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TMI Blog2018 (1) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Paramjit Singh [2010 (2) TMI 262 - PUNJAB however, we are of the view that this is not a fit case for levy of penalty u/s 271(1)(c). The assessee had disclosed the source of income being the amount received from Sh. Malkiat Singh on account of sale of his land. The assessee was under bona-fide belief that since the entire amount received by him was on account of consideration for the sale of land, the land being an agriculture rural land falling outside the purview of the definition of a capital asset, the income from the sale of land was exempt from taxation, hence, non-offering of the said income for taxation cannot be said to be a deliberate act on the part of assessee Mohinder Singh of furnishing of inaccurate particulars of income or concealment of income. - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... deration received by him. But the income tax authorities were not satisfied with his explanation, hence, an authorization u/s 132 A of the Income Tax Act was issued by the DIT (Investigation) Ludhiana and cash amounting to ₹ 2,03,92,500/- was requisitioned and seized u/s 132A of the Income Tax Act. Statement of Shri Malkiat Singh was also recorded in which he denied of having paid any other money except the sale consideration depicted in the sale deeds. He also denied of having any relation with M/s J.P. Properties Dealers. However, he submitted that he runs his business of property dealer, opposite Punjabi University, Patiala, but he could not give complete address of his office. Income tax authorities made discreet inquiries but no such office could be found. Subsequently, a survey action was carried out u/s 131A on the premises of Shri Jagdev Singh, Prop. M/s J.P. Property Dealer, Patiala on 23.4.2013 and his statement was recorded in which he stated that he knew Shri Malkiat Singh, who had paid a sum of ₹ 2,46,30,000/- to Shri Mohinder Singh to purchase the property through three different sale deeds but all the sale deeds were executed at circle rate depicting tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also confronted with the statement of Shri Jagdev Singh recorded by the DDIT (Investigation) to this effect. Further, the statement of Shri Jagdev Singh Prop. of M/s J.P Property Dealers was also recorded on 21.3.2016 during the assessment proceedings. When confronted with the above, the assessee Shri Malkiat Singh could explain the source of investment of 42,37,500/- only , the amount which he claimed to have paid to Shri Mohinder Singh as sale consideration of the property, The AO accordingly added the remaining amount of ₹ 2,03,92,500/- into the income of the assessee Sh. Malkiat Singh as unexplained investment. Further, an amount of ₹ 27,45,500/- was added to the income of the assessee from the property dealing business of the assessee. It is pertinent to mention here that both the assessees namely Shri Mohinder Singh and Shri Malkiat Singh were assessed by different assessing officers. 6. Shri Malkiat Singh and Shri Mohinder Singh filed separate appeals before the Commissioner of Income Tax (Appeals). 7. The ld. CIT(A) in the case of Shri Mohinder Singh (seller) observed that he had received a sale consideration of ₹ 2,46,30,000/- from the sale of his agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord cash payment of ₹ 2,03,92,500/-. He, therefore, confirmed the aforesaid addition made by the AO in the hands of Shri Malkiat Singh as unexplained investment. In respect of the addition of ₹ 27,45,500/-, the ld. CIT(A) allowed the claim of expenses of ₹ 3,45,657/- and confirmed the remaining addition. 9. Being aggrieved by the aforesaid separate orders of the CIT(A), the Revenue has come in appeal agitating the action of the CIT(A) in deleting the addition in the hands of Shri Mohinder Singh, whereas, the assessee Shri Malkiat Singh has come in appeal agitating the confirmation of the aforesaid additions made by the AO. 10. We have heard the rival contentions and have also gone through the records. Shri Deepak Aggarwal, the Ld. counsel for the seller Shri Mohinder Singh has submitted that from the aforesaid facts, it was established that the actual sale consideration received was at ₹ 2,46,30,000/- whereas at the instance of the purchaser Shri Malkiat Singh, to avoid stamp duty payable to the government, the sale deeds were executed at very low amount of ₹ 42,37,500/-.That it was a common practice to execute and register the sale deeds at lower/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the following decisions: (i) Rajdeep Builders Vs. ACIT, Shimla [2012] 21 taxmann.com 254 (Chd.) (ii) Paramjit Singh v ITO [2010] 323 ITR 588 / 195 Taxman 273 (P&H) (iii) Subhash Chand v ACIT [2012] 49 SOT 732/18 taxmannn.com (iv) CIT Vs. Satinder Kumar [2011] 250 ITR 484 / [2002] 120 Taxman 470 of Punjab |& Haryana High Court. (v) Motors & General Stores (P) Ltd [1967] 66 ITR 692 of Punjab & Haryana High Court (vi) CIT Vs. P.V. Kalyansundaram [2006] 202 ITR 259 / 155 Taxman 454 of Madras High Court (vii) Ram Chandra Construction (P) Ltd v ACIT [2011] 131 ITD 71/ 11 taxman.com 415 (Agra)( TM) (viii) CIT Vs. Smt. K.C. Agnes [2003] 262 ITR 354 / 128 Taxman 848 12. Shri Ravi Sarangal, the Ld. DR, appearing in both the appeals on behalf of the department has strongly pressed for confirmation of addition in the hands of purchaser Shri Malkiat Singh. His main argument was that it is a common practice that the sale deeds in respect of agricultural lands are registered showing passing of less consideration as compared to the actual consideration paid so as to avoid the stamp duty. That this illegal practice is being adopted at the instance of the purchaser o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in the business of property dealer, however, he could not give the exact address of his office. Further, the address mentioned by his is of the same locality in which the office of Sh. Jagdev Singh of M/s J.P. Property Dealer exists. Shri Jagdev Singh had also admitted that he had received commission out of the aforesaid transactions. vii) The statement of Shri Mohinder Singh (Seller), Shri Jagdev Singh of J.P. Property Dealers and reply of Shri Jasveer Singh S/o Sh Mohinder Singh was confronted to the purchaser Shri Malkiat Singh but he could not bring any dent in the same. Even Shri Malkiat Singh did not choose to cross examine the aforesaid persons / witnesses. viii) Sh. Mohinder Singh (seller) was an agriculturist and he had no other known source of income. ix) It is highly improbable that Sh. Mohinder Singh was not aware of the market/ saleable price of his land. Even it is so assumed, he got the knowledge about it on the execution of first sale deed by Sh Malkiat Singh to third paries and could have resisted for the execution of next sale deed at a much lower price to Sh. Malkiat Singh. The facts and evidences as summed up above are sufficient to hold that the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of property Act, and Indian Registration Act, the sale transaction of an immovable property above the value of ₹ 100/- and above is required to be reduced into writing and registered. As per Section 17 of the Registration Act, 1908, all transactions that involve the sale of an immovable property for a value exceeding ₹ 100, should be registered. Any document that is mandatorily required to be registered but is not registered, cannot be admitted as evidence in any court of law. As per section 54 of the transfer of Property Act (IV of 1982), transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards can be made only by a registered instrument. Generally speaking, in a sale, the three requirements of law are that transfer of property by sale must take place with the help of a validly executed sale deed, by the transferor in writing, is properly attested, and registered. Unless, the all three conditions are complied with, no right passes from the seller to the buyer or in other words, there can be no sale. Further, as per section 91 of the Indian Evidence Act 1872, when terms of contract, grants for other dispositions of proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, held that no oral evidence or agreement contradicting / varying the terms of a documents could be offered. That the sale consideration disclosed in the sale deed has to be accepted and it cannot be contradicted by adducing any oral evidence. The reliance of the Ld. counsel on the above referred to other decisions is also in support of the above contention. 15. Now, in view of the above referred to various provisions of different statutes relating to the transfer of immovable property as well as in the light of the decision of Jurisdictional High Court in the case of Paramjit Singh (supra) and other decisions as referred to above, the question before us is as to whether any evidence can be admitted to prove that any amount was paid or received relating to the transfer of immovable property outside the written and registered sale deed of that property?; The answer will be 'No' as the same will constitute an evidence varying the terms of the written and registered contract. Suppose, the alleged sale deeds are cancelled for any reason or by the intervention of the Court, whether the purchaser will be entitled to refund of any other amount except that has been depicted in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being land revenue authority and the second income tax revenue authority. In our view, in such circumstances, both seller and purchaser are estopped from their act and conduct to take such a self-contradictory plea. Not only the earlier but the later authorities also are the public officers appointed for the collection of taxes contributing to the public exchequer (may be of the State or of the Union) and a person having represented the factum of the transaction in a particular manner at one stage to a public officer and getting a wrongful benefit, in our view, is estopped to deny the same to the subsequent public authority, both authorities being employee and representative of the government. The principle of estoppel in the light of the provisions of section 115 of the Evidence Act gets attracted in such a case. Even otherwise, recognizing such a transaction will amount to overriding the provisions of Transfer of Property Act and Indian Registration Act. In view of the above discussion, it can be safely held that not only legally but also ethically and morally, the parties to a registered document are not allowed to deny the terms of the document until and unless the very validit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties to the transaction i.e. the seller and the purchaser had made to believe not only the public authority but the public at large that the transaction relating to purchase / sale of land between them was settled at a particular consideration, subsequently they are estopped from their act and conduct to plead that the actual consideration was at variance of the earlier representation. The plea on behalf of the seller that he had agreed to get the sale deed registered at a lower rate at the instance of the purchaser is of no help to him. He has been a party to the conspiracy resulting into revenue loss to the state exchequer. Even, it cannot be said that he had not got any benefit by falsely representing about the sale consideration. If, the purchaser had to pay higher stamp duty, then it accordingly will go on to reduce the sale consideration / amount payable to the seller as the purchaser takes into consideration the total amount which he would have to shell out of his pocket i.e. the sale consideration as well as stamp duty and the other charges. 19. Now, once it is held that the sale consideration is to be taken as per the registered document, what will be the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a complaint to the registering authority that the sale deed has bene registered at a value much below the amount, which he actually received, he deposited the entire amount in the bank and voluntarily filed return. The Tribunal under the circumstances held that the seller had explained the source of the deposits which was upheld by the Hon'ble High Court. In the case in hand also, as observed above, the assessee has been able to prove the source of the amount found in his possession. However, the other facts like that the assessee in that case as an honest citizen had made a compliant to the registering authority to register the sale deed at actual price and deposited the entire amount in the bank, are missing. In the case in hand, the amount was recovered from the possession of Shri Mohinder Singh, assessee by the Police authorities. The assessee has been a partner in the conspiracy to falsely represent about the sale consideration to the registration authorities and thereby resulting into payment of less stamp duty, of which the assessee, as discussed above, has also reaped the consequential benefits. Moreover, the question as to the nature of receipt and its taxability has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Singh (seller) on a later date. However, this fact has been ignored by the lower authorities. We, therefore, remand the matter to the file of the AO to examine this limited aspect of quantifying the additions required to be made to the income of Sh. Malkiat Singh. It is made clear that no other issue or aspect will be looked into at the end of the AO. 23. The other grounds taken in his appeal by Sh. Malkiat Singh regarding the confirmation of addition of ₹ 23,99,343/- has not been pressed, the same is accordingly dismissed as not pressed. Subject to above observations, the appeal of the assessee Malkiat Singh is treated as partly allowed for statistical purposes. Now coming to the penalty appeal, ITA No.666/Chd/2016: 24. The revenue in this appeal has agitated against the action of the Ld. CIT(A) in deleting the penalty levied by the Assessing officer on the assessee Mohinder Singh (seller) u/s 271(1)(c) of the Income Tax Act. 25. Pursuant to the additions made by the Assessing officer into the income of the assessee Mohinder Singh, holding that he had failed to disclose the source of the amount seized from him which was over and above the sale consideration mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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