TMI Blog2012 (10) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... lage Mewla Maharajpur, Faridabad out of so called undisclosed income of the assessee. 4(a). That the Ld. CIT(A) has not considered the fact that photocopy of agreement to sell dated 151212007 ( in which piece of land was agreed to be sold for ₹ 18 crores) received from anonymous sources through fax does not constitute a valid evidence in the absence of original agreement on record. 4(b) That the Ld. CIT(A) has erred on facts and in law, in not appreciating that the aforesaid agreement was not reliable, more so since execution of the same was denied by the appellant and the seller and was contrary to the actual sale deed in respect of the same property executed between the parties and registered with appropriate authority of State Government. 5. That the Ld. CIT(A) has not considered the fact that statements of Sh. Harsh Singla . Sh. Amit Goel recorded u/s 132(4) in which he has denied having made any payment over and above ₹ 5.50 crores to the sell of the land is of prime importance and cannot be brushed aside. 6. That the Ld. CIT(A) has not considered the fact that the so-called subsequent statement of Sh. Harsh Singla, the Ex-Director of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and upheld the validity of the assessment. 2.1 Before the Tribunal in support of the ground raised in this regard, the ld. AR submitted that there was no search or survey conducted on the assessee. The search was conducted on Piyush Colonizer Ltd., Piyush Developers, Piyush Buildwell Ltd. and some of the directors of the Piyush Group on 16.1.2008. He submitted that assessment in the present case has been framed by the Assessing Officer u/s 143(3) read with Section 153 C of the Act as per column 10 of the first page of the assessment order. He submitted that bare perusal of the assessment order suggests that no satisfaction was recorded by the Assessing Officer before assumption of jurisdiction u/s 153 C of the Act against the assessee. The ld. AR submitted that before proceeding u/s 153 C a satisfaction is required to be recorded by the Assessing Officer (in short AO) in the case of a person other than the person subjected to search and in whose case proceedings u/s 153 A have been initiated. No such satisfaction has been recorded by the Assessing Officer. He referred page no. 63 of the paper book II, wherein a copy of order dated 28.8.2009 received by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the question of handing over of the documents do not arise and in the order there is a reference to certain documents but none of the documents is linked to the assessee nor the AO has said anything about the same. He placed reliance on the decision of Hon ble Supreme Court in the case of Manish Maheshwari 289 ITR 341 (SC). 2.3 The ld. AR submitted further that at page no. 7 of the first appellate order the ld. CIT (A) has stated that the assessment had been completed u/s 143(3) on the basis of the notice issued u/s 142 (1) and mentioning of Section 153 C does not vitiate the assessment. The ld. AR pointed out that though the ld. CIT (A) has held as above, but still it is submitted that the ld. CIT (A) cannot change the nature of assessment to Section 153 C and therefore, the fact that proceedings have been initiated u/s 153 C, since notices u/s 153 C for earlier assessment years have been issued and assessment have been framed therein after having assuming the jurisdiction u/s 153 C and reopening the assessments for earlier years and thus findings of ld. CIT (A) is not correct. He submitted that ld. CIT (A) cannot change the assessment framed under specific provisions related t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R submitted further that the fax message which was received by the department from anonymous sources is not the document, since it is not an inforcible document, either legally or contractually and it can at best be stated as a piece of unreliable information, since original document has never been confronted to the assessee. He contended further that the fax message cannot be said to be a document within provisions of Section 132 because it has no authenticity in the eyes of law. Thus on this ground alone the assessment is bad in law. 2.5 The ld. DR on the other hand tried to justify the first appellate order on the issue. He referred the contents of the provisions laid down under Sections 153A and 153C of the Act. He also pointed out that the Assessment Year 2008- 2009 in question is related to the previous year in which search was conducted and thus as per the provisions of these Sections assessment for the A.Y. 2008- 09 was to be made under the regular provisions of Section 143 (3) and not under Section 153 C read with Section 153A of the Act. The ld. DR pointed out that such issue of non-recording of satisfaction was not raised before the AO and the assessee participated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases certain documents were found on the basis of which and some documents received through fax by the department, proceedings u/s 153 C of the Act initiated against the assessee. The assessment year 2008-09 under consideration is irrelevant to the previous year in which search was taken place. The AO issued notice u/s 142 (1) to the assessee. In response thereto assessee filed return declaring an income of ₹ 4,97,500/-. The assessment has been framed determining total income at ₹ 12,54,77,500/- by making addition of ₹ 12.5 crores on account of cash paid over and above sale consideration of ₹ 5.50 crores for purchase of land at village Mewla, Mahrajpur, Faridabad. The ld. CIT (A) has upheld the same against which assessee is in appeal before us. 3.1 The ld. AR submitted that no document or any agreement or receipt was found during the course of search from the possession of the assessee and the addition have been made on the basis of certain information sent to the department through fax message by some anonymous sources. It was contended that reliance cannot be placed on such unconfirmed and unreliable fax message which has not been even confronted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed amount of ₹ 5.50 crores mentioned in the sale deed. 3.2 The ld. AR contended that the authorities below have relied upon anonymous fax message in shape of one agreement to sell dated 15.2.2007 in respect of the above property without identifying the person who had faxed it. He submitted that on every fax message there is telephone no./name but it has not been investigated despite specific request made in this regard by the assessee during the course of the assessment proceedings. The assessee had also raised this issue in its reply dated 19.11.2009 which has been reproduced by the AO at page nos. 7 to 9 of the assessment order. He submitted that the original copy of the faxed document was never made available for confrontation of the assessee, hence in absence of corroboration by the person who had sent the fax it cannot be relied upon. In support he placed reliance on the following decisions: * Daulat Ram Rawatmal 87 ITR 349 Supreme Court * K. P. Varghese Vs. ITO 131 ITR 597 (SC) * Motor and General Store (P) Ltd. (1967) 66 ITR 692 (SC) * CIT Vs. Rajpal Singh Ram Avtar (2005) 149 Taxman 32 (Alld) * CIT Vs. Chandan Bucher (2010) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... successful in the eyes of law, the maker has to show as to how earlier recorded statements do not state the true facts or that there was coercion, inducement or threat while recording his earlier statements u/s 132 (4). In this regard he placed reliance on the following decisions: - T. S. Kumara Swamy Vs. ACIT (1998) 65 ITD 188 (Mad) - Surjit Singh Chhabra Vs. UOI (1997) 1 SCC 508 - Bachittar Singh Vs. CIT (2010) 328 ITR 400 (P H) - ACIT Vs. Hukum Chand Jain (2010) 191 Taxman 319 (Chhattishgarh) - Kanti Lal Vs. ACIT (2011) 14 Taxman 108 Ahmedabad 3.4 The ld. AR submitted further that the statements of the sellers of the property recorded during the course of search u/s 132 (4) of the Act under the oath affirming the consideration of ₹ 5.50 crores for the property cannot be brushed aside. Regarding certain receipts found from the premises of Smt. Parminder Chadha, copies whereof have been made available at page nos. 76 and 77 of the paper book volume-II, the ld. AR submitted that these receipts are incomplete as there are no signature of all the Co-owners and witnesses. He submitted that these are not even copies of the original receipts. The receipt at pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2007 the seller Smt. Parminder Chadha has acknowledged the receipt of sum of ₹ 1 crore in lieu of a part payment towards agreement of sale of the property and receipt dated 14.5.2007 is again acknowledgment of payment of ₹ 2 ,70,000,00/- from the seller Smt. Parminder Chadha towards the part payment of the sale consideration for the property. He submitted that this receipt has also been acknowledged by the Co-owner Ms. Kavita. Thus by these receipts total payment of ₹ 3,70,000,00/- toward the sale consideration has been made by the assessee. The ld. DR submitted that the third set of evidence is the acknowledgement of payment of ₹ 2 crores to Smt. Parminder Chadha acknowledged by the assessee vide its letter dated 4.12.2009 made available at page no. 41 of the PB filed by the department ( in short PB (d)). The ld. DR also referred page no. 42 of PB (d) supporting the payment of ₹ 2 crores in the ledger account of Smt. Parminder Chadha with the assessee during the F.Y. 2007-08. He submitted that period of this transaction shown on page no. 41 and 42 of the PB (d) is the same and there is no evidence of other deal. 3.7 The ld. DR submitted further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volved in such dealings. He placed reliance on the following decisions: - Homi Jehangir Gheesta Vs. CIT (1961) 41 ITR 135 (SC) - Dhakeswari Cotton Mills Ltd. Vs. CIT (1954) 26 ITR 775 (SC) - C Vasant Lal Co. Vs. CIT (1962) 45 ITR 206 (SC) - Sumati Dayal Vs. CIT (1995) 80 Taxman 89 (SC) - CIT Vs. Durga Prasad More (1971) 82 ITR 540 (SC) - ACIT Vs. Jay Engineering Works Ltd. (1978) 113 ITR 389 (Del) - CIT Vs. Krishna Veni Ammal (1986) 158 ITR 826 (Mad) 3.8 The ld. DR submitted further that the decisions relied upon by the ld. AR having distinguishable facts are not helpful to the assessee. 3.9 The ld. AR rejoined with the submission that first set of evidence are the copies of fax message received by the department from unknown sourceduring the course of search. It is neither the photo copy of the original document nor the source from where it was received is identified. He submitted that original of these documents were never furnished by the department for verification to the assessee hence, these fax messages in the shape of agreement to sell and receipt cannot be relied upon nor these can be used adversely against the assessee. He submitted further th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la as submitted earlier, had stated under oath that the property was sold for ₹ 5.50 crore only, whereas in his statements recorded on 20.10.2009 he has contradicted his own earlier statements recorded u/s 132 (4) of the Act by saying that the property was actually agreed to be sold for ₹ 18 crores. He has not been confronted with his earlier statements recorded u/s 132 (4) which has got evidentiary value nor any reason has been shown for making a different statements on 20.10.2009. It is also not the case of Sh. Singla that he had made earlier statements u/s 132 (4) of the Act under duress, influence coercion, threat etc. The assessee was also not afforded with opportunity to cross-examination Sh. Singla, hence his statement recorded on 20.10.2009 cannot be relied upon. Besides Sh. Singla of director of the company during the transaction of the property was later on removed from the directorship of the company and an FIR was also lodged by the assessee against him hence, he was adamant to ruin the assessee. In furtherance to achieve this motive Sh. Singla had made contrary statements. It is also an established proposition of law that a statement cannot be used adversel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered, the amount paid through cheque for ₹ 5.50 crore only has been shown as the sale consideration. As per him the remaining amount out of ₹ 18 crore has been paid in cash. So far other sets of evidence are concern we will discuss its reliability in the succeeding paragraphs. The contention of the ld. AR against the reliability of the first set of evidence remained that both the alleged agreement dated 15.2.2007 and receipt dated 15.2.2007 have been sent to the department on fax from the unknown person and hence in absence of identity of the source and original copies of these documents, the same cannot be relied upon. He contended further that even the telephone no./ name appearing on fax message was not investigated despite specific request of the assessee during the course of assessment proceedings. In support he referred page nos. 31 to 33 of the paper book and also the reply dated 19.11.2009 in this regard reproduced at page no. 7 of the assessment order. The ld. AR contended 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 sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been placed at page no. 91 of the pb (d) and receipt of ₹ 2.70 crore dated 14.5.2007 has been placed at page no.92 of the pb (d). In the copy of receipt dated 11.4.2007 amount of ₹ 1 crore in cash shown to have been received in lieu of a part payment towards agreement of sale dated nil from the assessee. In the receipt dated 14.5.2007 an amount of ₹ 2.70 crore shown to have been received by the assessee as in lieu of a part payment towards agreement of sale dated nil. Thus ₹ 3.70 crore has been shown paid in cash as a part payment towards agreement to sell by the assessee to the owners of the property. The ld. DR submitted that the amount shown in these receipts paid in a cash corroborates this fact that these payments were made above the amount shown in the sale deed at ₹ 5.50 crore through cheque. The contention of the ld. AR remained that these receipts have not been shown signed by the remaining Co-owners of the property i.e. Sh. Tej Pal Singh and Ms. Kavita nor these receipts have been signed by the assessee. His further contention remained that these receipts should have been found from the possession of the assessee since assessee was the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made available at page no. 42 of the Pb (d). The ld. DR submitted that the transaction period of the claimed separate deal is the same and there is no evidence of other deal on record claimed as by the assessee in his letter dated 4.12.2009. The ld. AR on the other hand contended that even if the explanation of the assessee regarding payment of this amount shown in the documents is denied, no inference can be drawn that payment was made towards the sale consideration of the present property in question. 3.13 The ld. AR submitted that there was no question of taking extra payment through cheque and during the search proceedings no specific question was asked to the assessee regarding the payment of ₹ 2 crore shown in the ledger account of Smt. Parminder Chadha with the assessee, made available at page no. 42 of the Pb (d). We are not fully convinced with the contention of the ld. AR in this regard, but at the same time on the basis of the stated payment of ₹ 2 crores through cheque an inference beyond doubt cannot be drawn that the amount was paid towards the sale consideration of the property in question. 3.14 The 4th set of evidence relied upon by the ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f property in question purchased by the assessee was ₹ 18 crores. He pointed out that the said business complex could not be developed by the assessee and the land on which the said business complex, was to be developed is still in dispute and no custodian has been raised so far. It is only an imagination of the Assessing Officer that any adjustment of sale consideration of the property in question has been made against booking of the space by the above 3 persons. He submitted that the sale consideration of the property at ₹ 5.50 crores as per registered deed of the property has already been paid by the assessee. Considering these submissions we are of the view that there is no evidence beyond doubt to establish the allegation of the department that the amount payable by the above 3 persons towards their booking of the space in the business premises to be developed by the assessee, was actually paid to the assessee by way of adjustment of the sale consideration towards the property in question above the amount shown in the sale deed or towards ₹ 18 crores shown in the alleged agreement to sell dated 15.2.2007 received by the department on fax. 3.16 The 5th set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such person and that such retraction should be within reasonable time. No such fact has been brought on record in the present case by Sh. Harish Singla to deviate from his earlier statements recorded u/s 132 (4) of the Act. The Hon ble Punjab and Haryana High Court in the case of Bachittar Singh Vs. CIT (Supra) relied upon by the ld. AR, has been pleased to hold that the Tribunal was justified in holding that retraction made after 2 months was not permissible and voluntary statements recorded in the presence of family members was an important material which could be acted upon. In that case the AO made addition on the basis of statements recorded during the course of survey. The addition was in respect of investment not recorded in the books of accounts. The assessee later on retracted from his earlier statements by taking stand that he had agriculture income to that effect investment was from that source. In the case of ACIT Vs. Hukum Chand Jain (Supra) before the Hon ble High Court of Chhattisgarh relied upon by the ld. AR, the assessee could not explain recovery of cash and jewellery during the course of search proceedings and in his statement recorded u/s 132 (4) he had surre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 sent by an unknown source to the department as well as receipt dated 15.2.2007 also sent to the department on fax by unknown source or the contrary statements of Sh. Harish Singla recorded subsequently on 20.10.2010 during the course of assessment proceedings as discussed above are not sufficient in any way to establish beyond doubt that the property in question was actually sold for ₹ 18 crores out of which the amount of ₹ 5.50 crores paid through cheque only was shown in the sale deed and the remaining amount paid in cash was on money. So far other claimed evidences are concerned these are also not sufficient to establish the above allegation of involvement of on money. It is only an inference which has been presumed by the department that the advance of ₹ 2 crore (Rs.1 crore in cash and ₹ 1 crore by cheque) was given out of which the amount of ₹ 1 crore paid by cheque dated 15.2.2007 has been adjusted against the payments shown as per sale deed; ₹ 1 crore vide cheque dated 23.4.2007 and another ₹ 1 crore vide cheque dated 8.5.2007 were received by the assessee apart from payment shown in the sale deed of ₹ 5.50 crores; ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of fact and not of law. The question has been answered in affirmative. In the present case before us we have also concentrated on the facts and circumstances of the case to see as to whether it leads to justifying the addition made at ₹ 12.50 crores. Like wise in the case of Dhakeshwari Cotton Mills Ltd. Vs. CIT (Supra) it has been held that though ITO is not fettered by technical Rules of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law but in making assessment u/s 23 (3) of 1922 Act he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. In the present case before us the issue raised was as to whether there were on sufficient material with the Assessing Officer to justify the addition made at ₹ 12.50 crores with this finding that the property was sold for ₹ 18 crores but in the sale deed it was shown at ₹ 5.50 crores and remaining amount was paid in cash. In the case of C. Vasanti Lal Co. Vs. CIT (Supra) it was held that ITO is not bound by any technical law of evidence and it is open to him to collect materials to facil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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