TMI Blog2019 (2) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... , A.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the revenue against the appellate order of the learned Commissioner of Income-Tax (Appeals)-5 Ahmedabad [ CIT(A) in short] vide appeal No.CIT(A) 5/ITO.Wd.5(3)(1)/65/2014-15 dated 30.04.2015 arising from the assessment order passed under Section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 28.01.2015 relevant to Assessment Year 2012-13. 2. Revenue has raised the following grounds of appeal:- (1) The Ld.CIT (A) has erred in law and on facts in allowing the appeal on the issue regarding addition ct ₹ 92 90,500/- made on account of Short term Capital gain, without properly appreciating the facts of the case that the banachitthi had no legal enforceability as is discussed by the A.O in the order nor was the advance money of ₹ 1,00,000/- transacted through banking channel. (2) On the facts and circumstances of the case, the Ld.CIT (A) ought to have upheld the order of the Assessing Officer. (3) It is therefore prayed that the order of the Ld. CIT(A) may be set aside and that of the order of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sale price is for ₹ 83,61,000/- only. The necessary details of the share of assessee along with her spouse and confirming party stands as under: Total Sale Value Vendor s share Confirming Party s share Plot No.11 Rs.1,76,51,000/- Rs.83,61,000/- dividend between assessee and spouse in equal ratio of ₹ 41,81,500/- each Rs.92,90,000/- Plot No.11A Rs.1,76,51,000/- Rs.83,61,000/- dividend between assessee and spouse in equal ratio of ₹ 41,80,500/- each Rs.92,90,000/- TOTAL ₹ 3,53,02,000/- Rs.1,67,22,000/- dividend between assessee and spouse in equal ratio of ₹ 83,61,000/- each Rs.1,85,80,000/- 4.3 However, the AO made certain observations from the Banachitthi made between the assessee and NPPL, as detailed under: i. The Banachitthi was executed on a plane paper without using any Non Judicial Stamp Papers. ii. The Banachitthi was not notarized. iii. The Banac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory that the transaction involving immovable property is to be registered. 5.5 M/s. NPPL has duly confirmed the transaction in the statement recorded u/s 131(1) of the Act and the same was duly disclosed in the books of account. The assessee nowhere connected with the disclosure made by NPPL in the books of account whether it was short term capital gain or business income. The Ld CIT(A) after considering the submission of the assessee observed as under: i. The transactions as discussed above was duly admitted in the statement furnished u/s 131 of the Act dated 26-12-2013 by the director of NPPL namely Dharmeshbhai Ishwarbhai Patni. ii. The share of NPPL in the sale price amounting to ₹ 92,90,000.00 for each plot was duly received by it through banking channel. iii. There was nothing adverse found in the books of accounts of M/s NPPL. As such, the income on the purchase and sale of impugned plots of land were duly offered to tax in its books of accounts. Indeed, the amount of income was shown by the NPPL which was quite less but that does not lead to the conclusion that M/s. NPPL has evaded tax liability. iv. There was no cross examination carried out by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had share of the profit on the sale of such plot of land more than 50% which is against the probability. M/s. NPPL had invested only 1,00,000/- of Rupees and earned a profit of ₹ 92.90 lacs, which is actually the share of profit of the assessee. 6.1 The Ld. DR also submitted that there was no payment received by NPPL in the books of account. As such the impugned entry is just a fake entry and same cannot be relied upon. 6.2 The Ld. DR also submitted that the agreement has no evidentiary value as it has not been registered under the provisions of Registration Act 1908. 6.3 The Ld. DR vehemently supported the order of AO. 7. On the other hand, Ld. AR filed a paper book which is running from pages 1-133 and submitted that the payment was made to NPPL through banking channel. 7.1 The Ld. AR in support of his claim drew our attention on the registered sale agreement which is placed on pages 34-69 of the PB, wherein the payment to NPPL was recorded on the relevant Page 37 of the PB. 7.2 The Ld AR further submitted that the Hon ble Gujarat High Court in the case of Nanubhai Kasanbhai Patel vs. Navinkumar Patel and ANR Vs. Shailesh Bhai Rangil Bhai Patel ors in 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered instrument. 8.3 The plane reading of the above provision provides that an unregistered document affecting the transactions of immovable property is a valid transaction. Thus, it is clear that the Banachitthi made between the assessee and NPPL is enforceable under the provisions of law. Therefore, no adverse inference can be drawn against the assessee if the Banachitthi is not registered. 8.4 Besides the above, we also note that the Hon ble Gujarat High Court in the case of Taraben (supra) has held that the Banachitthi are enforceable. The relevant extract of the order is reproduced as under: (A) LAW OF CONTRACT - Banachitti - Civil Procedure Code, 1908 (5 of 1908) - Order 39, Rules 1 2 - Whether a writing in form of 'banachitti1 an enforceable agreement to sell -Considering facts that a substantial amount has been paid as partperformance etc., held, it is an enforceable agreement to sell - Agreement need not be in any particular form - When a writing contains all essential requirements of agreement, it is a binding contract - Contentions by defendants that writing is a mere desire to enter into agreement in future - Contentions negatived - Order by lower Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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