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TMI Blog2014 (11) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee certain documents indicating receipt of on- money by the assessee on the sale transaction of land were found and, therefore, notice u/s. 153C was issued calling for returns of income for A.Ys. 2003-04 to 2008- 09. In response to the said notice, the assessee's son Sri M.A. Chary informed that his father expired on 26.9.2005 and filed return of income in the capacity of legal heir of Sri M.P. Chary on 21.5.2010 declaring income of Rs. 10,29,270 and agricultural income of Rs. 84,600. The AR of the assessee appeared in response to the notices issued u/s. 143(2) and 142(1 and furnished information called for. 3. During the course of search at the residential premises of the son of the assessee, Sri M.A. Chary, certain sale documents in the name of the assessee were found and seized and marked as Annexure A/EMD/P01/4. Pages 4 and 5 of this annexure are the sale agreement dt. 25th August, 2004 for sale of plot No. 564-A-22-III in Survey N. 403/1 (old), Survey No. 120 (new) of Shaikpet village, admeasuring 2677 square yards (sqy) by Late Sri M.P. Chary to Sri M.S. Prasad. The total consideration for the sale of this property as mentioned on this agreement is Rs. 3.06 crores a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration has no basis. It was submitted that the agreement relied upon by the Assessing Officer was only an unsigned draft agreement prepared by the assessee for the purpose of discussion and negotiation. It was further submitted that the said agreement has no legal sanctity and the same cannot be enforced in law. 6. It was also pointed out that Late Sri M.P. Chary was looking after all the transactions till his death and Sri M.A. Chary being his son and legal heir was not aware of the transactions and it was only after discussion with the family members after the search operation that the son of the assessee came to know about the details of the transaction. Information was given by the family members of the assessee that the property under reference was having legal and other problems such as ULC, boundary dispute, HT electric line and occupation by the hut dwellers and also dispute with R & B Department. It was submitted that the proposed buyers had agreed for higher price provided the problems are solved by the assessee and as the assessee was not agreeable for the same, the proposed buyers had discounted the property value and after negotiations, the sale consideration w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was not in doubt. Therefore, the CIT(A) held that such document could not have been discarded as having no evidentiary value attached to it and at the time of agreement itself it has been identified and recorded in writing about the issues of ULC clearance, boundary disputes, disputes with R & B Department and Housing Society in respect of the property in question. The CIT(A) observed that these problems have not cropped up subsequently and the assessee has to take the responsibility of clearing those issues and it has been very clearly and categorically deduced in writing by the assessee to fasten the responsibility of clearing the problems on the vendee and agreed for a consideration of Rs. 3.06 crores. The CIT(A) pointed out that the assessee never attempted to resolve the issues before sale of the property and it is always his intention to get rid of the property along with the problems attached to this property. The CIT(A) held that the AR was not correct to contend that the agreed sale consideration was reduced because of the shifting of the burden of resolving the disputes on the property to buyers and in the instant case, the buyers are very much in the knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned agreement was merely typed on the letterhead of the assessee which was prepared by the assessee himself for his guidance before negotiating the sale transaction. It was further submitted that the son and legal heir of the assessee had accepted the sale consideration of Rs. 3.06 crores in a state of utter confusion and without knowing the facts regarding the sale transaction he had stated in the sworn statement that the sale consideration is at Rs. 306 lakhs as appearing in the agreement. The son and legal heir of the assessee was not aware of the transaction of sale and he was not a party to it and his late father Sri M.P. Chary was only looking after the transaction till his death and only after discussion with the family members consequent to the search operation, the son and legal heir of the assessee came to know that the sale consideration of the plot was only Rs. 147.23 lakhs. Because of lack of knowledge of the facts of the transaction, the assessee's son did not raise any objection during the course of statement recorded on 29.9.2008. 10. It was submitted by the learned counsel for the assessee that since there were problems connected with the plot of land such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the observations of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd's case (supra) on which reliance has been placed by the learned Counsel cannot be read in isolation. The judgment deserves to be read in its entirety to cull out the law laid down by the Hon'ble Supreme Court. If so read, it is quite evident that the orders passed on an incorrect assumption of facts or incorrect application of law or without applying the principles of natural justice or without application of mind will satisfy the requirement of the order being erroneous and prejudicial to the interest of the revenue. If the order sought to be revised under Section 263 suffers from any of the aforesaid vices, it cannot be said that the Assessing Officer has "adopted", in such an order, a course permissible in law or "taken" a view where two or more views are possible." 13. The assessee's counsel also relied on the decision in the case reported 219 ITR 235 (Kerala). He also pointed out that the Explanation to section 132 is not applicable in the present case. The learned counsel for the assessee submitted that ground No. 3 has been raised as a legal ground wherein it has been argued that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot will be completed by 1st November, 2004. Thereafter on 18.11.2004, the said property in question was sold to Shri M.S. Prasad and T. Narendra Chowdary vide three Agreements of Sale cum GPA. As held by the CIT(A), the AR could not explain properly about the need, for registering the same property in three different agreements. Land admeasuring 1,071 square yards was sold for a consideration of Rs. 58,90,500, land admeasuring 765 sq. yards was sold for Rs. 42,07,500 and land admeasuring 841 sq. yards was sold for Rs. 46,25,500 thereby totalling to Rs. 1,47,23,500/- was disclosed in the books as against agreed consideration of Rs. 3.06 crores as per sale agreement found in the premises of Shri M.A. Chary. 16. We are in agreement with the order of the CIT(A) and the reasons given by the CIT(A) for dismissing the assessee's appeal are very well reasoned and clinching. We confirm the order of the CIT(A) and extract the relevant portion which has persuaded us to confirm the order of the CIT(A). The relevant portion is as follows: "The said document found in the possession of Shri M.A. Chary at the time of search cannot be ignored as a dumb document due to the fact that the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been clearly stated about the fact of sale of property and quantum of consideration received. The subsequent retraction could not be considered as a valid retraction and it is only an afterthought. Reference is invited to this decision of Mumbai ITAT reported in 83 ITD 102. Similarly, the Hon'ble Gauhati High Court had an occasion to examine a case where a retraction was made after gap of 3 months and held that such retraction is not allowable as reported in 263 ITR 168 in the case of Green View Restaurant vs. ACIT." 17. Further, we note that the property is situated in a posh commercial area of Jubilee Hills, Hyderabad and because of its prime location it will definitely fetch higher value than that was disclosed by the assessee. We are also aware that the buyer of the property will be having the registered document and hence the unsigned agreement being in the possession of the seller viz., the assessee would not amount to "dumb document". In the instant case, the circumstantial evidence cannot be brushed aside particularly when going through the process of the agreement, we find that all the clauses in the agreement have been followed. We also note that the property was regist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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