The DCIT, Central Circle-2(2), Ahmedabad V. Shri Ajay Surendrabhai Patel, Ahmedabad

ITA 2587/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85523 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-11-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Keywords: Reopening of assessment; Capital asset; Gift; Search and seizure; Loose papers; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence; Tangible material
• Section: 54B; 147; 131; 69; 148; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , 0 0 , BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, A CCOUNTANT MEMBER ITA NO. ASSESSMENT YEAR APPELLANT RESPONDENT 2367 / A HD /13 2006 - 07 DCIT, CENTRAL CIRCLE - 2(2), AHMEDABAD. SHRI AJAY SURENDRABHAI PATEL, 5, JAGNIRMAN SOCIETY, B/H NAVRANG HIGH SCHOOL, NAVRANGPURA, AHMEDABAD - 380006. 2368/A HD /13 2008 - 09 RE VENUE ASSESSEE 2587/A HD /13 2010 - 11 REVENUE ASSESSEE C.O. NO. ASSESSMENT YEAR APPELLANT RESPONDENT 39/A HD /13 2006 - 07 SHRI AJAY SURENDRABHAI PATEL, 5, JAGNIRMAN SOCIETY, B/H NAVRANG HIGH SCHOOL, NAVRANGPURA, AHMEDABAD - 380006. DCIT, CENTRAL CIRCLE - 2 (2), AHMEDABAD. 40/A HD /13 2008 - 09 ASSESSEE REVENUE 41/A HD /13 2010 - 11 ASSESSEE REVENUE REVENUE BY : SHRI T.P. KRISHNAKUMAR, CIT - DR ASSESSEE(S) BY : SHRI ANIL KSHATRIYA, AR / DATE OF HEARING : 15.10.2014 / 12 . 1 1 . 2014 / DATE OF PRONOUNCEMENT: 09 . 01 . 201 5 / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THE APPEALS FILED BY THE REVENUE AND CROSS - OBJECTIONS FILED BY THE ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 2 INCOME TAX (APPEALS) - III, AHMEDABAD DATED 10.07.2013 FOR ASSESSMENT YEARS 2006 - 07 AND 2008 - 09 AND DATED 20.08.2013 FOR ASSESSMENT YEAR 2010 - 11. 2. THE COMMON GROUND OF APPEAL TAKEN BY THE REVENUE IN ALL THE APPEALS IS THAT THE COMMISSI ONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS 6,52,10,209/ - IN ASSESSMENT YEAR 2006 - 07, RS 1,91,00,780/ - IN ASSESSMENT YEAR 2008 - 09 AND RS 73,30,069/ - IN ASSESSMENT YEAR 2010 - 11 MADE U/S. 69 OF THE ACT, DESPITE T HE MATERIAL ON RECORD TO ESTABLISH THAT UNACCOUNTED MONEY HAD BEEN RECEIVED BY THE SELLERS OF PROPERTY WHICH WAS PURCHASED BY THE ASSESSEE. 3. THE FACTS OF THE CASE AS BORNE OUT BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) ARE AS UNDER: 10. DURING THE COURSE OF SEARCH IN THE CASE OF ONE SHRI SOMABHAI AMBALAL PRAJAPATI, CERTAIN DOCUMENTS WERE FOUND WHICH INDICATED THAT ONE SHRI VIVEK PRAHLADBHAI PATEL ENTERED INTO AGREEMENTS WITH HIM TO PURCHASE VARIOUS PLOTS OF LAND. AO COMPLETED ASSESSME NT IN THE CASE OF VIVEK PRAHLADBHAI PATEL FOR A.Y. 2005 - 06 WITH THE FOLLOWING OBSERVATION: '3. DURING THE COURSE OF SEARCH IN THE CASE OF SOMABHAI AMBALAL PRAJAPATI AT KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, THALTEJ, AHMEDABAD ON 08.12.2009, IT IS FOUND T HAT SHRI SOMABHAI A. PRAJAPATI, SHRI VISHNUBHAI A. PRAJAPATI, SHRI CHANDUBHAI A. PRAJAPATI HAVE ENTERED INTO BANACHITHI (AGREEMENT TO SELL LAND) ON 18.01.2005, FOR SALE OF LAND AT BHADAJ WITH THE ASSESSEE. THE BANACHITTHI WAS SIGNED ON 18.01.05 BY SOMABHAI AMBALAL PRAJAPATI, CHANDUBHAI AMBALAL PRAJAPATI AND VISHNUBHAI AMBALAL PRAJAPATI AS SELLER AND THE ASSESSEE AS THE BUYER. THE SAID 'BANACHITHI' HAS BEEN SEIZED AND INVENTORIZED AT PAGE NO. 119 TO 122 OF ANNEXURE - A - 22. AS PER THE BANACHITTHI THE RATE PER VIGHA FOR JUNI SHARAT LAND WAS FIXED AT RS. 29,51,000/ - WHILE THE RATE PER VIGHA OF NAVI SHARAT LAND WAS FIXED AT RS. 21,85,000/ - . THE DETAILS OF PLOTS OF LAND RECORDED IN BANACHITHI ARE AS UNDER: BLOCK NO. SURVEY NO. SHARAT SQ.MT 540 515 OLD SHARAT 11432 487 471 NEW SHARAT 11938 ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 3 497 476, 477, 482 NEW SHARAT 31566 504 488 NEW SHARAT 27822 494 473/2 OLD SHARAT 4097.50 509 487, 497 NEW SHARAT 32729 500 480 OLDSHARAT 8296 502 484 GOVT. HOLD 12950 505 485 GOVT. HOLD 1 6662 3.1 HOWEVER, IT WAS NOTICED THAT ALL THE ABOVE PLOTS OF LAND WERE NOT TRANSFERRED BY THE SELLERS, AS AGREED IN THE SAID BANACHITHI. THUS, SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 14.12.2011 IN ANSWER TO QUESTION NO. 3 HAS CLARIFIED THAT THE PLOTS OF LAND BEARING SURVEY NOS. 502,505, 540, 497 & 487 WERE DISPUTED AND COULD NOT BE TRANSFERRED DUE TO PENDING CIVIL SUITE, THUS, IN PLACE OF THESE, BLOCK NO. 512A, 512 - B, 510 & 513 WHICH ARE IN THE SAME VICIN ITY AT BHADAJ WERE TRANSFERRED TO THE PERSONS SPECIFIED BY THE ASSESSEE. ACCORDING TO SOMABHAI THIS WAS DONE AS THEY HAD ALREADY RECEIVED THE CONSIDERATION AS PER THE TERMS OF THE BANACHITHI AND WAS UNDER AN OBLIGATION TO TRANSFER THE LANDS TO THE ASSESSEE . 3.2 FURTHER, AS PER PAGE NO. 114 OF ANNEXURE A - 22 SEIZED FROM THE PREMISES OF SHRI SOMABHAI A. PRAJAPATI AT KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, THALTEJ, AHMEDABAD ON 08.12.2009, DETAILS OF BLOCK - WISE AMOUNT RECEIVED BY SHRI SOMABHAI AMABALAL PRAJAPA TI IS MENTIONED WHICH IS SUMMARIZED AS UNDER: BLOCK NO. VIGHA RATE AMOUNT 504 11.70 21.85 2,55,64,500 494 1.72 29.51 50,75,720 512 - B 3.74 21.85 81,71,900 509 6.88 21.85 1,50 , 32,800 500 3.49 29.51 1,02,98,990 512 - A 5.40 21.85 1, 17,99,000 510 5.10 29.51 1 , 50 , 50 , 100 ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 4 TOTAL 9,09,93,010 3.3 RATE SHOWN IN THIS PAPER IS EXACTLY THE SAME RATE WHICH IS SHOWN IN BANACHITTI. FURTHER, ON PAGE NO. 117 OF ANNEXURE A - 22, FOLLOWING DETAILS ARE MENTIONED: OLD SHARAT 540 4.97 4 94 1.78 RATE RS 29,51,000/ - 500 3.60 510 5.28 15.63 RS 4,61,24,130/ - RECEIVED. NAVI SHARAT 509 7.11 504 12.09 497 RATE RS 21,85,000/ - 487 512A 5.58 512B 3.87 RECEIVEDRS6,26,00,250/ - RS 13,02,00,000/ - RECEIVED ( - ) RS 10,87,24,3 80/ - FOR COMPLETED DASTAVEJ OLD+NEW RS 2,14,75,520/ - RECEIVED BUT DASTAVEJ YET TO BE DONE. THEREFORE, DASTAVEJ OF 9.82 VIGHA LAND IS YET TO BE MADE. 3.4 THIS PAGE CLEARLY STATES THAT SHRI SOMABHAI A PARAJAPATI AND OTHERS HAVE GOT SALES CONSIDERATION O F RS. 13,02,00,000/ - FOR SALE OF ABOVE REFERRED TO LAND. ON THE BASIS OF ABOVE DOCUMENTS SHRI SOMABHAI AMBALAL PRAJAPATI, SHRI VISHNUBHAI AMBALAL PRAJAPATI, SHRI CHANDUBHAI AMBALAL PRAJAPATI & THEIR FAMILY MEMBERS HAVE ACCEPTED RECEIPT OF ON - MONEY FOR SALE OF ABOVE LANDS AS PER THE RATES MENTIONED IN THE SAID BANACHITHI AND DISCLOSED THE CAPITAL GAINS ON THE SAME IN THEIR RETURNS OF INCOME. THE DISCLOSURE MADE BY THE BUYERS IS TABULATED HEREUNDER: SR N STOCK MB. REGN. NO. SALE CONSIDERATION INDEX COST CAPITAL GAIN NAME OF CO - OWNER SHARE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 5 (1) 500 5812 1,02,98,990 1,40,166 (73044X497) 259 (F.Y.94 - 95) 1,01,58,824 1) CHANDUBHAI A.PRAJAPATI 2) PRAKASH C. PRAJAPATI. 3) GITABEN C. PRAJAPATI. 4} ANILABEN D/O. C. 5) ALPABEN D/O, C, 6) CHANDUBHAI.. 7) U RVASHIBEN D/O. C. 8) PRAGNABEN W/O. P. 12, 69,853. 12,69,853. 12,69,853. 12,69,853. 1269,853. 12,69,853. 12,69,853. 12,69,853 (2) 494 5582 50.75,720 1,11,388 (44.600X497) 49,64,332 1) CHANDUBHAI A. 2) SOMABHAIA. 3) VISHNUBHAIA. 16,54,777. 16 , 54,7 77. 16,54,777. 199 (F.Y.91 - 92) ( 3) 510 382 17/01/ 2006 1,50,50,100 2,16,694 (86.765X497) 1,48,33,406 1) GITABEN CHANDUBHAI. 2) MANIBEN SOMABHAI. 3) SANGITABEN V. 49,44,469. 49,44,469. 49,44,469. 199 (F.Y.91 - 92) ( 4 ) 504 5813 02.08.0 5. 2,55,64,500. 3,65,309 (1,79.347X497) 2,51,99,191. 1) SOMABHAIA. 2) MANIBEN SOMABHAI. 3) PANKAJ SOMABHAI. 4) KAMLESH SOMABHAI. 5) NISHA PANKAJ. 6) LLABEN D/O. SOMABHAI. 7)HIRALBEN D/O. SOMABHAI. 35,99,885. 35,99,884. 35,99.88 4. 35,99.884. 35,99,884. 35,99,884. 35,99,884. 244 (F.Y.93 - 94) (5) 509 5581 25.07.2 005 1,50,32,800 1,26,587 1,47,16,651 1) VISHNUBHAI AMBALAL 1 , 47 , 16,651 2008 - 2009 (6) 512 - B 8406 10/07/ 2007 81,71,900. 90,653 ( 64.000X551) 389 80,81,247 1) SOMABHAI A.PRAJAPATI 80.81,247. (F.Y.99 - 2000) ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 6 (7) 512 - A 8408 10/07/ 2007 1,17,99,000. 2,09,560 (1.16.000X551) 1.15,89,440 1) MANIBEN SOMABHAI. 2) PANKAJ SOMABHAI. 3) HIRALBEN SOMABHAI. 4) KAMLESH SO MBHAI. 5) NISHABEN PANKAJBHAI. * 19,31,573. 19,31,573. 19,31,573. 19,31.573. 19,31,573. 19,31,573. 305 (F.Y.96 - 97) RO/TARAOEN SOMAUNAR 2010 - 2011 - (8) 513 9480 18/06/2 009 96,67 ,069. 95,880 95,71,189. 1) VISHNUBHAI AMBALAL. 95 , 71 , 189. 3.5 FURTHER, SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED U/S. 132(4) OF THE ACT ON 25.01.2010 WHEN CONFRONTED WITH PAGE NO. 111 OF ANNEXURE A - 22, IT WAS REPLIED BY HIM THAT ON T HIS PAGE DETAILS OF TRANSACTION PERTAINING TO ABOVE REFERRED TO LAND IS WRITTEN. ACCORDING TO HIM IT HAS BEEN WRITTEN BY SOME PERSON COMING FROM THE OFFICE OF THE ASSESSEE AND IT HAS BEEN GIVEN TO THEM AS THERE WAS A LITTLE DIFFERENCE IN TOTAL CONSIDERATIO N WHEREIN ACCORDING TO THEM THE TOTAL CONSIDERATION CAME TO RS. 12,79,45,600/ - . 3.6 SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED ON 25.01.2010 HAS REITERATED THAT THE AMOUNT OF ON - MONEY RECEIVED ON SALE OF LAND WAS PAID TO HIM BY PERSON COMIN G FROM THE OFFICE OF THE ASSESSEE AND PAGE NO. 111 OF ANNEXURE A - 22 WAS ALSO WORKING PROVIDED BY THE REPRESENTATIVE OF THE ASSESSEE, AS THERE WAS SOME DIFFERENCE IN CONSIDERATION RECEIVED.' 11. AFTER CONSIDERING VARIOUS SUBMISSIONS OF SHRI VIVEK PRAHLADBH AI PATEL, AO MADE ADDITION OF RS.3,25,50,000/ - U/S.69 IN THE CASE OF VIVEK PRAHLADBHAI PATEL WITH THE FOLLOWING OBSERVATION: '3.17 THE CONTENTIONS OF THE ASSESSEE ALONG WITH FACTS OF THE CASE ARE DISCUSSED HEREUNDER: AN AGREEMENT TO SELL (BANACHITHI) WA S ENTERED INTO BETWEEN THE ASSESSEE AND THE PRAJAPATI FAMILY FOR PURCHASE OF PLOTS OF LAND AT VILLAGE BHADAJ, AHMEDABAD WHICH HAS CREATED A CHARGE IN FAVOUR OF THE ASSESSEE ON THE LAND IN QUESTION. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 7 THE AGREEMENT IS DULY SIGNED BY BOTH THE PARTIES WHEREIN T HE ASSESSEE IS SHOWN AS THE PURCHASER. A RATE WAS AGREED TO BETWEEN THE ASSESSEE AND PRAJAPATI FAMILY FOR PURCHASE OF SALE PLOTS OF LAND. DURING THE COURSE OF SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE PREMISES OF THE SELLERS VARIOUS LOOSE SHEETS AND DO CUMENTS, REFERRED TO ABOVE, WERE FOUND WHERE CASH RECEIPTS, AS PER THE AGREED RATES, HAVE BEEN RECORDED TO HAVE BEEN RECEIVED BY THE PRAJAPATI FAMILY. , ADVANCE OF RS. 11.00 LACS WAS PAID BY THE ASSESSEE TO THE PRAJAPATI FAMILY FOR PURCHASE OF SAID LANDS A ND NOWHERE IN THE BANACHITHI IT HAS BEEN RECORDED THAT ADVANCE HAS BEEN PAID THROUGH CHEQUE AS CONTENDED BY THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT IT IS A NORM IN LAND TRANSACTIONS THAT THE AMOUNT PAID OR RECEIVED THROUGH CHEQUES IS DULY RECORD ED ALONG WITH CHEQUE NUMBER AND NAME OF THE BANK IN THE LAND DOCUMENT. IT IS PERTINENT TO NOTE HERE THAT 'AGREEMENT TO SELL MADE IN WRITING IS A LEGAL CONTRACT AND VESTS A RIGHT OF THE PURCHASER ON THE PROPERTIES AGREED TO BE SOLD TO HIM BY THE SELLERS. T HUS, ANY LEGAL CONTRACT WILL HOLD GOOD UNTIL CANCELLED BY WAY OF ANY OTHER LEGAL CONTRACT. HOWEVER, NEITHER DURING THE COURSE OF THE SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE RESIDENTIAL OR BUSINESS PREMISES OF THE SELLERS ANY CANCELLATION AGREEMENT WH EREIN SAID BANACHITHI WAS CANCELLED WAS FOUND NOR ANY SUCH AGREEMENT HAS BEEN FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THUS, THE CONTENTION OF THE ASSESSEE THAT THE BANACHITHI WAS CANCELLED HAS NOT BEEN PROVED TO BE CORRECT. FURTHER, IF THE BANACHITHI WOULD HAVE BEEN CANCELLED THE ORIGINAL BANACHITHI WOULD HAVE BEEN IN THE POSSESSION OF THE SELLERS AND NOT THE ASSESSEE AS CLAIMED BY THE ASSESSEE. FURTHER THE LANDS AGREED TO HAVE BEEN SOLD HAVE ACTUALLY BEEN TRANSFERRED BY THE SELLERS AFT ER ENTERING INTO AGREEMENT TO SELL WITH THE ASSESSEE. THE SELLERS HAVE DISCLOSED THE SALE CONSIDERATION AS PER THE RATES MENTIONED IN BANACHITHI AND OFFERED CAPITAL GAINS ON THE SAME AS PER THE SHARE HELD BY THEM IN THE LAND SOLD CONSEQUENT TO BANACHITHI. IT IS PERTINENT TO NOTE HERE THAT THE FOLLOWING LANDS THAT HAVE BEEN TRANSFERRED BY THE SELLERS ARE NOT RECORDED IN THE BANACHITHI. IN THIS REGARD, SHRI SOMABHAI A PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 14.12.2011 HAS SPECIFICA LLY IN ANSWER TO QUESTION NO. 3 HAS STATED THAT THE LAND BEARING BLOCK NOS. 502, 505, 587,497, AND 540 WERE DISPUTED PLOTS AND THUS COULD NOT BE TRANSFERRED. THUS, IN ORDER TO HONOUR THE TERMS OF THE BANACHITHI AS THE SELLERS HAD ALREADY RECEIVED CONSIDERA TION FOR THE SALE OF LAND BLOCKS BEARING NO. 510, 512 - A, 512 - B, & 513 WERE TRANSFERRED AT THE INSISTENCE AND DIRECTIONS OF THE ASSESSEE TO THE ULTIMATE PURCHASERS. SNRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, R EFERRED TO ABOVE, HAS ADMITTED TO HAVE RECEIVED THE SALE CONSIDERATION FROM THE ASSESSEE. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 8 FURTHER, SHRI SOMABHAI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE ASSESSMENT PROCEEDINGS ON 14.12.2011 HAS CATEGORICALLY STATED THAT THE LAND O WNED BY THEM AND AGREED TO SELL VIDE THE 'AGREEMENT TO SELL' ENTERED INTO WITH THE ASSESSEE WERE TRANSFERRED AS PER HIS INSISTENCE TO THE PERSONS SPECIFIED BY HIM AS THE RIGHTS IN THE SAID LAND WERE ALREADY TRANSFERRED TO THE ASSESSEE VIDE THE BANACHITHI D ATED 18.01.2005. THE TOTAL PLOT - WISE SALE CONSIDERATION DISCLOSED BY THE SELLERS WITH REGARD TO THE SALE OF LAND AS PER THE OBLIGATION CAST UPON THEM THOUGH THE BANACHITHI IS AS UNDER: SR.NO BLOCK NO. DOCUMENT NO. AND DATE AMOUNT AS PER DOCUMENT. AMOU NT AS PER DISCLOSURE ASST. YEAR. (1) 509 5581 - 25/07/2005 6,50,000. 1,50.32,800 2006 - 2007 (2) 500 5812 - 02/08/20 0 5 4,00,000 1,02,98,990 2006 - 2007 (3) 494 5582 - 25/07/2005 1,51,000 50.75 , 720 2006 - 2007 (4) 504 5813 - 02/08/2005 11,10 ,900 2,55.64 , 500 2006 - 2007 (5) 510 382 - 17/01/2006 3,50,001 1,50,50 , 100 2006 - 2007 (6) 512 - B 8406 - 10/07/2007 3,56,120 81,71 , 900 2008 - 2009 (7) 512 - A 8408 - 10/07/2007 5,14,000 1,17 , 99,000 2008 - 2009 (8) 513 9480 - .18/06/2009 23,37,000 96,67,069 2010 - 2011 ( 9) 502 & 505 8510 - 13/05/2010 80,75 , 000 3,33,96,683 2011 - 2012 3.18 THE ABOVE PLOTS WERE FINALLY TRANSFERRED BY THE SELLERS TO SHRI AJAY S. PATET (SR 1 TO 8 ABOVE) AND TO SHRI DHIRUBHAI AMIN (SR. NO. 9, ABOVE) AND NOT TO THE ASSESSEE.LN VIEW OF THE FACTS DISCUSSED ABOVE IT IS CLEAR THAT THE SELLERS HAVE RECEIVED AN AMOUNT OF RS. 13.02 CRORES TOWARDS THE SALE OF PLOTS OF LAND AT BHADAJ AS PER THE BANACHITHI FROM THE ASSESSEE AS PER DETAIL BELOW: DATE AMOUNT MODE OF PAYMENT REMARKS 18.01.2005 11,00,000 / - CASH BEING 'BANA' (ADVANCE) AMOUNT PAID ON SIGNING OF BANACHITHI. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 9 20.01.2005 3,14,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. 20.06.2005 3,25,50,000/ - CASH AS PER THE SCHEDUL E OF PAYMENT RECORDED IN BANACHITHI. 20.11.2005 3,25,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. 20.04.2006 3,25,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. TOTAL 13,02,00, 000/ - 3.19 IT HAS ALSO BEEN CONFIRMED BY THE SELLERS THAT THE LAND WAS TRANSFERRED TO SHRI AJAY S PATEL (BLOCK NOS. 504, 494, 509, 500, 510, 512 - A, 512 - B & 513 AT BHADAJ) AND SHRI DHIRUBHAI AMIN (BLOCK NO. 502 & 505 AT BHADAJ) AT THE INSTANCE OF THE ASSESSEE. SINCE, AJAY PATEL BEING THE FINAL BENEFICIARY HAS DENIED TO HAVE PAID ANY AMOUNT OVER AND ABOVE THE DOCUMENTED PRICE TO THE SELLER, THUS, THE SOURCE OF THE PAYMENTS MADE BY THE ASSESSEE TO THE SELLERS IN THIS REGARD REMAINS UNEXPLAINED. 3.20 IT IS DEAR THAT AN AGGREGATE AMOUNT OF RS. 3,25,50,000 / - WAS PAID BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR TOWARDS THE PURCHASE OF THE RIGHTS IN THE ABOVE MENTIONED PLOTS OF LAND WHICH WERE SUBSEQUENTLY TRANSFERRED TO THE ASSESSEE HAS FAILED TO EX PLAIN THE SOURCE OF THE SAME. THUS, THE AMOUNT OF RS. 3.25,50,000 IS TREATED AS DEEMED TO BE THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 69 OF THE ACT AND IS ACCORDINGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON PROTECTIVE BASIS. SINCE T HE PURCHASER OF THE ABOVE PLOTS IS NOT THE ASSESSEE, THEREFORE, SUBSTANTIVE ADDITION IS BEING CONSIDERED IN THE HANDS OF THE FINAL BUYERS.' 12. SIMILAR ADDITIONS WERE MADE IN THE CASE OF SHRI VIVEK PRAHLADBHAI PATEL FOR A.Y. 2006 - 07 AND 2007 - 08. 13. THER EAFTER AO ISSUED NOTICES U/S. 147 IN THE CASE OF APPELLANT FOR A.Y. 2006 - 07, 2008 - 09 AND 2010 - 11. AFTER CONSIDERING VARIOUS REPLIES FILED BY THE APPELLANT, AO MADE ADDITION OF RS.6,52,10,2097 - IN THE CASE OF APPELLANT FOR A.Y. 2006 - 07 WITH THE FOLLOWING OB SERVATION: '5. THE CONTENTIONS OF THE ASSESSEE ALONG WITH FACTS OF THE CASE ARE DISCUSSED HEREUNDER: AN AGREEMENT TO SELL (BANACHITHI) WAS ENTERED INTO BETWEEN SHRI VIVEK. P. PATEL AND THE PRAJAPATI FAMILY FOR PURCHASE OF PLOTS OF LAND AT VILLAGE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 10 BH ADAJ, AHMEDABAD. THE PLOTS OF LAND WERE ULTIMATELY TRANSFERRED TO THE ASSESSEE WHO HAS CREATED A CHARGE IN FAVOUR OF THE ASSESSEE ON THE LAND IN QUESTION. THE AGREEMENT IS DULY SIGNED BY BOTH THE PARTIES WHEREIN SHRI VIVEK. P. PATEL IS SHOWN AS THE PURCHA SER. THE RATE WAS AGREED TO BETWEEN SHRI VIVEK. P. PATEL AND PRAJAPATI FAMILY FOR PURCHASE OF SAID PLOTS OF LAND. DURING THE COURSE OF SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE PREMISES OF THE SELLERS VARIOUS LOOSE SHEETS AND DOCUMENTS REFERRED TO ABO VE, WERE FOUND WHERE CASH RECEIPTS, AS PER THE AGREED RATES, HAVE BEEN RECORDED TO HAVE BEEN RECEIVED BY THE PRAJAPATI FAMILY. AS PER PAGE NO. 120 OF ANNEXURE A - 22 SEIZED FROM KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, NEAR S. B. TRUST VADI, NAVA VADAJ, AHME DABAD, VIDE PANCHNAMA DATED 09.12.2009, ADVANCE OF RS. 11.00 LACS WERE PAID BY SHRI VIVEK. P. PATEL TO THE PRAJAPATI FAMILY FOR PURCHASE OF SAID LANDS. NOWHERE IN THE 'BANA CHITHI' IT HAS BEEN RECORDED THAT ADVANCE HAS BEEN PAID THROUGH CHEQUE AS CONTENDED BY SHRI VIVEK. P. PATEL. IT IS PERTINENT TO MENTION HERE THAT IT IS A NORM IN LAND TRANSACTIONS THAT THE AMOUNT PAID OR RECEIVED THROUGH CHEQUES IS DULY RECORDED ALONG WITH CHEQUE NUMBER AND NAME OF THE BANK IN THE LAND DOCUMENT. FURTHER, DURING THE CROSS EXAMINATION OF SHRI SOMABHAI A. PRAJAPATI AND SHRI PANKAJ S. PRAJAPATI TAKEN BY THE ASSESSEE ON 14.08.2012, SHRI SOMABHAI A. PRAJAPATI AND SHRI PANKAJ S. PRAJAPATI HAVE SPECIFICALLY MENTIONED IN REPLY TO QUESTION NO. 5 THAT THEY HAVE RECEIVED RS. 11.00 LA CS IN CASH. IT IS PERTINENT TO NOTE HERE THAT AGREEMENT TO SELL MADE IN WRITING IS A LEGAL CONTRACT AND VESTS A RIGHT OF THE PURCHASER ON THE PROPERTIES AGREED TO BE SOLD TO HIM BY THE SELLERS. THUS, ANY LEGAL CONTRACT WILL HOLD GOOD UNTIL CANCELLED BY WA Y OF ANY OF HER LEGAL CONTRACT. HOWEVER NEITHER DURING THE COURSE OF SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE RESIDENTIAL OR BUSINESS PREMISES OF THE SELLERS ANY CANCELLATION AGREEMENT WHEREIN SAID BANACHITHI WAS CANCELLED WAS FOUND NOR ANY SUCH AGREE MENT HAS BEEN FURNISHED BY SHRI VIVEK. P. PATEL OR ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THUS, THE CONTENTION OF THE ASSESSEE THAT THE BANACHITHI WAS CANCELLED HAS NOT BEEN PROVED TO BE CORRECT. FURTHER, IF THE BANACHITHI WOULD HAVE BEEN CANCELLED T HE ORIGINAL 'BANACHITHI' WOULD HAVE BEEN IN THE POSSESSION OF THE SELLERS AND NOT WITH SHRI VIVEK. P. PATEL. FURTHER IN LIEU OF LANDS AGREED TO HAVE BEEN SOLD, OTHER LANDS HAVE ACTUALLY BEEN TRANSFERRED BY THE SELLERS TO THE ASSESSEE IN ACCORDANCE WITH TH E CONDITION MENTIONED IN THE 'BANA CHITHI'. THIS FACT, WAS AGAIN REITERATED BY SHRI SOMABHAI A. PRAJAPATI & SHRI PANKAJ S. PRAJAPATI IN THE CROSS - EXAMINATION ON 14.08.2012. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 11 THE SELLERS HAVE DISCLOSED THE SALE CONSIDERATION AS PER THE RATES MENTIONED IN B ANACHITHI AND OFFERED CAPITAL GAINS ON THE SAME AS PER THE SHARE HELD BY THEM IN THE LAND SOLD CONSEQUENT TO 'BANACHITHI'. IT IS PERTINENT TO NOTE HERE THAT THE FOLLOWING LANDS THAT HAVE BEEN TRANSFERRED BY THE SELLERS ARE NOT RECORDED IN THE BANACHITHI. IN THIS REGARD, SHRI SOMABHAI A PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 14.12.2011 HAS SPECIFICALLY IN ANSWER TO QUESTION NO. 3 HAS STATED THAT THE LAND BEARING BLOCK NOS. 502, 505, 487, 497, AND 540 WERE DISPUTED PLOTS AND THUS COULD NOT BE TRANSFERRED. THUS, IN ORDER TO HONOUR THE TERMS OF THE BANACHITHI AS THE SELLERS HAD ALREADY RECEIVED CONSIDERATION FOR THE SALE OF LAND BLOCKS BEARING NO. 510, 512 - A, 512 - B, & 513 WERE TRANSFERRED AT THE INSISTENCE AND DIRECTIONS OF SHRI VIV EK. P. PATEL TO THE ULTIMATE PURCHASER I.E. THE ASSESSEE. THE SAME WAS AGAIN REITERATED BY SHRI SOMABHAI PRAJAPATI AND SHRI PANKAJ S. PRAJAPATI, IN REPLY TO QUESTION NO. 13 &14 DURING THE COURSE OF CROSS - EXAMINATION. THE SAME IS REPRODUCED HEREUNDER FOR T HE SAKE OF CONVENIENCE: - ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 12 SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, REFERRED TO ABOVE, HAS ADMITTED TO HAVE RECEIVED THE SALE CONSIDERATION FROM SHRI VIVEK P. PATE L . FURTHER, SHRI SOMABHAI IN HIS STATE MENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE ASSESSMENT PROCEEDINGS ON 14.12.2011 HAS CATEGORICALLY STATED THAT THE LAND OWNED BY THEM AND AGREED TO SE LL VIDE THE 'AGREEMENT TO SE LL ' ENTERED INTO WITH SHRI VIVEK P. PATEL WERE TRANSFERRED AS PER HI S INSISTENCE TO THE PERSONS SPECIFIED BY HIM AS THE RIGHTS IN THE SAID LAND WERE ALREADY TRANSFERRED TO SHRI VIVEK P. PATE L VIDE THE BANACHITHI DATED 18.01.2005. IN THIS CASE THE BENEFICIARY IS THE ASSESSEE. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 13 ALSO IN HIS REPLY DATED 03.09.2012, IN RESPECT OF BLOCK NO. 504, THE ASSESSEE HAS STATED THAT THE SALE OF LAND IS REVERTED BACK TO THE SELLER AS IT WAS IN CONTRAVENTION OF LAW OF LAND. HOWEVER, IN THE CASE OF ASSESSEE THE QUESTION IS THE SOURCE OF SUCH AMOUNT RATHER THAN THE TRANSACTION WHICH HAS TAKEN PLACE. EVEN IF THE LAND WAS REVERTED BACK TO THE SELLER THE MONEY GIVEN BY THE ASSESSEE TO THE PURCHASE OF SUCH LAND REMAINS UNEXPLAINED. HENCE, HIS CONTENTION THAT THE CONSIDERATION PAID IN RESPECT OF BLOCK NO. 504 SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE DOES NOT HOLD ANY GROUND. FURTHER, WHEN SHRI VIVEK P. PATEL WAS ASKED ABOUT HIS ASSOCIATION WITH THE ASSESSEE DURING HIS STATEMENT TAKEN U/S. 131 ON 04.09.2012, HE STATED THAT HE CAME TO KNOW ABOUT THE ASSESSEE ONLY DURING THE POST SEARCH INQUIRY I.E. AFTER THE DATE OF SEARCH 08.12.2009. THE ASSESSEE HAS ALSO DENIED WITH THE ASSOCIATION WITH SHRI VIVEK P. PATEL. IT IS PERTINENT TO NOTE HERE THAT SHRI VIVEK P. PATEL WAS GIVEN POWER OF ATTORNEY ( NOTARIZED) BY SHRI VISHNUBHAI PRAJAPATI ON 18.0 6.2009. THE POWER OF ATTORNEY (NOTARIZED) IMPOUNDED FROM THE OFFICE PREMISE OF M/S. ARBUDA BRICKS, A - 2, NANDANBAUG SHOPPING CENTRE, BHIMJIPURA, NEW WADAJ, AHMEDABAD VIDE PAGE NO. 129 TO 135 WAS RELATED TO SALE OF LAND(BLOCK NO. 513, SURVEY NO. 490/2, TAL. DRASKOI) AND SHRI VIVEK P. PATEL WERE DEPUTED TO DO THE NECESSARY PAPER WORK REQUIRED FOR TRANSFER OF LAND. THE ASSESSEE HAS ALSO STATED THAT HE DID NOT KNOW SHRI VIVEK P. PATEL AND HE HAS NEVER ACTED AS AGENT IN ANY OF HIS TRANSACTION. IN PARA 11 & 12 OF HIS LETTER DATED 03.09.2012, HE HAS CATEGORICALLY STATED THAT THE ASSESSEE DID NOT HAVE ANY DIRECT OR INDIRECT LINK WHICH ESTABLISHES HIS ASSOCIATION WITH SHRI VIVEK P. PATEL. MOREOVER, THE POWER OF ATTORNEY BELONGS TO BLOCK NO 513 WHICH WAS TRANSFERRED TO THE ASSESSEE IN LIEU OF ONE OF THE DISPUTED BLOCKS. THIS PLOT OF LAND WAS TRANSFERRED TO ASSESSEE ON 18.06.2009, I.E. ON THE SAME DATE AS OF POWER OF ATTORNEY. SHRI SOMABHAI PRAJAPATI HAS CATEGORICALLY ADMITTED IN HIS STATEMENT DATED 14.12.2011 THAT HE HA S TRANSFERRED BLOCK NO 512 - A, 512 - B, 510 AND 513 INSTEAD OF BLOCK NO 502,505,487,497 AND 540, AS THESE WERE LITIGATED LAND. THIS PROVES THAT THERE WAS INDEED DIRECT RELATIONSHIP BETWEEN SHRI VIVEK P PATEL AND THE ASSESSEE. HENCE, THE CONTENTION OF THE ASSE SSEE AND SHRI VIVEK P. PATEL THAT THEY HAVE NO ASSOCIATION BEFORE THE DATE OF SEARCH IS NOT CORRECT. FOR THE SAKE OF CONVENIENCE, RELEVANT EXTRACT OF THE STATEMENT DATED 14.12.2011 OF SHRI SOMABHAI A. PRAJAPATI IS REPRODUCED HEREUNDER: ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 14 THE TOTAL PLOT - W ISE SALE CONSIDERATION DISCLOSED BY THE SELLERS WITH REGARD TO THE SALE OF LAND AS PER THE OBLIGATION CAST UPON THEM THOUGH THE BANACHITHI IS AS UNDER SR.NO BLOCK NO. DOCUMENT NO. AND DATE AMOUNT AS PER DOCUMENT. AMOUNT AS PER DISCLOSURE ASST. YEAR. (D 509 5581 - 25/07/2005 6,50,000. 1,50,32,800 2006 - 2007 (2) 500 5812 - 02/08/205 4,00,000 1,02,98,990 2006 - 2007 (3) 494 5582 - 25/07/2005 1,51,000 50,75,720 2006 - 2007 (4) 504 5813 - 02/08/2005 11,10,900 2,55,64.500 2006 - 2007 (5) 5 10 382 - 17/01/2006 3,50,001 1,50,50,100 2006 - 2007 (6) 512 - B 8406 - 10/07/2007 3,56,120 81,71,900 2008 - 2009 (7) 512 - A 8408 - 10/07/2007 5,14,000 1,17,99,000 2008 - 2009 (8) 513 9480 - 18/06/2009 23,37,000 96,67,069 2010 - 2011 (9) 502 & 50 5 8510 - 13/05/2010 80,75,000 3,33,96,683 2011 - 2012 5.1. THE ABOVE PLOTS WERE FINALLY TRANSFERRED BY THE SELLERS TO THE ASSESSEE(SR. NO. 1 TO 8 ABOVE) AND TO SHRI DHIRUBHAI AMIN (SR. NO. 9, ABOVE) AND NOT TO SHRI VIVEK P. PATEL. IN VIEW OF THE FACTS D ISCUSSED ABOVE IT IS CLEAR THAT THE SELLERS HAVE RECEIVED UNDISCLOSED AMOUNT OF MORE THAN RS. 13 CRORES TOWARDS THE SALE OF PLOTS OF LAND AT BHADAJ AS PER THE 'BANA - CHITHI' FROM THE PURCHASERS (I.E. SHRI AJAY S. PATEL & SHRI DHIRUBHAI AMIN). THUS, THE ASSE SSEE HAS MADE UNDISCLOSED INVESTMENTS IN A.Y. 2006 - 07, 2008 - 09 & 2010 - 11. THE UNDISCLOSED INVESTMENT IN THE RELEVANT ASSESSMENT YEAR IS AS UNDER: BLOCK NO. AMOUNT AS PER THE DOCUMENT AMOUNT SHOWN IN THE BALANCE SHEET AS ON 31.03.2009 BY THE A SSESSEE TRUE SALE CONSIDERATION AS DISCLOSED BY THE SELLERS OF THE LAND DIFFERENCE BETWEEN THE DOCUMENTED PRICE AND ACTUAL AMOUNT PAID 509 6,50,000 / - 7,1 9,880 / - 1,50,32,8007 - 1, 43,82,800 / - ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 15 500 4,00,000 / - 4,45,350 / - F.02,98,9907 - 98,98,990 / - 494 1,51, 000/ - 1 ,71, 410/ - 50,75,7207 - 49,24,720 / - 504 11,10, 900/ - 12,36, 580/ - 2,55,64,5007 - 2,44,53,600 / - 510 35,00,001 / - 4,00, 351/ - 1,50,50,100/ - 1,15,50, 099/ - 58, 11, 901 / - 29,73, 571/ - 7,10,22, 11 0/ - 6 , 52, 1 0 ,209/ - 5.2. IT HAS ALSO BEEN CONFIRMED BY THE SELLERS THAT THE LAND WAS TRANSFERRED TO THE ASSESSEE(BLOCK NOS. 504, 494, 509, 500, 510, 512 - A, 512 - B & 513 AT BHADAJ) AND SHRI DHIRUBHAI AMIN (BLOCK NO. 502 & 505 AT BHADAJ) AT THE INSTANCE OF SHRI VIVEK P. PATEL AND THE ASSESSEE HAS GROSSLY FAILED TO PROVE OTHERWISE. FURTHER THERE WAS NO SATISFACTORY EXPLANATION TO THE SOURCE OF SUCH INVESTMENT. 5.3. THUS, IT IS CLEAR THAT AN AGGREGATE AMOUNT OF RS. 7,10,22,110/ - WAS PAID BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR TOWARDS THE PURCHASE OF THE ABOVE MENTIONED PLOTS OF LAND. THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE SAME. FURTHER, THE DOCUMENTED PRICE OF BLOCK NO. 509, 500, 494, 504 AND 510 COMES TO RS. 58,11,901 / - . THUS, THE DIFFER ENCE AMOUNT OF RS. 6,52,1 0,209 / - IS TREATED AS DEEMED TO BE THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 69 OF THE ACT AND IS ACCORDINGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE.' 14. FOR SIMILAR REASONS ADDITION OF RS. 1,91,00,780/ - WAS MADE IN THE CAS E OF APPELLANT FOR A.Y. 2008 - 09 AND ADDITION FOR RS.73,30,069/ - WAS MADE IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2010 - 11. 4. T HE CIT(A) HELD AS UNDER: - APPELLANT IN THE WRITTEN SUBMISSIONS ARGUED THAT B) NO ORAL AGREEMENT CONTRADI CTING/VARYING THE TERMS OF DOCUMENT COULD BE OFFERED. (I) PARAMJITSINGH V ITO, (2010} 323ITR 588 (PUN & HRY) (II) SMTSUNITA DHADDA VDCIT, ITA NO. 751/JP/2011 (A.Y.2008 - 09) ITAT JAIPUR BENCH 'A' JAIPUR. (III) HANUMANT KUMAR TALESRA V ITO WARD - 2 (1), UDAIP UR IN ITA NO. 383/JU/2008 (A. Y. 2004 - 05). IT IS RESPECTFULLY SUBMITTED THAT FOLLOWING IS THE SPECIFIC EXPRESS CLAUSE NARRATED IN THE REGISTERED SALE DEED EXECUTED IN FAVOUR OF THE APPELLANT BY THE SELLERS OF LAND WHICH READS AS UNDER ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 16 'WE THE SELLERS ADD ITIONALLY UNDERTAKE AND ASSURE TO THE PURCHASER THAT THE SELLERS AND THEIR SUCCESSOR, ASSIGNEES, AND ADMINISTRATORS HAVE NOT GIVEN THE LAND DESCRIBED IN THE SCHEDULE OR ANY OF ITS PARTS TO ANY OTHER PERSONS BY WAY OF MORTGAGE, SALE OR GIFT OR IS NOT IN WRI TING IN ANY WHICH WAY...' ACCORDING TO THE ABOVE CITED EXPRESS CLAUSE IT HAS TO BE CONCLUDED THAT THE SELLERS HAVE CATEGORICALLY EXPRESSED AND UNDER TAKEN THAT THEY HAVE NOT SOLD THIS LAND TO ANY OTHER PERSON OR HAVE CREATED ANY OTHER CHARGE OF WHATSOEVER NATURE ON THIS LAND. THIS TANTAMOUNT TO HOLD THAT IF ANY SUCH CHARGE IF AT ALL WAS CREATED THEN IT RESCIND AUTOMATICALLY. THE A.O. IS VERY MUCH IN POSSESSION OF THESE DOCUMENTS AS EVIDENT FROM PARAGRAPH NO. 5.1 & 5.3 OF THE ASSESSMENT ORDER WHEREIN THE A. O. HAS ADDED THE DIFFERENCE BETWEEN THE DOCUMENTED PRICE AND THE ALLEGED ACTUAL AMOUNT PAID INSTEAD OF DIFFERENCE BETWEEN AMOUNT SHOWN IN THE BALANCE SHEET AND THE ALLEGED ACTUAL AMOUNT PAID. THIS GOES TO PROVE BEYOND DOUBT THAT WHATEVER MIGHT HAVE TRANSPI RED BETWEEN THE PARTIES I.E. SHRI SOMABHAI A. PRAJAPATI, CHANDUBHAI AMBALAL PRAJAPATI & VISHNUBHAI AMBALAL PRAJAPATI AND SHRI VIVEKBHAI PRAHLADBHAI PATEL AS PER BANACHITHI DATED 18 - 1 - 2005 WAS EXCLUSIVELY BETWEEN THOSE PERSONS AND BY VIRTUE OF THE ABOVE REF ERRED CLAUSE IT GETS CANCELLED AND TERMINATED BY THIS LEGAL INSTRUMENT IN WRITING EXECUTED EXCLUSIVELY BETWEEN THE SELLERS OF THE LAND AND THE APPELLANT. THE CASE OF THE A. O. IS SOLELY BASED ON THE ALLEGED AGREEMENT TO SALE DATED 18 - 01 - 2005 WHEREAS AS A COROLLARY TO THE REFERRED CLAUSES OF THE REGISTERED SALE DEED IT STANDS CANCELLED AND TERMINATED. EVEN THE PARTY TO THE AGREEMENT I.E. VIVEKBHAI PRAHLADBHAI PATEL HAS CATEGORICALLY DENIED THAT IT WAS NOT ACTED UPON AND IMPLEMENTED FOR THE REASONS THAT ALL THE DISPUTES AND OBJECTIONS ETC WERE NOT REMOVED AND THEREFORE SALE WAS FORFEITED AND THERE WAS NO QUESTION OF PURCHASING OF LAND (KINDLY REFER ANS. NO. 9 OF STATEMENT DATED 24 - 12 - 2009 OF VIVEK PRAHLADBHAI PATEL WHICH IS AT P.B. PAGE NO. 193 OF PAPER BOOK - II). ASSUMING WITHOUT ADMITTING OR CONCEDING AND IN THE ALTERNATIVE IT CAN ONLY BE CONCLUDED THAT IT COULD BE A CASE OF SALE OF SAME LAND TO MORE THAN ONE BUYER FRAUDULENTLY AND DISHONESTLY WHICH IS A VERY COMMON PRACTICE IN LAND DEALINGS WHERE THE SAME PIECE AND PARCEL OF LAND OR PROPERTY IS SOLD TO DIFFERENT BUYERS REPEATEDLY AT DIFFERENT CONSIDERATION WITHOUT MAKING IT KNOWN TO EACH OTHERS. AS PER THE RATIO LAID DOWN BY THE HONORABLE PUNJAB AND HARYANA HIGH COURT(SUPRA) IT HAS TO CONCLUDED THAT THE ORA L EVIDENCES ADDUCED BY SOMABHAI A. PRAJAPATI AND PANKAJ PRAJAPATI AS ACCEPTED BY A.Q. ARE INADMISSIBLE IN VIEW OF THE SALE DEED REGISTERED AT A LATER DATE. THE RATIO LAID DOWN THAT, IT FOLLOWS THAT NO ORAL AGREEMENT CONTRADICTING/ VARYING THE TERMS OF A DO CUMENT COULD BE OFFERED SQUARELY APPLIES TO THE FACTS OF THE CASE IN TERMS OF THE EXPRESS CLAUSE CITED ABOVE. ONCE THE AFORESAID PRINCIPLE IS CLEAR THEN THE OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED DATED SEPTEMBER 24,2002 (A - 7) HAS TO BE AC CEPTED AND IT CANNOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE SQUARELY APPLIES TO THE FACTS OF THE APPELLANT'S CASE IN AS MUCH AS THAT THE APPELLANT (SHRI AJAY. S. PATEL) WAS NOT A PARTY TO THE BANACHITHI DATED 18 - 01 - 2005 AND HE WAS A PARTY TO THE SAL E DEED EXECUTED ON A LATER DATES I.E.25 - 7 - 2005, 2 - 8 - 2005, 16 - 1 - 2006 AND 10 - 07 - 2007 PARTICULARLY IN VIEW OF THE FACTS DISCLOSED IN THE REFERRED CLAUSE. IT MAY THEREFORE BE KINDLY HELD THAT THE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 17 AGREEMENT OF SALE DATED 18/01/2005 STANDS CANCELLED BY THIS LEGA L DOCUMENT IN THE FORM OF REGISTERED SALE DEED REFERRED ABOVE AND THEREFORE NO ADDITIONS SO MADE IS LIABLE TO BE SUSTAINED AND AS SUCH IT MAY KINDLY BE DIRECTED TO BE DELETED IN FULL. C) ADDITION MADE ON SUSPICIOUS. UMACHARAN SHAW & BROS V CIT, (195 9) 37ITR 271 (SC). 'SUSPICIOUS HOW SO EVER STRONG CANNOT TAKE THE PLACE OF THE MATERIAL OR EVIDENCE' WHEN THE MATERIAL RELIED BY THE A.O. IN THE FORM OF IMPUGNED AGREEMENT OF SALE DATED 18 - 01 - 2005 AND STATEMENTS RECORDED OF SHRI SOMABHAI A. PRAJAPATI & P ANKAJ S. PRAJAPATI WENT TO PROVE THAT ALLEGED INVESTMENTS HAD BEEN MADE IN F.YS. 2004 - 05,2005 - 06 & 2006 - 07 THAT TOO BY THE THIRD PARTY AND NOT THE APPELLANT AND ALSO THE REGISTERED SALE DEEDS EXECUTED IN FAVOUR OF APPELLANT FURTHER WENT TO PROVE THAT SO FA R AS THE APPELLANT IS CONCERNED THE AGREEMENT OF SALE DATED 18 - 01 - 2005 STOOD CANCELLED BY VIRTUE OF THE EXPRESS CLAUSE THAT 'WE THE SELLERS ADDITIONALLY UNDERTAKE AND ASSURE TO THE PURCHASER THAT THE SELLERS AND THEIR SUCCESSOR, ASSIGNEES, AND ADMINISTRATO RS HAVE NOT GIVEN THE LAND DESCRIBED IN THE SCHEDULE OR ANY OF ITS PARTS TO ANY OTHER PERSONS BY WAY OF MORTGAGE, SALE OR GIFT OR IS NOT IN WRITING IN ANY WHICH WAY...' THEN IN ABSENCE OF ANY OTHER EVIDENCE OR MATERIAL THE ADDITION SO MADE WAS MADE ON SUSP ICIOUS, SURMISES, CONJECTURE, WHIMS & FANCIES. D) U/S.69 OF THE ACT THE ADDITIONS, IF ANY, COULD BE MADE IN SUCH FINANCIAL YEAR IN WHICH THE ASSESSEE HAS MADE INVESTMENTS. (I) USHAKANT N PATEL V CIT.282 ITR 553 (GUJ) 'THE TRIBUNAL LOST SIGHT OF THE FACT THAT S. 69 OF THE ACT OPENS WITH THE WORDS 'WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, THE ASSESSEE HAS MADE INVESTMENT...' THEREFORE, IN THE FIRST INSTANCE IT WAS INCUMBENT UPON THE AUTHORITY TO ESTABLISH THAT THERE WE RE INVESTMENTS MADE BY THE ASSESSEE; THAT SUCH INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE: AND THAT, SUCH INVESTMENTS HAD BEEN MADE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN QUESTI ON,' AS PER THE BINDING RATIO LAID DOWN BY THE HONORABLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE AFORESAID JUDGMENT, FIRSTLY IT WAS INCUMBENT UPON THE A.O. TO ESTABLISH THAT SAID INVESTMENT I.E. THE ALLEGED AMOUNT PAID ON ACCOUNT OF IMPUGNED BANACHITH I DATED 18 - 01 - 2005 WAS INTACT PAID BY THE APPELLANT ASSESSEE HIMSELF AND NO OTHER ASSESSEE OR PERSON SECONDLY SUCH INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE APPELLANT ASSESSEE AND ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 18 THIRDLY THAT SUCH INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR/S IMMEDIATELY PRECEDING THE ASSESSMENT YEARS IN QUESTION. AS REGARDS TO THE ABOVE STATED FIRST RATIO IT IS ESTABLISHED AND PROVED BEYOND DOUBT THAT THE APPELLANT ASSESSEE HAS NOT MADE THE SAID INVESTMENT BUT WAS MADE BY THIRD PARTY. THEREFORE, ON THIS COUNT ONLY NO ADDITIONS U/S.69 COULD HAVE BEEN MADE IN THE FINANCIAL YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR/S IN QUESTION. IN VIEW OF THIS THE OTHER TWO RATIOS LAID DOWN BY THE HONORABLE HIGH COURT ARE NOT TO BE LOOKED INTO AT ALL AS ALL THESE THREE CONDITIONS SHALL HAVE TO BE FULFILLED SIMULTANEOUSLY AND IF THE FIRST CONDITION IS NOT SATISFIED THEN THE OTHERS NEED NOT BE DISCUSSED AT ALL. HOWEVER FOR THE SAKE OF CLARITY IT IS - RESPECTFULLY SUBMITTED THAT THE APPELLANT ASSESS ES IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND THE A.O. HAS WORKED OUT THE DIFFERENCE FOR MAKING ADDITIONS ON THE BASIS OF BALANCE SHEET PREPARED UPON CLOSING AND ADJUSTING SUCH BOOKS OF ACCOUNT. THEREFORE, THIS RATIO COULD BECOME APPLICABLE IF THE ASSESSE E IS NOT MAINTAINING BOOKS OF ACCOUNT AT ALL AND AS SUCH IT BECOMES IMPERATIVE TO ADD IT BACK UNDER SECTION 69 OF THE ACT. IT IS AN UNDISPUTED AND ADMITTED FACT THAT THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT. THEREFORE, ON THIS COUNT O NLY NO ADDITIONS U/S.69 COULD HAVE BEEN MADE OR SHOULD BE SUSTAINED IN ALL THE THREE A.YS. I.E. 2006 - 07, 2008 - 09 & 2010 - 11. AS PER THE ABOVE STATED THIRD RATIO THE A.O. HAS TO ESTABLISH THAT SUCH INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR 2005 - 06, 2 007 - 08 & 2009 - 10 RELEVANT TO ASSESSMENT YEARS 2006 - 07, 2008 - 09 & 2010 - 11 RESPECTIVELY FOR MAKING ADDITION U/S.69 OF THE ACT BUT THE FACTS AND MATERIAL AVAILABLE ON RECORD IN THE FORM OF THE IMPUGNED BANACHITHI DATED 18 - 01 - 2005 AND THE STATEMENTS OF CONNECT ED PERSONS AS RELIED BY A.O. TO MAKE THE ADDITIONS IN THE RESPECTIVE A.YS. WENT TO PROVE THAT IT WAS INVESTED(PAID) - [EVEN IF BY THE THIRD PARTY] IN F. YS.2004 - 05, 2005 - 06 & 2006 - 07 RELEVANT TO A. YS. 2005 - 06, 2006 - 07 & 2007 - 08. THEREFORE, IT MAY KINDLY BE HELD THAT THE ADDITIONS MADE U/S. 69 OF THE ACT IN A. Y.S. 2008 - 09 & 2010 - 11 ARE LIABLE TO BE DELETED AND IT MAY BE HELD SO. (II) DR.PRAKASH TIWARI V CIT,(1984) 148ITR 474 (M.P.) E) WORD 'MAY' IN SECTION 69 CAN NOT BE INTERPRETED TO MEAN SHALL'. CIT V NOORJAHAN, (1999) 237 ITR 570 (SC). HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE APPELLANT'S CASE AND ALSO IN VIEW OF ALL THE SUBMISSIONS MADE THE A.O. SHOULD NOT HAVE MADE THE ADDITIONS U/S 69 OF THE ACT BEING UNWARRANTED AS THE CASE DOES NOT MERIT TO APPLY THE PROVISIONS OF SECTION 69 THOUGH INVOKED AND THEREFORE MAY KINDLY BE DIRECTED TO BE DELETED IN FULL. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 19 F) SCOPE OF AN AGREEMENT OF SALE IN THE CASE OF THIRD PARTY PARTICULARLY WHEN THE APPELLANT IS NOT A PARTY TO SUCH ALLEGED AGREEMENT OF SALE AND EFFECT AND IMPLICATION OF GENERAL POWER OF ATTORNEY IN THE NAME OF THIRD PARTY PARTICULARLY WHEN THE APPELLANT IS NOT GRANTOR OF SUCH POWER OF ATTORNEY. SURAJ LAMP & INDUSTRIES LTD V STATE OF HARYANA IN SLP (C) 13917 OF 2009 THE HON'BLE APEX COURT HAS HELD: - SUBMISSIONS REGARD/MY AN AGREEMENT OF SALE. IT IS SUBMITTED THAT THE FACTS OF CASE OF THE ASSESSEE ARE ON MUCH BETTER FOOTING INASMUCH AS THE ASSESSMENT FRAMED ON THE BASIS OF SUCH ILLEGAL AND VOID DOCUMENTS IS NOT SUSTAINABLE IN THE EYES OF LAW. EVEN OTHERWISE, THE CONTRACT (BETWEEN THIRD PARTY) PURPORTED TO HAVE BEEN EXECUTED BETWEEN MR. PRAJAPATI AND MR. V. PATEL WOULD NOT BIND THE APPELLANT I.E. (AJAY PATEL). MERELY, BECAUSE NO DOCUMENT OF CANCELLATION OF CONTRACT IS RECOVERED OR FURNISHED CANN OT BE FOUNDATION FOR THE ASSESSMENT OR REOPENING OF ASSESSMENT IN THE CASE OF APPELLANT. THE A.O. GROSSLY FAILED TO APPRECIATE THE FACT THAT ANY RIGHT CREATED BY REGISTERED AGREEMENT TO SELL CAN BE CANCELLED / ANNULLED ONLY BY WAY OF A WRITTEN REGISTERED D OCUMENT. HOWEVER, NO SUCH REQUIREMENT OF LAW IS POSTULATED UNDER THE REGISTRATION ACT IN THE CASE OF UNREGISTERED AGREEMENT TO SELL BECAUSE RIGHT CREATED BY UNREGISTERED AGREEMENT TO SELL IS NOT ENFORCEABLE. SO FAR THE APPELLANT IS CONCERNED HE CAN CLAIM T HIS RIGHT INTO THE PROPERTIES IN QUESTION ON THE BASIS OF 'SALE DEED' REGISTERED IN HIS FAVOUR AND HE CAN BE HELD RESPONSIBLE TO EXPLAIN THE SOURCE OF SALE CONSIDERATION MENTIONED IN THE SALE DEED. BUT, HE CANNOT BE CALLED UPON TO EXPLAIN QUA THE TRANSACTI ON EFFECTED BETWEEN THIRD PARTY/S. IN THE INSTANT CASE THE A.O HAS FASTENED THE LIABILITIES OF THE THIRD PARTY/S TO ASSESSEE. INTERESTINGLY, THE A.O. FAILED TO APPRECIATE THAT THE LAND IN QUESTION WAS NOT TRANSFERRED BY THE POWER OF ATTORNEY HOLDER IN FAV OUR OF ASSESSEE, AGAINST THE ASSESSEE. FURTHER, IT IS SUBMITTED THAT THE A.O. HAS NOT BROUGHT ON RECORD ANY EVIDENCE IN SUPPORT OF HIS CONJECTURE THAT T HE APPELLANT PAID ANY MONEY IN EXCESS OF THE SALE CONSIDERATION RECORDED IN THE SALE DEED. MERELY, ON T HE BASIS OF SURMISES NO ADDITION CAN BE MADE AND IF SO MADE CANNOT BE SUSTAINED. UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE ASSESSMENT ORDER IS WHOLLY ILLEGAL, UNJUSTIFIED AND ADDITION MADE ARE ARBITRARY. IT IS RESPECTFULLY SUBMITTED THAT A DUTY IS CAST UPON THE STATUTORY AUTHORITY TO ACT WITHIN THE PROVISION OF THE ACT, ANY POWER EXERCISED IN CONTRAVENTION OF THE PROVISION OF ACT, FOR EXTRANEOUS REASONS, WOULD BE ILLEGAL AND VOID - AB - INITIO. TH US THERE ARE TOO MANY MISSING LINKS & CONTRA DICTIONS IN THE STAND TAKEN BY THE A.O. TO TAX THE INCOME ON SUBSTANTIVE BASIS IN THE HANDS OF THE APPELLANT BY MAKING THE PROTECTIVE ADDITIONS IN ALTOGETHER DIFFERENT ASSESSMENT YEARS THAN THAT OF THE APPELLANT FOR THE SALE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 20 CONSIDERATION PAID ON THE BASIS OF BANACHITHI DATED 18 - 01 - 2005. IT IS THEREFORE, REQUESTED THE ASSESSMENT ORDER BE QUASHED/CANCELLED. SUBMISSIONS REGARDING POWER OF ATTORNEY. THE A.O. FAILED TO APPRECIATE THAT NO SUCH PERSON WOULD HAND OVER SUCH HUGE AMOUNT AND KEEP ON WAITING FOR A BE TTER TITLE. THE A.O. ALSO FAILED TO APPRECIATE THE FACT THE SALE DEED EXECUTED IN FAVOUR OF THE APPELLANT, CONTAINED A CLAUSE THAT READS AS UNDER : - (KINDLY REFER TO P.B. PAGE NOS. 169 & 170 OF PAPER BOOK NO. IV) 'AS THE LAND SPECIFIED IN THE SCHEDULE IS SOLD TO YOU THEREFORE ON THE BASIS OF THIS SALE DEED YOU ARE - PARTY OF SECOND PART ENTITLED AND RIGHTFUL TO GET THE LAND TRANSFERRED IN YOUR NAME IN THE GOVERNMENT OR SEMI - GOVERNMENT RECORD AND FOR THAT IF NECESSARY AS A SELLER MY SIGNATURES, ANSWERS, CON FIRMATIONS, APPLICATIONS ETC ARE REQUIRED CONFIRMATIONS, APPLICATIONS ETC AND MYSELF AS A SELLER BEING PARTY OF THE FIRST PART IS BOUND TO DO SO' AS PER THIS CLAUSE, THE SELLER OF LAND WAS BOUND TO SIGN SUCH PAPERS ETC, WHICH WAS REQUIRED FOR MUTATION IN REVENUE RECORDS. THEREFORE, THE POWER OF ATTORNEY EXECUTED IN FAVOUR OF VIVEK P. PATEL WAS THE ACT OF SELLER AND NOT OF THE APPELLANT. THE POWER OF ATTORNEY IS CREATION OF AN AGENCY WHEREBY THE GRANTOR AUTHORIZES THE GRANTEE TO THE SPECIFIED THEREIN, ON BE HALF OF GRANTOR, WHICH WHEN EXECUTED WILL BE BINDING ON THE GRANTOR AS IF DONE BY HIM (SEE SECTION 1A & SECTION 2 OF THE POWERS OF ATTORNEY'S ACT, 1882). NONE THE LESS A POWER OF ATTORNEY IS NOT AN INSTRUMENT OF TRANSFER IN REGARD TO ANY RIGHT, TITLE OR IN TEREST IN AN IMMOVABLE PROPERTY. THE SAID FACT IS ALSO EVIDENT FROM THE ALLEGED POWER OF ATTORNEY WHEREIN IN UNNUMBERED PARAGRAPH 2 AT PAGE. 3 IT HAS BEEN RECORDED THAT THE SELLER HAS TO GET THE BUYERS NAME ENTERED IN ALL GOVERNMENT AND SEMI - GOVERNMENT REC ORDS. AND FOR THIS LAND WHATEVER PAPER WORK, ACTS, PROCEDURE IS TO BE DONE AND FOR THAT 'I (VISHNUBHAI) HAVE FOR AND ON MV BEHALF GIVEN POWERS TO SHRI VIVEKBHAI PRAHLADBHAI PATEL, THEREFORE HE IS EMPOWERED TO DO THE FOLLOWING ACTS AS MV POWER OF ATTORNEY H OLDER' (KINDLY REFER TO P.B.PAGE NO 106 OF PAPER BOOK - L). IT IS NOT THE CASE OFA.O. THAT SHRI VIVEK P. PATEL NEGOTIATED ON BEHALF OF THE APPELLANT OR HE WAS BENAMIDAR OF APPELLANT. NEITHER IN THE STATEMENT RECORDED THE SELLER OF LAND HAS STATED THAT SHRI V IVEK P. PATEL ACTED ON HIS BEHALF IN PURSUANCE OF THIS POWER OF ATTORNEY NOR THERE IS ANY EVIDENCE ON RECORD THAT IT HAS BEEN USED TO GET THE LAND TRANSFERRED IN MY NAME IN ANY OF THE GOVERNMENT RECORD. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE THE A .O. IS NOT JUSTIFIED IN MAKING ADDITION IN APPELLANT'S CASE. THEREFORE, SAME DESERVES TO BE DELETED. IT IS SUBMITTED THAT ADDITION DESERVES TO BE DELETED ON BOTH LEGAL AND FACTUAL GROUNDS. IT IS SUBMITTED THAT A.O. HAS WRONGLY APPLIED SECTION 69 WHILE FRAM ING THE ASSESSMENT ORDER AND IN THE REASONS REGARDING FOR ISSUANCE OF NOTICE U/S. 148 THE A. O. TALKS OF SECTION 696 BUT MAKES ADDITION U/S. 69. THERE IS NO UNIFORMITY IN THE STAND OF A.O., AND AS SUCH IS SELF CONTRADICTORY. THE A.O. HAS FAILED TO PROVE NEXUS BETWEEN THE INVESTMENTS MADE BY SHRI VIVEK P. PATEL AND THE APPELLANT. HENCE, THE ADDITION DESERVES TO BE DELETED. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 21 G) ADDITION MADE ON THE BASIS OF AGREEMENT OF SALE, WHICH HAD NO CONNECTION WITH THE ASSESSEE AS IT WAS ENTERED INTO BETWEEN THIRD PARTIES, BUT WITHOUT ANY EVIDENCE OR MATERIAL ON RECORD AGAINST THE ASSESSEE.' 16. APPELLANT PLACED RELIANCE ON VARIOUS DECISIONS SOME OF WHICH ARE AS FOLLOWS: I) USHAKANT N PATEL V/S. CIT, 282 ITR 553(GUJ) II) CIT V/S ANIL BHALLA, 322ITR 191(DEL) III) C IT V/S. VED PRAKASH CHOUDHARY, 305 ITR 245(DEL) IV) CIT V/S. P.V. KALYASUNDARAM, 294 ITR 49(SC) V) SHETH AKSHAY PUSHAVADAN V/S. DCIT, 130 TTJ 42, ITAT, AHMEDABAD. VI) JAWAHARBHAI ATMARAM HATHIWALA V/S ITO, 128 TTJ 36, ITAT, AHMEDABAD. VII) BHARAT A MEHTA V/S. ITO, 86 TTJ 369, ITAT, AHMEDABAD. VIII) DCIT V/S. PRARTHANA CONSTRUCTION PVT. LTD., (GUJ). IX) SUNITA DHADDA V/S. DCIT ITAT, 'A' BENCH, JAIPUR. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER: 19. WHEN THE PRESENT CASE IS EXAMINED IN VIEW OF THIS LEGAL AND FACTUAL POSITION, IT IS FOUND THAT (I) APPELLANT IS NOT A PARTY TO BANAKHAT DTD. 18/1/2005. (II) THERE IS NO MATERIAL ON RECORD TO HOLD THAT SHRI VIVEK PRAHLADBHAI PATEL ACTED AS BENAMIDAR OF APPELLANT. (III) THE SEIZED MA TERIAL (BANACHITTI DTD. 18/1/2005) WAS NOT FOUND FROM THE PREMISES OF APPELLANT AND THERE IS NO CORROBORATIVE MATERIAL TO SUGGEST THAT APPELLANT ACTUALLY PAID CASH. (IV) POWER OF ATTORNEY WAS GIVEN BY SHRI VISHNU PRAJAPATI IN FAVOUR OF SHRI VIVEK PATEL. THUS SHRI VIVEK PATEL WAS ACTING AS AGENT OF SHRI VISHNUBHAI PRAJAPATI AND NOT AS AGENT OF APPELLANT. (V) NOWHERE IN HIS STATEMENT SHRI SOMABHAI PRAJAPATI STATED THAT ANY PAYMENT IN CASH WAS RECEIVED BY HIM FROM THE APPELLANT. IN FACT HE CATEGORICALLY STATED THAT MONEY WAS RECEIVED FROM SHRI VIVEK PATEL ONLY. (VI) NO AGREEMENT BETWEEN VIVEK PATEL AND APPELLANT HAS BEEN BROUGHT ON RECORD. IT WAS CLAIMED BY THE SELLER OF LAND IN HIS STATEMENT THAT HE TRANSFERRED PLOTS OF LAND IN /AVOW OF APPELLANT ON I NSTRUCTIONS OF SHRI VIVEK PATEL. HOWEVER, FROM THE CROSS EXAMINATION AND RE - EXAMINATION AS MENTIONED ABOVE, THIS IS NOT PROVED. (VII) FOR MAKING ADDITION U/S. 69 OR 69B, IT IS NECESSARY TO SHOW THAT INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR IMMEDIA TELY PRECEDING THE RELEVANT ASSESSMENT YEAR AND THE SAME WERE NOT RECORDED IN THE BOOKS. IN THIS CASE, THERE IS NO - SUCH MATERIAL ON RECORD ON THE BASIS OF WHICH IT CAN BE CONCLUDED THAT APPELLANT MADE ANY SUCH INVESTMENT IN THE RELEVANT FINANCIAL YEARS. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 22 (VIII) AS MENTIONED EARLIER, PROTECTIVE ADDITION WAS MADE IN THE CASE OF SHRI VIVEK PRAHLADBHAI PATEL FOR A.Y. 2005 - 06, 2006 - 07 AND 2007 - 08. THE ADDITION FOR ALL THREE YEARS HAVE BEEN ALSO CONFIRMED BY THE UNDERSIGNED VIDE ORDER DATED 28/12/2012 IN APPEAL NO. CIT(A) - III/235,237&236/AC - CC2(2)/L 1/12. 20. I, THEREFORE, HOLD THAT AO IS NOT JUSTIFIED TO MAKE IN THE CASE OF APPELLANT TOWARDS PURCHASE OF THESE PLOTS OF LAND. THE ADDITIONS OF RS.6,52,10,209/ - FOR A.Y. 2006 - 07 AND RS.1,91,00,780/ - FOR A.Y. 2008 - 09 ARE DIRECTED TO BE DELETED. GROUND NO.3, 4 & 5 OF THE APPEAL ARE ALLOWED FOR BOTH THE YEARS. 6. THE DR HA S FILED WRITTEN SUBMISSIONS WHICH ARE TO QUOTE AS UNDER : - A. THE ASSESSEE IS NOT A PARTY TO THE AGREEMENT DATED 18 - 1 - 2005 BETWEEN SOMABHAI PRAJAPATI AND VIVEK PRAHLADBHAI PATEL, CONCERNING THE LAND PURCHASED BY HIM. B. THE AGREEMENT WAS ALSO NOT FOUND FROM HIS PREMISES AND NO CORROBORATIVE MATERIAL IS AVAILABLE TO SUGGEST THAT ASSESSEE PAID CASH OVER AND ABOVE DOCUMENTED CONSIDERATION. C. THE POWER OF ATT ORNEY DT 18 - 6 - 2009 WAS GIVEN BY VISHNU PRAJAPATI IN FAVOUR OF VIVEK PATEL AND SO HE WAS ACTING AS AN AGENT OF THE PRAJAPATIS AND NOT AS AN AGENT OF AJAY PATEL [THE ASSESSEE]. D. SOMABHAI PRAJAPATI HAS ALWAYS STATED THAT HIS DEALINGS WER WITH VIVEK PATEL IN ALL MATTERS. E. NO AGREEMENT BETWEEN VIVEK PATEL AND ASSEESEE [SHRI AJAY S PATEL] HAS BEEN BROUGHT ON RECORD. IT IS CLAIMED BY SELLER SOMABHAI PRAJAPATI THAT THEY TRANSFERRED PLOTS OF LAND TO ASSESSEE ON INSTRUCTIONS OF VIVEK PATEL. HOWEVER, THIS IS NOT PROV ED IN THE CROSS EXAMINATION AND REEXAMINATION. AS AGAINST THIS, THE EVIDENCE AGAINST THE ASSESSEE, TO THE EFFECT THAT HE PURCHASED THE LAND IN QUESTION AS A NOMINEE OF VIVEK PATEL IS QUITE STRONG AND AS BELOW: - 1. THE FACT OF VIVEK PATEL HAVING AN AGREE MENT WITH PRAJAPATIS TO TRANSACT IN THE RELEVANT LAND HAS BEEN PROVED AND UPHELD IN FIRST APPEAL. 2. THE FURTHER CONTENTION THAT VIVEK PATEL WITHDREW FROM THE AGREEMENT AND DID NOT DEAL IN ANY OF THE SAID LAND HAS BEEN PROVED TO BE UNTRUE ON ACCOUNT OF SEVER AL EVIDENCES AGAINST HIM. A BRIEF NOTE OF SUCH EVIDENCES SUBMITTED IN THE FORM OF PLEADING BEFORE THE ITAT ON 25 - 9 - 2014 IN THE COURSE OF APPEAL IN THE CASE OF VIVEK PATEL IS SUBMITTED HEREWITH. 3. THE SUBMISSIONS WOULD PROVE THAT SHRI VIVEK PATEL ACTED AS PE R THE AGREEMENT DATED 18 - 1 - 2005, PAID FURTHER AMOUNTS DUE AND THEREFORE, ACQUIRED THE RIGHT TO DEAL WITH THE LAND. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 23 4. PARTICULARLY, THE POA DT 18 - 6 - 2009 [CIT{A}S PAGE 17] SPECIFICALLY PROVES THAT HE HAD BEEN GIVEN THE AUTHORITY TO DEAL WITH ONE SUCH LAND BL OCK NO. 513. THIS WAS TOWARDS THE END OF THE LAND TRANSACTIONS. THOUGH OTHER SUCH POA WERE NOT FOUND, IT ONLY MEANS THAT THE EARLIER ONES WERE NO LONGER NECESSARY AS THOSE TRANSACTIONS HAD ALREADY BEEN COMPLETED WHERE THE PRESENT ONE WAS STILL IN EXISTENCE AS IT RELATED TO THE LATEST TRANSACTION AND THE SEARCH U/S. 132 ON 8 - 12 - 2009 ITSELF WAS CARRIED OUT SHORTLY AFTER THE POA WAS MADE [COPY OF THE POA ENCLOSED]. 5. THIS SHOWS THAT VIVEK PATEL WAS TRANSACTING IN THE LAND BELONGING TO THE PRAJAPATIS AS PER AGR EEMENT DT 18 - 1 - 2005, SOLD TO AJAY PATEL AS A NOMINEE OF VIVEK PATEL, HAS TO BE TREATED AS HAVING BEEN SOLD AT THE PRICE AT WHICH VIVEK PATEL PURCHASED IT FROM THE PRAJAPATIS. 6. IT MAY ALSO BE NOTED THAT WHILE VIVEK PATEL ENTERED INTO THE AGREEMENT WITH THE PRAJAPATIS ON 18 - 1 - 2005, HE STARTED SELLING THE RELEVANT LAND TO THE ASSESSEE AJAY PATEL FROM 25 - 7 - 2005 ONWARDS. 7. IT IS INCONCEIVABLE THAT VIVEK PATEL WILL SELL THE LAND AT A LOWER RATE THAN THE PRICE AT WHICH HE BOUGHT IT. IN ANY CASE, NO FALL IN PRICES HAS BEEN PROVED. 8. THE SELLER OF THE LAND THE PRAJAPATIS HAS OFFERED CAPITAL GAINS ON THE ENHANCED VALUE OF THE LAND AND NOT ON THE DOCUMENTED CONSIDERATION. 9. IT IS CLEAR THAT VIVEK PATEL IS MAKING FALSE STATEMENT WHEN HE SAYS IN HIS C.E. BY AJAY PATEL ON 14 - 8 - 2012 [CIT[A]S PAGE 35, Q. 11 AJAY S PATEL] AND REEXAMINATION ON 4 - 9 - 2012 PAGE 38 CITA[A]S Q. 10, THAT HE HAS BEEN KNOWING AJAY PATEL ONLY AFTER THE SEARCH OF SOMABHAI PRAJAPATI. THE POA REVEALS THAT VIVEK PATEL KNEW AJAY PATEL AT LEAST SIX MONTHS BEFORE THE SEARCH IN THE COURSE OF HIS DEALINGS RELATING TO BLOCK NO. 513. IT SHOULD THEREFORE BE CONCLUDED THAT ALL STATEMENTS MADE BY VIVEK PATEL NOT SUPPORTED BY DOCUMENTARY EVIDENCES, SHOULD BE DISBELIEVED. 10. THE ASSESSMENT ORDER IN THIS CASE THOUGH MEN TIONED AS PROTECTIVE, IS A SUBSTANTIAL ADDITION. SO ALSO THE ASSESSMENT IN THE CONNECTED CASE OF AJAY P PATEL. THE SAME AMOUNTS AND TRANSACTIONS ARE NOT TAXED THOUGH IT ALL REVOLVE AROUND LAND DEALINGS. HENCE, BOTH THE PARTIES NEEDS TO BE TAXED BASED ON TH E PRECISE FACTS STARTED BY THE AOS. SINCE THE FACTS HAVE BEEN BROUGHT OUT BY THE AO, PROTECTION U/S. 292B IS INVOKED. 11. IN THE ADDITIONAL EVIDENCE GIVEN BY AJAY S PATELS CASE, IT HAS BEEN HIGHLIGHTED THAT THE SALE AGREEMENT WITH DHIRUBHAI AMIN CLEARLY STA TES THAT NO BANAKHAT EXISTED. HERE IT MAY BE NOTED THAT THE SAME WAS ON 13 - 5 - 2010 MUCH AFTER THE SEARCH ON 8 - ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 24 12 - 2009 AND HENCE, THE DOCUMENT WAS TAILORED, AT THE INSTANCE OF VIVEK PATEL TO SUBSTANTIATE HIS CLAIM THAT THE BANAKHAT HAD BEEN RESCINDED. THIS W ILL FURTHER BE PROVED IF THE OTHER 8 DOCUMENTS ENTERED INTO BEFORE THE SEARCH ACTION ARE FILED AND SUBJECT TO FURTHER INQUIRIES, SINCE NEW EVIDENCE HAS BEEN FILED. IT IS REQUESTED THAT FURTHER INQUIRIES MAY BE ORDERED, AS ABOVE BEFORE TAKING THE EVIDENCE O N RECORD. IN VIEW OF THE ABOVE, IT CAN BE SEEN THAT SHRI AJAY S PATEL PURCHASED THE LAND AS A NOMINEE OF VIVEK PATEL AS AFFIRMED BY THE SELLER SOMABHAI PRAJAPATI. THE SALE WHICH TOOK PLACE SHORTLY AFTER THE AGREEMENT BETWEEN VIVEK PATEL AND PRAJAPATI S WAS AT THE PRICE AGREED UPON BETWEEN THESE PERSONS OR AT A HIGHER PRICE, SINCE THE COST OF LAND APPRECIATES AS IS COMMONLY KNOWN. SINCE NO EVIDENCE HAS BEEN LET IN ABOUT ANY MARKET DOWN TURN IN LAND AND EVEN FOR THE FEW PROPERTIES WERE THERE WAS LEGAL DI SPUTE, SUBSTITUTION HAD BEEN MADE BY THE PRAJAPATIS THE ASSESSMENT OF THE EXTRA CONSIDERATION OVER AND ABOVE THE ACCOUNTED VALUE WORKED OUT ON THE BASIS OF THE AGREEMENT DT 18 - 1 - 2005 MAY BE RESTORED AND THE CIT[A]S ORDER MODIFIED. DETAILED SUBMISSION S ON FACTS ARE AS PER ORAL SUBMISSIONS. THE LEGAL ISSUES AS PER ORAL SUBMISSIONS MAY ALSO BE CONSIDERED. ENCL: - I) SUMMARY OF SUBMISSIONS IN THE CASE OF SHRI VIVEK PATEL II) COPY OF THE POA DT 18 - 6 - 2009. [T.P. KRISHNA KUMAR] COMMISSIONER OF INCOME TAX, C BENCH, ITAT - III AHMEDABAD. DATE: - 15 - 10 - 2014. PLACE: - AHMEDABAD. 7. THE ASSESSEE HAS ALSO FILED WRITTEN SUBMISSIONS WH I CH ARE TO QUOTE AS UNDER: - BEFORE THE INCOMETAX APPELLATE TRIBUNAL C BENCH AHMEDBAD. IN THE MATTER OF DY. COMMISSIONER OF IN COME TAX CENTRAL CIRCLE 2(2) AHMEDABAD ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 25 V. AJAY SURENDRA PATEL ( PAN: AETPP8820Q) A.Y. 2006 - 2007 ITA NO 2367/A/2013 A.Y. 2008 - 2009ITA NO 2368/A/2013 A.Y. 2010 - 2011 ITA NO 2587/A/2013 & CROSS OBJECTION NO 39/AHD/2014 A.Y. 2006 - 07 CROSS OBJECTION NO 40/AH D/2014 A.Y. 2008 - 09 CROSS OBJECTION NO 41/AHD/2014 A.Y. 2010 - 11 SYNOPSIS & SUMMARY OF ARGUMENTS A REVENUES CASE, RESPONDENT ASSESSEES BRIEF CONTENTION ON IT AND ON ADDITIONAL GROUND NO. 1 & 2 THE CONTROVERSY REVOLVES ROUND A XEROX COPY OF AN U NREGISTERED BANACHITTHI FOUND AND SEIZED FROM THE PREMISES OF SHRI SOMABHAI PRAJAPATI AT KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, S.B.TRUST WADI, NAVA VADAJ, AHMEDABAD. AS PER THE BANACHITTHI CERTAIN PLOTS OF LAND AS ENUMERATED IN THE ASSESSMENT ORDER WERE AGREED TO BE SOLD BY SHRI SOMABHAI PRAJAPATI TO ONE SHRI VIVEK P PATEL. IT IS OBSERVED BY THE A.O. THAT THE DOCUMENT IS ACKNOWLEDGED BY SHRI VIVEK PATEL TO HAVE BEEN SIGNED. IT IS FURTHER OBSERVED THAT OUT OF THE NINE PLOTS OF LAND AS MENTIONED IN BANACHI TTHI ALL OF THEM WERE NOT TRANSFERRED SINCE FIVE OF THE PLOTS COULD NOT BE TRANSFERRED DUE TO PENDENCY OF DISPUTES IN CIVIL COURT. IT IS FURTHER OBSERVED THAT IN PLACE OF PLOTS AGREED TO BE TRANSFERRED WHEREIN THE DISPUTES WERE PENDING; THE OTHER FOUR PL OTS IN THE NEARBY VICINITY WERE TRANSFERRED AS INSTRUCTED BY SHRI VIVEK PATEL. IT IS OBSERVED BY THE A.O. THAT THE SALE CONSIDERATION OF THE PLOTS HAD BEEN RECEIVED AS PER THE TERMS OF BANACHITTHI AND HE WAS (SELLER) UNDER THE OBLIGATION TO TRANSFER THE LAND TO VIVEK PATEL. IT IS OBSERVED BY THE A.O .THAT PLOT BEARING BLOCK NO. 512A, 512B, 510, & 513 WERE FINALLY TRANSFERRED BY SHRI SOMABHAI PRAJAPATI IN FAVOUR OF THE ASSESSEE. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 26 NOW QUESTION ARISES WHETHER THESE PLOTS SO TRANSFERRED IN FAVOUR OF THE AS SESSEE WERE HAVING ANY LINK WITH THE TERMS OF BANACHITTHI, AND HAVE BEEN EXECUTED ON INSTRUCTION OF VIVEK PATEL? IT IS PERTINENT TO NOTE THAT REGISTERED SALE DEED EXECUTED IN FAVOUR OF ASSESSEE DOES NOT SPEAK OF ANYTHING ABOUT THE TERMS OF BANACHITTHI AND OR ANY SUCH BANACHITTHI HAVING BEEN EXECUTED IN RESPECT OF LAND IN QUESTION. ANY PRUDENT SELLER WOULD CERTAINLY INSERT THE TERMS EARLIER ENTERED INTO WITH REGARD TO THE LAND BEING TRANSFERRED. IT CAN BE NOTICED FROM ONE OF THE SPECIFIC TERMS OF REGISTERED SALE DEED EXECUTED IN FAVOUR OF THE ASSESSEE CATEGORICALLY AND EXPLICITLY STATES THAT WE SELLERS ADDITIONALLY UNDERTAKE AND ASSURE TO THE PURCHASER THAT THE SELLERS AND THEIR SUCCESSORS, ASSIGNER AND ADMINISTRATOR HAVE NOT GIVEN (ASSIGNED) OUR RIGHTS, SH ARES, INTEREST IN RELATION TO THE LAND DESCRIBED IN THE SCHEDULE OR ANY OF ITS PART TO ANY OTHER PERSON IN ANY SUCH WAY. A BARE READING OF THIS TERM WOULD INDICATE THAT THE SELLER HAD MADE IT CLEAR THAT THEY HAVE NOT ASSIGNED THEIR RIGHTS, SHARE, INTERES T IN RELATION TO THE LAND IN QUESTION OR ANY OF ITS PART TO ANY OTHER PERSON IN ANY SUCH WAY THAT MEANS NO THIRD PARTY RIGHTS OR INTEREST WHATSOEVER WAS RELATED BY THE SELLER UNTO THE LAND IN QUESTION. IT IS ALSO NOTEWORTHY THAT THE TERMS OF BANACHITTHI D OES NOT SPEAK THAT LAND WILL BE TRANSFERRED EITHER IN FAVOUR OF SHRI VIVEK PATEL OR THE PERSONS SPECIFIED BY HIM. (BUT UPON FULFILLMENT OF ALL THE AGREED CONDITIONS AS LAID DOWN IN THE BANACHITTHI, THE PLOTS OF LAND WOULD BE SOLD TO SHRI VIVEK P PATEL). T HE TERM THAT LAND WOULD BE TRANSFERRED IN FAVOUR OF PERSON SPECIFIED BY SHRI VIVEK PATEL DOES NOT FIND ANY MENTION IN BANACHITTHI. IT IS THE TERM IMPORTED FROM OUTSIDE THE BANACHITTHI, PURELY ON THE BASIS OF STATEMENT MADE BY SOMABHAI PRAJAPATI. VIRTUALLY, THE BANACHITTHI WAS CANCELLED OWING TO BREACH OF TERMS. THE CASE OF THE A.O. IS THAT THE WRITTEN AGREEMENT (IMPUGNED BANACHITTHI) IS TO BE CANCELLED BY WAY OF A WRITTEN AGREEMENT THAT WOULD WHOLLY APPLY TO THE PROPOSITION THAT IF ANY ADDITION TO THE T ERM OF CONTRACT IS TO BE MADE IT SHOULD ALSO BE IN WRITING. AN AGREEMENT HAS TO BE READ IN ACCORDANCE TO THE TERMS RECORDED INTO THE AGREEMENT. IN THE AGREEMENT THERE IS NOTHING STATED THAT THE LAND IS REQUIRED TO BE TRANSFERRED IN FAVOUR OF THE PERSONS SP ECIFIED BY SHRI VIVEK PATEL. THE ORAL EVIDENCE CANNOT OVERWRITE OR TAKE PRECEDENCE OVER THE WRITTEN DOCUMENT, AS PER THE SETTLED LAW IF THERE IS ANY DOCUMENTARY EVIDENCE THAT SHOULD ALWAYS HAVE PRECEDENCE OVER THE ORAL EVIDENCE. A CONJOINT READING OF BOTH THE BANACHITTHI AND THE SALE DEED WOULD MAKE IT CLEAR THAT THE CASE OF REVENUE IS BASELESS, SINCE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 27 THE ENTIRE ADDITION HAS BEEN MADE ONLY BASED ON INFERENCE DRAWN FROM THE COPY OF BANACHITTHI WHICH WAS CANCELLED BY THE EXECUTORS OF THE SAME. THUS IT IS A CA SE OF NO EVIDENCE. THE A.O. HAS CATEGORICALLY OBSERVED THAT (PARA 4.5 OF ASSESSMENT ORDER) SHRI VIVEK P PATEL HAS ENTERED INTO BANACHITTHI HAVE BEEN SOLD BY SHRI SOMABHAI AND OTHERS MENTIONED ABOVE TO PURCHASE LANDS AT THE RATES MENTIONED THEREIN. TH E LANDS AS RECORDED IN THE BANACHITTHI HAVE BEEN SOLD BY SHRI SOMABHAI AMBALAL PRAJAPATI AND HIS FAMILY MEMBERS. THE LAND HAS BEEN SOLD AS PER THE RATES MENTIONED IN THE BANACHITTHI. THE SALE CONSIDERATION HAS BEEN RECEIVED BY SHRI SOMABHAI AMBALAL PRA JAPATI AND OTHERS THROUGH AN AGENT / EMPLOYEE OF SHRI VIVEK P PATEL. AS PER THIS OBSERVATION THE LANDS AS RECORDED IN BANACHITTHI HAS BEEN SOLD BY SHRI SOMABHAI AMBALAL PRAJAPATI AND HIS FAMILY MEMBERS. UNDISPUTEDLY OUT OF 9 PLOTS THERE IS NO MENTION OF 4 PLOTS TRANSFERRED IN FAVOUR OF THE ASSESSEE, BY WAY OF SALE DEED, IN THE BANACHITTHI. THIS GOES TO SHOW THAT LAND TRANSFERRED IN FAVOUR OF ASSESSEE HAS NOTHING TO DO WITH THE BANACHITTHI OR LAND HAS NOT BEEN TRANSFERRED IN PURSUANCE TO THE TERMS OF BANAC HITTHI. HENCE THE FOUNDATION OF CASE ITSELF IS BASED ON CONTRADICTIONS. THE CONCLUSION DRAWN BY THE A.O. IN PARA 5.3 IS CONTRADICTORY TO HIS OWN FINDINGS. AS PER THE CONCLUSION, AN AGREED AMOUNT OF RS.6,52,10,209/ - (IN F.Y. 2006 - 07), RS. 1,99,70,900/ - (IN F.Y. 2007 - 08) & RS.73,30,069/ - (IN F.Y. 2009 - 10) WAS PAID BY THE ASSESSEE WHEREAS IN PARA 4.5 THE A.O. HAS GIVEN A FINDING THAT THE SALE CONSIDERATION HAS BEEN RECEIVED BY SHRI SOMABHAI AMBALAL PRAJAPATI AND OTHERS THROUGH AN AGENT / EMPLOYEE OF SHRI VIVE K P PATEL. THE ASSESSEE HAS FURNISHED AN AFFIDAVIT DATED 04/07/2012 DULY NOTORISED, IN REBUTTAL, BEFORE THE LD. CIT(A) AND THE FACT THAT LD. CIT(A) HAS GROSSLY FAILED TO TAKE COGNIGENCE OF THIS AFFIDAVIT NOR HE HAS CROSS EXAMINED THE ASSESSEE, HENCE THE AF FIDAVIT PREVAILS. THE ONLY CASE OF A.O. IS THAT SINCE THE ASSESSEE IS HOLDING TITLE UNTO THE LAND THEREFORE HE PRESUMED THAT, THE AMOUNT OF RS.6,52,10,209/ - (IN F.Y. 2006 - 07), RS. 1,99,70,900/ - (IN F.Y. 2007 - 08) & RS.73,30,069/ - (IN F.Y. 2009 - 10) WOULD H AVE BEEN PAID BY THE ASSESSEE, SUCH FINDING IS DEVOID OF ANY MERIT AND NOT SUPPORTED BY ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 28 ANY EVIDENCE. SIGNIFICANTLY, THE THURSTS UPON THE REVENUE TO PROVE ITS STAND IS NOT MET. [REFER QUESTION AND ANSWER NO.23 OF STATEMENT DATED 14/08/2012 OF SHREE SOMABHA I A. PRAJAPATI IN CROSS - EXAMINATION BY SHREE AJAY S. PATEL AND SEE PARAGRAPH NO.18 AT PAGE NO.34 OF APPELLATE ORDER FOR A.Y.2006 - 07 AND 2008 - 09 OF AJAY S. PATEL] THERE IS CATEGORICAL FINDING BY BOTH THE AUTHORITIES BELOW THAT THE BANACHITTHI WAS EXECUTED BETWEEN SOMABHAI PRAJAPATI & VIVEK PATEL. THERE IS CATEGORICAL FINDING BY THE A.O. THAT SOMABHAI PRAJAPATI RECEIVED SALE CONSIDERATION FROM VIVEK PATEL OR THROUGH THE AGENT OF VIVEK PATEL. THERE IS A FINDING THAT LAND WAS TRANSFERRED AS DESCRIBED IN BANA CHITTHI BY A.O. BUT MAJOR PART OF THE LAND DESCRIBED INTO THE SALE DEED DOES NOT FIGURE IN THE BANACHITTHI. THERE IS ALSO NO EVIDENCE SUGGESTING THAT THE SALE CONSIDERATION PAID BY THE APPELLANT UPON EXECUTION OF THE SALE DEED WAS RETURNED TO HIM. THE MA JOR PART OF SALE CONSIDERATION WAS PAID BY THE APPELLANT THROUGH BANKING CHANNEL. NO EVIDENCE HAS BEEN PLACED ON RECORD BY THE A.O. THAT THIS AMOUNT WAS RECEIVED BY THE APPELLANT FROM VIVEK PATEL FOR MAKING PAYMENT TO SOMABHAI PRAJAPATI. CONVERSELY, THERE IS ALSO NO EVIDENCE PLACED ON RECORD SUGGESTING THAT THE ASSESSEE PAID MONEY TO VIVEK PATEL FOR MAKING PAYMENT TO SOMABHAI PRAJAPATI. UNDISPUTEDLY SOMABHAI PRAJAPATI HAS CATEGORICALLY STATED THAT THERE IS NO OTHER PROOF THAN THE AGREEMENT TO SALE TO DEM ONSTRATE THAT THE LAND WAS TRANSFERRED ON THE INSTRUCTION OF VIVEK PATEL. FURTHER IN THE PECULIAR FACTS & CIRCUMSTANCES OF THE APPELLANTS CASE THE AUTHORITIES BELOW FIRSTLY, WRONGLY INVOKED THE PROVISION OF SECTION 69 OF THE ACT AND SECONDLY APPLIED IT W RONGLY. IN THE APPELLANTS CASE AS PER SECTION 69 THE ADDITION CAN BE MADE ONLY IF: (I) FIRSTLY, THE A.O. HAS TO ESTABLISH THAT THE SAID INVESTMENT I.E. THE ALLEGED AMOUNT PAID ON ACCOUNT OF BANACHITTHI DATED 18/1/2005 WAS IN FACT PAID BY THE APPELLANT A SSESSEE HIMSELF AND NOT BY ANY OTHER PERSON. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 29 (II) SECONDLY, SUCH INVESTMENT WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT ASSESSEE AND (III) THIRDLY, SUCH INVESTMENT HAS BEEN MADE IN THE FINANCIAL YEAR/S IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR/S IN QUESTION. AND ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT CASE: - (I) IT IS ESTABLISHED AND PROVED BEYOND DOUBT THAT THE APPELLANT ASSESSEE HAS NOT MADE THE SAID INVESTMENT. THEREFORE, ON THIS COUNT ONLY, NO ADDITIONS U/S.6 9 COULD HAVE BEEN MADE OR SHOULD BE SUSTAINED IN ALL THE THREE YEARS I.E. A.YS. 2006 - 07, 2008 - 09 & 2010 - 11 AS HELD BY LD. CIT(A) AND IT MAY KINDLY BE UPHELD SO. (II) THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THE A.O. HAS WORK ED OUT THE DIFFERENCE FOR MAKING ADDITION ON THE BASIS OF THE BALANCE SHEET PREPARED UPON CLOSING AND ADJUSTING SUCH BOOKS OF ACCOUNTS. THEREFORE, THIS RATIO COULD BECOME APPLICABLE IF THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT AT ALL AND AS SUCH IT BECOMES IMPERATIVE TO ADD IT BACK UNDER SECTION 69 OF THE ACT. IT IS AN UNDISPUTED AND ADMITTED FACT THAT THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT. THEREFORE, ON THIS COUNT ONLY NO ADDITIONS U/S.69 COULD HAVE BEEN MADE OR SHOUL D BE SUSTAINED IN ALL THE THREE A.YS. I.E. 2006 - 07, 2008 - 09 & 2010 - 11 AS HELD BY LD. CIT(A) AND IT MAY KINDLY BE UPHELD SO. (III) THE A.O. HAS TO ESTABLISH THAT SUCH INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR 2005 - 06, 2007 - 08 & 2009 - 10 RELEVANT TO ASSESSMENT YEARS 2006 - 07, 2008 - 09 & 2010 - 11 RESPECTIVELY FOR MAKING ADDITION U/S.69 OF THE ACT BUT THE FACTS AND MATERIAL AVAILABLE ON RECORD IN THE FORM OF THE IMPUGNED BANACHITTHI DATED 18 - 01 - 2005 AND THE STATEMENTS OF CONNECTED PERSONS AS RELIED BY A.O. TO MAKE THE ADDITIONS IN THE RESPECTIVE A.YS. GOES TO PROVE THAT IT WAS INVESTED (PAID) IN F.YS.2004 - 05, 2005 - 06 & 2006 - 07 RELEVANT TO A.YS. 2005 - 06, 2006 - 07 & 2007 - 08. THEREFORE, IT MAY KINDLY BE HELD THAT THE ADDITIONS MADE U/S. 69 OF THE ACT IN A.YS. 2008 - 09 & 2010 - 11 ARE RIGHTLY DELETED BY THE LD. CIT(A) AND IT MAY KINDLY BE UPHELD SO. 2. GROUND NO.1 OF CROSS OBJECTION: - THE LD.CIT(A) HAS ERRED IN HOLDING THAT ISSUANCE OF NOTICE U/S.148 WAS PERFECTLY JUSTIFIED AND THEREBY CONFORMING THE AC TION OF THE A.O. IN AS MUCH AS THAT THERE WAS NO RELEVANT MATERIAL AVAILABLE ON RECORD ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF AND THEREFORE IN THE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 30 ABSENCE OF ANY SUCH MATERIAL NO BELIEF COULD HAVE BEEN FORMED AS THERE IS NO CAUSE OR JUSTIFICATION TO SUPPORT THE REASON. 3. GROUND NO.2 OF CROSS OBJECTION: - IN VIEW OF THE BINDING RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN USHAKANT N PATEL V CIT, 282 ITR 553 (GUJ) THAT: - FIRSTLY IT WAS INCUMBENT UPON THE A .O. TO ESTABLISH THAT SAID INVESTMENT I.E. THE ALLEGED AMOUNT PAID ON ACCOUNT OF IMPUGNED BANACHITTHI DATED 18 - 01 - 2005 WAS INFACT PAID BY THE APPELLANT ASSESSEE HIMSELF AND NO OTHER ASSESSEE OR PERSON SECONDLY SUCH INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE APPELLANT ASSESSEE AND THIRDLY THOSE SUCH INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR/S IMMEDIATELY PRECEDING THE ASSESSMENT YEAR/S IN QUESTION. AND ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT CASE: - (I ) IT IS ESTABLISHED AND PROVED BEYOND DOUBT THAT THE APPELLANT ASSESSEE HAS NOT MADE THE SAID INVESTMENT. (II) THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THE A.O. HAS WORKED OUT THE DIFFERENCE FOR MAKING ADDITION ON THE BASIS OF T HE BALANCE SHEET PREPARED UPON CLOSING AND ADJUSTING SUCH BOOKS OF ACCOUNTS. HOWEVER FOR THE SAKE OF CLARITY IT IS RESPECTFULLY SUBMITTED THAT THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND THE A.O. HAS WORKED OUT THE DIFFERENCE FOR MAK ING ADDITIONS ON THE BASIS OF BALANCE SHEET PREPARED UPON CLOSING AND ADJUSTING SUCH BOOKS OF ACCOUNT. THEREFORE, THIS RATIO COULD BECOME APPLICABLE IF THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT AT ALL AND AS SUCH IT BECOMES IMPERATIVE TO ADD IT BACK UNDER SECTION 69 OF THE ACT. IT IS AN UNDISPUTED AND ADMITTED FACT THAT THE APPELLANT ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNT. THEREFORE, ON THIS COUNT ONLY NO ADDITIONS U/S.69 COULD HAVE BEEN MADE OR SHOULD BE SUSTAINED IN ALL THE THREE A.YS. I. E. 2006 - 07, 2008 - 09. (III) THE A.O. HAS TO ESTABLISH THAT AS PER THE ABOVE STATED THIRD RATIO THE A.O. HAS TO ESTABLISH THAT SUCH INVESTMENTS HAVE BEEN MADE IN THE FINANCIAL YEAR 2005 - 06, 2007 - 08 & 2009 - 10 RELEVANT TO ASSESSMENT YEARS 2006 - 07, 2008 - 09 & 2 010 - 11 RESPECTIVELY FOR MAKING ADDITION U/S.69 OF THE ACT BUT THE FACTS AND MATERIAL AVAILABLE ON RECORD IN THE FORM OF THE IMPUGNED BANACHITTHI DATED 18 - 01 - 2005 AND THE STATEMENTS OF CONNECTED PERSONS AS RELIED BY A.O. TO MAKE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 31 THE ADDITIONS IN THE RESPECT IVE A.YS. WENT TO PROVE THAT IT WAS INVESTED (PAID) [EVEN IF BY THE THIRD PARTY] IN F.YS.2004 - 05, 2005 - 06 & 2006 - 07 RELEVANT TO A.YS. 2005 - 06, 2006 - 07 & 2007 - 08. THEREFORE, IT MAY KINDLY BE HELD THAT THE ADDITIONS MADE U/S. 69 OF THE ACT IN A.YS. 2008 - 09 & 2010 - 11 ARE LIABLE TO BE DELETED AND IT MAY BE HELD SO. B ON BANACHITTI 1. WHETHER THERE HAS BEEN NOVATION, RESCISSION OR SUBSTITUTION OF THE CONTRACT. 2. THE APPELLANT DISPUTES THE SEIZED PHOTOSTATE COPY OF AN UNREGISTERED BANACHITTI DATED 18 - 01 - 2005 (KINDLY REFER TO P.B. PAGE NO 1 TO 10) ON THE GROUND OF NON - FULFILLMENT OF SUBSTANTIVE CONDITIONS AS STIPULATED AND ENUMERATED IN THE SAID BANACHITTI, WHICH ARE TABULATED BELOW: - (KINDLY REFER TO P.B. PAGE NO.45) KINDLY REFER TO ENCLOSED APPENDIX - I 3. FURTHER TO IT ON A BARE READING OF THE FURTHER SPECIFIC SUBSTANTIVE CONDITION AS LAID DOWN BELOW TERMS AND CONDITION NO.7 REVEALS THAT: (I) THE LAND IN QUESTION HAS BEEN AGREED TO BE SOLD BY THE VENDOR TO THE BUYER IN TERMS OF ABOVE MENT IONED 7 CONDITIONS. (II) THE CONDITIONS THEREOF WERE AGREEABLE TO BOTH THE PARTIES. (III) THE SAME WILL(SHALL) BE ACCEPTABLE AND BINDING TO THE SELLER AND THEIR DECEDENTS, LEGAL HEIR & HERITANCE. THEREFORE, THE BUYER WAS REQUIRED TO PERFORM ON CONDITION NO.1 & 2 ONLY AFTER FULFILLMENT OF CONDITIONS NO.3 TO 7 BY THE SELLER ALONE AND NOT OTHERWISE. THE ABOVE REFERRED CLAUSE THEREFORE CLEARLY SPEAKS THAT: (I) THE LAND IN QUESTION HAS BEEN SOLD BY THE VENDOR TO THE BUYER IN TERMS OF ABOVE MENTIONED SUBSTA NTIVE CONDITIONS ONLY. (II) SINCE THE SELLER WAS UNDER HEAVY OBLIGATION TO PERFORM AND SUBJECT TO FULFILLMENT OF SUBSTANTIVE CONDITION NO.3 TO 7 ABOVE BY THE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 32 SELLER THAN ALL THE 7 CONDITIONS ARE AGREEABLE TO BOTH I.E. SELLER & BUYER. (III) AS PER TH E LAST SENTENCE OF THIS CLAUSE ONLY THE SELLER IS BOUND UNILATERALLY AND THE BUYER CANNOT BE FORCED TO BE BOUND OR TREATED AS BOUND ON ACCOUNT OF THIS BANACHITTI PARTICULARLY IN VIEW OF THE SPECIFIC CLAUSE ABOVE AND ALSO DUE TO NON - INCLUSION OF SUCH SPEC IFIC CONDITION TO THIS PARTICULAR EFFECT. IN OTHER WORDS IT IS A SPECIFIC CONTRACT FOR SPECIFIC PERFORMANCE THAT TOO BY THE SELLER AT THE FIRST INSTANCE AND UPON BEING PERFORMED SO BY THE SELLER, THE BUYER IS REQUIRED TO PERFORM ACCORDINGLY. IT IS PERTINE NT TO MENTION HERE THAT FOR NON - PERFORMANCE ON THE PART OF SELLER OF ANY OF THE CONDITIONS AS MENTIONED IN SR. NO.3 TO 7, THE BUYER IS NOT BOUND TO HONOUR AND PERFORM THE CONTRACT. AFTER LAYING DOWN THE ABOVE TERMS, AN AMOUNT OF RS.11 LACS WAS STATED TO HA VE BEEN PAID WHICH IS THE EARNEST MONEY AND REQUIRED TO BE ADJUSTED IN THE FINAL PAYMENT TO BE MADE. BUT SHREE VIVEK PATEL STATED THAT THOUGH HE HANDED OVER A CHEQUE OF RS.11 LACS IT WAS NOT ALLOWED TO BE ENCASHED BECAUSE THERE WERE OTHER LAND OWNERS WHO H AVE NOT SIGNED THE AGREEMENT THEREFORE THERE WAS A FRAUD. (REFER PARAGRAPH NO.18 AT PAGE NO.35 OF APPELLATE ORDER FOR A.Y.2006 - 07 AND 2008 - 09 OF AJAY S. PATEL AND SEE QUESTION AND ANSWER NO.2 OF STATEMENT DATED 14/08/2012 OF VIVEK P. PATEL IN CROSS - EXAMINA TION BY AJAY S. PATEL) . THE SAME IS REPRODUCED BELOW. QUE:2 AS WRITTEN ON PAGE NO.3 OF THIS BANACHITTI, YOU HAVE PAID RS.11,00,000/ - (RUPEES ELEVEN LAKH) TOWARDS PART CONSIDERATION. WHAT DO YOU HAVE TO SAY IN THIS REGARD? ANS:2 IN THIS REGARD I HAVE TO S TATE THAT ABOVE SAID RUPEES ELEVEN LAKH (RS.11 LAKH) WERE GIVEN BY WAY OF CHEQUE. HOWEVER, BECAUSE OF NON - HONORING OF CONDITIONS OF BANACHITTI AND ALSO THERE WERE INTERESTED PARTIES WHO WERE LANDLORDS AND THEY HAVE NOT SIGNED THE BANACHITTI, THEREFORE IT WAS NOTICED THAT THE ABOVE BANACHITTI WAS A FRAUD. SO, I GOT THE MONEY (CHEQUE) BACK SINCE THAT CHEQUE WAS NOT ENCASHED AND THIS BANACHITTI WAS ACCORDINGLY CANCELLED. THUS THE CASE IS FALLING UNDER THE CATEGORY OF A FRAUDULENT CONTRACT. 4. THE AP PELLANT, THEREFORE, CONSISTENTLY SAID & STATED THAT THE CONTRACT HAS BEEN REPUDIATED BY THE APPELLANT UNILATERALLY AS A RESULT OF NON - FULFILLMENT OF STIPULATED SUBSTANTIVE CONDITIONS(BREACH OF TERMS OF CONTRACT) BY THE SELLER AS THE APPELLANT HAD A RIGHT T O ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 33 REPUDIATE THE CONTRACT THOUGH NOT SPECIFICALLY SPECIFIED IN THE BANACHATTI BUT AS WAS NOT BOUND ALSO AS AFORESAID, WHICH IS NOT IN THE CASE OF SELLER AS HE WAS BOUND AND AGREEABLE. A CONTRACT IS THE CREATURE OF AN AGREEMENT BETWEEN THE PARTIES AND WHERE THE PARTIES UNDER THE TERMS OF CONTRACT AGREE TO INCORPORATE SPECIFIED TERMS AND THE OBJECT OF BANACHITTI WAS PASSING OF PEACEFUL POSSESSION OF A TITLE CLEARED SPECIFIED BLOCK OF LANDS IN FAVOUR OF SHRI VIVEK PATEL ,ON FULFILLMENT OF THE LAID DOWN TERMS WH ICH RELATES TO PERFORMANCE OR DISCHARGE OF THE CONTRACT. IN OTHER WORDS ON THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE CONTRACT IS ALSO VOID OR VOIDABLE AND MAY KINDLY BE TREATED AS SUCH AS IF IT NEVER EXISTED. 5. IT IS THE SAY OF THE A.O. THAT SINCE AGREEMENT TO SALE MADE IS IN WRITING AND IS A LEGAL CONTRACT AND THEREFORE ANY LEGAL CONTRACT WILL HOLD GOOD UNTIL CANCELLED BY WAY OF ANY OTHER LEGAL CONTRACT AND NEITHER SUCH CANCELLATION AGREEMENT WAS FOUND DURING THE COURSE OF SEARCH NOR FURNISHE D BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT SAYS AND STATES THAT THE VERY FOUNDATION OF THE CASE IS BASED ON THE SALE DOCUMENTS REGISTERED IN FAVOUR OF THE APPELLANT AS MADE AVAILABLE TO THE A.O. BY THE APPELLANT HIMSELF AND THE ADD ITIONS U/S.69 ARE MADE BY WORKING OUT THE DIFFERENCE OF SUM APPEARING IN THE BANACHITTHI AND AMOUNT SPECIFIED IN THE REGISTERED SALE DEED. BUT AS PER P.B. PAGE NO.129 & 130 IN THE TERMS LAID DOWN AT SERIAL NO.14 IT HAS BEEN SPECIFICALLY STATED BY THE SELLE R AS UNDER : - WE THE SELLER ADDITIONALLY UNDERTAKE AND ASSURE TO THE PURCHASERS THAT THE SELLER AND THEIR SUCCESSORS, ASSIGNORS, AND ADMINISTRATORS HAVE NOT GIVEN(ASSIGNED) OUR RIGHTLY SHARES, ENTITLES & RELATION ON THE LAND DESCRIBED IN THE SCHEDULE OR A NY OF ITS PARTS TO ANY OTHER PERSON IN ANY SUCH WAY. 5.1 FURTHER RELIANCE IS PLACED ON: (A) PARAGRAPH 2.4 OF SUBMISSION DATED 14/06/2013 (REFER P.B. PAGE 236 TO 239) AND PARAGRAPH 3.B) OF SUBMISSION DATED 24/06/2013 (REFER P.B. PAGE 329 TO 331) AND (B ) PARAGRAPH 3.B) OF SUBMISSION DATED 24/06/2013 FILED BEFORE CIT(A) (REFER P.B. PAGE 329 TO 331): - NO ORAL AGREEMENT CONTRADICTING/VARYING THE TERMS OF A DOCUMENT COULD BE OFFERED. (C) SMT SUNITA DHADDA V DCIT, ITA NO. 751/JP/2011 (A.Y.2008 - 09) ITAT JAIP UR BENCH A JAIPUR . ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 34 (D) HANUMANT KUMAR TALESRA V ITO WARD - 2 (1), UDAIPUR IN ITA NO. 383/JU/2008 (A.Y. 2004 - 05). IT IS RESPECTFULLY SUBMITTED THAT FOLLOWING IS THE SPECIFIC EXPRESS CLAUSE NARRATED IN THE REGISTERED SALE DEED EXECUTED IN FAVOUR OF THE APP ELLANT BY THE SELLERS OF LAND WHICH READS AS UNDER: WE THE SELLERS ADDITIONALLY UNDERTAKE AND ASSURE TO THE PURCHASER THAT THE SELLERS AND THEIR SUCCESSOR, ASSIGNEES, AND ADMINISTRATORS HAVE NOT GIVEN THE LAND DESCRIBED IN THE SCHEDULE OR ANY OF ITS P ARTS TO ANY OTHER PERSONS BY WAY OF MORTGAGE, SALE OR GIFT OR IS NOT IN WRITING IN ANY WHICH WAY ACCORDING TO THE ABOVE CITED EXPRESS CLAUSE IT HAS TO BE CONCLUDED THAT THE SELLERS HAVE CATEGORICALLY EXPRESSED AND UNDER TAKEN THAT THEY HAVE NOT SOLD TH IS LAND TO ANY OTHER PERSON OR HAVE CREATED ANY OTHER CHARGE OF WHATSOEVER NATURE ON THIS LAND. THIS TANTAMOUNT TO HOLD THAT IF ANY SUCH CHARGE IF AT ALL WAS CREATED THEN IT RESCIND AUTOMATICALLY. THE A.O. IS VERY MUCH IN POSSESSION OF THESE DOCUMENTS AS E VIDENT FROM PARAGRAPH NO.5.1 & 5.3 OF THE ASSESSMENT ORDER WHEREIN THE A.O. HAS ADDED THE DIFFERENCE BETWEEN THE DOCUMENTED PRICE AND THE ALLEGED ACTUAL AMOUNT PAID INSTEAD OF DIFFERENCE BETWEEN AMOUNT SHOWN IN THE BALANCE SHEET AND THE ALLEGED ACTUAL AMOU NT PAID. THIS GOES TO PROVE BEYOND DOUBT THAT WHATEVER MIGHT HAVE TRANSPIRED BETWEEN THE PARTIES I.E. SHRI SOMABHAI A. PRAJAPATI, CHANDUBHAI AMBALAL PRAJAPATI & VISHNUBHAI AMBALAL PRAJAPATI AND SHRI VIVEKBHAI PRAHLADBHAI PATEL AS PER BANACHITTHI DATED 18 - 1 - 2005 WAS EXCLUSIVELY BETWEEN THOSE PERSONS AND BY VIRTUE OF THE ABOVE REFERRED CLAUSE IT GETS CANCELLED AND TERMINATED BY THIS LEGAL INSTRUMENT IN WRITING EXECUTED EXCLUSIVELY BETWEEN THE SELLERS OF THE LAND AND THE APPELLANT. THE CASE OF THE A.O. IS SOLELY BASED ON THE ALLEGED AGREEMENT TO SALE DATED 18 - 01 - 2005 WHEREAS AS A COROLLARY TO THE REFERRED CLAUSES OF THE REGISTERED SALE DEED IT STANDS CANCELLED AND TERMINATED. EVEN THE PARTY TO THE AGREEMENT I.E. VIVEKBHAI PRAHLADBHAI PATEL HAS CATEGORICALLY DENIED THAT IT WAS NOT ACTED UPON AND IMPLEMENTED FOR THE REASONS THAT ALL THE DISPUTES AND OBJECTIONS ETC WERE NOT REMOVED AND THEREFORE SALE WAS FORFEITED AND THERE WAS NO QUESTION OF PURCHASING OF LAND (KINDLY REFER ANS. NO.9 OF STATEMENT DATED 24 - 12 - 2 009 OF VIVEK PRAHLADBHAI PATEL WHICH IS AT P.B.PAGE NO. 193 OF PAPER BOOK II ). ASSUMING WITHOUT ADMITTING OR CONCEDING AND IN THE ALTERNATIVE IT CAN ONLY BE CONCLUDED THAT IT COULD BE A CASE OF SALE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 35 OF SAME LAND TO MORE THAN ONE BUYER FRAUDULENTLY AND DI SHONESTLY WHICH IS A VERY COMMON PRACTICE IN LAND DEALINGS WHERE THE SAME PIECE AND PARCEL OF LAND OR PROPERTY IS SOLD TO DIFFERENT BUYERS REPEATEDLY AT DIFFERENT CONSIDERATION WITHOUT MAKING IT KNOWN TO EACH OTHERS. AS PER THE RATIO LAID DOWN BY THE HONOR ABLE PUNJAB AND HARYANA HIGH COURT(SUPRA) IT HAS TO CONCLUDED THAT THE ORAL EVIDENCES ADDUCED BY SOMABHAI A. PRAJAPATI AND PANKAJ PRAJAPATI AS ACCEPTED BY A.O. ARE INADMISSIBLE IN VIEW OF THE SALE DEED REGISTERED AT A LATER DATE. THE RATIO LAID DOWN THAT, IT FOLLOWS THAT NO ORAL AGREEMENT CONTRADICTING/ VARYING THE TERMS OF A DOCUMENT COULD BE OFFERED SQUARELY APPLIES TO THE FACTS OF THE CASE IN TERMS OF THE EXPRESS CLAUSE CITED ABOVE. ONCE THE AFORESAID PRINCIPLE IS CLEAR THEN THE OSTENSIBLE SALE CONSIDERA TION DISCLOSED IN THE SALE DEED DATED SEPTEMBER 24,2002 (A - 7) HAS TO BE ACCEPTED AND IT CANNOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE SQUARELY APPLIES TO THE FACTS OF THE APPELLANTS CASE IN AS MUCH AS THAT THE APPELLANT (SHRI AJAY. S. PATEL) WAS NO T A PARTY TO THE BANACHITTHI DATED 18 - 01 - 2005 AND HE WAS A PARTY TO THE SALE DEED EXECUTED ON A LATER DATES I.E.25 - 7 - 2005, 2 - 8 - 2005, 16 - 1 - 2006 AND 10 - 07 - 2007 PARTICULARLY IN VIEW OF THE FACTS DISCLOSED IN THE REFERRED CLAUSE. IT MAY THEREFORE BE KINDLY HEL D THAT THE AGREEMENT OF SALE DATED 18/01/2005 STANDS CANCELLED BY THIS LEGAL DOCUMENT IN THE FORM OF REGISTERED SALE DEED REFERRED ABOVE AND THEREFORE NO ADDITIONS SO MADE IS LIABLE TO BE SUSTAINED AND AS SUCH IT MAY KINDLY BE DIRECTED TO BE DELETED IN FUL L. 6 ANOTHER SIGNIFICANT FACT TO BE NOTED IS THAT. 1) BANACHITTHI WAS EXECUTED ON 18/01/2005. 2) LAST OF THE PAYMENT IN PURSUANCE OF THE SAID BANACHITTHI IS ALLEGED TO HAVE BEEN MADE BY 20/04/2006. 3) PHOTOSTATE COPY OF THE BANACHITTHI WAS SEIZED BY T HE DEPARTMENT ON 08/12/2009. 4) HAD IT BEEN THE CASE AS ALLEGED BY SOMABHAI & DEPARTMENT THAT AS PER THE DIRECTION OF VIVEK P. PATEL THE SALE DEEDS WERE REGISTERED IN THE NAMES OF ASSESSEE AND OTHER PERSONS THAN BY NECESSARY IMPLICATION OF SAID BAN ACHITTHI IT BECOMES IMPERATIVE ON THE PART OF PRAJAPATI TO INCLUDE THE NAME OF VIVEK P. PATEL IN SUCH SALE DEED AS CONFIRMING PARTY OR OTHERWISE BECAUSE AS FAR AS THE SALE DEED REGISTERED ON 13/05/2010 I.E. THE DATES FALLING AFTER SEARCH OR THEIR ACT ION OF DISCLOSING THE SAME AS CAPITAL GAIN, IS CONSPICUOUSLY ABSENT IN THE SAID SALE DEEDS REGISTERED IN THE CASE OF THIRD PARTY. BUT ON THE OTHER HAND THE SPECIFIC CLAUSE IN THE SALE DEED COMPLETELY RULES OUT THE IMPUGNED BANACHITTHI AS FRAUDULENT, VOI D AND CANCELLED. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 36 7. LAST BUT NOT THE LEAST IT IS PERTINENT TO REFER & RELY ON COPY OF REGISTRED SALE DEED DATED 14/05/2010 FOR LAND BEARING BLOCK NO. 502 & 505 OF VILLAGE BHADAJ, TAL: DASKROI, DIST: AHMEDABAD AND MARKED AS SUPPLEMENTARY PAPER BOOK PAGE NO S. 397 TO 422. NOW THE FACTS EMERGING FROM THE READING OF ALL THE DOCUMENTS IS THAT: A) IN THE BANACHITHI DATED 18/01/2005, SHRI CHANDUBHAI AMBALAL PRAJAPATI WAS A PARTY TO IT AND SIGNATORY. B) ALL THE NINE PLOTS OF LAND AGREED TO BE SOLD WERE BY ONLY ON E BANACHITHI DATED 18/01/2005, WHICH INCLUDES BLOCK NOS. 502 & 505. C) SINCE BANACHITHI DATED 18/01/2005 THOUGH WAS ONLY ONE DOCUMENT BUT ALL NINE BLOCKS WERE AGREED TO BE SOLD BY THIS INSTRUMENT ONLY WHEREIN SHRI CHANDUBHAI A. PRAJAPATI WAS OF PARTIE S AND SIGNATORY TO IT. ON THE OTHER HAND THE SAME CHANDUBHAI PRAJAPATI WAS NOT OWNER OF BLOCK NOS. 502 & 505 AS ON 18/01/2005 I.E. DATE OF SIGNING BANACHITHI, BUT HIS NAME WAS ENTERED ON 9/7/2007 BY REGISTERED SALE DEED. D) BLOCK NOS. 502 & 505 W ERE SOLD ON 14/5/2010 TO DHIRUBHAI AMIN BY CHANDUBHAI A. PRAJAPATI HIMSELF BY THE REGISTERED SALE DEED AS RELIED BY THE A.O. E) BY A CLEAR AND SPECIFIC UNDERTAKING SHRI CHANDUBHAI AMBALAL PRAJAPATI HAS STATED IN THE ABOVE SAID SALE DEED DATED 14/5/2010 AS NARRATED IN THE HIGHLIGHTED PORTION ABOVE IN BOLD LETTERS AT PARA I) ABOVE (SUPRA) I.E. THAT WE HAVE NEVER EVER GIVEN ANYTHING IN WRITING AS BANAKHAT, BANACHITHI OR WHATSOEVER NATURE IN WRITING RELATING TO SALE OF THE ABOVE LAND TO ANYBODY ELSE AND/OR EVEN IF ANYTHING GIVEN IN WRITING, IT IS NO LONGER IN OPERATION AS OF TODAY, HAVING BEEN CANCELLED . THIS IN ITSELF GOES TO PROVE & ESTABLISH THAT THE BANACHITTHI DATED 18/1/2005 IS CANCELLED IN ENTIRETY I.E. FOR ALL THE NINE BLOCKS OF LAND NARRATED THEREI N. F) THEREFORE, INSPITE OF BEING AWARE OF EXECUTION OF BANACHITHI DATED 18/1/2005, THE SEARCH WAS CONDUCTED ON 8/12/2009 & THE DISCLOSURE WAS MADE UNDER THE HEAD CAPITAL GAIN BY THE RESPECTIVE OWNERS OF LAND THOUGH ALL WERE NOT PARTIES TO BANACHITHI, SH RI CHANDUBHAI PRAJAPATI HAS CONSCIOUSLY AND SPECIFICALLY STATED TO GIVE THE AFORESAID ASSURANCE & UNDERTAKING WHICH CLEARLY GOES TO THE ROOT OF THE MATTER AND THE ISSUE TO BE DECIDED AS TO WHETHER BANACHITHI ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 37 DATED 18/1/2005 WAS CANCELLED AND NOT ACTED UPON , PARTICULARLY BY VIVEK PATEL AND MORE PARTICULARLY IN VIEW OF THE FACT THAT THERE IS NO MENTION OF THIS BANACHITHI OR VIVEK PATEL IN THE FINAL REGISTERED SALE DEED DATED 14/05/2010. G) IN THIS VIEW OF THE MATTER AND LATER EVIDENCES IN THE FORM OF REGISTE RED SALE DEED AVAILABLE ON RECORD OF A.O. AND ALSO RELIED BY THE A.O. TO MAKE THE ADDITIONS, THE SAME MAY KINDLY BE CONSIDERED WHILE DECIDING THE APPEALS. IT IS FURTHER PRAYED THAT SAME MAY BE TAKEN INTO CONSIDERATION WHILE ADJUDICATING THE GROUNDS OF APP EAL IN THE INTEREST OF JUSTICE & EQUITY BEING DOCUMENTS RELIED BY THE RESPONDENT TOO. IT IS MORE PARTICULARLY SO BECAUSE THE DOCUMENTS HAS TO BE READ AS A WHOLE AND NOT PARTLY OR SELECTIVELY AS HAS BEEN DONE BY A.O. TO FORM THE BASIS FOR MAKING ADDITION A ND THE OPERATIVE PART AS ABOVE OF THE SAME DOCUMENT AS RELIED BY THE RESPONDENT REVEALS OTHERWISE WHICH IS COMPLETELY IGNORED BY THE A.O. H) AS AT THE BOTTOM LINE ON PAGE 7 OF THE ENCLOSED SALE DEED IT IS CATEGORICALLY ASSURED BY THE SELLER TO TH E PURCHASER THAT HE HAS NEVER EVER GIVEN IN WRITING TO ANYBODY ELSE FOR SALE OF SAID LAND BY WAY OF BANAKHAT, BANACHITTHI, OR IN ANY OTHER FORM IN THE PAST, AND IS SPECIFICALLY DECLARED AS CANCELLED IN THE EVENT OF EXISTENCE OF SUCH WRITING AND THEREFORE, IT MAY KINDLY BE HELD THAT THE BANACHITTHI DATED 18/1/2005 WAS INFACT CANCELLED AND NOT ACTED UPON AND NO PAYMENT IN PERSUANCE OF THIS BANACHITTHI WAS MADE EITHER BY VIVEK P PATEL OR AJAY S PATEL AND THEREFORE, NO ADDITIONS U/S 69 OR 69B CAN BE MADE IN BOT H THE CASES AND THEREFORE, THE ADDITIONS MADE MAY ALSO BE DELETED IN FULL. C CONTRADICTION IN BRIEF EMERGING FROM THE STATEMENTS OF SHRI SOMABHAI PARAJAPATI AND HIS SON PANKAJ PARAJAPATI ON MATERIAL ISSUES: A. ABO UT BANACHITTHI : QUESTIONS & ANSWERS IN STATEMENTS (1) STATEMENT U/S 131 DATED 14/12/2011 BEFORE A.O . OF SOMABHAI PRAJAPATI [KINDLY REFER TO P.B. PAGE NO. 177] Q.6: WHERE IS THE ORIGINAL BANACHITTHI? ANS: THE ORIGINAL MIGHT BE WITH THEM, BECAUSE TH EY HAD PAID US. HENCE THE ORIGINAL MIGHT BE WITH THEM. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 38 (2) STATEMENT CROSS EXAMINATION OF SHRI SOMABHAI PRAJAPATI ON 14/08/2012 BY VIVEK PATEL [ KINDLY REFER TO P.B. PAGE NO.434] Q.2: I AM SHOWING YOU A COPY OF BANACHITTHI DATED 18/1/2005. PLEASE ST ATE WHETHER YOU ENTERED INTO MONETARY TRANSACTION PRIOR TO THIS BANACHITTHI? ANS: I HAD NO MONETARY TRANSACTION BEFORE THE ABOVE BANACHITTHI, WITH VIVEKBHAI. Q.8: THE AMOUNT OF MONEY AS PER CONDITION OF AGREEMENT TO SALE HAD TO BE PAID AFTER THEY ARE FULFILLED AND LAST DATE STIPULATED WAS UP TO 25/04/2006 PLEASE STATE AS TO WHETHER ANY SUPPLEMENTARY AGREEMENT TO SALE WAS EXECUTED FOR MAKING SUCH MODIFICATIONS OF THE ABOVE BANACHITTHI OR CHANGES OF ALTERNATIVE BLOCK NUMBERS OR EXTENSION OF TIM E LIMIT? PLEASE PRODUCE IT. ANS: IN REPLYING TO ABOVE, I HAVE TO STATE THAT NO SUCH SUPPLEMENTARY AGREEMENT OR ADDITIONAL AGREEMENT WAS MADE IN WRITING BUT AS PER ORAL UNDER - STANDING IT WAS DECIDED TO OFFER ALTERNATIVE LAND OF SAME MEASUREMENT THAT OF DISPUTED ONE AND TO EXECUTE BY MAKING SUCH DOCUMENT. (3) CROSS EXAMINATION OF SHRI SOMABHAI BY AJAY PATEL ON 14/8/2012 . [KINDLY REFER TO P.B. PAGE NO. 191] Q.5: WHAT HAPPENED AFTER BANACHITTHI EXECUTED? ANS: AFTER THIS BANACHITTHI, VIV EKBHAI GAVE ME RUPEES ELEVEN LAKH IN CASH AND PROMISED TO PAY BALANCE IN INSTALLMENT. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATMENTS IN HIS STATEMENT U/S 131 OF THE ACT DATED 14/12/2011 BEFORE THE A.O., IN REPLY TO QUESTION NO. 6 HE STATED THAT THE ORIGINAL BANACHITTHI MIGHT BE WITH THE BUYERS OF LAND BECAUSE THEY PAID HIM . ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 39 WHILE IN CROSS EXAMINATION TAKEN BY ASSESSEE BEFORE A.O., ON 14/08/2012, HE STATED THAT HE HAD NO MONETARY TRANSACTIONS WITH VIVEKBHAI BEFORE BANACHITTHI DATED 18/01/2005. A BOUT CONDITIONS OF AGREEMENT, IN REPLYING QUESTION NO. 8 HE HAS STATED THAT NO SUPPLEMENTARY AGREEMENT (BANACHITTHI) OR ADDITIONAL AGREEMENT WAS MADE IN WRITING BUT IT WAS ORALLY DECIDED TO OFFER ALTERNATIVE LAND OF SAME MEASUREMENT THAT OF DISPUTED ONE AN D TO EXECUTE BY MAKING SUCH DOCUMENT. WHEREAS, IN CROSS EXAMINATION BY SHRI AJAY PATEL, ON 14/08/2012 BEFORE A.O. ON BEING ASKED AS TO WHAT HAPPENED AFTER BANACHITTHI EXECUTED IN REPLYING QUESTION NO. 5 HE STATED THAT AFTER THIS BANACHITTHI, VIVEKBHAI GAV E HIM ELEVEN LAKHS IN CASH AND HAD PROMISED TO PAY BALANCE INSTALLMENT. B. ABOUT TERMS & CONDITIONS OF BANACHITTHI. QUESTIONS & ANSWERS IN STATEMENTS (1) STATEMENT CROSS EXAMINATION OF SHRI SOMABHAI BY VIVEK PATEL ON 14/08/2012 . [KINDLY REFER TO P .B. PAGE NO. 435] Q.4: WE HAVE COME TO KNOW THAT YOU OR YOUR FAMILY MEMBERS ARE NOT THE OWNERS OF THE LANDS MENTIONED ON SECOND PAGE OF BANACHITTHI TO SALE 14.60 BIGHAS OF LAND? PLEASE EXPLAIN. ANS: IN REPLY I HAVE TO STATE THAT WE ARE NOT FULL OWNERS OF 14.60 BIGHAS OF LAND SHOWN IN BANACHITTHI BUT AS STATED IN 509, WE ARE NOT FULL OWNERS BUT IN 509 B WHICH IS HALF THE AREA AS SHOWN ABOVE, WE ARE THE OWNERS. Q.5: I INVITE YOUR ATTENTION TO CLAUSES 3 TO 7 PAGE 2 & 3 OF BANACHITTHI ACCORDING TO WHICH IF ALL CONDITIONS ARE FULFILLED THEN AND ONLY WE WERE PREPARED TO PURCHASE THE LANDS AT THE RATES STATED THE BANACHITTHI. WHAT HAVE YOU TO SAY? ANS: IN REPLY, I HAVE TO STATE THAT ALL CONDITIONS OF CLAUSES 3 TO 7 ARE N OT FULFILLED BECAUSE IN SOME PART OF LANDS THEY INVOLVED CIVIL COURT LITIGATIONS WHICH WERE PENDING HENCE ALL CONDITIONS WERE NOT FULFILLED. HOWEVER, WE HAD A DEAL FOR ABOUT 50 BIGHAS OF LAND OF OTHER SURVEY ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 40 NUMBERS. BUT DUE TO ABOVE LITIGATION WE HAD COMPLETED THE DEAL FOR THAT LATER ON. Q.6: WHEN CONDITIONS OF CLAUSES 3 TO 7 OF BANACHITTHI WERE NOT FULFILLED THEN CAN YOU SAY WHEN THE CONDITIONS WERE FULFILLED? ANS: IT IS STATED THAT AS STATED IN COL.4 OF BANACHITTHI BLOCK NO.505& 502 WERE CLEARE D AFTER SOME TIME AND DOCUMENT FOR BLOCK NO. 500 WAS DONE IN F.Y.2005 - 06 AND IN RESPECT OF BLOCK NO.540, TITLE IS NOT CLEARED AS YET OVER AND ABOVE I HAVE TO STATE THAT OTHER COMPLIANCE OF CONDITION OF BANACHITTHI IS AS STATED IN ABOVE ANS. NO.5 (2) C ROSS EXAMINATION OF SHRI SOMABHAI BY AJAY PATEL ON 14/08/2012 BEFORE A.O. [KINDLY REFER TO P.B. PAGE NO. 193] Q.12: NOW SEE CONDITION NO.5 OF BANACHITTHI IN WHICH IT IS WRITTEN THAT YOU HAVE TO PAY THE PREMIUM AND CONVERT INTO OLD TENURE THE LAND OF BLOCK NO.500. WHAT HAVE YOU TO SAY TO THIS? ANS: I HAVE NOT PAID THE PREMIUM FOR THE BLOCK NO.500 AS PER THE TENURE BUT THE DEED IS EXECUTED FOR THIS LAND AS PER NEW TENURE. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS IN HIS CROSS EXAMINATION BY ASSESSEE ON 14/08/2012, IN REPLYING QUESTION NO.3, ABOUT OWNERSHIP OF LANDS, HE ADMITTEDLY STATED THAT HE IS NOT FULL OWNER OF 14.60 BIGHAS OF LAND SHOWN IN BANACHITTHI . IN REPLYING QUESTION NO. 5, HE STATED THAT ALL CONDITIONS OF CLAUSES 3 TO 7 ARE NO T FULFILLED BECAUSE IN SOME PART OF LAND THERE WAS COURT, LITIGATIONS; HOWEVER, THEY HAD DEAL FOR ABOUT 50 BIGHAS OF LAND OF OTHER SURVEY NUMBERS. ABOUT PERIOD WHEN CONDITIONS WERE FULFILLED, HE STATED THAT BLOCK NO.505 & 502 WERE CLEARED AFTER SOME TIME. AND DOCUMENT FOR BLOCK NO. 500 WAS DONE IN F.Y. 2005 - 06. FOR BLOCK 540 TITLE WAS NOT CLEARED TILL THEN. WHEREAS IN CROSS EXAMINATION BY AJAY PATEL ON 14/08/2012, IN QUESTION NO. 12 HE STATED THAT HE HAD NOT PAID PREMIUM FOR ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 41 BLOCK NO. 500 AS PER CONDITION NO. 5 OF BANACHITTHI FOR CONVERSION INTO OLD TENURE BUT DEED WAS EXECUTED AS PER NEW TENURE. C. ABOUT PAYMENT TOWARDS LAND VIS - A VIS BANACHITTHI. QUESTIONS & ANSWERS IN STATEMENTS (1) STATEMENT OF SHRI SOMABHAI U/S 131 DATED 14/12/2011 BEFORE A.O. [KINDLY REFER TO P.B. PAGE NO. 180] Q.4: AS PER AGREEMENT TO SALE (ANNEX.A.22) YOU RECEIVED RS.11,00,000/ - (RUPEES ELEVEN LAKH) WHICH WAS REQUIRED TO BE SET OFF AGAINST FULL PAYMENT IN FINAL SALE DEED. PLEASE STATE AS TO HOW DID YOU RECEIVE T HIS AMOUNT? THROUGH WHOM YOU HAVE RECEIVED? AND WHEN DID YOU RECEIVE? ANS: THIS RS.11 LAKH WAS RECEIVED ON THE SAID DATE AS PER BANACHITTHI IN CASH FROM SHRI VIVEK PRAHLAD PATEL. (2) CROSS - EXAMINATION OF SHRI SOMABHAI BY VIVEK PATEL ON 14/08/2012 [KINDLY REFER TO P.B. PAGE NO. 440] Q.16: YOU STATED THAT YOU RECEIVED RUPEES 11 LAKHS AS PER BANAKHAT. VIVEK HAS STATED THAT PAYMENT IS MADE BY CHEQUE IN HIS STATEMENT DATED 24/12/09 THAT PAYMENT IS MADE BY CHEQUE AND YOU KNEW THAT THERE WAS F RAUD, HE TOOK THE CHEQUE BACK AND BANACHITTHI WAS CANCELLED. IF YOU HAVE ANY PROOF OF RECEIPT OF CASH PLEASE PRODUCE IT. ANS: I HAVE NOT RECEIVED ANY STATEMENT DATED 24/12/09 OF VIVEKBHAI. RUPEES ELEVEN LAKHS ARE RECEIVED. ITS PROOF IS ONLY B ANACHITTHI. THERE IS NO OTHER PROOF. Q.19: AS INFORMED BY YOU, YOU RECEIVED FULL AMOUNT AS PER BANACHITTHI IN CASH AND EVEN SOME DOCUMENTS WERE NOT EXECUTED. PLEASE STATE AS TO HOW VIVEKBHAI GAVE YOU SUCH A HUGE AMOUNT IN FULL WITHOUT ANY SECURI TY, WRITING OR LIEN? ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 42 ANS: AGAINST THE AGREEMENT TO SALE, WE EXECUTED SOME OF THE SALE DEEDS BUT AGAINST REMAINING DOCUMENTS WE HAVE NOT GIVEN ANY SECURITY, WRITING OR LIEN TO SHRI VIVEKBHAI. (3) CROSS - EXAMINATION OF SOMABHAI BY AJAY PATEL ON 14/08/2 012. [KINDLY REFER TO P.B. PAGE NO. 192] Q.6: WHEN DID YOU RECEIVE THIS AMOUNT AND HOW? ANS: THIS I HAVE ALREADY REPLIED IN ANS 4 - 9 OF MY STATEMENT DATED 14/12/2011 Q.7: YOU SAY DIFFERENT PERSONS FROM HIS OFFICE WERE COMING AND GIVING YOU THE MONEY. PLEASE GIVE NAME OF ANY SUCH PERSON? ANS: I DONT KNOW THE NAME OF ANY ONE, THE RECEIPT OF MONEY WAS CONFIRMED WITH VIVEKBHAI BY TALKING ON PHONE. Q.8: IN HOW MANY INSTALLMENTS YOU RECEIVED MONEY? ANS: I RECEIVED THE MONEY IN ABOUT 15 TO 20 INSTAL LMENTS. Q.9: WHEN SUCH A BIG AMOUNT IS INVOLVED AND YOU RECEIVED IN 15 - 20 INSTALLMENTS (YOU HAVE NOT RECEIVED MONEY ON THE STIPULATED DATE PER BANACHITTHI), THEN YOU MUST HAVE KEPT DATE WISE RECORD. PLEASE PRODUCE THE SAID RECORD: ANS: NO, SIR, I HAVE NOT KEPT SUCH RECORD. Q.11: HAVE YOU RECEIVED MONEY RELATING TO THIS AGREEMENT TO SALE FROM OTHER THAN VIVEKBHAI? ANS: NO, I HAVE NOT RECEIVED ANY MONEY FROM ANYONE ELSE. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS IN HIS STATEMEN T DATED 14/12/2011, BEFORE A.O., IN QUESTION NO. 4, HE STATED THAT HE RECEIVED RS. 11 LAKHS ON THE SAID DATE OF BANACHITTHI FROM VIVEK P. PATEL . IN REPLYING QUESTION NO. 7 HE STATED THAT HE USED TO GET CASH PAYMENT THROUGH A PERSON FROM THEIR OFFICE WHICH WAS LATER ON CONFIRMED ON PHONE. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 43 WHILE IN CROSS EXAMINATION BY VIVEK P. PATEL ON 14/08/2012, ON BEING ASKED TO PRODUCE PROOF OF CASH RECEIVED, IN QUESTION NO. 16 HE DECLINED TO HAVE ANY PROOF OF RECEIPT OF MONEY . WHEREAS IN CROSS EXAMINATION BY AJA Y PATEL ON 14/08/2012 ABOUT TIME AND MODE OF RECEIPT OF CASH, IN REPLYING QUESTION NO. 6 HE REMAINED EVASIVE . ALSO, IN REPLYING QUESTION NO. 7, AS TO THE NAME OF PERSON DELIVERING MONEY, HE DECLINED SAYING HE DIDNT KNOW ANY PERSON . IN FURTHER QUESTION NO. 8, HE STATED THAT HE RECEIVED MONEY IN 15 TO 20 INSTALLMENTS. IN A SPECIFIC QUESTION TO PRODUCE DATE - WISE RECORD QUESTION NO. 9 HE STATED THAT HE DIDNT KEEP SUCH RECORD . IN REPLYING TO QUESTION NO.11, ABOUT RECEIPT OF MONEY FROM OTHER THAN VIVEKBHAI, H E CATEGORICALLY STATED THAT HE DIDNT RECEIVE MONEY FROM ANYONE ELSE . D. ABOUT DIFFERENT LAND VIS - - VIS BANACHITTHI. QUESTIONS & ANSWERS IN STATEMENTS (1) STATEMENT U/S 131 DATED 14/12/2011 BEFORE A.O. OF SOMABHAI PRAJAPATI [KINDLY REFER TO P.B. PAGE NO. 177] Q.3: HAVE YOU STRUCK THIS DEAL ONLY AT THE RATES MENTIONED AGAINST EACH LAND STATED IN THE BANACHITTHI? ANS: THE SALE DEEDS IN RESPECT OF LANDS OF BLOCK NOS. 504, 494,509,AND 500 MENTIONED IN THE BANACHITTHI WERE EXECUTED AND OUT OF REMAINI NG BLOCK NOS.502,505,487 & 540 WHICH WERE AFFECTED BY CIVIL SUITS, HENCE NO SALE DEED COULD BE MADE THEN, WHEREAS, WE HAD ALREADY RECEIVED FULL PAYMENT OF DEAL. HENCE, AGAINST THE SAME LANDS WE EXECUTED SEPARATE SALE DEED FOR BLOCK NOS.512 B, 510 AND 513, WHICH ARE NO LONGER IN THE REFERRED BANACHITTHI, IN ACCORDANCE WITH THE RATE INDICATED IN THE BANACHITTHI. THOSE WERE MADE IN THE NAMES SUGGESTED BY THEM. Q.11: DO YOU KNOW THE PERSONS IN WHOSE NAMES DOCUMENTS ARE EXECUTED? ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 44 ANS: AS PER INSTRUCTIONS OF VIVEK PRAHLAD PATEL, SALE DEED IS EXECUTED IN THE NAME OF AJAY SURENDRABHAI PATEL. I KNOW AJAY PATEL BY NAME ONLY. I DONT KNOW HIM MUCH. AS AND WHEN SALE DEED WAS TO BE MADE, IT WAS GETTING PREPARED BY VIVEKBHAI THROUGH HIS ADVOCATES AND SIGNATURES OF MYSELF AS WELL AS MY FAMILY MEMBERS WERE TAKEN IN THE OFFICE OF SUB - REGISTRAR. (2) STATEMENT CROSS EXAMINATION BY VIVEK PATEL ON 14/8/2012 OF SOMABHAI PRAJAPATI [KINDLY REFER TO P.B. PAGE NO. 435,436, 438 & 442] Q.4: WE HAVE COME TO KNOW THAT YOU OR YOUR FAMILY MEMBERS ARE NOT THE OWNERS OF THE LANDS MENTIONED ON SECOND PAGE OF BANACHITTHI TO SALE 14.60 BIGHAS OF LAND? PLEASE EXPLAIN. ANS: IN REPLY I HAVE TO STATE THAT WE ARE NOT FULL OWNERS OF 14.60 BIGHAS OF LAND SHOWN IN BANACHITTHI BUT AS STAT ED IN 509, WE ARE NOT FULL OWNERS BUT IN 509 B WHICH IS HALF THE AREA AS SHOWN ABOVE,WE ARE THE OWNERS. Q.5: I INVITE YOUR ATTENTION TO CLAUSES 3 TO 7 PAGE 2 & 3 OF BANACHITTHI ACCORDING TO WHICH IF ALL CONDITIONS ARE FULFILLED THEN AND ONLY WE W ERE PREPARED TO PURCHASE THE LANDS AT THE RATES STATED THE BANACHITTHI. WHAT HAVE YOU TO SAY? ANS: IN REPLY, I HAVE TO STATE THAT ALL CONDITIONS OF CLAUSES 3 TO 7 ARE NOT FULFILLED BECAUSE IN SOME PART OF LANDS THEY INVOLVED CIVIL COURT LITIGAT IONS WHICH WERE PENDING HENCE ALL CONDITIONS WERE NOT FULFILLED. HOWEVER, WE HAD A DEAL FOR ABOUT 50 BIGHAS OF LAND OF OTHER SURVEY NUMBERS. BUT DUE TO ABOVE LITIGATION WE HAD COMPLETED THE DEAL FOR THAT LATER ON. Q.6: WHEN CONDITIONS OF CLAUSES 3 TO 7 O F BANACHITTHI WERE NOT FULFILLED THEN CAN YOU SAY WHEN THE CONDITIONS WERE FULFILLED? ANS: IT IS STATED THAT AS STATED IN COL.4 OF BANACHITTHI BLOCK NO.505& 502 WERE CLEARED AFTER SOME TIME AND DOCUMENT FOR BLOCK NO. 500. WAS DONE IN F.Y.2005 - 06 AND IN RESPECT OF BLOCK NO.540, TITLE IS NOT CLEARED AS YET OVER AND ABOVE I HAVE TO STATE THAT OTHER COMPLIANCE OF CONDITION OF BANACHITTHI IS AS STATED IN ABOVE ANS. NO.5. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 45 Q.11: SHRI SOMABHAI I DRAW YOUR ATTENTION TO PAGE 4 OF YOUR STATEMENT DATED 25/1/2010 WHEREIN YOU HAVE STATED TO HAVE RECEIVED RS.13.02 CRORE IN FULL. BUT AS SHOWN IN THIS STATEMENT AMOUNT FOR BLOCK NO.540 OF 4.97 BIGHAS IS OUTSTANDING. PLEASE EXPLAIN WHETHER THIS AMOUNT IS INCLUSIVE OF RS.10,87,24,380/ - FOR THE COMPLETED DOCUMENT? AN S: IN THIS CONTEXT, I HAVE TO INFORM THAT THE SALE DEED FOR BLOCK NO. 540 WAS TO BE EXECUTED. IN ANSWER TO Q.NO.6 I HAVE SPECIFICALLY STATED THAT THE CONSIDERATION FOR BLOCK NO.540 WAS RECEIVED BUT SALE DEED WAS TO BE EXECUTED. WHEREAS, I HAVE, BY MISTAKE I ANSWERED THAT SALE DEED WAS EXECUTED BUT THE SALE DEED FOR BLOCK NO.540 WAS CLEARED AND AGAINST WHICH WE HAVE EXECUTED SALE DEED OF ANOTHER LAND. Q.18: IF YOU HAVE RECEIVED FULL PAYMENT UP TO 24/04/2006, THEN WHY SALE DEEDS OF LAND 512A, 512B & 513 WER E MADE AFTER ONE AND HALF TO THREE YEARS: WHEN FULL PAYMENT WAS RECEIVED IT COULD HAVE EXECUTED AT THAT TIME? ANS: WE TRIED TO SOLVE THE CIVIL DISPUTES IN ABOVE STATED BLOCK NOS BUT SINCE THEY COULD NOT BE SOLVED, WE OFFERED OTHER LANDS AND SALE DEEDS W ERE EXECUTED. (3) CROSS EXAMINATION OF SHRI SOMABHAI BY AJAY PATEL ON 14/08/2012 . [KINDLY REFER TO P.B. PAGE NO. 198] Q.21: HAVE YOU TRANSFERRED ANY LAND IN THE NAME OF VIVEKBHAI? ANS: NO, WE HAVE NOT TRANSFERRED ANY LAND IN THE NAME OF VIVEKBHAI. BUT ON HIS INSTRUMENTS WE TRANSFERRED THE LANDS IN THE NAME OF OTHER PERSONS SUGGESTED BY HIM. Q.22: WHETHER VIVEKBHAI IS CONFIRMING PARTY? ANS: NO. Q.23: HAVE YOU GOT ANY PROOF THAT YOU TRANSFERRED THE LAND ON THE INSTRUCTION OF VIVEKBHAI? ANS: O THER THAN THE BANACHITTHI THERE IS NO WRITTEN PROOF. IT WAS ORAL INSTRUMENT. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 46 (4) STATEMENT OF PANKAJ PRAJAPATI U/S 131 DATED 13/12/2011 BEFORE A.O. [KINDLY REFER TO P.B. PAGE NO. 476 & 477] Q.4: PLEASE STATE WHAT DOES PAPER 112, 113 &118 REVEAL? ANS: ON THE BACK SIDE OF PAGES 112,113 & 118 OF ANNE. A.22 ARE WRITTEN BLOCK NUMBERS WHICH REVEALS DISPUTED BLOCKS. PAGE NO. 118 REVEAL DETAILS OF BLOCK NUMBER, AREA, BIGHAS AND WHERE SALE DEED EXECUTED OR NOT AGAINST THEM. AND STATUS OF DISPUTES IS WRITTEN WHICH PAPERS ARE OF THE OPPOSITE PARTY IN BANACHITTHI. Q.5: PLEASE EXPLAIN HOW COME THESE PAPERS 112,113 &118 ARE LYING IN YOUR HOUSE WHEN THEY ARE STATED TO BE OF OTHER PARTY? ANS: WHATEVER IS WRITTEN THEREIN RELATE TO DETAILS OF LAND WISE DISPUTES WHICH WERE SENT BY THEIR OFFICE FOR OBTAINING CLEARANCE, FOR WHICH EXECUTION OF SALE DEEDS WERE PENDING. BACK SIDE OF PAPER 118 AND 111,112,113 ARE DOCUMENTS RECEIVED TOGETHER WHEREIN DETAILED ACCOUNT IS MENTIONED AND IT IS WRITTEN IN R ESPECT OF PENDING DOCUMENTS WHICH ARE GOT TO BE CLEARED. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS IN HIS STATEMENT U/S 131 DATED 14/12/2011 BEFORE A.O., IN REPLYING QUESTION NO. 3 HE STATED THAT SALE DEEDS FOR BLOCK NO. 504,494, 509 & 500 PER B ANACHITTHI WERE EXECUTED, BUT REMAINING BLOCKS WERE AFFECTED BY CIVIL SUITS HENCE WERE PENDING ALTHOUGH HE HAD RECEIVED FULL PAYMENT OF DEAL. HENCE, AGAINST THEM, SEPARATE SALE DEEDS FOR BLOCK NO. 512B, 510 & 513 WERE EXECUTED DESPITE THESE BLOCKS WERE NOT COVERED IN THE BANACHITTHI . ABOUT SPECIFIC QUESTION IN WHOSE NAMES DOCUMENTS ARE EXECUTED, IN REPLYING QUESTION NO.11, HE STATED THAT AT THE INSTANCE OF VIVEK PATEL SALE DEED EXECUTED IN THE NAME OF AJAY PATEL BY NAME . IN CROSS EXAMINATION DATED 14/08/2 012, (BY VIVEK PATEL), IN REPLY TO QUESTION NO.3, HE ADMITTEDLY STATED THAT HE OR HIS FAMILY MEMBERS ARE NOT FULL OWNERS OF 14.60 VIGHAS OF LAND PER ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 47 BANACHITTHI , BUT THEY OWNED ONLY HALF OF AREA OF BLOCK NO. 509B. IN REPLYING QUESTION NO.5 HE STATED THAT ALL THE CONDITIONS OF CLAUSES 3 TO 7 WERE NOT FULFILLED BECAUSE THERE WERE CIVIL LITIGATIONS HANCE THE DEEDS WERE KEPT ON HOLD BUT THEY OFFERED ABOUT 50 BIGHAS OF LAND OF ALTERNATIVE SURVEY NUMBERS OTHER THAN STATED IN BANACHITTHI . WHILE REPLYING QUESTION NO. 11, HE STATED THAT SALE DEED FOR BLOCK NO. 540 WAS NOT EXECUTED SINCE TITLE WAS NOT CLEAR AGAINST WHICH HE EXECUTED SALE DEED FOR ANOTHER LAND . WHEN A LEADING QUESTION NO.18 WAS ASKED AS TO WHY SALE DEEDS FOR LAND 512,512B & 513 WERE MADE AFTER ONE A ND HALF TO THREE YEARS WHEN FULL PAYMENT WAS RECEIVED ON 24/04/2006, HE STATED THAT HE HAD OFFERED OTHER LANDS AND DEEDS WERE EXECUTED SINCE HE COULD NOT SOLVE CIVIL LITIGATIONS . IN CROSS EXAMINATION BY AJAY PATEL ON 14/08/2012 IN QUESTION NO.21, HE STATE D THAT HE HAD NOT TRANSFERRED ANY LAND IN THE NAME OF VIVEK PATEL BUT IN THE NAMES OF PERSONS SUGGESTED BY HIM . FURTHER WHILE REPLYING QUESTION NO.22, HE CATEGORICALLY STATED THAT VIVEKBHAI WAS NEVER A CONFIRMING PARTY IN ANY DEALS . WHEREAS, HIS SON PANK AJ PRAJAPATI IN HIS STATEMENT U/S 131 DATED 13/12/2011, BEFORE A.O. HAS STATED THAT DETAILS NOTED IN ANNEXURE A 22 (PAGES 112,113 & 118) REVEAL DISPUTED BLOCK WITH AREA, BIGHAS, STATUS OF SALE DEEDS EXECUTED OR PENDING AND STATUS OF DISPUTES IS WRITTEN W HICH ARE PAPERS OF OPPOSITE PARTY STATED IN BANACHITTHI. ON FURTHER BEING ASKED AS TO HOW THOSE LOOSE PAPERS, SAID TO BE OF OTHER PARTIES, WERE LYING IN HIS HOUSE, IN REPLYING QUESTION NO.5 HE STATED THAT DETAILS OF LAND WISE DISPUTE WERE SENT BY THEIR OF FICE FOR OBTAINING CLEARANCE WHOSE SALE DEED WERE YET TO BE EXECUTED ON GETTING CLEARED. E. ABOUT PAYMENT OF CASH BACK TO APPELLANT. QUESTIONS & ANSWERS IN STATEMENTS ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 48 (1) STATEMENT U/S 131 DATED 14/12/2011 BEFORE THE A.O. OF SOMABHAI PRAJAPATI [KINDL Y REFER TO P.B. PAGE NO. 182 & 183] Q.09: WHEN AND IN WHAT MANNER DID YOU RECEIVED THIS AMOUNT? ANS : I HAVE RECEIVED THESE AMOUNTS IN CASH ON BEHALF OF SHRI VIVEK PRAHLADBHAI PATEL AS PER THE AGREEMENT TO SELL ON THE DATES AS MENTIONED IN THE AGREEMENT TO SELL - JANUARY 2005, JUNE 2005, NOVEMBER 2005 AND APRIL 2006 OR ON THE NEARBY DATES, IN THE RATIO MENTIONED IN THE AGREEMENT TO SELL. AND THESE AMOUNTS WERE BEING SENT TO ME BY DIFFERENT PERSONS FRO M THE OFFICE OF SHRI VIVEK PRAHLADBHAI PATE L. AND I WAS GIVING THEM THE PROOF FOR HAVING RECEIVED THE SAID AMOUNT, BY WRITING IN THEIR DI ARY MONEY RECEIVED AND PUTTING MY SIGNATURE. THIS DIARY W AS BEING TAKEN BACK BY THEM AND ITS CONFIRMATION WAS BEING TAKEN BY SHRI VIVEKBHAI ON PHONE. Q.10: IN THE SALE DEEDS EXECUTED, THE NAME OF PURCHASER IS SHOWN AS AJAY SURENDRABHAI PATEL. AND IN NONE OF THE DOCUMENTS NAME OF VIVEKBHAI PRAHLADBHAI PATEL IS MENTIONED EITHER AS PURCHASER OR AS CONFORMING PARTY. THEN HOW CAN YOU SAY THAT THIS AMOUN T IS GIVEN TO YOU BY VIVEKBHAI? ANS: IN REPLYING THIS, I WANT TO SAY THAT THE ENTIRE DEED WAS DONE WITH VIVEKBHAI ACCORDING TO BANACHITTHI AND VIVEKBHAI WAS SENDING MONEY, SO FAR AS DEEDS ARE CONCERNED, THESE DOCUMENTS WERE MADE IN THE NAMES O F PERSONS AS SUGGESTED BY VIVEKBHAI. AS AND WHEN DOCUMENTS WERE EXECUTED, THEN AND THEN THE AMOUNT OF DOCUMENT WAS RETURNED BACK TO VIVEKBHAI IN CASH. ACCORDINGLY, ACCOUNT WAS BEING SETTLED INTERNALLY. MEANING THEREBY, AS PER BANACHITTHI, AGAINST THE FUL L AMOUNT, AS AND WHEN SALE DEEDS WERE EXECUTED, THE AMOUNT AS PER DEED WAS RETURNED IN CASH TO VIVEKBHAI. CROSS EXAMINATION OF SHRI SOMABHAI BY AJAY PATEL ON 14/08/2012 . [KINDLY REFER TO P.B. PAGE NO. 192 & 193] Q.08: IN HOW MANY INSTALLMENTS YOU H AVE RECEIVED THE MONEY? ANS: I HAVE RECEIVED THE MONEY IN ABOUT 15 TO 20 INSTALLMENTS. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 49 Q.09 : WHEN SUCH A BIG AMOUNT IS INVOLVED AND WHEN YOU HAVE RECEIVED IN 15 TO 20 INSTALLMENTS (YOU HAVE NOT R ECEIVED THE MONEYS ON THE DATE OF THE AGREEMENT TO SALE) YOU MU ST HAVE KEPT DATE - WISE RECORD. PLEASE PRODUCE THE SAID RECORD. ANS: NO SIR, I HAVE NO SUCH RECORD. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS IN HIS STATEMENT U/S 131 RECORDED ON 14/11/2011, IN THE ASSESSMENT PROCEEDINGS, BEFOR E THE A.O. IN A SPECIFIC QUESTION (NO.10) AS TO WHEN SALE DEEDS ARE EXECUTED IN THE NAME OF AJAY S. PATEL AS PURCHASING PARTY, AND IN NONE OF IT NAME OF VIVEK PATEL IS SHOWN AS EITHER PURCHASER OR CONFIRMING PARTY, THEN HOW CAN HE SAY THAT THE AMOUNT IS GI VEN TO HIM BY VIVEK PATEL , HE REPLIED THAT ENTIRE DEAL WAS DONE WITH VIVEKBHAI AS PER BANACHITTHI AND HE USED TO SEND MONEY AND DEEDS WERE MADE IN NAMES SUGGESTED BY VIVEK PATEL. AS AND WHEN SALE DEED WAS EXECUTED THEN AND THEN THE AMOUNT OF DOCUMENT WAS R ETURNED BACK TO VIVEK IN CASH, AND ACCOUNTS WERE SETTLED INTERNALLY. THEN ON THE OTHER HAND WHEN HE REPAID THE AMOUNT IN CASH WHICH WAS PAID BY CHEQUES FOR REGISTERED SALE - DEEDS, HE MUST HAVE OBTAINED THE SIGNATURE OF VIVEK PATEL BEING RECEIPT IN HIS DIARY OR OTHER RECORD WHICH IS NOT FOUND OR PRODUCED BY PRAJAPATI. F. ABOUT DISCLOSURE OF ADDITIONAL INCOME BY SHRI SOMABHAI. QUESTIONS & ANSWERS IN STATEMENTS (1) STATEMENT U/S 132(4) DATED 25/1/2010 BEFORE ADIT OF SOMABHAI PRAJAPATI [KINDLY REFER TO P. B. PAGE NO. 163] Q.7: HAVE YOU DISCLOSED THE AMOUNT OF RS.13,02,00,000/ - APPEARING ON PAGE NO. 117 OF ANNE.A.22, IN YOUR RETURN OF INCOME? ANS: I HAVE SHOWN THE CAPITAL GAIN ARISING OUT OF SALE OF ABOVE SURVEY NUMBERS. I HAVE NOT SHOWN THE REMAINING ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 50 AM OUNT IN THE RETURN. IN THIS CONNECTION, WE THREE BROTHERS HAVE SIGNED AND FILED DISCLOSURE PETITION IN YOUR OFFICE ADMITTING THAT OUT OF RS. 13,02,00,000/ - , AMOUNT OF RS.5,00,00,000/ - IS DISCLOSED BY MY SON PANKAJ IN HIS STATEMENT U/S 132(4).WE HAVE DIS CLOSED RS.7,40,00,000/ - AS UNDISCLOSED INCOME FROM ABOVE TRANSACTION. I CONFIRM THE ABOVE DISCLOSURE AND REPEAT THE UNDISCLOSED INCOME OF RS.13,00,00,000/ - WHICH INCLUDES RS.5,00,00,000/ - DECLARED BY MY SON. OUT OF ABOVE, RS.12,40,00,000/ - IS THE ON MONEY R ECEIVED IN THE ABOVE LAND AND BALANCE OF RS.60,00,000/ - ARE DECLARED AGAINST PAPER OR ASSET THAT MAY BE FOUND. THE YEAR WISE WORKING OF DISCLOSED INCOME WILL BE GIVEN LATER ON. (2) STATEMENT U/S 132(4) DATED 08/12/2009 OF SHRI PANKAJ S PRAJAPATI BEFORE AD IT. [KINDLY REFER TO P.B. PAGE NO. 467 & 468] Q.20. I SHOW YOU THE PAPERS AT ANNEXURE A - 10 WHICH WERE FOUND DURING THE COURSE OF SEARCH TODAY FROM YOUR PREMISES. THERE APPEAR MANY CASH TRANSACTIONS. OUT OF THIS, I AM SHOWING YOU PAGE NO 18 TO 105, SO PLEASE EXPLAIN IN DETAIL ? ANS: THE ABOVE SEIZED PAPERS (LOOSE PAPERS) RELATE TO OUR BUSINESS (BUSINESS RELATED TO BRICKS) AND OF TRANSACTIONS RELATED TO PURCHASE AND SALE OF LAND. OUT OF THIS PAPERS, DETAILS KNOWN TO ME OF THE RELEVANT PAPE RS, I WILL STATE DETAILS OF THOSE PAPERS. PAGE NO. EXPLANATIONS PAGE NO. 78 RS.2 LAKHS CASH IS GIVEN ON 5 - 6 - 2008 WHICH IS PAID TO A.K.JADEJA PAID TO GOHEL SIR, P.I.SOLA RS.2 LAKHS IN CASH (ON) 16 - 5 - 2008 & RS.50,000 CASH GIVEN ON 19 - 5 - 2008. ALL THE SE CASH IS GIVEN OUT OF SALE OF LAND. PAGE NO 79 CASH GIVEN TO BOHRA SIR RS.50,000/ - ON DATE 7 - 2 - 2009 RS.4,00,000/ - TO A.K.JADEJA (CASH) IN WHICH ENTRY OF 5 - 6 - 2008 IS INCLUDED P.S.I.THAKOR SAB OF SOLA RS.750000/ - (CASH) CHAUHANSAB SOLA RS.50,000/ - (CA SH THESE CASH WAS PAID FROM THE SALE OF LAND. PAGE NO 80 RS.50,000/ - PAID IN CASH MAMLATDAR SUDIRBHAI ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 51 (BACK SIDE) THE TOTAL PAYMENT OF RS.15,66,500/ - MADE IN CASH Q.27: WHAT HAVE YOU TO SAY ABOUT AFORESAID DOUBTFUL LOOSE PAPERS CASH PAYMENTS NOTI NG & JOTTINGS WHICH YOU ARE UNABLE TO RECONCILE WITH BOOKS OF A/C? ANS: I AGREE THAT SOME OF THE CASH TRANSACTIONS DONT TALLY WITH MY BOOKS. HENCE I VOLUNTARILY OFFER UNDISCLOSED INCOME OF RS. FIVE CRORES AS UNRECORDED INCOME OF MYSELF & MY FAMILY WHIC H IS BINDING ON ME USED MY FAMILY. I WILL SUBMIT YEAR WISH BREAK UP LATER ON. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS IN HIS STATEMENT U/S 132(4) DATED 25/01/2010, BEFORE THE ADIT(INV), IN SPECIFIC QUESTION (NO.7) ABOUT DISCLOSURE OF INCOME I N HIS RETURN OF INCOME, HE STATED THAT HE HAD SHOWN CAPITAL GAIN OUT OF SALE OF ABOVE LANDS , AND ADDED THAT THEY (THREE BROTHERS) HAVE FILED A DISCLOSURE PETITION ADMITTING THAT OUT OF RS. 13,02,00,000/ - , AMOUNT OF RS. 5 CRORES IS DISCLOSED BY HIS SON PANK AJ U/S 132(4) AND REST RS. 7,40,00,000/ - , THEY HAVE DISCLOSED INCOME FROM ABOVE (LAND) TRANSACTIONS. OUT OF ABOVE RS.12,40,00,000/ - IS THE ON MONEY RECEIVED IN LAND AND BALANCE OF RS.60,00,000/ - ARE DECLARED AGAINST LOOSE PAPERS . YEAR WISE BREAK UP WILL BE GIVEN LATER ON. WHILE HIS SON PANKAJ PARAJAPATI, IN HIS STATEMENT U/S 132(4) DATED 08/12/2009 BEFORE DDIT HAS STATED IN REPLYING QUESTION NO.27 THAT HE DISCLOSED VOLUNTARY INCOME OF RS. 5 CRORES AS UNRECORDED INCOME REFERABLE TO LOOSE PAPERS, CASH PAYMEN TS NOTING JOTTINGS ETC WHICH HE IS UNABLE TO RECONCILE WITH BOOKS OF ACCOUNTS . IN SPITE OF THE FACT THAT THERE WAS ADMITTED OUTFLOW OF CASH PAID TO DIFFERENT GOVERNMENT AUTHORITIES OF RS.15,66,500/ - & R S. 1,39,44,021/ - I.E. AMOUNT AS PER DOCUMENT (AS PER TABLE ABOVE PARA 5.1 OF THE ASSESSMENT ORDER) AS CLAIMED BY SOMABHAI PRAJAPATI THAT IT WAS GIVEN BACK IN CASH ON EXECUTION OF THE REGISTER SALE DEED WHICH WORKS OUT AT RS.1,55,10,521/ - . NO FUND FLOW FOR THIS OUTGOING IS NEITHER SUPPLIED BY THE A .O. NOR PLACED ON RECORD (BODY OF ASSESSMENT ORDER). ON THE OTHER HAND THE DISCLOSURE OF ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 52 INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE LAND IN THEIR PROPORTIONATE SHARE IS DISCLOSED AS LONG TERM CAPITAL GAIN IN A.Y.S 2006 - 07, 2008 - 09 AND 2010 - 11 BY CLAI MING EQUAL AMOUNT OF DEDUCTION U/S 54B OF THE INCOME TAX ACT BY THE MEMBERS OF PRAJAPATI FAMILY. THOUGH IT IS NOT THE CASE OF APPELLANT BUT WHAT THE APPELLANT TRIES TO BRING ON RECORD IS THAT SHRI SOMABHAI PRAJAPATI AND HIS OTHER FAMILY MEMBERS ARE NOT AS STRAIGHT FORWARD AS IT IS BEING PROJECTED BY THE REVENUE AUTHORITIES BUT HE WAS ASSISTED BY LEGAL EAGLES AND ACCOMMODATED BY THE AUTHORITIES BELOW IN AS MUCH AS THAT NEITHER THIS OUT FLOW OF CASH WAS CONSIDERED WHICH TANTAMOUNT TO REDUCE THE AVAILABILITY OF FUND TO MAKE INVESTMENT AND THEREAFTER TO CLAIM DEDUCTION U/S 54B OF THE ACT NOR THE PROVISIONS OF SECTION 2 (47) OF THE INCOME TAX ACT 1961 READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT,1882 WAS INVOKED AS FULL SALE CONSIDERATION WAS RECE IVED IN A.YS. 2005 - 2006, 2006 - 2007 AND 2007 - 2008 I.E. RS. 3,25,50,000 (BY DT. 20 - 1 - 2005), RS. 3,25,50,000 + RS. 3,25,50,000 = 6,51,00,000 (BY DT.20 - 6 - 2005 & 20 - 11 - 2005) AND RS. 3,25,50,000 (BY DT.20 - 4 - 2006) RESPECTIVELY. SUBMISSIONS OF RESPONDENT ON A BOVE THE INFORMATION & EVIDENCES BROUGHT ON RECORD BY DEPARTMENT IN THIS REGARD ARE INADEQUATE TO UPHOLD THE VIEW TAKEN BY REVENUE. THE STANDS REITERATED ARE BASICALLY BY WAY OF ARGUMENT BASED ON ORAL EVIDENCE AND NOT SUPPORTED BY SOLID DOCUMENTARY E VIDENCE. THE ADDITION HAS BEEN MADE ON THE BASIS OF DEPOSITION FROM SOMABHAI S. PRAJAPATI. WHEREAS AT THE TIME OF SEARCH, THE DOCUMENTS WERE RECOVERED IN THE PRESENCE OF HIS SON PANKAJ AND HIS STATEMENT U/S 132(4) WAS RECORDED ON THESE DOCUMENTS. THE D EPOSITION GIVEN BY SOMABHAI S. PRAJAPATI & HIS SON ARE CONFUSING & UNRELIABLE. AS DEMONSTRATED HEREIN BEFORE THE STATEMENTS OF BOTH THE PERSONS ARE ABSOLUTELY CONTRADICTORY. THEREFORE, FROM THE REPLIES IT IS NOT PROVED CATEGORICALLY THAT THE PAYMENT WAS MADE BY VIVEK P. PATEL HIMSELF IN PURSUANCE OF BANACHITTHI DATED 18/01/2005 AND REPLIES WERE ALWAYS IN THE ALTERNATIVE, CONTRADICTING THE TERMS OF RELIED BANACHITTHI. THEREFORE, ALSO, IT MAY KINDLY BE HELD THAT THE STATEMENTS ARE CLEARLY CONFUSED AND UNRELIABLE STATEMENTS. IN THE CIRCUMSTANCES IT HAS TO BE CONCLUDED THAT EVIDENCE HAD NOT BEEN BROUGHT IN REASONABLE QUANTITY TO ESTABLISH THAT EITHER VIVEK P PATEL OR SHRI AJAY S PATEL HAS INVESTED THE SUMS IN PURSUANCE OF BANACHTTHI AS ALLEGED BY DEPAR TMENT AND ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 53 THEREFORE, THE ADDITIONS U/S 69 OR 69B OF THE ACT CANNOT BE MADE IN THE HANDS OF VIVEK P PATEL & ALSO AJAY S PATEL. D CONTENTION IN BRIEF A IT IS NOTEWORTHY THAT CONDITIONS EMBODIED IN THE BANACHITTHI WERE REQUIRED TO BE FULFIL LED/COMPLIED AS PRE CONDITION BY THE PARTIES. THIS ASPECT IS NOT EXAMINED BY THE ASSESSING OFFICER. B NOTHING HAS BEEN BROUGHT ON RECORD AND OR EVEN THERE IS NO WHISPER IN ASSESSMENT ORDER THAT THEIR TERMS WERE COMPLIED WITH. MERELY ON THE BASIS OF THE ST ATEMENT OF THE SELLER THE ADDITIONS SO MADE CANNOT BE SUSTAINED. EVERY BUYER WOULD EXPECT THAT THE TITLE OF LAND IS CLEAR AND LEGALLY TRANSFERABLE. ANY SUPPRESSION OF FACT WITH REGARD TO TITLE AMOUNTS TO FRAUD. A.O. DID NOT EXAMINE THIS ASPECT. MOREOVER, SELLER OF LAND HAS NOT DISCHARGED THEIR ONUS BY BRINGING ON RECORD THE ALLEGED SALE CONSIDERATION WAS RECEIVED FROM THE ASSESSEE. CONTRACT CANNOT BE IN VACUUM, THE RIGHTS UNTO A PROPERTY ARE TRANSFERRED BY WAY OF A WRITTEN AND REGISTERED DOCUMENT. THE CAS E AS BUILT BY A.O. IS THAT A WRITTEN AGREEMENT WAS CANCELLED AND A NEW ORAL AGREEMENT WAS MADE ON THE BASIS OF WHICH THE LAND WAS SOLD TO THIRD PARTY. NOTHING HAS BEEN PLACED ON RECORD THAT THE SO CALLED THIRD PARTY HAS ANY LINK WITH ASSESSEE. HOW CAN A P ERSON ENTRUST SUCH VALUABLE RIGHTS TO A STRANGER. CAN THE SETTLED PRINCIPLES OF LAW BE IGNORED MERELY FOR THE SAKE OF MAKING ADDITION. THE REVENUE IS MAKING THE ASSESSEE LIABLE TO TAX ON THE BASIS THAT A BANACHITTHI THAT WAS EXECUTED BETWEEN THE ASSESSE E AND SOMABHAI PRAJAPATI. IT WOULD BE APPROPRIATE TO PRODUCE THE TERMS & CONDITION OF THE SO CALLED BANACHITTHI. THE RELEVANT CONDITIONS ARE SEPARATELY REPRODUCED IN THE SYNOPSIS UNDER THE HEAD BANACHITTHI. BOTH THE PARTIES TO THE BANACHITTHI WERE REQUIRE D TO COMPLY WITH THE CONDITIONS AS STIPULATED IN THE BANACHITTHI. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 54 UNDISPUTED FACTS REMAIN THAT SHRI SOMABHAI PRAJAPATI FAILED TO COMPLY WITH THE CONDITIONS AS STIPULATED IN THE BANACHITTHI. HENCE IT CANNOT BE INFERRED THAT BANACHITTHI WAS ACTED UPON. SINC E SHRI SOMABHAI PRAJAPATI FAILED TO COMPLY WITH THE CONDITION THE ASSESSEE DID NOT PAY ANY SALE CONSIDERATION PERTAINING TO SPECIFIC PLOT NUMBERS OF LAND IN QUESTION. THERE IS NO DISPUTE REGARDING THE FACT THAT ANY AMOUNT WAS HANDED OVER BY THE ASSESSEE TO SHRI SOMABHAI AS A SALE CONSIDERATION OF THE LAND IN QUESTION. THE ONLY CONTENTION IS THAT SHRI SOMABHAI PRAJAPATI EXECUTED CERTAIN SALE DEED IN FAVOUR OF THIRD PARTIES AT THE INSTANCE OF ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT SALE DEE D EXECUTED BY RESPECTIVE SELLER DOES NOT SPEAK OF ANYTHING WHETHER THE SALE DEEDS WERE EXECUTED AT THE INSTANCE OF ASSESSEE. THE HONBLE PUNJAB & HARYANA HIGH COURT HAS CATEGORICALLY HELD THAT ONCE THE DOCUMENTARY EVIDENCE IS AVAILABLE, THE REVENUE AUTHORI TY SHOULD NOT BASE THE CASE ON ORAL EVIDENCE. UNDISPUTED FACTS REMAIN THAT THE PERSON IN WHOSE NAME LAND HAS BEEN TRANSFERRED BY WAY OF REGISTERED SALE DEED HAS NOT STATED THAT SUCH SALE DEED WAS EXECUTED AT THE INSTANCE OF ASSESSEE AND ANY MONEY WAS GIVEN TO SHRI SOMABHAI ON BEHALF OF THE ASSESSEE. THE REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD THAT THE PAYMENT OF SALE CONSIDERATION WHICH WAS MOSTLY MADE THROUGH BANKING CHANNEL HAS ANY LINK WITH THE ASSESSEE. IF THE PERSON IN WHOSE FAVOUR THE LAND HAS BEEN TRANSFERRED ON THE BASIS OF REGISTERED SALE DEED IS ABLE TO PROVE THAT THE SALE CONSIDERATION AS DESCRIBED IN THE SALE DEED WAS MADE OUT OF THE SOURCE AND FUND OF SUCH PERSON. IN THE ABSENCE OF ANY LINK WITH THE ASSESSEE, REVENUE AUTHORITIES ARE NOT JUSTIFIED IN MAKING ANY ADDITIONS PURELY ON THE BASIS OF A STATEMENT MADE BY SEARCHED PERSON. THE REVENUE AUTHORITIES HAVE ALSO NOT PLACED ANY MATERIAL ON RECORD THAT THE SO CALLED ON MONEY WAS TRANSFERRED FROM THE ASSESSEE OR HANDED OVER BY THE ASSESSEE. THE ASSESSEE HAS BEEN CONSISTENTLY STATING THAT THE SO CALLED BANACHITTHI WAS NOT ACTED UPON, THEREFORE, SO FAR THE ASSESSEE IS CONCERNED QUA THE BANACHITTHI IT WAS CANCELLED, THEREFORE, NO LIABILITY CAN BE FASTENED. THE REVENUE HAS NOT PLACED ANYTHING O N RECORD SUGGESTING THAT THIS CONTRACT WAS RENEWED OR THERE WAS ANY MATERIAL(DOCUMENTARY EVIDENCE) PROVING NOVATION OF CONTRACT. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 55 IN THE ABSENCE OF SUCH EVIDENCE THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING OR SUSTAINING THE ADDITION. THE AUTHORITIE S BELOW FAILED TO APPRECIATE THE FACT THAT IT IS A COMMON PRACTICE IN REAL ESTATE BUSINESS THAT THE LAND IS SOLD TO THE THIRD PARTIES IGNORING THE EARLIER BANACHITTHI WITH SOMEONE. THEREFORE, THE BANACHITTHI CANNOT BE A CONCLUDING DOCUMENT IN THE LIGHT OF THE FACT THAT THERE IS NO EVIDENCE SUGGESTING THAT THE SALE CONSIDERATION WAS PAID OUT OF THE FUND OF ASSESSEE AND AT THE INSTANCE OF ASSESSEE. THERE IS NOTHING ON RECORD THAT MONEY WAS HANDED OVER BY THE ASSESSEE OR PAID BY THE ASSESSEE BUT THE ENTIRE AD DITION IS MADE ON THE BASIS OF A CONCOCTED STORY. UNDISPUTED FACTS REMAIN THAT NO DOCUMENTARY EVIDENCE SUGGESTING THAT MONEY WAS PAID BY THE ASSESSEE FROM HIS POSSESSION OR FROM THE BUSINESS PREMISES OR RESIDENCE. IT IS AN UNDISPUTED FACT THAT SHRI SOMABH AI PRAJAPATI IN HIS CROSS - EXAMINATION HAS STATED THAT THERE IS NO EVIDENCE TO PROVE HIS CONTENTION THAT ON MONEY WAS GIVEN BY ASSESSEE. THEREFORE, ADMITTEDLY IT IS A CASE OF NO EVIDENCE. STRANGELY THE AUTHORITIES BELOW FAILED TO APPRECIATE THE STATEMENT MA DE BY SHRI SOMABHAI THAT WHENEVER ALLEGED PERSON OF ASSESSEE CAME FOR HANDING OVER MONEY HE TOOK SIGNATURE OF PRAJAPATI IN DIARY. OUT OF THE TOTAL ALLEGED SALE CONSIDERATION OF RS.1.30 CRORES, MAJOR PART WAS PAID THROUGH BANKING CHANNEL BY AJAY PATEL & OTH ERS. THERE IS NO EVIDENCE PLACED ON RECORD EITHER BY REVENUE OR SHRI SOMABHAI THAT THE AFORESAID AMOUNT HAD LINK WITH THE ASSESSEE. THE CONTENTION OF SOMABHAI IS EX FACIE FALSE IN VIEW OF THE FACT THAT AS PER HIS OWN STATEMENT WHENEVER MONEY WAS RECEIVED F ROM ASSESSEE, PERSON DELIVERING THE MONEY USE TO TAKE SIGNATURE OF PRAJAPATI. C ADMITTEDLY, THE ALLEGATION OF PRAJAPATI THAT THE AMOUNT RECEIVED THROUGH BANKING CHANNEL WAS RETURN TO ASSESSEE WITHOUT EVEN OBTAINING ANY SIGNATURE OR ANY RECEIPT THEREO F. THE ENTIRE CASE IS BASED ON FALSE & CONCOCTED STATEMENT OF PRAJAPATI WHICH HAS NO EVIDENTIARY VALUE AND CANNOT BE RELIED UPON. UNDISPUTEDLY NO FUND FLOW STATEMENT HAS BEEN PLACED ON RECORD PROVING THAT MONEY RECEIVED BY BANKING CHANNEL WAS RETURNED TO T HE ASSESSEE. D WHETHER MONEY RECEIVED THROUGH BANKING CHANNEL ARE WITHDRAWN, THERE IS NO DETAIL OF WITHDRAWAL DATE, AMOUNT ETC. IN THE ABSENCE OF SUCH MATERIAL EVIDENCE, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ASSESSEE LIABLE. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 56 I IT C REATES A SERIOUS DOUBT THAT WHETHER VIVEK HAS ACTUALLY PAID THE SUM IN PURSUANCE OF BANACHITTHI DATED 18/01/2005. SEE DR. KEYUR PARIKH V ACIT, CENTRAL CIRCLE - 2(3) ,AHMEDABAD IN THE INCOME TAX APPELLATE TRIBUNALB BENCH, AHMEDABAD BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER IT(SS)A NO.604/AHD/2011 A.YS: 2008 - 09 AND OTHER APPLICABLE CASE LAWS. II PRESUMPTION U/S 292C IS NOT APPLICABLE SINCE NO SEARCH U/S 132 IS CARRIED OUT IN THE CASE OF APPELLANT. ONLY S ECTION 69/69B IS INVOKED AND APPLIED IN THE CASE OF APPELLANT. THEREFORE, THE IMPORTANT QUESTION WHICH ARISES IS WHETHER THE APPELLANT HAS DISCHARGED HIS BURDEN IN EXPLAINING THE SO CALLED INVESTMENT ALLEGED TO HAVE BEEN MADE IN PURSUANCE OF THE BANACHITT HI DATED 18/01/2005 AND AS SUCH, BY ITS NECESSARY IMPLICATION, IT BECOMES IMPERATIVE FOR THE HONBLE BENCH TO DECIDE THE ATTACHED PROPOSITION AS CANVASSED THAT : ( 1) WHETHER THERE HAS BEEN NOVATION, RESCISSION OR SUBSTITUTION OF THE CONTRACT IN THE FORM OF BANACHITTHI DATED 18/01/2005. (2) WHETHER THE IMPUGNED BANACHITTHI DATED 18/01/2005 WAS FRAUDULENT, VOID/VOIDABLE AND CANCELLED? THE ASSESSEE ON THE BASIS OF MATERIAL PLACED AND AVAILABLE ON RECORD AND SUBMISSIONS MADE HAS DISCHARGED NOT ONLY HIS P RIMARY BURDEN IN EXPLAINING BOTH THE ABOVE TWO PROPOSITIONS BUT PROVING IT TO BE TRUE AND ALL OTHER PRESUMPTIONS WHICH MAY BE RAISED IN THIS BEHALF ON BANACHITTHI AND THE TERMS UNDER ITS REFERENCE. ON THE OTHER HAND THE DEPARTMENT IN EFFECTIVE AND CONVINC ING TERMS HAS FAILED TO REBUT THE SAME EXCEPT GIVING SOME GENERAL OBSERVATIONS THAT THE CLAIM CANNOT BE CONSIDERED AND ON TWO OTHER COUNTS THAT 1.)THE SELLERS HAVE DISCLOSED THE SAME AND OFFERED IT AS INCOME UNDER THE HEAD CAPITAL GAIN AND 2.) SHRI SOMABHA I S. PRAJAPATIS STATEMENT THAT THE MUTATION OF THOSE PLOTS REFERRED IN BANACHITTHI AND OTHER PLOTS IN LIEU OF THOSE NOT CLEARED IN THE NAME OF THIRD PARTIES AS PER ORAL DIRECTION OF VIVEK PATEL. SIGNIFICANTLY THE APPELLANT HAS PROCEEDED WITH HIS LINE OF A RGUMENTS IN DEFENSE BEFORE THE LD. CIT(A) ON THE SAME PREMISES AS HAS BEEN DONE BY THE A.O. BY OPENING WITH THE FOLLOWING SENTENCE THAT: ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 57 THEN THE SUBMISSIONS OF THE APPELLANT ON EACH OF THE REASONS CAN BE JUDGED IN THE SAME PROSPECTIVE AS HAS BEEN DON E BY THE A.O. BY WHICH THE A.O. HAS BASED HIS DECISION ON THE GROUNDS . (PLEASE SEE SUBMISSIONS OF AJAY S. PATEL IN P.B. - II PAGE NOS. 233 TO 396) ALSO IN VIEW OF THE MATERIAL AVAILABLE ON RECORD AND RELIED SUBMISSIONS IT MAY KINDLY BE HELD THAT THE EAR LIER UNREGISTERED BANACHITTI WAS SUBSEQUENTLY CANCELLED BY WAY OF PRESENT REGISTERED SALE DEED(A NEW CONTRACT) WHICH IS A LEGAL DOCUMENT. DOCUMENTARY EVIDENCE IS MORE ENFORCEABLE AND RELIABLE IN COMPARISON TO THE ORAL STATEMENT OF SOMABHAI PRAJAPATI WHICH IS INCONSISTENT, CONTRADICTORY AND UNRELIABLE 6. UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE AND FROM THE MATERIAL AVAILABLE ON RECORD, THE FOLLOWING PROPOSITIONS REQUIRES TO BE DECIDED. (1) WHETHER THERE HAS BEEN NOVATION, RESCISSION OR S UBSTITUTION OF THE CONTRACT IN THE FORM OF BANACHITTI DATED 18/01/2005. (2) WHETHER THE IMPUGNED BANACHITTI DATED 18/01/2005 WAS FRAUDULENT, VOID/VOIDABLE AND CANCELLED ?. (3) WHETHER UNDER SUCH CIRCUMSTANCES WHAT A PERSON WOULD NORMALLY DO AS TO WHETHER AT THE FIRST INSTANCE PAY THE ENTIRE SUM FOR THE PLOTS OF LAND AGREED TO BE SOLD WITHOUT FULFILLING THE AGREED SUBSTANTIVE CONDITIONS BY THE SELLER AND ALSO WITHOUT A CLEAR TITLE AND SIT IDLE AND WAIT FOR A BETTER TITLE BECAUSE THE IMPUGNED SUM RS.9,16, 41,058/ - (SERIAL NO.1 TO 8 AS PER TABLE ABOVE PARAGRAPH 5.1 OF THE ASSESSMENT ORDER) OUT OF RS.11,69,62,741/ - (SERIAL NO.1 TO 9 AS PER TABLE ABOVE PARAGRAPH 5.1 OF THE ASSESSMENT ORDER) IS ALLEGED TO HAVE BEEN PAID BETWEEN THE PERIOD 18/01/2005 TO 28/04/20 06 AND THE LAST OF THE SALE DEED IN THE CASE OF APPELLANT IS REGISTERED IN F.Y. 2009 - 10 AND (4) WHETHER ON THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, CAN A FREE HAND IS TO BE GIVEN TO THE DEPARTMENT TO ADD THE ENTIRE DISCLOSURE OF RS.13,02,0 0,000/ - ALLEGED TO HAVE BEEN MADE ON ACCOUNT OF IMPUGNED BANACHITTI DATED 18/01/2005 ON SUBSTANTIVE BASIS IN THE CASES OF PERSONS IN WHOSE NAME/S THE MUTATION OF THE LANDS IN QUESTION OR OTHER ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 58 LAND/S AS WAS DONE IN THE CASE OF APPELLANT IN PAST OR TO BE DO NE IN THE NAME OF ANY OTHER PERSON/S IN FUTURE ? PLACE : AHMEDABAD DATE : 26 - 6 - 2014 RESPONDENT BEFORE THE INCOME TAX RESPONDENT TRIBUNAL, AHMEDABAD BENCH C, AHMEDABAD. APPELLANT RESPONDENT DEPUTY CO MMISSIONER OF INCOME V. AJAY S. PATEL TAX, CENTRAL CIRCLE 2(2), AHMEDABAD AHMEDABAD PAN: AETPP8820Q C.O. NOS. 39, 40 & 41/AHD/2014, . IN ITA NOS. 2367, 2368 & 2587/AHD/2013. A.YS. 2006 - 07, 2008 - 09 & 2010 - 11, RESPECTIVELY. APPLICATION UNDER SUB RULE 5 OF RULE 18 OF INCOME TAX (APPELLATE TRIBUNAL)RULES,1963 TO CRAVE LEAVE TO SUBMIT SUPPLEMENTARY PAPER BOOK . MAY IT PLEASE THE HONBLE MEMBERS OF THE BENCH, WITH DUE RESPECT TO THE HONBLE MEMBERS OF AHMEDABAD C BENCH OF INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD, THE RESPONDENT ASSESSEE BEGS TO STATE AS FOLLOWS: A. PRELIMINARY : (1) THAT THE APPLICANT RESPONDENT HAS BEEN ASSESSED TO INCOME TAX BY THE DEPUTY COMMISSIONER OF INCOM E TAX. CENTRAL CIRCLE 2(2) AHMEDABAD, BEARING PAN: AETPP8820Q. (2) THAT WHILE FRAMING THE ASSESSMENT FOR A.Y. 2008 - 09, THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS. 1,91,00,780/ - TOWARDS DEEMED INCOME U/S 69 OF THE ACT AS PER HIS ORDER U/S 147 R.W.S 1 43(3) OF THE ACT DATED 18 - 01 - 2013. (3) THAT BEING AGGRIEVED BY THE IMPUGNED ORDER, THE RESPONDENT PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) III AHMEDABAD, WHO HAS DELETED THE IMPUGNED ADDITION VIDE APPELLATE ORDER DATED 10 - 07 - 2013. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 59 (4) AGGRIEVED, THE DEPARTMENT HAS PREFERRED SECOND APPEAL BEFORE THE HONBLE TRIBUNAL WHICH IS REGISTERED AT ITA.NO.2368/AHD/2013. (5) INCIDENTALLY, THE RESPONDENT HAS ALSO FILED C.O. ON 27 - 02 - 2014, RAISING GROUND OF CROSS OBJECTION THAT INITIAT ION OF PROCEEDINGS U/S 147/148 OF THE ACT AND SUBSEQUENT ASSESSMENT FRAMED ON THE BASIS OF SUCH NOTICE IS BAD IN LAW AND THAT NO ADDITION U/S 69 OR 69B OF THE ACT WAS LIABLE TO BE MADE OR SUSTAINED NOW. THE C.O HAS BEEN REGISTERED AS APPEAL NO. 40/AHD/2014 AND THE SAME IS IN THE PROCESS OF HEARING. B. REGARDING CAUSE OF SUBMITTING SUPPLEMENTARY PAPER BOOK ON MERIT. THE FACTS IN BRIEF LEADING TO THE PRESENT APPLICATION FOR SUBMISSION OF DOCUMENTS IN THE FORM OF SUPPLEMENTARY PAPER BOOK AT THIS JUNCTUR E ARE BRIEFLY AS UNDER: - (1) AS MAY BE PERUSED FROM THE IMPUGNED ASSESSMENT ORDER DATED 18 - 01 - 2013, THE ASSESSING OFFICER HAS PROCESSED TO SCRUTINIZE THE ISSUE OF SALE OF PLOTS OF LAND ON THE BASIS OF A BANACHITTHI FOUND AND SEIZED FROM THE PREMISES O F SHRI SOMABHAI AMBALAL PRAJAPATI IN THE COURSE OF SEARCH U/S 132 OF THE ACT ON 08 - 12 - 2009. THE ASSESSING OFFICER HAS TAKEN COGNIZANCE OF SUCH PLOTS INCLUDING BLOCK NOS. 502 & 505 AS NOTED ON THE FIRST PAGE OF THE IMPUGNED ASSESSMENT ORDER. (2) THEREAFTER , VIDE PARA 2.1 OF THE ASSESSMENT ORDER HE HAS NOTED THE CONTENTS OF A STATEMENT OF SAID SHRI SOMABHAI PRAJAPATI AND HAS BROUGHT ON RECORD THAT PLOTS OF LAND BEARING BLOCK NO. 502, 505 , 540, 497 & 487 WERE DISPUTED . HENCE ALL THE LANDS WERE NOT TRANSFE RRED BY THE SELLERS, AS AGREED, IN THE BANACHITTHI BUT AS PER UNDERSTANDING BLOCK NO. 512 - B, 510 & 513 ONLY WERE TRANSFERRED TO SHRI VIVEK PATEL. (3) AGAIN, AT PARA 5 OF THE IMPUGNED ORDER , THE ASSESSING OFFICER HAS RELIED UPON THE REFERRED BANACHITTHI OB SERVING THAT THE LAND WERE TRANSFERRED TO THE APPELLATE WHICH HAS CREATED A CHARGE IN FAVOUR OF THE APPELLATE AND IN THE MIDDLE OF THE FOLLOWING PAGE HE HAS OBSERVED THAT THE CONTENTION OF THE RESPONDENT THAT THE BANACHITTHI WAS CANCELLED HAS NOT BEEN PROV ED TO BE CORRECT. ULTIMATELY, VIDE PARA 5.3 OF THE IMPUGNED ORDER , THE A.O, HAS CONCLUDED HIS FINDING THAT THE RESPONDENT HAS FAILED TO EXPLAIN THE SOURCE OF PURCHASE OF PLOTS - BLOCKS AND TREATING THE SAME AS DEEMED INCOME U/S 69 OF THE ACT, HE HAS MADE AD DITION OF RS.6,52,10,209/ - , RS.1,91,00,780/ - & RS.73,70,769/ - IN THE HANDS OF THE RESPONDENT, FOR RESPECTIVE ASSESSMENT YEAR (4) BEING AGGREIVED BY THE AFORESAID ADDITIONS, AN APPEAL WAS FILED BEFORE THE LD CIT(A). IN AND AROUND THE MONTH OF JUNE, 2013 , THE BRIEF ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 60 WAS ASSIGNED TO ANIL KSHATRIYA, ADVOCATE WHICH WAS EARLIER HANDLED BY ANOTHER COUNSEL. SINCE THE ADDITIONS WERE MADE IN ALL THE THREE ASSESSMENT YEARS UNDER APPEAL ON THE BASIS OF EIGHT REGISTERED SALE DEEDS EXECUTED IN FAVOUR OF RESPONDENT, HIS ARGUMENTS BEFORE THE LD CIT(A) WERE MAINLY CONFINED AROUND THESE EIGHT REGISTERED SALE DEEDS AND THE APPEAL WAS ALLOWED BY DELETING THE ADDITIONS MADE U/S 69 OF THE ACT FOR ALL THE THREE ASSESSMENT YEARS. (5) AS NARRATED IN SUB PARAGRAPH 4 & 5 OF PA RT A UNDER THE HEAD PRELIMINARY ABOVE, APPEAL AND CROSS OBJECTIONS WERE FILED BY THE DEPARTMENT AND RESPONDENT RESPECTIVELY. (6) THE APPEALS AND CROSS OBJECTIONS ARE PENDING FOR HEARING. DURING THE COURSE OF PREPRATION OF THE CASE FOR ARGUMENT BEFORE THIS HONBLE BENCH AND ON DEEPER SCRUTINY, THE RESPONDENT HAS BEEN IN A POSITION TO ANALYSE THAT REGISTERED SALE DEED NO.8510 DATED 13 - 05 - 2010 IN RESPECT OF SALE OF BLOCK NO. 502 & 505 AS HAS BEEN RELIED BY THE ASSESSING OFFICER , IT HAS BEEN ESTABLISHED O N RECORD THAT THE PARTY OF THE FIRST PART NAMELY CHANDUBHAI AMBALAL PRAJAPATI HAS CATEGORICALLY STATED ON BOTTOM OF PAGE 7 & TOP OF PAGE 8 OF THE SAID SALE DEED THAT HE HAS NEVER EVER GIVEN AWAY THE LAND UNDER CONSIDERATION BY WAY OF SALE, MORTGAGE, OR AN Y OTHER MODES IN THE NOT LESS THEN THE FOLLOWING WORDS: FREE ENGLISH TRANSLATION FROM GUJARATI: I) WE, THE PARTY OF THE FIRST PART HEREBY ASSURE AND UNDERTAKE YOU I.E. THE PARTY OF THE SECOND PART AND STATES THAT WE HAVE NEVER EVER GIVEN ANYTHING IN WRITING AS BANAKHAT, BANACHITHI OR WHATSOEVER NATURE IN WRITING RELATING TO SALE OF THE ABOVE LAND TO ANYBODY ELSE AND/OR EVEN IF ANYTHING GIVEN IN WRITING, IT IS NO LONGER IN OPERATION AS OF TODAY, HAVING BEEN CANCELLED . ALSO, WE THE SELLER OF THIS LAND HAS NOT SOLD, MORTGAGED, OR GIFTED OR GIVEN IN WRITING TO TRANSFER OR ASSIGN IN WHATSOEVER MANNER OR HAVE NOT APPOINTED ANYBODY AS POWER OF ATTORNEY HOLDER TO ADMINISTER AND/OR TO MANAGE ANY AFFAIRS IN RESPECT OF THIS LAND, OR WE HAVE NEITHER CRE ATED ANY LIABILITY THEREUPON NOR OBTAINED ANY SOLVENCY CERTIFICATE FOR THE ABOVE LAND. IT IS PERTINENT TO MENTION HERE THAT: A) IN THE BANACHITHI DATED 18/01/2005, SHRI CHANDUBHAI AMBALAL PRAJAPATI WAS A PARTY TO IT AND SIGNATORY. B) ALL THE N INE PLOTS OF LAND AGREED TO BE SOLD WERE BY ONLY ONE BANACHITHI DATED 18/01/2005, WHICH INCLUDES BLOCK NOS. 502 & 505. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 61 C) SINCE BANACHITHI DATED 18/01/2005 THOUGH WAS ONLY ONE DOCUMENT BUT ALL NINE BLOCKS WERE AGREED TO BE SOLD BY THIS INSTRUMENT ONLY WHEREIN SHRI CHANDUBHAI A. PRAJAPATI WAS ONE OF THE PARTIES AND SIGNATORY TO IT. ON THE OTHER HAND THE SAME CHANDUBHAI PRAJAPATI WAS NOT OWNER OF BLOCK NOS. 502 & 505 AS ON 18/01/2005 I.E. DATE OF SIGNING BANACHITHI, BUT HIS NAME WAS ENTERED ON 9/7/2007 BY REGISTERED SALE DEED. D) BLOCK NOS. 502 & 505 WERE SOLD ON 14/5/2010 TO DHIRUBHAI AMIN BY CHANDUBHAI A. PRAJAPATI HIMSELF BY THE REGISTERED SALE DEED AS RELIED BY THE A.O. E) BY A CLEAR AND SPECIFIC UNDERTAKING SHRI CHANDUBHAI AM BALAL PRAJAPATI HAS STATED IN THE ABOVE SAID SALE DEED DATED 14/5/2010 AS NARRATED IN THE HIGHLIGHTED PORTION ABOVE IN BOLD LETTERS AT PARA I) ABOVE (SUPRA) I.E. THAT WE HAVE NEVER EVER GIVEN ANYTHING IN WRITING AS BANAKHAT, BANACHITHI OR WH ATSOEVER NATURE IN WRITING RELATING TO SALE OF THE ABOVE LAND TO ANYBODY ELSE AND/OR EVEN IF ANYTHING GIVEN IN WRITING, IT IS NO LONGER IN OPERATION AS OF TODAY, HAVING BEEN CANCELLED . THIS IN ITSELF GOES TO PROVE & ESTABLISH THAT THE BANACHITTHI DATED 18/1/2005 IS CANCELLED IN ENTIRITY I.E. FOR ALL THE NINE BLOCKS OF LAND NARRATED THEREIN. F) THEREFORE, INSPITE OF BEING AWARE OF EXECUTION OF BANACHITHI DATED 18/1/2005, THE SEARCH WAS CONDUCTED ON 8/12/2009 & THE DISCLOSURE WAS MADE UNDER THE HEAD CAPITAL GAIN BY THE RESPECTIVE OWNERS OF LAND THOUGH ALL WERE NOT PARTIES TO BANACHITHI, SHRI CHANDUBHAI PRAJAPATI HAS CONSCIOUSLY AND SPECIFICALLY STATED TO GIVE THE AFORESAID ASSURANCE & UNDERTAKING WHICH CLEARLY GOES TO THE ROOT OF THE MATTER AND THE ISSUE TO BE DECIDED AS TO WHETHER BANACHITHI DATED 18/1/2005 WAS CANCELLED AND NOT ACTED UPON, PARTICULARLY BY VIVEK PATEL AND MORE PARTICULARLY IN VIEW OF THE FACT THAT THERE IS NO MENTION OF THIS BANACHITHI OR VIVEK PATEL IN THE FINAL REGISTERED SALE DEED DATED 14/05/2010. G) IN THIS VIEW OF THE MATTER AND LATER EVIDENCES IN THE FORM OF REGISTERED SALE DEED AVAILABLE ON RECORD OF A.O. AND ALSO RELIED BY THE A.O. TO MAKE THE ADDITIONS, THE SAME MAY KINDLY BE ADMITTED AND CONSIDERED WHILE DECIDING THE APPEALS. IT IS FURTHER PRAYED THAT SAME MAY BE TAKEN INTO CONSIDERATION WHILE ADJUDICATING THE GROUNDS OF APPEAL IN THE INTEREST OF JUSTICE & EQUITY BEING DOCUMENTS RELIED BY THE RESPONDENT TOO.IT IS MORE PART ICULARLY SO BECAUSE THE DOCUMENTS HAS TO BE READ AS A WHOLE AND NOT PARTLY OR SELECTIVELY AS HAS BEEN DONE BY A.O. TO FORM THE BASIS FOR MAKING ADDITION AND THE OPERATIVE PART AS ABOVE OF THE SAME DOCUMENT AS RELIED BY ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 62 THE RESPONDENT REVEALS OTHERW ISE WHICH IS COMPELETLY IGNORED BY THE A.O. APART FROM THIS, AT THE BOTTOM LINE ON PAGE 7 OF THE ENCLOSED SALE DEED IT IS CATEGORICALLY ASSURED BY THE SELLER TO THE PURCHASER THAT HE HAS NEVER EVER GIVEN IN WRITING TO ANYBODY ELSE FOR SALE OF SAID LAND BY WAY OF BANAKHAT, BANACHITTHI, OR IN ANY OTHER FORM IN THE PAST, AND IS LIABLE TO CANCELLED IN THE EVENT OF EXISTENCE OF SUCH WRITING. (7) THUS, THE COPY OF ABOVE SAID SALE DEED (DOCUMENT) BEING PRODUCED NOW BEING A VITAL ONE TO REACH TO THE ROOT CAUSE OF THE ACTION AND DECIDE THE ISSUE, WHICH HAS BEEN RELIED UPON BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER AS STATED ABOVE. HOWEVER, SINCE THE SAME IS BEING PRODUCED NOW SO THAT THE ISSUE INVOLVED IN THE GROUND TAKEN BEFORE THE HONBLE TRIBUN AL MAY BE DECIDED IN ALL FAIRNESS BY GRANTING LEAVE TO THE RESPONDENT BY THIS HONBLE BENCH OF TRIBUNAL AND TO ACCEPT THE SAME FOR BEING ADMITTED AS SUPPLIMENTARY PAPER BOOK . 2. HAVING REGARD TO THE ABOVE STATED FACTS AND PECULIAR CIRCUMSTANCES OF THE CASE, THE RESPONDENT MOST HUMBLY PRAYS TO THIS HONBLE BENCH TO GRANT LEAVE FOR THE ABOVE REFERRED DOCUMENT AS RELIED UPON BY THE A.O. AND AS REFERRED TO IN THE ASSESSMENT ORDER IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. PLACE: AHMEDABAD DATE: 26/06/2014 RESPONDENT ENCL: SUPPLEMENTARY PAPER BOOK IN DUPLICATE. (DEPARTMENTAL COPY IS BEING SERVED DIRECTLY) APPENDIX - 1 BEFORE THE INCOMETAX APPELLATE TRIBUNAL C BENCH AHMEDBAD. IN THE MATTER OF DY. C OMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(2) AHMEDABAD V. AJAY SURENDRA PATEL ( PAN: AETPP8820Q) A.Y. 2006 - 2007 ITA NO 2367/A/2013 A.Y. 2008 - 2009ITA NO 2368/A/2013 A.Y. 2010 - 2011 ITA NO 2587/A/2013 & ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 63 CROSS OBJECTION NO 39/AHD/2014 A.Y. 2006 - 07 CROSS OBJECTION NO 40/AHD/2014 A.Y. 2008 - 09 CROSS OBJECTION NO 41/AHD/2014 A.Y. 2010 - 11 SUMMARY OF FURTHER ARGUMENTS ON BANACHITTHI CONDITIONS OF BANACHITTHI PAGE 119 TO 122 OF ANNEXURE A/12 AS PER CL 3 TO 7 AT P .B. PAGE NOS.7 TO 9. CONDITIONS A S PER BANA CHITTHI CL 3 TO CL 7 WHETHER CONDITION ARE FULFILLED BY THE SELLER OR NOT. ARGUMENTS. THE SELLER SHALL BRING TITLE CLEARANCE CERTIFICATE FROM A GOVERNMENT RECOGNIZED SOLICITOR. ALL ITS EXPENDITURE SHALL BE BORNE BY THE SELLER.(SEE CLAUSE N O.3 OF BANCHITTHI AT P.B. - I PAGE NO.7) IN THE LAND RECORDS OF FORM NOS. 7 & 12 OF THE LANDS OF BLOCK NO. 505 AND 502, THE NAME OF GOVERNMENT IS ENTERED. HENCE, THE PAYMENT FOR THE SAME IS NOT TO BE MADE AT PRESENT BUT THE SAME IS TO BE PAID AT THE TIME OF SECOND INSTALLMENT. DURING THAT PERIOD, THE SELLER GET CLEARED THE ENTRY IN THE NAME OF THE GOVERNMENT. (SEE CLAUSE NO.4 OF BANCHITTHI AT P.B. - I PAGE NO.7&8) NO NO IN REPLY TO QUESTION NO.6 OF STATEMENT DATED 14/08/2012 ON CROSS E XAMINATION OF SHRI SOMABHAI PRAJAPATI BY VIVEK P. PATEL, IT WAS ANSWERED THAT THE TITLE OF BLOCK NO. 540 IS NOT CLEAR. IN REPLY TO QUESTION NO.7 OF STATEMENT DATED 14/08/2012 ON CROSS EXAMINATION OF SHRI SOMABHAI PRAJAPATI BY VIVEK P. PATEL, IT WAS ANSWER ED THAT WE HAVE NOT RECEIVED ANY TITLE CLEARANCE CERTIFICATE TILL NOW AND WE HAVE NOT GIVEN ANY TITLE CLEARANCE CERTIFICATE (KINDLY REFER TO P.B. PAGE NO. 435 & 436). NEITHER THE REVENUE DEPARTMENT NOR SOMABHAI PRAJAPATI HAS PLACED ANY EVIDENCE TO ESTABL ISH THAT THE CONDITION OF CLAUSE 3 OF TITLE CLEARANCE CERTIFICATE WAS FULFILLED. NON FULFILLMENT OF THIS CONDITION WAS THE REASON FOR CANCELLATION OF BANACHITTHI. AS ON 19/01/2005 I.E. SIGNING OF BANACHITTHI, THE LAND IN QUESTION WAS NOT OWNED BY (I) SOMABHAI ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 64 THE LAND OF BLOCK NOS. 500 AND 540 IS SOLD BY THE SELLER TO THE PURCHASER ON A CONDITION OF IT BEING THE LAND OF OLD TENURE [ON A CONDITION NOT TO PAY PREMIUM AT THE TIME OF NON - AGRICULTURE]. BUT IF AT THE TIME OF NON - AGRICULTURE OR AT THE TIME OF CERTIFICATE OF SOLICITOR, IF IT IS FOUND TO BE OF NO AMBALAL PRAJAPATI (II) CHANDUBHAI AMBALAL PRAJAPATI (III) VISHNUBHAI AMBALAL PRAJAPATI WHO WERE SIGNATORIES OF BANACHITTHI AND ALSO ANY OF THEIR FAMILY MEMBERS EITHER IN PART OR IN FULL. IN FACT, CHANDUBHAI AMBALAL PRAJAPATI BECAME OWNER OF THE SA ID LAND ONLY ON 09/07/2007. (PLEASE REFER TO P.B.PAGE NO. 399). THUS, IT WAS FRAUDULENT SALE AND THEREFORE SHRI VIVEK PATEL WAS EMPOWERED TO CANCEL THE ALLEGED BANACHITTHI DATED 18/01/2005 UNILATERALLY AS EXPLAINED IN PART B ON BANACHITTHI IN PARAGRAPH 3 A T PAGE 13 OF SYNOPSIS AND SUMMARY OF ARGUMENTS FILED ON 30/06/2014 AND AS PER THE STATEMENT OF SHRI VIVEK PATEL, SHRI VIVEK PATEL HAS SPECIFICALLY STATED THAT THE BANACHITTHI WAS CANCELLED AND HENCE THERE IS NO QUESTION OF GIVING ANY MONEY (KINDLY REFER TO ANS. NO. 6 OF VIVEK PATEL AT PAGE NO. 36 OF THE APPELLATE ORDER). FURTHER, ACCORDING TO CONDITIONS ATTACHED TO THIS TERM AT CLAUSE NO - 4 OF THE BANACHITTHI, THE PRAJAPATIS WERE BOUND TO CLEAR THE NAME OF GOVERNMENT. FURTHER TO IT, THEY AGREED AND BOUND THE MSELVES THAT THE PAYMENT FOR IT WAS NOT TO BE MADE THEN BUT, WAS TO BE MADE AT THE TIME OF SECOND INSTALLMENT AND AS PER THE SCHEDULE OF PAYMENT IT WAS TO BE MADE ON 20/06/2005. IN OTHER WORDS, AFTER SIGNING OF THE BANACHITTHI ON 19/01/2005, THE FIRST PAYM ENT BEING 50% AS THAT OF 20/01/2005 AND 20/06/2005 WAS DUE ON 20/06/2005 WHICH IS FALLING IN THE FINANCIAL YEAR 2005 - 06 RELATED TO A.Y.2006 - 07. NO PAYMENT FOR BLOCK NO.505 & 502 WAS TO BE MADE BY THE ASSESSEE TILL MR. SOMABHAI S. PRAJAPATI CLEARS THE ENTRY APPEARING IN THE NAME OF GOVERNMENT IN FORM NO.7/12 ON OR ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 65 N EW TENURE, THEN THE PREMIUM SHALL BE PAID BY THE SELLER. (SEE CLAUSE NO.5 OF BANCHITTHI AT P.B. - I PAGE NO.8) IN THE LAND OF BLOCK NO. 540, A STAY ORDER IS PASSED BY THE LD. GUJARAT REVENUE TRIBUNAL VIDE ITS ORDER NO. T.E.N.N.A./412/96[7] DATED 10 - 6 - 96 A ND AS PER THE PROVISIONS OF SECTION 32 TO 7{B}{B}{8}, IT HAS GONE IN GHARKHED. BY REMOVING ITS ORDERS, THE SAME SHALL HAVE TO BE BROUGHT IN THE POSITION OF LAND OF OLD TENURE. (SEE CLAUSE NO.6 OF BANCHITTHI AT P.B. - I PAGE NO.8&9) THE LAND OF BLOCK NO. 500 IS GIVEN ON A CONDITION OF IT BEING THE LAND OF OLD TENURE BUT IN THE VILLAGE FORM NO. 5, THE ENTRY NO. 2744 IS MADE. IT IS THE RESPONSIBILITY OF THE SELLER TO CONVERT THE SAID LAND INTO OLD TENURE LAND BY GIVING ITS PROPER EXPLANATION. (SEE CLAUSE NO. 7 OF BANCHITTHI AT P.B. - I PAGE NO.9) NO NO BEFORE 20/06/2005 I.E. DUE DATE OF PAYMENT OF SECOND INSTALLMENT BUT SHRI SOMABHAI S. PRAJAPATI FAILED TO CLEAR THE ENTRY IN THE NAME OF GOVERNMENT AS APPEARING IN EXTRACT OF 7/12 RECORD BEFOR E THE SAID DATE I.E. 20/06/2005, DUE DATE OF PAYMENT OF SECOND INSTALLMENT. NEITHER THE REVENUE DEPARTMENT NOR SOMABHAI PRAJAPATI HAS PLACED ANY EVIDENCE TO ESTABLISH THAT THE CONDITION OF CLAUSE 4 WAS FULFILLED. NON FULFILLMENT OF THIS CONDITION WAS T HE REASON FOR CANCELLATION OF BANACHITTHI. BLOCK NO. 540 REMAINS UNSOLD DUE TO THE FACT THAT THE DEFECTS WERE NOT CLEARED AND NO TITLE CERTIFICATE WAS EVEN OBTAINED AND GIVEN. (KINDLY REFER TO ANS. NO. 6 OF STATEMENT DATED 14/08/2012 OF SOMABHAI PRAJAPA TI ON CROSS EXAMINATION BY VIVEK P. PATEL AT P.B. PAGE NO.436). NEITHER THE REVENUE DEPARTMENT NOR SOMABHAI PRAJAPATI HAS PLACED ANY EVIDENCE TO ESTABLISH THAT THE CONDITION OF CLAUSE 5 WAS FULFILLED. NON FULFILLMENT OF THIS CONDITION WAS THE REASON FOR C ANCELLATION OF BANACHITTHI. THE OPERATIVE STAY ORDER DATED 10/06/1996 WAS TO BE VACATED AND THE LAND IS TO BE CONVERTED INTO OLD TENURE ONE WHICH WAS NOT DONE AND THEREFORE NO PAYMENT WAS LIABLE TO BE MADE AND FOR THE REASONS AS SUBMITTED IN RESPECT OF B LOCK NO. 505 & 502 ABOVE, THE BANACHITTHI WAS CANCELLED BY VIVEK P. PATEL. NEITHER THE REVENUE DEPARTMENT NOR SOMABHAI PRAJAPATI HAS PLACED ANY EVIDENCE TO ESTABLISH THAT THE ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 66 CONDITION OF CLAUSE 6 WAS FULFILLED. NON FULFILLMENT OF THIS CONDITION WAS THE REASON FOR CANCELLATION OF BANACHITTHI. ACCORDING TO THIS TERM AND CONDITION, THE LAND IN QUESTION WAS TO BE SOLD AS LAND OF OLD TENURE AND AS PER ANS. NO. 12 OF STATEMENT DATED 14/08/2012 OF SHRI SOMABHAI PRAJAPATI AND PANKAJ PRAJAPATI ON CROSS EXAMINATI ON BY AJAY S. PATEL CLEARLY STATED THAT I HAVE NOT PAID PREMIUM FOR BLOCK NO. 500 AS PER THE CONDITION, BUT, THE DEED IS EXECUTED FOR THIS LAND AS PER NEW TENURE. (KINDLY REFER TO P.B. PAGE NO. 194). THIS IS AGAIN A BREACH OF TERMS AND CONDITIONS BY THE PRAJAPATIS AND THEREFORE ON THIS REASON ALSO VIVEK PATEL HAS CANCELLED THE AGREEMENT AND THEREFORE NO PAYMENT WOULD HAVE BEEN MADE IN PURSUANCE OF BANACHITTHI. NEITHER THE REVENUE DEPARTMENT NOR SOMABHAI PRAJAPATI HAS PLACED ANY EVIDENCE TO ESTABLISH THAT THE CONDITION OF CLAUSE 7 WAS FULFILLED. NON FULFILLMENT OF THIS CONDITION WAS THE REASON FOR CANCELLATION OF BANACHITTHI. THEREFORE, BLOCK NO. 540,487 & 497 REMAINS UNSOLD TILL DATE AND BLOCK NO. 502 & 505 WERE SOLD TO ONE SHRI CHIRAG DHIRUBHAI AMIN A LIAS DHIRAJLAL AMIN ON 13/05/2010 BY A REGISTERED SALE - DEED. THE A.O. WAS REQUIRED TO DECIDE THE OBJECTION TO THE NOTICE U/S. 148 AND SERVED A COPY OF THE ORDER ON ASSESSEE. THE A.O. WAS ALSO REQUIRED TO GIVE SOME REASONABLE TIME TO THE ASSESSEE FOR CHAL LENGING THIS ORDER. IN THE INSTANT CASE, IT IS NOT DONE BY A.O. AND INSTEAD HE PASSED A COMPOSITE ASSESSMENT ORDER DECIDING THE OBJECTIONS ALONG WITH THE ASSESSMENT ORDER AS EVIDENT FROM PARAGRAPH NO. 3.2 OF THE ASSESSMENT ORDER. RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT DELIVERED IN THE CASE OF GENERAL MOTORS INDIA P. LTD. AS REPORTED IN [2013] 354 ITR 244/257 (GUJ.). IN VIEW OF THE BINDING RATIO AS LAID ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 67 DOWN BY THE JURISDICTIONAL HIGH COURT, THE NOTICE U/S 148 AN D THE ASSESSMENT ORDER PASSED UNDER THE ACT MAY KINDLY BE QUASHED BY RESPECTFULLY FOLLOWING THE SAME. PLACE: AHMEDABAD DATE: 29 - 9 - 2014 RESPONDENT 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MAT ERIAL AVAILABLE ON RECORD. THE ASSESSEE PURCHASED THE FOLLOWING PLOTS OF LAND VIDE REGISTERED DEED OF SALE FROM THE PRAJAPATIS AS UNDER: - SR.NO BLOCK NO. DOCUMENT NO. AND DATE AMOUNT AS PER DOCUMENT. ASST. YEAR. (1) 509 5581 - 25/07/2005 6,50,000 2006 - 2007 (2) 500 5812 - 02/08/2005 4,00,000 2006 - 2007 (3) 494 5582 - 25/07/2005 1,51,000 2006 - 2007 (4) 504 5813 - 02/08/2005 11,10,900 2006 - 2007 (5) 510 382 - 17/01/2006 3,50,001 2006 - 2007 26,61,901/ - (6) 512 - B 8406 - 10/07/2007 3,56,120 2008 - 2009 (7) 512 - A 8408 - 10/07/2007 5,14,000 2008 - 2009 8,70,120 (8) 513 9480 - 18/06/2009 23,37,000 2010 - 2011 23,37,000 9. FURTHER, IT IS NOT INDISPUTE THAT THE CONSIDERATION DISCLOSED IN THE REGISTERED DEED OF SALE WAS DULY DISCLO SED BY THE ASSESSEE IN HIS RETURN OF INCOME. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE CASE OF ONE SHRI SOMABHAI AMBALAL PRAJAPATI ON 8 - 12 - 2009. IN THE COURSE OF THE SEARCH, AN AGREEMENT FOR SALE [BANACHITTI] WAS FOUND WHICH WAS EXECUTED ON 18 - 1 - 2005 BETWEEN SHRI SOMABHAI AMBALAL PRAJAPATI, SHRI CHANDUBHAI AMBALAL PRAJAPATI AND SHRI VISHNUBHAI AMBALAL PRAJAPATI [HEREINAFTER ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 68 REFERRED TO AS THE SELLERS] AND SHRI VIVEKBHAI PRAHALADBHAI PATEL [HEREINAFTER REFERRED TO AS THE PURCHASER] . THE AGREEMENT W AS IN RESPECT OF THE FOLLOWING PLOTS OF LAND AT THE FOLLOWING RATES: - BLOCK NO. SURVEY NO. TENURE SQ. METERS RATE RS. PER BIGHA 540 515 OLD TENURE 11432 29,51,000 487 471 NEW TENURE 1938 21,85,000 497 476, 477, 482 NEW TENURE 31566 21,85,000 50 4 488 NEW TENURE 27822 21,85,000 494 473/2 OLD TENURE 4097.50 29,51,000 509 487, 497 NEW TENURE 32729 21,85,000 500 480 OLD TENURE 8296 29,51,000 502 484 GOVT 12950 505 485 GOVT 16662 10. IN THE STATEMENT GIVEN BY SHRI SOMABHAI A PRAJAPATI U /S. 132[4] ON 25 - 1 - 2010, HE STATED THAT THE AMOUNT MENTIONED IN THE AGREEMENT FOR SALE WAS RECEIVED BY HIM FROM SHRI VIVEK PATEL AND AT THE INSTANCE OF SHRI VIVEK PATEL, HE EXECUTED REGISTERED DEED OF SALE IN FAVOUR OF THE ASSESSEE IN RESPECT OF AFORESAID 8 PLOTS OF LAND AND IN FAVOUR OF SHRI DHIRUBHAI AMIN IN RESPECT OF BLOCK NOS. 502 AND 505 . IT WAS ALSO CLARIFIED BY SHRI SOMABHAI PRAJAPATI THAT 4 BLOCKS OF LAND BEARING NOS. 512/A, 512/B, 510 AND 513 SOLD TO THE ASSESSEE ARE NOT APPEARING IN THE AGREEMENT TO SELL AS THESE PLOTS OF LAND WERE SOLD IN LIEU OF BLOCKS OF LAND NOS. 502, 505, 4 97 AND 540 MENTIONED IN THE AGREEMENT OF SALE AS BECAUSE THERE WERE SOME DEFECTS IN TITLE OF THOSE PLOTS AND THEREFORE, SIMILARLY SITUATED PLOTS WERE SOLD IN LIEU OF THOSE PLOTS. 11. THE CONSIDERATION MENTIONED AS AGREED UPON IN THE AGREEMENT OF SALE WAS HIGHER THAN THE CONSIDERATION SHOWN AS ACTUALLY PAID IN THE REGISTERED DEED OF SALE. THE DIFFERENCE AMOUNT OF THE PLOTS REGISTERED IN THE ASSESSMENT YEAR 2006 - 07 WAS RS. 6 ,52,10,2 09 IN ASSESSMENT YEAR ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 69 2008 - 09 WAS RS. 1,91,00,780 AND IN THE ASSESSMENT YEAR 2010 - 11 WAS RS. 73,30,069 . THE SELLER CLAIMED TO HAVE RECEIVED ACTUALLY THE AMOUNT MENTIONED IN THE AGREEMENT FOR SALE AND NOT MERELY THE AMOUNT WHICH WAS MENTIONED IN THE REGISTERED DEED OF SALE. ON THE BASIS OF THE ABOVE SEIZED AGREEMENT OF SALE AND STATEMENT OF SHRI SOMABHAI AMBALAL PRAJAPATI AND SHRI PANKAJ S PRAJAPATI , THE AO INFERRED THAT THE ASSESSEE BEING THE ULTIMATE PURCHASER OF THE PLOTS OF LAND, MUST HAVE PAID T HE PRICE WHICH WAS MENTIONED IN THE AGREEMENT OF SALE. 12. THEREFORE, THE AO ADDED THE DIFFERENCE AMOUNT IN THE YEAR IN WHICH THE PLOTS WERE PURCHASED BY THE ASSESSEE BY REGISTERED DEED BY ASSUMING THAT THE DIFFERENCE AMOUNT OF THE AGREEMENT AMOUNT AND R EGISTERD DEED AMOUNT MUST HAVE BEEN PAID BY THE ASSESSEE IN THE YEAR IN WHICH REGISTERED DEED WAS EXECUTED IN HIS FAVOUR. THUS, ADDITION OF RS. 6,52,10,209 WAS MADE IN THE ASSESSMENT YEAR 2006 - 07, RS. 1,91,00,780 WAS MADE IN ASSESSMENT YEAR 2008 - 09 A ND R S. 73,30,069 WAS MADE IN THE ASSESSMENT YEAR 2010 - 11 IN THE HANDS OF THE ASSESSEE U/S. 69 OF THE ACT BEING UNDISCLOSED INVESTMENTS. 13. ON APPEAL, CIT[A] DELETED THE ABOVE ADDITION ON THE GROUND THAT THE SEIZED AGREEMENT OF SALE WAS EXECUTED BETWEEN THE SELLER AN SHRI VIVEK PATEL , AND NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE ACTUALLY PAID AMOUNT IN QUESTION DURING THE FY PRECEEDING THE ASSESSMENT YEARS UNDER CONSIDERATION. 1 4 . BEFORE US, THE DR SUPPORTED THE ORDER OF THE AO AND THE AR SUPPORTED THE ORDER OF THE CIT[A]. 1 5 . WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS NOT A PARTY T O THE SEIZED AGREEMENT OF SALE [BANACHITTI] WHICH WAS THE BASIS OF MAKING THE ENTIRE ADDITION. WE FIND THAT IT IS NOT IN DISPUTE THAT THE SA ID AGREEMENT OF SALE DOES NOT BEAR THE SIGNATURE OF THE ASSESSEE. FURTHER, ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 70 WE FIND THAT NOWHERE IN THE STATEMENT RECORDED OF SELLERS, SELLERS HAVE STATED THAT THEY HAVE RECEIVED ANY MONEY FROM THE ASSESSEE WHICH WAS MORE THAN THE AMOUNT THEY ACKNOWLEDGED T O HAVE RECEIVED FROM THE ASSESS EE IN RESPECT OF SALE OF LAND IN QUESTION FROM THE ASSESSEE. THE SELLERS IN THEIR STATEMENTS HAVE CLAIMED THAT THEY RECEIVED THE MONEY FROM SHRI VIVEK PATEL ONLY AND NOT FROM THE ASSESSEE. THE REVENUE COULD NOT BRING ANY MATE RIAL ON RECORD, AFTER MAKING INQUIRY WITH SAID SHRI VIVEK PATEL TO SHOW THAT THE ASSESSEE PAID ACTUALLY ANY AMOUNT MORE THAN THE AMOUNT STATED IN THE REGISTERED DEED OF SALE. IN ABSENCE OF ANY SUCH MATERIAL, THE ADDITIONS WERE MADE ONLY ON THE BASIS OF ASS UMPTIONS AND PRESUMPTIONS. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE FINDINGS OF THE CIT[A]. THEREFORE, ALL THE 3 APPEALS FILED BY THE REVENUE ARE DISMISSED. 1 6 . IN THE CROSS OBJECTIONS THE ASSESSEE CHALLENGED THE V ALIDITY OF ISSUANCE OF NOTICE U/S 148 OF THE ACT AND THE VALIDITY OF THE IMPUGNED RE - ASSESSMENT ORDER PASSED IN PURSUANCE TO THE SAME. 17. AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE CONTENDED THAT THE IMPUGNED ORDER BEING PASSED WITHO UT COMMUNICATING THE FACT OF OBJECTION RAISED BY HIM AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT AND THEREFORE, THE IMPUGNED ORDER OF RE - ASSESSMENT IS LIABLE TO BE QUASHED ON THIS GROUND ALSO. THE AR OF THE ASSESSEE RELIED UPON THE ORDER OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD V. DCIT, [2013] 354 ITR 0244. 18. ON THE OTHER HAND, THE DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 19. WE FIND THAT , IN THE INSTANT CASE , IT IS NOT IN DISPUTE THAT THE ASSESSEE IN HIS OBJECTION AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT VIDE HIS LETTER DATED 24.12.2011 WHICH WAS RECEIVED BY THE ASSESSING ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 71 OFFICER ON 26.12.2011. THEREAFTER, THE ASSESSING OFFICER PASSED THE IMPUGNED ORDER OF RE - ASSESSMENT ON 25.03.2013. NO MATERIAL COULD BE BROUGHT BEFORE US TO SHOW THAT THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 WAS DISPOSED OFF BY THE ASSESSING OFFICER BY PASSING A SPEAKING ORDER THEREON AND ALLOWING REASONABLE TIME TO THE ASSESSEE AFTER C OMMUNICATING THE FATE OF THE OBJECTIONS BEFORE PROCEEDING WITH THE RE - ASSESSMENT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD V. DCIT (SUPRA) HAS HELD AS UNDER: - FROM THE AFORESAID DISCUSSION, WE ARE OF THE CONSIDERED OPINI ON THAT THE WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA IS MAINTAINABLE WHERE NO ORDER HAS BEEN PASSED BY THE ASSESSING OFFICER DECIDING THE OBJECTION FILED BY THE ASSESSEE UNDER SECTION 148 OF THE ACT AND ASSESSMENT ORDER HAS BEEN PASSED OR THE ORDER DECIDING AN OBJECTION UNDER SECTION 148 OF THE ACT HAS NOT BEEN COMMUNICATED TO THE ASSESSEE AND ASSESSMENT ORDER HAS BEEN PASSED OR THE OBJECTION FILED UNDER SECTION 148 HAS BEEN DECIDED ALONG WITH THE ASSESSMENT ORDER . IF THE OBJECTION UNDER SECTION 148 HAS BEEN REJECTED WITHOUT THERE BEING ANY TANGIBLE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO FORM AN OPINION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT AND IN THE ABSENCE OF REASONS HAVING DIRECT LINK WITH THE FORMATION OF THE B ELIEF, THE WRIT COURT UNDER ARTICLE 226 CAN QUASH THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE WRIT PETITION FILED BY THE PETITIONER IS MAINTAINABLE. THE ASSESSING OFFICER IS MANDATED TO DECIDE THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND SUPP LY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS AN OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFTER, THE ASSESSING OFFICER MAY PASS THE REASSESSMENT ORDER. WE HOLD THAT IT WAS NOT OPEN TO THE ASSESSING OFFICER TO DECIDE THE OBJECTI ON TO NOTICE UNDER SECTION 148 BY A COMPOSITE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS REQUIRED TO, FIRST DECIDE THE OBJECTION OF THE ASSESSEE FILED UNDER SECTION 148 AND SERVE A COPY OF THE ORDER ON THE ASSESSEE. AND AFTER GIVING SOME REASONABLE TIME T O THE ASSESSEE FOR CHALLENGING HIS ORDER, IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE ASSESSING OFFICER, THEREFORE, THE ORDER ON THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND THE ASSESSMENT ORDER PASSED UNDER THE ACT DESER VES TO BE QUASHED. ITA NOS. 2367, 2368 & 2 587/AHD/2013 AND C.O. NOS. 39, 40 & 41/AHD/2013 SHRI AJAY SURENDRABHAI PATEL, AHMEDABAD FOR AYS 2006 - 07, 08 - 09 & 10 - 11 72 20. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER OF RE - ASSESSMENT PASSED BY THE ASSESSING OFFICER WITHOUT DISPOSING OFF THE OBJECT IONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 BY A SEPARATE ORDER IS LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY. THUS, THIS GROUND OF CROSS - OBJECTIONS OF THE ASSESSEE IS ALLOWED. 21 . IN THE RESULT, THE APPEALS OF THE REVENUE FOR AYS 2006 - 07, 2008 - 09 AND 2010 - 11 ARE DISMISSED, WHILE THE CROSS OBJECTIONS FILED BY THE ASSESSEE FOR AYS 2006 - 07 , 2008 - 09 AND 2010 - 11 ARE ALLOWED . ORDER PRONOUNCED IN THE COURT ON FRIDAY , THE 9 TH OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - (MUKUL KR . SHRAWAT) JUDICIAL MEMBER (N. S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 09 / 01 /201 5 GHANSHYAM MAURYA. / BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD