ITO, Wrad-1(1)(4), Ahmedabad V. Shri Rakeshkumar Hiralal Thakkar, Ahmedabad

ITA 2258/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0838 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-10-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: A L THAKKAR
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of cross examination
• Section: 13; 147; 131; 68; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO. 2258/AHD/2017 ( / ASSESSMENT YEAR : 2009-10) THE ITO WARD-1(1)(4) AHMEDABAD / VS. SHRI RAKESHKUMAR HIRALAL THAKKAR 1, RUKSHMANI VALLABH SOCIETY NR. PUNIT NAGAR SHYAMAL CROSS ROAD SATEKLLITE,AHMEDABAD-380 015 ./ ./ PAN/GIR NO. : AARPT3338B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI L.P. JAIN, SR.DR / RESPONDENT BY : SHRI A.L. THAKKAR, AR / DATE OF HEARING 22/10/2019 !'# / DATE OF PRONOUNCEMENT 19/12/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)3, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-3 /CIR.3(3)/184/15- 16 DATED 31/07/2017 ARISING IN THE ASSESSMENT ORD ER PASSED UNDER S.143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961(HERE INAFTER REFERRED TO AS 'THE ACT') DATED 12/03/2015 RELEVANT TO ASSESSMEN T YEAR (AY) 2009- 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 2 - 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND IN FAC TS IN DELETING THE ADDITION OF RS.4.60 CRORES MADE BY THE ASSESSING OFFICER. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THAT THE LAND WAS SOLD BY THE ASSESSEE FOR RS.25 LAKHS AND FURTHER SOLD FOR RS.4.85 CRORES WITHIN A WEEK AND THAT THE ASSESSEE IS THE ACTUAL BENEFICIARY. 3. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT N O REAL OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY COUNTING THE DATE FROM 06-03-2015 EVEN WHILE IGNORING THAT SHOW CAUSE NOTICES HAD EARLIER BEEN ISSUED ON 17-10-2014 AND 2 4-12-2014 AND STATEMENT HAD ALSO BEEN PROVIDED ON 20-01-2015. 4. THAT THE LD.CIT(A) HAS ERRED IN HOLDING THAT V ALID REQUEST FOR CROSS EXAMINATION OF WITNESS WAS RECEIVED DESPITE THE FACT THAT ASSES SMENT ORDER DATED 12-03-2015 WAS PASSED BEFORE THE RECEIPT OF SUCH LETTER. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THAT ASSESSMENT ORDER WAS PASSED U/S.144 R.W.S.147 AFTER PROVIDING ADEQUATE OPPORTUN ITIES TO THE ASSESSEE. 6. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING ALL THE RELEVANT FACTS. THE INTERCONNECTED ISSUE RAISED BY THE REVENUE IS T HAT THE LEARNED CIT- (A) ERRED IN DELETING THE ADDITION MADE BY THE AO F OR RS. 4,60,00,000/- REPRESENTING THE INCOME OF THE ASSESSEE ON ACCOUNT OF SALE OF LAND. 2. BEFORE WE EMBARK AN ENQUIRY ABOUT THE ISSUE R AISED BY THE REVENUE, IT IS PERTINENT TO MAKE A NOTE IN BRIEF ABOUT THE H ISTORY OF THE FACTS OF THE CASE WHICH GOES AS UNDER. THERE IS A COMPANY NAMELY M/S DIVYASH INFRA DEVELOPERS PVT. LTD. ( FOR SHORT DIDPL) WHICH PURCH ASED A PIECE OF LAND BEARING BLOCK NO. 269 ADMEASURING 4249 SQ. METERS, SITUATED AT VILLAGE MANIPUR OF SANAND DISTRICT VIDE REGISTRATION DEED N O. SND/5414/1- 14/2008 DATED 6 TH AUGUST 2008. DIDPL PURCHASED SUCH PIECE OF LAND FR OM A COOPERATIVE SOCIETY NAMELY PRIYAL (MANIPUR) CO-OP . HOUSING SOCIETY (FOR SHORT PMCHS) FOR RS. 25 LAKHS ONLY. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 3 - 2.1. THE CHAIRMAN OF THE SOCIETY SHRI RAKESH HI RALAL THAKKAR (THE ASSESSEE) HAS SIGNED THE SALE DEED IN FAVOUR OF DID PL ON BEHALF OF THE SELLER (THE PMCHS) AND SHRI JIGNESH S. SHAH ACTED A S A WITNESS IN THE SALE DEED. 2.2. DIDPL SUBSEQUENTLY SOLD THE IMPUGNED LAND D ATED 13 AUGUST 2008 WITHIN THE SPAN OF 7 DAYS TO SHRI PRATIK A. DE SAI FOR A SUM OF RS. 4.85 CRORES ONLY. 2.3. HOWEVER, DIDPL HAS NOT DISCLOSED THE IMPUGN ED TRANSACTION OF PURCHASE AND SALE OF THE LAND IN ITS RETURN OF INCO ME. ACCORDINGLY, THE AO WARD NO. 1(4), AHMEDABAD OF DIDPL SUMMONED THE D IRECTORS OF DIDPL AND RECORDED THEIR STATEMENT UNDER SECTION 13 1 OF THE ACT. THE DIRECTORS IN THE STATEMENT ADMITTED THAT THEY ARE W ORKING AS WASHER MEN (DHOBI) AND EARNING INCOME OF RS. 5000/- EACH APPRO XIMATELY. THE DIRECTORS FURTHER SUBMITTED THAT SHRI JIGNESH S. SH AH HAS TAKEN THEIR SIGNATURES FOR OPENING THE BANK ACCOUNT OF THE COMP ANY I.E. DIDPL AND OTHER DOCUMENTS FILED BEFORE THE OTHER AUTHORITIES. 2.4. IT WAS ALSO REVEALED THAT THE AMOUNT RECEIV ED BY DIDPL ON THE SALE OF THE IMPUGNED LAND FOR RS. 4.85 CRORES WAS WITHDR AWN ON THE NEXT DAY BY ISSUING A CHEQUE TO MAHAVIR ENTERPRISES, A PROPR IETARY CONCERN OF SHRI AJIT KIRITBHAI VARAI. ACCORDINGLY THE AO OF DIDPL S UMMONED SHRI AJIT ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 4 - KIRITBHAI VARAI AND RECORDED THE STATEMENT UNDER SE CTION 131 OF THE ACT WHEREIN IT WAS ADMITTED THAT THE ENTIRE AMOUNT I.E. 4.85 RECEIVED FROM DIDPL WAS WITHDRAWN IN CASH THROUGH SHRI JIGNESH S. SHAH - A PERSON ACTED AS A WITNESS IN THE SALE BY THE PMCHS TO DIDP L. 2.5. SHRI JIGNESH S. SHAH STATEMENT WAS ALSO REC ORDED UNDER SECTION 131 OF THE ACT WHEREIN HE ADMITTED THE FACT THAT TH E ASSESSEE WAS THE REAL BENEFICIARY IN THE ENTIRE TRANSACTION OF SALE OF TH E IMPUGNED LAND AS DISCUSSED ABOVE. 2.6. THE AO ALSO RECORDED THE STATEMENT UNDER S ECTION 131 OF THE ACT OF THE ULTIMATE BUYER OF THE PROPERTY NAMELY SHRI P RATIK A. DESAI WHO ADMITTED THAT THE DEAL FOR THE PURCHASE OF THE PROP ERTY WAS MADE THROUGH SHRI RAKESH H. THAKKAR EVEN AFTER THE SALE OF THE P ROPERTY BY THE PMCHS TO DIDPL AND SUBSEQUENTLY TO HIM (SHRI PRATIK A. DESAI). 2.7. IN VIEW OF THE ABOVE, THE AO OPINED THAT THE ASSESSEE WAS THE REAL PERSON WHO WAS MANAGING THE ENTIRE DEAL FOR THE TRA NSFER OF THE PROPERTY TO THE REAL OWNER SHRI PRATIK A. DESAI BY CREATING THE FAKE ENTITY NAMELY DIDPL IN ORDER TO ESCAPE FROM THE INCOME TAX LIABIL ITY. ACCORDINGLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR THE SCRUTINY UNDER SECTION 147 OF THE ACT ON ACCOUNT OF ESCAPEMENT OF THE INCOME AS DISCU SSED ABOVE. THUS, THE ASSESSEE WAS SHOW CAUSED VIDE LETTER DATED 17 O CTOBER 2014 PROPOSING THE ADDITION OF RS. 4.85 CRORES IN HIS HA NDS. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 5 - 2.8. HOWEVER, THE ASSESSEE CHALLENGED THE REOPE NING UNDER SECTION 147 OF THE ACT BUT MADE NO REPLY ON MERITS. ACCORDINGLY THE AO PROCEEDED TO FRAME THE ASSESSMENT UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT ON THE BASIS OF DOCUMENTS AVAILABLE ON RECORD A ND THE INFORMATION GATHERED FROM THE AO OF DIDPL DURING THE COURSE OF ENQUIRIES AND STATEMENTS RECORDED BY HIM ( THE AO OF DIDPL) UNDER SECTION 131 OF THE ACT OF DIFFERENT PERSONS. 2.9. IN VIEW OF THE ABOVE, THE AO TREATED THE AS SESSEE AS THE REAL BENEFICIARY FOR THE IMPUGNED TRANSACTION OF SALE OF THE LAND AND ACCORDINGLY ADDED THE SUM OF RS. 4.60 CRORES AS SHO RT-TERM CAPITAL GAIN TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT (A). 3. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBM ITTED THAT HE WAS ACTING AS THE CHAIRMAN OF THE SOCIETY AND THE IMPUG NED LAND BELONGED TO SUCH SOCIETY WHICH IS A SEPARATE LEGAL ENTITY. IT I S THE SOCIETY WHICH SOLD THE LAND TO DIDPL FOR A CONSIDERATION OF RS. 25 LAK HS ONLY. AS SUCH THE DIDPL IS ALSO AN INDEPENDENT LEGAL ENTITY. THE ASSE SSEE HAD NO CONNECTION WITH DIDPL OF WHATSOEVER DIRECTLY OR IND IRECTLY. ACCORDINGLY, THERE WAS NO ROLE OF THE ASSESSEE IN T HE IMPUGNED TRANSACTION OF SALE OF LAND TO DIDPL EXCEPT HE SIGN ED THE DOCUMENTS FOR ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 6 - TRANSFERRING THE LAND IN THE CAPACITY OF THE CHAIRM AN. SIMILARLY, THE ASSESSEE HAD NO CONNECTION EITHER DIRECTLY OR INDIR ECTLY FOR THE DIRECTORS OF DIDPL WHO ARE THE INDEPENDENT PERSONS. 3.1 SUBSEQUENTLY, THE IMPUGNED LAND WAS TRANSFERRED BY DIDPL TO SHRI PRATIK A. DESAI FOR A CONSIDERATION OF RUPEES FOR 4.85 CRORES. INDEED, SHRI PRATIK A. DESAI IN THE STATEMENT RECORDED UNDE R SECTION 131 OF THE ACT HAS ADMITTED THE FACT THAT THE ASSESSEE WAS INV OLVED IN THE ENTIRE TRANSACTION OF IMPUGNED PROPERTY. BUT, SHRI PRATIK A. DESAI HAS NOWHERE IN HIS STATEMENT STATED THAT THE MONEY WAS PAID TO THE ASSESSEE. AS SUCH THE PAYMENT WAS MADE BY SHRI PRATIK DESAI DIRECTLY TO DIDPL AS EVIDENT FROM HIS STATEMENT BY ISSUING AN ACCOUNT PAYING CHE QUE. 3.2 THE AMOUNT PAID BY THE ULTIMATE PURCHASER TO DIDPL WAS ALSO WITHDRAWN BY SHRI JIGNESH SHAH AFTER THE INVOLVEMEN T OF THE PROPRIETARY FIRM NAMELY M/S MAHAVIR ENTERPRISES HEADED BY SHRI AJIT K.VARIYA. THIS FACT WAS RECORDED IN THE STATEMENT OF SHRI AJIT K. VARIYA. SIMILARLY, THE ASSESSEE ALSO CONTENDED THAT HE NOT ASSOCIATED WITH SHRI JIGNESH SHAH EITHER AS RELATIVE OR IN ANY OTHER CAPACITY. AS SUC H THERE WAS NO NAME OF THE ASSESSEE IN ANY OF THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ALLEGING THAT THE AMOUNT WAS TRANSFERRED TO HIM (TH E ASSESSEE). 3.3 SIMILARLY, THE ASSESSEE FURTHER CONTENDED THA T SHRI JIGNESH S SHAH WAS THE KEY PERSON INVOLVED WITH THE FORMATION OF T HE COMPANY DIDPL. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 7 - HE (SHRI JIGNESH S SHAH) WAS DIRECTLY ASSOCIATED WI TH THE DIRECTORS OF DIDPL. HE (SHRI JIGNESH S SHAH ) AS SUCH ACTED AS W ITNESS IN TRANSFERRING THE LAND BY THE PMCHS TO DIDPL. HE (SH RI JIGNESH S SHAH) ONLY ARRANGED THE FUND FOR THE PURCHASE OF THE PROP ERTY BY DIDPL AND ALSO INVOLVED IN THE SUBSEQUENT TRANSFER BY DIDPL T O THE SHRI PARTIK A DESAI, FURTHER EN-CASHING THE AMOUNT OF RS. 4.85 CR ORES THROUGH M/S MAHAVIR ENTERPRISE RECEIVED FROM SHRI PARTIK A DESA I AS EVIDENT FROM THE STATEMENTS RECORDED OF VARIOUS PERSONS UNDER SE CTION 131 OF THE ACT. 3.3. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ORDER OF THE AO OBSERVED CERTAIN F ACTS AS DETAILED UNDER: I. THERE WAS NO CONNECTION OF THE ASSESSEE WITH THE CO MPANY NAMELY DIDPL OR ITS DIRECTORS. THERE WAS ALSO NO RO LE OF THE ASSESSEE IN THE FORMATION OF THE COMPANY I.E. DIDPL AND SUBSEQUENT AFFAIRS OF THE COMPANY. THE DIRECTORS OF THE COMPANY HAVE NOWHERE STATED IN THE STATEMENT RECORD ED UNDER SECTION 131 OF THE ACT THAT THERE WAS THE ROLE OF T HE ASSESSEE EITHER IN THE FORMATION OF THE COMPANY OR IN ITS AF FAIRS. AS SUCH IN ALL THE STATEMENTS THE NAME OF SHRI JIGNESH SHAH AND HIS ASSOCIATES WERE RECORDED WHO WERE DIRECTLY INVOLVED IN THE FORMATION AND THE MANAGING THE AFFAIRS OF THE COMPA NY. II. THE CASH/FUND OF RS. 25 LACS WAS ARRANGED BY SHRI J IGNESH S SHAH FOR PURCHASING THE LAND BY DIDPL FROM THE SOCI ETY PMCHS THROUGH THE INVOLVEMENT OF SHRI DHARMESH KIRI T BHAI VARIAYA, SHRI SUBHASH HINDOCHA PROPRIETOR OF M/S KA VITA ENTERPRISE. THIS FACT CAN BE VERIFIED FROM THE STAT EMENT RECORDED UNDER SECTION 131 OF THE ACT OF SHRI DHARM ESH KIRIT BHAI VARIAYA. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 8 - III. THE SALE PROCEEDS RECEIVED BY DIDPL FOR RS. 4.85 CR ORES WERE TRANSFERRED TO MAHAVIR ENTERPRISE WHICH WAS WITHDRA WN AND HANDED OVER TO SHRI JIGNESH S SHAH. THIS FACT WAS V ERIFIED ON THE BASIS OF THE STATEMENT RECORDED UNDER SECTION 1 31 OF THE ACT OF SHRI AJIT KIRITBHAI VARIYA PROPRIETOR OF MAHAVIR ENTERPRISE. IV. THE AO HAS NOT PROVIDED THE OPPORTUNITY FOR THE CRO SS- EXAMINATION OF THE PARTIES WHO HAVE FURNISHED THE S TATEMENTS UNDER SECTION 131 OF THE ACT WHICH WERE USED BY THE AO FOR MAKING THE IMPUGNED ADDITION TO THE TOTAL INCOME OF THE ASSESSEE DESPITE THE FACT THAT THE REQUEST WAS MADE BY THE ASSESSEE FOR SUCH CROSS-EXAMINATION VIDE LETTER DAT ED 14 MARCH 2015. 3.4. IN VIEW OF THE ABOVE, THE LEARNED CIT (A) HELD THAT THE IMPUGNED AMOUNT IS NOT THE INCOME OF THE ASSESSEE. ACCORDING LY, THE LD. CIT-A DELETED THE ADDITION MADE BY THE AO. THUS THE APPEA L OF THE ASSESSEE WAS ALLOWED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DR BEFORE US VEHEMENTLY SUPPORTE D THE ORDER OF THE AO BY REITERATING THE CONTENTIONS RECORDED IN HIS (AO) ORDER. 5. ON THE OTHER HAND, THE LEARNED AR BEFORE US F ILED A PAPER BOOK RUNNING FROM PAGES 1 TO 136 AND SUBMITTED THAT THE ASSESSEE WAS ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 9 - NOWHERE INVOLVED DIRECTLY OR INDIRECTLY FOR THE TRA NSACTION OF TRANSFERRING THE LAND BY THE DIDPL TO THE ULTIMATE PURCHASER SHR I PRATIK A DESAI. 5.1. THE LEARNED AR ALSO CLAIMED THAT THE REQUE ST WAS MADE TO THE AO FOR THE CROSS EXAMINATION OF THE PARTIES WHO FURNIS HED THE STATEMENT UNDER SECTION 131 OF THE ACT DATED 14 MARCH 2015 WH EREAS THE AO FRAMED THE ASSESSMENT DATED 12 TH MARCH 2015. THUS IT IS EVIDENT THAT THE ASSESSEE WAS NOT FURNISHED THE OPPORTUNITY FOR THE CROSS-EXAMINATION. 6. BOTH THE LEARNED DR AND THE AR BEFORE US REL IED ON THE ORDERS OF THE AUTHORITIES BELOW AS FAVOURABLE TO THEM. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT C ASE, THE ASSESSEE IS THE CHAIRMAN OF THE SOCIETY I.E. PMCHS WHICH OWNED A PI ECE OF LAND. PMCHS TRANSFERRED THIS PIECE OF LAND TO DIDPL DATED 6 TH AUGUST 2008 FOR A CONSIDERATION OF RS. 25 LAKHS ONLY. SUBSEQUEN TLY, DIDPL TRANSFERRED THE SAID PIECE OF LAND TO SHRI PRATIK A DESAI FOR A CONSIDERATION OF RS. 4.85 CRORES LEADING TO A DIFFE RENCE OF RS. 4.60 CRORES WHICH WAS TREATED AS INCOME OF THE ASSESSEE. HOWEVE R, THE LEARNED CIT (A) DELETED THE ADDITION BY OBSERVING THAT THERE WA S NO EVIDENCE BROUGHT ON RECORD BY THE AO SUGGESTING THAT THE ASSESSEE WA S THE BENEFICIARY OF THE IMPUGNED AMOUNT OF RS. 4.60 CRORES. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 10 - 7.1. ADMITTEDLY, THE TRANSACTION WAS THE BETWEEN THE PMCHS AND DIDPL FOR A PRICE OF RS. 25 LACS. BOTH THE PMCHS AN D DIDPL ARE SEPARATE AND INDEPENDENT LEGAL ENTITIES. BUT THE AS SESSEE IS ACTING AS THE CHAIRMAN OF THE SOCIETY. NOW THE ISSUE ARISES FOR O UR ADJUDICATION WHETHER THE ASSESSEE HAS RECEIVED THE SUM OF RS. 4. 60 CRORES IN THE LAND TRANSACTION BETWEEN PMCHS AND DIDPL AND SHRI PARTIK A DESAI OR HE WAS THE BENEFICIARY FOR THE SAID AMOUNT. FROM THE P RECEDING DISCUSSION, WE NOTE THAT THE ENTIRE THRUST OF THE AO FOR MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE WAS BASED ON THE STATEMENT RE CORDED OF VARIOUS PERSONS BY THE AO OF DIDPL IN CONNECTION WITH DIDPL ASSESSMENT. AS SUCH THE AO OF THE ASSESSEE HAS NOT VERIFIED THE ST ATEMENTS ON THE BASIS OF WHICH THE ADDITIONS WERE MADE IN THE HANDS OF TH E ASSESSEE BY HIM. THEREFORE IT IS TRANSPIRED THAT THE AO OF THE ASSES SEE HAS NOT APPLIED HIS MIND INDEPENDENTLY FOR ARRIVING AT THE CONCLUSION T HAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. IN OUR CONSIDERED VIEW, THE AO WAS UNDER THE OBLIGATION TO VERIFY THE STATEMENTS OF TH E PARTIES SEPARATELY FOR INDEPENDENT EXAMINATION OF THE PARTIES. BUT THE AO HAS NOT DONE SO. 7.2. WE ALSO NOTE THAT THERE WAS NOT ANY IOTA O F EVIDENCE AVAILABLE WITH THE AO OF THE ASSESSEE SUGGESTING THAT THE ASSESSEE WAS THE BENEFICIARY OF RS. 4.60 CRORES IN THE IMPUGNED LAND TRANSACTION DE AL OTHER THAN THE STATEMENTS RECORDED UNDER SECTION 131 OF THE ACT OF VARIOUS PERSONS IN THE ASSESSMENT OF DIDPL BY THE CONCERNED AO I.E. AO OF DIDPL. IN OUR CONSIDERED VIEW NO ADDITION CAN BE MADE MERELY ON T HE BASIS OF THE ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 11 - STATEMENT OF THE 3 RD PARTY. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE CIT VS. INDERJIT SINGH SURI REPORTED IN 33 TAXMANN.COM 281 WHERE IT WAS HELD AS UNDER; THE ENTIRE ISSUE IS BASED ON FACTUAL MATRIX PRESEN TED BEFORE THE AUTHORITIES. THE FINDINGS OF THE TRIBUNAL ARE ACCEPTABLE. THE AS SESSING OFFICER HAD LARGELY PROCEEDED ON THE BASIS OF THE STATEMENT OF ONE 'G' IN WHOSE BOOKS OF ACCOUNT, THE SAID TRANSACTION OF 'N' CO-OP. HOUSING SOCIETY HAD EMERGED. IT FURTHER APPEARS THAT NO OPPORTUNITY OF CROSS EXAMINATION OF 'G', THOUGH REQUESTED FOR, WAS GRANTED BY THE ASSESSING OFFICER. CUMULATIVELY, THUS, WHEN THE TRIBUNAL FOUND THAT THERE WAS VIOLATION OF PRINCIPLES OF NAT URAL JUSTICE BY NOT ALLOWING CROSS EXAMINATION DESPITE SUCH REQUEST COUPLED WITH ABSENCE OF ANY EVIDENCE, NO ERROR MUCH LESS ANY SUBSTANTIAL ERROR IS COMMITT ED BY THE TRIBUNAL IN DELETING THE SAID AMOUNT. IN THIS REGARD, WE ALSO FIND SUPPORT AND GUIDANCE F ROM THE ORDER OF HONBLE ITAT AHMEDABAD IN CASE OF CHARTERED MOTORS PVT. LTD. VS ACIT IN IT(SS)A NO. 26/AHD/2012 WHERE IT WAS HELD A S UNDER: 17. WE FIND THAT IN THE INSTANT CASE, THE ADDITION IS MADE U/S. 68 OF THE ACT ON THE GROUND OF UNEXPLAINED CASH CREDIT. AS PER THE PROVI SIONS OF SECTION 68, THE INITIAL ONUS LIES UPON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF AMOUNT CREDITED IN HIS BOOKS OF ACCOUNT. WE FIND THAT THIS INITIAL ONUS WA S DISCHARGED IN THE INSTANT CASE BY THE ASSESSEE BY FURNISHING DOCUMENTS LIKE MOA, AOA, SHARE APPLICATION & BOARD RESOLUTION, CERTIFICATE OF INCORPORATION, CERTIFICA TE OF COMMENCEMENT, ACKNOWLEDGEMENTS OF ITRS, AUDITED ACCOUNTS ETC. OF CONCERNED COMPANIES. THEREAFTER, IN OUR VIEW, THE ONUS SHIFTED UPON THE DEPARTMENT AND IT WAS FOR THE DEPARTMENT TO BRING ON RECORD RELEVANT MATERIAL TO SHOW THAT WHY INSPITE OF THE ABOVE STATED DOCUMENTS, THE ADDITION IS STILL TO BE MADE IN THE HANDS OF THE ASSESSEE. IN THE INSTANT CASE, THE DEPARTMENT HAS ENDEAVOURED TO DISCHARGE ITS BURDEN ON THE BASIS OF STATEMENTS RECORDED BY IT OF THE PERSONS M ENTIONED ABOVE. 18. WE FIND THAT THE ASSESSEE REQUESTED FOR CROSS-O BJECTION OF THE MAKER OF THE STATEMENT. FURTHER, WE FIND THAT THE ASSESSING OFFI CER ALSO MADE AN ATTEMPT TO ALLOW THE ASSESSEE OPPORTUNITY TO CROSS-EXAMINE THE MAKER S OF THE STATEMENT BY ISSUING SUMMONS TO THEM. HOWEVER, THE CROSS-EXAMINATION COU LD NOT TAKE PLACE BECAUSE OF FAILURE ON THE PART OF THE MAKERS OF THE STATEMENTS TO APPEAR ON THE APPOINTED DATE. BUT STRANGELY, THEREAFTER, THE ASSESSING OFFICER DI D NOT TAKE ANY STEP TO ALLOW EFFECTIVE OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAM INE THE MAKERS OF THE STATEMENTS. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 12 - THE ASSESSING OFFICER DID NOT PURSUE THE MATTER FUR THER. THUS, WE FIND THAT THE ASSESSEE WAS NOT ALLOWED ANY REAL OPPORTUNITY TO CR OSS-EXAMINE THE PERSONS WHO MADE THE STATEMENT AT THE BACK OF THE ASSESSEE. IN OUR CONSIDERED VIEW, IN THE CIRCUMSTANCES, THE STATEMENT OF THOSE PERSONS CANNO T BE READ AGAINST THE ASSESSEE. OUR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF T HE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF (I) HEIRS AND LEGAL REPRESENTATIVES OF LATE LAXMANBHAI S.PATEL VS. COMMISSIONER OF INCOME TAX (SUPRA) (II) CIT VS. INDRAJIT SINGH SURI (SUPRA) (III) DCIT VS. MAHENDRA AMBALAL PATEL (SUPRA) (IV) CIT VS. KANTIBHAI REVIDAS PATEL (SUPRA) IN VIEW OF THE ABOVE SETTLED POSITION OF LAW, WE FI ND FORCE IN THE ARGUMENT OF THE ASSESSEE THAT THE STATEMENTS OF THE PERSONS MENTION ED ABOVE ARE NOT ADMISSIBLE EVIDENCE AGAINST THE ASSESSEE. IN ABSENCE OF THESE STATEMENTS, WE FIND THAT NO OTHER MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT WHY STILL THE AMOUNT IN QUESTION SHOULD BE TREATED AS INCOME OF T HE ASSESSEE WHEN THE ASSESSEE FURNISHED ALL THE DOCUMENTS WHICH WERE AVAILABLE WI TH IT TO DISCHARGE THE ONUS WHICH WAS UPON IT U/S. 68 OF THE ACT. IN THE ABOVE CIRCUM STANCES, IN OUR CONSIDERED VIEW, THE ADDITION WAS MADE SOLELY BASED ON THE INADMISSI BLE AND UNRELIABLE MATERIAL AND THEREFORE ADDITION SO MADE CANNOT BE SUSTAINED. WE, THEREFORE, DELETE THE ADDITION OF RS 2,00,00,000/- MADE IN THE CASE OF M/S CHARTED MO TORS PVT. LTD. AS WELL AS ADDITION OF RS 70,00,000/- MADE IN THE CASE OF M/S. CHARTERED SPEED PRIVATE LIMITED. 19. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 7.3. SIMILARLY, WE ALSO NOTE THAT THE CBDT IN ITS INSTRUCTIONS ISSUED VIDE F. NO. 286/98/2013-IT(INV.II) DATED 18 TH OF DECEMBER 2014 HAS ALSO DISCOURAGED ITS OFFICERS TO MAKE ANY ADDITION MEREL Y ON THE BASIS OF THE STATEMENT. THE RELEVANT EXTRACT OF THE CIRCULAR IS REPRODUCED AS UNDER: INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HA VE COME TO NOTICE OF THE CBDT THAT SOME ASSESSEES WERE COERCED TO ADMIT UNDI SCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTED BY THE DEPARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIONS ARE RETRACTED IN THE SUBSEQUENT PROCEEDI NGS SINCE THE SAME ARE ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 13 - NOT BACKED BY CREDIBLE EVIDENCE. SUCH ACTIONS DEFEA T THE VERY PURPOSE OF SEARCH/SURVEY OPERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAINABLE MANNER LEAVE ALONE LEVY OF PENALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHOW THE DEPARTM ENT AS A WHOLE AND OFFICERS CONCERNED IN POOR LIGHT. 2. I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION T O THE INSTRUCTIONS/GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REFERRED ABOVE , THROUGH WHICH THE BOARDS HAS EMPHASIZED UPON THE NEED TO FOCUS ON GAT HERING EVIDENCES DURING SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMIS SION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE. 3. IN VIEW OF THE ABOVE, WHILE REITERATING THE AFOR ESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANCE OF UNDUE INFLUENCE/COERCION IN THE RECORDING OF THE STATEMENT DURING SEARCH/SUR VEY/OTHER PROCEEDING UNDER THE IT ACT, 1961 AND/OR RECORDING A DISCLOSUR E OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/COERCION SHALL BE VIEWED BY TH E BOARD ADVERSELY. INDEED THE ABOVE INSTRUCTION WAS ISSUED IN THE CONT EXT OF SEARCH AND SEIZURE OPERATION BUT TO OUR MIND THE PRINCIPLES CA N BE APPLIED TO THE CASE ON HAND. 7.4. WE ALSO NOTE THAT THE TRANSACTION BETWEE N THE PMCHS AND DIDPL AND SHRI PARTIK A DESAI WERE INDEPENDENTLY CA RRIED OUT AMONG THEM. THE ROLE OF THE ASSESSEE WAS VERY LIMITED TO THE EXTENT OF HIS CAPACITY AS CHAIRMAN TO EXECUTE THE SALE DEED ON BE HALF OF THE SOCIETY. ADMITTEDLY THE OWNERSHIP OF THE LAND WAS OF PMCHS. THUS, IF ANY ADDITION IS TO BE MADE THEN THE SELLER OF THE PROPE RTY BEING LEGAL ENTITY SHOULD BE SUBJECT TO TAX AND NOT THE ASSESSEE. ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 14 - 7.5. SIMILARLY, WE ALSO NOTE THAT THERE WAS NO E VIDENCE AVAILABLE ON RECORD SUGGESTING THAT THE AMOUNT OF RS. 4.60 CRORE S HAS COME BACK THE ASSESSEE EITHER DIRECTLY OR INDIRECTLY. AS SUCH THE SALE CONSIDERATION RECEIVED BY DIDPL WAS WITHDRAWN BY SHRI JIGNESH S S HAH THROUGH THE INVOLVEMENT OF MAHAVIR ENTERPRISE AS ACCEPTED BY TH E PROPRIETOR OF MAHAVIR ENTERPRISES. MOREOVER, IT WAS ALSO FOUND TH AT SHRI JIGNESH S SHAH WAS THE INSTRUMENTAL IN THE FORMATION OF THE C OMPANY, ARRANGING THE FUNDS FOR THE COMPANY TO BUY THE LAND FROM THE PMCH S, INTRODUCING THE ULTIMATE BUYER TO THE ASSESSEE, WITHDRAWING FUND FR OM MAHAVIR ENTERPRISES. THUS WHAT IS TRANSPIRED IS THAT SHRI J IGNESH SHAH WAS ACTIVELY ENGAGED IN THE ENTIRE FLOW OF THE TRANSACT IONS FOR TRANSFERRING THE LAND TO THE ULTIMATE PURCHASER. THUS IF ANY ADDITIO N IS TO BE MADE THEN THE SAME CAN BE MADE IN THE HANDS OF THE ULTIMATE BENEF ICIARY WHO APPEARS TO BE SHRI JIGNESH S SHAH. 7.6. INDEED, THE ULTIMATE PURCHASER IN THE STA TEMENT HAS RECORDED THE FACT THAT THE ASSESSEE WAS INTRODUCED AS THE REAL O WNER. SIMILARLY THE PURCHASER HAS MADE THE PAYMENT TO THE DIDPL THROUGH THE ASSESSEE ONLY. HOWEVER WE FIND THAT THERE WAS NO PAYMENT MADE TO T HE ASSESSEE RATHER THE CHEQUE WAS ISSUED IN THE NAME OF DIDPL AND THER E WAS NO EVIDENCE THAT DIDPL HAS HANDED OVER THE MONEY TO THE ASSESSE E. 7.7. IN VIEW OF THE ABOVE, AND AFTER CONSIDERIN G THE FACTS IN TOTALITY, WE ARE OF THE VIEW THAT NO ADDITION IN THE GIVEN FACTS AND CIRCUMSTANCES IS ITA NO.2258/AHD/2017 ITO VS. RAKESHKUMAR HIRALAL THAKKAR ASST .YEAR - 2009-10 - 15 - WARRANTED IN THE HANDS OF THE ASSESSEE. HENCE, WE D O NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT (A). THUS, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19/12/2019 SD/- SD/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 19/12/2019 &.., .(.. / T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-3, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 18.12.2019 ( WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DRA GON ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 18.12.2019/19.12.19 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.20/12/19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20/12/19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER