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.
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
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.