Deputy Commissioner of Income-tax, V. Nirajkumar Developes Pvt. Ltd., Pune

ITA 2033/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7139 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REENA JHA TRIPATHI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Search and seizure
• Section: 147; 148; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , ! ' # , % & BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.2033/PUN/2014 ! ( ( / ASSESSMENT YEAR : 2008-09 DY.COMMISSIONER OF INCOME TAX, CIRCLE-2, PUNE, 1 ST FLOOR, B WING, PMT BUILDING, SHANKARSHETH ROAD, PASHAN, PUNE 37. . / APPELLANT V/S NIRAJKUMAR DEVELOPERS PVT. LTD., S.NO.129/2, MONT VERT MARE, PASHAN SUS ROAD, PASHAN, PUNE. PAN :AABCN7947H. . / RESPONDENT / APPELLANT BY : SHRI REENA JHA TRIPATHI / RESPONDENT BY : SHRI PRAMOD SHINGTE ) / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) II, PUNE DT.28.07.2014 FOR THE ASSESSMENT YEAR 2008-09. / DATE OF HEARING : 29.12.2016 / DATE OF PRONOUNCEMENT: 10.02.2017 2 ITA NO.2033/PUN/2014 AY.NO.2008-09 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY STATED TO BE ENGAGED AS BUS INESS OF BUILDER AND DEVELOPER. ASSESSEE HAD FILED ITS RETURN OF INCO ME FOR A.Y. 2008-09 ON 28.11.2008 DECLARING TAXABLE INCOME AT RS.8,73,04,640/-. THEREAFTER THE CASE WAS RE-OPENED U/S 148 OF THE ACT BY ISSUING NOTICE DT.08.11.2011. IN RESPONSE TO THE NOTICE, ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FILED ORIGINALLY BE TREATED AS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148. THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143 R.W.S. 147 VIDE ORDER DT.30.03.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.39,11,04,640/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE O RDER DT.28.07.2014 IN APPEAL NO.(PN/CIT(A)-II/DCIT CIR-2/43/201 3- 14) DECIDED THE APPEAL IN FAVOUR OF ASSESSEE. AGGRIEVED B Y THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS :- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN ALLOWING THE ASSESSEE'S APPEAL BY DISALLOW ING THE ADDITION OF RS. 30,38,00,0001- AS UNDISCLOSED INCOM E ON ACCOUNT OF SUPPRESSION OF THE SALES CONSIDERATION. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT APPRECIATING THAT THE VALUE OF THE SALE AS P ER M.O.U SEIZED DURING COURSE OF SALE & SEIZURE ACTION REFLE CTED VALUE OF SALE CONSIDERATION OF RS. 1,44,00,0001-. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPRECIATE THE FACTUAL ASPECTS WHILE CONC URRING WITH THE ARGUMENT OF THE ASSESSEE THAT THE INFERENC E DRAWN BY THE ASSESSING OFFICER WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. 3 ITA NO.2033/PUN/2014 AY.NO.2008-09 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN MECHANICALLY ENDORSING THE ARGUMENT OF THE ASSESSEE THAT DURING THE RELEVANT POINT OF TIME, TH E PROPERTY MARKET WAS SLUGGISH AND DEPRESSED WHEN IN REALITY, IT WAS A PERIOD WHEN THERE WAS A BOOM IN T HE REAL ESTATE SECTOR. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THO UGH THERE WAS NO DIRECT DOCUMENTARY EVIDENCE SUGGESTING SUPPRESSION OF SALE CONSIDERATION, ALL THE CIRCUMST ANTIAL EVIDENCE AS BROUGHT OUT ABOVE CLEARLY INDICATED THE CLANDESTINE NATURE OF THE TRANSACTION AND WHAT WAS BEING SHOWN WAS AN ATTEMPT TO SUPPRESS THE REAL VALUE AM.O.UFLAGED IN A SERIES OF TRANSACTIONS INVOLVING DIFFERENT PARTIES INTO THE PICTURE. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OR ALL THE GROUNDS OF APPEAL. 3. BEFORE US, AT THE OUTSET, LD. D.R. SUBMITTED THAT THOUGH REVENUE HAS RAISED VARIOUS GROUNDS BUT SOLE CONTROVERS Y IS WITH RESPECT TO DELETION OF ADDITION. 4. AO NOTICED THAT ASSESSEE HAD ENTERED INTO M.O.U ON 19.04.2007 WITH KAKADE ESTATE DEVELOPERS PVT. LTD. (KEDPL) FOR SALE OF DEVELOPMENT RIGHTS IN RESPECT OF TOTAL LAND AGGREG ATING TO 120 ACRES, THE COST PER ACRE OF LAND WAS DECIDED AT RS .1.20 CRORES PER ACRE. AGAINST THE TOTAL CONSIDERATION OF RS .144 CRORE, AN ADVANCE OF RS.60 CRORES WAS PAID BY KAKADE ESTATE DEVELOPERS TO ASSESSEE. SUBSEQUENTLY, IT WAS STATED TH AT M.O.U WAS CANCELLED AND THE ADVANCES RECEIVED WERE RETURNED BACK TO KEDPL. SUBSEQUENTLY LAND ADMEASURING 4845.89 R I.E., AROU ND 121 ACRES WAS SOLD TO POONA INFRASTRUCTURE, A GROUP CONCERN, WHO THEREAFTER SOLD THE LAND THROUGH FOUR DIFFERENT SALE DE EDS TO KAKADE GROUP IN DIVISIONS. AO THEREFORE CONCLUDED THAT TH E SALE HAD RESULTED IN SUPPRESSION OF SALE CONSIDERATION AND THER EFORE 4 ITA NO.2033/PUN/2014 AY.NO.2008-09 NOTICE U/S 148 WAS ISSUED AND THE ASSESSMENT WAS CONC LUDED BY MAKING AN ADDITION OF RS.30.38 CRORES AS UNDISCLOSED INC OME ON ACCOUNT OF SUPPRESSION OF SALE CONSIDERATION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT , WHO DELETED THE ADDITION BY NOTING AS UNDER: 3.4 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND PERUSED MATERIAL ON RECORD. THE ONLY ISSUE CONTESTED BY THE APPELLANT RELATES TO THE ADD ITION OF RS. 30,38,00,000/- AS UNDISCLOSED INCOME ON ACCOUNT OF SALES SUPPRESSION. THE FACT OF THE CASE IS THAT DURING THE SEARCH AND SEIZURE ACTION U/S 132 CARRIED OUT I N THE CASE OF SANJAY KAKADE GROUP ON 11-2-2009 AN UNREGISTERED M.O.U WAS FOUND DATED 19-4-2007 WITH KAKADE ESTATE DEVELOPERS (P) LTD (KEDPL) FOR THE SA LE OF 3263.31 R OF LAND AT BHUGAON, MULSHI, PUNE. AS P ER THE TERMS OF THE AGREEMENT THE PURCHASERS I.E. KEDP L OFFERED RS. 1.20 CRORES PER ACRE OF LAND FOR A TOTA L CONSIDERATION OF RS. 144 CRORES AND THE APPELLANT W AS TO RECEIVE THE ENTIRE PAYMENT WITHIN A PERIOD OF 4 MONTHS BY 29.08.2007 AND KEDPL MADE A PAYMENT OF RS. 60.50 CRORES. HOWEVER, SUBSEQUENTLY DECIDED TO CANCEL THE AGREEMENT AS THE APPELLANT WAS UNABLE TO