IN INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA.No.2011 and 2012/Ahd/2013 Asstt. Year: 2004-2005 and 2006-2007 Karshanbhai Dahyabhai Kakadia ITO, Ward-9(2) Govindji Bunglow Vs Surat. Opp: Shanti Nagar Society Nr. Sarthana Jakat Naka Surat 395 006. PAN : AMXPK 2145 H (Appellant) (Respondent) Assessee by : Shri Mehul Shah, AR Revenue by : Shri James Kurian, Sr.DR Date of Hearing : 06/10/2016 Date of Pronouncement: 13/10/2016 ORDER PER RAJPAL YADAV, JUDICIAL MEMBER Present two appeals are directed at instance of assessee against orders of ld.CIT(A) dated 9.1.2013 and 28.1.2013 for Asstt.Years 2004-05 and 2006-07 respectively. In both years, assessee is challenging reopening of assessments. 2. Registry has pointed out that appeal in Asstt.Year 2004-05 is time barred by 118 days. In order to explain delay, assessee has filed application under sub-section 5 of Section 253 of Income Tax Act, 1961. It is pleaded in application that Shri Sapnesh Sheth was partner with M.s.Rasesh Shah & Associates. He has represented assessee before ITA No.2011 and 2012/Ahd/2013 2 ld.CIT(A). He received copy of CIT(A) s order on 1.2.2013. However, he did not instruct assessee to file appeal. Even he did not inform assessee. He retired from firm w.e.f. 30.4.2013, but he was not attending office in month of April, as he has to start his independent practice. Due to retirement of Shri Sapnesh Sheth communication between assessee and tax consultant firm had not taken place, and assessee was not aware about outcome of appellate proceedings before ld.CIT(A). Shri S.B. Vaidya has admitted as partner in firm, and thereafter, it came to notice that no appeal was filed in this case. He advised assessee to file appeal, and accordingly present appeal was filed. In this way, assessee has prayed that delay in filing appeal be condoned. 3. ld.DR, on other hand, contended that except affidavit by assessee, there is no other supporting evidence in support of alleged pleading. assessee should be vigilant in prosecuting its income tax proceedings. He should be aware that ld.CIT(A) decided appeal and it has decided against assessee, and assessee should have filed appeal well in time. 4. We have duly considered rival contentions and gone through record carefully. Sub-section 5 of section 253 of Income Tax Act provides that Tribunal may admit appeal or permit filing of memorandum of cross- objection of respondent after expiry of relevant period of limitation referred to in sub-section 3 and 4 section 253, if it is satisfied that there was sufficient cause for not presenting it within that period. Expression sufficient cause employed in this section has also been used in section 5 of Indian Limitation Act, 1961. This expression has fallen for consideration before Hon ble High Courts as well as before Hon ble Supreme Court, and Hon ble Courts are unanimous in observing that whenever such issue fallen for ITA No.2011 and 2012/Ahd/2013 3 consideration before adjudicating authority, then alleged sufficient cause is to be considered with justice oriented approach. We deem it appropriate to make reference to decision of Hon ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353. relevant part of judgment reads as under: 1. Ordinarily litigant does not stand to benefit by lodging appeal late. 2. Refusing to condone delay can result in meritorious matter being thrown out at very threshold and cause of justice being defeated. As against this when delay is condoned highest that can happen is that cause would be decided on merits after hearing parties. 3. "Every day's delay must be explained" does not mean that pedantic approach should be made. Why not every hour's delay, every second's delay? doctrine must be applied in rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for other side cannot claim to have vested right in injustice being done because of non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. litigant does not stand to benefit by resorting to delay. In fact he runs serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 5. Similarly, we would like to make reference to authoritative pronouncement of Hon ble Supreme Court in case of N.Balakrishnan Vs. M. Krishnamurthy, (1998) 7 SCC 123. It reads as under: Rule of limitation are not meant to destroy right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. object of providing legal remedy is to ITA No.2011 and 2012/Ahd/2013 4 repair damage caused by reason of legal injury. Law of limitation fixes life-span for such legal remedy for redress of legal injury so suffered. Time is precious and wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching courts. So life span must be fixed for each remedy. Unending period for launching remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in maxim Interest reipublicae up sit finis litium (it is for general welfare that period be putt to litigation). Rules of limitation are not meant to destroy right of parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. idea is that every legal remedy must be kept alive for legislatively fixed period of time. court knows that refusal to condone delay would result foreclosing suitor from putting forth his cause. There is no presumption that delay in approaching court is always deliberate. This Court has held that words "sufficient cause" under Section 5 of Limitation Act should receive liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on part of litigant concerned. That alone is not enough to turn down his plea and to shut door against him. If explanation does not smack of mala fides or it is not put forth as part of dilatory strategy court must show utmost consideration to suitor. But when there is reasonable ground to think that delay was occasioned by party deliberately to gain time then court should lean against acceptance of explanation. While condoning delay Could should not forget opposite party altogether. It must be borne in mind that he is looser and he too would have incurred quiet large litigation expenses. It would be salutary guideline that when courts condone delay due to laches on part of applicant court shall compensate opposite party for his loss. 6. If we examine facts of present case, in light of above, then, it would reveal that Shri Sapnesh Sheth was conducting appellate proceedings before ld.CIT(A). He retired from tax consultant firm and started his independent practice. Due to change in composition of tax ITA No.2011 and 2012/Ahd/2013 5 consultant firm, there happened to be communication gap between firm and its client. proper advice cannot be given to assessee. This has made appeal time barred. Since appeal in Asstt.Year 2006-07 is not time barred and both issues are interconnected, therefore, considering hardship of assessee, and explanation given by him, we deem it appropriate to condone delay and decide appeal for Asstt.Year 2004-05 also on merit. 7. On merit, assessee has challenged reopening of assessments in both years. 8. Brief facts of case are that Shri Karsanbhai Dahyabhai Kakadia HUF had purchased agriculture land comprised at Block no.42 and 559B by way of sale deed executed on 15.3.2004. land at block no.42 was purchased for Rs.1,45,725/-. assessee has shown value of this land in balance sheet of his HUF at Rs.2,08,805/- which included stamp duty, registration charges and other expenses. Similarly, land at Block No.559/B was purchased for consideration of Rs.4,78,035/- which has been shown in balance sheet of HUF at Rs.6,697,010/- which included registration charges and stamp duty and other expenses. These pieces of land were purchased from one Smt.Hetalben. It appears that DDIT(Investment) had received tax evasion petition and he conducted inquiry. Statement of assessee was recorded under section 131 by DDIT (Investigation) on 2.11.2007. During this statement, assessee has admitted investment of Rs.50 lakhs over and above amounts stated in sale deed. assessee agreed that he has paid on-money of Rs.38 lakhs on land at block no.559/B and also paid brokerage of Rs.3 lakhs. assessee also admitted that land was sold in year ending 31.3.2006 and received on-money of Rs.55,50,000/-. All this amount, in addition to apparent consideration of ITA No.2011 and 2012/Ahd/2013 6 Rs.12,75,000/- stated in sale deed. According to assessee, HUF has filed its return of income for Asstt.Year 2004-05 on 29.3.2006 declaring total income at Rs.23,130/-. assessee had filed revised return in individual capacity on 12.9.2005 for Asst.Year 2004-05 declaring total income at Rs.48,200/-. After this inquiry at end of DDIT, assessee has filed revised computation of total income for Asstt.Years 2004-05 and 2006-07 in case of HUF. He has also paid cheque of Rs.4.70 lakhs in four instalments. In other words, assessee has owned up declaration made during course of statement recorded by DDIT. According to assessee, it was statement in capacity as karta of HUF and revised computation of income was submitted by HUF. Taxes have also been paid partly. ld.AO has sought to reopen assessment of assessee in his individual case. He has recorded following reasons in both assessment years. REASONS FOR REOPENING CASE OF Shri.Karsanbhai O. Kakadia (PAN:- AMXPK2145H ) for A.Y.2006-07 ADIT(Inv.) Unit-II Surat has forwarded his report on enquiry of TEP conducted in case of Hetalben R. Desai and Others vide letter dated 31- 8-2010. TEP was regarding allegation that two pieces of land (at Survey No.559B, Block 559B admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m.) together worth Rs.7 crores sold was sold at very low prices by one Mrs. Hetalben R Desai to some individuals .The report states that sale of said land by Hetalben and subsequent holders resulted in transfer of unaccounted money which was accepted under oath before ADIT. amount of disclosures of unaccounted money grossing upto Rs.1.61 crores was made as below:- Sr. Names PAN Unaccounted A.Y. income admitted (lakh Rs.) 1 Hetalben R. Desai Applied for 35.00 04-05 2 Shri Karsanbhai kakadia AMXPK2145H 50.00 04-05 3 Shri Karsanbhai Kakadia -do 9.5 06-07 ITA No.2011 and 2012/Ahd/2013 7 (Capital Gain Tax) 4 (Commission) AIUPG7353E , 11.00 04-05 06-07 5 Sfiri Shaiieshbhai AAUPD7630F 13.875 06-07 Parbhatbhai Dabaria 6 Shri Chandubhai AAUPD7631E 13.875 06-07 Parbhatbhai Dabaria 7 Shri Dhirubhai @ ADGPP3559G 27.75 06-07 Dhirajlal Arjunbhai Patel Total 161.00 As per report assessee individual Shri. Karsanbhai D. Kakadia had made unaccounted investment of Rs. 38 lakhs in cash for purchase of land (on 15-04-2004) at Survey No.51, Block 559B admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m. Block 559B admeasuring 31,869 sq.mtr . assessee has admitted that he had paid Rs.38,00,000/- in cash to seller Mrs. Hetalben R Desai/The assessment for A.Y.2004-05 is being reopened separately on this issue. assessee has later sold these lands : (a) at Survey No.51, Block 559/B admeasuring 31,869 sq. m. to S/Shri.Dhirubhai Arjanbhai Patel, Chandubhai Parbatbhai Dabaria and Shaileshbhai Parbatbhai Dabaria. transaction led to payment and receipt of cash at Rs.55.5 lakhs which has been admitted by both seller and purchasers. assessments of three purchasers is being reopened u/s 147 separately. Thus assessee sold land @ Rs.214 per sq mtr. [Rs.12,75,000 + 55.5 lakh/31,869= 68,25,000/31869] (b) land at Survey No.51, Block 42; 9915 sq.mtr. to Shri. Narayanbhai Parshottambhai Mayani on 27-06-2005 for documented price of Rs.2,00,000/- @ Rs.20 per sq mtr which is less than jantry value. addition as per section 50C on this transaction comes to Rs.3,04,732/-.No disclosure was made on this transaction . two pieces of land were worth Rs.7 crores @ of Rs.1675 per sq mtr [ 7 cr/(31869+9915)= 7cr/41784] as per allegation. However same were claimed to be purchased by assessee including unaccounted investment at Rs. 105 per sq mtr,[(9915+31869)41,784sq.m. = (Rs.1,48,725+38lakhs+Rs.4,78,035)/41784= 44,26,760/41784=Rs. 121]. Thus there is huge difference of 1569 per sq mtr.( Rs.1675-105) in investment. ITA No.2011 and 2012/Ahd/2013 8 assessee also claims to sell land at Block 559/B admeasuring 31,869 sq. m. @ @ Rs.214 per sq mtr. and that at Block 42 admeasuring 9915 sq.mtr @ Rs.20 per sq mtr (no disclosure). Both of which are less than value of land as alleged to be Rs.1675 per sq mtr .Therefore ADIT(Inv.) has suggested that exact value of two pieces of land should be determined by Valuer to determine quantum of unaccounted investment and income of assessee . table below shows assessee's transactions .for A.Y.2006-07 from report:- Karsanbhai D. Kakdia sells to Narayanbhai Parshottambhai Mayani-9915 sq.m.; Binpiyat Agri land. Sr Details Document Stamp @Jantri Computed Capital Gain of land sold Value and Date duty paid + rate market value for purpose Extra Levied (Area x Jantri of Section 5OC = Total Rate ) 3 Survey Rs. 2, 00,0007- 17,000 + Rs.50 Rs.5,04,732 Rs. 3, 04,732 No. 51, 27-06-2005 24,650 per sq Block 42; m. 41,650 @8.4 % Karsanbhai D. Kakdia sells to Dhirubhai Arjanbhai Patel, Chandubhai Parbatbhai Dabaria and Shaileshbhai Parbatbhai Dabaria 31,869 sq. m,; Binpiyat Agriculture land Survey Rs. 12, 75, 1,07,100 + Rs.50 Rs.15,93,45 0 Rs.3,18,450(assesse No.51, OOO/-15-10- Unknown @ per sq e has accepted that Block 2005 8.4 % m. it has received Rs. 559/B; 55.5 lakhs cash for land only at block no. 559B block) *Disclosure of Rs.55.5 lakhs was made on land at Block 559B admeasuring 31,869 sq.mtr. Therefore Rate of land sold = (Rs. 12,75,000+55.5 lakhs /31869=68,25,000/31869 = Rs.l84 per sq. mtr - In view of above, I am of opinion that assessee's unaccounted investment is much more than what he has admitted for A.Y. 2006-07. Hence, case needs re- ; opening u/s. 147 of I.T. Act, 1961. Sd/- Place: Surat (Sanjay V. Deshmukh) ITA No.2011 and 2012/Ahd/2013 9 Date : 12.10.2010 Dy. Commissioner of Income-Tax Circle-9, Surat REASONS FOR REOPENING CASE OF Shri.Karsanbhai O. Kakadia (PAN:- AMXPK2145H ) for A.Y.2004-05 ADIT(Inv.) Unit-II Surat has forwarded his report on enquiry of TEP conducted in case of Hetalben R. Desai and Others vide letter dated 31- 8-2010. TEP was regarding allegation that two pieces of land (at Survey No.51, Block 559B admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m.) together worth Rs.7 crores sold was sold at very low prices by one Mrs. Hetalben R Desai to some individuals .The report states that sale of said land by Hetalben and subsequent holders resulted in transfer of unaccounted money which was accepted under oath before ADIT. amount of disclosures of unaccounted money grossing upto Rs.1.61 crores was made as below:- Sr. Names PAN Unaccounted A.Y. income admitted (lakh Rs.) 1 Hetalben R. Desai Applied for 35.00 04-05 2 Shri Karsanbhai kakadia AMXPK2145H 50.00 04-05 3 Shri Karsanbhai Kakadia -do 9.5 06-07 (Capital Gain Tax) 4 (Commission) AIUPG7353E , 11.00 04-05 06-07 5 Sfiri Shaiieshbhai AAUPD7630F 13.875 06-07 Parbhatbhai Dabaria 6 Shri Chandubhai AAUPD7631E 13.875 06-07 Parbhatbhai Dabaria 7 Shri Dhirubhai @ ADGPP3559G 27.75 06-07 Dhirajlal Arjunbhai Patel Total 161.00 As per report assessee individual Shri. Karsanbhai D. Kakadia had made unaccounted investment of Rs. 38 lakhs in cash for purchase of land (on 15-04-2004) at Survey No.51, Block 42, Survey No.51, Block 559B ITA No.2011 and 2012/Ahd/2013 10 admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m. Block 559B admeasuring 31,869 sq.mtr . assessee has admitted that he had paid Rs.38,00,000/- in cash to seller Mrs. Hetalben R Desai. two pieces of land were worth Rs.7 crores @ of Rs.1675 per sq mtr [ 7 cr/(31869+9915)= 7cr/41784] as per allegation. However same were claimed to be purchased by assessee including unaccounted investment at Rs. 105 per sq mtr,[(9915+31869)41,784sq.m. = (Rs.1,48,725+38lakhs+Rs.4,78,035)/41784= 44,26,760/41784=Rs.121]. Thus there is huge difference of 1569 per sq mtr.( Rs.1675-105) in investment. In view of above, I am of opinion that assessee's unaccounted investment is much more than what he has admitted for A.Y. 2004-05. Hence, case needs re- opening u/s. 147 of I.T. Act, 1961. Sd/- Place: Surat (Sanjay V. Deshmukh) Date : 12.10.2010 Dy. Commissioner of Income-Tax Circle-9, Surat Accordingly, ld.AO has reopened assessment and initiated assessment proceedings. ld.AO thereafter passed assessment order on 22.12.2011 in Asstt.Years 2004-05 and 2006-07 respectively under section 143(3) r.w.s 147 of Income Tax Act. 9. Dissatisfied with reopening of assessment, assessee carried matter before ld.CIT(A). But appeals to ld.CIT(A) did not bring any relief to assessee in both years. 10. ld.counsel for assessee, while imputing orders of Revenue authorities contended that there was no material with AO in case of assessee (individual) to harbor belief that income chargeable to tax has escaped. He pointed out that return in case of HUF was filed on 29.3.2006 for Asstt.Year 2004-05. assessee has shown both pieces of land in balance sheet. DDIT has conducted inquiry on 22.3.2007. assessee agreed on unaccounted investment in this land. ITA No.2011 and 2012/Ahd/2013 11 assessee has filed revised computation in HUF and also paid taxes of Rs.4.70 lakhs in four instalments. This tax was paid in HUF. All these things have been happened prior to recording of reasons for reopening of assessment. ld.counsel for assessee took us through copies of reasons available on page no.41 to 45 of paper book. He contended that in Asstt.Year 2006-07, ld.AO has worked out unaccounted monies upto Rs.1.61 crore. This is totally erroneous conclusion. Unexplained investment did not cross Rs.55 lakhs. Since four transactions have been made with regard to purchase and sales, ld.AO has multiplied it with each transaction. unaccounted income otherwise would not go beyond Rs.54 lakhs. AO, thereafter, made reference to suggestion of ADIT that exact value of two pieces of land is not determinable, and therefore, it should be referred to DVO for determination of quantum of unaccounted investment. AO reopened assessment without making any reference to DVO and without pointing out how much is unexplained investment. During course of assessment proceedings, ld.DVO has submitted report, and according to him, value of land was Rs.19.12 lakhs for block no.559 at time of purchase i.e. as on 15.3.2004 and Rs.22.31 lakhs at time of sale i.e. as on 10.10.2005. HUF of assessee has shown value in sale deed at Rs.4,78,035/- and Rs.12,75,000/- at time of purchase and sale respectively. value for block no.42 was determined by DVO at Rs.5,95,000/- and Rs.7,93,000/- as against Rs.1,48,725/- and Rs.2,00,000/- shown by assessee at time of purchase and sale respectively. Whereas, assessment was sought to be reopened on allegation that value of land was more than Rs.7 crores. After appraising us above factual position, ld.counsel for assessee submitted that AO was not possessing any material to harbor belief that income chargeable to tax has escaped assessment. He has not applied independent mind on material available with him, rather, he proceed with suggestion of ADIT which was ITA No.2011 and 2012/Ahd/2013 12 mere information. Thus, there was no satisfaction at end of AO. It is borrowed satisfaction. In support of his contention, he relied upon decision of Hon ble Gujarat High Court in case of Manju Shah Estate Pvt. Ltd. Vs. ITO, 314 ITR 263. He also relied upon decision in case of ACIT Vs. Dhariya Construction, 328 ITR 515. On strength of these decisions, it was contended that even on basis of DVO s report, assessment cannot be reopened. 11. With regard to action of AO in proceeding mechanically without making any analysis of information, he relied upon following decisions: i) Rasalika Trading & Investment Co. P.Ltd. Vs. DCIT & Anr. (2014) 365 ITR 447 (Del.) ii) IT Vs. SFIL Stock Broking Ltd. (2010) 325 ITR 285 (Del) iii) Signature Hotels P.Ltd. Vs. ITO, & Another (20111) 338 ITR 51 (Del) iv) Sarthak Securities Co.Ltd. Vs. ITO (2010) 329 ITR 110 (Del) v) ITO Vs. On Exim Pvt.Ltd. ITA No.1116/del/2011 12. In his next proposition, he contended that assessment was sought to be reopened on premises that unexplained investment of more than Rs.7 crores was made by assessee. But ultimately, AO has not made any addition on account of this premise. He did not make any addition on basis of DVO s report, which has been suggested by DDIT. He made addition only on basis of alleged disclosure of assessee before DDIT in statement recorded under section 131 of Act. Therefore, according to ld.counsel for assessee, AO was not justified in making addition, if no addition has been made on basis of his reasons. In support of his conclusions, he relied upon decision of Bombay High Court I case of CIT Vs. Jet Airways (I) Ltd., 331 ITR 236 (Bom) and CIT Vs. Mohmed Juned Dadani, 214 taxmann 0038 (Guj). On strength of these decisions, it was contended that expression and also has been ITA No.2011 and 2012/Ahd/2013 13 employed in section 147 which requires that if during course of re- assessment proceedings, any other information came to possession of AO exhibiting escapement of income, then that other income could also be assessed. According to these decisions, this expression and also would authorize AO, if he has made addition of income for which assessment was reopened. If he has not made any addition on reasons for which assessment was reopened, then, he cannot make addition of income which came to his notice during re-assessment proceedings. In this way, ld.counsel for assessee contended that re-assessment is not sustainable, and reassessments are deserved to be quashed in both years. 13. On other hand, ld.DR contended that at time of recording his statement by DDIT, assessee has not disclosed that investment was made in hands of HUF. Therefore, AO was justified to reopen assessment. AO has made analysis of information submitted by DDIT, and thereafter, arrived at conclusion that income chargeable to tax has escaped assessment, and AO has rightly taken action against assessee. 14. In rebuttal, ld.counsel for assessee contended that he has filed objections against reopening of assessment. Notice under section 148 for Asstt.Year 2004-05 was issued on 12.10.2010. assessee has filed letter on 19.12.2011 submitting therein that return filed on 12.10.2004 may be treated as return filed in response to above notice. assessee has also filed objection against reopening of assessment, and those objections have not been dealt with by AO. 15. We have duly considered rival contentions and gone through record carefully. It is seen that notice under section 148 was issued on 12.10.2010 which was served upon assessee on 14.10.2010. assessee ITA No.2011 and 2012/Ahd/2013 14 did not file return in response to notice. AO has put assessment machinery in motion by issuance of notice under section 143(2) and 142(1) of Act. These notices were issued in month of August, 2011. Thereafter, assessee alleged to have filed return on 19.12.011. assessment order has been passed on 22.12.2011. If assessee did not file return, then assessment is not depended upon action of assessee. AO has to pass assessment order within limitation. If assessee files objections against reopening of assessment on last date of expiry of limitation, AO cannot be expected to dispose of objections, because, he has already set assessment machinery in motion, and he was at verge of completion of assessment order. In this case, we do not see any irregularity for not disposing of that objection filed by assessee against reopening of assessment. On this reason, proceeding cannot be quashed. 16. bare perusal of section 147 would indicate that this section contemplates that if AO has reasons to believe any income chargeable to tax has escaped assessment for any assessment year Meaning of above would be that there should be reason to believe that any income chargeable to tax has escaped assessment. Now, question is how reasons to be formulated. What will help AO to believe about escapement of income from taxation. This belief cannot be made in air. There should be some deductive or inductive material for persuading AO to form opinion that, income has escaped assessment. Such material should have direct nexus between escapement of income and formation of belief. In other words, on analysis of any material, if prudent man or trained income-tax officials could believe about existence of fact that income has escaped, then, he would be authorized to issue notice under section 148 of Income Tax Act. Let us make analysis of reason recorded by AO and extracted supra. As far as first page of reason are concerned, it is ITA No.2011 and 2012/Ahd/2013 15 verbatim same in both years. It contained details of land, and how such land was purchased by assessee in Asstt.Year 2004-05 and sold in Asstt.Year 2006-07. only line in whole details is that ADIT was of view that value of land of two pieces was not less than Rs.7 crores. At cost of repetition, we would like to make reference of following lines from reasons recorded for Asstt.Year 2004-05. two pieces of land were worth Rs.7 crores @ of Rs.1675 per sq mtr [ 7 cr/(31869+9915)= 7cr/41784] as per allegation. However same were claimed to be purchased by assessee including unaccounted investment at Rs. 105 per sq mtr,[(9915+31869)41,784sq.m. = (Rs.1,48,725+38lakhs+Rs.4,78,035)/41784= 44,26,760/41784=Rs.121]. Thus there is huge difference of 1569 per sq mtr.( Rs.1675-105) in investment. In view of above, I am of opinion that assessee's unaccounted investment is much more than what he has admitted for A.Y. 2004-05. Hence, case needs re- opening u/s. 147 of I.T. Act, 1961. 17. In this line, ADIT was not confirmed about value of land, he simply observed that two pieces of land purchased by assessee are alleged to be worth of Rs.7 crores. Since, he was not sure about this allegation, therefore he gave advice to AO that it is to be verified from departmental valuer. That is why, in last line, he suggested that extent of value of two pieces of land should be determined by valuer. To this extent, there was no material with Revenue to say that unexplained investment was made by assessee in his individual cases. ADIT who has investigated assessee has suggested for obtaining DVO s report. ld.AO ought to have first obtained report, then visualize in light of that report. Thus, at time when he has recorded reasons for reopening of assessment he was not possessing any material in individual cases of assessee. DVO has submitted his report on 5.12.2011 and valued land at Rs.19.12 lakhs for Block No.559/B at time of purchases and Rs.22.31 lakhs at time of sale i.e. on 18.10.2005. In case of HUF, ITA No.2011 and 2012/Ahd/2013 16 assessee has already shown value of investment at Rs.55 lakhs. He has already paid tax of Rs.4.70 lakhs in instalments. He has shown this land in HUF much prior to investigation started by DDIT. He has paid taxes on account of alleged unexplained investment by way of revised computation. All these steps were taken by assessee three years prior to recording of reasons by AO. Once alleged land was shown in balance sheet of HUF, taxes were paid in hands of HUF, and then how that very alleged unexplained investment can be considered in hands of individual ? AO has not verified any facts from record, and he simply reproduced information came from ADIT and issued notice under section 147. As observed earlier, even ADIT was not sure about quantum of alleged unexplained investment as well as in status of assessee in whose hand it is to be assessed. Quantum was apprehended at Rs.7 crores, but was subject to verification from DVO and suggestion was made to this effect by ADIT. In spite of that, ld.AO did not bother to collect information for harbouring belief that income chargeable to tax has escaped assessment. On overall evaluation of material available on record, we are of view that live link is totally missing between material available with AO for formation of belief that income chargeable to tax has escaped. Therefore, we allow this ground of appeal in both years and quash re-assessment orders. 18. In result, appeals of assessee are allowed. Order pronounced in Court on 13th October, 2016 at Ahmedabad. Sd/- Sd/- (MANISH BORAD) (RAJPAL YADAV) ACCOUNTANTN MEMBER JUDICIAL MEMBER Ahmedabad; Dated 13/10/2016 Karshanbhai Dahyabhai Kakadia v. ITO, Ward-9(2) Surat