Fairdeal Textile Park Pvt.Ltd., Surat V. The Dy.CIT.,Cent.Circle-1, Surat

ITSSA 544/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9069 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KALYAN
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained investment
• Section: 153A; 131; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD ( BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHAN ALANKAMONY, AM) IT (SS) A NO.544 AND 545/AHD/2012 A. Y.: 2008-09 AND 2009-10 FAIRDEAL TEXTILE PARK PVT. LTD., 3 RD FLOOR, DAWER CHAMBER, B/H. SUB JAIL, RING ROAD, SURAT 395 002 P. A. NO. 9452 E VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) IT (SS) A NO.546/AHD/2012 A.Y.: 2006-07 SHRI DHIRAJLAL R. SHAH, 91, KHATODARA GIDC, B/H. SUB JAIL, RING ROAD, SURAT 395002 P. A. N.ACIPS 3898 J VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) IT (SS) A NO.547/AHD/2012 A.Y.: 2007-08 SHRI MAHENDRA R. SHAH, 91, KHATODARA GIDC, B/H. SUB JAIL, RING ROAD, SURAT 395002 P. A. N. AFHPS 5284 E VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) IT (SS) A NO.548/AHD/2012 A.Y.: 2007-08 SHRI ARVIND R. SHAH, 91, KHATODARA GIDC, B/H. SUB JAIL, RING ROAD, SURAT 395002 P. A. N. AFHPS 5480 E VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 2 IT (SS) A NO.549/AHD/2012 A.Y.: 2006-07 SHRI PRAVINCHANDRA R. SHAH, 91, KHATODARA GIDC, B/H. SUB JAIL, RING ROAD, SURAT 395002 P. A. N. AATPC 2604 B VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) IT (SS) A NO.550/AHD/2012 A.Y.: 2006-07 SHRI JAYANTILAL R. SHAH, 91, KHATODARA GIDC, B/H. SUB JAIL, RING ROAD, SURAT 395002 P. A. N. AFHPS 5255 D VS THE D. C. I. T., CENT. CIR-1, AAYAKAR BHAVAN, NEAR MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RASESH SHAH, AR RESPONDENT BY SHRI D. S. KALYAN, SR. DR DATE OF HEARING: 19-02-2013 DATE OF PRONOUNCEMENT: 03 -05-2013 O R D E R PER A. MOHAN ALANKAMONY: ALL THESE APPEALS ARE PREFERRED BY SIX ASSESSEES OF THE SAME GROUP AGGRIE VED BY THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-II, AHMEDABA D PASSED U/S 250 READ WITH SECTION 143 (3) AND 153A OF THE INCOME TA X ACT AS SHOWN HEREIN UNDER:- (I) CIT(A)-II/CC.1/175 & 176/2011-12 DATED 15-10-20 12 FOR THE ASSESSMENT YEAR 2008-09 & 2009-10 BY FAIRDEAL TEXTILE PARK PVT. LTD. [IT(SS)A NO. 5 44 & 545/AHD/12] IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 3 (II) CIT(A)-II/CC.1/172/2011-12 DATED 26-09-2012 FO R THE ASSESSMENT YEAR 2006-07 BY SHRI DHIRAJLAL R. SHAH [IT(SS)A NO.546/AHD/12] (III) CIT(A)-II/CC.1/171/2011-12 DATED 26-09-2012 F OR THE ASSESSMENT YEAR 2007-08 BY SHRI MAHENDRA R. SHAH [IT(SS)A NO.547/AHD/12] (IV) CIT(A)-II/CC.1/173/2011-12 DATED 26-09-2012 FO R THE ASSESSMENT YEAR 2007-08 BY SHRI ARVINDVHAI R. SHAH [IT(SS)A NO.548/AHD/12] (V) CIT(A)-II/CC.1/170/2011-12 DATED 26-09-2012 FOR THE ASSESSMENT YEAR 2006-07 BY SHRI PRVINCHANDRA R. SHA H [IT(SS)A NO.549/AHD/12] (VI) CIT(A)-II/CC.1/174/2011-12 DATED 26-09-2012 FO R THE ASSESSMENT YEAR 2006-07 BY SHRI JAYANTILAL R. SHAH [IT(SS)A NO.550/AHD/12] 2. IN ALL THESE CASES, SINCE THE FACTS ARE SIMILAR, IDENTICAL AND INTERCONNECTED, THEY ARE HEARD TOGETHER AND DISPOSE D OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. IN ALL THE APPEALS THE ASSESSEES HAVE RAISED THR EE COMMON GROUNDS WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN N ATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE LONE COMMON GROUN D NO.1 (EXCEPT THE FIGURES) RAISED BY THE ASSESSEES IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITIONS OF (A) RS.42,40,640/- [IN ITA(SS) A NO.544/A/12 FOR AY 2008-09], (B) RS.5,63,470/- [IN IT(SS)A NO.545/AHD/ FOR AY 20 09-10], (C) RS.38,52,703/- [IN IT(SS)A NO.546/AHD/12 FOR A Y 2006-07], IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 4 (D) RS.18,53,727/- [ IN IT(SS)A NO.547/AHD/12 FOR A Y 2007-08], (E) RS.18,53,727/- [IN IT(SS) A NO.548/AHD/12 FOR A Y 2007-08, (F) RS.31,76,867/- [IN IT(SS) A NO.549/AHD/12 FOR A Y 2006-07] AND (G) RS.54,31,681/- [ IN IT(SS) A NO.550/AHD/12 FOR AY 2006-07] U/S 69B OF THE ACT AS UNDISCLOSED INVESTMENT. [THE FIGURE OF ADDITION IN IT(SS) A NO.545AHD/2012 IN THE CASE OF FAIRDEAL TEXTILE PARK PVT. LTD. FOR THE ASSESSME NT YEAR 2009-10 HAS BEEN WRONGLY MENTIONED AS RS.36,55,970/-. HOWEV ER, AS PER THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) CORREC T FIGURE OF ADDITION IS RS.5,36,470/- ACCORDINGLY, THE GROUND I S MODIFIED.] 4. BRIEF FACTS: - A SEARCH WAS CARRIED OUT U/S 132 OF THE INCOME TAX ACT IN THE BUSINESS PREMISES AS WELL AS RESIDEN TIAL PREMISES OF SHAHLON GROUP ON 28-01-2010 WHEREIN TWO AGREEMENTS DATED 13-12- 2005 JOINTLY EXECUTED BY SHRI DHIRAJLAL RAICHAND SH AH [MAIN PERSON OF SHAHLON GROUP] AND SHRI NITIN RAICHAND SHAH WITH NATVARSINGH NATHUSINGH ADYAR SIC. ADMAR WERE SEIZED. IT WAS REV EALED FROM THE AGREEMENT THAT DHIRAJLAL RAICHAND SHAH AND NITIN RA ICHAND SHAH HAD GIVEN CASH OF RS.40,00,000/- AND RS.50,00,000/- AGGREGATING TO RS.90,00,000/- TO NATVARSINGH NATHUSINGH ADMAR FOR PURCHASE OF LARGE EXTENT OF LAND AT MAHUVEJ, MANGROL, SURAT IN BLOCK NO.692/2, 699, 700, 701, 702, 703, 706,711,712 AND 713 RESPEC TIVELY. IT WAS FURTHER REVEALED FROM THESE AGREEMENTS THAT THE PUR CHASE PRICE OF THE LAND SHALL BE @ RS.2,80,000/- PER BIGHA I.E. 2,327 SQ. MTRS. THIS ENTIRE BLOCK OF LAND FELL WITHIN THE LAND BLOCK WHE REIN OF THE GROUP CONCERN NAMELY FAIRDEAL TEXTILE PARK PVT. LTD. WAS DEVELOPING A TEXTILE PARK UNDER SITP SCHEME OF GOVERNMENT OF IND IA NAMED FAIRDEAL TEXTILE PARK. IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 5 5. ON EXAMINING MR. NATVARSINGH NATHUSINGH ADMAR, H E ADMITTED THAT BOTH THE AGREEMENTS WERE EXECUTED BY HIM WITH THE ABOVE NAMED PARTIES. HE FURTHER ADMITTED THAT THOUGH HE D ID NOT OWN OR POSSESS THE LAND HE HAD AGREED TO PURCHASE THE LAND FROM VARIOUS PARTIES AND TRANSFER THE SAME TO THE ASSESSEES GRO UP COMPANY @ RS.2,80,000/-PER BIGHA. 6. HOWEVER, THE ASSESSEES GROUP COMPANIES, HAVING REALIZED THAT MR. NATVARSINGH NATHUSINGH ADMAR DID NOT OWN T HE LAND, DID NOT PURCHASE LAND FROM NATVARSINGH NATHUSINGH ADMAR. MR . NATVARSINGH NATHUSINGH ADMAR SUBSEQUENTLY RETURNED THE CASH TO THE ASSESSEES GROUP. THE ASSESSEES GROUP COMPANIES THEREAFTER PU RCHASED THE LAND DIRECTLY FROM THE LANDOWNERS AT RATES FAR LESS THAN RS.2,80,000/- PER BIGHA. 7. WITH RESPECT TO THE AGREEMENTS THE ASSESSEE HAD MADE THE FOLLOWING SUBMISSIONS BEFORE THE LEARNED AO:- (I) SINCE MR. NATVARSINGH NATHUSINGH ADMAR HAD FAIL ED TO EXECUTE THE AGREEMENTS BOTH THE AGREEMENTS WERE CANCELLED. (II) IT WAS REALIZED BY THE ASSESSEES GROUP THAT T HE LAND PRICE IN THE AREA WAS FAR LESS THAN WHAT WAS QUOTED BY MR . NATVARSINGH NATHUSINGH ADMAR. (III) IT WAS FURTHER REALIZED THAT THE ASSESSEE WAS NOT THE OWNER OF THE LAND WHO HAD UNSCRUPULOUSLY PLANNED TO EXTRACT MONEY FROM THE ASSESSEES GROUP BY INFLATIN G THE LAND PRICE. IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 6 (IV) MR. NATVARSINGH NATHUSINGH ADMAR HAD ADMITTED BEFORE THE LEARNED AO THAT HE HAD ENTERED INTO SUCH AGREEM ENT WITH THE ASSESSEES GROUP AND RECEIVED AN ADVANCE O F RS.90,00,000/- FOR TRANSFERRING THE LAND TO THEM AF TER PROCURING, LEVELING AND CONVERTING THE SAME INTO NO N- AGRICULTURE LAND. HE FURTHER ADMITTED THAT SINCE HE WAS NOT ABLE TO KEEP UP TO HIS COMMITMENT THE AGREEMENTS WE RE CANCELLED AND THE MONEY WAS RETURNED. (VI) IN THESE CIRCUMSTANCES, THE ASSESSEES GROUP H AD PURCHASES THE LAND DIRECTLY FROM THE LANDOWNERS AT THE MARKET RATE WHICH WAS EITHER ABOVE OR EQUAL TO JANT RY RATE. (VII) SINCE NO COMPARABLE SALE INSTANCE WAS BROUGHT ON RECORD BY THE LEARNED AO TO SUGGEST THAT THE VALUE OF THE LAND PURCHASED AND REGISTERED BY THE ASSESSEES GRO UP IS LESS THAN THE MARKET PRICE, NO ADVERSE INFERENCE CA N BE DRAWN. 8. HOWEVER, THE LEARNED AO AFTER EXAMINING THE EXPL ANATION FORWARDED BY THE ASSESSEE DENIED TO ACCEPT THE SAME DUE TO THE FOLLOWING REASONS:- (I) SINCE, THE ASSESSEE HAD EXECUTED AN AGREEMENT W ITH SHRI NATVARSINGH NATHUSINGH ADMAR WHICH ESTABLISHES THAT THE MARKET RATE PREVAILING IN THE AREA WAS RS.2,80,000/- PER BIGHA. (II) THOUGH THE AGREEMENTS EXECUTED BETWEEN THE ASSESSEES GROUP AND SHRI NATVARSINGH NATHUSINGH ADMAR WAS SAID TO BE CANCELLED, THE SAME LAND WAS PURCHASED DURING THE SAME PERIOD I. E. FINANCIAL YE AR 2005-06 MENTIONED IN THE AGREEMENTS WHICH EVIDENCES THAT THE ASSESSEE HAD PURCHASED THE LAND AT THE SAM E RATE PROVIDED IN THE AGREEMENT VIZ. RS.2,80,000/- P ER BIGHA AND THROUGH SHRI NATVARSINGH NATHUSINGH ADMAR . IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 7 (III) EVEN THOUGH, THE SELLERS OF THE LAND WERE DIF FERENT THE PURCHASER OF THE LAND WAS SAME, AND THEREFORE, THE RATE OF THE LAND CANNOT FALL BELOW THE AGREEMENTS ENTERE D WITH THE INTERMEDIARY. (IV) THE ASSESSEES CONTENTION THAT SHRI NATVARSING H NATHUSINGH ADMAR SCHEMED TO UNSCRUPULOUSLY EXTRACT MONEY FROM THE ASSESSEES GROUP BY INFLATING LAND PR ICE CANNOT BE BELIEVED BECAUSE THE ASSESSEES GROUP ARE COMPETENT IN THEIR BUSINESS FOR A PROLONGED PERIOD OF 30 YEARS. NO PRUDENT BUSINESS GROUP WILL EXTEND SUCH H UGE AMOUNT OF RS.90,00,000/- AS ADVANCE TO ANY PERSON WITHOUT VERIFYING THE LAND RECORDS AND ASSESSING IT S MARKET VALUE. IF SHRI NATVARSINGH NATHUSINGH ADMAR WAS A FRAUDULENT PERSON HE WOULD NOT HAVE RETURNED THE ADVANCE MONEY WITHOUT ENTERING INTO LITIGATION. (V) NO DOCUMENTARY EVIDENCES WERE FURNISHED BY THE ASSESSEES GROUP TO SHOW THAT THE AGREEMENTS ENTERED BY THEM WITH SHRI NATVARSINGH NATHUSINGH ADMAR WERE CANCELLED. (VI) THE STATEMENT OF SHRI NATVARSINGH NATHUSINGH A DMAR CLEARLY ESTABLISHES THAT THE ASSESSEES GROUP WAS AW ARE THAT HE DID NOT POSSESS THE LAND AND YET ADVANCED RS.90,00,000/-. (VIII) ON VERIFICATION OF THE FACTS IT WAS OBSERVED THAT SHRI NATVARSINGH NATHUSINGH ADMAR WAS NOT A WELL-OFF PER SON AND LIVING IN VILLAGE WHEREIN HE DID NOT HAVE ANY F ACILITY TO HOLD SUCH LARGE EXTENT OF CASH. IT APPEARS THAT HE HAD DISTRIBUTED THE CASH TO VARIOUS LANDOWNERS FOR PURC HASE OF LAND SINCE HE WAS ACTING AS A MIDDLEMAN. (IX) THERE WAS ENOUGH EVIDENCES FOR THE ASSESSEES G ROUP HAVING ADVANCED RS.90,00,000/- TO SHRI NATVARSINGH NATHUSINGH ADMAR BUT THERE WAS NO EVIDENCE FOR CANCELLING THE AGREEMENTS AND RETURN OF RS.90,00,00 0/-. IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 8 (X) THOUGH IN THE STATEMENT OF SHRI NATVARSINGH N ATHUSINGH ADMAR IN QUESTION NO.5 RECORDED, IT WAS STATED THAT HE WAS SUPPOSED TO PURCHASE THE LAND FROM THE LANDOWNE RS @ RS.70,000/- TO RS.80,000/- PER BIGHA AND SUBSEQUENTLY TRANSFER THE SAME TO THE ASSESSEES GRO UP AFTER LEVELING THE LAND AND CONVERTING THE SAME TO NON- AGRICULTURE LAND. HE HAD ADMITTED IN QUESTION NO.6 THAT HE WAS UNABLE TO PURCHASE THE LAND @ RS.70,000/- TO RS.80,000/- PER BIGHA AND THEREFORE HE CANCELLED TH E AGREEMENTS EXECUTED AND RETURNED THE ADVANCE RECEIV ED FOR RS.90,00,000/-. THESE FACTS CLEARLY PROVE THAT THE PREVAILING LAND PRICE WAS NOT RS.70,000/- TO RS.80, 000/- PER BIGHA BUT RS.2,80,000/- PER BIGHA AS STATED IN THE AGREEMENT. (XI) THE ASSESSEES GROUP WAS INTRODUCED TO SHRI NAT VARSINGH NATHUSINGH ADMAR BY COMMON FRIEND SHRI RAJESHBHAI, SINCE HE WAS A NATIVE OF THE PLACE WHERE THE TEXTIL E PARK WAS SUPPOSED TO BE PROMOTED KNOWING MANY PEOPLE AND HAVING MANY RELATIVES IN AND AROUND, COULD ACT AS A N INTERMEDIARY FOR PURCHASE OF LAND. THEREFORE THE ASSESSEES GROUP WAS WELL AWARE THAT THOUGH HE WAS N OT OWNER OF THE LAND BUT COULD FACILITATE TO PROCURE T HE LAND IN THE AREA AS HE WAS INFLUENTIAL IN THE LOCALITY AND, THEREFORE, THE RATE MENTIONED IN THE AGREEMENTS WAS THE CORRECT MARKET VALUE. (XII) IT IS A COMMON PRACTICE THAT SUBSTANTIAL ON-M ONEY IS PAID FOR PURCHASE OF LAND, PROPERTIES ETC. 9. WITH THESE OBSERVATIONS THE LEARNED AO DETERMINE D THE UNEXPLAINED INVESTMENT U/S 69 B OF THE ACT BEING TH E DIFFERENCE BETWEEN THE LAND RATE OF RS.2,80,000/- PER BIGHA I. E. RS.120.33 PER SQ. MTR. AND THE RATE DECLARED IN THE IN THE PURCHA SE DEEDS AND MADE ADDITIONS IN THE HANDS OF THE ASSESSEES GROUP INDI VIDUALLY WHO HAD PURCHASED THE LAND AND RETAINED OR TRANSFERRED TO T HE GROUP COMPANY. FURTHER, WHILE ARRIVING AT THE UNEXPLAINED INVESTME NT THE LEARNED AO IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 9 DID NOT GRANT TELESCOPING EFFECT FOR THE UNACCOUNTE D INCOME DISCLOSED BY THE ASSESSEES GROUP WHILE FILING RETURN OF INCOM E SINCE THE SAME WAS NOT DISCLOSED AGAINST THE PURCHASE OF THE ABOVE REFERRED LAND. THE DETAILS OF THE UNEXPLAINED INVESTMENT IN THE HA NDS OF THE INDIVIDUAL RESPECTIVE ASSESSEES GROUP ARE SUMMARIZE D HEREIN UNDER:- SR. NO. LAND DESCRIPTION NAME OF FIRST BUYER ASSESSMENT YEAR UNEXPLAINED INVESTMENT 1 SURVEY NO.698,699/3 BLOCK NO.692/2 DHIRAJLAL R. SHAH 2006-07 13,23,537 2 SURVEY NO.715, 725, BLOCK NO.712 DHIRAJLAL R. SHAH 2006-07 25,29,166 (A)TOTAL 38,52,703 3 SURVEY NO.707, BLOCK NO.699 JAYANTILAL R. SHAH 2006-07 29,76,899 4 SURVEY NO. 708/1, BLOCK NO.701 JAYANTILAL R. SHAH 2006-07 24,54,782 (B)TOTAL 54,31,681 5 SURVEY NO.708/2 BLOCK NO.701 DR. PRAVIN R. SHAH 2006-07 16,44,400 6 SURVEY NO.714, BLOCK NO.711 DR. PRAVIN R. SHAH 2006-07 15,32,467 (C)TOTAL 31,76,867 7 SURVEY NO.708/3 BLOCK NO.702 FAIRDEAL TEXTILE PARK PVT. LTD. 2008-09 11,26,902 8 SURVEY NO.708/4, BLOCK NO.703 FAIRDEAL TEXTILE PARK PVT. LTD. 9,03,257 9 SURVEY NO.699/2, BLOCK NO.706 FAIRDEAL TEXTILE PARK PVT. LTD. 10,23,542 10 SURVEY NO.718, BLOCK NO.713 FAIRDEAL TEXTILE PARK PVT. LTD. 11,86,935 (D)TOTAL (R/O) 42,40,636 42,40,640 11 SURVEY NO.725, BLOCK N0.715 FAIRDEAL TEXTILE PARK PVT. LTD. 2009-10 5,63,470 (E)TOTAL 5,63,470 12 SURVEY NO.692/A, 708/5, BLOCK NO.705 MAHENDRA R. SHAH AND ARVIND R. SHAH (50%) EACH (RS.18,53,727 X 2) 2007-08 SIC. 37,07,453 37,07,454 (F) TOTAL 37,07,454 GRAND TOTAL SIC. 2,09,72,810 2,09,72,815 IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 10 10. WHEN THE MATTER WAS TAKEN UP BEFORE THE LEARNED CIT(A), ALL THESE ADDITIONS WERE SUSTAINED BY THE LEARNED CIT(A ) CITING THE FOLLOWING REASONS:- (I) THE APPELLANT HAD PURCHASED THE SAME LAND AS MENTIONED IN BOTH THE AGREEMENTS WITHIN THE TIME LI MIT PRESCRIBED IN THE AGREEMENTS. (II) THERE WAS NO EVIDENCE WITH RESPECT TO CANCELLA TION OF THE AGREEMENTS. (III) NO PRUDENT BUSINESSMAN DEALING IN LAND WOULD ADVANCE A SUBSTANTIAL AMOUNT OF RS.90 LACS IN CASH TO A PERSO N WHO IS NOT THE OWNER OF THE LAND. THIS ESTABLISHES THE FACT THAT THE ASSESSEE HAD ACCEPTED MR. NATVARSINGH AS THE MIDDLEMAN THROUGH WHOM THE LAND WOULD HAVE BEEN PURCHASED AT THE RATE STIPULATED IN THE AGREEMENTS. (IV) NOWHERE IN THE AGREEMENTS IT WAS STATED THAT T HE LAND WOULD BE PURCHASED AFTER CONVERTING THE SAME INTO N ON- AGRICULTURE LAND AND AFTER LEVELING THE SAME. 11. THE LEARNED AR STOUTLY ARGUED BEFORE US THAT TH E ADDITIONS WERE MADE MERELY ON THE BASIS OF THE AGREEMENTS FOU ND AT THE TIME OF SEARCH, HOWEVER, THERE WAS NO OTHER MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE HAD PURCHASED THE LAND AT RS.2,80,000/- PER BIGHA. HE FURTHER SUBMITTED THAT THE AGREEMENTS WERE NEVER ACTED UPON AND SINCE MR. NATVARSINGH COULD NOT PROC URE THE LAND FOR THE ASSESSEE, THE ADVANCE CASH MADE FOR RS.90 LACS WAS RETURNED. THE LEARNED AR FURTHER PRAYED BEFORE US STATING THA T THE REVENUE HAS MADE UNNECESSARY ADDITIONS BASED ON THE PRESUMPTION THAT THE ASSESSEE WOULD HAVE PURCHASED LAND AT THE RATE OF RS.2,80,000/- PER BIGHA AND NOT AS PER THE RATE SHOWN IN THE REGISTE RED DOCUMENTS IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 11 AND, THEREFORE, THE ADDITIONS MADE BY THE LEARNED A O MAY BE DELETED. 12. THE LEARNED DR SUPPORTED THE ORDERS OF THE REVE NUE AND SUBMITTED THAT THEIR ORDERS MAY BE UPHELD. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. IT APPEARS THAT THE REVENUE HA S MADE THE ADDITIONS ONLY BASED ON THE TWO AGREEMENTS FOUND AT THE TIME OF SEARCH. THERE ARE NO OTHER EVIDENCES COMING FORTH T O ESTABLISH THAT THE ASSESSEE WOULD HAVE PAID OVER AND ABOVE THE AMO UNT MENTIONED IN THE REGISTERED DOCUMENTS. THE FOLLOWING FACTS AR E REQUIRED TO BE TAKEN NOTE OF:- (I) THERE WAS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD PURCHASED THE LAND THROUGH THE MIDDLEMAN. THOUGH, THERE WERE TWO AGREEMENTS, THERE WAS NOTHING TO SUBSTANTIATE THAT THEY WERE ACTED UPON. (II) MR. NATVARSINGH ADMAR WHO IS SUPPOSED TO BE TH E MIDDLEMAN HAD CONFIRMED BEFORE THE REVENUE AUTHORIT IES IN HIS STATEMENT U/S 131 DATED 24-11-2011 THAT THE AGREEMENTS EXECUTED WERE NOT ACTED UPON AND THEY WE RE CANCELLED. (III) THE REGISTERED DOCUMENTS SUGGEST ONLY THE FAC TS THAT THE LAND WAS PURCHASED BY ALL THE ASSESSEES DIRECTLY FR OM THE FARMERS AT THE RATES SPECIFIED THEREIN. (IV) THERE WAS NO EVIDENCE WHATSOEVER TO SUGGEST TH AT THERE WAS PAYMENT OF ON-MONEY. IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 12 (V) THERE WAS NO MATERIAL ON RECORD TO SUGGEST THAT THE MARKET VALUE OF THE LAND PURCHASED BY THE ASSESSEES WAS OVER AND ABOVE SHOWN IN THE REGISTERED DOCUMENTS. I N FACT, ALL THE DOCUMENTS WERE EXECUTED AT THE JANTRY VALUE. (VI) THE LEARNED AO HAD ALSO NOT REFERRED THE MATTE R TO THE VALUATION OFFICER TO ESTABLISH THAT THE VALUE OF TH E LAND PURCHASED BY THE ASSESSEES WAS BELOW THE MARKET VAL UE. (VII) THE LEARNED AO HAD NOT MADE ANY ENQUIRIES WIT H THE OWNERS OF THE LAND WHO SOLD THE LAND TO THE ASSESSE ES IN ORDER TO ESTABLISH THAT THE ASSESSEE HAD PAID AMOUN T OVER AND ABOVE THE VALUE SHOWN IN THE REGISTERED DOCUMENTS. 14. FROM THE ABOVE FACTS, IT IS APPARENT THAT THE R EVENUE HAD MADE ADDITION ONLY ON THE BASIS OF SURMISES AND CONJUNCT IONS THAT THE ASSESSEE WOULD HAVE PAID RS.2,80,000/- PER BIGHA. THE ONUS THRUSTS UPON THE REVENUE TO PROVE ITS STAND IS NOT MET. AS POINTED OUT BY THE ASSESSEE, THE DECISION RENDERED IN K. P. VARGHESE V S ITO 131 ITR 597 (SC) COMES TO ITS RESCUE. THERE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE HAD PAID ON-MONEY FOR PURCHASE OF THE LAND . THE ENTIRE ADDITION WAS MADE ONLY BASED ON THE INFERENCE DRAWN FROM THE TWO AGREEMENTS FOUND DURING THE SEARCH WHICH WERE CLAIM ED TO BE CANCELLED BY THE EXECUTORS OF THE SAME. THERE WAS N OTHING ON RECORD TO SHOW THAT THE AGREEMENTS WERE ACTED UPON AS PER THE TERMS STIPULATED THEREIN. THERE WAS NO TRACE OF CASH PAYM ENT IN EXCESS OF THE AMOUNT SHOWN IN THE REGISTERED DOCUMENTS EITHER WITH THE ASSESSEE OR WITH THE OWNERS OF THE LAND WHO HAD SOL D THE LAND TO THE ASSESSEES. FURTHER, THE LANDOWNERS WERE NOT EXAMINE D OR INVESTIGATION MADE ON THEM TO VERIFY WHETHER THEY H AD RECEIVED ON- MONEY FOR THE SALE OF THEIR LAND TO THE ASSESSEE. M OREOVER, THE IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 13 LEARNED AO HAD NOT CONDUCTED ANY ENQUIRY TO FIND OU T THE MARKET VALUE OF THE LAND OR HAD REFERRED THE MATTER TO THE DVO TO DETERMINE THE MARKET VALUE OF THE LAND. ON EXAMINING THE ENTI RE FACTS OF THE CASE, IT IS QUITE APPARENT THAT THE REVENUE HAD MAD E THE ADDITIONS ONLY ON THE STRENGTH OF THE TWO AGREEMENTS OBTAINED AT THE TIME OF SEARCH. IT IS PERTINENT TO NOTE THE DECISION OF THE CASE CIT VS NARESH KHATTAR HUF REPORTED IN 261 ITR 664 (DEL.) WHEREIN IT WAS HELD THAT INFERENCE HAS TO BE DRAWN ON THE TOTALITY OF THE CI RCUMSTANCE AND NOT ON ANY SINGLE FACT WHILE MAKING ADDITION U/S 69B OF THE ACT. FROM THE FACTS AND CIRCUMSTANCES OF THIS CASE AND AS PER OUR ABOVE DISCUSSIONS, WE ARE OF THE VIEW THAT THE AGGREGATE ADDITION MADE FOR RS.2,09,72,810/- IN THE HANDS OF ALL THE ABOVE MENT IONED ASSESSEES BASED ON ASSUMPTIONS AND PRESUMPTIONS BY THE LEARNE D AO WHICH WAS FURTHER SUSTAINED BY THE LEARNED CIT(A) DOES NO T HAVE ANY MERIT AND DESERVE TO BE DELETED. ACCORDINGLY, WE HEREBY D ELETE THE ADDITIONS MADE BY THE REVENUE AGAINST ALL THE ABOVE MENTIONED ASSESSEES AGGREGATING TO RS.2,09,72,810/-. 15. IN THE RESULT, APPEALS FILED BY ALL THE ASSESSE ES MENTIONED HEREINABOVE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-05-2013 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/ IT (SS) A NO.544 TO 550/AHD/2012 FAIRDEAL TEXTILE PARK PVT. LTD. AND 5 OTHERS 14 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT ON COMPUTER 04-04-13/1 2-04-13/18-04-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 12-04-2013/18-04-13 OTHER MEMBER : 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: