TaxTMI 
TaxTMI 
2020 (10) TMI 706
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....he 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, Ludhiana in his order dated 12.08.2014 in Appeal No. 1/ROL/IL/ ....
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.... 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 the grounds of appeal on or before is heard and disposed off. 5. It is prayed that the order of the Commissioner of Income ....
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....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.Y.2009-2010 in ITA No.434/ASR/2014 and the facts and grounds mentioned therein are taken into consideration to decide all the four appeals. 8. Brief facts of the case are that the case of the assessee was re....
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....unt 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/- 15/12/2008 (2008-09) 6. Parkash Singh & Baljit Singh 4418, 4419,4427,4428, 4430, 4432, 4436, 4437, 5506/4425 24K 5M = 12125 Sqyrds 2900/- 3,51,62,500/- 7/4/2008 (2008- 09) 7. Manjit Kaur 4415, 4419, 4427, 4428, 4430, 4432, 4436, 4437, 5506/4425 20K 9M= 10225 Sqyrds 2100/- 2,14,72,500/- 15/12/2008 (2008....
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.... 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 date are enclosed here with for your kind consideration & record. The terms & condition of the Power of Attorney clearly stipulate that neither any money nor any rights/title to land or possession of land has been exchanged, between parties (i.e. between owners/farmers and Surjit Singh POA holders). It is clearly proved & evidenced that the farmers have not sold any land to me & they had given POA to me only to represent them and as such the que....
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....ir 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 Extension New Delhi as per MOU executed on 22.01.2008. Also furnish the copy of the asreement/MOU executed by you with the said company: I wish to state and submit that I had not sold any land to Ms Horizon Buildcon (P) Ltd. 8/11. Jangpura Extension New Delhi during the previous year relevant year assessment year 2009-10 on the basis of so called MOU dated 22.01.2008. As such this question is not relevant to me. In this connection, I would like to bring your kind notices that I Surjit Singh and Sh. Baljinder Singh were doing the property dealing activities as broker for agriculture and commercial land on commission basis. As pe....
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....r 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 document as per the law. 9) That we had not received any money from M/s. Horizon Buildcon Pvt. Ltd on the basis of said drafted MOU. 1 solemnly verify that the facts stated above are true and nothing material has been concealed. DEPONENT VERIFICATOIN I SardarSurjit Singh the above named deponent, to hereby verify on oath that the contents of the affidavit above are true to my personal knowledge and nothing material has been concealed or falsely stated. DEPONENT Sir, from the above it becomes amply clear that the draft MOU was never executed and is not a valid document enforceable by law. A copy of the sworn affidavit is enclosed. Regarding land at village Sutanwind, 1 would like to submit that a....
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....d 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 with an intention to mislead the M/s Horizon Buildcon Pvt. Ltd. For putting the proposal of sale of land at higher prices and earned more & more profit from the deal. However, the assessee could not succeed in his target to make the deal with M/s Horizon Buildcon (P) Ltd. on the basis of the falls and fabricated Ikrarnamas/Agreement to sale being prepared by him because the director of the said company are quite intelligent and having the wide knowledge & huge exposure of the real estate sector. We are also enclosing herewith the Khasra Map showing the location and rate shown in the false & fabricated Ikrarnama/Agreement. It is common knowledge that where the Khasra are undivided the rates for the same khasra are comparable and/or equal. However, in the false and fabricated Ikrarnama/Agreement to sale the rates have been taken t....
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....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 Tax vs. P. V.Kalyanasundaram reported in (2007) CTR (SC) 97; The assessee further submitted and placed reliance on the following judgements: -A "Suspicion however great cannot take the place of evidence." Honorable SC in Umacharan 37 ITR 271 applied by P&HHC in AnupamKapoor 299 ITR 179. In this case it was held by honorable Supreme court that "There are many surmises and conjectures, and the conclusion is the result of suspicion which cannot take the place of proof in these matters. " B. "That the Additions cannot be made merely on the basis of conjectures and surmises." K.R Varghese v. ITO 131 ITR 597 (SC) C. "That the Burden to prove apparent is not real on the revenue." Sc in 125 ITR 713-Kishanchand Chellaram; it was held the amount cannot be assessed as undisclosed income of assesee in the absence of positive material brought by Revenue to prove that the amount in fact belonged to assessee as the burden lay on the Revenu....
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.... 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 and later on transferred the same land to Mls Horizon Buildcon (P) Ltd. as POA of the original land owners. ii) Further, several agreements (lkrarnama) were were executed between the assessee Sh. Surjit Singh & Sh. Baljinder Singh and the below mentioned persons a) Dilbhag Singh & Hira Singh R/o Village Sultanwind Amritsar. b) Fakir Singh s/o Sh. Tarlok Singh R/o Village Sultanwind Amritsar. c) Srnt. Harbans Kaur wlo Sh. Subheg Singh/o Village Sultanwind Amritsar. d) Sh. Satpal Swarn, Amarjit Prithpal, Gurmeet, Kewal Singh s/o Sh. Bahadur Singh R/oVillage Sultanwind Amritsar e) Sh. Balbir, Jasbir & Ranjit Singh s/o Sh. Gurmej Singh R/o Basant Nagar Sultanwind Road, Amritsar. f) Sh. Parkash Singh & Baljit Singh s/o Sh. Joginder Singh and Sh. Gurpartap Singh R/o Village Sultanwind Amritsar. g) Smt. Manjit Kaur wlo Sh. Gurmail Singh R/o Village Sultanwind Amritsar. As per agreements (lkrarnama), the assessee purchased land from these above said persons during the year ....
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.... signatures thereupon." The agreements to sell are written in Punjabi, the scanned copy of one of such agreement to sell which has been executed between Smt. Harbans Kaur and Sh. Surjit Singh & others is being reproduced herebelow.- Agreement to sell incorporated by the AO in pages 9 & 10 written in Punjabi language are not readable. The agreement to sell or Ikrarnamas were written in Punjabi. The subject of page No.2 of this agreement to sell, which have been underlined in the agreement to sell is being translated into English below:- "Out of total sale consideration, I received a sum of Rs. 24,00,000/- as advance in the presence of witnesses at the time writing of this agreement to sell and the balance amount will be taken at the time of Registry and right of land (Kabza) has been given to the purchasers at the time of writing to this instrument but the ownership will be given at the time of registry. The balance amount will be taker at the time of final Registry and registry will be made in the name of purchaser or in the name of any person whom the purchasers will want. If the seller will pull back, she will be responsible to return the advance alongwith penalty equal to ....
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....which is reproduced as under:- Q. I What do you do? Ans. I am doing agricultural activities by taking land on lease. Q.2 Are you filing your ITR Ans. No Q.3 How much' agricultural land being cultivated by you by taking on lease. Ans. I am cultivating two acres of land by taking on lease @ Rs. 35000/- per acres. Q4 Do you have your own land or it was in you possession now or earlier. Ans. At present I have no my own agricultural land. Earlier I was having agricultural land measuring I Kanal 2 Marlas, which have been sold by me. Q.5. To whom you have sold your agricultural land meas in Kanal 2 Marlas Ans. I sold my agrcultrualland through Surjit Singh. Whom he (Surjit Singh) sold, I do know. I have taken all sale consideration from Sh. Surjit Singh. Q.6 By which mode you have received payment from Sh.Surjit Singh against sale of land. Ans. I took payment in cash and total payment against sale of land was received by me amounting to Rs. 2,48,000/-. Q.7. Have you entered into any agreement for the said payment received by you. Ans. No, no any written agreement executed but I had given Power of Attorney without any money consideration. Q.8 When you rece....
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....nnot read, write and understand English. Even before recorded his statement, he was asked in which language you want to record your statement and he stated that I can understand only Punjabi and my statement should be recorded in Punjabi. The person, who knows only Punjabi language and who refused to record his statement in English or even in Hindi language, given an affidavit which has totally been written in English. From this, it is proved that he did know anything about the contents of affidavit, in which he claimed that land has been sold to Mls Horizon Buildcon (P) Ltd. Actually he sold his land to S. Surjit Singh on agreement to sell after taking full payment and given him Power of Attorney, further he is totally unaware whom S. Surjit Singn sold his land because he has already sold his land to Surjit Singh on agreement to sell and took entire consideration. Second, in reply to question No. I, he (Raj inder Kumar) stated that I am doing agricultural activities by taking land on lease and in reply to question NoA, stated that at present I have no my own agricultural land, earlier I was having agricultural land admeasuring I Kanal 2Marlas, which I have sold. Means that the....
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....do not know before giving Power of Attoney and transferred all rights of his only land, which is the only means of his livelihood, even the right has been given through this agreement to sell that if the seller pull back, the purchaser has right to get registry of land through Court. The instrument written in such proper and legal language can never be said an imaginary or fake instrument. Third, when as per question No. 13, he was asked to tell the rate of land at which he sold his land. Sh. Rajinder Kumar replied, he do not know about rate and rate was not settled. The reply again raised question that how it is possible that a person is being sold his property and do not know at which rate. In human probability it is not possible. When anyone make any kind of transaction, first he settle rate of the subject, but in this case, seller has no knowledge about rate and in his wording no rate was settled, which is not believable in human probability that how a transaction get mature without finalizing the rate. Forth, Vide question No.14, Sh. Rajinder Kumar was confronted with the agreement to sell dated 15/3/2008 executed between Sh. Rajinder Kumar and Sh. Surji Singh as well Sh. ....
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.... as such she cannot come to our office. After local enquiries, it has come to our notice that Sh.Balbir Singh has died and other two brothers have moved to other places. However, we shall be still truing our level best to contact some more farmers and bring for the physical attendance." On the request of Counsel of the assessee, the case adjourned to 28/02/2016 and it has been cleared vide order sheet entry dated 23/3/2016 that since the assessment in this case is barred by time on 31/3/2016, this is the final opportunity and no further adjournment will be granted and in case of non attendance and non-filing of reply and non-producing of the persons the amount of Rs. 10,92,76,250/- invested in purchase of land from various persons will be added in your taxable income treating the same your income from undisclosed sources. On 28/3/2016, Sh. Daljit Marwaha CA attended alongwith Sh.Pardeep Gandotra CA and filed certain document regarding payments made by M/s Horizon Buildcon (P) Ltd. to various persons, map of land sold by Sh. Surjit Singh to M/s Horizon Buildcom(P) Ltd. and copy of Remand Report sent by DCIT(CC), Jammu to CIT(A)(C), Ludhiana. On going through the documents filed,....
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.... of this alleged transaction. Moreover, it cannot be said that a person who is doing the business of commission agent as property dealer, cannot make any investment in purchase of property. Therefore, the submission of the assessee that he is showing income from property consultancy has no relevancy in respect of investment made by him in purchase of property from various persons on agreement to sell/biayana. iv) The copies of Power of Attorneys furnished by the asses se, which have been obtained from all sellers of the land, wherein they have mentioned that they have given the power of attorney to the assessee only because of faith on him without any money consideration, is also not having any weight and the same is an afterthought. This fact also established from the statement of Sh. Rajinder Kumar s/o Sh. Sohan Lal recorded on 22/3/2016. No any person can give the power of attorney and transferred all rights to an unknown person without any consideration, to sell his property or land, when the assessee neither the relative of the sellers nor family members. Furthermore, while preparing a Power of Attorney, it is mandatory to mention/write these lines that no money consideratio....
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....et entry dated 8/3/2016, the assessee in reply submitted that these are unsigned documents and therefore, does not have any value in the eyes of law. The plea given by the assessee is not acceptable being entirely baseless and cannot be relied upon. The claim of the assessee that the MOU dated 22/01/2008 is not signed and have no weight in the eyes of the law, is not acceptable, due to the reasons that on the basis of this MOU dated 22/1/2008 the assessee further executed an Agreement Deed between the assessee and the company M/s Horizon Buildcom(P) Ltd., which has signed by both the parties, in which the company has taken congnizance of this MOU dated 22/1/2008. 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 unsig....
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....on Buildcon(P) Ltd, the issue of addition was difference in sale rate of land as per MOU and as per Registration Deed. Therefore, there is no relevancy of the case of M/s Horizon Buildcon (P) Ltd with the case of the assessee. Accordingly, the AO framed the assessment after observing as under :- 2.3. In view of the above facts and circumstances of the case, it is clearly established that the assessee has purchased land from various persons/farmers on agreement/ikrarnama or Power of Attorney in his name and later transferred the same land to M/s Horizon Buildcon(P) Ltd as POA of the original owners. The Khasra numbers mentioned in the registration deeds are the same as in the agreements to sell. However, on going through the record, it is noticed that out of total land of 61900 Sqyrds purchased by the assessee during the year under consideration, land measuring 200Sqyrds is in the name of Smt. Amarjeet Kaur who is the wife of the assessee value of which are at Rs. 2,63,000/- @ 1315 per Sqrds and further land measuring 425 Sqyrds rate of which is Rs. 15001- per Sqyrds, total value Rs. 6,37,500/- belongs to Sh. Ranjit Singh and Sh.Ranjit Singh had sold the said land directly to t....
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....ere is no question of short term capital gain. Since, as discussed in para-2 above in detail, the assessee purchased the land during the year under consideration and earlier year out of which he had sold land measuring 27 Kanals 2 Marks i.e. 13550 Sqyrds. During the year under consideration, on which he has earned short term capital gain of Rs. 85,90,000/-, which he had not shown for taxation purposes. Hence, the amount of Rs. 85,90,000/-, is added to the income of the assessee as short term capital gain. I am satisfied that the assessee has concealed true particulars of his income to the tune of Rs. 1,20,61,750/-, therefore, penalty proceedings u/s 271 (1)( c ) of the Income Tax Act, 1961 for concealment of income is being initiated separately. With these observations, total income of the assessee is computed as under:- Returned income as filed in response to notice us/ 148 1,59,540/- Add: As discussed above in para-2 10,83,75,750/- As discussed above in para-3 85,90,000/- Total taxable income 11,71,25,290/- Agricultural income for rate purposes 4,82,000/- Tax on assessed income 3,51,87,187/- Surcharge @ 10% 35,18,719/- 3,87,05,906/- Education ....
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.... per information available with the AO, at the time of search operation conducted in the case of M/s Horizon Buildcon (P) Ltd on 07-04-2011, a memorandum of understanding (MOU) dated 22-01-2008 was found which was executed between Shri Surjit Singh and Shri Baljinder Singh as first party and M/s Horizon Buildcon (P) Ltd as 2nd party. As per this MOU the first party is the owner of land measuring 50,000 sq.yrds of land in village Sultanwind, District Amritsar and had undertaken to transfer the same to the second party @ Rs. 2310 per Sq. yrds. Further .several other documents such us Ikramamas/agreements to sell executed with various persons/ farmers, are in the possession of the department winch clearly indicates that Shri Surjit Singh and Shri Baljinder Singh had purchased land from various persons at Village Sultan wind, Amritsar on agreement to sell or power of attorney in their name or their wives and later on transferred the same land to M/s Horizon Buildcon (P) Ltd as POA of the original land owners. (ii) That several agreements to sell (Ikrarnama) were executed between the assessee Shri Surjit Singh and Shri Baljinder Singh and the persons mentioned below:- (a) Smt. Rajwind....
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....e 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 return further or get the foundations of the plots completed up and wherever required up the signatures thereupon". Therefore the AO observed that it is amply clear that the agreements to sell/ikrarnamas were written properly after taking into consideration all the legal aspects. All the rights of the land had been transferred to the purchaser through these agreements to sell. The agreements to sell have properly being signed by both the parties alongwith witnesses. From the wording of the biyana / agreement to sell it is prima facie clear that the agreement to sell cannot be said to be an imaginary and fake document as claimed by the assessee in his reply but is the legal document in which it is clearly written that if the seller pull back from the contents written in this agreement to sell, t....
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....land was actually purchased by the assessee from actual owners or power of attorney after making full payments. The AO held that the assessee had purchased land from various farmers/persons on agreements/ikrarnamas or power of attorney in his name and later transferred the same to, M/s Horizon Buildcon (P) Ltd as POA of original owners and also relied on the fact that the khasra numbers mentioned on the registration deeds are the same as mentioned in the agreement to sell. Accordingly after excluding the investment of Rs. 1,13,95,000/- related to Shri Surjit Singh, the AO added back Rs (1,93,45,000 - 1,13,95,000) - Rs. 79,50,000/- as his unaccounted investment in purchase of land from his wife Smt Rajwinder Kaur on agreement to sell or power of attorney, which was later on transferred to company M/s Horizon Buildcon Pvt Ltd as per MOU dated 22-01-2008. Decision:- The facts of the case under appeal are the same as in the case of Shri Surjit Singh S/o Shri Harjinder Singh, 29-D Guru Amardas Avenue, Amritsar (PAN ALNPS4128D) for AY 2008-09. The nppeal in the ease of Shri Surjit Singh against the assessment order dated 28-03-2016 for AY 2008-09 has been decided by the undersigned....
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.... A/c No. Rajwi rider Singh, 8 CH DU Souvenir, Krkland, QC H9H5L6 070110B71105 00 15 Lac SBI Town Hall, Amritsar 30111828254 -do- 071120B63736 00 29-11-07 10 Lacs -do- The appellant relied upon several decision "of hon'ble Cotirts including - 1. CIT vs Jai Kumar Bakliwal 366 ITR 217 (Raj). 2. CIT vs Kamdhenu Steel and Alloys Ltd 361 ITR 220 (Del) 3. Mod Creation Pvt Ltd vs ITO 354 ITR 282 (Del) 4. CIT vs Mayavati 338 ITR 563 (Del) 5. CIT vs Ram Narain Goel 224 ITR 180 (P & H) Decision:- The details of the funds amounting to Rs. 19 Lacs received by the appellant from his relative Shri Rajwinder Singh, as given above through banking channels clearly establishes the genuineness of the transactions and the source of receipts of Rs. 19 Lacs, The copy of the bank account no. 30111828254 of the appellant in SBI, Town Hall, Amritsar was called for from the appellant and the above transactions of remittance from vk abroad therein were verified by the undersigned. The appellant also submitted the copy of confirmation of the above remittances from Canada to his brother Sh. Baljinder Singh (appellant). Accordingly there is no justificat....
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....he year under consideration therefore he earned short term capital gain of Rs. 85,90,000/- which was added back to the total income. Decision:- The appeal of the assessee on the issue of suspected investment in purchase of land was decided in his favour while deciding the ground of appeal no. 1 above and the addition of Rs. 10,83,75,750/- 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, was deleted. Since it has been held above that the appellant had not purchased any land in Sultan wind, District Amritsar from the farmers/ persons on agreements/ikrarnamas or power of attorney in his name and had not transferred/sold the same to M/s Horizon Buildcon Pvt Ltd during the year under consideration in the capacity of owner of land, therefore the question of charging capital gain thereon does not arise. Accordingly the addition of Rs. 85,90,000/- on account of short term capital gain is deleted. 11. Aggrieved from the above order of CIT(A), the Revenue is in appeal before the Income Tax Appellate Tribunal. 12. Ld. DR before us submitted his ....
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....e rate has been same @ Rs. 2310/- per Sq yard. This also shows that although the MOU is unsigned but the same has been acted upon by the parties in letter and spirit. 5. There is one more document seized as per DNB-1, A-9, Page-45 (Now marked as Annexure-D). This is a complete schedule of land made against MOU dated 22-01-2008. The total land noted is 50075 Sq yards. The khasra numbers mentioned on this page are same as those on the registration deeds for the purchase of land by the assessee. 6. Further, another MOU dated 18.03.2008 was executed between the above parties which was seized as per document DNB-1, A-1, P- 133-138 (Now marked as Annexure-E), in which it is mentioned that the terms of the MOU dated 22.01.2008 have been complied with and hence this supplementary MOU is being executed. The terms of the MOU dated 22.01.2008 have been further reiterated in this document. This document is also however unsigned. 7. As per one more documents seized as per DNB-1, A-9, P-168 (Now marked as Annexure-F), detail of payments made for this land is noted under the heading "Accounts of Sh. Surjit Singh". As per it total payments of Rs. 11,94,37,570/- has been worked out. After m....
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....9,83,500/- for the assessment year 2009-10, 2010-11 & 2011-12 as against nil income shown in the assessment year 2009-10 & 2010-11 and returned income of Rs. 16,14,390/- for the A.Y 2012-13, as during the course of assessment proceedings. 14.1 Assessee preferred appeal before the CIT(A)-5, Ludhiana against the assessment orders. Before the CIT(A), assessee claimed that the MOU dated 22-01-2008 was rejected as the rates quoted by the vendor were too high. Assessee also claimed that the quoted rates were inclusive of the liability on the part of the brokers to obtain CLU from PUDA i.e., change of land use for commercial purpose, which could never be obtained by the brokers. In its claim, an affidavit from Sh. Surjit Singh dated 12-12-2013 was relied upon whereby it was claimed that surjit singh had testified that the MOU was not executed and that rates in the above mentioned MOU were quoted and offered for commercial approved land and that all the cost for obtaining the approvals for change in land use (CLU) and building plans sanctioned from appropriate authorities would have been paid and borne by the brokers. However, no such clause was given in the MOU. In fact as per the par....
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....rough cheques and the same has been verified by the AO during remand proceedings. Therefore this document does not give any support to Ao's view of purchase consideration being 11.55 Cr. 15.3 Similarly he has rejected the AO's contention with regard to document as per pages 1 & 2 of A-2, DNR (Now marked as Annexure -G) which records various payments to Sh. Surjit Singh for the reason that all these payments have been found recorded in the books of accounts of the assessee and verified during remand proceedings by the AO. 15.4 As regards the Agreements to sell (ikraar namas) relied upon by the AO which were seized as A-1 and A-2 of DNB-1 (Now marked as Annexure -H), CIT(A) has agreed to the claim of the assessee that these have been wrongly recorded as sale deeds by the AO. CIT(A) has held that there is enough evidence as per which these ikraar namas entered into between the brokers Sh. Surjit Singh and others and the original owners of land are collusive in nature to hold the assessee to agree to unusually high price of land for purchase and had been submitted by the brokers alongwith unsigned copy of the MOU. It has been agreed upon by the CIT(A) that on realizing the high p....
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....cannot be advance made to Surjit Singh for obtaining CLU. This documents shows that the advance equivalent to 15% of the gross amount mentioned on 1st MOU has been paid directly to the original land owners from whom the land has to be purchased. ii. Similarly CIT(A) has ignored document DNB-1, A-2, Page-75 (Now marked as Annexure-C) on which amount of advance to be paid to the land owners has been calculated @ 15% of the gross payment as per total Sq. Yards @ Rs. 2310/- per Sq. yard. The aggregate amount of advance worked out is exactly 1.75 crores. It is pertinent to mention that in the 9 Ikraarnamas, all these persons whose names are mentioned on this document, are the co-owners of the land. The assessee has admitted in his submissions before the CIT(A) that this amount has been entered in the books of accounts, but has claimed that it is advance paid to Sh. Surjit singh for obtaining CLU from PUDA. However, if this document is examined in light with the names mentioned on Ikraarnamas and also as per schedule of payment recorded in DNB-1, A-2, Page -72 (Now marked as Annexure-B), the same cannot be an advance for CLU but advance paid to original Land owners @ 15% of the rate fi....
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....sp; 3. Advanve to Surjit Singh & others for CLU 17500000 (@) Rs. 1864334 incurred on earth purchased on various dates & debited to the account of Advance paid for land Amritsar. Hence final balance comes to Rs. 19364334/-. Kindly refer advance for land Amritsar Account lying in DCIT records) 4. Advance to Gurpartap Singh 2000000 5. Advance to Prakash Singh 5000000 6. Advance to SS Steel for Land 14044400 7. Security to Praksh shuttering 5000000 8. Amount incurred for Civil Work- WIP 19995692 ($) 9. Amount incurred for Land Development 1517250 10. Amount paid to Sarovar Portico 1500000 11. Impressed to Ambika Sharma (Director) 2000000 Total 119451228 (*) In fact it is only Rs. 2,29,82,036/- (#) In fact it is Rs. 2,79,11,856/- and includes Rs. 2,42,50,000/- on account of surrender made by Sh. Naresh Sabharwal Director in the A. Y. 2012-13, in spite of the fact that payments have been shown to have been made in the F. Y. 2010-11. There is no clause for obtaining CLU in the 1st and 2nd MOU. (@) In fact this payment has been made to various parties through cheques for Rs. 1.50 Crores plus Rs.....
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....the assessee that any CLU was applied by the brokers from PUDA on behalf of the assessee company. Therefore, Ld CIT(A) has erred while accepting the claim of the assessee that Rs. 2,76,11,856/- were paid to Sh. Surjit Singh as advance to procure CLU from PUDA. Infact, this is an afterthought and since Sh. Surjit Singh is party to the payment of money in excess of the registration deeds, it is quite obvious that he is in help of the assessee to concoct the story. Although some part of 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. b. It is pertinent to mention here that amount of Rs. 2,76,11,856/- includes cash payment of Rs. 2,42,50,000/- which has been shown to have paid during the F. Y. 2010-11, has been claimed to have been surrendered by Sh. Naresh Sabharwal and invested in company as share application money during the F. Y. 2011-12 as unexplained payment. The mere fact that unexplained payments were made to Sh. Sur....
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....of the assessee that Rs. 1.75 Crores/- were paid to Sh. Surjit Singh as advance to procure CLU from PUDA. 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. d. As per Col 4 & 5 payments of Rs. 20 lakhs and 50 lakhs have been made to Sh. Gurpartap Singh and Sh. Parkash Singh respectively as advance. Sh. Gurpartap Singh S/o Sh. Shamsher Singh S/o Sh. Joginder Singh R/o Vill. Sultanwind Asr, Sh. Parkash Singh and Sh. Baljit Singh both S/o of Sh. Joginder Singh, R/o Vill. Sultanwind Asr are members of the same family. Total land purchased from these three persons being part of land purchased vide two registration deeds alongwith other persons is 3 K- 12 M and 8K-13 M totaling 12 K- 1M i.e., around 6000 Sq Yards (Deeds mentioned at Sr. No. 2 and 7 of 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), ....
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.... same persons who are the owner of the land. It is beyond comprehension that so many owners will put their signatures on a fake agreement to sell which is prepared on a STAMP PAPER, which bears the exact details of their land and also has details of advance having received by them. No normal owner of land will give his signature on such a document just to facilitate a person who in their own knowledge is using the same document to fraud a third person. It will definitely be considered that one who can deceive a third person can easily deceive them. Therefore, while rejecting the said agreements to sell without considering the Ld. CIT(A) has erred in this regard. The authenticity of these agreements to sell seems genuine in view of the payments made to Sh. Parkash Singh, Baljit Singh and Sh. Gurpartap Singh as discussed above in para v(d) above. It was further held that the rates 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....
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....at the learned CIT(A) has not considered the provisions of Section 2(47) of the Income Tax Act, 1961 as well as Section 47 of the Income Tax Act, 1961 properly. As per Section 2(47) of the Act, the requirement of transfer of property was completed in favour of the assessee. Further the provision of Section 2(47)(vi) of the Act, reads as under :- "(vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property." He also relied on the decisions of Hon'ble Supreme Court in the case of Balbir Singh Maini (2017) 251 Taxman 202/398 ITR 531 (SC) and submitted that the Hon'ble Supreme Court in the said case has observed that object of section 2(47)(vi) appears to be to bring within the tax net a 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 d....
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....sh and various other payments to the assessee, which are indicated in the above annexures. Therefore, it cannot be relied that the MOU signed by him on 22/01/2008 has no value between the parties. We further noted from the order of the Assessing Officer that on the subsequent deeds executed between both the parties which has been signed by both the parties referring to the MOU dated 22/01/2008. When these documents confronted to the assessee vide order sheet entry dated 8/3/2016, the assessee in reply submitted that these are unsigned documents and therefore, does not have any value in the eyes of law. The plea given by the assessee is not acceptable being entirely baseless and cannot be relied upon. The claim of the assessee that the MOU dated 22/01/2008 is not signed and have no weight 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....
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....Seller Khasra Number Total Area of Agricultlure Land Total Sales Consideralion Details of Payment Received by me Details of payments refunded to farmers Details of POA No. given by the Farmers 27.5.09 Harbans Kaur 4415, 10K-1M 2261500/- Reed. Rs. 10 lacs on Amt refunded to 07/04//2008/D 4418, 4427, 4436 9/5/2008 in SB a/c with Syndicate Bank farmer out of cash withdrawal from SB a/c Syndicate Bank. OC 1390 2/3/09 ijHarbans Kaur, 4416, 17K-1M 3826500/- i)Ch. No.394300 Amt.refunded to 1) 07/04/08 HjDilbag Singh & 4417, rcvd.for Rs. 35 lacs farmers vide DOC1390 Hira Singh & 4418, 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 &....
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.... 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. On going through the assessment order and the submissions of the assessee and the Revenue, we are of the opinion that the AO has rightly held that documents in question were not signed by any of the party, but the authenticity of these documents cannot be denied in view of the fact that the things have been happened further according to the said MOU and according to other documents found at the business 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. H....
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....ls of the Revenue in case of M/s Horizon Buildcon Pvt. Ltd. in ITA Nos.671-673/ASR/2014 for the assessment years 2009-2010 to 2011-2012. Thus, ITA Nos.671-673/ASR/2014 are allowed. 21. Now, a procedural issue comes before us that though the hearing of the captioned appeal was concluded on 06.02.2020, however, this order is being pronounced much after the expiry of 90 days from the date of conclusion of hearing. We find that Rule 34(5) of the Income tax Appellate Tribunal Rules, 1962, which envisages the procedure for pronouncement orders, provides as follows: 34(5) 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 sha....
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....ely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court 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, ha....