PER ANIL CHATURVEDI, AM :

1. The appeal in ITA.No.1208/PUN/2010 filed by assessee and the appeal in ITA No.1213/PUN/2010 filed by Revenue emanate out of a consolidated order of Commissioner of Income-Tax (A) V, Pune dt.30.06.2010 for A.Y. 2006-07. The appeal in ITA No.2141/PUN/2013 filed by assessee emanate out of the order of Commissioner of Income-Tax (A) II, Pune dt.03.09.2013 for A.Y. for A.Y. 2006-07.

2. Though the present appeals are of two different assessees but since the major issue involved in both their appeals are interconnected (being the taxability of gains arising on sale of land in which of the assessees hands) for the sake of convenience, both the appeals are disposed of by a consolidated order. We however proceed with narrating the facts in the case of Shri Ganpat Murkute in ITA No 2141/Pun/2013.

3. The relevant facts as culled out from the material on record in ITA No.2141/PUN/2013 are as under :-   / Date of Hearing : 07.11.2017   / Date of Pronouncement: 02.02.2018 Assessee is an individual stated to be having income from business, capital gains, agricultural income and other sources. Assessee filed his return of income for A.Y. 2006-07 declaring total income of Rs.48,80,420/-. Notice u/s 148 of the dt.30.03.2011 was served on assessee on 31.03.2011, calling the assessee for filing the return of income. AO noted that further opportunity of filing of return of income along with reasons for re-opening, a notice u/s 143(2) and 142(1) of the were served on assessee on

19.10.2011. Thereafter, assessment was framed u/s 143(3) r.w.s. 147 of the vide order dt.23.12.2011 and the total income was determined at Rs.2,35,54,420/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.03.09.2013 (in appeal No.PN/CIT(A)-II/ACIT Cir-4/299/2011-

12) dismissed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), assessee has raised the following grounds :

The appellant would like to object the impugned order of the CIT (Appeals) on following grounds of appeal which are raised without prejudice to each other:

1. The learned CIT (Appeals), Pune has erred in law and on facts in confirming the additions made by the AO.

2. The learned CIT (Appeals), Pune has erred in law and on facts in confirming action of the AO of taxing entire income on transfer of land in the hands of the appellant without appreciating the following important facts: a. The appellant had share in the property sold at Mahalunge. b. While completing the assessment of Mr. Mahendra Vitkar, the AO has held that the property is jointly owned by the appellant and Mr. Mahendra Vitkar. c. Addition is made in the hands of Mr. Mahendra Vitkar u/s. 143(3) for A. Y. 2006-07, after deducting the capital gain disclosed by the appellant. d. The addition to the total income of the appellant is made only on assumption and presumption without pointing out any material or corroborative evidence.

3. The Learned CIT(Appeals), Pune has erred in law and on facts in confirming the addition by forming an incorrect opinion on following facts : a. That the appellant was acting on behalf of Shri Jain and the appellant was solely responsible for entire transaction of land at Mahalunge. b. That the appellant has accepted that Mr.Vitkar was not directly involved in the transaction. c. That the appellant is sole beneficiary of the transactions of land at Mahalunge.

4. The learned CIT (Appeals), Pune has erred in law and on facts in confirming the action of the AO of disallowing the expenditure incurred towards development of the property amounting to Rs. 1954000/- and commission of Rs.3000000/- exclusively on assumption, and presumption basis by not considering the supporting bills and vouchers evidences submitted during the course of hearing and without assigning any valid reason for the same.

5. The learned CIT (Appeals), Pune has erred in confirming the action of the AO in levying interest under section 234B and 234C without considering the following facts: a. That interest was levied without giving any opportunity of hearing and without passing any speaking order at all to that effect and that the AO had erred in wrongly computing the same by applying erroneous rate. b. That the interest u/s. 234B and 234C is mandatory in the sense that it cannot be waived or reduced by the authorities.

6. Without prejudice, to the above grounds no. 1 to 4, the learned CIT (A), Pune has erred in not appreciating the fact that if it is held that the transaction was an adventure in the nature of trade then the .income from the same had to be assessed in the status of AOP since all the conditions to constitute the AOP are been fulfilled as laid down in the decision of Honble Supreme Court in the case of CIT vs. Indira Balkrishnan 39 ITR 546 [LQ/SC/1960/119] .

7. The appellant may kindly be permitted to add to or alter any of grounds of appeal, if deemed necessary.

4. Subsequently, assessee vide letter dated 16.2.2017 has raised modified additional grounds which reads as under:

1. On the facts and in the circumstances of the case and in law, the Assessment order passed by the Assessing Officer in this case was without jurisdiction, ab-initio void and illegal.

2. On the facts and in the circumstances of the case and in law, the Assessing Officer had no faithful reasons to believe that the income had escaped assessment in this case.

3. On the facts and in the circumstances of the case and in law, the re-opening of the assessment and issue of notice u/s 148 of the Income Tax Act, was without jurisdiction ab-initio void and illegal

5. With respect to the admission of additional grounds now raised before us, Ld AR submitted that the additional grounds raised are purely on question of law and no new facts are required to be brought on record and therefore, deserves to be admitted and for which reliance was placed on the decision in the cases of (i) National Thermal Power Corporation V. CIT (229 ITR 383 [LQ/SC/1996/2109] (SC), (ii) Jute Corporation of India Ltd Vs. CIT reported in 187 ITR 688 [LQ/SC/1990/495] (SC) and Ahmedabad Electricity Co., Ltd., Vs. CIT reported in 199 ITR 351 [LQ/BomHC/1992/314] (Bom) (FB).

6. On the issue of admission of additional grounds raised by the Assessee, in view of the ratio laid down by the Apex Court in the case of National Thermal (supra), we admit the additional grounds of appeal filed by the Assessee for adjudication.

7. Before us, Ld.A.R. submitted that he does not wish to press ground No.6 and therefore the same is dismissed as not pressed. Ground No.5 is with respect to the charging of interest, which is consequential in nature and therefore requires no separate adjudication. The other grounds raised by the assessee being inter-connected are considered together.

8. The reasons for reopening the assessment in the case of Assessee as noted in the assessment order are that the Assessee had jointly purchased the land bearing survey no.43, Hissa No.2/1, and 2/2 located at village Mahalunge, Haveli Taluka, admeasuring 2 hector 63 Are and 2 hector and 63 Are respectively for a consideration of Rs.1,10,00,000/- each with Shri Mahendra R Vitkar (M.R. Vitkar). The assessee along with his co-owner could not honour the payments for purchase of land as per the agreement and hence, after making part payment (which was solely contributed by the assessee), the assessee had to directly sell the two pieces of land to M/s. Riverview Properties Pvt. Ltd., for a consideration of Rs.4,85,75,000/- in the financial year relevant to A.Y. 2006-07. It was noted that in the return of income, the assessee had shown sale consideration of land of Rs.1,42,87,500/- and after claiming deduction on account of cost of acquisition, he had offered net taxable short term capital gain of Rs.48,23,210/- only.

9. AO has noted that during the assessment proceedings of Shri Mahendra Vitkar for A.Y. 2006-07, Shri Vitkar was asked to explain the source for investment in the land. It was submitted by Shri Vitkar that he had not made any investments in the above properties. It was further submitted that for the purpose of selling the two plots of land, he was made to sign power of attorney in favour of Shri Ganpat Mukundrao Murkute. It was further submitted by him that he was forced to open a bank account, his signatures were obtained on blank cheques and the cheque book with his signatures were kept in the custody of Mr. Murkute. In the assessment proceedings of Shri Mahendra Vitkar, he thus denied of making the investment in the properties.

10. In the reasons recorded for re-opening in the case of the Assessee, it was noted by the AO that since the entire investment was made by the assessee, the entire amount of sale consideration of Rs.4,85,75,000/- received on transfer of land to M/s. Riverview Properties Pvt. Ltd., and the consequent short term capital gains, should have been offered by the Assessee to tax. Since in the return of income, the assessee had shown gross sale consideration received only to the extent of Rs.1,42,87,500/-, AO had reason to believe that there was an escapement of income of Rs.3,42,87,500/-. Accordingly, the case was re-opened.

11. During the course of re-assessment proceedings on the issue of capital gains, assessee inter-alia submitted that the two pieces of land were purchased from M/s. Abhi Agro Trust and M/s. Sangram Agro Trust vide separate agreements dt.20.05.2005 for Rs.1,10,00,000/- each and the assessees share was half in the land. Out of the said consideration, assessee had paid Rs.40,00,000/- (Rs 20,00,000/- each to M/s. Abhi Agro Trust and M/s. Sangram Agro Trust) and had incurred Rs.5,10,290/- towards his share of registration and stamp duty charges. It was further submitted that after the acquisition of land, assessee had incurred Rs.19,54,000/- towards the development of land and had agreed to pay Mr Naresh Kamat Rs 30,00,000/- as charges for arranging the entire purchase deed. Later on, assessee had agreed to sell these lands to Gurumukh Sukhwani and Ghansyam Sukhwani and had received Rs 20 lakh through cheque as earnest money towards the sale of proposed land. Later on since Mr. Sukhwani could not complete the transaction, the proposed land deal was cancelled. Thereafter, assessee entered into agreement of sale with M/s.Riverview Properties Pvt. Ltd., for sale of these lands for a total consideration of Rs.4,85,75,000/-. It was submitted that M/s. Riverview Properties Pvt. Ltd., had paid Rs.1,20,00,000/- to the landowners (Rs 1,00,00,000/- to Abhi Agro Trust/Sangram Agro Trust) and Rs.20,00,000/- to Gurumukh Sukhwani, intervener. The assessee therefore submitted that he has considered his share of sale consideration at Rs 2,42,87,500 and after taking into consideration the costs incurred, had offered to tax the short term capital gains of Rs.48,23,210/- earned by him. The submission of the assessee was not found acceptable to the AO. AO noted that no supporting proof was filed by the assessee in support of his claim to have spend Rs.19,54,000/- as development expenses nor was there any proof of commission of Rs.30,00,000/- being paid to Shri Naresh Kamat for the execution of sale deed. AO also noted that the commission of Rs.30,00,000/- as said to have been paid to Naresh Kamat, which amounts to 6% of the total consideration, was quite unnatural compared to the market rates of 2 to 3%. AO further noted that during the assessment proceedings of Shri Mahendra Vitkar, it was submitted by Shri Vitkar that he had not made any investments in the property, for purchase of property and that he was forced to sign on power of attorney in favour of assessee, he was forced to open a bank account and his signatures were obtained on blank cheques, and the cheques were kept with the assessee. AO therefore held that the entire capital gain on sale of land was of the assessee. He accordingly worked out the capital gain after considering the sale consideration on transfer of land of Rs.4,85,75,000/- to have been received by the assessee and thus made an addition of Rs.2,35,54,470/- on account of net short term capital gains. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO by holding as under :

3.4 The submission made by the appellant has been considered and. material on record perused. The appellant along with Shri. Mahendra Vitkar jointly purchased and sold the land located at S. No.43 Hissa No 2/1, 2/2 at village Mahalunge. The assessment proceedings in the case of Shri Vitkar has been completed whereby the addition towards his share of the sales consideration computed as short term capital gain. The appellant though had jointly purchased the aforesaid land from Abhi Agro Trust and Sangram Agro Trust for a consideration of Rs. 1.10 crores each vide two separate agreements dated 20-05-2005, however, out of the total payment due of Rs. 2.20 crores, the appellant paid Rs. 20 lacs each to the two trust and no contribution was made by Shri. Vitkar. Subsequently, the appellant agreed to sell the aforesaid lands to Gurmukh Sukhwani and Ghanshyam Sukhwani and also received Rs. 20 lacs on 10-06-2005 as earnest money towards the proposed sale. However, the said sale could not be completed and hence was cancelled. Thereafter, the appellant entered into an agreement of sale with M/s. Riverview Properties Pvt. Ltd. vide sale deed dated 28-03-2006 for a total consideration of Rs.4,85,75,000/-. The appellant thus offered share of the sale consideration of Rs. 2,42,84,500/- for the purpose of computing short term capital gain and after reducing the cost of acquisition and improvement and development cost along with the payment of commission computed the net short term capital gain at Rs. 48,23,210/- which was offered to tax. The Assessing Officer found that during the assessment proceedings of the other co-owner /partner Shri. Mahendra Vitkar for A.Y. 2006-07, Shri Vitkar in his reply submitted on 29-12-2008 had stated that he had not made any investment in the property i.e. the two lands at Mahalunge and that he was made to sign the power of attorney in favour of the appellant Shri Ganpat Murkute for the purpose of selling the two plots. It has also been submitted that Shri Vitkar was forced to open a bank account and his signature obtained on the cheques and the cheque book kept in the custody of the appellant. Thus the Assessing Officer based on the denial made by Shri Vitkar of his involvement in the entire transaction and also the denial to have made any investment held that the entire investment was been made by the appellant. The appellant has heavily relied on the assessment order completed in the case of Shri Vitkar for A.Y. 2006- 07 and. also the order of the CIT(A)-V to substantiate the fact that the transaction was made so as to justify the claim that his share is only half of the total transaction. The appellant has also filed the statement recorded u/s.131 of the concerned persons during the assessment proceedings of Shri Vitkar and also the copies of the cross examination of the appellant by Shri Vitkar. In the statement recorded u/s 131 of the appellant it is noted that the appellant Shri Murkute has clearly stated that he was introduced to Shri Vitkar by a friend Shri Sanjay Jain and that the aforesaid lands purchased jointly along with Shri Vitkar. The appellant also denied to have asked Shri Vitkar to open any account or had obtained any signature on the cheques of the bank as stated by Shri Vitkar in his statement/submission. It was explained by the appellant that the cheques issued by Shri Vitkar had bounced and hence he had made the initial payment for the purchase of the two lands. It was also stated that the share of profit in his account was 50% and for the remaining 50% Shri Vitkar had to offer the gains as the sale proceeds of the two properties had been given by way of cheques equally between them which indicated that both the persons were equal share holders in the transaction. The appellant, however, in the submission made before the AO during the assessment proceedings vide letter dated 15-12-2011 has categorically stated that he had jointly along with the advocate Shri Sanjay Jain represented by his employee Shri Mahendra Vitkar jointly dealt in land transaction at Mahalunge. The appellant also explained that Shri. Vitkar is merely an employee of Shri. Sanjay Jain and it was his usual trade practice of Shri Jain to carry out land transaction in the name of his employees or third parties so as to avoid payment of taxes. The appellant has also reiterated time and again that the entire land deal was carried out exclusively at the instructions of Shri Sanjay Jain under his guidelines and supervision and the real beneficiary in the said land deal is advocate Sanjay Jain and that Shri Vitkar has only been working for and on behalf of Shri Jain. Thus the statement recorded u/s 131 of the appellant during the assessment proceedings of Shri Vitkar and the submission filed vide letter dated 15-12-2011 during his re-assessment proceedings contradict each other. Moreover, the contention raised by Shri. Vitkar also gets authenticated by the aforesaid submission made by Shri. Murkute during the course of the reassessment proceedings. In the aforesaid submission, the appellant has held Shri. Sanjay Jain to be the real beneficiary of the entire transaction and not Shri. M.R. Vitkar as had been held by him both during his statement recorded u/s 131 on 17-12-2008 and also his cross examination by Shri. Vitkar on 26-03-2010. Further it is noticed that Shri Sanjay Jain in his statement u/s 131 recorded on 16-12-2008 had stated that he knew Shri Vitkar as a broker indulging in purchase/sale of land for clients and beyond that he did not have any official or business dealings. Shri San]ay Jain had also denied of giving monthly commission of Rs.15,000/- to Shri Vitkar and also the aforesaid transactions with respect to the Mahalunge and Shri Jain also denied the deposit of cash in a/c No 318 of Jan Seva Sahakari Bank, MIDC Bhosari as stated by Vitkar that the cash deposited in the bank was by Shri Jain, which was disbelieved by the AO at that time. Thus, Shri Sanjay Jain had completely denied his involvement with Shri Vitkar or to have indulged any such transaction as stated by him. In the statement recorded u/s 131 of Shri Vitkar it becomes quite apparent on its perusal that he was acting on behalf of Shri Jain and the entire transaction relating to the two Mahlalunge lands was carried out by the appellant, Shri. Ganpat Murkute. Thus if the entire fact are taken into consideration including the submission made by the appellant dated 15-12-2011 it prima facie points out to the fact that Shri. Vitkar was just a name lender for the transaction and the entire exercise was carried out by the appellant. The submission made by the appellant also clearly indicates that the reliance placed by him on the assessment order passed and the appellate order in the case of Shri Vitkar do not justify the claim made by him. The facts brought on record now during the reassessment proceedings by the appellant, however, were not available with the AO assessing Shri Vitkar as well as with the Ld. CIT (A)-V. The Assessing Officer in the present case has not acted on .presumption and assumption as the material on record clearly point out .to the fact that the appellant was solely responsible for the entire transactions as all the evidences brought on record indicate that the appellant was-instrumental in carrying out the transactions in consultation with Shri Jain. The appellant has admittedly indicated that Shri Vitkar was not directly involved in the transaction which has now been accepted by the appellant. The burden of proof in income tax matters on question of fact ordinarily lies on the assessee since he alone has access to the information relevant to his assessment. Tax liability in the case of suspicious transactions to be assessed on the basis of the material available on record, surrounding circumstances, human conduct, and preponderance of probability and nature of information/evidence available on record. The statement given u/s.131 during the assessment proceedings of Shri Vitkar and the subsequent submission of the appellant and the evidence on record taken in totality on the facts and circumstances of the matter do indicate the appellant to have carried out the transaction and being its sole beneficiary and hence the Assessing Officer has rightly taxed the properties in the hands of the appellant in respect of the aforesaid said land transactions. Thus the contention raised by the appellant that the addition of Rs.1,87,31,210/- made by the A.O. on account of incorrect computation of short-term capital gain is found to be not tenable and the ground of appeal raised in this regard is liable to be dismissed.

3.5 So far as the contention raised by the appellant regarding the allowability of the expenses on account of evelopment/improvement of land amounting to Rs.19.54 lacs and Rs.30 lacs on account of commission payment for the sale of land is concerned it is noticed that the appellant has not been able to substantiate the claim made by him in this regard. The payments for the purchase of the aforesaid land at Mahalunge was made by the appellant to the extent of Rs. 40 lacs as against the cost of Rs. 2.20 crores and the said land been purchased vide two agreement dated 20.05.2005 and most of the expenditure on improvement has been-incurred by the appellant within a period of one month purchase which is nearly half of the purchase price given by the appellant. Moreover, the appellant has not been able to substantiate the expenditure incurred on account of development/improvement of the land within such a short period by way of supporting and cogent evidences. The appellant has not able to prove the contention raised during the appellate proceedings and has only reiterated the contention raised before the Assessing Officer. In view .of the above fact the claim of the expenses on account of improvement of land of Rs.19.54 lacs disallowed by the Assessing Officer is liable to be upheld and the ground of appeal raised in this regard is liable to be dismissed.

3.6 So far as the claim of payment of commission of Rs.30 lacs to Nilesh Kamat for the execution of the sale deed is concerned, the Assessing Officer has disallowed the aforesaid claim because of the fact that no confirmation from the aforesaid person was produced and the appellant had not been able to explain the circumstances under which the said payment of commission at such a high rate was made. During the appellate proceedings also the appellant has not been able to justify the payment of commission to the extent of Rs.30 lacs on a total receipt of Rs.2.85 crores which was the stated net sales considered received by the appellant. The appellant has not been able to justify the role of Shri. Kamat to whom the commission of Rs.30 lacs has been paid. It is also not clear nor any material has been brought on record by the appellant that the said receipt of commission has been offered for taxation by Shri. Kamat who is stated to be an employee of a private company. The Assessing Officer was also prevented from carrying out necessary verification so as to enquire into the genuineness of the said payment as the necessary address or any details have not been provided to him by the appellant. The fact and circumstances brought on record do not indicate the necessity of bringing Shri Kamat when the appellant and the related person themselves were land dealers and agent and expert in their field of land dealings. The appellant has not furnished any material so as to justify the claim as the burden lies on the appellant to substantiate factum of expenditure and also its permissibility. In the absence of the details of the services rendered in respect of Shri Kamat to whom commission at an excessive rate was paid and also the absence of any confirmation in this regard, the Assessing Officer has rightly disallowed the claim made by the appellant and hence the ground of appeal raised by the appellant in this regard is liable to be dismissed.

Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us.

12. Before us, with respect to the admission of additional grounds of appeal, which is with respect to allowing the re-opening of assessment, it was submitted that the re-opening of assessment has been arrived on the basis of assessment order passed in the case of Shri Mahendra Vitkar u/s 143(3) of the order dt.30.06.2010 for A.Y. 2006-07. He submitted that in the said assessment order, half share of capital gains earned on sale of land to M/s. Riverview Properties Pvt. Ltd., has been held to be taxable in the hands of Mahendra Vitkar whereas in case of assessee, the assessment has been re-opened on the ground that the entire capital gains is taxable in the hands of the assessee. It was submitted that when once half share of the capital gains has been held to be taxable in the hands of Mahendra Vitkar, at the same time, the same income cannot be held to be taxable in the hands of assessee. It was therefore submitted that there can be no reason on the part of the AO to form a belief that entire capital gains from sale of land to M/s. Riverview Properties Pvt. Ltd., was taxable in the hands of the assessee. It was further submitted that there is a massive contradiction in the findings in the assessment order passed in the case of Mahendra Vitkar and the reasons recorded by the AO for issuing notice u/s 148 of the in the case of assessee. He further submitted that there was no nexus between the formation of a belief that the income has escaped and the reason recorded of the belief held by the AO cannot be said to be in good faith and the belief of the AO is contrary to the findings of AO in the assessment order in the case of Mahendra Vitkar. Assessee also placed reliance in the cases of (i) Avtec Limited reported in 370 ITR 0611 (Del), (ii) Rajesh Jhaveri Stock Brokers (P) Ltd., reported in 284 ITR 0593 (Guj) and (iii) Adani Exports reported in 240 ITR 224 (Guj).

13. On the merits of the addition with respect to the other grounds before us, Ld.A.R. reiterated the submissions made before AO and Ld.CIT(A) and further submitted that assessee had acquired two pieces of land for Rs.1,10,00,000/- each jointly with Mahendra R. Vitkar from M/s. Abhi Agro Trust and M/s. Sangram Agro Trust against which, post dated cheques were issued from the bank account of Mahendra R Vitkar. Ld.A.R. submitted that since the post dated cheques issued from the account of Mahendra Vitkar got dishonored, assessee had paid Rs.20 lakhs each to M/s. Abhi Agro Tust and M/s. Sangram Agro Trust from his bank account maintained with United Western Bank. He further submitted that the mutation of land had taken place in the name of assessee and the name of Mahendra Vitkar was entered in 7/12 extract of the revenue records. He submitted that on 10.06.2005, assessee agreed to sell the land jointly with Mahendra Vitkar to Shri Gurumkh Sukhwani and Shri Ghanshyam Sukhwani and had received Rs.20 lacs towards sale consideration and assessee had deposited the same with Oriental Bank of Commerce. He submitted that on 14.06.2005 a Public notice was issued By Shri S.P.Lalvani, advocate, with respect to the fact the land under reference was owned by assessee and Shri Mahendra Vitkar and that his client was under the process to purchase the land from the assessee. On 15.06.2005 Mahendra Vitkar had executed the General Power of Attorney in favour of the assessee for the sale of land in question. On 27.03.2006 land was sold by Assessee and Shri Mahendra Vitkar to M/s. Riverview Properties Pvt. Ltd., for a sale consideration of Rs.4,85,75,000/- and the part of sale consideration was given to assessee and Mahendra Vitkar by cheques issued in their separate names. Rs.1,29,37,500/- was paid through cheques in the name of Shri M.R. Vitkar which was deposited by Mahendra Vitkar in his account. He submitted that on 05.06.2007 Shri Mahendra Vitkar filed his return of income for A.Y. 2006-07 but did not include his share of capital gains from the sale of land. During the course of assessment proceedings of Mahendra Vitkar, Shri Vitkar has taken a stand that he was forced to open a bank account and his signatures were taken on blank cheques and that he was made to sign Power of Attorney and that the entire transaction was carried out by the assessee. The contentions of Mahendra Vitkar were not accepted by the AO and by assessment order dated 13.4.2010 passed u/s 143(3), the share of capital gains amounting to Rs.1,77,97,790/- arising out of the land was held to be taxable in the hands of Mahendra Vitkar. He further submitted that Ld.CIT(A) vide order dt.20.06.2010 has upheld the addition of half share of capital gains arising from the sale of land in the case of Shri Mahendra Vitkar. He therefore submitted that when a portion of capital gains arising on the sale of same piece of land has been held to be taxable in the case of Mahendra Vitkar, the same gains cannot be taxed in the hands of the Assessee. He thereafter pointed to the working of share of short term capital gains declared by the assessee in his return of income and submitted that the gains were rightly offered by the assessee.

14. Ld.D.R. on the other hand on the issue of reopening submitted that in the case of assessee, the return of income was originally filed by the assessee on 26.03.2007 and was processed u/s 143(1) of the and no assessment order was framed u/s 143(3) of the. He therefore submitted that since no assessment was framed u/s 143(3) there was no question of forming any opinion of the issue and therefore the question of change of opinion does not arise. He thereafter pointed to the computation of total income filed in Page 2 of the Paper Book and pointed that while working the capital gains, assessee had shown sale consideration of agricultural land of Rs.1,42,87,500/- as against the total sale consideration of Rs.4,85,75,000/- and thus there was a prima facie wrong declaration made by the assessee in the return of income. He further submitted that when assessee had shown receipt of sale consideration of Rs.1.42 crores as against the sale consideration of Rs.4.85 crores and when there was no occasion by the AO to examine these facts earlier, the AO was fully justified in re-opening the assessment. He thereafter pointed to Page 188 of the assessees Paper Book wherein assessee has stated to have worked out correct working of short term capital gains in the case of assessee and Mahendra Vitkar. From the aforesaid working, he pointed out that as per the aforesaid working the net capital gains in case of assessee has worked out at Rs.68,23,210/- as against the capital gain of Rs.48,23,210/- shown by the assessee in the return of income filed by the assessee. He therefore submitted that there is inconsistency in the working of capital gains as worked out by the Assessee himself and both the capital gains are different and in such a situation, the A.Os action of re-opening the assessment cannot be faulted with. He further submitted that the Honble Supreme Court in the case of Rajesh Javeri (supra) has held that the intimation issued u/s 143(1) of the can be subject to re-opening so long as the ingredients of Sec.147 of the are fulfilled because no opinion is formed at the time of issuance of intimation u/s 143(1).

15. On the merits of the addition, he submitted that Shri Mahendra Vitkar had stated that he has not made any investment in the properties and he was made to sign the power of attorney in favour of the assessee for the purpose of selling the land. It was also submitted by Shri Mahendra Vitkar that he was forced to open bank account and his signatures were obtained in the cheque book and the cheque book was kept in the custody of the assessee. He further submitted that Mahendra Vitkar was just a name lender for the transaction and the entire transaction was carried out by the assessee. In such a situation, the AO was fully justified in considering the entire capital gains in the hands of the assessee. He thus supported the order of lower authorities.

16. Now we take up the case of assessee in case of Mahendra Vitkar in ITA No.1208/PUN/2010 and the relevant facts of the case are as under :-

16.1 Assessee is an individual and stated to be working as transporter and brick supplier. Assessee filed his return of income for A.Y. 2006-07 declaring total income of Rs.1,54,364/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the vide order dt.31.12.2008 and the total income was determined at Rs.2,44,33,402/- Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.30.06.2010 (in appeal No.PN/CIT(A)-V/Wd.9(4)/238/09-10 (Tr.in)) granted partial relief to the assessee. Aggrieved by the order of Ld.CIT(A), assessee and revenue are now in appeal before us.

17. The grounds raised by the assessee in appeal No.1208/PUN/2010 reads as under :

1. The CIT(A) has erred in not concluding that whole income belonged to Mr. Gandpat Murkute and assessee (Mr. Mahendra Vitkar) was only benamidar income from sale of property at S.No.43/2/1, Mahalunge to River View Properties Pvt. Ltd., included in the hands of Mr. Vatikar may please be deleted.

2. Without prejudice to Ground No.1, Lower Authorities have erred both on the facts and in law in assessing the income for Purchase & Sale of Property at S.No.43/2/1, Mahalunge in individual hands of the assessee as same has to be assessed as AOP. Same may please be deleted.

3. CIT(A) has erred in not giving further, full opportunity of cross- examination.

4. Without prejudice to Ground No.1 & 2, CIT(A) has erred in not quantifying the income assessee in the hands of the appellant (if assessable).

5. Appellant denies liability to interest u/s 234B & 234C etc.

6. Lower Authorities have erred in confirming charge / liability to interest u/s 234B/C. As assessee was not liable to Advance Tax, Interest is not chargeable.

7. Appellant prays for just and equitable relief.

18. On the other hand, the ground raised by the Revenue in appeal No.1213/PUN/2010 reads as under :

1. Whether on the facts and circumstances of the case, and in law, the Ld.CIT(A) was justified in deleting the addition of Rs.50,00,000/- made on account of unexplained deposits.

2. Whether on the facts and circumstances of the case, and in law, the Ld.CIT(A) was justified in deleting addition of Rs.50 lacs by relying on the confirmations filed by the assessee at the time of remand proceedings and in ignoring the fact that the AO has never lent credence to the genuineness of these transactions amounting to Rs.50 lacs.

3. The order of the CIT(Appeals) may be vacated and that of the Assessing Offices be restored.

19. Since the grounds raised by the assessee and the Revenue are inter-connected both are considered together.

20. On the basis of AIR information received by the AO, it was noticed that assessee had purchased two plots of Rs.1,10,00,000/- each. The assessee was asked to explain the source of investment in these two properties along with necessary evidence. AO noted that assessee did not produce the required documents. Since the assessee did not furnish the required details, Inspector was deputed to Sub-Registrars office and the information was gathered. It was noticed that assessee had issued cheques from Seva Vikas Co-operative Bank for the deal. Further bank statements were also obtained by the AO. The assessee was asked to explain the source of amount in his bank account amounting to Rs.49,65,000/- and withdrawals of Rs.48,54,750/-. It was submitted by him that the deposits were made by Shri Sanjay Jain and the cheques were issued at his behest. Summons u/s 131 were issued to Sanjay Jain and his statement was recorded on 08.2.2008, wherein he denied of having made any deposits including cash in the proposed account of assessee and any instructions to issue cheques from the bank of assessee or his bank account. Summons u/s 131 were also issued to Shri Ganpat Murkute and his statement was recorded on 17.12.2008. He submitted that the plots were purchased by him jointly with the assessee and since the cheques given to the sellers by the assessee bounced, two cheques of Rs.20 lakhs each were issued by him. It was further submitted by him that these two properties were sold to M/s.Riverview Properties Pvt. Ltd., for 4,85,75,000/-. It was also submitted by him that he has shown in his return of income his share of capital gains of 50%. AO after considering the totality of the facts held that out of the total capital gains earned as Rs.2,26,21,000/- of which Ganpat Murkute had shown Rs.48,23,210/- in his return, the remaining amount of capital gains of Rs.1,77,97,790/- was undisclosed short term capital gains of the assessee and accordingly made its addition.

21. AO on perusing the bank account of proprietary concern in the name of M/s. Meghali Propriety maintained with Janseva Sahakari Bank and Seva Vikas Co-operative Bank Ltd., noticed that there were deposits in those bank accounts. The assessee was asked to explain the source of deposits. In the absence of any explanation, AO considered the amount of Rs. 64,81,248/- deposited in the bank account as unexplained deposits and made its addition. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A).

22. On the issue of taxing of capital gains Ld CIT(A) upheld the order of AO by holding as under : 18. I have given careful consideration to the matter. Keeping in view the facts and circumstances of the case in their totality, the picture that emerges is that as per government records, the Appellant was a joint purchaser (along with Shri Murkute) of the property in question, and also a joint seller thereof to the ultimate buyer (M/s. Riverview), an amount of Rs.l,22,17,325/- out of the consideration received from the latter flowed into his individual bank account, and another amount of Rs.7,20,175/- into his joint account with Shri Murkute, an amount of RS.13 lakhs had been paid out of his account to Mr. Naresh Kamath towards brokerage for the transaction. In the face of this factual and legal position, it is very difficult to agree with the Appellant that he had nothing to do with the transaction and that the entire transaction had been carried out by Shri Murkute. Although the Appellant has claimed that he is not educated, implying thereby that he was an innocent party whose name has been exploited, there is every reason to believe that, in fact, he was well-versed in property transactions. Shri Sanjay Jain, in his cross- examination by the Appellant, has mentioned that he knew the Appellant as they were both estate agents and brokers. The Appellant did not contradict him in this regard. In fact, in his letter dated 07.03.2010 to the undersigned, the Appellant himself has admitted to this fact as is clear from the following extract:

Assessee Mr. Mahendra Vitkar has not returned any income in his return as whole of the transaction of property purchase and sale belongs to Mr. Ganpat Murkute. However, if said submission was not acceptable to AO, in any case it is clear that both Mr. Ganpat Murkute and Mr. Vitkar are estate brokers. It has been made clear that property transaction in joint name was for immediate sale.

[emphasis added]

19. Further, the Appellant has also explained some of the deposits found by the AO in his bank accounts as pertaining to certain other property transactions to which he was a party. All these facts clearly demonstrate that the Appellant was far from being an innocent and gullible person whose name could have been exploited by Shri Murkute in the manner he now conveniently claims it was. In any profitable venture undertaken by two or more persons/parties jointly, it is quite common for one of them to take greater initiative-even the entire initiative-and to shoulder a greater part of the responsibility in bringing the transaction to fruition. In such cases, the other party having willingly consented and duly cooperated in all the legal and procedural requirements to complete the transaction (notably, even the AIR information received by the AO was in respect of the Appellant), having allowed the consideration therefrom to flow into his own bank accounts, cannot later turn back and disown the transaction completely and pin the entire responsibility on the other. It is noteworthy that nowhere his submissions has the Appellant alleged forgery of his signatures, or use of force or for to obtain his signatures either on the property documents or bank documents.

20. Under the above circumstances, I do not agree with the contention of the appellant that Shri Murkute was answerable for the entire transaction and the whole income arising therefrom was that of Shri Murkute. Accordingly, Ground No.3 is hereby dismissed.

23. With respect to the addition on account of unexplained deposits, Ld.CIT(A) granted partial relief to the assessee by observing as under : 32. I have considered carefully all the material before me. Although the Appellant taken this issue up as a ground of appeal, no details were filled at the time of filing appeal attempting to explain these cash transactions. Further, no explanation is found regarding this transaction in his detailed written submissions dated 25.11.2009, wherein he has dealt at great length on the issue of capital gains arising from the transaction jointly entered into by him and Shri Murkute. However, in his letter dated 01.04.2010 submitted before the AO during remand proceedings, the Appellant submitted as below:

I herewith submit the source of cash deposited in Janata Sahakari Bank Ltd. and The Seva Vikas Co- Op. Bank Ltd. This cash is received from 1) Mr. Jayantilal Madanlal Dudhediya,2) Mrs. Bharati Jayantilal Dudhediya 3) Prashant Jayantilal Dudhediya and 4) Rakhi Jayantilal Dudhediya for advance for sale of my property at thergaon, which is already mentioned in my Assessment Proceedings for the Assessment year 2006-07.

33. In his remand report, the AO has mentioned the said letter of the appellant dated 01.04.2010, and has forwarded the same along with confirmations submitted by the appellant form the parties from whom the cash amount is stated to have been received. He has not questioned the veracity of the claim. As such, out of the total addition of Rs.64,81,248/- made by the AO on account of unexplained deposits in bank accounts an amount of Rs.50,00,000/- is considered to have been explained. As regard the remaining amounts, no explanation has been offered by the appellant during the course of appellate proceedings, nor any submissions have been made before the AO during the remand proceedings. Accordingly, the addition of remaining amount (Rs.64,81,248/- -- Rs.50,00,000/- = Rs.14,81,248/-) is hereby confirmed. Aggrieved by the order of Ld.CIT(A), assessee and Revenue are now in appeal before us.

24. Before us the assessee appeared in person and filed Affidavit. The Ld.A.R. reiterated the submissions made before lower authorities and submitted that the entire transaction was executed by Shri Ganpat Mukundrao Murkute and assessees name was merely used as name lendor for the transaction. In support of his contention, assessee also filed a sworn affidavit, which reads as under : A F F I D A V I T

THIS AFFIDAVIT IS MADE ON THE 3 rd DAY OF NOVEMBER 2017 AT PUNE. I SHRI MAHENDREA RAJARAM VITKAR ,AGE : 51 YEARS, Occ: Business, R/ at :Velthika Nagar Kaveri, Nagar Police line Road, Thergaon, Chinchwad, Pune 411033, do hereby state on solemn affirmation that: I am residing on the above mentioned address with my family. Since 2006 I had the business under the name and style of Meghali Transport and bricks suppliers of selling bricks. From the year 2003 to 2006 I was working in the office of Shri Sanjay Jain. I have done my education upto 8 th class only. I say that Shri Sanjay Jain when was in Delhi, called up and said that Shri Ganpat Murkute would come to the office and at that time you go with him to Mahalunge and execute a sale deed in respect of the property of Shri Kirloskar in the name of yourself and Shri Murkute and also that he told me to issue cheques from my account in SevaVikas Bank and that he would arrange to deposit the amount in the account . I say that accordingly I went with Shri Murkute to Mahalunge and executed the sale deed on 16 th May 2005 and on 20 th May 2005 we got the same registered in our name and from my account in Seva Vikas Bank I issued three cheques dated 25/5/2005 and 20/6/2005 amounting to total amount of Rs. 55 Lakhs Only. As Shri Jain had told me I had issued cheques to MR. Kirloskar from my account in Seva Vikas Bank but Shri Jain had not deposited the amount in my account and so the cheques returned dishonoured. Thereafter after the return of Shri Jain from Delhi, there were talks between Shri Murkute and Shri Jain regarding the payment to be made to Shri Kirloskar and at that time Shri Jain told MR. Murkute that the money cannot be arranged for and at that time Shri Jain told that even he does not want the Mahalunge land of Shri Kirloskar and that I should go with Mr. Murkute and the land purchased in my name should be transferred in the name of MR. Murkute. And so I went to hotel Radhika at Aundh to meet Mr. Murkute and told MR. Murkute that the land purchased in my name has to be transferred in your name. At that time Shri Murkute told me that for that I would have to pay a stamp duty of Rs.5,00,000/- and so instead of the sale deed on 15 th June, 2005, he got a power of attorney made and on the same day i.e. 15 th June 2005 I along with Mr. Murkute went to the sub registrar office at Baner and got the power of attorney executed and registered from me in the name of Shri Murkute and that the complete responsibility of the said entire transaction shall be on Mr. Murkute and that the entire sale consideration would be paid by Mr. Murkute and that all the profits and loss arising out of it shall be the responsibility of MR. Murkute. I say that the responsibility and the profit and loss arising out of the entire above transaction was that of Shri Murkute alone and he shall be responsible for the same solely and so the details of the said transaction was not shown in my income tax returns and there was no reason for showing the same. Thereafter in June 2006 Shri Murkute again called me up and told me that the said land has been sold to Riverview Properties Pvt Ltd., and that Riverview Properties Pvt. Ltd., has issued a cheque of half of the consideration amount in my name and for that I would have to open an account in United Western Bank and accordingly Mr. Murkute made me open an account in United Western Bank and made me sign on the cheques both in the front and at the back side and again told me that the complete responsibility of the said transaction shall be solely his (Mr. Murkute). I say that I have not invested any amount nor have I received any amount in above mahalunge land sale as well as purchase transaction. By this affidavit I wish to bring to your notice certain important points for consideration.:

1. I have not given any amount during the purchase of the land at Mahalunge belonging to Mr. Kirloskar.

2. If for the purchase of said land, I had not paid any amount and without paying I was supposed to receive consideration, I would have not given any power of attorney to Mr Murkute. It means since I had not given any amount and was not going to receive any consideration I gave power of attorney to Mr Murkute who used the same for sale deed in the name of Riverview Properties Pvt Ltd.

3. Earlier I had an account in Seva Vikas Bank and Janta Sahakari Bank and had I gotten any cheques I could have deposited in these two accounts of mine and for that there was no need for me to open another account in United Western Bank and that MR. Murkute had taken my signatures on the cheques and misused the said cheques and with those cheques Mr. Murkute had issued cheques to different people and withdrawn the money from my account. Moreover a very important point in this respect is that today the said bank account is closed and for closing the said account I never gave any application nor have I signed on any application nor does the application bear my signature.

4. I say that the said land is around ~3 Acres and that for doing the said huge land transaction I have never met the land owner i.e. MR. Kirloskar and that I have also not met the land purchasers and owners of Riverview Properties Pvt. Ltd. Shri Murkute has used the power of attorney given to him and done the said transaction with Riverview Properties Pvt. Ltd and that took the cheque standing in my name and deposited the same in United Western Bank and also issued different cheques to different people.

5. Shri Murkute while executing the power of attorney from me, took all the rights of the said land and also all powers to receive the consideration / monies and still while selling the land taken the cheques having my name and utilized all the blank cheques signed by me and enjoyed / used the amount of consideration.

6. My income tax officer had called for the details of the income of Shri Murkute and except his income took everything else as my income. In that Mr. Murkute had shown less income for him and more income for me. My income tax officer on 8/12/2008 called me and inquired about the said transaction and took my statement. He showed me the income tax return of Mr. Murkute and told that only except his net income everything else would be considered as my income .1 told him that the said entire transaction and the income from that transaction is entirely of Mr. Murkute and not mine. On the telling of MR. Sanjay Jain, I had done the land purchase and the power of attorney also was executed in favor of Mr. Murkute as per the direction and instruction of Shri Jain.

7. If without any investment, had I got so much profit then I would have surely invested in somewhere and would have done the business of selling and purchase of land with more vigor but it is not so , actually after 2007 I have not done any transaction of purchase and sale of land and nor have I done any investment of any nature.

8. I have not invested / spent / given any amount for the purchase or sale of the said land. The said sale transaction has been done with the use of power of attorney by Shri Murkute that it is a benami transaction and the transaction is solely of Shri Murkute and done by him only, In the statement recorded on oath before the income tax officer, Shri anpat Murkute had told that Shri Vitkar( i.e. myself) had not spent an single rupees ( any amount) nor have done any efforts and that I was not aware of any persons involved in the sale and purchase of the said property and transaction.

9. On 26/3/2010 in presence of the Income Tax Authority Ward No . 9 (4) I conducted a cross examination of Shri Ganpat Murkute and for question no. 4 he told that he was introduced to Mr. Vitkar by Shri Jain. And that on the assurance of Shri Jain, he had done the transaction with Mr. Vitkar. Shri Murkute also told that he was not aware of the financial capacity / position of Shri Vitkar and that he did not know that if Mr. Vitkar was capable of entering into such a huge transaction. Taking into consideration all the above aspects, it is clear that Shri Murkute took advantage of my innocence/ignorance and took my signature and used those papers and took complete advantage of the said transaction for himself only. Mr. Murkute did not show the receipt of the complete income in his name but has shown in part, and thereby cheated me. I have not received any income out of this transaction hence the same needs to be deducted from my income as assessed by my income tax officer. Considering the statement on oath made by me and Mr. Murkute and also the statements on cross examination of Mr. Murkute before my Assessing Officer, the Assessing Officer of Mr. Murkute has assessed full income of the transaction in reassessment of MR. Murkute as his income. This means income tax department has accepted that income of this transaction is not my income, therefore income from the said sale transaction needs to be deleted from my income. The above information is true and correct to the best of my knowledge, information and belief and If the same .is found to be false, then I shall be punishable under Indian Penal Code . The above information is true and correct and I have signed hereunder today. Dated: Mahendra Rajaram Vitkar Place : Affiant Translated from the Marathi affidavit of Mahendra Rajaram Vitkar by the undersigned advocate. Sd/-- Adv. Janaki Dave. (Sanad No.MAH/1216/99)

25. Referring to the contents of the affidavit, he submitted that assessee had not paid any amount for purchase of land nor has received any amount on its sale. He therefore submitted that no income on account of sale of land was received by him. He therefore submitted that the addition be deleted.

26. On the issue of unexplained deposits, Ld.A.R. reiterated the submissions made before Ld.CIT(A) and submitted that out of the deposits of Rs.64,81,248/- on account of unexplained deposits, an amount of Rs. 50 lacs was explained to have been received towards the advance of sale of property. He therefore submitted that when the Assessee has explained the source of deposits, Ld CIT(A) has rightly deleted the addition.

27. Before us, Ld.D.R. took us through the findings of AO and Ld.CIT(A) and submitted that in the absence of any explanation, AO was fully justified in treating the deposits made in the bank account as un-explained and that Ld.CIT(A) erred in deleting the addition of Rs.50 lacs and submitted that the order of AO be upheld. On the issue of taxing of capital gains, he supported the order of Ld.CIT(A).

28. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to alleged unexplained deposits in the bank account of the assessee. We find that while granting relief to the Assessee. CIT(A) has given a finding that out of the total deposits of Rs 64.31 lacs, assessee had given the explanation with respect to Rs 50 lakhs and that no submissions were made by the AO in the remand proceedings for the balance. In such a situation he has held the deposit to the extent of Rs 50 lakhs explained and had confirmed the addition for balance amount of Rs 14,81,248. Before us Revenue has not pointed out any fallacy in the findings of Ld.CIT(A). In such a situation, we do not find any reason to interfere with the order of Ld.CIT(A) and thus, the grounds of Revenue are dismissed.

29. On the issue of merits of addition since the issue in the case of Shri M.R. Vitkar and Ganpat Murkute are inter-connected, we proceed to dispose of the same by a consolidated order.

30. In the facts of the present case before us, the issue relates to sale of piece of land situated at Village Mahalunge. The issue which arises in the present set of appeals is the assessability of income arising from sale of the said land. However, in order to adjudicate the same, it is necessary to look into the factual aspects connecting purchase of the land. The assessee Shri Ganpat Mukundrao Murkute claims that he had jointly purchased the said land with Shri Mahendra R. Vitkar from M/s. Abhi Agro Trust and M/s. Sangram Agro Trust. The total consideration was Rs.2.20 crores to be paid vide two separate agreements dated 20.05.2005. The first transaction for purchase of property was payment of Rs.20 lakhs each to the two trusts, who owned property. Initially cheque was given by Shri Mahendra R. Vitkar but the same could not be honoured and thereafter, Shri Ganpat Mukundrao Murkute paid Rs.20 lakhs each to the two trusts. No further payment was made to the trusts. Subsequently, there was an agreement to sell the said land to Gurumukh Sukhwani and Ghansyam Sukhwani, against which sum of Rs.20 lakhs was received as earnest money on 10.06.2005. However, the said sale could not be completed and the same was cancelled. Meanwhile, Shri Ganpat Mukundrao Murkute received Power of Attorney from Shri Mahendra R. Vitkar for completing sale transaction. On a later date i.e. 28.03.2006 Shri Ganpat Mukundrao Murkute entered into an agreement of sale with M/s.Riverview Properties Pvt. Ltd. for total consideration of Rs.4.85 crores. While offering income from the said transaction, Shri Ganpat Mukundrao Murkute declared half share of sale consideration at Rs.2.42 crores and after reducing the cost of acquisition and improvements and development cost and also payment of commission for the sale transaction, computed the net short term capital gains at Rs.48,23,210/-. It may be pointed out herein itself that though Shri Ganpat Mukundrao Murkute offered half share of sale consideration, but he deducted total cost of acquisition (partly paid), improvement and commission from his share and offered the balance to tax. The assessee Shri Ganpat Mukundrao Murkute during the course of re-assessment proceedings had on the other hand, re-worked the income from short term capital gains at Rs.64,81,248. The income was declared as short term capital gains but purchase transaction was not complete, as balance consideration was not paid. The plea of other alleged co-owner Shri Mahendra R. Vitkar is that he had no funds to make the aforesaid investment for purchase of land to the extent of Rs.2.20 crores. The transaction was completely done by Shri Ganpat Mukundrao Murkute and even the initial earnest money for purchasing the said property was paid by him and even the sale consideration was received by him. He admits that a bank account was opened in his name, wherein some money was deposited but all that money was withdrawn from the said bank account. In this regard, he also admits to have signed blank cheques and handed over the same to Shri Ganpat Mukundrao Murkute. Shri Mahendra R. Vitkar in this regard has filed an affidavit before us, which though is self-serving is in support of his contentions vis-a-vis transactions.

31. Now, looking at the sequence of transactions, we find that Shri Ganpat Mukundrao Murkute was the one who initiated purchase transaction by making the payments out of his bank account and that payment he claims to be his cost of acquisition. He does not claim it to be payment on joint account. Thereafter, he also has claimed development expenses entirely to his account and even commission on account of sale transaction as deductible from his share of capital gains. The issue of non-allowability of development expenses and commission has already been dealt with by us in the paras herein and in the absence of any evidence, the same has not been allowed in the hands of Shri Ganpat Mukundrao Murkute.

32. We find that Shri M.R. Vitkar in his sworn affidavit has inter- alia submitted that he has not invested any amount for the purchase of land. He has further submitted that he was forced to open bank account and put signatures on blank cheques and Murkute misused the cheques and had withdrawn the amount from his account. He further submitted that the bank account with United Western Bank has been closed and he had never made an application for its closure. The cheques issued by M/s. Riverview Properties Pvt. Ltd., were taken by Ganpat Murkute and deposited in the United Western Bank and Ganpat Murkute issued the cheques to different persons without the knowledge of the Mahendra Vitkar. Before us, nothing was brought on record to demonstrate that the contents of the affidavit are false. The appeals of Ganpat Murkute and Mahendra Vitkar were heard together. We find that Ld.CIT(A) while deciding the issue in the case of Mr. Ganpat Murkute has noted that M.R. Vitkar was only a name lendor for the transaction and the entire transaction was carried out by the Ganpat Murkute and that Ganpat Murkute was solely responsible for the entire transaction and the assessee was only instrumental in carrying out the transaction in consultation with Shri Sanjay Jain. He has further given a finding that based on the statement recorded u/s 131 of M.R. Vitkar and considering the totality of the material on record, it was Ganapat Murkute who carried out the transaction and was the sole beneficiary. In the entirety of the facts and circumstances where the transaction has been conducted by Shri Ganpat Mukundrao Murkute and also as financial position of Shri Mahendra R. Vitkar was not sound to make investment of even Rs.10 lakhs, as is evident from his bank position and in view of the declaration of entire cost of acquisition by Shri Ganpat Mukundrao Murkute in his hands, we hold that transaction relates to Ganpat Murkute and the sale consideration in entirety is to be considered in his hands in order to compute income from short term capital gains. In such a situation, we are of the view that Ld.CIT(A) has rightly held the entire amount of capital gains to be taxable in the hands of Ganpat Murkute. Since the entire gains are held to be taxable in the hands of Ganpat Murkute, we hold that no portion of capital gains are taxable in the hands of Mahendra Vitkar. Thus, the ground in case of Ganpat Murkute is dismissed and in the case of Mahendra Vitkar is allowed.

33. On the issue of re-opening, we find merit in the submissions of Ld.D.R. Ld.D.R. has pointed out that in the capital gains working, assessee has shown different issues of capital gains and has not shown the full value of consideration received on sale of land. Further, since the original intimation was u/s 143(1) of the and not u/s 143(3) of the, we are of the view that AO was fully justified in resorting to re-opening of assessment. Further the case laws relied upon by Ld.A.R. being distinguishable on facts, are not applicable to the present case.

34. With respect to the expenditure on development and improvement of land and payment of commission claimed by Ganpat Murkute, we find that before AO and Ld.CIT(A), assessee has not been able to substantiate the expenditure incurred on account of development of land as well as payment of commission. Considering the aforesaid facts, we find no reason to interfere with the order of Ld.CIT(A). Thus, the grounds of assessee in the case of Ganpat Murkute are dismissed.

35. To sum up, the appeal of the assessee in ITA No.2141/PUN/2013 and the appeal of the Revenue in ITA No.1213/PUN/2010 are dismissed and the appeal of the assessee in ITA No.1208/PUN/2010 is allowed. Order pronounced on 2 nd day of February, 2018. Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI)  " / JUDICIAL MEMBER " / ACCOUNTANT MEMBER Pune;  Dated : 2 nd February, 2018. Yamini $ %( )(/Copy of the Order forwarded to : 1.  / The Appellant 2.  / The Respondent 3. 4. 5. 6. 7. 8 CIT(A)-V, Pune. CIT-V, Pune. CIT(A)-II, Pune. CIT-II, Pune. " %%&,  &, / DR, ITAT, A Pune; . / Guard file. / BY ORDER, // True Copy // 01 % & / Sr. Private Secretary  & , / ITAT, Pune