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TMI Blog2006 (1) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... house, residential plots, F.D.R.s and money lending business. During the course of proceedings, the assessee filed statement of affair as on 31-3-1995 and 31-3-1996. Receipt and payment account showed that he has accounted for Rs. 16.5 lakhs as sale proceeds of agricultural land. Vide letter dated 8th March, 2002, the assessee stated that he sold agricultural land to one Shri Sanwarmal Poddar, 701, Richmond Plane, 3/2 Convent Road Bangalore-25 for a consideration of Rs. 16.5 lakhs. It was admitted by him that the property was registered for a consideration of Rs. 8 lakhs only. The purchaser Shri Sanwarmal Poddar in communication to the Assessing Officer through letter dated 5-4-2002 stated that he has paid Rs. 8 lakhs as under : Sale deed dated 16-10-1995 Rs. 4,00,000 Sale deed dated 11-12-1995 Rs. 4,00,000 4. The Assessing Officer recorded the statement of Shri Sanwarmal Poddar and of assessee under section 131 of the I.T. Act on 13-2-2003. 5. Gist of statements of assessee and Shri Poddar have been mentioned by the Assessing Officer in his order and the same is reproduced for ready reference. Gist of statement of assessee is as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u To a specific question asked, whether Shri Chikkalingiah has any evidence that the cheque issued by Karthik Enterprises did really represent the money paid by Shri Poddar, and that the cheque was not even crossed though it was for such a huge sum. Shri Chikkalingiah has stated that he does not have any evidence to prove that the cheque by him represented the money from Poddar, and he did not observe whether it was crossed or not. 8. In view of the factual background of the statement of Shri Poddar, the assessee was asked to file corroborative evidence to establish that consideration over and above of Rs. 8 lakhs was received from Shri Poddar. The assessee filed a letter dated 25-2-2003 and stated that Rs. 10 lakhs was received through bearer cheque No. 07915 dated 8-6-1995 drawn by M/s. Karthik Enterprises and the cheque was encashed by him at Bangalore. Remaining amount of Rs. 6.5 lakhs was received in cash. The assessee requested for cross examination of Prop. of M/s. Karthik Enterprises and Shri P. Basavraj, Advocate Ramanagram for ascertaining the truth. 9. The Assessing Officer required the assessee to prove the genuineness of transaction of receipt of Rs. 10 lakhs f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 10 lakhs to the total income of the assessee. 13. Before the learned CIT(A), it was submitted that the land was sold to Shri Poddar and Shri H.P. Nagendra but negotiations were made by Shri Thammana and Shri P. Basavaraj, advocate on different dates. The assessee received cash from these two persons towards sale of land in different dates. Though the land was shown to have been sold to Shri Poddar and Shri H.P. Nagendra. It was submitted before the learned CIT(A) that when cash is paid in excess of the amount mentioned in the sale deed, no record is normally kept. Hence no documentary evidence can be produced in respect of such money. As a supporting evidence, the assessee submitted that the land which was sold was subsequently acquired by M/s. Karnataka Industrial Area Development Board, Bangalore at a much higher sum and this supports the assessee s case that the land prices were more than that was mentioned in the documents. Transaction of sale of agricultural land were found recorded in the diary and the assessee during the course of survey admitted that amounts mentioned in the diary are correct. The assessee runs a small Kirana Shop and was not in a position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned AR submitted that the amounts were reflected in the diary. The revenue is not disputing the issue that the lands were not sold. It means that the sale of land as mentioned in the diary is being accepted. Diary cannot be accepted in part. Moreover the assessee offered the explanation and he has not been allowed the opportunity to cross examine the persons through whom the negotiations for sale were effected. The revenue has not established that he has not put his signature on reverse side of the cheque issued by M/s. Karthik Enterprises. The Assessing Officer has not made any effort to locate the owner of M/s. Karthik Enterprises. The learned AR also relied on the report published by National Institute of Public Finances titled as "Aspect of Black Money in India" In this report, it has been mentioned that there is payment of black money in real estate transactions. In the case of Jenjibai Stud and Agricultural Farm v. Dy. CIT ( sic ) it has been observed that though technically the report of National Institute of Public Finances and Policies cannot substitute the evidence but such report also cannot be over looked. Another purchaser Shri H.D. Nagendra was not allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a book maintained by assessee or is only an incriminating document. 18. In section 68, the word may has been used. The Chandigarh Bench in the case of Jindal Udyog v. ITO [2002] 83 ITD 248 held that rule contained in section 68 is not an absolute rule. There are certain cases when the exception to general rule contained in section 68 can be made. The word may cannot be interpreted to mean shall . For coming to such conclusion Chandigarh Bench relied on the decision of Supreme Court in the case of Smt. P.K. Noorjahan ( supra ). Hence, even if it is presumed that section 68 is applicable, then one will have to consider the surrounding circumstances to see whether the amount can be treated as income of the assessee. In the instant case, the assessee was able to show that he has received the sum of Rs. 10 lakhs through a bearer cheque issued by M/s Karthik Enterprises. Xerox copy of the cheque was sent by the bank to the Assessing Officer. It is not rebutted by the revenue that signature of the assessee were not appearing on the reverse side of the cheque. The Assessing Officer was not able to locate M/s. Karthik Enterprises. No prudent person will issue a bearer chequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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