The ITO, Ward-9(4), Ahmedabad V. Shri Natwarlal Bhalabhai Patel, Ahmedabad

ITA 63/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1158 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.63/AHD/2013 /BLOCK ASSTT. YEAR: 2006-07 ITO, WARD - 9(4) AHMEDABAD. VS SHRI NATVARLAL BHALABHAI PATEL MAKARBA VILLAGE, CITY TALUKA AHMEDABAD 380 051. PAN : AGCPP 9221 G ./ ITA NO.309/AHD/2012 /BLOCK ASSTT. YEAR: 2006-07 ITO, WARD - 9(4) AHMEDABAD. VS SHRI RAJENDRA NATWARLAL PATEL PRO. OF VAISHALI HSG. CORPN. MAKARBA, AHMEDABAD 380 051. PAN : AGCPP 9224 D %& / (APPELLANT) '( %& / (RESPONDENT) REVENUE BY : SHRI JAMESH KURIAN, SR.DR ASSESSEE BY : SHRI TEJ SHAH, AR / DATE OF HEARING : 02/05/2016 / DATE OF PRONOUNCEMENT: 11/07/2016 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF THE REVENUE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-XV , AHMEDABAD DATED 18.10.2012 IN THE CASE OF SHRI NATWARLAL BHALABHAI PATEL AND ORDER DATED 25.11.2011 IN THE CASE OF SHRI RAJENDRA NATVA RLAL PATEL FOR THE ASSTT.YEAR 2006-07. ITA NO.63/AHD/2013 (2 APPEALS) 2 2. SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.50,30,600/- FROM THE HA NDS OF SHRI NATWARLAL BHALABHAI PATEL AND RS.55,88,330/- FROM THE HANDS O F SHRI RAJENDRA NATWARLAL PATEL. 3. BRIEF FACTS OF THE CASE ARE THAT SAMUTKARSH CO-O PERATIVE SOCIETY LTD. HAD PURCHASED LAND SITUATED AT SURVEY NO.274/1 , 273 & 271 FOR A CONSIDERATION OF RS.1,05,45,500/- FROM ELEVEN CO-O WNERS OF THE LAND. RESPONDENTS HEREIN ARE TWO CO-OWNERS AMONG ELEVEN. A SEARCH OPERATION WAS CONDUCTED AT THE PREMISES OF SAVVY IN FRASTRUCTURE LTD. AND SAMUTKARSH CO-OPERATIVE SOCIETY LTD. THE SAVVY INFRASTRUCTURE LTD. WAS DEVELOPING THE LAND. DURING THE COURSE OF SEARCH LOOSE PAPERS WERE FOUND WHICH ARE ANNEXED AS ANNEXURE BY THE LD. CIT(A) IN THE ORDER PASSED IN THE CASE OF SHRI RAJENDRA NATWARLAL PATEL. A PERUSAL OF THESE LOOSE PAPERS, IT REVEALED TO THE AO THAT THE TOTAL LAND COST HAS BEEN MENTIONED AT RS.610.60 LAKHS BY SAMUTKARSH CO- OPERATIVE SOCIETY LTD. OUT OF THIS, A SUM OF RS.503.06 LAKHS WAS PAID OUT OF THE BOOKS OR EXTRA PAYMENTS. WITH THIS BACKGROUND, THE LD.AO HAS ADDED 11.11% OF THIS EXTRA PAYMENT IN THE HANDS OF EACH R ESPONDENT. THIS COMES OUT TO RS.55,88,330 IN EACH HAND. 4. ON APPEAL, THE LD.CIT(A) BY WAY OF SEPARATE ORDE RS DELETED THE ADDITIONS FROM THE HANDS OF BOTH THE ASSESSEES. FO R THE FACILITY OF REFERENCE, WE TAKE NOTE OF THE FINDING RECORDED IN THE CASE OF NATWARLAL BHALABHAI PATEL. IT READS AS UNDER: 5.BUT WHEN WE GO ON THE MERITS OF THE CASE IT IS S EEN THAT BUT FOR STATING THAT THE APPELLANT SOLD LAND TO SAMUTKA RSH SOCIETY OVER AND ABOVE THE RECORDED TRANSACTIONS AND HIS SH ARE AT 11.11% OF RS.503.06 LACS COMES TO RS.55,88,330, THE AO HAS NOT BROUGHT ON RECORD ANYTHING TO PROVE THAT CONSIDERAT ION OVER AND ABOVE THE AMOUNT DECLARED ON SALE OF LAND WAS RECEI VED BY THE APPELLANT. IN THE CASE OF THE APPELLANT THERE WAS N O SEARCH, THE PAPER SEIZED IS NOT SIGNED BY ANYBODY AND IS NOT OW NED BY THE ITA NO.63/AHD/2013 (2 APPEALS) 3 APPELLANT, FURTHER THE NAME OF THE APPELLANT DOES N OT APPEAR ANYWHERE IN THE SEIZED SHEETS. HON'BLE GUJARAT HIGH COURT DECISION CITED BY THE AO IN THE CASE OF RAMILABEN R ATILAL SHAH VS. CIT 282 ITR 176 IS NOT APPLICABLE BECAUSE IN THAT C ASE THE SEARCH WAS CONDUCTED AT THE PREMISES OF RAMILABEN AND A DA IRY (CONTAINING HAND WRITTEN NOTINGS BY THE ASSESSEE AN D HER HUSBAND) RECORDING ACTUAL COST OF PROPERTY PAID BY THE ASSESSEE WAS FOUND AND SEIZED FROM HER PREMISES, WHICH IS NO T THE CASE HERE. THE SEARCH WAS CONDUCTED NOT AT THE PREMISES OF THE APPELLANT BUT AT THOSE OF SAVVY INFRASTRUCTURE AND SAMUTKARSH SOCIETY. THE APPELLANT IS NOT OWNING THE SEIZED SHE ETS. IN THE ABSENCE OF ANY MATERIAL ON RECORD BUT FOR THE THREE UNSIGNED LOOSE SEIZED SHEETS OF PAPERS SHOWING LAND PAYMENT OF RS.503.06 LACS BY SAMUTKARSH SOCIETY AS PAPERS PERTAIN TO IT , THERE IS NO OTHER EVIDENCE TO SHOW THAT CONSIDERATION OVER AND ABOVE WHAT WAS REGISTERED IN THE SALE DEED WAS RECEIVED BY THE APPELLANT. THE APPELLANT WAS NOT QUESTIONED IN THE CASE OF SAV VY INFRASTRUCTURE ON SAMUTKARSH SOCIETY AND NEVER ALLO WED TO CROSS EXAMINE THESE TWO PARTIES. IT IS THEREFORE EVEN IF THE RATIO OF HON'BLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF RAMILABEN RATILAL SHAH (SUPRA) IS FOUND APPLICABLE IN THE CAS E OF THOSE TWO PARTIES I.E. M/S SARVY INFRASTRUCTURE AND M/S SAMUT KARSH SOCIETY SINCE PREMISES OF BOTH THE PARTIES WERE SUBJECTED T O SEARCH, THOUGH IT CAN BE HELD THAT 'EXTRA LEGAL' PAYMENT OF RS. 503.06 LACS IS MADE BY THESE BUT IT CANNOT BE CONCLUDED THAT TH E SAME PAYMENT WAS MADE TO CO OWNERS OF LAND INCLUDING APP ELLANT. I AM INCLINED THAT RATIO OF ORDER IN THE CASE OF PRATHAN A CONSTRUCTION RELIED ON BY A.O. IS APPLICABLE IN HIS CASE. AS REL IED ON, LD. C.I.T. (A)XV, AHMEDABAD VIDE HER ORDER DT. 25/11/11 IN THE CASE OF OTHER CO OWNER I.E. SON OF THE APPELLANT SH. RAJEND RA NATVARLAL PATEL ON THE SAME FACT DELETED THE ADDITION SO MADE . HON'BLE SUPREME COURT IN THE CASE OF P.R. METRAMI V CIT 157 TAXMAN 325 HELD THAT PREEMPTION AS ENVISAGED U/S 132(4A) IS AP PLICABLE IN SEARCH PROCEEDINGS AND IN THE CASE OF PARTY SEARCHE D BUT ONLY MATERIAL CAN BE UTILIZED FOR FRAMING ASSTT. IN THE CASE OF PARTY SEARCHED NOT THE PRESUMPTION. HERE THE ASSESSEE WAS NOT SEARCHED OF ALL. THE RATIO OF HON'BLE DELHI ITAT OR DER IN THE CASE OF AMARJIT SINGH BAKSHI (HUF) V ASST. C.I.T. (2003) 263 ITR (AT) 75 (DELHI) IS SQUARELY APPLICABLE IN THE CASE OF AP PELLANT. THE FACT OF THIS CASE SHOWS THAT DURING THE COURSE OF A SEAR CH AT THIRD PARTY, A NOTING IN A SLIP OF PAPER WAS FOUND. SUCH SLIP INDICATED ACCORDING TO THE A.O., SALE CONSIDERATION RECEIVED BY ASSESSEE AND AN ADDITION WAS MADE. ON A DIFFERENCE BETWEEN T HE MEMBERS, THE MATTER WAS REFINED TO A THIRD MEMBER ( VIDE PRESIDENT), WHO AGREED, THAT, THOUGH INDIAN EVIDENC E ACT HAS NO STRICT APPLICATION, ITS PRINCIPLES REQUIRE CONSIDER ATION. IF THE NOTING ITA NO.63/AHD/2013 (2 APPEALS) 4 WAS IN REGULAR BOOKS OF ACCOUNT, IT WOULD HAVE SOME RELEVANCE. BUT, WHAT WAS FOUND ON A SHIP OF PAPER OR A LOOSE S HEET IS NOT COVERED BY ANY RULE UNDER THE EVIDENCE ACT, IN ABSE NCE OF ANYTHING MORE TO CORROBORATE THE INFERENCE DRAWN ON THE BASIS OF NOTING ON A SHIP OF PAPER, THE ADDITION COULD NOT B E SUSTAINED. STATEMENTS RECORDED WERE NOT SUBJECTED TO CROSS EXA MINATION. THERE WAS ABSOLUTELY NO EVIDENCE OF ANY EXTRA PAYME NT. IT IS IN THESE CIRCUMSTANCES THAT THE ADDITION WAS FOUND UN SUSTAINABLE. SIMILAR VIEW IS TAKEN BY HON'BLE ITAT BOMBAY IN THE CASE OF S.P. GOYAL V DCIT(2002) 82 ITD 85 (MUM.) (T.M). HON'BLE ITAT AHMEDABAD 'C' BENCH IN THE CASE OF M/S GAJANAN DEVE LOPERS IN ITA NO. 2863/AHD/2009 A.Y. 06-07 VIDE ORDER DT. 05/ 10/12 HELD SIMILAR VIEW FOR SUCH GROUND. IT IS THEREFORE, THERE IS NO SUBSTANCE AND CREDIBIL ITY IN THE CONTENTION OF THE A.O. ABOUT THOSE LOOSE SHEET WHIC H ARE NOTHING BUT DUMB DOCUMENTS IN THE ABSENCE OF ANY CORROBORAT IVE EVIDENCE OR CONTENTION SUPPLEMENTED BY ANY CROSS EX AMINATION AND INQUIRES THE ADDITION SO MADE BY A.O. IS THEREF ORE DIRECTED TO BE DELETED. THE APPELLANT GETS RELIEF ACCORDINGLY. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE SEIZED PAPERS HA VE BEEN ANNEXED AS ANNEXURE BY THE LD.CIT(A) IN THE CASE OF SHRI RAJEN DRA NATWARLAL PATEL. ONE OF THE PAPER EXHIBITING THE ALLEGED LEGAL COST TOWARDS THE LAND HAS BEEN REPRODUCED AT PAGE NO.3 OF THE LD.CIT(A)S ORD ER. A PERUSAL OF THESE THREE PAPERS WOULD REVEAL THAT NOWHERE THEY D ISCLOSED ANY PAYMENT TO THE ASSESSEE. NARRATION MADE IN THE LOO SE PAPER IS FOR LAND 107.54 LAKHS, FOR LEGAL 0, EXTRA LEGAL 503.06, TOTA L 610.60. THE AO HAS INTERPRETED IT THAT THE EXTRA LEGAL AMOUNT MENTIONE D AT 503.06 LAKHS IS TO BE CONSTRUED AS IF PAID TO THE ASSESSEE, OVER AN D ABOVE, THE AMOUNTS STATED IN THE SALE DEED. THIS ASPECT HAS BEEN ELAB ORATELY DEALT BY THE LD.CIT(A). THE ENTRIES FOUND AT THE PREMISES OF TH E THIRD-PERSON CAN BE A CORROBORATIVE PIECE OF EVIDENCE FOR INITIATING AN INQUIRY. IT CANNOT BE A SOLE DOCUMENT ON THE BASIS OF WHICH ADDITIONS CAN BE MADE IN THE HANDS OF THE ASSESSEE. HAD THE LD.AO RECORDED STAT EMENT OF THE REPRESENTATIVE OF SAMUTKARSH CO-OPERATIVE SOCIETY L TD. WHO HAS ADMITTED PAYMENT OF ON-MONEY TO THE ASSESSEE, AND T HESE PERSONS ITA NO.63/AHD/2013 (2 APPEALS) 5 WERE PUT FOR CROSS-EXAMINATION, THEN, PROBABLY SOME EVIDENCE COULD BE COLLECTED BY THE REVENUE TO CONFRONT WITH THE ASSES SEE. THE PAPERS MIGHT BE A ROUGH SHEET. THEY DO NOT CONTAIN ANY SI GNATURE. WHO HAS PREPARED THIS SHEET, IT IS NOT DISCERNIBLE; AND HOW THIS EXTRA LEGAL EXPENDITURE COULD BE TERMED AS PAYMENT FOR PURCHASE LAND. IT CAN BE AN AMOUNT FOR CHANGE OF LAND USER CERTIFICATE OR AN Y PAYMENT FOR FULFILLMENT OF ANY OTHER OBLIGATIONS. THEREFORE, I N OUR OPINION, THE DEPARTMENT WAS NOT POSSESSING SUFFICIENT EVIDENCE T O MAKE ADDITIONS IN THE HANDS OF THE ASSESSEES. THE LD.CIT(A) HAS RIGH TLY DELETED THE ADDITIONS FROM THE HANDS OF BOTH THE ASSESSEES. AC CORDINGLY, THE APPEALS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 11/07/2016