TaxTMI 
TaxTMI 
2020 (8) TMI 100
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....ted payments on certain transactions against unaccounted receipts for computing unexplained investment made by him in accordance with section 69B of the I.T Act ? 2. Whether in the facts of the case, the ITAT was right in law holding that unexplained and unaccounted cash investment which did not result into tangible benefit was allowable expenditure under section 37 of the Act as business loss under section 28 of the Act ? 3. Whether the order of the ITAT is not perverse as being contrary to the evidence on record or as in the case Amrakadamb land deal with Sangvilla land deal based on evidence at all ?" 3. The Tribunal accordingly forwarded the statement of case along with paper book for opinion of this court on the above questions of law on the facts of the case stated therein. 4. The short facts of the case are that the assessee, who is an individual and dealer-cum-broker in lands was assessed under Section 158BD of the Act, 1961 on the basis of the seized documents and various statements recorded under Sections 132 and 131 of the Act, 1961 during the course of search and seizure operation on 21.09.1995 at the premises of two other land brokers one Shri Deepak Mehta and ot....
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.... paid by cheque to farmers and land owners and remaining Rs. 87 lakh was received in cash. When specifically confronted with two seizes pages and statement of Shri Dipak Mehta in Question No.4 and 5, the assessee stated that contents of these pages and explanation of Shri Dipak Mehta appears to be correct with minor variations. 5.1 The assessing officer did not accept the explanation given in the reply furnished by the assessee as observed in Para 4.4.4 of the assessment order, which reads as under: "i) Shri Dipak Mehta in his statements categorically stated that full considerations in cash Rs. 90,25,069/- was agreed with the assessee. ii) The assessee has admittedly accepted that the transaction was held between him and Saumya Construction Co. and as replied in his statement he has received Rs. 87 lacs in cash and Rs. 48 lacs were paid by cheque to the farmers directly by Saumya Construction through society. iii) The assessee was asked to file the confirmation letters of alleged cash payments to the farmers but he has neither submitted the addresses of the farmers in full and nor confirmation letters in support of cash payment to the farmers for purchase of land at the rate....
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....merging from the appreciation of seized papers most of the investments have been made during the F.Y.1994-95. On money receipts pertaining to the second land deal of Ramdev-pir no -Tekro were received during the F.Y. 1993-94 The entire on money payment from RDIL at Rs. 12.80 crores has been received only from April 1995 onwards till September, 1995. Similarly the undisclosed income determined for investment and profit in remaining two land deals at 325, 292 have been also determined for part of search year falling in F.Y.95-96 and the brokerage amount, according to assessee's own version was not received and was receivable only. Thus on prima facie merits also assessee is not entitled to any set off of unaccounted income against the unexplained investment made. Further, it is to be clarified that considering the volume of huge land deals entered into by assessee it cannot be automatically presumed that Income received by way of on money receipts was available for investment in the land deals and was not otherwise invested. Hence, the assessee is not entitled to any claim of set off and all the income as well investment determined are liable to be considered without any set off agai....
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....is generally referred to as cash flow statement and it will not be out of place to mention that even in the clubbing of transactions of Hundi loans the Department used to prepare such cash flow statement and then tax the peak amount. We are mentioning it because in those cases ledger accounts existed in different names and consolidation of all the ledger accounts meant that the repayments made to one of the alleged creditors was regarded available to this very assessee for introduction of credit on a subsequent date in another name. The assessee's case obviously stands on a better footing that they are undoubtedly admitted and/or treated as his own moneys received by him and paid by him. So in principle it is difficult to uphold the Department's view. We are not impressed by the plea mentioned in para 10.2 on page 102 that income received by way of on-money receipts cannot be regarded as available for investment in land deals. The Assessing Officer suspects that it was "otherwise invested". In our considered opinion, in is not reasonable or judicious approach. There cannot be any reasonable cause for rejecting the assessee's claim of adjustment of subsequent payments ag....
