The ACIT Central Circle-3, Surat V. Vasudev Deepchand Goplani, Surat

ITSSA 28/SRT/2022

AI Insights

The case involves two appeals by the Revenue against the orders of the CIT(A) which deleted the additions made by the Assessing Officer regarding unaccounted investments and capital gains related to the purchase and sale of land in Sultanabad. The Assessing Officer had alleged that the land was purchased at a lower registered price and a higher actual price, indicating 'on-money' transactions. The CIT(A) found that the additions were not substantiated by concrete evidence, and the Tribunal agreed, referencing similar cases and precedents where additions based on similar grounds were deleted.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301724 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 01-06-2022
• Other Referred Cases: Pr. CIT vs. Abhisar Buildwell P. Ltd., Pr. CIT vs. Saumya Construction P. Ltd., CIT (Central)-III vs. Kabul Chawla, Shankarlal C. Shah vs. ACIT, ITO vs. Jalwant Jayantibhai Hirpara & Ors., Krishna Kumar Singhania vs. DCIT, Trilok Chand Chaudhary vs. ACIT, DCIT vs. Shivali Mahajan, DCIT vs. M/s S.R. Credits Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Cost of acquisition; Documents seized; Set aside; Capital Gains
• Section: 132; 139; 143(3); 54F; 142(1); 133A; 153A; 69B; 143(2); 13; 119; 22; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर (खोज और जÞती) सं. /IT(SS)A Nos.28/SRT/2022 & 38/SRT/2022 िनधाŊरण वषŊ /Assessment Years: (2010-11 & 2012-13) (Physical Hearing) Assistant Commissioner of Income-tax, Central Circle-3, Surat, Room No.507, 5th Floor, Aayakar Bhawan, Majura Gate, Surat-395001 Vs. Shri Vasudev Deepchand Goplani 3-B,Chandan Park Society, Near Adajan Road, Surat- 395007 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABHPG 3609 B (अपीलाथŎ/Assessee) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Assessee by Shri P. M. Jagasheth, CA राजˢ की ओर से /Respondent by Shri Ashok B. Koli, CIT-DR सुनवाई की तारीख /Date of Hearing 27/07/2023 घोषणा की तारीख /Date of Pronouncement 28/08/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned two appeals filed by the Revenue, pertaining to Assessment Years (AYs) 2010-11 and 2012-13, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals)-4, Surat [in short “the ld. CIT(A)”] dated 24.03.2022, which in turn arise out of separate assessment orders 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”). 2. Since, the issues involved in all these Revenue appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. Page | 2 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 3. First, we shall take Revenue’s appeal in IT(SS)A No.28/SRT/2022, for A.Y 2010-11, wherein the grounds of appeal raised by Revenue are as follows: “[i] On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,77,00,000/- made by the Assessing Officer on account of unaccounted investment on the basis of the incriminating documents belonging to the assessee found and seized during the course of search and seizure conducted? [ii] On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,77,00,000/- made by the Assessing Officer on account of unaccounted investment made on the basis of the incriminating documents without appreciating the nexus between the assessee and the transactions reflected in the incriminating documents found and seized during the course of search proceedings were clearly established during the course of enquiries made in the post search proceedings and subsequent assessment proceedings. [iii] On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.1,77,00,000/- without considering the provisions of Sec. 292C of the Act and de horse provisions contained in the said section. [iv] It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat maybe set aside and that of the assessing officer may be restored to the above extent. [v] 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. The assessee has also raised additional ground of appeal under Rule 11 read with Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, which is reproduced below: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in confirming the action of the assessing officer in framing assessment under section 153A r.w.s. 143(3) of the Act is not tenable in the eye of law since such assessment has been framed beyond the scope of material and evidences found during the course search action carried out u/s 132 of the Income Tax Act, 1961 from the premises of the assessee, hence the ground may be admitted for the limited purpose of protecting the order of the Ld. CIT(A).” 5. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us is an individual and filed his return of income u/s 139 of the Act, for the assessment year 2010-11 on 27.11.2010 Page | 3 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani declaring total income at Rs.1,82,700/-. During the assessment year under consideration, the assessee has derived income from business and profession and from other sources. Thereafter a search action u/s 132 of the Act was carried out on 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 Ruchandni Sub- Group, where assessee is one of the cases u/s 132 of the Act. Consequent to the search action, notices u/s 153A of the Act were issued to the assessee for various assessment years on 28.10.2013. In response to notice u/s 153A, assessee has filed his return of income for the A.Y 2010-11, on 09.12.2013 declaring total income of Rs.1,74,920/-. Then after assessing officer issued notice u/s 143(2) of the Act, on 02.01.2014, which was served upon assessee. The notice u/s 142(1) of the Act, along with questionnaire was issued on 03.09.2014, which was duly served to the assessee. In response to notices u/s 143(2) r.w.s. 142(1) of the Act, the assessee attended from time to time and filed the details called for. 6. During the course of assessment proceedings, it was observed by the assessing officer that assessee, along with five others, have purchased land at R.S. 11, Sultanabad and details of the land are produced as below: Registered Deed No. Date of Registry Name of sellers Name of purchaser Consideration Area of the land Srt/1/at/v/8599 29.09.2009 1.Kanaiyalal L Contractor 2.Hemantkumar L Coontractor 3.Dahiben L Contractor 1. Shri Pitamber B. Ruchandani 2. Shri Kanaiyalal B. Ruchandani. 3. Shri Radhakishan B. Ruchandani 4. Shri Arjun B. Ruchandani, 5. Shri Vasudev D.Goplani. 6. Smt. Pushpaben V Goplani Rs.6,00,000/- 4000 sq.yd. Page | 4 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani All the above purchasers were covered u/s 132 of the Act. During the course of search, various evidences were seized. From the seized papers, it was observed by the assessing officer that land was purchased @ Rs.9,000/- per sq. yard while registry was executed @ Rs.150/- per sq. yard. Thus, assessing officer was of the view that there was payment of amount of “on- money” in the above said transaction. Hence, assessing officer issued a show cause notice, on 09.03.2015. In response to the show cause notice, the assessee has submitted his reply on 18.03.2015, the relevant portion of the said reply is produced as below: “In respect of your contention regarding on money payment of Rs.3,60,00,000/- for purchase of Sultanabad R.S. No.11, we would like to submit that page No.51, 70 & back side of 70 of Annexure-11 are documents from the file of late Shri Arjunbhai Ruchandani and we are unable to explain the actual veracity of the transactions. As it was done by late Shri Arjunbhai Ruchandani and found from the premise which is jointly own by Rucandani brothers and which is till date actually possessed by Meeu alias Monika Arjun Ruchandani. Copy of SMC bill evidencing the possession being of Monika Arjunbhai Ruchandani is attached herewith. Moreover, the amount as shown on page no.51 shows Rs.80,00,000 against Sultanabad Survey No.11. And not Rs.3,60,00,000. Moreover, we are in no way connected with the payment of such amount if at all it is a payment. From the face of it, it seems the amount is some calculation which does not pass the test of actual transaction but more in form of a dumb document evidencing calculation which as per my understanding is very difficult to decode as it is not found from my premises and is not in my handwriting but found from the part of house possessed by Meenu Arjunbhai Ruchadani and still being possessed by her as per the SMC records and bills. Without prejudice to above and with a sight to a razor thin possibility of the amount being added as my income. In such a scenario the so added amount should be allowed as purchase cost of said land and deduction of same should be allowed accordingly as LTCG. Moreover, my husband has disclosed the whole share of sale of Sultanabad land as his disclosure. As he was the legitimate owner of the same, I agree to it unconditionally.” 7. The assessing officer had gone through the above written submissions of the assessee, and then after the assessee’s submission was summarized by the assessing officer as follows: (i) The seized evidences sought to be relied upon are not seized from his possession and so he has nothing to do with it. Page | 5 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani (ii) Even otherwise these documents contain rough workings which will not pass the test of actual transaction and so are dumb documents. (iii) Even otherwise, the amount can only be added as LTCG (long term capital gains). 8. The above reply of the assessee was considered by the assessing officer and assessing officer discussed in his assessment order and rebutted the above reply of the assessee, vide assessment order page no.5 to 20. After doing analysis of the seized documents and reply of the assessee, the assessing officer came to the conclusion that sale consideration is grossly understated in the sale deed by the assessee. The major portion of the transaction has been settled by way of cash and is not reflected in the books of the seller nor the purchaser. The evidences found during the course of search were examined by the assessing officer vis-à-vis reply of the assessee. The assessing officer noted that even though several documents have been found from different individuals, all bear identical amounts as the sale consideration. It is wellnigh impossible for different individuals to make similar notings, especially when they do not enjoy good relations with each other, unless there is divine intervention. That not being the case and as the issue needs consideration in the realms of human possibilities and considerations, a strong reason for presuming the correctness of the notings in the chits exists. The assessing officer observed that the different loose papers seized from different individuals, all indicating of a same consideration and pattern of payment with resultant equal liability amongst all, buttressed by the cheque entries getting cross verified by the actual bank transactions, render these documents and the contents therein, pass in the test of actual transaction. Therefore, the assessing officer held that these documents, emerge as substantial and sufficient evidence to conclude that Page | 6 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani the land bearing R.S.No.11 at Sultanabad was purchased by Ruchandnai family and Goplani family @ Rs.9000/- per sq. yd. The total consideration of transaction came to Rs.3,60,00,000/- but as assessee has executed the registered deed for Rs.6,00,000/- hence amount of Rs.3,54,00,000/- (Rs.3,60,00,000- Rs.6,00,000) was considered the “on-money” component in this transaction. Since the assessee is having 25% share in transaction therefore, “on money” in hands of assessee was added to the tune of Rs.88,50,000/- (25% of Rs.3,54,00,000), u/s 69B of the Act. 9. Since, the assessee`s wife was also holding the 25% share in the above land therefore, assessing officer held that “on-money” payment in the hands of assessee`s wife comes to Rs.88,50,000/- which was also added in the hands of the assessee, u/s 69B of the Act. Therefore, total addition of Rs.1,77,00,000/- ( Rs.88,50,000 + Rs.88,50,000) was made by the assessing officer, in the hands of the assessee, u/s 69B of the Act. 10. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has deleted the addition made by the Assessing Officer. The ld CIT(A) observed that Assessing Officer's basis for making the impugned addition was that the cash which was generated from sale of Magdalla land was used for payment of cash component in Sultanabad land. Once it is held that no ‘on-money’ was generated from Magdalla land there cannot be any on-money payment in the Sultanabad land for which the assessing officer has made impugned addition. The assessing officer has not been able to prove in the assessment order on the basis of the evidences found in the seized material that the cash was generated from any other source which was paid for the Sultanabad land. Therefore, ld CIT(A) deleted the addition of Rs.1,77,00,000/-. Page | 7 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 11. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us, and the assessee has also raised additional ground of appeal under Rule 11 read with Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, challenging the assessment order framed by the assessing officer under section 153A r.w.s. 143(3) of the Act. 12. Learned CIT-DR for the Revenue, vehemently argued that during the course of search, various incriminating material were found and seized. On perusal of seized materials, it was noticed by the assessing officer that the assessee, alongwith his wife Pushpaben V Goplani, and four others owners, had purchased the land situated at R.S. No.11, Sultanabad for Rs.3,60,00,000/- with a rate of Rs.9,000/- per sq. yard whereas sale deed was executed on 29.09.2009 for the consideration of Rs.6,00,000/- which means rate was adopted at Rs.150/- per sq. yard. Thus, there was difference of Rs.3,54,00,000/- ( Rs.3,60,00,000- Rs.6,00,000) between actual sale consideration and shown sale consideration in sale deed which reflected that the assessee, along with five other owners, made ‘On-Money’ Payment of Rs.3,54,00,000/- to the seller parties. The assessee was having 25% share and his wife was also having 25% share in the alleged property, therefore assessing officer has rightly made addition of Rs.1,77,00,000/-, which may be upheld. 13. Learned CIT-DR for the Revenue, also argued that assessee was covered under search action under section 132 of the Act, therefore assessing officer framed the assessment order under section 143(3) r.w.s. 153A of the Income Tax Act, 1961, vide order dated 25.03.2015. The material, which is relevant to the assessee, may be seized by the search team in the house of the assessee or any other place from third party, in both these situations, the assessing officer can frame the assessment order Page | 8 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani under section 143(3) r.w.s. 153A of the Income Tax Act, 1961, hence there is no infirmity in the assessment order framed by the assessing officer under section 143(3) r.w.s. 153A of the Income Tax Act, 1961. 14. On the other hand, Shri P.M. Jagasheth, Learned Counsel for the assessee, defended the order passed by the Ld. CIT(A). Shri Jagasheth, also submitted the following documents and evidences (which were submitted by the assessee during the assessment proceedings and appellate proceedings) before the Bench: (i) Purchase deed of land at R.S. 11, Sultanabad, dated 29.03.2006 for area 5000 sq. yard (vide paper book pages 1 to 24) (ii) Satakhat of land at RS 11, Sultanabad, dated 01.08.2007, for area of 4000 sq. yard (vide paper book pages 25 to 30) (iii) Purchase deed of land at RS 11, Sultanabad, dated 29.09.2009 for area of 4000 sq. yard (vide Paper book pages 31 to 50) (iv) Partnership deed of Milestone Developers, dated 21.09.2010, (vide paper book pages 51 to 57) (v) Sale deed of land at RS No.11, Sultanabad, dated 15.06.2011 (vide paper book pages 58 to 80) (vi) Amendment in sale deed of land at RS No.11, Sultanabad, dated 20.03.2012 (vide paper book pages 81 to 89) (vii) Partnership deed of change in constitution of Milestone Developers, dated 13.03.2012 (vide paper book pages 90 to 102) 15. With help of the above factual documents, the ld Counsel submitted that there is no evidence with the assessing officer to say that assessee has paid ‘on-money’. The assessee purchased the property as the jantri rate (Government rate) prevailing at that point of time. The transaction was through banking channel and assessee has disclosed the transaction in the Page | 9 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani return of income, moreover, the assessee has paid the appropriate tax on the transaction, if any, applicable. The ld Counsel also argued that the seized evidences/documents, were not seized from assessee`s residence and the working in question on the said documents were rough workings and hence these are dumb documents, therefore addition should not be made in the hands of assessee. The ld Counsel also relied on the following case law:  Pr. CIT vs. Abhisar Buildwell P. Ltd. Civil Appeal No.6580 of 2021 (SC)  Pr. CIT vs. Saumya Construction P. Ltd. [2017] 81 taxmann.com 292 (Guj)  CIT (Central)-III vs. Kabul Chawla (2015) 61 taxmann.com 412 (Del)  Shankarlal C. Shah vs. ACITITA No.1359/AHD/2016 (ITAT Surat)  ITO vs. Jalwant Jayantibhai Hirpara & Ors. ITA No.386-388, 396/AHD/2017 (ITAT, Surat) ITA No.2220-2222, 2304/AHD/2016 (ITAT, Surat)  ITO vs. Govindbhai Savjibhai Patel ITA No.378/SRT/2019 (ITAT, Surat)  Krishna Kumar Singhania vs. DCIT [2017] 88 taxmann.com 259 (ITAT, Kolkata)  Trilok Chand Chaudhary vs. ACIT ITA No.5870/Del/2017 (ITAT, Delhi)  DCIT vs. Shivali Mahajan ITA No.5585/Del/2015 (ITAT, Delhi)  DCIT vs. M/s S.R. Credits Pvt. Ltd. ITA No.5216/Del/2015 (ITAT Delhi)  Pavitra Realcon (P.) Ltd. vs. ACIT [2017] 87 taxmann.com 142 (ITAT Delhi) Page | 10 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 16. So far additional ground raised by the assessee is concerned, the ld Counsel pleaded that action of the assessing officer in framing the assessment under section 153A r.w.s. 143(3) of the Act is not tenable because said assessment was framed by the assessing officer beyond the scope of material and evidences found during the course of search action carried out under section 132 of the Act. For the documents seized from the third premises, the assessing officer ought to have framed assessment under section 153C of the Act, hence ld Counsel contended that assessment order framed by the assessing officer under section 153A r.w.s. 143(3) of the Act, may be quashed. 17. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. Though facts have been discussed in detail in the foregoing paragraphs, however in the succinct manner, the relevant facts and background are reiterated in order to appreciate the controversy and the issue for adjudication. The assessee is an individual and derived income from professional receipt. The assessee, has filed his return of income on 27.11.2010 declaring total income of Rs.1,82,700/-. There was a search u/s 132 of the Act on 05.03.2013 in the premises of the assessee, as part of Diamond Group of Surat. During the course of search various incriminating material was found and seized. In response to the notice u/s 153A of the Act, the assessee filed the return on 09.12.2013 declaring total income of Rs.1,74,920/-. The assessing officer completed the assessment u/s 143(3) r.w.s. 153A on 25.03.2015, by making addition on account of unexplained investment u/s 69B of the Act, totaling to Rs.1,77,00,000/- (Assessee`s Page | 11 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani hand Rs.88,50,000 + protective addition in respect of share of assessee`s wife Rs.88,50,000) 18. In the assessment order, the assessing officer has brought to tax Rs.1,77,00,000/- unexplained investment u/s 69B of the Act. Actually 50% share in the Sultanabad land was by Goplani family consisting of the assessee and his wife Mrs. Pushpaben Goplani (25% each), and the balance 50% was owned by Ruchandani Family consisting of 4 members (12.5% each). However, the assessee in assessment year 2012-13 offered the entire income generated from Sultanabad land in his hands as the investment in the land, was that of the assessee and his wife Pushpaben was name lender. According to the assessing officer, the assessee, along with his wife Mrs. Pushpaben Goplani and 4 family members of Ruchandani family viz. Radhakishan, Pitamber, Monika and Kanaiyalal, purchased 4000 sq. yard of Sultanabad land (RS no.11) from contractor family for a total consideration of Rs.6,00,000/- on 29.09.2009. The assessing officer held that as per the seized papers, the said land was purchased at the rate of Rs.9000 per sq. yard as against a registered rate of Rs.150 per sq. yard and an on-money amount of Rs.8,850/- per sq. yard (Rs.9000- Rs.150) was paid in cash. Before the assessing officer, the assessee submitted that the seized evidences were not seized from his residence and the working in question on the said documents were rough workings and hence are dumb documents. The assessing officer did not accept the contention of the assessee and held that the assessee, his wife with Ruchandani family members, as per page 117 and 119 of Annexure A-1 had received on money on land transaction of Magdalla Survey No. 104 and the said money was invested by the assessee and Ruchandani family in the land in question at Sultanabad. Page | 12 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 19. The ld CIT(A) observed that land at Magdalla Survey No.104 was sold by Mr.Mahesh Patel HUF and Pitamber Ruchandani, associate of the assessee. The assessing officer had additions towards on-money receipts on sale of said Magdalla land in the hands of Mr. Mahesh Patel HUF on the basis of the same set of seized material which are relied upon by the assessing officer in the present order. The ld CIT(A) further noted that in case of assessee, Mr. Mahesh Patel HUF, for assessment year 2008-09, the CIT(A)-1, Surat, in Appeal No.10818/2016-17 dated 26.11.2019 while deciding the appeal of Mr Mahesh Patel HUF for assessment year 2008-09 when the Magdalla land was actually sold held as under: “keeping in views all the facts and circumstances revealed in above paragraphs and also the above decision of Hon'ble ITAT, Surat in the case of purchasers of the impugned land the addition of Rs.7,63,29,140/ made in the hands of assessee is held to be not supported by evidences or cogent reasoning. The addition is solely based on dumb document and price adopted in unrealistic and improbable hence, it is devoid of merits. The Hon'ble ITAT, Surat being final fact finding authority has upon due consideration of all evidences and appreciation of facts held in the case of purchasers that there is no merit in adopting the sale consideration for impugned land at rate of Rs.15777 per sq. mtr. bases on nothings in seized material naturally in the case of sellers to the sale consideration @ 15777 per sq. mtr. can’t be adopted as the sale consideration in impugned transaction cannot be different for seller and for purchaser. In view of all the above, the impugned addition made by the Ld. assessing officer is hereby directed to be deleted.” 20. It is important to note that in the above order, the CIT(A) has even referred to the appellate orders in the case of the purchasers of Magdalla land, wherein assessing officer had made similar additions towards on- money paid on the basis of the evidences which are relied upon by the assessing officer in the present case ( assessee`s case). So in the case of the purchasers as well, the additions have been deleted by CIT(A) and the same has been confirmed by ITAT in the order ITA No.386, 387, 388, 396/AHD/2017, 2220, 2221, 2222,2304/AHD/2016 dated 25.10.2019.Therefore, ld CIT(A) observed that contention of the assessing officer in taxing the on-money paid in Sultanabad land survey No.11, was Page | 13 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani received/sourced by the assessee and Ruchandani family members by sale of Magdalla land, survey no. 104. Now the CIT(A) has deleted the ‘on- money’ payment with reference to Magdalla land in the hands of the 9 purchasers and receipt of on-money was deleted even in the hands of Mr. Mahesh Kumar Patel HUF, who was 50% shareholder in the land sold. The appellate authorities have held on the basis of the same set of evidences that no ‘on-money’ was generated in the Magdalla land transaction. That being the case there cannot be the on-money payment in the Sultanabad land for which the assessing officer has made the addition in the impugned order. The Assessing Officer's basis for making this addition is that the cash which was generated from sale of Magdalla land was used for payment of cash component in Sultanabad land. Once it is held that no ‘on-money’ was generated from Magdalla land, there cannot be any ‘on-money’ payment from the said source for the Sultanabad land. The assessing officer has not been able to prove in the assessment order on the basis of the evidences found in the seized material that the cash was generated from any other source which was paid for the Sultanabad land. Therefore, ld CIT(A) deleted the addition made by the assessing officer of Rs.1,77,00,000/-. 21. We note that Hon`ble Delhi High Court in the case of Vineeta Gupta, [2014] 46 taxmann.com 439 (Delhi), held that where assessee along with her husband admitted that she had acquired 1/3 share in a property and offered same as her undisclosed investments in search and approached Settlement Commission offering higher sum which amounted to 1/3rd share in said property, merely because sellers had declared higher undisclosed income, it could not bind assessee and result in addition to her income in absence of concrete evidence. The detailed findings of the Hon`ble Court is reproduced below: “12. After having heard the arguments of the learned counsel for the parties and having examined the relevant papers on record as also a copy of the Settlement Page | 14 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani Commissioner's order dated 31.12.2010, which had been handed over to us by Mr Sahni across the bar, we are of the view that the impugned order dated 21.05.2012 does not call for any interference. The fact that Smt. Lata Jain and Sh. Roshan Agarwal had together declared a sum of Rs 16 crores as undisclosed income in respect of the said transaction cannot, in our view, bind the respondent No.1 and her husband Sh. Gopal Gupta. The respondent No.1 and Sh. Gopal Gupta were not privy to the settlement application filed on behalf of Smt. Lata Jain and Sh. Roshan Agarwal. In any event, what the Settlement Commission has said in the order in respect of Smt. Lata Jain and Sh. Roshan Agarwal, is that as per their calculations the premium amount came to Rs 13.3 crores but since the applicants therein (Smt. Lata Jain and Sh. Roshan Agarwal) had declared more than that, the disclosure needed no disturbance. It was also noted that Sh. Gopal Gupta had surrendered a lesser amount of Rs 6.5 crores. We may point out that Rs 6.5 crores had been disclosed in the initial statement given by Sh. Gopal Gupta at the time of the search and seizure operation and the figure was subsequently enhanced to Rs 7.61 crores at the time the application for settlement was made before the Settlement Commission. The Settlement Commission in its order dated 31.12.2010 did not fix any figure as to the amount of undisclosed amount. It only stated that since the amount declared by the applicants therein (Smt. Lata Jain and Sh. Roshan Agarwal), was much more than what had been surrendered by Sh. Gopal Gupta and what had been computed by the Department, the disclosure made by them needed no disturbance. 13. It is evident from the discussion above that there is no dispute that the value of the property in question, even as per the Revenue, was Rs 130 crores. If a further sum of Rs 3 crores was added to it, to which nobody objected, by way of registration charges, the value would be Rs 133 crores. 1/3rd of this would come to Rs 44.34 crores. The respondent No.1 and her husband had disclosed Rs 36.73 crores as investment in the said property leaving a balance of Rs 7.61 crores which they declared as undisclosed amount in their settlement application. In other words, the full value of the 1/3rd share in the property has been accounted for. The Revenue cannot attempt to add anything more to this value in the absence of any concrete evidence. If the stand taken by the Revenue were to be accepted, then the value of the property, as mentioned above, would come to Rs 158.19 crores, which, as pointed out by Mr Tripathi, is nobody's case. In any event there is not an iota of evidence to indicate that the value of the property was anything but Rs 130 crores. 14. In view of the foregoing discussion, we do not find any perversity in the impugned order dated 21.05.2012 passed by the Settlement Commission under Section 245D(4) of the said Act so as to warrant any interference. The writ petition is dismissed. There shall be no order as to costs.” 22. We note that on the identical facts, the Coordinate Bench of ITAT Surat in the case Shri Govindbhai Savjibhai Patel, ITA No.378/SRT/2019, for AY 2008-09, order dated 18.06.2021, held as follows: Page | 15 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani “This appeal by Revenue is directed against the order of learned Commissioner of Income Tax (Appeals)-2, hereinafter referred as “ld. CIT(A)” Surat dated 14.05.2019 for the assessment year (AY) 2008-09. The Revenue has raised the following grounds of appeal: 1. Whether on the facts and circumstances of the case and as per law, the Ld. CIT(A) was justified in deleting the addition of Rs.1,69,62,031/- made by the AO on account of unexplained investment in the land despite the facts that the addition was made on the basis of concrete evidences found & seized during the Search carried out on the premise of one of the seller namely Shri Pitamber B. Runchandani ? 2. Whether on the facts and circumstances of the case and as per law, the Ld. CIT(A) was justified in deleting the addition by treating the seized papers as ‘Dump Paper’ and also the denial of application of Section 132(4A) of the Act? 3. Whether on the facts and circumstances of the case and as per law, the Ld. CIT(A) was justified in deletion of the addition made by the Assessing Officer without appreciating the facts that the part of entries on seized papers are tallied with the figures shown in registered sale deed ? 4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of Assessing Officer may be restored to the above extent. 2.At the outset of hearing, the ld. Authorized Representative (AR) of the assessee submits that the grounds of appeal raised by Revenue are covered by the decision of Tribunal in assessee’s co-owners case in ITA No. 385 to 388, 396/AHD/2017, ITA No. 2220 to 2222 & 2324/AHD/2016, dated 25.10.2019. The ld. AR of the assessee submits that similar additions on account of unexplained investment in land bearing S. No. 104, Magdalla, Surat were made by Assessing Officer (AO) in other co-owners case. On appeal before the ld. CIT(A), the addition in all cases were deleted. The Revenue filed appeal before the Tribunal and in all aforesaid cases the order of ld. CIT(A) was upheld. The ld. AR of the assessee submits that there is no variation in the fact, the assessee is one of the co-owner being having 1/9 th share in the said piece of land. The ld. AR of assessee furnished the copy of Tribunal’s order dated 25.10.2019. 3.On the other hand, the ld. Departmental Representative (DR) for the Revenue after going through the grounds of appeal and the order of Tribunal in assessee’s co-owners case submits that he strongly relied upon the order of Assessing Officer (AO). 4. We have considered the rival submission of both the parties and have gone through the orders of the lower authorities. We have seen that at the time of passing the assessment order the assessing officer made addition of Rs. 1.69 Crore on account of unexplained investment. The ld CIT(A) deleted the additions by taking view that the conclusion drawn by the assessing officer unrealistic and falls beyond scope of probability. We further find that similar additions of equallant amount in each of co- owners were made and in all case the additions Page | 16 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani were deleted by ld CIT(A). And of further appeal before the Tribunal in all cases the order of ld CIT(A) was upheld. Thus, in our view, the grounds of appeal raised by Revenue is covered by the decision of Tribunal in assessee’s co-owners case decided by Tribunal vide order dated 25.010.2019 (supra). For completeness of this order, the relevant part of the order of Tribunal is extracted below: “6.On appraisal of the above said finding, we noticed that the search and seizure action was taken on the premises of Shri Pitamber B. Ruchandani where from some paper found and seized. Shri Pitamber B. Ruchandani was one of the co- sellers. The loose papers were marked at page no. 117 to 119. The statement of the Pitamber B. Ruchandani was recorded in which he denied about the execution of the said piece of papers. However, he admitted that the hand- writing of the paper was of Shri Arjundas Rupchandani his brother who had died. He stated that he received an amount in accordance with the sale-deed through cheques. The statement of another co-owner Shri Mahesh G. Patel was also one and the same. The assessee and other 9 purchasers nowhere cross- examined the co-owners. The documents is not signed by any party i.e. buyers and seller. The documents speaks no date of execution, the documents were also contained the brokerage which nowhere claimed by the seller as well as buyers. The documents also speaks about the divided of purchasers amount @ 25% whereas the seller are only two. The loose papers also speak about the property at R.S No. 105 which was not the part of the transaction. All the circumstances nowhere speak about the cogent and convincing reasons to raise the addition on the part of the purchasers. Moreover the document was not found in possession of the purchasers, therefore, the presumption raised in view of Section 132(4A) of the Act becomes non-applicable. We also find that the CIT(A) has sought the remand report from the AO which nowhere clearly speaks about the sale of land is a very high amount as mentioned in the impounded papers. Remand report speaks that the seller nowhere admitted any on money transaction even the documents were not executed by them also. The report obtained from the revenue office also nowhere speaks so high rate as mentioned in the impounded loose papers. The English version of the jantry is also hereby reproduced as under:......... 7. The assessee purchased the land @ 469.87 per sq. mt. which is in consonance with the rate obtained from sub-registrar. However, the Assessing officer adopted the rate @ 13189 per sq. mt. (Rs.15777/- per sq. yard) which seems highly improbable. The assessee subsequently converted the land from agricultural land into non-agriculture and for commercial purpose and then sold it to Veer Developers for a sum of Rs.4,74,76,000/-. Taking into account all the facts and circumstances on record, we nowhere found any justification to rely the documents impounded from co-owner to hold the view of Assessing Officer justifiable, therefore, taking into account all the facts and circumstances mentioned above, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, We affirm the finding of the CIT(A). 8. In the result, appeal filed by the revenue is hereby ordered to be dismissed. Page | 17 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani ITA Nos.386 to 388/Ahd/2017 & 396/Ahd/2017 & 2221/Ahd/2016, 2222/Ahd/2016 & 2304/Ahd/2016 9. The facts of the present case are quite similar to the fact of the case as narrated above while deciding the ITA. No.2220/Ahd/2016, therefore, there is no need to repeat the same. The matter of controversy is also the same. The finding given above while deciding the appeal of the assessee bearing ITA. No.2220/Ahd/2016 is quite applicable to the facts of the present case as mutatis mutandis being the Assessee are the co-purchaser in the land. Accordingly, these appeals of the revenue are hereby ordered to be dismissed on similar lines. 10. In the result, appeals filed by the revenue are hereby ordered to be dismissed. 5. Considering the decision of Tribunal in co-owners cases on similar set of fact and on similar ground and respectfully following the order of Tribunal, the appeal of Revenue is dismissed. 6. In the result, appeal of Revenue is dismissed.” 23. Hon`ble Jurisdictional High Court of Gujarat in the case of Nageshwar Enterprises, [2020] 122 taxmann.com 41 (Gujarat), held that where Assessing Officer made addition in hands of assessee firm for unaccounted investment and purchases merely on basis of confessional statement of assessee firm's partner before DRI, but no other evidences were bought on record, said addition was to be deleted. On the identical facts, the Coordinate Bench of ITAT- Ahmedabad in the case of Rajvee Tractors (P.) Ltd, [2022] 143 taxmann.com 330 (Ahmedabad - Trib.) held that where Assessing Officer made addition in hands of assessee-company on basis of a draft sale deed of property between assessee-company and a developer on purchase of property being reported less/short by it, since said draft deed was never signed by assessee and application filed by developer before Settlement Commission admitting to have invested certain amount of unaccounted income was not provided to assessee for confrontation, impugned additions were to be deleted. Therefore, at the cost of repetition we state that the Assessing Officer's basis for making the addition, in the hands of the assessee, is that the cash which was generated from sale of Page | 18 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani Magdalla land was used for payment of cash component in Sultanabad land. Once it is held that no ‘on-money’ was generated from Magdalla land, there cannot be any ‘on-money’ payment from the said source for the Sultanabad land. The assessing officer has not been able to prove in the assessment order on the basis of the evidences found in the seized material that the cash was generated from any other source which was paid for the Sultanabad land. Therefore, based on these facts and circumstances, we note that conclusion reached by ld CIT(A) is correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the appeal of the Revenue. 24. Since we have confirmed the findings of ld CIT(A), therefore, additional ground raised by the assessee, under Rule 11 read with Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, does not require adjudication, as it rendered academic and infructuous. 25. In the result, appeal filed by the Revenue, in ITA No.28/SRT/2022, is dismissed. 26. Now we shall take Revenue’s appeal in IT(SS)A No.38/SRT/2022, wherein the grounds of appeal raised by the Revenue are as follows: “(1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made by the Assessing Officer by computing the Short Term Capital Gain of Rs.1,00,05,580/- and Long Term Capital Gain of Rs.2,21,93,000/- totaling to Rs.3,21,98,580/-, as against the Long Term Capital Gain of Rs.3,12,00,000/- shown by the assessee in the return of income in respect of Sultanabad property, ignoring the detailed findings given by the Assessing Officer after analyzing the clinching evidences found during the course of search proceedings. (2) In addition to ground No.(1), on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of undisclosed capital gain of Rs.9,98,580/- made by the assessing officer, ignoring the detailed findings given by the Assessing Officer in the assessment order which were based on the incriminating seized documents during the course of search proceedings. Page | 19 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani (3) In addition to and without prejudice to ground No.(1) & (2), on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in determining the total capital gain of Rs.2,89,72,530/- as against that computed and offered by the assessee at Rs.3,16,22,530/- which indicate towards erroneous finding and conclusion by the Ld. CIT(A). (4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the substantive addition of Rs.36,24,917/- to Rs.10,75,000/- and also erred in deleting the protective addition of Rs.1,35,71,083/-, on account of Dalali income without considering the fact that the additions were 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. (5) In addition to and in alternative to the ground No.1, 2 & 4, 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 Sec.292C of the Act and dehors provisions contained in the said section. (6) It is, therefore, prayed that the order of the Ld.CIT(A)-4, Surat may be set aside and that of the assessing officer may be restored to the above extent. (7) 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.” 27. The assessee has also raised additional ground of appeal under Rule 11 read with Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, which is reproduced below: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in confirming the action of the assessing officer in framing assessment under section 153A r.w.s. 143(3) of the Act is not tenable in the eye of law since such assessment has been framed beyond the scope of material and evidences found during the course search action carried out u/s 132 of the Income Tax Act, 1961 from the premises of the assessee, hence the ground may be admitted for the limited purpose of protecting the order of the Ld. CIT(A).” 28. Ground No.1 to 3 raised by the Revenue’s in IT(SS)A No.38/SRT/2022 relate to deleting the additions made by the Assessing Officer by computing the Short Term Capital Gain of Rs.1,00,05,580/- and Long Term Capital Gain of Rs.2,21,93,000/- totaling to Rs.3,21,98,580/-, as Page | 20 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani against the Long Term Capital Gain of Rs.3,12,00,000/- shown by the assessee in the return of income in respect of Sultanabad property. 29. Brief facts qua the issue are that assessee had not filed his return of income u/s 139 of the Act, for the assessment year 2012-13. Thereafter a search action u/s 132 of the Act was carried out on 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 Ruchandni Sub Group. Shri Vasudev Deepchnad Gopalni 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, notices u/s 153A of the Act were issued to the assessee on 28.10.2013. In response to notice u/s 153A of the Act, the assessee has filed his return of income for the A.Y 2012-13 on 31.03.2014, declaring total income of Rs.3,19,08,290/-. The basic facts relating to Shri Vasudev Deepchnad Gopalni, have already been narrated by us in the beginning of this order therefore we do not repeat them for the sake of brevity. Succinct fact qua ground No.1 are that during the assessment proceedings, the assessing officer observed that the assessee along with four family members of Ruchandani family viz. Pitamber, Radhakishan, Kanaiyalal, and Monika 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 25%). 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 five (5) co-owners of the land totalling to Rs. 10,02,96,000/-. During the assessment proceedings, the assessing officer issued show cause notice to the assessee asking him as to why 50% Page | 21 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani of the on-money received from M/s Milestone Developers amounting to Rs.5,01,48,000/- should not be taxed in his hands. As the assessee had offered the entire 50% of the capital gain earned on the transfer of the land in his own hands though he himself and his wife Mrs Pushpaben were the owners in the said land having 25% each share. This fact that Mrs Pushpaben was merely a name lender, has been accepted when the original investment was made in the Sultanabad land in AY 2010-11. Therefore, the assessing officer also held that assessee is 50% owner of the Sultanabad land though a protective addition of 25% of capital gains was made in the hands of Mrs. Pushpaben. In deciding this issue in AY 2010-11, the Revenue authorities have accepted this fact that the assessee is 50% owner of Sultanabad land. 30. The assessing officer noted that during the course of search in premises of the assessee and Ruchandani 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. The assessing officer, after considering the assessee`s submission, observed that the entire 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- A1, 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 sq. 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.5,01,48,000/- (50% of Rs.10,02,96,000). Page | 22 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 31. Subsequently, the assessing officer has bifurcated the purchase of the land in question in two parts i.e. 5000 sq. yard on 29.03.2006 and 4000 on 29.09.2009 and thus, worked out the Long term capital gain (LTCG) of Rs.2,21,93,000/- and Short term capital gain (STCG) of Rs. 1,00,05,580/-. The assessee submitted before the assessing officer that though 4000 sq. yard was registered on 29.09.2009, however it was purchased in 2007 and entire purchase consideration was paid by cheques in 2007 itself. The assessing officer did not accept the assessee's submission and determined the capital gains on the basis of date of execution of purchase deed i.e. 29.09.2009. The assessee had declared long term capital gain (LTCG) on Sultanabad Land of Rs. 3,12,00,000/-. However, the assessing officer has determined the STCG of Rs. 1,00,05,580/- and LTCG of Rs. 2,21,93,000/- as against the long term capital gain (LTCG) shown by assessee at Rs. 3,12,00,000/-. During the assessment proceedings, the assessee submitted its reply before the assessing officer, and the assessing officer after considering the reply of the assessee, has made the addition in the hands of the assessee ( vide assessment order page No.2 to 36). These two additions namely, STCG of Rs. 1,00,05,580/- and LTCG of Rs. 2,21,93,000/-, made by the assessing officer, relate to undisclosed Long Term and Short Capital Gain, as per the detailed reasoning, mentioned in the assessment order. In the assessment order, the assessing officer has brought to tax Rs.2,21,93,000/- as Long Term Capital Gain (LTCG) and Rs. 1,00,05,580/- as Short Term Capital Gain (STCG). Against these additions, the assessing officer allowed the total LTCG offered by the assessee of Rs. 3,12,00,000/- in the return of income filed in response to notice u/s 153A of the Act. These two additions (STCG of Rs. 1,00,05,580/- and LTCG of Rs. 2,21,93,000/-) are on the same issue with reference to transfer of R.S. no 11, Sultanabad land. Page | 23 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 32. Aggrieved by these two additions, (STCG of Rs.1,00,05,580/- and LTCG of Rs. 2,21,93,000/-), the assessee carried the matter in appeal before ld CIT(A), who has deleted these additions. The ld CIT(A) noted that the rates adopted by the assessing officer for the impugned land of Sultanabad, Surat i.e. @ Rs.17000/- per sq. yard is not based upon the actual and direct evidence. However, the Ld.CIT(A) has stated that 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. Besides, the ld CIT(A) treated the entire gain as long- term capital gain and observed that the Sultanabad land measuring 4000 sq. yards was purchased in 2007 as the said land was registered only on 29.09.2009. 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. Therefore, ld CIT(A) directed the assessing officer 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. The ld CIT(A) worked out the long term capital gain at Rs.2,89,72,530/-, as against the LTCG offered by the assessee of Rs. 3,12,00,000/- and this way, the ld CIT(A) deleted the addition. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. 33. Learned CIT-DR for the Revenue vehemently argued that the rates adopted by the assessing officer for the impugned land of Sultanabad, Surat i.e. @ Rs.17000/- per sq. yard is based upon the evidences found and seized. However, the Ld.CIT(A) has simply stated that 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. As per the Ld.CIT(A), the only evidence available is page 49 of Annexure- AI found from the residence of the assessee which mentioned Rs.17,000/- but it is not for the 9000 sq. yars but 687.5 sq. yards. Further, the Ld.CIT(A) resorted to the statement of the Page | 24 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani assessee, wherein, he has admitted that 5400 sq. yards were sold @ Rs.17,000/- per sq. yard. But the Ld.CIT(A) has not appreciated the fact that admission of the assessee is a part of his confrontation with his co- partners in the impugned deal. Had the assessee not confronted, he would not have admitted @ 17,000/- even for 5400 sq. yard. It is pertinent to mention here that the assessing officer had a cogent evidence to show that the rates are actually adopted at 17000/- per sq. yard which are duly corroborated with the admissions made in the statements by the assessee as well as by other parties who were involved in the land dealing, however, there is not a single evidence from the assessee's side to show that the land was sold at lower rates. Under the circumstances, the decision of Ld.CIT(A) adopting the rates per yard at lower rates is not acceptable. 34. The ld DR further stated that whether the capital gain pertains to long term or short term. In this regard, the Ld.CIT(A) has relied upon the kabja receipt dated 01.08.2007, wherein details of payments made by 12 chques of Rs.25,000/- and 6 cheques of Rs.50,000/- of different banks, are mentioned. Further, the Ld.CIT(A) relied upon the statements of the assessee that the sale deed could not be executed in 2007, as some members of the vendor's family were not present in Surat, as they were based in Mumbai. The ld DR stated that kabja receipt cannot be the part of transfer, merely only kabja receipt, it cannot be assumed that possession was given. Further, evidences were found in which, it was seen that on-money was paid by the Goplani family 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 and therefore addition made by the assessing officer may be sustained. Page | 25 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 35. Shri P. M. Jagasheth, Learned Counsel for the assessee, begins by pointing out that the rates adopted by the assessing officer for the impugned land of Sultanabad, Surat i.e. @ Rs.17000/- per sq. yard is not based upon the registered documents. Seized material shows rate of Rs.17,000/- par square yard only for part of land and no evidence of sale of remaining land at rate of Rs.17,000 has been found during the search proceeding. Working of only part of land found out during the search proceeding itself proves that land has been sold in two parts and at two different rates. For estimating sale price of plot admeasuring 3600 square yards sold at Rs.17000 per square yards, assessing officer merely relied on the evidence of on-money paid on the other piece of land and not a single evidence regarding that particular piece of land is found by search team. On the other hands, the assessee produced copy of sale deed, statement recorded u/s 132(4) of the Act, relied on which the assessing officer made addition of on-money at rate of 17000, specifically stated that the first piece of land sold at rate of of Rs. 5000 per square yard. All the evidences found during the search indicated the rate of 17000 for second part of land only and not a single evidence which proves the fact that the first part of land sold at any else rate then registered sale deed.The assessee and his all group members during their statement recorded u/s 132(4) as well as 131 of the Act accepted and clarified the facts that they sold the land in two parts. One part sold to Milestone group at Rs. 5000 per square yards and the other piece of land at higher rate i. e. Rs. 17000 per square yards. The ld Counsel also stated that assessing officer has made addition of unexplained investment in A.Y.2010-11 for purchase of 5000 square yard land on the basis of seized material related to S. No. 104, Magdalla land. But Hon'ble CIT(A) in case of Maheshbhai Patel HUF (Co-seller of S. No. 104, Magdalla) deleted the addition of receipt of on-money on sale of S. No. 104, Magdalla land. Further Hon'ble ITA T, Surat has also uphold the decision of the CIT(A) in Page | 26 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani case of purchasers of S. No. 104, Madgalla land viz. Shri Jalwant Fayantilal Hirpara, Shri Labhubhai Jayantilal Hirpra, Smt Alpaben Pareshbhai Kalsariya, Shri Ashok Mohanbhai Balar, Shri Dhansukhbhai K. Korat, Smt, Shantaben D. Kalsariya, Shri Suresh Laljibhai Patel, Shri Paresh Danabhai Kasariya, Shri Govindbhai Savjibhai Patel. 36. Shri Jagasheth, further argued that assessee purchased lands at Sultanabad from Contractor family in two pieces admeasuring 5000 square yards and 4000 square yards. One of the land of 5000 square yard was registered in 2006 but second land of 4000 square yards registered in 2009 as the buyers were not available in town due to frequent visits abroad. The assessing officer considered the date of purchase of the second plot of land as 29.09.2009 i.e. date of sales deed and the assessee claimed that the actual purchase made by the assessee was in 2007, based on the ground that "Satakhat" executed in 2007, having possession over the land in August 2007. The assessee has produced the evidence to prove that the part payments of the same was made in 2007 and the same is indicated in sale deed also. Hence based on all the above, the assessee paid part consideration for purchase of land, agreement to sale and also passed on possession by the seller in 2007 and hence the year of purchase is 2007 and not 2009. Therefore, capital gain should be computed, as if the property was sold in in 2007. Based on these facts, ld Counsel contended that order passed by the ld CIT(A) is a reasoned and speaking order, hence the same may be upheld. 37. 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. We note that ground raised by the Revenue contains two issues viz: i) whether the sale consideration of 3600 sq. yard is at the rate of Page | 27 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani Rs.5000/- per sq. yard or Rs.17,000/- per sq. yard? and ii) whether 4000 sq. yard of land which was registered on 29.09.2009 was actually purchased in 2007 as claimed by the assessee? Regarding the first issue, the ld CIT(A) observed that assessee in the 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 the 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 assessee also stated that initial parcel of land was sold at lower rate as the assessee's family members wanted to execute the project on the said land in partnership with Milestone Developers. As per the partnership deed, the assessee's family were entitled to the profit from the project and hence, the first plot of land was sold at a lesser 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 plot was suitably increased so that Ruchandani Family could get compensated for the lesser 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 ld CIT(A) as well, supporting the assessee's claim as to why there was huge gap in pricing of two lots of land in a 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 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 of 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 to 18 months. Therefore, the Page | 28 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 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- A1, 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 was worked out by ld CIT(A), which is 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 10,93,00,000/- 38. Regarding the second issue, (whether the Sultanabad land measuring 4000 sq. yards was purchased in 2007 as the said land was registered only on 29.09.2009), the ld CIT(A) observed that 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 Udhana 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 were based in Mumbai and hence, Kabja receipt was executed in 2007 and sale deed was executed in 2009 when all the Page | 29 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 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 Mr. Pitamber Ruchandani. The assessing officer's contention was that when all the vendors have signed, why all purchasers have not signed. The ld CIT(A) observed that 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. Based on these factual position, the ld CIT(A) directed the assessing officer to take the date of purchase of 4000 sq. yard of Sultanabad land as 01.08.2007 as against 29.09.2009 taken by the assessing officer during the assessment proceedings. 39. Thereafter, the ld CIT(A) held that the entire capital gain will be Long term capital gain (LTCG) and there will not be any Short term capital gain (STCG), as worked by the assessing officer. The ld CIT(A) has himself computed the LTCG as follows: Total sale consideration of Sultanabad land Rs. 10,98,00,000/- (3600 X 5000 + 5400 X17000) Assessee's share being 50% Rs.5,49,00,000/- Less: the sale consideration offered to tax in her return by assessee`s wife Mrs. Pushpaben Rs.1,31,75,000/- Sale consideration to be brought to tax in hands of the assessee Rs.4,17,25,000/- Less: indexed cost of acquisition (25% of Rs.32,91,224/-) Rs.8,22,806/- Page | 30 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani Capital Gains Rs.4,09,02,194/- Less: Deduction u/s 54F as claimed by the assessee Rs.1,19,72,664/- Net LTCG chargeable to tax Rs.2,89,72,530/- Capital gains shown in the return of income Rs.3,12,00,000/- 40. Therefore, ld CIT(A) held that assessee has offered capital gain in the return of income at Rs. 3,12,00,000/-, as against the capital gains worked above which comes to Rs. 2,89,72,530/-. As the assessee has offered more LTCG to tax than worked out above on the basis of the seized material, no further addition is required to be made on account of LTCG in the hands of the assessee. Hence, the addition made of Rs. 9,98,580/- ( Rs.2,21,93,000 + Rs. 1,00,05,580- Rs.3,12,00,000) towards the capital gains was deleted by ld CIT(A). We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the conclusion reached by ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. 41. In the result, ground Nos.1,2 and 3 raised by the Revenue are dismissed. 42. Coming to ground Nos. 4 and 5 raised by the Revenue. We note that these grounds relate to restricting the substantive addition of Rs.36,24,917/- to Rs.10,75,000/- and it is also stated the ld CIT(A) erred in deleting the protective addition of Rs.1,35,71,083/-, on account of Dalali income. 43. We have heard both the parties. Learned DR for the Revenue argued that ld CIT(A) without considering the fact that the additions were made on the basis of incriminating documents found and seized during the course of search proceedings, especially the Satakhats, which contained the amount Page | 31 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 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. The ld DR further stated that 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. 44. On the other hand, ld Counsel for the assessee defended the order passed by the ld CIT(A). We note that Dalali income brought to tax by the assessing officer amounting to Rs.36,24,917/- on substantive basis and Rs. 1,35,71,083/- on protective basis. The assessing officer has dealt on this issue on page 39 to 49 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 assessee and Mr. Pitamber Ruchandani (Rs.21,65,00,000/- 19,93,04,000/-). Out of the said amount, the assessing officer made substantive addition of Rs. 36,24,917/- and protective addition of Rs. 1,35,71,083/- in the hands of the assessee. The assessing officer has made these additions on the basis of Rakam Malyani Raseed. As such the assessee was not the owner of Block 68 & 69 but there are evidences to prove that Mr. Pitamber Ruchandani acted as a broker in the transaction and the assessee being the advocate had extended the required legal support. The Satalchat 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. Ramesh D. Patel to Mr. Rajesh B. Kevadia and Dhirajlal Madhavjibhai (Block 68) and Shri Sanjay B. Kevadia Dhirajlal Madhavjibhai (Block 69). Thus, the assessee Page | 32 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 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 cash 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 Malayani 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 Mr. Pitamber Ruchandani on the transaction in question which is available on page 87 of Annexure-Al, wherein, assessee's name also appears for having received some income which though written as Dalali can be treated as the professional receipt which is reproduced by the assessing officer on page 42 of the assessment order. On the said page there is a Dalali income (Brokerage) earned by Mr. Pitamber Ruchandani of Rs.40,25,000/- and that earned by the assessee 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/professional receipt is pertaining to Block 68 & 69. Therefore, out of the substantive addition made by the assessing officer of Rs.36,24,917/-, the amount of Rs.10,75,000/- was sustained in the hands of the Assessee. 45. Based on this factual position, as narrated above, the ld CIT(A) deleted the protective addition made by the assessing officer of Rs.1,35,71,083/-.On a careful reading of the Ld.CIT(A)`s order and the findings thereon, we do not find any valid reason to interfere with the decision and findings of the Ld.CIT(A) in deleting the additions. Hence we confirm and approve the findings of ld CIT(A) and dismiss the ground No`.4 and 5 raised by the Revenue. Page | 33 IT(SS)A Nos. 28 &38/SRT/2022 /AY.10-11 & 12-13 Sh. Vasudev Deepchand Goplani 46. In the result, ground Nos. 4 and 5 raised by the Revenue are dismissed. 47. Since, we have upheld the findings of ld CIT(A) and dismissed the grounds raised by Revenue, additional grounds raised by the assessee, on the legal issue (that order passed by Assessing Officer u/s 153A r.w.s. 143(3) is bad in law), does not requires adjudication, as it renders academic. 48. In the combined result, all grounds raised by the Revenue are dismissed and all additional grounds raised by the assessee are also dismissed. Registry is directed to place one copy of this order in all appeals folder / case files. Order is pronounced on 28/08/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 28/08/2023 Dkp Out-sourcing Sr.P.S 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