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TMI Blog2019 (12) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... 246/JP/2017 and 275/JP/2017 are taken as lead case. The assessee has raised the following grounds:- "1. In the facts and circumstances of the case and in law the ld. AO erred in reopening the assessment of the assessee under section 148 of the Income Tax Act, 1961. The action of ld. AO is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceeding, being illegal and without any basis. 2. The assessee craves his right to add, amend or alter any of the grounds on or before the hearing." The assessee has also filed an additional ground which reads as under:- "In the facts and circumstances of the case and in law, ld. AO has erred in issuing notice u/s 148 of Income tax Act, 1961 without obtaining proper sanction u/s 151 of the Income Tax Act, 1961. The action of ld. AO is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the reassessment proceeding, being illegal and without jurisdiction. The Revenue in the cross appeal has raised the following grounds:- "1. Whether on the facts and circumstances of the case and the ld. CIT(A) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Saini the AO has assessed the capital gain from sale of land to these three assesseees on the basis of the sale considering recorded in the sale deed and therefore, the AO accepted the sale consideration as recorded in the sale deed. The ld. CIT(A) after deciding the issue on merits in favour of the assessee has not proposed to decide the issue of validity of reopening. Thus both the Department as well as assessee filed these cross appeal. 4. The ld. DR has submitted that during the course of search and seizure action U/s 132(2) of the Act in case of Madan Mohan Gupta certain record was seized containing entries of transactions of purchase of lands by Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini. In the statement recorded U/s 132(4) of the Act Modan Mohan Gupta has admitted that these entries are related to the sale and purchase transaction of Shri Madho Lal Saini, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini. Thus, the seized material clearly disclosed the on money payment by these saini family members for purchase of lands as recorded at page 22 to 25 of the seized documents. They have also accepted the facts that the lands were purchase from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of Rs. 2,07,80,000/- from Shri Madho Lal Saini vide sale deed dated 01.09.2006. The return of income filed by the assessee was subjected to scrutiny assessment and the AO did not doubted any payment of one money while passing the scrutiny assessment U/s 143(3) of the Act on 10.08.2009. Subsequently, the Assessing Officer has initiated the proceedings U/s 147/148 of the Act solely on the basis of the information received from the Investigation Wing and without any other corroborative evidence. The AO has made the addition on account of unexplained investment in purchase of land merely on the basis of assumption and presumption without any evidence to show that the assessee has paid any amount over and above the sale consideration shown in the sale deed which has been duly executed and registered. Therefore, it is relevant evidence to show the transition of purchase and sale of the agricultural land and actual sale consideration paid by the assessee. Hence, in the absence of any other contrary facts or material the contents and terms and condition as well as consideration shown in the sale deed cannot be disputed. The ld. AR has referred to the statement of Shri Madan M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, no transaction involving the huge cash can be linked to the previous transaction which happened almost 15 months before it until and unless a direct or live link is established between two. On the one hand, the AO has relied upon the statements of Saini and at the same time he has ignored the relevant and pertinent part of the statements wherein they have denied any payment of cash. Hence, the AR has submitted that the ld. CIT(A) is justified for deleting the addition on this account. 6. We have considered the rival submissions as well as the relevant material on record. The details of the lands purchased by these three assessees from three Shri Madho lal Saini, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini are as under:- S. No Address of property Date of Transaction Name of purchaser Amount as mentioned in the sale deeds. 1. Village- Jaisinghpura, Bankrota, Jaipur. 08.06.2007 M/s Pinkcity Reality Pvt. Ltd. 93,20,000/- 2. Village- Jaisinghpura, Bankrota, Jaipur. 12.09.2007 M/s Pinkcity Reality Pvt. Ltd. 30,20,000/- 3. Village- Jaisinghpura, Bankrota, Jaipur. 01.09.2006 Sh. Arun Goel, Director 2,07,80,000/- 4. Village- Jaisinghpura, Bankrota, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily members is sourced from the cash payment made by the assessee for purchase of land vide sale deed dated 01.09.2006 in case of Shri Argun Goel sale deed dated 04.11.2006 in case of Shri Tarun Goel sale deed dated 08.06.2007 and 12.09.2007 in case of M/s Pinkcity Reality Pvt. Ltd. The AO has assumed the payment of cash only on the basis of some transactions recorded in the seized material regarding the payment of cash by Saini brothers and father in respect of purchase of land and the source of which is assumed as sale consideration received from the assessee. It is pertinent to note that the alleged seized material contains nothing regarding any transaction between the assessee's and Saini family members and the entries found in the seized material are confined only to the purchase of land by Saini family members. Therefore, the seized material itself does not reveals any transaction of payment of cash by the assessee's brothers in respect of purchase of land from two brothers and father. Further, in the statement of Shri Madan Mohan Gupta nothing incriminating was disclosed against the assessee but he has explained the nature of transactions recorded in the seized material re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -), Shri Arun Goyal (Rs. 4,35,26,854/-) and M/s Pinkcity Realty Pvt. Ltd. (Rs. 2,58,47,997/-) to Shri Madho Lal Saini, Shri Khaniya Lal Saini and Shri Shankar Lal Saini towards the purchase of land from these persons, over and above the consideration recorded in the sale deed. However, it is seen from the copy of the assessment orders of Shri Shankar lal Saini, Shri Khaniya Lal Saini and Shri Madholal Saini for the assessment year 2007-08, filed by the appellant, that the AO of these persons have assessed the capital gain on sale of land to Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. in the hands of Shri Shankar Lal Saini and Khaniya Lal Saini only on the basis of sales consideration recorded in the sales deed:No sales consideration, which according to the AO was paid in cash over and above, the sale consideration recorded in the sales deed has been taken into account by the AO of Shri Shankar Lal Saini and Khaniya Lal Saini for the purpose of computing capital gain in their hands on sale of land to Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. Further, the appellant has also filed copies of the assessment order in the case of Shri Shan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shri Shankar Lal Saini and Shri Kanhiya Lal Saini and found that nothing incriminating has been stated in the statement of Shri Madan Mohan Gupta as well as in the statement of Saini brothers about the cash payment by the assessees in respect of the land purchased by them. Therefore, even if the seized material along with the statements of Shri Madan Mohan Gupta and Saini brothers are taken into consideration nothing has come out to be regarded as any incriminating material or fact to reveal any cash payments by the assessees for purchase of lands in question. The addition made by the AO is solely on his own presumption of payment of cash without any tangible material or evidence in support of his decision. When the seized material found from Shri Madan Mohan Gupta as well as other material gathered during post search inquiry has not established any direct or proxy connection with the transaction of purchase of land by the assessees then the assumption and presumption of the AO that the assessee might have paid cash over and above the consideration shown in the sale deeds is only surmises and conjectures. We note that the Assessing Officer of the Saini brothers and father while f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act. The ld. AR has further contended that even the approval U/s 151 of the Act granted by the ld. CIT(A) is not valid as it is of subsequent date i.e. 14.04.2014 whereas the notice U/s 148 issued by the AO on 20.03.2014 before us, the ld. AR has submitted that in absence of any valid sanction the notice issued U/s 148 of the Act is void ab initio and therefore, the reassessment is liable to be quashed. In support of his contention, he has relied upon the following decisions:- * Dhadda Exports vs. ITO 58 taxmann.com 176. * The decision of Coordinate Benches dated 13.12.2017 in case of Shri Navrattan Kothari vs. ACIT in ITA No. 425/JP/2017. * Sunita Dhadda vs. DCIT 148 TTJ 719 (upheld by the Hon'ble jurisdictional High Court vide judgment dated 31.07.2017 along with DB. Income Tax Appeal no. 197 to 199/201.) Accordingly, the ld. AR has submitted that the reopening is invalid and liable to be quashed. 11. On the other hand, the ld. DR has submitted that as regards the approval U/s 151 of the Act it is only a mistake in writing the date as the correct date is 14.03.2014 which is written as 14.04.2014. He has filed another copy of sanction wherein the correct date is wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for having any cash receipts/payments in respect of the properties sold and purchased by them. They have stated that the transactions in respect of all sales and purchases have been made only through banking channels. However all other details related to the purchases of the properties i.e. cheque amount, registry amount, area of the property, addresses etc. are the same as it were in documents found at the house of Shri Madan Mohan Gupta.. As such, in view of the above fact their denial for having cash transaactions has got no force. The other details duly substantiate the fact that Shri Kanhaiya Lal, Shri Shankar Lal and Shri Madho Lal Saini, R/o Patel Nagar, 22 Godown, Jaipur made cash payments for their purchases and as their sole source of these purchases is land sale at Bhankrota to Shri Arun Goyal in A.Y. 2007-08 and A.y.2008-09, so this cash amount must have been received by them from Shri Arun Goyal. As sources and reason of such a huge cash payment of Rs. 10,32,24,417/- by Shri Arun Goyal is not known. c) As the said cash amount of Rs. 10,32,24,417/- pertains to the year under consideration. Therefore, in view of the above mentioned facts I have reasons to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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