TaxTMI 
TaxTMI 
2015 (1) TMI 1231
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....pite the material on record to establish that unaccounted money had been received by the sellers of property which was purchased by the assessee. 3. The facts of the case as borne out by the order of the Commissioner of Income Tax (Appeals) are as under: "10. During the course of search in the case of one Shri Somabhai Ambalal Prajapati, certain documents were found which indicated that one Shri Vivek Prahladbhai Patel entered into agreements with him to purchase various plots of land. AO completed assessment in the case of Vivek Prahladbhai Patel for A.Y. 2005-06 with the following observation: "3. During the course of search in the case of Somabhai Ambalal Prajapati at Khodal Bhavan, Khodiyar Krupa Bunglows, Thaltej, Ahmedabad on 08.12.2009, it is found that Shri Somabhai A. Prajapati, Shri Vishnubhai A. Prajapati, Shri Chandubhai A. Prajapati have entered into banachithi (agreement to sell land) on 18.01.2005, for sale of land at Bhadaj with the assessee. The banachitthi was signed on 18.01.05 by Somabhai Ambalal Prajapati, Chandubhai Ambalal Prajapati and Vishnubhai Ambalal Prajapati as seller and the assessee as the buyer. The said 'banachithi' has....
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.... Rate Rs. 29,51,000/- 500 3.60 510 5.28 15.63 Rs. 4,61,24,130/- received. Navi Sharat 509 7.11 504 12.09 497 Rate Rs. 21,85,000/- 487 512A 5.58 512B 3.87 ReceivedRs6,26,00,250/- Rs. 13,02,00,000/- Received (-) Rs. 10,87,24,380/- For completed Dastavej Old+New Rs. 2,14,75,520/- Received but Dastavej yet to be done. Therefore, Dastavej of 9.82 vigha land is yet to be made. 3.4 This page clearly states that Shri Somabhai A Parajapati and others have got sales consideration of Rs. 13,02,00,000/- for sale of above referred to land. On the basis of above documents Shri Somabhai Ambalal Prajapati, Shri Vishnubhai Ambalal Prajapati, Shri Chandubhai Ambalal Prajapati & their family members have accepted receipt of on-money for sale of above lands as per the rates mentioned in the said banachithi and disclosed the capital gains on the same in their ret....
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.... 96,67,069. 95,880 95,71,189. 1) Vishnubhai Ambalal. 95,71,189. 3.5 Further, Shri Somabhai Ambalal Prajapati in his statement recorded u/s. 132(4) of the Act on 25.01.2010 when confronted with page no. 111 of Annexure A-22, it was replied by him that on this page details of transaction pertaining to above referred to land is written. According to him it has been written by some person coming from the office of the assessee and it has been given to them as there was a little difference in total consideration wherein according to them the total consideration came to Rs. 12,79,45,600/-. 3.6 Shri Somabhai Ambalal Prajapati in his statement recorded on 25.01.2010 has reiterated that the amount of on-money received on Sale of land was paid to him by person coming from the office of the assessee and page no. 111 of Annexure A-22 was also working provided by the representative of the assessee, as there was some difference in consideration received." 11. After considering various submissions of Shri Vivek Prahladbhai Patel, AO made addition of Rs. 3,25,50,000/- u/s.69 in the case of Vivek Prahladbhai Patel with the following ob....
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....sclosed the sale consideration as per the rates mentioned in banachithi and offered capital gains on the same as per the share held by them in the land sold consequent to banachithi. • It is pertinent to note here that the following lands that have been transferred by the sellers are not recorded in the banachithi. In this regard, Shri Somabhai A Prajapati in his statement recorded under section 131 of the Act on 14.12.2011 has specifically in answer to question No. 3 has stated that the land bearing Block Nos. 502, 505, 587,497, and 540 were disputed plots and thus could not be transferred. Thus, in order to honour the terms of the banachithi as the sellers had already received consideration for the sale of land Blocks bearing No. 510, 512-A, 512-B, & 513 were transferred at the insistence and directions of the assessee to the ultimate purchasers. • Snri Somabhai Ambalal Prajapati in his statement recorded under section 132(4) of the Act, referred to above, has admitted to have received the sale consideration from the assessee. • Further, Shri Somabhai in his statement recorded under section 131 of the Act during the assessment proceedings on....
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....ferred to Shri Ajay S Patel (Block Nos. 504, 494, 509, 500, 510, 512-A, 512-B & 513 at Bhadaj) and Shri Dhirubhai Amin (Block No. 502 & 505 at Bhadaj) at the instance of the assessee. Since, Ajay Patel being the final beneficiary has denied to have paid any amount over and above the documented price to the seller, thus, the source of the payments made by the assessee to the sellers in this regard remains unexplained. 3.20 It is dear that an aggregate amount of Rs. 3,25,50,000/- was paid by the assessee during the relevant assessment year towards the purchase of the rights in the above mentioned plots of land which were subsequently transferred to the assessee has failed to explain the source of the same. Thus, the amount of Rs. 3.25,50,000 is treated as deemed to be the income of the assessee as per the provisions of section 69 of the Act and is accordingly added to the total income of the assessee on protective basis. Since the purchaser of the above plots is not the assessee, therefore, substantive addition is being considered in the hands of the final buyers." 12. Similar additions were made in the case of Shri Vivek Prahladbhai Patel for A.Y. 2006-07 and 2007-....
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....ed by way of any of her legal contract. However neither during the course of search and survey operations conducted at the residential or business premises of the sellers any cancellation agreement wherein said banachithi was cancelled was found nor any such agreement has been furnished by Shri Vivek. P. Patel or assessee during the assessment proceedings. Thus, the contention of the assessee that the banachithi was cancelled has not been proved to be correct. • Further, if the banachithi would have been cancelled the original 'banachithi' would have been in the possession of the sellers and not with Shri Vivek. P. Patel. • Further in lieu of lands agreed to have been sold, other lands have actually been transferred by the sellers to the assessee in accordance with the condition mentioned in the 'bana chithi'. This fact, was again reiterated by Shri Somabhai A. Prajapati & Shri Pankaj S. Prajapati in the cross- examination on 14.08.2012. • The sellers have disclosed the sale consideration as per the rates mentioned in banachithi and offered capital gains on the same as per the share held by them in the land sold consequent to &....
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....ee during his statement taken u/s. 131 on 04.09.2012, he stated that he came to know about the assessee only during the post search inquiry i.e. after the date of search 08.12.2009. The assessee has also denied with the association with Shri Vivek P. Patel. It is pertinent to note here that Shri Vivek P. Patel was given power of attorney (notarized) by Shri Vishnubhai Prajapati on 18.06.2009. The power of attorney (notarized) impounded from the office premise of M/s. Arbuda Bricks, A-2, Nandanbaug Shopping Centre, Bhimjipura, New Wadaj, Ahmedabad vide page no. 129 to 135 was related to sale of land(Block no. 513, survey no. 490/2, Tal. Draskoi) and Shri Vivek P. Patel were deputed to do the necessary paper work required for transfer of land. The assessee has also stated that he did not know Shri Vivek P. Patel and he has never acted as agent in any of his transaction. In para 11 & 12 of his letter dated 03.09.2012, he has categorically stated that the assessee did not have any direct or indirect link which establishes his association with Shri Vivek P. Patel. Moreover, the power of attorney belongs to Block no 513 which was transferred to the assessee in lieu of one of the disputed....
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....assessee True sale consideration as disclosed by the sellers of the land Difference between the documented price and actual amount paid 509 6,50,000/- 7,19,880/- 1,50,32,8007- 1,43,82,800/- 500 4,00,000/- 4,45,350/- f.02,98,9907- 98,98,990/- 494 1,51,000/- 1,71,410/- 50,75,7207- 49,24,720/- 504 11,10,900/- 12,36,580/- 2,55,64,5007- 2,44,53,600/- 510 35,00,001 /- 4,00,351/- 1,50,50,100/- 1,15,50,099/- 58, 11, 901 /- 29,73,571/- 7,10,22, 110/- 6, 52,10,209/- 5.2. It has also been confirmed by the sellers that the land was transferred to the assessee(Block Nos. 504, 494, 509, 500, 510, 512-A, 512-B & 513 at Bhadaj) and Shri Dhirubhai Amin (Block No. 502 & 505 at Bhadaj) at the instance of Shri Vivek P. Patel and the assessee has grossly failed to prove otherwise. Further there was no satisfactory explanation to the source of such investment. 5.3. Thus, it is clear that an aggregate amount of Rs. 7,10,22,110/- was paid by the assessee during the relevant assessment year towards the purchase of the above mentioned plots of land. The assessee has failed to ex....
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....kbhai Prahladbhai Patel as per banachithi dated 18-1-2005 was exclusively between those persons and by virtue of the above referred clause it gets cancelled and terminated by this legal instrument in writing executed exclusively between the sellers of the land and the Appellant. The case of the A. O. is solely based on the alleged agreement to sale dated 18- 01-2005 whereas as a corollary to the referred clauses of the registered sale deed it stands cancelled and terminated. Even the party to the agreement i.e. Vivekbhai Prahladbhai Patel has categorically denied that it was not acted upon and implemented for the reasons that all the disputes and objections etc were not removed and therefore sale was forfeited and there was no question of purchasing of land (kindly refer ans. no. 9 of statement dated 24-12-2009 of Vivek Prahladbhai Patel which is at P.B. page no. 193 of Paper Book - II). Assuming without admitting or conceding and in the alternative it can only be concluded that it could be a case of sale of same land to more than one buyer fraudulently and dishonestly which is a very common practice in land dealings where the same piece and parcel of land or property is s....
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....mortgage, sale or gift or is not in writing in any which way..." then in absence of any other evidence or material the addition so made was made on suspicious, surmises, conjecture, whims & fancies. D) U/s.69 of the Act the additions, if any, could be made in such financial year in which the assessee has made investments. (i) Ushakant N Patel v CIT.282 ITR 553 (Guj) "the tribunal lost sight of the fact that s. 69 of the Act opens with the words "where in the financial year immediately preceding the assessment year, the assessee has made investment..." Therefore, in the first instance it was incumbent upon the authority to establish that there were investments made by the assessee; that such investments were not recorded in the books of account maintained by the assessee: and that, such investments had been made in the financial year immediately preceding the assessment year in question," As per the binding ratio laid down by the Honorable jurisdictional High Court of Gujarat in the aforesaid judgment, firstly it was incumbent upon the A.O. to establish that said investment i.e. the alleged amount paid on account of impugned banachithi da....
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....Act in A. Y.s. 2008-09 & 2010-11 are liable to be deleted and it may be held so. (ii) Dr.Prakash Tiwari v CIT,(1984) 148ITR 474 (M.P.) E) Word "may" in section 69 can not be interpreted to mean shall". CIT v Noorjahan, (1999) 237 ITR 570 (SC). Having regard to the facts & circumstances of the appellant's case and also in view of all the submissions made the A.O. should not have made the additions u/s 69 of the Act being unwarranted as the case does not merit to apply the provisions of section 69 though invoked and therefore may kindly be directed to be deleted in full. F) Scope of an agreement of sale in the case of third party particularly when the appellant is not a party to such alleged agreement of sale and Effect and implication of general power of attorney in the name of third party particularly when the appellant is not grantor of such power of attorney. Suraj Lamp & industries Ltd v State of Haryana in SLP (C) 13917 of 2009 the Hon'ble Apex Court has held:- Submissions regard/my an agreement of sale. It is submitted that the facts of case of the assessee are on much better footing inasmuch as the assessm....
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....le consideration paid on the basis of banachithi dated 18-01-2005. It is therefore, requested the Assessment Order be quashed/cancelled. Submissions regarding power of attorney. The A.O. failed to appreciate that no such person would hand over such huge amount and keep on waiting for a better title. The A.O. also failed to appreciate the fact the sale deed executed in favour of the appellant, contained a clause that reads as under :- (kindly refer to P.B. Page Nos. 169 & 170 of Paper book No. IV) "As the land specified in the schedule is sold to you therefore on the basis of this sale deed you are -party of second part entitled and rightful to get the land transferred in your name in the government or semi-government record and for that if necessary as a seller my signatures, answers, confirmations, applications etc are required confirmations, applications etc and myself as a seller being party of the first part is bound to do so" As per this clause, the seller of land was bound to sign such papers etc, which was required for mutation in revenue records. Therefore, the Power of Attorney executed in favour of Vivek P. Patel was the act of....
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....ant N Patel v/s. CIT, 282 ITR 553(Guj) ii) CIT v/s Anil Bhalla, 322ITR 191(Del) iii) CIT v/s. Ved Prakash Choudhary, 305 ITR 245(Del) iv) CIT v/s. P.V. Kalyasundaram, 294 ITR 49(SC) v) Sheth Akshay Pushavadan v/s. DCIT, 130 TTJ 42, ITAT, Ahmedabad. vi) Jawaharbhai Atmaram Hathiwala v/s ITO, 128 TTJ 36, ITAT, Ahmedabad. vii) Bharat A Mehta v/s. ITO, 86 TTJ 369, ITAT, Ahmedabad. viii) DCIT v/s. Prarthana Construction Pvt. Ltd., (Guj). ix) Sunita Dhadda v/s. DCIT ITAT, 'A' Bench, Jaipur." 5. The Commissioner of Income Tax (Appeals) held as under: "19. When the present case is examined in view of this legal and factual position, it is found that (i) Appellant is not a party to banakhat dtd. 18/1/2005. (ii) There is no material on record to hold that Shri Vivek Prahladbhai Patel acted as benamidar of appellant. (iii) The seized material (banachitti dtd. 18/1/2005) was not found from the premises of appellant and there is no corroborative material to suggest that appellant actually paid cash. (iv) Power of Attorney was given by Shri Vishnu Prajapati in favour of....
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....k Patel in all matters. e. No agreement between Vivek Patel and asseesee [Shri Ajay S Patel] has been brought on record. It is claimed by seller Somabhai Prajapati that they transferred plots of land to assessee on instructions of Vivek patel. However, this is not proved in the cross examination and reexamination. As against this, the evidence against the assessee, to the effect that he purchased the land in question as a nominee of Vivek Patel is quite strong and as below:- 1. The fact of Vivek Patel having an agreement with Prajapatis to transact in the relevant land has been proved and upheld in first appeal. 2. The further contention that Vivek Patel withdrew from the agreement and did not deal in any of the said land has been proved to be untrue on account of several evidences against him. A brief note of such evidences submitted in the form of pleading before the ITAT on 25-9-2014 in the course of appeal in the case of Vivek Patel is submitted herewith. 3. The submissions would prove that Shri Vivek Patel acted as per the agreement dated 18-1-2005, paid further amounts due and therefore, acquired the right to deal with the land. 4.....
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....nal evidence given by Ajay S Patel's case, it has been highlighted that the sale agreement with Dhirubhai Amin clearly states that no Banakhat existed. Here it may be noted that the same was on 13-5-2010 much after the search on 8- 12-2009 and hence, the document was tailored, at the instance of Vivek Patel to substantiate his claim that the Banakhat had been rescinded. This will further be proved if the other 8 documents entered into before the search action are filed and subject to further inquiries, since new evidence has been filed. It is requested that further inquiries may be ordered, as above before taking the evidence on record. In view of the above, it can be seen that Shri Ajay S Patel purchased the land as a nominee of Vivek Patel as affirmed by the seller Somabhai Prajapati. The sale which took place shortly after the agreement between Vivek Patel and Prajapati's was at the price agreed upon between these persons or at a higher price, since the cost of land appreciates as is commonly known. Since no evidence has been let in about any market down turn in land and even for the few properties were there was legal dispute, substitution had been made by the....
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....to Vivek Patel. • It is observed by the A.O .that plot bearing Block No. 512A, 512B, 510, & 513 were finally transferred by Shri Somabhai Prajapati in favour of the assessee. • Now question arises whether these plots so transferred in favour of the assessee were having any link with the terms of banachitthi, and have been executed on instruction of Vivek Patel? • It is pertinent to note that Registered Sale Deed executed in favour of assessee does not speak of anything about the terms of banachitthi and or any such banachitthi having been executed in respect of land in question. Any prudent seller would certainly insert the terms earlier entered into with regard to the land being transferred. It can be noticed from one of the specific terms of Registered Sale Deed executed in favour of the assessee categorically and explicitly states that "We sellers additionally undertake and assure to the purchaser that the sellers and their successors, assigner and administrator have not given (assigned) our rights, shares, interest in relation to the land described in the schedule or any of its part to any other person in any such way." A bare reading of t....
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.... The sale consideration has been received by Shri Somabhai Ambalal Prajapati and others through an agent / employee of Shri Vivek P Patel." • As per this observation the lands as recorded in banachitthi has been sold by Shri Somabhai Ambalal Prajapati and his family members. Undisputedly out of 9 plots there is no mention of 4 plots transferred in favour of the assessee, by way of Sale Deed, in the banachitthi. This goes to show that land transferred in favour of assessee has nothing to do with the banachitthi or land has not been transferred in pursuance to the terms of banachitthi. Hence the foundation of case itself is based on contradictions. • The conclusion drawn by the A.O. in para 5.3 is contradictory to his own findings. As per the conclusion, an agreed amount of Rs. 6,52,10,209/-(in F.Y. 2006-07), Rs. 1,99,70,900/- (in F.Y. 2007- 08) & Rs. 73,30,069/- (in F.Y. 2009-10) was paid by the assessee whereas in para 4.5 the A.O. has given a finding that The sale consideration has been received by Shri Somabhai Ambalal Prajapati and others through an agent / employee of Shri Vivek P Patel. The assessee has furnished an Affidavit dated 04/07/2012 d....
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....ection 69 the addition can be made only if: (i) Firstly, the A.O. has to establish that the said investment i.e. the alleged amount paid on account of banachitthi dated 18/1/2005 was in fact paid by the appellant assessee himself and not by any other person. (ii) Secondly, such investment were not recorded in the books of accounts maintained by the appellant assessee and (iii) Thirdly, such investment has been made in the financial year/s immediately preceding the assessment year/s in question. • And on the facts and circumstances of the appellant case:- (i) It is established and proved beyond doubt that the appellant assessee has not made the said investment. Therefore, on this count only, no additions u/s.69 could have been made or should be sustained in all the three years i.e. A.Ys. 2006-07, 2008- 09 & 2010-11 as held by Ld. CIT(A) and it may kindly be upheld so. (ii) The appellant assessee is maintaining regular books of accounts and the A.O. has worked out the difference for making addition on the basis of the balance sheet prepared upon closing and adjusting such books of Accounts. Therefore, this ratio could be....
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.... appellant case:- (i) It is established and proved beyond doubt that the appellant assessee has not made the said investment. (ii) The appellant assessee is maintaining regular books of accounts and the A.O. has worked out the difference for making addition on the basis of the balance sheet prepared upon closing and adjusting such books of Accounts. However for the sake of clarity it is respectfully submitted that the appellant assessee is maintaining regular books of account and the A.O. has worked out the difference for making additions on the basis of balance sheet prepared upon closing and adjusting such books of account. Therefore, this ratio could become applicable if the assessee is not maintaining books of account at all and as such it becomes imperative to add it back under section 69 of the Act. It is an undisputed and admitted fact that the appellant assessee is maintaining regular books of account. Therefore, on this count only no additions u/s.69 could have been made or should be sustained in all the three A.Ys. i.e. 2006-07, 2008-09. (iii) The A.O. has to establish that as per the above stated third ratio the A.O. has to establish t....
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....nt of this Banachitti particularly in view of the specific clause above and also due to non-inclusion of such specific condition to this particular effect. In other words it is a specific contract for specific performance that too by the seller at the first instance and upon being performed so by the seller, the buyer is required to perform accordingly. It is pertinent to mention here that for Non-performance on the part of seller of any of the conditions as mentioned in Sr. No.3 to 7, the buyer is not bound to honour and perform the contract. After laying down the above terms, an amount of Rs. 11 lacs was stated to have been paid which is the earnest money and required to be adjusted in the final payment to be made. But Shree Vivek Patel stated that though he handed over a cheque of Rs. 11 lacs it was not allowed to be encashed because there were other land owners who have not signed the agreement therefore there was a fraud. (Refer Paragraph No.18 at page No.35 of appellate order for A.Y.2006-07 and 2008-09 of Ajay S. Patel and see Question and Answer No.2 of Statement dated 14/08/2012 of Vivek P. Patel in cross-examination by Ajay S. Patel). The same is reprodu....
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.... specified in the registered Sale Deed. But as per P.B. Page No.129 & 130 in the terms laid down at serial No.14 it has been specifically stated by the seller as under :- "We the seller additionally undertake and assure to the purchasers that the seller and their successors, assignors, and administrators have not given(assigned) our rightly shares, entitles & relation on the land described in the schedule or any of its parts to any other person in any such way". 5.1 Further reliance is placed on: (a) Paragraph 2.4 of submission dated 14/06/2013 (refer P.B. Page 236 to 239) and Paragraph 3.B) of submission dated 24/06/2013 (refer P.B. Page 329 to 331) and (b) Paragraph 3.B) of submission dated 24/06/2013 filed before CIT(A) (refer P.B. Page 329 to 331):- No oral agreement contradicting/varying the terms of a document could be offered. (c) Smt Sunita Dhadda v DCIT, ITA No. 751/JP/2011 (A.Y.2008-09) ITAT Jaipur Bench "A" Jaipur. (d) Hanumant Kumar Talesra v ITO ward-2 (1), Udaipur in ITA No. 383/JU/2008 (A.Y. 2004-05). It is respectfully submitted that following is the specific express clause narrated in the registered Sal....
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....n practice in land dealings where the same piece and parcel of land or property is sold to different buyers repeatedly at different consideration without making it known to each others. As per the ratio laid down by the honorable Punjab and Haryana high court(supra) it has to concluded that the oral evidences adduced by Somabhai A. Prajapati and Pankaj Prajapati as accepted by A.O. are inadmissible in view of the Sale Deed registered at a later date. The ratio laid down that, it follows that no oral agreement contradicting/ varying the terms of a document could be offered squarely applies to the facts of the case in terms of the express clause cited above. Once the aforesaid principle is clear then the ostensible sale consideration disclosed in the Sale Deed dated September 24,2002 (A-7) has to be accepted and it cannot be contradicted by adducing any oral evidence squarely applies to the facts of the Appellant's case in as much as that the Appellant (Shri Ajay. S. Patel) was not a party to the banachitthi dated 18-01-2005 and he was a party to the Sale Deed executed on a later dates i.e.25-7-2005, 2-8-2005, 16-1-2006 and 10-07-2007 particularly in view of the facts disclosed in th....
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....05 were sold on 14/5/2010 to Dhirubhai Amin by Chandubhai A. Prajapati himself by the Registered Sale Deed as relied by the A.O. e) By a clear and specific undertaking Shri Chandubhai Ambalal Prajapati has stated in the above said Sale Deed dated 14/5/2010 as narrated in the highlighted portion above in bold letters at para i) above (SUPRA) i.e. that we have never ever given anything in writing as banakhat, banachithi or whatsoever nature in writing relating to sale of the above land to anybody else and/or even if anything given in writing, it is no longer in operation as of today, having been cancelled. This in itself goes to prove & establish that the banachitthi dated 18/1/2005 is cancelled in entirety i.e. for all the nine blocks of land narrated therein. f) Therefore, inspite of being aware of execution of banachithi dated 18/1/2005, the search was conducted on 8/12/2009 & the disclosure was made under the head Capital Gain by the respective owners of land though all were not parties to banachithi, Shri Chandubhai Prajapati has consciously and specifically stated to give the aforesaid assurance & undertaking which clearly goes to the root of the matter and th....
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.... 18/1/2005. Please state whether you entered into monetary transaction prior to this banachitthi? Ans: I had no monetary transaction before the above banachitthi, with Vivekbhai. Q.8: The amount of money as per condition of agreement to sale had to be paid after they are fulfilled and last date stipulated was up to 25/04/2006 please state as to whether any supplementary agreement to sale was executed for making such modifications of the above banachitthi or changes of alternative block numbers or extension of time limit? Please produce it. Ans: In replying to above, I have to state that no such supplementary agreement or additional agreement was made in writing but as per oral under-standing it was decided to offer alternative land of same measurement that of disputed one and to execute by making such document. (3) Cross - Examination of Shri Somabhai by Ajay Patel on 14/8/2012. [Kindly refer to P.B. Page No. 191] Q.5: What Happened after Banachitthi executed? Ans: After this banachitthi, Vivekbhai gave me rupees eleven lakh in cash and promised to pay balance in installment. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATMENTS â....
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.... Ans: It is stated that as stated in col.4 of banachitthi Block No.505& 502 were cleared after some time and document for Block No. 500 was done in F.Y.2005-06 and in respect of Block No.540, title is not cleared as yet over and above I have to state that other compliance of condition of banachitthi is as stated in above ans. No.5 (2) Cross - Examination of Shri Somabhai by Ajay Patel on 14/08/2012 before A.O. [Kindly refer to P.B. Page No. 193] Q.12: Now see condition no.5 of banachitthi in which it is written that you have to pay the premium and convert into old tenure the land of Block No.500. What have you to say to this? Ans: I have not paid the premium for the block No.500 as per the tenure but the deed is executed for this land as per new tenure. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS • In his Cross Examination by assessee on 14/08/2012, in replying question No.3, about ownership of lands, he admittedly stated that he is not full owner of 14.60 bighas of land shown in banachitthi. • In replying question No. 5, he stated that all conditions of Clauses 3 to 7 are not fulfilled ....
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....6: When did you receive this amount and how? Ans: This I have already replied in Ans 4-9 of my statement dated 14/12/2011 Q.7: You say different persons from his office were coming and giving you the money. Please give name of any such person? Ans: I don't know the name of any one, the receipt of money was confirmed with Vivekbhai by talking on phone. Q.8: In how many installments you received money? Ans: I received the money in about 15 to 20 installments. Q.9: When such a big amount is involved and you received in 15-20 installments (you have not received money on the stipulated date per banachitthi), then you must have kept date wise record. Please produce the said record: Ans: No, sir, I have not kept such record. Q.11: Have you received money relating to this agreement to sale from other than Vivekbhai? Ans: No, I have not received any money from anyone else. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS • In his statement dated 14/12/2011, before A.O., in question No. 4, he stated that he received Rs. 11 lakhs on the said date of banachitthi from Vivek P. Patel. ....
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....Patel on 14/8/2012 of Somabhai Prajapati [Kindly refer to P.B. Page No. 435,436, 438 & 442] Q.4: We have come to know that you or your family members are not the owners of the lands mentioned on second page of banachitthi to sale 14.60 bighas of land? Please explain. Ans: In reply I have to state that we are not full owners of 14.60 bighas of land shown in banachitthi but as stated in 509, we are not full owners but in 509 B which is half the area as shown above,we are the owners. Q.5: I invite your attention to clauses 3 to 7 Page 2 & 3 of banachitthi according to which if all conditions are fulfilled then and only we were prepared to purchase the lands at the rates stated the banachitthi. What have you to say? Ans: In reply, I have to state that all conditions of clauses 3 to 7 are not fulfilled because in some part of lands they involved Civil Court litigations which were pending hence all conditions were not fulfilled. However, we had a deal for about 50 bighas of land of other survey numbers. But due to above litigation we had completed the deal for that later on. Q.6: When conditions of clauses 3 to 7 of banachitthi were not fulfilled then ....
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....2,113 & 118 of Anne. A.22 are written block numbers which reveals disputed blocks. Page no. 118 reveal details of block number, area, bighas and where sale deed executed or not against them. And status of 'Disputes' is written which papers are of the opposite party in banachitthi. Q.5: Please explain how come these papers 112,113 &118 are lying in your house when they are stated to be of other party? Ans: Whatever is written therein relate to details of land wise disputes which were sent by their office for obtaining clearance, for which execution of sale deeds were pending. Back side of paper 118 and 111,112,113 are documents received together wherein detailed account is mentioned and it is written in respect of pending documents which are got to be cleared. CONTRADICTIONS IN THE ABOVE ANSWERS IN STATEMENTS • In his statement u/s 131 dated 14/12/2011 before A.O., in replying question No. 3 he stated that Sale deeds for block No. 504,494, 509 & 500 per banachitthi were executed, but remaining blocks were affected by Civil Suits hence were pending although he had received full payment of deal. Hence, against them, separate Sale Deeds for block....
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....TEMENTS (1) Statement u/s 131 dated 14/12/2011 before the A.O. of Somabhai Prajapati [Kindly refer to P.B. Page No. 182 & 183] Q.09: When and in what manner did you received this amount? Ans : I have received these amounts in cash on behalf of Shri Vivek Prahladbhai Patel as per the Agreement to Sell on the dates as mentioned in the Agreement to Sell- January 2005, June 2005, November 2005 and April 2006 or on the nearby dates, in the ratio mentioned in the Agreement to Sell. And these amounts were being sent to me by different persons from the office of Shri Vivek Prahladbhai Patel. And I was giving them the proof for having received the said amount, by writing in their Diary "Money received" and putting my signature. This diary was being taken back by them and its confirmation was being taken by Shri Vivekbhai on phone. Q.10: In the sale deeds executed, the name of purchaser is shown as Ajay Surendrabhai Patel. And in none of the documents name of Vivekbhai Prahladbhai Patel is mentioned either as purchaser or as conforming party. Then how can you say that this amount is given to you by Vivekbhai? Ans: In replying this, I want to....
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....2, in your return of income? Ans: I have shown the capital gain arising out of sale of above survey numbers. I have not shown the remaining amount in the return. In this connection, we three brothers have signed and filed disclosure petition in your office admitting that out of Rs. 13,02,00,000/-, amount of Rs. 5,00,00,000/- is disclosed by my son Pankaj in his statement u/s 132(4).We have disclosed Rs. 7,40,00,000/- as undisclosed income from above transaction. I confirm the above disclosure and repeat the undisclosed income of Rs. 13,00,00,000/- which includes Rs. 5,00,00,000/-declared by my son. Out of above, Rs. 12,40,00,000/- is the on money received in the above land and balance of Rs. 60,00,000/- are declared against paper or asset that may be found. The year wise working of disclosed income will be given later on. (2) Statement u/s 132(4) dated 08/12/2009 of Shri Pankaj S Prajapati before ADIT. [Kindly refer to P.B. Page No. 467 & 468] Q.20. I Show you the papers at Annexure A-10 which were found during the course of search today from your premises. There appear many cash transactions. Out of this, I am showing you Page no 18 to 105, so please exp....
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.... he is unable to reconcile with books of accounts. • In spite of the fact that there was admitted outflow of cash paid to different Government Authorities of Rs. 15,66,500/- & Rs. 1,39,44,021/- i.e. amount as per document (as per table above para 5.1 of the assessment order) as claimed by Somabhai Prajapati that it was given back in cash on execution of the register sale deed which works out at Rs. 1,55,10,521/-. No Fund flow for this outgoing is neither supplied by the A.O. nor placed on record (Body of Assessment Order). On the other hand the disclosure of Income in the hands of respective owners of the land in their proportionate share is disclosed as Long term capital gain in A.Y.'s 2006-07, 2008-09 and 2010-11 by claiming equal amount of deduction u/s 54B of the Income Tax Act by the members of Prajapati family. Though it is not the case of appellant but what the appellant tries to bring on record is that Shri Somabhai Prajapati and his other family members are not as straight forward as it is being projected by the revenue authorities but he was assisted by Legal Eagles and Accommodated by the authorities below in as much as that neither this out flow of cash was....
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....e seller the additions so made cannot be sustained. • Every buyer would expect that the title of land is clear and legally transferable. Any suppression of fact with regard to title amounts to fraud. • A.O. did not examine this aspect. Moreover, seller of land has not discharged their onus by bringing on record the alleged sale consideration was received from the assessee. • Contract cannot be in vacuum, the rights unto a property are transferred by way of a written and registered document. The case as built by A.O. is that a written agreement was cancelled and a new oral agreement was made on the basis of which the land was sold to third party. • Nothing has been placed on record that the so called third party has any link with assessee. • How can a person entrust such valuable rights to a stranger. • Can the settled principles of law be ignored merely for the sake of making addition. • The revenue is making the assessee liable to tax on the basis that a banachitthi that was executed between the assessee and Somabhai Prajapati. It would be appropriate to produce the terms & condition of the ....
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.... assessee is concerned qua the banachitthi it was cancelled, therefore, no liability can be fastened. • The revenue has not placed anything on record suggesting that this contract was renewed or there was any material(documentary evidence) proving novation of contract. In the absence of such evidence the authorities below were not justified in making or sustaining the addition. • The authorities below failed to appreciate the fact that it is a common practice in real estate business that the land is sold to the third parties ignoring the earlier banachitthi with someone. • Therefore, the banachitthi cannot be a concluding document in the light of the fact that there is no evidence suggesting that the sale consideration was paid out of the fund of assessee and at the instance of assessee. There is nothing on record that money was handed over by the assessee or paid by the assessee but the entire addition is made on the basis of a concocted story. • Undisputed facts remain that no documentary evidence suggesting that money was paid by the assessee from his possession or from the business premises or residence. ....
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....ance of the banachitthi dated 18/01/2005 and as such, by its necessary implication, it becomes imperative for the Hon'ble bench to decide the attached proposition as canvassed that : (1) Whether there has been novation, rescission or substitution of the contract in the form of Banachitthi dated 18/01/2005. (2) Whether the impugned Banachitthi dated 18/01/2005 was fraudulent, void/voidable and cancelled? The assessee on the basis of material placed and available on record and submissions made has discharged not only his primary burden in explaining both the above two propositions but proving it to be true and all other presumptions which may be raised in this behalf on banachitthi and the terms under its reference. On the other hand the department in effective and convincing terms has failed to rebut the same except giving some general observations that the claim cannot be considered and on two other counts that 1.)the sellers have disclosed the same and offered it as income under the head capital gain and 2.) Shri Somabhai S. Prajapati's statement that the mutation of those plots referred in Banachitthi and other plots in lieu of those not cleared in the ....
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.... question or other land/s as was done in the case of appellant in past or to be done in the name of any other person/s in future ? Place : Ahmedabad Date : 26-6-2014 Respondent BEFORE THE INCOME TAX RESPONDENT TRIBUNAL, AHMEDABAD BENCH 'C', AHMEDABAD. Appellant v. Respondent Deputy Commissioner of Income Ajay S. Patel Tax, Central Circle 2(2), Ahmedabad Ahmedabad PAN: AETPP8820Q C.O. Nos. 39, 40 & 41/Ahd/2014, . In ITA Nos. 2367, 2368 & 2587/Ahd/2013. A.Ys. 2006-07, 2008-09 & 2010-11, respectively. APPLICATION UNDER SUB RULE 5 OF RULE 18 OF INCOME TAX (APPELLATE TRIBUNAL)RULES,1963 TO CRAVE LEAVE TO SUBMIT SUPPLEMENTARY PAPER BOOK. MAY IT PLEASE THE HON'BLE MEMBERS OF THE BENCH, With due respect to the Hon'ble Members of Ahmedabad 'C' Bench of Income Tax Appellate Tribunal, Ahmedabad, the respondent assessee begs to state as follows: A. PRELIMINARY: (1) That the applicant - respondent has been assessed to Income tax by the Deputy Commissioner of Income Tax. Central Circle 2(2) Ahmedabad, bearing PAN: AETPP8820Q. (2) T....
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....llate and in the middle of the following page he has observed that the contention of the respondent that the banachitthi was cancelled has not been proved to be correct. Ultimately, vide Para 5.3 of the impugned order, the A.O, has concluded his finding that the respondent has failed to explain the source of purchase of plots-blocks and treating the same as deemed income u/s 69 of the Act, he has made addition of Rs. 6,52,10,209/-, Rs. 1,91,00,780/- & Rs. 73,70,769/- in the hands of the respondent, for respective assessment year (4) Being aggreived by the aforesaid additions, an appeal was filed before the Ld CIT(A). In and around the month of June, 2013, the brief was assigned to Anil Kshatriya, Advocate which was earlier handled by another Counsel. Since the additions were made in all the three assessment years under appeal on the basis of eight registered Sale Deeds executed in favour of respondent, his arguments before the Ld CIT(A) were mainly confined around these eight registered Sale Deeds and the appeal was allowed by deleting the additions made u/s 69 of the Act for all the three assessment years. (5) As narrated in sub paragraph 4 & 5 of part A under th....
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....rubhai Amin by Chandubhai A. Prajapati himself by the Registered Sale Deed as relied by the A.O. e) By a clear and specific undertaking Shri Chandubhai Ambalal Prajapati has stated in the above said Sale Deed dated 14/5/2010 as narrated in the highlighted portion above in bold letters at para i) above (SUPRA) i.e. that we have never ever given anything in writing as banakhat, banachithi or whatsoever nature in writing relating to sale of the above land to anybody else and/or even if anything given in writing, it is no longer in operation as of today, having been cancelled. This in itself goes to prove & establish that the banachitthi dated 18/1/2005 is cancelled in entirity i.e. for all the nine blocks of land narrated therein. f) Therefore, inspite of being aware of execution of banachithi dated 18/1/2005, the search was conducted on 8/12/2009 & the disclosure was made under the head Capital Gain by the respective owners of land though all were not parties to banachithi, Shri Chandubhai Prajapati has consciously and specifically stated to give the aforesaid assurance & undertaking which clearly goes to the root of the matter and the issue to be decided as to whet....
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.... BEFORE THE INCOMETAX APPELLATE TRIBUNAL 'C' BENCH AHMEDBAD. IN THE MATTER OF Dy. Commissioner of Income Tax Central Circle 2(2) Ahmedabad V. Ajay Surendra Patel ( PAN: AETPP8820Q) A.Y. 2006-2007 ITA No 2367/A/2013 A.Y. 2008-2009ITA No 2368/A/2013 A.Y. 2010-2011 ITA No 2587/A/2013 & Cross Objection No 39/Ahd/2014 A.Y. 2006-07 Cross Objection No 40/Ahd/2014 A.Y. 2008-09 Cross Objection No 41/Ahd/2014 A.Y. 2010-11 SUMMARY OF FURTHER ARGUMENTS ON BANACHITTHI Conditions of Banachitthi Page 119 to 122 of Annexure A/12 as per Cl 3 to 7 at P.B. page Nos.7 to 9. Conditions as per Bana chitthi Cl 3 to Cl 7 Whether condition are fulfilled by the seller or not. Arguments. The seller shall bring Title Clearance certificate from a Government recognized Solicitor. All its expenditure shall be borne by the seller.(see clause No.3 of Banchitthi at P.B.-I Page No.7) In the land records of form Nos. 7 & 12 of the lands of Block No. 505 and 502, the name of Government is entered. Hence, the payment for the same is not to be made at present but the same is to be paid at the time of second installment. During that period, the seller get ....
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....i (iii) Vishnubhai Ambalal Prajapati who were signatories of Banachitthi and also any of their family members either in part or in full. In fact, Chandubhai Ambalal Prajapati became owner of the said land only on 09/07/2007. (Please refer to P.B.Page No. 399). Thus, it was fraudulent sale and therefore Shri Vivek Patel was empowered to cancel the alleged Banachitthi dated 18/01/2005 unilaterally as explained in Part B on Banachitthi in Paragraph 3 at Page 13 of Synopsis and Summary of Arguments filed on 30/06/2014 and as per the statement of Shri Vivek Patel, Shri Vivek Patel has specifically stated that the Banachitthi was cancelled and hence there is no question of giving any money (Kindly refer to Ans. No. 6 of Vivek Patel at Page No. 36 of the Appellate Order). Further, according to conditions attached to this term at Clause No-4 of the Banachitthi, the Prajapatis were bound to clear the name of Government. Further to it, they agreed and bound themselves that the payment for it was not to be made then but, was to be made at the time of Second installment and as per the schedule of payment it was to be made on 20/06/2005. In other words, after signing of the Banachitthi on 19/01....
