9911796707
TMI Blog2013 (11) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... operation u/s 132 of the Income Tax Act was carried out at the residential premises of the assessee on 16.01.2008. Search warrant was issued in the name of " Smt. Parminder Chadha and Shri Tej Pal Singh". Notice u/s 153A was issued in the name of assessee individually. In response Returns for Assessment Year 2002-03 to 2007-08 were filed. These are the same returns as were originally filed. These original returns of income were processed u/s 143(1) without adjustments. Notice under Section 142(1) was also issued to file Return of Income for the said assessment year. In response the assessee filed a Return of Income declaring an Income of Rs.17042411/-, the same Income which was declared in original Return filed u/s 139(1). In the said Return of Income, apart from other Incomes, the assessee had declared Long Term Capital Gains on sale of Plot in Mewla Maharajpur, Faridabad sold for a total sum of Rs.5.5 crores of which the assessee was beneficiary of one-third share. As per Order passed by the Assessing Officer u/s 143(3) it was alleged that The Income Tax Department while conducting search at the premises or Piyush Group received a document from "anonymous sources" through fax p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of invalid search carried out under section 132 of the Act, and consequently the assessment order was illegal and bad in law. 1.2. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A, since the same was made on the basis of search carried out under section 132 of the Act, which was illegal, being carried out without proper authorization given by competent authority. 1.3. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A of the Act on the appellant, in her individual capacity, whereas search warrant and panchnama were issued/drawn in the joint name of Smt. Parminder Chadha and Shri Tej Pal Singh. 1.4. That the CIT (Appeals) erred on facts and in law in not quashing / setting aside the assessment completed under section 153A of the Act without following settled principle of natural justice. 2. That the CIT (Appeals) erred on facts and in law in upholding the action of the assessing officer in making an addition of Rs. 16,66,666/- under the head "long term capital gains" on account of alleged proportionate undisclosed sale considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceedings and thus could not be relied upon. 2.6 That the CIT(Appeals) erred on facts and in law in not appreciating that if the receipts for aggregate amount of Rs. 3.7 crores were real and not draft receipts, the same should have been found from the premises of the purchasers of the property (Piyush Group). That the CIT(Appeals) further erred on facts in stating that these draft receipts had been issued to the prospective purchasers whereas the appellants have always maintained that these were "draft" receipts which were never issued to the buyers as no consideration had been received against these. 2.7 That the CIT(Appeals) erred on facts and in law in relating the receipts for aggregate amount of Rs. 3.7 crores to the appellant even though these did not bear his signatures and hence he could not be a beneficiary to this amount. 2.8. That the CIT(Appeals) erred on facts and in law in holding that the explanation given by the appellant qua receipt of Rs. 2 crores by Smt. Parminder Chadha by cheques from Piyush Group to the effect that the same was in respect of different proposed agreement to sell, was an afterthought. That the CIT(Appeals) erred in relating these chequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the material seized during the course of search and information gathered by means of post search queries did not form the basis of the addition. In the case of M/s Piyush Infrasturcture India P.Ltd. (supra) on the very same transaction, the Tribunal considered each set of evidences relied upon by the Ld.A.O. and deleted the addition of Rs.12.5 crores made in the hands of the purchaser. Before us is the case of the sellers of this property. In view of the findings of the Coordinate Bench of the Tribunal on the very same material and for the very same transaction, we have no other alternative but to delete the additions in question and allow the appeals of the assessee. The Tribunal at para 3.10 onwards held as follows. "3.10. We have considered the arguments advance by the parties and have gone through the orders of the authorities below, material available on record and the decisions relied upon. Undisputedly onus lies upon the claimant to establish the genuineness of its claim. We have to decide in the present case as to whether the evidence furnished by the AO was sufficient to establish his allegation that the amount in consideration for the purchase of property in ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended further that since the fax message has not been found from the premises of the assessee, the onus to establish its genuineness does not lie upon the assessee. He has placed reliance on several decisions in support. Having gone through these decisions we find that in the case of District Magistrate Vs. R. Kumaravel (Supra) the Hon'ble Supreme Court has been pleased to hold that a telegramme by itself is not an authentic document, it is like and unsigned and anonymous communication, unless a telephone is confirmed by a subsequent signed application, representation or an affidavit; the contents of the telephone have no authenticity at all and the same cannot be taken into consideration for assessing the value of the other authentic documents on the record. In that case before Hon'ble Supreme Court the detention order was passed by the District Magistrate on the basis of the material placed before him by the Police Authorities. The Hon'ble High Court was pleased to hold that any material received by the District Magistrate in the shape of telegram could not be taken into consideration by him in the absence of any subsequent communication confirming the same. The Delhi Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. His further contention remained that these receipts should have been found from the possession of the assessee since assessee was the purchaser of the property from Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita however, these have been recovered from the possession of Smt. Parminder Chadha. He submitted further that Smt. Parminder Chadha in her statement recorded on 24.11.2009 has stated that the copies of the said receipts found from her possession during the course of search are draft copies of the receipts which were to be issued when the amount was to be received. She submitted that there was an agreement to sell the property in question for Rs.8 crore which could not be materialized hence consideration mentioned therein never passed hands. Thus these receipts were never issued to the assessee. On perusal of these receipts we observe that these are not signed by all the owners of the property but signature of Smt. Parminder Chadha only has been shown. There is also substance in the submission of the ld AR that if these receipts would have been acted upon, these should have been found from the possession of the purchaser i.e. assessee who has been sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards the sale consideration of the property in question. 3.14 The 4th set of evidence relied upon by the ld. DR are copies of the documents made available at page nos. 43 to 90 of the Pb (d). These are copies of the 3 agreements dated 14.5.2007 between the assessee at one hand and Smt. Parminder Chadha, Ms. Kavita Chadha and Sh. Tej Pal Singh on the other hand. These documents were seized from the residence of Smt. Parminder Chadha. Referring these documents, the ld. DR submitted that total consideration has not been shown in the agreement. These agreements were entered into between the assessee and the above named 3 persons for purchase of an office space measuring 2000/- sq. ft. super area in the first floor of the business park named as Mis Piyush Business Park, situated at main Mathura Road, NH-2 (Sector 27), Faridabad under the development of the assessee. Each of the said 3 persons i.e. second party shown to have agreed on the sale consideration and they have paid to the first party prior to the execution of the agreement an amount of Rs.62,04,170/- each as the booking amount through cheque and balance amount of Rs.7.50 lac each was agreed upon to be paid at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 received by the department on fax. 3.16 The 5th set of evidence relied upon by the AO and ld. DR are the set of statements of Sh. Harish Singla recorded by the AO on 20.10.2010, wherein he has specifically stated that the property in question was purchased for Rs.18 crores however, in the sale deed amount of Rs.5.5O crores paid through cheque only was shown. The ld. DR submitted that Sh. Singla during the period when the transaction was entered into was director of the assessee company and he also remained signatory of the agreement as well as sale deed on behalf of the assessee company. His statement has thus got evidentiary value and has been rightly relied upon by the AO. 3.17 The contention of the ld. AR in this regard remained that the said statements of Sh. Harish Singla subsequently recorded by the AO without affording opportunity to the assessee to cross-examine him cannot be used adversely against the assessee. His further contention remained that Sh. Singla has not been confronted by the AO with his contrary statements made by him during the course of search proceedings u/s 132 (4) of the Act on 16.1.2008, wherein he had stated on oath that sale consideration of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement recorded u/s 132 (4) he had surrendered certain amount as his undisclosed income for block period and had also expressed his willingness to pay taxes worked out on the surrendered income. However, in his return of income filed in response to the notice issued u/s 158 BC, he declared lower return contending that statement u/s 132 (4) was obtained under duress. The AO made assessment on the basis of surrendered income. The matter traveled before the High Court and the Hon'ble High Court was pleased to hold that when assessee did not retract his statements immediately after search and seizure was over and in return also no explanation was offered for surrender of undisclosed income at the time of search and seizure operations u/s 132 (4), it could be said that the assessee had failed to the discharge onus of proving that confession made by him u/s 132 (4) was as a result of intimidation, duress and coercion or that same was made as a result of mistaken belief of law or facts. It was held that the Assessing Officer was justified in assessing income of the assessee on the basis of surrender of undisclosed income made by the assessee u/s 132 (4) of the Act. Likewise in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt dated 11.4.2007 and Rs.2.70 crore shown in the receipt dated 14.S.2007 were apart from the payment shown in the sale deed and that Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita Chadha had booked the office premises in the commercial complex of the assessee and the due amount shown as closing balance in their accounts with the assessee had already been adjusted out of the cash payable to Smt. Parminder Chadha Sh. Tej Pal Singh and Ms. Kavita against sale consideration of the property in question at Mewla Maharajpur, Mathura Road, Faridabad. On the contrary in the sale deed of the property duly registered the parties have shown the consideration of Rs.5.50 crore. In their statements recorded u/s 132 (4) during the course of search proceeding all the parties to the sale deed have stated that the sale consideration of the property remained Rs.5.50 crores only. The amount of Rs.6.70 crores which the revenue claims as per the receipts recovered was paid over and above Rs.5.50 crore consists of an undisputed amount of Rs.3 crore shown to have been paid through cheques. And even if the claim of the Department is accepted for a moment that an amount of Rs.2,41,37,490/- (Rs.80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Delhi High Court has been pleased to hold that ITO not being a Court can rely upon material which may not be strictly evidence admissible under Indian Evidence Act for purpose of making an order of assessment. In that case before the Hon'ble Delhi High Court the relevant books of accounts of assessee were destroyed in fire and the Tribunal while allowing deductions claimed by assessee had taken into account as proof of material auditor's report from which it could be inferred that deductions were properly supported by relevant entries in account books, the Hon'ble High Court held that it could not be said that decision of Tribunal was not based on any evidence. Different are the facts in the present case before us. In the present case before us the AO tried to establish that there was corroboration of fact that an amount over and above the amount shown in the sale deed was paid in cash with the assistance of claimed different evidences, discussed hereinabove, either of which does not have its credibility and reliability. Similarity of certain figure alleged to have been paid in cash towards undisclosed sale consideration in the statements of a person who is adversely int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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