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TMI Blog2021 (10) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sale deed cannot be summarily dismissed as evidence when juxtaposed with the oral statement alone that too only of one of the parties to the transaction even when made on oath. The statement, to carry weight as evidence needs to be supported with other evidences. The statement at best raises a suspicion about the consideration exchanged in the transaction which should prompt further inquiries, but oral statement even if recorded on oath alone is not sufficient to contradict/displace a duly registered documentary evidence. We agree with the Ld.Counsel for the assessee that the conclusion of the AO that the excess consideration was received, was based on mere surmises and lacked being backed by any evidence documentary or otherwise of any sort. Thus approach of the revenue authorities in treating the oral statement of the searched person as sacrosanct in total disregard to the registered documentary evidence available, is not in accordance with law and the addition made, therefore, by holding that the surplus consideration was received in the impugned transaction in the hands of the assessee is, therefore, directed to be deleted. Ground of appeal raised by the assessee allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Ground Nos.2 and 4, it was contended, related to the issue of addition made on account of undisclosed capital gain amounting to ₹ 3,75,000/-. Drawing our attention to the facts of the case, the Ld.Counsel for the assessee pointed out that during the course of search and seizure operation u/s 132 of the Act carried out on the residential premises of Shri Surinder Singh Bindra, who was the assessee s brother, certain documents relating to the assessee were found. Accordingly, proceedings u/s 153C of the Act were initiated on the assessee and one of the additions made related to alleged undisclosed capital gain on the sale of land amounting to ₹ 3,75,000/-. The AO, it was pointed out, noted that one of the documents seized during search, being documents Nos.62 to 86 of Annexure A-12, related to exchange of old house No.99-B, South Model Gram, Ludhiana with residential plot measuring 326 sq. yd. adjoining Bombay Dyeing Showroom at National Road, Ludhiana. The AO noted that when Shri Surinder Singh Bindra was confronted with the said document, he recorded his statement on oath dated 20.11.2017 stating that the old house exchanged, was co-owned by himself, his wife, his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een considered. The AR has submitted that the addition has been made only on the basis of statement rather than on conclusive evidence. It is further mentioned that during the search seizure, no documentary evidence was found which may prove that the assessee has sold the property at ₹ 83 lacs and received the difference payment of ₹ 20 lacs over and above the registry amount and contended that the original agreement was found with regard to the above exchange of property and filed a copy of the same. The AR has argued that the admission or confession may be strong piece of evidence but it is not conclusive evidence and veracity of such evidence can be judged viz a viz the material evidence and obtaining circumstances of the case. It is also submitted that the AO did not make any effort to crossexamine the actual sale price and inference of the AO that the assessee had received excess money of ₹ 15 lacs was based on suspicion and surmises. Here it is pertinent to mention that during the post search investigation, the relevant document seized at Page no. 62 to 86 of Annexure A-12, were confronted and in the statement dated 20.11.2017, it was admitted that the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in the sale consideration as stated by Shri Surinder Singh Bindra and as recorded in the registered sale deed, was done by the AO. On the contrary, we find, he merely jumped on the oral statement of Shri Surinder Singh Bindra taking it to be a solemn truth merely because it was a statement recorded on oath, totally disregarding the registered documentary evidence being the sale deed. A registered sale deed cannot be summarily dismissed as evidence when juxtaposed with the oral statement alone that too only of one of the parties to the transaction even when made on oath. The statement, to carry weight as evidence needs to be supported with other evidences. The statement at best raises a suspicion about the consideration exchanged in the transaction which should prompt further inquiries, but oral statement even if recorded on oath alone is not sufficient to contradict/displace a duly registered documentary evidence. We agree with the Ld.Counsel for the assessee that the conclusion of the AO that the excess consideration was received, was based on mere surmises and lacked being backed by any evidence documentary or otherwise of any sort. In view of the same, we hold that the appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he various payments with reference to the above mentioned Annexure and year-wise bifurcation was also done. As per the AO, these were confronted to the assessee and asked why income @25% of the total receipts should not be estimated. The reply submitted is reproduced in the assessment order where it was reiterated that the documents were part and parcel of construction business activities done by her and that these annexures belonged to her. It was claimed that the profit on the same was already declared in the Income Tax Returns for the assessment years 2015-16 to 2018-19 and had given year-wise amount in the table. It was further argued by the assessee that the proposed profit @25% was too excessive and pleaded for application of 6% net profit, relying upon various case laws. The reply was considered by the AO but not found acceptable. The AO observed that after considering various judgments and the statement of Sh. S. S. Bindra (recorded on 11.12.2017} where he himself admitted that the assessee had earned profit @8 to 9 % on such contract receipts, it was fair reasonable to apply net profit rate of 10%. The AO calculated total receipts for the assessment year 2015-16 at ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard both the parties. The only issue to be decided is the applicability of net profit rate to the contract receipts of the assessee. 16. The argument of the Ld.Counsel for the assessee justifying application of a lower rate of net profit to the contract receipts as against 8% applied by the Ld.CIT(A), that courts have approved 4%/6% net profit rate on receipt of contractors, we do not find justified. The case laws cannot lay down the applicable net profit rates on business, being a factual matter to be determined on the facts of each case. In the case of Prabhat Kumar(supra) relied upon by the Ld.Counsel for the assessee, the Hon ble jurisdictional High court held so in so many words when rejecting the identical argument of the Revenue that a rate of 12% net profit stood approved by the Court in the case of Civil contractors. It was held that the facts of the case in hand were pertinent for applying the net profit rate and noting the accepted net profit rate of around 4%, the same was applied in the said case. 17. In the present case it is not denied that the husband of the assessee, who was the person searched wherein documents relating to his wife, the assessee before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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