Sh. Mahendra R. Vitkar, Pune V. ITO, Ward 10(2), Pune

ITA 1208/PUN/2010

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9392 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-11-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Question of law; Cost of acquisition; Difference of opinion; Onus to prove; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 234B; 131; 148; 12; 2

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1208/PUN/2010 / ASSESSMENT YEAR : 2006-07 SHRI MAHENDRA R . VITKAR S. NO.16, BELTHIKA NAGAR, THERGAON, CHINCHWAD, PUNE-411 035 PAN : AAJPV4381N. . / APPELLANT V/S INCOME TAX OFFICER, WARD 10(2), PUNE . / RESPONDENT . / ITA NO.1213/PUN/2010 / ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD 9(4), PUNE. . / APPELLANT V/S SHRI MAHENDRA RAJARAM VITKAR S. NO.16, BELTHIKA NAGAR, THERGAON, CHINCHWAD, PUNE-411 035. PAN : AAJPV4381N . / RESPONDENT . / ITA NO.2141/PUN/2013 / ASSESSMENT YEAR : 2006-07 GANPAT MUKUNDRAO MURKUTE SHOP NO.9, SWOJAS COMPLEX, S.NO.148, PARIHAR CHOWK, AUNDH, PUNE 411007. PAN : ABHPM7278E . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE. . / RESPONDENT 2 SHRI S. N. PURANIK, SHRI ATUL DAVE & SRI MAHENDRA R. VITKAR - A.R. FOR ASSESSEE IN ITA NO.1208/PUN/2010. SHRI HARI KRISHAN - A.R. FOR ASSESSEE IN ITA NO.2141/PUN/2013. SHRI ACHAL SHARMA, ADDL. CIT. FOR REVENUE. / ORDER PER ANIL CHATURVEDI, AM : 1. THE APPEAL IN ITA.NO.1208/PUN/2010 FILED BY ASSESSEE AN D THE APPEAL IN ITA NO.1213/PUN/2010 FILED BY REVENUE EMANA TE OUT OF A CONSOLIDATED ORDER OF COMMISSIONER OF INCOME-TA X (A) V, PUNE DT.30.06.2010 FOR A.Y. 2006-07. THE APPEAL IN ITA NO.2141/PUN/2013 FILED BY ASSESSEE EMANATE OUT OF THE OR DER OF COMMISSIONER OF INCOME-TAX (A) II, PUNE DT.03.09.2013 FOR A.Y. FOR A.Y. 2006-07. 2. THOUGH THE PRESENT APPEALS ARE OF TWO DIFFERENT ASSES SEES BUT SINCE THE MAJOR ISSUE INVOLVED IN BOTH THEIR APPEALS A RE INTERCONNECTED (BEING THE TAXABILITY OF GAINS ARISING ON SALE OF LAND IN WHICH OF THE ASSESSEES HANDS) FOR THE SAKE OF CONVEN IENCE, BOTH THE APPEALS ARE DISPOSED OF BY A CONSOLIDATED ORDER. WE H OWEVER PROCEED WITH NARRATING THE FACTS IN THE CASE OF SHRI GANP AT MURKUTE IN ITA NO 2141/PUN/2013. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD IN ITA NO.2141/PUN/2013 ARE AS UNDER :- / DATE OF HEARING : 07.11.2017 / DATE OF PRONOUNCEMENT: 02.02.2018 3 ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM BUSINESS, CAPITAL GAINS, AGRICULTURAL INCOME AND OTHER SOURCE S. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2006-07 DECLARING TOTAL INCOME OF RS.48,80,420/-. NOTICE U/S 148 OF THE ACT DT.30.03.2011 WAS SERVED ON ASSESSEE ON 31.03.2011, CALLING THE ASSESSE E FOR FILING THE RETURN OF INCOME. AO NOTED THAT FURTHER OPPOR TUNITY OF FILING OF RETURN OF INCOME ALONG WITH REASONS FOR RE-OPENING, A NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE SERVED ON AS SESSEE ON 19.10.2011. THEREAFTER, ASSESSMENT WAS FRAMED U/S 143(3) R .W.S. 147 OF THE ACT VIDE ORDER DT.23.12.2011 AND THE TOTAL INC OME WAS DETERMINED AT RS.2,35,54,420/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORD ER DT.03.09.2013 (IN APPEAL NO.PN/CIT(A)-II/ACIT CIR-4/299/2011 - 12) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY T HE ORDER OF LD.CIT(A), ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : THE APPELLANT WOULD LIKE TO OBJECT THE IMPUGNED ORD ER OF THE CIT (APPEALS) ON FOLLOWING GROUNDS OF APPEAL WHICH ARE RAISED WITHOUT PREJUDICE TO EACH OTHER: 1. THE LEARNED CIT (APPEALS), PUNE HAS ERRED IN LAW AN D ON FACTS IN CONFIRMING THE ADDITIONS MADE BY THE AO . 2. THE LEARNED CIT (APPEALS) , PUNE HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ACTION OF THE AO OF TAXING E NTIRE INCOME ON TRANSFER OF LAND IN THE HANDS OF THE APPELLANT WITHOUT APPRECIATING THE FOLLOWING IMPORT ANT FACTS: A. THE APPELLANT HAD SHARE IN THE PROPERTY SOLD AT MAHALUNGE. B. WHILE COMPLETING THE ASSESSMENT OF MR. MAHENDRA VITKAR, THE AO HAS HELD THAT THE PROPERTY IS JOINTLY OWNED BY THE APPELLANT AND MR. MAHENDRA VITKAR. C. ADDITION IS MADE IN THE HANDS OF MR. MAHENDRA VITKAR U/S. 143(3) FOR A. Y. 2006-07, AFTER DEDUCTING THE CAPITAL GAIN DISCLOSED BY THE APPELLANT. D. THE ADDITION TO THE TOTAL INCOME OF THE APPELLANT IS MADE ONLY ON ASSUMPTION AND PRESUMPTION 4 WITHOUT POINTING OUT ANY MATERIAL OR CORROBORATIVE EVIDENCE. 3. THE LEARNED CIT(APPEALS), PUNE HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION BY FORMING AN INCORRECT OPINION ON FOLLOWING FACTS : A. THAT THE APPELLANT WAS ACTING ON BEHALF OF SHRI JAIN AND THE APPELLANT WAS SOLELY RESPONSIBLE FOR ENTIRE TRANSACTION OF LAND AT MAHALUNGE. B. THAT THE APPELLANT HAS ACCEPTED THAT MR.VITKAR WAS NOT DIRECTLY INVOLVED IN THE TRANSACTION. C. THAT THE APPELLANT IS SOLE BENEFICIARY OF THE TRANSACTIONS OF LAND AT MAHALUNGE. 4. THE LEARNED CIT (APPEALS), PUNE HAS ERRED IN LAW A ND ON FACTS IN CONFIRMING THE ACTION OF THE AO OF DISALLOWING THE EXPENDITURE INCURRED TOWARDS DEVELOPMENT OF THE PROPERTY AMOUNTING TO RS. 1954000/- AND COMMISSION OF RS.3000000/- EXCLUSIVELY ON ASSUMPTION, AND PRESUMPTION BASIS BY NOT CONSIDERING THE SUPPORTING BILLS AND VOUCHERS EVIDENCES SUBMITTED DURING THE COURSE OF HEARING AN D WITHOUT ASSIGNING ANY VALID REASON FOR THE SAME. 5. THE LEARNED CIT (APPEALS) , PUNE HAS ERR E D IN C ONFIRMING THE A CTION O F T HE A O IN LEV Y ING INTEREST UNDER SECT I ON 234B AND 2 3 4C W I T HOUT CONSIDERING THE FOLLO W IN G FACTS : A. T HAT I NTEREST WAS LEVIED WITHOUT GIV I NG ANY OPPORTUNIT Y OF HEARING AND WITHOUT PASSING AN Y SPE A KING ORDER AT ALL TO THAT E F FECT A ND THAT THE AO HAD ERRED IN WRONGLY COMPUTING THE SAME BY APPL Y ING E RRONEOUS RATE. B. TH A T THE INTERE S T U/S. 234B AND 234C IS MANDATOR Y I N THE S EN S E TH A T I T CANNOT B E WAI V ED OR REDUCED B Y TH E IT A UTHO R ITIE S . 6. WITHOUT PREJUDICE , TO THE ABOVE GROUNDS NO . 1 TO 4 , THE LEARNED CIT (A) , PUN E HAS ERRED IN NOT APPRECIATING THE FACT THAT IF IT I S HELD THAT THE TRANSACTION WAS AN 'ADVENTURE IN THE NATURE OF TRADE' THEN THE . INCOME FROM THE SAME HAD TO BE ASSESSED IN THE STATUS OF AOP SINCE ALL THE CONDITIONS TO CONSTITUTE TH E AOP ARE BEEN FULFILLED AS LAID DOWN IN T HE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF CIT VS . INDIRA BALKRISHNAN 39 ITR 546 . 7. THE APPELLANT MAY KINDLY BE PERMITTED TO ADD TO OR ALTER ANY OF GROUNDS OF APPEAL , IF DEEMED NECESSARY . 4. SUBSEQUENTLY, ASSESSEE VIDE LETTER DATED 16.2.2017 HAS RAISED MODIFIED ADDITIONAL GROUNDS WHICH READS AS UNDER: 5 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THIS CASE WAS WITHOUT JURISDICTION, AB-INITIO VOID AND ILLEGAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSESSING OFFICER HAD NO FAITHFUL REASONS TO BELIEV E THAT THE INCOME HAD ESCAPED ASSESSMENT IN THIS CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RE-OPENING OF THE ASSESSMENT AND ISSUE OF NOTICE U/ S 148 OF THE INCOME TAX ACT, WAS WITHOUT JURISDICTION AB-INITIO VOID AND ILLEGAL 5. WITH RESPECT TO THE ADMISSION OF ADDITIONAL GROUNDS NOW RAISED BEFORE US, LD AR SUBMITTED THAT THE ADDITIONAL G ROUNDS RAISED ARE PURELY ON QUESTION OF LAW AND NO NEW FACTS AR E REQUIRED TO BE BROUGHT ON RECORD AND THEREFORE, DESERVES TO B E ADMITTED AND FOR WHICH RELIANCE WAS PLACED ON THE DECISION IN THE CASES OF (I) NATIONAL THERMAL POWER CORPORATION V. CIT (229 ITR 383 (SC ), (II) JUTE CORPORATION OF INDIA LTD VS. CIT REPORTED IN 187 IT R 688 (SC) AND AHMEDABAD ELECTRICITY CO., LTD., VS. CIT REPORTED IN 199 ITR 351 (BOM) (FB). 6. ON THE ISSUE OF ADMISSION OF ADDITIONAL GROUNDS RAISED BY THE ASSESSEE, IN VIEW OF THE RATIO LAID DOWN BY THE APEX C OURT IN THE CASE OF NATIONAL THERMAL (SUPRA), WE ADMIT THE ADDITIONAL GROUNDS OF APPEAL FILED BY THE ASSESSEE FOR ADJUDICATION. 7. BEFORE US, LD.A.R. SUBMITTED THAT HE DOES NOT WISH TO P RESS GROUND NO.6 AND THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. GROUND NO.5 IS WITH RESPECT TO THE CHARGING OF INTEREST, W HICH IS CONSEQUENTIAL IN NATURE AND THEREFORE REQUIRES NO SEPAR ATE ADJUDICATION. THE OTHER GROUNDS RAISED BY THE ASSESSEE BEING INTER-CONNECTED ARE CONSIDERED TOGETHER. 6 8. THE REASONS FOR REOPENING THE ASSESSMENT IN THE CASE OF ASSESSEE AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE HAD JOINTLY PURCHASED THE LAND BEARING SURVEY NO.43, HIS SA NO.2/1, AND 2/2 LOCATED AT VILLAGE MAHALUNGE, HAVELI TALUKA, ADMEASURING 2 HECTOR 63 ARE AND 2 HECTOR AND 63 ARE RESPECTIVELY FOR A CONSIDERATION OF RS.1,10,00,000/- EACH WITH SHRI MAHEND RA R VITKAR (M.R. VITKAR). THE ASSESSEE ALONG WITH HIS CO-OWNER COULD NOT HONOUR THE PAYMENTS FOR PURCHASE OF LAND AS PER TH E AGREEMENT AND HENCE, AFTER MAKING PART PAYMENT (WHICH WA S SOLELY CONTRIBUTED BY THE ASSESSEE), THE ASSESSEE HAD TO DIREC TLY SELL THE TWO PIECES OF LAND TO M/S. RIVERVIEW PROPERTIES PVT. LTD., FOR A CONSIDERATION OF RS.4,85,75,000/- IN THE FINANCIAL YEAR RELEVAN T TO A.Y. 2006-07. IT WAS NOTED THAT IN THE RETURN OF INCOME, THE ASSESSEE HAD SHOWN SALE CONSIDERATION OF LAND OF RS.1,42,87,5 00/- AND AFTER CLAIMING DEDUCTION ON ACCOUNT OF COST OF ACQUISITIO N, HE HAD OFFERED NET TAXABLE SHORT TERM CAPITAL GAIN OF RS.48,23, 210/- ONLY. 9. AO HAS NOTED THAT DURING THE ASSESSMENT PROCEEDING S OF SHRI MAHENDRA VITKAR FOR A.Y. 2006-07, SHRI VITKAR WAS ASK ED TO EXPLAIN THE SOURCE FOR INVESTMENT IN THE LAND. IT WAS SU BMITTED BY SHRI VITKAR THAT HE HAD NOT MADE ANY INVESTMENTS IN TH E ABOVE PROPERTIES. IT WAS FURTHER SUBMITTED THAT FOR THE PURPOS E OF SELLING THE TWO PLOTS OF LAND, HE WAS MADE TO SIGN POWER OF ATTO RNEY IN FAVOUR OF SHRI GANPAT MUKUNDRAO MURKUTE. IT WAS FURTHER SUBMITTED BY HIM THAT HE WAS FORCED TO OPEN A BANK ACC OUNT, HIS SIGNATURES WERE OBTAINED ON BLANK CHEQUES AND THE CHEQ UE BOOK WITH HIS SIGNATURES WERE KEPT IN THE CUSTODY OF MR. MURKU TE. IN THE ASSESSMENT PROCEEDINGS OF SHRI MAHENDRA VITKAR, HE THUS DENIED OF MAKING THE INVESTMENT IN THE PROPERTIES. 7 10. IN THE REASONS RECORDED FOR RE-OPENING IN THE CASE OF THE ASSESSEE, IT WAS NOTED BY THE AO THAT SINCE THE ENTIRE INVESTMENT WAS MADE BY THE ASSESSEE, THE ENTIRE AMOUNT OF SALE CON SIDERATION OF RS.4,85,75,000/- RECEIVED ON TRANSFER OF LAND TO M/S. RIVE RVIEW PROPERTIES PVT. LTD., AND THE CONSEQUENT SHORT TERM C APITAL GAINS, SHOULD HAVE BEEN OFFERED BY THE ASSESSEE TO TAX. SINCE IN THE RETURN OF INCOME, THE ASSESSEE HAD SHOWN GROSS SALE CON SIDERATION RECEIVED ONLY TO THE EXTENT OF RS.1,42,87,500/-, AO HAD R EASON TO BELIEVE THAT THERE WAS AN ESCAPEMENT OF INCOME OF RS.3,42,87,500/-. ACCORDINGLY, THE CASE WAS RE-OPENED. 11. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS ON T HE ISSUE OF CAPITAL GAINS, ASSESSEE INTER-ALIA SUBMITTED THAT THE TW O PIECES OF LAND WERE PURCHASED FROM M/S. ABHI AGRO TRUST AND M/S . SANGRAM AGRO TRUST VIDE SEPARATE AGREEMENTS DT.20.05.20 05 FOR RS.1,10,00,000/- EACH AND THE ASSESSEES SHARE WAS HALF IN THE LAND. OUT OF THE SAID CONSIDERATION, ASSESSEE HAD PAID RS.40,00,000/- (RS 20,00,000/- EACH TO M/S. ABHI AGRO TRUST AND M/S. SANGRAM AGRO TRUST) AND HAD INCURRED RS.5,10,290/- TOWARDS HIS SHARE OF REGISTRATION AND STAMP DUTY CHARGE S. IT WAS FURTHER SUBMITTED THAT AFTER THE ACQUISITION OF LAND, ASSESS EE HAD INCURRED RS.19,54,000/- TOWARDS THE DEVELOPMENT OF LAND A ND HAD AGREED TO PAY MR NARESH KAMAT RS 30,00,000/- AS CHARG ES FOR ARRANGING THE ENTIRE PURCHASE DEED. LATER ON, ASSESSEE HAD AGREED TO SELL THESE LANDS TO GURUMUKH SUKHWANI AND GHANSYAM SUKHWANI AND HAD RECEIVED RS 20 LAKH THROUGH CHEQUE AS EARNEST MONEY TOWARDS THE SALE OF PROPOSED LAND. LATER ON SINCE MR. SUKHWANI COULD NOT COMPLETE THE TRANSACTION, THE PRO POSED LAND DEAL WAS CANCELLED. THEREAFTER, ASSESSEE ENTERED INTO 8 AGREEMENT OF SALE WITH M/S.RIVERVIEW PROPERTIES PVT. LTD., FO R SALE OF THESE LANDS FOR A TOTAL CONSIDERATION OF RS.4,85,75,000/-. IT WAS SUBMITTED THAT M/S. RIVERVIEW PROPERTIES PVT. LTD., HAD PA ID RS.1,20,00,000/- TO THE LANDOWNERS (RS 1,00,00,000/- TO AB HI AGRO TRUST/SANGRAM AGRO TRUST) AND RS.20,00,000/- TO GURUMUKH SUKHWANI, INTERVENER. THE ASSESSEE THEREFORE SUBMITTED THAT HE HAS CONSIDERED HIS SHARE OF SALE CONSID ERATION AT RS 2,42,87,500 AND AFTER TAKING INTO CONSIDERATION THE COST S INCURRED, HAD OFFERED TO TAX THE SHORT TERM CAPITAL GAINS OF RS.48,23,210/- EARNED BY HIM. THE SUBMISSION OF THE ASSESS EE WAS NOT FOUND ACCEPTABLE TO THE AO. AO NOTED THAT NO SUPPORTING PROOF WAS FILED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM TO H AVE SPEND RS.19,54,000/- AS DEVELOPMENT EXPENSES NOR WAS TH ERE ANY PROOF OF COMMISSION OF RS.30,00,000/- BEING PAID TO SHRI NARES H KAMAT FOR THE EXECUTION OF SALE DEED. AO ALSO NOTED THA T THE COMMISSION OF RS.30,00,000/- AS SAID TO HAVE BEEN PAID TO NARESH KAMAT, WHICH AMOUNTS TO 6% OF THE TOTAL CONSIDERATION, WAS QUITE UNNATURAL COMPARED TO THE MARKET RATES OF 2 TO 3%. AO FURTHER NOTED THAT DURING THE ASSESSMENT PROCEEDINGS OF SHRI MA HENDRA VITKAR, IT WAS SUBMITTED BY SHRI VITKAR THAT HE HAD NOT MADE ANY INVESTMENTS IN THE PROPERTY, FOR PURCHASE OF PROPERTY A ND THAT HE WAS FORCED TO SIGN ON POWER OF ATTORNEY IN FAVOUR OF ASSE SSEE, HE WAS FORCED TO OPEN A BANK ACCOUNT AND HIS SIGNATURES W ERE OBTAINED ON BLANK CHEQUES, AND THE CHEQUES WERE KEPT W ITH THE ASSESSEE. AO THEREFORE HELD THAT THE ENTIRE CAPITAL GAIN ON SALE OF LAND WAS OF THE ASSESSEE. HE ACCORDINGLY WORKED OUT THE CAPITAL GAIN AFTER CONSIDERING THE SALE CONSIDERATION ON TRANSFER O F LAND OF RS.4,85,75,000/- TO HAVE BEEN RECEIVED BY THE ASSESSEE A ND THUS MADE AN ADDITION OF RS.2,35,54,470/- ON ACCOUNT OF NET SHOR T TERM 9 CAPITAL GAINS. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLD ING AS UNDER : 3.4 THE SUBMISSION MADE BY THE APPELLANT HAS BEEN CONSIDERED AND . MATERIAL ON RECORD PERUSED. THE APPELLANT ALONG WIT H SHRI. MAHENDRA VITKAR JOINTLY PURCHASED AND SOLD THE LAND LOCATED AT S. NO.43 HISSA NO 2/1, 2/2 AT VILLAGE MAHALUNGE . THE ASSESSMENT PROCEEDINGS IN THE CASE OF SHRI VITKAR HAS BEEN COM PLETED WHEREBY THE ADDITION TOWARDS HIS SHARE OF THE SALES CONSIDE RATION COMPUTED AS SHORT TERM CAPITAL GAIN. THE APPELLANT THOUGH HA D JOINTLY PURCHASED THE AFORESAID LAND FROM ABHI AGRO TRUST A ND SANGRAM AGRO TRUST FOR A CONSIDERATION OF RS. 1.10 CRORES EACH VIDE TWO SEPARATE AGREEMENTS DATED 20-05-2005, HOWEVER, OUT OF THE TOTAL PAYMENT DUE OF RS. 2.20 CRORES, THE APPELLANT PAID RS. 20 LACS EACH TO THE TWO TRUST AND NO CONTRIBUTION WAS MADE BY SH RI. VITKAR. SUBSEQUENTLY, THE APPELLANT AGREED TO SELL THE AFOR ESAID LANDS TO GURMUKH SUKHWANI AND GHANSHYAM SUKHWANI AND ALSO RE CEIVED RS. 20 LACS ON 10-06-2005 AS EARNEST MONEY TOWARDS THE PROPOSED SALE. HOWEVER, THE SAID SALE COULD NOT BE COMPLETED AND HENCE WAS CANCELLED. THEREAFTER, THE APPELLANT ENTERED INTO A N AGREEMENT OF SALE WITH M/S. RIVERVIEW PROPERTIES PVT. LTD. VIDE SALE DEED DATED 28-03-2006 FOR A TOTAL CONSIDERATION OF RS.4,85,75, 000/-. THE APPELLANT THUS OFFERED SHARE OF THE SALE CONSIDER ATION OF RS. 2,42,84,500/- FOR THE PURPOSE OF COMPUTING SHORT TE RM CAPITAL GAIN AND AFTER REDUCING THE COST OF ACQUISITION AND IMPR OVEMENT AND DEVELOPMENT COST ALONG WITH THE PAYMENT OF COMMISSI ON COMPUTED THE NET SHORT TERM CAPITAL GAIN AT RS. 48,23,210/- WHICH WAS OFFERED TO TAX. THE ASSESSING OFFICER FOUND THAT DU RING THE ASSESSMENT PROCEEDINGS OF THE OTHER CO-OWNER /PARTN ER SHRI. MAHENDRA VITKAR FOR A.Y. 2006-07, SHRI VITKAR IN HI S REPLY SUBMITTED ON 29-12-2008 HAD STATED THAT HE HAD NOT MADE ANY INVESTMENT IN THE PROPERTY I.E. THE TWO LANDS AT MA HALUNGE AND THAT HE WAS MADE TO SIGN THE POWER OF ATTORNEY IN FAVOUR OF THE APPELLANT SHRI GANPAT MURKUTE FOR THE PURPOSE OF SE LLING THE TWO PLOTS. IT HAS ALSO BEEN SUBMITTED THAT SHRI VITKAR WAS FORCED TO OPEN A BANK ACCOUNT AND HIS SIGNATURE OBTAINED ON THE CH EQUES AND THE CHEQUE BOOK KEPT IN THE CUSTODY OF THE APPELLANT. T HUS THE ASSESSING OFFICER BASED ON THE DENIAL MADE BY SHRI VITKAR OF HIS INVOLVEMENT IN THE ENTIRE TRANSACTION AND ALSO THE DENIAL TO HAVE MADE ANY INVESTMENT HELD THAT THE ENTIRE INVESTMENT WAS BEEN MADE BY THE APPELLANT. THE APPELLANT HAS HEAVILY RE LIED ON THE ASSESSMENT ORDER COMPLETED IN THE CASE OF SHRI VITK AR FOR A.Y. 2006- 07 AND. ALSO THE ORDER OF THE CIT(A)-V TO SUBSTANTI ATE THE FACT THAT THE TRANSACTION WAS MADE SO AS TO JUSTIFY THE CLAIM THAT HIS SHARE IS ONLY