TaxTMI 
TaxTMI 
2023 (11) TMI 740
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.... are directed against the orders all dated 29.01.2021 (except ITA No.66/Rjt/2021 dated 08.02.2021) passed by the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad (in short 'CIT(A)') arising out of the orders all dated 10.12.2019 (except in ITA No.35/Rjt/2021 dated 30.12.2019 & in ITA No.35/Rjt/2021 dated 20.12.2019) passed by the DCIT/ACIT,CIR 1(1), Rajkot under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961, (hereinafter referred to as 'the Act') in all the appeals (except 144 r.w.s. 147 of the Act in ITA No.35/Rjt/2021)for Assessment Year 2012-13. 2. The brief facts leading to this case it this that a survey was carried out at the premises of M/s. Raghuvir Group by the Investigation Wing, Vadodara on 27.12.2018. During the course of survey proceeding, certain documents were found and impounded from the said office premises at Ahmedabad out of with Annexure A1 Page 1 to 139 relates to land deal. The land in question was lying and situated at Village Yashwantpur,Taluka Lodhika in the District of Rajkot; the agreement for sale in respect of the above land measuring about 18 acre 17 guntha was part of the said Annexure A1, Page 55 to 60 therein. From the said agreemen....
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....nveyance subjected to the addition either substantive basis or protective basis. Challenges were made against such additions by these assessees. 5. In regard to Shri Mualesh D. Ukani and Shri Bhupendra T. Panchani, whose status as have been mentioned as seller instead of purchaser of land challenged the reopening under Section 147 of the Act on the premises of factually incorrect recording of reason. 6. Similarly in case of ITA No.24/Rjt/2021 Smt. Dimpleben Smitkumar Kaneria who was neither the party to the Memorandum of Understanding or Sale Deed nor Director in Kalptaru challenged the re-assessment proceeding. In ITA No.35/Rjt/2021; Smitkumar P. Kaneria, the husband of Smt. Dimpleben Smitkumar Kaneria, was neither a party to the Memorandum of Understanding nor of the Sale Deed. He who was also not a director on the date of Memorandum of Understanding challenged the re-assessment proceeding. 7. In ITA Nos. 37/Rjt/2021 (Shri Bhovan P. Rangani), 23/Rjt/2021 (Shri Bhupendra T. Panchani) & 42/Rjt/2021 (Shri Kishorbhai V. Viramgama) challenged the re-assessment proceedings as there was no unrecorded investment in land particularly when the cheques amounts were not in their boo....
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....nv)-I/Dissemination Raghuvir/Farm issue/2018-19, dated 16- 03-2019. From the perusal of details, it is ascertained that there was a survey in the case of M/s. RaghuvirBuildconPvt. Ltd. During the course of survey various incriminating documents have been found which pertains to sale of farmhouse at Village Yashvantpur, TalukaLodhika, Dist. Rajkot for a consideration of Rs. 38 crores by Raghuvir Group to Rajkot based businessmen. The assessee BhavnabenBhovanbhaiRangani, is one of the persons (purchaser) who involved in said transactions. The agreement of sale was signed by Mahendrabhai K Faldu, Mansukhbhai M Sureja (Patel) and AmitChauhan. As per the agreement the buyers are stated as - ShriMahendrabhai K Faldu, ShriMauleshbhai D Ukani, ShriAmit A Chauhan, Shri M.M Patel, Shri PraveenbhaiPipaliya and the directors of Rajkot based M/s Kalptaru Leisure Pvt Ltd. The farm house is purchased to construct a club under aegis of M/s Club Privilege Pvt Ltd. The actual sale deeds are executed by the wives/relatives/friends of the directors of the M/s Club Privilege Pvt Ltd. The assessee is wife of director, ShriBhovanParshottamRanganiof M/s Club Privilege Pvt Ltd., who is the actual purchaser....
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.... of the assessee for AY 2012-13 needs to be re- opened within the meaning of section 147 of the IT. Act. I have therefore reason to believe that income to the extent of Rs. 2.45,25,729/- has escaped assessment. It is, therefore, requested that necessary approval may kindly be accorded for issuing notice u/s. 148 of the LT, Act in this case. 7. Seventh paragraph will include escapement of income chargeable to tax in relation to any assets(including financial interest in any entity) located outside India: Not Applicable. 8. Applicability of provisions of section 147/151 to the facts of the case: In this case return of income was filed for the year under consideration so also Scrutiny assessment u/s 143(3) of the Act was made, where in the income returned by the assessee was accepted. The case of the assessee was assessed keeping in view the reason of selection and details were called for accordingly. Since 4 years from the end of the relevant assessment year has expired in this case, the requirements to initiate proceedings u/s. 147 of the Act are reason to believe that income for the year under consideration has escaped assessment because of failu....
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.... In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s. 148 is required to be obtained from Principal Commissioner of Income Tax, Rajkot-1. Rajkot as per the Provisions of section 151 of the Act." 12. The assessee replied as follows: "With reference to the above your honour has provided the reasons for reopening of assessment for AY 2012-13, Ongoing through the reason recorded, it is found that your notice is technically and factually erroneous and bad in law. Under instructions from our above named client we are submit herewith the following few lines for your honour's kind and sympathetically consideration; Our above named client is assessed to Income tax since long and regularly filed the Return of Income without any default. Our above named client's main source of income is share profit from firm, Income from House Property and interest income from Bank. Our above named client is surprised to receive the notice u/s 148 of the IT Act. In response to the notice u/s 148 of the IT Act our above named client has filed the return of income. Our above named clien....
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....13 2 Lodhika /3789 /2012 08.08.2012 Jalamsinh Baluji Barad 82, 20, 231 / - 2-52-93 2012-13 3 Lodhika / 0974/2012 29.02.2012 Anirudhsinh Jalamsingh Barad 38,47,030/- 1-18-37 2011-12 4 Lodhika/ 2055/2012 13.04.2012 Prashantsinh Jalamsinh Barad 40,11,485/- 1-23-43 2012-13 5 Lodhika/0973/2012 29.02.2012 Janakba Jalamsinh Barad 40,11,485/- 1-23-43 2011-12 Total 2,41,01,716/- The details of purchasers and their ratio of ownership of the land are as below: Sr. No. Name of Purchasers % Share 1 Joliben Mahendrakumar Fadadu 9.10 2 Rasilaben Mansukhbhai Sureja 9.09 3 Sonal Maulesh Ukani 9.09 4 Panchshilaben Jawaharbhai Mori 9.09 5 Dimpleben Smitkumar Kaneria 9.09 6 Ritaben Pravinbhai Pipaliya 9.09 7 Bhavana Bhupendrakumar Pachani 9.09 8 Bhavanaben Bhovanbhai Rangani 9.09 9 Urmilaben Kishorbhai Viramgama 9.09 10 Gita Gunvantray Bhadani 9.09 11 Rekhaben Shaileshbhai Vaishnani 3.03 12 Ripple Jamnadas Patel 3.03 13 Pushkar Harila....
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....griculture land and has paid amount in cash as well as paid interest on late payment. After due analysis it is concluded that assessee has entered into a purchase transaction of agriculture land and has paid amount in :ash as well as paid interest on late payment. The said cash payment as well as interest payment is "either reflected in registered sale deeds nor reflected in books of accounts. As the assessee has 'lied her return in Form ITR-3 which does not reflects the cash component as well as interest amount paid on such purchase. The said cash payment as well as interest payment is neither reflected inregistered sale deeds nor reflected in books of accounts. In the circumstance, the quantum of such cash component as well as interest payment remains undisclosed ft unexplained. In view of the above discussion in above para, since the above cash payment in the guise of on money payment as well as interest on late payment in aggregate of Rs. 2,45,25,729'I- made towards purchase of land is not reflected in books of accounts of assessee, the same has remained unexplained for F. Y. 2011-12 i.e. A. Y. 2012-13. Therefore, I have reason to believe that income of more than Rs. On....
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.... above. Hence the seller has sold the property in very low price. Our above named client has paid the amount in proper banking channel andwhatever amount paid by our above named client, the same is shown in her personal books of account and property is shown in the balance sheet. Copy of the Balance Sheet, Capital Account as well as Ledger Account of Land Purchase and copy of the Purchase deed is attached herewith for your kind perusal. Further our above named client had not paid any interest to the seller and our above named client has no concern with Jawahar Mori. Your honour has reopening the assessment on surmises and conjecture basis and doing the guess work without any incriminating documents. But sir, the facts remains facts, it cannot be change. Further the copy of the MOU, RUDA Master Plan, Certificate of RUDA, Architect Certificate, etc is attached herewith for your kind perusal. So you are requested to kindly accept the contention and take on records and give the decision on merits and drop the proceedings u/s. 148 of the IT Act or accept the return in TOTO. There is no any inaccurate particular of Income is filed by our above named client and no any incriminati....
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....4.2 of the assessment order. The impugned agreement to sale dated 5.5.2011 has been signed by two persons and that too only on the first and second pages. Neither the signature of the appellant nor her husband appears on the agreement to sale. Hence, it can be reasonably held that, the agreement to sale dated 5.5.2011 is not binding upon the appellant. 10.2 During the course of post survey proceedings, the Investigation Wing had recorded the statement of Shri Jawahar Mori, who is stated to be the arbitrator to the deal, as per the agreement to sale. Incidentally, his wife appears to have been one of the final co-owners, as per the final deed. He had stated as under: Yes Sir, I have seen all the sale deeds and thoroughly. I find names of spouses/relatives /friends of the directors of Club Privilege P Ltd (erstwhile known as Kalpataru Leisure Pvt. Ltd). Even name of my wife Mrs. Panchshila Mori is also mentioned therein. I agree that the mentioned land suffered from several infirmities as mentioned by myself in reply to Q No 13 above. However, once the sellers were confronted with such issues, they understood the problems with the land, and were later ready to sell ....
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.... Mori. These documents were impounded during the course survey proceedings at the premises of Shri Mari, in connection with the search of ENCORE group of Rajkot. Needless to say, no adverse inference of these documents were drawn while finalizing the survey relevant assessment of Shri Mori. The following three documents excel sheets are important. a. farm.xls b. mukeshpatel.xls c. interest.xls Contents of farm.xls 10.4.1 This excel sheet contains four columns. Sr No., Date, Amount and Remarks. In this sheet, at four places there is mention of cheque received as per the remarks column. The AO thus inferred that, the remaining amounts are nothing but cash, thus implying that the cash has exchanged hands. This kind of implied meaning does not have any significant when no such noting of cash payment is found there. The very first row shows an amount of 5,00,000 with the remark JBB Cheque. However, according to the appellant this amount of cheque is appearing in the bank statement of either the sellers or the buyers. There are in all 53 entries, and if the finding of the AO is held sacrosanct, then more than 50% of the alleged cash entries to....
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....ed is to ascertain its present fair and reasonable Market Value. The value of land as per the said valuation report is determined at Rs. 6,04,89,000/ in the valuation report itself by way Note, there is a mention that in case of distress sale value would be less than 20% to 30%. Thus, this valuation report in itself carries a veiled danger that the land in question is covered by irregularities. (iii) The valuation report dated 19.07.2008 appears to be at the instance of Karnataka Bank, Baroda since it is addressed to the Manager, Karnataka Bank, Baroda. The purpose of valuation is mentioned as to ascertain its present fair and reasonable Market Value. The value of land as per the said valuation report is determined of Rs. 10,53,97,500/. In the valuation report itself distress value is shown at 20% less. Thus, within a span of two years, the valuation of the land changed by more thon 40%,which clearly shows that the value adopted by the AO in the assessment order is humungous The land falls under Green Zone (GZ), where construction is not permissible and is under High Flood Zone (HFZ) area as it is near the catchment area of Aji dam. This fact is certified by quali....
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....emises of Jawahar Mori, sent by Raghuvir Buildcon Private Limtied, Shri Jawahar Mori had in his statement categorically stated that he has no idea / knowledge about those data vide reply to Question No. 12 of his statement recorded on 18.01.2019. It is pertinent to note that he in his statements recorded on 23 12 2017 and again on 18.01.2019 submitted that Raghuvir Buildcon Pvt. Ltd., has no office in Rajkot, therefore the authorized person namely "Altaf of that group used to come to his office and accessed his office computer system for their own business. Therefore, the data shown to him belongs to them only and he has no connection with those data. Thus, it was the data sent by Raghuvir Buildcon Group and not prepared or made by Jawahar Mori. Further, he has never stated or confirmed that either parties to the Agreement to sale or any other connected parties have made any unaccounted payment as such. 13. It is trite law that materials found during survey carried out is binding to the person in whose case survey is conducted. Any noting found related to third party is not binding to that third party unless any concrete and corroborative material is found. Therefore, if t....
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.... in this photocopy of Agreement to sale is concerned, it can be seen that only first two pages bear signatures of three person out of six, who were the parties to the Agreement to sale itself and pages 3, 4, 5 and 6 are unsigned. are no signatures of witnesses or all the sellers. It is settled principle that mere unsigned draft agreement to sale has no evidentiary value in the eyes of the law. 16. From the above, it may be mentioned that the materials on which the AO heavily relied upon has no evidentiary value and therefore cannot be made the basis of addition. Loose sheets/ unsigned documents found from third party cannot be treated as records of the assessee. Even if it is assumed that the same is record for the purpose of those whose it belongs or from whose possession it was found, but it cannot without independent evidence fix a liability upon third party Hon'ble Supreme Court of India in the case of Common Cause (A Registered Society) v. Union of India 77 taxmann.com 245 (SC) has held that "There has to be some relevant and admissible evidence and some cogent reason, which is prima facie reliable and supported by other circumstances pointing out that th....
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....ct paid by the appellant assessee himself and no other assessee or person. Hon'ble High Court held that it is established and proved beyond doubt that the appellant assessee has not made the said investment but was made by third party. Therefore, on this count only no additions u/s. 69 could have been made in the financial years immediately preceding the assessment year/s in question. (iii) Hon'ble ITAT Hyderabad Bench 'A' in the case of Smt. K.V. Lakshmi Savitri Devi vs. ACIT [2013] 30 taxmann.com 117 (Hyderabad - Trib.) wherein it has been held that "that the seized document was just a handwritten loose document and the handwriting was also not of the assessee and the loose document was found at the premises of a third party. The burden was on the department to prove conclusively that the loose document belonged to the assessee. There was no presumption in law that the assessee had actually paid Rs. 165 lakhs towards purchase of the property. The undisclosed income was to be computed by the Assessing Officer on the basis of the available material on record. It should not be based on conjectures and surmises. No addition could be made on a dumb do....
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....as held by the Hon'ble Supreme Court of India in the case of Andaman Timber Industries v. Commissioner of Central Excise in Civil Appeal No. 4228 of 2006. 19. Further, it has been noticed that the AO failed to bring on record certain material facts before raising suspicion viz. date and mode of payment by the applicant, who paid the money and to whom it was paid, who had prepared the details. These facts are unanswered, AO proceeded to make the addition without any evidence of payment by appellant or her husband. The AO totally failed to put forward the inextricable evidence for payment in cash, therefore, drawing of adverse inferences as regards the investment made by the appellant for purchase of the property under consideration has no legs to stand. 20. It is also a fact that the market value of land under consideration is higher compared to the circle rates fixed by the Sub-registrar, this itself fortifies the fact that the investment made towards purchase of the property as per the books of account supported by registered sale deed is well in order. 21. Furthermore, it is also observed that AO had tried to correlate the impugned agreement to sale....
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....ble to establish the fact that any funds have actually been paid by Vivek Patel to the sellers. While the sellers have stated that they have received the funds by a representative of Vivek Patel, the name of such person has not been disclosed nor have the dates on which such funds have been received come on record. A perusal of the power of attorney on which strong reliance has been placed on behalf of the appellant to contend that it establishesa link between the assessee and Vivek Patel, shows that the same has been executed by one of the sellers in favour of Vivek Patel in relation to one of the plots purchased by the assessee, but, significantly, such power of attorney has been found to be from the possession of the seller and not from Vivek Patel. Therefore, there is no material on record that prior to the search, Vivek Patel acted upon such power of attorney so as to establish a link, howsoever tenuous, between the assessee and Vivek Patel. As noticed earlier, the assessee has denied having paid any more consideration than that reflected in the sale deed executed in his favour. Vivek Patel has denied having paid any consideration to the sellers pursuant to the agreement to se....
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....on that Jawahar More is to Act as Arbitrator, it is submitted that those sheets of paper Le. Agreement to sale was not signed by Shri Jawahar Mori And merely mentioning name does not fasten any liability unless it is accepted by the said person and counter signed it. In support of the fact that land under consideration falls under high flood zone / green zone, necessary proofs have also been submitted. 24. It has been found that the rate as per the reckoner of Sub Registrar, Rajkot in surrounding area is Rs. 3,00,000/- per acre as claimed by the appellant whereas the appellant has purchased the land under consideration for Rs. 13,00,000/-, which is apparent form the registered sale deed. This itself suggests that the appellant has not paid any excess consideration in purchase of land under consideration. Here, it is pertinent to rely on the decision of Hon'ble ITAT, Rajkot Bench, Rajkot in the case of DCIT,Circle-1, Rajkot vs. Hitesh M. Bagdai in IT(SS)A No.3,485/RJT/2013 with Cos, where the issue is to determine sale consideration of land at Mota Mova, Near Rajkot City (happens to be on the way to appellants location from Rajkot City). In that case DVO has valued arou....
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.... appellant's end. Moreover, the issue / case /person becomes prosecutable only when he has brought some kind of harm/loss to the appellant. Here, since there is no such harm/loss to the appellant, where is the question of filing criminal offence? Thus, this observation of the AO that non filing of complaint proves cash exchanged is totally misplaced and infructuous. 27. On going through the facts noticed in the assessment order: following contradictions have also been 1. Noting/ entries in the excel sheet "farm.xls" is not matching with the payment scheduled mentioned in alleged agreement to sale. 2. No single evidence found suggesting actual payment either as per agreement to sale or as per entries in excel sheets. No cogent evidence such as cash receipts issued by the sellers have been found during the extensive search/survey carried out. 3. Amount of cheque entries mentioned in the excel sheet "farm.xls" is not fully matched with the actual cheques issued by the purchasers, Le as per sale deed In fact, very first entry in "farm.xls" of Rs 5,00,000/- with remarks "JBB Cheque" dated 09/05/2011 is not matching with the total cheques issued by....
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.... assessee did not figure amongst the individual buyers neither the assessee was the Director of the said company. It is a fact that the husband of the assessee became the Director of the company but subsequent to the alleged deed of agreement dated 05.05.2011. The husband of the assessee became the Director of the company only on 25.01.2012. Further admitted fact is this, that the document which has been considered as the primary document and the prime evidence is not bearing any signature of the assessee neither the signature of her husband. In that view of the matter, the assessee's first submission is this that the same is not binding upon the assessee and the addition made is, therefore, not sustainable in the eye of law. 17. The other submission made by the assessee to this effect that as the impugned land falling within the high flood zone and green zone as demarcated by Rajkot Urban Development Authority imposing restrictions for development of the same, no commercial activities can be carried out unless those restrictions are lifted and only for that sole reason, the sellers agreed to scale down the price of the said land and finally bought by the wives/relatives/friends....
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....00/- which were prepared at the instance of Union Bank of India, Ahmedabad and Karnataka Bank, Baroda, for the purpose of obtaining loan. These documents were impounded from the third party. The valuer determined the value of the land at 27% than that of the value mentioned to the assessee in the agreement in the year 2008-09. The assessee joins issue here. According to the assessee, firstly considering these valuation reports and the purpose of preparation of the same, it is impracticable and unavailable that the valuation could rise to Rs. 38 Crores. Secondly, as the assessee was not a party to the deal, ultimately the said valuation report, neither the Deed of Agreement is binding upon her particularly when no such identical data was impounded from her during search. 19. During recording of statement on 18.01.2019, Shri Jawahar Mori stated that he has no office in Rajkot and the authorized person of the Raghuvir Buildcon Pvt. Ltd., namely, "Altaf" of that group used to come his office and accessed his office computer system for their own business. Further that, the data shown to him belongs to them only and he has no connection with those data. It was categorically stated by ....
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....pplicable: i. PCIT-III vs. Vivek Prahladbhai Patel [2016] 66 taxmann.com 41 (Gujarat) ii. Ushakant N Patel vs. CIT 282 ITR 53 (Guj) iii. Smt. K. V. Lakshmi Savitri Devi vs. CIT [2013] 30 taxmann.com 117 (Hyderabad - Trib.) iv. Anil Jaggi vs. ACIT [2018] 89 taxmann.com 266 v. Andaman Timber Industries vs. Commissioner of Central Excise in Civil Appeal No. 4228 of 2006. 20. It is also an admitted position that the assessee was never allowed to cross examine the seller of the land or Shri Jawahar Mori though request during the assessment proceeding was made. In that event, no adverse inference could have been taken by the Ld. AO against the assessee as held by the Hon'ble Supreme Court in the case of Andaman Timber Industries vs. Commissioner of Central Excise in Civil Appeal No. 4228 of 2006 has also taken into consideration by the Ld. CIT(A) in its proper perspective. 21. As there is no iota of cogent evidence as to how much amount has been paid by the assessee or her husband in cash in the hands of the Revenue, the addition is formed to be on surmises and conjunctures, is of no worth. The same is, therefore, suffers from the vice o....
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....eed. 24. On this particular issue, we again considered the statement made by Shri Jawahar Mori. Nowhere he stated that consideration was of Rs. 38 Crores rather stated as the restriction has been imposed on the land falling under notified Green Zone and High Flood Zone, no full construction or required FSI was available on land. Conversion of the land into non-agricultural purpose is also not possible as stated by him requires consideration. Relevant to mention that the agreement for sale was not signed by Shri Jawahar Mori and mentioning his name cannot make him responsible unless it is accepted by that particular person. As per jantri value, the rate as per the reckoner of Sub- Registrar, Rajkot, the rate of surrounding area of particular land is Rs. 3 Lakhs per acre and the land in question has been purchased for a consideration of Rs. 13 Lakhs per acre as per the registered sale deed which is sufficient enough to suggest that there could not be any reason for making further excess consideration in purchasing the said land. The Ld. AO was of the opinion that as the cheque payment in the account has been treated as genuine, then, cash deposit appears in the same file should ea....
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....aid cash on-money in any of the impounded materials, particularly, when the assessee entered into deal after the alleged agreement to sale, the question of interest payable for delayed payment by her doesn't and cannot arise as the very basis of alleged original agreement to sale dated 05.05.2011 is not binding on her. Relevant to mention that the husband of the assessee became the director of the company much after the agreement for sale, only in the month of January 2014. Apart from that the Ld. AO neither referred the matter to the Ld. AO for ascertaining the valuation of the land before making addition. We find that the entire aspect of the matter has already discussed by us hereinabove were duly taking into consideration in its proper perspective by the Ld. CIT(A) and deleted the addition made by the Ld. AO, which in our considered opinion is just and proper so as to warrant interference. With the above observation, the Revenue's appeal is, therefore, found to be devoid of any merit and thus dismissed. ITA No. 23/Rjt/2021 (Revenue's appeal in case of Shri Bhupendra Trikamji Panchani) 28. At the time of hearing of the appeal, Ld. Senior Counsel appearing for the assessee ....
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....apement of income cannot said to be a foundation of belief; there should be specific allegation labelled against any particular person, supported by corroborative documents. However, in this case assessee's name is not appearing in the Memorandum of Agreement. While reopening the assessment of the assessee, the following reasons were recorded by the ACIT, Circle 1(1), Rajkot: "The assessee is an Individual and deriving his income from Salary, House Property and Other Sources. The assessee has filed his return of income of Rs. 68,86,375/- for the year under consideration. The information has been received from DDIT (Inv.)-1, Vadodara that a survey u/s. 133A of the IT Act was conducted on 27.12.2018 at the business premises of M/s. Raghuvir Buildcon Pvt. Ltd. at Vadodara and Ahmedabad. During the course of survey, various incriminating documents were found and impounded. It was found from the documents that the assessee alongwith various other persons have entered into agreement of sale of a Farm House at Village Yashwantpur, Tal. Lodhika, Distt. Rajkot for a consideration of Rs. 38,00,00,000/-. 2. On verification of return of income filed, it was noticed that the a....
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....e assessee in holding the entire proceeding is bad as the same was originally based upon the wrong recording of fact by the ITO while reopening the assessment. Thus, proceeding is thus void ab initio and therefore quashed. The Assessee's appeal is allowed. ITA No. 44/Rjt/2021 (Revenue's appeal in case of Shri Maulesh Dayabhai Ukani) 34. As we have already quashed the entire proceeding initiated by the ITO under Section 147 of the Act bad in law in ITA No.45/Rjt/2021 (Assessee's appeal), no separate order is need to be passed here. This appeal filed by the Revenue is, thus, dismissed. ITA No. 24/Rjt/2021 (Revenue's appeal in case of Smt. Dimpleben Smitkumar Kaneria) 35. We have heard the rival submissions made by the respective parties. We have also perused the relevant materials available on record. 36. While reopening the assessment of the assessee before us, the following reasons were recorded by the ITO: "1. Assessee is an Individual. The assessee has filed return of income for A.Y.2012-13. As per ITD, her communication address isat 7-A/1, "SNEH-PRIY, Nandi Park, Opp.IOCL Quarters, University Road, Rajkot. 2. In this case, information was receive....
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....located at village Yashwantpur,. Tal. Lodhika. Assessee has paid an amount of Rs. 2,45,25,729/- for purchase of the property, which is assessee's unaccounted income which is required to be brought to tax net. 5. As discussed in para 4 above, it is found that the assessee has paid an amount of Rs 2,45,25,729/- for purchase of farm house near Tal. Lodhika. Though the assessee has filed return of income showing meagre income as stated above, the amount of cash transactions involved is very high. Therefore, the payment of Rs. 2,45,25,729/- made by assessee is assessee's unaccounted income which needs to be brought to tax net. 6. In view of the above facts, it is very clear that the assessee has made payment of Rs. 2,45,25,729/- for purchase of farm house at village Yashwantpur, Tal. Lodhika, during the FY. 2011-12 which is assessee's unaccounted income. Through the assessee has filed return of income u/s 139 of the Act for the year under consideration, the source of such huge cash payment remained unexplained, which is required to be brought to tax. Thus the income to the extent of Rs. 2,45.25.729/- has escaped assessment in this case, for which the case o....
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.... provisions of Explanation 1 of section 147 of the Act. It is evident from the above discussion that in this case, the issues under consideration were never examined by the AO during the course of regular assessment/ reassessment. This fact is corroborated from the notices issued by the AO, material on record and various order sheet entries. It is important to highlight here that material facts relevant for the assessment of the issue(s) under consideration were not filed during the course of assessment proceedings and the same may be embedded in the submissions in such a manner that it would require due diligence by the AO to extract these information. For afore stated reasons, it is not a case of change of opinion by the AO. In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s. 148 is required to be obtained from Principal Commissioner of Tax, Rajkot-1, Rajkot as per the Provisions of section 151 of the Act." 37. It appears that the name of the assessee before us was neither figured in Memorandum of Understanding nor was she the purchaser of the land in question. Howeve....
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....perused the relevant materials available on record. 39. In this particular case, upon perusal of the entire set of records and the deed of conveyance, it appears that the assessee before us was neither a party to the Memorandum of Understanding or the registered Deed of Conveyance. The reasons so recorded was also not found to be correct as it appears from Page Nos. 2 to 4 of the paper book filed before us. However, substantial addition was also made in the case of the assessee before us. It is relevant to mention that in ITA No. 24/Rjt/2021 in case of Smt. Dimpleben S. Kaneria, we have confirmed the deletion of addition made by the Ld. CIT(A) mainly on the initiation of proceeding on recording of reasons factually incorrect, the same is also applicable to the instant case. The assessee was neither a Director of the Company on the date of Memorandum of Understanding and became the Director much after that. Therefore, the said cannot be linked with the transaction at all. Moreso, no payment has been made by him. In regard to such transaction, we further find that almost same amount has been added in the case of the assessee's wife. Thus, substantive addition has been made in both....
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....ri Maulesh D. Ukani of M/s. Kalptaru Leisure Pvt. Ltd., was the actual purchaser in the ratio of their holding in the said land and 9.09 share of investment in the case of assessee for F.Y. 2011-12 at Rs. 21,90,845/-. However, cash payment made by the assessee has not been able to be proved by the Revenue. Further that, assessee's name did not figure either in the Agreement to Sale or any other impounded material. More so, the documents were found and impounded from the possession of none of the parties. Neither in the seized cash book/data there is any mentioning of any cash payment made for the impugned land in question by the assessee and thus addition in the hand of the assessee was found to be incorrect by the Ld. CIT(A) while deleting the addition made by the Ld. AO. Apart from that, the assessee entered into deal at the very later stage and as her name did not figure in the Memorandum of Understanding, the allegation of payment of on money is not binding on her. The Ld. CIT(A), therefore, taking into consideration the entire aspect of the matter, deleted the addition which in our considered opinion is just and proper for the reason mentioned hereinabove so as to warrant inte....