TaxTMI 
TaxTMI 
2021 (10) TMI 546
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.... 2. The appellant is reserves his right to add, amend or alter the grounds of appeal on or before the date, the appeal is finally heard for disposal. 2. Brief facts of the case as culled out from the records are that the assessee is a Private Limited Company engaged in the business of development and sale of plots. Search u/s 132 of the Act was carried out on 21.09.2012 at various premises of the Jhaveri Group. Assessee Company is also part of Jhaveri Group. During the search proceedings it was found that the Jhaveri Group had purchased lands at higher prices but in the registry, actual amount paid by them was not declared. Ld. Assessing Officer also observed that during the year under appeal assessee purchased lands at Rau and value as per registry was at Rs. 4,42,91,300/- but the guideline value was at Rs. 10,36,43,000/-. The difference worked out to Rs. 5,93,51,700/-. When confronted the assessee submitted that no 'on money' over and above the value appearing in the registered sale deed has been paid and also there is no provisions in the statute to treat the guideline value as actual consideration and tax the difference it in the hands of the purchaser. Ld. Assessing Offic....
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....money' in cash, similar modus operandi must have been applied by the assessee in purchase of 7.30 acre land at Village Rau. Ld. Assessing Officer further in support to justify the addition referred to the guideline value and the registry value of the land in question wherein the guidelines value was higher by Rs. 5,93,51,700/- to the registry value. 8. We further find that Ld. CIT(A) after examining the details and also on finding that the statement of the alleged sellers was neither confronted to the assessee nor any opportunity of cross examination was given and placing reliance on various settled judicial precedents deleted the addition observing as follows: 3.3 I have gone through the assessment order, the appellant's contentions and the material on record. The appellant has purchase land in Village Rau from various sellers, the details of the 'same have been placed on record. During the course of the search no incriminating document or material was found to show that the appellant had made payment over and above the amount stated in the purchase deed for the land at Rau. The Assessing Officer has relied on seized documents LPS M-2 page no. 21 and LPS-l/48 p....
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....report dated 15/02/2017 has submitted that the assessee was confronted with the statements recorded during the search as well as assessment proceedings and no retraction were filed at that time. The retraction letters from the sellers filed in the appeal proceedings are nothing but an afterthought and therefore there is no requirement for further examination of the sellers. 3.4.3 The appellant vide its reply dated 25/02/2014 had submitted in the assessment proceedings (reference para 9.3 of the assessment order) that the statements of Shri Rajesh Sule has never been provided to enable it to analyze the same. The appellant had in its submissions highlighted the broad principles relating to deposition of a witness which clearly state that an opportunity of rebuttal is given to the other party. The Assessing Officer has written in para 9.5 of the assessment order that copies of all statements had already been provided along with the questionnaire issued u/s 142(1) dated 31/07/2014. Perusal of the said questionnaire dated 31/07/2014 shows that only copy of the statement given by Shri Sanjay Sharma was given to the appellant (reference para 4.1 of the questionnaire). As stated ....
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.... find any infirmity with the order of the High Court. 3.5.1 The following decisions of the High Courts are also relevant:- (i) The decision of Hon'ble High Court of Rajasthan in CIT vs. Kamal Trading Co. (2013) 33 taxmann.com 554 (Raj.) --- In this case addition of Rs. 22,41,482/ - was made on account of unexplained sundry creditors. CIT(A) found that statements of certain farmers were recorded by the Inspector of Income Tax but they were recorded behind the back of the assessee. The assessee was not given an opportunity to cross examine the witnesses. Statements were written in Hindi, where as the farmers were illiterate or semiliterate. Affidavits were filed by the assessee of each and every farmer, which have been relied upon by the CIT(A) to delete the addition and the said finding has been affirmed by the Tribunal which has been upheld by the High Court. (ii) The decision of Hon'ble High Court of Gujrat in Heirs and Legal Representatives of Late Laxman Bhai S. Patel vs. CIT (2008) 174 Taxman 206 (Gujrat) --- In this case the statements of witness 'R' on which heavy reliance was placed by the Assessing Officer while making addition, wa....
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....inking the payments stated to be paid by the Assessee, merely based on the statement of N it could not be stated that the assessee had received additional consideration. He found that when it is the duty of the revenue to prove beyond doubt that additional consideration had exchanged hands, in the absence of any material and evidence, such a decision could not be taken on mere assumption or probabilities. Hence, he found that the Assessing Officer had failed to establish that additional consideration had been paid by the assessee. This was confirmed by the Tribunal. On appeal; Held, allowing the appeal, that the oral evidence, which was supported by the section 132(4) statement and the affidavit of N, which was uncontroverted even during the cross-examination, could be treated as sufficient evidence to show that the property had been sold for Rs. 78,20,000. The Commissioner (Appeals) had gone little further and had indicated that the revenue had not adduced any further evidence to show that N had paid Rs. 66,20,000 to M for purchasing the property and the assessee had paid the differential amount to N . Apparently, these were all instances where the parties did not maintai....
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....urchase of the land, in our opinion, no question of law arises. 3.7 The decision of the Hon'ble ITAT, Indore in the case of M/s Shree Parshwanath dated 18/07/2014 is also relevant wherein it has been held that the mere fact that somebody made statement, by itself, cannot be treated as having resulted in an ir-rebuttable presumption against the assessee. The burden cannot be discharge by the Revenue by merely referring to the statement of the third party and such statement cannot be the sole foundation that the assessee has deliberately suppressed the Income. 3.8 Estimation of the additions on the basis of the assumption that as the group members indulge in making undisclosed cash payments in land transactions, there is undisclosed consideration paid for purchase of the said land is not an acceptable, sustainable and justified approach. Reliance is placed on the decision of the Hon'ble Supreme Court in case of K.P. Varghese vs. ITO & Anr. (1981) 131 ITR 597 (SC) wherein the context of section 52 of the Income-Tax Act, 1961 [which has since been omitted by the Finance Act, 1987 w.e.f. 01/04/1988] it has been held that the onus lies on the Revenue to establis....