TMI Blog1994 (3) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... r referred to as the said shop) for a consideration of Rs. 11,51,000 and another Banakhata executed on 19-12-1980 in respect of the said shop was also found in which the consideration was shown as Rs. 2,50,000. Both the documents were executed by the partner of M/s. Panachand Mangaldas (hereinafter referred to as the vendor-firm) on the one hand and the assessee on the other hand. The statement of the assessee was recorded on the date of search under section 132(4) of the Act and the replies given by her were unsatisfactory and evasive and the same have been extracted by the Assessing Officer in his order. The statement of the assessee as well as her husband Shri Shivbhagwan Agarwal were recorded subsequent to raid also on two or three different dates and the same have been duly extracted in the assessment order by the Assessing Officer. The Assessing Officer also on 20th duly, 1981 examined one of the partner Shri Prabodhchandra Panachand of the vendor-firm who stated that the said shop was sold for a sum of Rs. 11,51,000 and the payments were received as under : 18-12-1980 Rs 25,000 Cheque Manekchowk Co. Op. Bank Rs. 5,00,000 Cash 29-12-1980 Rs. 1,00,000 Cash 5-3-1981 Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o purchase the said shop for Rs. 2,50,000 and not for Rs. 11,51,000 as was originally agreed on 18-12-1980. The said shop in question was transferred in the name of the assessee on 5-6-1981. According to the version of the partner of the vendor-firm, the extra sum of Rs. 9,26,000 towards transfer of alleged goodwill was paid on three different dates which are as under and which found recorded in the books of account of the vendor-firm : ------------------------------------------------------------------------------------------------------------------------------------------------- Date Page No. of Amount Alleged mode Rojmel in Rs. of payment ------------------------------------------------------------------------------------------------------------------------------------------------- 29-12-1980 42 5,00,000 Cash 05-03-1981 82 1,00,000 Cash 24-04-1981 116 3,26,000 Cash ---------------- Total : 9,26,000 ---------------- ------------------------------------------------------------------------------------------------------------------------------------------------- The assessee's husband and her Advocate Shri R.D. Pathak submitted before the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity namely, the A.C. The submissions made before the Assessing Officer as well as before the I.A.C. in proceedings under section 144B were reiterated. The A.C. came to the conclusion that the document executed on 18-12-1980 was not genuine as the same was not acted upon and the second document dated 19-12-1980 was the genuine document under which the assessee purchased the said shop for Rs. 2,50,000. The A.C. was also of the opinion that no extra or on money was passed from the assessee to the vendor-firm and, therefore, the addition of Rs. 6,00,000 in the year under appeal under section 69 of the Act was based on presumption and conjectures and not on any valid or cogent evidence. He, therefore, deleted the addition of Rs. 6,00,000 but confirmed the addition of Rs. 15,000 towards low G.P. Thus, the cross appeals before us. 3. Shri M.S. Rai, appearing for the revenue contended that the Assessing Officer has made out a good case in respect of the addition of Rs. 6,00,000 as income from undisclosed sources being unexplained investment in the said shop under section 69 of the Act and the A.C. has wholly ignored and mis-appreciated the facts, material and evidence brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case in the light of evidence brought on record. It was further submitted by the assessee's counsel that the assessee fell ill and was unwell on the date of search and the A.D.I. was kind enough to summon a Doctor for her treatment. To support this, he drew our pointed attention to the answer given by the A.D.I. in the prosecution case launched by the revenue against the assessee and her husband, which is found in the assessee's voluminous paper-book filed during the course of hearing. The incoherent and variant statement by the assessee on the search day and thereafter was due to the fact that she was not well on the search day and besides, she being illiterate, rustic, aged Marwadi lady wholly dependent on her husband in respect of her business and legal matters including tax problems; there is, therefore, nothing wrong in the assessee stating that her husband was fully aware of the entire deal and transaction relating to the said shop. Her ignorance or lack of knowledge in respect of certain matters relating to the deal of the said shop cannot be weighed against her for making the addition under section 69 of the Act and more particularly, when no concrete evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were summoned by the Assessing Officer, examined and then impounded. This extra time enabled the vendor-firm to fabricate and forge its/their own books of account over which the assessee had no control. Such one-sided and unilateral evidence was believed by the Assessing Officer for making the addition of Rs. 6,00,000 under section 69 of the Act. It was further brought to our notice by the assessee's counsel that the vendor-firm declared before its own Assessing Officer about the receipt of the sum of Rs. 9,26,000 on transfer of goodwill but claimed the same as not taxable in view of the decision of the Supreme Court in the case of Shrinivas Shetty, but the Assessing Officer assessing the vendor-firm upon examination on facts of the case and evidence was of the opinion that there was no goodwill to the vendor-firm and therefore, did not give any exemption to the vendor-firm. This is also one of the most important factor which has been lost sight of by the Assessing Officer and duly considered by the A.C. while giving relief to the assessee. To fortify the case of the assessee, her representative Shri R.D. Pathak submitted that there have been repeated requests to the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material available with us in the appeal records. 6. We have heard both the parties at great length. We have also perused the entire material available on record very carefully. In our view, the Revenue's appeal does not have merits to be allowed. The Assessing Officer made the addition due to incoherence and variance in the assessee's statement on different dates and that of her husband Shri Shivbhagwan Agarwal in respect of deal of the said shop. The Assessing Officer has also given undue weightage to the document dated 18-12-1980, the statement of one of the partners of the vendor-firm Shri Prabodhchandra Panachand and the statement of the attesting witness to document dated 19-12-1980. He has also given more credence to the entries incorporated in the books of account of the vendor-firm about the receipt of the extra money from the assessee which have been impeached by the assessee with a demand for chemical examination for finding out truth or otherwise of those entries. 7. It is well-known and admitted fact that search operations, particularly under the Income-tax Act is a lawful invasion on the privacy, life and property of a citizen which may affect him/her mentally al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w let us examine, whether there were any compelling or justifiable reasons or circumstances on the part of the assessee for giving different statements on different occasions before different officers. It is common knowledge, open secret and admitted fact in this ancient and cultured country that woman/females are heavily dependent on males more particularly, husbands to look after and manage, on implied authority, their business matters, property dealings, tax and legal matters and, therefore, no eyebrow should be raised in astonishment nor any adverse inference should be drawn by any Tribunal or authority that a particular Indian lady or woman is unable to say with precision the true state of affairs of her business, properties or for that matter regarding her tax and legal matters or when she says that her husband has full knowledge and information about certain facts or dealings made on her behalf on such an implied authority. The assessee, we were informed, during the course of hearing, is an illiterate, aged, rustic, domestic and tradition-bound Marwadi lady, who is not exposed to the vagaries of this now cruel world and she was, therefore, wholly dependent on her husband in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which consideration of Rs. 11,51,000 is found recorded. The case of the assessee before the Assessing Officer has been that the books of account of the vendor-firm have been fabricated and forged in order to put the assessee to sufferance and other attendant adverse consequences and in turn attempting to gain advantage in its income-tax proceedings by taking the stand that the extra sum of Rs. 9,26,000 was paid for goodwill of the firm which was not taxable under section 45 of the Income-tax Act on the strength of the decision of the Supreme Court in the case of Shrinivas Shetty. When there were persistent requests and obstinate demands from the assessee's side for sending the books of account of the vendor-firm for chemical examination (to pass ultra violet rays) for ascertaining the allegation about fabrication or forging of the same, we see no justifiable reasons recorded by the Assessing Officer anywhere in the assessment order for not following that course which, in our view, could have brought to light the truth or otherwise of the allegation made by the assessee in this regard. The Assessing Officer having failed to do so should not have heavily relied on such impeached and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard nor any evidence has been placed before us by the revenue to persuade us to dislodge the finding and conclusion of the A.C. in the impugned order. 10. One more point which goes in favour of the assessee is that on 18-12-1980 the vendor-firm agreed to sell to the assessee the said shop for a consideration of Rs. 11,51,000 which is inclusive of the price of the goodwill amounting to Rs. 9,26,000. And on the very next day, i.e., on 19-12-1980 the vendor-firm without receiving Rs. 9,26,000 from the assessee or without taking any assurance, guarantee or security under any supplemental or collateral document for the sum of Rs. 9,26,000 enters and executes another document on 19-12-1980 and agreeing to sell the said shop to the assessee for Rs. 2,50,000. This is a strange and highly improbable conduct on the part of the partners of the vendor-firm who are very prudent and successful businessman. The main partner of the vendor-firm Shri Prabodhchandra Panachand has stated that extra sum of Rs. 9,26,000 was paid by the assessee on three different dates (as extracted by us above) and the last payment was on 24-4-1981 as found recorded in the books of account of the vendor-firm, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of goodwill on various dates from the assessee are impeachable and rightly impeached by the assessee. 12. We find that the A.C. has also taken into account the sale instances of the other shops in the New Cloth Market which could go to establish that the said shop purchased by the assessee was not for a consideration of Rs. 11,51,000 but for Rs. 2,50, 000 only. Since the assessee impeached and questioned the entries on three different dates about the payment of extra money of Rs. 9,26,000 on the ground that there were erasion and interpolation, we ourselves wanted to examine those entries in the books of account of the vendor-firm and, therefore, direction was given to the D.R. to produce the same before 31-1-1994. The same were not produced. In the absence of which we are unable to express any opinion and, therefore, an inference has to be drawn in favour of the assessee and against the vendor-firm. The A.C. has given very valid and cogent reasons in coming to a conclusion that the assessee did not pay any extra money/consideration amounting to Rs. 9,26,000 spread over in two financial years under the agreement dated 18-12-1980 and, therefore, directing deletion of the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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