9911796707
TMI Blog2014 (9) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... pt produced by the assessee is a provisional receipt and thereby upholding the addition made by the Assessing Officer by rejecting the exemption claimed by the assessee U/s. 54 to the extent of Rs. 38,51,873/-. 3. ...." 2. Facts of the case in brief are that search and seizure operations were carried out at the residential premises of Shri C. Radha Krishna Kumar, husband of the assessee, on 25.10.2007. During the course of search operation, incriminating material, vide annexure ACRK/04 was seized, and it contained the details of actual consideration received by the assessee on sale of property. The Assessing Officer, based on the information contained in the seized diary, issued notices under S.153C/142(1) of the Act to the assessee. In response to the said notice under S.153C of the Act, the assessee filed returns of income for assessment years 2002-03 to 2008-09 on 19.8.2009, inter alia disclosing an income of Rs. 5,33,634, besides long term capital gains of Rs. 72,98,977 for assessment year 2003-04. The Assessing Officer noticed that the assessee in her original return of income for the assessment year 2003-04 filed on 29.9.2003 admitted taxable income at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of Rs. 1,40,00,000, besides claiming exemption under S.54 at Rs. 28,49,150 on account of purchase of Plot No.539, Road No.86, Jubilee Hills, Hyderabad. Before the Assessing Officer, with regard to the entry of Rs. 25,00,000 mentioned against the entry of 'pro-note', it was contended that the said amount was not actually received by her. The Assessing Officer did not accept the said claim of the assessee, opining that since the said pro-note amounted to a 'promise to pay', the assessee must have received the said amount at a later date. He felt that pro-note is nothing but an instrument, issued in lieu of cash or value, and is generally used as security. Accordingly, he concluded that the assessee would have registered the property in the name of the vendee only after considering the total value of the property at Rs. 1,65,0,00 and after satisfying herself that such consideration was received in full The Assessing Officer observed that no person would register or alienate his/her property in the absence of receipt of full value of consideration, either in cash or otherwise. Besides, he noted, no such pro-note was found at the residence of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks. The CIT(A) was not convinced with any of the contentions of the assessee before him, and accordingly upholding the order of the Assessing Officer, rejected the ground of the assessee on that aspect, in the following manner- "I have gone through the facts of the case and the submissions of the appellant. It is clear that the page no.5 of the Annexure A/CRK/04 dated 25.10.2007, contains the head note, "amount received from our tenant towards part sale consideration". It is also seen that the payments noted therein have been given a serial number, such as 'I' st time, IInd time, III, IV, V, VI, VII", etc. Besides mentioning the amounts received by cheque/cash, the said seized paper also shows an amount of Rs. 25 lakhs as pronote, besides a sum ofRs.3 lakhs as "deposit adjusted". On a comparison of the payments so recorded with the payment recorded with the registered sale deed, it is found that the payments to the tune of Rs. 65 lakhs were matching. It is further seen that the appellant and her husband initially denied having received any amount over and above Rs. 65 lakhs recorded in the agreement and also attempted to explain additional Rs. 50 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has rightly been adopted at Rs. 1,65,00,000/- in view of the seized documents, which are duly corroborated by the entries in the agreement of sale, as also the return of income field by the appellant herself." 6. Aggrieved, assessee preferred this second appeal before us. 7. We heard both sides and perused the orders of the lower authorities. The question for consideration is whether the amount of Rs. 25,00,000 represented, as per the entry in the seized diary, by a pronote, forms part of the consideration for the sale of the property. It is an undisputed fact that the said pronote itself was not found or seized by the search party. It is also a matter of fact that the entry with regard to the amount of Rs. 25,00,000, represented by the pronote in question, finds place among other entries made with regard to the amounts of payments, forming part of the consideration, and the same which have been made duly assigning the serial numbers like Ist, IInd, etc. The entries in question have been made on page 5 of the diary, marked as Annexure A/CRK/04 dated 25.10.2007, and they have been made under the heading "amount received from our tenant towards part sale consideration." One of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n can be made based on it. If calculations and computations have been made in the seized document in such a manner that its probative value and genuineness cannot be doubted, nothing prevents the Assessing Officer from making additions on the basis of such document despite the absence of any corroboration. It must be remembered that in some cases it is difficult to obtain corroboration, particularly of the type contemplated by the Tribunal. It is not necessary that the seized documents should be in the form of proper books of account so that they can be relied upon for the purpose of making additions. They could be in any form, including loose papers on which notings or scribblings have been made." 8. In the light of the foregoing discussion, and for the detailed reasons given by the by the CIT(A) in paras 6.1 and 6.2 of the impugned order, which we have extracted above, with which we agree, we uphold the action of the Revenue authorities in treating the amount of Rs. 25,00,000 represented by the pronote as well, as part of the consideration on the sale of the property, and consequently taking the total sale consideration as Rs. 1,65,00,000 and not Rs. 1,40,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any claim regarding construction of house on the said plot. Even the returns filed by the assessee for the assessment years 2003-04 and 2004-05 did not reveal any investments towards construction of any house on the said plots. Even during the course of search, the construction of house was noticed to be only in progress. The Assessing Officer therefore, concluded that the assessee had purchased only a plot of land and not a house property and the construction of house was started and the same was in progress on the date of search i.e. 25.10.2007. In this view of the matter, observing that the assessee had not constructed a house within three years from the date of the transfer of the land, the Assessing Officer concluded that the assessee had not fulfilled the conditions laid down under S.54, and accordingly rejected the claim of the assessee for exemption under S.54 of the Act. The CIT(A), on appeal, confirmed the action of the Assessing Officer in denying the assessee's claim for exemption of the capital gains from tax under S.54 of the Act. 11. Aggrieved, assessee is in second appeal on this issue. 12. We heard both sides and perused the orders of the Revenue authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by the Revenue authorities in rejecting the assessee's claim for exemption under S.54F of the Act. The Revenue authorities have denied the claim for exemption, going by the schedule of property and map appended to sale deed through which the assessee purchased the property in question. A reading of the said schedule, which has been extracted by the Revenue authorities in their impugned orders, opens with 'All that the plot no.539-III....', and does not conclusively rule out existence of any structure thereon. On the other hand, the property receipt, produced by the assessee before the Revenue authorities, containing Door No. and even the name of the assessee, evidences the existence of a residential structure, clinches the matter in favour of the assessee. Merely because it is titled as 'provisional receipt', its evidentiary value cannot be mitigated, because it is issued by a statutory authority, viz. a local body, and contains details like door no. and assessee's name, date and amount of tax collected, etc. All these details are capable of being verified from the records of the local civic body, and as such, one cannot create such a evidence just to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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