HALF OF THE TOTAL TRANSACTION. THE APPELLANT H AS ALSO FILED THE STATEMENT RECORDED U/S.131 OF THE CONCERNED PERSONS DURING THE ASSESSMENT PROCEEDINGS OF SHRI VITKAR AND ALSO THE COPIES OF THE CROSS EXAMINATION OF THE APPELLANT BY SHRI VITKAR. IN THE STATEMENT RECORDED U/S 131 OF THE APPELLANT IT IS NOTED THAT THE APPELLANT SHRI MURKUTE HAS CLEARLY STATED THAT HE WAS INTRODUCED T O SHRI VITKAR BY A FRIEND SHRI SANJAY JAIN AND THAT THE AFORESAID LA NDS PURCHASED JOINTLY ALONG WITH SHRI VITKAR. THE APPELLANT ALSO DENIED TO HAVE ASKED SHRI VITKAR TO OPEN ANY ACCOUNT OR HAD OBTAIN ED ANY SIGNATURE ON THE CHEQUES OF THE BANK AS STATED BY S HRI VITKAR IN HIS STATEMENT/SUBMISSION. IT WAS EXPLAINED BY THE APPEL LANT THAT THE CHEQUES ISSUED BY SHRI VITKAR HAD BOUNCED AND HENCE HE HAD MADE THE INITIAL PAYMENT FOR THE PURCHASE OF THE TWO LAN DS. IT WAS ALSO STATED THAT THE SHARE OF PROFIT IN HIS ACCOUNT WAS 50% AND FOR THE 10 REMAINING 50% SHRI VITKAR HAD TO OFFER THE GAINS AS THE SALE PROCEEDS OF THE TWO PROPERTIES HAD BEEN GIVEN BY WA Y OF CHEQUES EQUALLY BETWEEN THEM WHICH INDICATED THAT BOTH THE PERSONS WERE EQUAL SHARE HOLDERS IN THE TRANSACTION. THE APPELLA NT, HOWEVER, IN THE SUBMISSION MADE BEFORE THE AO DURING THE ASSESS MENT PROCEEDINGS VIDE LETTER DATED 15-12-2011 HAS CATEGO RICALLY STATED THAT HE HAD JOINTLY ALONG WITH THE ADVOCATE SHRI SA NJAY JAIN REPRESENTED BY HIS EMPLOYEE SHRI MAHENDRA VITKAR JO INTLY DEALT IN LAND TRANSACTION AT MAHALUNGE. THE APPELLANT ALSO EXPLAINED THAT SHRI . VITKAR IS MERELY AN EMPLOYEE OF SHRI . SANJAY JAIN AND IT WAS HIS USUAL TRADE PRACTICE OF SHRI JAIN TO CARRY OUT LAND TRANSACTION IN THE NAME OF HIS EMPLOYEES OR THIRD PARTIES SO AS TO AVOID PAYMENT OF TAXES . THE APPELLANT HAS ALSO REITERATED TIME AND AGAIN TH AT THE ENTIRE LAND DEAL WAS CARRIED OUT EXCLUSIVELY AT THE INSTRUCTIONS OF SHRI SANJAY JAIN UNDER HIS GUIDELINES AND SUPERVISION AN D THE REAL BENEFICIARY IN THE SAID LAND DEAL IS ADVOCATE SANJA Y JAIN AND THAT SHRI VITKAR HAS ONLY BEEN WORKING FOR AND ON BEHALF OF S HRI JAIN. THUS THE STATEMENT RECORDED U/S 131 OF THE APPELLAN T DURING THE ASSESSMENT PROCEEDINGS OF SHRI VITKAR AND THE SUBMI SSION FILED VIDE LETTER DATED 15-12-2011 DURING HIS RE-ASSESSMENT PR OCEEDINGS CONTRADICT EACH OTHER. MOREOVER, THE CONTENTION RAI SED BY SHRI . VITKAR ALSO GETS AUTHENTICATED BY THE AFORESAID SUB MISSION MADE BY SHRI . MURKUTE DURING THE COURSE OF THE REASSESSMENT PROCE EDINGS. IN THE AFORESAID SUBMISSION, THE APPELLANT HAS HELD SH RI . SANJAY JAIN TO BE THE REAL BENEFICIARY OF THE ENTIRE TRANSACTIO N AND NOT SHRI . M . R . VITKAR AS HAD BEEN HELD BY HIM BOTH DURING HIS STAT EMENT RECORDED U/S 131 ON 17-12-2008 AND ALSO HIS CROSS EXAMINATIO N BY SHRI . VITKAR ON 26-03-2010. FURTHER IT IS NOTICED THAT SH RI SANJAY JAIN IN HIS STATEMENT U/S 131 RECORDED ON 16-12-2008 HAD ST ATED THAT HE KNEW SHRI VITKAR AS A BROKER INDULGING IN PURCHASE/SALE OF LA ND FOR CLIENTS AND BEYOND THAT HE DID NOT HAVE ANY OFFICIA L OR BUSINESS DEALINGS. SHRI SAN]AY JAIN HAD ALSO DENIED OF GIVING MONTHLY COMMISSION ' OF RS.15,000/- TO SHRI VITKAR AND ALSO THE AFORESAI D TRANSACTIONS WITH RESPECT TO THE MAHALUNGE AND SHRI JAIN ALSO DENIED THE DEPOSIT OF CASH IN A/C NO 318 OF JAN SEV A SAHAKARI BANK , MIDC BHOSARI AS STATED BY VITKAR THAT THE CASH DEPO S I TED IN THE BANK WAS BY SHRI JAIN, WHICH WAS DISBELIEVED BY THE AO AT THAT T IME . THUS , SHRI SANJAY JAIN HAD COMPLETELY DENIED HIS INVOLVEM ENT WITH SHR I V I TKAR OR TO HAVE INDULGED ANY SUCH TRANSACTION AS ST ATED BY HIM . I N THE STATEMENT RECORDED U/S 131 OF SHRI VITKAR IT BECOMES QUITE APPARENT ON ITS PERUSAL THAT HE WAS ACTING ON BEHALF OF SHRI JAIN AND THE ENTIRE TRANSACTION RELATING TO THE TWO MAHLALUNGE LANDS WAS CARRIED OUT BY THE APPELLANT, SHRI. GANPAT MURK UTE. THUS IF THE ENTIRE FACT ARE TAKEN INTO CONSIDERATION INCLUDING THE SUBMISSION MADE BY THE APPELLANT DATED 15-12-20 1 1 IT PRIMA FACIE PO I NTS OUT TO THE FACT THAT SHRI. VITKAR WAS JUST A NAME LENDER F OR THE TRANSACTION AND THE ENTIRE EXERCISE WAS CARRIED OUT BY THE APPE LLANT. THE SUBMISSION MADE BY THE APPELLANT ALSO CLEARLY INDIC ATES THAT THE RELIANCE PLACED BY HIM ON THE ASSESSMENT ORDER PASS ED AND THE APPELLATE ORDER IN THE CASE OF SHRI VITKAR DO NOT J USTIFY THE CLAIM MADE BY HIM. THE FACTS BROUGHT ON RECORD NOW DURING THE REASSESSMENT PROCEEDINGS BY THE APPELLANT, HOWEVER, WERE NOT AVAILABLE WITH THE AO ASSESSING SHRI VITKAR AS WELL AS WITH THE LD. CIT (A)-V . THE ASSESSING OFFICER IN THE PRESENT CASE HAS NOT A CTED ON . PRESUMPTION AND ASSUMPTION AS THE MATERIAL ON RECOR D CLEARLY PO I NT OUT . TO THE FACT THAT THE APPELLANT WAS SOLELY RESPONSIB LE FOR THE ENTIRE TRANSACTIONS AS ALL THE EVIDENCES BROUGHT ON RECORD INDICATE THAT THE APPELLANT WAS-INSTRUMENTAL IN CARRYING OUT THE TRANSACTIONS IN CONSULTATION WITH SHRI JAIN . THE APPELLANT HAS ADMITTEDLY INDICATED THAT SHRI VITKAR WAS NOT DIREC TLY INVOLVED IN THE TRANSACTION WHICH HAS NOW BEEN ACCEPTED BY THE APPELLANT. THE BURDEN OF PROOF IN INCOME TAX MATTERS ON QUESTION O F FACT ORDINARILY LIES ON THE ASSESSEE SINCE HE ALONE HAS ACCESS TO T HE INFORMATION 11 RELEVANT TO HIS ASSESSMENT. TAX LIABILITY IN THE CA SE OF SUSPICIOUS TRANSACTIONS TO BE ASSESSED ON THE BASIS OF THE MAT ERIAL AVAILABLE ON RECORD, SURROUNDING CIRCUMSTANCES, HUMAN CONDUCT , AND PREPONDERANCE OF PROBABILITY AND NATURE OF INFORMAT ION/EVIDENCE AVAILABLE ON RECORD. THE STATEMENT GIVEN U/S. 131 DURING THE ASSESSMENT PROCEEDINGS OF SHRI VITKAR AND THE SUBSE QUENT SUBMISSION OF THE APPELLANT AND THE EVIDENCE ON REC ORD TAKEN IN TOTALITY ON THE FACTS AND CIRCUMSTANCES OF THE MATT ER DO INDICATE THE APPELLANT TO HAVE CARRIED OUT THE TRANSACT I ON AND BEING ITS SOLE BENEFICIARY AND HENCE THE ASSESSING OFFICER HAS RIG HTLY TAXED THE PROPERTIES IN THE HANDS OF THE APPELLANT IN RESPECT OF THE AFORESAID SAID LAND TRANSACTIONS . THUS THE CONTENTION RAISED BY THE APPELLANT THAT THE ADDITION OF RS . 1 , 87,31,210/- MADE BY THE A.O . ON ACCOUNT OF INCORRECT COMPUTATION OF SHORT-TERM CAPITAL GAIN IS FOUND TO BE NOT TENABLE AND THE GROUND OF APPEAL RAISED IN THIS REG ARD IS LIABLE TO BE DISMISSED. 3.5 SO FAR AS THE CONTENTION RAISED BY THE APPELLAN T REGARDING THE ALLOWABILITY OF THE EXPENSES ON ACCOUNT OF EVELOPME NT/IMPROVEMENT OF LAND AMOUNTING TO RS.19.54 LACS AND RS.30 LACS O N ACCOUNT OF COMMISSION PAYMENT FOR THE SALE OF LAND IS CONCERNE D IT IS NOTICED THAT THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIAT E THE CLAIM MADE BY HIM IN THIS REGARD. THE PAYMENTS FOR THE PURCHAS E OF THE AFORESAID LAND AT MAHALUNGE WAS MADE BY THE APPELLA NT TO THE EXTENT OF RS. 40 LACS AS AGAINST THE COST OF RS. 2 . 20 CRORES AND THE SAID LAND BEEN PURCHASED VIDE TWO AGREEMENT DATED 2 0.05 . 2005 AND MOST OF THE EXPENDITURE ON IMPROVEMENT ' HAS BEEN - INCURRED BY THE APPELLANT WITHIN A PERIOD OF ONE MONTH PURCHASE WHICH IS NEARLY HALF OF THE PURCHASE PRICE GIVEN BY THE APPELLANT. MOREOVER, THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE THE EXP ENDITURE INCURRED ON ACCOUNT OF DEVELOPMENT/IMPROVEMENT OF T HE LAND WITHIN SUCH A SHORT PERIOD BY WAY OF SUPPORTING AND COGENT EVIDENCES. THE APPELLANT HAS NOT ABLE TO PROVE THE CONTENTION RAIS ED DURING THE APPELLATE PROCEEDINGS AND HAS ONLY REITERATED THE C ONTENTION RAISED BEFORE THE ASSESSING OFFICER. IN VIEW . OF THE ABOVE FACT THE CLAIM OF THE EXPENSES ON ACCOUNT OF IMPROVEMENT OF LAND OF R S.19.54 LACS DISALLOWED BY THE ASSESSING OFFICER IS LIABLE TO BE UPHELD AND THE GROUND OF APPEAL RAISED IN THIS REGARD IS LIABLE TO BE DISMISSED. 3.6 SO FAR AS THE CLAIM OF PAYMENT OF COMMISSION OF RS. 30 LACS TO NILESH KAMAT FOR THE EXECUTION OF THE SALE DEED IS CONCERNED, THE ASSESSING OFFICER HAS DISALLOWED THE AFORESAID CLAIM BECAUSE OF THE FACT THAT NO CONFIRMATION FROM THE A FORESAID PERSON WAS PRODUCED AND THE APPELLANT HAD NOT BEEN ABLE TO EXPLAIN THE CIRCUMSTANCES UNDER WHICH THE SAID PAYM ENT OF COMMISSION AT SUCH A HIGH RATE WAS MADE. DURING THE APPELLATE PROCEEDINGS ALSO THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY THE PAYMENT OF COMMISSION TO THE EXTENT OF RS.30 LACS O N A TOTAL RECEIPT OF RS.2.85 CRORES WHICH WAS THE STATED NET SALES CONSIDERED RECEIVED BY THE APPELLANT. THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY THE ROLE OF SHRI. KAMAT TO WHOM THE COMMISSION OF RS.30 LACS HAS BEEN PAID. IT IS ALSO NOT CLEAR NOR ANY MATERIAL HAS BEEN BROUGHT ON RECORD BY THE APPELLANT THAT TH E SAID RECEIPT OF COMMISSION HAS BEEN OFFERED FOR TAXATION BY SHRI . KAMAT WHO IS STATED TO BE AN EMPLOYEE OF A PRIVATE COMPANY. T HE ASSESSING OFFICER WAS ALSO PREVENTED FROM CARRYING OUT NECESS ARY VERIFICATION SO AS TO ENQUIRE INTO THE GENUINENESS OF THE SAID PAYMENT AS THE NECESSARY ADDRESS OR ANY DETAILS HAV E NOT BEEN PROVIDED TO HIM BY THE APPELLANT. THE FACT AND CIRC UMSTANCES BROUGHT ON RECORD DO NOT INDICATE THE NECESSITY OF BRINGING SHRI KAMAT WHEN THE APPELLANT AND THE RELATED PERSON THE MSELVES WERE LAND DEALERS AND AGENT AND EXPERT IN THEIR FIE LD OF LAND DEALINGS. THE APPELLANT HAS NOT FURNISHED ANY MATERIAL SO AS TO 12 JUSTIFY THE CLAIM AS THE BURDEN LIES ON THE APPELLA NT TO SUBSTANTIATE FACTUM OF EXPENDITURE AND ALSO ITS PER MISSIBILITY. IN THE ABSENCE OF THE DETAILS OF THE SERVICES RENDERED IN RESPECT OF SHRI KAMAT TO WHOM COMMISSION AT AN EXCESSIVE RATE WAS PAID AND ALSO THE ABSENCE OF ANY CONFIRMATION IN THIS RE GARD, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM MADE BY THE APPELLANT AND HENCE THE GROUND OF APPEAL RAISED BY THE APPELLANT IN THIS REGARD IS LIABLE TO BE DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 12. BEFORE US, WITH RESPECT TO THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL, WHICH IS WITH RESPECT TO ALLOWING THE RE- OPENING OF ASSESSMENT, IT WAS SUBMITTED THAT THE RE-OPENING OF AS SESSMENT HAS BEEN ARRIVED ON THE BASIS OF ASSESSMENT ORDER PAS SED IN THE CASE OF SHRI MAHENDRA VITKAR U/S 143(3) OF THE ACT ORDER DT.30.06.2010 FOR A.Y. 2006-07. HE SUBMITTED THAT IN THE S AID ASSESSMENT ORDER, HALF SHARE OF CAPITAL GAINS EARNED ON S ALE OF LAND TO M/S. RIVERVIEW PROPERTIES PVT. LTD., HAS BEEN HELD TO B E TAXABLE IN THE HANDS OF MAHENDRA VITKAR WHEREAS IN CASE OF ASSES SEE, THE ASSESSMENT HAS BEEN RE-OPENED ON THE GROUND THAT TH E ENTIRE CAPITAL GAINS IS TAXABLE IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED THAT WHEN ONCE HALF SHARE OF THE CAPITAL GAINS HAS BEEN HELD TO BE TAXABLE IN THE HANDS OF MAHENDRA VITKAR, AT TH E SAME TIME, THE SAME INCOME CANNOT BE HELD TO BE TAXABLE IN THE HANDS OF ASSESSEE. IT WAS THEREFORE SUBMITTED THAT THERE CAN B E NO REASON ON THE PART OF THE AO TO FORM A BELIEF THAT ENTIRE CAPITA L GAINS FROM SALE OF LAND TO M/S. RIVERVIEW PROPERTIES PVT. LTD., WAS TA XABLE IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED TH AT THERE IS A MASSIVE CONTRADICTION IN THE FINDINGS IN THE ASSESSMENT ORD ER PASSED IN THE CASE OF MAHENDRA VITKAR AND THE REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148 OF THE ACT IN THE CASE OF ASSESSEE. HE FURTHER SUBMITTED THAT THERE WAS NO NEXUS BETWEEN THE 13 FORMATION OF A BELIEF THAT THE INCOME HAS ESCAPED AND THE REASON RECORDED OF THE BELIEF HELD BY THE AO CANNOT BE SAID TO B E IN GOOD FAITH AND THE BELIEF OF THE AO IS CONTRARY TO THE FINDINGS O F AO IN THE ASSESSMENT ORDER IN THE CASE OF MAHENDRA VITKAR. A SSESSEE ALSO PLACED RELIANCE IN THE CASES OF (I) AVTEC LIMITED REPORTE D IN 370 ITR 0611 (DEL), (II) RAJESH JHAVERI STOCK BROKERS (P) LTD., REP ORTED IN 284 ITR 0593 (GUJ) AND (III) ADANI EXPORTS REPORTED IN 24 0 ITR 224 (GUJ). 13. ON THE MERITS OF THE ADDITION WITH RESPECT TO THE OTH ER GROUNDS BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAD ACQUIRED TWO PIECES OF LAND FOR RS.1,10,00,000/- EACH JOINTLY WITH MAHENDRA R. VITKAR FROM M/S. ABHI AGRO TRUST AND M/S. SAN GRAM AGRO TRUST AGAINST WHICH, POST DATED CHEQUES WERE ISSUE D FROM THE BANK ACCOUNT OF MAHENDRA R VITKAR. LD.A.R. SUBMITTED THAT SINCE THE POST DATED CHEQUES ISSUED FROM THE ACCOUNT OF MAHE NDRA VITKAR GOT DISHONORED, ASSESSEE HAD PAID RS.20 LAKHS EACH TO M/S. ABHI AGRO TUST AND M/S. SANGRAM AGRO TRUST FROM HIS BAN K ACCOUNT MAINTAINED WITH UNITED WESTERN BANK. HE FURTHER SUBMITTED THAT THE MUTATION OF LAND HAD TAKEN PLACE IN TH E NAME OF ASSESSEE AND THE NAME OF MAHENDRA VITKAR WAS ENTER ED IN 7/12 EXTRACT OF THE REVENUE RECORDS. HE SUBMITTED THAT ON 10.06.2005, ASSESSEE AGREED TO SELL THE LAND JOINTLY WITH MAHENDRA V ITKAR TO SHRI GURUMKH SUKHWANI AND SHRI GHANSHYAM SUKHWANI AND H AD RECEIVED RS.20 LACS TOWARDS SALE CONSIDERATION AND ASSESS EE HAD DEPOSITED THE SAME WITH ORIENTAL BANK OF COMMERCE. HE SUBM ITTED THAT ON 14.06.2005 A PUBLIC NOTICE WAS ISSUED BY SHRI S.P.L ALVANI, ADVOCATE, WITH RESPECT TO THE FACT THE LAND UNDER REFERE NCE WAS OWNED BY ASSESSEE AND SHRI MAHENDRA VITKAR AND THAT H IS CLIENT 14 WAS UNDER THE PROCESS TO PURCHASE THE LAND FROM THE A SSESSEE. ON 15.06.2005 MAHENDRA VITKAR HAD EXECUTED THE GENERAL POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE FOR THE SALE OF LA ND IN QUESTION. ON 27.03.2006 LAND WAS SOLD BY ASSESSEE AND SH RI MAHENDRA VITKAR TO M/S. RIVERVIEW PROPERTIES PVT. LTD., FOR A SALE CONSIDERATION OF RS.4,85,75,000/- AND THE PART OF SALE CONSIDERATION WAS GIVEN TO ASSESSEE AND MAHENDRA VITKAR BY CHEQUES ISSUED IN THEIR SEPARATE NAMES. RS.1,29,37,500/- WA S PAID THROUGH CHEQUES IN THE NAME OF SHRI M.R. VITKAR WHICH WAS DEPOSITED BY MAHENDRA VITKAR IN HIS ACCOUNT. HE SUBMITTE D THAT ON 05.06.2007 SHRI MAHENDRA VITKAR FILED HIS RETURN OF INCOME FOR A.Y. 2006-07 BUT DID NOT INCLUDE HIS SHARE OF CAPITAL GAINS FROM THE SALE OF LAND. DURING THE COURSE OF ASSESSMENT PROCEE DINGS OF MAHENDRA VITKAR, SHRI VITKAR HAS TAKEN A STAND THAT HE WAS FORCED TO OPEN A BANK ACCOUNT AND HIS SIGNATURES WERE TAKEN ON BLANK CHEQUES AND THAT HE WAS MADE TO SIGN POWER OF ATTORNE Y AND THAT THE ENTIRE TRANSACTION WAS CARRIED OUT BY THE ASSESSE E. THE CONTENTIONS OF MAHENDRA VITKAR WERE NOT ACCEPTED BY TH E AO AND BY ASSESSMENT ORDER DATED 13.4.2010 PASSED U/S 143(3), T HE SHARE OF CAPITAL GAINS AMOUNTING TO RS.1,77,97,790/- ARISING OUT O F THE LAND WAS HELD TO BE TAXABLE IN THE HANDS OF MAHENDRA VITK AR. HE FURTHER SUBMITTED THAT LD.CIT(A) VIDE ORDER DT.20.06.2010 HA S UPHELD THE ADDITION OF HALF SHARE OF CAPITAL GAINS ARISING FROM THE SALE OF LAND IN THE CASE OF SHRI MAHENDRA VITKAR. HE THEREFO RE SUBMITTED THAT WHEN A PORTION OF CAPITAL GAINS ARISING ON T HE SALE OF SAME PIECE OF LAND HAS BEEN HELD TO BE TAXABLE IN THE CASE OF MAHENDRA VITKAR, THE SAME GAINS CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE. HE THEREAFTER POINTED TO THE WORKING OF S HARE OF SHORT 15 TERM CAPITAL GAINS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME AND SUBMITTED THAT THE GAINS WERE RIGHTLY OFFERED BY THE ASSESSEE . 14. LD.D.R. ON THE OTHER HAND ON THE ISSUE OF REOPENING SUBMITTED THAT IN THE CASE OF ASSESSEE, THE RETURN OF IN COME WAS ORIGINALLY FILED BY THE ASSESSEE ON 26.03.2007 AND WAS PROC ESSED U/S 143(1) OF THE ACT AND NO ASSESSMENT ORDER WAS FRAME D U/S 143(3) OF THE ACT. HE THEREFORE SUBMITTED THAT SINCE NO AS SESSMENT WAS FRAMED U/S 143(3) THERE WAS NO QUESTION OF FORMING AN Y OPINION OF THE ISSUE AND THEREFORE THE QUESTION OF CHANGE OF OPINION DOES NOT ARISE. HE THEREAFTER POINTED TO THE COMPUTATIO N OF TOTAL INCOME FILED IN PAGE 2 OF THE PAPER BOOK AND POINTED THAT WHILE WORKING THE CAPITAL GAINS, ASSESSEE HAD SHOWN SALE CONSIDE RATION OF AGRICULTURAL LAND OF RS.1,42,87,500/- AS AGAINST THE TOTAL S ALE CONSIDERATION OF RS.4,85,75,000/- AND THUS THERE WAS A PRIMA FACIE WRONG DECLARATION MADE BY THE ASSESSEE IN THE RETURN O F INCOME. HE FURTHER SUBMITTED THAT WHEN ASSESSEE HAD SHOWN REC EIPT OF SALE CONSIDERATION OF RS.1.42 CRORES AS AGAINST THE SALE CONS IDERATION OF RS.4.85 CRORES AND WHEN THERE WAS NO OCCASION BY THE A O TO EXAMINE THESE FACTS EARLIER, THE AO WAS FULLY JUSTIFIED IN RE -OPENING THE ASSESSMENT. HE THEREAFTER POINTED TO PAGE 188 OF T HE ASSESSEES PAPER BOOK WHEREIN ASSESSEE HAS STATED TO HAVE WORKED OUT CORRECT WORKING OF SHORT TERM CAPITAL GAINS IN THE CA SE OF ASSESSEE AND MAHENDRA VITKAR. FROM THE AFORESAID WORKIN G, HE POINTED OUT THAT AS PER THE AFORESAID WORKING THE NET CAPITAL GAINS IN CASE OF ASSESSEE HAS WORKED OUT AT RS.68,23,210/- AS AGAINST THE CAPITAL GAIN OF RS.48,23,210/- SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY THE ASSESSEE. HE THEREFORE SUBMIT TED THAT THERE IS INCONSISTENCY IN THE WORKING OF CAPITAL GAINS AS WO RKED OUT 16 BY THE ASSESSEE HIMSELF AND BOTH THE CAPITAL GAINS ARE D IFFERENT AND IN SUCH A SITUATION, THE A.OS ACTION OF RE-OPENING THE ASSESSMENT CANNOT BE FAULTED WITH. HE FURTHER SUBMITTED THAT THE HONBLE SUPREME COURT IN THE CASE OF RAJESH JAVERI (SUPR A) HAS HELD THAT THE INTIMATION ISSUED U/S 143(1) OF THE ACT CAN BE SUBJECT TO RE-OPENING SO LONG AS THE INGREDIENTS OF SEC.1 47 OF THE ACT ARE FULFILLED BECAUSE NO OPINION IS FORMED AT THE TIME OF ISSUANCE OF INTIMATION U/S 143(1). 15. ON THE MERITS OF THE ADDITION, HE SUBMITTED THAT SHRI MAHENDRA VITKAR HAD STATED THAT HE HAS NOT MADE ANY INVESTMENT IN THE PROPERTIES AND HE WAS MADE TO SIGN THE POWER O F ATTORNEY IN FAVOUR OF THE ASSESSEE FOR THE PURPOSE OF SELLING THE LAND. IT WAS ALSO SUBMITTED BY SHRI MAHENDRA VITKAR THAT HE WAS FORCE D TO OPEN BANK ACCOUNT AND HIS SIGNATURES WERE OBTAINED IN THE C HEQUE BOOK AND THE CHEQUE BOOK WAS KEPT IN THE CUSTODY OF THE AS SESSEE. HE FURTHER SUBMITTED THAT MAHENDRA VITKAR WAS JUST A NAME LENDER FOR THE TRANSACTION AND THE ENTIRE TRANSACTION WAS CARRIED OUT BY THE ASSESSEE. IN SUCH A SITUATION, THE AO WAS FULLY JUSTIFIED IN CONSIDERING THE ENTIRE CAPITAL GAINS IN THE HANDS OF THE A SSESSEE. HE THUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 16. NOW WE TAKE UP THE CASE OF ASSESSEE IN CASE OF MAH ENDRA VITKAR IN ITA NO.1208/PUN/2010 AND THE RELEVANT FACTS O F THE CASE ARE AS UNDER :- 16.1 ASSESSEE IS AN INDIVIDUAL AND STATED TO BE WORKING AS TRANSPORTER AND BRICK SUPPLIER. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2006-07 DECLARING TOTAL INCOME OF RS.1,54,364/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED 17 U/S 143(3) OF THE ACT VIDE ORDER DT.31.12.2008 AND THE TO TAL INCOME WAS DETERMINED AT RS.2,44,33,402/- AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORD ER DT.30.06.2010 (IN APPEAL NO.PN/CIT(A)-V/WD.9(4)/238/09-10 (TR.IN)) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE AND REVENUE ARE NOW IN APPEA L BEFORE US. 17. THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL NO.1208/PUN/2010 READS AS UNDER : 1. THE CIT(A) HAS ERRED IN NOT CONCLUDING THAT WHO LE INCOME BELONGED TO MR. GANDPAT MURKUTE AND ASSESSEE (MR. M AHENDRA VITKAR) WAS ONLY BENAMIDAR INCOME FROM SALE OF PROP ERTY AT S.NO.43/2/1, MAHALUNGE TO RIVER VIEW PROPERTIES PVT . LTD., INCLUDED IN THE HANDS OF MR. VATIKAR MAY PLEASE BE DELETED. 2. WITHOUT PREJUDICE TO GROUND NO.1, LOWER AUTHORIT IES HAVE ERRED BOTH ON THE FACTS AND IN LAW IN ASSESSING THE INCOM E FOR PURCHASE & SALE OF PROPERTY AT S.NO.43/2/1, MAHALUNGE IN INDIV IDUAL HANDS OF THE ASSESSEE AS SAME HAS TO BE ASSESSED AS AOP. SA ME MAY PLEASE BE DELETED. 3. CIT(A) HAS ERRED IN NOT GIVING FURTHER, FULL OPP ORTUNITY OF CROSS- EXAMINATION. 4. WITHOUT PREJUDICE TO GROUND NO.1 & 2, CIT(A) HAS ERRED IN NOT QUANTIFYING THE INCOME ASSESSEE IN THE HANDS OF THE APPELLANT (IF ASSESSABLE). 5. APPELLANT DENIES LIABILITY TO INTEREST U/S 234B & 234C ETC. 6. LOWER AUTHORITIES HAVE ERRED IN CONFIRMING CHARG E / LIABILITY TO INTEREST U/S 234B/C. AS ASSESSEE WAS NOT LIABLE TO ADVANCE TAX, INTEREST IS NOT CHARGEABLE. 7. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 18. ON THE OTHER HAND, THE GROUND RAISED BY THE REVEN UE IN APPEAL NO.1213/PUN/2010 READS AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIO N OF RS.50,00,000/- MADE ON ACCOUNT OF UNEXPLAINED DEPO SITS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN DELETING ADDITION OF RS.50 LACS BY 18 RELYING ON THE CONFIRMATIONS FILED BY THE ASSESSEE AT THE TIME OF REMAND PROCEEDINGS AND IN IGNORING THE FACT THAT TH E AO HAS NEVER LENT CREDENCE TO THE GENUINENESS OF THESE TRANSACTI ONS AMOUNTING TO RS.50 LACS. 3. THE ORDER OF THE CIT(APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICES BE RESTORED. 19. SINCE THE GROUNDS RAISED BY THE ASSESSEE AND THE R EVENUE ARE INTER-CONNECTED BOTH ARE CONSIDERED TOGETHER. 20. ON THE BASIS OF AIR INFORMATION RECEIVED BY THE AO, IT WAS NOTICED THAT ASSESSEE HAD PURCHASED TWO PLOTS OF RS.1,10 ,00,000/- EACH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE O F INVESTMENT IN THESE TWO PROPERTIES ALONG WITH NECESSARY EVIDENCE. A O NOTED THAT ASSESSEE DID NOT PRODUCE THE REQUIRED DOCUMENTS. SINCE THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS, INSPECTOR WAS DEPUTED TO SUB-REGISTRARS OFFICE AND THE INFORMATION WAS GATHERED. IT WAS NOTICED THAT ASSESSEE HAD ISSUED CHE QUES FROM SEVA VIKAS CO-OPERATIVE BANK FOR THE DEAL. FURTHER BAN K STATEMENTS WERE ALSO OBTAINED BY THE AO. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF AMOUNT IN HIS BANK ACCOUNT AMOU NTING TO RS.49,65,000/- AND WITHDRAWALS OF RS.48,54,750/-. IT WAS SUBMITTED BY HIM THAT THE DEPOSITS WERE MADE BY SHRI SA NJAY JAIN AND THE CHEQUES WERE ISSUED AT HIS BEHEST. SUMMONS U/ S 131 WERE ISSUED TO SANJAY JAIN AND HIS STATEMENT WAS RECO RDED ON 08.2.2008, WHEREIN HE DENIED OF HAVING MADE ANY DEPOSITS INCLUDING CASH IN THE PROPOSED ACCOUNT OF ASSESSEE AND A NY INSTRUCTIONS TO ISSUE CHEQUES FROM THE BANK OF ASSESSEE OR HIS BANK ACCOUNT. SUMMONS U/S 131 WERE ALSO ISSUED TO SHR I GANPAT MURKUTE AND HIS STATEMENT WAS RECORDED ON 17.12.2008. HE SUBMITTED THAT THE PLOTS WERE PURCHASED BY HIM JOINTLY WITH THE ASSESSEE AND SINCE THE CHEQUES GIVEN TO THE SELLERS BY THE ASSESSEE 19 BOUNCED, TWO CHEQUES OF RS.20 LAKHS EACH WERE ISSUED BY HIM. IT WAS FURTHER SUBMITTED BY HIM THAT THESE TWO PROPERTIES WERE SOLD TO M/S.RIVERVIEW PROPERTIES PVT. LTD., FOR 4,85,75,000/-. IT WAS ALSO SUBMITTED BY HIM THAT HE HAS SHOWN IN HIS RETURN OF INCOME HIS SHARE OF CAPITAL GAINS OF 50%. AO AFTER CONSIDERING THE TOTALITY OF THE FACTS HELD THAT OUT OF THE TOTAL CAPITAL GAINS EARNE D AS RS.2,26,21,000/- OF WHICH GANPAT MURKUTE HAD SHOWN RS.48,23,210/- IN HIS RETURN, THE REMAINING AMOUNT OF CAPITAL GAINS OF RS.1,77,97,790/- WAS UNDISCLOSED SHORT TERM CAPITA L GAINS OF THE ASSESSEE AND ACCORDINGLY MADE ITS ADDITION. 21. AO ON PERUSING THE BANK ACCOUNT OF PROPRIETARY CO NCERN IN THE NAME OF M/S. MEGHALI PROPRIETY MAINTAINED WITH JANSEVA SAHAKARI BANK AND SEVA VIKAS CO-OPERATIVE BANK LTD., N OTICED THAT THERE WERE DEPOSITS IN THOSE BANK ACCOUNTS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS. IN THE ABSENCE OF ANY EXPLANATION, AO CONSIDERED THE AMOUNT OF RS. 64,81,248/- DEPOSITED IN THE BANK ACCOUNT AS UNEXPLAINED DEPOSITS AN D MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD.CIT(A). 22. ON THE ISSUE OF TAXING OF CAPITAL GAINS LD CIT(A) UPHELD THE ORDER OF AO BY HOLDING AS UNDER : 18. I HAVE GIVEN CAREFUL CONSIDERATION TO THE MATTER. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE IR TOTALITY, THE PICTURE THAT EMERGES IS THAT AS PER GOVERNMENT RECO RDS, THE APPELLANT WAS A JOINT PURCHASER (ALONG WITH SHRI MURKUTE) OF THE PROPERTY IN QUESTION, AND ALSO A JOINT SELLER THERE OF TO THE ULTIMATE BUYER (M/S. RIVERVIEW), AN AMOUNT OF RS.L, 22,17,325/- OUT OF THE CONSIDERATION RECEIVED FROM THE LATTER F LOWED INTO HIS INDIVIDUAL BANK ACCOUNT, AND ANOTHER AMOUNT OF RS.7 ,20,175/- INTO HIS JOINT ACCOUNT WITH SHRI MURKUTE, AN AMOUNT OF RS.13 LAKHS HAD BEEN PAID OUT OF HIS ACCOUNT TO MR. NARES H KAMATH TOWARDS BROKERAGE FOR THE TRANSACTION. IN THE FACE OF THIS FACTUAL AND LEGAL POSITION, IT IS VERY DIFFICULT TO AGREE W ITH THE APPELLANT 20 THAT HE HAD NOTHING TO DO WITH THE TRANSACTION AND THAT THE ENTIRE TRANSACTION HAD BEEN CARRIED OUT BY SHRI MURKUTE. A LTHOUGH THE APPELLANT HAS CLAIMED THAT HE IS NOT EDUCATED, IMPL YING THEREBY THAT HE WAS AN INNOCENT PARTY WHOSE NAME HAS BEEN E XPLOITED, THERE IS EVERY REASON TO BELIEVE THAT , IN FACT, HE WAS WELL-VERSED IN PROPERTY TRANSACTIONS . SHRI SANJAY JAIN, IN HIS CROSS- EXAMINATION BY THE APPELLANT, HAS MENTIONED THAT HE KNEW THE APPELLANT AS THEY WERE BOTH ESTATE AGENTS AND BROKE RS. THE APPELLANT DID NOT CONTRADICT HIM IN THIS REGARD. IN FACT, IN HIS LETTER DATED 07.03.2010 TO THE UNDERSIGNED, THE APP ELLANT HIMSELF HAS ADMITTED TO THIS FACT AS IS CLEAR FROM THE FOLLOWING EXTRACT: ASSESSEE MR. MAHENDRA VITKAR HAS NOT RETURNED ANY INCOME IN HIS RETURN AS WHOLE OF THE TRANSACTION OF PROPERTY PURC HASE AND SALE BELONGS TO MR. GANPAT MURKUTE . HOWEVER, IF SAID SUBMISSION WAS NOT ACCEPTABLE TO AO, IN ANY CASE IT IS CLEAR THAT BOTH MR. GANPAT MURKUTE AND MR. VITKAR ARE EST ATE BROKERS. IT HAS BEEN MADE CLEAR THAT PROPERTY TRANS ACTION IN JOINT NAME WAS FOR IMMEDIATE SALE.[EMPHASIS ADDED] 19 . FURTHER, THE APPELLANT HAS ALSO EXPLAINED SOME OF T HE DEPOSITS FOUND BY THE AO IN HIS BANK ACCOUNTS AS PERTAINING TO CERTAIN OTHER PROPERTY TRANSACTIONS TO WHICH HE WAS A PARTY . ALL THESE FACTS CLEARLY DEMONSTRATE THAT THE APPELLANT WAS FA R FROM BEING AN INNOCENT AND GULLIBLE PERSON WHOSE NAME COULD HA VE BEEN EXPLOITED BY SHRI MURKUTE IN THE MANNER HE NOW CONV ENIENTLY CLAIMS IT WAS. IN ANY PROFITABLE VENTURE UNDERTAKEN BY TWO OR MORE PERSONS/PARTIES JOINTLY, IT IS QUITE COMMON FO R ONE OF THEM TO TAKE GREATER INITIATIVE-EVEN THE ENTIRE INITIATIVE- AND TO SHOULDER A GREATER PART OF THE RESPONSIBILITY IN BRINGING THE TRANSACTION TO FRUITION. IN SUCH CASES, THE OTHER PARTY HAVING WIL LINGLY CONSENTED AND DULY COOPERATED IN ALL THE LEGAL AND PROCEDURAL REQUIREMENTS TO COMPLETE THE TRANSACTION (NOTABLY, EVEN THE AIR INFORMATION RECEIVED BY THE AO WAS IN RESPECT OF THE APPELLANT) , HAVING ALLOWED THE CONSIDERATION THEREFROM TO FLOW INTO HI S OWN BANK ACCOUNTS, CANNOT LATER TURN BACK AND DISOWN THE TRA NSACTION COMPLETELY AND PIN THE ENTIRE RESPONSIBILITY ON THE OTHER. IT IS NOTEWORTHY THAT NOWHERE HIS SUBMISSIONS HAS THE APP ELLANT ALLEGED FORGERY OF HIS SIGNATURES, OR USE OF FORCE OR FOR TO OBTAIN HIS SIGNATURES EITHER ON THE PROPERTY DOCUMENTS OR BANK DOCUMENTS. 20. UNDER THE ABOVE CIRCUMSTANCES, I DO NOT AGREE W ITH THE CONTENTION OF THE APPELLANT THAT SHRI MURKUTE WAS A NSWERABLE FOR THE ENTIRE TRANSACTION AND THE WHOLE INCOME ARISING THEREFROM WAS THAT OF SHRI MURKUTE. ACCORDINGLY, GROUND NO.3 IS HEREBY DISMISSED. 23. WITH RESPECT TO THE ADDITION ON ACCOUNT OF UNEXPLAINE D DEPOSITS, LD.CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER : 32. I HAVE CONSIDERED CAREFULLY ALL THE MATERIAL B EFORE ME. ALTHOUGH THE APPELLANT TAKEN THIS ISSUE UP AS A GRO UND OF APPEAL, NO DETAILS WERE FILLED AT THE TIME OF FILIN G APPEAL ATTEMPTING TO EXPLAIN THESE CASH TRANSACTIONS. FURT HER, NO EXPLANATION IS FOUND REGARDING THIS TRANSACTION IN HIS DETAILED WRITTEN SUBMISSIONS DATED 25.11.2009, WHER EIN HE HAS DEALT AT GREAT LENGTH ON THE ISSUE OF CAPITAL G AINS ARISING FROM THE TRANSACTION JOINTLY ENTERED INTO BY HIM AN D SHRI MURKUTE. HOWEVER, IN HIS LETTER DATED 01.04.2010 SU BMITTED 21 BEFORE THE AO DURING REMAND PROCEEDINGS, THE APPELL ANT SUBMITTED AS BELOW: I HEREWITH SUBMIT THE SOURCE OF CASH DEPOSITED IN JANATA SAHAKARI BANK LTD. AND THE SEVA VIKAS CO- OP. BANK LTD. THIS CASH IS RECEIVED FROM 1) MR. JAYANTILAL MADANLAL DUDHEDIYA,2) MRS. BHARATI JAYANTILAL DUDHEDIYA 3) PRASHANT JAYANTILAL DUDHEDIYA AND 4) RAKHI JAYANTILAL DUDHEDIYA FOR ADVANCE FOR SALE OF MY PROPERTY AT THERGAON, WHICH IS ALREADY MENTIONED IN MY ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2006-07. 33. IN HIS REMAND REPORT, THE AO HAS MENTIONED TH E SAID LETTER OF THE APPELLANT DATED 01.04.2010, AND HAS FORWARDED T HE SAME ALONG WITH CONFIRMATIONS SUBMITTED BY THE APPELLANT FORM THE PARTIES FROM WHOM THE CASH AMOUNT IS STATED TO HAVE BEEN RECEIVE D. HE HAS NOT QUESTIONED THE VERACITY OF THE CLAIM. AS SUCH, OUT OF THE TOTAL ADDITION OF RS.64,81,248/- MADE BY THE AO ON ACCOUN T OF UNEXPLAINED DEPOSITS IN BANK ACCOUNTS AN AMOUNT OF RS.50,00,000/- IS CONSIDERED TO HAVE BEEN EXPLAINED . AS REGARD THE REMAINING AMOUNTS, NO EXPLANATION HAS BEEN OFFERED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDING S, NOR ANY SUBMISSIONS HAVE BEEN MADE BEFORE THE AO DURING THE REMAND PROCEEDINGS. ACCORDINGLY, THE ADDITION OF REMAININ G AMOUNT (RS.64,81,248/- -- RS.50,00,000/- = RS.14,81,248/ -) IS HEREBY CONFIRMED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE AND REVENUE ARE NOW IN APPEAL BEFORE US. 24. BEFORE US THE ASSESSEE APPEARED IN PERSON AND FILED AFFIDAVIT. THE LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND SUBMITTED THAT THE ENTIRE TRANSACTION WA S EXECUTED BY SHRI GANPAT MUKUNDRAO MURKUTE AND ASSESSEES NAME WAS MERELY USED AS NAME LENDOR FOR THE TRANSACTION. IN SUP PORT OF HIS CONTENTION, ASSESSEE ALSO FILED A SWORN AFFIDAVIT, WHICH READS AS UNDER : A F F I D A V I T THIS AFFIDAVIT IS MADE ON THE 3 R D DAY OF NOVEMBER 2017 AT PUNE. I SHRI MAHENDREA RAJARAM VITKAR ,AGE : 51 YEARS, OC C: BUSINESS , R/ AT : VELTHIKA NAGAR KAVERI, NAGAR POLICE LINE ROAD, THER GAON, CHINCHWAD, PUNE 411033, DO HEREBY STATE ON SOLEMN A FFIRMATION THAT: 22 I AM RESIDING ON THE ABOVE MENTIONED ADDRESS WITH M Y FAMILY . SINCE 2006 I HAD THE BUSINESS UNDER THE NAME AND STYLE OF MEGHALI TRANSPORT AND BRICKS SUPPLIERS OF SELLING BRICKS . FROM THE YEAR 2003 TO 2006 I WAS WORKING IN THE OFFICE OF SHRI SANJAY JAIN. I HAVE DONE MY EDUCATION UPTO 8 TH CLASS ONLY . I SAY THAT SHRI SANJAY JAIN WHEN WAS IN DELHI, CALL ED UP AND SAID THAT SHRI GANPAT MURKUTE WOULD COME TO THE OFFICE A ND AT THAT TIME YOU GO WITH HIM TO MAHALUNGE AND EXECUTE A SALE DEED IN RE SPECT OF THE PROPERTY OF SHRI KIRLOSKAR IN THE NAME OF YOURSELF AND SHRI MURKUTE AND ALSO THAT HE TOLD ME TO ISSUE CHEQUES FROM MY ACCOUNT IN SEVAVIK AS BANK AND THAT HE WOULD ARRANGE TO DEPOSIT THE AMOUNT IN THE ACCOUNT . I SAY THAT ACCORDINGLY I WENT WITH SHRI MURKUTE TO MAHALUNGE AND EXECUTED THE SALE DEED ON 16 TH MAY 2005 AND ON 20 TH MAY 2005 WE GOT THE SAME REGISTERED IN OUR NAME AND FROM MY ACCOUNT IN SEVA VIKAS BANK I ISSUED THREE CHEQUES DATED 25/5/2005 AND 20/6/2005 AMOUNTING TO TOTAL AMOUNT O F RS. 55 LAKHS ONLY. AS SHRI JAIN HAD TOLD ME I HAD ISSUED CHEQUES TO MR . KIRLOSKAR FROM MY ACCOUNT IN SEVA VIKAS BANK BUT SHRI JAIN HAD NOT DEPOSITED THE AMOUNT IN MY ACCOUNT AND SO THE CHEQUES RETURNED DI SHONOURED. THEREAFTER AFTER THE RETURN OF SHRI JAIN FROM DELHI , THERE WERE TALKS BETWEEN SHRI MURKUTE AND SHRI JAIN REGARDING THE PA YMENT TO BE MADE TO SHRI KIRLOSKAR AND AT THAT TIME SHRI JAIN TOLD MR. MURKUTE THAT THE MONEY CANNOT BE ARRANGED FOR AND AT THAT TIME SHRI JAIN T OLD THAT EVEN HE DOES NOT WANT THE MAHALUNGE LAND OF SHRI KIRLOSKAR AND T HAT I SHOULD GO WITH MR. MURKUTE AND THE LAND PURCHASED IN MY NAME SHOUL D BE TRANSFERRED IN THE NAME OF MR. MURKUTE. AND SO I WENT TO HOTEL RAD HIKA AT AUNDH TO MEET MR. MURKUTE AND TOLD MR. MURKUTE THAT THE LAND PURC HASED IN MY NAME HAS TO BE TRANSFERRED IN YOUR NAME. AT THAT TIME SH RI MURKUTE TOLD ME THAT FOR THAT I WOULD HAVE TO PAY A STAMP DUTY OF RS.5,0 0,000/- AND SO INSTEAD OF THE SALE DEED ON 15 TH JUNE, 2005, HE GOT A POWER OF ATTORNEY MADE AND ON THE SAME DAY I.E. 15 TH JUNE 2005 I ALONG WITH MR. MURKUTE WENT TO THE SUB REGISTRAR OFFICE AT BANER AND GOT THE POWER OF ATTORNEY EXECUTED AND REGISTERED FROM ME IN THE NAME OF SHRI MURKUTE AND THAT THE COMPLETE RESPONSIBILITY OF THE SAID ENTIRE TRANSACTION SHALL BE ON MR. MURKUTE AND THAT THE ENTIRE SALE CONSIDERATION WOULD BE PAID BY MR. MURKUTE AND THAT ALL THE PROFITS AND LOSS ARISING OUT OF IT SHALL BE THE RESPONSIBILITY OF MR. MURKUTE. I SAY THAT THE RESPONSIBILITY AND THE PROF IT AND LOSS ARISING OUT OF THE ENTIRE ABOVE TRANSACTION WAS THAT OF SHRI MURKU TE ALONE AND HE SHALL BE RESPONSIBLE FOR THE SAME SOLELY AND SO THE DETAI LS OF THE SAID TRANSACTION WAS NOT SHOWN IN MY INCOME TAX RETURNS AND THERE WAS NO REASON FOR SHOWING THE SAME. THEREAFTER IN JUNE 2006 SHRI MURKUTE AGAIN CALLED M E UP AND TOLD ME THAT THE SAID LAND HAS BEEN SOLD TO RIVERVIEW PR OPERTIES PVT LTD., AND THAT RIVERVIEW PROPERTIES PVT. LTD., HAS ISSUED A C HEQUE OF HALF OF THE CONSIDERATION AMOUNT IN MY NAME AND FOR THAT I WOUL D HAVE TO OPEN AN ACCOUNT IN UNITED WESTERN BANK AND ACCORDINGLY MR. MURKUTE MADE ME OPEN AN ACCOUNT IN UNITED WESTERN BANK AND MADE ME SIGN ON THE CHEQUES BOTH IN THE FRONT AND AT THE BACK SIDE AND AGAIN TOLD ME THAT THE COMPLETE RESPONSIBILITY OF THE SAID TRANSACTION SHA LL BE SOLELY HIS (MR. MURKUTE). I SAY THAT I HAVE NOT INVESTED ANY AMOUNT NOR HAVE I RECEIVED ANY AMOUNT IN ABOVE MAHALUNGE LAND SALE AS WELL AS PURC HASE TRANSACTION. BY THIS AFFIDAVIT I WISH TO BRING TO YOUR NOTICE CE RTAIN IMPORTANT POINTS FOR CONSIDERATION.: 1. I HAVE NOT GIVEN ANY AMOUNT DURING THE PURCHASE OF THE LAND AT MAHALUNGE BELONGING TO MR. KIRLOSKAR. 23 2. IF FOR THE PURCHASE OF SAID LAND, I HAD NOT PAID A NY AMOUNT AND WITHOUT PAYING I WAS SUPPOSED TO RECEIVE CONSIDERAT ION, I WOULD HAVE NOT GIVEN ANY POWER OF ATTORNEY TO MR MURKUTE. IT MEANS SINCE I HAD NOT GIVEN ANY AMOUNT AND WAS NOT GOING TO RECEIVE ANY CONSIDERATION I GAVE POWER OF ATTORNEY TO MR MU RKUTE WHO USED THE SAME FOR SALE DEED IN THE NAME OF RIVERVIE W PROPERTIES PVT LTD. 3. EARLIER I HAD AN ACCOUNT IN SEVA VIKAS BANK AND JAN TA SAHAKARI BANK AND HAD I GOTTEN ANY CHEQUES I COULD HAVE DEPOSITED IN THESE TWO ACCOUNTS OF MINE AND FOR THA T THERE WAS NO NEED FOR ME TO OPEN ANOTHER ACCOUNT IN UNITED WE STERN BANK AND THAT MR. MURKUTE HAD TAKEN MY SIGNATURES ON THE CHEQUES AND MISUSED THE SAID CHEQUES AND WITH THOSE CHEQUES MR. MURKUTE HAD ISSUED CHEQUES TO DIFFERENT PEOPLE AND WITHDRAWN THE MONEY FROM MY ACCOUNT. MOREOVER A VERY IMPORTAN T POINT IN THIS RESPECT IS THAT TODAY THE SAID BANK ACCOUNT IS CLOSED AND FOR CLOSING THE SAID ACCOUNT I NEVER GAVE ANY APPLICATI ON NOR HAVE I SIGNED ON ANY APPLICATION NOR DOES THE APPLICATION BEAR MY SIGNATURE. 4. I SAY THAT THE SAID LAND IS AROUND ~3 ACRES AND THA T FOR DOING THE SAID HUGE LAND TRANSACTION I HAVE NEVER MET THE LAND OWNER I.E. MR. KIRLOSKAR AND THAT I HAVE ALSO NOT MET THE LAND PURCHASERS AND OWNERS OF RIVERVIEW PROPERTIES PVT. LTD. SHRI MURKUTE HAS USED THE POWER OF ATTORNEY GIVEN TO HIM AND DONE THE SAID TRANSACTION WITH RIVERVIEW PROPERTIES PVT. LTD AND THAT TOOK THE CHEQUE STANDING IN MY NAME AND DEPOSITED T HE SAME IN UNITED WESTERN BANK AND ALSO ISSUED DIFFERENT CHEQU ES TO DIFFERENT PEOPLE. 5. SHRI MURKUTE WHILE EXECUTING THE POWER OF ATTORNEY FROM ME, TOOK ALL THE RIGHTS OF THE SAID LAND AND ALSO ALL P OWERS TO RECEIVE THE CONSIDERATION / MONIES AND STILL WHILE SELLING THE LAND TAKEN THE CHEQUES HAVING MY NAME AND UTILIZED ALL THE BLA NK CHEQUES SIGNED BY ME AND ENJOYED / USED THE AMOUNT OF CONSI DERATION. 6. MY INCOME TAX OFFICER HAD CALLED FOR THE DETAILS OF THE INCOME OF SHRI MURKUTE AND EXCEPT HIS INCOME TOOK EVERYTHING ELSE AS MY INCOME. IN THAT MR. MURKUTE HAD SHOWN LESS INCOME F OR HIM AND MORE INCOME FOR ME. MY INCOME TAX OFFICER ON 8/12/2 008 CALLED ME AND INQUIRED ABOUT THE SAID TRANSACTION AND TOOK MY STATEMENT. HE SHOWED ME THE INCOME TAX RETURN OF MR . MURKUTE AND TOLD THAT ONLY EXCEPT HIS NET INCOME EVERYTHING ELSE WOULD BE CONSIDERED AS MY INCOME .1 TOLD HIM THAT THE SAI D ENTIRE TRANSACTION AND THE INCOME FROM THAT TRANSACTION IS ENTIRELY OF MR. MURKUTE AND NOT MINE. ON THE TELLING OF MR. SAN JAY JAIN, I HAD DONE THE LAND PURCHASE AND THE POWER OF ATTORNE Y ALSO WAS EXECUTED IN FAVOR OF MR. MURKUTE AS PER THE DIRECTI ON AND INSTRUCTION OF SHRI JAIN. 7. IF WITHOUT ANY INVESTMENT, HAD I GOT SO MUCH PROFIT THEN I WOULD HAVE SURELY INVESTED IN SOMEWHERE AND WOULD HAVE DO NE THE BUSINESS OF SELLING AND PURCHASE OF LAND WITH MORE VIGOR BUT IT IS NOT SO , ACTUALLY AFTER 2007 I HAVE NOT DONE ANY TR ANSACTION OF PURCHASE AND SALE OF LAND AND NOR HAVE I DONE ANY I NVESTMENT OF ANY NATURE. 8. I HAVE NOT INVESTED / SPENT / GIVEN ANY AMOUNT FOR THE PURCHASE OR SALE OF THE SAID LAND. THE SAID SALE TRANSACTION HAS BEEN DONE WITH THE USE OF POWER OF ATTORNEY BY SHRI MURKUTE T HAT IT IS A 24 BENAMI TRANSACTION AND THE TRANSACTION IS SOLELY OF SHRI MURKUTE AND DONE BY HIM ONLY, IN THE STATEMENT RECORDED ON OATH BEFORE THE INCOME TAX OFFICER, SHRI ANPAT MURKUTE HAD TOLD THAT SHRI VITKAR( I.E. MYSELF) HAD NOT SPENT AN SINGLE RUPEES ( ANY AMOUNT) NOR HAVE DONE ANY EFFORTS AND THAT I WAS NOT AWARE OF ANY PERSONS INVOLVED IN THE SALE AND PURCHASE OF THE SA ID PROPERTY AND TRANSACTION. 9. ON 26/3/2010 IN PRESENCE OF THE INCOME TAX AUTHORIT Y WARD NO . 9 (4) I CONDUCTED A CROSS EXAMINATION OF SHRI GANPAT MURKUTE AND FOR QUESTION NO. 4 HE TOLD THAT HE WAS INTRODUCED TO MR. VITKAR BY SHRI JAIN. AND THAT ON THE ASSURANCE OF SHRI JAIN, HE HAD DONE THE TRANSAC TION WITH MR. VITKAR. SHRI MURKUTE ALSO TOLD THAT HE WAS NOT AWARE OF THE FINANCIAL CAPACITY / POSITION OF SHRI VITKAR AND THAT HE DID NOT KNOW THAT IF MR. VITKAR WAS CAP ABLE OF ENTERING INTO SUCH A HUGE TRANSACTION . TAKING INTO CONSIDERATION ALL THE ABOVE ASPECTS, IT IS CLEAR THAT SHRI MURKUTE TOOK ADVANTAGE OF MY INNOCENCE/IGNORAN CE AND TOOK MY SIGNATURE AND USED THOSE PAPERS AND TOOK CO MPLETE ADVANTAGE OF THE SAID TRANSACTION FOR HIMSELF ONLY. MR. MURKUTE DID NOT SHOW THE RECEIPT OF THE COMPLETE INCOME IN HIS NAME BUT HAS SHOWN IN PART, AND THEREBY CHEATED ME. I HAVE N OT RECEIVED ANY INCOME OUT OF THIS TRANSACTION HENCE THE SAME N EEDS TO BE DEDUCTED FROM MY INCOME AS ASSESSED BY MY I NCOME TAX OFFICER. CONSIDERING THE STATEMENT ON OATH MADE BY ME AND MR. MURKUTE AND ALSO THE STATEMENTS ON CROSS EXAMINATION OF MR. MURKUTE BEFORE MY ASSESSING OFFICER, THE ASSESSING OFFICER OF MR. MURKUTE HAS ASSESSED FULL INCOME OF THE TRANSACTION IN REASSESSMENT OF MR. MURKUTE AS HIS INCOME. THIS MEA NS INCOME TAX DEPARTMENT HAS ACCEPTED THAT INCOME OF THIS TRA NSACTION IS NOT MY INCOME, THEREFORE INCOME FROM THE SAID SALE TRANSACTION NEEDS TO BE DELETED FROM MY INCOME. THE ABOVE INFORMATION IS TRUE AND CORRECT TO THE BE ST OF MY KNOWLEDGE, INFORMATION AND BELIEF AND IF THE SAME . IS FOUND TO BE FALSE, THEN I SHALL BE PUNISHABLE UNDER INDIAN P ENAL CODE . THE ABOVE INFORMATION IS TRUE AND CORRECT AND I HAV E SIGNED HEREUNDER TODAY. DATED: MAHENDRA RAJARAM VITKAR PLACE : AFFIANT TRANSLATED FROM THE MARATHI AFFIDAVIT OF MAHENDRA R AJARAM VITKAR BY THE UNDERSIGNED ADVOCATE. SD/-- ADV. JANAKI DAVE. (SANAD NO.MAH/1216/99) 25. REFERRING TO THE CONTENTS OF THE AFFIDAVIT, HE SUBMITTED THAT ASSESSEE HAD NOT PAID ANY AMOUNT FOR PURCHASE OF LAND N OR HAS RECEIVED ANY AMOUNT ON ITS SALE. HE THEREFORE SUBMITTED THAT NO 25 INCOME ON ACCOUNT OF SALE OF LAND WAS RECEIVED BY HIM. HE THEREFORE SUBMITTED THAT THE ADDITION BE DELETED. 26. ON THE ISSUE OF UNEXPLAINED DEPOSITS, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LD.CIT(A) AND SUBMITTED THAT OUT O F THE DEPOSITS OF RS.64,81,248/- ON ACCOUNT OF UNEXPLAINED DEPOS ITS, AN AMOUNT OF RS. 50 LACS WAS EXPLAINED TO HAVE BEEN RECEIVED TOWARDS THE ADVANCE OF SALE OF PROPERTY. HE THEREFORE SUBMITTED T HAT WHEN THE ASSESSEE HAS EXPLAINED THE SOURCE OF DEPOSITS, LD CI T(A) HAS RIGHTLY DELETED THE ADDITION. 27. BEFORE US, LD.D.R. TOOK US THROUGH THE FINDINGS OF AO AN D LD.CIT(A) AND SUBMITTED THAT IN THE ABSENCE OF ANY EXPLANA TION, AO WAS FULLY JUSTIFIED IN TREATING THE DEPOSITS MADE IN THE BANK ACCOUNT AS UN-EXPLAINED AND THAT LD.CIT(A) ERRED IN DELE TING THE ADDITION OF RS.50 LACS AND SUBMITTED THAT THE ORDER OF AO BE UPHELD. ON THE ISSUE OF TAXING OF CAPITAL GAINS, HE SUPPORT ED THE ORDER OF LD.CIT(A). 28. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS W ITH RESPECT TO ALLEGED UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. WE FIND THAT WHILE GRANTING RELIEF TO THE ASSESSE E. CIT(A) HAS GIVEN A FINDING THAT OUT OF THE TOTAL DEPOSITS OF RS 64 .31 LACS, ASSESSEE HAD GIVEN THE EXPLANATION WITH RESPECT TO RS 50 LAKHS AN D THAT NO SUBMISSIONS WERE MADE BY THE AO IN THE REMAND PROCEEDINGS FOR THE BALANCE. IN SUCH A SITUATION HE HAS HELD THE DEPOSIT TO THE EXTENT OF RS 50 LAKHS EXPLAINED AND HAD C ONFIRMED THE ADDITION FOR BALANCE AMOUNT OF RS 14,81,248. BEFORE US REVENUE HAS NOT POINTED OUT ANY FALLACY IN THE FINDINGS O F 26 LD.CIT(A). IN SUCH A SITUATION, WE DO NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS, THE GROUNDS OF REVENUE ARE DISMISSED. 29. ON THE ISSUE OF MERITS OF ADDITION SINCE THE ISSUE IN T HE CASE OF SHRI M.R. VITKAR AND GANPAT MURKUTE ARE INTER-CONNECT ED, WE PROCEED TO DISPOSE OF THE SAME BY A CONSOLIDATED ORDER. 30. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ISSU E RELATES TO SALE OF PIECE OF LAND SITUATED AT VILLAGE MAHALUNGE. THE ISSUE WHICH ARISES IN THE PRESENT SET OF APPEALS IS THE ASSESSA BILITY OF INCOME ARISING FROM SALE OF THE SAID LAND. HOWEVER, IN ORDER TO ADJUDICATE THE SAME, IT IS NECESSARY TO LOOK INTO THE FACT UAL ASPECTS CONNECTING PURCHASE OF THE LAND. THE ASSESSEE SHRI GANP AT MUKUNDRAO MURKUTE CLAIMS THAT HE HAD JOINTLY PURCHASED THE SAID LAND WITH SHRI MAHENDRA R. VITKAR FROM M/S. ABHI AGRO TRUST AND M/S. SANGRAM AGRO TRUST. THE TOTAL CONSIDERATION WAS R S.2.20 CRORES TO BE PAID VIDE TWO SEPARATE AGREEMENTS DATED 20.05.2005. THE FIRST TRANSACTION FOR PURCHASE OF PROPERTY WAS PAYME NT OF RS.20 LAKHS EACH TO THE TWO TRUSTS, WHO OWNED PROPERT Y. INITIALLY CHEQUE WAS GIVEN BY SHRI MAHENDRA R. VITKAR BUT THE SAM E COULD NOT BE HONOURED AND THEREAFTER, SHRI GANPAT MUKUNDRAO MURKUTE PAID RS.20 LAKHS EACH TO THE TWO TRUSTS. NO FURTHER PAY MENT WAS MADE TO THE TRUSTS. SUBSEQUENTLY, THERE WAS AN AGREE MENT TO SELL THE SAID LAND TO GURUMUKH SUKHWANI AND GHANSYAM SUKHWA NI, AGAINST WHICH SUM OF RS.20 LAKHS WAS RECEIVED AS EARNEST MONEY ON 10.06.2005. HOWEVER, THE SAID SALE COULD NOT BE COMPLET ED AND THE SAME WAS CANCELLED. MEANWHILE, SHRI GANPAT MUKUNDRAO MURKUTE RECEIVED POWER OF ATTORNEY FROM SHRI MAHENDRA R . VITKAR 27 FOR COMPLETING SALE TRANSACTION. ON A LATER DATE I.E. 28.03.2 006 SHRI GANPAT MUKUNDRAO MURKUTE ENTERED INTO AN AGREEME NT OF SALE WITH M/S.RIVERVIEW PROPERTIES PVT. LTD. FOR TOTAL CONSIDE RATION OF RS.4.85 CRORES. WHILE OFFERING INCOME FROM THE SAID TRANSAC TION, SHRI GANPAT MUKUNDRAO MURKUTE DECLARED HALF SHARE OF SALE CONSIDERATION AT RS.2.42 CRORES AND AFTER REDUCING THE CO ST OF ACQUISITION AND IMPROVEMENTS AND DEVELOPMENT COST AND ALS O PAYMENT OF COMMISSION FOR THE SALE TRANSACTION, COMPUTED T HE NET SHORT TERM CAPITAL GAINS AT RS.48,23,210/-. IT MAY BE POIN TED OUT HEREIN ITSELF THAT THOUGH SHRI GANPAT MUKUNDRAO MURKUTE OFFERED HALF SHARE OF SALE CONSIDERATION, BUT HE DEDUCTED TOTAL COS T OF ACQUISITION (PARTLY PAID), IMPROVEMENT AND COMMISSION FROM HIS SHARE AND OFFERED THE BALANCE TO TAX. THE ASSESSEE SHR I GANPAT MUKUNDRAO MURKUTE DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS HAD ON THE OTHER HAND, RE-WORKED THE INCOM E FROM SHORT TERM CAPITAL GAINS AT RS.64,81,248. THE INCOME WAS DECLARED AS SHORT TERM CAPITAL GAINS BUT PURCHASE TRANSACTION W AS NOT COMPLETE, AS BALANCE CONSIDERATION WAS NOT PAID. THE PLEA OF OTHER ALLEGED CO-OWNER SHRI MAHENDRA R. VITKAR IS THAT HE HAD N O FUNDS TO MAKE THE AFORESAID INVESTMENT FOR PURCHASE OF LAND TO THE EXTENT OF RS.2.20 CRORES. THE TRANSACTION WAS COMPLETELY DONE B Y SHRI GANPAT MUKUNDRAO MURKUTE AND EVEN THE INITIAL EARNEST M ONEY FOR PURCHASING THE SAID PROPERTY WAS PAID BY HIM AND EV EN THE SALE CONSIDERATION WAS RECEIVED BY HIM. HE ADMITS THAT A BAN K ACCOUNT WAS OPENED IN HIS NAME, WHEREIN SOME MONEY WAS DEPOSITED BUT ALL THAT MONEY WAS WITHDRAWN FROM THE SAID BANK ACCOUNT. IN THIS REGARD, HE ALSO ADMITS TO HAVE SIGNED B LANK CHEQUES AND HANDED OVER THE SAME TO SHRI GANPAT MUKU NDRAO MURKUTE. SHRI MAHENDRA R. VITKAR IN THIS REGARD HAS FILED AN 28 AFFIDAVIT BEFORE US, WHICH THOUGH IS SELF-SERVING IS IN SUPPORT OF HIS CONTENTIONS VIS-A-VIS TRANSACTIONS. 31. NOW, LOOKING AT THE SEQUENCE OF TRANSACTIONS, WE FIND T HAT SHRI GANPAT MUKUNDRAO MURKUTE WAS THE ONE WHO INITIATE D PURCHASE TRANSACTION BY MAKING THE PAYMENTS OUT OF HIS BANK ACCOUNT AND THAT PAYMENT HE CLAIMS TO BE HIS COST OF AC QUISITION. HE DOES NOT CLAIM IT TO BE PAYMENT ON JOINT ACCOUNT. T HEREAFTER, HE ALSO HAS CLAIMED DEVELOPMENT EXPENSES ENTIRELY TO HIS ACCOUNT AND EVEN COMMISSION ON ACCOUNT OF SALE TRANSACTION AS DE DUCTIBLE FROM HIS SHARE OF CAPITAL GAINS. THE ISSUE OF NON-ALLOWABILITY OF DEVELOPMENT EXPENSES AND COMMISSION HAS ALREADY BEEN DEA LT WITH BY US IN THE PARAS HEREIN AND IN THE ABSENCE OF ANY EVID ENCE, THE SAME HAS NOT BEEN ALLOWED IN THE HANDS OF SHRI GANPAT MUKUNDRAO MURKUTE. 32. WE FIND THAT SHRI M.R. VITKAR IN HIS SWORN AFFIDAVIT HAS INTER- ALIA SUBMITTED THAT HE HAS NOT INVESTED ANY AMOUNT FOR THE PURCHASE OF LAND. HE HAS FURTHER SUBMITTED THAT HE WAS FORCED TO OPEN BANK ACCOUNT AND PUT SIGNATURES ON BLANK CHEQUES AND MURKUTE MISUSED THE CHEQUES AND HAD WITHDRAWN THE AMO UNT FROM HIS ACCOUNT. HE FURTHER SUBMITTED THAT THE BANK A CCOUNT WITH UNITED WESTERN BANK HAS BEEN CLOSED AND HE HAD NE VER MADE AN APPLICATION FOR ITS CLOSURE. THE CHEQUES ISSUED BY M/S. RIVERVIEW PROPERTIES PVT. LTD., WERE TAKEN BY GANPAT MUR KUTE AND DEPOSITED IN THE UNITED WESTERN BANK AND GANPAT MURKUT E ISSUED THE CHEQUES TO DIFFERENT PERSONS WITHOUT THE KNOWLEDGE OF THE MAHENDRA VITKAR. BEFORE US, NOTHING WAS BROUGHT ON REC ORD TO DEMONSTRATE THAT THE CONTENTS OF THE AFFIDAVIT ARE FALSE. THE 29 APPEALS OF GANPAT MURKUTE AND MAHENDRA VITKAR WERE H EARD TOGETHER. WE FIND THAT LD.CIT(A) WHILE DECIDING THE ISSUE IN THE CASE OF MR. GANPAT MURKUTE HAS NOTED THAT M.R. VITKAR WAS ONLY A NAME LENDOR FOR THE TRANSACTION AND THE ENTIRE TRANSA CTION WAS CARRIED OUT BY THE GANPAT MURKUTE AND THAT GANPAT M URKUTE WAS SOLELY RESPONSIBLE FOR THE ENTIRE TRANSACTION AND THE ASS ESSEE WAS ONLY INSTRUMENTAL IN CARRYING OUT THE TRANSACTION IN CON SULTATION WITH SHRI SANJAY JAIN. HE HAS FURTHER GIVEN A FINDING THAT BASED ON THE STATEMENT RECORDED U/S 131 OF M.R. VITKAR AND C ONSIDERING THE TOTALITY OF THE MATERIAL ON RECORD, IT WAS GANAPAT MUR KUTE WHO CARRIED OUT THE TRANSACTION AND WAS THE SOLE BENEFICIARY. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES WHERE THE TRANS ACTION HAS BEEN CONDUCTED BY SHRI GANPAT MUKUNDRAO MURKUTE AND ALSO AS FINANCIAL POSITION OF SHRI MAHENDRA R. VITKAR WAS NOT SOUND TO MAKE INVESTMENT OF EVEN RS.10 LAKHS, AS IS EVIDENT FROM H IS BANK POSITION AND IN VIEW OF THE DECLARATION OF ENTIRE COST OF ACQ UISITION BY SHRI GANPAT MUKUNDRAO MURKUTE IN HIS HANDS, WE HOLD T HAT TRANSACTION RELATES TO GANPAT MURKUTE AND THE SALE CO NSIDERATION IN ENTIRETY IS TO BE CONSIDERED IN HIS HANDS IN ORDER TO C OMPUTE INCOME FROM SHORT TERM CAPITAL GAINS. IN SUCH A SITUATIO N, WE ARE OF THE VIEW THAT LD.CIT(A) HAS RIGHTLY HELD THE ENTIRE AM OUNT OF CAPITAL GAINS TO BE TAXABLE IN THE HANDS OF GANPAT MURKU TE. SINCE THE ENTIRE GAINS ARE HELD TO BE TAXABLE IN THE HANDS OF G ANPAT MURKUTE, WE HOLD THAT NO PORTION OF CAPITAL GAINS ARE TAX ABLE IN THE HANDS OF MAHENDRA VITKAR. THUS, THE GROUND IN CASE OF GANPAT MURKUTE IS DISMISSED AND IN THE CASE OF MAHENDRA V ITKAR IS ALLOWED. 30 33. ON THE ISSUE OF RE-OPENING, WE FIND MERIT IN THE SUBM ISSIONS OF LD.D.R. LD.D.R. HAS POINTED OUT THAT IN THE CAPITAL GAINS WORKING, ASSESSEE HAS SHOWN DIFFERENT ISSUES OF CAPITAL GAI NS AND HAS NOT SHOWN THE FULL VALUE OF CONSIDERATION RECEIVED ON S ALE OF LAND. FURTHER, SINCE THE ORIGINAL INTIMATION WAS U/S 143(1) O F THE ACT AND NOT U/S 143(3) OF THE ACT, WE ARE OF THE VIEW THA T AO WAS FULLY JUSTIFIED IN RESORTING TO RE-OPENING OF ASSESSMENT. FURTHER THE CASE LAWS RELIED UPON BY LD.A.R. BEING DISTINGUISHABLE ON FACTS, ARE NOT APPLICABLE TO THE PRESENT CASE. 34. WITH RESPECT TO THE EXPENDITURE ON DEVELOPMENT AND IMPROVEMENT OF LAND AND PAYMENT OF COMMISSION CLAIMED BY GANPAT MURKUTE, WE FIND THAT BEFORE AO AND LD.CIT(A), ASSES SEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE EXPENDITURE INCUR RED ON ACCOUNT OF DEVELOPMENT OF LAND AS WELL AS PAYMENT OF COMM ISSION. CONSIDERING THE AFORESAID FACTS, WE FIND NO REASON TO INTERFE RE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF ASSESSEE IN THE CASE OF GANPAT MURKUTE ARE DISMISSED. 35. TO SUM UP, THE APPEAL OF THE ASSESSEE IN ITA NO.2141/PUN/2013 AND THE APPEAL OF THE REVENUE IN I TA NO.1213/PUN/2010 ARE DISMISSED AND THE APPEAL OF TH E ASSESSEE IN ITA NO.1208/PUN/2010 IS ALLOWED. ORDER PRONOUNCED ON 2 ND DAY OF FEBRUARY, 2018. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ' / JUDICIAL MEMBER #' / ACCOUNTANT MEMBER PUNE; DATED : 2 ND FEBRUARY, 2018. YAMINI 31 $%&'()(& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. 7. 8 CIT(A)-V, PUNE. CIT-V, PUNE. CIT(A)-II, PUNE. CIT-II, PUNE. '#$ %%&',) &', / DR, ITAT, A PUNE; $-.// GUARD FILE. / BY ORDER , // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE