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TMI Blog2022 (6) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case and in law, the ld. CIT(A) has erred in deleting the addition without considering the fact that one of the co-owners of the property has admitted the fact of unexplained investment in accordance with his share in the property in the statement recorded on oath. 3. It is, therefore, prayed that the order of the ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 4. The appellants craves leave to ad, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." 2. Brief facts of the case are that the assessee is a partner in the partnership firm namely Ambani Diamonds and engaged in the business of trading of diamonds. The assessee filed his return of income for the year under consideration on 20/10/2015 declaring total income of Rs. 5,15,720/-. In this case, a search action under Section 132 of the Income Tax Act, 1961 (in short, the Act) was carried out on 04/09/2015 in case of M/s Param Properties of Surat. During the course of search action, certain evidence containing details of unaccounted cash transactions of their clients, financers, other brokers and buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16/12/2017. The assessee stated that he has seen MOU for the first time while recording statement before the Investigating Wing. The assessee made payment of Rs. 50.00 lacs but it was received back as the MOU was never executed. The reply of assessee was not accepted by the Assessing Officer. The Assessing Officer recorded that the assessee questioned the sanctity of MOU on the ground that it is not signed and has no evidentiary value. The Assessing Officer held that the MOU in question correctly and accurately described the property. The land in question is actually registered in the name of one of the partner, whose name appears in the MOU and thirdly as per MOU the partners of property shall carry out development work in the land and if in future, the property is sold, they will divide the sale consideration after deducting the expenses. In the statement, partner of Param Properties stated that the assessee was 24% share. Fourthly, a purchase deed of property was seized from the premises of Param Properties which was registered on 31/3/2014. The details of property is identical as mentioned in the MOU. The firm Param properties was having share in the property hence the deed wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pril, 2015 and deal was cancelled in May, 2015 and he got back Rs. 50.00 lacs and that for such reason, he has not signed. In the search conducted on 03/09/2015, there is not a single evidence found that the assessee paid any amount to honour the deal. The presumption of Assessing Officer that Shri Aagam V. Vadecha has honored the deal means that all parties to the alleged unsigned MOU has honored is not unjustified but against the law. In without prejudice submission, the assessee stated that the alleged MOU is not an MOU at all even though its contents disclosed about the partnership firm but no partnership was made till date the how it can be presumed that all the partners have invested. The assessee also relied on certain case laws. 5. The ld. CIT(A) after considering the submission of assessee, observed that the assessee admitted that he paid Rs. 50.00 lacs for investment in land as recorded in the MOU which was returned back as the deal was not materialized. The assessee has disclosed Rs. 50.00 lacs in A.Y. 2016-17 and paid taxes thereon. On the basis of aforesaid facts and contention, the assessee contended that unsigned MOU has no evidentiary value and cannot be accepted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses in development work. It was also agreed if in future this property gets sold, they will divide the sale consideration amount after deduction the expenses. This fact is corroborated as not only before the investigation wing in Shri Agam Vadecha's statement. The admission of partners of admitting to investment in property mentioned in said MOU cannot be washed away lightly. The nature of unsigned version does not make it as a dumb document. The person from whose possession it had seized has admitted to have invested in property as per the conditions mentioned in MOU. The ld. CIT-DR also submits that the purchase deed of this property was seized from the premises of M/s. Param Properties vide registered No.7556/2014 dated 31.03.2014. The description of the property is identical as mentioned in MOU. The firm Param Properties is also having the share in property hence the deed was kept on its possession. Another big question that arises is that why the document (may not be in original) of any unrelated person is found in the premises of a third person if they have no stake in the said land or have no relation with each other. The ld. CIT-DR prayed to reverse the order of ld C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice under Section 153C is illogical and dismissed. The ld. CIT(A) held that the assessee admitted that he paid Rs. 50.00 lacs for investment in land as recorded in the MOU which was returned back as the deal was not materialized. The assessee has disclosed Rs. 50.00 lacs in A.Y. 2016- 17 and paid taxes thereon. On the basis of aforesaid facts and contention, the assessee contended that unsigned MOU has no evidentiary value and cannot be accepted in one sided approach. This contention of assessee was rejected by ld. CIT(A). We find that the ld. CIT(A) agreed with the contention of assessee that the additions are made under Section 153C on the basis of documents found during the course of search. No amount of consideration is recorded on the MOU itself. The Assessing Officer worked out total sale consideration at Rs. 6.25 crores on the basis of statement Shri Aagam V. Vadecha, who is one of the partner, and his name is mentioned in the MOU, having 4% share. Because Aagam V. Vadecha allegedly paid Rs. 25.00 lacs, the value of Rs. 25.00 lacs were taken as 4% and the Assessing Officer extrapolated the figure of sale consideration of entire land at Rs. 6.25 crores. The ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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