TaxTMI 
TaxTMI 
2022 (4) TMI 1053
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....cer." 2. Facts, in brief, are that the assessee is a partnership firm engaged in real estate business of colonising, developing buildings and construction. Return of income showing a loss of Rs. 326/- was filed u/s 139(1) of the I.T. Act by the assessee on 24.7.2012. A search and seizure operation u/s 132 was carried out at the business and residential premises of various persons of Jhaveri group of Indore on 21.9.2008 wherein various books of account and other documents were seized. During search and post search inquiries, it was noted that main person of the Jhaveri group i.e. Mr. Mukesh Jhaveri had purchased lands in the name of vasrious individuals as well as its various concerns including the present assessee at higher prices but in the registered document, actual consideration has not been shown, therefore, it was noted that while purchasing land, substantial part of purchase was paid in cash from unaccounted income and source of the same was not explained. Thus, the Assessing Officer reopened the case of the assessee u/s 147 of the I.T. Act and in response, the assessee requested to treat the return filed u/s 139(1) of the I.T. Act on 24.7.2012. Therefore, the assessee fi....
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...., Appeal No. 872/2015- 16 for A.Y 2012-13-reg. Kindly refer to your letter F.No. CIT (A)-III/BPL/RR/Gautamswami Enterprises/2018-19/S17 dated 12/06/2018 on the above subject. 2. In connection to the above, it is submitted that during the search action u/s 132(1) of IT Act dated 2110912012 in the Jhaveri group, some loose papers had been found and seized. The copies of registry of land were also found and seized as per LPS-1/48, M-7 and M-II. On the basis of such copy of registries seized and report of investigation wing, the addition of Rs. 10,08,01,674/- was made by the AO on account of unexplained investment u/s 69 during the assessment proceedings u/s 143(3) r.w.s. 147 dated 24/02/2016. The details of the seized registry as per assessment order forming basis of addition by the AO are as are as under:- ................................................................................................................ ................................................................................................................ After verification of the above list, it is found that copies of registries of following loose papers are same wi....
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....h purchase deeds. Due to this reason, while working out the differential amount, Id AO inadvertently considered and taken into account both the documents- i.e. original purchase deeds and its photocopies treating them two different and distinct documents. During the assessment proceedings itself, Id AR of the assessee vide his letter dated 22.01.2016 [vide para 5) invited the attention of Id AO about 'duplication of details' but Id AO seems to have paid no heed to such a vital aspect and went on to pass the assessment order based on the details mentioned in his Show Cause Notice. During appellate proceedings, my attention was once again drawn by the Id AR towards this mistake on the part of the Id AO. Therefore a factual report was summoned from AO who unequivocally admitted in his remand report that after verification of relevant material, he noticed such duplication in relation to 5 such purchase transactions. The said remand report has been already scanned on page 9 to 13 of this order for ready reference. However, at cost of repetition, I cite the relevant cases of 'duplication' here below :- i. LPS 1/48 (page87) and LPS M-ll (page 32) ii. LPS ....
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....he total addition of Rs. 10,08,02,000/- made by Ld AO in assessment order, Ld AO has been fair enough in conceding this mistake upfront in his remand report, 6.2 For the other set of registries (original registries) involving additions of Rs. 5,15,14,000/- Id AO presumed that appellant has paid over and above the price shown in sale deed price out of its undisclosed income, The brief details of these properties are as under:- 6.3 This is an admitted fact that neither the sellers of impunged lands have admitted that impunged lands were sold over and above the amount disclosed in registered purchase deed nor any incriminating evidence was found & seized during the Course of search to corroborate the allegation of Ld AO that for purchase of impunged land, the assessee had paid consideration to the tune of Rs. 19,08,96,000/. (actual figure Rs. 9,7 4,16,000/-). It is true that except there being a difference in price as per Stamp Valuation vis-avis shown in the registered deeds, there is no other piece of evidence to corroborate the allegation of Id AO that assessee actually paid any amount over and above the consideration shown in the respective registered deeds. Ld. ....
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....ion basis. It would be pertinent to refer to the decision of Hon' ble Apex Court in the case of Umacharan Saha & Bros Co. v /s CIT 37 ITR 21 (SC) wherein it was held that suspicion, however, strong cannot take place of proof. It Would be most pertinent to refer to the decision of Hon'ble Supreme Court in the case of K P Varghese vis ITO (1981) 131 ITR 597(SC) wherein it was held that assessee must be shown to have received more than what is disclosed by him as consideration. Burden of proof is on the department. Here the ratio of the above cited case is squarely applicable to the facts of this case, the AO is required to bring some tangible and Positive material on record to prove that assessee has paid more consideration than disclosed by it in the books, Hon'ble Supreme Court in the case of Dhakeshwari Catton Mills Lld Vis CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, assessment cannot be made on the basis of imagination and guess Work. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v /s CIT (1954) 26 ITR 736 (SC). 6.5 Without prejudice to the above, th....
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.... • JaiMarwar co. Pvt. Ltd. v/s ACIT 79 TT J (Jd) 178 • ITO vis Harley Street pharmaceuticals Ltd. (2010) 38 SOT 486 (Ahd) Conclusion:. In view of the remand report submitted by the A.O it is very unambiguous that "double addition" has been made on account of photocopies of original registries, thus addition made on account of difference in sale consideration and market value with respect to duplicate/double addition to the tune of Rs. 4,91,28,000/- is hereby ordered to be deleted outrightly. Further, in view of above discussion and case laws discussed above, ld. AO was not at all justified in adopting the value determined by Stamp Valuation Authority as actual consideration paid as purchase cost without brining any tangible or positive material on record, action of A.O. is held not to be sustainable on facts and in law. Hence, remaining addition of Rs. 5,15,14,000/- made purely on guess work, conjunctures & surmises u/s 69 of the Act is also hereby ordered to be deleted leaving a difference of Rs. 1,60,000/- (Rs. 10,08,02,000- Rs. 4,91,28,000- Rs. 5,15,14,000). Ld AR of the appellant has brought to my notice that the difference of Rs. 1,60....
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....ry formation, the assessee has not affected any sales till 31.03.2012. The land purchased is duly reflected in the balance sheet. Since no sales have been affected, there is no question of any accounted or unaccounted income up to the end of the subject assessment year. Without prejudice to the above, notional income under section 56(2)(vii) has been brought on the statute book with effect from 1.04.2014 . It is not a retrospective amendment. Therefore, the Assessing Officer is not empowered to apply the said provision from retrospective date. The view of cash transaction from unaccounted money formed by the Assessing Officer is not supported by any evidence or document. While invoking section 69, the Assessing Officer is bound to establish that actually the assessee has paid any amount in cash and the same ought to be supported by the tangible evidence. Section 69 clearly speaks that the assessee should have made investment which is not recorded in the books of accounts. Learned Counsel for the assessee also relied on the ratio laid down in the following judicial pronouncements:- 1. CIT vs P.V. Kalyanasundaram; Supreme Court of India; 294 ITR 0049 (2007) 2. CIT v....
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....ecord in the light the ratio laid down in the judicial pronouncements (supra), we find that neither the sellers of impugned lands have admitted that impugned lands were sold over and above the amount disclosed in the registered deed nor any incriminating evidence was found and seized during the course of search to corroborate the allegation of the Assessing Officer and only making guesswork on the guideline value of the land and the transaction value, the Assessing Officer presumed that cash transaction was made. The Assessing Officer noted an example in the assessment order that one Mr. Sanjay Sharma sold 18 acres land to Mr. Mukesh Jhaveri and admitted 'on money' receipt of Rs. 3,64,00,000/-. However, having gone through the remand report, the ld. CIT(A) recorded that the assessee firm never purchased any land from Mr. Sanjay Sharma. We are of the view that under Section 69 of the I.T. Act, the onus is on the Assessing Officer to prove that the assessee made some unaccounted investment in purchase of property but in the present case, the Assessing Officer failed to discharge his onus and simply on guesswork, the addition was made. The judicial pronouncements cited by the learned ....