TMI Blog2014 (7) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... t time there was an apparent denial of opportunity to the assessee as prescribed under Rule 46-A by learned CIT(A) - even after the perusal of the Remand Report the questions/doubts as raised could not be removed – thus, it is not only necessary but also justifiable to restore the matter back to the stage of investigation, i.e., the assessment stage so that the assessee as well as the Revenue both can go upto the hilt of the facts and thereupon can arrive at the correct conclusion – Decided in favour of assessee. Addition made cash deposit in bank account – source of income not appreciated – Held that:- The assessee has not explained the exact details of the agriculture holding and the income earned there from - It was necessary on the part of the assessee to place on record the area/measurement of the agriculture holding duly supported by the evidence - Assessee was also required to show agriculture crop produced. Be that as it was - the assessee had produced bills during the course of assessment proceedings - the assessee had produced evidence to this extent confirming the agriculture income, therefore, the AO is directed to reduce the addition and rest of the amount is confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Before we adjudicate this ground, it is worth to mention that in the past for the block period 01.04.1995 to 31.03.2001 and 1.04.2001 to 13.012.2001 in the case of the assessee himself an order was passed by the Respected Co-ordinate Bench 'C' ITAT Ahd [IT(ss)A No.57/Ahd/2005] order dated 29.12.2010. This was an appeal filed by the Revenue. The assessee was in Cross-Objection bearing CO. No.90/Ahd/2005 (arising out of IT(ss)A No.57/Ahd/2005). Considering the facts of the case as well as the provisions of Rule 46A, it was held by the Tribunal that learned CIT(A) ought to have admitted the Additional Evidences. Therefore, the matter was remanded back to the file of the learned CIT(A) to decide Revenue's Appeal and the Cross Objection of the assessee afresh as per law. Due to this reasons, the earlier order of learned CIT(A)-I, Ahmedabad, dated 24.12.2004 has also been placed before us. We have perused all those orders carefully. 3. Facts in brief as emerged from the corresponding assessment order passed u/s.158BC r.w.s 143(3), dated 31.12.2003 were that the assessee in individual capacity is stated to be a builder and developer in Real Estate business. A search u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1638 A-2/6 24. Champaben Manibhai 309684 A-2/6 25. Rameshbhai Chunnibhai 989216 A-2/7 26. Amraji Shankerji 380546 A-2/7 27. Manubhai Chhotabhai 31762 A-2/8 28. Manubhai Chhotabhai 141026 A-2/8 Total 10104887 3.1 As per the above list, the AO has demonstrated that certain documents were recovered, as identified in the above list, through which it was found that cash amount was paid to the persons alleged to be the land owners over which the project was to be constructed. Thereafter, the AO has also narrated the Annexure along with the seized material which were recovered from the residence of the assessee. As per AO, it was found that the names of the land owners were mentioned in the seized material along with details of the installments (Pratham Hapto) (Bijo Hapto) paid in cash. The annexures have revealed that in respect of the Khata number of the land the amounts were paid and that was acknowledged as per the noting chukte karel che . Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he various issues put across to him vide notice u/s.142(1) dated 09.10.2003, in view of the tenets of the natural justice. The assessee vide his reply dated submitted reply as follows: Before few years Shreeji Narol Owners Association has entered into a contract for purchasing land admeasuring to 28500 sq. yards approximately. There were about 20 original land owners with whom Shreeji Narol Owners Association entered into purchase contract, subsequently such land was initially sold to Shreeji Co-op Housing Society Limited, Due to large complexity and formalities. Shreeji Narol Owners Association entered into the purchase of the land for Shreeji Narol Owners Association. Shreeji Narol Owners Association paid the amounts to the original land owners in installment as and when received from the subsequent purchasers. All the amounts shown in the Annexure II to the said notice have actually been paid by the Shreeji Narol Owners Association only. However, to keep the track of the payments and proper management of the contract, I have kept track of all such payments made by the Shreeji Narol Owners Association which were found in the seized documents. Therefore it is to be strongly not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article or thing or material found in possession or control of any person in the course of search is the owner and responsible to explain the same. Few case laws have also been mentioned by the AO in support of the said legal proposition. The AO has also remarked that the assessee was granted opportunity to displace the said presumption with the support of leading evidences and the said presumption is rebuttable but in spite of granting the opportunity assessee was unable to rebut the same presumption. So he has concluded that considering the nature and the clarity of the evidences the amount of ₹ 1,01,04,887/- was the undisclosed payment to the land owner by the assessee and the same was accordingly taxed in his hands. Being aggrieved the same was challenged before the First Appellate Authority. 4. In the first round of appeal, learned CIT(A) vide order dated 24.12.2004, as discussed above, he has rejected the request of admission of Additional Evidences. Some of the observation of learned CIT(A) is worth reproduction. 3.3 Now to consider the various explanations given on behalf of the appellant, it has been claimed that he was entitled to only some commission from Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they refer to purchase being made by Shreeji Narol Land Owners' Association which actually did not get incorporated upto 6th May, 1997 and so was not in existence on the date these were executed. The only logical conclusion is then that the association being not in existence when the banakhats were entered into and signed by the persons who were selling land, the purchase was not made by the said association. Also the only person in me know of things would be Shree Ramesh M. Patel who is claimed to be the president of the association or the appellant Shri Bharat V. Patel who claims to be working as mediator right from the time the various banakhats were entered into for purchase of various lands. Now since the association itself was not in existence, so also its president had no legal existence on the day the banakhats were entered into or signed or registered. But the one person who did have some connection with the scheme from the date the banakhats were entered into, was the appellant who admits to noting of the various payments made to land owners in his diary. The alleged copy of resolution as mediator signed by Shri Ramesh M.Patel in favour of the appellant speaks of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o note that whereas the resolution of SNOA, heavily relied upon by appellant, states that a meeting of the Board of the Directors of Narol Owners Association held as on 15-5- 1997 at 4.00 p.m., the resolution is signed by just one person namely Shri Ramesh M Patel, in the capacity of Secretary. If, as evident from the wording of this resolution, all the Board of Directors were present, then the question arises as to why there was no mention of their names on the resolution and as to why they did not sign, ordinarily every resolution always bears, the names of persons present alongwith their designation. The same is conspicuously absent from the impugned resolution. Thus, the resolution relied upon by the appellant, is at best a self serving document and suffers from the vice of being a genuine document. Assuming without conceding that the resolution is genuine, then the question arises is as to where is the appointment letter of appellant issued by the SNOA. Naturally, since appellant was neither present during the board meeting nor is a signatory, he would not be aware of his appointment as mediator by SNOA, unless off course SNOA issues him a formal appointment letter. It has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced during the course of proceedings so far. If the appellant is confident that he was just a mediator then he ought to have produced the parties indicated in banakhats to vindicate his statement that he was just a mediator between the said land selling parties and SNOA. It is pertinent to point out that the burden of responsibility u/s. 132(4) is upon the appellant. Coming to the issue of matching of figures appearing in the diary with the amounts indicated in banakhat and books of SNOA, it is seen that the same is also plagued with deficiencies and shortcomings. The appellant has attempted to explain the same but has not been able to explain the same as in the case of Jayantiial, Rasiklal Keshavlal, etc with any cogent evidence. The argument of the appellant that all the entries in the diary match with those in banakhat and books of SNOA therefore cannot be accepted. Another argument taken by the appellant is that the search in his case has not yielded any asset and hence this addition cannot be made. The possible argument of the appellant is that the undisclosed income ought to have been supported by some unaccounted assets which should have been found at the time of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has acquired from 21 farmers. He has pleaded that in view of the seized documents, it was clear that the payments were made by SNOA to the land owner. Again, he has repeated that too materialize the bill the assessee had worked only as a mediator. Because he was a mediator, therefore, he has recorded the transaction on the paper as seized at the time of search. The entries in the seized document had therefore matched with the entries in the books of accounts of SNOA. However, later on SNOA decided not to develop the residential scheme, therefore, the land which was acquired by way of Banakhats was sold by the association. Since, the SNOA decided not to develop the residential scheme, therefore, the Banakhats which were executed were not converted into registered sale deed and the land in question was further transferred also through Banakhats by the association. Learned AR has placed before us few charts describing the nature of the payment. In one chart, learned AR has tried to demonstrate that the amount appeared in the seized diary had matched with the amounts appeared in the books of SNOA. His attempt is to prove that the cheques were issued in favour of the land owners, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remanding the matter back by the Respected Tribunal but even then the assessee has not co-operated before learned CIT(A). Learned DR has also shown us the said small diary to demonstrate that it was written in the handwriting of the assessee in a coded language. By the very fact that the diary was written in a coded language; hence it was a secret document through which the assessee had tried to conceal the particulars of the transaction. But it was unearthed consequence upon the search. The assessee was not a mediator but fully involved in the land deal. The admitted factual position was that no commission was paid to the assessee although the transaction was completed through registered sale deed and the association got the land in question. So, it was proved beyond doubt that he was not a mediator; therefore, he has not received the agreed 0.50% commission. According to learned DR, SNOA did not come into the picture at all. The component of the cash as per the diary was not disclosed by the assessee, hence rightly taxed. Moreover the cash component has not matched with the figures noted in the books of SNOA. He has also drawn our attention on two statements, namely, Ms. Lalitabe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erify the signatories of the cheques whether issued by the association or by the assessee. (b) On examination of the English translation of Banakhats, we have found that only the signature of the party of the first part, i.e., the name of the land owners was mentioned, but there was no mention of the party of the second part, i.e., SNOA. Although, in the preamble of the Banakhats, it is mentioned that the party of the second part is the President as well as Secretary of the association, but there was no signature of those persons. In this regard, the examination of the witnesses in the Banakhats shall also prove beneficial to arrive at the right conclusion. If the Banakhats are the registered documents then whether the registration expenditure was duly debited in the books of SNOA. Whether it was shown as purchased by the association? We have also found that the original Banakhats were not produced before the AO. We therefore deem it proper to direct the assessee to produce the original banakhats to the AO so that he can examine the nature of the document and the correctness of the claim that those were duly registered documents. (c) The appellant has placed before us few exh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO, therefore, in his discretion can raise allied question to verify the claim of the assessee that the payment was not made by the assessee but by SNOA. We are also cautious about the fact that once this very issue was restored back to the file of the First Appellate Authority, but at that time there was an apparent denial of opportunity to the assessee as prescribed under Rule 46-A by learned CIT(A). Only on that ground the matter was restored back. But now the situation is that even after the perusal of the Remand Report the questions/doubts as raised hereinabove could not be removed. Therefore in the interest of justice as also considering the rival submissions it is not only necessary but also justifiable to restore the matter back to the stage of investigation, i.e., the assessment stage so that the assessee as well as the Revenue both can go upto the hilt of the facts and thereupon can arrive at the correct conclusion. In view of the above discussion the grounds of the assessee may be treated as allowed but for statistical purpose. 8. Ground No.5 is reproduced below: 5. Though honorable ITAT remanded impugned appeal to the file of CIT(Appeals). The learned CIT(Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- was challenged, in the second round of appeal, in consequence of the directions of the Tribunal, learned CIT(A) has held that there was no such direction in respect of impugned addition by the respected ITAT; hence, he has opined that in respectful compliance of the order of the Tribunal no adjudication was required. 11. After hearing the submissions of both the sides and on careful perusal of the material placed before us, we are of the view that the assessee has not explained the exact details of the agriculture holding and the income earned there from. It was necessary on the part of the assessee to place on record the area/measurement of the agriculture holding duly supported by the evidence. Assessee was also required to show agriculture crop produced. Be that as it was. In any case, to settle the issue we have noted that the assessee had produced bills of ₹ 3,92,060/- during the course of assessment proceedings as mentioned in the first paragraph (unnumbered) on page 12 of the assessment order. To this extent only a relief can be granted. Since, the assessee had produced evidence to this extent confirming the agriculture income, therefore, we hereby direct to redu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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