Shri Vivek Prahladbhai Patel, Ahmedabad V. The ACIT.,Cent.Circle-2(2), Ahmedabad

ITSSA 130/AHD/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0531 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Keywords: Capital asset; Search and seizure; Loose papers; Additional evidence; Corroborative evidences; Documents seized
• Section: 143(3); 54B; 153A; 131; 69; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , 0 0 , BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ IT (SS) A NO S.128, 129 & 130/ AHD/ 2013 [ [ / ASSESSMENT YEAR : 2005 - 06, 2006 - 07 & 2007 - 08 SHRI VIVEK PRAHLADBHAI PATEL, 55, RACHANA SOCIETY, SATELLITE, AHMEDABAD - 15 PAN : ADIPP 7019 D VS ACIT, CENTRAL CIRCLE 2(2), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : S MT. URVASHI SHODHAN, ADV. REVENUE BY : SHRI T.P. KRISHNAKUMAR, CIT - DR / DATE OF HEARING : 16.10.2014 / 12 . 1 1 . 2014 / DATE OF PRONOUNCEMENT: 09 . 01 . 201 5 / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - III, AHMEDABAD DATED 28 . 12 .201 2 FOR ASSESSMENT YEARS 200 5 - 06, 2006 - 07 & 2007 - 08. 2. GROUND NO.1 OF THE APPEAL IN ALL THE YEARS UNDER CONSIDERATION READS AS UNDER: - 1. LD. CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDING VALIDITY OF JURISDICTION OF AO FOR ISSUING NOTICE U/S 153C OF THE ACT CHALLENGED BY THE APPELLANT. LD. CIT(A) IGNORING SUBMISSIONS ON RECORD IN ONE LINE SUMMATION UPHELD THE JURISDICTION OF AO TO BE VALID FOR ISSUANCE OF NOTICE. LD. CIT(A) OUGHT TO HAVE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 2 APPRECIATED CONTENTION OF THE APPELLANT AND QUASHED THE NOTICE. 3. AT THE TIME OF HEARING, THE AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.1 OF THE APPEAL AND HAS ALSO MADE ENDORSEMENT TO THIS EFFECT IN THE MEMORANDUM OF APPEAL ; THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IN ALL THE THREE YEARS UNDER CONSIDERATION IS DISMISSED FOR WANT OF PROSECUTION. 4. THE SECOND AND THIRD COMMON GROUND OF APPEAL TAKEN IN ALL THE YEARS UNDER CONSIDERATION IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS U/S 69 OF THE ACT OF RS.3,25,51,000/ - FOR AY 2005 - 06, RS.6,51,00,000/ - FOR AY 2006 - 07 AND RS.3,25,50,000/ - FOR AY 2007 - 08. 5. THE FACTS OF THE CASE AS BORNE OUT FROM THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS) ARE AS UNDER: 5.1 DURING THE COURSE OF SEARCH IN THE CASE OF ONE SHRI SOMABHAI AMBALAL PRAJAPATI, CERTAIN DOCUMENTS WERE FOUND WHICH INDICATED THAT APPELLANT ENTERED INTO AGREEMENTS WITH HIM TO PURCHASE VARIOUS PLOTS OF LAND. THE RELEVANT PORTION OF ASSESSMENT ORDER FOR A.Y. 2005 - 06 IS REPRODUCED BELOW: - '3. DURING THE COURSE OF SEARCH IN THE CASE OF SOMABHAI AMBALAL PRAJAPATI AT KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, THALTEJ, AHMEDABAD ON 08.12.2009, IT IS FOUND THAT SHRI SOMABHAI A. PRAJAPATI, SHRI VISHNUBHAI A. PRAJAPATI, SHRI CHANDUBHAI A. PRAJAPATI HAVE ENTERED INTO BANACHITHI (AGREEMENT TO SELL LAND) ON 18.01.2005, FOR SALE OF LAND AT BHADAJ WITH THE ASSESSEE. THE BANACHITTHI WAS SIGNED ON 18.01.05 BY SOMABHAI AMBALAL PRAJAPATI, CHANDUBHAI AMBALAL PRAJAPATI AND VISHNUBHAI AMBALAL PRAJAPATI AS SELLER AND THE ASSESSEE AS THE BUYER. THE SAID 'BANACHITHI ' HAS BEEN SEIZED AND INVENTORIS ED AT PAGE NO. 119 TO 122 OF ANNEXURE A - 22. AS PER THE BANACHITTHI THE RATE PER VIGHA FOR JUNI SHARAT LAND WAS FIXED AT RS. 29,51,000/ - WHILE THE RATE PER VIGHA OF NAVI SHARAT LAND WAS FIXED AT RS. 21,85,000/ - . THE DETAILS OF PLOTS OF LAND RECORDED IN BANACHITHI ARE AS UNDER: ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 3 BLOCK NO. SURVEY NO. SHARAT SQ.MT 540 515 OLD SHARAT 11432 487 471 NEW SHARAT 11938 497 476, 477, 482 NEW SHARAT 31566 504 488 NEW SHARAT 27822 494 473/2 OLD SHARAT 4097.50 509 487, 497 NEW SHARAT 32729 500 480 OLD SHARAT 8296 502 484 GOVT. HOLD 12950 505 485 GOVT. HOLD 16662 3.1 HOWEVER, IT WAS NOTICED THAT ALL THE ABOVE PLOTS OF LAND WERE NOT TRANSFERRED BY THE SELLERS, AS AGREED IN THE SAID BANACHITHI. THUS, SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT ON 14.12.2011 IN ANSWER TO QUES TION NO. 3 HAS CLARIFIED THAT THE PLOTS OF LAND BEARING SURVEY NOS. 502,505, 540, 497 & 487 WERE DISPUTED AND COULD NOT BE TRANSFERRED DUE TO PENDING CIVIL SUITE, THUS, IN PLACE OF THESE, BLOCK NO. 512A, 512 - B, 510 & 513 WHICH ARE IN THE SAME VICINITY AT B HADAJ WERE TRANSFERRED TO THE PERSONS SPECIFIED BY THE ASSESSEE. ACCORDING TO SOMABHAI THIS WAS DONE AS THEY HAD ALREADY RECEIVED THE CONSIDERATION AS PER THE TERMS OF THE BANACHITHI AND WAS UNDER AN OBLIGATION TO TRANSFER THE LANDS TO THE ASSESSEE. 3.2 F URTHER, AS PER PAGE NO. 114 OF ANNEXURE A - 22 SEIZED FROM THE PREMISES OF SHRI SOMABHAI A. PRAJAPATI AT KHODAL BHAVAN, KHODIYAR KRUPA BUNGLOWS, THALTEJ, AHMEDABAD ON 08.12.2009, DETAILS OF BLOCK - WISE AMOUNT RECEIVED BY SHRI SOMABHAI AMABALAL PRAJAPATI IS ME NTIONED WHICH IS SUMMARIZED AS UNDER: BLOCK NO. VIGHA RATE AMOUNT 504 11.70 21.85 2,55,64,500 494 1.72 29.51 50,75,720 512 - B 3.74 21.85 81,71,900 509 6.88 21.85 1,50 , 32,800 500 3.49 29.51 1,02,98,990 512 - A 5.40 21.85 1,17,99,000 510 5.10 29.51 1 , 50 , 50 , 100 TOTAL 9,09,93,010 ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 4 3.3 RATE SHOWN IN THIS PAPER IS EXACTLY THE SAME RATE WHICH IS SHOWN IN BANACHITTI. FURTHER, ON PAGE NO. 117 OF ANNEXURE A - 22, FOLLOWING DETAILS ARE MENTIONED: OLD SHARAT 540 4.97 494 1.78 RATE RS 29,51,000/ - 500 3.60 510 5.28 15.63 RS 4,61,24,130/ - RECEIVED. NAVI SHARAT 509 7.11 504 12.09 497 RATE RS 21,85,000/ - 487 512A 5.58 512B 3.87 RECEIVED RS6,26,00,250/ - RS 13,02,00,000/ - RECEIVED ( - ) RS 10,87,24,380/ - FOR COMPLETED DASTAVEJ OLD+NEW RS 2,14,75,520/ - RECEIVED BUT DASTAVEJ YET TO BE DONE. THEREFORE, DASTAVEJ OF 9.82 VIGHA LAND IS YET TO BE MADE. 3.4 THIS PAGE CLEARLY STATES THAT SHRI SOMABHAI A PARAJAPATI AND OTHERS HAVE GOT SALES CONSIDERATION OF RS. 13,02,00,000/ - FOR SALE OF ABOVE REFERRED TO LAND. ON THE BASIS OF ABOVE DOCUMENTS SHRI SOMABHAI AMBALAL PRAJAPATI, SHRI VISHNUBHAI AMBALAL PRAJAPATI, SHRI CHANDUBHAI AMBALAL PRAJAPATI & THEIR FAMILY MEMBERS HAVE ACCEPTED RECEIPT OF ON - MONEY FOR SALE OF ABOVE LANDS AS PER THE RATES MENTI ONED IN THE SAID BANACHITHI AND DISCLOSED THE CAPITAL GAINS ON THE SAME IN THEIR RETURNS OF INCOME. THE DISCLOSURE MADE BY THE BUYERS IS TABULATED HEREUNDER: SR N O BL OCK MB. REGN. NO. SALE CONSIDERATION INDEX COST CAPITAL GAIN NAME OF CO - OWNER SHARE (1) 500 5812 1,02,98,990 1,40,166 (73044X497) 259 (F.Y.94 - 95) 1,01,58,824 1) CHANDUBHAI A.PRAJAPATI 2) PRAKASH C. PRAJAPATI. 3) GITABEN C. PRAJAPATI. 4 ) ANILABEN D/O. C. 5) ALPABEN D/O, C, 6) CHANDUBHAI.. 7) URVASHIBEN D/O. C. 8) PRAGNABEN 12, 69,853. 12,69,853. 12,69,853. 12,69,853. 1269,853. 12,69,853. 12,69,853. 12,69,853 ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 5 W/O. P. (2) 494 5582 50.75,720 1,11,388 (44.600X497) ------------- 199 49,64,332 1) CHANDUBHAI A. 2) SOMABHAIA. 3) VISHNUBHAIA. 16,54,777. 16 , 54,777. 16,54,777. (F.Y.91 - 92) ( 3) 510 382 17/01/2 006 1,50,50,100 2,16,694 (86.765X497) -------------- 199 1,48,33,406 1) GITABEN CHANDUBHAI. 2) MANIBEN SOMABHAI. 3) SANGITABEN V. 49,44,469. 49,44,469. 49,44,469. (F.Y.91 - 92) ( 4) 504 5813 02.08.0 5. 2,55,64,500. 3,65,309 (1,79.347X497) ------------- 244 2,51,99,191. 1) SOMABHAIA. 2) MANIBEN SOMABHAI. 3) PANKAJ SOMABHAI. 4) KAMLESH SOMABHAI. 5) NISHA PANKAJ. 6) LLABEN D/O. SOMABHAI. 7)HIRALBEN D/O. SOMABHAI. 35,99,885. 35,99,884. 35,99, 884. 35,99.884. 35,99,884. 35,99,884. 35,99,884. (F.Y.93 - 94) (5) 509 5581 25.07.2 005 1,50,32,800 1,26,587 1,47,16,651 1) VISHNUBHAI AMBALAL 1 , 47 , 16,651 2008 - 2009 (6) 512 - B 8406 10/07/2 007 81,71,900. 90,653 (64.000X551) 389 (F.Y.99 - 2000) 80,81,247 1) SOMABHAI A.PRAJAPATI 80 , 81,247. (7) 512 - A 8408 10/07/2 007 1,17,99,000. 2,09,560 (1.16.000X551) --------- 305 (F.Y.96 - 97) 1.15,89,440 1) MANIBEN SOMABHAI. 2) PANKAJ SOMABHAI. 3) HIRALBEN SOMABHAI. 4) KAMLESH SOMBHAI. 5) NISHABEN PANKAJBHAI. 6)IALABEN SOMABHAI 19,31,573. 19,31,573. 19,31,573. 19,31.573. 19,31,573. 19,31,573. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 6 2010 - 2011 - (8) 513 9480 18/0 6/20 09 96,67,069 95,880 95,71,189. 1) VISHNUBHAI AMBALAL. 95 , 71 , 189. 3.5 FURTHER, SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED U/S. 132(4) OF THE ACT ON 25.01.2010 WHEN CONFRONTED WITH PAGE NO. 111 OF ANNEXURE A - 22, IT WAS REPLIED BY HIM THAT ON THIS PAGE DETAILS OF TRANSACTION PERTAINING TO ABOVE REFERRED TO LAND IS WRITTEN. ACCORDING TO HIM IT HAS BEEN WRITTEN BY SOME PERSON COMING FROM THE OFFICE OF THE ASSESSEE AND IT HAS BEEN G IVEN TO THEM AS THERE WAS A LITTLE DIFFERENCE IN TOTAL CONSIDERATION WHEREIN ACCORDING TO THEM THE TOTAL CONSIDERATION CAME TO RS. 12,79,45,600/ - . 3.6 SHRI SOMABHAI AMBALAL PRAJAPATI IN HIS STATEMENT RECORDED ON 25.01.2010 HAS REITERATED THAT THE AMOUNT OF ON - MONEY RECEIVED ON SALE OF LAND WAS PAID TO HIM BY PERSON COMING FROM THE OFFICE OF THE ASSESSEE AND PAGE NO. 111 OF ANNEXURE A - 22 WAS ALSO WORKING PROVIDED BY THE REPRESENTATIVE OF THE ASSESSEE, AS THERE WAS SOME DIFFERENCE IN CONSIDERATION RECEIVED. ' 6 . AFTER CONSIDERING VARIOUS SUBMISSIONS MADE BY THE ASSESSEE , THE ASSESSING OFFICER MADE ADDITION OF RS.3,25,50,000/ - U/S.69 FOR THE AY 2005 - 06 WITH THE FOLLOWING OBSERVATION: '3.17 THE CONTENTIONS OF THE ASSESSEE ALONG WITH FACTS OF THE CASE ARE DIS CUSSED HEREUNDER: AN AGREEMENT TO SELL (BANACHITHI) WAS ENTERED INTO BETWEEN THE ASSESSEE AND THE PRAJAPATI FAMILY FOR PURCHASE OF PLOTS OF LAND AT VILLAGE BHADAJ, AHMEDABAD WHICH HAS CREATED A CHARGE IN FAVOUR OF THE ASSESSEE ON THE LAND IN QUESTION. THE AGREEMENT IS DULY SIGNED BY BOTH THE PARTIES WHEREIN THE ASSESSEE IS SHOWN AS THE PURCHASER. A RATE WAS AGREED TO BETWEEN THE ASSESSEE AND PRAJAPATI FAMILY FOR PURCHASE OF SALE PLOTS OF LAND. DURING THE COURSE OF SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE PREMISES OF THE SELLERS VARIOUS LOOSE SHEETS AND DOCUMENTS, REFERRED TO ABOVE, WERE FOUND WHERE CASH RECEIPTS, AS PER THE AGREED RATES, HAVE BEEN RECORDED TO HAVE BEEN RECEIVED BY THE PRAJAPATI FAMILY. , ADVANCE OF RS. 11.00 LACS WAS PAID BY THE ASS ESSEE TO THE PRAJAPATI FAMILY FOR PURCHASE OF SAID LANDS AND NOWHERE IN THE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 7 BANACHITHI IT HAS BEEN RECORDED THAT ADVANCE HAS BEEN PAID THROUGH CHEQUE AS CONTENDED BY THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT IT IS A NORM IN LAND TRANSACTIONS THAT THE AMOUNT PAID OR RECEIVED THROUGH CHEQUES IS DULY RECORDED ALONG WITH CHEQUE NUMBER AND NAME OF THE BANK IN THE LAND DOCUMENT. IT IS PERTINENT TO NOTE HERE THAT 'AGREEMENT TO SELL MADE IN WRITING IS A LEGAL CONTRACT AND VESTS A RIGHT OF THE PURCHASER ON THE PROPERTIES AGREED TO BE SOLD TO HIM BY THE SELLERS. THUS, ANY LEGAL CONTRACT WILL HOLD GOOD UNTIL CANCELLED BY WAY OF ANY OTHER LEGAL CONTRACT. HOWEVER, NEITHER DURING THE COURSE OF THE SEARCH AND SURVEY OPERATIONS CONDUCTED AT THE RESIDENTIAL OR BUSI NESS PREMISES OF THE SELLERS ANY CANCELLATION AGREEMENT WHEREIN SAID BANACHITHI WAS CANCELLED WAS FOUND NOR ANY SUCH AGREEMENT HAS BEEN FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THUS, THE CONTENTION OF THE ASSESSEE THAT THE BANACHITHI WA S CANCELLED HAS NOT BEEN PROVED TO BE CORRECT. FURTHER, IF THE BANACHITHI WOULD HAVE BEEN CANCELLED THE ORIGINAL BANACHITHI WOULD HAVE BEEN IN THE POSSESSION OF THE SELLERS AND NOT THE ASSESSEE AS CLAIMED BY THE ASSESSEE. FURTHER THE LANDS AGREED TO HAVE B EEN SOLD HAVE ACTUALLY BEEN TRANSFERRED BY THE SELLERS AFTER ENTERING INTO AGREEMENT TO SELL WITH THE ASSESSEE. THE SELLERS HAVE DISCLOSED THE SALE CONSIDERATION AS PER THE RATES MENTIONED IN BANACHITHI AND OFFERED CAPITAL GAINS ON THE SAME AS PER THE SHARE HELD BY THEM IN THE LAND SOLD CONSEQUENT TO BANACHITHI. IT IS PERTINENT TO NOTE HERE THAT THE FOLLOWING LANDS THAT HAVE BEEN TRANSFERRED BY THE SELLERS ARE NOT RECORDED IN THE BANACHITHI. IN THIS REGARD, SHRI SOMABHAI A PRAJAPATI IN HIS STATEMENT REC ORDED UNDER SECTION 131 OF THE ACT ON 14.12.2011 HAS SPECIFICALLY IN ANSWER TO QUESTION NO. 3 HAS STATED THAT THE LAND BEARING BLOCK NOS. 502, 505, 587,497, AND 540 WERE DISPUTED PLOTS AND THUS COULD NOT BE TRANSFERRED. THUS, IN ORDER TO HONOUR THE TERMS O F THE BANACHITHI AS THE SELLERS HAD ALREADY RECEIVED CONSIDERATION FOR THE SALE OF LAND BLOCKS BEARING NO. 510, 512 - A, 512 - B, & 513 WERE TRANSFERRED AT THE INSISTENCE AND DIRECTIONS OF THE ASSESSEE TO THE ULTIMATE PURCHASERS. SNRI SOMABHAI AMBALAL PRAJAPAT I IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, REFERRED TO ABOVE, HAS ADMITTED TO HAVE RECEIVED THE SALE CONSIDERATION FROM THE ASSESSEE. FURTHER, SHRI SOMABHAI IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE ASSESSMENT PROC EEDINGS ON ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 8 14.12.2011 HAS CATEGORICALLY STATED THAT THE LAND OWNED BY THEM AND AGREED TO SELL VIDE THE 'AGREEMENT TO SELL' ENTERED INTO WITH THE ASSESSEE WERE TRANSFERRED AS PER HIS INSISTENCE TO THE PERSONS SPECIFIED BY HIM AS THE RIGHTS IN THE SAID LAND WERE ALREADY TRANSFERRED TO THE ASSESSEE VIDE THE BANACHITHI DATED 18.01.2005. THE TOTAL PLOT - WISE SALE CONSIDERATION DISCLOSED BY THE SELLERS WITH REGARD TO THE SALE OF LAND AS PER THE OBLIGATION CAST UPON THEM THOUGH THE BANACHITHI IS AS UNDER: SR.NO BLOCK NO. DOCUMENT NO. AND DATE AMOUNT AS PER DOCUMENT AMOUNT AS PER DISCLOSURE ASST. YEAR. (D 509 5581 - 25/07/2005 6,50,000 1,50.32,800 2006 - 2007 (2) 500 5812 - 02/08/20 0 5 4,00,000 1,02,98,990 2006 - 2007 (3) 494 5582 - 25/07/2005 1,51,000 50, 75 , 720 2006 - 2007 (4) 504 5813 - 02/08/2005 11,10,900 2,55.64 , 500 2006 - 2007 (5) 510 382 - 17/01/2006 3,50,001 1,50,50 , 100 2006 - 2007 (6) 512 - B 8406 - 10/07/2007 3,56,120 81,71 , 900 2008 - 2009 (7) 512 - A 8408 - 10/07/2007 5,14,000 1,17 , 99,000 2008 - 2009 (8) 513 9480 - 18/06/2009 23,37,000 96,67,069 2010 - 2011 ( 9) 502 & 505 8510 - 13/05/2010 80,75 , 000 3,33,96,683 2011 - 2012 3.18 THE ABOVE PLOTS WERE FINALLY TRANSFERRED BY T HE SELLERS TO SHRI AJAY S. PATEL (SR 1 TO 8 ABOVE) AND TO SHRI DHIRUBHAI AMIN (SR. NO. 9, ABOVE) AND NOT TO THE ASSESSEE. I N VIEW OF THE FACTS DISCUSSED ABOVE IT IS CLEAR THAT THE SELLERS HAVE RECEIVED AN AMOUNT OF RS. 13.02 CRORES TOWARDS THE SALE OF PLOTS OF LAND AT BHADAJ AS PER THE B ANACHITHI FROM THE ASSESSEE AS PER DETAIL BELOW: DATE AMOUNT MODE OF PAYMENT REMARKS 18.01.2005 11,00,000 / - CASH BEING 'BANA' (ADVANCE) AMOUNT PAID ON SIGNING OF BANACHITHI. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 9 20.01.2005 3,14,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. 20.06.2005 3,25,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. 20.11.2005 3,25,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. 20.04.2006 3,25,50,000/ - CASH AS PER THE SCHEDULE OF PAYMENT RECORDED IN BANACHITHI. TOTAL 13,02,00,000/ - 3.19 IT HAS ALSO BEEN CONFIRMED BY THE SELLERS THAT THE LAND WAS TRANSFERRED TO SHRI AJAY S PATEL (BLOCK NOS. 504, 494, 509, 500, 510, 512 - A, 512 - B & 513 AT BHADAJ) AND SHRI DHIRUBHAI AMIN (BLOCK NO. 502 & 505 AT BHADAJ) AT THE INSTANCE OF THE ASSESSEE. SINCE, AJAY PATEL BEING THE FINAL BENEFICIARY HAS DENIED TO HAVE PAID ANY AMOUNT OVER AND ABOVE THE DOCUMENTED PRICE TO THE SELLER, THUS, THE SOURCE OF THE PAYMENTS MADE BY THE ASSESSEE TO THE SELLERS IN THIS REGARD REMAINS UNEXPLAINED. 3.20 IT IS CLE AR THAT AN AGGREGATE AMOUNT OF RS. 3,25,50,000 / - WAS PAID BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR TOWARDS THE PURCHASE OF THE RIGHTS IN THE ABOVE MENTIONED PLOTS OF LAND WHICH WERE SUBSEQUENTLY TRANSFERRED TO THE ULTIMATE PURCHASERS AT THE DIRECTION AND INSISTENCE OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE SAME. THUS, THE AMOUNT OF RS. 3 , 25,50,000 I S TREATED AS DEEMED TO BE THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 69 OF THE ACT AND IS ACCORDINGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON PROTECTIVE BASIS. SINCE THE PURCHASER OF THE ABOVE PLOTS IS NOT THE ASSESSEE, THEREFORE, SUBSTANTIVE ADDITION IS BEING CONSIDERED IN THE HANDS OF THE FINAL BUYERS.' 5.3 . SIMILAR ADDITIONS WERE MADE IN AY 2006 - 07 AND 2007 - 08 . 7 . BEFORE THE CIT(A), THE ASSESSEE SUBMITTED AS UNDER: - ' FROM THE ENTIRE MATERIAL ON RECORD , IT IS CLEAR THAT. (I) THERE WAS B ANA CHIT T HI DATED 18 - 1 - 2005 ON STAMP OF 19 - 1 - 2005 COPY IS AS PER PAGE 13 TO 16 & ENGLISH TRANSLATION PAGE 13 TO 22 OF PAPER BOOK I FILED ON 6 - 6 - 2012 IN RESPECT OF AGRICULTURE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 10 LAND THE PURCHA SE IN RESPECT OF BLOCK NO. 540/487/ 497/ 504/494/ 509/500/505/505. TOTAL LAND WAS THAT OF 157492.50 SQ. METER I.E. 67.68 BIGHA (@ 1 BIGHA + 2327 SQ. MTR) OUT OF WHICH SURVEY NO 502 & 505 WAS IN THE NAME OF GOVT WERE THAT OF J2950+16662 SQ. MTR. I.E. 5.56+7.16 BIGHA I.E. SQ. M T R BIGHA ----------- -------- 12950 5.56 16662 7.16 -------- -------- 29612 12.72 -------- -------- WHICH WAS AGREED LO SALE @ 29,51 LACS PER BIGHA IN RESPECT OF OLD TENURE AND @ 21.85 LACS PER BIGHA AS PER NEW TENURE SUBJECT TO THE TERMS AND CONDITIO N OF CL 3 TO 7 ARE FULFILL 2. IT IS NOT IN DISPUTE THAT NONE OF THE CONDITIONS WERE FULFILLED AT ALL. 3. IT IS NOT IN DISPUTE THAT NONE OF THE BLOCK MENTIONED IN SANA CHITTHI PURCHASED BY YOUR APPELLANT . 4. IT IS NOT IN DISPUTE THAT NON OF THE TERMS AND CONDITIONS OF CL. 3 TO CL 7 OF BAN CHITTHI WERE FULFILLED ( PLEASE SEE CHART AT PAGE 206) 5. I T IS ALSO NOT IN DISPUTE THAT SELLERS WERE WRONGLY SAID THAT THEY WERE THE OWNER OF ENTIRE LAND AND IT IS IN THEIR POSSESSION (PLEASE REFER TO PARA ON PAGE 18 OF PAPER BOOK I FILED ON 6 - 6 - 2012 WHICH IS REPRODUCED FOR READY REFERENCE. ) ' THE LAND OF ABOVE MENTIONED BLOCK NUMBERS SITUATED [ IN MAUJE VILLAGE BHADAJ IS OF THE INDEPENDENT OWNERSHIP ENJO YM ENT AND POSSESSION OF SELLER. THE SAM E IS SOLD BY THE SELLER TO THE PURCHASER ON THE BELOW MENTIONED TERMS AND CONDITIONS: - ' SELLER ARE AS PER PAGE 17 OF P.B. 1 FILED ON 6 - 6 - 2012 THEY WERE AS UNDER ' SOMABHAI AMBALAL PRAJAPATI CHANDUBHAI AMBALAL PRAJAPATI VISHNUBHAI AMBALAL PRAJAPATI' ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 11 NOW PLEASE REFER TO CHART APPENDED HEREWITH AT PAGE 207 SHOWS CORRECT FACT COME TO KNOW BY VIVEK REGARDING ACTUAL OWNER WHO WERE NO PARTY OF BANACHITTHI FURTHER AS PER CL 3 TO CL 7 NONE OF THE CONDITION W ERE FULFILLED PLEASE SEE THE CHART AT PAGE 206 APPENDED HEREWITH CHART AT A GLANCE SHOWS ANALYTIC FACTUAL NARRATION OF ALLEGED BLOCK AND IT IS NOT IN DISPUTE THAT MR. VIVEK HAS NOTHING TO DO WITH SUCH SALE HE IS NOT A CONFIRMING PARTY NOR ANY MENTION IN A NY SALE DEED THAT THEY HAVE RECEIVED ANY AMOUNT FROM VIVEK AND MR. VIVEK AGREE TO SUCH SALE IN LIEU OF ALLEGED BANA CHITTHI. SINCE ACCORDING TO VIVEK BANA CHITTHI WAS CANCELLED AFTER HAVING KNOWLEDGE OF CHEATING AND NO COMPLIANCE OF TERMS AND CONDITIONS &A CCORDINGLY HE HAS RECEIVED CHEQUE OF RS.11,00 , 000 BACK. 1. IT IS NOT IN DISPUTE THAT YOUR THAT YOUR APPELLANT HAS NOT PURCHASED ANY OF THE LAND MENTIONED IN AGREEMENT IN QUESTION OF ANY PAYMENT DOES NOT ARISE. BANAKHAL MONEY OF RS. 1100000 CHEQUE RECEIV ED BACK. IT IS PERTINENT TO NOTE THAT THERE IS NOWHERE MENTIONED OF RS. 1100000 CASH RECEIVED BY THEM AS ALLEGED ANYWHERE IN SAID LOOSE PAPER NOTING THAT OF PAGE 111 TO 118. OF A/22 OF SIZED PAPER. 2. FIRST STATEMENT U/S 132(4) RECORDED ON DATED 8 - 12 - 20 09 NEVER SPEAKS OF ANY SUCH PAYMENT BY YOUR APPELLANT 3. ON EXAMINATION DATED 24 - 12 - 2009 OF VIVEK HAS TOLD ON OATH (HAT HE HAS CANCELLED THE BANACHITTHI SINCE THERE WERE NO COMPLIANCE OF ANY OF THE TERMS AND CONDITIONS THAT OF SAID AGREEMENT AND HE HAS FILED DETAILS ALONGWITH EVIDENCE IN RESPECT OF EACH BLOCK VIDE HIS LETTER DATED 27 - 12 - 2009 (PLEASE SEE PAGE 23 TORN 46) 4. THERE AFTER STATEMENT OF SOMABHAI RECORDED ON 25 - 1 - 2010 I.E. AFTER 47 DAYS OF SEARCH. HE HAS NOT LAID ANY EVIDENCES THAT OF PAYMEN T MADE BY YOUR APPELLANT (PLEASE SEE HIS STATEMENT PAGE 47 TO 53 ) IT IS PERTAINS TO NOTE THAT WHILE EXAMINING MR. SOMABHAI ON 25 - 1 - 2010 AND 14 - 12 - 2011. MR. VIVEK 'S STATEMENT DATED 24 - 12 - 09 WAS NOT SHOWN, NOR PRAJAPATI ASKED TO MEET OUT THE SAY OF VIVEK AND. THE EVIDENCES LAID BY VIVEK HAS BEEN MEET OUT BY THEM ARE SHOWN TO MEET OUT THEM. 5. AGAIN ON 9 - 2 - 2010 MR. VIVEK EXAMINED AND HE CATEGORICALLY SAID THAT THERE IS NO IMPLEMENTATION OF SAID BANA CHITTHI AT ALL AS ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 12 EXPLAINED BY HIM EARLIER, FOR WHICH EV IDENCES PAID BY HIM WERE ON RECORD. 6. THERE IS NO QUESTION TO MAKE SUCH A HUGE PAYMENT THAT OF RS. 13 COROR OF WHICH THERE IS NO BASE NO HEAD AND TAILS SINCE HE COMES TO KNOW BANA CHITTHI IS CHEATING THAT TOO WITHOUT ANY SECURITY AND OR POSSESSION OF A NY OF THE LAND. 7. FURTHER IS THERE ANY ONE FOOL TO MAKE SUCH A HUGE PAYMENT 8 . FURTHER EVEN IN CROSS EXAMINATION PRAJPATI GROUP HAS NOT GIVEN ANY DETAILS THAT DATE, AMOUNT, WHO HAS GIVEN ETC 9 . THE PERSONS WHO CARRIED THE ACTUAL CASH, TIME THEREOF AND AMOUNTS ARE NOT IDENTIFIED. NO EXACT BREAK UP IS FORTHCOMING. 10. THERE WERE DISPUTES ABOUT THE LAW. IN SOME CASES THE OWNERSHIP WAS NOT WITH SOMABHAI OR, PANKAJBHAI. IT IS NOT POINTED OUT AS TO WHEN THEY TRIED TO GET TITLE CLEARANCE. THERE IS NO MODIFYING AGREEMENT TO GIVE OTHER LAND AND/OR ANY PERIOD OF EXTENDING PERIOD WHICH WAS THAT OF 13 MONTHS ONLY WHICH THEY CONFIRM IN THEIR STATEMENT. 11 . THE CALCULATION OF CONSIDERATION FROM DIFFERENT ANGLES DO NOT TALLY. THE SAME WAS POINTED OUT TO A.O. (AS PER BANA CHITHI, AS PER ALLEGED TRANSFER OF LAND) AS PER DISCLOSURE U/S 132(4). NO RECONCILIATION IS PRODUCED. 1 7 . THERE ARE HANDWRITING OF PANKAJ PRAJAPATI BUT RELIANCE IS PLACED ON SOMABHAI'S STATEMENT. 18. THE SAY THAT LAND WERE LATER ON TRANSFERRED TO AJAYBHAI AT THE INSTANCE OF THE ASSESSEE IS JUST AN ALLEGATION. THERE IS NO DOCUMENTARY EVIDENCE, ORAL EVIDENCE IS ALSO NOT SUPPORTED BY INDEPENDENT WITNESSES. 19. IN ABSENCE OF EXACT DATE OF AMOUNT PAID, NAM E OF PERSONS WHO BROUGHT THE MONEY ETC, HANDWRITING OF THIRD PERSON THE AMOUNT CANNOT BE TAXED IN THE HANDS OF THIRD PARTY. 20. NO TRANSACTION OF LAND HAS BEEN ENTERED INTO WITH VIVEK PATEL. NO EVIDENCE TO SHOW THAT HE WAS CONFIRMING PARTY. THE PRESUMPTI ON U/S 132 (4) / 132(4A) ARE BINDING ON THE PERSONS WHO MAKE THEM & NOT ON THIRD PARTY. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 13 MR. VIVEK PATEL HAS STA T ED THAT BANA CHITHI WAS CANCELLED. THE CHEQUE OF RS 11 LACS ISSUED WAS ALREADY TAKEN BACK. 21. IN SOME CASES THE PRICE OF THE LAND ACTUALLY SOLD (AJAY PATEL ETC) DIFFERS FROM THE PRICE AGREED UPON IN THE DEED. 22. AS ALLEGED BY PRAJAPATI LANDS WERE TRANSFERRED & CONSIDERATION AS PER BANACHITHI WAS RECEIVED BEFORE THE STIPULATED DATE APRIL 2006. HOWEVER THE SUBSEQUENT TRANSFER OF LAND ARE DO NE UP TO 18 - 6 - 2009. THE DEPONENTS HAVE NOT EXPLAINED AS TO NOW IT WAS POSSIBLE THAT CONSIDERATION (LAND) WAS NOT PASSED OVER EVEN IF THE TOTAL AMOUNTS WAS RECEIVED BY 2006 . VI IT SUBMITTED THAT WE RELY UPON FOLLOWING JUDICIAL AUTHORITY (1) P.V. KALYAN SUNDRAM 294 ITR 49 (SC) PAGE 208 TO 210 (2) UNLESS THE LOOSE PAPERS ARE SPECIFIC (NOT VAGUE ) ADDITION CANNOT BE MADE JAWAHARBHAI ATMARAM HATHAHVALA 128TTJ 36 (PAGE 211 TO 216) NO ADDITION CAN BE MADE IN RESPECT TO INVESTMENT IN PURCHASE OF PROPERT Y ON THE BASIS OF STATEMENT OF THIRD PARTY UNLESS DOCUMENTS BEARING SIGNATURE AND HAND WRITING OF THE ASSESSEE ARE FOUND. (3) SMT. K. V. LAKSMI DEVI V/S ACIT PAGE 129 TO 137 (PAGE 217 TO 225) NO ADDITION ON THE BASIS OF SEIZED MATERIAL IN THE HANDS OF THIRD PARTY UNLESS CORROBORATIVE EVIDENCES FOUND. (4) SAIF ALIKHAN MANSURALIV/S ACIT 13 ITR 204 (PAGE 226 TO 232) IF THE YEAR IN WHICH PAYMENT WERE MADE CANNOT BE EXACTLY AS CURTAINED. THE DEPONENT COULD NOT RECOLLECT THE EXACT DATE DEMONIZATION OF NOTES , PLACE WHERE PAYMENTS WERE MADE. IN SUCH CIRCUMSTANCES THE ADDITION CANNOT BE MADE. DIMSY FOOD AND CHEMICALS LTD. V/S DCIT 110 TTJ 450 PAGE 233 TO 241 NO NAME OF PERSON/DATE OF TRANSACTIONS NOTED ON DOCUMENT. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 14 FROM THE ABOVE IT IS CLEAR THAT UNLESS 1. THE DATE OF PAYMENT CAN BE ASCERTAINED WITH REASONABLE CERTAINTY 2. IDENTIFY OF PERSON WHO BROUGHT THE MONEY CAN BE ASCERTAINED THE ADDITION CANNOT BE MADE THE ABOVE CASES REFERRED TO ARE THE CASES OF CONCLUDED CONTRACT (I.E. SAIF ALIKHAN ACTUALLY WORKED IN THE FILM) THE PROPERTY WERE ACTUALLY TRANSFERRED. HOWEVER IN OUR CASE DUE TO INCOMPLETE TITLES ETC. THE BAN CHI T THI WAS CANCELLED AND CHEQUE GIVEN WAS TAKEN BACK . FURTHER THE SAY OF THE ASSESSEE IS THAT CHEQUE GIVEN AS ADVANCE WAS RECEIVED BACK. FURTHER IN THE LOOSE PAPER THERE IS NO MENTION THAT THE AMOUNT OF 11 00000 WERE RECEIVED (LET ALONE THE DA TE ON WHICH SAME WAS RECEIVED) 8. THE CIT(A), AFTER CONSIDERING THE AFORESAID SUBMISSIONS, HELD AS UNDER: - 5.7 FACTS OF THE CASE AND ARGUMENTS OF APPELLANT HAVE BEEN CAREFULLY CONSIDERED. IN HIS STATEMENT RECORDED ON 14/12/2011 SHRI SOMABHAI PRAJAPATI HAS CATEGORICALLY STATED THAT THE ENTIRE DEAL WAS MADE BY HIM WITH APPELLANT FOR THE PURPOSE OF SELLING VARIOUS PL OTS OF LAND. HE ALSO STATED THAT THE TOTAL PAYMENT OF ALL THESE DEALS WAS RECEIVED BY HIM BUT CIVIL DISPUTES WERE GOING ON IN RESPECT OF CERTAIN PLOTS OF LAND. HENCE SEPARATE SALE DEEDS WERE EXECUTED AT THE SAME RATES FOR DIFFERENT PLOTS OF LAND EVEN THOUG H THE SAME WERE NOT INCLUDED IN THE ORIGINAL AGREEMENT. HE CLARIFIED THAT THE SALE DEEDS WERE EXECUTED IN THE NAMES OF PERSONS WHICH WERE SUGGESTED BY APPELLANT. HE ALSO CLARIFIED THAT CASH WAS RECEIVED FROM TIME TO TIME FROM APPELLANT THROUGH ONE OF HIS P ERSON. THE ENTIRE AMOUNT OF CASH WAS RECEIVED BY APRIL, 2006 AND THE APPELLANT TOOK THE CONFIRMATION ON PHONE REGARDING RECEIPT OF CASH. HE ALSO STATED THAT THE SALE DEEDS WERE EXECUTED IN THE NAME OF SHRI AJAY PATEL. THE DEEDS WERE PREPARED BY ADVOCATES O F APPELLANT AND HIS SIGNATURES WERE TAKEN IN THE PRESENCE OF SUB - REGISTRAR. WHENEVER THESE DOCUMENTS WERE EXECUTED, THE RESPECTIVE AMOUNTS WERE RETURNED BACK TO THE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 15 APPELLANT IN CASH AND IN THIS MANNER THE ADJUSTMENTS WERE INTERNALLY SETTLED. 5.8 THE APPE LLANT ON THE OTHER HAND, HAS TRIED TO ARGUE THAT SINCE HE IS NOT THE ULTIMATE BUYER, HE DID NOT PAY ANY CASH TO SOMABHAI AND STATEMENT OF SHRI SOMABHAI IS FALSE. IT IS OBSERVED THAT THE ORIGINAL AGREEMENT TO SELL OR THE BANAKHAT IS DATED 18/1/2005 AND AS P ER THIS BANAKHAT, THE FIRST INSTALLMENT OF 25% WAS TO BE PAID ON 20/1/2005. IT IS UNLIKELY THAT APPELLANT CAME TO KNOW ABOUT DEFECTS IN TITLE OF LAND PROPOSED TO BE SOLD BY THIS BANAKHAT WITHIN 2 DAYS AND STOPPED THE PAYMENT. OBVIOUSLY, THE AMOUNT DUE ON 2 0/1/2005 WAS PAID BY APPELLANT. SIMILARLY, THE REMAINING AMOUNTS WERE ALSO PAID BY APRIL, 2006. ONLY SUBSEQUENTLY THE APPELLANT CAME TO KNOW ABOUT CERTAIN DISPUTES IN RESPECT OF THESE THE SAME RATES WHICH WAS AGREED EARLIE R. THE ENTIRE AMOUNT OF RS. 13. 02 CRORE WAS PAID BY APPELLANT AS ADVANCE TO SHRI SO MABHAI. THEREFORE, THE FACT THAT THE DEAL DID NOT MATERIALIZE SUBSEQUENTLY IS NOT RELEVANT. 5.9 IN VIEW OF CATEGORICAL STATEMENT OF SHRI SOMABHAI THAT HE RECEIVED FULL PAYMENT OF RS . 13.02 CRORES IN CASH FROM APPELLANT AS PER THE TERMS OF BANAKHAT THE BURDEN ON APPELLANT WAS VERY HEAVY TO PROVE THAT STATEMENT OF SHRI SOMABHAI IS NOT CORRECT. APPELLANT WAS ALSO ALLOWED OPPORTUNITY FOR CROSS EXAMINATION OF SOMABHAI BUT EVEN FROM THIS CROSS EXAMINATION APPELL ANT HAS NOT BEEN ABLE TO PROVE THAT STATEMENT OF SHRI SOMABHAI IS FALSE. UNDER THESE CIRCUMSTANCES AND IN VIEW OF REASONS GIVEN BY AO IN DETAIL IN THE ASSESSMENT ORDER, I HOLD THAT AO HAS RIGH TLY CONCLUDED THAT SUM OF RS.3,25, 50,000 / - WAS PAID BY APPELLANT ON 18/1/2005 AND 20/1/2005 TO SHRI SOMABHAI PRAJPATI, WHICH PERIOD FALLS DURING A.Y. 2005 - 06. ADDITION OF 3,25,50 ,000 U/S. 69 IS JUSTIFIED IN SUCH A SITUATION AND THE SAME IS CONFIRMED. GROUND NO. 3 OF THE APPEAL IS DISMISSED FOR A.Y. 2005 - 06. 5.10 SIMILARLY, GROUND NO.2 OF THE APPEAL FOR AY 2006 - 07 AND 2007 - 08 ARE ALSO DISMISSED. ADDITIONS OF RS.6,51,00,000/ - FOR AY 2006 - 07 AND RS.3,25,50,000/ - FOR AY 2007 - 08 ARE CONFIRMED. 8. BEFORE US, T HE AR OF THE ASSESSEE SUBMITTED AS UNDER: - (I) THE ASSESSEE HAS PRODUCED THE WORKING OF TOTAL CONSIDERATION AS PER BANAKHAT AND OTHER TOTAL CONSIDERATION AS PER SUBSEQUENT ACTUAL SALE DEEDS. NONE OF THE WORKINGS MATCH WITH THE AMOUNTS ON THE LOOSE PAPER. IN VIEW OF THIS THE ADDITION CANNOT BE BASED ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 16 O N THE LOOSE PAPER. AS THE SAME IS NOT BEING CORROBORATED WITH THE BANAKHAT OR ACTUAL SUBSEQUENT SALE. THE DIFFERENCE IS NO T RECONCILED IN TOTAL CONSIDERATION REFERRED TO IN LOOSE PAPER, THE ACTUAL AS PER BANACHITTHI, THE TOTAL AS PER AMOUNT SHOWN IN THE R ETURN PLUS 2.14 CRORES FOR WHICH IT IS ALLEGED THAT SALE DEED ARE PENDING AND AS PER LOOSE PAPER NO 111 THE AMOUNT IS 1279 LACS. NOT EVEN IN THE STATEMENTS BY VENDORS NO LIGHT IS THROWN ON THIS. (II) THE ACTUAL VENDORS ARE NOT PRODUCED FOR CROSS EXAMINA TION. IN SUCH CIRCUMSTANCES THE STATEMENT OF MR. PANKAJ PRAJAPATI IS NOT RELEVANT. STATEMENT OF PANKAJ RECORDED U/S 132 (4) IS NOT SUPPLIED TILL DATE THOUGH SPECIFICALLY DEMANDED AS EARLY AS 24 - 2 - 2010. THE LAND SHOWN IN BANAKHAT WAS SUBSEQUENTLY PURCHASED BY MR. AJAY PATEL. IN THE SALE DEEDS THERE IS NO MENTION OF CONSIDERATION RECEIVED FROM VIVEK PATEL. THERE IS NO RELATIONSHIP BETWEEN VIVEK PATEL AND AJAY PATEL. MR. PANKAJ PRAJAPATI HAS NOT STATED IN HIS STATEMENT AS TO HOW THE ALLEGED ADVANCED RECEIVED FROM MR. VIVEK PATEL WAS DEALT WITH. (III) AT THE TIME OF ENTERING INTO AGREEMENT SOME OF THE LAND WERE NEW SHARAT LAND. THE LIABILITY OF PAYING PREMIUM TO THE GOVERNMENT BEFORE SALE WAS ATTACHED TO THOSE LAND. IN SOME OF - THE LAND SUBSEQUENTLY PAYMENT LI ABILITY IS OF PURCHASER I.E. MR. AJAY PATEL, AS PREMIUM DIRECTLY TO GOVERNMENT, IN SOME CASE LAND REVERSE BACK TO OWNER. (IV) FURTHER THE BANACHITTHI IS NOT SIGNED BY ALL THE VENDORS NOT THEIR POWER OF ATTORNEY IS BROUGHT ON RECORD FOR SUCH TRANSACTIONS AND THEREFORE TO SAY THAT THERE WAS LEGAL CONTRACT BETWEEN THE SELLERS AND ALL THE PURCHASERS IS NOT PROPER. IN FACT AT THE MOST CONTRACT WAS WITH SOMABHAI. FURTHER THEY ALSO SAY THAT IN LIEU OF CERTA IN BLOCKS OTHER BLOCKS WERE TRANSFERRED. IT IS ALSO ADMITTED THAT THROUGH CONSIDERATION OF RS. 13 CRORES WAS RECEIVED ABOUT 9.86 VIGHAS OF LAND STILL REMAINED TO BE TRANSFERRED. THE AGREEMENT OF SALE IMMOVABLE PROPERTY IS NOT LIKE SALE OF GOODS AND IT APPL IES TO THE SPECIFIC PROPERTY ITSELF. IT IS ALSO NOT MADE CLEAR AS TO HOW THE BLOCKS BELONGING TO OTHER PERSON WERE TRANSFERRED TO FULFILL THE OBLIGATION UNDER BANAKHAT . (V) THE A.O. HAS REFERRED TO THE STATEMENT WHEREIN IT IS SAID THAT SOMABHAI HAS STAT ED THAT SOME PERSON FROM ASSESSEE'S OFFICE USED TO GIVE CASH. HOWEVER TILL TODAY 'THE PARTICULAR PERSON OR PERSONS ARE NOT IDENTIFIED. THUS EXCEPT CANCELLED BANACHITTHI THERE IS NOTHING ON THE RECORD. IT IS ALSO RELEVANT THAT IN NONE OF THE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 17 STATEMENT RECOR DED A.O. HAS NOT EVEN TRIED TO ASK ANYTHING ABOUT IDENTITY OF SUCH PERSON. (VI) THE A.O. HAS PLACED RELIANCE ON THE FACT THAT VARIOUS PERSONS HAVE PAID CAPITAL GAINS ON CONSIDERATION RECEIVED HOWEVER THE APPLICATION OF THE CONSIDERATION BY THE SELLERS IS NOT SHOWN. IT IS VERY IMPORTANT BECAUSE THE DISCLOSURE MADE UNDER THE HEAD LONG TERM CAPITAL GAINS ENJOYS OTHER EXEMPTION AND LESSER RATE OF TAX. (VII) THERE ARE VARIOUS INCONSTANCIES IN THE PAPER SEIZED, BANACHITTHI, STATEMENT RECORDED AND ULTIMATE AMOUNT SHOWN IN THE RETURN BY THE VENDORS AND IT IS WORTH NOTING THAT ALL THE VENDORS ARE NOT PARTY TO THE BANACHITTHI NOR ANY STATEMENT RECORDED OF SAID PERSONS. AGAIN IT IS WORTH NOTING THAT ALL THE PLOTS APPEARED IN BANACHITTHI AND NOT TRANSFER THE VEND ORS HAS MADE STATEMENT THAT SOME OTHER BLOCKS WHICH TRANSFER. HOWEVER THERE IS NO EVIDENCES TO SHOW THAT ORIGINAL BANACHITTHI WAS MODIFIED. THE WHOLE ASSESSMENT APPEARS TO HAVE BEEN BASED ON ORAL STATEMENT OF SOMABHAI AND PANKAJ OF WHOSE CROSS EXAMINATION IS REFUSED. IT IS AGAIN WORTH NOTING THAT THE VENDOR HAS SHOWN THE CONSIDERATION AS LONG TERM CAPITAL GAIN AND HAVE GOT THE BENEFIT OF TAX RATE ETC. THUS THEIR STATEMENT CANNOT BE TAKEN AS FACE VALUE. (VIII) THE A.O. HAS STATED THAT AS THE BLOCKS ARE TR ANSFERRED TO ULTIMATE BUYERS THE ADDITION IS PROPOSED IN THEIR HANDS. HOWEVER THERE IS NO FINDING HAS BEEN GIVEN AS TO WHETHER THE TRANSACTIONS ARE ENTERED INTO PAYING STAMP DUTY AT CIRCLE JANTRI RATES . (IX) THE A.O. HAS GIVEN THE FINDING THAT CASH AS BANACHITTHI WAS GIVEN TO THE VENDORS RELYING ON THEIR STATEMENTS AND LOOSE CHITS FOUND FROM THEIR POSSESSION. (X) SEARCH WAS ON 8 - 12 - 2009 AND 9 - 12 - 2009 THE STATEMENT OF SOMABHAI PRAJAPATI WAS RECORDE D ON 25 - 1 - 2010. ON 14 - 12 - 2009 THE STATEMENT OF VIVEK PATEL WAS RECORDED. HOWEVER INSPITE OF DE NIAL THE SAME WAS NOT SHOWN TO S OMABHAI AND NO EXPLANATION WAS SOUGHT ON THAT. THEREAFTER ALSO VIVEKBHAI'S STATEMENT WAS R - RECORDED ON 9 - 2 - 2010. I N SPITE OF THE ANOTHER DENIAL NO EXPLANATION IS SOUGHT FOR FROM PRAJAPATI. EVEN IN THE STATEMENT RECORDED ON 13 - 12 - 2011 AND 14 - 12 - 2011 NO CLARIFICATION ARE SOUGHT ON THIS ASPECT. MOST IMPORTANTLY NEITHER PANKAJ ON WHOSE HANDWRITING PAGE 111 IS WRITTEN FOR SOMABHAI HAS BE EN ABLE TO IDENTIFY THE PERSON CONCERNED WHO ACTUALLY BROUGHT THE MONEY FROM VIVEK PATEL'S OFFICE. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 18 (XI) THERE AR E VARIOUS INCONSISTENCIES. IN FACT MR. AJAY PATEL HAS PURCHASED CERTAIN BL OCKS DURING THE PERIOD OF BANACHITTHI. I.E A/C. YEAR 05 - 06. IF THE A MOUNTS WERE PAID BY CHEQUE HAS TO BE CONSIDERED AND ONLY BALANCE AMOUNT IS TO BE PAID IN CASH. THE SEIZED PAPER FOUND DOES NOT MENTION THE DATES. THERE IS NO BIFURCATION OF AMOUNT RECEIVED IN CASH AND CHEQUE. AGAIN AS PER PAGE 117 THE TOTAL AMOUNT OF RS. 1 30200000 IS RECEIVED IN CASH AS PER PAGE 111 THE AMOUNT IS RS. 12790000. IF THE PAPERS ARE CONSIDERED TO BE TRUE THEY MUST HAVE BEEN PREPARED SOME WHEREIN 2006 OR THEREAFTER .THIS AMOUNTS HAS TO BE RECONCILED WITH THE AMOUNTS RECEIVED FROM AJAY S PATEL OR ANY OTHER PERSON BECAUSE THE BLOCKS WERE ALREADY TRANSFERRED IN A/C. YEAR 2005 - 06 ITSELF. IN OTHER WORDS IF SOME BLOCKS WERE ALREADY PURCHASED BY AJAY PATEL DURING THE COURSE OF PERIOD OF AGREEMENT THERE WAS NO NEED FOR VIVEK PATEL TO GIVE FULL CASH CONSID ERATION AS PER BANACHITTHI. ( 1 ) THE PAPER ON WHICH THE AMOUNTS WERE RECORDED DOES NOT REFER TO ANY DATE AND ALSO DO NOT CONTAIN NAMES OF THE ASSESSEE AND AJAY PATEL. ( 2 ) MR. PANKAJ WAS NOT AT ALL PARTY TO THE AGREEMENT NOR WAS HE HOLDING THE POWER OF ATTORNEY. IN VIEW OF THIS HIS STATEMENT RECORDED MANY YEARS AFTER TRANSACTION SHOULD NOT BE CONSIDERED. (3 ) THE CROSS, EXAMINATION OF MR. PANKAJ AND SOMABHAI PATEI AND OTHER VENDORS SHOULD BE GIVEN. NO DOUBT MR. SOMABHAI WAS CALLED FOR CROSS EXAMINATI ON ON 16 - 12 - 2011 BUT NOTICE GIVEN WAS ONLY ON 14 - 12 - 2011. THE BEING, VERY SHORT THE ASSESSEE WAS NOT ABLE TO AVAIL THE OPPORTUNITY. WE HAVE SEEK ADJOURN BY SENDING TELEGRAM ON 16 - 12 - 2011 @ 1.15 AND LETTER DATED 17 - 12 - 2011 ALONGWITH COUNSEL'S VAKALATNAMA FO R ANY OTHER TIME. IN VIEW; OF THIS NO ADDITION CAN BE BASED ON HIS STATEMENT. IN ANY CASE ON 16 - 12 - 2011 OUR COUNSEL APPEARED PERSONALLY ON 20 - 12 - 2011 AND ASKED FOR CROSS EXAMINATION BUT THE SAME WAS REFUSED. ( 4 ) MR. VIVEK PATEL THE ASSESSEE AND MR. AJAY PATEL IN THEIR INDEPENDENTS STATEMENT RECORDED BY 1TO (INV) UNIT II HAVE STATED THAT THE BANAKHAT WAS CANCELLED . IT IS ALSO SUPPORTED BY THE FACT THAT THE VEND ORS HAVE THEREAFTER SOLD SOME OF THE LAND TO AJAY PATEL ETC.. IN NONE OF THE SALE DEED MR. VIVEK PATEL IS A CONFIRMING PARTY. THIS CLEARLY SHOWS THAT THE AGREEMENT IS NOT IMPLEMENTED AND NO ADVANCE MONEY HAS BEEN GIVEN. IT IS ABSURD TO SAY THAT SUCH A HUGE AMOUNT ONE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 19 CAN GIVE IN ADVANCE WITHOUT ANY POSSESSION OF LAND AND/OR ANY REGISTERED DOCUMENTS A ND ANY ADEQUATE STRONG SECURITY. (5 ) AFTER ENTERING INTO BANACHITHI THE VENDORS WERE NOT ABLE TO ESTABLISH CLEAR TITLE ( TO THE PROPERTY IN QUESTION. IN VIEW OF THAT BANACHITHI WA S CANCELLED. THE ADVANCE OF RS. 11,00,000 WERE GIVEN BY WAY OF CHEQUE. HOWEV ER THAT CHEQUE WAS CANCELLED. THE CANCELLED CHEQUE WAS PRODUCED BEFORE IT0 (INV) UNIT II. ON OTHER HAND THERE IS NO SUCH NOTING BY PRAJAPATI IN THEIR LOOSE PAPER THAT RS. 11,00,000 CASH RECEIVED AS ALLEGED BY THEM. ( 6 ) THE STATEMENT OF SOMABHAI PRAJAPATI REFERS TO DISCLOSURE MADE BY HIS SON PANKAJ (PLEASE SEE STATEMENT OF S OMABHAI DATED 25 - 1 - 2010 Q NO 7). HOWEVER STATEMENT OF PANKAJ HAS NOT BEEN GIVE N TO US SO FAR TILL DATE THOUGH WE HAVE SPECIFICALLY DEMAND VIDE OUR APPLICATION DATED 24 - 2 - 2010 ADDRESSED TO 1TO (INV) UNIT 11 AS WELL AS OUR LETTER DATED 5 - 10 - 2011 ADDRESSED TO ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2 (2). THE STATEMENT OF PANKAJ U./S 132 (4) WAS RECORDED AND IT IS FIRST STATEMENT IN RESPECT OF DISCLOSURE AND DEALINGS, HENCE IT IS M OST RELEVANT ( 7 ) IN 14 - 12 - 2011 MR. S O MABAI HAS STATED THAT THEY HAVE EXECUTED THE REMAINING BLOCK NUMBER SALE DEED ALSO. HOWEVER THE SALE DEEDS IN RESPECT OF THE FOLLOWING BL O CKS LANDS BLOCK 540, 487, 497, AND 509 (SOME PORTION) ARE NOT YET DONE. ( 8 ) THE QUESTION NO 8 IS TO BE NOTED IT IS A LEADING QUESTION. THE I.T. OFFICER SUGGESTS THE NAME OF VIVEK PATEL AGAIN THE PERSON FROM VIVEK PATEL'S OFFICE IS NOT YET IDENTIFIED . (9 ) IN Q 10 HE HAS STATED THAT DOCUMENTS WERE EXECUTED WITH THE PERSONS STATED BY VIVEK PATEL. HOWEVER THE STATEMENT IS NOT BELIEVABLE AS VIVEK PATEL IS NOT CONFIRMING PARTY. ( 10 ) AS REGARDS AMOUNT OF RS. 1100000/ - PLEASE REFER Q NO 4 AND REPLY AS PER STATEMENT OF SOMABHAI A PRAJAPATI AND PLEASE REFER STATEMENT OF MR VIVEK DATED 24 - 12 - 2009 Q NO 7 & ITS REPLY Q. 9 AND ITS REPLAY Q 10 AND ITS REPLY Q NO 11 AND ITS REPLY. MR . SOMABHAI NEVER SHOWN MR. VIVEK STATEMENT DATED 24 - 12 - 2009 WHICH IS ON RECORD AS ON 25 - 1 - 2010 AND 14 - 12 - 2011 WHICH STATEMENT OF MR. SOMABHAI WAS RECORDED, REASON BEST KNOWN TO AUTHORITY: NO MATER IAL ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 20 BROUGHT ON RECORD THAT HOW V IVEK SUPPOSE TO PAY SUCH A HUGE AMOUNT WITHOUT ANY SECURITY VIZ. POSSESSION OF LAND AND/OR OTHER MATERIAL WHICH HAVE ITS EVIDENTIARY VALUE FOR SUCH A HUGE CONSIDERATION. FURTHER THERE IS NO MATERIAL BROUGHT ON RECORD THAT ACTUAL SALE TO OTHER PARTY IS AT THE INSTANCE OF MR. VIVEK EXCEPT ORAL S TATEMENT OF SAID PRAJAPATI WHO IS NOT A OWNER OF ALL THE BLOCKS. PLEASE REFER TO Q NO 8 OF STATEMENT DATED 24 - 12 - 2009 Q.I0 DATED 24 - 12 - 2009 WHICH RUNS AS UNDER 'Q 10 AFTER THINKING ONCE MORE PLEASE STATE AS TO WHEN AND HOW THE LANDS SHOWN IN THE AGREEMENT TO SALE WAS PURCHASED AND PAYMENT MADE REPLY TO Q 10 AS PER THE REASONS MENTIONED ABOVE THE CHITTHI OF THE AGREEMENT TO SALE WAS CANCELLED. THUS 1 HAVE NOR PURCHASED ANY LANDS NOR MADE ANY PAYMENTS FOR THE SURVEY NUMBERS SHOWN ABOVE AND HENCE NO QUESTION ARISES OF MAKING ANY PAYMENT AND AS THE AGREEMENT TO SALE WAS CANCELLED THE CHEQUES OF AGREEMENT TO SALE MONEY WAS ALSO CANCELLED. THERE IS NO MATERIAL BROUGHT ON RECORD TO CORROBORATE SAY OF MR PRAJAPATI I.E. 'WHENEVER THE SALE DEED WERE EXECUTED A GAINST THE WHOLE AMOUNT AS PER THE AGREEMENT TO SELL, THE AMOUNT OF CASH AS PER THE DEED WAS RETURNED TO SHRI VIVEKBHAI' IF SO WHERE IS DETAILS OF SUCH WITHDRAWAL AND REPAYMENT ONWARDS OF SAID AMOUNT FROM BANK PLEASE REFER TO Q 11 AND ITS REPLY; AS PER STATEMENT DATED 14 - 12 - 2001 OF SOMABHAI ( 11 ) THE A.O. HAS, BIFURCATED THE TOTAL AMOUNT AS PER LOOSE PAPER I.E. RS. 13,02,00,000 IN FOUR EQUAL INSTALLMENT. THUS IT APPEARS THAT SAME FUNDS HAVE ROTATED. THE A.O. HAS NOT TAKEN ANY COGNIZANCE OF THE SAME. ( 12 ) IN A - 11 HE HAS STATED THAT SALE DEEDS WERE MADE BY ADVOCATES OF VIVEKBHAI. HOWEVER NONE OF THE ABOVE CASE HAS BEEN IDENTIFIED. THE FEES OF THE ADVOCATES WAS NOT PAID BY THE ASSESSEE. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 21 ( 13 ) THE RELIANCE IS PLACED BY SIZED PAPER NO 114. IT SHOWS THE LIST OF BLOCKS AND AMOUNTS ARE MENTIONED AGAINST SOME BLOCKS. AGAINST BLOCK NO 502/505 'CANCELLED' IS WRITTEN. NO CLARIFICATION IS SOUGHT ON THIS. THE DATE IS NOT MENTIONED ON THIS PAPER. THE REFERENCE TO THE ASSESSEE IS NOT THERE ON THIS STATEMENT. ( 14 ) THE D IFFERENCE IS NOT RECONCILED. IN SPITE OF ISSUING SUMMONS AND RECORDING THE STATEMENT NO QUESTION OF THIS LIKE ARE EVEN PUT TO SOMABHAI PRAJAPATI AND PANKAJ PRAJAPATI THUS DUE TO THE ABOVE INCONSISTENCIES THE CROSS EXAMINATION OF DEPONENTS ARE REQUIRED, WH ICH AVOIDED SAFELY SINCE 20 - 12 - 11 COUNSEL APPEARED AND ASSTT. COMMISSIONER OF INCOME TAX REFUSED TO GIVE CROSS EXAMINATION THOUGH THE ORDER PASSED ON 30 - 12 - 2011 I.E. AFTER 10 DAYS. ( XII) . DURING THE COURSE OF SEARCH THE STATEMENT OF SOMABHAI AMBALAL PRAJAPATI WAS RECORDED ON 25 - 1 - 2010 I.E. AFTER THE STATEMENT RECORDED OF MR. VIVEK WHICH WAS ON 24 - 12 - 2009 NO REFERENCE WAS GIVEN TO MR. SOMABHAI REGARDING SAY OF M R.VIVEK AS PER HIS STATEM ENT DATED 24 - 12 - 2009 AND /OR HIS SUBMISSION DATED 27 - 12 - 2009 FILED ON 29 - 12 - 2009 ALONGWITH EVIDENCE. ALONGWITH THE BANAKHAT A LOOSE PAPER RECORDING CERTAIN AMOUNTS WERE ALSO FOUND. MR. SOMABHAI AMBALAL PRAJAPATI HAS NOT CLARIFIED ON THE SAME. THE STATEMENT OF MR. PANKAJ PRAJAPATI WAS RECORDED ON 13 - 12 - 2011. IN THE STATEMENT HE HAS CLARIFIED THAT THE AMOUNT RECORDED ON THE PAPER ARE AMOUNTS RECORDED ON THE LOOSE PAPER ARE IN RESPECT OF AMOUNTS RECEIVED AS CONSIDERATION TOWARDS AGREEMENT EARLIER REFERENCE TO. IT IS NOT KNOWN WHETHER THERE WAS SEARCH WARRANTS IN RESPECT OF MR. PANKAJ S PRAJAPTI AND ANY STATEMENT RECORDED OF SAID PANKAJ AT THE STAGE OF SEARCH. FURTHER IT IS ALSO NOT KNOW TO US THAT HOW MANY PERSONS STATEMENT WERE RECORDED AT THE TIME OF SEARCH. (XIII) HE ALSO STATED THAT THE LAND/PLOTS WERE TRANSFERRED TO MR. AJAY PATEL. IT WAS BROUGHT TO THE NOTICE OF THE LEARNED A . O. THAT THE STATEMENT RECORDED U/S 132 (4) CAN BE USED AS EVIDENCES AGAINST THE PERSON MAKING IT AND NOT WHOLE WORLD. FURTHER 132 (4) EMPOWERS A.O. TO EXAMINE THE PERSON WHO IS FOUNDS TO BE IN POSSESSION OF THE DOCUMENTS. IN THE CASE ON HAND IT IS NOT CLEAR AS TO WHO WAS FOUND TO BE POSSESSION OF BANAKHAT AND OTHER RELATED DOCUMENTS AND WHAT WAS THAT PERSON'S STATEMENT U/S 132 (1). IF THE STATEMENT IS NOT RECORDED U/S 132(4) AND AFTERWARDS IT DOES NOT HAVE SAME VALUE. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 22 (XIV) IN VIEW OF ALL THESE IT CAN ONLY BE STATED THAT REVENUE HAS FAILED TO DISCHARGE ONUS TYING ON IT. (XV) DURING THE COURSE OF HEARING THE LIST OF SUBMISSION, T HE STATEMENTS RECORDED ETC. IS AS PER ANNEXURE A. THE MATTER IS RELATED TO THIRD PARTY ASSESSMENT ON RELATION TO SEARCH AT SOMABHAI A PRAJAPATI'S CASE. THE JURISDICTION IS ASSUMED ON THE BASIS OF BANACHITTHI FOUND FROM HIS PLACE. PLEASE FIND HEREWITH THE D ETAILED CHART OF SEQUENCE OF EVENTS AND CORRESPONDENCE WHICH IS ON THE RECORD AS PER ANNEXURE A . (XVI) A CHART AT A GLANCE OF ANALYTICAL NARRATION OF TERMS AND CONDITION OF BANA CHITTHI AND RATE AGREED UPON THAT OF AS PER SAID BANA CHITTHI PAGE 13 TO 16 WAS HAVING PRE CONDITION THAT OF AS P ER CL 3 TO CL. 7 AND REQUEST TO READ THIS BANA CHITTHI AN ANNEXURE B PAGE C & D AND STATEMENT RECORDED BY ITO (INV) UNIT II AHMEDABAD ON 24 - 12 - 2009 OF MR. VIVEK PATEL PAGE 5 TO 8 WHICH MAKES IT CLEAR THAT THERE IS NO QUESTION OF ANY SUCH PAYMENT AT ALL, WHO WILL PAY SUCH A HUGE AMOUNT WHEN THERE IS NO SURETY OF TITLED CL EAR OF LAND AND NO SECURITY OF THIS AMOUNT WHICH ALLEGED TO HAVE BEEN PAID BY THE PAYEE APPELLANT (I) NO POSSESSION OF LAND (II) NO PROMISSORY NOT OR ANY OTHER DOCUMENTATION OF SUCH PAYMENT. (III) NO COGENT AND CONVINCING MATERIAL BROUGHT ON RECORDS THAT THERE IS PRIMA FACIE CASE THAT ON FACTS PAYMENT IS DUE WITH REFERENCE TO AGREEMENT ARE C OMPLIED WITH AND PARTY CONCERNED WHO HAD RIGHT OF BANAKHAT HAS BEEN MADE PARTY IN SALE DEED AND HE CARRIED OUT HIS BANAKHAT RIGHT AND ALLEGED INVESTMENT MADE BY HIM. (IV)(A) ENTIRE STORY IS NOTHING BUT ORAL SAY UNBELIEVABLE ALLEGED TRANSACTIONS. (B) NO CROSS EXAMINATION (C) STATEMENT OF YOUR APPELLANT IS ON RECORD AS ON 24 - 12 - 2009 AUTHORITY HAS PREFERRED NOT TO SHOW SAY OF MR. VIVEK TI MR. SOMABHAI ON 25 - 1 - 2010 AND OR ON 14 - 12 - 2011 REASON BEST KNOWN TO THE AUTHORITY. (D) THERE IS NO DETAILS BROUGHT OUT ON RECORDS IS SUCH AMOUNT RECEIVED BY THEM ON RESPECTIVE DATE WHAT IS ONWARD TRANSACTIONS OF SAID AMOUNT I.E. AMOUNT 18 - 1 - 2005 1100000 WHERE IT HAS GONE NO SUCH DETAIL S BROUGHT ON RECORD 20 - 1 - 2005 31450000 WHERE IT HAS GONE NO SUCH DETAILS BROUGHT ON RECORD 20 - 6 - 2005 32550000 WHERE IT HAS GONE NO SUCH DETAILS BROUGHT ON RECORD 20 - 11 - 2005 32550000 WHERE IT HAS GONE NO SUCH DETAILS BROUGHT ON RECORD 20 - 4 - 2006 32550000 WHERE IT HAS GONE NO SUCH DETAILS BROUGHT ON RECORD ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 23 (I) ON FACTS IT IS CLEAR THAT NO PRUDENT MAN WILL PURCHASE SUCH DISTURBED LAND WITHOUT FULFILLI NG CONDITION AS PER CL. 3 TO C L 7 IN FACT THEY FAILED TO SATISFY THE SAID CONDITIONS (II) NO PRUDENT MAN WILL PAY SUCH A HUGE AMOUNT WHEN THERE IS NO POSSIBILITY OF DEAL WILL GO THROUGH. (III) NO PRUDENT MAN WILL GIVE SUCH A HUGE AMOUNT WITHOUT ANY SECURITY OR SURETY OF SUCH PAYMENT (IV) NO PRUDENT MAN WILL LET GO HIS VALUABLE RIGHT IF AT ALL ONE IS HAVING THE SAME NO SUCH MATERIAL BROUGHT ON RECORD ENTIRE EXERCISE IS TO MAKE USE OF SAID DEAD PAPER, FOR THEIR MOTIVATED OBJECT TO GET BENEFIT UNDER THE ACT TO CURTAIL THE TAX LIABILITY DISCLOSING THEIR UNACCOUNTED MONEY. (V) THERE IS NO TALLY OF BLOC K NOS, THERE IS NO TALLY OF AREA, THERE IS NO TA LLY WITH AMOUNT. . THERE IS NO TALLY WITH BANA CHI TTHI BLOCK AND SALE OF LAND AND ITS AREA. THERE IS NO TALLY WITH ULTIMATE SALE BLOCK NO ARE A AND TERMS AND OBLIGATION IN STATEMENT THEY SAY THEY DO NOT KNOW MR. AJAY. PLEASE REFER TO Q NO 11 OF THE STATEMENT DATED 14 - 12 - 2011 IN BANA CHITTHI SELLER ARE S/S .SAP/CAP/YAP AND IN MOST OF THE BLOCKS IN ACTUAL LAND OWNERS ARE DIFFERENT WHO NEVER ENTERED INTO AGREEMENT, WHO NEVER SAYS THEY RECEIVED ANY AMOUNT OTHER T HEN THAT OF SHOWN IN SALE DEED. THEY ALL ARE HAVE FILED FORM NO LAND SAID SALE OF LAND WAS COUPLED WITH HUGE LIABILITY OF PREMIUM TO PAID BY PURCHASER. WHILE AS PER AGREEMENT PREMIUM WERE TO BE PAID BY THE SELLER HAVING ALL THESE MATERIAL FACTS ON RECORD E VEN THEN ORAL SAY WITHOUT ANY EVIDENCES IS BEING BELIEVED AND THAT THAT TOO BY NOT ALLOWING CROSS EXAMINATION. (XVII) IN SUMMARIES THE ISSUE, WHOLE CASE THE RELIANCE IS PUT ON BANAKHAT DATED - IB - 1 - 2005. THE ASSESSEE HAS SAID THAT SUCH DOCUMENTS WAS NEVER IMPLEMENTED. THE ADVANCE WAS GIVEN BY CHEQUE HAS BEEN GIVEN BACK. THE VENDOR HAS IN FACT NOT BEEN ABLE TO TRANSFER THE LAND IN THE GIVEN TIME. THEN ULTIMATELY SOME OF THE BLOCKS WERE TRANSFERRED TO MR AJAY PATEL. IN THE STATEMENT RECORDED U/S 131 BOTH A SSESSEE AND AJAY PATEL HAS DENIED ANY CONNECTION INTERSE AND WITH BANAKHAT. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 24 THERE WERE DISPUTE WITH RESPECT TO SOME BLOCKS WHICH WERE NOT CLEARED . THE POSSESSION ALSO WAS NOT GIVEN. WHEN THE TOTAL CONSIDERATION STATED TO BE RECEIVED IS MATCHED WITH THE RATES IN BANAKHAT ATTAIN THERE IS A DISPARITY THE STATEMENT OF MR. SOMABHAI PRAJAPATI AND MR. PANKAJ PRAJAPATI ARE REQUIRED TO BE THOROUGHLY EXAMINED . HE HAS EXPLAINED THE INVESTMENT MADE OTHER EXPENSES AS TELESCOPED AGAINST THE CASH GENERATED FROM THIS SO CALLED TRANSACTION. IN THE CASE OF CAPITAL GAINS ON SALE OF LAND THE BENEFIT IF LOWER RATE OF TAX, BENEFITS U/S 54G ETC. ARE AVAILABLE. THUS HE HAS SHOWN THE CASH AVAILABLE AS UTILIZED AGAINST UNDISCLOSED EXPENSES, INVESTMENT ETC. THUS THE ST ATEMENTS A RE OF INTERESTED WIT NESSES. THE OTHER OWNERS OF LAND ARE NOT EXAMINED. THERE IS NO DOCUMENT WHICH SHOWS EXACT DATED OF RECEIPT OF CASH FROM THE ASSESSEE. THE PRAJAPATI ARE NOT ABLE TO IDENTIFY THE PERSONS WHO ACTUALLY BROUGHT THE SO CALLED CASH. THE PLOTS WERE ULTIMATELY SOLD TO OTHER PERSONS. IT IS STATED THAT AT THAT TIME CASH WAS GIVEN BACK. HOWEVER THE SIGNATURE OF RECIPIENT OF CASH OR ANY SUCH DOCUMENT IS NOT AVAILABLE. THUS THE WHOLE ADDITION IS BASED ON THE STATEMENT OF THE PRAJAPATI. AS THE S AME AFFECTS THE ASSESSEE THE PROPER OPPORTUNITY SHOULD BE GIVEN TO CROSS EXAMINE. MR. PANKAJ PRAJAPATI AND MR. SOMABHAI PRAJAPATI. RELIANCE IS PLACED ON 210 ITR 103 T HE STATEMENT OF THE WITNESSES CLEARLY SHOW THAT THEY ARE HOSTILE TO THE ASSESSEE. AG AIN THE RELEVANT DETAILS I.E. RETURN OF INCOME FILED BY THE DEPONENTS IS ALSO REQUIRED FOR THE PURPOSE OF EFFECTIVE CROSS EXAMINATION. (XVIII) IN VIEW OF THE FACTS MATERIAL O N RECORD ASSTT. COMMISSIONER OF INCOME TAX HAS DONE GREAT INJUSTICE TO YOUR APPELLANT IN TAXING ALLEGED AMOUNT OF WHICH NO HEAD AND TAIL IT WILL BE CLEAR FROM THE FACTS THAT ONE HAS STARTED WITH WRONG PREMISES, DRAWING WRONG INFERENCE AND C AME TO WRONG CONCL USION. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 25 9. ON THE OTHER HAND, THE WRITTEN SUBMISSIONS FILED BY THE DR AS UNDER: - THE APPELLANT HAS QUESTIONED THE ASSESSMENT OF VARIOUS AMOUNTS IN VIEW OF THE UNDER MENTIONED FACTS: A. HE IS NOT THE BUYER. B. HE CANCELLED THE AGREEMENT WITH SOMABHAI PRAJAPATI AND RELATIVES TO TRANSACT IN LAND, SINCE THE TITLE OF THE LAND WAS FOUND TO BE DEFECTIVE. C. HE RECEIVED BACK THE ADVANCE OF RS.11,00,000/ - FROM SOMABHAI PRAJAPATI. D. THEREAFTER HE HAD NOTHING TO DO WITH THE CONCERNED LAND OF THE PRAJAPATI' S. AGAINST THIS THE EVIDENCE AGAINST THE APPELLANT IS AS BELOW: 1. THE AGREEMENT TO SALE DATED 18.01.2005 IS A VALID DOCUMENT AND PRECISE ONE ALSO GIVING SPECIFIC DATES OF PAYMENTS TO BE MADE BY VIVEK PATEL. 2. THE APPELLANT'S CLAIM OF HAVING CANCELLE D THIS AGREEMENT IS NOT SUPPORTED BY ANY FURTHER CANCELLATION AGREEMENT WHICH SHOULD NORMALLY HAVE BEEN AVAILABLE WITH THE SELLER (PRAJAPATI) AND SHOULD HAVE BEEN FOUND DURING THE SEARCH. 3. THE FACT OF CANCELLATION HAS NOT BEEN ACCEPTED BY THE SELLER SO MABHAI PRAJAPATI IN THE CROSS EXAMINATION CONDUCTED ON 14.08.2012. 4. THE SO CALLED DEFECTS CLAIMED AS REASON FOR CANCELLATION BY VIVEK PATEL ARE ACTUALLY KNOWN TO HIM AT THE TIME OF THE AGREEMENT ITSELF AND HIGHLIGHTED IN THE STATEMENT IN THE AGREEMENT (PAPER BOOK 3 OF THE ASSESSEE PAGE NOS. 263 - 264). 5. THE RECEIPT OF CASH AS PER THE TERMS OF THE AGREEMENT IS PROVED BY THE CONFIRMATION OF THE SATISFACTION OF THE TERMS IN STATEMENTS GIVEN BY SOMABHAI PRAJAPATI. 6. IT IS ALSO CONFIRMED BY DOCUMENT NO. A - 22, P - 114 W HICH REVEALS RECEIPT OF CASH AS PER THE TERMS OF THE AGREEMENT. 7. A FURTHER DOCUMENTS SEIZED NAMELY A - 22, P - 117 ALSO EVIDENCES RECEIPT OF CASH TO THE TUNE OF RS. 13,02,00,000/ - . ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 26 8. HENCE THE DOCUMENTARY EVIDENCE FOUND DURING THE SEARC H SUPPORT EACH OTHER AND PROVES THE VERACITY OF AGREEMENT DATED 18.01.2005. 9. THE SELLER I.E. PRAJAPATI'S HAVE READILY FILED RETURNS OF INCOME AND PAID THE TAXES WHICH ALSO SHOW THAT THE TRANSACTION WAS GONE THROUGH ON THE HIGHER AMOUNT AS PER AGREEME NT AND NOT ON THE PETTY AMOUNT SHOWN IN THE DOCUMENTS WITH THE BUYERS. 10. THE FACT OF SHRI VIVEK PATEL CONTINUING WITH THE AGREEMENT WITH THE PRAJAPATI'S IS ALSO CLEAR FROM THE FACT THAT HE DID NOT HAVE ANY LEGAL DISPUTES THEREAFTER WITH THE PRAJAPATI'S. 11. WITH THE EXISTENCE OF THE OVERRIDING EVIDENCE AGAINST THE APPELLANT IN TERMS OF THE AGREEMENT DATED 18.01.2005 ETC. THE APPELLANT HAD TO DISCHARGE THE ONUS OF REBUTTING THIS EVIDENCE U/S. 132(4) BUT FAILED BADLY TO DISPROVE ANYTHING IN THE CROSS EXAM INATION HELD ON 14.08.2012. 12. OVER AND ABOVE ALL THIS A NOTARIZED POWER OF ATTORNEY DATED 18.06.2009 WAS IMPOUNDED FROM ARBUDA BRICKS, NEW VADAJ, AHMEDABAD DURING THE COURSE OF SURVEY U/S. 133A. THIS IS MENTIONED IN PAGE 17 OF THE CIT(A)'S ORDER IN AJAY S. PATEL'S CASE. THIS SHOWS THAT VISHNU PRAJAPATI WAS EMPOWERED VIVEK PATEL ON JF 18.06.2009 TO CARRY OUT NECESSARY LEGAL MATTERS IN CONNECTION WITH THE SALE OF LAND BLOCK NO. 513 (WHICH WAS SOLD TO AJAY S. PATEL). THIS CLEARLY SHOWS THAT SHRI VIVEK PATEL CONTINUED HIS RELATIONSHIP WITH THE PRAJAPATI'S AS PER THE AGREEMENT DATED 18.01.2005 (COPY OF POWER ENCLOSED). 13. IT IS CLEAR THAT VIVEK PATEL IS MAKING FALSE STATEMENT WHEN HE SAYS IN HIS CROSS EXAMINATION BY AJAY PATEL ON 14.08.2012 (CIT(A)'S PAGE 35 , Q. 11 AJAY S. PATEL) AND REEXAMINATION ON 04.09.2012 PAGE 38 CIT(A)'S Q. 10, THAT HE HAS BEEN KNOWING AJAY PATEL ONLY AFTER THE SEARCH OF SOMABHAI PRAJAPATI. THE POWER OF ATTORNEY REVEALS THAT VIVEK PATEL KNEW AJAY PATEL AT LEAST SIX MONTHS BEFORE THE SE ARCH IN THE COURSE OF HIS DEALINGS RELATING TO LAND BLOCK 513. IT SHOULD THEREFORE BE CONCLUDED THAT ALL STATEMENTS MADE BY VIVEK PATEL, NOT SUPPORTED BY DOCUMENTARY EVIDENCE SHOULD BE DISBELIEVED. 14. HENCE THE AGREEMENT DATED 18.01.2005 WAS A VALID ONE AND THE APPELLANT HAD PAID ALL THE MONIES TO THE PRAJAPATI'S AS PER TERMS OF THE AGREEMENT. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 27 15. HENCE THE ASSESSMENT OF THE AMOUNTS WAS RIGHTLY UPHELD BY THE CIT(A). 16. THE ASSESSMENT MADE IN THIS CASE THOUGH MENTIONED AS PROTECTIVE, IS A SUBSTANTIAL ADDITION. SO ALSO THE ASSESSMENT IN THE CONNECTED CASE OF AJAY PRAHLADBHAI PATEL. THE SAME AMOUNTS AND TRANSACTIONS ARE NOT TAXED THOUGH IT ALL REVOLVES AROUND LAND DEALINGS. HENCE, BOTH THE PARTIES NEEDS TO BE TAXED BASED ON THE PRECISE FACTS STATED BY TH E ASSESSING OFFICERS. SINCE THE FACTS HAVE BEEN BROUGHT OUT BY THE ASSESSING OFFICER, PROTECTION U/S. 292B IS INVOKED. 17. IN THE ADDITIONAL EVIDENCE GIVEN IN AJAY SURENDRABHAI PATEL'S CASE, IT HAS BEEN HIGHLIGHTED THAT THE SALE AGREEMENT WITH DHIRUBHAI A MIN CLEARLY STATES THAT NO BANAKHAT EXISTED. HERE IT MAY BE NOTED THAT THE SAME WAS ON 13.05.2010 MUCH AFTER THE SEARCH ON 08.12.2009 AND HENCE THE DOCUMENT WAS TAILORED, AT THE INSTANCE OF VIVEK PATEL TO SUBSTANTIATE HIS CLAIM THAT THE BANAKHAT HAD BEEN R ESCINDED. THIS WILL FURTHER BE PROVED IF THE OTHER 8 DOCUMENTS ENTERED INTO BEFORE THE SEARCH ACTION ARE FILED AND SUBJECT TO FURTHER INQUIRIES, SINCE NEW EVIDENCE HAS BEEN FILED. IT IS REQUESTED THAT FURTHER INQUIRIES MAY BE ORDERED AS ABOVE BEFORE TAKING THE EVIDENCE ON RECORD. DETAILED SUBMISSIONS ON FACTS ARE AS PER ORAL SUBMISSIONS. THE LEGAL ISSUES ARE AS PER ORAL SUBMISSIONS. SD/ - ENCL: AS ABOVE. (T. P. KRISHNA KUMAR) DATE: 26.09.2014 COMMISSIONER OF INCOME TAX, PLACE: AHMEDABAD. 'C' BENCH, ITAT - III, AHMEDABAD. NO. DCIT/CIR - 7/ITAT/2014 - 15 DATE: 09/10/2014 TO, THE HONOURABLE MEMBER (JUDICIAL MEMBER) INCOME TAX APPELLATE TRIBUNAL, BENCH'C' AHMEDABAD - 380009. SUB: APPEAL IN THE CASE OF SHRI VIVEK PRAHLADBHAI PATEL - IT (SS) A NO. 128, 129 & 130/AHD/2013 - A.YRS. 2005 - 06, 2006 - 07 AND 2007 - 08 - ADDITIONAL EVIDENCE TO BE FILED - REG. KINDLY REFER TO THE ABOVE. ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 28 2. IN THIS CASE APPEAL WAS FILED BY THE ASSESSEE VIDE NOS. IT (SS) A NO. 128, 129 & 130/AHD/2013 - A.YRS. 2005 - 06, 2006 - 07 AND 2007 - 08 - AND HEARING WAS HELD ON 25 TH AND 26 TH SEPTEMBER 2014 BEFORE YOUR HONOUR. THE ISSUE INVOLVED WAS WITH REGARD TO ADDITION MADE U/S 69 OF THE ACT IN RESPECT OF REAL ESTATE TRANSACTIONS AS UNDER: A.Y ADDITION MADE A.Y. 2005 - 06 32550000 A.Y.2006 - 07 65100000 A.Y. 2007 - 08 32550000 3. THE ASSESSING OFFICER RELIED UPON THE MOUS DATED 28/01/2005 FOUND DURING THE COURSE OF SEARCH/SURVEY AND ALSO STATEMENT RECORDED OF THE SELLER OF THE LAND VIZ. PRAJAPATI GROUP REPRESENTED BY SHRI SOMABHAI A PRAJAPATI. AS PER THE DOCUMENTS SEIZED/ IMPOUNDED, THE ASSESSEE, HAD ENTERED INTO AN MOU WITH THE PRAJAPATI G ROUP FOR SALE OF LAND AT BHADAJ LOCATED AT VARIOUS SURVEY NOS, SUBJECT TO PERIODIC PAYMENTS. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE, SHRI VIVEK PRAHLADBHAI PATEL TOOK A STAND THAT HE DID NOT MAKE THE PAYMENTS AS PER MOU SINCE TH E MOU DATED 28/01/2005 HAD BEEN CANCELLED. THE ADDITIONS MADE WAS CONFIRMED BY THE LD. CIT(A) - III, AHMEDA BA D. 4. THE ASSESSEE PREFERRED APPEAL AGAINST THE CIT(A)'S ORDER. DURING THE APPELLATE PROCEEDINGS BEFORE YOUR HONOUR, THE LD. CIT (DR) HAD AN OPPORTU NITY TO EXAMINE THE FILE OF SHRI AJAI PATEL AND VERIFICATION OF ASSESSMENT ORDER AND RECORDS SHOWED THE EXISTENCE OF AN MOU BETWEEN SHRI VISHNUBHAI AMBALAL PRAJAPATI AND SHRI VIVEK PRAHLADBHAI PATEL DATED 18/06/2009 WITH RESPECT OF TRANSFER OF PROPERTY A T BLOCK NO. 513 SURVEY NO. 490/2 TAL DASKROI. THE LD. CIT (ITAT) BROUGHT THE ABOVE FACT TO THE NOTICE OF THE UNDERSIGNED AND HENCE, A COPY OF THE DOCUMENT WAS REQUISITIONED FROM THE O/O THE CIT (DR), ITAT, AHMEDABAD, AS THE CASE FILES OF SHRI AJAI PATEL WA S SENT TO THE ITAT FROM ITO WARD 4(3), AHMEDABAD. PERUSAL OF THE DOCUMENT REVEALS THE FACT THAT AN MOU WAS SIGNED BETWEEN SHRI VISHNUBHAI AMBALAL PRAJAPATI AND SHRI VIVEK PRAHLADBHAI PATEL DATED 18/06/2009 WITH RESPECT OF TRANSFER OF PROPERTY AT BLOCK N O. 513 SURVEY NO. 490/2 TAL DASKROI. IT IS BROUGHT TO YOUR KIND NOTICE THAT THIS PROPERTY WAS ONE OF THE 9 BLOCKS SOLD BY THE PRAJAPATI GROUP IN LIEU OF THE BLOCKS AS PER THE BANACHITTI DATED 18.01.2005. THUS, THE ASSESSEE CLAIM THAT THE EARLIER BANACHITTI S WERE CANCELLED IS INCORRECT. THIS DOCUMENT ALSO VALIDATES THE CONTENTION MADE BY SHRI SOMABHAI PRAJAPATI THAT THE MOUS WERE NOT CANCELLED. IT IS ALSO PERTINENT TO MENTION HERE THAT THIS DOCUMENT ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 29 WAS IMPOUNDED DURING THE COURSE OF SURVEY FROM THE OFFICE P REMISES OF THE PRAJAPATI GROUP. 5. SINCE THIS IS VERY CRUCIAL EVIDENCE, YOUR HONOUR IS REQUESTED TO KINDLY CONSIDER ACCEPTING THE SAME AS ADDITIONAL EVIDENCE AND ADMITTING IT IN THE INTEREST OF REVENUE. YOURS FAITHFULLY, SD/ - [LEENA LA L ] DEPUTY COMMISSIONER OF INCOME - TA X CIRCLE - 7, AHMEDABAD. 10 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSMENT FOR ALL THE THREE YEARS , I.E. AYS 2005 - 06, 2006 - 07 & 2007 - 08 , WAS MADE U/S 153C R.W.S. 153A R.W.S 143(3) OF THE ACT. IN THE ASSESSMENT COMPLETED BY THE ASSESSING OFFICER U/S 153C R.W.S. 153A R.W.S 143(3) OF THE INCOME - TAX ACT, THE ASSESSING OFFICER MADE ADDITION OF RS.3,25,51,000/ - IN THE AY 2005 - 06, RS.6,51,00,000/ - IN THE AY 2006 - 07 AND RS.3,25,50,000/ - IN THE AY 2007 - 08, ALL U/S 69 OF THE ACT , ON THE GROUND THAT THE ASSESSEE MADE INVESTMENTS OF THE AFORES AID AMOUNT FOR THE PURCHASE OF 9 PLOTS OF LAND FROM SHRI SOMABHAI AMBALAL PRAJAPATI, SHRI CHANDUBHAI AMBALAL PRAJAPATI AND SHRI VISHNUBHAI AMBALAL PRAJAPATI AND THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF SUCH INVESTMENT MADE BY HIM. ACCORDING TO THE ASSESSING OFFICER, IN THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS CONDUCTED IN THE CAS E OF SHRI SOMABHAI AMBALAL PRAJAPATI , AN AGREEMENT TO SALE (B ANACHITHI ) WAS FOUND . THE SAID AGREEMENT TO SALE (B ANACHITHI ) WAS EXECUTED ON 18.01.2005 BETWEEN THE ASSESSEE ON ONE HAND AND SHRI SOMABHAI A. PRAJAPATI, SHRI VISHNUBHAI A. PRAJAPATI & SHRI CHAND UBHAI A. PRAJAPATI ON THE OTHER HAND. AS PER THIS SIGNED DOCUMENT, THE ASSESSEE AGREED TO PURCHASE 9 PLOTS OF LAND FROM THE SAID THREE PERSONS. THE PLOTS OF LAND WHICH THE ASSESSEE AGREED TO PURCHASE WERE AS UNDER: ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 30 11. FURTHER, AS PER AGREEMENT, THE ASSESSEE PAID RS.11 LACS TO THE SAID THREE PERSONS AND AGREED TO PAY BALANCE OF RS.13 .02 CRORES AS INSTALLMENT DURING THE PERIOD FROM 20.01.2005 TO 20.04.2006. 12. FURTHER, ONE OF THE SELLER VIZ. SHRI SOMABHAI A. PRAJAPATI IN HIS STATEMENT MADE BEFORE THE ASSESSING OFFICER ON 14.12.2011 HAS STATED THAT THE SAID AGREEMENT TO SALE (B ANACHITHI ) WAS ACTED UPON AND RECEIVED THE ENTIRE CONSIDERATION OF RS.13.02 CRORES MENTIONED IN THE SAID AGREEMENT TO SALE (B ANACHITHI ). THE ASSESSING OFFICER OBSERVED THAT THE PLOTS OF LAND IN QUESTION WERE ULTIMATELY NOT PURCHASED BY THE ASSESSEE. HOWEVER, THE SE LLER CONTENDED THAT OUT OF 9 PLOTS OF LAND MENTIONED IN THE AGREEMENT TO SALE (B ANACHITHI ), 4 PLOTS OF LAND WERE SOLD BY THEM TO SHRI AJAY S. PATEL , 2 PLOT S OF LAND WAS SOLD TO SHRI CHIRAG DHIRUBHAI ALIAS DHIRAJLAL AMIN AND IN LIEU OF 4 BLOCKS OF LAND BEARING SURVEY NOS. 502, 505, 497 AND 540 , LAND BEARING BLOCK NOS. 512A, 512 - B, 510 & 513 WERE SOLD TO SHRI AJAY S. PATEL. THE SELLER CONTENDED THAT THIS SALE O F LAND TO SHRI AJAY S. PATEL WAS MADE AT THE INS IS T E NCE OF THE ASSESSEE. THUS, THE ASSESSING OFFICER OBSERVED THAT THOUGH THE PLOTS OF LAND WERE NOT PURCHASED BY THE ASSESSEE AND THEREFORE, SUBSTANTIVE ADDITIONS ARE TO BE MADE IN THE HANDS OF THE PURCHASER . BLOCK NO. SURVEY NO. 540 515 487 471 497 476, 477, 482 504 488 494 473/2 509 487, 497 500 480 502 484 505 485 ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 31 HOWEVER, HE, ON PROTECTIVE BASIS, MADE THE ADDITION OF THE UNDISCLOSED INVESTMENT IN THE HANDS OF THE ASSESSEE ALSO, BY ASSUMING THAT THE ASSESSEE HAD IN FACT MADE THE INVESTMENT AS PER THE AGREEMENT TO SALE (B ANACHITHI ) ON THE DUE DATE AS ENVISAGED IN T HE AGREEMENT TO SALE (B ANACHITHI ). 13. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AS, IN HIS OPINION, IN VIEW OF CATEGORICAL STATEMENT OF SHRI SOMABHAI A. PRAJAPATI THAT HE RECEIVED FULL PAYMENT OF RS.13.02 CRORES IN CASH FROM TH E APPELLANT AS PER THE TERMS OF BANAKHAT , THE BURDEN ON APPELLANT WAS VERY HEAVY TO PROVE THAT THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI IS NOT CORRECT AND THE ASSESSEE COULD NOT PROVE THAT THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI WAS NOT CORRECT. 14. BEFORE US, THE AR OF THE ASSESSEE VEHEMENTLY OPPOSED THE ACTION OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE LOWER AUTHORITIES HAVE NOT APPRECIATED THE FACT IN PROPER PERSPECTIVE AND IGNORED THE VARIOUS MATERIALS BROUGHT ON RECORD BY THE ASSESSEE. H E SUBMITTED THAT THE FACT OF THE CASE IS THAT THOUGH THE AGREEMENT TO SALE (B ANACHITHI ) WAS ENTERED INTO ON 18.01.2005 BUT THE SAME WAS NEVER ACTED UPON BY BOTH THE PARTIES. HE POINTED OUT THAT AS PER AGREEMENT TO SALE (B ANACHITHI ), THE ASSESSEE WAS TO PUR CHASE 9 PLOTS OF LAND FROM THE THREE BROTHERS VIZ. SHRI SOMABHAI A. PRAJAPATI, SHRI VISHNUBHAI A. PRAJAPATI & SHRI CHANDUBHAI A. PRAJAPATI ; BUT NOT A SINGLE PLOT OF LAND WAS EVER PURCHASED BY THE ASSESSEE. HE POINTED OUT THAT OUT OF 9 PLOTS OF LAND MENTION ED IN THE AGREEMENT TO SALE (B ANACHITHI ) , IN FACT 4 PLOT NOS. 509, 500, 494 & 504 WERE SOLD BY SELLER TO ONE SHRI AJAY S. PATEL VIDE REGISTERED DEED S EXECUTED ON 25.07.2005, 02.08.2005, 25.07.2005 AND 02.08.2005 RESPECTIVELY. COPIES OF THE SAID DEEDS ARE PLACED AT PAGE NOS. 130 TO 162 OF THE PAPER - BOOK FILED ( IN THE CASE OF SHRI AJAY S. PATEL ) . ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 32 15. FURTHER, IT WAS STATED THAT PLOT NOS.505 & 502 SOLD BY PRAJAPATI FAMILY TO ONE SHRI CHIRAG DHIRUBHAI ALIAS DHIRAJLAL AMIN VIDE REGISTRATION NO.AHD - 2VDJ/8510/9/17 OF 2010 DATED 13.05.2010 AND COPY OF THE SAID REGISTERED SALE DEED IS PLACED ON RECORD. FURTHER, REMAINING 3 PLOTS OF LAND WERE NOT SOLD BY PRAJAPATI FAMILY TO ANY PERSON TILL 14.08.2012 WHICH WAS ADMITTED BY SHRI SOMABHAI A. PRAJAPATI IN HIS STATEMENT RECORDED BEFORE THE ASSESSING OFFICER AND COPY OF TH E SAME IS PLACED AT PAGE NO.191 OF THE PAPER - BOOK FILED IN THE CASE OF SHRI AJAY S. PATEL. HE FURTHER POINTED OUT THE ABOV E FACT ITSELF PROVES THAT THE AGREEMENT TO SALE (B ANACHITHI ) WAS CANCELLED AND NOT ACTED UPON BY THE SELLER AND THE ASSESSEE. 16. THE AUTHORIZED REPRESENTATIVE CONTENDED THAT AFTER EXECUTION OF THE AGREEMENT TO SALE (B ANACHITHI ), THE ASSESSEE CAME TO KN OW THAT THE PLOTS FOR WHICH AGREEMENTS WERE ENTERED INTO BY THREE BROTHERS VIZ. SHRI SOMABHAI A. PRAJAPATI, SHRI VISHNUBHAI A. PRAJAPATI & SHRI CHANDUBHAI A. PRAJAPATI WERE NOT THE COMPLETE OWNERS OF THE SAID PLOTS AND THEY HAD NO ABSOLUTE AND FULL RIGHT T O SELL THOSE 9 PLOTS AND THEREFORE, THE ASSESSEE HAD NOT PAID ANY AMOUNT IN PURSUANCE TO THE SAID AGREEMENT TO SALE (B ANACHITHI ). HE CLAIMED THAT EVEN THE AMOUNT OF RS.11,00,000/ - WHICH WAS PAID AT THE TIME OF EXECUTION OF AGREEMENT TO SALE (B ANACHITHI ) WAS PAID BY CHEQUE AND THAT CHEQUE WAS TAKEN BACK BY THE ASSESSEE AND WAS CANCELLED. HE CONTENDED THAT ON THE BASIS OF THE SAID AGREEMENT TO SALE (B ANACHITHI ) IT CANNOT BE HELD THAT THE ASSESSEE ACTUALLY PAID ANY AMOUNT MORE THAN RS.11,00,000/ - TO SHRI S OMABHAI A. PRAJAPATI ON ANY AGREED DATE. THE ASSESSEE FURTHER POINTED OUT FROM THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI , WHICH WAS RECORDED ON 14.08.2012 BEFORE THE ASSESSING OFFICER , THAT THE SAID STATEMENT CLEARLY SHOWS THAT THERE IS NO EVIDENCE WITH THE SAID SHRI SOMABHAI A. PRAJAPATI TO SUBSTANTIATE WHATEVER CLAIM HE MADE BEFORE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 33 THE ASSESSING OFFICER ON 14.12.2011. HE POINTED OUT THAT ON 14.12.2011 THE SAID SHRI SOMABHAI A. PRAJAPATI CLAIMED TO HAVE RECEIVED RS.13.02 CRORES FROM THE ASSESSEE, BUT ON 14.08.2012 , IN REPLY TO QUESTION NO.9, THE SAID SHRI SOMABHAI A. PRAJAPATI STATED THAT THE AMOUNT WAS NOT RECEIVED FROM THE ASSESSEE BUT FROM VARIOUS PERSONS WHO ACCORDING TO SHRI SOMABHAI A. PRAJAPATI WERE FROM THE OFFICE OF THE ASSESSEE. WHEN ASKED TO STATE THE NAME OF THE PERSON VIDE QUESTION NO.7, HE STATED THAT HE DOES NOT REMEMBER THE SAME. THUS, THE VERACITY OF THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI COULD NOT BE ESTABLISHED IN ABSENCE OF IDENTITY OF THE PERSON FROM WHOM ALLEGEDLY MONEY WAS REC EIVED BY HIM. 17. WE FIND THAT THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI AND THE STATEMENT OF ASSESSEE ARE CONTRADICTORY. SHRI SOMABHAI A. PRAJAPATI CLAIMED THAT ON INSISTENCE OF THE ASSESSEE 4 PLOTS OF LAND WERE SOLD TO SHRI AJAY S. PATEL AND 2 PLOTS OF LAND WERE SOLD TO SHRI DHIRUBHAI AMIN ; BUT NO MATERIAL COULD BE BROUGHT ON RECORD TO SUBSTANTIATE THE FACTUM OF ALLEGED INSISTENCE OF THE ASSESSEE. FURTHER, IT IS OBSERVED THAT SHRI SOMABHAI A. PRAJAPATI, IN REPLY TO QUESTION NO.10 IN HIS STATEMENT RECO RDED U/S 131 ON 14.12.2011 HAS STATED THAT THE AMOUNT RECEIVED BY HIM FROM THE ACTUAL PURCHASERS AT THE TIME OF EXECUTION OF SALE DEED WAS RETURNED BY HIM TO THE ASSESSEE. THUS, IT IS OBSERVED THAT IT IS AN ADMITTED FACT THAT SHRI SOMABHAI A. PRAJAPATI REC EIVED CONSIDERATION FOR SALE OF 9 PLOTS OF LAND FROM THE PURCHASERS IN WHOSE FAVOUR REGISTERED SALE DEEDS WERE EXECUTED AND NO MATERIAL COULD BE BROUGHT ON RECORD TO SHOW THAT THE SAID SALE CONSIDERATION WAS PAID BY SHRI SOMABHAI A. PRAJAPATI TO THE ASSESS EE. FURTHER, AS PER THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI, THOUGH THE AGREEMENT OF SALE DATED 18.01.2005 EXECUTED BETWEEN HIM AND HIS BROTHERS AND THE ASSESSEE WAS IN RESPECT OF 9 NUMBERS OF SPECIFIC PLOTS, BUT LATER ON 3 PLOTS OF LAND BEARING NOS.54 0, 487 AND 497, OUT OF THE SAME WAS EXCHANGED WITH 3 SIMILAR ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 34 SITUATED PLOTS OF LAND BEARING NOS.512, 510 & 513; BUT NO MATERIAL COULD BE BROUGHT ON RECORD TO SHOW THAT THERE WAS AN AGREEMENT ENTERED INTO WITH THE ASSESSEE FOR SUCH EXCHANGE OF PLOTS. IN ABS ENCE OF ANY SUCH MATERIAL, IT CANNOT BE ASSUMED THAT THE STATEMENT OF SHRI SOMABHAI A. PRAJAPATI WAS SACROSANCT AND NOT A SELF - SERVING STATEMENT MORE SO WHEN THE ALLEGED AMOUNT WHICH HE CLAIMED TO HAVE RECEIVED WAS CLAIMED BY HIM AS NON - TAXABLE RECEIPT BEI NG EXEMPT U/S 54B OF THE ACT. THE ASSESSEE HAS PLACED COPIES OF THE ASSESSMENT ORDERS PASSED IN THE CASE OF SHRI SOMABHAI A. PRAJAPATI PASSED U/S 153A R.W.S. 143(3) OF THE INCOME - TAX ACT FOR ASSESSMENT YEARS 2006 - 07 AND 2008 - 09 , BOTH DATED 29.12.2011, AT PAGE NOS.480 - 502 OF THE PAPER - BOOK MARKED AS C C ONTRADICTION IN BRIEF EMERGING FROM THE STATEMENTS OF SHRI SOMABHAI PRAJAPATI AND HIS SON PANKAJ PRAJAPATI ON MATERIAL ISSUES FILED IN THE CASE OF SHRI AJAY S. PATEL AND POINTED OUT THAT THE SAID SHRI SOM ABHAI A. PRAJAPATI ON ONE HAND SHOWN THE AMOUNT AS RECEIVED AGAINST SALE OF PLOT S AND ON THE OTHER HAND CLAIMED THAT THE SAID RECEIPT RESULTED IN NON - TAXABLE INCOME IN HIS HAND , BECAUSE OF CLAIM OF EXEMPTION U/S 54B OF THE ACT. THE ASSESSEE CONTENDED THAT THE ABOVE CIRCUMSTANCE SHOWS THAT THE ALLEGED RECEIPT WAS CLAIMED BY SHRI SOMABHAI A. PRAJAPATI FOR CLAIMING EXEMPTION U/S 54B AND THEREFORE, WAS A SELF - SERVING STATEMENT AND THEREFORE, CANNOT BE TREATED AS SACROSANCT AND AN EV IDENCE AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE DEPARTMENT COULD NOT BRING ON RECORD ANY RELIABLE MATERIAL TO PROVE THAT THE ASSESSEE MADE ACTUAL INVESTMENT OF RS.3,25,51,000/ - IN THE PREVIOUS YEAR RELEVANT TO ASS ESSMENT YEAR 2005 - 06, RS.6,51,00,000/ - IN ASSESSMENT YEAR 2006 - 07 AND RS.3,25,50,000/ - IN ASSESSMENT YEAR 2007 - 08. AS PER THE PROVISIONS OF SECTION 69, BEFORE MAKING AN ADDITION UNDER THAT SECTION, THE ONUS IS ON THE REVENUE TO BRING ON RECORD THE MATERIA L TO CONCLUSIVELY PROVE THE FACTUM OF MAKING AN INVESTMENT BY THE ASSESSEE AND ONLY THEREAFTER THE ONUS SHIFTS UPON THE ASSESSEE TO EXPLAIN THE ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 35 NATURE AND SOURCE OF SUCH INVESTMENT. IN THE INSTANT CASE, WE FIND THAT THE ONLY RELIABLE MATERIAL WHICH WAS BR OUGHT ON RECORD BY THE REVENUE WAS AGREEMENT TO SALE DATED 18.01.2005. THE ASSESSEE HAS NOT DENIED THE FACT THAT THE AGREEMENT WAS EXECUTED BY HIM ALSO. THE AGREEMENT ONLY PROVES THAT RS.11,00,000/ - WAS PAID BY THE ASSESSEE ON 18.01.2005 AND AGREED TO PAY THE BALANCE AMOUNT ON FUTURE DATES. IN THE FACTS OF THE INSTANT CASE, THE SAID AGREEMENT DOES NOT PROVE THE BALANCE AGREED AMOUNT WAS ACTUALLY PAID AT ANY TIME LEAVE ASIDE AT THE STIPULATED TIME. THEREFORE, IN OUR CONSIDERED VIEW, THE AGREEMENT IS A MATER IAL TO CONCLUDE THAT INVESTMENT OF RS.11,00,000/ - WAS MADE BY THE ASSESSEE ON 18.01.2005 AND FOR NO FURTHER INVESTMENT. THEREFORE, IN THE CIRCUMSTANCE, THE ADDITION OF AN AMOUNT MORE THAN RS.11,00,000/ - MADE IN THE ASSESSMENT YEAR 2005 - 06 AND THE AMOUNTS FOR WH I CH THE ADDITIONS WERE MADE IN ASSESSMENT YEAR 200 6 - 0 7 AND 2007 - 08 ARE NOT SUSTAINABLE. 18 . FURTHER, IN RESPECT OF RS.11,00,000/ - , THE ASSESSEE CLAIMED THAT THE AMOUNT WAS PAID BY CHEQUE AND THE SAID CH E QUE WAS TAKEN BACK BY THE ASSESSEE; WHEREAS, SHRI SOMABHAI A. PRAJAPATI IN HIS STATEMENT CLAIMED THAT RS.11,00,000/ - WAS RECEIVED BY HIM IN CASH. WE FIND FROM A READING OF THE AGREEMENT THAT NOWHERE THE AGREEMENT SHOWS THAT RS.11,00,000/ - WAS PAID BY CHEQUE. THE ASSESSEE COULD NOT BRING ANY MATERIAL TO SHOW THAT RS.11,00,000/ - WAS PAID BY HIM TO SHRI SOMABHAI A. PRAJAPATI WAS BY CH E QUE AND WAS NOT CASH. IN THIS CIRCUMSTANCE, WE FIND THAT THE ASSESSEE MAKING INVESTMENT OF RS.11,00,000/ - IS ESTABLISHED AND NOT EVEN DENIED BY THE ASSESSEE. THE ASSESSE E CLAIMED SOURCE OF THE SAME FROM BANK BUT THE SAME COULD NOT BE SATISFACTORILY SUBSTANTIATED BY THE ASSESSEE. THEREFORE, IN OUR CONSIDERED VIEW, ADDITION TO THE EXTENT OF RS.11,00,000/ - MADE IN ASSESSMENT YEAR 2005 - 06 IS JUSTIFIED AND NEEDS TO BE UPHELD. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND PARTLY ALLOW ITA NOS. 128, 129 & 130 /AHD/2013 SHRI VIVEK PRAHLADBHAI PATEL FOR AYS 2005 - 06, 2006 - 07 & 2007 - 08 36 THE APPEAL OF THE ASSESSEE AS INDICATED ABOVE FOR ASSESSMENT YEAR 2005 - 06 AND ALLOW THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08. 1 9 . IN THE COMBINED R ESULT, ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005 - 06 IS PARTLY ALLOWED AND ASSESSEES APPEALS FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY , THE 09 TH OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (N. S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 09 / 01 /201 5 GM/BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD