Shri Menandbhai S. Khimaniya, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, RAJKOT-GUJARAT

ITSSA 4/RJT/2011

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3309 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-04-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Documents seized
• Section: 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) BEFORE SHRI MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI MANISH BORAD , ACCOUNTANT MEMBER ./ ITSS NO S . 04 & 05 / RJT /201 1 AND 30&31/RJT/2013 / ASSTT. YEAR S : 20 0 3 - 20 04 AND 2004 - 2005 SHRI MENANDBHAI S. KHIMANIYA SAGAR APPARTMENT, OPP. STATE BANK OF HYDERABAD, KALAWAD ROAD, RAJKOT PAN : ACKPK8197L VS ACIT, CENTRAL CIRCLE - 2, RAJKOT (APPLICANT) (RESPONENT) ASSESSEE BY : SHRI M.J. RANPURA , AR REVENUE BY : SHRI YOGESH PANDEY , SR.DR / DATE OF HEARING : 20 / 04 / 201 7 / DATE OF PRONOUNCEMENT: 22 / 05 /201 7 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THESE BUNCH OF FOUR APPEAL S ARE DIRECTED AT THE INSTANCE OF A SSESSEE FOR ASST.YEAR S 2003 - 04 AND 2004 - 05 . T WO APPEALS RELATES TO QUANTUM ADDITION AND OTHER TWO AGAINST THE PENALTY IMPOSED U/S.271(1)(C) OF THE ACT. ITSS NO S .04 - 05/RJT /2011 RELATING TO QUANTUM ADDITION ARE DIRECTED AGAINST THE SEPARATE ORDER S OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - IV , AHMEDABAD (IN SHORT LD.CIT(A) ) OF EVEN DATE 20/01/2011 , ARISING OUT OF SEPARATE ORDERS U/S.153A OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS ACT) DATED 22/12/2009 FRAMED BY ACIT, CENTRAL CIRCLE - 2, RAJKOT. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 2 2. AS ALL THESE FOUR APPEALS RELATED TO THE SAME ASSESSEE INVOLVING COMMON ISSUES IN QUANTUM AS WELL AS PENALTY U/S.271(1)(C) OF THE ACT , THEY HAVE BEEN HEARD T OGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY: 3. ASSEESSEE HAS RAISED FOLLOWING GROUND S OF APPEAL IN ITSS NO.04/RJT/2011 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS.3 ,00,000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.68 O F THE ACT. THE ADDITION OF RS.3 ,00,000/ - MAY KINDLY BE DELETED. 3.0 YOUR HONORS APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 3.1 GROUNDS OF APPEAL RAISED BY ASSESSEE VIDE ITSS NO. 05/RJT/2011 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOU T PREJUDICE TOANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS.15,00,000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.68 OF THE ACT. THE ADDITION OF RS.15,00,000/ - MA Y KINDLY BE DELETED. 3.0 YOUR HONORS APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 4. FROM GOING THROUGH THE ABOVE GROUNDS WE FIND THAT SOLITARY GRIEVANCE OF THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING ADDITION MADE BY L EARNED ASSESSING O FFICER (IN SHORT LD.AO) OF RS.3,00,000/ - AND ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 3 RS.15,00,000/ - TOWARDS UNEXPLAINED INVEST MENT FOR A.YS 2003 - 04 AND 2004 - 05. 5. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM COMMISSION AND OTHER SOURCES. SEARCH ACTION U/S.132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 30/05/2007. DU RING THE COURSE OF SEARCH, VARIOUS DOCUMENTS AND BOOK OF ACCOUNTS WERE FOUND AND SEIZED . N OTICE U/S.153A WA S ISSUED AND DULY SERVED UPON THE ASSESSEE. IN RESPONSE THERE T O ASSESSEE FILED RETURN OF BOTH THE YEARS ON 05/12/ 2008 , DECLARING INCOME OF RS.97,750 / - AND RS.1,33,580/ - FOR A.YS 2003 - 04 AND 2004 - 05 RESPECTIVELY. ASSESSEE HAS ALSO SHOWN INCOME FROM AGRICULTURE. NOTICE U/S.142(1) OF THE ACT ALONG WITH THE QUESTIONNAIRE WAS SERVED UPON . D URING THE COURSE OF ASSESSMENT PR OCEEDINGS DOCUMENTS SEIZED D URIN G THE COURSE OF SEARCH WERE ANALYZED WHICH WERE INDICATING ASSESSEES CONNECTION IN LAND DEAL AT SURVEY NO.54 AT MOTA MAVA, RAJKOT. IT WAS ALSO OBSERVED THAT AGREEMENT OF SALE DATED 31/03/2003 RELATING TO LAND AT SURVEY NO.54 MEASURING 8 ACRES AND 23 GHUNT AS WAS SIGN ED BY SMT. SAVITABEN THUMMAR WIF E OF MR.GHUSABHAI THUMMAR AS A SELLER IN THE CAPACITY OF LEGAL HEIR AND GUARDIAN. IT WAS ALSO REVEALED THAT AS PER THIS AGREEMENT DT.31/03/2003 IN THE YEAR 1995 A SSESSEE ENT ERED INTO AGREEMENT WITH LATE GHUSAB HAI THUMMAR FOR PURCHASE OF LAND AT SURVEY NO.54 AND PAID ADVANCE OF RS.2,00,000/ - IN 1995. F URTHER SMT.SAVITABEN THUMMAR HAS ACCEPTED TO HAVE RECEIVED CASH OF RS.3,00,000/ - ON 31/03/2003 AND RS.15,00,000/ - ON 17/04/2003. ASSESSEE S CONTENTION IS THAT HE HAS PAID RS.18,50,000/ - TO MR.GHUSABHAI THUMMAR (RS.2,00,000/ - + RS.16,50,000/ - ) TO ACQUIRE THE LAND BUT WAS UNABLE TO PAY REMAINING AMOUNT OF RS.1,50,000/ - . SUBSEQUENTLY MR.GHUSABHAI THUMMAR EXPIRED AND THE TRANSACTION COULD NOT BE COMPLETED . I T WAS ONL Y TO SAFEGUARD THE ADVANCE PAYMENT GIVEN IN THE EARLIER ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 4 YEARS , THAT AGREEMENT DATED 31/03/2003 WAS ENTERED WITH SMT.SAVITABEN THUM MAR WHEREIN SHE ACKNOWLEDGED THAT SHE HAS RECEIVED ADVANCE FROM ASSESSEE. 