The Tax Publishers2020 TaxPub(DT) 4325 (Asr-Trib)

INCOME TAX ACT, 1961

Section 69

Where AO made addition on account of unexplained investment in land on allegation that assessee had purchased land from various persons/farmers on agreements/Ikrarnamas or power of attorney in his name and later transferred same to a company (H), on power of attorney of the original owners, CIT(A) was not justified in deleting addition on ground that MOU and supplementary MOU were unsigned and said unsigned documents had no evidentiary value because purchaser and seller took cognizance of said MOU in their further transaction.

Income from undisclosed sources - Unexplained investments in land - CIT(A) deleted addition on ground that MOU and supplementary MOU were unsigned -

AO made addition of alleged unaccounted investment in purchase of land from various persons on agreement to sell or power of attorney, which was later on transferred to company (H). AO also made addition on account of suspected short-term capital gain from sale of property. CIT(A) deleted the addition on ground that MOU and supplementary MOU were unsigned and said unsigned documents were of no evidentiary value in the eyes of law. Revenue contended that AO discussed same in detail in his assessment order that same reflected actual state of affairs of business transactions carried out by assessee as compared to what was reflected in books of account of buyer company (H). Held: It could not be said that unsigned MOU had no weigh in eyes of law when purchaser and seller took cognizance of said MOU in their further transaction. Further, other documents were documents of unaccounted transactions made between assessee and the company, which were prepared only for remembering purpose and due to that reason, these documents were not signed by any other party. Contention of assessee that said unsigned documents had no weigh in the eyes of law, was not acceptable in view of factual position. CIT(A) wrongly held that AO did not bring any evidence on record to show that assessee purchased the land from various persons/farmers on agreements/ikrarnamas or power of attorney in his name and later transferred same to H, on power of attorney of the original owners, ignoring the detailed discussion of the same in the assessment order.

REFERRED : CIT v. Balbir Singh Maini (2017) 251 Taxman 202 (SC) : (2017) 398 ITR 531 (SC) : 2017 TaxPub(DT) 4346 (SC) CIT v. P.V. Kalyanasundaram (2007) 212 CTR (SC) 97 : 2007 TaxPub(DT) 1498 (SC) Anil Rai v. State of Bihar 2009 TaxPub(EX) 0022 (SC) KP Varghese v. ITO (1981) 131 ITR 597 (SC) : 1981 TaxPub(DT) 0972 (SC) Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC) V.C. Shukla v. State Thru C.B.I. 1980 (0) Suppl. SCC 92 CIT v. Daulat Ram Rawatmall 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC) : 1973 TaxPub(DT) 0323 (SC) CIT v. Durga Prasad More (1971) 82 ITR 540 (SC) : 1971 TaxPub(DT) 0375 (SC) Umacharan Shaw and Brothers v. CIT (1959) 37 ITR 271 (SC) : 1959 TaxPub(DT) 0184 (SC) Dhakeswari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC) : 1954 TaxPub(DT) 0123 (SC) Otters Club v. DIT & Ors. (2017) 392 ITR 244 (Bom) : 2017 TaxPub(DT) 0689 (Bom-HC) CIT v. Fairdeal Textile Park (P.) Ltd. (2014) 362 ITR 497 (Guj) CIT v. Shri Jai Kumar Bakliwal (2014) 366 ITR 217 (Raj) : 2014 TaxPub(DT) 1890 (Raj-HC) CIT v. Dinesh Jain, HUF (2013) 254 CTR (Del) 534 : 2013 TaxPub(DT) 0024 (Del-HC) CIT v. Kamdhenu Steel & Alloys Ltd. (2012) 361 ITR 220 (Del) : 2012 TaxPub(DT) 1644 (Del-HC) MOD Creations (P) Ltd. v. ITO 2012 TaxPub(DT) 3314 (Del-HC) CIT v. Ms. Mayawati 2011 TaxPub(DT) 1993 (Del-HC) Shivsagar Veg. Restaurant v. Asstt. CIT (2009) 319 ITR 433 (Bom) : 2009 TaxPub(DT) 1040 (Bom-HC) CIT v. Bhanwarlal Murwatiya (2008) 215 CTR (Raj) 489 : 2008 TaxPub(DT) 1628 (Raj-HC) CIT v. Harpal Singh (2008) 3 DTR 254 (P&H) : 2008 TaxPub(DT) 1573 (P&H-HC) CIT v. Anupam Kapoor (2008) 299 ITR 179 (P&H) : 2008 TaxPub(DT) 0500 (P&H-HC) CIT v. Ram Narain Goel (1997) 224 ITR 180 (P & H) : 1997 TaxPub(DT) 0872 (P&H-HC) Sri Krishna v. CIT & Ors. 1983 TaxPub(DT) 1064 (All-HC) Sivakami Company (P) Ltd. & Ors. v. CIT (1973) 88 ITR 311 (Mad) : 1973 TaxPub(DT) 0197 (Mad-HC) Dy. CIT v. JSW Ltd. (ITA No. 6264/Mum/18, dated 14-5-2020) : 2020 TaxPub(DT) 2142 (Mum-Trib) ITO v. Manjit Singh (2010) 128 TTJ (Chd) (UO) 82 : 2010 TaxPub(DT) 1295 (Chd-Trib)

FAVOUR : Against the assessee

A.Y. : 2009-10 to 2011-12



IN THE ITAT, AMRITSAR BENCH

L.P. SAHU, A.M. & RAVISH SOOD, J.M.

ITO v. Surjit Singh

ITA No. 434/ASR/2016 & ITA Nos. 671, 672 & 673/ASR/2014

30 June, 2020

Assessee by: None

Revenue by: M.P. Singh, CIT-DR

ORDER

L.P. Sahu, A.M.

These four appeals have been filed by the Revenue against the order of the Commissioner (Appeals)-2, Amritsar, dated 30-5-2016 and order of the Commissioner (Appeals)-I, dated 12-8-2014.

2. These cases were listed for hearing on 5-2-2020, however, none appeared on behalf of the assessee on the said date. Thereafter the cases were adjourned to 6-2-2020, even on this date on the first round and second round of the proceedings, no one appeared on behalf of the assessee. Therefore, the Bench proceeded to dispose off all the four appeals after considering the submissions of learned D.R. and the material evidence available on the record.

3. The grounds of appeal raised in ITA No. 434/ASR/2016 are as under :--

1. Whether the learned Commissioner (Appeals) is right in deleting the addition of Rs. 10,83,75,750 made by the assessing officer on account of unexplained investment by the assessee from his undisclosed sources made in purchase of land from various persons/farmers by holding that 'the assessing officer has not brought any evidence on record to show that the appellant 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 assessment order.

2. Whether the learned Commissioner (Appeals) is right to hold that 'the assessing officer 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 Shri 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 assessing officer as well confirmed by the learned Commissioner (Appeals)-1, Ludhiana in his Order, dated 12-8-2014 in Appeal No. 1/ROL/IL/Commissioner (Appeals)-1/Ldh/2014-15 in the case of M/s. Horizon Buildcon (P) Ltd.

3. Whether the learned Commissioner (Appeals) 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 learned Commissioner (Appeals) is right to hold that 'the MOU dated 22-1-2008 and supplementary MOU dated 18-3-2008 were remained unsigned and the said unsigned documents were of no evidentiary value in the eyes of law' when the assessing officer has discussed in detail in his assessment order that the same reflect the actual state of affairs of business transactions carried out by the assessee as compared to what is reflected in books of accounts of the buyer company M/s. Horizon Buildcon (P) Ltd.

5. Whether the learned Commissioner (Appeals) is right in deleting the addition of Rs. 85,90,000 made by the assessing officer on account of short-term capital gain by holding that 'the assessee had not purchased any land in his name and had not transferred/sold the same in the capacity of owner of land, therefore the question of charging capital gain thereon does not arise', ignoring the facts on record that M/s. Horizon Buildcon (P) Ltd. has made payments through cheques and in cash to Shri Surjit Singh against purchase of land 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 assessing officer as well confirmed by the learned Commissioner (Appeals)-1, Ludhiana in his Order, dated 12-8-2014 in Appeal No. 1/ROT/IT/Commissioner (Appeals)-l/Ldh/2014-15 in the case of M/s. Horizon Buildcon (P) Ltd.

6. The Appellant craves leave to add or amend the grounds of appeal on or before the appeal is heard and disposed off.

7. It is prayed that the order of the Commissioner (Appeals), be set-aside and that of the assessing officer be restored on merits.

4. The Revenue in ITA No. 671/ASR/2014 for assessment year 2009-10 has raised the following grounds :--

1. Whether the learned Commissioner (Appeals) is right in deleting the addition of Rs. 3,12,44,640 made by the assessing officer under section 69/69B of the Income Tax Act, 1961 by holding that the Documents, i.e., MOU dated 22-1-2008 and supplement MOU dated 18-3-2008 which were found and seized during the time of search, though not signed by either of the parties, in this case; could not be taken as evidence of the payment of unaccounted money over and above the registration price of impugned land purchase, ignoring the detailed discussion of the same in the assessment order.

2. Whether the learned Commissioner (Appeals) is right to hold that various ikrarnamas, photocopies of which were found and seized during search viz. A-9 DNB-1 are collusive in nature, as claimed by the assessee, when these documents have actually been seized from the premises of the assessee itself.

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com