2015 (12) TMI 1073 - HC - Income Tax

Photo copy of the receipt taken for the purpose of assessment - chargeability of income - Whether the hypothetical income can be brought to charge under section 5 of Income Tax Act, 1961 dehors the provisions of section 2(c) read with section 10 (Indian Contract Act, 1872), Section 5 (Transfer of Property Act, 1882), Section 17 (The Registration Act, 1908) and the provisions of Indian Stamp Act, 1899? - Held that - The photocopy of the receipt is specific in that it evidence receipt of ₹ 55 lakhs is cash from Shri Joginder Singh and Mrs. Harjinder Kaur, being the purchasers, on 15.9.2000. It is duly signed by all the assessees in token of having received the aforesaid sum of money in cash. The name of the purchasers as also the date of receipt of the aforesaid sum of money are also mentioned in the receipt in unambiguous terms. The fact that the receipt carries signature of the recipient of the aforesaid money on the revenue stamp affixed on the receipt further establishes the genuineness of the contents of the receipt. If the AO had the original of the receipt in his possession and shown the same to the assessees, the assessees could have done no better than what they have done by seeing the photo copy of the receipt. Besides, the receipt is relevant to the fact in issue and establishes in unambiguous terms the receipt of ₹ 55 lakhs in cash over the apparent consideration. Secondly, the authenticity of the receipt, the authenticity of the signatures of the assessees on the receipt, and the fact that a sum of ₹ 55 lakhs was actually received by them in cash have been confirmed by the assessees in their respective statements recorded on oath by the ADIT (Inv.). In other words, the genuineness of the receipt and also the contents thereof are duly corroborated by all the assessees in their respective statements. It is not a case where the departmental authorities are acting merely on the basis of photo copy of the receipt. Thirdly, and more importantly, the assessees have not placed any evidence on record to rebut the contents of the receipt or even the contents of their statements. In this factual setting, we are unable to hold that the said receipt is irrelevant material for the purpose of making assessment. We therefore hold that the Assessing Officer has rightly acted upon the contents of the receipts which are duly corroborated by the assessees in their respective statements, for making the assessment under challenge before us - Decided against assessee

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Admissibility of a photocopy of a receipt as evidence.
3. Determination of capital gains on the sale of property.
4. Validity of statements recorded under coercion.
5. Retraction of statements and its impact on the assessment.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The court addressed the delay of 1214 days in filing the appeal. The appellant justified the delay by stating that an application under Section 254(2) of the Income Tax Act was filed on 12.9.2011 and rejected on 30.6.2014. Considering the reasons provided and after hearing the parties, the court condoned the delay.

2. Admissibility of a Photocopy of a Receipt as Evidence:
The Tribunal and lower authorities based their decision on a photocopy of a receipt indicating a payment of Rs. 55 lakhs. The Tribunal held that while photocopies generally have limited evidentiary value under the Indian Evidence Act, the Income Tax Act allows the Assessing Officer (AO) to act on "relevant material" gathered during assessment, which can include photocopies if they influence the case's merits. The court supported this view, emphasizing that the AO is not restricted by technical rules of evidence and can use materials relevant to the assessment.

3. Determination of Capital Gains on the Sale of Property:
The property in question was sold for Rs. 39 lakhs, with each co-owner (mother and two sons) receiving Rs. 13 lakhs. However, a receipt indicated an additional Rs. 55 lakhs received in cash. The AO concluded the total sale consideration was Rs. 93 lakhs, attributing Rs. 31 lakhs to each co-owner. The CIT(A) and Tribunal upheld this finding, noting the receipt and corroborative statements from the assessees.

4. Validity of Statements Recorded Under Coercion:
The assessees retracted their statements, claiming they were made under coercion. However, the Tribunal found the retraction unconvincing, noting the similarity in the signatures on the receipt and other documents. The Tribunal emphasized that the assessees had confirmed the receipt's authenticity in their initial statements, which were recorded on oath.

5. Retraction of Statements and Its Impact on the Assessment:
The Tribunal rejected the assessees' retraction, stating that the initial statements and the photocopy of the receipt constituted relevant material for assessment. The Tribunal observed that the assessees failed to provide evidence rebutting the receipt's contents or their statements. The court agreed, noting that the findings were factual and not shown to be illegal or perverse.

Conclusion:
The court dismissed the appeals, concluding that the findings by the authorities were factual and did not warrant interference. The decision emphasized the admissibility of photocopies as relevant material under the Income Tax Act and upheld the assessment based on the corroborated receipt and initial statements.