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TMI Blog2019 (10) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... - 17, G K, Part - II, New Delhi, over and above the apparent and declared sales consideration of Rs. 1,40,00,000/- which is as per registered sale deed. B. That without prejudice, the adverse inference taken in the absence of providing complete material collected on the back of the assessee, and without allowing opportunity of cross - examining such persons whose statements have been recorded on the back and have been used in Asstt., is not permissible and no such material can be used against the assessee. C. That without prejudice, under the facts and circumstances, under no circumstance, the alleged receipts can be considered to be in A.Y. 2010- 11. 2. That without prejudice, the complete proceedings are illegal and un - sustainable for not initiating and not issuing the notices for these proceedings to all the legal heirs and thus for not allowing the participation of all legal heirs." 3. The brief facts of the case is that the assessee is an individual who filed his return of income on 29.11.2010 declaring income of Rs. 33,41,166/-. The assessee has shown a consideration of Rs. 1,40,00,000/- on sale of his residential property at Greater Kailash, Part-II, New Delhi on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said deal. Statement of Sh. Naveen Nangia is annexed at page 13 to 16 as Annexure-H. Photocopies of above statements of Sh. Honey Gupta, Son of Smt. Santosh Rani Gupta and Sh. Naveen Nangia, the property dealer who had arranged the deal, were also supplied to the assessee. 5. Vide order sheet entry dated 29.10.2012, assessee was asked to explain as to why the unaccounted sale proceeds of immovable property amounting to Rs. 1,70,00,000/- paid in cash over and above 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 undisclosed 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 Worthyself have issued show cause notice for addition of Rs. 170 lacs relying on the statement of Sh. Honey Gupta and Sh. Naveen Nangia recorded by Hon'ble ADI, Unit -III, New Delhi. The statement of Sh. Honey Gupta and Sh. Naveen nagia canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not. clear why the statement of 'Sh Honey Gupta, was recorded on behalf of her mother when the mother is alive and having good health and more so independent income tax assessee having PAN N&. AAEPG7465K. The statement of Sh. Honey Gupta canpot be relied upon in this case, as he is not purchaser *of the property in question. Even in his statement recorded before learned. ADI (Unit III). New Delhi., Sh. Honey Gupta stated thatjhe payment of Rs. 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. 30.11.2009 i.e. during financial year 2009-10, how a payment of the sale f property 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 ofSh. Honey Gupta recorded by your worthy self 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 way under-Pressure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deal, whose statement was also recorded on oath on 24.01.2011 has also clearly stated that amount of Rs. 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 Rs. 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-III 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively and surrendered the unaccounted payment made by his mother and himself for taxation 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 Rs. 1.70 crores over and above that sale consideration amount mentioned in - the sale deed i.e. Rs. 1.40 crores against sale of first floor residential property BB-17, G.K. Enclave, New Delhi. In the computation, assessee has taken Rs. 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 Rs. 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 of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Sh. Harbhajan Singh and actually he had even assisted in counting and handing over the cash component to the respective parties as a part of his profession and service. He has further stated that the entire deal was arranged by him and Sh. Avdhesh Mittal had nothing to do with the said deal. Statement of Sh. Naveen Nangia is annexed at page 13. to 16 as Annexure- II.JPhotocopies of above statements of Sh. Honey Gupta, Son of Smt. Santosh Rani Gupta and Sh. Naveen Nangia, the property dealer who had arranged the deal, were also supplied to the assessee. 5. Vide order sheet entry dated 29.10.2012, assessee was asked to explain as to why the unaccounted sale proceeds of immovable property amounting to Rs. 1,70,00,000/- paid in cash over and above 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted as under:- "The show cause have been issued on the basis of statement of Sh. Honey Gupta recorded by learned ADI, New Delhi. The statement of Sh. Honey Gupta was given on behalf of her mother Smt. Santosh Rani Gupta who was the purchaser of property from the assessee. It is not clear why the statement of Sh. Honey Gupta was recorded on behalf of her mother when the mother is alive and having good health and more so independent income tax assessee having PAN No. AAEPG7465K. The statement of Sh. Honey Gupia cannot be relied upon in this case as he is not purchaser of the property in question. Even in his statement recorded before learned ADI (Unit III), New Delhi, Sh. Hortey Gupta stated that the payment of Rs. 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 statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of his mother Smt. Santosh Rani. ii) He has voluntary surrendered the difference on account of payment made in cash to the seller of the property to the tune of Rs. 1.70 crores paid by his mother. iii) Sh. Naveen Nangia, property dealer who had arranged the deal, whose statement was also recorded on path on 24.01.2011 has also clearly stated that amount of Rs. 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 Rs. 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 beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted cash payment of Rs. 1.70 crores by his mother and Rs. 1.40 crores by himself to the sellers of the first floor and second floor of the aforesaid property respectively and surrendered the unaccounted payment made by his mother and himself for taxation 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 Rs. 1.70 crores over and above that sale consideration amount mentioned in the sale deed i.e. Rs. 1.40 crores against sale of first floor residential property BB-17, G.K. Enclave, New Delhi. In the computation, assessee has taken Rs. 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 Rs. 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 statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 transaction. Merely stating that, he sold it to Avdesh Mittal but at the last moment it was registered in the name of Santosh Rani Gupta is no explanation at all. The fact that Shri Honey Gupta, Santosh Rani Gupta's son brought the 2nd floor of the building shows that they were interested in the said property i.e. the building; It is possible that Shri Avdesh Mittal who purchased the basement, ground floor and. the terrace right of the 2nd floor of the said building had been engaged in the initial stages of trying to buy the first and second floor; which deal, as is apparent fell through. In the circumstances, the AO's order was justified." 6. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 has been made in financial year 2010-11 whereas the broker is saying that cash payment has been made on the date of registration of the document i.e. on 30/11/2009. He stated that as per Mr. Gupta who is the giver of the money says that he paid money in financial year 2010-11 whereas the broker says that it is paid in financial year 2009-10. Thus the statements of both the persons are contradictory to each other and therefore are not reliable. He further submitted that Mr. Honey Gupta has retracted his statement and therefore same cannot be used. He further stated that in case of the buyer there is no addition on account of alleged cash payment for purchase of the property but the addition has been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 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 Tax (AO) wherein he denied that he has not made any cash payment. He further stated that he has only made cheque payment for purchase of this property and source of which has already been explained. He further submitted that the original statement given by him is because of his illness and therefore there cannot be relied upon. Therefore, it is apparent that the buyer has not given any statement to the investigation wing or to the Assessing Officer. It is the statement of the son of the buyer which was used against the assessee for making the addition. The son of the buyer has retracted the same statement when called upon by the learned assessing officer. Further, the statement of the broker was also recorded who has not received any brokerage on the transaction from eit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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