2011 (2) TMI 1289 - AT - Income Tax

Summary

Issues Involved:

1. Validity of initiation of proceedings under sections 147/148.
2. Consideration of the sale value of the property.
3. Allegations of forced statements and retraction.
4. Use of photocopy of receipt as evidence.
5. Non-disposal of objections before passing the assessment order.

Detailed Analysis:

1. Validity of Initiation of Proceedings under Sections 147/148:

The assessees contended that the initiation of proceedings under sections 147/148 was unjust and based on unfounded reasons. The Tribunal noted that the Assessing Officer (AO) had enhanced the sale consideration based on a receipt indicating a higher sale value of the property, which was confirmed by the assessees in their statements. The AO had recorded reasons for reopening the assessment, which were considered valid by the Commissioner of Income-tax (Appeals) [CIT(A)]. The Tribunal upheld the validity of the proceedings, stating that the AO had relevant material to form the belief that income had escaped assessment, and the initiation was not based on suspicion or gossip.

2. Consideration of the Sale Value of the Property:

The AO assessed the sale value of the property at Rs. 93 lakhs based on a receipt indicating receipt of Rs. 55 lakhs in addition to Rs. 38 lakhs to be paid subsequently. The assessees argued that the receipt was forged and that the actual sale consideration was Rs. 39 lakhs. The CIT(A) upheld the AO's decision, noting that the assessees had confirmed the authenticity of their signatures on the receipt in their statements. The Tribunal found no evidence to rebut the AO's findings and upheld the addition made by the AO.

3. Allegations of Forced Statements and Retraction:

The assessees claimed that their statements were forcibly recorded by the ADIT (Inv.) and subsequently retracted. The Tribunal examined the circumstances and timing of the retraction and found no evidence to support the allegation of force. The Tribunal noted that the statements were recorded at the assessees' residence, and there was no indication of coercion. The retraction was considered an afterthought, and the Tribunal upheld the voluntary nature of the statements.

4. Use of Photocopy of Receipt as Evidence:

The assessees argued that the AO relied on a photocopy of the receipt, which could not be verified. The Tribunal noted that the assessees had confirmed the authenticity of their signatures on the receipt in their statements. The Tribunal held that the AO was justified in acting upon the photocopy of the receipt corroborated by the assessees' statements and upheld the AO's decision.

5. Non-disposal of Objections before Passing the Assessment Order:

The assessees contended that the AO did not dispose of their objections against the initiation of proceedings before passing the assessment orders. The Tribunal noted that the AO had supplied a copy of the reasons recorded under section 148 and had considered and disposed of the objections in the assessment orders. The Tribunal found no merit in the assessees' argument and upheld the AO's actions.

Conclusion:

The Tribunal dismissed all the appeals, upholding the validity of the initiation of proceedings under sections 147/148, the assessment of the sale value of the property at Rs. 93 lakhs, the voluntary nature of the statements given by the assessees, the use of the photocopy of the receipt as evidence, and the AO's disposal of objections in the assessment orders.