TaxTMI 
TaxTMI 
2019 (2) TMI 222
X X X X Extracts X X X X
X X X X Extracts X X X X
....he facts of the case that the banachitthi had no legal enforceability as is discussed by the A.O in the order nor was the advance money of Rs. 1,00,000/- transacted through banking channel. (2) On the facts and circumstances of the case, the Ld.CIT (A) ought to have upheld the order of the Assessing Officer. (3) It is therefore prayed that the order of the Ld. CIT(A) may be set aside and that of the order of the Assessing Officer be restored to the above extent." 3. The solitary issue raised by Revenue in this appeal is that Ld CIT(A) erred in deleting the addition for Rs. 92,90,500/- after having reliance on the Banachitthi which has no legal enforceability. 4. Briefly stated facts are that the assessee is an individual and has declared her income salary, capital gain and income from other sources. The assessee along with her spouse has purchased and sold two plots bearing Nos. 11 and 11A located in Sanand District. The assessee and her spouse was owner of these two plots in equal ratio. The assessee during the year has shown a short term capital gain of Rs. 4,85,230/- on the sale of such plots. The necessary details of purchase and sales of the plots stated a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eed that possession shall be handed over to M/s. NPPL after the receipt of the entire sale consideration and accordingly sale deed will be executed. v) It was also agreed that sale/purchase deed will be completed within the 3 months of getting the title of the property cleared. 4.4 In view of the above, the AO held that the Banachitthi between the assessee and NPPL has no evidentiary value. Accordingly, the assessee was show-caused proposing the addition of Rs. 97,75,770/- being the share of NPPL. The assessee in compliance to it submitted that she has shown correct amount of sale consideration as well as short term capital gain. 4.5 The AO further issued a notice u/s 131 of the Act to the director of M/s. NPPL who has confirmed the transaction of receipt of payment of Rs. 92,90,000/- for each property. The director of NPPL also admitted the fact that the money was deposited in the bank account. 4.6 However, the AO being dissatisfied held that the entire transaction has been made by the assessee to reduce the tax burden. Accordingly, the AO held that it was a colorable device made by the assessee to escape for the tax liability. Accordingly, the AO made the add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ai Ravjibhai Vasani vs. Department of Income Tax in IT(SS)A No.24/Ahd/2010. v. The registration of Banachitthi is not compulsory and therefore non registration of the sale cannot surpass the real evidence available on record. vi. The Hon'ble Gujarat High Court in the case of Taraben D/o. Nanubhai Kasanbhai Patel vs. Shaileshbhai Rangilabhai Patel - No.199 with C.A. No.6470 of 2012 with Appeal From Order No.200 of 2012 with C.A. No.6471 of 2012 has upheld the validity of Banachitthi. vii. The Hon'ble Supreme Court in the case of Brijmohan vs. Sugrabegam reported in Laws (SC) - 1990-7-11 - SCC-1990-4-147/JT-1990-3 255/CDJ (SC) - 1990-0-190 Civil Appeal Nos. 1893 of 1989 and 1984 of 1989 has decided the similar issue in favor of the assessee. 5.6 In view of above, the Ld CIT(A) deleted the addition made by the AO by observing as under: "4.16. In view of the aforesaid discussion, it is clear that the appellant has submitted all the documents in support of the transactions carried out and to examine the veracity of the transactions the AO has also examined the confirming party namely Ms. Nikshal Property Pvt. Ltd. Nothing adverse was found by the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....held that the Banachitthi are enforceable agreement to sell the properties. Therefore the same cannot be doubted. 7.3 The Ld. AR further submitted that the provision of Indian registration Act 1908 recognizes the transaction of sale of immovable property even if these are not based on registered documents. The ld. AR vehemently supported the order of ld. CIT-A. 8. We have heard the rival contentions and perused the materials available on record. In the instant case, the assessee has sold her share in the plot for Rs. 41,80,000/- for each plot. However, the AO observed that each plot was sold to M/s. ASPL for Rs. 1,76,51,000/-. Out of such amount, an amount of Rs. 92,90,000/- was given to the confirming party, which was not believed by the AO during the assessment proceedings. Accordingly, the AO made the addition of Rs. 92,90,000/-. 8.1 From the preceding discussion, we note that the assessee claimed that the sum of Rs. 92,90,000/-was received by M/s NPPL in pursuance to the Banachitthi dated 06-09-2010. This Banachitthi dated 06-09-2010 was disbelieved by the AO as it was not registered and made on Non Judicial Stamp Papers. 8.2 In this regard, we find important to ref....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... channel as evident from registration deed placed on pages 34 to 69 of the paper book. The relevant finding is recorded on page 37 of the paper book which reads as under: "Rs.92,90,000/- Rupees ninty two lacs ninety thousand only paid by the purchaser to the Confirming party by Cheque No.118729, dated 28-04-2011 drawn on Rajkot Nagrik Sahakari Bank Ltd." 8.6 Similarly, we also note that the impugned transaction was duly confirmed by the director of NPPL in the statement recorded u/s 131 of the Act. The director of NPPL duly admitted the fact in the statement recorded under section 131 of the Act that the impugned transaction was duly disclosed in its books of accounts. 8.7 We also find support and guidance from the order of this Tribunal in the Case of Smt. Sapnaben Dipakbhai Patel vs. ITO reported in 73 taxmann.com 288, wherein, it was held as under: "Section 53A provides a shield to defend the possession taken by virtue of the agreement. The vendee can claim protection of the possession even against the owner, i.e., vendor, during the period sale deed was not registered. The person, who has acquired the possession on execution of agreemen....