Shri Karshanbhai Dahyabhai Kakadia,, Surat v. The Income Tax Officer, Ward-9(2),, Surat

ITA 2011/AHD/2013 | 2004-2005
Pronouncement Date: 13-10-2016 | Result: Allowed

Appeal Details

RSA Number 201120514 RSA 2013
Assessee PAN AMXPK2145H
Bench Ahmedabad
Appeal Number ITA 2011/AHD/2013
Duration Of Justice 3 year(s) 2 month(s) 15 day(s)
Appellant Shri Karshanbhai Dahyabhai Kakadia,, Surat
Respondent The Income Tax Officer, Ward-9(2),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 13-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 13-10-2016
Date Of Final Hearing 06-10-2016
Next Hearing Date 06-10-2016
Assessment Year 2004-2005
Appeal Filed On 29-07-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI MANISH BORAD ACCOUNTANT MEMBER ./ ITA.NO.2011 AND 2012/AHD/2013 / ASSTT. YEAR: 2004-2005 AND 2006-2007 KARSHANBHAI DAHYABHAI KAKADIA GOVINDJI BUNGLOW OPP: SHANTI NAGAR SOCIETY NR. SARTHANA JAKAT NAKA SURAT 395 006. PAN : AMXPK 2145 H VS ITO WARD-9(2) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MEHUL SHAH AR REVENUE BY : SHRI JAMES KURIAN SR.DR / DATE OF HEARING : 06/10/2016 / DATE OF PRONOUNCEMENT: 13/10/2016 $%/ O R D E R PER RAJPAL YADAV JUDICIAL MEMBER PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDERS OF THE LD.CIT(A) DATED 9.1.2013 AND 28.1 .2013 FOR THE ASSTT.YEARS 2004-05 AND 2006-07 RESPECTIVELY. IN BOTH YEARS AS SESSEE IS CHALLENGING REOPENING OF THE ASSESSMENTS. 2. REGISTRY HAS POINTED OUT THAT APPEAL IN THE ASST T.YEAR 2004-05 IS TIME BARRED BY 118 DAYS. IN ORDER TO EXPLAIN THE DELAY THE ASSESSEE HAS FILED AN APPLICATION UNDER SUB-SECTION 5 OF SECTION 253 OF T HE INCOME TAX ACT 1961. IT IS PLEADED IN THE APPLICATION THAT SHRI SAPNESH SHETH WAS PARTNER WITH M.S.RASESH SHAH & ASSOCIATES. HE HAS REPRESENTED T HE ASSESSEE BEFORE THE ITA NO.2011 AND 2012/AHD/2013 2 LD.CIT(A). HE RECEIVED COPY OF THE CIT(A)S ORDE R ON 1.2.2013. HOWEVER HE DID NOT INSTRUCT THE ASSESSEE TO FILE APPEAL. E VEN HE DID NOT INFORM THE ASSESSEE. HE RETIRED FROM THE FIRM W.E.F. 30.4.201 3 BUT HE WAS NOT ATTENDING OFFICE IN THE MONTH OF APRIL AS HE HAS TO START HI S INDEPENDENT PRACTICE. DUE TO RETIREMENT OF SHRI SAPNESH SHETH COMMUNICATION B ETWEEN THE ASSESSEE AND TAX CONSULTANT FIRM HAD NOT TAKEN PLACE AND THE AS SESSEE WAS NOT AWARE ABOUT OUTCOME OF APPELLATE PROCEEDINGS BEFORE THE LD.CIT( A). SHRI S.B. VAIDYA HAS ADMITTED AS A PARTNER IN THE FIRM AND THEREAFTER IT CAME TO THE NOTICE THAT NO APPEAL WAS FILED IN THIS CASE. HE ADVISED THE ASSE SSEE TO FILE APPEAL AND ACCORDINGLY PRESENT APPEAL WAS FILED. IN THIS WAY THE ASSESSEE HAS PRAYED THAT DELAY IN FILING THE APPEAL BE CONDONED. 3. THE LD.DR ON THE OTHER HAND CONTENDED THAT EXC EPT AFFIDAVIT BY THE ASSESSEE THERE IS NO OTHER SUPPORTING EVIDENCE IN SUPPORT OF THE ALLEGED PLEADING. THE ASSESSEE SHOULD BE VIGILANT IN PROSE CUTING ITS INCOME TAX PROCEEDINGS. HE SHOULD BE AWARE THAT THE LD.CIT(A) DECIDED THE APPEAL AND IT HAS DECIDED AGAINST THE ASSESSEE AND THE ASSESSEE SHOULD HAVE FILED THE APPEAL WELL IN TIME. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. SUB-SECTION 5 OF SECTION 253 OF THE INC OME TAX ACT PROVIDES THAT THE TRIBUNAL MAY ADMIT APPEAL OR PERMIT FILING OF M EMORANDUM OF CROSS- OBJECTION OF RESPONDENT AFTER EXPIRY OF RELEVANT PE RIOD OF LIMITATION REFERRED TO IN SUB-SECTION 3 AND 4 SECTION 253 IF IT IS SATISF IED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. EX PRESSION SUFFICIENT CAUSE EMPLOYED IN THIS SECTION HAS ALSO BEEN USED IN SECT ION 5 OF INDIAN LIMITATION ACT 1961. THIS EXPRESSION HAS FALLEN FOR CONSIDER ATION BEFORE THE HONBLE HIGH COURTS AS WELL AS BEFORE THE HONBLE SUPREME C OURT AND THE HONBLE COURTS ARE UNANIMOUS IN OBSERVING THAT WHENEVER SUC H ISSUE FALLEN FOR ITA NO.2011 AND 2012/AHD/2013 3 CONSIDERATION BEFORE ADJUDICATING AUTHORITY THEN A LLEGED SUFFICIENT CAUSE IS TO BE CONSIDERED WITH JUSTICE ORIENTED APPROACH. W E DEEM IT APPROPRIATE TO MAKE REFERENCE TO THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS 1987 AIR 1353. THE RELEVANT PART OF THE JUDGMENT READS AS UNDER: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THA T CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING TH E PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL C OMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGH T IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE NEGLIGENCE OR ON ACCOUNT OF MA LA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5. SIMILARLY WE WOULD LIKE TO MAKE REFERENCE TO AU THORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (1998) 7 SCC 123. IT READS AS UN DER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILA TORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LE GAL REMEDY IS TO ITA NO.2011 AND 2012/AHD/2013 4 REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE RED RESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND THE WASTED TIME W OULD NEVER REVISIT. DURING EFFLUX OF TIME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING T HE COURTS. SO A LIFE SPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQU ENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUTT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT AL IVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PR ESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND STATE OF WEST BENGAL VS. THE ADMINISTRATOR HOWRAH MUNICIPALITY [AIR 1972 SC 749]. IT MUST BE REMEMBER ED THAT IN EVERY CASE OF DELAY THERE CAN BE SOME LAPSE ON THE PART O F THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HI S PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT S MACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET T HE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A L OOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENS ES. IT WOULD BE A SALUTARY GUIDELINE THAT WHEN COURTS CONDONE THE DEL AY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSAT E THE OPPOSITE PARTY FOR HIS LOSS. 6. IF WE EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE ABOVE THEN IT WOULD REVEAL THAT SHRI SAPNESH SHETH WAS C ONDUCTING APPELLATE PROCEEDINGS BEFORE THE LD.CIT(A). HE RETIRED FROM TAX CONSULTANT FIRM AND STARTED HIS INDEPENDENT PRACTICE. DUE TO CHANGE IN COMPOSITION OF TAX ITA NO.2011 AND 2012/AHD/2013 5 CONSULTANT FIRM THERE HAPPENED TO BE A COMMUNICATI ON GAP BETWEEN THE FIRM AND ITS CLIENT. A PROPER ADVICE CANNOT BE GIVEN TO THE ASSESSEE. THIS HAS MADE THE APPEAL TIME BARRED. SINCE THE APPEAL IN T HE ASSTT.YEAR 2006-07 IS NOT TIME BARRED AND BOTH ISSUES ARE INTERCONNECTED THEREFORE CONSIDERING THE HARDSHIP OF THE ASSESSEE AND EXPLANATION GIVEN BY HIM WE DEEM IT APPROPRIATE TO CONDONE THE DELAY AND DECIDE THE APP EAL FOR THE ASSTT.YEAR 2004-05 ALSO ON MERIT. 7. ON MERIT THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENTS IN BOTH THE YEARS. 8. BRIEF FACTS OF THE CASE ARE THAT SHRI KARSANBHAI DAHYABHAI KAKADIA HUF HAD PURCHASED AGRICULTURE LAND COMPRISED AT BLO CK NO.42 AND 559B BY WAY OF SALE DEED EXECUTED ON 15.3.2004. THE LAND A T BLOCK NO.42 WAS PURCHASED FOR RS.1 45 725/-. THE ASSESSEE HAS SHOW N VALUE OF THIS LAND IN THE BALANCE SHEET OF HIS HUF AT RS.2 08 805/- WHICH INC LUDED STAMP DUTY REGISTRATION CHARGES AND OTHER EXPENSES. SIMILARLY LAND AT BLOCK NO.559/B WAS PURCHASED FOR A CONSIDERATION OF RS.4 78 035/- WHICH HAS BEEN SHOWN IN THE BALANCE SHEET OF THE HUF AT RS.6 697 010/- WHIC H INCLUDED REGISTRATION CHARGES AND STAMP DUTY AND OTHER EXPENSES. THESE P IECES OF LAND WERE PURCHASED FROM ONE SMT.HETALBEN. IT APPEARS THAT D DIT(INVESTMENT) HAD RECEIVED A TAX EVASION PETITION AND HE CONDUCTED AN INQUIRY. STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 131 BY DDIT (IN VESTIGATION) ON 2.11.2007. DURING THIS STATEMENT THE ASSESSEE HAS ADMITTED AN INVESTMENT OF RS.50 LAKHS OVER AND ABOVE AMOUNTS STATED IN THE SA LE DEED. THE ASSESSEE AGREED THAT HE HAS PAID ON-MONEY OF RS.38 LAKHS ON THE LAND AT BLOCK NO.559/B AND ALSO PAID A BROKERAGE OF RS.3 LAKHS. THE ASSESSEE ALSO ADMITTED THAT THE LAND WAS SOLD IN THE YEAR ENDING 31.3.2006 AND RECEIVED ON-MONEY OF RS.55 50 000/-. ALL THIS AMOUNT IN ADDITION TO AP PARENT CONSIDERATION OF ITA NO.2011 AND 2012/AHD/2013 6 RS.12 75 000/- STATED IN THE SALE DEED. ACCORDING TO THE ASSESSEE HUF HAS FILED ITS RETURN OF INCOME FOR THE ASSTT.YEAR 2004- 05 ON 29.3.2006 DECLARING TOTAL INCOME AT RS.23 130/-. THE ASSESSEE HAD FILE D REVISED RETURN IN INDIVIDUAL CAPACITY ON 12.9.2005 FOR THE ASST.YEAR 2004-05 DECLARING TOTAL INCOME AT RS.48 200/-. AFTER THIS INQUIRY AT THE E ND OF THE DDIT ASSESSEE HAS FILED REVISED COMPUTATION OF TOTAL INCOME FOR THE A SSTT.YEARS 2004-05 AND 2006-07 IN THE CASE OF HUF. HE HAS ALSO PAID CHEQU E OF RS.4.70 LAKHS IN FOUR INSTALMENTS. IN OTHER WORDS THE ASSESSEE HAS OWNE D UP DECLARATION MADE DURING THE COURSE OF STATEMENT RECORDED BY THE DDIT . ACCORDING TO THE ASSESSEE IT WAS STATEMENT IN THE CAPACITY AS KARTA OF HUF AND REVISED COMPUTATION OF INCOME WAS SUBMITTED BY THE HUF. TA XES HAVE ALSO BEEN PAID PARTLY. THE LD.AO HAS SOUGHT TO REOPEN THE AS SESSMENT OF THE ASSESSEE IN HIS INDIVIDUAL CASE. HE HAS RECORDED FOLLOWING REA SONS IN BOTH THE ASSESSMENT YEARS. REASONS FOR REOPENING THE CASE OF SHRI.KARSANBHAI O . KAKADIA (PAN:- AMXPK2145H ) FOR A.Y.2006-07 THE ADIT(INV.) UNIT-II SURAT HAS FORWARDED HIS REPO RT ON THE ENQUIRY OF TEP CONDUCTED IN THE CASE OF HETALBEN R. DESAI AND OTHE RS VIDE LETTER DATED 31- 8-2010. THE TEP WAS REGARDING AN ALLEGATION THAT TW O PIECES OF LAND (AT SURVEY NO.559B BLOCK 559B ADMEASURING 31 869 SQ.MT R. AND SURVEY NO.51 BLOCK 42 ADMEASURING 9915 SQ.M.) TOGETHER WORTH RS .7 CRORES SOLD WAS SOLD AT VERY LOW PRICES BY ONE MRS. HETALBEN R DESAI T O SOME INDIVIDUALS .THE REPORT STATES THAT THE SALE OF THE SAID LAND BY HET ALBEN AND SUBSEQUENT HOLDERS RESULTED IN TRANSFER OF UNACCOUNTED MONEY W HICH WAS ACCEPTED UNDER OATH BEFORE THE ADIT. THE AMOUNT OF DISCLOSURES OF UNACCOUNTED MONEY GROSSING UPTO RS.1.61 CRORES WAS MADE AS BELOW:- SR. NAMES PAN UNACCOUNTED INCOME ADMITTED (LAKH RS.) A.Y. 1 HETALBEN R. DESAI APPLIED FOR 35.00 04-05 2 SHRI KARSANBHAI KAKADIA AMXPK2145H 50.00 04-05 3 SHRI KARSANBHAI KAKADIA -DO 9.5 06-07 ITA NO.2011 AND 2012/AHD/2013 7 (CAPITAL GAIN TAX) 4 (COMMISSION) AIUPG7353E 11.00 04-05 06-07 5 SFIRI SHAIIESHBHAI PARBHATBHAI DABARIA AAUPD7630F 13.875 06-07 6 SHRI CHANDUBHAI PARBHATBHAI DABARIA AAUPD7631E 13.875 06-07 7 SHRI DHIRUBHAI @ DHIRAJLAL ARJUNBHAI PATEL ADGPP3559G 27.75 06-07 TOTAL 161.00 AS PER THE REPORT THE ASSESSEE INDIVIDUAL SHRI. KAR SANBHAI D. KAKADIA HAD MADE UNACCOUNTED INVESTMENT OF RS. 38 LAKHS IN CASH FOR THE PURCHASE OF LAND (ON 15-04-2004) AT SURVEY NO.51 BLOCK 559B AD MEASURING 31 869 SQ.MTR. AND SURVEY NO.51 BLOCK 42 ADMEASURING 991 5 SQ.M. BLOCK 559B ADMEASURING 31 869 SQ.MTR . THE ASSESSEE HAS ADMITT ED THAT HE HAD PAID RS.38 00 000/- IN CASH TO THE SELLER MRS. HETALBEN R DESAI/THE ASSESSMENT FOR A.Y.2004-05 IS BEING REOPENED SEPARATELY ON THI S ISSUE. THE ASSESSEE HAS LATER SOLD THESE LANDS : (A) AT SURVEY NO.51 BLOCK 559/B ADMEASURING 31 869 SQ. M. TO S/SHRI.DHIRUBHAI ARJANBHAI PATEL CHANDUBHAI PARBAT BHAI DABARIA AND SHAILESHBHAI PARBATBHAI DABARIA. THE TRANSACTION LE D TO PAYMENT AND RECEIPT OF A CASH AT RS.55.5 LAKHS WHICH HAS BEEN A DMITTED BY BOTH THE SELLER AND THE PURCHASERS. THE ASSESSMENTS OF THREE PURCHA SERS IS BEING REOPENED U/S 147 SEPARATELY. THUS THE ASSESSEE SOLD THE LAND @ RS.214 PER SQ MTR. [RS.12 75 000 + 55.5 LAKH/31 869= 68 25 000/31869] (B) LAND AT SURVEY NO.51 BLOCK 42; 9915 SQ.MTR. T O SHRI. NARAYANBHAI PARSHOTTAMBHAI MAYANI ON 27-06-2005 FOR A DOCUMENTE D PRICE OF RS.2 00 000/- @ RS.20 PER SQ MTR WHICH IS LESS THAN THE JANTRY VALUE. THE ADDITION AS PER SECTION 50C ON THIS TRANSACTION COM ES TO RS.3 04 732/-.NO DISCLOSURE WAS MADE ON THIS TRANSACTION . THE TWO PIECES OF LAND WERE WORTH RS.7 CRORES @ OF RS.1675 PER SQ MTR [ 7 CR/(31869+9915)= 7CR/41784] AS PER THE A LLEGATION. HOWEVER THE SAME WERE CLAIMED TO BE PURCHASED BY THE ASSESSEE I NCLUDING THE UNACCOUNTED INVESTMENT AT RS. 105 PER SQ MTR [(9915 +31869)41 784SQ.M. = (RS.1 48 725+38LAKHS+RS.4 78 035)/41784= 44 26 760/ 41784=RS. 121]. THUS THERE IS HUGE DIFFERENCE OF 1569 PER SQ MTR.( RS.1675-105) IN INVESTMENT. ITA NO.2011 AND 2012/AHD/2013 8 THE ASSESSEE ALSO CLAIMS TO SELL LAND AT BLOCK 559/ B ADMEASURING 31 869 SQ. M. @ @ RS.214 PER SQ MTR. AND THAT AT BLOCK 42 ADME ASURING 9915 SQ.MTR @ RS.20 PER SQ MTR (NO DISCLOSURE). BOTH OF WHICH ARE LESS THAN THE VALUE OF LAND AS ALLEGED TO BE RS.1675 PER SQ MTR .THEREFORE THE ADIT(INV.) HAS SUGGESTED THAT THE EXACT VALUE OF THE TWO PIECES OF LAND SHOULD BE DETERMINED BY A VALUER TO DETERMINE QUANTUM OF UNACCOUNTED INV ESTMENT AND INCOME OF THE ASSESSEE . THE TABLE BELOW SHOWS THE ASSESSEE'S TRANSACTIONS . FOR A.Y.2006-07 FROM THE REPORT:- KARSANBHAI D. KAKDIA SELLS TO NARAYANBHAI PARSHOTTA MBHAI MAYANI-9915 SQ.M.; BINPIYAT AGRI LAND. SR DETAILS OF LAND SOLD DOCUMENT VALUE AND DATE STAMP DUTY PAID + EXTRA LEVIED = TOTAL @JANTRI RATE COMPUTED MARKET VALUE (AREA X JANTRI RATE ) CAPITAL GAIN FOR THE PURPOSE OF SECTION 5OC 3 SURVEY NO. 51 BLOCK 42; RS. 2 00 0007- 27-06-2005 17 000 + 24 650 RS.50 PER SQ M. RS.5 04 732 RS. 3 04 732 41 650 @8.4 % KARSANBHAI D. KAKDIA SELLS TO DHIRUBHAI ARJANBHAI P ATEL CHANDUBHAI PARBATBHAI DABARIA AND SHAILESHBHAI PARBATBHAI DABARIA 31 869 SQ. M ; BINPIYAT AGRICULTURE LAND SURVEY NO.51 BLOCK 559/B; RS. 12 75 OOO/-15-10- 2005 1 07 100 + UNKNOWN @ 8.4 % RS.50 PER SQ M. RS.15 93 45 0 RS.3 18 450(ASSESSE E HAS ACCEPTED THAT IT HAS RECEIVED RS. 55.5 LAKHS CASH FOR LAND ONLY AT BLOCK NO. 559B BLOCK) *DISCLOSURE OF RS.55.5 LAKHS WAS MADE ON THE LAND A T BLOCK 559B ADMEASURING 31 869 SQ.MTR. THEREFORE THE RATE OF L AND SOLD = (RS. 12 75 000+55.5 LAKHS /31869=68 25 000/31869 = RS.L84 PER SQ. MTR - IN VIEW OF THE ABOVE I AM OF THE OPINION THAT THE ASSESSEE'S UNACCOUNTED INVESTMENT IS MUCH MORE THAN WHAT HE HAS ADMITTED F OR A.Y. 2006-07. HENCE THE CASE NEEDS RE- ; OPENING U/S. 147 OF THE I.T. A CT 1961. SD/- PLACE: SURAT (SANJAY V. DESHMUKH) ITA NO.2011 AND 2012/AHD/2013 9 DATE : 12.10.2010 DY. COMMISSIONER OF INCOME-TAX CIRCLE-9 SURAT REASONS FOR REOPENING THE CASE OF SHRI.KARSANBHAI O . KAKADIA (PAN:- AMXPK2145H ) FOR A.Y.2004-05 THE ADIT(INV.) UNIT-II SURAT HAS FORWARDED HIS REPO RT ON THE ENQUIRY OF TEP CONDUCTED IN THE CASE OF HETALBEN R. DESAI AND OTHE RS VIDE LETTER DATED 31- 8-2010. THE TEP WAS REGARDING AN ALLEGATION THAT TW O PIECES OF LAND (AT SURVEY NO.51 BLOCK 559B ADMEASURING 31 869 SQ.MTR. AND SURVEY NO.51 BLOCK 42 ADMEASURING 9915 SQ.M.) TOGETHER WORTH RS .7 CRORES SOLD WAS SOLD AT VERY LOW PRICES BY ONE MRS. HETALBEN R DESAI T O SOME INDIVIDUALS .THE REPORT STATES THAT THE SALE OF THE SAID LAND BY HET ALBEN AND SUBSEQUENT HOLDERS RESULTED IN TRANSFER OF UNACCOUNTED MONEY W HICH WAS ACCEPTED UNDER OATH BEFORE THE ADIT. THE AMOUNT OF DISCLOSURES OF UNACCOUNTED MONEY GROSSING UPTO RS.1.61 CRORES WAS MADE AS BELOW:- SR. NAMES PAN UNACCOUNTED INCOME ADMITTED (LAKH RS.) A.Y. 1 HETALBEN R. DESAI APPLIED FOR 35.00 04-05 2 SHRI KARSANBHAI KAKADIA AMXPK2145H 50.00 04-05 3 SHRI KARSANBHAI KAKADIA -DO 9.5 06-07 (CAPITAL GAIN TAX) 4 (COMMISSION) AIUPG7353E 11.00 04-05 06-07 5 SFIRI SHAIIESHBHAI PARBHATBHAI DABARIA AAUPD7630F 13.875 06-07 6 SHRI CHANDUBHAI PARBHATBHAI DABARIA AAUPD7631E 13.875 06-07 7 SHRI DHIRUBHAI @ DHIRAJLAL ARJUNBHAI PATEL ADGPP3559G 27.75 06-07 TOTAL 161.00 AS PER THE REPORT THE ASSESSEE INDIVIDUAL SHRI. KAR SANBHAI D. KAKADIA HAD MADE UNACCOUNTED INVESTMENT OF RS. 38 LAKHS IN CASH FOR THE PURCHASE OF LAND (ON 15-04-2004) AT SURVEY NO.51 BLOCK 42 SUR VEY NO.51 BLOCK 559B ITA NO.2011 AND 2012/AHD/2013 10 ADMEASURING 31 869 SQ.MTR. AND SURVEY NO.51 BLOCK 42 ADMEASURING 9915 SQ.M. BLOCK 559B ADMEASURING 31 869 SQ.MTR . THE AS SESSEE HAS ADMITTED THAT HE HAD PAID RS.38 00 000/- IN CASH TO THE SELL ER MRS. HETALBEN R DESAI. THE TWO PIECES OF LAND WERE WORTH RS.7 CRORES @ OF RS.1675 PER SQ MTR [ 7 CR/(31869+9915)= 7CR/41784] AS PER THE A LLEGATION. HOWEVER THE SAME WERE CLAIMED TO BE PURCHASED BY THE ASSESSEE I NCLUDING THE UNACCOUNTED INVESTMENT AT RS. 105 PER SQ MTR [(9915 +31869)41 784SQ.M. = (RS.1 48 725+38LAKHS+RS.4 78 035)/41784= 44 26 760/ 41784=RS.121]. THUS THERE IS HUGE DIFFERENCE OF 1569 PER SQ MTR.( RS.1675-105) IN INVESTMENT. IN VIEW OF THE ABOVE I AM OF THE OPINION THAT THE ASSESSEE'S UNACCOUNTED INVESTMENT IS MUCH MORE THAN WHAT HE HA S ADMITTED FOR A.Y. 2004-05. HENCE THE CASE NEEDS RE- OPENING U/S. 147 OF THE I.T. ACT 1961. SD/- PLACE: SURAT (SANJAY V. DESHMUKH) DATE : 12.10.2010 DY. COMMISSIONER OF INCOME-TAX CIRCLE-9 SURAT ACCORDINGLY THE LD.AO HAS REOPENED THE ASSESSMENT AND INITIATED ASSESSMENT PROCEEDINGS. THE LD.AO THEREAFTER PASSED ASSESSMEN T ORDER ON 22.12.2011 IN THE ASSTT.YEARS 2004-05 AND 2006-07 RESPECTIVELY UN DER SECTION 143(3) R.W.S 147 OF THE INCOME TAX ACT. 9. DISSATISFIED WITH REOPENING OF THE ASSESSMENT T HE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A). BUT APPEALS TO THE LD .CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE IN BOTH THE YEARS. 10. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUTING ORDERS OF THE REVENUE AUTHORITIES CONTENDED THAT THERE WAS NO MATERIAL WI TH THE AO IN THE CASE OF THE ASSESSEE (INDIVIDUAL) TO HARBOR A BELIEF THAT INCOM E CHARGEABLE TO TAX HAS ESCAPED. HE POINTED OUT THAT RETURN IN THE CASE OF HUF WAS FILED ON 29.3.2006 FOR THE ASSTT.YEAR 2004-05. THE ASSESSEE HAS SHOWN BOTH PIECES OF THE LAND IN THE BALANCE SHEET. THE DDIT HAS CONDUC TED AN INQUIRY ON 22.3.2007. THE ASSESSEE AGREED ON UNACCOUNTED INVE STMENT IN THIS LAND. THE ITA NO.2011 AND 2012/AHD/2013 11 ASSESSEE HAS FILED REVISED COMPUTATION IN HUF AND A LSO PAID TAXES OF RS.4.70 LAKHS IN FOUR INSTALMENTS. THIS TAX WAS PAID IN HU F. ALL THESE THINGS HAVE BEEN HAPPENED PRIOR TO RECORDING OF REASONS FOR REO PENING OF THE ASSESSMENT. THE LD.COUNSEL FOR THE ASSESSEE TOOK US THROUGH COP IES OF REASONS AVAILABLE ON PAGE NO.41 TO 45 OF THE PAPER BOOK. HE CONTENDED T HAT IN THE ASSTT.YEAR 2006-07 THE LD.AO HAS WORKED OUT UNACCOUNTED MONIE S UPTO RS.1.61 CRORE. THIS IS TOTALLY AN ERRONEOUS CONCLUSION. UNEXPLAIN ED INVESTMENT DID NOT CROSS RS.55 LAKHS. SINCE FOUR TRANSACTIONS HAVE BEEN MAD E WITH REGARD TO THE PURCHASE AND SALES THE LD.AO HAS MULTIPLIED IT WIT H EACH TRANSACTION. THE UNACCOUNTED INCOME OTHERWISE WOULD NOT GO BEYOND RS .54 LAKHS. THE AO THEREAFTER MADE REFERENCE TO THE SUGGESTION OF THE ADIT THAT EXACT VALUE OF TWO PIECES OF LAND IS NOT DETERMINABLE AND THEREFO RE IT SHOULD BE REFERRED TO THE DVO FOR DETERMINATION OF QUANTUM OF UNACCOUNTED INVESTMENT. THE AO REOPENED THE ASSESSMENT WITHOUT MAKING ANY REFERENC E TO THE DVO AND WITHOUT POINTING OUT HOW MUCH IS THE UNEXPLAINED IN VESTMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD.DVO HAS SU BMITTED REPORT AND ACCORDING TO HIM VALUE OF THE LAND WAS RS.19.12 LA KHS FOR BLOCK NO.559 AT THE TIME OF PURCHASE I.E. AS ON 15.3.2004 AND RS.22.31 LAKHS AT THE TIME OF SALE I.E. AS ON 10.10.2005. THE HUF OF THE ASSESSEE HAS SHOWN THE VALUE IN SALE DEED AT RS.4 78 035/- AND RS.12 75 000/- AT THE TIM E OF PURCHASE AND SALE RESPECTIVELY. THE VALUE FOR BLOCK NO.42 WAS DETERM INED BY THE DVO AT RS.5 95 000/- AND RS.7 93 000/- AS AGAINST RS.1 48 725/- AND RS.2 00 000/- SHOWN BY THE ASSESSEE AT THE TIME OF PURCHASE AND S ALE RESPECTIVELY. WHEREAS THE ASSESSMENT WAS SOUGHT TO BE REOPENED ON THE ALL EGATION THAT VALUE OF THE LAND WAS MORE THAN RS.7 CRORES. AFTER APPRAISING U S THE ABOVE FACTUAL POSITION THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO WAS NOT POSSESSING ANY MATERIAL TO HARBOR A BELIEF THAT INC OME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT. HE HAS NOT APPLIED INDEPEN DENT MIND ON THE MATERIAL AVAILABLE WITH HIM RATHER HE PROCEED WITH SUGGEST ION OF THE ADIT WHICH WAS ITA NO.2011 AND 2012/AHD/2013 12 MERE AN INFORMATION. THUS THERE WAS NO SATISFACTI ON AT THE END OF THE AO. IT IS A BORROWED SATISFACTION. IN SUPPORT OF HIS CONT ENTION HE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF MANJU SHAH ESTATE PVT. LTD. VS. ITO 314 ITR 263. HE ALSO RELIED UPO N THE DECISION IN THE CASE OF ACIT VS. DHARIYA CONSTRUCTION 328 ITR 515. ON THE STRENGTH OF THESE DECISIONS IT WAS CONTENDED THAT EVEN ON THE BASIS OF DVOS REPORT THE ASSESSMENT CANNOT BE REOPENED. 11. WITH REGARD TO ACTION OF THE AO IN PROCEEDING M ECHANICALLY WITHOUT MAKING ANY ANALYSIS OF THE INFORMATION HE RELIED U PON FOLLOWING DECISIONS: I) RASALIKA TRADING & INVESTMENT CO. P.LTD. VS. DCIT & ANR. (2014) 365 ITR 447 (DEL.) II) IT VS. SFIL STOCK BROKING LTD. (2010) 325 ITR 285 ( DEL) III) SIGNATURE HOTELS P.LTD. VS. ITO & ANOTHER (20111) 338 ITR 51 (DEL) IV) SARTHAK SECURITIES CO.LTD. VS. ITO (2010) 329 ITR 1 10 (DEL) V) ITO VS. ON EXIM PVT.LTD. ITA NO.1116/DEL/2011 12. IN HIS NEXT PROPOSITION HE CONTENDED THAT ASS ESSMENT WAS SOUGHT TO BE REOPENED ON THE PREMISES THAT UNEXPLAINED INVESTMEN T OF MORE THAN RS.7 CRORES WAS MADE BY THE ASSESSEE. BUT ULTIMATELY T HE AO HAS NOT MADE ANY ADDITION ON ACCOUNT OF THIS PREMISE. HE DID NOT MA KE ANY ADDITION ON THE BASIS OF DVOS REPORT WHICH HAS BEEN SUGGESTED BY THE DDIT. HE MADE ADDITION ONLY ON THE BASIS OF ALLEGED DISCLOSURE OF THE ASSESSEE BEFORE THE DDIT IN THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT. THEREFORE ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE THE A O WAS NOT JUSTIFIED IN MAKING THE ADDITION IF NO ADDITION HAS BEEN MADE O N THE BASIS OF HIS REASONS. IN SUPPORT OF HIS CONCLUSIONS HE RELIED UPON THE D ECISION OF THE BOMBAY HIGH COURT I THE CASE OF CIT VS. JET AIRWAYS (I) LTD. 3 31 ITR 236 (BOM) AND CIT VS. MOHMED JUNED DADANI 214 TAXMANN 0038 (GUJ). O N THE STRENGTH OF THESE DECISIONS IT WAS CONTENDED THAT EXPRESSION AND ALSO HAS BEEN ITA NO.2011 AND 2012/AHD/2013 13 EMPLOYED IN SECTION 147 WHICH REQUIRES THAT IF DURI NG THE COURSE OF RE- ASSESSMENT PROCEEDINGS ANY OTHER INFORMATION CAME TO THE POSSESSION OF THE AO EXHIBITING ESCAPEMENT OF INCOME THEN THAT OTHER INCOME COULD ALSO BE ASSESSED. ACCORDING TO THESE DECISIONS THIS EXPRE SSION AND ALSO WOULD AUTHORIZE THE AO IF HE HAS MADE ADDITION OF THE IN COME FOR WHICH ASSESSMENT WAS REOPENED. IF HE HAS NOT MADE ANY ADDITION ON T HE REASONS FOR WHICH THE ASSESSMENT WAS REOPENED THEN HE CANNOT MAKE ADDIT ION OF THE INCOME WHICH CAME TO HIS NOTICE DURING THE RE-ASSESSMENT PROCEED INGS. IN THIS WAY THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT RE-ASSES SMENT IS NOT SUSTAINABLE AND THE REASSESSMENTS ARE DESERVED TO BE QUASHED IN BOTH THE YEARS. 13. ON THE OTHER HAND THE LD.DR CONTENDED THAT AT THE TIME OF RECORDING HIS STATEMENT BY THE DDIT ASSESSEE HAS NOT DISCLOSED T HAT THE INVESTMENT WAS MADE IN THE HANDS OF THE HUF. THEREFORE THE AO WA S JUSTIFIED TO REOPEN THE ASSESSMENT. THE AO HAS MADE ANALYSIS OF THE INFOR MATION SUBMITTED BY THE DDIT AND THEREAFTER ARRIVED AT A CONCLUSION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THE AO HAS RIGHTLY TAKE N ACTION AGAINST THE ASSESSEE. 14. IN REBUTTAL THE LD.COUNSEL FOR THE ASSESSEE CO NTENDED THAT HE HAS FILED OBJECTIONS AGAINST REOPENING OF THE ASSESSMENT. NO TICE UNDER SECTION 148 FOR THE ASSTT.YEAR 2004-05 WAS ISSUED ON 12.10.2010. T HE ASSESSEE HAS FILED A LETTER ON 19.12.2011 SUBMITTING THEREIN THAT RETURN FILED ON 12.10.2004 MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE ABOVE NO TICE. THE ASSESSEE HAS ALSO FILED OBJECTION AGAINST REOPENING OF THE ASSESSMENT AND THOSE OBJECTIONS HAVE NOT BEEN DEALT WITH BY THE AO. 15. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. IT IS SEEN THAT THE NOTICE UNDER SECT ION 148 WAS ISSUED ON 12.10.2010 WHICH WAS SERVED UPON THE ASSESSEE ON 14 .10.2010. THE ASSESSEE ITA NO.2011 AND 2012/AHD/2013 14 DID NOT FILE RETURN IN RESPONSE TO THE NOTICE. THE AO HAS PUT ASSESSMENT MACHINERY IN MOTION BY ISSUANCE OF NOTICE UNDER SEC TION 143(2) AND 142(1) OF THE ACT. THESE NOTICES WERE ISSUED IN THE MONTH OF AUGUST 2011. THEREAFTER THE ASSESSEE ALLEGED TO HAVE FILED RETURN ON 19.12. 011. THE ASSESSMENT ORDER HAS BEEN PASSED ON 22.12.2011. IF THE ASSESSEE DID NOT FILE RETURN THEN THE ASSESSMENT IS NOT DEPENDED UPON THE ACTION OF THE A SSESSEE. THE AO HAS TO PASS ASSESSMENT ORDER WITHIN THE LIMITATION. IF TH E ASSESSEE FILES OBJECTIONS AGAINST REOPENING OF ASSESSMENT ON LAST DATE OF EXP IRY OF LIMITATION THE AO CANNOT BE EXPECTED TO DISPOSE OF THE OBJECTIONS BE CAUSE HE HAS ALREADY SET THE ASSESSMENT MACHINERY IN MOTION AND HE WAS AT T HE VERGE OF COMPLETION OF THE ASSESSMENT ORDER. IN THIS CASE WE DO NOT SEE ANY IRREGULARITY FOR NOT DISPOSING OF THAT OBJECTION FILED BY THE ASSESSEE A GAINST THE REOPENING OF THE ASSESSMENT. ON THIS REASON THE PROCEEDING CANNOT BE QUASHED. 16. A BARE PERUSAL OF SECTION 147 WOULD INDICATE TH AT THIS SECTION CONTEMPLATES THAT IF THE AO HAS REASONS TO BELIEVE ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR MEANING OF THE ABOVE WOULD BE THAT THERE SHOULD BE REASON TO BELIE VE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. NOW THE QUESTION IS HOW THE REASONS TO BE FORMULATED. WHAT WILL HELP THE AO TO BELIEVE ABOUT THE ESCAPEMENT OF INCOME FROM TAXATION. THIS BELIEF CA NNOT BE MADE IN AIR. THERE SHOULD BE SOME DEDUCTIVE OR INDUCTIVE MATERIAL FOR PERSUADING THE AO TO FORM THE OPINION THAT INCOME HAS ESCAPED ASSESSMENT. S UCH MATERIAL SHOULD HAVE A DIRECT NEXUS BETWEEN ESCAPEMENT OF INCOME AND FOR MATION OF BELIEF. IN OTHER WORDS ON AN ANALYSIS OF ANY MATERIAL IF A P RUDENT MAN OR TRAINED INCOME-TAX OFFICIALS COULD BELIEVE ABOUT EXISTENCE OF FACT THAT INCOME HAS ESCAPED THEN HE WOULD BE AUTHORIZED TO ISSUE NOTI CE UNDER SECTION 148 OF THE INCOME TAX ACT. LET US MAKE AN ANALYSIS OF THE REA SON RECORDED BY THE AO AND EXTRACTED SUPRA. AS FAR AS FIRST PAGE OF THE R EASON ARE CONCERNED IT IS ITA NO.2011 AND 2012/AHD/2013 15 VERBATIM SAME IN BOTH THE YEARS. IT CONTAINED DETA ILS OF LAND AND HOW SUCH LAND WAS PURCHASED BY THE ASSESSEE IN THE ASSTT.YEA R 2004-05 AND SOLD IN THE ASSTT.YEAR 2006-07. THE ONLY LINE IN THE WHOLE DET AILS IS THAT ADIT WAS OF THE VIEW THAT VALUE OF THE LAND OF TWO PIECES WAS N OT LESS THAN RS.7 CRORES. AT THE COST OF REPETITION WE WOULD LIKE TO MAKE REFER ENCE OF FOLLOWING LINES FROM THE REASONS RECORDED FOR THE ASSTT.YEAR 2004-05. THE TWO PIECES OF LAND WERE WORTH RS.7 CRORES @ OF RS.1675 PER SQ MTR [ 7 CR/(31869+9915)= 7CR/41784] AS PER THE A LLEGATION. HOWEVER THE SAME WERE CLAIMED TO BE PURCHASED BY THE ASSESSEE I NCLUDING THE UNACCOUNTED INVESTMENT AT RS. 105 PER SQ MTR [(9915 +31869)41 784SQ.M. = (RS.1 48 725+38LAKHS+RS.4 78 035)/41784= 44 26 760/ 41784=RS.121]. THUS THERE IS HUGE DIFFERENCE OF 1569 PER SQ MTR.( RS.1675-105) IN INVESTMENT. IN VIEW OF THE ABOVE I AM OF THE OPINION THAT THE ASSESSEE'S UNACCOUNTED INVESTMENT IS MUCH MORE THAN WHAT HE HA S ADMITTED FOR A.Y. 2004-05. HENCE THE CASE NEEDS RE- OPENING U/S. 147 OF THE I.T. ACT 1961. 17. IN THIS LINE THE ADIT WAS NOT CONFIRMED ABOUT VALUE OF THE LAND HE SIMPLY OBSERVED THAT TWO PIECES OF LAND PURCHASED B Y THE ASSESSEE ARE ALLEGED TO BE WORTH OF RS.7 CRORES. SINCE HE WAS NOT SURE ABOUT THIS ALLEGATION THEREFORE HE GAVE ADVICE TO THE AO THAT IT IS TO BE VERIFIED FROM THE DEPARTMENTAL VALUER. THAT IS WHY IN THE LAST LINE HE SUGGESTED THAT EXTENT OF VALUE OF TWO PIECES OF LAND SHOULD BE DETERMINED BY THE VALUER. TO THIS EXTENT THERE WAS NO MATERIAL WITH THE REVENUE TO S AY THAT UNEXPLAINED INVESTMENT WAS MADE BY THE ASSESSEE IN HIS INDIVIDU AL CASES. THE ADIT WHO HAS INVESTIGATED THE ASSESSEE HAS SUGGESTED FOR OBT AINING DVOS REPORT. THE LD.AO OUGHT TO HAVE FIRST OBTAINED REPORT THEN VIS UALIZE IN THE LIGHT OF THAT REPORT. THUS AT THE TIME WHEN HE HAS RECORDED REA SONS FOR REOPENING OF THE ASSESSMENT HE WAS NOT POSSESSING ANY MATERIAL IN TH E INDIVIDUAL CASES OF THE ASSESSEE. THE DVO HAS SUBMITTED HIS REPORT ON 5.12 .2011 AND VALUED THE LAND AT RS.19.12 LAKHS FOR BLOCK NO.559/B AT THE TI ME OF PURCHASES AND RS.22.31 LAKHS AT THE TIME OF SALE I.E. ON 18.10.20 05. IN THE CASE OF HUF THE ITA NO.2011 AND 2012/AHD/2013 16 ASSESSEE HAS ALREADY SHOWN VALUE OF INVESTMENT AT R S.55 LAKHS. HE HAS ALREADY PAID TAX OF RS.4.70 LAKHS IN INSTALMENTS. HE HAS SHOWN THIS LAND IN HUF MUCH PRIOR TO INVESTIGATION STARTED BY THE DDIT . HE HAS PAID TAXES ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT BY WAY OF REVISED COMPUTATION. ALL THESE STEPS WERE TAKEN BY THE ASSESSEE THREE YE ARS PRIOR TO THE RECORDING OF REASONS BY THE AO. ONCE THE ALLEGED LAND WAS SHOWN IN THE BALANCE SHEET OF HUF TAXES WERE PAID IN THE HANDS OF HUF AND THEN HOW THAT VERY ALLEGED UNEXPLAINED INVESTMENT CAN BE CONSIDERED IN THE HAN DS OF THE INDIVIDUAL ? THE AO HAS NOT VERIFIED ANY FACTS FROM THE RECORD AND HE SIMPLY REPRODUCED INFORMATION CAME FROM THE ADIT AND ISSUED NOTICE UN DER SECTION 147. AS OBSERVED EARLIER EVEN THE ADIT WAS NOT SURE ABOUT THE QUANTUM OF ALLEGED UNEXPLAINED INVESTMENT AS WELL AS IN THE STATUS OF THE ASSESSEE IN WHOSE HAND IT IS TO BE ASSESSED. QUANTUM WAS APPREHENDED AT R S.7 CRORES BUT WAS SUBJECT TO VERIFICATION FROM THE DVO AND A SUGGESTION WAS M ADE TO THIS EFFECT BY THE ADIT. IN SPITE OF THAT LD.AO DID NOT BOTHER TO CO LLECT INFORMATION FOR HARBOURING A BELIEF THAT INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT. ON OVERALL EVALUATION OF THE MATERIAL AVAILABLE ON REC ORD WE ARE OF THE VIEW THAT A LIVE LINK IS TOTALLY MISSING BETWEEN THE MATERIAL AVAILABLE WITH THE AO FOR FORMATION OF A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED. THEREFORE WE ALLOW THIS GROUND OF APPEAL IN BOTH THE YEARS AN D QUASH RE-ASSESSMENT ORDERS. 18. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER PRONOUNCED IN THE COURT ON 13 TH OCTOBER 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANTN MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 13/10/2016