TMI Blog2013 (1) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals the assessee has raised identical grounds which are as under:- 1 That the ld. CIT(A)-I, Ludhiana has erred in up-holding addition of Rs. 34,30,000/- made by the Assessing Officer as undisclosed income by way of unexplained investment in the purchase of property. 2 That while up-holding addition ofRs. 34,30,000/- the ld. CIT(A) has erred in not considering the basic fact that the market value of the property cannot be other than the value for which registration deed has been made. 2. The brief facts of the case are that originally return was processed u/s 143(1) and later on notice u/s 148 was issued and the assessment was completed u/s 143(3)/147 vide order dated 30.3.2006 in which net taxable income was determined at Rs. 35,56,110/- against the returned income of Rs. 1,26,108/-. The addition was mainly against the sale of property wherein sale consideration was considered Rs. 38.00 lakhs as declared by seller whereas the assessee had declared sale consideration only at Rs. 3,70,000/-. 3. The assessee had purchased a half share of house in plot measuring 61 sqyd No. B-7-1082 from Shri Dig Vijay in February, 1999 and the sale deed for the same was executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been provided to the assessee as the same is clear cut violation of principle of natural justice because the ultimate aim of the law is to do justice. Therefore, on this we are in agreement with the ld. counsel of the assessee, consequently. This issue is sent to he file of the Assessing Officer for fresh adjudication. Needless to mention here that due opportunity be provided to the assessee. The assessee is also at liberty to produce evidence, if any, to substantiate its claim. Next ground raised by the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 34,30,000/- u/s 69 specially when no material has been confronted to the appellant. Without going into much deliberation, when we have remanded the issue of cross examination which includes resultant additions, this ground has remained for academic interest only, therefore, automatically remanded to the file of the Assessing Officer for fresh adjudication with liberty to the Assessing Officer for filing evidence, if any. Following the direction of the Tribunal the case was fixed for hearing again and summons were issued to Mrs. Prem Lata and Shri Dig Vijay (seller of the property). Their statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prem Lata: Q: 1: Who had given this amount of Rs. 35 lakhs to you? Ans: It was given by your father Shri Joginder Lal who was accompanied by another persons but main I don t recall. I don t remember exactly now but most probably it was Shri Joginder Lal (buyer) who was accompanied by another person. The assessee objected to her statement on the ground that buyer was Smt. Bimla Rani and not Shri Joginder Lal. However, this objection of the assessee s A/R is not accepted for the reason that an old lady (Smt. Bimla Rani) will never carry that much cash when her husband (who is also a joint purchaser) was present for such a deal. (iii) It is again incorrect on the part of assessee to expect details of utilization of sale proceeds after a gap of 10 years particularly when both the sellers have given brief description of utilization of amounts. It is a well settled law that it is for the person, who asserts, to prove that apparent was not the real. In this case the sellers stated during their cross examination that they had utilized amounts for construction of houses, deposit in Bank Account, amounts given to daughter, purchase of car and payment of taxes etc. The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howing excess sale consideration. In this regard he referred to page 29 of paper book which is a copy of letter through which Shri Dig Vijay has written to the Assessing Officer to revise his return. Then he referred to page 30 of the paper book which is computation of the income in case of Shri Dig Vijay. He pointed out that after declaring sale consideration of Rs. 38.00 lakhs Shri Dig vijay had claimed exemption u/s 54 at Rs. 20.00 lakhs. This clearly shows that Shri Dig Vijay had wanted to save taxes which could have arisen in his case because of the survey conducted by the Department and he has got away with very little taxes on higher sale consideration which was not correct position. If the actual sale consideration was really Rs. 38.00 lakhs then why Shri Dig Vijay has originally shown it at Rs. 3,70,000/-. He referred to page 1-6 of the paper book which is a copy of the statement of Smt. Prem Lata recorded on 8.5.2008 when cross-examination was also done. In the reply to Q No. 1 that who had given Rs. 35.00 lakhs, Smt. Prem Lata stated that it was given by Shri Joginder Lal whereas in Q No. 2 when it was asked that do you know Shri Joginder Pal She had replied that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed also shows the sale consideration at Rs. 370,000/- therefore, the same has to be accepted in the absence of any other evidence. The onus lies on the department to prove that the assessee i.e. the buyer had given something under hand to the seller. In this regard he mainly relied on the decision of Hon'ble Supreme Court in the case of K.P Varghese V ITO, 131 ITR 597 (SC), CIT V. P.V. Kalyanasundaram, 282 ITR 259 (Mad) and CIT V. Daulat Ram Rawatmull, 87 ITR 349 (S.C). He contended that Hon'ble Punjab Haryana High Court in case of Paramjit Singh V. ITO, 323 ITR 588 (PH) has clearly held that ostensible sale consideration disclosed in the sale deed has to be accepted. He then referred to decision of Chandigarh Bench of the Tribunal in case of Rajdeep Builders V ACIT, ITA No. 666/Chd/2010 wherein the above case law has been considered and by various observations it has been clearly held that unless and until revenue has clear evidence of extra consideration such consideration can not be added to the income of the assessee. 9. On the other hand, the ld. DR for the revenue while strongly supporting the order of the Assessing Officer and the ld. CIT(A) brought to our notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Supreme Court in the case of CIT V. Daulat Ram Rawatmull (1973) 87 ITR 349 (S.C) and CIT V. Durga Prasad More (1971) 82 ITR 540 (S.C). 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. 7(i) However, it is well-established proposition that direct documentary evidence, in the shape of validly executed sale deed, if pitted against the mere oral evidence, the documentary evidence would certainly prevail. 8. The issue in the present appeal is directly covered in favour of the appellant by the following decisions : i) The Hon'ble Punjab Haryana High Court, in the case of Paramjit Singh V ITO (2010) 323 ITR 588 (P H) has held that the assessee, had purchased a property from his uncles, for a consideration, specified in the registered sale deed, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in the case of K.P.Varghese V ITO, Ernakulam and another, 131 ITR 597 (S.C.) has held as under Capital gains-Understatement-Scope of provisions-Difference between market value and consideration declared not sufficient-Assessee must be shown to have received more than what is declared or disclosed by him as consideration- Burden of proof on the Department-Computation-Only that income which has accrued or been received-Circulars of Central Board-Circulars dated July 7,1964, and January 14,1974-Binding on Deptt. Declared , meaning and effect of Income-tax Act,1961, ss. 48. 52(1), 52(2). vi) The Hon'ble Madras High Court, in the case of CIT V P.V.Kalyanasundaram, 282 ITR 259 (Mad) has held as under : Search seizure Block Assessment Undisclosed income-Property purchased by assessee Burden on revenue to prove that price had been understated-No enquiry and no evidence except conflicting statements of seller-Amount not assessable as undisclosed income Income-tax Act, 1961, s. 158BC. Assessment was made on the assessee under Section 158BC of the Income-tax Act, 1961, for the period April 1,1988 to December 8,1988. The assessee has purchased land on Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration of Rs. 9.00 lakhs declared in the sale deed. The Assessing Officer gave credit of Rs. 3.00 lakhs surrender by the assessee during survey and balance of Rs. 4.00 lakhs was treated as unexplained income of the assessee. However, later on during cross examination on 7.11.2006 Shri Subhash Sharma stated No, I do not confirm the facts stated by him fully, as given in my above referred statement on 3.9.2004. In response to Q No. 2 in the course of cross examination, Shri Subhash Sharma stated, That I had purchased a Flat bearing No. Flat no. 4, First Floor, Santoshi Complex, Khalini, Shimla-II for a consideration of Rs. 9.00 lacs from M/s Rajdeep Builders. Sale deed of which was executed on 1.5.2003. In response to another Q No. 3 Shri Subhash Sharma stated, Due to harassment from Shri R.K. Khosla, Partner of M/s Rajdeep Builders, I stated that sale consideration for the Flat No. 4, Santoshi Complex, Khalini, Shimla paid by me to M/s Rajdeep Builders was Rs. 16 lacs. Thus from above it is clear that Shri Subhash Sharma had retracted from his statement and revenue had no evidence other than the statement of Shri Subhash Sharma for payment of on money tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited in my bank accounts. The bifurcation of the amount I do not remember at present. 16. The above clearly shows that as early as 14.5.2007 the seller has stated that she has received extra consideration apart from Rs. 3,70,000/- since the Assessing Officer has made addition merely on the basis of above, the Tribunal had set aside the matter back to the file of Assessing Officer to give opportunity of cross examination. When this opportunity was given the statement of Smt. Prem Lata was again recorded on 8.5.2008. The following questions and answers are relevant: Q 1. Did you ever sell any property at Rly Road, Ludhiana to Smt. Bimla Bambi in February 1999 or to Shri Joginder Lal Bambi? Ans. Yes I had sold my share in the property to Smt. Bimla Rani. The other Co-owner was Shri Dig vijay my son. Q 2. What was the sale consideration of your share in the said property? Ans. It was for a consideration of Rs. 38.00 lakhs. Same facts were stated by me in my earlier statement recorded in this office last year also and that statements be also kept in mind. Q 4. Did you file any return of income to pay capital gains tax on such transaction? Ans. Yes, return f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any tax on such capital gain/ and if so can you give me a copy of your IT return? Ans. Yes, taxes were paid but copy of such I.T. Return is not presently available with me. 19. Shri Dig Vijay was also examined by Shri Harish Sharma representative of the assessee and Shri Mukesh Bambi son of Shri Joginder Lal and Smt. Bimla Rani. The relevant questions and answers are as under: Q 3. Do you remember who paid you cash amount at the time of execution of sale deed? Ans. I do not remember at present. Q 5. What were reasons for not declaring such enhanced value (cash also) while filing original return of income? Ans. Original return was field as per sale deed only. Q 6. After survey what were the reasons for declare cash amount in the revised return / revised income computation chart filed with the letter dated 6.11.2000? 20. The main objection of the ld. counsel of the assessee is that the survey was conducted in the premise of the seller and some incriminating documents were found and to convert the concealed income the sellers have preferred to declare the income by way of extra consideration. The seller was not able to give the names and addresses who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... theory is applied then assessee s conduct is no better because search was conducted in group of assessee s firm and ultimately sum of Rs. 3.00 crores has been surrendered and assessee s group has approached the Settlement Commission. This clearly shows that the assessee s group was involved in generating income which wass not declared to income-tax and therefore, the probability that the assessee has paid higher consideration for purchase of plot cannot be ruled out in the light of glaring evidence available in the firm of higher sale consideration declared by the seller. The observations of the Settlement Commission which has been reproduced by the Assessing Officer as under: (i) It is totally incorrect on the part of the assessee or his A/R to claim that during survey various incriminating documents were found from business premises of seller Shri Digvijay but the Department accepted revised return showing capital gains based on sale consideration of 38 lakhs and ignoring other incriminating documents found during survey. Such a contention raised by the assessee is just without any evidence and is totally devoid of any merit. The assessee has not pointed out as to what incrimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, Ludhiana which is most prime location and it transpired during the hearing that the assessee has already constructed a Hotel there. Therefore, the same cannot be compared to the other instances cited by the ld. counsel of the assessee because they refer only to the plot and their location is near Railway Station and not opposite Railway station. Therefore, in our opinion, the assessee has clearly paid higher consideration which have been rightly brought to tax by the Revenue. 25. Our above view is supported by the decision of Hon'ble Punjab Haryana High Court in case of Shashi Kiran V. CIT. 195 Taxman 332 (PH). In this case also the assessee has purchased a piece of land along with another from one Shri Inder Pal Garg by a sale deed dated 8.6.2004 for ostensible consideration of Rs. 5.00 lakhs. A notice u/s 153C was served. On the basis of information that sale price was offered at Rs. 11,19,000/- which was detected because of survey conducted on the premise of seller. The difference was added to the income of the assessee. The Hon'ble Punjab Haryana High Court discussed the case of K.P. Varghese V. ITO (supra) as well as Paramjit Singh V. ITO (supra) and observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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