TMI Blog2012 (9) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... o mention here that the assessee had filed his return f income for the assessment years under dispute much prior to the date of search declaring the purchase of land in question at the consideration mentioned in the registered sale deeds. So far as the AO’s observations on the loose sheets recovered from the residence of Smt. Nalini Devi are concerned, the CIT (A) after duly examining them has given a conclusive finding that the assessee’s name has no where been mentioned in those documents nor the amount of ₹ 109.48 lakhs represents the expenditure incurred by Smt Nalini Devi. However, the amount was found to be the summary of the balance of various accounts operated by the family members of Smt. Nalini Devi. We find that the CIT (A) in his elaborate and well reasoned order has dealt with all these aspects and came to a finding on fact that the AO has made the addition purely on conjectures and surmises and not on the basis of any material or evidence brought on record. - Decided against revenue - ITA Nos. 930 and 931 of 2009 & ITA Nos. 235 & 236/Hyd/2010 - - - Dated:- 18-9-2012 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search and seizure operation, the department found and seized a Photostat copy of agreement of sale dated 19-5-2002. The said agreement of sale was between the assessee in one hand and on the other hand Smt. Nalini Devi, her two sons Dr. Basant Reddy and Mr. R. Prem Reddy for purchase of land admeasuring 2400 sq. yards for a consideration of ₹ 1,68,00,000/- . As per the Photostat copy of the agreement a sum of ₹ 50 lakhs was supposed to be paid to the assessee towards advance to the vendor Smt. Nalini Devi Others. Simultaneously, search action was also undertaken in the residential premises of Vendor Smt. Nalini Devi and similar photocopy of the agreement was also found and seized from her residence along with some other loose sheets. The AO initiated assessment proceedings u/s 153A of the Act by issuing notice u/s 142(1) and 143(2). In course of assessment proceedings, when the AO queried about the investment made towards purchase of the property from Smt. R. Nalini Devi, the assessee submitted copies of four registered sale deeds towards purchase of the said property for aggregate sale consideration of ₹ 22,98,000/-. The AO relying upon the photo cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge of about the photocopy of his sale agreement found during the search but the same was not brought on record. The assessee therefore filed an affidavit on 12-9-2005 before the DDIT, Investigation, Hyderabad alleging therein that the photocopy of the sale agreement was planted in the residence of the assessee by a particular Officer of the department in course of search and seizure operation. 5. The assessee also submitted that the vendor Smt. Nalini Devi in the statement recorded from her u/s 132(4) of the Act had denied about the correctness of the sale agreement copy found at the time of search and categorically stated that the property was sold for a consideration of ₹ 23.50 lakhs and against which she received an advance of ₹ 50,000/- only. The assessee further contended that the paper slips containing some notings during the search of the premises of Smt. R. Nalini Devi and which was relied upon by the AO for making the addition was never shown to the assessee during the assessment proceedings. It was contended that the said document seized from residence of Smt. R. Nalini Devi did not mention the name of the assessee, therefore the assessee could not be li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KP Verghese (131 ITR 597) held that the AO is duty bound to prove the payment of on money. The CIT (A) while dealing with the provisions contained u/s 132(4A) which creates a presumption in respect of document found in the course of search held that the said presumption is rebuttable presumption and the assessee has rebutted such presumption by filing an affidavit and other documents to prove that the photocopy of the sale agreement was not acted upon either by the assessee or the seller Smt. Nalini Devi. The CIT (A) taking note of the contention of the assessee also held that the loose papers containing the notings of the expenditure made by the family members of Smt. R. Nalini Devi which was seized from her residence and was relied upon by the AO while making the addition at the hands of the assessee was never confronted to the assessee. The CIT (A) further examining the noting made in the loose sheets seized from the residence of Smt. R. Nalini Devi found that except for an entry made on 20-5-2002 for a cash deposit of s.1 lakh all other entries were made in Sept. 2002 and continued till May, 2005. It was also noticed by the CIT (A) that all the entireties were not of cash expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and surmises. It was submitted by the learned AR that the photocopy of the sale agreement on the basis of which the addition was made by the AO did not bear the signature of the assessee, the original of the document was also neither found during the search operation nor during the post search investigation. That apart the assessee had specifically alleged by filing an affidavit that photocopy of the sale agreement was planted in the house of the assessee in course of search and seizure operation. These facts were neither enquired into nor taken note of either by the DDIT (Inv.) or the AO. On the other hand, the AO ignored the registered sale deeds which is an authentic document and valid piece of evidence for ascertaining the consideration paid for purchase of the land. The learned AR further contended that in course of recording of statement u/s 132(4) of the Act, the assessee had categorically stated about the immovable property standing in his and his family members names. The assessee has also mentioned about the land purchased from Smt. R. Nalini Devi for consideration of ₹ 23.50 lakhs. During recording of statements, the revenue authorities never asked the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the residence of the assessee in course of search and seizure operation. Undisputedly, the sale agreement is only photocopy and has not been signed by the assessee. The assessee has also raised serious allegation regarding the seizure of the impugned document and filed affidavit before DDIT (Inv.) asserting that the said document was planted by an officer of the department also named by the assessee in the affidavit. However, such allegation of the assessee has not at all been enquired into and has been met with complete silence by the department. From the materials on record, it is very clear that the AO has failed to lay his hands on any credible evidence to establish the fact that the assessee has purchased the property for a consideration of ₹ 1,68,00,000/- as mentioned in the photo copy of sale agreement seized in course of search and seizure operation. The assessee has produced before the AO registered sale deeds in support of its claim that they had purchased the property for a consideration of ₹ 23.50 lakhs. When the AO alleges that the assessee has paid more than what has been declared in the registered sale deed because the fair market value of the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was sold. The assessee has also produced sufficient evidence to show that there was dispute going on regarding the legal right over the property which also had an effect on the fair market value of the property. It is also pertinent to mention here that the assessee had filed his return f income for the assessment years under dispute much prior to the date of search declaring the purchase of land in question at the consideration mentioned in the registered sale deeds. So far as the AO s observations on the loose sheets recovered from the residence of Smt. Nalini Devi are concerned, the CIT (A) after duly examining them has given a conclusive finding that the assessee s name has no where been mentioned in those documents nor the amount of ₹ 109.48 lakhs represents the expenditure incurred by Smt Nalini Devi. However, the amount was found to be the summary of the balance of various accounts operated by the family members of Smt. Nalini Devi. We find that the CIT (A) in his elaborate and well reasoned order has dealt with all these aspects and came to a finding on fact that the AO has made the addition purely on conjectures and surmises and not on the basis of any material or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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