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TMI Blog2024 (3) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... per seized documents (copy of agreement) seized from the residence of Sh. Yashpal Mendiratta, the assessee has purchased the same property at and around the same period and thus, the CIT(A) was incorrect in considering the consideration of not sale Rs. 40,06,00,000/- as stated in the said incriminating document" 3. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the document based on which the addition was made was with respect to the house property purchased by the Appellant and was also found during the course of search in the case of Sh. Yashpal Mendiratta. The CIT(A) ought to have considered the circumstantial evidence." 4. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the assessee has not been able to adduce any evidence before the AO or even before the CIT(A) which could prove or justify the fall in the fair market value of the property by 40% within a short time span of 3-4 months. That on the facts and in the circumstances of the case, the CIT(A) failed to appreciate the fact that the house property with respect to which the incriminating document was seized was renovated/reconstructed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice proposing the addition under section 69 of the Act was issued by AO before passing the impugned assessment order. Hence, the addition made is illegal, bad in law and without jurisdiction. 6. That on the facts and circumstances of the case and in law, provisions of Section 69 are not applicable as the basic conditions/ingredients of the said section are not fulfilled. 7. That the alleged approval u/s 153D of the Act is illegal, bad in law and without any application of mind and the Assessment order passed without obtaining valid approval is liable to be quashed. 8. That the assessment order passed without valid approval U/s 153D of the Act is illegal, bad in law and without jurisdiction and the CIT(A) has erred in law and on facts in upholding the same. 9. That without prejudice, the AO has wrongly and illegally applied the provisions of Section 115BBE and charged higher rate of tax. The amendment made in Section 115BBE in December 2016 is also not applicable to this case. 10. That the evidence filed and materials available on record have not been properly construed and judiciously interpreted by Assessing Officer, hence the addition/disallowance made are uncal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only, for the same property at West Punjabi Bagh, New Delhi. The Assessing Officer held that agreement to sell mentions dealing in cash as well as cheque and the receipt of payments in cash are duly authenticated through signature on revenue stamp. Since the cheque payment and the cash payment have been made through the same document, therefore, the transaction amount of Rs. 40.06 crores as mentioned in the agreement to sell cannot be denied. The Assessing Officer held that when the cheque number along with the cheque amount mentioned in the Agreement to Sell is being corroborated with the bank statement of Shri Brij Kumar then the cash portion mentioned in the Agreement to Sell also get authenticated thereby giving credence to the fact that the purchase price as per the Agreement to Sell is Rs. 40.06 crores only and that the actual consideration which has got exchanged for purchase of the property was infact Rs. 40.06 crores as against Rs. 16 crores for which Sale Deed has been executed. 9. The Assessing Officer further held that one of the buyers Shri R. K. Chawla is the same person whose name was appearing in the Agreement to Sell as one of the purchasers and in the Sale Deed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ATS, it was argued as under: 1. A copy of the Agreement to Sale was found and seized from the residential premises of the assessee. The ATS which was executed in July 2015, was seized after a gap of 3 years from the residential premises of the assessee. The contention of the assessee that it is not a party to the ATS and that it is not aware how it came to his premises is absurd considering the fact that it was seized from the assessee's premises after a gap of 3 years and after major renovation of the property for residential use by the assessee since its acquisition. Undoubtedly, the ATS has been kept/retained by the assessee at his premises even after 3 years. 2. Shri R. K. Chawla, who was one of the original buyers and signatory of the ATS was a Witness in the registered agreement for purchase of property by the assessee. As is evident from the dates of execution of ATS and the registered deed, there is a gap of only 6 months between the two. Shri R. K. Chawla, who was a buyer in the ATS, was a witness in the registered deed. The statement of Shri R. K. Chawla was recorded u/s 131 of the IT Act and the same is forming part of the ld. CIT(A) order. Sh Chawla has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is humbly submitted that while purchasing a property, the usual market practice is to pay the consideration in cash and in cheque. The ratio may vary, but is usually around 60% cash and 40% cheque. In the present case, the transaction amount in ATS was Rs. 40 crore, whereas it was registered for Rs. 16 crore by the assessee. As can be seen, the cheque amount of Rs. 16 crore is approximately 40% of the entire transaction amount of Rs. 40 crore. The AO has rightly added this difference amount of Rs. 24 crore equally between the assessee and his wife. The ld. CIT(A) has deleted the addition by disregarding this connection and holding Shri R. K. Chawla to be a weak link. However, he has not factored the banking transactions of the assessee with Shri Brij Kumar. In view of the facts as mentioned above, it is humbly submitted that the mesesses are connected with the ATS, wherein the original buyer, Shri R. K. Chawla, a relative of sellers was a witness in the registered deed and Shri Brij Kumar, the original buyer and a person who had made cheque cash payments in ATS received the cheque amount from assessee before registered deed. The Hon'ble Supreme Court in the cases of Sumat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t (i.e. Sh. Brij Kumar and Sh. R.K. Chawla) had refused to identify the purported agreement. 9. That the purported buyers in the ATS (i.e. Sh. Brij Kumar and Sh. R.K.Chawla) had expressly denied that they had never ever entered into any such purported agreement. They had denied having ever put their signature on the purported agreement. 10. That the one of party whose names is appearing as purported buyer in the ATS (i.e. Sh. Brij Kumar) had denied that the money paid by him to the purported seller was on account of sale consideration towards property. 11. That there is no evidence that the persons whose names have been stated as witnesses in the ATS were ever examined by the Investigation wing or by the AO and they have confirmed that signatures of this ATS by A,B,C,D were put in their presence. 12. That with respect to the cash amounts stated in the ATS, there is no observation or allegation that the said cash amount reflected on the seized receipts had emanated out of the coffers of the Appellant or the spouse of the Appellant. 13. That there is no allegation of the AO that the purported incriminating document was executed in the presence of the Appellant or spouse of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar and Sh. Praveen Kumar regarding the purchase of property situated at 10/42, Punjabi Bagh West, New Delhi. e) That, both Sh. Brij Kumar as well as Sh. R.K. Chawla had specifically stated that they had never ever signed the purported incriminating document (i.e. Pages 10 to 19 of Annexure A1 Party BW). f) That, Sh. Brij Kumar in response to question no. 34 of his statement and Sh. R.K. Chawla in response to question no. 14 of his statement, had specifically stated that he has nothing to do with the ATS. g) That, Sh. Brij Kumar in response to question no. 35 of his statement and Sh. R.K. Chawla in response to question no. 15 of his statement, had specifically stated that the signatures appearing on the ATS were not their signatures. h) That, Sh. Brij Kumar in response to question no. 21 of his statement, had confirmed to have advanced loans each of Rs. 75,00,000/- Sh. Sunil Kumar as well as to Sh. Praveen Kumar some two years back (i.e. .2 years from the date on which his statement was recorded). In response to question no. 22 of his statement, he had further stated that the loans of Rs. 75,00,000/- each advanced by him Sh. Sunil Kumar as well as to Sh. Praveen Kumar wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Sh. Brij Kumar had been repaid back on 10.12.2015 from their respective bank accounts, much before the execution of the sale deed of the appellant/his wife with these sellers. (iii) Sh. R. K. Chawla had claimed that it had not made any payment reflected in ATS. In the absence of any cheque payment, proportion to his proposed 25% share made by him in ATS, absence of his name as purchaser on stamp paper of ATS and the fact that the receipts issued by the proposed sellers do not bear his signatures, the cash portion paid by him cannot be established and only can be presumed provided the signature on ATS are proved to be of him. In these facts and discussion, it is observed that in the absence of original ATS, the forensic expert opinion for verifying their signatures on ATS to rebut their statements cannot be undertaken. The witnesses have not been examined by the AO or the investigation wing, to ascertain that it was witnessed by them, for placing signature of all the entities on the ATS. In the absence of it, their statements that they have not put signature on any ATS cannot be rebutted. However, other evidences can be evaluated to rebut this fact stated by both the propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision wherein it is held that photocopies of documents do constitute "material", the plea of the appellant is rejected. However, the material is rebuttable and for use against the assessee it had to be corroborated with other evidences/statements. 11.2 It is observed the buyers C & D ( through statements) who are the parties to alleged agreement to sell, have denied the execution of agreement to sell. Sellers A & B have not been confronted on this ATS. The buyers C & D have denied to put the signatures on this agreement and the forensic of a photocopy of a document is not possible. Therefore only corroborative evidences can establish the existence of the ATS and its buyers. In view of it, once parties to alleged agreement to sell themselves have denied, any reliance placed on that agreement to sell otherwise is misplaced. The Hon'ble Delhi High Court in the case of CIT v. S.M. Agrawal reported in 293 ITR 43 has held as under: "12. It is well-settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maging action." However, in the case of CIT vs Rajinder Nath [(1972) 85 ITR 296 Delhi], on the very issue of reference to a wrong section, the Hon'ble Delhi High Court had held as under: "It is a well settled principle of law that the exercise of a power would be referable to a jurisdiction which confers validity upon it and merely because the Income-tax Officer while proceeding to assess the assessed, has quoted a wrong section, the assessment cannot be rendered invalid". Thus, from the conspectus of the above facts and legal position, it is observed that the Appellant was issued a specific and detailed show cause notice wherein except for mentioning a wrong Section (i.e. Section 69C), the AO had specifically referred to the expression "undisclosed investment". Also, the Appellant had furnished the submissions controverting the observations of the AO and contending that no "undisclosed investment" was made by the Appellant in the residential house property purchased by the Appellant during the above assessment year jointly with his spouse. Here it is pertinent to refer to the observations of Hon'ble Justice P.N. Bhagwati while rendering the judgment in the case of Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuted or attested. (2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132." 13.2 Section 69 read as under:- "Unexplained investments 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year." 13.2.1 The salient features of Section 69 are as under: (a) Where in the financial year.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by her husband wherein the higher sales consideration than the amounts in the sale deed was mentioned. In the case of the appellant, there is no evidence found relating to appellant to suggest that the purchase consideration of the property was higher. The seized ATS does not relate to the transaction of the appellant. (ii) In the case of Dy. Cit- 2(1), Raipur (Cg) vs. Shri Chhaganlal Mundra, Raipur (supra) a diary was seized from the residence of the assessee and it was in the handwriting of the assessee. The diary contained various figures against various expenses. The AO on the basis of presumption under section 132(4A) added Rs. 8,06,14,288/- to the total income of the assessee as unaccounted expenditure u/s. 69C of the Act. The CIT(A) deleted the addition by holding that the presumption section 132(4A) cannot be drawn with regard to the incurrence of the expenses by holding as under:- "11. It is clear that Section 69C is applicable (i) where the assessee has incurred any expenditure, and (ii) he offers no explanation or the explanation tendered as to the source is not satisfactory as regards the whole or part thereof. The whole or part of such unexplained expenditure wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of Rs. 297.87 lacs as mentioned in the agreement to sell. With regard to addition of Rs. 50 lacs confirmed by CIT(A), the ITAT set aside the issue to the file of the AO to verify the contention of the assessee that the agreement to sell was never acted upon and there was to exchange of money of Rs. 50 lacs between the assessee and the seller for which the addition was confirmed by the CIT(A). It is observed that the facts of the case of the appellant are much stronger that the facts in the above case. In the aforesaid case, the ATS and registered sale deed was between the same parties i.e. the assessee and the sellers whereas, in the present case of the appellant, there is no ATS between the appellant and the seller. In the aforesaid case, there was mention of cash payment by the assessee to the seller in the ATS, whereas in the present case of the appellant, there is no mention of any cash payment by the appellant. In the aforesaid case there was mention of cheque payments by the assessee to the seller which was found to be correct from the bank account of the appellant and inspite of that it was held that the addition on the basis of amount of property mentioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he seller and in spite of this, it was held that once the buyers and sellers have denied about receipt of any such cash amount, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. In the present case of the appellant, there is neither any admission by the appellant nor the seller about exchange of any money for which the AO has made the addition. In fact, there is not even any seized document showing any cash payment, leave alone any other corroborative evidence to show that there was in fact transfer of money for which the AO has made the addition. (v) The Hon'ble Madras High Court in the case of CIT vs. P.V. Kalyanasundaram (2006) 282 ITR 259 (Madras) has held as under: "The burden of proving actual consideration in such transaction is that of the revenue. The Tribunal had given factual finding and, inter alia, held that the Apex Court in K.P. Varghese v. ITO [1991] 131 ITR 597 / 7 Taxman 13 held that the burden of proving actual consideration in such transaction is that of the revenue. The Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. He merely relied upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was acted upon and unless the amount stated in the agreement was paid for the sale, none can come to the conclusion that the price mentioned in the sale deed is not correct. In the instant case, in the assessment of the purchaser, it was finally found that the amount was received only at Rs. 8,000 per cent. Taking all these matters into consideration, the Tribunal held that the property was sold at the rate of Rs. 8,000 per cent. Thus, the Tribunal, on the basis of the facts and circumstances of the case and on the appreciation of evidence, came to the conclusion that Rs. 12,951 was not the amount for which the property was sold. There is no rule that the amount shown in the receipt is the-actual amount paid. Accordingly, the amount stated in the sale deed was the correct amount unless there were circumstances to ignore the same. In the above view of the matter, the questions were answered in favour of the assessee and against the revenue." In the above case, it has been held that it may not be necessary that the consideration as mentioned in the ATS and final sale deed will be same. Where sale deed have been registered, the value stated therein cannot be disputed merely be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of the Accounts, if so maintained; and (c) The Assessee offers no explanation as to the nature and source of investment made or the explanation offered by the Assessee is, in the opinion of the AO, not satisfactory. 16. Thus, first and foremost, AO must come to a conclusion that an Assessee had, in fact, made an investment. Once an AO finds that an investment has been made, he has to examine the Assessee's explanation as to the source of that investment. It is only in cases where the Assessee is unable to explain the source of the investment made that provisions of Section 69 of the Act can be applied to tax the value of the investment made. .................................. 19. In the circumstance, we are inclined to agree with the Tribunal that the question whether an investment had been made or not is a matter of fact and the same cannot be presumed." The ratio of the aforesaid decision is squarely applicable to the facts of the present case of the appellant. The AO has not been able to establish through any evidence that the appellant had, in fact, made the investment for which the addition had been made the addition in the assessment order. Once this primary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision is squarely applicable to the facts of the present case of the appellant. The AO has not been able to establish that the appellant had, in fact, made the investment for which he has made the addition in the assessment order. Once this primary and basic condition of section 69 has not been fulfilled, as held by the Hon'ble High court in the above case, provisions of Section 69 of the Act cannot be applied. (x) In the case of CIT v. Lubtec India Ltd (2009) 311 ITR 175 (Del.) it had been held that it is quite clear that what is postulated in section 69C of the Income-tax Act, 1961, is that first of all the assessee must have incurred that expenditure---" The above decision, though, rendered in the context of provisions of section 69C will squarely apply to the case of the appellant as provisions of section 69 and 69C are similar and the only difference is that section 69 deals with investment whereas section 69C deals with expenditure. In section 69, the prerequisite is of making of investment whereas in section 69C the prerequisite is of incurrence of expenditure. (xi) In the case of Pr. Commissioner of Income Tax-Ill, Ahmadabad Versus Vivek Prahladbhai Patel 2015 (12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sense, this is irrebuttable presumption. The words in sub-section (4) are "may be presumed". The presumption under sub-section (4A) therefore, is a rebuttable presumption. The finding recorded by the High Court in the impugned judgment that the presumption under sub-section (4A) is a irrebuttable presumption in so far as it relates to the passing of an order under sub-section (5) of Section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in Section 132 or any other provisions of the Act which could warrant such an inference or finding. Presumption under sub-section (4A) would not be available for the purpose of framing a regular assessment. There is nothing either in Section 132 or any other provision of the Act to indicate that the presumption provided under Section 132 which is a self contained code for search and seizure and retention of books etc. can be raised for the purposes of framing of the regular assessment as well. Wherever the legislature intended the presumption to continue, it has provided so. Reference may made to Section 278D of the Act which provides that where during the course of any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 dated 17/02/2017], the Hon'ble ITAT Delhi had held as under: "12. From the observations made in the aforesaid referred to orders, it is clear that the presumption of facts u/s 292C of the Act is not a mandatory or compulsory presumption but a discretionary presumption. Since, the word used in the said Section is "may be" and not "shall". Secondly, such a presumption is rebuttable presumption and not a conclusive presumption because it is a presumption of fact not a presumption of law." Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference. The presumption against the appellant stood rebutted. (xvi) In the case of Ram Krishan Gupta vs. DCIT CC-4, New Delhi [No.- IT(SS)A.No.63/Del/2008 dated.- July 31, 2013]; 2013 (8) TMI 329 the Hon'ble ITAT Delhi has held as under: "Difference between amount shown in agreement to sale and sale deed - Block assessment - 158BC - Addition u/s 69 - Addition made on account of purchase of property - CIT upheld addition - Held that:- When the document shows a fixed price, there will be a presumption that it is the correct price agreed upon by the parties. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or any other evidence of any consideration made by the appellant over and above the amount recorded in the registered sale deed. (xviii) In the case of ACIT vs. Rakesh Narang, 64 taxmann.com 332 (Del), the Court had held as under:- "4. We have heard the rival submissions and perused the relevant material on record. It is noticed that the extant addition was made by the AO u/s 69B of the Act. The relevant part of this section stipulates that: 'Where in any financial year the assessee has made investments or and the Assessing Officer finds that the amount expended on making such investments or .... exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.' The pre-requisite conditions for making an addition under this section are that firstly, the assessee should have made investment and then the AO should find that the amount actually expended on making such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no gainsaying that to invoke the provisions of section 69B of the Act, the burden is on the Revenue to prove that the real investment exceeds the investments shown in the books of accounts of the appellant. As observed by the Apex Court in K.P. Varghese v. ITO [1981] 131 ITR 597. to throw the burden of showing that there is no understatement of the consideration received, on the appellant would be to cast an almost impossible burden upon him to establish in negative, namely, that he did not receive any consideration more than what has been declared by him. Therefore, if the Revenue seeks to hold that the appellant has received more than what has been declared by him in respect of the assessment in question, the onus would lie on the Revenue to prove this fact by bringing some material on record." (xxi) In the case of in the case of CIT vs. Kulwant Rai reported in 291 ITR 36, Delhi High Court had held as under: "12. Coming to the facts of the present case with regard to the addition of Rs. 17,00,892/- made by the Assessing Officer as undisclosed income of the Assessee for the block period, we may refer to the findings of the Tribunal on this point and the relevant portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money. Both the Commissioner as well as the Tribunal have come to the conclusion that there was no such material on record." (xxiii) In the case of CIT vs. Mother India Refrigeration Industries (P.) Ltd -SC-155 ITR 711, the Hon'ble Supreme Court observed that- "10. It is true that proviso (b)to section 10(2)(vi) (Corresponding to section 32(2) of Income Tax Act 1961) creates a legal fiction and under that fiction unabsorbed depreciation either with or without current year's depreciation is deemed to be the current year's depreciation but it is well settled, as has been observed by this Court in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 SCR 603 at p. 606, that legal fictions are created only for some definite purpose and these must be limited to that purpose and should not be extended beyond that legitimate field. 11. Such being the purpose for which the legal fiction is created, it is difficult to extend the same beyond its legitimate field and will have to be confined to that purpose. It is, therefore, not possible to accept the contention of the counsel for the assessees that because of the legal fiction the unabsorbed carried forward losses should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to say that what is stated in the seized document is not correct, state of affairs, the state of affairs stated in the impounded document has to be presumed to be true. It has already been observed that there is no material/evidence on record to suggest alleged excess payment of Rs. 1 crore received by the assessee from Raja Singh Sethi was in any way in the shape of income and not an unsecured interest-free loan. Therefore also, the argument of learned Departmental Representative that on the basis of s. 292C, the action of the AO should be upheld, cannot be accepted. Therefore, we find no material to interfere in the decision arrived at by the CIT(A) vide which impugned addition has been deleted." 15. The ratio-decidendi on section 292C emerging from the above judicial precedents is that, (a) The presumption of facts u/s 292C of the Act is not a mandatory or compulsory presumption but a discretionary presumption. Since, the word used in the said Section is "may be" and not "shall". (b) Such a presumption is rebuttable presumption and not a conclusive presumption because it is a presumption of fact, not a presumption of law. 15.1 The above judgments of various courts had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cannot be generally imported from the agreement between one set of parties with the agreement between the other set of parties. Further, the ATS was never eventually acted upon and the amount exchanged in this ATS before cancellation was lesser (Rs. 10 crores) than the amount mentioned in sale deed (16 crores). However, in this case the sellers and the property in question are same in the ATS between one set of buyers and registered sale deed with another set of buyers, therefore, some reference can be drawn from the contents of ATS. (ii) There is no adverse statement of any person connected with ATS or the registered sale deed, from where the value of property at Rs. 40.06 crore can be established independently. (iii) It is observed that as per the photocopies of seized documents, the payment of only Rs. 10 crores had been made by the buyers to the sellers of this ATS. There are evidences that the payment made in cheque had been returned back to the buyer after few months. There is no evidence on record, who have cancelled the agreement and under what circumstances it had been cancelled. As per the terms of agreement, the earnest money of Rs. 5 crore was either to be forfeit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant had filed the valuation report of a Govt. registered valuer, wherein the property in question had been valued at Rs. 15,46,43,516/-. The circle rate of the property as per registered deed is at Rs. 15,46,43,516/-. Further, the appellant had filed two comparable instances of the sale of property in the same area, which also reflect the similar price as mentioned in the sale deed of the appellant. Neither any evidence have been found during the search nor brought by the AO on record in the assessment proceedings, which shows that the appellant & his wife had made any payment over and above the amount reflected in sale deed. In the search on the appellant, no source of any unaccounted income generation by the appellant or his wife has been found. These are enough evidences to rebut the presumption of 292C used by the AO against the appellant on the basis of unexecuted photocopy of ATS seized to which the appellant or his wife not a party. With these evidences on record, the burden of proof shifts to the AO and he cannot adopt the value of property mentioned in the ATS to replace the figures of exchanged price as mentioned in the registered sale deed. Further, the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nlarges the original scope for which legal fiction was introduced, in such case, such (technical) meaning should not be considered. c) If the terms used in the deeming provision are defined somewhere else in the Act and if adopting such meaning would facilitate working of the Act in accordance with the object of such deeming provision, then such meaning should be adopted. However, the intent and purpose of bringing deeming provision cannot be allowed to be whittled down by bringing into play the meaning of terms used somewhere else in the Act by the legislature. d) There cannot be deeming within deeming while interpreting deeming provision. 16.3 The Hon'ble Apex Court decision in the case of K.P. Vargheser vs. ITO [1981] 131 ITR 587, had held that the burden of proving is that on the Revenue when there is allegation of understatement or concealment in the consideration shown. Further it had been held by Delhi High court in the case of ACIT vs. M/s Vatika Greenfield (P) Ltd (Supra) that the deeming provisions of the statue should be strictly interpreted and cannot be extended beyond the legislative scope. The presumption u/s 292C is rebuttable and the appellant had rebutte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in the agreement was paid for the sale one cannot come to the conclusion that the price mentioned in the sale deed is not correct -There is no rule that the amount shown in the receipt was the actual amount paid." In the case of Smt. Kundan Singh vs ACIT (Supra) where the ATS of higher value and sale deed of lower value, were found for same set of buyers/sellers/property, there was mention of cheque payments by the buyer to the seller in ATS which was found to be correct from the bank account of the appellant and inspite of that it was held that the addition on the basis of ATS could not have been made in the case of buyer. In the case of CIT vs. Ved Prakash Choudhary (2008) 305 ITR 245 (Del.), the jurisdictional court had held that no addition can be made if there is no evidence found of any payment as per MoU(ATS) by the buyer to the seller, although the amount as written in MOU was higher. It was held that once the buyers and sellers have denied about receipt of any such cash amount, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. In the case of ACIT vs. Rakesh Narang (Supra), the jurisdiction of High Court had held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof shifts to the AO. As discussed above the courts have not agreed to presumption of 292C for invoking sections relating to deemed income/expenditure on the basis of higher value in ATS, where the seller/buyer/property are same and the amounts in ATS were much higher that the value in the sale deed, in the absence of any proof of payment made by the buyers to the sellers. The facts of the case of the appellant are on very sound footing as compared to the facts of these cases cited above. The Kerala High Court in the case of CIT vs. Smt. K.C. Agnes have even held that the value in ATS may be higher or lower than the value in sale deed and the amount stated in the sale deed was the correct amount unless there were circumstances to ignore the same. The appellant is not a party to the ATS, therefore the presumption of value of property as mentioned in this unexecuted ATS between third parties & denied by all the parties cannot be taken against the appellant, without bringing independent evidences on this value of property to be adopted in the case of the appellant. Further, during the search, post search investigations & the assessment proceedings, no evidence of any amount paid ov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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