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TMI Blog2011 (12) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial 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 Commissioner of Income-tax (Appeals) that user of material behind the back of the assessee is unjustified, is illegal, is bad in law, is in violation of principles of natural justice and such statement deserves to be excluded for nonconsideration but both the learned authorities grossly erred in placing mechanical reliance on the statement, its user is in utter violation of principles of natural justice. 1.4. That specific challenge was before the learned Commissioner of Income-tax (Appeals) in the Written-Submissions and arguments and reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ably 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, in not providing the material, in mechanically following the same, is in utter violation of principles of natural justice. 1.12. That the appellant having not earned the said amount of 4.07 crores and same having not been received by the appellant, the addition is unauthorized, illegal, invalid, bad in law and misuse of provisions of law and deserves deletion. 2. That on the facts and in the circumstances of the case, the learned lower authorities grossly erred in levying interest under section 234B & 234D when there is no liability of such interest.'' 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession 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 with those payments which have been shown in the books of account only. However, in the instant case the whole issue is about the payments being made, and being received in cash as on-money which have not been reflected in the books. Thus, section 50C is irrelevant in the facts and circumstances of the case. (iv) The issue basically as discussed elaborately is in respect of Rs. 4.07 crore which was given in cash by Sh. Ravindra Thakkar of Unique Group in lieu of purchase of Mahapura Land of the Assessee on which the project Unique Symphony was about to be developed. The Department is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way. (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 Rs. 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 Rs. 7.6 crore is accepted to have been received by her through cheque, there is no reason as to why the payment of Rs. 4.07 crore in cash would not have been received by her and same has to be accepted because both the figures form part of the same annexure. (viii) That various courts have held, from time to time, that the test of human probabilities and circumstantial evidence should be applied before arriving at any conclusion in any matter. Reliance is placed on the ratio of the decision in the case of Sumati Dayal 214 ITR 801 (SC) wherein it was held that "after considering the surrounding circumstances and applying the test of human probabilities had rightly concluded that the appellant's claim about the amount being her winnings from races was not genuine. 2.3 In view of the above elaborate discussion, A. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial 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 Rs. 1.00 crore per bigha. The assessee has sold 1.18 hectare of land for Rs. 7.60 crores 6. The AO without providing the supporting material, inspection record and cross examination made the addition of Rs. 4.07 crores and such action of the AO was in haste and was in violation of principle of natural justice. 7. There is no evidence of receipt of on money. The Sub-Registrar is the competent authority to value the property for the purpose of assessment of stamp duty and the value as shown by the assessee was accepted. 8. The value as shown in the registered sale deed should be accepted as sale consideration and for this proposition, the ld. AR relied upon Section 50C of the Act and also relied upon the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Dr V.K. Bhaskaran Nair and another (1979) 116 ITR 873 2.5 Before the ld. CIT(A) the assessee relied on the following decisions:- 1) Parimisetti Seetharamamma vs. CIT (1965) 57 ITR 532 (SC) 2) Umach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Thakkar concocted the storey of its payment and expenditure on conversion and construction. 2.13 From this statement, it appears that the amount has been surrendered as undisclosed income of Shri Ravinder Singh Thakkar in individual capacity. It is not known who has disclosed the impugned amount as his income whether Shri Ravinder Singh Thakkar in his individual capacity or the purchaser money. If the source was out of the sale consideration outside the books from various projects then it would be assessable in the hands of the relevant projects and its owners. Mere surrender made by M/s. Unique Group while filing their return of income is of no consequence. . There may be 101 hidden reasons for the so called surrender and its honouring by the M/s. Unique Group. 2.14 Shri Ravinder Singh Thakkar has stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een that it shows details of expenditure about some project and more particularly the expenditure/investment made in the project till 22.12.08. The cost of land under the bank column is mentioned as '760.00' and considering that such details are prepared by writing the amount in the units of 'lakh', obviously the cost of land is Rs. 760 lakhs under the bank column. The fact that figures have been written in units of 'lakh' is evident from amount of registration expenses incurred which is Rs. 32,94,660/- + Rs. 25,000/- (which can be rounded off to Rs. 33.20 lakhs) and is written as "33.20". Simultaneously, it is seen that the appellant has sold land to M/s MDPL for apparent consideration of Rs. 7.60 crore. According, it is quite evident from this document itself that it is reflecting the expenditure incurred by the Unique group on the project coming up on the land sold by the appellant to M/s. MDPL of Unique group. Immediately below the cost of land, the registration expenses, brokerage expenses and common boundary expenses are also mentioned and under the bank column respective figures of the expenses under these heads are shown. Against the head 'cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant portion of the statement of Sh.Ravindra Singh Thakkar dated 29.1.09 particularly the question no. 23 and his answer to the question, which has been used as supporting evidence in the case of appellant, was supplied to this appellant during the assessment proceeding. Similarly, copy of page 78 of exhibit A-24, which has been used against the appellant for making aforesaid addition was also supplied. Thus it is quite evident that reasonable opportunity has been given to the appellant wherein the copies of the evidence used against her were given. It may be mentioned that the complete statement of Sh. Ravindra Singh Thakkar will obviously have numerous details about business affairs of their group which being personal for the group can not be disclosed to other parties. Moreover all the complete details of business of Unique group are otherwise also not relevant and has also not been used against the appellant and therefore not required to be supplied to the appellant. Similarly page 52 to 54 having details of assets and liability of M/s MDPL had also not been used against the appellant and would obviously contain the details of business affairs of M/s MDPL, which is also not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned land on the basis of written as well as oral evidences and A.O. is not required to substantiated his finding by unearthing subsequent investment, if any, so made by the appellant. 7.6 The other argument is that purchaser of the land is M/s MDPL not Shri Ravindra Singh or Unique group. The A.O. has not spelt out as to what is Unique group. On being asked by the undersigned, the A.O. has informed that Sh. Ajit Pal Singh and Ravindra Singh are the directors in M/s Milestone Dwellers Pvt. Ltd. Moreover it is a known fact in the common parlance, the various concerns of Sh. Ravindra Singh and Sh. Ajit Pal Singh including M/s MDPL and other concerns are collectively known as 'Unique group'. 7.7 The other argument of the appellant that in the statement Sh. Ravindra Singh Thakkar has not stated as to on which date, to whom and before whom the alleged amount of Rs. 4.07 crore was paid in cash to the appellant has been considered by me. The argument is having no force, as obviously the cash amount would be given before the execution of the sale deed and it has to be given to the seller of the land, namely the appellant. It need not be given in the presence of someone else. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same judgment referred by ld. A.R. In the instant case of the appellant, it is seen that addition has not been made by the A.O. merely on the suspicion. The additions have been made on the basis of written as well as oral evidences. 7.11 The facts in the case of CIT vs. Anupam Kappor (2008) 299 ITR 179 (P&H) are different wherein there was no material before that A.O. to prove that the cash equivalent to the cheque amount was given. However in the instant case of the appellant, there is clear evidence. The facts of reported case of Mangilal Agarwal vs. ACIT (2008) 3000 ITR 372 decided by Hon'ble Rajasthan High Court are quite different then that of appellant. The decision in the case of Lal Chand Bhagat Ambica Ram vs. CIT (1959) 37 ITR 288 (SC) is also not applicable as facts of this reported case are quite different. Similarly other cases referred by the ld. A.R. of the appellant are distinguishable on facts. 7.12 In view of facts and circumstances and the documentary as well as the oral evidence, it is held that the appellant has received Rs. 4.07 crore as on-money in cash for sale of impugned land apart from apparent consideration of Rs. 7.60 crore received through ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime to time based on cogent material. Value evaluated by the District Level Committee formed by the Government is considered as real, actual and proper index of the prevalent rates. 5.1 The story of the "on money" payment has been concocted by Shri Ravinder Singh Thakkar in order to blackmail and pressurize the appellant. Relations became constrained immediately after execution of the Sale Deed and handing over of possession. He wanted the balance of the land be also sold and on the old terms, to which the appellant was not agreeable and refused. He threatened of dire consequences and also stated of his close contacts with the ruling party. It is an after-thought and manipulation on the part of Shri Ravinder Singh Thakkar with malice and malafides. 5.2 There is no material, worth credence found in the search, stating that "on money" was received by the appellant in connection with the impugned land. No copy of such seized document which clearly states that on-money was received in connection with the said land was provided to the assessee. 5.3 The ld. Assessing Officer has indulged in surmises and conjectures in stating that in this type of business, the transaction invariabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolved and unanswered. Copies of page 52-54 reflecting funds flow statement was not provided to the assessee. The ld. Assessing Officer utterly failed in providing the supporting material, as also not permitting inspection of the relevant record and cross examination. It has been established beyond doubt that no credence was given by the purchaser company; M/s. Milestone Dwellers Pvt. Ltd. while computing cost in its books of account, which too have been audited and submitted before the ld. Assessing Officer. The so called 'fund flow statement' of the said project is after the material date has not been recognized and believed by the purchaser company and not recorded in its books. Further it has not been explained as to how and in what manner conversion related expenditure of Rs. 1.08 Crores and construction expenses of Rs. 50 lacs were incurred. No supporting material has been produced or found. It is all manipulation and misstatement on the part of Mr. Ravindra Singh Thakkar, in his personal interest and for personal gain. 5.7 The appellant has not been provided with copy of the statement dated 28.01.2009. The appellant was provided only question Nos. 23 and 24 and its answ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l clear that he has taken the advantage of set-off/telescoping and in turn no real tax has indeed been paid by Shri Ravindra Singh Thakkar. Tax; if any, has been paid by Mr. Ravindra Singh Thakkar and not by M/s. Milestone Dwellers Pvt. Ltd. as alleged by the ld. Assessing Officer. 5.13 The ld. Assessing Officer has mentioned that statement of Shri Ravindra Singh Thakkar should not be subjected to question mark. We are surprised at the faith reposed by the ld. Assessing Officer who himself has rejected the statements given by the very same person in the case of Smt. Vijay Laxmi Dhadda / Padam Chand Dhadda. 5.13.1 Mere recording of statement after administering on oath cannot be mechanically, summarily and blindly believed to be true and correct. The said statement is false and has been emphatically denied as true by the assessee appellant. Mr. Ravindra Singh Thakkar has definitely committed offence of perjury. Non-putting of questions, which are very relevant and appropriate by the ld. Deputy Director clearly creates suspicion and certain assurances and protection extended to Shri Ravindra Singh Thakkar. It is apparent that when Shri Ravindra Singh Thakkar was found indulging i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it and shown it entirely under 'Cash'. Out of 642.39 shown under the head of Ajit Group it claims to have spent 565.00 in cash which is approx 88% and is highly doubtful. The figures appended in the abovementioned 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 Rs. 407.00 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 and extract more money from Milestone Group. iii) Further what is most surprising is the fact that entire Conversion Expenses (Liaison) to the extent of Rs. 108.00 lacs have been shown to have been incurred in Cash and not a single penny have been incurred in official charges. Such huge amount is highly unlikely for conversion. 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 Rs. 108.00 lacs represent the justification of share of investment by Mr. Ravindra Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the sale of goods. 6.2 Sec.17 of the Indian Registration Act, 1908 lists the documents which are compulsorily registerable. Sale deed is compulsorily registerable u/s. 17(1)(b) of the Act. The Sale Deed was registered on 15.03.2008. Sec.34 of the said Act is in respect of enquiry before registration by Registration Officer. Detailed enquiry was conducted u/s. 34. Document has been registered after scrutiny, verification and satisfaction. Certificate of registration has been affixed u/s. 60 of the Act. In the present case independent valuation was arrived at by the Competent Authority and stated on the Deed. 6.3 The Indian Stamp Act, 1899 requires payment of stamp duty. In respect of sale, it is advolarem based on the sale consideration. The competent authority has to satisfy in respect of the value and to adjudicate as to proper stamp duty. In case of deficient stamp duty, the deed can be impounded. No action for any additional stamp duty on the alleged amount of Rs. 4.07 Crore has been initiated by the Competent Authority. 6.4 It is well settled proposition of law that the Sub-Registrar of assurances is a competent authority to value a property for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l payment to the seller. In spite of the consistent claim of the appellant as to non-payment of any additional amount, the learned Assessing Officer failed to provide reliable supporting material and meet with the objections made and dealt hereinbefore. 7.2 The Lahore High Court in Divansingh vs. Gurbachan Singh and others AIR 1932 Lahore 276 held that in case of a sale, other evidence of the transaction, than the deed itself is barred by the provisions of sec. 91, Evidence Act. 7.3 The Mysore High Court in Doddamallappa v. Gangappa AIR 1962 Mysore 44 held "When a sale deed has been executed and registered in respect of certain immovable properties, in a suit for possession by the vendee it is not open to the vendor to let in oral evidence to show that the terms of the contract between the parties were different or were at variance with the terms contained in the registered document." 7.4 The Kerala High Court in Leelamma Ambikakumari and another Vs. Narayanan Ramakrishnan AIR 1992 Kerala 115 at 119 held: "Section 91 and 92 of the evidence act is a complete bar for any party to set up a case that the consideration for sale is morel than what is mentioned in the conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties to any such instrument for the purposes of contradicting varying, adding to or subtracting from its terms. According to illustration 'b' to section 92 if there is absolute agreement in writing between the parties where one has to pay the other a principal sum by a specified date then the oral agreement that the money was not to be paid till the specified date cannot be proved. Therefore, it follows that no oral agreement contradicting / varying the terms of a document could be offered. Once the aforesaid principle is clear then the ostensible sale consideration disclosed in the sale deed dated September 24, 2002 (A-7) has to be accepted and it cannot be contradicted by adducing any oral evidence." In the above-said case payment of sale consideration of Rs. 24,65,000/- was recorded. It was pleaded that sale consideration was not paid and affidavit of the vendor was filed, but was rejected being a selfserving document. It was observed that the consideration reflected in the Sale Deed, accepted by the Registering Authority, is relevant and must prevail. It also observed that the argument of the assessee is absurdly wrong argument for which no credence should be given and the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on suspicions, howsoever strong they may be. It is equally well settled that the courts decision must rest not upon suspicion but upon legal grounds established by legal testimony. Mere suspicion, however strong, cannot take the place of proof. We rely upon State vs. Gulzari Lal Tandon AIR 1979 S.C. 1382 and J.A. Naidu vs. State of Maharashtra AIR 1979 S.C. 1537. We may further mention that the lower authorities failed to find even a single instance of sale during FY 2007-08 at Rs. 2.50 Crore per bigha as alleged by it. 8.2 The above stated principles of the Indian Evidence Act are equally applicable and have been applied with full force in Income-tax proceedings. The Hon'ble Supreme Court in Chuharmal v/s. C.I.T. (1988) 172-ITR-250 stated: "what was meant by saying that the Evidence Act did not apply to proceedings under the Income-tax Act, 1961, was that the rigour of the rules of evidence contained in the evidence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of the Evidence Act in proceedings before them, they were prevented from doing so." 8.9 The ld. Assessing Officer on page 3 and onwards of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not alone be sufficient to charge any person with liability'." (Para 34) 9.2 We submit that the Revenue has failed to provide its mode of receipt by the assessee, the manner of receipt by the assessee, the date of receipt by the assessee and the evidence for its receipt by the assessee. No receipt or acknowledgement of the appellant individual has been found or produced, though the ld. Assessing Officer states on Pg 2 but no such alleged receipt has been found, shown, produced or annexed. 9.3 The documents furnished by the ld. Assessing Officer cannot be admitted in evidence and therefore no addition in this regard can be sustained. It is settled law that suspicion, howsoever, strong cannot take the place of legal proof, as has been held by the Hon'ble Supreme Court in the case of Umacharan Shaw and Bros. v. CIT (1959) 37-ITR-271. Further reliance is placed upon: * Krishnand vs. State of Madhya Pradesh: AIR 1977 SC 796 * Jayadayal Poddar vs. Mst. Bibi Hazra: AIR 1974 SC 171 * CIT vs. K Mahim Udma: 242 ITR 133 (Ker) * Dhakeshwari Cotton Mills: 26 ITR 775 (SC) * Omar Saha: 37 ITR 151 (SC) * Jindal Saw: 118 TTJ 228 (Delhi) 9.4 The circumstances narrated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B and found that it is belonging to the assessee-firm and assessed as income from undisclosed sources of the assessee. However, the Commissioner of Income-tax (Appeals) had set aside the said additions and up to the Tribunal, the finding was affirmed. On a reference being submitted to the High Court in terms of directions issued under section 66(2) of the Indian Income Tax Act,1992, the High Court set aside the additions made on account of undisclosed income in relation to the said amount. On appeal, affirmed the judgment of the High Court, the Supreme Court said (head-note). "That the question was not whether the amount of Rs. 5 lakhs belonged to B, but whether it belonged to the respondent-firm. The fact that B had not been able to give a satisfactory explanation regarding the source of Rs. 5 lakhs would not be decisive even of the matter as to whether B was or was not the owner of that amount. A person could still be held to be the owner of a sum of money even though the explanation furnished by him regarding the source of that money was found to be not correct. From the simple fact that the explanation regarding the source of money furnished by X, in whose name the money was l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anyone - neither Shri Ravindra Singh Thakkar / Milestone Dwellers Pvt. Ltd. / Unique Group / Shri Ajit Singh nor even by the ld. lower authorities. 9.7.3 As stated earlier - to extract/get more money from the promoters of "Milestone Group/Milestone Dwellers Pvt. Ltd." which is based in Mumbai some inflated figures were created in internal papers of Shri Ravindra Singh Thakkar/Unique Group so that Unique Group need not have invested amount to the extent of Rs. 4.07 Crores or Rs. 5.65 Crores. Shri Ravindra Singh Thakkar has even allegedly stated the money was from "various projects" but does not spell investment in the land purchased from the appellant. 9.8 The Punjab & Haryana High Court in CIT v/s. Anupam Kapoor (2008) 299 ITR 179 did not believe on the allegation: "A cheque had been taken by the beneficiary i.e. by paying cash equivalent to the cheque amount and the premium thereon". The Hon'ble Court at page 182 observed: There was no material before the Assessing Officer, which could have led to a conclusion that the transaction was, simpliciter a device to camouflage activities, to defraud the Revenue. No such presumption could be drawn by the Assessing Officer, merely on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gitimately lead to the inference that the profits in speculative transactions could exceed the value of the notes." It held that the Tribunal in arriving at its conclusion indulged in suspicions, conjectures and surmises and acted without any evidence or upon a view of the facts which could not reasonably be entertained : the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found. After applying number of judgments of the Apex Court it held as follows: "When a court of fact arrives at its decision by considering material which is irrelevant to the enquiry, or acts on material, partly relevant and partly irrelevant, and it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its decision, a question of law arises : whether the finding of the court of fact is not vitiated by reason of its having relied upon conjectures, surmises and suspicions not supported by any evidence on record or partly upon evidence and partly upon inadmissible material. An assessment made without disclosing to the assessee the information supplied by the departmental repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n administrative order which involves civil consequences...must be made consistently with the rules of natural justice". In the case of Mohinder Singh Gill v Chief Election Commissioner, New Delhi [(1978) 1 SCC 405], while defining the term ''civil consequence'', the Hon'ble Supreme Court said, " 'Civil consequence' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and nonpecuniary damages. In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence". The Apex Court has reiterated this view as in the case of S. L. Kapoor v Jagmohan & Ors [(1980) 4 SCC 379] and in Canara Bank & Ors. V Debasis Das & Ors [(2003) 4 SCC 557] 10.2 In the case of Sahara India (Firm), Lucknow v Commissioner of Income Tax, Central- I & Ano. [(2008) 14 SCC 151] the Apex Court underlined the aim of these principles when it held as: The underlying principle of natural justice, evolved under the common law, is to check arbitrary exercise of power by the State or its functionaries. Therefore, the principle implies a duty to act fairly i.e. fair play in action. The aim of rules of natural ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come tax & Sales Tax Officer (1994) 209 ITR 821 in a writ petition by the Petitioner-Assessee held that there were two inspections of the Petitioner's holdings on November 3, 1981, and on September 19, 1985, before and after the assessment year in question, when the inspecting authorities estimated the yield of cardamom from the petitioner's holdings at 180 Kgs. The order of reassessment was made without any reference to either of these inspection records but merely on the strength of the entries in the auctioneers' records. Reliance on the auctioneers' records and treating them as if they were conclusive did violence to the principles of natural justice. The petitioner had denied the sales in toto. He had also prayed for an opportunity to cross-examine the auctioneers. When such a request was made it was incumbent on the officer to afford opportunity to the assessee to cross-examine the authors of those books. The petitioner had been denied the reasonable opportunity which was due in law, in relation to the assessment, and that was sufficient to vitiate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Settlement Commission wherein she stated that she was agreeable to reasonable addition on a reasonable basis with regard to inadequate drawings for purchase of jackpot gifts, other expenses in connection with races and losses etc. The finding of the Settlement Commission in order to come to the conclusion that the apparent is not the real and that the appellant's claim about her winning in races is contrived and not genuine was based on the following reasons: (i) The appellant's knowledge of racing is very meager; (ii) A Jackpot is a stake of five events in a single day and one can believe a regular and experienced punter clearing a Jackpot occasionally but the claim of the appellant to have won a number of Jackpots in three or four seasons not merely at one place but at three different centres, namely, Madras, Bangalore and Hyderabad appears, prime facie, to be wild and contrary to the statistical theories and experience of the frequencies and probabilities; (iii) The appellant's books do not show any drawings on race days or on the immediately preceding days for the purchase of Jackpot combination tickets, which entailed sizable amounts varying generally betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the amount was remitted by Tilokchand, an employee of the assessee, to Nathirmal, another employee of the assessee." It further observed that the assessee cannot be expected to call for the specified persons in evidence for the purpose of helping the Revenue to discharge the burden which lay upon it. 12.1 We submit that it was the burden of the ld. Assessing Officer to prove that the amount of Rs. 4.07 Crores was paid by Shri Ravinder Singh Thakkar and was received by the appellant by way of sale consideration of the impugned land. We submit the material is totally absent for making addition in the hands of the appellant. The Revenue has utterly failed to discharge the burden heavily casted upon it. 13. In the light of the facts, submissions, contentions and the law analyzed herein above, it is most humbly and respectfully submitted that there is no material evidence on the basis of which the ld. Assessing Officer could legally come to the conclusion that the amount of Rs. 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 submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The AO for the first time issued a letter dated 21-09-2010 vide which he sought information u/s 133(6) in the case of M/s. Milestone Dwellers Pvt. Ltd.. The assessee filed the rely vide letter dated 29th Sept. 2010 and copy of this letter is available at pages 35 to 37 of the paper book. Vide this letter, the assessee stated that she has never received the amount of Rs. 4.07 crores in cash. It was further submitted in the letter that she is not aware as to how Shri Ravinder Singh Thakkar, Director of M/s. Milestone Dwellers Pvt. Ltd. has stated to have paid a sum of Rs. 4.07 crores. She requested the AO to kindly provide the copy of the statement of Shri Ravinder Singh Thakkar and also requested to provide the cross examination of Shri Ravinder Singh Thakkar. Alongwith this letter, he submitted the copies of the bank account as desired. The AO during the course of assessment proceedings in the case of the assessee for the first time issued a letter 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 Rs. 4.07 crores in respect of receipt of 'on money' be not added to her income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided all the materials which were being used against her. In case the AO was relying on the statement of a person then the assessee will have to be given an opportunity to cross examine. Moreover, in case the AO wants to make reliance for making addition on the basis of the documents found during the course of search at 3rd party then presumption u/s 292C will not be available against the assessee. Such presumption, even in the case of the assessee in whose case the document has been found during the course search, is rebuttable. Reliance is placed on the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. S.M.S. Investment Corporation Ltd., 207 ITR 364. While recording the statement of Shri Ravinder Singh Thakkar at the time of raid, he was confronted with pages 75 to 78 of the paper and pages 50 to 52 of Annexure A-24. However, the AO in his order has mentioned only to the fund flow statements and copy of such 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 Rs. 5.65 croes is not reflected in the assets and liabilities of M/s. Milestone Dwellers (P) Ltd. According to Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court directed the authorities to provide all the documents on which reliance has been placed. In the instant case, Shri Ravinder Singh Thakkar has not given any adverse statement. In case the revenue wanted to rely on the unacounted income offered by Shri Ajit Singh Thakkar then the assessee should have been provided an opportunity of not only seeing the document but also cross examination. The Third Member decision in the case of Kawin Internactive (P) Ltd. , 133 ITD 29 upheld the findings of the ld. CIT(A) in deleting the addition because the AO relied upon uncomparbale cases and has not provided the opportunity to the assessee of being heard. The Third Member had an occasion to consider the issue of making an addition merely on the basis of evidence procured from Third party in the case of ITO Vs. Mayur Agarwal , 128 ITD 55. It was held that no addition can be made merely on the basis of evidence procured 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en given by the assessee to K. The Tribunal was not right in law in upholding the addition of Rs. 8,78,358 in the hands of the assessee.'' 2.20 The Hon'ble Apex Court in the case of Rajesh Kumar v. DCIT , 287 ITR 91 held that principle of natural justice should be followed in the case where a person suffers civil consequences though the principle of natural justice is not impliedly mentioned. By passing of assessment order and creating a demand, there are civil consequences and the AO should have provided an opportunity. The Hon'ble Apex Court in the case of Kishinchand Chellaram v. CIT, 125 ITR 713 held that if an evidence to be used against the assessee is not shown to him then such evidence is not admissible. In this case, Hon'ble Apex Court held that the Department ought to have called upon the bank manger to produce the documents and papers on the basis of which he has made the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence against the assessee. ITAT Ahemdabad Bench in the case of Sheth Akshay Pushpavadan Vs. DCIT, 130 TTJ 42 held that presumption u/s 132(4A) cannot be invoked against the assessee in a case when the seized paper was not recovered during the course of search from the possession of the assessee. In this case, the documents which are being relied upon by the revenue were found during the course of search of third party. The Hon'ble Delhi High Court in the case of CIT Vs. Ashwani Gupta, 191 Taxman 51 confirmed the order of the ld. CIT(A) in which the ld. CIT(A) cancelled the order because there was violation of principle of natural justice. In this case, the assessee was neither provided copies of seized materials nor he was allowed to cross examine the person on the basis of whose statement, the addition was made. The ITAT Jaipur Bench in the case of ITO Vs. Shri Prem Chand Narang (ITA No. 1183/ 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 possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench in the case of Sheth Akshay Pushpavadan Vs. DCIT, 130 TTJ 42 (UO) held that payment of on-money on the basis of diary seized from the third party cannot be considered for the purpose of making addition u/s 69 of the Act. We therefore, hold that the ld. CIT(A) was justified in deleting the addition. The ld. CIT(A) has also considered the alternate submissions in respect of availability of funds with all the family members of the assessee and the addition could not have been made even if the entry in the document is to be presumed as correct.'' 2.21 Following our findings that there is violation of principle of natural justice and evidences not established against the assessee and hence the ld. CIT(A) was not justified in confirming the addition. We accordingly delete the addition. 3.0 The Hon'ble Punjab & Haryana High Court in the case of Paramjit Singh Vs. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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