SHRI AJAY REGHUBHAI BHARWAD,VADODARA V. THE ITO, WARD-2(1), VADODARA

ITA 596/AHD/2020

AI Insights

The case involves appeals by Piyush M. Dobariya and Ajay Reghubhai Bharwad against the assessment of short term capital gains on the sale of immovable properties. The properties were sold to Contrans Logistics Pvt. Ltd. (CLPL) and were initially purchased by the assessees in their names but were claimed to be on behalf of Mansukhbhai Dobariya. The Income Tax Officer assessed the gains, which was contested in the appeals. The Tribunal examined the evidence, including affidavits and sale deeds, and found that the assessees were the real owners and the transactions were not merely a facade for Mansukhbhai Dobariya's dealings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 42061 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Other Referred Cases: Godhra Electricity Co. Ltd. vs. CIT, M/s. Glass Line Equipment vs. CIT, Dr. B.V. Raju vs. ITAT, Smt Indramani Bai vs. CIT, G. Ventakaswami Naidu & Co. vs. CIT, Raja.J.Rameshwar Rao vs. CIT, Janaki Ram Bahadur Ram vs. CIT, Raja Bahadur Kamakhya Narain Singh vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Capital asset; Additional evidence; Corroborative evidences; Cost of acquisition; Capital Gains
• Section: 143(3); 48; 131; 133(6); 44AD; 13; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Piyush M. Dobariya B-62, Shiv Shakti Park Society, Nr. Madavpark Society, Karjan, Dist. Vadodara Gujarat-391240 PAN: AGTPD4792M (Appellant) Vs Income Tax Officer, Ward-5(4), Vadodara (Respondent) Ajay Reghubhai Bharwad Gokul Nagar, Behind Amin Petrol Pump, Makarpura, Vadodara-390010 PAN: AICPB4454F (Appellant) Vs Income Tax Officer, Ward-2(1), Vadodara (Respondent) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Smt. Malarkodi R., Sr.D.R. & Shri Nanda Kumar, CIT-DR Date of hearing : 14-10-2024 Date of pronouncement : 10-01-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- ITA No. 595/Ahd/2020 Assessment Year 2009-10 ITA Nos. 596 & 597/Ahd/2020 Assessment Years. 2009-10 & 2010-11 I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 2 ITA No. 595/Ahd/2020 is filed by the Assessee Sri. Piyush M Dobariya as against the appellate order dated 14.02.2020 passed by the Commissioner of Income Tax (Appeals)-1, Vadodara arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2009-10. 2. ITA Nos. 596 & 597/Ahd/2020 are filed by the Assessee Sri. Ajay Reghubhai Bharwad as against separate appellate orders both dated 27.02.2020 passed by the Commissioner of Income Tax (Appeals)-5, Vadodara arising out of the assessment orders passed under section 143(3) of the Act, relating to the Assessment Years 2009-10 and 2010-11 respectively. 3. Since the common issue of sale of immovable properties by the above two different assessees on behalf of one Shri Mansukhbhai Dobariya, the above appeals are disposed of by this common order. 4. The registry has noted that there is a delay of 242 days in filing the above appeal. This appeal is filed before the Tribunal on 31-12- 2020 this period falls under COVID-19 Pandemic situation. Thus following Supreme Court judgment dated 23.3.2020 in suo-moto Writ Petition (Civil) No.3 of 2020, wherein Hon’ble Supreme Court has extended time limit for filing appeals w.e.f. 15.3.2020. Thus, there is no delay in filing the above appeal by the Assessees and we take up the appeals for adjudication on merits. 4. ITA No. 595/Ahd/2020 is taken as the lead case. Brief facts of the case is that the assessee is an individual deriving income from I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 3 Partnership Firm M/s. Dobariya Enterprise engaged in real estate and Civil Work business. For the Asst. Year 2009-10, the assessee filed his Return of Income u/s. 44AD of the Act at Rs.1,70,138/- on estimation basis on the total receipt of Rs.21,00,475/-. During the assessment proceedings, the Assessing Officer noticed that the assessee sold two immovable properties at Moje Dethan, Karjan Taluka for a consideration of Rs.44,82,000/- to M/s.Contrans Logistics Pvt. Ltd. (herein after referred as CLPL). The assessee was requested to explain the details of sales. The assessee filed a letter dated 13-12-2011 stating that his father Shri Mansukhbhai Dobariya works for CLPL as Broker and receiving Rs.5000/- per acre on sale of land. Shri Mansukhbhai Dobariya purchased lands from agriculturists in the name of the assessees and subsequently sold it through Sale Deeds to CLPL. Therefore, the assessee requested the AO to consider the commission income in the hands of the assessee and complete the assessment. 4.1. The AO not agreed with the above submissions of the assessee, but on verification of records and evidences not satisfied with the claim of the assessee and thereby determined the Short Term Capital Gain at Rs.36,50,000/- and demanded tax thereon. 5. Aggrieved against the same, assessee filed an appeal before Ld. CIT(A). During appellate proceedings, the assessee filed Paper Book which included copies of Memorandum of Understandings, Ledger Account of Mr. Mansukhbhai Dobariya in the books of M/s.Altair Infrastructure Pvt. Ltd. (AIPL) from 2007-08 to 2011-12 copy of Bank statement of Mansukhbhai Dobariya, Ledger account of I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 4 Mansukhbhai Dobariya for 2007-08 to 2008-09, Purchase Deeds & Sale deeds, etc. The assessee filed two documents namely letter of Mansukhbhai Dobariya and Affidavit as new evidences. The Ld CIT[A] called for a Remand Report from the AO on the new evidences filed by the assessee but not admitted, since the same are not satisfying the condition specified u/r.46A of I.T. Rules by observing as follows: “… The appellant in the submission, during the appellate proceedings, stated that Shri Mansukhbhai Dobariya engaged in the business of dealing in land and agriculture and in the course of business an agreement was entered with Shri Rajiv Naroola along with another agreement with the same person as per which Shri Mansukhbhai Dobariya would purchase land on behalf of purchaser Shri Rajiv Naroola, nearly 78 acre from different persons and finally transfer the same to Shri Rajiv Naroola or his nominee, for Rs.5,000/- commission per acre. The money will be advanced by purchaser around Rs.2,00,00,000/- by 15.11.2007. As per the terms, the money was received by Shri Mansukhbhai Dobariya from M/s. Altair Infrastructure Pvt. Ltd. [AIPL] & M/s. Navitrans Terminals Pvt. Ltd. [NTPL] in his ICICI Bank account. On receipt of money, Shri Mansukhbhai Dobariya started utilizing the funds for acquiring land in his name and also in the name of relatives etc. In this process, Shri Mansukhbhai Dobariya purchased 10 Acre of land for Rs.8,32,000/- in the name of appellant. The purchase consideration was paid to the farmers through the account of Shri Mansukhbhai Dobariya and the same can be seen from the cheque details noted in the purchase deeds. As the lands being agricultural lands purchased in the name of appellant, the same land was subsequently sold to CLPL by the appellant for Rs.44,82,000/- The appellant also referred the letter given by the CLPL and contended that the entire purchase and sale made by the appellant was for and on behalf of Shri Mansukhbhai Dobariya, hence taxing STCG in the hands of appellant is incorrect and requested to delete. The appellant also filed an affidavit and letter from Shri Mansukhbhai Dobariya who has stated that the transaction I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 5 undertaken by the appellant was for and on behalf of him, also stated that he has received entire consideration for acquiring land for CLPL. The appellant also submitted that the land in question was agricultural land situated beyond 10 km from notified area, not a capital asset to attract Capital gains provision. The appellant's contention was forwarded to the AO and the AO submitted the report as supra. First of all the AO objected the admission of additional evidences. Further it was also reported that the land as per deeds, land without Irrigation and agricultural land was converted to non-agricultural and sold to CLPL. The Talati certificate produced by the appellant was also silent about nature of land. As there is no response from the appellant reported that the land is a capital asset relying on certain decisions. In the rejoinder to the remand report of the AO, the appellant reiterated the submission filed earlier and no further submission made rebutting the findings of AO. 5.1. Ld CIT [A] during appellate proceedings, asked the Ld.AR to submit English translation of Sale Deed, which was filed. The Ld.AR also filed copy of letter dated 10.12.2011 given by CLPL before the AO, and also filed English translation of Purchase Deeds. After considering the same the Ld CIT[A] held that there is no iota of evidence in the form of documents placed before the Authorities that the assessee is a name lender not real owner and real owner is Shri Mansukhbhai Dobariya. If this contention of the assessee is accepted, then the company AIPL which is procuring lands is the owner, because Shri Mansukhbhai Dobariya was engaged by it and lands were purchased for it, which is incorrect. The documentary evidence will have credibility or prominence over observation, I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 6 opinion as claimed by the assessee, thereby rejected the claim of the assessee by observing as follows: “… As per the letter of CLPL, to whom the land was sold by the appellant, it was confirmed that CLPL appointed AIPL to identify and assist the CLPL in acquiring land for its business. AIPL in turn, availed the services of the appellant and others for identifying, consolidating and execution of conveyance deeds in favour of the company. It was also clarified that CLPL has no direct financial transaction, for purchase of land. With regard to Shri Mansukhbhai Dobariya, it was stated that it has paid registration, related charges and conversion charges only. From the above, it is understood that the appellant was engaged by AIPL and purchased land, as per the letter of CLPL but there is no documentary evidence to say that appellant was engaged, in fact, by AIPL. When MoUs were entered by both Shri Rajiv Naroola and Shri Mansukhbhai Dobariya, the same type (atleast), of MOUs were not filed by the appellant. Hence, the contention of the CLPL cannot be accepted. Let us also see the MOUs submitted by the appellant which were entered between Shri Mansukhbhai Dobariya and Shri Rajiv Naroola. They are only notarized and not registered. Crores of rupees were transferred to Shri Mansukhbhai Dobariya, but no surety was taken as per MOUS. In one MOU the term was that Shri Mansukhbhai Dobariya work for commission but another MOU of the same date the term was to receive Rs.7,00,000/- per acre. Hence, therefore documents are to be doubted. The claim of the appellant that purchase and sale of land was for and on behalf of his father is not forthcoming from the evidence but for from self-serving submission. The two purchase deeds never reveal that purchases were made on behalf of Shri Mansukhbhai Dobariya. It is a fact that the money was routed through Shri Mansukhbhai Dobariya account only. Routing money through Shri Mansukhbhai Dobariya account, if so facto, cannot lay ground to say that purchases were made for or on behalf of Shri Mansukhbhai Dobariya. I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 7 The sale deed dated 30.01.2009 clearly mentioned that the appellant was absolute owner of the land. It was also mentioned that the said land was sold to the purchaser company after obtaining the non agriculture permission. The land was in the possession of appellant, the same can be seen from the recital as mentioned below. “4) The aforesaid land in possession of the seller and he is absolute owner of the land, none else has any rights therein.\" The purchaser company paid entire consideration of Rs.44,82,000/-, this is also narrated in the deed as under. \"8) The Seller is executed this sale deed in favour of Purchaser and the Seller here confirms that the Purchaser has paid the entire sale consideration of Rs.44,82,000/- as under:- The Purchaser company has made payment in the bank account of Shri Dobariya Mansukhbhai Karshanbhai for making payment to the various farmers for purchase of aforesaid land. The said amount to be considered as consideration paid against the purchase of aforesaid land.\" Simply because the purchase consideration paid to farmers for purchasing the lands, were effected through the bank account of Shri Mansukhbhai Dobariya and the said cheque Nos. mentioned in the purchase deeds, it cannot, at any stretch of imagination, lead to the conclusion that the lands were purchased by the appellant for or on behalf of Shri Mansukhbhai Dobariya. Similarly, sale consideration of Rs.44,82,000/- said to have been paid in the bank account of Shri Mansukhbhal Dobariya for making payments to various farmer for purchase of land and said amount need to be considered as consideration, it cannot lead to the conclusion that the appellant not received any consideration. On careful reading of the consideration clause as provided by the appellant (as English translated copy), it is clear that the appellant sold the land for Rs.44,82,000/-. This consideration was paid through Bank account of Shri Mansukhbhal Dobariya. The argument of the appellant that lands were purchased and sold for Shri Mansukhbhal Dobariya or on behalf of Shri I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 8 Mansukhbhal Dobariya and the real owner is Shri Mansukhbhai Dobariya as the money was paid through his bank account for purchase and on sale also, is not correct. The money for purchase was flown from the bank account of Shri Mansukhbhai Dobariya but the purchase deeds clearly stated that the appellant purchased the agricultural lands and he became absolute title holder and owner. At best Shri Mansukhbhai Dobariya can sue for liability of money but not claim that Shri Mansukhbhai Dobariya is the owner of the lands. Unless the property mortgaged to the bank, the bank will have the right to recover the loan and to sue the borrower against the loan amount taken towards property but the bank cannot be held to be an owner of the property. By virtue of loan the banker cannot be held legally owner of any property, for which purpose the loan amount was granted. Similarly, the title deed executed before State Authority cannot be undermined to state that Shri Mansukhbhai Dobariya is the real owner In this case. There is no iota of evidence in the form of documents placed before the authorities that the appellant is a name lender nor not real owner and real owner is Shri Mansukhbhai Dobariya. If it is accepted, then the company which is procuring lands is the owner because Shri Mansukhbhai Dobariya was engaged by it and lands were purchased for it, which is incorrect. The documentary evidence will have credibility or prominence over observation, opinion as claimed by the appellant. Hence considering the above, the contention of the appellant is rejected.” 5.2. Ld CIT [A] further considered the lands in question are capital assets but that there is no evidence to prove that the lands were purchased by the father of the assessee in the name of the assessee as claimed. Hence the action of the AO in charging the transactions to capital gains is well within the provisions of Law and also rejected the claim the sale of agricultural land is exempt from tax by observing as follows: I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 9 “… All the contentions of the appellant are that the lands are only agricultural lands and beyond 10 K.ms of notified area do not stand to the test considering the following facts. The agricultural lands, were purchased and converted into non- agricultural and sold hence the land after conversion, take the character of Capital asset, liable for capital gain. In view of the above discussion, the following facts emerge. 1. The appellant purchased agricultural lands and converted into non-agricultural purpose thereby capital asset came into being. 2. Such capital assets are conveyed by sale deed effecting transfer of capital asset 3. The capital asset was sold for Rs.44,82,000/- (for a consideration). 4. There is profit or gain on the said transaction. In the light of the above facts, there is no difficulty in computing Capital gain as per sec.45 & 48 of the Act. The Hon'ble ITAT, Hyderabad (SB) in the case of Dr. B.V. Raju (18 taxmann.com 188) after appreciating the relevant provisions on capital gains listed certain conditions for chargeability of capital gains as under.\" (a) There must be a capital asset; (b) There should be a transfer of the capital asset; (c) The capital asset should be something which can be acquired by paying a cost i.e., it should be capable of determining the cost of acquisition of the capital asset. (d) There must be accrual of consideration for transfer of capital asset. Profits or gains arising from the transfer of a capital asset made in a previous year is taxable as capital gains under the head 'Capital gains'. The important ingredients for capital gains are, therefore, existence of a capital asset, transfer of such capital asset and profits or gains that arise from such transfer. According to section 45(1) of the act, any profits or gains arising from the transfer of a capital asset effected in the previous year I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 10 shall be chargeable to income-tax under the head \"Capital gains\" with certain conditions and exemptions. In view of the above discussion, having regard to the facts of the case, it is held that the appellant is the owner of the land which was transferred to the company. The land so transferred was a capital asset because the lands purchased were converted for non-agricultural purpose and effected sale. The transaction resulted into receipt of consideration by the appellant and also a profit on such transaction. It is also to be noted that there is no evidence to state that the lands were purchased by the father of the appellant in the name of the appellant as claimed. Hence the action of the AO in charging the transactions to capital gains is perfectly as per Law and the same is hereby approved. In view of this, the addition made by the AO is confirmed and the grounds including the without prejudice ground are hereby dismissed. 5.3. Ld CIT [A] alternatively held that if the lands were purchased for the purpose of company then the transaction can be treated as adventure in the nature of trade by observing as follows: “… Without prejudice to the above decision, it is held that the transaction made by the appellant is in the nature of adventure in the nature of trade and liable for tax on profit. The appellant submitted a letter from CLPL wherein it was stated that AIPL engaged the services of the appellant for identifying, consolidating and execution of conveyance deeds in favour of the appellant. Though there was no evidence in the form of agreement between the appellant and AIPL, presuming for a while but not conceding, the land was purchased on behalf of the company then the intention of the appellant at the time of purchase of lands was only to sell after conversion. In view of this, the transaction of the appellant in procuring the land, convert the same for non- agricultural purpose and selling the same to the company tantamount to doing business, thereby resulting business Income in the form of profit on sale of land. To see whether a single transaction is in the nature of adventure in the nature of I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 11 trade at of are not the prime condition is the intention of the person at the time of purchase of the asset. In this case, in case of accepting the contention of the appellant that the lands were purchased for the purpose of company then the transaction can be treated as adventure in the nature of trade. I rely on the decision of Hon'ble Supreme Court in the following cases for the above proportion. 1. Smt Indramani Bai (70 ITR 67) 2. G. Ventakaswami Naidu & Co. (35 ITR 594) 3. Raja.J.Rameshwar Rao (42 ITR 179) 4. Janaki Ram Bahadur Ram (57 ITR 21) 5. Raja Bahadur Kamakhya Narain Singh (77 ITR 253) Hence, alternatively Rs.36,50,000/- must be treated as income from business.” 6. Aggrieved against the appellate order the assessee Sri. Piyush M Dobariya is in appeal before us raising the following Grounds of Appeal in ITA No. 595/Ahd/2020: 1. The Ld. CIT(A)-1, Vadodara has erred in law and in facts in confirming the action of the Ld. A.O. in assessing the income at Rs. 38,58,370/- against a returned income of Rs. 2,08,370/- as declared in the return of income. 2. The Ld. CIT(A)-1, Vadodara has erred in law and in facts in confirming an addition of Rs.36,50,000/- as short term capital gain on the lands transferred to M/s. Contrans Logistics Pvt. Ltd. (CLPL) in the hands of the appellant, ignoring the fact- (a) that the appellant had undertaken the transaction on behalf of Shri Mansukh Dobariya (father of the appellant) and the same is confirmed by him in the proceedings before the Ld. A.O. and the first appellate authority through an affidavit by rejecting the admission of such evidences and holding the same to be additional evidences. (b) the consideration for purchase and the sale thereof is also received in the account of Shri Mansukh Dobariya. I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 12 (c) the purchaser too has confirmed to have had the transactions with Shri Mansukh Dobariya. (d) the various documents submitted including the purchase deed, sale deed, MoUs, etc. also indicate the transaction being carried out by Shri Mansukh Dobariya. It is thus prayed that it may please be held that the transaction of purchase and sale of the lands transferred to CLPL actually belongs to Shri Mansukh Dobariya and any income arising from such transaction cannot be taxed in the hands of the appellant and the same is to be deleted. 3. The Ld. CIT(A)-1, Vadodara has failed to appreciate the contention of the appellant that the transaction of sale of the impugned land, under no circumstances, could be subjected to tax, not being a capital asset. The income subjected to taxation as short term capital gain is thus prayed to be deleted. 4. Without prejudice to the above, the Ld. CIT(A)-1, Vadodara has erred in law and in facts in not allowing the deduction of the expenses incurred in the purchase of the lands allegedly transferred by the appellant. 6.1. Ld Senior Counsel Mr. Thushar Himani appearing for the assessee submitted that Mansukbhai Dobariya acquired agricultural lands in the names of the assessee and Ajaybhai Bharwad during the financial years 2007-08 and 2008-09. Mansukbhai was paid commission of Rs.5,000/- per acre on behalf of the company CLPL. The amount of sale consideration mentioned in the Conveyance Deeds are at Jantri rates and was not been paid either by the company CLPL or by Mansukhbhai. The Assessee herein and Ajaybhai Bharwad have no personal right or share in the funds received in the bank account of Mansukbhai and it shall also not be payable in future as well. Whereas Mansukbhai Dobariya, the assessee and Ajaybhai Bharwad were only the aggregators for purchase of agricultural lands for which, I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 13 commission of Rs.5,000/- per acre was paid by the company and they didn't have any ownership or interest in the impugned transactions. 6.2. Ld Senior Counsel further submitted that the Assessee, during the course of appellate proceedings before CIT[A], placed on record \"additional evidences\" namely Letter dated 12.02.2012 by Mansukbhai to AO (Pgs.82-86 of P/B) and Affidavit of Mansukbhai dated 28.01.2012 (Pgs.87-92 of P/B). Further Page No.6 of the Sale Deed between 'assessee' and 'CLPL' wherein it has been mentioned that whatever payment has been made by CLPL to Mansukbhai in advance is to be adjusted against sale consideration [Conveyance Deed at Pgs.64-75 @ 69 r.w. Pgs. 76-79 @ 78 of P/B]. The Ld AO has nothing to submit in rebuttal to additional evidences. Under such circumstances, contents of such additional evidences need to be accepted and CIT[A] is not correct in stating the same do not satisfy the condition specified under Rule 46A of the Rules. Once Remand Report has been duly submitted by AO, Ld. CIT(A) ought to have admitted additional evidences and then bound to decide the issue on merits. 6.3. Further the AO has not given any adverse comments in Remand Report on the above referred additional evidences furnished by the assessee. Thus AO could have issued summons u/s. 131 or 133[6] to Shri Mansukbhai Dobariva and recorded his statement but AO choose not to do so. Whereas notice issued by AO to CLPL u/s.133(6) was replied by CLPL and accepted the factum of availing services of assessee for identification, I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 14 consolidation and execution of land. The Hon'ble the Gujarat High Court in the case of M/s. Glass Line Equipment vs. CIT reported in 253 ITR 454 held that \"contents of the affidavit cannot be ignored unless proved to the contrary\". Accordingly, affidavit of Shri Mansukbhai Dobariya could not have been brushed aside by the Lower Authorities. Under such facts and circumstances, contents of such additional evidences need to be accepted. It is well settled that only \"Real income\" can be taxed by the revenue and not \"notional income\". Reliance is placed on decision of Hon'ble Apex Court in case of \"Godhra Electricity Co. Ltd. vs. CIT-225 ITR 746 (SC)\". In view of the additional evidences placed on record, the impugned addition is not justified in the eye of law. 7. Per contra, Ld. CIT-DR Shri V Nanda Kumar and Sr. D.R. Smt. Malarkodi R. appearing for the Revenue supported the orders passed by the Lower Authorities and further submitted that though the Ld. CIT(A) had observed additional documents are not entertained but the facts of the case, the same were considered in its entirety and then observed that the assessee has not produced any materials in support of the expenses claimed towards conversion into non-agricultural purpose and payments made to farmers. Thus the findings arrived by the Ld. CIT(A) does not require any interference and requested to uphold the orders of the Lower Authorities. 8. We have given our careful consideration and perused the materials available on record including the Paper Books filed by the assessee. The contention of the assessee that the Ld. CIT(A) has not I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 15 considered the additional evidences namely letter dated 12-02- 2012 and affidavit of Shri Mansukbhai Dobariya are mere statements without any corroborative evidences. As per the statement of Shri Mansukbhai Dobariya, he was operating as a Real Estate Agent for the company CLPL in procuring lands and purchased the properties in the name of his son Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad are not within the provisions of law. As per the Indian Registration Act, if Shri Mansukbhai Dobariya purchases the land he could have engaged his son Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad as his Power of Attorney Agent and registered the immovable properties then the contention of the assessee may hold it good but that legal proceeding has not been done in this case. The Conveyance Deeds makes it clear that the properties were purchased by Shri Piyush M Dobariya and Shri Ajay Reghubhai Bharwad in their individual capacities and sale of the same will certainly attract Capital Gains. Further there were no evidences placed by the assessee before any of the Lower Authorities regarding the expenses incurred by the assessee in converting the agricultural lands into Non-Agricultural lands. Thus the additional documents are without necessary evidences and invalid in the eyes of law. 8.1. Further the Assessing Officer has considered sale transactions while framing the assessment and observed as follows: 3.1 Reply of the assessee is considered. The assessee has requested to consider his commission income. The assessee has also submitted an agreement pertaining to Mansukbbhai Dobariya stating that Shri I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 16 Mansukhbhai Dobariya would receive commission on sale of land. However, assessee could not furnish any evidence regarding receipt of commission by him. As per assessee's letter also, the commission was received by Shri Mansukh Dobariya not by the assessee. Meanwhile, to conduct inquiries with respect to sale of land, riotice u/s 133(6) of the Act was issued on to M/s Contrans Logistics Pvt. Ltd (CLPL). The company, CLPL submitted its reply on 12.12.2011 wherein it submitted that services of Assessee were availed for Identification, consolidation and execution of conveyance deeds in favour of company. The company stated that fund transaction was routed through Mansukh Dobariya, father of the assessee. In the reply, CLPL has also clarified the fact that Shri Mansukh Dobariya was handling the affairs of company. Accordingly, claim of assessee that he was receiving merely commission is rejected as assessee has not produced any evidence in this regard. 3.2 As mentioned above the assessee has sold a land to M/s CLPL. The assessee has not shown Capital Gain in his return of income. The assessee has sold the land on 30.01.2009 for Rs.44,82,000/- to M/s CLPL. In view of above sale consideration of the property is not disputed by the assessee. As per Income-tax Act as well as Transfer of Property Act, the assessee has transferred the land to M/s CLPL after enjoying title and possession for more than a year. Accordingly, assessee is liable to pay Capital Gain tax on the gain arisen on the said transfer. 3.3 Regarding cost of acquisition, the assessee has purchased the land through two purchase deeds, first one is for a purchase consideration of Rs.4,32,000/- dated 27.12.2007 ( Block No.115 & 127) and second one is for a purchase consideration of Rs.400,000/- dated 11.01.2008 (Block No.76). 3.3.1 The first land was purchased by the assessee from Shri Aiyub Mohammad Gani, Add: Valan, Baroda. The assessee has also submitted receipts of cash claiming that he has paid cash in excess to the payments mentioned in the purchase deeds to Shri Aiyub Mohammad Gani. The assessee was requested to produce Shri Aiyub Mohammad Gani, to whom he claimed to have paid cash in excess to the consideration mentioned in purchase deed or submit his confirmation. The assessee expressed his inability to produce the person. Regarding complete addresses of said person, assessee submitted that it is written in the purchase deed. However, the addresses written in the deed were incomplete; hence independent enquiries could not be done in this regard. The authenticity of cash receipts is also not proved as signature put by Shri Aiyub I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 17 Mohammad Garni on purchase deed is entirely different from the signature of recipient in cash receipts. 3.3.2 The second land was purchased by the assessee from Shri Yakub Asmal Mala, Add: Valan, Baroda. The assessee has also submitted receipts of cash claiming that he has paid cash in excess to the payments mentioned in the purchase deeds to Shri Yakub Asmal Mala. The assessee was requested to produce Shri Yakub Asmal Mala, to whom he claimed to have paid cash in excess to the consideration mentioned in purchase deed or submit his confirmation. The assessee expressed his inability to produce the person. Regarding complete addresses of said person, assessee submitted that it is written in the purchase deed. However, the addresses written in the deed were incomplete; hence independent enquiries could not be done in this regard. The authenticity of cash receipts is also not proved as signature put by Shri Yakub Asmal Mala on purchase deed is entirely different from the signature of recipient in cash receipts. Moreover, one of the receipts is signed by some other person Shri Musa Ismail. 3.3.3 In view of above cost of acquisition for the assessee is derived at Rs.8,32,000/-i.e. sum of cheque payments as appearing the purchase deeds. 3.4 The assessee has purchased the land through registered deeds which clearly states that assessee has taken possession and title has already been transferred through that conveyance deed. Moreover assessee has enjoyed title and possession for more than a year. The case of assessee clearly falls in Capital Gain category. The holding period of assessee is qualifies for Short Term Capital Gain, computation of which is as under: Sales Consideration 44,82,000/- Less: Index Cost of Acquisition 8,32,000/- Short Term Capital Gain 36,50,000/- 8.2. Thus the registered Sale Deeds makes it abundantly clear that the properties belongs to the two assessees here in. The assessees failed to produce expenses relating to the land as well as non- agricultural conversion expense and payments made to the farmers. In the absence of the same, we do not find any infirmity in the orders passed by the Lower Authorities in treating the sale as I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 18 Short Term Capital Gain. Thus we do not find any merits in the submissions of the assessee. We are also in concurrence in the findings of the Ld. CIT(A) namely the alternative view of treating the transactions in the nature of adventure in trade. Therefore the Grounds raised by the assessee are devoid of merits and liable to be dismissed. 9. In the result, the appeal filed by the Assessee in ITA No. 595/Ahd/2020 is hereby dismissed. 10. The Grounds of Appeal raised by the assessee Sri. Ajay Reghubhai Bharwad in ITA No. 596/ Ahd/2020 for Asst. Year 2009-10 reads as under: 1. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming the action of the Ld. A.O. in assessing the income at Rs. 4,56,70,092/- against a returned income of Rs. 2,07,392/-as declared in the return of income. 2. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming an addition of Rs. 4,54,62,700/- as short term capital gain on the lands transferred to M/s, Contrans Logistics Pvt. Ltd. (CLPL) in the hands of the appellant, ignoring the fact - (a) that the appellant had undertaken the transaction on behalf of Shri Mansukh Dobariya and the same is confirmed by him in the proceedings before the Ld. A.O. and the first appellate authority through an affidavit by rejecting the admission of such evidences and holding the same to be additional evidences. (b) the consideration for purchase and the sale thereof is also received in the account of Shri Mansukh Dobariya. (c) the purchaser too has confirmed to have had the transactions with Shri Mansukh Dobariya. (d) the various documents submitted including the purchase deed, sale deed, MoUs, etc. also indicate the transaction being carried out by Shri Mansukh Dobariya. I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 19 It is thus prayed that it may please be held that the transaction of purchase and sale of the lands transferred to CLPL actually belongs to Shri Mansukh Dobariya and any income arising from such transaction cannot be taxed in the hands of the appellant and the same is to be deleted. 3. The Ld. CIT(A)-5, Vadodara has failed to appreciate the contention of the appellant that the transaction of sale of the impugned land, under no circumstances, could be subjected to tax, not being a capital asset. The income subjected to taxation as short term capital gain is thus prayed to be deleted. 4. Without prejudice to the above, the Ld. CIT(A)-5, Vadodara has erred in law and in facts in not allowing the deduction of the expenses incurred in the purchase of the lands allegedly transferred by the appellant. 11. The Grounds of Appeal raised by the assessee Sri. Ajay Reghubhai Bharwad in ITA No. 597/Ahd/2020 for Asst. Year 2010-11 reads as under: 1. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in dismissing the appeal holding the same to be filed belatedly ignoring the fact that the appellant has filed an appeal on 28.04.2018 (admittedly before the due date) in physical mode and thereafter the same is digitally filed on 08.06.2016. Considering the physical submission of the appeal in the specified time, the Ld. CIT(A) ought to have admitted the appeal. 2. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming the action of the Ld. A.O. in assessing the income at Rs. 1,82,71,740/- against a returned income of Rs. 1,85,450/- as declared in the return of income. 3. The Ld. CIT(A)-5, Vadodara has erred in law and in facts in confirming an addition of Rs. 1,78,49,285/- as short term capital gain on the lands transferred to M/s. Contrans Logistics Pvt. Ltd. (CLPL) in the hands of the appellant, ignoring the fact - (a) that the appellant had undertaken the transaction on behalf of Shri Mansukh Dobariya and the same is confirmed by him in the proceedings before the Ld. A.O. and the first appellate authority through an affidavit by rejecting the admission of such evidences and holding the same to be additional evidences. I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 20 (b) the consideration for purchase and the sale thereof is also received in the account of Shri Mansukh Dobariya. (c) the purchaser too has confirmed to have had the transactions with Shri Mansukh Dobariya. (d) the various documents submitted including the purchase deed, sale deed, MoUs, etc. also indicate the transaction being carried out by Shri Mansukh Dobariya. It is thus prayed that it may please be held that the transaction of purchase and sale of the lands transferred to CLPL actually belongs to Shri Mansukh Dobariya and any income arising from such transaction cannot be taxed in the hands of the appellant and the same is to be deleted. 4. The Ld. CIT(A)-5, Vadodara has failed to appreciate the contention of the appellant that the transaction of sale of the impugned land, under no circumstances, could be subjected to tax, not being a capital asset. The income subjected to taxation as short term capital gain is thus prayed to be deleted. 5. Without prejudice to the above, the Ld. CIT(A)-5, Vadodara has erred in law and in facts in not allowing the deduction of the expenses incurred in the purchase of the lands allegedly transferred by the appellant. 12. The facts in the present case are identical with that of decision rendered in ITA No. 595/Ahd/2020 hereinabove. Following the same the present appeals filed by the Assessee in ITA No. 596 & 597/Ahd/2020 are devoid of merits and same are liable to be dismissed. 13. In the result, the appeals filed by the Assessees are dismissed. Order pronounced in the open court on 10-01-2025 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : I.T.A No. 595, 596 & 597/Ahd/2020 A.Ys. 2009-10 & 2010-11 Page No Shri Piyush M. Dobariya vs. ITO & Ors. 21 Dated 10/01/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "