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TMI Blog2012 (3) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the addition made of ₹ 1,42,00,000/- on account of unexplained investment for purchase of land by admitting additional evidence in the form of Pate No.177 to 190 of the Paper Book (refer Page No.6 of the appellant order) in contravention of rule 46A(3) of the I.T. Rules, 1962." 4. The facts in brief as emerged from the corresponding block assessment order passed u/s.158BC r.w.s. 158BC dated 28-08-2003 are that a search on Shayam Builders was carried out on 21-01-1997. On the basis of certain seized documents, it was found that the assessee had undisclosed income and therefore being satisfied the Revenue-Department has initiated proceedings u/s 158BD of I.T. Act, 1961 in the case of the assessee. The allegation of the Revenue-Department was that the assessee has purchased a land bearing survey No.791 admeasuring 41,746 sq.yd. situated at Naroda village, Ahmedabad. The land was stated to be purchased from M/s Ambbika Corporation vide of banakhat dated 20-05-1996. As per the said banakhat, the land was stated to be purchased by eight persons. The Assessing Officer has alleged that those eight persons were partners (bhagidar) of assessee i.e. Umiya Investment. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in answers to Q:4, that for the purchase of land they collectively 8 persons had paid ₹ 5,00,000/ in cash as token money i.e. bana -money. Thereafter, payment of purchase consideration was made after sale of land and after receipt of sale consideration from Bhagwanbhai Khodabhai Patel of Shyam Builder Group. He confirmed the receipt of ₹ 1,03,00,000 (Rs. One Crore three Lacs Only) from Bhagwanbhi Khodabhai Patel. He also confirmed that out of the said receipt of ₹ 1,03,00,000/- after deducting ₹ 5 lacs the balance amount was paid to Shri Dashratbhai of Ambica Corporation from whom the land was purchased…" (at Para 12.9) Similarly, it is noticed from the order of block assessment passed U/s. 158BD r.w.s. 158BC and 143(3) on 30/04/2002 by DCIT Circle-II Ahmedabad in case of Shri Bharatkumar R Patel, one of the eight coowners that the investment by way of purchase price for land paid to M/s Ambica Corporation has been found to be explained with following findings. '… He also fined details of cash receipt and payments from books of M/s. Umiya Investment showing receipt of cash from Bhagwandas K Patel and payment to M/s. Ambica Corporation tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hai J Dasadioa. There is yet another aspect of the matter in as much as, the appellant was constituted from 01/04/1996 and the initial payment of ₹ 5 lacs was made on 07/04/1996, though no activity was carried on by this entity during this period. Therefore, the "aforesaid initial investments" cannot be the "unexplained investment" made by the appellant entity and brought to tax in its hands. When the co-owners has furnished explanation with regard to the sources of capital amounts introduced by them and the same has been received during the period when no activity has been carried out by the appellant entity, the capital amount so introduced could not be taxed in the hands of the appellant as its unexplained investments. Reliance is placed on the decision of Ahmedabad Bench of ITAT in the case of ACIT Vs Patel Rajeshkumar Kantilal (64 TTJ 460) wherein the decision of Hon'ble Bomaby High Court in the case of Narayandas Kedarnath Vs CIT (22 ITR 18) has been followed. Under the circumstances, I hold that the initial payment of ₹ 5 lacs made to M/s Ambica Corporation by the co-owners cannot be brought to tax as unexplained investment in the hands of the appellant. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent explained that the same were paid out of the amounts received towards sale consideration from M/s. Trimurti Associates of Shuyam Group as under:- On 13.4.1996 ₹ 5 lakhy (Banachitti) On 20.4.1996 ₹ 98 lakh (Banakhat) On 13.9.1996 ₹ 46,27,700 The respondent relied upon the orders of block asstt. passed in the case of co-owners to prove that the aforesaid payments were not unexplained, but out of sale consideration received by it. (Except ₹ 5 lakh). (a) Shri Hasmukhlal Prqhalad Patel:- Order passed on 31.8.2001 by ACIT, Cir-6, Abad as per para 12.9 (b) Shri Bharatkumar R Patel :- Order passed on 30.4.2002 by DCIT, Cir-11, Abad as per para 5. (c) Shri Bharat Prabhudas Patel in his statement recorded on 11.3.1997 stated in answer to Q.No.4 that 8 persons had paid ₹ 5 lakh in cash as token money and thereafter payment of purchase consideration was made after sale of land and receipt of sale consideration from Shri Bhagwanbhai K Patel of Shyam Builders group. (d) Shri Prahlad Ramdas Patel: The impugned order dt. 31-8-2001 passed by ACIT Cir-6, A'bad at para 14.14 on page 13." 8. We have heard both the sides at some length and carefully p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e totality of the facts and circumstances, the view taken by the Ld. CIT(A) is hereby confirmed and these two grounds of the Revenue is therefore deleted. 9. The Revenue has raised following grounds No. 3, 4 and 5:- "3. The Ld. Commissioner of Income tax (A)-XII, Ahmedabad has erred in law and on facts in deleting the addition made of ₹ 36,52,656/- being the undisclosed profit earned from the transaction in land. 4. On the facts and in the circumstances of the case, the Ld. Commissioner of Income tax (A)-XII, Ahmedabad ought to have upheld the order of the Assessing Officer. 5. It is therefore prayed that the order of the Ld. Commissioner of Income tax (A)-XII, Ahmedabad may be set aside and that of the Assessing Officer be restored." 10. In respect of these three grounds facts as stated by the Assessing Officer were that the two pieces of land admeasuring 27,225 sq.yd. and 14,520 sq.yd totaling 41,745 sq.yd. was purchased through Banakhat from M/s Ambika Corporation dated 20-05-1996. The land was purchased @ ₹ 605 per sq.yds and consideration of ₹ 1.42 cores was paid. The land was agreed to be sold to M/s. Trimurti Associates vide an agreement dated 04-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 25341 sq. yds was given to the purchases wherein it is clearly stated that "You purchaser has to take possessions of land of 25341.70 sq.yds as per banakhat on today". There is considerable force in the contention of the appellant that the seized banakhat dated 04/06/1996 does not stipulate handing over of the possession of land in question and therefore, there was no transfer of land under such agreement so as to bring any profit or undisclosed profit during the block period. Moreover, when a Civil Suit No.4801/98 was filed in the City Civil Court against the purchasers on account of disputes due to non payment of balance sale consideration and ultimately in a compromise reached between the parties, the land admeasuring about 25342 sq.yds was agreed to be transferred that itself shows that no transfer had taken place during the block period of the land in question. Under the circumstances, I therefore hold that there was no handing over of possession of land in question to any extent by the appellant to the purchasers and thus, there was no transfer within the meaning of section 2(47) of the Act during the block period and hence, business profit of ₹ 36,52,656/- assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search operation, hence the requisite documents were already before the Revenue Authorities. It was clarified by the Ld. AR that as far as copies of the ledger account and photo-copies of the cash books are concerned those were very much part and parcel of the Revenue record. Likewise, the proof of filing of return for A.Y. 2003-04 was also part and parcel of the Revenue record. At the most, the connected evidence to substantiate the result of the civil suit was filed but the fact about the dispute between the parties was very much in the notice of the Revenue Authorities. We are also of the opinion that the relief by Ld. CIT(A) was not granted merely on appreciation of one single evidence i.e. compromise made between the two parties; but Ld. CIT(A) has also relied upon the provisions of Section 2(47) of the IT. Rules, 1962 along with other factual aspects which were not at all said to be a fresh evidence furnished by the assessee before the first appellate authority. This objection of the Revenue Department is therefore rejected. 15. In the result, Revenue's appeal is dismissed. B. Shri Prahladbhai Ramdas Patel 16. The Revenue has raised following grounds:- "1.The Ld. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ₹ 69,068/-,besides other taxable income of₹ 64,653/-. The appellant has also filed extract in Form 7 and 12 which shows that the appellant is joint owner of agricultural land at Village: Jepur, Taluka: Vijapur District: Mehsana and also Village :Sonardaa, Taluka: Gandhinagar with full irrigation facility. In view of the aforesaid evidence, the explanation offered by the appellant is found acceptable and the addition of₹ 50000/- is directed to be deleted." 19. On hearing the submissions of both the sides, we are of the view that in the absence of any contrary material placed from the side of the Revenue, there is no occasion to disturb the findings of facts made by the Ld. CIT(A). He has appreciated the return filed by the assessee, wherein the source in respect of the alleged unexplained investment was explained and accepted. On account of these circumstances, the view taken by Ld. CIT(A) is hereby confirmed and these two grounds of Revenue is hereby dismissed. 20. The Revenue has raised following ground No.3 & 4:- "3. The Ld. Commissioner of Income tax (A)-XII, Ahmedabad has erred in law and on facts in deleting the addition made of ₹ 65,00,000/- b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted. Accordingly, the additions of ₹ 4,56,582/- and ₹ 6,00,000/- made by A.O are directed to be deleted." 23. On hearing the submissions of both the sides, we are of the view that the impugned addition has stood explained by M/s Omiya Investments, as discussed hereinabove while deciding Revenue's appeal in that case. We have already held that there was a nexus between the investment and the amount received on sale of the said property therefore on the same lines we find no reason to deviate from the view already taken. These grounds of the Revenue are hereby dismissed. 24. The Revenue has raised following grounds No.5 & 6:- "5. The Ld. Commissioner of Income tax (A)-XII, Ahmedabad has erred in law and on facts in deleting the addition of undisclosed income of ₹ 4,56,682/- being 1/8th share in the profit on the sale of land. 6. On the facts and in the circumstances of the case, the Ld. Commissioner of Income tax (A)-XII, Ahmedabad ought to have upheld the order of the Assessing Officer." 25. The Assessing Officer has made the addition consequence upon the profit calculated in the case of M/s Umiya Investment. However, when the matter was carried before Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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