Sh. Sanjeev Lal Etc. Etc vs Commissioner Of Income Tax ... on 1 July, 2014
Further, we also do not find any mention of the payment of
balance sale consideration and in some of the endorsements,
there are no witnesses even. Therefore, it is difficult to accept
the contentions of the assessee that the transaction of sale with
these seven persons is complete. However, by virtue of
'agreements to sell' the assessee has transferred some right in
favour of the purchasers as held by the Hon'ble Apex Court in
the case of Sanjeev Lal vs. CIT in Civil Appeal Nos.5899-5900 of
2014 dated 1/7/2014. However, in the case before us, the AO
has held these transactions to be sham as they do not find a
mention in the sale deeds executed by the assessee in favour of
Aishwarya Shelters. On perusal of all the documents filed before
us, we find that the 'agreements to sell' with the seven persons
are mentioned in the 'agreements to sell' between the assessee
and the seven persons as confirming party and Vasavi Builders
ITA Nos.644,645 & 1177/Bang/2013
M/s.Kamakshi Land Developers
Page 11 of 14
dated 6/9/2003 and 10/1/2004. The relevant recitals are at
pages 72 and 86 of the paper book filed by the assessee. The
documents dated 6/9/2003 and 10/1/2004 are referred to in the
tri-partite MOU between the assessee, Vasavi Builders and
Aishwarya Shelters. The AO has not doubted the genuineness of
the MOU. In fact, it is stated by the AO in the assessment order
that one of the documents found and seized during the course of
search is the 'agreements to sell' between the assessee and
Vasavi Builders wherein there is no mention of any agreement
holders. The date of search in the case of the assessee is
23/09/2004 whereas one of the documents found and seized is
dated 19/8/2003 which is subsequent in time to document No.1
in the chronology of events. The assessee has filed other
documents which are executed along with documents seized
during the course of search and the execution of the 'agreement
to sell' with the seven persons is very much available amongst
the same. As regards the endorsement to the effect that
possession of the property has been handed over by the
assessee, the learned counsel for the assessee submitted that
even the assessee was not in possession of the originals of these
documents and confirmed that only xerox copies have been filed
before the CIT(A). We find that in most of these endorsements,
there are no witnesses. The agreement between assessee and
the seven persons and M/s.Vasavi Developers is also filed at
page 68 of the paper book and on perusal of the said document,
ITA Nos.644,645 & 1177/Bang/2013
M/s.Kamakshi Land Developers
Page 12 of 14
we find that there is reference to four agreements to sell dated
14/2/2000, 23/2/2000, 3/3/2000 and 2/10/2000 and also about
handing over of the possession and receipt of part payment of
sale price. Therefore it is clear that the sale was not complete
during the relevant previous year. The sale can be complete only
when all the conditions of the agreement are fulfilled. Further,
as pointed out by the learned Departmental Representative, the
partners of M/s.Vasavi Developers are also partners of Kamakshi
Land Developers and there is a mention of pay orders of
Aishwarya Shelters dated 5/9/2003 in the absolute sale deed
executed by Kamakshi Land Developers and M/s.Aishwarya
Shelters P. Ltd. which also creates a doubt as regards the
necessity of the assessee to enter into a memorandum of
understanding with M/s.Vasavi Developers on 6/9/2003, when
the final purchaser was already in the field. In all the absolute
sale deeds, part of the sale consideration is alleged to be paid by
pay orders dated 5/9/2003 as is evident from the recitals in the
sale deeds. This creates a doubt on the veracity of the
agreements to sell dated 6/9/2003 and 10/1/2004. Further,
there is no document dated 19/8/2003, as per the assessee,
whereas, there is a mention of the same in the assessment order
as one of the documents seized. Further the handing over of the
possession was only to enable the seven persons to make the
layout and was not as part of performance of the contract and
many of the endorsements do not bear the signatures of the
ITA Nos.644,645 & 1177/Bang/2013
M/s.Kamakshi Land Developers
Page 13 of 14
witnesses. In this view of the matter, in our opinion, the whole
issue requires proper and thorough verification and we are of the
opinion that the CIT(A) has proceeded to allow the assessee's
appeal only on the basis of the copies of the endorsements of
handing over of the possession without properly verifying the
same. We are also aware of the fact that the CIT(A) had called
for a remand report from the AO, but we find that the AO also
has not verified the documents from this angle. In view of the
same, we deem it fit and proper to remand the issue to the file
of the AO with a direction to verify the documents filed by the
assessee and re-consider the issue de novo in accordance with
law without being influenced by any of our observations above.
Needless to mention that the assessee shall be given a fair
opportunity of hearing.