TaxTMI 
TaxTMI 
2020 (10) TMI 706
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.... deleting the addition of Rs. 10,83,75,750/- made by the assessing officer on account of unexplained investment by the assessee from his undisclosed sources made in purchase of land from various persons/farmers by holding that "the AO has not brought any evidence on record to show that the appellant had purchased the land from various persons/ farmers on agreements/ikrarnamas or power of attorney in his name and later transferred the same to M/s Horizon Buildcon Pvt Ltd., on power of attorney of the original owners", ignoring the detailed discussion of the same in the assessment order. 2. Whether the Ld.CIT(A) is right to hold that "the AO has also not brought any evidence on record to show that the appellant had received any payment from M/s Horizon Buildcon (P) Ltd towards sale consideration of the lands in question in the capacity of owners of land", ignoring the facts on record that M/s Horizon Buildcon (P) Ltd has made payments through cheques and in cash to Sh. Surjit Singh and all of these payments have been found recorded in the books of accounts of M/s Horizon Buildcon (P) Ltd as discussed in the assessment order by the AO as well confirmed by the Ld. CIT(A)-1, Lu....
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..../s 69 /69B of the IT Act, 1961 by holding that the Documents i.e. MOU dated 22.01.2008 and supplement MOU dated 18.03.2008 which were found and seized during the time of search, though not signed by either of the parties, in this case; could not be taken as evidence of the payment of unaccounted money over and above the registration price of impugned land purchase, ignoring the detailed discussion of the same in the assessment order. 2. Whether the Ld.CIT(A) is right to hold that various ikrarnamas, photocopies of which were found and seized during search viz. A-9 DNB-1 are collusive in nature, as claimed by the assessee, when these documents have actually been seized from the premises of the assessee itself. 3. Whether the Ld.CIT(A) is right to conclude that various documents found and seized at the time of search have no evidentiary value when the assessing officer has discussed in detail in para 05(a) to (h) of his assessment order dated 21.03.2014 that the same reflect the actual state of affairs of business transactions carried out by the assessee as compared to what is reflected in its books of accounts. 4. The Appellant craves leave to add or amend....
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....e, ignoring the detailed discussion of the same in the assessment order. 2. Whether the Ld. ClT(A) is right to hold that various ikrarnamas, photocopies of which were found and seized during search viz. A-9 DNB-1 are collusive in nature, as claimed by the assessee, when these documents have actually been seized from the premises of the assessee itself. 3. Whether the Ld.CIT(A) is right to conclude that various documents found and seized at the time of search have no evidentiary value when the assessing officer has discussed in detail in para 05(a) to (h) of his assessment order dated 21.03.2014 that the same reflect the actual state of affairs of business transactions carried out by the assessee as compared to what is reflected in its books of accounts. 4. The Appellant craves leave to add or amend the grounds of appeal on or before is heard and disposed off. 5. It is prayed that the order of the Commissioner of Income Tax (Appeals), be set-aside and that of the AO be restored on merits. 7. In all the four appeals issues involved are similar in nature, therefore, for the sake of convenience and brevity, we are taking first the appeal for the A....
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....nature/type of account i. e. saving account/current account/OD account/loan account etc. etc. 2. As per information available with this office, during the year under reference, you have purchase following land at Village Sultanwind from the persons mentioned below for a total amount of Rs. 10,92,76,250/- :- s. N Name of seller Khasra No. Total area Rate per Sq. Yrds Total amount paid of purchase Date of purchase FY 1. Dilbhag Singh & Hira Singh 4431 3K 10M = 1750Sqyrds 1900/- 33,25,000/- 7/10/2008 (2008-09) 2. Fakir Singh 4436, 4566 4K5M = 2125 Sqyrds 1650/- 35,06,250/- 15/12/08 (2008-09) 3. Harbans Kaur -4415, 4418, 4419,4427, 4428,4430, 4436, 4437, 5506/4425,5507/4432 15K7M = 7675 Sqyds. 13 K = 6500 Sqrd 1200/- 1100/- 92,10,000/- 71,50,000/- 27/11/08 (2008-09) 4. Satpal Swam, Amarjit Prithpal, Gurmeet, Kewal 5511/4564/5512/456 4, 4537, 4546, 4556, 4563, 4565, 6081/4541 40K = 20000 Sqyrds 1315/- 2,63,00,000/- 7/11/2008 (2008-09) 5. Balbir, Jasbir & Ranjit Singh 4429 3K = 1500Sqyrd. 2100/- 31,50,000/- ....
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....ring the year under consideration along with name & address of the persons from you have purchases the Land and to whom you have sold the said Property/Land: I wish to state and submit that I had neither purchases nor sold any assets/property/land at village sultanwind in my personal capacity during the previous year relevant to the assessment year 2009-10. As such this question is not relevant and applicable at all. I would like to bring to your kind notice that during the year under consideration, I had represented as power attorney holder on behalf of the various farmers as per details given below who had directly sold the land at village Sultanwinder to M/s Horizon Buildcon(P) Ltd. It is respectfully submitted that in addition to being a land lord and property consultant I am active in public life and I command respect among farmer community. These farmers approached me to obtain CLU and to represent them in order to protect their interests. Since I was not able to arrange the CLU therefore i acted as their attorney/agent without any monetary benefits. The photocopies of the some power of Attorney given byfamers to me and as available with me as on da....
