TMI Blog2019 (5) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... to do so. The valuation of the property as per circle rate have not been disputed by the authorities below. No enquiry have also been made to the witness to the agreement to sell. Thus, on 18th November, 2008 the deal through agreement to sell deemed to have been cancelled as the time was the essence to the agreement. The Inspector is not a technical person to give report of valuation of the property. Therefore, no reliance could be placed upon his report. No infirmity in the order of the Ld. CIT(A) in deleting the addition of ₹ 4,85,74,816/-. It may also be noted here that the Ld. CIT(A) maintained addition of ₹ 50 lakhs on account of cash of ₹ 25 lakhs mentioned in each agreement to sell. Since the explanation of assessee was not called for at the time of search proceedings or thereafter and that the sellers have denied to have executed any agreement to sell or have received any sale consideration as per the agreement to sell, there was no justification for the Ld. CIT(A) to have maintained the addition of ₹ 50 lakhs. It may also be noted here that the assessee explained before Ld. CIT(A) that whatever amount was paid initially to the seller was duly ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect in law and facts. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 4,85,74,816/- out of total addition of ₹ 5,35,74,816/- made by AO on account of unexplained investment in immovable property at Mehrauli. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of ₹ 14,55,000/- made by AO on account of unexplained investment in immovable property at Arya Nagar. 4. The assessee has filed the appeal on the following grounds : 1. That the Learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding an addition of ₹ 50,00,000/- under section 69B of the Act. 1.1. That the Learned Commissioner of Income Tax (Appeals) while upholding the addition has overlooked documentary evidence placed on record by the appellant to show that the investment made by the assessee was duly explained out of the funds available with the appellant and therefore, addition sustained is not in accordance with law. 1.2. That the finding of the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, Mehrauli, New Delhi for transaction with regard to the agriculture land measuring one bigha (1008 sq. yards approx.) bearing part of Khasra No.31/7 (0-18) and 31/14 (0- 2) situated in the Revenue Estate of Village Mehrauli, New Delhi for a total consideration of ₹ 2,97,87,408/-. As per these agreement you have paid following amounts to the seller : (i) ₹ 5,00,000/- in cash on 3.10.2008 (ii) ₹ 20,00,000/-in cash on 6.10.2008 (iii) ₹ 5,00,000/- vide cheque No.200879 dated 15.10.2008 drawn on Syndicate Bank, R. K. Puram, New Delhi. The balance and final payment of ₹ 2,67,87,408 was promised to paid before 45 days from 3.10.2008. 5.1. The assessee was asked to furnish full details of the above transactions along with documentary evidences as under : (I) Date, amount, mode of payment of balance amount. (II) Date of execution of sale deed (III) Source of investment made 5.2. The assessee submitted before the A.O. that agreement to sell value of ₹ 297.87 lacs as per page no.A- 1/31-35 and pages 36-40 have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was more than ten times of the market value, therefore, said agreement was cancelled. It was submitted that even today the circle rate of the aforesaid land is ₹ 53 lakhs per acre and accordingly, sale consideration of ₹ 60 lakhs is more than the circle rate. Valuation Report of the same was also filed to show that consideration as per the sale deed was fully justified which was the fair market value. The assessee also pleaded before A.O. that in case, any adverse material comes to his notice, assessee may be confronted for the same, so as to rebut the allegation of the Department. The assessee also relied upon various decisions in support of the contention that addition is wholly unjustified. The statement of Shri Ashok Kumar Singh, Husband of the Assessee and Seller were recorded at the time of assessment and after search in which they have denied to have executed agreement for a consideration of ₹ 2,.97 crores each for two properties for the land measuring 1008 sq. yards. It was also stated that the land falls in agriculture zone, hence, deal was cancelled because in the agricultural land, no construction could be raised. Ultimately, later on, the said agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Singh was recorded on 16.03.2012 by ADIT, (Inv.), New Delhi. He was shown seized agreements, to which, he has replied that the impugned lands were agricultural lands wherein no construction work can be done. The seller has defrauded us by selling such property concealing the fact that the property is covered by agricultural zone in which there cannot be any construction. It was, therefore, decided to cancel the said agreement which was never acted upon by the party. Thus, the deal was not materialized. Till date, no contrary material has been brought on record against the assessee. The assessee also referred to statements of seller Shri Sandeep Kumar Singh and Shri Arvind Chandela recorded by Investigation Wing in which Shri Sandeep Kumar Singh denied his signature on the agreement to sell as well as denied to have received any consideration over and above what is mentioned in the sale deed. Similarly, Shri Arvind Chandela refused to have executed the agreement to sell or to have received any cash over and above what is recorded in the sale deed. It is, thus, evident that the above sellers have denied receipt of any sum stated in the agreement and thus accepted that transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to dispute the contents of the sale deed. The burden upon assessee have been discharged to prove the apparent consideration paid by the assessee. The report of the Inspector is not admissible in evidence which was also not confronted to the assessee before making any addition against the assessee. The assessee relied upon Judgment of the Honble Supreme Court in the case of Kishan Chand Chellaram vs. CIT 125 ITR 713 (SC) and Judgment of Hon ble Delhi High Court in the case of CIT vs. SMC Share Broker Ltd., 288 ITR 345 (Del.) and Judgment of Hon ble Punjab Haryana High Court in the case of CIT vs. Lal Singh 325 ITR 588 (P H). The Ld. CIT(A) considering the submissions of the assessee and material on record, deleted the addition of ₹ 4,85,74,816/-, however, maintained the addition of ₹ 50 lakhs. The findings of the Ld. CIT(A) in paras 4.3 to 4.7 of the Order are reproduced as under : 4.3. I have carefully considered the assessment order, the submissions made; and examined the documents filed and also weighed the evidence on record. The seized agreements to sell are no doubt evidence indicating the agreed consideration. Tire question here, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 28,97,400/- as on the date of registration of the said properties. The said valuation report remains uncontroverted. The only other evidence mentioned in the assessment order is that local enquiry by the income-tax inspector indicating that the price of land in Mehrauli area was ₹ 3 crore for a plot of 1008 sq. yd. It is not forthcoming from the assessment order as to what enquiry was made and whether the contents of the said enquiry report were made available to the appellant. 4.5. There is no evidence to establish that the amount of ₹ 5,35,74,816/- was paid by the appellant to the sellers, in cash or by cheques. The enquiry made by the circle inspector, if any, is contemporaneous and does not establish that the market value of the land was ₹ 3 crore each in late-2008 / early-2009. The valuation reports and the circle rates prescribed by the registering authority are contrary to the conclusions reached by the AO and support (he claim of die appellant. In the circumstances, the addition of ₹ 5,35,74,816/- cannot be legally sustained and is deleted. 4.6. There is no evidence that any amount other than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perties by the appellant. I direct the AO to bring the aforesaid amount of ₹ 50,00,000/- to tax u/s 69B of the Act. 4.7. In effect, the appellant gets relief of ₹ 4,85,74,816/-. This ground of appeal is decided in these terms. 7. Both the parties in appeal on the above grounds of appeal. 8. The Ld. CIT(A) as regards addition of ₹ 14,55,000/-, reproduced the written submissions of the assessee in the impugned order, in which, the assessee explained the investments made in the purchase of the plots. Copy of the Purchase Deed with bank statement were furnished. The assessee filed details of mode of payment supported by the documents and the bank statements. The assessee submitted that entire consideration have been paid by account payee cheques out of the bank account and bank account has been placed on record, therefore, no addition can be made. The Ld. CIT(A) noted that assessee runs a proprietorship business and maintains regular books of accounts, which had duly audited and income from such other business is regularly disclosed by the assessee in the return of income filed by her and due taxes paid thereon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted of the same property, therefore, it was proved that higher consideration was paid by the assessee, for which, no source is explained. The Ld. D.R, however, stated that during the course of search, no cash receipt was found for payment of higher cash amount. The Ld. D.R. referred to PB-97 which is statement of Shri Sandeep Kumar Singh and PB-99 which is statement of Shri Aravind Chandela, who have denied agreement to sell executed with the assessee. He has referred to PB-93, which is statement of Shri Ashok Kumar Singh, Husband of the Assessee, in which, he has admitted the execution of agreement to sell, but, explained that later on it was cancelled. The Ld. D.R, therefore, submitted that both the sellers have made a wrong statement. The Ld. D.R. submitted that statements recorded on oath cannot be denied and disputed. Thus, recovery of the agreement to sell would clearly attract Section 292C and 132(4A) of the Income Tax Act, 1961. The Ld. D.R. relied upon decision of Hon ble Kerala High Court in the case of CIT, Kozhikode vs. O. Abdul Razak (supra), decision of ITAT Ahmedabad Bench in the case of Pravinbhai Keshavbhai Patel vs. DCIT, Central Circle-1(2), Ahmedabad (2014) 162 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. did not examine the same that when agreement to sell was cancelled, no amount could be treated to have been paid to the sellers. He has, therefore, submitted that even the addition of ₹ 50 lacs is unjustified. 11. We have considered the rival submission and perused the material available on record. The Income Tax Authorities have heavily relied upon the agreements to sell found during the course of search. Copies of the same are filed in paper book at pages 57 and 63. PB-57 is agreement to sell between Shri Aravind Chandela and Assessee. PB-63 is agreement to sell between Shri Sandeep Kumar Singh and Assessee, whereby, the agricultural land measuring 1008 square yards each was proposed to be purchased by the assessee from the seller. It is mentioned in the agreements that sale consideration of the property shall be ₹ 2,97,82,408/- respectively, against which, ₹ 30 lakhs each have been paid by the assessee. It is stated that balance payment of ₹ 2,67,87,408/- each shall be paid by the assessee to the seller on or before 45 days from 3rd October 2008. It is also mentioned in the agreements to sell that time is the most essence of the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sale deed. No evidence was found during the course of search, if any, cash paid by the assessee to the seller. No receipt of any cash payment by assessee was found during the course of search. The assessee established that circle rate of the impugned agricultural land was less than the amount mentioned in the sale deeds. Thus, there was an in exorbitant amount mentioned in the agreement to sell which is beyond any comprehension. The sale deeds were executed later on in June 2009, after the expiry after 45 days of the time limit mentioned in the agreement to sell. This fact itself established that agreement to sell were never acted upon by the parties. No corroborative evidence was found during the course of search so as to prove that assessee paid cash of ₹ 5.35 crores over and above what is stated in the sale deed. The A.O. did not make any independent enquiry into the matter to establish if assessee paid any cash amount. 11.1. The Hon ble Delhi High Court in the case of CIT vs., Ved Prakash Choudhary (2008) 305 ITR 245 (Del.) held as under : During the search conducted at the residential premises of the assessee, two memorandums of und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, there was no error in the order of the Tribunal and required no interference. 11.3. The Hon ble Supreme Court in the case of CIT vs. P.V. Kalyanasundaram (2007) 294 ITR 49 (SC) has confirmed the above Judgment of the Hon ble Madras High Court by dismissing the Departmental Appeal. 11.4. The Hon ble Kerala High Court in the case of CIT vs. Smt. K.C. Agnes (2003) 262 ITR 354 (Kerala) held as under : After considering the evidence and on the basis of the assessment order passed against the assessee, the case of the assessee that the property was purchased at the rate of ₹ 8,000 per cent, had been accepted. Thus, the Tribunal allowed the appeal. The sale deed showed that the price was ₹ 8,000 per cent while the agreement showed that the parties agreed to purchase the property at ₹ 12,951 per cent. A receipt was also relied on in the form of a letter to show that the property was agreed to be purchased at ₹ 12,951 per cent. When a document shows a fixed price, there would be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record. Since it was conditional agreement and as such it was to be proved by the Revenue, whether the terms of the agreement have been complied with, which the A.O. in this case has failed to do so. The valuation of the property as per circle rate have not been disputed by the authorities below. No enquiry have also been made to the witness to the agreement to sell. Thus, on 18th November, 2008 the deal through agreement to sell deemed to have been cancelled as the time was the essence to the agreement. The Inspector is not a technical person to give report of valuation of the property. Therefore, no reliance could be placed upon his report. 13. The Ld. D.R. however, contended that one cheque each as mentioned in the agreement to sell is the same as have been mentioned in the sale deed. Perhaps, when the parties are same, the consideration paid above could have been referred to in the sale deed when fresh sale deed have been executed. Therefore, there is nothing wrong in the explanation of the assessee. The decisions relied upon by the Ld. D.R. thus would not support the case of the Revenue. Considering the totality of the facts and circumstances, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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