TaxTMI 
TaxTMI 
2016 (7) TMI 852
X X X X Extracts X X X X
X X X X Extracts X X X X
....ds a sum of Rs. 78,50,000/- followed by stamp duty and registration charges of Rs. 3,85,000/- and 78,850/-; respectively. There is further no dispute that the sale deed stood cancelled on 30.06.2010 before the Sub-registrar himself. The issue however in the instant case is about the source of the above stated purchase consideration and expenses totaling to Rs. 83,13,850/- which has no bearing so far as cancellation of the sale deed concerned. This assessee Shri Chandrakant N. Patel washed away his hands by adopting stand that the copurchaser Shri Girish Ramanlal Vyas was in fact the real purchaser having borne the entire purchase price and his name was merely in the capacity of a friend. The other co-vendee in fact executed an affidavit dated 22.06.2010 supporting the assessee's case. He took a contrary stand in his own assessment through a reply filed on 22.12.2011 pleading therein that no payment of the purchase price was in fact made since the entire transaction was based on a fraudulent power of attorney and same stood cancelled later on. He further stated to have executed the affidavit in question in order to get the assessee out of police cases by doing small favour. The Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellant to cross-examine the other co-owner, Shri Girish Ramanlal Vyas which was duly done by the appellant. 4.2 During the course of appellate proceedings, the appellant rebutted the observation of the AO. The relevant portion of the submissions are reproduced herein as under for the sake of convenience: "These findings of the assessing officer are rebutted as under. 1. As noted in the assessment order assessee filed return of income 22-07- 2009 and his case was selected for scrutiny under CASS and notice u/s 143(2) dated 20-08-2010 was issued and served to the assessee. The return of income was processed u/s 143(1) on 09-08-2010. While filing return of income the assessee did not have the premonition or third eye to see that his return will be taken up under scrutiny and therefore the allegation that he has resorted to cancellation agreements to avoid payment of tax becomes baseless. 2. The other party to the sale deed Shri Girishskumar Ramanlal Vyas has executed affidavit on 22-06-2010 pointing out that the document of agricultural land was executed on 29-09-2008 vide registration No.11870. But the real fact is that the alleged cash consideration of Rs. 78t50,000 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xecuted by him on 22-06- 2010 This fact also proves beyond doubt the stand of the assessee that no investment has been made by him and therefore the question of any addition in his hands does not arise because the said addition has already been made in the hands of Girush Ramanlal Vyas who is the real person for the alleged land transaction. This is in consonance with the principle of law laid down by the Supreme Court in the case of ITO V/s C.H.Atchaiah 218 ITR 239, that A.O can and he must tax the right person and the right person alone1. 5. Sale deed bearing No.11870 dated 29-09-2008 has been executed between assessee and Girish Ramanlal Vyas as purchaser and Shri Bijalbhai Khengasrbhai Rabari residing at Morali Gam Dist. Gandhinagar. As mentioned in the sale deed this land has been purported to have been purchased by the seller from the original land owners Shri Ranchhodbhai Bhalabhai, Ramabhcii Bhalabhai and Shushilaben Bhalabhai. Cancellation deed dated 30-06-2010 of the sale deed has been duly registered with the Sub-Registrar vide registration No.9173 between assessee and Grirish Ramanlal Vyas on one side and Bijalbhai Khengarbhai Rabari on other side pointing out that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deeds to escape, legal actions consequences. The impugned sale deeds were executed in the month of September ,2008 in the month of October 2008 itself the land owners on 9. Coming to know of such forged deeds swiftly moved the court for the intervention and declaring the said deeds as null and void ab-initio. Without enquiring in to these legal documents brought to his notice and the dates of which fall in the F.Y 2008-09, have been ignored and he has made observation that the cancellation deeds has taken place in the F.Y.2010-11 and therefore he has not taken cognizance of these documents ignoring the settled legal principles laid down by the Supreme Court that all the surrounding circumstances impinging on the issue under consideration has to be token in to consideration before making the assessment. (Refer to decision of Sumati Dayal 214 ITR 801 S.C) Therefore the findings/observations/ comments appearing on page 16 of assessment order are contrary to the law and therefore deserved to be rejected. 10. After submission of these legal documents which have also been executed prior to initiation of scrutiny proceeding and if the assessing officer was doubting these documents and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Durgawati Singh (All.) 234 ITR 249; and (ii) Banyan & Berry Vs. CIT (Guj.) 222 ITR 831 4.4 It can further be added that protective assessments where income primafacie appeared to be income of either of two parties, the IT authorities' action of assessing income protectively has been held justified even by Hon'ble Supreme Court of India - Lalji Haridas Vs. ITO & Anr. (S.C.) 43 ITR 387. 4.5 Under the stated circumstances, that there is a sale deed wherein cash payment of Rs. 78.5 lacs is evidenced and stamp duty is also paid in cash, the contradictory statement given by the other co-owner i.e. Shri Girish R. Vyas. When compared with his affidavit dated 22.06.2010 and other overwhelming facts brought on record by the AO, I am of the view that the action of the AO by treating such value of investments in land, including stamp duty and registration fee as unexplained is correct. Accordingly, I confirm the addition of Rs. 83,13,850/-." 5. Learned Authorized Representative opens up assessee's arguments. He inter alia submits that the sale deed in question stands nullified as based on fraudulent power of attorney and it is assessee's co-vendee who has paid the entire purch....