ACIT, CIRCLE-1(1), RAJKOT, RAJKOT V. JAGAMAL MALDE BHATU, JUNAGADH

ITA 361/RJT/2023

AI Insights

The case revolves around an appeal by the Revenue against the CIT(A)'s decision to delete an addition made by the assessing officer, which was based on alleged unaccounted cash receipts from a land sale. The assessee, Jagamal Malde Bhatu, had sold agricultural land to a group of individuals, who later sold it to the K. Star Group. The assessing officer argued that the difference in the sale consideration and the higher value recorded in the seized documents indicated unaccounted cash transactions. However, the CIT(A) found that the assessee was not involved in any subsequent transactions with the K. Star Group and thus could not be held responsible for any 'on-money' received. The Tribunal agreed with the CIT(A)'s findings, citing a similar case involving the K. Star Group.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46872 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Other Referred Cases: Kantibhai Dharamshibhai Narola Vs ACIT
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PUNGALIYA; LD
• Assessee Lawyers: MEHUL RANPURA; LD
• Keywords: Set aside; Corroborative evidences; Cost of acquisition; Document seized; Documents seized; Capital Gains; Principle of natural justice; Search and seizure; Loose papers; Reason to believe; Borrowed satisfaction
• Section: 148; 143(3); 143(1); 132; 54B; 13; 153C

Judgement Text

"ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 1 आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER & SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.361/RJT/2023 Ǔनधा[रणवष[ / Assessment Year: (2012-13) (Hybrid Hearing) Assistant Commissioner of Income-tax, Circle- 1(1), Rajkot. Vs. Jagamal Malde Bhatu 78 Rajlaxmi Park, Near Moti Baug, Bus Station Road, Junagadh 362001, èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AHZPB2542G (Assessee) (Respondent) Assessee by : Shri Mehul Ranpura, Ld. AR Revenue by : Shri Sanjay Pungaliya, Ld. CIT(DR) Date of Hearing : 19/03/2025 Date of Pronouncement : 11/04/2025 आदेश / O R D E R Per, Dr. A. L. SAINI- AM, Captioned appeal filed by the Revenue, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), vide order dated 01.09.2023, which in turn arises out of an assessment order passed by the ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 2 assessing officer under section 143(3) r.w.s. 147 of the Income tax Act 1961, (herein after referred to as “the Act”) vide order dated 23.12. 2019. 2. The assessee has raised the following grounds of appeal: “(i) The learned CIT(A) has erred in law and on facts in deleting the addition of Rs.6,00,52,600/- made on account of unaccounted cash receipts. (ii) It is, therefore, prayed that the order of the CIT(A) be set aside and that of the AO be restored to the above extent.” 3. The facts of the case which can be stated quite shortly are as follows: The assessee has filed his return of income for assessment year 2012–13, on 17.12.2012, declaring total income of Rs. 8,76,410/-, and agricultural income of Rs.15,13,000/-. The assessee`s return of income was processed under section 143(1) of the Income tax Act 1961, without any modification. Thereafter the assessing officer noticed that in the assessee`s case, the income chargeable to tax has escaped assessment for the assessment year (A.Y.) 2012-13, within the meaning of section 147 of the I.T. Act, 1961. In view of these facts, the assessee`s case was re-opened u/s. 147 of the I.T. Act, after recording the reasons and obtaining the requisite approval of the Pr. Commissioner of Income-tax-3, Rajkot. Accordingly, notice u/s 148 of the I.T. Act, dated 29/03/2019, was issued by the I.T.O., Ward-2, Junagadh, which was duly served upon the assessee through electronic mode. The assessee in response to the e- notice issued u/s.148 of the I.T. Act, 1961, filed e-return of income on 15.04.2019, declaring income of Rs.8,76,410/- and agriculture income of Rs. 15,13,000/-.The assessee has requested to supply the signed copies of reason recorded, the documents for cross verification etc. The assessing officer, vide order dated 05.12.2019, passed the objection order rejecting the objections raised by the assessee. Further, the assessing officer, vide letter dated 05.12.2019, supplied the signed copies of the reasons for reopening of the assessment, copy of print out of online approval given by the Pr.CIT-3, Rajkot ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 3 and the copy of relevant page 96 of Annexure A-463 of seized material during the course of search proceedings of Silverstone home of K Star group of Surat. A notice u/s.143(2) of the I.T. Act, 1961 was issued on 07.12.2019 by electronic mode. 4. A Search Action u/s. 132 of the I.T. Act was conducted at the residential and office premises of K. Star Group of Surat on 17.08.2015. During the course of search, many incriminating documents were found and seized. The Land Bearing F.P No. 95. T.P-26. R.S. No.131 of Singanpor Village, Taluka: Katargam, Surat. During analyzing the seized documents, it was evident that a land admeasuring 2727.46 sq. mts (3262 sq. yards) bearing F.P. No. 96 of T.P.