Shri Rajkumar Kukreja, Bhopal V. The ACIT 3(1), Bhopal

ITSSA 121/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8849 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 24-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: S S DESHPANDE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Income from undisclosed sources; Search and seizure; Salary income; Principle of natural justice; Onus to prove
• Section: 44AD; 50C; 153A; 28; 10; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ABLPK3484C I.T(SS).A.NOS. 118/IND/2012 A.Y. : 2007 - 08 DILIP KUMAR KUKREJA, 12, BRIGHT COLONY, ACIT, 3(1), IDGAH HI LLS, VS BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. : AHZPK6991J I.T(SS).A.NOS.119/IND/2012 A.Y. : 2007 - 08 AMIT KUKREJA, 12, BRIGHT COLONY, ACIT, 3(1), IDGAH HILLS, VS BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. : ANLPK1268F I. T(SS).A.NOS.120/IND/2012 A.Y. : 2007 - 08 KUMAR KUKREJA, 12, BRIGHT COLONY, ACIT, 3(1), IDGAH HILLS, VS BHOPAL BHOPAL APPELLANT RESPONDENT -: 2: - 2 PAN NO. : ABLPK3486A I.T(SS).A.NOS.121/IND/2012 A.Y. : 2007 - 08 RAJ KUMAR KUKREJA, 12, BRIGHT COLONY, ACIT, 3(1), IDGAH HILLS, VS BHOPAL BHOPAL APPELLANT RESPONDENT APPELLANT S BY : SHRI S.S.DESHPANDE, C.A. RESPONDENT BY : SMT. MRIDULA BAJPAI, CIT DR DATE OF HEARING : 23 . 01 .201 3 DATE OF PRONOUNCEMENT : 15 . 0 2 .201 3 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 153A/1 53C OF THE INCOME-TAX ACT, 1961. -: 3: - 3 2. ALL THE FOUR ASSESSEES ARE BROTHERS AND ADDITIONS W ERE MADE WITH RESPECT TO THE SAME SEARCH CONDUCTED AT T HE PREMISES, ACCORDINGLY, ALL THE APPEALS WERE HEARD T OGETHER AND ARE NOW DISPOSED OF BY THIS CONSOLIDATED ORDER. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. A SEARCH AND SEIZURE U/S 132(1) OF THE INC OME-TAX ACT, 1961, WAS CARRIED OUT IN THE CASE OF KUKREJA G ROUP ON 5.1.2007. ASSESSEE IS THE SON OF SHRI VISHNUMAL KUK REJA. DURING THE SEARCH AND SEIZURE OPERATION, DOCUMENTS RELATING TO ASSESSEE WERE ALSO FOUND. THE ASSESSING OFFICER ISSUED NOTICE U/S 153A. IN RESPONSE THE ASSESSEE FILED RET URN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 10.10.2008 VE RIFYING TOTAL INCOME AT RS. 2,61,870/- AND AGRICULTURAL INC OME AT RS. 20,000/-. THE ASSESSING OFFICER PASSED THE IMPUGNED ORDER ON 31.12.2008 ASSESSING TOTAL INCOME AT RS. 85,99,350/ -. 4. IN CASE OF OTHER TWO BROTHERS, NAMELY SHRI AMIT KUKREJA AND SHRI SHRI KUMAR KUKREJA, SIMILAR ADDITI ONS WERE MADE AND THE SAME WERE CONFIRMED BY THE LD.CIT(A). THE ASSESSEE IS IN FURTHER APPEAL BEFORE US, WHEREIN FO LLOWING GROUNDS HAVE BEEN TAKEN. -: 4: - 4 GROUNDS TAKEN IN THE CASE OF SHRI DILIP KUKREJA : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ARE NOT ILLEGAL, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE INCOME OF THE WIFE OF THE ASSESSEE BELONGS TO THE ASSESSEE AND CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF ADDING HER INCOME IN THE HANDS OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE UNSECURED LOANS OF RS. 5,45,440/- RECEIVED BY THE ASSESSEE AS HIS INCOME. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER -: 5: - 5 IN TREATING RS. 76,66,666/- AS INCOME OF THE ASSESSEE FROM SALE OF LAND WHEN NO SALE TOOK PLACE. GROUNDS TAKEN IN THE CASE OF SHRI AMIT KUKREJA: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ARE NOT ILLEGAL, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE UNSECURED LOANS OF RS. 4,75,000/- RECEIVED BY THE ASSESSEE AS HIS INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING RS. 76,66,666/- AS INCOME OF THE ASSESSEE FROM SALE OF LAND WHEN NO SALE TOOK PLACE. -: 6: - 6 GROUNDS TAKEN IN THE CASE OF SHRI KUMAR KUKREJA: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ARE NOT ILLEGAL, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE UNSECURED LOANS OF RS. 7,45,440/- RECEIVED BY THE ASSESSEE AS HIS INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING RS. 76,66,666/- AS INCOME OF THE ASSESSEE FROM SALE OF LAND WHEN NO SALE TOOK PLACE. GROUNDS TAKEN IN THE CASE OF SHRI RAJ KUMAR KUKREJA: -: 7: - 7 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ARE NOT ILLEGAL, INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE INCOME OF THE WIFE OF THE ASSESSEE BELONGS TO THE ASSESSEE AND CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF ADDING HER INCOME IN THE HANDS OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE UNSECURED LOANS OF RS. 5,45,440/- RECEIVED BY THE ASSESSEE AS HIS INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE INCOME OF THE DAUGHTER OF THE ASSESSEE BELONGS TO THE ASSESSEE AND CONFIRMING THE -: 8: - 8 ACTION OF THE ASSESSING OFFICER OF ADDING HERE INCOME IN THE HANDS OF THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE INCOME FROM AGRICULTURAL SHOWN BY THE ASSESSEE WAS INCOME FROM OTHER SOURCES AND CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF ADDING SUCH INCOME AS INCOME FROM OTHER SOURCES. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER TREATING UNSECURED LOAN OF RS. 3,00,000/- RECEIVED BY THE ASSESSEE AS HIS INCOME. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AN ADDITION OF RS. 85,000/- TOWARDS ALLEGED LOAN GIVEN TO R. K. TRIPATHI. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN -: 9: - 9 CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN APPLYING PROVISIONS OF SECTION 50C AND MAKING ADDITION OF RS. 20,000/-. 5. SHRI S. S. DESHPANDE, C. A. APPEARED ON BEHALF OF ASSESSEES AND CONTENDED AS UNDER :- THE ASSESSEE IS AN INDIVIDUAL, DERIVING INCOME FROM SALARY AND INTEREST. A SEARCH TOOK PLACE AT TH E RESIDENTIAL AND BUSINESS PREMISES OF KUKREJA GROUP. THE ASSESSMENTS HAVE BEEN COMPLETED U/S 153A IN THE CASE OF SHRI DILIP KUKREJA AND U/S 153C IN THE CASE OF SHRI AMIT KUMAR KUKREJA AND SHRI KUMAR KUKREJA. DURING THE COURSE OF THE SEARCH, ONE AGREEMENT TO SALE OF LAND WAS FOUND WHICH WAS ALREADY RECORDED IN THE BOOKS OF THE ASSESSEE. ON THE BASIS OF THIS AGREEMENT ACTION U/S 153C WAS STARTED IN THE CASE OF SHRI AMIT KUKREJA AND SHRI KUMAR KUKREJA. IT IS HUMBLY SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND SO AS TO START THE PROCEEDINGS -: 10: - 10 U/S 153C. THUS, THE ACTIONS OF STARING THE PROCEEDINGS ARE ILLEGAL AND BAD IN LAW. IN THIS CONNECTION, WE WOULD LIKE TO DRAW YOUR HONOURS KIND ATTENTION TO THE DECISION OF ALCARGO REPORTED IN 20 ITJ P 45 AND IN S.K.JAIN REPORTED IN 14 ITJ P. 434 . IN VIEW OF THE ABOVE SUBMISSIONS, IT IS SUBMITTED THAT THE ASSESSMENT IS BAD IN LAW. ON MERIT :- WITHOUT PREJUDICE TO THE ABOVE CONTENTION IT IS SUBMITTED THAT THE ADDITION OF RS. 76, 66,666 IS BA D IN LAW AND CAN NOT BE SUSTAINED. THE ASSESSEE SHRI DIL IP KUMAR KUKREJA, SHRI AMIT KUMAR KUKREJA AND SHRI KUMAR KUKREJA ENTERED INTO AN AGREEMENT OF SALE ON 17.11.2006 WITH M/S. KRISHI CONSTRUCTION HABIBGANJ, BHOPAL FOR SALE OF 4.55 HECTARES OF AGRICULTURE LAN D FOR A TOTAL CONSIDERATION OF RS. 2,30,00,000/-, RECEIVI NG RS. 26,00,000/- IN CASH AND THREE CHEQUES DATED 18.11.2006 OF RS. 5,00,000/- EACH (PG 55 OF PB). I N THIS AGREEMENT, IT WAS STIPULATED THAT RS. 9,00,000 /- -: 11: - 11 WOULD BE PAID WITHIN TEN DAYS AND THE BALANCE RS. 1,80,00,000/-WOULD BE PAID WITHIN HUNDRED DAYS AND ON RECEIPT OF THE FULL CONSIDERATION THE LAND WOULD BE TRANSFERRED BY REGISTERED SALE DEED IN THE NAME OF THE PURCHASER OR ANY OTHER PERSON AS DIRECTED BY THE PURCHASER. IN THE AGREEMENT THERE IS NO CLAUSE OF HANDING OVER OF POSSESSION. IN FACT, NO POSSESSION WAS HANDED OVER TO THE PURCHASERS. THE PURCHASERS HOWEVER COULD NOT MAKE THE BALANCE PAYMENT. IN NEXT YEAR THE AGRICULTURAL LAND ADMEASURING 4.14 ACRES (1.67 HER.) WAS TRANSFERRED FOR A CONSIDERATION OF RS. 84,41,800/- (PG. 61 OF PB). THE RATE WAS SAME AS AGREED IN THE AGREEMENT DATED 17.11.2006. IN THIS S ALE DEED THE AMOUNTS RECEIVED EARLIER OF RS. 15,00,000/ - AND RS. 26,00,000/- WERE SHOWN AS PART CONSIDERATIO N AND THE BALANCE AMOUNT WAS RECEIVED BY THREE CHEQUE S DATED 05.04.2007 (PG.63 OF PB). ON THE SECOND PAGE OF THE SALE DEED IT WAS SPECIFICALLY MENTIONED THAT TH E POSSESSION OF THE LAND UNDER CONSIDERATION HAS BEEN GIVEN ON THE DATE OF SALE I.E. 05.04.2007 BY THE SE LLER TO -: 12: - 12 THE PURCHASER AFTER RECEIVING THE TOTAL CONSIDERATI ON OF RS. 84,41,800/-. THE LAND STANDS CANCELLED FOR NON- PAYMENT OF THE BALANCE AMOUNT. THE CAPITAL GAINS ARISING FROM THE SALE OF 4.14 ACRES OF LAND HAS BEE N OFFERED AS INCOME IN THE RETURN FOR THE A.Y. 2008-0 9 AND HAS BEEN TAXED. WHILE FRAMING THE ASSESSMENT THE LD. AO OBSERVED A T PG. 5 OF THE ASSESSMENT ORDER THAT AS PER AGREEMENT THE PROFIT ACCRUES TO THE ASSESSEE AND AS PER THE PROVI SIONS OF SEC. 292( C) THE CONTENTS OF THE SALE AGREEMENT ARE PRESUMED TO BE CORRECT. SINCE THE SALE DEED HAS BEE N EXECUTED FOR PART OF THE LAND WHICH IS AGREED TO BE SOLD VIDE AGREEMENT DATED 14.11.2006 THE BUSINESS INCOME STANDS ACCRUED TO THE ASSESSEE ON THE DATE OF THE AGREEMENT. THE LD. CIT(A) ON PG. 9 PARA 5.2 OBSERVE D THAT PROVISION OF SEC. 2(47) ARE APPLICABLE AND O~ THE BASIS OF THE AGREEMENT IT IS CLEAR THAT PART PERFOR MANCE HAS BEEN DONE AND HENCE THE ADDITION RS.76,66,666/- IS PROPER AND LEGALLY CORRECT. IT IS HUMBLY SUBMITTED THAT SEC. 2(47) DEFINES THE WORD -: 13: - 13 TRANSFER AND SUB-CLAUSE (V) LAYS DOWN THAT ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF ANY CONTRACT OF THE NATURE REFERRED TO IN SEC. 53A OF THE TRANSFER OF PROPERTY ACT. (EMPHASIS SUPPLIED) SECTION 53A OF THE TRANSFER OF PROPERTY ACT READS A S UNDER: PART PERFORMANCE. - WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSION IN PART PERFORMANCE OF THE CONTRACT -: 14: - 14 AND HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, (EMPHASIS SUPPLIED) AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETE IN THE MANNER PRESCRIBED THEREFORE BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFEC T THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HA S NO NOTICE OF THE CONTRACT OR OF THE PART PERFORMAN CE -: 15: - 15 THEREOF. THUS IT IS SUBMITTED THAT SEC. 2(47) AND SEC. 53A SPEAKS ABOUT THE POSSESSION OF PROPERTY BEING TAKEN IN PART PERFORMANCE OF THE CONTRACT. WHAT SECTION 53A SEEKS TO DO IS TO PROTECT THE POSSESSION OF THE TRANSFEREE IN SPITE OF THE FACT THAT HE HAS THE RIGHT TO OBTAIN SPECIFIC PERFORMANCE OF THE AGREEMENT. IN THE INSTANT CASE NO POSSESSION HAS BEEN GIVEN TO THE TRANSFEREE. IN THIS CONNECTION WE WOULD LIKE TO DRAW YOUR HONOURS KIND ATTENTION TO THE FOLLOWING JUDGMENTS: MADATHIL BROTHERS VS. DCIT 301 ITR P. 345 CIT VS. G. SAROJA 301 ITR P. 124 AJAY KUMAR SHAH VS. CIT 215 CTR P. 396 (SC) CIT VS. K. JILANI BASHAH 256 ITR P. 282 IN THE FOLLOWING CASES IT HAS BEEN HELD THAT IF THE POSSESSION HAS BEEN GIVEN THEN THE PROVISIONS OF SEC. 2(47) -: 16: - 16 ARE ATTRACTED. CIT V S. K. JILANI BASHAH 256 ITR P. 282 D. KASTORI VS. CIT 251 ITR P. 532 IT IS HUMBLY SUBMITTED THAT SINCE THE ASSESSEE HAS NOT GIVEN THE POSSESSION OF THE SAID PROPERTY WHICH IS AGREED TO BE SOLD VIDE AGREEMENT DATED 17.11.2006, THE PROVISIONS OF SEC. 2(47) AND SEC. 53A OF THE TRANSFER OF PROPERTY ACT ARE NO T APPLICABLE AND THE ADDITIONS MADE BY THE LD. AO ARE BAD IN LAW AND DESERVE TO BE DELETED. 6. ON THE OTHER HAND, THE LD. CIT DR, SMT. MRIDULA BAJPAI APPEARED ON BEHALF OF THE REVENUE AND SUPPOR TED THE ORDER OF THE LOWER AUTHORITIES. 7. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT AN AGREEMEN T TO SALE DATED 17.11.2006 WAS FOUND DURING COURSE OF SEARCH. AS PER TERMS OF AGREEMENT, ASSESSEE AND HIS TWO BROTHERS A GREED TO SELL 4.55 HECTARES OF AGRICULTURAL LAND FOR A TOTAL CONSIDERATION OF RS. 2.30 CRORES TO M/S. KRISHI CONSTRCUTION. A S UM OF RS. 26 LAKHS WAS RECEIVED IN CASH AS AN ADVANCE PAYMENT AND 2 -: 17: - 17 THREE CHEQUES DATED 18.11.2006 OF RS. 5 LAKHS EACH WAS TO BE RECEIVED. AS PER TERMS OF AGREEMENT, RS. 9 LAKHS WO ULD BE PAID WITHIN 10 DAYS AND BALANCE OF RS. 1.80 CRORES WILL BE PAID WITHIN 100 DAYS AND ON RECEIPT OF FULL CONSIDERATIO N, THE LAND WOULD BE TRANSFERRED BY REGISTERED SALE DEED. THE A SSESSING OFFICER INFERRED THAT THE ASSESSEE HAS TRANSFERRED HIS LAND WITHIN THE MEANING OF SECTION 2(47), ACCORDINGLY, P ROFIT WAS BROUGHT TO TAX DURING THE FINANCIAL YEAR 2006-07 RE LEVANT TO ASSESSMENT YEAR 2007-08. THE CONCLUSION OF ASSESSIN G OFFICER WAS CONFIRMED BY THE LD.CIT(A) AGAINST WHICH THE AS SESSEE IS IN FURTHER APPEAL BEFORE US. 8. FROM THE RECORD, WE FOUND THAT THE AGREEMENT DATED 17.11.2006, NO WHERE PROVIDED FOR GIVING OF POSSESS ION TO THE BUYER AND SALE WAS TO BE EFFECTED ONLY ON COMPLIANC E OF VARIOUS TERMS AND CONDITIONS OF THE AGREEMENT INCLU DING PAYMENT OF BALANCE AMOUNT WITHIN THE STIPULATED TIM E. SINCE THE BUYER COULD NOT ARRANGE FOR THE REMAINING PAYME NT, THE ASSESSEE AGREED TO TRANSFER 1.67 HECTARES OUT OF TO TAL LAND OF 4.55 HECTARES FOR A CONSIDERATION OF RS. 84,41,800 /- AS PER THE SALE DEED EXECUTED ON 5.4.2007, WHICH WAS REGIS TERED WITH -: 18: - 18 THE OFFICE OF SUB REGISTRAR. WE HAD ALSO CAREFULLY GONE THROUGH THE TERMS OF THE SALE DEED DATED 5.4.2007 AND FOUND THAT POSSESSION OF THE LAND UNDER CONSIDERATION HAS BEEN GIVEN TO THE BUYER ON THE DATE OF SALE I.E. 5.4.2007, AFTER RECEIVING THE TOTAL CONSIDERATION OF RS. 84,41,800/-. AS PER THE PROVISIONS OF SECTION 2(47), THE WORD TRANSFER IN RELATION TO T HE CAPITAL ASSETS INCLUDE ANY TRANSACTION INVOLVING ALLOWING T HE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REF ERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. THE SUB CLAUSE (V) OF SECTION 47 CLEARLY STIPULATE A TRANSF ER WHICH INVOLVES ALLOWING OF POSSESSION OF ANY IMMOVABLE PR OPERTY FOR PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERR ED TO IN SECTION 53A OF TRANSFER OF PROPERTY ACT. MEANING TH EREBY WITHOUT ALLOWING POSSESSION, THE TRANSFER IS NOT CO MPLETE FOR THE PURPOSE OF BRINGING GAIN ARISING OUT OF SUCH TR ANSFER FOR THE PURPOSE OF SECTION 2(47) OF INCOME-TAX ACT, 196 1. ACCORDINGLY, IN THE INSTANT CASE, WE HAVE TO SEE WH ETHER ANY POSSESSION WAS GIVEN TO THE BUYER AS PER THE TERMS OF AGREEMENT DATED 17.11.2006. WE FOUND THAT THERE WAS NO -: 19: - 19 STIPULATION FOR GIVING POSSESSION TO THE BUYER AND, INFACT, NO POSSESSION WAS HANDED OVER TO THE BUYER. EVEN THE A GREEMENT TO SALE WAS COMPLETE ONLY ON FULFILLMENT OF VARIOUS CONDITIONS MENTIONED THEREIN, WHICH, INTER ALIA, INCLUDED THE PAYMENT OF BALANCE AMOUNT OF RS. 1.80 CRORES WITHIN 100 DAYS. WE FOUND THAT SINCE THE BUYER COULD NOT ARRANGE FOR THE BALA NCE AMOUNT, THE AGREEMENT COULD NOT BE EXECUTED AND ASS ESSEE FINALLY AGREED TO SELL 1.67 HECTARES OF LAND OUT OF TOTAL LAND OF 4.55 HECTARES AS STIPULATED IN THE ORIGINAL AGREEME NT TO SALE DATED 17.11.2006. OBSERVATION GIVEN BY CIT(A) TO TH E EFFECT THAT POSSESSION WAS GIVEN BY ASSESSEE, WAS WITHOUT REFERRING TO ANY MATERIAL ON RECORD. SINCE POSSESSION OF THE LAND MEASURING 1.67 HECTARE WAS GIVEN ONLY ON 5.4.2007 W HEN THE REGISTERED SALE DEED WAS EXECUTED, THERE WAS TRANSF ER OF LAND MEASURING 1.67 HECTARES WITHIN THE MEANING OF SECTI ON 2(47) IN THE FINANCIAL YEAR 2007-08 RELEVANT TO ASSESSMEN T YEAR 2008-09. ACCORDINGLY, THE PROFIT ARISING ON SALE OF LAND MEASURING 1.67 HECTARES WAS LIABLE TO BE TAXED ONLY IN THE FINANCIAL YEAR 2007-08 RELEVANT TO ASSESSMENT YEAR 2008-09. ACCORDINGLY, WE MODIFY THE ORDERS OF LOWER AUTHORIT IES AND WE -: 20: - 20 DIRECT THE ASSESSING OFFICER TO TAX THE PROFIT ARIS ING OUT OF SALE OF LAND MEASURING 1.67 HECTARES IN THE ASSESSMENT Y EAR 2008- 09 ONLY. WE DIRECT ACCORDINGLY. 9. AS PER THE DOCUMENTS FOUND DURING COURSE OF SEARCH, IT IS ABUNDANTLY CLEAR THAT ALL THE ASSESSEES WERE INVOLVED IN REAL ESTATE BUSINESS. VARIOUS AGREEMENTS TO SALE AN D PURCHASE WERE FOUND, WHICH CLEARLY INDICATED THAT THE ASSESS EE WAS ENGAGED IN SALE AND PURCHASE OF REAL ESTATE PROPERT Y. ACCORDINGLY, PROFIT/LOSS ARISING OUT OF SALE IS LIA BLE TO BE TAXED AS BUSINESS INCOME AND NOT AS CAPITAL GAIN. ACCORDI NGLY, WE DIRECT THE ASSESSING OFFICER TO, TAX THE GAIN ARISI NG OUT OF SALE OF 1.67 HECTARES OF THE LAND IN THE ASSESSMENT YEAR 2008-09 AS BUSINESS INCOME AND NOT AS CAPITAL GAIN. WE DIRECT ACCORDINGLY. 10. IN THE CASE OF DILIP KUKREJA A GROUND WAS TAKEN WIT H REGARD TO INCLUSION OF INCOME OF WIFE IN ASSESSEES HANDS. IN THIS REGARD, THE ASSESSING OFFICER FOUND DURING ASS ESSMENT PROCEEDINGS THAT IN KUKREJA GROUP ONLY THE APPELLAN T, HIS FATHER AND TWO BROTHERS HAVE BUSINESS INCOME. THAT THESE PERSONS HAVE CREATED CAPITAL IN THE NAMES OF THEIR WIVES AND -: 21: - 21 FAMILY MEMBERS ALTHOUGH THEY HAVE NO SOURCE OF INCO ME. IN VARIOUS YEARS, RETURN OF INCOME IN NAMES OF WIVES A ND FAMILY MEMBERS HAVE BEEN FILED SHOWING THEIR INCOME FROM T UITION OR FROM MAKING OF BADI, PAPPAD AND ACHAR. THAT IN ALL CASES OF FAMILY MEMBERS THE INCOME WAS DECLARED JUST ABOVE T AX SLAB. THE ASSESSING OFFICER ALSO OBSERVED THAT CAPITAL CR EATED IN THE NAMES OF THE FAMILY MEMBERS THROUGH THIS METHOD HAV E BEEN GIVEN AS LOAN. HE FOUND THAT THE ASSESSEES WIFE SM T. SANGEETA DEVI WAS NOT DOING ANY BUSINESS AND THAT THE INCOME SHOWN IN HER RETURN OF INCOME WAS ACTUALLY UNACCOUNTED IN COME OF THE ASSESSEE. ON THIS INCOME, HE MADE ADDITION OF R S. 1,25,378/-. 11. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AFTER HAVING THE FO LLOWING OBSERVATIONS :- ON EXAMINATION IT IS FOUND THAT THE ASSESSING OFF ICER WAS RIGHT IN HOLDING THAT NO EVIDENCE WAS AVAILABLE TO SUPPORT THE CLAIM THAT INCOME WAS ACTUALLY EARNE D BY THE ASSESSEES WIFE. SINCE THE ASSESSEES WIFE I S NOT HAVING ANY SOURCE OF INCOME, THE INCOME DECLARE D -: 22: - 22 IN HER NAME IS INCOME FROM UNDISCLOSED SOURCES. THE HUSBAND IS HAVING INCOME FROM BUSINESS. THESE CIRCUMSTANTIAL EVIDENCES LEAD TO ONLY ONE CONCLUSIO N THAT THE INCOME SHOWN IN THE NAME OF WIFE BELONGS T O THE HUSBAND. IN THIS CASE, THE ASSESSING OFFICER HA S DISCHARGED THE ONUS TO PROVE THAT THE INCOME DECLARED IN NAME OF WIFE WAS UNACCOUNTED INCOME AND BY LOGICAL DEDUCTION THIS HAS TO BE TREATED AS INCOME OF HER HUSBAND. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 1,25,378/- IS CONFIRMED. THIS GROUN D OF APPEAL IS DISMISSED. 12. HOWEVER, NOTHING WAS BROUGHT ON RECORD TO PERSUA DE US TO COME OUT OF THE FINDINGS RECORDED BY THE LOWE R AUTHORITIES. NOTHING WAS SHOWN BY THE ASSESSEE TO SUBSTANTIATE THE CLAIM THAT INCOME RETURNED BY WIFE WAS ACTUALLY EARNED BY HER. ACCORDINGLY, WE CONFIRM THE ACTION OF LOWER AUTHORITIES. SIMILAR ADDITIONS HAVE BEEN MADE IN THE CASE OF OTHER ASSESSEES WITH THE SAME FINDINGS, WHI CH COULD NOT BE CONTROVERTED BY THE ASSESSEE. ACCORDINGLY, W E CONFIRM -: 23: - 23 THE ADDITIONS IN THE HANDS OF OTHER ASSESSEES ALSO, WITH RESPECT TO INCOME SHOWN IN THE HANDS OF WIVES. 13. IN THE CASE OF DILIP KUKREJA, THE ADDITION OF RS. 5,45,440/- U/S 68 ON ACCOUNT OF UNEXPLAINED CASH CR EDITS IS CHALLENGED. THE FACTS OF THE ISSUE IN BRIEF ARE THA T THE ASSESSEE HAS SHOWN CASH CREDITS FROM THE FOLLOWING PARTIES : - SHRI AJIT JAIN RS. 2,00,000/- MAHENDRA KUMAR MOHTA RS. 1,00,000/- JANKI OVERSEAS RS. 1,00,000/- CHOUKSE TRADERS RS. 1,45,440/- TOTAL RS. 5,45,440/- THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE BANK STATEMENT AND RETURN OF INCOME OF THE CREDITORS BUT THE ASSESSEE SUBMITTED ONLY LOAN CONFIRMATIONS FROM THE M. SINCE THE ASSESSEE DID NOT SUBMIT THE DOCUMENTS REQUIRED BY THE ASSESSING OFFICER, ADDITION WAS MADE U/S 68 OF INCO ME-TAX ACT, 1961. AFTER GIVING HIS FINDINGS THE ASSESSING OFFICER HELD THAT THE SOURCE OF CASH CREDITS WAS UNEXPLAINED AND MADE ADDITION OF RS. 5,45,440/- U/S 68. -: 24: - 24 14. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AGAINST WHICH THE A SSESSEE IS IN FURTHER APPEAL BEFORE US. 15. DURING THE COURSE OF HEARING, LD. AUTHORIZED REPRESENTATIVE PLACED ON RECORD THE ORDER OF I.T.A .T. IN THE CASE OF OTHER GROUP MEMBER OF THE SAME FAMILY, WHER EIN SIMILAR ISSUE OF ADDITION U/S 68 WAS RESTORED TO TH E FILE OF ASSESSING OFFICER FOR DECIDING AFRESH. RELEVANT FIN DING OF TRIBUNAL IN THE CASE OF DILIP KUMAR KUKREJA AND RAJ KUMAR KUKREJA IN I.T(SS).A.NOS. 54 TO 59/IND/12 ORDER DAT ED 2.5.2012 WAS AS UNDER :- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED LOAN OF RS. 3 LACS FROM OM PURSHOTTAMDAS GURBANI AND RS. 50,000/- FROM MAHENDRAKUMAR. THE IMPUGNED ADDITIONS WERE MADE ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE THE COPY OF BANK STATEMENT AND RETURN OF INCOME OF THE CREDITORS, THEREFORE, IT WA S HELD THAT THE IDENTITY, CREDITWORTHINESS AND -: 25: - 25 GENUINENESS OF TRANSACTION COULD NOT BE PROVED, THEREFORE, THE ADDITIONS WERE MADE U/S 68 OF THE AC T. KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, ASSERTION OF THE LD.COUNSEL FOR THE ASSESSEE AND TH E FACTS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT NO PERSON SHOULD BE CONDEMNED UNHEARD. THE ASSESSEE IS DIRECTED TO PRODUCE THE CREDITORS BEFORE THE LD. ASSESSING OFFICER SO THAT HE CAN SATISFY HIMSELF AB OUT THE GENUINENESS OF THE TRANSACTIONS, THEREFORE, THI S GROUND IS SENT TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. THIS GROUND FOR THE RESPECTIVE ASSESSMENT YEARS IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THEREFORE, T HE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . 16. AS THE FACTS AND CIRCUMSTANCES, DURING THE YEAR UND ER CONSIDERATION, ARE SAME, RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL IN CASE OF OTHER GROUP MEMBERS, MATTER IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AS PER THE DIRECTION GIVEN IN THE ORDER OF TRIBUNAL DATED 2.5.2012. -: 26: - 26 17. IN THE CASES OF AMIT KUKREJA, KUMAR KUKREJA AND RAJKUMAR KUKREJA, SIMILAR ADDITIONS HAVE BEEN MADE U/S 68 WITH RESPECT TO THE CASH CREDIT, FOLLOWING THE SAME REASONING, WE RESTORE THE MATTER BACK TO THE ASSESSING OFFICER AND DIRECT THE ASSESSING OFFICER TO DECIDE AFRESH AS PER THE D IRECTIONS GIVEN BY THE TRIBUNAL IN ITS ORDER DATED 2.5.2012. 18. IN THE CASE OF RAJKUMAR KUKREJA, GROUND NO. 7 PERTAINS TO CIT(A)S ACTION FOR CONFIRMING ADDITION OF RS. 20,000/- BY INVOKING PROVISIONS OF SECTION 50C OF I NCOME-TAX ACT, 1961. AS DISCUSSED HEREINABOVE, SINCE THE ASSE SSEE WAS ENGAGED IN PURCHASE AND SALE OF LAND, THE PROFIT AR ISING THEREFROM WAS LIABLE TO BE TAXED AS BUSINESS INCOME U/S 28 TO 44AD AND NOT U/S 45 READ WITH SECTION 48 OF THE INC OME-TAX ACT, 1961. ACCORDINGLY, THE PROVISIONS OF SECTION 5 0C IS NOT APPLICABLE TO THE ASSESSEE. ACCORDINGLY, THE ASSESS ING OFFICER IS DIRECTED TO TAX THE PROFIT OF RS. 20,000/- AS BU SINESS INCOME U/S 28 OF THE INCOME-TAX ACT, 1961. -: 27: - 27 19. IN THE RESULT, THE APPEALS ARE ALLOWED IN PART IN T ERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 15 TH FEBRUARY, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH FEBRUARY, 2013. CPU* 231152