TaxTMI 
TaxTMI 
2023 (9) TMI 1334
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....d. (3) The appellant craves leave to add, alter, amend any ground of appeal." 3. The Revenue has taken the following grounds of appeal:- "1. Whether the Ld. CIT(A) has erred in law and on facts in deleting the addition made by the assessee on account of unexplained investment of Rs. 2,51,95,680/- towards purchase of land without considering the facts of the case in totality. (2) Whether the Ld. CIT(A) has erred in law and on facts in not appreciating that the assessee has also purchased the parcels of land with survey numbers mentioned in the MOU between Shri Baldevbhai Patel and Shri Suryakantibhai Ambalal Patel, even though the same was not entered with the present assessee. (3) Whether the Ld. CIT(A) has failed to appreciate that there cannot be such a drastic drop in purchase price from Rs. 20,71,000/- as per MOU (even though it was entered with a different person) to purchase price of Rs. 1.40 lakhs as shown by the assessee for purchasing the same parcels of land which proves that cash transaction has taken place. (4) Whether the CIT(A) has erred in giving the finding that presumption arising out of search and seizure proceedings is to be used for limited purpose an....
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....gly, a sum of Rs. 2,51,95,680/- was added to the income of the assessee as his unexplained income by the Ld. Assessing Officer. 5. In appeal, Ld. CIT (Appeals) allowed the appeal of the assessee primarily on the ground that the entire assessment has been framed and the additions made in the name of the assessee on the basis of draft MOU. The Ld. CIT(Appeals) observed that from the contents of the MOU and the land purchased by the assessee (along with his family members), it is seen that only one plot of land, located at Survey No. 171 Paiki found mention in the aforesaid MOU. However, the other pieces / plots of land which were purchased by the assessee were not relating to the MOU relied upon by the AO. The Ld. CIT(Appeals) observed that out of 13.75 bighas purchased by the assessee, only 1.25 bighas was mentioned in the said MOU. Therefore, the Ld. CIT(Appeals) restricted the addition to only the plot of land measuring 1.25 bighas which was mentioned in the aforesaid MOU. However, with respect to the balance lands purchased by the assessee, Ld. CIT(Appeals) observed that the aforesaid pieces of plots of land were purchased by the assessee from third persons not forming part of t....
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....at there have been many registration happening in the area at same point in time at the rate on which appellant has purchased the land. A copy each of 7 registrations was placed on record wherein the detail culled out is as under: Moje, Lodra, Village Lodra Sr. No. Date Amount(Rs.) Sq. Mtr. Rate for bighas 212 10.05.10 139620/- 0.2327 142760 212 paiki 11.05.10 145680/- 0.2428 142683 214 29.02.10 182500/- 0.3642 119281 216/2/B 10.05.10 133500/- 0.2225 142689 218 pailki 04.06.10 160860/- 0.2681 142682/- 216/1 abcde 10.05.10 722340 0.12039 142754/- 216/2/9 10.05.10 127500/- 0.2125 142777/- 1612000 0.27467 139567 Avg. Per bighas The average recorded purchase price for above 7 plots of land purchased by other parties is at Rs. 1,39,5677- per bigha(Supra) against the average purchase price shown by the appellant is at Rs. 1,42,6207- per bigha. The appellant has purchased land/registered on 01.10.2010 and the time period is almost same as mentioned in the information for 7 plots above. Copy of 7 documents from registration office has been perused. The contention of the appellant is found correct on corroboration of information....
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....ed. The land purchased by the appellant as emanating from record is as under: From Baldevbhai Patel is = 1.25 bighas From Others = 12.50 bighas(approximately) In my opinion, it is not legally correct to extrapolate the computation for calculating the addition on the basis of facts-relating to 1.25 bighas to the total land 13.75 bighas purchased by the appellant as per Hon'ble Gujarat High Court(Supra). However, the fact remains that a copy of MOU has been part of seized material in the search action on Marwadi Group. Therefore, the plot of land which has been purchased from Shri Baldev A. Patel and has earlier been mentioned in the impugned MOU has to be considered for addition in this case. Therefore, the addition being confirmed is computed as under: Area corroborating with MOU Rate (per bigha) at which addition has been made in assessment order The purchase estimated price 1.25 bighas Rs.20,71,000/- Rs.25,88,750/- The cost proportionately as computed by AO is arrived at Rs. 3,39,136/- and the same has to be deducted from Rs. 25,88,750/-. As per this computation, the addition of Rs. 22,49,614/- is hereby confirmed in this case. The appellant gets relief of....
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....Appeals) has clearly observed that the assessee has not filed any application for admission of additional evidence (refer page 13 of the CIT order). However, while allowing the appeal of the assessee and granting substantial relief to the assessee, Ld. CIT(Appeals) relied on certain data / information which was furnished by the assessee for the first time during the course of appellate proceedings. However, while deciding the matter, the information / data on which reliance was placed by the assessee during the course of appellate proceedings was never placed before the Assessing Officer for his consideration. The Ld. DR submitted that Ld. CIT(Appeals) gave substantial relief to the assessee only on the basis of submission of the assessee that out of 13.75 bighas purchased by the assessee, only 1.25 bighas was relevant to the MOU, which formed the basis of which the additions by the Ld. Assessing Officer. However, it was submitted that while deleting the additions with respect to 12.5 bighas (13.75 bighas less 1.25 bighas), the Ld. Assessing Officer was never confronted with this information for his remarks / observations and Ld. CIT(Appeals) gave substantial relief to the assessee....
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....rt observed that the Court has only to see whether there was prima-facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. On the scope of re-opening under Section 147 of the Act observed as under: "We have only to see whether there was prima-facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs.....
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....n Snehalbhai Panchhigar [2019] 101 taxmann.com 393 (Gujarat), the Gujarat High Court held that in the instant case the Assessing Officer has heard the material on record which would prima- facie suggest that the assessee had sold number of shares of a company which was found to be indulging in providing bogus claim of longterm and short-term capital gain. The company was prima-facie found to be a shell company. The assessee had claimed exemption of long-term capital gain of Rs. 1.33 crores by way of sale of share of such company. 16. This was again affirmed by the Gujarat High Court in the case of Sanjay Baulal Surana [2021] 129 taxmann.com 375 (Gujarat). 17. Accordingly, in our view, the AO had sufficient material to form a prima facie belief that the assessee had made cash payments for purchase of aforesaid properties, thereby leading to escapement of income. Therefore, we find no infirmity in the order of Ld. CIT(Appeals) when he held that issuance of notice under Section 147 of the Act was valid in the instant set of facts. Violation of Rule 46 of the Income Tax Rules 18. Now we shall come to the allegation of Department that there was violation of Rule 46A of the Income T....
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....ations: "8. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The first legal issue that needs to be resolved in the given facts and circumstances of the case is whether the AO is right in estimation of sales revenue from sale of plots by extrapolating sale price of few plots to remaining plots sold during the relevant period to other parties. It is a well settled principle of law by the decision of various Courts that there is no scope for the AO to extrapolate and estimate undisclosed income for block assessment proceedings. This legal principle is supported by the decision of the Hon'ble Bombay High Court in the case of M/s.Harish Textile Engrs. Ltd v. DCIT, reported in 379 ITR 160, wherein, it has been clearly held that on-money received on sale of Stenter Machines for the block period, cannot be estimated on the basis of evidences filed for few instances. A similar view had been taken by the Hon'ble Gujrat High Court in the case of M/s.Standard Tea Processing Co. Ltd., reported in 215 Taxman 659. The Hon'ble Karnataka High Court in the case of B. Nagendra Baliga, reported in 363 ITR 410, had also consi....
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.... be materialised and sum paid by assessee was returned back to him by broker. The Assessing Officer relying on statement of said broker, held that cash paid by him to assessee towards cancellation of said deal was unaccounted income of assessee. The Tribunal noticed that with respect to co-purchaser for very transaction, co-ordinate Bench had deleted similar addition on same facts. The High Court held that since order passed by Tribunal in respect of co-purchaser deleting the addition came to be confirmed by High Court, Tribunal was justified in deleting said addition. 24. Accordingly, in the instant facts we observe that Ld. CIT(Appeals) while allowing the assessee's appeal observed that no additions have been made by the Assessing Officer in the case of the other family members, who were the joint holders in the aforesaid property. We observe that in the instant facts the additions were made only on the basis of MOU entered between third parties and there was no mention of the assessee's name in the MOU. Further, the aforesaid MOU on the basis of which additions were made by the Assessing Officer had also been subsequently cancelled and was not acted upon. Therefore, in view of ....