- 26 (Singanpor), R.S. No. 131 of Singanpor Village, Taluka: Katargam, District: Surat, was purchased by the assessee group of K. Star i.e. Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani from the seller Shri Jagmal Maldevbhai Bhatu by virtue of sale deed registered at registration No. SRT/4/KTG/4307/2012 with the Sub Registrar, Katargam, Surat. The said sale deed was executed on 05.03.2012. The project 'Silverstone Homes' was developed by M/s. Silverstone Enterprise of the assessee- group upon the aforesaid piece of land. The sale consideration depicted in the aforesaid sale deed is Rs.2,90,00,000/-. During the course of search, a paper showing working in respect of number of units constructed, sale value, sold area, unsold area, average cost of construction, land cost etc., of various projects of the group were found from the back office of the assessee- group located opposite Nilkanth School. Another such evidence was found from the digital data seized from the back office of the assessee- group. As per seized material, the rate of purchase of the above piece of land is Rs.27,300/- per sq. yard and the purchase value of the piece of land depicted therein is Rs.8,90,52,600/-. Whereas, the sale deed is made for Rs.2,90,00,000/- only. This proves that the assessee group has made unaccounted cash investment of Rs.6,00,52,600/- ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 4 (Rs.8,90,52,600/- (-) Rs.2,90,00,000/-) for purchase of the aforesaid piece of land. The snap shot of Page no. 96 of Annexure A-463 and the another evidence found from the digital data seized from the back office of the K -star group is reproduced by the assessing officer on page no.3 of the assessment order. 5. The assessing officer, therefore issued a show- cause notice dated 09.12.2019 to the assessee, to explain the transaction. In the show-cause notice, the assessing officer mentioned that a Search Action u/s. 132 of the I.T. Act was conducted at the residential and office premises of K. Star Group of Surat on 17.08.2015. During the course of search, many incriminating documents were found and seized. The Land Bearing F.P No. 95. T.P-26. R.S. No. 131 of Sineanpor Village, Taluka: Katargam, Surat. During analyzing the seized documents, it was evident that a land admeasuring 2727.46 sq. mts (3262 sq. yards) bearing F.P. No. 96 of T.P.-26 (Singanpor), R.S. No. 131 of Singanpor Village, Taluka: Katargam, District: Surat, was purchased by the assessee- group of K. Star i.e. Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani from the seller Shri Jagmal Maldevbhai Bhatu by virtue of sale deed registered at registration No. SRT/4/KTG/4307/2012, with the Sub- Registrar, Katargam, Surat. The said sale deed was executed on 05.03.2012. The project 'Silverstone Homes' was developed by M/s. Silverstone Enterprise of the assessee- group upon the aforesaid piece of land. The sale consideration depicted in the aforesaid sale deed is Rs. 2,90,00,000/-. During the course of search, a paper showing working in respect of number of units constructed, sale value, sold area, unsold area, average cost of construction, land cost etc., of various projects of the group were found from the back office of the assessee- group located opposite Nilkanth School. Another such evidence was found from the digital data seized from the back office of the assessee- group. As per seized material, the rate of purchase of the above piece of land is Rs.27,300/- per sq. yard and the purchase value of the piece of land depicted ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 5 therein is Rs.8,90,52,600/-. Whereas, the sale deed is made for Rs.2,90,00,000/- only. Therefore, assessing officer stated in the show cause notice that the assessee- group has made unaccounted cash investment of Rs. 6,00,52,600/-(Rs. 8,90,52,600 - Rs. 2,90,00,000) for purchase of the aforesaid piece of land. 6. In response to the above show -cause notice, the assessee has filed submission before the assessing officer, along with documentary evidences, on 17.12.2019. The assessee submitted that he has already furnished the detailed objections against alleged assessment proceeding reinitiated u/s. 147 of the Act vide online submission dated 10.11.2019. However, said objections had been disposed in summarily manner and without rebutting each contention in the objections. Therefore, addition proposed on the basis of invalid initiation of assessment proceeding was strongly objected and the same was requested to be dropped. 7.On merits, the assessee submitted before the assessing officer that assessee has repeatedly asked to provide certified/ authenticated copies of documents / evidences relied upon for initiating reassessment proceeding, i.e. statements recorded from the parties from whose possession alleged incriminating document found so as to enable the assessee to cross examine such person(s). However, no such documents /statements has been provided to the assessee and also, no cross examination of the witness has been availed. Therefore, in absence of such prime documents / procedure, alleged document seized from the premises of third party cannot be made binding on the assessee and on that basis, addition proposed in assessee`s case was strongly objected. The relevant part of the written submission, on merit, submitted by the assessee, before the assessing officer, is reproduced below: “Without prejudice to the above, on para-3 of the show-cause notice, your good self has mentioned that \"During analyzing the seized documents, it was evident that a land admeasuring 2727.46 sq. mts (3262 sq. yards) bearing F.P. No. 96 of T.P.-26 (Singanpor), ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 6 R.S. No. 131 of Singanpor Village, Taluka: Katargam, District: Surat, was purchased by the assessee group of K. Star i.e. Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani from the seller Shri Jagmal Maldevbhai Bhatu...\" In this connection, it is to submit that said observation is totally incorrect in as much as that I had sold the Agricultural Land wherein there cannot be any reference of FP No. or TP No. etc. Therefore, it is clear that so-called incriminating document referred to in showcause notice containing reference of FP No. / TP No. etc. represents Non-Agricultural Land (NA) and hence, there is no nexus between the transaction carried out by me and so-called document seized. Therefore, cognizance taken on the loose paper seized from the premises of third party is totally uncalled for and on that basis, high-pitched addition proposed in my case is strongly objected. iv. Further, your good self has also mentioned that \"The project 'Silverstone Homes' was developed by M/s. Silverstone Enterprise of the assessee group upon the aforesaid piece of land\". In this connection, it is to submit that I have not sold land to M/s. Silverstone Enterprise and land sold by me was not permissible for construction of project being an agricultural land. It is a fact on record that I have sold an agricultural land (on which, construction of project is not permissible) to Kishorbhai Koshiya& Others. Therefore, it can be appreciated that one or more transaction(s) in the impugned land has been carried out between parties to whom I have sold the land and M/s. Silverstone Enterprise who has constructed the project on land after converting the agricultural land into non-agricultural. In this background, allegation that the document seized during the search at the premises of K. Star Group (Silverstone Enterprise) is related to me is premature and thus, addition proposed in my hands on the basis of so-called seized document is uncalled for. v. As regard the loose paper stated to have been seized from the back office of the K Star group, at the outset, it is to submit that the said paper does not contain signature of any party and therefore, such unsigned cheat / paper cannot be straight away admissible as evidence against me in absence of any other cogent, concrete and corroborative evidence. It is a settled principle that any document without having signature of parties cannot be admissible as evidence and rather, it shall be treated as \"dumb document\". Therefore, addition proposed only on the basis of so-called dumb document is strongly objected especially in the light of fact that such document has been seized from the premises of third party and I have not been provided any opportunity to cross examine the witness. Reliance is placed on the decision of Rama Traders vs. First ITO [1998] 25 ITD 599 (Pat.) (TM), wherein, it was held that no addition could be made, on the basis of presumption raised by section 132(4A), in the hands of the assessee where in the books of another firm, certain figures were found showing the purchase made by the assessee. vi. Reliance also placed on following decisions: Hon'ble Apex Court in the case of Kishanchand Chellaram held that any addition made on the basis of statement by a Third Party without affording an opportunity for rebuttal or cross examination to the assessee is perverse. It was therefore the obligation of the A.O. to allow the assessee to cross examine in the interest of natural justice before embarking on a final view in this matter. Hon'ble Apex Court in the judgement dated 02.03.1998 in the case of CBI vs. V. C. Shukla &Ors. held that - Entries in books being admission can be used only against the maker or the person under whose authority they were made and not others. ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 7 Hon'ble ITAT Chandigarh Bench in the case of Abhay Kumar Jain vs. ITO 13 TTJ (CHD) 388, wherein it has been held that \"Inference of concealed income from the entries in certain diary found with a third party in a raid could not give valid reason to believe that the income had escaped assessment in the absence of any other evidence. Hon'ble ITAT, Chandigarh in the case of ACIT vs. Kishore Lal Balwani Rai (2007) 17 SOT 380 (Chd.), wherein, it held that - Sheth Akshay Pushpavadan v. Dy.CIT [2010] 130 TTJ 42 (Ahd.UO) Presumption u/s 132(4A) is not available, when the seized papers are recovered from third party and not from the assessee. ACIT v/s Prabhat Oil Mills (1995) 52 TTJ (Ahd) mere entries in the account to third parties were not sufficient to prove that the assessee indulged in such transactions. vii. Kind attention is also invited to the fact that recently, Hon'ble Supreme Court of India has refused to order any inquiry into documents recovered by Income Tax department during its raids at Birla and Sahara offices that allegedly showed payoffs to politicians. The Hon'ble Supreme Court said that it couldn't order inquiry against a chief minister or the prime minister only because there is an entry in a computer showing payments. viii. In view of the above, judicial authorities have consistently held that even though name of assessee written in any document seized from the premises of third party, no cognizance can be taken in the case of such assessee only on the basis of such seized document. Therefore, in the instant case, neither the name of the assessee written nor any signature found in the seized chit /paper, cognizance taken in my case is totally misplaced and hence, the proposal to make addition in my case is strongly objected. ix. This is a fact on record that the noting in the loose sheet is uncorroborated, not a speaking document and no supporting evidence by way of money receipt and other evidences were found. No addition can be made on the basis of dump document. Reliance is placed on the following decision: DCIT Central V C Krishna Yadav 2011,12 Taxman.com 4 Hyd Asst. CIT v. Satyapal Wassan [] 295 ITR (AT) 352 (Jabalpur), ACIT V Dr Kamla Prasad Singh 3 ITR Trib 533 Patna, CIT Vs. Khazan Singh & Brothers 2007,304 ITR 243 (P (P & H,) CIT v. Girish Chaudhary [2007] 163 Taxman 608, Delhi Bansal Strips (P.) Ltd. v. Asstt. CIT [2006],99 ITD 177 Delhi CIT v Mauli Kumar K. Shah [2008] 307 ITR 137(Guj.) x. Considering the above facts and judicial pronouncements, your proposal to make addition of Rs. 6,00,52,600/- on the alleged ground of unaccounted receipts from sale of land is strongly objected. ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 8 xi. Furthermore, your good self may appreciate that the transaction value recorded in the registered sale deed had been called for and examined by Deputy Collector, Stamp Valuation Department, Surat for assessment of stamp duty. In the order passed by Hon. Deputy Collector dated 29.03.2012, he had applied the market rate (Jantri) of developed open plot of land (though, the land sold was agricultural land, which market rate tends to be lower) and at that rate too, he was satisfied with the transaction value at which the transaction has been carried out. Therefore, addition proposed on the basis of arbitrary / imaginary value of land stated to have depicted in unsigned / un-confronted / un-authenticated stated to have been seized from the premises of third party is strongly objected.” 8. However, the assessing officer rejected the contention of the assessing and held that assessee had failed to furnish any documentary evidence in support of the unaccounted cash receipts of Rs.6,00,52,600/- (i.e, Sale of land Rs.8,90,52,600 (-) Rs.2,90,00,000), therefore, assessing officer added the same to the total income of the assessee as unaccounted cash receipts. 9. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the ld. CIT(A), who has allowed the appeal of the assessee. The ld CIT(A) noticed that the land in question was sold by the assessee as an agricultural land, and M/s K. Star Group entity was not the final buyer of land from the assessee, and the land used had been changed from agriculture to non-agriculture. In that view, the assessee cannot be held liable for having received any 'on-money' in cash in connection with sale of land, as the assessee has not sold the land to the K. Star Group entity, which is actually the second buyer, or subsequent buyer. Besides, on the documents found during the search, there is no signature of the assessee, and there is no any name and address, hence, documents are merely dump documents. Therefore, the ld. CIT(A) deleted the addition. 10. Aggrieved by the order of the learned, CIT (A), the revenue is in appeal before us. ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 9 11. Learned Departmental Representative ( ld.DR) submitted before us written submission, which are arguments of ld. DR for the revenue, which is reproduced below: “4. Argument of Ld. CIT(DR): The undersigned respectfully submits the following: (i) Ld. CIT(A) deleted the addition made, on account of on money received, solely on the ground that from the perusal of the documents in can be stated that Assessee has not sold the said land to any entity of K. Star Group, but either purchaser to whom the assessee has sold the land or some other intermediaries have sold the land to the K. Star Group. (ii) However, kind consideration should be given on the sequence of the facts stated below; a. The alleged land bearing Final Plot No. 96 of Town Planning Scheme 26, Singapore, R.S. No. 131 of Singapore, Village Katargam, District Surat was purchased by Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani from Shri Jagamal Malde Bhatu. The said land was duly registered at the Sub Registrar Office, Katargam, under Sale Deed No. SRT/4/KTG/4307/2012, dated 07/03/2012. Refer page no 1. b. The first document submitted into the record is Form No.6 of Gam Namuno (Haq Patrak), dated 14.05.2012, which evidences the sale of the said land by the Assessee to Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, and Swintu Arvind Mavani. Refer page no 22. c. The second document submitted into the record is Form No 6 of Gam Namuno (Haq Patrak), dated 09.07.2013, which denotes the Revenue Department of Gujarat's official notation of the transition of the land in question from agricultural to non- agricultural use. Refer page no 24. d. The third document, Form No 6 of Gam Namuno (Haq Patrak) dated 09.10.2013, evidences the inclusion of M/s Silverstone Enterprise into the records pursuant to the Partnership Deed executed by Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, Swintu Arvind Mavani, and Shri Bharatbhai B Gadhiya.Refer page no 25. e. In addition, a title history search was conducted using the Anyror portal (https://anyror.gujarat.gov.in), which confirms that the land was introduced into the partnership firm M/s Silverstone by the three partners only, who were the original ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 10 buyers of the land under consideration. A relevant excerpt from the search is attached for kind perusal. Refer page no 26. iii. From the perusal of the above documents, it can be observed that no subsequent sale transaction has taken place following the transaction made by the Assessee. To substantiate this assertion, the undersigned wishes to submit on record, the Partnership Deed executed on 12.08.2013 copy of which is enclosed as page no 32. This document specifies that Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, and Swintu Arvind Mavani were engaged in the business of buying, selling, and dealing in land; developing lands; and conducting operations as estate developers, organizers, estate dealers, and brokers, effective from 29.06.2012, under the name and style of \"Silverstone Enterprise. \"Pertinent to the land in question, Paragraph 4 of the aforementioned document is as follows: \"......The parties of the first to third part have w.e.f. 29.06.2012, contributed their land being the land admeasuring final plot of 2727.46 Sq.mtrs which was originally 3583.65 Sq.mtrs as per 7-12 of the revenue record, bearing Revenue Survey No. 131 paiki, T. P. Scheme No. 26 (Singanpor), F.P. No. 96 of Moje Singanpor, Dist. Surat as their capital in the firm and the parties shall develop the said land as the property of the firm.\" The above document proves beyond doubt that the land was bought by Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya and Swintu Arvind Mavani; thereafter converted by them into non-agricultural land; thereafter introduced as capital in the partnership firm viz. M/s Silverstone Enterprise and thereafter fourth partner Sh Bharatbhai B Gadhiya was introduced as partner. The records show that no separate sale deed has been executed regarding the transfer of title from the three partners i.e. Kishorbhai B. Koshiya, Gagjibhai B. Koshiya, and Swintu Arvind Mavani to M/s Silverstone Enterprise. Thus, there was no any intermediate transaction between the original seller ie. Jagamal Bhatu and the original buyers. Hence the on-money paid by the firm has gone to the assessee only and no one else and therefore, the AO has rightly assessed the same in the hands of the assessee. iv. Furthermore, the document issued by the Nayab Collector Stamp Duty Mulyankan Tantra (Deputy Collector Stamp Duty valuation cell) affirms that the land in question was exclusively owned by Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, and Swintu Arvind Mavani. No other individual or entity holds any claim to ownership or entitlements regarding this property in any capacity. Refer page no 47. V. To further substantiate this contention, the undersigned wishes to rely on the page no 54 of the sale deed executed by M/s Silverstone Enterprise with the independent buyer of the flat in the scheme named \"Silverstone Homes\", which was developed on the same land by M/s Silverstone Enterprise. In this document, history of ownership of land is narrated on page no.5 which again proves beyond doubt that following the sale transaction entered into ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 11 between the Assessee and the original partners of M/s Silverstone Enterprise, no other transactions occurred, and the purchasers remained the sole owners until the allotment of flats to the buyers in the \"Silverstone Homes\" scheme. vi. Therefore, the assertion by the Assessee that he had not conducted a sale to the K. Star Group is factually incorrect. The CIT(A) has also acknowledged in his order that the \"on money\" received by the actual seller of the land to the K. Star Group should be taxed. Based on the factual submissions provided above, the Assessee is the sole seller. Consequently, the valuation of the land recorded in the seized material pertains to the Assessee. Hence, addition made by Ld. AO in the hands of the Assessee should be sustained. 12. On the other hand, learned Counsel for the assessee submitted that the land has been sold by the assessee as an agricultural and cultivated land to three purchasers, namely Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani for a total consideration of Rs. 2.90 Crore. The occupation of the three persons is mentioned as business and agriculture. Their respective shares are mentioned as 25 percent, 25 percent and 50 percent. The documents relied upon by the assessing officer have been found and seized from the possession/premises of third persons, i.e. persons who are not a party to the impugned sale transaction. The land has been sold as an agricultural land, to other agriculturists only. The sale transaction of land has also been registered as sale of agricultural land in the Revenue records. After selling the land, if the purchasers converted the said land, into non-agricultural use , for that assessee under consideration, is nowhere connected. After selling the land, the responsibility of the seller comes to an end, and if the purchaser has converted the said land for non-agricultural use, the assessee does not have any control on the land, for subsequent use of land by the purchasers. The ld. Counsel for the assessee also relied on the findings of the ld. CIT (A) and stated that ld. CIT(A), after considering entire facts, has reached on the right conclusion, therefore order passed by the ld. CIT(A) may be upheld. ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 12 13. We have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and ld DR for the Revenue and evidences on record. We note that the loose papers found during the search stated to have been seized from the back office of the K Star group, and the said loose papers does not contain signature of any party and therefore, such unsigned cheat / paper cannot be straight away admissible as evidence against the assessee in absence of any other cogent, concrete and corroborative evidence. It is a settled principle that any document without having signature of parties cannot be admissible as evidence and rather, it shall be treated as \"dump document\". We note that the noting in the loose sheet is uncorroborated, not a speaking document and no supporting evidence by way of money receipt and other evidences were found. Therefore, no addition can be made on the basis of dump document. The assessee, under consideration is partner in partnership firms, having income from share in profits, remuneration, interest on capital, capital gain on sale of land and also earning agriculture income. The assessee has been declaring Substantial agriculture income from several years. The assessee has submitted before the assessing officer that he was holding agricultural land at village Kumbharia, District Surat and at Village Singalpor, District Surat. The land at Village Kumbharia was purchased and also sold during the Financial Year 2011-12 (the year under consideration) resulting into short term capital gain of Rs. 1,14,501/-,which was duly offered to tax. The land at Village Singalpor was purchased during the Financial Year 2006-07 at Rs. 5,68,230/- and was sold during the Financial Year 2011-12 to certain other agriculturists, namely, Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani for a sale consideration of Rs. 2.90 Crores. The resulting long term capital gain from sale of said agricultural land was Rs. 2,81,02,494/-, after taking the indexed cost of acquisition at Rs. 8,97,506/-. The assessee is stated to have purchased another agricultural land for Rs. 2.91 ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 13 Crores and claimed exemption from capital gains under section 54B of the Act. No adverse inference has been drawn on this issue of claim of exemption in the original assessment completed under section 143(3) read with section 153C of the Act. 14. The ld CIT(A) observed that sale deed was executed on 05.03.2012, in respect of sale of said piece of land . On perusal of the Sale Deed, it was noted by ld CIT(A) that the land has been sold by the assessee as an agricultural and cultivated land to three purchasers, namely Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani for a total consideration of Rs. 2.90 Crore. The occupation of the three persons is mentioned as business and agriculture. Their respective shares are mentioned as 25 percent, 25 percent and 50 percent. It was further noted by ld CIT(A) from the Schedule to the Sale Deed that the description and nomenclature of the land sold is at variance with the description and the nomenclature of the land, which has been referred to in the seized documents relied upon. It is also pertinent to note that the documents relied upon have been found and seized from the possession/premises of third persons, i.e. persons who are not a party to the impugned sale transaction. On perusal of the sale deed, the ld CIT(A) concurred with the contention of the assessee that the land has been sold as an agricultural land, to other agriculturists only. The sale transaction of land has also been registered as sale of agricultural land in the Revenue records. In the assessment order (Para 8), AO has stated that certain information was obtained from Deputy Collector, Stamp Duty, Surat regarding the sale of land, but has not reverted any factual finding to the contrary in this regard. The ld CIT(A) noticed that the land was sold by him as an agricultural land to certain agriculturist, and not to any entity of the K. Star Group. This is an admitted fact that the land in question was being used for developing a residential project by M/s Silverstone Enterprise, an entity ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 14 of the K. Star Group. The development of residential project would certainly entail conversion from agriculture to non-agriculture land and various other statutory permissions. There is nothing on record to suggest that the assessee was involved in any manner in the said land after he sold it to the three persons named above as an agriculture land. On given facts, the only possible conclusion is that the said piece of land has been sold subsequently by those three purchasers to some entity of the K. Star Group, either directly or after another intermediary sale transaction, and the said entity in turn has obtained the conversion of land use from agriculture to non-agriculture, and has undertaken other necessary formalities for development of residential project on the said land. In that event, the rate of purchase of Rs. 27,300/-per square yard, which is evidenced by the document seized from the premises of K. Star Group, would apply to such subsequent sale transaction, by way of which these three purchasers, or the further intermediary purchasers, have sold the said land finally to the K. Star Group- entity. In other words, the assessee cannot be made liable on account of any presumption of payment of on-money in cash, by the K. Star Group in connection with acquisition of the land for developing the residential project, which may even be a valid presumption based on the incriminating seized documents; for the simple reason that the assessee has not sold the land to the K. Star Group entity. It follows therefore that the liability arising out of payment of on-money by the K. Star Group in connection with purchase of land, needs to be fastened to the person(s) who were the final sellers to the K. Star Group firm; and not the assessee. 15. The ld CIT(A), on identical facts, relied on the judgement of the Hon'ble High Court of Gujarat (the jurisdictional High Court) in the case of Kantibhai Dharamshibhai Narola Vs ACIT (2021) 125 taxmann.com 348 (Gujarat) (which is also connected to search conducted in the case of K. Star Group of Surat, and wherein the issue was sale of land by one Shri Kantibhai Dharamshibhai Narola ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 15 to Shri Ankit Kumar Koshiya and Shri Swintu Arvindbhai Mevani, one of the joint purchasers of land in present case) has held that where assessee sold a land to two individuals and declared capital gain of certain amount and AO issued a reopening notice on ground that said land was actually sold to one K. Star Group for sale consideration of much higher amount, since assessee's transaction of sale was with two individuals who later sold land to K. Star Group for higher amount, which had nothing to do with sale transaction between assessee and two individuals and, further, AO had not applied his mind to arrive at conclusion that there was any failure by assessee to disclose fully and truly all material facts, impugned reopening notice after four years from end of relevant year was unjustified. The relevant part of the judgement is reproduced as under, - \"A third party information is only an information and does not constitute 'reason to believe' until and unless the third party information is subjected to investigation and, on the basis thereof, independent reasons are recorded by the Assessing Officer before issuance of notice under section 148 of the Act. We have noted above that the assessee was already assessed under the provisions of Section 143(3) of the Act 1961vide order dated 31st December 2013. Accordingly, the first proviso in Section 147 of the Act 1961 has a direct bearing on the issue on hand. It is stated therein that there cannot be any action under section 147 of the Act after the expiry of a period of four years from the end of the relevant assessment year until and unless the income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make disclosure of all the material facts truly and fully necessary for assessment. In the present case, we have already held that initiation of the proceedings under Section 147 of the Act was based on the borrowed satisfaction. Thus, it is implied that the Assessing Officer has not applied his mind to arrive at the conclusion that there was of failure on the part of the assessee to disclose fully and truly all the material facts. In other words, mentioning by the Assessing Officer that the assessee has failed to disclose all material facts in the reasons recorded is not sufficient enough. Rather the Assessing Officer is under the obligation to arrive at such conclusion that the assessee failed to disclose all material facts necessary for the assessment after applying his mind and verification of the facts. But the Assessing Officer has not done so. The entire basis for reopening the assessment is on the premise that there was a cash transaction of a huge amount, and having regard to the same, there was no true and full disclosure. We have already explained that this issue of cash transaction is nothing but a mere guess, and at the cost of repetition, the transaction of sale was not with K. Star Corporation. M/s. K. Star Corporation, in the present case, is the second buyer. ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 16 In our opinion, there is no escapement of income chargeable to tax. The conditions precedent for resorting to reopening of the assessment under section 147 of the Act 1961 are not satisfied in the present case. In the overall view of the matter, we are not convinced with the satisfaction arrived at by the respondent for the purpose of reopening of the assessment for the relevant Assessment Year 2011-12. In the result, this writ-application succeeds and is hereby allowed. The impugned notice is hereby quashed and set-aside. As a result, the connected two writ-applications also succeed and the impugned notice challenged in the two writ-applications is hereby quashed and set- aside.\" 16. The Ld. CIT(A), therefore, rightly observed that facts of the assessee`s case are identical to the facts in the case of Kantibhai Dharamshibhai Narola Vs ACIT (supra), based on which Hon'ble Gujarat High Court has rendered the above judgement, and therefore ratio of the above findings is applicable to the case assessee under consideration. In both the cases, documents were found from the premises of K. Star Group evidencing payment of on-money in cash by the Group for purchase of land, the land in question was sold by the assessee as an agricultural land, K. Star Group entity was not the final buyer of land from the assessee, and the land use had been changed from agriculture to non- agriculture. The relevant and material facts being identical, the ratio of the jurisdictional High Court decision in the above case has to be respectfully applied on the present case. In that view, the assessee cannot be held liable for having received any 'on-money' in cash in connection with sale of land, as the assessee has not sold the land to the K. Star Group entity, which is actually the second buyer, or subsequent buyer. Therefore, ld. CIT(A) held that there is no justification for making an addition of Rs. 6,00,52,600/- on account of receipt of 'on money' in cash, in the hands of the assessee, as the assessee has sold the land to three individuals as an agricultural land, and not sold to any K. Star Group entity, which might have acquired the same in a subsequent sale transaction to which the assessee is not a party, and for that reason, the assessee cannot be ITA NO. 361/RJT/2023 ACIT CIRCLE-1(1), RAJKOT - 360001 Page | 17 made liable. Therefore, ld CIT(A) deleted the addition. In the wake of above delineation, we see no error in the conclusion drawn by the CIT(A) in this regard. The CIT(A) in our view, has rightly deleted the addition. We thus decline to interfere with the conclusion so drawn by the CIT(A) whose order is under challenged by the revenue. Therefore, we dismiss the appeal of the revenue. 17. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 11/04/2025. Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot Ǒदनांक/ Date: 11 /04 /2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Rajkot "