Sh. Harinder, Ludhiana V. ITO, Ludhiana

ITA 505/CHANDI/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1649 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained investment; Cost of acquisition; Tangible material
• Section: 131; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO.505 &506/CHD/2014 A.Y: 2006-07 2008-09 SHRI HARINDER, VS THE ITO, S/O SHRI RANJIT SINGH, WARD VII(I), 76-M, SOUTH CITY, LUDHIANA. LUDHIANA. PAN: BGCPS4376Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 10.12.2015 DATE OF PRONOUNCEMENT : 18.12.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 24.02.2014 FOR ASSESSMENT YEAR 2006-07 AND 2008-09. 2. IN ASSESSMENT YEAR 2006-07, THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT AND ADDITION OF RS. 93,63,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND. 2 3. IN ASSESSMENT YEAR 2008-09, THE ASSESSEE SIMILARLY CHALLENGED THE RE-OPENING OF THE ASSESSME NT UNDER SECTION 147/148 OF THE INCOME TAX ACT AND ADDITION OF RS. 1,28,36,000/- ON ACCOUNT OF UNEXPLA INED INVESTMENT IN PURCHASE OF LAND AND ALLEGED ADDITION OF RS. 2,98,39,000/- ON ACCOUNT OF PROFIT OF SALE OF A LLEGED RESIDENTIAL PLOTS. 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. BOTH THE APPEALS ARE DECIDED AS UNDER. ITA 505/2014 ( A.Y. 2006-07) 5. BRIEFLY THE FACTS OF THE CASE ARE THAT AS PER INFORMATION RECEIVED FROM DCIT, CENTRAL CIRCLE-I, LUDHIANA DATED 30.09.2011, IT HAS BEEN REVEALED THA T SHRI HARINDER SINGH ALONGWITH SHRI SURESH KUMAR KHANNA AND SHRI SAHIBJIT SINGH, DIRECTORS OF M/S BASERA REALTORS P.LTD. HAD ENTERED INTO AGREEMENT F OR PURCHASE OF LAND IN VILLAGE JHANDE, TEHSIL & DISTRI CT LUDHIANA DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2006-07, DETAILS OF SAME ARE NOTED AT PAGE 2 OF THE ASSESSMENT ORDER. THE DATE OF AGREEM ENTS ARE 30.01.2006 AND 05.10.2005. THE AGREEMENT DATED 30.01.2006 IS ALLEGED TO HAVE BEEN ENTERED INTO BET WEEN THE SELLERS S/SHRI INDERJIT SINGH, JASBIR SINGH, SO NS OF SHRI GURMEET SINGH, AMARJOT SINGH S/O SHRI SURINDER 3 SINGH, SHRI MANOHAR SINGH S/O SHRI HARNEK SINGH AND THE PURCHERS ARE SHRI HARINDER SINGH (ASSESSEE), SH RI SURESH KHANNA WITH HALF SHARE EACH. THE AGREEMENT DATED 05.10.2005 IS EXECUTED BETWEEN THE SELLERS SM T. HARJINDER KAUR, SHRI BALWINDER SINGH AND SHRI BHUPINDER SINGH WITH THE PURCHASERS SHRI SAHIBJIT SINGH S/O SHRI AMARJIT SINGH AND SHRI HARINDER SING H (ASSESSEE) IN EQUAL SHARES. THE TOTAL CONSIDERATIO N IS ALSO NOTED AT PAGE 2 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREFORE, OBSERVED THAT ASSESSE E WAS HAVING HALF SHARE OF INVESTMENTS MADE IN THESE PROPERTIES WHICH FOR ASSESSMENT YEAR 2006-07 WORKED OUT TO RS. 93,63,000/-. 6. AS PER AGREEMENT TO SELL EXECUTED ON 05.10.2005, SMT. HARJINDER KAUR, SHRI BALWINDER SINGH AND SHRI BHUPINDER SINGH HAD AGREED TO SELL THEIR LAND MEASU RING 4 BIGHAS 8 BISWAS 16 BISWASI I.E. 13476 SQ.YDS. IN VILLAGE JHANDE, LUDHIANA TO SHRI HARINDER SINGH, ASSESSEE AND SHRI SAHIBJIT SINGH DIRECTOR OF M/S BA SERA REALTORS P.LTD. @ RS. 47.80 LACS PER ACRE I.E. 4840 SQ. YDS. THE TOTAL SALE CONSIDERATION AS PER THIS AGRE EMENT WORKED OUT TO RS.1,96,91,711/-. THERE IS ANOTHER AGREEMENT TO SELL DATED 30.01.2006 IN TERMS OF WHIC H, SHRI INDERJIT SINGH & SHRI JASBIR SINGH, SONS OF SH RI GURMEET SINGH, SHRI AMARJOT SINGH AND SHRI MANOHAR SINGH HAD AGREED TO SELL THEIR LAND MEASURING 11 BI GHAS (PUKHA) I.E. 33400 SQ. YDS. TO THE ASSESSEE SHRI 4 HARINDER SINGH AND SHRI SURESH KHANNA ANOTHER DIRECTOR OF M/S BASERA REALTORS P.LTD. IN EQUAL SHA RES @ RS. 81 LACS PER ACRE I.E. 4840 SQ. YDS. THE SALE CONSIDERATION OF THIS PROPERTY WORKED OUT AT RS. 5,59,46,000/-. THUS, TOTAL COST OF ACQUISITION OF BOTH THE LANDED PROPERTIES WORKED OUT TO RS. 7,56,37,711 /- IN WHICH THE ASSESSEE'S HALF SHARE OF INVESTMENT CO MES TO RS. 3,78,18,855/-. IT IS FURTHER NOTED ON THE B ACK SIDE OF BOTH THESE DOCUMENTS, AS AFORESAID, THE PAYMENTS MADE BY THE PURCHASERS AND ACKNOWLEDGED BY THE SELLERS OF THE LANDS HAVE BEEN RECORDED DATE-WI SE. THE FIGURES OF TOTAL PAYMENTS MADE BY THE ASSESSEE AND OTHERS IN DIFFERENT ACCOUNTING YEARS HAVE BEEN COMP ILED, WHICH ARE GIVEN YEAR-WISE IN THE AFORESAID CHART. THE ASSESSEE'S HALF SHARE IN THE INVESTMENT MADE IN THE ACQUISITION OF LANDS AS PER THESE DOCUMENTS ABOVE, DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEA R 2006-07 UNDER APPEAL WORKED OUT TO RS. 93,63,000/-. 7. IT WAS NOTICED THAT ASSESSEE HAS NOT FILED RETUR N OF INCOME FOR ASSESSMENT YEAR UNDER APPEAL, THEREFORE, REASONS WERE RECORDED UNDER SECTION 148 FOR RE-OPEN ING OF THE ASSESSMENT BUT NO RETURN HAS BEEN FILED BY T HE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 14 8 OF THE INCOME TAX ACT. THE ASSESSEE ALSO DID NOT COMP LY WITH OTHER STATUTORY NOTICES. THE SUMMONS UNDER SECTION 131 WERE ISSUED FOR PERSONAL ATTENDANCE OF THE ASSESSEE BUT ASSESSEE, INSTEAD OF APPEARING BEFORE 5 ASSESSING OFFICER ASKED FOR COPY OF THE REASONS REC ORDED UNDER SECTION 148 OF THE INCOME TAX ACT. SINCE NO RETURN WAS FILED BY ASSESSEE, THEREFORE, ASSESSEE W AS NOT SUPPLIED THE REASONS FOR RE-OPENING OF THE ASSESSMENTS. THE ASSESSEE, LATER ON INTIMATED THAT RETURN HAS BEEN FILED FOR ASSESSMENT YEAR UNDER APP EAL IN RESPONSE TO NOTICE UNDER SECTION 148 ON 05.02.20 13. THEREFORE, ASSESSEE ASKED FOR COPY OF THE REASONS. THE ASSESSEE, FOR THE FIRST TIME, ON 01.03.2013, APPEAR ED BEFORE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED REGARDING THE INVESTMENTS, IF ANY MADE BY HIM IN THE ACQUISITION OF LANDS INDIVIDUALLY OR IN PART NERSHIP WITH OTHERS IN FINANCIAL YEAR RELEVANT TO THE ASSES SMENT YEAR UNDER APPEAL. THE RELEVANT QUESTIONS PUT TO H IM AND REPLIES GIVEN BY HIM HAVE BEEN REPRODUCED AT PA GE 5-6 OF THE ASSESSMENT ORDER IN WHICH THE ASSESSEE EXPLAINED THAT HE HAS NOT DONE ANY TRANSACTION OF PURCHASE AND SALE OF IMMOVABLE PROPERTIES WITH M/S BASERA REALTORS P.LTD. DURING THE ASSESSMENT YEAR UNDER APPEAL AND HAS NOT DONE ANY TRANSACTION. HE HAS DENIED TO HAVE PURCHASED ANY PROPERTY WITH THE AFORESAID PARTIES. HE HAS FURTHER EXPLAINED THAT H E CAME TO KNOW FROM HIS COUNSEL WHO WAS ATTENDING THE PROCEEDINGS AND AFTER GOING THROUGH THE COPIES OF T HE SAME AGREEMENTS, HE EXPLAINED THAT HIS NAME HAD BEE N MISUSED WITHOUT HIS CONSENT AND KNOWLEDGE. HE HAS FURTHER EXPLAINED THAT REGISTRY WAS NOT DONE IN HIS NAME THOUGH HIS NAME IS WRITTEN IN THE AGREEMENT. THIS W OULD 6 SHOW THE INTENTION OF OTHER PARTY WHO WAS MANIPULAT ING THE AGREEMENTS. HE HAS EXPLAINED THAT SINCE M/S BASERA REALTORS P.LTD. ARE IN SIMILAR LINE OF BUSIN ESS OF PURCHASE AND SALE OF IMMOVABLE PROPERTIES IN LUDHIA NA AND HE HAS INTRODUCED SHRI SURESH KUMAR KHANNA, DIRECTOR OF M/S BASERA REALTORS P.LTD. AND OTHER DIRECTORS SHRI SAHIBJIT SINGH AND SHRI RUPINDER DEE P SINGH, LAND-OWNERS, SHRI MANOHAR SINGH AND HIS FAMI LY MEMBERS, THEREFORE, HE HAS NOT MADE ANY INVESTMENTS . 8. THE ASSESSING OFFICER, IN VIEW OF THE STATEMENT OF THE ASSESSEE OBSERVED THAT ALTHOUGH THE ASSESSEE HA S DENIED HAVING ENTERED INTO ANY AGREEMENT FOR PURCHA SE OF LAND WITH M/S BASERA REALTORS P.LTD. OR DIRECTOR S BUT THE CONDUCT OF THE ASSESSEE IN NOT COOPERATING WITH THE DEPARTMENT IS CLEAR THAT HE WAS AVOIDING TO ATTEND THE INCOME TAX PROCEEDINGS. IT WAS OBSERVED THAT THE STATEMENT OF THE ASSESSEE SHOWS THAT SHRI MANOHAR SINGH AND HIS FAMILY MEMBERS WERE ACQUAINTED WITH T HE ASSESSEE AND THAT IS WHY THEY DECIDED TO SELL THEIR LAND. THEREFORE, ASSESSEE INTRODUCED THEM TO THE DIRECTOR S OF M/S BASERA REALTORS P.LTD. THE ASSESSEE WAS, THERE FORE, ASKED TO EXPLAIN INVESTMENT IN A SUM OF RS. 93,63,0 00/- THROUGH THESE TWO AGREEMENTS IN QUESTION. THE ASSESSING OFFICER RECORDED STATEMENT OF SHRI MANOJA R SINGH, ONE OF THE SELLERS OF THE LAND ON DATED 07.03.2013 AND RELEVANT PORTION IS REPRODUCED IN TH E ASSESSMENT ORDER IN WHICH HE HAS EXPLAINED THAT HE, 7 ALONGWITH OTHER CO-OWNERS HAVE SOLD AGRICULTURE LAN D TO THE ASSESSEE AND SHRI SURESH KHANNA IN EQUAL SHARES AT VILLAGE JHANDE AND ALSO EXPLAINED THE SALE CONSIDERATION. HE, HOWEVER, DID NOT REMEMBER AS TO HOW MANY SALE DEEDS WERE REGISTERED IN THIS BEHALF. TH E ASSESSING OFFICER ALSO RECORDED STATEMENT OF SHRI G URMIT SINGH, ANOTHER OWNER OF THE LAND ON 07.03.2013 IN WHICH ALSO HE HAS CONFIRMED TO HAVE SOLD THE LAND T O THE ASSESSEE AND SHRI SURESH KHUMAR KHANNA FOR A CONSIDERATION. THE ASSESSING OFFICER, ACCORDINGLY, NOTED THAT FROM THE STATEMENTS OF SHRI MANOHAR SINGH AND SHRI GURMIT SINGH, IT IS CLEAR THAT THEY HAVE ENTER ED INTO AGREEMENT TO SELL DATED 05.10.2005 AND 30.01.2006, COPY OF WHICH HAS BEEN SUPPLIED TO ASSESSEE THAT THEY HAVE SOLD THE LAND TO THE ASSESS EE AND DIRECTOR OF M/S BASERA REALTORS P.LTD. THE ASSESSEE, ON RECEIPT OF THE COPIES OF STATEMENTS OF SHRI MANOHAR SINGH AND SHRI GURMIT SINGH REQUESTED FOR PROVIDING OF OPPORTUNITY TO CROSS-EXAMINE THEM WHIC H WAS AFFORDED TO THE ASSESSEE FOR 18.03.2013. THE ASSESSEE WAS ASKED TO CROSS-EXAMINE THESE TWO SELLE RS ON 18.03.2013 AT 11.30 AM. HOWEVER, ACCORDING TO T HE ASSESSING OFFICER, THE ASSESSEE FAILED TO ATTEND PROCEEDINGS ON THE DATE SO FIXED. THE COUNSEL FOR ASSESSEE TURNED UP AT 6.20 PM ON 18.03.2013. THEREAFTER, NO REQUEST WAS MADE TO CROSS-EXAMINE TH E SELLERS. 8 9. THE ASSESSING OFFICER ALSO NOTED THAT IN POST SEARCH ENQUIRIES BY DCIT, CENTRAL CIRCLE-I, LUDHIAN A, THE DIRECTORS OF M/S BASERA REALTORS P.LTD. CAME FORWARD AND DISCLOSED THAT INVESTMENTS IN ACQUISITI ON OF LAND AS DISCUSSED ABOVE, HAD BEEN MADE BY THE ASSES SEE AND THEIR COMPANY IN EQUAL SHARES OF 1/2 AND ALSO DISCLOSED TOTAL PROFIT DERIVED BY THEM ON SALE OF RESIDENTIAL PLOTS CRAVED OUT OF THE SAID LAND. THE ASSESSING OFFICER, THEREFORE, NOTED THAT SINCE 50% PROFIT HAS BEEN DISCLOSED BY THE COMPANY, THEREFORE, BALAN CE 50% PROFIT BELONGS TO THE ASSESSEE. 10. THE ASSESSEE CHALLENGED THE RE-OPENING OF THE ASSESSMENT BEFORE ASSESSING OFFICER AND STATED THAT ASSESSING OFFICER HAS NOT APPLIED MIND AND THERE WA S NO INFORMATION AVAILABLE ON RECORD IF INCOME CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE THAT ASSESSEE'S SIGNATURES ON AGREEMENTS HAVE BEEN FABRICATED. THE ASSESSEE PRODUCED THE SIGNATURES ATTESTED BY THE BANK MANAGER AND HAND-WRITING EXPER TS REPORT BUT ASSESSING OFFICER DID NOT ACCEPT THE SAM E AND NOTED THAT ASSESSEE HAS NOT TAKEN ANY ACTION AGAINS T THOSE PERSONS. THEREFORE, CONDUCT OF THE ASSESSEE CANNOT BE SAID TO BE THAT HE IS INNOCENT OR IGNORAN T OF THE LEGAL OPTIONS TO PROTECT HIS RIGHTS. THE ASSES SING OFFICER, THEREFORE, CONSIDERING TOTALITY OF THE FAC TS AND CIRCUMSTANCES AND AGREEMENTS IN QUESTION, MADE THE 9 ADDITION OF RS. 93,63,000/- ON ACCOUNT OF INCOME F ROM UNDISCLOSED SOURCES BEING UNDISCLOSED INVESTMENTS IN THE PROPERTIES. 11. THE ASSESSEE CHALLENGED RE-OPENING OF THE ASSESSMENT AS WELL AS ADDITION ON MERIT BEFORE LD. CIT(APPEALS). HOWEVER, THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. 12. THE LD. CIT(APPEALS) CONSIDERED BOTH THE APPEAL S OF THE ASSESSEE THROUGH THE COMMON ORDER AND DISCUSSED THE FACTS AND MATERIAL ON RECORD BUT HAS GIVEN FINDINGS IN ASSESSMENT YEAR 2008-09 WHICH IS ALSO R ELIED UPON IN ASSESSMENT YEAR 2006-07. BOTH THE APPEALS OF THE ASSESSEE WERE ACCORDINGLY DISMISSED. 13. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO PB-1 WHICH IS REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. HE HAS SUBMITTED THAT NO RETURN UNDER SECTION 139(1) WAS FILED. THE ASSESSEE DID NOT MAK E ANY INVESTMENT IN PROPERTY. NO DETAILS OF THE PROPERTY HAVE BEEN NOTED IN THE REASONS. NO REFERENCE OF ANY PRO PERTY INVESTMENT HAVE BEEN MADE IN THE REASONS. THE ASSESSING OFFICER, THEREFORE, HAS NOT APPLIED HIS M IND BEFORE RE-OPENING OF THE ASSESSMENT. NO TANGIBLE MATERIAL WAS WITH THE ASSESSING OFFICER FOR RE-OPEN ING OF THE ASSESSMENT. THERE WERE NO REASONS TO BELIEVE TH AT INCOME ESCAPED IN THE CASE OF THE ASSESSEE. HE HAS ALSO 10 RELIED UPON ORDER OF ITAT AMRITSAR BENCH IN THE CAS E OF MOHD. YOUSUF WANI VS ITO IN ITA 372/ASR/2009, DECISION OF DELHI HIGH COURT IN THE CASE OF CIT V S FIL STOCK BROKING LTD. 325 ITR 285, DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS PARAMJIT KAUR 311 ITR 38 AND DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GEETA GA RG V CIT 51 IT RPS 215. HE HAS SUBMITTED THAT NO VALI D REASONS HAVE BEEN RECORDED FOR RE-OPENING OF THE ASSESSMENT. HE HAS SUBMITTED THAT IN ASSESSMENT YE AR 2008-09, ASSESSEE HAS ADMITTEDLY FILED THE RETURN O F INCOME PRIOR TO RE-OPENING OF THE ASSESSMENT. 14. ON MERITS, LD. COUNSEL FOR THE ASSESSEE REFERRE D TO PB-2 WHICH IS AGREEMENT DATED 05.10.2005, PB-18 WHI CH IS COPY OF THE AGREEMENT DATED 30.01.2006. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AGREEMENT D ATED 30.01.2006 HAS NOT BEEN SIGNED BY THE ASSESSEE. IT CONTAINED SIGNATURE OF SHRI RUPINDER DEEP FOR SHRI HARINDER SINGH. HE HAS, THEREFORE, SUBMITTED THAT ADMITTEDLY, AGREEMENT DATED 30.01.2006 IS NOT SIGNE D BY THE ASSESSEE. DURING THE COURSE OF ARGUMENTS, LD. DR WAS DIRECTED TO VERIFY THIS FACT FROM THE AGREEMENT IN QUESTION AND LD. DR, AFTER GOING THROUGH AGREEMENT IN QUESTION ALSO CONFIRMED THIS FACT THAT THE AGREEMEN T DATED 30.01.2006 IS SIGNED BY SHRI RUPINDER DEEP FO R SHRI HARINDER SINGH. THE LD. COUNSEL FOR THE ASSES SEE, FURTHER SUBMITTED THAT NO DOCUMENT WAS FOUND FROM T HE 11 POSSESSION OF THE ASSESSEE TO PROVE THAT ASSESSEE M ADE ANY INVESTMENT IN PURCHASE OF THE PROPERTIES. THES E AGREEMENTS WERE RECOVERED FROM THE DIRECTORS OF M/S BASERA REALTORS P.LTD. THE STATEMENT OF THE ASSESS EE WAS RECORDED BY ASSESSING OFFICER ON 01.03.2013, CO PY OF WHICH IS PLACED ON RECORD IN WHICH THE ASSESSEE DENIED TO HAVE MADE ANY INVESTMENT IN THE PROPERTIE S ALONGWITH M/S BASERA REALTORS P.LTD. HE HAS ALSO DENIED ANY TRANSACTION OF PURCHASE OF PROPERTY. HE HAS EXPLAINED THAT ONE OF THE AGREEMENT HAS HIS NAME BU T HIS NAME HAS BEEN MISUSED WITHOUT HIS CONSENT AND KNOWLEDGE. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IN HIS STATEMENT, ASSESSEE EXPLAINED THAT HE WAS A COMMISSION AGENT DEALING IN REAL ESTATE. HE HAS SUBMITTED THAT ASSESSEE ONLY EXPLAINED TO HAVE INTRODUCED THE PROPERTY OWNERS TO THE DIRECTORS OF M/S BASERA REALTORS P.LTD. HE HAS REFERRED TO PB-3 PAG E 14-21 WHICH ARE THE SALE DEEDS OF PROPERTIES IN QUE STION WHICH HAVE NOT BEEN EXECUTED IN FAVOUR OF THE ASSES SEE. HE HAS SUBMITTED THAT ALL THE PAYMENTS HAVE BEEN MA DE BY CHEQUE BY PURCHASERS AND ASSESSEE HAS NOTHING TO DO WITH THESE PROPERTIES. HE HAS REFERRED TO PB-1-17 WHICH IS THE COPY OF THE FULL AND FINAL AGREEMENT WHICH CONTAINS THE STAMP OF M/S BASERA REALTORS P.LTD. H E HAS, THEREFORE, SUBMITTED THAT ALL THE TRANSACTIONS WERE CARRIED OUT BY M/S BASERA REALTORS P.LTD. AND SIGNATURES OF THE ASSESSEE HAVE BEEN FORGED AND FABRICATED. ON THE AGREEMENT DATED 05.10.2005 AND 12 ADMITTEDLY OTHER AGREEMENT DATED 30.01.2006 DID NOT CONTAIN SIGNATURES OF THE ASSESSEE. PB-1/41 IS THE REPORT OF HANDWRITING EXPERT DATED 18.03.2013 WHICH WAS FILED BEFORE ASSESSING OFFICER IN WHICH THE HANDWRITING EXPERT ON COMPARISON OF SIGNATURE ON AGREEMENT DATED 05.10.2005 AND SIGNATURES OF THE ASSESSEE WITH BRANCH MANAGER OF AXIS BANK, LUDHIANA HAS OPINED THAT BOTH THESE SIGNATURES ARE NOT IN T HE HANDWRITING OF ONE AND THE SAME PERSON AND THE DISPUTED SIGNATURES IS PRODUCT OF COPIED FORGERY. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSI NG OFFICER HAVE NOT CONSIDERED REPORT OF HANDWRITING E XPERT IN PROPER PERSPECTIVE AND NO MATERIAL HAS BEEN BROU GHT ON RECORD TO CONTRADICT THE REPORT OF THE HANDWRITI NG EXPERT. HE HAS SUBMITTED THAT ASSESSING OFFICER REJECTED EXPLANATION OF THE ASSESSEE BECAUSE ASSESS EE DID NOT TAKE ANY ACTION AGAINST THE PERSONS WHO HAV E FORGED THE SIGNATURES OF THE ASSESSEE. THE LD. CIT(APPEALS) WITHOUT ANY VALID REASON, REJECTED THE REPORT OF HANDWRITING EXPERT. PB-3 PAGE 22 TO 27 A RE COPES OF JAMABANDI OF THE PROPERTIES IN QUESTION WO ULD PROVE THAT AFTER SALE OF THE PROPERTIES, THE MUTATI ONS HAVE BEEN DONE IN THE NAMES OF THE PURCHASERS. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER CONSIDERED THE THEORY OF 50% INVESTMENT IN PROPERTY MADE BY ASSESSEE AND 50% BY M/S BASERA REALTORS P. LTD. HOWEVER, THE ASSESSMENT ORDER IN THE CASE OF M/S 13 BASERA REALTORS P.LTD. HAS BEEN SET ASIDE BY CIT CENTRAL, LUDHIANA UNDER SECTION 263 OF THE INCOME T AX ACT VIDE ORDER DATED 21.02.2012 AND ASSESSING OFFIC ER WAS DIRECTED TO CONSIDER THE ENTIRE INVESTMENTS IN THE CASE OF COMPANY. 14(I) THE ASSESSING OFFICER IN THE SET ASIDE PROCEE DINGS UNDER SECTION 143(3)/263 OF THE ACT VIDE ORDER DATE D 25.03.2013 ASSESSED THE ENTIRE INVESTMENT IN THE HA NDS OF M/S BASERA REALTORS P.LTD., COPY OF THE ASSESSME NT ORDER IN THIS CASE IS FILED AT PAGE 133 OF THE PAPE R BOOK. HE HAS FURTHER SUBMITTED THAT M/S BASERA REALTORS P.LTD. PREFERRED APPEALS BEFORE ITAT, CHANDIGARH AGAINST THE ORDER PASSED UNDER SECTION 263 OF THE A CT IN ALL THESE ASSESSMENT YEARS AND THEIR APPEALS HAVE B EEN DISMISSED VIDE ORDER DATED 30.01.2014. COPY OF THE ORDER OF THE TRIBUNAL FILED AT PAGE 189 OF THE PAPE R BOOK. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT SINCE DEPARTMENT HAS ASSESSED THE EN TIRE INVESTMENTS IN THE HANDS OF M/S BASERA REALTORS P.L TD., THEREFORE, DISPUTED ADDITION IN THE HANDS OF THE ASSESSEE SHOULD BE DELETED. HE HAS FURTHER SUBMITT ED THAT THE STATEMENT OF SHRI MANOHAR SINGH AND GURMIT SINGH WERE RECORDED AT THE BACK OF THE ASSESSEE AND NO OPPORTUNITY HAVE BEEN GIVEN TO CROSS-EXAMINE THEM BECAUSE WHEN THE COUNSEL FOR ASSESSEE APPEARED BEFO RE ASSESSING OFFICER DURING DAY TIME, HE WAS INTIMATED THAT BOTH THESE PERSONS HAVE NOT APPEARED AND THEN LATER ON, 14 IN THE EVENING IT CAME TO KNOWLEDGE OF THE LD. COUN SEL FOR THE ASSESSEE THAT ASSESSING OFFICER HAS CLOSED THE PROCEEDINGS. HE HAS SUBMITTED THAT BOTH THESE PERS ONS SHRI MANOHAR SINGH AND GURMIT SINGH FILED AFFIDAVIT BEFORE ASSESSING OFFICER ON 26.03.2013 RETRACTING F ROM THE EARLIER STATEMENTS MADE AND AFFIRMING THAT ASSE SSEE HAS NOT ENTERED INTO ANY AGREEMENT TO SELL AND HAS NOT SIGNED IN THEIR PRESENCE. THEY HAVE CONFIRMED TO H AVE DEALT WITH M/S BASERA REALTORS P.LTD. ONLY. COPIES OF THEIR AFFIDAVITS ARE FILED IN THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT BOT H THESE SELLERS S/SHRI MANOHAR SINGH AND GURMIT SINGH ARE PARTY TO THE AGREEMENT DATED 30.01.2006 WHICH D ID NOT CONTAIN SIGNATURES OF THE ASSESSEE, THEREFORE, THEIR STATEMENTS ARE NOT ADMISSIBLE AGAINST THE ASSESSEE. HE HAS SUBMITTED THAT SINCE NO SALE DEED HAVE BEEN EXECUTED IN THE NAME OF ASSESSEE OF ANY OF THE PROPERTIES, THEREFORE, ASSESSING OFFICER HAS FAILED TO PROVE ASSESSEE HAS MADE ANY INVESTMENT IN THE ALLEG ED TRANSACTIONS. 15. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT BOTH THE AGREEMENTS IN QUESTION WERE FOUND DURING THE COURSE OF SEARCH IN THE CASE OF DIRECTORS OF M/S BASERA REALT ORS P.LTD. WHICH CONTAINED SPECIFIC INFORMATION ABOUT INVESTMENTS MADE BY THE ASSESSEE. INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER FROM DCIT, CENTRA L 15 CIRCLE, LUDHIANA, THEREFORE, SUCH INFORMATION WAS SUFFICIENT FOR RE-OPENING OF THE ASSESSMENT BECAUSE ASSESSEE DID NOT FILE ANY RETURN OF INCOME TO EXPLA IN ANY INVESTMENTS IN THE PROPERTY. HE HAS, THEREFORE, SUBMITTED THAT RE-OPENING WAS VALIDLY DONE IN THE MATTER. AS REGARDS MERITS, LD. DR RELIED UPON ORDE RS OF THE AUTHORITIES BELOW AND SUBMITTED THAT STATEMENTS OF TWO OF THE OWNERS/SELLERS WERE RECORDED BY ASSESSIN G OFFICER I.E. S/SHRI MANOHAR SINGH AND GURMIT SINGH AND THEIR COPIES WERE SUPPLIED TO THE ASSESSEE IN WHICH THEY HAVE CONFIRMED TO HAVE ENTERED INTO AGREEMENT TO SE LL WITH THE ASSESSEE AND OTHERS. THEREFORE, ADDITION WAS RIGHTLY MADE IN THE HANDS OF THE ASSESSEE BECAUSE ASSESSEE FAILED TO CROSS-EXAMINE BOTH THESE SELLERS BEFORE ASSESSING OFFICER. THE LD. DR FURTHER SUBMI TTED THAT EVEN THOUGH PROCEEDINGS UNDER SECTION 263 HAVE BEEN CONDUCTED IN THE CASE OF M/S BASERA REALTORS P.LTD. BY THE DEPARTMENT BUT ASSESSEE HAS 50% SHARE IN THE ENTIRE TRANSACTION WHICH IS CONSIDERED BY ASSES SING OFFICER IN THEIR REGULAR ASSESSMENTS. THEREFORE, ADDITION HAVE BEEN CORRECTLY MADE IN THE HANDS OF ASSESSEE. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ENTIRE CASE IS REVOLVING AROUND THE TWO AGREEMENTS IN QUESTION DAT ED 05.10.2005 AND 30.01.2006. THESE AGREEMENTS WERE RECOVERED DURING THE COURSE OF SEARCH IN THE CASES OF 16 DIRECTORS OF M/S BASERA REALTORS P.LTD. NO DOCUMEN T WAS FOUND FROM THE POSSESSION OF THE ASSESSEE TO PR OVE THAT ASSESSEE MADE INVESTMENTS IN THESE PROPERTIES UNDER REFERENCE. THE COPIES OF BOTH THE AGREEMENTS ARE FILED IN PAPER BOOK. THE AGREEMENT DATED 05.10.200 5 IS STATED TO HAVE BEEN ENTERED INTO BETWEEN SMT. HARJI NDER KAUR SHRI BALWINDER SINGH AND SHRI BHUPINDER SINGH, SELLERS AND SHRI SAHIBJIT SINGH, ONE OF THE DIRECTO R OF M/S BASERA REALTORS P.LTD. AND STATED TO BE WITH 50 % SHARE OF ASSESSEE. THE ASSESSEE WHEN APPEARED BEFO RE ASSESSING OFFICER ON 01.03.2013 AT THE ASSESSMENT PROCEEDINGS, HIS STATEMENT HAS BEEN RECORDED ON OA TH. COPY OF THE STATEMENT IS PLACED ON RECORD AND RELEV ANT QUESTIONS ARE ALSO REPRODUCED IN THE ASSESSMENT ORD ER. THE ASSESSEE IN HIS STATEMENT WHILE ANSWERING THE QUESTIONS WITH REFERENCE TO THE AGREEMENT IN QUESTI ON HAS SPECIFICALLY DENIED TO HAVE DONE ANY TRANSACTIO N OF PURCHASE AND SALE OF IMMOVABLE PROPERTY WITH THESE PERSONS AND WITH M/S BASERA REALTORS P.LTD. IN ASSESSMENT YEAR UNDER APPEALS. THE ASSESSEE ALSO DENIED HIS SIGNATURES ON THE AGREEMENT IN QUESTION AND STATED THAT THOUGH HIS NAME CONTAINED ON THE AGREEM ENT BUT HIS NAME HAS BEEN MISUSED WITHOUT HIS CONSENT. HE HAS EXPLAINED THAT HIS NAME HAS BEEN MANIPULATED AN D THAT HE DID NOT DO ANY JOINT TRANSACTION WITH M/S B ASERA REALTORS P.LTD. HE HAS EXPLAINED THAT HE HAS INTRO DUCED THE DIRECTORS OF M/S BASERA REALTORS P.LTD. TO THE SELLERS AS A COMMISSION AGENT ONLY. THE ASSESSING 17 OFFICER DID NOT APPRECIATE THE ENTIRE STATEMENT OF THE ASSESSEE IN PROPER PERSPECTIVE. THE ASSESSEE, IN O RDER TO SUPPORT HIS STATEMENT, HAS FILED REPORT OF HANDWRITING EXPERT DATED 18.03.2013 BEFORE ASSESSIN G OFFICER. COPY OF THE SAME IS FILED AT PAGE 41 OF TH E PAPER BOOK IN WHICH HANDWRITING EXPERT HAS EXAMINED THE SIGNATURES OF THE ASSESSEE ON THE AGREEMENT DATED 05.10.2005 AND COMPARED THE SAME WITH THE ATTEMPTED SIGNATURES OF THE ASSESSEE FROM THE SIGNATURES AVAI LABLE WITH THE BRANCH MANAGER OF AXIS BANK, LUDHIANA. TH E HANDWRITING EXPERT IN HIS OPINION HAS STATED THAT B OTH THE SIGNATURES ARE NOT IN THE HANDWRITING OF ONE AN D THE SAME PERSON AND THE DISPUTED SIGNATURE IS A PRODUCT OF COPIED FORGERY. ON THE FACE OF THE REPORT OF THE HANDWRITING EXPERT, IF ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE N THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER T O SOME GOVERNMENT AGENCY OR AUTHORIZED HANDWRITING EXPERT/FSL FOR COMPARISON OF SIGNATURES OF THE ASSE SSEE BUT ASSESSING OFFICER DID NOT CONDUCT ANY PROPER INVESTIGATION IN THE MATTER AND HAVE NOT OBTAINED T HE REPORT OF ANOTHER HANDWRITING EXPERT ON THE MATTER IN ISSUE. THUS, THE EVIDENCES AND MATERIAL ON RECORD CLEARLY PROVED THAT THE ASSESSEE DISPUTED THE SIGNA TURE ON THE AGREEMENT DATED 05.10.2005 SINCE BEGINNING A ND HAS PRODUCED SUFFICIENT MATERIAL ON RECORD TO JUSTI FY HIS EXPLANATION THAT HIS SIGNATURES HAVE BEEN FORGED BY SOME PERSON. SINCE, ASSESSEE WAS NOT AWARE OF THE FACT 18 AS TO WHO HAS FORGED THE SIGNATURE OF THE ASSESSEE ON THIS AGREEMENT, NON ACTION BY ASSESSEE AGAINST THE FORGERY WOULD NOT BE RELEVANT CRITERIA IN INCOME TA X PROCEEDINGS TO REJECT THE EXPLANATION OF THE ASSESS EE. 16(I) IT MAY ALSO BE NOTED HERE THAT THE AGREEMEN T DATED 05.10.2005 HAS BEEN EXECUTED BY THE SELLER SM T. HARJINDER KAUR, SHRI BALWINDER SINGH AND SHRI BHUPINDER SINGH BUT ASSESSING OFFICER HAS NOT EXAMI NED ANY OF THE SELLERS IN ORDER TO PROVE THE GENUINE SIGNATURES OF THE ASSESSEE ON THIS AGREEMENT. EVEN ANOTHER CO-PURCHASER AS PER AGREEMENT, SHRI SAHIBJI T SINGH WAS ALSO NOT EXAMINED BY ASSESSING OFFICER IN THIS REGARD. THE WITNESSES TO THE AGREEMENT HAVE A LSO NOT BEEN EXAMINED BY ASSESSING OFFICER IN ORDER TO PROVE THAT ASSESSEE GENUINELY ENTERED INTO AGREEMENT IN QUESTION. THESE FACTS CLEARLY SHOW THAT THERE WERE NO BASIS FOR THE ASSESSING OFFICER TO HOLD THAT ASSESS EE HAS GENUINELY ENTERED INTO THE AGREEMENT DATED 05.10.20 05. 16(II) AS REGARDS AGREEMENT DATED 30.01.2006 IS CONCERNED, ADMITTEDLY THE SAME IS NOT SIGNED BY THE ASSESSEE. THIS AGREEMENT IS SIGNED BY SHRI RUPINDE R DEEP, ONE OF DIRECTOR OF M/S BASERA REALTORS P.LTD. FOR SHRI HARINDER SINGH. THE STATEMENT OF SHRI RUPIND ER DEEP SINGH WAS NOT RECORDED BY THE ASSESSING OFFICE R AND IT IS NOT PROVED ON RECORD IF SHRI RUPINDER DEE P SINGH WAS AUTHORIZED BY THE ASSESSEE TO SIGN THIS AGREEMENT. THE ASSESSING OFFICER ON THIS AGREEMENT 19 DATED 30.01.2006 HAS RECORDED STATEMENT OF SHRI GUR MIT SINGH AND SHRI MANOHAR SINGH IN ORDER TO PROVE THE SAME TO BE A GENUINE AGREEMENT. THESE TWO PERSONS IN THEIR STATEMENT DID NOT SAY IF ASSESSEE SIGNED THES E AGREEMENTS. SINCE THE ASSESSEE DID NOT SIGN THIS AGREEMENT, THEREFORE, THERE IS NO QUESTION OF MAKIN G ANY INVESTMENT BY THE ASSESSEE THROUGH THIS AGREEMENT. THEREFORE, STATEMENTS OF SHRI MANOHAR SINGH AND SHR I GURMIT SINGH WOULD NOT BE RELEVANT TO PUT THE ASSES SEE UNDER LIABILITY TO PAY THE TAXES. FURTHER, LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT IN THE DATE TIME WHEN COUNSEL FOR ASSESSEE APPEARED BEFORE ASSESSING OFFI CER FOR THEIR CROSS EXAMINATION, THE COUNSEL FOR ASSESS EE WAS TOLD THAT THESE PERSONS HAVE NOT APPEARED YET. THE ASSESSEE ALSO FILED THEIR AFFIDAVITS BEFORE ASSESSI NG OFFICER ON 26.03.2013 IN WHICH THEY HAVE CONFIRMED THAT THEY DID NOT KNOW THE ASSESSEE AND ASSESSEE HAS NOT SIGNED THE AGREEMENT IN THEIR PRESENCE. THEY HAVE EXPLAINED THEY HAVE ENTERED INTO TRANSACTION WITH M /S BASERA REALTORS P.LTD. ONLY. ON THE FACE OF THE ALLEGATIONS CONTAINED IN THESE AFFIDAVITS OF SHRI M ANOHAR SINGH AND SHRI GURMIT SINGH, THE AUTHORITIES BELOW SHOULD HAVE CALLED FOR THESE PERSONS AGAIN IN ORDER TO ELICIT THE TRUTH FROM THEM. THEREFORE, ON THE FACE OF CONTRADICTORY STATEMENTS MADE BY THESE PERSONS, IT WOULD NOT BE SAFE TO RELY UPON THEIR STATEMENTS PARTICULARLY WHEN THE AGREEMENT IN QUESTION IS NOT SIGNED BY ASSESSEE. THUS, THERE IS NO MATERIAL ON 20 RECORD TO CONNECT THE ASSESSEE WITH THE EXECUTION O F THE AGREEMENT TO SELL IN QUESTION. 17. FURTHER, THE ASSESSEE HAS PRODUCED COPIES OF SA LE DEEDS IN RESPECT OF THE TRANSACTIONS CARRIED OUT TH ROUGH THESE AGREEMENT TO SELL AND THE SALE DEEDS HAVE BEE N EXECUTED BETWEEN THE SELLERS AND ONE MR. DEEPAK CHAUHAN, VEENA JINDAL, VIJAY JAIN ETC. AND ALL THE PAYMENTS ARE MADE THROUGH CHEQUES. THEREFORE, THE COPIES OF SALE DEED WOULD DISCLOSE THAT ASSESSEE WA S NOT A PARTY TO ANY OF THE TRANSACTIONS OTHERWISE THE SA LE DEED OF 50% AS ALLEGED BY REVENUE DEPARTMENT SHOULD BE EXECUTED IN THE NAME OF THE ASSESSEE AS WELL. TH E ASSESSEE ALSO FILED COPIES OF THE JAMABANDI OF THE PROPERTY IN QUESTION WHICH SHOWS THAT AFTER THE SAL E OF PROPERTIES IN QUESTION, MUTATION HAVE BEEN MADE IN THE NAME OF PURCHASERS AND THE NAME OF THE ASSESSEE DID NOT CONTAIN IN ANY THE JAMABANDI. THIS FACT WOULD ALSO STRENGTHEN THE CASE OF THE ASSESSEE THAT ASSESSEE W AS NOT PARTY TO ANY OF THE AGREEMENT IN QUESTION AND D ID NOT MAKE ANY INVESTMENT. 18. FURTHER, THE CASE OF ASSESSING OFFICER HAD BEEN THAT ASSESSEE MADE INVESTMENTS IN THESE PROPERTIES HAVING HALF SHARES OF INVESTMENT I.E. 50% OF THE EN TIRE TRANSACTION. 50% TRANSACTION WAS CONSIDERED AS UNDISCLOSED INVESTMENT IN THE CASE OF M/S BASERA REALTORS P.LTD. AND THEIR DIRECTORS. THE ASSESSING OFFICER PASSED THE ORDERS IN THE CASE OF THE COMPAN Y 21 AND LATER ON, THE ORDERS IN THE CASE OF THE COMPANY HAVE BEEN SET ASIDE BY THE CIT UNDER SECTION 263 OF THE ACT AND ASSESSING OFFICER WAS DIRECTED TO CONSIDER ENTI RE INVESTMENTS/PASSING OF THE CONSIDERATION FOR PURCHA SE OF THE PROPERTIES IN THE HANDS OF M/S BASERA REALTO RS P.LTD.. M/S BASERA REALTORS P.LTD. FILED APPEAL BE FORE ITAT CHANDIGARH AGAINST THE ORDER UNDER SECTION 263 OF THE ACT AND THEIR APPEALS HAVE BEEN DISMISSED. THE ASSESSING OFFICER IN PURSUANCE TO THE ORDER PASSED UNDER SECTION 263 AGAIN HAD TAKEN THE ASSESSMENT PROCEEDINGS IN THE CASE OF M/S BASERA REALTORS P.LT D., COPY OF THE ASSESSMENT ORDER IS FILED AT PAGE 133 O F THE PAPER BOOK IN WHICH AGAIN, SAME FACTS HAVE BEEN CONSIDERED AND ASSESSING OFFICER DID NOT ACCEPT CONTENTION OF THE COMPANY THAT 50% OF THE SHARES BELONG TO SHRI HARINDER SINGH, ASSESSEE BECAUSE M/S BASERA REALTORS P.LTD. HAS NOT SUBMITTED ANY EVIDEN CE OF 50% SHARES OF ASSESSEE FOR THE PURPOSE OF MAKING THE ADDITION. THE ASSESSING OFFICER, THEREFORE, MADE E NTIRE ADDITION OF UNDISCLOSED INVESTMENT IN THE CASE OF M /S BASERA REALTORS P.LTD. THUS, REVENUE DEPARTMENT HAS TAKEN A VERY CLEAR AND SPECIFIC STAND ON THE IDENTI CAL FACTS THAT THE ENTIRE UNDISCLOSED INVESTMENT IN PRO PERTY THROUGH THESE AGREEMENTS IN QUESTION RELATE TO M/S BASERA REALTORS P.LTD. THEREFORE, NO ADDITION COULD BE MADE IN THE HANDS OF THE PRESENT ASSESSEE OTHERWISE , IT WOULD ALSO AMOUNT TO DOUBLE ADDITION. 22 19. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F THE MATERIAL ON RECORD, WE ARE OF THE VIEW AUTHORIT IES BELOW ARE NOT JUSTIFIED IN MAKING AND CONFIRMING TH E ADDITION OF RS. 93,63,000/- ON ACCOUNT OF UNDISCLOS ED INVESTMENT IN PURCHASE OF THE LAND IN QUESTION THRO UGH THESE AGREEMENTS. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDINGLY, SET ASIDE AND ADDITION OF RS. 93,63,00 0/- IS DELETED IN ASSESSMENT YEAR 2006-07. 20. SINCE ENTIRE ADDITION HAVE BEEN DELETED THEREF ORE, THE ISSUE OF RE-OPENING OF THE ASSESSMENT IS LEFT F OR ACADEMIC DISCUSSION ONLY. THEREFORE, THERE IS NO N EED TO DECIDE THE SAME AT THIS STAGE. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA 505/2014 IS ALLOWED. ITA 506/2014 (A.Y. 2008-09) 22. IN THIS APPEAL ALSO, ASSESSEE CHALLENGED THE INITIATION OF RE-ASSESSMENT PROCEEDINGS UNDER SECTI ON 147/148 OF THE INCOME TAX ACT. THE ASSESSEE ALSO CHALLENGED THE ADDITION OF RS. 1,28,36,000/- ON ACC OUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND AS WE LL AS ADDITION OF RS. 2,98,39,000/- ON ACCOUNT OF PROF IT ON SALE OF ALLEGED PLOTS. 23. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2006-07. THE SAME AGREEMENTS DATED 23 05.10.2005 AND 30.01.2006 ARE IN ISSUE FOR THE PURP OSE OF MAKING THE ADDITION AGAINST THE ASSESSEE. THEREF ORE, FOLLOWING THE REASONS FOR DECISION IN ASSESSMENT YE AR 2006-07, WE DELETE THE ADDITION OF RS. 1,28,36,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LA NDS. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGL Y ALLOWED. 24. THE ASSESSING OFFICER ALSO NOTED THAT DCIT, CIRCLE-I, LUDHIANA INFORMED THAT THE COMPANY IN THE NAME OF M/S BASERA REALTORS P.LTD. PURCHASED THE LA ND ALONGWITH SHRI HARINDER SINGH, ASSESSEE UNDER REFERENCE. THE PLOTS WERE DEVELOPED AND CONVERTED INTO RESIDENTIAL COLONY. BOTH OF THEM HAVE EARNED NET PR OFIT OF RS. 596.79 LACS ON SALE OF RESIDENTIAL PLOTS AND THEREFORE, 50% OF THE PROFIT BELONGS TO THE ASSESSE E I.E. RS. 2,98,39,000/-. IT WAS ALSO INTIMATED THAT THE SHARE OF THE PROFIT OF THE COMPANY HAS BEEN DECLARED IN T HEIR RETURN OF INCOME. THE ASSESSING OFFICER, THEREFORE , ON THE BASIS OF SUCH INFORMATION OBSERVED THAT ASSESSE E HAS ALSO EARNED 50% OF SUCH PROFIT AT RS. 2,98,39, 000/- AND ACCORDINGLY MADE THE ADDITION. LD. REPRESENTAT IVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUE IS DEPENDING UPON FINDINGS GIVEN ON THE INVESTMENTS MA DE IN PURCHASE OF LAND. SINCE WE HAVE ALREADY DELETED THE ADDITION ON MERIT WITH REGARD TO INVESTMENT MADE IN PURCHASE OF LANDS, THEREFORE, THERE IS NO QUESTION OF SELLING THE PLOTS OUT OF THE SAME LAND ALLEGED TO H AVE 24 BEEN PURCHASED WITH M/S BASERA REALTORS P.LTD., THEREFORE, NO SUCH PROFIT COULD BE ADDED IN THE HAN DS OF THE ASSESSEE. FURTHER, THE LD. CIT IN PROCEEDINGS U NDER SECTION 263 OF THE ACT HAS ALREADY DIRECTED THE ASSESSING OFFICER IN THE CASE OF M/S BASERA REALTOR S P.LTD. TO MAKE THE ENTIRE ADDITIONS, THEREFORE, ON THE FACE OF THE STAND TAKEN BY THE REVENUE DEPARTMENT, SUCH ADDITION IN THE HANDS OF THE ASSESSEE IS WHOLL Y UNJUSTIFIED. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 2,98,39,000/- ON ACCOUNT OF PROFIT ON SALE OF ALLE GED RESIDENTIAL PLOTS. THIS GROUND OF APPEAL OF ASSESS EE IS ALLOWED. 25. SINCE ALL THE ADDITIONS ON MERIT HAVE BEEN DELE TED AS ABOVE, THEREFORE, THE ISSUE OF RE-OPENING OF THE ASSESSMENT UNDER SECTION 147/148 IS LEFT WITH ACADE MIC DISCUSSION ONLY. THEREFORE, THERE IS NO NEED TO DE CIDE THE SAME SEPARATELY AT THIS STAGE. 26. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAIN I) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH DECEMBER, 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD