Shri Chhotalal Premjibhai Patel, Baroda V. The Deputy Commissioner of Income Tax, Circle-2, Baroda

ITSSA 155/AHD/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1901 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Gift; Business income; Income from undisclosed sources; Loose papers; Document seized; Principle of natural justice; Opportunity of cross examination; Additional evidence; Third party statement; Retraction
• Section: 143(3); 142(1); 153A; 201; 143(2); 139(1); 13; 22; 153C; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER IT(SS)A NO.156/AHD/2019 / ASSTT.YEAR : 2013-14 SHRI KANTIBHAI P. PATEL A-401, SPRING RETREAT-1 NR.SPRING EXOTICA VASNA BHAYLI ROAD VASANT VIHAR, VADODRA PAN : ACQPP 7662 K VS. DCIT, CENT.CIR.2 BARODA. IT(SS)A NO.155/AHD/2019 / ASSTT.YEAR : 2013-14 SHRI CHHOTALAL P. PATEL 28-A, APEXA SOCIETY VIP ROAD, KARELIBAG VADODARA PAN : AEUPP 4183 P VS. DCIT, CENT.CIR.2 BARODA. (APPLICANT) (RESPONENT) ASSESSEE BY : SHRI S.N. SOPARKAR, SR.ADV. REVENUE BY : SHRI VIRENDRA OJHA, CIT-DR /DATE OF HEARING : 24/11/2020 /DATE OF PRONOUNCEMENT: 8/12/2020 /O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER THESE TWO APPEALS BY THE ABOVE ASSESSEES ARE AGAINS T ORDERS OF THE LD.CIT(A)-12, AHMEDABAD OF EVEN DATED I.E. 7.1.2019 FOR THE ASSTT.YEAR 2013- 14. SINCE ISSUES INVOLVED IN BOTH THE CASES ARE IN TER-CONNECTED TO EACH OTHER, FOR THE SAKE OF CONVENIENCE, WE DISPOSE OF BOTH THE SE APPEALS BY THIS COMMON ORDER. IT(SS)A.NO.155 AND 156/AHD/2019 2 2. SINCE FACTS IN BOTH THE CASES ARE CONNECTED AND BEAR SIMILAR FACTS, FOR ADJUDICATION THE ISSUE ON HAND, WE TAKE THE FACTS A S STATED IN THE CASE OF SHRI KANTIBHAI PREMJIBHAI PATEL IN IT(SS)A.NO.156/AHD/20 19, AS SUGGESTED ON BEHALF OF THE ASSESSEE. IT(SS)A.NO.156/AHD/2020 SHRI KANTIBHAI P. PATEL : ASST.YEAR 2013-14 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH ACTION UNDER SECTION 132 OF THE INCOME TAX ACT WAS CONDUCTED IN AKSHAR GROUP OF C ASES ON 22.9.2015. IN THE COURSE OF SEARCH, CERTAIN DOCUMENTS INVENTORISE D IN VARIOUS ANNEXURES ALLEGEDLY BELONGING/PERTAINING/RELATING TO THE ASSE SSEES WERE SEIZED FROM THE PREMISES OF MANAGING PARTNER OF SEARCHED FIRM I.E. SHRI MEHUL G. PATEL OF AKSHAR GROUP. BASED ON THE DOCUMENTS FOUND FROM THE PREMISES OF SEARCHED PERSON PURPORTEDLY RELATING TO THE ASSESSEES HEREIN , PROCEEDINGS UNDER SECTION 153C OF THE ACT WERE INITIATED IN THE CASE OF THE A SSESSEE HEREIN [SHRI KANTIBHAI PATEL, IT(SS)A.NO.156/AHD/2019] AND OTHER APPELLANT SHRI CHHOTALAL P. PATEL, IT(SS)A.NO.155/AHD/2019 BY INVOKING PROVISIONS OF T HE SECTION 153C OF THE ACT. IN RESPONSE TO THE NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSEE, NAMELY KANTIBHAI P. PATEL FILED A RETURN OF INCOME SIMILAR TO THE RETURN FILED UNDER SECTION 139(1) OF THE ACT DATED 27.9.2014. I N THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REFERRED TO A LOOSE PAGE NUMBER ED 17 IN ANNEXURE A/3 REPRODUCED AT PAGE NO.3 OF THE ASSESSMENT ORDER. T HE AFORESAID PAGE WAS STATED TO CONTAIN DETAILS OF PAYMENTS MADE TO ASSESSEE AND OTHER JOINT OWNERS BY THE SEARCHED PERSON FOR THE LAND OF THE THREE PROJECTS I.E. THE SUN, THE SUN VILLA AND THE DOVE SITUATED AT BIL VILLAGE IN VADODARA. THE LAND OF THREE PROJECTS WERE ADJACENT TO EACH OTHER BEARING BLOCK NOS.499, 500, 501, 503, 505 & 506, BILL, VADODARA AND OWNED BY ONE FAMILY CONSISTING O F THE ASSESSEE, SHRI KANTIBHAI P. PATEL, SHRI CHHOTABHAI P. PATEL AND SH RI RAKESHBHAI K. PATEL. THE FIRST LAND PARCEL MENTIONED IN THE PROJECT THE SUN IS SITUATED AT BLOCK NO.501 IT(SS)A.NO.155 AND 156/AHD/2019 3 AT BIL VILLAGE. AS PER THE LOOSE PAPER, IT WAS MEN TIONED THAT CHEQUE PAYMENT FOR THAT LAND (SUN PROJECT) WAS OF RS.6.50 CRORES AND S HRI DINESHBHAI WAS THE ORIGINAL OWNER OF THE LAND. HENCE HE WAS ALSO GIVEN TWO UNITS IN THE PROJECT WHICH WERE VALUED AT RS.72 LAKHS. THUS, TOTAL VALU E OF THE LAND IN THIS PROJECT WAS RS.7.22 CRORES. THE SECOND LAND PARCEL IS OF P ROJECT THE SUN VILLA BEARING SURVEY NOS.503, 505 AND 506 IN BIL VILLAGE. IT WAS MENTIONED THAT THE CHEQUE PAYMENT FOR THAT LAND WAS AT RS.85 LAKHS AND SHRI VAGJIBHAI WAS THE PERSON WHO LOOKED AFTER THE LAND OF SHRI RAKESH KAN TILAL PATEL AND HENCE HE WAS GIVEN FOUR UNITS, WHICH WERE VALUED AT RS.53.54 LAKHS. HENCE, TOTAL VALUE OF THE LAND PARCEL OF THIS PROJECT WAS AT RS.188.54 LAKHS. IN THE LIGHT OF THE LOOSE PAGE, A CASH PAYMENT OF RS.5.30 CRORES PAID F OR THE LAND FOR THESE THREE PROJECTS WAS MENTIONED. 4. IT WILL BE APPOSITE TO REPRODUCE THE SCANNED IMA GE OF LOOSE PAGE RELIED BY THE AO TO APPRECIATE THE MANUAL JOTTINGS OF ENTRIES IN ITS NATURAL PERSPECTIVE: IT(SS)A.NO.155 AND 156/AHD/2019 4 5. THE ASSESSEE, SHRI KANTILAL PREMJIBHAI PATEL IS THE OWNER OF BLOCK NO.501 ON WHICH PROJECT NAMED THE SUN WAS PROPOSED. THE SAID LAND WAS EARLIER PURCHASED BY THE ASSESSEE ON 16.5.2011 FOR WHICH CO NSIDERATION WAS PAID BY WAY OF CHEQUE AND RECORDED IN THE BOOKS. AN AGREEM ENT TO SALE ( BANAKHAT ) FOR THE AFORESAID BLOCK NO.501 WAS CARRIED OUT BY THE A SSESSEE AND THE SUN INFRA, A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRU CTION ON 29.4.2013 FOR A TOTAL CONSIDERATION OF RS.6.50 CRORES. THE ENTIRE SALE C ONSIDERATION OF THE SAID LAND WAS STATED TO BE RECEIVED IN THE FINANCIAL YEAR 201 3-14, AND THEREFORE THE POSSESSION OF THE SAID LAND WAS ALSO STATED TO BE G IVEN IN THE SAID FINANCIAL YEAR RELEVANT TO THE ASSTT.YEAR 2014-15. THE CONSIDERAT ION WAS STATED TO HAVE BEEN RECEIVED BY ACCOUNT PAYEE CHEQUE AND DULY ACCOUNTED FOR IN THE BOOKS. THE PROFITS ON THE SALE OF LAND AMOUNTING TO RS.2,20,83 ,717/- WAS REFLECTED IN THE ASSESEES PROFIT & LOSS ACCOUNT FOR THE FINANCIAL Y EAR 2013-14 AND DULY OFFERED AS BUSINESS INCOME IN THE RETURN FILED FOR THE ASSE SSMENT YEAR 2014-15. 6. ON THE BASIS OF HAND WRITTEN LOOSE PAPER FOUND A T THE PREMISES OF PURCHASER (SEARCHED PERSON), THE AO OBSERVED THAT S UCH LOOSE PAPER CLEARLY MENTIONS THE CASH AMOUNT OF RS.5.30 CRORES INVOLVED TOWARDS PURCHASE OF THE LAND FOR THESE THREE PROJECTS TO THE LAND OWNERS I. E. KANTILAL P. PATEL, SHRI CHHOTLAL PREMJIBHAI PATEL AND RAKESH K. PATEL. THE SEARCHED PERSON, SHRI MEHUL G. PATEL WAS CONFRONTED WITH THE AFORESAID LO OSE PAGE NUMBERED 17 IN ANNEXURE A/3 FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES AT THE TIME OF RECORDING STATEMENT UNDER SECTION 132(4) ON 13.9.20 15 IN THE COURSE OF ON- GOING SEARCH AND AN INQUIRY WAS INTER ALIA POSED ON THE CONTENTS OF THE PAGE. IT WAS NOTED BY THE AO THAT MAKER OF STATEMENT (MEHUL G PATEL), UNDER SECTION 132(4) OF THE ACT ON BEHALF OF SUN INFRA (PURCHASER S), CONFIRMED THE PAYMENT OF UNACCOUNTED CASH IN HIS STATEMENT AS ATTRIBUTABLE T O THREE PROJECTS NOTED ABOVE TO THE OWNERS OF THE LAND. THE AO CONSEQUENTLY CON CLUDED THAT AN AGGREGATE IT(SS)A.NO.155 AND 156/AHD/2019 5 CASH PAYMENT OF RS.5.30 CRORES HAS BEEN PAID AND DI STRIBUTED BY THE PURCHASER BUILDER TO KANTILAL P. PATEL (ASSESSEE HEREIN), SHR I CHHOTLAL PREMJIBHAI PATEL AND RAKESH K. PATEL (THE LAND OWNERS) IN PROPORTION TO THE RESPECTIVE LAND HOLDINGS SOLD. AS A SEQUEL THERETO, THE AO CONCLUDED THAT U NACCOUNTED MONEY IN CASH HAS BEEN RECEIVED BY THE ASSESSEE AND OTHER THE LAN D OWNERS IN PROPORTION TO CHEQUE PAYMENTS RECEIVED BY THEM TOWARDS SAID LAND DEAL. IT WAS FURTHER OBSERVED THAT IN TUNE WITH NORMAL BUSINESS PRACTICE IN SUCH DEALS WHERE THE CASH PAYMENTS ARE ORDINARILY MADE PRIOR TO REGULAR TRANS ACTIONS THROUGH BANKING CHANNEL, THE CASH COMPONENTS OF THE LAND PURCHASE O F RS.5.30 CRORES IN AGGREGATE WAS OSTENSIBLY PAID UPFRONT IN FINANCIAL YEAR 2012-13 ITSELF. HENCE, BASED ON THE LOOSE PAPER AND STATEMENT OF SEARCHED PERSON, THE AO ASSUMED THAT UNACCOUNTED CASH PAYMENT OF RS.5.30 CRORES WAS RECE IVED BY THE SELLERS IN THE RATIO OF THEIR RESPECTIVE HOLDING IN THE LAND, WHIC H WAS TABULATED BY THE AO AS UNDER: PARTICULARS OF LAND HOLDERS THE SUN BUILTCON (RS.) THE DOVE INFRA (RS.) THE SUN INFRA (**) TOTAL (RS.) PARTICULARS OF LAND HOLDERS RAKESHBHAI 70% 11751979.78 5032097.725 0 16784077.5 RAKESHBHAI - 70% CHHOTBHAI 30% 5036562.763 2156613.311 0 7193176.07 CHHOTBHAI -30% KANTIBHAI 0 0 29022746 29022746 KANTIBHAI UNACCOUNTED CASH RECEIPT 16788542.54 7188711.036 29022746 53000000 UNACCOUNTED CASH RECEIPT 7. THE AO ACCORDINGLY RESORTED TO ADDITIONS IN RESP ECT OF UNACCOUNTED CASH RECEIPTS OF SALE OF LAND AT VILLAGE BIL, VADODARA I N PROPORTION TO THE LAND RESPECTIVE HOLDINGS OF VARIOUS LAND OWNERS WHICH WA S PEGGED AT RS.2,90,22,746/- AS ATTRIBUTABLE TO THE ASSESSEE. SIMILAR ADDITION OF IT(SS)A.NO.155 AND 156/AHD/2019 6 RS.71,93,176/- IN THE HANDS OF OTHER ASSESSEE, SHRI CHHOTALAL P. PATEL [IT(SS)A.NO155/AHD/2019)] WAS ALSO MADE. 8. AGGRIEVED BY THE ADDITION, ASSESSEE PREFERRED AP PEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) REITERATED FACTS GOVERNIN G THE ADDITIONS MADE TO THE TOTAL INCOME BY THE AO AND OBTAINED A REMAND REPORT DATED 28.9.2018 FROM THE AO. THE OBJECTION-CUM-REPLY OF ASSESSEE IN RESPONS E TO THE REMAND REPORT WAS NOTED IN PARAGRAPH-5 OF ITS ORDER. THE AO ALSO FIL ED ANOTHER REMAND REPORT DATED 27.11.2018 AT THE INSTANCE OF THE LD.CIT(A) I N RESPONSE TO THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF AFFID AVIT OF SHRI MEHUL G. PATEL DATED 16.10.2018 WITH CERTAIN ANNEXURES. HAVING TA KEN COGNIZANCE OF SUBMISSIONS AND EVIDENCE PLACED BEFORE HIM, THE CIT (A) DECLINED TO GRANT ANY RELIEF TO THE ASSESSEE AGAINST SUCH ADDITIONS TOWAR DS UNACCOUNTED CASH/ON- MONEY. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) DENYING RELIEF TO THE ASSESSEE READS AS UNDER: DECISION: 6. BEFORE THE APPELLANT'S SUBMISSION GROUNDS OF APP EAL-WISE ARE TAKEN UP AND THE ISSUES DECIDED, IT APPEARS PERTINENT TO DEAL WITH L EGALITY OF ADDITIONS MADE IN THE IMPUGNED ASSESSMENT ORDER U/S. 143(3) R.W.S. 153C. FROM THE CATENA OF DECISIONS OF VARIOUS THE COURTS AND THE TRIBUNALS INCLUDING THOS E OF JURISDICTIONAL HIGH COURT OF GUJARAT AND JURISDICTIONAL ITAT OF AHMEDABAD IN PR. CIT VS SAUMYA CONSTRUCTION P. LTD. AND OTHER CASES AND OF THE APEX COURT IN CI T VS. SINGHAD TECHNICAL EDUCATION SOCIETY, IT IS THE LAW AS OF NOW THAT PUR SUANT TO SEARCH, ADDITIONS TO THE TOTAL INCOME FOR THE ELAPSED/UNABATED ASSESSMENT YE ARS (THE YEARS FOR WHICH EITHER THE ASSESSMENTS/RE-ASSESSMENTS HAVE BEEN COMPLETED OR T HE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) HAS ELAPSED) CAN BE MADE BY THE AO ONLY ON THE BASIS OF THE INCRIMINATING MATERIALS (RELEVANT TO SUCH ADDITIONS MADE) FOUND D URING THE COURSE OF SEARCH U/S 132 OR REQUISITIONED U/S 132A. IN OTHER WORDS NO ADDITI ON TO THE TOTAL INCOME CAN BE MADE IN THE RE-ASSESSMENT U/S 153A IF THERE ARE NO RELEV ANT INCRIMINATING MATERIALS FOUND DURING THE SEARCH ON RECORD. THESE CONSTRAINTS/PROH IBITION LAID DOWN BY THE COURTS AND THE TRIBUNALS ARE, HOWEVER, IN MY CONSIDERATION , NOT APPLICABLE FOR THE ABATED ASSESSMENT YEARS AND THE ASSESSMENT YEAR RELATED TO THE FINANCIAL YEAR IN. WHICH THE SEARCH WAS CONDUCTED. FOR THESE YEARS THE AO IS FRE E TO TRAVERSE BEYOND THE SEIZED MATERIALS AND TO CONDUCT HIS OWN INVESTIGATION AND MAKE ADDITIONS, BASED ON HIS FINDINGS, AS PER THE INCOME-TAX PROVISIONS. IT(SS)A.NO.155 AND 156/AHD/2019 7 7.1 AS PER THE PROVISIONS OF SECTION 153C, THE PROC EEDING IS INITIATED AGAINST A PERSON (NOT COVERED BY SEARCH AND AGAINST WHOM THE PROCEEDINGS U/S 153A DOES NOT LIE) ONLY IF THE ASSETS AND OTHER VALUABLES SEIZED BELONG TO AND/OR THE DOCUMENTS OR BOOKS OF ACCOUNTS SEIZED RELATE TO SUCH PERSON (OTH ER THAN THE PERSON REFERRED TO IN SECTION 153A) AND THAT AFTER RECORDING OF THE SATIS FACTION BY THE AO OF THE PERSON U/S 153A AND HANDING OVER OF THE DOCUMENTS OR ASSETS SE IZED TO THE AO OF THE SUCH PERSON (TO BE COVERED U/S 153C), THE SAID AO WILL INITIATE THE PROCEEDINGS U/S 153C AND COMPLETE THE ASSESSMENT(S) IN THE MANNER PRESCRIBED U/S 153A. IT IMPLIES THAT NOT ONLY THE DECISIONS OF THE TRIBUNALS AND THE COURTS IN TH E CONTEXT OF PROCEEDINGS U/S 153A WILL BE EQUALLY APPLICABLE IN THE CONTEXT OF ASSESS MENT PROCEEDINGS U/S 153C BUT ACCORDING TO ME THE LIVE LINK REQUIRED BETWEEN THE SEIZED VALUABLES AND DOCUMENTS WITH THE ADDITIONS MADE IN THE ASSESSMENT PURSUANT TO NOTICE U/S 153C WILL BE STRICTER THAN THAT FOR THE ASSESSMENT PURSUANT TO NOTICE U/S 153A. IN THE CONTEXT OF SEARCH CONDUCTED ON 22/09/2015, THE A.Y. 2013-14 WILL NORM ALLY AN ABATED ASSESSMENT YEAR BUT IT BEING A CASE U/S 153C THE ADDITIONS ARE REQU IRED TO BE BASED ON AND CONFINED TO ONLY THE INCRIMINATING MATERIALS FOUND DURING THE C OURSE OF SEARCH. THERE IS NO DISPUTE THAT THE ADDITION MADE IN THE IMPUGNED ASSE SSMENT IS BASED ON THE DOCUMENT SEIZED WHICH RELATED TO THE APPELLANT. 7.2 1 HAVE PERUSED THE ASSESSMENT ORDER UNDER APPEA L AND HAVE DILIGENTLY CONSIDERED THE CONTENTIONS RAISED BY THE APPELLANT AS ABOVE. 7.3 FROM THE PERUSAL OF SEIZED PAGE NO. 17 OF ANNEX URE - A/3 (WHICH IS ALREADY DESCRIBED AT PARA 3.2 ON PAGE 2 AND 3 OF THIS ORDER ), IT IS SEEN THAT THE PAGE AT ITS BEST SHOWS PAYMENT OF RS.6.50 CRORES IN CHEQUE FOR LAND BLOCK NO.501, RS.2,58,75,000/- FOR LAND BLOCK NO.503, 505 AND 506 AND RS.85 LAKHS (TO BE READ AS RS.1.35 CRORE) FOR LAND BLOCK NO.499/500 AND OF RS.72 LAKH, RS.30.50 L AKH AND RS.53.40 LAKH IN KIND IN TERMS OF ALLOTMENT OF UNITS IN THE PROJECTS AND CAS H PAYMENTS OF RS.5,37,00,000/- OUT OF WHICH RS.7,00,000/- IS TO SOME BHARWARD. THUS !: HE TOTAL PAYMENT AS PER PAGE NO. 17 OF ANNEXURE A-3 COMES TO RS.17,36,79,000/- (RS.1 5,30,75,000/- IN CHEQUES AND CASH EXCLUDING THE KIND IN TERMS OF CONSTRUCTED UNI TS IN THE PROJECTS) AGAINST WHICH ACTUAL DOCUMENTED SALE PRICE FOR ALL THE LANDS CLAI MED TO BE ACCOUNTED IN THE BOOKS OF THE APPELLANT AS WELL AS SHRI CHHOTABHAI PATEL AND SHRI RAKESH PATEL IS RS. 17,73,00,000/-. 7.4 IN VIEW OF THE SUBMISSION MADE BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS, THE AO VIDE LETTER DATED 24/9/2018, WAS REQUESTED T O SEND THE COPIES OF ASSESSMENT ORDER MADE IN THE CASE OF SHRI MEHUL G. PATEL FOR A .Y.2013-14 AND THE STATEMENT(S) RECORDED FROM SHRI MEHUL G. PATEL. IT WAS ALSO DIRE CTED TO THE AO TO RECORD A FRESH STATEMENT OF SHRI MEHUL G. PATEL AND TO ALLOW SHRI KANTIBHAI PATEL AND SHRI CHHOTALAL PATEL TO CROSS-EXAMINE SHRI MEHUL PATEL I N REGARD0TO THE TRANSACTION OF RS.5.30 CRORES IN CASH. VIDE LETTER NO.BRD/DCIT/CC- 2/KPP&CPP/2018-19/2271 DATED 28/9/2018, THE AO HAS SUBMITTED THAT SHRI MEH UL G. PATEL HAS FILED APPLICATION BEFORE HON'BLE INCOME TAX SETTLEMENT COMMISSION WHI CH WAS REJECTED AND THAT THE ASSESSMENT PROCEEDINGS ARE PENDING AND IS TO BE COM PLETED BY FEBRUARY 2019. NO FRESH STATEMENT OF SHRI MEHUL G. PATEL WAS RECORDED AND NO OPPORTUNITY TO SHRI KANTIBHAI PATEL AND SHRI CHHOTALAL PATEL TO CROSS-E XAMINE SHRI MEHUL PATEL WAS GIVEN BY THE AO BUT IT WAS REITERATED BY THE AO THA T SHRI MEHUL G. PATEL HAS IT(SS)A.NO.155 AND 156/AHD/2019 8 CONFIRMED CASH PAYMENT OF RS.5,37,00,000/- AS GIVEN TO THE LAND OWNERS OF THESE THREE PROJECTS OVER AND ABOVE CHEQUE PAYMENTS. 7.5 IN THE REJOINDER TO THE AO'S REPORT, THE APPELL ANT REITERATED THAT SHRI MEHUL G. PATEL HAS NOT STATED TO HAVE MADE CASH PAYMENT TO T HE APPELLANT AND CO-SELLERS BY NAME AND HAS FILED AN AFFIDAVIT OF SHRI MEHUL G. PA TEL WHEREIN AT PARA 7 AND 8 IT HAS BEEN CLARIFIED BY THE DEPONENT THAT THE PAYMENT OF RS.5.3 CRORES WAS MADE TO SOME OLD LAND OWNERS/BANAKHAT HOLDER (BHARWAD/FARMERS) W HO WERE CLAIMING OWNERSHIP OF THE SAID LAND, THAT NO SUCH CASH PAYMENT WAS MAD E TO SHRI CHHOTABHAI P. PATEL, SHRI RAKESH PATEL OR SHRI KANTIBHAI PATEL WHO WERE ACTUAL OWNERS IN THE SAID BLOCKS OF LAND AND' THAT HE HAS DENIED TO HAVE PAID ANY UN ACCOUNTED CASH OF RS.5.30 CRORES TO THESE THREE PERSONS (APPELLANT AND CO-SELLERS). 7.6 VIDE LETTER DATED 29/10/2018 THE AO WAS PROVIDE D WITH THE APPELLANT'S REJOINDER/SUBMISSION DATED 29/10/2018 ALONG WITH TH E SAID AFFIDAVIT FOR EXAMINATION AND COMMENTS. VIDE REPORT DATED 27/11/2018 (BRD/DCI T/CC-2/REMAND REPORT/ KPP&CPP/2018-19/2815), THE AO HAS SUBMITTED THAT TH E ASSESSEE WAS GIVEN AMPLE OPPORTUNITY TO PROVIDE DOCUMENTARY EVIDENCE REGARDI NG HIS CLAIM THAT UNACCOUNTED CASH OF RS.5.30 CRORES WAS NOT RECEIVED BY HIM AND OTHER CO-OWNERS AND THAT THE ASSESSEE'S CONTENTION BEFORE THE CIT(A) DOES NOT JU STIFY THE CIRCUMSTANCES OF EXCEPTIONS ENUMERATED IN RULE 46A FOR ADMISSION OF FRESH EVIDENCES AND THEREFORE, THE AFFIDAVIT SHOULD NOT BE ADMITTED. ON MERIT, IT HAS BEEN STATED BY THE AO THAT SHRI MEHUL G. PATEL HAS CLEARLY CONFIRMED THE CASH PAYME NT OF RS.5,37,00,000/- TO THE LAND OWNERS OF THE THREE PROJECTS APART FROM CHEQUE PAYMENTS AND THIS WAS UNACCOUNTED PAYMENT AND THAT SHRI KANTILAL P. PATEL , SHRI CHHOTALAL P. PATEL ARID SHRI RAKESH K. PATEL WERE THE OWNERS OF THE LAND AN D THAT THE AFFIDAVIT OF SHRI MEHUL G. PATEL FILED BY THE APPELLANT DURING THE COURSE O F APPEAL PROCEEDINGS IS AN AFTERTHOUGHT OF THE ASSESSEE IN CONNIVANCE WITH SHR I MEHUL PATEL TO MISGUIDE THE REVENUE AND THAT THE SAID AFFIDAVIT CANNOT BE ACCEP TED BECAUSE THERE IS NO REASON FOR SHRI MEHUL PATEL TO MAKE HUGE CASH PAYMENT TO THE P ERSONS WHO WERE NO LONGER HAVING THE TITLE ON THE LAND IN QUESTION AND THAT T HE AFFIDAVIT TANTAMOUNT TO RETRACTION OF HIS STATEMENT U/S 132(4) RECORDED ON OATH ON 24/ 9/2015 AFTER THREE YEARS AND THAT SHRI MEHUL G. PATEL SHOULD COME CLEAR AND DISCLOSE THE NAMES OF THE RECIPIENTS OF THE AMOUNT ALONG WITH PAN, ADDRESS, DATE/DAYS ON WHICH AMOUNT WAS PAID ALONG WITH ANY SUPPORTING DOCUMENTS I.E. AGREEMENT, CONFIRMATI ON FROM THE RECIPIENTS SO THAT THE INTEREST OF THE REVENUE CAN BE PROTECTED AND THIS U NACCOUNTED CASH RECEIPT CAN BE TAXED IN THE HANDS OF THE RECIPIENT. THE APPELLANT' S REJOINDER VIDE SUBMISSION DATED 29/12/2018 IS ALREADY REPRODUCED BEFORE. 7.7 ON CAREFUL CONSIDERATION OF THE FACTS, I AM OF THE VIEW THAT EVEN THOUGH THE ACTUAL CONSIDERATION AS PER THE DEEDS BETWEEN THE BUYER(S) AND THREE CO-SELLERS I.E. SHRI KANTILAL PATEL, SHRI CHHOTALAL PATEL AND SHRI RAKES HBHAI PATEL FOR RS.17,73,00,000/- WAS/MAY BE ABOVE THE AGGREGATE OF RS.17,36,79,000/- (OR CHEQUE AND CASH OF RS.15,80,75,00/- OR RS.15,23,75,000/- AS THE CASE M AY BE) AS PER THE PAGE 17 OF ANNEXURE A-3, THE ISSUE OF CASH PAYMENT OF RS.5,37, 00,000/-DOES NOT GET COVERED AND EXPLAINED. AS THE PAYMENT OF RS.5,37,00,000/- HAS B EEN ADMITTED BY SHRI MEHUL G. PATEL, THE AMOUNT WOULD DEFINITELY BE ADDED IN HIS HANDS OR IN THE HANDS OF HIS CONCERNS, BEING THE BUYER(S) IF THE SOURCES OF SUCH PAYMENTS ARE NOT ACCOUNTED FOR TO BE OUT OF DISCLOSED SOURCES. BUT AT THE SAME TIME T HE TRANSACTION BEING OF SALE/TRANSFER IT(SS)A.NO.155 AND 156/AHD/2019 9 OF PROPERTY, THE AMOUNT OF RS.5,37,00,000/- IS ALSO LIABLE TO BE ADDED IN THE HANDS OF SELLERS (OR RECIPIENTS AS THE CASE MAY BE). HOWEVER , THE APPELLANT AND CO-SELLERS ARE DENYING TO HAVE RECEIVED ANY CASH BECAUSE AS PER TH EM THE RELIED UPON SEIZED DOCUMENT DOES BEAR THEIR NAMES (AND AS ALSO THE DOC UMENT IS NOT IN THEIR HAND WRITINGS AND NOT SIGNED BY THEM). IT WAS IN THIS RE GARD THAT TO FURTHER BUTTRESS THEIR CONTENTIONS, THE APPELLANT HAS PRODUCED AN AFFIDAVI T OF SHRI MEHUL PATEL. BUT I HAVE TO AT THE LEAST AGREE WITH THE AO THAT EVEN IF THE AFF IDAVIT OF SHRI MEHUL G. PATEL IS TAKEN TO BE TRUE, SHRI MEHUL G. PATEL HAS TO IDENTIFY THE PERSONS TO WHOM THE PAYMENTS OF RS.5.37 CRORES WERE MADE AND THE ONUS OF SHRI MEHUL G. PATEL AS U/S 132(4A) AND 292C WOULD BE CONSIDERED TO BE DISCHARGED ONLY IF T HOSE NAMED PERSONS ALSO OWN UP TO HAVE RECEIVED SUCH SUM. MERE ASSERTING THAT THE SAID CASH PAYMENT(S) WERE NOT MADE TO THE APPELLANT AND CO-SELLERS DOES NOT BREAK ANY ICE. THIS HAS NOT COME FORTH AND THEREFORE WITHOUT GOING INTO THE ADMISSIBILITY AND RELIABILITY OF THE AFFIDAVIT OF SHRI MEHUL PATEL, IT CANNOT BE SUBSCRIBED THAT RS.5 .37 CRORE IN CASH WAS PAID TO BHARWAD/FARMERS, THE EARLIER OWNERS BECAUSE THE SEI ZED PAGE-17 ITSELF (& ALREADY) MENTIONS PAYMENT OF RS.7 LAKH IN CASH WAS PAID TO B HARWAD (NE LAKHO). ACCORDINGLY I HOLD THAT THE AFFIDAVIT CANNOT BE ADMITTED AS RELIA BLE EVIDENCE AND IT CANNOT BE ADMITTED THAT RS.5.30 CRORE WAS NOT PAID TO THE CO- SELLERS I.E THE APPELLANT AND HIS RELATIVES. 7.8 AS FAR AS THE LEGAL POSITION IS CONCERNED, THE FACT REMAINS THAT SHRI MEHUL G. PATEL, IN HIS STATEMENT U/S 132(4) HAS ADMITTED TO HAVE PAID CASH TO SELLERS/ OWNERS AND NOT MENTIONED THE NAMES OF THE APPELLANTS AND H IS RELATIVES (I.E. CO-SELLERS) BUT NATURAL PRESUMPTION WILL BE THAT THE SAID SELLERS/O WNERS ARE THE APPELLANT AND HIS RELATIVES. AS FAR AS THE LEGAL POSITION IS CONCERNE D WHETHER THE CO-SELLERS INCLUDING THE APPELLANT ARE BOUND BY SUCH STATEMENT OF SHRI MEHUL G. PATEL, I AM OF THE CONSIDERED VIEW THAT SHRI MEHUL G. PATEL IS THE BUYER OF PROPE RTY AND PAYER OF THE CONSIDERATION AND HIS STATEMENT CANNOT BE BRUSHED ASIDE MERELY CA LLING HIM TO BE A THIRD PARTY AND ALSO ON THE GROUND THAT OPPORTUNITY OF CROSS EXAMIN ATION WAS NOT GRANTED TO THE APPELLANT AND OTHER CO-SELLERS BECAUSE SHRI MEHUL P ATEL IS A PARTY TO THESE TRANSACTIONS. NOW THE ONLY QUESTION IN CONTEXT OF P ROCEEDING U/S 153C REMAINS IS WHETHER THE DOCUMENT PAGE 17 RELATES TO THE APPELLA NT AND OTHER CO-SELLERS. THERE IS NO DOUBT (AND NOT DENIED BY THE APPELLANT AND OTHER CO-SELLERS) THAT THE SAID DOCUMENT RELATES TO THE LANDS - BLOCK NO.499, 500, 501, 503, 505 AND 506 - WHICH WERE OWNED BY THE APPELLANT AND OTHER CO-SELLERS AN D SOLD TO SHRI MEHUL G. PATEL AND HIS CONCERNS. THUS BY ANY STRETCH OF IMAGINATION AN D ARGUMENT IT CANNOT BE HELD THAT DOCUMENT PAGE 17 DOES NOT RELATE TO THE APPELLANT A ND OTHER CO-SELLERS. 7.9 THUS THE ISSUES OF NOTICE U/S 153C, THE JURISDI CTION OF THE AO TO TAKE UP THE PROCEEDINGS U/S 153C AND TO MAKE THE IMPUGNED ASSES SMENT ORDER ARE LEGALLY TENABLE AND VALID. IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE AO IS JUSTIFIED IN HOLDING THAT THERE WAS CASH PAYMENT OF RS.5.30 CRORES TO TH E CO-SELLERS FOR SALE OF LAND AND THAT THE PAYMENT OF RS.2,90,22,746/- WAS TO THE APP ELLANT AND SAME HAS NOT BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS AND IN THE RETUR N OF INCOME BY THE APPELLANT. THUS IT IS UPHELD THAT THE AMOUNT OF RS.2,90,22,746/- IS LIABLE T6 ADDED IN THE HANDS OF THE APPELLANT. THE ADDITION MADE BY THE AO IS CONFIRMED AND THE APPEAL FAILS. IT(SS)A.NO.155 AND 156/AHD/2019 10 9. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL SEEKING TO ASSAIL THE FINDINGS AND CONCLUSION OF TH E CIT(A) RENDERED AGAINST THE ASSESSEE. 10. WHEN THE MATTER WAS CALLED FOR HEARING, MR. SOP ARKAR, THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED AT THE OUTSET TH AT HE DOES NOT CONSIDER IT EXPEDIENT TO PRESS THE ISSUE OF JURISDICTION AS RAI SED IN GROUND NO.1 AND 2 OF THE RESPECTIVE APPEALS IN VIEW OF THE PROSPECTIVE AMEND MENT CARRIED OUT IN THE PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT, 1 961 WITH EFFECT FROM 1 ST JUNE, 2015 WHEREBY THE SCOPE AND AMBIT OF SECTION 1 53C OF THE ACT HAS BEEN ENLARGED. HE FURTHER SUBMITS THAT ON HIS ARGUMENTS REVOLVES MAINLY AROUND CHALLENGE TO THE ADDITION ON MERITS OF RS.2,90,22,7 46/- IN THE CASE OF SHRI KANTIBHAI PREMJIBHAI PATEL AND RS.71,93,176/- IN TH E CASE OF SHRI CHHOTALAL PREMJIBHAI PATEL TOWARDS ALLEGED UNACCOUNTED CASH R ECEIPTS/ON-MONEY ON SALE OF LAND PARCELS IN PROPORTION TO THE LAND HOLDING O F THE RESPECTIVE ASSESSEES. 10.1 IN THIS CONNECTION, SHRI SOPARKAR BEGAN BY MAK ING A REFERENCE TO THE LEDGER ACCOUNT OF THE ASSESSEE TO SUBMIT THAT PAYME NTS FOR PURCHASES OF THE LAND AT BILL VILLAGE, BLOCK NO.501 SOLD TO THE BUILDER F OR THE SUN PROJECT WAS MADE AT VARIOUS DATES SPANNING OVER FINANCIAL YEAR 2012- 13 AND 2013-14. THE SALE OF LAND SO PURCHASED EARLIER VIDE AGREEMENT DATED 16.5 .2011 WAS MADE VIDE SALE AGREEMENT DATED 22.4.2013 AT A CONSIDERATION OF RS. 6.50 CRORES. THE PROFITS ON SALE OF LAND AMOUNTING TO RS.2,20,83,717/- WAS ACCO RDINGLY RECORDED IN THE BOOKS RELEVANT TO THE FINANCIAL YEAR 2013-14. THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT AS WELL AS RETURN OF INCOME (ROI) FOR THE ASSTT.YEAR 2014-15 WERE REFERRED TO ASSERT THAT THE TAXABLE EVENT ON SALE O F IMPUGNED LAND ARISES IN THE FINANCIAL YEAR 2013-14 RELEVANT TO THE ASSTT.YEAR 2 014-15. IT WAS CONTENDED THAT IN THE ABSENCE OF ANY SALE CONSIDERATION IN TH E FINANCIAL YEAR 2012-13, NO INCOME ON ALLEGED CASH RECEIPTS CAN BE TAXED IN THE FINANCIAL YEAR 2012-13 IT(SS)A.NO.155 AND 156/AHD/2019 11 CONCERNING ASSTT.YEAR 2013-14 IN QUESTION. THE LD. SENIOR COUNSEL THUS SUBMITTED THAT THE AO HAS NO PERMISSIBLE OCCASION A T ALL IN LAW TO ASSESS THE IMPUGNED UNACCOUNTED CASH RECEIPTS ON SALE OF LAND IN THE HANDS OF THE ASSESSEE FOR THE ASSTT.YEAR 2013-14. FOR THE PROPOSITION TH AT THE ALLEGED INCOME OUT OF PURPORTED CASH RECEIPT WOULD ACCRUE TO THE ASSESSEE ONLY IN THE YEAR IN WHICH PROPERTY IS SOLD AND NOT PRIOR THERETO, THE LD.SENI OR COUNSEL REFERRED TO PARA-15 OF THE ORDER OF THE COORDINATE BENCH IN M/S.D.R. CO NSTRUCTION VS. ITO IN ITA NO.2735/AHD/2010 ORDER DATED 8.4.2011. THE LD.SENI OR COUNSEL ALSO RELIED UPON DECISION OF CO-ORDINATE BENCH OF ITAT, PUNE IN M/S.RANADE DIGHE AND ASSOCIATES VS. ITO, ITA NO.466/PN/2010 ORDER DATED 26.8.2011 FOR THE PURPOSES OF DETERMINATION OF TAXABLE EVENT. IT WAS THUS SUBMITTED THAT IN THE LIGHT OF THE VIEW CONSISTENTLY TAKEN BY THE COORDIN ATE BENCHES, THE ALLEGED UNACCOUNTED CASH RECEIPTS CANNOT BE ASSESSED IN THE ASSTT.YEAR 2013-14 IN QUESTION IN THE ABSENCE OF ANY SALE OF LAND PARCELS IN THAT YEAR AND CONSEQUENTLY, ADDITION SO MADE DESERVES TO BE STRUC K DOWN ON THIS SCORE ITSELF. 10.2 MR. SOPARKAR, THEREAFTER ADVERTED TO THE LOOSE PAPER AS REPRODUCED IN PRECEDING PARAGRAPH-(4) OF THIS ORDER, WHICH IS THE FULCRUM FOR INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT AS WELL A S ADDITIONS ON THE BASIS OF CONTENTS OF SUCH LOOSE PAPERS. HE SUBMITTED THAT THE FIRST PART OF THE LOOSE PAPER WOULD SHOW BIL 501 = THE SUN UNDER WHICH 'R S.6,50,00,000/-' IS STATED TO BE PAID BY PURCHASER (BUILDER) TO THE SEL LER (ASSESSEE). BELOW THEREOF, THERE IS ANOTHER ENTRY OF RS.72,00,000 WHEREBY IT APPEARS THAT THIS AMOUNT HAS BEEN PAID TO SHRI DINESHBHAI, WHO IS INFORMED TO BE PREDECESSOR LAND OWNER TO US. AT THE BOTTOM OF THE AFORESAID LOOSE PAPER, A SUM OF 5,30,00,000 IS STATED TO HAVE BEEN PAID IN CASH FOR THREE PROJECTS INCLUD ING THE SUN RELATING TO THE ASSESSEE. THIS IS THE ENTRY IN CONTROVERSY. THE A O HAS MADE PRO-RATA ALLOCATION OF THE AFORESAID AMOUNT OF CASH IN THE HANDS OF THE SELLERS I.E. KANTILAL P. PATEL, IT(SS)A.NO.155 AND 156/AHD/2019 12 CHHOTTALAL P. PATEL AND RAKESHBHAI K. PATEL IN PROP ORTION TO THEIR RESPECTIVE LAND HOLDINGS. IN THIS REGARD, THE LD.SENIOR COUNS EL FOR THE ASSESSEE ADVOCATED THAT NAMES OF THE ASSESSEE OR OTHER SELLERS DID NOT FIGURE IN THE LOOSE PAPER AT ALL. NAME OF KANTIBHAI P. PATEL DOES NOT FIND PLACE IN T HE LOOSE PAPER ANYWHERE. THE LD. SENIOR COUNSEL REFERRED THEM TO THE STATEME NT OF THE SEARCHED PERSON, SHRI MEHUL G. PATEL RECORDED UNDER SECTION 132(4) O F THE ACT IN THIS CONNECTION AND SUBMITTED THAT SHRI MEHUL G. PATEL HAS MERELY C ONFIRMED THAT THE SAID NOTING OF RS.5.30 CRORES WAS UNACCOUNTED PAYMENT MA DE BY HIM TO THE LAND OWNERS BUT HAS NOT IMPLICATED THE ASSESSEE DIRECTLY . STATEMENT NOWHERE MENTIONED THE NAMES OF ANY OF THE APPELLANTS HEREIN . IT WAS FURTHER CONTENDED THAT THE LOOSE PAPER WRITINGS FOUND FROM THE PLACE OF A THIRD PARTY ARE NOT IN THE HAND-WRITING OF THE ASSESSEE NOR IT BORE SIGNATURE OF THE ASSESSEE. WHILE ADVERTING FURTHER, THE LD.SENIOR COUNSEL REFERRED T O PARA-7.4 OF THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE IN THE COURS E OF FIRST APPELLATE PROCEEDINGS REQUESTED THE LD.CIT(A) FOR COPY OF THE ASSESSMENT ORDER MADE IN THE CASE OF PURCHASER, SHRI MEHUL G. PATEL FOR THE ASSTT.YEAR 2013-14 AS WELL AS STATEMENT RECORDED FROM SHRI MEHUL G. PATEL. AS RE QUESTED, THE LD.CIT(A) ALSO DIRECTED THE AO TO RECORD A FRESH STATEMENT OF SHRI MEHUL G. PATEL AND ALLOW THE ASSESSEE TO CROSS-EXAMINE SHRI MEHUL G. PATEL WITH REGARD TO THE TRANSACTION OF RS.5.30 CRORES IN CASH. AN AFFIDAVIT OF SHRI MEHUL G. PATEL WAS ALSO FILED IN SUPPORT OF THE CONTENTIONS OF APPELLANTS WHEREIN HE CATEGORICALLY AFFIRMED THAT PAYMENT IN CASH WAS UNACCOUNTED PAYMENT TO LAND OWN ERS OF THE THREE PROJECTS, BUT THESE PERSONS, TO WHOM CASH PAYMENTS WERE MADE WERE SOME OLD LAND OWNERS (BANAKAT HOLDERS) (BHARWAD/FARMERS) WHO WERE ALSO CLAIMING THE OWNERSHIP IN THE SAID LAND. IT WAS CATEGORICALLY A SSERTED IN THE AFFIDAVIT THAT NO SUCH CASH PAYMENT WAS MADE TO EITHER OF THREE OWNER S I.E. SHRI KANTIBHAI P. PATEL; CHHOTALAL P. PATEL OR RAKESH PATEL. CONTINU ING FURTHER, SHRI SOPARKAR SUBMITTED THAT DESPITE DIRECTIONS OF THE LD.CIT(A), THE AO FAILED IN ITS QUASI- IT(SS)A.NO.155 AND 156/AHD/2019 13 JUDICIAL DUTY TO COMPLY. NEITHER STATEMENT OF SHRI MEHUL G. PATEL WAS RECORDED AFRESH IN THE LIGHT OF AFFIDAVIT, NOR AN OPPORTUNIT Y TO CROSS-EXAMINE WAS PROVIDED TO THE ASSESSEE TO FIND OUT TO WHOM THE AL LEGED UNACCOUNTED CASH PAYMENTS WERE MADE AND HOW IT WAS MADE, WHEN PAID A ND THE BASIS THEREOF. THESE FACTS ARE UNKNOWN EVERY TODAY. THUS, A VALUAB LE RIGHT AVAILABLE TO THE ASSESSEE IN THE FORM OF CROSS-EXAMINATION WAS DENIE D DESPITE SPECIFIC REQUEST OF ASSESSEE AND SPECIFIC DIRECTION OF THE LD.CIT(A). 10.3 THE LD. SENIOR COUNSEL SUBMITTED THAT THE WHOL E BASIS OF ADDITION IS HAND- WRITTEN LOOSE PAPER FOUND FROM THE PREMISES OF THE SEARCHED PERSON SHRI MEHUL G. PATEL WHICH WAS NEITHER SIGNED NOR WRITTEN BY TH E ASSESSEE OR OTHER APPELLANTS HEREIN. IT WAS POINTED OUT THAT THE LOO SE PAPER IS VAGUE IN THE ABSENCE OF NAME OF THE ASSESSEE. FURTHER, DATE OF PAYMENTS ALLEGEDLY MADE TO THE LAND OWNERS IS NOT AVAILABLE. THE STATEMENT OF SEARCHED PERSON ELICITING DETAILS OF THE LOOSE PAPERS ALSO DOES NOT IDENTIFY THE NAME OF THE ASSESSEE PER SE . SUBSEQUENT AFFIDAVIT OF THE SEARCHED PERSON YET AGA IN SUPPORTS CLAIM OF THE ASSESSEE THAT THE PAYMENT WAS NOT MADE TO HIM AT AL L. THE SALE CONSIDERATION WAS RECEIVED THROUGH BANKING CHANNEL, WHICH HAS BEE N DULY RECORDED. 10.4 THE LD. SR.COUNSEL VEHEMENTLY REITERATED THAT DESPITE SPECIFIC REQUEST FOR CROSS-EXAMINATION, THE SEARCHED PERSON WAS NOT CONFRONTED TO THE ASSESSEE FOR UNEARTHING THE TRUTH. THE LD.SENIOR C OUNSEL REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIM BER INDUSTRIES VS. COMM. OF CENTRAL EXCISE, KOLKATA (2015) 62 TAXMANN. COM 3 (SC) AND CONTENDED THAT UNLESS INCRIMINATING MATERIAL ARE PU T TO VERIFICATION OF THE ASSESSEE AND THE STATEMENT AND THE MATERIAL USED AG AINST THE ASSESSEE IS PUT-FORTH FOR CROSS-EXAMINATION, SUCH MATERIAL POSSESSED BY T HIRD PARTY AS WELL AS STATEMENT OF THIRD PARTY CANNOT BE USED AGAINST THE ASSESSEE. IT(SS)A.NO.155 AND 156/AHD/2019 14 10.5 THE LD. SENIOR COUNSEL THUS SUBMITTED THAT PR IMARY ONUS WAS ON THE REVENUE WHILE ALLEGING UNACCOUNTED CASH RECEIPT S IN THE HANDS OF THE ASSESSEE. THE ONUS WAS NEVER SHIFTED UPON THE ASSE SSEE SUCCESSFULLY. IN THE ABSENCE OF COGENT EVIDENCE, WHOLE ACTION OF THE REV ENUE AUTHORITIES IS MARRED BY SUSPICION, SURMISES AND CONJECTURES AND THUS DES ERVES TO BE STRUCK DOWN. THE LD.SENIOR COUNSEL FILED A PAPER BOOK CONTAINING SEVERAL CASES LAWS TO DISLODGE THE ADDITION MADE BY THE AO WHICH WE SHALL DEAL WITH IN THE SUBSEQUENT PART OF THIS ORDER WHERE CONSIDERED EXPE DIENT. 10.6 IN CONCLUSION, THE LD. SENIOR COUNSEL SUBMITT ED THAT THE ADDITION MADE BY THE AO HAS NO RATIONAL CONNECTION WITH THE EVIDENCE RELIED UPON IN THE FORM OF LOOSE PAPER AND STATEMENT OF THE THIRD-PART Y WHICH IS NEITHER INCRIMINATING NOR PERMITTED TO BE EXAMINED IN CROSS . IT WAS THUS CONTENDED THAT ORDERS OF THE REVENUE AUTHORITIES ARE WITHOUT ANY L EGALLY SOUND BASIS. 11. PER CONTRA, THE LD.DR FOR THE REVENUE STRONGLY RELIED UPON THE OBSERVATIONS MADE IN THE CONCURRENT ORDER OF THE AO AND THE CIT(A) AND VEHEMENTLY SUPPORTED ORDERS OF THE AUTHORITIES BELO W. THE LD.DR SUBMITTED THAT EXTREME ACT OF SEARCH ACTION AT THE PREMISES O F THE PURCHASER OF THE LAND IN QUESTION UNDER SECTION 132 OF THE ACT COULD ONLY UN EARTH TANGIBLE INCRIMINATING DOCUMENTS IN THE FORM OF LOOSE PAPER UNDER REFERENC E. THE LD.DR SUBMITTED THAT THE MOST RELEVANT FACT TO BE BORNE IN MIND IS THAT THE LOOSE PAPER CLEARLY GIVES ACCOUNT OF CHEQUE PAYMENTS IN RESPECT OF THRE E PROJECTS AS WELL AS AGGREGATE CASH PAYMENT OF RS.5.30 CRORES IN THE SAM E BREATH. THE CASH COMPONENT AS MENTIONED IN THE LOOSE PAPER IS NATURA LLY NOT APPEARING IN THE REGISTERED SALE DEED. COUPLED WITH THIS, IN THE SP ONTANEOUS STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT OF THE PURCHASER, S HRI MEHUL G. PATEL HAS TESTIFIED THAT THE PAYMENTS HAVE BEEN MADE TO THE L AND OWNERS. AS A COROLLARY, UNACCOUNTED CASH HAS BEEN PAID TO S/SHRI KANTILAL P . PATEL, CHHOTTALAL P. PATEL IT(SS)A.NO.155 AND 156/AHD/2019 15 AND RAKESHBHAI K. PATEL, WHO HAPPENED TO BE LAND OW NERS IN THE INSTANT CASE. THE AO, THEREFORE, IN THE ABSENCE OF SPECIFIC BREAK -UP HAS RIGHTLY ALLOCATED AGGREGATE CASH PAYMENT IN THE HANDS OF ALL THE THRE E SELLERS INCLUDING THE ASSESSEE HEREIN IN PROPORTION TO THEIR LAND HOLDING S FOR THE PURPOSE OF QUANTIFICATION OF UNACCOUNTED INCOME. 11.1 THE LD.DR THEN POINTED OUT THAT AFFIDAVIT OF T HE PURCHASER FILED BY THE ASSESSEE AT THE BELATED STAGE BEFORE THE LD.CIT(A) IS AN AFTERTHOUGHT AND OF NO CONSEQUENCE. IT WAS POINTED OUT THAT THE STATEMENT WAS RECORDED UNDER SECTION 132(4) ON 24.9.2015 WHEREAS THE ASSESSMENT WAS CARR IED OUT ON 29.12.2017. HOWEVER, THE AFFIDAVIT WAS FILED AFTER A GAP OF THR EE YEARS ON 16.10.2018. SUCH AFFIDAVIT WHICH ATTEMPTS TO DIVERT GOAL-POST AND TR IES TO EXONERATE THE ASSESSEES WHO ARE LAND OWNERS DO NOT RESONATE WITH GROUND REA LITIES, AND HENCE WAS NO MERIT. IT IS NOT ALWAYS EXPECTED FROM A PERSON GI VING IMPUGNED CASH TO ADMIT AT A BELATED STAGE ADVERSE TO THE SELLER AND IN FAV OUR OF REVENUE. 11.2 IN REBUTTAL OF THE CONTENTIONS MADE ON BEHALF OF THE ASSESSEE ABOUT THE TAXABLE EVENT BEING FINANCIAL YEAR 2013-14 INSTEAD OF 2012-13, THE LD.DR POINTED OUT THAT THE AGREEMENT FOR SALE HAS BEEN EX ECUTED AT THE VERY BEGINNING OF NEXT YEAR IN APRIL, 2013. WHEN SEEN IN THE PERS PECTIVE OF MARKET PRACTICES AND USAGE IN TRADE, THE CASH IS GENERALLY PAID EARL IER TO THE EXECUTION OF THE FORMAL SALE DEED. THUS, IT CAN BE EASILY INFERRED THAT THE CASH HAS BEEN TRANSFERRED TO THE LAND OWNERS I.E. APPELLANTS HERE IN IN THE FINANCIAL YEAR 2012- 13 AND THUS RIGHTLY ASSESSED IN THE ASSESSMENT YEAR 2013-14. 11.3 ASSAILING CONTENTS OF THE AFFIDAVIT FURTHER ON THE ALLEGATION OF TREMENDOUS MENTAL STRESS AT THE TIME OF STATEMENT RECORDED UND ER SECTION 132(4) OF THE ACT, THE LD.DR ADVERTED TO THE STATEMENT RECORDED AT THE TIME OF SEARCH WHICH IS DULY PLACED IN PAPER BOOK AND PIN POINTED THAT ADEQUATE REST AND BREAK WAS BEING IT(SS)A.NO.155 AND 156/AHD/2019 16 GIVEN TO THE DEPONENT OF THE AFFIDAVIT WHILE RECORD ING SUCH STATEMENT. IT WAS THUS CONTENDED THAT THE STATEMENT UNDER SECTION 132 (4) WAS RECORDED DUTIFULLY IN CORDIAL ATMOSPHERE AND THEREFORE THERE IS NO REASON TO DISBELIEVE ITS CONTENTS. THE ADMISSION MADE UNDER SECTION 132(4) IS AN ADMIS SIBLE PIECE OF EVIDENCE. IT WAS FURTHER CONTENDED THAT MERELY BECAUSE A FRESH C ROSS-EXAMINATION OF WITNESS TO THE ASSESSEE HAS NOT BEEN PROVIDED AS DIRECTED B Y THE CIT(A), IT WILL NOT IMPINGE UPON THE ACTION TAKEN ADVERSE TO THE ASSESS EE AS OBSERVANCE OF DIRECTION IN THE REMAND REPORT BY THE CIT(A) IS A CAUSE BETWE EN THE CIT(A) AND THE AO. THE ASSESSEE HAS NO ROLE TO PLAY IN THIS CASE. THE CIT(A) HAS ULTIMATELY ENDORSED THE ACTION OF THE AO. CONSEQUENTLY, IT CA N BE INFERRED THAT THE CIT(A) WAS ALSO SATISFIED WITH THE QUALITY OF EVIDENCE BEF ORE HIM AGAINST THE ASSESSEE. THE LD.DR ACCORDINGLY CONTENDED THAT NO INTERFERENC E WITH ORDER OF THE AO IS CALLED FOR. 12. IN REJOINDER, THE LD.SENIOR COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE STATEMENT UNDER SECTION 132(4) WAS CONFRONTED TO TH E ASSESSEE FOR THE FIRST TIME BY WAY OF SHOW CAUSE NOTICE UNDER SECTION 142(1) DA TED 23.11.2017 ONLY. THEREFORE, IT IS NOT CORRECT TO SAY THAT AFFIDAVIT HAS BEEN FILED AFTER A GAP OF THREE YEARS AS CLAIMED. THE LD.COUNSEL FURTHER SUBMITTED THAT WHEN SPECIFIC DIRECTION HAS BEEN GIVEN BY THE LD.CIT(A) ASKING THE AO TO PR OVIDE CROSS-EXAMINATION, THE AO CANNOT SUPERSEDE SUCH DIRECTION WITHOUT LEAV E OF THE CIT(A). SUCH DIRECTION GIVEN UNDER PUBLIC DUTY IS NOT A PERSONAL CAUSE BETWEEN THE CIT(A) AND THE AO. FOR THIS PURPOSE, THE LD.SENIOR COUNSE L REFERRED TO THE DECISION IN THE CASE OF BHOPAL SUGAR INDUSTRIES LTD. VS. ITO 40 ITR 618 (SC ) . THE LD.COUNSEL NEXT POINTED OUT THAT PRESUMPTION UNDER SECTION 132(4A) OF THE ACT IN RESPECT OF STATEMENT RECORDED UNDER SECTION 132( 4) IS NOT AVAILABLE AGAINST A THIRD-PERSON I.E. THE ASSESSEE (HEREIN) FROM WHOSE POSSESSION SUCH PAPERS AND THE ALLEGED DOCUMENTS WERE DISCOVERED. THE STATEME NT OF SEARCHED PERSON IT(SS)A.NO.155 AND 156/AHD/2019 17 RECORDED AT THE BACK OF THE ASSESSEE CANNOT CONCLUD E THE CASE AGAINST THE ASSESSEE PARTICULARLY WHEN MAKER OF SUCH UNCLEAR AN D VAGUE STATEMENT HAS NOT BEEN ALLOWED TO BE INTERROGATED BY THE ASSESSEE. I T IS WRONG ON THE PART OF THE REVENUE TO CONTEND ADMISSIBILITY OF STATEMENT UNDER SECTION 132(4) AS EVIDENCE AGAINST THE ASSESSEE. 13. ON A QUERY FROM THE BENCH, THE LD.COUNSEL FOR T HE ASSESSEE POINTED OUT THAT NO ADDITIONS HAS BEEN MADE IN THE HANDS OF SEL LER VIZ. RAKESH K. PATEL TO THE BEST OF HIS KNOWLEDGE. THE LD.DR COULD NOT THR OW ANY LIGHT ON THIS QUERY. 14. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS AND ORDERS OF THE AO AND THE CIT(A) AND PERUSED THE CASE LAWS CITED AT BAR. ONLY ISSUE IN THIS APPEAL IS ABOUT CORRECTNESS OF ADDITION OF PURPORTED AMOUNT O F RS.2,90,22,746/- MADE BY THE AO IN THE HANDS OF ASSESSEE IN THE PROCEEDINGS CARRIED OUT UNDER SECTION 153C OF THE ACT ON THE GROUND THAT IT REPRESENTS CA SH RECEIVED ON SALE OF ITS LAND AS ATTRIBUTABLE TO THE ASSESSEE IN THE LIGHT OF LOO SE PAPER FOUND FROM THE POSSESSION OF THE CORRESPONDING PURCHASERS IN THE C OURSE OF SEARCH CARRIED OUT ON THEM. 14.1 IN THE INSTANT CASE, A SEARCH ACTION WAS CONDU CTED ON THE MANAGING PARTNER OF PURCHASING FIRMS SHRI MAHUL G. PATEL (MG P) WHERE A LOOSE PAPER WAS INTER ALIA FOUND RELATING TO THE APPELLANTS HEREIN. AS THE LO OSE PAPER STRIKES TO THE ROOT OF THE CONTROVERSY IN HAND, IT HAS BEEN EXTRACTED IN PARA-4 OF THIS ORDER FOR IMMEDIATE REFERENCE. IN THE INSTANT CASE, THE LOOSE PAPER WAS HANDED OVER BY THE AO OF THE SEARCHED PERSON TO THE AO OF THE APPELLANTS HEREIN AND CONSEQUENTLY ASSESSMENT PROCEEDINGS UNDER S. 153C W AS INITIATED IN THE HANDS OF THE PERSON OTHER THAN SEARCHED PERSON I.E. ASSES SEE HEREIN. ON BEING CONFRONTED WITH LOOSE PAPER AND STATEMENT OF SEARCH ED PERSON (MGP) AS RECORDED AT THE TIME OF SEARCH UNDER S. 132(4) OF T HE ACT, IN THE COURSE OF IT(SS)A.NO.155 AND 156/AHD/2019 18 ASSESSMENT UNDER S. 153C OF THE ACT, THE ASSESSEE S ELLERS ASSERTED THAT THE SALE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNEL AND HAS BEEN DULY RECORDED IN BOOKS AND ACCOUNTED FOR THE PURPOSES OF DETERMINATION OF TAX LIABILITY. THE APPELLANT SELLER DENIED HAVING RECEI VED ANY UNACCOUNTED MONEY OVER AND ABOVE RECORDED TRANSACTIONS TOWARDS SALE C ONSIDERATION. HOWEVER, THE AO DISREGARDED THE STAND OF THE ASSESSEE AND PROCEE DED TO MAKE ESTIMATION OF UNACCOUNTED RECEIPTS AROSE TO THE RESPECTIVE SELLER S I.E. APPELLANTS HEREIN ON SALE OF THEIR RESPECTIVE HOLDINGS IN LAND. THE UNACCOUNT ED INCOME WAS ESTIMATED IN PROPORTION TO THE RESPECTIVE HOLDINGS OF THESE SELL ERS VIZ. SHRI KANTILAL P. PATEL (KPP); SHRI CHHOTALAL P. PATEL(CPP) AND RAKESH K. P ATEL(RKP). ON THE BASIS OF PROPORTIONATE LAND HOLDINGS OF RESPECTIVE SELLER S, THE AO APPORTIONED THE UNACCOUNTED ON-MONEY RECEIPT AT RS.2,90,22,746/- IN THE HANDS OF SELLER KANTILAL; RS.71,93,176/- IN THE HANDS OF CHHOTALAL, THE APPELLANTS HEREIN. SIMILARLY RS.1,67,84,077/- WAS FOUND ATTRIBUTABLE TO ANOTHER CO-SELLER MR. RAKESH K. PATEL. AS PER THE APPORTIONMENT MADE, THE AO MADE AN ADDITION OF RS.2,90,22,746/- IN THE HANDS OF FIRST APPELLANT, S HRI KANTILAL P. PATEL AND RS.71,93,176/- IN THE HANDS OF SECOND APPELLANT VIZ . CHHOTALAL P. PATEL HEREIN. THESE ADDITIONS ARE THE SUBJECT MATTER OF PRESENT C ONTROVERSY. WHEREABOUTS OF SIMILAR ACTION UNDER S. 153C, IF ANY, FOR A PART CO MPONENT ALLEGEDLY ATTRIBUTABLE IN THE HANDS OF SHRI RAKESH PATEL IS, HOWEVER, NOT KNOWN AT THIS STAGE. 14.2 IN THE FIRST APPEAL, THE CIT(A) DID NOT FIND M ERIT IN THE PLEA OF THE ASSESSEE FOR LACK OF ANY SUBSTANCE IN THE ACTION OF THE AO TOWARDS SUCH ADDITIONS. THE CIT(A) ALSO PLACED RELIANCE UPON THE IMPUGNED LOOSE PAPER AND THE STATEMENT OF THE SEARCHED PERSON MADE UNDER S. 132(4) OF THE ACT AND OBSERVED THAT ONUS OF MGP UNDER SECTION 132(4A) AND S. 292C WOULD BE CONSIDERED TO BE DISCHARGED ONLY IF THOSE NAMED PER SONS I.E. OTHER LAND OWNERS/PREDECESSOR ARE ALSO IDENTIFIED BY HIM TO WH OM THE CASH/ON-MONEY WAS IT(SS)A.NO.155 AND 156/AHD/2019 19 GIVEN BY HIM AND THESE PERSONS SIMULTANEOUSLY OWNS UP HAVING RECEIVED SUCH ON-MONEY CONSIDERATION FOR REPUDIATION OF THEIR SO CALLED INVISIBLE RIGHTS IN THE LANDHOLDINGS. IT WAS OBSERVED THAT A MERE ASSERTION THAT SUCH CASH PAYMENTS WERE NOT MADE TO THE ASSESSEE AND CO-SELLERS HEREIN DOES NOT BREAK THE ICE AND HENCE NOT CONCLUSIVE. IT WAS OBSERVED THAT IN THE A BSENCE OF ANY CONFIRMATION FROM SO-CALLED OTHER PARTIES TO HAVE RECEIVED SUCH PAYMENT, IT CANNOT BE SUBSCRIBED THAT CASH WAS PAID TO BHARWAD /FARMERS OR THE EARLIER OWNERS, MORE SO, BECAUSE SEIZED LOOSE DOCUMENTS ITSELF MENTIONED THAT ONLY RS.7 LAKHS IN CASH HAS BEEN PAID TO BHARWAD . THE CIT(A) ACCORDINGLY HELD THAT THE SWORN AFFIDAVIT OF THE PURCHASER(MGP) CANNOT BE ADMITTED AS RELIABLE PIECE OF EVIDENCE TOWARDS THE PLEA OF THE ASSESSEE THAT RS.5 .30 CRORES WAS NOT PAID TO THE CO-SELLERS OF THE LAND HEREIN AS ALLEGED. IT WAS O BSERVED THAT THE CONTENTS OF LOOSE PAPER AND STATEMENT OF PURCHASERS CAN NOT BE BRUSHED ASIDE MERELY AS A THIRD PARTY STATEMENT. IT WAS OBSERVED THAT THE APP ELLANTS HEREIN BEING OWNERS OF THE LAND PRIOR TO SALE, THE ACTION OF AO TOWARDS AD DITION OF RS. 2,90,22,746/- IN THE HANDS OF KANTILAL P. PATEL AND RS. 71,93,176 IN THE HANDS OF SHRI CHHOTALAL P. PATEL IS FULLY JUSTIFIED ON MERITS. THE CIT(A) A LSO UPHELD ACTION OF THE AO FOR ASSUMING JURISDICTION FOR ASSESSMENT UNDER S. 153C OF THE ACT ON THE GROUND THAT THE LOOSE PAPER FOUND IN SEARCH CLEARLY RELATE S TO THE APPELLANTS. 14.3. IN THE BACKDROP CAPSULED IN PRECEEDING PARA, THE SEIZED LOOSE PAPER REPRODUCED IN PARA-4 HEREINABOVE OF THIS ORDER IS B EDROCK FOR ADDITIONS IN CONTROVERSY. IT IS AN ADMITTED POSITION THAT SEIZE D LOOSE PAPER IN QUESTION WAS FOUND FROM THE POSSESSION OF THE THIRD PARTY I.E. S EARCHED PERSON MEHUL G. PATEL. THE NOTINGS ARE NOT IN THE HANDWRITING OF AN Y OF THE APPELLANTS HEREIN NOR STATED TO BE SIGNED BY ASSESSEE. A BARE GLANCE AT T HE LOOSE PAPER REVEALS THAT THE AMOUNTS WRITTEN IN THE SAID LOOSE PAPER DOES NOT BE AR ANY OBJECTIVE DETAILS ON IDENTITY OF RECIPIENTS AND IS QUITE VAGUE AND MUTED . THE DATES ON WHICH IT(SS)A.NO.155 AND 156/AHD/2019 20 PURPORTED PAYMENTS OR SOME KIND OF BREAK-UP AS TO W HEN AND HOW IT HAS BEEN PAID IS SORELY MISSING. IT IS JUST ONE PAGE WRITING IN A SUMMARIED MANNER WHERE THE PAYMENTS THROUGH BANKING CHANNEL ARE STATED TO HAVE BEEN PAID NOT ONLY TO THE SELLERS OF THE LAND, BUT ALSO TO OTHER PERSONS LIKE DINESHBHAI ETC. WHO ARE STATED TO BE PREVIOUS OWNERS OR IN SOME WAY HOLDING INFLUENCE ON POSSESSION OF THE LAND. THIS IS QUITE A NOTICEABLE FACT AS FOUND RECORDED IN PARA 5.8(III) OF THE ASSESSMENT ORDER. WHEN SEEN HOLISTICALLY, THE AUTHO R OF THE LOOSE PAPER ADMITTEDLY RECOGNISES LAND OWNERS (SUPPOSEDLY KPP, CPP & RKP) AND ALSO OTHER PERSONS AS STAKEHOLDERS IN THE SAME BREATH, I N SOME WAY. SIMILARLY ALONGSIDE THE ALLEGED CASH PAYMENT STATED TO BE RS. 5.30 CRORES, THE PAYMENTS TO BHARWAD IS ALSO PENNED DOWN. THUS, THE LOOSE PAPER ITSELF SIGNIFIES A VERY PRESENCE OF OTHER PARTIES IN THE CONSUMMATION OF SA LE TRANSACTION TOGETHER WITH LAND OWNERS( KPP ETC.) AND PURCHASERS. AS NOTICED E ARLIER, IT IS NOT YET KNOWN AS TO WHOM AND WHEN AND HOW SUCH HUGE CASH PAYMENT WER E PURPORTEDLY MADE FOR RELEVANT ELUCIDATION IN THIS REGARD. THE SOLITA RY LOOSE PAPER IN REFERENCE IS STOICALLY SILENT ON THIS CRUCIAL ASPECT. THERE IS N O REFERENCE TO ANY POST SEARCH ENQUIRY FROM THE SELLERS TO ELICIT SOME MEANINGFUL INFORMATION ON SUCH CRUCIAL ASPECT. THE LOOSE PAPER, THUS, WHEN SEEN IN ITS OWN , SCARCELY PROVIDE ANY SUSTAINABLE BASIS TO BRAND THE ASSESSEE AS PURPORTE D RECIPIENTS OF UNACCOUNTED MONEY. THE ADMITTED PRESENCE OF OTHER PERSONS SHARI NG SALE CONSIDERATION ALONG WITH THE APPELLANTS HEREIN POSES CHALLENGE TO THE I NFERENCE THAT APPELLANTS WERE THE ONLY BENEFICIARIES OF ALL RECEIPTS AS LAND OWNE RS IN EXCLUSION TO OTHERS. IN THE ABSENCE OF ANY KIND OF INQUIRY PERTINENT IN THIS RE GARD, A NONDESCRIPT LOOSE PAPER IN ITSELF CANNOT BE SEEN TO PROVIDE ANY SOUND BASIS TO INFER THE APPELLANTS AS SOLE & EXCLUSIVE LAND OWNERS IN THE PRESENT CONTEXT WITH SOME DEGREE OF CERTAINTY EXPECTED BY A QUASI JUDICIAL AUTHORITY. THE WHOLE INFERENCE ADVERSE TO ASSESSEE IS IN THE REALM OF SUSPICION AND CONJECTURES AND NO MORE. IT(SS)A.NO.155 AND 156/AHD/2019 21 14.4 WE MAY NOW PROCEED TO DELVE UPON THE STATEMENT OF SEARCHED PERSON (MGP) OBTAINED IN EXERCISE OF POWERS CONFERRED UNDE R S. 132(4) AT THE TIME OF SEARCH IN CORROBORATION OF THE LOOSE PAPER AS REPRO DUCED IN PARA 5.5 OF THE ASSESSMENT ORDER. AS PER AO, MGP HAS ADMITTED THAT CASH PAYMENT HAS BEEN MADE TOWARDS PURCHASES FOR THREE PROJECTS VIZ. SUN (SUN INFRA), SUN VILLA (SUN BUILTCON) AND THE DOVE (DOVE INFRA). BASED ON THE L OOSE PAPER AS SUPPORTED BY THE STATEMENT OF THE PURCHASERS, THE AO DREW AN INF ERENCE THAT THE ASSESSEE INDEED HAS RECEIVED CASH AS PER ITS SHARE OF LAND H OLDING AS MENTIONED IN THE LOOSE DOCUMENTS. WHILE HOLDING SO, THE AO OBSERVED THAT THE PARTIES ARE RELATIVES AND THE LAND BELONGED TO IN THE SAME FAMI LY AND HENCE CASH PAYMENT FOR THE TOTAL LAND RELATES TO THESE THREE PROJECTS. WHILE RECORDING THE STATEMENT NO LOGICAL ENQUIRY APPEARS TO HAVE BEEN MADE ON THE CASH PAYMENTS. THE SEARCH OFFICIALS WERE CONTENTED WITH A MERE BALD CO NFESSION OF THE MAKER OF STATEMENT. NEITHER THE IDENTIFICATION OF PARTIES TO WHOM THE PAYMENTS WERE ALLEGEDLY MADE NOR THE MANNER AND DATE OF SUCH PAYM ENTS TO VARIOUS PARTIES INVOLVED IS DISCERNIBLE FROM THE SO CALLED STATEMEN T OF MGP EXAMINED IN THIS REGARD. THE AO HAS OBDURATELY RELIED UPON SUCH A TO TALLY UNINTELLIGIBLE ASSERTION OF MGP TO IMPLICATE A THIRD PARTY NAMELY THE APPELL ANTS HEREIN WITHOUT ANY ENQUIRY. IN OUR VIEW, THE CIT(A), AS NOTED IN PARA 7.4 OF ITS APPELLATE ORDER, RIGHTLY DIRECTED THE AO FOR FRESH EXAMINATION OF MG P IN THE CIRCUMSTANCES. A SWORN AFFIDAVIT OF MGP WHICH APPEARS TO BE ONLY CLA RIFICATORY AND AN EXTENSION OF HIS EARLIER STAND UNDER S. 132(4), FILED BY ASSE SSEE BEFORE CIT(A) IN FIRST APPELLATE PROCEEDINGS WAS ALSO FORWARDED TO THE AO FOR HIS COMMENTS. BESIDES, THE CIT(A) ALSO DIRECTED THE AO TO PROVIDE CROSS EX AMINATION OF MGP IN CASE OF ANY ASSERTION ADVERSE TO THE ASSESSEE AND RIGHTL Y SO. HOWEVER, ADMITTEDLY, THE AO DID NOT CONFIRM TO THE DIRECTIONS MADE IN EXERCI SE OF POWERS OF CIT(A) UNDER S. 250(4) OF THE ACT AND ONLY REITERATED ITS EARLIER STAND THAT MGP HAS IT(SS)A.NO.155 AND 156/AHD/2019 22 CONFIRMED CASH PAYMENT OF RS.5.30 CR. TO THE LAND O WNERS OF THREE PROJECTS OVER AND ABOVE CHEQUE PAYMENTS. 14.5 UNMOVED BY SUCH BLATANT SUBVERSION OF STATUTOR Y DIRECTIONS BY THE AO, THE CIT(A) HAS PARADOXICALLY GIVEN TOTALLY UNTENABL E OBSERVATIONS MADE IN PARA 7.7 & 7.8 TO LEND SUPPORT TO THE ACTION OF THE AO. FOR INSTANCE (I) THE CIT(A) OBSERVES THAT MGP WAS UNDER OBLIGATION TO IDENTIFY THE PERSONS TO WHOM THE PAYMENT OF RS. 5.37 CRORES HAVE BEEN PAID. HENCE, F OR FAILURE OF MGP TO GIVE DETAILS AND FOR FAILURE OF THE SEARCH PARTY TO SEEK SPECIFIC DETAILS THEREON AND YET AGAIN NONCHALANCE DEMONSTRATED BY THE AO IN REMAND PROCEEDINGS, THE ASSESSEE (A THIRD PARTY) IS BEING SOUGHT TO BE CRUC IFIED (II) THE STATUTORY PRESUMPTION EMBODIED UNDER S. 292C & 132(4A) FOR DO CUMENTS FOUND IN SEARCH OPERATES ADVERSE TO THE PERSON IN WHOSE CONT ROL OR POSSESSION, SUCH DOCUMENTS ARE FOUND AND NON ELSE. HOWEVER, IN A GLA RING DEMONSTRATION OF PERVERSITY, THE ASSESSEE HEREIN HAS BEEN HELD TO BE RESPONSIBLE FAILURE OF THE SEARCHED PERSON TO DISCHARGE PURPORTED ONUS CAST UP ON HIM (III) THE STAND OF THE CIT(A) ON ADMISSIBILITY OF AFFIDAVIT IS MARRED BY G ROSS INCONSISTENCY. THE CIT(A), AFTER REFUSAL OF THE AO TO CALL UPON THE DE PONENT OF AFFIDAVIT FOR EXAMINATION AND CROSS EXAMINATION IN HIS FIRST TAKE , AVERS IMMEDIATELY THEREAFTER THAT CONTENTS OF AFFIDAVIT MIGHT BE TRUE AND IMMEDIATELY THEREAFTER MAKES YET ANOTHER CONTRADICTORY AVERMENT THAT HE DO ES NOT INTEND TO GO INTO THE ADMISSIBILITY AND RELIABILITY OF AFFIDAVIT. THE CIT (A) FINALLY CONCLUDES THAT THE AFFIDAVIT CANNOT BE ADMITTED AS RELIABLE EVIDENCE M AINLY FOR THE REASON THAT THE SEARCHED PERSON HAS NOT DISCHARGED HIS ONUS TO PROV IDE IDENTIFICATION ETC. THE WHOLE SEQUENCE & PATTERN IS DELIGHTFULLY INCONSISTE NT AND CONTRADICTORY TO ONE ANOTHER. OVERTLY, THE CIT(A) HAS SOUGHT TO IMPLICAT E THE ASSESSEE FOR ACTION/ INACTION OF SOMEBODY ELSE WITHOUT ANY OPPORTUNITY O F REBUTTAL. THE TEXT AND TENOR OF THE OBSERVATIONS OF CIT(A) ARE THUS TOTALL Y UNCOMPLIMENTARY. IT(SS)A.NO.155 AND 156/AHD/2019 23 14.6. IT IS WELL SETTLED THAT WHERE THE EVIDENCE AD VERSE TO ASSESSEE IS BROUGHT ON RECORD, THE ASSESSEE MUST BE GIVEN OPPORTUNITY T O REBUT IT. IT IS ALSO WELL SETTLED THAT ASSESSING OFFICER IS NOT ENTITLED TO M AKE A PURE GUESS WHILE MAKING AN ASSESSMENT. THERE MUST BE MORE THAN BARE SUSPICI ON TO SUPPORT AN ASSESSMENT. AS OBSERVED EARLIER, THE LOOSE PAPER DO ES NOT CATEGORICALLY IDENTIFY THE NAME OF THE RECIPIENTS OF CASH PAYMENTS ALLEGED LY GIVEN BY THE PURCHASER OF VARIOUS PARCELS OF LAND. THE STATEMENT IN CORROBORA TION ALSO CONTINUES TO REMAIN SILENT ON THE SPECIFIC DETAILS. A BASIC ENQUIRY TOW ARDS FLOW OF PAYMENTS IS ABSENT. THE INITIAL ONUS WAS ALWAYS ON REVENUE TO J USTIFY ITS ALLEGATION OF PAYMENT OF ON-MONEY BY THE SELLERS TO THE ASSESSEE. THE DECISION OF HONBLE SUPREME COURT IN K. P. VERGHESE VS. ITO (1981) 131 ITR 597(SC) MAY BE REFERRED IN THIS REGARD. THIS PRIMARY ONUS COULD NE VER BE SHIFTED UPON THE ASSESSEE SUCCESSFULLY IN THE INSTANT CASE. THE REV ENUE HAS NOT ADDUCED ANY COGENT MATERIAL WHICH COULD EXPOSE THE FALSEHOOD IN THE RECORDS OF THE ASSESSEE. DESPITE DRASTIC ACTION OF SEARCH ON A THIRD PARTY, NO MATERIAL OTHER THAN THE LOOSE DOCUMENT OF INEXPLICABLE NATURE WHOSE AUTHOR IS NOT KNOWN AND WHICH DOES NOT BEAR ANY MATERIAL PARTICULARS, WAS BROUGHT ON RECOR D TO IMPLICATE THE ASSESSEE. A LUMP SUM FIGURE OF RS.5.30 CRORES WRITTEN IN SUMMAR Y MANNER IN BOTTOM SIDE OF LOOSE PAPER IS THE BASIS FOR WHOLE ACTION. THE CIT( A) ITSELF HAS RECORDED THAT A DIRECTION WAS GIVEN TO THE AO TO RECORD FRESH STATE MENT OF THE WITNESS OF THE DEPARTMENT, I.E. PURCHASER MEHUL G. PATEL AND ALSO GRANT CROSS-EXAMINATION THEREON TO THE ASSESSEE IN CASE OF ANY ADVERSE INFE RENCE. NEEDLESS TO SAY, WHEN A STATUTORY DIRECTION HAS BEEN GIVEN TO DO AN ACT I N A PARTICULAR MANNER, THE AO COULD NOT HAVE REFUSED TO DO SO. APART FROM LOOSE PAPER AND AN OBSCURE STATEMENT OF THIRD PARTY, THERE IS NOTHING ELSE IN THE POSSESSION OF THE AO. THE PRIMARY ONUS WHICH LAY UPON THE AO TO SUPPORT ITS A LLEGATION AGAINST THE ASSESSEE WAS NEVER SHIFTED. IN SUCH A SITUATION, IN THE ABSENCE OF ANY IT(SS)A.NO.155 AND 156/AHD/2019 24 DEMONSTRABLE EVIDENCE, THE STAGE FOR CROSS EXAMINAT ION NEVER AROSE. NEVERTHELESS, THE ASSESSEE ON ITS PART, HAS DEMONST RATED FROM THE LOOSE PAPER ITSELF THAT APART FROM THE LAND OWNERS I.E. APPELLA NTS HEREIN, THERE WERE OTHER STAKEHOLDERS TOO WHO RECEIVED MONEY FROM THE PURCHA SERS FOR EXECUTION OF SALE TO SAIL THROUGH. THUS, AN EVIDENT UNCERTAINTY & DOU BT HAD CREPT IN ABOUT ACTUAL RECIPIENT OF PURPORTED CASH COMPONENT. BEFORE THE C IT(A), THE ASSESSEE ALSO FILED DULY SWORN AFFIDAVIT OF MEHUL G. PATEL WHEREB Y HE AFFIRMED ON OATH THAT THE CASH PAYMENTS WERE NOT MADE TO THE ASSESSEE AND OTHER APPELLANTS HEREIN BUT WAS PAID TO SOME OLD LAND OWNERS/ BANAKHAT OWNERS/( BHARWARD /FARMERS) (I.E. GANOTIA) AND OTHERS, WHO WERE CLAIMING OWNERSHIP IN THE SAID LAND. SIGNIFICANTLY, IT IS ASSERTED IN UNEQUIVOCAL TERMS THAT NO CASH PAYMENT WAS MADE TO SHRI CHHOTALAL, RAKESH PATEL OR KANTILAL PATEL, WHO WERE ACTUALLY OWNER OF THE SAID BLOCK OF LAND. THUS, THE AFFIDAVIT IN FACT SEEKS TO TOTALLY EXONERATE ALL THE THREE LAND OWNERS AS BENEFICIARIES. WHILE IT IS TRUE THAT AFFIDAVIT NEED NOT ALWAYS BE ACCEPTED AS GOSPEL TRUTH, WE MUST BEAR IN MIND THAT THE CONTENTS OF AFFIDAVIT IN THE INSTANT CASE REMAINS UNCONTROVERTE D. IN SUCH A SITUATION WHERE NEITHER LOOSE PAPER NOR STATEMENT REVEALS NAME OF A NY BENEFICIARIES AND WHERE THERE IS ENOUGH SCOPE TO GIVE CREDENCE TO THE AFFID AVIT IN VIEW OF THE PRESENCE OF OTHER STAKEHOLDERS, IT WAS INCUMBENT UPON THE AO TO VERIFY THE PROPRIETY OR TRUTHFULNESS OF RECITALS OF THE AFFIDAVIT AND RECOR D A FRESH STATEMENT AS CALLED UPON BY CIT(A). THE STAGE OF CROSS EXAMINATION FOR REBUTTAL OF CONTENTS OF STATEMENT WOULD ARISE ONLY IN THE EVENT OF ANY ASSE RTION ADVERSE TO THE ASSESSEE. THE CIT(A) HAS APPROVED THE ACTION OF AO DESPITE CO MPLETE DEFIANCE OF STATUTORY DIRECTIONS AS WELL AS NATURAL JUSTICE. NE EDLESS TO SAY THAT PROPER OPPORTUNITY TO AN AFFECTED PARTY IS NOT A GIFT BUT AN ABSOLUTE AND SALUTARY RIGHT WHICH CANNOT BE SIMPLY BYE-PASSED. THE LEGITIMATE E XPECTATION OF THE ASSESSEE TO SEEK CROSS-EXAMINATION OF A PERSON WHO SUPPOSEDL Y MADE ADVERSE COMMENT AGAINST THE ASSESSEE, TO ENABLE IT TO TRAVERSE THE ASSERTIONS, CANNOT BE SHUNTED IN IT(SS)A.NO.155 AND 156/AHD/2019 25 SUBVERSION OF JUDICIAL PROPRIETY WHILE WEIGHING THE ISSUE. THE INFRINGEMENT OF BASIC PRINCIPLE OF NATURAL JUSTICE HAS THUS VITIATE D ORDER OF THE AO TO THE CORE. WE ARE UNABLE TO SUBSCRIBE TO THE POSITION TAKEN BY THE REVENUE FOR EXERCISE OF POWER IN A MANNER MOST BENEFICIAL TO THE REVENUE AN D CONSEQUENTLY MOST ADVERSE TO THE ASSESSEE IN TOTAL DISREGARD TO THE F AIRNESS IN HIS ACTION. THE NONDESCRIPT LOOSE PAPER FOUND FROM THE POSSESSION O F THIRD PARTY AND AN UNINTELLIGIBLE STATEMENT OF SUCH THIRD PARTY WITHOU T SPECIFIC PARTICULARS IS OF NO CONSEQUENCE IN SO FAR AS THE ASSESSEE HEREIN IS CON CERNED. THE FINDINGS OF THE CIT(A) IS THUS DEVOID OF ANY LEGITIMACY. 14.7 THE FUNDAMENTAL DIFFERENCE BETWEEN EVIDENTIARY VALUE OF STATEMENT UNDER S. 132(4) AGAINST THE MAKER OF STATEMENT VIS-A-VIS A THIRD PARTY HAS NOT BEEN RECOGNISED BY THE REVENUE. THE STATEMENT OF THE MAK ER MAY POSSIBLY OPERATE AS ESTOPPEL AGAINST HIM IN CERTAIN CIRCUMSTANCES. HOWE VER, TRUTHFULNESS THEREOF IS REQUIRED TO BE PROVED BEYOND DOUBT FOR IT TO BIND A THIRD PARTY. THE DEPTT. WAS DUTY BOUND TO GIVE CROSS EXAMINATION OF THE MAKER W HERE IT SEEKS TO RELY UPON IT. FAILURE TO DO SO HAS RESULTED IN SERIOUS FLAW A ND HAS RENDERED THE ACTION A NULLITY AS RULED BY THE HONBLE SUPREME COURT IN TH E CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE(2015) 281 CTR 241(SC) . THE AO HAS FLOUTED THESE WELL SETTLED PRINCIPLES IN THIS CASE DESPITE A SPECIFIC DIRECTION FROM THE CIT(A). ON THE BASIS OF AN INCHOATE LOOSE PAPER & A NON SPEAKI NG STATEMENT UNDER S. 132(4) GIVEN BY SEARCHED PERSON, THE REVENUE HAS WRONGLY S OUGHT TO DRAW PRESUMPTION AGAINST THE ASSESSEE IN TERMS OF S. 292C & 132(4A) OF THE ACT WITHOUT ANY VINDICATION THEREOF. SUCH ACT IS DIRECTLY AT ODDS W ITH THE DECISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF DY. CIT VS. PRARTHANA CONSTRUCTION [TAX APPEAL NO. 79 OF 2000 JUDGMENT DATED 25/03/201 1] . BESIDES, THE ASSESSEE HAS ALSO PLACED THE AFFIDAVIT OF THE SEARCHED PERSO N ON RECORD TO THE EFFECT THAT NO SUCH CASH ON-MONEY WAS PAID TO THE APPELLANTS HE REIN. NO ENQUIRY WAS MADE IT(SS)A.NO.155 AND 156/AHD/2019 26 ON SUCH CATEGORICAL ASSERTIONS DESPITE SPECIFIC DIR ECTIONS BY THE CIT(A) TO THE AO. IN SUCH A SITUATION, WHERE NO ATTEMPT WAS MADE TO EXAMINE THE DEPONENT, THE SALUTARY EFFECT OF AFFIDAVIT CANNOT BE BELITTLE D. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. (1956) 30 ITR 181(SC) IS AN AUTHORITY IN THIS REGARD. AS PER THE RATIO OF JUDG MENT IN KRISHNA TEXTILES VS. CIT (2008)174 TAXMAN 372(GUJ.) , THE BURDEN WAS ON THE DEPARTMENT TO SUPPORT ITS ALLEGATION THAT THE CASH ON MONEY HAS BEEN RECEIVED BY THE APPELLANTS HEREIN. NO SUCH BURDEN WAS FOUND TO BE DISCHARGED OR SUCCES SFULLY SHIFTED ON THE ASSESSEE. THE ADDITION THUS MADE ON THE STRENGTH OF SUCH LOOSE PAPER OR STATEMENT OF A THIRD PARTY IS NOT SUSTAINABLE IN SU CH CIRCUMSTANCES. 15. WITHOUT PREJUDICE TO THE AFORESAID PRINCIPAL ST AND OF THE ASSESSEE THAT TESTIMONY OF A THIRD PARTY DOES NOT IMPLICATE THE A SSESSEE PER SE AND BEARS NO EVIDENTIARY VALUE IN THE ABSENCE OF ANY CROSS EXAMI NATION WITH WHICH WE HAVE ALREADY OPINED IN FAVOUR OF THE ASSESSEE, IT WOULD ALSO BE EXPEDIENT TO ADDRESS OURSELVES ON THE SECOND LIMB OF THE PLEA. IT IS CON TENDED ON BEHALF OF THE ASSESSEE THAT THE AGREEMENT TO SALE THE LAND WAS EX ECUTED IN THE FY 2013-14 RELEVANT TO AY 2014-15 AND THE CONSIDERATION FOR SA LE WAS ALSO PAID IN FY 2013-14. THE POSSESSION WAS ALSO GIVEN IN FY 2013-1 4 RELEVANT TO A.Y.2014- 15. ON THE FACE OF SUCH TELL TALE FACTS, THE UNACCO UNTED CONSIDERATION CANNOT BE SAID TO HAVE ACCRUED IN A PRECEDING ASSESSMENT YEAR FOR THE PURPOSE OF ITS TAXABILITY ON THE BASIS OF ASSUMPTIONS AND PRESUMPT IONS. THE CO-ORDINATE BENCHES OF THE TRIBUNAL HAVE HELD IN SO IN CHORUS I N D R CONSTRUCTION VS. ITO (ITA NO.. 2735/ AHD./2010) & RANADE DIGHE AND ASSOC IATES VS. ITO ( ITA NO. 466/PN/2010 ORDER DATED 26/08/2011. THUS WHEN TESTE D ON THE TOUCHSTONE OF YEAR OF TAXABILITY ALSO, THE ACTION OF THE AO IS UN FOUNDED. WE HOWEVER DO NOT SEEK TO DELINEATE ANY FURTHER AS THE WE SEE NO MERI TS IN ADDITIONS IN EITHER OF THE YEARS OWING TO FAILURE OF THE AO TO SHIFT ITS ONUS ON ASSESSEE. IT(SS)A.NO.155 AND 156/AHD/2019 27 16. THE APPEAL OF THE ASSESSEE IN ITA NO. 156/AHD/2 019 IS ALLOWED. IT(SS)A.NO.155/AHD/2019 (SHRI CHHOTALAL P. PATEL): 17. IN THIS APPEAL, THE ASSESSEE AS OTHER LAND OWNE R HAS SIMILARLY CHALLENGED ADDITION OF RS.71,93,176/-. AS DISCUSSED IN EARLI ER PARAS, THE FACTS AND ISSUES INVOLVED IN THE CAPTIONED APPEAL IS IDENTICAL TO TH E CASE OF SHRI KANTILAL P. PATEL. HENCE IN CONSONANCE WITH THE REASONS RECORDED IN IT A NO. 156/AHD/2019 RELATING TO KANTILAL P. PATEL, THE APPEAL OF THE AS SESSEE IS REQUIRED TO BE ALLOWED AND THE ADDITIONS OF PROPORTIONATE AMOUNT TOWARDS U NACCOUNTED CASH RECEIPTS REQUIRED TO BE QUASHED. 18. THE APPEAL OF THE ASSESSEE IN ITA NO. 155/AHD/2 019 IS ALLOWED. 19. IN THE COMBINED RESULT, APPEALS OF BOTH THE ASS ESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 8 TH DECEMBER, 2020 AT AHMEDABAD. S D / - (RAJPAL YADAV) VICE-PRESIDENT S D / - (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER AHMEDABAD; DATED 08/12/2020