6. HOWEVER, LD.AO WAS NOT CONVINCED WITH THE REPLY OF ASSESSEE AND BANKED UPON THE AGREEMENT ENTERED BETWEEN THE ASSESSEE AND SMT.SAVITABEN THUMMAR . AS THE ASSESSEE WAS UNABLE TO PROVE THE SOURCE OF RS.18,00,000/ - PAID TO SMT.SAVITABEN THUMMAR, ADDITION TOWARDS UNEXPLAINED INVESTMENT IN LAND WAS MADE AT RS.3,00,000/ - FOR A.Y. 2003 - 04 AND RS. 15,00,000/ - FOR A.Y.2004 - 05 WAS MADE BY OBSERVING AS FOLLOWS: 5.4 IN THE CASE OF THE ASSESSEE, SATAKHAT (AGREEMENT TO SALE) WAS MADE WITH THE LAND OWNER WHEREIN SALE CONSIDERATION IS PAID IN CASH AND RECEIPT OF THE SAME IS DULY RECORDED AND TRANSFER OF REAL POSSESSION TOOK PLACE SUBJECT TO CONDITION THAT THE BALANCE SUM SHALL BE PAID ONCE THE NAME OF THE HEIRS OF THE SELLER IS ENTERED ON LAND RECORDS. BESIDES, FROM 17.4.2003 THE DATE ON WHICH THE POWER OF ATTORNEY WA S ISSUED, ALL RIGHT IN PROPERTY SUCH AS TRANSFER, SALE MORTGAGE ETC WAS MADE. SMT SAVITABEN SOLD THE SUB - PLOTTED PROPERTIES BY PREPARING AGREEMENT TO SALE DIRECTLY IN THE NAME OF THE PARTIES AND THE DOCUMENTED PRICE WAS RECORDED IN HER BOOKS. IN PAGE NUMBE RS 19 TO 21 OF ANNEXURE A/4 WHICH IS A SAMJHUTI KARAR (MOU) DATED 17/4/2003 BETWEEN SMT. SAVITABEN AND HER CHILDREN ON THE ONE HAND AND THE ASSESSEE ON THE OTHER HAND, IT HAS BEEN CLEARLY MENTIONED THAT THE ASSESSEE WOULD PAY RS. 6,00,000/ - TO SMT SAVITABE N AND HER CHILDREN FOR REGISTERING THE SUB PLOTS MADE IN THE LAND BY THE ASSESSEE, IN THE NAME OF THIRD PERSONS WHO WOULD BE THE PURCHASERS ON WHOSE NAME THE PLOTS WOULD BE REGISTERED. IT HAS BEEN MENTIONED THAT THIS PAYMENT OF RS.6,00,000/ - WOULD BE IN AD DITION TO THE PAYMENTS OF RS.20,00,000/ - ALREADY RECEIVED AND THIS PAYMENT OF RS.6,00,000/ - WOULD BE SPECIFICALLY FOR THE PURPOSE OF REGISTERING THE PLOTS IN THE NAMES OF THE THIRD PARTIES. THE EARLIER PAYMENT OF RS.20,00,000/ - WAS FOR GIVING POWER OF ATTO RNEY AND ALL RIGHTS IN THE PROPERTY SUCH AS TRANSFER, SALE MORTGAGE ETC. THUS IT IS NOW PROVED THAT THE ASSESSEE HAD TAKEN POSSESSION OF LAND AFTER MAKING PAYMENT OF RS.2,00,000 IN 1995, RS 3,00 , 000/ - ON 31.3.2003 AND RS 15,00,000/ - ON 17.4.2003 AND THERE AFTER AFTER PLOTTING AND CONDUCTING NECESSARY FORMALITIES THE ASSESSEE HAS PREPARED A SALE DOCUMENT IN THE NAME OF SMT SAVITABEN AS SELLER AND THE PURCHASERS OF THESE SUB PLOTS IN WHOSE NAME THEY HAVE BEEN REGISTERED. THUS BY USING HIS POWER AS POWER OF AT TORNEY HOLDER OF THE SAID LAND THE ASSESSEE HAS TAKEN THE ON MONEY ON THE SALE OF THESE SUB - PLOTS FROM THE PURCHASERS IN WHOSE NAMES THESE PLOTS WERE REGISTERED.. IT IS AN ACCEPTED FACT THAT, ON MONEY CONSIDERATION IS AN ACCEPTED AND COMMON FEATURE IN ANY LAND / PROPERTY TRANSACTION. HENCE, IT IS PROVED FROM THE SEIZED DOCUMENTS THAT THE ASSESSEE ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 5 HAS PAID RS 3,00,000/ - ON 31.3.2003 AND RS 15,00,000/ - ON 17.4.2003 ON THE FULFILLMENT OF CONDITION THAT THE NAME OF SMT SAVITABEN AND HER CHILDREN WAS ENTERED ON THE LAND RECORDS AS MENTIONED IN PARA 2 OF THE AGREEMENT TO SALE. SINCE THE FIRST INSTALLMENT OF RS.2,00,000 HAS BEEN MADE IN THE YEAR 1995, AND AS THE SAME PERTAINS TO PERIOD BEYOND THE BLOCK PERIOD, NO COGNIZANCE OF THE SAME IS BEING TAKEN. THEREFORE IT IS HELD THAT WHAT IS MENTIONED IN ANNEXURE A - 4 IS THE TRUE PICTURE. 7 . AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE LD.CIT(A) BUT COULD NOT SUCCEED. LD.CIT(A) CONFIRMED THE ADDITION OF RS.18,00,00/ - (RS.3,00,000/ - + 15,00,000/ - ) BY OBSERVING AS FOLLOWS: 3.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND THE FACTS OF THE CASE. AS PER THE FACTS OF THE CASE, A SEARCH WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 30.05.2007. DURING THE COURSE OF SEARCH VARIOUS DOCUMENTS WERE REC OVERED RELATING TO THE LAND .AT SURVEY NO. 54 SITUATED AT MOTA MAVA OF RAJKOT DISTRICT MEASURING 8 ACRES AND 23 GUNTHAS BELONGING TO LATE SHRI GHUSABHAI THUMMAR AND HIS WIFE SMT. SAVITABEN THUMMAR. THE DETAILS ARE IN THE DOCUMENTS SEIZED AT ANNETURE - 2 AND THE DETAILS ARE NOT IN DISPUTE. THE LAND WAS FOUND DEVELOPED AS RADHKRISHNA PARK - L AND RADHKRISHNA PARK - LL. THE PAPERS RELATING TO AGREEMENT TO SALE DATED 31.03.2003 BETWEEN SMT SAVITABEN AND THE ASSESSEE, THE RECEIPT OF CASH OF RS. 3,00,000/ - DATED 31.03. 2003 AND RECEIPT OF CASH OF RS. 15,00,000/ - DATED 17.04.2003 AND OTHER RELATED PAPERS WERE ALSO RECOVERED AND SEIZED AS PER PAGE - 1 TO 24 OF ANNEXURE - 4. THERE IS NO DISPUTE ABOUT THE RECOVERY OF ABOVE DOCUMENTS FROM THE POSSESSION OF THE APPELLANT. THE PAGE WISE DETAILS HAVE BEEN DISCUSSED BY THE ASSESSING OFFICER IN PARA - 4 OF THE ASSESSMENT ORDER. PAGES - 22 TO 24 OF THIS ANNEXURE - 4 IS A COPY OF AGREEMENT TO SALE DATED 31.03.2003. THIS AGREEMENT TO SALE HAS BEEN SIGNED BY SMT SAVITABEN THUMMAR IN THE CAPACIT Y OF LEGAL HEIR AND GUARDIAN OF HER CHILDREN AS HER HUSBAND SHRI GHUSABHAI HAD EXPIRED ON 22.08.2002. ON PAGE - 23, IT HAS BEEN MENTIONED THAT, THIS AGREEMENT TO SALE IS BEING PREPARED TO RECORD THE SALE OF LAND SITUATED AT SURVEY NO 54 MEASURING 8 ACRES AND 23 GHUNTAS FOR WHICH THE ASSESSE E HAD PAID A SUM OF RS 2,00,000/ - IN THE YEAR 1995. THIS PAGE FURTHER STATES THAT VIDE THIS NEW AGREEMENT (DATED 31.03.2003) CASH PAYMENT OF RS 3,00,000/ - TO SMT. SAVITABEN ON THE DATE OF AGREEMENT I.E., 31.03.2003 IS BEING RECORDED FOR PURCHASE OF THE PROPERTY MENTIONED SUPRA. THESE PAGES FURTHER HIGHLIGHT THE FACT THAT VIDE THIS NEW AGREEMENT BOTH THE PARTIES HAVE AGREED TO IMPLEMENT THE CONTRACT MADE WITH LATE SHRI GHUSABHAI THUMRNAR IN THE YEAR 1995 IN CONNECTION WITH TR ANSFER OF PLOT OF LAND SITUATED AT SURVEY NO 54 AT MOTA MAVA HAVING TOTAL AREA OF 3 ACRES BELONGING TO SAVITABEN THUMMAR AND SURVEY NO. 54 PAIKI I AT MOTA MAVA BEING TOTAL AREA OF 5 ACRE AND 23 GHUNTHAS. PAGES - 17 & 18 IS A COPY OF RECEIPT CUM TRANSFER OF POSSESSION RIGHT DATED 17.04.2003 IN RESPECT OF THE ABOVE LAND. THIS MONEY RECEIPT AND TRANSFER OF POSSESSION RIGHT OF THE ENTIRE LAND ADMEASURING 8 ACRES AND 23 GHUNTHAS SITUATED AT SURVEY NO 54 AT MOTA MAVA IS ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 6 MADE ON 17.04.2003. THIS MONEY RECEIPT AND TRANSFER OF POSSESSION RIGHT CLEARLY STATED THE SEQUENCE OF THE ENTIRE TRANSACTION. THIS DOCUMENT HAS BEEN SIGNED BY SMT SAVITABEN THUMMAR IN THE CAPACITY OF LEGAL HEIR AND GUARDIAN OF HER CHILDREN. ON PAGE - 17, IT HAS BEEN MENTIONED THAT SMT SAVITABEN, ON ACCOUNT OF THE DEATH OF HER HUSBAND, HAD PREPARED A NEW AGREEMENT DATED 31.03.2003 VIDE WHICH LAND HAS BEEN SOLD TO THE ASSESSEE BY HER BY VIRTUE OF A POWER OF ATTORNEY AND FOR THAT AND APART FROM THE CASH OF RS 2,00, 000/ - (RECEIVED IN 1995).AND RS 3,00,000/ - (RECEIVED ON - 31.03.2003), SHE HAD RECEIVED THE BALANCE SUM OF RS 15,00,000/ - FROM THE ASSESSEE ON THE DATE ON WHICH THIS DOCUMENT HAS BEEN PREPARED (I.E., ON 17.04.2003). AFTER RECORDING THE RECEIPT OF CASH OF RS 15,00,000/ - , SHE TRANSFERS COMPLETE RIGHT AND UTILITY OF THE ABOVE LAND SITUATED AT SURVEY NO 54 OF 8 ACRES AND 23 GHUNTHAS TO THE ASSESSEE. IT FURTHER STATES THAT THE ASSESSEE HAVING RECEIVED THE POSSESSION RIGHT OF THE PROPERTY HAS TO GET THE SAME CONVER TED INTO NON - AGRICULTURAL ONE AND AT THE CHOICE OF THE ASSESSEE EITHER GET THE SAME REGISTERED IN HIS NAME OR IN THE NAME OF THE PERSONS WHOM THE ASSESSEE WISHES. IT FURTHER STATES THAT IN ORDER TO ENSURE THAT THE REGISTRATION TAKES PLACE, SMT SAVITABEN TH UMMAR HAS GIVEN POWER OF ATTORNEY TO SHRI ASHWIN MENAND AHIR, SON OF THE ASSESSEE. THTE POWER OF ATTORNEY IS IRREVOCABLE, AND SMT SAVITABEN PROMISES TO ABIDE BY IT. THUS, IT IS SEEN THAT THE ASSESSEE HAD MADE A TOTAL PAYMENT OF RS 18,00,0007 - IN CASH TO SM T SAVITABEN THUMMAR VIDE RECEIPT DATED 31.03.2003 AND DATED 17.04.2003 (AS PER PAGE - 17 TO 18) WHICH PERTAIN TO THE A .Y. 2003 - 04 AND A.Y. 2004 - 05. THIS DOCUMENT HAS BEEN EXECUTED ON A STAMP PAPER OF RS. 50/ - .THE PAGES - 19 TO 21 IS A MEMORANDUM OF UNDERSTAND ING DATED 17.04.2003 BETWEEN THE ASSESSEE AND SAVITABEN GHUSABHAI THUMMAR & LEGAL HEIRS OF LATE SHR GHUSABHAI THUMRNAR, WHEREIN THE ASSESSEE HAD MADE A FURTHER PROMISE TO PAY AN AD DITIONAL AMOUNT OF RS. 6,00,000/ - TO HER, OVER AND ABOVE THE SUM OF RS 20,00 ,000/ - . THE AFORESAID LAND WAS TRANSFERRED BY WAY OF POWER OF ATTORNEY DATED 17.04.2003 (AS CAN BE SEEN FROM PAGE - 11 TO 16) FOR RS. 26,00,000/ - IN CASH (AS CAN BE SEEN FROM PAGE - 19 TO 21) AND OUT OF WHICH CASH OF RS 20,00,000/ - WAS ALREADY PAID ON 31.03.20 03 AND 17.04.2003 VIDE RECEIPT DATED 17.04.2003 (AS PER PAGE - 17 TO 18). IT IS EVIDENT FROM THE SCRUTINY OF DOCUMENTS RECOVERED DURING THE COURSE OF SEARCH AND INVENTORISED AS PAGE - 1 TO 24 OF ANNEXURE - 4. 3.3 WHEN THE ASSESSEE WAS CONFRONTED TO EXPLAIN THE TRANSACTION NOTED IN ANNEXURE - 4 IN POST SEARCH PROCEEDINGS, THE ASSESSEE DEPOSED IN REPLY TO Q.NO. 14 OF STATEMENT DATED 30.05.2007 THAT HE COULD NOT ARRANGE RS. 20.00 LAKHS AND THE DEAL COULD NOT MATERIALIZED. THIS REPLY OF THE ASSESSEE WAS PATENTLY WRONG AS HE HAD PAID RS. 3,00,000/ - ON 31.03.2003 AND RS. 15,00,000/ - ON 17.04.2003 TO SMT. SAVITABEN THUMMAR AND THE PAYMENT IS EVIDENCED BY THE CASH RECEIPTS. NOTHING ELSE WAS DEPOSED AT THE TIME OF THIS STATEMENT. SUCH DEPOSION OF THE ASSESSEE BEFORE DEPARTM ENTAL AUTHORITIES WAS TOTALLY FALSE AND CONTRARY TO THE EVIDENCES RECOVERED FROM HIS POSSESSION DURING THE COURSE OF SEARCH. AS PER THE ASSESSING OFFICER, THE ASSESSEE HAD TRIED HIS BEST TO MISLEAD THE DEPARTMENT RIGHT FROM THE DATE OF SEARCH. THE ASSESSEE , DURING THE COURSE OF ASSESSMENT PROCEEDINGS,'CAME UP WITH AN ENTIRELY NEW STAND THAT HE HAD MADE PAYMENT OF RS. 16,50,000/ - ON 14.06.1998 TO LATE SHRI GHUSABHAI AS IS APPARENT FROM PAGE - 8 OF ANNEXURE - 13 WHICH ACCORDING TO THE ASSESSING OFFICER IS NOT COR RECT. THIS PAYMENT WAS STATED TO BE PAID IN THE, YEAR 1995 IN ADDITION TO ABOVE. THIS STAND OF THE APPELLANT SEEMS TO BE AFTER THOUGHT AND WITHOUT ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 7 EVIDENCE. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD SUBMITTED THAT HE MADE PAYMENT OF RS. 2,00,000/ - AND RS. 16,50,000/ - TO LATE SHRI GHUSABHAI RESPECTIVELY IN F.Y. 1995 AND ON 14.06.1998 BUT AFTER HIS DEATH ON 22.08.2002, HIS FAMILY MEMBERS REFUSED TO ADHERE TO TERMS OF ORIGINAL AGREEMENT AND REQUESTED TO CANCEL THE SAME. REFERENCE OF VOLUN TARY STATEMENT OF SMT. SAVITABEN IS ALSO MENTIONED IN THE REPLY TO ASSESSING OFFICER. HOWEVER, NONE SUCH DOCUMENTS WERE FURNISHED DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS AN ADMITTED FACT THAT WHEN AN AGREEMENT IS REVISED IN FURTHERANCE TO THE OLD AGREEMENT OR IN 1 CONTINUATION OF OLD AGREEMENT, THE FACTS OF OLD AGREEMENT ARE BROUGHT ON RECORD IN THE NEW AGREEMENT. THERE IS NO REFERENCE OF EARLIER AGREEMENT AS CLAIMED BEFORE THE ASSESSING OFFICER IN THE AGREEMENT SEIZED AT ANNEXURE A - 4 DURING THE CO URSE OF SEARCH. NO ANY OLD OR THE SO CALLED ORIGINAL AGREEMENT WAS RECOVERED DURING THE COURSE OF SEARCH. IF THERE WAS ANY ORIGINAL AGREEMENT, THE SAME WAS TO BE PRODUCED DURING SEARCH PROCEEDINGS OR EVEN APPRISED THE AUTHORITIES ABOUT SUCH AGREEMENT DURIN G THE POST SEARCH PROCEEDINGS WHEN APPELLANT'S STATEMENT WAS RECORDED. AS PER THE SEIZED DOCUMENTS, THE APPELLANT HAD TAKEN RECEIPT FROM SMT. SAVITABEN FOR THE CASH PAYMENTS OF RS. 3,00,000/ - ON 31.03.2003 AND TEX TILE CASH PAYMENT OF RS. 15,00,000/ - ON 17 .04.2003. IF THE APPELLANT HAD ACTUALLY PAID CASH OF RS. 16,50,000/ - TO LATE SHRI GHUSABHAI ON 14.06.1998, SUCH RECEIPT SIGNED BY SHRI GHUSABHAI MUST HAVE BEEN IN THE POSSESSION OF THE APPELLANT AND COULD HAVE BEEN RECOVERED DURING THE COURSE OF SEARCH A T HIS PREMISES. THE ASSESSEE IS A PROPERTY DEALER AND HE KNOWN THE INS AND OUT OF PROPERTY TRANSACTIONS. IT IS HARDLY BELIEVABLE THAT THE CASH PAYMENT OF RS. 16,50,000/ - TO LATE SHRI GHUSABHAI WAS MADE WITHOUT ANY SIGNED RECEIPT. EVEN IF FOR THE SAKE OF CO NVENIENCE, IT IS PRESUMED THAT THE CASH PAYMENT OF RS. 16,50,000/ - TO LATE SHRI GHUSABH AI WAS MADE, THE SAME MUST HAVE BEEN TAKEN BACK BECAUSE A PROPERTY DEALER WILL NOT WAIT FOR THE DOCUMENTATION OF THE PROPERTY FOR SUCH A LONG PERIOD FROM 14.06.1998 (DATE OF ALLEGED PAYMENT) TO 22.08.2002 (DATE OF DEATH OF GHUSABHAI) WHERE NO ORIGINAL AGREEMENT OR NO RECEIPT OF CASH PAYMENT WAS IN THE POSSESSION OF THE APPELLANT. AS RIGHTLY OBSERVED BY THE APPELLANT WAS NOT IN A POSITION IN F.Y. 1998 - 99 TO MAKE ADVANCE PAY MENT OF RS.16,50,000/ - (REFER PARA - 5.3(E)}. THERE IS MUCH SUBSTANCE IN THE FINDING OF THE ASSESSING OFFICER THAT SINCE THE SEIZED AGREEMENT HAS A REFERENCE OF RS.2,00,000/ - BEING PASSED ON FROM THE ASSESSEE TO SHRI GHUSABHAI IN THE YEAR 1995, THEN WHY WOUL D NOT A TRANSFER OF MONEY IN THE YEAR 1998 OF A BIGGER SIZE, NOT FIND REFERENCE IN THE SEIZED AGREEMENT? IF THE SEIZED AGREEMENT WAS PREPARED TO SAFEGUARD HIS INTEREST, AND IF A SMALL SUM OF RS.2,00,000 HAS BEEN RECORDED, THEN THE SUM OF RS 16,50,000 WOULD ALSO HAVE TO BE RECORDED SINCE THE RISK AND STAKE INVOLVED IS HIGHER. THUS IT PROVES THAT EITHER ONLY RS.2,00,000 HAS BEEN PAID IN 1995 AND ANOTHER RS.16,50,000 HAS NEVER BEEN PAID IN 1998 OR IF THE OTHER SUM OF RS. 16,50,000 HAS BEEN PAID THEN IT WAS NO THING BUT THE ON MONEY OVER AND ABOVE THE SUM REFLECTED IN THE AGREEMENT {REFER PARA - 5.3(G)}. THE LD. COUNSEL HAD NOT FURNISHED THE COPY OF HEAVILY RELIED ON DOCUMENT AT PAGE - 8 OF ANNEXURE A - 13, THE SO CALLED ORIGINAL AGREEMENT ENTERED INTO WITH LATE GHUSA BHAI AND REFERRED TO IN THE SUBMISSION BEFORE ASSESSING OFFICER, THE RECEIPT OF CASH PAYMENT OF RS.16,50,000/ - AND THE VOLUNTARY 'STATEMENT OF SMT. SAVITABEN THEREFORE, THE STATEMENT OF THE LD. COUNSEL THAT SUCH THINGS EXISTED HAD NO ANY EVIDENTIARY VALUE. THE PAYMENT OF RS.16,50,000/ - COULD NOT PROVED BY THE LD. COUNSEL BY ANY INDEPENDENCE EVIDENCE WHICH WAS REQUIRED AS THE SAME WAS NOT FOUND PLACE IN THE AGREEMENT RECOVERED ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 8 DURING THE COURSE OF SEARCH AT ANNEXURE A - 4. IT IS THEREFORE, HELD THAT THE SOLD C ALLED PAYMENT OF RS. 16,50,000/ - HAS NO RELATION WITH THE AGREEMENT SEIZED AT ANNEXURE A - 4. IT WAS EITHER RECEIVED BACK DURING LIFE TIME OF LATE SHRI GHUSABHAI AS NO CASH RECEIPT WAS RECOVERED DURING COURSE OF SEARCH OR EVEN COULD NOT BE BROUGHT ON RECORD BY THE ASSESSEE OR THE PAYMENT IF ANY MADE IT WAS OVER AND ABOVE THE AGREEMENT SO SEIZED. IT WAS HOWEVER, NOT THE PART OF THE AGREEMENT SO SEIZED. 3.4 CONSIDERING THE ABOVE DISCUSSION, I AM OF THE VIEW THAT THE ASSESSING OFFICER HAD RECORDED A CATEGORICAL FINDING VIDE PARA - 5.1 TO PARA - 5.5 OF THE ASSESSMENT ORDER AND CONSIDERED EACH AND EVERY ASPECT OF THE LAND TRANSACTION ENTERED INTO BETWEEN THE ASSESSEE AND SMT. SAVITABEN THUMMAR. IT IS EVIDENT FROM THE DOCUMENTS SEIZED AT ANNEXURE A - 4 THAT TH E APPELLANT HAD MADE THE CASH PAYMENT OF RS. 3,00,000/ - ON 31.03.2003 AND ALSO MADE CASH PAYMENT OF RS. 15,00,000/ - ON 17.04.2003. BOTH THE PAYMENTS ARE EVIDENCED BY THE AGREEMENT TO SALE AND THE CASH RECEIPTS FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE APPELLANT WAS UNABLE TO EXPLAIN THE SOURCE OF CASH PAYMENT OF RS. 3,00,000/ - THEREFORE, THE ASSESSING OFFICER HAD MADE THE ADDITION TO THE TOTAL INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION AS UNEXPLAINED INVESTMENT. THE ADDITION SO MADE FO R RS.3,00,000/ - IS HEREBY SUSTAINED AND THE FINDING OF THE ASSESSING OFFICER IS CONFIRMED. THE THIRD GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 8 . AGGRIEVED ASSEESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL FOR A.YS 2003 - 04 AND 2004 - 05 AGAINST THE ADDITION O F RS.3,00,000/ - AND RS.15,00,000/ - CONFIRMED BY LD.CIT(A) AS UNEXPLAINED INVESTMENT IN LAND. 9. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.AO HAS ALLEGED THAT THE APPELLANT PURCHASED LAND AT SURVEY NO.54, MOTA MAVA, RAJKOT ADMEASURING TO 8 ACRES AND 23 GUNTHA FOR RS.20,00,000/ - AND MADE PAYMENT IN THREE INSTALLMENTS AS UNDER: A. FIRST INSTALLMENT OF RS.2,00,000/ - DURING THE YEAR 1995 B. SECOND INSTALLMENT OF RS. 3,00,000/ - ON 31/03/2013 AND C. THIRD INSTALLMENT OF RS.15,00,000/ - PM 17.04.2003 9.1 FURTHER LD. AO ADDED RS.3,00,000/ - AND RS.15,00,000/ - RESPECTIVELY IN ASSESSMENT YEARS 2003 - 04 AND 2004 - 05 ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.69 OF THE ACT ALLEGING THAT PAYMENTS OF SECOND AND THIRD INSTALLMENT, ARE NO T RECORDED IN THE BOOKS OF ACCOUNT. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 9 9.2 LD.COUNSEL STATED THAT DURING SEARCH, LOOSE PAPER FILES MARKED AS ANNEXURE A - 2 AND A - 4 OF THE PANCHNAMA DATED 30/05/2007 WERE SEIZED, ACCORDING TO WHICH THE APPELLANT MADE ABOVE PAYMENTS DURING F.YS 1994 - 95,2002 - 03 AND 2003 - 04. HOWEVER, AS A MATTER OF FACT, APPELLANT MADE PAYME NT OF RS.2,00,000/ - IN F.Y. 1994 - 95 AND RS.16,50,000/ - IN F.Y.1997 - 98 AS IN APPARENT FROM PAGE 8 OF ANN. A - 13, [PAPER BOOK PAGE 12 & 13] TO THE ORIGINAL OWNER OF LAND SHRI GHUSABHAI, DURING HIS LIFETIME AND THEREAFTER ONLY WITH A VIEW TO PROTECT THE APPELL ANTS INTEREST, HE OBTAINED RECEIPT OF RS.3,00,000/ - AND RS.15,00,000/ - IN F.Y. 2002 - 03 AND 2003 - 04 FROM SAVITABEN , THE WIDOW O F LATE GHUSABHAI. AS SUCH NO FURTHER PAYMENTS OF RS.3,00,000/ - AND RS.15,00,000/ - WERE MADE DURING F.YS. 2002 - 03 AND 2003 - 04 AND THE DETAILS AS PER ANNEXURES A - 2 & A - 4 REPRESENTED ONLY CONFIRMATION OF EARLIER PAYMENTS. 9.3 LD.COUNSEL FURTHER SUBMITTED THAT THE LD. AO IGNORED THE PAYMENT MADE IN 1998 ALLEGING THAT (I) THE APPELLANT HAD NO MEANS TO MAKE SUCH PAYMENT, THEREFORE SAME WAS ONLY NOTING AND NO ACTUAL TRANSFER OF MONEY TOOK PLACE AND (II) IF IT IS ACCEPTED THAT THE APP ELLANT PAID SUM OF RS.16,50,000/ - THAN THE SAME IS NOTHING BUT THE ON - MONEY OVER AND ABOVE THE SUM REFLECTED IN THE AGREEMENTS. 10. LD. CIT(A) ALSO ENDORSED THE FINDING OF THE AO AND HELD THAT IF THE APPELLANT H AD PAID THE SUM OF RS.16,50,000/ - THAN THERE MUST HAVE BEEN RECEIPT OF SUCH MONEY WITH THE APPELLANT, SIGNED BY THE SHRI GHUSABHAI AND THE SAME COULD HAVE BEEN RECOVERED DURING THE COURSE OF SEARCH. IT WAS FURTHER STATED THAT, EVEN SUCH SUM PAID BY THE APPELLANT, THE SAME WAS EITHER RECEIVED BACK DURING THE LIFETIME OF LATE SHRI GHUSABHAI OR THE SAME WAS PAID OVER AND ABOVE ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 10 THE VALUE MENTIONED IN AGREEMENT. IN THIS CONNECTION THE FOLLOWING MAY KINDLY BE CONSIDERED: (I) THE DEAL WAS MADE IN 1995 AND APPELLANT MADE MAJORITY OF PAYMENTS TO SHRI GHUSABHAI AND LAST INSTALLMENT OF RS.1,50,000/ - COULD NOT BE PAID AND MEANWHILE DUE TO DEATH OF GHUSABHAI THE LAND COULD NOT BE TRANSFERRED IN THE NAME OF THE APPELLANT. (II) DUE TO DEATH OF SHRI GHUSABHAI, IT WAS IMPERATIVE FOR THE APPELLANT TO SAFE GUARD THE ADVANCE PAYMENTS OF RS.18,50,000/ - MADE TO GHUSABHAI. THEREFORE, HE APPROACHED SAVITABEN, THE WIDOW OF LATE SHRI GHUSABHAI AND CONVINCED HER TO TRANSFER THE LAND AS AGR EED WITH GHUSABHAI OR TO RETURN THE PAYMENTS MADE TO GHUSABHAI. SINCE SAVITABEN HAD NO FUNDS TO RETURN THE MONEY TO THE APPELLANT, WITH A VIEW TO SAFEGUARD THE APPELLANT'S INTEREST THE CONFIRMATION WAS OBTAINED AS PER ANNEXURES A - 2 & A - 4. (III) EVEN THE CONFIRM ATIONS COULD NOT BE OBTAINED WITHOUT ANY CONSIDERATION IN AS MUCH AS SAVITABEN RAISED FOLLOWING FURTHER DEMANDS. A. THAT THE APPELLANT SHOULD PAY ADDITIONAL AMOUNT OF RS.6,00,000/ - I.E. OVER AND ABOVE AGREED RS.20,00,000/ - . B. THAT THE APPELLANT SHOULD ENSURE THAT THE LAND IS ENTERED INTO HER NAME IN THE GOVERNMENT'S LAND REVENUE RECORD. C. THAT THE APPELLANT SHOULD MAKE EFFORTS TO GET THE SAME CONVERTED IN TO NON - AGRICULTURAL LAND FROM AGRICULTURAL LAND AND; D. THAT THE APPELLANT SHOULD HELP HER IN GETTING DOING SUB - PLOTTING OF LAND AND ALSO TO SELL IT. (IV) FURTHER TO SAFE GUARD THE PAYMENTS MADE OF RS.18,50,000/ - , THE APPELLANT GOT EXECUTED A POWER OF ATTORNEY FROM SAVITABEN IN THE NAME OF HIS SON. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 11 11. LD.COUNSEL ALSO APPRAISED THAT THE APPELLANT GOT THE LAND ENTERED INTO REVENUE RECORDS IN THE NAME OF SMT. SAVITABEN, CONVERTED IT FROM AGRICULTURAL TO NON - AGRICULTURAL AND GOT IT SUB - PLOTTED AND THE LAND WAS FINALLY SOLD BY SAVITABEN TO RESPECTIVE BUYERS OF PLOTS. THIS FACT IS ACCEPTE D BY THE AO THAT LAND WAS FINALLY SOLD BY SAVITABEN AND THE APPELLANT WAS NOT AT ALL INVOLVED. IN VIEW OF THE FACTS AS ABOVE IT IS CLEAR THAT THE LAND UNDER CONSIDERATION WAS SOLD BY SAVITABEN DIRECTLY TO OTHERS. AND THE ANNEXURES A - 2 & A - 4 WERE MADE ONLY TO SAFE GUARD THE ADVANCED PAYMENT OF RS.18,50,000/ - AND TO RECEIVE IT BACK FROM SAVITABEN ON SALE OF PLOTS. THE AO IS TOTALLY INCORRECT IN CONSIDERING ONLY ONE PORTION OF THE SEIZED MATERIALS AND IGNORING THE OTHER PART OF THE SAME SEIZED MATERIAL AND TH E ADDITION MADE IN THE CASE OF THE APPELLANT WAS NOT JUSTIFIED. CONSIDERING THE FACTS ON RECORD THAT THE APPELLANT MADE PAYMENTS DURING 1995 AND 1997 - 98 AND NOTHING WAS PAID DURING THE ASSESSMENT YEARS UNDER CONSIDERATION AS ALLEGED BY THE AO, THE ADDITION S OF R S.3,00,000/ - AND RS. 15,00,000/ - MADE IN A.Y. 2003 - 04 AND 2004 - 05 RESPECTIVELY MAY KINDLY BE DELETED 12 . LD.COUNSEL FURTHER RELIED ON THE DECISION OF CO - ORDINATE BENCH IN THE CASE OF M/S.SURYA DEVELOPERS V/S. DCIT VIDE ITA NO.457/RJT/2015 AND OTHER S PRONOUNCED ON 22/04/2016 AND ALSO URGED THAT LD.AO SHOULD HAVE GIVEN DUE COGNIZANCE T O PAGE 8 OF SEIZED MATERIAL AT A NNEXURE A - 13 WHICH CLEARLY INDICATES THAT ON 14/06/1998 ASSESSEE HAD PAID RS.16,50,000/ - TO MR.GHUSABHAI THUMMAR TOWARDS SURVEY NO.54 . A S PER PROVISIONS OF SECTION 153A OF THE ACT , ASSESSMENT SHOULD HAVE BEEN COMPLETED BY TAKING A LL THE SEIZED MATERIAL IN ENTIRETY WHEREAS LD.AO PICKED UP THOSE DOCUMENTS WHICH WERE BENEFICIAL FOR THE REVENUE AND IGNORED OTHERS. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 12 13 . ON THE OTHER HAND LEARNE D DEPARTMENTAL REPRESENTATIVE (IN SHORT LD.DR) SUPPORTED THE ORDER OF THE LOWER AUTHORITIES AND ALSO REFERRED TO TH E PAPER BOOKS FILED BY HIM FROM PAG E NO. 1 TO 40 INDICATING COPIES OF AGREEMENT INDICATING THAT SUM OF RS.18,00,000/ - WAS PAID BY THE ASS ESSEE TO SMT.SAVITABEN GHUSABHAI THUMMAR FOR WHICH NO PLAUSIBLE E XPLANATION AND SOURCES COULD BE PROVED BY THE ASSESSEE. 14 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. COMMON ISSUES RAISED IN THE APPEAL FOR A.YS 2003 - 04 AND 2004 - 05 ARE AGAINST THE ORDER OF LD.CIT(A) CONFIRMING ADDITION OF RS.3,00,000/ - AND RS.15,00,000/ - PAID ON 31/03/2003 AND 17/04/2003 TO SMT.SAVITABEN G. THUIMMAR WHICH LD.AO TREATED UNEXPLAINED INVESTMENTS AS THE ASSESSEE COULD NOT PROVE THE SOURCES. 1 5. WE OBSERVE THAT SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT TOOK PLACE ON 30/05/2007 AT THE RESIDEN TIAL PREMISES OF THE ASSESSEE AND V ARIOUS DOCUMENTS INCLUDING LOOSE PAPERS WERE SEIZED. ISSUE IN THIS APPEAL SPECIFICALLY RELATES TO LAND SITUATED AT SURVE Y NO.54, MOTA MAVA, RAJKOT, MEASURING 8 A CRES AND 23 GHUNTHAS WHICH WAS OWNED BY MR.GHUSABHAI THUMMAR. IN THE YEAR 1995 A SSESSEE ENTERED INTO AGREEMENT TO PURCHASE THE IMPUGNED LAND FROM MR.GHUSABHAI THUMMAR AN D PAID ADVANCE OF RS.2,00,000/ - . CONTROVERSY BEGA N THEREAFTER . BOTH THE LOWER AUTHORITIES HAVE REFERRED TO THE AGREEMENT DATED 31/03/2003 ENTERE D BETWEEN SMT. SAVITAB EN WIFE OF LATE GHUSABHAI TH UMMAR AND THE ASSESSEE SPECIFIES THAT THERE WAS AN AGREEMENT OF SALE OF LAND BETWEEN MR.GHUSABHAI AND ASSESSEE. IT WAS ALSO MENTIONED THAT ADVANCE SUM OF RS.2,00,000/ - WAS PAID BY ASSESSEE TO MR.GHUSABHAI THUMMAR IN 1995 . S ALE C ONSIDERATION MENTIONED IS RS.20,00,000/ - . IN THE AGREEMENT IT IS ALSO ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 13 MENTIONED THAT SUM OF RS.3,00,000/ - WILL BE PAID ON 31/03/2003 AND RS.15,00,000/ - ON 17/04/2003 AND TRANSFER OF POSSESSION OF ENTIRE IMPUGNED LAND MEASURING 8 ACRES AND 23 GHUNTHAS WILL BE MADE. RELYING ON THE S E FACT S ADDITION WAS MADE BY LD.AO AND CONFIRMED BY LD.CIT(A) BY OBSERVING THAT ASSESSEE S SOURCE OF INVESTMENT AT RS.18,00,000/ - IS U NEXPLAINED. 16 . FURTHER LD.COUNSEL FOR THE ASSESSEES CONTENTION IS THAT FOR THE PURCHASE OF IMPUGNED LAND ASSESSEE PAID RS.2,00,000/ - IN THE YEAR 1995 AND RS.16,50,000/ - ON 14/06/1998 TO MR .GHUSABHAI THUMMAR, WHICH IS EVIDENCE BY THE SEIZED MATERIAL AT PAGE NO.8 OF ANNEXURE A - 13 SHOWING AN ACCOUNT WHICH SPECIFICALLY INCLUDES MENTION OF RS.16,50,000/ - PAID BY SHRI MENANDBHAI S. KHIMANIYA I.E ASSESSEE TO MR.GHUSABHAI THUMMAR TOWARDS SURVEY NO.54. ASSESSEE HAS FURTHER SUBMITTED THAT THE LAND DEAL COULD NOT BE COMPLETED BECAUSE OF NOT PAYING REM AINING SUM OF RS.1,50,000/ - TO LATE GHUSABHAI THUMMAR OUT OF TOTAL AGREED CONSIDERATION OF RS.20,00,000/ - AND THEREAFTER MR.GHUSABHAI THUMMAR DIED IN THE YEAR 2002. FURTHER IN ORDER TO SECURE ADVANCE GIVEN TO MR.GHUSABHAI THUMMAR , ASSESSEE APPROACHED SMT. SAVITABEN WIDOW OF LATE GHUSABHAI THUMMAR TO CONVINCE HER TO TRANSFER THE LAND OR RETURN THE PAYMENT MADE BY HIM TO MR.GHUSABHAI THUMMAR . SINCE SMT. SAVITABEN HAD NO FU ND S TO RETURN THE MONEY TO APPELLANT , ASSESSEE WITH A VIEW TO SAFEGUARD THE INTEREST OBTAINED THE RECEIPT OF RS .3,00,000/ - AND RS.15,00,000/ - AS SPECIFIED IN THE AGREEMENT FOUND DURING THE COURSE OF SEARCH. A SSESSEE EVEN HELPED SMT.SAVITABEN IN GETTING HER NAME ENTERED INTO REVENUE RECORD AS AN OWNER OF LAND AND TO GET IT CONVERTED TO NON - AGRICULTURE LAND DOING TH E SUB PLOTTINGS OF LAND AND TO SALE THEM WITH THE SOLE INTEREST OF GETTING BACK THE ADVANCE PAID AT RS.18,50,000/ - ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 14 17 . FROM THE PERUSAL OF THE ABOVE DISCUSSION WE OBSERVE THAT BOTH THE LOWER AUTHORITIES HAS NOT DISPUTED ABOUT THE PAYMEN T OF RS.16,50,000/ - MADE BY ASSESSEE TO MR.GHUSABHAI THUMMAR AND LD.CIT(A) HAS DULY ACCEPTED IN HIS APPELLATE ORDER . BUT IT SEE MS THAT LD.CIT(A) HAS MADE SOME HYPOTHECATION THEORY ON ITS OWN BY OBSERVING THAT IF THE SUM OF RS.16,50,000/ - WAS PAID BY ASSE SSEE TO MR.GUSHABHA I THUMMAR THE N WHERE IS THE RECEIPT SIGNED BY MR.GHUSAHAI THUMMAR ? W HY IT WAS NOT FOUND DURING COURSE OF SEARCH ? LD.CIT(A) FURTHER OBSERVED THAT EVEN IF IT IS ACCEPTED THAN ASSESSEE HAS PAID RS.16,50,000/ - TO MR.GHUSABHAI THUMMAR , THAN IT IS QUITE POSSIBLE THAT IT WAS IN THE SHAPE OF ON MONEY OVER AND ABOVE SUM REFLECTED IN THE AGREEMENT. IT SE EMS THAT LD.CIT(A) HAS APPLIED A DEEMED THEORY AT HIS O WN AND HAS TREATED THE TRANSACTION AS PER HIS CONVENIENCE WITH A PREDETERMI NED NOTIONS . 18 . IT IS A WELL ESTABLISHED PRINCIPLE OF LAW THAT IN THE CASE OF ASSESSMENT U/S.153A OF THE ACT , ASSESSING OFFICER , SHOULD GIVE COGNIZANCE TO THE SEIZED MATERIAL IN ENTIRETY AND ASSESS ACCORDINGLY. EACH AND EVERY DOCUMENTS HAS GOT ITS OWN I MPORTANCE AND IT CANNOT BE KEPT ASIDE WITHOUT GIVING DUE COGNIZANCE. IN THE CASE BEFORE US THER E HAVE BEEN SERIES OF DOCUMENTS, LOOSE PAPERS SEIZED BY THE SEARCH TEAM OF WHICH S OME DOCUMENTS INDICATES THAT ASSESSEE HAS PAID RS.18,00,000/ - TO SMT. SAVITABEN BUT ON THE OTHER HAND PAGE 8 OF THE A NNEXURE A - 13 SUFFICIENTLY PROVES THAT ASSESSEE HAD PAID RS.16,50,000/ - OVER AND ABOVE RS.2,00,000/ - TO MR.GHUSABHAI THUMMAR FOR A LAND DEAL AT SURVEY NO.54. THIS FACT EVEN THOUGH NOT DISPU TED BY THE LOWER AUTHORITIES STILL HAVE NOT BEEN APPRECIATED BY BOTH THE LOWER AUTHORITIES. LD.CIT(A) HAS TREATED IT AS ON MONEY FO R THE IMPUGNED LAND TRANSACTION, E VEN THOUGH MR.GHUSABHAI THUMMAR HAS ALREADY EXPIRED IN 2002 AND NO PROOF OF HIS RECEIVING ON MONEY IS ON RECORD. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 15 19. HOWEVER WHEN WE LOOK TO THE SERIES OF EVENTS WHICH TOOK PLACE BETWEEN ASSESSEE AND MR.GHUSABHAI AS WELL AS ASSESSEE AND SMT. SAVITABEN WE FIND MORE SUBSTANCE TO THE CONTENTION OF LD.COUNSEL THAT ASSESSEE PAID RS.2,00,000/ - AS ADVANCE IN THE YEAR 1995 AND THEN PAID RS.16,50,000/ - IN 14/06/1998 TO MR. GHUSABHAI THUMMAR OUT OF THE TOTAL SALE CONSIDERATION OF RS.2 0,00,000/ - . A SSESSEE COULD NOT PAY REMAINING AMOUNT OF RS.1,50,000/ - AS A RESULT DEAL COULD NOT MATERIALIZED . A SSESSEE WANTED TO GET BA CK IT S ADVANCE OF RS.18,50,000/ - IN THE MEAN TIME MR.GHUSABHAI THUMMAR EXPIRED . T HEREAFTER ASSESSEE APPROACHED SMT. SAVITABEN , WIFE OF LATE GHUSABHAI THUMMAR FOR GETTING REFUND OF THE ADVANCE. S HE WAS NOT HAVING SUFFICIENT FUNDS TO REPAY IT BUT SHE WAS INT ERESTED IN GETTING LAND TRANSFER RED IN HER NAME AND ALSO TO GET IT CONVERTED AS NON - AGRICULTURE LAND SO AS TO DO THE PLOTTING WORK. ASSESSEE LANDED HIS SUPPORT FOR ACCOMPLISHING THE DESIRE D OBJECT OF SMT.SAVITABEN WITH A SOLE MOTIVE OF GETTING HIS ADVANCES BACK. 19.1 IF WE ANALYZE THE ABOVE SERIES OF EVE NTS IN THE GIVEN SITUATION THERE ARE TWO POSSIBILITIES AND BOTH ARE HAVING DUE SUPPORT OF EVIDENCES . I N SUCH A SITUATION PRINCIPLE OF JUSTICE SAY S THAT THE WHICH ONE IS MORE BENEFICIAL TO THE ASSESSEE HAS TO BE GIVEN MORE WEIGHTAGE . IN THE GIVEN CASE ASSESSEE HAS DUE SUPPORT OF THE SEIZED MATERIAL AT PAGE NO.8 OF ANNEXURE A - 13 WHICH SHOWS THAT ASSESS EE HAS PAID RS.16,50,000/ - TO MR .GHUSABHAI THUMM AR ON 14/06/1998 TOWARDS SURVEY NO.54 . THERE IS NO OTHER REASONS FOR THE ASSESSEE TO PAY RS.18,00,000/ - AGAIN TO MR.SAVITABEN WITHOUT ACQUI RING ANYTHING BECAUSE IT IS ACCEPTED FACT BY THE REVENUE AUTHORITIES ALSO THAT THE LAND WAS FINALLY SOLD BY SMT.SAVI TABEN TO SOME OTHER PERSON AND APPELLANT WAS NOT AT ALL INVOLVED. ONE CERTAINLY CANNOT BELIEVE THAT ASSESSEE WILL PAY SUM OF RS.18,50,000/ - TO ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 16 MR.GHUSABHAI THUMMAR AND THEN AGAIN RS.18, 00,000/ - TO SMT.SAVITABEN WITHOUT RECEIVING ANYTHING AS CONSIDERATION . 19.2 W E FURTHER OBSERVE THAT CO - ORDINATE BENCH IN CA S E OF M/S.SURYA DEVLOPERS (SUPRA) HAS HELD THAT THE ASSESSING OFFICERS ACTION IN ADOPTING THE PICK AND CHOOSE METHOD FOR THE PURPOSE OF ADDING OUT 7 OUT OF 13 CASH INFLOW INSTANCES IN ASSESSMENT YEAR 2009 - 10 AND 2011 - 12 IS NOT LIABLE TO BE SUSTAINED . SIMILAR SITUATION HAS ARISE S IN THE CASE BEFORE US WHERE LD .AO HAS PICKED UP SOME DOCUMENTS WHICH WERE BENEFICIAL TO THE ASSESSEE. 19.3 WE THEREFORE RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE C O - ORDINATE BENCH AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE , ARE OF THE CONSIDERED OPINION THAT ASSESSEE HAS ACTUALLY GIVEN ADVANCE OF RS.2,00,000/ - AND RS.16,50,000/ - IN THE YEAR 1995 AND 1998 AND THERE WAS NO ACTUAL PAYMENT OF RS.3,00,000/ - AND RS.15,00,000/ - ON 31/03/2003 AN D 17/04/2003. FURTHER IMPUGNED AGREEM ENT EVIDENCING THE PAYMENT OF RS.18,00,000/ - WAS MADE BY THE ASSESSEE JUST TO SAFEGUARD THE ADVANCE PAID TO THE OWNER OF LAND LATE GHUSABHAI THUMMAR. 20 . IN THE RESULT WE SET ASIDE ORDER OF LD.CIT(A) AND DELETE THE IMPUGNED ADDITION OF RS.3,00,000/ - AND RS.15,00,000/ - FOR A.YS 2003 - 04 AND 2004 - 05 RESPECTIVELY. IN THE RESULT APPEAL OF THE ASSESSEE FOR A.YS 2003 - 04 AND 2004 - 05 VIDE ITSS NOS.04/RJT/2011 AND 05/RJT/2011 ARE ALLOWED. 21. NOW WE TAKE UP APPEAL NOS.ITSS NO.30/RJT/2013 AND 31/RJT/2013. 21 .2 GROUNDS OF APPEAL RAISED BY ASSESSEE VIDE ITSS NO.30/RJT/2013 . ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 17 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - IV, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT AT RS.98,192/ - THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW, MAY KINDLY BE DELETED. 3.0 YOURS HONORS APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, OR WITHDRAW ANY OR MOR E GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 21.2 GROUNDS OF APPEAL RAISED BY ASSESSEE VIDE ITSS NO.31/RJT/2013 . 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS) - IV, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT AT RS.5,08,765/ - THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW, MAY KINDLY BE DELETED. 3.0 YOURS HONORS APP ELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 22 . AS REGARD S TO ITSS NOS . 30 /RJT/2013 AND 31/RJT/ 2013 FOR A.YS 2003 - 04 AND 2004 - 05 FILED BY THE ASSESSEE AGAINST THE PENALTY U/S.271(1)(C) OF THE ACT ON THE ADDITION OF RS.3,00,000/ - AND RS.15,00,000/ - FOR A.YS 2003 - 04 AND 2004 - 05 IS CONCERNED THE SAME DESERVE S TO BE DELETED AS WE HAVE ALREADY ALLOWED QUANTUM APPEAL OF THE ASSESSEE FOR A .YS 2003 - 04 AND 2004 - 05 IN THE PRECEDING PARAGRAPH . A S THE B ASIS FOR IMPOSING THE PENALTY I.E THE ADDITION HAS ITSELF BEEN DELETED , THERE IS NO REASON TO VISIT ASSESSEE WITH PENALTY U/S.271(1)(C) OF THE ACT. ITSS NO.03 - 04/RJT/2011 AND 30 - 31/RJT/2013 ASSTT. YEAR S:2003 - 04 AND 2004 - 05 18 23 . IN THE RESULT WE DELETE THE PENALTY OF RS.98 , 192 / - AND RS.5 , 08 , 763 / - FOR A.YS 2003 - 04 AND 2004 - 05 IMPOSED U/S.271(1)(C) OF THE ACT ON THE ASSESSEE. IN THE RE SULT BOTH THE APPEALS NO. 30 - 31 /RJT/2013 ARE ALLOWED. 24 . IN THE RESULT ALL THE FOUR APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND MAY , 2017 AT AHMEDABAD. SD/ - SD/ - ( MAHAVIR PRASAD ) JUDICIAL MEMBER (MANISH BORAD ) ACCOUNTANT MEMBER TRUE COPY A HMEDABAD; DATED 22 / 05 /2017 MANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE .