TMI Blog2017 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the original land owners in favour of one Shri Popat Kakadiya and the original land owners have received full sale consideration of ₹ 56,39,500/- . Under the circumstances, it cannot be said that any income had accrued to the assessee. Once no income had accrued to the assessee, the formation of opinion by the AO that the assessee have received ₹ 18,23,19,011/- in cash has been vitiated and as such, for which, there is no basis. Under the circumstances also, the impugned notice to reopen the assessment for AY 2009-10 deserves to be quashed and set aside. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 21691 of 2016 With SPECIAL CIVIL APPLICATION NO. 21741 of 2016 - - - Dated:- 15-2-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR. S.N. SOPARKAR, LD. SR. ADV WITH MR. HARDIK V VORA, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. As common question of law and facts arise in both these petitions, however with respect to different assessee, both these petitions are decided and disposed of together by this common judgment and order. 2.0. Feeling aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the residence of Shri Rajesh Vaghani, one of the partners of the firm M/s. S. R. Corporation, which is a copy of Sauda Chitthi dated 12.03.2008 entered between Shri Alpesh G Kotadia, the assessee and Shri Vinod S Ravani on one hand as seller and Shri Sharad P Kakadia Shri Rajesh Vaghani on other side of the deal as buyers for purchase of land situated at villageVankala, Block No. 49 A, Dist. Surat having area of 30311 sq yard. Therefore, total sale consideration of for above land according to sauda chittihi comes to ₹ 18,79,58,511/- . 2. Further, another pieces of evidence were found and seized from same premises are pages no. 11 and 12 of seized documents given id mark Annexure A2. The two pages under discussion are explained as provisional P L Account of M/s. S.R. Corporation. On perusal of the provisional P L Account, it was noticed that the major entry in the debit side is Land Purchase of ₹ 18,79,58,511/- . 4. The Investigation Wing had called for sale/ purchase deeds of the specific land at Village Vankala, Block No. 49 A, Dist. Surat., wherein it was found that Shri Prakash Vallabhbhai Sutariya, PAN AKGPS9462A, Shri Chintanbhai Jadavbhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 2 the Sauda Chitty was prepared by Shri Alpesh G Kotadia as evidenced by his signature and Shri Vinod S Ravani in the capacity of seller, but the deed was executed between persons mentioned in above table ( sellers) and Shri Popta H Kakadia (purchaser) for consideration of ₹ 56,39,500/- only. In view of the above fact Shri Alpesh G Kotadia and Shri Vinod S Ravani has received balance amount of ₹ 18,23,19,011/- in cash. 6. Assessment Order u/s 143(3) r.w.s. 153 A of the Income Tax Act, 1961 in the case of the assesseeShri Vinod Shamjibhai Ravani, has already been passed at an assessed income of ₹ 5,92,969/- on 21.03.2013. The assessee is a partner in M/s. Shrusti Corporation, Sarjan Corporation, Ravani Developers and Swapna Enterprise engaged in the business of real estate development .On further perusal of the sauda chitthi dated 12.03.2008, it is narrated therein that the period of total payment shall be 24 months which falls in hte FY 2008-09 relevant to AY 2009-10 as per the given percentage therein as follows: (i) 1st Installment 30% starting from the present date (i.e. 12.03.2008) to 31 days. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 12.03.2008 and got cancelled immediately as confirmed by the person from whom copy of the same was found. Further final sale deed was made by altogether different buyers and sellers on 27 and 28 March 2008. Thus, the transaction is pertaining to AY 2008-09 whereas the reopening is made for AY 2009-10; (iii) There is no corroborative or any other evidence to show that the payment has been received by assessee: (iv) In the statement recorded under section 132(4) buyer, from whose possession copy of sauda chitthi was found has confirmed the fact that said sauda chitthi was cancelled and no payment was ever made to assessee and they have directly purchased the land from farmers; (v) Loose paper alone cannot be made the basis of addition without any evidence; (vi) Reasons recorded clearly suggest that it was based on outside information and assessing officer has neither applied his mind nor satisfied himself before recording reasons to the effect that income of assessee was actually escaped assessment during the year under consideration. When both sauda chitthi and sale deed were not made in the year under consideration, there cannot be any income escaped from those tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at even from the statement of Shri Rajesh Vaghani during the course of search, the person from whose possession sauda chitthi was found, had categorically stated on oath in the statement recorded under Section 132(4) of the Act that the said sauda chitthi was cancelled and the transaction of sale of the property was made subsequently on 27.03.2008 between two buyers and sellers. It is submitted that therefore in absence of any tangible material available with the AO to form a reasonable belief that any income by cash was received by the assessee, the AO is not justified in reopening the concluded the assessment under Section 143(3) of the Act on mere suspicious and surmise and conjectures. 5.2. It is further submitted by Shri Soparkar, learned counsel for the petitionerassessee that even the land never belonged to either of the assessee or his family members or related parties. Even the assessee is also not party to the actual sale transaction of land. It is submitted that therefore, there is no corroborative or any other evidence to show that any payment has been received by the assessee. 5.3. It is further submitted by Shri Soparkar, learned counsel for the petitionerassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,19,011/- towards conversion of agricultural land to non agricultural land and removing unauthorized occupant of the property. However, when he was asked to give the name and address of the parties to whom such payments were made, he has categorically admitted that all the payments were made in cash and he not remembering the name and address of the parties. It is submitted that therefore, there was huge difference with respect to sale consideration mentioned in the sauda chitthi signed by the petitionersassessee signed in the capacity of seller, the AO has rightly formed the belief that the petitionersassessee have received the balance amount of ₹ 18,23,19,011/- in cash. 6.1. Now, so far as contention on behalf of the petitionersassessee that as the sauda chitthi dated 12.03.2008 falls within the AY 2008-09 and therefore, the AO is not justified in reopening the assessment for AY 2009-10 on the ground that the income chargeable to tax has escaped assessment for AY 2009-10, it is vehemently submitted that in the sauda chitthi it is stated that the period of total payment shall be 24 months which falls in the FY 2008-09 relevant to AY 2009-10. It is submitted that therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, nothing is on record that any sale consideration was received by the respective petitionersassessee. Therefore, merely on the basis of the sauda chitthi dated 12.03.2008 signed by the respective petitionersassessee (signed and executed though admittedly they were not owners of land for which the sauda chitthi was executed / signed), it cannot be said that any amount is received by the petitionersassessee. 7.3. Even considering the statement of Shri Rajesh Vaghani, upon which much reliance has been placed by the revenue /AO, he has categorically stated that the sauda chitthi dated 12.03.2008 was subsequently immediately cancelled. From the statement of the said Shri Rajesh Vaghani, it does not appear that he has stated that he paid any amount to the respective petitioners. Under the circumstances, as such there is no tangible material available with the AO to form a reasonable belief that the amount of ₹ 18,23,19,011/- has been received by the respective petitioners assessee in cash. As observed herein above, as such there is no material whatsoever with the AO that any amount of sale consideration has been received by the respective petitioners assessee. The formati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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