MANSAROVAR COLONISERS LTD., Jaipur V. ACIT, Jaipur

ITA 1032/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2129 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 24-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Assessee Lawyers: O P AGARWAL
• Keywords: Reopening of assessment; Unexplained investment; Assessment record; Reason to believe; Documents seized; Borrowed satisfaction
• Section: 69C; 147; 131; 69; 148; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1032/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 M/S MANSAROVAR COLONIZERS LTD., 48, SHANTI VIHAR, NEW SANGANER ROAD, JAIPUR. CUKE VS. A.C.I.T., CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAECM 9900 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL & SHRI O.P. AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/08/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/08/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES F ROM THE ORDER OF THE LD. CIT(A)-1 JAIPUR DATED 26/09/2016 FOR THE A.Y . 2006-07, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. CIT(A) ERRED IN UPHOLDING THE REOPENING OF ASSESSMENT BY A.O. SOLELY ON THE BASIS OF INFORMATI ON RECEIVED FROM INVESTIGATION WING AND WITHOUT HAVING INDEPENDENT REASON TO BELIEVE IN ACCORDANCE WITH PROVISIONS OF SECTION 147. APPELLANT PRAYS ORDER SO PASSED ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 2 BY LD. A.O. IS NOT ACCORDANCE WITH LAW AND DESERVES TO BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF LD . A.O. IN CONFIRMING THE ADDITION OF RS. 40,80,000/- MADE BY LD. A.O. U/S 69C OF THE ACT ON THE ALLEGED PHOTOCOPIES OF SO CALLED PARTNERSHIP AGREEMENT TO WHICH ASSESSEE COMPANY WAS NOT A PARTY, THUS ADDITION SO MADE IS BAD IN LAW. APPEL LANT PRAYS ADDITION SO MADE MAY PLEASE BE DELETED. 2.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORI NG THE FACT THAT THE PARTIES TO THE SO CALLED PARTNERSHIP AGREEMENT AND THE SELLER HAVE BEEN EXAMINED BY LD. A.O. AND ALL HAVE DENIED OF ANY SUCH PAYMENT, THUS THE ADDITION OF RS. 40.80 LA CS DESERVES TO BE DELETED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY CARRYING ON THE BUSINESS OF DEVELOPING OF L AND. THE RETURN OF INCOME WAS FILED ON 28/03/2007 DECLARING INCOME AT N IL. THE RETURN WAS PROCESSED. THE ASSESSING OFFICER RECEIVED INFORMATIO N FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS ENTERED IN TO A PARTNERSHIP AGREEMENT WHERE CERTAIN AMOUNTS WERE PAID AND NOT DIS CLOSED IN THE RETURN OF INCOME. AFTER RECORDING THE REASONS, NOTI CE U/S 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE AC T) WAS ISSUED. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING T HE REOPENING VALID. HE SUBMITTED THAT SO CALLED INFORMATION RECEIVED FROM INVESTIGATION WING IS NOTHING BUT A SET OF TWO SCRAPPED AND WORTHLESS PHOT O STATE COPIES, WHICH ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 3 HAS BEEN CAPRICIOUSLY/ILLOGICALLY ASSUMED TO BE A P ARTNERSHIP AGREEMENT AND BASED ON THAT, THE ADDITION HAS BEEN MADE. HE F URTHER SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE REO PENING. THIS ASSESSMENT WAS REOPENED MERELY ON THE BASIS OF INFOR MATION GATHERED BY THE INVESTIGATION WING, JAIPUR AND WITHOUT ARRIVING AT THE CONCLUSION DRAWN AFTER EXAMINING THE SO CALLED INFORMATION. DUR ING THE ASSESSMENT PROCEEDINGS ALSO, THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT NO ACTUAL PARTNERSHIP DEED WAS EVER EXECUTED. TH E ASSESSING OFFICER HAS NOT CONTROVERTED THE FACTS NARRATED IN THE AFFI DAVIT SUBMITTED BY THE DIRECTOR OF THE COMPANY IN THIS REGARD. HE RELIED O N THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MEHTA PAREKH & CO. REPORTED IN 30 ITR 181 FOR THE PROPOSITION THAT IF AN AFFIDAVIT IS NOT CONTROVERTED THAN WHATEVER IS STATED THEREIN SHOULD BE ACCEPTED. SINCE THE AFFIDAVIT FILED BY THE DIRECTOR OF THE COMPANY HAS NOT BEEN REBUTTED, THEREFORE, WHATEVER STATED IN THE AFFIDAVIT HAS TO BE ACCEPTED. FURTHER THIS ISSUE IS PURELY A LEGAL GROUND, THEREFORE, THE ASSESSING OFFICER OUGH T TO HAVE CONSIDERED THE ISSUE OBJECTIVELY AND NOT ON THE BASIS OF SO CA LLED INFORMATION RECEIVED FROM SOME OTHER OFFICIALS OF THE DEPARTMENT. HE FUR THER SUBMITTED THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT WITHOU T APPLYING INDEPENDENT MIND, THEREFORE, THE SAME IS BAD IN LAW. HE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF SETH BROTHERS VS. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 4 CIT 169 CTR 519 WHEREIN THE HONBLE COURT HAS LAID DO WN THE PRINCIPLES THAT THERE MUST BE MATERIAL FOR BELIEF AND THE CIRC UMSTANCES MUST EXIST AND CANNOT BE DEEMED TO EXIST FOR ARRIVING AT AN OP INION. THE HON'BLE HIGH COURT ALSO HELD THAT REASON TO BELIEVE MUST BE HONE ST AND NOT BASED ON SUSPICION, GOSSIP, RUMOR OR CONJUNCTURE. FURTHER TH E HONBLE COURT HAS HELD THAT REASONS REFERRED MUST DISCLOSED THE PROCE SS OF REASONING BY WHICH HE HOLDS REASONS TO BELIEVE AND CHANGE OF OP INION DOES NOT CONFER JURISDICTION TO REASSESS. THE HONBLE COURT ALSO HEL D THAT THERE MUST BE NEXUS BETWEEN MATERIAL AND BELIEF. THERE REASONS REFE RRED MUST SHOW APPLICATION OF MIND BY THE ASSESSING OFFICER. THUS T HE VALIDITY OF THE REASSESSMENT HAS TO BE JUDGED WITH REGARD TO THE MAT ERIAL AVAILABLE WITH THE OFFICER AT THE POINT OF TIME OF THE ISSUE OF NO TICE U/S 148 OF THE ACT. LD. AR FURTHER RELIED ON THE DECISION OF THE HONBLE DE LHI HIGH COURT IN THE CASE OF SARTHAK SECURITIES CO. PVT. LTD. VS. ITO 329 ITR 110 FOR THE PROPOSITION THAT THE CONDITION PRECEDENT TO FORMATI ON OF BELIEF THAT INCOME ESCAPED ASSESSMENT AND THE REOPENING CANNOT BE BASE D ON BORROWED SATISFACTION. HE ALSO RELIED ON THE DECISION OF THE HONBLE ITAT, JAIPUR BENCHES, JAIPUR IN THE CASE OF M/S PEEYUSH CONSTRUC TION PVT. LTD. VS. DCIT (2002) XXVIII TAXWORLD 57. HE ALSO PLACED RELIANCE O N THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS S .M.S. INVESTMENT CORP. (P) LTD. 207 ITR 364. HE ALSO RELIED ON THE DE CISION OF HONBLE JAIPUR ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 5 ITAT IN THE CASE OF KISHAN CHAND SOBHRAJMAL VS. ACIT 41 ITD 97 (ITAT JP) FOR THE PROPOSITION THAT PRESUMPTION U/S 132 (4 A) THAT CONTENTS OF DOCUMENTS SEIZED IN SEARCH ARE TRUE AND REBUTTABLE. HE ALSO RELIED ON THE DECISION OF THE HONBLE ITAT AHMEDABAD A BENCH IN THE CASE OF SHETH AKSHAY PUSHPAVADAN VS. DCIT 130 TTJ 42. FINALLY HE SU BMITTED THAT THE REOPENING WAS BAD IN LAW. 4. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDER OF THE LD. CIT(A) AND SUBMITTED THAT THERE WAS SUFFICIENCY OF RE ASON ON WHICH AN ORDINARY MAN CAN MAKE A BELIEF THAT INCOME HAS ESCA PED ASSESSMENT. SHE ALSO PLEADED THAT THE ASSESSING OFFICER RECEIVED IN FORMATION FROM THE INVESTIGATION WING WHICH WAS AN AGREEMENT BETWEEN THE ASSESSEE THAT THE OTHER PERSONS. IT WAS A PARTNERSHIP AGREEMENT, W HICH SHOWS THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WHICH HAS A R EFERENCE IN THIS PARTNERSHIP AGREEMENT WHEREIN THE ASSESSEE HAD PAID RS. 51.00 LACS IN CASH TO THE SELLER OF THE LAND. THEREFORE, THERE WAS SUFFICIENT GROUND TO FORM A REASONABLE BELIEF THAT THE INCOME HAS ESCAPE D ASSESSMENT. 5. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. I HAV E ALSO GONE THROUGH THE CASE LAWS RELIED BY BOTH THE SIDES. THE LD. CIT(A) HAS SUSTAINED THE REOPENING BY HOLDING AS UNDER:- 3.2.1 DETERMINATION ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 6 (I) THE BRIEF FACTS OF THE CASE ARE THAT THE APPELL ANT COMPANY WAS INCORPORATED ON 10.03.2005 AND WAS ENGAGED IN THE B USINESS OF REAL ESTATE RELATED TO DEVELOPMENT OF TOWNSHIPS ETC. AND HAS FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 28.03.2007 DECLARING NIL INCOME. ITS CASE HAS BEEN REOPENED U/ S 147 OF IT ACT, 1961 ON THE BASIS OF INFORMATION RECEIVED FROM INVE STIGATION WING AND NOTICE DATED 26.03.2013 U/S 148 OF IT ACT WAS S ERVED ON APPELLANT COMPANY AND ASSESSMENT U/S 148/143(3) OF THE ACT HAS BEEN COMPLETED ON 11.02.2014 DETERMINING TOTAL INCO ME AT RS. 40,80,000/-. (II) DURING APPELLATE PROCEEDINGS, IT WAS THE CONTE NTION OF THE APPELLANT THAT PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED MERELY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATIO N WING OF THE DEPARTMENT, WHICH INFORMATION WAS NOTHING BUT A SET OF TWO SCRAPPED AND WORTHLESS PHOTO STATE PAPERS WHICH THE AO ASSUMED TO BE A PARTNERSHIP AGREEMENT. IT WAS STATED THAT T HE REOPENING OF ASSESSMENT WAS OPPOSED BY THE APPELLANT VIDE OBJECT IONS DATED 24.12.2013 WHICH WERE DISPOSED OFF BY THE AO VIDE O RDER DATED 17.01.2014 IN A VERY SUMMARY MANNER BY TOTALLY IGNO RING THE SUBSTANCE OF THE OBJECTIONS RAISED AND THE SUBMISSI ONS MADE. (III) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBM ITTED BY THE AR THAT THE APPELLANT COMPANY HAS ENTERED INTO A TRANSACTIO N OF PURCHASE OF PIECE OF LAND AT VILLAGE KALWADA, TEHSIL SANGANER, DISTRICT JAIPUR ADMEASURING 3.73 HECTARES FOR A TOTAL CONSIDERATION OF RS. 45,58,912/- FROM SHRI RAJESH AND SHRI MANNU BOTH SO NS OF SHRI MUNNALAL GOYAL IN TERMS OF THE REGISTERED SALE DEED MADE AND EXECUTED ON 10.10.2005 AND THE ENTIRE SALE CONSIDER ATION OF RS. 45,58,912/- WAS PAID THROUGH ACCOUNT PAYEE'S CHEQUE / DD WHICH ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 7 HAVE DULY BEEN MENTIONED IN THE REGISTERED SALE DEE D AND NO AMOUNT WAS EITHER REFERRED AS PAID IN CASH IN ADVAN CE OR IN ANY OTHER MODE. HOWEVER, THE AO WITHOUT ANY BASIS ALLEG ED THAT THE APPELLANT COMPANY HAD PAID RS. 51 LAC IN CASH TO TH E SELLERS OF THE SAID LAND AS ADVANCE TOWARDS THE PURCHASE OF LAND, MERELY ON THE BASIS OF THE ALLEGED PHOTOCOPY OF PARTNERSHIP AGREE MENT STATED TO HAVE BEEN SUPPLIED BY THE INVESTIGATION WING. IT WA S FURTHER SUBMITTED THAT THE SAID PAPERS WHICH HAVE BEEN PRES UMED BY THE AO AS A PARTNERSHIP AGREEMENT' ARE NOTHING BUT SCR AP PAPERS WHICH ARE ONLY THE PHOTOCOPIES AND HAVE NO RELATION WHATS OEVER WITH THE APPELLANT AND THERE IS NO EVIDENCE OR ANY MATERIAL TO INDICATE THAT THE SO-CALLED PARTNERSHIP AGREEMENT WAS EVER EXECUT ED, AND THUS IT REMAINS A UNILATERAL DOCUMENT WHICH CANNOT BIND ANY OF THE PARTIES. NO EFFORT WAS MADE BY THE AO TO TRACE OUT AND VERIF Y THESE FACTS. (IV) IT WAS FURTHER SUBMITTED THAT THE CONSIDERATIO N AS MENTIONED IN THE REGISTERED SALE DEED SHALL BE TAKEN AS THE ACTUAL S ALE CONSIDERATION AND THIS SALE DEED IN THE CASE OF APPELLANT, SHALL PREVAIL OVER ANY SO- CALLED PARTNERSHIP AGREEMENT WHICH IS NOT EVEN NOTA RIZED, NOT PROPERLY SIGNED, NOT WITNESSED BY INDEPENDENT WITNE SSES AND EXECUTED WITHOUT THE AUTHORITY OF THE APPELLANT COM PANY AND ORIGINAL OF THE SAID DOCUMENT WAS NEVER BROUGHT ON RECORD. (V) IT WAS ALSO SUBMITTED THAT THE PHOTOCOPIES ARE NOT AT ALL WORTHY OF BEING RELIED UPON AS THEY HAVE LITTLE EVIDENTIARY V ALUE GIVEN THE FACT THAT THEY CAN EASILY BE TEMPERED WITH AND THEREFORE , REOPENING OF THE ASSESSMENT U/S 147 OF INCOME TAX ACT, 1961 MERE LY ON THE BASIS OF SUCH PHOTOCOPIES IS ABSOLUTELY BAD IN LAW AND DE SERVES TO BE STRUCK DOWN. IT WAS THE SUBMISSION OF THE APPELLANT THAT THERE WAS ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 8 NO REASON TO BELIEVE FOR INITIATING PROCEEDINGS U/S 147 OF THE ACT AND THUS THE IMPUGNED ASSESSMENT ORDER IS LIABLE TO BE QUASHED. (VI) I HAVE DULY CONSIDERED THE ASSESSMENT ORDER, S UBMISSIONS OF THE APPELLANT, ASSESSMENT RECORD AND MATERIAL PLACED ON RECORD. IT WOULD BE APPROPRIATE TO REPRODUCE HERE THE REASONS RECORDED BY THE AO FOR INITIATING PROCEEDINGS U/S 147 OF THE ACT AS UNDER: THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FO R A.Y. 2006-07 ON 28.03.2007 WHICH WAS PROCESSED ON 12.10.2007. INFOR MATION IN THE CASE OF M/S MANSAROVAR COLONISERS LTD. JAIPUR IS RE CEIVED FROM INVESTIGATION (WING), JAIPUR VIDE LETTER F. NO. DDIT(INV).!/JPR/TEP2012-13/1431 DATED 26.03.2013. THERE IS A PARTNERSHIP AGREEMENT MADE ON 25.05.200 5 BETWEEN M/S MANSAROVAR COLONIZERS LTD. THROUGH ITS DIRECTOR SH. DULLA RAM AND SH. MOHD. SALEEM. ON PERUSAL OF PARTNERSHIP AGREEME NT FOR PURCHASE OF LAND AT VILL. KALWAD, SANGANER KHASRA N O. 977/2759 MEASURING 3.73 HECTARE. IT IS REVEALED THAT RS. 51, 00,000/- HAVE BEEN PAID TO THE SELLER PARTY AS ADVANCE FOR PURCHA SE OF AFORESAID LAND. THE SALE DEED OF ABOVE MENTIONED LAND HAS BEEN REG ISTERED ON 10.10.2005 WHEREIN PURCHASER PARTY I.E. M/S MANSARO VER COLONIZERS LTD., THROUGH ITS DIRECTOR SHRI GULLA RAM HAS MADE PAYMENT OF RS. 45,58,912/- THROUGH CHEQUES TO THE SELLER PARTY . T HE ADVANCE PAYMENT MADE IN CASH AT RS. 51,00,000/- IS NOT APPE ARING IN THE REGISTERED SALE DEED. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT PAYME NT MADE AS PER PARTNERSHIP AGREEMENT AMOUNTING TO RS. 51,00,000/- IS MADE OUT OF UNDISCLOSED INCOME AND THE SAME WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS BY THE ASSESSEE COMPANY. AS PER PARTNERSHIP AGREEMENT THE ASSESSEE COMPANY HAS 80% SHARE IN SUCH PARTNERSHIP. ACCORDINGLY 80% OF RS. 51,00,0 00/- WHICH COMES OUT TO RS. 40,80,000/- IS PAID BY THE ASSESSEE COMP ANY AS ADVANCE FOR PURCHASE OF AFORESAID SAID LAND IN CASH AND SAM E IS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. IN VIEW OF THE ABOVE DISCUSSION AND FACTS, I THEREF ORE HAVE REASONS TO BELIEVE THAT INCOME OF RS. 40.80,000/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE IT ACT. 19 61 .STATUTORY APPROVAL FOR ISSUE OF NOTICE U/S 148 IS SOLICITED. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 9 (VII) IT IS NOTED FROM THE PARTNERSHIP AGREEMENT CU M LEKH PATRA DATED MAY, 2005 (STAMP PAPER WAS PURCHASED ON 25.05.2005) EXECUTED BETWEEN SHRI GUILD RAM, AS DIRECTOR OF THE APPELLAN T COMPANY AND SHRI NOOR MOHD. THAT THE APPELLANT COMPANY HAD ENTE RED INTO AN AGREEMENT TO SELL DATED 09.05.2005 FOR PURCHASE O F 3.73 HECTARES OF LAND AT VILLAGE KALAWADA WITH SHRI RAJESH AND MA NNU BOTH SONS OF SHRI MUNNALAL GOYAL AND THE APPELLANT COMPANY IN VIEW OF THE AGREEMENT TO SELL DATED 09.05.2005 HAD ALREADY PA ID A SUM OF RS. 51 LAC IN CASH AND THE BALANCE AMOUNT WAS TO BE PAI D WITHIN A PERIOD OF TWO MONTHS. (VIII) IT WAS FURTHER NOTED FROM THE ABOVE REFERRED DOCUMENT THAT THE APPELLANT COMPANY MADE SHRI NOOR MOHD AS A PARTNER FOR 20% SHARE OF THE LAND AND THE OUTSTANDING AMOUNT WAS TO BE PAID IN THE RATIO OF 80% AND 20% BETWEEN THE APPELLANT COMPANY AND SHRI NOOR MOHD. AND SO WOULD BE THE PROFIT SHARING RATIO. THE SAID DOCUMENT WAS SIGNED BY BOTH I.E. SHRI GULLA RAM AND SHRI NOO R MOHD. AND WITNESSED BY SHRI TARA PRAKASH MEENA. (IX) THUS, AS PER THE SAID AGREEMENT, THE APPELLANT FIRM ENTERED INTO AN AGREEMENT TO SELL DATED 09.05.2005 FOR PURCHASE O F LAND ADMEASURING 3.82 HECTARES OF LAND AT VILLAGE KALAWA DA WITH SHRI RAJESH AND MANNU BOTH SONS OF SHRI MUNNALAL GOYAL. IT IS PERTINENT TO MENTION THAT THE SAME LAND HAVING THE SAME AREA WAS PURCHASED BY THE APPELLANT COMPANY THROUGH SALE DEED DATED 10 .10.2005 FROM THE SAME PERSONS DECLARING SALE CONSIDERATION AT RS . 45,58,912/- AND OBVIOUSLY THE CASH PAYMENT OF RS. 51 LAC WAS NO T APPEARING IN THE SAID SALE DEED. (X) IT MAY BE NOTED THAT THE APPELLANT FIRM WAS INC ORPORATED ON 10.03/2005 AND IT COMMENCED ITS BUSINESS OF REAL ES TATE FROM ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 10 16.03.2005 AND FOR THE YEAR UNDER CONSIDERATION, IT HAD FILED ITS RETURN OF INCOME DECLARING NIL INCOME, WHEREAS ON T HE BASIS OF THE PHOTOCOPY OF THE ALLEGED AGREEMENT DATED MAY, 2 005 THE APPELLANT COMPANY ALONG WITH SHRI NOOR MOHD. PAID A OF RS. 51 LACS IN CASH IN PURSUANCE TO AGREEMENT TO SELL DATED 0 9.5.2005. IT IS PERTINENT TO MENTION HERE THAT SUMMON U/S 131 OF TH E ACT WERE ALSO ISSUED ON 22.03.2013 WHICH WERE REFUSED BY THE ELEC TOR OF THE APPELLANT COMPANY. (XI) THEREFORE, LOOKING TO THE TOTALITY OF FACTS AN D CIRCUMSTANCES OF THE CASE, IN MY CONSIDERED OPINION, THE AO HAS SUFFICIE NT REASONS TO BELIEVE THAT THE INCOME AMOUNTING TO RS. 40,80,000 - BEING 80% OF RS 51 LAC HAD ESCAPED ASSESSMENT. (XII) IT MAY BE MENTIONED THAT IN THE CASE OF RAYMO ND WOOLLEN MILLS LTD. VS ITO [1999] 236 ITR 34 (SC), IT WAS HELD BY THEIR LORDSHIP THAT IN THIS CASE, WE DO NOT HAVE TO GIVE A FINAL DECIS ION AS TO WHETHER THERE IS SUPPRESSION OF MATERIAL FACTS BY THE ASSES SEE OR NOT. WE HAVE ONLY TO SEE WHETHER THERE WAS PRIMA FACIE SOME MATE RIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CO NSIDERED AT THIS STAGE. WE ORE OF THE VIEW THAT THE COURT CANNOT STR IKE DOWN THE REOPENING OF THE CASE IN THE FACTS OF THIS CASE. IT WILL BE OPEN TO THE ASSESSEE TO PROVE THAT THE ASSUMPTION OF FACTS MODE IN THE NOTICE WAS ERRONEOUS. THE ASSESSEE MAY ALSO PROVE THAT NO NEW FACTS CAME TO THE KNOWLEDGE OF THE INCOME-TAX OFFICER AFTER COMPLETIO N OF THE ASSESSMENT PROCEEDING. WE ARE NOT EXPRESSING ANY OP INION ON THE MERITS OF THE CASE. THE QUESTIONS OF FACT AND LAW A RE LEFT OPEN TO BE INVESTIGATED AND DECIDED BY THE ASSESSING AUTHORITY . THE APPELLANT WILL BE ENTITLED TO TAKE ALL THE POINTS BEFORE THE ASSES SING AUTHORITY. THE APPEALS ARE DISMISSED. (XIII) FURTHER, IN THE CASE OF ACIT VS. RAJESH JHAV ERI STOCK BROKERS PVT. LTD. [2007] 291 ITR 500 (SC), IT WAS HELD BY THE HON'BLE APEX COURT THAT IF THE AO, FOR WHATEVER REASON, HAS REASON TO BELIEVE THAT INCOME HAS ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 11 ESCAPED ASSESSMENT, IT CONFERS JURISDICTION TO RE-O PEN THE ASSESSMENT. IT IS A FACT THAT NO ASSESSMENT WAS MAD E EARLIER U/S 143(3)/144 OF THE ACT IN THE CASE OF THE APPELLANT, THEREFORE, THE RATIO IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) APPLIES SQUARELY TO THE FACTS OF THE INSTAN T CASE UNDER CONSIDERATION. (XIV) IT MAY BE MENTIONED THAT DURING THE ASSESSMEN T PROCEEDINGS, THE AO PROVIDED REASONS FOR REOPENING THE CASE TO THE A PPELLANT, CONSIDERED ITS OBJECTIONS AGAINST INITIATION OF PRO CEEDINGS U/S 147 OF THE ACT AND REJECTED THE SAME VIDE A SPEAKING ORDER DATED 17.01.2014. HENCE, THE AO FOLLOWED THE DUE PROCEDUR E AS DECLARED BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIVES HAFT. (XV) IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD TH AT THE AO WAS JUSTIFIED IN REOPENING THE CASE OF THE APPELLANT FOR THE YEAR UN DER CONSIDERATION U/S 147 OF THE ACT. HENCE, THIS GROUND OF APPEAL IS HEREBY REJECTED. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTA TE AND DEVELOPING THE TOWNSHIP. THE INVESTIGATION WING PASSED ON AN INF ORMATION THAT THE ASSESSEE HAS ENTERED INTO A PARTNERSHIP AGREEMENT WI TH SOME THIRD PARTY WHERE THE ASSESSEE HAS PAID CASH OF RS. 51.00 LACS. ALTHOUGH, THE INFORMATION WAS BASED ON A PHOTO STATE COPY. HOWEVER, FOR THE PURPOSE OF REOPENING U/S 148 OF THE ACT, THERE WAS ADEQUATE MAT ERIAL ON THE BASIS OF WHICH THE REASON TO BELIEVE FOR ESCAPEMENT OF INCOME WAS ARRIVED BY THE ASSESSING OFFICER. FURTHER I WOULD ALSO LIKE TO STAT E THAT SUFFICIENCY OF REASONS AND CORRECTNESS OF MATERIAL IS NOT A NECESS ARY CONDITION TO BE CONSIDERED TO ARRIVE AT A REASONABLE BELIEVE FOR ES CAPEMENT OF INCOME AND ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 12 FOR REOPENING THE ASSESSMENT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF RAYMOND WOOLEN MILLS LTD. VS ITO (1999) 236 ITR 34 (SC). FURTHER IT IS ALSO IMPORTANT TO NOTE THAT THERE WAS NO ASSESSMENT U/S 143(3)/144 OF THE ACT. IT IS ALSO NOTICED THAT THE ASSESSEE WAS PROVIDED THE COPY OF REASONS FOR REOPENING. OBJECTIONS FILED BY THE ASSESSEE WERE REJECTED BY PASSING A SPEAKING ORDER BY THE ASSESSI NG OFFICER, THEREFORE, THE PROCEDURE AS LAID DOWN BY THE HON'BLE SUPREME CO URT IN THE CASE GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & ORS. (2003) 259 ITR 19 (SC) WAS COMPLIED WITH. THE HON'BLE SUPREME COURT HAS HELD AS UNDER:- WHEN A NOTICE UNDER SECTION 148 OF THE INCOME-TAX A CT, 1961, IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING THE NOTICES. T HE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. ON RECEIVING NOTICES UNDER SECTION 148 THE APPELLAN T FILED THE RETURNS. THE APPELLANT ALSO RECEIVED NOTICES UNDER SECTION 143(2 ) CALLING FOR FURTHER INFORMATION ON CERTAIN POINTS IN CONNECTION WITH TH E RETURNS. THEREUPON THE APPELLANT FILED WRIT PETITIONS CHALLENGING THE NOTI CES. THE HIGH COURT DISMISSED THE WRIT PETITIONS HOLDING THAT THE PETITIONS WERE PREMATURE AND THE APPELLANT COULD RAISE ITS OBJECTIONS TO THE NOTICES BY FILING REPLY TO THE NOTICES BEFORE THE ASSESSING OFFICER (SEE, E.G., [2002] 257 ITR 70 2). THE APPELLANT PREFERRED APPEALS AND THE SUPREME COURT DISMISSED THE APPEALS , OBSERVING THAT SINCE THE REASONS FOR REOPENING OF ASSESSMENTS UNDER SECT ION 148 HAD BEEN DISCLOSED IN RESPECT OF FIVE ASSESSMENT YEARS, THE ASSESSING OFFICER HAD TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A S PEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENTS FOR THOSE YEARS. THE HON'BLE SUPREME COURT IN THE CASE OF RAYMOND WOO LEN MILLS LTD. VS ITO (1999) 236 ITR 34 (SC) HAS HELD AS UNDER:- IN THIS CASE, WE DO NOT HAVE TO GIVE A FINAL DECIS ION AS TO WHETHER THERE IS SUPPRESSION OF MATERIAL FACTS BY THE ASSESSEE OR NO T. WE HAVE ONLY TO SEE WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY O R CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS ST AGE. WE ARE OF THE VIEW THAT THE COURT CANNOT STRIKE DOWN THE REOPENING OF THE CASE IN THE FACTS OF ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 13 THIS CASE. IT WILL BE OPEN TO THE ASSESSEE TO PROVE THAT THE ASSUMPTION OF FACTS MADE IN THE NOTICE WAS ERRONEOUS. THE ASSESSE E MAY ALSO PROVE THAT NO NEW FACTS CAME TO THE KNOWLEDGE OF THE INCOME-TA X OFFICER AFTER COMPLETION OF THE ASSESSMENT PROCEEDING. WE ARE NOT EXPRESSING ANY OPINION ON THE MERITS OF THE CASE. THE QUESTIONS OF FACT AND LAW ARE LEFT OPEN TO BE INVESTIGATED AND DECIDED BY THE ASSESSIN G AUTHORITY. THE APPELLANT WILL BE ENTITLED TO TAKE ALL THE POINTS B EFORE THE ASSESSING AUTHORITY. THE APPEALS ARE DISMISSED. THERE WILL BE NO ORDER AS TO COSTS. CONSIDERING ALL THE RELEVANT FACTS, CASE LAWS AND LE GAL POSITION, I FIND NO MERIT IN THIS GROUND OF ASSESSEES APPEAL, THEREFOR E, THE SAME STANDS DISMISSED. 6. IN THE GROUNDS NO. 2 AND 2.1 OF THE APPEALS, THE ISSUE INVOLVED IS AGAINST SUSTAINING THE ADDITION OF RS. 40,80,000/- BASED ON THE PHOTO STATE COPY OF THE PARTNERSHIP AGREEMENT. ON THIS ISSUE, T HE LD AR OF THE ASSESSEE HAS SUBMITTED AS UNDER: IN THIS GROUND OF APPEAL THE ASSESSEE HAS CHALLENGE D THE ACT OF THE LD. CIT(A) IN UPHOLDING THE ADDITION OF RS. 40,80,000/- MADE U/S 69C BY ALLEGING THAT ASSESSEE COMPANY HAS PAID ADVANCE IN CASH, FOR THE PURCHASE OF LAND. IN THIS REGARD IT IS SUBMITTED THAT THE APPELLANT COMPANY AFTER ITS INCORPORATION DURING THE YEAR UNDER APPEAL HAS ENTE RED INTO A TRANSACTION OF PURCHASE OF PIECE OF LAND SITUATED AT VILLAGE KALWA DA, TEHSIL SANGANER, DIST. JAIPUR, KHASRA NO. 977/2759 ADMEASURING 3.73 HECTAR ES FOR A TOTAL CONSIDERATION OF RS. 45,58,912/- FROM SHRI RAJESH G OYAL AND SHRI MANNU GOYAL, BOTH ARE RESIDENT OF B-04, GANESH MARG, BAPU NAGAR, JAIPUR IN TERMS OF THE REGISTERED SALE DEED MADE AND EXECUTED ON 10 .10.2005 (APB 35-39) AND THE ENTIRE SALE CONSIDERATION OF RS. 45,58,912/ - WAS PAID THROUGH PAYEES ACCOUNT CHEQUE / DD WHICH IS DULY MENTIONED IN THE REGISTERED SALE DEED ALONGWITH THE DETAILS SUCH AS CHEQUE/DD NUMBER , AMOUNT, NAME OF ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 14 BANK AND BRANCH, DATE OF PAYMENT, RECIPIENT OF THE PAYMENT (SELLERS) OUT OF COMPANIES OWN / ARRANGED FUNDS AND ENTIRE AMOUNT IS RECORDED IN BOOKS OF ACCOUNTS OF ASSESSEE WITHOUT HAVING ANY REFERENCE T O ANY PARTNERSHIP. THE SAID REGISTERED SALE DEED CLEARLY ESTABLISHES THAT THE SALE CONSIDERATION IN RESPECT OF THE PURCHASE OF ABOVEMENTIONED LAND WAS ENTIRELY MADE THROUGH CHEQUES / DDS AND NONE OF THE AMOUNT WAS EITHER REF ERRED AS PAID IN CASH IN ADVANCE OR IN ANY OTHER MODE NOR IT HAD ANY REFE RENCE OF ANY OTHER PARTY NAMELY SHRI MOHAMMED SALIM REFERRED TO IN THE ALLEG ED SEIZED PARTNERSHIP AGREEMENT. HAD THAT BEEN THE REAL STATE OF FACT, HE (MOHD. SALIM) SHOULD ALSO BE ONE OF THE CO-BUYER OF THE SAID PROPERTY. HOWEVER, DESPITE OF THESE CLEAR AND UNDOUBTED FACT S, THE LD. AO WITHOUT ANY BASIS ALLEGED THAT THE ASSESSEE COMPANY HAD PAI D RS. 51,00,000/- IN CASH TO THE SELLERS OF THE SAID LAND AS ADVANCE TOW ARDS THE PURCHASE OF LAND, SOLELY RELYING UPON THE ALLEGED PHOTOCOPY OF SO CALLED PARTNERSHIP AGREEMENT STATED TO HAVE BEEN SUPPLIED BY THE INVE STIGATION WING ORIGINAL OF WHICH HAS NEVER BEEN BROUGHT ON RECORD INSPITE O F REQUEST MADE (APB 31-32). IT IS HUMBLY SUBMITTED THAT, THE SAID PAPERS WHICH HAVE BEEN PRESUMED BY THE LD. AO AS A PARTNERSHIP AGREEMENT ENTERED BET WEEN THE ASSESSEE COMPANY AND MOHD. SALIM HOWEVER ARE NOTHING BUT SCR AP PAPERS WHICH ARE ONLY THE PHOTOCOPIES. THERE IS NO SPECK OF EVIDENCE OR ANY MATERIAL TO INDICATE THAT THE SO-CALLED PARTNERSHIP AGREEMENT W AS EVER EXECUTED / SIGNED BY ONE PARTY, AND THUS, A DOCUMENT NOT ENFOR CEABLE BY LAW, WHICH CANNOT BIND ANY OF THE PARTIES. NO EFFORT WAS MADE BY THE LD. AO TO TRACE OUT AND VERIFY THESE FACTS FROM THE OTHER PARTY I.E . MOHD. SALIM IN THE ASSESSMENT OR IN REMAND PROCEEDINGS. ALSO NO EFFORT WAS MADE BY LD. AO TO CORROBORATE HIS OBSERVATIONS BY BRINGING ON RECO RD ANY MATERIAL WHICH COULD SHOW THAT ANY SORT OF PAYMENT IN CASH ON ACCO UNT OF ALLEGED ADVANCE TO THE TUNE OF RS. 51,00,000/- WAS EVER MADE BY THE ASSESSEE. EVEN IN ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 15 REMAND PROCEEDINGS BOTH THE SELLERS AND DIRECTOR OF ASSESSEE COMPANY CATEGORICALLY DENIED OF SUCH PAYMENT, LD. AO MADE A PRESUMPTION TO THIS EFFECT ON THE BASIS OF THE SO-CALLED PARTNERSHIP AG REEMENT, IGNORING THE FACT THAT ACTUAL CONSIDERATION OF THE LAND WAS RS. 45,58 ,912/- AS MENTIONED IN THE SALE DEED DATED 10.10.2005 AND THIS AMOUNT WAS PAID ENTIRELY VIDE CHEQUES / DDS. IT NEEDS NO EMPHASIS THAT THE CONSID ERATION AS MENTIONED IN THE REGISTERED SALE DEED SHALL BE TAKEN AS THE A CTUAL SALE CONSIDERATION AND THIS SALE DEED SHALL IN THE CASE OF ASSESSEE PR EVAIL OVER ANY SO-CALLED PARTNERSHIP AGREEMENT WHICH NEITHER PROPERLY WITNES SED NOR NOTARIZED NOR ACTED UPON IF FOR ARGUMENT SAKE ITS CONTENTS ARE TA KEN AS CORRECT AND WAS EXECUTED WITHOUT THE AUTHORITY OF THE ASSESSEE COMP ANY. THE ABOVE CONTENTION OF THE APPELLANT GETS SUPPORT FROM THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. BHANWAR LAI MURWATIYA AND OTHERS REPORTED IN 39 TAXWORLD 214, WHEREIN THE HONBLE HIGH COURT WHILE CONSIDERING THE QUESTIONS WHETHER ANY HIGH C ONSIDERATION THAN THE ONE MENTIONED IN THE SALE DEED PASS FROM THE ASSESS EE TO THE SELLER IS PURELY A QUESTION OF FACT? AND WHETHER DEPARTMENT HAS TO BRING ON RECORD SUFFICIENT EVIDENCE BEFORE MAKING ADDING U/S 69 OF THE ACT? DISMISSED THE APPEAL OF THE DEPARTMENT BY OBSERVING THAT, NO EVID ENCE HAS BEEN BROUGHT ON RECORDS BY THE DEPARTMENT TO ESTABLISH THAT AN A MOUNT OF RS. 61 LAKHS WAS PASSED TO THE SELLER FROM THE PURCHASERS. ALSO THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. SMT. K C AGNES & OTHERS [262 ITR 354] HELD THAT WHEN A DOCUMENT SHOWS FIXED PRICE, THERE WILL BE A PRESUMPTION THAT, IT IS A CORRECT PRICE A GREED UPON BY THE PARTIES. IT IS NOT NECESSARY THAT THE PRICE STATED IN THE AG REEMENT WILL BE THE PRICE SHOWN IN THE SALE DEED. SOMETIMES IT MAY BE HIGHER AND SOMETIMES IT MAY BE LOWER. SOMETIMES, INTENTIONALLY A LESSER VALUE M AY BE SHOWN IN THE SALE DEED. EVEN IF IT IS ASSUMED TO BE SO, UNLESS IT IS P ROVED THAT THE AGREEMENT WAS ACTED UPON AND UNLESS THE AMOUNT STATED IN THE AGREEMENT WAS PAID ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 16 FOR THE SALE, THE COURT CANNOT COME TO THE CONCLUSI ON THAT THE PRICE MENTIONED IN THE SALE DEED IS NOT CORRECT. IN THIS CASE THE HONBLE HIGH COURT HAS GONE A STEP AHEAD AND EVEN CONSIDERED THE EXISTENCE OF BOTH THE AGREEMENT TO SELL AND THE SALE DEED AND UPHELD THE VALIDITY AND SANCTITY OF THE REGISTERED SALE DEED. IN THIS REGARD AS HAS BEEN SUBMITTED ABOVE, THE EN TIRE ADDITION IS BASED ON THE PHOTOCOPIES OF PARTNERSHIP AGREEMENT STATED TO HAVE COME INTO THE POSSESSION OF THE DEPARTMENT AS A RESULT OF SEARCH, HOWEVER, IT IS NOT KNOWN FROM WHERE AND IN WHOSE CASE AND FROM WHOSE P OSSESSION, THE SAID DOCUMENTS WERE RECOVERED BY THE DEPARTMENT. THE COP Y OF THE SALE DEED OF THE ORIGINAL TRANSACTION OF PURCHASE OF SUBJECT LAN D BY ASSESSEE COMPANY AFTER MAKING PAYMENT OF AGREED CONSIDERATION OF RS. 45,58,912/- THROUGH PAYEES ACCOUNT CHEQUE/DDS WERE ALSO SUBMITTED BEFO RE LD. AO WHO FAILED TO APPRECIATE THE SAME (APB 35-39). ALL THESE FACTS WHICH WERE BROUGHT TO THE NOTICE OF THE LD. AO VIDE LETTER DATED 24.12.20 13 (APB 33-34). FURTHER AN AFFIDAVIT OF SHRI GULLA RAM, WHO WAS ALLEGED TO BE THE PERSON ACTING ON BEHALF OF THE APPELLATE COMPANY AS DIRECTOR, WAS AL SO FILED WHEREIN SHRI GULLA RAM HAS CATEGORICALLY STATED AND DEPOSED ON O ATH AS UNDER (APB 46): 2. THAT THE CONTENTS OF THE SAJHEDARI IKRAMAMA A S SUPPLIED BY THE INCOME TAX DEPARTMENT TO THE COMPANY IN TERMS OF THE COMPA NYS REQUEST IS A UNILATERAL DOCUMENT WHICH WAS NEVER ACTED UPON AND THE STATED DOCUMENT IS TOTALLY BEING AN UNILATERAL DOCUMENT WHICH IS NEITH ER NOTARIZED NOR IT HAD SIGNATURES OF THE SELLING PARTY AND NO SUCH TRANSAC TION EVER TOOK PLACE IN MY PERSONAL CAPACITY. BESIDES THIS, AN AFFIDAVIT OF SHRI AJAY KUMAR SARA F, ANOTHER DIRECTOR OF ASSESSEE COMPANY WAS ALSO SUBMITTED STATING THAT TH E APPELLANT COMPANY HAS NEVER EXECUTED ANY SUCH AGREEMENT WHICH AFFIDAV IT ALSO REMAINED UNCONTROVERTED. HE FURTHER DEPOSED ON BEHALF OF THE ASSESSEE COMPANY AS UNDER (APB47-48): 4. THAT THE COMPANY HAS NEVER AUTHORIZED ANY PERSO N TO ENTER INTO ANY SUCH SAJHEDARI IKRAMAMA NOR HAS EVER RATIFIED ANY SUCH INDENTURE. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 17 THE LD. AO WHILE MAKING THE ADDITION OF RS. 40,80, 000/- HAS PLACED SOLE AND UNREASONABLY EXCESSIVE RELIANCE ON THAT SO-CALL ED PARTNERSHIP DEED AND BY REFERRING TO IT, HE OBSERVED AS UNDER: (PAGE 2, PARA 3) ..ASSESSEE HAD PURCHASED LAND THROUGH ITS DIRECTO R GULLA RAM AT VILLAGE KALWAD, SANGANER, KHASRA NO. 977/2759 MEASURING 3.7 3 HECTARE. AS PER PARTNERSHIP AGREEMENT IN POSSESSION WITH THE DEPART MENT RS. 51,00,000/- WAS PAID IN CASH TO THE SELLER PART AS ADVANCE FOR PURC HASE OF AFORESAID LAND.... IN THIS REGARD, AT THE OUTSET IT IS SUBMITTED AGAI N THAT, THE SO-CALLED PARTNERSHIP AGREEMENT WHICH IS A SCRAP SET OF PAPER S IS WORTHLESS AND OUGHT NOT TO HAVE BEEN RELIED UPON, BY THE LD. AO I N VIEW OF THE GLARING AND INHERENT SERIOUS DEFECTS WHICH COULD HAVE ESCAP ED NO PRUDENT MANS ATTENTION. FROM A BARE PERUSAL OF THE SO-CALLED PHOTOCOPY PAR TNERSHIP AGREEMENT IT IS ADMITTEDLY AND EVIDENTLY CLEAR THAT IT IS NOTHING B UT A MERE SCRAP PAPER WHICH IS FULL OF ERRORS AND OMISSIONS AND WAS NOT E VEN OBTAINED FROM THE ASSESSEES POSSESSION AND IS COMPLETELY WORTHLESS I N VIEW OF THE SERIOUS DEFECTS AS HAS BEEN POINTED OUT HEREIN BELOW: 1. THE PAPERS RELIED UPON BY LD. AO IS MERELY A PHO TOCOPY, THE ORIGINALS OF WHICH WERE NEVER BROUGHT ON RECORD DESPITE MAKIN G OBJECTIONS ABOUT THE EXISTENCE OF ORIGINAL PAPERS VIDE LETTER DATED 24.12.2013 (APB 33-34), HOWEVER NO EFFORT HAS BEEN MADE BY LD. AO TO BRING ON RECORD THE ORIGINAL OF THE ALLEGED DOCUMENTS. THE H ONBLE SUPREME COURT HAS MOOSA S. MADHA AND AZAM S. MADHA. VS CIT REPORTED IN 89 ITR 65 HAS HELD THAT THE PHOTOSTAT COPIES HAVE VERY LITTLE EV IDENTIARY VALUE. IT IS THUS SUBMITTED THAT PHOTOCOPIES OF DO CUMENTS CANNOT BE SOLELY RELIED UPON TO RECORD A FINDING OF ESCAPEMEN T OF INCOME FOR THE PURPOSES OF SECTION 147 AS WELL AS SECTION 143 OF I NCOME TAX ACT, 1961 WITHOUT BRINGING THE ORIGINALS. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 18 2. THE ALLEGED PAPERS WERE NEVER EXECUTED ON THE BA SIS OF AUTHORIZATION GIVEN BY THE ASSESSEE COMPANY, AS IT HAD NEVER AUTH ORIZED ANY PERSON TO ENTER INTO ANY SORT OF PARTNERSHIP ON BEHALF OF THE COMPANY. THUS, THE COMPANY COULD NOT BE MADE RESPONSIBLE FOR ANY U NAUTHORIZED ACTS AND DEEDS DONE BY ANY PERSON INCLUDING ITS DIRECTOR S, PARTICULARLY WHEN THE ALLEGED DOCUMENT WAS A UNILATERAL DOCUMENT WHIC H WAS NEVER ACTED UPON. 3. THE LD. AO HAS FURTHER FAILED TO BRING ON RECORD THE AGREEMENT DATED 09.05.2005 ALLEGED TO HAVE BEEN EXECUTED BETWEEN TH E SELLERS AND THE APPELLANT COMPANY WHEREIN THE PAYMENT OF ADVANCE OF RS. 51.00 LACS IN CASH WAS MENTIONED. 4. THAT IT HAS NOT BEEN BROUGHT ON RECORD AS TO FRO M WHERE AND WHOSE POSSESSION, THE SO CALLED PHOTOCOPIES OF THE PARTNE RSHIP DEED HAVE BEEN FOUND AND SEIZED. AND WHAT WAS THE ALLEGED REL ATION, IF ANY, BETWEEN ASSESSEE COMPANY AND THE PERSON FROM WHOM T HESE PAPERS WERE ACTUALLY RECOVERED. 5. AS PER THE STAMP DUTY ACT PREVAILING IN THE STAT E OF RAJASTHAN AT THE RELEVANT POINT OF TIME FOR CREATION OF A PARTNERSHI P DEED, NON-JUDICIAL STAMP PAPER WORTH RS. 500/- WAS REQUIRED TO MAKE IT A LEGAL PARTNERSHIP DEED. 6. THE SO-CALLED PARTNERSHIP AGREEMENT IS NOT NOTAR IZED. 7. THE ALLEGED AGREEMENT IS NOT WITNESSED BY TWO IN DEPENDENT WITNESSES AS IS REQUIRED UNDER LAW. 8. THE SO-CALLED AGREEMENT NEITHER BEARS ANY DATE O F ITS COMING INTO FORCE NOR THE DATE WHEN IT WAS ENTERED INTO. 9. THERE IS NO SEAL OF THE ASSESSEE COMPANY ANYWHER E ON THE PAPERS. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 19 ALL THESE GLARING DEFECTS HAVE BEEN COMPLETELY IGN ORED BY THE LD. AO WHO HAS WRONGLY OBSERVED THE FACTS AT PAGE 4 IN LAST PA RA OF THE ASSESSMENT ORDER AS UNDER: ...IN THE PARTNERSHIP AGREEMENT ITSELF, WHICH WAS DULY CERTIFIED BY NOTARY . IT IS STATED THAT SHRI GULLA RAM JAT HAS AGREED TO AN AGR EEMENT ON BEHALF OF THE MANSAROVAR COLONIZER LTD. AS PER COMPANIES LAW, THE DIRECTOR IS AUTHORIZED TO TAKE DECISIONS ON BEHALF OF THE COMPANY... CLEARLY, THE LD. AO HAS MISREPRESENTED THE FACTS AS FROM A BARE PERUSAL OF THE SO-CALLED PARTNERSHIP AGREEMENT, IT CAN BE SEEN THAT IT IS NOT NOTARIZED. FURTHER, THE LD. AO HAS APPLIED HIS OWN PRESENTATIO NS OF LAW WHICH ARE NOT SOUND AND APPARENTLY IS MISINTERPRETATION OF LAW. I N A LIMITED COMPANY LIKE ASSESSEE, NO DECISION CAN BE TAKEN WITHOUT SPECIFIC AUTHORIZATION BY THE COMPANY WHICH IS DONE ONLY THROUGH A RESOLUTION OF THE BOARDS OF DIRECTORS. THERE IS NO PROVISION IN LAW WHICH CAN CONFER ON A DIRECTOR SELF-CREATED POWER TO DO ACTS AND DEEDS ON BEHALF OF THE COMPANY . THEREFORE, THIS OBSERVATION OF THE LD. AO IS ABSOLUTELY WRONG AND I S LIABLE TO BE IGNORED. IN VIEW OF ALL THESE FACTS AND EVIDENCES, IT IS CL EAR THAT THE SO-CALLED PARTNERSHIP AGREEMENT IS NOT A VALID AGREEMENT WHIC H WAS NEVER EXECUTED AND NEVER ACTED UPON AND SUFFERS FROM SEVERE DEFECT S, HAS SPECIFICALLY BEEN DENIED BY THE ABOVEMENTIONED PERSONS FROM ACKNOWLED GING ITS CONTENTS. ONLY AFTER RECEIVING DIRECTIONS FROM THE LD. CIT(A ), THE AO ISSUED SUMMONS TO THE SELLERS AND RECORDED THEIR STATEMENTS ALONG WITH SHRI GULLA RAM, DIRECTOR OF THE ASSESSEE COMPANY, WHEREIN ALL THE T HREE HAVE STATED ON OATH, TO HAVE TRANSACTED ONLY THROUGH BANK, AND THE TOTAL CONSIDERATION TO BE RS. 45,58,912/- AS APPEARING IN THE REGISTERED S ALE DEED [APB PAGE 15- 24]. HOWEVER, STILL THE LD. AO HAS NOT THOUGHT IT P ROPER TO EVER CALL AND EXAMINE SHRI MOHD. SALIM, THE ALLEGED OTHER PARTY T O THE SAID AGREEMENT. THE LD. AO HAS ACTED IN SLIP-SHOD MANNER WITH PREC ONCEIVED MIND OF MAKING ADDITION IN THE HANDS OF THE ASSESSEE COMPAN Y BY GROSSLY IGNORING ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 20 THE AMPLE EVIDENCES AVAILABLE ON RECORD AND ALSO TH E COPIES OF THE REGISTERED SALE DEED WHEREIN THE SELLERS HAVE DULY ADMITTED AND ACCEPTED THE RECEIPT OF TOTAL SALE CONSIDERATION OF RS. 45,5 8,912/- WHICH WAS ALSO AFFIRMED BY THE SUB REGISTRAR IN WHOSE PRESENCE THE Y HAVE ACCEPTED THE RECEIPT OF THE SALE CONSIDERATION. THE LD. CIT(A), WHILE CONFIRMING THE ALLEGED ADDITION HAS SUPPORTED THE OBSERVATION OF T HE LD. AO THAT, IN THE REGISTERED SALE DEED, THE VALUE OF THE SAID LAND FO R STAMP PURPOSES HAS BEEN MENTIONED AT RS.89,82,000/- AND THIS IS CLOSE TO THE FIGURE OF (RS. 51 LACS + 45.59 LACS) ALLEGED TO BE THE ACTUAL SALE CO NSIDERATION. IN THIS REGARD IT IS SUBMITTED THAT, THE ACTUAL SALE CONSIDERATION IS A NEGOTIABLE AMOUNT DERIVED AT, BETWEEN THE TWO PARTIES, BASED ON THE P REVAILING MARKET VALUE OF LAND, NEED AND DEMAND OF BOTH THE PARTIES TO ACT IN RESPECT OF THE ASSET INVOLVED, THUS THE ACTUAL SALE CONSIDERATION CAN BE ACCEPTABLY DIFFERENT FROM THE VALUE DETERMINED BY THE STAMPS AUTHORITY, FOR T HE PURPOSE OF FASTENING THE STAMP DUTY ON THE PROPERTY UNDER TRANSFER. THIS CONTENTION OF THE ASSESSEE GETS SUPPORT FROM THE DECISION OF THE ALLA HABAD HIGH COURT, IN THE CASE OF DINESH KR. MITTAL VS. ITO [193 ITR 770], WH EREIN THE HONBLE HIGH COURT HAS GIVEN THE FINDING THAT, WE ARE OF THE OPINION THAT WE CANNOT RECOGNIZE ANY RULE OF LAW TO THE EFFECT THAT THE VA LUE DETERMINED FOR THE PURPOSE OF STAMP DUTY IS THE ACTUAL CONSIDERATION P ASSING BETWEEN THE PARTIES TO A SALE. THE ACTUAL CONSIDERATION MAY BE MORE OR MAY BE LESS. WHAT IS THE ACTUAL CONSIDERATION THAT PASSED BETWEE N THE PARTIES IS A QUESTION OF FACT TO BE DETERMINED IN EACH CASE, HAV ING REGARD TO THE FACTS AND CIRCUMSTANCES OF THAT CASE. THUS, THE OBSERVATION OF THE LD. AO CANNOT BE SOLELY RELIED UPON, IN ABSENCE OF ANY COR ROBORATIVE MATERIAL ON RECORDS TO SUBSTANTIATE THE ALLEGATION MADE BY THE LD. AO. FURTHER WHILE DEALING WITH THE DEFECTS POINTED OUT BY THE ASSESSEE, THE LD. CIT(A) UPHELD THE ACTION OF THE LD. AO AND HELD THE RE-OPENING VALID BY CONTENDING THAT THE CASE LAWS RELIED UPON BY THE AS SESSEE WERE ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 21 DISTINGUISHABLE ON FACTS, AND THAT, PHOTOCOPIES CAN BE SAID TO CONSTRUE MATERIAL ON WHICH THE AO CAN ACT UPON, DURING AS ASSESSMENT. TO SUPPORT THIS VIEW, THE LD. CIT(A) HAS QUOTED THE DECISION I N THE CASE OF VIKRANT DUTT CHAUDHARY VS. CIT[ ITA NO. 25 OF 2015(0&M) P&H ], ACIT VS. JAY ENGINEERING WORKS [113 ITR 389], SETH GURMUKH SINGH VS. CIT [12 ITR 393]. IT IS PERTINENT TO NOTE THAT ALL THE ABOVE DECISIO NS WERE GIVEN IN THE BACKDROP OF SEC 142 AND 143 OF THE IT ACT, WHEREIN, DURING THE ASSESSMENT PROCEEDINGS, WHETHER THE AO CAN ACT ON WHAT IS TECH NICALLY CALLED EVIDENCE UNDER THE INDIAN EVIDENCE ACT OR CAN HE GO AHEAD ON ANY MATERIAL THAT HAS BEEN GATHERED UPON. IT IS IN THIS CONTEXT SUBMITTED THAT THE ABOVE QUOTED DECISIONS WERE GIVEN, WHEREIN, IT WAS HELD THAT THE AO CAN PROCEED TO MAKE ASSESSMENT ON MATERIAL, WHICH THOUGH DO NOT QUALIFY AS EVIDENCE UNDER THE INDIAN EVIDENCE ACT, BUT CAN BE A STARTING POIN T TO CARRY OUT ANY INVESTIGATION. IN THE CURRENT CASE, THE LD. AO HAS NOT CORROBORATED THE PHOTOCOPIES OF THE AGREEMENT WITH ANY FURTHER MATER IAL/ DOCUMENTS TO SUBSTANTIATE THE ENTRIES RECORDED THEREIN. ANOTHER FACT WHICH IS GROSSLY IGNORED BY THE LD. AO IS THAT IN THE FINANCIAL STAT EMENTS PREPARED FOR THE YEAR UNDER APPEAL, ASSESSEE HAS DECLARED THE TOTAL COST OF LAND I.E. PRICE PAID PLUS REGISTRATION CHARGES TOTALING TO RS. 53,0 2,672/- AS INVENTORY IN THE BALANCE SHEET (APB 57) WHICH FURTHER ESTABLISHED THE CONTENTION OF ASSESSEE COMPANY THAT IT IS THE SOLE AND TRUE OWNER OF THE SAID PROPERTY WITHOUT HAVING ANY JOINT OWNERSHIP WITH ANY PERSON AS HAS BEEN ALLEGED BY LD. AO ON THE BASIS OF SO CALLED PARTNERSHIP AGREEM ENT. LD. AO ALSO HAS NOT DOUBTED THE VALUE OF CLOSING STOCK SO DECLARED BY T HE ASSESSEE. IT IS ALSO A MATTER OF FACT THAT THE ASSESSEE COMP ANY IS INCORPORATED ONLY ON 10.03.2005 AND IT IS THE FIRST YEAR OF ITS OPERATIO NS WHERE EXCEPTING THE PURCHASES OF THE LAND, UNDER REFERENCE, NO COMMERCI AL ACTIVITY HAS BEEN CARRIED OUT AND WITHOUT BEING ANY COMMERCIAL ACTIVI TY FOR A COMPANY HAVING ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 22 SEPARATE LEGAL ENTITY, IT IS NOT POSSIBLE TO HAVE A NY MONEY FOR MAKING ANY SUCH INVESTMENTS. IT IS THE SETTLED LAW THAT NO ADD ITION COULD MADE FOR UNEXPLAINED INVESTMENT IN THE FIRST YEAR OF THE BUS INESS FOR WHICH RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: HONBLE RAJASTHAN HIGH COURT IN THE CASE OF PEEYUSH CONSTRUCTIONS (SUPRA) WHILE DISMISSING THE APPEAL OF THE DEPARTMENT HELD THAT, WHEN THE MATERIAL RELIED UPON WAS NOT FOUND FROM THE POSSESSION OF TH E ASSESSEE AND NO FURTHER INCRIMINATING DOCUMENT WAS FOUND, NO ADDITI ON CAN BE MADE SOLELY BASED ON SUCH DOCUMENT PHOTOCOPY OF WHICH IS FOUND FROM THE POSSESSION OF THIRD PARTY. RELIANCE IS ALSO PLACED ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. R.Y. DURLABHJI REPORTED IN 211-ITR-178WHEREIN AT PAGE 189, THE HONBLE COURT HAS OBSERVED AS UNDER: IN DHEKESWARI COTTON MILLS LTD. V. CIT (1954) 26 IT R 775 (SC), OMAR SALAY MOHAMED SAIT V. CIT (1959) 37 ITR 151 (SC) AND LALC HAND BHAGAT AMBICA RAM V. CIT (1959) 37 ITR 288 (SC), IT HAS CLEARLY BEEN HELD BY THE APEX COURT THAT THERE MUST BE SOMETHING MORE THAN MERE SUSPICION IN SUPPORT OF AN ASSESSMENT AND MERE SUSPICION CANNOT TAKE THE PLACE OF PROOF FOR THE PURPOSE OF PASSING AN ORDER OF ASSESSMENT. IN THE CIRCUMSTANCES, IT IS HUMBLY PRAYED THAT THE ADDITIONS MADE, MAY KINDLY BE DIRECTED TO BE DELETED. 7. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDER OF THE LD. CIT(A). SHE ALSO SUBMITTED THAT THE PROVISIONS OF SE CTION 142 AND 143 OF THE ACT EMPOWERED THE ASSESSING OFFICER TO CONSIDER THE RELEVANT MATERIAL, WHICH HAS GATHERED DURING THE ASSESSMENT PROCEEDINGS TO MAKE THE ADDITION. THEREFORE, EVEN THE PHOTOSTAT COPIES RECEI VED FROM THE ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 23 INVESTIGATION WING IS SUFFICIENT AND ADEQUATE MATER IAL TO SUSTAIN THE ADDITION. 8. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. I HAV E ALSO GONE THROUGH THE VARIOUS SUBMISSIONS MADE AND ALSO THE STATEMENT S RECORDED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDINGS . THE ADDITION IS BASICALLY BASED ON THE SAJHEDARI IKRAMAMA (PARTNERSHIP AGREEMENT). FROM THE RECORD, I FIND THAT THIS DOCUMENT IS NOT D ATED, IT ONLY MENTIONS THE MONTH AND YEAR I.E. MAY, 2005. IT IS PHOTO STA TE COPY AND NO ORIGINAL DOCUMENT FOUND OR SEIZED. THIS PAPER IS NEITHER REGI STERED NOR EVEN NOTARIZED. THE PAPER WAS ALSO NOT EXECUTED ON PROPER VALUE OF STAMP PAPER. FURTHER, THERE IS NO EVIDENCE FOUND AND COLL ECTED BY THE AUTHORITIES BELOW WITH REGARD TO IKRARNAMA DATED 09/05/2005, WHICH FINDS MENTIONED IN THIS SAJHEDARI IKRAMAMA FOR WHICH PAYMENT OF RS. 51.00 LACS CLAIMED TO HAVE BEEN MADE. IT IS ALSO IMPORTANT TO NOTE THA T THE REGISTERED DEED IN RESPECT OF LAND, WHICH FOUND MENTIONED IN THIS AGREE MENT, HAS BEEN ENTERED INTO ON 10 TH OCTOBER, 2005 WHERE SHRI RAJESH & MANNU GOYAL, BOTH SONS OF SHRI MUNNALAL GOYAL ARE SELLERS AND TH E ASSESSEE IS THE PURCHASER. THIS REGISTERED DOCUMENT DOES NOT FIND T HE NAME OF THE PERSON WITH WHOM THE SUCH IKRARNAMA ENTERED INTO. THE REGIST ERED DEED DATED 10 TH OCTOBER, 2005 DOES NOT SUPPORT THE CONTENT OF THIS SAJHEDARI IKRAMAMA. FURTHER THE EXISTENCE OF AGREEMENT DATE D 09/5/2005 IS ALSO ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 24 NOT ESTABLISHED. NO EVIDENCE IN THIS REGARD WAS AVAI LABLE WITH REVENUE AUTHORITIES. THUS THE BASIS OF ADDITION ITSELF IS N OT PROVED. AS PER THIS IKRARNAMA, THE ASSESSEE HAS ENTERED INTO THE AGREEM ENT WITH MOHD. SALIM, S/O- HAZI NOOR MOHD. AND HE WAS A PARTNER OF 20% IN PURCHASE OF LAND BUT HIS NAME DOES FIND FOUND PLACE IN SALE DEE D. HAD THERE BEEN GENUINE AND EFFECTIVE AGREEMENT OR PARTNERSHIP FOR PURCHASE OF THE LAND THEN THE SALE DEED MUST HAVE ALSO CONTAINED THE NAM E OF MR. MOHD. SALIM, S/O- HAZI NOOR MOHD. THE STATEMENT AS WELL AS AFFIDAV IT OF DIRECTOR OF THE ASSESSEE COMPANY ALSO DO NOT SUPPORT THE CONTENTS O F THIS PAPER. THUS, IT IS CLEARLY ESTABLISHED THAT ALTHOUGH THE AGREEMENT WAS SIGNED BY THE DIRECTOR OF THE COMPANY BUT IT WAS NOT ACTED UPON. TH E SELLER SHRI RAJESH GOYAL AND MANNU GOYAL BOTH SONS OF SHRI MUNNA LAL G OYAL HAVE ALSO DENIED WITH REGARD TO THE RECEIPTS OF ANY CASH WITH R EGARD TO SALE OF THE LAND. THE RELEVANT PORTION OF THEIR STATEMENT IS REP RODUCED AS UNDER:- IZ'U 2 ESA VKIDKS FNUKAD 10 VDVWCJ 2005 DKS VKI O J H EUUQ XKS;Y DK JH XQYYKJKE TKV DS LKFK XZKE DYOKM+K IVOKJ DYOKM +K GYDK DYOKM+K R LKAXKUSJ ESA DQY 15 CH?KK VOFU 3.72 O 3.73 GSDVS;J HKWFE DH FODZ; DK FODZ; I= FN[KK JGK GSA D `I;K CRK,A VKIUS BL HKWFE DH FCDZH GSRQ FDRUK HKQXRKU IZ KIR FD;K FDL RJG IZKIR FY;K O DC IZKIR FY;K] LI'V DJSA ? MRJ 2 TH GK ;G FODZ; I= ESJS O ESJS HKKBZ EUUQ XKS ;Y DS }KJK JH XQYYKJKE TKKV DS LKFK 10 VDVWCJ 2005 DK FULIKFNR GQ VK FKK RFKK BLDS CSPKU LOLFK 45]58]912 DK HKQXRKU EQ>S O E SJS HKKBZ EUUQ XKS;Y DKS PSD }KJK IZKIR GQVK FKKA ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 25 MRJ 2 BL JK'KH ESA LS 22]79]456@& :I, EQ>S O BRUK G H JK'KH 22]79]456@& ESJS HKKRK JH EUUQ XKS;Y DKS PSD }KJK I ZKIR GQBZ FTLDK MYYS[K FODZ; I= ESA FD;K X;K GSA BLDS VFRFJDR DKSBZ VU; JK'KH FDLH DH :I;S ESA GES IZKIR UGH GQBZA MDR LC JK'KH EQ>S EKG TQYKBZ 2005 ESA RFKK ESJS HKKBZ JH EUUQ XK ;SY DKS HKH EKG TQU 2005 ESA IZKIR GQBZA IZ'U 3 D`I;K CRK,A FD VKIUS MDR HKWFE DS CSPKU DH J K'KH TQYKBZ ESA IZKIR DJ YH RFKK BLDK FCDZ; I= VDVWCJ ESA FULIKFNR GQVK] BLDK DKJ.K LI'V DJS RFKK LKFK GKS ;G DH LI'V DJS FD D;K VKIUS TQYKBZ ESA IZKIR JK'KH DH ,OT ESA JH XQYYKJKE TKV DKS DKSBZ JLHN OXSJG ;K AGREEMENT FD;K FKK ? MRJ 3 MDR JK'KH TQYKBZ EKG ESA IZKIR DJ YH XBZ DH R FKK FODZ; I= VDVWCJ ESA FULIKFNR GKSUS DK DKJ.K ML LE> ML ODR ES A JFTLVH IJ LJDKJ JD FKHA JD GVRS GH GEUS JFTLVH DJK Y FKHA PWWAFD XQYYKJKE TKV LS GEKJS IQJKUS IKFJOKF JD LECU/K OS BLFY, DKSBZ JLHN O AGREEMENT UGH FD;K X;K RFKK MDR JK'KH GES PSD }KJK IZKIR GQBZ FKH VR% BLDH DKSBZ VKO';DRK UGH LE>H XBZA SIMILARLY, STATEMENT OF OTHER SELLER SHRI MANNU GOY AL WAS ALSO RECORDED. THE RELEVANT PORTION OF THE STATEMENT IS REPRODUCED HEREUNDER: IZ'U 2 ESA VKIDKS FNUKAD 10 VDVWCJ 2005 DKS VKI O V KIDS HKKBZ JH JKTS'K XKS;Y DK JH XQYYKJKE TKV DS LKFK XZKE DYOKU IVOKJ DYOKM+K GYDK DYOKM+ RG LKAXKUSJ DQY YXEX 15+ CH?KK VOFU 3.71 O 3.73 S GSDVS;J HKWFE DK FODZ; I= FN[KK JGK GWA D`I;K CRK,A VKIUS BL HKWFE DS FODZ; DH ,OT ESA FDRUH JK'K H IZKIR DH MLDK HKQXRKU FDL :I ESA O DC DC FY;K ? MRJ 2 TH GKWA] ;G FODZ; I= ESJS O ESJS HKKBZ JH JKT S'K XKS;Y DS }KJK JH XQYYKJKE TKV DS LKFK 10 VDVWCJ 2005 DKS FULIKFNR GQVK FKK RFKK BL HKWFE DS CSPKU LOLFK 45]58]912 DH JK'KH VFKKZR ISRKYHL YK[K VBKOU GTKJ UKS LKS CKJG :I, EQ>S O ESJ S HKKBZ JKTS'K XKS;Y DKS PSD }KJK IZKIR GQ, FKSA ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 26 MRJ 2 BL JKF'K ESA LS 22]79]456@& :I, YK[K MU;KLH G TKJ PKJ LKS NIIU :I, EQ>S BRUH JKF'K 22]79]456 CKBZL YK[K MU;KL H] PKJ LKS NIIU :I, ESJS HKKBZ JKTS'K XKS;Y DKS PSD }KJK E KG TQYKBZ 2005 ESA IZKIR GW, BLDS VFRFJDR DKSBZ HKH JK'KH EQ> S O ESJS HKKBZ JH JKTS'K XKS;Y DKS FDLH HKH LE; DS IZKIR UGHA GQBZ A IZ'U 3 D`I;K CRK,A FD VKIUS MDR HKWFE CSPKU JKF'K T QYKBZ 2005 ESA IZKIR DJ YH RFKK BLDK FODZ; I= 10 VDVWCJ 2005 ESA FULIKFNR DJUK BLDK DKJ.K LI'V DJS RFKK LKFK GH ;G H KH CRK; FD MDR JKF'K TKS JH EKG TQYKBZ 2005 ESA VKIUS VKIDS HKKRK JH JKTS'K XKS;Y US JH XQYYKJKE LS IZKIR DH BL DH ,D= ESA VKIUS DKSBZ JLHN NH FKH DKSBZ AGREEMENT FD;K FKKA D`I;K CRK, A ? MRJ 3 GEUS MDR JK'KH DK HKQXRKU TQYKBZ 2005 ESSA I ZKIR DJ FY;K YSFDU FODZ; I= 10 VDVWCJ 2005 DS FULIKFNR DJOKUS DK DKJ.K ML LE; BL HKWFE IJ SEZ {KS= ESA FTLESA ;G HKWFE FLFKJRK DH JFTLVH IJ JKSD YXH GQBZ FKHA JFTLVH IJ JKSD GV RS GH GEUS FODZ; I= FULIKFNR DJ FY;KA PWWAFD XQYYKJKE TKV LS GEKJS FIRKTH DS LE; GH LS GEKJS IKFJOKFJD LECU/K OS BLFY, DKSBZ JLHN UGHA NH RFKK UGHA BL JK'KH DH IZKFIR DK DKSBZ AGREEMENT FD;KA MRJ 3 LKFK GH PWWAFD MDR JK'KH GES PSD }KJK IZKIR G QBZ FKH VR% BLDH ,OT ESA DKSBZ JLHN NS ;K AGREEMENT DJUS DS VKO';DRK XBZA THE RELEVANT PORTION OF STATEMENT OF SHRI GULLARAM J AT, DIRECTOR OF THE COMPANY IS ALSO REPRODUCED HEREUNDER: IZ'U%-2 ESAA VKIDKS EBZ 2005 DK LK>SNKJH BDJKJUKEK FN[KK JGK GWWAA D`I;K CRK,A FD BLDS FY, X, GLRK{KJ VKIDS GS O VKI BL CKJS ESA DQN VKSJ HKH DGUK PKGRS GS ? MRJ 2 BL LK>SNKJH BDJKJUKEK IJ GLRK{KJ EJSA GS RF KK EQ>S DEIUH ESA TEHU [KJHNUS DS FY, BDJKJUKEK DH VKO';DRK FKH BLFY , ESAUS JH EKSGEEN LYHE LS ;G BDJKJUKEK FD;K FDURQ BL ES 10]20]000@& :I, UGH FN,A ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 27 IZ'U% 3 VKIDKS ESA EBZ 2005 DK LK>SNKJH BDJKJUKEK F N, JGK GWWA BLLS VKIUS NKS CKJ FNUKAD 9-5-2005 GQ, BDJKJUKEK DK FTDZ FD;K GSA BLDS CKJS ESA VKIDK D;K DGUK GS RFKK ;G RF; LGH GS RKS 9-5-2005 DK BDJKJUKEK IZLRQR DJS ? MRJ ESUS 9-5-2005 DKS DKSBZ BDJKJUKEK UGHA FD;KA B LDK MYYS[K FLQZ EKSGEEN LYHE LS ISLS YSUS DS FY, FD;K FKK OKLR O ESA ,SLK DKSBZ AGREEMENT GQVK GH UGHA FKK RFKK UK GH MLUS DKSBZ PAYMENT FD;KA IZ'U%4 D`I;K CRK,A FD VKIUS JH JKTS'K O EUUQ XKS;Y LS TEHU [KJHNUS CKOR DKSBZ BDJKJUKEK FD;K GQVK GS D;K ? MRJ 4 TH UGHA ESUS JKTS'K U EUUQ XKS;Y LS TEHU [KJH NUS GSRQ DKSBZ BDJKJUKEK UGHA FD;K DSOY 10-10-2005 DKS LH/KS GH JF TLVH DJOKBZA IZ'U 5 D`I;K CRK,A FD VKIUS TEHU [KJHN GSRQ HKQXRKU TQYKBZ 2005 9- 7-2-2005 LS 20-7-2005 LS DJ FN;K RFKK JFTLVH 10 V DVWCJ 2005 DKS DJOKBZAA BLDK DKJ.K LI'V DJS RFKK HKQXRKU DH JLHNS ;K DKSBZ BDJKJUKEK ;FN GKS RKS IZLRQR DJS ? MRJ 5 PWWAFD HKWFE SEZ ESA GKSUS DS DKJ.K BL LE; TEHUKSA DH JFTLVH IJ JKSD YXH GQBZ FKHA MRJ 5 BLFY, JFTLVH VDVWCJ ESA JKSD GVUS CKN DJOKBZ XBZA BL HKQXRKU DH DKSBZ JLHSN GEUS IZKIR UGHA DH O DKSBZ B DJKJUKEK HKH UGH FD;K FKKA IZ'U 6 D`I;K FCUK BDJKJUKES O JFTLVH RFKK JLHN FY, FCUK HKQXRKU DJUS DK DKJ.K LI'V DJS ? MRJ 6 PWWFD GEUS LKJK HKQXRKU PSD@MKQ~V FD;K GS RF KK TEHU DS FODZSRK JH JKTS'K O EUUQ XKS;Y GEKJS IQJKUS IFJFPR F DKSBZ JLHN UGH YH XBZ U GH DKSBZ BDJKJUKEK FD;K X;K RFKK JFTLVH ML LE; CU/K NH BLDS CKN ESA [KQYUS IJ DJOK YH XBZA IZ'U 7 VKIDK FODZSRK JH JKTS'K XKS;Y O JH EUUQ XKS; Y LS D;K RELATION GS ? ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 28 MRJ 7 GEKJS BULS IKFJOKFJD LECU/K GSA YSFDU DKSBZ F J'RSNKJH UGH GSA BUDS FIRKTH LKAXKUSJ IAPK;R LFEFR ESA BDO JGS GS MUDH OTG LS GEKJS IQJKUS IFJFPR GSA IZ'U 8 D`I;K VKI JH JKTS'K O EUUQ XK;SY DS IFJOKJ D S CKJS ESA TKUDKJH FNFT, ? MRJ 8 JH JKTS'K O EUUQ XKS;Y DS FIRKTH DK UKE JH EQ UUK YKY XKS;Y GS RFKK CKIW UXJ] T;IQJ DS FUOKL DJRS GS BLDS VFRFJDR ESJH DKSBZ TKUDKJH UGHA THEREFORE, AFTER CONSIDERING ALL THE RELEVANT MATERI AL AVAILABLE ON RECORD, THE STATEMENTS RECORDED AND THE AFFIDAVIT OF THE DI RECTOR, IT IS HELD THAT MERELY ON THE BASIS OF A PHOTO COPY OF ANY DOCUMENT AND IN ABSENCE OF ANY SUPPORTING OR CORROBORATIVE DOCUMENTS, WHERE TH E TERMS OF SUCH AGREEMENT WHICH NEVER ACTED UPON, NO ADDITION CAN BE SUSTAINED IN THE HANDS OF THE ASSESSEE. THEREFORE, IN VIEW OF THE ABOV E FACTS AND CIRCUMSTANCES, I DELETE THE ADDITION SUSTAINED BY T HE LD. CIT(A). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 TH AUGUST, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S MANSAROVAR COLONIZERS LTD., JAIPU R. ITA 1032/JP/2016_ M/S MANSAROVAR COLONIZERS LTD. VS ACIT 29 2. IZR;FKHZ @ THE RESPONDENT- THE A.C.I.T., CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1032/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR