Shri Narendra M. Patel, Ahmedabad V. The Dy.CIT, Central Circle-1(2), Ahmedabad

ITSSA 240/AHD/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2614 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANIL BRAHMKHATRIYA
• Keywords: Search and seizure; Block assessment
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER IT(SS)A NO.240/AHD/2015 (ASSESSMENT YEAR : 2009-10) SHRI NARENDRA M. PATEL DHRUV FARM NEAR RAILWAY CROSSING THALTEJ SILAJ ROAD, AHMEDABAD VS. THE DCIT CENTRAL CIRCLE 1 (2) AHMEDABAD [PAN NO.AEAPP 9508 G] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI ANIL BRAHMKHATRIYA, AR RESPONDENT BY : SHRI MUDIT NAGPAL, SR.DR DATE OF HEARING : 12/07/2018 DATE OF PRONOUNCEMENT : 05/ 10 /2018 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE BEFORE US IS AGAINST THE ORDER DATED 20.07.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)11, AHMEDABAD [LD.CIT(A) IN SHORT] ARISING OUT OF THE ORDER DATE D 24.03.2014 PASSED U/S.143(3) RWS 153A OF THE INCOME TAX ACT BY THE DCIT, CENTRAL CIR CLE 1(2), AHMEDABAD FOR ASSESSMENT YEAR (AY) 2009-10 WITH THE FOLLOWING GR OUNDS:- 1. IN LAW, ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE IMPUGNED APPELLATE ORDER PASSED BY CIT(A)-11, AHMEDABAD IS AGAINST NAT URAL JUSTICE, BAD IN LAW AND DESERVES TO BE CANCELLED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-11 HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.25,00,000/- ON PRESUMPTION, CONJECTURES AND SURMISES. THE LD. AO MAY BE DIRECTED TO DELETE SUCH ADDITION. - 2 - IT(SS)A NO.240/AHD/2015 NARENDRA M. PATEL VS. DCIT ASST.YEAR 2009-10 2. THE BRIEF FACTS LEADING TO THIS CASE IS THAT A SEARCH WAS CONDUCTED IN THE CASE OF MARUTI-SAVVY GROUP OF CASES ON 27.04.2011 AND ON SU BSEQUENT DATES. ELEGANCE SKYZ PVT.LTD. GROUP WAS ONE OF THE SUB-GROUPS COVERED UN DER THE AFORESAID SEARCH AND SEIZURE OPERATION. THE SAID SUB-GROUP IS INVOLVED IN CONST RUCTION BUSINESS WHERE THE ASSESSEE IS THE KEY PERSON OF THE FIRM. A WARRANT AUTHORIZATI ON U/S.132 OF THE ACT WAS ISSUED AGAINST THE ASSESSEE FOLLOWED BY A NOTICE U/S.153A DATED 22 .09.2011. IN RESPONSE WHEREOF THE ASSESSEE FILED ITS RETURN OF INCOME ON 19.03.2012 D ECLARING TOTAL INCOME OF RS.3,46,69,600/-. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS.2,99,20,921/- ON SALE OF LAND AT BLOCK NO.522, VILLAGE SHILAJ WHICH HE HAS SOLD AT RS.3,51,08,580/- CLAIMING INDEX COST OF RS.25,87,659/- THOUGH THE AMOUNT WAS SHOWN AS RS.3,30,08,580/-. THE ASSESSEE CLAIMED THAT HE MADE A PAYMENT OF RS.25 LAKHS FOR CANCELLATION OF BHANAKHAT. HOWEVER, THE CASE MADE OUT BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE LD. ASSESSING OFFICER AND HE HAS ADDED AN AMOUNT OF RS.25 LAKHS AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. APPEAL PREFERRED BY THE ASSESSEE IN TURN WAS DISMISSED BY THE LD. CIT(A) AND HENCE THE INSTANT APPEAL. 3. AT THE TIME OF HEARING OF THE INSTANT APPEAL, T HE LD. REPRESENTATIVE OF THE ASSESSEE SUBMITTED BEFORE US THAT THE ADDITION OF RS.25 LAKH S MADE BY THE LD. ASSESSING OFFICER ON THE BASIS OF PRESUMPTION, CONJECTURES AND SURMISES. HE FURTHER SUBMITTED THAT DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS THOUGH THE L D. ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS SOLD THE CONCERNED LAND AT TH E CONSIDERATION OF RS.3,30,08,580/- BUT WHILE CALCULATING THE CAPITAL GAIN RS.25 LAKHS AS H AS BEEN PAID BY THE ASSESSEE FOR CANCELLATION OF BANAKHAT RIGHT TO ONE MR. APURVA BH ARATBHAI SHAH WAS NOT DEDUCTED. HE THUS PRAYED FOR ADDITION MADE BY THE AUTHORITIES BE LOW. 4. THE LD.DEPARTMENTAL REPRESENTATIVE, ON THE O THER HAND, RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW. THE LD. DR FURTHER SUBM ITTED THAT THOUGH THE ASSESSEE WAS NOT IN POSSESSION OF THE PROPERTY, HE ENTERED INTO AN AGREEMENT FOR SALE WITH THE SAID SHRI - 3 - IT(SS)A NO.240/AHD/2015 NARENDRA M. PATEL VS. DCIT ASST.YEAR 2009-10 APURVA B.SHAH ON 30.08.2004 FOR A CONSIDERATION OF RS.2,50,000/- OUT OF WHICH RS.2 LAKHS WAS RECEIVED BY HIM. HE FURTHER POINTED OUT THE FACT THAT THE SAID BANAKHAT WAS EXECUTED ON THE STAMP PAPER DATED 29.12.2004 WHICH HAS ALREADY BEEN CONSIDERED BY THE LD. ASSESSING OFFICER AS WELL AS BY THE FIRST APPEL LATE AUTHORITY WHILE MAKING ADDITION OF RS.25 LAKHS TO THE INCOME OF THE ASSESSEE. 5. WE HAVE HEARD THE LD. REPRESENTATIVES APPEARING FOR THE RESPECTIVE PARTIES. WE HAVE PERUSED THE RELEVANT MATERIALS AVAILABLE ON RE CORD. 6. WE FIND THAT THE LD. ASSESSING OFFICER CONSIDERE D THE LIST OF EVENTS METICULOUSLY AGAINST THE LIST OF DATES. HE HAS RIGHTLY POINTED OUT THAT WHILE THE ASSESSEE WAS NOT IN POSSESSION OF THE PROPERTY ON 30.8.2004, HE HAS EXE CUTED THE BANAKHAT WITH SHRI APURVA BHARATBHAI SHAH FOR A CONSIDERATION OF RS.2,50,000/ - AND RECEIVED AN AMOUNT OF RS.2 LAKHS THEREOF. THE ASSESSEE PURCHASED THE PROPERTY ONLY ON 04.09.2004 AND THE NAME OF THE ASSESSEE WAS RECORDED IN THE REVENUE RECORDS AS TH E PURCHASER ON 03.03.2005. HE FURTHER NOTED THAT THE BANAKHAT DATED 30.08.2004 WAS EXECUT ED ON THE STAMP PAPER DATED 29.12.2004. SUBSEQUENTLY, THE ASSESSEE CLAIMED SU CH BANAKHAT BEEN CANCELLED UPON PAYMENT OF RS.25 LAKHS AND THE LAND WAS SOLD TO S OMEONE ELSE. THIS IS NOTHING BUT MISREPRESENTATION OF FACTS. HE THUS FOUND THE BANA KHAT EXECUTED WITH SHRI APURVA BHARATBHAI SHAH IS BOGUS AND ADDED THE SAID RS.25 LAKHS TO THE INCOME OF THE ASSESSEE. 7. IN APPEAL, WHILE CONFIRMING THE ADDITION MADE BY THE LD. ASSESSING OFFICER, THE LD.CIT(A) OBSERVED AS FOLLOWS:- 5. THE 2 ND GROUND OF APPEAL WAS RELATED TO ADDITION OF RS.25, 00,000/- ON PRESUMPTION BASIS. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE SOLD LAN D FOR RS.3,30,08,580/- IN VILLAGE SHILAJ, TALUKA DASKROI WHICH WAS PURCHASED FOR RS.2,99,20,921/-. H OWEVER, AFTER VERIFICATION OF SALE DEED OF THIS PROPERTY, THE AO FOUND THAT IT WAS SOLD FOR RS .3,51,08,580/-. THUS, THERE WAS APPARENT DISCREPANCY IN THE CONSIDERATION. THE ASSESSEE CONT ENDED THAT HE EXECUTED A BANAKHAT ON 30.08.2004 FOR SALE OF THE SAID LAND WITH SMT. APUR VA BHARATBHAI SHAH FOR CONSIDERATION OF RS.2,50,000/- AGAINST WHICH THE ASSESSEE RECEIVED A N AMOUNT OF RS.2,00,000/-. THEREFORE, FOR CANCELLATION OF THE SAID BANAKHAT, THE APPELLANT HA D TO MAKE PAYMENT OF RS.25,00,000/-. - 4 - IT(SS)A NO.240/AHD/2015 NARENDRA M. PATEL VS. DCIT ASST.YEAR 2009-10 THE AO REJECTED EXPLANATION OF THE ASSESSEE ON THE GROUND THAT BEFORE PURCHASE OF THE LAND FOR RS.24,93,780/- ON 04.09.2004 THE ASSESSEE HAD EXECU TED THE BANAKHAT OF RS.25,00,00/- FOR SALE 1,000 SQ. YARD AREA OF LAND AND RECEIVED AN ADVANCE OF RS.2,00,000/- FROM SMT. APURVA BHARATBHAI SHAH, THAT THE BANAKHAT REVEALED THAT IT WAS EXECUTED ON 30.08.2004 AT THE TIME OF RECEIPT OF ADVANCE WHEREAS THE ASSESSEE HAD USED ST AMP PAPER DATED 29.12.2004 IN THIS DOCUMENT, THAT AS PER CONTENTS ON PAGE 15 OF PARA 4 OF THE SALE DEED, THE ASSESSEE ASSURED THE BUYER THAT HE DID NOT EXECUTE ANY BANAKHAT OR GAVE ANY SECURITY OR GUARANTEE OR CREATED ANY CHARGE ON THE SAID LAND WHEREAS THE ASSESSEE HAD AL READY ENTERED INTO A BANAKHAT AGREEMENT FOR SALE OF THE LAND ON 30.08.2004. THE AO FURTHER MENT IONED THAT SMT. APURVA BHARATBHAI SHAH DID NOT DISCLOSE SUCH RECEIPT OF MONEY FROM THE ASSESSE E IN HER RETURN OF INCOME FOR THE A.Y.2009-10. MOREOVER, SMT. APURVA BHARATBHAI SHAH WAS A PERSON RELATED TO THE ASSESSEE. AS PER REVENUE RECORD, THE LAND SITUATED AT SHILAJ - 22 WAS RECORD ED IN THE NAME OF THE ASSESSEE ON 04.09.2004 AND 03.03.2005. AFTER CONSIDERING THESE FACTS AND C IRCUMSTANCES, THE AO HELD THAT THE ASSESSEE'S CLAIM OF PAYMENT OF RS.25,00,000/- AS CANCELLATION CHARGES OF BANAKHAT WAS BOGUS. THE APPELLANT SUBMITTED THAT THE ADDITION WAS MADE ON BASIS OF PRESUMPTION ONLY. HE CONTENDED THAT PLOT OF THE LAND WAS SOLD TO SMT. APURVA B. SH AH AND OBTAINED CONSIDERATION OF RS.2 LACS ON 30.8.2004 THROUGH CHEQUE AND BANAKHAT WAS MADE ON 2 9.12.2004. HE FURNISHED COPY OF THE BANAKHAT. REGARDING PAYMENT OF CANCELLATION CHARGE S OF RS. 25 LACS, HE SUBMITTED THAT SMT. APURVA B. SHAH DISCLOSED THIS RECEIPT FROM THE ASSE SSEE IN THE RETURN OF INCOME AND CLAIMED EXEMPTION U/S. 54EC BY INVESTING IN NHAI. HE FURNIS HED COPY OF ACKNOWLEDGEMENT OF APPLICATION TO THE NHAI AND RETURN OF INCOME FOR A.Y. 2009-10. HE FURTHER SUBMITTED THAT PAYMENT FOR PURCHASE OF T HE SAID LAND WAS MADE EARLIER, HOWEVER, THE FINAL SALE DEED REMAINED PENDING AND-EXECUTED ON 4. 9.2004. REGISTRATION OF THE LAND COULD BE MADE ON 3.3.2005 BECAUSE THE CONFIRMING PARTY TO TH E LAND GAYER ITS CONSENT TO SALE THE LAND ON 3.3.2005 ONLY. THE APPELLANT DID NOT FURNISH ANY SU PPORTING EVIDENCE TO SUBSTANTIATE HIS EXPLANATION. THE FACTS OF THE CASE, FINDINGS OF THE AO AND SUBMI SSIONS OF THE APPELLANT HAVE BEEN EXAMINED. IT WAS A FACT ON RECORD THAT THE ASSESSEE PURCHASED LA ND AT SHILAJ-522 ON 4.9.2004 AND THE SAME WAS REGISTERED IN THE LAND REVENUE RECORDS OF THE S TATE GOVERNMENT ON 3.3.2005. THE APPELLANT DID NOT DISPUTE THIS FACT AND FINDING OF THE AO ON THE ISSUE. MOREOVER, IT WAS ALSO A FACT THAT THE ASSESSEE ENTERED INTO A SALE AGREEMENT WITH SHRI AP URVA B. SHAH ON 29.12.2004, THAT THE ASSESSEE RECEIVED RS.2 LACS THROUGH A CHEQUE DATED 30.8.2004 FROM SHRI APURVA B. SHAH AND THAT HE DISCLOSED THE RECEIPT OF RS. 25 LACS FROM T HE ASSESSEE IN HER RETURN OF INCOME FOR A.Y. 2009-10 AS SALE CONSIDERATION OF THE LAND WHICH WAS SOLD ON 30.8.2004. SHE INVESTED THE RECEIPTS IN NATIONAL HIGHWAY AUTHORITY OF INDIA, IN TAXABLE BONDS ON 4.8.2004 THROUGH BANKING CHANNEL. THE CRUX OF THE ISSUE WHICH THE AO POINTED OUT IN T HE ASSESSMENT ORDER WAS THAT THE LAND WAS PURCHASED BY THE ASSESSEE ON 4.9.2004 AND ITS ENTRY WAS MADE IN THE REVENUE RECORDS ON 3.3.2005 THEREFORE, IT WAS NOT POSSIBLE TO SALE THE SAME LAN D ON 30.8.2004. THE APPELLANT FAILED TO REBUT THESE FINDINGS OF THE AO. THEREFORE, AFTER HAVING R EGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, - 5 - IT(SS)A NO.240/AHD/2015 NARENDRA M. PATEL VS. DCIT ASST.YEAR 2009-10 IN MY CONSIDERED OPINION, THE ACTION OF THE AO DID NOT WARRANT ANY INTERFERENCE. ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 8. THERE IS REAL INFIRMITY IN THE CASE MADE OUT BY THE ASSESSEE AS IT IS EVIDENT FROM THE RECORDS. IT IS IMPOSSIBLE TO EXECUTE AN AGREEMENT O N A STAMP PAPER PURCHASED ON A SUBSEQUENT DATE. IN THIS PARTICULAR CASE, THE DAT E OF AGREEMENT IS 30.08.2004 BUT STAMP PAPER ON WHICH IT WAS EXECUTED IS OF 29.12.2004. T HUS, THE BANAKHAT IS HAVING NO SANCTION OF LAW AND IS OF NO VALUE IN THE EYE OF LAW OR A FA BRICATED DOCUMENT. WE DO NOT HESITATE TO SAY THAT THE ASSESSEE HAS SOUGHT TO MISLEAD THE LD. ASSESSING OFFICER IN A SURREPTITIOUS MANNER WHICH IS LIABLE TO DEPRECATED. MAKING AN A GREEMENT FOR SALE WITH APURVA AND CANCELLATION OF THE SAME UPON PAYMENT OF RS.25 LAKH S IS NOTHING BUT A PLOY TO EVADE TAX BY THE ASSESSEE. 8.1. WE THEREFORE, FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A) AND WE DO CONFIRM THE SAME AGAINST THE ASSESSEE. 9. IN THE RESULT, APPEAL PREFERRED BY THE ASSESSEE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 05 / 10 /201 8 SD/- SD/- ( WASEEM AHMED ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 05/ 10 /2018 .., . ../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-11, AHMEDABAD 5. !'# , $ , / DR, ITAT, AHMEDABAD 6. #() *+ / GUARD FILE. / BY ORDER, ! //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, AHMEDABAD