The ACIT, Central Circle II, RAJKOT-GUJARAT V. Shri Desar Munji Danicha, Adipur-Kutch

ITSSA 78/RJT/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9486 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 20-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: D M RINDANI F
• Keywords: Unexplained investment; Capital asset; Search and seizure; Document seized; Source of fund; Corroborative evidences; Documents seized
• Section: 69C; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM IT (SS) A NO. 78 /RJ T/201 0 ASSESSMENT YEAR : 200 7 - 0 8 ACIT, CENTRAL CIRCLE - 2, RAJKOT V. SHRI DESAR MURJI DANICHA, VILLAGE BAROLI, TAL. MUNDRA, KUTCH PAN : ARLPD 0074 B C.O. NO. 15/RJT/2011 ASSESSMENT YEAR 2007 - 08 SHRI DESAR MURJI DANICHA V. ACIT, CENTRAL CIRCLE - 2, RAJKOT IT (SS) A NO. 79 /RJT/201 0 ASSESSMENT YEAR : 200 8 - 0 9 ACIT, CENTRAL CIRCLE - 2, RAJKOT V. SHRI MURJI DAYA DANICHA , VILLAGE BAROLI, TAL. MUNDRA, KUTCH PAN : ADXPH 4358 Q C.O. NO. 16 /RJT/2011 ASSESSMENT YEAR 2008 - 09 SHRI MURJI DAYA DANICHA V. ACIT, CENTRAL CIRCLE - 2, RAJKOT DATE OF HEARING : 13 .0 8 .2013 DATE OF PRONOUNCEMENT : 13.09 .2013 REVENUE BY : DR M L MEENA, CIT - DR ASSESSEE BY : SHRI D M RINDANI, F CA ORDER APPEALS BEARING IT (SS) A NO S . 78 /RJT/201 0 AND 79 /RJT/201 0 FILED BY THE REVENUE ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE CIT(A) ON 7 TH OCTOBER 2010 IN THE CASES OF SHRI DESAR MURJI DANICHA AND SHRI MURJI DAYA DANICHA, BEING SON AND FATHER RESPECTIVELY. BOTH THE ASSESSEES HAVE ALSO FILED CROSS - OBJECTIONS BEARING CO NOS. 15/RJT/2011 AND 16/RJT/2011 IN SUPPORT OF THE ORDERS PASSED BY THE CIT (A). FACTS, ISSUES AND GROUNDS OF APPEAL IN ALL THE APPEALS AND CROSS - OBJECTIONS ARE COMMON . ALL THE APPEALS AND CROSS - OBJECTIONS ARE, THEREFORE, BEING DISPOSED OF BY A CONSOLIDATED ORDER. 2. SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE INCOME - TAX ACT WE RE CARRIED OUT AT THE PREMISES OF BOTH THE ASSESSEES ON 01.08.2007 DURING WHICH VARIOUS DOCUMENTS /RECORDS WERE FOUND AND SEIZED. CASH OF RS.19.50 LA KHS WAS ALSO FOUND AND SEIZED IN THE CASE OF SHRI MURJI DAYA DANICHA . A SATAKHAT/SATA - KARAR ( I.E., 2 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA AGREEMENT TO S ELL ) DATED 06.03.2006 FOR SALE OF LAND BEARING REVENUE SURVEY NO .83/1 ADMEASURING 1 - 29 - 50 HECT A RES AND REVENUE SURVEY NO. 83/2 ADMEASURING 1 - 92 - 23 HECT A RES LOCATED AT BAROI VILLAGE OF MUNDRA TALUKA OF KACHCHA DISTRICT OF GUJARAT WAS ALSO FOUND. THE SAI D AGREEMENT TO S ELL REVE ALED THAT BOTH THE ASSESSEES HA D AGREED TO SELL THE AFORESAID LAND TO SHRI SHYAM RAMESHBHAI PATHAK, TALUKA MUNDRA, DISTRICT KUTCH FOR A SUM OF RS.1,07,00,000/ - OUT OF WHICH A SUM OF RS.1,50,000/ - ONLY , ACCORDING TO THE SAID AGREEMEN T, WAS RECEIVED BY BOTH THE ASSESSEES AS TOKEN AMOUNT OF SALE CONSIDERATION ON THE DATE OF AGREEMENT TO S ELL . THE AFORESAID AGREEMENT TO S ELL HAS BEEN EXECUTED ON NON - JUDICIAL STAMP PAPER OF RS.20/ - . HOWEVER, BOTH THE PIECES OF LAND WERE NOT SOLD AS PER AG REEMENT TO SELL. T HE LAND BEARING SURVEY NO.83/2 WAS ULTIMATELY SOLD BY SHRI DESAR MURJI ON 09.02.2007 TO SHRI NARENDRASINH GULABSINH JADEJA ON AGREED CONSIDERATION OF RS.1,45,000/ - . CLAUSE 5 OF THE SALE DEED DATED 09.02.2007 BETWEEN SHRI DESAR MURJI DANIC HA AND SHRI NARENDRASINH GULABSINH JADEJA SHOWS THAT A SUM OF RS.1,45,000/ - ALONE WAS PAID BY THE BUYER TOWARDS SALE CONSIDERATION TO THE SELLER , NAMELY , SHRI DESAR MURJI DANICHA. ANOTHER SALE DEED WAS EXECUTED ON THE SAME DATE, I.E., 09.02.2007 BETWEEN SH RI MURJI DAYA DANICHA AND SHRI NARENDRASINH GULAB SINH JADEJA BY WHICH LAND BEARING SURVEY NO. 83/1 WAS TRANSFERRED IN FAVOUR OF THE PURCHASER ON PAYMENT OF RS.98,000/ - . THE SIGNATURES OF WITNESSES ON BOTH THE SALE DEED ARE ILLEGIBLE. TOTAL CONSIDERATION REC EIVED FROM THE PURCHASER OF BOTH THE PROPERTIES, AS PER SALE DEED , AGGREGATES TO RS.1,45,000/ - + RS.98,000/ - = RS.2,43,000/ - . 3. I NCRIMINATING DOCUMENTS FOUND AT THE TIME OF SEARCH WERE ANALYZED BY THE AO. I T WAS FOUND THAT SHRI DESAR MURJI DANICHA HAD M ADE INVESTMENTS A GGREGATING TO RS.63,01,176/ - IN THE MONTHS OF FEBRUARY AND MARCH IN THE YEAR UNDER APPEAL. THERE IS NO DISPUTE WITH REGARD TO THE AFORESAID QUANTIFICATION OF INVESTMENT S MADE BY SHRI DESAR MURJI DANICHA IN THE YEAR UNDER APPEAL. THERE IS A LSO NO DISPUTE WITH REGARD TO THE AMOUNT OF CASH (RS.90,50,000/ - ) FOUND AT THE TIME OF SEARCH AT THE PREMISES OF SHRI MURJI DAYA DANICHA. THE DISPUTE HOWEVER IS WITH REGARD TO THE NATURE AND SOURCE OF THE AFORESAID INVESTMENTS AS ALSO CASH FOUND AT THE TIM E OF SEARCH. 3 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA 4 . PURSUANT TO SEARCH OPERATIONS U/S 132 OF THE INCOME - TAX ACT AT THE PREMISES OF BOTH THE ASSESSEES, NOTICES WERE ISSUE D ON 29.1.2009 U/S 153A REQUIRING BOTH THE ASSESSEES TO FILE THEIR RETURN OF INCOME. R ETURN OF INCOME W AS FILED BY SHRI D ESAR MURJI DANICHA ON 5.11.2009 RETURNING NIL INCOME AND AGRICULTURAL INCOME AMOUNTING TO RS.67,250/ - . RETURN OF INCOME WAS FILED BY SHRI MURJI DAYA DANICHA ON 5.11.2009 RETURNING TOTAL INCOME AT RS.17,390/ - . 5. SHRI DESAR MURJI DANICHA WAS CALLED UPON B Y THE ASSESSING OFFICER TO EXPLAIN THE NATURE AND SOURCE OF INVESTMENT S A GGREGATING TO RS.63,01,176/ - MADE BY HIM IN FEBRUARY AND MARCH IN THE YEAR UNDER APPEAL WHILE SHRI MURJI DAYA DANICHA WAS CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF CASH AMOUNTIN G TO RS.19,50,000/ - FOUND FROM HIS PREMISES AT THE TIME OF SEARCH. IN REPLY, BOTH THE ASSESSEES RELIED UPON THE AGREEMENT TO SELL DATED 06.03.200 6 AND SUBMITTED THAT A SUM OF RS.1,07,00,000/ - WAS ACTUALLY RECEIVED BY THEM ON SALE OF LAND. IN OTHER WORDS, T HE NATURE AND SOURCE OF INVESTMENTS MADE BY SHRI DESAR MURJI DANICHA AND CASH FOUND AT THE TIME OF SEARCH AT THE PREMISES OF SHRI MURJI DAYA DANICHA WERE CLAIMED TO HAVE COME OUT OF THE SUM OF RS.1,07,00,000/ - MENTIONED IN THE AGREEMENT TO SELL . IT WAS SUB MITTED THAT THE SAID PROPERTY WAS ACTUALLY SOLD TO SHRI NARANBHAI P GADHAVI, ADVOCATE FOR A SUM OF RS.1,07,00,000/ - IN THE NAMES OF PERSONS GIVEN BY HIM IN THE AGREEMENT TO SELL AND SALE DEED . THE ASSESSING OFFICER HOWEVER DID NOT CONSIDER THE AFORESAID EX PLANATION GIVEN BY BOTH THE ASSESSEES AS SATISFACTORY. HE TREATED THE INVESTMENT OF RS.63,01,176/ - AS UNEXPLAINED INVESTMENT IN THE HANDS OF SHRI DESAR MURJI DANICHA WITH THE FOLLOWING OBSERVATIONS: - (6.0) THE ASSESSEE WAS THUS ASKED TO EXPLAIN THE CASH FOUND AS ALSO OTHER DOCUMENTS AS ENUMERATED ABOVE, THE AR OF THE ASSESSEE SUBMITTED THAT, THE SOURCE OF CASH IS THE SALE PROCEEDS OF L AND SITUATED AT SURVEY NO.83/1 AND 83/2 SITUATED AT VILLAGE BAROI AND THE OTHER SEIZED MATERIALS FOUND WHICH INDICATE EXPE NDITURE AND INVESTMENTS MADE BY THE ASSESSEE AND HIS FATHER, WERE FROM THE SALE PROCEEDS. (6.1) AS PER THE ASSESSEE, HE ALONG WITH HIS FATHER SHRI MURJI DANICHA HAD SOLD A PLOT OF LAND AND TOTAL SALE CONSIDERATION RECEIVED ON ACCOUNT OF THE 4 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA SALE OF THE LA ND WAS RS.1,07,00,000/ - . OUT OF WHICH RS.64.00 LAC WAS THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE AND THE BALANCE AMOUNT WAS RECEIVED BY HIS FATHER. THEY HAD SUBMITTED THAT, SINCE THE LAND SOLD WAS AGRICULTURAL LAND AND AS IT WAS BEYOND 8 KM OF A MUNI CIPALITY HAVING POPULATION OF MORE THAN 10000 AS PER THE LATEST CENSUS, IT WAS NOT A CAPITAL ASSET AS PER THE I T ACT AND THEREFORE NO CAPITAL GAIN HAS BEEN OFFERED FOR TAXATION. THE ASSESSEE WAS ASKED TO PROVE THE SOURCE OF RECEIPT AND EVIDENCE OF RECEIPT OF RS.1,07,00,000/ - ON ACCOUNT OF SALE OF AGRICULTURAL LAND SINCE THE SAME HAS BEEN CLAIMED AS EXEMPT FROM THE I T ACT BEING NOT A CAPITAL ASSET AS PER REASONING DISCUSSED EARLIER. IN RESPONSE, IT WAS SUBMITTED THAT AS PER SATAKHAT DATED 6.3.2006, LAND AT SURVEY NO.83/1 AND 83/2 AT VILLAGE BROI, TAL. MUNDRA WAS PURCHASED BY ONE SHYAM RAMESH PATHAK FROM THE ASSESSEE. AS PER THE SAME SATAKHAT, IT IS SEEN THAT PAYMENT OF ONLY RS.1,50,000/ - HAS BEEN RECEIVED ON THE DATE OF SATAKHAT. FURTHER, THE ASSESSEE HAS S UBMITTED ANOTHER SALE DEED DATED 9.2.07 WHEREIN THE ABOVE MENTIONED LAND WAS SOLD BY THE ASSESSEE TO ONE SHRI NARENDRA GULABRAI JADEJA FOR A TOTAL CONSIDERATION OF RS.145000. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SATAKHAT WAS PREPARED IN THE NAME OF ON E PERSON AND THE LAND HAS BEEN SOLD TO ANOTHER PERSON AS MENTIONED ABOVE. IN RESPONSE TO THIS QUESTION THE ASSESSEE COULD NOT FURNISH ANY REPLY. (6.2) THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SALE DEED HAS BEEN MADE ABOUT ONE YEAR AFTER THE SATAKHAT WAS PREPARED. NO SATISFACTORY EXPLANATION IN THE MATTER COULD BE GIVEN. THE ASSESSEE WAS FURTHER ASKED TO EXPLAIN IF THE SALE CONSIDERATION WAS AS LARGE AS RS.1,07,00,000/ - THEN WHY SATAKHAT WAS PREPARED BY TAKING A PALTRY AMOUNT OF RS.1,50,000 ONLY. THERE ALS O THE ASSESSEE COULD NOT FURNISH ANY SATISFACTORY EXPLANATION. (6.3) DURING THE COURSE OF SEARCH, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF RECEIPT OF THE CASH ALONG WITH SUPPORTING EVIDENCES. IN THE STATEMENT ON 1.8.2007, U/S. 132(4) OF THE I T ACT , IN REPLY TO Q. NO.2 AND 3, THE ASSESSEE HAS STATED THAT RS.1,07,00,000 HAS BEEN RECEIVED FROM ONE 5 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA SHRI NARAN GADHVI AND POSSESSION OF THE LAND WAS GIVEN AROUND ONE YEAR BACK TO SHRI NARAN GADHVI. (6.4.) STATEMENT OF SHRI NARAN GADHVI WAS RECORDED ON 7.8 .2007 U/S.131 (1A) OF THE I T ACT WHEREIN IN RESPONSE TO Q. NO.31 HE HAS DENIED TO HAVE MADE ANY PAYMENT TO THE ASSESSEE OR HIS FATHER FOR PURCHASE OF ANY LAND. (6.5) THE STATEMENT OF THE ASSESSEE THAT HE HAS RECEIVED RS.1,07,00,000/ - ON ACCOUNT OF SALE O F THE LAND CANNOT BE ACCEPTED BECAUSE OF THE FOLLOWING DISCREPANCIES. A . VIDE SATAKHAT DATED 6.3.2007 THE LAND AS PURPORTEDLY SOLD TO SHYAM RAMESH PATHAK FOR RS.1,07,00,000/ - FOR WHICH ADVANCE OF ONLY RS.1,50,000 HAS BEEN RECEIVED. B . IN THE STATEMENT, THE ASSE SSEE HAS MENTIONED THAT MONEY WAS RECEIVED FROM NARANBHAI AND POSSESSION WAS GIVEN AROUND 1 YEAR BACK FROM THE DATE OF STATEMENT AND THUS POSSESSION OF LAND WOULD HAVE BEEN GIVEN NARAN GADHVI IN OR AROUND AUGUST 2006 AS HAS BEEN STATED BY THE ASSESSEE. C . THE SALE DEED FOR THIS LAND HAS BEEN EXECUTED ONLY ON 9.2.2007 IN THE NAME OF NARENDRA JADEJA. D . SHRI NARAN GADHVI IN THE STATEMENT RECORDED HAS DENIED PAYMENT OF ANY CASH FOR PURCHASE OF ANY LAND. E . THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO PROVE THAT CASH OF RS.1,07,00,000/ - HAS BEEN RECEIVED AND IF AT ALL IT HAS BEEN RECEIVED, IT HAS BEEN RECEIVED FROM WHOM. HERE THE ACTUAL BENEFICIARY IS THE PURCHASER, THE FINAL PURCHASER OF THE LAND, WHO IS NARENDRA JADEJA. NOWHERE THE ASSESSEE SUBMITTED THAT HE HAS RECE IVED ANY CASH FROM THE ACTUAL BENEFICIARY. F . THE VERSION OF THE ASSESSEE IS NOT ACCEPTABLE ALSO FOR THE REASON THAT IF TOTAL PAYMENT OF RS.1,07,00,000 HAS BEEN MADE IN AUGUST 2006, AS HAS BEEN CLAIMED BY THE ASSESSEE AND POSSESSION OF LAND HAS BEEN HANDED OV ER IN AUGUST 2006 THEN NO PRUDENT PERSON WILL WAIT UPTO FEBRUARY 2007 6 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA TO PREPARE A SALE DEED FOR THE LAND IN QUESTION. THEREFORE IT APPEARS THAT THE STATEMENT MADE BY THE ASSESSEE THAT THE CASH HAS BEEN RECD ON ACCOUNT OF SALE OF LAND IS NOT PROVED BY ANY EVIDENCE. (7.0) DURING THE COURSE OF SEARCH, ANNEXURE A - 2 WHICH IS A SMALL DIARY HAS BEEN SEIZED. IN THIS ANNEXURE, THERE IS RECORDING OF FINANCIAL TRANSACTIONS TO THE TUNE OF RS.54.50 LACS IN THE MONTH OF FEBRUARY AND MARCH 2007. THE ASSESSEE WAS ASKED T O EXPLAIN THE SOURCE OF THIS PAYMENT. IN RESPONSE THE ASSESSEE STATED THAT THE SOURCE OF THE PAYMENT IS FROM THE CASH RECEIVED ON ACCOUNT OF SALE OF THE AGRICULTURAL LAND. THIS DIARY ACTUALLY CONTAINS UNACCOUNTED CASH PAYMENTS MADE BY THE ASSESSEE WHICH IS PROVED FROM THE FACT THAT AS PER PAGE NO.24 TO 35 OF SEIZED DOCUMENTS IN ANNEXURE A - 1 THE ASSESSEE HAS PURCHASED LAND AT SURVEY NO.514/2 AT VILLAGE VADALA TAL MUNDRA FOR RS.14,46,000 AND HAS PAID RS.2,90,000 ON THE DATE OF AGREEMENT. AGAIN IN PAGE NO.3 OF ANNEXURE A - 2 BALANCE PAYMENT OF RS.11,54,000 IS REFLECTED. SIMILARLY AS PER PG. NO.35 TO 37 OF SIZED ANNEXURE A - 1 THE ASSESSEE HAS PURCHASED LAND AT RS NO.421/1 AT VILL RUNI TAL. MUNDRA ON 7.3.2007 FOR RS.16,78,000 AND PAYMENT OF RS.1,60,000 HAS BEEN MADE AS PER THE AGREEMENT. IN PAGE NO.5 OF ANNEXURE A - 2 THE BALANCE PAYMENT OF RS.15,10,000/ - IS REFLECTED. THUS IT IS PROVED THAT TRANSACTIONS MENTIONED IN ANNEXURE A - 2 ARE ACTUAL CASH PAYMENTS MADE BY THE ASSESSEE. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN T HE SOURCE OF THESE PAYMENTS SATISFACTORILY BECAUSE THE EXPLANATION OF THE ASSESSEE THAT SAME IS ON ACCOUNT OF SALE OF AGRICULTURAL LAND HAS ALREADY BEEN REJECTED. (7.1) PAGE NO.2 OF SEIZE ANNEXURE A - 1 REFLECTS TRANSACTION OF RS.8,51,176/ - . THE ASSESSEE WA S ASKED TO EXPLAIN THE SOURCE OF THE SAME. HOWEVER, THE ASSESSEE AGAIN STATED THAT THE SAME IS FROM THE SALE OF LAND AS MENTIONED ABOVE. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF THESE PAYMENTS SATISFACTORILY BECAUSE THE EXPLANATION OF THE AS SESSEE THAT SAME IS ON ACCOUNT OF SALE OF AGRICULTURAL LAND HAS ALREADY BEEN REJECTED. 7 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA (8.0) THUS AS PER PARA (7.0) AND (7.1) ABOVE, TOTAL UNDISCLOSED PAYMENT MADE BY THE ASSESSEE DURING THIS AY IS RS.54,50,000 + RS.8,51,176/ - . THE ASSESSEE HAS NOT BEEN A BLE TO EXPLAIN THE SOURCE OF THE SAME AND THEREFORE THE SAME IS BEING TREATED AS PAYMENTS MADE OUT OF UNDISCLOSED INCOME. 6 . SIMILAR EXPLANATION OFFERED BY SHRI MURJI DAYA DANICHA REGARDING THE NATURE AND SOURCE OF CASH AMOUNTING TO RS.19,50,000/ - FOUND FROM HIS PREMISES WAS ALSO REJECTED BY THE ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS: - (5.0) THE ASSESSEE WAS THUS ASKED TO EXPLAIN THE CASH FOUND AS ALSO OTHER DOCUMENTS AS ENUMERATED ABOVE . THE AR OF THE ASSESSEE SUBMITTED THAT, THE SOURCE OF C ASH IS THE SALE PROCEEDS OF LAND SITUATED AT SURVEY NO.83/1 AND 83/2 SITUATED AT VILLAGE BAROI AND THE OTHER SEIZED MATERIALS FOUND WHICH INDICATE EXPENDITURE AND INVESTMENTS MADE BY THE ASSESSEE AND HIS FATHER, WERE FROM THE SALE PROCEEDS. (6.1) AS PER T HE ASSESSEE, HE ALONG WITH HIS SON HAD SOLD A PLOT OF LAND AND TOTAL SALE CO NSIDERATION RECEIVED ON ACCOUNT OF THE SALE OF THE LAND WAS RS.1,07,00,000/ - . OUT OF WHICH RS.64.00 LAC WAS THE SALE CONSIDERATION RECEIVED BY HIS SON AND THE BALANCE AMOUNT WAS RE CEIVED BY HIM . THEY HAD SUBMITTED THAT, SINCE THE LAND SOLD WAS AGRICULTURAL LAND AND AS IT WAS BEYOND 8 KM OF A MUNICIPALITY HAVING POPULATION OF MORE THAN 10000 AS PER THE LATEST CENSUS, IT WAS NOT A CAPITAL ASSET AS PER THE I T ACT AND THEREFORE NO CAPI TAL GAIN HAS BEEN OFFERED FOR TAXATION. THE ASSESSEE WAS ASKED TO PROVE THE SOURCE OF RECEIPT AND EVIDENCE OF RECEIPT OF RS.1,07,00,000/ - ON ACCOUNT OF SALE OF AGRICULTURAL LAND SINCE THE SAME HAS BEEN CLAIMED AS EXEMPT FROM THE I T ACT BEING NOT A CAPITAL ASSET AS PER REASONING DISCUSSED EARLIER. IN RESPONSE, IT WAS SUBMITTED THAT AS PER SATAKHAT DATED 6.3.2006, LAND AT SURVEY NO.83/1 AND 83/2 AT VILLAGE B A ROI, TAL. MUNDRA WAS PURCHASED BY ONE SHYAM RAMESH PATHAK FROM THE ASSESSEE. AS PER THE SAME SATAKHAT , IT IS SEEN THAT PAYMENT OF ONLY RS.1,50,000/ - HAS BEEN RECEIVED ON THE DATE OF SATAKHAT. FURTHER, THE ASSESSEE HAS SUBMITTED ANOTHER SALE DEED DATED 9.2.07 WHEREIN THE ABOVE MENTIONED LAND WAS SOLD BY THE ASSESSEE TO ONE 8 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA SHRI NARENDRA GULABRAI JADEJA FOR A TOTAL CONSIDERATION OF RS.145000. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SATAKHAT WAS PREPARED IN THE NAME OF ONE PERSON AND THE LAND HAS BEEN SOLD TO ANOTHER PERSON AS MENTIONED ABOVE. IN RESPONSE TO THIS QUESTION THE ASSESSEE COULD NOT FURNISH ANY REPLY. (6.2) THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE SALE DEED HAS BEEN MADE ABOUT ONE YEAR AFTER THE SATAKHAT WAS PREPARED. NO SATISFACTORY EXPLANATION IN THE MATTER COULD BE GIVEN. THE ASSESSEE WAS FURTHER ASKED TO EXPLAIN IF THE SALE CONSIDERATION WA S AS LARGE AS RS.1,07,00,000/ - THEN WHY SATAKHAT WAS PREPARED BY TAKING A PALTRY AMOUNT OF RS.1,50,000 ONLY. THERE ALSO THE ASSESSEE COULD NOT FURNISH ANY SATISFACTORY EXPLANATION. (6.3) DURING THE COURSE OF SEARCH, THE ASSESSEE S SON WAS ASKED TO EXPLAIN THE SOURCE OF RECEIPT OF THE CASH ALONG WITH SUPPORTING EVIDENCES. IN THE STATEMENT RECORDED ON 1.8.2007, U/S. 132(4) OF THE I T ACT, IN REPLY TO Q. NO.2 AND 3, HE STATED THAT RS.1,07,00,000 HAS BEEN RECEIVED FROM ONE SHRI NARAN GADHVI AND POSSESSION OF T HE LAND WAS GIVEN AROUND ONE YEAR BACK TO SHRI NARAN GADHVI. (6.4.) STATEMENT OF SHRI NARAN GADHVI WAS RECORDED ON 7.8.2007 U/S.131 (1A) OF THE I T ACT WHEREIN IN RESPONSE TO Q. NO.31 HE HAS DENIED TO HAVE MADE ANY PAYMENT TO THE ASSESSEE OR HIS FATHER FO R PURCHASE OF ANY LAND. (6.5) THE STATEMENT OF THE ASSESSEE THAT HE HAS RECEIVED RS.1,07,00,000/ - ON ACCOUNT OF SALE OF THE LAND CANNOT BE ACCEPTED BECAUSE OF THE FOLLOWING DISCREPANCIES. G . VIDE SATAKHAT DATED 6.3.2007 THE LAND AS PURPORTEDLY SOLD TO SHYAM RAMESH PATHAK FOR RS.1,07,00,000/ - FOR WHICH ADVANCE OF ONLY RS.1,50,000 HAS BEEN RECEIVED. H . IN THE STATEMENT, THE ASSESSEE HAS MENTIONED THAT MONEY WAS RECEIVED FROM NARANBHAI AND POSSESSION WAS GIVEN AROUND 1 YEAR BACK FROM THE DATE OF STATEMENT AND THUS POSSESSION OF LAND WOULD HAVE BEEN GIVEN NARAN GADHVI IN OR AROUND AUGUST 2006 AS HAS BEEN STATED BY THE ASSESSEE. 9 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA I . THE SALE DEED FOR THIS LAND HAS BEEN EXECUTED ONLY ON 9.2.2007 IN THE NAME OF NARENDRA JADEJA. J . SHRI NARAN GADHVI IN THE STATEMENT RECORDED H AS DENIED PAYMENT OF ANY CASH FOR PURCHASE OF ANY LAND. K . THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO PROVE THAT CASH OF RS.1,07,00,000/ - HAS BEEN RECEIVED AND IF AT ALL IT HAS BEEN RECEIVED, IT HAS BEEN RECEIVED FROM WHOM. HERE THE ACTUAL BENEFICIARY IS THE PURCHASER, THE FINAL PURCHASER OF THE LAND, WHO IS NARENDRA JADEJA. NOWHERE THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED ANY CASH FROM THE ACTUAL BENEFICIARY. L . THE VERSION OF THE ASSESSEE IS NOT ACCEPTABLE ALSO FOR THE REASON THAT IF TOTAL PAYMENT OF RS. 1,07,00,000 HAS BEEN MADE IN AUGUST 2006, AS HAS BEEN CLAIMED BY THE ASSESSEE AND POSSESSION OF LAND HAS BEEN HANDED OVER IN AUGUST 2006 THEN NO PRUDENT PERSON WILL WAIT UPTO FEBRUARY 2007 TO PREPARE A SALE DEED FOR THE LAND IN QUESTION. THEREFORE IT APPEA RS THAT THE STATEMENT MADE BY THE ASSESSEE THAT THE CASH HAS BEEN RECD ON ACCOUNT OF SALE OF LAND IS NOT PROVED BY ANY EVIDENCE. 7 . ON APPEAL, THE LD . CIT(A) DELETED BOTH THE ADDITIONS ON THE GROUND THAT THE LAND WAS PURCHASED BY SHRI NARANBHAI GADHAVI, ADVOCATE AND A SUM OF RS.1,07,00,000/ - WAS PAID BY HIM AFTER THE REGISTRATION OF SALE DEED. HIS OBSERVATIONS IN THIS BEHALF ARE CONTAINED IN PARA GRAPH NOS. 2.6 AND 2.7 OF HIS APPELLATE ORDER IN THE CASE OF SHRI DESAR MURJI DANICHA WHICH READ AS UNDER: - 2 .6 IT IS EVIDENT FROM THE ABOVE QUESTION AND REPLY THAT THE LAND WAS PURCHASED BY SHRI NARAN GADHVI AND THE PAYMENT OF RS.1,07,00,000/ - (RS.1,50,000/ - AT THE TIME OF SATHAKHAT AND RS.1,05,50,000/ - AFTER THE REGISTERED SALE DEED AT THE RESIDENCE OF ASSESSEE ) WAS MADE BY HIM. THE REGISTERED SALE DEEDS WERE MADE IN OTHER NAME ONLY AT THE INSTANCE OF SHRI NARAN GADHVI. THERE IS NO SUCH SUBSTANCE IN THE STATEMENT OF SHRI NARENDRA JADEJA AS HE WAS NOT HAVING ANY SOURCE OF INCOME AND THE REGISTERED DEED WAS MADE I N HIS NAME BY HIS FATHER. HE WAS NOT KNOWING THE NAME OF THE SELLERS OF THE LAND THOUGH THE REGISTERED DOCUMENTS WERE SIGNED BY HIM. 10 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA NEITHER HE WAS PRESENT AT THE RESIDENCE OF THE A SSESSEE BEFORE GOING TO REGISTRAR OFFICE WHERE HIS FATHER AND SHRI NARAN GA DHVI WERE WENT TO BRING THE SELLERS NOR WAS PRESENT AT THE RESIDENCE OF ASSESSEE AFTER THE SALE DEEDS WERE REGISTERED AND SHRI NARAN GADHVI ALONGWITH HIS FATHER AND STAFF WENT TO DROP THE SELLERS AND TO HAND OVER THE MONEY. HIS NAME WAS ONLY USED IN THE RE GISTERED SALE DEEDS. IT IS EVEN EVIDENT FROM THE REPLY TO SPECIFIC QUESTION NO.13 OF HIS STATEMENT DATED 19.10.2007 (STATEMENT ADJOURNED TO 16.10.07 ON 11.10.07 BUT RESUMED ON 19.10.07) RECORDED BY ADIT(INV.) - II, RAJKOT U/S 131(1A) OF THE ACT. THE RELEVANT QUESTION AND REPLY IS AS UNDER: - Q.13 THE LAND AT MUNDRA S/NO. 83/1, 83/2 ;PURCHASED BY YOU FROM DESAR MULJI DANICHA & MULJI DAYA DANICHA IS OF MARKET VALUE RS.107 LACS AND BOTH THE ABOVE SELLER HAVE STATED THAT THEY HAVE RECEIVED RS.107 LACS FOR THE ABO VE 2 LAND. SO KINDLY EXPLAIN THAT HOW DID YOU GATHER THIS RS.107 WHICH YOU HAVE PAID FOR THE LAND. ANS. THE PAYMENT TO BE MADE FOR THIS LAND HAD BEEN GIVEN BY MY FATHER SHRI GULABSINH JADEJA . SO HE ONLY CAN EXPLAIN THE SOURCES OF THE SAME. WHATEVER MONEY HE GAVE ME, I HAD HANDED IT OVER TO RASIKBHAI PATEL. 2.7 IT IS EVIDENT FROM THE STATEMENTS OF ABOVE REFERRED THREE PERSONS, DENIAL OF SHRI NAR AN GADHVI, ADVOCATE TO CROSS EXAMINE THE ASSESSEE SHRI DESARBHAI DANICHA AND DISCUSSION IN PARA - 2.2 TO PARA - 2.6 A BOVE THAT THE LAND IN QUESTION WAS ACTUALLY SOLD FOR RS.1,07,00,000/ - AND THE SELLERS HAD RECEIVED THE WHOLE CONSIDERATION OF RS.1,07,00,000/ - (RS.1,50,000/ - AT THE TIME OF SATHAKHAT AND RS.1,05,50,000/ - AFTER THE REGISTERED SALE DEED AT THE RESIDENCE OF A SSESSEE) FROM SHRI NARAN GADHVI. THIS FACT WAS ALSO CONFIRMED BY THE WITNESSES OF THE SATHAKHAT THAT THE PRICE OF LAND WAS FIXED AT RS.1,07,00,000/ - . THE ASSESSING OFFICER COULD NOT BE ABLE TO DISPROVE THE AVERMENT OF THE AFFIDAVITS. IT IS PERTINENT TO MEN TION THAT THE WITNESSES OF THE SATHAKHAT WERE NOT ANYHOW RELATED TO THE APPELLANT OR HIS FATHER EVEN THEN 11 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA THEY HAD MADE THE AFFIDAVITS, THE AVERMENT OF WHICH CANNOT BE BRUSHED ASIDE 8 . AGGRIEVED BY THE ORDER PASSED BY THE LD CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 9 . IN IT(SS)A NO.78/RJT/2010 , THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.54,50,000/ - BEING THE UNEXPLAINED INVESTMENT FOUND TO BE MADE AS PER THE SEIZED DOCUMENTS. 2. THE LEARNED CIT(A) FURTHER ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.8,51,175/ - BEING UNEXPLAINED INVESTMENT AS PER SEIZED DOCUMENTS. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT TH E AMOUNT IN QUESTION WAS PART OF THE CASH RECEIVED FROM SHRI NARAN GADHVI, ADVOCATE BY THE FATHER OF THE ASSESSEE ON SALE OF AGRICULTURAL LAND MADE BY THE ASSESSEE WHO DE NIED HAVING MADE SUCH PAYMENT TO THE ASSESSEE AS PART OF THE SALE CONSIDERATION OF THE LAND CLAIMED TO HAVE BEEN SOLD BY THE ASSESSEE. 4. THE LEARNED CIT(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER FOR MAKING THE ADDITION OF THE AMOUNT IN QUESTION. 5. THE LEARNED CIT(A) OUGHT NOT TO HAVE TAKEN RELIEF TO THE ASSESSEE MERELY ON THE BASIS OF DEFICIENCY IN THE ENQUIRY CONDUCTED BY THE ASSESSING OFFICER. IN VIEW OF THE WIDE AND CO - EXTENSIVE POWER AVAILABLE WITH HIM, HE OUGHT TO HAVE HIMSELF CONDUCTED THE INQUIRY OR GOT IT DONE BY THE ASSESSING OFFICER TO ARRIVE AT THE CORRECT CONCLUSION RATHER THAN GRANTING THE RELIEF. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. C.I.T.(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER BE RESTORED IN TOTO. 12 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA 10 . IN IT (SS) A NO. 79 /RJT/201 0, THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE AS UNDER: - 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.19,50,000/ - BEING THE UNEXPLAINED INVESTMENT FOUND TO BE MADE AS PER THE SEIZED DOCUMENTS. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE AMOUNT IN QUESTION WAS PART OF THE CASH RECEIVED FROM SHRI NARAN GADHVI, ADVOCATE BY THE FATHER OF THE ASSESSEE ON SALE OF AGRICULTURAL LAND MADE BY THE ASSESSEE WHO DENIED HAVING MADE SUCH PAYMENT TO THE ASSESSEE AS PART OF THE SALE CONSIDERATION OF THE LAND CLAIMED TO HAVE BEEN SOLD BY THE ASSESSEE. 3. THE LEARNED CIT(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER FOR MAKING THE ADDITION OF THE AMOUNT IN QUESTION. 4. THE LEARNED CIT(A) OUGHT NOT TO HAVE TAKEN RELIEF TO THE ASSESSEE MERELY ON THE BASIS OF DEFICIENCY IN THE ENQUIRY CON DUCTED BY THE ASSESSING OFFICER. IN VIEW OF THE WIDE AND CO - EXTENSIVE POWER AVAILABLE WITH HIM, HE OUGHT TO HAVE HIMSELF CONDUCTED THE INQUIRY OR GOT IT DONE BY THE ASSESSING OFFICER TO ARRIVE AT THE CORRECT CONCLUSION RATHER THAN GRANTING THE RELIEF. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. C.I.T.(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED IN TOTO. 11 . AS STATED EARLIER, BOTH THE ASSESSEES HAVE ALSO FILED CROSS - OBJECTIONS IN SUPPORT OF THE APPELLATE ORDERS PASSED BY T HE LD CIT(A ). 1 2 . IN SUPPORT OF APPEAL, THE LD . DEPARTMENTAL REPRESENTATIVE, APART FROM RELYING ON THE FINDINGS RECORDED BY THE ASSESSING OFFICER IN BOTH THE CASES, HAS ALSO FILED WRITTEN SUBMISSIONS. HIS SUBMISSIONS, IN BRIEF, ARE THAT THE ORDER OF THE LD CIT(A) IS COMPLETELY BASED ON CONJ E CTURES AND SURMISES. ACCORDING TO HIM, THE FINDINGS RECORDED BY THE LD . CIT(A) THAT THE LAND WAS SOLD TO SHRI NARAN GADHVI, ADVOCATE IS NOT SUPPORTED BY ANY DOCUMENT OR EVIDENCE ON RECORD. HE SUBMITTED THAT THE 13 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA DOCUMEN TS AVAILABLE ON RECORD CLEARLY INDICATED THAT THE LAND WAS EVENTUALLY PURCHASED BY SHRI NARENDRASINH GULABSINH JADEJA ON 09.01.2007 WHILE THE AGREEMENT TO SELL WAS EXECUTED BETWEEN BOTH THE ASSESSEES AND SHRI SHYAM RAMESHBHAI PATHAK ON 06.03.2006. HE FURTH ER SUBMITTED THAT THE FINDINGS RECORDED BY THE LD CIT(A) THAT SHRI NARAN GADHVI, A DVOCATE HAS PAID A SUM OF RS.1,07,00,000/ - WAS AGAIN NOT SUPPORTED BY ANY DOCUMENT OR RECORD. ACCORDING TO HIM, THE TOTAL CONSIDERATION RECEIVED BY BOTH THE ASSESSEES ON SALE OF LAND WAS ONLY RS.2,43,000/ - AND NOT RS.1,07,00,000/ - AS HELD BY THE LD. CIT(A) . HIS THIRD SUBMISSION WAS THAT EVEN THE WITNESSES TO AGREEMENT TO SELL HAVE NOT STATED THAT A SUM OF RS.1,07,00,000/ - WAS EVER PAID TO THE ASSESSEE S . 1 3 . IN REPLY, THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE S SUPPORTED THE ORDER PASSED BY THE LD CIT(A). HE HAS ALSO FILED WRITTEN SUBMISSION S . RELEVANT PORTION OF HIS WRITTEN SUBMISSIONS READ AS UNDER: - (I) THE ASSESSEE (MURJI DANICHA), AGE 90 YEARS, HAS CARRIED OUT O NLY AGRICULTURAL ACTIVITIES IN PAST, MAINLY SO AFTER HIS RETIREMENT IN THE YEAR 2000, WHICH SHOWS THAT OTHER THAN SOURCE OF SALE OF THE SAID LAND, THERE IS NO PROBABILITY OF HIM HAVING OTHER SOURCES OF INCOME SO AS TO GENERATE THE EXTENT OF CASH AS FOUND O R EXPENDITURE INCURRED. THUS, THERE IS REASONABLE AND PROXIMATE CONNECTION BETWEEN THE CASH FOUND AND THE SOURCE THEREOF, AS EXPLAINED PARTICULARLY BY HIS SON MR. DESAR DANICHA, RIGHT AT THE TIME OF SEARCH. NO OTHER SOURCES OF INCOME/OLD ASSETS ARE FOUND O R EVEN ASSESSED FOR ANY OF THE YEARS U/S.153A. (II) THE EXPLANATION OF THE ASSESSEE AND THAT OF HIS SON AS REGARDS SOURCE OF CASH, DIARY ENTRIES AND SATAKHAT WERE FURNISHED AT THE PRIMARY STAGE ITSELF AND NOT BY WAY OF AN AFTERTHOUGHT. BESIDES, THE SAME A RE SUPPORTED AND ARISE FROM THE SATAKHAT ACTUALLY FOUND DURING SEARCH AND IN WHICH THE AMOUNT OF RS.1,07,00,000/ - IS CLEARLY MENTIONED IN RESPECT OF THE SAME LAND WHICH HAS LATER BEEN SOLD. THE ASSESSEE AND HIS SON HAVE ACCEPTED AND OWNED UP THE SATAKHAT A ND HAVE ALSO EXPLAINED ALL DETAILS OF THE UTILIZATION OF THE SAID FUNDS (PB NO.16) . THUS THE SATAKHAT HAVING BEEN ACTUALLY FOUND AND ADMITTED BY THE ASSESSEE AND HIS JOINT OWNER, THE 14 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA PRESUMPTION U/S.132(4A) COMES INTO PLAY, PARTICULARLY AFTER ADMISSION BY THE LAND OWNERS U/S.132(4). THE REGISTERED AGREEMENT OF SALE WAS NOT FOUND DURING SEARCH. (III) IT IS NOT ONLY THE SATAKHAT WHICH IS THE POINTER TO THE SOURCE OF THE CASH FOUND. THEIR DIARY IS ALSO FOUND, WHEREIN VARIOUS NOTINGS ALONG WITH FIGURES HAVE BE EN MADE. THE SON OF ASSESSEE HAS EXPLAINED THE DIARY NOTINGS IN HIS ANSWER NO.8 OF HIS STATEMENT. PAGE NO.1 OF THE DIARY (RUNNING PAGE NO.60 OF PB) CLEARLY MENTIONS THE NOTICE 500 X 107 = 5350000. THIS SHOWS THAT THE ASSESSEE RECEIVED THE SAID AMOUNT IN 107 BUNDLES OF NOTES OF RS.500/ - EACH. AS THE AMOUNT IS RECEIVED JOINTLY BY THE ASSESSEE AND HIS SON, THE SAME CONSTITUTES HALF THE SUM OF RS.1,07,00,000/ - . BELOW THE SAME, NOTING IN GUJARATI IS MADE WHICH MEANS, DULY TRANSLATED, TOTAL AMOUNT RECEIVED. O N THE OTHER SIDE OF THE DIARY PAGE NO.2, THE TITLE IN GUJARAT AAPEL (MEANING THEREBY, GIVEN) IS MENTIONED AND BELOW THE SAME VARIOUS NAMES AND FIGURES ARE STATED. HENCE, THE DIARY SHOWS AMOUNTS PAID OUT OF THE AFORESAID AMOUNT RECEIVED. ON PAGE 14 AND 15 OF THE DIARY, SUMMARY IS GIVEN. THEREFORE, THE AVAILABILITY OF A SATAKHAT COUPLED WITH DIARY NOTINGS CLEARLY SHOW THAT THE ASSESSEE RECEIVED THE AMOUNT OF RS.1,07,00,000/ - IN FEBRUARY, 2007, WHICH IS THE SAME MONTH OF EXECUTING REGISTERED SALE DEEDS. T HUS, THE EXPLANATION AND ADMISSION OF THE ASSESSEE RIGHT AT THE TIME OF SEARCH IS NOT AN EMPTY OR BASELESS EXPLANATION BUT IT IS CORROBORATED BY MATERIAL FOUND AND HENCE, THE SALE IS REQUIRED TO BE ACCEPTED BY THE DEPT. (IV) BOTH THE ASSESSEES HAVE ADMITT ED TO RECEIVING RS.1,07,00,000/ - FOR THE SALE OF LAND, HENCE ADMISSION OF ASSESSEE, WHEN NOT RETRACTED FOR GOOD REASONS, CANNOT BE BRUSHED ASIDE BY THE DEPT. STATEMENT U/S.132(4) IS A SOLEMN AFFIRMATION RECORDED ON OATH UNDER THE OATHS ACT 1969 AND HENCE S UCH ADMISSIONS HAVE BEEN HELD BY COURTS TO BE BINDING ON THE DEPONENT. WHEN THE ASSESSEE HAS NOT RETRACTED FROM HIS STATEMENT, THE DEPARTMENT IS BOUND TO ACCEPT THE ADMISSION. IN THE CASE OF A.C.I.T. VS. RAMESHCHANDRA R. PATEL, 89 ITD 202 (AHD.(TM) , IT IS HELD BY AHMEDABAD THREE MEMBER BENCH THAT AN ADMISSION STATEMENT U/S.132(4) CAN BE USED AS EVIDENCE 15 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA AGAINST THE ASSESSEE. IN HOTEL KIRAN VS. A.C.I.T. 82 ITD 453 (PUNE) , IT IS HELD THAT STATEMENT U/S.132 (4) HAS GREAT EVIDENTIAL VALUE AND IT IS BINDING. IN THIS CASE THE ASSESSEE NOT ONLY ADMITTED PAYMENT OF ON MONEY BUT ALSO ACCEPTED THAT IT WAS PAID OUT OF SUPPRESSED PROFITS OF THE FIRM AND HENCE THE TRIBUNAL HELD THAT THERE WAS NEXUS BETWEEN PAYMENT OF MONEY AND PROFITS. (V) WHAT IS OFFERED TO TAX BY AN A SSESSEE, WHETHER BY WAY OF DISCLOSED OR UNDISCLOSED INCOME, CANNOT BE REJECTED BY THE DEPT. THERE IS NO SUCH PROVISION IN THE ACT. SEC.58 OF THE INDIAN EVIDENCE ACT 1871 PROVIDES THAT FACTS ADMITTED NEED NOT BE PROVED. (VI) THE BUYER CANNOT BE EXPECTED TO ADMIT THAT HE PAID THE SAID AMOUNT. NO BUYER WOULD ORDINARILY MAKE ADMISSION THAT GOES AGAINST HIM. MOREOVER, SUCH AN ADMISSION WOULD MAKE HIM A HOSTILE WITNESS AND FOR THIS REASON ALSO, STATEMENT OF SUCH A WITNESS CANNOT BE SAID TO BE RELIABLE TO BE HELD AGAINST THE ASSESSEE. (VII) IT HAS BEEN HELD IN MANY CASES THAT MERELY BECAUSE EVIDENCE SHOWING RECEIPT OF ON MONEY IS FOUND FROM THE HANDS OF THE SELLER, ONLY BECAUSE OF THAT THE BUYER CANNOT BE IMPLICATED TO THE EFFECT THAT HE PAID THAT MUCH AMOUNT OR THAT IT WOULD CONSTITUTE UNDISCLOSED EXPENDITURE IN THE HANDS OF THE BUYER, ALTHOUGH THE SELLER MAY ADMIT THE SAME. THE SAME REASONING IS APPLICABLE IN THE REVERSE IN THE PRESENT CASE. WHEN THE SELLER HAS CLEARLY ADMITTED TO THE SALE PRICE AND WHEN THE SAM E IS FURTHER PROVED BY EVIDENCE IN THE FORM OF SIGNED AGREEMENT AND DIARY NOTINGS, THE SAME SHOULD HAVE BEEN ACCEPTED BY THE A.O. AS BELONGING TO THE ASSESSEE. (VIII) IT IS NOT EVEN THE CASE OF THE A.O. THAT THE PROVISIONS OF SEC.2(14) DO NOT APPLY OR THA T THE SALE IS NOT EXEMPT. IT IS PERTINENT TO NOTE THAT IN THE CASE OF THE ASSESSEE, FOR A.Y. 2007 - 08, BEING THE YEAR OF SALE OF LAND, THE CLAIM FOR EXEMPTION HAS BEEN ACCEPTED BY THE A.O. BECAUSE THE RETURNED INCOME OF RS.1,100/ - HAS BEEN ASSESSED U/S.153A OF THE ACT AFTER CONSIDERING THE EVIDENCE IN SUPPORT OF EXEMPTION THAT HAS BEEN SUBMITTED, AS ALSO IN VIEW OF THE EXPLANATORY NOTE ALONG WITH THE RETURN OF INCOME. 16 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA (IX) SEC.292C NOW PROVIDES THAT WHERE ANY DOCUMENTS ETC. ARE FOUND DURING THE COURSE OF SE ARCH OR SURVEY, IN ANY PROCEEDINGS UNDER THE ACT, IT MAY BE PRESUMED THAT SUCH DOCUMENTS ETC. BELONG TO SUCH PERSON. IN THIS CONTEXT, THE ASSESSEE HAS NOT RETRACTED FROM HIS STATEMENT AND HENCE ONCE THE DEPT. HAS APPLIED THE PRESUMPTION PROVISIONS FOR BELI EVING THE STATEMENT AS WELL AS THE DIARY PAPERS IN RESPECT OF THE PAYMENT SIDE, THE DEPT. OUGHT TO ACCEPT THE EXPLANATION REGARDING RECEIPTS SIDE ALSO, PARTICULARLY WHEN IT IS SUPPORTED BY THE SATAKARAR IS FOUND. (X) ORDINARILY, IF ANY AGREEMENT SHOWING H IGHER AMOUNT OF SALES IS FOUND WHEREAS THE REGD. SALE DEED IS FOR A LOWER AMOUNT, I N CASE OF BUILDERS IN PARTICULAR, THE DEPT. GOES BY THE HIGHER AMOUNT ON THE PRESUMPTION THAT THE DOCUMENT MUST HAVE BEEN REGD. FOR A LOWER AMOUNT. IN THE PRESENT CASE THERE FORE, IT IS APPARENT THAT THE DEPT. HAS CHOSEN TO IGNORE THE STAKARAR AFTER REALIZING THAT THE CAPITAL GAIN ARISING THEREFROM IS NOT CHARGEABLE TO TAX AND THEREFORE, DEPT. AHS MADE UNJUST ATTEMPT TO TAX THE ASSESSEE IN ANOTHER MANNER. (XI) THE SATAKARAR H AS BEEN SIGNED BY THE ASSESSEE, IT MENTIONS THE SPECIFIC PROPERTY SOLD, IT IS SIGNED BY TWO WITNESSES, BOTH OF WHOM HAVE LATER CONFIRMED THE SAME BY WAY OF SWORN AFFIDAVITS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. IT IS NOT AN UNCOMMON PRACTICE THAT TH E INITIAL AGREEMENT AND THE FINAL CONVEYANCE ARE EXECUTED IN DIFFERENT NAMES. (XII) THE A.O. HAS RELIED UPON STATEMENT OF THE BUYER MR. NARENDRASINH WHO HAS DENIED MAKING PAYMENT OF THE FULL AMOUNT OF RS.1,07,00,000/ - FOR THE LAND. HOWEVER, HIS STATEMENT SHOULD NOT BE RELIED UPON BECAUSE THERE ARE MANY INCONSISTENCIES THEREIN (PB NO.28 31). IN QUE.NO.20 HE WAS ASKED THAT HE DOES NOT EVEN KNOW WHO IS THE SELLER OF THE LAND ALTHOUGH THE SALE DEED HAS BEEN EXECUTED IN HIS NAME, WHEREAS HE HAS ONLY STATED TH AT NAME OF THE BUYER CAN BE KNOWN TO HIS FATHER. HE HAS ALSO STATED THAT HE BELIEVED THAT THE LAND WAS PURCHASED FROM RASIKBHAI, WHEREAS IT HAS BEEN SOLD BY ME. IN VIEW OF THE ABOVE, THE ENTIRE TONE OF HIS STATEMENT SHOWS THAT 17 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA THE FIGURE OF RS.2,43,000/ - M ENTIONED BY HIM CANNOT BE ACCEPTED AS RELIABLE AND HENCE HIS STATEMENT SHOULD NOT BE GIVEN MUCH VALUE. LIKEWISE OTHER STATEMENTS OF RASIKBHAI AND NARANBHAI ALSO CANNOT BE USED AGAINST ME BECAUSE THEY WOULD GAIN BY NOT ADMITTING BECAUSE THEY ACTED AS INTERM EDIARIES. (XIII) THE STATEMENTS OF OTHER PARTIES, NAMELY THE BUYER NARENDRASINH JADEJA AND ONE MR. RASIK PATEL (PAGE 28 AND 26 OF PB) CLEARLY SHOW THAT THEY HAVE GIVEN CONTRADICTORY STATEMENTS ABOUT EACH OTHER. THE REGD. BUYER DOES NOT EVEN REMEMBER THE N AME OF THE OWNER. HE ALSO SAYS THAT THE PAYMENT WAS MADE BY HIS FATHER GULABSINH AND HENCE ONLY HE CAN EXPLAIN THE SOURCES OF THE PAYMENT. HE DOES NOT REMEMBER OTHER PARTIES AND HE ALSO STATES THAT RASIKBHAI HAS TOLD LIES. THE FATHER GULABSINH WHO MADE THE PAYMENT HAS NOT GIVEN ANY STATEMENT AGAINST THE ASSESSEE. HENCE, IF THE REGD. BUYER HAS NOT GIVEN A RELIABLE STATEMENT AND WHEN HE HAS NOT STATED THAT HE DID NOT GIVE THE FULL AMOUNT TO THE SELLER, THE STATEMENT OF THIRD PARTIES LIKE NARANBHAI GADHVI CANN OT BE SAID TO BE RELIABLE TO BE USED AGAINST THE ASSESSEES. (XIV) THE ADVOCATE NARANBHAI DOES NOT REMEMBER OR KNOW ANYTHING ABOUT HIS ACCOUNTS. IN QUESTION NO.31 HE SAYS THAT THE SALE DEED WAS EXECUTED IN FAVOUR OF SHRI GULABSINH WHEREAS IN FACT IT IS NOT IN THE NAME OF GULABSINH. MOREOVER, SAID NARANBHAI HAS REFUSED TO CROSS EXAMINE THE ASSESSEES. ALL THESE GO TO SHOW THAT THE SAID WITNESS IS ALSO NOT RELIABLE. AS THERE ARE INHERENT CONTRACTIONS IN THE STATEMENTS OF VARIOUS PARTIES, THE SAME CANNOT BE SAI D TO BE RELIABLE EVIDENCE AGAINST THE ASSESSES. AS AGAINST THIS, THE STATEMENT OF BOTH ASSESSES ARE SAME, THEY ARE CLEAR AND ARE BACKED BY MATERIAL FOUND AND ARE ALSO CONFIRMED BY THE WITNESSES TO THE STAKARAR. 1 4 . WE HAVE HEARD BOTH THE PARTIES AND CARE FULLY PERUSED THE MATERIAL S PLACED BEFORE US INCLUDING THE WRITTEN SUBMISSIONS FILED BY BOTH THE PARTIES AND ALSO THE ORDERS PASSED BY THE ASSESSING OFFICER AND THE CIT(A). SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT U/S 132 OF THE INCOME - TAX ACT ON 01. 08.2007 LEADING TO 18 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA DETECTION AND SEIZURE OF CASH AMOUNTING TO RS.19,50,000/ - FOUND AT THE PREMISES OF SHRI MRUJIBHAI DAYABHAI DANICHA AND ALSO DOCUMENTS EVIDENCING INVESTMENT S /EXPENSES A GGREGATING TO RS.63,01,176/ - MADE/INCURRED BY SHRI DESAR MURJI DANICHA IN THE MONTH OF FEBRUARY AND MARCH 2007. THE AFORESAID FIGURES ARE NOT IN DISPUTE. WHAT IS IN DISPUTE, HOWEVER, IS THE NATURE AND SOURCE OF INVESTMENT S / EXPENSES AND CASH FOUND AT THE TIME OF SEARCH. BOTH T HE ASSESSEE S HAVE S OUGHT TO EXPLAIN THE NATURE AND SOURCE OF TH E IMPUGNED INVESTMENTS/EXPENSES AND CASH FOUND AT THE TIME OF SEARCH WITH REFERENCE TO THE AMOUNT OF RS.1,07,00,000/ - RECORDED IN SATAKHAT DATED 06.03.2006. CASE OF THE REVENUE, ON THE OTHER HAND, IS THAT THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE SAID AMOUNT OF RS.1,07,00,000/ - RECORDED IN SATAKHAT WAS ACTUALLY RECEIVED BY THE ASSESSEE S . 1 5 . WE HAVE PERUSED THE SATAKHAT DATED 06.03.2006, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE . THE ASSESSEE HAS ALSO SUPPL IED ENGLISH TRANSLATION OF THE SAID SATAKHAT , A COPY OF WHICH HAS BEEN PLACED AT PAGE NO. 32 OF THE PAPER BOOK. WE HAVE PERUSED THE SAID AGREEMENT , WHICH, INTER ALIA, STATE S: . T OTAL SALE CONSIDERATION HAS BEEN AGREED UPON AT RS.1,07,00,000/ - IN FIGURES RUPEES ONE CRORE SEVEN LACS ONLY. AS TOKEN AMOUNT OF THE SAME, WE HAVE TODAY RECEIVED RS.1,50,000/ - IN FIGURES RUPEES ONE LACS FIFITY THOUSAND ONLY FROM THE BUYER SHRI SHYAM REMESHBHAI PATHAK AGE 24 OCCUPATION - SALARIED RESIDING AT MOTI BHUJPUR TALUKA MUND RA DIST. KACHCH. AND ON THE CHARGE ON THE SAID LAND BEING SATISFIED, AFTER GIVING NOTICE OF SEVEN DAYS, PAYMENT SHALL BE MADE BY THE BUYER AT TEN (10) PERCENTAGE AND THEREAFTER WITHIN THREE MONTHS FROM THE DATE OF SUCH NOTICE FULL PAYMENT SHALL BE MADE BY THE BUYER........ . THE SAID AGREEMENT IS DATED 06.03.2006. THE SAID AGREEMENT DOES NOT STATE ANYWHERE THAT A SUM OF RS.1,07,00,000/ - WAS PAID BY THE PROSPECTIVE BUYER TO THE SELLER S . WHAT IS STATED IN CLEAR TERMS IN THE SAID AGREEMENT IS THAT A TOKEN AMOU NT OF RS.1,50,000/ - ALONE WAS PAID BY THE PROSPECTIVE BUYER (SHRI SHYAM RAMESHBHAI PATHAK) TO BOTH THE ASSESSEES. THEREFORE THIS DOCUMENT , I.E. , AGREEMENT TO SELL , CANNOT BE INTERPRETED TO MEAN THAT A SUM OF RS.1,07,00,000/ - WAS ACTUALLY PAID BY THE PROSPE CTIVE BUYER , I.E., SHRI SHYAM R AMESHBHAI PATHAK , TO BOTH THE ASSESSEES. 19 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA SATAKHAT IS WITNESSED BY TWO WITNESSES. THEIR AFFIDAVITS HAVE BEEN FILED BY THE ASSESSEE S BEFORE US. BOTH THE AFFIDAVITS ARE SIMILARLY WORDED AND DATED 30.12.2009. NONE OF THE AFORESAI D AFFIDAVITS ALLEGEDLY SIGNED BY THE WITNESSES TO THE AGREEMENT TO SELL INDICATE THAT A SUM OF RS.1,07,00,000/ - WAS PAID BY THE PROSPECTIVE BUYER TO THE ASSESSEES. IN THIS VIEW OF THE MATTER, THE SATAKHAT, BEING A MERE AGREEMENT TO SELL, DOES NOT ESTABLISH THAT A SUM OF RS.1,07,00,000/ - WAS AT ALL RECEIVED BY THE ASSESSEE S OR PAID BY THE PROSPECTIVE BUYER TO THE ASSESSEES . 1 6 . THOUGH THE AGREEMENT TO SELL WAS EXECUTED BETWEEN BOTH THE ASSESSEES AND SHRI SHYAM RAMESHBHAI PATHAK ON 06.03.2006, THE SALE DEED WAS EVENTUALLY EXECUTED ALMOST AFTER A YEAR ON 09.02.2007. FIRST SALE DEED DATED 09.02.2007 CONVEYING THE PROPERTY TO SHRI NARENDRASINH GULABSINH JADEJA WAS EXECUTED B Y SHRI DESAR MURJI DANICHA IN WHICH SALE CONSIDERATION IN RESPECT OF LAND BEARING SURVEY NO.83/2 WAS SHOWN AT RS.1,45,000/ - . CLAUSE NO.5 OF THE AFORESAID SALE DEED CONTAINS SPECIFIC RECITAL THAT A SUM OF RS.1,45,000/ - ALONE WAS GIVEN BY THE BUYER TO SHRI DESAR MURJI DANICHA. SECOND SALE DEED IS ALSO DATED 09.02.2007 WHICH HAS BEEN EXECUTED B Y SHRI MURJI DAYA DANICHA CONVEYING THE PROPERTY TO THE SAME BUYER AS IN FIRST SALE DEED IN WHICH IT IS CLEARLY STATED THAT SALE CONSIDERATION OF RS.98,000/ - ALONE WAS PAID BY THE BUYER TO SHRI MURJI DAYA DANICHA. IT IS CLEAR THAT BOTH THE SALE DEEDS STATE IN CLEAR AND UNAMBIGUOUS TERMS THAT A SUM OF RS.2,43,000/ - ALONE WAS PAID BY THE BUYER TO BOTH THE ASSESSEES. THEREFORE BOTH THE SALE DEEDS CANNOT BE INTERPRETED TO MEAN THAT A SUM OF RS.1,07,00,000/ - WAS PAID BY THE BUYER TO BOTH THE ASSESSEES AS SALE CON SIDERATION. 1 7 . IT IS RELEVANT TO OBSERVE THAT STAMP DUTY HAS BEEN PAID ON THE SAME VALUE AS THE ONE RECORDED IN THE SALE DEEDS. IF THE ASSESSEE S HAD RECEIVED LARGER SUM AS SALE CONSIDERATION THAN WHAT IS STATED IN THE SALE DEEDS, IT WAS INCUMBENT UPON THE M TO DECLARE THE SAME IN THE SALE DEED AND PAY THE STAMP DUTY ACCORDINGLY. THE FACT THAT THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT HAS ALSO ACCEPTED THE VALUATION OF THE LAND AS DECLARED IN THE SALE DEED S FOR THE PURPOSE OF STAMP DUTY SHOWS THAT THE VALUE OF THE LAND WAS SAME AS SHOWN IN THE SALE DEED S . IN THIS CONNECTION, THE ASSESSEE HAS FILED A COPY OF NOTICE DATED 19.02.2008 RECEIVED FROM NAIB COLLECTOR, STAMP DUTY BY WHICH THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO 20 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA WHY THE STAMP DUTY SHOULD NOT BE CHARGED ON THE BASIS OF VALUE OF LAND DECLARED IN SATAKHAT. BOTH THE ASSESSEES HAVE NOT FURNISHED A COPY OF REPLY GIVEN BY THEM TO NAIB COLLECTOR IN THIS BEHALF NOR APPRISED US ABOUT THE OUTCOME OF THE SAID SHOW - CAUSE NOTICE ISSUED BY NAIB CO LLECTOR. IT APPEARS THAT NAIB COLLECTOR HAS EVENTUALLY ACCEPTED THE VALUE OF LAND DECLARED IN THE SALE DEED ELSE THE ASSESSEES WOULD HAVE BROUGHT THE MATTER TO THE NOTICE OF THIS TRIBUNAL. NO MATERIAL, EXCEPT SATAKHAT, HAS BEEN PLACED EITHER BEFORE THE ASS ESSING OFFICER OR BEFORE THE LD . CIT(A) OR BEFORE US TO SHOW THAT THE VALUE OF THE LAND SOLD BY THE ASSESSEE WAS MORE THAN WHAT WAS DECLARED OR AGREED UPON BETWEEN THE PARTIES IN THE SALE DEED. 1 8 . THE CASE OF BOTH THE ASSESSEES IS THAT BOTH PIECES OF LAN D WERE ACTUALLY SOLD BY THEM TO SHRI NARANBHAI GADHAVI, ADVOCATE AND NOT TO THE PURCHASER SHOWN IN THE SALE DEEDS . BOTH T HE ASSESSEES BEING PRIVY TO THE SALE DEED ARE BOUND BY THE SALE DEED. THEY HAVE NOT PLACED ANY MATERIAL ON RECORD TO SHOW THAT THEY EVE R CHALLENGED THE AUTHENTICITY OF THE SALE DEEDS BEFORE THE COMPETENT FORUM. BESIDES, THEY THEMSELVES CANNOT PLEAD AGAINST WHAT THEY HAVE CONSCIOUSLY STATED IN THE SALE DEEDS. EVIDENCE AVAILABLE ON RECORD, ON THE OTHER HAND, SHOWS THAT BOTH PIECES OF LAND W ERE SOLD TO SHRI NARENDRASINH JADEJA AND NOT TO SHRI NARANBHAI GADHAVI, ADVOCATE , AS ALLEGED BY BOTH THE ASSESSEES . 1 9 . THE OBSERVATIONS MADE BY THE LD . CIT(A) THAT THE STATEMENTS GIVEN BY SHRI NARANBHAI GADHAVI, ADVOCATE AND SHRI RASIKBHAI PATEL, BROKER WERE FULL OF CONTRADICTIONS DOES NOT LEAD TO THE CONCLUSION THAT THE SAID SUM OF RS.1,07,00,000/ - WAS PAID BY THE BUYE R TO THE SELLER OR THE SAID SUM OF RS.1,07,00,000/ - WAS RECEIVED BY BOTH THE ASSESSEES FROM THE BUYER ON SALE OF LAND . 2 0 . EXCEPT THAT BOTH THE ASSESSEES CLAIM TO HAVE RECEIVED A SUM OF RS.1,07,00,000/ - ON SALE OF LAND, THERE IS NO EVIDENCE ON RECORD TO ESTABLISH THEIR CLAIM. THEIR OWN TESTIMONY IN THIS BEHALF IS HARDLY OF ANY ASSISTANCE TO THEM AS IT IS OF SELF - SERVING NATURE. 21. THE PLEA OF THE ASSESSEE THAT P AGE NO.1 OF THE DIARY (RUNNING PAGE NO.60 OF PB) CLEARLY MENTIONS 500 X 107 = 5350000 AND THEREFORE IT SHOULD BE TAKEN TO MEAN THAT THE SAID SUM WAS RECEIVED ON SALE OF LAND. IT WAS EXPLAINED THAT THE SAID 21 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA SUM OF RS.53,50,000 / - REPRESENTED HALF SHARE OF EACH OF THE ASSESSEES. WE ARE AFRAID IF ANY SUCH CONCLUSION CAN AT ALL BE DRAWN ON THE BASIS OF AFORESAID JOTTINGS. THE AFORESAID SEIZED MATERIAL NEITHER INDICATES THE DATES ON WHICH THE AFORESAID BUNDLES OF CURRENCY NOTES WERE RECEIVED NOR THE NAMES OF THE PERSONS FROM WHOM THEY WERE RECEIVED NOR THE OCCASION ON WHICH THEY WERE RECEIVED. THE AFORESAID MATERIALS AS THEY EXIST C OULD ALSO MEAN THAT THEY WERE RECEIVED FROM UNEXPLAINED SOURCES AND UTILIZED FOR MAKING THE IMPUGNED IN VESTMENTS. SECONDLY, THE SHARES OF BOTH THE ASSESSESS WERE NOT EQUAL AND THEREFORE THEIR GETTING SHARE DOES NOT INSPIRE CONFIDENCE. THIRDLY, THE FACT THAT ONLY 53,50,000/ - WAS RECORDED IN THE MATERIALS SEIZED FROM THE PREMISES OF THE ASSESSESS DOES NOT B Y ITSELF SUPPORT THAT A SUM OF RS.1.07 CRORES WAS RECEIVED IN CASH. 2 2 . BOTH THE ASSESSEES CLAIM THAT THEY DID NOT HAVE ANY OTHER OSTENSIBLE SOURCE OF INCOME FOR MAKING THE IMPUGNED INVESTMENTS AND THEREFORE IMPUGNED SUMS WERE NOT LIABLE TO BE TAXED IN THEIR HANDS. HOWEVER, THE PROVISIONS OF SECTION 68/69/69A/69B/69C DO NOT REQUIRE THAT THE ADDITIONS CONTEMPLATED BY THEM CAN BE MADE ONLY WHEN AN ASSESSEE, WHO IS FOUND TO HAVE MADE UNEXPLAINED INVESTMENTS, HAS OSTENSIBLE SOURCE OF INCOME. THEY APPLY WH EN AN ASSESSEE FAILS TO SATISFACTORILY EXPLAIN THE NATURE AS WELL AS SOURCE OF CASH CREDITS/INVESTMENTS/EXPENSES AND NOT WHEN HE SATISFACTORILY EXPLAINS THEIR NATURE AND SOURCE OR HAS REASONABLY OSTENSIBLE SOURCE OF FUNDING. IT IS BY FICTION OF LAW THAT SU CH UNEXPLAINED INVESTMENTS ARE TAXED IN THE HANDS OF THE PERSON WHO IS FOUND TO HAVE MADE INVESTMENTS EVEN IF HE HAS NO OSTENSIBLE SOURCE OF INCOME. IT IS MERE UNEXPLAINED INVESTMENT BY AN ASSESSEE WHICH ATTRACTS LIABILITY U/S 69, 69A AND 69B. THERE IS NOT HING IN THE PROVISIONS OF SECTIONS 69, 69A, 69B AND 69C TO WARRANT THAT AN ASSESSEE MUST HAVE OSTENSIBLE SOURCE OF INCOME BEFORE UNEXPLAINED INVESTMENTS COULD BE TAXED IN HIS HAND. IN THE PRESENT CASE, BOTH THE ASSESSEES HAVE FAILED TO SATISFACTORILY ESTAB LISH NOT ONLY THE NATURE BUT ALSO THE SOURCE OF FUNDS APPLIED IN THEIR INVESTMENTS/CASH FOUND/EXPENSES. 23. BOTH THE ASSESSEES WANT US TO BELIEVE THAT A SUM OF RS.1,07,000/ - WAS RECEIVED BY THEM FROM SHRI NARAN GADHVI ON SALE OF LAND TO HIM. ONE NEEDS TO PAUSE AND THINK FOR A WHILE AS TO WHETHER THERE IS ANY MATERIAL ON RECORD TO HOLD THAT 22 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA THE LAND WAS SOLD BY THE ASSESSEES TO HIM OR THAT THE SAID SUM OF MONEY WAS GIVEN BY SHRI GADHVI TO BOTH THE ASSESSEES. SUCH A LARGE SUM OF MONEY CANNOT BE RECEIVED BY A NYONE UNLESS IT IS GIVEN TO HIM BY SOMEONE. THE PERSON WHO HAS REPORTEDLY GIVEN THE SAID SUM OF MONEY THEREFORE NEEDS TO BE PROPERLY IDENTIFIED. SHRI NARAN GADHVI IS NEITHER PRIVY TO THE SALE DEED NOR THERE IS ANY EVIDENCE ON RECORD TO SHOW THAT THE LAND W AS PURCHASED BY SHRI NARAN GADHVI OR THAT HE WAS INVESTOR IN LAND OR THAT HE WAS IN POSSESSION OF LAND OR THAT A SUM OF RS.1,07,000/ - WAS PAID BY HIM TO THE ASSESSE E S OR THAT HE WAS IN A FINANCIAL POSITION TO PAY THE SAID SUM OF MONEY OR THAT THE FAIR MARK ET VALUE OF LAND WAS CLOSE TO RS.1,07,000/ - . IT IS THUS A CASE WHERE IT IS NOT POSSIBLE TO HOLD THAT SUCH A LARGE SUM OF MONEY, WHICH IS ALLEGED TO HAVE BEEN GIVEN BY SHRI NARAN GADHVI, COULD BE SAID TO HAVE BEEN GIVEN BY SHRI GADHVI. SHRI GADHVI CANNOT, O N THE FACTS OF THE CASE, BE CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF INVESTMENT IN ACQUISITION OF LAND WHICH HE HAS NEITHER BEEN FOUND TO HAVE MADE NOR ADMITTED BY HIM TO HAVE BEEN MADE. IT IS HOWEVER THE CASE OF BOTH THE ASSESSEES THAT THEY DID NOT HAVE ANY OTHER OSTENSIBLE SOURCE OF INCOME EXCEPT AGRICULTURAL INCOME FOR MAKING THE IMPUGNED INVESTMENTS AND THEREFORE THE NATURE AND SOURCE OF THEIR INVESTMENTS WOULD NATURALLY COME OUT OF MONEY RECEIVED ON SALE OF LAND. ON ONE HAND, BOTH THE ASSESSEES MAINTAIN IN THE SALE DEEDS THAT THEY HAVE RECEIVED ONLY RS.2,43,000/ - ON SALE OF LAND AND PA ID STAMP DUTY ACCORDINGLY, THEY, ON THE OTHER HAND, WANT US TO BELIEVE , AFTER THEY WERE DETECTED IN THE COURSE OF SEARCH OPERATIONS TO HAVE MADE IMPUGNED INVESTMENT S, THAT THEY HAVE RECEIVED RS.1,07,000/ - FROM A PERSON WHO IS NOT A PARTY TO THE SALE DEED AND FOR WHICH THERE IS NO EVIDENCE. 2 4 . IN TERMS OF SECTIONS 69/69A/69B/69C, THE BURDEN IS ON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF THE I NVESTMENTS MADE OR EXPENDITURE INCURRED BY HIM. THE EXPLANATION AS REGARDS THE NATURE AND SOURCE OF INVESTMENTS/EXPENSES, ETC., ENVISAGED BY THE AFORESAID PROVISIONS IS A REASONABLE EXPLANATION AND NOT A FANTASTIC EXPLANATION BEREFT OF EVIDENCE OR SUBSTANC E . THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE. IN FACT, THE EVIDENCE AVAILABLE ON RECORD SHOWS THAT A SUM OF RS.2,43,000/ - ALONE WAS PAID TO THE ASSESSEE S ON EXECUTION OF SALE DEED. THERE IS NO EVIDENCE ON RECORD TO 23 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA ESTABLISH TH E CLAIM OF BOTH THE ASSESSEES THAT THEY HAD RECEIVED A SUM OF RS.1,07,00,000/ - FROM THE ACTUAL BUYER SHOWN IN THE SALE DEED OR PROSPECTIVE BUYER OF THE LAND SHOWN IN SATAKHAT OR FROM SHRI GADHVI . T HERE IS NO SATISFACTORY EXPLANATION ON RECORD REGARDING THE NATURE AND SOURCE OF THE INVESTMENTS MADE OR EXPENSES INCURRED AND THE CASH FOUND AT THE TIME OF SEARCH. THE ASSESSING OFFICER HAS RIGHTLY TAXED THE IMPUGNED SUMS IN THEIR HANDS FOR WANT OF SATISFACTORY EXPLANATION . THE ORDER PASSED BY THE LD CIT(A) IS BA SED ON CONJECTURES AND SURMISES. THERE IS A HUGE DIFFERENCE BETWEEN THE SALE CONSIDERATION OF RS.2,43,000/ - DISCLOSED IN THE SALE DEEDS AND CONSIDERATION OF RS.1,07,00,000/ - WHICH IS CLAIMED BY THE ASSESSEE S TO HAVE BEEN RECEIVED. THE CLAIM OF THE ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE. IN THIS VIEW OF THE MATTER, THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER IN BOTH THE CASES ARE CONFIRMED. BOTH THE APPEALS FILED BY THE REVENUE ARE ALLOWED. 2 5 . WE SHALL NOW TAKE UP THE C ROSS - OBJECTIONS FILED B Y BOTH THE ASSESSEES . IN CO NO.15/RJT/2011, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1. THE LEARNED C.I.T. (APPEALS) - I, RAJKOT HAS RIGHTLY DELETED THE ADDITION OF RS.54,50,000/ - MADE BY THE A.O. BY WAY OF TREATING IT AS PAYMENT OUT OF UNDISCLOSED I NCOME BASED ON NOTINGS ON PAGES OF ANNEXURE A - 2. 2. THE LEARNED C.I.T. (APPEALS) - I, RAJKOT HAS RIGHTLY DELETED THE ADDITION OF RS.8,51,175/ - MADE BY THE A.O. BY WAY OF TREATING IT AS PAYMENT MADE OUT OF UNDISCLOSED INCOME BASED ON NOTINGS ON PAGES OF ANNE XURE A - 1. 2 6 . IN CO NO.16/RJT/2011, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1. THE LEARNED C.I.T. (APPEALS) - I, RAJKOT HAS RIGHTLY DELETED THE ADDITION OF RS.19,50,000/ - MADE BY THE A.O. BY WAY OF TREATING CASH FOUND DURING THE SEARCH AS UNE XPLAINED. 2 7 . THE CROSS - OBJECTIONS FILED BY BOTH THE ASSESSE E S SIMPLY SUPPORT THE ORDER PASSED BY THE LD . CIT(A). WE HAVE ALREADY REVERSED THE ORDER OF THE LD CIT(A). IN THIS VIEW OF THE MATTER, BOTH THE MEMORANDA OF CROSS - OBJECTIONS ARE DISMISSED. 2 8 . BEFORE PARTING WITH THE MATTER, WE WISH TO EMPHASIZE THAT WE HAVE ALSO PERUSED THE JUDGMENT DATED 26.07.2013 OF THE HONBLE ALLHABAD HIGH COURT IN CIT 24 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA V. INTEZAR ALI, INCOME - TAX APPEAL NO.162 OF 2013 . NOTWITHSTANDING THE FACT THAT THE SAID JUDGMENT WAS NO T CITED BY ANY OF THE PARTIES BEFORE US , WE THOUGHT IT APPROPRIATE TO EXAMINE OURSELVES AS TO WHETHER THE BENEFIT OF THAT JUDGMENT COULD BE EXTENDED TO THE ASSESSEES . IN THAT CASE, THE ASSESSEE - RESPONDENT HAD SOLD AGRICULTURAL LAND FOR A SUM OF RS.1.20 CRO RES THOUGH APPARENT CONSIDERATION SHOWN IN THE SALE DEED WAS RS.22 LAKHS. THE ASSESSEE HAD DEPOSITED RS.1.08 CRORES RECEIVED IN CASH ON SALE OF LAND IN HIS BANK ACCOUNT. THE ASSESSEE HAD PRODUCED THE WITNESS ES TO THE SALE DEED, WHO PROVED THAT THE ASSESSEE HAD RECEIVED RS.1,08,32,752/ - AND WHICH HE DEPOSITED IN HIS BANK ACCOUNT. THE BANK MANAGER OF SYNDICATE BANK, WHICH WAS THE ONLY BANK IN TH AT VILLAGE, AND WHO HAD STAYED LATE IN THE EVENING AT THE REQUEST OF THE ASSESSEE, DEPOSED THAT THE ASSESSEE HAD DE POSITED THE ENTIRE AMOUNT IN HIS BANK AND WHICH HE HAD STATED TO BE THE SALE CONSIDERATION OF THE LAND SOLD BY HIM. EVIDENCE WAS LED BY THE ASSESSEE TO ESTABLISH THAT THE VALUE OF LAND IN THAT AREA WAS CLOSE TO THE AMOUNT OF SALE CONSIDERATION THAT WAS ACT UALLY RECEIVED. IN THAT CASE, THE ASSESSEE, AS AN HONEST CITIZEN, HAD MADE A COMPLAINT TO THE REGISTERING AUTHORITY THAT THE SALE DEED HAS BEEN REGISTERED AT A VALUE MUCH BELOW THE AMOUNT, WHICH HE HAD ACTUALLY RECEIVED . IT WAS IN THIS FACT - SITUATION THAT THE HONBLE HIGH COURT HAS HELD THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT COULD NOT BE TAXED AS INCOME FROM UNEXPLAINED SOURCES AS THE SOURCES OF DEPOSITS STOOD SATISFACTORILY EXPLAINED . IN THE CASE BEFORE US, THE FACT - SITUATION IS ALTOGETHER DIFFERENT . THE ASSESSEE DID NOT DEPOSIT THE SALE CONSIDERATION, WHICH HE CLAIMS TO HAVE RECEIVED IN CASH ON EXECUTION OF SALE DEED , IN BANK ACCOUNT. THE MONEY WAS KEPT OUTSIDE BANKING CHANNELS. INVESTMENTS MADE AND EXPENSES INCURRED BY THE ASSESSEE WERE DETECTED BY THE DEPARTMENT IN SEARCH AND SEIZURE OPERATIONS. THEY WERE NOT VOLUNTARILY DECLARED BY THE ASSESSEES. WITNESSES TO THE SALE DEED HAVE NEVER CONFIRMED THAT A SUM OF RS.1.07 CRORES WAS EVER PAID BY THE BUYER OR ANYONE ELSE ON HIS BEHALF TO THE ASSESSEE S . SE ARCHES WERE CARRIED OUT BY THE DEPARTMENT BUT NO DOCUMENT /RECEIPT/SLIP WAS FOUND , WHICH COULD ESTABLISH THAT THE ASSESSEES HAD RECEIVED RS.1.07 CRORES FROM THE BUYER OR ANY OTHER PERSON ON SALE OF LAND. CONTEMPORANEOUS EVIDENCE ON RECORD ALSO DOES NOT ESTA BLISH THAT THE ASSESSEES HAD RECEIVED A SUM OF RS.1.07 CRORES FROM THE 25 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA BUYER. THE ASSESSEE CONTENDS THAT THE LAND WAS SOLD TO SHRI NARAN GADHVI, ADVOCATE BUT GIVES NO EVIDENCE TO SUBSTANTIATE HIS CLAIM IN THIS BEHALF. SATAKHAT IS IN THE NAME OF ONE PERSON AND THE SALE DEED IS IN THE NAME OF A DIFFERENT PERSON. THERE IS A WIDE GAP OF ABOUT A YEAR BETWEEN THE DATE OF SATAKHAT AND DATE OF SALE DEED AND THAT TOO BETWEEN TWO DIFFERENT PERSONS . THE ASSESSEE HAS LED NO EVIDENCE TO ESTABLISH THAT THE MARKET VALUE O F LAND SOLD BY HIM WAS CLOSE TO RS.1.07 CRORES WHICH HE CLAIM S TO HAVE RECEIVED ON SALE OF LAND. HE NEVER REPORTED TO THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT THAT HE HAD ACTUALLY RECEIVED CONSIDERATION OF RS.1.07 CRORES ON SALE OF LAND AS AGA INST THE APPARENT CONSIDERATION OF RS.2.43 LAKHS SHOWN IN THE SALE DEEDS. RATHER THE ASSESSEE HAS AVOIDED TO PLACE THE RELEVANT INFORMATION BEFORE US AS TO THE OUTCOME OF THE PROCEEDINGS INITIATED BY NAIB COLLECTOR, STAMP DUTY BY HIS NOTICE DATED 19.02.200 8 BY WHICH BOTH THE ASSESSEE S W ERE CALLED UPON TO EXPLAIN AS TO WHY THE STAMP DUTY SHOULD NOT BE CHARGED ON THE BASIS OF VALUE OF LAND DECLARED IN SATAKHAT. BOTH THE ASSESSEES HAVE NOT FURNISHED A COPY OF REPLY GIVEN BY THEM TO NAIB COLLECTOR IN THIS BEHAL F NOR APPRISED US ABOUT THE OUTCOME OF THE SAID SHOW - CAUSE NOTICE ISSUED BY NAIB COLLECTOR. AS THE ASSESSE ES COULD NOT PRODUCE ANY DOCUMENT IN THIS REGARD, ADVERSE INFERENCE IN TERMS OF SECTION 114 OF THE EVIDENCE ACT SHOULD BE DRAWN TO THE EFFECT THAT HAD THOSE DOCUMENTS BEEN PRODUCED, THE SAME WOULD HAVE GONE AGAINST THE INTEREST OF BOTH THE ASSESSE E S. THE ASSESSEES HAVE NOT BEEN ABLE TO PLACE ANY MATERIAL TO ESTABLISH THAT THEY HAD RECEIVED RS.1.07 CRORES IN CASH ON SALE OF LAND. IN THE FACT - SITUATION BE FORE US, WE ARE AFRAID IF THE AFORESAID JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT WOULD AT ALL HELP THE ASSESSEES BEFORE US. 2 9 . RESULTANTLY, BOTH THE APPEALS FILED BY THE REVENUE ARE ALLOWED WHILE THE MEMORANDA OF CROSS - OBJECTIONS FILED BY BOTH THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED ON 13.09. 201 3 SD/ - SD/ - (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 13.09. 2013 B T 26 IT(SS) 78 & 79 - RJT - 2010 & CO 15 &16 - RJT - 2011 - SHRI DESAR MURJI DANICHA COPY OF ORDER FORWARDED TO: - 1 . APPELLANT ACIT, CENTRAL CI RCLE - 2, RAJKOT 2 . RESPONDENT - 1) SHRI DESAR MURJI DANICHA, VILLAGE BAROLI, TAL. MUNDRA, KUTCH 2) SHRI MURJI DAYA DANICHA, VILLAGE BAROLI, TAL. MUNDRA, KUTCH 3 . CONCERNED CIT , CENTRAL - II, AHMEDABAD 4 . CIT(A) - IV , AHMEDABAD 5 . DR, ITAT, RAJKOT 6 . GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT