TMI Blog2018 (3) TMI 1858X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration. AO while framing the assessment has made an addition on protective basis which itself manifest and established the fact that the reasons to form the belief by the AO for reopening of the assessment is not based on any tangible material to show that the income assessable to tax has escaped assessment. AO has formed the belief only on presumption and not on the basis of material as referred in the reasons. Therefore, the reopening of the assessment merely on the basis of suspicion and presumption which is not supported by even the material as referred in the reasons recorded and available with the AO then the reopening of the assessment is not valid and liable to be quashed. We accordingly quash the reopening of the assessment as invalid and consequently the reassessment framed is also set aside being not sustainable. - Decided in favour of assessee. Validity of assessment framed under section 153A read with section 143(3) of the IT Act - HELD THAT:- from the seized material there is nothing to indicate or disclose any involvement of the assessee directly or indirectly in the transaction of purchase of the land in question and subsequently the company Shri Kalyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said company then except the statement of Shri Madan Mohan Gupta there was no other material or record to establish that the said on money was paid only by the assessee and not by Shri Madan Mohan Gupta or by both or by the company. Therefore, this decision of the AO that the on money was paid by the assessee is absolutely based on the statement of Shri Madan Mohan Gupta and since Shri Madan Mohan Gupta was one of the Directors of the said company, therefore, the possibility of making a self serving statement cannot be ruled out. Accordingly, in the absence of giving an opportunity to the assessee to cross examine Shri Madan Mohan Gupta, the said finding of the AO is not sustainable in law and in view of the above discussion we hold that the addition made by the AO is not justified and the same is deleted. Addition being on money paid in respect of the land at Jamna Vihar, Teelawala - HELD THAT:- assessee denied to have entered any transaction of purchase of land from Shri Mool Chand. However, the AO without bringing anything on record to disclose any transaction of purchase of land as alleged either by the assessee or by any group company of the assessee has made the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to the DVO for determination of fair market value of the plot in question which could be taken as full value consideration. Accordingly, in the facts and circumstances of the case, we set aside the issue to the record of the AO for re-adjudication of the same after making the reference to the DVO regarding determination of fair market value of the plot in question and thereafter after considering the objection, if any, of the assessee to decide the issue as per law. Appeal of the assessee is partly allowed. - ITA No. 293, 408, 294 & 295/JP/2017, ITA No. 519, 520 & 521/JP/2017 - - - Dated:- 28-3-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For the Assessee : Shri S.L. Poddar (Advocate) For the Revenue : Shri Varinder Mehta (CIT) ORDER PER BENCH : These are three sets of cross appeals by the assessee and revenue for the assessment years 2007-08, 2009-10 and 2010-11 and appeal by the assessee for the assessment year 2011-12 are directed against the four separate orders of ld. CIT (A), Jaipur all dated 31st March, 2017. All these appeals were clubbed together for hearing and for the sake of convenience are being disposed off by this com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4 crores in cash for purchase of the said land during the period August, 2006 to November, 2006 pertaining to the assessment year 2007-08. The AO noted that as per the seized documents, a sum of ₹ 6,59,00,000/- is shown to have been received by Shri Madan Mohan Gupta from the assessee as well as a sum of ₹ 5,00,00,000/- has been shown as received by the assessee from certain persons. Since the assessment year 2007-08 is beyond 6 years from the date of search and, therefore, the AO apart from initiating the proceedings under section 153A in respect of other assessment years has proposed to reopen the assessment for the assessment year 2007-08 by issuing notice under section 148 on 25th March, 2014. The assessee raised objection against the notice issued under section 148 vide letter dated 8.12.2014. The AO disposed off the objections of the assessee vide order dated 05.01.2015 and thereafter completed the reassessment under section 147 read with section 143(3) on 30.03.2015. The assessee challenged the action of the AO before ld. CIT (A) and raised the objection against the reopening of the assessment but could not succeed. 3. Before us, the ld. A/R of the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of purchase of Chainpura land as the same was purchased by the company M/s. Kalyan Buildmart Pvt. Ltd. Even thereafter the said company was transferred to Shri Navratan Kothari and Shri Prakash Chand Kothari by transfer of shares by Shri Madan Mohan Gupta and his wife. Therefore, at no point of time the assessee has any interest in the said company either before purchase of land or after purchase of land. The statement of Shri Madan Mohan Gupta was contrary to the actual facts of transaction of purchase and sale of land and the same was made only to save himself and to protect his own black money for the purchase and sale of land through M/s. Kalyan Buildmart Pvt. Ltd. which was finally transferred to Kothari Brothers. The ld. A/R has referred to the seized materials at pages 16-21 of the paper book and submitted that the date of transaction as per the seized documents do not fall in this assessment year and, therefore, even as per the seized materials the transaction do not pertain to the year under consideration and hence the reopening is without any basis but merely on the basis of presumption and assumption by the AO relying on the statement of Shri Madan Mohan Gupta. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on pages 15-18 of Exhibit-1 of Annexure-A found and seized from the residence of Shri Madan Mohan Gupta. This land was purchased during the assessment year 2006-07 and subsequently sold to Shri Navratan Kothari and Shri Vimal Chand Surana in the month of March, 2007. The details of the transaction has been recorded at pages 27 28 of Exhibit of Annexure-A. In the light of the statement of Shri Madan Mohan Gupta, statement of the assessee were also recorded on oath on 16.08.2013 and the assessee was confronted with the seized materials particularly pages 15 to 20 of Exhibit-1 of Annexure-A. Therefore, the AO conducted the enquiry before issuing the notice under section 148. The ld. D/R has further contended that to acquire the land in question, a company was formed on behalf of the assessee and entire purchase consideration was paid by the assessee. There is no dispute about the amount paid by the assessee through cheque through Shri Madan Mohan Gupta. However, the only dispute is regarding the cash payment for the said land transaction. Thus the ld. D/R has submitted that at the time of initiating the proceedings for reopening of the assessment what is required is to form a bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y cheque and further amount of ₹ 3-4 crores in cash for purchase of the said land during the period August 2006 to Nov 2006 pertaining to AY 2007-08. Further as per the seized documents it is seen that a sum of ₹ 6,59,00,000/- is shown to have been received from the assessee by Shri Madan Mohan Gupta. In addition to this, a sum of ₹ 5,00,00,000/- has been shown as received by the assessee from certain persons. In the surrender of income made by the assessee such amount have not been included. I have thus reason to believe that income to the extent of ₹ 11,59,00,000/- has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. Thus the AO has recorded the reasons that as per the seized material Exhibit 1-5 of Annexure-AS and particularly pages of Exhibit 1-5 seized from the residential and office premises of Shri Madan Mohan Gupta, a land transaction at village Chainpura behind EP was found as purchased by the assessee through Shri Madan Mohan Gupta. The AO has given the details of the amount as found recorded in the seized material and formed the belief that the income of ₹ 11.59 crores has escaped assessment within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany to Shri Navratan Kothari, Shri Vimal Chand Surana HUF and Shri Kaushal Chand Surana on 24.8.2006. Therefore, the entries recorded in the seized material do not match with the transaction of purchase with the land in question though in the name of M/s. Kalyan Builtmart Pvt. Ltd. as all these entries are in the subsequent years whereas the transaction of purchase of the said land in the name of M/s. Kalyan Builtmart Pvt. Ltd., the shares of the said company was subsequently sold to Shri Navratan Kothari, Shri Vimal Chand Surana HUF and Shri Kaushal Chand Surana. The transaction of purchase of the land in question by M/s. Kalyan Builtmart Pvt. Ltd. and subsequent sale of the said company were completed much prior to the alleged transaction as recorded in the seized material. Therefore, without going into the issue whether these transactions are in the name of the assessee or not as recorded in the seized material, when these transactions do not match with the transaction of purchase and sale of land and further do not pertain to the year under consideration then there was no tangible material, rather the reason to belief that an income of ₹ 11.59 crores escaped assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Assessing Officer in passing the order u/s 143(3)/153A of the Income Tax Act, 1961 which is void ab-initio deserves to be quashed. 