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....the farmers in cash being withdrawals from SB a/cand payments received in cash at the time of registry DOC2282 5.24.02.09 DOC 2971 11.12.09 i) Harbans Kaur 4417.4 20K- 46.00 La Rs. 50.00 Lacs Amount refunded to t.he farmers out of cash withdrawal from my saving bank account i) 14/07/09/DOC3 33 & I6/11/09/DOC2 725 ii) 14/07/09/DOC 1239 iii) 12/11/09 DOC 2700 iv) 24/12/08 DOC 2282 v) 23/05/08 DOC 149 it) Manjeet Kaur 222.44 05M cs received by me Hi) Fakir Singh 23.442 through cheque iv) Pargat Singh & Jagir Singh v) Rajinder Kaur alias Balwinder kaur vi) Swarn Singh, Amarjit Singh, Gurmeet Singh, Pritpal Singh, Kewek Singh & Charanjit Kaur, Iqbal Kaur 4,4565. 4566.4 567,44 37.550 4/4425, 4436, 5511 12/4564 It is clearly evidence from the above charts that I had represented as a Power of Attorney (POA) of the above farmers and the payments received by me on their behalf has been refunded them without any monetary benefits. The copy of the sale deed in respect of land sold by you to M/s Horizon Buildcon (P) Ltd. 8/11, Janspura Extens....
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....on to make the deal with the said company for sale of land at rate offered in the aforesaid MOU. 3) That the rates in the aforesaid MOU were quoted and offered for commercial approved land to the said company. 4) That all the costs for obtaining the approvals for change in land use (CLU) and building plans sanctioned form the appropriate authorities would have been paid and borne by us. 5) That M/s Horizon Buildcon Pvt. Ltd had stated that the rates offered as per the MOU seems to be quite high & unreasonable and further discussion can be made after detailed market studies and as such the copy of draft MOU was left with the said company. 6) That we had further approached the company M/s Horizon Buildcon Pvt. Ltd. To get the deal bargained with them but they had out rightly denied and rejected our offer because rates quoted by us were at higher side in comparisons to the rates prevailing in area at that time. 7) The deal as per the said drafted MOU could not be finalized between us and as such the drafted MOU was not signed by us as well as by any one on behalf of said company. 8) That said drafted MOU in not a valid& enforceable....
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....P, Bank of India & OBC Bank. (Agri Limits). The copies of the statement/pass book of these bank accounts are enclosed here with for your kind consideration & records. The assessee further submitted that we are enclosing herewith the copy of the" Sale Deed" for Land at village Sultanwind (Pb) Being sold to other party by the same farmers or in dependent farmers, who had also sold the land to the Horizon BuildconPvt Ltd. On comparison of Prices of both sales deeds (i.e sales deed executed with M/s Horizon Buildcon Pvt. Ltd. and sales deeds executed with other party) your honour will appreciate the prices in the area have not increased substantially even after three years not being doubled in spite of fact that there was huge boom in real estate market during that period. Therefore, it is clearly proved & established on records that the Land was sold by the farmers to M/s Horizon Buildcon Pvt. Ltd. At the prices reflected in the sale deeds. From the above submission and justification it is also crystal clear that the Ikrarnamas/'Agreement to sale are false and fabricated documents wherein the price of the land @ Rs. 2310/- Per Sq. have been shown by the assessee ....
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....plains the hype in price calculation offered by the brokers. The assessee further placed reliance on the following judgments of the various Hon'ble Courts: - i) The Hon 'ble High Court of Rajasthan in the case of Commissioner of Income Tax vs. BHANWAR LAL MURWATIYA reported in (2008) 215 CTR (Raj) 489; ii) The Hon'ble Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarhin the case of l.T.O. vs. Shri Mohinder Singh reported in (2008) ITR 118 (ITAT, CM.); iii) The Hon'ble Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh in the case of l.T.O. vs. Shri Manjit Singh reported in (2010) 128 TTJ(Chd)(UO) 82; iv) The Hon'ble Madras High Court in the case of Sivakami Co.Pvt. Ltd. V. CIT(1973) 88 ITR 311 (Mad); v) The Hon 'ble High Court of Delhi in the case of Commissioner of Income Tax Vs. Dinesh Jain HUF reported in 254 CTR (Del) 534; vii) The Hon'ble High Court of Punjab& Haryana in the case of Commissioner of Income Tax Vs. Harpal Singh reported in (2008) 3 DTR 254; viii) The Hon 'ble Apex Court in the case of Commissioner of Income Ta....
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.... Officer to point out that the value of the land was below the market price. " 2.2 The explanation offered by the assessee has been considered sympathetically but the same found devoid of any merit. The plea of the assessee is not acceptable in view of the following facts of the case :- i) As per information available with this office, at the time of search operation conducted in the case of M/s Horizon Buildcon(P) Ltd. on 7.4.2011, a Memorandum of Understanding (MOU) dated 22/01/2008 found, which was executed between Sh. Surjit Singh and Baljinder Singh as 1st Party and M/s Horizon Buildcon (P) Ltd. As 2nd party. As per this MOU 1st party is the owner of land measuring 50000 Sq. Yrds. of land at village Sultanwind Distt. Amritsar and has undertaken to transfer the same to the 2nd party @ Rs. 2310/- per Sq. Yrds. Further, several other documents i.e. Ikrarnamas/agreement to sell executed with various persons/farmers, are in the possession of department which clearly indicates that Sh. Surjit Singh and Baljinder Singh had purchased land from various persons at Village Sultanwind Distt. Amritsar on agreement to sell or Power of Attorney in their name or their wives ....
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....gistration charges have to be borne by the purchaser, they obtained a power of attorney from the seller to save the registration charges, and after that further sold the land to third person on power of attorney and saved the registration expenses in addition to their regular profit. The same practice has been adopted in the instant case by the assessee. The contention of the assessee that these agreements to sell are imaginary has again feeble from the contents of these agreements to sell. "It is clearly mentioned in these agreements to sell "If the purchaser pull back, the advance given by him will be forfeited and if the seller will pull back, he has to pay double amount of advance and the purchaser has full right to get registry through Court. I being the sellers will be responsible for the fault in the ownership and the purchaser will have the fullest rights to make plots on the land, get the plans drawn on it, get the roads built-up on it and get the agreements written further or get the foundations of the plots completed up and wherever required up the signatures thereupon." The agreements to sell are written in Punjabi, the scanned copy of one of such agreement to sell whic....
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....cuments in which it is clearly written that if the seller pull back from the contents written in this agreement to sell, the purchaser has full right to get registry of land through Court. Who will give such type agreement to sell to a person who is not known to him or relative and transferred all the rights of his land to such unknown person. From the plain reading of these agreements to sell, it has been clear that these documents are legal document and not an imaginary or fake documents as claimed by the assessee and also clear that the assessee purchased land from various farmers/persons on these agreement to sell or Power of Attorney and later on transferred to M/s Horizon Builcon (P) Ltd. as POA. Moreover, how can anybody use his right over the land owned by one without any consideration. iii) During the course of assessment proceedings, the assessee was required to produce the farmers whom he has purchased land in question on agreement to sell. In response, on 22/3/2016, the assessee produced one farmer Sh. Rajinder Kumar s/o Sh. Sohan Lal Statement of Sh. Rajinder Kumar is recorded, which is reproduced as under:- Q. I What do you do? Ans. I am doi....
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....as. What do you say about this. Ans. This Ikrarnama does not belong to me and I did not put any signature on it. Q.15 What is your qualification and how many language you can read, write and understand. Ans. I am illiterate but I can sign in only Punjabi. I am totally unaware of English language, I cannot read write and understand English language. Sh. Rajinder Kumar slo Sh. Sohan Lal has also filed an affidavit in which he has given in writing that he has sold his land admeasuring I K2M to Mls Horizon Buildcon(P) Ltd. vide sale deed dated 11/12/2009. Now come to the contents of statement given by Sh. Rajinder Kumar and contents of Affidavit given by him. In reply to question No.S of his statement, he stated that I sold my land through SurjitSingh and whom he (Surjit Singh) sold I do not know. On the other hand, in affidavit at point No.1 he submitted that he (Raj inder Singh) sold his land admeasuring I K2M to Mls Horizon Buildcon(P) Ltd. vide sale deed dated 11/1212009. The affidavit was written on 21/3/2016 and statement was recorded on 22/3/2016. On 21/3/2016 it was in his knowledge whom he sold his land but on 22/3/2016 he forgotten....
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....ddress of your friend who met you Sh. Surjit Singh, he (Rajinder Singh) replied that my friends name is Nirmal Singh who belong to Sultanwind but his father name and residential address, I do not know. From the above, it is emerged out that Sh. Rajinder Kumar's means of livelihood is agricultural land and he was having only a piece of I Kanal 2Marlas of Agricultural land, which he has sold, as stated by him, through Sh. Surjit Singh on Power of Attorney and at the time of giving Power of Attorney he has not made any consideration or taken any amount, but he did not know Surjit Singh earlier i.e. before given Power of Attorney. Who got met him with Sh. Surjit Singh i.e. his friend namely Nirmal Singh of Sultanwind, he even did not know the address or even the father name of his friend, but on the instance of his friend and the assessee Sh.Surjit Singh he has given Power of Attorney of his only land which was the only wherewithal of his livelihood and transferred all rights of his land to Sh. Surjit Singh that also without any consideration. Is it possible - No, not at all. Actually, Sh. Surjit Singh purchased his land admeasuring I Kanal 2 Marlas on agreement t....
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....vince the company". The assessee himself admitted that they had prepared imaginary biyana/agreements to sell. But Sh. Rajinder Kumar the one of the owner of land in question, refused to prepare any such documents, which again feeble the claim of the assessee that the affidavit are imaginary and proved that the assessee has purchased the land in question from the farmers on agreement to sell or Power of Attorney after making full payment and then transferred the same land to M/s Horizon Buildcon(P) Ltd. as POA. The asssessee's Authorised Representative further asked to produce the remaining persons for their examination. He stated that the remaining persons will be produced on 23/3/2016. On 23/3/2016, the Authorized Representative of the assessee Sh. Daljeet Singh Marwaha CA attended and filed a letter which the reproduced below:- "It is submitted that we have tried to contact the farmers as per your let and have already submitted affidavits of the :- Mr. Parkash Singh slo Sh.Joginder Singh Mr. Baljit Singh slo Sh. Joginder Singh Mr. Gurpreet Singh slo Sh.Shamsher Singh Mr. Rajinder Singh slo Sh. Sohan Lal M....
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.... in the affidavit are without any documentary evidence and are self serving and cannot be held as acceptable. The Hon'ble Alllahabad High Court in the case of Sri Krishan Vs.CIT(AII.) 142 ITR 618 has held that Affidavit need not always be accepted as correct. It is neither a rule of prudence nor a rule of law that the statements made in an affidavit which remains uncontroverted, must invariably be accepted as true and reliable. Further on 28/3/2016, the assessee filed written reply claiming that the assessee is working as commission agent right from the beginning and have been declaring a commission of approximately 2.5% consistently in return of M/s B.S. Trading Company in which I am 50% partner. I have duly declared commission income from property consultancy after finishing of transaction with M/s Horizon Buildcon(P) Ltd. Copies of return enclosed. The submission given by the assessee has been considered but the same found sans merit. The assessee furnished return of income alongwith reply for the AY 2006-07 to 2011-12. On perusal of the computation of income, it is seen and clear that the assessee has not shown any commission income from property commission for the....
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....see failed to prove that the amount received by him from M/s Horizon Buildcon(P) Ltd. has been distributed the persons from whom he purchased land. So far as the payments made through cheques to farmers are concern, the assessee received an amount of Rs. 35 lacs from M/s Horizon Buildcon (P) Ltd through cheque on 23/3/2009, and further a sum of Rs. 22 lacs have been withdrawn on 26/3/09 but it is not mentioned or cleared that whom these payments have been given. As submitted by the assessee in his reply that he is doing the business of sale/purchase of property and commission agent, therefore, it cannot be said that the funds withdrawn were given to the persons whom he has purchased the land in question or withdrawn for his day to day business use. vi) Further, the documents found at the business premises of M/s Horizon Buildcom(P) Ltd. prepared with the title "Accounts of Sh. Surjit Singh" and according to this document total payments to Sh. Surjit Singh was made at Rs. 11,67,73,370/-. Documents mentioned as Page- 72 titled as 'Annexure' also mentioned that" Schedule of payments made against MOU dated 22.01.2008 between Sh. Surjit Singh s/o Sh. Harjinder Singh Vil....
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.... the question is that what was the need to prepare these documents by the company when no transactions have been made with the assessee. Hence, these documents also established that the assessee has taken land from various farmers/persons on agreement to sell/biyana or POA and then transferred the same land to the company as POA. vii) The facts of the case law quoted by the assessee have also been taken into consideration but found that facts of the cases quoted by the assessee are not identical to the facts of the case of assessee. The case law quoted by the assessee are in respect of difference in rate of land as per sale deed and rate of land mentioned in seized documents and there is no relevancy of these case laws in respect of assessee's case. In the case of the assessee, the agreement to sell/biyana made between assessee S. Surjit Singh, S. Baljinder Singh and the various persons/farmers who were actual owner of the land, were clearly proved that the land was actually purchased by the assessee S. Surjit Singh and Balinder Singh from its actual owners on agreement to sell/Ikrarnamas after making full payments because these agreements/biyanas were written in full ....
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.... assessee during the year under consideration sold land measuring 17550 Sqyrds (35Kanals 2 Marlas) to Mls Horizon Buildcon(P) Ltd. @ Rs. 2310/- per Sq.Yards as per MOU dated 22.1.2008, for an amount of Rs. 4,05,40,500/-. On going through the records, it has been noticed that the assessee has sold, total land measuring 27Kanal 2Marlas and out of balance 7K 19 Marlas sold by Sh.Baljinder Singh as POA and balance by the farmers directly. The land measuring 27K 2 M (13550 Sqyrds) sold has been purchased by the assessee for an amount of Rs. 2,27,10,500/- and further sold to the company @ 2310/- per Squrds for a consideration of Rs. 3,13,00,500/- as per below details:- Date of purchase Khasra No. Total Area Rate per Sqrds Total Date of sale/ @ Rs. 2310/-per Sqyrds. Total 7.4.2008 4415, 4436, 4418 10K IM 5025 Sqyrds 1200/- 60,30,000/- 27/5/2008 1,16,07,750/- 7.3.2008 4416,4417 4K IM 2025 Sqyrds 3920/- 79,38,000/- 2/3/2009 46,77,750/- 27.11.2008 4418,4427 3K17M 1925 Sqyrds 1200/- 23,10,000/- 2/3/2009 44,46,750/- 27.11.2008 4428, 4430 5K13M 2825 Sqyrds 1100/- 31,07,500/- 2/3/2009 65,25,7....
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....ssessee relying on its own order for the A.Y.2008-2009 and the observations made therein are as under :- 6. I have considered the assessment order, the grounds of appeal and written submissions of the appellant and the grounds of appeal are disposed off as under:- (i) The ground of appeal no. 1 and 2 are against the addition of Rs. 79,50,000/- on account of suspected investment in purchases of land from undisclosed sources. During the course of assessment proceedings the assessee filed details of bank accounts maintained by him. As per information available with the AO, the assessee along with Shri Surjit Singh had purchased the following lands at village Sultanwind from the persons mentioned below for a total =^v, amount of Rs. 1,93,45,000/- Name of seller Total area Rate per sq yards Total amount paid for purchase Date of purchase Date of sale Rajwinder Kaur 5 K 6M=2650 yrds 3000/- 79,50,000/- 07/03/08 FY 07-08 2-3-09 FY 08-09 Pargat Singh & Jagir Singh 5K=2500 sq yrds 3290/- 98,00,000/- 07-03-08 (07-08) 2-3-09 (08-09) 10-12-10 (10-11) Rajvinder Kaur 1K 2M=550 yrds 2900/- 15,95,000/- 1....
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....oth the parties ie seller and purchaser. The khasra numbers mentioned on these agreements were the same as mentioned on the MOU dated 22-01-2008. When the assessee was confronted with these agreements he stated that these were imaginary biyana/agreements to sell in their names from different land owners to convince the company about their capacity to consolidate the land and in order to justify high prices of land. This plea of the assessee Vuwas held by the AO to be totally undependable as the biyana/agreement to sell/ ikrarnamas were written ip letter and spirit. The AO held that had the ikrarnama/agreement to sell been pseudo/fabricated, the name of the owners of land would not have happened to be the same. Therefore the AO held that apparently the ikrarnama/ agreement to sell are actually in the name of the owners of land are not imaginary. That no land' owner can prepare a fake agreement to sell/biyana on a stamp paper to convince any builder for high prices. The contention taken by the assessee is therefore an after though. The AO stated that actually, it is a common practice in the field of real estate that the dealer / broker purchased the land from th....
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....rejected the power of attorneys because the same was given without money consideration and only because of good faith for the reason that while preparing the power of attorney, it is mandatory to mention/write lines that no money consideration has been done in lieu of this power of attorney. The AO did not believe that power of attorney was done without consideration and held that the assessee had purchased land from the actual owners of land after making full payments on agreements/biyanas and on power of attorney and thereafter transferred the same land to M/s Horizon Buildcon (P) Ltd. The AO also verified the bank account of the assessee and found huge cash transactions. The AO held that the assessee had failed to prove that he had not made any transactions with M/s Horizon Buildcon Pvt Ltd and had not distributed to the persons from whom he purchased the lands. The observed that document no. 72 titled "Annexure" also mentioned the schedule of payments made against MOU dated 22-01-2008 between Shri Surjit Singh and Shri Baljinder Singh with M/s Horizon Buildcon (P) Ltd. As per this "Annexure" M/s Horizon Buildcon (P) Ltd again made payment of Rs. 1.5 Crore to c....
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....ation is decided in his favour and the addition of Rs. 79,50,000/- on account of his unaccounted investment in purchase of land , from his wife Smt. Rajwinder Kaur and various persons on agreement to sell or power of attorney, which was later on transferred /sold to company M/s Horizon Buildcon Pvt Ltd as POA on basis of MOU, is deleted. (iii) The ground of appeal no. 3 is against the addition of Rs. 19 Lacs on account of investment in .property from money received from his brother through normal banking channels. As per the assessment order the assessee had made total investment of Rs. 23,00,000/- during the! year as mentioned in the assessment order. The source of; the investment was claimed out of sale proceeds of agriculture produce and out of money received from his brother residing abroad. During the year under consideration the assessee had disclosed agriculture income of Rs. 402,864/- whose credit was given by the AO to the extent of Rs. 4 Lacs. Since the assessee had not filed documentary evidence of receipts from his brother who lives abroad, the AO added back Rs. 19. Lacs as income from undisclosed sources u/s 69 of the Act. In the written submissions the appell....
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....N- The facts of the case under appeal are the same as in the case of the appellant for AY 2008-09. The appeal of the appellant against the assessment order dated 28-03-2016 in its case for AY 2008- 09 has been decided by the undersigned vide order dated 31-05-2016 in appeal no. 283/ 15-16. Therefore following the said appellate order dated 31-05-2016 in appeal no. 283/ 15-16 in the case of the appellant for A Y 2008-09, the appeal of the assessee on the issue under consideration is decided in his favour and the addition of Rs. 10,831,75,750/- as his unaccounted investment in purchase of land from various persons on agreement to sell or power of attorney, which was later on transferred to company M/s Horizon Buildcon Pvt Ltd as POA, is deleted. The ground of appeal no. 2 is addition of Rs. 85,90,000/- on account of suspected short term capital gain from sale of property. As per assessment order, the assessee had sold land measuring 17550/- sq yards (35K 2M) to M/s Horizon Buildcon Pvt Ltd @Rs. 2310/- per sq yards as per MOU dated 21-01-2008 for an amount of Rs. 405,40,500/-. On going through the records the AO noticed that the assessee had sold to....
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..../- Sq yards of land (11 Acres) at Vill. Sultanwind, Amritsar. During the course of search action at office of the assessee one document was found and seized as per Annexure DNB-1, A-2, Pages 26-30 (Now marked as Annexure -A). This document is a unsigned copy of a memorandum of Understanding (MOU) dated 22-01- 2008 between Sh. Surjit Singh S/o Sh. Harjinder Singh and Baljinder Singh S/o Sh. Natha Singh as 1st Party and M/s. Horizon Buildcon P Ltd. as 2nd party. 2. As per this MOU, the 1st party is the owner of a land measuring 50,000/- Sq Yards at Sultanwind, Amritsar and has undertaken to transfer the same to the second party @ Rs. 2310/- per Sq. Yard. The total sale consideration worked out to Rs. 11.55 Crores. As per the same document, first part has received a sum of Rs. 1,75,00,000/- as advance being 15% of the total amount of consideration. The rest of the amount is to be paid with 10 months and in the meanwhile 2nd party can submit and obtain necessary sanction from the statuary authorities for the building of their project on this land. 3. The amount of advance paid by the second party has also been evidenced by another document found and seized as....
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....residence of the assessee several payments in the name of Sh. Surjit Singh have been noted. 9. As per certain documents found and seized during search as DNB-1, A-1 & A-2 which are copies of various agreements to sell, as per which Sh. Surjit Singh and Sh. Baljinder Singh have purchased the land from various persons in their own name or in the name of their wives, Amarjit Kaur and Rajwinder kaur. The details of these agreements to sell were part of assessment order as Annexure-A (now marked as Annexure -H). 10. Assessee has finally shown to have purchased the above land (as per registration deeds seized as DNB-1, A-9 and A-10), from Surjit Singh and baljinder Singh or their wives as power of attorney holder. The khasra numbers are same as mentioned in the agreements to sell as per above para but the rates as per these registration deeds are much lower than the rate as per the MOU dated 22-01-2008 or the rates as per the agreements to sell as mentioned in above para (now marked as annexure-I). 11. Thus relying upon the above documents and the facts emanating from them, the AO was of the opinion that assessee has purchased the entire land for Rs. 1....
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....epare, submit and obtain sanctions of the plan, change of land use, license for construction of the project from statutory authorities in its own name. Nowhere in the MOU, such liability has been dwelled upon the brokers. Moreover, no evidence was produced by the assessee that any CLU was applied by the brokers from PUDA on behalf of the assessee company. 14.2 Assessee further claimed before CIT(A) that the agreements to sell relied upon by the AO were unregistered ikraar naamas and were generally manipulated by the brokers to justify the higher prices quoted by them. It was further claimed that these rate as per three of the agreements to sell were so inflated that they were even higher than the rate quoted in the MOU. However, it is quite logical that when such a large chunk of land has to be purchased, certain pieces of land are bought at unpleasant prices which are quite higher than the rest of the land. This is sometimes due the location of the land and at times because of the fact that the sellers have realized that the buyers cannot afford not to purchase their land for want of continuity of the larger piece of land. Thus this puts them into a better bargaining posi....
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.... such ikraar namas, the assessee decided not to sign the MOU. It was alleged by the assessee and agreed upon by the CIT(A) that these Ikraarnamas were prepared in such a haste that three of them pertaining to 34 Kanals of land out of 103 kanals have quoted prices much higher than the price quoted in the MOU. Thus CIT(A) has rejected the ikraar namas as valid support in favour of the AO. 15.5 Finaly CIT has referred to certain judgments in order to hold that the addition made by the AO cannot sustain on the mere presumption that consideration of Rs. 11.55 Cr has been paid by the assessee. Hence he deleted the entire addition of Rs. 9,37,33,930/- spread over A. Y. 2009-10 to 2011-12. 16. The Ld.CIT(A), has erred in holding that the documents found at the time of search do no establish the payment of unaccounted money for the purchase of land and these are not admissible as evidence. While holding so, following facts have been ignored which clearly establish that the documents relied upon by the AO during the course of assessment proceedings corroborate with each other to show that unaccounted money has been transferred to Sh. Surjit singh in lieu of purchase of land....
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....fixed as per 1st MOU. iii. CIT(A) has also ignored document DNB-1, A-9, Page-45 (Now marked as Annexure-D) on which details of all the Khasra No. has been recorded alngwith details of area of land in Kanals and marlas / Sq yards against each Khasra. It is also recorded that it is a corrected schedule as per mutual discussion in continuation of MOU dated 22-01- 2008. The aggregate Sq. yards as per this documents are 50075 which is as per the terms of MOU. Hence it is not acceptable that there has been no efforts to execute the MOU and it was rejected by the parties for exorbitant rates quoted by the broker and also for want of CLU from PUDA. iv. In fact the 2nd MOU dated 18-03-2008 DNB-1, A-1, P-133-138 (Now marked as Annexure-E) is the testimony to the fact that the agreement between the two parties has been executed. This document clearly records that the term and condition of the 1st MOU have been complied with and that now the first party shall transfer the land described in that document to the second party. In fact, the land purchased by the assessee through the registration deeds as per A-9 & A-10 DNB-1 (Now Marked as Annexure-I) has actually been procured t....
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.... (@) In fact this payment has been made to various parties through cheques for Rs. 1.50 Crores plus Rs. 25 lakhs in cash as per Now Annexure -B. There is no clause for obtaining CLU in the 1st and 2nd MOU. ($) Includes Rs. 7.5 lakhs on account of surrender made by Sh. Naresh Sabharwal Director in the A. Y. 2012-13, inspite of the fact that payments have been shown to have been made in the F. Y. 2009-10. Ld CIT(A) has agreed to the contentions of the assessee, relying upon the above chart and the accompanying reply, that most of the payments/ expenses above are made through cheques and are entered in books of accounts. CIT(A) has held in view of the same that this document does not help the case of the AO that assessee has not paid any amount other than amounts as per registration deeds of land. However, following has not been considered by the Ld. CIT(A):- a. The amount of Rs. 2,76,11,856/- as per Col. 2 above and Rs. 1,75,00,000/- as per Col.3 above has been claimed to be given to Sh. Surjit Singh as advance for arranging CLU from PUDA for commercial use of the land. It has also been alleged that since Sh. Surjit Singh has not been able to obtain CLU, that was....
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....hare application money during the F. Y. 2011-12 as unexplained payment. The mere fact that unexplained payments were made to Sh. Surjit Singh is a clear evidence that excess money has been paid to the brokers for purchase of land and that the unsigned MOU is not merely a rejected piece of document without any evidentiary importance. Further assessee has claimed that since the amount of Rs. 2,42,50,000/- has been put to taxation with the surrender, it cannot be added during assessment. This argument of the assessee has also been accepted by the Ld. CIT(A), however, he has missed the point that a payment made during the F. Y. 2010-11 cannot be surrendered for the F. Y. 2011-12 relevant to A. Y. 2012-13. Therefore, it cannot be considered that these payments have been put to taxation by the assessee. Further all the registration deeds have been registered in the F. Y. 2008- 09 and 2009-10, therefore how can it be accepted that an advance for CLU will be paid in the F. Y. 2010-11 and still further that how can a MOU be rejected in January to March 2008 for want of CLU when the advance is still being paid in the F. Y. 2010-11. These fact clearly show that the entire is....
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....f annexure B to assessment order). As per the rate of land mentioned in these two deeds total payment to these three persons should be Rs. 27,00,000/- (6000 X450 = 27,00,000), whereas they have been paid around Rs. 1,31,00,000/- plus cash out of Rs. 25 lakhs as per DNB-1, A-2, Page -72 (Now marked as Annexure-B), which is quite as per the rate of Rs. 2310/- per Sq yards as per MOU ( 6000 X 2310 = 1,38,00,000). Although this amount has been recorded in books of accounts and has been paid through banking channels but it does not negate the fact that amount in excess of the amounts as per registration deeds of land has been paid by the assessee company, thereby lending credence to the evidentiary status of the unsigned MOU. e. As regards payment of Rs. 1,40,44,400/- in Col No. 6 above, shown to have been paid to S. S. Steel as advance against land at Asr, assessee has not explained as to why advance to S. S. Steel has been paid as advance against purchase of land. It has no where been explained that who is the owner of S. S. Steel and how is he related to the land deal and on what account this advance has been paid. Prima facie it also appears to be an afterthought t....
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....e quoted in the MOU. However, it is quite logical that when such a large chunk of land has to be purchased, certain pieces of land are bought at unpleasant prices which are quite higher than the rest of the land. This is sometimes due the location of the land and at times because of the fact that the sellers have realized that the buyers can't afford not to purchase their land for want of continuity of the larger piece of land. Thus this puts them into a better bargaining position. Even assessee has also purchased 17 Marlas of land at a rate which is almost three times the rate of rest of the land (Registration deed at Sr. No. 5 of the Annexure B to the assessment order). vii. As per documents DNB-1 A-9 (Now marked as Annexure -I), which are copies of registered sale deeds, assessee has purchased same land from the same owners through Sh. Surjit Singh or his family members as Power of Attorneys land holders. The Khasra Nos. mentioned in the registration deeds are the same as in the agreements to sell as per A-1 & A-2, DNB-1(Now marked as Annexure -H), at the rates which are much lower than the rates mentioned on the agreements. The complete details of these purcha....
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.... de facto transfer of any immovable property. He has also did not the rebutted the findings recorded by the Assessing Officer. 15. After considering the submissions of ld. DR and perusing the material available on record, we find that the AO during the course of assessment noted that the documents found at the business premises of M/s Horizon Buildcon(P) Ltd. prepared with the title "Accounts of Sh. Surjit Singh" and according to this document total payments to Sh. Surjit Singh was made at Rs. 11,67,73,370/-. Documents mentioned as Page-72 titled as 'Annexure' also mentioned that" Schedule of payments made against MOU dated 22.01.2008 between Sh. Surjit Singh s/o Sh. Harjinder Singh Village Bhakaha Hari Singh Tehsil Ajanala, Amritsar, S. Baljinder Singh s/o Sh. Natha Singh Village Ramana Chakk Amritsar and M/s Horizon Buildcon (P) Ltd. For the clarity we would like to reproduce the contents of Annexure mentioned at page 72 which reads as under :- ANNEXURE Schedule of payments made against MOU dated 21st January 2008 between Sh Surjit Singh s/o S.Harjinder Singh r/o village Bhakha Hari Singh, Tehsil Ajnala, Amritsar, S.Baljinder Singh S/o S Natha Singh R/o villag....
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....ht in the eyes of the law, is not acceptable, due to the reasons that on the basis of this MOU dated 22/01/2008 the assessee further executed an Agreement Deed between the assessee and the company M/s Horizon Buildcon (P) Ltd., which has signed by both the parties, in which the company has taken congnizance of this MOU dated 22/01/2008. Hence, it cannot be said that the unsigned MOU has no weight in the eyes of law when the purchaser and seller has taken congnizance of this MOU in their further transaction. Further, the other documents i.e. 'Account of Sh.Surjit Singh and Schedule of payment', are the documents of unaccounted transactions made between assessee and the company, which prepared only for remembering purpose and due to that reason, these documents had not been signed by any other party. The contention of the assessee that these unsigned documents have no weigh in the eyes of law is not acceptable in view of this factual position. 17. We also observed from the order of the Assessing Officer at para No.2.3 in which the submissions of the assessee have been incorporated by the Assessing Officer, which reads as under :- "I would like to bring to your kin....
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.... and deposited on chq.no.95702.95703 & 2. 10/02/09 DOC jasbir Singh. 4427 23.3.09 in SB a/c 95704for Rs. 7.50 lacs 2815 iii)Praksh Singh & 4428, with Syndicate bank Rs. 6.50 lacs and 314/01/09 DOC Baljit Singh & 4430. and Rs. 8.00 lacs from SB 2496 GurpreetSingh 4431 2)cash received a/cwith Syndicate 4.24.12.08 ivjPargat Singh & Jagir Singh (Through Manjit Singh & Sawaraj Singh GPA through Surjit Singh SPA v) Manjit singh Rs. 32500/- Bank and balance Rs. 16.26 lacs refunded to the farmers in cash being withdrawals from SB a/cand payments received in cash at the time of registry DOC2282 5.24.02.09 DOC 2971 11.12.09 i) Harbans Kaur 4417.4 20K- 46.00 Lacs Rs. 50.00 Lacs Amount refunded to the farmers out of cash withdrawal from my saving bank account i) 14/07/09/DOC3 33 & I6/11/09/DOC2 725 ii) 14/07/09/DOC 1239 iii) 12/11/09 DOC 2700 iv) 24/12/08 DOC 2282 v) 23/05/08 DOC 149 it) Manjeet Kaur 222.44 ....
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....iness premises of M/s Horizon Builcon (P) Ltd. Further the AO has rightly placed reliance on the judgement of the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More (1971 82 ITR 540(SC) wherein it has been held that where a partly relies of self serving recitals in a documents it is for that party to establish the truth of these recitals. The tax authorities are entitled to look into the surrounding circumstances are discussed hereinafter. Moreover, the question is that what was the need to prepare these documents by the company when no transactions have been made with the assessee. Hence, these documents also established that the assessee has taken land from various farmers/persons on agreement to sell/biyana or POA and then transferred the same land to the company as POA. We found strong substance on the submissions of ld. DR that there was a transfer in the name of the assessee as per Section 2(47) and Section 47 of the Act. We are also in agreement with the decisions relied on by the ld. DR in the case of Balbir Singh Maini(supra), wherein the Hon'ble Supreme Court observed that the form and substance of the provisions pertaining to section 47 of the Registra....
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....The pronouncement may be in any of the following manners: - (a) The Bench may pronounce the order immediately upon the conclusion of hearing. (b) in case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date of pronouncement. (c) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. As such, "ordinarily", the order on an appeal should be pronounced by the Bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression "ordinarily" has been used in the said rule itself. This rule was inserted as a result of directions of Hon'ble High Court in the case of Shivsaga....
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....t of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also afew more days prior to, and after, the lockdown by observing that "In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown". Hon'ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, "It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June2020". It has been an unprecedented situation not only in India but all over the world. Government of India has, vide noti....