Anthiah Pancras, Tiruvannamalai V. ITO Ward 1, Thiruvannamalai

ITA 28/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6554 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R ANITHA
• Assessee Lawyers: D RAJASEKARAN IRSRETD
• Keywords: Unexplained cash credit; Unexplained investment; Capital asset; Opportunity of being heard; Principle of natural justice; Source of fund; Cost of acquisition; Difference of opinion; Change of opinion; Capital Gains
• Section: 143(3); 2(14); 133A; 250; 139(1); 139(4); 147; 131; 68; 69; 148; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ' , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ ITA NOS.27 & 28/CHNY/2017 ( ( /ASSESSMENT YEARS: 2008-09 & 2009-10 SHRI ANTHIAH PANCRAS, RAMANA MAHARISHI LOYOLA ACADEMY BUILDING, AYYANPALAYAM, NATIONAL HIGHWAYS ROAD, TIRUVANNAMALAI-606 603. [PAN: ASJPP 4900 H] V. THE INCOME TAX OFFICER, WARD-1, THIRUVANNAMALAI, AT.2, BARRACKS CROSS, OFFICERS LINE, VELLORE-632 001. ( + /APPELLANT) ( ,-+ /RESPONDENT) + . / APPELLANT BY : MR.D.RAJASEKARAN, IRS(RETD.) ,-+ . /RESPONDENT BY : MS.R.ANITHA, JCIT . /DATE OF HEARING : 09.09.2019 . /DATE OF PRONOUNCEMENT : 21.10.2019 / O R D E R PER RAMIT KOCHAR , ACCOUNTANT MEMBER : BOTH THESE APPEALS ARE FILED BY ASSESSEE, BEING ITA NOS. 27 & 28/CHNY/2017 WHICH ARE DIRECTED AGAINST SEPARATE A PPELLATE ORDER(S) IN ITA NO. 18/CIT(A)-13/208-09 AND ITA NO. 17/CIT(A)-1 3/2009-10 BOTH DATED 11 TH NOVEMBER, 2016 , PASSED BY LEARNED COMMISSIONER O F INCOME TAX (APPEALS)-13, CHENNAI (HEREINAFTER CALLED THE LD.CIT(A)), FOR ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY , T HE APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) AGAINS T SEPARATE ITA NOS.27 & 28/CHNY/2017 :- 2 -: ASSESSMENT ORDER(S) DATED 31.03.2016 AND 28.03.2016 RESPECTIVELY PASSED BY LEARNED ASSESSING OFFICER(HEREINAFTER CAL LED THE AO ) BOTH U/S. 143(3) READ WITH SECTION 148 OF THE INCOME-TAX ACT ,1961 (HEREINAFTER CALLED THE ACT) FOR AY: 2008-09 AND 2009-10 RESPE CTIVELY . 2. THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN MEM O OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, CHENNAI (HE REINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- AY: 2008-09: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS-13, CHENNAI IS OPPOSED TO LAW AND FACTS. 2. THE LEARNED C.I.T (A) ERRED IN NOT ACCEPTING THE APPELLANT'S SUBMISSION THAT LAND SOLD BY HIM WAS AGRICULTURAL IN NATURE AND THE CAPITAL GAIN ON ITS SALE WAS EXEMPT UNDER SECTION 10 (37) (I) OF THE I.T. ACT IN AS MUCH AS THE LAND WAS NOT SITUATED IN AN AREA REFERRED TO IN ITEM (A) OF SUB CLAUSE (III) OF CLAUSE (14) OF SECT ION 2 OF THE ACT. 3. THE LEARNED C.I.T. (A) ERRED IN NOT ACCEPTING TH E APPELLANT'S SUBMISSION THAT THE AREA IN WHICH THE LAND WAS SITUATED HAD NOT BEEN NOTIFIED B Y THE CENTRAL GOVERNMENT AS AN URBAN AREA UNDER CLAUSE (B) OF CLAUSE SECTION 2 (14) AND FOR THAT REASON ALSO DID NOT FALL WITHIN THE CATEGORY OF 'CAPITAL ASSET'. 4. THE LEARNED C.I.T. (A) ERRED IN NOT ACCEPTING TH E APPELLANT'S SUBMISSION THAT THE LAND WAS SOLD FOR RS.1,91,50,575/- AS PER THE AGREEMENT DATED 7.1.2008 AND THAT THE SALE PROCEEDS TOGETHER WITH CONSIDERATION OF RS.17,99,42 5/- FOR STANDING CROPS WERE DEPOSITED INTO THE BANK ACCOUNT AS AND WHEN THE INSTALLMENTS OF PAYMENTS WERE RECEIVED FROM THE BUYERS. (PART PAYMENT OF RS.82,00,000/- IN THE ACCO UNTING PERIOD RELEVANT FOR ASST. YR 2008-09 AND BALANCE OF RS.1,27,50,000/- IN ACCOUNTI NG PERIOD RELEVANT FOR ASST. YR 2009- 10). 5. THE LEARNED C.I.T (A) ERRED IN CONCURRING WITH T HE VIEW OF THE ASSESSING OFFICER THAT THE AGREEMENT HAD NO EVIDENTIARY VALUE AS IT HAD NOT BE EN REGISTERED. 6. THE CIT (A) ERRED IN NOT RECOGNIZING THE WELL KNO WN FACT THAT GUIDELINE VALUES ARE DIFFERENT FROM MARKET VALUES AND AT TIMES THEY VARI ED WIDELY. IN PARTICULAR HE FAILED TO RECOGNIZE THAT IN THIS CASE THE REGISTRATION HAD BEE N GOT DONE FOR THE GUIDELINE VALUE WHICH WAS MUCH LOWER THAN ITS MARKET VALUE. 7. THE CIT(A) FAILED TO SEE THAT IT WAS ILLOGICAL O N THE PART OF THE ASSESSING OFFICER TO HAVE BROUGHT TO ASSESSMENT THE CAPITAL GAIN ON THE SALE OF THE LAND (COMPUTED WITH REFERENCE TO THE CONSIDERATION STATED IN THE REGISTERED DOCUMENT ) IN THE ASST. YEAR 2008-09 WHEN THE SALE DEED WAS REGISTERED ON 11.09.2008 RELEVANT FOR THE ASSESSMENT YEAR 2009-10. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED WITH LEAVE OF THE HONOURABLE TRIBUNAL IT IS SUBMITTED THAT THE APPELLATE ORDER MAY BE CANCELLED AS NOT RENDERING ANY JUSTICE, ITA NOS.27 & 28/CHNY/2017 :- 3 -: AY: 2009-10: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS-13, CHENNAI IS OPPOSED TO LAW AND FACTS. 2. THE LEARNED C.I.T (A) ERRED IN NOT ACCEPTING THE APPELLANT'S SUBMISSION THAT LAND SOLD BY HIM WAS AGRICULTURAL IN NATURE AND THE CAPITAL GAIN ON ITS SALE WAS EXEMPT UNDER SECTION 10 (37) (I) OF THE L.T. ACT IN AS MUCH AS THE LAND WAS NOT SITUATED IN AN AREA REFERRED TO IN ITEM (A) OF SUB CLAUSE (III) OF CLAUSE (14) OF SECTION 2 OF THE ACT. 3. THE LEARNED C.I.T. (A) ERRED IN NOT ACCEPTING TH E APPELLANT'S SUBMISSION THAT THE AREA IN WHICH THE LAND WAS SITUATED HAD NOT BEEN NOTIFIED B Y THE CENTRAL GOVERNMENT AS AN URBAN AREA UNDER CLAUSE (B) OF CLAUSE SECTION 2 (14) AND FOR THAT REASON ALSO DID NOT FALL WITHIN THE CATEGORY OF 'CAPITAL ASSET'. 4. THE LEARNED C.I.T. (A) ERRED IN NOT ACCEPTING TH E APPELLANT'S SUBMISSION THAT THE LAND WAS SOLD FOR RS.1,91,50,575/- AS PER THE AGREEMENT DATED 7.1.2008 AND THAT THE SALE PROCEEDS TOGETHER WITH CONSIDERATION OF RS.17,99,42 5/- FOR STANDING CROPS WERE DEPOSITED INTO THE BANK ACCOUNT AS AND WHEN THE INSTALLMENTS OF PAYMENTS WERE RECEIVED FROM THE BUYERS. (PART PAYMENT OF RS. 82,00,000 RECEIVED IN THE ACCOUNTING PERIOD RELEVANT FOR ASST. YR 2008-09 AND BALANCE OF RS.1,27,50,000/- RECEIVED IN ACCOUNTING PERIOD RELEVANT FOR ASST. YR 2009-10). 5. THE LEARNED C.I.T (A) ERRED IN CONCURRING WITH THE VIEW OF THE ASSESSING OFFICER THAT THE AGREEMENT HAD NO EVIDENTIARY VALUE AS IT HAD NOT BE EN REGISTERED. 6. THE CIT (A) ERRED IN NOT RECOGNIZING THE WELL KNO WN FACT THAT GUIDELINE VALUES ARE DIFFERENT FROM MARKET VALUES AND AT TIMES THEY VARI ED WIDELY. IN PARTICULAR HE FAILED TO RECOGNIZE THAT IN THIS CASE THE REGISTRATION HAD BEE N GOT DONE FOR THE GUIDELINE VALUE WHICH WAS MUCH LOWER THAN ITS MARKET VALUE. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED WITH LEAVE OF THE HONOURABLE TRIBUNAL IT IS SUBMITTED THAT THE APPELLATE ORDER MAY BE CANCELLED AS NOT RENDERING ANY JUSTICE. 2.2 THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS OF APPEALS FOR AY: 2009-10 , WHICH READS AS UNDER: 1. THE LEARNED CIT(A) ERRED IN NOT OBSERVING THAT THE ASSESSING OFFICER HAD ADMITTEDLY ISSUED THE 148 NOTICE MERELY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION DIRECTO RATE AND NOT ON THE BASIS OF ANY RECORDED SATISFACTION OF HIS OWN IN DICATING THAT INCOME HAD ESCAPED ASSESSMENT AND IN SUCH CIRCUMSTANCES TH E 148 NOTICE WAS NOT LEGALLY VALID. 2. THE LEARNED CIT ERRED IN NOT EXAMINING WITH REFEREN CE TO THE RECORDS WHETHER THE PRINCIPAL C.I.T. HAD IN FACT GIVEN HIS APPROVAL FOR THE ISSUE OF 148 NOTICE AND IF APPROVAL GIVEN WHETHER SUCH AP PROVAL WAS GIVEN AFTER RECORDING HIS OWN SATISFACTION ABOUT ANY ESCA PEMENT OF INCOME TO TAX. 3.THESE ARE TWO APPEALS FILED BY THE ASSESSEE FOR A YS: 2008-09 & 2009- 10 RESPECTIVELY. FIRST WE SHALL TAKE UP ASSESSEES APPEAL FOR AY: 2008-09. THE AO RECEIVED INFORMATION FROM INVESTIGATION DIRE CTORATE, CHENNAI TO ITA NOS.27 & 28/CHNY/2017 :- 4 -: EXAMINE SOURCES FOR CASH DEPOSITS APPEARING IN ASSE SSEES SAVING BANK ACCOUNT NO.177901000001600 MAINTAINED WITH INDIAN O VERSEAS BANK, GIRIVALAM ROAD, TIRUVANNAMALAI(IOB) FOR THE PERIOD FROM OCTOBER, 2007 TO FEBRUARY, 2015, WHICH LED AO TO ISSUE NOTICE TO THE ASSESSEE U/S.148 OF THE 1961 ACT , DATED 27.03.2015 FOR AY: 2008-09 , W HICH WAS ADMITTEDLY ISSUED BEYOND FOUR YEARS FROM THE END OF ASSESSMENT YEAR BUT WITHIN SIX YEARS FROM THE END OF THE ASSESSMENT YEAR. THE ASS ESSEE ORIGINALLY DID NOT FILE HIS RETURN OF INCOME FOR AY: 2008-09 WITH REVENUE BUT ON 31.03.2015, THE ASSESSEE FURNISHED HIS RETURN OF IN COME IN PURSUANCE TO THE AFORESAID NOTICE U/S. 148 OF THE ACT , DATED 27 .03.2015 FOR AY: 2008- 09 ADMITTING NIL INCOME. 3.2 THE ASSESSEE HAD CLAIMED THAT IT HAD ENTERED IN TO AN AGREEMENT TO SELL DATED 07.01.2008 WITH SHRI S.D.SETTU & SHRI PA LANI (BOTH PROSPECTIVE PURCHASERS) WHICH WAS DULY WITNESSED BY THREE INDEP ENDENT WITNESSES FOR SALE OF ACRE 25.36-AND-HALF CENTS OF LAND TO AFORES AID PURCHASERS FOR UNDERTAKING REAL ESTATE BUSINESS FOR AN AGREED CONS IDERATION OF RS.1,91,50,575/-. THE ASSESSEE HAD CLAIMED THAT HE WAS PAID A SUM OF RS.50 LAKHS AS ADVANCE IN CASH. THE ASSESSEE CLAIM ED THAT IT WAS AGREED THAT BALANCE PAYMENT OF RS.1,41,50,575/- WAS TO BE PAID WITHIN SIX MONTHS. THE ASSESSEE ALSO CLAIMED THAT IT HANDED O VER POSSESSION OF THE ABOVE SAID LAND TO THE PURCHASERS. THE ASSESSEE CL AIMED THAT LATER THE SALE BECAME ABSOLUTE AS EVIDENCED BY COPIES OF SEV EN SALE DEEDS ALL DATED 11.09.2008 NUMBERED AS 9446 OF 2008 TO 9451 O F 2008 AND 9418 OF 2008 , WITH AGGREGATE SALE VALUE OF RS.23,34,900 /- FOR THE AFORESAID ITA NOS.27 & 28/CHNY/2017 :- 5 -: LAND. WHEN THE ASSESSEE APPEARED BEFORE THE AO ON 0 7.08.2015, A SWORN STATEMENT OF THE ASSESSEE WAS RECORDED BY THE AO AN D BASED ON AVERMENTS MADE , A SURVEY U/S.133A WAS CONDUCTED IN THE CASES OF SHRI S.D.SETTU & SHRI PALANI ON 22.09.2015 , WHO WERE PU RCHASERS OF AFORESAID LANDS FROM THE ASSESSEE. THE SAID SURVEY WAS CONDU CTED BY ITO, WARD-1, VELLORE AND ITO, WARD-2, TIRUVANNAMALAI RESPECTIVEL Y. CONSEQUENT TO SURVEY U/S.133A IN THE CASES OF SHRI S.D.SETTU & SH RI PALANI, IN ORDER TO HAVE CORROBORATIVE FACTS, PROCEEDINGS OF THE CHIEF EXAMINATION OF THE ASSESSEE AND HIS CROSS-EXAMINATION OF SHRI S.D.SETT U & SHRI PALANI WERE CONDUCTED ON 17.02.2016 . THE ASSESSEE HAD CLAIMED THAT HE ENTERED INTO AN AGREEMENT TO SELL DATED 07.01.2008, WHEREIN HE AGREED TO SELL HIS LAND ADMEASURING ACRE 25.36 AND HALF CENTS OF LAND , FOR A TOTAL CONSIDERATION OF RS.1,91,50,575/-. THE ASSESSEE CL AIMED THAT IT RECEIVED ` 50 LACS IN CASH AS ADVANCE AT THE TIME OF ENTERING INTO AN AGREEMENT TO SELL OF HIS LAND FROM THE PURCHASERS ON 07.01.2008. THE ASSESSEE CLAIMED THAT OUT OF AFORESAID ADVANCE OF ` 50 LACS RECEIVED AS CASH ON 07.01.2008, THE ASSESSEE DEPOSITED RS.45 LAKHS IN CASH WITH IOB , GIRIVALAM ROAD, TIRUVANNAMALAI ON 08.01.2008 WHILE BALANCE AMOUNT O F RS.5 LAKHS OF CASH WAS RETAINED BY THE ASSESSEE WHICH WAS DEPOSITED SU BSEQUENTLY WITH THE SAME BANK. THE ASSESSEE ALSO CLAIMED THAT FOLLOWIN G AMOUNTS IN CASH AGGREGATING TO RS.1,59,00,000/- WERE ALSO DEPOSITED WITH THE SAME BANK ACCOUNT WITH IOB ON VARIOUS DATES AS MENTIONED BELO W: DATE OF RECEIPT AMOUNT (RS.) 04.03.2008 25,00,000 15.03.2008 7,00,000 ITA NOS.27 & 28/CHNY/2017 :- 6 -: 24.07.2008 50,00,000 02.08.2008 20,00,000 05.09.2008 15,00,000 11.09.2008 10,00,000 11.09.2008 22,00,000 27.09.2008 10,00,000 TOTAL 1,59,00,000 3.3 IT IS CLAIMED THAT THE SAID SUM DEPOSITED WITH THE IOB REPRESENTS BALANCE CONSIDERATION OF ` 1,41,50,575/- OUT OF TOTAL SALE CONSIDERATION OF ` 1,91,50,575/- , FURTHER A SUM OF ` 13,09,425/- WAS STATED TO BE RECEIVED BY ASSESSEE IN CASH TOWARDS CONSIDERATION FOR STAND ING CROP ON THE SAID LAND AT THE TIME OF TRANSFER OF LAND. IT WAS CLAIME D THAT AN AMOUNT OF ` 5,00,000/- WHICH WAS ORIGINALLY RETAINED BY ASSESSE E OUT OF ADVANCE OF ` 50,00,000/- RECEIVED ON 07.01.2008 WAS DEPOSITED IN BANK ACCOUNT WITH IOB. THE AGREEMENT TO SELL DATED 07.01.2008 WAS PR ODUCED BY ASSESSEE IN ORIGINAL BEFORE AO AS CONTEMPORANEOUS EVIDENCE I N SUPPORT OF HIS CLAIM. THE BUYERS SHRI S.D.SETTU & SHRI PALANI ALONG WITH ONE SHRI R.PURUSHOTHAMAN OF VELLORE GOT SALE DEED EXECUTED F ROM ASSESSEE IN THEIR FAVOUR FOR A TOTAL CONSIDERATION OF RS.23,24,900/- ON 11.09.2008 BY WAY OF SEVEN INDEPENDENT SALE DEEDS . THE AO AFTER NOT ICING THE DIFFERENCE TO THE TUNE OF RS.1,68,15,675/- (RS.1,91,50,575/- - RS .23,34,900/-) BETWEEN THE VALUE SHOWN IN AGREEMENT TO SELL AND SA LE DEED, PROPOSED TO MAKE ADDITIONS TO THE INCOME OF THE ASSESSEE AS AN UNEXPLAINED INVESTMENT U/S.69 OF THE ACT , WHEREIN IT WAS PROP OSED BY THE AO TO BRING TO INCOME-TAX AN AMOUNT OF RS.82,00,000/- AS INCOM E OF THE ASSESSEE AS INCOME FROM OTHER SOURCES AS AN UNEXPLAINED CREDIT APPEARING IN BANK ACCOUNT OF THE ASSESSEE FOR AY: 2008-09 , WHILE BA LANCE AMOUNT WAS ITA NOS.27 & 28/CHNY/2017 :- 7 -: PROPOSED BY THE AO TO BE BROUGHT TO INCOME-TAX IN S UBSEQUENT YEAR I.E. AY: 2009-10 WHEN THE SAID AMOUNT WAS FOUND TO BE C REDITED IN BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE ON ITS PART CONTENDED BEFORE THE AO THAT THESE ARE RURAL AGRICULTURAL LAND AND WERE NOT LIABLE FOR INCOME- TAX KEEPING IN VIEW PROVISIONS OF SECTION 2(14)(II I) R.W.S. 10(37) OF THE 1961 ACT AND NO INCOME-TAX IS EXIGIBLE ON THE SAID SUM RECEIVED BY THE ASSESSEE. THE ASSESSEE ALSO CONTENDED THAT SINCE TH E ASSESSEE HAD IDENTIFIED NATURE OF RECEIPT, SOURCE OF FUNDS AND P ERSONS WHO HAD GIVEN THE SAID SUM OF AMOUNT TO THE ASSESSEE, PROVISIONS OF SECTION 69 OF THE 1961 ACT HAS NO APPLICABILITY IN THE INSTANT CASE. 3.4 THE SAID SHRI. S.D.SETTU DURING THE COURSE OF S URVEY CONDUCTED U/S 133A OF THE 1961 ACT ON 22.09.2015 , IN HIS STATEM ENT RECORDED DURING SURVEY OPERATIONS SUBMITTED AS UNDER: 'Q.NO.19: DO YOU KNOW SHRI ANTHIAH PANCRAS AND WHAT IS THE BUSINESS RELATIONSHIP BETWEEN YOU? REPLY OF SHRI S.D.SETTU: I DO NOT KNOW HIM DIRECTLY . MY BUSINESS ASSOCIATE SHRI PALANI OF ARANI INTRODUCED SHRI ANTHIAH PANCRAS THROUGH A BRO KER BY NAME SHRI RASHEED BHAI WHO INDICATED THAT THERE IS PROSPECTIVE SELLER IN ANTHI AH PANCRAS WHO IS THE OWNER OF SOME LANDS. THROUGH RASHEED BHAI MYSELF AND SHRI PALANI PURCHASED 23.36 ACRES OF LANDS IN VELAPADI VILLAGE, ARNI TK ON 11-09-2008 THROUGH SEV EN SEPARATE SALE AGREEMENTS FOR A CONSIDERATION OF RS.23,34,900/-. THIS DID NOT INCLU DE ANY REGISTRATION CHARGES. Q.NO.20: NOW I AM SHOWING YOU A COPY OF THE AGREEME NT TO SELL DATED 07-01-2008 EXECUTED WITH SHRI ANTNIAH PANCRAS ACCORDING TO WHI CH A SUM OF RS.1,91,50,575/- IS STATED TO BE AGREED CONSIDERATION. THIS AGREEMENT BEARS YO UR SIGNATURE AS WELL AS THE SIGNATURE OF SHRI PALANI. PLEASE OFFER YOUR EXPLANATION, REPLY OF SHRI S.D.SETTU: THE AFORESAID LANDS WERE I NITIALLY NEGOTIATED FOR RS.1,10,00,000/- AND A SUM OF RS.25 LAKHS WAS GIVEN AS ADVANCE AND A NOTHER SUM OF RS.25 LAKHS WAS GIVEN- BY THE WAY OF CHEQUE OF ANDHRA BANK, VELLORE. WHEN WE PAID ADVANCE WE DID NOT INSPECT THE LANDS PROPERLY BECAUSE THOSE LANDS WERE SHOWN T O ME AT THE TIME OF SUN-SET AT 7.00 P.M. THEREAFTER WHEN WE SUBSEQUENTLY VISITED THE LA NDS WE FOUND THERE WERE HIGH TENSION ELECTRIC TOWERS AND THE LINES AND LANDS WERE SURROU NDED BY LAKE. THIS APART THERE WAS SRILANKAN REFUGEE CAMP WAS THERE IN THE VICINITY OF LANDS. BEING SHOCKED WITH THESE WE APPROACHED SHRI ANTHIAH PANCRAS AND REQUESTED HIM T O REFUND THE ADVANCE GIVEN. INITIALLY, SHRI ANTHIAH PANCRAS REFUSED TO REFUND THE ADVANCE. THEREAFTER, IN CONSULTATION WITH HIS FRIENDS AND ALSO KEEPING IN VIEW THE DEFICIENCIES E XISTED IN AND AROUND THE LANDS SHRI ITA NOS.27 & 28/CHNY/2017 :- 8 -: ANTHIAH PANCRAS RETURNED THE CHEQUE OF RS.25 LAKHS. THEREAFTER SHRI ANTHIAH PANCRAS EXECUTED ABSOLUTE DEED FOR RS.23,34,000/-TOWARDS SA LE OF 23.36 ACRES OF LANDS. WE HAVE NOT GIVEN ANY EXCESS PAYMENT BEYOND THIS AMOUNT TO HIM. BECAUSE WE HAD NO INCLINATION TO PURCHASE THEM. FURTHERMORE, WE CATEGORICALLY STA TE THAT SHRI ANTHIAH PANCRAS WAS ALSO LEFT WITH NO OTHER ALTERNATIVE EXCEPT TO SELLING US . Q.NO.21. ................ REPLY OF SETTU :...... Q.NO.22: SHRI ANTHIA PANCRAS HAS GIVEN A SWORN STA TEMENT BEFORE THE INCOME TAX DEPT. THAT IN CONNECTION WITH THE AFORESAID SALE TRANSACT IONS HE HAD RECEIVED RS.1.91 CRORES IN THE F.YS. 2007-08 AND 2008-09 AND THE SAME WERE DEP OSITED IN SBI (SIC IOB), THIRUVOODAL BR. THIRUVANNAMALAI. FURTHER, YOU HAD ALSO GIVEN AN THIAH PANCRAS RS.13,09,425/- AS COMPENSATION FOR STANDING CROPS. PLEASE STATE THE S OURCES THROUGH WHICH THESE PAYMENTS WERE MADE. REPLY OF SHRI S.D.SETTU: THE AFORESAID STATEMENT OF SHRI ANTHIAH PANELS IS NOT TRUE. FOR MYSELF, SHRI PALANI AND SHRI PURUSHOTHAMAN WE DID N OT HAVE THE CAPACITY TO THE EXTENT OF RS.2 CRORES FOR BEING PAID TO SHRI ANTHIAH PANCRAS. WE DO NOT HAVE SUFFICIENT FINANCIAL RESOURCES. IN FACT WE HAD GIVEN HIM ONLY RS.23.34 L AKHS. IN THE LAND SO ACQUIRED THERE WERE NO AGRICULTURAL PRODUCE NOR AGRICULTURAL ACTIV ITY WAS CARRIED ON. IT IS INCORRECT TO SUGGEST THAT THE LANDS WERE AGRICULTURAL IN NATURE. OUT OF THE 23.34 ACRES PURCHASED WE INCURRED AN ADDITIONAL EXPENDITURE OF RS.40 LAKHS F OR CONVERTING THE SAME INTO 250 SALEABLE PLOTS. SO FAR, 50 PLOTS HAVE BEEN SOLD AND THE BALA NCE 200 PLOTS REMAINS UNSOLD. FROM THE SAME SITE WE HAD MADE A LAY-OUT OF ADDITIONAL 450 P LOTS AND WE ARE PROPOSING TO SELL THE SAME THROUGH LOTTERY DIP. 3.5 DURING THE COURSE OF SURVEY CONDUCTED BY REVENU E U/S 133A OF THE 1961 ACT ON 22.09.2015, SHRI PALANI CONCURRED WITH THE STATEMENT OF SHRI S.D.SETTU THAT ONE SHRI RASHEED BHAI INTRODUCED THE ASSESSEE TO THEM AND THAT HE PURCHASED 23.36 ACRES LANDS IN 2008 BY AVAILING ` 8 LACS AS LOAN FROM AXIS BANK . HE FURTHER STATED THAT TOTAL INVESTMENT IS AROUND ` 24 LACS WAS MADE FOR PURCHASE OF AFORESAID LAND ALO NG WITH SHRI S.D.SETTU AND SHRI PALANI. 3.6 THE SAID SHRI S.D.SETTU AND SHRI PALANI ADMITTE D TO HAVE PURCHASED THE AFORESAID LAND FOR ` 24 LACS ALONG WITH MR PALANI , BUT DENIED CONSIDERATION OF RS.1,91,50,575/- HAVING BEEN PAID BY THEM FOR PURCHASING THE AFORESAID LAND. SHRI S.D.SETTU DID NOT DENIED THE EXISTENCE ITA NOS.27 & 28/CHNY/2017 :- 9 -: OF AGREEMENT TO SALE DATED 07.01.2008 WHEREIN CONSI DERATION WAS STATED TO BE OF RS 1,91,50,575/- . HE ALSO ADMITTED THAT INITIALLY THEY AGREED FOR CONSIDERATION OF RS.1,10,00,000/- BUT LATER FOUND T HAT HIGH TENSION ELECTRIC TOWERS AND LINES ARE IN THE SAID LAND AND THAT THE SAID LAND IS ALSO SURROUNDED BY LAKE. FURTHER, THEY FOUND THAT SRILA NKAN REFUGEE CAMPS ARE EXISTING IN THE VICINITY OF THE LANDS . IT IS C LAIMED BY BUYERS THAT THESE ADVERSE FACTORS/REASONS GOT THEM TO REDUCE CONSIDE RATION FOR SALE OF LAND TO RS.23.34 LAKHS. SHRI PALANI CONCURRED WITH THE S TATEMENT OF SHRI S.D.SETTU. 3.7 BOTH SHRI S.D.SETTU & SHRI PALANI WERE CROSS-EX AMINED BY ASSESSEE ON 17.02.2016 AND IN CROSS EXAMINATION , SHRI S D S ETTU AGREED WITH THE EXISTENCE OF THE AGREEMENT TO SALE DATED 07.01.2008 , WHICH IS AS UNDER: 7.1 CROSS-EXAMINATION OF ASSESEEE SHRI ANTHIAH PANCRAS ON SHRI S.D.SETTU DATED 17.2.2016: QN. NO.1 BY THE ASSESSEE : DO YOU AGREE WITH THE EX ISTENCE OF AGREEMENT DATED 07-01- 2008 ? REPLY OF SHRI S.D. SETTU: YES. WE BOTH WHO ARE PRES ENT HERE IN RESPONSE TO SUMMONS U/S 131 AGREE WITH THE EXISTENCE OF AGREEMENT TO SELL D ATED 07-01-2008. THIS AGREEMENT BEARS THE SIGNATURES OF MYSELF, MY BUSINESS ASSOCIATE SHR I PALANI AND SHRI ANTHIAH PANCRAS. THIS AGREEMENT WAS WITNESSED AT THE TIME OF EXECUTION BY THREE INDEPENDENT WITNESSES VIZ. 1) SHRI T.ADHIMOOLAM, S/O SHRI THIRUVENGADAM, PERANGIY UR, 2) SHRI R, SETTU ANNAMALAI, S/O SHRI RAJAGOPAT WHO IS NONE OTHER THAN BROTHER OF SH RI PALANI HEREIN PROSPECTIVE PURCHASER AND 3) SHRI A AKBAR, S/O ABDUL RAHMAN, E.B. NAGAR, ARANI, THE FIVE STAMP PAPER WORTH RS.100 WERE PURCHASED BY SHRI R.PALANI, ARANI FROM SHRI E.VELU, STAMP VENDOR, ARANI BEARING 99AA, 829269 REGISTER NO. 302 TO 306. Q.NO.2 BY THE ASSESSEE: WHETHER IT IS A FACT THAT Y OU HAD GIVEN AMOUNT TO ME AS PER THE AGREEMENT DATED 07-01-2008. REPLY OF SHRI S.D. SETTU AS ALREADY STATED IN REPLY TO Q.I9, 20 AND 22 GIVEN IN MY STATEMENT DATED 22-09-2015 1 HAVE NARRATED THE SEQU ENCE OF EVENTS FROM THE SIGNING OF AGREEMENT TILL COMPLETION OF ABSOLUTE SALE. INITIAL LY WE HAVE GIVEN RS.25 LAKHS IN CASH AND ANOTHER 25 LAKHS IN CHEQUE. SUBSEQUENTLY, WE DID NO T SATISFY WITH THE AMBIANCE OF THE LANDS LOCATED WE APPROACHED SHRI ANTHIA PANCRAS AND SOUGHT FOR REFUND OF THE AMOUNT AS PER MY REPLY AT THE TIME OF SURVEY I REITERATE THAT HE RETURNED THE CHEQUE. Q.NO.3 BY THE ASSESSEE: CAN YOU SUBSTANTIATE YOUR C LAIM THAT SHRI ANTHIAH PANCRAS RETURNED THE CHEQUE OF RS.25 LAKHS BY DOCUMENTARY E VIDENCE ITA NOS.27 & 28/CHNY/2017 :- 10 -: REPLY OF SHRI S.D. SETTU: I DO NOT HAVE ANY EVIDENC E TO SUBSTANTIATE THAT THE CHEQUE WAS GIVEN AND CHEQUE WAS RETURNED. HOWEVER, IT IS A FAC T THAT I HAD GIVEN A CHEQUE AND SAME WAS RETURNED TO ME AND THE RELEVANT BANK ACCOUNT CH EQUE LEAVES WERE NOT AVAILABLE WITH ME. Q.NO.4 BY THE ASSESSEE: DO YOU WANT TO SAY THAT THE AGREEMENT DATED 07-01-2008 STOOD CANCELLED IN THE LIGHT OF DEPOSITION DATED 22-09-20 15. REPLY OF SHRI S.D. SETTU: SINCE THE AGREEMENT TO SE LL DATED 07-01-2008 WAS NOT SUBJECTED TO REGISTRATION I HAD NOT CHOSEN TO CANCEL THE AGRE EMENT. IN REAL ESTATE TRADE PRACTICE NORMALLY WE USED TO ENTER INTO NUMBER OF AGREEMENTS AND THOSE AGREEMENTS WOULD REMAIN CANCELLED DUE TO NON PURSUANCE OF THE DEAL. I HEREB Y CONFIRM THAT THERE IS NO EVIDENCE FOR DEVIATION OF CONTRACTUAL AMOUNT FROM ` 1 .91 CR. TO 23.34 LAKHS NOR THAT AGREEMENT DATED 07-01-2008 WAS SUPERSEDED BY SOME OTHER FRESH AGREE MENT, Q.NO.5 BY THE ASSESSEE: I SAY THAT AFTER ENTERING T O AGREEMENT DATED 07-01-2008 AND UPON RECEIPT OF RS.25 LAKHS IN CASH AND RS.25 LAKHS BY WAY OF ANDHRA BANK CHEQUE BEFORE ENTERING TO SEVEN ABSOLUTE SALE DEEDS DATED 11-09-2 008 YOU BOTH HAVE GIVEN ME THE FOLLOWING AMOUNTS. DATE OF RECEIPT AMOUNT (RS.) 04-03-2008 25,00,000 15-03-2008 7,00,000 24-07-2008 50,00,000 02-08-2008 20,00,000 05-09-2008 15,00,000 11-09-2008 10,00,000 11-09-2008 22,00,000 THEREAFTER AFTER CONCLUSION OF SALE ON 11-09-2008 Y OU HAD GIVEN ME RS.10 LAKHS WHICH YOU ENABLED ME TO DEPOSIT THE SAME IN INDIAN OVERSEAS B ANK, GIRIVALAM BR. TIRUVANNAMALAI. FOR THESE PAYMENTS I HAD GIVEN ENDORSEMENT ON THE R EVERSE SIDE OF THE PHOTOCOPY OF THE AGREEMENT WHICH IS IN YOUR POSSESSION. REPLY BY SHRI S.D. SETTU: WE BOTH, S.D.SETTU AND PA LANI CATEGORICALLY DENY THE ABOVE. OTHER THAN RS.25 LAKHS GIVEN ON 07-01-2008 AT THE A GREEMENT STAGE WE AS A BUYERS NEITHER PAID ANY AMOUNTS NOR YOU RECEIVED ANY AMOUN TS FROM US. THEREFORE, QUESTION OF ANY ENDORSEMENT EVIDENCING RECEIPT OF PAYMENT FROM US BY YOU DOES NOT ARISE. Q.NO.6 BY THE ASSESSEE: I WISH TO POINT OUT THAT IN THE SEVEN ABSOLUTE SALE DEEDS THAT RECITALS THEREIN INDICATE THAT YOU HAD PAID RS.23.3 4 LAKHS ON THE DATE OF REGISTRATION THIS SUGGEST YOU HAD PAID ` 23.34 LAKHS TOWARDS THE ENTIRE EXTENT ON 11-09-200 8. IS IT A FACT? REPLY BY SHRI S.D. SETTU: WE CATEGORICALLY DENY HAV ING PAID ANY AMOUNT ON THE DATE OF ABSOLUTE SALE DEED I.E. 11-09-2008 TO YOU. APART FR OM PAYMENT OF RS.25 LAKHS AT THE TIME OF AGREEMENT WE DID NOT PAY ANY AMOUNT. Q.NO.7 BY THE ASSESSEE; AS PER THE AGREEMENT DATED 07-01-2008 AND ALSO SEVEN SALE DEEDS DATED 11-09-20O8 THE ASSETS TRANSFERRED WERE AGRICULTURAL IN NATURE. SIMILARLY, VAO, VELAPADI VILLAGE, ARANI, IN HIS STATEMENT BEFORE IT O ON 12-02-2016 HAS CONFIRMED THAT ON THE DATE OF AGREEMENT THERE WERE AGRICULTURAL LANDS WERE IN EXISTENCE. HOWEVER, IT IS OBSERVED FROM THE STATEMENT U/S 133A ON 22-09-2015 YOU HAVE DEPOSED THAT THE ASSETS SOLD WERE NOT AGRICULTURAL IN NATURE. IN THE STATEM ENT IN REPLY TO QUESTION NO.22 YOU DENIED HAVING PAID ANY AMOUNT TOWARDS COMPENSATION FOR STA NDING CROPS TO THE EXTENT OF RS.13,09,425/- WHICH WAS CLAIMED TO BE RECEIPT BY M E FROM YOU. I SAY THAT YOUR STATEMENT IS INCORRECT AND FALSE. PLEASE EXPLAIN. ITA NOS.27 & 28/CHNY/2017 :- 11 -: REPLY BY SHRI S.D. SETTU: I DENY THE EXISTENCE OF A GRICULTURAL ACTIVITY THEREON. WE DID NOT PAY ANY COMPENSATION AS CLAIMED BY YOU. WHEN WE VIS ITED THE SITE WE DID NOT NOTICE ANY AGRICULTURAL PRODUCE OR ACTIVITY. I STANDBY WHAT I DEPOSED ON THE DATE OF SURVEY U/S 133A. 3.8 THE AO IN ORDER TO VERIFY ASSESSEES CLAIM THAT THE LAND TRANSFERRED WERE AGRICULTURAL LAND SUMMONED SHRI R.DEVARAJ, VIL LAGE ADMINISTRATIVE OFFICER (VAO) , REVENUE DEPARTMENT, GOVERNMENT OF T AMIL NADU, VELAPADI VILLAGE, ARANI TALUK U/S 131 OF THE 1961 ACT, WHO S TATED IN AN STATEMENT RECORDED THAT AGRICULTURAL ACTIVITIES WERE UNDERTAK EN ON THE SAID LAND AT THE TIME OF TRANSFER AND THERE WERE STANDING CROPS OF SUGARCANE, GROUND NUT AND PADDY AND RS.500/- WAS COLLECTED AS LAND RE VENUE. THE LD. VAO STATED THAT THERE WERE THREE SUBMERSIBLE PUMP SETS FOR IRRIGATING THE LANDS. IT WAS STATED BY LEARNED VAO THAT AS PER RE VENUE RECORDS THESE LANDS BEFORE TRANSFER WERE AGRICULTURAL IN NATURE. HE ALSO CONFIRMED THAT VELAPADI VILLAGE IS SITUATED 1KM AWAY FROM ARANI TO WN. IT WAS STATED BY LEARNED VAO THAT VELAPADI VILLAGE IS NOT PART OF TH E ARANI TOWN AND STILL CATEGORIZED AS RURAL AREA, NOT FORMING PART OF ARAN I TOWN FOR ADMINISTRATIVE PURPOSES. THE LEARNED VAO STATED IN ITS STATEMENT THAT SAID BUYERS SHRI S.D. SETTU AND OTHERS AFTER GETTIN G POSSESSION OF THE LAND AFTER REGISTRATION GOT THE SAID LANDS CONVERTED INT O SALEABLE PLOTS FOR REAL ESTATE ACTIVITIES. THE LEARNED VAO STATED THAT AFTE R TRANSFER OF THE SAID LAND, FROM 2008-09 LAND REVENUE AT ` 250 WAS COLLECTIBLE WHICH REMAINED UNPAID. IT WAS STATED BY LD. VAO THAT PRIOR TO TRAN SFER, THESE LANDS WERE FERTILE AGRICULTURAL LAND WITH IRRIGATION FACILITY BUT AFTER TRANSFER, THE BUYERS DEVELOPED THE LAND BY SPREADING MORAMBU SOIL ON T HESE LANDS TO LEVEL THEM AND THESE LANDS WERE RECOGNIZED AS LAY-OUTS BY ARANI PANCHAYAT. IT ITA NOS.27 & 28/CHNY/2017 :- 12 -: WAS CONFIRMED BY LEARNED VAO THAT THERE ARE TWO HIG H TENSION ELECTRIC LINES PASSING THROUGH THE LANDS STANDING ON THE CON CRETE PILLARS ERECTED BY THE E.B. DEPARTMENT. THE LEARNED VAO CONFIRMED THAT THE LANDS WERE REGISTERED FOR GUIDELINE VALUE DETERMINED BY REGIST RATION AUTHORITIES WHICH WAS ` 1 LACS PER ACRE. HE ALSO CONFIRMED BASED ON HIS EN QUIRIES WITH VILLAGERS THAT IN FINANCIAL YEAR 2007-08 , THERE WA S A PRICE MOVEMENT IN THE LAND DUE TO REAL ESTATE ACTIVITY AND THE MARKET PRICES OF GOOD LOCATION LAND COULD BE RS.3 LAKHS PER ACRE. HOWEVER, HE AL SO SUBMITTED THAT THIS LAND COULD NOT FETCH ` 1.91 CRORES AT THAT TIME WHICH AS PER HIM BASED ON HIS ENQUIRIES WITH THE VILLAGERS WERE HIGHLY INFLAT ED PRICE. IT WAS ALSO SUBMITTED BY LEARNED VAO THAT LATER THE BUYERS CONV ERTED THE SAID LAND INTO SALEABLE PLOTS FOR THE REAL ESTATE ACTIVITY. THE ASSESSEE WAS GIVEN COPIES OF THE SWORN STATEMENTS RECORDED OF SHRI S.D .SETTU , PALANI AND THE VAO. 3.9THE ASSESSEE HAD CLAIMED THAT HE SOLD RURAL AGRI CULTURAL LANDS WHICH ARE BEYOND THE PURVIEW OF CAPITAL GAINS TAXATION , KEEPING IN VIEW PROVISIONS OF SECTION 2(14)(III) READ WITH SECTION 10(37) OF THE 1961 ACT AND THE ASSESSEE CLAIMED THAT EVEN PROVISIONS OF SE CTION 68 OF THE 1961 ACT CANNOT BE INVOKED FOR CASH DEPOSITS IN THE BANK ACCOUNT. THE ASSESSEE FILED CERTIFICATE FROM PANCHAYAT OFFICE TO SUPPORT ITS CONTENTION. THE ASSESSEE CONTENDED THAT HE RECEIVED RS.1,91,50, 575/- FROM BUYERS FOR SALE OF ACRE 25.36 AND HALF CENTS OF LAND AT VE LAPADI VILLAGE WHICH IS EVIDENCED BY UNREGISTERED AGREEMENT OF SALE DATED 0 7.01.2008 EXECUTED ITA NOS.27 & 28/CHNY/2017 :- 13 -: BY BUYERS SHRI S.D.SETTU & SHRI PALANI. HE ALSO CO NFIRMED THAT CASH RECEIVED WERE DEPOSITED IN HIS BANK ACCOUNT MAINTAI NED WITH IOB AND IT IS ONLY FOR THE PURPOSES OF REGISTRATION WITH THE REGI STRATION AUTHORITIES, THE SAID BUYERS ALONG WITH SHRI R.PURUSHOTHAMAN, VELLOR E, WITH A VIEW TO EVADE STAMP DUTY AND INCOME-TAX GOT THE SAID LAND T RANSFERRED FOR A NOMINAL CONSIDERATION OF RS.23,24,900/- WHICH WAS T HE GUIDELINE VALUE OF THE SAID LAND. THE ASSESSEE ALSO CONTENDED THAT TH ERE IS A STANDING CROPS OF SUGARCANE, GROUND NUTS AND PADDY GROWN WHEN THE LANDS WERE TRANSFERRED , AND AN EXCESS AMOUNT OVER AND ABOVE A GREED CONSIDERATION OF ` 1.91 CRORES WAS RECEIVED FROM THE BUYERS TOWARDS THE SAID STANDING CROP WHICH WAS DEPOSITED IN HIS BANK ACCOUNT. THE A SSESSEE ALSO CONTENDED BEFORE AO THAT SALE CONSIDERATION WHICH W AS RECEIVED IN CASH WAS DEPOSITED IN HIS BANK ACCOUNT. FURTHER, THE ASS ESSEE CONTENDED THAT STATEMENT OF LEARNED VAO WHICH WAS BASED ON REVENUE RECORDS AND ENQUIRIES MADE FROM LOCAL VILLAGERS IS MORE CREDIB LE. THE ASSESSEE CONTENDED THAT ON-MONEY IS QUITE PREVALENT IN INDIA IN REAL ESTATE TRANSACTIONS AND THERE IS NOTHING NEW ABOUT THE SAM E AND THAT THE AGREEMENT OF SALE DATED 07.01.2008 CLEARLY EVIDENCE S THAT TOTAL CONSIDERATION PAID WAS RS.1,91,50,575/- AND SALE AG REEMENT WERE ENTERED INTO FOR RS.23.34 LAKHS AS PER GUIDELINE VALUE AS P ER REGISTRATION AUTHORITIES WHICH WAS SHOWN BY THE BUYERS IN SALE A GREEMENT TO EVADE INCOME-TAX LIABILITY AND STAMP DUTY. THE ASSESSEE CONTENDED THAT BUYERS HAVE ADMITTED THAT THEY AGREED TO PURCHASE THE LAND FOR RS.1.1 CRS. IN THEIR STATEMENT RECORDED BEFORE THE AO AND THAT THE Y HAVE COME OUT WITH ITA NOS.27 & 28/CHNY/2017 :- 14 -: THEORY OF HIGH TENSION TOWERS AND LINES GOING THRO UGH THE LAND, SRILANKAN REFUGEE CAMP AND LAKE, ETC, TO SHOW THAT THEY GOT T HE LAND AT REDUCED PRICE OF ` 23.34 LACS. IT WAS CONTENDED BY ASSESSEE BEFORE T HE AO THAT NO BUYER WILL PAY CONSIDERATION OF RS.50 LAKHS AT THE TIME OF SIGNING OF THE AGREEMENT WHEN THE TOTAL CONSIDERATION WOULD HAVE B EEN RS.23.34 LAKHS. 3.10 THE AO DISBELIEVED THE CONTENTIONS OF THE ASSE SSEE AND HELD THAT THESE LANDS ARE WITHIN MUNICIPAL LIMITS OF ARANI TO WN AS DEPOSED BY LEARNED VAO, DATED 12.02.2016 . THE AO OBSERVED THA T SHRI S.D.SETTU & SHRI PALANI IN THEIR STATEMENT RECORDED BEFORE AO H AD STATED THAT THE CONSIDERATION FOR LAND TO BE ` 23.34 LACS AND FURTHER VAO HAS STATED IN HIS DEPOSITION BEFORE THE AO ON 12.02.2016 THAT VALUE O F THE LAND COULD BE IN BETWEEN ` 1 LACS TO RS.3 LACS PER ACRE AND IN ANY CASE IT CO ULD NOT BE RS.8 LAKHS PER ACRE AS CLAIMED BY THE ASSESSEE. THE AO O BSERVED THAT DUE TO PASSING OF HIGH TENSION LINES AND POWER CABLES ALON G THE LANDS, THE VALUE OF ` 8 LACS PER ACRE IS EXAGGERATED. FURTHER, IT WAS OB SERVED BY THE AO THAT THIS AGREEMENT OF SALE DATED 07.01.2008 IS AN UNREGISTERED DOCUMENT AND THE STAND OF THE PARTY TO THE SAID AGREEMENT AR E CONTRASTING. THE AO OBSERVED THAT THE SAID AGREEMENT IS NOT ENFORCEABLE AND DOES NOT HAVE BINDING NATURE BETWEEN THE PARTIES TO THE AGREEMENT . THE AO OBSERVED THAT UNREGISTERED AGREEMENTS CAN BE GIVEN DUE WEIGH TAGE ONLY IF BOTH THE PARTIES CONFIRM THE DEALING ON ENQUIRY OR CLINCHING EVIDENCES RELATING TO PAYMENTS ARE BROUGHT ON RECORD. THE AO OBSERVED THA T EVIDENCES ON RECORD AND ENQUIRIES REVEALED THAT ASSESSEE COULD N OT HAVE RECEIVED HUGE ITA NOS.27 & 28/CHNY/2017 :- 15 -: CONSIDERATION AS MENTIONED IN THE AGREEMENT. AS PER AO , SINCE PARTIES ARE GIVING CONFLICTING VERSION, THIS UNREGISTERED A GREEMENT TO SALE DATED 07.01.2008 LOSES EVIDENTIARY VALUE. THE AO ALSO OB SERVED THAT THERE IS NO EVIDENCE ON RECORD TO PROVE THAT ASSESSEE RECEIVED CASH WHICH WAS DEPOSITED IN BANK FROM THE BUYERS OF THE SAID LAND. THE AO ALSO OBSERVED THAT THIS UNREGISTERED SALE AGREEMENT DOES NOT CONT AIN ANY ENDORSEMENT RELATING TO THE PAYMENT OF CASH MADE/RECEIVED BY RE SPECTIVE PARTIES. THE AO OBSERVED THAT ASSESSEE HAD FAILED TO EXPLAIN SOU RCES OF AMOUNT DEPOSITED IN BANK ACCOUNT AND SINCE SOURCES ARE NOT EXPLAINED WITH EVIDENCES , THESE CASH DEPOSITS ARE TREATED AS AN U NEXPLAINED INVESTMENTS U/S.69 OF THE 1961 ACT. THE AO ALSO REJECTED CONTEN TIONS OF THE ASSESSEE THAT GAINS ARISING FROM SALE OF THESE LANDS BY THE ASSESSEE WERE EXEMPT UNDER PROVISIONS OF THE 1961 ACT BECAUSE THE LAND W AS RURAL AGRICULTURAL LAND NOT LIABLE TO TAX U/S 2(14)(III) READ WITH SEC TION 10(37) OF THE 1961 ACT. THE AO BASED ON THE ENQUIRY WITH THE OFFICE OF SRO, ARANI ADOPTED GUIDELINE VALUE FOR THESE LANDS AT ` 40,000/- PER ACRE IN FINANCIAL YEAR 2000-01, VIDE ASSESSMENT ORDER DATED 31.03.2016 PAS SED BY AO U/S. 143(3) READ WITH SECTION 148 OF THE 1961 ACT. 4.AGGRIEVED BY AN AFORESAID ASSESSMENT FRAMED BY A O, THE ASSESSEE FILED FIRST APPEAL WITH LD.CIT(A) WHO AFTER CONSIDERING S UBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESSEE VIDE APPELLATE ORDER DATED 11.11.2016 BY HOLDING AS UNDER:- ITA NOS.27 & 28/CHNY/2017 :- 16 -: 1 HAVE GIVEN CAREFUL CONSIDERATION TO THE FINDINGS GIVEN BY THE AO IN THE ASSESSMENT ORDER AND THE APPELLANT'S SUBMISSIONS MADE DURING THE ASS ESSMENT PROCEEDINGS, DURING THE APPEAL PROCEEDINGS AND ACCORDINGLY THE ISSUE IS ADJ UDICATED AS UNDER; THE SALE AGREEMENT DT.7.1.2008 IS AN UNREGISTERED D OCUMENT AND STAND ON THE PARTIES TO THE SALE AGREEMENT ARE CONTRASTING. MOREOVER, SUCH SALE AGREEMENT IS NOT ENFORCEABLE AND DOES NOT HAVE BINDING NATURE BETWEEN THE PARTIES TO THE AGREEMENT. DUE WEIGHTAGE TO THE SALE AGREEMENT CAN ONLY BE GIVEN EVEN IF IT IS UNRE GISTERED SALE AGREEMENT PROVIDED CONTRACTING PARTIES CONFIRM THE SALE AGREEMENT. IN THE INSTANT CASE, THE CONTRACTING PARTIES DO NOT SEE EYE TO EYE REGARDING THE TERMS OF AGREEM ENT AND THEREFORE, THE SALE AGREEMENT LOSES ITS EVIDENTIARY VALUE. ACCORDINGLY, THE CLAIM OF THE APPELLANT THAT THE PAYMENTS ARE RECEIVED ON VARIOUS DATES CORRESPONDING WITH THE DE POSITS MADE IN 1OB, TIRUVANNAMALAI IS NOT SUPPORTED BY ANY EVIDENCE. MOREOVER, THE UNREGI STERED SALE AGREEMENT DOES NOT CONTAIN ANY ENDORSEMENT RELATING TO PAYMENT OF CASH MADE/RECEIVED BY THE RESPECTIVE PARTIES. THUS, RELYING ON THE VERSION OF VAO REGARDING THE F AIR MARKET VALUE OF THE LAND AND AS PER VAO THE LAND TRANSACTION IN THE PARTICULAR AREA HAS DEPOSED ABOUT THE ASSESSEE'S LAND WHICH CAN FETCH RS.3 LAKHS PER ACRE. VAO HAS ALSO S TATED THAT THE LAND COULD NOT HAVE BEEN SOLD FOR HIGHER PRICE AT RS.8 LAKHS PER ACRE. ACCOR DINGLY, IN ABSENCE OF ANY DOCUMENTARY EVIDENCE RELATING TO PAYMENT, THE ASSUMPTION CANNOT BE DRAWN THAT ASSESSEE WOULD HAVE SOLD LAND MEASURING 23.5 ACRES AT RS.8 LAKHS PER AC RE. THEREFORE, THE CASH DEPOSITS IN ASSESSEE'S IOB ACCO UNT IN NO. 177901000001600 CANNOT BE CONSIDERED AS SOURCED FROM SALE OF LAND. HENCE REMA INS UNEXPLAINED. THE CASH DEPOSITS ARE UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. ACCORDIN GLY, THE ACTION OF THE AO CONSIDERING THE DEPOSITS DATED 07.01.2008 FOR RS.50,00,000/- 04 .03.2008 FOR RS.25,00,000/-, 15.03.2008 FOR RS.7,00,000/-. THUS, TOTAL O F RS.82,00,000/-, THE AO HAS CONSIDERED RS.23,34,900/- AS FULL VALUE CONSIDERATION LIABLE TO LTCG AS DISCUSSED ABOVE. THE BALANCE AMOUNT OF RS.58,65,100/- IS TREATED AS UN EXPLAINED INVESTMENT U/S 69 OF THE ACT FOR FY 2007-08. THE ACTION OF THE AO IS ACCORDINGLY CONFIRMED ON THIS ISSUE AND THE APPELLANT'S GROUND IS DISMISSED. 5.AGGRIEVED BY APPELLATE ORDER DATED 11.11.2016 PAS SED BY LD.CIT(A), THE ASSESSEE HAS FILED THIS APPEAL BEFORE TRIBUNAL . THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE ASSESSEE SOLD HIS RURAL AGRICULTURAL LAND AT VELAPADI VILLAGE, ARNI CIRCLE, THIRUVANAMMAL DISTRI CT FOR A TOTAL CONSIDERATION OF ` 1.91 CRORES AND AMOUNT WAS RECEIVED IN CASH FROM T HE BUYERS WHICH STOOD DEPOSITED IN HIS BANK ACCOUNT MA INTAINED WITH IOB. IT WAS SUBMITTED THAT ASSESSEE IS A CHRISTIAN PRIEST A ND UTILIZED THE SALE PROCEEDS FOR PURPOSE OF CONSTRUCTING SCHOOL. IT WA S EXPLAINED THAT THERE WAS AN AGREEMENT TO SALE DATED 07.01.2008 ENTERED I NTO BY ASSESSEE WITH SHRI.D.SETTU & SHRI R. PALANI FOR SELLING THESE LAN D FOR A TOTAL CONSIDERATION OF RS.1,91,50,575/- WITH TOTAL AREA OF AROUND 25 AC RES AND 36 CENTS OF ITA NOS.27 & 28/CHNY/2017 :- 17 -: RURAL AGRICULTURAL LAND. IT WAS EXPLAINED BY LEARNE D COUNSEL FOR THE ASSESSEE THAT SAID AGRICULTURAL LAND WAS PURCHASED BY BUYERS FOR THE PURPOSES OF REAL ESTATE DEVELOPMENT AND AFTER TAKIN G POSSESSION DIVIDED THE AFORESAID LAND INTO PLOTS FOR RE-SELLING AS PAR T OF THEIR REAL ESTATE BUSINESS, RS.50 LAKHS WAS PAID BY BUYERS IN CASH AT THE TIME OF ENTERING INTO AN AGREEMENT TO SALE DATED 07.01.2008 , WHILE BALANCE AMOUNT WAS TO BE PAID OF RS.1.41 CRS. WITHIN SIX MONTHS. IT W AS EXPLAINED THAT BUYERS TOOK MORE TIME TO PAY THE AMOUNT AND PART PAYMENT W AS ONLY RECEIVED IN AY: 2008-09 , WHILE BALANCE REMAINING PAYMENTS WER E RECEIVED IN THE SUBSEQUENT YEAR. IT WAS SUBMITTED BY LEARNED COUNS EL FOR THE ASSESSEE THAT GUIDELINE VALUE OF THE SAID LAND WAS RS. 1 LAC S PER ACRE AND BUYERS FINALLY GOT REGISTERED AFORESAID AGRICULTURE LAND I N THEIR FAVOUR ON 11.09.2008. IT WAS SUBMITTED THAT AGREEMENT TO SAL E DATED 07.01.2008 WAS AN UNREGISTERED AGREEMENT EXECUTED ON 07.01.200 8 AS THERE WAS NO REQUIREMENT EARLIER TO HAVE A REGISTERED AGREEMENT OF SALE WITHIN STATE OF TAMIL NADU. THUS, THE ASSESSEE SUBMITTED THAT THES E ARE AGRICULTURAL LANDS WHICH ARE BEYOND PURVIEW OF BEING TREATED AS CAPITAL ASSET WITHIN THE MEANING OF SEC.2(14) AND EXEMPTION FROM INCOME -TAX IS AVAILABLE ON GAINS EARNED ON SALE OF AFORESAID AGRICULTURAL LAND U/S.10(37) . IT WAS SUBMITTED THAT THE AFORESAID LAND IS SITUATED IN VE LAPADI VILLAGE PANCHAYAT WHICH IS WITHIN 2 TO 3 KMS OF ARANI TOWN. THE ASSE SSEE RELIED UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CA SE OF CIT V. P. J. THOMAS REPORTED IN (1995) 211 ITR 897(MAD.). SO, I T WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT AO APPLIED AM ENDED PROVISIONS ITA NOS.27 & 28/CHNY/2017 :- 18 -: WHILE MAKING ADDITIONS IN THE CASE OF THE ASSESSEE RELEVANT TO THE AY: 2008-09 & 2009-10 AND HELD THE SAID LAND TO BE CAPI TAL ASSETS. THE LEARNED COUNSEL FOR THE ASSESSEE CLAIMED THAT FOR R ELEVANT PERIOD , THE ASSESSEE RIGHTLY CLAIMED EXEMPTION U/S.10(37) OF TH E ACT. IT WAS SUBMITTED THAT NEAREST MUNICIPALITY IS 52 KMS AWAY . IT WAS SUBMITTED THAT SAID AGRICULTURAL LAND WAS NOT A NOTIFIED LAND NOR IT FALLS WITHIN NOTIFIED MUNICIPALITY. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE SAID LAND WAS REGISTERED FOR GUIDELINE VALUE OF RS.23.34 LAKHS WHILE ACTUAL SALE PROCEEDS OF THE SAID LAND WERE RS.1,91, 50,575/-. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT ENTIRE SALE PROCEEDS WERE DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE MAIN TAINED WITH IOB, WHICH WAS USED FOR CONSTRUCTING SCHOOL. IT WAS SUB MITTED THAT AT THE TIME OF AGREEMENT OF SALE DATED 07.01.2008 , PART CONSID ERATION OF RS.50 LAKHS WAS PAID BY BUYERS TO THE ASSESSEE IN CASH. IT WAS SUBMITTED THAT REGISTERED DOCUMENT FOR SALE OF THE SAID PROPERTY W ERE NOT ENTERED IN AY: 2008-09 , WHILE SAME WAS EXECUTED IN AY: 2009-10 , ON 11.09.2008. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE T HAT RS.10 LAKHS WAS PAID FOR STANDING CROPS ON THE SAID LAND ON THE DAT E OF TRANSFER . IT WAS SUBMITTED THAT SINCE THE LAND WAS AN AGRICULTURAL LAND , THE CONSIDERATION CANNOT BE BROUGHT TO TAX U/S.10(37) OF THE ACT. TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAS RAISED ADD ITIONAL GROUND OF APPEAL IN AY:2009-10 CHALLENGING VALIDITY OF REOP ENING OF THE CONCLUDED ASSESSMENT BY INVOKING PROVISIONS OF SECTION 147/14 8 OF THE 1961 ACT , BUT ON BEING CONFRONTED ADMITTED THAT THE ASSESSEE DID NOT ORIGINALLY FILED ITA NOS.27 & 28/CHNY/2017 :- 19 -: RETURN OF INCOME WITH THE DEPARTMENT FOR AY: 2009-1 0 AND IT IS ONLY ON 31.03.2015, THE RETURN OF INCOME WAS FILED AND HENC E THERE CANNOT BE ANY QUESTION OF CHANGE OF OPINION AS IN THE ABSENCE OF ORIGINAL RETURN OF INCOME, THE AO COULD NOT HAVE FORMED ANY OPINION. THE ASSESSEE ALSO ADMITTED THAT THERE WERE CASH DEPOSITS OF MORE THAN RS.2 CRS. IN HIS BANK ACCOUNT. 5.2THE LD. DR SUBMITTED THAT ASSESSEE HAS DEPOSITED RS.2 CRS. IN HIS BANK ACCOUNT . THE LEARNED DR SUBMITTED THAT ASSESS EE PURCHASED SAID LAND FOR RS.15,000/- PER ACRE IN 2000 AND FURTHER P URCHASED SAID LAND IN 2006 FOR RS.50,000/- PER ACRE. NOW, IT IS CLAIMED THAT THE ASSESSEE SOLD THE SAID LAND FOR RS.8 LAKHS PER ACRE. SHE DREW OU R ATTENTION TO PAGE NO.7 OF THE ASSESSMENT ORDER AND ANSWER TO QUESTION NO.7 OF STATEMENT RECORDED OF LEARNED VAO. OUR ATTENTION WAS DRAWN B Y LD. DR TO THE STATEMENT OF THE BUYERS WHEREIN THEY CONFIRMED HAVI NG MADE PAYMENT OF RS.25 LAKSH IN CASH AND RS.25 LAKSH BY CHEQUE . OUR ATTENTION WAS DRAWN BY LEARNED DR TO ENGLISH TRANSLATION OF AGREEMENT F OR SALE DATED 07.01.2008 WHICH IS PLACED AT PAGE NO.65 OF THE PAP ER BOOK. OUR ATTENTION WAS ALSO DRAWN TO THE CROSS-EXAMINATION U NDERTAKEN BY THE ASSESSEE OF SHRI D.SETTU & SHRI PALANI. THE LD.DR D REW OUR ATTENTION TO PROVISIONS OF SEC. 124(3) AND SUBMITTED THAT ASSESS EE HAS NOT CHALLENGED JURISDICTION OF THE AO AND NOW AT THIS STAGE IT CAN NOT CHALLENGE THE JURISDICTION OF THE AO KEEPING IN VIEW PROVISIONS O F SEC. 124(3) OF THE 1961 ACT. ITA NOS.27 & 28/CHNY/2017 :- 20 -: 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD INCLUDED CITED CASE LAWS. WE HAVE OBSERVED THAT ASSESSEE IS CATHOLIC PRIEST. THE ASSESSEE DID NOT ORIGINALLY F ILED ANY RETURN OF INCOME WITH REVENUE FOR THE IMPUGNED AY: 2008-09. THE AO R ECEIVED INFORMATION FROM INVESTIGATION DIRECTORATE , CHENNAI TO EXAMINE SOURCES OF CASH DEPOSITS APPEARING IN ASSESSEES SAVING BANK ACCOUN T NUMBER 177901000001600 MAINTAINED WITH INDIAN OVERSEAS BAN K, GRIVALAM ROAD, TIRUVANNAMALAI FOR THE PERIOD OCTOBER, 2007 TO FEBR UARY 2015. THE CASE OF THE ASSESSEE WAS REOPENED BY REVENUE FOR FRAMING ASSESSMENT U/S 147 READ WITH SECTION 143(3) OF THE 1961 ACT, WHEREIN N OTICE DATED 27.03.2015 U/S 148 OF THE 1961 ACT WAS ISSUED BY AO TO THE ASSESSEE FOR AY: 2008-09. THE SAID NOTICE WAS ADMITTEDLY ISSUE D AFTER FOUR YEARS FROM THE END OF ASSESSMENT YEAR BUT WITHIN SIX YEARS FRO M THE END OF THE ASSESSMENT YEAR BUT THE FACT REMAINS THAT THE ASSES SEE HAD NOT ORIGINALLY FILED ANY RETURN OF INCOME FOR AY: 2008-09 U/S 139( 1) OR U/S 139(4) OF THE 1961 ACT. THE ASSESSEE FURNISHED ITS RETURN OF INCO ME FOR THE FIRST TIME PURSUANT TO NOTICE ISSUED BY THE AO U/S 148 OF THE 1961 ACT ADMITTING NIL INCOME , ON 31.03.2015 . THE FACT REMAINS THAT THE ASSESSEE DID NOT FILED ITS RETURN OF INCOME ORIGINALLY U/S 139(1) OF THE 1961 ACT OR EVEN DID NOT FILED IT BELATEDLY WITHIN TIME PRESCRIBED U/S 139(4 ) OF THE 1961 ACT AND THERE WERE HUGE CASH DEPOSITS IN HIS BANK ACCOUNT W ITH IOB WHICH INFORMATION WAS PASSED ON BY INVESTIGATION DIRECTOR ATE, CHENNAI TO THE AO TO VERIFY SOURCES OF CASH DEPOSITS AND UNDER TH E PRESENT FACTUAL MATRIX IS AN INCRIMINATING MATERIAL IN ITSELF DEHOR S THE FACT THAT NO RETURN ITA NOS.27 & 28/CHNY/2017 :- 21 -: OF INCOME WAS FILED BY THE ASSESSEE ORIGINALLY FOR THE IMPUGNED ASSESSMENT YEAR U/S 139(1) OR 139(4) OF THE 1961 AC T, RIGHTLY TRIGGERING INVOCATION OF PROVISIONS OF SECTION 147 OF THE 1961 ACT BY THE AO AND IN OUR CONSIDERED VIEW THE REOPENING BY THE AO UNDER T HE PROVISIONS OF SECTION 147/148 OF THE 1961 ACT NEEDS TO BE UPHELD. THE INFORMATION RECEIVED BY THE AO FROM INVESTIGATION DIRECTORATE , CHENNAI INTIMATING ABOUT VERIFYING SOURCES OF CASH DEPOSITS IN HIS IOB BANK ACCOUNT WAS TANGIBLE INCRIMINATING MATERIAL COMING TO THE POSS ESSION OF THE AO RIGHTLY TRIGGERING INVOCATION OF SECTION 147 OF THE 1961 AC T. SIMILAR SITUATION PREVAILED IN AY: 2009-10 WHEREIN THE ASSESSEE FILED ITS RETURN OF INCOME ONLY ON 31.03.2015 WHICH IS MUCH BEYOND THE TIME PR ESCRIBED EVEN FOR FILING OF BELATED RETURN OF INCOME U/S 139(4) OF TH E 1961 ACT AND SUCH A RETURN CANNOT BE CLAIMED TO BE A VALID RETURN BY TH E ASSESSEE. THUS, EVEN FOR AY: 2009-10 SIMILAR SITUATION HAD PREVAILED AS WAS IN AY; 2008-09 AND WE UPHOLD REOPENING OF THE ASSESSMENT BY THE AO U/S 147 OF THE 1961 ACT FOR BOTH THE AYS VIZ. AY: 2008-09 AND 2009-10. NOW PROCEEDING TO THE FACTS OF THE CASE , IT IS OBSERVED THAT THE ASSESSE E HAD SOLD ACRE 25.36 AND HALF CENTS OF LAND SITUATED AT VELAPADI VILLAGE IN ARANI CIRCLE. THE ASSESSEE HAS CLAIMED THAT HE RECEIVED CONSIDERATION OF RS.1, 91,50,575/- FROM BUYERS WHICH WAS CLAIMED BY ASSESSEE TO BE EVIDENCE D BY AN UNREGISTERED AGREEMENT OF SALE DATED 07.01.2008 ENTERED INTO BY THE ASSESSEE WITH THE BUYERS. THE ASSESSEE CLAIMED THAT HE WAS PAID ` 50 LACS IN CASH AS ADVANCE ON SIGNING OF THIS AGREEMENT TO SALE ON 07. 01.2008, OUT OF WHICH ` 45 LACS WAS DEPOSITED BY ASSESSEE IN HIS BANK ACCO UNT WITH IOB ITA NOS.27 & 28/CHNY/2017 :- 22 -: IMMEDIATELY ON THE NEXT DAY I.E. 08.01.2008 AND BA LANCE ` 5 LACS WAS STATED TO BE RETAINED BY ASSESSEE WHICH WAS CLAIMED TO BE DEPOSITED LATER IN HIS BANK ACCOUNT. THE ASSESSEE HAS CLAIMED THAT ENTIRE CONSIDERATION WAS PAID BY THE BUYERS IN CASH OVER A PERIOD OF TIM E TILL THE EXECUTION OF SALE DEED ON 11.09.2008 WHICH WAS CLAIMED BY ASSESS EE TO HAVE BEEN DEPOSITED IN HIS BANK ACCOUNT MAINTAINED WITH IOB. THE DETAILS OF FURTHER DEPOSIT OF ` 1,59,00,000/- OF CASH BY ASSESSEE IN HIS BANK ACCO UNT WITH IOB AS STATED BY ASSESSEE AS SUPPORTED BY BANK STAT EMENT OF ASSESSEE IS AS UNDER:- DATE OF RECEIPT AMOUNT (RS.) 04.03.2008 25,00,000 15.03.2008 7,00,000 24.07.2008 50,00,000 02.08.2008 20,00,000 05.09.2008 15,00,000 11.09.2008 10,00,000 11.09.2008 22,00,000 27.09.2008 10,00,000 TOTAL 1,59,00,000 THE SAID UNREGISTERED AGREEMENT OF SALE DATED 07.0 1.2008 ALONG WITH BANK STATEMENTS WERE PRODUCED BY THE ASSESSEE BEFOR E AUTHORITIES DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS. THE ASSESSEE HAS ALSO FILED PAPER BOOK BEFORE THE TRIBUNAL. THE ASSE SSEE HAS ALSO CLAIMED THAT EXCESS AMOUNT SO RECEIVED IN CASH BY HIM OVER AND ABOVE STATED TOTAL CONSIDERATION OF ` 1,91,50,575/- REPRESENTS PAYMENTS MADE BY BUYERS FOR STANDING CROP ON THE SAID LAND ON THE DA TE OF TRANSFER. THE ASSESSEE HAS ALSO CLAIMED THAT POSSESSION OF THE LA ND WAS GIVEN BY HIM TO THE BUYERS ON EXECUTION OF AGREEMENT TO SALE DATED 07.01.2008. ITA NOS.27 & 28/CHNY/2017 :- 23 -: HOWEVER, THE SALES DEED WERE EXECUTED BY ASSESSEE W ITH THE BUYERS ON 11.09.2008 VIDE SEVEN SALES DEEDS NUMBERED AS 9446 OF 2008 TO 9451 OF 2008 AND 9418 OF 2008, WITH AGGREGATE SALE VALUE OF ` 23,34,900/- FOR THE AFORESAID LAND. THE SAID CONSIDERATION STATED IN SA LE DEED WAS GUIDELINE VALUE NOTIFIED BY REGISTERING AUTHORITIES. WHILE EN TERING INTO SALE DEED ONE MORE PERSON ALSO JOINED MR. S.D.SETTU AND MR PALANI AS BUYER OF THE SAID LAND. THE ASSESSEES SWORN STATEMENT WAS RECORDED BY THE AO ON 07.08.2015 AND BASED ON AVERMENTS MADE BY THE ASSES SEE , A SURVEY ACTION U/S 133A WAS CONDUCTED BY THE CONCERNED AOS ON 22.09.2015 ON MR. S.D.SETTU AND MR. PALANI. THE REVENUE RECORDED STATEMENTS OF SHRI S.D.SETTU AND MR PALANI DURING COURSE OF SURVEY OP ERATIONS AND THEIR CROSS EXAMINATION BY ASSESSEE WAS ALLOWED BY REVENU E ON 17.02.2016. THE BUYERS SHRI S.D.SETTU & SHRI PALANI IN THEIR ST ATEMENTS RECORDED BEFORE REVENUE AND THEIR CROSS EXAMINATION BY ASSES SEE, HOWEVER, ADMITTED TO HAVE ENTERED INTO AND SIGNED AGREEMENT TO SALE DATED 07.01.2008 WITH THE ASSESSEE FOR PURCHASE OF AFORES AID LAND. THEY ALSO ADMITTED THAT WITNESSES AS ARE MENTIONED IN THIS AG REEMENT DATED 07.01.2008 WERE GENUINE WITNESSES, ONE OF THE WITNE SSES WAS BROTHER OF ONE OF THE BUYER MR PALANI. THE STAMP PAPERS FOR TH IS AGREEMENT TO SALE DATED 07.01.2008 WAS ALSO ADMITTEDLY BOUGHT BY MR P ALANI, THE BUYER. THE FINAL SALE AGREEMENT FOR TRANSFER OF THESE LAND WAS ENTERED INTO ON 11.09.2008 FOR A TOTAL CONSIDERATION OF ` 23.34 LACS WHICH HAPPENED TO BE GUIDELINE VALUE OF THE PROPERTY AS NOTIFIED BY REGI STERING AUTHORITIES . THE BUYERS ALSO ADMITTED THAT INITIALLY THEY AGREED FOR CONSIDERATION OF ` 1.10 ITA NOS.27 & 28/CHNY/2017 :- 24 -: CRORES FOR PURCHASING SAID LAND BUT LATER ON THEY F OUND THAT THERE ARE HIGH TENSILE POWER TOWERS AND CABLE GOING THROUGH THE LA ND , LAKE WAS AROUND THE LAND AND THERE WERE SRILANKAN REFUGEE CAMPS NEA R TO THE SAID LAND WHICH IN THE OPINION OF THE BUYERS WERE NEGATIVE FA CTORS ADVERSELY INFLUENCING THE MARKET VALUE OF THE LAND AND WHICH MADE THESE BUYERS TO RENEGOTIATE PRICE TO ` 23.34 LACS WITH THE ASSESSEE AS AGAINST THE AGREED CONSIDERATION OF ` 1.10 CRORES AS CONTENDED BY THE BUYERS. IT IS CLAI MED BY THE BUYERS THAT THEY INITIALLY AGREED FOR PRICE OF ` 1.10 CRORES FOR PURCHASE OF THESE LANDS WITHOUT EVEN SEEING THE LAND RELYING ON THE STATEMENT OF THE BROKER AND ADVANCED ` 50 LACS, OUT OF WHICH ` 25 LACS IN CASH AND ` 25 LACS BY CHEQUE WITHOUT SEEING THE LAND AND LATER RE NEGOTIATED THE PRICE WITH THE ASSESSEE FOR ` 23.34 LACS AFTER COMING TO KNOW OF THESE ADVERSE FEATURES PRESENT IN THE SAID LAND WHICH IN OUR CONS IDERED VIEW ON TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES IS HIG HLY UNLIKELY AND THE BUYERS ARE NOT COMING OUT WITH THE TRUTH FOR OBVIOU S REASONS TO SAVE THEM FROM VARIOUS ADVERSE ACTIONS WHICH MAY FOLLOW AGAIN ST THEM UNDER THE PROVISIONS OF THE 1961 ACT AND THE APPLICABLE STAMP DUTY LAWS. THE ENTERING OF FINAL SALE DEEDS ON 11.09.2008 AT THE G UIDELINE VALUE OF THE PROPERTY ALSO INDICATES THAT THERE IS AN CLEAR ATTE MPT OF SUPPRESSION OF TRUE CONSIDERATION OF THE VALUE OF PROPERTY IF THE ENTIRE FACTUAL MATRIX IS CONSIDERED IN TOTALITY. IT IS NOT A MERE INCIDENCE THAT SALES DEED WERE EXECUTED ON GUIDELINE VALUE AS NOTIFIED BY REGISTER ING AUTHORITIES BUT REFLECT CAREFUL PLANNING TO CONCEAL INCOME AND EVAD E TAXES. THE AO ALSO SUMMONED LEARNED VILLAGE ADMINISTRATIVE OFFICER(VAO ) U/S 131 OF THE ITA NOS.27 & 28/CHNY/2017 :- 25 -: 1961 ACT , WHOSE STATEMENT WAS RECORDED AND HE CONF IRMED BASED ON GOVERNMENT RECORDS THAT AGRICULTURAL ACTIVATES WERE CARRIED ON IN THE SAID LAND AT THE TIME OF TRANSFER OF THE AFORESAID LAND . IT WAS CONFIRMED BY LD VAO THAT THE SAID LAND WAS FERTILE AGRICULTURAL LAN D AT THE TIME OF TRANSFER AND THERE WERE THREE SUBMERSIBLE PUMP SETS FOR IRRI GATING THE LANDS. THE LD VAO CONFIRMED THAT SUGARCANE, GROUND NUTS AND PA DDY WERE GROWN IN THE SAID LAND AT THE TIME OF TRANSFER. THE LEARNE D VAO CONFIRMED THAT THERE WAS STANDING CROP OF SUGARCANE , GROUND NUT A ND PADDY GROWN ON THE SAID LAND AT THE TIME OF TRANSFER. THE LEARNED VAO ALSO CONFIRMED THAT LAND REVENUE OF ` 500 WAS COLLECTED FROM THE ASSESSEE. THE LEARNED V AO STATED IN HIS STATEMENT RECORDED BY REVENUE THAT TH E BUYERS GOT THE LAND CONVERTED FOR REAL ESTATE ACTIVITIES AND LAND REVEN UE OF ` 250 IS COLLECTIBLE FROM THE BUYERS WHICH REMAINED UNPAID. THE LEARNED VAO IS A GOVERNMENT OFFICIAL EMPLOYED BY STATE OF TAMIL NADU AND HIS AF ORESAID AVERMENTS RECORDED IN STATEMENT WERE BASED ON GOVERNMENT RECO RDS AND CANNOT BE LIGHTLY BRUSHED ASIDE. THESE GOVERNMENT RECORDS ARE MAINTAINED IN NORMAL COURSE OF CONDUCT BY GOVERNMENT AUTHORITIES AND PRE SUMPTION UNLESS REBUTTED IS THAT THESE RECORDS ARE TRUE AND CORRECT . THE LEARNED VAO ALSO STATED THAT BUYERS SPENT APPROX. RS 40 LACS AFTER P URCHASE OF THE SAID LAND FOR LEVELING THE LAND TO MAKE IT FIT FOR REAL ESTAT E ACTIVITIES WHICH WERE THEN RECOGNIZED AS LAY-OUTS BY ARANI PANCHAYAT. THE LE ARNED VAO ALSO STATED BASED ON HIS ENQUIRY WITH THE VILLAGERS THAT THERE WAS SOME PRICE INCREASES OF THE LAND IN THAT AREA IN THE YEAR 200 8 DUE TO INCREASED MARKET ACTIVITIES AND THAT THE LAND VALUE SHOULD B E AROUND ` 3 LACS PER ITA NOS.27 & 28/CHNY/2017 :- 26 -: ACRE BASED UPON HIS ENQUIRY WITH VILLAGERS . THE LE ARNED VAO NO DOUBT ALSO STATED THAT PRICE OF ` 8 LACS PER ACRES IS ON HIGHER SIDE AND THIS LAND CANNOT FETCH THIS MUCH HIGHER PRICE. THE BUYERS HAV E DENIED TO HAVE PAID ` 50 LACS IN CASH AT THE TIME OF SIGNING OF THE AGRE EMENT TO SALE DATED 07.01.2008 BUT STATED THAT CASH OF ` 25 LACS AND CHEQUE OF ` 25 LACS WAS PAID TO THE ASSESSEE AT THE TIME OF SIGNING OF THE AGREEMENT DATED 07.01.2008. IT WAS STATED BY THE BUYERS THAT CHEQUE OF ` 25 LACS WAS RETURNED BY THE SELLERS TO THE BUYERS ON RENEGOTIAT ION OF THE PRICE OF THE SAID LAND OWING TO DEFECTS AS CITED ABOVE . ON BEIN G ASKED BY THE AUTHORITIES , THE SAID BUYERS EXPRESSED INABILITY TO GIVE DETAILS OF SAID RETURNED CHEQUE OF ` 25 LACS ,WHILE THE ASSESSEE ON ITS PART IS CONSIST ENTLY DENIED HAVING RECEIVED ANY CHEQUE OF RS 25 LACS AT THE TIME OF ENTERING OF AGREEMENT TO SALE DATED 07.01.2008 RATHER THE ASSES SEE IS CONSISTENTLY MAINTAINING THE STAND THAT CASH OF ` 50 LACS WAS GIVEN BY THE BUYERS ON 07.01.2008 WHEN AGREEMENT TO SALE WAS ENTERED INTO. THE ASSESSEE CLAIMED TO HAVE DEPOSITED ` 45 LACS IN CASH WITH IOB ON 08.01.2008 WHILE ` 5 LACS WAS RETAINED BY THE ASSESSEE WHICH ALSO WAS CLAIMED TO BE DEPOSITED BY ASSESSEE LATER WITH ITS IOB BANK ACCOU NT. THE ASSESSEE HAS DEPOSITED AROUND ` 2 CRORES IN HIS BANK ACCOUNT TILL THE TIME SALE DE ED WAS EXECUTED ON 11.09.2008. THE SALE DEEDS WERE INITIAL LY REQUIRED TO BE EXECUTED WITHIN SIX MONTHS OF THE EXECUTION OF THE AFORESAID AGREEMENT TO SALE DATED 07.01.2008 BUT IT IS CLAIMED BY ASSESSEE THAT OWING TO FINANCIAL DIFFICULTIES IN RAISING FUNDS, THE BUYERS REQUESTED ASSESSEE TO EXTEND DATE OF EXECUTION OF SALE DEED AND FINALLY ON 11.09.200 8 , THE SAID SALE DEEDS ITA NOS.27 & 28/CHNY/2017 :- 27 -: WERE EXECUTED FOR SALE OF SAID LAND WITH ONE MORE P ERSON JOINING IN AS BUYER OF THE SAID LAND ALONG WITH MR. S.D.SETTU AND MR. PALANI. THUS, AS IS SEEN THE ASSESSEE HAS TAKEN CONSISTENT STAND AS TO SALE CONSIDERATION OF THE LAND SOLD BY HIM AND AS TO AGRICULTURAL ACTIVIT IES BEING CARRIED ON THE SAID LAND BEFORE ITS TRANSFER/SALE, WHICH STAND HAD NOT BEEN SHAKEN TILL BEFORE US. IN OUR CONSIDERED VIEW KEEPING IN VIEW C OMPLETE FACTUAL MATRIX OF THE CASE AND ON THE TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES, THE BUYERS IN ORDER TO WRIGGLE OUT FROM THE ADVERSE AND PENAL CONSEQUENCES ARISING UNDER THE PROVISIONS OF THE 1961 ACT AS WEL L APPLICABLE STAMP DUTY LAWS , OWING TO UNDER-DECLARING OF THE VALUE OF PRO PERTY AT ` 23.34 LACS AT GUIDELINE VALUE VIDE SALE DEEDS DATED 11.09.2008 A S AGAINST ACTUAL VALUE OF ` 1.91 CRORES OF THE SAID LAND REFLECTED IN AGREEME NT TO SALE DATED 07.01.2008 ARE DENYING THE SALE CONSIDERATION TO BE ` 1.91 CRORES, THIS DIFFERENTIAL REFLECTS PAYMENT OF ON-MONEY FOR ACQUI RING THE AFORESAID PROPERTY WHICH IS QUITE PREVALENT IN INDIA IN REAL ESTATE TRANSACTIONS. THE BUYERS ARE NOW COMING OUT WITH STORY OF ADVERSE FEA TURES IN THE SAID LAND SUCH AS HIGH TENSION TOWER AND POWER CABLES RUNNING THROUGH THE LAND , LAKES AND REFUGEE CAMPS AROUND THE LAND. IT IS UNBE LIEVABLE THAT THE BUYERS DID NOT SEE THE LAND BEFORE ENTERING INTO AN AGREEMENT TO SALE DATED 07.01.2008 AND MADE ADVANCE PAYMENT OF ` 50 LACS WITHOUT EVEN SEEING THE LAND. IT IS ALSO HIGHLY UNBELIEVABLE THA T THE SELLERS AGREED FOR REDUCED CONSIDERATION OF ` 23.34 LACS AS AGAINST CONSIDERATION OF ` 1.10 CRORES AS ITSELF ADMITTED BY BUYERS OF THE SAID LAN D WHENCE THE BUYERS BROUGHT TO NOTICE OF THE ASSESSEE AS TO ADVERSE FEA TURES IN THE SAID LAND. ITA NOS.27 & 28/CHNY/2017 :- 28 -: EVEN IF WE GO WITH THE VERSION OF BUYERS THAT THEY INITIALLY AGREED FOR CONSIDERATION OF ` 1.10 CRORES FOR ACQUIRING THE AFORESAID PROPERTY, NO SELLER WILL RENEGOTIATE THE SAID LAND FOR PALTRY A MOUNT OF ` 23.34 LACS AS AGAINST ORIGINAL AGREED CONSIDERATION OF ` 1.10 CRORES WHICH WAS ITSELF ADMITTED BY BUYERS TO HAVE INITALLY AGREED UPON. IF WE GO WITH THE VERSION OF THE BUYER THAT ONLY CASH OF ` 25 LACS WAS PAID IN ADVANCE WHILE ` 25 LACS WAS PAID VIDE CHEQUE WHICH WAS RETURNED BY THE ASSESSEE ON RENEGOTIATION, IT IS HIGHLY UNLIKELY THAT ANY SELLE R WHO HAS TAKEN ADVANCE OF ` 25 LACS AGAINST THE AGREED CONSIDERATION OF ` 1.10 CRORES ( BUYER VERSION OF INITIAL AGREED CONSIDERATION) WILL SUDDE NLY AGREE FOR CONSIDERATION OF ` 23.34 LACS ON BEING POINTED OUT WITH SOME ADVERSE FEATURES IN LAND RATHER IN SUCH SCENARIO , THE SELL ER WILL EITHER REFUND THE SAID ADVANCE OR IF IT IS UTILIZED THEN IN THAT SITU ATION THE SELLER WILL ASK BUYERS TO WAIT TILL NEW BUYERS ARE LOCATED. THUS, IN OUR CONSIDERED VIEW THE ASSESSEE IS COMING OUT WITH TRUE FACTS THAT HE DID RECEIVED CONSIDERATION OF ` 1.91 CRORES TOWARDS SALE OF HIS PROPERTY WHICH IS EVIDENCED BY AN UNREGISTERED AGREEMENT DATED 07.01. 2008 EXECUTED ON STAMP PAPERS. THE BUYERS ADMITTED TO THIS AGREEMENT DATED 07.01.2008 AS WELL TO THEIR SIGNATURES APPENDED TO THIS AGREEM ENT DATED 07.01.2008 BUT ONLY DIFFERED AS TO THE CONSIDERATION PAID FOR ACQUIRING THE SAID PROPERTY. IT IS OBVIOUS THAT IF BUYERS AGREES TO CO NSIDERATION OF ` 1.91 CRORES AS PER AGREEMENT TO SALE DATED 07.01.2008 , AS AGAINST THE VALUE OF ` 23.34 LACS REFLECTED IN SALE DEED DATED 11.09.2008 WHICH HAPPENED TO BE GUIDELINE VALUE NOTIFIED BY REGISTERING AUTHORIT IES, OBVIOUSLY THEY WILL BE ITA NOS.27 & 28/CHNY/2017 :- 29 -: SADDLED WITH FINANCIAL LIABILITIES TO PAY TAXES, IN TEREST AND PENALTY FOR CONCEALING THEIR INCOME AND FURNISHING OF INACCURAT E PARTICULARS OF INCOME. FURTHER, THERE COULD BE PROSECUTION LAUNCHED BY AUT HORITIES FOR BEING PARTY TO ENGAGING IN PAYMENTS OF ON-MONEY IN PROPERTY TRA NSACTIONS. EVEN, THE STAMP PAPER FOR ENTERING INTO AN AGREEMENT TO SALE DATED 07.01.2008 WAS BOUGHT BY ONE OF THE BUYER MR PALANI AND EVEN WITNE SESS WERE HELD BY THE BUYERS TO BE GENUINE AND ONE OF THE WITNESS HAPPENS TO BE BROTHER OF MR. PALANI.. THUS BASED ON MATERIAL ON RECORD ON THE T OUCHSTONE OF PREPONDERANCE OF PROBABILITIES, WE ARE OF THE CONSI DERED VIEW THAT THE ASSESSEE IS TELLING A TRUE VERSION THAT CONSIDERATI ON SHOWN TO HAVE BEEN REFLECTED IN SALE DEED DATED 11.09.2008 WAS LOWER AMOUNT OF RS.25.34 LAKHS BY THE BUYER WITH A VIEW TO EVADE STAMP DUTY AND INCOME TAX BY THE BUYERS WHILE THE REAL AND ACTUAL SALE CONSIDER ATION OF THE SAID PROPERTY WAS RS.1,91,50,575/- AS IS REFLECTED IN TH E AGREEMENT TO SALE DATED 07.01.2008 WHICH UNDER THE CIRCUMSTANCES CANN OT BE IGNORED RATHER THE SAID AGREEMENT TO SALE DATED 07.01.2008 WAS DUL Y ACTED UPON AND CONSIDERATION MOVED BASED ON SAID AGREEMENT DATED 0 7.01.2008 WHICH FINALLY FOUND ITS WAY INTO ASSESSEES BANK ACCOUNT WITH IOB BY WAY OF CASH DEPOSITS. IT IS NOT AN MERE INCIDENT OR A CHANCE T HAT THE SAID PROPERTY WAS REGISTERED AT VALUE WHICH IS THE GUIDELINE VALU E , BUT RATHER IT WAS A CAREFULLY AND WELL PLANNED CRAFTED DEVICE/MECHANISM TO EVADE TAXES AND DEPRIVE AUTHORITIES OF THEIR LEGITIMATE DUES OF TAX ES AND STAMP DUTY . EVEN , LEARNED VAO HAS ALSO STATED IN STATEMENT RECORDED BEFORE THE AO BASED ON HIS ENQUIRIES WITH THE VILLAGERS THAT THE MARKET PRICE WAS AROUND ` 3 ITA NOS.27 & 28/CHNY/2017 :- 30 -: LACS PER ACRE AT THAT POINT OF TIME OF THE LAND IN THAT AREA AS THERE WAS INCREASED MARKET ACTIVITIES IN THE YEAR 2008 AND NO T ` 1 LACS PER ACRE AS IS RECORDED IN THE SALE DEED DATED 11.09.2008. THE L EARNED VAO HAS ALSO STATED THAT THIS LAND HOWEVER COULD NOT FETCH ` 8 LACS PER ACRE AT THAT POINT OF TIME. THE LEARNED VAO HAS GIVEN SUCH STATEMENT B ASED ON ENQUIRIES WITH THE VILLAGERS AND NOT BASED ON ANY GOVERNMENT RECORDS AND HAS ALSO PRAYED THAT THIS STATEMENT OF HIS SHOULD NOT BE USE D AGAINST HIM. HOWEVER, IN THE INSTANT CASE , WE HAVE AN AGREEMENT TO SALE DATED 07.01.2008 REFLECTING SALE CONSIDERATION TO BE RS.1 ,91,50,575/-, WHICH AGREEMENT IS NOT DENIED BY THE BUYERS RATHER ONLY S ALE CONSIDERATION REFLECTED IN SAID AGREEMENT IS DENIED BY THE BUYERS . THE STAMP PAPER WERE BOUGHT BY ONE OF THE BUYERS AND GENUINITY OF T HE WITNESSES WERE ALSO CONFIRMED BY THE BUYERS AND INFACT ONE OF THE WITNESS HAPPENS TO BE THE BROTHER OF ONE OF THE BUYER . THE ONLY DISPUTE RAISED BY BUYERS IS TO THE QUANTUM OF VALUE OF SALE CONSIDERATION FOR ACQU IRING SAID LAND FOR WHICH REASONS ARE OBVIOUS SO AS TO PROTECT THEM FRO M RIGORS UNDER THE PROVISIONS OF THE 1961 ACT AND THE APPLICABLE STAMP DUTY LAWS. THE ASSESSEE IS ALSO PARTY TO SUCH A COLLUSIVE AND CLAN DESTINE ACT OF INDULGING IN ON-MONEY TRANSACTION IN THE SALE OF AFORESAID PR OPERTY WHEREBY INSTEAD OF RECEIVING MONEY THROUGH BANKING CHANNELS , THE A SSESSEE RECEIVED ENTIRE SALE CONSIDERATION OF ` 1.91 CRORES IN CASH AND LATER EXECUTED THE SALE DEED FOR ` 23.34 LACS ON 11.09.2008 IN FAVOUR OF THE BUYERS SUPPRESSING THE SALE CONSIDERATION KNOWINGLY WELL T HAT THE ACTUAL SALE CONSIDERATION RECEIVED BY HIM WAS ` 1.91 CRORES FOR SALE OF SAID LAND. THE ITA NOS.27 & 28/CHNY/2017 :- 31 -: ASSESSEE HAS PRODUCED EVIDENCES IN THE FORM OF LAND REVENUE RECORDS TO EVIDENCE THAT IT WAS AN AGRICULTURAL LAND AT THE TI ME OF TRANSFER OF LAND. THE AGREEMENT TO SALE DATED 07.01.2008 ALSO STIPULA TES THAT BUYERS WERE HANDED OVER POSSESSION OF THE LAND AT THE TIME OF THE EXECUTION OF THE AGREEMENT . IN OUR CONSIDERED VIEW , THIS IS A CASE OF UNREGISTERED AGREEMENT DATED 07.01.2008 WHICH AGREEMENT IS UPHE LD BY US TO BE TRUE AND CORRECT DOCUMENT FOR DETERMINING THE SALE CONS IDERATION FOR TRANSFER OF PROPERTY BUT EVEN IF POSSESSION OF THE LAND WAS HANDED OVER BY ASSESSEE TO BUYER ON 07.01.2008 AS PART OF THE CONT RACT AND PART PAYMENTS WERE MADE BY THE BUYERS TO THE ASSESSEE TO THE TUNE OF ` 50 LACS IN CASH ON 07.01.2008 UNDER SAID UNREGISTERED AGREEMENT DATED 07.01.2008, PROVISIONS OF SEC.2(47)(V) READ WITH S ECTION 45 OF THE 1961 ACT CANNOT GET ATTRACTED AND TRANSFER WILL NOT BE DEEMED TO BE COMPLETED FOR THE PURPOSES OF LEVIABILITY OF INCOME-TAX ON C APITAL GAINS EARNED BY THE ASSESSEE ON THE SALE OF LAND IN THE AY: 2008-09 OWING TO AMENDMENT IN SECTION 17 AND 49 OF THE REGISTRATION ACT, 1908 BY AMENDMENTS BROUGHT BY REGISTRATION AND OTHER RELATED LAWS( AME NDMENT) ACT, 2001 W.E.F. 24.09.2001. THERE WERE SIMULTANEOUS AMENDMEN TS MADE IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. THUS, TH IS UNREGISTERED AGREEMENT OF SALE DATED 07.01.2008 SHALL NOT AFFECT THE IMMOVABLE COMPRISED THEREIN AS IS PROVIDED IN AMENDED SECTION 49 OF THE REGISTRATION ACT, 1908 AND HENCE THE TRANSFER SHALL BE DEEMED TO BE COMPLETED ONLY IN AY: 2009-10 WHEN THE REGISTERED S ALES DEED STOOD EXECUTED BY THE ASSESSEE IN FAVOUR OF THE BUYERS ON 11.09.2008. THE ITA NOS.27 & 28/CHNY/2017 :- 32 -: ASSESSEE HAS RECEIVED PAYMENTS TOWARDS CONSIDERATIO N OF SALE OF LAND BOTH IN AY: 2008-09 AND 2009-10. HOWEVER THIS AGREE MENT TO SALE DATED 07.01.2008 IS ADMISSIBLE AS AN EVIDENCE OF SALE CON SIDERATION OF ` 1.91 CRORES STIPULATED THEREIN. THE ASSESSEE HAS ALSO CL AIMED THAT PAYMENTS TO THE TUNE OF ` 82 LACS WERE RECEIVED IN PREVIOUS YEAR RELEVANT TO AY:2008- 09 WHILE REST OF THE CONSIDERATION WAS RECEIVED IN PREVIOUS YEAR RELEVANT TO AY: 2009-10. THUS, WE HOLD THAT CAPITAL GAINS A RISING ON TRANSFER OF SAID LAND SHALL BE BROUGHT TO TAX ONLY IN AY: 2009- 10 WHEN THE REGISTERED SALES DEED STOOD EXECUTED. THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. BALBIR SINGH MAINI DATED 04.10.2017 IN CIVIL APPEAL NO. 15619 OF 2017 ARISING OUT OF SLP(CIVIL) NO. 35248 O F 2015 & ORS. IS RELEVANT , WHEREIN HONBLE SUPREME COURT HELD AS UN DER: 17. THE RELEVANT SECTIONS THAT ARE NECESSARY FOR US TO DECIDE THE PRESENT MATTER ARE AS UNDER: TRANSFER OF PROPERTY ACT '53A. PART PERFORMANCE. - WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITIN G SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAIN TY,AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT , TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT I N FURTHERANCE OF THE CONTRACT,AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT WHERE THERE IS AN INSTRU MENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MAN NER PRESCRIBED THEREFORE BY THE LAW FOR THE TIME BEING IN FORCE, T HE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM EN FORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY R IGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN O R CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED B Y THE TERMS OF THE CONTRACT: ITA NOS.27 & 28/CHNY/2017 :- 33 -: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF.] INCOME TAX ACT SECTION 2 - DEFINITIONS IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES, (47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, IN CLUDES, (I) TO (IV)** ** ** (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN P ART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 188 2) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COM PANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. 45. CAPITAL GAINS - (1) ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOU S YEAR SHALL, SAVE AS OTHERWISE PROVIDED IN SECTIONS 54, 54B, 54D , 54E, 54EA, 54EB, 54F, 54G AND 54H, BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'CAPITAL GAINS', AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLA CE. 48. MODE OF COMPUTATION - THE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' SHALL BE COMPUTED, BY DEDUCTIN G FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMO UNTS, NAMELY: (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIV ELY IN CONNECTION WITH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE COST O F ANY IMPROVEMENT THERETO:' 18. SECTION 53A, AS IS WELL KNOWN, WAS INSERTED BY THE TRANSFER OF PROPERTY AMENDMENT ACT, 1929 TO IMPORT INTO INDIA T HE EQUITABLE DOCTRINE OF PART PERFORMANCE. THIS COURT HAS IN SHR IMANT SHAMRAO SURYAVANSHIV. PRALHAD BHAIROBA SURYAVANSHI [2002] 3 SCC 676 STATED AS FOLLOWS: '16. BUT THERE ARE CERTAIN CONDITIONS WHICH ARE REQ UIRED TO BE FULFILLED IF A TRANSFEREE WANTS TO DEFEND OR PROTEC T HIS POSSESSION UNDER SECTION 53-A OF THE ACT. THE NECESSARY CONDIT IONS ARE: ITA NOS.27 & 28/CHNY/2017 :- 34 -: (1) THERE MUST BE A CONTRACT TO TRANSFER FOR CONSIDERAT ION OF ANY IMMOVABLE PROPERTY; (2) THE CONTRACT MUST BE IN WRITING, SIGNED BY THE TRAN SFEROR, OR BY SOMEONE ON HIS BEHALF; (3) THE WRITING MUST BE IN SUCH WORDS FROM WHICH THE TE RMS NECESSARY TO CONSTRUE THE TRANSFER CAN BE ASCERTAINED; (4) THE TRANSFEREE MUST IN PART-PERFORMANCE OF THE CONT RACT TAKE POSSESSION OF THE PROPERTY, OR OF ANY PART THEREOF; (5) THE TRANSFEREE MUST HAVE DONE SOME ACT IN FURTHERAN CE OF THE CONTRACT; AND (6) THE TRANSFEREE MUST HAVE PERFORMED OR BE WILLING TO PERFORM HIS PART OF THE CONTRACT.' 19. IT IS ALSO WELL-SETTLED BY THIS COURT THAT THE PRO TECTION PROVIDED UNDER SECTION 53A IS ONLY A SHIELD, AND CAN ONLY BE RESORTED TO AS A RIGHT OF DEFENCE. RAMBHAU NAMDEO GAJRE V. NARAYAN BAPUJI DHGOTRA [2004] 8 SCC 614 , PARA 10. AN AGREEMENT OF SALE WHICH FULFI LLED THE INGREDIENTS OF SECTION 53A WAS NOT REQUIRED TO BE EXECUTED THRO UGH A REGISTERED INSTRUMENT. THIS POSITION WAS CHANGED BY THE REGIST RATION AND OTHER RELATED LAWS (AMENDMENT) ACT, 2001. AMENDMENTS WERE MADE SIMULTANEOUSLY IN SECTION 53A OF THE TRANSFER OF PR OPERTY ACT AND SECTIONS 17 AND 49 OF THE INDIAN REGISTRATION ACT. BY THE AFORESAID AMENDMENT, THE WORDS 'THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED, OR' IN SECTION 53A OF THE 1882 ACT HAVE BEEN OMITTED. SIMULTANEOUSLY, SECTIONS 17 AND 49 OF THE 1908 ACT HAVE BEEN AMENDED, CLARIFYING THAT UNLESS THE DOCUMENT CONTAI NING THE CONTRACT TO TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPERTY ( FOR THE PURPOSE OF SECTION 53A OF 1882 ACT) IS REGISTERED, IT SHALL NO T HAVE ANY EFFECT IN LAW, OTHER THAN BEING RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE OR AS EVIDENCE OF ANY COLLATERAL TRANSA CTION NOT REQUIRED TO BE EFFECTED BY A REGISTERED INSTRUMENT. SECTION 17( 1A) AND SECTION 49 OF THE REGISTRATION ACT, 1908 ACT, AS AMENDED, READ TH US: '17(1A). THE DOCUMENTS CONTAINING CONTRACTS TO TRAN SFER FOR CONSIDERATION, ANY IMMOVABLE PROPERTY FOR THE PURPO SE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) S HALL BE REGISTERED IF THEY HAVE BEEN EXECUTED ON OR AFTER THE COMMENCEMEN T OF THE REGISTRATION AND OTHER RELATED LAWS (AMENDMENT) ACT , 2001 AND IF SUCH DOCUMENTS ARE NOT REGISTERED ON OR AFTER SUCH COMMENCEMENT, ITA NOS.27 & 28/CHNY/2017 :- 35 -: THEN THEY SHALL HAVE NO EFFECT FOR THE PURPOSES OF THE SAID SECTION 53A.' '49. EFFECT OF NON-REGISTRATION OF DOCUMENTS REQUIR ED TO BE REGISTERED. NO DOCUMENT REQUIRED BY SECTION 17 OR BY ANY PROVIS ION OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882), TO BE R EGISTERED SHALL (A) AFFECT ANY IMMOVABLE PROPERTY COMPRISED THEREIN, OR (B) CONFER ANY POWER TO ADOPT, OR (C) BE RECEIVED AS EVIDENCE OF ANY TRANSACT ION AFFECTING SUCH PROPERTY OR CONFERRING SUCH POWER, UNLESS IT HAS BEEN REGISTERE D: PROVIDED THAT AN UNREGISTERED DOCUMENT AFFECTING IMMOVABLE PROPERTY AND REQUIRED BY THIS ACT OR THE TRANSFER O F PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED MAY BE RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE UNDER C HAPTER II OF THE SPECIFIC RELIEF ACT, 1887 (1 OF 1877) OR AS EVIDENC E OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY REGISTER ED INSTRUMENT.' 20. THE EFFECT OF THE AFORESAID AMENDMENT IS THAT, ON AND AFTER THE COMMENCEMENT OF THE AMENDMENT ACT OF 2001, IF AN AG REEMENT, LIKE THE JDA IN THE PRESENT CASE, IS NOT REGISTERED, THE N IT SHALL HAVE NO EFFECT IN LAW FOR THE PURPOSES OF SECTION 53A. IN S HORT, THERE IS NO AGREEMENT IN THE EYES OF LAW WHICH CAN BE ENFORCED UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THIS BEING THE CAS E, WE ARE OF THE VIEW THAT THE HIGH COURT WAS RIGHT IN STATING THAT IN OR DER TO QUALIFY AS A 'TRANSFER' OF A CAPITAL ASSET UNDER SECTION 2(47)(V ) OF THE ACT, THERE MUST BE A 'CONTRACT' WHICH CAN BE ENFORCED IN LAW U NDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. A READING OF SECTI ON 17(1A) AND SECTION 49 OF THE REGISTRATION ACT SHOWS THAT IN THE EYES O F LAW, THERE IS NO CONTRACT WHICH CAN BE TAKEN COGNIZANCE OF, FOR THE PURPOSE SPECIFIED IN SECTION 53A. THE ITAT WAS NOT CORRECT IN REFERRING TO THE EXPRESSION 'OF THE NATURE REFERRED TO IN SECTION 53A' IN SECTION 2 (47)(V) IN ORDER TO ARRIVE AT THE OPPOSITE CONCLUSION. THIS EXPRESSION WAS USED BY THE LEGISLATURE EVER SINCE SUB-SECTION (V) WAS INSERTED BY THE FINANCE ACT OF 1987 W.E.F. 01.04.1988. ALL THAT IS MEANT BY THIS E XPRESSION IS TO REFER TO THE INGREDIENTS OF APPLICABILITY OF SECTION 53A TO THE CONTRACTS MENTIONED THEREIN. IT IS ONLY WHERE THE CONTRACT CO NTAINS ALL THE SIX FEATURES MENTIONED IN SHRIMANT SHAMRAO SURYAVANSHI (SUPRA), THAT THE SECTION APPLIES, AND THIS IS WHAT IS MEANT BY T HE EXPRESSION 'OF THE NATURE REFERRED TO IN SECTION 53A'. THIS EXPRESSION CANNOT BE STRETCHED TO REFER TO AN AMENDMENT THAT WAS MADE YEARS LATER IN 2001, SO AS TO THEN SAY THAT THOUGH REGISTRATION OF A CONTRACT IS REQUIRED BY THE AMENDMENT ACT OF 2001, YET THE AFORESAID EXPRESSION 'OF THE NATURE REFERRED TO IN SECTION 53A' WOULD SOMEHOW REFER ONL Y TO THE NATURE OF CONTRACT MENTIONED IN SECTION 53A, WHICH WOULD THEN IN TURN NOT REQUIRE REGISTRATION. AS HAS BEEN STATED ABOVE, THE RE IS NO CONTRACT IN THE EYE OF LAW IN FORCE UNDER SECTION 53A AFTER 200 1 UNLESS THE SAID ITA NOS.27 & 28/CHNY/2017 :- 36 -: CONTRACT IS REGISTERED. THIS BEING THE CASE, AND IT BEING CLEAR THAT THE SAID JDA WAS NEVER REGISTERED, SINCE THE JDA HAS NO EFFICACY IN THE EYE OF LAW, OBVIOUSLY NO 'TRANSFER' CAN BE SAID TO HAVE TAKEN PLACE UNDER THE AFORESAID DOCUMENT. SINCE WE ARE DECIDING THIS CASE ON THIS LEGAL GROUND, IT IS UNNECESSARY FOR US TO GO INTO THE OTH ER QUESTIONS DECIDED BY THE HIGH COURT, NAMELY, WHETHER UNDER THE JDA PO SSESSION WAS OR WAS NOT TAKEN; WHETHER ONLY A LICENCE WAS GRANTED T O DEVELOP THE PROPERTY; AND WHETHER THE DEVELOPERS WERE OR WERE N OT READY AND WILLING TO CARRY OUT THEIR PART OF THE BARGAIN. SIN CE WE ARE OF THE VIEW THAT SUB-CLAUSE (V) OF SECTION 2(47) OF THE ACT IS NOT ATTRACTED ON THE FACTS OF THIS CASE, WE NEED NOT GO INTO ANY OTHER F ACTUAL QUESTION. WE BASED ON OUR ABOVE DISCUSSIONS ALSO HOLD THAT TH E SAID LAND WAS AN AGRICULTURAL LAND AS AGRICULTURAL OPERATIONS WERE D ULY CARRIED ON BY ASSESSEE ON THE SAID LAND AT THE TIME OF TRANSFER/S ALE . IT IS ALREADY STATED ON OATH BY LEARNED VAO BASED ON GOVERNMENT RECORDS AS WELL EVIDENCED THROUGH VARIOUS GOVERNMENT RECORDS PRODUCED BY ASSE SSEE THAT AGRICULTURAL OPERATIONS WERE CARRIED ON IN THAT LAN D WHEN THE TRANSFER/SALES TOOK PLACE. THE VAO ALSO CONFIRMED B ASED ON GOVERNMENT RECORDS THAT THERE WAS STANDING CROPS OF SUGARCANE, GROUND NUT AND PADDY AND RS.500/- WAS COLLECTED AS LAND REVENUE. THE LD . VAO STATED THAT THERE WERE THREE SUBMERSIBLE PUMP SETS FOR IRRIGATI NG THE LANDS. THIS CONTENTION OF THE ASSESSEE ALSO STOOD ACCEPTED ON T HE TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES THAT THE CONSIDERATI ON RECEIVED OVER AND ABOVE THE SALE CONSIDERATION OF ` 1.91 CRORES MENTIONED IN AGREEMENT TO SALE DATED 07.01.2008 WAS TOWARDS STANDING CROPS . HOWEVER, SO FAR AS WHETHER THE ASSESSEE IS ENTITLED FOR EXEMPTION ON S ALE OF AFORESAID AGRICULTURAL LAND WITHIN THE PROVISIONS OF SECTION 10(37) READ WITH SECTION 2(14)(III) OF THE 1961 ACT IS CONCERNED, WE ARE OF THE CONSIDERED VIEW THAT ITA NOS.27 & 28/CHNY/2017 :- 37 -: THIS ISSUE REQUIRES RE-CONSIDERATION BY LEARNED ASS ESSING OFFICER WHO SHALL ADJUDICATE THIS ISSUE AFRESH AFTER MAKING PROPER EN QUIRIES AND VERIFICATIONS WITH LOCAL AUTHORITIES AND OF THE AREA WHERE THE SA ID PROPERTY WAS SITUATED AND SUCH ENQUIRIES/VERIFICATIONS AS THE AO MAY CONS IDER NECESSARY SO AS TO ARRIVE AT CONCLUSION WHETHER SAID LAND IS CAPITA L ASSET AS DEFINED U/S 2(14) OF THE 1961 ACT EXIGIBLE TO TAX OR IS ENTITLE D FOR EXEMPTION FROM TAX U/S 10(37) OF THE 1961 ACT . UNDER THESE CIRCUMSTAN CES, WE REMIT THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH DETERMIN ATION AFTER MAKING NECESSARY ENQUIRIES AND VERIFICATIONS SO AS TO DETE RMINE WHETHER OR NOT THE SAID LAND IS ELIGIBLE FOR EXEMPTION FROM CAPITA L GAINS UNDER THE PROVISIONS OF THE 1961 ACT OR IS EXIGIBLE TO CAPITA L GAINS TAX. THE ASSESSEE IS DIRECTED TO PRODUCE ALL RELEVANT EVIDENCES /MATE RIAL IN SUPPORT OF ITS CONTENTION THAT CAPITAL GAINS EARNED FROM SALE OF S AID LAND ARE EXEMPT FROM INCOME-TAX WITHIN FOUR CORNERS OF PROVISIONS O F THE 1961 ACT, WHICH EVIDENCES/MATERIAL SHALL BE ADMITTED BY THE AO IN T HE INTEREST OF JUSTICE AND THEREAFTER ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW . THENEEDLESS TO SAY THAT THE AO SHALL GIVE PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW IN THE DENOVO ASSESSMENT PROCED INGS. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E FOR AY: 2008-09 SHALL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. OUR DECISION FOR AY: 2008-09 SHALL APPLY MUTATIS MUTANDIS TO THE APPEAL FILED BY THE ASSESSEE FOR AY: 2009-10. WE ORDER ACC ORDINGLY. ITA NOS.27 & 28/CHNY/2017 :- 38 -: 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR AY: 2009-10 SHALL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE FOR AY: 2008-09 AND 2009-10 STAND PARTLY ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED ON THE 21 ST OCTOBER, 2019, IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ' ) ( RAMIT KOCHAR ) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 21 ST OCTOBER, 2019. TLN . ,'3 43 /COPY TO: 1. + /APPELLANT 4. 5 /CIT 2. ,-+ /RESPONDENT 5. 3 , /DR 3. 5 ( ) /CIT(A) 6. ( /GF