The ACIT, Central Circle-2(3), Ahmedabad V. Shri Rajedrasinh R.Chavda, Himatnagar

ITSSA 847/AHD/2010

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2141 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Assessee Lawyers: K C THAKER
• Keywords: Document seized; Cost of acquisition; Documents seized
• Section: 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) IT(SS)A. NO: 847/AHD/2010 (ASSESSMENT YEAR: 2006-07) ACIT, CENTRAL CIRCLE-2(3), AHMEDABAD V/S SHRI RAJENDRASINH R. CHAVDA PROP. OF PAYAL BUILDERS, 15, DEV BHOOMI BUNGLOWS, BERNA ROAD, HIMATNAGAR (APPELLANT) (RESPONDENT) PAN: ACPPC0308N APPELLANT BY : SHRI RAJEEV AGARWAL, CIT/D R RESPONDENT BY : SHRI K.C. THAKER, A.R. ( )/ ORDER DATE OF HEARING : 04 -07-201 6 DATE OF PRONOUNCEMENT : 07 -07-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-III, AHMEDABAD DATED 19.10.2010 PERTAINING T O A.Y. 2006-07. IT(SS)A NO. 847/AHD/2010 . A.Y. 2006-07 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READ AS UN DER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND IN CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.3,37,58,800/- MADE BY T HE A.O. ON ACCOUNT OF UNDISCLOSED PAYMENT RECEIVED ON SALE OF LAND ON THE BASIS OF SEIZED DOCUMENTS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND IN CIRCUMSTANCES OF THE CASE IN NOT CONSIDERING THE FACTS AS BROUGHT ON BY TH E ASSESSING OFFICER IN HIS ASSESSMENT ORDER WHICH ARE BASED ON VARIOUS EVIDEN CES FOUND AND SEIZED DURING THE COURSE OF ACTION U/S.132 OF THE ACT AND ARE COR ROBORATIVE EVIDENCES IF CONSIDERED ALTOGETHER. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEA RCH ACTION U/S. 132 OF THE ACT WAS CARRIED OUT IN THE ASIAN GROUP OF CASES ON 07.02.2008. PURSUANT TO THE SEARCH OPERATIONS, A NOTICE U/S. 15 3A WAS ISSUED ON 16.07.2008 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME. RETURN WAS FILED ON 25.09.2008 DECLARING INCOME OF RS. 1,58,29 0/-. 4. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O NO TICED THAT THE ASSESSEE HAS SHOWN INCOME FROM BUSINESS. ON FURTHER PERUSAL OF THE FINANCIAL STATEMENTS OF THE ASSESSEE, THE A.O. FOUN D THAT THE ASSESSEE HAS PURCHASED A LAND AT RS. 5,41,200/-. REFERRING T O THE SEARCH ACTION TAKEN AT THE RESIDENCE OF SHRI KALIDAS PATEL ON 07. 02.2008 WHERE CERTAIN INCRIMINATING DOCUMENTS WERE SEIZED AND ON THE BASIS OF SUCH INCRIMINATING DOCUMENTS, THE A.O. WAS OF THE FIRM B ELIEF THAT THE LAND SHOWN IN THE BALANCE SHEET OF THE ASSESSEE WAS HAVI NG AN AREA OF 11 ACRE AND THE RATE PER ACRE WAS RS. 62.50 LACS. THE A.O. WAS OF THE OPINION THAT THE PURCHASE COST OF THE LAND WAS RS. 3.43 CRORES. SINCE, THE ASSESSEE HAS SHOWN THE PURCHASE COST AT RS. 5,4 1,200/-, THE A.O. MADE AN ADDITION OF RS. 3,37,58,800/- AS UNDISCLOSE D INVESTMENT. ASSESSEE VEHEMENTLY AGITATED THE ASSESSMENT BEFORE THE LD. CIT(A). IT(SS)A NO. 847/AHD/2010 . A.Y. 2006-07 3 AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) OBSERVED AS UNDER:- 4. IN MY VIEW, THERE WAS NO EVIDENCE AGAINST THE AP PELLANT SHOWING THAT HE HAS PAID RS.3.43 CRORES FOR THE PURCHASE OF LAND AT KAN KROL, HIMMATNAGAR. THE PAGE NUMBER 8 OF ANNEXURE A- 16 AND BACK COVER OF ANNEXU RE A-12, ON WHICH THE AO HAS RELIED UPON WAS SEIZED FROM THE RESIDENCE OF SH RI KALIDAS PATEL. IN THE SAID PAGE, NAME OF THE APPELLANT DOES NOT APPEAR ANYWHER E. IN FACT, IN THE SAID PAGE NAME OF ONE SHRI BHARATBHAI PATEL IS APPEARING. NO QUESTION HAS BEEN ASKED BY THE AO EITHER TO SHRI KALIDAS PATEL OR TO SHRI BHAR ATBHAI PATEL REGARDING THIS PAGE. I WAS INFORMED BY THE ADDL. CIT HAVING JURISD ICTION OVER HIMMATNAGAR AND BHARAT PATEL THAT NO ACTION HAS BEEN TAKEN IN THE C ASE OF SHRI BHARATBHAI PATEL IN RESPECT OF THE ENTRIES IN THE SAID PAGE. IN THE STA TEMENT RECORDED UNDER SECTION 132 OF THE INCOME TAX ACT, SHRI KALIDAS PATEL NOWHE RE ADMITTED THAT HE HAD RECEIVED RS.3.43 CRORES FROM THE APPELLANT TOWARDS THE SALE OF THE LAND AT KANKROL HIMMATNAGAR. AS STATED EARLIER, THE SEIZED DOCUMENT S ON WHICH THE AO HAS PLACED RELIANCE WERE FOUND FROM THE POSSESSION OF A THIRD PARTY AND NOWHERE THE NAME OF THE APPELLANT IS APPEARING IN SUCH PAPERS. IN MY VIEW, WITHOUT ANY EVIDENCE THAT THE APPELLANT HAS PAID RS.3.43 CRORES FOR THE SAID LAND, NO ADDITION CAN BE MADE BY THE AO IN HIS HANDS. IN FACT THE PAP ER SUGGESTS THE NAME OF SHRI BHARATBHAI AND IN HIS CASE NO ADDITION HAS BEEN MAD E IN ASSESSMENT YEAR 2006- 07 ON THE BASIS OF SUCH PAPERS. FURTHER, THIS PAPER INDICATES THE DATE AS 1/5/2006 WHEREAS THE PROPERTY IN QUESTION HAS BEEN PURCHASED BY SHRI BHARATBHAI AND THE APPELLANT JOINTLY ON OR BEFORE 8/3/ 2006. 5. AS STATED EARLIER, THE LAND BEARING SURVEY NUMB ER 787 AT KANKROL HIMMATNAGAR WAS PURCHASED BY THE APPELLANT WITH SHR I BHARATBHAI PATEL JOINTLY. THIS AGRICULTURAL LAND WAS CONVERTED BY THEM INTO N ON-AGRICULTURAL. THE N A ORDER DATED 7/2/2007 IS ALSO ISSUED BY THE AUTHORIT IES IN THEIR JOINT NAMES. THIS LAND WAS SUBSEQUENTLY DEVELOPED BY THEM JOINTLY AND WAS SOLD IN SMALLER PLOTS IN SUBSEQUENT ASSESSMENT YEARS. THE SALE PROCEEDS AND THE PURCHASE PRICE HOWEVER, WAS RECEIVED AND SHARED BY THEM IN EQUAL PROPORTION . IN MY VIEW, THIS AMOUNTED TO A JOINT-VENTURE UNDERTAKEN BY THE APPELLANT ALON G WITH SHRI BHARATBHAI PATEL. IT(SS)A NO. 847/AHD/2010 . A.Y. 2006-07 4 THE ASSESSABLE ENTITY IN THIS CASE SHOULD HAVE BEEN THE AOP OF THE APPELLANT AND SHRI BHARATBHAI PATEL. SINCE THERE IS NO MENTION IN THE SEIZED PAPER REGARDING THE PAYMENT OF RS. 3.43 CRORES BY THE APPELLANT, THERE IS NO MENTION REGARDING THE NAME OF THE APPELLANT IN THE SEIZED PAPERS, AND ALS O SHRI KALIDAS PATEL HAS ALSO NOT STATED IN THE STATEMENT RECORDED IN THE COURSE OF SEARCH THAT THE PAPER BELONGS TO THE APPELLANT, IN MY VIEW, THERE IS NO JUSTIFICA TION OF MAKING THE ADDITION ON THE BASIS OF THIS PAPER IN THE HANDS OF THE APPELLANT. I, THEREFORE, HAVE NO HESITATION IN DELETING THE ADDITION OF RS.3,37,58,800/-. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BE EN STATED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT GROUND 1 OF REVENUE S APPEAL AS MENTIONED ELSEWHERE IS MISPLACED IN AS MUCH AS IT R EFERS TO THE ADDITIONS ON ACCOUNT OF UNDISCLOSED PAYMENT RECEIVE D ON SALE OF LAND WHEREAS THE FACTS SHOW THAT THE ASSESSEE HAS IN FAC T PURCHASED THE IMPUGNED LAND. 8. BE AS IT MAY, THE UNDISPUTED FACT IS THAT THE IMPUG NED LAND WAS PURCHASED JOINTLY WITH ONE SHRI BHARATBHAI PATEL. HOWEVER, WE FIND THAT THE ENTIRE ADDITIONS HAVE BEEN MADE IN THE HAN DS OF THE ASSESSEE. FURTHER, THE IMPUGNED INCRIMINATING MATERIAL WAS FO UND FROM THE PREMISES OF SHRI KALIDAS PATEL BUT SURPRISINGLY THE SAID SHRI KALIDAS PATEL DID NOT EVEN MADE A WHISPER OF HAVING RECEIVE D CONSIDERATION OVER AND ABOVE WHAT HAS BEEN STATED IN THE REGISTER ED DOCUMENT. IN OUR CONSIDERED OPINION, THE IMPUGNED ADDITIONS MADE BY THE A.O. DOES IT(SS)A NO. 847/AHD/2010 . A.Y. 2006-07 5 NOT HAVE ANY BASIS, THE FIRST APPELLATE AUTHORITY H AS VERY ELABORATELY APPRECIATED THE FACTS OF THE CASE AS MENTIONED ELSE WHERE. WE, THEREFORE, DECLINE TO INTERFERE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07 - 07 - 20 16. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD