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TMI Blog2004 (6) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved in betting and fixing of matches, a search action was conducted under s. 132(1) of the IT Act at the residence of the assessee, i.e., at R-10, Nehru Enclave, New Delhi. The first operation of search was conducted on 20th July, 2000, and, thereafter the last on 25th July, 2000, on which date locker of the assessee was also searched. During the course of search at the residence of the assessee certain documents were found and seized. Page 25 of Annex. A3 was a document which contained a commission account. The figures mentioned on this document were as under: Rs. Gurgaon 2 plots (sold) 20,000 Sarvpriya Vihar flat 66,000 Oasis (Suraj Kund road) 30,000 GK-I basement 56,000 1,72,000 4.2 In relation to this document, which was marked as Annex. A3, the statement of the assessee, namely, Shri Manoj Prabhakar, was recorded on 18th Sept., 2000. The relevant question and answer in this regard is as under: "Q. 22. Page No. 25 of Annex. A3 mentions commission account which mentions a commission of Rs. 1.72 lakhs for four properties. Please explain the paper? A. 22. This is an account given by Mr. Parvesh Kochhar of G-12, Bajaj House, 97, Nehru Place, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction of the Oasis (Suraj Kund Road) property transaction. A. 11. Sh. Manoj Prabhakar has purchased a suite in 'K' Block of Hotel Hill view. Though initially the agreement was for Rs. 7,50,000 but subsequently some other payments were made and hence the total consideration increased to Rs. 15,00,000 which has been paid by Sh. Manoj Prabhakar. Q. 12. Please give details of the property GK-I, basement. A. 12. Sh. Manoj Prabhakar and Mrs. Simmi Prabhakar purchased the rear portion of basement of R-65, GK-I,N. Delhi, from Mr. Mishore Taklu of M/s Matang Builders for a total consideration of Rs. 28,00,000. This amount has been paid by Sh. Manoj Prabhakar. Q. 13. Please give details of the two plots (sold) at Gurgaon. A. 13. There were two plots of 200 sq. yards each in Sector 15, Gurgaon, owned by Mr. Manoj Prabhakar and Mrs. Simmi Prabhakar. These were sold in 1993-94 to some buyers the names, I don't remember, for consideration of Rs. 5,00,000 each." 4.4 On the basis of the statement of Shri Parvesh Kochhar, the AO inferred that the sale consideration of properties purchased by the assessee was much more than shown in the sale deeds. He, therefore, furnished a copy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchaser of two plots of Gurgaon, the purchase price of which was approximately Rs. 5,00,000 for each plot and out of the bill of Rs. 20,000 he received only Rs. 10,000. Regarding sale consideration of Sarvpriya flat, he disclosed that it was Rs. 33 lakhs and he billed the commission account accordingly. He also stated that he did not know the exact finally negotiated price. After his cross-examination the assessee submitted further additional submissions vide letter dt. 19h July, 2002, which are as under: "Proprietor of estate agency M/s Good Luck Estate was present when the IT authority conducted survey on the premises of M/s Good Luck Estate. Therefore, the rightful person to address the seized papers was the proprietor and not Sh. Kochhar who was helper of the estate agency. As per the cross-examination Mr. Kochhar has no clue of the negotiated amount of the above properties. It was submitted that Sh. Kochhar claims that assessee had paid Rs. 33 lakhs for purchase of property at Sarvpriya Vihar and during cross-examination he denies having knowledge about the quantum of physical payment to the deal of Sarvpriya Vihar and other properties. It was submitted that in the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned who signs as a witness in the sale-purchase agreements. Statement of Sh. Parvesh Kochhar only has been recorded as he was the person in whose handwriting the commission a/c is written. It is to be noted that his father, who is the proprietor of Good Luck Estate was present during the course of survey under s. 133A of IT Act and still statement of Sh. Parvesh Kochhar was recorded, as he was the person who acted as property dealer in the sale-purchase transactions of assessee. (b) Assessee has stressed upon the consideration recorded in the sale-purchase deed and has also requested to cross-verify its correctness from other party involved in the deal. Assessee's reliance on the sale deed, though beneficial from his own point of view is out of context. It is common knowledge that property deals are done actually at a higher value than the consideration recorded in sale deed to avoid stamp duty as well as income-tax. Obviously, the sale deed would show the value shown to the Department and not the amount exchanged underhand. Similarly, the other party will also confirm the sale deed consideration only as it has also evaded tax in its own case. When evidence has been found whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the books of accounts. (e) The contention that no amount was paid by assessee as commission also doesn't help assessee as for this reason only commission a/c was prepared and given to Sh. Prabhakar by Sh. Kochhar mentioning that such and such amount was due from the assessee. The fact that Sh. Prabhakar preserved this paper proves that it contained as unsettled account of real transactions. (f) Another point raised by assessee is as to how the commission agent was dealing with him when no payment was forthcoming. A commission agent may keep dealing with the agent getting commission from the vendor and the hope that vendee will pay the commission at a later date, etc. In fact, it has been categorically stated by Sh. Kochhar in his cross-examination that he had received commission of Rs. 10,000 on account of sale of two Gurgaon plots from other party involved and as Sh. Prabhakar was a sports personality, therefore, Sh. Kochhar helped him as he was sure that Sh. Prabhakar will definitely pay commission to him. (g) As to the submissions that the commission entry was not shown as a receivable, it is a common practice that commission on the actual consideration will not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s he was the proprietor of M/s Good Luck Estate. (iii) Shri Parvesh Kochhar was neither employee of the firm nor executed any agreement of commission with the assessee. Shri Parvesh Kochhar did not receive any amount from the assessee on account of commission. (iv) Shri Parvesh Kochhar was witness to the sale deeds which proved the sale consideration and any statement given by him contradictory to the version in the sale deed, which is a documentary evidence, has to be rejected. Otherwise also, Shri Parvesh Kochhar has stated that he did not know the finally settled or negotiated price. Thus, Shri Kochhar denied to have any knowledge of payment of Rs. 33 lakhs so far as Sarvpriya property is concerned. It is strange that an amount of Rs. 1,72,000 was left for recovery by Shri Kochhar. This also shows that the amount was not really demanded and at the most it was only a calculation or rough work. (v) The persons from whom these properties were purchased were not examined. (vi) The properties were not put for valuation by the Departmental valuer or any other valuer. (vii) The document found and seized was not in the nature of bill and although Shri Kochhar was assessed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand Surana vs. Asstt. CIT (2001) 71 TTJ (Hyd) 456 : (2001) 76 ITD 423 (Hyd); (vi) Redhey Shyam Tanwar vs. Asstt. CIT (2002) 77 TTJ (Jd) 505; (vii) Chitra Devi vs. Asstt. CIT (2002) 77 TTJ (Jd) 640; (viii) Jinka Plaza vs. Asstt. CiT (2002) 77 TTJ (Bang) 327 ; and (ix) P.K. Ganeshwar vs. Dy. CIT (2002) 80 ITD 429 (Chennai). 9. We have carefully considered the entire material on record and the rival submissions. The learned counsel for the assessee invited our attention to the valuation report which has been filed in the paper book. The assessee has obtained this report for showing the value of the properties purchased by the assessee. On the basis of the certificate given on the paper book it is found that the valuation report was not before the AO nor before the learned CIT(A). Hence, the evidence in the form of valuation report has been filed for the first time before the Tribunal. It is, therefore, obvious that the Department did not have any opportunity to controvert this evidence. In the interest of justice, such evidence cannot be considered unless the other side is provided an opportunity to rebut the same. 9.1 The AO has made the addition of Rs. 24,03,000 and Rs. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter to the file of AO for fresh adjudication. Accordingly, orders of authorities below on the issue in question are set aside and the matter is restored to the file AO to decide the issue afresh after making proper investigation and enquiry. While doing so, the AO shall also take into consideration the valuation report mentioned above and shall deal with the same accordingly and as per law. Accordingly, ground Nos. 2 and 3 stand allowed for statistical purposes. 10. Ground No. 4 : This ground has been taken to challenge the sustenance of addition of Rs. 9,65,000 on account of the payments received from bookies. The AO has worked out the addition on the basis of details given on pp. 15 and 16 of the assessment order which are as under: S. No F. Y. Persons from whom payments received Amount Place Reason Payment 1. 1990-91 Mukesh Gupta 40,000 England Advance information regarding England tour 2. 1990-91 -do- Gypsy (wide tyres) worth Rs. 1,50,000 India (Ghaziabad) Information 3. 1990-91 -do- 50,000 India Introduction Arvinda De Silva, Sri Lanka 4. 1991-92 -do- 50,000 India Introduction Salim Malik, Pakistan 5. 1991-92 -do- 2,00,000 India Introductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the learned counsel for the assessee. In the block assessment undisclosed income can be worked out on the basis of the material found during the course of search. In the present case no incriminating document or other evidence was found during the course of search from the possession of the assessee to establish link between bookies and players. Further, the addition has been made on the basis of statement of Mr. Mukesh Gupta, but neither the copy of his statement was provided to the assessee nor he was confronted against the same and, therefore, the evidence against which the assessee was not confronted cannot be taken into consideration because such procedure is against the settled rules of natural justice. In our view, therefore, the addition made on the basis of statement of Mukesh Kumar Gupta or on estimate basis cannot be upheld. Accordingly, ground taken by the assessee is allowed and the addition of Rs. 9,65,000 sustained by the learned CIT(A) is deleted. 15. Ground Nos. 5, 6, 7 and 8 are general in nature and are taken only in support of ground Nos. 2, 3 and 4 which have been decided by us, hence, these grounds do not call for any specific adjudication. 16. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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