TMI Blog2020 (10) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... / farmers on agreements/ikrarnamas or power of attorney in his name and later transferred the same to M/s Horizon Buildcon Pvt Ltd., on power of attorney of the original owners , ignoring the detailed discussion of the same in the assessment order. On going through the assessment order and the submissions of the assessee and the Revenue, we are of the opinion that the AO has rightly held that documents in question were not signed by any of the party, but the authenticity of these documents cannot be denied in view of the fact that the things have been happened further according to the said MOU and according to other documents found at the business premises of M/s Horizon Builcon (P) Ltd. The tax authorities are entitled to look into the surrounding circumstances are discussed hereinafter. Moreover, the question is that what was the need to prepare these documents by the company when no transactions have been made with the assessee. Hence, these documents also established that the assessee has taken land from various farmers/persons on agreement to sell/biyana or POA and then transferred the same land to the company as POA. We found strong substance on the submissions of ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right to hold that the AO has also not brought any evidence on record to show that the appellant had received any payment from M/s Horizon Buildcon (P) Ltd towards sale consideration of the lands in question in the capacity of owners of land , ignoring the facts on record that M/s Horizon Buildcon (P) Ltd has made payments through cheques and in cash to Sh. Surjit Singh and all of these payments have been found recorded in the books of accounts of M/s Horizon Buildcon (P) Ltd as discussed in the assessment order by the AO as well confirmed by the Ld. CIT(A)-1, Ludhiana in his order dated 12.08.2014 in Appeal No. 1/ROL/IL/ CIT(A)-1/Ldh/2014-15 in the case of M/s Horizon Buildcon (P) Ltd. 3. Whether the Ld.CIT(A) is right to hold that hyped ikrarnamas were executed by them to impress the company appears to be justified and is upheld , ignoring the facts that events have been happened further on the basis of these ikrarnamas as discussed in details in the assessment order and it is also against the human probability that a person transfer his right of property to someone else without taking any consideration. 4. Whether the Ld.CIL(A) is right to hold that the MOU dated 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents have actually been seized from the premises of the assessee itself. 3. Whether the Ld.CIT(A) is right to conclude that various documents found and seized at the time of search have no evidentiary value when the assessing officer has discussed in detail in para 05(a) to (h) of his assessment order dated 21.03.2014 that the same reflect the actual state of affairs of business transactions carried out by the assessee as compared to what is reflected in its books of accounts. 4. The Appellant craves leave to add or amend the grounds of appeal on or before is heard and disposed off. 5. It is prayed that the order of the Commissioner of Income Tax (Appeals), be set-aside and that of the AO be restored on merits. 5. The Revenue in ITA No.672/ASR/2014 for A.Y.2010-2011 has raised the following grounds :- 1. Whether the Ld.CIT(A) is right in deleting the addition of ₹ 2,81,20,180/- made by the assessing officer u/s 69 /69B of the IT Act, 1961 by holding that the Documents i.e. MOU dated 22.01.2008 and supplement MOU dated 18.03.2008 which were found and seized during the time of search, though not signed by either of the parties, in this case; could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sactions carried out by the assessee as compared to what is reflected in its books of accounts. 4. The Appellant craves leave to add or amend the grounds of appeal on or before is heard and disposed off. 5. It is prayed that the order of the Commissioner of Income Tax (Appeals), be set-aside and that of the AO be restored on merits. 7. In all the four appeals issues involved are similar in nature, therefore, for the sake of convenience and brevity, we are taking first the appeal for the A.Y.2009-2010 in ITA No.434/ASR/2014 and the facts and grounds mentioned therein are taken into consideration to decide all the four appeals. 8. Brief facts of the case are that the case of the assessee was reopened u/s.148 of the Act after recording reasons and duly approved. There was an information with the Income Tax Department that the assessee made investment of ₹ 10,92,86,250/- for the purchase of land at village Sultanwind District Amritsar in the financial year 2008-2009 relevant to the assessment year 2009-2010. Notice u/s.148 of the Act was issued to the assessee on 19.03.2015 requiring the assessee to file return of income within 30 days from the receipt of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account/current account/OD account/loan account etc. etc. 2. As per information available with this office, during the year under reference, you have purchase following land at Village Sultanwind from the persons mentioned below for a total amount of ₹ 10,92,76,250/- :- s. N Name of seller Khasra No. Total area Rate per Sq. Yrds Total amount paid of purchase Date of purchase FY 1. Dilbhag Singh Hira Singh 4431 3K 10M = 1750Sqyrds 1900/- 33,25,000/- 7/10/2008 (2008-09) 2. Fakir Singh 4436, 4566 4K5M = 2125 Sqyrds 1650/- 35,06,250/- 15/12/08 (2008-09) 3. Harbans Kaur -4415, 4418, 4419,4427, 4428,4430, 4436, 4437, 5506/4425,5507/4432 15K7M = 7675 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PS4128D Dated 13.01.2016 for submission of various details documents in the assessment proceedings of above named assessee under section 148 of the Income Tax Act, 1961. The Point Wise reply to your notice alongwith details documents sought by your good self are given as under: - 1. Explain your source of Income : I wish to state and submit that I am harvesting agriculture produce on 45 Acres ancestral land and am also a partner in agricultural produce commission agency firm M/s. B.S Trading Company. Further, I was working as a properly consultant/broke during the previous year relevant to the assessment year 2009-10. I have already explained complete sources of income in returns of income filed for the assessment year 2009-10. Copies of the individual partnership firm returns for the A.Y. 2009-10 are enclosed herewith for your kind consideration records. 2. Details of the Immovable assets/Property/Land purchased sold at village Sultanwind during the year under consideration along with name address of the persons from you have purchases the Land and to whom you have sold the said Property/Land: I wish to state and submit that I had neither purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amt refunded to 07/04//2008/D 4418, 4427, 4436 9/5/2008 in SB a/c with Syndicate Bank farmer out of cash withdrawal from SB a/c Syndicate Bank. OC 1390 2/3/09 ijHarbans Kaur, 4416, 17K-1M 3826500 i)Ch. No.394300 Amt.refunded to 1) 07/04/08 HjDilbag Singh 4417, rcvd.for ₹ 35 lacs farmers vide DOC1390 Hira Singh 4418, and deposited on chq.no.95702.95703 2. 10/02/09 DOC jasbir Singh. 4427 23.3.09 in SB a/c 95704for ₹ 7.50 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any monetary benefits. The copy of the sale deed in respect of land sold by you to M/s Horizon Buildcon (P) Ltd. 8/11, Janspura Extension New Delhi as per MOU executed on 22.01.2008. Also furnish the copy of the asreement/MOU executed by you with the said company: I wish to state and submit that I had not sold any land to Ms Horizon Buildcon (P) Ltd. 8/11. Jangpura Extension New Delhi during the previous year relevant year assessment year 2009-10 on the basis of so called MOU dated 22.01.2008. As such this question is not relevant to me. In this connection, I would like to bring your kind notices that I Surjit Singh and Sh. Baljinder Singh were doing the property dealing activities as broker for agriculture and commercial land on commission basis. As per usual practice being followed by the real estate agents we approached M/s Horizon BuildconPvt Ltd with draft/rough copy of Memorandum of Understanding (MOU) dated 22.01.2008. We also papered some imaginary biyana/agreements to sell in our names from different land owners to convince the company about our capacity to consolidate the land and in order to justify high prices of the land after proposed CLU. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as by any one on behalf of said company. 8) That said drafted MOU in not a valid enforceable document as per the law. 9) That we had not received any money from M/s. Horizon Buildcon Pvt. Ltd on the basis of said drafted MOU. 1 solemnly verify that the facts stated above are true and nothing material has been concealed. DEPONENT VERIFICATOIN I SardarSurjit Singh the above named deponent, to hereby verify on oath that the contents of the affidavit above are true to my personal knowledge and nothing material has been concealed or falsely stated. DEPONENT Sir, from the above it becomes amply clear that the draft MOU was never executed and is not a valid document enforceable by law. A copy of the sworn affidavit is enclosed. Regarding land at village Sutanwind, 1 would like to submit that as explained above 1 did not purchase any land during F.Y. 2008-09 or in any other financial year nor I sold any land in my individual capacity to M/s. Horizon Buildcon (P) Ltd. However, the details of the Land sold by me as a representative of farmers as Power of Attorney (POA) holders on their behalf is given in Para 2 above and the same may k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and @ ₹ 2310/- Per Sq. have been shown by the assessee with an intention to mislead the M/s Horizon Buildcon Pvt. Ltd. For putting the proposal of sale of land at higher prices and earned more more profit from the deal. However, the assessee could not succeed in his target to make the deal with M/s Horizon Buildcon (P) Ltd. on the basis of the falls and fabricated Ikrarnamas/Agreement to sale being prepared by him because the director of the said company are quite intelligent and having the wide knowledge huge exposure of the real estate sector. We are also enclosing herewith the Khasra Map showing the location and rate shown in the false fabricated Ikrarnama/Agreement. It is common knowledge that where the Khasra are undivided the rates for the same khasra are comparable and/or equal. However, in the false and fabricated Ikrarnama/Agreement to sale the rates have been taken to lure the company M/s Horizon Buildcon Pvt. Ltd for example part of the undivided khasra no. 4415 4419 are at the most prime location and rates in the said Ikrarnama are 1100-1200-2100-2900 per sqrds, whereas undivided khasra no. 4431 4429 which have no connectivity other than helicopter are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V. CIT(1973) 88 ITR 311 (Mad); v) The Hon 'ble High Court of Delhi in the case of Commissioner of Income Tax Vs. Dinesh Jain HUF reported in 254 CTR (Del) 534; vii) The Hon'ble High Court of Punjab Haryana in the case of Commissioner of Income Tax Vs. Harpal Singh reported in (2008) 3 DTR 254; viii) The Hon 'ble Apex Court in the case of Commissioner of Income Tax vs. P. V.Kalyanasundaram reported in (2007) CTR (SC) 97; The assessee further submitted and placed reliance on the following judgements: - A Suspicion however great cannot take the place of evidence. Honorable SC in Umacharan 37 ITR 271 applied by P HHC in AnupamKapoor 299 ITR 179. In this case it was held by honorable Supreme court that There are many surmises and conjectures, and the conclusion is the result of suspicion which cannot take the place of proof in these matters. B. That the Additions cannot be made merely on the basis of conjectures and surmises. K.R Varghese v. ITO 131 ITR 597 (SC) C. That the Burden to prove apparent is not real on the revenue. Sc in 125 ITR 713-Kishanchand Chellaram; it was held the amount cannot be assessed as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty @ ₹ 2310/- per Sq. Yrds. Further, several other documents i.e. Ikrarnamas/agreement to sell executed with various persons/farmers, are in the possession of department which clearly indicates that Sh. Surjit Singh and Baljinder Singh had purchased land from various persons at Village Sultanwind Distt. Amritsar on agreement to sell or Power of Attorney in their name or their wives and later on transferred the same land to Mls Horizon Buildcon (P) Ltd. as POA of the original land owners. ii) Further, several agreements (lkrarnama) were were executed between the assessee Sh. Surjit Singh Sh. Baljinder Singh and the below mentioned persons a) Dilbhag Singh Hira Singh R/o Village Sultanwind Amritsar. b) Fakir Singh s/o Sh. Tarlok Singh R/o Village Sultanwind Amritsar. c) Srnt. Harbans Kaur wlo Sh. Subheg Singh/o Village Sultanwind Amritsar. d) Sh. Satpal Swarn, Amarjit Prithpal, Gurmeet, Kewal Singh s/o Sh. Bahadur Singh R/oVillage Sultanwind Amritsar e) Sh. Balbir, Jasbir Ranjit Singh s/o Sh. Gurmej Singh R/o Basant Nagar Sultanwind Road, Amritsar. f) Sh. Parkash Singh Baljit Singh s/o Sh. Joginder Singh and Sh. Gurpartap Singh R/o Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aser will have the fullest rights to make plots on the land, get the plans drawn on it, get the roads built-up on it and get the agreements written further or get the foundations of the plots completed up and wherever required up the signatures thereupon. The agreements to sell are written in Punjabi, the scanned copy of one of such agreement to sell which has been executed between Smt. Harbans Kaur and Sh. Surjit Singh others is being reproduced herebelow.- Agreement to sell incorporated by the AO in pages 9 10 written in Punjabi language are not readable. The agreement to sell or Ikrarnamas were written in Punjabi. The subject of page No.2 of this agreement to sell, which have been underlined in the agreement to sell is being translated into English below:- Out of total sale consideration, I received a sum of ₹ 24,00,000/- as advance in the presence of witnesses at the time writing of this agreement to sell and the balance amount will be taken at the time of Registry and right of land (Kabza) has been given to the purchasers at the time of writing to this instrument but the ownership will be given at the time of registry. The balance amount will be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the assessee was required to produce the farmers whom he has purchased land in question on agreement to sell. In response, on 22/3/2016, the assessee produced one farmer Sh. Rajinder Kumar s/o Sh. Sohan Lal Statement of Sh. Rajinder Kumar is recorded, which is reproduced as under:- Q. I What do you do? Ans. I am doing agricultural activities by taking land on lease. Q.2 Are you filing your ITR Ans. No Q.3 How much' agricultural land being cultivated by you by taking on lease. Ans. I am cultivating two acres of land by taking on lease @ ₹ 35000/- per acres. Q4 Do you have your own land or it was in you possession now or earlier. Ans. At present I have no my own agricultural land. Earlier I was having agricultural land measuring I Kanal 2 Marlas, which have been sold by me. Q.5. To whom you have sold your agricultural land meas in Kanal 2 Marlas Ans. I sold my agrcultrualland through Surjit Singh. Whom he (Surjit Singh) sold, I do know. I have taken all sale consideration from Sh. Surjit Singh. Q.6 By which mode you have received payment from Sh.Surjit Singh against sale of land. Ans. I took payment in cash an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rizon Buildcon(P) Ltd. vide sale deed dated 11/1212009. The affidavit was written on 21/3/2016 and statement was recorded on 22/3/2016. On 21/3/2016 it was in his knowledge whom he sold his land but on 22/3/2016 he forgotten. Secondly, in reply to question No, 15, he stated that I can only put sign in Punjab and I am totally unaware about English language, I cannot read, write and understand English. Even before recorded his statement, he was asked in which language you want to record your statement and he stated that I can understand only Punjabi and my statement should be recorded in Punjabi. The person, who knows only Punjabi language and who refused to record his statement in English or even in Hindi language, given an affidavit which has totally been written in English. From this, it is proved that he did know anything about the contents of affidavit, in which he claimed that land has been sold to Mls Horizon Buildcon (P) Ltd. Actually he sold his land to S. Surjit Singh on agreement to sell after taking full payment and given him Power of Attorney, further he is totally unaware whom S. Surjit Singn sold his land because he has already sold his land to Surjit Singh o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts of his land to Sh. Surjit Singh that also without any consideration. Is it possible - No, not at all. Actually, Sh. Surjit Singh purchased his land admeasuring I Kanal 2 Marlas on agreement to sell after making full payment and then procured Power of Attorney of his land from Sh. Rajinder Kumar. Otherwise then, who will give Power of Attorney to a unknown person, whom he do not know before giving Power of Attoney and transferred all rights of his only land, which is the only means of his livelihood, even the right has been given through this agreement to sell that if the seller pull back, the purchaser has right to get registry of land through Court. The instrument written in such proper and legal language can never be said an imaginary or fake instrument. Third, when as per question No. 13, he was asked to tell the rate of land at which he sold his land. Sh. Rajinder Kumar replied, he do not know about rate and rate was not settled. The reply again raised question that how it is possible that a person is being sold his property and do not know at which rate. In human probability it is not possible. When anyone make any kind of transaction, first he settle rate of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joginder Singh Mr. Baljit Singh slo Sh. Joginder Singh Mr. Gurpreet Singh slo Sh.Shamsher Singh Mr. Rajinder Singh slo Sh. Sohan Lal Mrs. Rajwinder Kaur wlo Sh. Baljider Singh We have already done the statement of Mr. Rajinder Kumar, the other persons we are contacting, are away to Anandpur Sahib and shell be available after 24/312016 i.e.Holi. Smt. Harbans Kaur is an old aged lady of 85 years, as such she cannot come to our office. After local enquiries, it has come to our notice that Sh.Balbir Singh has died and other two brothers have moved to other places. However, we shall be still truing our level best to contact some more farmers and bring for the physical attendance. On the request of Counsel of the assessee, the case adjourned to 28/02/2016 and it has been cleared vide order sheet entry dated 23/3/2016 that since the assessment in this case is barred by time on 31/3/2016, this is the final opportunity and no further adjournment will be granted and in case of non attendance and non-filing of reply and non-producing of the persons the amount of ₹ 10,92,76,250/- invested in purchase of land from various persons will be added in your t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of income, it is seen and clear that the assessee has not shown any commission income from property commission for the AY 2006-07 to 2010-11. In AY 2011-12, the assessee shown commission income from property but there is nowhere mentioned that the commission has been received from M/s Horizon Buildcon (P) Ltd.; Merely, mentioning declaring income on account of commission on property, cannot proved that the commission is on account of this alleged transaction. Moreover, it cannot be said that a person who is doing the business of commission agent as property dealer, cannot make any investment in purchase of property. Therefore, the submission of the assessee that he is showing income from property consultancy has no relevancy in respect of investment made by him in purchase of property from various persons on agreement to sell/biayana. iv) The copies of Power of Attorneys furnished by the asses se, which have been obtained from all sellers of the land, wherein they have mentioned that they have given the power of attorney to the assessee only because of faith on him without any money consideration, is also not having any weight and the same is an afterthought. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so mentioned that Schedule of payments made against MOU dated 22.01.2008 between Sh. Surjit Singh s/o Sh. Harjinder Singh Village Bhakaha Hari Singh Tehsil Ajanala, Amritsar, S. Baljinder Singh s/o Sh. Natha Singh Village Ramana Chakk Amritsar and M/s Horizon Buildcon (P) Ltd. As per these documents, the company again made payment of ₹ 1,50,00,000/- through various cheques and ₹ 25,00,000/- in cash. When these documents confronted to the assessee vide order sheet entry dated 8/3/2016, the assessee in reply submitted that these are unsigned documents and therefore, does not have any value in the eyes of law. The plea given by the assessee is not acceptable being entirely baseless and cannot be relied upon. The claim of the assessee that the MOU dated 22/01/2008 is not signed and have no weight in the eyes of the law, is not acceptable, due to the reasons that on the basis of this MOU dated 22/1/2008 the assessee further executed an Agreement Deed between the assessee and the company M/s Horizon Buildcom(P) Ltd., which has signed by both the parties, in which the company has taken congnizance of this MOU dated 22/1/2008. Hence, it cannot be said that the unsigned MOU has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l owners on agreement to sell/Ikrarnamas after making full payments because these agreements/biyanas were written in full letter and spirit, which in any way cannot e said as imaginary biyanas as claimed by the assessee in his reply. viii) Further the assessee's plea that all the addition made in the case of M/s Horizon Buildcon(P) Ltd. by the Assessing Officer has been deleted by the Ld. CIT(A)(C), have also no relevancy with the case of the assessee. In the case of M/s Horizon Buildcon(P) Ltd, the issue of addition was difference in sale rate of land as per MOU and as per Registration Deed. Therefore, there is no relevancy of the case of M/s Horizon Buildcon (P) Ltd with the case of the assessee. Accordingly, the AO framed the assessment after observing as under :- 2.3. In view of the above facts and circumstances of the case, it is clearly established that the assessee has purchased land from various persons/farmers on agreement/ikrarnama or Power of Attorney in his name and later transferred the same land to M/s Horizon Buildcon(P) Ltd as POA of the original owners. The Khasra numbers mentioned in the registration deeds are the same as in the agreements to sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60,30,000/- 27/5/2008 1,16,07,750/- 7.3.2008 4416,4417 4K IM 2025 Sqyrds 3920/- 79,38,000/- 2/3/2009 46,77,750/- 27.11.2008 4418,4427 3K17M 1925 Sqyrds 1200/- 23,10,000/- 2/3/2009 44,46,750/- 27.11.2008 4428, 4430 5K13M 2825 Sqyrds 1100/- 31,07,500/- 2/3/2009 65,25,750/- 7.10.2008 4431 3 K 10M 1750 Sqyrds 1900/- 33,25,000/- 2/3/2009 40,42,500/- 27K2M(13550sqyrds) 2,27,10,500/- 3,13,00,500/- The assessee has earned short term capital gain on this transaction amounting to ₹ 85,90,000/-, but the same has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Charge u/s 234A, 234B and 234C as per provisions of Act. Issue demand notice and other requisite documents. 9. Against the above order of CIT(A), the assessee preferred appeal before the CIT(A) and the CIT(A) allowed the appeal of the assessee relying on its own order for the A.Y.2008-2009 and the observations made therein are as under :- 6. I have considered the assessment order, the grounds of appeal and written submissions of the appellant and the grounds of appeal are disposed off as under:- (i) The ground of appeal no. 1 and 2 are against the addition of ₹ 79,50,000/- on account of suspected investment in purchases of land from undisclosed sources. During the course of assessment proceedings the assessee filed details of bank accounts maintained by him. As per information available with the AO, the assessee along with Shri Surjit Singh had purchased the following lands at village Sultanwind from the persons mentioned below for a total =^v, amount of ₹ 1,93,45,000/- Name of seller Total area Rate per sq yards Total amount paid for purchase Date of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Singh and Shri Baljinder Singh and the persons mentioned below:- (a) Smt. Rajwinder Kaur w/o Shri Balwinder Singh, village Raman Chakk Teh Baba Bakala, Amritsar. (b) Shri Pargat Singh and Shri Jagir Singh' s/o Shri Kunclan Singh, village Sultanwind, Amritsar. (c) Shri Rajinder Kumar s/o Shri Sohan Lai R/o 638 Chowk Gali Village Majitha, Amritsar. As per the agreements to sell (Ikrarnama), the assessee purchased land from the above said persons during the year under consideration on various rates rangmgfrom ₹ 2900/-per sq yrds to ₹ 3920/- per sq yrds. These agreements were signed by both the parties ie seller and purchaser. The khasra numbers mentioned on these agreements were the same as mentioned on the MOU dated 22-01-2008. When the assessee was confronted with these agreements he stated that these were imaginary biyana/agreements to sell in their names from different land owners to convince the company about their capacity to consolidate the land and in order to justify high prices of land. This plea of the assessee Vuwas held by the AO to be totally undependable as the biyana/agreement to sell/ ikrarnamas were written ip letter and spi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument in which it is clearly written that if the seller pull back from the contents written in this agreement to sell, the purchaser has full right to get registry of the land through Court. Therefore the AO held that the from the plain reading of these agreements to sell it is clear that these documents are legal documents and are not imaginary or fake documents as claimed by the assessee and it is clear that the assessee purchased land from various farmers/persons on these agreements to sell/ power of attorney and later on transferred to M/s Horizon Buildcon Pvt Ltd as POA. The AO rejected the power of attorneys because the same was given without money consideration and only because of good faith for the reason that while preparing the power of attorney, it is mandatory to mention/write lines that no money consideration has been done in lieu of this power of attorney. The AO did not believe that power of attorney was done without consideration and held that the assessee had purchased land from the actual owners of land after making full payments on agreements/biyanas and on power of attorney and thereafter transferred the same land to M/s Horizon Buildcon (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4128D) for AY 2008-09. The nppeal in the ease of Shri Surjit Singh against the assessment order dated 28-03-2016 for AY 2008-09 has been decided by the undersigned vide order dated 31-05-2016 in appeal no. 283/15-16 in favour of the appellant. Therefore following the said appellate order dated 31-05-2016 in appeal no. 283/15-16 in the case of Shri Surjit Singh S/o Shri Harjinder Singh, 29-D Guru Amardas Avenue, Amritsar (PAN ALNPS4128D) for A Y 2008-09 decided by the undersigned and for the same reasons given therein, the appeal of the appellant on the issue under consideration is decided in his favour and the addition of ₹ 79,50,000/- on account of his unaccounted investment in purchase of land , from his wife Smt. Rajwinder Kaur and various persons on agreement to sell or power of attorney, which was later on transferred /sold to company M/s Horizon Buildcon Pvt Ltd as POA on basis of MOU, is deleted. (iii) The ground of appeal no. 3 is against the addition of ₹ 19 Lacs on account of investment in .property from money received from his brother through normal banking channels. As per the assessment order the assessee had made total investment of ₹ 23,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given above through banking channels clearly establishes the genuineness of the transactions and the source of receipts of ₹ 19 Lacs, The copy of the bank account no. 30111828254 of the appellant in SBI, Town Hall, Amritsar was called for from the appellant and the above transactions of remittance from vk abroad therein were verified by the undersigned. The appellant also submitted the copy of confirmation of the above remittances from Canada to his brother Sh. Baljinder Singh (appellant). Accordingly there is no justification for the addition of ₹ 19 Lacs on account of income from Undisclosed sources u/s 69 of the Act and the addition of ₹ 19 Lacs is deleted. 7. In the result, appeal is allowed. 10. Finally, the CIT(A) decided the present appeal of the assessee after observing as under :- DECISION- The facts of the case under appeal are the same as in the case of the appellant for AY 2008-09. The appeal of the appellant against the assessment order dated 28-03-2016 in its case for AY 2008- 09 has been decided by the undersigned vide order dated 31-05-2016 in appeal no. 283/ 15-16. Therefore following the said appellate order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been held above that the appellant had not purchased any land in Sultan wind, District Amritsar from the farmers/ persons on agreements/ikrarnamas or power of attorney in his name and had not transferred/sold the same to M/s Horizon Buildcon Pvt Ltd during the year under consideration in the capacity of owner of land, therefore the question of charging capital gain thereon does not arise. Accordingly the addition of ₹ 85,90,000/- on account of short term capital gain is deleted. 11. Aggrieved from the above order of CIT(A), the Revenue is in appeal before the Income Tax Appellate Tribunal. 12. Ld. DR before us submitted his written submissions which read as under :- 1. In this case , a search u/s 132 of the I.T. Act, was conducted on 07.04.2011 on the assessee who is a builder. It was found that assessee had purchased approx. 50,000/- Sq yards of land (11 Acres) at Vill. Sultanwind, Amritsar. During the course of search action at office of the assessee one document was found and seized as per Annexure DNB-1, A-2, Pages 26-30 (Now marked as Annexure A). This document is a unsigned copy of a memorandum of Understanding (MOU) dated 22-01- 2008 between Sh. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 6. Further, another MOU dated 18.03.2008 was executed between the above parties which was seized as per document DNB-1, A-1, P- 133-138 (Now marked as Annexure-E), in which it is mentioned that the terms of the MOU dated 22.01.2008 have been complied with and hence this supplementary MOU is being executed. The terms of the MOU dated 22.01.2008 have been further reiterated in this document. This document is also however unsigned. 7. As per one more documents seized as per DNB-1, A-9, P-168 (Now marked as Annexure-F), detail of payments made for this land is noted under the heading Accounts of Sh. Surjit Singh . As per it total payments of ₹ 11,94,37,570/- has been worked out. After making certain deductions the balance is struck at ₹ 11,67,73,370/-. 8. As per document DNR, A-4, P-1 2 (Now marked as Annexure- G), found from the residence of the assessee several payments in the name of Sh. Surjit Singh have been noted. 9. As per certain documents found and seized during search as DNB-1, A-1 A-2 which are copies of various agreements to sell, as per which Sh. Surjit Singh and Sh. Baljinder Singh have purchased the land from various per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, 2010-11 2011-12 as against nil income shown in the assessment year 2009-10 2010-11 and returned income of ₹ 16,14,390/- for the A.Y 2012-13, as during the course of assessment proceedings. 14.1 Assessee preferred appeal before the CIT(A)-5, Ludhiana against the assessment orders. Before the CIT(A), assessee claimed that the MOU dated 22-01-2008 was rejected as the rates quoted by the vendor were too high. Assessee also claimed that the quoted rates were inclusive of the liability on the part of the brokers to obtain CLU from PUDA i.e., change of land use for commercial purpose, which could never be obtained by the brokers. In its claim, an affidavit from Sh. Surjit Singh dated 12-12-2013 was relied upon whereby it was claimed that surjit singh had testified that the MOU was not executed and that rates in the above mentioned MOU were quoted and offered for commercial approved land and that all the cost for obtaining the approvals for change in land use (CLU) and building plans sanctioned from appropriate authorities would have been paid and borne by the brokers. However, no such clause was given in the MOU. In fact as per the para 1 of the MOU the second par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh cheques and the same has been verified by the AO during remand proceedings. Therefore this document does not give any support to Ao s view of purchase consideration being 11.55 Cr. 15.3 Similarly he has rejected the AO s contention with regard to document as per pages 1 2 of A-2, DNR (Now marked as Annexure G) which records various payments to Sh. Surjit Singh for the reason that all these payments have been found recorded in the books of accounts of the assessee and verified during remand proceedings by the AO. 15.4 As regards the Agreements to sell (ikraar namas) relied upon by the AO which were seized as A-1 and A-2 of DNB-1 (Now marked as Annexure H), CIT(A) has agreed to the claim of the assessee that these have been wrongly recorded as sale deeds by the AO. CIT(A) has held that there is enough evidence as per which these ikraar namas entered into between the brokers Sh. Surjit Singh and others and the original owners of land are collusive in nature to hold the assessee to agree to unusually high price of land for purchase and had been submitted by the brokers alongwith unsigned copy of the MOU. It has been agreed upon by the CIT(A) that on realizing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marked as Annexure H). These payments cannot be advance made to Surjit Singh for obtaining CLU. This documents shows that the advance equivalent to 15% of the gross amount mentioned on 1st MOU has been paid directly to the original land owners from whom the land has to be purchased. ii. Similarly CIT(A) has ignored document DNB-1, A-2, Page-75 (Now marked as Annexure-C) on which amount of advance to be paid to the land owners has been calculated @ 15% of the gross payment as per total Sq. Yards @ ₹ 2310/- per Sq. yard. The aggregate amount of advance worked out is exactly 1.75 crores. It is pertinent to mention that in the 9 Ikraarnamas, all these persons whose names are mentioned on this document, are the co-owners of the land. The assessee has admitted in his submissions before the CIT(A) that this amount has been entered in the books of accounts, but has claimed that it is advance paid to Sh. Surjit singh for obtaining CLU from PUDA. However, if this document is examined in light with the names mentioned on Ikraarnamas and also as per schedule of payment recorded in DNB-1, A-2, Page -72 (Now marked as Annexure-B), the same cannot be an advance for CLU but advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2036/- (*) ₹ 2421504/- incurred on registration other exps and hence the total amount come to ₹ 25703540/- 2. Advance to Surjit Singh for CLU 27611856/- (#) 3. Advanve to Surjit Singh others for CLU 17500000 (@) ₹ 1864334 incurred on earth purchased on various dates debited to the account of Advance paid for land Amritsar. Hence final balance comes to ₹ 19364334/-. Kindly refer advance for land Amritsar Account lying in DCIT records) 4. Advance to Gurpartap Singh 2000000 5. Advance to Prakash Singh 5000000 6. Advance to SS Steel for Land 14044400 7. Security to Praksh shuttering 5000000 8. Amount incurred for Civil Work- WIP 19995692 ($) 9. Amount incurred for Land Development 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for commercial approved land and that all the cost for obtaining the approvals for change in land use (CLU) and building plans sanctioned from appropriate authorities would have been paid and borne by the brokers. However, non obtaining of CLU cannot be a ground for rejecting MOU because there is no clause in the term and conditions recorded in the MOU. No where in the 1st and 2nd MOU, it has been mentioned that first party will procure CLU from PUDA as a pre condition. In fact as per the para 1 of the MOU the second party after signing the MOU was free to prepare, submit and obtain sanctions of the plan, change of land use, license for construction of the project from statutory authorities in its own name. Nowhere in the MOU, such liability has been dwelled upon the brokers. Moreover, no evidence was produced by the assessee that any CLU was applied by the brokers from PUDA on behalf of the assessee company. Therefore, Ld CIT(A) has erred while accepting the claim of the assessee that ₹ 2,76,11,856/- were paid to Sh. Surjit Singh as advance to procure CLU from PUDA. Infact, this is an afterthought and since Sh. Surjit Singh is party to the payment of money in excess of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 1.75 Cr , ₹ 1.5 crores have been paid through cheques and the rest of the amount of ₹ 25 Lakhs has been paid in cash. Again, there is no clause in the term and conditions recorded in the MOU regarding obtaining CLU by the brokers. No where in the 1st and 2nd MOU, it has been mentioned that first party will procure CLU from PUDA as a pre condition. Infact as per the para 1 of the MOU the second party after signing the MOU was free to prepare, submit and obtain sanctions of the plan, change of land use, license for construction of the project from statutory authorities in its own name. Nowhere in the MOU, such liability has been dwelled upon the brokers. Moreover, no evidence was produced by the assessee that any CLU was applied by the brokers from PUDA on behalf of the assessee company. Therefore, Ld CIT(A) has erred while accepting the claim of the assessee that ₹ 1.75 Crores/- were paid to Sh. Surjit Singh as advance to procure CLU from PUDA. Although this amount has been recorded in books of accounts and has been paid through banking channels but it does not negate the fact that amount in excess of the amounts as per registration deeds of lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts it is quite clear that although not all the payments recorded in this document 168, A-9, DNB-1 (Now marked as Annexure F) are made in connection with the purchase of land and also that some of them have been through cheques and recorded in books of accounts, yet it can be clearly inferred from this document that assessee has made payments in excess of amount as per registered deeds and that the unsigned MOU is a valid piece of evidence in this regard. vi. Further A-1 A-2, DNB-1, (Now marked as Annexure H) has been rejected by the Ld. CIT(A) which is copies of agreement to sell as being collusive in nature and submitted by the brokers alongwith copy of MOU to hold the assessee to agree to unusually high price of land for purchase. However, Ld CIT(A) has missed the vital point that these agreement to sell wherein receipt of advance from brokers by the land owners have been recorded and are signed by the same persons who are the owner of the land. It is beyond comprehension that so many owners will put their signatures on a fake agreement to sell which is prepared on a STAMP PAPER, which bears the exact details of their land and also has details of advance having rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch lower price. Had a search not taken place, only the POAs and the registered sale deeds would have become the part of official revenue record and not the agreements to sell which got unearthed due to the search and seizure action. viii. In view of the above facts and arguments, it is clear that Ld CIT(A) has erred while holding that AO has invoked section 69 merely on presumption based surmises and conjuctures that assessee has made payments in accordance with the terms of the MOU. In fact, the documents relied upon by the AO clearly show that assessee has made payments in excess of the amounts mentioned in the registered sale deed and in all probability as per the terms and conditions of the MOU. 14. In addition to the above written submissions, ld. CIT-DR filed paper book containing copies of seized documents including MOU etc., which is placed on record and made detailed and elaborate arguments and vehemently submitted that the learned CIT(A) has not considered the provisions of Section 2(47) of the Income Tax Act, 1961 as well as Section 47 of the Income Tax Act, 1961 properly. As per Section 2(47) of the Act, the requirement of transfer of property was completed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 3. Parkash Singh 096860 07.01.08 2,00,000/- 4. Parkash Singh 096866 21.01.08 10,00,000/- 5. Surjit Singh 096853 01.12.07 5,00,000/- 6. Surjit Singh 096864 07.01.08 5,00,000/- 7. Manjit Kaur 096855 22.12.07 10,00,000/- 8. Amarjit Kaur 096856 22.12.07 4,50,000/- 9. Jagir Kaur 096857 22.12.07 4,50,000/- 10. Rajwinder Kaur 096858 22.12.07 4,50,000/- 11 Baljit Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the MOU dated 22/01/2008 is not signed and have no weight in the eyes of the law, is not acceptable, due to the reasons that on the basis of this MOU dated 22/01/2008 the assessee further executed an Agreement Deed between the assessee and the company M/s Horizon Buildcon (P) Ltd., which has signed by both the parties, in which the company has taken congnizance of this MOU dated 22/01/2008. Hence, it cannot be said that the unsigned MOU has no weight in the eyes of law when the purchaser and seller has taken congnizance of this MOU in their further transaction. Further, the other documents i.e. 'Account of Sh.Surjit Singh and Schedule of payment', are the documents of unaccounted transactions made between assessee and the company, which prepared only for remembering purpose and due to that reason, these documents had not been signed by any other party. The contention of the assessee that these unsigned documents have no weigh in the eyes of law is not acceptable in view of this factual position. 17. We also observed from the order of the Assessing Officer at para No.2.3 in which the submissions of the assessee have been incorporated by the Assessing Officer, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SB a/c with Syndicate Bank farmer out of cash withdrawal from SB a/c Syndicate Bank. OC 1390 2/3/09 ijHarbans Kaur, 4416, 17K-1M 3826500/- i)Ch. No.394300 Amt.refunded to 1) 07/04/08 HjDilbag Singh 4417, rcvd.for ₹ 35 lacs farmers vide DOC1390 Hira Singh 4418, and deposited on chq.no.95702.95703 2. 10/02/09 DOC jasbir Singh. 4427 23.3.09 in SB a/c 95704for ₹ 7.50 lacs 2815 iii)Praksh Singh 4428, with Syndicate bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in these agreements to sell If the purchaser pull back, the advance given by him will be forfeited and if the seller will pull back, he has to pay double amount of advance and the purchaser has full right to get registry through Court. I being the sellers will be responsible for the fault in the ownership and the purchaser will have the fullest rights to make plots on the land, get the plans drawn on it, get the roads built-up on it and get the agreements written further or get the foundations of the plots completed up and wherever required up the signatures thereupon. 18. From the above submissions of the assessee and findings recorded by the Assessing Officer, both are contradictory and these issues have not been properly dealt with by the ld. CIT(A) while allowing the appeal of the assessee. Further, the CIT(A) wrongly held that the AO has not brought any evidence on record to show that the assessee had purchased the land from various persons/ farmers on agreements/ikrarnamas or power of attorney in his name and later transferred the same to M/s Horizon Buildcon Pvt Ltd., on power of attorney of the original owners , ignoring the detailed discussion of the same in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. which are evident from the records seized by the revenue authorities during the course of search and seizure and the statements of accounts were also found, which is also discernible from the assessment order as well as the documents considered by the AO during the course of assessment. However, the CIT(A) has ignored the legal position which were applicable in the present case in hand. Accordingly as per above discussions the Capital Gain calculated by the Assessing Officer is also correct. Accordingly, we dismiss the impugned order passed by the CIT(A) and allow the appeal of Revenue for A.Y.2009-2010 in ITA No.434/ASR/2016. Thus, ITA No.434/ASR/2016 is allowed. 20. Since the issues involved in other appeals of the Revenue are similar to the appeal decided by us in the case of assessee-Surjit Singh in ITA no.434/ASR/2016, wherein we have dismissed the impugned order passed by the CIT(A) and allowed the appeal of the Revenue, therefore, our observations made therein shall apply mutatis mutandis to the appeals of the Revenue in case of M/s Horizon Buildcon Pvt. Ltd. in ITA Nos.671-673/ASR/2014 for the assessment years 2009-2010 to 2011-2012. Thus, ITA Nos.671-673/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of three months from the date case is closed for judgment . In the rules so framed, as a result of these directions, the expression ordinarily has been inserted in the requirement to pronounce the order within a period of 90days. The question then arises whether the passing of this order, beyond ninety days, was necessitated by any extraordinary circumstances. 22. We also find that the aforesaid issue has been answered by a coordinate Bench of the Tribunal viz; ITAT, Mumbai F Bench in DCIT, Central Circle-3(2), Mumbai vs JSW Limited ors (ITA No.6264/Mum/18 dated 14.5.2020, wherein, it was observed as under: 9. Let us in this light revert to the prevailing situation in the country. On 24th March,2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only inconsonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April2020, held that directed while calc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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