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TMI Blog2013 (11) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... - 22-11-2013 - Smt. Diva singh, JM And Shri J. Sudhakar Reddy, AM,JJ. For the Appellant : Shri Ajay Vohra, Adv. For the Respondent : Sh. R. S. Meena, CIT, DR ORDER Per J. Sudhakar Reddy, AM. Both these appeals are filed by the assessee and are directed against separate orders of the Ld.Commissioner of Income Tax (Appeals)-I, Ludhiana for the A.Y. 2008-09. In the case of Mr.Tej Pal Singh, the Ld.Commissioner of Income Tax (Appeals) followed his decision in the case of Smt.Parmidner Chadha. 2. Facts in brief:- The assessee is an existing Income Tax assessee filing his Return of Income regularly for many years. He is presently employed as an executive with Max New York Life Insurance Co. Ltd. His source of Income comprises mainly of Salary Income and Interest income. However for the said Assessment Year, the assessee, apart from regular sources of income, had declared Long Term Capital Gains on sale of Land at Mewla Maharajpur, Faridabad. A Search and Seizure operation u/s 132 of the Income Tax Act was carried out at the residential premises of the assessee on 16.01.2008. Search warrant was issued in the name of " Smt. Parminder Chadha and Shri Tej Pal Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gains in case of assessee based on his share in the said consideration, mainly for which and 4 for other grounds which are urged herewith without prejudice to one another, the assessee is in appeal. 3. The A.O. assessed the total income at Rs.4,21,17,720/- in the case of Mr.Tej Pal Singh and Rs.5,52,96,060/- in the case of Mr.Parminder Chadha. The assessee filed an appeal before the First Appellate Authority who dismissed the appeal. 4. Aggrieved the assessee is in appeal before us on the following grounds. 1. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not quashing the assessment order dated 29.12.2009, passed by the assessing officer under section 143(3) read with section 153A of the Income-tax Act, 1961 ('the Act'), being beyond jurisdiction, bad in law and void ab-initio. 1.1. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A, since the same was made on the basis of invalid search carried out under section 132 of the Act, and consequently the assessment order was illegal and bad in law. 1.2. That the CIT (Appeals) erred on facts and in law in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in law in holding that the two receipts towards receipt of Rs. 1 crore and Rs. 2.70 crores in respect of the impugned property, found from the premises of the appellant during the course of search, was sufficient evidence to prove that the appellant had received excess consideration than that disclosed in the return of income. 2.4 That the CIT(Appeals) erred on facts and in law in not appreciating that the aforesaid receipts were only draft receipts, which were prepared by Smt. Parminder Chadha in anticipation of agreement to sell, dated 1.2.2007, entered between the parties for sale of same property at Rs. 8 crores, which was not finally executed and was cancelled by the parties subsequently. 2.5 That the CIT(Appeals) erred on facts and in law in holding that the plea that the amounts stated in draft receipts were prepared by the appellant in anticipation of the proposed agreement to sell for Rs. 8 crores, which was subsequently cancelled, was not taken during the course of assessment proceedings and thus could not be relied upon. 2.6 That the CIT(Appeals) erred on facts and in law in not appreciating that if the receipts for aggregate amount of Rs. 3.7 crores wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alter, amend or vary the above grounds of appeal. 5. Mr.Ajay Vohra, Ld.Advocate represented the assessee and Shri R.S. Meena, Ld. CIT, D.R. represented the Revenue. The sum and substance of the argument of Mr.Ajay Vohra is that the addition made in the hands of the purchasers of the said land, on the same set of facts and based on the same material has been deleted by the Tribunal in its order dt. 25.10.2012, 'F' Bench of the Delhi Tribunal in the case of M/s Piyush Infrasturcture India P.Ltd. in ITA no.1072//Del/2011. He submits that the issue is covered in his favour. He did not press ground nos. 1 to 1.4. 6. The Ld.D.R. on the other hand argued at length and tried to distinguish the findings in the order of the Tribunal in the case of M/s Piyush Infrasturcture India P.Ltd. (supra). 7. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and a perusal of the papers on record and the orders of the authorities below, we hold as follows. 8. The undisputed fact is that the material seized during the course of search and information gathered by means of post search queries did not form the basis of the addition. In the case of M/s Piyu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee however, in the sale deed registered, the amount paid through cheque for Rs.5.50 crore only has been shown as the sale consideration. As per him the remaining amount out of Rs.18 crore has been paid in cash. So far other sets of evidence are concern we will discuss its reliability in the succeeding paragraphs. The contention of the ld. AR against the reliability of the first set of evidence remained that both the alleged agreement dated 15.2.2007 and receipt dated 15.2.2007 have been sent to the department on fax from the unknown person and hence in absence of identity of the source and original copies of these documents, the same cannot be relied upon. He contended further that even the telephone no. name appearing on fax message was not investigated despite specific request of the assessee during the course of assessment proceedings. In support he referred page nos. 31 to 33 of the paper book and also the reply dated 19.11.2009 in this regard reproduced at page no. 7 of the assessment order. The ld. AR contended further that since the fax message has not been found from the premises of the assessee, the onus to establish its genuineness does not lie upon the assessee. He has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2007 has been placed at page no. 91 of the pb (d) and receipt of Rs.2.70 crore dated 14.5.2007 has been placed at page no.92 of the pb (d). In the copy of receipt dated 11.4.2007 amount of Rs.1 crore in cash shown to have been received in lieu of a part payment towards agreement of sale dated nil from the assessee. In the receipt dated 14.5.2007 an amount of Rs.2.70 crore shown to have been received by the assessee as in lieu of a part payment towards agreement of sale dated nil. Thus Rs.3.70 crore has been shown paid in cash as a part payment towards agreement to sell by the assessee to the owners of the property. The ld. DR submitted that the amount shown in these receipts paid in a cash corroborates this fact that these payments were made above the amount shown in the sale deed at Rs.5.50 crore through cheque. The contention of the ld. AR remained that these receipts have not been shown signed by the remaining Co-owners of the property i.e. Sh. Tej Pal Singh and Ms. Kavita nor these receipts have been signed by the assessee. His further contention remained that these receipts should have been found from the possession of the assessee since assessee was the purchaser of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b (d). The ld. DR submitted that the transaction period of the claimed separate deal is the same and there is no evidence of other deal on record claimed as by the assessee in his letter dated 4.12.2009. The ld. AR on the other hand contended that even if the explanation of the assessee regarding payment of this amount shown in the documents is denied, no inference can be drawn that payment was made towards the sale consideration of the present property in question. 3.13 The ld. AR submitted that there was no question of taking extra payment through cheque and during the search proceedings no specific question was asked to the assessee regarding the payment of Rs.2 crore shown in the ledger account of Smt. Parminder Chadha with the assessee, made available at page no. 42 of the Pb (d). We are not fully convinced with the contention of the ld. AR in this regard, but at the same time on the basis of the stated payment of Rs.2 crores through cheque an inference beyond doubt cannot be drawn that the amount was paid towards the sale consideration of the property in question. 3.14 The 4th set of evidence relied upon by the ld. DR are copies of the documents made available at page nos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess complex could not be developed by the assessee and the land on which the said business complex, was to be developed is still in dispute and no construction has been raised so far. It is only an imagination of the Assessing Officer that any adjustment of sale consideration of the property in question has been made against booking of the space by the above 3 persons. He submitted that the sale consideration of the property at Rs.5.50 crores as per registered deed of the property has already been paid by the assessee. Considering these submissions we are of the view that there is no evidence beyond doubt to establish the allegation of the department that the amount payable by the above 3 persons towards their booking of the space in the business premises to be developed by the assessee, was actually paid to the assessee by way of adjustment of the sale consideration towards the property in question above the amount shown in the sale deed or towards Rs.18 crores shown in the alleged agreement to sell dated 15.2.2007 received by the department on fax. 3.16 The 5th set of evidence relied upon by the AO and ld. DR are the set of statements of Sh. Harish Singla recorded by the AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Sh. Harish Singla to deviate from his earlier statements recorded u/s 132 (4) of the Act. The Hon'ble Punjab and Haryana High Court in the case of Bachittar Singh Vs. CIT (Supra) relied upon by the ld. AR, has been pleased to hold that the Tribunal was justified in holding that retraction made after 2 months was not permissible and voluntary statements recorded in the presence of family members was an important) material which could be acted upon. In that case the AO made addition on the basis of statements recorded during the course of survey. The addition was in respect of investment not recorded in the books of accounts. The assessee later on retracted from his earlier statements by taking stand that he had agriculture income to that effect investment was from that source. In the case of ACIT V s. Hukum Chand Jain (Supra) before the Hon'ble High Court of Chhattisgarh relied upon by the ld. AR, the assessee could not explain recovery of cash and jewellery during the course of search proceedings and in his statement recorded u/s 132 (4) he had surrendered certain amount as his undisclosed income for block period and had also expressed his willingness to pay taxes worked out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trary statements of Sh. Barish Singla recorded subsequently on 20.10.2010 during the course of assessment proceedings as discussed above are not sufficient in any way to establish beyond doubt that the property in question was actually sold for Rs.18 crores out of which the amount of Rs.5.50 crores paid through cheque only was shown in the sale deed and the remaining amount paid in cash was on money. So far other claimed evidences are concerned these are also not sufficient to establish the above allegation of involvement of on money. It is only an inference which has been presumed by the department that the advance of Rs.2 crore (Rs.l crore in cash and Rs.1 crore by cheque) was given out of which the amount of Rs.1 crore paid by cheque dated l5.2.2007 has been adjusted against the payments shown as per sale deed; Rs.1 crore vide cheque dated 23.4.2007 and another Rs.l crore vide cheque dated 8.5.2007 were received by the assessee apart from payment shown in the sale deed of Rs.5.50 crores; Rs.1 crore shown in the receipt dated 11.4.2007 and Rs.2.70 crore shown in the receipt dated 14.S.2007 were apart from the payment shown in the sale deed and that Smt. Parminder Chadha, Sh. Tej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Like wise in the case of Dhakeshwari Cotton Mills Ltd. V s. CIT (Supra) it has been held that though ITO is not fettered by technical Rules of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law but in making assessment uls 23 (3) of 1922 Act he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. In the present case before us the issue raised was as to whether there were on sufficient material with the Assessing Officer to justify the addition made at Rs.l2.50 crores with this finding that the property was sold for Rs.18 crores but in the sale deed it was shown at Rs.5.50 crores and remaining amount was paid in cash. In the case of C. Vasanti Lal Co. Vs. CIT (Supra) it was held that ITO is not bound by any technical law of evidence and it is open to him to collect materials to facilitate assessment even by providing inquiry. In the case of ACIT Vs. Jay Engineering Works Ltd. (Supra) the Hon'ble Delhi High Court has been pleased to hold that ITO not being a Court can rely upon material which may not be strictly evidence admissible under Indian Evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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