Pitamber Ruchandani, Surat V. ACIT, Central Circle-3, Surat

ITSSA 19/SRT/2022

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0160 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-11-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 29-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Loose papers; Capital Gains
• Section: 131; 132; 139; 143(3); 142(1); 133A; 153A; 143(1); 143(2); 113; 48; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./IT(SS)A No.19/SRT/2022 Assessment Year: (2012-13) (Physical Hearing) Pitamber Ruchandani, 60, Narmad Nagar, Athwalines, Surat – 395007. Vs. The ACIT, Central Circle-3, Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAQPR4470F (Appellant) (Respondent) आयकर अपील सं./IT(SS)A No.39/SRT/2022 Assessment Year: (2012-13) The ACIT, Central Circle-3, Surat. Vs. Pitamber B. Ruchandani, 60, Narmad Nagar, Near Adarsh Society, Athwalines, Surat – 395007. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAQPR4470F (Appellant) (Respondent) Appellant by Shri Rasesh Shah, CA Respondent by Shri Ritesh Mishra, CIT(DR) Date of Hearing 06/11/2023 Date of Pronouncement 10/11/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned two cross appeals filed by the Assessee and Revenue, pertaining to same Assessment Year (AY) 2012-13, are directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “the ld. CIT(A)”], which in turn arise out of an assessment order passed by the Assessing Officer under section 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). Page | 2 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 2. Since, the issues involved in these cross appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in IT(SS)A No.39/SRT/2022, for assessment year (AY) 2012-13, have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the Revenue in ‘lead case’ in IT(SS)A No. 39/SRT/2022 for AY.2012-13, are as follows: “1) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition on account of undisclosed Long Term Capital Gain of Rs.2,55,59,500/- in respect of properties situated at Block No.70 & 71 to Rs. 1,14,25,000/- without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and "Rakkam Mallya ni Raseed" which clearly evidence receipt of on money to the extent of addition made by the assessing officer. 2) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the protective addition of Rs.8,57,26,000/- on account of receipt on money in respect of properties situated at Block No.68 & 69 to Rs.40,25,000/- being the brokerage income, without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and "Rakkam Mallya ni Raseed" which clearly evidence receipt of on money to the extent of addition made by the assessing officer. 3) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the protective addition of Rs.90,00,000/- on account of receipt of on money in respect of properties situated at Block No. 110 without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and “Rakkam Mallya ni Raseed" which clearly evidence receipt of on money on sale of the property in question. 4) In addition to and in alternative to grounds No.(2) and (3) above, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in giving relief to the assessee without ascertaining the status and fate of substantive additions made corresponding to the protective additions made by the Assessing Officer in respect of issues therein. 5) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the substantive addition of Rs.1,35,71,083/- Page | 3 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani and protective addition of Rs.36,24,917/- totaling to Rs. 1,71,96,000/- on account of Dalali income without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhats which contained the amount of consideration in respect of the properties situated in all 5 blocks and "Rakkam Mallya ni Raseed" which clearly showed the total consideration of the properties including the brokerage. 6) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition of Rs. 18,29,337/- as Long Term Capital Gain and Rs.38,11,410/-as Short Term Capital Gain totaling to Rs.56,40,747/- to Rs.43,28,804/- as Long Term Capital Gain ignoring the detailed findings given by the Assessing Officer after analyzing the clinching evidences found during the course of search proceedings. 7) In addition to and in alternative to the grounds No.(l), (2), (3), (4) (5) & (6) above, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting/restricting the additions made by the Assessing Officer without considering the provisions of section 292C of the Act and de hors provisions contained in the said section. 8) It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the assessing officer may be restored to the above terms. 9) The assessee craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal.” 4. Grounds of appeal raised by the assessee in IT(SS)A No.19/SRT/2022 are as follows: I. ADDITION AS UNDISCLOSED LONG TERM CAPITAL GAIN OF RS.1,14,25,000/-. 1. The Ld. CIT(A) erred in sustaining the addition amounting to Rs.1,14,25,000/- on account of undisclosed long term capital gain. 2. The assessee submits that the Ld. CIT(A) went with extraneous considerations while presuming and sustaining the receipt of on money on account of Saroli land, block no. 70 & 71 transaction by the assessee on the basis of assumptions and seized material, which does not carry any evidentiary value, although ignoring the 'sudharano satakhat' which was submitted during the proceeding and without details of payment received etc. 3. The assessee further submits that no addition can be made just on the basis of statement of third person accepting the on money, where the party of the transaction had denied to give or received any on money. Page | 4 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 4. On the facts and circumstances of the case and as per law, the addition is not justified and is required to be deleted. II. ADDITION AS DALALI INCOME OF RS. 40,25,000/- 1. The Ld. CIT(A) erred in making addition as dalali income of Rs. 40,25,000/-. 2. The Ld. CIT(A) erred in presuming the rough notings as dalali income of the assessee pertaining to Block No, 68 & 69, which does not even carry any evidenciary value and also assessee had no any connection related to the above mentioned land. Hence, the addition made is required to be deleted. 3. On the facts and circumstances of the case and as per law, the addition is not justified and is required to be deleted. III. ADDITION AS UNDISCLOSED LONG TERM CAPITAL GAIN OF RS.43,28,804/- 1. The CIT(A) erred in sustaining the addition as undisclosed long term capital gain of Rs. 43,28,804/-. 2. The assessee submits that the Ld. CIT(A) went with extraneous considerations while presuming and sustaining the receipt of on money on account of sale of land to Milestone Developers on the basis of assumptions and presumptions, although the assessee and other seller and purchaser have denied to have been accepted/paid any on-money. 3. The assessee further submits that there is no justification for considering the on money on the transactions in absence of any signed and notarised satakat. 4. On the facts and circumstances of the case and as per law, the addition is not justified and is required to be deleted. IV. MISCELLANEOUS: 1. The assessee craves leave to add, alter or vary any of the grounds of appeal.” 5. Ground No.1 raised by the Revenue and ground No.1 raised by the assessee are interconnected, therefore we adjudicate together. These grounds are reproduced below for ready reference: “Revenue ground No.1) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition on account of undisclosed Long Term Capital Gain of Rs.2,55,59,500/- in respect of properties situated at Block No.70 & 71 to Rs. 1,14,25,000/- without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and "Rakkam Mallya ni Raseed" which clearly evidence receipt of on money to the extent of addition made by the assessing officer. Page | 5 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani Assessee ground No.1). The Ld. CIT(A) erred in sustaining the addition amounting to Rs.1,14,25,000/- on account of undisclosed long term capital gain.” 6. The main grievance of the Revenue in ground No.1 is that ld CIT(A) erred in restricting the addition, on account of undisclosed Long Term Capital Gain, from Rs.2,55,59,500/- to Rs.1,14,25,000/-. However, the grievance of the assessee in ground No.1 is that addition sustained by the ld. CIT(A) to the tune of Rs.1,14,25,000/- should also be deleted. 7. Brief facts of the issue in dispute are stated as under: The assessee before us is an Individual and filed his return of income u/s 139 of the Act, for assessment year (A.Y.) 2012-13 on 29.12.2012, declaring total income at Rs.91,10,440/-, which was processed by the Department u/s 143(1) of the Act. Thereafter, a search action u/s 132 of the Income-Tax Act, 1961, was carried out on dated 05.03.2013, in the case of Diamond Group of Surat. One of the sub-groups covered during the course of this search- action, was the Ruchandani Sub-Group. Shri Pitamber Bhagwandas Ruchandani is one of the cases of Ruchandani Sub- Group, who was also covered u/s 132 of the Income Tax Act. Consequent to the search-action, notice u/s 153A of the Act was issued to the assessee for various assessment years on dated 28.10.2013. In response to the notice u/s 153A, the assessee has filed his return of income for the A.Y. 2012-13 on 26.03.2014, declaring total income of Rs.1,16,10,440/-. The notice u/s 143(2) of the Act issued on dated 31.03.2014, which was served upon the assessee. The notice u/s 142(1) of the Act, along with questionnaire was issued on dated 03.09.2014, which was duly served on the assessee. In response to notices u/s 143(2) and 142(1) of the Act, the assessee attended from time to time and filed the details called for. Page | 6 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 8. During the assessment proceedings, the assessing officer noted that assessee earned the income from transaction of land Block nos.70 & 71, at Saroli. According to the assessing officer, the assessee and his brothers were engaged in buying and selling of lands. The principal person who handled these land transactions was the assessee along with Mr. Vasudev Goplani. In the impugned assessment year, there have been incriminating materials found during the course of search, relating to Block nos. 110, 68, 69, 70 & 71 at Saroli. Out of these 5 Blocks, the assessee owned 2 Blocks viz: Block no. 70 & 71. The other 3 Blocks were owned by other parties who were not even assessee's family members. The incriminating material found shows that the assessee and his brothers dealt in all 5 Blocks though only 2 were owned out of them by the assessee. The assessing officer has referred to the page no.102 and 103 of annexure A-l and page no.22 and 23 of annexure A-l, found from the residential premises of the assessee's brothers respectively. As per these papers found, which are reproduced on page no.4 & 5 of the assessment order ; all these 5 Blocks in question would be sold by the assessee and his family members, for a total consideration of Rs.21.65 Crores and 50% of said sum are owned by Ruchandani family (assessee`s family) and hence., are eligible to get Rs. 10,82,50,000/-. It was further mentioned that Rs.5,57,00,000/- was already received and divided among the members of Ruchandani family including the assessee. A part of this amount also was shared with the owner of Block no, 110. 9. The assessing officer came to the conclusion that the amount of Rs.21.65 Crores mentioned in the “Rakarn maiayani raseed” is the cash component of the transactions and the cheque-component was separate and in addition to the cash component. The assessing officer reached this conclusion on the basis of statement recorded u/s 131 of the Act of Shri Kanaiyalal Ruchandani and Radhakishan Ruchandani, on 31.05.2013 and Page | 7 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 30.05.2013 respectively. Accordingly, the assessing officer held that the total sale consideration of all 5 Blocks was Rs.29 Crores out of which Rs.21.65 Crores was the cash component. On page no. 9 & 10 of the assessment order, the assessing officer has given the details of satakhat of these 5 Blocks and the registered sale consideration. Finally, the assessing officer held that the sale deed consideration for these 5 Blocks was Rs.8,88,06,000/- and cash consideration was Rs.19,93,04,000/- + brokerage (dalali) of Rs.1,71,96,000/- totaling to total cash consideration of Rs.21.65 crores. During the assessment proceedings, the assessee submitted before the assessing officer that, all 5 Blocks of land do not belong to him or his family members and hence, the receipt of on-money relating to the Blocks which are not owned by him cannot be taxed in his hands. He further stated that the purchasers of the land Mr. Ramesh D. Patel and Mr. Babubhai Kavadiya in their statements u/s 131 of the Act; have denied payment of on-money relating to the land in question. The assessee also submitted that the amount mentioned on “Rakam Malayani Raseed” is the total consideration (Kulle kimmat) and not only the cash component as mentioned by the assessing officer in the show cause notice. The assessee further argued that if the said consideration is considered in addition to the recorded consideration, the rate per Vingha would come to Rs.1.2 Crore which was never the rate of land at that point of time. It was further submitted before the assessing officer, that the statements of Mr. Kanaiyalal Ruchandani and Radhakishan Ruchandani, do not have any evidential value, as they were not the party of the deal. There was a new satakhat which shows the consideration same as recorded consideration in the sale deed. The assessing officer, on page 18 of the assessment order, has given the details of sale, name of purchasers, the rate per sq. mtr and sale consideration relating to Block no. 70 & 71. Page | 8 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 10. The assessing officer has deliberated on this issue in quite detail in the assessment order from page 3 to page 58. In conclusion, the assessing officer observed that for Block no. 70 & 71, the total cash consideration received by Shri Pitamber Ruchandani from sale of Block no 70 & 71 is Rs.6,67,78,000/-. Further, out of this amount, Shri Radhakishan Ruchandani has accepted Rs.1,25,56,250/- and Shri Kanihayalal Ruchandani has accepted Rs.1,17,00,000/-,as ‘on money’ in their hand. Further, from loose papers ‘on money’ works in hands of Smt. Minu A. Ruchandani of Rs.1,16,87,500/-. Thus, remaining amount of Rs.3,08,34,500/- is the undisclosed capital gain in the hands of Assessee. The assessing officer noted that the year in which Assessee has received the ‘on money’ is proved from the distribution of ‘on money’ in hands of family, and it can be seen that Shri Pitamber Ruchandani has received the Rs.52,75,000/- in the A. Y. 2011-12. Also, it is important to note here that Shri Radhakishan Ruchandani has made disclosure of Rs.48,31,250/- for A.Y. 2011-12. But above page clearly shows that Assessee has received amount of Rs.52,75,000/- in A.Y. 2011-12. Further, considering the payment details as per satakhat, the assessing officer observed that the Assessee has received remaining amount of Rs.2,55,59,500/- in A.Y. 2012- 13, therefore, assessing officer made the addition of Rs.2,55,59,500/- in A.Y.2012-13. 11. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has partly deleted the addition made by the Assessing Officer. The ld CIT(A) observed that Mr. Radhakishan Ruchandani and Mr. Kanaiyalal Ruchandani (the brothers of the assessee) have admitted the undisclosed income from the same land, transactions. However, the assessee and Mrs. Monika Ruchandani (Legal Heir of Mr. Arjun Ruchandani) have not admitted the undisclosed income Page | 9 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani from the said land transaction. The fact that two brothers out of 4 have accepted the receipts of the amounts in cash is corroborated with the seized material found and confirms that there was cash component in the land transactions which was shared by the assessee and his 3 brothers. As per the evidences in the seized material, the assessee received total amount of Rs.1,14,25,000/-. As the assessee was the owner of Block no. 70 & 71, the assessing officer has brought to tax the said amount received in cash as undisclosed Long Term Capital Gain. Accordingly, the addition on account of undisclosed Long Term Capitan Gain to the extent of Rs.1,14,25,000/- was sustained by ld CIT(A). 12. Aggrieved by the order of ld. CIT(A), the assessee as well as revenue are in appeal before us. 13. Learned CIT-DR for the Revenue, argued that the addition was made by the assessing officer based upon evidences in form of material seized during the course of search. The impugned documents viz. 'Satakhat' and 'Rakam Malya ni Raseed' are corroborated with each other. Further, the fact cannot be denied that Shri Pareeshbhai G. Patel, son and legal heir of Late Shri Ganpatbhai R. Patel, who was one of the seller parties of the land in question, has categorically admitted in the statement dated 04.06.2013 recorded u/s 131 of the Act that the Satakhat was entered into between Shri Pitamber B. Ruchandani and others with his father i.e. Shri Ganpatbhai R. Patel & others. Besides, the assessee`s arguments to the effect that original satakhat was cancelled and another satakhat has been made, should not be believed. 14. On the other hand, Shri Rasesh Shah, Ld. Counsel for the assessee relied on the submission made during the appellate proceedings and stated that addition was made based on surmise and conjecture. There is no Page | 10 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani evidence with the Department that assessee has received ‘on-money’. The ld Counsel pointed out that the amended Satakhat was executed in respect of Block No 70 and 71 afterwards on 27.05.2011, fixing the consideration at Rs.47,55,000/- per Bingha as against Rs.73,00,000/- per Bingha, as the original Satakhat was not implemented, as no consideration was received. Further, the gas line and the H.T. line were passing through the land and therefore, the consideration was reduced and therefore amended Satakhat was executed. 15. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. In our considered view, it was wholly erroneous on the part of the authorities below to determine the ‘on-money’ based on original Satakhat, when particularly the assessee has produced amended Satakhat, and both the parties have agreed as per amended Satakhat, and only the amended Satakhat was executed in respect of Block No 70 and 71 afterwards on 27.05.2011. We note that no any evidence was found either from the assessee or from any other place that the assessee has in fact received any amount in cash on the sale of the impugned blocks of land as reflected at page No 110 / 113 of Annexure A-1. The declaration made by the Radhakishan Ruchandani and Kanaiyalal Ruchandani has no relevance as they made the declaration on the basis of incriminating material found in their hands. Further they have not made the declaration of the amount to be received as per the receipt at Page No 102/103 of Annexure A-1. Further the amount mentioned at Page No 110 / 113 of Annexure A-1, as received by the parties, were not correlated with the amount mentioned, as received by the parties at Page No 102 / 103 of Annexure A-1. This can be explained with help of the following table. Name of the Party Amount as per Page Amount as per Page No Page | 11 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani No 110 / 113 of Annexure A-1 Rs. 102 / 103 of Annexure A- 3 Rs. Pitambar Ruchandani (PBR) 1,16,87,501 1,07,83,333 Arjunbhai Ruchandani (ABR) (Late Husband of Monica Ruchandani) 1,16,87,501 1,07,83,333 Kanaiyalal Ruchandani (KBR) 1,16,87,501 1,07,83,333 Radhakishan Ruchandani (RBR) 1,06,37,500 83,50,000 Therefore, ld Counsel stated that the assessee disclosed more capital gain than the amount of addition made in his case and his brother’s wife, Monica Ruchandani. It cannot be said that the amount mentioned in Satakhat or other papers, are in respect of the ‘on money’ only involved in the cash transaction. The assessee had also disclosed more capital gain on the sale of both the land at Block No 70 and 71, than Radhakishan Ruchandani and Kanaiyalal Ruchandani, when there is an allegation that the shares of all the brothers are the same. On Page No 110 of Annexure A-1, the amount of Rs.1,16,87,501/- is reflected against PBR (Pitambar Ruchandani) and Rs.1,16,87,501/- is reflected against ABR (Arjunbhai Ruchandani i.e. the assessee’s brother and husband of Monica Ruchandani). So total amount of Rs. 2,33,75,002/- is reflected against assessee and his brother’s wife Monica Ruchandani. Even assuming that this is the half amount, the total amount comes to Rs.4,67,50,004/-. It is to be noted that there is no evidence that the assessee or his brother’s wife Monica Ruchandani received any cash and if any amount is received in cash by the assessee’s brothers Radhakishan Ruhcandani and Kanaiyalal Ruchandani, on assessee’s behalf, who signed the receipt, they should have returned the amount to the purchasers, as the total amount cannot exceed the amount reflected in the receipt. The assessee has declared capital gain of Rs.4,35,04,000/- in the return of income for A.Y. 2013-14, in addition to Page | 12 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani the disclosure of Rs.1,00,00,000/-. It is to be noted that there is no evidence that the assessee or assessee’s brother’s wife Monica Ruchandani, received any amount in cash as per seized papers recovered from the assessee. 16. Regarding the Receipt (Page No 102 and 103) of Annexure A-1, found from the residence of the assessee, the ld Counsel pointed out that this receipt is undated, nor signed by the payer or the witnesses. This receipt is signed by only two persons viz. Radhakishan Ruchandani and Kanaiyalal Ruchandani. So, this receipt does not carry any evidentiary value. Even otherwise, as per this receipt, the assessee and his bother’s wife Monica Ruchandani, was to receive Rs.1,07,80,333/- each. Accordingly, both have received Rs.2,15,60,666/-as per this receipt. Assuming that they were to receive a further sum of Rs.2,15,60,666/-, the total amount receivable comes to Rs.4,31,21,332/-. As against this, the assessee sold the land at Block No 70 at Rs.2,00,32,000/- and Bock No 71 at Rs.2,34,72,000/- totalling to Rs.4,35,04,000/-. So, the consideration received by the assessee, vide registered sale deed dated 18.06.2012, broadly matches with the amounts mentioned in the Receipt (Rakam Malya Ni Raseed) of Rs.4,31,21,332/-. Even if it is assumed that Radhakishan Ruchandani and Kanaiyalal Ruchandani has received cash earlier, before the registration of the sale deeds, the cash had to be returned as per the receipt, by them, as the assessee and his brother’s wife were to receive Rs.4,31,21,332/- only. In any case, this evidence cannot be the basis for making the addition as the receipt was not signed by the assessee or even the seller or the witnesses. 17. Regarding the doctrine of presumption raised as per section 132(4) and section 292C of the Act, it is submitted by ld Counsel that the assessee has rebutted the presumption as per the above submission. As per section Page | 13 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 132(4A) and section 292C, the papers recovered in course of the search has to be presumed to be true. It is submitted that as per the receipt at Page No 102 /103 of Annexure A-1, the assessee did not receive any amount as he did not sign the receipt. No evidence was found in course of search that the assessee received more consideration in cash than disclosed in the sale deed. In the course of search, cash of Rs.1,03,80,000/- was found from the assessee’s possession. As against this, assessee made disclosure of Rs.1,50,00,000/- in the return of income, filed after the date of search (i.e. Rs.25,00,000/- for A.Y. 2011-12, Rs.25,00,000/- for A.Y. 2012-13 and Rs.1,00,00,000/- for A.Y. 2013-14). As per ld Counsel, no purchaser or seller has accepted any receipt / payment of any ‘on money’ in respect of any blocks of the land. The Assessing Officer only alleged that the seller of the land of Block No 110 has accepted the receipt of ‘on money’. In fact, Shri Paresh Patel, is the son of Ganpatbhai Patel who is one of the co- owners of the land at Block No 110, who has given the statement. So, it cannot be said that the seller has accepted the receipt of ‘on money’. Further, the land was ultimately sold to Rasilaben G. Sutaria and not to Shri Radhakishan B. Ruchandani and others. Even otherwise, when the seller has accepted the receipt of ‘on money’, how can the assessee receive the further ‘on money’? There is no evidence that the seller of Block No 110 has given any payment to the assessee out of the ‘on money’ received by him. In support of the above contentions, ths ld Counsel placed reliance on the under mentioned decisions.  K.P. Varghese vs. ITO [7 Taxman 13 (SC)]  Common Cause (A Registered Society) vs. UOI [(2017) 394 ITR 220 (SC)]  CIT vs. P.V. Kalyanasundaram [(2007) 294 ITR 49 (SC)]  Umacharan Shaw & Bros vs. CIT [(1973) 37 ITR 271 (SC)]  Lalchand BhagatAmbica Ram vs. CIT [(1959) 37 ITR 288 (SC)]  Dhakeswari Cotton Mills Ltd. vs. CIT [(1954) 26 ITR 775 (SC)]  CIT vs. Maulikkumar K. Shah [307 ITR 137 (Guj. HC)] Page | 14 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani  PCIT vs. Shaileshkumar Rameshchandra Shah [R/Tax Appeal No 871 of 2019 (Guj. HC)  CIT vs. Lavanya Land (P) Ltd. [(2017) 83 taxmann.com 161 (Bom. HC)  ACIT vs. Lata Mangeshkar [(1974) 97 ITR 696 (Bom. HC)  CIT vs. S.M. Aggarwal [162 Taxman 3 (Del HC)]  CIT vs. Praveen Juneja [ITA No 56/2017 (Del. HC)]  CIT vs. Vineeta Gupta [46 taxmann.com 439 (Del. HC)]  CIT vs. AKME Projects Ltd. [42 taxmann.com 379 (Del. HC)]  CIT vs. Gian Gupta [224 Taxman 172 (Del HC)]  Rajvee Tractors (P) (Ltd.) vs. ACIT [143 taxmann.com 330 (Ahbd. Trib) 18. Without prejudice to above submission, the ld Counsel argued that the learned CIT(Appeals) confirmed the addition of Rs. 1,14,25,000/- on receipt of sale of impugned land bearing Block Nos. 70 and 71. However, it is submitted that the sale deed was executed on 18.06.2012, which was falling in A.Y. 2013-14 and so, the amount becomes taxable in A.Y. 2013- 14, in view of the decisions of the jurisdictional Gujarat High Court in case of CIT vs. Ashaland Corporation [133 ITR 0055] wherein, it held that “the transaction of sale of land becomes complete only on passing of the title which takes place only when the registered sale deed is executed. Mere receipt of earnest money and advance receipt of money towards transaction, would not, by itself, partake the character of taxable income as the registered sale deed was executed only in the subsequent year”. Reliance is further placed on the decision of the Mumbai Tribunal in the case of Magnates Enterprises vs. ACIT [ITA No 1987 to 1989/Mum/2022] wherein it was held that “On money income is assessable in the year in which the sale of concerned property is declared”. The income is chargeable to tax in the year in which the registered document is executed. So, in any case, the addition confirmed by the CIT(Appeals) is to be deleted as the apparent consideration received over the actual consideration can be taxed in that year when the document was registered.We note that there are three components of a taxing statute, viz., subject of the tax, Page | 15 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani person liable to pay the tax and the rate at which the tax is levied (State of Kerala v. Alex George (2005) 1 SCC 299 p. 306). If there be any real ambiguity in respect of any of these components which is not removable by reasonable construction, there would be no tax in law till the defect is removed by the legislature (Mathuram Agarwal v. State of Madhya Pradesh AIR 2000 SC 109).In terms of Article 265 all acts relating to the imposition of tax providing, inter alia for the point at which the tax is to be collected, the rate of tax as also the recovery must be carried out in accordance with law (Corporation Bank v. Saraswati Abharansala (2009) 1 SCC 540 15). If a tax has been paid in excess of the tax specified, save and except the cases involving the principle of ‘unjust enrichment’, the excess tax realized must be refunded. The Hon’ble Supreme Court in ITO vs. CH. Atchaiah (1996) 218 ITR 239 (SC) has held that the income should be assessed on the right person, right year and it should be on the right income. Considering the facts and circumstances, narrated above, we dismiss ground No.1 raised by the Revenue and allow ground No.1 raised by the assessee. 19. Ground No.1 raised by the Revenue (in IT(SS)A No. 39/SRT/2022) is dismissed, whereas ground No.1 raised by the assessee in IT(SS)A No.19/SRT/2022 is allowed. 20. Ground No.2 raised by the Revenue and Ground No.2 raised by the Assessee are also interconnected, which are reproduced below for ready reference: “Revenue ground No.2) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the protective addition of Rs.8,57,26,000/- on account of receipt on money in respect of properties situated at Block No.68 & 69 to Rs.40,25,000/- being the brokerage income, without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and "Rakkam Mallya ni Raseed" which Page | 16 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani clearly evidence receipt of on money to the extent of addition made by the assessing officer. Assessee`s ground No.2) 1. The Ld. CIT(A) erred in making addition as dalali income of Rs. 40,25,000/-.” 21. Brief facts qua the issue are that ground no.2 raised by the Revenue is relating to protective addition of Rs.8,57,26,000/- as income from other sources. This addition pertains to Block no. 68 & 69 and these Blocks are part of 5 Blocks of land which were dealt by the assessee as an owner and as broker. According to the assessing officer, as per the ‘Rakam Malayani Raseed’ the total consideration for the 5 Blocks was Rs.21.65 Crores and the satakhat for Block no. 68 & 69, which was found in the office premises of Vasueiev Goplani, showed the sale consideration, as Rs.8,57,26,000/-. These two Blocks were owned by Mr. Ramesh D. Patel but were dealt by the assessee and were ultimately sold to Mr. Rajesh B. Kevadia and Dhirajlal Madhavjibhai (Block 58) and Shri Sanjay B. Kevadia Dhirajlal Madhavjibhai (Block 69). During the post search proceedings, the DDIT examined Mr. Ramesh D. Patel. In his statement Mr. Ramesh D. Patel did not accept that he received the said cash amount of Rs.8,57,26,000/-. During appellate proceedings, the assessee submitted that the DDIT had examined even the purchasers in the satakhat, Mr. Babubhai Kavadia and Jignesh Sutaria, who too denied having paid any cash component in the transaction for purchase of Block no. 68 & 69. The assessing officer made protective addition of Rs.8,57,26,000/- as income from other sources. 22. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has partly deleted the addition, observing as follows: “6.2 I have gone through the assessment order and the submissions of the AR of the assessee. The assessing officer has made this protective addition of Rs. 8,57,26,000/- on the basis of satakhat found in the premises of Mr. Vasudev Goplani, Advocate. As such the assessee was not the owner of Block no. 68 & Page | 17 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 69 but there are evidences to prove that the assessee acted as a broker in the transaction. The satakhat of Block no. 68 & 69 which were owned by Mr. Ramesh D. Patel were agreed to be sold to three co-owners namely, Mrs. Rasilaben Sutaria, Mr. Babubhai Kevadia and Mr. Jignesh Sutaria. Ultimately the land was sold by Mr. Rarnesh D. Patel to Mr. Rajesh B. Kevadia and Dhirajlal Madhavjibhai (Block 68) and Shri Sanjay B. Knvadia Dhirajlal Madhavjibhai (Block (49). Thus, the assessee was not appearing as purchaser in satakhat and ultimately also did not purchase the said blocks. Hence, one cannot conclude that the assessee received the cost component for the blocks that too merely because Mr. Ramesh D. Patel did not accept that he received any cash in the transaction. Thus, other than this transaction having a mention in Rakam Maiayain Raseed and in satakhat, there is no evidence of the assessee or any of his family members receiving any amount out of the cash component. But at the same time there is a mention of brokerage income received by the assessee on the transaction in question which is available on page 87 of Annexure-A1, which is reproduced by the assessing officer on page 48 of the assessment order. On the said page there is a Dalaii income (Brokerage) earned by the assessee of Rs.40,25,000/- and that earned by Mr. Vasudev Gopiani Rs.10,75,000/-. On the same page, there are transactions of Block 68 & 69 and hence, it can be reasonably be presumed that the said Dalali income is pertaining to Block 68 & 69. Therefore, out of the protective addition made by the assessing officer of Rs.8,57,26,000/-, Rs.40,25,000/-is sustained on substantive basis and balance protective addition of Rs.8,17,01,000/- stands deleted. Ground no. 2 is treated to have been Partly allowed.” 23. Aggrieved by the order of ld. CIT(A), the Revenue as well as assessee both are in appeal before us. 24. The ld. DR for the Revenue submitted that it is general trend in Surat that in ‘Satakhat’ always actual amounts are incorporated, which include accounted as well as unaccounted consisting the cash components as well. Further, as when, the deal comes to the end, the final deed gets executed and the Satakhat gets cancelled. In this case, also same pattern has been followed, therefore addition made by the assessing officer may be upheld. 25. On the other hand, Shri Rasesh Shah, Ld. Counsel for the assessee relied on the findings of ld CIT(A). The ld Counsel further stated that Rs.40,25,000/-, brokerage (dalali) income sustained by CIT(A) is very higher side. The actual brokerage (dalali) income earned by the assessee is Page | 18 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani to the tune of Rs.15,00,000/- only. Therefore, a reasonable amount on account brokerage (dalali) income may be sustained. 26. We have heard both the parties. We note that name of assessee was nowhere appearing, as a purchaser in the Satakhat and ultimately also, did not purchase the said lands of block Nos. 68 and 69. Hence, it cannot be concluded that the assessee had received the cash component for the lands and that too merely because Shri Ramesh D. Patel did not accept that he had received any cash in the transaction. Therefore, other than this transaction having a mention in “Rakam Malya Ni Raseed” and in the Satakhat, there is no evidence of the assessee or any of his family members receiving any amount out of the cash component pertaining to Block No. 68 and 69. The learned CIT(Appeals) held that there is mention of brokerage income received by the assessee on the transaction in question as per Page no 87 of Annexure A-1 which is reproduced by the Assessing Officer on Page No 48 of the assessment order. On the said page, there is a Dalali Income (Brokerage) earned by the assessee of Rs.40,25,000/- and that earned by Shri Vasudev Goplani was Rs.10,75,000/-. On the same page, there were transactions of Block No. 68 and 69 and hence, the CIT(Appeals) presumed that the said Dalali income was pertaining to Block No 68 and 69. Therefore, the learned CIT(Appeals) sustained the addition of Rs.40,25,000/- and deleted the balance protective addition of Rs.8,17,01,000/-. Against the finding of the CIT(Appeals), it is submitted by ld Counsel that the amount of Rs. 40,25,000/- was sum total of (30/0, 7/50 and 2/75) as dalali income on this paper. The learned CIT(Appeals) decoded this figure at Rs. 40,25,000/- which is very exorbitant, as he added three “zeros” to the figure of 40/25. The Page No 87 is a dumb document, as there are no details available on this page particularly when only amount of Rs.40/25 was mentioned which was decoded at Rs.40,25,000/- by the Page | 19 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani CIT(Appeals). Even otherwise the assessee declared Rs.25,00,000/- in the return of income for A.Y. 2012-13 filed by the assessee after the date of search in response to notice u/s 153A of the Act. So, it is submitted by ld Counsel that the estimate made by the CIT(Appeals), on account of brokerage income, is very much on the higher side and the addition cannot be made in excess of Rs. 25,00,000/-, particularly when assessee declared Rs. 1.50 crores in toto from A.Y. 2011-12 to 2013-14. Any estimate of dalali income is required to be telescoped against the declaration of the assessee. However, ld DR relied on the findings of ld CIT(A). We find merit in the submission of ld Counsel, as noted above, and therefore, to meet the end of justice, we reduce to dalali income to Rs. 20,00,000/-. The assessing officer therefore directed to tax the brokerage ( dalali income) at Rs. 20,00,000/- in the hands of the assessee. Therefore, ground no.2 raised by the assessee is partly allowed. 27. In the result, ground No. 2 raised by the Revenue is dismissed whereas ground No.2 raised by the assessee is partly allowed. 28. Ground no.3 raised by the Revenue is reproduced below for ready reference: “3) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the protective addition of Rs.90,00,000/- on account of receipt of on money in respect of properties situated at Block No. 110 without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhat and “Rakkam Mallya ni Raseed" which clearly evidence receipt of on money on sale of the property in question.” 29. Brief facts qua ground No. 3 raised by the Revenue, is that the said raised by the Revenue relates to protective addition of Rs.90,00,000/-, as income from other sources. This addition pertains to Block no. 110 and this Block is part of 5 Blocks of land which were dealt by the assessee as an owner and as broker in above para of this order. According to the Page | 20 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani assessing officer, as per the ‘Rakam Malayani Raseed’ the total consideration for the 5 Blocks was Rs.21.65 Crores and the satakhat for Block no. 110, which was found in the residence of the assessee showed the sale consideration at Rs.4,58,00,000/-. This Block was owned by Mr. Ganpatbhai Patel but was dealt by the assessee, and was ultimately sold to Mrs. Rasilaben Suratia. During the post search proceedings, the DDIT examined Mr. Paresh Patel son of Mr. Ganpatbhai Patel. In his statement Mr. Paresh Patel accepted that his father Mr. Ganpatbhai Patel received the cash amount of Rs.3,78,00,000/-. Accordingly, the assessing officer added the balance amount of Rs.90,00,000/- on protective basis in the hands of assessee. 30. On appeal, ld CIT(A) deleted the addition, observing as follows: “7.3 I have gone through the assessment order and the submissions of the AR of the assessee. The assessing officer has made this protective addition of Rs.90,00,000/- on the basis of the statement of the seller of Block no. 110 that he received Rs.3,78,00,000/- out of the total amount of Rs.4,68,00,000/- which was mentioned against Block no. 110 in the Rakam Malayani Raseed. The satakhat of Block no. 110 which was owned by Mr. Ganpatbhai Patel was agreed to be sold to four co-owners namely, the assessee, Mr. Radhakishan Ruchandani, Mrs Monikaben Ruchandani & Mr. Knnaiyalal Ruchandani. Ultimately the land was sold by Mr. Ganpatbhai Patel to Mrs. Rasilaben Sutaria. Thus, the assessee along with his three family members was appearing as purchaser in satakhat and ultimately the land was sold to Mrs. Rasilaben Sutaria after cancellation of the said satakhat with the assessee and his family members. Thus other than this transaction having a mention in Rakam Malayain Raseed and in satakhat, thero is no evidence of the assessee or any of his family members receiving any amount out of the cash component. Accordingly, the protective addition made by the assessing officer of Rs.90,00,000/- stands deleted. Ground no. 3 is treated to have been allowed.” 31. Aggrieved by the order of ld. CIT(A), the assessee as well as revenue both are in appeal before us. The ld. DR for the Revenue, argued that it is general trend in Surat that in Satakhat always actual amounts are incorporated which include accounted as well as unaccounted consisting the cash components as well. Further, as when, the deal comes to the end, Page | 21 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani the final deed gets executed and the Satakhat gets cancelled. In this case, also same pattern has been followed by the assessee. That is, the reason, why the amounts are appearing in Satakhat and Rakam Malyani Raseed. Therefore, Ld DR contended that addition made by the assessing officer may be confirmed. On the other hand, Ld. Counsel for the assessee relied on the findings of ld CIT(A) and stated that ld CIT(A) has passed reasoned and speaking order, on this issue, therefore the same may be upheld. 32. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. We note that the Satakhat of Block No 110, which was owned by Mr. Ganpat Patel, was agreed to be sold to four co-owners viz. the assessee, Shri Radhakishan Ruchandani, Shri Kanaiyalal Ruchandani and Monica Ruchandani. However, the said Satakhat between Shri Ganpatbahi Patel and the assessee and his brothers was cancelled and the land was ultimately sold by Shri Ganpat Patel to Mrs. Rasilaben Sutaria. Thus, there is no evidence that the assessee or any of his brothers had received any amount out of the cash component. The ld.CIT(A) deleted the addition by giving his findings at Para 7.3 of the appellate order on the above lines. It was also submitted by ld Counsel that even otherwise the assessee and his brother’s wife Monica Ruchandani were to receive Rs.4,31,21,332/- for all the lands which broadly tallies with the consideration of Rs.4,35,04,000/- as per the registered sale deeds dated 18.06.2012 in respect of block no. 70 and 71 therefore, we note that there is no infirmity in the order of ld CIT(A), hence we confirm the findings of ld CIT(A) and dismiss the ground No.3 raised by the revenue. 33. Ground No.4 raised by the Revenue is reproduced below for ready reference as follows: “4) In addition to and in alternative to grounds No.(2) and (3) above, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has Page | 22 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani erred in giving relief to the assessee without ascertaining the status and fate of substantive additions made corresponding to the protective additions made by the Assessing Officer in respect of issues therein.” 34. This ground no.4 raised by the Revenue is alternative grounds which, has been adjudicated in detailed by us along with grounds Nos.(2) and (3), hence does not require specific adjudication. 35. Ground No.5 raised by the Revenue is reproduced below for ready reference as follows: “5) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the substantive addition of Rs.1,35,71,083/- and protective addition of Rs.36,24,917/- totaling to Rs. 1,71,96,000/- on account of Dalali income without considering the fact that the addition was made on the basis of incriminating documents found and seized during the course of search proceedings, especially the ‘Satakhats’ which contained the amount of consideration in respect of the properties situated in all 5 blocks and "Rakkam Mallya ni Raseed" which clearly showed the total consideration of the properties including the brokerage.” 36. The above ground No.5 of Revenue relates, to Dalali income brought to tax by the assessing officer amounting to Rs.1,71,96,000/-. The assessing officer has dealt on this issue on page no.68 to 71 of the assessment order. In his findings, the assessing officer has taken the figure of Rs.21.65 crore as the total consideration as per Rakam Malayani Raseed. Thereafter, from the satakhats found of the 5 Blocks in question, the assessing officer arrived at total consideration as per satakhat at Rs.19,93,04,000/-. Hence, the difference between the two figures i.e. Rs.1,71,96,000/-, was treated as the Dalali income of the appellant (Rs.21,65,00,000 - 19,93,04,000) and assessing officer made the addition in the hands of the assessee. 37. On appeal, ld CIT(A) deleted the addition observing as follows: “In deciding first three grounds in this order I have already dealt on all the three transactions of 5 Blocks of land and on the basis of evidences found from the seized material, I have even confirmed the Dalali income of Rs.40,25,000/- Page | 23 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani in ground no.2 above. There is no evidence to prove the appellant further got the Dalali income of Rs.1,71,96,000/- which is estimated by the assessing officer. As the addition made by the assessing officer relating to Dalali income is not supported by concrete evidences other than finding the balancing figure, the said addition of Rs.1,35,71,083/- made on substantive basis and Rs.36,24,917/- made on protective basis totalling to Rs.1,71,96,000/- stands deleted. Ground no.4 is allowed.” 38. We have heard both the parties. The ld DR relied on the findings of the assessing officer whereas ld Counsel relied on the order of ld CIT(A). 39. The Assessing Officer has considered the figure of Rs. 21,65,00,000/-, as the total consideration received / receivable by the assessee and his family members as per the Receipt (Rakam Malyani Raseed) as per Page No 102/103 of Annexure A-1. Thereafter, from the Satakhats found of the 5 blocks of land, the Assessing Officer arrived at a total consideration of Rs. 19,93,04,000/-, as per the Satakhat. Hence, the Assessing Officer treated the difference amount of Rs. 1,71,96,000/- (Rs. 21,65,00,000 – Rs. 19,93,04,000) as dalali income of the assessee as per his findings at Page No 60 to 71 of the order. We note that learned CIT(Appeals) held that since he (ld. CIT-A), has already confirmed the addition of Rs. 40,25,000/- separately, as dalali income. He further held that there was no concrete evidence to prove that the assessee had received further dalali of Rs.1,71,96,000/-, which was estimated by the Assessing Officer. Accordingly, ld CIT(A) deleted the addition made by the Assessing Officer as per his finding given at Para 8.1 of the order. On a careful reading of the Ld.CIT(A) order and the findings thereon, we do not find any valid reason to interfere with the decision and findings of the Ld.CIT(A), therefore, we dismiss ground no.5 raised by the Revenue. 40. Ground no.6 raised by the Revenue is reproduced below for ready reference as follows: Revenue`s Ground No.“6) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the addition of Rs. Page | 24 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 18,29,337/- as Long Term Capital Gain and Rs.38,11,410/-as Short Term Capital Gain totaling to Rs.56,40,747/- to Rs.43,28,804/- as Long Term Capital Gain ignoring the detailed findings given by the Assessing Officer after analyzing the clinching evidences found during the course of search proceedings.” Assessee`s ground no.3:The CIT(A) erred in sustaining the addition as undisclosed long term capital gain of Rs. 43,28,804/-.” 41. Ground No.6 raised by the Revenue and ground No.3 raised by the Assessee, are interconnected, which relate to Long Term- Capital Gain of Rs.18,29,337/- and Short -Term Capital Gain to the tune of Rs.38,11,410/-. 42. Brief facts qua the issue are that Ground no.6 raised by the Revenue and Ground No.3 raised by the Assessee, are relating to undisclosed Long Term and Short Capital Gain. In the assessment order, the assessing officer has brought to tax Rs.18,29,337/- as Long Term Capital Gain (LTCG) and Rs.38,11,410/- as Short Term Capital Gain (STCG), totaling to Rs.56,40,747/-. all these grounds are on the same issue with reference to transfer of R.S. no 11, Sultanabad land. According to the assessing officer, the assessee along with his three family members viz. Radhakishan, Kanaiyalal, Monika and Mr. Vasudev Goplani and Mrs, Pushpa Goplani sold 9000 sq. yard of Sultanabad land ( R.S. no. 11) to M/s Milestone Developers on 17.06.2011 for a total consideration of Rs.5.27 Crores. The Ruchandani family consisting of four members, had 50% share in the land (each co-owner's share was 12.5%) and Goplani family consisting of two had balance 50% (each co-owner's share 2.5%). On verification of the incriminating material found during the course of search, the assessing officer held that there was ‘on money’ paid by M/s Milestone Developers to the assessee and other 5 co-owners of the land totaling to Rs.10,02,96,000/-. During the assessment proceedings, the assessing officer issued show cause notice to the assessee asking him to why 12.5% of the ‘on money’ received from M/s Milestone Developers amounting to Page | 25 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani Rs.1,25,37,000/- should not be taxed in his hands. The assessing officer in his show cause notice mentioned the fact that his other two brothers namely Mr. Kanaiyalal, Mr. Radhakishan and Mr. Vasudev Goplani, who are the other co-owners of the land in question, had accepted the fact that they had received the ‘on-money’ on the Sultanabad land transaction from M/s Milestone Developers. The assessee in his reply before the assessing officer did not accept that he had received any ‘on-money’ from the M/s Milestone Developers. The reasons given by the assessee for not accepting the fact that he received the ‘on-money’ have been elaborately analyzed and rebutted by the assessing officer from page 80 to 84 of the assessment order. Further, the assessing officer held that during the course of search in premises of the assessee and Goplani family and survey u/s 133A of the Act in the case of M/s Milestone Developers, several chits and notepad entry evidencing the receipt of on-money in the form of cash by the sellers of the land have been found and seized. Some sellers including the brothers of the assessee admitted the receipt of ‘on-money’ from, Sultanabad land transaction and offered the said additional income in the returns filed in response to the notices u/s 153A of the Act. Finally, the assessing officer concluded that 9000 sq. yard of land was sold at the rate of Rs.17,000/- per sq. yard on the basis of page no. 49 of Annexure- Al wherein Mr. Haresh Ruchandani, son of Radhakishan Ruchandani has worked out 687.5 sq. yard X 17,000/- = 1,16,87,500/-. On the basis of the said document, the assessing officer calculated the sale consideration of entire land at the rate of Rs.17,000/- per yard and worked out the ‘on money’ receipt of Sultanabad land at Rs.10,02,96,000/- and amount pertaining to the assessee was calculated to be Rs.1,25,37,000/- being 12.5% of the total on-money on the transaction. Subsequently, the assessing officer has bifurcated the purchase of the land in question in two sq. yard on 29.03.2006 and 4000 on Page | 26 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 29.09.2009 and thus, worked out the LTCG of Rs.18,29,337/- and STCG of Rs.38,11,410/-. The assessee submitted before the assessing officer that though 4000 sq. yard was registered on 29.09.2009, and it was purchased into 2007 and entire purchase consideration was paid by cheques in 2007 itself and the vendors had given the possession which is evident from the Kabja receipt. AO did not accept the assessee’s submission and determined the capital gains on the basis of date of execution of purchase deed and made additions on account of LTCG of Rs.18,29,337/- and STCG of Rs.38,11,410/-. 43. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has partly deleted the addition made by the Assessing Officer, observing as follows: “9.6 I have gone through the assessment order and the submission of the AR of the assessee. Basically, I have to decide two issues which are the bone of contention. The first issue is whether the sale consideration of 3600 sq. yard is at the rote of Rs.5000/-per sq. yard or Rs.17,000/- per sq. yard? The second issue is whether 4000.sq. yard of land which was registered on 29.09.2009 was actually purchased in 2007 as claimed by the assessee or otherwise? 9.7 Now, I deal with the first Issue. The assessee's brother Mr. Radhakishan Ruchandani in post search proceedings had submitted u/s. 131 of the Act that he and other co-owners had sold the land to M/s. Milestone Developers in two lots. The first lot of 3600 sq. yards was sold at the rate of Rs.5,000/- per sq. yard which was as per the agreement entered in year 2010 and balance land of 5400 sq. yards was sold in 2011 at an increased rate of Rs.17,000/- per sq. yard. The first lot of 3600 sq. yards was sold at the rate of Rs.5,000/- per sq. yard which was as per the agreement entered in the year 2010 and balance land of 5400 sq. yards was sold in 2011 at an increased rate of Rs.200/- per sq. yard. The AR of the assessee in his submission stated that initial and was sold at lower rate as the assessee's family members wanted to the project on the said land in partnership with Milestone Developers. As per the partnership deed the assessee's family was entitled to the profit from the project and hence, the first lot of land was sold at a lessor price. However, the partnership between the Ruchandani Family and M/s Milestone Developers did not last long and had to be dissolved in March, 2012. Therefore, the price of the balance land sold in second lot was suitably increased so that Ruchandani Family could get compensated for the lessor price they got for the first lot. The copy of the partnership deed and dissolution deed were produced before the assessing officer were produced before me as well as supporting the assessee's claim as to Page | 27 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani why there was huge gap in pricing of two lots of land in such a short span of about a year. Accordingly, the balance parcel of 5400 sq. yards was sold at Rs.17,000/- per sq. yard. In the seized material, on page 49 of Annexure- A1 there is mention of Rs.17,000/- rate but with reference to 687.5 sq. yards. However, there is no other incriminating material to suggest that the entire parcel of. 9000 sq. yards was sold at the rate of Rs.17,000/- per sq. yard. The assessing officer did not accept the contention cf the co-owners that 3600 sq. yards was sold at Rs.5,000/- per sq. yard which was just 30% of Rs.17,000/- and that too in a span of about 12 months. Therefore, the assessing officer held that the entire, land was sold at the rate of Rs.17,000/- per sq. yard. However, there are no concrete evidences in the seized material to show that the entire land was sold at the rate of Rs.17,000/- per sq. yard. The only evidence available is page 49 of Annexure- Al found from the residence of the assessee which mentioned Rs.17,000/- but it is not for the 9000 sq. yards but 687.5 sq. yards. The assessee in his statement has admitted that 5400 sq. yards were sold at the rate of Rs,17,000/- and as the evidence found of 687.5 Sq. yards is lesser than 5400 sq. yards, it cannot be concluded that the entire land of 9,000 sq. yards was sold at the rate of Rs.17,000/- per sq. yard. In view of the same, the sale consideration has to be worked out as under: 3600 sq. yards at the rate of Rs.5,000/-per sq. yard = 1,80,00,000/- 5400 sq. yards at the rate of Rs.17,000/- per sq. yard = 9,18,00,000/- Total 10,98,00,000/- 9.8 Now, I come to the second part i.e. whether the Sultanabad land measuring 4000 sq. yards was purchased in 2007 as the said land was registered only 29.C9.2C09. According to the assessee, 4000 sq. yards of land was purchased in 2007 and entire payment of the purchase consideration of Rs.6,00,000/- was paid in 2007 itself. It was further submitted by the assessee that the possession of the said land was given by the vendors in 2007 itself which is evident from Kabja receipt dated 01.08.2007. In the said kabja receipt the details of payments made by 12 cheques of Rs.25,000/- and 6 cheques of Rs.50,000/- all cheques are dated 01.08.2007 and drawn on three different banks namely Udhna citizen Co-op. Bank, Bank of India and Andhra Bank. According to the assessee the sale deed could not be executed in 2007 as some members of the vendor's family were not present in Surat as they are based in Mumbai and hence, Kabja receipt was executed and sale deed was executed in 2.009 when all the co-owners of the vendor's family could be physically present. The assessing officer did not accept the contents of the Kabja receipt only because it was not signed by all the co-purchasers and from the purchaser's behalf it was signed by the assessee. The assessing officer's contention was that when all the vendors have signed, why all purchasers have not signed, in my opinion, signing by all vendors is essential part of execution of a document like Kabja receipt. From purchaser's side one person signing on behalf of all co-purchasers would suffice, but the same .is not true in the case of vendors. Further, the assessee is able to prove that the entire purchase consideration has been paid by cheques on 01.08.2007 and possession was given only on receipt of the entire sale consideration. Therefore, these are material facts especially the cheque transactions which cannot be disbelieved. Hence, the assessing officer is Page | 28 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani directed to take the date of purchase of 4000. sq. yard of Sultanabad land as 01.08.2007 as against 29.09.2009 taken by him. 9.9 In view of the above findings, the entire capital gain will be LTCG and there will not be any STCG as worked by the assessing officer. The actual working of LTCG is as under: Total sale consideration of Sultanabad land Rs.10,98,00,000/- (3600 x 5400 x 17000) Appellant’s share being 12.5% Rs.1,35,00,000/- Less: Sale consideration offered in return as LTCG Rs.91,71,196/- LTCG to be additionally to be brought to tax Rs.43,28,804/- 9.10 The assessing officer has brought to tax Rs.18,29,337/- as LTCG and 38,11,410/- as STCG totaling to Rs.56,40,747/- Out of the said amount addition of Rs.43,28,804/- as LTCG is upheld. The assessee get relief of Rs.13,11,943/-. Ground no.5, 6 and 7 are treated to have been Partly allowed.” 44. Aggrieved by the order of the ld. CIT(A), the assessee as well as revenue both are in appeal before us. 45. The ld. DR for the Revenue argued that the kabja receipt cannot be the part of transfer. Further, ld DR stated that evidences were found in which, it was seen that ‘on-money’ was paid by the other co-owners for the purchase of land in 2009. Thus, it shows that payment was not fully paid to contractor family. Only after making full payments including ‘on-money’, the sale deed was executed in 2009. Hence, the claim of the assessee that land was purchased in 2007 is not acceptable. Under the circumstances, the addition made by the assessing officer may be sustained. 46. On the other hand, Ld. Counsel for the assessee argued that the assessee and other co-owners sold 9000 sq. yard of the land situated at Sultanabad to Milestone Developers. The Assessing Officer made the addition of Rs. 56,40,747/- in respect of the cash component received on sale of the land. Further the Assessing Officer treated the part of the capital gain disclosed by the assessee in respect of 4000 sq. yard of land as short term capital gain as per his findings given at Page No 102 to 106 of the Page | 29 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani order. So far the addition of Rs.56,40,747/- is concerned, it is submitted by ld Counsel that the addition was wrongly made. The assessee and other co-owners had purchased the land admeasuring 4000 sq. yards situated at Sultanabad in the year 2007 but, the Purchase deed was registered only on 29.09.2009. So, the Assessing Officer treated the capital gain in respect of 4000 sq. yards of land as short term capital gain as he calculated the holding period from 29.09.2009 when the land was registered. The land at Sultanabad, admeasuring 4000 sq. Yards was purchased by the assessee and other co-owners in the year 2007 and the entire payment of purchase consideration of Rs.6,00,000/- was paid in the year 2007 itself. The vendors had given possession of the land in the year 2007 as evident from the Kabja Receipt dated 01.08.2007 which also reflected the details of payments made by the assessee and co-owners. Therefore, no addition should be made in the hands of assessee and entire addition made by the assessing officer may be deleted. 47. We have heard both the parties and examined the fact with help of the paper book submitted by the assessee that entire payment of purchase consideration of Rs.6,00,000/- was paid in the year 2007 itself, therefore, we find merit in the submission of ld Counsel to the effect that the land at Sultanabad, admeasuring 4000 sq. Yards was purchased by the assessee and other co-owners in the year 2007 and the entire payment of purchase consideration of Rs.6,00,000/- was paid in the year 2007 itself. The vendors had given possession of the land in the year 2007, as evident from the Kabja Receipt, dated 01.08.2007, which also reflected the details of payments made by the assessee and co-owners. The sale deed could not be executed between the parties in 2007, as some members of the vendor’s family were based at Mumbai and were not present in Surat and therefore, the Kabja Raseed was executed. The sale deed was executed in the year Page | 30 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 2009 when all the members of the vendor’s family were physically present in Surat. The Assessing Officer did not accept the contents of the Kabja Rasid on the only ground that it was not signed by all the co-purchasers. It is submitted that signing of the document by all the vendors is an essential part of execution of any document. From the vendor’s side, any one person signing on behalf of all the co-purchasers would suffice. Moreover, the assessee had proved that possession of the land was given by the vendors only after the entire purchase consideration had been paid by cheques on 01.08.2007. The learned CIT(Appeals) deleted the addition on the same lines as per his findings at Para no 9.8 after accepting the assessee’s arguments. We note that all the owners have received the possession in the year 2007 only and also the payments by cheque before receiving of the possession were made. Therefore, said transaction was entirely executed in 2007 only, therefore, we allow aground No.3 raised by the assessee and dismiss ground No.6 raised by the Revenue. 48. In the result, ground No.3 raised by the assessee is allowed whereas ground No.6 raised by the Revenue is dismissed. 49. Ground no.7 raised by the Revenue, is reproduced below: “7) In addition to and in alternative to the grounds No.(l), (2), (3), (4) (5) & (6) above, on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting/restricting the additions made by the Assessing Officer without considering the provisions of section 292C of the Act and de hors provisions contained in the said section.” 50. We have already considered the issue raised by the Revenue in ground no.7, while adjudicating ground Nos. 1 to 6 of the Revenue in detail, and dismissed the grounds of Revenue, hence ground No.7 does not require specific adjudication therefore we dismiss ground No. 7 raised by the revenue. Page | 31 IT(SS)A Nos. 19 &39/SRT/2022/AY.2012-13 Pitamber B. Ruchandani 51. In the combined result, appeal filed by the Assessee [in IT(SS)A No. 19/SRT/2022) is partly allowed in above terms, whereas the appeal filed by the Revenue (in IT(SS)A No.39/SRT/2022) is dismissed. Registry is directed to place one copy of this order in all appeals folder / case files. Order is pronounced on 10/11/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 10/11/2023 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat