Shri Maheshbhai Dayabhai Mistry, Baroda V. The Income tax Officer,Ward-5(2), Baroda

ITA 1237/AHD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50928 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Initiation of penalty proceedings
• Section: 143(3); 234B

Judgement Text

, , . .. . . .. . , , , , ! !! ! . .. .'# !'# '# !'# '# !'# '# !'# , $ $ $ $ % % % % IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD BEFORE HONBLE SHRI D.K.TYAGI, J.M. & HONBLE SHRI A.MOHAN ALANKAMONY, A.M.) ! ! ! !. ITA NO. 1237/AHD./2011 : # &'- 2007-2008 SHRI MAHESHBHAI D. MISTRY, BARODA VS- I.T.O., WARD-5(2), BARODA (PAN : ADUPM 3258M) (*+ /APPELLANT) ( ,*+ /RESPONDENT ) *+ - . / APPELLANT BY : MS.URVASHI SHODHAN ,*+ - . / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. /#0 - 1$ / DATE OF HEARING : 19/10/2011 2'& - 1$ / DATE OF PRONOUNCEMENT : 18/11/2011 3 3 3 3 / ORDER PER SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V, BARODA IN AP PEAL NO.CAB(A)/V/124/ 09- 10 DATED 17.02.2011 FOR THE ASSESSMENT YEAR 2007-20 08 PASSED UNDER SECTION 250 R.W.S. 143(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE, IN THE GROUNDS OF APPEAL, HAD OBJE CTED TO THE APPELLATE ORDER OF THE LD. CIT (A) IN AN ILLUSTRATIVE AND NARRATIVE MA NNER. IN THIS CONNECTION, THE ASSESSEES SPECIFIC ATTENTION IS INVITED TO THE RUL E 8 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963 WHEREIN IT HAS BEEN PRESCRIBE D UNDER THE CAPTION CONTENTS OF MEMORANDUM OF APPEAL THAT 8. EVERY MEMORANDUM OF APPEAL SHALL BE WRITTEN IN ENGLISH AND SHALL SET FORTH, CONCISELY AND UNDER DISTINCT HEADS, THE GROU NDS OF APPEAL WITHOUT ANY ARGUMENT OR NARRATIVE; AND SUCH GROUNDS SHALL BE NUMBERED CONSECUTIVELY . ITA NO. 1237-AHD-11 2 2.1. TURNING TO THE ISSUES ON HAND, TO BE PRECISE, THE GRIEVANCES OF THE ASSESSEE ARE THREE-FOLDS, NAMELY - (1) THE LD. CIT (A) HAD ERRED IN CONFIRMING THE ACTION OF THE AO IN TAXING PROCEEDS RECEIVED ON SALE OF LAND AS INCOME FROM OTHER SOUR CES INSTEAD OF ACCEPTING LONG TERM CAPITAL LOSS (LTCL) AS COMPUTED ON THE SA ID SALE; (2) LEVY OF INTEREST U/S 234A AND U/S 234B OF THE ACT W AS NOT JUSTIFIABLE AND (3) INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS NOT JUSTIFIABLE. 2.2 WITH REGARD TO GROUND NO.2, VIZ., CHARGING OF I NTEREST U/S 234A AND 234B OF THE ACT, WE WOULD LIKE TO REITERATE THAT THIS GROUND IS NOT MAINTAINABLE AS CHARGING OF INTEREST UNDER THESE SECTIONS IS MANDATORY AND CONS EQUENTIAL IN NATURE AND, THEREFORE, GROUND NO.2 IS DISMISSED AS NOT MAINTAINABLE. GROU ND NO.3 THAT THE INITIATION OF PENAL PROCEEDINGS U/S 271(1)(C) OF THE ACT IS ALSO NOT ENTERTAINABLE AS THE INITIATION OF SAID PROCEEDING IS IN ITS INFANCY. 2.3 THUS, THE LONE GROUND SURVIVES FOR ADJUDICATION IS WITH REGARD TO THE GROUND NO.1 CITED SUPRA . 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E FOR THE AY UNDER CONSIDERATION FURNISHED HIS RETURN OF INCOME, DECLA RING A TOTAL INCOME OF RS.1,55,630/- WHICH WAS, INITIALLY, PROCESSED U/S 143(1) OF THE A CT AND, SUBSEQUENTLY, SUBJECTED TO REGULAR ASSESSMENT U/S 143(3) OF THE ACT. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, I T WAS NOTICED BY THE LD. AO THAT THE ASSESSEE HAD CLAIMED LTCL OF RS.14,410/-. ON B EING QUERIED, IT WAS EXPLAINED THAT A BANAKAHT WAS EXECUTED BY HIM ON 15.7.1988 WI TH A COST OF RS.7.80 LAKHS AND THAT THE SAID PROPERTY WAS SOLD FOR RS.25 LAKHS ON 2.6.2006. IN SUPPORT OF LTCL, THE ASSESSEE HAD FURNISHED A COPY OF VDIS DECLARATION I N WHICH HE DECLARED RS.7.08 LAKHS RELATED TO THE AYS 1988-89 TO 97-98 WHICH WAS INVES TED IN RAJDEEP CORPORATION FOR ACQUIRING AGRICULTURAL LAND. TO SUBSTANTIATE IT, A N UNREGISTERED BANAKHAT DT.15.7.1988 AND SECOND UNREGISTERED BANAKHAT DT.30.10.96 FILED WHICH WERE INCIDENTALLY IN FAVOUR RAJDEEP CORPORATION CONSISTING OF TWO PARTNERS, NAM ELY, MAHESHBHAI DAHYABHAI ITA NO. 1237-AHD-11 3 MISTRY AND DILIPHAI VADILAL SHAH. WHEN THE ASSESSEE WAS SPECIFICALLY REQUIRED TO PROVE THE CLAIM OF ACQUISITION OF LAND IN HIS INDIV IDUAL CAPACITY AND RECEIPT OF SALE CONSIDERATION OF RS.25 LAKHS, THE ASSESSEE CAME UP WITH A THEORY THAT THE BANAKHAT WAS MADE IN FAVOUR OF HIM INDIVIDUALLY AS PROPRIETOR OF RAJDEEP CORPORATION, HOWEVER, THROUGH MISTAKE, IT WAS MENTIONED AS PARTNER OF THE SAID FIRM AND THAT THERE WAS NO PARTNERSHIP FIRM IN EXISTENCE. SINCE THE ACQUISITI ON OF LAND WAS THROUGH A VALID BANAKHAT AND IRREVOCABLE POWER OF ATTORNEY [POA] DA TED 15.7.1988 AND ONCE ONE HOLD RIGHT TO DEAL WITH THE LAND IN ANY MANNER, IT TANTA MOUNT TO OWNERSHIP. IT WAS, FURTHER, ARGUED THAT HENCE THE BENEFIT OF INDEXATION WAS VAL IDLY CLAIMED TO BE ACQUIRED ON 15.7.1988 AND THAT THE SALE VALUE OF RS.25 LAKHS WA S DULY CREDITED TO HIS BANK ACCOUNT FOR WHICH NECESSARY BANK PASS BOOK EVIDENCE WAS PRO DUCED. WHEN THE ASSESSEE WAS SPECIFICALLY POINTED OUT THAT THERE WAS NO DOCUMENT ARY EVIDENCE TO PROVE THAT HE WAS IN POSSESSION OF THE SAID LAND AND WHEN IT WAS NOT PURCHASED IN HIS INDIVIDUAL CAPACITY AND ALSO HE FAILED TO ESTABLISH THAT HE WAS THE O WNER OF THE LAND IN HIS INDIVIDUAL CAPACITY, THE ASSESSEE REITERATED HIS EARLIER CLAIM , BUT, FAIRLY CONCEDED THAT THOUGH THE CLAIM OF VARIOUS DOCUMENTS WERE NOT SUFFICIENTLY WI TH HIM AT THE MOMENT. 3.2. AFTER CONSIDERING THE FACTS OF THE ISSUE AND A LSO THE SUBMISSION OF THE ASSESSEE, THE LD. AO HAD OBSERVED IN HIS IMPUGNED ORDER THE F OLLOWING: 4.4STILL THE ASSESSEE FAILED TO JUSTIFY (I) HOW HE POSSESSED THE SAID LAND IN HIS INDIVIDUAL CAPACITY, (II) AND TO PROVE THAT THE SAID LAND WAS ACQUIRED BY HIM INDIVIDUALLY ON 15.7.1988 OR THERE SAID LAND WITH CONSIDERATION OF RS.25 LAKHS AS NO SUPPORTING DOCUMENTS WERE FILED. ALSO NOWHERE IN HIS SUBMISSION, HE HAS GIVEN THE DETAILS AS REQUIRED SUCH AS THE DE TAILS OF LAND SOLD FOR WHICH RS.25 LAKHS WAS RECEIVED BY THE ASSESSEE, NAME AND ADDRESS OF THE PURCHASER AND COPY OF SALE DEED ETC., HE ADMITTED THAT HE HA D GAINED RS.25 LACS BUT THE NATURE OF TRANSACTION AND SOURCES THEREOF WAS NOT E XPLAINED AND JUSTIFIED WITH MATERIAL EVIDENCES, EXCEPT THE BANK STATEMENT. MER E FILING BANK STATEMENT DOES NOT PROVE THAT THE ASSESSEE HAS GAINED RS.25 LAKHS ON SALE OF ANY LAND. TO PROVE SALE OF LAND, PRODUCTION OF DOCUMENTARY EVIDE NCE INCLUDING VALID DEED IS MUST. ASSESSEE HIMSELF HAS FILED CONTRADICTORY SUB MISSION. HE ALSO FAILED HOW AND FROM WHOM HE HAS EARNED RS.25 LAKHS ON RELINQUI SHMENT OF RIGHTS IN THE IMPUGNED LAND & HOW HE IS ELIGIBLE TO CLAIM COST IN DEXATION ON THE BASIS OF THE FACTS NARRATED AND DISCUSSED ABOVE, IT HAS B ECOME VERY CLEAR THAT THE ASSESSEE HAS EARNED INCOME OF RS.25,00,000/- FROM I NCOME FROM OTHER SOURCES DURING THE YEAR UNDER CONSIDERATION. I, THEREFORE, DISALLOW THE ASSESSEES CLAIM ITA NO. 1237-AHD-11 4 OF LONG TERM CAPITAL LOSS OF RS.14,410/- AND CONSID ER THE AMOUNT OF RS.25,00,000/- AS INCOME OF THE ASSESSEE FROM OTHER SOURCES. 4. AGGRIEVED, THE ASSESSEE CARRIED THE ISSUE BEFORE LD. CIT (A) FOR RELIEF. AFTER ANALYZING THE ISSUE IN DEPTH WITH REFERENCE TO VARI OUS MATERIAL FACTS FURNISHED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDING S, THE REMAND REPORT OF THE LD. AO AND THE REJOINDER OF THE ASSESSEE ON THE REMAND REP ORT, THE LD. CIT (A) OBSERVED THE FOLLOWING:: 4.3.THE APPELLANT HAS CLAIMED LONG TERM CAPIT AL LOSS OF RS.14,410/- FOR THE INSTANT AY SHOWING THE SALE CONSIDERATION O F RS.25,00,000/- AND THE COST OF LAND AS PER THE BANAKHAT DATED 15/7/1988 BEING R S.78,07,767/-. IT WAS CLAIMED THAT THE PROPERTY WAS SOLD ON 2/6/2006. IT WAS ALSO MENTIONED THAT THE COST OF PURCHASE HAD ARISEN OUT OF THE AMOUNT DECLA RED IN VDIS OF RS.7,08,000/-. THE APPELLANT HAD ALSO TAKEN ADVANT AGE OF THE INDEXATION AND COMPUTED THE LONG TERM CAPITAL LOSS. 4.3.1. UNDER THE I.T. ACT, FOR COMPUTATION OF CAPIT AL GAIN OF LAND, THE FOLLOWING CONDITIONS NEEDED TO BE SATISFIED: (I) THE ASSESSEE SHOULD BE THE OWNER OF THE CAPITAL ASSET; (II) THE CAPITAL ASSET MUST BE TRANSFERRED BY THE A SSESSEE; (III) SUCH TRANSFER SHOULD TAKE PLACE DURING THE PR EVIOUS YEAR. IF THE AFORESAID CONDITIONS ARE SATISFIED, CAPITAL GAIN OF THE LAND IS TAXABLE IN THE INSTANT AY. IN THE INSTANT CASE, IT IS CLAIMED THAT THE APPELLANT WAS THE OWNER OF THE LAND IN VIEW OF THE BANAKHAT DT. 15/7/ 1988 AND THAT THE ASSET WAS SOLD ON 2/6/2006. HOWEVER, THE FACTS OF THE CASE A ND THE DOCUMENTARY EVIDENCES PRODUCED BEFORE ME CONTRADICT THESE CLAIM S. THE ORIGINAL BANAKHAT DATED 15/7/2008 (SIC) 15/7/1988 WAS IN THE NAME OF THE APPELLANT IN THE CAPACITY OF RAJDEEP CORPORATION. EVEN THE REVISED BANAKHAT DATED 30/10/1996 WAS ALSO IN FAVOUR OF SHRI MAHESHBHAI MISTRY AND SH RI DILIP V SHAH AS PARTNERS OF M/S. RAJDEEP CORPORATION. IT IS ALSO A FACT THAT THERE ARE 4 REGISTERED SALE DEEDS DATED 2/9/1999 WHERE THE RIGH TS OF THE LAND WERE TRANSFERRED ABSOLUTELY IN FAVOUR OF 4 PERSONS BY TH E APPELLANT AND DILIP V SHAH IN THE CAPACITY OF PARTNERS OF THE FIRM M/S.RAJDEEP CORPORATION. THUS, ON 2/9/1999, AS PER THE REGISTERED DOCUMENTS, THE APPE LLANT LEASED TO BE THE OWNER OF THE CAPITAL ASSET. FURTHER, THE SAID LAND WAS T RANSFERRED BY THESE 4 PERSONS TO THE FIRM M/S. NARAYAN ASSOCIATES BY VIRTUE OF T HE SALE DEED DATED 15/12/2004. IN OTHER WORDS, THERE WAS NO TRANSFER OF CAPITAL ASSET FOR THE AY 2007-08 AND NONE AT ALL BY THE APPELLANT DURING THE YEAR. IN RESPECT OF IMMOVABLE PROPERTY, THE SALE DEED IS THE ABSOLUTE E VIDENCE OF THE TRANSFER OF THE CAPITAL ASSET. IT IS COMMON PLACE THAT IT MAKES NO DIFFERENCE WHETHER FULL VALUE OF CONSIDERATION IS RECEIVED IN PREVIOUS YEAR OR IN DIFFERENT YEARS. THE FULL VALUE OF CONSIDERATION IS TO BE TAKEN INTO ACCOUNT IN CALCULATION OF CAPITAL GAINS ITA NO. 1237-AHD-11 5 IN THE YEAR OF TRANSFER. THEREFORE, IN VIEW OF THE SE FACTS, IT IS CLEAR THAT NEITHER THE APPELLANT HAD TRANSFERRED THE IMPUGNED CAPITAL ASSET DURING THE RELEVANT ASSESSMENT YEAR NOR HE WAS THE OWNER OF THE ASSET D URING THE AY 2007-8. THUS, THERE IS NO QUESTION OF COMPUTATION OF CAPITAL GAIN . THE OTHER ISSUE IS THAT RS.25,00,000/- WAS FOUND TO BE DEPOSITED IN THE BAN K ACCOUNT OF THE APPELLANT IN JUNE, 2006 WHICH IS APPARENTLY NOT RELATED TO TH E TRANSACTIONS CONCLUDED IN 1999 OR 2004. IN ANY CASE, THE CAPITAL GAIN COMPUT ATIONS WERE RELEVANT FROM THE POINT OF VIEW OF THE APPELLANT FOR THE AY 2000- 01 WHEN THE LAND WAS TRANSFERRED IN SEPT. 99. BESIDES, THERE ARE OTHER DISCREPANCIES SUCH AS THE TRANSFER TO THE 4 PERSONS IN 1999 WAS FOR RS.14.51 LAKHS AND EVEN IN 2004 THE SAID LAND WAS TRANSFERRED BY THESE 4 PERSONS FOR RS .18.84 LACS. THE SALE CONSIDERATION CLAIMED WAS RS.25 LAKHS. THEREFORE, ANYWAY RS.6.12 LAKHS (25 18.84) WAS NOT IN RELATION TO SALE OF LAND BUT WAS TAXABLE AS INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE AP PELLANT HAD NEVER FURNISHED ANY DOCUMENTS FROM DILIP V SHAH SUPPOSEDL Y THE OTHER PARTNER OF M/S.RAJDEEP CORPORATION SUGGESTING THAT HE WAS NEVE R ASSOCIATED WITH THE LAND AND THAT NO EXPENSES WERE SHARED OR INCURRED BY HIM . NO CONFIRMATIONS WERE FURNISHED FROM THE 4 PERSONS REITERATING THE FACTS AS CLAIMED BY THE APPELLANT. 4.3.2. IN VIEW OF THE ABOVE, THE AO WAS JUSTIFIED IN TAXING THE ENTIRE AMOUNT OF RS.25,00,000/- FOUND DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT AS INCOME FROM OTHER SOURCES. 5. NOT SATISFIED WITH THE OBSERVATIONS OF THE LD. C IT (A), THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE HEARING , THE LD. A R SUBMITTED THAT ON FACTS AND IN LAW THE LD. CIT (A) HAD ERRED TO APPRE CIATE THAT THE ASSESSEE RECEIVED THE AMOUNT COMPRISING OF SALE CONSIDERATION ALONG WITH INTEREST IN RESPECT OF RELINQUISHMENT OF RIGHT IN LAND OWNED AND POSSESSED BY HIM SINCE LONG THAT GAVE RISE TO LTCL; THAT HE OUGHT TO HAVE ACCEPTED THE CLAIM O F THE ASSESSDEE BY QUASHING THE ORDER OF THE LD. AO. THE LD. A.R. FURTHER SUBMITTE D THAT THE LD. CIT (A) HAD, FURTHER, ERRED IN CONFIRMING THE STAND OF THE AO THAT NO TRA NSFER OF CAPITAL ASSET HAD TAKEN PLACE DURING THE YEAR UNDER DISPUTE THOUGH THE SALE CONSI DERATION TOWARDS RELINQUISHMENT OF RIGHT WAS RECEIVED BY THE APPELLANT DURING THE YEAR ; THAT THE AUTHORITIES BELOW HAVE ERRED IN REJECTING THE CLAIM OF THE ASSESSEE OF COM PUTING LTCL FROM THE SALE OF CAPITAL ASSET IN THE YEAR OF RECEIPT OF CONSIDERATION. THE LD. A R ALSO SUBMITTED THAT THE CIT (A) HAD ERRED IN CONFIRMING THE ACTION OF THE AO IN COMPUTING THE SALE CONSIDERATION OF LAND AS INCOME EARNED FROM OTHER SOURCES DURIN G THE YEAR IGNORING THE FACT THAT THE ASSESSEE HAD NEITHER ANY OTHER SOURCE OF EARNING NO R CAPITAL ASSET FROM WHICH SUCH ITA NO. 1237-AHD-11 6 INCOME COULD BE EARNED. THE LD. AR, FURTHER, SUBMI TTED THAT WITHOUT PREJUDICE, THE VIEW OF THE LD. CIT (A) THAT NO TRANSFER OF CAPITAL ASSET HAVING TAKEN PLACE DURING THE YEAR UNDER CONSIDERATION, THE ADDITION OF INCOME IN RESPECT OF MERE RECEIPTS OF CHEQUES PERTAINING TO EVENTS THAT TOOK PLACE IN EARLIER YEA RS WAS COMPLETELY UNJUSTIFIABLE. TO SUPPORT HER VIEW, THE LD. A R HAD FURNISHED TWO VO LUMINOUS PAPER BOOKS CONTAINING 1 269 PAGES AND 1 149 PAGES CONSISTING INTER A LIA, COPIES OF (I) BANAKHAT, POA, VDIS 1997 CERTIFICATE; (II) SALE DEEDS; (III) ENGLI SH TRANSLATIONS OF POA, LAND DEVELOPMENT AGREEMENT, SALE DEEDS, ORDER OF THE JOI NT CIVIL JUDGE ETC 6. THE LD. D R SUBMITTED THAT THE AUTHORITIES BELOW HAVE, IN FACT, GONE THROUGH THE ROOT OF THE ISSUE AND HAVE COME TO A CONCLUSION THA T THE ASSESSEE HAD FAILED TO PROPERLY EXPLAIN THE SOURCE OF RS.25 LAKHS. IT WAS, THEREFO RE, PLEADED THAT THE STAND OF THE AUTHORITIES BELOW REQUIRES TO BE SUSTAINED. 7. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIALS AVAILABLE FROM THE RECORDS AND ALSO THE DOCUMENTARY EVIDENCES ADVANCED BY THE LD. A.R, DURING THE COURSE OF HEARING IN THE SHAPE OF P APER BOOKS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAD CLAIMED LTCL OF RS.14,410/- O N THE SALE OF LAND ON 2.6.2006 ON A SALE PRICE OF RS.25 LAKHS. THE ASSESSEE WAS REQU IRED TO PRODUCE PROOF FOR ACQUISITION OF LAND IN HIS INDIVIDUAL CAPACITY AS WELL AS THE RECEIPT OF RS.25 LAKHS BEING SALE CONSIDERATION. AFTER CONSIDERING THE EXPLANATION O FFERED, THE LD. AO WAS OF THE VIEW THAT THE ASSESSEE HAD FAILED TO JUSTIFY AS TO HOW HE HAD POSSESSED THE SAID LAND IN HIS INDIVIDUAL CAPACITY; AND HOW THE LAND WAS ACQUIRED IN HIS INDIVIDUAL CAPACITY ON 15/7/1988 AND WAS ALSO IN RECEIPT OFRS.25 LAKHS BEI NG SALE CONSIDERATION AND, ACCORDINGLY TREATED THE SAME AS INCOME EARNED FROM OTHER SOURCES. ON AN APPEAL, CONSIDERING THE VARIOUS FACTORS NARRATED CHRONOLOGI CALLY IN THE ASSESSEES SUBMISSION AND ALSO THE REMAND REPORT OF THE LD. AO, THE LD. C IT (A), FOR THE ELABORATED REASONS RECORDED IN HIS ORDER (CITED SUPRA), CONFIRMED THE STAND OF THE AO. 6.2. AT A GLIMPSE OF THE DOCUMENTS PRODUCED DURING THE COURSE OF HEARING, THE FOLLOWING POINTS WERE NOTICED: ITA NO. 1237-AHD-11 7 (I) AN IRREVOCABLE POWER OF ATTORNEY (POA) WAS EXE CUTED BY THE SIX OWNERS OF THE SAID PROPERTY ON 15,7,1988 IN FAVOUR OF THE AS SESSEE (INDIVIDUAL CAPACITY) IN RESPECT OF THEIR JOINT ANCESTRAL PROPERTY ADMEASURI NG 11.26 ACRES [SOURCE: PAGES 9 14 (ENGLISH VERSION P 1 10) OF PB AR]. AS THE LAND IS SITUATED IN THE LIMITS OF VADODARA MUNICIPAL CORPORATION, THE ADDL. COLLECTOR, VADODARA IN HIS COMMUNICATION VIDE ULC/1076/1115/D 2015 DT: 20.9.19 80 INFORMED THAT THE OWNERS COULD RETAIN ONLY 4440 SQM., OF LAND AND REM AINING 2236 SQM BEING SURPLUS. THE SAID ORDER WAS OPPOSED BEFORE THE HON BLE. HIGH COURT OF GUJARAT AND THE COURT WAS PLEASED TO DISMISS THE SAID APPEA L AS WITHDRAWN VIDE ITS ORDER DT.20.3.1996. (II) IN THE SUBSEQUENT POA AGREEMENT DT.30.10.1996 [SOURCE: P.30 39 OF PB], THE LAND OWNERS NOMINATED (I) SHRI M.D. MISTRY (THE ASSESSEE) AND SHRI GANAPATSINH BHARATSINH SOLANKI OF VADAODARA AS THEI R ATTORNEYS TO APPROACH THE CONCERNED AUTHORITIES FOR THE DEVELOPMENT OF THE SA ID LAND AND CONSTRUCTION OF THE BUILDING THEREON ETC., (III) THEREAFTER, THE LAND OWNERS IN THEIR LAND DEV ELOPMENT AGREEMENT DATED 30.10.1996 (AGREEMENT OF SALE) [P 40 -56 (ENGLISH V ERSION P 11 - 38) OF PB] WITH RAJDEEP CORPORATION [M.D.MISTRY (THE ASSESSEE) AND DILIPHAI V SHAH AS PARTNERS) FOR LAND ADMEASURING 10724 SQM., FOR A TO TAL SUM OF RS.13.33 LAKHS (THE CONSIDERATION OF WHICH ALLEGED TO HAVE BEEN PA ID SPREADING OVER FROM 15.7.88 TO 30.10.96). THE ASSESSEE IN THE DECLARA TION DT. 30.12.1997 (P 57 TO 59 OF PB AR) BEFORE THE COMMISSIONER OF INCOME-TAX, BARODA UNDER VDIS 1997 VOLUNTARILY DISCLOSED HIS INCOME AT RS.11,98,0 00/- IN THE INDIVIDUAL CAPACITY, THE DETAILS OF WHICH, FOR APPRECIATION OF FACTS, ARE EXTRACTED AS UNDER: NAME OF DECLARANT : MAHESHKUMAR DAHYABHAI MISTRY STATEMENT OF VOLUNTARILY DISCLOSED INCOME (NOTE: THE RELEVANT PARTICULARS ARE ONLY EXTRACTED ) ITA NO. 1237-AHD-11 8 DECLARATION OF ASSETS: INVESTED IN RAJDEEP CORPORATION FOR ACQUIRING AGRICULTURE LAND R.S.NO.293/606 T.P 19, FINAL PLOT NO.179 OF VILLAGE MANJALPUR, BARODA MEASURING 7124 SQ.MTS. BAHAKHAT D T: 30.10.1996 NAME IN WHICH HELD : SELF AMOUNT: RS.7,08,000 ASSESSMENT TO WHICH INCOME RELATES: 82- 83 & 83- 84 88-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 NIL 80000 80000 110000 55000 55000 90000 50000 38000 30000 120000 IT IS PERTINENT TO NOTE THAT UNDER VERIFICATION COL UMN (PAGE 58 OF PB AR), IT HAS BEEN MENTIONED AS I , MAHESHKUMAR PATEL SON OF D AYASBHAI INSTEAD OF MAHESHBHAI D.MISTRY. (IV) IN THE MEANWHILE, A PIECE OF LAND IN SY.NO.29 3 & 606 ADMEASURING 1549 SQM., IN PLOT NO.179 WAS SOLD FOR RS.3,65,750/- VID E SALE DEED DT.2.9.1999 TO BHAILALBHAI M. GOHIL OF PALASUDA BY THE OWNERS OF THE LAND THE POA BEING MAHESHBHAI D.MISTRY (THE ASSESSEE) AND RAJDEEP CORP ORATION AS CONFIRMING PARTY [SOURCE: P 39 59 (ENGLISH VERSION) PB. (V) ANOTHER PIECE OF LAND IN THE SAME SURVEY NUMBE R ADMEASURING 1549 SQM., IN FINAL PLOT NO.179 WAS SOLD FOR RS.3,67,750/- VID E SALE DEED DT.2.9.1999 TO R.M. MISTRY OF RANAPUR BY THE OWNERS OF THE LAND THE POA BEING MAHESHBHAI D.MISTRY (THE ASSESSEE) AND RAJDEEP CORP ORATION AS CONFIRMING PARTY [SOURCE: P 60 80 (ENGLISH VERSION) PB. YET AGAIN, ANOTHER PIECE OF LAND IN THE SAME SURVEY NUMBER ADMEASURING 1549 SQM., IN FINAL PLOT NO.179 WAS SOLD FOR RS.3,67,750/- VIDE SALE DEED DT.2.9.1999 T O LAXMANBHAI M.BHARWAD OD AKOTAGAM BY THE OWNERS OF THE LAND THE POA BEING MAHESHBHAI D.MISTRY ITA NO. 1237-AHD-11 9 (THE ASSESSEE) AND RAJDEEP CORPORATION AS CONFIRMI NG PARTY [SOURCE: P 81 101 (ENGLISH VERSION) PB. (VI) SUBSEQUENTLY, THE LAND OWNERS NUMBERING SEVE NTEEN HAVE APPROACHED THE HONBLE FOURTH JOINT CIVIL JUDGES COURT AT VADODAR A CITING MAHESBHAI D.MISTRY (THE ASSESSEE) AND DILIPHAI VADILAL SHAH, PURPORTED TO HAVE BEEN THE PARTNERS OF RAJDEEP CORPORATION AND R.M.MISTRY, PRA BHALSINH M.RAJ, BHAILALBHAI M.GOHIL AND LAXMANBHAI M.BHARWAD [TO W HOM THE LANDS APPEARS TO HAVE BEEN SOLD AS PER THE SALE DEEDS FURNISHED] AS DEFENDANTS. IT WAS PLEADED BEFORE THE HONBLE COURT, THE SUBSTANCES OF WHICH A RE AS UNDER: (I) THE SAID DEFENDANTS 1 AND 2 [MAHESHBHAI D MISTRY (T HE APPELLANT) AND DILIPHAI V SHAH] PRIOR TO MANY YEARS APPROACHED THE PLAINTIFFS WITH A PROMISE TO GET THE CLEARANCE FROM THE ULC AND PURCH ASE OF LAND, HOWEVER, THEY HAVE NOT GIVEN ANY AMOUNT; (II) IN GOOD FAITH, PLAINTIFFS HAVE EXECUTED THE AGREEME NT OF SALE AS WELL AS POAS AND OTHER AGREEMENTS IN THEIR FAVOUR AND BY FA LSE PROMISES AND MIS-LEADS, THEY HAVE GOT THE AGREEMENTS SIGNED BY T HE PLAINTIFFS WHICH, HOWEVER, BEEN GOT CANCELLED THROUGH A PUBLIC NOTICE PUBLISHED IN SANDESH NEWSPAPER DATED 14.6.2000. IN SPITE OF THI S, IT WAS SUBMITTED, THE PLAINTIFFS WERE THREATENED THAT THEIR SAID LAND S WILL BE SOLD TO THE DEFENDANTS NUMBERED AT 3 TO 6 AS THE PLAINTIFFS HAV E NO LEGAL RIGHT EITHER TO SELL OR TRANSFER THE DISPUTED LAND. IT WAS PLEA DED THAT SINCE THE DEFENDANTS 1 AND 2 HAVE FRAUDULENTLY EXECUTED THE A GREEMENTS TO SELL, POAS AND OTHER AGREEMENTS, IT WAS PLEADED BEFORE TH E COURT TO RESTRAIN THE DEFENDANTS TO ACT ON BEHALF OF THE PLAINTIFFS E TC., (III) DURING THE COURSE OF HEARING BEFORE THE HONBLE COU RT, IT WAS SUBMITTED BY THE RESPECTIVE COUNSELS THAT AN UNDERSTANDING AN D MUTUAL COMPROMISE FORMULA HAS STRUCK AND TAKING NOTE OF TH E COUNSELS SUBMISSIONS AND ALSO FOR THE DETAILED REASONS RECOR DED BY THE HONBLE JUDGE IN HIS ORDER, ILLUSTRATING THE DEAL OF THE CO MPROMISE ETC., IT WAS ORDERED, AMONG OTHERS, THAT 13. THE DEFENDANTS NO.1 AND 2 DO HEREBY DECLARE THAT SI NCE THE SALE DEEDS EXECUTED BY THE PLAINTIFFS TO THE DEFENDANTS NOS.3, 4, 5 AND 6 ARE EXECUTED ONLY WITH THEIR CONSENTS, NOW ONWARDS THEY DO NOT HAVE ANY RIGHT, TITLE OR INTEREST OR SHARE OR CLAIM OF ANY KIND. ITA NO. 1237-AHD-11 10 6.3. TAKING INTO CONSIDERATION OF THE VARIOUS ASPEC TS AS DISCUSSED IN THE ABOVE PARAGRAPHS, THE FOLLOWING FACTS ARE EMERGED: (I) AS RIGHTLY POINTED OUT BY THE LD. AO, THE ASSE SSEE HAD FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE WORTH THE NAME THAT THE LAND I N QUESTION HAS, IN FACT, BEEN ACQUIRED BY HIM IN HIS INDIVIDUAL CAPACITY; (II) THE IRREVOCABLE POA DT: 15.7.1988 IN FAVOUR OF THE ASSESSEE WAS ONLY FOR THE PURPOSE OF EXECUTING CERTAIN SPECIFIC WORKS WITH TH E VARIOUS AUTHORITIES CONCERNED SUCH AS OBTAINING OF ULC CERTIFICATE ETC. , IN RESPECT OF THE SAID LAND; (III) THE LAND DEVELOPMENT AGREEMENT ENTERED INTO O N 30.10.1996 BETWEEN THE LANDOWNERS NUMBERING SEVENTEEN AND THE DEVELOPERS RAJDEEP CORPORATION IN WHICH THE ASSESSEE ALLEGEDLY TO HAVE BEEN ONE OF THE PARTNERS, BUT NOT IN HIS INDIVIDUAL CAPACITY AS BEING PROJECTED BY THE ASSES SEE ALL ALONG. THE ALLEGED RECEIPT OF RS.13.33 LAKHS BY THE OWNERS OF THE LAND AS PER THE AGREEMENT TO SELL DATED 15.7.1988 WITH RAJDEEP CORPORATION HAD SINCE BEEN DENIED BY THE PLAINTIFFS IN THEIR APPLICATION BEFORE THE HONBLE COURT WHICH HAS BEEN DULY TAKEN NOTE OF BY THE COURT WHILE APPROVING THE COMP ROMISE DEAL. THE LAND DEVELOPMENT AGREEMENT HAD, IN FACT, BEEN SIGNED BY THE ASSESSEE ALONG WITH ONE SHRI DILIPHAI V SHAH AS PARTNERS OF THE ALLEGED RAJDEEP CORPORATION, BUT, NOT AS AN INDIVIDUAL; (IV) EVEN IN THE SALE DEEDS DATED 2.9.1999 ENTE RED INTO (A) SHRI BHAILALBHAI M.GOHIL, (B) SHRI ROSHANBHAI M.MISTRY & (C) SHRI LAXMANABHAI M.BHARWAD THE ASSESSEE HAS BEEN NAMED AS POA HOLDER OF THE SE LLERS AND RAJDEEP CORPORATION WAS SIGNED BY THEIR ALLEGED PARTNERS AS CONFIRMING PARTY. THIS MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSEE HAD ACT ED AND SIGNED ONLY AS A POA HOLDER AND, OF COURSE, AS ONE PARTNERS OF RAJDEEP C ORPORATION BEING A CONFIRMING PARTY; (V) THE ABOVE NARRATION GOES TO PROVE BEYOND DOUBT THAT THE ASSESSEE HAD NEITHER PURCHASED ANY IMMOVABLE PROPERTY IN HIS IN DIVIDUAL CAPACITY NOR INVESTED ANY AMOUNT IN THE SAME CAPACITY; (VI) THE ASSESSEE IN HIS DECLARATION UNDER VDIS 1 997 VOUCHED THAT HE MADE THE DECLARATION IN THE CAPACITY OF INDIVIDUAL AND THA T THE INVESTMENT OF RS.7,08,000/- (SPREAD OVER TEN AYS) WERE ONLY WITH RAJDEEP CORPORATION. HOWEVER, HE HAD NOT BROUGHT ON RECORD ANY DOCUMENTA RY EVIDENCE TO REMOTELY SUGGEST THAT HE HAD PURCHASED ANY IMMOVABLE PROPERT Y IN WHICH HE HAD INVESTED SO MUCH OF MONEY IN HIS INDIVIDUAL CAPACI TY; ITA NO. 1237-AHD-11 11 (VII) THE ASSESSEE WAS, HOWEVER, FORTHRIGHT IN HI S ADMISSION BEFORE THE LD. AO THAT THERE WAS NO PARTNERSHIP FIRM STYLED M/S.RAJDE EP CORPORATION. SUCH BEING A SCENARIO, HOW DID HE MANAGE TO REGISTER HIS SIGNA TURE IN THE SALES DEEDS WHICH HAVE NOW BECOME THE PART OF GOVERNMENT RECORD S AS ONE OF THE PARTNERS OF A NON-EXISTING FIRM, NAMELY RAJDEEP COR PORATION AS A CONFIRMING PARTY; (VIII) TOWERING IT ALL, THE HONBLE COURT IN ITS RULING OBSERVED THAT THE DEFENDANTS 1 AND 2 (THE ASSESSEE AND THE ALLEGED OT HER PARTNER OF A NON-EXISTING FIRM) DO NOT HAVE ANY RIGHT, TITLE OR INTEREST OR SHARE OF CLAIM OF ANY KIND. 6.4. IN A NUT-SHELL, THE ASSESSEE HAD FAILED EVEN A T THIS STAGE TO PRODUCE ANY DOCUMENTARY EVIDENCE TO PROVE THE CREDIBLE SOURCE(S ) ON WHICH HE HAD EARNED A WHOPPING SUM OF RS.25 LAKHS AND, THEREFORE, WE ARE OF THE VIEW THAT THE LD. A O WAS JUSTIFIED IN HIS STAND WHICH REQUIRES TO BE UPHELD. THE LD. CIT(A) WAS ALSO JUSTIFIED IN CONFIRMING THE ACTION OF THE LD. A.O. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. 4 3 - 2'& 5#!' 18 / 11 /2011 ' 6 - 0 7 THIS ORDER PRONOUNCED IN COURT ON 18/11/2011. SD/- SD/- (D.K.TYAGI) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED : 18/11/2011 3 3 3 3 - -- - ,18 ,18 ,18 ,18 98&1' 98&1' 98&1' 98&1'- -- - 1. *+ 2. ,*+ 3. !! 1 /= 4. /=- - 5. 8@ ,1# , , 7 6. B4 3 , C/ !E , 7 TALUKDAR/ SR. P.S.