TMI Blog2015 (1) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the instant case, the said agreement does not prove the balance agreed amount was actually paid at any time leave aside at the stipulated time. Therefore, in our considered view, the agreement is a material to conclude that investment of ₹ 11,00,000/- was made by the assessee on 18.01.2005 and for no further investment. Therefore, in the circumstance, the addition of an amount more than ₹ 11,00,000/- made in the Assessment Year 2005-06 and the amounts for which the additions were made in Assessment Year 2006-07 and 2007-08 are not sustainable. Further, in respect of ₹ 11,00,000/-, the assessee claimed that the amount was paid by cheque and the said cheque was taken back by the assessee; whereas, Shri Somabhai A. Prajapati in his statement claimed that ₹ 11,00,000/- was received by him in cash. We find from a reading of the agreement that nowhere the agreement shows that ₹ 11,00,000/- was paid by cheque. The assessee could not bring any material to show that ₹ 11,00,000/- was paid by him to Shri Somabhai A. Prajapati was by cheque and was not cash. In this circumstance, we find that the assessee making investment of ₹ 11,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase various plots of land. The relevant portion of assessment order for A.Y. 2005-06 is reproduced below:- 3. During the course of search in the case of Somabhai Ambalal Prajapati at Khodal Bhavan, Khodiyar Krupa Bunglows, Thaltej, Ahmedabad on 08.12.2009, it is found that Shri Somabhai A. Prajapati, Shri Vishnubhai A. Prajapati, Shri Chandubhai A. Prajapati have entered into banachithi (agreement to sell land) on 18.01.2005, for sale of land at Bhadaj with the assessee. The banachitthi was signed on 18.01.05 by Somabhai Ambalal Prajapati, Chandubhai Ambalal Prajapati and Vishnubhai Ambalal Prajapati as seller and the assessee as the buyer. The said 'banachithi' has been seized and inventorised at page no. 119 to 122 of Annexure A-22. As per the Banachitthi the rate per vigha for Juni Sharat land was fixed at ₹ 29,51,000/- while the rate per vigha of Navi Sharat land was fixed at ₹ 21,85,000/-. The details of plots of land recorded in banachithi are as under: Block No. Survey No. Sharat Sq.mt 540 515 Old Sharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.51 1,02,98,990 512-A 5.40 21.85 1,17,99,000 510 5.10 29.51 1,50,50,100 Total 9,09,93,010 3.3 Rate shown in this paper is exactly the same rate which is shown in Banachitti. Further, on page No. 117 of Annexure A-22, following details are mentioned: Old Sharat 540 4.97 494 1.78 Rate ₹ 29,51,000/- 500 3.60 510 5.28 15.63 ₹ 4,61,24,130/- received. Navi Sharat 509 7.11 504 12.09 497 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (86.765X497) -------------- 199 (F.Y.91-92) 1,48,33,406 1) Gitaben Chandubhai. 2) Maniben Somabhai. 3) Sangitaben V. 49,44,469. 49,44,469. 49,44,469. (4) 504 5813 02.08.0 5. 2,55,64,500 3,65,309 (1,79.347X497) ------------- 244 (F.Y.93-94) 2,51,99,191. 1) Somabhai A. 2) Maniben Somabhai. 3) Pankaj Somabhai. 4) Kamlesh Somabhai. 5) Nisha Pankaj. 6) llaben D/o. Somabhai. 7)Hiralben D/o. Somabhai. 35,99,885. 35,99,884. 35,99,884. 35,99.884. 35,99,884. 35,99,884. 35,99,884. (5) 509 5581 25.07.2 005 1,50,32,800 1,26,587 1,47,16,651 1) Vishnubhai Ambalal 1,47,16,651 2008-2009 (6) 512-B 8406 10/07/2 007 81,71,900. 90,653 (64.000X551) 389 (F. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties wherein the assessee is shown as the purchaser. A rate was agreed to between the assessee and Prajapati family for purchase of sale plots of land. During the course of search and survey operations conducted at the premises of the sellers various loose sheets and documents, referred to above, were found where cash receipts, as per the agreed rates, have been recorded to have been received by the Prajapati family. , Advance of ₹ 11.00 lacs was paid by the assessee to the Prajapati family for purchase of said lands and nowhere in the banachithi it has been recorded that advance has been paid through cheque as contended by the assessee. It is pertinent to mention here that it is a norm in land transactions that the amount paid or received through cheques is duly recorded along with cheque number and name of the bank in the land document. It is pertinent to note here that 'agreement to sell made in writing is a legal contract and vests a right of the purchaser on the properties agreed to be sold to him by the sellers. Thus, any legal contract will hold good until cancelled by way of any other legal contract. However, neither during the course of the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr.No Block No. Document No. And Date Amount as per Document Amount as per Disclosure Asst. Year. (D 509 5581 -25/07/2005 6,50,000 1,50.32,800 2006-2007 (2) 500 5812 - 02/08/2005 4,00,000 1,02,98,990 2006-2007 (3) 494 5582-25/07/2005 1,51,000 50,75,720 2006-2007 (4) 504 5813-02/08/2005 11,10,900 2,55.64,500 2006-2007 (5) 510 382-17/01/2006 3,50,001 1,50,50,100 2006-2007 (6) 512-B 8406 -10/07/2007 3,56,120 81,71,900 2008-2009 (7) 512-A 8408-10/07/2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year towards the purchase of the rights in the above mentioned plots of land which were subsequently transferred to the ultimate purchasers at the direction and insistence of the assessee. The assessee has failed to explain the source of the same. Thus, the amount of ₹ 3,25,50,000 is treated as deemed to be the income of the assessee as per the provisions of section 69 of the Act and is accordingly added to the total income of the assessee on protective basis. Since the purchaser of the above plots is not the assessee, therefore, substantive addition is being considered in the hands of the final buyers. 5.3. Similar additions were made in AY 2006-07 and 2007-08. 7. Before the CIT(A), the assessee submitted as under:- From the entire material on record, it is clear that. (i) There was Bana chitthi dated 18-1-2005 on stamp of 19-1- 2005 copy is as per Page 13 to 16 English Translation Page 13 to 22 of Paper Book I filed on 6-6-2012 in respect of Agriculture land the purchase in respect of Block no. 540/487/497/ 504/494/509/500/505/505. Total land was that of 157492.50 Sq. Meter i.e. 67.68 Bigha (@ 1 bigha + 2327 Sq. Mtr) out of which Surve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly he has received cheque of ₹ 11,00,000 back. 1. It is not in dispute that your that your appellant has not purchased any of the land mentioned in agreement in question of any payment does not arise. Banakhal money of ₹ 1100000 cheque received back. It is pertinent to note that there is nowhere mentioned of ₹ 1100000 cash received by them as alleged anywhere in said loose paper noting that of page 111 to 118. Of A/22 of sized paper. 2. First statement u/s 132(4) recorded on dated 8-12-2009 never speaks of any such payment by your appellant 3. On examination dated 24-12-2009 of Vivek has told on oath (hat he has cancelled the banachitthi since there were no compliance of any of the terms and conditions that of said agreement and he has filed details alongwith evidence in respect of each block vide his letter dated 27-12-2009 (Please see page 23 torn 46) 4. There after statement of Somabhai recorded on 25-1-2010 i.e. after 47 days of search. He has not laid any evidences that of payment made by your appellant (Please see his statement page 47 to 53) It is pertains to note that while examining Mr. Somabhai on 25-1-2010 and 14-12-2011. Mr. Vivek& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) differs from the price agreed upon in the deed. 22. As alleged by Prajapati lands were transferred consideration as per Banachithi was received before the stipulated date April 2006. However the subsequent transfer of land are done up to 18-6- 2009. The deponents have not explained as to now it was possible that consideration (land) was not passed over even if the total amounts was received by 2006. VI It submitted that we rely upon following Judicial authority (1) P.V. Kalyan sundram 294 ITR 49 (SC) Page 208 to 210 (2) Unless the loose papers are specific (Not Vague ) Addition cannot be made Jawaharbhai Atmaram Hathahvala 128TTJ 36 (Page 211 to 216) No addition can be made in respect to investment in purchase of property on the basis of statement of third party unless documents bearing signature and hand writing of the assessee are found. (3) Smt. K. V. Laksmi Devi v/s ACIT Page 129 to 137 (Page 217 to 225) No addition on the basis of seized material in the hands of third party unless corroborative evidences found. (4) Saif Alikhan MansuraliV/s ACIT 13 ITR 204 (Page 226 to 232) If the year in which payment were made cannot be exactly as curtained. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has tried to argue that since he is not the ultimate buyer, he did not pay any cash to Somabhai and statement of Shri Somabhai is false. It is observed that the original agreement to sell or the banakhat is dated 18/1/2005 and as per this banakhat, the first installment of 25% was to be paid on 20/1/2005. It is unlikely that appellant came to know about defects in title of land proposed to be sold by this banakhat within 2 days and stopped the payment. Obviously, the amount due on 20/1/2005 was paid by appellant. Similarly, the remaining amounts were also paid by April, 2006. Only subsequently the appellant came to know about certain disputes in respect of these the same rates which was agreed earlier. The entire amount of ₹ 13.02 crore was paid by appellant as advance to Shri Somabhai. Therefore, the fact that the deal did not materialize subsequently is not relevant. 5.9 In view of categorical statement of Shri Somabhai that he received full payment of ₹ 13.02 crores in cash from appellant as per the terms of banakhat the burden on appellant was very heavy to prove that statement of Shri Somabhai is not correct. Appellant was also allowed opportunity fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently payment liability is of purchaser i.e. Mr. Ajay Patel, as premium directly to Government, in some case land Reverse back to owner. (iv) Further the banachitthi is not signed by all the vendors not their power of attorney is brought on record for such transactions and therefore to say that there was legal contract between the sellers and all the purchasers is not proper. In fact at the most contract was with Somabhai. Further they also say that in lieu of certain blocks other blocks were transferred. It is also admitted that through consideration of ₹ 13 crores was received about 9.86 Vighas of land still remained to be transferred. The agreement of sale immovable property is not like sale of goods and it applies to the specific property itself. It is also not made clear as to how the blocks belonging to other person were transferred to fulfill the obligation under banakhat. (v) The A.O. has referred to the statement wherein it is said that Somabhai has stated that some person from assessee's office used to give cash. However till today 'the particular person or persons are not identified. Thus except cancelled banachitthi there is nothing on the record. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office. (xi) There are various inconsistencies. In fact Mr. Ajay Patel has purchased certain blocks during the period of Banachitthi. i.e A/c. year 05-06. If the amounts were paid by cheque has to be considered and only balance amount is to be paid in cash. The seized paper found does not mention the dates. There is no bifurcation of amount received in cash and cheque. Again as per page 117 the total amount of ₹ 130200000 is received in cash as per page 111 the amount is ₹ 12790000. if the papers are considered to be true they must have been prepared some wherein 2006 or thereafter .This amounts has to be reconciled with the amounts received from Ajay S Patel or any other person because the blocks were already transferred in A/c. year 2005-06 itself. In other words if some blocks were already purchased by Ajay Patel during the course of period of agreement there was no need for Vivek Patel to give full cash consideration as per Banachitthi. (1) The Paper on which the amounts were recorded does not refer to any date and also do not contain names of the assessee and Ajay Patel. (2) Mr. Pankaj was not at all party to the agreement nor was he holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Somabai has stated that they have executed the remaining block number sale deed also. However the sale deeds in respect of the following blocks lands block 540, 487, 497, and 509 (some portion) are not yet done. (8) The question no 8 is to be noted it is a leading question. The I.T. Officer suggests the name of Vivek Patel Again the person from Vivek Patel's office is not yet identified. (9) In Q 10 he has stated that documents were executed with the persons stated by Vivek Patel. However the statement is not believable as Vivek Patel is not confirming party. (10) As regards amount of ₹ 1100000/- please refer Q no 4 and reply as per statement of Somabhai A Prajapati and please refer statement of Mr Vivek Dated 24-12-2009 Q no 7 its reply Q. 9 and its replay Q 10 and its reply Q No 11 and its reply. Mr.Somabhai never shown Mr. Vivek Statement dated 24-12-2009 which is on record as on 25-1- 2010 and 14-12-2011 which statement of Mr. Somabhai was recorded, reason best known to authority: No material brought on record that how Vivek suppose to Pay such a huge amount without any security Viz. Possession of land and/or other material which have i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2011 i.e. after 10 days. (xii). During the course of search the statement of Somabhai Ambalal Prajapati was recorded on 25-1-2010 i.e. after the statement recorded of Mr. Vivek which was on 24-12-2009 no reference was given to Mr. Somabhai regarding say of Mr.Vivek as per his statement dated 24-12-2009 and /or his submission dated 27-12-2009 filed on 29-12-2009 alongwith evidence. Alongwith the banakhat a loose paper recording certain amounts were also found. Mr. Somabhai Ambalal Prajapati has not clarified on the same. The statement of Mr. Pankaj Prajapati was recorded on 13- 12-2011. In the statement he has clarified that the amount recorded on the paper are amounts recorded on the loose paper are in respect of amounts received as consideration towards agreement earlier reference to. It is not known whether there was search warrants in respect of Mr. Pankaj S Prajapti and any statement recorded of said Pankaj at the stage of search. Further it is also not know to us that how many persons statement were recorded at the time of search. (xiii) He also stated that the land/plots were transferred to Mr. Ajay Patel. It was brought to the notice of the learned A.O. that the state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount received by them on respective date what is onward transactions of said amount i.e. amount 18-1-2005 1100000 Where it has gone no such details brought on record 20-1-2005 31450000 Where it has gone no such details brought on record 20-6-2005 32550000 Where it has gone no such details brought on record 20-11-2005 32550000 Where it has gone no such details brought on record 20-4-2006 32550000 Where it has gone no such details brought on record (i) On facts it is clear that no prudent man will purchase such disturbed land without fulfilling condition as per Cl. 3 to cl 7 in fact they failed to satisfy the said conditions (ii) No Prudent man will pay such a huge amount when there is no possibility of deal will go through. (iii) No Prudent man will give such a huge amount without any security or surety of such payment (iv) No prudent man will let go his valuable right if at all one is having the same no such material brought on record entire exercise is to make use of said dead paper, for their motivated object to get benefit under the Act to curtail the tax liability disclosing their unaccounted money. (v) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that at that time cash was given back. However the signature of recipient of cash or any such document is not available. Thus the whole addition is based on the statement of the prajapati. As the same affects the assessee the proper opportunity should be given to cross examine. Mr.Pankaj Prajapati and Mr. Somabhai Prajapati. Reliance is placed on 210 ITR 103 The statement of the witnesses clearly show that they are hostile to the assessee. Again the relevant details i.e. return of income filed by the deponents is also required for the purpose of effective cross examination. (xviii) In view of the facts material on record Asstt. Commissioner of Income tax has done great injustice to your appellant in taxing alleged amount of which no head and tail it will be clear from the facts that one has started with wrong premises, drawing wrong inference and came to wrong conclusion. 9. On the other hand, the written submissions filed by the DR as under:- The appellant has questioned the assessment of various amounts in view of the under mentioned facts: a. He is not the buyer. b. He cancelled the agreement with Somabhai Prajapati and relatives to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torney dated 18.06.2009 was impounded from Arbuda Bricks, New Vadaj, Ahmedabad during the course of survey u/s. 133A. This is mentioned in page 17 of the CIT(A)'s order in Ajay S. Patel's case. This shows that Vishnu Prajapati was empowered Vivek Patel on jf 18.06.2009 to carry out necessary legal matters in connection with the sale of land Block No. 513 (which was sold to Ajay S. Patel). This clearly shows that Shri Vivek Patel continued his relationship with the Prajapati's as per the agreement dated 18.01.2005 (Copy of Power enclosed). 13. It is clear that Vivek Patel is making false statement when he says in his Cross Examination by Ajay Patel on 14.08.2012 (CIT(A)'s page 35, Q. 11 Ajay S. Patel) and reexamination on 04.09.2012 page 38 CIT(A)'s Q. 10, that he has been knowing Ajay Patel only after the search of Somabhai Prajapati. The Power of Attorney reveals that Vivek Patel knew Ajay Patel at least six months before the search in the course of his dealings relating to land Block 513. It should therefore be concluded that all statements made by Vivek Patel, not supported by documentary evidence should be disbelieved. 14. Hence the agreement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 before your honour. The issue involved was with regard to addition made u/s 69 of the Act in respect of real estate transactions as under: A.Y Addition Made A.Y. 2005-06 32550000 A.Y.2006-07 65100000 A.Y. 2007-08 32550000 3. The Assessing Officer relied upon the MOUs dated 28/01/2005 found during the course of Search/Survey and also statement recorded of the seller of the land viz. Prajapati group represented by Shri Somabhai A Prajapati. As per the documents seized/ impounded, the assessee, had entered into an MOU with the Prajapati Group for sale of land at Bhadaj located at various Survey Nos, subject to periodic payments. However, during the course of assessment proceedings, the assessee, Shri Vivek Prahladbhai Patel took a stand that he did not make the payments as per MOU since the MOU dated 28/01/2005 had been cancelled. The Additions made was confirmed by the Ld. CIT(A)-III, Ahmedabad. 4. The assessee preferred appeal against the CIT(A)'s order. During the appellate proceedings before your hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shnubhai Ambalal Prajapati and the assessee could not explain the source of such investment made by him. According to the Assessing Officer, in the course of search and seizure proceedings conducted in the case of Shri Somabhai Ambalal Prajapati, an agreement to sale (Banachithi) was found. The said agreement to sale (Banachithi) was executed on 18.01.2005 between the assessee on one hand and Shri Somabhai A. Prajapati, Shri Vishnubhai A. Prajapati Shri Chandubhai A. Prajapati on the other hand. As per this signed document, the assessee agreed to purchase 9 plots of land from the said three persons. The plots of land which the assessee agreed to purchase were as under: 11. Further, as per agreement, the assessee paid ₹ 11 lacs to the said three persons and agreed to pay balance of ₹ 13.02 crores as installment during the period from 20.01.2005 to 20.04.2006. 12. Further, one of the seller viz. Shri Somabhai A. Prajapati in his statement made before the Assessing Officer on 14.12.2011 has stated that the said agreement to sale (Banachithi) was acted upon and received the entire consideration of ₹ 13.02 crores mentioned in the said agreement to sale (Banachi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement to sale (Banachithi) was entered into on 18.01.2005 but the same was never acted upon by both the parties. He pointed out that as per agreement to sale (Banachithi), the assessee was to purchase 9 plots of land from the three brothers viz. Shri Somabhai A. Prajapati, Shri Vishnubhai A. Prajapati Shri Chandubhai A. Prajapati; but not a single plot of land was ever purchased by the assessee. He pointed out that out of 9 plots of land mentioned in the agreement to sale (Banachithi), in fact 4 plot Nos. 509, 500, 494 504 were sold by seller to one Shri Ajay S. Patel vide registered deeds executed on 25.07.2005, 02.08.2005, 25.07.2005 and 02.08.2005 respectively. Copies of the said deeds are placed at page nos. 130 to 162 of the paper-book filed (in the case of Shri Ajay S. Patel). 15. Further, it was stated that plot Nos.505 502 sold by Prajapati family to one Shri Chirag Dhirubhai alias Dhirajlal Amin vide registration No.AHD-2VDJ/8510/9/17 of 2010 dated 13.05.2010 and copy of the said registered sale deed is placed on record. Further, remaining 3 plots of land were not sold by Prajapati family to any person till 14.08.2012 which was admitted by Shri Somabhai A. Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prajapati claimed that on insistence of the assessee 4 plots of land were sold to Shri Ajay S. Patel and 2 plots of land were sold to Shri Dhirubhai Amin; but no material could be brought on record to substantiate the factum of alleged insistence of the assessee. Further, it is observed that Shri Somabhai A. Prajapati, in reply to question no.10 in his statement recorded u/s 131 on 14.12.2011 has stated that the amount received by him from the actual purchasers at the time of execution of sale deed was returned by him to the assessee. Thus, it is observed that it is an admitted fact that Shri Somabhai A. Prajapati received consideration for sale of 9 plots of land from the purchasers in whose favour registered sale deeds were executed and no material could be brought on record to show that the said sale consideration was paid by Shri Somabhai A. Prajapati to the assessee. Further, as per the statement of Shri Somabhai A. Prajapati, though the agreement of sale dated 18.01.2005 executed between him and his brothers and the assessee was in respect of 9 numbers of specific plots, but later on 3 plots of land bearing Nos.540, 487 and 497, out of the same was exchanged with 3 similar si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves that ₹ 11,00,000/- was paid by the assessee on 18.01.2005 and agreed to pay the balance amount on future dates. In the facts of the instant case, the said agreement does not prove the balance agreed amount was actually paid at any time leave aside at the stipulated time. Therefore, in our considered view, the agreement is a material to conclude that investment of ₹ 11,00,000/- was made by the assessee on 18.01.2005 and for no further investment. Therefore, in the circumstance, the addition of an amount more than ₹ 11,00,000/- made in the Assessment Year 2005-06 and the amounts for which the additions were made in Assessment Year 2006-07 and 2007-08 are not sustainable. 18. Further, in respect of ₹ 11,00,000/-, the assessee claimed that the amount was paid by cheque and the said cheque was taken back by the assessee; whereas, Shri Somabhai A. Prajapati in his statement claimed that ₹ 11,00,000/- was received by him in cash. We find from a reading of the agreement that nowhere the agreement shows that ₹ 11,00,000/- was paid by cheque. The assessee could not bring any material to show that ₹ 11,00,000/- was paid by him to Shri Somabhai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
