Principal Commissioner Of Income Tax, Rajkot 3 v. Jasubhai Arjanbhai Vaghasiya

C/TAXAP/956/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 956 of 2018 ================================================================ PRINCIPAL COMMISSIONER OF INCOME TAX, RAJKOT 3VersusJASUBHAI ARJANBHAI VAGHASIYA ================================================================Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAHandHONOURABLE MR.JUSTICE A.Y. KOGJE Date : 30/07/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Being aggrieved and dissatisfied with the order dated 04.12.2017 passed by the learned Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No.56/Rjt/2017 for the Assessment Year : 2011-2012, by which the learned Tribunal has allowed the Appeal preferred by the assessee and has quashed and set aside the addition of Rs.3,64,01,240/= made by the learned Assessing officer and confirmed by the learned CIT (Appeals) made under Section 143(3) read with Section 153(3) of the Income Tax Act, 1961 (hereinafter referred to in short as ‘the Act’), the Revenue has preferred the present Tax Appeal with the following proposed question of law :- “Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in granting relief without ascertaining full facts and not restoring the case back to the A.O. to collect necessary evidences to identify vendor and vendee, despite the fact that the Appellate Tribunal held that the AO had not collected necessary evidences?” 2. The facts leading to filing of the present Tax Appeal are as under :-as under :- a) The Assessee filed his return of income on 27.0.9.2011 under Section 139(1) of the Act declaring an income of Rs.4,75,250/-. A search under Section 132 of the Act was conducted at the premises of the Assessee on 30.05.2012. The Assessing Officer issued a notice under Section 153A of the Act. In response to the notice issued, the Assessee file his return of income on 17.10.2014 declaring total income at Rs.64,01,240/=. A notice was issued under Section 143(2) of the Act on 29.10.2014. b) During the assessment proceedings, the Assessing Officer observed that during a search at the residential premises of the assessee, certain loose papers namely Annexure A/2 were found. The Assessing Officer noticed that the Annexure were in fact jottings pertaining to purchase and sale of land. According to the Assessing Officer, purchases were effected on 15.08.2010 and the said land was purchased from one - Bhutbhai and Doctor Group @ Rs.22,11,000/= per bigha. Thus, the total investment made was Rs.13,26,60,000/=. c) The Assessing Officer issued a show-cause notice inviting the explanation of the assessee with respect to the aforesaid purchases. The assessee filed a detailed reply with a specific explanation that as such, no conveyance deed and/or agreement to purchase/sale of land has been executed nor there has been any deed executed for the purchase or agreeing to purchase the said land. The Assessing Officer did not accept the explanation and made an addition of Rs.3,64,01,240/= considering the land price mentioned in the sheet / document, i.e. Rs.22,11,000/= and Rs.27,11,000/= per Bigha (purchase and sale price respectively). The learned CIT (Appeals) confirmed the said additions. By the impugned order, the learned ITAT has allowed the Appeal preferred by the Assessee, and has set aside the order passed by the learned CIT (Appeals) and has observed in Paragraph 11 as under :- Appeal preferred by the Assessee, and has set aside the order passed by the learned CIT (Appeals) and has observed in Paragraph 11 as under :- “11. With the assistance of the ld. representatives, we have gone through the record carefully. A perusal of impugned order would indicate that both the ld. Revenue authorities have unnecessarily made a mountain out of a molehill. The AO has interpolated documents with assumptions and presumptions. Right from very beginning the assessee has been contending that these are rough jottings to discuss for some proposed transaction. These are estimated purchases and sale price. The transaction had never materialized. It was also pointed out that the rate written in the alleged seized paper was Rs.2.21 lakhs towards purchase price and Rs.2.71 lakhs towards sale price. The ld. AO has added two more “0” to both these figures. When the assessee has pointed out this fact to the ld. CIT(A) that no such transaction has taken place, then the ld. CIT(A) put a blame on the assessee that the assessee should prove that no such transaction has taken place. It is pertinent to observe that the AO has to charge tax from assessee. It was upon him to demonstrate that taxable income was available in the hands of the assessee. It is the not the other way round that the assessee has to prove that he has no taxable income. The ld. CIT(A) has expected the assessee to do so. The moment the assessee has pointed out that no such transaction has taken place, first course for the AO to identify the land, which was being discussed in this paper; to identify vendee and vendor; whether any transaction has taken place pertaining to some other land also. This could be easily verified from office of sub-registrar of the village where sale deeds are being executed. The AO thereafter ought to have identified price of the land in the area which could be determined on the basis of circle rate notified by the State Government for charging stamp duty. No doubt paper was found from the possession of the assessee. It was containing certain jotting, but firstly the AO has taken a sum of Rs.2.21 lakhs as “22.11 lakhs”. He multiplied the figure ten times, and thereafter assumed execution of the transaction. The assessee was contending that this was rough jotting for discussion with regard to some prospective transaction, but transaction has never materialized, as assumed by the AO. Now, it is for the Revenue to first establish that transaction was materialized and consideration has exchanged hand. At the time of hearing, the ld. DR contended that sometime certain deals are materialized orally on the basis of promises and mediator would come in the papers. We agree that this could happen, but Department has to identify vendor and vendee and whether the assessee has played role of mediator or not. No such evidence was collected by the department, therefore, on an analysis of the record, we are of the view that no addition deserves to be made in the hands of the assessee. Department failed to collect evidence for harping a belief that the assessee has earned unaccounted commission income of Rs.3.00 crores. We allow this ground of appeal and delete the impugned addition.” 3. Feeling aggrieved and dissatisfied with the decision of the learned ITAT, learned Advocate appearing for the Revenue Mrs. Mauna M. Bhatt has submitted that in the facts and circumstances of the case, the addition was made on the basis of the seized documents / jottings in the two figures were mentioned with respect to the purchase and sale price, which were not explained by the Assessee. Considering the revised provisions of the Income Tax Act, 1961, the Assessing Officer rightly made the addition treating it as cash payment / undisclosed / unaccounted income which ought not to have been deleted by the learned Tribunal. 3. Feeling aggrieved and dissatisfied with the decision of the learned ITAT, learned Advocate appearing for the Revenue Mrs. Mauna M. Bhatt has submitted that in the facts and circumstances of the case, the addition was made on the basis of the seized documents / jottings in the two figures were mentioned with respect to the purchase and sale price, which were not explained by the Assessee. Considering the revised provisions of the Income Tax Act, 1961, the Assessing Officer rightly made the addition treating it as cash payment / undisclosed / unaccounted income which ought not to have been deleted by the learned Tribunal. 4. Having heard learned Advocate appearing on behalf of the Revenue and considering the impugned order passed by the learned Tribunal and even the order passed by the Assessing Officer, confirmed by the learned CIT (Appeals) making the aforesaid addition, it appears that it was the case on behalf of the assessee from the very beginning that no transaction had taken place. As rightly observed by the learned Tribunal, in that case, the learned Assessing Officer ought to have held further enquiry from the Office of the Sub-Registrar. No such enquiry was conducted by the Assessing Officer. As rightly observed by the learned Tribunal, the Assessing Officer as well as the learned CIT (Appeals) ought not to have made the addition of the aforesaid amount by shifting the onus upon the assessee to prove that no land transaction had taken place, when more particularly, right from the very beginning, it was the specific case of the assessee that no transaction had taken place with respect to the land. 5. In that view of the matter, we are in complete agreement with view taken by the learned Tribunal and hence, the impugned order passed by the learned Tribunal cannot be said to be perverse so as to warrant any interference by this Court. with view taken by the learned Tribunal and hence, the impugned order passed by the learned Tribunal cannot be said to be perverse so as to warrant any interference by this Court. 6. Under the circumstances, no substantial question of law arises in the present Appeal and the same deserves to be dismissed and is accordingly, dismissed. arises in the present Appeal and the same deserves to be dismissed and is accordingly, dismissed. CAROLINE Sd/-(M.R. SHAH, J) Sd/-(A.Y. KOGJE, J)