Court in the case of CIT vs. Daulatram Rawatmull, 53 ITR 574 even the circumstances raises suspicion, suspicion cannot take place of the evidence. That apart, the contentions of the appellant i.e. the assessee that the vendors had declared additional income only in order to escape the rigouts of the law to claim the benefits u/s 54 of the Act remains uncontroverted. Therefore, we are of the considered opinion that the fact that the vendors had disclosed additional income on account of sale of land as additional income before the Settlement Commission cannot form any basis for the addition in the hands of the appellant herein. 38. In the light of the above facts and legal position, we are of the considered opinion that the Department had failed to establish that the appellant had paid any on-money over and above stated consideration of the sale deed to the vendors of the property at the time of purchase of Savargaon land. Therefore, no addition can be made on the mere statement given by the third party. Therefore, the orders of the lower authorities are reversed, we direct Assessing Officer to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deleted by the Id. CIT(A) by holding that there is no material on record which could be linked to the respondent assessee showing the payment of on-money consideration. The notings found in the seized material in the case of some of the vendors only shows incurring of some expenditure by the vendors of property, the contents of loose sheet does not lead to the conclusion that this expenditure was incurred out of the money paid by the respondent assessee. In the absence of any corroborative evidence and taking note of the fact statement given by vendors on cross examination, the Id. CIT(A) gave finding that none of these parties had admitted to have received any on-money from the respondent assessee or its group companies. The Id. CIT(A) also took note of the fact that the agreement of purchase was made only in July, 2013, there is no possibility of making cash payment prior to that date to the tune of Rs.21 crores and also the apparent consideration was 10 times higher than ready reckonor, therefore, the Id. CIT(A) ruled out possibility of paying over and above the stated consideration and, accordingly, held that the presumptions drawn by the Assessing Officer that the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books and loose sheets cannot be treated as part of the regular books of account and not admissible u/s 37 of the Evidence Act as evidence placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT vs. V. C. Shekhal 1993 SCC 410. Thus, he submitted that the seized material in the form of loose sheets cannot form the basis of addition in the assessee's hands. He also submitted that mere fact that the additional income was offered in the hands of the vendors before the Hon'ble Settlement Commission does not mean that the addition is called for in the hands of the purchaser of the land as the finding in the assessment of one person is neither decisive nor is binding on another person in the absence of any corroborative evidence. 47. We have head the rival submissions and perused the material on record and carefully gone through the orders of the lower authorities. The issue in the present appeal of the Revenue centres around the factual matrix of seized material in the case of vendors of the property 1.0. 3 parties. The Assessing Officer had presumed that based on the material found and seized from the premises of the vendors of the land received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... significant note that even the vendors of the land in the statement u/s 132(4) of the Act had only confirmed the receipt of the on-money to the extent of Rs. 11,94,19,700/- altogether. They nowhere stated that they received on-money consideration from the respondent assessee or its group companies on sale of the land. Even on cross-examination also, they had denied to have received any on-money on sale of the subject land from respondent assessee. On the mere fact that the Department has found certain evidence in the form of loose sheets indicating incurring of certain expenditure onhousehold items and development of lands and purchase of lands etc does not lead to conclusion that the respondent assessee or its group companies had paid on-money consideration, also considering the fact that the seized material indicates incurring of such expenditure much before the date of agreement of purchase f.e. July, 2013, no prudent person would have paid the on-money consideration much before le. 2 and 2/1 years before date of agreement of sale. 50. It is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax, Bihar and Orissa (1959) 37 ITR 288, the Supreme Court disapproved the practice of making additions in the assessments on mere suspicion and surmise or by taking note of the notorious practices prevailing in trade circles. At page 299 of the report, it was observed as follows: Adverting to the various probabilities which weighed with the Income-tax Officer wemay observe that the notoriety for smuggling food grains and other commodities to Bengal by country boats acquired by Sahibgunj and the notoriety achieved by Dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant could not be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf. 15. This takes care of the argument of Mr. Sabharwal that judicial notice can be taken of the practice prevailing in the property market of not disclosing the full consideration for transfer of properties. 53. The Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) held that the capital gains is intended to tax the gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer is in appeal before us. 016. The learned Departmental Representative submitted that though the learned CIT A has followed the order of the coordinate bench in case of another CO-buyer where, the identical addition were deleted but vehemently supported the order of the learned AO. He submitted that this issue though pertaining to the same set off transactions, with same set off purchasers, on the same set of seized material, decided in the case of other co-owner by the co-ordinate Bench in favour of the assessee, but, it cannot be said to be covered for the reason that the order of the Tribunal of Pune Bench suffers from severe infirmities. He therefore submitted that the learned CIT A has erred in following the same order. The learned Authorized Representative submitted that :- i. that the decision in the case of Dhananjaya marketing private limited which is been followed by the learned CIT A has observed that no incriminating material is related to the case payment was found in the case of search action. He therefore referred that the para number 5.7 and 5.8 of the assessment order in the case of Thakker Grih Nirman private limited deserves to be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws the order of the coordinate bench in the case of another Co buyers, but same cannot be followed in the case of the assessee. 018. The learned Authorized Representative at the time of commencement of hearing stated that these appeals are covered in favour of the assessee by the decision of co-ordinate Bench in case of Dhananjay Marketing Pvt. Ltd. ITSSA no. 65/Pun/2017 for A.Y. 2014-15 dated 19th May, 2021 as well as in the order of Asian Food Products Limited ITSSA No. 64/Pun/2017 for A.Y. 2014-15 vide order dated 21st June, 2021. He submitted that the learned CIT A has followed these decisions. The learned Authorized Representative stated that the purchaser of the property in question, is one of the co-owners and Dhananjay Marketing Pvt. Ltd. and Asian Food Pvt. Ltd. are also amongst other co-owners. He therefore submitted that if the issue has already been decided by the coordinate bench in the case of one of the co-owners on the same set off documents from same set off purchasers and on the same transaction, there is no reason for the Tribunal to take a different view in the case of this assessee. In this regard, he submitted that the issue is squarely covered in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 90 lakhs per acre. He submitted that this rate is almost similar to the cheque payment made by the assessee and therefore the price of the land cannot be more than that. Therefore, on these evidences also it is proved that there is no cash payment made by the buyers. 021. He further submitted that whatever is the disclosure made by the seller‟s before the settlement commission is not with relation to the cash amount allegedly paid by the assessee and the group concerns. He submitted that this aspect has been considered by the coordinate bench at paragraph number 44 in case of Dhananjaya marketing private limited. 022. He further statement that all the statements recorded of Kokani group family members either u/s 132 of the act or u/s 131 of the act have already been considered by the coordinate bench in the case of the Dhananjaya marketing private limited as well as Asian Food products Ltd. 023. In the end he submitted all the issues covered in the case of the appeal of the learned assessing officer have already been dealt with in case of two joint buyers of the land along with these assessee by the coordinate bench in case of the decision of Dhananjaya marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order. In paragraph number 7 the coordinate bench also considered the documents seized from the premises of Mr. Tamizzudin Kokani Mark as annexure A item number 1 and 2 where there is a details of the incurring of cash expenses to the extent of ₹ 3.34 crores and development of various lands. This is also reproduced by the learned assessing officer by scanning those documents. The coordinate bench in paragraph number 9 further referred to the documents found and seized from the premises of Mr. Fakruddin S Kokani at annexure A item number 1 7 wherein the cash receipt of ₹ 8.58 crores with respect to the sellers. In paragraph number 10 the coordinate bench also referred to the documents seized from the premises ofMrs Rehana Kokani containing total pages 1 128 wherein Notings of the title as land expenses were found. In paragraph number 48 the coordinate bench has also dealt with the seized material scanned at page number 27, 28, 29 and 30 of those assessment orders which are similar to the assessment order in case of all the assessees. Therefore, it cannot be said that the Co-ordinate bench did not consider the seized documents properly. 027. The coordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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