TMI Blog2019 (10) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the assessee, the addition cannot be made in the hands of the assessee, as denial of opportunity to the assessee to cross-examine the witness whose statements were made the sole basis of the assessment is a serious flaw rendering the order as nullity in as much as it amounted to violation of the principles of the natural justice as held in ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] - In view of this we do not have any other alternative but to direct the learned assessing officer to delete the addition made in the hands of the assessee over and above the declared sales consideration towards the sale of the property for the computation of the capital gain - Decided in favour of assessee. - ITA No.2451/Del/2015 - - - Dated:- 16-10-2019 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Raj Kumar, CA, Shri Sumeet Goel, CA For the Revenue : Shri Surnder Pal, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Group, summons u/s 131(A) were issued to Shri Honey Gupta and Smt. Santosh Rani Gupta. Shri Lloney Gupta, while deposing his statement with regard to purchase of lsl Floor of House property at BB-17, G.K. Part If, Delhi, has admitted that his mother has made part payment in cash of ₹ 1.70 Giores, over and above the amount as shown in the sale deed during the F.Y. 2009-10. Copy of statement of Shri Honey Gupta recorded on oath on 12.11.2010 by ADI (Investigation)-Unit-III(3), New Delhi, is annexed at page 11 to 12 as Annexure-L In the statement Shri Honey Gupta has deposed that first floor of the property BB-17, G.K. EncIave- II, New Delhi was purchased by his mother Smt. Santosh Rani Gupta for ₹ 3.10 crores. The registry value of first floor of this property was ₹ 1.4 crores. He has further admitted to have made part payment Jbr this property in cash and voluntarily surrendered the difference of ₹ 1.70 crore on account of payment made in cash to the seller of property i.e., Sh. Harbhajan Singh Makkar paid by his mother. Statement of Sh. Naveen Nangia, Property Dealer who had arranged the deal, residence of Flat No. 14B, Pocket, A-11, Sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an agreed sum of ₹ 140 lacs from Sh. Harbhajan Singh Makkar. Sh. Avdhesh'Mittal made the toted payment of ₹ 140 lacs for the sale of property to Sh. Elarbhajcin Singh Makkar. Sh. Avdhesh Mittal purchased his property in the month of Sep. 2009 and issued two cheques from his personal SB A/c with HDFC Bank, New Delhi for ₹ 10 lacs bearing cheque no. 344021 and 20 lac bearing cheque no. 344022 dt. 23.09.2009. and 30.09.2009 respectively. (Photocopies of cheques are enclosed). These cheques were credited in the PNB, New Delhi Account of Sh. Harbhajan Singh Makkar on 25.09.2009 and 03.10.2009. The copy of PNB, New Delhi Account of Sh. Harbhajan Singh Makkar have already been submitted with your Worthyself with reply dt. 29.10.2012. Sh. Avdesh Mittal further handed over two pay orders for ₹ 50 lac each bearing nos. 085716 and 085717 respectively and one pay order of ₹ 10 lac bearing no. 085718 of HDFC'Bank Ltd., New Delhi on dt. 27.11.2009. These pay orders were encashed in PNB, New Delhi Account of Sh. Harbhajan Singh Makkar on dt. 01.12.2009. Sh. Avdesh Mittal got the property registered ip the name of Smt. Santosh Rani Gupta o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which he was under treatment from a doctor, the prescription of which was also submitted by him to your Worthyself. The assessee was not given an opportunity to cross examine the witness that is Sh. Honey Gupta neither by learned ADI nor by your worthyself. The assessee had put in a written request on 27.12.2012 in this regard before the statement of Sh. Honey Gupta was recorded by your worthyself. The only reliable evidence of sale of 1st floor of property No. BB- 17, G.K. Enclave, New Delhi is the Sale Deed registered before the sub Registrar V, New Delhi. It is requested that Sub Registrar may be summoned as witness for which the assessee is ready to deposit the requisite charges. In the light of above facts the Show Cause issued for addition of ₹ 170 Lacs in this case is bad in law as well as on the 'given facts of the case. It is requested that Show Cause notice may be filed and assessment may be framed accordingly. 9. Reply of the assessee has been considered. Assessee has mainly raised following three contentions i) Sh. Honey Gupta has given statement on- behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... influence of medicine. On being pointedly and repeatedly asked by this office to explain as to what kind of pressure was there upon him, as claimed by him, under which he admitted the true facts before the ADIT, he could not give any satisfactory reply. It can be clearly seen from his statement that he is just trying to deny the true facts of the case as already confessed by him before the ADIT but he has completely failed in his attempt to do so as he could not give any satisfactory explanation/reply in response to pointed questions put to him by this office. He also admitted in his statement given before this office that he had given his statement before the ADIT to avoid further action by the Department which clearly proves that he had surrendered the unaccounted/undisclosed cash payment made by his mother and himself, voluntarily, in order to avoid penal and prosecution action by the department. vi) The sale deed of aforesaid property has been registered in the office of the Sub- Registrar V, New Delhi on 30.11.2009 and, therefore, the entire sale consideration,,, including the undisclosed/unaccounted cash component of ₹ 1.70 crores, must have been paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieve that assessee has concealed his income and furnished inaccurate particulars of his income in respect of long term capital gain of ₹ 1.70 crores, therefore, penalty proceedings u/s 271(1 )(c) are being initiated separately. 5. Thus, the assessment order u/s 143(3) was passed where in the addition of ₹ 1.70 crore was made towards the sale consideration of the property over and above the declared sales consideration. The assessee preferred an appeal before the ld CIT(A) who dealt with the whole issue vide para No. 4 onwards as under:- 4. I have perused the facts 'of the case as well as the submissions made by the assessee. The addition in the assessment order is based on the findings of the AO as mentioned hereunder:- As per the information received from the office of Asstt. Director of Income Tax (Investigation)-Unit 111(3), New Delhi, during the course of post search proceeding in the case of Triveni Group, summons u/s 131(A) were issued to Shri Honey Gupta and Smt. Santosh Rani Gupta. Shri Honey Gupta, while deposing his statement with regard to purchase of 1st Floor of Housp property at BB-17, G.K. Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registered sale consideration to him by Smt. Santosh Gupta, should not be added to the income of the assessee by treating the same as undisposed income of the assessee, as per information received from the ADI(Inv.) Unit-III(3), New Delhi, where the excess undisclosed amount paid by the purchaser has been surrendered, for taxation. 6. In response to this show cause, assessee furnished written reply on 26.11.2012 relevant portion of which is reproduced below:- Your Worthy self have issued show cause notice for addition of ₹ 170 lacs relying on the statement of Sh. Honey Gupta and Sh. Naveen Nangia recorded by Hon ble ADI Unit-Ill, New Delhi. The statement of Sh. Honey Gupta and Sh. Naveen Nangia canno t be relied upon in the case, as they have concealed a major fact, that property BB-17 G.K. Enclave II, New Delhi 1st floor was purchased by Sh. Avdhesh Mittal S/o Sh. B.L. Mittal RJo 91 Greater Kailash, New Delhi for an agreed sum of ₹ 140 lacs from Sh. Harbhajan Singh Makkar. Sh. Avdhesh Mittal made the total payment of ₹ 140 lacs for the sale of property to Sh. Harbhaj an Singh Makkar. Sh. Avdhesh Mitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n question. Even in his statement recorded before learned ADI (Unit III), New Delhi, Sh. Hortey Gupta stated that the payment of ₹ 170 Lacs are being paid during the current financial year i.e. 2010-2011. It is pointed out here that sale deed was entered on dt. 30.lj.2009 i.e. during financial year 2009-10, how a payment of the sale fproperty can be made one year after the sale agreement registered before the registrar of property New Delhi. The statement' of Sh. Honey Gupta cannot be relied upon for this reason also for making addition during financial year 2009-2010. In the statement of Sh. Honey Gupta recorded by your worthyself on dated 27.12.2012, he has denied any cash payment having been made by his mother or himself to Sh. Harbhajan Singh Makkar. He has further stated that statement given before the ADI (Unit-Ill), New Delhi was under Pressure and at that time he was a patient of sleep disorder also for which he was under treatment from a doctor, the prescription of which} was also submitted by him to your Worthyself. The assessee was not given an opportunity to cross examine the witness t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that amount of ₹ 1.70 crores for the 1st floor over and above the sale consideration was made in cash to the seller in,the morning of date of execution of sale deed. He has further stated that the 1st floor was sold by Sh. Harbhajan Singh and cash of ₹ 1.70 crores was taken by him over and above the sale price shown in the sale deed. iv) Sh. Naveen Nangia has also denied in the statement that buyers were brought to them by Sh. Avdhesh Mittal and further stated that entire deal was arranged by him and Sh. Avdhesh Mittal has nothing to do with the said deal. v) In the statement given on 27.12.2012 on oath in this office (Annexure-Ill to this order at page 17 to 21) Sh. Honey Gupta has not been able to corroborate and prove as correct his version that statement given on 12.11.2010 before ADI (Inv.) Unit-III(3), New Delhi, on behalf of his mother Smt. Santosh Rani Gupta was given under pressure and under the influence of medicine. On being pointedly and repeatedly asked by this office to explain as to what kind of pressure was there upon him, as claimed by him, under which he admitted the true facts before the ADIT, he could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and further requested that no penal/prosecution proceedings may be initiated, against them as the undisclosed amount was being surrendered voluntarily by them. 11. From the above discussion, it is clear that the assessee has received cash payment of ₹ 1.70 crores over and above that sale consideration amount mentioned in the sale deed i.e. ₹ 1.40 crores against sale of first floor residential property BB-17, G.K. Enclave, New Delhi. In the computation, assessee has taken ₹ 1.40 crores as sale price for computation of capital gains arising on sale of this property. Thus, assessee has shown less long term capital gain to the tune of ₹ 1.70 crores which ;is now added to the returned income of the assessee shown under the head Income from Capital Gains . I have reason to believe that assessee has concealed his income and furnished inaccurate particulars of his income in respect of long term capital gain. From the statement of Shri Naveen Nangia before the ADIT unit III (3) Delhi recorded on 24.01.2011, a property at BB17, GK Part-II, New Delhi had the following levels which were sold to various parties in the FY 2009-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. What is also crucial to the argument of the AO is the fact that Shri Naveen Nangia, the property dealer - whose statement; was recorded on 24.01.2011 was also a witness to the agreement of sale (agreement dated 27.11.2009). His statement that the cash component was paid on the date of agreement cannot be disregarded. The fact that Shri Avdesh Mittal paid the cheque component to the appellant does not have any significance except for the fact that he, the former, had an interest in the said property and purchased the basement and ground floor that year. It is possible that he could have been Interested in the floor owned -by the appellant and later backed out of thesaid transaction. It is also a known fact that a cash transaction will never appear in the form of any evidence. The assessment order in the case of Shri Honey Gupta and his mother, Smt. Santosh Rani Gupta are inherently flawed because there is a discussion on the disclosure but none on the retraction or on how their AO have treated the said disclosure. This is a case where the assessee has not been able to discharge his onus of proving that no cash was paid for the said tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered on 27 30/11/2009 and possession was also given on 27/11/2009. It was stated that when the sale deed took place in assessment year 2010-11 and possession also given in assessment year 2010-11 there is no question of making any payment of ₹ 1.70 crores and that too in assessment year 2011-12 as per the statement of Mr. Honey Gupta. Therefore, he submitted that the statement of Mr. Honey Gupta cannot be relied upon. He further submitted that the statement of the broker was recorded by the Additional Director of Income Tax. As he was not the broker of the assessee therefore no brokerage was paid by the assessee. He submitted that even from any of the parties no brokerage was taken by him for this deal. His statement was also recorded on the back of the assessee and no cross-examination was allowed even when specifically asked by the assessee. Therefore, he submitted that in absence of cross-examination the statement cannot be used adversely. He submitted that the statement of Mr. Honey Gupta before the Additional Director Of Income Tax as well as the statement of the broker is contradictory to the each other. He stated that Mr. Gupta submitted that the cash payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement on oath on 12/11/2010 before the Assistant Director Of Income Tax (Investigation), New Delhi wherein in response to question No. 3 and Question Number 9 , he submitted that part payment for the purchase of property was made in cash and therefore he voluntarily surrendered the difference on account of payment made in cash to the seller (assessee) of property to the tune of ₹ 1.70 crores as paid by mother of the Mr. Honey Gupta for 1st floor during financial year 2010-11 and ₹ 1.40 crores paid by him for 2nd floor during financial year 2000-11. The statement of the broker Mr. Naveen was also recorded in case of Mr. Mittal on 24/1/2011 by the Additional Director Of Income Tax (Investigation) New Delhi wherein in response to Question No 4 he stated that sale of the property at the 1st floor belonging to the assessee was sold to Mr. Santhosh Rani Gupta for ₹ 31,000,000/-. In response to Question No. 6 he submitted that the above payment was made in cash to the sellers (assessee) in the morning of the date of execution of sale deed. Further the statement of Mr. Honey Gupta was also recorded on 27/12/2012 by the Assistant Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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