TaxTMI 
TaxTMI 
2009 (4) TMI 21
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....itioner was permitted to convert the petition into Tax Appeal and permission was also granted to propose substantial questions of law stated to be involved in the case. 2. Accordingly, the Appellant herein, proposed 22 questions and the respondent herein also proposed two counter questions. Accordingly, vide order dated 10.05.1999 the Appeal was admitted on following 22 substantial questions of law formulated by the High Court as framed by the Appellant. The High Court also formulated two additional questions as suggested by the respondent by the same order : "1. Whether the findings of the Tribunal that there was no material brought on record to show that the assessee would not have included the undisclosed income in the Return for regular assessment is perverse in as much as the assessee has itself admitted that such undisclosed income had not been recorded in the books of accounts and such income had also not been included in the accounts as reflected in the annual reports for the relevant Financial Years which had been produced by the assessee? 2. Whether Chapter XIV-B of the Act prescribing special procedure for assessment of search cases contemplates setting off of l....
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.... the bare, unsupported assertion by the assessee of having undisclosed receipts of Rs.12,80,000/- wholly ignoring the finding of the assessing officer based on relevant oral and documentary evidence that the assessee had received a sum of Rs.19,00,000/- as on-money for sale/allotment of 5,68,000 sq.yd. of land? 10. Whether the finding of the Tribunal that the assessee had taken possession of only 7,50,000 sq.yd. of land and not 11,11,000 sq.yd. as determined in the assessment order, based solely on a Photostat copy of an alleged development agreement dated 16.3.1995 which the assessee itself through Shri Ashish Patel, the Managing Director of assessee-company, admitted had not been executed in the statement dated 14.3.96, was a finding based on inadmissible evidence and contrary to the oral and documentary evidence on record which indicated that the assessee had made payment for all the three sectors aggregating to 11,11,000 sq. yds. of land? 11. Whether merely recording of receipts of Rs.99,35,200/- and Rs.4,00,000/- in the books of account of the assessee would necessarily exclude it from the purview of undisclosed income12 though such receipts could not be substantiated as....
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....the case of Shri Manoj Vadodaria where the testimony of Shri Ashish Patel was held unreliable and therefore, perverse. 21. Without prejudice to the above, whether the Tribunal has not committed a gross error in law in the allowance of deduction of payment of Rs.12.80 crores made by the company in cash to an unidentifiable and unverifiable person in gross violation of the provisions of Section 40A (3). 22. Whether the Tribunal was justified in deciding the issues respecting additions of Rs.4.51 crores, Rs.1.50 crores and Rs.70 lakhs in the hands of the company 1818 without having first decided these issues in the hands of Shri Ashish Patel as these additions in the case of assessee-company were only of consequential nature." Following two additional questions have been suggested by learned counsel for the respondents: "1.Whether the Tribunal is justified in not deciding the contention of t18he respondent that payment made for development rights acquired was not an investment made by the respondent nor an expenditure incurred by the respondent as the same was sourced from collection made from members and hence not income of the respondent. 2. Whether payments mad....
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.... Rs.4.00 lacs made by the Assessing Officer as unexplained credits u/s. 68 of the Act? 5. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in deleting additions of Rs.1.5 crores, Rs.70 lacs and Rs.4.51 crores ? 5. In relation to the first addition, it is the case of the Assessing Officer, that the assessee Company had made an unexplained investment for acquiring land located in Shela village and described as Radhe Acre 1 and Radhe Acre 2. That the assessee had entered into a transaction involving total land area to the tune of 11 lacs sq.yds. and this was on the basis of loose papers file 'A-3', more particularly page No.103 of the said file, which was found from the residence of Shri Arun B. Shah, the employee of respondent Company. According to the Assessing Officer, the claim made by the assessee that in fact the transaction had taken place only as regards 7 lacs sq.yds. of land and not the entire 11 lacs sq.yds. of land, was not accepted because of seized documents. The Assessing Officer also disbelieved the statement of Shri Ashish Patel wherein it was stated that only 7 lacs sq.yds. of land had been acquired by way of development ....
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....ded on an erroneous presumption and thus the order was vitiated. On merits it was submitted that the Assessing Officer had given cogent reasons for working out the addition of undisclosed receipt at a sum of Rs.20,00,00,000/- and odd but the Tribunal had restricted the same to a figure of Rs.12,80,00,000/- without assigning any reasons for reducing the said figure. It was further pointed out that the Tribunal had taken note of the statement made by Shri Ashish Patel but not correctly appreciated the same in as much as it was an accepted position that payment of Rupees Eight Crores and Rupees Seven and half Crores for sector No.1 and sector No.2 were respectively made for acquiring development rights but the Tribunal had restricted the said figure at a sum of Rs. 12,80,00,000/- and thus the order of Tribunal was not only bad in law but perverse as being divorced from facts. 7.1 In relation to the addition made and sustained by the Tribunal u/s. 69C of the Act, it was contended that the case of Revenue was only under provisions of Section 69B of the Act and there was no question of any unexplained expenditure having been incurred which was to be added back. The Tribunal had failed....
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....paper file Annexure A-1 which was seized from residence of Shri Ashish Patel contained parallel balancesheet as could be seen from page Nos. 1 and 18 of the said file and the said pages contained following three references: (a) Manoj 1,50,000.00 (b) Shikhar 70,000.00 (c) 154 4,51,000.00 That the aforesaid amounts had been added by the Assessing Officer after recording statement of Shri Ashish Patel and thus was required to be retained, the Tribunal having wrongly deleted the same. 8. The learned Senior Advocate appearing on behalf of the respondent-assessee at the outset submitted that all the issues raised in the Appeal were based on facts and appreciation of evidence on record and the impugned order of Tribunal did not give rise to any substantial questions of law. It was submitted that in so far as the principal addition is concerned, the Tribunal has found as a matter of fact that the assessee Company had received booking amount of Rs.12,80,00,000/- which was accepted by Shri Ashish Patel in his statement and offered for taxation. That there was no basis to enhance the said figure in absence of any corelation with the seized material to indicate any such enhanced....
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....d found as a matter of fact that the same were based on entries recorded in Regular Books of Account and thus were outside the scope of special provisions for assessment of block period and had to be considered only in regular assessment as held by this High Court in the case of N.R.Paper And Board Ltd. and Ors. Vs. Deputy Commissioner of Income Tax, (1998) 234 ITR 733. 8.3 Similarly, in relation to the remaining three additions of Rs. 1,50,00,000/-, Rs.70,00,000/- and Rs.51,00,00,000/-, it was submitted that Tribunal had found, after appreciation of evidence on record, that the explanation of the assessee that these were mere projected budgetary figures and were not reflecting actual transactions and thus no addition was warranted. That this was a pure finding of fact and was not required to be interfered with. 9. In rejoinder, learned Senior Standing Counsel for Appellant-Revenue referred to a decision of this Court in the case of Gautam Harilal Gotecha Vs. Dy. CIT (Investigation), (2006) 281 ITR 283, to submit that the Tribunal being final fact finding authority the impugned order had to be reasoned and speaking order and if there were apparent contradictions the same woul....
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....r : Shelani tamam 11,11,000 vaar jaminno bhav rupaya dho so chhabis choras vaarno raheshe. Koyie bhav vadharo nahi . On a plain reading of the aforesaid extract, the only thing that transpires is that, the entire 11,11,000 sq.yds. of Shela land is contracted to be transacted @ Rs.226/- per sq.yd. and nobody will be entitled to raise the price. Thereafter, as recorded by the Assessing Officer, other terms and conditions of the agreement between the parties have been recorded. It is not in dispute that the agreement contemplates handing over the possession of land falling in sector 3 only after the transaction relatable to land falling in sector Nos. 1 and 2 is complete. It is not even case of the revenue that there is any evidence to disprove the statement made by Shri Ashish Patel and the assessee Company that possession of land falling in sector No.3 was not handed over. The only basis of the Assessing Officer to compute the price is the entry made in regular Books of Account regarding payment to M/s. Shantinagar Shela Cooperative Housing Society @ Rs.40/- per sq.yd. and the inference drawn by the Assessing Officer by adopting said rate as multiplier in relation to the....
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.... The Revenue does not dispute the fact of acquisition of development rights. It is not the case of the Revenue that the said development rights were gifted by the Cooperative Society to the assessee. In the circumstances, if the Tribunal has stated that the amount of payment towards acquisition of development rights has to be deducted even if provisions of section 69C of the Act are attracted, no infirmity can be found in the order of the Tribunal. Admittedly, Proviso inserted below section 69C of the Act has been made effective from 1.4.1999 as inserted by the Finance (No.2) Act, 1998. 15. The decisions of this Court in the case of Fakir Mohmed Haji Hasan (supra) and Krishna Textiles (supra) are neither relevant nor germane to the issue considering the fact that in none of the decisions the Legislative Scheme emanating from conjoint reading of provisions of sections 14 & 56 of the Act have been considered. The Apex Court in the case of D.P.Sandu Bros.Chembur P. Ltd.,(supra) has dealt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the Apex Court commencing from case of United Commercial Bank ....