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....he agreement and therefore no payment would have been made in pursuance of Banachitthi. Neither the revenue department nor Somabhai Prajapati has placed any evidence to establish that the condition of clause 7 was fulfilled. Non fulfillment of this condition was the reason for cancellation of banachitthi. Therefore, Block No. 540,487 & 497 remains unsold till date and Block No. 502 & 505 were sold to one Shri Chirag Dhirubhai Amin alias Dhirajlal Amin on 13/05/2010 by a registered sale-deed. The A.O. was required to decide the objection to the notice u/s. 148 and served a copy of the order on assessee. The A.O. was also required to give some reasonable time to the assessee for challenging this order. In the instant case, it is not done by A.O. and instead he passed a composite assessment order deciding the objections along with the assessment order as evident from Paragraph No. 3.2 of the assessment order. Reliance is placed on the judgment of Hon'ble Jurisdictional High Court of Gujarat delivered in the case of General Motors India P. Ltd. as reported in [2013] 354 ITR 244/257 (Guj.). In view of the binding ratio as laid down by the Jurisdictional High Cou....
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....s. 132[4] on 25-1-2010, he stated that the amount mentioned in the Agreement for Sale was received by him from Shri Vivek Patel and at the instance of Shri Vivek Patel, he executed Registered Deed of Sale in favour of the assessee in respect of aforesaid 8 plots of land and in favour of Shri Dhirubhai Amin in respect of Block Nos. 502 and 505. It was also clarified by Shri Somabhai Prajapati that 4 Blocks of land bearing Nos. 512/A, 512/B, 510 and 513 sold to the assessee are not appearing in the Agreement to sell as these plots of land were sold in lieu of Blocks of land Nos. 502, 505, 497 and 540 mentioned in the Agreement of Sale as because there were some defects in title of those plots and therefore, similarly situated plots were sold in lieu of those plots. 11. The consideration mentioned as agreed upon in the agreement of sale was higher than the consideration shown as actually paid in the registered Deed of Sale. The difference amount of the plots registered in the assessment year 2006-07 was Rs. 6,52,10,209 in assessment year 2008-09 was Rs. 1,91,00,780 and in the assessment year 2010-11 was Rs. 73,30,069. The seller claimed to have received actually the amount mentione....
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....resumptions. In the above circumstances, we do not find any good reason to interfere with the findings of the CIT[A]. Therefore, all the 3 appeals filed by the revenue are dismissed. 16. In the cross objections the assessee challenged the validity of issuance of notice u/s 148 of the Act and the validity of the impugned reassessment order passed in pursuance to the same. 17. After hearing the rival submissions, we find that the assessee contended that the impugned order being passed without communicating the fact of objection raised by him against the issuance of notice u/s 148 of the Act and therefore, the impugned order of re-assessment is liable to be quashed on this ground also. The AR of the assessee relied upon the order of the Hon'ble Gujarat High Court in the case of General Motors India P. Ltd v. DCIT, [2013] 354 ITR 0244. 18. On the other hand, the DR supported the orders of the lower authorities. 19. We find that, in the instant case, it is not in dispute that the assessee in his objection against the issuance of notice u/s 148 of the Act vide his letter dated 24.12.2011 which was received by the Assessing Officer on 26.12.2011. Thereafter, the Assessing Offi....
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.... Therefore, respectfully following the above decision of the Hon'ble Jurisdictional High Court, we are of the considered view that the impugned order of re-assessment passed by the Assessing Officer without disposing off the objections raised by the assessee against the issuance of notice u/s 148 by a separate order is liable to be quashed. We order accordingly. Thus, this ground of cross-objections of the assessee is allowed. 21. In the result, the appeals of the revenue for AYs 2006-07, 2008-09 and 2010-11 are dismissed, while the cross objections filed by the assessee for AYs 2006-07, 2008-09 and 2010-11 are allowed. Order pronounced in the Court on Friday, the 9th of January, 2015 at Ahmedabad. ============= Document 1 Statement on oath of Shri / Smt. / Ku.... son/daughter/wife of. off 'p.m. 2-13 बाना अफ के मà¥à¤¤à¤¾à¤¬à¤¿à¤• शटल जलीय सरीफक வஸ௠था (5) के समान का अदरक कीपर, सरीक....
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.... . Clearoma था। ciri1 और Cases CAS डीटेलस। मे Anle (YTMi Contd. on Page No...... ............. Hämmend einen रमतहर Document 2 STATEMENT U/S. 132 (4)/131/133A बयान धारा 132 (4) / 131/133A के आधीन Statement on oath of Shri / Smt. / Ku.... son/daughter/wife of. on ....a.m./p.m. A बानारपत करना है कि अपने दरà¥à¤¶à¤¾à¤‰à¤²à¤¾ के बदले में दूसरे 2-14 आपका मे अरे দিठअकाफी imonosk freely. கட Sale 13-1452 Speesihir Sm अदर à¤à¤¾à¤¯ सà¥à¤¥à¤² के गणीत उ ३३ कà¥à¤¯à¤¾ आपने कोर स....
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.... à¤à¥à¤°à¤¾à¤ªà¤¨, बाना चिडी में दरà¥à¤¶à¤¾à¤ˆ सà¤à¥€ जमीन और उसके सामने लिमà¥à¤¬à¥‡ Rate के हिसाब यह बal किया है.. उतà¥à¤¤à¤° Sale dend .... से ही बाबा डिड़ी में बाये ये Blogk No. 504,494, 509 और 500 जेवर के. हो गय पं. 1 और जो बà¥à¤°à¤¾à¤•à¥‹ बà¥à¤²à¥‹à¤• मे है इसमें बà¥à¤²à¥‹à¤•à¥‹ 502,505, 487,437 और 54% पर avil shisput चूल राय à¤à¤¾. इस लिठउस समय पर Sale dead, काहà¥....