Shankarlal C Shah, Surat V. The ACIT.,Circle-4, Surat

ITA 1359/AHD/2016

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1998 (ITAT-SURAT)
• Duration Of Justice: 6 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-04-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: TUSHAR P HEMANI
• Keywords: Business income; Income from undisclosed sources; Document seized; Question of law; Cost of acquisition; Corroborative evidences; Documents seized; Set aside
• Section: 147; 131; 68; 132; 271(1)(c); 139; 143(3); 133A; 153A; 143(2); 13; 153; 22; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकरअपीलसं./ITA Nos.1359 & 1481/AHD/2016 (Ǔनधा[रणवष[ / Assessment Year: (2012-13) (Virtual Court Hearing) Shankarlal C. Shah, 199-201, Vishal Nagar Society, Udhna, Magdalla Road, Surat. Vs. The ACIT, Central Circle-4, Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AEUPS4161E The DCIT, Central Circle-1, Surat. Vs. Manish Kashiram Patel, 15-16, Vanita Residency, Althan Canal Road, Althan, Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABLPP5085E (Appellant)/(Revenue) (Respondent)/(Appellant) Assessee by : Shri Tushar P Hemani, Sr. Advocate with Parimalsinh B. Parmar, and Shri Aaditya Nemani,CA Revenue by : Shri H. P. Meena, CIT(DR) & Ms Anupama Singla, Sr. DR Date of Hearing : 31/03/2022 Date of Pronouncement : 14/06/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned two appeals filed by the Assessee and Revenue, pertaining to the Assessment Year (AY) 2012-13, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short “the ld. CIT(A)”], which in turn arise out of separate assessment orders passed by the Assessing Officer under sections 143(3)/153A of the Income Tax Act, 1961 [hereinafter referred to as the “Act”]. 2. Through these appeals, different assessees assail the correctness of separate orders passed by the Commissioners of Income-tax (Appeals), in relation to the captioned assessment year 2012-13. Since these appeals are based on Page | 2 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel similar facts and common grounds of appeal, we are proceeding to dispose of them by this consolidated order for the sake of convenience. 3. Grounds of appeal raised by the assessee in ITA No.1359/Ahd/2016, for A.Y.2012-13, are as follows: “(I) Enhancement of Income on account of Purchase cost: (1) While the Assessing Officer has made addition of Rs.2,04,19,200/- as the Appellant's share for so called difference, in purchase cost offered by Appellant and purchase cost taken by Ld.assessing officer, the learned Commissioner of income-tax (Appeals) has enhanced addition to Rs.3,40,32,000/-, considering, as the single and, sole purchasers against so called of his share of Rs.2,04,19,200/-. (2) The appellant submits that the learned Commissioner of Income-Tax (Appeals) was not justified in enhancing income by assuming that the appellant is the sole and only purchaser of the property when the Assessing Officer had already assessed balance share in hand of Mr. Manish K. Patel. (3) The appellant submits that on the facts and circumstances of the case and laws, the addition made by the Assessing Officer on account of so called difference in purchase cost share and enhancement by the learned Commissioner of Income-Tax (Appeals) as full amount is not justified and required to be deleted. (II) Enhancement of Income on account of Profit portion of co-owner: (1) The learned Commissioner of Income-Tax (Appeals) has erred in enhancing the income to Rs.1,89,14,400/-, being the 40% share of profit of Mr. Manish K. Patel, co-owner, assuming the appellant as sole and single owner as against his declared share of 60%. (2) The appellant submits that the learned Commissioner of Income-Tax (Appeals) was not justified in enhancing income by assuming that the appellant is the only sole seller of the property when the Assessing Officer had already assessed balance share in hand of Mr. Manish K. Patel. (3) The appellant submits that on the facts and circumstances of the case and laws, the enhancement by the learned Commissioner of Income-Tax (Appeals) on account of so called whole profit on sale of property is not justified and required to be deleted. (iii) Miscellaneous: (1) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 4. The assessee has also raised additional grounds of appeal in ITA No.1359/Ahd/2016, for A.Y.2012-13, which are reproduced below: Page | 3 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 1. The action of learned assessing officer in framing assessment under section 153A r.w.s. 143(3) of the Act is not tenable in the eye of law since such assessment has been framed beyond the scope of material and evidences found during the course of search action carried out u/s 132 of the Act, hence, the Assessment Order deserves to be quashed. 2. Even the requirement for framing assessment under section 153C of the Act are not satisfied since no satisfaction, as contemplated in the scheme of the Act, has been recorded by the learned assessing officer. 3. The Assessment Order framed under section 153A r.w.s. 143(3) of the Act is not at all in accordance with the scheme of the Act and hence, the same deserves to be quashed in the larger interest of justice. Appellant craves leave to add, amend, alter, change, deleted and edit the above ground of appeal before or at the time of the hearing of the appeal.” 5. Grounds of appeal raised by the Revenue in ITA No.1481/AHD/2016, for AY.2012-13, in the case of Manish K. Patel are as follows: “[1] On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting addition made of Rs.1,89,14,400/- on account of unaccounted business income from the selling of land and erred in deleting addition made on Rs.1,36,12,800/- made on account of suppression of business profit in the purchase of the land at Vadod on the ground that addition has been confirmed in the case of Shankarlal C Shah nevertheless that Sri Shankar C Shah may challenge the said order in appeal as time limit for filling appeal has not expired. [2] On the fact and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. [3] It is, therefore, prayed that the order of the CIT(A) may be set aside and that of Assessing Officer may be restored to the above extent.” 6. First, we shall take assessee`s appeal in ITA No.1359/Ahd/2016 for assessment year 2012-13, in the case of Shankarlal C Shah. In this appeal, assessee has raised additional ground of appeal. At the outset, Shri Tushar P. Hemani, Senior advocate, begins by pointing out that action of the assessing officer to frame the assessment under section 153A r.w.s. 143(3) is not tenable in the eye of law and even the requirement of section 153C of the Act is not satisfied, therefore, assessment order framed by the assessing officer needs to be quashed on this legal issue. The ld Counsel, therefore contended that additional Page | 4 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel ground raised by the assessee should be admitted as the facts are already on record and it is purely a legal issue. 7. On the other hand, Shri H. P. Meena, CIT-DR for the Revenue argued that since assessee has not raised this legal issue (challenging the validity of assessment under section 143(3) r.w.s 153A and section 153C of the Act), neither before the ld. CIT(A) nor before the assessing officer, therefore the assessee cannot raise this fresh ground before the Tribunal first time. 8. We have heard both the parties on this preliminary issue. We note that the objection raised by the assessee in additional grounds is a purely legal objection going to the root of the jurisdiction of the matter and in view of the Hon’ble Apex Court judgment in the case of NTPC Vs CIT(1998) 229 ITR 383 (SC), it can be raised at this stage even for the first time. The Hon’ble Supreme Court while dealing with ground raised before the ITAT for the first time relating to legal issue has held that Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. It was also held that under section 254 of the Act the Tribunal has jurisdiction to examine a question of law which though not arose before lower authorities but arose before it from facts as found by lower authorities and having a bearing on tax liability of assessee. Therefore, we do not agree with contention of ld DR for the Revenue to the effect that assessee cannot raise this legal issue first time before the Tribunal. Since the additional ground raised by the assessee challenging the validity of assessment under section 143(3) r.w.s 153A and 153C of the Act, is a legal issue which goes to the root of the matter and no further inquiry is needed for deciding the said legal issue as all facts are already on record, hence we admit the said additional ground of appeal of the assessee for adjudication. 9. As the legal issue raised in the additional grounds goes to the root of the matter, therefore, first, we shall adjudicate them. Page | 5 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 10. So far legal issue raised in the additional grounds are concerned, the relevant material facts are like this. A search action under section 132 of the Income Tax Act was carried out in the case of partners of Shankar C. Shah Group and Survey under section 133A of the Act, was carried out at the site office of firms of Shankar C Shah Group on 27.12.2012. The assessee has declared total income of Rs.3,19,09,920/- in the original return filed under section 139 of the Act. The assessee`s case was also selected through CASS under compulsory scrutiny. As the assessee is a partner in the firms related to Shankar C Shah Group, his residential premises was covered under search action u/s 132 of the IT Act, 1961 on 27.12.2012. Assessee is a partner in firms of the Group which are in the business of Builders & Developers. The assessee derives income from business, Rent and other sources etc. Being a search case, notice u/s 153A was issued on 12.09.2013. The assessee filed Return of Income on 17-02-2014, declaring total income of Rs.3,19,09,920/-. Notices under section 143(2) and u/s 142(1) of the Act were issued and duly served on assessee. 11. The assessee has not offered any additional undisclosed income in the return of income filed in response to the notice u/s 153A of the Act. Out of the total income of Rs.3,19,09,920/-, Rs.2,83,71,600/- is offered for taxation in pursuant to the document seized in search action in the case of Shri Khimjibhai S Bhadiyadara on 22.03.2012 in respect of land at Vadod, FP No. 71, Block No. 125 admeasuring 12.78 Bigha. 12. It was observed by the assessing officer that there is difference between sale consideration of land at Vadod, FP No. 71, Block No. 125 admeasuring 12.78 Bigha, admitted by Shri Shankarlal C Shah and value shown by Shri Mohan R Munjani by Rs.3,40,32,000/-. Brief details of the transaction are as under: (i) Certain documents were seized in search action in the case of Shri Khimjibhai S Bhadiyadara on 22.03.2012 in respect of land at Vadod (F.P. No. 71, Block Page | 6 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel No.- 125) measuring 12.78 bigha. When the document confronted to the assessee, he has accepted that he and Shri Manish K Patel have jointly sold the land to Shri Khimjibhai Bhadiyadara and others for Rs.23,l3,18,000/- at the rate of 1.81 Crore per bigha. (ii) The assessee has stated in the statement recorded on 05.06.2012 that the said land was purchased from Mohan R Munjani and Shri Ganesh Munjani for Rs.18,40,32,000/-, at the rate 1.44 Crore per bigha. Afterword, he has joined Shri Manish K Patel as partner of 40% due to financial crunch. The said land was finally sold to Shri Khimjibhai S Bhadiyadara & others and the registered documentation was done directly between Shri Khimjibhai Bhadiyadara and others as purchaser and Shri Mohanbhai Munjani and Shri Ganeshbhai Munjani as seller. (iii) Cash component of the deal was shared between the assessee and Shri Manish K. Patel. Final Registered sales document do not find any reference of details of transaction done by Shankarlal C. Shah & Manish K. Patel as investor, purchaser & seller. (iv) On statement of Shankar C. Shah's stating the purchase value at Rs. 18,40,32,000/- the same was confronted with the seller of land, Shri Mohan R Munjani & Shri Ganesh Munjani wherein they stated that the land was sold by them to Shankar C. Shah for Rs. 15,00,00,000/-. The assessee, Shankar C. Shah has shown purchase cost at Rs. 18,40,32,000/- against Rs. 15,00,00,000/-, therefore assessing officer issued a show cause notice to the assessee to explain the transaction. The contents of the show cause notice dated 19.1.2015, is reproduced as under: "As per the details on file & submission mode by you w.r.t land at F.P. No.71, Block No. 125, Vadod admeasuring 12.78 Bigha, you are required to file following queries: (1) You have entered in sales agreement with Khimji S. Bhadiyadra @ 1,81,00,000/- per bigha with total consideration amounting to Rs. Page | 7 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 23,13,18,000/-. File details of amount received & utility by cash book & Bank book. (2) You have stated that you have purchased the said property from original owner of land @ 1,44,00,000/- per bigha totaling to Rs. 18,40,32,000/-. The original owner as per statement is Mohan Munjani & Ganesh Munjani. Perusals by details on file shows that on the basis of "Certain notings on Registered document back side" which was seized during search action u/s 132 & statement given by Mohan Ramji Munjani u/s 132(4) on 29/03/2012, Munjani brothers i.e. Mohan Munjani and Ganesh Munjani has declared that they have received Rs.15,00,00,000/- against sale of land at F.P. No. 71. Block No. 125, Vadod. There is discrepancy in purchase value shown by you & sale value shown declared by Munjani Brothers. (Purchaser) Purchase value shown by you = Rs.18,40,32,000/- (Owner) Sale value shown by Munjani Brothers = Rs.15,00,00,000/- 3,40,32,000/- In his statement, Munjani brothers have denied any document with you for Rs.18,40,32,000/-. You are herewith show caused to file supporting evidence of your claim of purchase at Rs. 18,40,32,000/-, failing which the purchase value of this land shall be considered at Rs. 15,00,00,000/- and profit from the land shall be calculated accordingly & brought to tax. (3) You have stated that "due to financial crunch" Manish Patel has entered partner with you for purchase of said land i.e. F.P. No. 71, Block No. 125, Vadod from Munjani Brothers. You have stated that cost & profit ratio are shared with Manish K Patel. Please file supportive evidence of your say & claim." 13. In response to the notice to the Assessing Officer, the assessee has submitted its reply during the assessment stage which is reproduced below: “4.3. In response to the above notice the assessee has submitted an Affidavit stating that; 1. I have purchased plot of land situated at FP No. 71, Block No. 125, Vadod admeasuring 30,400 Sq. Mtrs. i.e. 12.78 Bighas from Shri Moharibhai Ramjibhai Munjani and his brother Shri Ganeshbhai Munjani residing at 107, Jay Complex, Anandmahal Road, Adajan, Surat. 2. The said plot way purchased at the rate of Rs. 1,44,00,000/- per Bigha at total cost of Rs.18,40,32,000/-. The "Sauda Chitthi" have also been prepared for the transaction and the same have been signed by me as purchaser of land and by Shri Mohanbhai R Munjani as Seller of the land. The same fact 1 have also said in my statement recorded u/s 131 on 5 th June 2012 by the Dy. Director of income Tax (Inv.)-l, Surat. Page | 8 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 3. The Sauda Chitthi entered in to with Shri Mohanbhai Mujani is misplaced by me. The Sauda Chitthi contains payment schedule and other terms and conditions of the transaction entered into with Shri Mohanbhai Munjani. In the Sauda Chitthi the rate of purchase of land Rs.1,44,00,000/- per Bigha was clearly mentioned with the details of the total area sold i.e. 30,400 square meters i.e. 12.78 bigha. Hence the total consideration come to Rs.18,40,32,000/- (i.e. Rs. 1,44,00,000X 12.78 bigha). 4. In the real estate business, transactions are carried out at the rate per sq. feet or per sq. yard or per square meters or per bigha /acre and not in lump sum consideration. Considering this fact, the contention of the Munjani Brothers that the sales consideration is of Rs.l5,00,00,000/- is away from the fact and not true. Further the total purchase consideration fixed of Rs.18,40,32,000/- at the rate of Rs.l,44,00,000/- per bigha for 12.78 bigha is true and hence the cost of purchase is to be taken Rs.18,40,32,000/- and not Rs.l5,00,00,000/- as claimed by the Munjani Brothers on the basis of noting on the back side of the document without signature of purchasing party. 5. Further my contention about the purchase cost is never questioned up to the March, 2014. If Shri Mohanbhai Munjani have had claimed that the he has sold the land at Rs.15,00,00,000/- in his statement or any documentary proof regarding the same have been found in his case then the contention of Shri Mohanbhai Munjani would have also subjected to me while recording my statement. 6. Afterword due to financial crunch, I have offered 40% share in to the said land to Shri Manish Patel residing at 15-16, Vanita Residency, Althan Canal Road, Althan, Surat and having office at M/s Expressions, VIP Road, Bharthana, Yesu, Surat. However no written document have been prepared: for 40% share offered to Shri Manish Patel in the same land. 7. Then after we have jointly sold the said land for Rs.23,13,18,000/- to Shri Khimjibhai Bhadiyadara and Shri Govindbhai Bharwad residing at 13, Vanita Residency, Canal Road, Althan, Surat. The Sauda Chitthi also have been prepared for the same transaction and signed by myself and Shri Manish Patel as seller and Shri Khmijibhai as purchaser. Sign by Shri Manish Patel as seller on the Sauda Chitthi for sale of land undoubtedly prove that the said land is jointly sold by us. 8. Out of the total consideration receivable from Shri Khimjibhai and Shri Govindbhai amount of Rs.4,86,14,000/- directly paid through cheque to Shri Mohan Munjani and Shri Ganesh Munjani by Shri Khimjibhai Bhadiyadara and Shri Govindbhai Bharwad and the remaining balance received in cash by me and Shri Manishbhai. The registered document of sale was made between Shri Mohanbhai Munjani and Shri Ganeshbhai Munjani as seller and Shri Khimjibhai Bhadiyadara and Shri Govindbhai Bharwad as purchaser on the instruction of myself and Shri Manishbhai Patel. 9. The Balance Amount of cash of Rs. 18,27,04,000/- received from them have been utilized as under; - Cash Payment of Rs.13,54,18,000/- to Shri Mohanbhai Munjani and Shri Ganeshbhai Munjani for purchase of the said land. - 40%Share of Cash profit being Rs.1,89,14,400/- taken by Shri Manish Patel. Page | 9 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel - My 60% Share of Cash Profit being Rs.2,83,71,600/- have taken into regular books of accounts maintained by me and deposited into bank or utilized into my business. - The working of the net profit earned and share of profit earned by each of its from the transaction are as under; Particulars Amount Rs. Sales consideration of land from Shri Khimjibhai 23,13,18,000/- Purchase consideration paid to Shri Munajni Brothers - Paid in Cash 13,54,18,000 - Directly paid by Sh Khimjibhai and Shri Govindbhai 4,86,14,000 18,40,32,000/- Total Net Cash Profit earned from the transaction 4,72,86,000/- 60% being my share in the cash profit earned 2,83,71,600/- Rest being 40% share of Shri Manish K Patel in cash profit earned 1,89,14,400/- 10. The Sauda Chitthi along with a diary in which the details of payment given by Shri Khimjibhai recorded was with Shri Khimjibhai Bhadiyadara. The same Sauda Chitthi and the diary were seized and kept on record by the Income Tax Department from the premises of Shri Khimjibhai Bhadiyadara in search action initiated on 22 nd March 2012. 11. Further I am not responsible for payment of tax on the share of profit earned by Shri Manish Patel as sufficient documentary evidence available with the department in the seized materials in search action on 22.3.2012 at the premises of Shri Khimjibhai Bhadiyadara to prove that he was one of the joint seller of the land. I have offered the amount of my share of profit earned from the transaction for taxation in the assessment year 2012-13. And have paid taxes due thereon.” 14. However, the Assessing Officer rejected the contention of the assessee and observed that Shankarlal C Shah (Purchaser) has stated that his purchase consideration of the land is at Rs.l8,40,32,000/- as against sale consideration admitted by Shri Mohan R Munjani (Seller) at Rs.15,00,00,000/-, hence there is difference of Rs.3,40,32,000/-. The Sale amount admitted by the purchaser and sellers are entirely different. Therefore, the understated sale consideration of the land of Rs.3,40,32,000/- ( Rs.l8,40,32,000- Rs.15,00,00,000) is to be taxed. The assessing officer noted that Shankar C. Shah ( the purchaser/ Investor) has stated vide his statement recorded on oath u/s 131 on 05.06.2012, that land of 12.78 Page | 10 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel bigha is purchased from Shri Mohan R Munjani for Rs.18,40,32,000/- (at the rate of 1.44 Crore per bigha). 15. The assessing officer also noted that as the search was conducted in the case of Shri Mohan R Munjani (Seller) who has admitted the sale consideration of the said land of Rs. 15,00,00,000/- for 12.78 bigha vide his statement recorded u/s 132(4) dated 22.03.2014. The Photo copies of the registered documents were seized during the search operation and on the back side of the seized copy of the registered documents, some noting were made. 16. The other reason for considering the evidence of notings, as genuine arises from the document seized during the search operation in the case of Shri Mohan R Munjani and same was confronted during the search operation at that time. Considering the notings, Shri Mohan R Munjani has offered undisclosed income of Rs.l0,13,86,000 (15,00,00,000 - 4,86,14,000) for taxation for the year under consideration on account of sale of land. 17. In the view of above, the purchase consideration of the land paid to Shri Mohan R Munjani & Shri Ganesh R Munjani by Shri Manish K Patel and the assessee was taken by the assessing officer at Rs. 15,00,00,000/-. The assessing officer noted that there is no dispute on the final sale consideration being Rs.23,13,18,000/-. The profit to the extent of Rs.4,72,86,000/- (23,13,18,000 - 18,40,32,000) was already brought to tax. The remaining amount of Rs.3,40,32,000/- being the difference between (18,40,32,000 -15,00,00,000) needs to be brought to tax. The assessing officer noted that Shri Manish K Patel and the assessee are partners of this purchase transaction in the 40:60 ratio. Considering the share ratio of the assessee and of Shri Manish K Patel in the said land discussed (supra), the share profit of the assessee and Shri Manish K Patel are computed as under: Shri Shankarlal C Shah (60% of 3,40,32,000) Rs. 2,04,19,200/- Shri Manish K Patel (40% of 3,40,32,000) Rs. 1,36,12,800/- Page | 11 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel The said unaccounted income (i.e. Rs.2,04,19,200/-) was assessed in the hands of the assessee on substantive basis and Rs.1,36,12,800/- to be assessed in the hands of Shri Manish K Patel on protective basis as his share profit in the land transaction. Therefore, unaccounted income of the assessee at Rs.2,04,19,200/- was added in the total income under section 68 of the I.T. Act in the hand of Shankar C. Shah. 18. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the addition of Rs.2,04,19,200/-. Apart from this, ld CIT(A) enhanced the income of the assessee observing as follows: “Therefore, the ground of appeal of the assessee is dismissed and the addition of Rs.2,04,19,200/- is confirmed as being undisclosed income earned outside books of accounts. The addition would not be u/s 68 as mentioned by the assessing officer. The assessment order is modified to that extent. Further, following my decision as above, the income is directed to be enhanced by the following amounts: 1) Rs.1,89,14,400/- (40% of 4,72,86,000/-), the profit (Rs.23,13,18,000 minus Rs.18,40,32,000) which was claimed and assessed as shared by Shri Manish K. Patel; but held to be earned by appellant alone, in view of my decision that Shri Shankarlal C. Shah not only initially entered the purchase agreement with Munjanis independently (as accepted by him) but also completed the entire deal including sale to Khimji S. Bhadiyadraon his own. 2) Rs.1,36,12,800/- (40% of 3,40,32,000/-), originally added in the case of Manish K. Patel in light of my decision as above. The addition/enhancement in appellant's case is all the more required because even if it were accepted that Shri Manish K Patel was subsequently associated with the deal; there is always a possibility that this difference was not known to him and the appellant kept the profit to himself. Therefore, the income is directed to be enhanced by Rs.3,25,27,200/- (Rs.1,89,14,400/- plus Rs. 1,36,12,800/-); being income earned outside books of account and not disclosed to the department. 1 am satisfied that the appellant has furnished inaccurate particulars of his income; thereby not disclosing its correct income. Penalty proceedings u/s. 271(1)(c) of the Act are being initiated separately.” Page | 12 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 19. Aggrieved by the order of the ld CIT(A), the assessee is in further appeal before us. 20. In respect of additional grounds, ld Counsel pleads that action of the Assessing Officer in framing assessment under section 143(3)/153A of the Act is not valid, as such assessment has been framed beyond the scope of material and evidences found during the course of search action carried out u/s 132 of the Act. The ld Counsel also states that in order to make addition under section 153C, the assessing officer needs to record satisfaction under section 153C of the Act, which he has failed to do so. In the assessee`s case the seized material was not found from assessee`s premises. The assessing officer has not relied on the documents found from assessee`s premises, however, he relied on the documents found from other person`s premises. That is, the seized material found in the possession of third party, about the purchase consideration of the land paid to Shri Mohan R Munjani & Shri Ganesh R Munjani by Shri Manish K Patel and the assessee at Rs. 15,00,00,000/-, may be used against the assessee provided the assessing officer had recorded his satisfaction under section 153C of the Act. Besides, in assessee`s case, the assessment was framed under section 143(3) r.w.s.153A of the Act dated 27.02.2015, and not under section 153C of the Act. Therefore, ld Counsel submitted that assessment order framed by the assessing officer may be quashed. 21. On merits, ld Counsel argues that addition of Rs.2,04,19,200/- was made by assessing officer, such addition was made mainly based on the material collected during search in case of "Mohan Munjani" and Statement of "Mohan Munjani" u/s 132(4) of the Act. As regards material collected during search in case of “Mohan Munjani", it transpires that the same contains certain rough noting; no name, either of assessee or any other person, appears on it. No signature, either of assessee or any other person, appears on it. No date of transaction appears on the material collected during search. Thus, ld Counsel contended that the seized document is merely a dumb document and therefore no Page | 13 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel addition can be made merely based on a "dumb document". As regards statement of "Mohan Muniani", ld Counsel states that Statement of Mohan Munjani was not provided to assessee. It is a settled law that if any material is not confronted to an assessee, it would not constitute as "admissible evidence". Hence, any addition made on the basis of such evidence is liable to be deleted. To bolster his arguments, ld Counsel relied on the judgment of Hon`ble Supreme Court in the case of Kishnchand Chellaram - 125 ITR 713 (SC). 22. On the other hand, Shri H. P. Meena, Learned Departmental Representative (ld. DR) for the assessee has submitted that search was conducted in the case of assessee, therefore assessing officer made addition under section 143(3) r.w.s 153A of the Act. The search was also conducted on other connected persons and incriminating material may be found at other premises and the said incriminating material may be used for making addition under section 153A of the Act. The ld DR pointed out that search was conducted in the case of Shri Mohan R Munjani (Seller) who has admitted the sale consideration of the land of Rs. 15,00,00,000/- for 12.78 bigha vide his statement recorded u/s 132(4) dated 22.03.2014. The Photo- copies of the registered documents were seized during the search operation and on the back side of the seized copy of the registered documents, some noting were made, which were incriminating documents, and therefore assessing officer was correct in framing the assessment under section 153A r.w.s.143(3) of the Act. 23. On merits, the ld.DR submitted that assessee has not proved the bona fide of the transaction, therefore, ld CIT(A) was right in enhancing the income of the assessee. Apart from this, Ld. DR has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 24. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the Page | 14 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. So far additional legal ground raised by the assessee is concerned, we note assessing officer framed the assessment under section 143(3) read with section 153A of the Act, dated 27.02.2015 by using the material found in the premises of Shri Mohan R Munjani (Seller). To frame the assessment by using the material found at other premises, the assessing officer ought to have issued notice under section 153C of the Act and assessing officer needs to record satisfaction under section 153C of the Act. However, assessing officer failed to do so. We note that search was conducted in the case of Shri Mohan R Munjani (Seller) who has admitted the sale consideration of the land of Rs. 15,00,00,000/- for 12.78 bigha, vide his statement recorded u/s 132(4) dated 22.03.2014. The Photo- copies of the registered documents were seized during the search operation of Shri Mohan R Munjani and on the back side of the seized copy of the registered documents, some noting were made, and the said material was used by the assessing officer, which was found from other person(Shri Mohan R Munjani). Therefore, it is abundantly clear that assessing officer did not use any material found from assessee`s premises, hence assessment framed under section 143(3) read with section 153A of the Act, dated 27.02.2015 is not a valid assessment in the eye of law. 25. Though facts have been discussed in detail in the foregoing paragraphs, however in the succinct manner, the relevant facts and background are reiterated in order to appreciate the controversy and the issue for adjudication. We note that search u/s 132 of the Act, in case of "Khimjibhai Bhadiyadara, was conducted on 22.03.2012. The Search u/s 132 of the Act, in case of Mohan R. Munjani, was conducted on 29.03.2012. The assessee`s statement was recorded under section 131 of the Act on 05.06.2012. Then after, search u/s 132 of the Act was conducted in case of "assessee" on 27.12.2012. The assessing officer adopted cost of land in question at Rs.15,00,00,000/- as against cost of Rs.18,40,32,000/- adopted by assessee. Consequently, assessing officer made addition of to the tune of Rs.2,04,19,200/- towards 60% share of the assessee [i.e. (18,40,32,000 - Page | 15 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel Rs.15,00,00,000) * 60%)] based on material collected during search in case of "Mohan Munjani” & statement of Mohan Munjani" u/s 132(4) as per which, cost of land in question in the hands of assessee was Rs.15,00,00,000/- ( vide Para 4.4 (ii) of Asst. Order). On appeal, CIT(A) confirmed addition of Rs.2,04,19,200/- made by AO based on material collected during search in case of "Mohan Munjani” & statement of Mohan Munjani".The CIT(A) also enhanced income of the assessee by a sum of Rs.1,36,12,800/- and Rs.1,89,14,400/- with respect to 40% share of Manish Patel in purchase cost and profit on sale of land respectively based on denial of involvement in the deal by Manish Patel. 26. Based on the above facts, we note that assessing officer framed the assessment for the year under consideration under section 143(3) r.w.s. 153A of the Act. The addition and enhancement are not based on material found during the course of "search" carried out in the case of the "assessee". To frame the assessment under section 143(3) r.w.s. 153A of the Act, the search team should have unearthed any incriminating material from the assessee`s premises. However, in assessee`s case the addition and enhancement are based on material collected from "search" carried out in case of "third parties", for that assessing officer ought to have issued notice under section 153C of the Act and ought to have recorded satisfaction under section 153C of the Act. Therefore, the proceedings u/s 153C of the Act have not been initiated in the case of "assessee" for taking cognizance of "material gathered during search carried out in case of third parties”. It is a settled legal position that assessment u/s 143(3) r.w.s. 153A of the Act is to be framed strictly on the basis of material found during the course of search action carried out in the case of "assessee concerned". For that we rely on the judgment of Hon`ble Gujarat High Court in the case of PCIT Vs. Saumya Construction, [2017] 81 taxmann.com 292 (Gujarat). The findings of the Hon`ble Court is reproduced below: “15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A Page | 16 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assessee the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub- section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case Page | 17 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of Page | 18 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed.” 27. From the above judgment of Hon`ble Gujarat High Court in the case of Saumya Construction (supra), it is vivid that section 153A bears the heading 'assessment in case of search or requisition'. From the heading of section 153, the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. Thus, while in view of the mandate of sub-section (1) of section 153A in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material Page | 19 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel collected during the search or requisition. In case no incriminating material is found, the addition would not be made. 28. In assessee`s case under consideration, the documents referred to in the Assessment Order as well as in the report of assessing officer dated 06.07.12 were seized during the course of search action carried out in case of "Mohan R. Munjani'' (Page 7 of assessment order and Pg.13 of CIT(A)'s order) and not during the course of search carried out in case of assessee. Therefore, if the documents were not seized during the course of search carried out in case of assessee, then no addition should be made under section 153A of the Act. In case assessing officer wanted to refer to and rely upon the same for making addition in the hands of the assessee, then in that situation, proceedings u/s 153C of the Act, ought to have been initiated which has admittedly not been done in assessee`s case under consideration. Thus, in view of the above facts, and applicable precedent on facts, we note that assessment framed under section 143(3) r.w.s. 153A of the Act, dated 27.02.2015 is void and null in the eye of law, as the said assessment is not on the basis of material found during the course of search action carried out in the case of "assessee concerned", hence we quash the said assessment. 29. As the assessment under section 143(3) r.w.s.153A of the Act, dated 27.02.2015, itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous therefore, we do not adjudicate them. 30. In the result, appeal of the assessee (In ITA No.1359/Ahd/2019) is allowed. 31. Now, coming to the Revenue`s appeal in ITA No.1481/AHD/2016 for AY.2012-13. This appeal pertains to Manish K Patel who was allegedly considered 40% partner of Shri Shankar C Shah, whose appeal, we have allowed, vide para no.28 to 30 of this order. Page | 20 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 32. The facts of the assessee (Manish K Patel) are as follows: A search action under section 132 of the Income Tax Act, 1961, was carried out at the business premises of Aakash Group as well as residential premises of Manish K Patel on 22.03.2012. The assessee is an individual and in having income from salary, business income, capital gain and other sources. The Assessing Officer completed assessment proceedings on 25.03.2014 determining total income of Rs.3,35,76,190/. The Assessing Officer made following addition in the assessment order: Sr. No. Particulars Amount in (Rs). 1. Addition on account of unaccounted business income from the selling of land (At Vadod F.P. 71, Block No. 125) 1,89,14,400/- 2. Addition on account of unaccounted business income from the selling of land (Substantive addition) (At Vadod F.P. 71, Block No. 125) 1,36,12,800/- Total 3,25,27,200/- The above said additions was made on the basis of Sauda Chitthi and pocket diary found during the course of search action taken place in case of Shri Khimjibhai S. Bhadiyadra on 22/03/2012 and further on the basis of statement of Shri Govindbhai K Bharwad under section 132(4) on 22.03.2012 and Khimjibhai S Bhadiyadra under section 132(4) on 21.05.2012 and also on the basis of statement of Shri Shankarlal Shah under section 131 of the Act dated 05.06.2012. However, the assessee denied completely that he has not carried out any transaction in respect of land at Vadod F. P. No. 71, Block No. 125 and he is also not connected with any transaction with Khimjibhai Bhadiyadara, Govind Bharwad, Shankarlal C Shah and Mohan Munjai in respect of said land. The Assessing Officer not accepted the version of the appellant and held that Shri Manish K Patel was 40% partners in the deal, both knowing the purchase and sale amounts. He further held that the purchase price from Munjanis was Rs.15,00,00,000/- only. Therefore, assessing officer made the above noted additions. Page | 21 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 33. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has deleted the addition made by the Assessing officer observing as follows: “DECISION: 8. I have gone through the facts of the case, the submissions of the appellant, the submissions of Shri Shankarlal C. Shah, Shri Mohan R. Munjani and Shri Ganesh Munjani; statements of different person recorded during searches, documents seized and assertions made through affidavits etc. 8.1 Before proceedings further, I would like to note that the assessing officer had decided that the additions of Rs.1,36,12,800/- in the case of the appellant and Rs.2,04,19,200/- to be made in the hands of Shri Shankarlal C. Shah; were to be made on substantive basis. The expressive part of the assessment order and the computation of breaking the addition into two parts clearly established this. Therefore, the remark in the computation of total income part of the order mentioning that it is a protective addition is a mistake apparent from record. 8.2 I have decided in the case of appeal of Shri Shankarlal C. Shah, vide my even dated order that the two additions made in the case of the assessee, Shri Manish K Patel; were required to be made in the case of Shri Shankarlal C. Shah. I have correspondingly directed that the income be enhanced in that case. The issue has been discussed and decided in the case of Shri Shankarlal C. Shah, in the following words: "10.1 A Sauda Chitthi / MOU was found and seized during a search u/s. 132 of the IT Act, 1961 conducted in the case of Shri Khimjibhai S. Bhadiyadara on 22.03.2012, from his residence. According to this agreement, the land in Vadod, FP No. 71, Block No. 125 admeasuring 12.78 Bigha was agreed to be sold to Shri Khimjibhai S. Bhadiyadara for an amount of Rs.1,81,00,000/- per bigha. It is undisputed that the appellant had entered into purchase and sale transactions of the above stated land, which according to appellant's claim were completed in partnership with Shri Manish K. Patel. However, Shri Manish K. Patel till date is denying any involvement in transactions of this property. Some of the undisputed facts regarding these transactions are as follows:  When confronted ShriKhimjibhai S. Bhadiyadara and his son ShriGovind K. Bharwad in the statement u/s. 132(4) accepted the transactions as true and that the land was purchased for Rs.23,13,18,000/-. They agree to pay taxes on the difference of disclosed consideration of Rs.4,86,14,000/- and the actual sale consideration.  Appellant has also accepted the amount of Rs. 23,13,18,000/- as the true and actual value for which the land has been sold.  The appellant has also accepted that at least initially he alone was involved in purchasing the land from Shri Mohan R. Munjani and Shri Ganesh Munjani, in his statement dt. 05.06.2012. Page | 22 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel 10.2 However, the appellant's claim that after he entered into purchase deal, Shri Manish K. Patel was brought into the deal as a 40% partner due to financial crunch; has been completely and vehemently denied by Shri Manish K Patel who has denied any involvement with the deal. Whereas the appellant claims that he has purchased the land from Shri Mohan R. Munjani and Shri Ganesh Munjani for a consideration of Rs. 18,40,32,000/- the sellers say that they have sold the land only for Rs. 15,00,00,000/-. The assertion of the sellers is supported by recording on seized documents found during the course of search in the case of Shri Mohan R. Munjani. Shri Manish K. Patel, who has completely and vehemently denied any involvement with the deal; has submitted detailed arguments against appellant's claim that he was involved in the deal including the following: a) It is asserted that search and survey both were conducted at his residential & business premises from where no document were seized in respect of said land transaction. b) In the post search inquiry, statement of Shri Manish K. Patel was recorded u/s. 131 on 13.06.2012 and he totally denied the seized evidences (i.e. MOU & pocket diary) as well its transaction. c) He further stated that the signatures on the impugned Sauda Chitthi and pocket diary are not his and this fact can be ascertained from comparison of signature on official documents and Passport, PAN card etc. statements during search, numerous documents seized in search etc. The above assertions of Shri Manish K Patel regarding non-seizure of even a single document or evidence with regard to this property during search at his different premises and that the signatures on the sauda chhithi are not matching even prima facie with signatures on his official documents, signatures taken on various forms and documents during search etc. are true. One more important fact is that even if it is accepted that Shri Manish K Patel was subsequently associated with the deal; there is always a possibility that this difference was not known to him and the appellant kept the profit to himself. It is to be seen in the light of the fact that Shri Mohan R. Munjani and Shri Ganesh Munjani have stated that they have entered the deal only with appellant and not with Shri Manish K. Patel. They have denied even knowing Shri Manish K Patel. Besides, the fact that the total consideration of Rs. 15,00,00,000/- was found noted behind the copy of document during the course of search at Munjanis place; leads to a conclusion that the appellant has not come out with the entire truth. In light of the above, weighing all the evidences and facts and circumstances, it is held that the appellant ShriShankarlal C. Shah not only initially entered the purchase agreement with Munjanis independently (as accepted by him) but also completed the entire deal including sale to Khimji S. Bhadiyadra on his own. Page | 23 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel Therefore, the ground of appeal of the assessee is dismissed and the addition of Rs.2,04,19,200/- is confirmed as being undisclosed income earned outside books of accounts. The addition would not be u/s 68 as mentioned by the assessing officer. The assessment order is modified to that extent. Further, following my decision.as above, the income is directed to be enhanced by the following amounts: 1) Rs.1,89,14,400/- (40% of 4,72,86,0007-), the profit (Rs. 23,13,18,000 minus Rs. 18,40,32,000) which was claimed and assessed as shared by Shri Manish K. Patel; but held to be earned by appellant alone, in view of my decision that Shri Shankarlal C. Shah not only initially entered the purchase agreement with Munjanis independently (as accepted by him) bul also completed the entire deal including sale to Khimji S. Bhadiyadra on his own. 2) Rs.1,36,12,800/- (40% of 3,40,32,000/-), originally added in the case of Manish K. Patel in light of my decision as above. The addition/enhancement in appellant's case is all the more required because even if it is accepted that Shri Manish K Patel was subsequently associated with the deal; there is always a possibility that this difference was not known to him and the appellant kept the profit to himself. Therefore, the income is directed to be enhanced by Rs.3,25,27,200/- (Rs.1,89,14,400/- plus Rs.1,36,12,800/-); being income earned outside books of account and not disclosed to the department. I am satisfied that the appellant has furnished inaccurate particulars of his income, thereby not disclosing its correct income. Penalty proceedings under section 271(1)(c) of the Act are being initiated separately.” 8.3 Following my decision as above, the additions made in the case of the appellant are directed to be deleted. The grounds of appeal are therefore, allowed.” 34. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us. Learned DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel relied on the findings of the ld CIT(A). We have gone through the findings of ld CIT(A), as noted above. The ld CIT(A) has rightly concluded that assessee Shri Shankarlal C. Shah not only initially entered the purchase agreement with Munjanis independently (as accepted by him) but also completed the entire deal including sale to Khimji S. Bhadiyadra on his own. Therefore, we do not find any infirmity in the order of ld CIT(A). That being so, we decline to interfere with the order of Page | 24 ITA.1359 & 1481/AHD/2016 Assessment Year. 2012-13 Shankarlal C Shah & Manish K. Patel ld. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 35. In the result, appeal filed by the Revenue (in ITA No.1481/Ahd/2016) is dismissed. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced in the open court on 14/06/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 14/06/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr.PS/PS ITAT, Surat