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2015 (10) TMI 2507 - ITAT AHMEDABAD

2015 (10) TMI 2507 - ITAT AHMEDABAD - TMI - On-money received in cash - AO branding the assessee as trader in the land - assessement u/s 153A - Held that:- As we have held that the assessee is not a trader. Therefore, if any cash component received by him, the same be treated as receipt from transfer of agricultural land exempt from tax. - Addition u/s 50C - Sale of land - addition on between the sale consideration shown in the sale deed vis-a-vis the value on which the stamp duty was paid - .....

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nsfer. Thus, a conjoint reading of both sections would indicate that while calculating the capital gain under section 48, the value adopted for the payment of the stamp duty would be considered as full sale consideration received or accrued to the assessee on transfer of a capital asset. In the present case no capital gain computation is there. The assessee is a purchaser therefore deeming fiction provided under section 50C cannot be applied upon the assessee. - Addition on account of accrue .....

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fficient incomplete evidence, the assessee cannot be burdened with taxability. Thus additions deleted - Addition on opening capital balance - Held that:- This aspect needs verification. The AO has not recorded any categorical finding on this issue. We direct the AO to verify whether the assessee has filed the balance sheet with the return of income in earlier years, more particularly, for the Asstt.Year 2002-03 and disclosed the capital balance in the closing account at ₹ 19,11,522/-, .....

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found during the course of search carried out during the accounting period 2009-10. We find no error in the finding of the ld.CIT(A), which is confirmed - Addition on cash credit - Held that:- A perusal of the finding recorded by the CIT(A) would indicate that the seized documents pertained to Asstt.Year 2001-02. These are loans taken by M/s.Liberty Polymers Industries and not by the assessee. Therefore, their additions cannot be made in the hands of the assessee, more so, in the Asstt.Yea .....

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ted. The AO did not find unexplained investment during the course of search. Thus, we do not find any error in the findings of the ld.CIT(A) in deleting the addition - Undisclosed investment - Addition on account of some rough working - CIT(A) deleted addition - Held that:- First Appellate Authority has deleted the addition on the ground that it is difficult to infer the nature of income whether the investment or otherwise. The entries reflected in the seized paper do not goad adjudicating a .....

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UNTANT MEMBER For the Appellant: Shri Dhiren Shah For the Respondent: Shri Surendra Kumar, CIT-DR O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: Out of the present bunch of eight appeals, six are directed at the instance of the assessee against separate orders of the ld.CIT(A) dated 01.09.2011 in the Asstt.Years 2003-04 to 2008-09 respectively. In the Asstt Year 2007-08 and 2009-10, the department is also in appeal before us. Since common issues are involved, therefore, we heard all the appeals to .....

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e Income Tax (Appellate Tribunal) Rules 1963. They are descriptive and argumentative in nature. The assessee has annexed a prayer clause at the end of the grounds of appeal, which exhibits his grievance in both the assessment years. This clause in both the assessment years read as under: Asstt.Year 2007-08 (Assessee s Appeal) 1. The addition of ₹ 1,03,90,705/- confirmed by the ld.CIT(A) on account of unaccounted cash receipts treating the same as business income from alleged land deal out .....

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377; 53,04,675/- and ₹ 29,93,800/- relying on the notings in the seized materials out of ₹ 1,86,53,180/-. 2. The ld.CIT(A) further erred in law and on facts and circumstances of the case by deleting addition made of ₹ 5,94,075/- on account of difference in other jantri rate as the assessee had accepted the value as per Deputy Collector Stamps Duty Valuation Cell, Gandhinagar and paid the additional stamp duty thereon. 4. On the facts and in the circumstances of the case, the ld .....

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come offered by the appellant in the return of income. 3. The addition of ₹ 2,55,000/- on account of interest income on alleged advances treating the same as accrued interest confirmed by the ld.CIT(A) may kindly be deleted. 4. Such and further relief as the nature and circumstances of the case may justify. 4. Brief facts of the case are that a search and seizure operation under section 132 of the Income Tax Act was carried in the group cases of Adi Avirat on 23.5.2008. Residential premise .....

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rs 2007-08 and 2008-09 respectively. The AO had issued a notice under section 142 along with questionnaire upon the assessee on 21.9.2010. He further issued a fresh notice under section 143(2) alongwith a questionnaire under section 142(1) on 22.10.2010, because, the incumbent in the seat of the AO has changed. The ld.AO apart from making addition to the total income of the assessee in both the assessment years has raised peripheral issues, viz. (a) assessee did not cooperate with the department .....

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erned, we will revert back in the later part of this order, but, firstly, we want to focus only on the main addition made by the AO. As far as main issues are concerned, the grounds taken by respectively parties in these three appeals are common. The facts relevant to the main additions are as under: 5. During the course of search proceedings, loose paper which has been marked as page no.72 and 73 of Annexure AS-5 were found. The whole dispute in these appeals is depended upon the construction/ .....

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1242 : 5827 1212-14865 1246-1243:5827 1239-3449 1241:4519 1247-4043 1238:4481 1240-3805 =20654 1249-6540 half thereof would be 10327 1244-10940 Cheque 1422200 - Block 1215 = 0.29.00 68614 Block 1245 = 0.06.00 /29.48 X 900000 = 2,65,37,430 Pareshbhai 13268715/- 2389500/- 15658215 1220-6540 1233-5827 - 12367 dividend by 5.31 vigha X 900000 Cheque 80410 Cheque 1422200 4779000 ÷ 2 2226300 Pareshbhai 2389500 2389500 6.5 On the back side of page number 73 the following entries are appearing: Ca .....

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deed. The assessee had received cash components on sale of these lands, which was not further given to the original land owners, and therefore, income ought to be assessed in the hands of the assessee. He noticed the details of land, name of seller, name of purchaser, date of registration of sale as per registered sale deed in tabular form. These details pertained to all the survey numbers mentioned at page no.72 and 73 of the annexure AS-5 found during the course of search. It is pertinent to t .....

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Paresh Babubhai Patel) 1228, 1229, 1235, 1248 24497 Rajkeshkumar 02.11.2007 6981645/- 1230, 1235, Rameshbhai Patel 1248 & Others 786 8086 Ishwarbhai Rajkeshkumar 02.11.2007 1018836/- Jethidas Patel & Rameshbhai Patel Others (POA & Others Paresh Babubhai Patel) 1232 5827 Ishwarbhai Rajkeshkumar 02.11.2007 1660695/- Jethidas Patel & Rameshbhai Patel Others (POA & Others Paresh Babubhai Patel) 1218 3092 Gabhaji Nathaji Jagdishbhai 18.01.2008 882000/- Thakore &Others Bhagwan .....

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e of Reg. Sales as per Reg. sale deed. 1250 7729 Champaben Naranbhai Others & Kanubhai M. Patel & Others 27/12/2006 1005000/- 1243 4043 -do-do-do- 525600/- 1251 13200 -do-do-do- 1716000/- 1247 4043 -do-do-do- 525600/- 1240 3805 -do-do-do- 501000/- 1212 14865 -do-do-do- 1932540/- 1239 3449 -do-do-do- 448380/- 1249 6540 -do-do-do- 850500/- 29.48 Vigha 7504620/- Survey No. Area Sq.Mtr. Name of the seller Name of the purchaser Date of Reg. Sales as per Reg. sale deed. 1244 10940 Champaben Na .....

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ld three survey numbers bearing no.1244, 1220, 1233, admeasuring total land of 23307 sq.meters equivalent to 10.02 vighas, in which the assessee has half share of the land. The details of these land have been narrated by the AO at page no.25 of the assessment order, which reads as under: Survey No. Area Sq.Mtr. Name of the seller Name of the purchaser Date of Reg. Sales as per Reg. sale deed. 1244 10940 Pareshbhai Kanubhai M. Patel 27/12/06 1422200/- Babubhai Pael & Mavjibhai Haribhai Desai .....

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ld at the rate of ₹ 9,00,000/- per vigha. Therefore, he debited sale consideration disclosed in the sale deed from the total sale consideration worked out by applying rate of ₹ 9,00,000/- per vigha. The working made by him read as under: Value of the land =26 vigha x ₹ 9,00,000/- = ₹ 2,34,00,000/- Value shown in sale deeds= ₹ 77,04,620/- Cash Received ₹ 1,56,95,380/- 9. Similarly, with regard to the land owned by the assessee in joint ownership along with Shri .....

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e of seller the Name of purchaser the Date of Reg. Sales as per Reg. sale deed. 1250 7729 Champaben Naranbhai Others & Kanubhai M. Patel & Others 27/12/2006 1005000/- 1243 4043 -do-do-do- 525600/- 1251 13200 -do-do-do- 1716000/- 1247 4043 -do-do-do- 525600/- 1240 3805 -do-do-do- 501000/- 1212 14865 -do-do-do- 1932540/- 1239 3449 -do-do-do- 448380/- 1249 6540 -do-do-do- 850500/- 1215 2900 Lilaben Thakore & Others Champaben Naranbhai Others & 5/11/06 200000/- 26 Vigha 7704620/- 11. .....

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een sold at the rate of 900,000 per Bigha at ₹ 265,37,430. 50% of this amount amounting to ₹ 132,68,715 has been mentioned against the name of Shri Pareshbhai, the appellant. Against this, cheque amount of ₹ 14, 22,200 only has been mentioned as received . The sale of two blocks, namely 1220 and 1233 total admeasuring to 12 367 m2 (5.31 Bigha) at the rate of Rs'90.0,000.is shown at ₹ 47,79,000. Against this amount receipt of ₹ 804,100 has been mentioned. As the .....

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ed as correct. In the same page the total sale consideration of ₹ 23,89,500 in respect of these two blocks has been written against the name of the appellant under the figure of ₹ 132,68,715 being the 50% share of the appellant in block number 1250, 1243, 1251, 1212, 1238,1247, 1240, 1249 and 1244. It shows that the appellant had 50% interest in these blocks also. Even though,-these blocks are shown in the name of some other fanners, the statement of the appellant recorded on 23/5/20 .....

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at the time of the final sale by the appellant, the original seller (farmers) has signed in the sale deed. It may be mentioned that the date of registration of this land is shown at 27/12/2006. Therefore, the authenticity of the transactions recorded in these pages cannot be doubted. 6.7. On the right-hand side of page number 73, the area of 20,654 m2 in respect of four blocks of land namely 1242, 1243, 1241 and 1238 is mentioned. 50% of this has been shown at 10,327 m2 for Vadsar land. 6.8. Fur .....

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12,485 as balance. 6.9. From the above mentioned entries it is clear that they are the actual transactions of sale of land and-the receipt of cash and cheques on various dates as mentioned above. Against the name of the appellant an entry of ₹ 132,68,715 is mentioned at the middle of the page and another entry of ₹ 23,89,500 has been mentioned at the bottom of the page number 73. In other words, the appellant has received total amount of ₹ 156,58,215 including the cheque amount .....

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of ₹ 22,26,300 against the sale of the properties till 7/12/2006. Therefore, the cash component mentioned against his name in this paper is to be presumed to have been received by the appellant. Because, the contents of the paper either are correct or incorrect. It cannot be partly correct and partly incorrect. Since the cheque amount against the. sale of the two blocks number 1220 and 1233 has not been disputed by the appellant, the cash amount shown along with the cheque amount also mus .....

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two pages are pertaining to the transactions of land sale by the appellant: 6.10. It may be mentioned that the AO has wrongly included the survey number 1215 admeasuring 2900 m2 in page number 24 of the assessment order for working out the on money (cash) received by the appellant. I have verified the seized material and found that the survey number 1215 admeasuring 2900 m2 and survey number 1245 admeasuring 600 m2 have been shown under the head of remaining/pending alongwith other survey numbe .....

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77; 156,58,215 as per the seized paper number 73. After reducing the 50% of the documented price of the properties being survey number 1250, 1243, 1251, 1212, 1239, 1247, 1240, 1249 and 1244 and also the land bearing survey number 1220 and 1233, the resultant amount would be the unexplained cash component received by the appellant against the sale of these properties. In other words, the total unaccounted income of the appellant would be ₹ 1,56,58,215 - 52,87,510 = ₹ 1,03,90,705 in A .....

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cases. But in the present case, the appellant has himself stated before the AO in the statement recorded on 23/5/2008 that he had bought many properties 10 to 15 years back and got them registered in his name only during last one and half year. Further, even if it is presumed that the appellant has sold the properties on behalf of some other persons as admitted by him in the statement recorded during the course of search, in that case, as per the seized paper the total consideration has been rec .....

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llant. Therefore, to the extent of the amounts shown as received as per page number 73 of Annexure A-S5, the appellant himself had received on money on the sale of the land as mentioned therein. Subject to my directions as mentioned above, in principle, the addition of on money in assessment year 2007-2008 on the basis of the seized paper is partly confirmed. As held earlier, since the working in page number 73 also include the sale of the three blocks namely 1220, 1233 and 1244 owned by the app .....

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Annexure A-S5, the AO held that since the sale of 84,351 m2 (36.24 Bigha) of land appearing at page number 72 have been registered on 2/11/2007 for total amount of ₹ 227,54,361, the value of the land at the rate of ₹ 900,000 per Bigha comes to ₹ 326,16,000- The balance of ₹ 98,61,639 represents the on money received by the appellant which has not been paid to the original sellers of the land. Therefore, the addition of ₹ 98,61,639 was made by him in assessment year .....

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on 132(4) of the Income Tax Act. In reply to question no.6, the assessee has disclosed details of movable and immovable properties in the name of the assessee and his family members. After looking to large number of properties held by the assessee, it was inferred by the AO that the assessee is not a simply agriculturist; b) During the course of search proceedings and in the subsequent inquiry, statement of the assessee was recorded under section 132(4) and 131 of the Act. In these statements, t .....

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isclosed that these properties were purchased in the past, say, five to ten years earlier, but the purchase deed has been executed in his name recently. This indicates that the assessee must have some understanding with the original land owners whose details of the land are mentioned at page nos.72 and 73 of the AS-5, meaning thereby, that the assessee has sold these pieces of land in the capacity of owner. Once the assessee has sold the land as an owner, then any cash component received by him .....

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ed in the hands of the assessee. e) Reading page nos.72 and 73 had indicated that the land was actually sold at the rate of ₹ 9,00,000/- per vigha and cash component received at this rate after debiting the rate mentioned in the registered sale deed ought to be assessed in the hands of the assessee. f) The assessee failed to explain the details narrated on page nos.72 and 73 with plausible evidence, and therefore, these transactions are to be treated as belonging to the assessee. 13. Let u .....

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The search in this case was conducted on 23.5.2008. Section 153B provides limitation for completion of assessment under section 153A. According to clause (a) of sub-section (1), the AO shall make an order of assessment or reassessment in respect of each assessment year falling within six assessment years, referred to in clause (b) of sub-section (1) of section 153 within a period of two years from the end of the financial year in which last of the authorizations for search under section 132 or .....

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rst questionnaire as discernible from the paragraph-2 of the assessment was issued on 21.10.2010. The AO has to pass the assessment order upto 31.12.2010 as emphasized by him. He wasted almost two years, which could be used for providing sufficient opportunity to the assessee for defending himself. All of a sudden, he expected that the assessee should submit everything within two and half months. When the assessee has pointed out that he being heart patient has to get pacemaker replaced, and it .....

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pletion of the assessment order. Therefore, no inquiry should be conducted. In our opinion, it is the AO who took proceedings at a time barred stage by starting the investigation at the fag-end. Therefore, no blame can be put upon the assessee. 14. The next reason assigned by the Revenue authorities and which has ultimate bearing on the controversy is that the assessee is a trader in the land, and therefore, income from the purchase and sale of land is to be assessed as business income. On analy .....

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ssessee had disclosed purchase of 25 pieces of land either in his name or in the name of family members during the last 15 years. Except for five-six pieces of land, all the lands have been purchased during the last two-three years. The assessee has sold plot no.1220 on 27.12.2006. It was purchased on 3.12.2005. Similarly, he sold block no.1233 27.12.2006, which was purchased on 22.2.2006 and block no.1244 sold on 27.12.2006 which was purchased on 5.9.1997. The ld.First Appellate Authority, ther .....

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15. The ld.counsel for the assessee while impugning the order of the CIT(A) contended that the details of property held by the assessee and his family members has been disclosed in reply to question no.6 during the course of search. No doubt the assessee has made investment in purchase of agriculture land. But, it is pertinent to note that these investments were made ten-fifteen years back. These are lands which were purchased from the brother s wife or his brother, out of ancestral land. The as .....

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agent dealing in land. Only piece of land which was purchased by the assessee and sold is mentioned at Sr.No.24, land admeasuring 2800 to 2900 sq.meters forming part and parcel of block no.776 situated in village Vadsad belonging to Keshabhai and three partners was purchased for ₹ 80,000/- 12 years back. This was converted into non-agriculture land and it was sold during the last six years to different persons in the form of plots. Except this one transaction, there is no other transaction .....

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not isolated transactions which are considered by the Revenue authorities. Huge investment made by the assessee in purchase of agriculture land in the last 15 years would indicate that he was carrying out this activity in an organized manner. He has facilitated a number of persons to sell their lands to the builders. Thus, apart from being broker in land dealings, he has traded in land at his own. He relied upon the orders of the Revenue authorities below. 17. We have considered rival contentio .....

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r carried out as a trader or as investor. The transaction may be share trading or in the land. The tests propounded by the Hon ble Court read as under: After analyzing various decisions of the apex court, this court has formulated certain tests to determine as to whether an assessee can be said to be carrying on business. (a) The first test is whether the initial acquisition of the subject-matter of transaction was with the intention of dealing in the item, or with a view to finding an investmen .....

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s stock-in-trade, or has it been shown in the books of account and balance sheet as an investment. This inquiry, though relevant, is not conclusive. (d) The fourth test is as to how the assessee himself has returned the income from such activities and how the Department has dealt with the same in the course of preceding and succeeding assessments. This factor, though not conclusive, can afford good and cogent evidence to judge the nature of the transaction and would be a relevant circumstance to .....

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led with the magnitude of the transaction, bearing reasonable proposition to the strength of holding then an inference can readily be drawn that the activity is in the nature of business. 18. If we visualize the facts of the present case in the light of the above, then it would reveal that the assessee has disclosed purchase of agriculture land either in his name or in his family members names. These details are contained in reply to question no.6 of the statement recorded under section 132(4) o .....

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was retained by the assessee for more than nine years. The ld.CIT(A) has made reference to the stamp duty valuation authority as per details at page no.37. But we failed to understand how the difference between the stamp duty valuation disclosed by the assessee in the sale deed vis-à-vis the rates notified by the stamp duty valuation authority charged from the assessee could goad an adjudicator to say that the assessee is a trader. It is altogether a irrelevant details, which has been con .....

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d. The ld.First Appellate Authority has disclosed the purchase of land at page no.37 of the impugned order, but to our mind, these are only purchases and would indicate as purchased for investment, as there is no immediate sale of this land. The expression business has been defined in sub- section 13 of section (2) of the Act. It includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. This expression has been construed to mean that .....

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held by the assessee, which was purchased for the last 15 years and 3 pieces of land sold by him. Out of these three pieces, one was purchased in 1997, apart from this, the operating force of all the reasoning and the materials is towards earning of commission income by the assessee for facilitating the land transaction. Therefore, in our opinion, the assessee cannot be termed as trader in the land. 19. The next issue is what is quantum of the income arose to the assessee on sale of agriculture .....

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the past, whose documents were registered recently. A reference to this can be made to serial nos.10, 14, 17 and 21 to the property mentioned in reply to question no.6. Thus, according to the AO, once the assessee is in the habit of settling the purchase of land, whose documents can be executed subsequently, would indicate that the assessee must have purchased these pieces of land on power of attorney from the original land owners. When these lands were sold, he has received the purchase price .....

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take note of the replies given by the assessee during the course of search and post- search inquiry. These replies read as under: Statement under section 132(4) dated 23.5.2008 "Q.I6.Whether you and your family members are having any business transaction in any manner with Avirat Group which is connected with construction business wherein main persons are Kanubhai Maganbhai, Sandipbhai Kanubhai, Baldevbhai Maganbhai, Anilbhai Shakarabhai Patel etc. or not? State . A.16. I or my family membe .....

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me at present which is situated in the same village Moti Bhayan in the name of my son Palakbhai and Mavjibhai Haribhai ad measuring about four vighas was also sold to Kanubhai in FY 2007-08 for a consideration of about ₹ 8 lakhs to 10 lakhs. Over and above that, lands of various blocks in same village which are totally ad measuring about 40 vighas which are the lands of the persons other than my family members have been sold through me to Kanubhai Maganbhai and Shri Anilbhai and transacti .....

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nds and, therefore, my commission is yet unpaid Q.28. Today During the course of search proceedings, from your house, loose papers/documents as per file No. AS-5 page no. 1 to 108 are found which have been seized which are having page no. 1 to 108. You check it one by one. I am showing. Serial wise explain the same. A.28. After having seen the aforesaid File NO. AS-5 page no. 1 to 108 in detail,! want to state that all the papers are in respect of the business of purchase/sale of land for which .....

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vjibhai Haribhai Desai and Palakbhai Pareshbhai Patel was sold to Anilbhai Shakarabhai Patel.Ranipwala, price whereof as per document approximately was ₹ 2,00,000.00 per VIgha (Rs.two lakhs only) wherein I had received brokerage at the rate of Vs % and uptil now, towards brokerage, I have received Rs, 1,50,000.00 (Rs. one lakh fifty thousand only) towards brokerage before two months. Said brokerage has been received in cash. Statement dated 13-6-2008. Q.12 I am showing you the books/loose .....

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rein. A. 12 Having seen page no.68 of loose paper File AS-6 shown by you, I am stating that these are the details of the lands of village Moti Bhoyan which were sold by me on commission basis. Seeing this page no.68, I am stating that these are the details of the objections raised for the purpose of title clearance of the respective block number, raised by the advocate. Details thereof are as under, such as, 1218 - To execute document 1231 - To carry out entries 1258 - To carry out entries . 121 .....

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of aforesaid block number of village Moti Bhoyan and at present, said Ishwarbhai Jethidas Patel has settled in America. Jayrambhai is son of Mavjibha Rabari who is doing the work of land broker and as regards Dudhiya, I am not having information about complete name of Dudhiya but out of the lands of aforesaid block number of Moti Bhoyala.certain lands were known as land of Dudhiya. As per my knowledge, it may be possible that banakhat for this land might have been done in his name. Q.14 I am sho .....

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i 13268715/- 2389500/- 15658215/- 1220-6540 1233-5827 12357 divided by 5.31 vigha 47,82,600 x 900000 Cheque 804100 4779000 cheque 1422200 2226300. ÷ 2 Pareshhai-2389500 2389500 See to it and explain about the details written therein. A.14 Aforesaid page no. 73 is part of loose paper file AS/5 which I have read absolutely in peaceful manner and the details written therein and stated in this question are similar. Having seen said page no. 73, I -am stating that the lands of block numbers st .....

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record complete details of revenue record of all these survey numbers. He has placed details of old survey numbers and who was the owner of these lands. The assessee thereafter produced the details of registered sale deed and how the payments have been received. For the example sake, the land bearing survey no.1197 was owned by Ishwarbhai Jethidas Patel and he sold this land to Rajeshkumar Rameshbhai Patel. The payment was made through account payee cheque and the consideration was ₹ 19,1 .....

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ugh account payee cheques. The cheques have been credited to their bank account. The assessee has placed on record similar details with regard other kshara number vis. 1228 to 1230, 1235 and 1248. All these indicated in tabular form are available at page no.796 to 804 of the paper book. The contention of the assessee was that he was having power of attorney only for two persons. All other land owners have sold their land independently through registered sale deed and the payments have been recei .....

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he name of a person when a registered sale deed is being executed as per section 17 of Indian Registration Act. There may be an understanding between two individuals for a transfer of land and documentation might have been registered later on, but then the legal title would vests in the original owner unless and until the transfer has taken place by way of registration of sale deed and by effecting mutation or change of ownership in the land record. The fallacy in the approach of the AO would be .....

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inal land owners. It is also pertinent to note that if the assessee has purchased the land in the past, and therefore, documentation has been executed directly in the name of person mentioned by the assessee i.e. representative of the builder, then whole sale consideration would have come to the assessee and not the only cash components, if any received. 23. It is also worth to note that in case of vendee, the investments disclosed in the sale deed have been accepted. No unexplained investment h .....

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- per vighas. The assessee does not belong to an organized sector of business undertaking. He is an agriculturist working as a commission-agent facilitating sale of agriculture land. The intellectual compatibility of the assessee being an agriculturist and land broker dealing in agriculture land cannot be equated at par with trained Revenue officers, who have recorded his statement under section 132(4)/131 of the Income Tax Act. It is also to be noted that the assessee is a heart patient who has .....

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tegorical terms with regard to other questions. Therefore, the Revenue authorities are not justified in observing that he did not cooperate at the time of search. The assessee disclosed details which he possessed. He has given statement disowning the page no.72 and 73 and later on he has explained the entries in the page along with complete documentary evidences from the Revenue authorities of the State Government. 25 At the cost of repetition, we would like to summarize the following reasoning: .....

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that the assessee in his statement recorded under section 132(4) of the Act on date of search has replied that he has purchased some of the properties five-ten years back and the document has been executed recently. A reference to the reply of the assessee qua question no.6 and property mentioned at serial no10, 14, 17 and 21 can be made. On the basis of this reply, the ld.AO assumed that the assessee must have purchased these lands and he has transferred the land at the rate of ₹ 9,00,000 .....

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ntil the property was not transferred by way of registered sale deed, the assessee could not be termed as owner of the property. If in the past he has acquired certain property with an understanding that sale deed was executed subsequently, that would not mean that for all the transactions, where he has no role to play, he will be construed as owner. If we go by this assumption of the ld.Revenue authorities, then no one can be treated as owner of any property. Apart from above, it is also pertin .....

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ed property 10-12 years ago, and now transferred, then the total sale consideration is to be assessed in the hands of the assessee and not only the alleged cash components. Therefore, neither under section 292C, the AO can presume the assessee as the owner of the land mentioned in these survey numbers nor it brought any evidence on record to establish that assessee was the owner or in possession of the land. The Revenue has accepted the purchase price in the hands of the vendee equivalent to the .....

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, we do not find any error in the conclusion of the Revenue authorities. Once a document is found from the premises of the assessee, then it is the duty of the assessee to explain the contents in the documents. The document is presumably belonged to the assessee and onus is always upon the assessee to explain the documents. In these documents three survey numbers were held by the assessee jointly, which has also been transferred. Meaning thereby, the assessee has information about the noting in .....

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paid to them also through account payee cheques. iv) Forth inference drawn by the AO that the land was transferred at the rate of ₹ 9.00 lakhs per vigha. No doubt a calculation has been made by applying this rate. It is discernible from the pages. However, whether it has been actually acted upon by the parties, no corroborative evidence has been collected by the Revenue nor any attempt was made. The calculation was found from the residence of the assessee, but it does not mean that it was .....

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The whole exercise by the AO in branding the assessee as trader in the land was with an angle that even if on-money received in cash is being calculated, then also no fruitful purpose will be served for the Revenue, because that consideration will be treated as in lieu of transfer of an agriculture land. Such agriculture land will not come within the ambit of capital asset provided under section 2(14) of the Income Tax Act. 27.In the foregoing paragraphs, we have held that the assessee is not a .....

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ng the deletion of ₹ 53,04,675/- and ₹ 29,93,800/- is rejected. 29. Now we take ground no.2 in Revenue s appeal for the Asstt.Year 2007-08. 30. Grievance of the Revenue is that the ld.CIT(A) has erred in deleting the addition of ₹ 5,94,075/- added by the AO. 31. Brief facts of the case are that the assessee had purchased various piece of land through sale deed registered on 5/10 and 10/10/2006. According to the AO, there was a difference of ₹ 5,94,075/- between the sale c .....

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e the relevant provisions for the present controversy. Section 48 of the income Tax Act provides mode of computation of capital gain. It contemplates that the income chargeable under the capital gains shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, viz. (i) expenditure incurred wholly and exclusively in connection with such transfer, and (ii) cost of acquisition of the asset and t .....

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ued as a result of such transfer. Thus, a conjoint reading of both sections would indicate that while calculating the capital gain under section 48, the value adopted for the payment of the stamp duty would be considered as full sale consideration received or accrued to the assessee on transfer of a capital asset. In the present case no capital gain computation is there. The assessee is a purchaser therefore deeming fiction provided under section 50C cannot be applied upon the assessee. The ld.F .....

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ssessee is that the ld.CIT(A) has erred in confirming the addition of ₹ 5,93,265/-, ₹ 7,00,053/-, ₹ 8,26,063/-, ₹ 14,54,008/-, ₹ 75,000/-, ₹ 2,55,000/- respectively in the Asstt.Years 2003-04 to 2008-09. These additions have been made on account of accrued interest income of the assessee. 36. Brief facts of the case are that during the course of search, a page inventorised as page no.62 of annexure AS-5 was found and seized. The copy of this page is available .....

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which interest was charged at the rate of 18%. He calculated the interest for Asstt.Year 2003-04 of ₹ 5,93,265/-. This interest income has been added in the hands of the assessee for the Asstt.Year 2003-04 on the ground that the interest must have been accrued to the assessee in this year. On the strength of similar calculation, he calculated the interest at ₹ 7,00,053/- and in other years i.e. upto the Asstt.Year 2006-07. For the purpose of Asstt.Year 2007-08 and 2008-09, it is obs .....

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d to page no.75 at page no.54 of the impugned order. This contention reads as under: iii) During the course of assessment proceedings, the appellant submitted that notings on Page No.75 is not in his handwriting as well as not in the handwriting of any of appellant's family members. iv) The appellant submitted that during his tenure as a Surpanch of Vadsar Village Panchayat and thereafter, till date, so many parties of Vadsar Village and surrounding areas used to approach him as a mediator f .....

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used to visit him every day and therefore, it is very difficult to remember that the notings made on page no.75 is of which party. The appellant submitted that the details on page no.75 do not belong to the appellant and nothing to do with the same. The appellant has not given any advance / loan as stated on the said page. The appellant has also not received any interest income as stated on the said page and it does not bear the name of the appellant and accordingly, it was requested by the appe .....

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ge no.62 of the Annexure AS/5. The assessee has pleaded that he has been filing the return of income in the past. He has also contended that he worked as a sarpunch of Vadsar village. He does not remember who has left this paper at his residence. According to him various persons visited him for resolving different types of disputes. Someone must have made some calculations and the paper remained there. The stationery used is also of the panchayat. The ld. Revenue authorities have not accepted th .....

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f the paper book. The search team has nowhere confronted the assessee specifically with these two pages. A vague question under question no.28 has been asked. The question is Today during the course of search proceedings from you house loose papers/documents as per file no.AS-5 page no.1 t6o 108 are found, which have been seized which are having page no.1 to 108. You check it one by one. I am showing serial wise, explain the same . The reply of the assessee is after having seen the aforesaid fil .....

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as under an obligation to explain entries in the paper book. But according to the assessee, this paper is neither in his hand writing nor in the hand writing of any family members. This aspect is pleaded time and again before the AO, and it was not got verified. The second arguments taken by the assessee is that he has worked as sarpunch for a quite long time and being a political person, so many people might have visited him. All these papers might be belonged to third-persons who would have vi .....

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to the assessee and on the basis of such insufficient incomplete evidence, the assessee cannot be burdened with taxability. We allow all these grounds of appeal and delete the addition. 43. In the Asstt.Year 2003-04, there is one more ground of appeal, wherein the assessee has pleaded that the ld.CIT(A) has erred in confirming the addition of ₹ 19,11,522/- . 44. Brief facts of the case are that the assessee has shown an opening capital balance of ₹ 19,11,522/-. This balance has been .....

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proved that the investments and the liabilities are pertaining to the period prior to 1/4/2002 The AO is therefore directed to verify whether the appellant has been filing the balance sheet with the return of income in earlier assessment years i.e. assessment years 1989-99, 1999-2000, 2001-2002 and 2002-03. If it is found by him that the appellant has filed the balance sheet with the return of income or the assessment year 2002-03, and in the said return the investment and liabilities are shown .....

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earlier years, then only the addition made by him is directed to be deleted, otherwise the addition would stand confirmed. Subject to this direction, this ground is disposed off. 46. The ld. Counsel for the assessee submitted that there is no power with the CIT(A) to restore any issue. He further drew our attention towards page no.241 to 248 of the paper book. On page no.247, the assessee has placed on record copy of the balance sheet as on 31.3.2002. In the balance sheet the assessee has shown .....

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ed any categorical finding on this issue. We direct the AO to verify whether the assessee has filed the balance sheet with the return of income in earlier years, more particularly, for the Asstt.Year 2002-03 and disclosed the capital balance in the closing account at ₹ 19,11,522/-, then no addition will be made on account of opening capital balance in the Asstt.Year 2003-04. The ld.AO shall carry out this exercise after providing due opportunity of hearing to the assessee. 47. Now, we take .....

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e land at Moti Bhoyan. The assessee further contended that he has offered additional income of ₹ 9,00,000/- for the Asstt.Year 2009-10 and that the telescopic benefit of the cash found be given against this additional income. The AO has made separate addition and did not grant the telescoping benefit. 50. On appeal, the CIT(A) has granted telescopic benefit to the assessee. Once the ld.CIT(A) has accepted the fact that the additional income offered by the assessee of ₹ 9 lakhs can ea .....

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On perusal of these papers, it revealed that the amount totaling to ₹ 7,43,000/- was taken from ten individuals. The assessee has contended that these papers relate to Liberty Polymers Industries, which is a partnership firm where his wife is a partner. The balance sheet of M/s.Liberty Polymers from its books of accounts was filed before the AO. It was contended that these loans were taken long back, and therefore, not assessable in the hands of the assessee. The ld.AO did not accept cont .....

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hat the seized document pertains to assessment year 2001-2002 and it belongs to M/s. Liberty Polymers Industries and not to the appellant as held by the AO in the assessment order. In fact, the AO has not considered the submission of the appellant dated 23/12/2010 filed on 24/12/2010 with the AO. Had he considered the same, the addition would have not been made by him in the hands of the appellant in assessment year 2009-2010 particularly when the documents clearly show the dates as 2000. I have .....

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09-10. The ld.AO has not assigned any particular reasons for treating the income in the hands of the assessee. We, therefore, do not find any error in the order of the CIT(A). This ground of appeal is rejected. 55. In the next ground of appeal, the grievance of Revenue is that the ld.CIT(A) has erred in deleting the addition of ₹ 18,50,000/-. 56. Brief facts of the case are that during the course of search, four promissory notes inventory as page nso.102 to 105 of Annexure AS/5 were found. .....

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lank. The contention of the assesse was that Shri Narayan Shroff has charged a very high interest rate and also asked for collateral securities, and therefore, the transaction was not executed. The ld.AO did not accept this contention of the assessee. He made addition of ₹ 18,50,000/-. 57. On appeal, the ld.CIT(A) in principle agreed with the AO that no person would execute the promissory note in favour of a shroff unless gets finance, but he deleted the addition. The finding of the CIT(A) .....

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ppellant from the shroff nor the same was returned back to him, if the promissory notes were signed by the appellant. The fact that all the promissory notes had been signed by the appellant clearly shows that the loan has been received and repaid by the appellant. No person will sign a promissory note in favour of a Shroff unless be gets the finance from that Shroff. The contention of the AR that the Shroff also denied having paid the cash of ₹ 18.50 Lacs to the appellant, in my view is of .....

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In my view, even if it is accepted that against the promissory notes the appellant has received the cash loan of ₹ 18.50.Lacs and the same was repaid by him to get back, his promissory notes from the Shroff, in that case, the amount of ₹ 18.50 Lacs cannot be termed as the unaccounted income of the appellant. At the most, it can be stated that the appellant had received unaccounted cash loans from the Shroff on which penalty can be initiated by- the AO for violation of section 269 SS .....

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ch finding, the AO can only initiate penalty proceedings for violation of section 269 SS and 269T of the Income-tax Act. Because in the absence of such finding, the source of repayment of cash loan can be stated to be the receipt of cash loan by the appellant from the Shroff. In view of this, the addition of ₹ 18.50 lakhs made by the AO is directed to be deleted. The AO is free to initiate the penalty proceedings under section 271D and 271E of the Income Tax Act for violating the provision .....

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The AO did not find unexplained investment during the course of search. Thus, we do not find any error in the findings of the ld.CIT(A) extracted (supra). This ground of the Revenue is also rejected. 60. The next grievance of the Revenue is that the ld.CIT(A) has erred in deleting the addition of 2,48,570/-. The finding of the ld.CIT(A) on this issue reads as under: 13. I have considered the submissions of the appellant. I have also seen the seized pages 39 and 40 of Annexure AS-1. In fact, entr .....

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