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Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE – VIRTUAL COURT
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
This appeal by the assessee is directed against the order passed by the CIT(A)-2, Aurangabad on 06-06-2016 in relation to the assessment year 2011-12.
The only issue raised in this appeal is against the confirmation of the addition of Rs.38,00,000/- as unaccounted investment in land.
Briefly stated, the facts of the case are that the assessee is engaged in the business as civil contractor. He is also involved in sale and purchase of plots. A survey action was taken against the assessee sometime in August 2013, during the course of which the assessee disclosed certain income. On this basis, the Assessing Officer (AO) initiated re-assessment proceedings. The assessee had purchased a piece of land at Zone No.12, Gat No.122 at Village Harangal in the joint name with Mr. Nitin Navandar for a sum of Rs.45.00 lakh and the registered sale deed was executed on 02-08-2010. An agreement dated 17-06-2010 was found during the course of survey, which indicated the purchase price of the above mentioned land at Rs.1.21 crore, for which a registered sale deed was executed with consideration of Rs.45 lakh only. Thus, the AO inferred that the transaction was actually finalized for a consideration of Rs.1.21 crore and a sum of Rs.76.00 lakh was given as on-money which was unexplained investment. The assessee’s one half share of Rs.38.00 lakh was added as ‘investment from undisclosed sources’. The ld. CIT(A) upheld the assessment order on this score, against which the assessee has come up in appeal before the Tribunal.
We have heard both the sides through Virtual Court and gone through the relevant material on record. There is no dispute that the assessee purchased the land jointly with Mr. Nitin Navandar for which a registered sale deed was executed on 02-08-2010 for a sum of Rs.45 lakh. As against that, an agreement dated 17-06-2010 indicating sale price of Rs.1.21 crore was found during the course of survey. Under such circumstances, we need to decide as to which out of these two documents viz., the Agreement dated 17-06-2010 or the registered sale deed dated 02-08-2010, should be acted upon.
A copy of the Agreement is available at page 91 onwards of the paper book. It has been executed on a stamp paper of Rs.100/-.
This Agreement records names of 15 persons as sellers and 2 persons, including the assessee, as buyers. As against that, it is signed by only one of the sellers and only one of the buyers. The assessee emphasized before the authorities below that the deal was actually finalized with sale consideration at Rs.45.00 lakh because it was realized that the approach roads to the plots were not appropriate and the earlier agreed sale consideration was on higher side. It was also put forth that the Agreement found during the course of survey was meant only for market purpose to show the higher sale consideration to the prospective buyers after plotting. During the course of survey when the assessee was confronted with the agreement dated 17-06-2010, he categorically stated in response to question no.34 that the Agreement entered for Rs.1.21 crore did not materialize due to lack of amenities such as approach roads etc.
Further, in response to question no.156, the assessee submitted that he purchased the said land along with Mr. Nitin Navandar for Rs.45.00 lakh only which was recorded in the books of account “as the approach road was not proper the value of the said property decided at lower rate, i.e. instead of Rs.1.21 crore to 45 lacs”. This shows that the assessee firmly denied the reality and genuineness of the Agreement dated 17-06-2010 during the course of survey itself.
Despite that, the AO did not record statement of any of the buyers or witnesses to ascertain the veracity of the assessee’s version. He simply kept quiet and did not consider it prudent to examine the witnesses.
On the other hand, the registered sale deed is dated 02-08-2010, whose copy is available at page 98 onwards of the paper book. This sale deed is duly signed by all the 15 sellers and 2 buyers. It is this sale deed which was actually registered showing sale consideration at Rs.45.00 lakh and recorded in the books of the assessee accordingly.
Thus, it is seen that the Agreement dated 17-06-2010 though mentions names of 15 persons as sellers but is actually signed by only one person. Similarly, it records 2 persons as buyers but has been signed only by one buyer. Further, this is not a registered document. Thus, on one hand, there is the Agreement which is partly signed by the parties and whose contents have not been verified by the AO and on the other there is a registered sale deed duly signed by all the buyers as well as sellers indicating the sale consideration of Rs.45.00 lakh. Another factor which weighs in accepting the registered sale deed over the Agreement is that the stamp value of the plot of land purchased by the assessee, as recorded in the impugned order, is Rs.12.09 lakh, which is far away from the value given in the Agreement. It is further relevant to note that there are two buyers of the plot of land viz., the assessee and Mr. Nitin Navandar. The ld. DR was directed to give the status of the assessment in the case of Mr. Nitin Navandar for ascertaining if similar addition was made in his hands as well. On the next date of hearing, the ld. DR submitted that no addition has been made in the hands of Mr. Nitin Navandar.
On a totality of the facts, it is clear that the registered sale deed needs to be acted upon in preference to the Agreement dated 17-06-2010.
We are, therefore, satisfied that the plot was purchased for Rs.45.00 lakh as given under the registered sale deed. Thus, no addition of Rs.38.00 lakh made in the hands of the assessee is called for. We, therefore, order to delete the same.
In the result, the appeal is allowed. Order pronounced in the Open Court on 05th August, 2021.