TaxTMI 
TaxTMI 
2022 (4) TMI 321
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....4,00,000/- and that of Smt. Neetaben Patel was of Rs. 2,61,07,304/- as on 31.3.2012 mainly on account of development agreement (and bestowing the land to the firm), which reduced to Rs. 1,10,07,304/- as on 31.3.2013 on account of withdrawal made by Smt. Neetaben Patel. The closing stock i.e. work-in-progress as on 31.3.2012 was Rs. 2,75,17,712/- and that of 1.3.2013 was Rs. 3,37,09,177/-. Thus, the cost of construction incurred during the financial year 2013-14 was Rs. 42,28,752/-. The assessee has filed its return of income under section 139 of the Act on 3.8.2013 declaring total income at Rs. NIL, which was processed under section 143(1) of the Act. Thereafter search action under section 132 was carried out in the Bafna Panchal group of cases on 7.1.2014 which covered the residential premises of Shri Mukund Patel, Smt. Nitaben Patel and Shri Jaresh Patel, the partners of the firm. Subsequently, a survey under section 133A of the Act was also carried out at the site office of the assessee-firm viz. Monareeca Enterprise, B/h. Vibhyor School, Atladara Padra Road, Baroda. The books of account/documents etc. have been impounded as per Annexure A/1 to A/3. Page No. 10 of Annexure A/3 a....
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....Ld. CIT(A). 4. The Ld. CIT(A) after considering validity of reopening of the assessment, and additions made by the AO passed a detailed order directing the AO to delete the impugned addition made to the total income of the assessee. The operative portion of the impugned order of the Ld. CIT(A) are as follows: "6. After careful consideration of the analysis of the facts by the AO and the reasoning adopted by the AO for the impugned addition and the submissions of the appellant supported by documents of purchase of land and development agreement, I am convinced that the land was purchased by Smt. Neetaben Patel in her individual capacity, that the investment was made by her for the purchase of said land in her own name and that she was the absolute owner of the said land. The land came into the possession of the appellant partnership firm in lieu of capital contribution of Smt. Nitaben Patel and the appellant partnership firm got unrestricted development right because of the development agreement between Smt. Neetaben Patel and the appellant firm. Under the circumstances, if at all there was any unexplained investment at the time of purchase of the land, it could be by Sm....
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....oss and that the effect of addition made in the hands of the appellant's firm as made in the assessment order will get neutralized/nullified over the period of the project. 6.3 On careful consideration of the facts and issues in the case, I am of the considered opinion that the addition made in the assessment in the hands of the appellant for the AY 2013-14 cannot be upheld. The AO is directed to delete the addition made to the total income." 5. Aggrieved against this order, the Revenue is in appeal before the Tribunal with the following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 10,10,00,000/- for A.Y. 2013-14 without appreciating the fact that the above addition was made by the A.O. on the basis of incriminating document found during the course Survey proceeding u/s. 133A of the IT. Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating the entries recorded at the impounded material (Annexure-A/3) found from business premise of the assessee firm while upholding the addition of Rs. 10,10,00,000/- made by the A.O....
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.... had paid money more than what was stated in the agreement to sell nor any unearthing from the premises of the appellant during the survey and search of any evidence of any cash consideration paid. Reliance has been placed on CIT vs. Premprakash Nagpal and CIT vs. Vivek Agarwal, K.P. Vargheese vs. ITO and host of other cases, (e) the relied upon impounded document was found during the course of survey and not during the course of search and accordingly provisions of section 132(4A) were not applicable to the document and thus there is no presumption that the contents of such documents were true, (f) the investment in land was made by one of the Partners of the appellant in A.Y. 2011-12 (as per the payment schedule last installment of payment towards consideration of land was made on 07.02.2011 i.e. F.Y. 2010-11 related to A.Y. 2011-12) and thus addition of Rs. 10.10 crores in A.Y. 2013 - is bad in law since as per section 69, the addition of unexplained investment could be made in the year in which investments were made. For this, reliance has been placed on CIT Vs. Shree Ram Jaiswal and CIT Vs. Roopchand Nawal Chand Gandhi and other cases." 8. In the light of ....
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....Hon'ble jurisdictional High Court of Gujarat in the case of Pr. CIT Vs. Nageshwar Enterprises, 122 taxmann.com 41 (Guj.) wherein it is held as follows: "9. A Co-ordinate Bench of this Court, in the case of Kailashben Manharlal Chokshi v. CIT. [2008] 174 Taxman 466/[2010] 328 ITR 411 (Guj.), took the view that merely on the basis of admission, the assessee cannot be subjected to additions. The Co-ordinate Bench proceeded to observe that unless and until some corroborative evidence is found in support of such admission, the department would be justified in making additions. In other words the proposition of law as laid down is that the department cannot start with the confessional statement. The confessional statement has to be brought in aid of other materials on record. In the case on hand two authorities have concurrently recorded a finding of fact that, except the statement recorded under section 108 of the Customs Act there is no other evidence. 10. Mrs. Raval, the learned standing counsel appearing for the Revenue seeks to rely upon the decision of the Rajasthan High Court in the case of Bannalal Jat Constructions (P.) Ltd. v. Asstt. CIT [2019] 106 taxmann....