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....by the Assessing Officer by detailed discussion with regard to various land deals of the assessee. The learned counsel therefore, submitted that though the onus lies on the assessee, the assessee failed in providing any evidence with regard to the expenses/payments made and therefore, the unaccounted cash receipts and payments are required to be taxed under Sections 69B and 69C of the Act,1961 as unexplained investment/expenditure . 6.4 The learned advocate submitted that the Tribunal has not considered the provisions of Sections 69B and 69C of the Act, 1961 in proper perspective and in support of his contentions reliance was placed upon the following decisions: (i) Madathil Zainuddin vs. Commissioner of Income-tax, Kochi reported in [2014] 44 taxmann.com 241 (Kerala), wherein the High Court of Kerala has held as under: "'7. The Tribunal proceeded to analyse the facts on record and opined that the stand of the assessee was different from time to time, so also opined assessee was not even able to establish that the source of income was from gold business. If the first stand of the assessee that funds were transferred from Mumbai to Kerala through bank accounts were to be be....
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.... seized by the police at Chennai. The cash flow statement with reference to the financial year 2000-01 shows Rs. 3 Lakhs followed by Rs. 2 lakhs in the financial year 2002-03 indicating that Rs. 2 Lakhs was from brother Hussein in the business. There were no details with regard to the nature of business. On the other hand, in the first letter addressed to the Deputy Director of Income Tax this Rs. 65 Lakhs was given to Mr. Azeez to purchase gold biscuits for the purpose of starting business by his brother and others. In other words, it was not the amount pertaining to his gold business but an amount for the purpose of gold for his brother's business. This is a relevant fact that has to be taken note of. Having regard to this stand of the assessee and also unexplained income reflected in the cash flow statement, the Tribunal was justified in not placing much reliance on the cash flow statement furnished by the assessee, as it was a self serving one without supported by any regular bank account and documents. 8. Then coming to the statement of assessee, the income of Rs. 1 Lakh each declared in the years relevant to the assessment years 1997-98 and 1998-99. there is doubt expre....
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....nditure over receipts, should be brought to tax and treated as undisclosed income and the two amounts should not be separately taxed. Assessing Officer in the present case did not tax the unaccounted sales and has only taxed unaccounted expenses/expenditure/withdrawals. Before the tribunal, similar plea was raised but was rejected after making reference to the order of the tribunal in the case of Siddhartha Woolen Mills [IT Appeal No. 59 of 2000, dated 25-7-2013]. We have dismissed the appeal of the assessee in the case of Siddhartha Woolen Mills (supra). In the present case, we notice that the tribunal has given relief to the extent of Rs. 1,50,000/- and the Assessing Officer has not made any separate addition on account of profits from unaccounted sales. It is recorded in our order dated 25th July, 2013 in the case of Siddhartha Woolen Mills (supra) that the expenditure incurred was on account of electricity, petrol, tea pool, etc. and the names of the persons and details why the expenditure was incurred had not disclosed and furnished. The appellant has not, in the present case, furnished details or explained nature and purpose behind the "expenditure". Some expenses have been i....
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....t of profits made in the trading account outside the books, it was not possible to telescope the two additions, with the result, he assessed a sum of Rs. 31,000 as income from other sources. Against the order of the ITO, the assessee preferred an appeal to the AAC and before that officer the assessee contended that the ruling of this Court in S. Kuppuswamy Mudaliar vs. CIT (1964) 51 ITR 757 (Mad) enabled the assessee to claim a set-off of the gross profit additions of the past years against the unexplained credits in the year in question. The AAC declined to accept this argument and, in his view, the decision of this Court in S. Kuppuswamy Mudaliar vs. CIT (supra) must be taken to have been overruled by the subsequent decision of the Supreme Court in CIT vs. Devi Prasad Vishwanath Prasad (1969) 72 ITR 194 (SC) : TC42R.1025 with the result, he sustained the order of the ITO. The assessee, thereafter, preferred a second appeal to the Tribunal. The Tribunal held that the decision of this Court in S. Kuppuswami Mudaliar vs. CIT (supra) applied to the facts of this case and that the decision cannot be said to have been overruled by the subsequent decision of the Supreme Court in CIT v....
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....at such additions are as real an income, at any rate as far as the Department is concerned, as the income returned by the assessee, and one can as much as the other constitute the source to explain the credits in the accounts in the subsequent years. Therefore, the decision of this Court does not invest such additions with any special significance as a source to explain the credits in the subsequent years. In any case, it will be a question of fact whether there was evidence to find that such additions were the source of the subsequent credits and in this behalf there is no difference between this source and any other source, apart from the position that with regard to the income assessed in the earlier years, its existence as a possible source of the credits will be a matter of record with the Department while with regard to other sources, their existence may be a matter to be proved." Referring to above decisions, it was submitted by the learned senior advocate Mr. Bhatt that the tribunal has committed an error in allowing set off of gross unaccounted payments on certain transactions against unaccounted receipts for computing unexplained investment made by him in accordance with....
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....However, the Assessing Officer declined to believe assessee's claim for the reason that there is no written agreement between the assessee and the film directors for profit sharing over and above the agreed consideration paid to them and the cost reimbursed for the production of the film. Further the Assessing Officer has heavily relied on the denial made by the film directors against receipt of payments. We are unable to uphold the Revenue's claim for many reasons. In the first place, admittedly assessee was engaged in unaccounted business and accounts seized pertain to clandestine transactions showing unaccounted receipts and unaccounted expenditure. The assessee himself has voluntarily declared undisclosed income of Rs. 43 lakhs over the income returned for the block period. So much so, there is no justification for doubting the entries found in the seized records pertaining to expenditure while accepting the income found recorded therein. When the Department relies on the seized records for estimating undisclosed income, we see no reason why the expenditure stated therein should be disbelieved merely because there is no written agreement and that payments were not made ....
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....h is also seen recorded in the seized records. We do not think there is anything to doubt the genuineness of the transaction because generally what is found by the Department from the seized records is that the business is done partly with black money and partly with white money though accounting of income and expenditure are of insignificant amounts. 10. Learned Senior Standing Counsel for the Revenue has also made reference to the explanation to Section 37(1) of the Act and also to the scope of the proviso inserted to Section 69C of the Act by the Finance (No.2) Act, 1998 with effect from 01/04/1999. Learned counsel for the assessee contended that film production is not an illegal business and therefore payments made though without accounting cannot be said to be illegal payments attracting explanation to Section 37(1) of the Act. We do not think unaccounted expenditure in a proper business can be treated as an expenditure prohibited by law to attract explanation to Section 37(1). So far as the proviso to Section 69C is concerned, in the first place the proviso introduced with effect from 01/04/1999 does not apply to the block assessment for the period covered herein and second....
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....sessee has admitted to the existence of cash receipts and payments and in such circumstances, subsequent payment should be presumed to be made out of the cash available from the earlier receipts. Therefore, the Assessing Officer could not have added the entire gross receipt in the hands of the assessee. It was therefore, submitted that the Tribunal has rightly held that there is no reasonable cause for rejecting the claim of the assessee for adjustment of subsequent cash payments against the earlier cash receipts. OPINION FOR Q.NO.1 8. Having heard the learned advocates for the respective parties and having gone through the materials on record, it is pertinent to note that the assessee did not furnish any detail or particular about availability of the funds from the unaccounted land deals during the course of assessment proceedings as recorded by the Assessing Officer. The assessee failed to furnish the basic and primary facts. Moreover, it appears that the Tribunal has also not considered the fact that the amount of Rs. 2.53 crores pertaining to the land deals at near Ramdev-pirni-tekro between Leela Housing and Infrastructure Housing Pvt. Ltd. and the Saumya Construction has be....
