TMI Blog2017 (1) TMI 1719X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, he cancelled the agreement. Thus, the onus cast upon the assessee was duly discharged. Rather, the onus cast upon the Assessing Officer was never discharged and he picked up one letter from 219 buyers and made proportionate addition in the hands of the assessee for the remaining buyers also. This type of approach cannot be said to be justified unless and until the same is substantiated with evidence. - Decided in favour of assessee. - ITA No.1484/Mum/2013 - - - Dated:- 31-1-2017 - Shri Joginder Singh, Judicial Member, and Shri Ramit Kochar, Accountant Member Assessee by: Shri S.C. Tiwari Ms. Rutuja Pawar Revenue by: Smt. Ramapriya Raghvan-DR ORDER Joginder Singh, The assessee is aggrieved by the impugned order dated 10/12/2012 of the Ld. First Appellate Authority, Mumbai. The assessee has filed concise grounds of appeal, wherein, the first ground pertains to treating the amount of ₹ 8,55,000/- as undisclosed income of the assessee by way of alleged suppression of receipts from Mr. Devendra Singh Tomar. 2. During hearing, Shri S.C. Tiwari, ld. counsel for the assessee along with Ms. Rutuja Pawar, explained that, as per Revenue, one C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of facts is true unless rebutted by material. For which, reliance was placed upon the decision in COMMISSIONER OF INCOME TAX vs. DAULAT RAM RAWATMULL 87 ITR 349 (SC), COMMISSIONER OF INCOME TAX vs. U.M. SHAH, PROPRIETOR, SHRENIK TRADING CO. 90 ITR 396 (Bom.) and COMMISSIONER OF INCOME TAX vs. BEDI CO. PVT. LTD. 230 ITR 580 (SC). 2.1. On the other hand, the ld. DR, Ms. Ram Priya Raghvan, contended that statement was recorded for which our attention was invited to page-6 of the paper book and there was no evidence on record that Mr. Tomar negotiated the price on such a down payment and there was no reason of sharp fall in prices. It was contended that there was no evidence, put on record by the assessee, contravening the stand taken in the assessment order. 2.2. In reply, the ld. counsel for the assessee, asserted that the Assessing Officer did not record the statement of any person/buyer even after affidavit was filed by the assessee by contending that unless and until actual money is given/transacted, there is no evidence on record on the basis of which addition can be made. 2.3. We have considered the rival submissions and perused the material available on record. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the assessment year under consideration. 2.5. The aggrieved assessee challenged the matter before the Ld. Commissioner of Income Tax (Appeal). However, the Ld. Commissioner of Income Tax (Appeal) affirmed the stand taken in the assessment order. The assessee is in appeal before this Tribunal. 2.6. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we find that the assessee vide letter dated 16/12/2011 made certain submissions and the part of which has been reproduced at page-3 onwards of the assessment order. As per the reply, flat no. 101 was booked by Mr. Devendra Singh Tomar in July, 2008 and the terms and conditions of all the buyers are same as per the policy of the assessee company. Building no. D2 was under construction and the assessee asked the purchaser for instalments at certain stages as laid down in Maharashtra Ownership Flats Rules 1964. As per the assessee, on completion of each stage, the purchasers are informed in writing with respect to instalments to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to obtain bank loan. The agreement with Mr. Tomar was signed and registered with Sub Registrar, Thane. 12. Mr. Tomar paid the balance amount of ₹ 48, 18, 0001- in three instalments in the month of May 2009. 13. I also state that we have not received any amount towards sale consideration on our abovementioned flat over and above ₹ 49,18,000/- as agreed mutually with Mr. Tomar. 2.7. The letter of Mr. Devendra Singh Tomar along with affidavit was filed. The relevant extract of the affidavit are reproduced hereunder:- 3. I say that I purchased residential flat admeasuring around 1290 square feet at Thane in the building named Hyde Park, Building NO D-2, Flat NO 101 on the 1st floor from M/s. Nexus Builders Developers Pvt. Ltd. ( the company ) for a lumpsum consideration of ₹ 49,18,000/-. 4. I had approached the said company somewhere in July 2008 to inquire the price of the flat. After several meetings and discussion we agreed at a price of (₹ 49,18,000/-. I paid a sum of ₹ 11,000/- on or around 08.07.2008 and ₹ 89,000/- on or around 15.06.2008 aggregating to ₹ 1,00,000/- as token money for booking of the said flat. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was specifically sworn that no underhand amount was received except the total amount of ₹ 49,18,000/- as mutually agreed with Mr. Tomar. Mr. Tomar also filed an affidavit substantiating the factual matrix as discussed hereinabove. The totality of facts clearly indicates that the assessee discharged his onus and the Assessing Officer neither recorded the statement of Mr. Tomar nor brought on record any evidence in support of the addition. It was the duty of the Assessing Officer to support his view either by bringing any evidence, proving that the market rate at a particular time was much higher or any evidence either from the same building or from the nearby building that any identical flat was sold/purchased at a higher value. Even the Assessing Officer never recorded the statement from any of the remaining buyers to substantiate his addition. The value mentioned in the registered sale document was neither found to be false nor any other document was brought on record contradicting the claim of the assessee. When the assessee explained the factual matrix supported by evidences like registered sale deed, supported by the affidavits, then it was the duty of the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises. Likewise, if the Court of fact bases its decision partly on conjectures, surmises and suspicions and partly on evidence, in such a situation an issue of law arises.- Sree Meenakshi Mills Ltd. vs. CIT (1957) 31 ITR 28 (SC) : TC54R.211#1, Dhirajlal Girdharilal vs. CIT (1954) 26 ITR 736 (SC) : TC54R.297, Mehta Parikh Co. vs. CIT (1956) 30 ITR 181 (SC) : TC54R.300 followed; Edwards (Inspector of Taxes) vs. Bairstow (1955) 36 Tax Case 207 : (1955) 28 ITR 579 (HL) applied. Conclusion : Findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come; and this is so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribunal. Benami-Benami property fixed deposit in the name of son of partner-Merely because the explanation was found false, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the ownership of the amount in fixed deposit. Sureties quite often offer security without receipt of consideration from the principal debtor. So far as the present case is concerned, one cannot be oblivious of the fact that B offered security for the overdraft facility to a firm of which his father was a partner. In the circumstances, the fact that B received no consideration for offering the fixed deposit receipt as security for the overdraft facility would not result in any inference against the respondent. The onus to prove that the apparent is not the real is on the party who claims it to be so. As it was the Department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of B, the burden lay on the Department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B. A simple way of discharging the onus and resolving the controversy was to trace the source and origin of the amount and find out its ultimate destination. So far as the source is concerned, there is no material on the record to show that the amount came from the coffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho had advanced moneys to him and the amounts borrowed from them. All these bankers were themselves income-tax assessees and the present assessee had also given their G.I.R. numbers as recorded in the IT Office. (6) Summonses to those hundi bankers as also the brokers were duly served. (7) Those bankers had submitted confirmatory letters before the ITO confirming having made the advances to the assessee. Now the conclusion which the Tribunal reached was that upon this material there was absolutely no suspicion or doubt regarding these loans and that they were perfectly genuine and could not be held to be the undisclosed income of the assessee. This finding given by the Tribunal was a pure finding of fact. The Tribunal also remarked that the ITO had not brought on record any evidence to show that the evidence which the assessee had adduced was incorrect or untrue in any manner. That again shows that the finding arrived at by the Tribunal was based purely upon appreciation of evidence and that no question of law arises out of that finding. Conclusion : Tribunal upon appreciation of evidence taking the view that upon the material or evidence which had been produced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal was not justified in coming to the conclusion that it could be assessed as income. The High Court has rightly held that the circumstances taken singly or cumulative did not justify the conclusion that the amount was not received as loan as it purported to be but was anything in the nature of commission or any receipt of business. In arriving at the conclusion to which it did, it was necessary for the High Court to refer to the facts and discuss them to answer the mixed question of facts and law and that is what the High Court had done. The facts on record apparently indicate that the transaction was one of loan. The circumstances relied upon by the Revenue, namely, that the loan had been advanced without security, that the loan had not been repaid and no interest on the loan was paid by the assessee and that the agreement of loan was executed contemporaneously with other two agreements with regard to supply of machine and construction of building for the paper mill cannot, without any further material, lead to the inference that the amount was not loan but business income. It appears that the last mentioned circumstance supports the plea of the assessee that the said am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period November, 1993, onwards. During the course of the search operation it was noticed that the cash book of the assessee was prepared on the basis of the cash deposits in bank and on the basis of paying-in-slips. When the cash book was compared with the registration book, it was noticed that the number of candidates reflected in the cash book and the corresponding fees received were not fully reflected in the cash book. However, in the return of the income filed for the block period, the amount of undisclosed income offered for taxation has been given both for the pre-November, 1993 and post-November, 1993. The question before this Court briefly on the facts which has been raised is whether the AO was right in estimating the undisclosed income by applying the post-1993 weighted average rate of income to the period 1983 upto November, 1993. In this connection it is stated that the assessee was registered as a panel doctor for Saudi Consulate in 1984. In 1986 and 1991, he was registered as a panel doctor for Qatar and Kuwait Consulates, respectively. The case of the assessee before the Tribunal was that during the earlier period of his practice the work relating to the medical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any evidence/basis. This is a pure finding of fact. We also agree with the said finding. 7. Before concluding we may mention that in all matters of block assessment, the Department heavily relies upon the judgment of the Supreme Court in the case of CST vs. H.M. Esufali H.M. Abdulali 1973 CTR (SC) 317 : (1973) 90 ITR 271 (SC). That was a case in which unreported sales were detected for a period of 19 days in a year. The AO estimated the turnover for the entire period of one year on the basis of the unreported sales for the period of 19 days. The question that arose before the Supreme Court is as to whether the AO was right in doing so. It was held by the apex Court that in a matter involving unreported sales, the AO has to proceed on the basis of estimation which involves some amount of guess work. The apex Court, accordingly, upheld the order of the AO in estimating the turnover on the basis of the unreported sales for a shorter period. However, in the present matter, we are concerned with the block assessment of ten years. Ultimately, the said judgment of the Supreme Court must be seen in the context of the facts of each case. In the present matter, the assessee is a profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which could account for 45 other notes of that high denomination, thus making up 63 currency notes of the high denomination of ₹ 1,000 and these 61 currency notes of ₹ 1,000 each, which the appellants encashed on 18th Jan., 1946, could as well have been in their custody on 12th Jan., 1946. This was, however, considered impossible by both ITO and the AAC as they could not consider it within the bounds of possibility that each and every payment received by the appellants after 2nd Jan., 1946, in multiples of ₹ 1,000 or over ₹ 1,000 was received by the appellants in high denomination notes of ₹ 1,000 each. It was by reason of their visualisation of such an impossibility that they negatived the appellants' contention. It has to be noted, however, that beyond these calculations of figures, no further scrutiny was made by the ITO or the AAC of the entries in the cash book of the appellants. The cash book of the appellants was accepted and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
