TMI Blog2019 (12) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 AO of the Saini brothers and father while framing the assessment U/s 144 r.w.s. 147 of the Act dated 18.03.2015 accepted the sale consideration as recorded in the sale deeds for the purpose of the assessing the capital gain. The AO however, made additions on account of unexplained investment by them on account of cash payment reflected in the seized material. AO has not disturbed the sale consideration received by Saini brothers and father in respect of sale of land to the assessees before us. The said finding of the AO in case of Saini brothers and father demolished the case of the AO presuming the payment of cash by the assessees before us f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni brothers and father demolished the case of the AO presuming the payment of cash by the assessee before us for purchase the land from Saini family members. Accordingly, when the transaction of sale of land and sale consideration is accepted by the AO of the Saini family members as recorded in the sale deeds then the addition made by the AO on account of cash payment by the assessees U/s 69B of the Act has no legs to stand in the absence of any incriminating material but the said addition is merely based on assumption of the AO. - Decided in favour of assessee. - ITA No. 245/JP/2017, ITA No. 274/JP/2017, ITA No. 246/JP/2017, ITA No. 275/JP/2017, ITA No. 247/JP/2017, ITA No. 265/JP/2017 - - - Dated:- 3-12-2019 - SHRI VIJAY PAL RAO, JM SHRI VIKRAM SINGH YADAV, AM For the appellant : Shri Rohan Sogani (C.A.) For the Respondent : Shri B.K. Gupta (CIT) And Smt. Runi Pal (JCIT) ORDER PER BENCH: These three set of cross appeals are directed against three separate orders of the ld. CIT(A), Ajmer dated 11.01.2017 in three related assessees for the assessment years 2007-08 2008-09 respectively. 2. Since, these th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reopened by issuing a notice U/s 148 of the Act on 20.03.2014 whereby the AO proposed to assess the on money payment made by the assessee for purchase of lands as found in the statement of Shri Madan Mohan Gupta as recorded U.s 132(2) of the Act in search and seizure proceedings carried out on 23.05.2013 and thereafter the statement of Shri Shanka Lal Saini and Shri Kanhiya Lal Saini were also recorded on 05.08.2013. The Assessing Officer while passing the reassessment order on 27.03.2015 has made an addition of ₹ 83,46,000/- on account of unexplained investment in purchase of land. The assessee challenged the action of the AO before the ld. CIT(A) and also challenged the validity of reopening of the assessment. The ld. CIT(A) deleted the addition made by the AO by recording the reasons that the AO has made the addition on the basis of the impounded material wherein nothing incriminating material is found against the assessee and not even an entry was found recorded in respect of the transaction of purchase of lands by the assessee from Shri Madho Lal Saini, Shri Shanka Lal Saini and Shri Kanhiya Lal Saini. Further, there is no allegation or reference of the transaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is established from the seized material then, the source of the said payment is nothing but the cash payment by the assessee in respect of the land purchased by them from the Saini family members. The ld. DR has further contended that when all the other entries on the rest of the pages recording the name of the sellers, the amount mentioned in the cheque, area of the land involved, registration expanses are accepted by the Sani s then their denied of cash entries as recorded in the seized material is not acceptable. These entries have been made/recorded by Shri Madan Mohan Gupta and since it has been admitted by Shri Shankar Lal Saini and Shri Kanhiya Lal Saini in the statement that they are not well educated so Shri Mandan MohanGupta was working as a middle man and the entry recorded by him in the seized material is giving the correct picture of the transaction. The ld. DR has further submitted that Sani s have admitted their only source of investment in lands purchased is the sale of land at Jaisinghpur to the assesseess namely Shri Arun Goel, Shri Tarun Goel and M/s Pinkcity Reality P. Ltd. Therefore, the respective amounts of on money in the hands of these three assessees tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shankar Lal Saini and Shri Kanhiya Lal Saini. Those transaction are not related to the assessees and therefore, once the Saini have denied any payment of cash and clearly stated in their statements that they purchased the property against the payment of cheque and no cash was paid then the addition made by the AO in respect of cash payment for purchase of land by assessee is without any basis but only on the being presumption and surmises. The ld. AR has relied upon the orders of the ld. CIT(A) on this issue and submitted that in the absence of any material disclosing any cash payment by the assessees to the Saini for purchase of the property the addition is not sustainable. He has further pointed out that even in the assessment framed in the hand of Shri Madho Lal Sain, Shri Shankar Lal Saini and Shri Kanhiya Lal Saini the Assessing Officer has accepted the sale consideration in their hand as recorded in the sale deeds. Therefore, when the sale consideration was not disturbed by the AO of these sellers then the presumption of the Assessing Officer for payment of cash over and above sale consideration recorded the sale deed is contrary to the very fact which is recorded in the reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 . 11 . 2006 Sh . Tarun Goel, Director 80,80,000 /- 5 . Village - Jaisinghpura, Bankrota, Jaipur . 04 . 11 . 2006 Sh . Tarun Goel, Director 80,80,000 /- Total 4,92,80,000 /- These transactions were duly recorded in the books of accounts and also declared in the return of income filed by these assessee. In case of Shri Arun Goel he has purchased the land in question from Shri Madho Lal Saini vide registered sale dated 01.09.2006 for a consideration of ₹ 2,07,80,000/- The Assessing Officer accepted the return income while passing the original assessment U/s 143(3) of the Act on 10.08.2009. Subsequently, there was search and seizure action in the case of Shri Madan Mohan Gupta Under section 132 of the Act on 23.05.2013. A diary was seized from the possession of the Shri Madan Mohan Gupta con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 regarding the purchase of land by the Saini family members. The department then also conducted further inquiry by recording statements of Shri Shankar Lal Saini and Shri Kanhiya Lal Saini and specifically asked the question regarding the payment of cash but both these brothers have denied the payment of cash in respect of the land purchased by them. However the inquiry conducted by Department from Saini brothers is directed toward the cash payment by them and has nothing to do with the cash received by them from the assessee before us. The Ld. CIT(A) has considered this issue in the light of the material, evidence and other relevant facts as under:- I have gone through the assessment order, written submission, impounded material and statements relied upon by the AO carefully. Nowhere at page no.25 of the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Shankar Lal Saini (A.Y. 2008-09 2009-10) and Shri Khaniya Lal Saini (A.Y. 2007-08) and Shri Madho Lal Saini (A.Y. 2007-08) from which it can be seen that the AO of these persons have treated the amount of cash claimed to have been paid by these persons towards purchase of properties at Amer and Choumu as unexplained investment. Thus, the AOs of these three persons have assessed their income accepting the sales consideration recorded in the sales deed in respect of the properties sold by these persons to Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. as true and correct. The AO of these persons have also not accepted sales consideration of the land sold by these persons to Shri Tarun Goyal, Shri Arun Goyal and M/s Pinkcity Realty Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial 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 framing the assessment U/s 144 r.w.s. 147 of the Act dated 18.03.2015 accepted the sale consideration as recorded in the sale deeds for the purpose of the assessing the capital gain. The AO however, made additions on account of unexplained investment by them on account of cash payment reflected in the seized material. Therefore, the AO has not disturbed the sale consideration received by Saini brothers and father in respect of sale of land to the assessees before us. The said finding of the Assessing Officer in case of Saini brothers and father demolished the case of the AO presuming the payment of cash by the assessees before us for purchase the land from Saini family members. Accordingly, when the transaction of sale of land a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 written as 14.03.2014. The ld. DR has further submitted that even as per the proceedings sheet of the ld. CIT the correct date is reflected as on 14.03.2014. Thus a mere mistake in writing the date will not vitiate the proceedings. 12. As regards the reasons recorded by the AO, the ld. DR has submitted that when the Assessing Officer has received the information regarding the cash payment by the Saini family members as per the seized material and statement of Shri Madan Mohan Gupta along with the statement of the Saini brothers then, it constitute a tangible material for formation of belief that the income assessable to tax in the hands of the assessees has es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri 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 ₹ 10,32,24,417/- by Shri Arun Goyal is not known. c) As the said cash amount of ₹ 10,32,24,417/- pertains to the year under consideration. Therefore, in view of the above mentioned facts I have reasons to believe that the income of the assessee for the year under consideration has escaped assessment to the extent of ₹ 10,32,24,417/-within the meaning of section 147/148 of the IT Act, 1961. As such, it is a fit case to issue notice u/s 148 of the IT Act, 1961. Therefore, approval of CIT -II, Jaipur is requested to initiate proceedings u/s 147 in the instance case. Thus, it is clear from the reasons recorded by the AO that he has proceeded on the basis of the seized material in the case of Shri Madan Mohan Gupta as well as statements of Saini brothers and father. The AO has clearly mentioned in the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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