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Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE
ORDER PER SATBEER SINGH GODARA, J.M. :
This Revenue’s appeal for assessment year 2010-2011, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No.ITBA/NFAC/S/250/2022- 23/1046170738(1), dated 04.10.2022, involving proceedings u/s. 143(3) r.w.s.147 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
2 ITA.No.41/PUN./2023 2. The Revenue raises the following substantive grounds in the instant appeal :
“On the facts and in circumstances of the case and in law, the ld. CIT(A) has erred in not considering the fact that the assessee has failed to substantiate the claim of expenses amounting to Rs.1,02,48,750/- with documentary evidence. Therefore, in the absence of evidence, whether the expenditure claimed was wholly and exclusively incurred in connection with acquisition of land for which a fee of Rs.2,11,43,00/- received by assessee remained, unproved.
2. On the facts and in circumstances of the case and in law, the ld. CIT(A) has erred in not considering the fact that the MOU made in this case is a mere document which has no supporting material to establish the contents mentioned in the MOU.
3. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting the addition by not appreciating the fact that the assessee has invested almost entire amount received from M/s. Valuable Properties Pvt. Ltd. in the year of receipt itself in various assets as can be seen from the Balance sheet of the assessee, which only proves that the assessee was in receipt of fees for aggregating the lands and facilitating the deal and he has failed to offer the same for taxation. The entire amount of Rs.2,11,43,400/- was assessee’s income and there was no liability to spend the same.
3 ITA.No.41/PUN./2023
4. On the facts and circumstances of the case, the ld. CIT(A) has erred in deleting the addition by not appreciating the fact that the amount of Rs.26,00,000/- received by son and daughter, for which no justification was offered by the assessee. The assessee’s son and daughter have not offered to tax the said amount of advance by filing return of income voluntarily.
5. On the facts and circumstances of the case, the ld. CIT(A) has erred in holding that transfer of land was completed in the year relevant to A.Y.2015 without appreciating the fact that on the very next date of MOU (26.04.2009), all the lands were registered by the seller of the land (Shaivkar Co-operative Housing Society Ltd) in the name of buyer of the land (M/s. Valuable Properties Pvt. Ltd.).
6. It is humbly requested that present appeal is being filed in accordance with the CBDT’s Instruction No.3/2018 dated 11/07/2018 of the said circular. Therefore, the order of the CIT(A) may be vacated & that of the Assessing Officer may be restored.”
BRIEF FACTS OF THE CASE :
The assessee-individual derives income from land aggregation, income from other source and also from legal profession. He filed the return of income on 26.02.2013 showing total income of Rs.6,66,870/- which prima facie appears to be a 4 ITA.No.41/PUN./2023 “time barred one”. The case was re-opened by way of issue of notice u/.148 of the Act by recording reasons. In response, the assessee filed the return of income on 03.09.2015. It was noticed by the AO that assessee has not offered the amount received from M/s. Valuable Properties Private Limited for taxation. During the year under consideration, it was observed by Assessing Officer (AO) that assessee had entered into MOU with M/s. Valuable Properties Private Limited in the capacity of ‘Intending Purchaser’. He received Rs.1,85,43,400/- which had been declared as advances on the liabilities side of the balance sheet, as given in para 4.2 of the assessment order. Out of the above receipt, assessee had shown expenses amounting to Rs.82,94,650/- and the remaining amount of Rs.1,02,48,750/- as advances. The said amount was shown to have invested in fixed deposits and bank balances reflecting the same in the balance sheet. The assessee followed cash basis of accounting. It was also noticed by the Assessing Officer that his wife Smt. Smita Shekhar Wani received Rs.26.00 lakhs, his son Mr. Sanket Wani Rs.16.00 lakhs and daughter Ms. Shraddha Wani received Rs.10.00 lakhs; respectively. The assessee’s wife had shown Rs.26.00 lakh in her return of income as professional receipts. However, learned Assessing Officer could not find any justification for the amounts received by assessee’s son and daughter and thus Rs.26.00 lakhs he added the same substantively in assessee’s hands.
5 ITA.No.41/PUN./2023 4. The Assessing Officer issued his show cause notice to the assessee to explain the reasons as to why the amount received from M/s. Valuable Properties Private Limited be not assessed as income for the year under consideration. The taxpayer submitted his reply on 14.03.2016 which has been extracted in para 4.4 of the assessment order strongly contesting the same thereby pleading that no income could be declared from the said advances fulfilling no account of liabilities arising therefore. The Assessing Officer made addition of Rs.2,11,43,400/- received from M/s. Valuable Properties Private Limited by rejecting all of his submissions.
5. The learned NFAC has reversed the impugned addition as under :
6 ITA.No.41/PUN./2023 7 ITA.No.41/PUN./2023 8 ITA.No.41/PUN./2023
9 ITA.No.41/PUN./2023 10 ITA.No.41/PUN./2023 11 ITA.No.41/PUN./2023 12 ITA.No.41/PUN./2023 13 ITA.No.41/PUN./2023 6. Mr. Nayak vehemently argued during the course of hearing that the NFAC has erred in law and on facts in reversing the Assessing Officer’s well reasoned findings making the impugned addition. He drew strong support from the Assessing Officer’s detailed discussion in his assessment order dated 17.03.2016 taxing the assessee’s entire consideration of Rs.2,11,43,400/- in foregoing terms.
7. Learned counsel representing the assessee strongly supported the NFAC’s detailed discussion deleting the impugned addition. Mr. Ratnaparkhi has further taken pains to file the assessee’s detailed written submissions reading as under :
“6. Against the deletion of addition of Rs.2,11,43,400/-, the Revenue is in appeal before the Tribunal. SUBMISSION OF LD. AUTHORISED REPRESENTATIVE (AR): “Salient points 1. The respondent is an Advocate, having professional income and income from other sources. The return of income for the year under appeal was filed by the respondent on 26.02.2013 declaring total income of Rs.6,66,870/-.
2. The only issue disputed by the department under the present appeal is the liability of the respondent to tax, in respect of advance amount received from M/s Valuable Properties Pvt. Ltd. in the year under appeal. The Hon. CIT(A), NFAC, Delhi, after examining the facts of the case, deleted the entire addition and the department being aggrieved by the 14 ITA.No.41/PUN./2023 action of the Hon. CIT(A) is in appeal before your honours.
3. At the outset, the appellant submits that the case of the appellant before the Id AO and as argued before Hon. CIT(A) was that the amounts received from M/s Valuable Properties Pvt. Ltd. for aggregating land and removing title defects was in the nature of advance in the year under appeal. The said amount could be brought to tax only *on completion of all undertaken responsibilities, which in the respondents case was in A.Y.2015-16. The Hon. CIT(A) has agreed with the respondent that the amount received was an advance (liability) in hands of the respondent in A.Y. 2010-11 (para 7.5/pg nos. 18 to 20 of CIT(A) order). All the grounds raised
by the department challenge the allowability of expenses and discuss other issues, not connected to the ground on which relief has been granted by the Hon. CIT(A) NFAC, Delhi. Accordingly, it is pointed out that the department has not challenged the ground on which relief is granted by the Hon. CIT(A). It is submitted that for this reason, the appeal filed by the department is required to be dismissed.
4. Brief facts of the matter and case of the respondent. 4.1. A company named M/s. Valuable Properties Pvt. Ltd. set out to acquire a large parcel of about 2100 acres of land on the outskirts of Panvel town, Dist. Raigad, to set up a mega city known as GFH Economic Development City, containing energy, telecom and entertainment zones. Most of the land sought to be 15 ITA.No.41/PUN./2023 acquired was agricultural land. A part of the land under total proposed acquisition was owned by one proposed society, Shivkar Co-op Housing Society (Proposed). Even though the legal title of land vested with the said proposed society, a substantial portion of the land was possessed, occupied and ownership title claimed by original farmers/occupants of the said land. The names of such claimants also appear on the land ownership revenue records being 07/12 extracts. (Kindly refer to pg nos. 118 to 143 of paperbook). The respondent as a local advocate was engaged as a land aggregator by M/s. Valuable Properties Pvt. Ltd. for acquiring and clearing the title of land admeasuring 5.09.04 hectares (about 12.50 acres) at Village Shivkar, Taluka Panvel, Dist. Raigad. As stated earlier, the land though held in the name of the proposed society, Shivkar Co-op Housing Society (Proposed) was in reality occupied, possessed and claimed by several local farmers. It is submitted that in the Panvel area, generally the person who owns the land and the person who cultivates it are different and the person who is using the said agricultural land needs to be adequately compensated in order to obtain a confirmation of title with regards to the land in question. A Memorandum of Understanding (MOU) dated 24.06.2009 was executed between the respondent and the said M/s. Valuable Properties Pvt. Ltd. incorporating the basic terms on which the respondent was engaged for performing his responsibilities.
16 ITA.No.41/PUN./2023 Copy of pg nos.07 to 11 of paper book. Some of the relevant clauses of MOU dt.24.06.2009 are reproduced hereunder for the sake of appreciation of the responsibilities undertaken by the respondent.
1.The Land Aggregator hereby agrees to procure and transfer the Agreement Lands and to procure the direct sale and transfer of the Agreement Lands, more particularly described in the schedule written hereinunder lying at Village- Shivkar, of Taluka-Panvel, Dist-Raigad to the Intending Purchaser, free from all encumbrances, claims and demands and with quiet, vacant and peaceful possession. The Intending Purchaser hereby agrees to acquire from Land Aggregator the Agreement Lands at or for the purchase price and consideration a sum of Rs. 1,25,000/- (Rupees One Lakh Twenty Five Thousand Only) per Gunthas only.
2. The Land Aggregator shall procure an agricultural land as described in the schedule written hereunder and transfer to the Intending Purchaser with clear and marketable title as also deliver vacant possession of the said agricultural lands to the Intending purchaser or its nominee.
3. The Land Aggregator shall at his own cost & exp. settle all claim, demands and outstanding dues of Original Landowners if any.
17 ITA.No.41/PUN./2023 4. It is specifically agreed by and between the parties hereto that the Land Aggregators shall settle all past claims, demand of Original Landowners if any who have been sold their respective lands to Shivkar Co-op. Hsg. Society (Prop.) through Land Aggregator as per M.O.U. dated /. /1997 made between M/s.Shivkar Co-op. Hsg. Society (Proposed) and the Land Aggregator herein.
Similarly, Shivkar Co-op Housing Society (Proposed) also passed a resolution appointing respondent to do all legal acts, including settlement with the original land owners for effectively transferring the title, possession and occupation of about 12.50 acres of land in favour of M/s. Valuable Properties Pvt. Ltd. (Kindly refer to letter dt. 22.03.2009 appearing at page no. 18 & 19 of paper book). Some of the important conditions agreed to be fulfilled by respondent are : (3) All past claim, demands, arrears and settlement with original landowners if any shall be borne by you only. (4) Delivery of possession by you to M/s. Valuable Group of Companies. Thus, the role of the respondent was that of a land aggregator on behalf of parties concerned. The respondent was required to organize for agreements to be executed between the said M/s. Valuable Properties Pvt. Ltd. and the vendors as well as to clear all the impediments in peaceful transfer of the lands in the name of the said company. It was the responsibility of the 18 ITA.No.41/PUN./2023 respondent to clear the claims of all parties involved. It is towards these projected expenditures that the respondent had received amount from the said company as advance. The role and responsibility of the respondent was laid out in the MOU dt.
26.04.2009 with M/s. Valuable Properties Pvt. Ltd./Authorization letter dt. 22.06.2009 by Shivkar Co-op Housing Society (Proposed).
The relevant documents pertaining to the issue are enclosed in the paper book as under :
Sr. Nature of documents Page no. No. Enclosed of the paper book 1. Copy of MOU dt.26.04.2009 between respondent and M/s. 07 to 11 Valuable Properties Pvt. Ltd.
Copy of confirmation alongwith ledger account of the 12 to 14 respondent in the books of M/s. Valuable Properties Pvt. Ltd.
3. Copy of resolution passed by Shivkar Co-op Housing Society 15 to 19 (Proposed) appointing respondent to carry out all the functions required for hassle free transfer of impugned land alongwith terms of contract.
