TMI Blog2011 (12) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee are as under:- 1. That on the facts and in circumstances of the case, the ld. lower authorities grossly erred in acting illegally on facts as well as in law, in assuming, presuming, on conjectures and surmises, in holding and making an addition of impugned amount of ₹ 4.07 crores (Rupees Four crores and seven lakhs only) as income on account of receipts by way of undisclosed income. 1.1. That the impugned addition is wholly unjustified and inferences so drawn are baseless, without evidence, without material and contrary to the material on record and are whimsical. 1.2. That the learned Assessing Officer grossly erred in relying upon the vague, unrelated statement of one Shri Ravindra Singh Thakkar which is unsupported by any other material or corroborative evidence, which was at the back of the appellant, the learned Commissioner of Income-tax (Appeals) also grossly erred in following the same without any application of mind and without providing a right to cross-examine the person who so stated adversely at the back of the appellant. 1.3. That it is categorically stated before the learned Assessing Officer as well as the learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.9. That it was also stated that even the sale price duly stated in the registered sale deed is substantially higher (more than 3 times) than what was prevailing price (DLC price) by the Sub-Registrar, Sanganer Jaipur (City), District Jaipur. Even then, the learned lower authorities grossly erred in ignoring the same and in putting their own value which is based on no material and contrary to the material on record. 1.10. That the learned lower authorities grossly erred in illegally observing that in such type of dealings the transaction invariably has cash/on money component, which is based on assumptions, presumptions, conjectures and surmises and contrary to the findings of the registering statutory authority and the material on record. 1.11. That the learned lower authorities grossly erred in placing reliance on the so called alleged surrender, if any, by Shri Ravindra Singh Thakkar or/and group companies without providing any contrary material and without providing the basis as to on what basis surrender was made and tax if any was paid by Shri Ravindra Singh Thakkar and group companies. Even otherwise, using the said material behind the back of the assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply rotates around the District Level Committee (DLC) rate of the area, the provisions of section 50C, various supposed events which would have/have not transpired between the Assessee and Sh. Ravindra Thakkar of Unique Group and M/s. MDPL. (ii) The Assessee in her reply has contended that the said land was already sold at three times the DLC rate prevalent during the time and alleged receipt of ₹ 4.07 crore would further raise the final sale consideration of land. This contention of the Assessee has no bearing on the fact of the case because the undersigned is in possession of seized document which clearly states otherwise that on-money was received in connection with the said land. Needless to mention that in this type of business, the transaction invariably has cash/on-money component which is out of books and the vehement reliance on the DLC rate by the Assessee does not actually serve her purpose. (iii) The Assessee's reliance on the provisions of section 50C whereby it has been alleged that the Assessing Officer cannot adopt a value higher than the prevalent DLC rate for purpose of section 48 of the Act is misplaced because section 50C only deals wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been administered under oath. Secondly, the Unique Group has surrendered the amount so mentioned in the statement in their return of income. Thirdly, tax and interest has been duly paid and deposited in the government coffers. Fourthly, a document has been seized which contains mention of cash payment of ₹ 4.07 crore and this document corroborates the statement of Sh. Ravindra Singh Thakkar of Unique Group. Thus, all the facts pointed above leave no room for the suspicion of the statement of Sh. Ravindra Singh Thakkar of Unique Group taken on oath and there is no reason for the A.O. to have disbelieved the said statement anyway. (vii) The Assessee in her reply para 3.3. has vehemently argued that the statement as well as the paper is baseless because it does not spell anywhere that the alleged payment of ₹ 4.07 crores was made to her. The argument of the assessee is ridiculous and devoid of any logic because very obviously, the assessee was the sole seller of the said land and when ₹ 7.6 crore is accepted to have been received by her through cheque, there is no reason as to why the payment of ₹ 4.07 crore in cash would not have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res as against the value evaluated by the stamp authority at ₹ 2.53 crores. 4. The loose pages which were confronted to the assessee were explained as fund flow statement and position of funds as on 21-12-2008. Reference has been made to pages 50 to 52 of the of Annexure A of page no. 78 of Annexure A on the basis of loose sheet. Shri Ravinder Singh Thakkar was required to explain the source of 5.65 crores . In his reply, he admitted the difference of ₹ 6.65 crores on account of investment and expenditure. In respect of source of expenditure, it was stated that sale consideration is out of books received by cash in respect of different projects. It was submitted before the ld. CIT(A) that DDIT did not call for further material or details to verify about credence and correctness of the statement. 5. The assessee filed the details of different sale deeds of land situated in village Mahapura and none of the land was sold below ₹ 1.00 crore per bigha. The assessee has sold 1.18 hectare of land for ₹ 7.60 crores 6. The AO without providing the supporting material, inspection record and cross examination made the addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence and also was informed of close contacts of Thakkar family with the ruling party. The so called on money payment is afterthought and manipulation on the part of Ravinder Singh Thakkar with malice and malafides. 2.9 The assessee has shown the capital gain on the entire sale consideration though she could have easily evaded the payment of tax by showing the sale of land at DLC rate i.e. the rate at which land could have been valued for stamp duty purposes. The revenue has not been able to point any other comparable case of sale. 2.10 It was further submitted that M/s. Milestone Dwellers (P) Ltd. has not taken the benefit of any such payment in computing the cost in books of accounts. The so called fund flow statements of the said project is after the material date and therefore, cannot be believed.. 2.11 Shri Ravinder Singh Thakkar in his statement has nowhere categorically stated that the amount has been paid in cash to the assessee as on money in lieu of buying the said land of the assessee at Mahapura 2.12 Shri Ravinder Singh Thakkar received the cash payment from the sales made in different projects in order to siphon such amount. Shri Ravinder Singh Thakk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of Funds as on 22.12.2008 Requirement Total Amount Bank Cash Cost of Land 1167.00 760.00 407.00 Registration Exp. 33.20 33.20 Brokerage 7.50 7.50 Common Boundary 1.65 1.65 Total Cost of Land 1209.35 802.35 407.00 Conversion Exp. (Liason) 108.00 108.00 Expenses incurred till date Construction Expenses 200.19 50.19 0.00 Sales Mktg. Exp. 18.81 18.81 Salary to Staff 13.85 13.85 Indirect Expenses 16.08 16.08 Fixed As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the page, is also irrelevant in view of above discussion. 7.1 This conclusion is further supported by the statement of Sh. Ravindra Singh Thakkar S/o Sh. Ajit Singh Thakkar (son and father, both being directors of the company) recorded on 29.1.09 during the course of search carried out in their group, wherein at question no. 23,he was confronted with page 75 to 78 of Annexure A-24 having position of fund as well as page 50 to 52 of A-24 having details of assets and liabilities of M/s MDPL as on 31.12.08. After going through these papers Sh. Ravinder Thakkar admitted that the group has incurred on-money expenditure of ₹ 4,07,00,000/- for purchase of land which is paid in cash. He has also stated about the other expenditure incurred in cash on construction and other item totaling to ₹ 5,65,00,000/- (including above referred ₹ 4.07 crore). He has also admitted that this amount is not recorded in the books of accounts of M/s MDPL or other entity of the group. 7.2 The statement of Sh. Ravindra Thakkar further clinches the issue that ₹ 4.07 crore have been paid by the directors of M/s MDPL in cash over and above ₹ 7.60 crore p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whereas the land of the appellant is just adjoining (rather touching) Jaipur-Ajmer Highway, and in fact the north side of the land so sold is surrounded by Jaipur-Ajmer Road as is clearly mentioned in the first schedule attached with the registered sale deed of the impugned land dated 15.3.08. Secondly, the other copy of the sale deed by Smt. Premlata Bansal to M/s. Salasar Overseas Pvt. Ltd. is regarding the agricultural land which is not at all on the Jaipur-Ajmer Highway but is on small road going from village Mahapura to village Newta and thus is not at all comparable. Without prejudice to above, it is seen that when there is document proving payment of on-money in cash by the purchaser against sale of the land for the project to be developed by the purchaser, and thereby consequent receipt of money by the appellant unaccountedly which is further supported by the statement of Sh. Ravindra Kumar Thakkar of M/s MDPL (The purchaser) averring incurring of expenses by way of on-money paid in cash for purchase of impugned land, such direct evidences will obviously override these sales instances of the claimed nearby lands (though they are not nearby land as mentioned above). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.07 crore was made in cash (apart from 7.60 crore made through cheque), then assumption of the A.R. that there may be 101 reasons for the so-called surrender is far fetched and frivolous. Further as regards date of cash flow statement being 22.12.08, being after 15.3.08 i.e. date of registration is concerned, from careful perusal of the details mentioned on impugned document i.e. A-24/78, it is seen that though the heading indicate 'the position of fund as on 22.12.08' but the details mentioned below clearly show the broad expenditure incurred in purchase of land and thereafter in the construction till 22.12.08. Obviously, as against the heading 'cost of land' under the column 'bank' and 'cash', figures of '760.00' and '407.00' are written apart from figure under the column total amount as '1167.00', it evidently provides that apart from ₹ 760 lakhs, the purchaser group has paid ₹ 407 lakhs in cash to the seller of the land at the time of purchase of land. Therefore the argument of the A.R. of the date being different is rejected. 7.9 Now coming to the decision cited by the A.R. of the appellant, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e head income from other sources it will be reasonable and fair to consider it as unaccounted addition sale proceeds received and to work out the capital gain accordingly. 2.18 Before us, the ld. AR has filed the written submission alongwith the paper book containing 147 pages. We are reproducing the written submission though most of the submissions are the same which have been raised before the ld. CIT(A) and have been considered by him. 2.1 The ld. Assessing Officer in his assessment order at Pg 2 claims to have sent a letter dated 03.12.2010 but it was not received by the appellant. However, the appellant received a letter dated 16.12.2010 for 20.12.2010. With this letter too copy of the alleged statement of Shri Ravinder Singh Thakkar was not provided. A reply dated 20.12.2010 was submitted. PB 49-51. There upon copy of part of the alleged statement of Shri Ravinder Singh Thakkar dated 29.01.2009 was provided, giving only questions No. 23 24 and its reply. (PB 52-54) 3. The appellant submitted two detailed letters of explanations and objections dated 23.12.2010. These objections have been considered by the AO in his assessment order and mentioned by us in bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndulge in under statement and truly recorded the sale consideration. The assessee has already paid huge capital gains tax. The purchaser too would have paid lesser stamp duty and registration. Further the ld. Assessing Officer has utterly failed to find subsequent investment of the alleged on-money. Where the alleged on-money evaporated remains unexplained, though it is more than three years. 5.4 The understanding of the ld. lower authorities that section 50C only deals with those payments which have been shown in the books of account only is erroneous and highly misunderstood. Section 50C on the contrary substitutes the recorded value in the sale deed and does not talk of the books of account. The alleged on-money was not received by the appellant and hence has not been reflected in her books regularly maintained and has also not been found to have been invested or spent. Books have been accepted by the learned Assessing Officer. Section 50C is relevant and has been rightly relied upon. 5.5 The ld. lower authorities have utterly failed in finding any other transaction of similarly situated land at the alleged rate of ₹ 2.50 Crores per bigha. When such ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant at Mahapura. 5.9 It appears that out of book sales consideration from various projects was received and siphoned by Mr. Ravindra Singh Thakkar and to pocket that amount he concocted the story of its payment and expenditure on conversion and construction. Further the cash flow statement as on 22.12.2008 is after 15.03.2008, the date of registration of the sale deed. The position of funds as on 22.12.2008 and requirement is even otherwise internal working unconnected with the appellant. 5.10 Mr. Ravindra Singh Thakkar has nowhere stated: as to on which date, to whom and before whom the alleged amount of ₹ 4.07 Crores was paid by cash to the appellant. He has not produced any receipt or contemporary evidence. From the statement it appears that such amount was surrendered as undisclosed income of Shri Ravindra Singh Thakkar in individual capacity. It is not known as to who has disclosed the impugned amount as his income whether Shri Ravindra Singh Thakkar in his individual capacity or the purchaser company. If the source was out of book sales consideration from various projects, then it would be assessable in the hands of the relevant projects and its owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not Shri Ravindra Singh Thakkar or Unique Group what is Unique Group has not been spelt out by the ld. Assessing Officer. The so called facts made as a base for foundation of the addition are surmises, conjectures, assumptions, presumptions, suspicions on the part of the learned Assessing Officer and the action is arbitrary, capricious unreasonable, unfair and illegal; offending Article 14, 19 and 265 of the Constitution of India. 5.14 Statement of the assessee appellant were also recorded u/s.132(4)/131 of the Act on oath on 25.02.2009 and 02.03.2009 wherein she clearly and categorically stated that the impugned land has been sold at ₹ 1.50 Crore per bigha to the company through Vishal Jain broker. She stated that entire sale consideration was received by cheques and no cash amount was received. She clearly stated on oath that she has not received payment at ₹ 2.50 Crore per bigha and has not received any amount other than recorded in the registry. 5.15 The inference drawn by the ld. lower authorities on the basis of position of funds as on 22.12.2008 and requirement is erroneous, unbelievable and insufficient to make such a huge addition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 150.00 lacs by Bank. No detail of payment of such huge amount in cash is provided by the department. Incurring such huge expenses without obtaining 90B permission approval of maps from JDA is highly doubtful, as one cannot start construction before obtaining 90B approval of maps. Construction activity is barred over agricultural land without transfer of land use and approval of maps. The figures appended in the above-mentioned sheet needs to be confirmed by M/s. Milestone Group which has not been done so by the ld. lower authorities. It fortifies the argument of the assessee appellant that ₹ 50.00 lacs represent the justification of share of investment by Mr. Ravindra Singh Thakkar/ Unique Group in M/s. Milestone Dwellers Pvt. Ltd. without actual investment made by it. v) It is nothing but a dumb document as far as assessee appellant is concerned. There are many pitfalls and unanswered questions as mentioned earlier. It is no evidence. 6. It is submitted that the Sale Deed has been duly executed and registered and the contents of the said document have become final and unchallengeable. We submit there is no evidence that alleged on money of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f prevalent market rates. 6.5 The legislature in its wisdom has inserted sec. 50C of the Act with effect from 1st April, 2003. As per the said section, the full value of the consideration for the purposes of sec. 48 of the Income-tax Act shall be deemed as is assessed by the Stamp valuation authority for the purpose of payment of stamp duty. The legislature have reposed confidence in and have held for substitution of that value considering it as more realistic. We submit in the present case the value as computed by the stamp authority should prevail. We rely upon the decision of the Hon ble Bombay High Court in CIT v. Dr. V.K. Bhaskaran Nair and another (1979) 116 ITR 873. 7. Sec.91 92 of the Indian Evidence Act, 1872 are extracted hereunder: 91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of document. When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other dispositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration agreed to between the parties was of a different kind than what was mentioned in the document. The definite case of the plaintiff is that the real consideration for the sale was ₹ 16,000/- where as the conveyance shows the consideration to be ₹ 10,000/-. In view of the provisions contained in sec.91 and 92 of the Evidence Act, the plaintiff is not entitled to plead such a case, nor he is entitled to adduce evidence in support of the same. 7.5 The Hon ble Supreme Court in M/s. Febril Gasosa vs. Labour Commissioner and others AIR 1997 (S.C.) 954 at 958 has held A written settlement arrived at between the parties could not, therefore, be varied or modified except by a written settlement or by a written memorandum duly signed by the parties incorporating the terms of the socalled understanding. Sec.92 of the Indian Evidence Act, 1872 also lays down that when the terms of any contract, grant or settlement, as are required by law to be reduced to the form of a document, have been proved as per the provisions of sec.91 of the Evidence Act, no evidence of any oral agreement or settlement shall be admitted as between the parties to any such instrument o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le deed, which are already executed and reached finally. (Page 591) 7.7 Hyderabad Bench of ITAT in Smt. K.Narasamma vs. ITO (1990) 32 ITD 494 held: any evidence stood precluded by virtue of provisions of sections 91 and 92 of the Indian Evidence Act, 1872, according to which, when the terms of any disposition of property, etc., have been reduced to the form of a document, no evidence shall be given in proof of the terms of such disposition of property except the document itself. This being the position, on facts and in law, no weight could be given to the statement of B to prove that an amount of ₹ 3.5 lakhs and not ₹ 3 lakhs passed on from B to the assessee as sale consideration. 7.8 We may further mention that the learned lower authorities have not proved his claim and has also not been able to disprove the claim of the appellant. Section 3 of the Indian Evidence Act, 1872 is interpretation clause. We are extracting here under the sense in which the expression proved , disproved and not proved have to be understood: PROVED : A fact is said to be proved when after considering the matters before it, the Court either believes it to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and without jurisdiction. It is well settled proposition of law that when any addition is made by the Revenue by way of income, the burden to prove that such amount was received and was in the nature of income is on the Revenue. In the instant case, the ld. Assessing Officer has utterly failed to discharge his burden which heavily lied upon him. As far as the burden of appellant is concerned it was discharged by statements recorded under oath and otherwise. 9.1 In the case of the appellant, the Revenue has utterly failed to prove that the impugned amount of ₹ 4.07 Crore was received by the appellant during the assessment year in question from Shri Ravinder Singh Thakkar or anyone else. 9.1.1. The Hon ble Supreme Court in Parimisetti Seetharamamma v. CIT (1965) 57-ITR-532 at 536-537 observed: By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases, in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce drawn by him. The finding of the learned Assessing Officer based on the circumstances is perverse and is only a surmise or conjecture, which does not entitle a judicious quasi-judicial authority to make such a fanciful addition and create fictitious-imaginary tax demand. 9.5 The proposition that burden to prove while making any addition in the hands of an assessee is on the Revenue is well settled. The Legislatures in its wisdom, to make the said proposition explicitly, inserted section 69A by the Finance Act, 1964 with effect from 1.4.1964, putting the burden on the Revenue to prove that the assessee is owner of any money, bullion, jewellery, etc. not recorded in the books of account, if found to be the owner of such money, bullion, jewellery, etc. Once the assessee is found as the owner, the burden to explain its source is on the assessee else it shall be assessable as undisclosed income. The question of furnishing explanation would arise only when the Revenue proves beyond doubt that the money was paid to the appellant. In the present case nothing is there except the alleged statement which too does not mention the name of the appellant or payment for purchase of land of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been found to be false, it would be a remote and farfetched conclusion to hold that the money belonged to Y. There would be in such a case no direct nexus between the facts found and the conclusions drawn therefrom. 9.7 In the present case the real question before the ld. Assessing Officer was whether the sum of ₹ 4.07 Crores was paid by Shri Ravinder Singh Thakkar by cash to the appellant in person and on which date and what is the evidence for the payment. We submit noting as provided on page 78 and statement is not sufficient and adequate evidence. It is a dumb document. Even the name of the assessee does not appear. There are many pitfalls and unanswered questions noted earlier. It is no evidence. 9.7.1 On perusal of the alleged statements of Shri Ravindra Singh Thakkar (though it does not have any evidentiary value) even it does not spell the name of the appellant at all, further it does not mention even payment of money to the extent of ₹ 4.07 Crores of land of the assessee by him/them. Even Shri Ravindra Singh Thakkar does not say as to how and in what manner huge amount of ₹ 4.07 Crores was paid. A person making such huge payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue. No such presumption could be drawn by the Assessing Officer, merely on surmises and conjectures . The Income Tax Appellate Tribunal rightly relied on C. Vasantlal and Co. v. CIT (1962) 45- ITR-206 (SC); M.O. Thomakutty v. CIT (1958) 34-ITR-501 (Ker.) and Mukand Singh and Sons v. Presiding Officer, Sales Tax Tribunal (1997) 107- STC-300 (P H). It also took support from the binding precedents observing: The Income Tax Appellate Tribunal also took into consideration that it was only on the basis of a presumption that the Assessing Officer concluded that the assessee had paid cash and purchased the cheque. 9.9 The Hon ble Supreme Court in Dhakeshwari Cotton Mills v. C.I.T. (1954) 26-ITR-775 at 782 observed: As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income Tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income Tax Officer is not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into consideration all materials which the assessee wants to produce in support of the case constitutes a violation of the fundamental rules of justice and calls for interference by the court. It also held: Conclusions based on facts proved or admitted may be conclusions of fact but whether a particular inference can legitimately be drawn from such conclusions may be a question of law. Whether, however, the facts finding authority has acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law could have found; the court is entitled to interfere. 10. Opportunity of cross-examination not provided: 10.1 Principles of natural justice have an ancient ancestry. Law presumes that Man has an innate sense of goodness, of fairness, and of morality. Since certain principles are considered to be omnipresent in Nature, Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the principle implies a duty to act fairly i.e. fair play in action. The aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. They do not supplant the law but supplement it. 10.3 The Full Bench of Supreme Court in the case of State of Kerala vs. K.T. Shaduli Yusuff (1977) 39 STC 478 held as under One of the rules which constitutes a part of the principles of natural justice is the rule of audi alteram partum which requires that no man should be condemned unheard. It is indeed a requirement of the duty to act fairly, which lies on all judicial authorities, and this duty has been extended also the authorities holding administrative enquiries involving civil consequences or affecting rights of parties . 10.4 The Hon ble Supreme Court in Kishan Chand Chela Ram vs. CIT reported in (1980) 125 ITR 713 held that The department ought to have called upon the manager to produce the documents and papers on the basis of which he made the statements and confronted the assessee with those documents and papers. It was true that proceedings und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order. The order of reassessment was not valid and was liable to be quashed. 10.8 The Hon ble Calcutta High Court in CIT Vs. Eastern Commercial Enterprises (1994) 210 ITR 103 held that Cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him. He must be supplied the contents of all such evidence, both oral and documentary, so that he can prepare to meet the case against him. This necessarily also postulates that he should cross examine the witness . 10.9 The Income-tax Appellate Tribunal, Hyderabad Bench in Mahaveer Transport Co. vs. ITO reported at (1987) Vol. 23 ITD 206 held further while finalizing the assessment even an opportunity to cross examine those lorry owners from whom the statements and sworn depositions were recorded was prayed for by the assessee. However, that request was not considered. It was against principles of natural justice and the statements of the lorry owners could not be used for any purpose whatsoever in as much as no fair opportunity was given to the assessee to cross-examine these witnesses . 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on race days or on the immediately preceding days for the purchase of Jackpot combination tickets, which entailed sizable amounts varying generally between ₹ 2,000/- and ₹ 3,000/-. The drawings recorded in the books cannot be co-related to the various racing events at which the appellant made the alleged winnings; (iv) While the appellant's capital account was credited with the gross amounts of race winnings, there were no debits either for expenses and purchases of tickets or for losses; and (v) In view of the exceptional luck claimed to have been enjoyed by the appellant, her loss of interest in races from 1972 assumes significance. Winnings in racing became liable to income tax from April 1, 1972 but one would not give up an activity yielding or likely to yield a large income merely because the income would suffer tax. The position would be different; however, if the claim of winnings in races was false and what were passed off as such winnings really represented the appellant's taxable income from some undisclosed sources. (II) The Hon ble Court commented on the approach of the Chairman of the Settlement Commission and approved of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of ₹ 4.07 Crores was paid by Shri Ravinder Singh Thakkar and was received by the appellant. The addition deserves to be deleted and be directed to be deleted. 2.19 Before us, the ld. DR submitted that evidence filed during the course of search and the statement recorded on oath of Shri Ravinder Singh Thakkar clearly suggest that on money has been passed in respect of purchase of land. The sale consideration as mentioned in the sale deed is shown in the position of fund as on 22-12-2008. The cost of land has been taken at ₹ 11.67 crores which included the consideration paid through bank and consideration of ₹ 4.07 crores paid in cash. It is not the case of the assessee that the expenses mentioned in such documents are incorrect. In respect of construction expenses, the ld. DR submitted that the group which purchased the land made construction. The expenditure must have been incurred even before getting the approval because for incurring the expenditure, the decision of the group in making investment is important. The group may incur the expenditure even not permitted by the Rules and Regulations. What we were considering is as per document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 3-12-2010. The AO in his order has mentioned that in the letter dated 3rd Dec. 2010, the assessee was required to explain as to why a sum of ₹ 4.07 crores in respect of receipt of on money be not added to her income for the assessment year 2008-09. In the written submission, the ld. AR submitted that the assessee received a letter dated 16-12-2010 and filed reply vide letter dated 20-12-2010. Vide this letter, the assessee informed the AO that she has not received letter dated 3-12-2010 and requested that copy of this letter alongwith Annexures be provided to her. The assessee filed reply vide letter dated 23-12-2010 and copy of that letter alongwith Annexure is available at pages 55 to 79 of the paper book. This reply was filed after getting copy of letter dated 3-12-2010 alongwith Annexures. Vide this letter, AO was informed about the copies of the sale deed of lands situated in village Mahapura which showed that the land was not being sold about ₹ 1.00 crore per hectare. Vide this letter, it was stated that Shri Ravinder Singh Thakkar has made a huge windfall in getting the land without investing his share in M/s. Milestone Dwellers Pvt. Ltd.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund flow statements was given to the assessee. In the statement, Shri Ravinder Singh Thakkar was asked to explain as to why the entry of ₹ 5.65 croes is not reflected in the assets and liabilities of M/s. Milestone Dwellers (P) Ltd. According to Shri Ravinder Singh Thakkar, there is difference between two balance sheets and the difference is to the extent of ₹ 5.65 crores i.e. the amount invested in cash. We are not having the benefit of going through all the papers mentioned in the statement relating to such issue as these have not been provided to the assessee except fund flow statement. Thus we feel that the assessment order has been passed in violation of principle of natural justice. We had considered the similar issues in the case of Smt. Vijay Laxmi Dhadda. In that case also, the principle of natural justice was violated and the reliance was placed on documents found at the search of third party. It will be useful to reproduce the following paras from that order. 2.17 The revenue authorities recorded the statement of Shri Ravinder Singh Thakkar, a person belonging to M/s. Unique Group on different dates from 28-01-2009. The revenue authorities provided on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocured from Third party when the assessee denied transactions unless such party to be put up for cross examination. 2.19 We had noticed that search operations were carried out in the case of M/s. Unique Group on 28-01-2009. The statement of the husband of the assessee was recorded on 4-03-2009 and the statement of the assessee was recorded on 16-03-2009. We are not aware as to when Shri Ajit Singh Thakkar, father of the assessee Shri Ravinder Singh Thakkar admitted such unaccounted payment and included in the calculation while working out the additional unaccounted income offered for taxation in the return of income so filed. The assessee was given show cause notice alongwith Annexure on 16-12-2010. The assessment has been completed vide order dated 29-12-2010. Hence all the proceedings have been concluded within a fortnight of issuance of show cause notice. The search was conducted in Jan. 2009 and the statement of the assessee was recorded in March 2009. After receipt of the show cause notice, the assessee required the AO to provide him statement of computation of income filed by Shri Ajit Singh Thakkar. After getting the copies, the assessee should have asked for cross exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement and confronted the assessee with those documents and papers. The Hon'ble Apex Court in the case of CIT Vs. Bokaro Steel Ltd. , 236 ITR 135 had an occasion the issue of accrual of income and principle of real income. In this case, the original agreement seized to be operative abinito and reversal of entries were there in the account books. The assessee did not receive any real income. In the instant case, the assessee in his statement in the month of March, 2009 clearly stated that the amounts were not received and cheques were returned back. Such facts is supported from the statement of Shri Ravinder Singh Thakkar made u/s 132 (4) of the Act at the time of search. The concept of real income was again reiterated by the Hon'ble Apex Court in the case of Godhra Electricity Co. Ltd. Vs. CIT, 225 ITR 746. The Hon'ble Apex Court in the case of CIT Vs. Daulatram Rawatmull, 87 ITR 349 observed that there should be necessity of nexus between the conclusion and primary facts. The assessee has not been able to show that he received cheques and the same were returned because the deal could not materialize. The revenue is relying on the disclosure of income by Shri Ajit Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83/ JP/2010 dated 11-02-2011) had an occasion to consider the presumption as contained in Section 292C of the Act. It will be useful to reproduce following para from that order. 2.7 Section 292C refers to the presumption in respect of books of account and documents found in the possession and control of any person in the course of survey u/s 133A of the Act. The presumption which may be made for any proceedings under the Act are as under:- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] 2.8 Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO , 236 CTR 466 had an occasion to consider the issue of admissibility of oral evidence as against documentary evidence. It will be useful to reproduce the held portion from the above judgement.. Held. There is well-known principle that no oral evidence is admissible once the document contains all the terms and conditions. Section. 91 and 92 of the Indian Evidence Act, 1872 (for brevity the 1872 Act ) incorporate the aforesaid principle. According to Section 91 when terms of a contract, grants or other disposition of property have been reduced to the form a of a document then no evidence is permissible to be given in proof of any such terms or such terms or such grant or disposition of property except the document itself or the secondary evidence thereof. According to Section 92 of the 1872 Act, once the document is tendered in evidence and approved as per the requirements of Section 91 then no evidence of any oral agreement or statement would be admissible as between the parties to any such instrument for the purpose of contradicting, varying, adding to or subtracting from its terms. According to illustration b to Section 92 if there is an absolute agreement in wr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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