Asst. Commissioner of Income Tax, Central Circle-3, Surat, Surat V. Shri Piyush Ranchhodbhai Patel, Surat

ITSSA 27/SRT/2022

AI Insights

The case involves two appeals by the revenue against the separate orders of the CIT(A) concerning the assessee, Shri Piyush Ranchhodbhai Patel, and another individual, Shri Vimal R Patel, for the Assessment Year 2008-09. The appeals were based on the additions made by the Assessing Officer under Section 69 of the Income Tax Act, which were later modified by the CIT(A) to reflect only brokerage income. The revenue challenged the CIT(A)'s decision, arguing that the CIT(A) erred in restricting the addition and not appreciating the evidence provided by the Assessing Officer. The Tribunal examined the submissions, the evidence presented, and the legal provisions applicable, ultimately upholding the CIT(A)'s decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302215 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2022
• Other Referred Cases: Common Cause (Registered Society) and Others Vs Union of India and others, V.C. Shukla 1998 (3) SCC 410, PCIT Vs Devangi, CIT Vs Sant Lal, Alpesh Babu Bhai Patel Vs ITO, Amit Bhai Manubhai Kachadia Vs DCIT, PCIT Vs Delhi International Airport (P) Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Set aside
• Section: 69; 132; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr. ARJUN LAL SAINI, ACCOUNTANT MEMBER IT(SS)A No. 27/Srt /2022 (Assessment Year: 2008-09) (Physical hearing) A.C.I.T., Central Circle-3, Surat. Vs. Shri Piyush Ranchhodbhai Patel, Shivanjali Bunglow, Somnath Mahadev Temple, Parle Point, Surat. PAN No. AMFPP 6025 P Appellant/ Revenue Respondent/ Assessee IT(SS)A No. 22/Srt /2022 (Assessment Year: 2008-09) A.C.I.T., Central Circle-4, Surat. Vs. Shri Vimal R Patel, Shivanjali Bunglows, Somnath Mahadev Temple, Parle Point, Surat. PAN No. AMFPP 6024 N Appellant/ Revenue Respondent/ Assessee Department represented by Shri Ashok B. Koli (CIT-DR) Assessee represented by Shri Akshay Modi, C.A. Date of hearing 03/08/2023 Date of pronouncement 31/08/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the revenue are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-4, Surat (in short, the ld. CIT(A) dated 08/03/2022 and 16/03/2022 for the Assessment year (AY) 2008-09. Certain facts in both the appeals are common, therefore, both the appeals were clubbed, heard together and are decided by common order to avoid the conflicting decision. In case IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 2 of Piyush Ranchhodbhai Patel, the addition was made on substantive basis and in case of Vimal R Patel, the additions are made in protective basis. With the consent of parties, the appeal of Piyush Ranchhodbhai Patel is treated as lead case as the addition in this case was made on substantive basis. The revenue has raised following grounds of appeal: “1. 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.2,22,48,040/- made by the Assessing Officer under Sec.69 of the Act to brokerage income of Rs.4,44,961/- being 2% of Rs.2,22,48,040/-. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the findings made by the Assessing Officer in the assessment order after analysis of the contents of the Satakhat and circumstantial evidences in the form of Bank Account and Balance Sheet which clearly proved the unaccounted investments made by the assessee for the purchase of properties in question. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in directing the AO to estimate 2% brokerage on the transactions of Rs.2,22,48,040/- even though there are sufficient evidences to substantiate the unaccounted investment made by the assessee. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to restrict addition @ 2% as brokerage on the transaction of Rs.2,22,48,040/- despite finding that total value of unaccounted transactions involved is of Rs.2,22,48,040/- and ignoring the fact that there is substantial gap of time between the execution of Sathakat and ultimate sale to the third parties. 5. In addition and in alternative to the ground No. 1, 2, 3 & 4, 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.2,22,48,040/- @ 2% of the brokerage, without considering the provisions of Sec. 292C of the Act and dehors provisions contained in the said section. 6. It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 3 7. The appellant craves leave to add, alter, amend and/or withdraw any round(s) of appeal either before or during the course of hearing of the appeal.” 2. Brief facts of the case are that a search action under Section 132 of the Income Tax Act, 1961 (in short, the Act) was carried out on Piyush Patel Group of Surat on 27/12/2012. Shri Piyush R Patel (assessee) is principal partner of the group, so his residence was also covered. In the search action, certain incriminating material including was recovered and seized. Notice under Section 153A of the Act dated 23/05/2013 was served upon the assessee for filing return of income for the A.Y. 2008- 09. In response to notice under Section 153A, the assessee filed his return of income on 01/07/2013 declaring income of Rs. 38,440/-. The case was selected for scrutiny. The Assessing Officer noted that the assessee has not offered any additional undisclosed income in response to notice under Section 153A. The Assessing Officer issued show cause notice dated 27/02/2015 with regard to unexplained investment shown in relation to land at R.S./Block No. 321 and 221, Gaviyar which was found during the survey action in the office premises of Turmish B Kania, Advocate. The Assessing Officer further recorded that in the show cause notice that in the Satakat, the sale price of area admeasuring 1416 & 708 square meter was decided at Rs. 2.27 crores in respect of said land with Maganbhai Gandabhai, Chimanbhai Gandabhai, Shantubhai Gandabhai, Shantaben Bhanabhai, Manojbhai Bhanabhai, Anilbhai IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 4 Bhanabhai, Subhashbhai Bhanabhai and Jayshreeben Bhanabhai. Further advance of Rs. 5.00 lacs are also paid by assessee on 21/02/2007 i.e. on the date of Satakat. The assessee in the show cause notice was asked to file copy of all agreements with regard to purchase of land at R.S. No. 221 and 321 of area admeasuring 1416 and 708 square meter with details of payment, name and amount. If any sale deed was registered /transferred/notarized in assessees name, if so details with evidence or the deed was cancelled, if cancelled, filed cancellation deed, terms and conditions of cancellation, details of receipt back of money, full address of seller and broker. The Assessing Officer recorded that the assessee was asked to file reply on or before 04/03/2015 and to explain as to why Rs. 2.24 crores should not be treated as unexplained investment as per copy of impounded satakat. Copy of seized Satakat was enclosed with the show cause notice. 3. The Assessing Officer recorded that the assessee filed his reply on 13/03/2015. The contents of reply of assessee is recorded in sub-para (E) of para 4.1 of assessment order. In the reply, the assessee stated that the assessee has already given detailed explanation with evidence in his submission dated 20/08/2014 and once again request to consider such fact in proper perspective. The assessee further stated that whole inference drawn by the Assessing Officer by presumption and assumption, simply based on proforma of Satakat obtained from hard IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 5 disk of third person Tarnish B Kania. In the whole analysis, there is no evidence filed by Mr. Tarnish B Kania that the assessee had instructed him to prepare the said satakat Mr. Tarnish B Kania has given abrupt statement, which could never be the valid base to lead presumption of unaccounted investment to the extent of Rs. 2.24 crore. In fact, there is no registered document with the department that the assessee has actually purchased the land from the said owners. The assessee further explained that the earlier they were interested to purchase the said land from the owner and in furtherance, they have made advance payment of Rs. 5.00 lacs to different land owners by way of cheques, duly recorded in the books of account, however, it was discovered that there was dispute of the title, ownership and right amongst family members of land owner, the assessee decided not to purchase the said land. They have not paid any amount over and above the advance payment. The assessee in his earlier statement, submitted that the ledger copy showing the advance payment by way of account payee cheques to the land owners. There is no other transaction of purchase of land nor there is any unaccounted payment to the land owners. The assessee also filed confirmation letter of land owners namely Tejalkumar Maganbhai Patel and Ajaykumar Maganbhai Patel. The assessee stated that on perusal of statement, one can certainly find that the owners have categorically confirmed the facts as explained by the assessee that they have not paid IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 6 any unaccounted cash towards the alleged purchase of land. Thus, there is no reason to presume that the assessee made unaccounted investment. The assessee further stated that the land is still in the name of owners in the land revenue record, which was sold by owner directly to the other persons, the sale deed of other persons was furnished in earlier statement. It was stated that the Assessing Officer is placing reliance on proforma satakat find from the third party office which is unsigned and there is nothing to support the allegation or transaction of unaccounted investment to the extent of Rs. 2.24 crores. The original land owner and seller of land have not at all asserted that there is any transaction of land of land with assessee or his brother or his family members. The advance payment made by assessee is to the original land owner are still recoverable from them. Due to dispute amongst the owners, they have not yet repaid the advance amount. 4. The reply of assessee was not accepted by Assessing Officer, the Assessing Officer recorded that the impounded Satakat dated 28/02/2007 is executed by Piyush R Patel as purchaser and Maganbhai Gandabhai, Chimanbhai Gandabhai and six other family members for sale of land at R.S./Block No. 321 having area of 1416 square meter and R.S./Block No. 221 having area of 708 square meter both situated in village Gaviyar. The assessee has made payment of Rs. 5.00 lacs to various sellers on the basis of which and the facts gathered and the IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 7 circumstances clearly proved that the assessee and Vimal Patel has entered into transaction with seller party with Gandabhai & Company. The Assessing Officer recorded that the assessee has merely denied the transaction and not appreciated the factual evidence. The Assessing officer recorded that a general practice of land dealing in Surat and noted that investor invests small amount in cheque and huge amount in cash for execution for Satakhat with seller. Such investors are Benami investors and investor of huge cash. The sellers are bounded with evidence of transaction by paying small amount by cheques and notarized Satakat document so they may not deny the transaction. The documents are notarized by pasting photographs and taking thumb impression of sellers and witnesses. The lands thereafter transferred to new purchaser at jantri rate, Jantri rate in year 2011-12 was 25% of market rate. The so called Satakat purchaser introduced a new purchaser to pay the Jantri rate to the original owner directly and makes huge profit in term of cash as Satakat purchaser has already paid huge cash to the original owner and they received back the cash invested from the original owner. Such transaction complete the Satakat transaction by causing loss to the state government by not payment stamp duty. On the basis of such fact, the Assessing Officer invoked the provisions of Section 277 for giving false statement and given final opportunity to explain true and correct fact which can be specifically invested. The IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 8 Assessing officer noted that the assessee has not brought any new fact despite giving opportunity and remain silent. The Assessing Officer held that the impounded document reflect the true transaction made by Piyush R. Patel and Vimal R Patel jointly to evade the concealed investment of Rs. 2,22,48,040 (2,27,48,040 – 5,00,000). The Assessing Officer on the basis of aforesaid observation made addition of Rs. 2.22 crores on account of unexplained investment in hands of Piyush R. Patel as income from other sources on substantive basis and similar amount was added in the hands of Vimal R. Patel under the head “income from other sources” on protective basis in the assessment order passed under Section 143(3) r.w.s. 153A of the Act on 25/03/2015. 5. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed his detailed written submission. The submissions of the assessee are recorded in para 7.1 of order of ld CIT(A). The assessee in his submissions in sum and substance submitted that he is individual, engaged in the business of real estate and regularly assessed to tax from so many years. A search under Section 132 of the Act was carried out on 27/12/2012 at his office and residential premises and concluded on 29/12/2012. During search, various documents/material, statement/ statement of accounts was seized. The statement of assessee was also recorded. In post search verification, his statement was recorded. He IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 9 always complied on summons and directions and gave cogent and authentic evidence in the compliance to various queries raised by Assessing Officer. No discrepancies were pointed out and no defect was shown the assessee in his books of account and record perused before him. The Assessing Officer made addition of Rs. 2.22 crores on account of alleged unexplained investment under Section 69 on the basis of certain paper from the premises of Advocate Shri Tarnish B Kania. No corroborative evidence was seized from the residence of assessee. The papers which was considered as Satakat was found from the third party. The assessee specifically against the addition of Rs. 2.22 crores submitted that the said addition was made on account of alleged unexplained investment for the purchase of agricultural land at R.S. No. 221 and 321, Mauza-Gaviyar, District-Surat. The assessee explained that in the post search action in his office and residential premises, no incriminating material was found of seized. The addition is made on the basis of purely on assumption and presumption. Such addition is based on the material found from the premises of third party and have no direct link or nexus with the assessee despite in depth investigation at the office and residential premises of assessee. During the assessment, the Assessing Officer issued show cause notice dated 18/06/2014 and 27/02/2015 and raised queries exclusively on the basis of Satakat/agreement to sell, its nature and source of investment. The IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 10 assessee duly complied with the notice by filing reply dated 20/08/2014 and 13/03/2015. The assessee furnished copy of such reply and would submit that the Assessing Officer made addition on suspicion and doubt basis that assessee made payment to the extent of 2.22 crores for purchase of land on the basis of format of Satakat. The assessee submitted that he has not entered into any such agreement as recorded on Satakat neither made any own money payment as alleged by Assessing Officer. The registered sale deed dated 15/12/2010 in respect of land at R.S./Block No. 221, Mauza-Gaviyar was executed by real owner to actual purchaser namely Mr. Kartikbhai Babubhai Patel for a sale consideration of Rs. 19,82,400/-. For land at Block/R.S. No. 321, Mauza-Gaviyar, the owner executed sale deed dated 06/06/2011 for a sale consideration of Rs. 60,88,800/- in favour of actual purchaser Mr. Maganbhai Mohanbhai Lakhankiya and others. Confirmation of original land owners Mr. Tejalkumar Maganbhai Patel and Ajaykumar Maganbhai Patel about sale of land was furnished. The assessee also filed confirmation that the land was not sold to the assessee or his family members but they have taken token money of Rs. 5.00 lacs by account payee cheque from assessee and his brother Mr. Vimal R. Patel during F.Y. 2007-08 and they intended to sell to assessee and his brother but deal was cancelled due to their family dispute of title. The assessee furnished proof of advance payment of Rs. 5.00 lacs by assessee and IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 11 his brother. The assessee submitted that the Assessing Officer conveniently ignored all such facts and evidence. The assessee also explained Satakhat and submitted that the said agreement to sell is dated 28/02/2007 while the assessee and his brother made advance payment of Rs. 5.00 lacs in F.Y. 2007-08 and there is no reference of payment of Rs. 5.00 lacs paid through account payee cheque in the alleged Satakhat. There is no reference of total payment in cash as well on 28/02/2007, thus all the circumstantial inference drawn by Assessing Officer is totally baseless, imaginary and unwarranted. The assessee also explained that in the registered sale deed of land by real owner, there is no reference/clause that the assessee or his family member acted as a confirming party. On the basis of such written submission, the assessee prayed for deleting the entire addition. The assessee also relied on certain case laws. To support the contention that such document cannot be used as evidence, relied upon the decision of Hon’ble Supreme Court in Common Cause (Registered Society) and Others Vs Union of India and others in Writ Petition (civil) No. 505 of 2015 and V.C. Shukla 1998 (3) SCC 410 and Ahmedabad Tribunal in ITA No. 1502/Ahd/2015 dated 14/02/2017. 6. The ld. CIT(A) after considering the submission of assessee and the contents of assessment order, recorded that it is not in dispute that the assessee and his brother intending to purchase the impugned land from IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 12 Maganbhai Patel family. The said land belongs to eight co-owners. There was dispute amongst the co-owners and purchasing such land was difficult for assessee. Subsequently, the lands were sold by Maganbhai Patel and his family to two different parties in 2011 and 2013. The assessee furnished copy of registered sale deed of the land for verification of the claim that assessee and his brother has not purchased the said land. The ld. CIT(A) also recorded the details of registration of both the lands in the office of Sub-Registrar alongwith consideration shown thereon. The ld. CIT(A) also recorded that the draft Satakhat was unsigned, was found from the computer of Mr. Tanish B Kania, Advocate. During the search at the residence of assessee, no evidence was found regarding purchase of land by assessee. The ld. CIT(A) recorded that the assessee has given advance for purchase of said land/plots. The ld. CIT(A) on the basis of such circumstances, noted that once the assessee has given advance, getting commission on such land cannot be ruled out, thus the addition if any can be restricted to the brokerage transaction and not to the transaction of sale and purchase of land. The ld. CIT(A) held that Satakhat relied and referred by Assessing Officer was never executed as seen from the seized material. There is no other evidence relating to the transaction, found during the course of search either at the premises of assessee or from Mr. Tarnish B Kania. On the basis of such observation, the ld. CIT(A) held that the IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 13 transaction of investment in the lands is not proved. However, on the same time, the circumstances suggest that the assessee has taken brokerage. On such observation, the ld. CIT(A) estimated 2% of brokerage on the transaction of Rs. 2.22 crores, accordingly restricted the addition to the extent of Rs. 4,44,961/- thereby granted substantial relief to the assessee. Aggrieved by the order of ld. CIT(A), the revenue has filed present appeal before the Tribunal. 7. We have heard the submissions of the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue and learned authorised representative (ld AR) We have also gone through the orders of the lower authorities carefully. The ld. CIT-DR for the revenue submits that during the search operation at the premises of Tanish Kania Advocate various incriminating documents were seized and inventorised. The seized document includes a satakat in the name of assessee as purchaser containing complete details of sellers and the assessee and his brother. The impugned satakat contains the complete details of the property under transaction and the details of the advance payment made by assessee by way of cheques to the owners. The ld CIT-DR for the revenue submits that there is practice in the Surat by land dealers first to enter in to agreement with owner and to make some advance and after finding suitable purchaser to sale to land directly to the subsequent purchaser. The seized documents were duly IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 14 corroborated by the facts that the assessee has made advance payment which is not disputed by the assessee in his statement, which is clear and clinching evidence for making additions. The ld CIT(A) converted the into a commissions income without any basis of submissions of the assessee in this regards. The ld CIT-DR for the revenue prayed for reversal of the finding of the ld CIT(A) and to restore the order of assessing officer. 8. On the other hand, the ld. AR for the assessee supported the order of ld. CIT(A). The ld. AR for the assessee submits that he is individual, engaged in the business of real estate and regularly assessed to tax from so many years. A search under Section 132 of the Act was carried out on 27/12/2012 at the office and residential premises of assessee and concluded on 29/12/2012. Nothing incriminating was found. In post search verification, the statement of assessee was recorded and nothing adverse was found against the assessee. No discrepancies were pointed out and no defect was shown the assessee in his books of account of assessee. The ld AR for the assessee submits that assessing officer made addition of Rs. 2.22 crores on account of alleged unexplained investment under Section 69 on the basis of certain paper from the premises of Advocate Shri Tarnish B Kania. No corroborative evidence was seized from the residence of assessee. The papers which was considered as Satakat was found from the third party. The assessee specifically against IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 15 the addition of Rs. 2.22 crores submitted that the said addition was made on account of alleged unexplained investment for the purchase of agricultural land at R.S. No. 221 and 321, Mauza-Gaviyar, District-Surat. Such addition is made on the basis of purely on assumption and presumption and based on the material found from the premises of third party. There is no direct link or nexus with the assessee despite in depth investigation at the office and residential premises of assessee. The assessee specifically denied of such agreement as recorded on Satakat neither made any own money payment as alleged by Assessing Officer. The ld AR for the assessee submits that registered sale deed dated 15/12/2010 in respect of impugned land was executed by real owner to actual purchaser. Confirmation of original land owners of land was furnished. The assessee also filed confirmation that the land was not sold to the assessee or his family members but they have taken token money of Rs. 5.00 lacs by account payee cheque from assessee and his brother Mr. Vimal R. Patel during F.Y. 2007-08 and they intended to sell to assessee and his brother but deal was cancelled due to their family dispute of title all evidences was conveniently ignored by assessing officer. The ld AR for the assessee submits that he relies on all the submissions made before ld CIT(A) and the order passed by him. 9. The ld AR for the assessee filed copy of sale deeds of the impugned land executed by owners of the land in favour of Kartik Babubhai Patel and IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 16 Maganbhai Mohanbhai Lakhankiya, confirmation of the original land owners namely Tejal Kumar M Patel and other co-owners, copy of land record and copy of statement of Tanish Kania and Mrs Tanish Kania. The ld. AR for the assessee finally submits that no addition can be made in absence of independent material. To support such contention, the ld. Sr. Counsel for the assessee also relied upon the following decisions: (i) Common Cause Vs Union of India (2017) taxamann.com 245 (SC), (ii) CBI Vs V. C. Shukla & others (1998) 1998 taxmann.com 2155(SC), (iii) PCIT Vs Devangi (2017) 88taxmann.com 610(Guj), (iv) CIT Vs Sant Lal (2020) 118 taxmann.com 423 (Delhi), (v) Alpesh Babu Bhai Patel Vs ITO ITA No. 2078/Ahd/2016, (vi) Amit Bhai Manubhai Kachadia Vs DCIT (2019) 105 taxmann.com 341(Surat-Trib) and (vi) PCIT Vs Delhi International Airport (P) Ltd 443 ITR 382(Knt) 10. We have considered the rival submissions of both the parties and with their active assistance has gone through the orders of lower authorities carefully. We have also deliberated on various case laws relied by ld. AR for the assessee. We find that the revenue has raised multiple grounds of appeal. However, the substantial grounds of appeal relate to the deleting the addition of Rs. 2.22 Crore on substantive basis. The assessing officer made addition of Rs. 2.22 Crore by talking view that in the search action on Tanish Kania Advocate a Satakat dated 28/02/2007 was found and seized. Such satakat was executed by Piyush R Patel as purchaser and owners and other co-owners in respect of sale of land at R.S./Block No. 321 having area of 1416 square meter and R.S./Block No. IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 17 221 having area of 708 square meter both situated in village Gaviyar. The assessee has made payment of Rs. 5.00 lacs to various sellers on the basis of which and the facts gathered and the circumstances clearly proved that the assessee and Vimal Patel has entered into transaction with seller party with Gandabhai & Company. The assessing officer recorded the general practice of land dealing in Surat. The Assessing officer held that the assessee has not brought any new fact despite giving opportunity and remain silent. The Assessing Officer held that the impounded document reflect the true transaction made by Piyush R. Patel and Vimal R Patel jointly to evade the concealed investment of Rs. 2,22,48,040 (2,27,48,040 – 5,00,000). The Assessing Officer on the basis of aforesaid observation made addition of Rs. 2.22 crores on account of unexplained investment in hands of Piyush R. Patel as income from other sources on substantive basis and similar amount was added in the hands of Vimal R. Patel under the head “income from other sources” on protective basis. 11. As recorded above, before ld CIT(A) the assessee filed detailed written submissions. The ld CIT(A) on considering such submissions held that it is not in dispute that the assessee and his brother intending to purchase the impugned land from Maganbhai Patel family owned by eight co- owners. There was dispute amongst the co-owners and purchasing such land was difficult for assessee. Subsequently, the lands were sold by IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 18 Maganbhai Patel and his family to two different parties in 2011 and 2013. The assessee furnished copy of registered sale deed of the land for verification of the claim that assessee and his brother has not purchased the said land. The ld. CIT(A) also recorded the details of registration of both the lands in the office of Sub-Registrar alongwith consideration shown thereon. The ld. CIT(A) also recorded that the draft Satakhat was unsigned, was found from the computer of Mr. Tanish B Kania, Advocate. During the search at the residence of assessee, no evidence was found regarding purchase of land by assessee. The ld. CIT(A) recorded that the assessee has given advance for purchase of said land/plots. The ld. CIT(A) on the basis of such circumstances, noted that once the assessee has given advance, getting commission on such land cannot be ruled out, thus the addition if any can be restricted to the brokerage transaction and not to the transaction of sale and purchase of land. The ld. CIT(A) held that Satakhat relied and referred by Assessing Officer was never executed as seen from the seized material. There is no other evidence relating to the transaction, found during the course of search either at the premises of assessee or from Mr. Tarnish B Kania. On the basis of such observation, the ld. CIT(A) held that the transaction of investment in the lands is not proved. However, on the same time, the circumstances suggest that the assessee has taken brokerage. On such observation, the ld. CIT(A) estimated 2% of IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 19 brokerage on the transaction of Rs. 2.22 crores, accordingly restricted the addition to the extent of Rs. 4,44,961/- thereby granted substantial relief to the assessee.it is an undisputed fact that the documents relied upon for making additions were found from the third party. 12. We find that no investigation was carried out by the investigating team against the assessee if the assessee has direct involvement in ultimate sale of the lands or not. There is no statement either during the search or post search enquiry or during the statement which can be proved that the transaction in these papers was ultimately resulted in the sale of the plots of land. Our view is also supported by the various case laws relied by ld AR for the assessee. Thus, in view of the aforesaid factual and legal discussions, we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirm with our aforesaid observation. In the result, the ground of the appeal of revenue is dismissed. 13. In the result, the appeal of the revenue is dismissed. 14. Now adverting to ITA No. 22/Srt/2022 in Vimal R Patel. We find that the substantive addition in case of Piyush R. Patel, has been restricted to the additions of brokerage income. The ld CIT(A) in this appeal has taken a view that no income relating to the transaction of lands in question is required to be taxed in the hand of assessee and deleted the protective additions in the hand of assessee. We are in agreement with the decision IT (SS) A No. 27 & 22/Srt/2022 ACIT Vs Piyush R Patel & One Anr 20 of ld CIT(A) that when the basis of addition itself has not been accepted, therefore, the addition in the hand of assessee as protective additions, will also not survive. In the result, the grounds of appeal raised by the revenue are dismissed. 15. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 31 st August, 2023 in open court. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 31/08/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat