TaxTMI 
TaxTMI 
2025 (4) TMI 798
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....extent." 3. The facts of the case which can be stated quite shortly are as follows: The assessee has filed his return of income for assessment year 2012-13, on 17.12.2012, declaring total income of Rs. 8,76,410/-, and agricultural income of Rs. 15,13,000/-. The assessee`s return of income was processed under section 143(1) of the Income tax Act 1961, without any modification. Thereafter the assessing officer noticed that in the assessee`s case, the income chargeable to tax has escaped assessment for the assessment year (A.Y.) 2012-13, within the meaning of section 147 of the I.T. Act, 1961. In view of these facts, the assessee`s case was re-opened u/s. 147 of the I.T. Act, after recording the reasons and obtaining the requisite approval of the Pr. Commissioner of Income-tax-3, Rajkot. Accordingly, notice u/s 148 of the I.T. Act, dated 29/03/2019, was issued by the I.T.O., Ward-2, Junagadh, which was duly served upon the assessee through electronic mode. The assessee in response to the e-notice issued u/s. 148 of the I.T. Act, 1961, filed e-return of income on 15.04.2019, declaring income of Rs. 8,76,410/- and agriculture income of Rs. 15,13,000/-. The assessee has requested to s....
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.... 2,90,00,000/- only. This proves that the assessee group has made unaccounted cash investment of Rs. 6,00,52,600/- (Rs.8,90,52,600/- (-) Rs. 2,90,00,000/-) for purchase of the aforesaid piece of land. The snap shot of Page no. 96 of Annexure A-463 and the another evidence found from the digital data seized from the back office of the K -star group is reproduced by the assessing officer on page no.3 of the assessment order. 5. The assessing officer, therefore issued a show- cause notice dated 09.12.2019 to the assessee, to explain the transaction. In the show-cause notice, the assessing officer mentioned that a Search Action u/s. 132 of the I.T. Act was conducted at the residential and office premises of K. Star Group of Surat on 17.08.2015. During the course of search, many incriminating documents were found and seized. The Land Bearing F.P No. 95. T.P-26. R.S. No. 131 of Sineanpor Village, Taluka: Katargam, Surat. During analyzing the seized documents, it was evident that a land admeasuring 2727.46 sq. mts (3262 sq. yards) bearing F.P. No. 96 of T.P.-26 (Singanpor), R.S. No. 131 of Singanpor Village, Taluka: Katargam, District: Surat, was purchased by the assesseegroup of K. St....
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....son(s). However, no such documents /statements has been provided to the assessee and also, no cross examination of the witness has been availed. Therefore, in absence of such prime documents / procedure, alleged document seized from the premises of third party cannot be made binding on the assessee and on that basis, addition proposed in assessee`s case was strongly objected. The relevant part of the written submission, on merit, submitted by the assessee, before the assessing officer, is reproduced below: "Without prejudice to the above, on para-3 of the show-cause notice, your good self has mentioned that "During analyzing the seized documents, it was evident that a land admeasuring 2727.46 sq. mts (3262 sq. yards) bearing F.P. No. 96 of T.P.-26 (Singanpor), R.S. No. 131 of Singanpor Village, Taluka: Katargam, District: Surat, was purchased by the assessee group of K. Star i.e. Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani from the seller Shri Jagmal Maldevbhai Bhatu..." In this connection, it is to submit that said observation is totally incorrect in as much as that I had sold the Agricultural Land wherein there cannot be a....
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.... Reliance is placed on the decision of Rama Traders vs. First ITO [1998] 25 ITD 599 (Pat.) (TM), wherein, it was held that no addition could be made, on the basis of presumption raised by section 132(4A), in the hands of the assessee where in the books of another firm, certain figures were found showing the purchase made by the assessee. vi. Reliance also placed on following decisions: Hon'ble Apex Court in the case of Kishanchand Chellaram held that any addition made on the basis of statement by a Third Party without affording an opportunity for rebuttal or cross examination to the assessee is perverse. It was therefore the obligation of the A.O. to allow the assessee to cross examine in the interest of natural justice before embarking on a final view in this matter. Hon'ble Apex Court in the judgement dated 02.03.1998 in the case of CBI vs. V. C. Shukla &Ors. held that - Entries in books being admission can be used only against the maker or the person under whose authority they were made and not others. Hon'ble ITAT Chandigarh Bench in the case of Abhay Kumar Jain vs. ITO 13 TTJ (CHD) 388, wherein it has been held that "Inference of....
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.... CIT v Mauli Kumar K. Shah [2008] 307 ITR 137(Guj.) x. Considering the above facts and judicial pronouncements, your proposal to make addition of Rs. 6,00,52,600/- on the alleged ground of unaccounted receipts from sale of land is strongly objected. xi. Furthermore, your good self may appreciate that the transaction value recorded in the registered sale deed had been called for and examined by Deputy Collector, Stamp Valuation Department, Surat for assessment of stamp duty. In the order passed by Hon. Deputy Collector dated 29.03.2012, he had applied the market rate (Jantri) of developed open plot of land (though, the land sold was agricultural land, which market rate tends to be lower) and at that rate too, he was satisfied with the transaction value at which the transaction has been carried out. Therefore, addition proposed on the basis of arbitrary / imaginary value of land stated to have depicted in unsigned / un-confronted / un-authenticated stated to have been seized from the premises of third party is strongly objected." 8. However, the assessing officer rejected the contention of the assessing and held that assessee had failed to furnish any docume....
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.... b. The first document submitted into the record is Form No.6 of Gam Namuno (Haq Patrak), dated 14.05.2012, which evidences the sale of the said land by the Assessee to Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, and Swintu Arvind Mavani. Refer page no 22. c. The second document submitted into the record is Form No 6 of Gam Namuno (Haq Patrak), dated 09.07.2013, which denotes the Revenue Department of Gujarat's official notation of the transition of the land in question from agricultural to non-agricultural use. Refer page no 24. d. The third document, Form No 6 of Gam Namuno (Haq Patrak) dated 09.10.2013, evidences the inclusion of M/s Silverstone Enterprise into the records pursuant to the Partnership Deed executed by Shri Kishorbhai B Koshiya, Shri Gagjibhai B Koshiya, Swintu Arvind Mavani, and Shri Bharatbhai B Gadhiya.Refer page no 25. e. In addition, a title history search was conducted using the Anyror portal (https://anyror.gujarat.gov.in), which confirms that the land was introduced into the partnership firm M/s Silverstone by the three partners only, who were the original buyers of the land under consideration. A relevant excerpt ....
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....ishorbhai B Koshiya, Shri Gagjibhai B Koshiya, and Swintu Arvind Mavani. No other individual or entity holds any claim to ownership or entitlements regarding this property in any capacity. Refer page no 47. V. To further substantiate this contention, the undersigned wishes to rely on the page no 54 of the sale deed executed by M/s Silverstone Enterprise with the independent buyer of the flat in the scheme named "Silverstone Homes", which was developed on the same land by M/s Silverstone Enterprise. In this document, history of ownership of land is narrated on page no.5 which again proves beyond doubt that following the sale transaction entered into between the Assessee and the original partners of M/s Silverstone Enterprise, no other transactions occurred, and the purchasers remained the sole owners until the allotment of flats to the buyers in the "Silverstone Homes" scheme. vi. Therefore, the assertion by the Assessee that he had not conducted a sale to the K. Star Group is factually incorrect. The CIT(A) has also acknowledged in his order that the "on money" received by the actual seller of the land to the K. Star Group should be taxed. Based on the factual sub....
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....ump document". We note that the noting in the loose sheet is uncorroborated, not a speaking document and no supporting evidence by way of money receipt and other evidences were found. Therefore, no addition can be made on the basis of dump document. The assessee, under consideration is partner in partnership firms, having income from share in profits, remuneration, interest on capital, capital gain on sale of land and also earning agriculture income. The assessee has been declaring Substantial agriculture income from several years. The assessee has submitted before the assessing officer that he was holding agricultural land at village Kumbharia, District Surat and at Village Singalpor, District Surat. The land at Village Kumbharia was purchased and also sold during the Financial Year 2011-12 (the year under consideration) resulting into short term capital gain of Rs. 1,14,501/-,which was duly offered to tax. The land at Village Singalpor was purchased during the Financial Year 2006-07 at Rs. 5,68,230/- and was sold during the Financial Year 2011-12 to certain other agriculturists, namely, Shri Kishorbhai B. Koshiya, Shri Gagjibhai B. Koshiya and Shri Swintu Arvind Mavani for a sale....
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....ct would certainly entail conversion from agriculture to non-agriculture land and various other statutory permissions. There is nothing on record to suggest that the assessee was involved in any manner in the said land after he sold it to the three persons named above as an agriculture land. On given facts, the only possible conclusion is that the said piece of land has been sold subsequently by those three purchasers to some entity of the K. Star Group, either directly or after another intermediary sale transaction, and the said entity in turn has obtained the conversion of land use from agriculture to non-agriculture, and has undertaken other necessary formalities for development of residential project on the said land. In that event, the rate of purchase of Rs. 27,300/-per square yard, which is evidenced by the document seized from the premises of K. Star Group, would apply to such subsequent sale transaction, by way of which these three purchasers, or the further intermediary purchasers, have sold the said land finally to the K. Star Group- entity. In other words, the assessee cannot be made liable on account of any presumption of payment of on-money in cash, by the K. Star Gro....
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.... be any action under section 147 of the Act after the expiry of a period of four years from the end of the relevant assessment year until and unless the income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make disclosure of all the material facts truly and fully necessary for assessment. In the present case, we have already held that initiation of the proceedings under Section 147 of the Act was based on the borrowed satisfaction. Thus, it is implied that the Assessing Officer has not applied his mind to arrive at the conclusion that there was of failure on the part of the assessee to disclose fully and truly all the material facts. In other words, mentioning by the Assessing Officer that the assessee has failed to disclose all material facts in the reasons recorded is not sufficient enough. Rather the Assessing Officer is under the obligation to arrive at such conclusion that the assessee failed to disclose all material facts necessary for the assessment after applying his mind and verification of the facts. But the Assessing Officer has not done so. The entire basis for reopening the assessment ....