Partywise details of expenses incurred by the respondent for 20 to 95 the acquisition of land from land owners and other allied expenses alongwith documentary evidences supporting the said expenses 5. Chart alongwith copies of Index II of the agreements entered 96 to 111 into by M/s Valuable Properties Pvt. Ltd. and Shivkar Co-op Housing Society (Proposed)/K.V Raghvendran 6. Details of year wise expenses incurred on the acquisition of 112 land for M/s Valuable Properties Pvt. Ltd.
Details of disputed lands as on 10.12.2016. 113 8. Details of provision expenses for settlement of disputed lands. 114 9. Copy of legal notice dt.21.03.2016 served on Shri Shekhar 115 to 117 Wani and Shri K. V Raghvendran in respect of disputed land by one of the land owners viz Smt. Suman Gangaram Mate. (Sample evidence of dispute).
10. Copies of 7/12 extracts of the disputed agricultural lands in 118 to 143 the name of M/s Valuable Properties Pvt. Ltd after settlement of the disputes by the respondent.
Financial Statements alongwith computation of income for AY 144 to 170 2015-16 when the income from the transaction was offered to tax.
ITR V alongwith computation of income and financials for AY 171 to 178 2010-11 of Mr. Sanket Shekhar Wani 13. ITR V alongwith computation of income for AY 2010-11 of the 179 & 180 daughter of the respondent Mrs. Shraddha Ankit Sakhare 14. Copy of letter dt. 14.03.2016 filed in the course of asst, 181 to 183 proceedings explaining the role of the respondent 15. Relevant pages of legal suits filed by the land owners against 184 to 274 the respondent with English translation thereof (sample evidence of disputes)
19 ITA.No.41/PUN./2023 4.2 The respondent substantially completed all the undertaken responsibilities by previous year relevant to A.Y. 2015-16 and offered the surplus of Rs.32,09,750/- to tax (pg no. 145 & 146 of paperbook). It is thus the case that the net income of the respondent from the transaction is offered to tax in A.Y. 2015-16 on completion of all responsibilities. The case of the Id. AO is that the entire gross receipts should be brought to tax A.Y. 2010- 11 itself he. on receipt of the amount from M/s Valuable Properties Pvt. Ltd. The year wise breakup of expenses debited in the books of the respondent are as under : Asst. yr. Amount (Rs. 2010-11 82,94,650/- 2011-12 10,77,000/- 2014-15 8,65,000/- 2015-16 50,97,000/- Total Rs. 1,53,33,650/- Evidence of expenses incurred are at pg nos.20 to 95 of paper book 4.3 In the course of asst, proceedings, the respondent explained to the ld.AO that funds received from M/s Valuable Properties Pvt. Ltd. were in the nature of advance which had to be first utilized for consideration to paid to land owners, survey charges, commission etc. to provide the clear and marketable title of the said agricultural lands to M/s Valuable Properties Ltd. The party wise details of the such expenditure incurred reflecting amounts paid to land owners, commission etc. is enclosed at 20 ITA.No.41/PUN./2023 pages 20 & 21 of paperbook. The relevant evidences of payments, settlement of disputes etc. at pages 22 to 95 of paperbook. The ld.AO failed to appreciate the basic fact that it very common practice in the land transactions to give advances to the land aggregator so that he starts resolving the legal impediments to complete the transaction of purchase. The respondent was engaged as an aggregator responsible to clear all past claims, demands, arrears and settlement with original land owners and was entitled to earn the income only after incurring all the expenses, which fact is evident from the terms of MOU dt. 26.04.2009. The terms of contract entered into between Shivkar Co-op Housing Society (Proposed) and the respondent (relevant page appears enclosed at page no. 19 of the paper book) also states that.... All past claim, demands, arrears and settlement with original landowner if any shall be borne by you only. The above facts and documentary evidences support the respondent’s claim that the concerned transaction was not completed in the year under appeal A.Y. 2010-11 and entire receipt ‘of Rs.2,11,43,400/- in the said year was in the nature of advance only.
4.4 The ld.AO failed to appreciate that entire transaction was a proposed transaction in the year under appeal and the same had come to stand still in subsequent years owing to various legal hindrances from the original land owners. This fact is evidenced by details of disputed lands as on 10.12.2016 from 21 ITA.No.41/PUN./2023 the land area to be acquired by the respondent and provision of expenses made by the respondent for such disputed lands. It is to be noted that one of the original land owners viz. Smt. Suman Gangaram Mate served legal notice dt.10.12.2016 claiming that she was owner of a part of the land. Copy of the said legal notice is enclosed herewith at pg no. 115 to 117 of the paper book. English translation of entire docket of the legal suit filed by the said party being quite voluminous is not placed on record but relevant pages of the same are enclosed herewith at pages 259 to 274 of the paper book. This is an example of the nature of litigation required to be handled by the respondent for both parties. The respondent over the period of time settled many disputes in respect of the claims of the original land owners which is reflected by the copies of final 7/12 extracts in the name of M/s Valuable Properties Pvt. Ltd. It is to be noted that the respondent after resolution of all disputes managed to get the title of the concerned disputed lands cleared. 4.5 The respondent reiterates that till completion of the assignment; the amount received remained as an advance in the hands of the respondent. Accordingly, taxing the impugned amount in the year under appeal is not justified as the respondent was not entitled to any income on that account in AY 2010-11. This is owing to the fact that he had not fulfilled all the responsibilities assigned to him vide the MOU dt. 26.04.2009.
22 ITA.No.41/PUN./2023 4.6 The entire chain of events along with documentary evidences as explained above abundantly substantiates that the respondent entered into a genuine business transaction with M/s Valuable Properties Pvt. Ltd and the income generated by the said transaction is also offered to tax in AY 2015-16. The addition of entire receipt in A.Y. 2010-11 is therefore uncalled for. 4.7 The respondent submits that what can be brought to tax under the Income Tax Act 1961 is the “income” of any assessee. All receipt of funds is not “income” liable to levy of tax. Any receipt either on account of “advance money or earnest money received” will not be liable to tax as no “income” under the Income Tax Act 1961 has arises in such a case. On receipt of advance in respect of a proposed transaction, no “income” arises in the hands of the respondent. Accordingly, the receipt of cash advance by the respondent bore the character of an “advance” only. 4.8 The respondent on this issue relies upon the following decisions with relevant legal propositions discussed in brief. (i) CIT -vs- Shoorji Vallabhdas & Co., 46 ITR 144 (SC) Liability to income tax is only on accrual of income and not otherwise. (ii) Morvi Industries Ltd. -vs- CIT, 82 ITR 835 (SC) Income accrues only when it becomes due. The recipient of such income should have completed all obligations undertaken.
23 ITA.No.41/PUN./2023 (iii) Pr. CIT -vs- Rohan Projects, 113 taxmann.com 339 (Bombay) Where assessee had sold a land but certain obligations were not completed, it was held that income would arise only on completion of such obligations. (iv) CIT -vs- Nagri Mills Co. Ltd., 33 ITR 681 (Bombay) If the rate of tax is same, the dispute with respect to year of taxation is not relevant (v) Deloitte Touche Tohmatsu India (P.) Ltd. -vs- DCIT, 109 taxmann.com 431 (Mumbai) Where relevant income was offered to tax in subsequent asst, year, there was no loss to revenue. (vi) DCIT -vs- M/s. Shiv Sai Developers, 134 ITD 445 (Mum) An advance or earnest money as per MOU cannot be treated as income, unless the obligations undertaken are completed. (Copies of these decisions are separately submitted). In view of the above facts and legal precedents cited above, it is humbly submitted that the amount of Rs.2,11,43,400/- received from M/s Valuable Properties Pvt. Ltd. being in the nature of advance in the year under appeal ought not be taxed. Ground no 1 may accordingly be allowed.
Deduction for expenses incurred required to be granted 5.1 Without prejudice, it is further submitted that even if it is decided that income on account of the proposed transaction with M/s. Valuable Properties Pvt. Ltd. arose in the year under appeals he. A.Y. 2010-11, it is necessary that appropriate deduction for expenses incurred in performing the assigned tasks is required to be granted. The sum of Rs.2,11,43,400/- (Rs.1,85,43,400/- plus 24 ITA.No.41/PUN./2023 Rs.16,00,000/- plus Rs.10,00,000/-) received by the respondent represents gross receipts for the assigned tasks. Entire receipts cannot partake the character of income and only net surplus that arises in performing the business transaction can be brought to tax. The respondent has incurred expenditure of Rs.1,53,33,650/- in performing the responsibilities undertaken on behalf of M/s. Valuable Properties Pvt. Ltd. Deduction for such expenditure is required to be granted in determining total income of the respondent. The case of the revenue that entire gross receipts should be brought to tax in place of net surplus is absurd. In determining any income, deduction for expenses incurred is required to be mandatorily granted. 5.2 The respondent in the course of asst, proceedings vide letter dt. 14.03.2016 (copy at pg nos. 181 to 183 of paperbook) explained to the ld.AO that respondent had settled various claims on the land by paying for alternate land and had also incurred expenditure such as commission, brokerage, etc. The ld AO at point (vi) of para 4.5 of the asst. order has accepted the fact that respondent has placed on record documentary evidences but has denied the same saying that documents do not reflect purpose of payment, details of payee, relation of payee with the land under construction etc. We draw your 25 ITA.No.41/PUN./2023 honour’s kind attention to the documentary evidences enclosed at pages 22 to 95 of the paperbook supporting the claim of expenses. On perusal of the same, your honour will appreciate that all the expenses are paid through banking channels, the vouchers are dated and signed by the land owners. The reason for incurring the said expenditure is also reflected on the covering page.
The respondent had placed on record plethora of documentary evidences like compromise agreement with the land owners, duly signed receipts from the parties bearing cheque nos. through which payment was made by the respondent. However, the Id.AO has denied the genuine claim of the respondent on the basis of incorrect and vague presumptions that respondent has not submitted documentary evidences in respect of the claims made, the respondent has merely claimed that there were disputes between land owners and Shivkar Co-op Housing Society (Proposed), respondent has received fees for facilitating the deal. The Id.AO failed to appreciate that no prudent businessmen particularly a company like Valuable Properties P. Ltd. will pay such a huge amount for merely facilitating a transaction, it is but natural that respondent was expected to perform series of tasks as penned down in the MOU dt. 24.06.2009. The relevant extracts of copies of legal suits subsequently filed by the 26 ITA.No.41/PUN./2023 land owners are enclosed at pages 184 to 274 of the paper book.
5.3 Taking into account the above facts and the provisions of law, it is reiterated that even if any amount is required to be assessed in the year under appeal, the same cannot exceed Rs.32,09,750/- being the surplus earned by the respondent in performing the given tasks. It is also to be appreciated that respondent has already offered this amount to tax in A.Y. 2015-16. The department has accepted this income of the respondent in A.Y. 2015-16. The case of the department that income from such transaction arises in A.Y. 2010-11 will lead to double taxation of the same income, which is not permitted by law.
The action of the Hon. CIT(A) NFAC, Delhi in deleting the addition be upheld by dismissing the appeal of the department.”
7. Before the Tribunal, the assessee relied on the following decisions :
CIT Vs. Shaoorji Vallabhdas & Co., 46 ITR 144 (SC) Morvi Industries Ltd. Vs. CIT 82 ITR 835 (SC) Pr.CIT Vs. Rohan Projects 113 taxmann.com 339 (Bombay) CIT Vs. Nagri Mills Co. Ltd 33 ITR 681 (Bombay)
27 ITA.No.41/PUN./2023 Deloitte Touche Tohmatsu Indi (P.) Ltd. Vs. DCIT 109 taxman.com 431 (Bombay) DCIT Vs. M/s. Shiv Sai Developers 134 ITD 445 (Mum)
We have given our thoughtful consideration to the foregoing vehement rival arguments and find no merit in assessee’s stand. The entire issue rests on the following facts herein. The assessee relies upon an alleged MOU between himself and M/s. Valuable Properties Private Limited dated 24.06.2009 wherein the latter party appointed him it’s land aggregator regarding direct sale and transfer of the lands situated in the real estate of village Shivkar, Taluka Panvel, Dist. Raigad. We make it clear that there is no quarrel between the parties regarding the assessee/family members received the impugned consideration forming subject matter of the addition(s) herein. And also the undisputed fact is that the owner of the said land happened to be M/s. Shivkar Cooperative Housing Society [vendor] who had executed the sale deed herein on the very next day i.e., on 25.06.2009 in favour of M/s. Valuable Properties Private Limited for the corresponding consideration amount which is again not an issue in the instant appeal.
8.1. We wish to reiterate here that the sole dispute between the parties herein is that the Revenue’s stand strongly contests the assessee’s claim of having suffered any liability of expenditure regarding his receipt(s) coming from M/s. Valuable Properties Private Limited; whereas the taxpayer on the other hand has been 28 ITA.No.41/PUN./2023 claiming to have solved various serious issues regarding foregoing land sold; for a couple of years; which finally stood concluded in assessment year 2015-2016. Learned counsel sought to highlight the fact that the department has itself accepted the net income derived from the foregoing MOU dated 24.06.2009 in assessment year 2015-2016 wherein the assessee had declared Rs.32,09,750/- as per the NFAC’s detailed discussion (supra).
8.2. We sought to know from the assessee side as to what was the exact task(s) performed at his behest in all these years right from 24.06.2009 to assessment year 2015-2016 involving relevant previous year 2014-2015. Learned counsel placed reliance on the assessee’s particulars forming part of the paper book at pages 283 to 331 that he had undertaken a lot of detailed exercises i.e., various objections that the claim holders on the land sold by M/s. Shivkar [vendor] to the vendee [M/s. Valuable Properties Private Limited]. Mr. Ratnaparkhi states that there are various counter claimants on such agricultural and other lands in this part of the country which may or may not emanate from the corresponding revenue records.
8.3. We hardly see any merit in assessee’s impugned stand. This is in light of the crucial facts that the assessee’s MOU dated 24.06.2009 nowhere highlighted even a single specific task to be undertaken by him regarding the land in question for the purpose of removing the alleged encroachers or solving counter claim issues; whatsoever. Next days’ sale deed i.e., 25.06.2009 (supra) executed 29 ITA.No.41/PUN./2023 between the foregoing vendor and vendee has nowhere recognized any dispute or claim regarding any right or title or possession of the property. There is no even a whisper about the assessee’s alleged MOU in the said sale deed despite the fact that it is a duly registered document. It would further be relevant to observe herein that the assessee is neither a witness nor there is any denial of the fact that vendee M/s. Valuable Properties Private Limited had duly agreed to have acquired all rights of title and possession etc., as per the recitals in the same. Learned counsel at this stage claimed that it took almost 4-5 years for the assessee to solve all so-called problems regarding the above stated land. He invited our attention to various legal notices etc., pertaining to the land in support of the assessee’s explanation. We put specifically a question to him to pin- point even a single title or possession or any other dispute pending before any revenue authority or the learned civil court having territorial jurisdiction. The reply received is again a vague one wherein he has placed reliance on the assessee’s alleged list of payees whose names are found neither here nor there in any revenue records. He has placed on record only self-attested/self serving material in the case file. We observe in these facts the assessee’s entire explanation; be it that of MOU dated 24.06.2009 or the vendor society’s resolution or of the subsequent payments; is found to be a concocted stay only in order to erect fictitious land aggregating business, not satisfying the test of human probabilities after removing all blinkers as settled by the hon’ble apex court’s 30 ITA.No.41/PUN./2023 landmark decision in Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC) and CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC).
8.4. Learned counsel at this stage drew a distinction that the issue before their lordships’ was not the same as are the facts before us. We are of the considered view that their lordships’ have drawn broader principles for the purpose of appreciating the evidence filed in income-tax proceedings which always apply as guiding factors. Be that as it may, we hold inlight of the foregoing voluminous suspicious circumstances and on account of assessee’s failure in filing the cogent supporting evidence(s) that his entire story of having received the impugned sum of Rs.2,11,43,400/- as land aggregator which liable to be taxed on “netting” basis in assessment year 2015-2016 (supra) deserves to be rejected. Order accordingly. The Revenue succeeds in it’s instant sole substantive grievance. It is further made clear that the learned Assessing Officer’s consequential computation shall indeed give due credit of the assessee’s income already declared in assessment year 2015- 2016 (supra) as per law.
No other ground or argument has been pressed before us.
This Revenue’s appeal is allowed in above terms.
31 ITA.No.41/PUN./2023 Order pronounced in the open Court on 26.04.2024.