PROVIDE THE SAID PROPERTY WITH PROPER ACCESS ROAD A ND THE LAND WAS NOT OF ONE HOMOGENOUS PIECE OF LAND AND ALSO THE LAND WAS SCATTERED AND WITHOUT ANY DIRECT APPROACH ROAD AND ALSO DUE TO SOME FINANCIAL AND BUSINESS REASONS. THUS THE AFORESAID M.O.U WAS CANCELLED AND THE APPELLANT COMPANY REFUNDED THE PAYMENT RECEIVED BACK TO KEDPL. THEREAFTER, THE OWN ER MENTIONED IN THE M.O.U AT S.NO 2 & 3 VIZ MR. RAJEND RA V JADHAV AND VIJAY M BHISE CANCELLED THEIR DEVELOPMEN T AGREEMENT WITH THE APPELLANT-COMPANY AND THE RIGHT OBTAINED UNDER POWER OF ATTORNEY OF SHRI. VISHWAS B HISE, S.NO 1 OF 1H 27.33 R WAS ALSO CANCELLED. THE APPELL ANT ALSO FILED THE CONFIRMATION FROM KEDPL WITH RESPECT TO THE CANCELLATION OF THE M.O.U. THE APPELLANT, THEREAFTE R SOLD THE PROPERTY TO POONA INFRASTRUCTURE ON WHOM THE DEVELOPMENT RIGHTS OF THE SAID PROPERTY ADMEASURING 3252.47 R FOR A SUM OF RS. 36.43 CRORES FOR WHICH A DEVELOPMENT AGREEMENT DATED 24-3-2008 WAS ENTERED INTO BY THE APPELLANT AND THE FINAL SALES CONSIDERA TION IS STATED TO BE HIGHER THAN THE PREVAILING MARKET / STAMP DUTY RATE OF THE PROPERTY AND THE APPELLANT NEEDED IMMEDIATE PAYMENT TO BE MADE TO THE LANDOWNERS TO WHOM ONLY PART PAYMENT HAD BEEN MADE WHILE TAKING T HE DEVELOPMENT RIGHTS FROM THEM. POONA INFRASTRUCTURE, THEREAFTER OBTAINED DEVELOPMENT RIGHTS OF THE ADJOI NING PLOTS ADMEASURING 1593.42 R FROM VARIOUS VENDORS AN D TRANSFERRED THE ENTIRE DEVELOPMENT RIGHTS OF THE SA ID 5 ITA NO.2033/PUN/2014 AY.NO.2008-09 PROPERTIES I.E. 1593.42 R ALONG WITH 3252.47 R TOTA LING TO 4845.89 R THROUGH 4 SALE DEEDS DATED 16.04.2008 AS UNDER: DATE OF SALE DEED NAME OF BUYER SALE CONSIDERATION 16-04-2008 SANJAY D KAKADE 84,43,60,000 16-04-2008 SHRIDHAR D DHUMAL 15,51,60,000 16-04-2008 ASHOK G YADAV 7,41,95,000 16-04-2008 ASHOK G YADAV 7,62,85,000 TOTAL 1,15,00,00,000 3.5 THE AO, HOWEVER BEING NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE APPELLANT WORKED OUT T HE ADDITION ON THE PRESUMPTION THAT AS PER THE M.O.U DATED 19-4-2007 THE RATE FIXED AT RS. 1.20 CR ORES PER ACRE HAS BEEN APPLIED TO 4845.89 R I.E. 121.15 ACRE WHICH WORKED OUT AT RS. 145.38 CRORE WHICH HAS BEEN TAKEN BY HIM TO BE THE ACTUAL SALE CONSIDERATION AN D HAS DEDUCTED RS. 115 CRORES RECEIVED BY POONA INFRASTRU CTURE AND ARRIVED AT THE DIFFERENCE OF RS. 30.38 CRORES H OLDING THE SAME TO BE UNDISCLOSED INCOME ON ACCOUNT OF SUPPRESSED SALES CONSIDERATION. IT IS NOTICED FROM THE MATERIAL ON RECORD THAT THE ENTIRE TRANSACTION OF T HE SAID PROPERTY HAS TAKEN PLACE PRIOR TO THE SEARCH ACTION ON THE KAKADE GROUP ON 11-2-2009. THE AO HAS ACTED ON THE PRESUMPTION THAT THE APPELLANT HAS RECEIVED SALES CONSIDERATION OVER AND ABOVE THE AMOUNT STATED IN T HE SALE OF PROPERTY TO POONA INFRA STRUCTURE BASED ON THE M.O.U ENTERED WITH KEDPL. IT IS PERTINENT TO POINT OUT THAT DURING THE COURSE OF SEARCH ACTION NO INCRIMINATING DOCUMENTS POINTING TO A SALE CONSIDERATION OF 145.3 1 CRORES WAS FOUND EXCEPT FOR THE UNREGISTERED M.O.U DATED 19-4-2007 EXECUTED ON RS. 100 STAMP PAPER. THE APPELLANT COMPANY REFLECTED THE PART PAYMENTS RECEI VED AS PER THE M.O.U FROM KEDPL IN THE ACCOUNTS. THE AO HAS BASED THE ENTIRE ADDITION ON THE BASIS OF THE M.O.U SEIZED DURING THE SEARCH ACTION AND NO OTHER EVIDENCE OR M ATERIAL HAS BEEN BROUGHT ON RECORD WHICH COULD CORROBORATE THE FINDINGS MADE BY THE AO. THE PARTIES TO THE M.O.U D ATED 19-4-2007 I.E. THE APPELLANT AND KEDPL HAVE ADMITTE DLY CONFIRMED THAT THE SAID M.O.U HAS BEEN CANCELLED AN D NOT ACTED UPON. THE SUBSEQUENT TRANSACTIONS I.E. FIRSTL Y BETWEEN THE APPELLANT AND POONA INFRASTRUCTURE AND, THEREAFTER, BETWEEN POONA INFRASTRUCTURE AND SANJAY KAKADE & OTHERS HAVE BEEN EXECUTED BY WAY OF REGISTERED AGREEMENT WHICH HAS NOT BEEN CONSIDERED BY THE AO BEFORE RESORTING TO THE ADDITION ON ACCOUNT OF UNDISCLOSED CONSIDERATION. THE AO ALSO SOUGHT THE EXPLANATION AND THE JUSTIFICATION FOR SELLING THE P ROPERTY BELOW THE M.O.U VALUE WHICH HAS BEEN EXPLAINED BY T HE APPELLANT THAT IT WAS DIFFICULT TO SELL A HUGE PART OF LAND 6 ITA NO.2033/PUN/2014 AY.NO.2008-09 WHEREAS POONA INFRASTRUCTURE HAD BEEN AGGREGATING ADDITIONAL LAND AND ALSO PROVIDED THE APPROACH ROAD AND THE LAND IN A CONSOLIDATED MANNER HAS BEEN ABLE TO SELL THE LAND TO SANJAY KAKADE & OTHERS AND RECEIVED THE SALE CONSIDERATION IN LUMP SUM OF RS. 115 CRORES TH OUGH SUCH DEAL NORMALLY SPREADS OVER SEVERAL MONTHS TO B E COMPLETED, A FACT WHICH HAS BEEN TOTALLY IGNORED BY THE AO. FURTHER THE APPELLANT WAS ALSO IN NEED OF IMMED IATE FUND TO MAKE PAYMENTS TO THE LAND OWNERS AS PER COMMITMENT MADE EARLIER FROM WHOM THE DEVELOPMENT RIGHTS HAD BEEN OBTAINED AND THE MOU HAVING BEEN CANCELLED DECIDED TO SELL THE LAND TO ITS SISTER CO NCERN POONA INFRASTRUCTURE BY WAY OF DEVELOPMENT AGREEMEN T. MOREOVER AT THAT POINT OF TIME THE PROPERTY MARKET HAD BEEN SLUGGISH AND DEPRESSED WHEREBY MAKING IT DIFFI CULT TO RAISE MONEY BY SELLING OF PROPERTY SINCE THE PRO PERTY WAS NOT HAVING PROPER APPROACH ROAD. WHERE THE ASSESSEE PURCHASES A PROPERTY BY MAKING A PAYMENT, WHICH IS LESS THAN THE VALUE ADOPTED FOR STAMP DUTY PURPOSE, CAN IT BE ASSUMED, THAT THE ASSESSEE HAD M ADE A PAYMENT TO THE EXTENT OF THE DIFFERENCE OUT OF HI S UNDISCLOSED INCOME AND THAT SUCH DIFFERENCE SHOULD BE BROUGHT TO TAX U/S 69B. SUCH AN ISSUE AROSE IN ITO VS FITWELL LOGIC SYSTEM P LTD (2010) 1 ITR (TRIB) 286 (DEL). IT WAS HELD BY THE TRIBUNAL THAT THERE IS NO MATERIAL TO ESTABLISH THAT THE ASSESSEE PAID AN AMOUNT HIGHER T HAN WHAT IS STATED AS CONSIDERATION IN THE SALE DEED, T HERE CAN BE NO INFERENCE OF ANY UNEXPLAINED INVESTMENT. IT IS ALSO CONTENDED BY THE APPELLANT THAT IT WAS NOT THE A.O.S CASE IN THE COURSE OF SEARCH AND SEIZURE ACTION ON KAKADE GROUP ANY EVIDENCE WAS FOUND TO ESTABLISH THAT THER E WAS ANY CONSIDERATION PAID OVER AND ABOVE THE AMOUNT ST ATED IN THE SALE DEED BETWEEN POONA INFRASTRUCTURE & KDE PL. THE AO HAS ALSO NOT MADE ANY INDEPENDENT ENQUIRY SO AS TO ESTABLISH THE FACT OF THE SALE CONSIDERATION TO HAVE BEEN SUPPRESSED BY THE APPELLANT AND THE ENTIRE ADDITION HAS BEEN BASED ON THE BASIS OF THE INFORMATION CONTAINE D IN THE MOU WHICH HAD BEEN CANCELLED AND NOT ACTED UPON . 3.5.1 THUS THE MATERIAL ON RECORD CLEARLY INDICATE THAT THE M.O.U DATED 19.04.2004 HAS NOT BEEN ACTED UPON BY T HE RESPECTIVE PARTIES TO THE TRANSACTION AND DURING TH E SEARCH ACTION NO OTHER INCRIMINATING DOCUMENT RELATI NG TO THE TRANSACTION HAS BEEN FOUND AND SEIZED EXCEPT FO R THE M.O.U AND SALE DEED WITH POONA INFRASTRUCTURE. THE APPELLANT BEING IN NEED OF MONEY TO PAY THE LANDOWN ERS AND WITH A CANCELLED M.O.U AND THE PROPERTY MARKET BEING DEPRESSED THOUGHT IT TO BE PRUDENT CONSIDERIN G THE BUSINESS EXPEDIENCY HENCE, ENTERED INTO A DEVELOPME NT AGREEMENT WITH THE SISTER CONCERN POONA INFRASTRUCT URE TO WHOM THE SAID LAND HAS BEEN SOLD AT A RATE OF RS. 3 6.43 CRORES WHICH IS HIGHER THAN THE STAMP DUTY RATE OF 27.48 CRORES AND ALSO COMPARED TO THE SALE OF LAND TO OTH ER PARTIES. THE APPELLANT HAS OFFERED THE SAID AMOUNT IN THE PROFIT AND LOSS ACCOUNT AND PAID THE TAXES. THE LAN D AREA IN POSSESSION OF THE APPELLANT WAS NOT HOMOGENEOUS 7 ITA NO.2033/PUN/2014 AY.NO.2008-09 RATHER IT WAS SCATTERED AND WITHOUT DIRECT APPROACH ROAD WHEREAS POONA INFRASTRUCTURE WAS REQUIRED TO BUY ADDITIONAL LAND OF 1593.42 R AND WAS ABLE TO SELL A LARGER PART OF LAND OF 4845.89 R WIT H APPROACH ROAD TO SANJAY KAKADE & OTHERS. THUS THE L AND AFTER BEING ACQUIRED BY POONA INFRASTRUCTURE FROM THE APPELLANT CERTAINLY GAINED IN VALUE SUBSTA NTIALLY BECAUSE OF ITS HOMOGENEITY AND HAVING DIRECT ACCESS TO IT WHICH WERE ABSENT-EARLIER. THE ASSESSING OFFICER H AS NOT BROUGHT ON RECORD ANY SUCH MATERIAL OR EVIDENCE WHI CH COULD JUSTIFY THE ADDITION MADE BY HIM BASED ON PRESUMPTION AS THE SEARCH ACTION IN THE KAKADE GROU P HAD BEEN CARRIED OUT AFTER THE AFORESAID TRANSACTIO N RELATING TO THE LAND TOOK PLACE, HOWEVER, IF ANY EV IDENCE OF SUPPRESSED SALES CONSIDERATION WOULD HAVE EXISTED T HE SAME WOULD HENCE CAME TO LIGHT IN THE SAID SEARCH A CTION. THIS IS ALSO NOT A CASE THAT THE APPELLANT PLANNED ITS AFFAIRS SO AS TO AVOID TAX LIABILITY ON THE APPAREN T SALES CONSIDERATION AS PER THE REGISTERED SALE DEED AS TH E APPELLANT AS WELL AS POONA INFRASTRUCTURE BOTH ARE LIABLE TO TAX @ 30%. FURTHER THE SALES OF THE LAND TO SANJAY KAKADE & OTHERS HAVE BEEN CARRIED OUT BY POONA INFRASTRUCTURE AND NOT BY THE APPELLANT. MOREOVER I N THE SEARCH ASSESSMENTS COMPLETED IN THE CASE OF SANJAY KAKADE GROUP NO ADDITION ON THIS ISSUE HAS BEEN MAD E. THERE IS NO EVIDENCE TO INDICATE THAT THE APPELLANT HAD RECEIVED ANY OTHER SUM OF MONEY OTHER THAN THE AMOU NT DISCLOSED IN THE REGISTERED SALE DEED. THE ENTIRE A DDITION HAS BEEN MADE BASED ON THE INFERENCE DRAWN FROM THE M.O.U FOUND DURING THE SEARCH ACTION AND WHICH HAS BEEN CLAIMED TO HAVE BEEN ANNULLED BY ITS EXECUTORS AND NOTHING ON RECORD TO INDICATE THAT THE SAID M.O.U H AS BEEN ACTED UPON AS PER THE TERMS STIPULATED THEREIN. THE ASSESSING OFFICER HAS ALSO NOT CARRIED OUT INDEPEND ENT ENQUIRIES TO SUBSTANTIATE AND JUSTIFY THE ADDITION MADE BY HIM. 3.6 THE AO HAS ALSO OBSERVED THAT POONA INFRASTRUCT URE HAS PURCHASED LAND AT A MUCH HIGHER PRICE FROM RANJ IT NIMHAN THAN FROM OTHER LANDOWNERS WHILE BUYING AN A REA OF 1593.42 R, BETWEEN THE SAID CONCERN IS SEEN TO H AVE PURCHASED A VERY SMALL AREA OF LAND I.E. 13.10 R FR OM MR. NIMHAN AS COMPARED TO OTHER LAND OWNERS FROM BEEN PURCHASED AND IN SUCH CIRCUMSTANCES GENERALLY IN TH E REAL ESTATE BUSINESS BECOMES NECESSARY FOR MAKING T HE LAND TRACT HOMOGENOUS YIELDS HIGHER PRICE. HOWEVER, THE AFORESAID FACT DO NOT IN ANY WAY PROVE THAT THERE I S SUPPRESSION OF SALES ON THAT ACCOUNT IN THE ABSENCE OF ANY CONCRETE EVIDENCE. THE APPELLANT HAS ALSO POINT ED OUT THAT IN ITS EXPLANATION FILED BEFORE THE INVESTIGAT ION WING THAT THE LAND AREA OF 3252.47 R HAS BEEN SOLD AT TH E RATE OF 1,12,007/- PER R WHEREAS TO THE OUTSIDE PARTIES THE APPELLANT HAS SOLD LAND AT THE RATE OF RS.1,10,081/ - PER R WHICH CERTAINLY INDICATE THAT TO A RELATED PARTY I. E., POONA INFRASTRUCTURE, THE LAND HAS BEEN SOLD AT A HIGHER RATE VIS-A-VIS UNRELATED PARTIES. MOREOVER THE APPELLAN T IS SEEN TO HAVE SOLD THE LAND AT A TOTAL CONSIDERATION OF 8 ITA NO.2033/PUN/2014 AY.NO.2008-09 RS.36.43 CRORES AND THE STAMP DUTY VALUE IS NOTICED TO BE LOWER AT RS.27,48,87,480/-. THE MATERIAL ON RECORD ALSO DO NOT SHOW OF ANY SUPPRESSION OF FACT BY THE APPEL LANT AND ALSO FILED THE NECESSARY DOCUMENT AND EVIDENCE TO JUSTIFY ITS CLAIM INCLUDING THE IDENTITY OF THE PUR CHASERS AND THEREFORE, THERE IS NO REASON TO SUSPECT AND NO FACTUAL BASIS FOR MAKING ANY ADDITION BASED UPON ASSUMPTION. THE OBSERVATION OF THE AO THAT THE APPE LLANT HAS ENTERED INTO LAYERED TRANSACTION TO SUPPRESS SA LE CONSIDERATION ALSO DO NOT EMANATE AND GETS PROVED B Y THE MATERIAL ON RECORD. THE APPELLANT COMPANY AS WELL A S THE SISTER CONCERN POONA INFRASTRUCTURE BOTH PAY TAXES AT THE RATE OF 30%, HENCE THE MOTIVE AND ANGLE OF REDUCING OR PLANNING TO TAX LIABILITY ALSO DO NOT ARISE. AN ALL EGATION THAT THE ASSESSEE HAD RECEIVED A CONSIDERATION LARG ER THAN WHAT IS INDICATED IN THE REGISTERED SALE DEED CANNOT BE LIGHTLY MADE SINCE THE LAW OF EVIDENCE WOULD PLA CE THE BURDEN ON THE REVENUE. THIS WAS THE POINT CONCEALED IN CIT VS SATINDAR KUMAR (2001) 250 ITR 484 (P&H). IN THIS CASE REVENUE RELIED UPON AN IMPOUNDED DIARY OF A PROPERTY DEALER RECORDING TRANSACTIONS IN THE PROPE RTY LOCATED IN THAT VERY AREA BUT RELATE TO THE VERY PR OPERTY UNDER CONSIDERATION. THE RECORDED VALUE WAS 30,000/ - WHILE THE ESTIMATED VALUE OF THE AO WAS 3,66,400/- AND IT WAS NOTED BY THE COURT THAT IF THE VALUE WAS AS WIDE AS WAS PRESUMED, IT WOULD HAVE CERTAINLY BEEN ESTABLIS HED BY INVESTIGATION WHICH ALONE CAN BRING HOME CONCEAL MENT AND NOT MORE INFERENCES AS IN THIS CASE. THE CASE ILLUSTRATES NOT ONLY A RULE OF EVIDENCE BUT ALSO TO THE RESPONSIBILITY OF THE REVENUE TO BRING HOME CONCEAL MENT BY PROPER ENQUIRIES ABOVE IT HAS APPARENTLY REASON TO ASSUME SUCH CONCEALMENT BUT AS IN THIS CASE FAILED TO ESTABLISH THE SAME. THE APEX COURT IN DHAKESHWARI COTTON MILLS LTD VS CIT (1954) 26 ITR 775 (SC) POIN TED OUT THAT THE AO IS NOT FETTERED BY TECHNICAL RULES OF E VIDENCE AND PLEADINGS AND THAT HE IS ENTITLED TO ACT ON MAT ERIALS, WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN COURT OF L AW, SUBJECT, HOWEVER, TO THE LIMITATION THAT ASSESSMENT CANNOT BE MADE ON PURE GUESS WORK WITHOUT EVIDENCE OR MATERIAL. IN THE CASE OF K.P. VARGHESE VS ITO, 131 ITR 597 (SC), THE APEX COURT HELD THAT 'IT IS WELL SETT LED RULE OF LAW THAT THE ONUS OF ESTABLISHING THAT THE CONDITIO NS OF TAXABILITY ARE FULFILLED IS ALWAYS ON THE REVENUE A ND THE BURDEN LIES ON THE REVENUE TO SHOW THAT THERE IS AN UNDERSTATEMENT OF ITS CONSIDERATION. MOREOVER, TO T HROW THE BURDEN OF SHOWING THAT THERE IS NO UNDERSTATEME NT OF THE CONSIDERATION ON THE ASSESSEE WOULD BE TO CAST AN ALMOST IMPOSSIBLE BURDEN UPON HIM TO ESTABLISH A NEGATIVE, NAMELY THAT HE DID NOT RECEIVE ANY CONSIDERATION BEYOND THAT DECLARED BY HIM. THE LD. CIT(A) THEREAFTER RELYING ON THE DECISION IN THE CASE OF CIT VS. KC AGNES AND OTHERS 224 ITR 103 (KER) AND VARI OUS 9 ITA NO.2033/PUN/2014 AY.NO.2008-09 OTHER DECISIONS CONCLUDED THAT NO ADDITION ON ACCOUNT OF SUPPRESSED SALE CONSIDERATION COULD BE MADE WITHOUT ANY DOCUMENTARY EVIDENCE. LD. CIT(A) THEREAFTER NOTED AS UNDER :- 3.6.3 THUS THE ASSESSING OFFICERS STAND THAT BY ROUTING THE TRANSACTION THE APPELLANT HAS SUPPRESSED SALES CONSIDERATION PRIMA FACIE DO NOT APPEAR TO BE ACCEPTABLE UNLESS THE M.O.U FOUND DURING THE SEARCH COULD BE PROVED TO HAVE BEEN ACTED UPON AND THE AMOUNTSTATED THEREIN BEING PAID FOR THE SALE OF PROPERTY A CONCLUSION ON PRESUMPTIONS CANNOT BE MADE THAT THE PRICE MENTIONED IN THE SALE DEED IS N OT CORRECT . LD. CIT(A) THEREAFTER DELETED THE ADDITION. 5. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. D.R. TOOK US THROUGH THE ORDER OF AO AND STRONGLY SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTH ER HAND REITERATED THE SUBMISSIONS MADE BEFORE LD. CIT(A) AND SUBMIT TED THAT LD. CIT(A) AFTER CONSIDERING THE FACTUAL POSITION AND TH E VARIOUS DECISIONS CITED IN THE ORDER HAS DECIDED THE ISSU E IN FAVOUR OF THE ASSESSEE. HE THUS SUPPORTED THE ORDER OF LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WIT H RESPECT TO ADDITION ON AMOUNT OF SUPPRESSED SALE CONSIDERATION. W E FIND THAT LD. CIT(A) BY A WELL-REASONED AND DETAILED ORDER AND AFTER 10 ITA NO.2033/PUN/2014 AY.NO.2008-09 RELYING ON THE VARIOUS DECISIONS CITED THEREIN HAS GIVEN A FINDING THAT AO HAD ACTED ON THE BASIS OF PRESUMPTION THAT ASSESSEE HAD RECEIVED SALE CONSIDERATION OVER AND ABOVE THE AMOUNTS STATED IN THE SALE OF PROPERTY TO POONA INFRASTRUCTURE BASED ON THE M.O.U ENTERED WITH KAKADE ESTATE GROUP. HE HAS FURTHER GIVEN A FINDING THAT DURING THE SEARCH ACTION ON KAKADE GROUP NO INCRIMINATING DOCUMENTS POINTING TO SALE CONSIDERATION OF RS.145.38 CRORES WAS FOUND EXCEPT FOR THE UNREGISTERED M.O.U DT.19.04.2007 AND THAT M.O.U WAS CANCELLED AND NOT ACTED UPON. FURTHER AO HAS NOT BROUGHT ANY EVIDENCE OR MAT ERIAL ON RECORD WHICH COULD CORROBORATE HIS FINDINGS. LD. CIT(A) HA S FURTHER GIVEN A FINDING THAT THE SUBSEQUENT TRANSACTIONS I.E., FIRSTLY BETWEEN THE ASSESSEE AND POONA INFRASTRUCTURE AND THEREAFTER BETWEEN POONA INFRASTRUCTURE AND SANJAY KA KADE AND OTHERS HAVE BEEN EXECUTED BY WAY OF REGISTERED AGREEM ENT WHICH WERE NOT CONSIDERED BY AO BEFORE RESORTING TO ADDITION O N ACCOUNT OF UNDISCLOSED CONSIDERATION. HE HAS FURTHER NOT ED THAT IT IS NOT THE CASE OF AO THAT DURING THE COURSE OF SEARCH ACTION ON KAKADE GROUP, ANY EVIDENCE WAS FOUND WHICH COULD ESTABLISH THAT THERE WAS ANY CONSIDERATION PAID OVER AND ABOVE T HE AMOUNT STATED IN THE SALE DEED BETWEEN POONA INFRASTRU CTURE AND KEDPL AND THAT AO HAS ALSO NOT MADE ANY INDEPENDE NT INQUIRY SO AS TO ESTABLISH THE FACT OF THE SALE CONSIDERAT ION BEING SUPPRESSED BY ASSESSEE. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE HAD REPAID THE PART-PAYMENT RECEIVED FROM KE DPL. BEFORE US REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD. CIT(A) NOR HAS DEMONSTRATED THE 11 ITA NO.2033/PUN/2014 AY.NO.2008-09 FINDINGS OF LD. CIT(A) TO BE INCORRECT. IN VIEW OF THE AFORESA ID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 10 TH DAY OF FEBRUARY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER % / ACCOUNTANT MEMBER PUNE; ! DATED : 10 TH FEBRUARY, 2017. YAMINI ) * +',- .-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. COMMISSIONER OF INCOME TAX (A)-II, PUNE. COMMISSIONER OF INCOME TAX-II, PUNE.. #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE. )! / BY ORDER, // // TRUE COPY // T // TRUE COPY // // TRUE COPY // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.