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TMI Blog2015 (5) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... is no power vested with the A.O to seek the help of valuation officer in respect of determination of capital gain prescribed u/s 48 of the Act. Before us, Revenue has not brought any material on record to controvert the findings of Ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of Ld. CIT(A)- Decided against Revenue. Income from demolition - set off against the overhead expenses and the net expenses denied - CIT(A) deleted the addition - Held that:- While deleting the addition, Ld. CIT(A) has given a finding that the demolition of old structure was done by the Assessee as a builder and in the agreement it was not stated that the Assessee was given vacant land by removing all the debris upon demolition of the building. He has also noted that the income from sale of scrap has been accepted by Assessee in cheque and has been reduced from the project cost and therefore there is no loss to the Revenue as the project cost has been reduced. Before us, Revenue has not brought any material on record to controvert the findings of Ld CIT(A). We therefore find no reason to interfere with the order of Ld CIT(A) - Decided against Revenue. - I.T. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the normal practice of the payment of on-money before the sale. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition made by the AO of ₹ 7.40 crores of the on-money accepted by the assessee despite the fact that the District valuation Office has valued the said property at the price similar to that alleged by the A.O. 5. On the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition made by the A.O of ₹ 13,50,000/- by accepting the assessee s claim of the income being out of sale of scrap despite the fact that as evident from the sale deed, the assessee had received open plot of land without the old structure. Ground no. 1 to 4 are interconnected and therefore considered together. 4. A.O has noted that a search u/s. 132 of the Act was carried out on the Avichal Group on 16.03.2007 at Amritsar and Surat simultaneously. During the search, evidence of payment of on-money for purchasing the shopping mall property called Rickon Plaza from the Assessee was found. A.O has noted that the property at Rickon Plaza was sold by Assessee to Avichal Weaves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Shri Ramesh Arora had admitted to have made payment on money and in the cross-examination he did not give alternate explanation. In the cross-examination A.O has noted that Shri Axay Sheth had denied the on money transaction. A.O thereafter noted that since the purchasers and sellers were arguing with respect to the quantum paid for the property, the case was referred to Valuation Officer to find the real value of the property u/s. 142A of the Act. The DVO vide his report dated 24.12.2009 had valued the building at ₹ 12,25,28,786/-. The A.O therefore on the basis of the report of the DVO and the statements given by the purchasers concluded that Assessee had received on money payment of ₹ 7.4 crore over and above, the price reflected in its books at ₹ 5 crore. He accordingly made an addition of the differential amount of ₹ 7.4 crore (Rs 12.40 crore less ₹ 5 crore). Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who after considering the submissions of the Assessee deleted the addition by holding as under:- 5. I have considered the facts of the case, the reasoning of the AO for making addition as also the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 4.25 cr. together i.e. ₹ 2.10 cr. n the case of Shri Ramesh Arora and ₹ 2.15 crores in the hands of Shri Ajay Arora and this income was offered due to out of books unaccounted sale transactions found in their independent cases relating to their other business income. Thus, the AO in the assessment order of Arora brothers has assessed at the income disclosed by them and since the cash payment for purchase of property was application of income, no separate additions were made in the hands of Arora brothers and hence, there was no appeal filed by Arora brothers as their disclosure was accepted. In the case of Shri Axay Seth., the AO made addition towards payment of on money for the purchase of the property at ₹ 3.70 crores, which was challenged by him before the CIT(A) wherein the order of the AO was confirmed and against the order of the CIT(A) Shri Axay Seth filed appeal to the Ahmedabad Tribunal, which has passed order ITA No 3178/Ahd/2009 dated 5/2/2010 deleting the addition made of ₹ 3.70 crores on the ground that there was no concrete material available with the AO to prove that Shri Axay Seth has made any such payment in cash to Mahan Corporation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment was getting time barred on 31/12/2009 and the DVO has given his report on 24/12/2009 without doing any inspection of the property and without supporting his valuation by any concrete evidence as to the actual market price in the same vicinity or surrounding locality. As against this, the appellant has given detailed reply to the DVO report as also the price at which properties in the surrounding locality was sold during the same period and it is found that the appellant has sold the property at the highest price during the said period as compared to sale price of other properties and that the rate of the appellant was even higher than the Jantri Rates i.e. the stamp duty rates to which provision of section 50C apply (in case of transfer of capital asset). However provision of section 50C does not apply in the case of the appellant being a builder since the income is offered as business income, but even then, a comparison can be made as to whether the appellant has sold at low price so as to made addition for under-consideration of sale price. I find that on this aspect of the matter, the AO has not brought anything on record to conclusively prove that the rate of which the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person to say the actual price at which the transaction was finalized and as per his statement, the transaction was finalized at total price of ₹ 5 crores plus stamp duty. Thus, if the Arora brothers have not even dealt with the appellant and neither met them before the date of registration, it is certain that they have not made any payment of on money to the appellant directly and in that case, it cannot be conclusively said that the Arora brothers have paid any on money to the appellant. It is also pertinent to note that if they have not paid any such cash to the appellant then page 10 of the seized paper has no meaning since there is also no reference of the appellant on that page. Shri Axay Seth has categorically denied of having received any money from Arora brothers to be paid to the appellant and that he has clearly stated that he has not paid any amount to the appellant either on his own or on behalf of the Arora brothers. Thus, the conclusion that emerges is that as far as the appellant is concerned, it has not received any amount in cash either from Arora brothers or from Axay Seth. This finding gets further strengthened in view of the fact that the Arora brothers h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able piece of evidence recorded on 2 occasions, retraction of statement may not be considered by this Hon'ble Bench in view of the following decisions: Reliance is placed on the decision ot Hon'ble Apex Court in the case of Surjeet Singh Chhabra AIR 1197 SC 2560 (doj: 25.10.1996). As held in T S Kumarasmy vs ACIT, 65 ITD 188, by the Hon'ble Madras ITAT, It is well known that the Income-tax Officers are not Police Officers and they do not use or resort to unfair means or third degree methods in recording oath statements and therefore whatever is confessed and admitted before them during the course of search operations or during the course of any proceedings before them then we think such statements, admissions and confessions are binding and cannot be retracted, unless and until, we repeat, unless and until it is proved by legally acceptable evidence that such admission, confession or oath statement was involuntary or tendered under coercion or duress. No such circumstances existed or proved to have existed. No such evidence of statement having been recorded under duress has been brought on record. In the case of Manharlal Kasturchand Choksi, 61 ITD 55 (ITAT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or documentary, to substantiate the allegation that he was forced to make the statement in question involuntarily. .. 29. From perusal of the order of the CIT(A) as also the Tribunal, we find that none of the forums have recorded a finding that the statement under section 132(4) was obtained under duress. The assessee has totally failed to discharge the burden of proving that the statement was obtained under coercion or intimidation. He did not make any complaint to the Higher Authorities alleging intimidation or coercion (or retracting the statement under section 132(4). The Tribunal has confirmed the order of the CIT(A) by observing that surrender was made under bona fide mistake though it was never the case of the assessed before any of (be forums that the surrender was on account of bona fide mistake. The Appellate Forums while reversing the orders of the Assessing Officer are legally bound to dwell upon specific reasons assigned by the Assessing Officer for not accepting the explanation of the assessee. 3. Along with the evidence in the form of confirmatory statement, the A.O. has also referred property for the valuation to the DVO, Surat who have given his findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the property as on the date of the transfer exceeded the full value of the consideration declared by the assessee by an amount of not less than 15 per cent of the value so declared. On writ, the learned Single judge set aside the ITO's order. However, by virtue of the IF/ill Bench's judgment, the decision of the Single judge was set aside and that of the ITO was held. It is amply evidenced that this judgment was given in different context with respect to computation of capital gain u/s. 52(2) of IT Act 1961 wherein the A.O. had observed understatement of consideration in respect of transfer of property. Needless to say that there is no such issue in hand for computation of capital gain u/s.165. The issue in hand is the payment of on-money from the buyer to the assessee which is well evidenced from the transactions recorded in the seized documents incorporated in the statement by the buyer on 2 occasions are subsequent confirmation of the total value of the property through the estimation of the DVO on this case. It is further emphasized that the CIT(A) has not given any speaking finding in judgment to invoke or apply the case of K P Verghese 131 ITR 197 SC in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of valuation, we find that while deleting the addition, ld CIT(A) has given a finding that the DVO was called for valuation of the property on 18.12.2009 and he has given the report on 24.12.2009 without doing any inspection of the property and without supporting his valuation by any concrete evidence as to the actual market price in the same vicinity or surrounding locality. Ld CIT(A) has also given a finding that the assessee has sold the property at the highest price during the said period as compared to the sale price of other properties and his rates were higher than the Jantri rates. We thus find that ld CIT(A) after considering the submissions and the factual aspect of the case and by detailed and well reasoned order has deleted the addition. We also find that the Co-ordinate Bench of Tribunal in the case of ITO vs. Chandrakant Patel (supra) has noted that that the area of operation and scope of Section 142A is limited in its span only to determine the value of investment in respect of certain assets and there is no power vested with the A.O to seek the help of valuation officer in respect of determination of capital gain prescribed u/s 48 of the Act. Before us, Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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