PR COMMISSIONER OF INCOME TAX JAIPUR-III vs. SMT ANOKHI DEVI MAMODIA

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 1 / 2018 PR. Commissioner of Income Tax, Jaipur-III, NCR Building, Statue Circle, C-scheme, Jaipur ----Appellant Versus Smt. Anokhi Devi Mamodia, W/o Shri Rameshwar Prasad Mamodia, Ward No. 11, Mamodiya Ka Mohalla, Chaksu, Distt. Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sameer Jain with Mr. Daksh Pareek For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 07/02/2018

By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the assessee. Counsel for the appellant contended that the Tribunal has seriously committed an error in allowing the appeal of the assessee. Counsel for the appellant framed following questions of law:- “i) Whether on the facts and circumstances of the case and in law the Tribunal was correct in law in deleting the addition of Rs. 86,90,000/- on account of unrecorded sale of land when it is corroborated by the entries in the impounded books of accounts and part sale of the land by assessee? ii) Whether on the facts and circumstances of the

(2 of 9) case the Hon’ble ITAT was legally correct in disregarding and not appreciating the concurrent fact finding given by the AO as well as ld. CIT(A). iii) Whether in the facts and circumstances of the case the Hon’ble ITAT was legally correct in going beyond the scope of appeal and allowing the relief to the assessee on wrong premise?” Counsel for the appellant has taken us to the order of AO, where while considering the matter, the AO has observed as “The additions made to the income of the assessee are discussed as under:- 5.Unaccounted income on a/o of Paul Farm House Scheme:- On perusal of the page no 55 of the annexure Shri Rajesh Tambi has recorded purchase of land (Paul Farm House Scheme) 50,000 sq. yards for Rs. 87,50,000. Our of this Rs. 37,50,000/- were paid to the seller and balance to pay has been shown Rs. 50,00,000/-. The calculation has been given for computation of profit of Rs. 18,06,000/- debiting to Shri Manoj Sonkhiya after reducing cost Rs. 37,50,000/- from the sales of RS. 55,56,000/-. Thus according to the impounded document the actual purchase for Shri Rajesh (Ratan) Tambi was Rs. 87,50,000/- similarly the sale for the assessee for the Paul Farm House Scheme. Enquiries were conducted during the assessment proceedings from Shri Rajesh (Ratan) Tambi u/s 131 of the Act who stated that the land was belonged to Shri Rameshwar Prasad Mamodia (husband of the assessee) but the transactions were not done with him directly, the transactions were through some mediator. On the other hand in the statements, the assessee had admitted to purchase land at village Tigaria (called as Paul Farm House Scheme) approximately 20-25 bigha and according to the sale deed dated 25.10.2005 found and impounded during survey, the share of the assessee 0.07 hectare was sold out by the assessee to Sunita Laskari is also documentary evidence to support of the impounded document page No. 55 itself. The assessee further furnished copy of purchase deeds dated 19.9.2005 it appeared 1/5th of 19.36 hect. i.e. 3.872 hectare and another one at same location measuring 1/5th of total 15.70 hectare, i.e. 3.14 hectare,

(3 of 9) thus total land was purchased 7.012 hectare or say (7.012x4) 28.048 bigha, converted in ar comes to 28.048x25=701.2 ar. Hence, it is established that the land was belonged to the assessee who sold out to Shri Rajesh (Ratan) Tambi at total Rs. 87,50,000/- during the year under consideration. Shri Tambi paid Rs. 37,50,000/- to the assessee and shown balance of Rs. 50,00,000/- as outstanding. The assessee in her profit & loss account sale for Tigaria village (Paul Farm House Scheme) shown only Rs. 60,000/-. Therefore the sales of Rs. 86,90,000/- (87,50,000-60,000) was not disclosed in the books of the assessee. Since, the assessee has taken set off for the cost of the land therefore entire unaccounted sale is treated as unaccounted income of the assessee.” The CIT(A) has affirmed the order by partly allowing the appeal in favour of the assessee and while considering the issue has observed as under:- “8.3. I have carefully considered and submission of the ld. A/R of the appellant, assessment order and available record, it is noticed that the addition of Rs. 86,90,000/- was made by the ld. AO under the head of unaccounted income of the appellant on account of unaccounted sales on the basis of the impounded document page no. 55 received from the ITO Ward 6(1), Jaipur. During the course of survey of Vedang Colonizers, a document was found which was titled as “Account of Pal farmhouse” according to which Rajesh Tambi purchased a piece of land measuring 50,000 sq. yds. Rs. 87,50,000/- and received a sum of Rs. 37.50 lakhs from Shri Rajesh and balance Rs. 50 lakhs remained receivable. During survey, Shri Rajesh Tambi accepted this transaction as belonging to assessee. The assessee in the statements recorded u/s 131 during the course of assessment proceedings categorically accepted that she purchased this land in the FY 2005-06 only. Therefore the acquisition in hands of appellant is admitted and established. Further an agreement was also found for a small piece out of same land sold to Sunita Lashkari by appellant which further proves the ownership of subject land in the hands of appellant. In the document found from the

(4 of 9) possession of Rajesh Tambi it is clear that he had purchased the piece of this land known as “Pal Farmhouse from appellant for a total consideration of Rs. 87.50 lakhs and by selling a piece out of it at Rs. 37.50 he had earned profit of Rs. 18.06 lakhs. Therefore, the entire transaction of sale of land for Rs. 87.50 lakhs to the Rajesh Tambi belongs to appellant which is not disclosed by appellant in her book of accounts. The fact of ownership of land by assessee, its subsequent sale to Sunita Lashkery, categorical acceptance by Shri Rajesh Tambi and corroborative entries in the impounded paper, clearly suggests the entire set of transactions where assessee out of total sale consideration of Rs. 84.50 lakhs received only Rs. 37.50 and balance Rs. 50.00 lakhs was receivable. Under these circumstances, the addition of Rs. 86,90,000/- is hereby confirmed.” However, the Tribunal after going into detail has held as “3.2 We have heard the rival contentions and perused the materials available on record including the written submission of the assessee. The relevant question and answer of the statement of Shri Rajesh (Ratan) Tambi on 6-03- 2014 which has been made basis for sustaining addition are reproduced as under:- iz'u 4 Ñi;k crk;sa fd D;k vki Jh jkes'oj izlkn ekeksfM;k ,oa Jherh vuks[kh nsoh ekeksfM;k dks tkurs gks] ;fn gks] rks crk;sa fd vkids buls D;k&D;k O;kikfjd ysu&nsu gSa\ gkW] eSa Jh jkes'oj izlkn ekeksfM;k ,oa Jherh vuks[kh nsoh ekeksfM;k dks tkurk gwW ijUrq buds lkFk esjs dksbZ O;kikfjd ysu&nsu ugha gS rFkk igys Hkh ugha jgsA iz'u 5 Ñi;k crk;s fd vkius dHkh izksiZVh fMfyax dk dke fd;k gS\ eSaus o"kZ 2004&05 rd izksiZVh fMfyax esa nykyh dk dk;Z fd;k FkkA nykyh dk dk;Z] pkdlw {ks= o mlds vkl&ikl o uk;yk vkfn txgksa ij Jh eukst lkSaf[k;ka ds lkFk feydj fd;k Fkk o"kZ 2004&05 ds nkSjku gekjk vkilh >xMk] fglkc&fdrkc dks ysdj gks x;k Fkk rc ls ;g dke cUn dj fn;k FkkA iz'u 7 vkius mijksDr ist la[;k 55 o 56 ds ckjs esa dgk gS fd ;g ist Jh jkes'oj izlkn ekeksfM;k ls lEcfU/kr gS] D;k bldk dksbZ lk{; vkids ikl gSa\ Bldk esjs ikl dksbZ lk{; ugha gS] eSaus yksxksa ls lquk Fkk mlh ds vk/kkj ij crk;k gSA iz'u 9 Jh jkes'oj izlkn ekeksfM;k o Jherh vuks[kh nsoh dh tehuksa dh [kjhn&fcØh fdu o"kksZa esa djokbZ Fkh\ geus o"kZ 2002&03 o blls igys gh izksiZVh dk ysu&nsu vkfn dk dk;Z] fdlh ds ek/;e ls fd;k Fkk] gks ldrk blesa Hkh jkes'oj ekeksfM;k dh tehusa 'kkfey gksA

(5 of 9) iz'u 10 eSa] vkidks fnukad 13-03-2013 dks vk;dj vf/kfu;e dh /kkjk 131 ds rgr ntZ fd;s x;s c;ku] ftu ij vkids gLrk{kj gS] esa iz'u la-9 ds mRrj esa mDr Annexure ds ist la[;k 55 ij ntZ fd;s x;s fooj.k] iky QkeZ gkml o Jherh vuks[kh nsoh ls lEcfU/kr gksuk crk;k gS rFkk ist la[;k 56 ij ntZ fooj.k& dkSFkwu QkeZ gkml] pkdlw o Jh jkes'oj izlkn ekeksfM;k }kjk Ldhe dkVs tkus ls lEcfU/kr crk;k Fkk] ijUrq vHkh vki] vius c;kuksa esa] fdlh ds ek/;e ls nykyh dk dk;Z djuk crk jgs gSa rFkk c;kuksa esa Jh jkes'oj izlkn ekeksfM;k dk ekfydkuk gd lafnX/k crk jgs gS] okLrfodrk D;k gS] Ñi;k crk;sa\ gekjh tkudkjh ds vuqlkj ;s nksuksa Ldhe] jkes'oj izlkn ekeksfM;k th ls lEcfU/kr gS vkSj bu Ldheksa esa geus fdlh vU; O;fDr ds ekQZr foRrh; o'kZ 2002&03 esa iky QkeZ gkml pkdlw o o"kZ 2000 ls iwoZ dkSFkwu QkeZ gkml pkdlw esa fdlh ds ek/;e ls nykyh dk dk;Z fd;k Fkk] pwafd vkius gels jkes'oj ekeksfM;k ls lEcfU/kr lk{; ekaxk Fkk] mlds lEcU/k esa gekjk dguk Fkk fd ;s geus gekjh tkudkjh ds vk/kkj ij crk;k gSA Shri Tambi states that he had no done any commercial dealing with assessee. He admits dealing in property ut upto year 2004-05. He had shown his inability to produce any evidence to corroborate his statement that page 55 belongs to assessee. His such statement was based on hearsay. He admits of doing property business through someone prior to year 2002-03. It is also noted from the statement of Smt. Anokhi Devi Mamodia dated 6.12.2013 at page 42 of assessee's paper book that assessee had purchased the land in Village Tigaria in the year 2005-06. It is also noted from the statement of the assessee at page 44 (APB) in Answer to Question No.9 wherein the assessee denied any relation with M/s. Vedang Colonizer (P) Ltd. It is also noted that the assessee in her statement in Answer to Question NO.10 stated that she did not have any relation with Vedang Colonizers (P) Ltd. And also with Shri Rajesh Tambi and Shri Manoj Sonkhia. She also states that she had not sold any land/plot thropugh them. The relevant extract of the Question & Answer 9 & 10 of the statement made is mentioned as under:- iz'u 9 vk;dj foHkkx }kjk eSllZ osnkax dksyksukbtlZ izk-fy- t;iqj ds ;gkW fnukad 13@14-08-2012 dks losZ{k.k ds nkSjku tCr fd;s x;s dkxtkrksa esa Annexure-AA-2 dh ist la[;k 67 tks fd Account of Pal Farm fn[kk jgk gwW] Ñi;k crk;sa fd ;g vkils lacaf/kr gS ;k ugha\ tSlk fd eSaus iwoZ esa fuosnu fd;k gS fd xzke&fVxfj;k esa 20&25 ch?kk tehu [kjhnh Fkh] ftldk geus xzhu QkeZ gkml Ldhe uke j[kk FkkA ;g xzke & fVxfj;k esa iky ds lehi fLFkr gSA ijUrq eSllZ osnkax dksyksukbtlZ us iky QkeZ dkSu lh txg dks crk;k gS bldk eq>s irk ugha gSA eSa rks flQZ ;g dguk pkgwaxh dh ist la[;k 67 ij n'kkZ;k x;k Account of Pal Farm fdlls lacaf/kr gS eq>s irk ugh gSA ;g gels lacaf/kr ugha gSA iz'u 10 mDr Annexure-AA-2 dk ist la[;k 55 vkidks fn[kk jgk gwW ftl ij fy[ks x;s

(6 of 9) fooj.k ist la[;k 67 ds leku gSA bl ist ij fy[ks gq;s xzkgdksa ds uke Ñ'.kkorkj] lqjKku] ckcw] lw;Zizdk'k] fouksn iadt] fueZy th] jtuhdkar th ds tek jdeksa dk fooj.k gSA Ñi;k crkb;sa vkius viuh xzhu QkeZ gkÅl Ldhe esa bu yksxksa dks dksbZ tehu csph gS\ blesa fy[ks x;s ukeksa ds ckjs esa eq>s tkudkjh ugha gSA oSls csps x;s tehu dk fooj.k u xzkgdksa dk uke] jde vkfn dk fooj.k eSa vxyh lquokbZ dks izLrqr dj nwWxhA oSls geus eukst lkSaf[k;k ;k Jh jkts'k rkEch ;k budh dEiuh eSllZ osnkax dkWyksukbtlZ izk-fy- ds ek/;e ls dHkh dksbZ IykV] QkeZ gkÅl ;k tehu vkfn ugha cspk gSA vkSj ukgh dHkh budk nykyh nh gSA It is also pertinent to note that the field enquiry report dated 26-02-2014 as submitted by the Inspector of Ward 7(3) confirms the admission of the assessee that plotting of the scheme was made in year 2006-07 and not in F.Y.2004-05. The sale price on which the farm house was sold at Rs.30,000/- (0.9 hectare) (page 51 of APB). It is also noted that the Field Officer conducted investigation and took some statements from buyers like smt. Gulab Devi W/o Shri Kailash Narayan Natani (APB 61) and Smt. Shanti Devi W/o Shri Mohan Lal Rawat (APB 62) who confirmed that the land/plot was purchased in 'Tigaria Village near by Pal Housing Scheme' in the year 2006. The field Inspector report dated 26.02.2014 confirms that each farmhouse rate (0.09 hectare) was @ 30,000/-. The relevant extract of Inspector's report dated 26.02.2014 in the case of the assessee in hindi is mentioned as under:- ------fVxfj;k xkWo esa iky ds ikl okyh QkeZ gkÅl Ldhe vkl&ikl ds yksxksa ls iwNrkN djus ij irk pyk fd bl QkeZ gkÅl Ldhe dh Jherh vuks[kh nsoh ifRu Jh jkes'oj izlkn ekeksfM;k] pkdlw }kjk dkVs x;s gS tks o"kZ 2006&07 esa gSDVs;j ds fglkc ls dkVs x;s gSA bl QkeZ gkÅlksa dh dher izR;sd QkeZ gkÅl ¼0-09 gSDVs;j vFkkZr 9 ,;j½ :I;s 30000@& ds fglkc ls dkVs x;s gSA QkeZ gkÅl dh orZeku esa D;k Hkko py jgs gS bldk irk ugha pyk rFkk QkeZ gkÅl [kjhnus okys us iwNrkN djus ij irk pyk fd bUgsa vf/kdrj ckgj ¼t;iqj ds½ yksxksas us [kjhnh gSA ftlesa ls nks O;fDr;ksa ds ckjs esa tkudkjh feyh mlds c;ku ¼Lo;a ds½ bl fjiksVZ ds lkFk layXu gSA bu QkeZ gkÅlksa dks vuks[kh nsoh us fdrus esa [kjhnk mldk irk ugha py ik;kA mijksDr Ldheksa esa fdrus IykV dkVs rFkk fdrus csps x;s ,oa 'ks"k fdrus IykV fcuk fcds gq, gSa bu lHkh ckrksa dh tkudkjh QhYM bUDokjh esa irk ugha py ikbZA Sd/- (Pooranmal Raigar) Inspector Thus the evidence collected by the AO shows that the sale price of the farm houses was at Rs.30,000/- of 0.09 hectare which did not give the amount of Rs.87,50,000/-. There is no positive corroborative

(7 of 9) evidence collected by the AO which could establish direct link of assessee to the figures mentioned in page 55 seized during search of Vedang Colonizers (P) Ltd. There is no evidence which could be made basis to fasten the tax liability on assessee with regard to the amounts mentioned in the seized paper. Further the sale or say transfer of capital assets can be held completed only when the issue is covered by any provision of Section 2(47) of the Act which read as "Definitions. 2. In this Act, unless the context otherwise requires,- (47) ["transfer", in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in- trade of a business carried on by him, such conversion or treatment;] or] [(iva) the maturity or redemption of a zero coupon bond; or] [(v) any transaction involving the allowin of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the transfer of Property Act, 1882 (4 of 1882); (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever which as the effect of transferring, or enabling the enjoyment of, any immovable property.

(8 of 9) Explanation.- For the purposes of sub-clauses (v) and (vi), "immovable" shall have the same meaning as in clause (d) of section 269UA;]" Thus it is settled law that capital gain can be taxed in the year of transfer or where there is deemed transfer. The section 53A of Transfer of Property Act, 1982 reads as under:- "[53A. Part performance.- Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance o the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2[*] where there is an instrument o transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]" Looking to the entirety of the facts and circumstances of the case and case laws, we do not concur with the findings of the ld. CIT(A) in confirming the addition of Rs.86,90,000/- on account of unaccounted income. Thus Ground No.5 of the assessee is allowed. In our considered opinion, the Tribunal has rightly held that there is nothing on record to show that the document was signed by the assessee or any amount given to his account. On the contrary, in view of the above observations, we are in

(9 of 9) complete agreement with the view taken by the Tribunal, therefore, no case is made out for interference. No substantial question of law arises. The appeal stands dismissed. We are giving notice to the department that they should not prefer such an appeal. Notice be issued to the Chief Commissioner of Income Tax to see that they will obtain a certificate that the issue decided is not against any of the Supreme Court or jurisdictional High Court. The appeal will not be filed as a matter of course merely because it is beyond Rs. 20,00,000/-. If it is not certified, cost will be recovered personally from the Chief Commissioner of Income Tax since they are avoiding the audit objections and filing appeals to avoid any objection and High Court should not be burdened by such bogus appeal. (VIJAY KUMAR VYAS)J. (K.S.JHAVERI)J. A.Sharma/5