2. Under the facts and circumstances of the case the learned CIT (A) has erred in making a separate addition to ₹ 50,00,000/- u/s 68 of the Income Tax Act, 1961 on substantive basis on the basis of same papers on which earlier protective addition was made. 3. Under the facts and circumstances of the case the learned CIT (A) has erred in giving the finding that the land deal was made by Shri Rajendra Kumar Jain and he is the person who purchased the land and sold to Navratan Kothari and Vimal Chand Surana and Shri Madan Mohan Gupta was only name lender. 4. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing. ITA NO. 520/JP/2017 (Revenue): 1. Whether on the facts and in the circumstances of the case, the CIT (A) was right in not sustaining the addition of ₹ 7,19,50,000/- made by the AO on protective basis or, addition of ₹ 5,55,84,000/- on substantive basis as recommended by the AO in the subsequent remand report. 2. The appellant cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that there is no satisfaction recorded either by the AO having jurisdiction over Shri Madan Mohan Gupta or by the AO of the assessee for initiating the proceedings under section 153A. Thus the ld. A/R has submitted that the assessment framed under section 153A is invalid when there was no material either found or seized from the possession of the assessee and the material found and seized from the possession of Shri Madan Mohan Gupta is not related to the assessee or disclosed any undisclosed income belonging to the assessee. This fact is corroborated by the finding of the AO in the assessment order when only a protective addition was made in the hands of the assessee. The ld. A/R has further submitted that the assessment for the year under consideration was not pending as on the date of search and therefore, in the absence of any incriminating material, no addition can be made in the reassessment proceedings under section 153A of the Act. The ld. A/R has further pointed out that though the ld. CIT (A) in his order finally decided the appeal of the assessee and deleted the protective addition made by the AO of ₹ 7,19,50,000/-, however, the ld. CIT (A) has finally sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed from the residential and business premises of Shri Madan Mohan Gupta does not reveal any transaction by the assessee for purchase of land in question. Further the transaction as recorded in the seized material clearly reveals that there is no connection of these entries made in the diary found and seized during the course of search and seizure action and the actual transaction of purchase of land in the name of Shri Kalyan buildmart Pvt. Ltd. owned by Shri Madan Mohan Gupta and his wife Smt. Shashi Kala Gupta. While deciding these appeals for the assessment year 2007-08, we have considered all these details and facts as emerging from the record as well as from the seized material and found that there is no direct connection between the transactions found in the seized diary and the transaction of purchase and sale of the land at village Chainpura behind EP, Tehsil Sanganer, Jaipur. Even the said company Shri Kalyan Buildmart Pvt. Ltd. was subsequently purchased by Shri Navratan Kothari, Shri Vimal Chand Surana HUF and Shri Kaushal Chand Surana by way of transfer of shares by Shri Madan Mohan Gupta and his wife. Therefore, from the seized material there is nothing to indicate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO as well as the remand report of the AO and submitted that the AO has clearly made out a case of addition of ₹ 5,55,84,000/- on substantive basis in the hands of the assessee. 11. At the outset, we note that the ld. CIT (A) has considered and decided this issue in para 3.2.3 at page 85 86 as under :- 3.2.3. I have duly considered assessee s submission and carefully gone through assessment order. I have also taken a note of factual matrix of the case as well as applicable case laws relied upon. On perusal of assessment order, it is seen that AO has made protective addition of ₹ 7,19,50,000/- on the basis of notings of following impugned seized documents pertaining to Chainpura land dealings and they were seized/impounded from the possession of Sh. Madan Mohan Gupta : Details of incriminating documents: Land transaction of Chainpura behind EP Jaipur. S.No. Annexure and Exhibit No. Pg No. of the seized document Found/Seized from/impounded 1. Annex-A Exhibit-1 15 to 24, 27, 28, 43, 44, 69 to 74 Residential premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,13,00,000/- Undisclosed investment made in cash u/s 68 (Direction for AO u/s 150(1) of the Act to re-open u/s 147 of the of the case for Sh. Rajendra Kr. Jain and Sh Kaushal Chand Surana for AY 08-09) In case of Chainpura land dealings, no addition either on substantive basis of protective basis has been proposed in the hands of Sh Madan Mohan Gupta M/s. Shri Kalyan Buildmart Pvt. Ltd. Further, it is also pertinent to mention here that, no protective addition of ₹ 7,19,50,000/- has been proposed in the remand report. Further, as per detailed working given in para no. 2.1.8.5 for issue no. 1, 2, 3 4 where no separate addition of ₹ 7,19,50,000/- for the AY 2009-10 on protective basis in assessee hands has been proposed accordingly, the same is deleted. Assessee gets relief in Gr No. 2. Thus it is clear that the ld. CIT (A) has given the finding that the AO has made protective addition of ₹ 7,19,50,000/- on the basis of notings in the diary pertaining to the Chainpura land dealing and the substantive addition of the said amount was made in the hands of Shri Madan Mohan Gupta. The ld. CIT (A) has since de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of ₹ 26,183/- on account of employees contribution to ESI and PF. The entire assessment order is silent about any of the incriminating document found or seized during the course of search and seizure action and therefore, it is clear that the assessment framed by the Assessing Officer u/s 153A for the assessment year under consideration is not based on any document found or seized during the course of search or requisition made. This fact has not been disputed by the Revenue that the assessment for the year under consideration u/s 153A r.w.s. 143(3) is not based on any incriminating document found during the course of search. This issue has been considered in a series of decisions of the Hon ble High Courts as relied upon by the assessee. In the latest decision in case of Pr. CIT vs. Meeta Gutgutia (supra) the Hon ble Delhi High Court has again considered and analyzed the relevant provisions of the Act as well all the decisions on this point in para 57 to 72 as under:- 57. The question whether unearthing of incriminating material relating to any one of the AYs could justify the re-opening of the assessment for all the earlier AYs was considered both in Anil Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with. 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Asstt. CIT [2013] 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: 22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the. aforementioned six years in separate assessment orders fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arat High Court referred to the decision in Kabul Chawla(supra), of the Rajasthan High Court in Jai Steel (India) (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: '15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be made pursuant to search and seizure operation. The Calcutta High Court in Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In Gurinder Singh Bawa (supra), the Bombay High Court held that: 6. . . . . . once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings. 63. Even this Court has in Mahesh Kumar Gupta (supra) and Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Kurele Paper Mills (P.) Ltd. (supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 2015. The decision in Dayawanti Gupta 64. That brings us to the decision in Smt. Dayawanti Gupta (supra). As rightly pointed out by Mr. Kaushik, learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained by the Assessee in the present case have been accepted by the AO. In response to question No. 16 posed to Mr. Pawan Gadia, he stated that there was no possibility of manipulation of the accounts. In Smt. Dayawanti Gupta (supra), by contrast, there was a chart prepared confirming that there had been a year-wise non-recording of transactions. In Smt. Dayawanti Gupta (supra), on the basis of material recovered during search, the additions which were made for all the years whereas additions in the present case were made by the AO only for AY 2004-05 and not any of the other years. Even the additions made for AYs 2004-05 were subsequently deleted by the CIT (A), which order was affirmed by the ITAT. Even the Revenue has challenged only two of such deletions in ITA No. 306/2017. 68. In para 23 of the decision in Smt. Dayawanti Gupta (supra), it was observed as under: 23. This court is of opinion that the ITAT's findings do not reveal any fundamental error, calling for correction. The inferences drawn in respect of undeclared income were premised on the materials found as well as the statements recorded by the assessees. These additions therefore were not baseless. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT was correct in confirming the orders of the CIT (A) to the extent it deleted the additions made by the AO to the taxable income of the Assessee of franchise commission in the sum of ₹ 88 lakhs and rent payment for the sum of ₹ 13.79 lakhs? Accordingly, in view of the facts and circumstances of the case that the assessment in question was framed u/s 153A is not based on any incriminating material found or seized and therefore, the addition made by the AO of ₹ 26,183/- on account of employees Contribution to ESI and PF is not justified and the same is deleted by following decisions of Delhi High Court in case Pr. CIT vs. Meeta Gutgutia (supra). Therefore, when the addition is not based on the seized material then the ld. CIT (A) has no jurisdiction even having concurrence power of the AO to make any addition in the assessment framed under section 153A. Accordingly, the addition made by the ld. CIT (A) of ₹ 50,00,000/- is not sustainable and according deleted. 12. As regards the issue raised by the revenue in the cross appeal, there is no dispute that the AO made only a protective addition in the hands of the assessee and, therefore, the AO cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the ld. CIT (A) in a separate order. 2. The Appellant crave, leave or reserves the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 15. Ground No. 1 is regarding validity of assessment passed under section 153A read with section 143(3). This issue is common as raised by the assessee for the assessment year 2009-10. In view of our finding on this issue for the assessment year 2009-10, the same stands disposed off in terms of our finding for the assessment year 2009-10. 16. Ground No. 2 is regarding the addition of ₹ 1,01,99,728/- sustained by ld. CIT (A). The AO in the assessment framed under section 153A read with section 143(3) has made an addition of ₹ 1,01,99,728/- with reference to pages no. 55 to 58 of Exhibit-1 found and seized from the residential premises of Shri Madan Mohan Gupta during the search carried on 23rd May, 2013. Shri Madan Mohan Gupta in his statement recorded during the search and seizure action has explained that these pages contain accounts of plots of Shri Rajendra Kumar Jain, the assessee before us, which was purchased through him. Accordingly the AO by co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration. The ld. A/R has referred to Annexure-A page 55 of the seized document and submitted that the transactions from date 30th July, 2008 to 7th February, 2009 do not pertain to the assessment year under consideration and, therefore, the AO has committed a gross error in taking all the amounts against this transaction as income of the assessee for the year under consideration. Further, except the statement of Shri Madan Mohan Gupta, there is nothing in the seized material that these transactions are related to the assessee. The ld. A/R has further submitted that the addition is based on the statement of Shri Madan Mohan Gupta whereas the assessee was not allowed to cross examine Shri Madan Mohan Gupta and, therefore, the assessment order based on the statement without giving the opportunity of cross examination is not sustainable in law. In support of his contention, he has relied upon the decision of Hon ble Supreme Court in the case of Andaman Timber Industries vs. Commission of Central Excise, 281 CTR 241 (SC) and submitted that the Hon ble Supreme Court has held that not allowing assessee to cross examine the witness is a serious flaw which makes the order nullity in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. The relevant details of plots and finding of the AO are given in para 6.6.4 and 6.6.5 as under :- 6.6.4. On going through the page no. 57 as well as details produced by the assessee, it is gathered that there is a vital difference between sale price mentioned in the registries and the details mentioned on this page. The same is summarized as under :- S. No. Plot No. Area (Sq.yds) Rate (per sq. yds.) as mentioned on page no. 57. Total Amount as per details mentioned on page no. 57. Sale Consideration shown in sale deed Difference 1 16 260.00 5800 15,08,000 5,43,456 9,65,535 2 17 260.00 4900 12,74,000 5,43,465 7,30,535 3 29 216.66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being made in the case of Shri Madan Mohan Gupta also for this assessment year because these papers were found from the premises of him and he is liable to explain these papers as per the provisions of section 292C of the Act. Thus, substantive addition of ₹ 1,01,99,728/- is hereby made in the total income of the assessee as unaccounted investment in purchase of plots. Therefore, penalty proceedings u/s 271(1)(c) of the Act for concealment of income/for furnishing inaccurate particulars of income are being initiated separately. The AO has admitted this fact and it is also a matter of undisputed fact that these plots of land were purchased by M/s. Hemang Construction Pvt. Ltd. and assessee as well as Shri Madan Mohan Gupta were the directors of the said company. The details found recorded at page 57 of the Annexure-1 of seized material shows the difference between the amounts of purchase consideration shown in the sale deed and the actual sale consideration paid in respect of these plots. Without going into the controversy whether these two amounts as found in the seized material represent the on-money for purchase of the plot of land, we note that the transaction of purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of ₹ 9,00,000/-. In reply, the assessee submitted that the assessee has no connection with the said payment as recorded in the seized document to Shri Mool Chand. It was further contended that assessee has not purchased anything from Shri Mool Chand. However, the AO finally made the addition of ₹ 9,00,000/- in the hands of the assessee and a protective addition was made in the hands of Shri Madan Mohan Gupta. The assessee challenged the action of the AO before ld. CIT (A) but could not succeed. 20. We have heard the ld. A/R as well as the ld. D/R and has considered the relevant material on record. The page 64 of Annexure-A Exhibitg-1 of the seized material has been scanned by the AO at page 17 of his order as under :- Thus it is clear that these notings of the amount has been made on specific dates and in the name of Shri Mool Chand. The AO has treated the said payment as made by the assessee to Shri Mool Chand on the basis that in the past a group company of the assessee namely M/s. Moonstone Apartments Pvt. Ltd. has purchased land from Shri Mool Chand. However, the said transaction of purchase of land happened on 3rd June, 2005. However, the AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout affording an opportunity to the assessee to cross examine Shri Madan Mohan Gupta, the said addition made by the AO is not sustainable. We have discussed this issue of validity of decision of the AO based on the statement without allowing the assessee to cross examine while deciding the issue in ground no. 2. Accordingly the addition made by the AO is not sustainable and the same is deleted. 21. In the cross appeal the revenue has challenged the order of the ld. CIT (A) whereby the protective addition of ₹ 3,86,35,000/- made by the AO was deleted by the ld. CIT (A). This issue is common as the issue raised by the revenue for the assessment year 2009-10. Accordingly, in view of our finding for the assessment year 2009-10, we do not find any merit or substance in the appeal of the revenue. The same is dismissed. ITA NO. 295/JP/2017 (ASSESSEE) : A.Y. 2011-12 : 22. The assessee has raised the following grounds :- 1. Under the facts and circumstances of the case the learned CIT (A) has erred in confirming the action of the learned Assessing Officer in passing the order u/s 143(3)/153A of the Income Tax Act, 1961 which is void ab initio deserves to be qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. D/R and considered the relevant material on record. An identical issue of addition of ₹ 9,00,000/- on account of unaccounted investment in purchase of plot as per page 64 of Exhibit-1 has been considered by us for the assessment year 2010-11. Accordingly in view of our finding on this issue for the assessment year 2010-11, the ground no. 2 stands adjudicated in favour of the assessee. The addition made by the AO is accordingly deleted. 27. Ground No. 3 is regarding an addition of ₹ 8,40,227/- by invoking the provisions of section 50C of the IT Act. The assessee sold a plot No. D-10, Kesav Vihar, Jaipur on 21st April, 2010 for a sum of ₹ 6,25,000/- and paid capital gain tax. The AO in the assessment completed under section 153A has adopted the full value consideration at ₹ 14,65,227/- on the basis of a report of Sub-Registrar Stamps, Jaipur. The assessee challenged the action of the AO before the ld. CIT (A) and contended that when DLC rates were not available for the area in which the plot of land in question is situated, was sold by the assessee then the provisions of section 50C cannot be applied. Further, the value adopted by the AO is not based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame as full value consideration under section 50C of the Act, therefore, the AO has adopted the DLC rates of adjoining area, namely, Siddharth Nagar without giving the assessee an opportunity of hearing and defend its case against such adoption of full value consideration. Once the assessee has raised the objection against the adoption of the DLC rates of an adjoining area instead of the area in which the plot in question situated, the AO and ld. CIT (A) ought to have referred the matter to the DVO for determination of fair market value of the plot in question which could be taken as full value consideration. Accordingly, in the facts and circumstances of the case, we set aside the issue to the record of the AO for re-adjudication of the same after making the reference to the DVO regarding determination of fair market value of the plot in question and thereafter after considering the objection, if any, of the assessee to decide the issue as per law. Appeal of the assessee is partly allowed. 30. In the result, appeals of the assessee in ITA No. 293/JP/2017 is allowed, ITA No. 408/JP/2017, 294/JP/2017 and 295/JP/2017 are partly allowed and appeals of the revenue in ITA No. 519/JP/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
