AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1479
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....for assessment year 2017-18 in the case of Shri Prabodhchandra Jayantilal Patel, have been taken into consideration for deciding the above appeals en masse. 3. The grounds of appeal raised by the Revenue, in lead case in ITA No.137/SRT/2021, for AY.2017-18, are as follows: "(i) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 13,86,85,279/- without appreciating the fact the addition was made on the basis of incriminating documents, showing unaccounted land transactions carried out by the assessee, found and seized during the course of search proceedings. (ii) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in treating the incriminating documents in the form of duly written and signed "Saudha Chithi" found and seized during the course of search and seizure action carried out by the Department as dumb documents without appreciating the fact that the same carries a solid and complete evidentiary value and the person from whom the same was found and seized has admitted that it was found from his possession in the statement recorded on oath and the contents therein were also....
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....hrough the property was standing in the name of the assessee himself in the revenue records and no registered Sale Deed has been even executed which shows that the land transactions in real estate business are taking place on the basis of "Saudhi Chitti" and hence, the observation of the Ld.CIT(A) that the land in question has not been transferred to purchaser has no merit at all. (vii) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not exercising the powers conferred on him as per the provisions of section 251(l)(a) and (aa) and Explanation thereof to strengthen the addition made by the Assessing Officer on the basis of clinching evidences found and seized during the course of search proceedings and thereby erred in placing heavy reliance on the Valuation Report of the DVO prepared on mere estimates and assessment order passed for the subsequent year by a lower authority." 4. The above grounds raised by the Revenue relate to addition of Rs.13,86,85,279/- based on "Saudha Chitthi". 5. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us is an Individual and filed his return o....
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....remaining amount of Rs.13,89,15,000/- stated to be pertained to the A.Y.2018-19. Net additions of Rs.l3,86,85,279/- were made after allowing cost of acquisition and indexation. With these facts, the Assessing Officer issued show cause notice to the assessee that why Rs.13,89,15,000/- should not be considered as unaccounted income for the A.Y. 2017-18. 7. In response, the assessee submitted that he has not sold the land. The land is still in the name of the assessee. On saudha chithi, the Purchasers and Sellers are not identified. No registration of land had took place. The submission of the assessee has been reproduced by the Assessing Officer on page no. 3 to 16 of the assessment order. 8. However, assessing officer rejected the contention of the assessee and observed that it is not necessary in the land transaction that the property is transferred to the other party and transactions are carried out by the parties other than the seller and buyer in between and sale deed is made by the sellers in the name of last buyer. The in between people, involved in such transactions are either become confirmed party or their name are not mentioned in the sale deed at all. Thus, the inco....
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....at said seized 'sauda chithi' does not pertain to the assesseee. The assessing officer made addition based on the said 'sauda chithi' which was found from third party, Shri Manoj C. Papel. Shri Manoj C. Patel did not say that said 'sauda chithi' pertains to assessee, therefore the presumptions on the basis of unnamed 'sauda chithi' found from third persons u/s 132(4)/292(C) is not available against the assessee. Thus, ld Counsel argued that 'sauda chithi' is a dumb document, as far as the assessee is concerned, hence, the addition cannot be made on the basis of such dumb documents. 12. The ld Counsel further stated that assessee`s matter was referred to the DVO by the Assessing Officer vide letter dated 24.12.2018 and the DVO submitted report on 29.12.2018, which was received by the Assessing Officer on 31.12.2019, wherein the DVO has valued the property at Rs.6,57,36,000/- instead of Rs.83,34,90,000/-. Accordingly, the assessee's l/3rd share comes to Rs.2,19,12,000/- ( one third of Rs.6,57,36,000). The Assessing Officer has passed the assessment order for assessment year 2018-19 in the case of the assessee, vide order dated 18.05.2021 and the valuation made by the DVO has b....
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....ut 12 times higher than the value determined by the DVO, which prove that the contents of the said 'sauda chithi' are not reliable. On this basis too the additions made by the Assessing Officer are found unjustified. 14. We note that there are three components of a taxing statute, viz., subject of the tax, person liable to pay the tax and the rate at which the tax is levied (State of Kerala v. Alex George (2005) 1 SCC 299 p. 306). If there be any real ambiguity in respect of any of these components which is not removable by reasonable construction, there would be no tax in law till the defect is removed by the legislature (Mathuram Agarwal v. State of Madhya Pradesh AIR 2000 SC 109).In terms of Article 265 of Constitution of India, all Acts relating to the imposition of tax providing, inter alia for the point at which the tax is to be collected, the rate of tax as also the recovery must be carried out in accordance with law (Corporation Bank v. Saraswati Abharansala (2009) 1 SCC 540 15). If a tax has been paid in excess of the tax specified, save and except the cases involving the principle of 'unjust enrichment', the excess tax realized must be refunded to the assessee. The ....
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.... tax Act, are subordinate to the Constitution and must be read and interpreted in the light of the constitutional provisions. (CIT v Tlarijan Nigam 226 ITR 696.) In India Cements Ltd v State of Tamil Nadu, 188 ITR 690, 699 (SC), a seven-judge Bench of the Hon`ble Supreme Court observed that the Constitution is the mechanism under which the laws are to be made. One of the most important provisions of the Constitution relating to taxation is Article 265, which provides: "No tax shall be levied or collected except by authority of law". Therefore, not only the levy but also the collection of a tax must be under the authority of some law. We note that section 2(47) of the Act defines 'transfer' in relation to a capital asset, which includes: sale, exchange, relinquishment, extinguishment, compulsory acquisition etc. In assessee`s case, the assessee is owner of the asset in the assessment year 2017-18, he did not sale his asset (land), hence, the Revenue does not have authority to collect the capital gain tax from the assessee. 16. At the cost of repetition we state that during the assessment proceedings, the Assessing Officer referred the matter to District Valuation Officer (DVO) to....
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....'sauda chithi' on whatsapp to Shri Manoj C. Patel that the seized 'sauda chithi' pertains to the assessee. There is no evidence of receipts of any money by the assessee. The assessee also contended that sale of the land under consideration has not been made, because, as on date the said agriculture land still stands registered in the assessee's name with other two co-owners and the possession also rests with the assessee, which prove that the transfer has not been taken place. Thus, there is no question of earning any undisclosed capital gain. In support of all these contentions, the ld Counsel cited several case laws of Higher Judicial Authorities in which it has been held that additions on the basis of documents found at third party premises cannot be sustained only on the basis of surmises and conjectures. The assessee further contended that the additions were made by the Assessing Officer before receipt of valuation report from the DVO. The DVO submitted his report on 29.12.2018, which was received by the Assessing Officer on 31.12.2019 and in the above mentioned valuation report, the DVO has valued the price of land at Rs.6,57,36,000/- instead of Rs.83,34,90,000/- as writt....
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....er is a serious flaw which makes the order nullity. We note that same view was expressed by the Hon`ble Calcutta High Court in the case of Eastern Commercial Enterprises 210 ITR 103 (Cal), wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on notice of the case made out against him. Therefore, the addition made by the assessing officer based on the statement of Shri Manoj C. Patel, is not sustainable in law, as the assessing officer did not provide an opportunity to the assessee to cross examine the statement of Shri Manoj C. Patel, therefore addition made by the assessing officer has rightly been deleted by ld CIT(A). Keeping-in view these binding judgments of the Hon'ble Supreme Court of India, the additions made by the Assessing Officer are not found justified on this ground too hence, we are of the view that ld CIT(A) has rightly deleted the addition. 18. The ld Counsel further contended that the additions has been made by the Assessing Officer in the A.Y. 2017-18 however, the land has not been sold till date as stated ab....
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....wnership in the land mentioned in the 'sauda chithi'. Shri Pravainchandra Dahyabhai Umrigar, further stated that he has not entered into any transactions as written in the said 'sauda chithi'. Statement of the assessee was also recorded u/s 131 of the Act by the Assessing Officer on 14.12.2018, in which he stated that he has not sold his share in the land written in the said 'sauda chithi' to anyone and did not receive any amount as mentioned in the 'sauda chithi'. He stated that he is seeing the sauda chithi first time and he does not know who has signed the said 'sauda chithi'. Statement of Shri Apurva Vikrambhai Pal, other co-owner was also recorded by the Assessing Officer on 14.12.2018 u/s 131 of the Act, who confirmed the 1/3rd ownership in the land written in the 'sauda chithi', but he stated that he is seeing this 'sauda chithi' first time and totally unaware about the other details written on the said 'sauda chithi'. Apart from these statement recorded by the Assessing Officer of all the related parties, Shri Manoj C. Patel from whose possession, the said 'sauda chithi' was found and seized, filed retraction on 13.12.2018 before the Assessing Officer which is notarized and....