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TMI Blog2019 (5) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO on account of unexplained investment in immovable property at Arya Nagar." 4. The assessee has filed the appeal on the following grounds : 1. "That the Learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding an addition of Rs. 50,00,000/- under section 69B of the Act. 1.1. That the Learned Commissioner of Income Tax (Appeals) while upholding the addition has overlooked documentary evidence placed on record by the appellant to show that the investment made by the assessee was duly explained out of the funds available with the appellant and therefore, addition sustained is not in accordance with law. 1.2. That the finding of the Learned Commissioner of Income Tax (Appeals) that "since amount of Rs. 50,00,000/- is admitted by the appellant to be paid, a reasonable conclusion can be made that such cash was never received back and forms part of the consideration" is factually and legally misconceived and therefore, untenable." 5. The facts of the case are that search and seizure operations under section 132 were carried out in the case of Smt. Kundan Singh belonging to Ashok Kumar Singh group on 18.10.2011. Following the search, notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was asked to furnish full details of the above transactions along with documentary evidences as under : (I) Date, amount, mode of payment of balance amount. (II) Date of execution of sale deed (III) Source of investment made 5.2. The assessee submitted before the A.O. that agreement to sell value of Rs. 297.87 lacs as per page no.A- 1/31-35 and pages 36-40 have not been executed by the assessee. These lands were purchased for Rs. 31 lakhs and Rs. 29 lakhs on 19.01.2009. The statement of Sh. Ashok Kumar Singh, Husband of Assessee was recorded on 16.03.2012 stating therein that the above seized paper found in search contain copy of agreement to sell executed with seller by the assessee for consideration of Rs. 2.97 crores each in respect of purchase of land measuring 1008 sq. yard baring part of Khasra No.31/07 and 31/14, village Mehrauli, New Delhi. It was further stated by him that deal could not be materialized since the sellers defrauded the buyer by stating the incorrect facts and the agreement to sell stands cancelled and void. But later on the same land was purchased by assessee in the same financial year. 5.3. The A.O. asked the assessee to furnish details of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a consideration of Rs. 2,.97 crores each for two properties for the land measuring 1008 sq. yards. It was also stated that the land falls in agriculture zone, hence, deal was cancelled because in the agricultural land, no construction could be raised. Ultimately, later on, the said agricultural land was purchased at fair market value of Rs. 60 lakhs in total for which sale deed have been executed. 5.5. The A.O. reproduced some part of the agreement and sale deed in the assessment order to show that cheque of Rs. 5 lakhs each mentioned in the agreement to sell is the same amount which is mentioned in the sale deed. Therefore, if the agreement was cancelled, the same two cheques could not be mentioned in the sale deed. A.O, therefore, noted that there is misrepresentation and suppression of the facts with regard to value of the property. The A.O. noted that initially agreement to sell was executed between assessee and Shri Arvind Chandela, Shri Sandeep Kumar Singh through which, value was fixed at Rs. 2.97 crores each, but, later on, sale deed have been executed for lesser amount. Therefore, it is an afterthought just to avoid the liability of the tax. The A.O. therefore, foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is recorded in the sale deed. It is, thus, evident that the above sellers have denied receipt of any sum stated in the agreement and thus accepted that transactions of sale have been recorded through sale deeds for a sum of Rs. 60 lakhs only. The assessee relied upon decision of the Hon'ble Delhi High Court in the case of CIT vs. Ved Prakash 305 ITR 245 in which it was held that "no addition is tenable in view of non-availability of the corroborative evidence. In view of these facts, it was necessary for A.O. to bring some corroborative evidences on record before making the addition against the assessee. The sale deed clearly shows that amount is paid by assessee through banking channel and thus, the contents of sale deed cannot be disregarded. In support of this proposition, assessee relied upon Judgment of Hon'ble Kerala High Court in the case of CIT vs. Smt. K.C. Agnes (2003) 262 ITR 354 (Kerala), Judgment of Hon'ble Punjab & Haryana High Court in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588 (P & H), Judgment of Hon'ble Delhi High Court in the case of CIT vs. Shakuntala Devi 316 ITR 46 (Del.), Judgment of Hon'ble Supreme Court in the case of CIT, Salem vs. P.V. Kal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. The seized agreements to sell are no doubt evidence indicating the agreed consideration. Tire question here, however, is whether such agreement was acted upon and the agreed amount was actually paid to the two sellers of the properties purchased by the appellant. It is extremely relevant that the search was conducted on 18.10.2011 nearly three years after the agreements to sell and registration of properties. No statement was recorded in the matter at the time of search when the evidence was first collected. The first statement in the matter was recorded in the post search inquiry by the ADIT on 16.03.2012, wherein in his answer to question no.4 Sh. Ashok Kumar Singh, husband of the appellant, stated that the said agreements dated 03.10.2008 were cancelled and the advance given to the sellers was received back. This fact the AO has disbelieved for the reason that the said statement was contrary to the fact that these properties had been finally registered in the name of the appellant soon thereafter on 19.01.2009. On being pointed out about this contradiction, the appellant vide here reply dated 24.03.2014 submitted before the AO that as no evidence was found to indicate any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts specifically mentioned in the agreements to sell and also mentioned in the registered sale deeds was paid by the appellant to the two sellers. However, the agreements to sell, Appeal No.173/14-15 though denied by the two sellers, are admitted by the appellant. Therefore, the fact at the amount of Rs. 50,00,000/- was paid in cash (Rs.25,00,000/- each) stands admitted. The husband of the appellant claimed before ADIT that the agreements were not acted upon and the amounts advanced were received back. Fact remains that the agreements were eventually acted upon and the sale deeds were duly registered. Fact also remains that the amounts of Rs. 5,00,000/- each paid by cheques mentioned as in the agreements to sell were also mentioned in the registered sale deeds and formed part of the consideration paid by the appellant. Thus, admittedly, these amounts of Rs. 5,00,000/- each were never received back by the appellant and form part of the final payment. In all, the consideration admitted paid by the appellant amounted to Rs. 25,00,000/- each in cash as per the agreements to sell; Rs. 5,00,000/- each by cheques as per the agreements to sell; and additional Rs. 25,00,000/- eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verted. The details of payments made by cheque or cash were furnished during the assessment proceedings also. There is no evidence to establish that the properties were purchased out of the unaccounted income/source. No evidence have been brought on record, if the said properties were purchased through unaccounted income. The Ld. CIT(A), therefore, held that assessee has explained the investment in the properties at Aya Nagar through known source of income, therefore, addition of Rs. 14,55,000/- was deleted. Revenue is in appeal on this Ground. 9. The Ld. D.R. relied upon the Order of the A.O. He has referred to PB-57 which is first agreement between Shri Aravind Chandela and assessee. PB-63 is another agreement to sell between Shri Sandeep Kumar Singh and assessee in which sale consideration of Rs. 2,97,87,408/- each have been mentioned. PB-69 is Sale Deed Dated 19th June, 2009 between Shri Aravind Chandela and Assessee for a sum of Rs. 31 lakhs. PB-81 is second Sale Deed Dated 19.06.2009 between Shri Sandeep Kumar Singh and Assessee for a sum of Rs. 29 lakhs in respect of the same property. The Ld. D.R. pointed-out from the sale deeds that cheque of Rs. 5 lakhs each Dated 15th O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. ITO, Ward-5, Palanpur (2018) 97 taxmann.com 570 (Ahd.Tribunal). The Ld. D.R, therefore, submitted that Ld. CIT(A) was not justified in deleting the addition in respect of the amount mentioned in the agreements to sell. The Ld. D.R. as regards addition deleted by Ld. CIT(A) of investment made in Aya Nagar plots relied upon order of the A.O. 10. On the other hand, Learned Counsel for the Assessee, reiterated the submissions made before the authorities below and submitted that at the time of search no statement of assessee or any other person have been recorded. The statement of husband of the assessee was recorded much later 16th March, 2012. PB-49 and 50 are the part of statement of husband of the assessee, in which, he has explained that since it was agricultural lands in agriculture zone, in which, no construction could be raised, therefore, seller have defrauded the assessee. Hence, agreement was cancelled. No evidence of any payment over and above what is recorded in the sale deed was found during the course of search. He has relied upon same Judgments which were relied upon before Ld. CIT(A). He has submitted that circle rate of the property in question is much lower as ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8th November, 2008. However, during the course of search, no evidence has been found recovered or seized, if the above agreement to sell were acted upon by the parties or that the transaction relating to the agreements to sell have been materialized between the parties. No evidence was also found during the course of search, if any, amount mentioned in both the agreements to sell have been paid by the assessee to the seller. The agreements to sell have expired on 18th November 2008. Thus, the contention of assessee is correct that the agreements to sell have not been acted upon by the parties and no payment over and above what is mentioned in the sale deed have been paid by the assessee. The assessee explained that the statement of her husband was recorded on 16th March, 2012, in which he has clearly explained that since it was an agricultural land falling in agricultural zone, in which, no construction could have been raised, therefore, these agreements to sell were cancelled. The explanation of assessee was not found to be incorrect or false. It may also be noted here that during the course of search no statement of the assessee was recorded to get her explanation in this regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was only to escape payment of tax liabilities and added Rs. 50 lakhs in the hands of the assessee under section 69 of the Income-tax Act, 1961. The Commissioner (Appeals) as well as the Tribunal held that there was not enough evidence to add the amount in the hands of the assessee. On appeal : Held, dismissing the appeal, that the assessee had stated that there was no transfer of money between the assessee, R and M and they had denied the receipt of any money from the assessee. In the face of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner (Appeals) as well as the Tribunal had come to the conclusion that there was no such material on record. The Assessing Officer relied on certain other transactions entered into by the assessee with R and M for drawing a presumption in respect of the transfer of money but the Tribunal rightly held that those were independent transactions and had nothing to do with the memorandums of understanding. No substantial question of law arose." 11.2. The Hon'ble Madras High Court in the case of CIT vs. P.V. Kalyanasundaram (2006) 282 ITR 259 (Madras) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the sale deed is not correct. In the instant case, in the assessment of the purchaser, it was finally found that the amount was received only at Rs. 8,000 per cent. Taking all these matters into consideration, the Tribunal held that the property was sold at the rate of Rs. 8,000 per cent. Thus, the Tribunal, on the basis of the facts and circumstances of the case and on the appreciation of evidence, came to the conclusion that Rs. 12,951 was not the amount for which the property was sold. There is no rule that the amount shown in the receipt is the-actual amount paid. Accordingly, the amount stated in the sale deed was the correct amount unless there were circumstances to ignore the same. In the above view of the matter, the questions were answered in favour of the assessee and against the revenue." 11.5. The Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588 (P&H) held as under : "Whether in view of settled principle that no oral evidence is admissible once documents contain all terms and conditions, sale consideration disclosed in sale deed in instant case was to be accepted and no oral evidence could have been adduced to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here that the assessee explained before Ld. CIT(A) that whatever amount was paid initially to the seller was duly explained through the cash book maintained by the assessee and accepted in the impugned assessment. Therefore, these facts would show that the matter requires reconsideration at the level of the Ld. CIT(A) with regard to addition of Rs. 50 lakhs. In view of the above discussion, we do not find any justification to interfere with the orders of the Ld. CIT(A) in deleting the addition of Rs. 4,85,74,816/-. The Departmental Appeal is, thus, dismissed. However, as regards addition of Rs. 50 lakhs maintained by the Ld. CIT(A), we set aside the order of the Ld. CIT(A) and restore this issue to his file with a direction to re-decide the addition of Rs. 50 lakhs in the light of explanation of assessee by verifying the fact from the cash book produced by the assessee. The Ld. CIT(A) shall give reasonable, sufficient opportunity of being heard to the assessee. 14. In the result, Departmental Appeal on Ground Nos. 1 and 2 is dismissed, whereas appeal of Assessee allowed for statistical purposes. 15. As regards Ground No.3 in Departmental Appeal with regard to deletion of addit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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