DR SYED ANWAR vs. THE DEPUTY COMMISSIONER OF INCOME-TAX

This appeal by the assessee is directed against common order dated May 16, 2014 in IT(SS)A No.10/BANG/2011 and IT(SS) A No.13/BANG/2011 by framing as many as 11 questions of law. 2. After hearing Sri.A.Shankar, learned Senior Advocate for the assessee and Sri.E.I.Sanmathi, learned counsel for the Revenue, in our view, following three questions arise for consideration: 1. Whether the Tribunal was justified in law in holding that the amount of Rs.2,85,22,372/- is undisclosed income in the hands of the appellant on the facts and circumstances of the case and consequently passed a perverse order?

Whether the Tribunal was justified in law in holding that the appellant is the real owner of 103 acres 23.5 guntas of land contrary to materials available on record and gave a perverse finding on the facts and circumstances of the case?

Whether the Tribunal was justified in law in confirming the penalty under section 158BFA (2) of the Act a sum of Rs.2,00,22,704/- on the facts and circumstances of the case?

Briefly stated the facts of the case are, appellant is an individual. A search was conducted in Jansons Group and also assessee on January 24, 2001. A notice under Section 158BC of the Income Tax Act, 1961 ('Act' for short), was issued to the assessee. Assessee filed its returns of income on August 30, 2001, declaring NIL undisclosed income for the block period. The case was taken up for assessment of block year 1990 to 24.01.2001 and an order was passed on January 30, 2003 under Section 158BC read with Section 143(3) of the Act and it

Sri.A.Shankar, learned Senior Advocate mainly contended • That M/s.Oberoi, M/s.Janson and two other groups were desirous of setting up a Golf Club and Villas; • Jansons group funded five individuals by name (i) Mr.Syed Shafiulla, (ii) Mr.Syed Khaleelulla, (iii) Mr.Syed Amanulla, (iv) Mr.D.Y.Fiyaz Khan and (v) Mr.D.Y.Nawaz Khan, who, in all purchased 103 acres of land in Sonnenahalli village of Devanahalli Taluk, Bangalore Rural District; • Assessee was the GPA holder of the five individuals, who purchased the land; he was in no way connected with these five persons; • During search, some typed unsigned papers were found in the assessee's premises. Thus, the assessment order and the orders impugned in this appeal are perverse and not sustainable in law.

In substance, Sri.Shankar's argument is, Assessing Officer's opinion that some undisclosed income in the

Sri.E.I.Sanmathi, learned standing counsel for the Revenue submitted that the seized material marked as A/SA/6 and the statements from the agriculturists clearly demonstrate and prove that assessee had paid 'on- money' and therefore, the Assessing Officer's order is just and appropriate. He specifically pointed out that the material marked as A/SA/6 were seized in the premises of the assessee and under Section 132(4A) of the Act, there exists a presumption that the documents relate to the assessee.

In reply to Sri.Sanmathi's submission, Sri.Shankar submitted that the presumption under Section 132(4A) of the Act is a rebuttable presumption. He adverted to the

We have carefully considered the rival contentions and also perused the impugned order.

The basic premise on which the Assessing Officer has held that assessee had an undisclosed income of Rs.2,85,22,372/- are the documents which are mentioned in the tabular column in para-6 of the assessment order. In the tabular column of the seized material, page Nos.8

In respect of the lands purchased in bits and pieces, the cost of acquisition of land under different heads has been described which includes cost of land, brokerage, legal expenses, etc. The Assessing Officer has noted these documents in the tabular column in para-6 and has recorded a finding that there was no material with regard

In Assistant Commissioner of Income-Tax -vs- Hotel Blue Moon2, it is held that the assessment for the

In the instant case, Assessing Officer has relied upon documents referred to above. None of these documents bear any signature. In para-6(vi) of the assessment order, the Assessing Officer has placed reliance on another seized material marked as A/JG-2/7, which were seized from M/s.Jansons Group's Head Office and the statement of the agriculturists to support its case. The Assessing Officer has recorded in para-6(v) of the assessment order that the enquiries were made with the original owners of the land; that some of them were approached by the assessee before the departmental personnel visited them and the land owners have stated that they have received the amount mentioned in the registered documents, but some other land owners had deposed that they have

Sri.Shankar contended that three owners of the lands viz., Rajappa, Venkataramachari and Hanumanthegowda, who had purportedly deposed before the Income Tax Authorities that they had received 'on-money', have filed their affidavits dated March 23, 2001, February 23, 2001 and March 23, 2001 respectively. We have perused the affidavits filed by the said land owners. Sri.Rajappa in his affidavit has stated that he had sold his land at the rate of Rs.40,135/- per acre. Sri.Venkataramachari has stated that the Income Tax Officers had gone to his house and enquired about the sale and he had sold the land at Rs.40,000/- per acre and his statement was not recorded by the Income Tax Officers. Sri.Hanumanthegowda has stated that the Income Tax Officers had visited his place and he had sold his land at Rs.35,000/- per acre and his statement was also not recorded. Sri.Krishnappa has stated that since the Police complaint was lodged against

Further we may record that five purchasers have filed their respective returns and offered the income to capital gains tax.

Sri.Shankar has also produced assessment orders in respect of Syed Khaleelulla, Syed Amanulla and Syed Shafiulla, the purchasers of the lands in question. All assessment orders are dated December 24, 2009 passed under Section 143(3) of the Act. The said assessment orders show that purchasers had offered the income for capital gains.

Sri.Sanmathi pointed out that said assessment orders have been passed without prejudice to the assessment

We may record that assessment orders of the purchasers prima facie show that the purchasers had offered the income which they had earned by transferring the lands to the Company for formation of Golf Club and Villas and declared their capital gains and paid taxes. Though it is recorded by Assessing Officer that the order is passed without prejudice to the assessment proceedings of assessee herein, the orders are passed under Section 143(3) of the Act, which is a substantive assessment. Further, even if said orders are duly considered as 'without prejudice to the assessment proceedings' in respect of the assessee herein, we have noted that, there was no incriminating material seized, which could suggest that assessee had paid any 'on-money'. In substance, the Assessing Officer has relied upon only two circumstances, firstly, the seized documents, which do not bear any signature, secondly, on the statement of the original

In view of the above, we are of the considered view that Assessing Officer had no material to hold that the assessee had paid any 'on-money'. Hence, order passed by the Assessing Officer, CIT(A) and ITAT are not sustainable.

In view of the above, the following; ORDER