TaxTMI 
TaxTMI 
2022 (8) TMI 1022
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....] dated 13th August, 2021 in case of M/s Thakkar Housing Development Pvt. Ltd. 03. ITA number 2133/M/2021 for assessment year 2012 - 13 and ITA number 2132/M/2021 for assessment year 2014 - 15 is filed by the Asst Commissioner of income tax - Circle 2 (3) (1), Mumbai (the learned AO) against the order passed by the Commissioner of income tax (appeals) - 49, Mumbai dated 16/8/2021 in case of M/s Thakkar Grih Nirman Pvt Limited. 04. ITA number 2134/M/2021 is filed by the Asst Commissioner of income tax - 2 (3) (1), Mumbai for assessment year 2014 - 15 against the order passed by the Commissioner of income tax (appeals) - 49, Mumbai dated 16/8/2021 in case of M/s Thakkars Apna Ghar NIrman Pvt Ltd . 05. We first state the facts in case of ITA number In ITA No 2135/M/2021 where learned Assessing Officer in case of assessment year 12-13 of Assessee M/S Thakkar Housing Development Private Limited has raised following grounds of appeal:- "(a) On the facts and circumstances of the case and in law, the Ld CIT(A) erred in not appreciating the fact that members of Kokani family willfully admitted before the Hon'ble ITSC that they had received sale consideration of Rs.65,21,25,992/- in....
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....acts of the case in ITA number 21354 assessment year 2012 - 13 and decide it. The same decision is applied to other appeals thereafter. 07. The facts of the case show that assessee is a company engaged in the business of builders and construction. A Search and seizure action under Section 132 of the Income-tax Act, 1961 (the Act) was conducted on 8th September, 2015 on Kokani Group of Nasik. Based on that search, information was available that namely (1) M/s Thakker Apna Ghar Pvt. Ltd, (2) M/s Thakker Housing Development Pvt. LTd and (3) M/s Thakker Gruh Nirman Pvt. Ltd. (4) Dhannjay Marketing Pvt Ltd , (5) Asian Food Products Limited (6) Shri Karan Vijay Gupta [ collectively known as "Thakker Group] purchased the land at survey number 53/2 area admeasuring 20H.65R, survey number 54 area admeasuring 9H18R and survey number 55 area admeasuring 10H.41R i.e. Total area admeasuring 92 acres and 20 Gunthas of Savargaon Taluka District Nashik for consideration of Rs. 652,125,992/- as per sale deed dated 5/7/2013 from 14 parties known as Kokani group of Nasik. During the course of search on Kokani group certain loose sheets were found and seized which were forwarded to the AO of the asse....
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....ember, 2018 asking the assessee to furnish the explanation with respect to proposed addition and the learned Assessing Officer also asked to produce sellers as a witness of the assessee. The assessee denied any cash payment once again but failed to produce the seller. Consequently, another notice dated 26th December, 2018 was issued to the assessee reiterating the same facts and seeking same explanation. Assessee submitted its reply on 28th December, 2018 denying the cash payment. Based on this, the learned Assessing Officer held that during the assessment year 2012-13, assessee has made a cash payment of Rs.1,56,93,324/- for purchase of land at Savargaon and accordingly, the order under Section 143(3) read with section 153C of the Act was passed on 30th December, 2018 wherein the learned assessing officer assessed the total income of the assessee at Rs 1,56,93,324/- against returned of income filed by the assessee at Rs Nil. 013. The assessee carried the matter before the learned CIT (A), who passed the order on 30th August, 2021 for A.Y. 2011-12, 2012-13, 2013-14 and 2014-15 deleting the above addition. 014. The learned CIT (A) dealt with the addition in paragraph no. 10 of his....
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....nt recorded u/s 132(4) of the Act, during the course of search in their hands that they accepted the cash over and above the consideration stated in the sale deed to the tune of Rs. 11,94,19,700/-, the Assessing Officer drew inference that the Thakker Group had paid on-money of Rs.65,21,25,992/- at the time of purchase of land to the Kokni group and said consideration was divided among the buyers of the land in the proportion of the land purchased by them. The appellant being purchaser of 20 acres of the land out of 92.6 was held to have paid on-money payment to the extent of Rs. 14,10,00,214/- which was taxed in the respective years of payment as per the assessment orders under consideration. 10.4. At the very outset, the appellant vide it's submission has highlighted the fact that identical additions on account of on-money payment were made in case of the other co-owners as well. However, in case of two co-owners of land i.e. M/s. Dhananjay Marketing Pvt. Ltd. and M/s. Asia Food Products Ltd, the Hon'ble Pune Tribunal vide it's order dated 19.05.2021 and 21.06.2021 respectively has deleted the said additions on account of on-money payment. On comparison of the facts....
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.... in question along with the appellant includes following 6 parties: (i) M/s. Thakkers Housing Development Pvt. Ltd. (ii) M/s Dhananjay Marketing Pvt. Ltd. (iii) M/s. Thakkers Apna Ghar Pvt. Ltd. (iv) M/s Asian Food Products Ltd. (V) Shri Karan Vijay Gupta (vi) M/s. Thakkers Gruh Nirman Pvt. Ltd. (hereinafter called "Thakker Group") 4. The seller of the said lands are as under (i) Ms. Farzana Sallauddin Kokani (ii) Mr. Fakruddin Sallauddin Kokani (iii) Ms. Noorbano Sallauddin Kokani (iv) Mr. Kadarsaheb Kutubuddin Kokani (v) Ms. Yasmin Kadarsaheb Kokani (vi) Mr. Aljaj Kutubuddin Kokani (vii) Mr. Muzaffar Kutubuddin Kokani (viii) Mr. Gulnar Allauddin Kokani (ix) Ms. Naida Anjum Sameer Kokani (x) Mr. Nizamuddin Faridoddin Kokani (xi) Mr. Iftekar Faridoddin Kokani (xii) Mr. Tamizoddin Faridoddin Kokani (xiii) Mr. Gulamgaus Allauddin Kokani (xiv) Mr. Mainuddin Nizamuddin Kokani (hereinafter called "Kokani Group") 5. There were also search and seizure operations u/s 132 of the Act in the premises of said Kokani group of Nashik on 15.01.2015. During the course of search proceedings in the said Kokani group, certain loose sheets were found and sei....
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.... order. However, despite several notices issued to the said Mr. Tamizuddin Kokani, he had not turned up for examination before the Assessing Officer. However, the Assessing Officer taking note of the fact that the share of the said Mr. Tamizuddin Kokani out of the cash receipt of Rs.11.94 crores is only Rs.1.41 crores and in the absence of any other source of income, he presumed that this cash expenses were incurred on development of land was out of on money received on the sale of the subject land to the Thakker group. 8. Further, on analysis of the documents found and seized from the premises Mr. Asif Nizamoddin Kakani who had 11.82% share in the subject land sold, the Assessing Officer found that the said Mr. Asif Nizamoddin Kakani had purchased land by paying the consideration in cash and cash expenditure was incurred for the purpose of constructing the bunglow and purchase of jewellery and cash deposits in banks. The total expenditure on the above aggregating to sum of Rs.5.91 crores The details of which are extracted by the Assessing Officer at page no 15 of the assessment order. The Assessing Officer is of the opinion that the share of cash received in Savargaon land, the ....
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....etails of apportionment of the said alleged on-money received are contained in page no.20 of the assessment order. 11. Similarly, the Assessing Officer presumed that the Thakker group of companies who purchased the land from Kokani group of companies have paid consideration in cash, in order to examine them, a notice u/s 131 of the Act was issued on 02.01.2015 to one Mr. Gaurav J. Thakker, who is stated to have been denied having paid any consideration over and above what is stated in the sale consideration. The Assessing Officer also issued a show cause notice to one Mr. Abhishek Thakker who was supposed to have been involved in this land transaction. It appears that he had not complied with the summons issued u/s 131 of the Act. 12. Based on the information and considering the fact that the seller of the subject land i.e. Kokani family members had stated in the statement recorded u/s 132(4) of the Act, during the course of search in their hands that they accepted the cash over and above the consideration stated in the sale deed to the tune of Rs. 11,94, 19,700/-, the Assessing Officer drew inference that the Thakker group had paid-on-money of Rs. 65,21,25,992/- at the time of....
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.... over and above the apparent consideration. The sellers of the land were also entered into other land deals. Therefore, it cannot be presumed that, at all, there is receipt of any on-money by Konkani group, it is only from Thakker Group. V. The appellant along with other co-owners of subject land offered to sell the land to MIDC for consideration of Rs.90 lakhs per acre vide offer letter dated 06.12.2014 and therefore this fact only suggests that there was no possibility of buying the land worth Rs. 83,25,00,000/- for Rs. 130.42 crores. VI. All the sellers of the land had specifically denied the receipt of any on-money consideration on the sale of subject lands on the crossexamination and the declaration of Rs. 11.9 crores u/s. 132(4) of the Act was only with an intention to buy peace with the Department. 13. The Ld. Assessing Officer after extracting the reply furnished to the show cause notice while reiterating his earlier findings, had proceeded with the framing of the assessment order by making addition in the hands of Thakker group of company, in proportion to the land purchased by the Thakker group of companies Accordingly, the addition of Rs. 14, 10,00,214/- was made in th....
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....Revenue is in appeal being aggrieved by that part of CIT(A) order which is against the Revenue in IT(SS)A No. 69/PUN/2017. 17. Now, we shall take up the appeal of assessee in IT(SS)A No.65/PUN/2017. 18. The appellant raised the following grounds: 1. The learned CIT(A) erred in upholding the initiation of legally untenable proceedings u/s 153A and in issuing legally untenable Notice u/s 153A in absence of any incriminating material or unexplained asset found during search action at 7, Thakkers, Near Nehru Garden, Nashik 422001 Therefore, it is prayed to annul the assessment order, passed u/s 153A in the case of appellant. 2. In the facts of the case, evidences on record, submissions made & case law relied, the learned CIT(A) erred in holding that, 'onmoney' aggregating to Rs. 11,94,19,700/ was paid by all the Purchasers of agricultural land at S. Nos.53/2, 54 & 55 of Savargaon, Tal & dist: Nashik & appellant's share therein amounted to Rs.2,58,20,476/-, giving rise to the unexplained investment liable for taxation in the hands of appellant for A. Y. 2014-15 at Rs.2,58,20,476/- Therefore, it is prayed to cancel the addition on account of unexplained investment of Rs....
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....hat the statement recorded u/s 132(4) of the Act read with seized material are conclusive proof of payment of on-money consideration at the time of purchase of the subject lands. Thus, he prayed to uphold the addition as confirmed by the Ld. CIT(A). 24. We have heard the rival contentions and perused the record. The only issue in the present appeal relates to the addition of Rs.2,58,20,476/- based on the statement given by third party namely Kokani group of companies during the course of search and seizure proceedings in their hands u/s 132(4) of the Act. Admittedly, no incriminating material suggesting the payment of on-money consideration to the vendors of the subject land was found as result of search and seizure action in the hands of appellant herein. We are conscious of the fact that for the purpose of assessment to tax for the assessment year under consideration, the incriminating material found as a result of search and seizure action has no relevance, as there is abatement with regular assessment proceedings, therefore, theaddition, if any, need not be based on incriminating material found as result of search alone. All other evidence which is gathered by the Assessing O....
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.... denied the knowledge of receipt of the on-money consideration as the subject transaction of sale of land to Thakker was negotiable by two of the deceased family members namely, Moinuddin Ziauddin Kokani and Imran Iftekhar Kokani. The said affidavits were placed at page no. 265 to 291 of the Paper Book. 30. In the above factual backdrop, we are required to evaluate the evidentiary value of the statement given by the vendors u/s 132(4) of the Act during the course of search and seizure action in their premises. As stated (supra), there are clear contradiction in the statements given by the vendors. It is settled position of law that the contradictory statement has no evidentiary value and reference in this regard can be made to the decision of Hon'ble Supreme Court in the case of Dhirajlal Giridharilal vs. CIT, 26 ITR 736 (SC). 31. Furthermore, during the course of search and seizure action in the premises of the appellant group, no incriminating material was found suggesting the payment of any on money consideration. It is also settled position of law that no addition can be made the merely based statement u/s 132(4) of the Act by third party in the absence of any incrimina....
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....T, 243 ITR 83, wherein the Hon'ble Supreme Court after referring to the earlier decision in the case of Smt. Taradevi Agrawal, 88 ITR 323 held that merely because of an assessment of income in the wrong hands is not bar to assess the same income in the right hands and failure by the Assessing Officer to assess the income in the right hands renders the assessment order erroneous. 35. Further, we notice that both Assessing Officer as well as CIT(A) misdirected themselves by applying presumption u/s 132(4A) of the Act. The provision of section 132(4A) incorporates the rule of evidence relating to material found during course of search. On plain reading of said provision, it is evident that it has application in the case of searched person. in whose hands the material was found and seized. The presumption envisaged under said provision cannot be extended to assessment of third party. The CBDT also recognized the principle that no addition can be made on mere statement made u/s 132(4) without bringing any corroborative evidence. The CBDT Circular reads as under : "Admissions of undisclosed income under coercion/pressure during search/survey - Instances/complaints of undue influe....
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.... position, we are of the considered opinion that the Department had failed to establish that the appellant had paid any on-money over and above stated consideration of the sale deed to the vendors of the property at the time of purchase of Savargaon land. Therefore, no addition can be made on the mere statement given by the third party. Therefore, the orders of the lower authorities are reversed, we direct Assessing Officer to delete addition of Rs.2,58,20,476/- for the assessment year under consideration. 39. In the result, the appeal of the assessee stands allowed. Revenue's Appeal: 40. Being aggrieved by that part of the order of the Id. CIT(A) which is against the Revenue, the Revenue is in appeal before us. 41. The Revenue raised the following grounds of appeal: "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. 10,06,60,053/- made by the AO for A.Y.2014-15 in the case of the assessee without appreciating the facts that the addition made by the AO are based on the strong corroborative evidences in the form of the seized materials with logical and justifiable reasons to arrive at the addition o....
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....ment of purchase was made only in July, 2013, there is no possibility of making cash payment prior to that date to the tune of Rs.21 crores and also the apparent consideration was 10 times higher than ready reckonor, therefore, the Id. CIT(A) ruled out possibility of paying over and above the stated consideration and, accordingly, held that the presumptions drawn by the Assessing Officer that the respondent assessee would have paid on-money consideration cannot be justified and, accordingly, deleted the additions. 43. Being aggrieved, the Revenue is in appeal before us. 44. It is contended on behalf of the Revenue that the vendors of the subject land have admitted additional income before the Hon'ble Settlement Commission to the tune of Rs.65 crores in the application equivalent to apparent consideration. In support of this he also filed the order of the Hon'ble Settlement Commission, copy of the proceedings before the Hon'ble Settlement Commission, as well as, the statement of computation of total income of all the vendors. It was further submitted that the vendors offered additional income as undisclosed capital gains on sale of lands. He further submitted that th....
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....ssions and perused the material on record and carefully gone through the orders of the lower authorities. The issue in the present appeal of the Revenue centres around the factual matrix of seized material in the case of vendors of the property 1.0. 3 parties. The Assessing Officer had presumed that based on the material found and seized from the premises of the vendors of the land received on-money consideration from the respondent assessee and in its group companies in connection with the purchase of land at Savargaon. The question therefore which requires to be decided by us is that whether or not the Assessing Officer is justified in drawing such conclusion based on the seized material found and seized from the premises of the vendors. The Assessing Officer as well as the ld. CIT(A) had reproduced scanned images of the seized material which form the basis of the addition in the assessment. That apart the vendors had admitted before the Hon'ble Settlement Commission, the additional income in the form of undisclosed capital gains on sale of land equivalent to apparent sale consideration mentioned in the sale deed on the sale of Savargaon land. No doubt from the perusal of the....
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....aterial indicates incurring of such expenditure much before the date of agreement of purchase f.e. July, 2013, no prudent person would have paid the on-money consideration much before le. 2 and 2/1 years before date of agreement of sale. 50. It is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of "dumb documents" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondentassessee and its group companies, no material whatsoever was seized and found indicating payment of on-money consideration at the time of purchase of the lands. Reliance in this regard can be placed on the following decisions: i) Pr.CIT vs. Umesh Ishrani (2019) 108 taxmann.com 437 (Bom) ) CIT vs. Atam Valves (P) Ltd. (2009) 184 Taxman 6 (P&H) iii) CIT vs. Maulikkumar K. Shah (2008) 307 ITR 137 (Guj) iv) CIT vs. C.L. Khatri (2006) 2....
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..... This takes care of the argument of Mr. Sabharwal that judicial notice can be taken of the practice prevailing in the property market of not disclosing the full consideration for transfer of properties. 53. The Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) held that the capital gains is intended to tax the gains of assessee not what an assessee might have gained and what is not gained cannot be computed as gain and the assessee cannot fastened with the liability on a fictional income. Similarly, the Hon'ble Supreme Court in the case of CIT VS. Shivakami Co. (P) Ltd. (1986) 159 ITR 71 (SC) held that unless there is evidence that more than what was stated was received, no higher price can be taken to be the basis for making addition. In the present case, we do not find any material on record suggesting the payment of onmoney consideration at the time of purchase of land by the respondentassessee and its group companies. Therefore, it can be said that the Assessing Officer had failed to bring on record any reliable evidence to prove that the respondent assessee had made investment in purchase of lands over and above the stated consideratio....
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....ya marketing private limited which is been followed by the learned CIT - A has observed that no incriminating material is related to the case payment was found in the case of search action. He therefore referred that the para number 5.7 and 5.8 of the assessment order in the case of Thakker Grih Nirman private limited deserves to be considered. ii. The coordinate bench in case of Dhananjaya marketing private limited has held that no incriminating material was found and therefore the Section 132 (4A) is not applicable. The assessment order in case of these assessee is a completed u/s 153C and not 153A of the income tax act on the basis of the documents seized in the premises belonging to the seller, therefore the observations of the coordinate bench may not be applicable in the present appeal iii. the fact of the issue of land being offered to MIDC as been discussed in paragraph number 5.3 of the assessment order. iv. The coordinate bench has held that mere mention of letter "T" in the document does not indicate the name of the appellant (assessee) "Thakker" which is with respect to only one single document. He submitted that the learned assessing officer has scanned and repro....
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....dy been decided by the coordinate bench in the case of one of the co-owners on the same set off documents from same set off purchasers and on the same transaction, there is no reason for the Tribunal to take a different view in the case of this assessee. In this regard, he submitted that the issue is squarely covered in favour of the assessee. He therefore submitted that when the learned CIT - A has followed the order of the coordinate bench in case of another co-owner to decide the case in favour of the assessee, there is no infirmity in the order of the learned first appellate authority. 019. The learned authorised representative further filed a paper book containing 302 pages. He referred to the page number 264 of the paper book wherein the statement recorded u/s 132 (4) of Mr. fakruddin Kokani is placed. He referred to question number 12, question number 14 and submitted that in answer to both these questions there is no name or reference of the Thakkar group made by him. He further referred to page number 271 - 279 with the statement recorded u/s 131 of the same person along with two other persons on 13/12/2016 which is in cross examination of these parties in question number....
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....as well as Asian Food products Ltd. 023. In the end he submitted all the issues covered in the case of the appeal of the learned assessing officer have already been dealt with in case of two joint buyers of the land along with these assessee by the coordinate bench in case of the decision of Dhananjaya marketing private limited and Asian food products Ltd. As these two decisions have been followed by the learned CIT - A in deciding the appeal is in favour of the assessee, there is no infirmity in the order of the learned CIT appeal. 024. In the rejoinder, the learned departmental representative referred to the statement u/s 132 of the act of Mr. Aijaz Kutubdin Kokani dated 9/9/2015 wherein in answer to question number 10 years categorically stated that all the 13 members who are the owners of the land of Savargaon has received a total consideration of Rs. 33,600,000 in cash over and above the recorded land transaction. Therefore it was submitted that the statement u/s 132 four and preliminary statements recorded u/s 131 of the act are saying that the cheque in case was received from Tucker group of companies for sale of the above land. 025. We have carefully considered the rival....
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....lt with the seized material scanned at page number 27, 28, 29 and 30 of those assessment orders which are similar to the assessment order in case of all the assessees. Therefore, it cannot be said that the Co-ordinate bench did not consider the seized documents properly. 027. The coordinate bench also considered the statement recorded u/s 132 (4) of the act of the company family as well as the preliminary restatement recorded u/s 131 of the act. The coordinate bench in paragraph number 12 has dealt with such statement. In paragraph number 25 - 26 has considered the statement of the sellers as well as the statement of cross examination wherein all the buyers of confirmed that they have not received any own money consideration on the sale of land from Thakkar group. Further with respect to the disclosure made by them of additional income the affidavit is were filed which were considered in paragraph number 29 of the order that the same disclosure was made with an intention to buy peace and avoid further litigation and also denied the knowledge of receipt of the own money consideration is the subject transaction of sale of land to Thakkar group. It also dealt with in paragraph number....