Shri Devendra G.Pasale, Baroda V. The ACIT.,Cent.Circle-1, Baroda

ITA 3395/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63071 (ITAT-AHMEDABAD)
• Duration Of Justice: 42 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Department Lawyers: B K S PANDYA
• Assessee Lawyers: S N SAPORKAR; MUKUND BAKSHI A RS
• Keywords: Unexplained investment; Additional evidence
• Section: 143(3); 142(1); 153A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 DEVENDRA G. PASALE UPENDRACHARYA ASHRAM COMPOUND, OPP. JALARAM HIGH SCHOOL, KARELIBAUG, BARODA PAN-AGTPP8714B APPELLANT VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, BARODA RESPONDENT WITH I.T.A. NO.3399/AHD/2008 A.Y.2002-03 SMT. JAYSHREE D. PASALE UPENDRACHARYA ASHRAM COMPOUND, OPP. JALARAM HIGH SCHOOL, KARELIBAUG, BARODA PAN-AGTPP8717C APPELLANT VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, BARODA RESPONDENT DEPARTMENT BY : SHRI B.K.S. PANDYA, CIT- D.R. ASSESSEE BY : SHRI S.N. SAPORKAR & SHRI MUKUND BAKSHI, A.RS. DATE OF HEARING : 01.11.2012 DATE OF PRONOUNCEMENT : 09.11.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER ALL THESE APPEALS BELONG TO THE SAME ASSESSEE AND H IS WIFE AND WERE HEARD TOGETHER, SO THEY ARE BEING DISPOSED OF BY PA SSING A CONSOLIDATED ORDER. I.T.A. NO.3394/AHD/2008 I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 2 2. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.37,54,00 0/- ALLEGED TO BE UNEXPLAINED/UNDISCLOSED INVESTMENT IN THE PURCHASE OF LAND SITUATED AT AKOTA DURING THE FINANCIAL YEAR UNDER CONSIDERAT ION. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT SUCH INVESTME NT WAS MADE PRIOR TO THE FINANCIAL YEAR UNDER CONSIDERATION AND THAT THE SAME WAS FULLY EXPLAINED AND EVIDENCED. THE ADDITION OF RS. 37,54,000/- BEING MADE IN COMPLETE DISREGARD OF THE MATERIAL, EVIDENC ES AND EXPLANATION AVAILABLE ON RECORD, IS PRAYED TO BE DE LETED. 2. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW AN D IN FACTS IN HOLDING THAT IN RELATION TO THE TRANSACTION OF PURC HASE OF AN IMMOVABLE PROPERTY, THE INVESTMENT IS SAID TO BE DO NE ON THE DATE WHEN PURCHASE DEED/AGREEMENT IS EXECUTED AND THAT E VEN IF THE PAYMENT IS MADE PRIOR TO SUCH EXECUTION IT IS TO BE HELD AS MADE ONLY ON SUCH DATE OF EXECUTION. THE LD. CIT(A) OUG HT TO HAVE HELD THAT THE EXECUTION OF PURCHASE AGREEMENT/DEED IS ON LY CONSEQUENTIAL TO THE PAYMENT AND THE INVESTMENT MADE IS TO BE CON SIDERED ON THE DATE WHEN THE ACTUAL PAYMENT IS MADE. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S 13 2 OF THE ACT WAS CONDUCTED ON THE ASSESSEE ON 4 TH MARCH, 2005. ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT WAS COMPLETED ON 29. 12.2006 DETERMINING TOTAL INCOME OF RS.41,49,000/- WHEREIN ADDITION OF RS.37,54,000/- WAS MADE ON INVESTMENT IN LAND. THE ASSESSING OFFICER, WHIL E MAKING THIS ADDITION, HAS OBSERVED AS UNDER:- ADDITION ON INVESTMENT IN AKOTA LAND IN COURSE OF SEARCH ANNEXUREA-2 PG.139-156 WAS SEIZ ED. THIS PAPER REVEALED THAT THE ASSESSEE HAD PURCHASED CERTAIN LA ND IN AKOTA WHICH WAS SOLD IN AY 2000-01 AND 2003-04. IN COURS E OF SEARCH, THE ASSESSEE HAD STATED THAT THIS LAND WAS PURCHASED IN THE A.Y. 1994- 95 AND THE PROFIT ON THIS HAS BEEN REFLECTED IN HIS RETURNS. HOWEVER, A PERUSAL OF THE RETURN REVEALED THAT NO S UCH TRANSACTION WAS REFLECTED IN HIS RETURN. THEREFORE, VIDE QUEST IONNAIRE DTD 18/12/2006 THE ASSESSEE WAS ASKED TO GIVE DETAILS O F THIS TRANSACTION AND REASONS WHY THE PURCHASE AMOUNT SHO ULD NOT BE ADDED AS HIS UNDISCLOSED INVESTMENT. IN HIS REPLY FILED ON 28/12/2006, THE ASSESSEE GAVE THE FOLLOWING SUBMISS IONS: I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 3 THE ASSESSEE HAS PURCHASED LAND IN AKOTA IN THE YEA R 1999 IN TERMS OF AGREEMENT DTD.16/07/1999, THE COPY OF WHICH IS E NCLOSED AT PAGE NO.75 TO 83. THIS LAND IS PURCHASED FROM SHRI RAME SH TAMBOLI AND OTHERS FOR TOTAL CONSIDERATION OF RS.75.08 LACS. THE LAND IS SOLD BY AGREEMENT FOR SALE OF SHRI YATI N DESAI AND SHRI LAHERI SHAH BY AGREEMENTS FOR SALE DTD.09/08/2004 F OR A TOTAL CONSIDERATION OF RS.69,05,294/- AND RS.24,52,362- R ESPECTIVELY. THE COPY OF SALE AGREEMENTS IS ENCLOSED AT PAGE NO.84 T O 92 AND 93 TO 103 RESPECTIVELY. AS PER THE AGREEMENT, THE LAST I NSTALLMENT OF THE CONSIDERATION IS TO BE RECEIVED ON 05/07/2005 WHICH IS AFTER THE END OF THE BLOCK PERIOD AND THE SAME WILL BE OFFERED FO R TAXATION AS AND WHEN THE TRANSACTION IS COMPLETED. FROM THE ABOVE SUB MISSION OF THE ASSESSEE IT IS VE RY CLEAR THAT RS.75.08 LACS WERE INVESTED IN PURCHASE OF THIS LAN D IN THE AY 2000- 01 FOR WHICH NO SOURCE HAS BEEN GIVEN. FURTHER, TH E TRANSACTION IS NO WHERE REFLECTED IN THE BOOKS. SIMILARLY, THE SA ME LAND WAS SOLD IN THE AY 2005-06 FOR A TOTAL CONSIDERATION OF RS.9 3,57,656/- WHICH AGAIN HAS NOT BEEN REFLECTED IN THE BOOKS OF THE AS SESSEE. THEREFORE THE TOTAL TRANSACTION OF AKOTA LAND IS OUT OF BOOKS . A PERUSAL OF THE AGREEMENTS FILED BY THE ASSESSEE R EVEAL THAT THE ASSESSEE IS 50% OWNER OF THE AKOTA LAND. THEREFORE , AN ADDITION OF RS.37,54,000/- I.E. 50% OF THE PURCHASE CONSIDERATI ON OF RS.75.08 LACS IS MADE TO THE INCOME OF THE ASSESSEE ON ACCOU NT OF UNDISCLOSED INVESTMENT IN AKOTA LAND. 4. BEFORE LD. CIT(A) ASSESSEE PLACED RELIANCE ON TH E FOLLOWING WRITTEN SUBMISSIONS:- ON THE BASIS OF DOCUMENTS FOUND AND SEIZED IN THE C OURSE OF SEARCH PROCEEDINGS AND INVENTORIZED, AS PER ANNEXURE A/2, PAGE NOS.139 TO 156, THE LD. A.O. ENQUIRED FROM THE APPELLANT VIDE QUESTION NO.11 VIDE NOTICE U/S 142(1) DATED 18.12.2006 THAT PROFIT FROM AKOTA LAND WAS NOT REFLECTED IN RETURN FOR THE A.Y. 2000-01 SI NCE THIS LAND WAS PARTLY SOLD IN THE A.Y. 2000-01 AND PARTLY IN THE A .Y. 2003-04 AS WAS ADMITTED DURING SEARCH PROCEEDINGS. THE APPELLANT E XPLAINED THAT THE ASSESSES HAS PURCHASED LAND AKOTA LAND IN THE YEAR 1999 FROM SHRI RAMESH TAMBOLI AND OTHERS FOR TOTAL CONSIDERAT ION OF RS.75.08 LAKHS IN TERMS OF AGREEMENT DATED 16.07.1999. THE A ND WAS SOLD SHRI YATIN DOSAI AND SHRI LAHERI SHAH BY AGREEMENTS FOR SALE DATED 09.08.2004 FOR A TOTAL CONSIDERATION OF RS. 69,05,294/- AND RS. 24,52,362/- RESPECTIVELY. AS PER THE AGREEMENT, THE -LAST INSTALLMENT OF THE CONSIDERATION IS TO BE RECEIVED ON 05.07.200 5 WHICH IS AFTER I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 4 THE END OF THE BLOCK PERIOD AND THE SAME WILL BE OF FERED FOR TAXATION AS AND WHEN THE TRANSACTION IS COMPLETED THE APPELLANT HAD ENTERED INTO AN AGREEMENT FOR PUR CHASE OF LEND AT AKOTA BEARING R.S. NO. 88-91/PAIKI AND 92/1 PAIKI F INAL PLOT NO. 142 ADMEASURING 3452 SQ.MTRS. AND FINAL PLOT NO. 157 AD MEASURING 5849 SQ.MTRS. ON 16.07.1999 FROM TAMBOLI FAMILY CON SISTING OF 15 MEMBERS AS HOLDERS OF THE LAND. SUCH LAND WAS AGREE D TO BE PURCHASED BY THE APPELLANT ALONG WITH SHRI JAYANTI PATEL, SHRI RAMESH PATEL AND SHRI REMAN PATEL BY SALE CUM-DEVELOPMENT AGREEMENT. AS PER THIS AGREEMENT, THE AREA OF LAND IS 9301 SQ. M. EQUIVALENT TO 1,00,078 SQ. FT. AT AN AGREED CONSIDERATION OF RS.75 PER SQ. FT. A CONSIDERATION OF RS. 75,05,907/-. PARA 3 OF THE AGREEMENT DATED 16.07.1999 CLARIFIES THAT THE SELLERS OF THE LAND I .E. TAMBOLI FAMILY HAD EARLIER ENTERED INTO SIMILAR AGREEMENT WITH THE APPELLANT AND OTHERS ON 06.09.1994 AND HAD ALSO GIVEN IRREVOCABLE POWER OF ATTORNEY WHICH, WAS NOTARIZED BY NOTARY SHRI JAGDIS H BHATT AT SR. NO. 7840. THE PARTIES CONFIRM THAT ON THE BASIS OF SAID AGREEMENT AND POWER OF ATTORNEY OF 06.09.1994 THE PURCHASERS I.E. THE APPELLANT, HAVE NOT FURTHER DEALT WITH THE LAND. TH E AGREEMENT AND IRREVOCABLE POWER OF ATTORNEY OF 06.09.1994 IS NOW CANCELLED AND THAT A FRESH POWER OF ATTORNEY IS MADE ALONG WITH T HE PRESENT DEVELOPMENT AGREEMENT (I.E. THE AGREEMENT OF 16.07. 1999). IN THE AGREEMENT, IT IS ACCEPTED THAT THE PURCHASER S I.E. THE APPELLANT ON THE BASIS ORAL AGREEMENT ON 06.09.1994 HAVE INCURRED EXPENSES IN RELATION TO THE LEGAL AND OTHER PROCEDU RES IN RELATION TO THE SAID LAND. IT IS FURTHER AGREED THAT AS PER THE EARLIER AGREEM ENT OF 06.09.1994, THE PURCHASERS HAVE PAID TO THE SELLERS I.E. TAMBO LI FAMILY THE AGREED CONSIDERATION IN INSTALLMENTS FROM TIME TO T IME. OF THE TOTAL CONSIDERATION I.E. RS. 75,05,907/-, AN AMOUNT OF RS. 26.00 LAKHS IS OUTSTANDING WHICH WAS TO BE PAID BEFORE 15.10.1999. SUBSEQUENT TO SUCH AGREEMENT IT WAS REALIZED BY THE PURCHASERS THAT THE IMPUGNED LAND WAS SUBJECTED TO GOVERNMENT RESTRICTIONS WITH REGARD TO ITS DEVELOPMENT, OWNERSHIP ETC. AND THAT FOR OBTAINING THE VARIOUS CLEARANCES FROM THE GOVERNMENT, A SUBST ANTIAL PREMIUM AT THE RATE OF RS. 300 TO 350 PER SQ. FT, WAS REQUIRED TO BE PAID TO THE GOVERNMENT AND THAT WHILE ENTERING INTO THE AGR EEMENT WITH THE SELLERS, THE PURCHASERS HAD CONSIDERED SUCH PREMIUM AMOUNT AT RS. 176/- PER SQ. FT. ON ADHOC BASIS. THE PAYMENT OF SUBSTANTIAL AMOUNT TO THE GOVERNMENT WAS DIFFICULT FOR THE APPELLANT CONSIDERING THEIR FINANCIAL MEANS AND THUS, THEY ENTERED INTO A FURTHER AGREEMENT FOR SALE OF THE SAID LAND WITH SH RI I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 5 YATIN DESAI AND OTHERS IN RESPECT OF 62959 SQ. FT. OF LAND OF F.P. NO. 157 AND WITH SHRI LEHRI SHAH AND OTHERS FOR 37157 SQ.. FT. OF LAND ON 08.06.2002 IN RESPECT OF F.P. NO.142. FOR SUBSTANTIAL PERIOD THE CLEARANCES FROM THE GOVERNME NT WERE NOT FORTHCOMING AND, THEREFORE, A FURTHER AGREEMENT OF UNDERSTANDING WAS MADE BETWEEN ALL THE PARTIES ON 09.08.2004. THE PARTIES BEING THE APPELLANT AND OTHERS (AS ORIGINAL PURCHASERS), TAMBOLI AND OTHERS (THE LANDOWNERS), SHRI YATIN DESAI AND OTHERS AS WE LL AS SHRI LEHRI SHAH AND OTHERS (THE PRESENT PURCHASERS). AS PER THIS AGREEMENT, A REFERENCE TO THE EARLIER A GREEMENT OF 16.07.1999 IS MADE. IT ALSO REFERS TO THE AGREEMENT OF 08.06.2002 BETWEEN THE APPELLANT AND OTHERS WITH SHRI YATIN DE SAI AND OTHERS. AFTER MAKING REFERENCE OF THE EARLIER AGREEMENTS DATED 16.07.1999 AND 08.06.2002, THE PRESENT PURCHASERS I.E. SHRI YA TIN DESAI AND OTHERS HAVE AGREED TO MAKE THE PAYMENT AT THE RATE OF RS. 141 PER SQ. FT. WHICH INCLUDE RS. 75 PER SQ. FT. PAYABLE TO TAM BOLI AND OTHERS (THE LAND OWNERS) AND RS. 66 PER SQ. FT. TO THE APP ELLANT AND OTHERS (ORIGINAL PURCHASERS). IT WAS AGREED THAT THE TAMBOLI FAMILY WOULD BE ENTI TLED TO