The ITO, Ward-9(2), Ahmedabad V. Shri Alkesh Gulabchand Agarwal, Ahmedabad

ITA 1618/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1770 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-12-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 23-06-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PAGZD
• Keywords: Reopening of assessment; Unexplained investment; Sale consideration of property below Jantri Value; Fair market value; Valuation report; Reason to believe; Reassessment proceedings
• Section: 50C; 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING:1/12/2009 DRAFTED ON:2/12/200 9 ITA NO.1618/AHD/2006 ASSESSMENT YEAR : 1997-1998 ITO, WARD-9(2), VASUPUJYA CHAMBERS, A WING, 2 ND FLOOR, ASHRAM ROAD, AHMEDABAD VS. SHRI ALKESH GULABCHAND AGRAWAL 78, CHANDRANAGAR SOCIETY, NR. NAVRANG HIGH SCHOOL, ODHAV, AHMEDABAD. PAN/GIR NO. : ABYPAGZ14D (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.K.MEENA D.R. RESPONDENT BY: NONE O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF CIT(APPEALS)- XV, AHMEDABAD DATED 28.03.2006 IN APPEAL NO.CIT(A)X V/ITO.WD.9(2)/64/05- 06. 2. THE GROUNDS OF THE APPEAL READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN LA ND AMOUNTING TO RS.49,98,900/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE LEARNED ASSES SING OFFICER. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD . CIT(A) MAY BE SET- ASIDE AND THAT OF THE ORDER OF THE LEARNED ASSESSIN G OFFICER BE RESTORED TO THE ABOVE EXTENT. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS DECIDED THE ISSUE INVOLVED IN THE ABOVE GROUNDS OF APPEAL AS FOLLOWS: - 2. THE MAIN GROUND OF APPEAL IS AGAINST ADDITION O F RS.49,98,900/- AS ON MONEY PAID ON ACQUISITION OF LAND. THE FACTS OF THE CASE ARE THAT THE APPELLANT FILED RETURN OF INCOME DECLARING TOTAL IN COME OF RS.67,310/-. THEREAFTER THE ASSESSING OFFICER REOPENED THE ASSES SMENT U/S. 147 OF THE ACT ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 2 - AFTER RECORDING REASONS. THE ASSESSING OFFICER OBSE RVED THAT THE APPELLANT IS DEALING IN REAL ESTATE AND IS A PARTNER IN AGARWAL CORPORATION AND ADITI CORPORATION. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, IT WAS OBSERVED THAT THE APPELLANT HAD MADE BANAKHAT ON 12.7.06 FOR PURCHASE OF LAND IN BLOCK NO. 147 AND 144 AT VILLAGE GERATPUR, TAL. DAS CROI FROM SMT. ANANDIBEN NAVINCHANDRA RANA & OTHER. THE BANAKHAT WAS FOR PUR CHASE OF LAND ADMEASURING 11042 SQ. YDS. @ RS. 42 PER SQ. YD. AS PER THE SALE DEED DATED 7.12.09 FOR PURCHASE OF LAND OF BLOCK NO. 149 IT WA S FOUNT THAT THE LAND ADMEASURING 30959 MTS. ( 37026 SQ.YDS.) OF BLOCK NO . 149 WAS PURCHASED THE APPELLANT AT RS.5,55,000/-. AS PER THE VALUATION RE PORT OF PARAS S. RANGWALA. GOVT. REGISTERED MID APPROVED VALUER, THE LAIR MARK ET VALUE OF THE SAID LAND AS ON 12.7.96 WITH RS.150/- PER SQ.YD. AND THEREFOR E, ACCORDING TO THE ASSESSING OFFICER, THE FAIR MARKET VALUE OF LAND PU RCHASED BY THE APPELLANT WAS OF RS. 55,53,900/- AND THE DIFFERENCE AMOUNT OF RS.49,98,900/- WAS PROPOSED TO HE CONSIDERED AS ON MONEY PAID BY THE A PPELLANT AT THE TIME OF BANAKHAT AND THE ASSESSING OFFICER CONSIDERED THAT SUCH ON MONEY PAID WAS INVESTMENT FROM UNDISCLOSED SOURCES OF THE APPELLAN T AND THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE APPELLANT I N RESPONSE TO WHICH THE APPELLANT REPLIED ON 14/3/2005 SAYING THAT THE APPE LLANT DESIRED TO PURCHASE THE SAID LAND IN 1996 AND AT THAT TIME THE LAND WAS CLEAR WITH N.A., PLAN PASS ETC. AND IT WAS PERMITTED FOR CONSTRUCTION WORK BUT AFTER THE INQUIRY FROM AHMEDABAD MUNICIPAL CORPORATION IT WAS FOUND THAT T HE SAID LAND WAS EARMARKED FOR GARDEN AND OPEN SPACE BY AHMEDABAD MU NICIPAL CORPORATION AND THE APPELLANT COULD NOT MAKE ANY CONSTRUCTION W ORK THE SAID LAND AND THEREFORE, THERE WAS DISPUTE BETWEEN THE PURCHASER AND SELLER AND AFTER LAPSE OF THREE YEARS LAPSE AS PER UNDERSTANDING THE COST PRICE OF LAND WAS REDUCED AND ALTERNATIVELY IT WAS PURCHASED FOR RS. 5,55,000/- IN THE SAME POSITION OF THE LAND I.E. AS DISPUTED PROPERTY. THE RE WAS ALSO OBJECTION BY REGISTRAR AUTHORITY FOR STAMP DUTY VALUATION AND TH EY HAD CONSIDERED THE VALUE OF RS, 21,00,000/- AND LATER THE COST PRICE O F LAND WAS REDUCED TO RS. 5,57,262/-. THEREFORE, AS PER THE STAMP DUTY VALUAT ION AUTHORITY, THE COST PRICE OF THE LAND WAS RS.5,57,262/- ONLY. THE APPEL LANT'S CONTENTION WAS NOT ACCEPTED BY THE ASSESSING OFFICER AS VALUATION OF L AND IN QUESTION WAS MADE BY GOVERNMENT REGISTERED AND APPROVED VALUER AND TH E APPROVED VALUER CONSIDERED THE SIZE, SHAPE, LOCATION, FRONTAGE, DEP TH, GROUND LEVEL, NATURE OF OWNERSHIP, SURROUNDING, DEVELOPMENT AND VARIOUS OTH ER FACTORS AFFECTING THE VALUE OF OPEN PLOT OF LAND AND ADOPTED THE RATE AT RS.150/- PER SQ.YD. HENCE, THE FAIR MARKET VALUE OF PROPERTY PURCHASED BY THE APPELLANT WAS WORKED AS RS. 55,53,900/- AND THE DIFFERENCE AMOUNT OF RS. 49,98,900/-WAS CONCLUDED TO BE ON MONEY PAID BY THE APPELLANT AT T HE TIME OF BANAKHAT AND HE MADE ADDITION OF RS. 49,98,900/- AS UNEXPLAINED INVESTMENT IN LAND. 2.1 DISPUTING THE SAID ADDITION, THE AUTHORISED REP RESENTATIVE OF THE APPELLANT SUBMITTED THAT THE APPELLANT HAD ACQUIRED LAND IN THE ASSESSMENT YEAR 2000-01 FOR A SUM OF RS.5,55,000/-. THE ASSESS ING OFFICER MADE ADDITION ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 3 - IN THE ORDER OF ASSESSMENT UNDER APPEAL I.E. IN A.Y . 1997-98 ON THE BASIS OF BANAKHAT DATED 12/7/1996 VALUING THE LAND AT RS.55, 53,900/- AND REDUCING THERE-FROM SUM OF RS.5,63,000/-, THE BALANCE SUM OF RS.49,98,900/- WAS ADDED TO INCOME OF THE APPELLANT AS UNEXPLAINED INV ESTMENT FOR ON MONEY PAID AT THE TIME OF BANAKHAT ON 12/7/96. THE ASSES SING OFFICER MADE ADDITION AS ON MONEY PAID ON THE BASIS OF A REPORT OF APPROVED VALUER, PARAS S. RARIGWALA VIDE HIS REPORT DATED 25/3/2002. VALU ING THE LAND COMPRISED IN BLOCK NO. 149 AND NO. 147 @ RS.150/- SQ.YRD. IT WAS SUBMITTED BY THE AUTHORISED REPRESENTATIVE THAT THE ASSESSING OFFICE R ERRED IN ADOPTING THE SAID RATE OF RS. 150/- PER SQ.YRD ESTIMATED BY THE APPROVED VALUER, AS THE SAID REPORT CAN NOT BE THE BASIS FOR MAKING ADDITIO N NOT ONLY BECAUSE THE SAID REPORT IS ERRONEOUS ON FACTS EXPLAINED IN DETA IL TO THE ASSESSING OFFICER , BUT ALSO IT HAS NO EVIDENCE VALUE TO HOLD THAT THE APPELLANT HAS PAID ON MONEY TOTALING TO RS.49,98,900/- BECAUSE OF THE FOL LOWING REASONS: A) THE REPORT OF VALUER HAS NOT TAKEN INTO CONSIDER ATION FIRSTLY, A VITAL ASPECT OF THE TITLE TO USE THE LAND AS EXPLAINED TO THE AS SESSING OFFICER, WHEREBY THE SAID LAND AT BLOCK NO, 149 HAS BEEN KEPT BY MUNICIP AL CORPORATION FOR GARDEN & OPEN SPACE AND THEREFORE IT CANNOT BE USED FOR CO NSTRUCTION WHETHER FOR RESIDENTIAL OR FOR OTHER PURPOSES AND THEREFORE THE RE IS VAST AND TREMENDOUS FALL IN THE MARKET VALUE OF THE LAND IN COMPARISON TO A NORMAL LAND IN WHICH A WILLING BUYER AND WILLING SELLER WOULD AGREE TO BUY AND SELL AT A CERTAIN AMOUNT. SECONDLY, THE VALUATION REPORT IS A SHORT R EPORT WHICH DOES NOT MENTION ABOUT MAJOR PECULIARITIES OF LAND, WHETHER CONSIDERED OR NOT, LIKE 5 FT. DEPTH IN THE LAND GADHA (HOLE) FROM ROAD LEVEL. IT ALSO DOES NOT SHOW ANY COMPARABLE INSTANCE OF NEARBY OR ADJOINING LAND, TH E BASIS ON WHICH LAND HAS BEEN VALUED AND THEREFORE THE VALUATION PUT BY THE APPROVED VALUER IS WITHOUT ANY EVIDENCE, REASON AND B ASIS AND THEREFORE THE SAME IS ARBITRARY AND CAN NOT BE THE BASIS FOR ANY ADDIT ION. B) AS NO CROSS EXAMINATION WAS PROVIDED TO THE APPE LLANT ON THE THIRD PARTY VALUATION REPORT, THE SAME CAN NOT BE A PIECE OF EV IDENCE AGAINST THE APPELLANT AND HENCE THE ADDITION MADE BY THE ASSESS ING OFFICER IS BAD IN LAW AS WELL AS ON FACTS. C) THE VALUER HAS ONLY GIVEN AN OPINION ON AN ESTIM ATE, THE VALUER IN HIS REPORT HAS NOT STATED THAT ANY ON MONEY IS TRANSACT ED AND THEREFORE ON A 3RD PARTY ESTIMATE AND OPINION, THERE CAN NOT BE AN ADD ITION FOR ON MONEY PAID UNLESS ANY EVIDENCE FROM SELLER AND BUYER TO THE TR ANSACTION IS AVAILABLE. D) WITHOUT PREJUDICE TO ABOVE, IT HAS BEEN HELD BY COURTS THAT THERE CAN NOT BE ADDITION TO THE CONSIDERATION DECLARED IN TRANSA CTION FOR PROPERTY, BASED OR, THE MARKET VALUE, WHETHER SUPPORTED BY ANY VALU ER'S REPORT OR NOT, UNLESS IT IS SHOWN THAT MONEY MORE THAN DECLARED OR DISCLO SED BY THE APPELLANT IS TRANSECTED I.E. IS PAID BY THE BUYER AND RECEIVED B Y THE SELLER. THERE IS NO MATERIAL OR EVIDENCE AT ALL BEFORE THE ASSESSING OF FICER AS EXPLAINED IN PARA 3 HEREINAFTER IN DETAIL, THAT ANY ON MONEY IS PAID OR RECEIVED BY THE BUYER AND SELLER RESPECTIVELY. IT IS HELD SO IN SUPREME COURT DECISION IN K.P.VARGHESE V/S ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 4 - ITO REPORTED IN 131 ITR 597, WHICH HAS BEEN FOLLOWE D OR RELIED BY SEVERAL OTHER COURTS. E) WITHOUT PREJUDICE TO THE FACT THAT THE RE PORT OF THE VALUER BEING WITHOUT ANY COMPARABLE INSTANCES OF OTHER LAND AND WITHOUT ANY EVIDENCE OR BASIS GIVEN IN REPORT, SUCH REPORT HAS GOT TO BE RE JECTED. EVEN IF IT IS PRESUMED TO BE A PIECE OF EVIDENCE, A-S HELD BY H ONOURABLE SUPREME COURT IN CBI V/S V.C.SHUKLA AND OTHERS REPORTED IN 1 998 3SCC 410 AND SEVERAL OTHER ITAT AHMEDABAD AND OTHER DECISIONS, SUCH VALUATION REPORT OR STATEMENT OF OPINION OF ESTIMATED VALUE BY 3 RD PARTY, CAN NOT FASTEN ANY OTHER PERSON WITH LIABILITY OF TAX WITHOUT ANY DEPE NDENT EVIDENCE AS TO ANY MONEY PAID BY THE APPELLANT AS EXPLAINED HEREIN AFT ER. 2.2 WITHOUT PREJUDICE TO THE FACT THAT THE VA LUER'S REPORT IS ERRONEOUS AND IS NOT A ' VALID DOCUMENT AND ON THE BASIS OF WHI CH NO ADDITION CAN BE MADE, THERE IS NO EVIDENCE AT ALL BEFORE THE ASSESS ING OFFICER TO HOLD THAT THE APPELLANT HAS PAID ANY ON MONEY TOTALLING TO RS.49, 98,900/- BECAUSE OF THE FOLLOWING REASONS. A) THERE IS ABSOLUTELY NO EVIDENCE OR MATERIA L AS NEITHER THERE IS ANY PAPER OR STATEMENT FOUND FROM THE APPELLANT DURING ASSESSMENT PROCEEDINGS OR OTHERWISE, NOR THERE IS ANY MATERIAL OR EVIDENCE OF 3RD PARTY INCLUDING THE SELLERS OF LAND I.E THE PARTY TO THE DANAKHAT FROM WHOM THE APPELLANT HAS BOUGHT THE LAND TO THE FACT THAT THE APPELLANT HAS PAID ANY ON MONEY ON THE PURCHASE OF LAND AND THEREFORE, THE ADDITION HAS B EEN MADE MERELY OUT OF SUSPICION AND SURMISES. B) IT WAS SUBMITTED BY THE AUTHORISED REPRESENTATIV E THAT IN ANY TRANSACTION IF ANY ON MONEY IS PAID IT WOULD BE IN THE KNOWLEDGE OF EITHER THE BUYER OR THE SELLER. THE APPELLANT BUYER HAS AL READY DENIED THAT HE HAS NOT PAID ANY ON MONEY AND ANOTHER PARTY TO THE AGRE EMENT I.E. SELLERS HAVE ALSO NOT STATED ANYWHERE IN A IDLER, STATEMENT OR D OCUMENT THAT THE SELLERS HAVE RECEIVED ANY ON MONEY AND THEREFORE, THERE II; NO MATERIAL OR EVIDENCE WITH THE ASSESSING OFFICER TO TAKE A PLEA THAT THE APPELLANT HAS PAID ANY ON MONEY MUCH LESS TO PROVE THAT ANY ON MONEY IS PAID BY THE APPELLANT . C) THAT AS PER THE ASSESSING OFFICER , IF APPELLANT BUYER HAS PAID ANY ON MONEY TO FOUR PERSONS BEING SELLERS, THE SELLERS MU ST HAVE RECEIVED SUCH ON MONEY IF PAID BY THE APPELLANT BUYER. BUT THE APPEL LANT UNDERSTANDS THAT NO ADDITIONS ARC MADE IN THE ASSESSMENTS OF THE SELLER S AND THEREFORE IT MAKES CLEAR THAT THE ADDITION HAS BEEN MADE MERELY IN THE HANDS OF APPELLANT BUYER OUT OF SUSPICION. D) THE APPELLANT REFERRED TO THE REASONS RECORDED B Y THE ASSESSING OFFICER U/S 147 OF I.T. ACT, WHICH STATES ABOUT 10 PURCHASE RS AND 1/10TH SHARE OF APPELLANT . FURTHER THE ASSESSING OFFICER IN QUESTI ON NO.10 IN STATEMENT OF OATH BY THE APPELLANT IN COURSE OF ASSESSMENT PROCE EDINGS, HAD ASKED ABOUT THE REMAINING LAND IN BLOCK NO. 147,WHICH THE APPEL LANT HAD NOT PURCHASED. FROM THE PAPERS MADE AVAILABLE BY THE ASSESSING OFF ICER IN REPLY TO QUESTION NO. 10, THE APPELLANT HAS MENTIONED THAT HE DID NOT KNOW ABOUT 9 OTHER ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 5 - PERSONS WHOSE NAMES ARE IN BANAKHAT RECEIPT. BOTH T HE AFORESAID FACTS AS TO THE REASONS RECORDED AND BANAKHAT RECEIPT BRINGS OU T THAT THERE ARE BANAKHATS FOR SIMILAR LAND IN BLOCK NO. 147 & 149 O THER THAN BY THE APPELLANT. THE APPELLANT UNDERSTANDS THAT ON MONEY ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE APPELL ANT ONLY AND NO SUCH ADDITION HAS BEEN MADE IN THE HANDS OF ANY OF SUCH 9 PERSONS, WHO HAVE ALSO MADE BANAKHAT AGREEMENT AND THEREFORE IT IS CLEAR T HAT THE APPELLANT ONLY HAS BEEN SUBJECTED TO SUCH ABSURD ADDITION OUT OF T HE 10 PERSONS BUYERS AS PER BANAKHAT, AND THEREFORE THE ADDITION IN THE ASS ESSMENT OF APPELLANT IS MERELY OUT OF SUSPICION AND SURMISES. E) THE ASSESSING OFFICER HAS MADE ADDITION AS UN DISCLOSED INVESTMENT. THE ASSESSING OFFICER HAS NOT APPLIED PROVISIONS OF SEC TION 69 BUT EVEN IF APPLICATION OF SECTION 69 IS PRESUMED, BURDEN IS ON THE REVENUE TO PROVE THAT ON MONEY IS PAID FOR INVESTMENT IN LAND AND REVENUE HAS NO MATERIAL AND EVIDENCE IN SUPPORT OF THE SAME. THE AUTHORISED REP RESENTATIVE RELIED UPON DELHI HIGH COURT DECISION IN CIT V/S NARESH KHATTAR HUF REPORTED IN 130 TAXMAN 15 IN WHICH APART FROM BURDEN ON REVENUE TO PROVE, IT IS HELD THAT EVEN A THIRD PERSON STATEMENT OF MAKING EXCESS INVE STMENT OVER THE AMOUNT DISCLOSED IN PROPERTY WOULD NOT BE SUFFICIENT MATER IAL TO CONCLUDE THAT THE FURTHER INVESTMENT HAS BEEN MADE BY A PERSON AND AD DITION CAN NOT BE MADE. THE HONOURABLE SUPREME COURT DECISION OF K.P. VARGHESE REFERRED EARLIER IN PARA 2(D) AND ANOTHER SUPREME COURT DECI SION IN CIT V/S DAULATRAM RAVANTMAL REPORTED IN 130 ITR 99 ALSO HAVE HELD T HAT BURDEN IS ON REVENUE TO PROVE, AS IT IS THE CLAIM OF THE DEPARTMENT TH AT ON MONEY IS PAID. 2.3 IT WAS SUBMITTED BY THE AUTHORISED REPRESE NTATIVE THAT , THE ASSESSING OFFICER HAS NO EVIDENCE OR MATERIAL TO MAKE ADDITI ON THAT THE APPELLANT HAS PAID ANY ON MONEY. ON THE CONTRARY, THE APPELLA NT STATED THAT THE PRICE OF RS.5,55,000/-AS PER SALE DOCUMENT DATED 7-12-99 IS THE CORRECT PRICE AND VALUE OF THE NATURE OF THE LAND BOUGHT BY APPELLANT . IT WAS CLARIFIED TO THE ASSESSING OFFICER THAT THE PRICE AS PER THE BARAKH AT AGREEMENT VAS ABOUT RS.42/- PER SQ. YARD . BUT LATER ON AFTER BANA KHAT THERE WAS DISPUTE BETWEEN THE SELLERS AND BUYER. THE DISPUTE HAD ARIS EN BETWEEN APPELLANT BUYER AND SELLERS AFTER BANAKHAT WAS EXECUTED AS TH E APPELLANT LATER KNEW THAT THE LAND WHICH WAS AGREED WITH THE SELLERS TO BUY UNDER BANAKHAT, WAS NOT HAVING CLEAR TITLE TO USE AS PER THE MUNICIPAL CORPORATION REGULATIONS. THE SAID LAND IN BLOCK NO, 149 WAS KEPT BY THE MUNI CIPAL CORPORATION FOR MUNICIPAL GARDEN AND OPEN SPACE ONLY AND WAS NOT AL LOWED FOR CONSTRUCTION OVER THE LAND FOR RESIDENCE OR ANY OTHER PURPOSES. IN THE BANAKHAT IT WAS CLEARLY MENTIONED IN PARA 3 THAT THE LAND WAS ACQUI RED WITH CLEAR AND MARKETABLE TITLE AND LATER ON GETTING THE INFORMATI ON AS TO NON USABLE LAND FOR CONSTRUCTION, THE DISPUTE AROSE AND AFTER A LAPSE OF ABOUT 3 YEARS DISPUTE GOT SETTLED BETWEEN THE APPELLANT AND S ELLERS AND THE LOWER PRICE OF RS. 5,55,000/-WAS FIXED AND WAS PAID. THE PRICE OF RS.5,55,000/- WAS ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 6 - SUBJECT TO THE STAMP DUTY PROCEEDINGS BY STAMP VAL UATION AUTHORITY. THE STAMP VALUATION AUTHORITY AFTER HEARING THE APPELLA NT 'S CASE, AS THE LAND BEING NOT USABLE FOR THE CONSTRUCTION WORK ETC. AND WAS FOR THE PURPOSE OF MUNICIPAL GARDEN AND OPEN SPACE BY THE MUNICIPAL CO RPORATION ONLY, ASSESSED THE VALUE OF LAND SOLD BY THE APPELLANT AT RS.5,57,262/- WITH AN INCREASE OF RS.2,262/-IN VALUE AS PER SALE DOCUMENT . THE AUTHORISED REPRESENTATIVE ENCLOSED A COPY OF SALE DEED IN WHIC H IN THE LAST PAGE OF DOCUMENT, BY ORDER DATED 22-08-2003, STAMPS VALUA TION AUTHORITY HAS ASSESSED VALUE AT RS.5,57,262/- THEREFORE, THER E IS NO EVIDENCE BEFORE THE ASSESSING OFFICER THAT ANY ON MONEY WAS PAID OVER THE PRICE OF LAND OF RS.5,50,000/-. THE PRICE PAID AFTER REDUCTION OF RATE AT THE TIME OF SALE IS THE CORRECT PRICE PAID BY THE APPELLANT, DULY APPROVED BY APPROPRIATE GOVERNMENT AUTHORITY OF THE STAMPS. IT WAS MENTION ED THAT PRESENTLY W.E.F.1-4-2003, THE INCOME TAX ACT HAS EVEN INCORPO RATED SECTION 50C OF I.T. ACT IN WHICH THEY HAVE BROUGHT THE LAW WHEREIN TH E ASSESSED VALUE BY STAMP AUTHORITY IS CONSIDERED TO BE A VALUE FOR SAL E/TRANSACTION UNDER THE PROVISION OF THE CAPITAL GAIN TAX. THEREFORE ALSO T HERE IS NO REASON FOR THE ASSESSING OFFICER TO DEVIATE FROM THE VALUATION OF THE APPROPRIATE STAMP AUTHORITY OF THE GOVERNMENT WHICH HAS BEEN ACCEPTED AND APPROVED BY THE INCOME TAX ACT, AND WHICH IS THE ONLY REASONABLE AN D CORRECT VALUE AGAINST THE ABSURD AND ERRONEOUS VALUATION OF APPROVED VALU ER, WHICH IS BASED ON WRONG FACTS AND WITHOUT CONSIDERING THE DEFECTIVE A ND UNCLEAR TITLE FOR USE OF THE LAND. THE ASSESSING OFFICER MADE ADDITION IN SP ITE OF EXPLANATION OF THE APPELLANT AS TO THE TWO VITAL FACTORS MENTIONED HER EIN ABOVE AS TO THE NON AVAILABLE USE OF LAND FOR CONSTRUCTION AND AS TO AS SESSMENT BY REGISTRAR OF STAMP VALUATION AUTHORITY. THE ASSESSING OFFICER HA D NOT DENIED THE FACTS EXPLAINED AND EVEN HAS NOT GIVEN ANY REASONING FOR NOT ACCEPTING THE VALID EXPLANATION IN HIS ORDER OF ASSESSMENT AND THEREFOR E, THE ADDITION MADE IS MERELY OUT OF SUSPICION AND SURMISES AND IS WITHOUT ANY BASIS AND IS BAD IN LAW. 2.4 IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS MADE ADDITION HOLDING AND OBSERVING IN HIS SHOW CAUSE NOTICE REPRODUCED I N PARA 2 OF THE ORDER THAT THE APPELLANT HAS PAID ON MONEY AT THE TIME OF BANAKHAT I.E. ON 12/7/96, BUT THE ASSESSING OFFICER FAILED TO TAKE I NTO COGNIZANCE THE FACTUAL ASPECT THAT THE BANAKHAT ON 12/7/96 WAS FOR LAND AD MEASURING 11402 SQ. MTRS, WHEREAS THE FINAL PURCHASE AND DOCUMENT MADE BY THE APPELLANT WAS FOR THE LAND OF 37026 SQ. YARDS. AS ON 12/7/96 BANA KHAT WAS FOR 11402 SQ. YRDS BUT THERE WAS NO SUCH BANAKHAT FOR BALANCE LAN D I.E. 37026 (-) 11402 =25624 SQ, YRDS. SO AT THE MOST IN ANY CONTINGENCY EVEN IF ASSESSING OFFICER'S VIEW IS PRESUMED, THAN ALSO THERE CAN BE ON MONEY O NLY FOR 1402 SQ YRDS BUT IN ANY CASE IT CAN NEVER BE ON BALANCE 25624 SQ. YR DS LAND WHICH IS NOT EVEN PART OF BANAKHAT AS ON 12-7-1996. THEREFORE ORDER P ASSED AND ADDITION MADE IS NOT ON ANY BASIS OR EVIDENCE, BUT IS ALSO W ITHOUT EVEN APPLICATION OF ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 7 - MIND AND IS MADE FOR THE SAKE OF MAKING ADDITION ON LY. THE AUTHORISED REPRESENTATIVE ENCLOSED A COPY OF LETTER OF APPROPR IATE AUTHORITY OF MUNICIPAL CORPORATION CLARIFYING FURTHER THAT LAND AT BLOCK NO. 149 IS KEPT BY THE MUNICIPAL CORPORATION AS GARDEN AND OPEN SPACE, WHEREIN THE RELEVANT FINAL RESERVATION & ZONING IS PASSED ON 25-2-99 AFT ER SEVERAL YEARS OF PROCESS OF FORMALITIES. IN VIEW OF AFORESAID FACTS AND POSI TION IN LAW THE AUTHORISED REPRESENTATIVE CONTENDED THAT THE ADDITION MADE BY THE ASSESSING OFFICER BE DELETED. 2.5 I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHO RISED REPRESENTATIVE CAREFULLY AND HAVE ALSO GONE THROUGH THE DETAILS FILED BY THE AUTHORISED REPRESENTATIVE. I HAVE ALSO CONSIDERED THE OBSERVA TIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. DURING THE COURSE OF APPEAL HEARING .THE ASSESSING OFFICER WAS DIRECTED U/S,250 (4) OF THE I.T. ACT VIDE THIS OFFICE LETTER DATED 23.1.2006 TO EXAMINE THE SELLER OF LAND AND RECORD STATEMENT FROM SMT.ANANDIBEN NAVINCHANDRA RANA AS T O AT WHAT PRICE THE LAND WITH BLOCK NO. 149 WAS SOLD TO THE APPELLANT A ND THE LAND WITH BLOCK NO. 147 WAS SOLD TO JAYDEV RAJENDRASINGH RANA AND OTHER S ON THE SAME DATE AND WHETHER ANY CASH /ON MONEY WAS RECEIVED BY HER FROM THE PURCHASERS IN ADDITION TO THE PRICE RECORDED IN THE DOCUMENT. HE WAS ALSO DIRECTED TO OBTAIN COMPARATIVE SALE INSTANCES OF SALE OF LAND I N THE ADJACENT AREA AROUND THE DATE OF TRANSACTION .NO REPLY WAS RECEIVED FROM THE ASSESSING OFFICER. A REMINDER WAS ISSUED TO HIM ON 15.2.2006 TO REPLY BY 24.2.2006. BUT NO REPLY WAS RECEIVED FROM THE ASSESSING OFFICER TILL THE DA TE OF THIS ORDER. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 49,93,90 0/- AS ON MONEY PAID BY THE APPELLANT FOR ACQUISITION OF LAND, BASED ON THE VALUER'S REPORT THAT FAIR MARKET VALUE OF THE SAID LAND AS ON 12.7.96 IS RS, 150/- PER SQ. YD.. THE REPORT RELIED UPON BY THE ASSESSING OFFICER IS THE REPORT OF SRI PARAS S RANGWALA, GOVT. REGISTERED AND APPROVED VALUER AND NOT THE REPORT OF DEPARTMENT VALUATION OFFICER. THE SAID REPORT IS ONLY AN EST IMATE AND IT IS NOT BASED ON COMPARABLE SALE INSTANCES IN THE SAID LOCALITY. THE VALUER HAS NOT GIVEN ANY BASIS AS TO HOW HE HAS VALUED THE FAIR MARKET VALUE OF THE LAND @ RS. 150/- PER SQ. YD. WHEN SRI PARAS S. RANGWALA WAS ASKED B Y THIS OFFICE TO GIVE COMPARATIVE SALE INSTANCES, HE HAS CITED RATE OF RS . 82/- PER SQ. YD. FOR A MUCH SMALLER PLOT OF 788.80 SQ.YDR. THE VALUER HA S GIVEN A REPORT WITHOUT CALLING FOR OBJECTION FROM THE APPELLANT AND WITHOU T GIVING OPPORTUNITY OF HEARING TO THE APPELLANT. THEREFORE, OBTAINING CO MPARATIVE INSTANCES FROM THE VALUER AN OPPORTUNITY WAS GIVEN TO THE AUTHORIS ED REPRESENTATIVE BY PROVIDING COPY OF REPLY RECEIVED FROM SRI PARAS RAN GWALA VALUER. THE AUTHORISED REPRESENTATIVES REPLIED STATING THAT THE SECOND AND THIRD INSTANCES CITED BY HIM ARE RELATED TO SALE OF BUILD ING WITH LAND AND THE FIRST LAND INSTANCE OF RS.82/- PER SQ.YD. CITED BY THE VA LUER PERTAINED TO A LAND WITH CLEAR TITLE AND IS NOT COMPARABLE LAND AS THE LAND PURCHASED BY THE ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 8 - APPELLANT DID NOT HAVE CLEAR TITLE AS IT WAS UNDER RESERVATION FOR OPEN PLOT AND GARDEN BY THE MUNICIPAL CORPORATION . 2.6 FURTHER THE PRICE OF LAND HAS BEEN FIXED AT RS. 5,57,262/- AS PER THE STAMP DUTY VALUATION AUTHORITY . A LETTER WAS WRITT EN BY THIS OFFICE TO THE SUB-REGISTRAR, AHMEDABAD-5, NAROL, ASKING HIM TO GI VE COMPARATIVE SALE INSTANCES IN THE ADJACENT AREA. THE SUB REGISTRAR R EPLIED ON 23.3.2006 AND HE HAS GIVEN COMPARATIVE RATE OF LAND OF SURVEY NO. 14 7 SOLD TO JAYDEV RAJENDRA SINGH AND OTHERS, WHICH IS THE NEIGHBOURING PLOT OF LAND SOLD FOR RS. 7,70,000/- . AS PER THE SALE DOCUMENT FOR THE SAID LAND THAT LAND HAD AREA OF 42897 SQ.MTR. OR 51304 SQ.YDS. WHICH WORKS OUT TO @ RS. 15/- PER SQ. YD. THE ABOVE SALE INSTANCE AND THE VALUE FIXED BY STAMP DU TY VALUATION AUTHORITY CLEARLY INDICATE THAT THE VALUE 01 LAND SHOWN BY TH E APPELLANT IN THE SALE DEED IS THE COMPARABLE VALUE 2.7 THE ASSESSING OFFI CER HAS PRESUMED THAT THE BALANCE AMOUNT OF RS. 49,98,900/- HAS BEEN PAID BY THE APPELLANT IN CASH FOR THE PURCHASE OF LAND. THERE IS NO EVIDENCE IN F ORM OF DOCUMENTS OR LOOSE SLIPS SHOWING SUCH CASH PAYMENT BY THE APPELLANT ON CASH RECEIPT BY THE SELLER. THE ASSESSING OFFICER HAS NOT REFERRED LO A NY EXTRA PAYMENT IF ANY MADE LO THE SELLER BY OTHER PURCHASERS NOR HE HAS S UPPORTED HIS FINDING OR VALUATION OF LAND BY OTHER COMPARABLE CASES . THE A SSESSING OFFICER HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO SUPPORT HIS V ALUATION. THE RATE AT WHICH THE APPELLANT PURCHASED THE LAND IS SUPPORTED BY THE COMPARABLE RATE FOR ADJACENT LAND CITED BY THE SUB-REGISTRAR, NAROL FOR THE SURVEY NO. 147 AND ALSO SUPPORTED BY THE STAMP VALUATION AUTHORITY. FU RTHER ACCORDING TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF K. P. VARGHESE V/S. ITO REPORTED IN 131 ITR 597, THE BURDEN IS ON THE REVEN UE TO PROVE THAT MONEY MORE THAN DECLARED VALUE IN THE SALE DEED HAS BEEN PAID BY THE BUYER AND IN ABSENCE OF ANY MATERIAL OR EVIDENCE FOR PAYMENT OF MONEY OVER AND ABOVE THE PRICE STATED IN THE SALE DEED, NO ADDITION CAN BE MADE. AS PER THE PROVISIONS OF SECTION 69 OF THE ACT THE BURDEN IS O N THE REVENUE TO PROVE THAT ON MONEY HAS BEEN PAID FOR MAKING ANY INVESTME NT IN THE LAND BUT THE ASSESSING OFFICER HAS NOT DISCHARGED THIS BURDEN AS NO SUCH EVIDENCE HAS BEEN BROUGHT OUT IN THE CASE OF THE APPELLANT. THE APPELLANT HAS EXPLAINED THE CIRCUMSTANCES FOR WHICH THE RATE OF PURCHASE WA S LOWER THAN THE RATE MENTIONED IN THE BANAKHAT, MAINLY BEING DUE TO RESE RVATION OF LAND BY AHMEDABAD MUNICIPAL CORPORATION AND AUDA FOR GARDEN AND OPEN SPACE WHICH PROHIBITS THE APPELLANT TO MAKE CONSTRUCTION ON THE LAND. IN VIEW OF THE ABOVE FACTS AND ABSENCE OF EVIDENCE TO SHOW THA T THE APPELLANT HAS PAID EXTRA MONEY AND THE COMPARATIVE SALE INSTANCE FOR T HE ADJOINING LAND WHICH HAS BEEN SOLD @ RS. 15/- PER SQ. YD, I DO NOT FIND ANY JUSTIFICATION FOR ADDITION OF RS. 49,98,900/- AS EXTRA MONEY PAID ON PURCHASE OF LAND. ACCORDINGLY, THE ADDITION OF RS. 49,98.900/- IS DELETED. 3. THE SECOND GROUND OF APPEAL IS AGAINST REOPENING OF ASSESSMENT. THE AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ONLY B ASIS FOR INITIATING THE ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 9 - PROCEEDINGS U/S 148 OF IT ACT BEING REPORT OF VALUE R, WHICH ITSELF IS NOT A VALID PIECE OF EVIDENCE OR MATERIAL, BECAUSE IT IS MERELY AN OPINION AND IS ERRONEOUS AND THERE IS NO MATERIAL AT ALL BEFORE TH E ASSESSING OFFICER TO HAVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT. HENCE THESE PROCEEDINGS ARE WITHOUT ANY JURISDICTION AND BAD IN LAW. THE ONLY BASIS FOR ASSUMING JURISDICTION BY AS SESSING OFFICER IS THE VALUATION REPORT AND AS HELD BY SEVERAL C OURTS AS PER CITATIONS SUBMITTED VALUATION REPORT CAN BE USED IN ASSESSMENT PROCEEDINGS WHICH IS MERELY AN OPINION AND CAN NOT BE THE BASI S FOR REASON TO BELIEF U/S 147 OF I.T. ACT FOR REASSESSMENT PROCEEDINGS AND TH EREFORE ALSO THESE PROCEEDINGS ARE WITHOUT JURISDICTION. THIS GRO UND OF THE APPELLANT IS DISMISSED AS I FIND THAT THE ASSESSMENT HAS BEEN VA LIDLY REOPENED. 4. NOTICE OF HEARING WAS SENT TO THE RESPONDENT THR OUGH LEARNED DEPARTMENTAL REPRESENTATIVE WHICH WAS SERVED ON THE RESPONDENT ON 09.11.2009 AS EVIDENCED BY THE LETTER NO.WD.9(2)/SERVICE OF NO TICE/ITAT/ALKESH/2009-10 DATED 10/11/2009 OF INCOME TAX OFFICER, WARD 9(2), AHMEDABAD PLACED ON RECORD. NONE WAS PRESENT ON BEHALF OF THE RESPONDEN T WHEN THE CASE WAS CALLED FOR HEARING AND NEITHER ANY ADJOURNMENT APPLICATION WAS FILED. THE BENCH WAS OF THE VIEW THAT THE APPEAL CAN BE DISPOSED OFF IN THE ABSENCE OF THE RESPONDENT CONSIDERING THE ARGUMENTS OF LEARNED DEPARTMENTAL R EPRESENTATIVE AND THE MATERIALS AVAILABLE ON RECORD. HENCE, THE APPEAL WA S HEARD EX-PARTE QUA THE RESPONDENT AND DISPOSED OF CONSIDERING THE ARGUMENT S OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND THE MATERIALS AVAIL ABLE ON RECORD. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED O N THE ORDER OF THE LEARNED ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PU RCHASED PLOT OF LAND OF BLOCK NO. 149 AT VILLAGE GERATPUR, TAL. DASCROI FROM SMT. ANANDIBEN NAVINDCHANDRA RANA & OTHERS FOR RS.5,55,000/-. IT IS NOT IN DISPU TE THAT THIS AMOUNT OF CONSIDERATION AGREES WITH THE REGISTERED SALE DEED. THE LEARNED ASSESSING OFFICER FOUND ON THE BASIS OF A REPORT OF PARAS S. RANGWALA , GOVERNMENT REGISTERED ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 10 - APPROVED VALUER OBSERVED THAT THE MARKET VALUE OF T HE SAID PLOT WAS RS. 55,53,900/-. ON THE BASIS OF THE ABOVE REPORT, THE LEARNED ASSESSING OFFICER TREATED THE DIFFERENCE AMOUNT OF RS 49,98,900/- AS UNEXPLAINED INVESTMENT OF THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE AS SESSEE. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) VIDE HIS DETAIL ED ORDER FOR THE REASONS STATED THEREIN, DELETED THE ABOVE ADDITION. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). WE FIND THAT R EVENUE HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT ANY AMOUNT MORE THA N WHAT WAS STATED IN THE REGISTERED DEED OF SALE WAS IN FACT PAID BY THE ASS ESSEE. IN ABSENCE OF ANY SUCH MATERIAL, IN OUR CONSIDERED OPINION, THE LEARNED AS SESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION ONLY ON THE BASIS OF A VALUATION REPORT. OUR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P.VARGHESE VS. ITO REPORTED IN (1981) 131 ITR 597 (SC) WHEREIN IT WAS HELD THAT IT IS A WELL-SETTLED RULE OF LAW THAT THE ONUS OF ESTABLISHING THAT THE CONDITIONS OF TAXABILITY ARE FULFILLED IS ALWAYS ON THE REVENU E AND THE BURDEN LIES ON THE REVENUE TO SHOW THAT THERE IS AN UNDERSTATEMENT OF THE CONSIDERATION. MOREOVER, TO THROW THE BURDEN OF SHOWING THAT THERE IS NO UND ERSTATEMENT OF THE CONSIDERATION ON THE ASSESSEE WOULD BE TO CAST AN A LMOST IMPOSSIBLE BURDEN UPON HIM TO ESTABLISH A NEGATIVE, NAMELY, THAT HE DID NO T RECEIVE ANY CONSIDERATION BEYOND THAT DECLARED BY HIM. WE THEREFORE, DO NOT F IND ANY MERIT IN THIS APPEAL OF THE REVENUE AND THE SAME IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER SIGNED, DATED PRONOUNCED IN THE COURT ON 11/ 12/2009. SD/- SD/- ( T.K. SHARMA ) ( N.S. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 11/12/2009 PREPARED AND COMPARED BY : PARAS# ITA NO .1618/AHD/2006 M/S.ALKESH GULABCHAND AGRAWAL ASST.YEAR -1997-98 - 11 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD