TMI Blog2012 (5) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 (1) TMI 48 (HC)), wherein the Hon'ble High Court held that when a document shows fixed price, there will be a presumption that, that is correct price agreed upon by the parties. It is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it my be higher and sometimes it may be lower. Sometimes, intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for sale, the court cannot come to the conclusion that the price mentioned in the sale deed is not correct. - Decided in favor of assessee. - IT Appeal No.666 (CHD.) of 2010 - - - Dated:- 27-4-2012 - H.L.KARWA, MEHAR SINGH, JJ. ORDER Mehar Singh, Accountant Member The present appeal has been filed by the assessee appellant against the order passed by the CIT(A) on 5.11.2009 u/s 250(6) of the Income-tax Act,1961 (in short 'the Act'). In the sole ground of appeal, raised by the assessee, it is contended that in the facts and circumstances of the case, ld. CIT(A) is not justified in sustaining the addition of Rs.4,00,000/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Circle Shimla. The ld. 'AR', further, placed reliance on the decision, in the case of K.P. Varghese v. ITO 131 ITR 597 (SC), wherein it has been held that no addition can be made, on the plea of understatement of sale consideration, unless it is established that physically money has been received over and above the declared consideration. 3(i) . Ld. 'DR', on the other hand, supported the assessment order and the appellate order. 4. The brief and undisputed facts, as culled out from the relevant record, are that the assessee is a firm engaged in the business of construction of flats at Khalini, Shimla. A survey was conducted by the Income Tax Department u/s 133A of the Act on 02.09.2004. The assessee made a surrender of Rs.3 lacs, for the assessment year under consideration. The AO, on the basis of the statement of one of the purchasers, Shri Subhash Sharma, recorded on 3.9.2004, made addition of Rs. 4 lacs, as unexplained income of the assessee. In the impugned statement, Shri Subhash Sharma stated that he made payment of Rs.7 lacs to M/s Rajdeep Builders, over and above the sale consideration of Rs. 9 lacs, declared in the Sale Deed executed, on 1.5.2003, in pursuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g survey on 02/09/2004. ( iii ) The assessee himself has surrendered Rs. 3 lacs voluntarily on this account. From these facts it is clear that the assessee has received Rs.7 lacs from Sh. Subhash Sharma over and above the registered amount. It is held that the Id. A.O. s rightly assessed Rs.4 lacs as assessee's income from undisclosed sources after giving credit for the amount surrendered by the assessee at Rs.3 lacs. The addition of Rs.4 lacs is confirmed and as a result and this ground of appeal is dismissed." 5. In this appeal, core issue, which is to be adjudicated by us is whether the AO can make a valid addition, and can the CIT(A), upheld the same, merely on the basis of such statement, which was retracted in the cross-examination, without corroboration of the same by credible and cogent evidence. It would be pertinent to analyze the evidentiary value of the so called statement, which was made the foundation of addition and sustenance of the same by the CIT(A). A photo copy of the statement, marked as Annexure-A, of Shri Subhash Chander Sharma, recorded by the Inspector, on 3.9.2004 is on record. A perusal of the statement reveals that no Section of the Act has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the real one, is on the party who claims it to be so, as held by the Hon'ble Supreme Court in the case of CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC) and CIT v. Durga Prasad More [1971] 82 ITR 540 (SC). In the case of CIT v. Durga Prasad More ( supra ), it has been held by the Apex Court that though an apparent statement must be considered real, until it was shown that there were reasons to believe that apparent was not the real, in a case where an authority relied on self serving recitals in documents. It was for the party to establish the proof of those recitals; the taxing authorities were entitled to look into the surrounding circumstances to find out reality of such recitals. 6(ii) It is also a settled legal proposition, if no evidence is given by the party on whom the burden is cast, the issue must be found against him. Therefore, onus is always on a person who asserts a proposition or fact, which is not self evident. The onus, as a determining factor of the whole case can only arise if the Tribunal, which is vested with the authority to determine, finally all questions of fact, finds the evidence pro con, so evenly balanced that it can come to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed and disregard the legal rights and liabilities arising under such a contract between the purchaser and seller and decide the question of sale consideration, purely on the basis of bare husk of oral evidence, in the shape of invalid statement of Shri Subhash Sharma, recorded by the inspector, which was in specifically retracted in the course of cross-examination, assigning reason of animosity between him and one of the partners of the assessee appellant. The impugned sale deed has not been challenged, as obtained by fraud or coercion by the seller, the appellant assessee. The AO is not competent to accept such invalid statement and ignore the valid deposition made at the time of cross-examination. Further, the statement is not supported by agreement entered into prior to sale deed and documentary evidences, such as receipts, obtained in token of having paid the part of sale considered, over and above as specified in the duly executed sale deed. Both the purchaser and seller have exclusive knowledge of such payment made or received, over and above the specified sale consideration. The seller discharged his part of onus by adducing that sale deed, evidencing sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned sale deed, as genuine, but the sale consideration specified therein was rejected as non-genuine and, further, enhanced that sale consideration, on the basis of invalid oral evidence, in the shape of statement of the purchaser, ignoring the specific denial of the facts stated in that statement, in the deposition made at the time of cross-examination. Thus, the AO disregarded the valid documentary evidence, various judicial pronouncements and undertaken the exercise of rewriting the sale deed and substituting his own sale consideration of the flat in place of the sale consideration duly specified in the sale deed. Needless to state here that the sale deed was voluntary entered and executed by the parties thereto. 7(iii) The statement recorded during survey has lesser legal sanctity then the statement recorded during search operations u/s 132(4) of the Act, as is evident from the difference in language of Section 133A and 132(4) of the Act. There is initial burden of proof on the revenue to establish the findings of the impugned addition, as there is no initial presumption of excess consideration paid by the purchaser, in view of the specific consideration contained in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P H) has held that the assessee, had purchased a property from his uncles, for a consideration, specified in the registered sale deed, but the assessee claimed that no amount was paid on the basis of oral evidence of uncles. The inference of the AO, that the amounts shown to have been paid in the sale deed was actually paid, was upheld by the Hon'ble High Court. The Hon'ble High Court pointed out that oral evidence is not conclusive as against documentary evidence u/s 91 and 92 of the Indian Evidence Act, 1872 and upheld the inference of the AO. The relevant part of the decision of the Hon'ble Punjab Haryana High Court in the case of Paramjit Singh v. ITO, 323 ITR 588 (P H) is reproduced hereunder : "We have thoughtfully considered the submissions made by the learned counsel and are of the view that they do not warrant acceptance. There is well known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to Section 91 of the Act when terms of a contracts, grants or other dispositions of property has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Satinder Kumar [2001] 250 ITR 484 clearly held that AO is not competent to make addition in the absence of credible evidence, in respect of investment made over and above the consideration recorded, in the sale deed. The head-note of the decision is reproduced hereunder : "Appeal to High Court-Substantial question of law-Search and Seizure-Additions to income-Income from undisclosed sources-No material evidence to establish that assessee made investment over and above that recorded in sale deed-Tribunal deleting additions made under Section 69-Justified-No question of law arises-Income-tax Act,1961 ss.69, 260A." ( iv ) The Hon'ble Supreme Court, in the case of CIT v. Motor General Stores Pvt. Ltd. 66 ITR 692 (SC) held that "it is, therefore, obvious that it is not open to the income tax authorities to deduce the nature of the document from the purported intention, by going behind the document or to consider the substance of the matter or to accept it in part and reject it in part or to rewrite the document, merely to suite purpose of revenue. ( v ) The Hon'ble Supreme Court in the case of K.P. Varghese v. ITO, Ernakulam and another , 131 ITR 597 (S.C.) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue filed an appeal before the Income-tax Appellate Tribunal. The Tribunal dismissed the Revenue's appeal and confirmed the order of the Commissioner(Appeals). On appeal to the High Court: Held, that the burden of proving actual consideration in such a transaction was that of the Revenue. The AO did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. The deletion of the addition was justified. K.P. Varghese v. ITO [1981] 131 ITR 597 (S.C) referred to." ( vii ) Hon'ble Supreme Court in the case of CIT v. P.V. Kalyanasundram [2007] 294 ITR 49 (S.C) has held as under : "Held, affirming the decision of the High Court, that the implication of contradictory statements made by the vendor or whether reliance could be placed on the loose sheets recovered in the course of the raid were all questions of fact, and no question of law arose out of the order of the Appellate Tribunal. Decision of the Madras High Court in CIT v. P.V. Kalyanasundaram [2006] 282 ITR 259 affirmed." ( viii ) In the case of V. Ramchandra Construction Pvt. Ltd. v. ACIT [2011] 131 ITD 71 (TM), it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of time. Consideration, which is deemed to have been received in terms of section 50C, does not mean that the assessee has actually received that money so as to be physically available with him for making the investments. The physical availability of money needs to be proved as a matter of fact and on the basis of evidence and not on the basis of fictions. The assessee had received Rs. 8.00 lakhs on sale of agricultural land and therefore had only Rs. 8 lakhs in his pocket for making investments or for meeting expenses. The AO has rightly given the benefit of Rs. 8.00 lakhs and not of Rs. 38 lakhs while considering the explanation as regards the nature and source of investment amounting to Rs. 27,90,000/-. 22. There is yet another angle to the case. It is the case of the assessee that he has received a sum of Rs. 8.00 lakhs, being the amounting actually paid by the buyer on transfer of land by the assessee to him. There is no material on record to hold that the buyer of the agricultural land has paid anything over and above Rs. 8.00 lakhs. Since there is no evidence on record that the buyer has paid anything over and above Rs. 8.00 lakhs, being the amount stated in the conveyan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against one of the partners, a situation obtaining in the present appeal. The findings could be the same where a seller intends to vary the consideration specified in the sale deed, with a view to explaining his unexplained investment. The inescapable conclusion is that both the purchaser or the seller, cannot rewrite the duly executed valid sale deed, with a view to suit their convenience. Needless to state here that documentary evidence cannot be displaced by oral evidence, being the best evidence in itself, as held by the Hon'ble Supreme Court, various High Courts and the Tribunal, in the case laws discussed above. If direct documentary evidence, like the valid sale deed is permitted to read differently in terms of its clear and specific recital such as sale consideration voluntarily agreed upon by the seller and the purchaser, then credibility of such public documents would be the first casualty and such transactions in the commercial world would collapse. 9. In the present case, the AO as well as the CIT(A), proceeded to draw inferences against the assessee, on the basis of invalid statement of Shri Subhash Sharma, which was recorded on 3.9.2004, ignoring the retraction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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