AN ADDITIONAL COMPENSATION AT THE RATE RS. 10 PER SQ, FT. BEYOND RS. 75 PER SQ. FT. THIS ADDITIONAL COMPENSATION IS ON ACCO UNT OF DELAY. IT WAS ACKNOWLEDGED THAT THE APPELLANT AND OTHERS H AVE PAID A CONSIDERATION OF RS. 24,50,000 TO M/S. TAMBOLI AND OTHERS AS PER AGREEMENT DATED 16.07.1999 BY CHEQUES. THE CONSIDERATION OF RS. 53,51,515/- MADE TO TAMBOL I AND OTHERS INCLUDES THE AMOUNT OF RS. 24.50 LAKHS PAID BY THE APPELLANT AND OTHERS. IT ALSO REFERS TO THE PARTICULARS OF PAYMENT MADE T O THE APPELLANT AND OTHERS OF RS. 69,05,294/- AT RS. 66 PER SQ. FT. BY THE PRESENT PURCHASERS. THIS PAYMENT INCLUDES THE REIMBURSEMENT OF RS. 24.50 LAKHS PAID BY THE APPELLANT AND OTHERS TO TAMBOLI A ND OTHERS. THE PARTICULARS OF THE PAYMENT IS AS UNDER: AMOUNT (RS.) PARTICULARS 5,00,000.00 AMOUNT PAID BY CHEQUE NO.765941 DT. 19.10.95 TO SHRI DEVENDRA PASALE AND SHRI JAYANTIBHAI PATEL 4,294.00 AMOUNT PAID BY CASH ON 09. 08. 2004 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793422 DRAWN ON BANK OF MAHARASHTRA ON 05 10.2004 TO SHRI RAMESHBHAI I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 6 PATEL 8,00,000.00 AMOUNT PAID BY CHEQUE NO, 793423 ON BANK OF MAHARASHTRA DRAWN ON 5.10.2004 TO SHRI DEVENDRA G. PASALE 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793424 DRAWN ON BANK OF MAHARASHTRA ON 5.1.2005 TO SHRI DEVENDRA G. PASALE 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793425 DRAWN ON BANK OF MAHARASHTRA ON 5. 1.2005 TO SHRI RAMANBHAI M PATEL 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793426 DIVWN ON BANK OF MAHARASHTRA ON 5.4.2005 TO SHRI JAYANTIBHAI PATEL 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793427 DRAWN ON BANK OF MAHARASHTRA ON 5. 4. 2005 TO SHRI DEVENDRA G. PASALE 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793428 DRAWN ON BANK OF MAHARASHTRA ON 5.7.2005 TO SHRI DEVENDRA G. PASALE 8,00,000.00 AMOUNT PAID BY CHEQUE NO. 793429 DRAWN ON BANK OF MAHARASHTRA ON 5.7.2005 TO SHRI JAYANTIBHAI PATEL 69,05,294.00 TOTAL (RUPEES SIXTY NINE LAKH FIVE THOUSAND TWO HUNDRED NINETY FOUR ONLY) IT ALSO CLARIFIES THAT TOWARDS SUCH CONSIDERATION, THE APPELLANT AND OTHERS ALONG WITH TAMBOLI AND OTHERS HAVE ASSIGNED ALL THE RIGHTS IN THE SAID AKOTA LAND IN FAVOUR OF SHRI YATIN DESAI W ITH NO FURTHER CLAIMS. THE AGREEMENT WITH SHRI LEHRI SHAH AND OTHERS IS IN RESPECT OF LAND ADMEASURING 37157 SQ. FT., OF F.P. NO. 142 WHICH WAS AGREED TO BE SOLD BY THE APPELLANT AND OTHERS TO SHRI LEHRI SHAH BY AGREEMENT DATED 16.07.1999. SIMILAR IS THE AGREEMENT WITH SHR I YATIN DESAI, WHICH IS IN RESPECT OF 62959 SQ. FT. OF F.P. NO. 15 7. THE UNDERSTANDING AGREEMENT OF 09.08.2004 ALSO RECO RDS THE SIMILAR TERMS AS RECORDED WITH SHRI YATIN DESAI. PARA 4 REFERS TO THE PAYMENT MADE BY THE APPELLANT AND'OTHERS TO THE LAN DOWNERS IN RESPECT OF F.P. NO. 142 AS PER THE FOLLOWING DETAIL S: AMOUNT RS. CHEQUE NO. / DATE NAME OF THE BANK NAME I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 7 5,00,000.00 6988/25.03.95 BARODA CENTRAL CO- OP. BANK LTD. KANTIBHAI TAMBOLI 5,00,000.00 5991 / 25. 03. 9 5 -DO- KANTIBHAI TAMBOLI 6,00,000.00 22592/17.07.96 -DO- BABARBHA I TAMBOLI 2,50,000.00 22618/17.07.96 -DO- BABARBHAI TAMBOLI 5,00,000.00 19458/18.08.97 -DO- SHASHIKANTBHAI TAMBOLI 1,00,000.00 21955/27.09.97 - DO - SHASHIKANTBHAI TAMBOLI 1,00,000.00 20779/27.09.97 -DO- SHASHIKANTBHAI TAMBOLI 25,50,000.00 TOTAL (RUPEES TWENTY FIVE LAKH FIFTY THOUSAND ONLY) IT ALSO REFERS TO THE TOTAL PAYMENT OF RS. 31,58,34 5/- @ 85/- PER SQ. FT. TO BE PAID TO THE LANDOWNERS, TAMBOLI AND O THERS AND RS. 24,53,362/- @ RS. 66/- PER SQ. FT. TO THE APPELLANT AND OTHERS BY THE PRESENT PURCHASER SHRI LEHRI SHAH. THE DETAILS OF SUCH PAYMENT, IS AS BELOW: AMOUNT (RS.) PARTICULARS 24,50,000.00 PAYMENT MADE BY THE SECOND PARTY I.E. THE APPELLANT ON BEHALF OF THE FIRST PARTY I.E. THE PRESENT PURCHASER 8,345.00 AMOUNT PAID IN CASH ON 09 07.2004 . 3,00,000.00 CHEQUE NO. 714984 TO CHEQUE NO. 714990 & 718121 DRAWN ON BANK OF RAJASTHAN LTD., BARODA : 09.08,2004 3,00,000.00 CHEQUE NO. 714645 TO CHEQUE NO. 717650 & 712821, 712822 DRAWN ON BANK OF RAJASTHAN LID., BARODA : 09.08.2004 31,58,345.00 TOTAL (RUPEES THIRTY ONE LAKH FIFTY EIGHT THOUSAND THREE HUNDRED FORTY FIVE ONLY) I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 8 ON PERUSAL OF THE DOCUMENTS, WHICH IS THE BASIS FOR MAKING THE ADDITION OF RS. 75.08 LAKHS AS UNDISCLOSED PAYMENT FOR PURCHASE OF AKOTA LAND BY THE APPELLANT BY THE LD. A.O., IT WOULD BE EVIDE NT THAT THE CONSIDERATION, IN RESPECT OF THE AKOTA LAN D WHICH IS MADE BY THE APPELLANT IS AS UNDER: FOR THE PURCHASE OF F. P. NO. 157 AMOUNT RS. CHEQUE NO. / DATE NAME OF THE BANK NAME 10,00,000.00 6992/25.11.95 BARODA CENTRAL CO.OP. BANK LTD. KANTIBHAI TAMBOLI 4,00,000.00 6998/17.07.96 -DO- BABARBHAI TAMBOLI 2,50,000.00 207706/17.07.96 - DO - BABARBHAI TAMBOLI 8,00,000.00 19470/20.09.97 - DO - SHASHIBHAI TAMBOLO 24,50,000.00 TOTAL (RUPEES TWENTY FOUR LAKH FIFTY THOUSAND ONL Y) FOR THE PURCHASE OF F.P. NO. 142 AMOUNT RS. CHEQUE NO. DATE NAME OF THE BANK NAME 5,00,000.00 6988/25.03.95 BARODA CENTRAL CO-OP. BANK LTD. KANTIBHAI TAMBOLI 5,00,000.00 6991 / 25.03.95 -DO- KANTIBHAI TAMBOLI 6,00,000.00 22592/17.07.96 -DO- BABARBHAI TAMBOLI 2,50,000.00 22618/17.07.96 DO- BABARBHAI TAMBOLI 5.00,000.00 19458/18.08.97 -DO- SHASHIKANTBHAI TAMBOLI 1,00,000.00 21955/27.09.97 -DO- SHASHIKANTBHAI TAMBOLI 1,00,000.00 20779/27.09.97 -DO- SHASHIKARITBHAI TAMBOLI 25,50,000.00 TOTAL (RUPEES TWENTY FIVE LAKH FIFTY THOUSAND ONLY) I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 9 IT IS EVIDENT FROM THESE VERY AGREEMENTS / DOCUMENT S / DEEDS FOUND AND SEIZED IN THE COURSE OF SEARCH THAT THE PAYMENT S MADE BY THE APPELLANT IS ONLY RS.50.00 LAKHS AND THAT THE BALAN CE CONSIDERATION PAYABLE TO THE LANDOWNERS IS MADE BY THE PRESENT PU RCHASERS DIRECTLY. EVEN THE PAYMENT OF CONSIDERATION OF RS. 50.00 LAKHS MADE BY THE APPELLANT, THE SAME IS EFFECTED BETWEEN 1995 AND 1997, VERY MUCH PRIOR TO THE YEAR UNDER CONSIDERATION AND, THE REFORE, IN THE OPINION OF THE APPELLANT CANNOT BE A SUBJECT MATTER OF ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. THE APPELLANT FURTHER SUBMITS THAT THE ADDITION MAD E BY THE LD. A.O. IS WITHOUT AFFORDING ANY OPPORTUNITY TO THE APPELLA NT AS IS EVIDENT FROM THE INFORMATION SOUGHT FROM THE APPELLANT VIDE QUESTIONNAIRE DATED 18.12.2006. IN THE QUESTIONNAIRE ITSELF THE L D. A.O. ADMITS TO THE FACT OF PURCHASE OF LAND IS IN THE A.Y. 1994-95 . THE LD. A.O., IN THE QUESTIONNAIRE, IS ONLY SEEKING INFORMATION WITH RESPECT TO THE SALE OF AKOTA LAND IN THE ASSESSMENT YEAR 2000-01 AND THE ASSESSMENT YEAR 2003-04 WHICH ALLEGEDLY IS NOT REFL ECTED IN THE ACCOUNTS. THIS FINDING OF NON-RECORDING OF SALES IN THE BOOKS IS STATED TO BE THE ALLEGED ADMISSION BY APPELLANT IN SEARCH PROCEEDINGS. THE APPELLANT FURTHER STATES THAT FROM THE PERUSAL OF COPY OF ALL THE STATEMENTS RECORDED IN THE COURSE OF SEARCH AND POS T SEARCH PROCEEDINGS, NO REFERENCE IN RELATION TO AKOTA LAND WAS FOUND AND, THEREFORE, THE APPELLANT IS UNAWARE THE BASIS OF AD MISSION REFERRED BY THE LD. A.O. IN THE QUESTIONNAIRE. THE APPELLANT CLARIFIED THAT THE SALE AND PROFIT OF SUCH LAND IS TO BE OFFERED IN TH E ASSESSMENT YEAR 2003-07 AS THE LAST INSTALLMENT TOWARDS SALE OF SUC H LAND WAS TO BE RECEIVED ON 5.7.2005. AS PER THE COMPUTATION PREPAR ED FOR THE A.Y 2006-07, THE INCOME IN RESPECT OF AKOTA LAND IS DET ERMINED AT RS. 33,03,828/- AS REGARDS THE DECLARATION OF RECEIPT OF CONSIDERAT ION FROM SHRI YATIN DESAI AND SHRI LEHRI SHAH IN THE RETURNS FILED IS C ONCERNED, IT IS CLARIFIED AND SUBMITTED THAT AS PER THE REGULATORY FOLLOWED METHOD OF ACCOUNTING, THE AMOUNTS RECEIVED FROM SHRI YATIN DE SAI AND SHRI LEHRI SHAH ARE SHOWN AS ADVANCE AGAINST SALE OF LAN D. THE ADVANCE FOR SALE OF LAND IS INCLUSIVE OF THE FOLLOWING AMOU NTS: DATE PARTICULARS AMOUNT RS. 7-10-2004 AMOUNT RECEIVED FROM SHRII LEHRI SHAH VIDE CHEQUE NO. 718214 5,00,000 7-10-2004 AMOUNT RECEIVED FROM SHRI YATIN DESAI VIDE CHEQUE NO. 793423 8,00,000 I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 10 12-1-2005 AMOUNT RECEIVED FROM SHRI YATIN DESAI VIDE CHEQUE NO. 793424 8,00,000 2-2-2005 AMOUNT RECEIVED FROM SMT PRABHAVATI SHAH VIDE CHEGUE NO.. 718125 5,00,000 7-4-2005 AMOUNT RECEIVED FROM SHRI YATIN DESAI VIDE CHEQUE NO. 800655 8,00,000 17-8-2005 AMOUNT RECEIVED FROM SHRI YATIN DESAI VIDE CHEQUE NO. 806118 8, CO, 000 42,00,000 IT IS, THUS, SUBMITTED THAT THE LD. A.O. HAS NOT AP PRECIATED THE FACTS IN RELATION TO THE TRANSACTION AND HAS MADE T HE ADDITION AND THUS CONSIDERING THE EXPLANATION FURNISHED, THE EVI DENCES ON RECORD AND ALL OTHER MATERIAL, THE LD. A.O. MAY KINDLY BE DIRECTED TO DELETE THE IMPUGNED ADDITION OF RS. 37.54 LAKHS. 5. THESE WRITTEN SUBMISSIONS WERE FORWARDED BY LD. CIT(A) TO THE A.O. FOR HIS COMMENTS. THE A.O.S COMMENTS WERE AS UNDER:- IN COURSE OF STATEMENT RECORDED DURING SEARCH, THE ASSESSES HAD STATED CLEARLY THAT IN 1994, 1.00 LAKH SQ.FT. OF LAND WAS PURCHASED AT A CONSIDERATION OF RS.95 PER SQ.FT.' ON THE BASIS OF THIS STATEMENT, THE ASSESSES WAS ASKED TO GIVE DETAILS OF PURCHASE AND SUBSEQUENT SALE VIDE QUESTION NO. 11 OF QUESTIO NNAIRE DATED 18/12/2006. HOWEVER, FROM REPLY GIVEN BY THE ASS ESSEE, IT WAS REVEALED THAT THE SAID LAND WAS PURCHASED NOT IN TH E YEAR 1994, BUT IN F. Y. 1999-2000 I.E. A. Y.20.00-01. THE ASSESSEE HAS STATED IN HIS SUBMISSION THAT AS T HE PAYMENT FOR THE PURCHASE OF SAID LAND WAS MADE IN YEARS 1995 TO 1997, THE SAME WERE OUTSIDE THE PURVIEW OF THE DEPARTMENT AND HENCE THE PAYMENTS MADE COULD NOT BE ADDED BACK. HOWEVER, T HIS CONTENTION OF THE ASSESSEE IS INCORRECT. AS IN TH E PRESENT CASE THE PURCHASE AGREEMENT WAS MADE ON 16/07/1999, THEREFOR E PURCHASE IS MADE EFFECTIVE ON THIS DAY ITSELF, HENCE ALL THE INVESTMENTS MADE FOR THIS PURCHASE, WHETHER MADE PRIOR TO, OR SUBSEQ UENT TO THIS DATE, ARE TO BE CONSIDERED FOR THIS YEAR ONLY, I.E. A.Y. 2000-01. I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 11 THEREFORE THE PAYMENT OF RS.24.5 LAKHS IS WELL WITH IN THE PURVIEW OF THIS ASSESSMENT YEAR. WITH RESPECT TO THE BALANCE PAYMENT OUT OF RS.53,51 ,515/- IT CAN BE SEEN FROM THE AGREEMENT AS WELL AS THE SUBMISSION OF THE ASSESSEE, IT WAS MADE IN 2004 AND MOST OF IT IS CAS H. THE ABOVE PURCHASE DOES NOT FIND PLACE ANYWHERE IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, A FACT WHICH HAS NOT BEEN DENIED BY THE ASSESSEE AT ANY POINT OF TIME. AS THE INVESTMENT IS OUT OF BOOKS AND AS THE SOURCE HAS NOT BEEN EXPLAINED BY THE ASSESSEE EXCEPT FOR FILING A FEW A GREEMENTS WHICH DO NOT IN ANY WAY EXPLAIN THE SOURCE, IT IS SUBMITT ED THAT THE ADDITION ON UNDISCLOSED INVESTMENT IN THE SAID LAND HAS BEEN CORRECTLY MADE, AND THAT SAME SHOULD BE CONFIRMED. THE ASSESSEE HAS ALLEGED THAT THE ABOVE ADDITION WA S MADE WITHOUT GIVING AMPLE, SUPPORT OF WHICH YOUR KIND AT TENTION IS DRAWN TO THE ORDER SHEET ENTRY DATED 28/12/2006. IN COURS E OF HEARING, THE ASSESSEE WAS CLEARLY TOLD THAT THE TRANSACTION OF AKOTA LAND IS FOUND TO BE MADE OUT OF BOOKS AND HENCE THE SAME IS LIABLE TO ADDITION. THE RELEVANT EXTRACT IS AS FOLLOWS: 'FURTHER, WITH RESPECT TO LAND AT AKOTA, NEITHER TH E SALE, NOR PURCHASE HAS BEEN REFLECTED IN BOOKS, OR RETURN. THE SHARE OF TH E ASSESSEE IS APPX. 50% IN THE LAND'. IT IS FURTHER BROUGHT TO YOUR KIND NOTICE THAT THE NOTICE U/S.153A(A) WAS ISSUED TO THE ASSESSEE ON 19/10/2005. HOWEVER, NO RETURN IN RESPONSE WAS FILED BY THE ASSESSEE. FINALLY, A SHOW -CAUSE NOTICE FOR EX PARTE ASSESSMENT WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THIS RETURN WAS FILED BY THE ASSESSEE ON 18/12/2006 . AS THE CASE WAS GETTING TIME BARRED ON 31/12/2006 AND THE RETUR N WAS FILED ONLY 13 DAYS PRIOR TO THE TIME BARRING DATE, VERY L IMITED TIME WAS AVAILABLE WITH THE ASSESSING OFFICER IN WHICH AS MU CH OPPORTUNITY WAS GIVEN TO THE ASSESSEE AS WAS POSSIBLE. HENCE, I F THE ASSESSEE COMPLAINS OF LACK OF AMPLE OPPORTUNITY, ONLY HE HIM SELF CAN BE BLAMED FOR IT AND NOT THE ASSESSING OFFICER. ON THE BASIS OF ABOVE ARGUMENTS, IT IS PRAYED THAT THE CONTENTION OF THE ASSESSEE BE DISREGARDED AND THE ADDITION MAD E AS ABOVE BE CONFIRMED. 6. LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. BY O BSERVING AS UNDER:- I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 12 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LEA RNED COUNSEL AS WELL AS GONE THROUGH THE RECORDS. ON PERUSAL OF ASS ESSMENT ORDER, IT HAS BEEN NOTICED THAT THE AKOTA LAND WAS PURCHAS ED NOT IN THE YEAR 1994 BUT IN FINANCIAL YEAR 1999-2000 RELEVANT TO A.Y.2000- 01. THE PURCHASE OF AKOTA LAND DID NOT FIND PLACE ANYWHERE IN THE BOOKS OF ACCOUNTS OF THE APPELLANT, A FACT WHICH HA D NOT BEEN DENIED BY THE APPELLANT AT ANY POINT OF TIME THEREF CRE, THE INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOU NTS FOR FINANCIAL YEAR 1999-2000 RELEVANT TO A.Y. 2000-01. HOWEVER, THE APPELLANT HAD FILED A FEW AGREEMENTS FOR SALE WHICH DO NOT IN ANY WAY EXPLAIN THE SOURCE OF INVESTMENT. THE ASSESSING OFFICER HAD EXPRESSED INTENTION IN THE ORDER SHEET ITSELF DATED 28/12/2006 TO MAKE ADDITION IN THE COURSE OF HEARING, WHEN THE AP PELLANT WAS TOLD BY THE ASSESSING OFFICER THAT THE TRANSACTION OF SALE & PURCHASE OF AKOTA LAND FOUND TO BE MADE OUT OF BOOK S OF ACCOUNTS AND HENCE THE SAME WAS LIABLE TO BE ADDED. THE APP ELLANT WAS FULLY AWARE THE BASIS OF MAKING ADDITIONS. THERE W AS NO LACK OF OPPORTUNITY IN THE PRESENT CASE ESPECIALLY WHEN RET URN WAS FILED ONLY 13 DAYS PRIOR TO THE TIME BARRING DATE SINCE N OTICE U/S 153A WAS ISSUED ON 19/10/2005 WHEREAS THE RETURN WAS FIL ED ON 18/12/2006 WHEN CASE WAS GETTING TIME BARRED ON 31. 12.2006. HENCE, ADDITION OF RS.37,54,000/- ON ACCOUNT OF UND ISCLOSED INVESTMENT IN AKOTA LAND I.E. @ 50% OF TOTAL INVEST MENT OF RS.75.08 LAKHS DURING THE YEAR. HOWEVER, THE PURCH ASE AGREEMENT WAS MADE ON 16/07/1999, THEREFORE, PURCHASE WAS MAD E EFFECTIVE ON THIS DAY ITSELF. THEREFORE, THE PAYMENTS MADE E ARLIER TO PURCHASE AGREEMENT CANNOT BE TREATED AS COMPLETION OF TRANSACTION AS CONTENDED BY LEARNED COUNSEL. THE TRANSACTION G ETS COMPLETED ONLY ON EXECUTION OF LEGAL DOCUMENTS. HOWEVER, THE EARLIER PAYMENTS CAN BE TREATED AS ADVANCE PAYMENTS IN FURT HERANCE OF PURCHASE AGREEMENT EXECUTED ON 16.07.1999. HENCE, ALL THE INVESTMENTS MADE FOR THIS PURCHASE OF AKOTA LAND (W HETHER MADE PRIOR TO, OR SUBSEQUENT TO THIS DATE) ARE REQUIRED TO BE CONSIDERED IN THE FINANCIAL YEAR 1999-2000 RELEVANT TO THE A.Y . 2000-01. THEREFORE THE PAYMENT OF RS. 24.5 LAKHS IS WELL WIT HIN THE PURVIEW OF THE ASSESSMENT YEAR 2000-01. THE BALANCE PAYMEN T OF RS.53,51,515/- WAS ADMITTEDLY MADE IN THE YEAR 2004 AND MOST OF IT WAS IN CASH. THEREFORE, THE CONTENTIONS OF LD. COUNSEL THAT THE PAYMENT FOR THE PURCHASE OF AKOTA LAND WAS MADE IN YEARS 1995 TO 1997 AND THESE INVESTMENTS WERE OUTSIDE THE PURVIEW OF MAKING ASSESSMENT UNDER INCOME TAX ACT, 1961 CANNOT BE ACC EDED TO. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT ON THE ONE HAND, EARLIER PAYMENTS RECEIVED AS ADVANCE IN YEARS 1995 TO 1997 BY THE APPELLANT WERE TREATED OUTSIDE THE PURVIEW OF I.T. ACT, 1961 ON THE PRETEXT OF BEYOND THE PERIOD OF THE ASSESSMENT, BUT ON THE OTHER HAND, LD. COUNSEL HAS CONTENDED THAT THE CONSIDERAT ION AMOUNT RECEIVED FROM SHRI YATIN DESAI AND SHRI LEHRI SHAH, WILL BE SHOWN IN THE RETURN SUBSEQUENTLY SINCE THE LAST INSTALLME NT WAS TO BE RECEIVED ON 05.07.2005 (WHICH IS AFTER THE END OF T HE BLOCK PERIOD) I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 13 AS PER THE REGULARLY FOLLOWED METHOD OF ACCOUNTING. BECAUSE, THE AMOUNTS RECEIVED FROM SHRI YATIN DESAI AND SHRI LEH RI SHAH ARE ADVANCE AGAINST SALE OF LAND. THE LAND WAS SOLD TO SHRI YATIN DESAI AND SHRI LAHERI SHAH BY AGREEMENTS FOR SALE DATED 0 9.08.2004 FOR A TOTAL CONSIDERATION OF RS.69,05,294/- AND RS.24,5 2,362/- RESPECTIVELY. THESE CONTENTIONS OF LD. COUNSEL ARE INCONSISTENT WITH THE CONTENTIONS OF LEARNED COUNSEL SINCE THE P URCHASE AGREEMENT MADE ON 16/07/1999 ITSELF. HENCE, THESE CONTENTIONS CANNOT BE ACCEDED TO AND HEREBY REJECTED & DISMISSE D. MOREOVER, THE SALE HAS TO BE TAKEN AS COMPLETE WHEN DEED IS E XECUTED AND REGISTERED AS EVIDENCE OF COMPLETION OF TRANSACTION . THE CONTENTIONS OF LD. COUNSEL THAT SALE IS COMPLETE WH EN LAST INSTALLMENT TO BE RECEIVED ON 5.7.2005 BY THE APPEL LANT HAS NO RELEVANCE IN THE PRESENT CASE BECAUSE ONCE LEGAL OW NERSHIP IS TRANSFERRED AFTER EXECUTION OF REGISTERED SALE DEED ON 09.08.2004, THEN IRRESPECTIVE OF RECEIPT OF PAYMENTS THE TRANSA CTIONS OF SALE OR PURCHASE OF LAND/PROPERTY GETS COMPLETED/FINISHED, THEREFORE, THE CONTENTIONS OF LD. COUNSEL CANNOT BE ACCEDED TO AND HENCE ARE HEREBY REJECTED AND DISMISSED. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO INFIRMITY IN MAKING THE ADDITION ON ACCOUNT OF INVESTMENT IN PURCHASE OF AK OTA LAND WHICH IS HEREBY CONFIRMED. THE SINGLE GROUND OF APPEAL I S DISMISSED. 7. BEFORE US LD. COUNSEL OF THE ASSESSEE PLACED REL IANCE ON THE SUBMISSIONS MADE BY ASSESSEE BEFORE LD. CIT(A) WHICH HAVE BEEN REPRODUCED BY US IN PARA NO.4 OF THIS ORDER AND TOOK US TO THE RELEVANT PAGES OF THE PAPER BOOK TO SUBSTANTIATE THE CONTENTS OF THESE WRITTEN SUBMISSI ONS. HE CONCLUDED HIS ARGUMENTS BY STATING THAT SINCE NO PAYMENT TOWARDS PURCHASE OF LAND HAS BEEN MADE DURING THE YEAR UNDER APPEAL, NO ADDITION CAN BE MADE FOR UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND THEREF ORE ADDITION MADE BY THE A.O. AND SUSTAINED BY LD. CIT(A) OF RS.37,40,000/- MAY KINDLY BE DELETED. LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF LD. CIT(A) AND FURTHER SUBMITTED THAT REVENUE DETECTED THE INVESTMENT MADE BY THE ASSESSEE TOWARDS PURCHASE OF LAND DURING THE YEAR UNDER APPE AL AND SINCE THE SAME REMAINED UNEXPLAINED BY THE ASSESSEE, IT HAS RIGHTL Y BEEN TREATED AS INCOME OF THE ASSESSEE FOR THE YEAR UNDER APPEAL BY INVOKI NG THE PROVISION OF SECTION I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 14 69 OF THE ACT. HE, THEREFORE, SUBMITTED THAT THE O RDER PASSED BY LD. CIT(A) MAY KINDLY BE UPHELD. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT THE ASSESSEE, VIDE SALE CUM- DEVELOPMENT AGREEMENT DAT ED 16.07.1999, PURCHASED LAND AT AKOTA WHEREIN FINAL PLOT NO.142 M EASURING 3452 SQ. MTS. AND FINAL PLOT NO.157 MEASURING 5849 SQ. MES. FROM TAMBOLI FAMILY. AS PER THIS AGREEMENT THE AREA OF LAND WAS 9301 SQ. MTS. EQUIVALENT TO 100078/- SQ. FT. AT ON AGREED CONSIDERATION OF RS.75/- PER S Q. FT. THE TOTAL CONSIDERATION WAS OF RS.75,05,907/-. THIS AGREEMEN T ALSO MENTIONS THAT THE SELLERS OF THE LAND I.E. TAMBOLI FAMILY, HAD EARLIE R ENTERED INTO SIMILAR AGREEMENT WITH THE ASSESSEE AND OTHERS ON 06.09.199 4 AND HAD ALSO GIVEN IRREVOCABLE POWER OF ATTORNEY IN FAVOUR OF THE ASSE SSEE. THE AGREEMENT DATED 06.09.1994 AND IRREVOCABLE POWER OF ATTORNEY OF SAM E DATE WERE NOW CANCELLED AND A FRESH POWER OF ATTORNEY WAS MADE AL ONG WITH THE SALE CUM- DEVELOPMENT AGREEMENT DATED 16.07.1999. IN PURSUAN CE OF AGREEMENT DATED 6 TH SEPTEMBER, 1994 FOLLOWING PAYMENTS WERE MADE BY TH E ASSESSEE TO THE SELLER TAMBOLI FAMILY FOR THE PURCHASE OF FINAL PLO T NO.157 AND FINAL PLOT NO.142:- FOR THE PURCHASE OF F.P.NO.157 AMOUNT RS. CHEQUE NO. / DATE NAME OF THE BANK NAME 10,00,000.00 6992/25.11.95 BARODA CENTRAL CO-OP. BANK LTD. KANTIBHAI TAMBOLI 4,00,000.00 6998/17.07.96 -DO- BABARBHAI TAMBOLI 2,50,000.00 207706/17.07.96 - DO - BABARBHAI TAMBOLI I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 15 8,00,000.00 19470/20.09.97 - DO - SHASHIBHAI TAMBOLO 24,50,000.00 TOTAL (RUPEES TWENTY FOUR LAKH FIFTY THOUSAND ONL Y) FOR THE PURCHASE OF F.P. NO. 142 AMOUNT RS. CHEQUE NO. DATE NAME OF THE BANK NAME 5,00,000.00 6988/25.03.95 BARODA CENTRAL CO- OP. BANK LTD. KANTIBHAI TAMBOLI 5,00,000.00 6991 / 25.03.95 -DO- KANTIBHAI TAMBOLI 6,00,000.00 22592/17.07.96 -DO- BABARBHAI TAMBOLI 2,50,000.00 22618/17.07.96 DO- BABARBHAI TAMBOLI 5.00,000.00 19458/18.08.97 -DO- SHASHIKANTBHAI TAMBOLI 1,00,000.00 21955/27.09.97 -DO- SHASHIKANTBHAI TAMBOLI 1,00,000.00 20779/27.09.97 -DO- SHASHIKARITBHAI TAMBOLI 25,50,000.00 TOTAL (RUPEES TWENTY FIVE LAKH FIFTY THOUSAND ONLY) THUS THE TOTAL PAYMENT OF RS.50/- LAKHS WAS MADE BY THE ASSESSEE BETWEEN 1995 TO 1997. ALL THESE PAYMENTS WERE MADE BY ASSE SSEE BY CHEQUE. IT IS ALSO NOT IN DISPUTE THAT THE REMAINING AMOUNT WAS P AID BY THE ASSESSEE TO THE SELLERS OF THE LAND DURING THE ASSESSMENT YEAR 2006 -07, WHEN THIS LAND WAS SOLD BY THE ASSESSEE TO SHRI YATIN DESAI AND SHRI L EHRI SHAH VIDE SALE DEED EXECUTED ON 5 TH JULY, 2005 AND THE PROFIT ON SALE OF THIS LAND WAS OFFERED FOR TAXATION. THUS THERE IS NO DISPUTE ABOUT THE FACT THAT NO PAYMENT WAS MADE BY THE ASSESSEE TOWARDS THE PURCHASE OF LAND DURING THE YEAR UNDER APPEAL BY THE ASSESSEE TO TAMBOLI FAMILY. ON THESE FACTS NO ADDITION CAN BE MADE FOR I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 16 UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. THE ARGU MENT ADVANCED BY LD. D.R. THAT INVESTMENT IN THE LAND MADE BY THE ASSESS EE IN EARLIER YEARS CAN BE TAXED IN THE YEAR IN WHICH THE SAME WAS DETECTED BY THE REVENUE, IF THE SAME REMAINED UNEXPLAINED BY THE ASSESSEE, IS DEVOID OF ANY MERIT AS THE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE INVESTMENT MADE BY ASSESSEE IN EARLIER YEARS THROUGH BANKING CHANNELS WAS NOT OUT OF EXPLAINED SOURCE. HE HAS SIMPLY TREATED ALL THE INVESTMENTS MADE BY THE ASSESSEE IN EARLIER YEARS I.E. FROM 1995 TO 1997 AS THE INVESTM ENT OF THE CURRENT YEAR AND SINCE HE DID NOT FIND THESE INVESTMENTS IN THE BOOK S OF ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER APPEAL, HE SIMPLY TREAT ED THEM AS UNEXPLAINED INVESTMENT OF THE ASSESSEE WHICH IN OUR CONSIDERED OPINION IS NOT SUSTAINABLE IN LAW. THEREFORE, THE ADDITION OF RS.37,54,000/- MADE BY THE A.O. AND SUSTAINED BY LD. CIT(A) IS HEREBY DELETED. THIS GR OUND OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS AL LOWED. I.T.A. NO.3395/AHD/2008 10. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.10,00,00 0/- ALLEGED TO BE UNEXPLAINED / UNDISCLOSED INVESTMENT IN LAND SITUAT ED AT BAPOD BEARING REVENUE SURVEY NO.418/1. THE LD. CIT(A) OU GHT TO HAVE APPRECIATED THAT SUCH INVESTMENT WAS DISCLOSED IN T HE BOOKS OF ACCOUNTS AND THAT THE SOURCE FOR SUCH INVESTMENT WA S ALSO FULLY EXPLAINED AND EVIDENCED. THE ADDITION OF RS.10,00, 000/-, BEING MADE IN COMPLETE DISREGARD OF THE MATERIAL, EVIDENC ES AND EXPLANATION AVAILABLE ON RECORD, IS PRAYED TO BE DE LETED. 2. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN HOLDING THAT THE CONFIRMATION FROM THE PERSONS WHOS E MONEY WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT FOR MAKING INVESTMENT IN THE LAND AT BAPOD WAS NOT FURNISHED TO THE ASSES SING OFFICER IN CONTRADICTION OF HIS OWN FINDING THAT SUCH CONFIRMA TIONS WERE FURNISHED AS ADDITIONAL EVIDENCES UNDER RULE 46A AN D ADMITTED AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE LD. ASSESSING OFFICER. THE LD. I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 17 CIT(A) OUGHT TO HAVE HELD THAT THE SOURCE IN RESPEC T OF DEPOSITION FOR INVESTMENT BEING FULLY EXPLAINED AND EVIDENCED, THE INVESTMENT MADE THEREFROM WAS TO BE CONSIDERED AS EXPLAINED. 3. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.6,00,000 /- ALLEGED TO BE UNEXPLAINED/UNDISCLOSED INVESTMENT IN LAND THE PART ICULARS OF WHICH WERE NEVER MADE AVAILABLE. THE ADDITION OF RS.6,00 ,000/- BEING MADE IN COMPLETE DISREGARD OF THE AVAILABLE MATERIA L, EVIDENCES AND EXPLANATION IS PRAYED TO BE DELETED. I.T.A. NO.3396/AHD/2008 11. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.5,00,000 /- ALLEGED TO BE UNEXPLAINED / UNDISCLOSED INVESTMENT IN LAND SITUAT ED AT BAPOD BEARING REVENUE SURVEY NO.418/1. THE LD. CIT(A) OU GHT TO HAVE APPRECIATED THAT SUCH INVESTMENT WAS DISCLOSED IN T HE BOOKS OF ACCOUNTS AND THAT THE SOURCE FOR SUCH INVESTMENT WA S ALSO FULLY EXPLAINED AND EVIDENCED. THE ADDITION OF RS.5,00,0 00/-, BEING MADE IN COMPLETE DISREGARD OF THE MATERIAL, EVIDENCES AN D EXPLANATION AVAILABLE ON RECORD, IS PRAYED TO BE DELETED. 2. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN HOLDING THAT THE CONFIRMATION FROM THE PERSONS WHOS E MONEY WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT FOR MAKING INVESTMENT IN THE LAND AT BAPOD WAS NOT FURNISHED TO THE ASSES SING OFFICER IN CONTRADICTION OF HIS OWN FINDING THAT SUCH CONFIRMA TIONS WERE FURNISHED AS ADDITIONAL EVIDENCES UNDER RULE 46A AN D ADMITTED AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE LD. ASSESSING OFFICER. THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE SOURCE IN RESPEC T OF DEPOSITION FOR INVESTMENT BEING FULLY EXPLAINED AND EVIDENCED, THE INVESTMENT MADE THEREFROM WAS TO BE CONSIDERED AS EXPLAINED. 3. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN HOLDING THAT THE INVESTMENT RECORDED ON THE UNSIGNE D CERTIFICATE OF A CHARTERED ACCOUNTANT (AS FOUND IN THE COURSE OF SEA RCH), WHICH WAS DULY EXPLAINED TO REPRESENT EXPLAINED AND RECORDED TRANSACTION AND FURTHER CLARIFIED IN ALL THE PROCEEDINGS, REPRESENT ED UNEXPLAINED INVESTMENT. 4. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.17,85,00 0/- ALLEGED TO BE UNEXPLAINED/UNDISCLOSED INVESTMENT IN LAND THE PART ICULARS OF WHICH WERE NEVER MADE AVAILABLE. THE ADDITION OF RS.17,8 5,000/- BEING MADE IN COMPLETE DISREGARD OF THE AVAILABLE MATERIA L, EVIDENCES AND I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 18 EXPLANATION AND MERELY ON THE BASIS OF STATEMENT RE CORDED U/S 132(4), WHICH WAS DULY RETRACTED WITHIN REASONABLE TIME, IS PRAYED TO BE DELETED. I.T.A. NO.3397/AHD/2008 12. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.14,00,00 0/- ALLEGED TO BE UNEXPLAINED / UNDISCLOSED INVESTMENT IN LAND SITUAT ED AT BAPOD BEARING REVENUE SURVEY NO.418/1. THE LD. CIT(A) OUG HT TO HAVE APPRECIATED THAT SUCH INVESTMENT WAS DISCLOSED IN T HE BOOKS OF ACCOUNTS AND THAT THE SOURCE FOR SUCH INVESTMENT WA S ALSO FULLY EXPLAINED AND EVIDENCED. THE ADDITION OF RS.14,00, 000/-, BEING MADE IN COMPLETE DISREGARD OF THE MATERIAL, EVIDENC ES AND EXPLANATION AVAILABLE ON RECORD, IS PRAYED TO BE DE LETED. 2. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN HOLDING THAT THE CONFIRMATION FROM THE PERSONS WHOS E MONEY WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT FOR MAKING INVESTMENT IN THE LAND AT BAPOD WAS NOT FURNISHED TO THE ASSES SING OFFICER IN CONTRADICTION OF HIS OWN FINDING THAT SUCH CONFIRMA TIONS WERE FURNISHED AS ADDITIONAL EVIDENCES UNDER RULE 46A AN D ADMITTED AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE LD. ASSESSING OFFICER. THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE SOURCE IN RESPEC T OF DEPOSITION FOR INVESTMENT BEING FULLY EXPLAINED AND EVIDENCED, THE INVESTMENT MADE THEREFROM WAS TO BE CONSIDERED AS EXPLAINED. I.T.A. NO.3398/AHD/2008 13. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ACTION OF THE A.O. IN THE ADDITION O F AN AMOUNT OF RS.10,43,860/- ALLEGEDLY REPRESENTING PROFIT ON SAL E OF LAND AT BAPOD. THE ADDITION OF RS.10,43,860/-, BEING MADE IN COMPL ETE DISREGARD OF THE MATERIAL, EVIDENCES AND EXPLANATION AVAILABLE O N RECORD, IS PRAYED TO BE DELETED. 2. THE LD. CIT(A), AHMEDABAD HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.16,00,00 0/- ALLEGED TO BE UNEXPLAINED / UNDISCLOSED INVESTMENT IN LAND SITUAT ED AT BAPOD BEARING REVENUE SURVEY NO.418/1. THE LD. CIT(A) OU GHT TO HAVE APPRECIATED THAT SUCH INVESTMENT WAS DISCLOSED IN T HE BOOKS OF ACCOUNTS AND THAT THE SOURCE FOR SUCH INVESTMENT WA S ALSO FULLY EXPLAINED AND EVIDENCED. THE ADDITION OF RS.16,00, 000/- BEING I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 19 MADE IN COMPLETE DISREGARD OF THE MATERIAL, EVIDENC E AND EXPLANATION AVAILABLE ON RECORD IS PRAYED TO BE DEL ETED. 3. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW A ND IN FACTS IN HOLDING THAT THE CONFIRMATION FROM THE PERSONS WHOS E MONEY WAS DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT FOR MAKING INVESTMENT IN THE LAND AT BAPOD WAS NOT FURNISHED TO THE ASSES SING OFFICER IN CONTRADICTION OF HIS OWN FINDING THAT SUCH CONFIRMA TIONS WERE FURNISHED AS ADDITIONAL EVIDENCES UNDER RULE 46A AN D ADMITTED AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE LD. ASSESSING OFFICER. THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE SOURCE IN RESPEC T OF DEPOSITION FOR INVESTMENT BEING FULLY EXPLAINED AND EVIDENCED, THE INVESTMENT MADE THEREFROM WAS TO BE CONSIDERED AS EXPLAINED. 14. AT THE TIME OF HEARING BOTH THE PARTIES AGREED THAT THE MATTER RELATING TO INVESTMENTS IN LAND FROM A.Y. 2000-2001 TO 2005-06 BE RESTORED BACK TO THE FILE OF THE A.O. TO GIVE ONE MORE OPPOR TUNITY TO THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE INVESTMENT/ADVANCE. THE REFORE, THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O. FOR THIS PURP OSE. IN I.T.A. NO.3398/AHD/2008 THERE IS ONE MORE GROUND RELATING TO PROFIT OF SALE OF BAPOD LAND, THE SAME IS ALSO RESTORED BACK TO THE F ILE OF THE A.O. FOR FRESH ADJUDICATION SINCE THE MATTER RELATING TO INVESTMEN T IN BAPOD LAND HAS BEEN RESTORED BACK FOR FRESH ADJUDICATION. THESE APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSE. 15. IN THE RESULT, ASSESSEES APPEALS IN ITA NOS.33 95 TO 3398/AHD/2008 ARE ALLOWED FOR STATISTICAL PURPOSE. I.T.A. NO.3399/AHD/2008 (SMT. JAYSHREE D. PASALE) 16. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL:- 1. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.26,00 ,000/- ALLEGED TO BE UNEXPLAINED/UNDISCLOSED ADVANCES MADE TO SEVE RAL PERSONS. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT SUCH ADVANCES WERE DISCLOSED IN THE BOOKS OF ACCOUNTS AND THAT TH E SOURCE FOR SUCH ADVANCES WERE ALSO FULLY EXPLAINED AND EVIDENC ED. THE I.T.A. NOS.3394 TO 3398/AHD/2008 A.YS.2000-01 TO 02-03 AND 04-05 & 05-06 WITH I.T.A. NO.3399/AHD/2008, A.Y.2002-03 20 ADDITION OF RS.26,00,000/- BEING MADE IN COMPLETE D ISREGARD OF THE AVAILABLE MATERIAL, EVIDENCES AND EXPLANATION A ND MERELY ON THE BASIS OF STATEMENT RECORDED U/S 132(4), WHICH W AS DULY RETRACATED WITHIN REASONABLE TIME, IS PRAYED TO BE DELETED. 17. ASSESSEES CASE IS CONNECTED WITH HER HUSBANDS CASE. SINCE IN HER HUSBANDS CASE THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION, THIS APPEAL IS ALSO RESTORED BA CK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION. 18. IN THE COMBINED RESULT, ASSESSEES APPEAL IN IT A NO.3394/AHD/2008 IS ALLOWED AND ITA NO.3395 TO 3399/AHD/2008 ARE ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 09.11.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD