The ACIT, Circle-6, Ahmedabad V. M/s. Umiya Investment, Ahmedabad

ITSSA 39/AHD/2007

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7720 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-01-2012
• Assessment Year: misc
• Appeal Filed On: 26-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA SRDR
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained investment; Unexplained expenditure; Capital asset; Document seized; Additional evidence; Block assessment; Documents seized
• Section: 143(3); 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER IT(SS)A NO.39 & 40/AHD/2007 BLOCK PERIOD 01/04/1986 TO 21/01-1997 ACIT CIRCLE-6, AHMEDABAD ACIT CIRCLE-6, AHMEDABAD / V/S . / V/S . M/S UMIYA INVESTMENTS, A-1, AKSHARDAM SOCIETY, PARSHWANATH TOWNSHIP, SAIJIPUR, BOGHA, AHMEDABAD PAN NO. NOT FOUND SHRI PRAHLADBHAI RAMDAS PATEL 34, UMIYANAGAR SOCIETY, NR. NOBLE SCHOOL, SAIJPUR BOGHA, AHMEDABAD PAN NO. NOT FOUND / APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI S.N. DIVETIA, AR / BY REVENUE SHRI RAJ MEHRA, SR-DR / DATE OF HEARING 19-01-2012 !'# / DATE OF PRONOUNCEMENT 26-03-2012 $ $ $ $ / // / ORDER PER MUKUL.KUMAR. SHRAWAT, JUDICIAL MEMBER:- BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE A RISING FROM THE TWO SEPARATE ORDERS OF LD. COMMISSIONER OF INC-TAX (APP EALS)-XII, AHMEDABAD RESPECTIVELY DATED 28-11-2006 & 30-11-2006 FOR THE BLOCK PERIOD 01-04-1986 TO 21-01-1997. IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 2 2. THE FACTS INVOLVED IN THESE TWO APPEALS BEING ID ENTICAL, THEREFORE THESE TWO APPEALS ARE CONSOLIDATED AND HEREBY DECIDED BY THIS COMMON ORDER. A. M/S UMIYA INVESTMENT 3. THE REVENUE HAS RAISED GROUND NO.1 AND 2:- 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.1,42,00,000/- BEING THE UNEXPLAINED INVESTMENT FOR PURCHASE OF LA ND. 2. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.1,42,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT FOR PURCHASE OF LAND BY ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF PATE NO.177 TO 1 90 OF THE PAPER BOOK (REFER PAGE NO.6 OF THE APPELLANT ORDER) IN CONTRAV ENTION OF RULE 46A(3) OF THE I.T. RULES, 1962. 4. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING BLOCK ASSESSMENT ORDER PASSED U/S.158BC R.W.S. 158BC DATED 28-08-200 3 ARE THAT A SEARCH ON SHAYAM BUILDERS WAS CARRIED OUT ON 21-01-1997. ON T HE BASIS OF CERTAIN SEIZED DOCUMENTS, IT WAS FOUND THAT THE ASSESSEE HA D UNDISCLOSED INCOME AND THEREFORE BEING SATISFIED THE REVENUE-DEPARTMEN T HAS INITIATED PROCEEDINGS U/S 158BD OF I.T. ACT, 1961 IN THE CASE OF THE ASSESSEE. THE ALLEGATION OF THE REVENUE-DEPARTMENT WAS THAT THE A SSESSEE HAS PURCHASED A LAND BEARING SURVEY NO.791 ADMEASURING 41,746 SQ. YD. SITUATED AT NARODA VILLAGE, AHMEDABAD. THE LAND WAS STATED TO BE PURCH ASED FROM M/S AMBBIKA CORPORATION VIDE OF BANAKHAT DATED 20-05-1996. AS P ER THE SAID BANAKHAT, THE LAND WAS STATED TO BE PURCHASED BY EIGHT PERSONS. T HE ASSESSING OFFICER HAS ALLEGED THAT THOSE EIGHT PERSONS WERE PARTNERS (BHA GIDAR) OF ASSESSEE I.E. UMIYA INVESTMENT. IT WAS AN OBSERVATION OF THE AO T HAT BEFORE THE NAME OF THE ASSESSEE, THE WORD PRE-FIXED WAS M/S. IT HAS ALSO BEEN NOTED BY THE AO THAT THERE WAS A PARTNERSHIPS DEED DATED 14-05-1996 , WHICH WAS EXECUTED BEFORE THE DATE OF EXECUTION OF IMPUGNED BANAKHAT D ATED 20-05-1996. 4.1 THE SAID LAND WAS SOLD TO M/S. TRIMURTI ASSOCIA TES VIDE A BANAKHAT DATED 04-06-1996. THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.1.42 CRORE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 3 LAND. THE DETAIL OF THE SAID PAYMENT WAS REPRODUCED BY THE AO AS UNDER:- 7-4-97 RS. 5,00,000/- 20-5-97 RS. 98.00,000 20-9-96 RS. 39,00,000 TOTAL RS.1,42,00,000 4.2 IT WAS CONCLUDED BY THE ASSESSING OFFICER THAT NO EVIDENCE ABOUT THE SOURCE OF INVESTMENT IN PURCHASE OF LAND WAS FU RNISHED. THEREFORE THE SAID INVESTMENT WAS HELD UNEXPLAINED INVESTMEN T OF THE ASSESSEE WITHIN THE BLOCK PERIOD. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, LD. CIT(A) HAS GIVEN RELIEF AFTER EXAMINATION OF THE FA CTS OF THE CASE, IN THE FOLLOWING MANNER:- 3.3 I HAVE CAREFULLY PERUSED THE ORDER OF BLOCK AS SESSMENT OF THE ASSESSING OFFICER, THE APPELLANT ORDER OF LEARNED C IT(A), AND HAVE ALSO CONSIDERED THE ARGUMENTS OF THE AUTHORIZED REPRESEN TATIVE IN THIS REGARDS. AS REGARDS THE PAYMENT OF RS.98 LACS AND 3 9 LACS MADE ON 20/05/1996 AND 20/09/1996 RESPECTIVELY, I FIND THAT HE CONTENTION RAISED BY THE APPELLANT THAT THE SAME WERE PAID OUT OF THE SALE CONSIDERATION RECEIVED FROM M/S. TRIMURTI ASSOCIATES AS POINTED O UT HEREIN BEFORE IS ACCEPTABLE. THE PERUSAL OF BANAKHAT DATED 04/06/199 6 WITH M/S. TRIMURTI ASSOCIATES AND BANAKHAT DATED 20/05/1996 W ITH M/S. AMBICA CORPORATION CLEARLY SHOWS THAT THE SOURCE OF PAYMEN T OF PURCHASE PRICE WAS OUT OF THE SALE PRICE RECEIVED BY THE APPELLANT . I ALSO FIND THAT WHILE MAKING BLOCK ASSESSMENT ORDER IN THE CASE OF PRAHL ADBHAI PATEL ON 31/08/201 BY ACIT CIRCLE-6, AHMEDABAD, IT IS OBSERV ED BY A.O AT PARA 12.9 & 14.14 UNDER:- PAYMENTS TO THE SELLERS HAVE BEEN MADE FROM THE F UNDS RECEIVED FROM THE PURCHASERS EXCEPTED FOR THE FUND OF RS.5,00,000/-. BANAKHAT OF PURCHASE AND SALE ARE AV AILABLE ON THE RECORD AND DETAILS OF CASH RECEIVED AND PAID IS ALSO AVAILABLE IN THE BANAKHAT (AT PARA 14.9) ONE OF THE EIGHT CO-OWNERS, SHRI BHARAT PRABHUDAS PATEL, IN HIS STATEMENT RECORDED U/S. 133A O 11/03/1997 HAS STATE D IN ANSWERS TO Q:4, THAT FOR THE PURCHASE OF LAND THEY COLLECTIVELY 8 PERSONS HAD PAID RS.5,00,000/ IN CASH AS TOKEN MONE Y I.E. BANA MONEY. THEREAFTER, PAYMENT OF PURCHASE CONSIDERATI ON WAS MADE AFTER SALE OF LAND AND AFTER RECEIPT OF SALE C ONSIDERATION IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 4 FROM BHAGWANBHAI KHODABHAI PATEL OF SHYAM BUILDER G ROUP. HE CONFIRMED THE RECEIPT OF RS.1,03,00,000 (RS. ONE CR ORE THREE LACS ONLY) FROM BHAGWANBHI KHODABHAI PATEL. HE ALSO CONFIRMED THAT OUT OF THE SAID RECEIPT OF RS.1,03,00,000/- AF TER DEDUCTING RS.5 LACS THE BALANCE AMOUNT WAS PAID TO SHRI DASHR ATBHAI OF AMBICA CORPORATION FROM WHOM THE LAND WAS PURCHASED (AT PARA 12.9) SIMILARLY, IT IS NOTICED FROM THE ORDER OF BLOCK AS SESSMENT PASSED U/S. 158BD R.W.S. 158BC AND 143(3) ON 30/04/2002 BY DCIT CIRCLE-II AHMEDABAD IN CASE OF SHRI BHARATKUMAR R PATEL, ONE OF THE EIGHT CO- OWNERS THAT THE INVESTMENT BY WAY OF PURCHASE PRICE FOR LAND PAID TO M/S AMBICA CORPORATION HAS BEEN FOUND TO BE EXPLAIN ED WITH FOLLOWING FINDINGS. HE ALSO FINED DETAILS OF CASH RECEIPT AND PAYMEN TS FROM BOOKS OF M/S. UMIYA INVESTMENT SHOWING RECEIPT OF CASH FR OM BHAGWANDAS K PATEL AND PAYMENT TO M/S. AMBICA CORPO RATION TOWARDS PURCHASE OF LAND (AT PARA:5) THE AS HAS FILED EXTRACT FROM THE CASH BOOK OF M /S UMIYA INVESTMENTS SHOWING THAT THE PROCEEDS OF LAND PURCH ASED WAS PARTLY CONTRIBUTED BY PARTNERS AS CAPITAL AND PARTL Y OUT OF CASH RECEIVED FROM BHGWAN K PATEL AND OTHERS. MOREOVER, I ALSO FIND FROM THE COPY OF ACCOUNTS FIL ED AT PAGE 177 TO 190 OF THE PAPER BOOK THAT THE PURCHASE CONSIDERATION P AID TO M/S. AMBICA CORPORATION HAS BEEN MADE OUT OF THE SALE CONSIDERA TION RECEIVED FROM M/S. TRIMURTI ASSOCIATES, EXCEPT FOR THE INITIAL PA YMENT OF RS.5 LACS ON 07/04/1996. UNDER THE CIRCUMSTANCES, I HOLD THAT TH E PAYMENTS AGGREGATING TO RS.1.37 CRORE TO M/S AMBICA CORPORAT ION IS MADE OUT OF THE SALE PRICE RECEIVED FROM M/S TRIMUTI ASSOCIATES SO THAT THE SAME IS NOT UNEXPLAINED INVESTMENT BY THE APPELLANT. 3.4 AS REGARDS THE INITIAL PAYMENT OF RS.5 LAC MADE TO M/S AMBICA CORPORATION I FIND THAT THE SAME WAS MADE OUT OF TH E CONTRIBUTION MADE BY THE CO-OWNERS AS PER THE UNDERSTANDING BETWEEN T HEM. SHRI BHARAT PRABHUDAS PATEL, ONE OF THE EIGHT CO-OWNERS HAS CLE ARLY CONFIRMED THIS ASPECT IN HIS REPLY TO Q:4 OF HIS STATEMENT RECORD ON 11/03/1997. FURTHER IN RESPECT OF THE AFORESAID CONTRIBUTION MADE BY ON E OF THE EIGHT CO- OWNERS SHRI HASMUKHBHAI S PATEL, THE A.O HAS TREATE D THE INITIAL PAYMENT OF RS.62,500/- FOR THE SAID LAND AS HIS UNE XPLAINED EXPENDITURE WHILE PASSING ORDERED OF BLOCK ASSESSMENT ON 25/06/ 2001 BY DCIT CIRCLE-10(1) AHMEDABAD. SIMILARLY, IN CASE OF SHRI MANILAL J DASUDIYA, THE SAME A.O TREATED INITIAL PAYMENT OF RS.75,000/- MADE BY SHJRI MANILAL J DASUDIYA AS UNEXPLAINED EXPENDITURE. SIMI LARLY, IN THE CASE OF PRAHLAD RAMDAS PATEL, A.O HAS TREATED THE INITIAL P AYMENT OF IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 5 RS.50,000/- MADE BY THE SAID PRAHLAD PATEL AS UNEXP LAINED INVESTMENT IN PARA 13.1 OF THE ORDER OF BLOCK ASSESSMENT PASSE D ON 31/08/2001 BY ACIT CIRCLE-6 AHMEDABAD. THUS, THE INITIAL INVESTME NT MADE BY THE CO- OWNERS HAS BEEN CONSISTENTLY HELD TO BE THE INVESTM ENTS MADE BY EACH OF THE CO-OWNERS AND BROUGHT TO TAX ON SUBSTANTIVE BASIS IN THE ASSESSMENT OF SAID CO-OWNERS. MOREOVER, THE APPELLA NT ALSO FILED BEFORE ME THE CONFORMATION LETTERS WITH EVIDENCE VIDE COVE RING LETTER DATED 9 TH OCTOBER, 2006 IN RESPECT OF THE SOURCE OF THE INVES TMENT BY CO-OWNERS NAMELY JITENDRA H PATEL, ASHWINBHAI B PATEL, PRAHLA DBHAI R PATEL, BHARATBHAI P PATEL, JAGDISHBHAI M PATEL AND MANIBHA I J DASADIOA. THERE IS YET ANOTHER ASPECT OF THE MATTER IN AS MUC H AS, THE APPELLANT WAS CONSTITUTED FROM 01/04/1996 AND THE INITIAL PAY MENT OF RS. 5 LACS WAS MADE ON 07/04/1996, THOUGH NO ACTIVITY WAS CARR IED ON BY THIS ENTITY DURING THIS PERIOD. THEREFORE, THE AFORESAID INITIAL INVESTMENTS CANNOT BE THE UNEXPLAINED INVESTMENT MADE BY THE APPELLANT ENTITY AND BROUGHT TO TAX IN ITS HANDS. WHEN THE CO-OWNERS HAS FURNISHED EXPLANATION WITH REGARD TO THE SOURCES OF CAPITAL A MOUNTS INTRODUCED BY THEM AND THE SAME HAS BEEN RECEIVED DURING THE PERI OD WHEN NO ACTIVITY HAS BEEN CARRIED OUT BY THE APPELLANT ENTI TY, THE CAPITAL AMOUNT SO INTRODUCED COULD NOT BE TAXED IN THE HANDS OF TH E APPELLANT AS ITS UNEXPLAINED INVESTMENTS. RELIANCE IS PLACED ON THE DECISION OF AHMEDABAD BENCH OF ITAT IN THE CASE OF ACIT VS PATEL RAJESHKUMAR KANTILAL ( 64 TTJ 460 ) WHEREIN THE DECISION OF HONBLE BOMABY HIGH COURT IN THE CASE OF NARAYANDAS KEDARNATH VS CIT ( 22 ITR 18 ) HAS BEEN FOLLOWED. UNDER THE CIRCUMSTANCES, I HOLD THA T THE INITIAL PAYMENT OF RS. 5 LACS MADE TO M/S AMBICA CORPORATION BY THE CO-OWNERS CANNOT BE BROUGHT TO TAX AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE APPELLANT. IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE AS DISCUSSED ABOVE, I FIND THAT THE A.O WAS NOT JUSTIF IED IN MAKING THE ADDITION OF RS.1.42 CRORE. I THEREFORE, DELETE THE ENTIRE ADDITION OF RS.1.42 CRORE MADE BY THE ASSESSING OFFICER. 6. FROM THE SIDE OF REVENUE, LD. DR, SHRI RAJ MEHRA APPEARED AND SUPPORTED THE ORDER OF ASSESSING OFFICER. ON THE OT HER HAND, FROM THE SIDE OF AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, SHRI S.N .DIVETIA APPEARED AND SUPPORTED THE ORDER OF LD. CIT(A). 7. THE MAIN CONTENTION OF THE REVENUE WAS THAT AN A CTION U/S.132 WAS TAKEN THEREUPON IT WAS FOUND THAT THE ASSESSEE HAS MADE INVESTMENT IN THE SAID LAND WHICH WAS NOT AT ALL DISCLOSED. THE SAID LAND WAS LATER ON SOLD BY THE ASSESSEE AND EVEN THE PROFIT OF SALE OF LAND HA S ALSO NOT BEEN DISCLOSED. IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 6 LD. DR HAS THEREFORE ARGUED THAT SINCE THE PURCHASE AS WELL AS SALE BOTH REMAINED UNDISCLOSED, THEREFORE, THE NEXUS TOWARDS INVESTMENT OUT OF SALE PROCEED WAS WRONGLY ACCEPTED BY LD. CIT(A). ON THE OTHER HAND, LD. AR MR. DIVETIA HAS CONTESTED THAT EXCEPT RS 5 LAKH WHICH W AS THE INITIAL PAYMENT MADE ON 07-04-1996 REST OF THE AMOUNT I.E. RS.98 LA KH PAID ON 20-05-1997 AND RS.39 LAKH PAID ON 20-09-1996 WERE OUT OF THE S ALE CONSIDERATION RECEIVED FROM M/S. TRIMURTI ASSOCIATES. LD. AR HAS ALSO FURNISHED WRITTEN SUBMISSION AND THE RELEVANT PORTION REPRODUCED BELO W:- 3.0 UNEXPLAINED INVESTMENT [RS.1.42CR.] 3.1 THE FIST EFFECTIVE GROUND OF APPEAL RELATES TO THE ADDITION OF RS.1.42 CR. MADE BY THE AO AS UNEXPLAINED INVESTMENT DELETE D BY CIT(A). IT IS DISCUSSED BY CIT(A) IN PARA 3.3 AND 3.4 AT P.4 TO 7 OF THE IMPUGNED ORDER. THE ADDITION OF RS.1.42 CR. CONSISTS OF THE PAYMENTS MADE BY THE RESPONDENT TO M/S. AMBICA CORPN TOWARDS THE PURCHAS E OF LAND IN QUESTION AS UNDER:- ON 7.41966 RS.5 LAKH ON CASH AS EARNEST MONEY TILL 20.5.1996 RS.98 LAKHS IN ALL 20.9.1996 RS.39 LAKHS 3.2 THE CONTENTION OF THE RESPONDENT WAS THAT THE I NITIAL PAYMENT OF RS.5 LAKHI WAS MADE BY 8 CO-OWNERS OUT OF THEIR OWN CONTRIBUTIONS AND IT WAS PROVED BY THE REPLY TO Q.4 OF THE STATEMENT ON 11.3.1997 BY ONE OF THE CO-OWNERS SHRI BHARAT PRABHUDAS PATEL, THE F INDINGS GIVEN IN THE BLOCK ASTT. ORDERS IN THE CASE OF SHRI HASMUKHLAL S PATEL, SHRI MANILAL J DASUDIYA AND SHRI PRADHALAD R PATEL. 3.3 AS REGARDS THE REMAINING PAYMENTS TO M/S. AMBIC A CORPN., THE RESPONDENT EXPLAINED THAT THE SAME WERE PAID OUT OF THE AMOUNTS RECEIVED TOWARDS SALE CONSIDERATION FROM M/S. TRIMU RTI ASSOCIATES OF SHUYAM GROUP AS UNDER:- ON 13.4.1996 RS. 5 LAKHY (BANACHITTI) ON 20.4.1996 RS.98 LAKH (BANAKHAT) ON 13.9.1996 RS.46,27,700 THE RESPONDENT RELIED UPON THE ORDERS OF BLOCK ASST T. PASSED IN THE CASE OF CO-OWNERS TO PROVE THAT THE AFORESAID PAYME NTS WERE NOT UNEXPLAINED, BUT OUT OF SALE CONSIDERATION RECEIVED BY IT. (EXCEPT RS.5 LAKH). IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 7 (A) SHRI HASMUKHLAL PRQHALAD PATEL:- ORDER PASSED O N 31.8.2001 BY ACIT, CIR-6, ABAD AS PER PARA 12.9 (B) SHRI BHARATKUMAR R PATEL :- ORDER PASSED ON 30. 4.2002 BY DCIT, CIR-11, ABAD AS PER PARA 5. (C) SHRI BHARAT PRABHUDAS PATEL IN HIS STATEMENT RE CORDED ON 11.3.1997 STATED IN ANSWER TO Q.NO.4 THAT 8 PERSONS HAD PAID RS.5 LAKH IN CASH AS TOKEN MONEY AND THEREAFTER PAYMENT OF PURCHASE CONSIDERATION WAS MADE AFTER SALE OF LAND AND RECEI PT OF SALE CONSIDERATION FROM SHRI BHAGWANBHAI K PATEL OF SHYA M BUILDERS GROUP. (D) SHRI PRAHLAD RAMDAS PATEL: THE IMPUGNED ORDER D T. 31-8-2001 PASSED BY ACIT CIR-6, ABAD AT PARA 14.14 ON PAGE 1 3. 8. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF COM PILATION FILED. THE SHORT ISSUE IS THAT WHETHER TWO MAJOR AMOUNTS I.E. RS.98 LAKH A ND RS.39 LAKH WERE OUT OF THE AMOUNTS RECEIVED FROM M/S. TRIMURTI ASSOCIATES. WE HAVE NOTED THAT VIDE A BANAKHAT DATED 20-05-1996 THE ASSESSEE HAS AGREED TO MAKE A TOTAL INVESTMENT OF RS.1.42 CRORES AS PER THE THREE DATES NOTED HEREINABOVE. MEANWHILE, WHEN THE INSTALLMENTS OF RS.98 LAKH WAS DUE ON 20-05-1997, FACTS HAVE REVEALED; THAT THE ASSESSEE HAS ENTERED INTO A SALE AGREEMENT WITH M/S. TRIMURTI ASSOCIATES DATED 04-06-1996 AND ACCORDINGL Y AN AMOUNT OF RS.1,49,27,709/- WAS RECEIVED IN THE FOLLOWING MANN ER:- ON 13.4.1996 RS. 5 LAKHY (BANACHITTI) ON 20.4.1996 RS.98 LAKH (BANAKHAT) ON 13.9.1996 RS.46,27,700 WE HAVE NOTED THAT LD. CIT(A) HAS ACCEPTED THE SAID FACTUAL ASPECT THAT ON RECEIVING THE AFORESAID TWO MAJOR AMOUNTS FROM M/S. TRIMURTI ASSOCIATES, THE ASSESSEE HAS MADE THE PAYMENT TOWARDS PURCHASES TO M/S. AMBIKA CORPORATION. SINCE THE ASSESSEE HAS SUCCESSFULLY ES TABLISHED THE NEXUS WHICH WAS FOUND CORRECT BY LD. CIT(A) BEING BASED U PON THE EVIDENCE AND THE BANAKHAT ALREADY ON RECORD, WE HEREBY DO NOT FI ND ANY REASON TO INTERFERE WITH THE SAID FACTUAL FINDING OF LD. CIT(A). STILL WE ARE LEFT WITH AN INITIAL PAYMENT MADE BY THE ASSESSEE OF RS.5 LAKH. THIS AMO UNT WAS STATED TO BE DULY REFLECTED BY THE EIGHT CO-OWNERS IN THEIR RESP ECTIVE ASSESSMENTS. SOME IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 8 OF THE CO-OWNERS HAVE MADE STATEMENT AND THEREIN CO NFRMED THEIR SHARE OF INVESTMENT. RATHER, LD. CIT(A) HAS NOTED THAT THE S AID INVESTMENT WAS BROUGHT TO TAX ON SUBSTANTIVE BASIS IN THE HANDS OF THE RESPECTIVE CO-OWNERS. IT HAS ALSO BEEN NOTED THAT THOSE CO-OWNERS HAVE FU RNISHED CONFIRMATION LETTERS IN SUPPORT OF THE INVESTMENTS MADE BY EACH OF THEM. IN ONE OF THE CASE OF CO-OWNER, NAMELY, SHRI HASMUKHLAL P PATEL, THERE IS REFERENCE OF AN ORDER OF CIT(A)-XVII DATED 31-03-2004 NO CIT(A)XVII/DCIT. CIR-10(1)/57/2001-02, WHEREIN THE ADDITION OF RS.62,500/- STOOD DELETED. LD. CIT(A) HAS DISCUSSED THE INVESTMENTS IN EACH HAND OF THE CO-OWNERS AND T HEREUPON DECIDED TO DELETE THE ADDITION. ONCE THE AFORESAID INITIAL INV ESTMENT OF RS.5 LAKH STOOD EXPLAINED AND ASSESSED AS PER LAW IN THE HANDS OF T HE CO-OWNERS, THEREFORE THERE WAS NO LEGAL REQUIREMENT TO TAKE THE SAME ACT ION IN THE HANDS OF THE ASSESSEE. UNDER THE TOTALITY OF THE FACTS AND CIRCU MSTANCES, THE VIEW TAKEN BY THE LD. CIT(A) IS HEREBY CONFIRMED AND THESE TWO GR OUNDS OF THE REVENUE IS THEREFORE DELETED. 9. THE REVENUE HAS RAISED FOLLOWING GROUNDS NO. 3, 4 AND 5:- 3. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.36,52,656/- BEING THE UNDISCLOSED PROFIT EARNED FROM THE TRANSA CTION IN LAND. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 10. IN RESPECT OF THESE THREE GROUNDS FACTS AS STAT ED BY THE ASSESSING OFFICER WERE THAT THE TWO PIECES OF LAND ADMEASURIN G 27,225 SQ.YD. AND 14,520 SQ.YD TOTALING 41,745 SQ.YD. WAS PURCHASED T HROUGH BANAKHAT FROM M/S AMBIKA CORPORATION DATED 20-05-1996. THE LAND W AS PURCHASED @ RS.605 PER SQ.YDS AND CONSIDERATION OF RS.1.42 CORE S WAS PAID. THE LAND WAS AGREED TO BE SOLD TO M/S. TRIMURTI ASSOCIATES VIDE AN AGREEMENT DATED 04-06- IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 9 1996 @ RS.801/- PER SQ.YDS FOR A TOTAL CONSIDERATIO N OF RS.1,49,27,709/-. THE DIFFERENCE BETWEEN TWO, AS PER ASSESSING OFFICER; W AS 196 PER SQ. (801 PER SQ.YD. - RS.605 PER SQ.YD) AND THAT PROFIT RATE WAS APPLIED ON THE PORTION OF THE LAND SOLD AND THEREUPON PROFIT WAS CALCULATED AT RS .36,52,656/-. THIS AMOUNT HAS ALSO BEEN TAXED IN THE RESPECTIVE BLOCK PERIOD. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 11. ON EXAMINATION OF FACTS OF THE CASE, LD. CIT(A) HAS DELETED THE ADDITION AS PER THE FOLLOWING OBSERVATION:- 3.7 IN ORDER TO DECIDE THE ISSUE, I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER, COPY OF SEIZED BANAKHAT (PAGE NO. 97-109), SUPPLEMENTARY AGREEMENT CUM POSSESSION DATED 20/01/ 2003 (PAGE 133 TO 143) AND HAVE ALSO CONSIDERED THE ARGUMENTS OF T HE LD. COUNSEL IN THIS REGARDS. IN ORDER TO DECIDE THE ISSUE, IT IS M OST RELEVANT TO FIND OUT AS TO WHETHER THE APPELLANT HAD IN FACT HANDED OVER THE POSSESSION OF LAND IN PROPORTION TO THE SALE CONSIDERATION RECEIV ED BY IT. IT WOULD BE THEREFORE NECESSARY TO CONSIDER CLAUSE 7 OF THE BAN AKHAT DATED 04/06/1996 WHICH IS REPRODUCED AS UNDER FROM FREE E NGLISH TRANSLATION FURNISHED BY THE APPELLANT (P126). 7 AS SOON AS THE PURCHASER PAYS TO THE SELLER, 70% AMOUNT OF THE TOTAL SALE CONSIDERATION AMOUNT, THE SELLER WOULD B E REQUIRED TO HANDOVER THE VACANT AND PEACEFUL POSSESSIONS OF THE SAID LAND TO THE PURCHASER AND THAT ON PAYMENT OF SUCH 70% AMOUN T OF THE TOTAL SALE CONSIDERATION AMOUNT, THE PURCHASER WILL BE TREATED AS OCCUPIED ADDITION ACQUIRED THE LEGAL POSSESSIONS OF THE SAID LAND GIVEN ON SALE A MERE PERUSAL OF THE AFORESAID CLAUSE INDICATES TH AT ONLY UPON PAYMENT OF 70% OF THE SALE PRICE, THE VENDOR HAD TO DELIVER POSSESSION OF LAND TO THE PURCHASERS. SINCE, THE PURCHASERS HA D PAID ONLY RS.1.03 CRORE BY THE TIME THE SAID BANAKHAT WAS EXECUTED AN D THE SAID AMOUNT WAS LESS THAN 70% OF THE AGGREGATE SALE PRICE WORKE D OUT FOR 31746 SQ.YDS AGREED TO BE SOLD, THEE WAS NO QUESTION OF H ANDING OVER POSSESSION OF THE SAID LAND BY THE APPELLANT TO THE PURCHASERS AND THEREFORE, THERE WAS NO TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT OF THE LAND IN QUESTION AT ANY POINT OF TIM E WITHIN THE BLOCK PERIOD. SECONDLY, THE APPELLANT HAS RELIED UPON THE SUPPLEMENTARY AGREEMENT CUM POSSESSION DATED 20/01/2003 TO PROVE THAT THE POSSESSION OF LAND TO THE EXTENT OF 25341 SQ. YDS W AS GIVEN TO THE PURCHASES WHEREIN IT IS CLEARLY STATED THAT YOU PURCHASER HAS TO TAKE POSSESSIONS OF LAND OF 25341.70 SQ.YDS AS PER BANAK HAT ON TODAY . THERE IS CONSIDERABLE FORCE IN THE CONTENTION OF TH E APPELLANT THAT THE IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 10 SEIZED BANAKHAT DATED 04/06/1996 DOES NOT STIPULATE HANDING OVER OF THE POSSESSION OF LAND IN QUESTION AND THEREFORE, T HERE WAS NO TRANSFER OF LAND UNDER SUCH AGREEMENT SO AS TO BRING ANY PRO FIT OR UNDISCLOSED PROFIT DURING THE BLOCK PERIOD. MOREOVER, WHEN A CI VIL SUIT NO.4801/98 WAS FILED IN THE CITY CIVIL COURT AGAINST THE PURCH ASERS ON ACCOUNT OF DISPUTES DUE TO NON PAYMENT OF BALANCE SALE CONSIDE RATION AND ULTIMATELY IN A COMPROMISE REACHED BETWEEN THE PART IES, THE LAND ADMEASURING ABOUT 25342 SQ.YDS WAS AGREED TO BE TRA NSFERRED THAT ITSELF SHOWS THAT NO TRANSFER HAD TAKEN PLACE DURIN G THE BLOCK PERIOD OF THE LAND IN QUESTION. UNDER THE CIRCUMSTANCES, I THEREFORE HOLD THAT THE RE WAS NO HANDING OVER OF POSSESSION OF LAND IN QUESTION TO A NY EXTENT BY THE APPELLANT TO THE PURCHASERS AND THUS, THERE WAS NO TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT DURING THE BLOC K PERIOD AND HENCE, BUSINESS PROFIT OF RS.36,52,656/- ASSESSED AS UNDIS CLOSED PROFIT BY THE A.O IS DIRECTED TO BE DELETED. 12. FROM BOTH THE SIDE, PARTIES APPEARED AND RESPEC TIVELY PLACED RELIANCE ON THE ORDERS OF ASSESSING OFFICER AND LD. CIT(A). 13. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE DO CUMENTS PLACED ON RECORD IN THE LIGHT OF THE ORDERS OF THE AUTHORITIES BELOW . LD. CIT(A) HAS APPRECIATED TWO FACTS, AS IS EVIDENT FROM THE PARA REPRODUCED HEREI NABOVE; THAT THE ACTUAL POSSESSION WAS HANDED OVER ON 10-01-2003 ON THE LAN D IN QUESTION. AND ANOTHER FACT WAS ALSO APPRECIATED THAT DUE TO DISPUTE BETWE EN THE PARTIES A CIVIL SUIT WAS FILED AGAINST THE PURCHASERS M/S. TRIMURTI ASSOCIAT ES. LATER ON THEREAFTER VIDE A CIVIL SUIT BEARING NO.4801/98 THE DISPUTE WAS COMPROMISED . AS PER THE TERMS OF THE SAID COMPROMISE, THE LAND AD MEASURING ABOUT 25,342 SQ.Y DS WAS AGREED TO BE TRANSFERRED. BECAUSE OF THE SAID FACT, LD. CIT(A) H AS CATEGORICALLY HELD THAT THE COMPROMISE ITSELF HAS PROVED THAT THE LAND WAS NOT TRANSFERRED EARLIER BUT TRANSFERRED ONLY AFTER THE COMPROMISE. ON ACCOUNT OF THESE TWO FACTS, IT WAS CONCLUDED THAT THE PROVISIONS OF SECTION 2(47) OF THE ACT HAVE NOT APP LIED ON THE FACTS OF THE CASE, SINCE NO TRANSFER TOOK PLACE DURING THE BLOCK PERIOD HENC E THE PROFIT WAS WRONGLY TAXED. RATHER, THERE WAS A MENTION OF ANOTHER SUPPLEMENTAR Y AGREEMENT-CUM-POSSESSION AGREEMENT DATED 20-01-2003 IN SUPPORT OF THE FACT T HAT POSSESSION WAS HANDED OVER LATER ON. IT WAS POINTED OUT THAT A RETURN OF INCOM E WAS FILED IN THE REGULAR COURSE FOR A.Y 2003-04 ON 30-03-2005 DECLARING BUSINESS PROFI T AT RS.35,43,481/-. ON IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 11 ACCOUNT OF THESE FACTS, ONCE ADMITTED FACTUAL POSIT ION WAS THAT THE POSSESSION OF THE LAND HAD NOT BEEN HANDED OVER DURING THE BLOCK PERI OD IN QUESTION AND THAT THE POSSESSION WAS HANDED OVER AFTER THE DISPUTE WAS SE TTLED THROUGH A COMPROMISE SUIT IN THE CIVIL COURT AND THAT THEREAFTER THE PRO FIT IN QUESTION WAS DECLARED IN A.Y. 2003-04; WE HEREBY CONFIRM ALL THOSE FINDINGS OF LD . CIT(A) AND FIND NO FORCE IN THE GROUNDS OF THE REVENUE. ACCORDINGLY, THESE GROUNDS OF THE REVENUE ARE HEREBY DISMISSED. 14.1 BEFORE WE PART WITH, IT IS REQUIRED TO CONSIDE R ONE OF THE ARGUMENT OF LD. DR IN RESPECT OF CONTRAVENTION OF RULE 46A(3) OF TH E I.T. RULES, 1962. THIS ARGUMENT ALSO HAS NO SUBSTANCE BECAUSE THERE WAS NO ADDITIONAL EVIDENCE WHICH WAS ADMITTED OR ENTERTAINED BY LD. CIT(A). TH IS IS A CASE WHICH IS COVERED BY SEARCH OPERATION, HENCE THE REQUISITE DO CUMENTS WERE ALREADY BEFORE THE REVENUE AUTHORITIES. IT WAS CLARIFIED BY THE LD. AR THAT AS FAR AS COPIES OF THE LEDGER ACCOUNT AND PHOTO-COPIES OF TH E CASH BOOKS ARE CONCERNED THOSE WERE VERY MUCH PART AND PARCEL OF T HE REVENUE RECORD. LIKEWISE, THE PROOF OF FILING OF RETURN FOR A.Y. 20 03-04 WAS ALSO PART AND PARCEL OF THE REVENUE RECORD. AT THE MOST, THE CONNECTED E VIDENCE TO SUBSTANTIATE THE RESULT OF THE CIVIL SUIT WAS FILED BUT THE FACT ABOUT THE DISPUTE BETWEEN THE PARTIES WAS VERY MUCH IN THE NOTICE OF THE REVENUE AUTHORITIES. WE ARE ALSO OF THE OPINION THAT THE RELIEF BY LD. CIT(A) WAS NO T GRANTED MERELY ON APPRECIATION OF ONE SINGLE EVIDENCE I.E. COMPROMISE MADE BETWEEN THE TWO PARTIES; BUT LD. CIT(A) HAS ALSO RELIED UPON THE PR OVISIONS OF SECTION 2(47) OF THE IT. RULES, 1962 ALONG WITH OTHER FACTUAL ASPECT S WHICH WERE NOT AT ALL SAID TO BE A FRESH EVIDENCE FURNISHED BY THE ASSESSEE BE FORE THE FIRST APPELLATE AUTHORITY. THIS OBJECTION OF THE REVENUE DEPARTMENT IS THEREFORE REJECTED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED. B. SHRI PRAHLADBHAI RAMDAS PATEL 16. THE REVENUE HAS RAISED FOLLOWING GROUNDS:- 1.THE LD. COMMISSIONER OF INCOME TAX(A)-XII, AHMED ABAD HAS ERRED IN LAW AND ON FACTS INS DELETING THE ADDITION MADE OF RS.50,000/- BEING THE UNEXPLAINED INVESTMENT IN LAND BY WAY OF INITIAL CO NTRIBUTION. IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 12 2. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHME DABAD HAS ERRED IN LAW AND O FACTS IN DELETING THE ADDITION MADE OF RS.50,000/- BEING THE UNEXPLAINED INITIAL INVESTMENT IN LAND BY ADMITTING ADDITIONAL EVIDENCE IN THE FOM OF CONFIRMATION LETTER ETC. AS MENTIONED IN PARAGRAPH 3.4 OF THE APPELLATE ORDER DATED 28/11/2006 IN THE CASE OF M/S . UMIYA INVESTMENT, IN CONTRAVENTION OF RULE 46A(3) OF THE I.T. RULES, 1962. 17. FACTS IN BRIEF; CONNECTED WITH THESE TWO GROUND S AS EMERGED FROM THE ASSESSMENT ORDER PASSED U/S 158BD R.W.S. 158BC/143( 3) OF THE ACT DATED 31-08- 2001 WERE THAT A BANAKHAT WAS EXECUTED ON 20-05-199 6 AND ACCORDING TO THE PAYMENT DETAILS, A SUM OF RS.5 LAKH WAS PAID IN CAS H AS A TOKEN MONEY ON 07-04- 1996. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE BEING ONE OF THE EIGHT PURCHASERS, THEREFORE MUST HAVE INVESTED HIS SHARE OF THE SAID AMOUNT. THE AO HAS THEREFORE HELD THAT THE ASSESSEE HAS MADE AN UNEXPL AINED INVESTMENT ON 07-04- 1996 OF RS.50,000/- AND TAXED THE SAME U/S.69 OF TH E ACT IN THE BLOCK PERIOD. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY. 18. IN THIS REGARD, LD. CIT(A) HAS CONCLUDED AS UND ER:- 3. NOW THE ONLY GROUND OF APPEAL THAT SURVIVES FOR MY CONSIDERATION IS `THE ADDITION OF RS.50,000/- AS UNEXPLAINED INVESTM ENT BY WAY OF INITIAL CONTRIBUTION IN A.Y 1997-98. IT IS OBSERVED BY A.O. IN PARA 13.1 OF THE ORDER THAT THE APPELLANT HAD FAILED TO SUBMIT THE R EQUIRED INFORMATION AND ADDUCE ANY COGENT EVIDENCE IN SUPPORT OF HIS EX PLANATION THAT INVESTMENT WAS MADE OUT OF HIS EARLIER SAVINGS. HOW EVER, THE COUNSEL FOR THE APPELLANT SUBMITTED THAT AS EXPLAINED IN TH E FRESH APPELLATE PROCEEDINGS BEFORE ME IN CASE OF M/S. UMIYA INVESTM ENTS THE NECESSARY EVIDENCE IN SUPPORT OF THE AFORESAID EXPL ANATION WHICH SHOULD BE CONSIDERED FOR THE PURPOSE OF THIS APPEAL . 3.1 I HAVE GONE THROUGH THE EVIDENCE PRODUCED BY TH E APPELLANT AND IT IS NOTICED FROM THE COPY OF RETURN OF INCOME FOR A. Y 1997-98 FILED ON 31/10/1997 THAT THE APPELLANT WAS A PARTNER IN M/S. NAVDEEP CORPORATION AND PROPRIETOR OF PATEL DAIRY, BESIDES HAVING AGRICULTURAL INCOME. IT IS FURTHER NOTICED THAT THE APPELLANT HA S DISCLOSED THE AGRICULTURAL INCOME OF RS.69,068/-,BESIDES OTHER TA XABLE INCOME OFRS.64,653/-. THE APPELLANT HAS ALSO FILED EXTRACT IN FORM 7 AND 12 WHICH SHOWS THAT THE APPELLANT IS JOINT OWNER OF AG RICULTURAL LAND AT VILLAGE: JEPUR, TALUKA: VIJAPUR DISTRICT: MEHSANA A ND ALSO VILLAGE :SONARDAA, TALUKA: GANDHINAGAR WITH FULL IRRIGATION FACILITY. IN VIEW OF THE AFORESAID EVIDENCE, THE EXPLANATION OFFERED BY THE APPELLANT IS FOUND ACCEPTABLE AND THE ADDITION OFRS.50000/- IS DIRECTE D TO BE DELETED. IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 13 19. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, W E ARE OF THE VIEW THAT IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED FROM THE SI DE OF THE REVENUE, THERE IS NO OCCASION TO DISTURB THE FINDINGS OF FACTS MADE BY T HE LD. CIT(A). HE HAS APPRECIATED THE RETURN FILED BY THE ASSESSEE, WHEREIN THE SOURC E IN RESPECT OF THE ALLEGED UNEXPLAINED INVESTMENT WAS EXPLAINED AND ACCEPTED. ON ACCOUNT OF THESE CIRCUMSTANCES, THE VIEW TAKEN BY LD. CIT(A) IS HERE BY CONFIRMED AND THESE TWO GROUNDS OF REVENUE IS HEREBY DISMISSED. 20. THE REVENUE HAS RAISED FOLLOWING GROUND NO.3 & 4:- 3. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.65,00,000/- BEING 1/8 TH SHARE OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF LAND. 4. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS.6,00,000/- BEING 1/8 TH SHARE OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF LAND, BY ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF PAGE N O.177 TO 190 OF THE PAPER BOOK AS MENTIONED IN PAGE NO.,6 OF THE APPELL ANT ORDER DATED 28/11/2006 IN THE CASE OF M/S. UMIYA INVESTMENT IN CONTRAVENTION OF RULE 46A(3) OF THE I.T. RULES, 1962. 21. ACCORDING TO ASSESSING OFFICER ON 20-05-1996 OU T OF THE TOTAL INVESTMENT, THE CONCERNED M/S UMIYA INVESTMENT COULD NOT ESTABLISH THE SOURCE OF PAYMENT OF RS.48 LAKH., HENCE, ASSESSEE BEING 1/8 TH INVESTOR THEREFORE UNABLE TO EXPLAIN HIS SHARE OF INVESTMENT OF RS.6 LAKH, WHICH WAS TAXED U/S 69 OF THE ACT IN THE BLOCK PERIOD. 22. LD. CIT(A) HAS EXAMINED THE ISSUE AND THEREAFTE R HELD AS UNDER:- 2.1 THE FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE OF M/S. UMIYA INVESTMENTS AND HENCE, THE SAME ARE N OT REPEATED HERE. THE ASSESSMENT OF UNDISCLOSED INCOME AT RS.13,32,55 2/- CONSIST OF THE FOLLOWING THREE ITEMS. (A) 1/8 TH SHARE IN THE PROFIT OF LAND TRANSACTION RS.4,56,58 2/- (B) INITIAL PAYMENT FOR LAND RS. 50,000/- (C) 1/8 TH SHARE IN UNEXPLAINED EXPENDITURE RS.6,00,000 IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 14 I FIND THAT MY PREDECESSOR CIT(A) XII VIDE HIS ORDE R NO. CIT(A)-XII/CIR- 6/69/01-02 DATED 30/03/2004, HELD THAT SINCE THERE CAN NOT BE DOUBLE TAXATION OF ANY INCOME AND THE ASSESSMENT MADE IN T HE HAND OF THE APPELLANT WAS CONSIDERED ON PROTECTIVE BASIS AND IT WAS CONFIRMED ON PROTECTIVE BASIS, WHERE AS SUBSTANTIVE ADDITION WER E MADE IN THE HANDS OF M/S. UMIYA INVESTMENTS AOP. I HAVE ALREADY CONS IDERED THE AFORESAID ISSUES IN THE APPEAL IN THE CASE OF M/S. UMIYA INVESTMENTS AND VIDE MY ORDER NO. CIT(A) XII/CIR.6/78/06-07 PAS SED BY ME ON 28.11.2006 DELETED THE IMPUGNED ADDITION HOLDING TH AT THERE WAS NO TRANSFER OF LAND IN QUESTION DURING THE BLOCK PERIO D AND THE ADDITION TOWARDS SO-CALLED PROFIT WAS DELETED FOR THE DETAIL ED REASONING GIVEN IN THE SAID APPELLATE ORDER. FURTHER MORE, I HAVE ALSO DELETED THE ADDITION MADE TOWARDS THE PAYMENT OF PURCHASE CONSIDERATION OF RS.1.42 CRORES WHICH INCLUDES THE PAYMENT OF RS.48 LACS AND HENCE, THE 1//8 TH SHARE OF THE APPELLANT INCLUDED IN THE UNDISCLOSED INCOME SH OULD BE DELETED. ACCORDINGLY, THE ADDITIONS OF RS.4,56,582/- AND RS. 6,00,000/- MADE BY A.O ARE DIRECTED TO BE DELETED. 23. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, W E ARE OF THE VIEW THAT THE IMPUGNED ADDITION HAS STOOD EXPLAINED BY M/S OMIYA INVESTMENTS, AS DISCUSSED HEREINABOVE WHILE DECIDING REVENUES APPEAL IN THAT CASE. WE HAVE ALREADY HELD THAT THERE WAS A NEXUS BETWEEN THE INVESTMENT AND T HE AMOUNT RECEIVED ON SALE OF THE SAID PROPERTY THEREFORE ON THE SAME LINES WE FI ND NO REASON TO DEVIATE FROM THE VIEW ALREADY TAKEN. THESE GROUNDS OF THE REVENUE AR E HEREBY DISMISSED. 24. THE REVENUE HAS RAISED FOLLOWING GROUNDS NO.5 & 6:- 5. THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF UND ISCLOSED INCOME OF RS.4,56,682/- BEING 1/8 TH SHARE IN THE PROFIT ON THE SALE OF LAND. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XII, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 25. THE ASSESSING OFFICER HAS MADE THE ADDITION CONSEQU ENCE UPON THE PROFIT CALCULATED IN THE CASE OF M/S UMIYA INVESTMENT. HOW EVER, WHEN THE MATTER WAS CARRIED BEFORE LD. CIT(A), THE SAME WAS DELETED FOL LOWING THE VIEW TAKEN BY LD. CIT(A) IN THE CASE OF M/S UMIYA INVESTMENT. WE ARE ALSO OF THE VIEW THAT WHILE DEALING WITH THESE ISSUES HEREINABOVE, WE HAVE NOTE D THAT THE ALLEGED PROFIT WAS IT(SS)A NO.39-40/AHD/2007 B.P 1/4/86 TO 21/1/97 ACIT CIR-6 ABD V. M/S UMIYA INVESTMENT & SH. PRAHL ADBHAI R PATEL PAGE 15 DULY DISCLOSED BY THE SAID CONCERNED IN THE REGULAR COURSE FOR A.Y. 2003-04 AND THEREUPON WE HAVE DECIDED TO AFFIRM THE DELETION CO NSEQUENT THEREUPON ACCORDING TO US THERE WAS NO OCCASION ON THE PART OF THE ASSESSI NG OFFICER TO ASSESS THE PROFIT IN THE HANDS OF THE ASSESSEE. WE HOLD ACCORDINGLY AND CONFIRM THE DELETION. RESULTANTLY, THESE GROUNDS OF THE REVENUE ARE ALSO DISMISSED. 26. IN THE COMBINE RESULT, BOTH THE APPEALS OF THE REVE NUE ARE DISMISSED. % $ !'# &'( 26/ 03 /201 2 ! - . / 0 THIS ORDER PRONOUNCED IN OPEN COURT ON 26 /03/ 201 2. SD/- SD/- ( B.P. JAIN ) ( MUKUL KUMAR SHRAWAT ) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) &'(- 26/03/2012 2 0 DKP* $ $ $ $ 334 334 334 334 54' 54' 54' 54' / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ''38 9 / CONCERNED CIT 4. 9- / CIT (A) 5. 4? @% / GUARD FILE. BY ORDER/ $ , /TRUE COPY/ A/2 ' 38#, 2 0