Shri Krupeshbhai Patel, Baroda V. The Dy.CIT.,Cent.Circle-1(\u005cu005c, Baroda

ITSSA 590/AHD/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8062 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Loose papers; Avoidance of tax; Deemed dividend
• Section: 143(3); 56(2); 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER APPEAL(S) / CO(S) BY SL. NO(S). IT(SS)A NO(S) / CO NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 590/AHD/2011 2006-07 SHRI KRUPESHBHAI N. PATEL 15, PARISHRAM SOCIETY SUBHANPURA VADODARA 390 001 PAN: ADHPP6422B DY.CIT CENTRAL CIRCLE-1 VADODARA 2. 591/AHD/2011 2007-08 -DO- ASSESSEE -DO-REVENUE 3. 592/AHD/2011 2008-09 -DO- -DO- 4. 593/AHD/2011 2009-10 -DO- -DO- 5. 594/AHD/2011 2007-08 ACIT, CEN.CIR.1 BARODA SH.KRUPESH NARHARI PATEL, BARODA 6. 595/AHD/2011 2008-09 -DO-REVENUE -DO-ASSESSEE 7. CO NO.12/AHD/2012 [IN IT(SS)A NO.594/A/11] 2007-08 SH.KRUPESH NARHARI PATEL, BARODA ACIT, CEN.CIR.1 BARODA 8. CO NO.13/AHD/2012 [IN IT(SS)A NO.595/A/11) 2008-09 -DO-ASSESSEE -DO-REVENUE AND APPEAL(S) / CO(S) BY SL. NO(S). IT(SS)A NO(S) / CO NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 651/AHD/2011 2006-07 SHRI NAVINBHAI N. PATEL 22-23, ROKADNATH SOCIETY RACE COURSE VADODARA 390 001 PAN: ACXPP 6848 G DY.CIT CENTRAL CIRCLE-1 VADODARA 2. 616/AHD/2011 2007-08 -DO- ASSESSEE -DO-REVENUE 3. 626/AHD/2011 2007-08 REVENUE ASSESSEE 4. 627/AHD/2011 2008-09 -DO- -DO- 5. 637/AHD/2011 2008-09 ASSESSEE REVENUE 6. 638/AHD/2011 2009-10 ASSESSEE REVENUE 7. CO NO.20/AHD/2012 [IN IT(SS)A NO.626/A/11] 2007-08 SH.NAVIN N.PATEL PATEL, BARODA DY.CIT, CEN.CIR.1 BARODA 8. CO NO.21/AHD/2012 [IN IT(SS)A NO.627/A/11) 2008-09 -DO-ASSESSEE -DO-REVENUE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 2 - ASSESSEE(S) BY: SHRI MILIN MEHTA, A.R. REVENUE BY : SHRI KARTAR SINGH CIT-D.R. %& ' # / / / / DATE OF HEARING : 23/05/2012 )*+ ' # / DATE OF PRONOUNCEMENT : 29/06/2012 ',/ O R D E R PER BENCH : [A] APPEALS OF SHRI KRUPESHBHAI N. PATEL (A) A.Y.2006-07 IT(SS)A NO. 590/AHD/2011 (ASSESSEES APPEAL) THIS IS AN APPEAL FILED BY THE ASSESSEE ARISIN G FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 30.08.2011. 2. GROUNDS RAISED ARE HEREBY DECIDED AS FOLLOWS. 3. GROUND NO.1 :- 1. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN NOT RESTRICTING THE ASSESSMENT /ADDITION BASED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH. 3.1. LD.AR, AT THE OUTSET, HAS INFORMED THAT THI S IS A TECHNICAL GROUND IN RESPECT OF CERTAIN ADDITIONS WHICH WERE ALLEGED TO BE NOT BASED UPON INCRIMINATING MATERIAL, THEREFORE THE ASSESSMENT U/ S.153A OF THE ACT WAS BAD IN LAW. WHEN THE BENCH HAS CONFRONTED THAT THIS TECHNICAL ISSUE IS SUBJUDICE BEFORE THE SPECIAL BENCH, THEN LD.AR IN T HE ALTERNATIVE HAS SUGGESTED NOT TO ADJUDICATE THIS GROUND RATHER TO P ROCEED ON THE MERITS OF THE CASE. IN VIEW OF THE CONCESSION EXPRESSED BY L D.AR MR.MILIN MEHTA FOR NOT PRESSING THIS GROUND; AS ALSO LD.DR MR.KAR TAR SINGH HAS NO IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 3 - OBJECTION IF DECIDE THE QUANTUM ADDITIONS, RESULTA NTLY WE HEREBY DISMISS THIS GROUND BEING NOT PRESSED AND PROCEED HEREINBEL OW. 4. GROUND NO.2 :- 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING SHORT TERM CAPITAL LOSS OF RS.22,38,207 (RS.21,84,395 IN THE CASE OF SHRI NAV INBHAI N.PATEL) INVOKING PROVISIONS OF SECTION 94(7) OF TH E ACT . 4.1. FACTS IN BRIEF AS EMERGED FORM THE CORRESPO NDING ASSESSMENT ORDER PASSED U/S.153A R.W.S. 143(3) DATED 23/12/2010 FOR A.Y. 2006-07 WERE THAT A SEARCH U/S.132 WAS CARRIED OUT ON A GROUP NA MED AS AMOD GROUP OF CASES ON 11/02/2009. CONSEQUENT THEREUPON A PROCEEDING U/S.153A WAS INITIATED. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD SOLD MUTUAL FUND UNI TS. THE ASSESSEE HAS CLAIMED SHORT-TERM CAPITAL LOSS ON SALE OF MUTUAL FUNDS. THE AO HAD PROCEEDED TO EXAMINE THE CORRECTNESS OF THE CLAIM I N THE LIGHT OF THE PROVISIONS OF SECTION 94(7) OF IT ACT . THE AO HAS PLACED ON RECORD THE DETAILS OF THE DATE-WISE PURCHASE AND SALE OF THOSE UNITS AS UNDER:- SR. NO. ASST. YEAR NAME OF FUND DATE OF PURCHASE/VALUE DATE OF SALES/ VALUE STCL CLAIMED (RS.) DIVIDEND RECEIVED RS. RECORD DATE 1. 2006- 07 ICICI PRUDENTIAL DYNAMIC PLAN 18/8/2005 1,63,900 13/12/2005 1,57,169 6416 20445 22/9/2005 2. 2006- 07 FRANKLIN INDIA OPP FUND 14/9/2005 3,50,000 13/12/2005 3,02,604 47396 53615 21/9/2005 3. 2006- 07 BIRLA SUN LIFE FREEDOM FUND 20/10/2005 1,35,00,000 6/2/2006 1,13,15,605 2184395 3731343 20/1/2006 IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 4 - 4.2. THE OBSERVATION OF THE AO WAS THAT ACCORDING T O SECTION 94(7) WHERE ANY PERSON BUYS ANY UNITS WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE AND SUCH PERSON SELLS SUCH UNIT WITHIN A PERIOD OF NINE MONTHS AFTER SUCH RECORD DATE, THEN LOSS IF ANY ARISING ON ACCOUNT OF SUCH PURCHASE AND SALE OF UNIT TO THE EX TENT OF DIVIDEND RECEIVED WOULD BE IGNORED FOR THE PURPOSE OF COMPUTING THE INCOME CHARGEABLE TO TAX. AS FAR AS THE TRANSACTIONS ME NTIONED AT SL.NOS.1 & 2 ARE CONCERNED, AS PER AO THERE WAS NO DISPUTE THAT THOSE UNITS HAVE BEEN BOUGHT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE AND SOLD WITHIN A PERIOD OF NINE MONTHS AFTER SUCH RECORD DA TE, THEREFORE THE LOSS TO THE EXTENT OF DIVIDEND RECEIVED WAS ADMITTEDLY I GNORED. THE DISPUTE WAS ONLY IN RESPECT OF THE TRANSACTION REFERRED AT SL.NO.3 ABOVE. IT WAS CONTENDED THAT THE PERIOD AS PRESCRIBED U/S.94(7) D ID NOT FALL WITHIN THAT RESTRICTION. AS PER ASSESSEE, THE RECORD DATE WAS 20/01/2006, THEREFORE THE DATE PRIOR TO THE RECORD DATE WAS 19/01/2006, H OWEVER THE PURCHASES HAVE BEEN MADE ON 20/10/2005. THREE MONTHS PRIOR T O THE RECORD DATE ACCORDING TO ASSESSEE WAS TO BE COMPUTED FROM 20/10 /2005 UPTO 19/01/2006. THE AO HAS HELD THAT THREE MONTHS PRI OR TO THE RECORD DATE STARTS FROM 20/10/2005 AND THE RECORD DATE WAS 20/0 1/2006, THEREFORE THE PURCHASES HAVE BEEN MADE WITHIN THREE MONTHS PRIOR TO THE RECORD DATE. THE AO HAS THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SHORT- TERM CAPITAL LOSS SHOULD NOT BE DISALLOWED. THE CO NTENTION OF THE ASSESSEE ABOUT THE COMPUTATION OF THE PERIOD WAS NO T ACCEPTABLE TO THE AO, SO HE HAS REJECTED THE CLAIM. WITH THE RESULT THE LOSS TO THAT EXTENT WAS DISALLOWED, RESULTANTLY SHORT-TERM CAPITAL GAIN WAS ENHANCED. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 5 - 5. THE BASIC CONTENTION BEFORE LD.CIT(A) WAS THA T THE LANGUAGE USED IN SECTION 94(7) OF THE ACT PRESCRIBES PRIOR TO THE RECORD DATE . ACCORDING TO THE ARGUMENT OF THE ASSESSEE THE WORD USED TO SIGNIFIES THAT THE RECORD DATE, I.E. 20/01/2006 IS TO BE COMP UTED IN THE FOLLOWING MANNER:- FROM TO MONTH 21-12-2005 20-1-2006 1 21-11-2005 20-12-2005 2 21-10-2005 20-11-2005 3 5.1. THE ASSESSEE HAS REFERRED SECTION 9(1) OF GENE RAL CLAUSES ACT 1897. HOWEVER, LD.CIT(A) HAS TAKEN A VIEW THAT IT IS IMPORTANT TO NOTE THAT THE LANGUAGE OF THE SECTION IS PRIOR TO AND NOT ONLY TO THEREFORE, THE WORD PRIOR SHOULD NOT BE IGNORED. THE LD.CIT (A) HAS ALSO GIVEN A SECOND REASON FOR AFFIRMING THE ACTION OF THE AO TH AT THE UNITS OF BIRLA SUNLIFE HAVE ALSO BEEN SOLD UNDISPUTEDLY WITHIN A P ERIOD OF NINE MONTHS OF THE RECORD DATE. ACCORDING TO HIM, ALL THE CO NDITIONS AS PRESCRIBED UNDER SECTION 94(7) ARE TO BE CUMULATIVELY SATISFIE D, THEREFORE THE DISALLOWANCE WAS HELD AS JUSTIFIED. 6. WE HAVE HEARD BOTH THE SIDES AND ALSO CAREFULLY PERUSED THE RELEVANT PROVISIONS. LD.AR HAS REITERATED THE PROV ISIONS OF GENERAL CLAUSES ACT, 1987 SECTION 9(1) OF THAT ACT AND ARGU ED THAT THE RECORD DATE IS REQUIRED TO BE INCLUDED. ACCORDING TO HI M, THIS SECTION WOULD APPLY IF ONLY THE UNITS COULD HAVE BEEN PURCHASED O N 21/10/2005 OR IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 6 - THEREAFTER. SINCE THE UNITS WERE PURCHASED ON 20/1 0/2005, THEREFORE THE SAID PROVISIONS SHOULD NOT APPLY TO THE SAID TRANSA CTION. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE LD.DR MR.KARTAR SINGH HAS CONTENDED THAT THE ASSESSEES SUBMISSION COVERED ONLY ONE PAR T OF THIS SECTION BUT DID NOT REFER THE OTHER PART OF THIS SECTION WHICH SAYS THAT IF SUCH PERSON SELLS SUCH UNIT WITHIN A PERIOD OF NINE MONTHS, THE N ALSO THE LOSS IS TO BE IGNORED. IN THIS REGARD, WE HAVE EXAMINED A DECISIO N OF SHAMBHU MERCANTILE LTD. 116 TTJ 784(DELHI) , WHEREIN THE RESPECTED CO- ORDINATE BENCH HAS TAKEN A VIEW THAT ALL THE THREE CONDITIONS AS PRESCRIBED UNDER CLAUSES (A), (B) & (C) OF SECTION 94(7) REQUIRED TO BE CUMULATIVELY SATISFIED. FOR READY REFERENCE, WE HEREBY REPRODUCE THE APPLICABLE PROVISIONS AS FOLLOWS:- SECTION 94 : AVOIDANCE OF TAX BY CERTAIN TRANSACTI ONS IN SECURITIES (7) WHERE (A) ANY PERSON BUYS OR ACQUIRES ANY SECURITIES OR UNIT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE; (B) SUCH PERSON SELLS OR TRANSFERS (I) SUCH SECURITIES WITHIN A PERIOD OF THREE MONTHS AFTER SUCH DATE; OR (II) SUCH UNIT WITHIN A PERIOD OF NINE MONTH S AFTER SUCH DATE; (C) THE DIVIDEND OR INCOME ON SUCH SECURITIES OR U NIT RECEIVED OR RECEIVABLE BY SUCH PERSON IS EXEMPT, THEN, THE LOSS, IF ANY, ARISING TO HIM ON ACCOUNT OF SUCH PURCHASE AND SALE OF SECURITIES OR UNIT, TO THE EXTENT SUCH LOSS DOES NO T EXCEED THE AMOUNT OF DIVIDEND OR INCOME RECEIVED OR RECEIVABLE ON SUCH S ECURITIES OR UNIT, SHALL BE IGNORED FOR THE PURPOSES OF COMPUTING HIS INCOME CH ARGEABLE TO TAX. 6.1. LIKEWISE, IN THE CASE OF ASHOK KUMAR DAMANI 138 TTJ 45 (MUM.), IT WAS HELD THAT THE APPLICABILITY OF SECTI ON 94(7) COMES INTO PLAY WHEN ALL THE THREE CONDITIONS ARE FULFILLED. W E HAVE EXAMINED THE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 7 - GENERAL CLAUSES ACT SECTION 9(1) WHICH IS ALSO REF ERRED BEFORE US; RELEVANT PORTION IS REPRODUCED BELOW:- 19. FOR SUBSTANTIATING OUR CLAIM WE INVITE YOUR K IND ATTENTION THE SECTION 9(1) OF THE GENERAL CLAUSES ACT, 1897. THE SAME IS REPRODUCED HEREINABELOW: 9(1) IN ANY CENTRAL ACT OR REGULATION MADE AFTER T HE COMMENCEMENT OF THIS ACT, IT SHALL BE SUFFICIENT, F OR THE PURPOSE OF EXCLUDING THE FIRST IN A SERIES OF DAYS OR ANY OTHE R PERIOD OF TIME, TO USE THE WORD FROM, AND, FOR THE PURPOSE OF INC LUDING THE LAST IN A SERIES OF DAYS OR ANY OTHER PERIOD OF TIME, TO USE THE WORD TO. (2) THIS SECTION APPLIES ALSO TO ALL CENTRAL ACTS MADE AFTER THE THIRD DAY OF JANUARY, 1868, AND TO ALL THE REGULATI ONS MADE ON OR AFTER THE FOURTEENTH DAY OF JANUARY, 1887. 6.2. EVEN IF THE GENERAL CLAUSES ACT IS TO BE APPLI ED, THEN WE ARE NOT CONVINCED THAT RECORD DATE HAS NO SIGNIFICANCE BE CAUSE THAT PARTICULAR DATE IS PURPOSELY INCORPORATED IN THE STATUTE AND T HEN THE WORD PRIOR HAS ALSO SIGNIFICANCE. THE STATUTE IS NOT SAYING THAT ANY UNIT IS TO BE ACQUIRED WITHIN A PERIOD OF THREE MONTHS TO THE REC ORD DATE, BUT IT SAYS THAT ANY PERSON BUYS OR ACQUIRES ANY UNIT WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECORD DATE. ACCORDING TO US, UNITS HAVE BEEN PURCHASED WITHIN A PERIOD OF THREE MONTHS PRIOR TO THE RECOR D DATE, THEREFORE ONE OF THE CONDITION APPLIES ON SUCH TRANSACTION. THEN IT IS NOT IN DISPUTE THAT THE SALE WAS MADE ON 06/02/2006, I.E. WITHIN THE PE RIOD OF NINE MONTHS FROM THE RECORD DATE, I.E. 20/01/2006, THEREFORE WI THIN CLAUSE(B)(II) OF SECTION 94(7) OF IT AC. IN THE LIGHT OF THE CASE LAWS CITED HEREINABOVE, THE RELEVANT CONDITIONS HAVE BEEN CUMULATIVELY SATI SFIED THEREFORE WE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 8 - HEREBY UPHOLD THE STAND OF THE REVENUE. THIS GROUN D OF THE ASSESSEE IS THEREFORE DISMISSED. 7. GROUND NO.3 :- 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN MAKING AN ADDITION OF RS.27,66,022 (1,06,66,471 IN THE CASE OF SHRI NAVINBHAI N.PATEL) HOLDING THAT THE SAID SUM REPRESENTS DEEMED DIVIDEND U/S.2(22)(E) AND THEREFORE TAXABLE IN THE HANDS OF THE APPELLANT DES PITE THE FACT THAT THE APPELLANT SHOWED THAT HE DID NOT HOLD BENEFICIA L INTEREST IN REQUIRED NUMBER OF SHARES. 7.1. THE OBSERVATION OF THE AO WAS THAT DURING TH E COURSE OF SEARCH, VARIOUS PAPERS RELATING TO SHAREHOLDING PATTERN OF M/S.AMOD STAMPINGS PVT.LTD. WERE SEIZED. ON THE BASIS OF THOSE DOCUMENTS, IT WAS FOUND THAT M/S.AMOD STAMPINGS PVT.LTD. HAD GRANTED LOANS TO VARIOUS MEMBERS HAVING SHAREHOLDING AND VOTING POWER EXCEEDING 10%. DUE TO THAT REASON, THE AO HAS INVOKED THE PROVISIONS OF SECTIO N 2 (22)(E) OF IT ACT TO COVER THE IMPUGNED LOANS AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. BEFORE ASSESSING OFFICER FROM THE SIDE OF THE ASSESSEE, IT WAS CONTESTED THAT A TRUST WAS CREATED ON 16/11/2005. ON CREATION OF THE TRUST, AN AGGREGATE 5,12,000 EQUITY SHARES OF M/S.A MOD STAMPINGS PVT.LTD.WERE SETTLED IN FAVOUR OF THE TRUST. AFTE R THE SAID EXCLUSION OF SHARES, IT WAS CONTESTED THAT THE ASSESSEE DID NOT HOLD MORE THAN 10% OF THE TOTAL VOTING POWER, THEREFORE THE ASSESSEE HAD NO BENEFICIAL INTEREST IN THE TRUST. IN THIS REGARD, FACTS ARE AS UNDER:- THE ASSESSEE HAS SUBMITTED THAT HE ALONG WITH OTHE R FAMILY MEMBERS HAS CREATED THE FAMILY TRUST NARHARIBHAI S PATEL FAMILYS CHILDREN TRUST AS PER TRUST DEED DATED 16 TH NOVEMBER, 2005 T O MEET THE EDUCATION AND MEDICAL COST OF THE CHILDREN OF THE FAMILY. BY WAY OF THE SAID TRUST, THE FAMILY IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 9 - MEMBERS BEING SHAREHOLDERS I.E. SHRI KRUPESH PATEL, SHRI NAVIN PATEL AND SMT.LALITABEN PATEL TRANSFERRED RESPECTIV ELY 1,56,000 SHARES, 2,00,000 SHARES AND 1,56,000 SHARES OF M/S. AMOD STAMPINGS P LTD TO THE TRUST. THEREFORE, THEY DID NOT HOLD THE BENEFICIAL INTEREST IN THE SHARES FOR MORE THAN 10% . THE ASSESSEE HAS RELIED UPON VARIOUS CASE LAWS WHEREIN IT WAS HE LD THAT IN ORDER TO SATISFY THE REQUIREMENT OF SECTION 2(22)(E), THE ASSESSEE MUST BE REGISTERED AS WELL AS BENEFICIAL SHAREHOLDERS OF TH E COMPANY FROM WHOM HE HAS RECEIVED THE LOANS. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE A SSESSEE BUT THE SAME IS NOT FOUND ACCEPTABLE. 7.2. AFTER DISCUSSION, THE AO HAS TAKEN A STAND THA T THE CREATION AND THE EXISTENCE OF THE TRUST WAS AN AFTER-THOUGHT. HE HAS CONCLUDED THAT THE ASSESSEE ALONG WITH FAMILY MEMBERS WAS HOLDING SHAR ES OF M/S.AMOD STAMPINGS PVT.LTD. WHICH WAS MORE THAN 10% OF THE H OLDING, THEREFORE DEEMED DIVIDEND TO THAT EXTENT HAS TO BE TAXED. 8. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY. THE ASSESSEE HAS REBUTTED THE ACTION OF THE AO ON THE F OLLOWING POINTS:- VALIDITY OF TRUST & ITS SHAREHOLDING: 39. THE AO IN THE ASSESSMENT ORDER HAS STATED THAT THE EXISTENCE OF THE TRUST WAS AN AFTERTHOUGHT AND THEREFORE SHOULD BE REJECTE D. WE SUBMIT, THAT THE TRUST EXISTED ON AND FROM 16-11-2005. THE EXISTENCE OF TH E TRUST WAS DULY N OTED BY THE COMPANY IN ITS MINUTES OF MEETING AND ALSO THE TRUST HAS BEEN FORMED BY EXECUTING A VALID DOCUMENT. WE THEREFORE SUBMIT THA T THE COMMENTS OF THE AO ARE REQUIRED TO BE IGNORED. 40. THE AO HAS ALSO STATED THAT THE TRUST HAS NO BANK ACCOUNT, NO BALANCE SHEET IS PREPARED AND THAT THE SHARES ARE NOT REGI STERED IN ITS NAME. WE SUBMIT THAT TILL DATE NO INCOME HAS BEEN RECEIVED BY THE TRUST. THEREFORE THERE, IS NO QUESTION OF HAVING ANY BANK ACCOUNT. REGARDING THE BALANCE SHEET AND INCOME AND EXPENDITURE ACCOUNT IT MAY BE NOTED THAT EXCEPT THE BENEFICIAL INTEREST IN THE SHARES THE TRUST HAS NO OTHER PROPERTY. WE THEREFORE SUBMIT THAT THIS CONTENTION OF THE AO IS ALSO NOT A S PER LAW. AS THERE WAS NO INCOME THE QUESTION OF FILING OF RETURN OF INCOME A LSO DOES NOT ARISE. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 10 - 41. REGARDING THE REGISTRATION OF THE SHARES IN THE NAME OF THE TRUST IN THE BOOKS OF THE COMPANY IT MAY BE NOTED THAT AS PER SE CTION 153 OF THE COMPANIES ACT, 1956 A COMPANY IS NOT PERMITTED TO INCLUDE THE NAME OF T HE TRUST IN THE REGISTER OF THE MEMBERS. FOR READY REFERENCE SECTION 153 OF THE COMPANIES ACT, 1956 IS REPRODUCED HEREINBELOW: 'TRUSTS NOT TO BE ENTERED ON REGISTER. 153. NO NOTICE OF ANY TRUST, EXPRESS, IMPLIED O R CONSTRUCTIVE, SHALL BE ENTERED ON THE REGISTER OF MEMBERS OR OF DEBENTURE HOLDERS.' 42. YOUR KIND OFFICE WOULD APPRECIATE THAT SIN CE THE COMPANY IS LEGALLY DEBARRED FROM REGISTERING THE TRUST AS ITS MEMBER T HE NAME OF THE TRUST WOULD NEVER FORM PART OF THE REGISTER OF THE MEMBERS OF T HE COMPANY, 43. HOWEVER, THE COMPANY HAS DULY NOTED THE EX ISTENCE OF THE TRUST AND THE BENEFICIARY HAS BEEN RECORDED IN THE MINUTES OF THE COMPANY. WE INVITE YOUR KIND ATTENTION TO PAGE NO. 175 OF THE PAPER BOOK (R EFER NOTE 3). YOUR KIND OFFICE WOULD APPRECIATE THAT THE EXISTENCE OF THE TRUST HA S BEEN DULY NOTED AND THE NUMBER OF SHARE WHICH ARE VESTED IN THE TRUST HAS A LSO BEEN NOTED. WE THEREFORE SUBMIT THAT THE CONTENTION RAISED BY THE AO IS AGAIN NOT AS PER LAW. 44. WE MAY ALSO LIKE TO MENTION THAT THE TRUST HAS BEEN DULY EXECUTED ON THE STAMP PAPER OF VALID DENOMINATION. FURTHER, IT HAS BEEN DULY NOTARIZED AND THEREFORE, ITS GENUINENESS CANNOT BE LIGHTLY IGNORE D. FURTHER, THERE IS NO LAW WHICH REQUIRES REGISTRATION OF A PRIVATE TRUST OR A PPROVAL OF THE PRIVATE TRUST. 45. IT MAY BE NOTED THAT SECTION 187C OF THE COMPANIES ACT, 1956, REQUIRED EVERY PERSON TO DECLARE TO A COMPANY THAT HE DOES NOT HAVE BENEFICIAL INTEREST IN THE SHARES WHICH AS PER THE REGISTER OF MEMBERS ARE IN HIS NAME. FURTHER, A COMPANY WAS ALSO REQUIRED TO FILE A DECLARATION OF SUCH BENEFICIAL INTEREST TO THE REGISTRAR OF COMPANIES. THE PROVISIONS OF SECTI ON 187C HAVE BEEN MADE INEFFECTIVE W.E.F. 13 TH DECEMBER, 2000 AND THEREFORE, THERE IS NO REQUIREME NT AT PRESENT TO DECLARE BENEFICIAL INTEREST, ETC. THEREF ORE, SUCH BENEFICIAL INTEREST IS NOT DECLARED IN THE REGISTER OF THE COMPANY OR THE REGISTRAR OF THE COMPANIES. 46. THEREFORE, AS PER THE REGISTER OF MEMBERS OF THE COMPANY, THE SHARES ARE STILL IN THE NAME OF THE RESPECTIVE SHAREHOLDER S AND THERE IS NO NOTE TAKEN OF THEIR DIVESTMENT OF BENEFICIAL INTEREST. 47. IT IS SUBMITTED THAT THE EXISTENCE OF THE TRUST IS PROVED BY WAY OF A LEGALLY EXECUTED DOCUMENT. THE DOCUMENT IS NOTARIZE D BY A GOVERNMENT APPOINTED NOTARY ON A DATE WHICH IS MUCH PRIOR TO T HE DATE OF SEARCH. THE SAID DOCUMENT IS PART OF THE MINUTES OF THE COMPANY AND PART OF A MEETING WHICH IS IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 11 - HELD MUCH PRIOR TO THE DATE OF SEARCH. ALL THESE EVIDENCES ARE BEING I GNORED, INCLUDING THE EVIDENCE OF A NOTARIZED DOCUMENTS, ME RELY BECAUSE OF A SUSPICION OR SURMISES OR CONJECTURES. THERE IS NO E VIDENCE WITH THE AO TO HOLD THAT THE TRUST IS BOGUS, THAT THE SIGNATURE OF THE NOTARY IS BOGUS, THAT THE COMPANY'S MINUTES ARE FALSIFIED, ETC. IT IS ALSO SU BMITTED THAT THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD, EITHER FOUND DURING THE COURSE OF SEARCH OR EVEN AS A RESULT OF POST SEARCH INVESTIGATION, WHIC H GOES :TO PROVE THAT ANY OF THE EVIDENCES PRODUCED BY THE APPELLANT ARE WRONG O R FALSIFIED. WE INVITE YOUR KIND ATTENTION TO THE FOLLOWING DECISIONS, WHICH HO LD THAT THE ADDITIONS WHICH ARE MADE PURELY BASED ON SURMISES, CONJECTURES OR W ILD ALLEGATIONS CANNOT BE SUSTAINED, ESPECIALLY WHEN THE CLAIM OF THE ASSESSE E IS BASED ON SOUND EVIDENCES AND DOCUMENTARY PROOF, EVIDENCED BY THIRD PARTY INDEPENDENT PROOFS. A. SMT. PURNIMA BERI V. DCIT 264 ITR 54 (AMRITSA R) (AT) B. CIT V. KULWANT RAT 291 ITR 36 (DEL) 48. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE WE SUBMIT THAT THE ALLEGATIONS RAISED BY THE AO ARE NOT VALID THE REFORE NO ADVERSE VIEW MAY PLEASE BE TAKEN. 8.1. HOWEVER, LD.CIT(A) WAS NOT CONVINCED AND HELD THAT M/S.AMOD STAMPINGS PVT.LTD. IS A FAMILY OWNED COMPANY AND AD VANCED LOAN TO THE FAMILY MEMBERS AGGREGATING TO RS.881.71 LACS. THE COMPANY HAS ALSO POSSESSED ACCUMULATED PROFIT TO THE EXTENT OF LOAN GIVEN. LD.CIT(A) HAS NOTED THAT DURING THE COURSE OF SEARCH, NO DOCUMENT RELATING TO THE TRUST- DEED NAMED AS NARHARIBHAI S. PATEL FAMILYS CHILDR EN TRUST WAS FOUND. HE HAS ALSO NOTED THAT IN A STATEMENT RECO RDED U/S.132(4) DATED 12/02/2009, THE ASSESSEE HAS ADMITTED TO PAY THE TA X. ACCORDING TO HIM, THERE WAS NO INDEPENDENT EVIDENCE TO DEMONSTRATE TH AT A TRUST WAS CREATED ON 16/11/2005 AND THAT THE ASSESSEE AS WELL AS THE OTHER FAMILY MEMBERS HAVE SETTLED 5,12,000 EQUITY SHARES OF M/S. AMOD STAMPINGS PVT.LTD. TO THE TRUST. HE HAS CONCLUDED THAT TH ERE WAS NO BANK ACCOUNT OF THE TRUST, NO RETURN OF INCOME WAS FILED, THERE WAS NO TRANSFER OF IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 12 - SHARES IN THE NAME OF TRUST, HENCE MERELY A NOTARI ZED TRUST-DEED IN ISOLATION DID NOT ESTABLISH THE EXISTENCE OF THE TR UST. HE HAS UPHELD THE ACTION OF THE AO THAT THE ASSESSEE WAS COVERED WIT HIN THE PARAMETERS OF SECTION 2(22)(E) OF IT ACT. BEING AGGRIEVED, NOW TH E ASSESSEE IS FURTHER BEFORE US IN SECOND APPEAL. 9. FROM THE SIDE OF THE ASSESSEE, LD.AR MR.MILIN ME HTA APPEARED. HE HAS GIVEN THE PATTERN OF THE SHAREHOLDING BY THE INDIVIDUALS AND BY THE TRUST AS FOLLOWS:- NAME OF THE REGISTERED MEMBER NO.OF SHARES % OF SHARES HELD BY INDIVIDUAL TO TOTAL NO.OF SHARES SHARES HELD BY TRUST (BENEFICIAL OWNER) % OF SHARES HELD BY TRUST TO TOTAL NO.OF SHARES TOTAL % A B C D E C + C = F DEEMED DIVIDEND (RS.) AY 2006-07 KRUPESH PATEL 1,69,990 8.50% 1,56,000 7.80% 16.30% 27,66,022 NAVIN PATEL 1,76,000 8.80% 2,00,000 10.00% 18.80% 1 ,06,66,471 LALITABEN PATEL 1,94,000 9.70% 1,56,000 7.80% 17.50% 4,60,273 AY 2007-08 KRUPESH PATEL 59,100 2.96% 1,56,000 7.80% 10.76% 3,93,74,965 NAVIN PATEL 15,100 0.76% 2,00,000 10.00% 10.76% 3,4 8,26,894 LALITABEN PATEL 83,000 4.15% 1,56,000 7.80% 11.95% NIL SMITABEN PATEL (NOTE 2) 2,15,100 10.76% - - - 76,378 TOTAL [NOTE : 1) TOTAL NUMBER OF SHARES HAVING VOTING POW ER IS 20,00,000 EQUITY SHARES. 2) NOT IN APPEL.] 8,81,71,003 9.1. LD.AR HAS ARGUED THAT THE REVENUE HAD ARBITRAR ILY CLUBBED THE SHAREHOLDING OF THE TRUST ALONG WITH THE SHARE-HOLD INGS OF THE INDIVIDUALS. HE HAS EMPHASIZED THAT THE TRUST WAS FORMED ON 16/1 1/2005. HE HAS IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 13 - DRAWN OUR ATTENTION ON PAGE 167 OF THE PAPER-BOOK CONTAINING A PHOTOCOPY OF DECLARATION OF TRUST ON A STAMP PAPER OF RS.100 WHICH WAS STATED TO BE DATED 16/11/2005. LD.AR HAS CON TESTED THAT IN TOTAL 5,12,000 SHARES WERE SETTLED BY THE SETTLERS FOR TH E BENEFIT OF THE BENEFICIARIES AND THAT DOCUMENT IS DULY NOTARIZED. LD.AR HAS DRAWN OUR ATTENTION ON PAGE 175 OF THE PAPER-BOOK, I.E. MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF AMOD STAMPINGS PVT.LTD. D ATED 21/12/2005. HE HAS INFORMED THAT THE SAID MEETING HAS NOT ONLY DECIDED THE SETTLEMENT OF SHARES IN FAVOUR OF THE TRUST BUT ALS O DISCUSSED AN ANOTHER RESOLUTION WHICH WAS RELATED TO SOME AMALGAMATION A CTIVITY. HE HAS REITERATED THE ABOVE REPRODUCED POINT-WISE REPLY W ITH REGARD TO THE OBJECTIONS OF THE REVENUE. 9.2. FINALLY, HE HAS ARGUED THAT IN THE LIGHT OF TH E DECISION OF BHAUMIK COLOUR 118 ITD PG 1 (MUM.)[SB] AND JCIT VS. KUNAL O RGANICS PVT.LTD. 164 TAXMAN 169 (AHD.) THE TWIN CONDITIONS OF SHAREHOLDING I.E. THE BENEFICIAL SHAREHOLDING AND REGISTERED SHA REHOLDING, HAVE NOT BEEN COMPLIED WITH, THEREFORE OUT OF THE CLUTCHES O F THE PROVISIONS OF DEEMED DIVIDEND. 10. FROM THE SIDE OF THE REVENUE, LD.DR MR.KARTAR S INGH APPEARED AND PLACED RELIANCE ON THE FINDINGS OF THE AO & CIT (A). HE HAS PLEADED THAT THE THEORY OF CREATION OF TRUST WAS MADE AFTER THE SEARCH OPERATION. THE ONLY PROOF WITH THE ASSESSEE WAS A NOTARIZED ST AMP PAPER BUT THERE WAS NO OTHER SUPPORTING DOCUMENT. SINCE LOAN HAS BE EN GRANTED, THEREFORE DEEMED DIVIDEND WAS RIGHTLY TAXED IN THE HANDS OF THE ASSESSEE. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 14 - 11. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. W E HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION FILED. AS FAR AS THE PROVISIONS OF THE ACT IS CO NCERNED, NOW IT HAS BEEN STREAMLINED THAT DEEMED DIVIDEND INCLUDES ANY PAY MENT BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTA NTIALLY INTERESTED, OF ANY SUM BY WAY OF ADVANCE OR LOAN TO A SHAREHOLDER BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES HOLDING NOT LES S THAN 10% OF THE VOTING POWER. AS FAR AS THE QUESTION OF APPLICABIL ITY OF DEEMING PROVISIONS ARE CONCERNED, IN THE CASE OF CIT VS. ANKITECH (P) LTD. (2011) 199 TAXMAN 341 (DELHI) IT WAS HELD THAT THE DEFINITION OF DIVIDEND HAS BEEN ENLARGED. THE PURPOSE FOR SUC H INTRODUCTION OF A DEEMING PROVISION WAS THAT INSTEAD OF DISTRIBUTING ACCUMULATED PROFIT AS DIVIDEND, COMPANIES DISTRIBUTE LOANS OR ADVANCES TO SHAREHOLDERS HAVING SUBSTANTIAL INTEREST. SUCH PAYMENTS ARE MADE FOR T HE BENEFIT OF THE SHAREHOLDERS. THEREFORE, IN SUCH AN EVENT A DEEMI NG PROVISION HAS BEEN INTRODUCED AND THOSE ADVANCES ARE HENCEFORTH TREATE D AS DIVIDEND. SO THE INTENTION BEHIND THE INTRODUCTION OF THIS PROVISION IS TO TAX DEEMED DIVIDEND IN THE HANDS OF THE SHAREHOLDER. THE DEEM ING PROVISION IS BASED ON THE PRESUMPTION THAT THE LOANS OR ADVANCES ARE I N LIEU OF DIVIDEND. IN AN ADMITTED CASE, UNDER NORMAL CIRCUMSTANCES, SUCH LOANS OR ADVANCES GIVEN TO SHAREHOLDERS DO NOT QUALIFY AS DIVIDEND. ONLY BECAUSE OF A LEGAL FICTION AS CREATED U/S.2(22)(E) OF THE ACT THE SCO PE OF THE TERM DIVIDEND HAS BEEN ENLARGED. THE HONBLE COURT HAS FURTHER CLARIFIED THAT THE LEGAL FICTION DO NOT EXTEND TO SHAREHOLDERS. THE LOANS OR ADVANCES GIVEN UNDER THE CONDITIONS SPECIF IED UNDER THIS SECTION WOULD AMOUNT TO DIVIDEND AND THAT FICTION HAS TO ST OP AT THAT PLACE. ACCORDING TO THE DELHI HIGH COURT, THE SAID FICTION DO NOT EXTEND IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 15 - FURTHER FOR BROADENING THE CONCEPT OF SHAREHOLDER, THAT TOO BY A LEGAL FICTION. IF THE INTENTION OF THE LEGISLATURE WAS TO TAX SUC H LOANS OR ADVANCES AS DEEMED DIVIDEND AT THE HANDS OF A DE EMING SHAREHOLDER, THEN THE LEGISLATURE WOULD HAVE INSERTED DEEMING PR OVISION IN RESPECT OF SHAREHOLDERS AS WELL. A SHAREHOLDER SHOULD NOT BE PRESUMED BY WAY OF SUCH DEEMING PROVISION. IN THE LIGHT OF THE ABOV E DECISION, NEXT IN LINE, IS THE ORDER OF THE RESPECTED SPECIAL BENCH IN THE CASE OF BHAUMIC COLOUR 118 ITD PG 1 (MUM.) WHEREIN IT WAS CLARIFIED THAT TO ATTRACT THE PROVISIONS OF THIS SECTION THE PAYMENT MUST BE MADE TO A PERSON WHO IS SHAREHOLDER. HOWEVER, THE WORD SHAREHOLDER IS C OUPLED WITH THE WORDS BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHAR ES. THEREFORE, AS PER THE SPECIAL BENCH THE REQUIREMENT IS NOT MERELY HOLDING A BENEFICIAL INTEREST IN THE SHARES BUT IT SHOULD BE REGISTERED SHAREHOLDERS. FINALLY, IT WAS CONCLUDED THAT THE EXPRESSION SHAREHOLDER BEING A PERSON WHO IS THE BENEFICIAL OF THE SHARE REFERS TO BOTH A REGISTERED SHAREHOLDER AND A BENEFICIAL SHAREHOL DER. 11.1. IN THE LIGHT OF THE ABOVE LEGAL DISCUSSION , WE HAVE EXAMINED THE FACTS OF THE CASE. THE AREA OF DISPUTE IS THE EXI STENCE OF A DECLARATION OF TRUST CLAIMED TO BE EXECUTED ON 16/11/2005. UNDISPUTEDLY, SEARCH WAS CONDUCTED ON 11/02/2009. REVENUES MAIN OBJECTION IS THAT ON THE DATE OF SEARCH THE SAID DOCUMENT WAS NOT RECOVERED. HOWEVER, THE VEHEMENT CONTENTION OF THE ASSESSEE IS THAT THIS DO CUMENT HAS DULY BEEN EXECUTED ON A STAMP-PAPER OF RS.100/- ON 16/11/2005 . FURTHER, IT HAS ALSO BEEN STRONGLY CONTESTED THAT THE SAID DOCUMENT WAS DULY NOTARIZED BY A NOTARY, WHO HAS AUTHENTICATED ITS EXECUTION. RATHER IT WAS ALLEGED THAT NO ATTEMPT WAS MADE BY THE REVENUE TO NEGATE T HE VALIDITY OF THE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 16 - SAID DOCUMENT. REVENUE DEPARTMENT COULD HAVE EXAM INED THE VERACITY OF THE SAID DOCUMENT BY INVESTIGATING THE RECORDS O F THE STAMP VENDOR, AS ALSO THE SAID NOTARY. A LEGAL DOCUMENT WHICH IS E XECUTED IN THE PRESENCE OF A DULY AUTHORISED PERSON, I.E. NOTARY, AN APPOIN TED LEGAL ENTITY BY GOVERNMENT OF INDIA, HAS TO BE ACKNOWLEDGED AND TO BE ACCEPTED AS TRUE AND CORRECT UNLESS AND UNTIL PROVED OTHERWISE. FROM THE SIDE OF THE ASSESSEE, IT WAS STRONGLY CONTESTED THAT TO CORROBO RATE SUCH DECLARATION, RELIANCE IS ALSO PLACED ON THE MINUTES OF THE MEETI NG OF THE BOARD OF DIRECTORS OF M/S.AMOD STAMPINGS PVT.LTD. HELD ON 2 2/12/2005, WHEREIN IT WAS RESOLVED AS UNDER:- RESOLVED FURTHER THAT THE COPY OF THE SAID RESOLU TION BE SUBMITTED TO THE BANK. 03. SETTLEMENT OF SHARES HELD BY N.S. PATEL FAMILYS CHILDREN TRUST. THE CHAIRMAN PLACED BEFORE THE BOARD INFORMATION RE CEIVED FROM THE THREE SHAREHOLDERS OF THE COMPANY BEING SMT.LAL ITABEN N.PATEL, SHRI NAVINBHAI N.PATEL AND SHRI KRUPESHBHA I N.PATEL ABOUT SETTLEMENT OF 5,12,000 ENQUIRY SHARES OF RS.1 0 EACH FULLY PAID UP HELD BY THEM IN FAVOUR OF M/S.N.S.PATEL FAM ILYS CHILDREN TRUST. THE SAID PERSONS HAVE INFORMED THAT THEY WO ULD BE CONTINUING TO HOLD THESE SHARES, BUT BENEFICIAL INT EREST IN THESE SHARES WOULD BE THOSE OF THE TRUST SO SETTLED AND I TS BENEFICIARIES. 11.2. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE TERM S THROUGH WHICH THE SETTLORS HAVE SETTLED THE SHARES IN FAVOUR OF THE B ENEFICIARIES VIDE N.S.PATEL FAMILYS CHILDREN TRUST DELCARATION OF TRUST DATED 16 TH DAY OF NOVERMBER-2005 AS FOLLOWS:- WHEREAS IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 17 - I) THE SETTLORS ARE MEMBERS OF THE FAMILY OF LATE SHRI NARHARIBHAI SOMABHAI PATEL AND ARE PRESENTLY SHAREH OLDERS OF ONE COMPANY BY THE NAME OF M/S.AMOD STAMPINGS PR IVATE LIMITED, A COMPANY FORMED AND REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND AND HAVIN G ITS REGISTERED OFFICE AT GUJARAT SPUN PIPE COMPOUND, P. O. SAMIALA, PADRA ROAD, VADODARA 391 410 )THE COMPANY); II) THE SETTLORS ARE DESIROUS OF ENSURING THAT THE CHIL DREN OF THE FAMILY, WHO ARE PRESENTLY PURSUING EDUCATION OR ARE PROPOSING TO SETTLE IN BUSINESS, DO NOT HAVE ANY SC ARCITY OF FUNDS FOR THEIR FUTURE PURSUITS, PRIMARILY BEING ED UCATION OR COMMENCING NEW BUSINESS; III) THE SETTLORS HAVE DECIDED, FOR NATURAL LOVE AND AFF ECTION, TO SETTLE SOME OF THE SHARES OF THE COMPANY UPON A TRU ST FOR THE BENEFIT OF THE CHILDREN OF THE FAMILY TO BE GOVERNE D BY THE PROVISIONS OF THIS DECLARATION OF THE TRUST; TERMS AND CONDITIONS OF SETTLEMENT 1. IN CONSIDERATION OF NATURAL LOVE AND AFFECTION, THE SETTLORS DO HEREBY SETTLE THE FOLLOWING EQUITY SHARES HELD BY T HE RESPECTIVE SHAREHOLDERS FOR THE BENEFIT OF THE BENEFICIARIES A S DESCRIBED IN THIS DECLARATION: NAME OF THE SETTLOR NUMBER OF SHARES SETTLED DISTINCTIVE NUMBER FROM TO KRUPESH N.PATEL 156,000 1000001 1999981 480001 1079990 1999990 556000 NAVINBHAI N.PATEL 200,000 1079991 680001 1209990 750001 LALITABEN N.PATEL 156,000 200001 356000 TOTAL 512,000 THE SHARES OF THE COMPANY ARE EQUITY SHARES OF RS.1 0 EACH FULLY PAID UP AND THE SAME ARE REFERRED TO AS THE SETTLE D ASSETS. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 18 - 2. THE SETTLORS SHALL ACT AS THE FIRST TRUSTEES, UN LESS AND UNTIL OTHER PERSONS ARE APPOINTED AS THE TRUSTEES IN ACCORDANCE WITH THE DECLARATION AND THE RESPECTIVE SETTLOR SHALL CONTIN UE TO HOLD THE PART OF THE SETTLED ASSETS IN THEIR NAME, BUT SHALL NOT HAVE ANY BENEFICIAL INTEREST IN THE SAID SETTLED ASSET AND T HE BENEFICIAL INTEREST IN THE SAID ASSET SHALL STAND VESTED IN TH E BENEFICIARIES IN ACCORDANCE WITH THIS DECLARATION; 11.3. AFTER THE SEARCH, DY.COMMISSIONER OF INVESTIG ATION HAS ALSO ENQUIRED ABOUT THIS ISSUE AND VIDE SUBMISSION DATED 22/04/2009, THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS OF THE SAID DECLARATION. IN RESPECT OF FEW OTHER QUERIES, EXPLANATION OF THE AS SESSEE WAS THAT IN THE ABSENCE OF ANY OTHER TRANSACTION OR EARNING OF NIL INCOME, THERE WAS NO NECESSITY TO OPEN A BANK ACCOUNT. FURTHER, ABOUT THE REGISTRATION OF THE SHARES, IT WAS EXPLAINED THAT AS PER SECTION 153 OF THE COMPANIES ACT, 1956, A COMPANY IS NOT PERMITTED TO INCLUDE THE NA ME OF THE TRUST IN THE REGISTER BECAUSE TRUSTS ARE NOT REQUIRED TO BE ENTE RED IN THE REGISTER. DUE TO THIS REASON, THE NAME WHICH WAS EARLIER NOTED AS SHAREHOLDERS REMAINED THE SAME, HOWEVER THROUGH A BOARD MEETING IT WAS RESOLVED TO ACKNOWLEDGE THE CHANGE IN THE VESTING OF THE SHARES . UNDER THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE AND THE EVIDENCE O N RECORD, WE ARE OF THE VIEW THAT A DEEMING PROVISION HAS TO BE APPLIED STR ICTLY, SO THAT A FICTION SO CREATED BY A STATUTE SHOULD NOT COVER WITHIN IT S AMBITS MORE THAN WHAT IS SUBSCRIBED. A DEEMING PROVISION IS, THEREFO RE, TO BE APPLIED RESTRICTIVELY, SO THAT ITS APPLICATION MUST NOT ENL ARGE THE SCOPE OF PRESUMPTION. RATHER, IT HAS BEEN HELD IN THE CASE OF L.H. SUGAR FACTORY 125 ITR 293 (SC) THAT NO AUTHORITY CAN PRESUME SOM ETHING WHICH IS NOT ENVISAGED IN THE ACT. A DOCUMENTARY EVIDENCE IS THU S NOTHING BUT AFFIRMATION OF THE EXISTENCE OF A FACT AND, THEREFO RE, MERELY ON IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 19 - PREPONDERANCE OF PROBABILITIES SUCH A DOCUMENTARY E VIDENCE SHOULD NOT BE REJECTED. WE, THEREFORE, CONCLUDE THAT IN THE A BSENCE OF ANY CONTRARY MATERIAL SPECIALLY WHEN WE ARE DEALING WITH A FICTI ON CREATED BY A STATUTE, A FICTIONAL INCOME, I.E. DEEMED DIVIDEND NEED NOT BE TAXED IN THE HANDS OF THE ASSESSEE ON AN UN-ESTABLISHED HYPOTHECATION. WE HEREBY DIRECT TO DELETE THE ADDITION. GROUND IS ALLOWED. 12. REST OF THE GROUNDS ARE CONSEQUENTIAL IN NATURE THUS NEED NO ADJUDICATION AT THIS STAGE OF APPEAL, HENCE THIS AP PEAL IS PARTLY ALLOWED. (B) A.Y.2007-08 IT(SS)A NO. 591/AHD/2011 (ASSESSEE S APPEAL) 13. GROUNDS RAISED ARE HEREBY DECIDED AS FOLLOWS: - 1.THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CO NFIRMING THE ACTION OF THE AO IN NOT RESTRICTING THE ASSESSMENT /ADDITION, BASED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN MAKING AN ADDITION OF RS.3,93, 74,965 (RS.3,48,26,894 IN THE CASE OF SHRI NAVINBHAI N.PATEL) HOLDING THAT THE SAID SUM REPRESENTS DEEMED DIVIDEND U/S.2( 22)(E) AND THEREFORE TAXABLE IN THE HANDS OF THE APPELLANT DES PITE THE FACT THAT THE APPELLANT SHOWED THAT HE DID NOT HOLD BENEFICIA L INTEREST IN REQUIRED NUMBER OF SHARES. 13.1. GROUND NO.1 IS GENERAL IN NATURE, NOT PRESSED , HENCE DISMISSED. HOWEVER, IN RESPECT OF GROUND NO.2 IN THE LIGHT OF THE DISCUSSION MADE HEREINABOVE, WHILE DECIDING ASSESSEES APPEAL FOR A .Y. 2006-07, IT STOOD ALLOWED. FOR THIS YEAR AS WELL, THIS GROUND IS ALL OWED. REST OF THE GROUNDS ARE CONSEQUENTIAL IN NATURE NEED NO ADJUDIC ATION AT THIS STAGE OF APPEAL, HENCE THIS APPEAL IS PARTLY ALLOWED. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 20 - (C) A.Y.2007-08 IT(SS)A NO. 594/AHD/2011 (REVENUES APPEAL) 14. THE ONLY GROUND IN THIS APPEAL IS REPRODUCE D BELOW:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS.1,46,66,667/- ON ACCOUNT OF SALE OF AMPAD LAND ON THE BASIS OF SEIZED PAPERS. 14.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPOND ING ASSESSMENT ORDER PASSED U/S.153A R.W.S.143(3) DATED 23/12/2010 ARE I DENTICAL AS NARRATED HEREINABOVE THAT A SEARCH U/S.132 OF THE ACT WAS CO NDUCTED ON THE ASSESSEE ON 11/02/2009. IN RESPECT OF THE ABOVE GR OUND, THE AO HAS NOTED THAT A DOCUMENT, I.E. PAGE NO.50 MARKED AS AN NEXURE BS-1 WAS SEIZED FROM THE OFFICE OF THE COMPANY. SIMULTANEOU SLY, A PAGE MARKED AS ANNEXURE A1 WAS SEIZED FROM A LOCKER, BELONGING TO THE ASSESSEE AND SMT.SAMITA PATEL. ON THE BASIS OF THE SAID PAGE, AO HAS NOTED THAT THE SAME WAS A CASH RECEIPT OF RS.524.17 LACS. IN THIS REGARD, A STATEMENT WAS RECORDED OF THE ASSESSEE ON 12/02/2009, I.E. ON THE NEXT DAY OF THE SEARCH AND RELEVANT PORTION WAS REPRODUCED BY THE AO IN T HE ASSESSMENT ORDER. THE ASSESSEES REPLY WAS THAT ALTHOUGH THE SCHEDULE OF PAYMENT WAS NOTED BUT THAT WAS NOT COMPLIED WITH FULLY. H E HAS REFERRED THE NOTING ON THE SAID PAGE ABOUT REFUND OF RS.20 LACS ON 12/01/2009. HE HAS EXPLAINED IN HIS STATEMENT IN REPLY TO A QUESTI ON NO.31 WHICH WAS RECORDED ON 06/03/2009 THAT THE TRANSACTION WAS REL ATED TO AMPAD LAND. THE AMOUNT WAS RECEIVED IN ADVANCE FOR THE SALE OF LAND, HOWEVER, THE SALE COULD NOT BE MATERIALIZED. THE SAME IDENTICAL PAPER WAS SEIZED FROM THE LOCKER AND IN THAT PAPER AS WELL THE FACT OF RE PAYMENT HAD BEEN IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 21 - REFLECTED. THE SAID PROPERTY WAS SUBSEQUENTLY SOLD TO AN ANOTHER PARTY FOR AN AMOUNT OF RS.3.50 CRORE IN CASH. THE ASSE SSEE HAS INFORMED THAT THE CASH COMPONENT OF RS.3.50 CRORE SHALL BE DISCLO SED. BEFORE AO, FEW MORE FACTS HAVE BEEN NARRATED THAT THE TRANSACTION WAS ULTIMATELY COMPLETED IN A.Y. 2009-10 AND, THEREFORE, THE ON-M ONEY IS TO BE TAXED ALONG WITH THE SAID AMOUNT OF SALE TRANSACTION. IT WAS INFORMED THAT THE TRANSFER OF AMPAD LAND WAS AFFECTED IN THE RELEVANT A.Y.2009-10. HOWEVER, THE AO WAS NOT CONVINCED AND HE HAS HELD T HAT THE SUM WHICH WAS FOUND NOTED IN A PARTICULAR FINANCIAL YEAR SHOU LD BE ASSESSED AS UNDISCLOSED INCOME IN THAT VERY FINANCIAL YEAR. IN THE RESULT, AN AMOUNT OF RS.1,46,66,667/- WAS TAXED AS INCOME FOR THE YE AR UNDER CONSIDERATION IN RESPECT OF AMPAD LAND. BEING AGGRIEVED, THE MAT TER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 15. AFTER HEARING THE SUBMISSION, LD.CIT(A) HAS NOT ED THAT THE ENTIRE AMOUNT OF RS.524.17 LACS WAS DISCLOSED BY THE ASSES SEE ALONGWITH OTHER CO-OWNERS IN A.Y. 2009-10 AS A SHORT-TERM CAPITAL GAIN. LD.CIT(A) HAS NOTED CERTAIN FACTS AS UNDER:- 10.1. IT IS A FACT THAT THE ENTIRE AMOUNT OF RS.52 4.17 LAKHS HAS BEEN DISCLOSED BY THE APPELLANT AND OTHER CO-OWNERS IN AY 2009- 10 AS SHORT TERM CAPITAL GAINS. THE AO HAS TAXED THE ABOVE AMOUNT IN THE HANDS OF EACH OF THE OWNERS INCLUDING THE APPELLANT BY MAKING AN ADDITION OF RS.1,46,66,667/- IN AY 20 07-08 & AND RS.28,05,666/- IN AY 2008-09 RESPECTIVELY BY INVOK ING PROVISIONS OF SECTION 68 OF THE ACT BY HOLDING THAT THE RECEIP TS HAVE TO BE TAXED IN ASSESSMENT YEARS RELEVANT TO FINANCIAL YEA RS IN WHICH THEY WERE RECEIVED. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 22 - 10.2. IT IS ALSO AN UNDISPUTED FACT THAT THE SAID AMPAD LAND WAS SUBSEQUENTLY SOLD IN AY 2009-10 TO VARIOUS PARTIES FOR A CONSIDERATION OF RS.1,80,99,916/- ON WHICH SHORT TE RM CAPITAL GAINS HAS BEEN OFFERED TO TAX IN AY 2009-10 INCLUD ING THE UNDISCLOSED AMOUNT OF RS.1,74,72,333/- IN THE HANDS OF THE APPELLANT. THUS, THE SAME AMOUNT IN RESPECT OF AMP AD LAND HAS BEEN DISCLOSED BY THE APPELLANT IN AY 2009-10 PERTA INING TO THE YEAR IN WHICH TRANSFER / SALE OF THE LAND TOOK PLAC E WHEREAS THE ADDITION HAS BEEN MADE BY THE AO IN AY 2007-08 / AY 2008-09. THUS, THIS IS DEFINITELY A CASE OF DOUBLE TAXATION OF THE SAME INCOME IN DIFFERENT ASSESSMENT YEARS. 15.1. LD.CIT(A) HAS MENTIONED THE STATEMENT RECORDE D U/S.132(4) OF THE IT ACT AND OPINED THAT THROUGH THE SAID STATEMENT I T WAS CLEARLY ESTABLISHED THAT THE SAID AMOUNT OF RS.524.17 LACS WAS RECEIVED IN RESPECT OF AMPAD LAND FROM MR.KANUBHAI PATEL ON VARIOUS DAT ES FALLING WITHIN THE AYS 2007-08 & 2008-09, HOWEVER, THAT COULD NOT BE MATERIALISED AND THE AMOUNT WAS RETURNED TO SAID MR.KANUBHAI PATEL I N AY 2009-10, THAT TOO ALONG WITH INTEREST OF RS.18 LACS. LD.CIT(A) HA S THEREFORE AGREED THAT THE IMPUGNED AMOUNT WAS NOT REQUIRED TO BE TAXED IN AYS 2007-08 AND 2008-09. BEING AGGRIEVED, NOW THE REVENUE IS BEF ORE US. 16. FROM THE SIDE OF THE REVENUE, LD.DR HAS ARGUED THAT A DOCUMENT WAS RECOVERED FROM THE POSSESSION OF THE ASSESSEE A ND ON THE BASIS OF THAT DOCUMENT, IT WAS CLEAR THAT THE ASSESSEE HAS R ECEIVED ON-MONEY ON THE SAID SALE TRANSACTION. IT WAS NOT A QUESTION O F DOUBLE ASSESSMENT OF THE SAME INCOME BECAUSE AS PER THE DOCUMENTS RECOVE RED THE TWO TRANSACTIONS WERE SEPARATELY RECORDED. HE HAS CON CLUDED THAT THE AO HAS RIGHTLY TAXED THE SAID TWO AMOUNTS RESPECTIVEL Y IN TWO ASSESSMENT YEARS. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 23 - 17. WE HAVE EXAMINED THE FACTS OF THE CASE AND THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION P LACED ON RECORD. A DOCUMENT WAS SEIZED WHICH HAS INDICATED A CASH RECE IPT OF RS.524.17 LACS WHICH WAS STATED TO BE IN RESPECT OF TRANSFER OF AMPAD LAND. THE TRANSACTIONS WHICH WERE FOUND RECORDED IN THE SAID SEIZED DOCUMENT HAVE MENTIONED THE NAME OF ONE MR.KANUBHAI PATEL. THE AO HAS ADDED THE AMOUNT WHICH WAS ALLEGED TO BE ASSESS ED FOR AY 2007-08 AND PART OF IT, RESPECTIVELY FOR AY 2008-09. BUT O NE OF THE FACT WHICH HAS A DIRECT ADVERSE IMPACT ON THE STAND TAKEN BY T HE AO WAS THAT IN A STATEMENT RECORDED U/S.132(4) OF IT ACT DATED 12/02 /1999, I.E. DURING THE SEARCH OPERATION, CLARIFIED THE POSITION OF CAPITAL GAIN WHICH WAS DISCLOSED IN AY 2009-10. AS FAR AS THE QUANTUM OF THE AMOUNT IS CONCERNED, THERE WAS NO DISPUTE. THE ONLY DISPUTE IS THUS ABOUT THE YEAR OF TAXABILITY. THE ADMITTED FACTUAL POSITION IS THAT THE ENTIRE AMOUNT OF RS.524.17 LACS WAS SHOWN AS UNDISCLOSED I NCOME IN AY 2009- 10. HOWEVER, THE AO WAS NOT SATISFIED AND TAXED THE SAME IN TWO ASSESSMENT YEARS PROPORTIONATELY, I.E. AYS 2007-08 & 2008-09. THE SALIENT FEATURES FAVOURING ASSESSEE, SUBMITTED BEFO RE US, ARE AS UNDER:- A. THE LAND UNDER CONSIDERATION BELONGED TO SHRI KRUPESHBHAI N.PATEL, SHRI NAVINBHAI N.PATEL AND SMT.VARSHABEN S .PATEL B. THE LAND WAS PURCHASED IN A.Y. 2007-08 AND WAS SOLD IN AY 2009-10. THE APPELLANT HAD FILED THE COPIES OF PUR CHASE DEED AND ALSO THE SALE DEEDS BEFORE THE AO FOR EFFECTING TH E PURCHASES AND SALES. NO DISCREPANCY WAS FOUND BY THE AO IN THES E DOCUMENTS. C. THE LAND WAS SOLD AS AGRICULTURAL LAND AND THE RESULTANT GAIN WAS OFFERED TO TAX IN AY 2009-10. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 24 - D. SINCE THE ACTUAL EXECUTION OF THE SALE DEED AND PARTING OF THE POSSESSION OF LAND TOOK PLACE DURING AY 2009-10, TH E SAME HAS BEEN TREATED AS SALES IN AY 2009-10 AND THE GAINS ARISING THEREFROM WERE TREATED AS INCOME FOR AY 2009-10. E. REGARDING THE TRANSACTION MADE WITH MR.KANUBHAI PATEL, IT IS SUBMITTED THAT MR.KANUBHAI PATEL FROM SURAT HAD APP ROACHED THE APPELLANT IN A PROPERTY FAIR AND HAD EXPRESSED HIS WILLINGNESS TO PURCHASE THE AFORESAID AMPAD LAND AND ACCORDINGLY H AD PAID AN AMOUNT OF RS.524.17 LACS IN CASH ON VARIOUS DATES. F. MR.KANUBHAI PATEL WAS NOT CLOSELY KNOWN TO THE APPELLANT. AS MR.KANUBHAI PATEL FAILED TO CONVERT THE LAND FROM A GRICULTURAL LAND INTO NON-AGRICULTURAL LAND THE TRANSACTION WAS CANCELLED AND THE AMOUNT RECEIVED FROM HIM WAS RETURNED BACK. G. IT MAY BE MENTIONED THAT SEIZED MATERIAL PAGE 1 OF ANNEXURE A-1 ITSELF SHOWS THAT THE AMOUNT HAD BEEN PAID BACK ALONG WITH INTEREST OF RS.18.00 LACS (REFER PAGE 77). H. THE FACT THAT THE AMOUNT WAS PAID BACK IS DULY REFLECTED IN THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH B Y THE DEPARTMENT. THEREFORE IT IS PROVED BEYOND DOUBT TH AT THE AMOUNT WAS ACTUALLY PAID BACK. I. AS PER LAW SINCE THE TRANSACTION DID NOT MATERI ALIZE THE SAME CANNOT BE TREATED AS INCOME OF THE APPELLANT. HOWE VER, TO COVER UP THE DISCREPANCY THE APPELLANT HAD DECLARED THE S AID SUM AS INCOME. J. THE ADVANCES FROM MR.KANUBHAI PATEL WERE RECEIV ED IN AY 2007-08 AND AY 2008-09 WHEREAS THE MONEY WAS REFUN DED TO HIM IN THE SUBSEQUENT YEAR. 17.1. IN THE LIGHT OF THE ABOVE DISCUSSED FACTUAL M ATRIX, WE FIND NO REASON TO REVERSE THE FINDINGS OF LD.CIT(A) BECAUSE IN A WORST SITUATION IF WE AFFIRM THE ACTION OF THE AO, THEN THE NATURAL CO NSEQUENCES SHOULD BE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 25 - TO ADJUST THE INCOME WHICH HAS ALREADY BEEN TAXED A GAINST THE ADDITION MADE FOR THE YEAR UNDER CONSIDERATION. SINCE DOUBL E TAXATION IS NOT PERMITTED AND THE EXERCISE OF REVISION OF INCOME FO R THE YEAR UNDER CONSIDERATION SHALL BE A FUTILE EXERCISE, THEREFORE WE HEREBY HOLD THAT THE IMPUGNED INCOME DESERVES TO BE EXCLUDED FROM THE TO TAL INCOME FOR THE YEAR UNDER CONSIDERATION. RESULTANTLY, WE HOLD ACC ORDINGLY AND THIS GROUND OF THE REVENUE IS DISMISSED. (D) A.Y.2007-08 CO NO. 12/AHD/2012 (BY ASSESSEE) 18. GROUND READ AS UNDER:- 1. WITHOUT PREJUDICE AND WITHOUT ADMITTING THAT NO ADDITION CAN BE MADE IN AY 2007-08 IN RESPECT OF INCOME FROM SA LE OF AMPAD LAND, THE AO MAY BE DIRECTED TO GRANT CONSEQUENTIAL RELIEF IN AY 2009-10, IN CASE, ADDITION OF RS.1,46,66,667/- IS CONFIRMED IN AY 07-08. 18.1. A VIEW HAS ALREADY BEEN TAKEN WHILE DECIDING HEREINABOVE THE REVENUES APPEAL, THEREFORE THIS CROSS OBJECTION HA S BECOME INFRUCTUOUS, HENCE DISMISSED. (E) A.Y.2008-09 IT(SS)A NO. 592/AHD/2011 (ASSESSEE S APPEAL) 19. GROUNDS RAISED ARE AS FOLLOWS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-IV, AHMEDABAD [THE CIT(A)] ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE 1, BARODA [THE AO'] IN NOT RESTRICTING TH E ASSESSMENT / ADDITIONS BASED ON THE MATERIAL FOUND DURING THE CO URSE OF SEARCH. 2. THE LEARNED AO ERRED IN FACT AND IN LAW IN GIV ING ADVERSE REMARKS IN RESPECT OF THE GIFT RECEIVED IN THE FORM OF SHARES. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 26 - 19.1 THESE GROUNDS ARE GENERAL IN NATURE AND ONE OF THE GROUND, I.E. GROUND NO.2 HAS NOT RAISED THE GRIEVANCE FROM THE O RDER OF THE CIT(A), BUT ON THE FACE OF IT, A GRIEVANCE HAS BEEN RAISED BY THE ASSESSEE ABOUT A COMMENT/REMARK OF THE AO. THIS GROUND THEREFORE DO NOT SURVIVE BEFORE US. REST OF THE GROUNDS ARE EITHER IN RESPECT OF C HARGING OF INTEREST U/S.234B OF IT ACT OR LEVY OF PENALTY, HENCE EITHER PRE-MATURE OR CONSEQUENTIAL IN NATURE, THEREFORE INFRUCTUOUS. RE SULTANTLY, THIS APPEAL IS DISMISSED AS INFRUCTUOUS. (F) A.Y.2008-09 IT(SS)A NO. 595/AHD/2011 (REVENUES APPEAL) 20. GROUNDS ARE REPRODUCED BELOW:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS.28,05,66 6/- (RS.28,05,666 IN THE CASE OF SHRI NAVINBHAI N.PATEL) ON ACCOUNT OF SALE OF AMPAD LAND ON THE BASIS OF SEIZED PAPERS. 2. THE LD. CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING THE ADDITION OF RS.65,83,830/- (RS.1,69,27,845 IN THE CASE OF SHRI NAVINBHAI N.PATEL) ON ACCOUNT OF GIFT RECEIVED IN KIND. 20.1. AS FAR AS GROUND NO.1 IS CONCERNED, A VIEW HAS ALREADY BEEN TAKEN HEREINABOVE, THEREFORE, FOLLOWING THE SAME THIS GRO UND OF THE REVENUE IS HEREBY DISMISSED. 21. APROPOS TO GROUND NO2, IT WAS NOTED BY THE A O VIDE ORDER U/S.153A R.W.S.143(3) DATED 23/12/2010 THAT THE ASS ESSEE HAD SHOWN A GIFT IN KIND OF EQUITY SHARES OF SUN PHARMACEUTICAL INDUSTRIES. IT WAS NOTED THAT THROUGH A DECLARATION OF GIFT-DEED DATED 07/02/2008 AND IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 27 - 17/03/2008 RESPECTIVELY 3400 SHARES AND 2300 SHARES WERE GIFTED. ACCORDING TO AO, THE DONOR NAMELY, SHRI JAYANT SANG HAVI IS NOT RELATED TO THE ASSESSEE. THE AO HAS NOTED THE MARKET VALUE OF THE SHARES WAS AT RS.65,83,830/-. THE ASSESSEE HAS PRODUCED THE GI FT-DEEDS AND OTHER EVIDENCES BUT ACCORDING TO AO THOSE WERE NOT THE CO NCLUSIVE EVIDENCES. FINALLY, THE VALUE OF THE GIFTED SHARES OF RS.65,83 ,830/- WAS TAXED. 22. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLA TE AUTHORITY, WHO HAS HELD THAT THE SAID ADDITION BEING MADE ON ACCOUNT O F NON-GENUINENESS OF THE GIFTS WAS NOTHING BUT PART OF THE TOTAL CONSIDE RATION IN RESPECT OF THE GOTRI LAND, HENCE TO BE TAXED IN THE YEAR OF TRANSA CTION AND THE IMPUGNED AMOUNT WAS DELETED. 23. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES , WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS CONNECTED THE IMPUG NED GIFT WITH THE SALE OF GOTRI LAND AND THAT ISSUE IS YET TO BE DECI DED IN AY 2009-10, THEREFORE THE LD.CIT(A) HAS RIGHTLY HELD THAT THE G IFT BEING TRANSFERRED IN KIND HENCE NOT TO BE TAXED FOR THE YEAR UNDER CONS IDERATION. WE HEREBY AFFIRM THE FACTUAL AS WELL AS THE LEGAL FIND ING OF THE CIT(A), HENCE THIS GROUND OF THE REVENUE IS HEREBY DISMISSED AND APPEAL IS DISMISSED. (G) A.Y.2008-09 CO NO. 13/AHD/2012 (BY ASSESSEE) 24. GROUNDS READ AS UNDER: 1. WITHOUT PREJUDICE AND WITHOUT ADMITTING THAT NO ADDITION CAN BE MADE IN AY 2008-09 IN RESPECT OF INCOME FROM SA LE OF AMPAD LAND, THE AO MAY BE DIRECTED TO GRANT CONSEQUENTIAL RELIEF IN AY IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 28 - 2009-10 IN CASE ADDITION OF RS.28,05,666/- IS CONFI RMED IN AY 08- 09. 2. WITHOUT PREJUDICE TO GROUNDS 3 AND 4 OF AY 200 9-10, IN CASE, THE ADDITION OF GIFT OF RS.65,83,830/- (RS.1,69,27 ,845 IN THE CASE OF SHRI NAVINBHAI N.PATEL) IS CONFIRMED IN 2008-09, THE AO MAY BE DIRECTED TO GRANT CONSEQUENTIAL RELIEF IN THE AY 2009-10. 24.1. THE CROSS-OBJECTOR VIDE ABOVE TWO GROUNDS HAS SIMPLY ASKED TO GIVE CONSEQUENTIAL DIRECTION. AT PRESENT, FOR THE ASSTT. YEAR UNDER CONSIDERATION, THE CONSEQUENTIAL DIRECTION AS SUGGE STED IS NOT REQUIRED, HENCE THESE TWO GROUNDS OF THE CROSS-OBJECTION HAVE BECOME REDUNDANT, THEREFORE DISMISSED. RESULTANTLY, CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. (H) A.Y.2009-10 IT(SS)A NO. 593/AHD/2011 (ASSESSEE S APPEAL) 25. GROUNDS ARE REPRODUCED BELOW:- 1. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN NOT RESTRICTING THE ASSESSMENT / ADDITION BASED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN HOLDING THAT THE SALE CONSIDERATION OF THE GOTRI LAND IS RS.22.61 CRORES INSTEAD OF CLAIM OF THE APPELLANT THAT THE SALE CONSIDERATION IS RS.13.62 CRORES [RS.10.62 CRORES AS PER BOOKS + RS.3.00 CRORES DECLARED DURING SEARCH] AND MAKING CONSEQUENTIAL ADDITION OF RS.4,49,50,000, BEING SHA RE OF THE APPELLANT IN THE INCOME. 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN HOLDING THAT THE TOTAL VALUE OF GIFT RECEIVED IN KIND BY THE FAMILY MEMBERS INCLUDING THE APPELLANT AMOUNTING TO RS.4.70 CRORES IS REQUIRED TO BE TAXED IN THE HANDS OF THE APPELLANT AND SHRI NAV INBHAI N PATEL ON SUBSTANTIVE BASIS ON THE GROUND THAT THE GIFT RE CEIVED BY THE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 29 - APPELLANT INCLUDING OTHER FAMILY MEMBERS REPRESENT PART OF SALE CONSIDERATION OF GOTRI LAND AND THEREBY CONFIRMING THE ADDITION TO THE EXTENT OF RS.2.35 CRORES IN THE CASE OF THE APP ELLANT [EQUAL AMOUNT IS ADDED IN THE CASE OF SHRI NAVINBHAI N PAT EL MAKING TOTAL ADDITION OF RS.4.70 CORRES]. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE TRANSACTION OF GIFT IS AN INDEPENDENT TRANSACTION AND NOT RELATED TO THE TRANSACTION OF SALE OF GOTRI LAND. 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF GIFT OF RS.65,83,830 (RS.1,69,27,845 IN THE CASE OF SHRI NAVINBHAI N.PATEL ) IN THE CURRENT YEAR (AY 2009-10). 6. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN TREATING THE TRANSACTION OF GIFT RECEIVED BY VARIOUS FAMILY MEMB ERS AS TAXABLE IN THE HANDS OF THE APPELLANT DESPITE THE FACT THAT THE TRANSACTION OF GIFT AND SALE OF GOTRI LAND ARE INDEPENDENT TRANSAC TION. 7. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CHARGING INTEREST U/S.234B OF THE ACT. 8. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CHARGING INTEREST U/S.234C OF THE ACT. 9. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN INITIATING PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. 25.1. GROUND NO.1 IS GENERAL IN NATURE THUS REQUIR ES NO INDEPENDENT ADJUDICATION, HENCE DISMISSED. 26. APROPOS TO GROUND NO.2, FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 30 - 23/12/2010 ARE THAT THE ASSESSEE ALONG WITH ONE SH RI NAVIN PATEL IS THE OWNER OF GOTRI LAND, BOTH HAVING EQUAL SHARES. I T WAS NOTED THAT THE SAID LAND WAS SOLD TO SMT.VISHAKHA SANGHAVI. THE CO NSIDERATION WAS STATED TO BE RS.10.62 CRORES. THE REVENUE DEPARTM ENT CONSEQUENT UPON THE SEARCH HAS UNEARTHED TWO LOOSE PAPERS , ONE FROM THE BANK LOCKER, AND THE OTHER FROM THE OFFICE. DUE TO THE SAID SEI ZED DOCUMENT, THE ASSESSEE HAS DISCLOSED A SUM OF RS.3CRORES RECEIVED IN CASH. THE AO HAS SCANNED AND PRINTED THOSE DOCUMENTS IN THE ASSE SSMENT ORDER ITSELF AND MARKED AS ANNEXURE BS-1 AND ANNEXURE AS-1. THES E PAGES HAVE BEEN SCRUTINIZED BY THE AO AND HE HAS NOTED THAT TH ERE WAS A NOTING OF TWO FIGURES, I.E. RS.22.61 CRORES AND RS.14.75 CROR ES. HE HAS ALSO NOTED THAT THOSE TRANSACTIONS, AS RECORDED IN THOSE SEIZE D DOCUMENTS, WAS RELATED TO THE SALE OF GOTRI LAND. THE ASSESSEES STAND SINCE INCEPTION WAS THAT THE AMOUNTS RECORDED AND THE DATES MENTION ED WAS ONLY AN OFFER FOR THE PURCHASE OF GOTRI LAND. THE ASSESSEE HAS EXPLAINED THAT SEVERAL OFFERS WERE INVITED CONSIDERING THE CONVERS ION OF LAND EITHER FROM AGRICULTURE TO NON-AGRICULTURE OR NON-AGRICULTURE T O COMMERCIAL PURPOSE. IT WAS STATED THAT THERE WAS A PROPOSAL FROM A BROK ER FOR THE PURCHASE OF THE SAID AGRICULTURAL LAND IF CONVERTED FOR RESIDE NTIAL USE. IT WAS EXPLAINED THAT THE CONVERSION WAS DIFFICULT WITHIN THE PROPOSED SHORT TIME, THEREFORE IT WAS DECIDED TO SALE THE AGRICULT URAL LAND AS IT WAS. FROM THE SIDE OF THE ASSESSEE IN SUPPORT OF THE SAI D CONTENTION AN AFFIDAVIT OF ONE SHRI RASIK PADARIA, BROKER, DATED 08/03/2010 WAS FILED. IN THE SAID AFFIDAVIT, HE HAS DEPOSED THAT THE SAID OFFERS WERE MADE BY HIM IN RESPECT OF GOTRI LAND. ACCORDING TO AO , IT WAS NOTHING BUT A MAKE BELIEVE STORY. IN HIS OPINION, THERE WAS NO E VIDENCE THAT THE DOCUMENTS WERE MERELY AN OFFER BY SHRI RASIK PADARI A. THE NOTINGS IN IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 31 - THE SAID DOCUMENTS HAD CLEARLY MENTIONED THE CASH C OMPONENT AND THE CHEQUE COMPONENT. AS PER AO, THE CHEQUE COMPONENT WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, AS EVIDENT FROM THE COPY OF ACCOUNT OF SMT.VISHAKHA SANGHAVI, PURCHASER OF GOTRI LAND. ACCORDING TO AO, THE SIMULTANEOUS TRANSACTION OF UN ACCOUNTED MONEY, THAT TOO RECORDED ON THOSE LOOSE-PAPERS, HAD TO BE BELIEVED. THE AO HAS NOTED THAT IN BOTH THE PAGES THE AREA OF LAND WAS M ENTIONED AS 4,51,419 SQUARE FEET AND THE RATE MENTIONED HAS TWO COMPONEN TS, I.E. RS.250/- PER SQUARE FOOT IN CHEQUE AND RS.251/- PER SQ.FT IN CA SH. AO HAS ALSO NOTED THAT THE DATES OF RECEIPTS AS APPEARING IN THE SAID LOOSE-PAPERS WERE BEYOND DOUBT, THEREFORE THE COMPONENT OF CASH WAS C ORRECT AND THE TRANSACTION WAS NOT MERELY AN OFFER BUT ACTUALLY TA KEN PLACE ON SALE OF GOTRI LAND. THE AO HAS RAISED A SUSPICION THAT W HY THAT LOOSE-PAPER WAS KEPT IN A BANK LOCKER ? THE ASSESSEE HAS ADMI TTED THE COMPONENT OF CASH MONEY OF RS.3 CRORES WHICH CLEARLY LEAD TO THE CONCLUSION THAT THE TRANSACTION OF THE GOTRI LAND WAS MADE FOR A SUM OF RS.22.61 CRORES AND NOT ON THE DOCUMENTED SALE PRICE OF RS.10.62 CRORES , EXPRESSED BY THE A.O. HE HAS CONCLUDED THAT AFTER THE SET OFF OF A DMITTED AMOUNT OF RS.3 CRORES, THE BALANCE RS.4,49,50,000/- WAS THE SHORT- TERM CAPITAL GAIN TO BE TAXED IN THE HANDS OF THE ASSESSEE. 26.1. IN ADDITION TO THE ABOVE DISCUSSION , IT HAS ALSO BEEN NOTED BY THE AO THAT THE FAMILY MEMBERS OF THE SAID ASSESSEE HAVE RECEIVED SHARES AS A GIFT OF M/S.SUN PHARMACEUTICAL INDUSTRIES LTD. ACCORDING TO AO, SPOUSE OF MRS. VISHAKHA SANGHAVI, PURCHASER OF THE LAND, HAS GIFTED THE SHARES. THE VALUE OF ALL THE SHARES GIFTED WAS FO UND TO BE RS.4.70 CRORES. THE AO HAS TREATED THOSE GIFTS AS NOT GENUINE. AS PER AO, THE IMPUGNED GIFTS WERE PART OF THE ON-MONEY CONSIDERATION. A CCORDINGLY THE TOTAL IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 32 - PAYMENT OF ON-MONEY RECEIVED BY THE OWNERS OF THIS LAND OTHER THAN CONSIDERATION IN THE FORM OF GIFT IS RS.4.29 CRORES [22.61 CRORES 13.62 CRORES 4.7 CRORES]. ACCORDINGLY, RS.2,14,50,000/ - IS ADDED IN THE CASE OF SHRI KRUPESH PATEL AND RS.2,14,50,000/- IN THE CASE OF SHRI NAVIN PATEL IN AY 2009-10 BEING THE TWO WERE THE EQUAL CO - OWNERS OF THE LAND, AS SHORT TERM CAPITAL GAIN ON SUBSTANTIVE BASIS. SINCE THE OTHER MEMBERS OF THE FAMILY WHO HAVE RECEIVED THE GIFTS H AVE NOT ADMITTED THAT THE GIFTS ARE NOT GENUINE AND HAVE NOT OFFERED THE SAME TO TAX, THE BALANCE OF RS.2,35,00,000/- (ON ACCOUNT OF ADDITION OF RS.4 ,70,00,000/- MADE ON ACCOUNT OF GIFT AS DISCUSSED ABOVE) IS ADDED IN THE CASE OF SHRI KRUPESH PATEL AND RS.2,35,00,000/- IN THE CASE OF SHRI NAVI N PATEL IN AY 2009-10 BEING THE TWO WERE OWNERS OF THE LAND AS SHORT TERM CAPITAL GAIN ON PROTECTIVE BASIS. TO SUMP UP TOTAL AMOUNT OF RS.4,49,50,000/- IS AD DED IN THE CASE OF SHRI KRUPESH PATEL AND RS.4,49,50,00 0/- IN THE CASE OF SHRI NAVIN PATEL IN AY 2009-10 BEING THE TWO WERE OWNERS OF THE LAND AS SHORT TERM CAPITAL GAIN, AND OUT OF THE SAME RS.2,1 4,50,000/- EACH IS ADDED ON SUBSTANTIVE BASIS AND THE BALANCE OF RS.2, 35,00,000/- EACH IS ADDED ON PROTECTIVE BASIS. THUS, THE ADDITIONAL UN DISCLOSED INCOME AS SHORT TERM CAPITAL GAIN ON SALE OF GOTRI LAND WAS T AXED IN THE HANDS OF THE ASSESSEE AT RS.4,49,50,000/- BY THE A.O. BEING AGG RIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 27. THE ASSESSEE HAS REITERATED THAT THE SEIZED PAP ERS HAVE REFLECTED ONLY AN OFFER FOR PURCHASE OF LAND BY THE PROSPECTI VE BUYERS. AN AFFIDAVIT OF MR.RASIK PADARIA HAS ALSO BEEN REFERRE D. LD.CIT(A) HAS DESCRIBED THAT THE RELEVANT SEIZED PAPER HAD TWO CO LUMNS, ONE IS HAVING HEADING 250 RELATING TO THE CHEQUE PAYMENT IN RESP ECT OF THE GOTRI IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 33 - LAND. THE PAYMENT UNDER THE HEADING 250 HAD EXA CTLY TALLIED WITH THE AMOUNTS NOTED IN THE BOOKS OF ACCOUNT OF THE ASSESS EE. NEXT, ON THE OTHER COLUMN OF THE SAME SEIZED PAPER, THERE WAS A HEADING 251 WHICH RELATED TO THE CASH RECEIPTS IN RESPECT OF THE SAME LAND. THAT TOTAL AREA WAS 4,51,419 SQ.FT. AND THE CIT(A) HAS INTERPRETED THAT THE SALE CONSIDERATION WAS RS.250 PER SQ.FT. BY WAY OF CHEQU E AND RS.251/- PER SQ.FT. WAS IN CASH. ACCORDING TO LD.CIT(A) THERE WAS MENTION OF THE TOTAL SALE CONSIDERATION OF RS.22.61 CRORES. HE HA S CONCLUDED THAT ONCE THE ASSESSEE HAS ACCEPTED ONE PART OF THE DOCUMENT AND RECORDED THE RECEIPTS IN THE BOOKS OF ACCOUNTS WHICH WERE MADE T HROUGH CHEQUE, THEN THE OTHER PART OF THE SAME SEIZED DOCUMENT SHOULD A LSO BE ACCEPTED BY THE ASSESSEE AS TRUE AND CORRECT. HE HAS DRAWN A CONCLUSION THAT TAKING INTO ACCOUNT THE CHEQUE COMPONENT THE CORRESPONDING CASH COMPONENT SHOULD ALSO BE TAKEN INTO CONSIDERATION AND THE TOT AL SALE CONSIDERATION WAS HELD AS CORRECTLY TAXED IN THE HANDS OF THE ASS ESSEE. 27.1 LD.CIT(A) HAS ALSO EXAMINED THE ISSUE OF GIFTS RECEIVED FROM SHRI JAYANT SANGHAVI, HUSBAND OF SMT.VISHAKHA SANGH AVI, PURCHASER OF GOTRI LAND. THE VALUE OF THE SHARES WHICH WERE RE CEIVED BY THE ASSESSEE ALLEGEDLY AMOUNTED TO RS.4.70 CRORES. ACCORDING TO HIM, SHRI JAYANT SANGHAVI IS NOT RELATED TO ASSESSEE. THERE WAS NO OCCASION TO MAKE SUCH GIFT. THERE WAS NO OCCASION IN THE FAMILY FOR PRO MPTING THE DONOR TO MAKE A GIFT. THE ASSESSEES PLEA OF TAKING THE GI FT UNDER EXEMPTION BY VIRTUE OF SECTION 56(2) OF IT ACT, LD.CIT(A) HAS AL SO BEEN REJECTED ON THE SAME GROUND THAT THE GIFTS IN QUESTION WERE PART OF THE UNDISCLOSED SALE CONSIDERATION OF GOTRI LAND. HOWEVER, HE HAS OPIN ED THAT THE YEAR OF TRANSFER WAS AY 2009-10, THEREFORE TO BE TAXED IN T HE SAID YEAR AS PER SECTION 45(1) OF IT ACT. HE HAS CONCLUDED THAT TH E TOTAL GIFT AMOUNT OF IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 34 - RS.4.70 CRORES RECEIVED BY THE ASSESSEE AND HIS FAM ILY MEMBERS WAS TOWARDS UNDISCLOSED SALE CONSIDERATION. THE SAME W AS TAXED IN AY 2009-10 AMOUNTING TO RS.4.70 CRORES IN THE HANDS OF ASSESSEE AND SHRI NAVIN N.PATEL, I.E. RESPECTIVELY RS.2,35,00,000/- E ACH ON PROTECTIVE BASIS. THE RESULT OF THE SAID CONCLUSION WAS THAT AN ADDIT ION OF RS.65,83,830/- MADE IN AY 2008-09 BEING NON-GENUINE GIFT, WAS DIRE CTED NOT TO BE TAXED IN AY 2008-09. 28. FROM THE SIDE OF THE ASSESSEE, LD.AR MR. MILIN MEHTA APPEARED AND CONTESTED THAT THE REVENUE AUTHORITIES HAVE NOT CORRECTLY APPRECIATED A NOTING MADE ON THE SAID SEIZED DOCUMENT WHICH IS GOING TO SETTLE THE CONTROVERSY. THE SAID NOTING WAS WRITTEN BY MR.KRUPESH N.PATEL ADDRESSED TO MR.NAVIN N.PATEL AS PER DISCUSSION WITH THEM NONE OF THE ABOVE OPTION IS ACCEPTABLE. VARIATION IN PRICE IS ALSO EXPECTED. PLEASE DISCUSS... THIS NOTE ITSELF PROVES THAT CERTAIN OPTIONS WERE AVAILABLE BUT NONE OF THEM WAS ACCEPTABLE TO THEM. HE HAS EXPLAINED THAT THERE WERE THREE ALTERNATE OFFERS AND IN THE T RANSACTION A BROKER WAS INVOLVED. THE SAID BROKER, NAMELY, MR.RASIK PADAR IA HAS FURNISHED AN AFFIDAVIT AFFIRMING THAT THERE WERE FEW OFFERS ONLY AND NO TRANSACTION FACTUALLY TOOK PLACE. HE HAS EMPHASIZED THAT BAR RING THESE TWO SMALL PAPERS NOTHING WAS FOUND OR ANY OTHER DOCUMENT WAS RECOVERED FROM THE ASSESSEE THROUGH WHICH IT COULD BE PROVED THAT THE ASSESSEE HAD RECEIVED EXTRA CONSIDERATION IN RESPECT OF THE GOTRI LAND. THE SAID AMOUNT OF RS.3 CRORES WAS OFFERED MERELY TO CO-OPERATE WITH THE RE VENUE DEPARTMENT. AS FAR AS THE GIFT OF SHARES WAS CONCERNED, THERE W AS NO LINK OR CONNECTION WITH THE SALE OF GOTRI LAND. THERE WER E COPIES OF GIFT-DEEDS AND THE DONOR HAD CONFIRMED THAT THE GIFTS WERE MAD E OUT OF LOVE AND IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 35 - AFFECTION, THEREFORE GIFT TRANSACTION BEING AN INDE PENDENT TRANSACTION MUST NOT BE CONNECTED WITH THE SALE OF GOTRI LAND. 29. FROM THE SIDE OF THE REVENUE, LD.DR MR.KARTA R SINGH APPEARED AND REITERATED THE VIEW TAKEN BY THE AO AND CIT(A). INT ENSELY HE HAS PLEADED THAT THE ENTIRE UNRECORDED TRANSACTION WAS UNEARTHE D CONSEQUENT UPON THE SEARCH OPERATION THEREFORE THE STORIES CONCOCTED TH EREAFTER OUGHT TO BE REJECTED. 30. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTED THAT THE ASSESSEE HAS PURCHASED THE GOTRI LAND THROUGH N INE SALE-DEEDS DURING THE PERIOD OF 27 TH JULY-2004 TO 9 TH OF JANUARY-2008 FROM SEVERAL PERSONS FOR A TOTAL CONSIDERATION OF RS.1,64,49,955/-, AS P ER THE LIST ON PAGE 65 & 66 OF THE PAPER-BOOK. THE LAND WAS STATED TO BE P URCHASED BY SHRI KRUPESHBHAI N. PATEL AND SHRI NAVINBHAI N.PATEL. T HIS LAND WAS SOLD TO SMT.VISHAKHA J.SANGHAVI FOR A CONSIDERATION OF RS.1 0,70,70,000/- AS DOCUMENTED. FOR THIS SALE CONSIDERATION, RELEVANT DOCUMENTS WERE FOUND, THEREFORE, UPTO THAT EXTENT, THERE WAS NO CONTROVER SY. HOWEVER, AT THE TIME OF SEARCH TWO LOOSE PAPERS WERE SEIZED MARKED AS ANNEXURE BS-1 AND ANNEXURE A-1 RESPECTIVELY PAGE 3 & 4. IT WAS N OTED BY THE REVENUE DEPARTMENT THAT THE FIGURES NOTED ON THOSE PAPERS WAS IN RESPECT OF GOTRI LAND. THE ASSESSEES VEHEMENT CONTENTION IS THAT THE FIGURES NOTED IN THOSE PAPERS WAS NOTHING BUT CERTAIN PROPOSALS WHIC H WERE RECEIVED FROM A BROKER. IT HAS ALSO BEEN EXPLAINED THAT THE DIFF ERENT OFFER WAS ON ACCOUNT OF THREE SITUATIONS WHICH WERE CLAIMED TO B E CONNECTED WITH THE CONVERSION OF NON-AGRICULTURAL LAND EITHER FOR COMM ERCIAL PURPOSES OR FOR RESIDENTIAL PURPOSES. THOSE FIGURES WERE MERELY P ROPOSED FIGURES AND IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 36 - NOT THE ACTUAL DETAILS OF CONSIDERATION RECEIPT. FOR THIS SUBMISSION, OUR ATTENTION HAS BEEN DRAWN ON A NOTING ON PAGE NUMBER 4 (ANNEXURE A-1) WHICH WAS CLAIMED TO HAVE BEEN WRITTEN BY MR.KRUPES H N.PATEL ADDRESSED TO MR.NAVIN N.PATEL. THE WORDING OF THE SAID NOTING WERE AS PER DISCUSSION WITH THEM NONE OF THE ABOVE OPTION I S ACCEPTABLE. VARIATION IN PRICE IS ALSO EXPECTED. PLEASE DISCUS S . IN THE LIGHT OF THIS NOTING, WHICH WAS FOUND WRITTEN WHEN THE IMPUGNED L OOSE PAPER WAS SEIZED , IT IS INTENSELY ARGUED THAT THE VERY EXIST ENCE OF THIS COMMENT BY IT SELF PROVES THE TRUE CHARACTER OF THE LOOSE PAPE R I.E. IT WAS AN OFFER/ PROPOSAL SIMPLY QUOTING VARIOUS RATES FOR THE PURPO SE OF SALE OF THE SAID LAND. 31.1. IN RESPECT OF THE ABOVE NOTING, THE VEHEMENT CONTENTION OF THE ASSESSEE IS THAT THE SAID NOTING WAS FOUND AT THE T IME OF SEIZURE OF THE PAPER. THE PRESUMPTION IS THAT WHATEVER IS NOTED O N THE SEIZED DOCUMENT SHOULD BE CORRECT AND TRUTHFULLY STATE THE EXISTENC E OF THE FACT OR OCCURRENCE OF AN EVENT. THE THINKING BEHIND THIS PRESUMPTION IS THAT ANY SUCH NOTING IS MEANT FOR PERSONAL AS ALSO PRIVA TE READING/CONSUMPTION OF THE PERSON WHO HAS WRITTEN T HE PAPER. SUCH A NOTING MAY OR MAY NOT BE MEANT FOR DECLARATION, HEN CE IF NOT DECLARED, THEN THE INFORMATION IS TREATED AS A CONCEALED INFO RMATION. KEEPING THIS PRINCIPLE IN MIND, THE IT ACT HAS INCORPORATED SECT ION 132(4A) OF IT ACT WHICH READS AS FOLLOWS:- SEARCH AND SEIZURE SECTION 132.(4A) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY , BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH, IT MAY BE PRESUMED IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 37 - (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS T O SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III)THAT THE SIGNATURE AND EVERY OTHER PART OF SUC H BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSON S HANDWRITING, AND IN THE CASE OF A DOCUMENT, STAMPED, EXECUTED OR ATT ESTED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY W HOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. 31.2. THIS SECTION THUS SUPPORTS THE CONTENTION OF THE ASSESSEE THAT THE CONTENTS OF THE DOCUMENT SHOULD BE CONSIDERED AS TR UE AND CORRECT. TO BUTTRESS THIS LEGAL PROPOSITION, CASE LAW CAN BE R EFERRED IS CIT VS. SMS INVESTMENT CORP. 207 ITR 364 (RAJ.). THE NEXT PLAN K OF ARGUMENT IS THAT THE ENTIRE LAND WAS NOT CONVERTED INTO N.A. AND T HE LAND WHICH WAS FINALLY SOLD WAS AS UNDER:- LAND AFTER CONVERTING IT INTO NA 35817 SQ.MTRS. LAND WITHOUT CONVERTING IT TO NA 4450 SQ MTRS. DUE TO THIS VARIATION IN THE CONVERSION OF THE LAND , THE SALE CONSIDERATION WAS ACCORDINGLY SETTLED AS FINALLY DO CUMENTED. THE ASSESSEE HAS DEMONSTRATED THAT THE SAID NOTING HAS BEEN MADE WITH THAT REFERENCE BECAUSE THE PRICE OF THE LAND WAS TO BE N EGOTIATED ON THE BASIS OF THE CONVERSION OF THE AGRICULTURAL LAND. SINCE THE ENTIRE LAND COULD NOT BE CONVERTED, THEREFORE THE PRICE WHICH WAS QUOTED FOR TOTAL CONVERSION OF THE LAND WAS NOT FETCHED BY THE ASSESSEE. THE NOTING ON THOSE TWO PAPERS WAS THEREFORE WITH REFERENCE TO THE NEGOTIAT IONS AND THE PROPOSED OFFERS WERE MADE FROM THE BROKER KEEPING IN MIND TH E EVENTUALITY OF CONVERSION OF LAND. THE MAXIMUM PRICE OFFERED OF RS .22 CRORES BUT THAT WAS SUBJECT TO CONVERSION OF AGRICULTURAL LAND TO C OMMERCIAL USE. BUT THE FACT WAS THAT THE LAND WAS PARTLY CONVERTED INTO N. A. THERE WAS AN IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 38 - ALTERNATE OFFER IN CASE THE ENTIRE LAND IS NOT CONV ERTED. THAT ALTERNATE OFFER WAS ALSO NOTED IN ONE OF THE SAID TWO SEIZED PAPERS, I.E. RS.14.75 CRORES. SINCE THE CONDITION OF COMPLETE CONVERSION WAS NOT FULFILLED HENCE THE SALES WERE NOT EFFECTED ON THE SAID PROPO SED AMOUNTS. AS PER THE NOTINGS ON THOSE TWO PAPERS, THERE WAS A TIME L IMIT PRESCRIBED UPTO 31/05/2009. THERE WAS SOME OTHER TIME LIMITATION A ND HENCE, IT WAS DECIDED TO EXECUTE THE SALE FOR A SUM OF RS.10.70 C RORES. THE ASSESSEE HAS ACCEPTED THE SAID FIGURE OF RS.13.70 CRORES AS NOTED IN THE SAID LOOSE- PAPER. SINCE THE AMOUNT WHICH WAS DOCUMENTED WAS O NLY RS.10.70 CRORES, THEREFORE THE BALANCE OF RS.3 CRORES WAS OF FERED AND DISCLOSED BY THE ASSESSEE. THE ASSESSEE HAS THEREFORE PLEADED T HAT THE SAID OFFER BEING BASED UPON THE SEIZED MATERIAL SHOULD HAVE BEEN ACC EPTED BY THE REVENUE DEPARTMENT. FOR THIS LEGAL PROPOSITION TH AT IF AN OFFER IS DULY CORROBORATED BY AN EVIDENCE, THEN SUCH AN OFFER DES ERVES TO BE HELD AS CORRECT AND ACCEPTABLE TO THE EYES OF LAW, A CASE L AW CAN BE REFERRED, NAMELY PULLANGODE RUBBER PRODUCE CO. 91 ITR 18 WHEREIN THE LAW LAID DOWN WAS THAT IN THE CASE OF AN ADMISSION IT I S OPEN FOR THE DEPONENT TO SHOW THAT IT WAS BASED UPON AN EVIDENCE AND NOT MERELY A BALD OFFER. THEREFORE, AN OFFER SHOULD BE LED BY A CORROBORATIV E EVIDENCE AND IN THE PRESENT CASE THE SAID DIFFERENCE IN THE AMOUNT COUL D BE WITNESSED BY THE FIGURE MENTIONED IN ONE OF THE SEIZED PAPER. 31.3. THERE IS ONE MORE REASON GIVEN BY THE ASSES SEE TO ACCEPT THE SALE CONSIDERATION AT RS.13.70 CRORES (RS.10.70 CRORES DOCUMENTED SALE CONSIDERATION + RS.3 CRORES OFFERED AMOUNT) BECAUSE ON ENQUIRY, IT WAS FOUND THAT THE STAMP DUTY IS LEVIED FOR THAT AREA O N A LOWER PRICE OF SALE CONSIDERATION. THE ASSESSEE HAS THEREFORE CONTENDE D THAT THE SALE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 39 - CONSIDERATION NOW OFFERED OF RS.13.70 CRORES IS NOT ONLY ADEQUATE BUT ALSO HIGHER THAN THE SALE CONSIDERATION AS PREVAILE D DURING THAT PERIOD OF THAT LOCALITY. LD.AR HAS THUS ARGUED THAT THE TOT AL AMOUNT THUS DISCLOSED BY THE ASSESSEE HAS COMMENSURATED WITH THE OFFICIAL SALE RATE OF THAT LOCALITY. 31.4. OUR ATTENTION HAS ALSO BEEN DRAWN ON THOSE TW O LOOSE-PAPERS FOR THE PURPOSE THAT BOTH WERE UNSIGNED AND UNDATED BY THE PARTIES OF SALE, I.E. VENDOR AND VENDEE. THOSE PAPERS DID NOT SUGG EST EVEN REMOTELY THAT THE TRANSACTIONS RECORDED THEREIN WERE ACTUALLY EXE CUTED OR TAKEN PLACE AMONG THE PARTIES OR IN ANY MANNER AGREED UPON. THO SE LOOSE PAPERS DID NOT GIVE AN IMPRESSION THAT THE PARTIES HAVE WRITTE N THE FIGURES OF ON- MONEY FOR EACH OTHERS SATISFACTION OR EVEN IN CONFO RMITY OF AMOUNT MUTUALLY FIXED , BECAUSE THERE WAS NO SIGNATURES. IT WAS REPEATEDLY ARGUED THAT THE PAGES WERE NOTHING BUT AN OFFER AND THEREFORE ONE OF THE OFFER WAS FINALIZED KEEPING IN MIND THE NATURE OF T HE LAND SOLD. 31.5. BEFORE US, THERE IS A REFERENCE OF AN AFFIDAV IT EXECUTED BY ONE MR.RASIK PADARIA, BROKER. THE CONTENTS OF THE AFF IDAVIT DATED WERE THAT THE DEPONENT HAD AFFIRMED THAT HE HAS WORKED AS A B ROKER OF REAL ESTATE AND THAT HE HAS OFFERED THE PURCHASE OF LAND AT GOT RI AND THAT THE SAID OFFER WAS MADE TO SHRI K.N.PATEL & OTHERS ON BEHALF OF HIS CLIENTS. IN THE SAID AFFIDAVIT, HE HAS DEPOSED THAT SEVERAL OFF ERS FOR PURCHASE OF LAND WAS MADE WITH THE CONDITION OF CONVERSION OF AGRICU LTURAL LAND TO NON- AGRICULTURAL LAND EITHER FOR RESIDENTIAL PURPOSE OR FOR COMMERCIAL PURPOSE. DURING THE COURSE OF HEARING, A QUESTION HAS BEEN R AISED BY US THAT WHY THIS AFFIDAVIT BE NOT TREATED AS A SELF-SERVING DOC UMENT. IN REPLY, LD.AR IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 40 - HAS PLEADED THAT ALTHOUGH THE SAID AFFIDAVIT COULD BE TREATED AS A SELF- SERVING STATEMENT BUT SUCH AN ASSERTION THAT TO THR OUGH AN AFFIDAVIT SHOULD HAVE BEEN VERIFIED BY THE REVENUE DEPARTMENT , APPROPRIATELY CROSS-EXAMINING THE SAID DEPONENT. INDEED, THE REV ENUE DEPARTMENT HAS NOT CROSS-EXAMINED MR.RASIK PADARIA. 31.6. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE STAT EMENT RECORDED U/S.131 / 132(4) DATED 06/03/2009 WHEREIN VIDE QUES TION NO.24, THE REVENUE OFFICER HAS SHOWN THE SAID PAGE TO THE ASSE SSEE AND IN REPLY THE ASSESSEE HAS ANSWERED THAT THOSE PAPERS WERE IN RES PECT OF TWO PROPOSALS FOR GOTRI LAND. THE ASSESSEE HAS ALSO INFORMED THA T THE DEED COULD NOT BE MATERIALIZED. IT WAS ALSO INFORMED THAT WHEN THE S AID PAPER WAS RECOVERED FROM THE LOCKER, EVEN AT THAT TIME IT WAS STATED THAT THE ASSESSEE GOT PROPOSALS FROM THE PERSPECTIVE BUYERS IN RESPEC T OF GOTRI LAND. THE CHEQUES MENTIONED HAVE ALSO MATCHED WITH THE AMOUNT WHICH WAS FINALLY SETTLED, I.E. RS.10,70,70,000/-. 31.7. IN THE LIGHT OF THE ABOVE DISCUSSION AND THE CONTENTS OF THE PAPER, WE ARE OF THE VIEW THAT IN THE ABSENCE OF ANY DIREC T EVIDENCE ABOUT RECEIVING ON-MONEY, AS APPREHENDED BY THE REVENUE D EPARTMENT, SUCH LOOSE-PAPERS WERE MERELY IN THE NATURE OF AN OFFER WHICH WAS MADE TO THE ASSESSEE. FINALLY THE LAND WAS SOLD ON THE PRICE NE AR TO ONE OF SAID AMOUNT OF THE OFFER MADE BY ONE OF THE BUYER THROUG H A BROKER. THE DOCUMENT IS ALSO SUGGESTING THAT CERTAIN OPTIONS WE RE AVAILABLE TO THE ASSESSEE AND THOSE OPTIONS WERE NOT ACCEPTABLE. TH E ASSESSEE HAS NOTED ON THOSE PAPERS THAT VARIATION IN THE PRICE WAS EXP ECTED. SINCE THE SAID NOTING WAS FOUND IN EXISTENCE WHEN THE PAPER WAS SE IZED, SUCH A NOTING CANNOT BE IGNORED. THAT NOTING IS RATHER A PROOF W HICH SUPPORTS THE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 41 - CONTENTIONS OF THE ASSESSEE THAT THE FIGURES WERE N OTHING BUT CERTAIN OFFERS WHICH WERE MADE IN RESPECT OF THE GOTRI LAND . EVEN THE STATEMENTS WHICH WERE RECORDED BY THE REVENUE DEPARTMENT HAVE ALSO DEMONSTRATED THAT SINCE INCEPTION THE ASSESSEES STAND WAS THAT THE PURPOSE OF WRITING THREE FIGURES OR THREE RATES ITSELF HAS ESTABLISHED THAT THE OFFERS WERE MADE IN RESPECT OF THE SAME LAND. RATHER, THE CASE OF T HE ASSESSEE IS THAT THE THREE RATES CONCLUSIVELY SUGGEST THAT SOME NEGOTIAT ION HAS HAPPENED AND THAT NEGOTIATION WAS PERTAINING TO THE PRE-CONDITIO NS OF SALE. IT IS NOT THE CASE THAT ONLY ONE RATE WAS FOUND NOTED ON A PIECE OF PAPER SHOWING THE DOCUMENTED SALE CONSIDERATION ALONG WITH THE AMOUNT OF ON-MONEY. HAD IT BEEN A NOTING OF A SINGLE TRANSACTION, THE P RESUMPTION COULD BE IN FAVOUR OF THE REVENUE, BUT BY THE VERY PRESENCE OF THREE DATES ON THE SAID PAPER GIVES AN INDICATION THAT OUT OF THE THREE OFF ERED PRICE, ONE OF THEM WAS MATERIALIZED. NOW THE QUESTION IS THAT ON ONE HAND, THE REVENUE HAS PICKED-UP THE HIGHEST FIGURE OF THE THREE AND THE A SSESSEE HAS PICKED-UP THE FIGURE WHICH WAS DOCUMENTED PLUS THE DIFFERENCE OF RS.3 CRORES SO AS TO MATCH WITH ONE OF THE CITED FIGURES. WE THEREFO RE CONCLUDE THAT THE REVENUE DEPARTMENT SHOULD NOT HAVE DISPUTED THE OFF ER AS MADE BY THE ASSESSEE. RESULTANTLY, GROUND IS ALLOWED. 32. APROPOS TO GROUND NOS.3, 4, 5 & 6, FACTS IN BRI EF ARE THAT THE AO HAS NOTED THAT THE FAMILY MEMBERS OF THE ASSESSEE H AVE RECEIVED SHARES OF M/S.SUN PHARMACEUTICAL INDUSTRIES AS A GIFT AMOU NTING TO RS.4.70 CRORES. IT WAS FOUND THAT THOSE GIFTS WERE MADE B Y THE HUSBAND OF MRS.VISHAKHA SANGHAVI. THE AO HAS THUS HELD THAT THE GIFTS WERE IN LIEU OF THE UNACCOUNTED SALE CONSIDERATION, HENCE G IVEN A FINDING AS UNDER:- IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 42 - DURING THE ASSESSMENT PROCEEDINGS OF VARIOUS FAMIL Y MEMBERS OF THIS GROUP IT WAS FOUND THAT THEY HAVE RECEIVED GIF T OF SHARES OF M/S.SUN PHARMACEUTICAL INDUSTRIES LIMITED FROM THE SPOUSE OF THE PERSON TO WHOM THIS LAND HAS BEEN SOLD. THE VALUES OF SUCH GIFTS CUMULATIVELY IN THE HANDS OF THESE PERSONS WERE OF RS.4.70 CRORE. THESE GIFTS HAVE BEEN TREATED AS NOT GENUINE AND AD DITION OF THE SAME HAS BEEN MADE IN THE RESPECTIVE HANDS FOR DETA ILED REASONING MENTIONED THEREIN, AND IT HAS ALSO BEEN HELD THAT T HE SAID GIFTS ARE PART OF THE ON MONEY CONSIDERATION FOR SALE OF TH IS LAND. ACCORDINGLY THE TOTAL PAYMENT OF ON MONEY RECEIVED BY THE OWNERS OF THIS LAND OTHER THAN CONSIDERATION IN THE FORM O F GIFT IS RS.4.29 CRORES [22.61 CRORES 13.62 CRORES 4.7 CRORES]. ACCORDINGLY, RS.2,14,50,000/- IS ADDED IN THE CASE OF SHRI KRUPE SH PATEL AND RS.2,14,50,000/- IN THE CASE OF SHRI NAVIN PATEL IN AY 2009-10 BEING THE TWO WERE OWNERS OF THE LAND AS SHORT TERM CAPITAL GAIN ON SUBSTANTIVE BASIS. SINCE THE OTHER MEMBERS OF T HE FAMILY WHO HAVE RECEIVED THE GIFTS HAVE NOT ADMITTED THAT THE GIFTS ARE NOT GENUINE AND HAVE NOT OFFERED THE SAME TO TAX, THE B ALANCE OF RS.2,35,00,000/- (ON ACCOUNT OF ADDITION OF RS.4,70 ,00,000/- MADE ON ACCOUNT OF GIFT AS DISCUSSED ABOVE) IS ADDED IN THE CASE OF SHRI KRUPESH PATEL AND RS.2,35,00,000/- IN THE CASE OF S HRI NAVIN PATEL IN AY 2009-10 BEING THE TWO WERE OWNERS OF THE LAND AS SHORT TERM CAPITAL GAIN ON PROTECTIVE BASIS. TO SUMP UP TOTAL AMOUNT OF RS.4,49,50,000/- IS ADDED IN THE CASE OF SHRI KRUPE SH PATEL AND RS.4,49,50,000/- IN THE CASE OF SHRI NAVIN PATEL IN AY 2009-10 BEING THE TWO WERE OWNERS OF THE LAND AS SHORT TERM CAPITAL GAIN, AND OUT OF THE SAME RS.2,14,50,000/- EACH IS ADDED ON SUBSTANTIVE BASIS AND THE BALANCE OF RS.2,35,00,000/- EACH IS A DDED ON PROTECTIVE BASIS. BEING AGGRIEVED THE ASSESSEE IS BEFORE US. 33. LD.CIT(A) HAS NOTED THAT SHRI JAYANT SANGHAVI, DONOR, HUSBAND OF SMT. VISHAKA SANGHAVI (PURCHASER OF GOTRI LAND), HA D DONATED SHARES OF M/S.SUN PHARMACEUTICAL INDUSTRIES DURING THE PERIO D OF FEBRUARY/MARCH- 2008. AS PER LD.CIT(A), THE GOTRI LAND WAS SOLD IN APRIL-2008. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 43 - LD.CIT(A) HAS OPINED THAT SHRI JAYANT SANGHAVI WAS NOT RELATED TO THE ASSESSEE AND THERE WAS NO OCCASION FOR MAKING SUCH GIFTS. HE WAS OF THE VIEW THAT THE ACT OF RECEIVING GIFTS IN FEBRUARY/MA RCH-2008 AND AFTER ONE MONTH THE SALE OF GOTRI LAND WAS EFFECTED THEREFORE BOTH CAN BE SAID TO BE CONNECTED TRANSACTION AND NOT TOTALLY INDEPENDENT T RANSACTION. ACCORDING TO HIM, THE AO HAD RIGHTLY TAKEN INTO ACCOUNT THE S URROUNDING CIRCUMSTANCES AND HELD THAT THE GIFTS WERE NOT GENU INE. THE GIFT OF SHARES WAS IN FACT THE UNDISCLOSED SALE CONSIDERATI ON OF GOTRI LAND. HE HAS UPHELD THE VIEW OF THE AO THAT THE UNDISCLOSED SALE CONSIDERATION WAS RECEIVED IN THE FORM OF GIFT OF SHARES OF M/S.S UN PHARMACEUTICAL INDUSTRIES. HE HAS ALSO HELD THAT ONCE THE GIFTS WERE NOT GENUINE, THEREFORE WHETHER THEY WERE IN KIND AND NOT TAXABLE U/S.56(2) DID NOT MATTER. HOWEVER, HE HAS HELD THAT SINCE THE UNDIS CLOSED SALE CONSIDERATION IS CONNECTED WITH THE YEAR OF TRANSFE R, I.E. AY 2009-10, THEREFORE THE AMOUNT OF GIFT ALTHOUGH RECEIVED IN A Y 2008-09 BUT BEING PART OF THE SALE CONSIDERATION, THEREFORE HAS TO BE TAXED IN THE YEAR IN WHICH THE SALE TOOK PLACE, I.E. AY 2009-10. HE HAS THUS CONCLUDED THAT THE TOTAL GIFT AMOUNT OF RS.4,70,000/- IS TO BE TAX ED IN AY 2009-10 ON SUBSTANTIVE BASIS EQUALLY IN THE HANDS OF BOTH THE ABOVE TWO APPELLANTS. HE HAS GIVEN A DIRECTION THAT THE ADDITION OF RS.65 ,83,830/- TAXED IN AY 2008-09 IS TO BE DELETED. BEING AGGRIEVED, BOTH TH E SIDES ARE IN APPEAL(S) BEFORE US IN RESPECTIVE ASSESSMENT YEARS. 34. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PER USED THE DOCUMENTS RELATED TO THIS GROUND. WE HAVE FOUND TH AT ON 7/2/2008 & 17/3/2008, SHRI KRUPESHBHAI N.PATEL HAS RECEIVED 34 00 SHARES AND 2300 SHARES OF M/S.SUN PHARMACEUTICAL INDUSTRIES FROM SH RI JAYANT IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 44 - S.SANGHAVI. IN THIS REGARD, A DECLARATION OF GIFT IS ON RECORD. LIKEWISE, ON 7/2/2008 AND 17/3/2008 SHRI JAYANT S.SANGHAVI HA S RECEIVED RESPECTIVELY 8700 & 5950 NUMBER OF SHARES OF M/S.SU N PHARMACEUTICAL INDUSTRIES FROM SHRI JAYANT S.SANGHAVI. IT WAS N OT IN DISPUTE THAT SHRI JAYANT S.SANGHAVI IS THE HUSBAND OF SMT.VISHAKHA SA NGHAVI. FURTHER, IT IS ALSO NOT IN DISPUTE THAT MRS.VISHAKHA SANGHAVI P URCHASED GOTRI LAND IN APRIL-2008. HOWEVER, AS PER THE DETAILS OF THE SAL ES EXECUTED IN RESPECT OF GOTRI LAND, FURTHER WE HAVE NOTED THAT SEVERAL S ALE DOCUMENTS WERE EXECUTED DURING THE PERIOD STARTING FROM APRIL-2008 UPTO JULY-2008. WITH THIS BRIEF BACKGROUND, WE HAVE TO EXAMINE WHET HER THE SALE TRANSACTION OF GOTRI LAND HAD ANY CONNECTION WITH T HE GIFT OF SHARES. NOW THE QUESTION IS THAT WHETHER THE IMPUGNED GIFT IS TO BE LINKED WITH THE SALE CONSIDERATION WHICH WAS FINALLY OFFERED FO R TAX PURPOSE BY THE ASSESSEE. THE AO HAS LINKED THE SAME, SO THAT HE C AN ARRIVE AT THE FIGURE OF 22.70 CRORES BUT WE HAVE ALREADY HELD THAT THERE WAS NO EVIDENCE ON RECORD TO CONCLUSIVELY ESTABLISH THAT THE SAID AMOU NT WAS THE ACTUAL SALE CONSIDERATION, HENCE WE HAVE HELD THAT THE SALE CON SIDERATION WAS NOTHING BUT 10.70 CORRES PLUS THE AMOUNT OF CONSIDERATION O F RS.3 CRORES WHICH WAS OFFERED FOR TAX PURPOSE. ONCE WE HAVE ALREADY FIXED A SALE CONSIDERATION, THEREFORE THE REVENUES SUCH ALLEGAT ION IS HEREBY DISMISSED. BEFORE US, AN ANOTHER PLANK OF ARGUMEN T WAS THAT THE GIFT BEING IN THE FORM OF SHARES, THEREFORE THE GIFT HAS BEEN MADE IN KIND, HENCE NOT TO BE TAXED IN THE HANDS OF THE ASSESSEE. BUT THIS ARGUMENT HAS NO SUBSTANCE DUE TO THE REASON THAT IT HAD BECO ME REDUNDANT IN THE LIGHT OF THE VIEW TAKEN AND THE AO HAS ALSO NOT SEP ARATELY ASSESSED THE IMPUGNED GIFT IN THE HANDS OF THE ASSESSEE. WE THE REFORE LEAVE THIS ARGUMENT WITHOUT ADJUDICATION SINCE IT HAS BECOME R EDUNDANT. THE IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 45 - OUTCOME OF THE ABOVE DISCUSSION IS THAT SINCE IT WA S NOT A PART OF THE SALE CONSIDERATION, THEREFORE BARRING FOR THE YEAR UNDER CONSIDERATION, IT WAS NOT REQUIRED TO BE ADDED AND NOW THE PRESENT POSITI ON IS THAT THE IMPUGNED AMOUNT EVEN NOT TAXABLE IN THE HANDS OF TH E ASSESSEE. ALL THE GROUNDS THEREFORE STOOD ALLOWED. 34.1. THE ADDITIONAL GROUNDS RAISED IN THIS APPEAL READ AS UNDER:- 11. WITHOUT PREJUDICE AND WITHOUT ACCEPTING THE V ALIDITY OF THE ADDITION MADE ON ACCOUNT OF AMPAD LAND IN AY 07-08 AND AY 08- 09, THE AO MAY BE DIRECTED TO GRANT CONSEQUENTIAL R ELIEF OF RS.1,74,72,333/- IN AY 2009-10 12. WITHOUT PREJUDICE TO GROUND 4, 5 AND 6, THE L EARNED AO MAY BE DIRECTED TO GRANT CONSEQUENTIAL RELIEF IN AY 200 9-10, IN CASE ADDITION ON ACCOUNT OF GIFT IS CONFIRMED IN AY 2008 -09 IN THE HANDS OF THE APP AND IN THE HANDS OF VARIOUS FAMILY MEMBERS. 34.2. THE ADDITIONAL GROUND HAS ALREADY BEEN DEALT WITH WHILE DECIDING THE ISSUE OF AMPAD LAND AND THE QUESTION OF TAXABIL ITY OF GIFT. SINCE A VIEW HAS ALREADY BEEN TAKEN, THIS ALTERNATE PLEA OF THE ASSESSEE HAS BECOME REDUNDANT, THEREFORE NEEDS NO INDEPENDENT AD JUDICATION, HENCE DISMISSED. 35. WE SUMMARIZE THE RESULT AS UNDER (IN THE CASE OF SHRI KRUPESHBHAI N.PATEL):- (I) ASSESSEES APPEAL, IT(SS)A NO.590/AHD/2011, A. Y. 2006-07 IS PARTLY ALLOWED. (II) ASSESSEES APPEAL, IT(SS)A NO.591/AHD/2011, A. Y. 2007-08 IS PARTLY ALLOWED. (III)ASSESSEES APPEAL, IT(SS)A NO.592/AHD/2001, A. Y. 2008-09 IS DISMISSED. (IV) ASSESSEES APPEAL, IT(SS)A NO.593/AHD/2011, A. Y. 2009-10 IS PARTLY ALLOWED. (V) REVENUES APPEAL, IT(SS)A NO.594/AHD/2011, A.Y . 2007-08 IS DISMISSED. (VI) REVENUES APPEAL, IT(SS)A NO.595/AHD/2011, A.Y . 2008-09 IS DISMISSED. (VII) ASSESSEES CO NO.12/AHD/2012, A.Y. 2007-08 IS DISMISSED. (VIII)ASSESSEES CO NO.13/AHD/2012, A.Y. 2008-09 IS DISMISSED. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 46 - [B] APPEALS OF SHRI NAVINBHAI N. PATEL (I) A.Y.2006-07 IT(SS)A NO. 651/AHD/2011 (ASSESSEES APPEAL) 36. THIS IS AN APPEAL FILED BY THE ASSESSEE ARI SING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. 36.1. ALL THE GROUNDS ARE IDENTICAL IN VERBATIM AS WERE IN THE CASE OF SHRI KRUPESHBHAI N.PATEL IN IT(SS)A NO.590/AHD/2011 FOR A.Y. 2006- 07(SUPRA). THEREFORE, FOLLOWING THE FINDINGS CONTA INED IN THE CASE OF KRUPESHBHAI N.PATEL, THIS APPEAL IS PARTLY ALLOWED. (J) A.Y.2007-08 IT(SS)A NO. 616/AHD/2011 (ASSESSEES APPEAL) 37. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. 37.1. ALL THE GROUNDS ARE IDENTICAL IN VERBATIM A S WERE IN THE CASE OF SHRI KRUPESHBHAI N.PATEL IN IT(SS)A NO.591/AHD/2011 FOR A.Y.2007- 08(SUPRA). THEREFORE, FOLLOWING THE FINDINGS CONTA INED THEREIN, THIS APPEAL IS PARTLY ALLOWED. (K) A.Y.2007-08 IT(SS)A NO. 626/AHD/2011 (REVENUES APPEAL) 38. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 47 - 38.1 THE SOLE GROUND IN THIS APPEAL IS IDENTICAL IN VERBATIM AS WAS IN THE CASE OF ACIT VS. SHRI KRUPESHBHAI N.PATEL IN IT (SS)A NO.594/AHD/2011 FOR A.Y.2007-08(SUPRA). THEREFORE, FOLLOWING THE FINDINGS CONTAINED THEREIN, THIS APPEAL IS DISMISSE D. (L) A.Y.2007-08 CO NO. 20/AHD/2012 (BY ASSESSEE) 39. A VIEW HAS ALREADY BEEN TAKEN WHILE DECIDING HEREINABOVE THE REVENUES APPEAL, THEREFORE THIS CROSS OBJECTION HA S BECOME INFRUCTUOUS, HENCE DISMISSED. (M)A.Y.2008-09 IT(SS)A NO. 627/AHD/2011 (REVENUE S APPEAL) 40. THIS IS AN APPEAL FILED BY THE REVENUE ARI SING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. 40.1 BOTH GROUNDS IN THIS APPEAL ARE IDENTICAL I N VERBATIM AS WERE IN THE CASE OF ACIT VS. SHRI KRUPESHBHAI N.PATEL IN IT(SS) A NO.595/AHD/2011 FOR A.Y.2008-09 (SUPRA). THEREFORE, FOLLOWING THE FINDINGS CONTAINED THEREIN, THIS APPEAL IS DISMISSED. (N) A.Y.2008-09 CO NO. 21/AHD/2012 (BY ASSESSEE) 41. BOTH GROUNDS IN THIS CROSS-OBJECTION ARE IDEN TICAL IN VERBATIM AS WERE RAISED IN CO NO.13/AHD/2012 IN THE CASE OF SHR I KRUPESH NARHARI PATEL FOR A.Y. 2008-09 (SUPRA). IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 48 - 41.1. THE CROSS-OBJECTOR VIDE TWO GROUNDS HAS SIMP LY ASKED TO GIVE CONSEQUENTIAL DIRECTION. AT PRESENT, THE CONSEQUENT IAL DIRECTION AS SUGGESTED IS NOT REQUIRED, HENCE TWO GROUNDS OF TH E CROSS-OBJECTION HAVE BECOME REDUNDANT, THEREFORE DISMISSED. RESULTANTLY , CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. (O) A.Y.2008-09 IT(SS)A NO. 637/AHD/2011 (ASSESS EES APPEAL) 42. THIS IS AN APPEAL FILED BY THE ASSESSEE ARIS ING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. 42.1 GROUNDS IN THIS APPEAL ARE IDENTICAL IN VE RBATIM AS WERE IN THE CASE OF SHRI KRUPESHBHAI N.PATEL IN IT(SS)A NO.592/ AHD/2011 FOR A.Y.2008-09 (SUPRA). THEREFORE, FOLLOWING THE FIND INGS CONTAINED THEREIN, THIS APPEAL IS DISMISSED AS INFRUCTUOUS. (P) A.Y.2009-10 IT(SS)A NO.638/AHD/2011 (ASSESS EES APPEAL) 43. THIS IS AN APPEAL FILED BY THE ASSESSEE ARIS ING FROM THE ORDER OF THE LD.CIT(A)-IV, AHMEDABAD DATED 02.09.2011. 43.1 GROUNDS IN THIS APPEAL ARE IDENTICAL IN VERB ATIM AS WERE IN THE CASE OF SHRI KRUPESHBHAI N.PATEL IN IT(SS)A NO.593/AHD/2 011 FOR A.Y.2009- 10 (SUPRA). THEREFORE, FOLLOWING THE FINDINGS CONT AINED THEREIN, THIS APPEAL IS PARTLY ALLOWED. IT(SS)A NOS.590 TO 595/A/2011 & 651,616, 626,627,63 7, 638/AHD/11 CO NOS.12 & 13/AHD/12 & CO NOS 20&21/AHD/12 SHRI KRUPESHBHAI N.PATEL/SH.NAVINBHAI N.PATEL VS. DCIT ASST.YEARS 2006-07 TO 2009-10 - 49 - 44. WE SUMMARIZE THE RESULT AS UNDER (IN THE CAS E OF SHRI NAVINBHAI N.PATEL):- (I) ASSESSEES APPEAL, IT(SS)A NO.651/AHD/2011, A. Y. 2006-07 IS PARTLY ALLOWED. (II) ASSESSEES APPEAL, IT(SS)A NO.616/AHD/2011, A. Y. 2007-08 IS PARTLY ALLOWED. (III)ASSESSEES APPEAL, IT(SS)A NO.637/AHD/2001, A. Y. 2008-09 IS DISMISSED. (IV) ASSESSEES APPEAL, IT(SS)A NO.638/AHD/2011, A. Y. 2009-10 IS PARTLY ALLOWED. (V) REVENUES APPEAL, IT(SS)A NO.626/AHD/2011, A.Y . 2007-08 IS DISMISSED. (VI) REVENUES APPEAL, IT(SS)A NO.627/AHD/2011, A.Y . 2008-09 IS DISMISSED. (VII) ASSESSEES CO NO.20/AHD/2012, A.Y. 2007-08 IS DISMISSED. (VIII)ASSESSEES CO NO.21/AHD/2012, A.Y. 2008-09 IS DISMISSED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED JUNE / 29 /2012 ..%, .%../ T.C. NAIR, SR. PS ', ' -. /'.+ ', ' -. /'.+ ', ' -. /'.+ ', ' -. /'.+/ COPY OF THE ORDER FORWARDED TO : 1. 01 / THE APPELLANT 2. -201 / THE RESPONDENT. 3. 3 / CONCERNED CIT 4. 3() / THE CIT(A)-IV, AHMEDABAD 5. .67 -% , , / DR, ITAT, AHMEDABAD 6. 78 9& / GUARD FILE. ',% ',% ',% ',% / BY ORDER, 2. - //TRUE COPY// : :: :/ // / ; ; ; ; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD