TMI Blog2022 (12) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... witness were made the basis of the impugned order is a serious flaw which makes the order nullity. We note that same view was expressed in the case of Eastern Commercial Enterprises [ 1993 (12) TMI 26 - CALCUTTA HIGH COURT] wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on notice of the case made out against him. The documents, which were found in the possession of other person, does not bear the name of the assessee, that is, the name of the assessee is not mentioned in the statement of another person. No addition can be made, if documents impounded during survey are unsigned and incomplete. No addition of unaccounted investment can be sustained when Assessing Officer had not made any further investigation. No statement recorded of land owners or purchasers as mentioned in the sale deed by AO to corroborate contents of impounded Satakhat. No specific query raised in respect of impounded Satakhat or the assessee to Turmish or Meera Kama by investing wing or AO. No addition can be made in respect of un-signed, unstamped, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs.50,00,000/- on account of alleged payments made to Maniben Balabhai Others vide Satakhat Deed dated 16-08-2010 for purchase of land at Bamroli, Block No.45 as unexplained investment u/s. 69 of the Income Tax Act. 4. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs. 17,50,000/- on account of alleged payments made to Bhaniben Bhanabhai Others vide Satakhat Deed dated 12.10.2010 for purchase of land at Bamroli, Block No.45 as unexplained investment u/s 69 of the Income Tax Act. 5. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs. 1,00,000/- on account of alleged payments made to Lilaben Dayyabhai Others vide Satakhat Deed dated 14-03-2012 for purchase of land at Jiav, R.S.No.358/1 358/2, Block No.437 as unexplained investment u/s. 69 of the Income Tax Act. 6. The learned CIT(A) has erred in law and on facts in upholding the action of the ld. A.O. in making an addition of Rs.1,00,000/- on account of alleged payments made to Dahiben Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available in the impounded hard disc were taken. The print results so recovered were impounded as per Annexure A-l, Page Nos.1 to 149, Annexure-A-2, Page Nos. 1 to 32, Annexure-A-3, Page Nos. 1 to 102 and Annexure-A-4, Page Nos. 1 to 154. On perusal of the said files following Satakhat in the name of the assessee was found: Land Details Other Party Date of Satakhat Cash Payment made through Satakhat Bamroli, Block Number-155 05.02.2011 Rs. 58,50,000 (Assessee admitted to have j make cash payment of Rs. 29,50,000/-) 13.33% share in Bamroli, Block Number-45 Chetanbhai Chhanabhai Others 09.10.2010 Total land was agreed to be purchased for; Rs.80,00,000/-, out of which Rs. 25,00,000/- were paid in cash.) 13.33% share in Bamroli, Block Number-45 Chetanbhai Chhanabhai Others 09.10.2010 Total land was agreed to be purchased for Rs.59,50,000/-, out of which Rs. 20,00,000/- were paid in cash.) 66. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse to notice u/s 148 issued to assessee on 30.12.2014, the assessee has filed copy of his return of income in response to notice u/s 148 on 13.11.2015 and requested to treat ROI filed on 26.09.2011 as ROI filed in compliance to notice u/s 148. Notice u/s 143(2) was issued for assessee on 13.11.2015 and duly served upon the assessee. Notice u/s 142(1) is issued to assessee on 13.11.2015 and duly served upon the assessee. The assessee was requested to furnish details on 23.11.2015. Further, the assessee has not filed his objection for reopening the case but the reason for reopening was provided to the assessee on 15.12.2015. Further, Assessing Officer given one more opportunity to the assessee by issuing notice u/s 142(1) dated 15.12.2015 to represent his case on 22.12.2015. In response thereto, the assessee attended the hearings from time to time and filed written submissions. After examining the details filed test checking the details with return income document furnished, the income returned by the assessee was examined by Assessing Officer as below: (a) Satakhat deed with Chanabhai Prabhubhat others dated 09.10.20l0 for the land at Moje- Bamroli, Block No. 45, 13.33% sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -be taxed in your hand on protective basis. (b) The assessee has filed his submission before the assessing officer. The AO noted that Assessee denied signing any such Satakhat and also denied purchasing of such land. Therefore assessing officer noted that were no merits in the contentions of the assessee. (c) Thereafter, assessing officer examined relevant statement of the assessee which was given before the DDIT (Inv). Surat on 02.04,2013, is as under: I have not made any of these deals. I don t know how these Satakhat were prepared,'' Further, he also gave his declaration on oath that whatever stated above is true and correct to the best of my knowledge. The above statement has been given by me voluntarily without any coercion, threat, inducement or undue influence. The above statement is given by me. The same has been read by me, explained to me and found to be correct. 9. It was observed by Assessing Officer that Notary register of Smt. Meera Kania w/o Shri Turmish Kaniya should be called for. On perusal of such notary register it was noticed that the assessee has been doing his documentation with Turmish Kania and has notarized many satakhat deeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvenient to the purchaser. The seller save money on account of lower capital gain tax buyer gets the window to invest his unaccounted money and saves tax on lower stamp duty, lower registration cost and no tax on cash / unexplained investment beyond his books of account. The only proof of transaction of unexplained Investment is Satakhat Agreements agreed mutually signed by each other. This document is destroyed after doing the Registration, which destroys any and every evidence of concealed income by the purchaser and beyond books, unexplained Investment made by the purchaser. Assessee's cash book books of account do not show any such entry of payment. It is held that assessee has done the transaction as investor. Cash of Rs.25,00,000/- is paid as an advance by Kalpeshbhai Mafatlal Patel and Yogeshkumar Mohanlal Patel on 09.10.2010 to the seller party The half of the advance i.e. the share of assessee of Rs.12,50,000/- recorded as paid by the assessee as per the impounded satakhat is treated as unexplained investment u/s 69 of I.T. Act. Assessee has not shown this investment in his books. 11. By following the same logic and method, the assessing officer made addition in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Block No.437, area of 832.42 Sq. Mtrs. out of total area admeasuring 9989 Sq.Mtr., the Assessing Officer made addition observing that assessee's cash book books of account do not show any such entry of payment. It is held that assessee has given an advance of Rs.1,00,000/- on 19.10.2010 to the sellers in respect of land mentioned at para 7(i) and an advance of Rs.1,00,000/- on 19.10.2010 to the sellers in respect of land mentioned at para 7(ii). Assessee has not shown this investment in his books. As the transaction pertains to FY 2010-11, the amount of Rs.2,00,000/- recorded as paid by the assessee as per the impounded satakhat was treated as unexplained investment u/s 69 of I.T. Act. 12. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the additions made by the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before us. 13. The Ld. Counsel for the assessee, submitted before us written submission, which is reproduced below: 1) Assessee filed original ROI for A Y 2011/12 declaring income of Rs.4,14,477/- 2) Assessment was reopened on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jiuav Bhaniben Bhanabhi 25.10.2011 Rs. 1,00, 000/-[19.10.2010] Block #437 othrs Rs. 9,00, 000/- [25.10.2010] Bamroli land 13.33% share in block # 45 Impounded Satakhat dated 09.10.2010 indicated following facts: 1. Satakhat is of land at Bamroli Block 45 admeasuring 1 1027 sq. mtrs. 2. Kalpesh Mafatlal Patel Yogesh Mohanlal Patel are purchasers 3. Chetanbhai Channabhai Others are sellers 4. Cash of Rs. 25,00,000/- is paid against sale price of 80,00,000/- AO issued SCN for treating Rs. 40 lacs as unexplained investment in the hands of assessee balance 40 lacs on protective basis. AO noted that assessee denied signing any such Satakhat and also denied purchasing of such land. AO captured screen shot of impounded Satakhat from computer of Turmish Kania on page 5 of the order and then noted that notary register of Meera Kania showed notarization of Satakhat in the name of Kalpesh Mafatlal Patel. AO during scrutiny assessment made an inquiry from sub registrar office and noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me that are used as format. [Page 183 of P/B II] 3. AO noted that Notary Register of Meera Kania showed documentation of few Satakhat in the name of assessee with signature thumb impression. Reply: The alleged direct evidence was never confronted to the assessee for rebuttal. Department failed to supply notary register though RTI application was filed to request for the same. 4. AO during the assessment proceedings made an inquiry with sub registrar office and was informed that impugned lands were sold to others than the assessee and his co-owner Yogesh Mohanlal Patel vide registered sale deed. AO confirmed the addition drawing conclusion that Satakhat agreements are entered at lower cost to save tax and stamp duty. Reply: Overlooking the fact that unsigned, incomplete and unstamped dumb documents taken as printout from the hard disc impounded from the office of A Sai Leela Associates, AO made addition on the basis of surmise, conjecture assumptions that is not tenable under law. Ld. CIT (A) without considering submissions, evidences and case laws relied upon confirmed additions made by AO dismissing appeal of the assessee. 14. On the other hand, L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olation of principle of natural justice. We also note that not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witness were made the basis of the impugned order is a serious flaw which makes the order nullity. We note that same view was expressed by the Hon`ble Calcutta High Court in the case of Eastern Commercial Enterprises 210 ITR 103 (Cal), wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on notice of the case made out against him. 16. We note that the documents, which were found in the possession of other person, does not bear the name of the assessee, that is, the name of the assessee is not mentioned in the statement of another person. No addition can be made, if documents impounded during survey are unsigned and incomplete. No addition of unaccounted investment can be sustained when Assessing Officer had not made any further investigation. No statement recorded of land owners or purchasers as mentioned in the sale deed by AO to corroborate contents of impounde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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