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COMMISSIONER OF INCOME TAX Versus NARVIRSINH R. PARMAR

2016 (6) TMI 980 - GUJARAT HIGH COURT

Undisclosed investment - Addition on the basis of documents (MoU) seized during the course of search / survey - Held that:- On the record, there is nothing to establish the factum of actual payment of purchase price at the rates as mentioned in MoUs by the assessee to the sellers for lands covered by the Agreements for Sale or the MoUs. On the contrary, the Affidavits of all the six sellers found and seized during the search, itself confirm that none of them had received any amount in excess of .....

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um of payment for those lands and that too at the rate mentioned in the MoUs. - The Tribunal was completely justified in deleting the addition - Decided in favour of assessee - TAX APPEAL NO. 574 of 2006 With TAX APPEAL NO. 575 of 2006 - Dated:- 10-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR SUDHIR M MEHTA, ADVOCATE FOR THE OPPONENT : MR MANISH J SHAH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Both these appeals involve identical questions .....

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ion of law: Whether the Appellate Tribunal is right in law and on facts in holding that addition of ₹ 14,64,79,500/- made by the Assessing Officer on the basis of documents seized during the course of search / survey, is not sustainable ? 4. The facts in brief are that on 17.07.2002 a search u/s.132(1) of the Act was conducted at the residential premises of the assessee. At the end of search, the raiding party seized several documents, cash and other valuables. The assessee is a Builder an .....

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CIT(A)II. The CIT(A)II partly allowed the appeal whereby, it sustained the addition of ₹ 6,56,37,650/- pertaining to lands covered under different Memorandum of Understanding (MoU) and ordered deletion of ₹ 8,08,41,850/- pertaining to the remainder of lands. 6. The Department challenged the order of CIT(A)II directing deletion of the addition of ₹ 8,08,41,850/- and assessee challenged the order of sustenance of addition of ₹ 6,56,37,650/- before the Income Tax Appellate T .....

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of Assessing Officer is quite different in comparison to his jurisdiction while making assessment u/s.143(3), 144 or even 147 of the Act. The basis difference between the two assessments is that while computing undisclosed income of the block period, the Assessing Officer cannot go beyond the evidence, books of accounts or any other document/s found and seized at the time of search or information available with him which are related to such documents / books of accounts. 9. The raiding party fou .....

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aid stand of the assessee is not in dispute. The document listed at Sr. No.(g) were with respect to lands other than the lands covered under the Agreements for Sale listed under Sr. No.(f). 9.2 From the contents of the aforesaid documents, it is clear that insofar as lands covered by Agreements for Sale were concerned, the main documents were the Agreements for Sale itself, receipts of payments received by sellers and the Affidavits. The other documents, such as Irrevocable Power of Attorney, Wi .....

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e are of the opinion that the Revenue, having not examined any of the sellers or any other party with respect to the truthfulness of the contents of the Agreements for Sale as well as the consequential Affidavits, the Assessing Officer had no jurisdiction to compute the purchase price of lands mentioned in the Agreements for Sale, on the basis of rates mentioned in the Memorandum of Understandings. We are, therefore, of the opinion that the lower appellate authority, viz. CIT(A), was justified i .....

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any sale price of lands covered by these MoUs or had not received any price, atleast at the rate mentioned in the MoUs, it was absolutely illegal for the Assessing Officer to presume the factum of payment for those lands and that too at the rate mentioned in the MoUs. The findings of the Assessing Officer to that effect are illegal and bad in law since no evidence was brought on record to show that the assessee had, in fact, or in actual, made payment on the basis of said rates. 11. On the reco .....

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