Income Tax Officer (Ward) 2(1), Belgaum V. Jayant Narsing Patil, Belgaum

ITA 106/PAN/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72048 (ITAT-PANAJI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIT RAJ SINGH
• Assessee Lawyers: KRISHNA KELKAR
• Keywords: Gift; Competent authority
• Section: 80C; 37(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 106, 107,108,109,110,111 & 112 / PNJ/2013 (ASSESSMENT YEARS-2003-04, 2005-06, 2006-07, 2008-09) THE INCOME TAX OFFICER, VS. WARD NO. 1(1), BELGAUM (APPELLANT) SRI JAYWANT NARSING PATIL LAXMI GALLI, MUTAGA, SAMBRA ROAD, BELGAUM PAN: AGLPP5687K(RESPONDENT) APPELLANT BY : MR. AMRIT RAJ SINGH, DR RESPONDENT BY : MR. KRISHNA KELKAR, AR. DATE OF HEARING : 04/09/2013 DATE OF ORDER : 30/10/2013 O R D E R PER: D.T.GARASIA (JM) ALL THESE APPEALS ARE RELATING TO ONE ASSESSEE MR. JAYWANT NARSING PATIL AS INDIVIDUAL FOR ASSESSMENT YEARS 2005-06, 2006-07, 2008-09, REST OF THE APPEALS ARE FILED BY THE DEPARTMENT RELATES TO THE SAME MR. JAYWANT NARSING PATIL AS AOP FOR ASSESSMENT YEAR 2003-04, 2005-06, 2006-07 AND 2008-09. 2. FOLLOWING COMMON GROUNDS ARE RAISED IN ITA NO.109/PNJ/2013 TO ITA NO. 112/PNJ/2013, WHICH READ AS UNDER. (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ARRIVING AT FINDING THAT EXPENSES REQUIRED TO BE INCURRED FOR RELEASE OF COMPENSATION AT THE EARLIEST, THROUGH MIDDLEMAN ETC WITHOUT EXAMINING THE NATURE OF TRANSACTION WHERE GOVERNMENT OF KARNATAKA AGENCY WAS INVOLVED AND AS SUCH, NO EXPENDITURE IS REQUIRED TO BE INCURRED IN GETTING AMOUNT OF COMPENSATION. 2 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL (II) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN IGNORING THE FACT THAT IN SUCH CASES, EXPENDITURE PROHIBITED BY LAW IS NOT AN ALLOWABLE ALLOWANCE IN VIEW OF EXPLANATION TO SECTION 37(1) OF THE INCOME TAX ACT, 1961. (III) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ESTIMATING THE INCOME IN THE FORM OF COMMISSION IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF EXPENDITURE INCURRED BY HIM ON ACCOUNT OF BHATKANDA FAMILY IN CONNECTION WITH RELEASE OF COMPENSATION AMOUNT. (IV) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ALLOWING EXPENDITURE @ 85% WHICH WAS NEITHER, SUPPORTED BY EVIDENCE NOR REQUIRED TO BE INCURRED FOR GETTING AMOUNT OF COMPENSATION FROM THE GOVERNMENT OF KARNATAKA AGENCY VIZ BELGAUM URBAN DEVELOPMENT AUTHORITY. (V) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT INITIAL BURDEN LIES UPON THE ASSESSEE TO ESTABLISH HIS CLAIM OF INCURRING EXPENDITURE IN CONNECTION WITH COMPENSATION MATTER BEFORE THE BUDA A GOVERNMENT OF KARNATAKA AGENCY BY FURNISHING DOCUMENTARY EVIDENCE. AS SUCH, THE ORDER OF THE CIT(A) IS PERVERSE. (VI) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ARRIVING AT A FINDING THAT MERE PAYMENTS TO ASSESSEE ON THE BASIS OF AGREEMENT AND CREDITS FOUND IN HIS BANK ACCOUNT CANNOT BE CONSIDERED AS GENUINE IN THE HANDS OF THE BHATKANDA FAMILY IGNORING THE DOCUMENTARY EVIDENCE BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE FORM OF COPY OF AGREEMENT AND THE CREDITS FOUND IN THE BANK ACCOUNT OF THE ASSESSEE. (VII) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ARRIVING AT A FINDING THAT THE ASSESSEE IS LIABLE FOR TAXATION ONLY ON ACCOUNT OF CERTAIN COMMISSION IGNORING THE EVIDENCES OF PAYMENTS RECEIVED BY THE ASSESSEE AND AS SUCH, THE ORDER OF THE CIT(A) IS PERVERSE. (VIII) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ARRIVING AT A FINDING THAT THE ASSESSEE IS ENTITLED FOR FURTHER DEDUCTIONS ON ACCOUNT OF COMMISSION PAID TO FOUR OTHER PERSONS IN THE ABSENCE OF DETAILS AND EVIDENCES OF PAYMENTS MADE BY THE ASSESSEE EVEN THROUGH THE ENTIRE PAYMENT TO ASSESSEE WAS CONSIDERED AS NOT GENUINE AND HENCE, THE ORDER OF THE CIT(A) IS PERVERSE. 3. THE SHORT FACTS OF THE CASE ARE AS UNDER: 3.1 A RETURN OF INCOME WAS FILED BY SMT. JYOTIBAI KRISHNA BHATKANDE AND 8 OTHER FAMILY MEMBERS WITH ITO. WARD NO. 1(2), BELGAUM FOR THE ASSESSMENT YEAR 2006-07. IT WAS NOTICED THAT THE ABOVE FAMILY MEMBERS HAD RECEIVED TOTAL COMPENSATION OF RS. 57,40,447/- AND RS. 89,62,722/- BEING INTEREST ON LAND COMPENSATION FOR FINANCE YEAR 2005-06 FROM SPECIAL LAND ACQUISITION OFFICER, BELGAUM, URBAN DEVELOPMENT AUTHORITY, BELGAUM FOR ACQUIRING THEIR LANDS AT HINDALGA, VILLAGE, BELGAUM. THE TOTAL AMOUNT RECEIVED BY THE ENTIRE FAMILY FOR F-Y. 2005-06 WORKS OUT TO RS.1,47,03,169/-. 3 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL IN THE RETURN OF INCOME FILED BY THE ABOVE FAMILY MEMBERS FOR ASSESSMENT YEAR 2006- 07, THEY HAD CLAIMED 60% OF THE ABOVE AMOUNT I.E., RS. 88,21,901/- AS DEDUCTION FROM BOTH COMPENSATION AND INTEREST. THE ABOVE FAMILY MEMBERS HAD ALSO FILED A COPY OF AGREEMENT ENTERED BY 17 FAMILY MEMBERS OF BHATKANDE FAMILY WITH THE ASSESSEE SHRI. JAYAWANT N. PATIL, ON 09.07.2003 IN WHICH IT IS CLEARLY MENTIONED THAT THE BHATKANDE FAMILY WILL PAY THE 60% OF BOTH COMPENSATION AND INTEREST RECEIVED TO THE ASSESSEE SHRI JAYAWANT N. PATIL FOR SERVICES RENDERED BY HIM AND EFFORTS TAKEN BY HIM FOR GETTING THE COMPENSATION AMOUNT. AS PER COPY OF NAVAHIND CO-OPERATIVE SOCIETY LTD. YELLUR, ACCOUNT NO. 31 STANDING IN THE NAME OF SMT. GANGUBAI BHATKANDE AND SMT. INDUBAI BHATKANDE WHEREIN THE COMPENSATION AMOUNT RECEIVED BY ENTIRE FAMILY WAS CREDITED, AND AMOUNT HAVE BEEN TRANSFERRED TO THE S.B. BANK ACCOUNT NO. 832 OF THE ASSESSEE SHRI. JAYAWANT N. PATIL. THE TOTAL AMOUNT PAID TO SHRI JAYWANT PATIL, AS PER NAVAHIND CO-OPERATIVE CREDIT SOCIETY IS RS. 48,82,900/- ON 20.08.2005 AND 18,75,214/- IS PAID ON 23.09.2005, THUS, THE TOTAL AMOUNT PAID IS OF RS.67,58,114/-. THE AMOUNT PAID BY BHATKANDE FAMILY MEMBERS PARTAKES THE CHARACTER OF REVENUE RECEIPT IN THE HANDS OF SHRI JAYWANT PATIL, AS HE HAS RECEIVED THE ABOVE AMOUNT FOR RENDERING CERTAIN SERVICES TO THE BHATKANDE FAMILY. IT IS ALSO STATED THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07, THOUGH HE HAS RECEIVED THE AMOUNT OF RS.88,21,901/-, HENCE A NOTICE UNDER SECTION 148 WAS ISSUED. IN RESPONSE TO THE NOTICE, AUTHORISED REPRESENTATIVE ATTENDED THE HEARING AND STATED THAT HE HAS FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 DECLARING THE TOTAL INCOME OF RS.2,17,240/-. THE ASSESSEE HAS FILED A STATEMENT IN THIS OFFICE AND STATED THAT ASSESSEE AND FOUR OTHER PERSONS HAD RECEIVED TOTAL AMOUNT OF RS. 1,19,41,725/- FROM BHATKANDE FAMILY ON RESPECTIVE DATES. DATED AMOUNT 11.01.2003 RS. 7,21,016/ - 09.03.2005 RS. 16,18,648/ - 20.08.2005 RS. 48,82,900/ - 23.09.2005 RS.18,75,214/ - 17.04.2007 RS. 10,00,000/ - 25.08.2007 RS. 18,43,947/ - TOTAL: RS. 1,19,41,725/- 4 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL THE FOUR OTHER PERSONS HAVE DECLARED THEIR INCOME DETAILS AS UNDER. SL. NO. NAME OF THE ASSESSEE. ASSESSMENT, YEAR INCOME DECLARED ASSESSMENT YEAR INCOME DECLARED. 1. JAYAWANT N. PATIL 2005 - 06 80,900/ - 2006 - 07 2,17,240/ - 2. HANAMANT B. PATIL 2005 - 06 80,900/ - 2006 - 07 2,17,240/ - 3. OMANA K. CHOUGULE 2005 - 06 80,900/ - 2006 - 07 2,17,240/ - 4. SHAMLAL L. DHANWAR 2005 - 06 80,900/ - 2006 - 07 2,17,240/ - 5. ANANT M. BALEKUNDRI 2005 - 06 80,900/ - 2006 - 07 2,17,240/ - SUBSEQUENTLY, THE ASSESSEE JAYWANT NARSING PATIL ALONG WITH OTHER PERSONS HAVE FILED THE AFFIDAVIT AND STATED THAT THEY COULD NOT GET MORE THAN 20% OUT OF THE COMPENSATION AMOUNT OF RS. 1,19,41,725/- WHICH WORKS OUT TO RS. 23,88,345/-. THE FIVE PERSONS HAVE DIVIDED THIS AMOUNT WHICH COMES TO RS.4,77,669/- EACH PERSON AND REQUESTED TO FINALIZE THE ASSESSMENT. THE ASSESSING OFFICER HAS VERIFIED THE BANK ACCOUNT, BANK STATEMENT OF NAVHIND CO-OPERATIVE SOCIETY FROM WHERE MR. JAYAWANT NARSING PATIL, THE ASSESSEE HAS RECEIVED OF RS. 88,21,901/- AND THERE IS NO MENTION ABOUT ABOVE FOUR PERSONS IN THE AGREEMENT BETWEEN BHANTKANDE FAMILY AND SRI JAYAWANT N. PATIL. THE QUESTION OF MAKING THE AFFIDAVIT AND DIVIDING THE COMPENSATION AMOUNT DOES NOT ARISE. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THEREFORE, HE HAS SOUGHT THE DIRECTION FROM ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-1, BELGAUM AND ADDITIONAL COMMISSIONER OF INCOME TAX DIRECTED THE ASSESSING OFFICER WHICH READ AS UNDER: 7.1. THE A.O. HAS REPORTED THAT THE ASSESSEE HAS FILED A STATEMENT BEFORE HIM ON 26.11.2009 MADE BETWEEN THE ASSESSEE AND OTHER FOUR PERSONS (STATEMENT IS SIGNED BY THE ASSESEE AND ONE SHRI. O.K.CHOUGULE) STATING THAT THE TOTAL AMOUNT RECEIVIED BY THEM FROM BHATKANDE FAMILY IS RS. 1,19,41,7257- FOR GETTING WORK DONE FROM SPECIAL LAND ACQUISITION OFFICER, BELGAUM, URBAN DEVELOPMENT AUTHORITY, BELGAUM. IN THIS CONNENCTION, THE A.O. OBSERVED THAT THE ASSESSEE SHRI. JAYWANT N. PATIL IS TRYING TO SHARE THE AMOUNT OFRS. 1,19,41,725/- RECEIVED FROM BHATKANDE FAMILY BETWEEN OTHER FOUR PERSON VIS., 1) SHRI. SHAMLAL L. DHARWAR, 2) SHRI.HANAMANT B. PATIL, 3) SHRI.ANANT M. BALEKUNDRI AND 4) SHRI.OMANAKALLAPPACHOUGULE,STATING THAT, THESE PERSONS HAVE HELPED HIM AND THEY HAVE MADE THEIR EFFORTS FOR GETTING ABOVE WORK DONE. THIS CLAIM OF THE ASSESSEE WAS SUPPORTED BY AN AFFIDAVIT AND ALSO THE RETURNS OF INCOME FILED BY HIM AND OTHER FOUR PERSONS FOR THE A-YS. 2005-06 AND 2006-07. IN THE AFFIDAVIT FILED ON 07.12.2009 IT IS STATED BY THEM THAT THEY COULD NOT GET MORE THAN 20% OUT OF THE COMPENSATION AMOUNT OF RS. 1,19,41,725/-, WHICH WORKS OUT TO RS. 23,88,345/-. THE INTENTION OF THE ABOVE FIVE PERSONS IS THAT THEY ARE PLANNING TO DIVIDE THIS 20% AMOUNT OF RS. 23,88,3457- AMONGST JIVE PERSONS [RS. 4,77,669/0 EACH PERSON/ AND REQUESTED THE DEPARTMENT TO FINALIZE THE ENTIRE MATTER. 5 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL 7.2. FURTHER, AS PER THE ORDER SHEET NOTING OF THE ITO. W-L(2), BELGAUM AND THE AGREEMENT BETWEEN BHATKANDE FAMILY AND SHRI. JAYWANT N. PATIL, THERE IS NO MENTIONED ABOUT THESE FOUR PERSONS. ON GOING THROUGH THE INFORMATION AVAILABLE ON RECORDS IT IS CLEAR THAT THE MAIN ASSESSEE SHRI. JAYWANT N. PATIL AND THE AUTHORIZED REPRESENTATIVE ARE TRYING TO MISGUIDE THE DEPARTMENT BY FILING AN AFFIDAVIT. IN VIEW OF THE ABOVE FACTS AND THE INFORMATION AVAILABLE ON RECORDS AND IN ABSENCE OF SATISFACTORY AND CONVINCING EXPLANATION IN RESPECT OF 80% DEDUCTION OF EXPENSES CLAIMED BY THE ASSESSEE ON THE AMOUNT OFRS. 1,19,41,725/-, THE A.O. HAS PROPOSED TO ADD THE ENTIRE AMOUNT OFRS. 67,58,114/-PLUS RS.20,63,787/-PAID IN CASH TO SHRI. JAYWANT N. PATIL IN HIS CASE ONLY FOR THE A-Y. 2006-07 BY REJECTING AFFIDAVIT FILED ON 07.12.2009. 7.3. IN THE COURSE OF PROCEEDINGS BEFORE ME, THE ASSESSEE AND HIS AR HAS REITERATED THE SAME EXPLANATION AS WAS SUBMITTED BEFORE THE A.O. WHEN IT WAS PROPOSED AS TO WHY THE ENTIRE AMOUNT OFRS. 1,19,41,725/- SHOULD NOT BE TAXED IN THE HANDS OF SHRI. JAYWANT N. PATIL, IN THE ABSENCE OF ANY CONVINCING REPLY OR EVIDENCE TO SHOW THE INVOLVEMENT OF THE OTHER FOUR PERSONS, IT IS STATED THAT FILING OR RETURN OF INCOME AND EXECUTION OF AN AFFIDAVIT FILED, IS SUFFICIENT TO SHOW THAT THE ABOVE INCOME IS EARNED BY ALL THE FIVE PERSONS AND NOT SHRI. JAYWANT N. PATIL ALONE. THIS EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED, SINCE AS PER THE AGREEMENT BETWEEN BHATKANDE FAMILY AND SHRI. JAYWANT N. PATIL, THE ENTIRE AMOUNT IS RECEIVED BY SHRI. JAYWANT N. PATIL, HENCE THE SAME IS REQUIRED TO BE TAXED IN HIS HANDS ONLY. THERE IS NO MENTION ABOUT THE OTHER FOUR PERSONS IN THE ABOVE AGREEMENT. JUST TO REDUCE THE TAX LIABILITY, SHRI. JAYWANT N. PATIL HAS CONVENIENTLY INTRODUCED THE OTHER FOUR PERSONS AND CLAIMING THAT HE HAS SHARED THE INCOME DERIVED BY HIM EQUALLY IN THE HANDS OF FIVE PERSONS, WHICH IS AFTER THOUGHT. HENCE,E IN MY OPINION, THE A.O. HAS RIGHTLY RESORTED TO BRING TO TAX THE ENTIRE RECEIPT OF RS. 1,19,41,7257- IN THE HANDS OF SHRI. JAYWANT N. PATIL. I, THEREFORE, DIRECT THE A.O. TO BRING TO TAX THE ENTIRE AMOUNT OFRS. 1,19,41,7257- IN THE HANDS OF SHRI. JAYWANT N. PATIL. AS MENTIONED IN THE AFFIDAVIT, THE RECEIPTS ARE ON DIFFERENT DATES. HENCE, THE A.O. IS DIRECTED TO VERIFY THE DATE OF RECEIPT OF AMOUNTS BY THE ASSESSES AND CONSIDER THE SAME FOR THE RELEVANT PREVIOUS YEAR AND ACCORDINGLY BRING TO TAX THE SAME IN THE RELEVANT ASSESSMENT YEARS. 8. ALLOWANCE OFASSESSEE'S CLAIM OF 80% OF DEDUCTION AS EXPANSIONS: 8.1. IN THE RETURNS OF INCOME FILED FOR A-Y. 2005-06 AND 2006-07, THE ASSESSEE HAS CLAIMED AROUND 80% OF EXPENDITURE AND OUT-RIGHTLY DECLARED ONLY 20% OUT OF THE AMOUNT OF COMPENSATION RECEIVED BY HIM. IN THIS CONNECTION, IN THE AFFIDAVIT FILED, IT IS STATED THAT AFTER TAKING INTO CONSIDERATION THE EXPENDITURE MADE BY THEM AND THE WORK DONE AS SUBMITTED IN THE AFFIDAVIT, THEIR MERGING OF INCOME IS NOT MORE THAN 20% OUT OF THE AMOUNT OF COMPENSATION AWARDED AND FURTHER STATED THAT THEY ARE WILLING AND READY TO PAY THE INCOME TAX ON 20% OUT OF THE AMOUNT AWARDED TOWARDS THE LAND COMPENSATION. IT IS ALSO STATED THAT, AT THIS STAGE IT IS MOST DIFFICULT FOR THEM TO PRODUCE THE DOCUMENTARY EVIDENCES TOWARDS THE PAYMENTS MADE TO THE CONCERNED OFFICIALS AND THE LOAN AMOUNT TAKEN FROM THE FINANCIAL INSTITUTIONS AND THE PUBLIC AT LARGE. IT IS ALSO AFFIRMED THAT THEY HAVE NOT KEPT ANY RECORDS IN THIS REGARD FOR AND SO ALSO, TOWARDS THE WORK DONE AND WITH REGARD TO THE DAY TO DAY ACTIVITIES. 6 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL 8.2. IN THIS REGARD, IN ABSENCE OF SATISFACTORY AND CONVINCING EXPLANATION IN RESPECT OF 80% DEDUCTION OR EXPENSES CLAIMED BY THE ASSESSEE ON THE AMOUNT OFRS. 1,19,41,725/-, THE A.O HAS PROPOSED TO DISALLOW THE ENTIRE EXPENSES CLAIMED. BEFORE ME, THE ASSESSEE HAS EXPLAINED THE VARIOUS LEGAL EXPENSES INVOLVED IN THE WHOLE AFFAIRS AND EXPRESSED DIFFICULTY IN PRODUCING THE DOCUMENTARY EVIDENCE TOWARDS THE PAYMENTS MADE AS HE DID NOT MAINTAIN SUCH DETAILS DUE TO IGNORANCE OF INCOME-TAX PROCEEDINGS. HE CLAIMED THAT IN NO TYPE OF BUSINESS ENTIRE RECEIPTS WILL BECOME HIS INCOME WITHOUT INCURRING EXPENDITURE. JUST BECAUSE HE IS READILY NOT ABLE TO PROVIDE FOOLPROOF EVIDENCE FOR EXPENSES WHICH ARE ACTUALLY INCURRED, DISALLOWANCE SHOULD NOT BE MADE. IN VIEW OF THIS, HE REQUESTED FOR ALLOWING 80% OF DEDUCTION OUT OF AMOUNT RECEIVED. HE FURTHER STATED THAT, HIS ASSETS ARE ONLY IN THE FORM OF IMMOVABLE ASSETS, WHICH HAVE BEEN DULY REFLECTED IN THE STATEMENT OF AFFAIRS FILED ALONG WITH THE RETURNS OF INCOME AND IF SUCH HUGE INCOME WAS EARNED BY HIM, IT WILL BE REFLECTED IN SOME FORM OF ASSET, WHICH IS NOT THE CASE HERE. AFTER CAREFULLY CONSIDERING THE FACTS OF THE CASE AND ABOVE ARGUMENTS, I AM OF THE CONSIDERED OPINION THAT 25% OF EXPENDITURE IS REASONABLE FOR ALLOWING DEDUCTION FROM THE TOTAL RECEIPTS OF THE ASSESSEE. HENCE, I DIRECT THE A.O. TO ALLOW 25% OF EXPENDITURE ON THE TOTAL RECEIPTS OF THE ASSESSES AND CONSIDERED ACCORDINGLY BRING TO TAX THE BALANCE AS INCOME OF THE ASSESSEE. AFTER GETTING THE ABOVE DIRECTIONS, THE ASSESSING OFFICER HAS ASSESSED THE TOTAL INCOME IN THE HANDS OF ASSESSEE AT RS. 67,58,114/- FOR ASSESSMENT YEAR 2006-07 AND FOR ASSESSMENT YEAR 2005-06, HE HAS ASSESSED THE TOTAL INCOME OF RS. 16,18,648/- AND IN ASSESSMENT YEAR 2008-09, HE HAS ASSESSED INCOME AT RS. 28,43,947/- IN THESE THREE ASSESSMENT YEAR IN THE HAND OF SRI JAYWANT NARSING PATIL (INDIVIDUAL) AND 25% OF THE TOTAL INCOME WAS ALLOWING AS DEDUCTION AS EXPENDITURE THEREON AS PER THE DIRECTION OF ADDITIONAL COMMISSIONER OF INCOME TAX. THE ASSESSING OFFICER HAS ALSO ASSESSED INCOME FOR ASSESSMENT YEAR 2003-04, 2005-06, 2006-07 AND 2008-09 AS SRI JAYWANT NARSING PATIL AND OTHERS AOP AS UNDER: TOTAL INCOME FROM PROPERTY DEALING AS DISCUSSED IN PARA NO. 9 ABOVE. ................RS. 67,58,114 LESS: 25% OF EXPENDITURE ALLOWED AS PER DIRECTIONS UNDER SECTION. 144A. RS. 16,89,528 RS. 50,68,586 LESS: DEDUCTION U/S. 80C. RS. 28,470 TAXABLE INCOME..................RS. 50,40,116 ROUNDED OFF U/S 288 A......RS. 50,40,120 TAX THEREON,......................RS. 14,62,036 ADD: S.C., .......................RS. 1,46.,203 RS. 16,08,239 ADD: CESS RS. 32,165 RS. 16,40,404 ADD: INTEREST U/S. 234-A..RS. 4,59,313 INTEREST U/S. 234-B.RS. 7,38,182 TOTAL PAYABLE ...................RS. 28,37,899 7 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL 3.2. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DELETED THE AMOUNT BY OBSERVING THAT ONE THIRD OF TOTAL AMOUNT OF RS.1,19,41,752/- WILL BE ASSESSED IN THE HANDS OF ASSESSEE FOR THREE ASSESSMENT YEARS 2005-06, 2006-07 AND 2008-09 AND DIRECTED TO ALLOW 80C BY OBSERVING AS UNDER:- THEREFORE, HAVING REGARD, TO THE FOREGOING DISCUSSED AND MORE PARTICULARLY TO THE FACT THAT SUBSTANTIAL SERVICES OF MULTIFARIOUS, MULTIFACETED AND MULTITUDINOUS NATURE INCLUDING SUCCESSFUL HANDING OF PROTRACTED LITIGATION RENDERED OVER A VERY LONG PERIOD OF TIME BY THE APPELLANT, THAT THE APPELLANT DID NOT HAVE ANY LEGAL RIGHTS IN THE PROPERTY IN QUESTION, THAT THE APPELLANT HAD TO INCUR EXPENSES ON BEHALF OF THE BHATKHANDE FAMILY IN CONNECTION WITH THE TRANSFER OF ASSETS BELONGING TO THEM, THAT THE APPELLANT WAS MERELY AN AGENT OR POWER OF ATTORNEY HOLDER AUTHORIZED TO PERFORM VARIED FUNCTIONS, THAT THE APPELLANT HAS NOT EVER REPORTED ANY INCOME IN HIS I.T. RETURNS IN HIS LIFE OTHER THAN THAT EARNED FROM DEALINGS WITH THE BHATKANDE FAMILY AND THAT THE A.O. HAS NOT BEEN ABLE TO CITE ANY COMPARABLE CASE SO AS TO JUSTIFY ESTIMATION OF NET PROFIT OF 75% ON SHARE OF MONEY TRANSFERRED TO THE APPELLANT WHICH WORKS OUT BE 45% OF THE GROSS RECEIPTS OF THE COMPENSATION RECEIVED BY THE BHATKANDE FAMILY, I HOLD THAT 20% OF THE TOTAL COMPENSATION AMOUNT RECEIVED BY BHAKHANDE FAMILY FROM BUDA WHICH WORKS OUT TO BE ONE-THIRD OR 33.33% OF THE MONEY TO THE APPELLANT TO BE HIS NET COMMISSION WHICH SHOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE A.O. IS DIRECTED TO TAX 20% OF THE GROSS COMPENSATION AMOUNT WHICH WORKS OUT TO BE ONE-THIRD OR 33.33% OF THE MONEY TRANSFERRED TO THE APPELLANT BY THE BHATKHANDE FAMILY IN THE HANDS OF THE APPELLANT ONLY. ONE THIRD OF RS. 1,19,41,725/- WORKS OUT TO BE RS. 39,80,575/-. THE RECEIPTS BY THE APPELLANT DURING THE PERIOD RELEVANT TO THE A.Y. 2006-07 AS MENTIONED IN THE ASSESSMENT ORDER BY THE A.O ARE RS. 67,58,114/- AND ONE THIRD OF IT WOULD BE RS. 22,52,705/- WHICH WOULD BE THE TAXABLE INCOME OF THE APPELLANT FOR A.Y. 2006-07 BEFORE ALLOWING DEDUCTION OF PAYMENTS MADE TO FOUR PERSONS AS DISCUSSED IN PARA 8.4 &PARA 8.3.4 ABOVE AND ALSO DEDUCTION UNDER SECTION 80C. 4. LEARNED DR SUBMITTED THAT AS PER THE RECORD AND THE DOCUMENTARY EVIDENCE SUBMITTED BY THE ASSESSEE(WHICH IS ON PAGE NO. 1 OF THE PAPER BOOK)AND FROM PAGE NO.1 TO 7(WHICH IS THE AGREEMENT BETWEEN SMT. JYOTIBAI KRISHNA BHATKANDE AND FOURTEEN MEMBERS) WHICH IS MENTIONED IN THE AGREEMENT WITH OTHER PARTIES AND ASSESSEE JAYWANT NARSING PATIL AND AS PER THIS AGREEMENT IT IS STATED THAT BHAKANDE FAMILY WERE THE OWNER OF R.S. NOS. 160/1A, 160/2 AND 161/1A SITUATED AT HINDALAGA VILLAGE TALUKA BELGAUM AND THEIR LANDS WERE INVOLVED IN LITIGATION UNDER URBAN CEILING ACT IN COURT MATTER, UNDER U.L.C NO. 1292+ 1293. FOR THE LITIGATION WORK, THE POWER OF ATTORNEY WAS ASSIGNED TO THE ASSESSEE AND AS PER THE AGREEMENT ASSESSEE IS TO CONDUCT THE SUIT LITIGATION IN CIVIL COURT AND HIGH COURT AND ENHANCE THE COMPENSATION AMOUNT AND ASSESSEE HAS TO INCUR ALL THESE EXPENDITURE ON BEHALF OF THE BHATKANDE FAMILY IN FAVOUR 8 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL OF SRI JAYWANT NARSING PATIL, THAT IS ASSESSEE. IT WAS ALSO AGREED BETWEEN ASSESSEE BHATKANDE FAMILY THAT 60% OF THE COMPENSATION WILL GO TO THE ASSESSEE, 40% OF THE AMOUNT WILL GO TO BHATKANDE FAMILY. SO AS PER THIS AGREEMENT THE LITIGATION BETWEEN THE LAND ACQUISITION OFFICER BETWEEN GOVERNMENT AND THE BHATKANDE FAMILY WAS HAD FINALISED AND BHATKANDE FAMILY HAS RECEIVED THE TOTAL COMPENSATION. THE COMPENSATION IS RS . 57,40,447/- AND RS. 89,62,722/-THAT WORKS OUT TO RS.1,47,03,169/- . OUT OF IT 60% I.E., RS.1,19,41,725/- COME INTO THE SHARE OF MR. JAYWANT N. PATIL. THE DOCUMENTARY EVIDENCE I.E., BANKS STATEMENT OF NAVHIND CO-OPERATIVE SOCIETY FROM WHERE THIS AMOUNT WAS TRANSFERRED WHERE THIS AMOUNT HAS BEEN GIVEN TO MR. JAYWANT N. PATIL. THE AMOUNT ON VARIOUS DATES COMES TO RS. 1,19,41,725/-. THE ADDITIONAL COMMISSIONER HAS BOUND TO THE FACTS OF THE CASE AND HE HAS VERIFIED THE AGREEMENT EXCLUDED BETWEEN BHATKANDE FAMILY AND JAYWANT N. PATIL AND FROM THIS AGREEMENT THE ASSESSING OFFICER WAS OF A VIEW THAT MR. JAYWANT N. PATIL HAS RECEIVED RS.7,21,016 ON 11.1.2003,AND ON 9.3.2005, HE HAS RECEIVED RS. 16,18,648/- AND ON VARIOUS DATES, HE HAS RECEIVED THIS AMOUNT, THEREFORE, THIS AMOUNT IS TAXABLE IN HIS HANDS THEREFORE ASSESSING OFFICER HAS ASSESSED THE INCOME IN THE HANDS OF THE ASSESSEE IN ASSESSMENT YEAR 2005-06, 2006-07 AND 2008-09. THE ASSESSEE HAS FILED ONE AFFIDAVIT BEFORE ASSESSING OFFICER AND HE HAS TAKEN THE CONTENTION BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT RECEIVE THE FULL CONSIDERATION BUT THE TOTAL AMOUNT WAS DIVIDED AMONG THE ASSESSEE AND FOUR OTHER PERSON. THE TOTAL AMOUNT WAS DIVIDED BETWEEN FIVE PERSON AND 20% OF THE AMOUNT I.E RS.23,88,345/- HAD COME IN THE SHARE OF EACH ASSESSEE AND THEY HAVE FILED THEIR RETURN OF INCOME AND THEY HAVE SHOWN INCOME IN THEIR HANDS. THE ASSESSEE HAS ALSO CLAIMED 80% OF DEDUCTION AS EXPENSES AND AS PER HIM THE REMAINING AMOUNT IS TAXABLE IN RESPECT TO HIM. 4.1 LEARNED DR SUBMITTED THAT THIS ARRANGEMENT WAS MADE BY JAYWANT NARSING. PATIL, ASSESSEE AND FOUR OTHER PERSONS BUT THE ASSESSEE COULD NOT BRING ANY EVIDENCE TO SHOW THAT THE FOUR PERSONS HAD ALSO WORKED FOR GETTING THIS COMPENSATION. THEREFORE, THE ASSESSEE HAS WILFULLY EVADED THE TAX. THE CIT(A) HAS RELIED UPON THE AFFIDAVIT WHICH WAS SUBSEQUENTLY FILED BEFORE THE ASSESSING OFFICER STATING THAT THE COMPENSATION RECEIVED BY THE ASSESSEE WAS DIVIDED BETWEEN FOUR PERSONS AND IT HAD GONE TO THE SHARE 9 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL OF FIVE PERSONS INCLUDING ASSESSEE WHICH IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. MOREOVER, AS PER LAW THE COMPENSATION HAS TO BE AWARDED TO THE OWNER OF THE LAND THOUGH THE AGREEMENT BETWEEN ASSESSEE AND BHAKANDE FAMILY MAY NOT BE VALID IN THE EYES OF LAW BUT THERE IS ARRANGEMENT FOR THE LITIGATION. THEREFORE, WHATEVER IT MAY BE, BUT IT HAS BEEN SETTLED BETWEEN THE PARTIES BY AN AGREEMENT. THEREFORE, THIS AGREEMENT IS BINDING BETWEEN ASSESSEE AND BHAKANDE FAMILY AND NOT FOUR PERSONS AS STATED BY THE ASSESSEE. THE FOUR PERSONS MIGHT HAVE FILED THEIR RETURN OF INCOME BUT IT DOES NOT TAKE AWAY THE RIGHT TO ASSESS THE INCOME IN RIGHT PERSON, THEREFORE, DEPARTMENT APPEAL MAY BE ALLOWED. 5. LEARNED AR HAS ARGUED AS WELL AS FILED THE WRITTEN SUBMISSION BEFORE US WHICH READ AS UNDER:- THE RESPONDENT FILED HIS RETURN OF INCOME FOR A.Y.2005-06 AND A.Y.2006-07 ON 08.05.2007 WITH THE ASSESSING OFFICER (PG 94-97 OF PAPER BOOK) DISCLOSING THEREIN INCOME FROM PROPERTY DEALINGS. THESE RETURNS WERE FILED PRIOR TO THE RE-OPENING OF ASSESSMENTS. THE FACTS OF THE RETURN OF INCOME ARE BRIEFLY STATED BELOW: THE LANDS BELONGING TO ONE MR.BHATKANDE FAMILY NAMELY, SMTJYOTIBAI KRISHNA BHATKANDE AND 8 OTHERS WERE ACQUIRED BY BELGAUM URBAN DEVELOPMENT AUTHORITY (BUDA). THEY WERE PAID COMPENSATION IN RESPECT OF THIS ACQUISITION. BHATKANDE FAMILY FILED THEIR ORIGINAL RETURNS (COPY FOR A.Y.2005-06 FILED ON 31/03/2006 AT WARD 1(2) AVAILABLE AND PRODUCED AT SI.NO. 115 OF THE PAPER BOOK IN RESPECT OF SHRIMALLAPPAMAHDEVBHATKANDE) IN THIS RETURN, SHRIBHATKANDE HAD DISCLOSED THE CAPITAL GAIN AND INTEREST ARISING OUT OF THE ACQUISITION AS INCOME (WITHOUT HAIMINGJANY P VPO N IFTNR). THERPAFTER.IT IS EVIDENT THAT BHATKANDE FAMILY REVISED THEIR RETURN OF INCOME CLAIMING DEDUCTION IN RESPECT OF EXPENSES INCURRED. BHATKANDE FAMILY HAD AVAILED SERVICES OF SHRIJAYWANTPATIL IN GETTING THIS COMPENSATION AMOUNT. IT WAS DECIDED BETWEEN BHATKANDE FAMILY AND JAYWANTPATIL THAT 60% OF THE AMOUNT OF SAID COMPENSATION SHALL BE PAID FOR EXPENDITURE AND COST OF FIGHT AND LITIGATION. THERE WAS AN UNREGISTERED AGREEMENT ENTERED INTO BETWEEN BHATKANDE FAMILY AND JAYAWANTPATIL FOR THIS PURPOSE.(PGS 1-6 OF PAPER BOOK; KINDLY REFER PARA 4 AT PG 6 OF THE PAPER BOOK NARRATING 50% TOWARDS EXPENDITURE AND COST OF FIGHT AND LITIGATION) THE RESPONDENT HAD FILED HIS RETURN OF INCOME VOLUNTARILY BEFORE THE ISSUE OF ANY NOTICE DISCLOSING THEREIN THE COMMISSION WHICH HE HAD RECEIVED OUT OF THE SAID TRANSACTION WITH BHATKANDEFAMILY. THE RETURN OF INCOME AND COMPUTATION IS FOUND AT PG 94-97. WHILE GOING THROUGH THE RECORD OF BHATKANDE FAMILY, THE ASSESSING OFFICER RE-OPENED THE CASE U/S 147 IN THE HANDS OF JAYWANTPATIL. HE SOUGHT THE DIRECTION U/S 144A FROM THE LD. ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE L,BELGAUM, WHO BY HIS ORDER DATED 23/12/2009 DIRECTED THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENTS DIRECTING TO GRANT 25% OF THE TOTAL 10 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL RECEIPTS AS EXPENDITURE IN THE HANDS OF JAYAWANTPATIL. THE ASSESSMENTS WERE FRAMED ACCORDINGLY IN THE HANDS OF JAYWANTPATIL (COPY OF DIRECTIONS PLACED AT PG 68). SHRIJAYWANTPATIL HAD AVAILED THE SERVICES OF 4 OTHER PERSONS NAMELY, SHRIHANMANTPATIL, SHRIOMANNACHOUGULE, SHRISHYAMLALDHANWAR AND SHRIANANTBALEKUNDRI IN RESPECT OF THE COMPENSATION MATTER OF SHRIBHATKANDE FAMILY. THESE PEOPLE ALSO HAD FILED THEIR RESPECTIVE RETURNS OF INCOME ON 09/05/2007 WITH THE SAME ASSESSING OFFICER WHO ASSESSED THE CASES OF JAYWANTPATIL (THE RELEVANT COPIES PLACED AT PG 98-113). THIS ACT OF THESE 4 MEMBERS ALSO WAS PRIOR TO ISSUE OF 148 NOTICES TO JAYWANTPATIL. THE LD. ASSESSING OFFICER COMPLETED THE ASSESSMENTS OF RETURN OF INCOME FILED BY THESE 4 MEMBERS AND WHILE FRAMING THE ASSESSMENT RESORTED TO THE DIRECTION ISSUED U/S 144A IN JAYWANTPATIL'SCASE. THESE ASSESSMENTS WERE ALSO SUBJECT MATTER OF APPEALS AND THE CIT (APPEALS) PASSED THE ORDERS IN THESE CASES FOR ALL YEARS HOLDING THE INCOME COMPUTED BY HIM AS THE INCOME OF THE RESPECTIVE MEMBER FROM COMMISSION PERTAINING TO CASES OF JAYWANTPATIL AND BHATKANDE FAMILY. (REVELANT ORDER PLACED AT PG 78-93 OF THE PAPER BOOK.) THE DEPARTMENT HAS ACCEPTED THESE ORDERS AND HAS NOT FILED ANY APPEAL IN THESE CASES. FROM THE ABOVE THE FOLLOWING FACTS EMERGE: 1. THE LD. CIT (APPEALS) HAS CLEARLY DISCUSSED AND BIFURCATED THE AMOUNT OF 60% RECEIPTS BY JAYWANTPATIL BETWEEN THE COMMISSION AND EXPENDITURE. 2. THE INCOME ASSESSED BY THE DEPARTMENT IN THE HANDS OF 4 MEMBERS I.E. SHRIHANMANTPATIL, SHRIOMANNACHOUGULE, SHRISHYAMLALDHANWAR AND SHRIANANTBALEKUNDRI AS COMPUTED BY CIT (APPEALS) IS FINAL AND CANNOT BE TAXED IN THE HANDS OF JAYWANTPATIL. 3. THE EXPENDITURE INCURRED IN GETTING COMPENSATION (WHEN CANNOT BE PROVED) SHOULD BE DISALLOWED AS EXPENDITURE IN CONNECTION WITH TRANSFER IN THE HANDS OF BHATKANDE FAMILY. 4. THE SAME INCOME IS ASSESSED BY THE ASSESSING OFFICER AS INCOME OF JAYWANTPATIL AND OTHERS AOP SUOMOTO. (DISREGARDING THE DIRECTIONS U/S 144A.) THE CIT (APPEALS) HAS STRUCK DOWN THESE ASSESSMENTS IN THE HANDS OF AOP. 5. JAYWANTPATIL AND OTHERS HAD FILED THE RETURNS MUCH BEFORE THE ASSESSING OFFICER RE-OPEND THE ASSESSMENT OR MUCH BEFORE HE SOUGHT THE DIRECTIONS U/S 144A. HENCE IT CANNOT BE SAID THAT IT WAS AN AFTERTHOUGHT EXERCISE. 6. SHRIJAYWANTPATIL HAD SUBMITTED BEFORE THE CIT (APPEALS) THAT THE REASONABLENESS OF COMMISSION IN SUCH CASES NEEDS TO BE DETERMINED AND IF AT ALL SOMETHING IS PAID OVER AND ABOVE THE REASONABLENESS, IT WOULD AMOUNT TO GIFT. THE LD. CIT (APPEALS) HAD SOUGHT A REMAND REPORT FROM THE ASSESSING OFFICER WITH REGARD TO THIS REASONABLENESS OF COMMISSION AND HAD SOUGHT THE REPORT OF ASSESSING OFFICER WITH ANY COMPARABLE CASES. THE LD. ASSESSING OFFICER FAILED TO ADDUCE ANY EVIDENCE IN THIS REGARD. 7. THE AGREEMENT REFERRED TO BETWEEN BHATKANDE FAMILY AND JAYWANTPATIL WAS AN UNREGISTERED DOCUMENT AND IN NO CASE BHATKANDE FAMILY COULD TRANSFER THE PROPERTY RIGHTS IN FAVOUR OF MR.JAYWANTPATIL. 8. THE ACTION OF BHATKANDE FAMILY IS ALSO IMPORTANT. THEY FILED THEIR RETURNS WITHOUT CLAIMING ANY EXPENDITURE AND REVISED THE SAME SUBSEQUENTLY. BHATKANDE FAMILY WAS ISSUED CERTIFICATE OF TAX 11 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL DEDUCTION AT SOURCE WHICH ALSO PROVED THAT THE SAID INCOME OF COMPENSATION AND INTEREST BELONGED TO BHATKANDE FAMILY AND COULD NOT BE SHARED. 9. THE SAME FACTS AND ISSUES RELATE AND APPEAR IN RESPECT OF ASSESSMENT YEARS 2005-06, 2006-07 AND 2008-09 AS AND WHEN THE AMOUNTS OF COMPENSATION WERE PAID OUT. 10. THE RESPONDENT RELIES ON IMPORTANT FINDING RECORDED AT PARA 8.5 AT PG 26 OF THE ORDER OF THE LD. CIT (APPEALS) WHICH IS REPRODUCED BELOW: '8.5 THEREFORE, HAVING REGARD TO THE FOREGOING DISCUSSION AND MORE PARTICULARLY TO THE FACT THAT SUBSTANTIAL SERVICES OF MULTIFARIOUS, MULTIFACETED AND MULTITUDINOUS NATURE INCLUDING SUCCESSFUL HANDING OF PROTRACTED LITIGATION RENDERED OVER A VERY LONG PERIOD OF TIME BY THE//APPELLANT, THAT THE APPELLANT DID NOT HAVE ANY LEGAL RIGHTS IN THE PROPERTY IN QUESTION, THAT THE APPELLANT HAD TO INCUR EXPENSES ON BEHALF OF THE BHATKANDE IN CONNECTION WITH THE TRANSFER OFASSETS BELONGING TO THEM, THAT THE APPELLANT WAS MERELY AN AGENT OR POWER OF ATTORNEY HOLDER AUTHORIZED TO PERFORM VARIED FUNCTIONS, THAT THE APPELLANT HAS NOT EVER REPORTED ANY INCOME IN HIS I. T. RETURNS IN HIS LIFE OTHER THAN THAT EARNED FROM DEALINGS WITH THE BHATKANDE FAMILY ANDTHAT THE A.O. HAS NOT BEEN ABLE TO CITE ANY COMPARABLE CASE SO AS TO JUSTIFY ESTIMATION OF NETPROFIT OF 75% ON SHARE OF MONEY TRANSFERRED TO THE APPELLANT WHICH WORKS OUT BE 45% OF THE GROSS RECEIPTS OF THE COMPENSATION RECEIVED BY THE BHATKANDE FAMILY , I HOLD THAT 20% OF THETOTAL COMPENSATION AMOUNT RECEIVED BY BHATKANDE FROM BUDA WHICH WORKS OUT TO BE ONE-THIRDOR 33.33% OF THE MONEY TRANSFERRED TO THE APPELLANT TO BE HIS NET COMMISSION WHICH SHOULD MEET THE ENDS OF JUSTICE.' 11. BASED ON THE ABOVE SUBMISSION, THE RESPONDENT PRAYS THAT THE DEPARTMENTAL APPEALS BE DISMISSED IN THE INTEREST ON JUSTICE AND EQUITY. 6. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS OF THE CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE FOLLOWING FACTS ARE NOT IN DISPUTE - 6.1 THAT THE LAND BELONGS TO ONE BHATKANDE FAMILY NAMELY SMT. JYOTIBAI KRISHNA BHATKANDE AND ORS. WHICH WAS ACQUIRED BY BELGAUM URBAN DEVELOPMENT AUTHORITY (BUDA). THE COMPENSATION IN RESPECT OF THIS ACQUISITION WAS PAID TO BHATKANDE FAMILY AND BHATKANDE FAMILY HAD DISCLOSED THE CAPITAL GAIN AND INTEREST ARISING OUT OF THE ACQUISITION WITHOUT CLAIMING ANY EXPENDITURE WHICH IS ON SERIAL NO. 115 OF THE PAPER BOOK. THIS IS ALSO ADMITTED FACT THAT BHATKANDE FAMILY AND SRI JAYWANT N. PATIL, THE ASSESSEE, HAD MADE AN AGREEMENT ON 09.07.2003, WHICH IS ON PAGE 1 TO 7 OF THE PAPER BOOK WHEREIN IT IS ADMITTED BY BHATKANDE FAMILY THAT OUT OF TOTAL COMPENSATION, 60% OF THE AMOUNT OF THE COMPENSATION TO BE PAID TO THE ASSESSEE. IT IS ALSO ADMITTED FACT ON 12 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL RECORD THAT MR. JAYWANT N. PATIL AS PER THE AGREEMENT HAS RECEIVED RS. 1,19,41,725/- ON VARIOUS DATES WHICH ARE AS UNDER. DATED AMOUNT 11.01.2003 RS. 7,21,016/- 09.03.2005 RS. 16,18,648/- 20.08.2005 RS. 48,82,900/- 23.09.2005 RS.18,75,214/- 17.04.2007 RS. 10,00,000/- 25.08.2007 RS. 18,43,947/- TOTAL: RS. 1,19,41,725/- NOW AS PER THE ASSESSEE, THIS AMOUNT WHICH WAS RECEIVED BY MR JAYWANT NARSING PATIL WAS RECEIVED BY CHEQUE THROUGH BANKING CHANNEL IN THE NAME OF ASSESSEE ONLY. THE ASSESSEE AND FOUR OTHER PERSONS NAMELY HAD CO-OPERATED TO JAYWANT N. PATIL FOR THIS COMPENSATION, THEREFORE IT WAS DIVIDED AMOUNT FIVE PERSONS AND FIVE PERSONS HAD DECLARED THEIR TOTAL AMOUNT OF RECEIPT IN THEIR HANDS WHICH READ AS UNDER:- SL. NO. NAME OF THE ASSESSEE. ASSESSMENT, YEAR INCOME DECLARED ASSESSMENT YEAR INCOME DECLARED. 1. JAYAWANT N. PATIL 2005-06 80,900/- 2006-07 2,17,240/- 2. HANAMANT B. PATIL 2005-06 80,900/- 2006-07 2,17,240/- 3. OMANA K. CHOUGULE 2005-06 80,900/- 2006-07 2,17,240/- 4. SHAMLAL L. DHANWAR 2005-06 80,900/- 2006-07 2,17,240/- 5. ANANT M. BALEKUNDRI 2005-06 80,900/- 2006-07 2,17,240/- THE ASSESSEE AND FOUR OTHER PERSONS HAVE FILED THE AFFIDAVIT ON 07.12.2009, THAT THEY DID NOT GET MORE THAN 20% OUT OF THE COMPENSATION AMOUNT AS THE COMPENSATION WAS DIVIDED BETWEEN FIVE PERSONS. DURING THE COURSE OF HEARING THE ASSESSEE WAS ASKED TO SUBMIT THE EVIDENCE RELATING TO THE WORK CARRIED OUT BY THE FOUR OTHER PERSONS AND WHAT WORK WAS CARRIED OUT BY THE FOUR PERSONS. THE ASSESSEE DID NOT HAVE ANY EVIDENCE EXCEPT THE AFFIDAVIT FILED SRI JAYWANT N. PATIL AND FOUR OTHER PERSONS. THE ASSESSEE HAS RECEIVED THE COMPENSATION FROM 11.01.2003 TO VARIOUS DATES TILL 25.08.2007. THE LEARNED AR STATED THAT THE ASSESSMENT HAS BEEN FRAMED IN THE HANDS OF FOUR OTHER 13 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL PERSONS AND COPY OF THE ASSESSMENT IS ON PAGE 20 TO 31 IN THE CASE OF ONE ASSESSEE AND ONE OTHER ASSESSEE ON PAGE NO. 30-34, 45-55, 56-57. THE ASSESSMENT HAS BEEN FINALISED IN THE CASE OF JAYWANT N. PATIL, HANMANT B. PATIL, OMAN K. CHOUGULE, SHAMLAL L. DHANWAR, ANANT M. BALEKUNDRI, ON 29.10.2010 UNDER SECTION 144READ WITH SECTION 147 OF THE ACT. SRI JAYWANT N. PATIL, THE ASSESSEE HAS ALSO NOT FILED THE RETURN OF INCOME. THE ASSESSEE HAS FILED FIRST RETURN OF INCOME ON 8 TH MAY, 2007 DECLARING THE INCOME OF RS.80,900/- THOUGH THE ASSESSEE HAS RECEIVED THE COMPENSATION ON VARIOUS DATES. WE FIND THAT JAYWANT N. PATIL HAS RECEIVED THE COMPENSATION ON VARIOUS DATES BUT HE HAS FILED THE RETURN OF INCOME ONLY AFTER ISSUING THE NOTICE UNDER SECTION 147 OF THE I.T ACT. WE FIND THAT THE ASSESSEE AND FOUR OTHER PERSONS HAD RECEIVED THE INCOME BUT RETURN OF INCOME WAS FILED AFTER ISSUING THE NOTICE ONLY. WE HAVE GONE THROUGH THE AFFIDAVIT FILED BY THE FIVE PERSONS INCLUDING ASSESSEE THEREIN THEY HAVE STATED THAT THEY HAVE CARRIED OUT THE WORK JOINTLY BUT WE FIND THAT ASSESSEE HAS RECEIVED PAYMENT FROM 11.1.2003, 9.3.2005, 20.08.2005, 23.9.2005, 17.04.2007 AND 25.08.2007. THE ASSESSEE HAS RECEIVED THIS COMPENSATION AS PER THE AGREEMENT WHICH IS DEPOSITED IN HIS ACCOUNT. BUT AS PER THE RECORD THE ASSESSEE HAS NOT FILED HIS RETURN OF INCOME PRIOR TO 2007 AND ASSESSEE HAS FILED RETURN ONLY AFTER RECEIVING NOTICE U/S 147 OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT ACCEPT ASSESSEE NO OTHER FOUR PERSONS HAVE CARRIED OUT ANY WORK FOR GETTING THE COMPENSATION. THE CIT(A) HAS WRONGLY RELIED UPON THE AFFIDAVIT FILED BY THE ASSESSEE AND FOUR OTHER PERSONS AND SO CALLED ARRANGEMENT CANNOT BE BELIEVED. THEREFORE, WE REVERSE THE FINDING OF THE CIT. 6.2 WE FIND THAT THE AGREEMENT WAS EXECUTED BETWEEN JAYWANT NARSING PATIL AND BHATKANDE FAMILY. IN ITA NO. 109 TO 112/PNJ/2013, ASSESSMENT YEAR 2003-04, 2005- 06, 2006-07 & 2008-09, THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF JAYWANT NARSING PATIL AS AOP. THE ASSESSEE JAYWANT NARSING PATIL HAS TAKEN THE CONTENTION THAT THE INCOME IS DISTRIBUTED AMONG FOUR OTHER PERSONS. FOR THAT, ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE BUT THE CIT(A) HAS RELIED UPON ONE AFFIDAVIT FILED BY ALL THE PARTIES. BUT AS STATED EARLIER, AS THE ONLY EVIDENCE IS THE AFFIDAVIT, THE BURDEN IS UPON JAYWANT NARSING PATIL AND FOUR OTHER PERSONS TO PROVE THAT THEY ALL HAVE CONTRIBUTED TO EARN THE INCOME BUT THEY FAILED TO PRODUCE ANY EVIDENCE. THEREFORE, IN AOP ALL PERSONS HAVE TO PROVE THAT THEY HAVE MADE THEIR EFFORTS FOR GETTING COMPENSATION FROM THE 14 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL GOVERNMENT FOR THE LAND. IT IS THE COMPETENT AUTHORITY WHO ARE AWARDING THE COMPENSATION WHEREIN MANPOWER IS NOT REQUIRED. ONLY ONE HAS TO ENGAGE A LAWYER AND ONE HAS TO GET ALL THE DOCUMENTS OF PREVAILING MARKET RATES OF SURROUNDING LANDS AND THEREFORE ONLY ONE PERSON IS NECESSARY TO COLLECT THE EVIDENCE. ONE MAY TAKE NOTICE THAT BHATKANDE FAMILY WAS HAVING NO RESOURCES TO FIGHT AGAINST ACQUISITION OF THEIR LAND. THEREFORE, ONE FAMILY MAY BE FORCED TO EXECUTE THE CONTRACT AGREEMENT WITH ONE MR. JAYWANT NARSING PATIL. THEREFORE, WHATEVER THE INCOME COMPENSATION HAS BEEN RECEIVED BY BHATKANDE FAMILY, 60% OF THE COMPENSATION WAS HANDED OVER TO ASSESSEE. THEREFORE, ONE CAN UNDERSTAND THE SITUATION AND IF SOMEBODY HAS EXECUTED THE AGREEMENT, THEN, THE INCOME MAY BE TAXED AS PER THE AGREEMENT. WE FIND THAT TO PROVE THE INCOME ONE MAY RELY UPON THE DOCUMENTARY EVIDENCE AND IF THERE IS NO DOCUMENTARY EVIDENCE, THEN THE CIRCUMSTANTIAL EVIDENCE WILL PROVE THAT FOUR OTHER PERSONS HAVE MADE EFFORTS TO GET THE COMPENSATION AMOUNT. J.N. PATIL HAD NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT HE HAS PAID ANY AMOUNT FOR INCURRING ANY EXPENDITURE FOR ENGAGING ANY ADVOCATE AND HE HAS ALSO INCURRED EXPENSES FOR GETTING THE DOCUMENTS AS REQUIRED BY THE COMPETENT AUTHORITY TO GRANT THE COMPENSATION. NO DOCUMENTARY EVIDENCE WAS SUBMITTED, STILL THE DEPARTMENT HAS ACCEPTED THAT 25% OF THE COMMISSION IS INCURRED AS EXPENDITURE AND IT WAS ALLOWED. THEREFORE, IN ABSENCE OF ANY EVIDENCE THAT J.N. PATIL AND FOUR OTHER PERSONS HAD MADE EFFORTS FOR GETTING THE COMPENSATION AMOUNT, THE CIT(A) IS NOT JUSTIFIED IN ALLOCATING THE COMPENSATION AMOUNT TO FOUR OTHER PERSONS. THEREFORE, WE REVERSE THE FINDING OF THE CIT(A) IN ITA NO.106 TO 1012/PNJ/2013, FOR RESPECTIVE ASSESSMENT YEARS. WE HOLD THAT THIS INCOME BELONGS TO MR. J.N. PATIL ONLY AND IT IS NOT THE INCOME OF J.N. PATIL AND AOP. THEREFORE, WE ALLOW THE DEPARTMENTS APPEAL TO THAT EXTENT. 6.3 DURING THE COURSE OF HEARING, LEARNED AR HAS TAKEN THE CONTENTION BEFORE US THAT IN THE CASE OF FOUR OTHER ASSESSEE I.E., HANMANT B. PATIL, OMAN K. CHOUGULE, SHAMLAL L.DHANWARANANT M. BALEKUNDRI WHEREIN THE ASSESSING OFFICER HAS TAXED THE INCOME IN THE HANDS OF ASSESSEE BUT THAT HAS BEEN DELETED BY THE CIT(A) AND DEPARTMENT HAS NOT COME IN APPEAL AGAINST THAT ORDER OF CIT(A). THEREFORE, THE ASSESSMENT IN THE HANDS OF THESE FOUR ASSESSEES BECOMES FINAL. LOOKING TO THIS ABOVE DOCUMENTARY EVIDENCE AS WE 15 ITA 106 TO 112 /PNJ/2013 ITO VS. SRI JAYWANT N. PATIL HAVE ALREADY HELD ABOVE THAT THIS INCOME BELONGS TO JAYWANT N. PATIL ONLY AND IT IS TO BE TAXED IN HANDS OF JAYWANT N. PATIL ONLY. THEREFORE, THOUGH THIS ARRANGEMENT IS MADE BETWEEN JAYWANT NARSING PATIL AND FOUR OTHER PERSONS, IT IS NOT TENABLE IN LAW AND IT IS CONTRARY TO THE SPIRIT OF THE LAW. THEREFORE, IT WILL NOT BE HELPFUL TO THE ASSESSEE. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES, WE CONFIRM THE ACTION OF THE AO BY HOLDING THAT ASSESSING OFFICER IS JUSTIFIED IN TAXING THE AMOUNT OF RS. 16,18,648/-IN ASSESSMENT YEAR 2005-06, AND RS. 67,58,114/- IN ASSESSMENT YEAR 2006-07, AND RS.28,43,947/- IN ASSESSMENT YEAR.2008-09 . THE ASSESSING OFFICER HIMSELF HAS ALLOWED 25% OF THE INCOME AS EXPENDITURE IN ALL THE RESPECT TO ASSESSMENT ORDER, THEREFORE, WE CONFIRM THE ACTION OF THE AO. 7. IN THE RESULT, DEPARTMENTS APPEALS ARE ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.2013. SD/- SD/- ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 30.10.2013 P.S.- *PK* COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER SR. PRIVATE SECRETARY, ITAT, PANAJI, GOA