TMI Blog2000 (3) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Satpal Garg had assisted his brother Shri Rajender Garg in the property transaction. Based on this information, the residence of Shri Satpal Garg was covered by search and seizure operation. The assessee in question was served with a notice under s. 158BC which was issued on14th Jan., 1997in response to which return of income for block assessment in Form No. 2B was filed on23rd Dec, 1997declaring undisclosed income as nil. Notice under s. 142(1) and a questionnaire both, dt.27th Nov., 1997were served on the assessee requiring him to furnish his clarifications and explanations duly supported by corroborating evidence. The AO completed the block assessment and passed order on30th Dec, 1997computing the undisclosed income at Rs. 1,07,60,653. The major addition was made on the basis of an agreement made on16th Sept., 1996between the assessee and three other persons, namely, Shri Rajender Kumar, Shri Raj Guru and Shri Kulwant Rai for the sale of property bearing House No. 39 at Chanderlok, Pitampura,Delhi, measuring 361 sq. yds. at a total consideration of Rs. 1.10 crores. Before adding profit on account of this property, the AO examined on oath, the said Shri Kanta Prasad, (friend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the ground floor for a consideration of Rs. 4.80 lakhs sold to four persons, namely, Shri Darshan Kumar, Shri Rameshwar Dass, Shri Om Prakash and Shri Raj Kumar; and the other for first floor at a consideration of Rs. 4.50 lakhs sold to Shri Rajender Kumar. It was contended by the learned counsel that there was no identity between the names as included in the sale deeds on one hand and the agreement of sale on which the Department was placing reliance on the other hand. It was further stated that as against sale of the property as one composite unit according to the agreement, the said property was actually sold in two components by way of two separate registered sale deeds. It was the case of the assessee that the property in question was purchased only one-and-a-half year back at a consideration of Rs. 8 lakhs and there was no justification in assuming that the very same property might have been sold for Rs. 1.10 crores within a very same property might have been sold for Rs. 1.10 crores within a very short span of time. It was also contended by the learned counsel that the Department proceeded to make addition on the basis of statements of Shri Kanta Prasad, Shri Satpal Gar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, the said income shall not be included in the block period." 7. The provisions contained in s. 158BB(1)(d) are almost to the same effect. A bare perusal of s. 158BA(3) makes it clear that in order to be covered under this section, it is necessary that the income or the transactions relating to such income are recorded on or before the date of search in the books of accounts or other documents maintained in the normal course. Since, the assessee was not subjected to income-tax at any earlier occasion, the question of maintaining books of accounts does not arise. Now, the only thing that remains in the said section is the word "documents". It thus brings us to the conclusion that if the assessee is to be covered under s. 158BA(3), the transaction must be included in the documents on or before the date of search. The "document" in the present case are "agreement to sell" and registered sale deeds. As per the "agreement to sell", the consideration is stated at Rs. 1.10 crores. Whereas registered sale deeds contained the figure of sale consideration at Rs. 9.30 lakhs and further the assessee, at the time of search stated that the property in question was sold for Rs. 38 lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t floor. There is also force in the arguments of the learned counsel that none of the buyers as per sale deeds or proposed buyers as per the agreement were examined by the AO for establishing the factum of undisclosed income and further no valuation was got done by the Department to establish that the consideration as stated in the agreement represents the real value of the property. Under these circumstances, we are of the view that no cognizance can be taken of this agreement to sell. Even otherwise it is the case of the assessee that the statements of the three persons used against him were not confronted to him. Therefore these statements deserve to be excluded from consideration while deciding the issue. 10. The immediate next question, which then arises is that, what is the amount of undisclosed income in this transaction, it any. Answer to this question can be easily obtained from the statement of the assessee at the time of search wherein he admitted sales consideration at Rs. 38 lakhs and further the return filed by him under s. 139(1) wherein he had shown the sale consideration at Rs. 38 lakhs. 11. Under these circumstances, we direct the AO to compute the undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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