Dr.Satya Gupta, Ahmedabad V. The ACIT.,Cent.Circle-2(3), Ahmedabad

ITSSA 653/AHD/2011

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 7404 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMALENDU VERMA
• Assessee Lawyers: P S SHAH
• Keywords: Unexplained investment; Fair market value
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI N. S. SAINI , ACCOUNTANT MEMBER IT(SS)A NO. 653/AHD/2011 ASSESSMENT YEAR :2008-09 DR. SATYA GUPTA D-804, SARTHAK TOWER, RAMDEVNAGAR CROSS ROAD, SATELLITE, AHMEDABAD 380015 V/S . ACIT, CENTRAL CIRCLE-2(3), AHMEDABAD PAN NO. A B B PG0271 F (APPELLANT) .. (RESPONDENT) IT(SS)A NO. 633/AHD/2011 ASSESSMENT YEAR :2008-09 DR. AJAY MADHUKAR NAIK C-1/2/3, GOYAL INTERCITY, DRIVE IN ROAD, THALTEJ, AHMADABAD. V/S . THE ASSTT. COMM. OF INCOME TAX CENTRAL CIRCLE-2(3), AHMEDABAD PAN NO. ABDPN5061E (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI VIMALENDU VERMA, CIT.D.R. /BY ASSESSEE SHRI P. S. SHAH, A.R. /DATE OF HEARING 17.12.2013 /DATE OF PRONOUNCEMENT 31.12.2013 O R D E R PER : SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER THESE TWO APPEALS OF THE ASSESSEE HAVE BEEN CONSOLI DATED AND HEREBY DECIDED BY THIS COMMON ORDER BECAUSE THE RESPECTIVE ASSESSMENTS HAVE BEEN MADE U/S. 153A/153C OF IT ACT CONSEQUENT UPON A SEARCH U/S. 132 OF IT ACT CARRIED OUT ON 21.08.2008 ON THE HEART CARE GR OUP KNOWN AS M/S. CARE CARDIOVASCULAR CONSULTANTS PVT. LTD., AHMADABAD. T HESE TWO APPELLANTS IT(SS)A NOS. 653 & 633/AHD/11 A.Y. 08-09 PAGE 2 HAVE FILED THESE APPEALS AGAINST A CONSOLIDATED ORD ER OF CIT(A)-III, AHMADABAD, DATED 27.09.2011 WHERE THE NAMES OF THES E APPELLANTS ARE APPEARING IN THE LIST AT SRL. NO. 4 & 6 OF THE APPE LLATE ORDER. THE MAIN GROUND OF THESE TWO APPELLANTS IS ALSO IN RESPECT OF THE A LLEGED CONTRIBUTION BY THE SAID COMPANY FOR THE PURCHASE OF LAND FOR THE HOSPI TAL PROJECT. 1(I). IN THE CASE OF DR. SATYA GUPTA, THE MAIN GROU ND IS AS UNDER: 3. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRM ING ADDITION MADE BY AO OF RS. 22,95,000/- AS ALLEGED CONTRIBUTION TO TH E COMPANY CCCPL FOR PURCHASE OF LAND FOR HOSPITAL PROJECT AS UNACCOUNTE D INCOME OF THE APPELLANT WITHOUT ANY CORROBORATIVE EVIDENCE. LD. CIT(A) OUGHT TO HAVE DELETED ADDITION MADE BY AO ON CONJECTURES AND SURM ISES. 1(II). IN THE CASE OF DR. AJAY MADHUKAR NAIK, THE M AIN GROUND IS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN ADDITION OF RS.21,25,000/- FOR THE ALLEGED UNEXPLAI NED INVESTMENT IN LAND FOR HOSPITAL PROJECT. 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT IN THE SAID GROUP OF DOCTORS, A CONSOLIDATED ORDER HAS NOW BEEN PASSED BY ITAT B BENCH, AHMADABAD, ORDER DATED 18.10.2013, WHEREIN IN IT(SS)A NOS. 604 , 610, 601, 674, 603, 639, 612, 602, 640, 634, 652 & 611/AHD/2011 FOR A. Y. 2008-09 ON THIS ISSUE, IT WAS CONCLUDED AS UNDER: WE HAVE CAREFULLY EXAMINED THE CONTENTS OF THIS PA GE. INDEED, IT IS MENTIONED THAT AN AMOUNT OF RS.18 CRORE INVESTED IN 2006-07. BUT THIS PAGE ALONE AND THE WORD 'INVESTED' ALONE DID NOT LE AD TO A DEFINITE CONCLUSION THAT THE SAID AMOUNT OF RS.18 CRORES WAS THE CONSIDERATION OF THE LAND. THE AMOUNT MENTIONED AS RS.18 CRORES COUL D HAVE BEEN NOTED BY ESCALATING THE PRICE TO INFLUENCE THE OTHER PART ICIPANTS SO THAT THE MAXIMUM CAPITAL CONTRIBUTION COULD BE MADE BY THEM. THE IMPUGNED INVESTED AMOUNT COULD HAVE BEEN ESCALATED SO AS TO GIVE AN IMPRESSION IT(SS)A NOS. 653 & 633/AHD/11 A.Y. 08-09 PAGE 3 THAT AN INVESTMENT IN THE LAND HAD ALREADY BEEN MAD E, HENCE A PROPORTIONATE EQUITY WAS TO BE CONTRIBUTED BY THE D OCTORS/INVESTORS DESIROUS TO JOIN THE PROJECT. THIS PRESUMPTION HAS A BASIS BECAUSE IN THE NOTES UNDERNEATH THE CHART THERE WAS A REFERENCE 'P REMIUM' ON THE VALUATION OF THE LAND WHICH WAS REQUIRED TO BE CONT RIBUTED BY THE GROUP OF DOCTORS. BY MENTIONING THE WORD 'PREMIUM' THE LEARN ED AR HAS PLEADED THAT IN FACT NO PREMIUM AMOUNT TOWARDS LAND WAS PAI D BUT IT WAS MERELY A PROJECTED FIGURE TO ATTRACT THE HIGHER FIGURE OF IN VESTMENT. HE HAS DRAWN OUR ATTENTION ON NUMBER OF SUCH PAGES WHICH WERE EX TRACTED FROM THE COMPUTER DISK TO DEMONSTRATE THAT THERE WERE SEVERA L PROJECTIONS OF THE TOTAL VALUE OF THE PROJECT. THE PROJECTED VALUE HAD CHANGED ON NUMBER OF OCCASION CONSIDERING THE INTEREST SHOWN BY THE INVE STORS. SO THE ARGUMENT IS THAT SINCE THE PROJECTIONS HAVE NOT DISCLOSED A STATIC OR A CONSTANT FIGURE THEREFORE SUCH FIGURES SHOULD NOT BE HELD AS AN ACT UAL INVESTMENT BY THE ASSESSEE. THIS PROBABILITY, WHICH GENERALLY PREVAIL S IN SUCH TYPE OF PROJECTS, THUS MUST NOT BE BRUSHED ASIDE ON THE FAC E OF IT. 8.8 NEXT POINT. WE HAVE ALSO PONDERED UPON AN ANOTH ER POINT ABOUT THE FAIR MARKET VALUE OF THE LAND IN QUESTION. IT WAS N OTED THAT THE AGRICULTURAL LAND WAS CONVERTED INTO NON AGRICULTURAL BY THE EFF ORTS OF THE ASSESSEE/CCCPL. NATURALLY, NON- AGRICULTURAL LAND F ETCH HIGHER PRICE IN THE MARKET. WHEN THE LAND IN QUESTION WAS TRANSACTED TH EN ITS NATURE WAS 'AGRICULTURAL LAND'. AN ANOTHER ADVERSE FACTOR WAS THAT THE LAND IN QUESTION WAS UNDER DISPUTE AMONG THE OWNERS. EARLIER THE LAN D WAS OWNED BY FEW INDIVIDUAL PERSONS. THEN THE CO-OPERATIVE SOCIETY W AS FORMED AND SUBSEQUENTLY CERTAIN COMPANIES WERE FORMED. THE ASS ESSEE HAD ENTERED INTO THE NEGOTIATIONS WITH THOSE PERSONS AND THEREA FTER COMPLETED THE PURCHASE TRANSACTIONS. IN THAT SITUATION, IT WAS DI FFICULT TO PRESUME THAT THE ASSESSEE HAD PAID ON-MONEY OVER AND ABOVE THE SALE PRICE AS DETERMINED BY THE REGISTRAR FOR STAMP DUTY PURPOSE. IT HAS BEEN ARGUED THAT THE SALE PRICE WAS ESCALATED BY THE STAMP DUTY AUTHORITY TIME AND AGAIN TO MATCH WITH THE FAIR MARKET PRICE OF THE LA ND OF THAT AREA. DUE TO THIS REASON, THE SALE PRICE AS DETERMINED BY THE ST AMP DUTY OFFICER WAS AT PAR WITH THE PREVAILING MARKET PRICE OF THE LAND. T HIS ARGUMENT OF THE IT(SS)A NOS. 653 & 633/AHD/11 A.Y. 08-09 PAGE 4 ASSESSEE HAS SUBSTANTIAL FORCE ESPECIALLY WHEN THE REVENUE DEPARTMENT HAS NOT PLACED ANY COMPARABLE INSTANCE OF PREVAILIN G MARKET PRICE. THERE IS NO EVIDENCE ON RECORD THROUGH WHICH IT COULD BE DEMONSTRATED BY THE REVENUE DEPARTMENT THAT AS PER SOME OTHER SALE INST ANCE THERE WAS INDEED HIGHER PREVAILING MARKET PRICE THEN THE SALE PRICE RECORDED IN THE SALE DEED. IN THE ABSENCE OF ANY SUCH EVIDENCE IT I S WRONG ON THE PART OF THE REVENUE DEPARTMENT TO PRESUME THAT THE PREVAILI NG MARKET PRICE WAS HIGHER THAN THE SALE PRICE AS RECORDED IN THE REGIS TERED SALE-DEED. 8.13 NEXT POINT. IT IS A UNIVERSAL LAW THAT THE 'SU SPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF EVIDENCE'. AT BEST, IT CAN ONLY LEAD TO INVESTIGATION. NO PERSON CAN BE PUNISHED MERELY ON THE BASIS OF A DOUBT, BUT SIDE BY SIDE, MUST NOT BE SPARED ON THE BASIS O F UNFAVORABLE EVIDENCE. SO THE PROCEDURE IS THAT A MISTRUST LEADS TO INVEST IGATION AND AN INVESTIGATION LEADS TO COLLECTION OF EVIDENCE. THER E ARE SEVERAL DECISIONS IN THE PAST PRONOUNCED BY THE HON'BLE APEX COURT WH EREIN A GENERAL RULE IS FRAMED THAT ALTHOUGH THE ITO IS NOT FETTERED BY THE TECHNICAL RULE OF EVIDENCE, BUT ITO IS NOT ENTITLED TO MAKE A PURE GU ESS, HOWEVER, REQUIRED TO MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVID ENCE. THERE MUST BE SOMETHING MORE THAN BARE SUSPICION. IN THE PRESENT APPEAL A FUNDAMENTAL QUESTION IS THAT WHETHER THERE WAS SUFFICIENT CLINC HING EVIDENCE UNEARTHED BY THE REVENUE DEPARTMENT CONSEQUENT UPON THE SEARC H TO MAKE A FIRM BELIEF THAT IN FACT THERE WAS THE EXISTENCE OF UNAC COUNTED INVESTMENT IN THE PURCHASE OF LAND. SIDE BY SIDE A SECOND QUESTIO N THEREFORE ARISES THAT WHETHER THE IMPUGNED ADDITION WAS IN THE NATURE OF SUSPICION ONLY. WE HAVE CAREFULLY EXAMINED BOTH THESE QUESTIONS AND TH EN ON CRITICAL ANALYSIS OF THE EVIDENCES AND UNDER THE TOTALITY OF THE CIRC UMSTANCES, WE HEREBY HOLD THAT THOSE WERE NOT EVEN THE INCRIMINATING MAT ERIAL BUT SIMPLY COMPUTER GENERATED PROJECTION- SHEETS, THEREFORE, H ARD TO SAY, SYNONYMOUS TO CLINCHING MATERIAL EVIDENCE DEPICTING CASH TRANSACTION, HENCE ERRONEOUSLY SUSPECTED BY THE REVENUE DEPARTME NT. WE HEREBY HOLD THAT THERE WAS NO EVIDENCE IN POSSESSION OF TH E REVENUE DEPARTMENT TO HOLD THAT THE ASSESSEE HAD IN FACT MA DE AN UNACCOUNTED INVESTMENT TOWARDS THE PURCHASE OF THE PROPERTY. IT(SS)A NOS. 653 & 633/AHD/11 A.Y. 08-09 PAGE 5 IN THE LIGHT OF ABOVE EXTRACTED PORTIONS OF THE RES PECTED CO-ORDINATE BENCH, WE, HEREBY, HOLD THAT THE ALLEGED ADDITIONS DO NOT SURVIVE IN THESE TWO CASES, AS WELL. RESULTANTLY, THESE GROUNDS ARE, HEREBY, A LLOWED. 3. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 31.12.2013 SD/- SD/- (N. S. SAINI) ( MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. $%$& ' '( / CONCERNED CIT 4. ' '(- + / CIT (A) 5. -.+' &, ' ++' &, 01 % / DR, ITAT, AHMEDABAD 6. .34 56 / GUARD FILE. BY ORDER/ , 7/0' $+ ' ++' &, 01 % 9