Shri Alpesh Kotadiya, Surat V. The ACIT, Central Circle-1, Surat

ITSSA 352/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3320 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 07-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANILKUMAR BHARADWAJ
• Assessee Lawyers: SAPNESH SHETH
• Keywords: Loose papers
• Section: 153A; 69; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ IT(SS)A NO.352/AHD/2014 / ASSTT. YEAR: 2010-2011 SHRI ALPESH KOTADIYA B-3, NAVJEEVAN SOCIETY NR.BOMBAY MARKET L.H. ROAD, SURAT 395 017. PAN : ABEPP 7391 N VS. ACIT, CENT.CIR.1 SURAT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SAPNESH SHETH, AR REVENUE BY : SHRI ANILKUMAR BHARADWAJ, SR.DR ! / DATE OF HEARING : 26/04/2017 '#$ ! / DATE OF PRONOUNCEMENT: 01/06/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-II, AHMEDABAD DATED 28.8.2014 PASSED FOR THE ASSTT.YEAR 2010-2011. 2. SOLITARY SUBSTANTIAL GRIEVANCE OF THE ASSESSEE I S THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.40 LAKHS WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 69 OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ASSESSEE HAS MADE UNACCOUNTED INVES TMENT. IT(SS)A NO.352 /AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE A SEARCH UN DER SECTION 132 OF THE INCOME TAX ACT WAS CARRIED OUT AT BUSINESS AS W ELL AS RESIDENTIAL PREMISES OF INFRASTRUCTURE GROUP ON 19.1.2011. I N ORDER TO GIVE A LOGICAL END TO THE PROCEEDINGS, A NOTICE UNDER SECT ION 153A OF THE INCOME TAX ACT WAS ISSUED ON 11.10.2011 WHICH WAS D ULY SERVED UPON THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSES SEE HAS FURNISHED HIS RETURN OF INCOME ON 23.12.2011 DECLARING TOTAL INCO ME AT RS.6,60,312/- . ON AN ANALYSIS OF THE RECORD, THE LD.AO HAS OBSE RVED THAT DURING THE COURSE OF SEARCH AT THE PREMISES OF GREEN SUB-GROU P CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED. THEY WERE INVENTORIS ED AS ANNEXURE BS- 27. OUT OF THIS, PAGES 146 TO 154 ARE RELATING TO AN AGREEMENT TO SELL DATED 2.4.2010. A PERUSAL OF THIS AGREEMENT HAD REVEALED TO THE AO THAT PROPERTY BEARING SURVEY NO.53/1, 53/3, BLOCK N O.98, SAROLI, CHORYASI, SURAT WAS INTENDED TO BE PURCHASED BY THE ASSESSEE FROM LAXMIBEN AMRUTLAL SURTI AND OTHERS. THE DEAL WAS F INALIZED FOR A CONSIDERATION OF RS.1,76,00,000/-. ACCORDING TO TH E LD.AO, A PERUSAL OF THE DOCUMENTS WOULD INDICATE THAT ONE OF THE PAYMEN T AMOUNTING TO RS.40 LAKHS WAS TO BE MADE BY THE ASSESSEE ON 15.10 .2009. HE DIRECTED THE ASSESSEE TO EXPLAIN SOURCE OF THIS PAY MENT. REPLY OF THE ASSESSEE HAS BEEN REPRODUCED BY THE AO. IT READS A S UNDER: DETAILS A PER BS-27 ACCORDING TO BS-27, ONE DOCUMENTS CALLED ' AGREEMENT TO PURCHASE (GATAKHAT)' DATED 02-04-2010 WAS FOUND. SUCH AGREEM ENT WAS MADE BY ALPESHBHAI G. KOTADIA FOR PURCHASE OF LAND FROM SMT. LAXMIBEN SURTI AND OTHERS. ACCORDINGLY, MR.ALPESHBHAI HAS MADE PAYMENT ON THE DTE OF SUCH DOCUMENT I.E. 02-04-2010 A SUM OF RS.5 LACS AS TOKE N MONEY AND FOLLOWED BY RS. 35 LACS ON 02-05-2010. THE SAID PAYMENT OF RS. 40 LACS WAS MADE BY ALPESHB HAI OUT OF UNDISCLOSED INCOME DECLARED FOR THE PROJECT NAMED R AJHANS RESIDENCY IN THE FIRM NAMED HARI OM DEVELOPERS. IT(SS)A NO.352 /AHD/2014 3 IN JUNE 2010 THE SAID CONTRACT WAS BROKE AND SELLER HAS RETURNED BACK THE SAID MONEY OF RS. 40 LACS. THE ONLY PAYMENT OF RS.40 LACS WAS MADE IN APRIL-MA Y 2010. THERE WERE NO ANY OTHER PAYMENTS. THE ANOTHER PAYMENT WHI CH YOUR SELF IS DESCRIBING OF RS. 40 LACS PAID ON 15-10-2009 ( AS P ER SEIZED DOCUMENT) IS ONE AND THE SAME. THE DOCUMENT FOUND AND SEIZED WAS A BLANK FORM IN N ATURE AND BLANK LINE WAS FILLED UP BY PEN, HENCE THERE IS A MISTAKE IN CORRECTION OF DATE IN THE SAID DOCUMENT BY THE PREPARER. AS THE D OCUMENT ITSELF WAS MADE ON THE DATE 02-04-2010, THERE IS NO QUESTION O F MAKING PAYMENT IN THE YEAR 2009.' 4. THE LD.AO WAS NOT SATISFIED WITH THE REPLY OF TH E ASSESSEE AND HE MADE ADDITION OF RS.40 LAKHS. APPEAL TO THE LD.CIT (A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. BEFORE MAKING AN ANA LYSIS OF THE DETAILS AVAILABLE ON RECORD, WE DEEM IT APPROPRIATE TO TAKE NOTE OF TWO DOCUMENTS VIZ. RELEVANT PART OF THE ALLEGED AGREEME NT DATED 2.4.2010 AS WELL AS ANNEXURE BS-1, PAGE NO.20. COPIES OF TH ESE DOCUMENTS ARE AVAILABLE ON PAGE NOS.14 TO 20 AND 27 OF THE PAPER BOOK. THESE PAPERS ARE IN GUJARATI. THEIR ENGLISH TRANSLATION IS PLAC ED ON RECORD. FIRST WE TAKE NOTE OF CERTAIN CLAUSES OF THE AGREEMENT. IT READS AS UNDER: IN THIS LAND THERE ARE NO RIGHTS, INTEREST, SHARE, ATTACHMENT OF ANYONE EXCEPT THE SECOND PART-SELLER AND THUS, THE SELLER HAS AN ABSOLUTE AND INDEPENDENT POWERS AND RIGHTS TO ADMIN ISTER, MANAGER, DISPOSE THE SAID LAND AND BY VIRTUE OF SUC H ABSOLUTE AND INDEPENDENT POWERS AND RIGHTS, THE SELLER HAS DECID ED TO SELL THE WHOLE LAND TO THE FIRST PART FOR A TOTAL SALE CONSI DERATION OF RS.1,76,00,000/- (RUPEES ONE CRORE SEVENTY SIX LACS ONLY) AND THE FIRST PART MEANS THE PURCHASER HAS PAID PART PA YMENT IN INSTALLMENTS FOR RS.40,00,000/- (RUPEES FORTY LACS ONLY) ON 15/10/2009). THAT SECOND INSTALLMENT OFRS.75,00,000/- RUPEES SE VENTY FIVE LACS ONLY TOWARDS PAYMENT OF THE SAID LAND HAS BEEN PAID UP ON 05/07/2010. IT(SS)A NO.352 /AHD/2014 4 THAT THIRD INSTALLMENT OF RS.61,00,000/- RUPEES SI XTY ONE LACS ONLY TOWARDS PAYMENT OF THE AID LAND SHALL BE PAID AT THE TIME OF MUTATING ENTRY AFTER EXECUTING OF SALE DEED. SECOND PART ANNEXURE BS-1 PAGE NO.20 READS AS UNDE R: RAJHANS RESIDENCY TP-30 FP-46 RECEIVED AMOUNT: 1 ST APRIL 2010 RS.40 LACS 2 ND MAY 2010 RS.40 LACS UPTO 4 TH JUNE, 2010 RS.20 LACS OUT OF THE ABOVE INCOME, PAYMENT MADE BY ALPESHBHA I KOTADIYA SAROLI RS NO.53/1, 53/E, BLOCK NO.98 2 ND APRIL 2010 RS. 5 LACS TOKEN MONEY THIS AMOUNT RECEIVED BACK ON ACCOUNT OF CANCELLATION OF DEAL 2 ND MAY, 2010 RS.35 LACS FIRST INSTALMENT THIS AMOUNT RECEIVED BACK ON ACCOUNT OF CANCELLATION OF DEAL 6. IT IS PERTINENT TO MENTION THAT VENDOR VIZ. LAXM IBEN AMRUTLAL SURTI AND OTHERS HAVE GIVEN AFFIDAVIT DEPOSING THEREIN TH AT A SUM OF RS.5 LAKHS WAS TAKEN AS TOKEN MONEY ON 2.4.2010 WHEN AGR EEMENT TO SELL WAS EXECUTED AND RS.35 LAKHS AS FIRST INSTALLMENT O N 2.5.2010. THIS AFFIDAVIT IS ALSO AVAILABLE ON PAGE NO.1 AND 2 OF T HE PAPER BOOK. 7. SOLE QUESTION FOR OUR ADJUDICATION IS, WHETHER O N THE BASIS OF DATE MENTIONED IN THE FIRST CLAUSE OF THE AGREEMENT I.E. 15.10.2009 IS TO BE CONSTRUED AS CORRECT DATE AND IT IS TO BE CONSTRUED THAT PAYMENT OF RS.40 LAKHS WAS MADE BY THE ASSESSEE ON THIS DATE. THE AO HAS TAKEN THIS DATE AS A GOSPEL TRUTH IGNORING ALL OTHER ATTE NDING CIRCUMSTANCES. IN OUR OPINION, AN ANALYSIS OF RECORD WOULD INDICAT E THAT THE LD.REVENUE IT(SS)A NO.352 /AHD/2014 5 AUTHORITIES HAVE MIS-CONSIDERED AND MISINTERPRETED DOCUMENTS NOT ONLY DURING THE ASSESSMENT PROCEEDINGS EVEN DURING THE C OURSE OF SEARCH IT WAS EXPLAINED TO THE AO THAT A SUM OF RS.40 LAKHS W AS RECEIVED BY THE ASSESSEE FROM RAJHANS RESIDENCY. THIS AMOUNT WAS R ECEIVED ON 1.4.2010 AND IT IS DULY REFLECTED IN ANNEXURE BS-1 PAGE NO.20 EXTRACTED SUPRA. THIS AMOUNT WAS PAID TO THE VENDOR OF SURAT I LAND. A TOKEN AMOUNT OF RS.5 LAKHS WAS PAID ON THE DATE OF AGREEM ENT AND RS.35 LAKHS WAS PAID LATER ON. ACCORDING TO THE ASSESSEE THE DATE MENTIONED AS 15.10.2009 IS BY WAY OF A MISTAKE, BECAUSE THE A GREEMENT, WHICH WAS ON A PRINTED PROFORMA AND WAS FILLED IN BY HAND , DUE TO THIS FILLING OF BLANKS CONTAINED IN THE PROFORMA AN ERROR WAS CR EPT IN. IN OUR OPINION THIS WAS AN INADVERTENT MISTAKE AT THE TIME OF FILLING BLANK COLUMNS OF THE ALLEGED PROFORMA OF THE AGREEMENT. IN OTHER WORDS, TERMS AND CONDITIONS OF THE AGREEMENT MUST HAVE BEE N DRAFTED LEAVING CERTAIN COLUMNS BLANK WHICH WERE FILED WHEN THE SIG NATURES WERE PUT. ASSESSEE IS DISPUTING THIS DATE. THERE IS A FORCE IN THIS CONTENTION, BECAUSE, AGREEMENT IS DATED 2.4.2010, THEN, WHY THE ASSESSEE WOULD PAY A SUM OF RS.40 LAKHS IN OCTOBER, 2009. HAD THI S PAYMENT WAS MADE, THERE MUST HAVE BEEN SOME WRITING. THE AO IN SPITE OF SEARCH, FAILED TO COLLECT ANY SUCH DOCUMENTS. VENDORS HAVE GIVEN THEIR AFFIDAVITS DEPOSING THEREIN THAT THEY HAVE NOT RECE IVED ANY PAYMENTS IN OCTOBER, 2009. IN THIS SITUATION, WHAT IS THE EVID ENCE WITH THE AO, EXCEPT DRAWING INFERENCE FROM THE ALLEGED DATE MENT IONED IN THE AGREEMENT ? TO OUR MIND THIS ONE NARRATION IN THE AGREEMENT IS NOT SUFFICIENT TO HARBOR A BELIEF THAT THE ASSESSEE MUS T HAVE PAID SOMETHING IN OCTOBER, 2009 WITHOUT EXECUTION OF ANY AGREEMENT . THE AO SHOULD HAVE COLLECTED SOME CORROBORATIVE EVIDENCE IN SUPPO RT OF HIS BELIEF. APART FROM THE ABOVE, WE FIND THAT CERTAIN NOTING A VAILABLE ON PAGE 20 OF BS-1 WERE ALSO FOUND AT THE TIME OF SEARCH WHICH IS IN SUPPORT OF THE CONTENTION PUT FORTH BY THE ASSESSEE. THEREFORE, C UMULATIVE SETTING OF THESE FACTORS WOULD INDICATE THAT NO PAYMENT WAS MA DE BY THE ASSESSEE IT(SS)A NO.352 /AHD/2014 6 IN OCTOBER, 2009 AS ALLEGED BY THE AO. IT IS ONLY AN ERROR IN NOTING THE DATE IN THE AGREEMENT. 8. IF WE EXAMINE THE ISSUE WITH DIFFERENT ANGLE, TH EN IT SHOULD BE CONSIDERED THAT THIS PAYMENT OF RS.40 LAKHS WAS MAD E AFTER EXECUTION OF AGREEMENT ON 2.4.2010 AND THE SOURCE OF THIS PAY MENT WAS RECEIVED FROM RAJHANS RESIDENCY WHICH HAS NOT BEEN EVEN DISP UTED BY THE AO. THEREFORE, WE ALLOW THIS APPEAL OF THE ASSESSEE AND DELETE THE ADDITION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 1 ST JUNE, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER