Appeal details
Counselvise Citation
[2018] 122 COUNSELVISE.COM (IT) 2723 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 3 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
15-10-2018
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
Not Allotted
Assessment Year
2009-2010
Appeal Filed On
13-07-2015
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER SR. NO. IT(SS)A NO. NAME OF APPELLANT NAME OF RESPONDENT 1-2. 199 & 200/AHD/2015 ASSTT.YEAR 2009-10, 2011-12 DHARAMSINBHAI N. PATEL PAN : ABHPP 5269 Q DCIT, CENT.CIR.2(4) AHMEDABAD. 3. 201/AHD/2015 ASSTT.YEAR 2011-12 SHRI DHARAMSIBHAI N. PATEL, HUF PAN : AAAHP 7405 Q DCIT, CENT.CIR.2(4) 4-5. 202 & 203/AHD/2015 ASSTT.YEAR 2009-10, 2011-12 SHRI JAYESH D. PATEL PAN : ABHPP 5270 B -DOC- 6-7. 204 & 205/AHD/2015 ASSTT.YEAR 2009-10, 2011-12 SHRI KAMLESH D. PATEL PAN : AAWPP 5298 B -DOC- 8. 206/AHD/2015 ASSTT.YAR 2011-12 SHRI TRUPITBEN K. PATEL PAN : AEIPP 9893 G DCIT, CENT.CIR.2(4) 9. 207/AHD/2015 ASSTT.YAR 2011-12 SHRI RANJABEN D. PATEL PAN : AEHPP 8862 J DCIT, CENT.CIR.2(4) 10. 208/AHD/2015 ASSTT.YAR 2011-12 SHRI SANJAY D. PATEL PAN : APZPP 7643 G DCIT, CENT.CIR.2(4) 11. 209/AHD/2015 ASSTT.YAR 2011-12 SHRI GEETABEN J. PATEL PAN : ACCPP 5338 C DCIT, CENT.CIR.2(4) 12. 210/AHD/2015 ASSTT.YAR 2011-12 SHRI INJAL A. PATEL PAN : AFRPP 4143 B ALL HAVING COMMON ADDRESS AT: DCIT, CENT.CIR.2(4) IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 2 A-79, UGANDA SOCIETY MEMNAGAR AHMEDABAD 380 052. ASSESSEE BY : SHRI MAHESH CHHAJED, AR REVENUE BY : SHRI O.P. SHARMA, CIT - DR / DATE OF HEARING : 11/10/2018 / DATE OF PRONOUNCEMENT: /10/2018 / O R D E R PER BENCH: THE LD.CIT(A) HAS DECIDED APPEALS OF ALL ASSESSEES FOR THE ASSTT.YEARS 2011-12 BY WAY OF A COMMON ORDER DATED 27.3.2015. SIMILARLY, APPEALS FOR THE ASSESSEES VIZ. KAMLESH D. PATEL, JAYESH D. PATE L AND DHARAMSIBHAI N. PATEL FOR THE ASSTT.YEAR 2009-10 WAS DECIDED BY THE LD.CIT(A) VIDE SEPARATE COMMON ORDER DATED 27.3.2015. WE HEARD THIS BUNCH O F 12 APPEALS. SINCE COMMON ISSUES ARE INVOLVED, THEREFORE, WE DEEM IT A PPROPRIATE TO DISPOSE OF THEM BY THIS COMMON ORDER. 2. FIRST WE TAKE ALL APPEALS FOR THE ASSTT.YEAR 201 1-12. BEFORE ADVERTING TO THE SPECIFIC GRIEVANCE RAISED BY EACH ASSESSEE, IT IS PERTINENT TO TAKE NOTE OF CERTAIN FACTS. 3. A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT , 1962 WAS CARRIED OUT ON 9.3.2011 AT RESIDENTIAL AS WELL AS BUSINESS PREMISES OF SHRI DHIRAJLAL V. SANGHVI. DURING THE COURSE OF SEARCH AT THE RESIDE NTIAL PREMISES, A LOOSE FILE CONSISTING 102 PAGES WAS FOUND AND SEIZED AS ANNEXU RE A/1. ACCORDING TO THE AO ON THE REVERSE SIDE OF PAGE NO.93 OF LOOSE PAPER S, THERE ARE HAND-WRITTEN ENTRIES INDICATING PAYMENTS MADE TO BHAKTINANDAN AS SOCIATION, VASUDEV ASSOCIATION, JAYESH DHARAMSIBHAI PATEL AND OTHERS I N RESPECT OF LAND AT IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 3 SURVEY NOS, 3, 13 AND 14. THUS ACCORDING TO THE AO , IT EMERGES OUT THAT SHRI DHIRAJLAL SANGHVI AND OTHERS HAVE PURCHASED LAND FR OM APPELLANTS BEARING SURVEY NO.3, 13 AND 14 AT NAVA VADAJ, AHMEDABAD. A PART FROM THE SALE CONSIDERATION MENTIONED IN THE SALE DEED, VENDEE PA ID CASH AMOUNT TO THE VENDORS AND DETAILS OF SUCH CASH COMPONENTS AT RS.5 ,52,01,000/- HAS BEEN NARRATED ON THE BACK SIDE OF THIS PAGE. A SATISFAC TION NOTE FOR TAKING ACTION AGAINST THE APPELLANTS WAS RECORDED, AND THEREAFTER NOTICE UNDER SECTION 153C R.W.S. 153A WAS ISSUED AND SERVED UPON THE ASSESSEE . IT IS ALSO PERTINENT TO OBSERVE THAT, THOUGH ON THE PAPER FOUND DURING THE COURSE OF SEARCH, TOTAL CASH COMPONENT NARRATED AT RS.5,52,01,000/- BUT THE VEND EE IN HIS STATEMENT RECORDED ON 26.5.2011 IN POST-SEARCH INQUIRY ADMITT ED THAT SUCH CASH PAID BY HIM WAS RS.5,84,71,400/-. AS FAR AS CASH COMPONENT MENTIONED IN THE SEIZED PAPERS I.E. A SUM OF RS.5.52 CRORE IS CONCERNED, TH E APPELLANTS HAVE INCLUDED THIS AMOUNT IN PROPORTION OF THE LAND SOLD BY THEM AND PAID TAXES. THUS, SHORT DISPUTE IN ALL THESE APPEALS RELATES TO WHETHER DIF FERENCE OF RS.32,70,400/- (RS.5,84,71,400/- MINUS RS.5,52,01,000) DESERVES TO BE ADDED IN THE HANDS OF APPELLANTS IN ACCORDANCE TO RATIO OF THE LAND SOLD BY THEM, SINCE VENDEE HAS ADMITTED PAYMENT OF RS.5,84,71,400/- TO THE VENDORS , OVER AND ABOVE THE SALE CONSIDERATION MENTIONED IN THE SALE DEED. ON THE O THER HAND, THE VENDORS ARE RECOGNIZING RECEIPT OF RS.5.52 CRORES IN THEIR RETU RNS OF INCOME. IN THIS BACKGROUND, THE LD.AO SOUGHT THE EXPLANATION OF THE ASSESSEE AS TO WHY AN ADDITION OF RS.32,70,400/- IN PROPORTION TO THEIR S HARE IN THE PROPERTY SHOULD NOT BE ADDED IN THE HANDS OF EACH ASSESSEE. COPY O F THE SHOW CAUSE NOTICE HAS BEEN PLACED ON PAGE NO.16 TO 18. WE DEEM IT AP PROPRIATE TO TAKE NOTE OF THIS SHOW CAUSE NOTICE, WHICH READS AS UNDER: OFFICE OF THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(4), AHMEDABAD A-304, THIRD FLOOR, AAYKAR BHAVAN ANNEXE, ASHRAM ROAD, AHMEDABAD. IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 4 PHONE NO. O79 - 2754 5340 NO. DCIT/CC-2(4)/SANGHVI GROUP/2012-13 DATE: 04.0 3.2013 TO, SHRI DHARAMSHIBHAI NARSHIBHAI PATEL HUF, A - 79, UGANDA SOCIETY, B/H SARTHI HOUSE, MEMNAGAR, AHMEDABAD PAN: AAAHP7405A SIR/MADAM, SUB : ASSESSMENT PROCEEDINGS FOR A. Y. 2011- 12 -REG. PLEASE REFER TO YOUR LETTER FOR THE A.Y. 2011-12, W HEREIN YOU HAVE REQUESTED TO FURNISH DETAILS REGARDING THE BASIS ON WHICH THE CONCLUSION WAS DRAWN FOR CONSIDERING THE CASH RECEI PT FOR SALE OF LAND AT VADAJ AT RS. 5,84,71,400/- INSTEAD OF RS. 5,52,0 1,000/- BY THE SELLERS OF THREE PLOTS LOCATED AT SURVEY NOS. 3, 13 85 14 O F NAVA VADAJ, AHMEDABAD. 2. A SEARCH WAS CARRIED IN SANGHVI GROUP AND DURING THE SEARCH AT THE RESIDENTIAL PREMISES OF SHRI DHIRAJLAL V. SANGHVI A T A- 14, TIRTHBHOOMI APARTMENTS, AMONG THE BOOKS, DOCUMENTS AND LOOSE PA PERS FOUND, ONE LOOSE PAPER FILE CONSISTING OF 102 PAGE WAS FOUND W HICH WAS SEIZED AND INVENTORIED AS A/1. IN REVERSE SIDE OF 93 PAGE, OF THIS LOOSE PAPER FILE, THERE IS HAND WRITTEN ENTRIES INDICATING PAYMENTS M ADE TO BHAKTINANDAN ASSOCIATION, VASUDEV ASSOCIATION, JAYE SH DHARAMSIBHAI PATEL AND OTHERS IN RESPECT OF LAND AT SURVEY NOS. 3, 13, AND 14. THE SAME IS SCANNED HEREUNDER: 3. DURING THE COURSE OF POST SEARCH PROCEEDINGS, A STATEMENT U/S. 131 OF THE ACT WAS RECORDED OF SHRI DHIRAJLAL SANGHVI ON 2 6.05.2011 IN WHICH, HE WAS SHOWN PAGE NOS. 93, 94 AND 95 OF LOOSE PAPE R FILE A/1 SEIZED FROM HIS RESIDENCE WHICH WERE IN RESPECT OF PURCHAS E OF LAND AT SURVEY NUMBERS 3, 13 AND 14 AT VADAJ. SHRI DHIRAJLAL SANGH VI AFFIRMED THAT THE GROUP PAID CASH OVER AND ABOVE THE DOCUMENTED P RICE. SHRI DHIRAJLAL SANGHVI ADMITTED THAT, THE PRICE OF RS. 3 5,000/- WAS IN FACT FOR EACH SQUARE YARD. IT MAY BE MENTIONED HERE THAT THE HAND WRITTEN CALCULATION BEGINS WITH MULTIPLICATION OF A FIGURE 1094.81 WITH 35 AND IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 5 A TOTAL PAYABLE OF 38218350 HAS BEEN WORKED OUT WHI CH IS FOLLOWED BY A FIGURE 8238690 AGAINST WHICH 'CHEQUE' IS WRITTEN. THIS IS FOLLOWED BY A FIGURE 26500000 AGAINST WHICH 'AAPEL' (GIVEN/PAID IN GUJARAT) IS WRITTEN. DURING THE STATEMENT-RECORDED U/S 131 OF T HE ACT ON 26.05.2011, SHRI DHIRAJLAL V. SANGHVI SUBMITTED THA T THE WRITINGS ON THE REVERSE SIDE OF THE PAGE NO. 93 PERTAINED TO SU RVEY NO. 14 WHICH ADMEASURED 915.41 SQ. MTR. THE FIGURE 1094.81 IS ME ASUREMENT OF THE LAND CONVERTED INTO SQ. YARDS (915.41 X 1.196) AND THE FIGURE 35 REPRESENTS RS.35000/- WHICH WAS THE RATE PAID PER S Q.YARD FOR PURCHASING THE LAND. AS REGARDS THE FIGURE 38218350 IS CONCERNED, IT IS ACTUALLY THE TOTAL VALUE OF 1094.81 SQ. YARDS LAND AT THE RATE OF RS.35000/- PER SQ. YARD WHICH.ACTUALLY WORKS OUT TO A RS.3,83,18,350/-. IT WAS CLARIFIED THAT IN THE HAND WRITTEN NOTE, THE AMOUNT WAS WORKED OUT THAT RS. 3,82,18,350/- BY MISTAKE. SHRI DHIRAJL AL SANGHVI CONCLUDED HIS REPLY TO THIS QUESTION BY RECONFIRMING THAT THE COMPANY PAID IN FACT, PURCHASED THE LAND FOR RS.7,47,16,250/- (2134.75 SQ . YARDS X RS.35000/-) AS AGAINST THE DOCUMENTED PRICE OF RS.1 ,62,44,850/-. COPY OF THE RELEVANT EXCERPTS FROM STATEMENT RECORDED U/ S 131 OF THE ACT DATED 26.05.2011 OF SHRI DHIRAJLAL SANGHVI IS ENCLO SED HEREWITH. SHRI DHIRAJLAL V. SANGHVI ADMITTED THAT THE DIFFERE NCE BETWEEN THE ACTUAL PRICE PAID AND THE DOCUMENTED PRICE I.E. RS. 5,84,71,400/- WAS HIS UNACCOUNTED INCOME FROM WHICH THE COMPANY HAS P AID THE CASH PORTION AND OFFERED TO PAY TAX ON THE SAME. 4. THUS FROM THE ENTRY ON THE REVERSE SIDE OF PAGE 93 AS SCANNED ABOVE, IT IS EVIDENT THAT AN AMOUNT OF. RS. 3,83,18,350/- WAS PAID FOR SURVEY NO. 14 WHICH ADMEASURED 915.41 SQ. MTR. I.E. 1094.8 1 SQ. YARDS. FURTHER IT IS ALSO EVIDENT THAT THE RATE OF THE LAN D IS FIXED AT RS. 35,000/- PER SQ. YARD. THE TOTAL LAND SOLD IS 2134.75 SQ. YA RDS, HENCE, THE VALUE OF THE SAME @ RS. 35,000/- PER SQ. YARD COMES TO RS .7,47,16,250/-. FURTHER, SHRTDHIRAJLAL V. SANGHVI HAS ALSO ADMITTED THAT HE HAS PAID A TOTAL OF RS. 7,47,16,250/- FOR PURCHASE OF THE LAND AT VADAJ. HE HAS ALSO OFFERED THE SAME IN CASH FLOW STATEMENT BASED ON WH ICH DISCLOSURE WAS MADE IN THE A.Y. 2011-12. 5. IT IS SEEN THAT THE TOTAL CASH CONSIDERATION ACC EPTED BY SHRI DHARAMSIBHAI PATEL, SHRI SANJAY PATEL AND OTHERS IN RESPECT OF LANDS AT SURVEY NO. 3, 13 & 14 WAS OF ,RS. 5,52,01,000/- OUT OF THE TOTAL CASH CONSIDERATION OF RS.5,84,71,400/-. THUS IT IS EVIDE NT THAT THERE WAS A DIFFERENCE OF RS. 32,70,400/-. YOU ARE THEREFORE RE QUIRED TO SHOW-CAUSE IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 6 WHY OUT OF THE DIFFERENCE OF RS. 32,70,400/- YOUR P ROPORTIONATE SHARE IN THE PROPERTY SHOULD NOT BE ADDED TO YOUR TOTAL INCO ME. YOUR REPLY IN THIS REGARD SHOULD BE SUBMITTED WITHIN 3 DAYS OF RE CEIPT OF THIS LETTER. 6. YOU ARE ALSO REQUESTED TO SUBMIT A WORKING OF CA PITAL GAIN ARISING ON SALE OF THIS PLOT. END: 1. COPY OF STATEMENT OF SHRI DHIRAJLAL SANGHVI DATED 26.05.2011. 2. COPY OF SEIZED DOCUMENTS PAGE NO. 93, 94 AND 95 (& BACK SIDE OF PAGE-93) YOURS FAITHFULLY, SD/- (LEENA LAL) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2 (4), AHMEDABAD. 4. WITH THE ASSISTANCE OF THE LD.REPRSENTATIVES, WE HAVE GO NE THROUGH THE RECORD CAREFULLY. ISSUE BEFORE US IS, WHETHER SUM OF RS.32,70,400/- DESERVES TO BE ADDED IN EACH HAND OF THE APPELLANT IN PROPOR TIONATE TO THE SHARE IN THE PROPERTY SOLD BY THEM. THE AO HAS MADE ADDITION OF THIS AMOUNT AND HE HAS COMPILED DETAILS IN TABULAR FORM. THE BREAK OF RS. 32,70,400/- HAS BEEN NOTED BYTHE LD.AO IN THE ASSESSMENT ORDER OF SHRI DHARSIN BHAI PATEL. THIS BREAK-UP INDICATES THE AMOUNTS ADDED IN EACH HAND OF THE APP ELLANT. THAT VERY AMOUNT IS BEING IMPUGNED IN THE RESPECTIVE GROUNDS OF APPE AL. 5. A PERUSAL OF THE RECORD WOULD INDICATE THAT THE AO WAS PROCESSING TWO EVIDENCES FOR MAKING ADDITION. THE FIRST EVIDENCE IS OF LOOSE FILE CONSISTING OF 102 PAGES AND ON THE REVERSE SIDE OF PAGE NO.93 INVENTORISED AS ANNEXURE A/1 INDICATED DETAILS OF RS.5.02 CRORES PAYMENTS MA DE BY SHRI DHIRAJLAL V. SANGHVI TO THE LAND OWNERS. THE OTHER EVIDENCE POS SESSED BY THE AO IS STATEMENT OF SHRI DHIRAJLAL V. SANGHVI RECORDED ON 26.5.2011 WHEREIN HE HAS DISCLOSED PAYMENT IN CASH AT RS.5,84,71,400/-. IT IS TO BE ASCERTAINED, WHETHER THIS EVIDENCE IS SUFFICIENT TO HOLD THAT THE ASSESSEES HAVE RECEIVED IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 7 RS.5.84 CRORES AND NOT RS.5.52 CRORES. BEFORE EMBA RKING UPON ANALYSIS OF THE EVIDENCE, LET US FIRST APPRECIATE THE SCOPE OF ASSE SSMENT UNDER SECTION 153C OF THE INCOME TAX ACT. IT HAS BEEN BROUGHT TO OUR NOT ICE THAT SCOPE OF SECTION 153C AS WELL AS 153A HAS FALLEN FOR CONSIDERATION B EFORE VARIOUS HONBLE HIGH COURTS AND REFERENCE TO THE FOLLOWING DECISION S CAN BE MADE: I) CIT VS. KABUL CHARWALA, 380 ITR 0183 (DEL) II) CIT VS. KURELE PAPERS, 380 ITR 571 (DEL) III) CIT VS. LATA JAIN, 384 ITR 543 (DEL) IV) CIT VS. SOMAYA CONSTRUCTION LTD. 387 ITR 529 (GUJ) 6. HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CH ARWALA (SUPRA) HAS EXAMINED THIS ISSUE IN DETAILS, AND THEREAFTER SUMM ARIZED LEGAL PROPOSITION EMERGED OUT OF APPLICATION OF SECTION 153A. IT IS PERTINENT TO OBSERVE HERE THAT SCOPE OF SECTIONS 153A AND 153C ARE IDENTICAL, BECAUSE UNDER SECTION 153C ASSESSMENT IS BEING MADE IN THE CASE A PERSON UPON WHOM NO SEARCH WAS CARRIED OUT, BUT DOCUMENT OR EVIDENCE SHOWING E SCAPEMENT OF INCOME PERTAINED TO SUCH ASSESSEES WERE FOUND AT THE PREMI SES OF THE SEARCHED PERSONS, THEN THE ASSESSING OFFICER OF THE SEARCHED PERSON WOULD RECORD SATISFACTION SHOWING ESCAPEMENT OF INCOME IN THE HA NDS OF OTHER PERSON, AND HE WOULD TRANSMIT THOSE PAPERS TO THE AO OF SUCH OT HER PERSON WHO WILL TAKE ACTION UNDER SECTION 153C. AS FAR AS THIS PROCEDUR E IS CONCERNED, NO IRREGULARITY HAS BEEN POINTED OUT ABOUT TAKING COGN IZANCE UNDER SECTION 153C. IN THIS BACKGROUND WE TAKE NOTE OF THE PROPOSITION LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHARWALA (SUP RA). IT READS AS UNDER: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 8 I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDA TORILY ISSUED TO THE PERSON SEARCHED RE QUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS W ILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHI CH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX Y EARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX' . IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT H AS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEI ZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOS E PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSE SS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND AN Y OTHER MATERIAL IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 9 EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONL Y ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEA RCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 7. THUS, THE LEGAL POSITION PROPOUNDED ABOVE WOULD INDICATE THAT INCOME OF THE ASSESSEE IS TO BE DETERMINED ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, ONLY EVIDEN CE WAS FOUND DURING THE COURSE OF SEARCH WAS ANNEXURE A/1, BUT IT IS ONLY QUA THE AMOUNT OF RS.5.52 CRORES. APPELLANTS HAVE ALREADY INCLUDED THIS AMOU NT IN THEIR RETURNS. IT IS NOT IN DISPUTE. THE SECOND EVIDENCE RELIED UPON BY THE LD.AO IS THE STATEMENT OF SHRI DHIRAJLAL V. SANGHVI WHO DISCLOSED PAYMENT OF RS.5.84 CRORES NOT RS.5.52 CRORES TO THE VENDORS IN CASH. M WHETHER T HIS STATEMENT IS SUFFICIENT TO FASTEN LIABILITY OF TAX ON THE DIFFERENCE OF RS. 32,70,400/-. FIRSTLY, THE AO HAS NOT GRANTED ANY OPPORTUNITY TO THE CROSS-EXAMIN E SHRI DHIRAJLAL V. SANGHVI. HENCE, HIS STATEMENT CANNOT BE RELIED UPO N. SECONDLY ASSESSEES HAVE POINTED OUT THAT THEY HAVE SOLD 1784.91 SQ.MET ERS OF LAND. SHRI DHIRAJLAL V. SANGHVI HAS DISCLOSED THAT HE PURCHASED THE LAND AT THE RATE OF RS.35,000/- PER SQ.METER. IF THIS RATE IS APPLIED TO BE TOTAL AREA HELD BY THE ASSESSEE, THEN SALE CONSIDERATION WOULD COME AT RS.6.20 CRORES. T HIS WILL INCLUDE CASH COMPONENT OF RS.5.52 CRORES. THE ASSESSEES HAVE DI SCLOSED SALE CONSIDERATION IN THEIR RETURNS AT RS.6.87 CRORES. THIS DISCLOSUR E AT THE END OF THE ASSESSEE FALSIFIES THE STATEMENT OF SHRI DHIRAJLAL V. SANGHV I. IT IS CONTENDED BY THE ASSESSEE THAT APART FROM NINE APPELLANTS HEREIN, TH ERE WERE TWO MORE VENDORS VIZ. KOMAL BANSALI AND MAMTA GOLECHA. SHRI DHIRAJL AL V. SANGHVI HAS NOT IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 10 SPECIFICALLY DEPOSED WHETHER THE CASH WAS ONLY GIVE N TO THE ASSESSEE OR IT COULD HAVE BEEN GIVEN TO OTHER TWO VENDORS. WE FAI LED TO APPRECIATE HOW THE AO HAS DRAWN INFERENCE THAT CASH CONSIDERATION SHOU LD BE TAKEN AT RS.5.84 CRORES, AND IT SHOULD BE CONSTRUED THAT IT WAS RECE IVED BY ONLY NINE VENDORS. THERE IS NO SUCH EVIDENCE AVAILABLE WITH THE AO TO SUPPORT HIS BELIEF. IT IS TOTALLY MISINTERPRETATION AND MISCONSTRUCTION OF FA CTS. IN OTHER WORDS, LD.AO HAS MISREAD EVIDENCE AVAILABLE ON THE RECORD. THER EFORE, WE ALLOW THE GROUNDS OF APPEAL RAISED BY EACH APPELLANT AND DELE TE THE ADDITION MADE IN THEIR RESPECTIVE HANDS. IN OTHER WORDS, TOTAL AMOU NT ADDED AT RS.32,70,400/- IN THE HANDS OF THE ALL ASSESSEES TO BE DELETED. 8. IT IS PERTINENT TO OBSERVE THAT THE ASSESSEE HAS FILED APPLICATION FOR RAISING ADDITIONAL GROUNDS OF APPEAL. HOWEVER, AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE DID NOT ADVANCE ANY ARG UMENTS ON SUCH ISSUE NOR PRESSED ANY OTHER GROUNDS OF APPEAL. HENCE ALL OTH ER GROUNDS OF APPEAL IN THE ASSTT.YEAR 2011-12 AND ALL INTERLOCUTORY APPLICATIO NS MOVED BY THE ASSESSEE FOR THE ASSTT.YEAR 2011-12 AT HE INSTANCE OF ALL TH E APPELLANTS STAND DISMISSED. CONSEQUENTLY, APPEALS OF ALL THE APPELLANTS PARTLY ALLOWED. ADDITION OF RS.32,70,400/- PROPORTIONATELY MADE IN RESPECTIVE H ANDS OF THE ASSESSEE IS DELETED. 9. NOW WE TAKE APPEALS OF THREE APPELLANTS IN THE A SSTT.YEAR 2009-10. 10. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT CAME TO THE NOTICE OF THE AO THAT THREE APPELLANTS HAVE SOLD LAND COMPRIS ED AT SURVEY NO.341/7 AT NIKOL, DISTRICT AHMEDABAD. IT MERGES OUT THAT EARL IER SOME AGREEMENT WAS MADE WITH M/S.MAHASAGAR TRAVELS LTD. AND THEREAFTER , IT WAS SOLD TO THREE CONCERNS AND ON THE BASIS OF AGREEMENT ENTERED WITH MAHASAGAR TRAVELS IT BECAME A CONFIRMING PARTY. THE ISSUE IN DISPUTE IS WHETHER CAPITAL GAIN TAX IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 11 ON THIS TRANSACTION CAN BE ASSESSED IN THE HANDS OF THESE ASSESSES IN THE ASSTT.YEAR 2009-10 IN THE ASSESSMENT PASSED UNDER S ECTION 153C R.W.S 153A OF THE INCOME TAX. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET CONTENDED THAT RETURN FOR THE ASSTT.YEAR 2009-10 WA S FILED BY SHRI JAYESH D. PATEL ON 19.9.2009, DHARAMSHBHAI ON 22.9.2009 AND K AMLESH PATEL ON 22.9.2010 UNDER SECTION 143(2) COULD BE ISSUED ON 3 0.9.2010. NO NOTICE WAS ISSUED, HENCE, THEIR ASSESSMENT WAS FINALIZED. SEA RCH WAS CARRIED OUT ON 9.3.2011. NO INCRIMINATING MATERIAL WAS FOUND REGA RDING ON SALE OF LAND AT NIKOL. THEREFORE, ACCORDING TO THE ASSESSEE, NO AC TION CAN BE TAKEN IN THE ASSTT.YEAR 2009-10. THE LD.COUNSEL FOR THE ASSESSE E RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT AND HONBLE GUJARAT HIG H COURT IN THE CASES OF KABUL CHARWALA (SUPRA) AND SOMAYA CONSTRUCTION (SUP RA) ETC. HAVE BEEN TAKEN NOTE OF THESE IN THE EARLIER PART OF THE ORD ER. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE LD.CIT(A|). 11. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND G ONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI DHIRAJLAL V. SANGHVI NO DOCUMENTS RELATING TO TRANSACTIONS OF NIKOL LAND WAS FOUND. NOTICE UNDER SECTION 143(2) COULD BE ISSUED BEFORE 30.9.2010. SEARCH HAS TAKEN PLACE ON 9.3.2011 AND 153C PROCEEDINGS TAKEN PLACE SUBSEQUENT TO THAT. I N THE CASE OF KABUL CHARWALA (SUPRA) RETURN FOR THE ASSTT.YEAR 2002-03, 2005-06 AND 2006-07 WERE ACCEPTED UNDER SECTION 143(1) OF THE ACT. THE HONBLE HIGH COURT HAS CONSIDERED THIS ACCEPTANCE OF RETURN AS ASSESSMENT MADE UNDER SECTION 143(1). IN CONCLUDING PARAGRAPH, THE HONBLE HIGH COURT HAS HELD THAT ON THE DATE OF SEARCH ASSESSMENTS FOR THE ASSTT.YEAR 2002-03, 2005 -06 AND 2006-07 ALREADY STOOD COMPLETED AND NO INCRIMINATING MATERIAL WAS U NEARTHED DURING THE SEARCH, THEREFORE, NO ADDITION SHOULD HAVE BEEN MAD E TO THE INCOME OF THE ASSESSEE. THIS JUDGMENT IS FULLY APPLICABLE ON THE FACTS OF THE PRESENT CASE. IT(SS)A NO.199/AHD/2015 AND 11 OTHERS 12 THEREFORE, WE ALLOW ALL THREE APPEALS AND DELETE TH E ADDITIONS MADE BY THE AO. 12. NO OTHER GROUNDS ARE RAISED IN THIS YEAR. 13. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 15 TH OCTOBER, 2018 AT AHMEDABAD. SD/- SD/- ( PRADIPKUMAR KEDIA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER
