AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 1168
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....Ld. DR does not have any objection, if the assessee does not press his appeal in ITA No.110/SRT/2021, therefore, we dismiss the assessee's appeal. 3. In the result, appeal filed by the assessee (in ITA No.110/SRT/2021), is dismissed. 4. Now, we shall take Revenue`s appeal in ITA No.195/SRT/2021, for AY.2017-18, wherein the Grounds of appeal raised by the Revenue are as follows: "1. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.41,67,45,000/- without appreciating the fact the addition was made on the basis incriminating documents, showing unaccounted land transactions carried out by the assessee, found and seized during the course of search proceedings. 2. 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 an evidentiary value and the person from whom the same was found and seized has admitted that the same was fou....
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....ssessment order. 7. On the facts and circumstance of the case and in law, the ld. CIT(A) has erred in not appreciating the fact that one of the co-owners of the property has admitted that he has sold his share of land to Shri Vasantrai A Modi for a consideration of Rs.85,00,000/- even though 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 laud transactions in real estate business are taking place on the basis of 'Saudha Chitthi' 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. 8. 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(1)(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 subseq....
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.... the Dy. Mamlatdar, City Taluka, Surat to ascertain present status of land situated at Survey No. 203, Khajod, Surat, the ITO(Inv.), Surat found that the land is standing in the name of Apurva Vikrambhai Pal HUF, Shri Pravin Dahyabhai Umrigar and Shri Prabodhchandra Jayantilal Patel. The statement of the assessee was recorded on oath u/s. 131 of the Act on 10.12.2018. The Assessing Officer held that the assessee, Shri Jayantibhai Babariya is buyer of the land under consideration, as Shri Manoj C. Patel stated to have received this sauda chithi on whatsapp from the assessee. Accordingly, the Assessing Officer considered Rs.83,34,90,000/- as unaccounted investment of the assessee in the above mentioned land and out of same, Rs.41,67,45,000/- i.e. 50% added in the A.Y.2017-18 and remaining amount of Rs.41,67,45,000/- stated to be pertained to the AY.2018-19. With these facts, the Assessing Officer issued show cause notice dated 11.12.2018 to the assessee that why Rs.41,67,45,000/- should not be considered as unaccounted investment for the A.Y. 2017-18. The assessee filed reply vide letter dated 14.12.2018 in response to the above mentioned show cause notice, which was not found satisf....
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....er, the statement recorded during the assessment & search proceedings, the report of District Valuation Officer and the assessment order for A.Y. 2018-19 made by the Assessing have been carefully gone through. It is undisputed fact that additions have beenb made by the Assessing Officer on the basis of sauda chithi found during the course of search on 18.03.2017 at the premises of M/s. Hallmark Tour after taking mirror images of Samsung mobile phone of Shri Manoj C. Patel. This mirror image was taken after few months of search and statement of Shri Manoj C. Patel was recorded on this issue first time on 28.06.2017. In the statement, Shri Manoj G. Patel stated that the said sauda chithi has been sent to him on whatsapp by Shri Jayantibhai Babariya of Avadh Group i.e. assessee. In the above sauda chjthi, signature of buyers & sellers are there but these are not legible and from the sauda chithi itself, it cannot be ascertained that who is the buyer and who is the seller of land. Therefore, the Assessing Officer made enquiries from Dy. Mamlatdar Officer, Surat about the ownership of land i.e. plot no. 203 Khajod, Surat and found that land is in the name of these persons namely Apurva ....
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.... 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 & 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 l/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. He also stated that he has agreed to sale his 96% of share in the land to Shri Puranbhai Chandwani & Shri Shankerbhai Uttamani and Others but transactions has not yet completed, as the land could not be converted in to N.A. The advance received by him from the proposed buyers is reflected in the regular books of accounts. 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 & seized, filed retraction on....
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....pleads that decision of the Ld. C.I.T.(A), is not acceptable as in the assessment order, the AO has very well rebutted the points raised by the assessee during the assessment proceedings. The AO in the assessment order has also mentioned in para 6(ii) of the assessment order that Shri Manoj C Patel stated that the transaction was undertaken by Shri Jayantibhai Babariya in the land under consideration. Merely because the sauda chitthi does not contain the name of the assessee nor having signature and it is not written in hand writing of the assessee, the document cannot be treated as dumb. Further, at the time of cross examination, Shri Manoj C Patel and Shri Jayantibhai Babariya appeared before the assessing officer and this finding has been incorporated by the AO in para 6(iii) of the assessment order. So the contention of the assessee that the opportunity to cross examine was not given is not tenable. There are ample other facts on record which indicate that there is involved on the unrecorded investment made by the assessee. During the course of search and post search various enquiries made and statements recorded of various sellers / buyers of the property. Had it been the dumb....
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....ri Manoj C. Papel. The said 'sauda chithi' does not contain the name of the assessee. We note that Shri Manoj C. Patel did not say that said 'sauda chithi' pertains to assessee. No opportunity for cross examination of Shri Manoj C. Patel was provided to the assessee. Therefore, we are of the view that said 'sauda chithi' is not a relevant document to fasten the tax liability on the assessee and to collect tax from the assessee. 15. We note that capital gain arises in the hands of assessee, provided there is transfer of capital asset during the previous year relevant to assessment year under consideration, that is, assessment year 2017-18. During the assessment year 2017-18, the assessee was owner of land, it was not sold. That is, the land has not been transferred to any one by registering the sale deed and it is in the name of the assessee and other two co-owners which is seen even from the report of DVO submitted on 29.12.2018. These facts prove that the transfer of the land under consideration has not taken place, as no sale deed has been registered. The possession of the land is also with the assessee, hence it is not a case of part performance as covered by section 53....
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.... total value of the land under consideration has been determined at Rs.6,57,36,000/- and the assessee's share i.e. 1/3rd in the above mentioned property was determined by the DVO at Rs.2,19,12,000/-. The Assessing Officer while passing the assessment order of the assessee for A.Y.2018-19, immediate subsequent year vide order dated 07.05.2021, has accepted the value determined by the DVO and made the additions of Rs.1,07,19,318/- only i.e. 50% in the assessment order instead of Rs.13,86,85,279/- as made for the year consideration. This addition was after allowing cost of acquisition and indexation. From these facts, it is clear that Assessing Officer himself has accepted the valuation report which determined value of the total land at Rs.6,57,36,000/- instead of Rs.83,34,90,000/-. The assessee's 1/3rd share has been accepted by the Assessing Officer A.Y.2018-19 at Rs.2,19,12,000/- instead of Rs.27,78,30,000/- while passing the assessment order for assessment year 2018-19. The ld Counsel pleaded that the 'sauda chithi' has been found from the possession of a third party i.e. Shri Manoj C. Patel, who did not say that the said seized 'sauda chithi' pertains to the assessee and ....
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.... and also by the Assessing Officer, was requested from the Assessing Officer. However, the same has been denied by the Assessing Officer stating that the request for cross-examination has been submitted at the flag end of the year. The assessee stated that the assessment under consideration was not getting barred by limitation of time on 31st December, 2018 and the Assessing Officer had one more year to complete the assessment u/s 143(3) of the Act. Therefore, the contention of the Assessing Officer that request has been submitted at the flag end of the year is factually incorrect. Thus, we note that assessee has requested for cross examination of Shri Manoj C. Patel and Shri Jayantibhai Babariya as mentioned in the para 8.9 of the assessment order, that is, Statement of these two persons were recorded by the Authorized Officer and the Assessing Officer, during the course of search and during the course of assessment proceedings respectively. The Assessing Officer has relied upon the statement of Shri Manoj C. Patel for making these additions. However, the opportunity of cross examination was not provided by stating that it has been submitted at the fag end of the year. It is settl....
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.... at the premises of M/s, Hallmark Tour after taking mirror images of Samsung mobile phone of Shri Manoj C. Patel. This mirror image was taken after few months of search and statement of Shri Manoj C. Patel was recorded on this issue first time on 28.06.2017. In the statement, Shri Manoj C, Patel stated that the said 'sauda chithi' has been sent to him on whatsapp by one Shri Jayantibhai Babariya of Avadh Group. In the above 'sauda chithi', signature of buyers and sellers are there but these are not legible and from the 'sauda chithi' itself, it cannot be ascertained that who is the buyer and who is the seller of land. Therefore, the Assessing Officer made enquiries from Dy. Marnlatdar Officer, Surat about the ownership of land i.e. plot no. 203 Khajod, Surat and found that land is in the name of the assessee and two other persons namely Apurva Vikrambhai Pal HUF and Pravinchandra Dahyabhai Umrigar. The assessee has 1/3rd share in the above mentioned land. Shri Manoj C. Patel also did not mention the name of the assessee, while recording his statement u/s 132(4) of the Act on 28.06.2017. These facts clearly shows that the 'sauda chithi' which has been made the basis for these additi....
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....of Hon'ble Supreme Court of India in the case of Common Cause (A Registered Society) & Others Vs. Union of India & Others (2017) 98 CCH 0028 (SC) and CBI Vs. V.C. Shiukla AIR 1998 SC 1406. As the additions has been made by the Assessing Officer on the basis of dumb documents, these additions deserves to be deleted. 20. The ld CIT(A) observed that land has not been transferred to any one by registering the sale deed and it is in the name of the assessee and other two coowners which is seen even from the report of DVO submitted on 29.12.2018. These facts prove that the transfer of the land under consideration has not taken place, as sale deed has not been registered and as per the binding judgment of Hon'ble High Court of Gujarat in the case of CIT vs. Ashaland Corporation (1992) 133 ITR 55 (Guj.) in which it has been held that the transfer of the immovable property take place on the date, sale deed is registered. The assessee's case is further found covered by the judgment of Hon'ble Supreme Court of India in the case Alapati Venkatararniah vs. CIT (1965) 57 ITR 185 (SC), in which it has been held that title to immovable assets could not pass till conveyance was....