The Dy. Commissioner Income-tax, Jammu V. M/s. Horizon Buildcon Pvt. Ltd, Jammu

ITA 672/ASR/2014

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8271 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-02-2020
• Assessment Year: misc
• Appeal Filed On: 05-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M P SINGH
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Document seized; Source of fund; Onus to prove; Documents seized
• Section: 143(3); 153A; 234B; 201; 251; 43; 48; 72; 13; 22; 69; 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH AMRITSAR BEFORE SHRI L.P. SAHU, AM & SHRI RAVISH SOOD, JM . .. . / ITA NO.434/ASR/2016 ( / ASSESSMENT YEAR : 2009-2010) ITO, WARD-5(5), AMRITSAR VS. SH. SURJIT SINGH, 29-D, GURU AMAR DASS AVENUE AJNALA ROAD, AMRITSAR. ./ PANNO. : ALNPS 4128 D AND . .. . / ITA NOS.671, 672 & 673/ASR/2014 ( / ASSESSMENT YEAR : 2009-2010 TO 2011-2012) DY.CIT, CENTRAL CIRCLE, JAMMU VS. M/S HORIZON PVT. LTD., 71/4, TRIKUTA NAGAR, JAMMU ./ PANNO. : AABCH 9269 A ( / APPELLANT ) .. ( / RESPONDENT ) ' '' ' /REVENUE BY : SHRI M.P.SINGH, CIT-DR $ ' '' ' /ASSESSEE BY : NONE ' ' / DATE OF HEARING : 06/02/2020 ' ' / DATE OF PRONOUNCEMENT : 30/06/2020 / O R D E R PER L.P.SAHU, AM : THESE FOUR APPEALS HAVE BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE CIT(A)-2, AMRITSAR, DATED 30.05.2016 AND ORDER OF THE CIT(A)-I, DATED 12.08.2014. 2. THESE CASES WERE LISTED FOR HEARING ON 05.02.2020 , HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE SAID DA TE. THEREAFTER THE CASES WERE ADJOURNED TO 06/02/2020, EVEN ON THIS DATE ON THE FIRST ROUND AND SECOND ROUND OF THE PROCEEDINGS, NO ONE APP EARED ON BEHALF ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 2 OF THE ASSESSEE. THEREFORE, THE BENCH PROCEEDED TO DISPOSE OFF ALL THE FOUR APPEALS AFTER CONSIDERING THE SUBMISSIONS OF LD. DR AND THE MATERIAL EVIDENCE AVAILABLE ON THE RECORD. 3. THE GROUNDS OF APPEAL RAISED IN ITA NO.434/ASR/20 16 ARE AS UNDER:- 1. WHETHER THE LD.CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS. 10,83,75,750/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNEXPLAINED INVESTMENT BY THE ASSESSEE FROM HIS UND ISCLOSED SOURCES MADE IN PURCHASE OF LAND FROM VARIOUS PERSO NS/FARMERS BY HOLDING THAT 'THE AO HAS NOT BROUGHT ANY EVIDENCE O N RECORD TO SHOW THAT THE APPELLANT HAD PURCHASED THE LAND FROM VARIOUS PERSONS/ FARMERS ON AGREEMENTS/IKRARNAMAS OR POWER OF ATTORNEY IN HIS NAME AND LATER TRANSFERRED THE SAME TO M/S H ORIZON BUILDCON PVT LTD., ON POWER OF ATTORNEY OF THE ORIG INAL OWNERS', IGNORING THE DETAILED DISCUSSION OF THE SAME IN THE ASSESSMENT ORDER. 2. WHETHER THE LD.CIT(A) IS RIGHT TO HOLD THAT 'THE AO HAS ALSO NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE APP ELLANT HAD RECEIVED ANY PAYMENT FROM M/S HORIZON BUILDCON (P) LTD TOWARDS SALE CONSIDERATION OF THE LANDS IN QUESTION IN THE CAPACITY OF OWNERS OF LAND', IGNORING THE FACTS ON RECORD THAT M/S HORIZON BUILDCON (P) LTD HAS MADE PAYMENTS THROUGH CHEQUES AND IN CASH TO SH. SURJIT SINGH AND ALL OF THESE PAYMENTS HAVE BEEN FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF M/S HORIZON BU ILDCON (P) LTD AS DISCUSSED IN THE ASSESSMENT ORDER BY THE AO AS W ELL CONFIRMED BY THE LD. CIT(A)-1, LUDHIANA IN HIS ORDER DATED 12 .08.2014 IN APPEAL NO. 1/ROL/IL/ CIT(A)-1/LDH/2014-15 IN THE CA SE OF M/S HORIZON BUILDCON (P) LTD. 3. WHETHER THE LD.CIT(A) IS RIGHT TO HOLD THAT 'HYPED IKRARNAMAS WERE EXECUTED BY THEM TO IMPRESS THE COMPANY APPEAR S TO BE JUSTIFIED AND IS UPHELD', IGNORING THE FACTS THAT E VENTS HAVE BEEN HAPPENED FURTHER ON THE BASIS OF THESE IKRARNAMAS A S DISCUSSED IN DETAILS IN THE ASSESSMENT ORDER AND IT IS ALSO AGAI NST THE HUMAN PROBABILITY THAT A PERSON TRANSFER HIS RIGHT OF PRO PERTY TO SOMEONE ELSE WITHOUT TAKING ANY CONSIDERATION. 4. WHETHER THE LD.CIL(A) IS RIGHT TO HOLD THAT 'T HE MOU DATED 22.01.2008 AND SUPPLEMENTARY MOU DATED 18.03.2008 W ERE REMAINED UNSIGNED AND THE SAID UNSIGNED DOCUMENTS W ERE OF NO EVIDENTIARY VALUE IN THE EYES OF LAW' WHEN THE ASSE SSING OFFICER HAS DISCUSSED IN DETAIL IN HIS ASSESSMENT ORDER THAT TH E SAME REFLECT THE ACTUAL STATE OF AFFAIRS OF BUSINESS TRANSACTIONS CA RRIED OUT BY THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 3 ASSESSEE AS COMPARED TO WHAT IS REFLECTED IN BOOKS OF ACCOUNTS OF THE BUYER COMPANY M/S HORIZON BUILDCON (P) LTD. 5. WHETHER THE LD.CIT(A)IS RIGHT IN DELETING THE A DDITION OF RS. 85,90,000/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHORT TERM CAPITAL GAIN BY HOLDING THAT 'THE ASSESSEE HAD NOT PURCHASED ANY LAND IN HIS NAME AND HAD NOT TRANSFERRED/SOLD THE S AME IN THE CAPACITY OF OWNER OF LAND, THEREFORE THE QUESTION O F CHARGING CAPITAL GAIN THEREON DOES NOT ARISE', IGNORING THE FACTS ON RECORD THAT M/S HORIZON BUILDCON (P) LTD HAS MADE PAYMENTS THROUGH CHEQUES AND IN CASH TO SH. SURJIT SINGH AGAINST PUR CHASE OF LAND AND ALL OF THESE PAYMENTS HAVE BEEN FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF M/S HORIZON BUILDCON (P) LTD AS DISCUSS ED IN THE ASSESSMENT ORDER BY THE AO AS WELL CONFIRMED BY THE LD. CIT(A)-1, LUDHIANA IN HIS ORDER DATED 12.08.2014 IN APPEAL NO . 1/ROT/IT/ CIT(A)-L/LDH/2014-15 IN THE CASE OF M/S HORIZON BUI LDCON (P) LTD. 6. THE APPELLANT CRAVES LEAVE TO ADD OR AMEN D THE GROUNDS OF APPEAL ON OR BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 7. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS), BE SET-ASIDE AND THAT OF THE AO BE RESTO RED ON MERITS. 4. THE REVENUE IN ITA NO.671/ASR/2014 FOR A.Y.2009- 2010 HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER THE LD.CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.3,12,44,640/- MADE BY THE ASSESSING OFFICER U/S 69 /69B OF THE IT ACT, 1961 BY HOLDING THAT THE DOCUMENTS I.E. MOU DATED 22.01.2008 AND SUPPLEMENT MOU DATED 18.03.2008 WHIC H WERE FOUND AND SEIZED DURING THE TIME OF SEARCH, THOUGH NOT SIGNED BY EITHER OF THE PARTIES, IN THIS CASE; COULD NOT BE T AKEN AS EVIDENCE OF THE PAYMENT OF UNACCOUNTED MONEY OVER AND ABOVE THE REGISTRATION PRICE OF IMPUGNED LAND PURCHASE, IGNOR ING THE DETAILED DISCUSSION OF THE SAME IN THE ASSESSMENT O RDER. 2. WHETHER THE LD.CIT(A) IS RIGHT TO HOLD THAT VA RIOUS IKRARNAMAS, PHOTOCOPIES OF WHICH WERE FOUND AND SEIZED DURING S EARCH VIZ. A-9 DNB-1 ARE COLLUSIVE IN NATURE, AS CLAIMED BY THE AS SESSEE, WHEN THESE DOCUMENTS HAVE ACTUALLY BEEN SEIZED FROM THE PREMISES OF THE ASSESSEE ITSELF. 3. WHETHER THE LD.CIT(A) IS RIGHT TO CONCLUDE THA T VARIOUS DOCUMENTS FOUND AND SEIZED AT THE TIME OF SEARCH HAVE NO EVID ENTIARY VALUE WHEN THE ASSESSING OFFICER HAS DISCUSSED IN DETAIL IN PARA 05(A) TO (H) OF HIS ASSESSMENT ORDER DATED 21.03.2014 THAT T HE SAME REFLECT THE ACTUAL STATE OF AFFAIRS OF BUSINESS TRANSACTION S CARRIED OUT BY THE ASSESSEE AS COMPARED TO WHAT IS REFLECTED IN IT S BOOKS OF ACCOUNTS. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 4 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. 5. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS), BE SET-ASIDE AND THAT OF THE AO BE RESTO RED ON MERITS. 5. THE REVENUE IN ITA NO.672/ASR/2014 FOR A.Y.2010- 2011 HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER THE LD.CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS. 2,81,20,180/- MADE BY THE ASSESSING OFFICER U/S 69 /69B OF THE IT ACT, 1961 BY HOLDING THAT THE DOCUMENTS I.E. MOU DA TED 22.01.2008 AND SUPPLEMENT MOU DATED 18.03.2008 WHIC H WERE FOUND AND SEIZED DURING THE TIME OF SEARCH, THOUGH NOT SIGNED BY EITHER OF THE PARTIES, IN THIS CASE; COULD NOT BE T AKEN AS EVIDENCE OF THE PAYMENT OF UNACCOUNTED MONEY OVER AND ABOVE THE REGISTRATION PRICE OF IMPUGNED LAND PURCHASE, IGNOR ING THE DETAILED DISCUSSION OF THE SAME IN THE ASSESSMENT O RDER. 2. WHETHER THE LD.CIT(A) IS RIGHT TO HOLD THAT VA RIOUS IKRARNAMAS, PHOTOCOPIES OF WHICH WERE FOUND AND SEIZED DURING S EARCH VIZ. A-9 DNB-1 ARE COLLUSIVE IN NATURE, AS CLAIMED BY THE AS SESSEE, WHEN THESE DOCUMENTS HAVE ACTUALLY BEEN SEIZED FROM THE PREMISES OF THE ASSESSEE ITSELF. 3. WHETHER THE LD.CIT(A) IS RIGHT TO CONCLUDE THA T VARIOUS DOCUMENTS FOUND AND SEIZED AT THE TIME OF SEARCH HAVE NO EVID ENTIARY VALUE WHEN THE ASSESSING OFFICER HAS DISCUSSED IN DETAIL IN PARA 05(A) TO (H) OF HIS ASSESSMENT ORDER DATED 21.03.2014 THAT T HE SAME REFLECT THE ACTUAL STATE OF AFFAIRS OF BUSINESS TRANSACTION S CARRIED OUT BY THE ASSESSEE AS COMPARED TO WHAT IS REFLECTED IN IT S BOOKS OF ACCOUNTS. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. 5. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS), BE SET-ASIDE AND THAT OF THE AO BE RESTO RED ON MERITS. 6. THE REVENUE IN ITA NO.673/ASR/2014 FOR A.Y.2011- 2012 HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER THE LD.CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.3,43,69,110/- MADE BY THE ASSESSING OFFICER U/S 69 /69B OF THE IT ACT,1961 BY HOLDING THAT THE DOCUMENTS I.E. MOU DATED 22.01.2008 AND SUPPLEMENT MOU DATED 18.03.2008 WHIC H WERE FOUND AND SEIZED DURING THE TIME OF SEARCH, THOUGH NOT SIGNED BY EITHER OF THE PARTIES, IN THIS CASE; COULD NOT BE T AKEN AS EVIDENCE OF THE PAYMENT OF UNACCOUNTED MONEY OVER AND ABOVE THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 5 REGISTRATION PRICE OF IMPUGNED LAND PURCHASE, IGNOR ING THE DETAILED DISCUSSION OF THE SAME IN THE ASSESSMENT O RDER. 2. WHETHER THE LD. CLT(A) IS RIGHT TO HOLD THAT V ARIOUS IKRARNAMAS, PHOTOCOPIES OF WHICH WERE FOUND AND SEIZED DURING S EARCH VIZ. A-9 DNB-1 ARE COLLUSIVE IN NATURE, AS CLAIMED BY THE AS SESSEE, WHEN THESE DOCUMENTS HAVE ACTUALLY BEEN SEIZED FROM THE PREMISES OF THE ASSESSEE ITSELF. 3. WHETHER THE LD.CIT(A) IS RIGHT TO CONCLUDE THA T VARIOUS DOCUMENTS FOUND AND SEIZED AT THE TIME OF SEARCH HAVE NO EVID ENTIARY VALUE WHEN THE ASSESSING OFFICER HAS DISCUSSED IN DETAIL IN PARA 05(A) TO (H) OF HIS ASSESSMENT ORDER DATED 21.03.2014 THAT T HE SAME REFLECT THE ACTUAL STATE OF AFFAIRS OF BUSINESS TRANSACTION S CARRIED OUT BY THE ASSESSEE AS COMPARED TO WHAT IS REFLECTED IN IT S BOOKS OF ACCOUNTS. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. 5. IT IS PRAYED THAT THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS), BE SET-ASIDE AND THAT OF THE AO BE RESTO RED ON MERITS. 7. IN ALL THE FOUR APPEALS ISSUES INVOLVED ARE SIMIL AR IN NATURE, THEREFORE, FOR THE SAKE OF CONVENIENCE AND BREVITY, WE ARE TAKING FIRST THE APPEAL FOR THE A.Y.2009-2010 IN ITA NO.434/ASR/ 2014 AND THE FACTS AND GROUNDS MENTIONED THEREIN ARE TAKEN INTO CON SIDERATION TO DECIDE ALL THE FOUR APPEALS. 8. BRIEF FACTS OF THE CASE ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S.148 OF THE ACT AFTER RECORDING REASONS AND DULY APPROVED. THERE WAS AN INFORMATION WITH THE INCOME T AX DEPARTMENT THAT THE ASSESSEE MADE INVESTMENT OF RS.10,92,86,25 0/- FOR THE PURCHASE OF LAND AT VILLAGE SULTANWIND DISTRICT AMR ITSAR IN THE FINANCIAL YEAR 2008-2009 RELEVANT TO THE ASSESSMENT YEAR 2009 -2010. NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 19. 03.2015 REQUIRING ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 6 THE ASSESSEE TO FILE RETURN OF INCOME WITHIN 30 DAYS FROM THE RECEIPT OF THE SAID NOTICE, WHICH WAS SERVED UPON THE ASSESSEE O N 20.03.2015. IN PURSUANT TO THE NOTICE U/S.148 OF THE ACT, THE ASSE SSEE FILED RETURN OF INCOME ON 04.01.2016 FOR THE A.Y.2009-2010 DECLARING AN INCOME OF RS.1,59,540/- + AGRICULTURAL INCOME AT RS.4,82,000/ -. THEREAFTER OTHER STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE AND THE ASSESSEE SUBMITTED REQUIRED REPLY/INFORMATION, DETAILS ALONG WI TH NECESSARY DOCUMENTS. AS PER THE AO THE ASSESSEE FILED PART REP LY I.E. DETAIL OF BANK ACCOUNTS MAINTAINED BY HIM ALONG WITH COMPLETE STAT EMENT OF ACCOUNT. THEREFORE, THE AO REQUIRED THE ASSESSEE TO EXPLAIN AS UNDER :- 'PLEASE REFER TO THE ASSESSMENT PROCEEDINGS PENDING IN YOUR CASE FOR THE ASSTT. YEAR 2009-10, YOU ARE REQUESTED TO FURNISH T HE INFORMATION AS CALLED FOR VIDE THIS QUESTIONNAIRE DATED 13/1/2016. IN ADDITION TO THAT, YOU ARE REQUESTED TO FURNISH THE FOLLOWING INFORMAT ION ALSO:- 1. AS PER REPLY DATED 19/1/2016, YOU HAVE FILED Y OUR BANK ACCOUNT STATEMENTS ACCOUNTS FOR THE PERIOD 1/4/2008 TO 31/3 /2009: S.NO. ACCOUNT NUMBER NAME OF THE BANK 1. 630410110001914 AXIS BANK LTD. 2. 00871200040765 PUNJAB & SIND BANK 3. 00871000040710 -DO- 4. 63043211000002 BANK OF INDIA 5. 07245111000072 ORIENTAL BANK OF COMMERCE 6. 1781 AMRITSAR CENTRAL COOPERATIVE BANK 7. 5503111871 STATE BANK OF INDIA 8. 81017340000280 SYNDICATE BANK 9. 81011250000964 -DO- 10. 81012200013905 -DO- 11. 00011250681 ICICI BANK LTD. YOU ARE REQUESTED TO GIVE COMPLETE NARRATION OF EAC H DEBIT AND CREDIT ENTRIES OF THESE BANK ACCOUNTS MADE BY YOU D URING THE PERIOD UNDER REFERENCE. ALSO EXPLAIN THE NATURE/TYP E OF ACCOUNT I. E. SAVING ACCOUNT/CURRENT ACCOUNT/OD ACCOUNT/LOAN A CCOUNT ETC. ETC. 2. AS PER INFORMATION AVAILABLE WITH THIS O FFICE, DURING THE YEAR UNDER REFERENCE, YOU HAVE PURCHASE FOLLOWING LAND A T VILLAGE SULTANWIND FROM THE PERSONS MENTIONED BELOW FOR A T OTAL AMOUNT OF RS. 10,92,76,250/- :- ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 7 S. N NAME OF SELLER KHASRA NO. TOTAL AREA RATE PER SQ. YRDS TOTAL AMOUNT PAID OF PURCHASE DATE OF PURCHASE FY 1. DILBHAG SINGH & HIRA SINGH 4431 3K 10M = 1750SQYRDS 1900/ - 33,25,000/ - 7/10/2008 (2008-09) 2. FAKIR SINGH 4436, 4566 4K5M = 2125 SQYRDS 1650/ - 35,06,250/ - 15/12/08 (2008 - 09) 3. HARBANS KAUR -4415, 4418, 4419,4427, 4428,4430, 4436, 4437, 5506/4425,5507/4432 15K7M = 7675 SQYDS. 13 K = 6500 SQRD 1200/- 1100/- 92,10,000/- 71,50,000/- 27/11/08 (2008- 09) 4. SATPAL SWAM, AMARJIT PRITHPAL, GURMEET, KEWAL 5511/4564/5512/456 4, 4537, 4546, 4556, 4563, 4565, 6081/4541 40K = 20000 SQYRDS 1315/ - 2,63,00,000/ - 7/11/2008 (2008-09) 5. BALBIR, JASBIR & RANJIT SINGH 4429 3K = 1500SQYRD. 2100/- 31,50,000/- 15/12/2008 (2008-09) 6. PARKASH SINGH & BALJIT SINGH 4418, 4419,4427 ,4428, 4430, 4432, 4436, 4437, 5506/4425 24K 5M = 12125 SQYRDS 2900/ - 3,51,62,500/ - 7/4/2008 (2008 - 09) 7. MANJIT KAUR 4415, 4419, 4427, 4428, 4430, 4432, 4436, 4437, 5506/4425 20K 9M= 10225 SQYRDS 2100/ - 2,14,72,500/ - 15 /12/2008 (2008-09) TOTAL LAND PURCHASED DURING FY 2008 - 09 61900 SQYRDS 10,92,76,250/ PLEASE EXPLAIN THE SOURCE OF THIS HUGE INVESTMENT M ADE BY YOU EVIDENCE AND ALSO EXPLAIN THE MODE OF PAYMENT MADE BY YOU AG AINST THIS PURCHASE. FURTHER INFORMATION DISCLOSE THAT DURING THE YEAR U NDER REFERENCE, YOU HAVE ALSO SOLD LAND AT VILLAGE SULTANWIND MEASURING 35 KANAL 2 MARIA (17550 SQYRDS) FOR AN AMOUNT OF RS. 4,05,40,500/- T O M/S HORIZON BUILDCON(P) LTD. NEW DELHI. PLEASE EXPLAIN WHETHER ANY CAPITAL GAIN/LOSS SHOWN BY YOU ON ACCOUNT OF THIS TRANSACTION, IF NOT , THE REASON OF THE SAME. ALSO EXPLAIN THE DATE OF PURCHASE OF THE SAID LAND. GIVE THE DETAILS OF RECEIPT OF PAYMENT AGAINST THE ABOVE SAID LAND TRANSACTION ALOGNWITH THE MODE OF RECEIPT.'' IN RESPONSE THE ASSESSEE FILED HIS DETAILS EXPLANATI ON/REPLY VIDE LETTER DATED 26/02/2016, WHICH HAS BEEN REPRODUCED BY THE A O AT PARA 2.3 AS UNDER :- 'IT IS MOST RESPECTFULLY SUBMITTED THAT WE ARE IN R ECEIPT OF YOUR LETTER NO. PAN ALNPS4128D DATED 13.01.2016 FOR SUBMISSION OF VARIOUS DETAILS & DOCUMENTS IN THE ASSESSMENT PROCEEDINGS OF ABOVE NAMED ASSESSEE UNDER SECTION 148 OF THE INCOME TAX ACT, 1 961. THE POINT WISE REPLY TO YOUR NOTICE ALONGWITH DETAILS & DOCUMENTS SOUGHT BY YOUR GOOD SELF ARE GIVEN AS UNDER: - 1. EXPLAIN YOUR SOURCE OF INCOME : I WISH TO STATE AND SUBMIT THAT I AM HARVESTING AGR ICULTURE PRODUCE ON 45 ACRES ANCESTRAL LAND AND AM ALSO A PARTNER IN AG RICULTURAL PRODUCE COMMISSION AGENCY FIRM M/S. B.S TRADING COMPANY. FU RTHER, I WAS WORKING AS A PROPERLY CONSULTANT/BROKE DURING THE P REVIOUS YEAR ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 8 RELEVANT TO THE ASSESSMENT YEAR 2009-10. I HAVE ALR EADY EXPLAINED COMPLETE SOURCES OF INCOME IN RETURNS OF INCOME FIL ED FOR THE ASSESSMENT YEAR 2009-10. COPIES OF THE INDIVIDUAL & PARTNERSHI P FIRM RETURNS FOR THE A.Y. 2009-10 ARE ENCLOSED HEREWITH FOR YOUR KIND CO NSIDERATION & RECORDS. 2. DETAILS OF THE IMMOVABLE ASSETS/PROPERTY/LAND PURCHASED & SOLD AT VILLAGE SULTANWIND DURING THE YEAR UNDER CO NSIDERATION ALONG WITH NAME & ADDRESS OF THE PERSONS FROM YOU H AVE PURCHASES THE LAND AND TO WHOM YOU HAVE SOLD THE SA ID PROPERTY/LAND: I WISH TO STATE AND SUBMIT THAT I HAD NEITHER PURCH ASES NOR SOLD ANY ASSETS/PROPERTY/LAND AT VILLAGE SULTANWIND IN MY PE RSONAL CAPACITY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2009-10. AS SUCH THIS QUESTION IS NOT RELEVANT AND APPLICABLE A T ALL. I WOULD LIKE TO BRING TO YOUR KIND NOTICE THAT DURI NG THE YEAR UNDER CONSIDERATION, I HAD REPRESENTED AS POWER ATTORNEY HOLDER ON BEHALF OF THE VARIOUS FARMERS AS PER DETAILS GIVEN BELOW WHO HAD DIRECTLY SOLD THE LAND AT VILLAGE SULTANWINDER TO M/S HORIZON BUILDCO N(P) LTD. IT IS RESPECTFULLY SUBMITTED THAT IN ADDITION TO BEING A LAND LORD AND PROPERTY CONSULTANT I AM ACTIVE IN PUBLIC LIFE AND I COMMAND RESPECT AMONG FARMER COMMUNITY. THESE FARMERS APPROACHED ME TO OB TAIN CLU AND TO REPRESENT THEM IN ORDER TO PROTECT THEIR INTERESTS. SINCE I WAS NOT ABLE TO ARRANGE THE CLU THEREFORE I ACTED AS THEIR ATTORNEY /AGENT WITHOUT ANY MONETARY BENEFITS. THE PHOTOCOPIES OF THE SOME POWER OF ATTORNEY GIVEN BYFAMERS TO ME AND AS AVAILABLE WITH ME AS ON DATE ARE ENCLOSED HE RE WITH FOR YOUR KIND CONSIDERATION & RECORD. THE TERMS & CONDITION OF TH E POWER OF ATTORNEY CLEARLY STIPULATE THAT NEITHER ANY MONEY NOR ANY RI GHTS/TITLE TO LAND OR POSSESSION OF LAND HAS BEEN EXCHANGED, BETWEEN PART IES (I.E. BETWEEN OWNERS/FARMERS AND SURJIT SINGH POA HOLDERS). IT IS CLEARLY PROVED & EVIDENCED THAT THE FARMERS HAVE NOT SOLD ANY LAND T O ME & THEY HAD GIVEN POA TO ME ONLY TO REPRESENT THEM AND AS SUCH THE QUESTION OF SELLING OF THE LAND TO M/S HORIZON BUILDCON PVT. LT D. IN MY PERSONAL CAPACITY AGAIN REITERATED THAT THIS DOCUMENT WAS NE VER EXECUTED BETWEEN US AND M/S. HORIZON BUILDCON (P) LTD, HENCE WAS UNSIGNED AND UNEXECUTED. THE DETAILS OF THE SALES DEED EXECUTED BY ME DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2010-11 AS A POWER OF ATTORNEY (POA) HOLDER OF THE FOLLOWING FARMERS IS GIVEN AS UNDER: DATE OF REGISTRY NAME OF SELLER KHASRA NUMBER TOTAL AREA OF TOTAL SALES DETAILS OF P AYMENT RECEIVED BY ME DETAILS OF PAYMENTS REFUNDED TO FARMERS DETAILS OF POA NO. GIVEN BY THE AGRICULT LURE LAND CONSIDER ALION FARMERS 27.5.09 HARBANS KAUR 4415, 10K-1M 2261500 REED. RS. 10 LACS ON AMT REFUNDED TO 07/04//2008/D 4418, 4427, 4436 9/5/2008 IN SB A/C WITH SYNDICATE BANK FARMER OUT OF CASH WITHDRAWAL FROM SB A/C SYNDICATE BANK. OC 1390 2/3/09 IJHARBANS KAUR, 4416, 17K-1M 3826500 I)CH. NO.394300 AMT.REFUNDED TO 1) 07/04/08 ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 9 HJDILBAG SINGH & 4417, RCVD.FOR RS.35 LACS FARMERS VIDE DOC1390 HIRA SINGH & 4418, AND DEPOSITED ON CHQ.NO.95702.95703 & 2. 10/02/09 DOC JASBIR SINGH. 4427 23.3.09 IN SB A/C 95704FOR RS.7.50 LACS 2815 III)PRAKSH SINGH & 4428, WITH SYNDICATE BANK RS.6.50 LACS AND 314/01/09 DOC BALJIT SINGH & 4430. AND RS.8.00 LACS FROM SB 2496 GURPREETSINGH 4431 2)CASH RECEIVED A/CWITH SYNDICATE 4.24.12.08 IVJPARGAT SINGH & JAGIR SINGH (THROUGH MANJIT SINGH & SAWARAJ SINGH GPA THROUGH SURJIT SINGH SPA V) MANJIT SINGH RS.32500/ - BANK AND BALANCE RS. 16.26 LACS REFUNDED TO THE FARMERS IN CASH BEING WITHDRAWALS FROM SB A/CAND PAYMENTS RECEIVED IN CASH AT THE TIME OF REGISTRY DOC2282 5.24.02.09 DOC 2971 11.12.09 I) HARBANS KAUR 4417.4 20K- 46.00 LA RS. 50.00 LACS AMOUNT REFUNDED TO T.HE FARMERS OUT OF CASH WITHDRAWAL FROM MY SAVING BANK ACCOUNT I) 14/07/09/DOC3 33 & I6/11/09/DOC2 725 II) 14/07/09/DOC 1239 III) 12/11/09 DOC 2700 IV) 24/12/08 DOC 2282 V) 23/05/08 DOC 149 IT) MANJEET KAUR 222.44 05M CS RECEIVED BY ME HI) FAKIR SINGH 23.442 THROUGH CHEQUE IV) PARGAT SINGH & JAGIR SINGH V) RAJINDER KAUR ALIAS BALWINDER KAUR VI) SWARN SINGH, AMARJIT SINGH, GURMEET SINGH, PRITPAL SINGH, KEWEK SINGH & CHARANJIT KAUR, IQBAL KAUR 4,4565. 4566.4 567,44 37.550 4/4425, 4436, 5511 12/456 4 IT IS CLEARLY EVIDENCE FROM THE ABOVE CHARTS THAT I HAD REPRESENTED AS A POWER OF ATTORNEY (POA) OF THE ABOVE FARMERS AND TH E PAYMENTS RECEIVED BY ME ON THEIR BEHALF HAS BEEN REFUNDED TH EM WITHOUT ANY MONETARY BENEFITS. THE COPY OF THE SALE DEED IN RESPECT OF LAND SOLD B Y YOU TO M/S HORIZON BUILDCON (P) LTD. 8/11, JANSPURA EXTENSION NEW DELHI AS PER MOU EXECUTED ON 22.01.2008. ALSO FURNISH THE CO PY OF THE ASREEMENT/MOU EXECUTED BY YOU WITH THE SAID COMPANY : I WISH TO STATE AND SUBMIT THAT I HAD NOT SOLD ANY LAND TO MS HORIZON BUILDCON (P) LTD. 8/11. JANGPURA EXTENSION NEW DELH I DURING THE PREVIOUS YEAR RELEVANT YEAR ASSESSMENT YEAR 2009-10 ON THE BASIS OF SO CALLED MOU DATED 22.01.2008. AS SUCH THIS QUESTION IS NOT RELEVANT TO ME. IN THIS CONNECTION, I WOULD LIKE TO BRING YOUR KIND NOTICES THAT I SURJIT SINGH AND SH. BALJINDER SINGH WERE DOING THE PROPER TY DEALING ACTIVITIES AS BROKER FOR AGRICULTURE AND COMMERCIAL LAND ON CO MMISSION BASIS. AS PER USUAL PRACTICE BEING FOLLOWED BY THE REAL ESTAT E AGENTS WE APPROACHED M/S HORIZON BUILDCONPVT LTD WITH DRAFT/R OUGH COPY OF MEMORANDUM OF UNDERSTANDING (MOU) DATED 22.01.2008. WE ALSO PAPERED SOME IMAGINARY BIYANA/AGREEMENTS TO SELL IN OUR NAMES FROM DIFFERENT LAND OWNERS TO CONVINCE THE COMPANY ABOUT OUR CAPACITY TO CONSOLIDATE THE LAND AND IN ORDER TO JUSTIFY HIGH P RICES OF THE LAND AFTER PROPOSED CLU. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 10 THE SAID DRAFT/ROUGH COPY OF THE MOU WAS NOT SIGNED BY ANY PARTY AS OUR TERMS AND CONDITION WERE NOT ACCEPTABLE TO THE COMPANY AND THEY WERE NOT CONVINCED ABOUT OUR CAPACITY TO CONSOLIDAT E THE LAND AND TO OBTAIN NECESSARY APPROVALS FOR CHANGE OF LAND USE. THEREFORE THIS DOCUMENT IS DUMB DOCUMENT AND DOES NOT HAVE ANY VAL UE IN THE EYES OF LAW. IN THIS REGARD I HAVE GIVEN AN AFFIDAVIT DATED 12/12/2013 (DULY ATTESTED AND VERIFIED BY NOTARY) TO M/S HORIZON BUI LCON (P) LTD FOR SUBMISSION BEFORE INCOME TAX AUTHORITIES IN ASSESSM ENT/APPELLATE PROCEEDINGS. CONTENTS OF THE AFFIDAVIT ARE BEING RE PRODUCED FOR YOUR KIND PERUSAL AS UNDER: 'AFFIDAVIT OF SARDARSURJIT SINGH, S/O S. HARJINDER SINGH AGED ABOUT 59 YEAR, RESIDENT OF VILLAGE BHAKHA, HARI SINGH TEHSIL AJNALA, DISTRICT AMRITSAR(PUNJAB) I, THE ABOVE NAME DEPONENT, SOLEMN LY AFFIRM AND STATE AS UNDER: 1) THAT I SARDARSURJIT SINGH ALONWITHBALJINDER S INGH S/O S. NATHA SINGH R/O VILLAGE RAMANACHAK, TEHSIL BABA BAKALA, D ISTRICT AMRITSAR (PUNJAB) ARE BROKER AND ENGAGED IN THE PROPERTY DEA LING ACTIVITIES OF AGRICULTURE OR COMMERCIAL LAND ON COMMISSION BASIS. 2) THAT WE HAD APPROACHED TO M/S HORIZON BULIDCO NPVT LTD, 8/11, HOSPITAL ROAD, JANGPURA EXT. NEW DELHI 110014 WITH A DRAFT COPY OF MEMORANDUM OF UNDERSTANDING (MOU) DATED 22.01.2008 WITH AN INTENSION TO MAKE THE DEAL WITH THE SAID COMPANY FO R SALE OF LAND AT RATE OFFERED IN THE AFORESAID MOU. 3) THAT THE RATES IN THE AFORESAID MOU WERE QUOTE D AND OFFERED FOR COMMERCIAL APPROVED LAND TO THE SAID COMPANY. 4) THAT ALL THE COSTS FOR OBTAINING THE APPROVAL S FOR CHANGE IN LAND USE (CLU) AND BUILDING PLANS SANCTIONED FORM THE APPROP RIATE AUTHORITIES WOULD HAVE BEEN PAID AND BORNE BY US. 5) THAT M/S HORIZON BUILDCON PVT. LTD HAD STATED THAT THE RATES OFFERED AS PER THE MOU SEEMS TO BE QUITE HIGH & UNREASONABL E AND FURTHER DISCUSSION CAN BE MADE AFTER DETAILED MARKET STUDIE S AND AS SUCH THE COPY OF DRAFT MOU WAS LEFT WITH THE SAID COMPANY. 6) THAT WE HAD FURTHER APPROACHED THE COMPANY M/S HORIZON BUILDCON PVT. LTD. TO GET THE DEAL BARGAINED WITH THEM BUT T HEY HAD OUT RIGHTLY DENIED AND REJECTED OUR OFFER BECAUSE RATES QUOTED BY US WERE AT HIGHER SIDE IN COMPARISONS TO THE RATES PREVAILING IN AREA AT THAT TIME. 7) THE DEAL AS PER THE SAID DRAFTED MOU COULD NOT BE FINALIZED BETWEEN US AND AS SUCH THE DRAFTED MOU WAS NOT SIGNED BY US AS WELL AS BY ANY ONE ON BEHALF OF SAID COMPANY. 8) THAT SAID DRAFTED MOU IN NOT A VALID& ENFORCEA BLE DOCUMENT AS PER THE LAW. 9) THAT WE HAD NOT RECEIVED ANY MONEY FROM M/S. H ORIZON BUILDCON PVT. LTD ON THE BASIS OF SAID DRAFTED MOU. 1 SOLEMNLY VERIFY THAT THE FACTS STATED ABOVE ARE T RUE AND NOTHING MATERIAL HAS BEEN CONCEALED. DEPONENT VERIFICATOIN ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 11 I SARDARSURJIT SINGH THE ABOVE NAMED DEPONENT, TO H EREBY VERIFY ON OATH THAT THE CONTENTS OF THE AFFIDAVIT ABOVE ARE TRUE T O MY PERSONAL KNOWLEDGE AND NOTHING MATERIAL HAS BEEN CONCEALED O R FALSELY STATED. DEPONENT SIR, FROM THE ABOVE IT BECOMES AMPLY CLEAR THAT THE DRAFT MOU WAS NEVER EXECUTED AND IS NOT A VALID DOCUMENT ENFORCEABLE BY LAW. A COPY OF THE SWORN AFFIDAVIT IS ENCLOSED. REGARDING LAND AT VILL AGE SUTANWIND, 1 WOULD LIKE TO SUBMIT THAT AS EXPLAINED ABOVE 1 DID NOT PURCHASE ANY LAND DURING F.Y. 2008-09 OR IN ANY OTH ER FINANCIAL YEAR NOR I SOLD ANY LAND IN MY INDIVIDUAL CAPACITY TO M/S. HORIZON BUILDCON (P) LT D. HOWEVER, THE DETAILS OF THE LAND SOLD BY ME AS A RE PRESENTATIVE OF FARMERS AS POWER OF ATTORNEY (POA) HOLDERS ON THEIR BEHALF IS GIVEN IN PARA 2 ABOVE AND THE SAME MAY KINDLY BE REFERRED FR OM THERE. 4. FURNISH THE SOURCES OF INVESTMENT MADE IN THE PURCH ASE OF THE SAID LAND AND MODE OF PAYMENT:- AS EXPLAINED ABOVE NO LAND WAS PURCHASED AT SULTANW IND, HENCE NO INVESTMENT WAS REQUIRED. 5. MODE OF PAYMENT RECEIVED BY YOU FROM THE SAID COMPA NY:- AS EXPLAINED ABOVE NOT LAND WAS SOLD BY ME DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2009-10, HENCE NO P AYMENT WAS RECEIVED, BY ME FOR SALE OF SULTANWINDLAND IN MAY I NDIVIDUAL CAPACITY. HOWEVER THE PAYMENTS RECEIVED FROM THEM FOR VARIOUS PURPOSES ARE ENCLOSED AS PER COPY OF ACCOUNT RECEIVED FROM THEM. THE SAID AMOUNT WAS ADVANCED BY ME TO VARIOUS FARMERS FOR THE AGREE MENT TO PURCHASE ON BEHALF OF HBPL. 6. PLEASE EXPLAIN WHETHER ANY SHORT/LONG TERM CAPITAL GAIN HAS BEEN SHOWN BY YOU IN RESPECT OF THESE SALE/PURCHASE MADE :- AS EXPLAINED ABOVE NO LAND WAS SOLD IN MY INDIVIDUA L CAPACITY, HENCE NO SHORT/LONG TERM CAPITAL GAIN WAS EARNED BY ME. 7. GIVE THE DETAILS OF BANK ACCOUNT MAINTAINED BY YOU IN YOUR NAME OR IN THE NAME OF YOUR WIFE AND OTHER FAMILY M EMBERS. FURNISH THE BANK ACCOUNTS STATEMENT OF ALL THE ACCO UNTS MAINTAINED FOR THE PERIOD 01.04.2008 TO 31.03.2009 :- WE ARE HAVING BANK ARRANGEMENTS WITH SBOP, BANK OF INDIA & OBC BANK. (AGRI LIMITS). THE COPIES OF THE STATEMENT/PA SS BOOK OF THESE BANK ACCOUNTS ARE ENCLOSED HERE WITH FOR YOUR KIND CONSI DERATION & RECORDS. THE ASSESSEE FURTHER SUBMITTED THAT WE ARE ENCLOSIN G HEREWITH THE COPY OF THE' SALE DEED' FOR LAND AT VILLAGE SULTANWIND ( PB) BEING SOLD TO OTHER PARTY BY THE SAME FARMERS OR IN DEPENDENT FAR MERS, WHO HAD ALSO SOLD THE LAND TO THE HORIZON BUILDCONPVT LTD. ON CO MPARISON OF PRICES OF BOTH SALES DEEDS (I.E SALES DEED EXECUTED WITH M/S HORIZON BUILDCON PVT. LTD. AND SALES DEEDS EXECUTED WITH OTHER PARTY) YOU R HONOUR WILL APPRECIATE THE PRICES IN THE AREA HAVE NOT INCREASE D SUBSTANTIALLY EVEN AFTER THREE YEARS NOT BEING DOUBLED IN SPITE OF FAC T THAT THERE WAS HUGE BOOM IN REAL ESTATE MARKET DURING THAT PERIOD. THER EFORE, IT IS CLEARLY PROVED & ESTABLISHED ON RECORDS THAT THE LAND WAS S OLD BY THE FARMERS TO M/S HORIZON BUILDCON PVT. LTD. AT THE PRICES REFLEC TED IN THE SALE DEEDS. FROM THE ABOVE SUBMISSION AND JUSTIFICATION IT IS A LSO CRYSTAL CLEAR THAT THE IKRARNAMAS/'AGREEMENT TO SALE ARE FALSE AND FAB RICATED DOCUMENTS ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 12 WHEREIN THE PRICE OF THE LAND @ RS. 2310/- PER SQ. HAVE BEEN SHOWN BY THE ASSESSEE WITH AN INTENTION TO MISLEAD THE M/S H ORIZON BUILDCON PVT. LTD. FOR PUTTING THE PROPOSAL OF SALE OF LAND AT HI GHER PRICES AND EARNED MORE & MORE PROFIT FROM THE DEAL. HOWEVER, THE ASSE SSEE COULD NOT SUCCEED IN HIS TARGET TO MAKE THE DEAL WITH M/S HOR IZON BUILDCON (P) LTD. ON THE BASIS OF THE FALLS AND FABRICATED IKRAR NAMAS/AGREEMENT TO SALE BEING PREPARED BY HIM BECAUSE THE DIRECTOR OF THE SAID COMPANY ARE QUITE INTELLIGENT AND HAVING THE WIDE KNOWLEDGE & H UGE EXPOSURE OF THE REAL ESTATE SECTOR. WE ARE ALSO ENCLOSING HEREWITH THE KHASRA MAP SHOWING THE LOCATION AND RATE SHOWN IN THE FALSE & FABRICATED IKRARNAMA/AGREEMENT. IT IS COMMON KNOWLEDGE THAT WH ERE THE KHASRA ARE UNDIVIDED THE RATES FOR THE SAME KHASRA ARE COM PARABLE AND/OR EQUAL. HOWEVER, IN THE FALSE AND FABRICATED IKRARNA MA/AGREEMENT TO SALE THE RATES HAVE BEEN TAKEN TO LURE THE COMPANY M/S HORIZON BUILDCON PVT. LTD FOR EXAMPLE PART OF THE UNDIVIDED KHASRA NO. 4415 & 4419 ARE AT THE MOST PRIME LOCATION AND RATES IN TH E SAID IKRARNAMA ARE 1100-1200-2100-2900 PER SQRDS, WHEREAS UNDIVIDED KH ASRA NO. 4431 & 4429 WHICH HAVE NO CONNECTIVITY OTHER THAN HELICOPT ER ARE AVAILABLE @ RS. 1900-2100-3000/- PER SQRDS. IT IS EVIDENCE THAT THE IKRARNAMAS HAVE BEEN FABRICATED AND PREPARED BY THE ASSESSEE WITH A VIEW TO MISLEAD THE M/S HORIZON BUILDCON PVT. LTD. WE WOULD LIKE TO STATE AND SUBMIT THAT THE UNSIGNED PHOTOCOPY OF THE SO CALLED MOU DATED. 21.02.2008 WAS NEVER EXECUTED AND ACCEPTED BY M/S HORIZON BUILDCON PVT. LTD. BECAUSE IT DID NOT INCLU DE THE CONDITIONS REGARDING THE RESPONSIBILITY OF OURS TO ARRANGE AND PAY FOR THE CLU CHARGES FROM AGRICULTURE TO GROUP HOUSING. THE CHAR GES FOR CLU FROM AGRICULTURE TO GROUP HOUSING ARE RS. 67.01 LACS PER ACRE AS PER NOTIFICATION NO 17/17/01-5HG2/7639 DATED 19/09/2007 (COPY ENCLOSED). TOTAL COST SHOWN IN THE MOU TOTAL COST 11.03 ACRES AMOUNT / ACRE AMOUNT /SQ YARD RS 2310 PER SQ YARD RS 238 LAKHS + RS 19 LAKHS (STAMP DUTY) = RS. 257 LAKHS RS 21.58 LAKHS APPROX RS 448 CONVERSION CHARGES FOR ONE ACRE FOR GROUP HOUSING NOTIFICATION NO.17/17/01- 5HG2/6682 DATED 17.08.2007 (COPY ENCLOSED) RS 67.01 LAKHS APPROX RS 1384 SERVICE CHAR GES/PROFIT TO BROKER RS.23.21 LAKHS APPROX RS.478 TOTAL COST INCLUDING CLU AND SERVICE CHARGES RS.111.80 LAKHS RS.2310/SQ. YARD THE ABOVE CHART APPROXIMATELY EXPLAINS THE HYPE IN PRICE CALCULATION OFFERED BY THE BROKERS. THE ASSESSEE FURTHER PLACED RELIANCE ON THE FOLLOWI NG JUDGMENTS OF THE VARIOUS HON'BLE COURTS: - I) THE HON 'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF COMMISSIONER OF INCOME TAX VS. BHANWAR LAL MURWATIYA REPORTED IN (2 008) 215 CTR (RAJ) 489; ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 13 II) THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHA NDIGARH BENCH 'B', CHANDIGARHIN THE CASE OF L.T.O. VS. SHRI MOHINDER S INGH REPORTED IN (2008) ITR 118 (ITAT, CM.); III) THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGA RH BENCH 'B', CHANDIGARH IN THE CASE OF L.T.O. VS. SHRI MANJIT SI NGH REPORTED IN (2010) 128 TTJ(CHD)(UO) 82; IV) THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SIVAKAMI CO.PVT. LTD. V. CIT(1973) 88 ITR 311 (MAD); V) THE HON 'BLE HIGH COURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DINESH JAIN HUF REPORTED IN 254 CTR (DEL) 534; VII) THE HON'BLE HIGH COURT OF PUNJAB& HARYANA I N THE CASE OF COMMISSIONER OF INCOME TAX VS. HARPAL SINGH REPORTE D IN (2008) 3 DTR 254; VIII) THE HON 'BLE APEX COURT IN THE CASE OF COMM ISSIONER OF INCOME TAX VS. P. V.KALYANASUNDARAM REPORTED IN (2007) CTR (S C) 97; THE ASSESSEE FURTHER SUBMITTED AND PLACED RELIANCE ON THE FOLLOWING JUDGEMENTS: - A 'SUSPICION HOWEVER GREAT CANNOT TAKE THE PLACE OF EVIDENCE. ' HONORABLE SC IN UMACHARAN 37 ITR 271 APPLIED BY P &HHC IN ANUPAMKAPOOR 299 ITR 179. IN THIS CASE IT WAS HE LD BY HONORABLE SUPREME COURT THAT 'THERE ARE MANY SURMISES AND CON JECTURES, AND THE CONCLUSION IS THE RESULT OF SUSPICION WHICH CANNOT TAKE THE PLACE OF PROOF IN THESE MATTERS. ' B. 'THAT THE ADDITIONS CANNOT BE MADE MERELY ON TH E BASIS OF CONJECTURES AND SURMISES. ' K.R VARGHESE V. ITO 131 ITR 597 (SC) C. 'THAT THE BURDEN TO PROVE APPARENT IS NOT REAL ON THE REVENUE.' SC IN 125 ITR 713-KISHANCHAND CHELLARAM; IT WAS HEL D THE AMOUNT CANNOT BE ASSESSED AS UNDISCLOSED INCOME OF ASSESEE IN THE ABSENCE OF POSITIVE MATERIAL BROUGHT BY REVENUE TO PROVE THAT THE AMOUNT IN FACT BELONGED TO ASSESSEE AS THE BURDEN LAY ON THE REVEN UE. SC IN 26 ITR 775 DHAKESHARI COTTON MILLS; IN COMMISSIONER OF INCOME TAX VS. DAULAT RAM RAWATM ULL 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC) IT WAS H ELD 'WHEN A CONCLUSION HAS BEEN REACHED ON AN APPRECIATION OF A NUMBER OF FACTS, WHETHER THAT IS SOUND OR NOT MUST BE DETERMINED, NO T BY CONSIDERING THE WEIGHT TO BE ATTACHED TO EACH SINGLE FACT IN ISOLAT ION, BUT BY ASSESSING THE CUMULATIVE EFFECT OF ALL THE FACTS IN THEIR SET TING AS A WHOLE. D. 'THAT FILE CONTAINING LOOSE SHEETS OF PAPERS AR E NOT BOOKS AND HENCE ENTRIES THEREIN ARE NOT ADMISSIBLE U/S 34 OF THE EVIDENCE ACT, 1872. V.C. SHUKLAVS STATE THROUGH C.B.I 1980 AIR 962, 198 0 SCR (2) 380 IT IS RESPECTFULLY SUBMITTED THAT IN ADDITION TO TH E ABOVE JUDGMENTS A RECENT JUDGMENT OF HONORABLE GUJRAT HIGH COURT IN T HE CASE OF COMMISSIONER OF INCOME-TAX V. FAIRDEAL TEXTILE PARK (P.) LTD IS DIRECTLY APPLICABLE TO OUR CASE AS THE FACTS ARE SIMILAR. IT WAS HELD THAT 'IN ABSENCE OF ANY OTHER EVIDENCE OF ON-MONEY PAYMENT, AS ALSO IN ABSENCE OF ANY, SUGGESTION OF THE MARKET VALUE OF THE LAND PURCHASED BY THE RESPONDENTS BEING FAR MORE THAN WHAT HAD BEEN REFLE CTED IN THE SALE DEED, THE TRIBUNAL DID NOT ENDORSE THE VIEW OF BOTH THE ASSESSING OFFICER AND THAT OF CIT(APPEALS). ANOTHER ASPECT THAT HAD W EIGHED WITH THE TRIBUNAL WAS THE FACT THAT THE REGISTERED DOCUMENTS HAD BEEN EXECUTED ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 14 AT 'JANTRI' VALUE. THERE WAS NO REFERENCE TO THE VA LUATION OFFICER TO POINT OUT THAT THE VALUE OF THE LAND WAS BELOW THE MARKET PRICE. ' 2.2 THE EXPLANATION OFFERED BY THE ASSESSEE HAS BEE N CONSIDERED SYMPATHETICALLY BUT THE SAME FOUND DEVOID OF ANY ME RIT. THE PLEA OF THE ASSESSEE IS NOT ACCEPTABLE IN VIEW OF THE FOLLOWING FACTS OF THE CASE :- I) AS PER INFORMATION AVAILABLE WITH THIS OFFICE, A T THE TIME OF SEARCH OPERATION CONDUCTED IN THE CASE OF M/S HORIZON BUIL DCON(P) LTD. ON 7.4.2011, A MEMORANDUM OF UNDERSTANDING (MOU) DATED 22/01/2008 FOUND, WHICH WAS EXECUTED BETWEEN SH. SURJIT SINGH AND BALJINDER SINGH AS 1ST PARTY AND M/S HORIZON BUILDCON (P) LTD. AS 2ND PARTY. AS PER THIS MOU 1ST PARTY IS THE OWNER OF LAND MEASURING 50000 SQ. YRDS. OF LAND AT VILLAGE SULTANWIND DISTT. AMRITSAR AND HAS UNDERTAK EN TO TRANSFER THE SAME TO THE 2ND PARTY @ RS. 2310/- PER SQ. YRDS. FU RTHER, SEVERAL OTHER DOCUMENTS I.E. IKRARNAMAS/AGREEMENT TO SELL EXECUTE D WITH VARIOUS PERSONS/FARMERS, ARE IN THE POSSESSION OF DEPARTMEN T WHICH CLEARLY INDICATES THAT SH. SURJIT SINGH AND BALJINDER SINGH HAD PURCHASED LAND FROM VARIOUS PERSONS AT VILLAGE SULTANWIND DISTT. A MRITSAR ON AGREEMENT TO SELL OR POWER OF ATTORNEY IN THEIR NAM E OR THEIR WIVES AND LATER ON TRANSFERRED THE SAME LAND TO MLS HORIZON B UILDCON (P) LTD. AS POA OF THE ORIGINAL LAND OWNERS. II) FURTHER, SEVERAL AGREEMENTS (LKRARNAMA) WERE WE RE EXECUTED BETWEEN THE ASSESSEE SH. SURJIT SINGH & SH. BALJIND ER SINGH AND THE BELOW MENTIONED PERSONS A) DILBHAG SINGH & HIRA SINGH R/O VILLAGE SULTANWIN D AMRITSAR. B) FAKIR SINGH S/O SH. TARLOK SINGH R/O VILLAGE SUL TANWIND AMRITSAR. C) SRNT. HARBANS KAUR WLO SH. SUBHEG SINGH/O VILLAG E SULTANWIND AMRITSAR. D) SH. SATPAL SWARN, AMARJIT PRITHPAL, GURMEET, KEW AL SINGH S/O SH. BAHADUR SINGH R/OVILLAGE SULTANWIND AMRITSAR E) SH. BALBIR, JASBIR & RANJIT SINGH S/O SH. GURMEJ SINGH R/O BASANT NAGAR SULTANWIND ROAD, AMRITSAR. F) SH. PARKASH SINGH & BALJIT SINGH S/O SH. JOGINDE R SINGH AND SH. GURPARTAP SINGH R/O VILLAGE SULTANWIND AMRITSAR. G) SMT. MANJIT KAUR WLO SH. GURMAIL SINGH R/O VILLA GE SULTANWIND AMRITSAR. AS PER AGREEMENTS (LKRARNAMA), THE ASSESSEE PURCHAS ED LAND FROM THESE ABOVE SAID PERSONS DURING THE YEAR UNDER CONSIDERAT ION ON VARIOUS RATES RANGING FROM RS. 1100/- PER SQYRDS TO RS. 2900/- PE R SQYRDS. THESE AGREEMENTS WERE SIGNED BY BOTH THE PARTIES I.E. SEL LER AND PURCHASER. THE KHASRA NUMBERS MENTIONED ON THESE AGREEMENTS WE RE SAME AS MENTIONED IN THE MOU DATED 22.01.2008. WHEN THE ASS ESSEE CONFRONTED WITH THESE AGREEMENTS, HE SUBMITTED THAT THESE WERE IMAGINARY BIYANAL AGREEMENTS TO SELL LAND IN OUR NAME FROM DIFFERENT LAND OWNERS TO CONVINCE THE COMPANY ABOUT OUR CAPACITY TO CONSOLID ATE THE LAND AND IN ORDER TO JUSTIFY HIGH PRICES OF THE LAND. THIS PLEA OF THE ASSESSEE IS TOTALLY UNDEPENDABLE AS THE BIYANA/AGREEMENT TO SELL/IKRARN AMAS WERE WRITTEN IN FULL LETTER AND SPIRIT. HAD THE IKRARNAM A/AGREEMENT TO SELL ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 15 PSEUDO/FABRICATED, THE NAME OF THE OWNERS OF THE LA ND WOULD NOT HAVE BEEN HAPPENED TO BE SAME. SO IT IS QUITE APPARENT T HAT THE FKRARNAMAS/AGREEMENTS TO SELL ARE ACTUAL IN THE NAM E OF THE OWNERS OF LAND AND NOT IMAGINARY. NO ANY LAND OWNER CAN PREPA RE A FAKE AGREEMENT TO SELL IBIYANA ON A STAMP PAPER TO CONVI NCE ANY BUILDER FOR HIGH PRICES. THE CONTENTION TAKEN BY THE ASSESSEE I S AN AFTERTHOUGHT. ACTUALLY, IT IS A COMMON PRACTICE IN THE FIELD OF R EAL ESTATE THAT THE DEALER/BROKER PURCHASED THE LAND FROM THE LAND OWNE R ON AGREEMENT TO SELL/IKRARNAMA AFTER MAKING FULL PAYMENT AND BECAUS E THE REGISTRATION CHARGES HAVE TO BE BORNE BY THE PURCHASER, THEY OBT AINED A POWER OF ATTORNEY FROM THE SELLER TO SAVE THE REGISTRATION C HARGES, AND AFTER THAT FURTHER SOLD THE LAND TO THIRD PERSON ON POWER OF A TTORNEY AND SAVED THE REGISTRATION EXPENSES IN ADDITION TO THEIR REGULAR PROFIT. THE SAME PRACTICE HAS BEEN ADOPTED IN THE INSTANT CASE BY TH E ASSESSEE. THE CONTENTION OF THE ASSESSEE THAT THESE AGREEMENTS TO SELL ARE IMAGINARY HAS AGAIN FEEBLE FROM THE CONTENTS OF THESE AGREEME NTS TO SELL. IT IS CLEARLY MENTIONED IN THESE AGREEMENTS TO SELL 'IF T HE PURCHASER PULL BACK, THE ADVANCE GIVEN BY HIM WILL BE FORFEITED AN D IF THE SELLER WILL PULL BACK, HE HAS TO PAY DOUBLE AMOUNT OF ADVA NCE AND THE PURCHASER HAS FULL RIGHT TO GET REGISTRY THROUGH CO URT. I BEING THE SELLERS WILL BE RESPONSIBLE FOR THE FAULT IN THE OW NERSHIP AND THE PURCHASER WILL HAVE THE FULLEST RIGHTS TO MAKE PLOT S ON THE LAND, GET THE PLANS DRAWN ON IT, GET THE ROADS BUILT-UP ON IT AND GET THE AGREEMENTS WRITTEN FURTHER OR GET THE FOUNDATIONS OF THE PLOTS COMPLETED UP AND WHEREVER REQUIRED UP THE SIGNATURES THEREUPON.' THE AGREEMENTS TO SELL ARE WRITTEN IN PUNJABI, THE SCANNED COPY OF ONE OF SUCH AGREEMENT TO SELL WHICH HAS BEEN EXECUTED BETWEEN SMT. HARBANS KAUR A ND SH. SURJIT SINGH & OTHERS IS BEING REPRODUCED HEREBELOW.- AGREEMENT TO SELL INCORPORATED BY THE AO IN PAGES 9 & 10 WRITTEN IN PUNJABI LANGUAGE ARE NOT READABLE. THE AGREEMENT TO SELL OR IKRARNAMAS WERE WRITTEN I N PUNJABI. THE SUBJECT OF PAGE NO.2 OF THIS AGREEMENT TO SELL, WHI CH HAVE BEEN UNDERLINED IN THE AGREEMENT TO SELL IS BEING TRANSL ATED INTO ENGLISH BELOW:- 'OUT OF TOTAL SALE CONSIDERATION, I RECEIVED A SUM OF RS. 24,00,000/- AS ADVANCE IN THE PRESENCE OF WITNESSES AT THE TIME WRITING OF THIS AGREEMENT TO SELL AND THE BALANCE AMOUNT WILL BE TA KEN AT THE TIME OF REGISTRY AND RIGHT OF LAND (KABZA) HAS BEEN GIVE N TO THE PURCHASERS AT THE TIME OF WRITING TO THIS INSTRUMEN T BUT THE OWNERSHIP WILL BE GIVEN AT THE TIME OF REGISTRY. TH E BALANCE AMOUNT WILL BE TAKER AT THE TIME OF FINAL REGISTRY AND REG ISTRY WILL BE MADE IN THE NAME OF PURCHASER OR IN THE NAME OF ANY PERSON WHOM THE PURCHASERS WILL WANT. IF THE SELLER WILL PULL BACK, SHE WILL BE RESPONSIBLE TO RETURN THE ADVANCE ALONGWITH PENALTY EQUAL TO THE AMOUNT OF ADVANCE AND THEN ALSO THE PURCHASER HAS R IGHT TO GET REGISTRY OF LAND THROUGH COURT AS PER LAW AND WHICH EVER EXPENSES WOULD BE INCURRED, THAT HAS BEEN DEDUCTED FROM THE BALANCE AMOUNT OF LAND TO BE PAID TO THE SELLER. AND IF THE PURCHA SER WILL RENEGE, THE ADVANCE GIVEN BY HIM WILL BE FORFEITED. IT HAS ALSO BEEN CLEARED THAT ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 16 ON THE AFORESAID LAND, THE PURCHASER HAS FULL RIGHT TO MAKE PLOT ON THE LAND OR MAKE ROADS AND WRITTEN FURTHER IKRARNAM A AND ON SUCH ACTIVITY OF PURCHASER, THE SELLER WILL HAVE NO OBJE CTION.' FROM THE ABOVE, IT IS AMPLY CLEAR THAT THE AGREEMEN T TO SELL/IKRARNAMAS WERE WRITTEN PROPERLY AFTER TAKING INTO CONSIDERATI ON ALL LEGAL ASPECTS. ALL RIGHT OF THE LAND HAS BEEN TRANSFERRED TO PURCH ASER THROUGH THIS AGREEMENT TO SELL. EVEN IT HAS ALSO BEEN WRITTEN TH AT IF THE SELLER PULL BACK FROM THIS AGREEMENT TO SELL, SHE HAS TO RETURN THE ADVANCED AMOUNT ALONGWITH THE EQUAL PENALTY AND THEN ALSO THE PURCH ASER HAS RIGHT TO GET REGISTRY OF LAND THROUGH COURT. THE AGREEMENT TO SE LL HAS PROPERLY BEEN SIGNED BY BOTH THE PARTIES ALONGWITH WITNESSES. FRO M THE WORDING OF BIYANA/AGREEMENT TO SELL, IT IS PRIMA-FACIE CLEAR T HAT THE AGREEMENT TO SELL CANNOT BE SAID AN IMAGINARY/FAKE DOCUMENTS, AS CLAIMED BY THE ASSESSEE IN HIS REPLY, BUT IT IS A LEGAL DOCUMENTS IN WHICH IT IS CLEARLY WRITTEN THAT IF THE SELLER PULL BACK FROM THE CONTE NTS WRITTEN IN THIS AGREEMENT TO SELL, THE PURCHASER HAS FULL RIGHT TO GET REGISTRY OF LAND THROUGH COURT. WHO WILL GIVE SUCH TYPE AGREEMENT TO SELL TO A PERSON WHO IS NOT KNOWN TO HIM OR RELATIVE AND TRANSFERRED ALL THE RIGHTS OF HIS LAND TO SUCH UNKNOWN PERSON. FROM THE PLAIN READING OF THESE AGREEMENTS TO SELL, IT HAS BEEN CLEAR THAT THESE DO CUMENTS ARE LEGAL DOCUMENT AND NOT AN IMAGINARY OR FAKE DOCUMENTS AS CLAIMED BY THE ASSESSEE AND ALSO CLEAR THAT THE ASSESSEE PURCHASED LAND FROM VARIOUS FARMERS/PERSONS ON THESE AGREEMENT TO SELL OR POWER OF ATTORNEY AND LATER ON TRANSFERRED TO M/S HORIZON BUILCON (P) LTD . AS POA. MOREOVER, HOW CAN ANYBODY USE HIS RIGHT OVER THE LAND OWNED B Y ONE WITHOUT ANY CONSIDERATION. III) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS REQUIRED TO PRODUCE THE FARMERS WHOM HE HAS PURCHAS ED LAND IN QUESTION ON AGREEMENT TO SELL. IN RESPONSE, ON 22/3 /2016, THE ASSESSEE PRODUCED ONE FARMER SH. RAJINDER KUMAR S/O SH. SOHA N LAL STATEMENT OF SH. RAJINDER KUMAR IS RECORDED, WHICH IS REPRODUCED AS UNDER:- Q. I WHAT DO YOU DO? ANS. I AM DOING AGRICULTURAL ACTIVITIES BY TAKING LAND ON LEASE. Q.2 ARE YOU FILING YOUR ITR ANS. NO Q.3 HOW MUCH' AGRICULTURAL LAND BEING CULTIVATED B Y YOU BY TAKING ON LEASE. ANS. I AM CULTIVATING TWO ACRES OF LAND BY TAKING ON LEASE @ RS. 35000/- PER ACRES. Q4 DO YOU HAVE YOUR OWN LAND OR IT WAS IN YOU POSS ESSION NOW OR EARLIER. ANS. AT PRESENT I HAVE NO MY OWN AGRICULTURAL LAND . EARLIER I WAS HAVING AGRICULTURAL LAND MEASURING I KANAL 2 MARLAS , WHICH HAVE BEEN SOLD BY ME. Q.5. TO WHOM YOU HAVE SOLD YOUR AGRICULTURAL LAND M EAS IN KANAL 2 MARLAS ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 17 ANS. I SOLD MY AGRCULTRUALLAND THROUGH SURJIT SINGH . WHOM HE (SURJIT SINGH) SOLD, I DO KNOW. I HAVE TAKEN ALL SALE CONSI DERATION FROM SH. SURJIT SINGH. Q.6 BY WHICH MODE YOU HAVE RECEIVED PAYMENT FROM SH .SURJIT SINGH AGAINST SALE OF LAND. ANS. I TOOK PAYMENT IN CASH AND TOTAL PAYMENT AGAIN ST SALE OF LAND WAS RECEIVED BY ME AMOUNTING TO RS.2,48,000/-. Q.7. HAVE YOU ENTERED INTO ANY AGREEMENT FOR THE SA ID PAYMENT RECEIVED BY YOU. ANS. NO, NO ANY WRITTEN AGREEMENT EXECUTED BUT I H AD GIVEN POWER OF ATTORNEY WITHOUT ANY MONEY CONSIDERATION. Q.8 WHEN YOU RECEIVED THE PAYMENT ANS. I RECEIVED THE PAYMENT AFTER REGISTRY OF MY SA ID LAND. Q.9 FOR HOW LONG DO YOU KNOW SH. SURJIT SINGH ANS. SURJIT SINGH WAS NOT KNOWN TO ME EARLIER. Q.10 HOW DID YOU COME IN CONTACT WITH SH. SURJIT SI NGH. ANS. I MET SURJIT SINGH THROUGH MY FRIEND. Q.11 TELL ME NAME AND ADDRESS OF YOUR FRIEND THROUG H WHICH YOU MET SH. SURJIT SINGH. ANS. THE NAME OF MY FRIEND IS NIRMAL SINGH OF SULTA NWIND. BUT HIS FATHER NAME AND HOUSE ADDRESS IS NOT KNOWN TO ME. Q.12 HAVE YOU TAKEN FULL PAYMENT BEFORE GIVING POWE R OF ATTORNEY TO SH.SURJIT SINGH ANS. NO I DID NOT TAKE ANY PAYMENT BEFORE GIVING PO WER OF ATTORNEY AND WITHOUT ANY AMOUNT OR CONSIDERATION I HAVE GIVE N POWER OF ATTORNEY TO SH. SURJIT SINGH. Q.13 AT WHAT RATE YOU HAVE SOLD YOUR LAND. ANS. I DO NOT KNOW THE RATE AND NO RATE WAS SETTLED . Q.14 I AM SHOWING YOU AN IKRARNAMA/AGREEMENT TO SEL L, WHICH HAVE BEEN EXECUTED BETWEEN YOU AND SH. SURJIT SINGH AS W ELL SH.BALWINDER SINGH, ACCORDING TO WHICH YOU HAVE REC EIVED AN AMOUNT OF RS.2,SO,000I- AS ADVANCE AGAINST SALE OF LAND MEASURING I KANAL 2 MARLAS. WHAT DO YOU SAY ABOUT T HIS. ANS. THIS IKRARNAMA DOES NOT BELONG TO ME AND I DID NOT PUT ANY SIGNATURE ON IT. Q.15 WHAT IS YOUR QUALIFICATION AND HOW MANY LANGUA GE YOU CAN READ, WRITE AND UNDERSTAND. ANS. I AM ILLITERATE BUT I CAN SIGN IN ONLY PUNJABI . I AM TOTALLY UNAWARE OF ENGLISH LANGUAGE, I CANNOT READ WRITE AN D UNDERSTAND ENGLISH LANGUAGE. SH. RAJINDER KUMAR SLO SH. SOHAN LAL HAS ALSO FILED AN AFFIDAVIT IN WHICH HE HAS GIVEN IN WRITING THAT HE HAS SOLD HIS LAND A DMEASURING I K2M TO MLS HORIZON BUILDCON(P) LTD. VIDE SALE DEED DATED 1 1/12/2009. NOW COME TO THE CONTENTS OF STATEMENT GIVEN BY SH. RAJINDER KUMAR AND CONTENTS OF AFFIDAVIT GIVEN BY HIM. IN REPLY TO QUE STION NO.S OF HIS STATEMENT, HE STATED THAT I SOLD MY LAND THROUGH SU RJITSINGH AND WHOM HE (SURJIT SINGH) SOLD I DO NOT KNOW. ON THE OTHER HAND, IN AFFIDAVIT AT POINT NO.1 HE SUBMITTED THAT HE (RAJ INDER SINGH) S OLD HIS LAND ADMEASURING I K2M TO MLS HORIZON BUILDCON(P) LTD. VIDE SALE DEED DATED 11/1212009. THE AFFIDAVIT WAS WRITTEN ON 21/3 /2016 AND ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 18 STATEMENT WAS RECORDED ON 22/3/2016. ON 21/3/2016 I T WAS IN HIS KNOWLEDGE WHOM HE SOLD HIS LAND BUT ON 22/3/2016 HE FORGOTTEN. SECONDLY, IN REPLY TO QUESTION NO, 15, HE STATED TH AT I CAN ONLY PUT SIGN IN PUNJAB AND I AM TOTALLY UNAWARE ABOUT ENGLISH LANGU AGE, I CANNOT READ, WRITE AND UNDERSTAND ENGLISH. EVEN BEFORE RECORDED HIS STATEMENT, HE WAS ASKED IN WHICH LANGUAGE YOU WANT TO RECORD YOUR STATEMENT AND HE STATED THAT I CAN UNDERSTAND ONLY PUNJABI AND MY ST ATEMENT SHOULD BE RECORDED IN PUNJABI. THE PERSON, WHO KNOWS ONLY PUN JABI LANGUAGE AND WHO REFUSED TO RECORD HIS STATEMENT IN ENGLISH OR E VEN IN HINDI LANGUAGE, GIVEN AN AFFIDAVIT WHICH HAS TOTALLY BEEN WRITTEN IN ENGLISH. FROM THIS, IT IS PROVED THAT HE DID KNOW ANYTHING A BOUT THE CONTENTS OF AFFIDAVIT, IN WHICH HE CLAIMED THAT LAND HAS BEEN S OLD TO MLS HORIZON BUILDCON (P) LTD. ACTUALLY HE SOLD HIS LAND TO S. S URJIT SINGH ON AGREEMENT TO SELL AFTER TAKING FULL PAYMENT AND GIV EN HIM POWER OF ATTORNEY, FURTHER HE IS TOTALLY UNAWARE WHOM S. SUR JIT SINGN SOLD HIS LAND BECAUSE HE HAS ALREADY SOLD HIS LAND TO SURJIT SINGH ON AGREEMENT TO SELL AND TOOK ENTIRE CONSIDERATION. SECOND, IN REPLY TO QUESTION NO. I, HE (RAJ INDER K UMAR) STATED THAT I AM DOING AGRICULTURAL ACTIVITIES BY TAKING LAND ON LEA SE AND IN REPLY TO QUESTION NOA, STATED THAT AT PRESENT I HAVE NO MY O WN AGRICULTURAL LAND, EARLIER I WAS HAVING AGRICULTURAL LAND ADMEASURING I KANAL 2MARLAS, WHICH I HAVE SOLD. MEANS THAT THE ONLY MEANS FOR LI VELIHOOD OF SH. RAJINDER KUMAR IS AGRICULTURAL LAND. HE WAS EARLIER OWNED ONLY AGRICULTURAL LAND MEASURING I KANAL 2 MARLAS, WHICH WAS THE ONLY WHEREWITHAL OF HIS BREAD AND BUTTER. THE SAID LAND WAS SOLD BY HIM, AS STATED IN REPLY TO QUESTION NO. 5 THAT HE HAS SOLD HIS LAND THROUGH SH. SURJIT SINGH ON POWER OF ATTORNEY, (AS PER HIS STAT EMENT AND AFFIDAVIT). FURTHER IN REPLY TO QUESTION NO. 12, HE (RAJINDER K UMAR) STATED I DID NOT TAKE ANY PAYMENT FROM SH. SURJIT SINGH BEFORE GIVIN G POWER OF ATTORNEY, MEANS THAT HE HAS GIVEN POWER OF ATTORNEY OF HIS ON LY LAND, WHICH HE WAS OWNED, WITHOUT ANY CONSIDERATION. IN QUESTION N O. 9, WHEN ASKED, HOW LONG DO YOU KNOW SH. SURJIT SINGH, HE (RAJINDER SINGH) REPLIED THAT SH. SURJIT SINGH WAS NOT KNOWN TO ME EARLIER. MEANS BEFORE GIVING POWER OF ATTORNEY THAT ALSO WITHOUT ANY CONSIDERATION, HE DID NOT KNOW SH. SURJIT SINGH. IN REPLY TO QUESTION NO. 10, HE STATE D THAT I MET SURJIT SINGH THROUGH MY FRIEND AND WHEN ASKED VIDE QUESTION NO. 11, TO TELL THE NAME AND ADDRESS OF YOUR FRIEND WHO MET YOU SH. SURJIT S INGH, HE (RAJINDER SINGH) REPLIED THAT MY FRIENDS NAME IS NIRMAL SINGH WHO BELONG TO SULTANWIND BUT HIS FATHER NAME AND RESIDENTIAL ADDR ESS, I DO NOT KNOW. FROM THE ABOVE, IT IS EMERGED OUT THAT SH. RAJINDER KUMAR'S MEANS OF LIVELIHOOD IS AGRICULTURAL LAND AND HE WAS HAVING O NLY A PIECE OF I KANAL 2MARLAS OF AGRICULTURAL LAND, WHICH HE HAS SOLD, AS STATED BY HIM, THROUGH SH. SURJIT SINGH ON POWER OF ATTORNEY AND A T THE TIME OF GIVING POWER OF ATTORNEY HE HAS NOT MADE ANY CONSIDERATION OR TAKEN ANY AMOUNT, BUT HE DID NOT KNOW SURJIT SINGH EARLIER I. E. BEFORE GIVEN POWER OF ATTORNEY. WHO GOT MET HIM WITH SH. SURJIT SINGH I.E. HIS FRIEND NAMELY NIRMAL SINGH OF SULTANWIND, HE EVEN DID NOT KNOW TH E ADDRESS OR EVEN THE FATHER NAME OF HIS FRIEND, BUT ON THE INSTANCE OF HIS FRIEND AND THE ASSESSEE SH.SURJIT SINGH HE HAS GIVEN POWER OF ATTO RNEY OF HIS ONLY LAND WHICH WAS THE ONLY WHEREWITHAL OF HIS LIVELIHOOD AN D TRANSFERRED ALL ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 19 RIGHTS OF HIS LAND TO SH. SURJIT SINGH THAT ALSO WI THOUT ANY CONSIDERATION. IS IT POSSIBLE - NO, NOT AT ALL. ACTUALLY, SH. SURJ IT SINGH PURCHASED HIS LAND ADMEASURING I KANAL 2 MARLAS ON AGREEMENT TO SELL A FTER MAKING FULL PAYMENT AND THEN PROCURED POWER OF ATTORNEY OF HIS LAND FROM SH. RAJINDER KUMAR. OTHERWISE THEN, WHO WILL GIVE POWER OF ATTORNEY TO A UNKNOWN PERSON, WHOM HE DO NOT KNOW BEFORE GIVING P OWER OF ATTONEY AND TRANSFERRED ALL RIGHTS OF HIS ONLY LAND, WHICH IS THE ONLY MEANS OF HIS LIVELIHOOD, EVEN THE RIGHT HAS BEEN GIVEN THROUGH T HIS AGREEMENT TO SELL THAT IF THE SELLER PULL BACK, THE PURCHASER HAS RIG HT TO GET REGISTRY OF LAND THROUGH COURT. THE INSTRUMENT WRITTEN IN SUCH PROPE R AND LEGAL LANGUAGE CAN NEVER BE SAID AN IMAGINARY OR FAKE INS TRUMENT. THIRD, WHEN AS PER QUESTION NO. 13, HE WAS ASKED TO TELL THE RATE OF LAND AT WHICH HE SOLD HIS LAND. SH. RAJINDER KUMAR REPLI ED, HE DO NOT KNOW ABOUT RATE AND RATE WAS NOT SETTLED. THE REPLY AGAI N RAISED QUESTION THAT HOW IT IS POSSIBLE THAT A PERSON IS BEING SOLD HIS PROPERTY AND DO NOT KNOW AT WHICH RATE. IN HUMAN PROBABILITY IT IS NOT POSSIBLE. WHEN ANYONE MAKE ANY KIND OF TRANSACTION, FIRST HE SETTL E RATE OF THE SUBJECT, BUT IN THIS CASE, SELLER HAS NO KNOWLEDGE ABOUT RAT E AND IN HIS WORDING NO RATE WAS SETTLED, WHICH IS NOT BELIEVABLE IN HUM AN PROBABILITY THAT HOW A TRANSACTION GET MATURE WITHOUT FINALIZING THE RATE. FORTH, VIDE QUESTION NO.14, SH. RAJINDER KUMAR WAS CONFRONTED WITH THE AGREEMENT TO SELL DATED 15/3/2008 EXECUTED BETWEEN SH. RAJINDER KUMAR AND SH. SURJI SINGH AS WELL SH. BALWINDER SIN GH. BUT IN REPLY HE OVERTLY STATED THAT THIS AGREEMENT TO SELL DOES NOT BELONG TO HIM AND THE SIGNATURE PUT UP ON IT, IS NOT OF HIM. THIS IS AGAI N THE PART OF THIS CONCOCTED STORY. THE SIGNATURE OF THE AGREEMENT OF SELL IS OF THE SAME SIGNATURE PUT UP ON THE ABOVE AFFIDAVIT. THE SCANNE D COPIES OF AFFIDAVIT AND AGREEMENT TO SELL ALSO PASTE HEREBELOW:- AFFIDAVIT AND AGREEMENT TO SELL INCORPORATED BY TH E AO IN THE ASSESSMENT ORDER AT PAGE 14 IS NOT READABLE. FROM THIS IT IS CLEAR THAT THE SIGNATURE MARKED ON AFFIDAVIT AND AGREEMENT TO SELL ARE OF THE SAME PERSON. BUT SH. R AJINDER KUMAR CLEARLY REFUSED THAT THIS AGREEMENT TO SELL DOES NO T BELONG TO HIM. FOR WHAT REASON, BEST KNOWN BY SH. RAJINDER KUMAR. IN O THER WORDS, IF IT IS ACCEPTED THAT THIS AGREEMENT TO SELL DOES NOT BELON G TO SH. RAJINDER KUMAR. THE ASSESSEE IN HIS REPLY IN POINT NO. 3 SUB MITTED THAT 'WE ALSO PREPARED SOME IMAGINARY BIYANA/AGREEMENT TO SELL IN OUR NAMES FROM DIFFERENT LAND OWNERS TO CONVINCE THE COMPANY'. THE ASSESSEE HIMSELF ADMITTED THAT THEY HAD PREPARED IMAGINARY BIYANA/AG REEMENTS TO SELL. BUT SH. RAJINDER KUMAR THE ONE OF THE OWNER OF LAND IN QUESTION, REFUSED TO PREPARE ANY SUCH DOCUMENTS, WHICH AGAIN FEEBLE T HE CLAIM OF THE ASSESSEE THAT THE AFFIDAVIT ARE IMAGINARY AND PROVE D THAT THE ASSESSEE HAS PURCHASED THE LAND IN QUESTION FROM THE FARMERS ON AGREEMENT TO SELL OR POWER OF ATTORNEY AFTER MAKING FULL PAYMENT AND THEN TRANSFERRED THE SAME LAND TO M/S HORIZON BUILDCON(P ) LTD. AS POA. THE ASSSESSEE'S AUTHORISED REPRESENTATIVE FURTHER A SKED TO PRODUCE THE REMAINING PERSONS FOR THEIR EXAMINATION. HE STATED THAT THE REMAINING ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 20 PERSONS WILL BE PRODUCED ON 23/3/2016. ON 23/3/2016 , THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SH. DALJEET SINGH MA RWAHA CA ATTENDED AND FILED A LETTER WHICH THE REPRODUCED BELOW:- 'IT IS SUBMITTED THAT WE HAVE TRIED TO CONTACT THE FARMERS AS PER YOUR LET AND HAVE ALREADY SUBMITTED AFFIDAVITS OF T HE :- MR. PARKASH SINGH SLO SH.JOGINDER SINGH MR. BALJIT SINGH SLO SH. JOGINDER SINGH MR. GURPREET SINGH SLO SH.SHAMSHER SINGH MR. RAJINDER SINGH SLO SH. SOHAN LAL MRS. RAJWINDER KAUR WLO SH. BALJIDER SINGH WE HAVE ALREADY DONE THE STATEMENT OF MR. RAJINDER KUMAR, THE OTHER PERSONS WE ARE CONTACTING, ARE AWAY TO ANANDP UR SAHIB AND SHELL BE AVAILABLE AFTER 24/312016 I.E.HOLI. SMT. HARBANS KAUR IS AN OLD AGED LADY OF 85 YEARS, AS SUCH SHE CANNOT COME TO OUR OFFICE. AFTER LOCAL ENQUIRIES, I T HAS COME TO OUR NOTICE THAT SH.BALBIR SINGH HAS DIED AND OTHER TWO BROTHERS HAVE MOVED TO OTHER PLACES. HOWEVER, WE SHALL BE STILL T RUING OUR LEVEL BEST TO CONTACT SOME MORE FARMERS AND BRING FOR THE PHYSICAL ATTENDANCE.' ON THE REQUEST OF COUNSEL OF THE ASSESSEE, THE CASE ADJOURNED TO 28/02/2016 AND IT HAS BEEN CLEARED VIDE ORDER SHEET ENTRY DATED 23/3/2016 THAT SINCE THE ASSESSMENT IN THIS CASE IS BARRED BY TIME ON 31/3/2016, THIS IS THE FINAL OPPORTUNITY AND NO FUR THER ADJOURNMENT WILL BE GRANTED AND IN CASE OF NON ATTENDANCE AND NON-FI LING OF REPLY AND NON-PRODUCING OF THE PERSONS THE AMOUNT OF RS.10,92 ,76,250/- INVESTED IN PURCHASE OF LAND FROM VARIOUS PERSONS WILL BE AD DED IN YOUR TAXABLE INCOME TREATING THE SAME YOUR INCOME FROM UNDISCLOS ED SOURCES. ON 28/3/2016, SH. DALJIT MARWAHA CA ATTENDED ALONGW ITH SH.PARDEEP GANDOTRA CA AND FILED CERTAIN DOCUMENT REGARDING PA YMENTS MADE BY M/S HORIZON BUILDCON (P) LTD. TO VARIOUS PERSONS, M AP OF LAND SOLD BY SH. SURJIT SINGH TO M/S HORIZON BUILDCOM(P) LTD. AN D COPY OF REMAND REPORT SENT BY DCIT(CC), JAMMU TO CIT(A)(C), LUDHIA NA. ON GOING THROUGH THE DOCUMENTS FILED, THE SAME DOES NOT FIND HAVING ANY MERIT IN ANY WAY. HOWEVER, NO ANY PERSON/FARMERS WAS PRODUCED ON THE 28/3/2016 FOR EXAMINATION BY THE ASSESSEE. AFTER ENJOYING SUFFICI ENT OPPORTUNITY AND TIME, THE ASSESSEE FAILED TO PRODUCE ANY OF THE PER SON/FARMER EXCEPT SH. RAJINDER KUMAR WHOSE STATEMENT WAS RECORDED ON 22/3 /2016 . NON-PRODUCING OF THE PERSONS FOR CROSS VERIFICATION ALSO CLEARLY ESTABLISHED THAT THE ASSESSEE PURCHASED THE LAND FR OM THESE PERSONS ON AGREEMENT TO SELL/IKRARNAMA AND NOW REFRAINED THEM FROM PERSONAL EXAMINATION ON ONE PRETEXT OR ANOTHER. HOWEVER, INS TEAD OF PRODUCING THE PERSONS/FARMERS, THE ASSESSEE FILED AFFIDAVIT I N RESPECT OF SOME OF THE FARMERS/PERSONS, WHEREIN THEY HAVE CLAIMED THAT THE Y HAVE SOLD AGRICULTURAL LAND THROUGH SH. SURJIT SINGH TO M/S H ORIZON BUILDCOM(P) LTD. THE ASSESSEE FAILED TO PRODUCE THE PERSONS FOR CROSS VERIFICATION AND THE CONTENTS IN THE AFFIDAVIT ARE WITHOUT ANY DOCUM ENTARY EVIDENCE AND ARE SELF SERVING AND CANNOT BE HELD AS ACCEPTABLE. THE HON'BLE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 21 ALLLAHABAD HIGH COURT IN THE CASE OF SRI KRISHAN VS .CIT(AII.) 142 ITR 618 HAS HELD THAT AFFIDAVIT NEED NOT ALWAYS BE ACCE PTED AS CORRECT. IT IS NEITHER A RULE OF PRUDENCE NOR A RULE OF LAW THAT T HE STATEMENTS MADE IN AN AFFIDAVIT WHICH REMAINS UNCONTROVERTED, MUST INV ARIABLY BE ACCEPTED AS TRUE AND RELIABLE. FURTHER ON 28/3/2016, THE ASSESSEE FILED WRITTEN RE PLY CLAIMING THAT THE ASSESSEE IS WORKING AS COMMISSION AGENT RIGHT FROM THE BEGINNING AND HAVE BEEN DECLARING A COMMISSION OF APPROXIMATELY 2 .5% CONSISTENTLY IN RETURN OF M/S B.S. TRADING COMPANY IN WHICH I AM 50 % PARTNER. I HAVE DULY DECLARED COMMISSION INCOME FROM PROPERTY CONSU LTANCY AFTER FINISHING OF TRANSACTION WITH M/S HORIZON BUILDCON( P) LTD. COPIES OF RETURN ENCLOSED. THE SUBMISSION GIVEN BY THE ASSESS EE HAS BEEN CONSIDERED BUT THE SAME FOUND SANS MERIT. THE ASSES SEE FURNISHED RETURN OF INCOME ALONGWITH REPLY FOR THE AY 2006-07 TO 201 1-12. ON PERUSAL OF THE COMPUTATION OF INCOME, IT IS SEEN AND CLEAR THA T THE ASSESSEE HAS NOT SHOWN ANY COMMISSION INCOME FROM PROPERTY COMMISSIO N FOR THE AY 2006-07 TO 2010-11. IN AY 2011-12, THE ASSESSEE SHO WN COMMISSION INCOME FROM PROPERTY BUT THERE IS NOWHERE MENTIONED THAT THE COMMISSION HAS BEEN RECEIVED FROM M/S HORIZON BUILD CON (P) LTD.; MERELY, MENTIONING DECLARING INCOME ON ACCOUNT OF C OMMISSION ON PROPERTY, CANNOT PROVED THAT THE COMMISSION IS ON A CCOUNT OF THIS ALLEGED TRANSACTION. MOREOVER, IT CANNOT BE SAID TH AT A PERSON WHO IS DOING THE BUSINESS OF COMMISSION AGENT AS PROPERTY DEALER, CANNOT MAKE ANY INVESTMENT IN PURCHASE OF PROPERTY. THEREFORE, THE SUBMISSION OF THE ASSESSEE THAT HE IS SHOWING INCOME FROM PROPERTY CO NSULTANCY HAS NO RELEVANCY IN RESPECT OF INVESTMENT MADE BY HIM IN P URCHASE OF PROPERTY FROM VARIOUS PERSONS ON AGREEMENT TO SELL/BIAYANA. IV) THE COPIES OF POWER OF ATTORNEYS FURNISHED BY T HE ASSES SE, WHICH HAVE BEEN OBTAINED FROM ALL SELLERS OF THE LAND, WH EREIN THEY HAVE MENTIONED THAT THEY HAVE GIVEN THE POWER OF ATTORNE Y TO THE ASSESSEE ONLY BECAUSE OF FAITH ON HIM WITHOUT ANY MONEY CONS IDERATION, IS ALSO NOT HAVING ANY WEIGHT AND THE SAME IS AN AFTERTHOUG HT. THIS FACT ALSO ESTABLISHED FROM THE STATEMENT OF SH. RAJINDER KUMA R S/O SH. SOHAN LAL RECORDED ON 22/3/2016. NO ANY PERSON CAN GIVE THE P OWER OF ATTORNEY AND TRANSFERRED ALL RIGHTS TO AN UNKNOWN PERSON WIT HOUT ANY CONSIDERATION, TO SELL HIS PROPERTY OR LAND, WHEN T HE ASSESSEE NEITHER THE RELATIVE OF THE SELLERS NOR FAMILY MEMBERS. FURTHER MORE, WHILE PREPARING A POWER OF ATTORNEY, IT IS MANDATORY TO M ENTION/WRITE THESE LINES THAT NO MONEY CONSIDERATION HAS BEEN DONE IN LIEU OF THIS POWER OF ATTORNEY. HENCE, THE CONTENTION OF THE ASSESSEE THA T POWER OF ATTORNEY WAS PREPARED WITHOUT ANY CONSIDERATION, HAS BECOME INEFFECTIVE. ACTUALLY, THE ASSESSEE PURCHASED THE LAND FROM THE ACTUAL LAND OWNERS AFTER MAKING FULL PAYMENTS ON AGREEMENTS/BIYANAS OR POWER OF ATTORNEY AND LATER ON TRANSFER THE SAME LAND TO M/S HORIZON BUILDCON (P) LTD. AS POA. V) ON GOING THROUGH THE BANK ACCOUNT STATEMENTS OF THE ASSESSEE, IT IS SEEN THAT HUGE TRANSACTIONS WERE MADE IN THESE BANK ACCOUNTS. WHEN ASKED TO EXPLAIN THE SOURCE OF THE SAME, THE ASSESS EE SUBMITTED THAT ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 22 SINCE HE SOLD THE LAND OF THE ACTUAL OWNER OF THE L AND ON POWER OF ATTORNEY, THE AMOUNT CAME IN MY ACCOUNT AND THEN I DISTRIBUTED THE SAME TO THE ACTUAL OWNERS OF THE LAND. THE CONTENTI ON OF THE ASSESSEE IS AGAIN INCONSIDERABLE IN VIEW OF THE FACTS THAT ASSE SSEE FAILED TO PROVE THAT THE AMOUNT RECEIVED BY HIM FROM M/S HORIZON BU ILDCON(P) LTD. HAS BEEN DISTRIBUTED THE PERSONS FROM WHOM HE PURCHASED LAND. SO FAR AS THE PAYMENTS MADE THROUGH CHEQUES TO FARMERS ARE CO NCERN, THE ASSESSEE RECEIVED AN AMOUNT OF RS. 35 LACS FROM M/S HORIZON BUILDCON (P) LTD THROUGH CHEQUE ON 23/3/2009, AND FURTHER A SUM OF RS. 22 LACS HAVE BEEN WITHDRAWN ON 26/3/09 BUT IT IS NOT MENTIO NED OR CLEARED THAT WHOM THESE PAYMENTS HAVE BEEN GIVEN. AS SUBMIT TED BY THE ASSESSEE IN HIS REPLY THAT HE IS DOING THE BUSINESS OF SALE/PURCHASE OF PROPERTY AND COMMISSION AGENT, THEREFORE, IT CANNOT BE SAID THAT THE FUNDS WITHDRAWN WERE GIVEN TO THE PERSONS WHOM HE H AS PURCHASED THE LAND IN QUESTION OR WITHDRAWN FOR HIS DAY TO DAY BU SINESS USE. VI) FURTHER, THE DOCUMENTS FOUND AT THE BUSINESS PR EMISES OF M/S HORIZON BUILDCOM(P) LTD. PREPARED WITH THE TITLE 'A CCOUNTS OF SH. SURJIT SINGH' AND ACCORDING TO THIS DOCUMENT TOTAL PAYMENT S TO SH. SURJIT SINGH WAS MADE AT RS. 11,67,73,370/-. DOCUMENTS MEN TIONED AS PAGE- 72 TITLED AS 'ANNEXURE' ALSO MENTIONED THAT' SCHEDU LE OF PAYMENTS MADE AGAINST MOU DATED 22.01.2008 BETWEEN SH. SURJIT SI NGH S/O SH. HARJINDER SINGH VILLAGE BHAKAHA HARI SINGH TEHSIL A JANALA, AMRITSAR, S. BALJINDER SINGH S/O SH. NATHA SINGH VILLAGE RAMANA CHAKK AMRITSAR AND M/S HORIZON BUILDCON (P) LTD. AS PER THESE DOCU MENTS, THE COMPANY AGAIN MADE PAYMENT OF RS. 1,50,00,000/- THROUGH VAR IOUS CHEQUES AND RS. 25,00,000/- IN CASH. WHEN THESE DOCUMENTS CONFR ONTED TO THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 8/3/2016, THE ASSESSEE IN REPLY SUBMITTED THAT THESE ARE UNSIGNED DOCUMENTS AND THE REFORE, DOES NOT HAVE ANY VALUE IN THE EYES OF LAW. THE PLEA GIVEN B Y THE ASSESSEE IS NOT ACCEPTABLE BEING ENTIRELY BASELESS AND CANNOT BE RE LIED UPON. THE CLAIM OF THE ASSESSEE THAT THE MOU DATED 22/01/2008 IS NO T SIGNED AND HAVE NO WEIGHT IN THE EYES OF THE LAW, IS NOT ACCEPTABLE , DUE TO THE REASONS THAT ON THE BASIS OF THIS MOU DATED 22/1/2008 THE A SSESSEE FURTHER EXECUTED AN AGREEMENT DEED BETWEEN THE ASSESSEE AND THE COMPANY M/S HORIZON BUILDCOM(P) LTD., WHICH HAS SIGNED BY B OTH THE PARTIES, IN WHICH THE COMPANY HAS TAKEN CONGNIZANCE OF THIS MOU DATED 22/1/2008. HENCE, IT CANNOT BE SAID THAT THE UNSIGN ED MOU HAS NO WEIGHT IN THE EYES OF LAW WHEN THE PURCHASER AND SE LLER HAS TAKEN CONGNIZANCE OF THIS MOU IN THEIR FURTHER TRANSACTIO N. FURTHER, THE OTHER DOCUMENTS I.E. 'ACCOUNT OF SH.SURJIT SINGH AND SCHE DULE OF PAYMENT', ARE THE DOCUMENTS OF UNACCOUNTED TRANSACTIONS MADE BETW EEN ASSESSEE AND THE COMPANY, WHICH PREPARED ONLY FOR REMEMBERING PU RPOSE AND DUE TO THAT REASON, THESE DOCUMENTS HAD NOT BEEN SIGNED BY ANY OTHER PARTY. THE CONTENTION OF THE ASSESSEE THAT THESE UNSIGNED DOCUMENTS HAVE NO WEIGH IN THE EYES OF LAW IS NOT ACCEPTABLE IN VIEW OF THIS FACTUAL POSITION. FORM THE ABOVE, IT HAS BEEN CLEARED THAT THOUGH THE SE DOCUMENTS WERE NOT SIGNED BY ANY OF THE PARTY, BUT THE AUTHENTICIT Y OF THESE DOCUMENTS CANNOT BE DENIED IN VIEW OF THE FACT THAT THE THING S HAVE BEEN HAPPENED ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 23 FURTHER ACCORDING TO THE SAID MOU AND ACCORDING TO OTHER DOCUMENTS FOUND AT THE BUSINESS PREMISES OF M/S HORIZON BUILC ON (P) LTD. RELIANCE IS PLACED ON THE JUDGEMENT OF THE HON'BLE SUPREME C OURT IN THE CASE OF CIT VS. DURGA PRASAD MORE (1971 82 ITR 540(SC) WHER EIN IT HAS BEEN HELD THAT WHERE A PARTLY RELIES OF SELF SERVING REC ITALS IN A DOCUMENTS IT IS FOR THAT PARTY TO ESTABLISH THE TRUTH OF THESE RECI TALS. THE TAX AUTHORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTA NCES ARE DISCUSSED HEREINAFTER. MOREOVER, THE QUESTION IS THAT WHAT WA S THE NEED TO PREPARE THESE DOCUMENTS BY THE COMPANY WHEN NO TRAN SACTIONS HAVE BEEN MADE WITH THE ASSESSEE. HENCE, THESE DOCUMENTS ALSO ESTABLISHED THAT THE ASSESSEE HAS TAKEN LAND FROM VARIOUS FARME RS/PERSONS ON AGREEMENT TO SELL/BIYANA OR POA AND THEN TRANSFERRE D THE SAME LAND TO THE COMPANY AS POA. VII) THE FACTS OF THE CASE LAW QUOTED BY THE ASSESS EE HAVE ALSO BEEN TAKEN INTO CONSIDERATION BUT FOUND THAT FACTS OF TH E CASES QUOTED BY THE ASSESSEE ARE NOT IDENTICAL TO THE FACTS OF THE CASE OF ASSESSEE. THE CASE LAW QUOTED BY THE ASSESSEE ARE IN RESPECT OF DIFFER ENCE IN RATE OF LAND AS PER SALE DEED AND RATE OF LAND MENTIONED IN SEIZED DOCUMENTS AND THERE IS NO RELEVANCY OF THESE CASE LAWS IN RESPECT OF AS SESSEE'S CASE. IN THE CASE OF THE ASSESSEE, THE AGREEMENT TO SELL/BIYANA MADE BETWEEN ASSESSEE S. SURJIT SINGH, S. BALJINDER SINGH AND TH E VARIOUS PERSONS/FARMERS WHO WERE ACTUAL OWNER OF THE LAND, WERE CLEARLY PROVED THAT THE LAND WAS ACTUALLY PURCHASED BY THE ASSESSEE S. SURJIT SINGH AND BALINDER SINGH FROM ITS ACTUAL OWNERS ON AGREEMENT TO SELL/IKRARNAMAS AFTER MAKING FULL PAYMENTS BECAUSE THESE AGREEMENTS/BIYANAS WERE WRITTEN IN FULL LETTER AND SPIRIT, WHICH IN ANY WAY CANNOT E SAID AS IMAGINARY BIYANAS AS CLAIMED B Y THE ASSESSEE IN HIS REPLY. VIII) FURTHER THE ASSESSEE'S PLEA THAT ALL THE ADDI TION MADE IN THE CASE OF M/S HORIZON BUILDCON(P) LTD. BY THE ASSESSING OFFIC ER HAS BEEN DELETED BY THE LD. CIT(A)(C), HAVE ALSO NO RELEVANCY WITH T HE CASE OF THE ASSESSEE. IN THE CASE OF M/S HORIZON BUILDCON(P) LT D, THE ISSUE OF ADDITION WAS DIFFERENCE IN SALE RATE OF LAND AS PER MOU AND AS PER REGISTRATION DEED. THEREFORE, THERE IS NO RELEVANCY OF THE CASE OF M/S HORIZON BUILDCON (P) LTD WITH THE CASE OF THE ASSES SEE. ACCORDINGLY, THE AO FRAMED THE ASSESSMENT AFTER OBSE RVING AS UNDER :- 2.3. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, IT IS CLEARLY ESTABLISHED THAT THE ASSESSEE HAS PURCHASED LAND FR OM VARIOUS PERSONS/FARMERS ON AGREEMENT/IKRARNAMA OR POWER OF ATTORNEY IN HIS NAME AND LATER TRANSFERRED THE SAME LAND TO M/S HOR IZON BUILDCON(P) LTD AS POA OF THE ORIGINAL OWNERS. THE KHASRA NUMBE RS MENTIONED IN THE REGISTRATION DEEDS ARE THE SAME AS IN THE AGREE MENTS TO SELL. HOWEVER, ON GOING THROUGH THE RECORD, IT IS NOTICED THAT OUT OF TOTAL LAND OF 61900 SQYRDS PURCHASED BY THE ASSESSEE DURING TH E YEAR UNDER CONSIDERATION, LAND MEASURING 200SQYRDS IS IN THE N AME OF SMT. AMARJEET KAUR WHO IS THE WIFE OF THE ASSESSEE VALUE OF WHICH ARE AT RS.2,63,000/- @ 1315 PER SQRDS AND FURTHER LAND MEA SURING 425 SQYRDS RATE OF WHICH IS RS.15001- PER SQYRDS, TOTAL VALUE RS. 6,37,500/- BELONGS ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 24 TO SH. RANJIT SINGH AND SH.RANJIT SINGH HAD SOLD TH E SAID LAND DIRECTLY TO THE COMPANY. HENCE, IN THE INTEREST OF NATURAL JUST ICE, THE AMOUNT OF RS. 900500/-(263000+637500/-), BEING NOT RELATED TO ASS ESSEE, IS EXCLUDED FROM THE TOTAL INVESTMENT MADE BY THE ASSESSEE IN P URCHASE OF LAND. THE BALANCE AMOUNT OF RS. 10,83,75,750/- IS ADDED TO TH E TAXABLE INCOME OF THE ASSESSEE TREATING THE SAME UNACCOUNTED INVESTME NT OF THE ASSESSEE IN PURCHASE OF LAND FROM VARIOUS PERSONS ON AGREEME NT TO SELL OR POWER OF ATTORNEY, WHICH LATER ON TRANSFERRED TO COMPANY M/S HORIZON BUILDCON(P) LTD. AS POA. I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED TRUE PARTICULARS OF HIS INCOME TO THE TUNE OF RS.10,83,75,750/-, THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 FOR CONC EALMENT OF INCOME IS BEING INITIATED SEPARATELY. 3. FURTHER, AS PER INFORMATION, THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION SOLD LAND MEASURING 17550 SQYRDS (35K ANALS 2 MARLAS) TO MLS HORIZON BUILDCON(P) LTD. @ RS. 2310/- PER SQ.YA RDS AS PER MOU DATED 22.1.2008, FOR AN AMOUNT OF RS. 4,05,40,500/- . ON GOING THROUGH THE RECORDS, IT HAS BEEN NOTICED THAT THE ASSESSEE HAS SOLD, TOTAL LAND MEASURING 27KANAL 2MARLAS AND OUT OF BALANCE 7K 19 MARLAS SOLD BY SH.BALJINDER SINGH AS POA AND BALANCE BY THE FARMER S DIRECTLY. THE LAND MEASURING 27K 2 M (13550 SQYRDS) SOLD HAS BEEN PURC HASED BY THE ASSESSEE FOR AN AMOUNT OF RS. 2,27,10,500/- AND FUR THER SOLD TO THE COMPANY @ 2310/- PER SQURDS FOR A CONSIDERATION OF RS. 3,13,00,500/- AS PER BELOW DETAILS:- DATE OF PURCHASE KHASRA NO. TOTAL AREA RATE PER SQRDS TOTAL DATE OF SALE/ @ RS. 2310/-PER SQYRDS. TOTAL 7.4.2008 4415, 4436, 4418 10K IM 5025 SQYRDS 1200/- 60,30,000/- 27/5/2008 1,16,07,750/- 7.3.2008 4416,4417 4K IM 2025 SQYRDS 3920/- 79,38,000/- 2/3/2009 46,77,750/- 27.11.2008 4418,4427 3K17M 1925 SQYRDS 1200/- 23,10,000/- 2/3/2009 44,46,750/- 27.11.2008 4428, 4430 5K13M 2825 SQYRDS 1100/- 31,07,500/- 2/3/2009 65,25,750/- 7.10.2008 4431 3 K 10M 1750 SQYRDS 1900/- 33,25,000/- 2/3/2009 40,42,500/- 27K2M(13550SQYRDS) 2,27,10,500/- 3,13,00,500/- THE ASSESSEE HAS EARNED SHORT TERM CAPITAL GAIN ON THIS TRANSACTION AMOUNTING TO RS. 85,90,000/-, BUT THE SAME HAS NOT BEEN SHOWN IN HIS TAXABLE INCOME. WHEN ASKED TO EXPLAIN THE REASONS F OR THE SAME, THE ASSESSEE SUBMITTED THAT SINCE HE HAD NOT PURCHASED OR SOLD ANY PROPERTY, THERE IS NO QUESTION OF SHORT TERM CAPITA L GAIN. SINCE, AS DISCUSSED IN PARA-2 ABOVE IN DETAIL, THE ASSESSEE P URCHASED THE LAND DURING THE YEAR UNDER CONSIDERATION AND EARLIER YEA R OUT OF WHICH HE HAD SOLD LAND MEASURING 27 KANALS 2 MARKS I.E. 1355 0 SQYRDS. DURING THE YEAR UNDER CONSIDERATION, ON WHICH HE HAS EARNE D SHORT TERM CAPITAL GAIN OF RS. 85,90,000/-, WHICH HE HAD NOT SHOWN FOR TAXATION PURPOSES. HENCE, THE AMOUNT OF RS. 85,90,000/-, IS ADDED TO T HE INCOME OF THE ASSESSEE AS SHORT TERM CAPITAL GAIN. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 25 I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED TRUE PARTICULARS OF HIS INCOME TO THE TUNE OF RS.1,20,61,750/-, THEREFORE, PENALTY PROCEEDINGS U/S 271 (1)( C ) OF THE INCOME TAX ACT, 1961 FOR CO NCEALMENT OF INCOME IS BEING INITIATED SEPARATELY. WITH THESE OBSERVATIONS, TOTAL INCOME OF THE ASSESS EE IS COMPUTED AS UNDER:- RETURNED INCOME AS FILED IN RESPONSE TO NOTICE US/ 148 1,59,540/- ADD: AS DISCUSSED ABOVE IN PARA-2 10,83,75,750/ - AS DISCUSSED ABOVE IN PARA-3 85,90,000/- TOTAL TAXABLE INCOME 11,71,25,290/- AGRICULTURAL INCOME FOR RATE PURPOSES 4,82 ,000/- TAX ON ASSESSED INCOME 3,51,87,187/- SURCHARGE @ 10% 35,18,719/- 3,87,05,906/- EDUCATION CESS @ 3% 11,61,177/- 3,98,67,083/- LESS: AGRL. REBATE 97,438/- BALANCE 3,97,69,645/- INTT.U/S.234A@9% 35,89,268/- INTT. U/S.234B @84% 3,34,06,502/- TOTAL TAX PAYABLE 7,67,65,415/- PENALTY NOTICE UNS/ 271(L)(C) OF THE ACT FOR CONCEA LMENT OF INCOME AS MENTIONED ABOVE IN PARA-2 AND 3, HAVE BEEN ISSUED S EPARATELY. ASSESSED AT INCOME OF RS. 11,71,75,290/- + 4,82,000 /- AGRL. INCOME. CHARGE U/S 234A, 234B AND 234C AS PER PROVISIONS O F ACT. ISSUE DEMAND NOTICE AND OTHER REQUISITE DOCUMENTS. 9. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED THE APPEAL O F THE ASSESSEE RELYING ON ITS OWN ORDER FOR THE A.Y.2008-2009 AND TH E OBSERVATIONS MADE THEREIN ARE AS UNDER :- 6. I HAVE CONSIDERED THE ASSESSMENT ORDER, THE GROU NDS OF APPEAL AND WRITTEN SUBMISSIONS OF THE APPELLANT AND THE GR OUNDS OF APPEAL ARE DISPOSED OFF AS UNDER:- (I) THE GROUND OF APPEAL NO. 1 AND 2 ARE AGAINST T HE ADDITION OF RS 79,50,000/- ON ACCOUNT OF SUSPECTED INVESTMENT IN P URCHASES OF LAND FROM UNDISCLOSED SOURCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE FILED DETAILS OF BANK ACCOUNTS MAINTAINED BY HIM. AS PER INFORMATION AVAILABLE WITH THE AO, THE ASSESSEE ALONG WITH SHRI SURJIT SINGH HAD P URCHASED THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 26 FOLLOWING LANDS AT VILLAGE SULTANWIND FROM THE PERS ONS MENTIONED BELOW FOR A TOTAL = V, AMOUNT OF RS 1,93,45,000/- NAME OF SELLER TOTAL AREA RATE PER SQ YARDS TOTAL AMOUNT PAID FOR PURCHASE DATE OF PURCHASE DATE OF SALE RAJWINDER KAUR 5 K 6M=2650 YRDS 3000/ - 79,50,000/ - 07/03/ 08 FY 07-08 2 - 3 - 09 FY 08-09 PARGAT SINGH & JAGIR SINGH 5K=2500 SQ YRDS 3290/ - 98,00,000/ - 07 - 03 - 08 (07-08) 2 - 3 - 09 (08-09) 10-12-10 (10-11) RAJVINDER KAUR 1K 2M=550 YRDS 2900/ - 15,95,000/ - 15 - 03 - 08 (FY 07-08) 11 - 12 - 08 TOTAL 5700 SQ YRDS 193,45,000/ - THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS HUGE INVESTMENT OF RS 1,93,45,000/- ALONGWITH DOCUMENTARY EVIDENCE. IN RESPONSE THE ASSESSEE REPLIED THAT THE ASSESSEE HAD NEITHER PURC HASED NOR SOLD ANY ASSETS/PROPERTY/ LAND AT VILLAGE SULTANWIND IN HIS PERSONAL CAPACITY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09. THE AO CONSIDERED THE REPLY OF THE ASSESSEE WHICH IS RE PRODUCED IN THE ASSESSMENT ORDER, AND REJECTED THE SAME FOR THE FOL LOWING REASONS AS DISCUSSED IN THE ASSESSMENT ORDER :- (I) AS PER INFORMATION AVAILABLE WITH THE AO, AT THE TIME OF SEARCH OPERATION CONDUCTED IN THE CASE OF M/S HORIZ ON BUILDCON (P) LTD ON 07-04-2011, A MEMORANDUM OF U NDERSTANDING (MOU) DATED 22-01-2008 WAS FOUND WHICH WAS EXECUTED BE TWEEN SHRI SURJIT SINGH AND SHRI BALJINDER SINGH AS FIRST PARTY AND M /S HORIZON BUILDCON (P) LTD AS 2 ND PARTY. AS PER THIS MOU THE FIRST PARTY IS THE OWNE R OF LAND MEASURING 50,000 SQ.YRDS OF LAND IN VILLA GE SULTANWIND, DISTRICT AMRITSAR AND HAD UNDERTAKEN TO TRANSFER THE SAME TO THE SECOND PARTY @ RS 2310 PER SQ. YRDS. FURTHER .SEVERAL OTHER DOC UMENTS SUCH US IKRAMAMAS/AGREEMENTS TO SELL EXECUTED WITH VARIOUS PERSONS/ FARMERS, ARE IN THE POSSESSION OF THE DEP ARTMENT WINCH CLEARLY INDICATES THAT SHRI SURJIT SINGH AND SHRI BALJINDE R SINGH HAD PURCHASED LAND FROM VARIOUS PERSONS AT VILLAGE SULTAN WIND, A MRITSAR ON AGREEMENT TO SELL OR POWER OF ATTORNEY IN THEIR NAM E OR THEIR WIVES AND LATER ON TRANSFERRED THE SAME LAND TO M/S HORIZON B UILDCON (P) LTD AS POA OF THE ORIGINAL LAND OWNERS. (II) THAT SEVER AL AGREEMENTS TO SELL (IKRARNAMA) WERE EXECUTED BETWEEN THE AS SESSEE SHRI SURJIT SINGH AND SHRI BALJINDER SINGH AND THE PERSONS MENT IONED BELOW:- (A) SMT. RAJWINDER KAUR W/O SHRI BALWINDER SINGH, VILLAGE RAMAN CHAKK TEH BABA BAKALA, AMRITSAR. (B) SHRI PARGAT SINGH AND SHRI JAGIR SINGH' S/O SH RI KUNCLAN SINGH, VILLAGE SULTANWIND, AMRITSAR. (C) SHRI RAJINDER KUMAR S/O SHRI SOHAN LAI R/O 638 CHOWK GALI VILLAGE MAJITHA, AMRITSAR. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 27 AS PER THE AGREEMENTS TO SELL (IKRARNAMA), THE ASSE SSEE PURCHASED LAND FROM THE ABOVE SAID PERSONS DURING THE YEAR UNDER C ONSIDERATION ON VARIOUS RATES RANGMGFROM RS 2900/-PER SQ YRDS TO RS 3920/- PER SQ YRDS. THESE AGREEMENTS WERE SIGNED BY BOTH THE PART IES IE SELLER AND PURCHASER. THE KHASRA NUMBERS MENTIONED ON THESE AG REEMENTS WERE THE SAME AS MENTIONED ON THE MOU DATED 22-01-2008. WHEN THE ASSESSEE WAS CONFRONTED WITH THESE AGREEME NTS HE STATED THAT THESE WERE IMAGINARY BIYANA/AGREEMENTS TO SELL IN THEIR NAMES FROM DIFFERENT LAND OWNERS TO CONVINCE THE COMPANY ABOUT THEIR CAPACITY TO CONSOLIDATE THE LAND AND IN ORDER TO JUSTIFY HIG H PRICES OF LAND. THIS PLEA OF THE ASSESSEE VUWAS HELD BY THE AO T O BE TOTALLY UNDEPENDABLE AS THE BIYANA/AGREEMENT TO SELL/ I KRARNAMAS WERE WRITTEN IP LETTER AND SPIRIT. THE AO HELD THAT HAD THE IKRARNAMA/AGREEMENT TO SELL BEEN PSEUDO/FABRICATED, THE NAME OF THE OWNERS OF LAND WOULD NOT HAVE HAPPENED TO BE THE SA ME. THEREFORE THE AO HELD THAT APPARENTLY THE IKRARNAMA/ AGREEMENT TO SELL ARE ACTUALLY IN THE NAME OF THE OWNERS OF LAND ARE NOT IMAGINARY . THAT NO LAND' OWNER CAN PREPARE A FAKE AGREEMENT TO SELL/BIYANA O N A STAMP PAPER TO CONVINCE ANY BUILDER FOR HIGH PRICES. THE CONTENTIO N TAKEN BY THE ASSESSEE IS THEREFORE AN AFTER THOUGH. THE AO STATED THAT ACTUALLY, IT IS A COMMON PRACTIC E IN THE FIELD OF REAL ESTATE THAT THE DEALER / BROKER PURCHASED THE LAND FROM THE LAND OWNER ON AGREEMENT TO SELL/IKRARNAMA AFTER MAKING FULL PA YMENT AND BECAUSE THE REGISTRATION CHARGES HAVE TO BORNE BY THE PUR CHASER, THEY OBTAINED A POWER OF ATTORNEY FROM THE SELLER TO SELL TH E REGISTRATION CHARES AND AFTER THAT, FURTHER SOLD A LAND TO THE THIRD PERSON ON POWER OF ATTORNEY AND SAVED THE REGISTRATION EXPENSES IN ADDITION TO THEIR REGULAR PROFIT. THE SAME PRACTICE HAS BEEN ADOPTED IN THE INSTANT C ASE BY THE ASSESSEE. THE AO OBSERVED THAT THE CONTENTION OF THE ASSESSEE THAT THESE AGREEMENT TO SELL ARE IMAGINARY IS FEEBLE FROM THE CONTENTS OF THESE AGREEMENT TO SELL AS IT IS CLEARL Y MENTIONED IN THESE AGREEMENT TO SELL ' IF THE PURCHASER PULL BACK, THE ADVANCE GIVEN BY HIM WILL BE FORFEITED AND IF THE SELLER WILL PULL BACK, HE HAS TO PAY DOUBLE AMOUNT OF ADVANCE AND THE PURCHASER HAS FULL RIGHT TO GET REGISTRY THROUGH COURT. I BEING THE SELLERS WILL BE RESPONSI BLE FOR THE FAULT IN THE OWNERSHIP AND THE PURCHASER WILL HAVE THE FULLEST R IGHTS TO MAKE PLOTS ON THE LAND, GET THE PLANS DRAWN ON IT GET THE ROAD S BUILT UP ON IT AND GET THE AGREEMENTS RETURN FURTHER OR GET THE FOUNDA TIONS OF THE PLOTS COMPLETED UP AND WHEREVER REQUIRED UP T HE SIGNATURES THEREUPON'. THEREFORE THE AO OBSERVED THAT IT IS AMPLY CLEAR TH AT THE AGREEMENTS TO SELL/IKRARNAMAS WERE WRITTEN PROPERLY AFTER TAKING INTO CONSIDERATION ALL THE LEGAL ASPECTS. ALL THE RIGHTS OF THE LAND HAD BEEN TRANSFERRED TO THE PURCHASER THROUGH THESE AGREEMEN TS TO SELL. THE AGREEMENTS TO SELL HAVE PROPERLY BEING SIGNED BY BOTH THE PARTIES ALONGWITH WITNESSES. FROM THE WORDING OF THE B IYANA / AGREEMENT TO SELL IT IS PRIMA FACIE CLEAR THAT THE AGREEMENT TO SELL CANNOT BE SAID TO BE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 28 AN IMAGINARY AND FAKE DOCUMENT AS CLAIMED BY THE AS SESSEE IN HIS REPLY BUT IS THE LEGAL DOCUMENT IN WHICH IT IS CLEARLY WR ITTEN THAT IF THE SELLER PULL BACK FROM THE CONTENTS WRITTEN IN THIS AGREEME NT TO SELL, THE PURCHASER HAS FULL RIGHT TO GET REGISTRY OF THE LAN D THROUGH COURT. THEREFORE THE AO HELD THAT THE FROM THE PLAIN READI NG OF THESE AGREEMENTS TO SELL IT IS CLEAR THAT THESE DOCUMENTS ARE LEGAL DOCUMENTS AND ARE NOT IMAGINARY OR FAKE DOCUMENTS AS CLAIMED BY THE ASSESSEE AND IT IS CLEAR THAT THE ASSESSEE PURCHASED LAND FR OM VARIOUS FARMERS/PERSONS ON THESE AGREEMENTS TO SELL/ POWER OF ATTORNEY AND LATER ON TRANSFERRED TO M/S HORIZON BUILDCON PVT LT D AS POA. THE AO REJECTED THE POWER OF ATTORNEYS BECAUSE THE SAME WAS GIVEN WITHOUT MONEY CONSIDERATION AND ONLY BECAUSE OF GOO D FAITH FOR THE REASON THAT WHILE PREPARING THE POWER OF ATTORNEY, IT IS MANDATORY TO MENTION/WRITE LINES THAT NO MONEY CONSIDERATION HAS BEEN DONE IN LIEU OF THIS POWER OF ATTORNEY. THE AO DID NOT BELIEVE T HAT POWER OF ATTORNEY WAS DONE WITHOUT CONSIDERATION AND HELD THAT THE AS SESSEE HAD PURCHASED LAND FROM THE ACTUAL OWNERS OF LAND AFTER MAKING FULL PAYMENTS ON AGREEMENTS/BIYANAS AND ON POWER OF ATTO RNEY AND THEREAFTER TRANSFERRED THE SAME LAND TO M/S HORIZON BUILDCON (P) LTD. THE AO ALSO VERIFIED THE BANK ACCOUNT OF THE ASSESS EE AND FOUND HUGE CASH TRANSACTIONS. THE AO HELD THAT THE ASSESSEE HA D FAILED TO PROVE THAT HE HAD NOT MADE ANY TRANSACTIONS WITH M/S HORIZON B UILDCON PVT LTD AND HAD NOT DISTRIBUTED TO THE PERSONS FROM WHOM HE PURCHASED THE LANDS. THE OBSERVED THAT DOCUMENT NO. 72 TITLED 'ANNEXU RE' ALSO MENTIONED THE SCHEDULE OF PAYMENTS MADE AGAINST MOU DATED 22- 01-2008 BETWEEN SHRI SURJIT SINGH AND SHRI BALJINDER SINGH WITH M/S HORIZON BUILDCON (P) LTD. AS PER THIS 'ANNEXURE' M/S HORIZON BUILDCO N (P) LTD AGAIN MADE PAYMENT OF RS 1.5 CRORE TO CHEQUES AND RS 25,0 0,000/- IN CASH. THE ASSESSEE WAS CONFRONTED VIDE ORDER SHEET ENTRY DATED 08/03/2016 IN RESPONSE TO WHICH THE ASSESSEE REPLIED THAT THES E ARE UNSIGNED DOCUMENTS AND HAVE NO VALUE IN THE EYES OF LAW. THI S CONTENTION OF THE ASSESSEE WAS REJECTED BY THE AO BECAUSE ON THE BASI S OF MOU DATED 22- 01-2008, THE ASSESSEE FURTHER EXECUTED AN AGREEMENT DEED BETWEEN THE ASSESSEE SHRI SURJIT SINGH AND M/S HORIZON BUILDCON (P) LTD, WHICH WAS SIGNED BY BOTH THE PARTIES IN WHICH THE COMPANY HAD TAKEN THE COGNIZANCE OF THE MOU DATED 22-01-2008. THAT THE AO HELD THAT THE AGREEMENTS TO SELL/BIY ANA BETWEEN THE ASSESSEE AND SHRI BALJINDER SINGH WITH VARIOUS PERS ONS/FARMERS, WHO WERE THE ACTUAL OWNERS OF LAND CLEARLY PROVES THAT LAND WAS ACTUALLY PURCHASED BY THE ASSESSEE FROM ACTUAL OWNERS OR POW ER OF ATTORNEY AFTER MAKING FULL PAYMENTS. THE AO HELD THAT THE ASSESSEE HAD PURCHASED LAND FROM VARIOUS FARMERS/PERSONS ON AGREEMENTS/IKRARNAMAS OR POWER O F ATTORNEY IN HIS NAME AND LATER TRANSFERRED THE SAME TO, M/S HORIZON BUILDCON (P) LTD ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 29 AS POA OF ORIGINAL OWNERS AND ALSO RELIED ON THE FA CT THAT THE KHASRA NUMBERS MENTIONED ON THE REGISTRATION DEEDS ARE THE SAME AS MENTIONED IN THE AGREEMENT TO SELL. ACCORDINGLY AFTER EXCLUDING THE INVESTMENT OF RS 1, 13,95,000/- RELATED TO SHRI SURJIT SINGH, THE AO ADDED BACK RS (1,93,45 ,000 - 1,13,95,000) - RS 79,50,000/- AS HIS UNACCOUNTED INVESTMENT IN PUR CHASE OF LAND FROM HIS WIFE SMT RAJWINDER KAUR ON AGREEMENT TO SELL OR POWER OF ATTORNEY, WHICH WAS LATER ON TRANSFERRED TO COMPANY M/S HORIZ ON BUILDCON PVT LTD AS PER MOU DATED 22-01-2008. DECISION:- T HE FACTS OF THE CASE UNDER APPEAL ARE THE SAME AS I N THE CASE OF SHRI SURJIT SINGH S/O SHRI HARJINDER SINGH, 29-D GURU AMARDAS AVENUE, AMRITSAR (PAN ALNPS4128D) FOR AY 2008-09. T HE NPPEAL IN THE EASE OF SHRI SURJIT SINGH AGAINST THE ASSESSMENT OR DER DATED 28-03-2016 FOR AY 2008-09 HAS BEEN DECIDED BY THE UNDERSIGNED VIDE ORDER DATED 31-05-2016 IN APPEAL NO. 283/15-16 IN FAVOUR OF THE APPELLANT. THEREFORE FOLLOWING THE SAID APPELLATE ORDER DATED 31-05-2016 IN APPEAL NO. 283/15-16 IN THE CASE OF SHRI SURJIT SIN GH S/O SHRI HARJINDER SINGH, 29-D GURU AMARDAS AVENUE, AMRITSAR (PAN ALNP S4128D) FOR A Y 2008-09 DECIDED BY THE UNDERSIGNED AND FOR THE SA ME REASONS GIVEN THEREIN, THE APPEAL OF THE APPELLANT ON THE ISSUE U NDER CONSIDERATION IS DECIDED IN HIS FAVOUR AND THE ADDITION OF RS 79,50, 000/- ON ACCOUNT OF HIS UNACCOUNTED INVESTMENT IN PURCHASE OF LAND , FR OM HIS WIFE SMT. RAJWINDER KAUR AND VARIOUS PERSONS ON AGREEMENT TO SELL OR POWER OF ATTORNEY, WHICH WAS LATER ON TRANSFERRED /SOLD TO C OMPANY M/S HORIZON BUILDCON PVT LTD AS POA ON BASIS OF MOU, IS DELETED . (III) THE GROUND OF APPEAL NO. 3 IS AGAINST THE ADD ITION OF RS 19 LACS ON ACCOUNT OF INVESTMENT IN .PROPERTY FROM MONEY RE CEIVED FROM HIS BROTHER THROUGH NORMAL BANKING CHANNELS. AS PER THE ASSESSMENT ORDER THE ASSESSEE HAD MADE TOTAL INVESTMENT OF RS 23, 00,000/- DURING THE! YEAR AS MENTIONED IN THE ASSESSMENT ORDER. THE SOURCE OF; THE INVESTMENT WAS CLAIMED OUT OF SALE PROCEEDS OF AGR ICULTURE PRODUCE AND OUT OF MONEY RECEIVED FROM HIS BROTHER RESIDING ABR OAD. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DISCLOSED AGRICULTURE INCOME OF RS 402,864/- WHOSE CREDIT WAS GIVEN BY TH E AO TO THE EXTENT OF RS 4 LACS. SINCE THE ASSESSEE HAD NOT FILED DOCU MENTARY EVIDENCE OF RECEIPTS FROM HIS BROTHER WHO LIVES ABROAD, THE AO ADDED BACK RS 19. LACS AS INCOME FROM UNDISCLOSED SOURCES U/S 69 OF T HE ACT. IN THE WRITTEN SUBMISSIONS THE APPELLANT ARGUED THAT THE AO HAS SI MPLY IGNORED THE FACT THAT ASSESSEE HAD FULLY EXPLAINED DURING ASSES SMENT PROCEEDINGS THAT HE HAS RECEIVED REMITTANCE FROM HIS CLOSE RELA TIVES LIVING ABROAD THROUGH NORMAL BANKING CHANNELS. THE FACT THAT THE ASSESSEE IS HAVING ADEQUATE SOURCES FOR MAKING INVESTMENTS WAS FULLY E XPLAINED TO THE AO. FURTHER THE ASSESSEE HAS ALSO PRODUCED BOOKS OF ACC OUNTS AND OTHER NECESSARY EVIDENCES DURING ASSESSMENT PROCEEDINGS A ND THE AO GAVE THE IMPRESSION THAT HE WAS FULLY SATISFIED WITH THE REP LIES BUT SUDDENLY CHOSE TO MAKE THE ADDITION OF RS 19 LACS TO THE RETURNED INCOME. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 30 THE DETAILS OF THE FUNDS RECEIVED FROM RELATIVES FO R INVESTMENT IN IMMOVABLE PROPERTY EXPLAINED TO THE AO WAS REPRODUC ED AS UNDER:- NAME OF RELATIVE PAYMENT ID DATE AMOUNT BANK A/C NO. RAJWI RIDER SINGH, 8 CH DU SOUVENIR, KRKLAND, QC H9H5L6 070110B71105 00 15 LAC SBI TOWN HALL, AMRITSAR 30111828254 DO- 071120B63736 00 29-11-07 10 LACS DO THE APPELLANT RELIED UPON SEVERAL DECISION 'OF HON' BLE COTIRTS INCLUDING - 1. CIT VS JAI KUMAR BAKLIWAL 366 ITR 217 (RAJ). 2. CIT VS KAMDHENU STEEL AND ALLOYS LTD 361 ITR 220 (DEL) 3. MOD CREATION PVT LTD VS ITO 354 ITR 282 (DEL) 4. CIT VS MAYAVATI 338 ITR 563 (DEL) 5. CIT VS RAM NARAIN GOEL 224 ITR 180 (P & H) DECISION:- THE DETAILS OF THE FUNDS AMOUNTING TO RS 19 LACS RECEIVED BY THE APPELLANT FROM HIS RELATIVE SHRI RA JWINDER SINGH, AS GIVEN ABOVE THROUGH BANKING CHANNELS CLEARLY ESTABL ISHES THE GENUINENESS OF THE TRANSACTIONS AND THE SOURCE OF R ECEIPTS OF RS 19 LACS, THE COPY OF THE BANK ACCOUNT NO. 30111828254 OF THE APPELLANT IN SBI, TOWN HALL, AMRITSAR WAS CALLED FOR FROM THE APPELLA NT AND THE ABOVE TRANSACTIONS OF REMITTANCE FROM VK ABROAD THEREIN W ERE VERIFIED BY THE UNDERSIGNED. THE APPELLANT ALSO SUBMITTED THE COPY OF CONFIRMATI ON OF THE ABOVE REMITTANCES FROM CANADA TO HIS BROTHER SH. BALJINDE R SINGH (APPELLANT). ACCORDINGLY THERE IS NO JUSTIFICATION FOR THE ADDIT ION OF RS 19 LACS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES U/S 69 O F THE ACT AND THE ADDITION OF RS 19 LACS IS DELETED. 7. IN THE RESULT, APPEAL IS ALLOWED. 10. FINALLY, THE CIT(A) DECIDED THE PRESENT APPEAL OF THE ASSESSEE AFTER OBSERVING AS UNDER :- DECISION - THE FACTS OF THE CASE UNDER APPEAL ARE THE SAME AS IN THE CASE OF THE APPELLANT FOR AY 2008-09. THE APPEAL OF THE APPELLANT AGAINST THE ASSESSMENT ORDER DATED 28-03-2016 IN IT S CASE FOR AY 2008- 09 HAS BEEN DECIDED BY THE UNDERSIGNED VIDE ORDER D ATED 31-05-2016 IN APPEAL NO. 283/ 15-16. THEREFORE FOLLOWING THE SAID APPELLATE ORDER DATED 31-05-2016 IN APPEAL NO. 283/ 15-16 IN THE CASE OF THE APPELLANT FOR A Y 2008-09, THE APPEAL OF THE ASSESSEE ON THE ISSUE UNDER CONSIDERA TION IS DECIDED IN HIS FAVOUR AND THE ADDITION OF RS 10,831,75,750/- AS HI S UNACCOUNTED ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 31 INVESTMENT IN PURCHASE OF LAND FROM VARIOUS PERSONS ON AGREEMENT TO SELL OR POWER OF ATTORNEY, WHICH WAS LATER ON TRANS FERRED TO COMPANY M/S HORIZON BUILDCON PVT LTD AS POA, IS DELETED. THE GROUND OF APPEAL NO. 2 IS ADDITION OF RS 85,90, 000/- ON ACCOUNT OF SUSPECTED SHORT TERM CAPITAL GAIN FROM SALE OF PROP ERTY. AS PER ASSESSMENT ORDER, THE ASSESSEE HAD SOLD LAND MEASURING 17550/- SQ YARDS (35K 2M) TO M/S HORIZON BUILDCON PVT LTD @ RS 2310/- PER SQ YARDS AS PER MOU DATED 21-01-2008 FOR AN AMOUNT OF RS 405,40,500/-. ON GOING THROUGH THE RECORDS THE AO NOTICED THAT TH E ASSESSEE HAD SOLD TOTAL LAND MEASURING 27 KANAL 2 MARIAS AND OUT OF T HE BALANCE 7K 19M SOLD BY SHRI BALJINDER SINGH AS POA AND BALANCE BY FARMERS DIRECTLY. THE AO OBSERVED THAT THE LAND I MEASURING 27K 2M (1 3550 SQ YARDS) SOLD HAD BEEN PURCHASED BY THE ASSESSEE FOR AN AMOU NT OF RS 2,27,10,500/- AND FURTHER SOLD TO THE COMPANY @2310 /- PER SQ YARDS FOR CONSIDERATION OF RS 3,13,00,500/- AS MENTIONED IN T HE ASSESSMENT ORDER. THEREFORE THE AO HELD THAT THE ASSESSEE HAD EARNED SHORT TERM CAPITAL GAIN ON THIS TRANSACTION OF RS 185,90,000/- BUT THE SAME HAS NOT BEEN SHOWN IN THE TAXABLE INCOME. WHEN ASKED TO EXPLAIN THE REASON FOR THE SAME, THE ASSESSEE HAD REPLIED THAT SINCE HE HAD NO T PURCHASED OR SOLD ANY PROPERTY, THERE IS NO QUESTION OF SHORT TERM CA PITAL GAIN. THE AO HOWEVER HELD THAT SINCE THE ASSESSEE HAD PUR CHASED LAND DURING THE YEAR UNDER CONSIDERATION ARID EARLIER YEAR OUT OF WHICH HE HAD SOLD LAND MEASURING 27 KANAL 2 MARIA DURING THE YEAR UND ER CONSIDERATION THEREFORE HE EARNED SHORT TERM CAPITAL GAIN OF RS 8 5,90,000/- WHICH WAS ADDED BACK TO THE TOTAL INCOME. DECISION :- THE APPEAL OF THE ASSESSEE ON THE ISSUE OF SUSPECTE D INVESTMENT IN PURCHASE OF LAND WAS DECIDED IN HIS F AVOUR WHILE DECIDING THE GROUND OF APPEAL NO. 1 ABOVE AND THE ADDITION O F RS 10,83,75,750/- AS HIS UNACCOUNTED INVESTMENT IN PURCHASE OF LAND F ROM VARIOUS PERSONS ON AGREEMENT TO SELL OR POWER OF ATTORNEY, WHICH WA S LATER ON TRANSFERRED TO COMPANY M/S HORIZON BUILDCON PVT LTD AS POA, WAS DELETED. SINCE IT HAS BEEN HELD ABOVE THAT THE APPELLANT HAD NOT PURCHASED ANY LAND IN SULTAN WIND, DISTRICT AMRITSAR FROM THE FAR MERS/ PERSONS ON AGREEMENTS/IKRARNAMAS OR POWER OF ATTORNEY IN HIS N AME AND HAD NOT TRANSFERRED/SOLD THE SAME TO M/S HORIZON BUILDCON P VT LTD DURING THE YEAR UNDER CONSIDERATION IN THE CAPACITY OF OWNER O F LAND, THEREFORE THE QUESTION OF CHARGING CAPITAL GAIN THEREON DOES NOT ARISE. ACCORDINGLY THE ADDITION OF RS 85,90,000/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN IS DELETED. 11. AGGRIEVED FROM THE ABOVE ORDER OF CIT(A), THE RE VENUE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 32 12. LD. DR BEFORE US SUBMITTED HIS WRITTEN SUBMISSION S WHICH READ AS UNDER :- 1. IN THIS CASE , A SEARCH U/S 132 OF THE I.T. ACT, WAS CONDUCTED ON 07.04.2011 ON THE ASSESSEE WHO IS A BUILDER. IT WAS FOUND THAT ASSESSEE HAD PURCHASED APPROX. 50,000/- SQ YARDS OF LAND (11 ACRES) AT VILL. SULTANWIND, AMRITSAR. DURING THE COURSE OF SEARCH A CTION AT OFFICE OF THE ASSESSEE ONE DOCUMENT WAS FOUND AND SEIZED AS PER ANNEXURE DNB-1, A-2, PAGES 26-30 (NOW MARKED AS ANNEXURE A). THIS DOCUMENT IS A UNSIGNED COPY OF A MEMORANDUM OF UNDERSTANDING (MOU ) DATED 22-01- 2008 BETWEEN SH. SURJIT SINGH S/O SH. HARJINDER SIN GH AND BALJINDER SINGH S/O SH. NATHA SINGH AS 1 ST PARTY AND M/S. HORIZON BUILDCON P LTD. AS 2 ND PARTY. 2. AS PER THIS MOU, THE 1 ST PARTY IS THE OWNER OF A LAND MEASURING 50,000/- SQ YARDS AT SULTANWIND, AMRITSAR AND HAS U NDERTAKEN TO TRANSFER THE SAME TO THE SECOND PARTY @ RS. 2310/- PER SQ. YARD. THE TOTAL SALE CONSIDERATION WORKED OUT TO RS. 11.55 CR ORES. AS PER THE SAME DOCUMENT, FIRST PART HAS RECEIVED A SUM OF RS. 1,75 ,00,000/- AS ADVANCE BEING 15% OF THE TOTAL AMOUNT OF CONSIDERATION. THE REST OF THE AMOUNT IS TO BE PAID WITH 10 MONTHS AND IN THE MEANWHILE 2 ND PARTY CAN SUBMIT AND OBTAIN NECESSARY SANCTION FROM THE STATUARY AUT HORITIES FOR THE BUILDING OF THEIR PROJECT ON THIS LAND. 3. THE AMOUNT OF ADVANCE PAID BY THE SECOND PARTY H AS ALSO BEEN EVIDENCED BY ANOTHER DOCUMENT FOUND AND SEIZED AS P ER DNB-1, A-2, PAGE -72 (NOW MARKED AS ANNEXURE-B). THIS SINGLE PAGE DOCU MENT IS A SCHEDULE OF PAYMENTS MADE AGAINST MOU DATED 21 ST OF JANURAY 2008 BETWEEN SH. SURJIT SINGH S/O SH. HARJINDER SINGH R/ O VILLAGE BHAKHA HARI SINGH, TEHSIL AJNALA, AMRITSAR AND S. BALJINDE R SINGH S/O SH. NATHA SINGH R/O VILLAGE RAMANNA CHAKK, AMRITSAR AND M/S. HORIZON BUILDCON P LTD. THE TOTAL AMOUNT MENTIONED ON THIS DOCUMENT IS RS. 1.75 CRORES OUT OF WHICH RS. 1.50 CRORES HAS BEEN PAID BY CHEQU E TO DIFFERENT PERSONS AND RS. 25 LAKHS PAID BY CASH. THIS CLEARLY SHOWS T HAT ALTHOUGH THE MOU IS UNSIGNED BUT THE SAME HAS BEEN ACTED UPON BY THE PARTIES IN LETTER AND SPIRIT. 4. THERE IS ANOTHER DOCUMENT SEIZED AS PER DNB-1, A-2, PAGE-75 (NOW MARKED AS ANNEXURE-C). THERE IS COMPLETE DETAI LS OF AREA OF LAND OF EACH PERSON (AGGREGATING TO 49524) FROM WHOM THE LAND HAS BEEN PURCHASED AND AMOUNT OF ADVANCE TO BE PAID TO EACH OF THEM IS NOTED. FEW OF THE NAMES ARE COMMON IN DNB-1, A-2, PAGE -72 AND DNB-1, A- 2, PAGE-75. THE RATE HAS BEEN SAME @ RS 2310/- PER SQ YARD. TH IS ALSO SHOWS THAT ALTHOUGH THE MOU IS UNSIGNED BUT THE SAM E HAS BEEN ACTED UPON BY THE PARTIES IN LETTER AND SPIRIT. 5. THERE IS ONE MORE DOCUMENT SEIZED AS PER DNB-1, A-9, PAGE-45 (NOW MARKED AS ANNEXURE-D). THIS IS A COMPLETE SCHE DULE OF LAND MADE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 33 AGAINST MOU DATED 22-01-2008. THE TOTAL LAND NOTED IS 50075 SQ YARDS. THE KHASRA NUMBERS MENTIONED ON THIS PAGE ARE SAME AS THOSE ON THE REGISTRATION DEEDS FOR THE PURCHASE OF LAND BY THE ASSESSEE. 6. FURTHER, ANOTHER MOU DATED 18.03.2008 WAS EXECUT ED BETWEEN THE ABOVE PARTIES WHICH WAS SEIZED AS PER DOCUMENT DNB-1, A-1, P- 133-138 (NOW MARKED AS ANNEXURE-E), IN WHICH IT IS MENTION ED THAT THE TERMS OF THE MOU DATED 22.01.2008 HAVE BEEN COM PLIED WITH AND HENCE THIS SUPPLEMENTARY MOU IS BEING EXECUTED. THE TERMS OF THE MOU DATED 22.01.2008 HAVE BEEN FURTHER REITERATED IN TH IS DOCUMENT. THIS DOCUMENT IS ALSO HOWEVER UNSIGNED. 7. AS PER ONE MORE DOCUMENTS SEIZED AS PER DNB-1, A-9, P-168 (NOW MARKED AS ANNEXURE-F), DETAIL OF PAYMENTS MADE FOR THIS LAND IS NOTED UNDER THE HEADING ACCOUNTS OF SH. SURJIT SIN GH. AS PER IT TOTAL PAYMENTS OF RS. 11,94,37,570/- HAS BEEN WORKED OUT. AFTER MAKING CERTAIN DEDUCTIONS THE BALANCE IS STRUCK AT RS. 11, 67,73,370/-. 8. AS PER DOCUMENT DNR, A-4, P-1&2 (NOW MARKED AS ANNEXURE- G), FOUND FROM THE RESIDENCE OF THE ASSESSEE SEVERA L PAYMENTS IN THE NAME OF SH. SURJIT SINGH HAVE BEEN NOTED. 9. AS PER CERTAIN DOCUMENTS FOUND AND SEIZED DURING SEARCH AS DNB-1, A-1 & A-2 WHICH ARE COPIES OF VARIOUS AGREE MENTS TO SELL, AS PER WHICH SH. SURJIT SINGH AND SH. BALJINDER SINGH HAVE PURCHASED THE LAND FROM VARIOUS PERSONS IN THEIR OWN NAME OR IN THE NA ME OF THEIR WIVES, AMARJIT KAUR AND RAJWINDER KAUR. THE DETAILS OF THE SE AGREEMENTS TO SELL WERE PART OF ASSESSMENT ORDER AS ANNEXURE-A (N OW MARKED AS ANNEXURE H). 10. ASSESSEE HAS FINALLY SHOWN TO HAVE PURCHASED TH E ABOVE LAND (AS PER REGISTRATION DEEDS SEIZED AS DNB-1, A-9 AND A-10 ), FROM SURJIT SINGH AND BALJINDER SINGH OR THEIR WIVES AS POWER O F ATTORNEY HOLDER. THE KHASRA NUMBERS ARE SAME AS MENTIONED IN THE AGR EEMENTS TO SELL AS PER ABOVE PARA BUT THE RATES AS PER THESE REGISTRA TION DEEDS ARE MUCH LOWER THAN THE RATE AS PER THE MOU DATED 22-01-2008 OR THE RATES AS PER THE AGREEMENTS TO SELL AS MENTIONED IN ABOVE PA RA (NOW MARKED AS ANNEXURE-I). 11. THUS RELYING UPON THE ABOVE DOCUMENTS AND THE FACTS EMANATING FROM THEM, THE AO WAS OF THE OPINION THAT ASSESSEE HAS PURCHASED THE ENTIRE LAND FOR RS. 11,94,37,570/- BUT HAS CLAIMED TO HAVE PAID ONLY RS. 2,38,03,500/- AS COST AND RS, 19,00,140/- TOTALING RS. 2,57,03,640/- AS REGISTRATION CHARGES AS PER THE REGISTRATION DEEDS OF THE SAME LAND. HE CONCLUDED THAT AN AMOUNT OF RS. 9,37,33,930/- HAS B EEN PAID FOR THE PURCHASE OF LAND OUT OF UNEXPLAINED SOURCES. 12. THE LAND MEASURING 103 KANAL 14 MARLAS WAS PURC HASED IN 3 YEARS RELATING TO ASSESSMENT YEARS 2009-10 , 2010-1 1 & 2011-12 AND ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 34 ACCORDINGLY THE UNACCOUNTED PAYMENT WAS DIVIDED IN EACH YEAR ON THE PROPORTION OF LAND PURCHASED IN THESE YEARS, AS PER DETAILS GIVEN BELOW :- SR.NO. LAND PURCHASED LAND PURCHASED DURING THE A. Y. UNACCOUNTED AMOUNT INVOLVED FOR PURCHASE OF PROPERTY. 1 35 KANAL 2 MARLAS 2009 - 10 RS.3,12,44,640/ - 2. 31 KANAL 13 MARLAS 2010 - 11 R S.2,81,20,180/ - 3. 37 KANAL 4 MARLAS 2011 - 12 RS.3,43,69,110/ - TOTAL RS.9,37,33,930/ - 13. ACCORDINGLY, ASSESSMENTS U/S 153A R.W.S. 143(3) WERE COMPLETED ON 21.03.2014 AND TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS.3,12,44,640/-, 2,81,20,180/- & RS. 3,59,83,500/- FOR THE ASSESSMENT YEAR 2009-10, 2010-11 & 2011-12 AS AGAINST NIL INCO ME SHOWN IN THE ASSESSMENT YEAR 2009-10 & 2010-11 AND RETURNED INCO ME OF RS.16,14,390/- FOR THE A.Y 2012-13, AS DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. 14.1 ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A)-5, LUDHIANA AGAINST THE ASSESSMENT ORDERS. BEFORE THE CIT(A), ASSESSEE CLAIMED THAT THE MOU DATED 22-01-2008 WAS REJECTED AS THE RATES QUOT ED BY THE VENDOR WERE TOO HIGH. ASSESSEE ALSO CLAIMED THAT THE QUOTE D RATES WERE INCLUSIVE OF THE LIABILITY ON THE PART OF THE BROKE RS TO OBTAIN CLU FROM PUDA I.E., CHANGE OF LAND USE FOR COMMERCIAL PURPOS E, WHICH COULD NEVER BE OBTAINED BY THE BROKERS. IN ITS CLAIM, AN AFFIDA VIT FROM SH. SURJIT SINGH DATED 12-12-2013 WAS RELIED UPON WHEREBY IT WAS CLA IMED THAT SURJIT SINGH HAD TESTIFIED THAT THE MOU WAS NOT EXECUTED A ND THAT RATES IN THE ABOVE MENTIONED MOU WERE QUOTED AND OFFERED FOR COM MERCIAL APPROVED LAND AND THAT ALL THE COST FOR OBTAINING T HE APPROVALS FOR CHANGE IN LAND USE (CLU) AND BUILDING PLANS SANCTIO NED FROM APPROPRIATE AUTHORITIES WOULD HAVE BEEN PAID AND BO RNE BY THE BROKERS. HOWEVER, NO SUCH CLAUSE WAS GIVEN IN THE MOU. IN FA CT AS PER THE PARA 1 OF THE MOU THE SECOND PARTY AFTER SIGNING TH E MOU WAS FREE TO PREPARE, SUBMIT AND OBTAIN SANCTIONS OF THE PLAN , CHANGE OF LAND USE, LICENSE FOR CONSTRUCTION OF THE PROJECT FROM S TATUTORY AUTHORITIES IN ITS OWN NAME. NOWHERE IN THE MOU, SU CH LIABILITY HAS BEEN DWELLED UPON THE BROKERS. MOREOVER, NO EVIDEN CE WAS PRODUCED BY THE ASSESSEE THAT ANY CLU WAS APPLIED B Y THE BROKERS FROM PUDA ON BEHALF OF THE ASSESSEE COMPANY. 14.2 ASSESSEE FURTHER CLAIMED BEFORE CIT(A) THAT TH E AGREEMENTS TO SELL RELIED UPON BY THE AO WERE UNREGISTERED IKRAAR NAAMAS AND WERE GENERALLY MANIPULATED BY THE BROKERS TO JUSTIFY THE HIGHER PRICES QUOTED BY THEM. IT WAS FURTHER CLAIMED THAT THESE RATE AS PER THREE OF THE AGREEMENTS TO SELL WERE SO INFLATED THAT THEY WERE EVEN HIGHER THAN THE RATE QUOTED IN THE MOU. HOWEVER, IT IS QUITE LOGICAL THAT WHEN SUCH A LARGE CHUNK OF LAND HAS TO BE PURCHASED, CERTAIN PI ECES OF LAND ARE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 35 BOUGHT AT UNPLEASANT PRICES WHICH ARE QUITE HIGHER THAN THE REST OF THE LAND. THIS IS SOMETIMES DUE THE LOCATION OF THE LAND AND AT TIMES BECAUSE OF THE FACT THAT THE SELLERS HAVE REA LIZED THAT THE BUYERS CANNOT AFFORD NOT TO PURCHASE THEIR LAND FOR WANT OF CONTINUITY OF THE LARGER PIECE OF LAND. THUS THIS P UTS THEM INTO A BETTER BARGAINING POSITION. EVEN ASSESSEE HAS ALSO PURCHASED 17 MARLAS OF LAND AT A RATE WHICH IS ALMOST THREE TIME S THE RATE OF REST OF THE LAND (REGISTRATION DEED AT SR. NO. 5 OF THE ANNEXURE B TO THE ASSESSMENT ORDER). 15.1 HOWEVER, AGREEING WITH THE ARGUMENTS OF THE A SSESSEE, CIT(A) HAS DELETED THE ENTIRE ADDITION OF RS. 9,37,33,930/ - SPREAD OVER ALL THE THREE YEARS. AS PER THE CIT(A), BOTH THE MOU DATED 22-01-2008 AND 18- 03-2008 ARE UNSIGNED AND CANNOT BE RELIED UPON AS A N EVIDENCE. AS PER CIT(A), MOU DATED 22-01-2008 IS UNSIGNED BUT IS A S TARTING POINT FOR THE AO. HOWEVER, SINCE THE SECOND MOU DATED 18-03-2008 IS ALSO UNSIGNED THEREFORE IT CANNOT LEND ANY CREDENCE TO THE 1 ST MOU. 15.2 HE HAS ALSO DISCUSSED THE DOCUMENT AT PAGE NO . 168, A-9, DNB- 1 (NOW MARKED AS ANNEXURE F) WHEREON AGGREGATE PAYM ENTS OF RS. 11,94,37,570/- HAVE BEEN RECORDED AND HAVE BEEN HEL D BY THE AO TO BE CORROBORATING WITH THE SALE CONSIDERATION RECORDED ON MOU AMOUNTING TO RS. 11.55 CR. CIT(A) HAS HELD THAT THE PAYMENTS ON THIS DOCUMENT HAVE BEEN RECORDED FOR IN THE BOOKS OF ACCOUNTS AS SUBSTANTIAL PAYMENTS OUT OF THE SAME HAVE BEEN MADE TO SPECIFIC PARTIES THROUGH CHEQUES AND THE SAME HAS BEEN VERIFIED BY THE AO DURING REMAND PROCEEDINGS. THEREFORE THIS DOCUMENT DOES NOT GIVE ANY SUPPORT T O AOS VIEW OF PURCHASE CONSIDERATION BEING 11.55 CR. 15.3 SIMILARLY HE HAS REJECTED THE AOS CONTENTION WITH REGARD TO DOCUMENT AS PER PAGES 1 & 2 OF A-2, DNR (NOW MARKED AS ANNEXURE G) WHICH RECORDS VARIOUS PAYMENTS TO SH. SURJIT SINGH FOR THE REASON THAT ALL THESE PAYMENTS HAVE BEEN FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND VERIFIED DURING REMAND PROCEEDINGS BY THE AO. 15.4 AS REGARDS THE AGREEMENTS TO SELL (IKRAAR NAMA S) RELIED UPON BY THE AO WHICH WERE SEIZED AS A-1 AND A-2 OF DNB-1 (N OW MARKED AS ANNEXURE H), CIT(A) HAS AGREED TO THE CLAIM OF THE ASSESSEE THAT THESE HAVE BEEN WRONGLY RECORDED AS SALE DEEDS BY THE AO. CIT(A) HAS HELD THAT THERE IS ENOUGH EVIDENCE AS PER WHICH THESE IK RAAR NAMAS ENTERED INTO BETWEEN THE BROKERS SH. SURJIT SINGH AND OTHER S AND THE ORIGINAL OWNERS OF LAND ARE COLLUSIVE IN NATURE TO HOLD THE ASSESSEE TO AGREE TO UNUSUALLY HIGH PRICE OF LAND FOR PURCHASE AND HAD B EEN SUBMITTED BY THE BROKERS ALONGWITH UNSIGNED COPY OF THE MOU. IT HAS BEEN AGREED UPON BY THE CIT(A) THAT ON REALIZING THE HIGH PRICE QUOT ED IN MOU THROUGH SUCH IKRAAR NAMAS, THE ASSESSEE DECIDED NOT TO SIGN THE MOU. IT WAS ALLEGED BY THE ASSESSEE AND AGREED UPON BY THE CIT( A) THAT THESE IKRAARNAMAS WERE PREPARED IN SUCH A HASTE THAT THRE E OF THEM PERTAINING TO 34 KANALS OF LAND OUT OF 103 KANALS H AVE QUOTED PRICES ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 36 MUCH HIGHER THAN THE PRICE QUOTED IN THE MOU. THUS CIT(A) HAS REJECTED THE IKRAAR NAMAS AS VALID SUPPORT IN FAVOUR OF THE AO. 15.5 FINALY CIT HAS REFERRED TO CERTAIN JUDGMENTS I N ORDER TO HOLD THAT THE ADDITION MADE BY THE AO CANNOT SUSTAIN ON THE MERE PRESUMPTION THAT CONSIDERATION OF RS. 11.55 CR HAS BEEN PAID BY THE ASSESSEE. HENCE HE DELETED THE ENTIRE ADDITION OF R S. 9,37,33,930/- SPREAD OVER A. Y. 2009-10 TO 2011-12. 16. THE LD.CIT(A), HAS ERRED IN HOLDING THAT THE DO CUMENTS FOUND AT THE TIME OF SEARCH DO NO ESTABLISH THE PAYMENT OF U NACCOUNTED MONEY FOR THE PURCHASE OF LAND AND THESE ARE NOT ADMISSIB LE AS EVIDENCE. WHILE HOLDING SO, FOLLOWING FACTS HAVE BEEN IGNORED WHICH CLEARLY ESTABLISH THAT THE DOCUMENTS RELIED UPON BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS CORROBORATE WITH EACH OTHER TO SHOW THAT UNACCOUNTED MONEY HAS BEEN TRANSFERRED TO SH. SURJI T SINGH IN LIEU OF PURCHASE OF LAND THROUGH HIM. I. CIT(A) HAS IGNORED DNB-1, A-2, PAGE -72 (NOW MARKED AS ANNEXURE-B) WHICH IS A SCHEDULE OF PAYMENTS MADE A GAINST 1ST MOU WHEREIN PAYMENTS OF RS. 1,50,00,000/- THROUGH CHEQU ES HAS BEEN PAID TO VARIOUS PERSONS FROM THE PERIOD 21-10-2007 TO 21-01 -2008 AND CASH OF RS. 25,00,000/- HAS ALSO BEEN PAID AGGREGATING TO R S. 1.75 CRORES WHICH IS EXACTLY AS PER THE AMOUNT OF ADVANCE MENTIONED I N MOU EQUIVALENT TO 15% OF THE AMOUNT. MOREOVER, MOST OF THE PAYMENTS H AVE BEEN MADE PRIOR TO THE DATE OF 1ST MOU WHICH ALSO CORROBORATE S WITH THE TERMS OF THE MOU. IT IS PERTINENT TO MENTION THAT NAMES MENT IONED ON THESE DOCUMENTS ARE SAME AS PER IKRAARNAMAS DETAILS OF WH ICH HAVE BEEN RECORDED ON ANNEXURE-A TO ASSESSMENT ORDER (NOW MAR KED AS ANNEXURE H). ASSESSEE HAS WRONGLY ALLEGED THAT THESE AMOUNT S HAVE BEEN PAID TO SH. SURJIT SINGH AS ADVANCE FOR OBTAINING CLU IN HI S REPLY (NOW MARKED AS ANNEXURE-J) TO DOCUMENT 168, A-9, DNB-1 (NOW MARKED AS ANNEXURE F). THESE PAYMENTS HAVE BEEN PAID BY CHEQ UE AND HAVE GONE TO THE ORIGINAL OWNERS OF LAND WHOSE NAMES HAVE BEE N MENTIONED ON THE IKRAARNAMAS AS PER ANNEXURE-A TO ASSESSMENT ORDER ( NOW MARKED AS ANNEXURE H). THESE PAYMENTS CANNOT BE ADVANCE MADE TO SURJIT SINGH FOR OBTAINING CLU. THIS DOCUMENTS SHOWS THAT THE AD VANCE EQUIVALENT TO 15% OF THE GROSS AMOUNT MENTIONED ON 1 ST MOU HAS BEEN PAID DIRECTLY TO THE ORIGINAL LAND OWNERS FROM WHOM THE LAND HAS TO BE PURCHASED. II. SIMILARLY CIT(A) HAS IGNORED DOCUMENT DNB-1, A-2, PAGE-75 (NOW MARKED AS ANNEXURE-C) ON WHICH AMOUNT OF ADVAN CE TO BE PAID TO THE LAND OWNERS HAS BEEN CALCULATED @ 15% OF THE G ROSS PAYMENT AS PER TOTAL SQ. YARDS @ RS. 2310/- PER SQ. YARD. THE AGGREGATE AMOUNT OF ADVANCE WORKED OUT IS EXACTLY 1.75 CRORES. IT IS PE RTINENT TO MENTION THAT IN THE 9 IKRAARNAMAS, ALL THESE PERSONS WHOSE NAMES ARE MENTIONED ON THIS DOCUMENT, ARE THE CO-OWNERS OF TH E LAND. THE ASSESSEE HAS ADMITTED IN HIS SUBMISSIONS BEFORE THE CIT(A) T HAT THIS AMOUNT HAS BEEN ENTERED IN THE BOOKS OF ACCOUNTS, BUT HAS CLAI MED THAT IT IS ADVANCE PAID TO SH. SURJIT SINGH FOR OBTAINING CLU FROM PUD A. HOWEVER, IF THIS ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 37 DOCUMENT IS EXAMINED IN LIGHT WITH THE NAMES MENTIO NED ON IKRAARNAMAS AND ALSO AS PER SCHEDULE OF PAYMENT REC ORDED IN DNB-1, A-2, PAGE -72 (NOW MARKED AS ANNEXURE-B), THE SAME CANNOT BE AN ADVANCE FOR CLU BUT ADVANCE PAID TO ORIGINAL LAND O WNERS @ 15% OF THE RATE FIXED AS PER 1 ST MOU. III. CIT(A) HAS ALSO IGNORED DOCUMENT DNB-1, A-9, PAGE-45 (NOW MARKED AS ANNEXURE-D) ON WHICH DETAILS OF ALL THE K HASRA NO. HAS BEEN RECORDED ALNGWITH DETAILS OF AREA OF LAND IN KANALS AND MARLAS / SQ YARDS AGAINST EACH KHASRA. IT IS ALSO RECORDED THAT IT IS A CORRECTED SCHEDULE AS PER MUTUAL DISCUSSION IN CONTINUATION O F MOU DATED 22-01- 2008. THE AGGREGATE SQ. YARDS AS PER THIS DOCUMENTS ARE 50075 WHICH IS AS PER THE TERMS OF MOU. HENCE IT IS NOT ACCEPTABLE THAT THERE HAS BEEN NO EFFORTS TO EXECUTE THE MOU AND IT WAS REJECTED B Y THE PARTIES FOR EXORBITANT RATES QUOTED BY THE BROKER AND ALSO FOR WANT OF CLU FROM PUDA. IV. IN FACT THE 2 ND MOU DATED 18-03-2008 DNB-1, A-1, P-133-138 (NOW MARKED AS ANNEXURE-E) IS THE TESTIMONY TO THE FACT THAT THE AGREEMENT BETWEEN THE TWO PARTIES HAS BEEN EXECUTED . THIS DOCUMENT CLEARLY RECORDS THAT THE TERM AND CONDITION OF THE 1 ST MOU HAVE BEEN COMPLIED WITH AND THAT NOW THE FIRST PARTY SHALL TR ANSFER THE LAND DESCRIBED IN THAT DOCUMENT TO THE SECOND PARTY. IN FACT, THE LAND PURCHASED BY THE ASSESSEE THROUGH THE REGISTRATION DEEDS AS PER A-9 & A-10 DNB-1 (NOW MARKED AS ANNEXURE-I) HAS ACTUALLY BEEN PROCURED THROUGH THE SAME BROKERS OR THEIR FAMILY MEMBERS AS P.O.A. HOLDERS. V. FURTHER, THE PERUSAL OF DOCUMENT 168, A-9, DNB-1 (NOW MARKED AS ANNEXURE F) REVEALS THAT IT BEARS A HEADING ACCOUNTS OF SHRI SURJIT SINGH . THEREAFTER, THERE IS A SUB-HEADING CASH BEFORE 4 ACRES WHEREUNDER DETAILS OF AGGREGATE EXPENSES/ PAYMENTS OF RS. 4.08 CRORES HAVE BEEN RECORDED. THEN THERE IS ANOTHER SUBHEADIN G CASH FOR 7 ACRES WHEREUNDER DETAILS OF EXPENSES / PAYMENTS AGGREGA TING TO RS. 7,86,50,774/- HAVE BEEN RECORDED. ALL THESE HEADING S CLEARLY SUGGEST THAT THIS DOCUMENTS HAS BEEN PREPARED TO RECORD THE DETAILS OF PAYMENTS TO/ THROUGH SH. SURJIT SINGH IN RESPECT OF 11 ACRES OF LAND, WHICH IS APPROXIMATE AREA OF LAND PURCHASED BY THE COMPANY. ASSESSEE HAS VIDE ITS EXPLANATION HAS FILED REPLY (NOW MARKED AS ANNE XURE-J) EXPLAINING EACH ENTRY AND HAS SUBMITTED THE FOLLOWING SUMMARY WHICH HAS ALSO BEEN MADE PART OF THE HIS ORDER BY THE LD. CIT(A) A T PAGE 42 OF HIS ORDER:- PARTICULARS AMOUNT REMARKS 1. PAYMENTS FOR LAND PURCHASE AMRITSAR 23282036/- (*) RS. 2421504/- INCURRED ON REGISTRATION & OTHER EXPS AND HENCE THE TOTAL AMOUNT COME TO RS. 25703540/- 2. ADVANCE TO SURJIT SINGH FOR CLU 27611856/- (#) ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 38 3. ADVANVE TO SURJIT SINGH & OTHERS FOR CLU 17500000 (@) RS. 1864334 INCURRED ON EARTH PURCHASED ON VARIOUS DATES & DEBITED TO THE ACCOUNT OF ADVANCE PAID FOR LAND AMRITSAR. HENCE FINAL BALANCE COMES TO RS. 19364334/-. KINDLY REFER ADVANCE FOR LAND AMRITSAR ACCOUNT LYING IN DCIT RECORDS) 4. ADVANCE TO GURPARTAP SINGH 2000000 5. ADVANCE TO PRAKASH SINGH 5000000 6. ADVANCE TO SS STEEL FOR LAND 14044400 7. SECURITY TO PRAKSH SHUTTERING 5000000 8. AMOUNT INCURRED FOR CIVIL WORK- WIP 19995692 ($) 9. AMOUNT INCURRED FOR LAND DEVELOPMENT 1517250 10. AMOUNT PAID TO SAROVAR PORTICO 1500000 11. IMPRESSED TO AMBIKA SHARMA (DIRECTOR) 2000000 TOTAL 119451228 (*) IN FACT IT IS ONLY RS. 2,29,82,036/- (#) IN FACT IT IS RS. 2,79,11,856/- AND INCLUDES RS. 2, 42,50,000/- ON ACCOUNT OF SURRENDER MADE BY SH. NARESH SABHARWAL D IRECTOR IN THE A. Y. 2012-13, IN SPITE OF THE FACT THAT PAYMENTS HAVE BE EN SHOWN TO HAVE BEEN MADE IN THE F. Y. 2010-11. THERE IS NO CLAUSE FOR OBTAINING CLU IN THE 1 ST AND 2 ND MOU. (@) IN FACT THIS PAYMENT HAS BEEN MADE TO VARIOUS PARTI ES THROUGH CHEQUES FOR RS. 1.50 CRORES PLUS RS. 25 LAKHS IN CA SH AS PER NOW ANNEXURE B. THERE IS NO CLAUSE FOR OBTAINING CLU I N THE 1 ST AND 2 ND MOU. ($) INCLUDES RS. 7.5 LAKHS ON ACCOUNT OF SURRENDER MADE BY SH. NARESH SABHARWAL DIRECTOR IN THE A. Y. 2012-13, INSPITE OF THE FACT THAT PAYMENTS HAVE BEEN SHOWN TO HAVE BEEN MADE IN THE F . Y. 2009-10. LD CIT(A) HAS AGREED TO THE CONTENTIONS OF THE ASSE SSEE, RELYING UPON THE ABOVE CHART AND THE ACCOMPANYING REPLY, THAT MOST O F THE PAYMENTS/ EXPENSES ABOVE ARE MADE THROUGH CHEQUES AND ARE ENT ERED IN BOOKS OF ACCOUNTS. CIT(A) HAS HELD IN VIEW OF THE SAME THAT THIS DOCUMENT DOES NOT HELP THE CASE OF THE AO THAT ASSESSEE HAS NOT P AID ANY AMOUNT OTHER THAN AMOUNTS AS PER REGISTRATION DEEDS OF LAND. HO WEVER, FOLLOWING HAS NOT BEEN CONSIDERED BY THE LD. CIT(A):- A. THE AMOUNT OF RS. 2,76,11,856/- AS PER COL. 2 AB OVE AND RS. 1,75,00,000/- AS PER COL.3 ABOVE HAS BEEN CLAIMED T O BE GIVEN TO SH. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 39 SURJIT SINGH AS ADVANCE FOR ARRANGING CLU FROM PUDA FOR COMMERCIAL USE OF THE LAND. IT HAS ALSO BEEN ALLEGED THAT SINC E SH. SURJIT SINGH HAS NOT BEEN ABLE TO OBTAIN CLU, THAT WAS ONE OF THE RE ASONS FOR REJECTING MOU. ASSESSEE ALSO CLAIMED THAT THE QUOTED RATES WE RE INCLUSIVE OF THE LIABILITY ON THE PART OF THE BROKERS TO OBTAIN CLU FROM PUDA I.E., CHANGE OF LAND USE FOR COMMERCIAL PURPOSE, WHICH COULD NEV ER BE OBTAINED BY THE BROKERS. IN ITS CLAIM, AN AFFIDAVIT FROM SH. SU RJIT SINGH DATED 12-12- 2013 WAS RELIED UPON WHEREBY IT WAS CLAIMED THAT SU RJIT SINGH HAD TESTIFIED THAT THE MOU WAS NOT EXECUTED AND THAT RA TES IN THE ABOVE MENTIONED MOU WERE QUOTED AND OFFERED FOR COMMERCIA L APPROVED LAND AND THAT ALL THE COST FOR OBTAINING THE APPROVALS F OR CHANGE IN LAND USE (CLU) AND BUILDING PLANS SANCTIONED FROM APPROPRIAT E AUTHORITIES WOULD HAVE BEEN PAID AND BORNE BY THE BROKERS. HOWE VER, NON OBTAINING OF CLU CANNOT BE A GROUND FOR REJECTING MOU BECAUSE THERE IS NO CLAUSE IN THE TERM AND CONDITIONS RECORDED IN THE MOU. NO WHERE IN THE 1 ST AND 2 ND MOU, IT HAS BEEN MENTIONED THAT FIRST PARTY WILL P ROCURE CLU FROM PUDA AS A PRE CONDITION. IN FACT AS PER THE PARA 1 OF THE MOU THE SECOND PARTY AFTER SIGNING THE MOU WAS FREE TO PREP ARE, SUBMIT AND OBTAIN SANCTIONS OF THE PLAN, CHANGE OF LAND US E, LICENSE FOR CONSTRUCTION OF THE PROJECT FROM STATUTORY AUTHORIT IES IN ITS OWN NAME. NOWHERE IN THE MOU, SUCH LIABILITY HAS BEEN D WELLED UPON THE BROKERS. MOREOVER, NO EVIDENCE WAS PRODUCED BY THE ASSESSEE THAT ANY CLU WAS APPLIED BY THE BROKERS FROM PUDA O N BEHALF OF THE ASSESSEE COMPANY. THEREFORE, LD CIT(A) HAS ERRED WHILE ACCEPTING THE CLAIM OF THE ASSESSEE THAT RS. 2,76,11,856/- WE RE PAID TO SH. SURJIT SINGH AS ADVANCE TO PROCURE CLU FROM PUDA. INFACT, THIS IS AN AFTERTHOUGHT AND SINCE SH. SURJIT SINGH IS PARTY TO THE PAYMENT OF MONEY IN EXCESS OF THE REGISTRATION DEEDS, IT IS QUITE OB VIOUS THAT HE IS IN HELP OF THE ASSESSEE TO CONCOCT THE STORY. ALTHOUGH SOME PART OF THIS AMOUNT HAS BEEN RECORDED IN BOOKS OF ACCOUNTS AND HAS BEEN PAID THROUGH BANKING CHANNELS BUT IT DOES NOT NEGATE THE FACT THAT AMOUNT IN EXCESS OF THE AMOUNT S AS PER REGISTRATION DEEDS OF LAND HAS BEEN PAID BY THE ASSESSEE COMPANY , THEREBY LENDING CREDENCE TO THE EVIDENTIARY STATUS OF THE UNSIGNED MOU. B. IT IS PERTINENT TO MENTION HERE THAT AMOUNT OF R S. 2,76,11,856/- INCLUDES CASH PAYMENT OF RS. 2,42,50,000/- WHICH HA S BEEN SHOWN TO HAVE PAID DURING THE F. Y. 2010-11, HAS BEEN CLAIME D TO HAVE BEEN SURRENDERED BY SH. NARESH SABHARWAL AND INVESTED IN COMPANY AS SHARE APPLICATION MONEY DURING THE F. Y. 2011-12 AS UNEXP LAINED PAYMENT. THE MERE FACT THAT UNEXPLAINED PAYMENTS WERE MADE T O SH. SURJIT SINGH IS A CLEAR EVIDENCE THAT EXCESS MONEY HAS BEEN PAID TO THE BROKERS FOR PURCHASE OF LAND AND THAT THE UNSIGNED MOU IS NOT M ERELY A REJECTED PIECE OF DOCUMENT WITHOUT ANY EVIDENTIARY IMPORTANC E. FURTHER ASSESSEE HAS CLAIMED THAT SINCE THE AMOUNT OF RS. 2,42,50,00 0/- HAS BEEN PUT TO TAXATION WITH THE SURRENDER, IT CANNOT BE ADDED DUR ING ASSESSMENT. THIS ARGUMENT OF THE ASSESSEE HAS ALSO BEEN ACCEPTED BY THE LD. CIT(A), HOWEVER, HE HAS MISSED THE POINT THAT A PAYMENT MAD E DURING THE F. Y. 2010-11 CANNOT BE SURRENDERED FOR THE F. Y. 2011-12 RELEVANT TO A. Y. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 40 2012-13. THEREFORE, IT CANNOT BE CONSIDERED THAT T HESE PAYMENTS HAVE BEEN PUT TO TAXATION BY THE ASSESSEE. FURTHER ALL THE REGISTRATION DEEDS HAVE BEEN REGIST ERED IN THE F. Y. 2008- 09 AND 2009-10, THEREFORE HOW CAN IT BE ACCEPTED TH AT AN ADVANCE FOR CLU WILL BE PAID IN THE F. Y. 2010-11 AND STILL FUR THER THAT HOW CAN A MOU BE REJECTED IN JANUARY TO MARCH 2008 FOR WANT O F CLU WHEN THE ADVANCE IS STILL BEING PAID IN THE F. Y. 2010-11. T HESE FACT CLEARLY SHOW THAT THE ENTIRE ISSUE OF CLU AND REJECTION OF MOU I S A CONCOCTED STORY BY THE ASSESSEE WITH THE CONNIVANCE OF THE BROKER. C. SIMILARLY, THE AMOUNT OF RS. 1,75,00,000/- AS PE R COL. NO 3 ABOVE CAN ALSO NOT BE CONSIDERED AS ADVANCE FOR OBTAINING CLU. THIS AMOUNT HAS BEEN RECORDED IN DNB-1, A-2, PAGE -72 (NOW MARKED AS ANNEXURE- B) WHERE PAYMENTS HAVE BEEN MADE TO VARIOUS ORIGIN AL OWNERS OF THE LAND CLEARLY AS PER THE TERMS AND CONDITIONS OF THE MOU, BEING 15% OF THE GROSS AMOUNT AS PER MOU. OUT OF RS. 1.75 CR , R S. 1.5 CRORES HAVE BEEN PAID THROUGH CHEQUES AND THE REST OF THE AMOUN T OF RS. 25 LAKHS HAS BEEN PAID IN CASH. AGAIN, THERE IS NO CLAUSE IN THE TERM AND CONDITIONS RECORDED IN THE MOU REGARDING OBTAINING CLU BY THE BROKERS. NO WHERE IN THE 1 ST AND 2 ND MOU, IT HAS BEEN MENTIONED THAT FIRST PARTY WILL PROCURE CLU FROM PUDA AS A PRE CON DITION. INFACT AS PER THE PARA 1 OF THE MOU THE SECOND PARTY AFTER SIGNIN G THE MOU WAS FREE TO PREPARE, SUBMIT AND OBTAIN SANCTIONS OF THE PLAN, CHANGE OF LAND USE, LICENSE FOR CONSTRUCTION OF THE PROJECT F ROM STATUTORY AUTHORITIES IN ITS OWN NAME. NOWHERE IN THE MOU, SU CH LIABILITY HAS BEEN DWELLED UPON THE BROKERS. MOREOVER, NO EVIDEN CE WAS PRODUCED BY THE ASSESSEE THAT ANY CLU WAS APPLIED B Y THE BROKERS FROM PUDA ON BEHALF OF THE ASSESSEE COMPANY. THEREFORE, LD CIT(A) HAS ERRED WHILE ACCEPTING THE CLAIM OF THE ASSESSEE THAT RS. 1.75 CRORES/- WERE PAID TO SH. SURJIT SINGH AS ADVANCE T O PROCURE CLU FROM PUDA. ALTHOUGH THIS AMOUNT HAS BEEN RECORDED IN BOOKS OF ACCOUNTS AND HAS BEEN PAID THROUGH BANKING CHANNELS BUT IT DOES NOT NEGATE THE FACT THAT AMOUNT IN EXCESS OF THE AMOUNTS AS PER REGISTRATION DEEDS OF LAND HAS BEEN PAID BY THE ASSESSEE COMPANY, THEREBY LENDING CREDENCE TO THE EVIDENTIARY STATUS OF THE UNSIGNED MOU. D. AS PER COL 4 & 5 PAYMENTS OF RS. 20 LAKHS AND 50 LAKHS HAVE BEEN MADE TO SH. GURPARTAP SINGH AND SH. PARKASH SINGH R ESPECTIVELY AS ADVANCE. SH. GURPARTAP SINGH S/O SH. SHAMSHER SINGH S/O SH. JOGINDER SINGH R/O VILL. SULTANWIND ASR, SH. PARKASH SINGH A ND SH. BALJIT SINGH BOTH S/O OF SH. JOGINDER SINGH, R/O VILL. SULTANWIN D ASR ARE MEMBERS OF THE SAME FAMILY. TOTAL LAND PURCHASED FROM THESE TH REE PERSONS BEING PART OF LAND PURCHASED VIDE TWO REGISTRATION DEEDS ALONGWITH OTHER PERSONS IS 3 K- 12 M AND 8K-13 M TOTALING 12 K- 1M I.E., AROUND 6000 SQ YARDS (DEEDS MENTIONED AT SR. NO. 2 AND 7 OF ANNEX URE B TO ASSESSMENT ORDER). AS PER THE RATE OF LAND MENTIONED IN THESE TWO DEEDS TOTAL PAYMENT TO THESE THREE PERSONS SHOULD BE RS. 27,00, 000/- (6000 X450 = ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 41 27,00,000), WHEREAS THEY HAVE BEEN PAID AROUND RS. 1,31,00,000/- PLUS CASH OUT OF RS. 25 LAKHS AS PER DNB-1, A-2, PAGE -72 (NOW MARKED AS ANNEXURE-B), WHICH IS QUITE AS PER THE RATE OF RS. 2310/- PER SQ YARDS AS PER MOU ( 6000 X 2310 = 1,38,00,000). ALTHOUGH THIS AMOUNT HAS BEEN RECORDED IN BOOKS OF ACCOUNTS AND HAS BEEN PAID THROUGH BANKING CHANNELS BUT IT DOES NOT NEGATE THE FACT THAT AMOUNT IN EXCESS OF THE AMOUNTS AS PER REGISTRATION DEEDS OF LAND HAS BEEN PAID BY THE ASSESSEE COMPANY, THEREBY LENDING CREDENCE TO THE EVIDENTIARY STATUS OF THE UNSIGNED MOU. E. AS REGARDS PAYMENT OF RS. 1,40,44,400/- IN COL N O. 6 ABOVE, SHOWN TO HAVE BEEN PAID TO S. S. STEEL AS ADVANCE A GAINST LAND AT ASR, ASSESSEE HAS NOT EXPLAINED AS TO WHY ADVANCE TO S. S. STEEL HAS BEEN PAID AS ADVANCE AGAINST PURCHASE OF LAND. IT HAS NO WHER E BEEN EXPLAINED THAT WHO IS THE OWNER OF S. S. STEEL AND HOW IS HE RELATED TO THE LAND DEAL AND ON WHAT ACCOUNT THIS ADVANCE HAS BEEN PAID. PRI MA FACIE IT ALSO APPEARS TO BE AN AFTERTHOUGHT TO DISCREDIT THE AUT HENTICITY OF THIS DOCUMENT BY SHOWING THAT THESE PAYMENTS HAVE BEEN R ECORDED IN BOOKS OF ACCOUNTS AND SUCH CANNOT BE SUPPORT TO AO IN MAK ING THE IMPUGN ADDITION IN THIS CASE. EVEN IF THE CLAIM OF THE ASS ESSEE IS ACCEPTED, FOR ARGUMENT SAKE, STILL THE FACT REMAINS THAT THESE AD VANCES WERE PAID IN EXCESS OF THE AMOUNT AS PER REGISTRATION DEEDS AT T HE SAME TIME WHEN LAND WAS PURCHASED THROUGH REGISTERED SALE DEED. F. THEREFORE FROM THE ABOVE FACTS IT IS QUITE CLEAR THAT ALTHOUGH NOT ALL THE PAYMENTS RECORDED IN THIS DOCUMENT 168, A-9, DNB-1 (NOW MARKED AS ANNEXURE F) ARE MADE IN CONNECTION WITH THE PURCHASE OF LAND AND ALSO THAT SOME OF THEM HAVE BEEN THROUGH C HEQUES AND RECORDED IN BOOKS OF ACCOUNTS, YET IT CAN BE CLEARL Y INFERRED FROM THIS DOCUMENT THAT ASSESSEE HAS MADE PAYMENTS IN EXCESS OF AMOUNT AS PER REGISTERED DEEDS AND THAT THE UNSIGNED MOU IS A VAL ID PIECE OF EVIDENCE IN THIS REGARD. VI. FURTHER A-1 & A-2, DNB-1, (NOW MARKED AS ANNEXU RE H) HAS BEEN REJECTED BY THE LD. CIT(A) WHICH IS COPIES OF AGREEMENT TO SELL AS BEING COLLUSIVE IN NATURE AND SUBMITTED BY THE BROK ERS ALONGWITH COPY OF MOU TO HOLD THE ASSESSEE TO AGREE TO UNUSUALLY H IGH PRICE OF LAND FOR PURCHASE. HOWEVER, LD CIT(A) HAS MISSED THE VITAL P OINT THAT THESE AGREEMENT TO SELL WHEREIN RECEIPT OF ADVANCE FROM B ROKERS BY THE LAND OWNERS HAVE BEEN RECORDED AND ARE SIGNED BY THE SAM E PERSONS WHO ARE THE OWNER OF THE LAND. IT IS BEYOND COMPREHENSION T HAT SO MANY OWNERS WILL PUT THEIR SIGNATURES ON A FAKE AGREEMENT TO SE LL WHICH IS PREPARED ON A STAMP PAPER, WHICH BEARS THE EXACT DETAILS OF THEIR LAND AND ALSO HAS DETAILS OF ADVANCE HAVING RECEIVED BY THEM. NO NORMAL OWNER OF LAND WILL GIVE HIS SIGNATURE ON SUCH A DOCUMENT JUS T TO FACILITATE A PERSON WHO IN THEIR OWN KNOWLEDGE IS USING THE SAME DOCUMENT TO FRAUD A THIRD PERSON. IT WILL DEFINITELY BE CONSIDERED TH AT ONE WHO CAN DECEIVE A THIRD PERSON CAN EASILY DECEIVE THEM. THEREFORE, WHILE REJECTING THE SAID AGREEMENTS TO SELL WITHOUT CONSIDERING THE LD. CIT(A) HAS ERRED IN ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 42 THIS REGARD. THE AUTHENTICITY OF THESE AGREEMENTS T O SELL SEEMS GENUINE IN VIEW OF THE PAYMENTS MADE TO SH. PARKASH SINGH, BALJIT SINGH AND SH. GURPARTAP SINGH AS DISCUSSED ABOVE IN PARA V(D) ABO VE. IT WAS FURTHER HELD THAT THE RATES AS PER THREE O F THE AGREEMENTS TO SELL WERE SO INFLATED THAT THEY WERE EVEN HIGHER THAN TH E RATE QUOTED IN THE MOU. HOWEVER, IT IS QUITE LOGICAL THAT WHEN SUCH A LARGE CHUNK OF LAND HAS TO BE PURCHASED, CERTAIN PIECES OF LAND AR E BOUGHT AT UNPLEASANT PRICES WHICH ARE QUITE HIGHER THAN THE R EST OF THE LAND. THIS IS SOMETIMES DUE THE LOCATION OF THE LAND AND AT TIMES BECAUSE OF THE FACT THAT THE SELLERS HAVE REALIZED THAT THE BUYERS CANT AFFORD NOT TO PURCHASE THEIR LAND FOR WANT OF CONTI NUITY OF THE LARGER PIECE OF LAND. THUS THIS PUTS THEM INTO A B ETTER BARGAINING POSITION. EVEN ASSESSEE HAS ALSO PURCHASED 17 MARLA S OF LAND AT A RATE WHICH IS ALMOST THREE TIMES THE RATE OF REST O F THE LAND (REGISTRATION DEED AT SR. NO. 5 OF THE ANNEXURE B T O THE ASSESSMENT ORDER). VII. AS PER DOCUMENTS DNB-1 A-9 (NOW MARKED AS ANNE XURE I), WHICH ARE COPIES OF REGISTERED SALE DEEDS, ASSESSEE HAS PURCHASED SAME LAND FROM THE SAME OWNERS THROUGH SH. SURJIT SINGH OR HIS FAMILY MEMBERS AS POWER OF ATTORNEYS LAND HOLDERS. THE KHA SRA NOS. MENTIONED IN THE REGISTRATION DEEDS ARE THE SAME AS IN THE AGREEMENTS TO SELL AS PER A-1 & A-2, DNB-1(NOW MARKED AS ANNEX URE H), AT THE RATES WHICH ARE MUCH LOWER THAN THE RATES MENTIONED ON THE AGREEMENTS. THE COMPLETE DETAILS OF THESE PURCHASES ARE CONTAINED IN ANNEXURE B TO THE ASSESSMENT ORDER. THE POAS MENTIO NED IN ALL THE REGISTERED DEEDS ARE REGISTERED WITH SUB REGISTRAR, ASR. THIS CLEARLY SHOWS THAT THE BROKER HAS EARLIER PURCHASED THE LAN D FROM OWNERS THROUGH AGREEMENT TO SELL AT HIGHER RATES BUT GOT T HE POAS REGISTERED WITH THE SUB REGISTRAR INSTEAD OF AGREEMENTS TO SEL L IN ORDER TO CONCEAL THE ACTUAL AMOUNTS PAID BY HIM TO THE LAND OWNERS. LATER HE HAS GOT THE SALE DEEDS REGISTERED WITH THE ASSESSEE AT MUCH LOW ER PRICE. HAD A SEARCH NOT TAKEN PLACE, ONLY THE POAS AND THE REGIS TERED SALE DEEDS WOULD HAVE BECOME THE PART OF OFFICIAL REVENUE RECO RD AND NOT THE AGREEMENTS TO SELL WHICH GOT UNEARTHED DUE TO THE S EARCH AND SEIZURE ACTION. VIII. IN VIEW OF THE ABOVE FACTS AND ARGUMENTS, IT IS CLEAR THAT LD CIT(A) HAS ERRED WHILE HOLDING THAT AO HAS INVOKED SECTION 69 MERELY ON PRESUMPTION BASED SURMISES AND CONJUCTURES THAT ASSESSEE HAS MADE PAYMENTS IN ACCORDANCE WITH THE TERMS OF THE MOU. I N FACT, THE DOCUMENTS RELIED UPON BY THE AO CLEARLY SHOW THAT A SSESSEE HAS MADE PAYMENTS IN EXCESS OF THE AMOUNTS MENTIONED IN THE REGISTERED SALE DEED AND IN ALL PROBABILITY AS PER THE TERMS AND CO NDITIONS OF THE MOU. 14. IN ADDITION TO THE ABOVE WRITTEN SUBMISSIONS, LD. CIT-DR FILED PAPER BOOK CONTAINING COPIES OF SEIZED DOCUMENTS INC LUDING MOU ETC., ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 43 WHICH IS PLACED ON RECORD AND MADE DETAILED AND ELABOR ATE ARGUMENTS AND VEHEMENTLY SUBMITTED THAT THE LEARNED CIT(A) HAS N OT CONSIDERED THE PROVISIONS OF SECTION 2(47) OF THE INCOME TAX A CT, 1961 AS WELL AS SECTION 47 OF THE INCOME TAX ACT, 1961 PROPERLY. AS PER SECTION 2(47) OF THE ACT, THE REQUIREMENT OF TRANSFER OF PROPERTY WAS COMPLETED IN FAVOUR OF THE ASSESSEE. FURTHER THE PROVISION OF SE CTION 2(47)(VI) OF THE ACT, READS AS UNDER :- (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EF FECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERT Y. HE ALSO RELIED ON THE DECISIONS OF HONBLE SUPREME C OURT IN THE CASE OF BALBIR SINGH MAINI (2017) 251 TAXMAN 202/398 ITR 53 1 (SC) AND SUBMITTED THAT THE HONBLE SUPREME COURT IN THE SAID CASE HAS OBSERVED THAT OBJECT OF SECTION 2(47)(VI) APPEARS TO BE TO BRING WITHIN THE TAX NET A DE FACTO TRANSFER OF ANY IMMOVABLE PROPERTY. HE HAS ALSO DID NOT THE REBUTTED THE FINDINGS RECORDED BY THE ASSES SING OFFICER. 15. AFTER CONSIDERING THE SUBMISSIONS OF LD. DR AND PE RUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE AO DUR ING THE COURSE OF ASSESSMENT NOTED THAT THE DOCUMENTS FOUND AT THE BUS INESS PREMISES OF M/S HORIZON BUILDCON(P) LTD. PREPARED WITH THE TIT LE 'ACCOUNTS OF SH. SURJIT SINGH' AND ACCORDING TO THIS DOCUMENT TOTAL PAYMENTS TO SH. SURJIT SINGH WAS MADE AT RS. 11,67,73,370/-. DOCUMEN TS MENTIONED AS ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 44 PAGE-72 TITLED AS 'ANNEXURE' ALSO MENTIONED THAT' S CHEDULE OF PAYMENTS MADE AGAINST MOU DATED 22.01.2008 BETWEEN S H. SURJIT SINGH S/O SH. HARJINDER SINGH VILLAGE BHAKAHA HARI S INGH TEHSIL AJANALA, AMRITSAR, S. BALJINDER SINGH S/O SH. NATHA SINGH VILLAGE RAMANA CHAKK AMRITSAR AND M/S HORIZON BUILDCON (P) LT D. FOR THE CLARITY WE WOULD LIKE TO REPRODUCE THE CONTENTS OF A NNEXURE MENTIONED AT PAGE 72 WHICH READS AS UNDER :- ANNEXURE SCHEDULE OF PAYMENTS MADE AGAINST MOU DATED 21 ST JANUARY 2008 BETWEEN SH SURJIT SINGH S/O S.HARJINDER SINGH R/O VILLAGE BHAKHA HARI SINGH, TEHSIL AJNALA, AMRITSAR, S.BALJINDER SINGH S/O S NATHA SINGH R/O VILLAGE-RAM ANNA CHAKK, AMRITSAR AND M/S HORIZON BUILDCON PRIVATE LIMITED. SL.N O. NAME OF PARTY CHEQUE NO. DATE AMOUNT 1. PARKASH SINGH 096851 21.10.07 5,00,000/- 2. PARKASH SINGH 096852 01.12.07 5,00,000/- 3. PARKASH SINGH 096860 07.01.08 2,00,000/- 4. PARKASH SINGH 096866 21.01.08 10,00,000/- 5. SURJIT SINGH 096853 01.12.07 5,00,000/- 6. SURJIT SINGH 096864 07.01.08 5,00,000/- 7. MANJIT KAUR 096855 22.12.07 10,00,000/- 8. AMARJIT KAUR 096856 22.12.07 4,50,000/- 9. JAGIR KAUR 096857 22.12.07 4,50,000/- 10. RAJWINDER KAUR 096858 22.12.07 4,50,000/- 11 BALJIT SINGH 096861 07.01.08 11,00,000/- 12. GURPRATAP SINGH 096862 07.01.08 11,00,000/- 13. HARBANS KAUR 096863 07.01.08 10,00,000/- 14. HARBANS KAUR 096865 21.01.08 40,00,000/- 15. PRITHIPAL SINGH 096867 21.01.08 7,50,000/- 16. CHARANJIT SINGH 096868 21.01.08 7,50,000/- 17. GURMIT SINGH 096869 21.01.08 7,50,000/- TOTAL 1,50,00,000/- 18. CASH 25,00,000/- GRAND TOTAL 1,75,00,000/- SURJIT SINGH BALJINDER SINGH HORIZON BUILDCON PRIVATE LIMITED FURTHER THE ACCOUNTS OF SHRI SURJIT SINGH MENTIONED IN ANNEXURE-4 READS AS UNDER :- ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 45 16. AS PER THESE DOCUMENTS, THE COMPANY HAS MADE PAY MENT OF RS. 1,75,00,000/- THROUGH VARIOUS CHEQUES AND IN CASH AN D VARIOUS OTHER PAYMENTS TO THE ASSESSEE, WHICH ARE INDICATED IN TH E ABOVE ANNEXURES. THEREFORE, IT CANNOT BE RELIED THAT THE MOU SIGNED B Y HIM ON 22/01/2008 HAS NO VALUE BETWEEN THE PARTIES. WE FUR THER NOTED FROM THE ORDER OF THE ASSESSING OFFICER THAT ON THE SUBS EQUENT DEEDS EXECUTED BETWEEN BOTH THE PARTIES WHICH HAS BEEN SIG NED BY BOTH THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 46 PARTIES REFERRING TO THE MOU DATED 22/01/2008. WHEN THESE DOCUMENTS CONFRONTED TO THE ASSESSEE VIDE ORDER SHEET E NTRY DATED 8/3/2016, THE ASSESSEE IN REPLY SUBMITTED THAT THES E ARE UNSIGNED DOCUMENTS AND THEREFORE, DOES NOT HAVE ANY VALUE IN TH E EYES OF LAW. THE PLEA GIVEN BY THE ASSESSEE IS NOT ACCEPTABLE BE ING ENTIRELY BASELESS AND CANNOT BE RELIED UPON. THE CLAIM OF THE ASSESSEE THAT THE MOU DATED 22/01/2008 IS NOT SIGNED AND HAVE NO WEIGHT IN T HE EYES OF THE LAW, IS NOT ACCEPTABLE, DUE TO THE REASONS THAT ON T HE BASIS OF THIS MOU DATED 22/01/2008 THE ASSESSEE FURTHER EXECUTED AN AG REEMENT DEED BETWEEN THE ASSESSEE AND THE COMPANY M/S HORIZON BUI LDCON (P) LTD., WHICH HAS SIGNED BY BOTH THE PARTIES, IN WHICH THE C OMPANY HAS TAKEN CONGNIZANCE OF THIS MOU DATED 22/01/2008. HENCE, IT C ANNOT BE SAID THAT THE UNSIGNED MOU HAS NO WEIGHT IN THE EYES OF L AW WHEN THE PURCHASER AND SELLER HAS TAKEN CONGNIZANCE OF THIS M OU IN THEIR FURTHER TRANSACTION. FURTHER, THE OTHER DOCUMENTS I.E. 'ACC OUNT OF SH.SURJIT SINGH AND SCHEDULE OF PAYMENT', ARE THE DOCUMENTS OF U NACCOUNTED TRANSACTIONS MADE BETWEEN ASSESSEE AND THE COMPANY, W HICH PREPARED ONLY FOR REMEMBERING PURPOSE AND DUE TO THAT REASON, THESE DOCUMENTS HAD NOT BEEN SIGNED BY ANY OTHER PARTY. THE CONTENTION OF THE ASSESSEE THAT THESE UNSIGNED DOCUMENTS HAVE NO WE IGH IN THE EYES OF LAW IS NOT ACCEPTABLE IN VIEW OF THIS FACTUAL PO SITION. ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 47 17. WE ALSO OBSERVED FROM THE ORDER OF THE ASSESSING OFFICER AT PARA NO.2.3 IN WHICH THE SUBMISSIONS OF THE ASSESSEE HAV E BEEN INCORPORATED BY THE ASSESSING OFFICER, WHICH READS AS UNDER :- I WOULD LIKE TO BRING TO YOUR KIND NOTICE THAT DUR ING THE YEAR UNDER CONSIDERATION, I HAD REPRESENTED AS POWER ATTORNEY HOLDER ON BEHALF OF THE VARIOUS FARMERS AS PER DETAILS GIVEN BELOW WHO HAD DIRECTLY SOLD THE LAND AT VILLAGE SULTANWINDER TO M/S HORIZON BUILDCO N(P) LTD. IT IS RESPECTFULLY SUBMITTED THAT IN ADDITION TO BEING A LAND LORD AND PROPERTY CONSULTANT I AM ACTIVE IN PUBLIC LIFE AND I COMMAND RESPECT AMONG FARMER COMMUNITY. THESE FARMERS APPROACHED ME TO OB TAIN CLU AND TO REPRESENT THEM IN ORDER TO PROTECT THEIR INTERESTS. SINCE I WAS NOT ABLE TO ARRANGE THE CLU THEREFORE I ACTED AS THEIR ATTORNEY /AGENT WITHOUT ANY MONETARY BENEFITS. THE PHOTOCOPIES OF THE SOME POWER OF ATTORNEY GIVEN BYFAMERS TO ME AND AS AVAILABLE WITH ME AS ON DATE ARE ENCLOSED HE RE WITH FOR YOUR KIND CONSIDERATION & RECORD. THE TERMS & CONDITION OF TH E POWER OF ATTORNEY CLEARLY STIPULATE THAT NEITHER ANY MONEY NOR ANY RI GHTS/TITLE TO LAND OR POSSESSION OF LAND HAS BEEN EXCHANGED, BETWEEN PART IES (I.E. BETWEEN OWNERS/FARMERS AND SURJIT SINGH POA HOLDERS). IT IS CLEARLY PROVED & EVIDENCED THAT THE FARMERS HAVE NOT SOLD ANY LAND T O ME & THEY HAD GIVEN POA TO ME ONLY TO REPRESENT THEM AND AS SUCH THE QUESTION OF SELLING OF THE LAND TO M/S HORIZON BUILDCON PVT. LT D. IN MY PERSONAL CAPACITY AGAIN REITERATED THAT THIS DOCUMENT WAS NE VER EXECUTED BETWEEN US AND M/S. HORIZON BUILDCON (P) LTD, HENCE WAS UNSIGNED AND UNEXECUTED. THE DETAILS OF THE SALES DEED EXECUTED BY ME DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2010-11 AS A POWER OF ATTORNEY (POA) HOLDER OF THE FOLLOWING FARMERS IS GIVEN AS UNDER: DATE OF REGISTRY NAME OF SELLER KHASRA NUMBER TOTAL AREA OF TOTAL SALES DETAILS OF PAYMENT RECEIVED BY ME DETAILS OF PAYMENTS REFUNDED TO FARMERS DETAILS OF POA NO. GIVEN BY THE AGRICULT LURE LAND CONSIDER ALION FARMERS 27.5.09 HARBANS KAUR 4415, 10K-1M 2261500/- REED. RS. 10 LACS ON AMT REFUNDED TO 07/04//2008/D 4418, 4427, 4436 9/5/2008 IN SB A/C WITH SYNDICATE BANK FARMER OUT OF CASH WITHDRAWAL FROM SB A/C SYNDICATE BANK. OC 1390 2/3/09 IJHARBANS KAUR, 4416, 17K - 1M 3826500 / - I)CH. NO.394300 AMT.REFUNDED TO 1) 07/04/08 HJDILBAG SINGH & 4417, RCVD.FOR RS.35 LACS FARMERS VIDE DOC1390 HIRA SINGH & 4418, AND DEPOSITED ON CHQ.NO.95702.95703 & 2. 10/02/09 DOC JASBIR SINGH. 4427 23.3.09 IN SB A/C 95704FOR RS.7.50 LACS 2815 III)PRAKSH SINGH & 4428, WITH SYNDICATE BANK RS.6.50 LACS AND 314/01/09 DOC BALJIT SINGH & 4430. AND RS.8.00 LACS FROM SB 2496 GURPREETSINGH 4431 2)CASH RECEIVED A/CWITH SYNDICATE 4.24.12.08 ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 48 IVJPARGAT SINGH & JAGIR SINGH (THROUGH MANJIT SINGH & SAWARAJ SINGH GPA THROUGH SURJIT SINGH SPA V) MANJIT SINGH RS.32500/- BANK AND BALANCE RS. 16.26 LACS REFUNDED TO THE FARMERS IN CASH BEING WITHDRAWALS FROM SB A/CAND PAYMENTS RECEIVED IN CASH AT THE TIME OF REGISTRY DOC2282 5.24.02.09 DOC 2971 11.12.09 I) HARBANS KAUR 4417.4 20K - 46.00 LA CS RS. 50.00 LACS AMOUNT REFUNDED TO THE FARMERS OUT OF CASH WITHDRAWAL FROM MY SAVING BANK ACCOUNT I) 14/07/09/DOC3 33 & I6/11/09/DOC2 725 II) 14/07/09/DOC 1239 III) 12/11/09 DOC 2700 IV) 24/12/08 DOC 2282 V) 23/05/08 DOC 149 IT) MANJEET KAUR 222.44 05M RECEIVED BY ME HI) FAKIR SINGH 23.442 THROUGH CHEQUE IV) PARGAT SINGH & JAGIR SINGH V) RAJINDER KAUR ALIAS BALWINDER KAUR VI) SWARN SINGH, AMARJIT SINGH, GURMEET SINGH, PRITPAL SINGH, KEWEK SINGH & CHARANJIT KAUR, IQBAL KAUR 4,4565. 4566.4 567,44 37.550 4/4425, 4436, 5511 12/456 4 IT IS CLEARLY EVIDENCE FROM THE ABOVE CHARTS THAT I HAD REPRESENTED AS A POWER OF ATTORNEY (POA) OF THE ABOVE FARMERS AND TH E PAYMENTS RECEIVED BY ME ON THEIR BEHALF HAS BEEN REFUNDED TH EM WITHOUT ANY MONETARY BENEFITS. FURTHER, THE ASSESSING OFFICER HAS OBSERVED IN PAGE NO.9 OF HIS ORDER FROM THE SUBMISSIONS OF THE ASSESSEE, WHICH READS A S UNDER :- IT IS CLEARLY MENTIONED IN THESE AGREEMENTS TO SEL L 'IF THE PURCHASER PULL BACK, THE ADVANCE GIVEN BY HIM WILL BE FORFEITED AN D IF THE SELLER WILL PULL BACK, HE HAS TO PAY DOUBLE AMOUNT OF ADVANCE AND TH E PURCHASER HAS FULL RIGHT TO GET REGISTRY THROUGH COURT. I BEING T HE SELLERS WILL BE RESPONSIBLE FOR THE FAULT IN THE OWNERSHIP AND THE PURCHASER WILL HAVE THE FULLEST RIGHTS TO MAKE PLOTS ON THE LAND, GET T HE PLANS DRAWN ON IT, GET THE ROADS BUILT-UP ON IT AND GET THE AGREEMENTS WRITTEN FURTHER OR GET THE FOUNDATIONS OF THE PLOTS COMPLETED UP AND W HEREVER REQUIRED UP THE SIGNATURES THEREUPON.' 18. FROM THE ABOVE SUBMISSIONS OF THE ASSESSEE AND FINDINGS RECORDED BY THE ASSESSING OFFICER, BOTH ARE CONTRAD ICTORY AND THESE ISSUES HAVE NOT BEEN PROPERLY DEALT WITH BY THE LD. C IT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE. FURTHER, THE C IT(A) WRONGLY HELD THAT THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD T O SHOW THAT THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 49 ASSESSEE HAD PURCHASED THE LAND FROM VARIOUS PERSONS/ FARMERS ON AGREEMENTS/IKRARNAMAS OR POWER OF ATTORNEY IN HIS N AME AND LATER TRANSFERRED THE SAME TO M/S HORIZON BUILDCON PVT LTD., ON POWER OF ATTORNEY OF THE ORIGINAL OWNERS', IGNORING THE DETAI LED DISCUSSION OF THE SAME IN THE ASSESSMENT ORDER. ON GOING THROUGH THE A SSESSMENT ORDER AND THE SUBMISSIONS OF THE ASSESSEE AND THE REVENUE, WE ARE OF THE OPINION THAT THE AO HAS RIGHTLY HELD THAT DOCUMENTS I N QUESTION WERE NOT SIGNED BY ANY OF THE PARTY, BUT THE AUTHENTICIT Y OF THESE DOCUMENTS CANNOT BE DENIED IN VIEW OF THE FACT THAT THE THINGS HAVE BEEN HAPPENED FURTHER ACCORDING TO THE SAID MOU AND ACCORDING TO OTHER DOCUMENTS FOUND AT THE BUSINESS PREMISES OF M/S HORIZON BUILCO N (P) LTD. FURTHER THE AO HAS RIGHTLY PLACED RELIANCE ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DURGA PRASAD MO RE (1971 82 ITR 540(SC) WHEREIN IT HAS BEEN HELD THAT WHERE A PARTLY RELIES OF SELF SERVING RECITALS IN A DOCUMENTS IT IS FOR THAT PART Y TO ESTABLISH THE TRUTH OF THESE RECITALS. THE TAX AUTHORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES ARE DISCUSSED HEREINAFTER. M OREOVER, THE QUESTION IS THAT WHAT WAS THE NEED TO PREPARE THESE DOCUMENTS BY THE COMPANY WHEN NO TRANSACTIONS HAVE BEEN MADE WITH THE ASSESSEE. HENCE, THESE DOCUMENTS ALSO ESTABLISHED THAT THE ASSE SSEE HAS TAKEN LAND FROM VARIOUS FARMERS/PERSONS ON AGREEMENT TO SE LL/BIYANA OR POA AND THEN TRANSFERRED THE SAME LAND TO THE COMPANY AS POA. WE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 50 FOUND STRONG SUBSTANCE ON THE SUBMISSIONS OF LD. DR THAT THERE WAS A TRANSFER IN THE NAME OF THE ASSESSEE AS PER SECTION 2(47) AND SECTION 47 OF THE ACT. WE ARE ALSO IN AGREEMENT WITH THE DE CISIONS RELIED ON BY THE LD. DR IN THE CASE OF BALBIR SINGH MAINI(SUPRA), WHEREIN THE HONBLE SUPREME COURT OBSERVED THAT THE FORM AND SUBSTANCE OF THE PROVISIONS PERTAINING TO SECTION 47 OF THE REGISTRATION ACT 19 08 UNDISPUTEDLY PROVIDED THAT A REGISTERED DOCUMENT WILL BE OPERATIVE IN LAW FROM THE DATE OF ITS EXECUTION AND NOT FROM THE DATE OF REGISTR ATION. IT WAS ALSO HELD BY THE HONBLE SUPREME COURT IN THE SAID CASE T HAT THE OBJECTION OF SECTION 2(47)(VI) OF THE ACT APPEARS TO BE TO BRING WITHIN THE TAX NET A DE FACTO TRANSFER OF ANY IMMOVABLE PROPERTY. THE EXPRESSION ENABLING THE ENJOYMENT OF TAKES COLOUR FROM THE EARLIER EXP RESSION TRANSFERRING, SO THAT IT WAS CLEAR THAT ANY TRANS ACTION WHICH ENABLES THE ENJOYMENT OF IMMOVABLE PROPERTY MUST BE ENJOYME NT AS A PURPORTED OWNER THEREOF, THE MAXIM NOSCITUR A SOCIIS HAS BEEN REPEATEDLY APPLIED BY THE HONBLE SUPREME COURT. 19. IN THIS PARTICULAR CASE, THE ASSESSEE RECEIVED PAYMENT FROM M/S HORIZON BUILDCON PVT. LTD. WHICH ARE EVIDENT FROM THE RECORDS SEIZED BY THE REVENUE AUTHORITIES DURING THE COURSE OF SEAR CH AND SEIZURE AND THE STATEMENTS OF ACCOUNTS WERE ALSO FOUND, WHICH I S ALSO DISCERNIBLE FROM THE ASSESSMENT ORDER AS WELL AS THE DOCUMENTS C ONSIDERED BY THE AO DURING THE COURSE OF ASSESSMENT. HOWEVER, THE CI T(A) HAS IGNORED ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 51 THE LEGAL POSITION WHICH WERE APPLICABLE IN THE PRE SENT CASE IN HAND. ACCORDINGLY AS PER ABOVE DISCUSSIONS THE CAPITAL GAI N CALCULATED BY THE ASSESSING OFFICER IS ALSO CORRECT. ACCORDINGLY, WE DISMISS THE IMPUGNED ORDER PASSED BY THE CIT(A) AND ALLOW THE APPEAL OF RE VENUE FOR A.Y.2009-2010 IN ITA NO.434/ASR/2016. THUS, ITA NO. 434/ASR/2016 IS ALLOWED. 20. SINCE THE ISSUES INVOLVED IN OTHER APPEALS OF TH E REVENUE ARE SIMILAR TO THE APPEAL DECIDED BY US IN THE CASE OF A SSESSEE-SURJIT SINGH IN ITA NO.434/ASR/2016, WHEREIN WE HAVE DISMISSED TH E IMPUGNED ORDER PASSED BY THE CIT(A) AND ALLOWED THE APPEAL OF TH E REVENUE, THEREFORE, OUR OBSERVATIONS MADE THEREIN SHALL APPLY MUTATIS MUTANDIS TO THE APPEALS OF THE REVENUE IN CASE OF M/S HORIZO N BUILDCON PVT. LTD. IN ITA NOS.671-673/ASR/2014 FOR THE ASSESSMENT YEAR S 2009-2010 TO 2011-2012. THUS, ITA NOS.671-673/ASR/2014 ARE ALLOW ED. 21. NOW, A PROCEDURAL ISSUE COMES BEFORE US THAT TH OUGH THE HEARING OF THE CAPTIONED APPEAL WAS CONCLUDED ON 06.02.2020, HOWEVER, THIS ORDER IS BEING PRONOUNCED MUCH AFTER THE EXPIRY OF 9 0 DAYS FROM THE DATE OF CONCLUSION OF HEARING. WE FIND THAT RULE 34( 5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1962, WHICH ENVISAGES THE PROCEDURE FOR PRONOUNCEMENT ORDERS, PROVIDES AS FOLLOWS: ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 52 34(5) THE PRONOUNCEMENT MAY BE IN ANY OF THE FOLLOW ING MANNERS: - (A) THE BENCH MAY PRONOUNCE THE ORDER IMMEDIATELY U PON THE CONCLUSION OF HEARING. (B) IN CASE WHERE THE ORDER IS NOT PRONOUNCED IMMED IATELY ON THE CONCLUSION OF THE HEARING, THE BENCH SHALL GIVE A D ATE OF PRONOUNCEMENT. (C) IN A CASE WHERE NO DATE OF PRONOUNCEMENT IS GIV EN BY THE BENCH, EVERY ENDEAVOUR SHALL BE MADE BY THE BENCH TO PRONO UNCE THE ORDER WITHIN 60 DAYS FROM THE DATE ON WHICH THE HEARING O F THE CASE WAS CONCLUDED BUT, WHERE IT IS NOT PRACTICABLE SO TO DO ON THE GROUND OF EXCEPTIONAL AND EXTRAORDINARY CIRCUMSTANCES OF THE CASE, THE BENCH SHALL FIX A FUTURE DAY FOR PRONOUNCEMENT OF THE ORD ER, AND SUCH DATE SHALL NOT ORDINARILY BE A DAY BEYOND A FURTHER PERI OD OF 30 DAYS AND DUE NOTICE OF THE DAY SO FIXED SHALL BE GIVEN ON TH E NOTICE BOARD. AS SUCH, ORDINARILY, THE ORDER ON AN APPEAL SHOULD BE PRONOUNCED BY THE BENCH WITHIN NO MORE THAN 90 DAYS FROM THE DATE O F CONCLUDING THE HEARING. IT IS, HOWEVER, IMPORTANT TO NOTE THAT THE EXPRESSION ORDINARILY HAS BEEN USED IN THE SAID RULE ITSELF. THIS RULE WAS INSERTED AS A RESULT OF DIRECTIONS OF HONBLE HIGH COURT IN T HE CASE OF SHIVSAGAR VEG RESTAURANT VS ACIT (2009) 319 ITR 433 (BOM), WH EREIN, IT WAS, INTER ALIA , OBSERVED AS UNDER: WE, THEREFORE, DIRECT THE PRESIDENT OF THE APPELLA TE TRIBUNAL TO FRAME AND LAY DOWN THE GUIDELINES IN THE SIMILAR LINES AS ARE LAID DOWN BY THE APEX COURT IN THE CASE OF ANIL RAI (SUPRA) AND TO I SSUE APPROPRIATE ADMINISTRATIVE DIRECTIONS TO ALL THE BENCHES OF THE TRIBUNAL IN THAT BEHALF. WE HOPE AND TRUST THAT SUITABLE GUIDELINES SHALL BE FRAMED AND ISSUED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL W ITHIN SHORTEST REASONABLE TIME AND FOLLOWED STRICTLY BY ALL THE BE NCHES OF THE TRIBUNAL. IN THE MEANWHILE (EMPHASIS, BY UNDERLINING, SUPPLIE D BY US NOW),ALL THE REVISIONAL AND APPELLATE AUTHORITIES UNDER THE INCO ME-TAX ACT ARE DIRECTED TO DECIDE MATTERS HEARD BY THEM WITHIN A P ERIOD OF THREE MONTHS FROM THE DATE CASE IS CLOSED FOR JUDGMENT. IN THE RULES SO FRAMED, AS A RESULT OF THESE DIRECTI ONS, THE EXPRESSION ORDINARILY HAS BEEN INSERTED IN THE REQUIREMENT T O PRONOUNCE THE ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 53 ORDER WITHIN A PERIOD OF 90DAYS. THE QUESTION THEN AR ISES WHETHER THE PASSING OF THIS ORDER, BEYOND NINETY DAYS, WAS NECESS ITATED BY ANY EXTRAORDINARY CIRCUMSTANCES. 22. WE ALSO FIND THAT THE AFORESAID ISSUE HAS BEEN A NSWERED BY A COORDINATE BENCH OF THE TRIBUNAL VIZ; ITAT, MUMBAI F BENCH IN DCIT, CENTRAL CIRCLE-3(2), MUMBAI VS JSW LIMITED & ORS (I TA NO.6264/MUM/18 DATED 14.5.2020, WHEREIN, IT WAS OBSE RVED AS UNDER: 9. LET US IN THIS LIGHT REVERT TO THE PREVAILING SITUATION IN THE COUNTRY. ON 24TH MARCH,2020, HONBLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN, FOR 21 DAYS, TO PREVENT THE SPREAD OF COVID 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDE D FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNA L AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE M AHARASHTRA GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID 19. THE EPI DEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXAT ION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS UNPRECEDENTE D DISRUPTION OF JUDICIAL WOK ALL OVER THE COUNTRY. AS A MATTER OF F ACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HONBLE SUPREME COURT OF I NDIA, IN AN UNPRECEDENTED ORDER IN THE HISTORY OF INDIA AND VID E ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO AFEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03 .2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN THE JURISDICTION AL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SH ALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN. H ONBLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESI DES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED T HAT, IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26 TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY, AND ALSO OBSERVED THAT ARRANGEMENT C ONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SH ALL CONTINUE FURTHER TILL 15TH JUNE2020. IT HAS BEEN AN UNPRECEDENTED S ITUATION NOT ONLY IN INDIA BUT ALL OVER THE WORLD. GOVERNMENT OF INDIA H AS, VIDE NOTIFICATION DATED 19TH FEBRUARY 2020, TAKEN THE STAND THAT, THE CORONAVIRUS SHOULD BE CONSIDERED A CASE OF NATURAL CALAMITY AN D FMC (I.E. FORCE MAJEURE CLAUSE) MAYBE INVOKED, WHEREVER CONSIDERED APPROPRIATE, ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 54 FOLLOWING THE DUE PROCEDURE.... THE TERM FORCE MA JEURE HAS BEEN DEFINED IN BLACKS LAW DICTIONARY, AS AN EVENT OR EFFECT THAT CAN BE NEITHER ANTICIPATED NOR CONTROLLED WHEN SUCH IS TH E POSITION, AND IT IS OFFICIALLY SO NOTIFIED BY THE GOVERNMENT OF INDIA A ND THE COVID-19 EPIDEMIC HAS BEEN NOTIFIED AS A DISASTER UNDER THE NATIONAL DISASTER MANAGEMENT ACT, 2005, AND ALSO IN THE LIGHT OF THE DISCUSSIONS ABOVE, THE PERIOD DURING WHICH LOCKDOWN WAS IN FORCE CAN B E ANYTHING BUT AN ORDINARY PERIOD. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE O F THE CONSIDERED VIEW THAT RATHER THAN TAKING A PEDANTIC VIEW OF THE RULE REQUIRING PRONOUNCEMENT OF ORDERS WITHIN 90 DAYS, DISREGARDIN G THE IMPORTANT FACT THAT THE ENTIRE COUNTRY WAS IN LOCKDOWN, WE SH OULD COMPUTE THE PERIOD OF 90 DAYS BY EXCLUDING AT LEAST THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORCE. WE MUST FACTOR GROUND REALIT IES IN MIND WHILE INTERPRETING THE TIME LIMIT FOR THE PRONOUNCEMENT O F THE ORDER. LAW IS NOT BROODING OMNIPOTENCE IN THE SKY. IT IS A PRAGMA TIC TOOL OF THE SOCIAL ORDER. THE TENETS OF LAW BEING ENACTED ON THE BASIS OF PRAGMATISM, AND THAT IS HOW THE LAW IS REQUIRED TO INTERPRETED. THE INTERPRETATION SO ASSIGNED BY US IS NOT ONLY INCONSONANCE WITH THE LE TTER AND SPIRIT OF RULE 34(5) BUT IS ALSO A PRAGMATIC APPROACH AT A TIME WH EN A DISASTER, NOTIFIED UNDER THE DISASTER MANAGEMENT ACT 2005, IS CAUSING UNPRECEDENTED DISRUPTION IN THE FUNCTIONING OF OUR JUSTICE DELIVERY SYSTEM. UNDOUBTEDLY, IN THE CASE OF OTTERS CLUB VS DIT [(2017) 392 ITR 244 (BOM)], HONBLE BOMBAY HIGH COURT DID NOT APPRO VE AN ORDER BEING PASSED BY THE TRIBUNAL BEYOND A PERIOD OF 90 DAYS, BUT THEN IN THE PRESENT SITUATION HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL2020, HELD THAT DIRECTED WHILE CAL CULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME-BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERAT E SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY. THE EXT RAORDINARY STEPS TAKEN SUO MOTU BY HONBLE JURISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT ALSO INDICATE THAT THIS PERIOD OF LOC KDOWN CANNOT BE TREATED AS AN ORDINARY PERIOD DURING WHICH THE NORM AL TIME LIMITS ARE TO REMAIN IN FORCE. IN OUR CONSIDERED VIEW, EVEN WI THOUT THE WORDS ORDINARILY, IN THE LIGHT OF THE ABOVE ANALYSIS OF THE LEGAL POSITION, THE PERIOD DURING WHICH LOCKOUT WAS IN FORCE IS TO EXCL UDED FOR THE PURPOSE OF TIME LIMITS SET OUT IN RULE 34(5) OF THE APPELLA TE TRIBUNAL RULES, 1963. VIEWED THUS, THE EXCEPTION, TO 90-DAY TIME-LIMIT FO R PRONOUNCEMENT OF ORDERS, INHERENT IN RULE 34(5)(C), WITH RESPECT TO THE PRONOUNCEMENT OF ORDERS WITHIN NINETY DAYS, CLEARLY COMES INTO PLAY IN THE PRESENT CASE. 23. RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL DECISI ON OF HONBLE BOMBAY HIGH COURT AND THE TRIBUNAL, WE ARE OF THE CO NSIDERED VIEW THAT THE PERIOD DURING WHICH THE LOCKDOWN WAS IN FORC E SHALL STAND EXCLUDED FOR THE PURPOSE OF WORKING OUT THE TIME LIMI T FOR ITA NO.434/ASR/2016 & ITA NOS.671-673/ASR/2014 55 PRONOUNCEMENT OF ORDERS, AS ENVISAGED IN RULE 34(5) O F THE APPELLATE TRIBUNAL RULES, 1963. 24. IN THE RESULT, ALL FOUR APPEALS OF THE REVENUE ARE ALLOWED. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) OF I TAT RULES, 1963 BY PUTTING THE COPY OF THE SAME ON NOTICE BOAR D ON 30/06 /2020 AT AMRITSAR. SD/ - (RAVISH SOOD) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / AMRITSAR; , DATED 30/06/2020 PRAKASH KUMAR MISHRA, SR.P.S. ' '' ' - - - - .- .- .- .- / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) ITAT AMRITSAR BENCH, AMRITSAR 1. / THE APPELLANT- 2. / THE RESPONDENT- 3. / ( ) / THE CIT(A), 4. / / CIT 5. - , , / DR, ITAT, AMRITSAR 6. / GUARD FILE. - //TRUE COPY//