Kiran Laxminarayan Mantri, Latur V. Assistant Commissioner of Income-tax,

ITA 1712/PUN/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9224 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER . / ITA NO.1712/PUN/2016 / ASSESSMENT YEAR : 2011-12 KIRAN LAXMINARAYAN MANTRI, MANTRI CONSTRUCTIONS, RAJIV GANDHI CHOWK, LATUR 413531 PAN : AAVPM0197R VS. ACIT, LATUR CIRCLE, LATUR APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PA SSED BY THE CIT(A)-2, AURANGABAD ON 06-06-2016 IN RELATION TO THE ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMA TION OF THE ADDITION OF RS.38,00,000/- AS UNACCOUNTED INVESTME NT IN LAND. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS AS CIVIL CONTRACTOR. HE IS ALSO INVOLVED IN SALE AND PURCHASE OF PLOTS. A SURVEY ACTION WAS TAKEN AGAINST THE A SSESSEE SOMETIME IN AUGUST 2013, DURING THE COURSE OF WHICH THE AS SESSEE DISCLOSED CERTAIN INCOME. ON THIS BASIS, THE ASSESSING OFFICE R (AO) ASSESSEE BY SHRI VARDHAMAN JAIN REVENUE BY SHRI SUDHENDU DAS DATE OF HEARING 04-08-2021 DATE OF PRONOUNCEMENT 05-08-2021 ITA NO.1712/PUN/2016 KIRAN LAXMINARAYAN MANTRI 2 INITIATED RE-ASSESSMENT PROCEEDINGS. THE ASSESSEE HAD PUR CHASED A PIECE OF LAND AT ZONE NO.12, GAT NO.122 AT VILLAGE HARANGAL IN THE JOINT NAME WITH MR. NITIN NAVANDAR FOR A SUM OF RS.45.00 LAK H AND THE REGISTERED SALE DEED WAS EXECUTED ON 02-08-2010. AN AGREEMENT DATED 17-06-2010 WAS FOUND DURING THE COURSE OF SURVEY , WHICH INDICATED THE PURCHASE PRICE OF THE ABOVE MENTIONED LAND AT R S.1.21 CRORE, FOR WHICH A REGISTERED SALE DEED WAS EXECUTED WITH CONSIDERATION OF RS.45 LAKH ONLY. THUS, THE AO INFERRED THAT THE TRANSACTION WAS ACTUALLY FINALIZED FOR A CONSIDERATION OF RS.1 .21 CRORE AND A SUM OF RS.76.00 LAKH WAS GIVEN AS ON-MONEY WHICH WAS UNEXPLAINED INVESTMENT. THE ASSESSEES ONE HALF SHARE O F RS.38.00 LAKH WAS ADDED AS INVESTMENT FROM UNDISCLOSED SOURCES. THE LD. CIT(A) UPHELD THE ASSESSMENT ORDER ON THIS SCORE, AGAINS T WHICH THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND G ONE THROUGH THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISP UTE THAT THE ASSESSEE PURCHASED THE LAND JOINTLY WITH MR. NITIN NAVANDAR F OR WHICH A REGISTERED SALE DEED WAS EXECUTED ON 02-08-2010 FOR A SUM OF RS.45 LAKH. AS AGAINST THAT, AN AGREEMENT DATED 17-06 -2010 INDICATING SALE PRICE OF RS.1.21 CRORE WAS FOUND DURING THE COURSE OF SURVEY. UNDER SUCH CIRCUMSTANCES, WE NEED TO DECIDE AS TO WHICH OUT ITA NO.1712/PUN/2016 KIRAN LAXMINARAYAN MANTRI 3 OF THESE TWO DOCUMENTS VIZ., THE AGREEMENT DATED 17-06-201 0 OR THE REGISTERED SALE DEED DATED 02-08-2010, SHOULD BE ACTED UP ON. 4. A COPY OF THE AGREEMENT IS AVAILABLE AT PAGE 91 ON WARDS OF THE PAPER BOOK. IT HAS BEEN EXECUTED ON A STAMP PAPER O F RS.100/-. THIS AGREEMENT RECORDS NAMES OF 15 PERSONS AS SELLERS A ND 2 PERSONS, INCLUDING THE ASSESSEE, AS BUYERS. AS AGAINST TH AT, IT IS SIGNED BY ONLY ONE OF THE SELLERS AND ONLY ONE OF THE BUYE RS. THE ASSESSEE EMPHASIZED BEFORE THE AUTHORITIES BELOW THAT THE DEA L WAS ACTUALLY FINALIZED WITH SALE CONSIDERATION AT RS.45.00 LAKH BECA USE IT WAS REALIZED THAT THE APPROACH ROADS TO THE PLOTS WERE NOT A PPROPRIATE AND THE EARLIER AGREED SALE CONSIDERATION WAS ON HIGHER SIDE . IT WAS ALSO PUT FORTH THAT THE AGREEMENT FOUND DURING THE COURSE O F SURVEY WAS MEANT ONLY FOR MARKET PURPOSE TO SHOW THE HIGHER SALE CONSIDERATION TO THE PROSPECTIVE BUYERS AFTER PLOTTING. DURING THE COURSE OF SURVEY WHEN THE ASSESSEE WAS CONFRONTED WITH THE AGREEMENT DATED 17-06-2010, HE CATEGORICALLY STATED IN RES PONSE TO QUESTION NO.34 THAT THE AGREEMENT ENTERED FOR RS.1.21 CRO RE DID NOT MATERIALIZE DUE TO LACK OF AMENITIES SUCH AS APPROACH ROADS ETC. FURTHER, IN RESPONSE TO QUESTION NO.156, THE ASSESSEE SUB MITTED THAT HE PURCHASED THE SAID LAND ALONG WITH MR. NITIN NAVANDAR FO R RS.45.00 LAKH ONLY WHICH WAS RECORDED IN THE BOOKS OF ACCOUNT AS ITA NO.1712/PUN/2016 KIRAN LAXMINARAYAN MANTRI 4 THE APPROACH ROAD WAS NOT PROPER THE VALUE OF THE SAID PROPERTY DECIDED AT LOWER RATE, I.E. INSTEAD OF RS.1.21 CRORE TO 45 LACS . THIS SHOWS THAT THE ASSESSEE FIRMLY DENIED THE REALITY AND GENUIN ENESS OF THE AGREEMENT DATED 17-06-2010 DURING THE COURSE OF SUR VEY ITSELF. DESPITE THAT, THE AO DID NOT RECORD STATEMENT OF ANY OF THE B UYERS OR WITNESSES TO ASCERTAIN THE VERACITY OF THE ASSESSEES VERSIO N. HE SIMPLY KEPT QUIET AND DID NOT CONSIDER IT PRUDENT TO EXAMIN E THE WITNESSES. 5. ON THE OTHER HAND, THE REGISTERED SALE DEED IS DATED 02-08-2010, WHOSE COPY IS AVAILABLE AT PAGE 98 ONWARDS OF THE PAPER B OOK. THIS SALE DEED IS DULY SIGNED BY ALL THE 15 SELLERS AND 2 BUYERS. IT IS THIS SALE DEED WHICH WAS ACTUALLY REGISTERED SHOWING SALE CONSIDER ATION AT RS.45.00 LAKH AND RECORDED IN THE BOOKS OF THE ASSESSEE ACCORDINGLY. 6. THUS, IT IS SEEN THAT THE AGREEMENT DATED 17-06-2010 THO UGH MENTIONS NAMES OF 15 PERSONS AS SELLERS BUT IS ACTUALLY SIGNE D BY ONLY ONE PERSON. SIMILARLY, IT RECORDS 2 PERSONS AS BUY ERS BUT HAS BEEN SIGNED ONLY BY ONE BUYER. FURTHER, THIS IS NOT A REGIS TERED DOCUMENT. THUS, ON ONE HAND, THERE IS THE AGREEMENT WHIC H IS PARTLY SIGNED BY THE PARTIES AND WHOSE CONTENTS HAVE NOT BEEN VE RIFIED BY THE AO AND ON THE OTHER THERE IS A REGISTERED SALE DEED DULY SIGNED BY ALL THE BUYERS AS WELL AS SELLERS INDICATING THE SALE CONSIDERATION OF ITA NO.1712/PUN/2016 KIRAN LAXMINARAYAN MANTRI 5 RS.45.00 LAKH. ANOTHER FACTOR WHICH WEIGHS IN ACCEPTING THE REGISTERED SALE DEED OVER THE AGREEMENT IS THAT THE STAMP VALU E OF THE PLOT OF LAND PURCHASED BY THE ASSESSEE, AS RECORDED IN TH E IMPUGNED ORDER, IS RS.12.09 LAKH, WHICH IS FAR AWAY FROM THE VALU E GIVEN IN THE AGREEMENT. IT IS FURTHER RELEVANT TO NOTE THAT THERE ARE TWO BUYERS OF THE PLOT OF LAND VIZ., THE ASSESSEE AND MR. NITIN NAVANDAR. THE LD. DR WAS DIRECTED TO GIVE THE STATUS OF THE ASSESSMENT IN THE CASE OF MR. NITIN NAVANDAR FOR ASCERTAINING IF SIMILAR ADDITION WAS MAD E IN HIS HANDS AS WELL. ON THE NEXT DATE OF HEARING, THE LD. DR SUBMITTED THAT NO ADDITION HAS BEEN MADE IN THE HANDS OF MR. NITIN NAV ANDAR. ON A TOTALITY OF THE FACTS, IT IS CLEAR THAT THE REGISTERED SALE DEE D NEEDS TO BE ACTED UPON IN PREFERENCE TO THE AGREEMENT DATED 17-0 6-2010. WE ARE, THEREFORE, SATISFIED THAT THE PLOT WAS PURCHASED FO R RS.45.00 LAKH AS GIVEN UNDER THE REGISTERED SALE DEED. THUS, NO A DDITION OF RS.38.00 LAKH MADE IN THE HANDS OF THE ASSESSEE IS CALLED FOR. WE, THEREFORE, ORDER TO DELETE THE SAME. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH AUGUST, 2021. SD/- SD/- ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 05 TH AUGUST, 2021 ITA NO.1712/PUN/2016 KIRAN LAXMINARAYAN MANTRI 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE CIT(A)-2, AURANGABAD 3. THE PR.CIT-2, AURANGABAD 4. 5. DR, ITAT, B BENCH, PUNE / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 04-08-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 05-08-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *