TMI Blog2024 (3) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 147 It is well settled law that, for an assessment to be re-opened what is required that the AO should have reason to believe that the income of assessee had escaped assessment and the said belief should be an honest and reasonable person based on reasonable grounds. The correctness of the materials/reason to believe is not a matter to be looked into at the initial state. Therefore, we find no merit in the ground No.1 of the assessee. Ground No.1 of the assessee is dismissed. Addition u/s 69 - addition based on the estimation of the cost of acquisition of the property - cash component of Rs. 5.41 Crores was paid over and above the registered value - addition based on statement of witness - HELD THAT:- In the present case, the addition has been made by the AO ignoring the documentary evidence in the form of registered sale deed which being a best evidence for finding the actual sale value and in the absence of any other material to show the transactions involved in cash outside the sale consideration mentioned in the sale deed and in the absence of any corroborative documentary or credible oral evidence, the AO should not have made addition. The entire addition made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the sale deed was registered at Rs. 1.2 Crores at the circle rate, but cash component of Rs. 5.41 Crores was also paid over and above the registered value of Rs. 1.2 Crores. Furthermore, it was also found by the A.O. that the assessee has also received payments aggregating to Rs. 3.2 crores during AY 2012-13 from Sh. Vakamulla Chandrashekhar, who acted on behalf of the assessee in the said transaction and therefore, even the source of payment of Rs. 1.2 crores to Sh. Picheswar Gadde and Smt. Sunita Gadde may not be genuine. 4. Based on the material available on record, a detailed reason recorded and a notice u/s 148 was issued to the assessee on 23/11/2015. The assessee filed return of income in response to the notice u/s 148 of the Act. The assessee has not filed any objection to the notice u/s 148 and the reason recorded. The Assessee filed writ Petition before the Hon ble High Court with a prayer to quash the notice issued u/s 148 of the Act on the ground that no communication of reasons for issuance of notice u/s 148 of the Act was dispatched to the Assessee. The Hon ble Delhi High in writ petition No. (C) 12154/2015 and CM No. 32267-32268/2015 found that the copy of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Rs. 1.2 Crores i.e. at the circle rate and the Ld. A.O. observed that the a cash component of Rs. 5.41 Crores was paid over and above the registered value of Rs. 1.2 Crores and also observed by the A.O. that the assessee had also received payments aggregating to Rs. 3.2 Crores during A.Y.2012-12 from Sh. Vakamulla Chandrashekhar, who acted on behalf of the assessee in the said transaction, A.O. was of the opinion that, even the source of payment of Rs. 1.2 Crores to Sh. Picheswar Gadde and Smt. Sunita Gadde may not be genuine. Based on the material available on record reasons were recorded and notice u/s 148 was issued on 23/11/2015 which was duly served on the Assessee. 9. The Assessee has not filed any objection to the notice u/s 148 of the Act and the reason recorded. It is also observed that the Assessee filed writ Petition before the Hon ble High Court requesting to quash the notice u/s 148 of the Act on the ground that no communication of reasons for issuance of notice u/s 148 of the Act was dispatched to the Assessee. The Hon ble Delhi High in writ petition No. (C) 12154/2015 and CM No. 32267-32268/2015 found that the copy of the reasons for initiating the proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the estimation of the cost of acquisition at Rs. 28,49,38,823/- is absolutely bad in law and facts and the property has been acquired at the circle rate with the approval of SDM, the addition has been made without any supporting material and AO has completely relied on the statement recorded of Sh. Picheswar Gadde, Sh. Rakesh Sejwal, Sh. V. Chandrashekhar and CA Neha Kukreja, wherein all the statements were recorded behind the Assessee and all above persons have retracted their statements, which will not constitute any valid evidence in the eyes of law. Further submitted that, the A.O. denied the permission for cross examination of the persons on whose statements the entire belief of escapement of income rested. Therefore, submitted that failure of the authorities below to grant opportunity of cross examining the witnesses vitiates the reassessment as invalid. The value of property has been enhanced by the A.O. ignoring the sale deed which has been registered for the circle rate, the addition has been made based on the presumptions in the absence of any material or plausible evidence, thus, the Ld. Counsel sought for deletion of the addition sustained by the Ld. CIT(A). 12. Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on oath and corroborated with other statements and material does not hold any water in the eyes of law, the retraction letters filed by Sh. V. Chandrashekhar and Sh. Picheswar Gadde does not hold any merits. Who is the ultimate beneficiary: As discussed in para 7 issue no 5, that since the property is owned and used by M/s Maple Destinations and Dreambuild Pvt. Ltd, hence there is no confusion to establish this fact that ultimate beneficiary is M/s Maple Destinations and Dreambuild Pvt. Ltd. Therefore, the on money of Rs. 27,29,38,823/- shall be taxed in the hands of assessee company. 14. The above said addition has been confirmed by the Ld. CIT(A). It is not in dispute that the sale transaction mentioned in the registered sale deed are as per the circle rate with the approval of the SDM and there is no document on record relied by the AO for making the addition. The AO while recording his belief for the escapement of income of the assessee, had heavily banked on the statement recorded on oath of Sh. Picheswar Gadde, Sh. Rakesh Sejwal, Sh. V. Chandrashekshar and CA Neha Kukreja. All the above persons have retracted their statements wherein they have stated that the statement hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not reflect the correct state of affairs. Therefore, I request to furnish a copy of all the statements taken from me under which will help me to explain in detail the correct factual position on the various queries posted by you and your officials. 15. Further, the retracted statement of Sh. Picheswar Gadde is also placed at page 58 of the Paper Book and retracted statement of Rakesh Sejwal, and CA Neha Kukreja are placed at pages 56 and 57 of the Paper Book. It is well settled law that the addition cannot be made solely on the basis of retracted statement. For the said proposition, we rely on the decisions rendered in the case of Gajjam Chinna Yellappa Ors. vs. ITO [2015] 370 ITR 671 (T AP). 16. During the assessment proceedings, the assessee through his Representative sought for cross examination of the persons on whose statement the entire belief of escarpment of income rested. The request of the assessee for cross examination has been turned on the ground that the assessee has requested for cross examination of one closest to the Director of the assessee company and a person from whom assessee has purchased the property. Since, both the persons were closely known to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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