TMI Blog2013 (5) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... t, all the documents were executed at the Jantry Value. AO had also not referred the matter to the Valuation Officer to establish that the value of the land purchased by the assessees was below the market value or had not made any enquiries with the owners of the land who sold the land to the assessees in order to establish that the assessee had paid amount over and above the value shown in the registered documents, thus it is apparent that the revenue had made addition only on the basis of surmises and conjunctions that the assessee would have paid Rs.2,80,000/- per bigha. The onus thrusts upon the revenue to prove its stand is not met as decided in K. P. Varghese Vs ITO (1981 (9) TMI 1 - SUPREME Court). It is pertinent to note the decision of CIT Vs Naresh Khattar HUF (2003 (1) TMI 77 - DELHI High Court) wherein held that inference has to be drawn on the totality of the circumstance and not on any single fact while making addition u/s 69B. In favour of assessee. - IT (SS) A No.544 and 545/Ahd/2012, IT (SS) A No.546/Ahd/2012, IT (SS) A No.547/Ahd/2012, IT (SS) A No.548/Ahd/2012, IT (SS) A No.550/Ahd/2012 - - - Dated:- 3-5-2013 - Shri Mukul KR. Shrawat JM And Shri A. Mohan A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012 in the case of Fairdeal Textile Park Pvt. Ltd. for the assessment year 2009-10 has been wrongly mentioned as Rs.36,55,970/-. However, as per the Assessment Order and the order of the CIT(A) correct figure of addition is Rs.5,36,470/- accordingly, the ground is modified.] 4. Brief facts: - A search was carried out u/s 132 of the Income Tax Act in the business premises as well as residential premises of Shahlon Group on 28-01-2010 wherein two agreements dated 13-12- 2005 jointly executed by Shri Dhirajlal Raichand Shah [main person of Shahlon Group] and Shri Nitin Raichand Shah with Natvarsingh Nathusingh Adyar sic. Admar were seized. It was revealed from the agreement that Dhirajlal Raichand Shah and Nitin Raichand Shah had given cash of Rs.40,00,000/- and Rs.50,00,000/- aggregating to Rs.90,00,000/- to Natvarsingh Nathusingh Admar for purchase of large extent of land at Mahuvej, Mangrol, Surat in Block No.692/2, 699, 700, 701, 702, 703, 706,711,712 and 713 respectively. It was further revealed from these agreements that the purchase price of the land shall be @ Rs.2,80,000/- per bigha i.e. 2,327 sq. mtrs. This entire block of land fell within the land block wherein of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same due to the following reasons:- (i) Since, the assessee had executed an agreement with Shri Natvarsingh Nathusingh Admar which establishes that the market rate prevailing in the area was Rs.2,80,000/- per bigha. (ii) Though the agreements executed between the assessees' group and Shri Natvarsingh Nathusingh Admar was said to be cancelled, the same land was purchased during the same period i. e. financial year 2005-06 mentioned in the agreements which evidences that the assessee had purchased the land at the same rate provided in the agreement viz. Rs.2,80,000/- per bigha and through Shri Natvarsingh Nathusingh Admar. (iii) Even though, the sellers of the land were different the purchaser of the land was same, and therefore, the rate of the land cannot fall below the agreements entered with the intermediary. (iv) The assessees' contention that Shri Natvarsingh Nathusingh Admar schemed to unscrupulously extract money from the assessees group by inflating land price cannot be believed because the assessees group are competent in their business for a prolonged period of 30 years. No prudent business group will extend such huge amount of Rs.90,00,000/- as advance to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xii) It is a common practice that substantial on-money is paid for purchase of land, properties etc. 9. With these observations the learned AO determined the unexplained investment u/s 69 B of the Act being the difference between the land rate of Rs.2,80,000/- per bigha i.e. Rs.120.33 per sq. mtr. and the rate declared in the in the purchase deeds and made additions in the hands of the assessee's group individually who had purchased the land and retained or transferred to the group company. Further, while arriving at the unexplained investment the learned AO did not grant telescoping effect for the unaccounted income disclosed by the assessees group while filing return of income since the same was not disclosed against the purchase of the above referred land. The details of the unexplained investment in the hands of the individual respective assessees group are summarized herein under:- Sr. No. Land description Name of first buyer Assessment year Unexplained investment 1 Survey No.698,699/3 Block No.692/2 Dhirajlal R. Shah 2006-07 13,23,537 2 Survey No.715, 725, Block No.712 Dhirajlal R. Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d after converting the same into non- agriculture land and after leveling the same. 11. The learned AR stoutly argued before us that the additions were made merely on the basis of the agreements found at the time of search, however, there was no other material on record to establish that the assessee had purchased the land at Rs.2,80,000/- per bigha. He further submitted that the agreements were never acted upon and since Mr. Natvarsingh could not procure the land for the assessee, the advance cash made for Rs.90 lacs was returned. The learned AR further prayed before us stating that the revenue has made unnecessary additions based on the presumption that the assessee would have purchased land at the rate of Rs.2,80,000/- per bigha and not as per the rate shown in the registered documents and, therefore, the additions made by the learned AO may be deleted. 12. The learned DR supported the orders of the revenue and submitted that their orders may be upheld. 13. We have heard the rival submissions and carefully perused the materials on record. It appears that the revenue has made the additions only based on the two agreements found at the time of search. There are no other evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessees. Further, the landowners were not examined or investigation made on them to verify whether they had received on- money for the sale of their land to the assessee. Moreover, the learned AO had not conducted any enquiry to find out the market value of the land or had referred the matter to the DVO to determine the market value of the land. On examining the entire facts of the case, it is quite apparent that the revenue had made the additions only on the strength of the two agreements obtained at the time of search. It is pertinent to note the decision of the case CIT Vs Naresh Khattar HUF reported in 261 ITR 664 (Del.) wherein it was held that inference has to be drawn on the totality of the circumstance and not on any single fact while making addition u/s 69B of the Act. From the facts and circumstances of this case and as per our above discussions, we are of the view that the aggregate addition made for Rs.2,09,72,810/- in the hands of all the above mentioned assessees based on assumptions and presumptions by the learned AO which was further sustained by the learned CIT(A) does not have any merit and deserve to be deleted. Accordingly, we hereby delete the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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