TMI Blog2014 (7) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... tained in the affidavit of the assessee, has not been controverted by the Revenue, therefore, there is no reason to affirm the addition, so made, by the AO. AO is merely trying to catch the straw in whirlwinds with the help of oral statements of the sellers, ignoring the contents of the registered sale deeds, which are duly signed by the assessee as well as the sellers, in the presence of the witnesses and the registering authorities. It is noteworthy, as argued by the learned Counsel for the assessee also, that the sale was made on 27.7.2006 whereas the cash was deposited by the sellers in their accounts three months thereafter. It is quite unlikely that cash is given after the registration of the property. Noteworthy that sellers of the land filed return in December, 2009 and signed the affidavit on 31.12.2009. The receipt of cash and cheque are duly mentioned in the sale deed, therefore, it is unbelievable that after the registration of the property is made, the cash is deposited three months thereafter in the accounts of the sellers. Therefore, how it can be presumed that the property was sold at a different rate other than shown in the registered documents. The sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee firm, consisting of five partners, came into existence on 14.7.2006 to carry business of trading of property, construction of property and other business activities. The assessee purchased land in Goyala Khurd, Ujjain for a consideration of ₹ 1,22,46,236/- including registration charges and further made expenditure on site development at ₹ 8,47,722/-. The assessee executed five registration deeds in respect of purchase of land, declaring total cost at ₹ 1,22,46,236/-. It was contended by the learned Counsel for the assessee that information u/s 133(6) of the Act was collected by the Department. The Assessing Officer asked the sellers to produce the bank pass book, in which, some cash was found to be deposited. The statements of the sellers were recorded, as per which, they told that the cash was received from the purchaser. Mr. Choudhary contended that oral statement has been heavily relied upon by the Department for making the addition, more specifically when there is no relation of the assessee with the money found deposited in cash in the account of the seller. The learned Counsel took us to various pages of the paper book. It was emphatically argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. It was pointed out that valuation has been done at the higher rate by the registering authority and the seller of the land is 80 years old. Our attention was also invited to page 46 of the paper book. In reply, the learned Counsel for the assessee contended that no evidence has been produced by the Revenue to establish that cash was actually paid by the assessee to the sellers of the land. 2.1 We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm was constituted by the registered partnership deed dated 14.7.2006. The assessee is a builder/developer of land, purchased land at Goyala Khurd, Ujjain. The assessee declared nil income in its return, filed on 13.9.2007. The assessee firm produced five registered sale deeds of purchasing of land. The Assessing Officer called information u/s 133(6) of the Act from the sellers of the land and recorded their statements u/s 131 of the Act. As per the Revenue, the sellers of the land confirmed that they sold the land to the assessee @Rs.11,50,000/- per bigha. On the basis of the statements of the sellers, the ld. Assessing Officer came to the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounts of the sellers prior to this date and even in the year 2005, which raises a suspicion, more specifically when no agreement to sale has been brought on record by the Revenue evidencing that the transaction was done at different amount which has been shown in the registered sale deed. Even no statement has been recorded from the witnesses to the sale deed/transaction which clearly weakens the case of the Department. The first deposit found in the account of the sellers is of December 2005 then on 25.8.2006 and thereafter on 14.10.2006. It is further noted that affidavits of sellers are dated 31.12.2009 which is clearly an afterthought, more specifically when the date of the sale of the land is 27.7.2006. It is also noted that there are also deposits three months afterwards from the date of the registration which clearly falsifies the claim of the sellers because normally, no money is transacted after the registration of the sale deed except the cheque which has been shown in the registered documents. We have also perused the sale deeds dated 24.8.2006, in which, ₹ 21 lacs has been shown as sale price along with stamp duty etc. worth ₹ 2,20,000/-. At page 48 (pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t their own affidavits are wrong. In such a situation, the statements, tendered by the sellers, are clearly under the shade of dark clouds and cannot be appreciated as the sole basis for making the addition in the hands of another person, here the assessee. 2.6 So far as to the question whether burden has been discharged by the Department for establishing the nexus with the cash found deposited in the account of another person, here the seller, is concerned, we note that neither any agreement to sale has been brought on record nor the witnesses have been examined by the Assessing Officer. While deliberating upon the first question, it is proved beyond doubt that addition has been made merely on the basis of statements of the sellers. Even in the registered sale deeds, it has been duly acknowledged by the sellers that they actually received the money as has been mentioned in the documents and nothing remained to be paid thereafter, therefore, the nexus has not been established that the cash found deposited in the accounts of the sellers actually belong to the assessee, thus, from this angle also, the assessee is having a good case in its favour. 2.7 We are also expected to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and Section 91 of the Indian Evidence Act conjointly says that the proof about terms of such contract can only be adduced by only placing the documents in evidence and no other evidence except the document itself is admissible. 2.8 Now, we shall deal with the issue with the help of judicial pronouncements, for which, ratio laid down by Hon'ble Orissa High Court in the case of Umakanta Das vs. Pradeep Kumar Roy (AIR) 1986 (Ori) 196 and the case of Ramchandra Biharilal vs. Mathur Mohan Nayak (AIR) 1964 (Ori) 239 throw some light. In these cases, it is settled that once the execution of the sale deed is proved, the recitals regarding payment of consideration are prima facie proof of it against the executants or persons claimed under it. Reliance can also be placed in the cases of Subramaniyam vs. Bhavna Narayana Rao (AIR) 1954 (Andh) 17, Nagaiya Gowdo vs. Cheganna Gowdo (AIR) 1957 (A.P.) 264, Raghvendra Rao vs. Venkataswami Naicken (AIR) 1930 (Mad) 251, Bhagwan Singh vs. Bishambarnath (AIR) 1940 (PC) 114. The Hon'ble Madras High Court in the case of CIT vs. P.V. Kalyansundaram (2006) 282 ITR 259 (Mad) clearly held that burden is on the Revenue to prove that price had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahabad High Court in the case of CIT vs. Dayachand Jain Vaidya, 98 ITR 280 held that onus shifts to Revenue if the explanation of the assessee is not acceptable. In the case of CIT vs. N. Swami (2000) 241 ITR 363 (Mad), it was held that the burden of showing that the assessee had undisclosed income is on the Revenue. The burden cannot be said to be discharged by merely referring to the statement given by a third party. Identical ratio was laid down in CIT vs. P.V. Kalyansundaram, 164 Taxman 78 and 294 ITR 49 (SC). The Hon'ble Rajasthan High Court in Smt. Amar Kumar Surana vs. CIT, 89 Taxman 544 laid down the ratio that burden in on the Revenue to prove that real investment exceeded the investment shown in account books of the assessee. The Chandigarh Bench of the Tribunal in the case of ITO vs. Dr. R.L. Narang (ITA No.981 982/Chd/2005, order dated 17.3.2008), identically held that ordinarily, no addition is warranted on the basis of statements of third party unless there is a corroborative material by following the decision in the case of Heeralal Ramdayal vs. CIT (1980) 122 ITR 461 (P H) wherein it was held that registered sale deed is conclusive evidence of sale as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the paper book at page 246 to 249) for the period from 1.4.2005 to 31.3.2007 himself said that he sold agricultural land to the assessee for ₹ 21 lacs. Likewise, Shri Bahadur Singh also through his letter (page 250 of the paper book) confirmed that he sold the agricultural land to the assessee for ₹ 21 lacs along with his bank passbook. Likewise, Shri Vikram Singh confirmed of selling land to the assessee for ₹ 21 lacs (page 257 to 262 of the paper book). Shri Balu Singh, vide letter dated 23.10.2009, identically, confirmed of selling land for ₹ 21 lacs, which was in the joint name with his mother Smt. Leela Bai (page 262 to 267 of the paper book). Shri Motiram through identical letter also confirmed about the sale deed registered with the office of Registrar and copy of the passbook (pages 268 to 272 of the paper book). Smt. Leela Bai (pages 273 to 276 of the paper book) along with bank passbook confirmed that they sold an agricultural land which was in joint name of his son Balu Singh for ₹ 21 lacs to the assessee. The bank passbooks of these persons have duly been annexed in the paper book. In the registered sale deeds, identical amounts have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough cash and cheque are duly recorded in the books of accounts maintained by assessee firm in regular course of its business. This factual matrix, contained in the affidavit of the assessee, has not been controverted by the Revenue, therefore, there is no reason to affirm the addition, so made, by the Assessing Officer. The Assessing Officer is merely trying to catch the straw in whirlwinds with the help of oral statements of the sellers, ignoring the contents of the registered sale deeds, which are duly signed by the assessee as well as the sellers, in the presence of the witnesses and the registering authorities. It is noteworthy, as argued by the learned Counsel for the assessee also, that the sale was made on 27.7.2006 whereas the cash was deposited by the sellers in their accounts three months thereafter. It is quite unlikely that cash is given after the registration of the property. It is further noteworthy that sellers of the land filed return in December, 2009 and signed the affidavit on 31.12.2009. The receipt of cash and cheque are duly mentioned in the sale deed, therefore, it is unbelievable that after the registration of the property is made, the cash is deposited t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
