TMI Blog2017 (3) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered with the SubRegistrar on 25.07.2008 and the payment of ₹ 5,23,000/- with regard to said transfer was received by assessee vide cheque no. 193533 on 3.4.2008, the transfer of land as well as sale consideration has been received by the assessee in AY 2009-10 and therefore, impugned notice is valid. However, from the sale deed dated 27.03.2008, it appears that entire sale consideration has been paid vide cheque dated 27.03.208.. Even otherwise, as per the decision of the Full Bench of this Court in the case of Hormasji Mancharji Vaid (2001 (6) TMI 58 - GUJARAT High Court ), the capital gain under Section 45 of the Act arises in the year of execution of deed and not when the same was registered with the office of the Sub-Registrar. Under the circumstances also, the AO has materially erred in forming the opinion that any income chargeable to tax has escaped assessment for the year 2009-10.Thus impugned proceedings for reopening of the assessment for AY 2009-10 and the impugned notices cannot be sustained and same deserve to be quashed and set aside. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 21609 of 2016 TO SPECIAL CIVIL APPLICATION NO. 21610 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of Section 147 of the Act. That at the request of assessee, AO has furnished the reasons recorded to reopen the assessment for AY 2009-10, which read as under: In this case assessee has filed his return of income for AY 2009-10 on 22.02.2009 at ₹ 5,30,150/- - On the basis of records available with this office and information received from DCIT, Central Circle4, Surat it is noticed/unearthed that: 1.Assessee along with one other person has sold a land situated at Village Vankala, RS No.41, Block No.49A, Dist. Surat at a sale consideration of ₹ 10,46,000/- . The said land was purchased by Shri Popat H. Kakadia, Father of Shri Sharad P. Kakadia. 2.The following information/documents provided by the DCIT, Central Circle4, Surat which was gathered during the search action u/s. 132 of the I.T.Act, 1961 on 28.11.2013 in 'Vaishno Devi Group' of Surat. These information/documents were analysed as under: A.Document marked as Page No.25 of AnnexureA7 found and seized from the residence of Shri Rajesh Vaghani, one of the partners of the firm M/s. S.R. Corporation: This is a copy of 'Saudha Chitty' dated 12.03.2008 entered into betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SRT/1/ATV/13004/2008 8336.051 Sq. Yards Shri Rajendra Kumar Kantilal Patel Shri Paraskumar Natwarlal Patel Shri Popat Harjibhai Kakadia Rs.10,46,000 3 SRT/1/ATV/13007/2008 7577.793 Sq. Yards Shri Prakashbhai Vallabhbhai Sutaria Shri Popat Haribhai Kakadia Rs.15,84,000 TOTAL 30311 SY Rs.56,39,500 From the perusal of above table and sauda chhitthi mentioned at para2 above, it is clear that Shri Paraskumar Natvarlal Patel along with Rajendrakumar Kantilal Patel has sold land having area of 8336.051 Sq. Yrd as mention at Sr. No.2 in table and registered deed was executed at ₹ 10,46,000/- only. As per the seized material/sauda chhitthi and discussion made above it is established fact that actual consideration for land sold by Shri Paraskumar Natvarlal Patel along with Rajendrakumar Kantilal Patel was ₹ 5,16,91,852/- ( 8336.051 x 6201). Therefore, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersassessee and Shri Sudhir Mehta, learned counsel has appeared on behalf of the revenue. 4.1. Shri J.P. Shah, learned counsel for the petitionersassessee has vehemently submitted that the impugned notice and reopening of the assessment for 2009-10 are absolutely bad in law. 4.2. It is vehemently submitted by Shri J.P. Shah, learned counsel for the petitioners assessee that as such there is no tangible material available with the Assessing Officer to form reasonable belief that the income chargeable to tax has escaped assessment in the year 2009-10. It is submitted that formation of opinion by the Assessing Officer that income chargeable to tax in 2009-10 has escaped assessment is based on surmise and conjectures which cannot be the basis to reopen the assessment under Section 147 of the Act. 4.3. It is vehemently submitted by Shri J.P. Shah, learned counsel for the petitioners assessee that the Assessing Officer has materially erred in forming the opinion / belief that any amount chargeable to tax has escaped assessment in the year 2009-10. It is vehemently submitted by Shri J.P. Shah, learned counsel for the petitioners assessee that the petitionerassessee had executed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rssellers and Popatbhai Kakadia on 27.03.2008, how can Shri Alpesh Kotadia and Shri Vinod Ravani entered into a sauda chittihi on 12.03.2008 to Sharda Kakadia and Rajesh Vaghani of the land which Shri Alpesh Kakadia and Shri Vinod Ravani were not owning and in that case how can unaccounted capital gain arise in case of two of real sellers of the land i.e. Shri Rajendra Patel and Shri Parasbhai (petitioners). 4.7. It is submitted that therefore, there is no tangible material available with the AO to form a reasonable belief that the income chargeable to tax in the year 2009-10 has escaped assessment within the meaning of Section 147 of the Act. Making above submissions and relying upon the above decision, it is requested to allow the present petitions and to quash and set aside the impugned notices and reassessment proceeding for AY 2009-10. 5.0. Both these petitions are vehemently opposed by Shri Sudhir Mehta, learned counsel for the revenue. 5.1. It is vehemently submitted by Shri Sudhir Mehta, learned counsel for the revenue that after considering the material on record, more particularly, sauda chittihi dated 12.03.2008 and the statement of Shri Rajesh Vaghani at whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly submitted by Shri Sudhir Mehta, learned counsel for the revenue that it is found from the provisional P L account of SR Corporation, seized during the search proceedings that Shri Popatbhai Kakadia brought the land into partnership firm showing the value of land, much more than mentioned in the sale deed. It is submitted that it is found from the provisional P L Account of M/s. SR Corporation that major entry in the debit side is land purchase of ₹ 18,79,58,511/- which match with the amount mentioned in the sauda chittihi dated 12.03.2008. It is submitted that therefore, the impugned notices under Section 148 of the Act to reopen the reassessment proceedings for AY 2009-10 are absolutely in accordance with law. It is submitted that ample opportunity shall be given to the respective assessee at the time of framing of reassessment proceedings. Making above submissions, it is requested to dismiss the present petitions. 6.0. Heard the learned counsel for the respective parties at length. We have perused and considered the reasons recorded to reopen the assessment for AY 2009-10. We have also perused and considered the statement of Shri Rajesh Vaghani, on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deeds are executed by the petitioners as owners /- sellers and one Shri Popat Kakadia on 27.03.2008. Therefore, on the basis of the aforesaid sauda chittihi, AO could not have formed the opinion /- reasonable belief that the sellers have received ₹ 5,16,91,852/as sale consideration. There is no other tangible material with the AO, by which, it can prima facie be considered that ₹ 5,16,91,852/- has been received by the sellers as sale consideration. 7.0. It is also required to be noted that Shri Rajesh Vaghani in his statement has categorically stated that land has been purchased for sale consideration of ₹ 10,46,000/- and ₹ 18,23,19,011/- was spent on conversion of total agricultural land to non agricultural land and for evicting the unauthorized occupants of the land. By that itself, it cannot be said that the said amount was received by the petitionerssellers as on money in cash and therefore, the same cannot be treated as unaccounted income in the hands of the assessee. 8.0. Now, so far as the provisional P L Account of M/s. SR Corporation, in which, there debit entry of ₹ 18,79,58,511/- for the purchase of the entire land, which accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns recorded, the AO has overruled the said objection by observing that as the document was registered with the SubRegistrar on 25.07.2008 and the payment of ₹ 5,23,000/- with regard to said transfer was received by assessee vide cheque no. 193533 on 3.4.2008, the transfer of land as well as sale consideration has been received by the assessee in AY 2009-10 and therefore, impugned notice is valid. However, from the sale deed dated 27.03.2008, it appears that entire sale consideration has been paid vide cheque dated 27.03.208.. Even otherwise, as per the decision of the Full Bench of this Court in the case of Hormasji Mancharji Vaid (supra), the capital gain under Section 45 of the Act arises in the year of execution of deed and not when the same was registered with the office of the SubRegistrar. In the said decision, the Full Bench of this Court has observed and held as under: For the purpose of tax on capital gains under Section 45 of the Income Tax Act, 1961 transfer of immovable property of value exceeding ₹ 100 is effected on the date of execution of the document of transfer and not either on the date of presentation of the document for registration or on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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