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TMI Blog2023 (8) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of search either at the premises of assessee or from Mr. Tarnish B Kania. On the basis of such observation, the ld. CIT(A) held that the transaction of investment in the lands is not proved. However, on the same time, the circumstances suggest that the assessee has taken brokerage. On such observation, the ld. CIT(A) estimated 2% of brokerage on the transaction of Rs. 2.22 crores, accordingly restricted the addition to the extent of Rs. 4,44,961/- thereby granted substantial relief to the assessee.it is an undisputed fact that the documents relied upon for making additions were found from the third party. As no investigation was carried out by the investigating team against the assessee if the assessee has direct involvement in ultimate sale of the lands or not. There is no statement either during the search or post search enquiry or during the statement which can be proved that the transaction in these papers was ultimately resulted in the sale of the plots of land. Our view is also supported by the various case laws relied by ld AR for the assessee. Thus, no infirmity or illegality in the order passed by ld CIT(A), which we affirm with our aforesaid observation. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimate sale to the third parties. 5. In addition and in alternative to the ground No. 1, 2, 3 4, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition of Rs. 2,22,48,040/- @ 2% of the brokerage, without considering the provisions of Sec. 292C of the Act and dehors provisions contained in the said section. 6. It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 7. The appellant craves leave to add, alter, amend and/or withdraw any round(s) of appeal either before or during the course of hearing of the appeal. 2. Brief facts of the case are that a search action under Section 132 of the Income Tax Act, 1961 (in short, the Act) was carried out on Piyush Patel Group of Surat on 27/12/2012. Shri Piyush R Patel (assessee) is principal partner of the group, so his residence was also covered. In the search action, certain incriminating material including was recovered and seized. Notice under Section 153A of the Act dated 23/05/2013 was served upon the assessee for filing return of income for the A.Y. 2008- 09. In response to notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis, there is no evidence filed by Mr. Tarnish B Kania that the assessee had instructed him to prepare the said satakat Mr. Tarnish B Kania has given abrupt statement, which could never be the valid base to lead presumption of unaccounted investment to the extent of Rs. 2.24 crore. In fact, there is no registered document with the department that the assessee has actually purchased the land from the said owners. The assessee further explained that the earlier they were interested to purchase the said land from the owner and in furtherance, they have made advance payment of Rs. 5.00 lacs to different land owners by way of cheques, duly recorded in the books of account, however, it was discovered that there was dispute of the title, ownership and right amongst family members of land owner, the assessee decided not to purchase the said land. They have not paid any amount over and above the advance payment. The assessee in his earlier statement, submitted that the ledger copy showing the advance payment by way of account payee cheques to the land owners. There is no other transaction of purchase of land nor there is any unaccounted payment to the land owners. The assessee also fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tarized Satakat document so they may not deny the transaction. The documents are notarized by pasting photographs and taking thumb impression of sellers and witnesses. The lands thereafter transferred to new purchaser at jantri rate, Jantri rate in year 2011-12 was 25% of market rate. The so called Satakat purchaser introduced a new purchaser to pay the Jantri rate to the original owner directly and makes huge profit in term of cash as Satakat purchaser has already paid huge cash to the original owner and they received back the cash invested from the original owner. Such transaction complete the Satakat transaction by causing loss to the state government by not payment stamp duty. On the basis of such fact, the Assessing Officer invoked the provisions of Section 277 for giving false statement and given final opportunity to explain true and correct fact which can be specifically invested. The Assessing officer noted that the assessee has not brought any new fact despite giving opportunity and remain silent. The Assessing Officer held that the impounded document reflect the true transaction made by Piyush R. Patel and Vimal R Patel jointly to evade the concealed investment of Rs. 2,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exus with the assessee despite in depth investigation at the office and residential premises of assessee. During the assessment, the Assessing Officer issued show cause notice dated 18/06/2014 and 27/02/2015 and raised queries exclusively on the basis of Satakat/agreement to sell, its nature and source of investment. The assessee duly complied with the notice by filing reply dated 20/08/2014 and 13/03/2015. The assessee furnished copy of such reply and would submit that the Assessing Officer made addition on suspicion and doubt basis that assessee made payment to the extent of 2.22 crores for purchase of land on the basis of format of Satakat. The assessee submitted that he has not entered into any such agreement as recorded on Satakat neither made any own money payment as alleged by Assessing Officer. The registered sale deed dated 15/12/2010 in respect of land at R.S./Block No. 221, Mauza-Gaviyar was executed by real owner to actual purchaser namely Mr. Kartikbhai Babubhai Patel for a sale consideration of Rs. 19,82,400/-. For land at Block/R.S. No. 321, Mauza-Gaviyar, the owner executed sale deed dated 06/06/2011 for a sale consideration of Rs. 60,88,800/- in favour of actual pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of registered sale deed of the land for verification of the claim that assessee and his brother has not purchased the said land. The ld. CIT(A) also recorded the details of registration of both the lands in the office of Sub-Registrar alongwith consideration shown thereon. The ld. CIT(A) also recorded that the draft Satakhat was unsigned, was found from the computer of Mr. Tanish B Kania, Advocate. During the search at the residence of assessee, no evidence was found regarding purchase of land by assessee. The ld. CIT(A) recorded that the assessee has given advance for purchase of said land/plots. The ld. CIT(A) on the basis of such circumstances, noted that once the assessee has given advance, getting commission on such land cannot be ruled out, thus the addition if any can be restricted to the brokerage transaction and not to the transaction of sale and purchase of land. The ld. CIT(A) held that Satakhat relied and referred by Assessing Officer was never executed as seen from the seized material. There is no other evidence relating to the transaction, found during the course of search either at the premises of assessee or from Mr. Tarnish B Kania. On the basis of such observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the statement of assessee was recorded and nothing adverse was found against the assessee. No discrepancies were pointed out and no defect was shown the assessee in his books of account of assessee. The ld AR for the assessee submits that assessing officer made addition of Rs. 2.22 crores on account of alleged unexplained investment under Section 69 on the basis of certain paper from the premises of Advocate Shri Tarnish B Kania. No corroborative evidence was seized from the residence of assessee. The papers which was considered as Satakat was found from the third party. The assessee specifically against the addition of Rs. 2.22 crores submitted that the said addition was made on account of alleged unexplained investment for the purchase of agricultural land at R.S. No. 221 and 321, Mauza-Gaviyar, District-Surat. Such addition is made on the basis of purely on assumption and presumption and based on the material found from the premises of third party. There is no direct link or nexus with the assessee despite in depth investigation at the office and residential premises of assessee. The assessee specifically denied of such agreement as recorded on Satakat neither made any own mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed. Such satakat was executed by Piyush R Patel as purchaser and owners and other co-owners in respect of sale of land at R.S./Block No. 321 having area of 1416 square meter and R.S./Block No. 221 having area of 708 square meter both situated in village Gaviyar. The assessee has made payment of Rs. 5.00 lacs to various sellers on the basis of which and the facts gathered and the circumstances clearly proved that the assessee and Vimal Patel has entered into transaction with seller party with Gandabhai Company. The assessing officer recorded the general practice of land dealing in Surat. The Assessing officer held that the assessee has not brought any new fact despite giving opportunity and remain silent. The Assessing Officer held that the impounded document reflect the true transaction made by Piyush R. Patel and Vimal R Patel jointly to evade the concealed investment of Rs. 2,22,48,040 (2,27,48,040 5,00,000). The Assessing Officer on the basis of aforesaid observation made addition of Rs. 2.22 crores on account of unexplained investment in hands of Piyush R. Patel as income from other sources on substantive basis and similar amount was added in the hands of Vimal R. Patel under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has direct involvement in ultimate sale of the lands or not. There is no statement either during the search or post search enquiry or during the statement which can be proved that the transaction in these papers was ultimately resulted in the sale of the plots of land. Our view is also supported by the various case laws relied by ld AR for the assessee. Thus, in view of the aforesaid factual and legal discussions, we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirm with our aforesaid observation. In the result, the ground of the appeal of revenue is dismissed. 13. In the result, the appeal of the revenue is dismissed. 14. Now adverting to ITA No. 22/Srt/2022 in Vimal R Patel. We find that the substantive addition in case of Piyush R. Patel, has been restricted to the additions of brokerage income. The ld CIT(A) in this appeal has taken a view that no income relating to the transaction of lands in question is required to be taxed in the hand of assessee and deleted the protective additions in the hand of assessee. We are in agreement with the decision of ld CIT(A) that when the basis of addition itself has not been accepted, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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