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....the opinion that the Tribunal, which is a final fact finding authority has reversed the findings of the Assessing Officer only on the basis of the principles of law without referring to the facts available on record. Therefore, the decisions cited on behalf of the assessee which are based on facts of each case are not applicable and hence the same are not discussed in detail. 8.7. In such circumstances, we answer the question No.1 in negative i.e. in favour of the Revenue and against the assessee. QUESTION NO.2 9. As regards the Question No.2 for allowing the loss under Section 37 of the Act in respect of unexplained and unaccounted cash investment which did not result into tangible benefit, the factual aspects of the case relating to Baronet land and Jagatpur land are that the assessee claimed the loss of Rs. 2.93 crores on account of payment made to one Shri G.C. Patel for procuring land as the land deal could not be materialized. The Assessing Officer has referred to the statement of Shri G.C. Patel who has deposed that he has not received the said amount. The Assessing Officer has narrated the facts in detail in para 5 with regard to Baronet land and land at Jagatpur. SUBMI....
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....his development right with society were still outstanding and were yet to be settled. Further still in reply to Q.12 on 16-11-1995 it was again reiterated by assessee that he was having development right with society against cash payment and due to dispute between society and present developers he was not having written agreement with any of them. In reply to Q.16 of the statement on 16-11-1995 he clearly admitted existing investment of Rs. 2.93 crores in Baronet land for development rights. Still further when queried about his role in Baronet land deal in Q.11 of his statement recorded on 7-21996, the assessee maintained that this is true that on papers this land deal was finally done between Govind C. Patel and Adani, but all its negotiations were done by him and all cash payment were arranged by him. But since he did not have availability for payments to be made through cheques, he had arranged for cheque payments through Adani's. It was also negotiated by him. Therefore, he was negotiating with the society against the cash payment made. The assessee maintained that since he had negotiated with Shri Govind Patel through Shri Suresh Patel, he was aware about all the facts. ....
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....rejected. (iv) In view of the aforesaid discussion, addition of Rs. 2.93 crores is made in the total income of block period in the hands of the assessee as unexplained investment. Since a sum of Rs. 50 lakhs is paid cash in the F.Y. 93-94 and Rs. 2.43 Crores is paid in cash in the F.Y. 94-95, hence, accordingly addition as unaccounted investment for Rs. 50 lakhs is made in the Asst. Yr. 1994-95 and Rs. 2.43 crores in the Asst. Yr. 1995-96 respectively. (A.Y. 1994-95 Rs. 0.50 crores, A.Y. 1995-96 Rs. 2.43 crores.)" 9.3. Similarly with regard to the land at Jagatpur, the assessing officer in para 5.5.5 of the assessment order has observed as under : "5.5.5 DETERMINATION : i) It is an admitted fact that the land was purchased at the payment of Rs. 10 lacs from the farmers and sold to Shri Govind C. Patel at Rs. 2.16 crores and repurchased by the assessee at Rs. 3.36 crores. Against initial sale, a sum of Rs. 1.90 crores is received by the assessee from Shri Govind C. Patel from 19-10-1993 to 10-8-1994. Rs. 26 lacs were outstanding at the time of repurchase by the assessee. The account was squared up by way of Hawala of Kanubhai Patel to Rs. 1.75 crores and Rs. 1.35 crores payab....
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....ing self professed expert in land clearance etc., it is difficult to accept assesses contents as now taken that he could not get necessary clearance or permission which remains totally unsubstantiated in absence of any evidence. v) Further the amount payable at Rs. 43 lacs as contended in para 10.7 and treating the same as written back liability shows that such amount was not payable by the assessee to Govind C. Patel, which in turn confirmed all the happening about the land deal till date of recording of statement dt. 7-2-1996. vi) In view of the above discussion the total investment in the land at Rs. 102 lacs is added to the income of the assessee u/s. 69 of the Act which includes Rs. 87 lacs admitted by the assessee as his net investment. An undisclosed income of the assessee in the Asst. Year 1994-95 for initial payment to farmers at Rs. 10 lakh and balance for A.Y. 1996-97. (Asst. Year - 1994-95 - Rs. 10 lakhs Asst. year - 1996-97 - Rs. 92 lakhs)" 9.4 Referring to the above findings of the Assessing Officer, it was submitted that there is no evidence for any payment made by the assessee to Shri G.C. Patel and therefore, the assessee is not entitled to claim of any los....
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....m is totally lost to him from the date of search itself due to a sort of precipitate action taken on that date and the sense that negotiations and transactions which were not intended to be recorded and shown came to that and hence the parties involved would take their respective stands on the basis of existing record. Since there is no record existing for booking Shri G. C. Patel and he has not admitted to the receipt of the money paid by the assessee it is a loss to him. 24. On the other hand, Department's contention is that assessee was still having some development rights outstanding which were to be settled and further that it was not conclusively proved by the assessee that the money paid by him was totally lost to him and that too within the block period relevant to this assessment. 25. On careful consideration we find that the information and evidence brought on record in this regard is inadequate for enabling us to take any view in the matter. Respective stands have been reiterated before us but they are basically by way of arguments only and to us they do not appear to be based on some solid evidence - documentary or oral. Actually no evidence has been pointed out....
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....s. So the first part of the deal for sale from the assessee to Shri G. C. Patel and the second part of the deal for reversal of the first part or even by way of sale by G.C. Patel to the assessee was in respect of the rights which were to be acquired from the farmers. In the absence of any agreement those rights were not acquired at all. Of course, there is evidence as pointed out to us available on record that there were disputes in regard to this land. e.g. Shri Suresh Patel's statement dated 30th October, 1995 at page 139 of the Paper Book. So on the facts and in the circumstances of the case and looking to the nature of transactions particularly in regard to the cash transactions which were not intended to be shown to any Government Department it is unreasonable to infer that even after the search the assessee continued to hold some rights in that land. A really reasonable inference would be that assessee made some payments to the farmers being hardly 5% of the value (10,00,000 : 2,16,00,000 or even less i.e. 10,00,000 : 3,36,00,000) in the hope that he would be able to acquire the rights in the lands and deal with them but ultimately on account of the land being vest with ....
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....hat on the basis of page 105 the figure of payment would come to Rs. 62 lacs (i.e. 105-43) so this amount of Rs. 62 lacs with Rs. 15 lacs computed by Assessing Officer would give a figure of Rs. 77 lacs which is admitted by the assessee. In the computation of the Assessing officer this Rs. 15 lacs has, in effect, been considered twice over. Otherwise also it is obvious that the assessee had met from his undisclosed sources the effective loss of Rs. 77 lacs (120-43) and also paid Rs. 10 lacs to the original owners. Hence total investment comes to Rs. 87 lacs only and not Rs. 102 lacs." 10.3 Reliance was also placed upon the findings of the Tribunal, wherein the Tribunal has discussed the legal aspects of the case in para 44 and 45 of the impugned order, which reads thus: "44. As already stated, all these unexplained or unaccounted investments were made for business. Any expenditure pertaining to business has to be allowed for computing the business income. If technically unexplained investment is added u/s. 69 the deduction is allowable to compute the business income. If technically unexplained investment or unaccounted investment is added u/s. 69C the entire expenditure towards ....
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....deemed income as provide in the Act specifically such as Sec.69 can only be taxed. Accordingly aforesaid payments which ultimately did not result into tangible benefit shall be allowable also as expenditure u/s.37." 10.4. It was submitted that the Tribunal after taking into consideration the facts of the case and after considering the case laws cited before it, has allowed the loss claimed by the assessee and the Tribunal also relied upon the amendment made in Section 69C of the Act w.e.f. 1st April 1999, whereby a proviso was added for disallowance for deduction under any other head of income with regard unexplained expenditure, which is deemed to be the income of the assessee under Section 69C. It was pointed out that the Tribunal also relied upon decision of the Supreme Court in case of Godhra Electricity Co. Ltd. vs. CIT 225 ITR 746, to hold to apply the real income theory to allow the claim under Section 37 of the Act. 10.5 The learned senior counsel for the assessee relied upon the following decisions: (i) Referring to the decision in case of Principal Commissioner of Income-tax v. RJD Impex (P.) Ltd. reported in [2016] 69 taxmann.com 306 (Gujarat), it was submitted that t....
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....held to be business loss. 6. The Tribunal, after considering the material on record, found that it was an undisputed position that the assessee did in fact trade in processed agricultural produce, in connection with which the advances in question were made, and it was in the course of this trading that, the business loss of making unrecoverable advances was incurred. The Tribunal found, as a matter of fact, that the losses were wholly incidental to the business carried on by the assessee. It further noted that there may not be any trading transactions of these products in the current year, but the business of the assessee has not come to a halt. No doubt, the criminal complaints filed by the assessee had not reached finality and the persons who allegedly and fraudulently obtained these advances were on bail granted by the High Court, however, the remote possibilities of recovery did not take away assessee's right to claim reasonably foreseeable business loss. The Tribunal noted that the Commissioner (Appeals) had given categorical and detailed findings about these advances having become actually bad and these findings remain uncontroverted and accordingly, confirmed the relief gran....
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....e decision of this court in case of COMMISSIONER OF INCOME TAX vs. MAHENDRA N. SHAH reported in 280 ITR 462 (Guj), wherein it was found that the Tribunal has recorded as a matter of fact, that there is evidence in the form of telegrams, correspondence as well as assessee's attempt through Consulate General of India to recover the money, but in vain and that two post dated cheques received from intermediary had not been honoured and the assessee had not received anything against the amount which was collected by Dubai party by retiring letter of credit. In that case, the Tribunal has further recorded the following findings of facts : (i) the assessee had in fact suffered a loss to the tune of Rs. 3,45,000; (ii) the loss related to the business, came to the knowledge in the year under consideration; (iii) contention that the transaction was not genuine was not even the case of the AO because the AO himself had observed in the assessment order that a fraud had been committed by Dubai party by presenting false shipping documents; (iv) in face of the correspondence and telegrams on record the assessee had prima facie established incurring of loss, but the Revenue had failed to ....
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....he would be able to acquire the rights in the lands and deal with them but ultimately on account of the land being vest with disputes, litigation and ultimately on account of the intervention of the search and seizure proceedings absolutely nothing came out of it and the assessee lost his money. However, the Tribunal presumed that the assessee made payment of Rs. 2.93 crores to Shri G.C. Patel in arriving at such finding which is not borne out from the record. It appears that the Tribunal has misdirected itself by observing that it cannot be reasonably inferred that by paying cash amount of less than 5% of the total value, the assessee would still be able to claim some rights in the land when there is absolutely nothing formal like cheque payment or any written agreement etc. in regard to this deal. The Tribunal, therefore in total disregard to the findings of fact recorded by the Assessing Officer supported by the material documentary evidence on record has only on the basis of the assumption and presumption, remanded the matter back to the assessing officer to decide the issue of allowing loss amounting to Rs. 2.93 Crore for payment made to Shri G.C. Patel. 11.1 We are of the op....
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....sessee and therefore, the assessee would not be entitled to claim Rs. 2.93 crores as business loss either as allowable expenditure under Section 37 or business loss under Section 28 of the Act,1961 with regard to the unexplained or unaccounted cash investment which did not result into tangible benefit to the assessee. As the Tribunal has remanded. QUESTION NO.3 12. With regard to the Question No.3, the Tribunal has deleted the addition made with regard to the two land deals, namely, Amrakadam and Sangvilla. The facts of the case with regard to this issue are that the assessee failed in discharging his primary onus for identity of creditor, genuineness of the transaction, and creditworthiness of the creditor. The assessee claimed that the payment made to the farmers by him was an allowable expenditure. The Tribunal has recorded the factual position in the following paragraphs with regard to the issue of the said two land deals, which reads thus : "2. The date of commencement of search was 21.9.1995 and the date of receipts and documents u/s/ 158BD of the Act was 11.7.1996 and the assessment was completed on 30.9.1997. On the basis of search and seizure operations carried out at ....
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....r itself runs into 112 typed sheets and carries almost an equal number of sheets as Annexures being Xerox copies of some of the seized papers and the copies / synopsis of some of the recorded statements. Assessee's grounds of appeal and SOF run into 48 types sheets and are accompanied with three Annexures. Very detailed hearings took place before us in the course of which the learned Advocates for the assessee pressed and elaborated very succinctly the points taken in the grounds of appeal and SOF. The learned Sr. DR also very proficiently and empathically defended the assessment order. He furnished written submissions (in ten closely typed sheets) also primarily in the form of synopsis and a sort of summation of Department's stand. Very detailed submissions were made before us from both sides on each of the disputes and transactions involved but some common aspects of the respective stands run through almost all the disputed items. For facility of exposition it would be better to note first some of those common aspects" 12.1 The Tribunal, thereafter recorded its finding in respect of Amrakadam land in para Nos.12 to 16 of the impugned order, which reads thus : "12. Bond....
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.... in the seized documents. 14. It is submitted by the learned Advocate of the assessee that the learned Sr. DR is not justified in emphasising that the complete address of the original owners were not furnished. It is pleaded that the cheque payments are made to the original owners and those persons are identifiable and at any rate the assessee had given the names and Vejalpur was not such a big place that the person could not have been identified; only if Department tried to locate/identify them. The point made out is that the complete information is furnished by the assessee and Department has not tried to verify it at all. In regard to the confirmatory letters it is submitted that the original owners after receiving the full money were no more under the control of the assessee and hence Department should have attempted to verify the correctness of assessee's claim. Ultimately it is submitted that the profit shown in a sum of Rs. 32.70 lacs on a deal of a total sum of about Rs. 1.34 crores and that too within a short period of a couple of months is more than reasonable and deserves to be accepted. 15. We have considered the rival submissions and material on record. The sei....
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....eading 'A' on page 62 he considers Sung villa Land bearing F. P. No. 259. The Assessing Officer has added Rs. 70 lacs for unexplained investment by the assessee by way of payment to Shri G. C. Patel and has also added Rs. 7.5 lacs for half share of the brokerage on this land. Assessee's contention is that he was merely one of the brokers for this land deal and hence there is no question of his giving Rs. 70 lacs from his own resources. His claim is that the said sum of Rs. 70 lacs was first received form the prospective buyers of the land and then passed on to Shri G. C. Patel. Hence according to him it is no includible in his total income. In regard to brokerage his point is that he hoped to get the brokerage but really he had not got it and thereafter the whole deal gets lapsed consequent upon the search and seizure operation on 21.9.1995. His alternative argument is that brokerage eve if due to him was not actually received and as he follows cash basis it was not taxable in his hands. 41. Before us in the oral and written submissions respective stands are taken by the parties and our attention has also been drawn to that particular entry in the seized papers. 42. We have v....
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.....3 12.3 Referring to the aforesaid findings of the Tribunal, the learned senior counsel for the Revenue submitted that Tribunal erred in deleting additions, though the assessee failed in discharging his primary onus. Attention was invited to the observation made by the Tribunal with regard to Amrakadam land in para No. 14 by rejecting the contention made on behalf of the Revenue that the complete address of the original owners were not furnished by observing that the cheque payments made to the original owners, who are identifiable and the assessee had given the names and Vejalpur was not such a big area that the person could not have been identified; only if the Department tried to locate/identify them. It was submitted that the Tribunal treated the names given by the assessee of farmers in Vejalpur land as the complete information. 12.4 The learned senior counsel for the Revenue relying upon such observation made by the Tribunal submitted that the impugned order is a perverse order as there is an erroneous appreciation of facts on record by excepting the contention of the assessee that only the names of the farmers in the Vejalpur area would amount to furnishing complete inform....
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....ee, burden of assessee stood discharged. 13.2 It was therefore, submitted that in the facts of the case, the Tribunal has found that the complete information was provided by the assessee with regard to the payments made to farmers and the Tribunal has rightly held that the burden cast upon the assessee has been discharged as the Assessing Officer has failed to carry out any further enquiry to identify the person or has failed to take any further steps for identifying the person, it cannot be said that the impugned order of the Tribunal is perverse. It was therefore, submitted that as the Tribunal has come to the finding of fact on the basis of the materials on record, such finding cannot be said to be perverse or has been contrary to the evidence on record with regard to the two land deals Amrakadam and Sangvilla. OPINION FOR Q.NO.3 14. Having heard the learned counsel for the respective parties and having gone through the materials on record, with regard to the controversy raised vis-à-vis, the Question No.3 to find out whether the findings given by the Tribunal are perverse or not, in view of the materials available on record, it would be necessary to refer to the findi....
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.... of Rs. 32.70 lacs which this transaction had generated - because the buyer for the land which had been agreed to be acquired from its owner at Rs. 851 per sq. yd., could found only within a matter of one month @ Rs. 1125 per sq. yd. so that the entire payment - both by cheques and cash, that was payable to the landowners was arranged directly form the buyer to the landowners. 4.4 A perusal of the above would also satisfy your good selves the reason for there being minor differences in the figures which have been mentioned in your letter presumably on the basis of a cursory look at the concerned material." 4.4.3. In course of discussion on 15-09-97 the Authorised Representative of assessee was requested to furnish complete names and address, date(s) and payment to farmers along with their confirmation. In reply there to the assessee has simply furnished a list of names according to which recorded payment was made. During hearing on 19-09-97 it was stated by Authorised Representative present that, nothing further was to be added / submitted. 4.4..5 In view of above facts and as admitted by assessee himself addition of Rs. 84.81 is liable to be made to the total income of the ass....
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....nder : "Para 8 : - Page 105 : seized from the residence f Suresh Patel contains a summary of land transaction between you and Govind C. Patel. An amount of Rs. 70 lacs stated as paid by you in cash to Govind Patel for Sangvilla land was found entered. Please explain the source of payment by you." iii) The assessee replied vide para No.11 of 11-9-1997 as under : "Para.11.2 : In so far as first transaction of Rs. 70 lacs is appearing on seized paper 105 on which I have to draw your attention to the relevant portion of may statement recorded on 1411-1995 attended vid A.22. What is that shows is the true nature of transaction." iv) The assessee's reply is not clear and he has simply referred to reply to Q.11 (2) as contained in Annex. 22 of his letter, and hence vide order sheet entry dt. 15-91997, the assessee was again asked to explain the sources of payments of Rs. 70 lacs as clearly coming out from the seized page 105 and its narration and as explained by Shri Suresh Patel and stated by the assessee in reply to Question No.7 & 8 of statement dtd. 14-11-95 and 07-2-96 respectively. the assessee has not made any further submission and submitted on 19-91999 that they have ....
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....nding given by the Assessing Officer with that of the Tribunal in respect of two land deals, it appears that the Tribunal has discarded the same on the ground that furnishing the name in the area of farmers by the assessee would be enough to identify the person as Vejalpur is not such a big place that the person could not have been identified. Such finding arrived at by the Tribunal in para 14 of the impugned order is nothing but a perverse finding because it is not possible to find out to locate or identify person only because he belongs to a particular area in absence of any specific address. The Tribunal has committed grave error by shifting the burden on the department on the basis of such vague information provided by the assessee. Thus the very basis and foundation of the Tribunal to delete the addition made by the Assessing Officer is erroneous and perverse as the Tribunal has considered the irrelevant factor to arrive at such conclusion. 14.4 Similarly with regard to the Sangvilla land deal, the Tribunal in para 42 has branded the entry in the ceased papers as disjointed on the ground that the entries of that sheet at Annexure-A/1 found from the premises of Shri Suresh Pat....