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2012 (9) TMI 164 - HC - Income TaxUnexplained investment in the purchase Farms - ITAT deleted the additions - Held that:- The additions have been made on the basis of statement of Sh. Rajinder Gupta, the brother of the assessee and the two brokers who had subsequently retracted from their earlier statements and there is nothing in the order of the Tribunal to show how it considered the statements made at the time of the search to be unreliable and what reasons prevailed upon them to hold that the retractions supported by sworn affidavits were genuine and should be upheld. It is also not clear as to what the Tribunal means when it says that no other material was placed on record by the Assessing Officer in support of the claim that the assessee had made undisclosed investment. The statements are good material on which the conclusions can be drawn - There is no evidence of any threat or coercion from the officers of the search party and the allegation of the deponents to the contrary remains unsupported. They did not choose to complain against any high handed behavior of the authorised officers. It is also not known as to what the Tribunal means when it says that neither the vendors of the properties have admitted to receiving any money over and above the stated consideration nor any extra ordinary cash was found in the course of the search - These are vital aspects which the Tribunal has omitted to take into consideration; on the contrary it took into consideration irrelevant material such as retractions, absence of any statements by the sellers of the properties that they received on-monies and the fact that there was no seizure of any “extra ordinary” cash during the search - the Tribunal erred in endorsing the order of the CIT (Appeals) deleting the addition of Rs.4,71,05,000/- made by the Assessing Officer for unexplained investment in KG Farms and Jyoti Farms - against assessee. Undisclosed capital gains on sale of land at Jaipur Highway - Held that:- The capital gains can arise only if property is sold within the meaning of Section 2 (47) of the Act. The assessee is still holding a part of the land for which no consideration has been received. Therefore, there is no sale of the property which can be said to give rise to any capital gain. Even the original cheques form part of the seized documents which shows that the transfer did not take place. Therefore, there is no question of any undisclosed capital gains - in favour of assessee. Unexplained commission paid in cash to broker - Held that:- As it was consequential to the addition made for unexplained investment in KG Farms, it need to be warranted - against assessee. Assessment of Mani Kakkar who sold KG Farms to Kedarnath Gupta - Held that:- It is trite law that if the Assessing Officer does not have the jurisdiction to make an assessment, whatever decision he takes on the merits of the matter and all subsequent proceedings, including appellate proceedings, vis-à-vis the merits of the matter are only an academic exercise or a nullity, not having any legal effect. It cannot be disputed that the recording of the satisfaction that the undisclosed income found in the course of the search belongs to another person is a pre-condition for validly assuming jurisdiction to make an assessment under Section 158BD. The CIT (Appeals) has held that since no satisfaction to this effect was recorded by the Assessing Officer making the assessment of Kedarnath Gupta, the Assessing Officer having jurisdiction over Mani Kakkar had not validly assumed jurisdiction to issue a notice under Section 158BD and to make an assessment on her - against revenue.
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