RAJENDRAPRASAD BABULAL KHETAN,SURAT vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIR. - 4, SURAT

This is the bunch of seven appeals filed by the Assessee and Revenue and Cross Objections filed by Assessee, pertaining to assessment year (AY) 2017-18, 2019-20 and 2020-21, all are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals), which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) r.w.s. 153A/154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

During the course of search, at the residence of Shri Sunny J. Patel and Shri Jayantibhai B. Patel, at 240, Lal Kila, Near Police Chowky, Tekrafaliyu, Punagam, Surat, some digital devices were found and backup of the same were taken. On verification of such sanned images, one image reflected satakhat dated 09.09.2016, wherein details of purchases of lands bearing Block no. 786, 787 and 789 of village Punagam was found form whatsapp chat of Shri Sunny J. Patel and Shri Jayantibhai B. Patel (Camera roll: IMG_4971). The above satakhat was between Shri R. D. Palitana (seller) and Shri Rajendra Badrinarayan Chankad & Jayantibhai B. Patel (Purchasers). The satakhat is signed by both the parties on 09.09.2016 in the ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan presence of witnesses Shri Milan B. Vasani and Shri Ramesh Pithwadi. The said satakhat reflects that the land bearing block no.786, 787 and 789 of village Puna admeasuring about 17785 sq. yards agreed to be sold and purchased for Rs.61,551/- per sq. yard. The total area of each land at block no.786, 787 and 789 of village Puna was verified from the website of Gujarat government, any ROR from which it is gathered that her land at block no.786, Puna, has been sold for a total consideration of Rs.3,00,00,000/- whereas as per the saudachitthi found, total consideration of the said land is Rs.23,08,16,250/- which is as under: Sr. no. Block no. Sq. Mtr. Sq. Yard Rate Amount 1. 786 3136 3750 61551 23,08,16,250 8. Therefore, assessing officer observed that an amount of Rs.20,08,16,250/- has been invested in cash for the said land block no. 786 by the purchasers. Shri Rajendra chandak and Shri Jayantibhai B. Patel are the sellers and Shri Vinod Goswami, Vishal N. Jalan and Rakesh Khetan are the purchasers. The on-money invested by Shri Vinod Goswami, Shri Vishal N Jalan and Shri Rakesh Khetan are Rs.8,03,26,500/-, Rs.3,01,22,438/- and Rs.9,03,67,313 respectively. The assessee has requested to explain the said transaction towards unaccounted investment made with documentary evidences as appearing in books of accounts.

In response, the assessee has replied as follows: “1. In respect of digital image stated to be scanned from mobile phone of Shri Sunny J. Patel and Shri Jayantibhai B. Patel and pasted on Page No. 3 of above referred notice, I humbly beg to submit that the said digital image and contents therein are totally irrelevant for me and in my case. As has been mentioned by your honour in your above referred notice, this seems to be some understanding between some Shri R. D. Palitna (seller) and Shri Rajendra B. Chandak & Shri Jayantibhai B. Patel (Purchasers). This jointing appears to be jotted on 09.09.2016 between above persons. I ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan have no concern or relevance with this message and contents therein. Neither the same pertains to me nor the same mentions my name or anything about me nor my signature is there on the same. This jotting is in or anything about me nor my signature is there on the same. This jotting is in Gujarati language and I do not know writing in Gujarati. I am totally unaware about the contents of this message, which is totally irrelevant for me and my case.

However, assessing officer noted that during the course of search proceedings at the residence of Shri Shankarlal Nebhumal Uttacmchandani, Loose paper from page no.1 to 150 were found, seized inventorized in Annexure –A-4. Page no.75 to 79 of Annexure- A-4 is regarding with MoU dated 02.05.2016, regarding property situated at Plot No.141, T.P No. 8, F.P. No.54, Umarwada, Surat. First party (lease taker of the property) are partners of firm Ketan Textile i.e. NareshkumarVishveshwarlal Agarwal and Rajendra Prasad Babulal Khaitan. Second party (lease giver of the property) are Devendrabhai Mulchanddas Jariwala and Prahladbhai Mulchanddas Jariwala, as per this MOU consideration for the said transaction agreed upon is Rs.3,61,00,000/-. The payment conditions mentioned in the MOU are as under: Rs.51,00,000/- paid on 02.05.2016, Rs.50,00,000/- will be paid by 05.05.2016, Rs.2,60,00,000/- will be paid after order/documentation.

In response, the assessee submitted written submission before the assessing officer, which is reproduced below: “With reference to above, I humbly beg to submit that I had not received copy of the MOU (Page No.75 to 79 of Annexure A-4 stated to be seized from residence of Shri Shankarlal Nebhumal Uttamchandani) as mentioned in above referred notice. In the absence of copy of same and statement/explanation of Shri Shankarlal Uttamchandani in respect of the same, I am not in position to give exact reply. In the meanwhile, I humbly beg to submit that I had no knowledge about entering any MoU with Shri Devendrabhai Mulchanddas Jariwala and Prahladbhai Mulachanddas Jariwala and making any such cash payments to them. I, therefore, request your honour to kindly provide me copy of these seized papers (MOU) as mentioned in the notice and statement/explanation of Shri Shankarlal Uttamchandani in respect of the same, so that I can file proper reply in this regard.”

However, the assessing officer rejected the contention of the assessee and observed that assessee did not give any substantial evidence in respect of the contention taken by them, nor could prove that the said deal did not materialize in form of satakhat or other documents, therefore an addition of Rs.3,61,00,000/- was made by the assessing officer.

Aggrieved by the order of Ld. CIT(A), the Revenue, as well as Assessee, both are in appeal before us.

Learned DR for the revenue argued that the documents and papers found at the residence of assessee during the search proceedings prove beyond doubt that the assessee had major role in the said land transaction. From the details available with assessing officer it is ascertain that the assessee had made huge investment in land in Surat and is partner in many firms related to Kuberji Group. Further, the digital data seized by the search team is as per the Evidence Act, 1872 of I.T. Act, 1961 and as per section 292C of the I.T. Act, there is presumption with regard to content of the seized material. The search u/s 132 of the Act has conducted in the case of assessee and many group concerns/individuals of Kuberji Group. Further, the assessee has not explained the transactions properly, therefore addition made by the assessing officer may be sustained.

The Learned Departmental Representative (Ld. DR) for the Revenue submitted that the DIN Number and the assessment order, computation sheets and the demand notice were in the sequence and these orders were framed by the Assessing Officer on 30.09.2021. The Ld. DR pointed out that by mistake, the figures written in intimation

The Ld. DR for the Revenue submitted that rectification order under section 154 of the Act, may be passed by the assessing officer, suo motu, without informing to the assessee, if there is apparent mistake in the assessment order, therefore rectification order passed by the Assessing Officer is a valid rectification order.

On the other hand, Shri Ramesh Malpani, learned Counsel for the assessee argued that addition of Rs.3,61,00,000/- was made by the assessing officer on account of presumptive unaccounted investment on the basis of irrelevant papers seized from third party copy of the same and without providing copy of statement of such third party in respect of those papers. The assessee was not aware about this MOU and assessee had requested the assessing officer to provide copy of the same and also copy of statement of said third party from whose place the same was seized. However, assessing officer, without providing any of these papers, made the addition of whole of amount of ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan Rs.3,61,00,000/- in the hands of assessee as unaccounted/ unexplained investment. The ld Counsel submitted that said MOU is not at all relevant in case of assessee. As mentioned by assessing officer, the MOU was between M/s Ketan Textiles and the lease givers. The assessee is an individual, had nothing to do with the same. Even if some investment is made, it is up to the firm M/s Ketan Textiles to explain the same. Merely because the assessee was also a small partner in the firm does not mean that the addition can be made in the hands of assessee. Thus, the so called MoU, is irrelevant document for assessee, as an individual. Besides the said MOU was not found and seized during the course of search and seizure action in the case of assessee but was seized from a third party. Apart from this, addition is also beyond the scope of section 153A of the Act, as the same is not based on any incriminating material found and seized during the course of search and seizure action in the case of assessee. The assessee has not entered into any such transaction with above mentioned parties (lease givers) and has never taken any such property on lease and has not made any such payment /investment. There has been no such finding, at all in the case of assessee. The assessee has been informed by the said party, M/s Ketan Textiles that the above mentioned MOU could not be executed and materialized and no such investment was made by the firm.

Thus, on merits of the case, the Ld. Counsel for the assessee submitted that entire addition made by Assessing Officer based on the unsigned memorandum of understanding (MoU). Moreover, there was no name of the assessee in the said MoU, therefore just because the MoU was received by the Income Tax Department from a third party

Shri Malpani, also argued that addition to the tune of Rs.12,62,500/- (12.5% of Rs.1,01,00,000) was sustained in the hands of the assessee by ld CIT(A). The assessee was the partner of said firm having share of 12.5% [others being Mr. Naresh Agarwal (37.5%), Mr. Hiren Uttamchandani (37.5%) and Mr. Rajesh Poddar (12.5%)]. The ld CIT(A) has sustained the addition of Rs.12,62,500/- (12.5% of Rs.1,01,00,000) in the hand of assessee, because assessee was one of the partners in the firm, however in the hands of other partners, (others being Mr. Naresh Agarwal (37.5%), Mr. Hiren Uttamchandani (37.5%) and Mr. Rajesh Poddar (12.5%), the Department has not made addition. Therefore, assessee should not be treated differently from these three partners. When the Department

Shri Malpani, further argued that Ld. CIT(A) has not considered the arguments of the assessee on the technical issue. The Ld. CIT(A) did not appreciate that assessment order was unsigned by the Assessing Officer, therefore assessment order passed by the Assessing Officer under section 143(3) r.w.s. 153A of the Act is not in accordance with law. If the assessment order is unsigned then it would be deemed that no assessment order was framed by the Assessing Officer, therefore Ld. CIT(A) was erred in upholding the validity of assessment passed by the Assessing Officer under section 143(3) r.w.s. 153A of the Income Tax Act, 1961. The Ld. Counsel pointed out that the impugned unsigned assessment order has been passed and served upon the assessee on 16.10.2021 by changing the figure of assessed income at Rs.3,85,77,900/- as against originally assessed income of Rs.24,77,900/- as per computation sheets and demand notice uploaded on 30.09.2021 and therefore the assessment order is invalid in the eye of law as it is a time barred assessment order and Ld. CIT(A) should have quashed such assessment order. For that, Ld. Counsel relied on two judgments which are reproduced below: (i) Shanti Lal Godawat vs. ACIT (2009) 126 TTJ 135 (Jodhpur) (ii) CWT vs. Dhhansukhlal J. Gajjar (1999) 137 ITR 534 (Guj. HC)

Shri Malpani, also argued that order passed by the assessing officer should have been rectified and therefore, Ld. CIT(A) has erred in upholding the validity of rectification order passed by Assessing Officer under section 154 of the Income Tax Act, 1961. The rectification order under section 154 of the Act, was passed by the assessing officer, before the impugned unsigned assessment order delivered to the assessee. Normally, the rectification order was passed after framing the assessment order, therefore the rectification order under section 154 of the Act is bad in law because it is before the date of 16.10.2021, which is the date of passing the assessment order, therefore the rectification order passed by the Assessing Officer before the assessment order, was illegal. The Ld. Counsel also submitted that while passing the rectification order under section 154 of the Act, the assessee has not been given opportunity of being heard.

We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan facts of the case including the findings of the ld. CIT(A) and other material brought on record. Though facts have been discussed in detail in the foregoing paragraphs, however in the succinct manner, the relevant facts and background are reiterated in order to appreciate the controversy and the issue for adjudication. As per the assessing officer, a search and seizure action u/s 132 of the Act was conducted in Shree Kuberji Group and the business and residential premises of Shri Rajendra Prasad Babulal Khetan were also covered as he is the partner in some of the firms of the Group. During the course of search, various incriminating documents were found and seized. During the course of the search at the residence of Shri Shankarlal Nebhumal Uttmchandani, loose paper page no. 1 to 150 were found and seized and inventoried as Annexute-A-4. The Page no.75 to 79 of the said Annexure-A-4 is regarding MOU dated 02.05.2016, regarding property situated at Plot No. 141, T.P.No.-8, F.P.No.54, Umarwada. In the aforesaid MOU, first party (lease taker of the property) were partners of firm Ketan Textile i.e. Nareshkumar Vishveshwarlal Agarwal and Rajendra Prasad Babulal Khaitan (the assessee). The Second party (lease giver of the property) was Devendrabhai Mulchanddas Jariwala and Prahladbhai Mulchanddas Jariwala. And as per the said MOU consideration for the said transaction agreed upon was Rs.3,61,00,000/-. On Page no.76 of Annexure-A-4, there was mention of cash receipts out of above mentioned amount and the receiver of the cash as a token of receipt has also signed it. During the assessment proceedings, the assessee did not give any substantial evidence in respect of contention taken by him, nor could prove that the said deal did not materialize in form of satakhat or other ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan documents and hence the Assessing Officer has made the addition amounting to Rs.3,61,00,000/- on account of unaccounted investment.

During the appellate proceedings, the assessee argued before the ld CIT(A) that during the course of search, various incriminating documents were found and seized. During the course of the search at the residence of Shri Shankarlal Nebhumal Uttmchandani, loose paper page no. 1 to 150 were found and seized and inventoried as Annexute- A-4. Page no.75 to 79 of the said Annexure-A-4 is regarding MoU dated 02.05.2016, regarding property situated at Plot No. 141, T.P.No.-8, F.P.No.54, Umarwada. In the aforesaid MoU, first party (lease taker of the property) were partners of firm Ketan Textile i.e. Nareshkumar Vishveshwarlal Agarwal and Rajendra Prasad Babulal Khaitan (the assessee). The Second party (lease giver of the property) was Devendrabhai Mulchanddas Jariwala and Prahladbhai Mulchanddas Jariwala. And as per the said MoU consideration for the said transaction agreed upon was Rs.3,61,00,000/-. On Page no.76 of Annexure-A-4, there was mention of cash receipts out of above mentioned amount and the receiver of the cash as a token of receipt has also signed it. During the assessment proceedings, the assessee did not give any substantial evidence in respect of contention taken by him, nor could prove that the said deal did not materialize in form of satakhat or other documents and hence the Assessing Officer has made the addition amounting to Rs.3,61,00,000/- on account of unaccounted investment. The assessee also submitted before ld CIT(A) that said MoU is not at all relevant in case of assessee. As mentioned by assessing officer, the MoU was between M/s Ketan Textiles and the lease givers. The Assessee, as an individual, had nothing to do with the same. Even if some investment is made, it is up ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan to the firm M/s Ketan Textiles to explain the same. Merely because the assessee was also a small partner in the firm does not mean that the addition can be made in the hands of assessee. Thus, the so called MoU is irrelevant document for assessee, as an individual. The said MoU was not found and seized during the course of search and seizure action in the case of assessee but was seized from a third party. Assessee specifically requested to assessing officer to provide him copy of the said document and explanation of third party in respect of the same. However, assessing officer did not provide the same to assessee and straight away made the addition of whole of amount in the hands of assessee by assuming the same as unexplained investment. The assessee also submitted that the addition is also beyond the scope of section 153A of the Act, as the same is not based on any incriminating material found and seized during the course of search and seizure action in the case of assessee. The Assessee has not entered into any such transaction with above mentioned parties (lease givers) and has never taken any such property on lease and has not made any such payment /investment. There has been no such finding at all in the case of assessee. The Assessee has been informed by the said M/s Ketan Textiles that the above mentioned MoU could not be executed and materialized and no such investment was made by the firm.

After considering the assessee`s submission, the ld CIT(A) observed that the MOU relied by the assessing officer in making this addition i.e. page no. 75 to 79 of Annexure-A-4 is relating to the property at plot no. 141, Umarwada, Surat. In the said MOU, the land in question was to be leased to M/s Ketan Textiles by the Owners Mr Devendrabhai Jariwala and Prahladbhai Jariwala for total ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan consideration of Rs.3,61,00,000/-. Out of this amount, Rs.1,01,00,000/- was paid in cash on 02.05.2016 and 03.05.2016 as evident from the signed receipts enclosed with the MoU. This proves that the total amount of Rs.1,01,00,000/- was paid either by the firm M/s Ketan Textiles or by its partners Mr Nareshkumar B. Agarwal, Mr. Hiren Uttamchandani, Mr. Rajesh Poddar and Mr. Rajendraprasad B. Khetan (assessee). The AR of the assessee submitted that the transaction of lease as per MoU did not materialize ultimately due to the problems in the title of the land and hence, the balance amount as per the MoU was never paid and the amount already paid i.e. Rs.1,01,00,000/- was refunded by the owner/sellers of the land. It was further submitted that Mr. Shanker Uttamchandani, in whose premises the said incriminating document was found had submitted before the assessing officer during the course of his assessment proceedings that the said transaction did not materialize. Therefore, there is no evidence in the incriminating material that the balance amount due of Rs.2,60,00,000/- was paid to the owners/sellers of the land. The assessing officer has not been able to prove in assessment proceedings that such a payment which was shown outstanding in the incriminating material was made by M/s Ketan Textiles or its partners. The assessing officer has not been also able to bring on record whether the transaction of lease as per the MoU was actually executed. Hence, ld CIT(A) was of the view, that the unpaid amount as shown in the MoU cannot be brought to tax either in the hands of M/s. Ketan Textiles or its partners.

The ld CIT(A) further observed that the transaction of land as per MOU did not materialize but the fact remains that the amount of Rs.1,01,00,000/- as per the incriminating material was paid to the ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan owners/sellers of the land either by M/s Ketan Textiles or by its partners. There is evidence in the receipts enclosed with the MOU that the amount of Rs.1,01,00,000/- in cash was paid to the owners in two installments of Rs.51,00,000/- and Rs.50,00,000/- on 02.05.2016 and 03.05.2016 respectively. The assessee has not been able to produce any evidence that such amount of cash was available in the books of M/s Ketan Textiles. The assessee filed a letter on 03.01.2023 with enclosure (being a photocopy) stating that the source of Rs.1,01,00,000/- was cash available with M/s Shree Kuberji Developers which was paid as advance and was received back on 07.05.2016 as transaction did not materialize. This seems to be afterthought because the transaction was to take place in M/s Ketan Textiles, in such case how can the cash available with some other firm with different partners can be the source of the said cash? This contention of the assessee was rejected by ld CIT(A). Therefore, ld CIT(A) noted that the cash in question shall be deemed to have been paid by the partners of M/s Ketan Textiles. The assessee was the partner of said firm having share of 12.5% (others being Mr. Naresh Agarwal (37.5%), Mr. Hiren Uttamchandani (37.5%) and Mr. Rajesh Poddar (12.5%)). Hence, in absence of any details that this amount of Rs.1,01,00,000/-was sourced from M/s Ketan Textiles, it has to be held that it was paid by the partners in the profit sharing ratio of 37.5: 37.5:12.5 :12.5 between Mr. Naresh Kumar Agarwal, Mr. Hiren Uttamchandani, Mr. Rajesh Poddar and the assessee respectively. Accordingly, out of the addition made by the assessing officer of Rs.3,61,00,000/-, the addition to the tune of Rs.12,62,500/- (12.5% of Rs.1,01,00,000) was sustained in the hands of the assessee.

We have considered the submission of both the parties and gone through the orders of Lower Authorities carefully. We have also deliberated on various case laws relied by the AR of the assessee. Before us, the AR of the assessee vehemently submitted that in assessee’s co-owner case, the revenue has accepted similar Long Term Capital Gain in the scrutiny assessment. Copy of the assessment order in respect of two co-owners is placed on record. We have noted that no counter to the submission of the assessee, was made by DR that similar Long Term Capital Gain was accepted in case of co-owner.

The Hon'ble Madras High Court in ICT vs. Kumararani Meenakshi Achi (supra) held that during the same assessment year same quantity of wealth in possession of co-sharer is subjected to a lower rate of taxation, it would be highly improper to burden a similarly situated co-sharer with a higher rate of tax. If such an action on the part of the assessing authorities is sanctioned it would militate against the principle of equality of laws enshrined in Article 14 of the Constitution. By following the same principle, the Co-ordinate Bench of this Tribunal in Chetanbhai Prahladbhai Gami vs. ITO in dated 19.07.2019, the Tribunal granted relief to the assessee holding that while making the assessment of the same property the similar treatment should be granted.

We have noted that in assessee’s co-owner’s case with respect to the property against the sale of which the assessee claimed Long Term Capital Gain, the AO in assessee’s co-owner case in Prabhodhchandra Ambelal Desai allowed the similar Long Term Capital Gain by passing the following order : “3. On perusal of records and details submitted by the assessee it was found that the assessee was co-owner having share of 6.25% in the property sold for Rs.2,00,00,001/- on 19.01.2009 situated at Survey No.86, Lunsikui, Navsari. Value of property as per stamp duty valuation was determined at Rs.4,09,01,000/-. The assessee has not declared capital gain as he has not filed Return of Income for AY 2009-10. The said property was inherited by the assessee. The assessee has submitted valuation report of the property from Govt. Approved Valuer who has arrived value of property at Rs.66,61,020 as on 01.04.1981. The value of the assessee’s share comes to Rs. 4,16,314. Indexed cost as per section 48 of the Act is worked out at Rs.24,22,947/-. As per stamp duty authority the assessee’s share being 6.25% of sale value in the property comes to Rs.25,56,310/-. Thus capital gain comes to Rs. 1,33,363/-, ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan which was taxable in the hands of the assessee. The capital gain of Rs.1,33,363 has now been shown by the assessee in the Return of Income filed in response to notice u/s 148 of the Act. However, the assessee has not declared suo moto Long Term Capital Gain as he has not filed return of Income. The assessee has consciously not filed return of income to avoid payment of tax. Therefore, Penalty proceedings u/s. 271(1)(c) of the Act are initiated on this issue for concealment of income.”

We have noted that identical worded assessment order was passed in other co-owner case i.e. Smt. Prabhaben Harshadrai Desai, relevant part of the assessment order is extracted below; “3. On perusal of records and details submitted by the assessee it was found that the assessee was co-owner having share of 6.25% in the property sold for Rs.2,00,00,001/- on 19.01.2009 situated at Survey No.86, Lunsikui, Navsari. Value of property as per stamp duty valuation was determined at Rs.4,09,01,000/-. The assessee has not declared capital gain as he has not filed Return of Income for AY 2009-10. The said property was inherited by the assessee. The assessee has submitted valuation report of the property from Govt. Approved Valuer who has arrived value of property at Rs.66,61,020 as on 01.04.1981. The value of the assessee’s share comes to Rs. 4,16,314. Indexed cost as per section 48 of the Act is worked out at Rs.24,22,947/-. As per stamp duty authority the assessee’s share being 6.25% of sale value in the property comes to Rs.25,56,310/-. Thus capital gain comes to Rs. 1,33,363/-, which was taxable in the hands of the assessee. The capital gain of Rs.1,33,363 has now been shown by the assessee in the Return of Income filed in response to notice u/s 148 of the Act. However, the assessee has not declared suo moto Long Term Capital Gain as he has not filed return of Income. The assessee has consciously not filed return of income to avoid payment of tax. Therefore, Penalty proceedings u/s. 271(1)(c) of the Act are initiated on this issue for concealment of income.”

In view of the above aforesaid factual and legal discussion and respectfully following the decision of Madras High Court in Kumararani Meenakshi Achi (supra) and decision of Co-ordinate Bench in Prabhodhchandra Ambelal Desai (supra), the revenue cannot treat the assessee in different way, therefore, the addition to the Long Term Capital Gain added by the AO, confirmed by ld.CIT(A) is deleted. In the result the grounds of appeal

We have gone through the scrutiny assessments completed by the assessing officer under section 143(3) r.w.s. 153A of the Act and we note that the proportionate addition for impugned amount of Rs.1,01,00,000/- were not made by the assessing officer, in respect of above partners. The assessee, being co-owner, is also entitled for similar treatment. Hence respectfully following the judgment of the Coordinate Bench, in the case of Late Shri Mohanlal Ambelal Desai,(supra), we delete the addition of Rs.12,62,500/- sustained by ld CIT(A).

In the result, Revenue`s appeal in ITA 65/SRT/2023, for A.Y. 2017-18, is dismissed.

In IT(SS)A No.32/SRT/2023, for AY.2017-18, the assessee has raised the following grounds of appeal: (i).Ground No.1: The Ld. CIT(A) erred in upholding the validity of the unsigned assessment order passed by the Assessing Officer u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961, whereas the impugned unsigned assessment order has been passed and served on the assessee on 16.10.2021 by changing the figure of assessed income at Rs.3,85,77,900/-, as against, originally assessed income of Rs.24,77,900/-, as per computation sheet and demand notice uploaded on 30.09.2021 and is therefore, clearly wrong, invalid and time barred. (ii)Ground No.2: The Ld. CIT(A) erred in sustaining the addition to the tune of Rs.12,62,500/- on the basis of unsigned and irrelevant paper.”

However, ground No. (ii) above, raised by the assessee, on merit, about addition to the tune of Rs.12,62,500/-, in appeal in IT(SS)A No.32/SRT/2023, is allowed, as we have deleted the said addition while adjudicating the revenue`s appeal (vide para 29 of this order).

In the result, appeal filed by the assessee in IT(SS)A No.32/SRT/2023, is partly allowed in above terms.

Now coming to the assessee`s appeal in AY.2017-18, wherein the grounds of appeal

In the result, assessee`s appeal in AY.2017-18, is dismissed.

Now, we shall take Revenue’s appeal for assessment year (AY).2019-2020 and the cross objection raised by the assessee in ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan AY.2019-2020. The summarized grounds of appeal

On appeal, ld CIT(A) deleted the addition, therefore Revenue is in appeal before us and assessee is in cross objection before us, vide CO.No.11/SRT/2023

Learned DR for the Revenue argued that in the transaction of property, the assessee’s share is at Rs.3,84,61,500/- [7,69,23000/2]. Apart from the above it was observed by the assessing officer that payment of Rs.4,21,24,562/-, has been paid by assessee and Shri

On the other hand, ld Counsel for the assessee, pleaded that addition has been made on the basis of two rough loose papers stated to be seized from one Shri Jayantibhai Bhulabhai Patel (JBP), by presumptively relating the same with the assessee. These loose papers are pasted on Page No. '3'(Para '6') of the unsigned assessment order served on 16/10/2021. From the very face of these loose papers, it is clear that the same are mere rough papers containing some rough jottings/ calculations without any details, descriptions and meaningful narrations. These are clearly dumb documents. In these dump documents, there is no mention of any property, transaction or purpose to which these rough jottings/ calculations relate. There is no mention of any date(s) or period. There are no details of the parties to or from whom the alleged payments are made/received. At one place the word 'Khetanji' is mentioned in Gujarati Language and at other place 'R.K.' is mentioned, thousands of persons with the surname "Khetan' & there are tens of thousands of abbreviated name as "R.K.' in the city. As per settled law such rough loose papers and dumb documents have no evidentiary value and no addition can be made on the basis of same. The ld Counsel also relied on following case laws: (i) COMMON CAUSE vs. UNION OF INDIA - (2017) 77taxmann.com 245 (SC)

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. The ld CIT(A) observed that assessing officer has not been able to identify the property which has been purchased. The contention of the assessee before the assessing officer as well as during the Appellate Proceedings was that the assessee never purchased any immovable property jointly with Mr. Sunny J. Patel and Mr. Vinod Goswami. The unexplained investment in any immovable property can be brought to tax only when the immovable property has been identified to have been purchased. Without identifying the property if the addition is made it is only on the basis of presumption that the assessee has purchased the immovable property. During the appellate proceedings, it was pleaded by the assessee, that the incriminating material relied upon by the assessing officer was not found in the premises of the assessee but was found in the premises of third party and therefore, the addition made in the order u/s 153A of the Act was beyond the scope of the said section. During the appellate proceedings, the assessee placed reliance on the judgment of Hon'ble Gujarat High Court in the case of Vallamji R. Patel TA No. 1813 of 2006 and of ITAT, Ahmedabad in the case of Prarthana Construction Pvt. Ltd. Vs DCIT 70 TTJ 122 (Ahmedabad).

We note that Assessing Office did not make any inquiry from buyers of flat in respect of actual prices paid by them. He also did not make any other inquiry in order to corroborate his conclusion. There is no incriminating evidence to show that the assessee has sold the flats at a higher rate. we note that the impounded loose sheet can at the most be termed as “dumb document” which did not contain full details about the dates, and its contents were not corroborated by any material and could not relied upon and made the basis of addition. Therefore, we observe that ld CIT(A) has rightly held that the jottings on the loose papers found have not been corroborated with any other evidence or the property purchased or invested by the assessee. Therefore, the jottings made without identification of any asset or investment cannot be the basis for making the addition of unexplained investment as done by the assessing officer. Therefore, ld CIT(A) deleted the addition of Rs.2,10,62,281/-. We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan conclusion reached by ld CIT(A).That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.

In the result, ground No. 5 raised by the Revenue in IT(SS)A No. 66/SRT/2023, for A.Y. 2019-2020, is dismissed.

We note that identical ground no.5 in AY.2020-21 in IT(SS) A No.67/SRT/2023, raised by the Revenue, is also dismissed with similar observation.

In the result, ground no.5 in AY.2020-21 in IT(SS) A No.67/SRT/2023, raised by the Revenue, is dismissed.

Coming to the assessee`s Cross Objection No. 11/SRT/2023, for assessment year 2019-20, therein the assessee has raised the technical issue stating that ld. CIT(A) erred in upholding the validity of the unsigned assessment order passed by Assessing Officer, which ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan was served on the assessee on 16.10.2021 by changing the figure of assessed income at Rs.3,07,81,040/-, as originally assessed income of Rs.36,88,360/-, as per computation sheet and demand notice uploaded on 30.09.2021, therefore, assessment order is invalid and time barred, hence, such order may be quashed. Since we have upheld the order of ld CIT(A) and dismissed the appeal of the Revenue, therefore, this technical ground raised by the assessee is rendered academic and infructuous, hence does not require adjudication.

In the result, Assessee`s Cross Objection No. 11/SRT/2023, for assessment year 2019-20, is dismissed, being infructuous.

Now, we shall take Revenue’s appeal for AY.2020-21 in IT(ss)A No.67/SRT/2023 and Assessee’s cross objection No.12/SRT/2023 for AY.2020-21, wherein the grounds of appeal raised by the Revenue and grounds of appeal raised by the assessee in its Cross Objections are summarized, which are reproduced below: (1) IT(SS)A No.67/SRT/2023 (Revenue Appeal) for AY.2020-21: (i).Ground No. 1 to 4 raised by the Revenue relates to deleting addition of Rs.3,15,15,350/- made by the Assessing Officer on account of unexplained investment in land at Umarwada. In these grounds, the grievance of the Revenue is that ld. CIT(A) ignored the incriminating details and documents, two new partners were entered with 2.5% each profit sharing ratio and the contribution of assessee other than banking channel was worked out at Rs.3,15,15,350/-. Since, the assessee failed to explain the contents of the seized paper, hence provisions of section 132(4A) and 292C of the Act are applicable to the assessee. (ii).Ground No.5 relates to deleting addition of Rs.60,30,000/-, made by the assessing officer towards unexplained gift. (2)Assessee’s CO No.12/SRT/2023 for AY.2020-21: (i) The ld. CIT(A) erred in upholding the validity of the assessment order passed by Assessing Officer u/s 143 r.w.s. 153A of the Act.”

On the other hand, ld DR for the Revenue, pleaded that the said image/paper are found at the residence of assessee during the search proceedings which proves beyond doubt that the assessee had major role in the said land transaction. Hence, the authentication of the said paper cannot be denied. From the details available with AO it is ascertain that the assessee had made huge investment in land in Surat

We heard both sides in detail and also perused the records of the case including the paper book filed by the assessee. The ld CIT(A) observed that the land was owned by the firm M/s Shree Kuberji Enterprises. The basis of addition of the assessing officer is the partnership amendment agreement dated 01. 02.2020, wherein the son of the assessee, Shri Nitesh R Khetan and Shri Vinod Goswami were to be admitted, as new partners in firm M/s Shree Kuberji Enterprises. The evidence for the same was two loose papers (page no. 8 and 11 of annexure A-l) found from the residence of Shri Vinod Goswami containing the details of the offer so received. On perusal of the partnership amendment agreement, as pasted on page no. 3 to 9 of the ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan assessment order, it is evident that the same is not signed by one of the existing partners, namely Shri Natwarbhai M. Harlalka and by the incoming partner Shri Nitesh R. Khetan. This shows that the said agreement was not signed by all the parties and did not become final. It is submitted by the assessee that as he or his son Mr. Nitesh Khetan never signed the said agreement, the contents of the same are not applicable to either the assessee or his son. During assessment proceeding, assessee also requested the assessing officer to verify the fact of his son's not joining the said firm from the ITBA and PAN data base of the said firm, latest return filed by the said firm, registrar of firms as also from the said firm and its partners. It was submitted during the appellate proceedings that there is no mention of any adverse finding by the assessing officer in this regard. Thus, nothing has been brought on record by the assessing officer to prove that the assessee or his son had in fact joined the said firm and became its partner. This being the fact of the case that the partnership firm was never reconstituted as envisaged in the copy of the partnership amendment agreement found, the working of the two loose papers referred by the assessing officer without corroboration with the actual facts cannot be fully relied upon for making an addition. Undisputedly, these loose papers contained the details of the offer received by the assessee/his son to become partner into the said firm. When the offer itself was ultimately not materialized, then the addition on the basis of these loose papers containing the details of the offer cannot be sustained.

Therefore, ld CIT(A) observed that there is no material with the assessing officer relating to unaccounted investment/ contribution by ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan the assessee for becoming partner of the said firm. The document relied upon being the partnership amendment agreement dated 01.02.2020 was not executed and cannot be the basis for making the addition. As the revised constitution of the firm was never given effect to, the loose papers No. 8 and 11 of annexure A-1, cannot be held to be having necessary evidentiary value for making addition as done by the assessing officer. There is no mention of finding of any material showing that such unaccounted contribution / Investment was in fact made by the assessee or his son.

The ld CIT(A) also relied on the judgment of Hon'ble Supreme Court in the case of Common Cause vs. Union of India, 77 Taxmann.com 245 and on the judgment of Hon'ble ITAT, Ahmedabad in the case of Nishant Construction Pvt. Ltd. Vs. ACIT - holding that the loose papers by themselves have no evidentiary value and addition cannot be made merely on the basis of jottings on the loose papers in the absence of any other corroborative evidence. The said case of Hon'ble ITAT, Ahmedabad bench has been upheld by Hon'ble Gujarat High Court in the case reported at (2019) 101 Taxmann.com 180 (Gujarat). Relying on the above judicial pronouncement, it was observed that jottings on loose sheets of papers found as page no. 8 and 11 of Annexure A-l containing the details of offer received have no evidentiary value, more so when it is a fact that the said offer was not ultimately accepted and materialized as the assessee or his son did not become partner of the said firm. The assessee also relied upon the decision of Hon'ble Gujarat High Court in the case of Chintan Jadavbhai J. Patel vs. ITO 404 ITR 76 wherein it was held that the unsigned and unexecuted document does not have ITA.142/SRT/2023, IT(SS)A.32, 65 – 67/SRT/2023 & Cos. 11 -12/SRT/2023 Rajendraprasad Babulal Khetan any evidentiary value and no action can be taken on the basis of such unsigned document. In view of the law laid down in above case laws, the addition made just on the basis of two loose sheets of papers containing the details of offer received but cannot be sustained in the absence of any other corroborative. In view of above facts, ld CIT(A) held that addition made towards the unaccounted/ unexplained investment/ contribution for becoming partner into the said Firm M/s. Shree Kuberji Enterprise and its land cannot be sustained. The incriminating material relied upon by the assessing officer do not suggest any contribution/ investment actually made by the assessee. Therefore, the addition made by the assessing officer of Rs.3,15,15,350/- was deleted by ld CIT(A). We have gone through the above findings of ld CIT(A) and noted that conclusion reached by ld CIT(A) is correct. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on this addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed.