The Asstt. Commissioner of Income Tax, Central Circle-1(2), Ahmedabad V. Shri Baldevbhai F. Patel, Ahmedabad

ITSSA 121/AHD/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9023 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-01-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Unexplained investment; Capital asset; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Cost of acquisition; Date of conversion; Tangible material; Right to appeal; Documents seized; Set aside; Capital Gains
• Section: 54B; 2(14); 153A; 201; 43; 48; 13; 22; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ASSESSEE BY : SHRI TUSHAR HEMANI , SR. ADVOCATE WITH SHRI P.B.PARMAR A. R S REVENUE BY : SHRI O.P. SHARMA , CIT .D R / DATE OF HEARING : 25 / 11 / 2020 / DATE OF PRONOUNCEMENT: 06 / 01/2021 / O R D E R PER BENCH : THESE FOUR APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE ASSESSEE AND REVENUE AGAINST THE APPELLATE ORDERS OF THE LEARNED COMMISSI ONER OF INCOME - SL. NO(S) IT (SS) A NO(S) ASSET. YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 121/AHD/2017 2009 - 10 A.C.I.T., CENTRAL CIRCLE - 1(2) AHMEDABAD SHRI BALDEVBHAI F. PATEL , 1 & 2, GHANDHYAM NIVAS, NEAR SANSKRUTI BUNGLOW, MOTERA, AHMEDABAD - 380005 . PAN: AFJPP0887J 2. 120/AHD/2017 2011 - 12 SHRI BALDEVBHAI F. PATEL, BY LEGAL HEIR SHRI SANJAY B. PATEL, AHMEDABAD . D .C.I.T., CENTRAL CIRCLE - 1(2) AHMEDABAD 3. 150 /AHD/2017 2010 - 11 SHRI BALDEVBHAI F. PATEL, BY LEGAL HEIR SHRI SHAILESH B. PATEL, AHMEDABAD . D.C.I.T, CIRCLE - 1 (2) , AHMEDABAD . 4. 151 /AHD/2017 2010 - 11 SHRI SHAILESH B . PATEL, AHMEDABAD. PAN NO.AFJPP0885L D.C.I.T, CIRCLE - 1(1) , AHMEDABAD. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 2 TAX (APPEALS) , AHMEDABAD [ LD. CIT (A) IN SHORT] RELEVANT TO ASSESSMENT YEAR S 20 09 - 1 0 , 20 10 - 1 1 AND 2011 - 12 . OUT OF FOUR APPEALS, THREE APPEALS ARE BY THE ASSESSEE AND ONE APPEAL BY THE REVENUE. 2. FIRST WE TAKE UP IT (SS) A NO. 150 /AHD/2017 FOR A.Y. 20 1 0 - 1 1. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 . THE ID CIT( APPEALS) ERRED BOTH IN LAW AND ON FACTS IN NOT GRANTING EXEMPTION U/S 54B IN RESPECT OF PURCHASE OF AGRICULTURAL LAND MADE OUT OF CASH RECEIPTS ON SALE OF AGRICULTURAL LAND AT SURVEY NOSL97/L AND 198/1 . SINCE THE AMOUNT OF SALES PROCEEDS REC EIVED TOWARDS SALE OF AGRICULTURAL LAND WERE UTILIZED AS PER CONDITIONS OF SECTION EXEMPTION U/S 54B OF THE ACT OUGHT TO HAVE BEEN ALLOWED WHEN THE CAPITAL GAIN IS CHARGED TO TAX.. IT BE DIRECTED TO BE ALLOWED NOW. 2. THE ID' CIT(APPEALS) ERRED IN LAW A ND ON FACTS IN NOT APPRECIATING THE LEGAL POSITION EXPLAINED TO HIM THAT THE PRIME REQUIREMENT OF ALLOWING EXEMPTION U/S 54B IS REGARDING THE UTILIZATION OF PROCEEDS OF SALE OF AGRICULTURAL LAND IN PURCHASE OF AGRICULTURAL LAND WHICH IS DONE BY THE APPELLA NT AND SINCE THE SAID FACT IS NOT DISPUTED MERELY BECAUSE SUCH UTILIZATION WAS MADE IN EARLIER YEAR, EXEMPTION CANNOT BE DENIED WHEN ALL OTHER CONDITIONS ARE OTHERWISE FULFILLED IT BE SO HELD NOW AND EXEMPTION TO THE EXTENT OF SUCH UTILIZATION OF CASH RECE IPT TAXED AS SALES CONSIDERATION. 3. THE ID CIT(APPEALS) ERRED IN NOT FOLLOWING THE CASE LAWS CITED AND IN REFUSING TO ALLOW GROUND TAKEN BEFORE HIM WHICH HE OUGHT TO HAVE ALLOWED. 2.1 THE ASSESSEE VIDE LETTER DATED 25 - 11 - 2020 HAS RAISED THE ADDITIONAL GROUND OF APPEAL WHICH IS REPRODUCED AS UNDER: THE LAND TRANSFERRED BY THE ASSESSEE, AGAINST WHICH EXEMPTION UNDER SECTION 54B OF THE ACT HAS BEEN CLAIMED, WAS AN AGRICULTUREAL LAND NO T FALLING WITHING THE AMBIT OF CAPITAL ASSET AS DEFINED UNDER SECTION 2(14) OF THE ACT AND HENCE, GAIN ARISING ON TRANSFER THEREOF IS, IN ANY CASE, NOT CHARGEABLE TO TAX AT ALL. 3. THE LEARNED AR FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ADDIT IONAL GROUND RAISED BY THE ASSESSEE VIDE LETTER DATED 25 - 11 - 2020 GOES TO THE ROOT OF THE MATTER AND ALL THE FACTS RELATED TO THE ADDITIONAL GROUND OF APPEAL ARE AVAILABLE IN THE ORDER OF THE AUTHORITIES BELOW. THEREFORE THE SAME NEEDS TO BE ADMITTED IN VIE W OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF NTPC LTD. REPORTED IN 229 ITR 383 WHERE IT WAS HELD AS UNDER: UNDER SECTION 254, THE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS T HEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 3 LIABILITY OF AN ASSESSEE IN AC CORDANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON - TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE P REVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. THERE IS NO REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARI SE FROM THE ORDER OF THE COMMISSIONER (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS OBJECTIONS BEFORE THE TRIBUNAL. THERE IS NO REASON WHY THE. TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARI SING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. 4. ON THE OTHER HAND THE LEARNED DR DID NOT RAISE ANY OBJECTION ON THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 5. HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AN D PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS LEGAL IN NATURE AND THEREFORE THE SAME CAN BE RAISED AT ANY STAGE IN PURSUANCE TO THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF NTPC LTD (SUPRA) . SIMILA RLY, ALL THE FACTS RELATED TO ADDITIONAL GROUND OF APPEAL ARE AVAILABLE ON RECORD. HENCE WE ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AND PROCEED TO ADJUDICATE THE SAME. 6. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT ( A) ERRED IN CONFIRMING THE ORDER OF THE AO BY DISALLOWING THE EXEMPTION CLAIMED UNDER SECTION 54B OF THE ACT AMOUNTING TO 39,36,476/ - ONLY. 7. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND CLAIMED TO BE ENGAGED IN THE AGRICULTURAL ACTIVITIES. THE ASSESSEE, ALONG WITH OTHER CO - OWNERS, AMONG OTHER LANDS, WAS IN POSSESSION OF LANDS BEARING SURVEY NO. 197/1 AND 198 /1 WHICH WERE PURCHASED IN THE YEAR 2003. THESE LANDS WERE USED BY THE ASSESSEE FOR THE PURPOSE OF AGRICULTURAL ACTIVITIES. HOWEVER, THE ASSESSEE ALONG WITH OTHER CO - OWNERS, HAS ENTERED INTO A BANAKHAT DATED 21 ST AUGUST 2007 TO SALE THE IMPUGNED LAND TO M/S SAVVY ORGANIZER. AS PER THE BANAKHAT DATED 21 ST AUGUST 20017 THE ASSESSEE WAS UNDER THE OBLIGATION TO CONVERT SUCH AGRICULTURE LANDS INTO NON - AGRICULTURE LANDS. ACCORDINGLY THE ASSESSEE GOT CONVERTED SUCH LAND IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 4 INTO NON - AGRICULTURAL BEFORE THE EXECUTION OF THE SALE DEED. THE ASSESSEE, THEREAFTER TRANSFERRED THE LAND VIDE CONVEYANCE DEED DATED 4 TH APRIL 2009 TO M/S SAVVY ORGANIZER. THE ASSESSEE WITH RESPECT TO SUCH LANDS CLAIMED AN EXEMPTION UNDER SECTION 54B OF T HE ACT AMOUNTING TO 39,36,476/ - ON ACCOUNT OF REINVESTMENT IN AGRICULTURAL LAND. 7.1 HOWEVER, THE AO FOUND THAT THE LAND IN QUESTION WAS SOLD AFTER CONVERTING THE SAME INTO NON - AGRICULTURAL LAND. AS SUCH THE ASSESSEE HAS SOLD NON - AGRICULTURAL LAND. ACC ORDING TO THE AO THE PRECONDITION FOR CLAIMING THE DEDUCTION/EXEMPTION UNDER SECTION 54B OF THE ACT IS THAT THE LAND TRANSFERRED SHOULD BE AN AGRICULTURAL LAND ONLY. CONSEQUENTLY, THE AO DENIED THE CLAIM OF THE ASSESSEE UNDER SECTION 54B OF THE ACT AND ADD ED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 8. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 8.1 THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT THE LAND IN QUESTION IS THE AGRICULTURAL LAND WHICH IS NOT A CAPITAL ASSET AS DEFINED UNDER THE PROVISIONS OF SECTION 2(14) OF THE ACT. THEREFORE, THERE CANNOT BE ANY QUESTION OF CHARGING THE CAPITAL GAIN ARISING ON THE SALE OF SUCH LANDS AND CONSEQUENTLY THE QUESTION OF CLAIMING/DENYING THE EXEMPTION UNDER SECTION 54B OF THE ACT DO ES NOT ARISE. 8.2 HOWEVER, THE LEARNED CIT (A) DISAGREED WITH THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO . 9. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 10. THE LEARNED AR SUBMITTED BEFORE US WHICH IS REPRODUCED AS UNDER: MOTERA LAND AT THE OUTSET, AO HAS ERRED IN DENYING EXEMPTION U/S.54B ON THE COUNT THAT THE LAND TRANSFERRED BY THE ASSESSEE WAS NON - AGRICULTUREAL LAND . IT IS A SETTLED LEGAL POSITION THAT IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 5 IN ORDER TO CLAIM EXEMPTION U/S.54B, THE TRANSFERRED LAND MUST BE USED FOR AGRICULTUREAL PURPOSES, THE ACT HAS LAID EMPHASIS ON USAGE OF LAND AND NOT ON THE NOMENCLATURE OR CATEGORIZATION OF LAND UNDER REVENUE RECORDS I.E IT IS IMMATERIAL AS TO WHETHER THE LAND SO TRANSFERRED BY AN ASSESSEE IS AGRICULTURAL LAND OR NON - AGRICULTURAL LAND, RELIANCE IS PLACED ON FOLLOWINGS: CIT VS. SAVITA RANI - 270 ITR 40 (P&H); CIT VS. E UDAYKUMAR - 284 ITR 511 (MAD.); SHREE BHAGWANBHAI REVABHAI PRAJAPATI - 154 ITD 710 (AHD.); THUS, THE VERY FOUNDATION OF AO, BASED ON WHICH EXEMPTION U/S.54B WAS DENIED, IS UNJUSTIFIED. ON THIS SHORT COUNT, EXEMPTION U/S.54B BE ALLOWED. WITHOUT PREJUDICE TO THE ABOVE, THE LAND TRANSFERRED BY ASSESSEE WAS AN AGRICULTUREAL LAND AT THIS STAGE, THE FOL LOWING VITAL EVENTS MAY KINDLY BE APPRECIATED. ON 21.08.07, ASSESSEE ENTERED INTO AN ATS WITH SAVVY ORGANIZERS FOR SALE OF LAND I.E. 'AGRICULTURAL LAND' (PGS.75 - 82 @ 76 & 80 OF P/B). AS PER CLAUSE 2 OF ATS, THE LAND IN QUESTION WAS TO BE CONVERTED INTO 'NON - AGRICULTURAL LAND' BY THE PURCHASER (PGS.75 - 82 @ 79 OF P/B);. ON 30.11.08, THE LAND WAS CONVERTED INTO 'NON - AGRICULTURAL LAND' BY THE PURCHASER; ON 04.04.09, THE FINAL SALE DEED CAME TO BE EXECUTED. AS PER THE 'LAND REVENUE RECORDS', THE LAND IN QUESTION WAS CATEGORIZED AS 'AGRICULTURAL LAND' (PGS.460 - 481 OF P/B). ASSESSEE HAS CARRIED OUT 'AGRICULTURAL OPERATIONS' ON THE LAND IN QUESTION UPTO THE 'DATE OF CONVERSION' OF LAND INTO NON - AGRICULTURAL LAND. ASSESSEE HAS ALSO DECLARED 'AGRICULTURAL IN COME' N THE RETURN OF INCOME FILED WITH THE DEPARTMENT. THE ABOVE FACTS WERE SPECIFICALLY BROUGHT TO THE NOTICE OF AO AS WELL AS CIT(A) AND THE SAME HAVE NOT BEEN CONTROVERTED (PGS.56 - 57 OF P/B). IN VIEW OF THE AFORESAID FACTS, IT BECOMES CLEAR THAT THE UNDERLYING ASSET WAS 'AGRICULTURAL LAND'. NOMENCLATURE USED IN THE SALE DEED CANNOT BE THE GUIDING FACTOR FOR DETERMINING THE TRUE NATURE OF THE LAND IN QUESTION IN VIEW OF THE PECULIAR ARRANGEMENT OF THE PRESENT CASE. THUS, THE LAND TRANSFERRED BY ASSESS EE WAS VERY MUCH 'AGRICULTURAL LAND'. RELIANCE IS PLACED ON 'CIT VS. P. MAHALAKSHI - (2020)M 121 TAXMANN.COM 77 (MADRAS)' (ANNEXURE 'A'). WITHOUT PREJUDICE, SINCE ASSESSEE HAD ENTERED INTO ATS, ASSESSEE RECEIVED SALE CONSIDERATION IN AY 2007 - 08, 2008 - 09 & 2010 - 11 (I.E. THREE YEARS). IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 6 SUCH SALE CONSIDERATION WAS UTILIZED FOR PURCHASE OF 'AGRICULTURAL LAND' IN ALL THOSE THREE YEARS AND IN TURN, ASSESSEE HAD CLAIMED 'EXEMPTION U/S 54B'. EVEN IF SUCH INVESTMENTS HAVE BEEN MADE PRIOR TO THE DATE OF SALE DEED, HOWEVER SINCE THE SAME HAVE BEEN MADE OUT OF SALE CONSIDERATION RECEIVED PURSUANT TO ATS, SUCH INVESTMENTS WOULD QUALIFY FOR EXEMPTION U/S 54B. NARDIPUR LAND AO DENIED EXEMPTION OF RS.23, 18,2487 - U/S 54B O N THE SOLITARY COUNT THAT THE UNDERLYING ASSET, RESULTING INTO' CAPITAL GAIN, WAS PURCHASED ON 19.11.08 AND SOLD ON 11.03.10 I.E. ASSESSEE DID NOT OWN SUCH LAND FOR A PERIOD OF 'TWO YEARS' IMMEDIATELY PRECEDING THE 'DATE OF TRANSF ER' (PG.19 OF ASST. ORDER). AT THE OUTSET, 'NARDIPUR LAND' WAS 'AGRICULTURAL LAND' NOT FALLING WITHIN THE AMBIT OF CAPITAL ASSET AS DEFINED UNDERSECTION 2(14) OF THE ACT. THE ASSESSEE SPECIFICALLY PLEADED THE SAID ASPECT BEFORE THE LOWER AUTHORITIES (PGS.61 - 62 OF P/B) AND THE SAME HAS NOT BEEN CO NTROVERTED BY THE AUTHORITIES. IN VIEW OF THE ABOVE FACTS READ WITH DEFINITION OF 'CAPITAL ASSET' U/S 2(14), IT BECOMES AMPLY CLEAR THAT THE LAND TRANSFERRED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATI ON WAS NOT A 'CAPITAL ASSET' AT ALL. ONCE AN ASSET DOES NOT FALL WITHIN THE AMBIT OF 'CAPITAL ASSET' IN TERMS OF SECTION 2(14) OF THE ACT, QUESTION OF CHARGING ANY TAX ON GAIN ARISING ON SALE THEREOF WOULD NOT ARISE AT ALL. CONSEQUENTLY, QUESTION OF CLAIM ING EXEMPTION UNDER SECTION 54B OR DENIAL THEREOF WOULD NOT ARISE AT ALL. IN VIEW OF THE ABOVE, EXEMPTION U/S 54B OF THE ACT CANNOT BE DENIED. 11. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW BY REITERATING TH E FINDINGS IN THE RESPECTIVE ORDERS AND FURTHER CONTENDED THAT THE MATTER SHOULD BE SETASIDE TO THE AO FOR VERIFICATION WHETHER THE IMPUGNED LAND IS A CAPITAL ASSETS WITHIN THE MEANING OF PROVISIONS OF SECTION 2(14) OF THE ACT. 12. WE HAVE HEARD THE RIVA L CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE CASE ON HAND RELATES WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION/EXEMPTION UNDER SECTION 54B OF THE ACT AMOUNTING TO 39,36,476/ - ON THE SALE OF AGRICULTU RAL LAND. FOR THIS PURPOSE, WE FIND RELEVANT TO REFER THE PROVISIONS OF SECTION 54B OF THE ACT WHICH READS AS UNDER: IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 7 54B. (1) SUBJECT TO THE PROVISIONS OF SUB - SECTION (2), WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING USED BY THE ASSESSEE BEING AN INDIVIDUAL OR HIS PARENT, OR A HINDU UNDIVIDED FAMILY FOR AGRICULTURAL PURPOSES (HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET) , AND THE ASSESSEE HAS, WITHIN A PERIOD OF TWO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES, THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME - TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, ( I ) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER THAN THE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS THE NEW ASSET), THE DIFFERENC E BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE NIL ; OR ( II ) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPIT AL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERI OD OF THREE YEARS OF ITS PURCHASE, THE COST SHALL BE REDUCED, BY THE AMOUNT OF THE CAPITAL GAIN 12.1 ON PERUSAL OF THE ABOVE PROVISIONS WE NOTE THAT, TO CLAIM THE EXEMPTION UNDER SECTION 54B OF THE ACT WITH RESPECT TO THE CAPITAL GAIN ARISING ON THE SALE OF LAND THE ASSESSEE IS REQUIRED TO USE SUCH LAND FOR AGRICULTURAL OPERATIONS FOR A PERIOD OF 2 YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE LAND WAS TRANSFERRED. THERE WAS NO REQUIREMENT THAT THE LAND WHICH WAS SOLD HAS TO BE AN AGRICULTURAL LAND. AS SUCH THE LAND SHOULD HAVE BEEN USED ONLY FOR AGRICULTURAL OPERATIONS FOR A PERIOD OF 2 YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE LAND WAS TRANSFERRED. 12.2 WE FURTHER NOTE THAT THE ASSESSEE BEFORE THE AUTHORITIES BELOW HAS CLAIMED TO HAVE USED T HE LAND FOR THE AGRICULTURAL OPERATIONS AND THIS FACT HAS NOT BEEN DOUBTED BY THE AUTHORITIES BELOW. THEREFORE IT SEEMS THAT SUCH LAND WAS USED FOR AGRICULTURAL PURPOSES FOR 2 YEARS IMMEDIATELY FROM THE DATE OF SALE/TRANSFER OF THE LAND. CONSEQUENTLY, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54B OF THE ACT. 12.3 IN HOLDING SO WE DRAW SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE HIGH COURT OF PUNJAB AND HARYANA IN CASE OF CIT VS. SMT. SAVITA RANI REPORTED IN 270 ITR 40 WHEREIN IT WAS HELD AS UNDER: FROM A PLAIN READING OF SECTION 54B, IT IS CLEAR THAT TO CLAIM THE BENEFIT OF THIS PROVISION, THE FOLLOWING CONDITIONS ARE REQUIRED TO BE SATISFIED : IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 8 ( I )THE CAPITAL GAINS ARISE FROM THE TRANSFER OF LAND, WHICH, IN THE TWO YEARS IMMEDIATELY PREC EDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING USED BY THE ASSESSEE OR HIS PARENT FOR AGRICULTURAL PURPOSES; AND ( II )THE ASSESSEE HAS PURCHASED THE LAND WITHIN A PERIOD OF TWO YEARS AFTER THE SALE OF THE ABOVE LAND FOR BEING USED FOR AGRICULTU RAL PURPOSES. THERE WAS NO DISPUTE REGARDING CONDITION NO. ( II ). THE DISPUTE WAS REGARDING CONDITION NO. ( I ). THE EXEMPTION IS AVAILABLE TO THE SELLER OF A CAPITAL ASSET BEING LAND . IT DOES NOT RESTRICT THE BENEFIT TO THE AGRICULTURAL LAND ONLY. HOWEVER, THE LAND AGAINST WHICH THE BENEFIT IS SOUGHT MUST HAVE BEEN USED BY THE ASSESSEE OR HIS PARENT FOR AGRICULTURAL PURPOSES IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE OF SALE. FROM THE FACTS STATED BY THE ASSESSING OFFICER HIMSELF, IT WAS EVIDENT THAT T HAT CONDITION WAS CLEARLY FULFILLED. IT HAD BEEN OBSERVED THAT POPLAR PLANTATION STOOD ON THAT LAND TILL 1988 - 89. IT HAD ALSO BEEN STATED THAT THE FODDER GRASS AND VEGETABLES WERE GROWN IN KHARIF SEASON. THE KHASRA GIRDAWARI PRODUCED BY THE ASSESSEE ALSO S HOWED THAT AGRICULTURAL OPERATIONS ON THAT LAND WERE BEING CARRIED ON BY THE ASSESSEE AND OTHER CO - OWNERS TILL ITS SALE. EVEN THE RECORDS OF THE INCOME - TAX DEPARTMENT SHOWED THAT THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME FROM THAT LAND IN HER RETURNS O F THE PRECEDING TWO YEARS. [PARA 6] 12.4 AT THE TIME OF HEARING THE LEARNED DR HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE EXEMPTION WAS CLAIMED BY THE ASSESSEE AFTER VIOLATING THE PROVISIONS OF LAW INSOFAR THE LAND IN QUESTION THAT IT WAS NOT USED FOR THE AGRICULTURAL OPERATIONS. ACCO RDINGLY, WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FOR THE EXEMPTION UNDER SECTION 54B OF THE ACT. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 1 3 . THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO. 2 AND THE ADDITIONAL GROUND IS INTERCONNECTED AND THEREFORE WE HAVE CLUBBED BOTH OF THEM TOGETHER FOR THE PURPOSE OF ADJUDICATION FOR THE SAKE OF BREVITY AND CONVENIENCE. 13. 1 THE 2 ND ISSUE RAISED BY THE ASS ESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY DENYING THE EXEMPTION CLAIMED UNDER SECTION 54B OF THE ACT AMOUNTING TO 23,18,248/ - ONLY. 14. THE ASSESSEE IN THE RETURN FILED UNDER SECTION 153A OF THE ACT HAS CLAIMED EXEMP TION UNDER SECTION 54B OF THE ACT AMOUNTING TO 23,18,248/ - AGAINST THE SHORT - TERM CAPITAL GAIN. HOWEVER, THE AO FOUND THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54B OF THE ACT IF SUCH LAND IS CONTINUOUSLY USED FOR THE PURPOSE OF AGRICULTUR AL OPERATIONS FOR A PERIOD OF 2 YEARS BEFORE THE DATE OF TRANSFER. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 9 AS SUCH THE LAND WAS PURCHASED BY THE ASSESSEE DATED 19 TH NOVEMBER 2008 WHICH WAS SOLD DATED 11 TH MARCH 2010. THUS, IT IS CLEAR THAT THE LAND WAS USED BY THE ASSESSEE FOR THE AGRICULTURAL O PERATIONS FOR A PERIOD LESS THAN 2 YEARS. AS SUCH THE USE OF THE LAND FOR AGRICULTURAL OPERATION FOR 2 YEARS WAS MANDATORY FOR CLAIMING THE EXEMPTION UNDER SECTION 54B OF THE ACT. ACCORDINGLY THE AO, REJECTED THE CLAIM OF THE ASSESSEE AND CONFIRMED THE ADD ITION OF EXEMPTION CLAIMED UNDER SECTION54B OF THE ACT BY ADDING THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 15. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 15.1 THE ASSESSEE BEFORE THE LEARNED CIT (A) CONTENDED THAT THE IMPUGNED L AND WAS IN USE FOR THE AGRICULTURAL OPERATIONS BEFORE THE PURCHASE WHICH IS STILL CONTINUING. ACCORDINGLY THE ASSESSEE CONTENDED THAT THE LAND IN DISPUTE IS NOT A CAPITAL ASSET BEING AN AGRICULTURAL LAND IN PURSUANCE TO THE PROVISIONS OF SECTIONS 2(14) OF THE ACT. CONSEQUENTLY, THE QUESTION OF CHARGING THE CAPITAL GAIN ON SUCH INCOME DOES NOT ARISE VIZ A VIZ THE QUESTIONS FOR CLAIMING THE EXEMPTION UNDER SECTION 54B OF THE ACT DOES NOT HAVE ANY RELEVANCE. 16. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE C ONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 4.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPEALLANT. UNDISPUTEDLY, THE AGRICULTURAL LAND SOLD BY THE APPELLANT AT VILLAGE NARDIPUR WAS NOT CONTINUOUSLY HELD FOR TWO YEARS FOR BEING USED FOR AGRICULTUREAL PRUPOSE. THE BASIC CONDITION OF GRANTING EXEMPTION UNDER SECTION 54B IS THAT THE LAND SOLD MUST HAVE BEEN USED BY THE ASSESSEE FOR AT LEAST TWO YEARS PRIOR TO THE DATE OF TRANSFER FOR AG RICULTURAL PURPOSES. THE APPELLANT HAS PURCHASED LAND ON 19.11.2008 AND SOLD ON 11.03.2010. THUS THE CONDITION OF CONTINUED USE OF LAND FOR AGRICULTURE IS NOT SATISFIED. HENCE THE A.O IS RIGHT IN REFUSING TO GRANT EXEMPTION. THIS GROUND IS DISMISSED. 17. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 18. THE LEARNED AR BEFORE US SUBMITTED THAT THE LAND IN QUESTION IS AN AGRICULTURAL LAND WHICH IS NOT A CAPITAL ASSET IN PURSUANCE TO THE PROVISIONS OF SECTION IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 10 2(14 ) OF THE ACT. ACCORDINGLY, THE SAME IS NOT SUBJECT TO TAX UNDER THE HEAD CAPITAL GAIN. CONSEQUENTLY, THE QUESTION OF CLAIMING OR DENYING THE EXEMPTION UNDER SECTION 54B OF THE ACT BECOMES IMMATERIAL. 19. ON THE OTHER HAND THE LEARNED DR CONTENDED THAT IF THE LAND IN QUESTION IS NOT A CAPITAL ASSET THEN THERE WAS NO REASON FOR CLAIMING THE EXEMPTION UNDER SECTION 54B OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ASSESSEE HAS CLAIMED EXEMPTION ON THE CAPITAL GAIN OF 23,18,248/ - ARISING ON THE SALE OF AGRICULTURAL LAND. BUT THE SAME WAS DENIED BY THE AO ON THE REASONING THAT THE LAND WAS NOT USED CONTINUOUSLY FOR 2 YEARS FOR THE AGRICULTURAL OPERATIONS BY THE ASSESSEE. THE VIEW TAKEN BY THE AO WAS SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT (A). 20.1 ADMITTEDLY, THE ASSESSEE HELD THE IMPUGNED LAND FOR A PERIOD LESS THAN 2 YEARS AND THEREFORE THE REQUISITE CONDITIONS SPECIFIED UNDER SECTION 54B OF THE ACT HAVE NOT BEEN SATISFIED. THEREFORE WE CONCUR WITH THE FINDING OF THE AUTHORITIES BELOW. 20.2 HOWEVER THE LEARNED AR FOR THE ASSESSEE VIDE ADDITIONAL GROUND CHANGED THE STAND AND CLAIMED THAT THE IMPUGNED LAND DOES NOT FALL UNDER THE PURVIEW OF CAPITAL ASSET AS PER PROVIDED UNDER SECTION 2(14) OF THE ACT. IN THIS REGARD WE NOTE THAT THERE WAS ALSO A SPECIFIC CONTENTION RAISED BY THE ASSESSEE BEFORE THE LEARNED CIT (A) STATING THAT THE LAND IN QUESTION WAS NOT A CAPITAL ASSETS BEING AN AGRICULTURAL LAND WITHIN THE MEANING OF THE PROVISIONS OF SECTION 2(14) OF THE ACT AND SUCH CONTENTION HAS NOT BEEN DISPUTED BY THE LEARNED CIT (A). AS SUCH THE LEARNED CIT(A) GIVEN THE FINDING THAT UNDISPUTEDLY, THE AGRICULTURAL LAND SOLD BY THE APPELLANT . IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 11 20.3 BE THAT AS MAY BE, THE NEXT ASPECT THAT ARISES FOR OUR CONSIDERATION WHETHER THE IMPUGNED LAND WAS AGRICU LTURAL LAND AND THEREFORE THE SAME IS NOT CAPITAL ASSET WITHIN THE PROVISIONS OF SECTION 2(14) OF THE ACT IN THE GIVEN FACTS AND CIRCUMSTANCES. TO HOLD AN AGRICULTURAL LAND OUTSIDE THE PURVIEW OF CAPITAL ASSET, THE FOLLOWING CONDITIONS NEEDS TO BE SATISFIE D: 1. THE LAND SHOULD BE OUT OF THE MUNICIPALITY OR NAGAR PALIKA HAVING POPULATION OF MORE THAN 10 THOUSAND. 2. THE LAND SHOULD BE AERIALLY OUT OF: 2 KMS IN CASE OF NEAREST MUNICIPALITY OR NAGAR PALIKA HAVING POPULATION OF MORE THAN 10000 BUT NOT EXCEEDING 1000 00/ - 6 KMS IN CASE OF NEAREST MUNICIPALITY OR NAGAR PALIKA HAVING POPULATION OF MORE THAN 1,00,000 BUT NOT EXCEEDING 10,00,000/ - 8 KMS IN CASE OF NEAREST MUNICIPALITY OR NAGAR PALIKA HAVING POPULATION OF MORE THAN 10,00,000/ - 20.4 WE ALSO NOTE THAT THE LEARNED AR HAS DRAWN OUR ATTENTION TO CENSUS REPORT OF THE VILLAGE NARDIPUR OF KALOL TEHSIL OF GANDGHI NAGAR DISTRICTS WHERE IMPUGNED LAND IS SITUATED. THE COPY OF CENSUS REPORT PLACED AT PAGE 679 OF THE PAPER BOOKS. FROM THE REPORT W E FIND THAT NARDIPUR VILLAGE HAS POPULATION OF 8 THOUSAND ONLY. FROM THE GOOGLE SEARCH WE FIND THAT THE NARDIPUR VILLAGE IS ALSO A GRAM PANCHAYAT AND SITUATED 13 KM AWAY FROM SUB - DISTRICT HEADQUARTER KALOL AND 20 KM AWAY FROM DISTRICT HEADQUARTER GANDHINAG AR. THEREFORE IN OUR CONSIDERED VIEW THE IMPUGNED LAND FULFILS THE CRITERIA OF BEING AN AGRICULTURAL LAND. HENCE THE SAME IS OUTSIDE THE PURVIEW OF CAPITAL ASSET AND NOT LIABLE TO TAX UNDER THE HEAD CAPITAL GAIN. ACCORDINGLY WE SET ASIDE THE ORDER OF THE L EARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE ISSUE RAISED BY THE ASSESSEE VIDE ADDITIONAL GROUND OF APPEAL IS ALLOWED. 20.5 IN THE RESULT APPE AL OF THE ASSESSEE IS ALLOWED. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 12 21. COMING TO IT(SS) NO. 151 /AHD/2017 IN TH E C ASE OF SHRI SHAILESH B PATEL FOR THE AY 2010 - 11 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 . THE ID CIT( APPEALS) ERRED BOTH IN LAW AND ON FACTS IN NOT GRANTING EXEMPTION U/S 54B IN RESPECT OF PURCHASE OF AGRICULTURAL LAND MADE OUT OF CASH RECEIPTS ON SALE OF AGRICULTURAL LAND AT SURVEY NOS L97/L AND 198/1 . SINCE THE AMOUNT OF SALES PROCEEDS RECEIVED TOWARDS SALE OF AGRICULTURAL LAND WERE UTILIZED AS PER CONDITIONS OF SECTION EXEMPTION U/S 54B OF THE ACT OUGHT TO HAVE BEEN ALLOWED WHEN THE CAPITAL GAIN IS CHARGED TO TAX.. IT BE DIRECTED TO BE ALLOWED NOW. 2. THE ID' CIT(APPEALS) ERRED IN LAW AND ON FACTS I N NOT APPRECIATING THE LEGAL POSITION EXPLAINED TO HIM THAT THE PRIME REQUIREMENT OF ALLOWING EXEMPTION U/S 54B IS REGARDING THE UTILIZATION OF PROCEEDS OF SALE OF AGRICULTURAL LAND IN PURCHASE OF AGRICULTURAL LAND WHICH IS DONE BY THE APPELLANT AND SINCE THE SAID FACT IS NOT DISPUTED MERELY BECAUSE SUCH UTILIZATION WAS MADE IN EARLIER YEAR, EXEMPTION CANNOT BE DENIED WHEN ALL OTHER CONDITIONS ARE OTHERWISE FULFILLED IT BE SO HELD NOW AND EXEMPTION TO THE EXTENT OF SUCH UTILIZATION OF CASH RECEIPT TAXED AS SALES CONSIDERATION. 3. THE ID CIT(APPEALS) ERRED IN NOT FOLLOWING THE CASE LAWS CITED AND IN REFUSING TO ALLOW GROUND TAKEN BEFORE HIM WHICH HE OUGHT TO HAVE ALLOWED. 4. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 22. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY DISALLOWING THE EXEMPTION CLAIMED UNDER SECTION 54B OF THE ACT. 23. AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN THE FAVOUR OF THE ASSESSEE IN IT(SS) NO 150/AHD/2017 IN THE CASE OF SHRI BALDEV F PATEL VIDE PARAGRAPH NO . 12 OF THIS ORDER. RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE GROUND OF AP PEAL OF THE ASSESSEE. 24. THE 2 ND ISSUE RAISED BY THE ASSESSEE VIDE GROUND NO - 2 AND ADDITIONAL GROUND RAISED VIDE LETTER DATED 25 - 11 - 2010 IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY DENYING THE EXEMPTION CLAIMED UNDER SECTIO N 54B OF THE ACT, THOUGH THE PROPERTY IN QUESTION DOES NOT FALL UNDER PURVIEW OF CAPITAL ASSET BEING IN THE NATURE OF AGRICULTURAL LAND. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 13 25. AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN THE FAVOUR OF THE ASSESSEE IN IT(SS) NO . 150/AHD/2017 IN THE CASE OF SHRI BALDEV F PATEL VIDE PARAGRAPH NO . 20 OF THIS ORDER. RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE. 25.1 IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. 26. COMING TO IT(SS) NO. 121 /AHD/2017 FOR A.Y. 2009 - 10 IN THE CASE OF SHRI BALDEV F . PATEL . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND AT RUPAL OF RS.56,75,626/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND AT ACHER OF RS.96,18,000/ - . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF LAND AT NARDIPUR OF RS.67,19,537/ - . 4. ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 27. THE INTERCONNECTED ISSUE RAISED BY THE REVENUE IS THAT THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 56,75,626, 96,18,000/ - AND 67,19,537 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTIES. . 28. THE FACTS IN BRIEF ARE THAT THERE WAS A SEARCH AND SEIZU RE OPERATION UNDER SECTION 132 OF THE ACT DATED 27 TH APRIL 2011 AT THE PREMISES OF THE ASSESSEE. DURING THE SEARCH, CERTAIN INCRIMINATING DOCUMENTS BEARING ANNEXURE A - 1 PAGE 48 & 49 AND ANNEXURE A - 3 PAGE 3 - 5 WERE FOUND SUGGESTING THAT THE ASSESSEE HAS MADE CASH PAYMENT AGAINST PURCHASE OF PROPERTY AT VILLAGE NAMELY RUPAL, ACHER AND NARDIPUR IN GANDHI NAGAR DISTRICT OF GUJARAT. ON CONFRONTATION OF THE SAME THE ASSESSEE IN THE STATEMENT FURNISHED UNDER SECTION 132 (4) OF THE ACT HAS ACCEPTED IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 14 TO HAVE MADE CASH PAYMENT OVER AND ABOVE REGISTERED VALUE WHICH REPRESENT S HIS UNDISCLOSED INCOME. 28.1 HOWEVER THE ASSESSEE DID NOT INCORPORATE SUCH UNACCOUNTED INCOME AS ADMITTED DURING THE SEARCH PROCEEDINGS IN THE RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT. THE ASSESSEE REASONED THAT THE IMPUGNED CASH PAYMENT IN THE PURCHASE OF ABOVE MENTIONED PROPERTIES REPRESENT RE - INVESTMENT OF THE UNACCOUNTED MONEY RECEIVED AGAINST THE SALE OF AGRICULTURAL LAND ALONG WITH CO - OWNERS SITUATED AT MOTERA VILLAGE BEARING SURV EY NO - 197/1/ AND 198/1 WHEREIN AN AMOUNT OF 2.75 CRORE (UNACCOUNTED) ALONG WITH HIS SON WAS RECEIVED WHICH WAS OFFERED TO TAX IN THE RETURN FILED UNDER SECTION 153A OF THE ACT FOR A.YS 2007 - 08 TO 2010 - 11. IN OTHER WORDS THE CASH PAYMENT MADE OVER AND AB OVE REGISTERED VALUE AGAINST PURCHASE OF ABOVE MENTIONED PROPERTIES WAS FINANCED FROM THE RECEIPT AGAINST MOTERA VILLAGE LAND WHICH HAS ALREADY SUFFERED TAX. THUS THE ASSESSEE IS NOT REQUIRED TO SHOW ANY ADDITIONAL INCOME FOR CASH PAYMENT AS DISCUSSED ABOV E. 28.2 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THERE WAS NO DIRECT EVIDENCE BROUGHT ON RECORD SUGGESTING THAT THE ASSESSEE HAS UTILISED THE CASH RECEIVED AGAINST THE SALE OF THE PROPERTY BEARING NUMBER 197/1 AND 1 98/1 FOR THE INVESTMENT IN THE PROPERTIES AS DISCUSSED ABOVE. 28.3 THE AO ALSO FOUND THAT THE ASSESSEE IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT HAS ACCEPTED THAT THE AMOUNT NOTED ON THE INCRIMINATING MATERIAL FOUND DURING SEARCH REPRESE NT HIS UNDISCLOSED INVESTMENT. AS SUCH THE ASSESSEE OF AGREED TO DISCLOSE SUCH INVESTMENTS IN THE PROPERTIES AS INCOME IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT. 28.4 ACCORDINGLY, THE AO TREATED THE AMOUNT PAID OVER AND ABOVE THE REGISTE RED VALUE OF THE PROPERTIES DECLARED IN THE REGISTERED DOCUMENTS AS UNEXPLAINED INVESTMENTS AND MADE ADDITION FOR 56,75,626/ - , 96,18,000/ - AND 1,03,63,387/ - TO THE TOTAL INCOME OF THE ASSESSEE. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 15 29. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LE ARNED CIT (A) WHO DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 6.2 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER, OBSERVATIONS OF THE ASSESSING OFFICER AND THE CONTENTIONS OF THE APPELLANT. THE APPELLANT HAS EXPLAINED THAT THE INVESTMENT ON PURCHASE OF VARIOUS LANDS BY PAYMENT OF CASH CAME FROM OUT OF RECEIPT OF CA SH ON SALE OF OTHER LAND AND AVAILABILITY THEREOF ALONG WITH OTHER RECEIPTS BY WAY OF WITHDRALWS FORM BANK ACCOUNT THE CASH FLOW STATEMENT SHOWING RECEIPTS OF CASH ON SALE OF LAND INCLUDING CASH RECEIPTS OF ON - MONEY WHICH IS ACCEPTED BY THE APPELLANT AND A LSO BY THE ASSESSING OFFICER IS SHOWN AS SOURCES OF RECEIPTS AND PAYMENT THERE FROM. THE ASSESSING OFFICER HAS NOT FOUND ANY DISCREPANCY IN THESE CASH FLOW STATEMENTS NOR ANY ENTRY THEREIN IS FOUND TO BE NOT VERIFIABLE WITH REFERENCE TO THE LOOSE PAPERS FO UND DURING SEARCH AND WITH REFERENCE TO THE BANK STATEMENTS OF THE APPELLANT FOR FEW ENTRIES OF CASH WITHDRALWS FROM BANK. THE ASSESSING OFFICER HAS MADE ADDITION MERELY BY OBSERVING THAT DIRECT NEXUS IS NOT EXPLAINED. ONCE THE AVAILABILITY OF CASH FROM SA LE OF LAND INCLUDING CASH RECEIPTS OF ON - MONEY IS ACCEPTED, THERE IS NO JUSTIFICATION TO IGNORE THE SAME WHEN THE SAME IS UTILIZED FOR SUBSEQUENT PAYMENT OF CASH ON PURCHASE OF LANDS. THE CASH FLOW STATEMENT GIVES COMPLETE DETAILS OF DATE WISE RECEIPT OF CASH AND PAYMENT THEREOF AND HENCE WITHOUT ANY EVIDENCE OR MATERIAL THAT THE SAID CASH IS UTILIZED SOME WHERE ELSE, THE ADDITION CANNOT BE MADE ON THE GROUND THAT PAYMENT OUT OF SUCH AVAILABLE BALANCE WAS NOT ESTABLISHED. THE APPELLANT FILED CASH BOOK IN T HE FORM OF PAPER BOOKS FOR ALL THESE YEARS. THIS CASH BOOK HAS BEEN PREPARED MERELY ON THE BASIS OF DOCUMENTS FOUND & SEIZED DURING THE COURSE OF SEARCH AND RELIED BY THE A.O. FOR MAKING ADDITION IN VARIOUS ASSESSMENT YEARS AND ON THE BASIS OF BANK ACCOUNT S, WHICH ARE REGULAR AND DISCLOSED TO THE DEPARTMENT BY THE APPELLANT IN THE RETURN OF INCOME REGULARLY FILED. THEREFORE, THE CASH BOOK SUBMITTED BY THE APPELLANT IS FULLY RELIABLE. I HAVE PERSONALLY VERIFIED EACH AND EVERY ENTRY OF THE CASH BOOK FOR ALL T HESE YEARS. EACH ENTRY OF CASH CREDITED HAS BEEN FOUND EXPLAINED WITH THE HELP OF THE ENTRY MENTIONED IN THE LOOSE PAPERS SEIZED DURING THE COURSE OF SEARCH OR THE WITHDRAWAL FROM THE BANK ACCOUNT WHICH IS REFLECTED IN THE REGULAR RETURN OF INCOME. SIMILAR LY, THE INVESTMENTS MADE IN CASH FOR PURCHASE OF THREE LANDS ARE FULLY EXPLAINED FROM THE CASH BALANCE AVAILABLE WITH THE APPELLANT. IN SUCH SITUATION, WHERE THE RECEIPTS OF CASH HAVE BEEN TAXED IN THE HANDS APPELLANT, THE ADDITION OF THE INVESTMENTS MADE FROM THE SAME RECEIPTS IS AMOUNTING TO DOUBLE TAXATION, WHICH IS NOT PERMISSIBLE UNDER THE IT. ACT. THE EVIDENCES FOUND DURING THE COURSE OF SEARCH & SEIZURE PROCEDURE SHOULD BE CONSIDERED IN TOTALITY AND SELECTIVE OR PARTLY USE OF THE EVIDENCE IS NOT PERM ISSIBLE, AS PER VARIOUS JUDGMENTS OF THE SEVERAL JUDICIAL AUTHORITIES. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 6.4 IT IS ALSO PERTINENT THAT DURING THE COURSE OF SEARCH , NO OTHER EVIDENCE REGARDING UTILIZATION OF SAID CASH FOR SOME OTHER PURPOSES WERE FOUND NOR ANY SUCH CASH WAS PHYSICALLY FOUND. THEREFORE WHEN THE TRANSACTIONS RELATING TO CASH RECEIPTS | AND CASH PAYMENTS ARE FOUND DURING THE SEARCH PROCEEDINGS, THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN ACCEPTING RECEIPT PART AND REJECT THE EXPLANATION REGARDING PAYMENT PART THERE FROM . CONSIDERING ENTIRETY OF FACTS AND LEGAL POSITION EMERGING FROM THE AFORE SAID CASE LAWS, I AM INCLINED TO AGREE WITH THE SUBMISSIONS OF THE APPELLANT THAT INVESTMENT IN PURCHASE OF LANDS WAS FULLY AND SATISFACTORILY EXPLAINED WITH REFERENCE TO THE CASH AVAILABLE AS PER CASH FLOW STATEMENTS AND HENCE ADDITION OF RS. 56,75,6267 - IN RESPECT OF INVESTMENT IN PURCHASE OF LAND BEARING SURVEY NO .1642,1626 PAIKI AND 1699/1 AT VILLAGE RUPAL, GANDHINAGAR AND RS.96,18,000/ - IN RESPECT OF INVESTMENT IN PURCHASE OF LAND BEARING SURVEY NO.163/4 AT VILLAGE ACHER, GANDHINAGAR AND RS.67.19,537/ - IN RESPECT OF INVESTMENT IN PURCHASE OF LAND BEARING SURVEY N O.826/1 & 826/2 AT VILLAGE NARDIPUR ARE DESERVE TO BE DELETED, HENCE DELETED. THESE THREE GROUNDS OF APPEAL (I.E 1,2 &3) ARE ALLOWED. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 16 30 . BEING AGGRIEVED BY THE ORD ER OF THE LEARNED CIT (A), THE R EVENUE IS IN APPEAL BEFORE US. 31 . THE LEARNED DR BEFORE US SUBMITTED THAT THERE IS NO NEXUS BETWEEN THE AMOUNT RECIVED ON SALE OF LAND WHICH WAS OFFERED TO TAX VIZ A VIZ THE AMOUNT INVSTED OVER AND ABOVE THE VALUE DECLARED IN THE PURCHASE DEED. THE LD. DR SUPPORTED THE ORDER OF THE AO. 32 . ON THE OTHER HAND T HE LEARNED AR BEFORE US REITERATED THE CONTENTIONS MADE BEFORE THE AUTHORITIES BELOW. THE LD. AR SUPPORTED THE ORDER OF THE LD. CIT - A. 33 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS OF THE CASE HAVE ALREADY BEEN DISCUSSED IN THE PRECEDING PARAGRAPH WHICH ARE NOT IN DISPUTE. THEREFORE WE ARE NOT INCLINED TO REPEAT THE SAME FOR THE SAKE OF BREVITY AND CONVENIENCE. 33 .1 ADMITTEDLY, CERTAIN INCRIMINATING DOCUMENTS MARKED AS ANNEXURE - A1 PA GE NO - 36 - 40 WERE FOUND DURING THE SEARCH CONDUCTED AT THE PREMISES OF THE ASSESSEE SHOWING THE UNACCOUNTED RECEIPT AMOUNTING TO 5.50 CRORES AGAINST THE SALE OF THE PROPERTIES AT MOTERA VILLAGE BEARING SURVEY NUMBER 197/1 AND 198/1. AS PER THE INCRIMINATI NG DOCUMENT BEARING NUMBER ANNEXURE - A1 PAGE NO - 36 - 40 THE IMPUGNED AMOUNT OF UNACCOUNTED CASH WAS RECEIVED BY THE ASSESSEE ON DIFFERENT DATES AS DETAILED BELOW: DATE OF RECEIPT TOTAL CASH RECEIVED AS PER PAGE NO.40 CASH RECEIVED BY BALDEVBHAI & SHAILESH A S PER PAGE NO.37 CASH RECEIVED BY MUKESH & SANJAY AS PER PAGE NO.36 19.07.06 2100000 1900000 200000 06.09.06 3900000 3900000 0 06.09.06 4000000 0 4000000 09.10 IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 17 33 .2 ACCORDINGLY THE ASSESSEE ACCEPTED SUCH UNACCOUNTED RECEIPT BY OFFERING THE SAME TO TAX IN THE INCOME TAX RETURN OVER A PERIOD OF 3 ASSESSMENT YEARS AS DETAILED BELOW : PARTICULARS AY 2007 - 08 AY 2008 - 09 AY 201 0 - 11 TOTAL NATURE OF RECEIPTS CASH CASH CHEQUES CASH + CHQ SHARE IN SALE CONSIDERATION BF PATEL 17,162,090 817,280 16,128,750 34,108,120 LESS: AMOUNT RECEIVED FOR UNSOLD 199/2 5,605,170 - - 5,605,170 SALE CONSIDERATION OF 197/1 & 198/1 (A) 11,556,920 817,280 16,128,750 28,502,950 33 .3 OUT OF THE TOTAL AMOUNT OF 5.50 CRORES A SUM OF 2.75 CRORES WAS BELONGING TO THE ASSESSEE AND HIS SON NAMELY SHRI SHAILESH B. PATEL. 33 .4 HOWEVER THE AO TREATED THE ENTIRE AMOUNT OF 2.75 CRORES RECEIVED IN CASH AND OTHER AMOUNT RECEIVED THROUGH BANK ING CHANNEL AS THE INCOME OF THE ASSESSEE ALONG WITH HIS SON FOR THE ASSESSMENT YEAR 2010 - 11 WHICH WAS ALSO CONFIRMED BY THE LD. CIT - A. BUT THE ASSESSEE DID NOT SUBSEQUENTLY CHALLENGE THE SAME BEFORE ANY HIGHER FORUM. IN OTHER WORDS THE INCOME DETERMINED B Y THE AO OF THE ASSESSEE ALONG WITH HIS SON FOR THE ASSESSMENT YEAR 2010 - 11 HAS REACHED TO ITS FINALITY. 33 .5 NOW THE ISSUE ARISES FOR OUR ADJUDICATION WHETHER THE IMPUGNED AMOUNT OF 2.75 CRORES REPRESENTING UNACCOUNTED CASH RECEIPT AGAINST THE SALE OF PROPERTY WAS UTILISED FOR THE RE - INVESTMENTS IN THE PROPERTIES SITUATED AT VILLAGES RUPAK, ACHER AND NARDIPUR AS DISCUSSED ABOVE. IN THIS REGARD THE ASSESSEE CONTENDED THAT INVESTMENT WAS MADE OUT OF THE SALE PROCEEDS OF THE PROPERTIES AT MOTERA VILLAGE RECEIVED IN CASH WHICH WAS NOT ACCOUNTED. IN SUPPORT THE ASSESSEE MADE CASH FLOW STATEMENT SHOWING RECEIPT AND PAYMENT OF CASH AGAINST SALE AND PURCHASE OF LAND. INDEED AS PER THE INCRIMINATING DOCUM ENT THE ASSESSEE HAS RECEIVED THE CASH BEFORE THE INVESTMENT IN THE PROPERTIES AS DISCUSSED ABOVE. THUS IT SEEMS THAT THE INVESTMENT HAS BEEN MADE BY THE ASSESSEE AGAINST THE SALE PROCEEDS WHICH HAS IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 18 ALREADY BEEN OFFERED TO TAX AND ASSESSED IN THE ASSESSMEN T YEAR 2010 - 11 BY THE AO VIDE ORDER DATED 28 TH MARCH 2014. 33 .6 THUS THE BURDEN LIES UPON THE REVENUE TO PROVE THE ASSESSEE S CONTENTION WRONG BASED ON COGENT MATERIAL THAT THE AMOUNT RECEIVED BY THE ASSESSEE AGAINST THE SALE PROPERTIES BEARING SURVEY NO - 197/1 AND 198/1 AT MOTERA VILLAGE WAS NOT UTILISED FOR THE INVESTMENTS IN THE PROPERTIES AS DISCUSSED ABOVE. BUT THE REVENUE HAS NOT BROUGHT ANYTHING ON RECORD AND ALSO NOT POINTED ANY DEFECT IN CASH FLOW STATEMENT AS PREPARED BY THE ASSESSEE. THUS IN TH E ABSENCE OF ANY ADVERSE FINDING BY THE AO IN THE ASSESSMENT ORDER VIZ A VIZ NO MATERIAL BROUGHT ON RECORD BY THE LEARNED DR IN SUPPORT OF THE FINDING OF THE AO, WE CONCLUDE THAT THE INVESTMENT HAS BEEN MADE BY THE ASSESSEE OUT OF THE CASH RECEIPTS AS DISC USSED ABOVE WHICH HAS ALREADY BEEN SUBJECTED TO TAX. ACCORDINGLY ANY FURTHER ADDITION OF SUCH UNACCOUNTED CASH WILL LEAD TO DOUBLE ADDITION WHICH IS UNWARRANTED UNDER THE PROVISIONS OF LAW. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEAR NED CIT (A) AND THUS UPHOLD THE SAME. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 33 .7 IN THE RESULT APPEAL OF THE REVENUE DISMISSED . 34 . COMING TO IT(SS) NO - 120 /AHD/2017 FOR A.Y. 2011 - 12 IN THE CASE OF SHRI BALDEV F PATEL 35 . THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO FOR 70 LACS OUT OF THE TOTAL ADDITION MADE FOR 1.05 CRORES. 36 . BRIEFLY STATED FACTS ARE THAT THERE SEARCH AND SEIZURE OPERATION UNDER SE CTION 132 OF THE ACT CONDUCTED AT THE PREMISES OF THE ASSESSEE DATED 27 - 04 - 2011. AS A RESULT OF SUCH SEARCH A DOCUMENT, BEING INCRIMINATING IN NATURE, MARKED ANNEXURE A3 PAGE NUMBER 4 WAS FOUND. AS PER THIS DOCUMENT THE ASSESSEE HAS RECEIVED AN IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 19 AMOUNT OF 1.05 CRORE AGAINST SALE OF LAND BEARING SURVEY NUMBER 114 LOCATED AT MOTERA. BESIDES THIS, THERE WAS A SUM OF 20 LAKHS IN CASH ALSO FOUND DURING THE SEARCH. 36 .1 ON CONFRONTATION, THE ASSESSEE IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT ADMITTED TO HAVE SOLD A PROPERTY BEING NAVI SARAT LAND AT MOTERA AND RECEIPRT OF 1.05 CRORE RELATED TO SUCH TRANSACTION WHICH REPRESENT HIS UNACCOUNTED INCOME. FURTHER THE CASH IMPOUNDED OF 20 LAKHS IS PART OF THE RECEIPT OF 1.05 CRORES. HOWEVER, THE ASSESSEE DID NOT OFFER THE IMPUGNED AMOUNT AS UNACCOUNTED INCOME IN HIS INCOME TAX RETURN FILED UNDER SECTION 153A OF THE ACT. IT WAS CONTENDED BY THE ASSESSEE THAT THE PROPERTY BEARING NUMBER 114 WAS AGREED TO BE SOLD AT 1.10 CRORES AS PER THE BANKHAT EX ECUTED ON 26 - 11 - 2010. AS PER THE BANAKHAT THE PAYMENT TO BE RECEIVED ON THE SALE OF SUCH PROPERTIES WAS IN THE MANNER AS DETAILED BELOW: DATE AMOUNT CASH/POST DATED CHEQUE 03 - 12 - 2010 2500000 CHQ.NO.374963, BOB VADNAGAR 15 - 12 - 2010 2000000 CHQ NO.62711, UBOI, VASTRAPUR 07 - 01 - 2011 1500000 CHQ NO.374964, BOB, VADNAGAR 11 - 01 - 2011 2500000 CHQ NO.724944, CBOI, S.M. ROAD 13 - 02 - 2011 2000000 RECEIVED IN CASH FROM PURCHASER 36 .2 HOWEVER, THE IMPUGNED BANAKHAT WAS NOT EXECUTED ON ACCOUNT OF SOME DISPUTE AND THEREFORE THE SAME GOT CANCELLED. ACCORDINGLY, THE ASSESSEE DID NOT GET THE CHEQUES EN - CASHED AS STATED ABOVE AS WELL AS RETURNED THE AMOUNT OF 20 LAKHS WHICH WAS RECEIVED IN CASH. THUS THE ASSESSEE CLAIMED THAT HE HAS NOT OFFERED THE SAME AS INCOME. THE ASSESSEE ALSO SUBMITTED THAT HE HAS RETRACTED THE STATEMENT VIDE LETTER DATED 13 TH FEBRUARY 2014. THE ASSESSEE IN SUPPORT OF HIS CONTENTION ALSO SUBMITTED THAT THE LAND WHICH WAS TO BE SOLD IS STILL IN THE N AME OF HIS SON WHICH EVIDENCES THAT THE TRANSACTION FOR THE SALE OF LAND WAS NOT EXECUTED. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 20 36.3 HOWEVER, THE AO REJECTED THE CONTENTION OF THE ASSESSEE BY OBSERVING AS UNDER: (A) AS PER THE PAPER SEIZE AT PG NO.5 OF THE ANNEXURE A - 2, IT IS EVIDENT THAT ASSE SSEE HAS RECEIVED RS.1,05,00,000/ - ON VARIOUS DATED AS PROFIT FROM SALE OF LAND AT SURVEY NO.114, MOTERA. (B) ASSESSEE WAS ASKED TO EXPLAIN THE SAID NOTING. ASSESSEE HAS STATED THAT HE HAS RECEIVED POST DATED CHEQUES FOR SALE OF LAND AND ASSESSEE HAS RETURNED THE CHEQUES AS THE DEAL DID NOT MATERIALIZE. (C) WHEREAS, ON VERIFICATION OF THE SEIZED PAPER, IT IS FOUND THAT ASSESSEE HAS RECEIVED PROFIT FROM SALE OF SAID LAND. FURTHER, IT IS EVIDENT THAT NOWHERE ON SAID PAPER IT WAS MENTIONED THAT SUCH AMOUNT IS RECEIVED THROUGH CHEQUE AND ON SUCH PAGE, NOTING FOR PROFIT DISTRIBURING IS ALSO MADE. (D) THEREFORE, CONTENTION OF ASSESSEE THAT SUCH NOTING ARE FOR RECEIPT OF POST DATED CHEQUES IS BASELESS, WHEREAS SUCH NOTING ARE UNAC COUNTED MONEY RECEIVED IN CASH FOR SALE OF SAID LAND. (E) THE AFFIDAVIT FILED BY THE ASSESSEE IS DATED 13/02/2014 AND IS CLEARLY AN AFTERTHOUGHT. (F) FURTHER, AS PER THE STATEMENT RECORDED OF RTHE ASSESSEE U/S.132(4) OF THE ACT, ASSESSEE ACCEPTED THAT HE HAS REC EIVED SAID AMOUNT TOWARDS PROFIT ON SALE OF LAND AND DISCLOSED AS UNACCOUNTED INCOME. 37 . AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 38 . THE ASSESSEE BEFORE THE LEARNED CIT (A) REITERATED THAT THE PROPERTY IN QUESTION HAS NOT BEEN TR ANSFERRED TO THE PARTY AS IT STANDS IN THE NAME OF HIS SON, THE OWNER OF THE PROPERTY. ACCORDINGLY, ONCE THE PROPERTY HAS NOT BEEN TRANSFERRED, THE QUESTION OF BOOKING THE INCOME WITH RESPECT TO SUCH PROPERTY DOES NOT ARISE. 39 . HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO IN PART BY OBSERVING AS UNDER: HAVING CAREFULLY CONSIDERED THE OBSERVATIONS OF THE AO AND THE APPELLANT'S SUBMISSION, IT IS FOUND THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH AND THE DOCUMENTS FOUND. THE LOOSE PAPER FOUND & SEIZED DURING THE COURSE OF SEARCH AND AS REPRODUCED BY THE A.O. IN THE ASSESSMENT ORDER, CLEARLY PROVE THAT THE THREE PARTNERS EARNED THE PROFIT ON THE SAL E OF THE LAND UNDER CONSIDERATION. THE WORD 'NAFO' HAS BEEN USED, WHICH PROVE THAT THE TRANSACTION HAS BEEN COMPLETED. THE RECEIPT OF RS. 1,05,00,000 - IS ALSO MENTIONED DATE WISE IN FOUR INSTALLMENTS AND ALL DATES OF RECEIPT OF MONEY FALLS BEFORE THE DATE OF SEARCH. LOOKING TO THESE FACTS, THE CONTENTION OF THE APPELLANT THAT THIS TRANSACTION DID NOT MATERIALIZE IS NOT ACCEPTABLE. DURING THE COURSE OF SEARCH, NO EVIDENCE WAS FOUND, WHICH SHOW THAT THIS TRANSACTION DID NOT MATERIALIZE. EVEN AFTER THE DATE OF SEARCH AND TILL DISPOSAL OF THIS APPEAL BY THE UNDERSIGNED, THE APPELLANT FAILED TO ESTABLISH THAT THE AMOUNT RECEIVED WAS RETURNED THROUGH ACCOUNT PAYEE CHEQUE TO THE IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 21 OPPOSITE PARTY. IF THE TRANSACTION DID NOT MATERALISE, THE OTHER PARTY WILL GET BACK HI S MONEY BUT THE SAME HAS NOT BEEN DONE IN THIS CASE. THEREFORE, THIS CONTENTION OF THE APPELLANT IS REJECTED. KEEPING IN VIEW THESE FACTS, THE ADDITION MADE BY THE A.O. ARE FOUND JUSTIFIED. THE LOOSE PAPER INDICATED THAT THE AMOUNT OF RS. 1,05,00,0007 - WAS RELATING TO PROFIT OF DEAL IN RESPECT OF LAND AT VILLAGE MOTERA NAVI SARAT LAND. HOWEVER, FROM THE SAID LOOSE PAPER AS REPRODUCED BY A.O. AT PARA 4 PAGE 6 OF THE ASSESSMENT ORDER AND AS PER STATEMENT RECORDED, THERE WERE THREE PARTNERS IN THE SAID AMOUNT OF RS. 1,05,00,0007 - AND AMOUNT MENTIONED AGAINST THE APPELLANT'S NAME IS RS.70,00,000/ - . IT IS SETTLED LEGAL POSITION THAT A DOCUMENT OR STATEMENT HAS TO BE READ AS A WHOLE AND HENCE, ADDITION IN THE HANDS OF THE APPELLANT BASES ON THE SAID PAPER, CANNOT E XCEED RS.70,00,000/ - . I THEREFORE DIRECT THE AO TO RESTRICT THE ADDITION TO RS.70,00,000/ - . THE APPELLANT GETS A RELIEF OF RS.35,00,000/ - . THIS GROUND IS PARTLY ALLOWED. 40 . BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BE FORE US. 41 . THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 604 AND SUBMITTED THAT THE LAND IN QUESTION IS NEW TENURE LAND IN THE NAME OF ASSESSEE S SON SANJAY PATEL . AS SUCH, SANJAY PATEL AND PROSPECTIVE BUYER ENTERED INTO A BAN AKHAT BUT SUBSEQUENTLY DISPUTE AROSE WITH RESPECT TO CONVERSION OF NEW TENURE LAND INTO OLD TENURE LAND . ACCORDINGLY THE DEAL FOR THE SALE OF THE LAND WAS CANCELLED. THE LEARNED AR IN SUPPORT OF HIS CONTENTION HAS FILED THE AFFIDAVIT OF THE OWNER OF TH E PROPERTY AS WELL AS PURCHASER OF THE PROPERTY WHICH ARE PLACED ON PAGES 105 TO 108 AND 109 TO 112 OF THE PAPER BOOK. ACCORDINGLY THE LEARNED AR CONTENDED THAT THE CONTENTS OF THE AFFIDAVIT CANNOT BE BRUSHED ASIDE WITHOUT ANY COGENT REASONS. THE LEARNED A R IN THIS REGARD PLACED HIS RELIANCE ON THE JUDGMENT OF HON BLE GUJARAT HIGH COURT IN THE CASE OF GLASS LINES EQUIPMENT CO. LTD. VS. CIT REPORTED IN 253 ITR 454. 42 . ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT THERE WAS THE INCRIMINATING DOCUMENT REF LECTING THE ENTRIES FOR THE SALE OF THE PROPERTIES WHICH SHOWS THE INCOME GENERATED THEREON. 42 . 1 THE LEARNED D R FURTHER CONTENDED THAT WHETHER THE LAND IN QUESTION STANDS IN THE NAME OF THE OWNER OR NOT IS SUBJECT MATTER OF VERIFICATION. THEREFORE THE SAME CAN BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH VERIFICATION. IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 22 43 . THE LEARNED AR IN HIS REJOINDER SUBMITTED THAT THE AO HAD THE ACCESS TO ALL THE BANK ACCOUNTS OF THE ASSESSEE BUT HE DID NOT VERIFY THE FACT THAT WHETHER THE CHEQUES FOR THE SALE OF THE PROPERTY WAS RECEIVED BY THE ASSESSEE. AS SUCH THE ASSESSEE HAS NOT RE CEIVED ANY MONEY THROUGH THE CHEQUES AS THE DEAL GOT CANCELLED. 44 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION NOTE THAT THERE WAS A SEARCH CONDUCTED AT THE PREMISE S OF THE ASSESSEE WHEREIN A DOCUMENT BEARING NUMBER ANNEXURE A - 3 PAGE NO - 4 WAS RECOVERED WHICH WAS SHOWING THE RECEIPT OF MONEY ON ACCOUNT OF SALE OF THE PROPERTY BEARING SURVEY NUMBER 114 AT MOTERA WHICH WAS NOT OFFERED TO TAX THOUGH ADMITTED IN THE STATE MENT FURNISHED UNDER SECTION 132(4) OF THE ACT. ACCORDINGLY THE AO TREATED THE SAME AS UNACCOUNTED INCOME. SUBSEQUENTLY, THE LEARNED CIT (A) CONFIRMED THE ADDITION MADE BY THE AO IN PART BY OBSERVING THAT THE AMOUNT MENTIONED AGAINST THE NAME OF THE ASSESS EE STANDS AT 70 LACS ONLY. 44 .1 NOW THE QUESTION ARISES WHETHER THE ASSESSEE HAS SOLD THE IMPUGNED PROPERTY AND GENERATED AN INCOME OF 70 LACS ON SALE OF SUCH PROPERTY. ADMITTEDLY, THE PROPERTY WAS STANDING IN THE NAME OF THE ASSESSEE S SON DURING THE RELEVANT TIME WHICH EVIDENCES THE FACT THAT THE TITLE OF THE PROPERTY HAS NOT BEEN TRANSFERRED TO THE BUYER. THE FACT OF THE OWNERSHIP OF THE LAND IS WITH THE SON OF THE ASSESSEE CAN BE VERIFIED FROM THE DOCUMENT PLACED ON PAGES 286 - 290 OF THE PAPER BOOK S HOWING THE TITLE OF THE PROPERTY IN THE NAME OF THE ASSESSEE S SON. 44 .2 IT WAS ALSO CONTENDED THAT THERE WAS THE BANAKHAT DATED 26 - 11 - 2010 FOR THE SALE OF THE PROPERTY BETWEEN THE ASSESSEE AND THE BUYER WHICH IS AVAILABLE ON RECORD. AS PER THE BANKHAT T HE ASSESSEE WAS TO CONVERT THE LAND FROM NEW TENURE LAND INTO OLD TENURE LAND BEFORE THE TRANSFER OF THE PROPERTY. HOWEVER THE ASSESSEE FAILED TO DO SO AND THEREFORE THE DEAL GOT CANCELLED. IN THIS CONNECTION THE IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 23 AFFIDAVIT WAS ALSO FILED BY THE ASSESSE E AND THE PURCHASER DEMONSTRATING THAT THE DEAL FOR THE SALE OF THE PROPERTY WAS CANCELLED. THE AFFIDAVIT IS A VITAL PIECE OF EVIDENCE WHICH CANNOT BE BRUSHED ASIDE WITHOUT ANY COGENT REASON AS HELD BY THE HON BLE GUJARAT HIGH COURT IN THE CASE OF GLASS LI NES EQUIPMENT CO. LTD. REPORTED IN 253 ITR 454 WHEREIN IT WAS HELD AS UNDER: AS LAID DOWN BY THE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. V. CIT [1956] 30 ITR 181 , NONE OF THE AUTHORITIES CONSIDERED IT NECESSARY TO CROSS - EXAMINE THE DEPONENT WITH REFERENCE TO THE STATEMENT MADE IN THE AFFIDAVIT, AND, HENCE, UNDER THESE CIRCUMSTANCES IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNESS OF THE STATEMENT MA DE BY THE DEPONENT IN THE AFFIDAVIT. IN OTHER WORDS, CONSEQUENTLY, THE ASSESSEE WAS ENTITLED TO ASSUME THAT THE AUTHORITIES WERE SATISFIED WITH THE AFFIDAVIT AS SUFFICIENT PROOF ON THIS POINT. 44 .3 WE ALSO NOTE THAT THE CONTENTION OF THE ASSESSEE THAT HE WAS TO RECEIVE CERTAIN AMOUNT AGAINST THE SALE OF THE LAND THROUGH CHEQUE BUT THE SAME WERE NEVER PRESENTED TO THE BANK FOR THE REASON THAT THE DEAL GOT CANCELLED. IN THIS REGARD, NONE OF THE AUTHORI TIES BELOW HAS VERIFIED THE BANK STATEMENT OF THE ASSESSEE DESPITE HAVING THE ACCESS TO SUCH BANK ACCOUNTS. IN THE ABSENCE OF ANY ADVERSE FINDING FROM THE SIDE OF THE AUTHORITIES BELOW, IT SEEMS THAT THESE CHEQUES WERE NEVER EN - CASHED BY THE ASSESSEE. 44 .4 IT IS ALSO PERTINENT TO NOTE THAT THE AUTHORITIES BELOW WERE HAVING THE NECESSARY DETAILS OF THE BUYERS OF THE PROPERTY IN DISPUTE, BUT NONE OF THEM HAVE VERIFIED FROM THEM BY ISSUING ANY NOTICE UNDER SECTION 133(6)/131 OF THE ACT. INDEED, THERE WERE RE COVERED INCRIMINATING DOCUMENT SHOWING THE AMOUNT OF 1.05 CRORES BUT THAT DOES NOT BECOME THE INCOME OF THE ASSESSEE UNTIL AND UNLESS IT IS CORROBORATED BASED ON THE DOCUMENTARY EVIDENCE. 44 .5 HERE IT IS PERTINENT TO NOTE THAT THE CBDT HAS DISCOURAGED T O ITS OFFICERS TO MAKE THE ADDITION ON THE BASIS OF THE STATEMENTS AND WITHOUT BRINGING ANY TANGIBLE MATERIALS FOR ANY ADDITION/DISALLOWANCE. THE RELEVANT EXTRACT OF CBDT INSTRUCTIONS ISSUED VIDE F. NO. 286/98/2013 - IT(INV.II) DATED 18 TH OF DECEMBER 2014 RE ADS AS UNDER : - IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 24 INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HAVE COME TO NOTICE OF THE CBDT THAT SOME ASSESSEES WERE COERCED TO ADMIT UNDISCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTED BY THE DEPARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIONS ARE RETRACTED IN THE SUBSEQUENT PROCEEDINGS SINCE THE SAME ARE NOT BACKED BY CREDIBLE EVIDENCE. SUCH ACTIONS DEFEAT THE VERY PURPOSE OF SEARCH/SURVEY OPERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAINABLE MANNER LEAVE ALONE LEVY OF PE NALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHOW THE DEPARTMENT AS A WHOLE AND OFFICERS CONCERNED IN POOR LIGHT. 2. I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION TO THE INSTRUCTIONS/GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REFERRED ABO VE, THROUGH WHICH THE BOARDS HAS EMPHASIZED UPON THE NEED TO FOCUS ON GATHERING EVIDENCES DURING SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE. 3. IN VIEW OF THE ABOVE, WHILE REITERATING THE AF ORESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANCE OF UNDUE INFLUENCE/COERCION IN THE RECORDING OF THE STATEMENT DURING SEARCH/SURVEY/OTHER PROCEEDING UNDER THE IT ACT, 1961 AND/OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY. 44 .6 FROM THE ABOVE CIRCULAR IT IS CRYSTAL CLEAR THAT THE CBDT HAS EMPHASIZED TO ITS OFFICERS TO FOCUS ON GATHERING EVIDENCES DURING SEARCH/SURVEY OPERATIONS AND STRICTLY DIRECTED AVOID ING TO OBTAIN ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/ UNDUE INFLUENCE. KEEPING IN VIEW THE GUIDELINES ISSUED BY THE CBDT FROM TIME TO TIME REGARDING THE STATEMENTS OBTAINED DURING SEARCH AND SURVEY OPERATION, IT IS UNDISPUTEDLY CLEAR THAT THE LOWER AUTHORITIES HAVE NOT COLLECTED ANY OTHER EVIDENCE TO DIS PROVE THE CONTENTION OF THE ASSESSEE . 4 4 .7 IT IS ALSO SURPRISING TO NOTE THAT THE ENTIRE AMOUNT RECORDED IN THE SEIZED DOCUMENTS HAS BEEN TREATED AS INCOME OF THE ASSESSEE WITHOUT CALCULATING THE CA PITAL GAIN AS PER THE PROVISIONS OF SECTION 48 OF THE ACT. ASSUMING, BUT NOT ADMITTING, THAT IMPUGNED AMOUNT REPRESENTS THE INCOME OF THE ASSESSEE THEN IT HAS TO BE WORKED OUT AS PER THE PROVISIONS OF LAW. IN SIMPLE WAS, IT HAS TO BE CALCULATED IN THE FOLL OWING MANNER: SALE CONSIDERATION ===== LESS: INDEX COST OF ACQUISITION OF THE PROPERTY======= 4 4 .8 BUT NONE OF THE AUTHORITIES BELOW HAS GIVEN ANY BENEFIT OF THE COST OF ACQUISITION AND INDEX COST AS PROVIDED UNDER SECTION 48 OF THE ACT. IN VIEW OF THE A BOVE WE DISAGREE WITH THE FINDING OF THE AUTHORITIES BELOW. ACCORDINGLY WE SET IT(SS)A NOS.150/AHD/2017 AND 3 OTHERS ASSTT. YEARS 2010 - 11 25 ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 44 .9 I N THE RESULT, THE APPE AL OF THE ASSESSEE IS ALLOWED. 45 . IN THE COMBINED RESULTS ALL THE THREE APEPALS OF THE ASSESSEE ARE ALLOWED AND THE ONLY APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 06 /01 / 2021 AT AHMEDABAD. SD/ - SD/ - (WASEEM AHMED ) (MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER (TRUE COPY) A HMEDABAD; DATED 06 / 01/2021 MANISH