Income Tax Appellate Tribunal - Ahmedabad
Shri Harish K. Anandani,, Ahmedabad vs The Pr. Cit-5,, Ahmedabad on 13 December, 2018
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ ।
IN THE INCOME TAX APPELLATE TRIBUNAL,
"B" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
IT(SS)A.No.124/Ahd/2014 WITH CO NO.135/Ahd/2014
नधा रण वष / Asstt. Year: 2011-2012
ACIT, Cent.Cir.1(3) Shri Trilokbhai R. Parikh
Ahmedabad. Vs. 3, Tahookar,
Opp: Parimal Garden
B/h. Mangal Baug
Ambawadi, Ahmedabad.
PAN : AAVPP 8946 P
IT(SS)A.No.125/Ahd/2014 WITH CO NO.136/Ahd/2014
नधा रण वष / Asstt. Year: 2011-2012
ACIT, Cent.Cir.1(3) Smt.Vaishali Ashish Parikh
Ahmedabad. Vs. B-204, Shapath-IV
Opp: Karnavati Club
S.G. Highway, Ahmedabad.
PAN : ABHPP 4388 C
IT(SS)A.No.156/Ahd/2014
नधा रण वष / Asstt. Year: 2011-2012
Shri Chimanlal N. Batheja DCIT, Cent.Cir.1(3)
24/B, Ghanshyam Society Vs. Ahmedabad.
Old Dhor Bazar, Kankariya
Ahmedabad.
PAN : ARUPB 2398 B
IT(SS)A.No.157/Ahd/2014
नधा रण वष / Asstt. Year: 2011-2012
DCIT, Cent.Cir.1(3) Shri Chimanlal N. Batheja
Ahmedabad. Vs. 13/A, Ghanshyam Society
B/h, Dhor Bazar, Kankariya
Ahmedabad.
PAN : ARUPB 2398 B
IT(SS)A No.124/Ahd/2014 & Others
ACIT Vs. Trilokbhai R. Parikh and Others
2
ITA.No.869/Ahd/2017
नधा रण वष / Asstt. Year: 2011-2012
Shri Harish K. Anadani Pr.CIT-5,
Prp. Of Shree Harihar Textile Vs. Narayan Chambers
68, New Cloth Market Ahmedabad.
Ahmedabad.
PAN : ADDPA 7815 M
(Applicant) (Responent)
Revenue by : Shri O.P. Vaishnav, CIT-DR
Assessee by : 1) Shri Dhiren Shah, AR in
IT(SS)A.No.124 and
125/A/2014
2) Shri S.N. Soparkar, AR in
IT(SS)A.No.156/A/2014 and
ITA No.869/Ahd/2017
सन
ु वाई क तार ख/ Dateof Hearing : 30/10/2018
घोषणा क तार ख / Date of Pronouncement: 13/12/2018
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
These are three sets appeals by the Revenue and the assessees. In the first set of appeals, the Revenue is aggrieved by the order of the ld.CIT(A)-1, Ahmedabad dated 16.12.2013 passed for the Asstt.Year 2011-12. On receipt of notices on these two appeals of the Revenue, the assessees have also filed cross objection bearing nos.CO No.135 and 136/Ahd/2014. Second set is cross appeals by the Revenue and another assessee viz. Shri Chmanlal N. Batheja, against order of the ld.CIT(A)-I, dated 23.01.2013 passed for the Asstt.Year 2011-12. The third set of appeal is by Shri Harish K. Anandani against the order of the Pr.CIT(A)-5 passed under section 263 of the Income Tax Act, 1961 dated 17.3.2017 for the Asstt.Year 2011-12. Issues involved in these appeals are either common or inter-connected with one another, IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 3 therefore we heard them together and deem it appropriate to dispose of these appeals and COs. by this common order.
2. Sole grievance of the Revenue is that the ld.CIT(A) has erred in deleting the addition of Rs.2,60,00,000/- (in the case of Shri Triolokbhai Ramanlal Parikh) and Rs.7,61,00,000/- (in the case of Smt.Vaishali Ashish Parikh) and 9,61,00,000/- (in the case of Chiamnlal N. Batheja). Facts on all vital points are common, therefore, for the facility of reference, we take up the facts from the case of Shri Triolokbhai Ramanlal Parikh.
3. Brief facts of the case are that a search and seizure operation was conducted by the Revenue under section 132 of the Income Tax Act, 1961 on 9.3.2011 in the Makson group of cases. At the residence of Shri Kodidas Patel an agreement dated 22.9.2010 was found and seized. This agreement showed that the land situated at survey no.930 of Sanathal Village, Taluka Sanand was agreed to be sold by Shri Chimanlal Bhatej, Smt.Rekha Bhatej and Ms.Kajal Bhateja to Shri Trilokbhai Parikh and other family members. Thus, according to the AO a document belonging to the assessee was found and action upon the assessees under section 153C deserves to be taken. Accordingly, notice under section 153C was issued to both the assessees, and they have filed their return of income for the Asstt.Year 2011-12 on 16.6.2012 declaring total income at Rs.88,48,615/- (in the case of Shri Triolokbhai Ramanlal Parikh) and on 31.8.2012 declared total income at Rs.7,48,765/- and agricultural income of Rs.2,46,827/- (in the case of Smt.Vaishali Ashish Parikh). Search at the residence of Chimanlal N. Bhatej was carried out u/s.132 of the Act on 9.3.2011, he had filed his return on 29.7.2011 declaring total income at Rs.1,67,70,260/-,. Notice u/s.143(2) was issued in his case on 19.9.2012.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 4
4. In the cases of Shri Trilokbhai Parikh and Smt.Vaishali A. Parikh, assessment orders and the orders of the ld.CIT(A) are verbatim same except variation in quantum. The ld.AO has confronted the assessees with show cause notices inviting their explanation that they have agreed to purchase the land at survey no.930 for a consideration of Rs.1.11 crores per bigha totaling to Rs.10.81 cores. Thus, according to the AO, sum of Rs.40 lakhs was paid on 22.9.2010 by way of cheque bearing no.448809 dated 10.9.2010 of HDFC Bank from the account of assessee, Shri Trilokbhai R. Parikh, and the balance amount of Rs.2.60 crores was paid by him. With regard to Smt.Vaishali A. Parikh, it has been alleged by the AO that she has ultimately purchased the land for a consideration of Rs.60 lakhs. Out of total consideration of Rs.10.81 crores, Rs.2.60 crores paid in cash by Shri Trilokbhai R. Parikh and balance of Rs.7.31 crores was paid by Smt.Vaishali A. Parikh in cash, the rest was paid through account payee cheque. This amount of Rs.9.61 was considered as money receipted by the vendor Shri Chmanlal N. Bhatej and not accounted for in the computation of income.
5. In response to the query of AO, the assessees i.e. vendees have submitted their written submissions. They have contended that vendor was to get for them non-agriculture user permission of the land in dispute. The vendor was also required to get approval of a plan for plotting from AUDA. The vendor has to lay pukka road and also get electricity connection. These were just initiation negotiations and agreement was not acted upon. Ultimately, vendor could not fulfill this negotiation and land was sold as agriculture land to Vaishali A. Parikh for a sum of Rs.60 lakhs only. In order to demonstrate that the assessees have purchased land at arm's length price, the sale deed of nearby areas were produced to show that value of the land, in the absence of NA permission and approval from AUDA, was not more than Rs.60 lakhs. Somehow, the AO did not consider these evidences. He rejected IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 5 their contentions and concluded that they have paid on-money at Rs.2.60 crores by Shri Shri Trilokbhai R. Parikh, and Rs.7.61 crores by Smt.Vaishali A. Parikh. He made addition of both these amounts account of unexplained investment. The AO has summarized reasons on page no.5 and 6 of the assessment order in the case of Shri Trilokbhai R. Parikh. Such reasons read as under:
"The objections of the assessee are not acceptable for the following reasons:
• As per the Banakhat, the value of the land was determined at Rs. 1.11 crore per bigha, as per para 3 on page 4 between the buyers and sellers.
As mentioned in the Banakhat an amount of Rs.2.60 crores was paid in cash and Rs.40 lakhs was paid by cheque No.448809 dated 10.9.2010 of HDFC Bank.
• The assessee's signature on the Banakhat has also been witnessed by two persons.
• As per para 3 on page 5, the validity of the Banakhat has been decided upto 15th May, 2011. Within that period, the buyers will have to pay the balance amount to the sellers and the sellers will hand over the empty and physical possession of the land.
• In the said Banakhat, no conditions were prescribed regarding sale of the land as agricultural land or non-agricultural land, whether the same falls in Agricultural Zone, being a green belt area and not permissible for any development and / or construction, or whether it has any commercial value or not.
• Though there is evidence in the form of banakhat that Rs.2.60 crores paid by the assessee to Shri Chimanlal Bhateja, there is no evidence ; that the cash component was returned back.
• As per the request of the assessee an opportunity to cross examine Shri Chimanlal Bhateja was granted to the assessee, during which Shri Bhateja has denied to have received any money other than the cheque component from the assessee which was returned back. However, the testimony cannot be accepted as Shri Bhateja would be required to pay hefty amount of tax, if he agrees to the receipt of the excess money.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 6 Since the cheque has been paid from the account of the assessee, it can be inferred that the cash component has also been paid by the assessee, being the head of the family and the other signatories of the banakhat are his family members.
In view of the above, it is clear that the assessee has paid Rs. 2.60 crores as mentioned in the Banakhat which is treated as unexplained expenditure U/S.69C of the Act and added to his total income. Penalty proceedings u/s.271(l)(c) are initiated for furnishing of inaccurate particulars of income."
6. On similar analogy, additions were made in the hands of vendor on account of undisclosed receipts.
7. Dissatisfied with the additions, all the assessees carried the matter in appeal before the ld.CIT(A). The ld.CIT(A) has considered the issue elaborately, and thereafter deleted the addition. At this stage, we deem it appropriate to note certain pleadings made by the vendor in the statement of facts filed before the ld.CIT(A), which read as under:
"1. Appellant is aged about 63 years, assessed at income tax at PAN : ARUPB2398B/DCIT Central Circle 1(3) and engaged in the business of Trading in Electrical items under the proprietory name Jai Ambe Electric Store at Gandhi Rd., since more than 30 years. Appellant also made investments in land jointly with his friend Mr. Harish K. Anandani and during the period of last four years i.e. from A.Y. 2008- 09 to 2011-12 had sold lands only at four places . i.e. Shilaj (in A.Y. 2009-10), Mandal Rd. & Sanathal (A.Y. 2011-12) and Vithalpur land at A.Y. 2012-13.
2. On 09.03.2011 and 10,03.2011, search proceedings were carried by the Income Tax officials at his residence premises at: 13A Ganshyam society, B/h Kankaria Tele. Exchange, Kankaria, Ahmedabad and survey proceedings u/s 133A were carried out at business premises i.e. Jay Ambe Electric Stores, Gandhi Road, Ahmedabad. Search operations were commenced in the early morning of 09.03.2011 and continued till evening of 10.03.2011. Simultaneous searches were also conducted at the residential premises of Mr. Harish Anandani, friend of IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 7 appellant, Mr. Khodidas J. Patel, employee and Mr. Narubhai Darbar, agriculturist and friend of appellant.
3. Appellant has studied up to std. 7th in Sindhi medium. He does not have any knowledge of English and he is patient of Throat Cancer i.e. Ca Vocal Cord (B/L), Endoscopy & Direct Laryngo Bronchoscopy with Biopsy was done on him just few months prior to the search and he was referred for Radical Radiotherapy. He suffered from change of voice and some times loss of voice also and advised by doctors to speak very less. Till today, he undergoes regular checkups/throat therapy. Copies of medical papers regarding cancer treatment of his throat are filed before DDIT (Inv) and Assessing Officer during the proceedings.
4. During the course of search, appellant was pressurized by I.T. officials to make disclosure of Rs. 6.00 crores as per their wishes. Immediately after the search, assessee filed submission dated 03.05.2011 before the DIT (Investigation) with a copy to the Jurisdictional Addl. CIT Range-2, ITO Ward 2(1), & CIT-1 supported by affidavits immediately executed after search by him & both the panchas on 02.04.2011 describing the circumstances and manner in which his disclosure statement was taken during search and how particulars and letters are documented in small pocket diary (called Annexure-1) to adjust the disclosure of Rs. 6 crores as per the wishes of IT. officials. The small diary is arranged through one of the panchas. The letters and amounts in diary are fictitious and hypothetical. Purchase bill of diary is also filed by him. Appellant also stated that search continued up to the late night. Being cancer patient he was advised to speak very less. He was not allowed to carry out his daily activities, complete sleep, physical rest as well as rest in speaking. He was interrogated throughout and had severe pain in his vocal chord. In the said submission appellant also clarified that he would come out with correct disclosures of income in returns of income to be filed by him.
5. In various submissions dated 03-05-2011, 20-02-2013, he has pointed glaring examples of mistakes in writing of small pocket diary (called Annex. A/1). The facts and events in diary are conflicting and contrary to the documents found and seized from premises of Mr. Khodidas. In the small pocket diary, the profit is shown to have disclosed in respect of lands, even prior to purchase of these lands or even without sale in case of vithlapur land.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 8 Even, based on figures got prepared by I. T. officials as per small pocket dairy (Annex A-l) disclosed income would work out as under:
(Rs. In Lakhs) Mandal Road (Viram Gam) Profit 50.00 Santhal Land Profit 100.00 Shilaj Gam Land Profit 45.00 Vithalpur Land Profit 100.00 Profit: 295.00
6. Appellant E-filed the Return of Income for A.Y. 2011-12 on 29.07.2011, declaring total income of Rs. 1,65,70,260/-. The Return of Income included following disclosures of income made during search Jointly with Mr. Harish K. Anandani.
Gain on agriculture land at S. no. 930, Sanathal (Rs.200 lacs x ½ share) =Rs.100.00 lakhs Gain on agriculture land at Mandal Road (Rs.100 x ½ share) =Rs.50.00 lakhs.
Stock Difference of Jai Ambe Electric Stores =Rs. 9.28 lakhs Cash found disclosed =Re. 0.90 lakh
The income in respect of Shilaj Gam land & Vithalpur land was offered in the returns of respective assessment year i.e. A.Y.2009-10 & 2012-13 xxx xxxx xxxx Before presuming the honouring of cancelled banakhat, kindly note the fact that the price agreed as per the banakhat was subject to fulfillment of terms & conditions on our part regarding N.A. Permission, getting approval of plans of plotting from A.U.D.A., development of the roads & getting electricity connections etc. Considering the time required for fulfillment of these conditions, the proposed period of banakhat was kept for more than 7 months (From September, 2010 to 15th May, 2011). As we did not have much experience of development being investors and sudden deterioration of my health due to throat cancer I had to undergo surgery and regular therapy/periodical checkups. And we were not able to fulfill these conditions even after receipt of bana IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 9 money. Therefore the deal under the agreement was cancelled & cheques were returned. I understand from Mr. Trilok Ramanlal Parikh that he has also confirmed the above fact of cancellation of banakhat in writing to the office of DDIT (Inv.) Unit-II (2) in response to notice issued to them.
Without admitting anything and prejudice to above, I submit that the differential amount estimated in notice is incorrect. Please note that the aforesaid land has been sold under the registered deed dated 03.03.2011 to Mrs. Vashali A. Parikh as an agriculture land. The gain on sale of this sanathai land of Rs. 100 lakhs (1/2 share in 200 lakhs) has been disclosed in Income Tax returns filed by me and Shri Harish K. Anandani. Also please refer to my detailed submission dated 16.10.2012 (para no. 9) relating to sale of Sanathai land & cancellation of banakhat. Had I received or earned the income as estimated in show cause notice, the cash or undisclosed assets would have been found during the course of search at my premises, which took place on 09 & 10-03-2011 i.e. immediately after the sale of above land on 03-03-2011.
12. During the investigation proceedings before the DDIT Unit-11 (2) in statement of appellant taken on oath dated 20.05.2011, in a reply to the question no. 5, relating to copy of banakhat between appellant & prospective sellers i.e. Shri Trilokbhai Ramanbhai Parikh & others, for sale of land at sanathai village, appellant has clarified that since deal could not materialized & all the money was returned back & thereafter, the said land was sold as agriculture land at Rs. 60 lakhs to Vaishali Parikh. He has also clarified that though the original deal was made at the rate of Rs. 1.11 crore per bigha. Though the original deal was made at the rate of Rs.1.11 crore per Bhiga, the land was supposed to be converted into non agricultural land, electric and water connection was to be provided, compound wall to be erected, plan to be passed for converting the land into residential zone, developed as per the scheme given by the prospective buyers, etc. and all these expenses were to be borne by the sellers. Since this could not be possible on our part deal had to be cancelled and ultimately the land was sold in as it is condition, as an agricultural land for Rs. 60 Lakhs under registered sale deed on 03.03.2011.
13. Thereafter appellant has submitted the proof supported by the ledger a/c before DDIT (inv) as well as DCIT Central Circle during the course of proceedings. The fact of cancellation of deed has also been IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 10 confirmed by prospective buyers Trilokbhai Parikh & others before the office of DDIT (Inv.) Unit-11 (2) as well as Assessing Officer. Had appellant received or earned the income as estimated in show cause notice, the cash or undisclosed assets would have been found during the course of search at his premises, which took place on 09 & 10-03- 2011 i.e. immediately after the sale of above land on 03-03-2011."
The discussion made by the ld.CIT(A) in the case of Triolkbhai R. Parikh containing submissions of the assessee are worth to note, which reads as under:
"I have gone through the assessment order and the submissions of the AR of the carefully. It is seen that the facts of this case are as under:
A search and seizure operation u/s. 132 of the Act was conducted on 9- 3-2011 in the case of Shri Chimanlal Bhateja and consequential searches were also conducted at the premises of Shri Harish Anandani, friend of Shri Chimanal Bhateja, Mr. Khodidas J. Patel, employee and Mr. Narubhai Darbar, agriculturist and friend of Shri Chimanlal Bhateja, A Xerox copy of a Banakhat was found and seized from the residence of Shri Khodidas Patel during the search operation. The Banakhat was in respect of a land situated in survey No. 930 of Sanathal Village of Sanand Taluka. The seller was Shri Chimanlal Bhateja, Smt. Rekha Bhateja and Ms. Kajal Bhateja whereas the purchases were Shri Trilokbhai Parikh, Shri Alpesh T. Parikh, Smt. Sudhaben T. Parikh, Smt. Vaishali A Parikh, Smt. Niyatiben A. Parikh and Smt. Neha H. Patel. The Banakhat was signed by the following persons:
1. Shri Chimanlal Nayan lal Bhateja
2. Kajalben chimanla!
3. Rekhaben chimanlal
4.Trilok Ramanlal Parikh
5. Alpesh Trilokbhai Parikh
6. Nehaben Hemangbhai Patel
7. Vaishali Ashish Parikh The following persons who were also part of the purchaser group had not signed the Banakhat:
1.Niayatiben Alpeshbhai Parikh
2. Sudhaben Trilokbhai Parikh IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 11 4.1 The agreement states that the rate of sale of the land would be @ Rs. 1,11,00,000/-per bigha. The details of payment and the time of payment was not mentioned in the Banakhat but was mentioned in a separate Annexure A attached to the Banakhat. In this annexure A the details of payment of Rs. 3,00,00,000/- were mentioned. Cash amounting to Rs. 2,60,00,000/- was stated to be paid by Shri Trilokbhai Parikh on various dates and in addition to this amount cheque payment of Rs. 40,00,000/- was also paid by Shri Trilokbhai Parikh. This cheque amount of Rs. 40,00,000/- was returned to Shri Trilokbhai Parikh by Shri Chimanlal Bhatheja before the land was sold to Smt. Vaishaliben Parikh. The AO held that the land had been purchased by the appellant for Rs. 10,81,00,000/- and out of this amount cash of Rs. 2,60,00,000/-
had been paid by Trilok Parikh at the time of the Banakhat and a sum of Rs. 60,00,000/- had been paid by Smt. Vaishali Parikh by cheque. The balance amount of Rs.7,61,00,000/- was paid by cash. The AO hence made the addition of 7,61,00,000/- in the hands of Vaishali Parikh as unexplained investment in the purchase of land and an addition of Rs. 2,60,00,000/- as unexplained expenditure in the hands of the appellant.
4.2 The AR of the appellant contended that the seized banakhat is not completely executed and also not notarized and also not registered with the Sub-Registrar and having so many infirmities, the same is required to be treated as dumb document. The appellant strongly emphasized in his contention that the said land at Survey No. 930 is an agricultural land falling into the agricultural zone when it was purchased and does not have any commercial vale as it is not permissible for its commercial exploitation. In support of the said contention, the appellant has also placed on record during the assessment proceedings before the A.O the evidence from the land revenue record that the said agricultural land at Survey No. 930, Sanathal Village, Sanand Taluka, is falling into the agricultural zone being green belt area. The appellant has also produced before the A.O in the assessment proceedings the comparative sales instances of adjacent and the vicinity area of land at Sanathal. The A.O did not negate such evidences placed by the appellant from the Government records by referring the matter to the DVO for valuation of the agricultural land to substantiate the addition made in the assessment order. The appellant has also relied upon the decision of Hon'ble Madras High Court in the case of P.V. Kalyanasundaram 282 ITR 259, which has followed the principles and ratio laid down by the Hon'ble Apex Court IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 12 in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC. The appellant has also relied upon the decision of Hon'ble (TAT, Ahmedabad Bench-A in the case of Gaurang B. Solanki Vs. AC IT (120Taxman Magazine 162). The appellant emphatically submitted in his submission that the Banakhat was not containing the most important condition which was negotiated by the appellant and his family members with the land owner Shri Chimanlal Bhateja that the land owner would sell the said land after obtaining the N.A. Permission and therefore, the said Banakhat was not signed and executed by all the family members of the appellant and the same was not notarized and not registered with the Sub-Registrar. The appellant has also contended that in the cross examination statement, Shri Chimanlal Bhateja has denied the receipt of any cash payment from the appellant and his daughter in respect of land bearing Survey No. 930 at Sanathal Village and the A.O has not negated the cross examination statement given on oath by Shri Chimanlal Bhateja by re-examination statement and therefore, the onus lies on the revenue to prove with corroborative evidence that the price sated in the seized Banakhat actually represents the sales consideration of the said land at Sanathal Village is on the revenue and the said onus has not been discharged by the revenue. Mere seized draft Banakhat is not sufficient to prove that the appellant has indulged in such transaction. The appellant submit that in the present case, the appellant has already placed on record before the A.O his explanation alongwith cogent material & evidences in the form of comparative sales instances of the sale of land in the vicinity area from the Land Revenue Authority of the Government as well as that the said land falls into the agricultural zone being green belt area, does not have any commercial value. In the present case, except seized Banakhat, no other evidence has been brought on record by the A.O to justify that the appellant has made any unexplained expenditure for which the addition has been made by the A.O in the assessment order. Hence, 'the A.O has not discharged the onus and burden lies on the revenue to establish while bringing on record cogent material evidence in support of the addition made. The appellant has also relied upon the decision of the jurisdictional Hon'ble High Court of Gujarat in the case of CIT vs. Maulikkumar K. Shah 307 ITR 139 (Guj). The appellant has also relied upon the decision of Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775, wherein on Page 782, it was been observed as under:-
".... It is equally clear that in making the assessment under sub-section 3 of section 143 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment •without reference to any evidence or any IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 13 material at all. There must be something more than mere suspicion to support the assessment under section 143(3),"
4.3 The appellant has also relied upon the decision of Apex Court in the case of CIT vs. P.K. Noorjahan 237 ITR 570 (SC), and contended that in appellant's case, as the A.O has not brought on record any independent clinching material and/or evidences in support of the unexplained expenditure made by the appellant for an amount of Rs. 2,60,00,0007- and there is no justification available with the A.O for making an addition of Rs. 2,60,00,000/- on account of unexplained expenditure in land u/s. 69C of the Act, hence the same deserves to be deleted in toto.
4.4 As far as the contention of the AO, that the Xerox copy of the banakhat which was seized from the residence of Khodidas Patel was a valid document is concerned, it is seen that the document seized was a photocopy and not the original document. It has several overwriting and corrections on it. The document has not been signed by all the persons mentioned in the agreement. As would be seen that the banakhat was not notorised or registered hence the same cannot be constituted to be an infallible document. Any agreement can be said to be a valid agreement only if it is signed by all the parties to the agreement. If the agreement in not signed by all the parties then it cannot bind the parties who have not signed the agreement. Thus it cannot be a valid agreement unless all the parties have signed it. In the instant case it is seen that all the parties have not signed the banakhat. Thus the Banakhat cannot be said to be a final document which is valid and binding.
4.5 Clause 10 of the agreement which stated that the responsibility of getting the permissions and conversion shall be for both the parties jointly, has been cancelled but the cancellation has not been initialled by anyone. There is over writing in the figures of payment mentioned which have not been signed or initialed by anybody. There are several corrections in the Banakhat. It is seen that the corrections have been made by pencil whereas the rest of the Banakhat is printed and is a Xerox copy of computer generated printout.
4.6 Further, the document seized is only a photocopy and not the original. As per the Indian Evidence Act a photocopy cannot be constituted to be evidence unless it is supported by an original or is an attested true copy of the original. In the instant case the document in IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 14 question is a photocopy and has not been authenticated by anyone. Thus, this document cannot constitute evidence to bind the assessee.
4.7 It is also seen that the payment in respect of the alleged banakhat is not mentioned in the banakhat but is mentioned in the Annesure A which has also been seized. The details of these payments have been used by the AO to determine the amount of cash paid for the purchase of the land. This annexure A has not been signed by all the parties but has been signed by only the persons of the seller group ie Chimanlal Bhateja, Kajalben chimanlal and Rekhaben Chimanlal. No person of the purchaser group has signed the document Thus, it cannot be said that the payments mentioned in the Annexure A have been accepted by the purchaser group.
4.8 Shri Chimanlal Bhateja has stated that he had received a sum of Rs. 2,00,00,000/- in cash and that it was shared between him and Harish Anandani since they were equal partners in the land purchased by the appellant. Shri Bhatheja and Shri Harish Anandani included the sum of Rs.I,00,00,000/-each in their return of income filed in response to notice issued u/s 153A.
4.9 The appellant had all along contended that he or his family members had never paid any cash to Shri Chimanlal Bhatheja and that the agreement was only a draft and had never been acted upon. The appellant requested the AO for the cross examination of Shri Chimanlal Bhatheja. The appellant was granted the opportunity of cross examination of Shri Chimanlal Bhateja on 8-3-2013.
4.10 The appellant and Smt. Vaishaliben Parikh, daughter of the appellant cross-examined Shri Chimanlal Bhatheja and in the cross examination, in answer to Question No. 2, he has stated that the contents of the statement dated 20-05-2011 is not acceptable to him and he has stated that he has retracted the said statement. That in answer to question no.3 in respect of banakhat dated 22/9/2010 he has stated that " the banakhat which is incomplete, unregistered, unexecuted, unnotarized having some cancelled paras and unauthentic corrections, is not acceptable to me " and in question no.4 he was asked that whether he has received any cash amount as mentioned in Annexure-"A", Page No. 22 & 23, for an amount of Rs.2,60,00,000/- and in answer to question no.4 he has stated that he has not received any cash amount. Further in answer to question no.5, Mr. Chimanlal N. Bhatheja has also stated that he has not received any cash amount IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 15 over and above Rs.60 Lakhs as per sale deed dated 3/3/2011. The AO has not cross-examined or re-examined Chimanlal Bhatheja to contradict this statement of Shri Chimanlal Bhatheja. A scanned copy of the statement of Chimanlaf Bhatheja is reproduced below.
4.11 The AO had recorded the statement on oath of Shri Trilokbhai Parikh on 8.3.2013 u/s 31 of the FT Act 1961. In his statement also Shri Trilokbhai Parikh has denied making any payment in excess of Rs. 40,00,000/- paid by him by cheque. The AO has not re-examined Shri Trilokbhai irikh to contradict this statement of Shri Trilokbhai Parikh. A scanned copy of the statement Shri Trilokbhai Parikh dated 8.3.2013 is reproduced below.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 16 4.12 During the assessment proceedings the AO pointed out the fact that Shri Chimanlal Bhatheja had included cash of Rs. 1,00,00,000/- in his return of income accepting the fact that he had received his half share of Rs. 1,00,00,000/- in cash. The Assessing Officer recorded the statement of Smt. Vaishaliben Parikh on 14.03.2013 which is reproduced below. In the statement, Smt. Vaishaliben Parikh denied paying any cash and also requested Assessing Officer to afford another opportunity to cross examine Shri Chimanlal Bhatheja.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 17 4.13 On receipt of such information Smt. Vaishaliben Parilch requested the AO to provide another opportunity to her to cross examine Shri Chimanlal Bhatheja. The AO afforded the opportunity to cross examine Shri Chimanlal Bhatheja again on 18.3.2013.In the cross-examination Shri Chimanlaf Bhatheja again denied having received any amount in cash. The AO has not re-examined Chimanlal Bhateja to contradict this statement of Shri Chimanlal Bhatheja. A scanned copy of the statement of Chimanlal Bhatheja dated 18.3.2013 is reproduced below.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 18 4.14 It is seen that the only evidence the AO has pointed out for holding that the total price of the land purchased by the appellant was Rs. 10,81,00,000/- is the banakhat dated 22.9.2010. As would be seen that the banakhat was not notorised or registered hence the same cannot be constituted to be an infallible document. Any agreement can be said to be a valid agreement only if it is signed by all the parties to the agreement, if agreement in not signed by all the parties then it cannot bind the parties who have not signed the agreement. Thus it cannot be a valid agreement unless all the parties have signed it. In the instant case it is seen that all the parties have not signed the banakhat. Thus the Banakhat cannot be said to be a final document which is valid, and binding.
4.15 It is also seen that the amount of Rs. 40,00,000/- paid by cheque by Shri Trilokbhai Parikh has been returned to him. This clearly IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 19 indicates that the banakhat if at all it was there stands cancelled as contended by the appellant. It is also seen that the alleged cash of Rs. 2,00,00,000/- paid as per the banakhat was accepted by Shri Chimanlal Bhatheja in the return of income filed but subsequently he has denied having received any cash before the AO on two occasions in the statement recorded before the AO during cross-examination by Trilokbhai Parikh and Smt. Vaishaliben Parikh. The AO has not re- examined Shri Chimanlal Bhatheja to prove that he is not speaking the truth, if the AO found that Shri Chimanlal Bhatheja had given false statement he should have started proceedings against Shri Chimanlal Bhatheja. This has not been done. After the denial of receipt of cash by Shri Chimanlal Bhatheja the AO has not made any inquiry or investigation to prove that the statement given by Shri Chimanlal Bhatheja during cross-examination was false.
4.16 In view of the above, it is clear that the Xerox copy of the Banakhat seized from the residence of Khodidas Patel cannot be relied upon by the AO to make the addition in the case of Shri Trilokbhai Parikh. Moreover both the purchasers as well as the sellers have denied having received or paid any amount in cash in their statements recorded on oath u/s 131 of the Act before the AO. The AO has not made any inquiry or investigation to establish that cash was paid for the purchase of the Sanathal Lands.
4.17 The facts of the case of the appellant is similar to those in the case of Commissioner of Income Tax v. P V Kalyansundaram reported in 282 ITR 259 (Mad) wherein the seller had given a statement to the Revenue authorities that he had received cash on sale of lands. The High Court deleted the addition observing as under:
"We find that it is the uniform view of the Courts and also held by the apex court in K.P.Varghese vs. ITO (1981) 24 CTR (SC) 358: (1981) 131 ITR ITR 597 (SC) the burden of proving actual consideration in such transaction is that of the Revenue. Considering the entire gamut of the case, we find that the revenue has failed to discharge its duties and as held by the Ld.CIT(A) instead made up a case on surmises and conjectures which cannot be allowed".
4.18. The Hon'ble High Court further observed in para 4 as under :
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 20 "We also found that the AO did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation officer, the controversy could have been avoided. Failing to refer the matter was a fatal one."
4.19. The Hon'ble High court of Gujarat in the case of CIT vs. Maulikkumar K. Shah 307 ITR 139 (Guj) examined the issue whether addition could be made on the basis of notings in the diary which were not supported by any other independent evidence. The Gujarat high Court held as under :
"The assessee has booked 35 shops as on the date of search, on which the Department has charged "on-money" in the asst. yr. 1995-96. In his statement recorded under s. 132(4), S denied to have charged any "on-money". The notings on the seized diary found from the premises of S is the only material on the basis of which the AO has made the impugned additions. The AO has not brought any corroborative material on record to prove that such sales were made and "on-money" was received by the assessee outside the books of account. The AO has not examined any purchaser to whom the sales of shops were effected. Onus heavily lay on the Revenue to prove with corroborative evidence that the entries in the seized diary actually represent the sales made by the assessee. Such onus has not been discharged by the Revenue. Mere entries in the seized material are not sufficient to prove that the assessee has indulged in such a transaction. It is well-settled that if certain documents were found from the possession of the assessee during the course of search operation, burden lies on the assessee to explain the nature of transactions recorded in the said seized material. The assessee is duty-bound to explain discrepancy, if found, on the basis of seized materials vis-a-vis books of account. But when the assessee furnishes explanation which sought to be supported by evidence, the burden is shifted to the Revenue to establish that the explanation of the assessee is false. Right from the beginning the assessee is stating that the notings appearing in the diary are rough estimates and estimation was made for submission to the bank for obtaining the loan from bank. The inference of the AO that the assessee has received "on-money", i.e., the differential amount as shown in the seized diary and books of account, is IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 21 merely based on suspicion and surmises and there is no material whatsoever to support the conclusion of the AO that the assessee has in fact received any "on-money". The AO has no evidence with him to support his conclusion. The Court also take juridical note of the fact that the assessee has worked out floor-wise rate of the shop on the seized paper but it is not possible that every shop can be sold at that price and while selling the shops many purchasers may pay advance money. Therefore, rates of all the shops at the time of actual sales cannot be the same as estimated in the seized paper. The additions as made by the AO being based on mere presumptions and assumptions and without any corroborative evidence, cannot be sustained and the said additions have rightly been deleted by the CIT(A) in all the years under consideration. The amount mentioned along with rates per square feet of different floors on the loose papers is in respect of an estimate asking for the loan from the bank. No other evidence has been shown to justify that these amounts were received from purchasers. The CIT(A) and the Tribunal both found that on the basis of these loose papers, no addition is justified. No interference is, therefore, called for in the order of the Tribunal.-- S. K. Gupta vs. Dv. CIT (1999) 63 TTJ (Del) 532 and K. P. Varehese vs. ITO (1981) 24 CTR (SC) 358: (1981) 131ITR 597 (SC) relied on." - ......
4.20 In the instant case right from the beginning the appellant has taken a stand that the agreement was not a valid agreement but was merely a draft. No cash had been paid by the appellant. There were inherent deficiencies in the agreement as it not signed or notorised. The original copy of the agreement was not shown to the appellant. The payment and receipt of cash were denied in statements on oath recorded by the AO. The AO did not conduct any further inquiry or investigation to prove that the statement given were false.
a. The contention of the appellant is convincing because except for the seized Xerox copy of the Banakhat, the A.O has not brought on record any cogent material and/or evidences for making an addition of unexplained expenditure of an amount of Rs. 2,60,00,000/-. The evidentiary value of the Xerox copy of the Banakhat is also questionable as discussed in the earlier paragraphs. The A.O has also not negated the evidences placed by the appellant being comparative sales instances of the agricultural land in the vicinity area and that the said agricultural land bearing Survey No. 930 at Sanathal Village is IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 22 not falling into the agricultural zone and is permissible for any commercial development. The seller has in his cross examination denied having received any amount in cash on two occasions before the AO. After such denial by the seller the AO has not made any enquiry or investigation to prove the payment of cash by the appellant."
8. Before us, the ld.DR relied upon the order of the AO. He contended that a specific document was found during the course of search which suggested that the assessees have agreed for purchases of a land at Rs.10.81 crores. The land was ultimately purchased by one of the parties who put her signature on the agreement found during the course of search. It suggests that genuineness of the agreement, and therefore, the ld.AO has rightly relied upon the agreement to construe that the assessees have paid amount in cash over and above one stated in the agreement. Similarly, he submitted that in the case of Vendor, these receipts have rightly been treated as undisclosed receipts by the ld.AO. The ld.CIT(A) has erred in deleting the addition from the hands of vendees as unexplained investment and from the hands of vendor as undisclosed receipts. He relied upon the orders of the ld.AO.
9. On the other hand, the ld.counsel for the assessee relied upon the orders of the ld.CIT(A). He further contended that the assessees have filed written submissions from time to time before both the lower authorities which contained various judgments, which are being placed in the paper book running into more than 600 pages.
10. We have duly considered rival submissions and gone through the record carefully. Short controversy involved in three appeals of Revenue is, whether on the basis of photo-state copy of the agreement dated 22.9.2010 found at the premises of Shri Khodidas Patel, it can be concluded that vendees have paid money in cash for purchases of the land mentioned in the agreement or the chain of circumstances demonstrated by vendees and accepted by the ld.CIT(A), requires approval of the ITAT that the alleged IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 23 agreement was not acted upon and sufficient evidence without any corroboration to hold that unexplained investment as computed by the AO, by the vendees is not available vendees. Consequently, in the hands of vendor, this amount was not to be added as undisclosed receipts.
11. A perusal of the record would indicate that there are two sets of evidences. One photo-state copy of agreement dated 22.9.2010 along with annexure. According to the ld.CIT(A), this agreement contained names of nine persons. Out of them, two persons showed as purchasers did not put their signatures. They are Niyatiben A. Parikh and Sudhaben Trilokbhai Parkh. Similarly, details of payments are not part of the agreement, rather that were found as annexure-A to the agreement. Annexure-A does not contain signatures of purchasers. The AO has relied upon these documents for habouring a belief that both the vendees have made payments, over and above the one stated in the sale deed for purchase of this land. On the other hand, assesses have demonstrated certain circumstances to dispel the opinion formed by the AO. First set of circumstance, demonstrated by the assessees is that alleged agreement was executed on 22.9.2010. It is the photo-state copy of the original agreement. According to the assessees, it was rough cyclostyled performa agreement taken from the computer print out. Certain clauses have been deleted by pencil. When this agreement alleged to have been executed, then Rs.40 lakhs were stated to be paid. It is to be noted that cheque of Rs.40 lakhs was dated 10.9.2010 and agreement was alleged to be executed on 22.9.2010. There is a difference in both these dates. The land was not ultimately transacted on the basis of the agreement, rather it was transacted by way of a fresh negotiation and by way of fresh sale deed between different parties from those mentioned in the agreement. The land was purchased on 28.2.2011 by Smt.Vaishali A. Parikh for consideration of Rs.60 lakhs only. Vendor has admitted that they have returned Rs.40 lakhs.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 24 Now these circumstances are to be tested in the light of position of law. Whenever an agreement is being executed, it gives rise to right to the parties to the agreement, which could be enforced by way of a suit for specific performance. The sale deed was executed on 28.2.2011 in favour of Smt.Vaishali A. Parikh. Why the other alleged vendor would relinquish their right to recover Rs.10.81 cores as a sale proceeds for their lands in lieu of Rs.60 lakhs. The ld.AO has made addition on account of undisclosed receipts in the hands of one vendor i.e. Chimanlal N. Bhatej whereas in the alleged original agreement, there were three vendors. Search was not conducted upto the execution of the sale deed. They have not anticipated the search and recovery of these documents. Similarly, the rights accrued to other family members of Parikh have been relinquished without receiving any amounts as confirming party. There is no mention of this agreement in the subsequent sale deed.
12. It is pertinent to observe that when the vendees emphasised for an opportunity to cross-examine vendors on whose statements the ld.AO has relied. They were called upon by the AO and subject to the cross- examination. Both the vendees have put specific question, whether any amount was paid in cash. Vendor has specifically denied that. The ld.CIT(A) has reproduced questions and answers in the finding extracted (supra). It is pertinent to note that in the statement of facts filed by the vendor in his appeal before the ld.CIT(A), he has specifically pleaded that the alleged photo-state copy of the agreement was just a preliminary negotiation undertaken by the parties. This agreement was never acted upon. According to the vendor, at that stage, he was required to change the user of land from agriculture to non- agriculture from the competent authority. He was required to get an approval from AUDA authorities sanctioning site plan of the plots. He also deposed that he was required to construct metal roads in the land in dispute and get IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 25 electricity connection. Once these were found to be non-feasible, therefore, agreement was not acted upon and the land was subsequently sold for consideration of Rs.60 lakhs.
13. The ld.AO failed to note that vendees as well as vendors were denying the fact that agreement dated 22.9.2010 was acted upon. The original copy of the agreement was not found during the course of search. Only photo-state copy was found. Once the genuineness of a document and action taken upon the document are being doubted by the parties to the documents, then the ld.AO for the purpose of corroboration could ascertain whether this land could fetch a price of Rs.10.81 crores at the relevant time. Vendees in order to buttress their case filed a sale instance of nearby area. In other words, agriculture land of this nature was sold in that very range for which vendees have purchased this land. The ld.AO has not rebutted those sale instances. He has not made reference to the DVO for ascertaining actual fair market value of the land, which can be used for corroboration purpose, justifying the existence and acted upon the alleged agreement. The ld.AO could ascertain jantri value determined by the State Government for the purpose of levy of stamp duty on sale transaction in that area. It is quite difficult for the parties to demonstrate that they have not paid or received cash money on this transaction. It is a negative onus upon them. This fact is to be visualized in the light of the allegations made by vendor in his statement of facts filed before the ld.CIT(A). He has highlighted as to who a pocket diary was called upon from one of the witnesses and how entries have been created. He has not only retracted his statement and also emphasised non-availability of evidence in the shape of these diaries. Thus, on an analysis of complete record, we are in agreement with the ld.CIT(A), who has held in the case of vendees that they have not paid any on-money for purchase of Sanathal land. This order has been followed by the ld.CIT(A) in the case of vendor that he IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 26 has not received any undisclosed receipts. To our mind, the evidence possessed by the ld.AO is not sufficient to record a concurrent finding of the fact that the vendors have received undisclosed receipts and vendees have paid something in cash, over and above the one stated in the sale deed.
14. Before parting with this, we would like to make reference to the decision of Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh Vs. ITO, 323 ITR 588 (P&H). In this case, the land in dispute was sold by the assessee through a registered sale deed in September 24, 2002. In the registered sale deed a sum of Rs.24,65,000/- was stated to be given to both the vendors by Shri Paramjit Singh who purchased the land. When source of this investment was inquired, then a new case was sought to be played that brother Tarlohan Singh, father of Shri Paramjit Singh rendered financial help to Tirath Singh in settling abroad, and therefore, the land was given free of cost to Paramjit Singh though for the purpose of mentioning consideration of sale, a sum Rs.24,65,000/- was mentioned in the sale deed. Hon'ble High Court by making a reference to section 92 of Evidence Act observed that the facts stated in the sale deed cannot be rebutted with oral evidence and construed the receipt of Rs.24,65,000/- as genuine. The observations of the Hon'ble High Court are worth to note. It reads as under:
"4. We have thoughtfully considered the submissions made by the learned counsel and are of the view that they do not warrant acceptance. There is well-known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to section 91 of the Act when terms of a contracts, grants or other dispositions of property has been reduced to the form of a documents then no evidence is permissible to be given in proof of any such terms of such grant or disposition of the property except the document itself or the secondary evidence thereof. According to section 92 of the 1872 Act once the document is tendered in evidence and proved as per the requirements IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 27 of section 91 then no evidence of any oral agreement or statement would be admissible as between the parties to any such instrument for the purposes of contradicting, varying, adding to or subtracting from its terms. According to illustration 'b' to section 92 if there is absolute agreement in writing between the parties where one has to pay the other a principal sum by specified date then the oral agreement that the money was not to be paid till the specified date cannot be proved. Therefore, it follows that no oral agreement contradicting/varying the terms of a document could be offered. Once the aforesaid principal is clear then ostensible sale consideration disclosed in the sale deed dated 24-9-2002 (A.7) has to be accepted and it cannot be contradicted by adducing any oral evidence. Therefore, the order of the Tribunal does not suffer from any legal infirmity in reaching to the conclusion that the amount shown in the registered sale deed was received by the vendors and deserves to be added to the gross income of the assessee- appellant."
15. In the present case also, the land has been sold by the vendor for a sum of Rs.60 lakhs to Smt. Vaishaliben Parikh. In the earlier agreement, vendors were three viz. Shri Chimanlal Bhatej, Smt. Rekha Bhatej and Ms. Kajal Bhatej, whereas vendees were eight. However, in the subsequent sale deed, one person purchased the land. It suggests that fresh sale deed was not executed on the basis of earlier agreement, rather it is a fresh negotiation. Thus, the ld.CIT(A) has rightly reached on the conclusion that evidence in the shape of photo-state copy of alleged agreement is not sufficient to hold that vendors have received more money in cash than the one stated in the sale deed. Similarly, vendees have not paid extra money in cash. We do not find any merit in these three appeals of the Revenue. They are dismissed.
16. As far as COs filed by the assessee are concerned they are merely in support of the order of the ld.CIT(A), and as such not pressed by them. COs. are accordingly dismissed.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 28
17. Now, we take the appeals of Shri Chimanlal N. Batheja and Harish K. Anandani.
18. Brief facts of the case are that during the course of search documents showing purchases of agriculture land at Vithalpur bearing survey no.191/2, 192/1, 197/1, 200/1 and 200/2 in District Surendrangar was found. According to the discussion available in the impugned order, a sum of Rs.2 crores which stated to be invested in the purchase of this land was out of unexplained sources, hence addition of Rs.2 crores was made i.e. Rs.1 crore in the hands of Shri Chimanlal Bhateja and Rs.1 crore in the hands of Shri Harish Anandani. In the appellate proceedings before the ld.CIT(A), it was contended that Shri Harish Anandani was not an agriculturist of Gujarat and he could not own agriculture land situated in the State of Gujarat. Therefore, no addition on account of unexplained investment in his hand be made. The ld.CIT(A) has considered this issue in the case of Shri Chimanlal Bhateja and observed that proceedings in the case of Shri Harish Anandani was not before him. An appropriate application be moved before the competent authority or exclusion of Rs.1 crore from his hand. The finding of the ld.CIT(A) in this connection is worth to note, which reads as under:
"4.10 I have gone through the submissions of the appellant. It is seen that the appellant has no source of income/ funds to explain the investment made in purchase of agricultural lands at survey no. 191/2, 192/1, 197/1, 200/1 and 200/2 at Vithalpur, Surendranagar district. The contention of the appellant that he had only contributed half the unaccounted money whereas the other half had been contributed by Shri Harish Anandani is also unfounded because no evidence could be produced to establish the fact that Shri Harish Anandani was the co- owner to the extent of 50% for the said land. The mere fact that Shri Harish Anandani in his return of income had made a disclosure of Rs.1.00 crore does not in any way establish the fact that he is a co- owner of agricultural land at Vithalpur, Surendranagar.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 29 4.11 In view of the fact that Shri Harsih Anandani is not an agriculturist of Gujarat. He could not own agricultural land situated in the state of Gujarat. Thus, Shri Harish Anandani can never be a legal owner of agricultural land at Vithalpur, Surendranagar district. Even if there was a oral contract between the appellant Shri Harish Anandani, the same was void ab-initio not being a valid contract. Thus, it is clear that the entire unaccounted money of Rs.2.00 crores for the purchase of land at Vithalpur, Surendranagar was contributed by the appellant himself out of undisclosed sources. Since, the appellant has already made a disclosure of Rs.1.00 crore in the return of income. Hence, the income of the appellant is enhanced by another Rs.1.00 crore. In view of the above, the Assessing Officer is directed to compute the income of the appellant at Rs.2,65,70,260/-
4.12 . The AR of the. appellant during the course of appellate proceedings stated that if it was held that the entire unaccounted money of Rs. 2,00,00,000/- was paid by the appellant then as a natural corollary, the amount of Rs.1,00,00,000/- offered as income in the hands of Shri Harish K Anandani should not be taxed. This contention of the AR of the appellant appears to be correct and Justified. If the same amount has; indeed been offered In the hands of Shrt Harish K Anandani then; the same should not be taxed, however, since there are no proceedings pending before the undersigned in respect of Shri Harish K Anadani hence no orders can be passed in this regard. The appellant may take up the matter in the appropriate forum for consequential relief.
4.13 As discussed earlier in the order in the case of Shri Trilokbhai Parikh, it has been held that no on money has been paid in respect of Santhal land hence the addition of Rs.9.21 crore made by the Assessing Officer in this case is not justified. The same is deleted.
19. The ld.CIT(A) has confirmed the addition of Rs.2 crores in hands of Shri Chimanlal Bhateja. On the basis of this addition, application under section 154 was moved in the case of Shri Harish Anandani. Shri Chimanlal Bhateja filed a consent letter that a sum of Rs.1 crores added in the case of Shri Harish Anandani be added in his name. The ld.AO allowed this application vide order dated 8.4.2014. He reduced the taxable income from Rs.1,65,17,830/- to Rs.65,17,830/-. Against this order of the AO, action IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 30 under section 263 has been taken by the ld.Commissioner which has been impugned in ITA No.869/Ahd/2017 by Shri Harish K. Anandani. Shri S.N. Soparkar, ld.Senior counsel for the assessee submitted that either addition be deleted in the hands of Shri Chimanlal Bhateja or from the hands of Shri Harish Anandani - one appeal on this issue has to be allowed. The ld.DR was unable to controvert the contention of the ld.counsel for the assessee. He submitted that addition be confirmed in right hand.
20. On due consideration of the above facts and circumstances, we are of the view that the ld.CIT(A) has rightly observed that once Shri Harish Anandani is not an agriculturist of Gujarat, he could not purchase agriculture land in the State of Gujarat. His investment if construed, then it will be a benami one; or in other words, it should have been construed that he has not made payment of any money for purchase of this land. The ld.CIT(A) has rightly confirmed the addition of Rs.2 crores in the hands Shri Chimanlal Bhateja in whose name land was transacted. On the basis of finding of the ld.CIT(A) in his case, the ld.AO has rightly rectified the order and excluded a sum of Rs.1 crore from the taxable income of Shri Harish Anandani. There is no error in the order of the ld.AO dated 8.4.2004 vide which he has rectified the assessment order passed in the case of Shri Harish Anandani. Even if there is some error, then there is no prejudice to the Revenue, because the amount of Rs.1 crores excluded from the hand of Shri Harish Anandani has suffered tax in the hands of Shri Chimanlal Bhateja. It is also to observe that no benefit of set off has been claimed by Shri Chimanlal Bhateja of this amount. Therefore, we allow ITA NO.869/Ahd/2017 in the case of Shri Harish Anandani and set aside the ld.Commissioner order dated 17.3.2017 passed under section 263 of the Act.
IT(SS)A No.124/Ahd/2014 & Others ACIT Vs. Trilokbhai R. Parikh and Others 31
21. As far as appeal of Shri Chimanlal Bhateja is concerned consequently, it is dismissed.
22. In the result, all the appeals and cross objections are dismissed except ITA No.869/Ahd/2017 in the case of Harish Anandani, which is allowed. Order pronounced in the Court on 13th December, 2018 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER