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TMI Blog2022 (3) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... en in an attempt to prove that the consideration disclosed in the said registered document had not changed hands. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Punjab Haryana in the case of Paramjit Singh [ 2010 (2) TMI 262 - PUNJAB HARYANA HIGH COURT] - We, thus, in terms of our aforesaid observations are of the considered view, that the sale consideration qua the transaction of sale of land in question, as disclosed in the registered sale deed, dated 08.10.2008, could not have been dislodged by the A.O on the basis of the contents of an uncertified copy of an agreement to sell , dated 25.02.2008, which on the basis of our aforesaid observations would not even be in the nature of a secondary evidence within the meaning of Sec. 63 of the Indian Evidence Act, 1872. Deposits in bank account of assessee's husband - The observations of the A.O that the cash deposits in the bank accounts of Shri. Kulwant singh (Assessee's husband) were sourced from the on-money that was received by the assessee, being devoid and bereft of any substance and, being nothing short of an allegation in the thin air, cannot be subscribed on our part. We, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dr. M. L. Meena, Accountant Member For the Appellant : Sh. Surinder Mahajan, CA For the Respondent : Sh. Sunil Gautam, CIT-DR ORDER PER BENCH : The present appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals)-2, Jalandhar, dated 19.07.2017, which in turn arises from the orders passed by the A.O u/ss. 147/143(3) of the Income-Tax Act, 1961 (for short Act ), dated 30.03.2016 for A.Y 2008-09 AND dated 30.12.2016 for Assessment Year 2009-10. As the issues involved in the present appeals are inextricably interlinked or in fact interwoven, therefore, the respective appeals are being taken up and disposed off by way of a common order. We shall first take up the appeal filed by the assessee for A.Y 2008-09, wherein the impugned order has been assailed before us on the following grounds : 1. That on the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) {C1T(A)} has grossly erred in law in rejecting ground of appeal of the assessee that impugned assessment framed u/s 143(3)/147 of the Act is without assumption of valid jurisdiction and as such is illegal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dispositions of property has been reduced to the form of a documents then no evidence is permissible to be given in proof of any such terms of such grant or disposition of the property except the document itself or the secondary evidence thereof 6. That while confirming addition, learned CIT(A) has relied upon cash deposits made in bank account of husband of the assessee in A.Y. 2008- 09. Reliance placed on cash deposits in the account of husband of the assessee is illegal and bad in law since: a). No query on cash deposits in saving bank account of the husband of the assessee was ever made during the assessment proceedings. b). During the appeal proceedings, copy of assessment order u/s 143(3) of the Act in the case of Kulwant Singh husband of the assessee was filed to prove genuineness of cash deposits in his saving account which has not been considered by learned CIT(A). c). Without prejudice to issues raised in (a) (b) above, even otherwise also no adverse inference can be drawn in the case of the assessee since her husband is independent assessee. 7. That observation of Id. CIT(A) in para 4.9 of the appellate order while confirming addition that signatures o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, however, the sale deed was executed not in his favour, but in favour of certain third parties, the A.O held a belief that the aforesaid consideration of ₹ 1.50 crore (supra) having been received by the assessee without any consideration was liable to be assessed in her hands u/s 56(2)(vi) of the Act. Backed by the aforesaid facts, the A.O holding a belief that the income of ₹ 1.50 crore (supra) of the assessee that was chargeable to tax had escaped assessment, thus, reopened his case u/s 147 of the Act. Objections raised by the assessee as regards the validity of the reassessment proceedings were disposed off by the A.O vide his order dated 05.06.2015. Rebutting the adverse inferences that the A.O had sought to draw on the basis of the aforesaid agreement to sell (supra), the assessee dubbed the same as a forged document, and claimed to have sold the land in question vide a registered sale deed, dated 08.10.2008. However, the A.O was not persuaded to subscribe to the aforesaid claim of the assessee. Observing, that the witnesses to the agreement to sell , viz. S/sh. Rishikesh Verma and Baldev Raj (since deceased) had in the course of the proceedings before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) that was made by him, viz. (i). the A.O had though reopened the assessment on the ground that an amount of ₹ 1.50 crore (supra) received by the assessee from Sh. Surjit Singh (supra) without any consideration was liable to be assessed u/s 56(2)(vi) of the Act, however, in the absence of any addition having been made as regards the reason on the basis of which the case of the assessee was reopened, the assessment framed by him u/s 147/143(3), dated 30.03.2016 was liable to be quashed; (ii). that the addition made as regards the alleged on-money of ₹ 1.50 crore (supra) received by the assessee on sale of her land in question could not have been assessed u/s 69 of the Act; (iii). that no adverse inferences could have validly been drawn on the basis of a photocopy of the agreement to sell ; (iv). that the assessee despite persistent requests had not been confronted with the original agreement to sell in question; (v). that the A.O in his remand report had admitted that though he had received from the Dy. DIT(Inv.), Ludhiana a copy of the agreement to sell , dated 25.02.2008, while for the Dy. DIT(Inv.), Ludhiana in his letter dated 16.12.2016 had informed the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 4.9 Having considered the detailed evidence placed on record, I find that reasons recorded by the AO for initiation of reassessment proceedings are in conformity with the evidence placed on record. I also find that is an accepted fact that sale of property has been made by the appellant. The appellant has state that no amount was received under the agreement to sell as neither the property was sold to the person with whom agreement was entered into nor any original agreement to sell could be produced by the A.O. It is a matter of common knowledge that once an agreement to sell is entered into then a period of 3 to 6 months is provided under that agreement for payment of remaining consideration and execution of sale deed. During this period the person who has paid the biana retains the option under the agreement to register the property in the name of any person. In this case also, the position is similar as per the evidence available on record. The signatures of the appellant have been confirmed by the husband of the appellant in his statement and sale consideration has been received by the appellant. 4.10 It is also a common knowledge that malaise of on-money is widely pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the registered sale deed, dated 08.10.2008. At this stage, we may herein observe, that as to what is the source of the copy of the agreement to sell that was made available to the A.O by the Dy. DIT (Inv.), Ludhiana, is neither discernible from the records, nor anything in support thereof on a specific query that was raised by the bench, as regards the same, was brought to our notice by the ld. D.R. Be that as it may, it is an admitted fact that the agreement to sell , dated 25.02.2008 is not a document that was found in possession or control of the assessee in the course of any search or survey proceedings conducted upon her, which would have otherwise triggered the presumption as regards the correctness or truthfulness of the contents thereof as provided in clause (ii) of sub-section (1) to Sec. 292C or sub-section (4A) of Sec. 132 of the Act. As is discernible from the records, we find that the A.O in his remand report that was filed in the course of the proceedings before the CIT(A), had fairly admitted that he had only received a copy of the agreement to sell , dated 25.02.2008 from the Dy. DIT (Inv.), Ludhiana, and the latter on a specific request by him vide his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion disclosed in the said registered document had not changed hands. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Punjab Haryana in the case of Paramjit Singh Vs. ITO (2010) 323 ITR 588 (P H). We, thus, in terms of our aforesaid observations are of the considered view, that the sale consideration qua the transaction of sale of land in question, as disclosed in the registered sale deed, dated 08.10.2008, could not have been dislodged by the A.O on the basis of the contents of an uncertified copy of an agreement to sell , dated 25.02.2008, which on the basis of our aforesaid observations would not even be in the nature of a secondary evidence within the meaning of Sec. 63 of the Indian Evidence Act, 1872. 5. At the same time, we shall look into the other circumstantial evidences/documents, as well as observations of the lower authorities on the basis of which they have tried to support the adverse inferences qua the sale transaction in question. As observed by us hereinabove, one of the issue that had weighed in the mind of the A.O for concluding that the assessee had executed the agreement to sell , dated 25.02.2008 was that the two witnesses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O in acting upon the statement of a third party that was recorded at the back of the assessee, without affording a cross-examination to the assessee despite specific requests was not sustainable, viz. (i). CIT Vs. Sanjeev Kumar Jain (2009) 77 CCH 53 (P H); (ii). Kishinchand Chellaram Vs. CIT (1980) 48 CCH 716 (SC); (iii). Sona Electric Company Vs. CIT (1984) 52 CCH 103 (Del); and (iv). CIT Vs. Pradeep Kumar Gupta (2006) 74 CCH 975 (Del). In the backdrop of our aforesaid observations, we are of a strong conviction, that the statements of the aforesaid persons which were recorded at the back of the assessee, could not have been acted upon by the A.O for drawing of adverse inferences in the hands of the assessee, i.e, without facilitating the necessary cross-examination to the assessee despite his specific requests for the same. Admittedly, one of the witness, viz. Shri. Baldev Raj Taneja had expired on 30.05.2015, i.e, in the course of the assessment proceedings, therefore, there could have been no occasion for the A.O to have facilitated his cross-examination. But then, in so far the other witness, viz. Shri. Rishikesh Verma (supra) is concerned, we are of the considered view, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, viz. Shri. Kulwant Singh, we would not shirk to observe, is nothing short of a baseless assumption, which we are afraid had been attempted to be triggered to give effect to a predetermined view. As observed by us hereinabove, the cash deposits in the bank accounts of Shri. Kulwant Singh (supra), a regular income-tax assessee, as had been referred by the A.O in the body of the assessment order are his duly disclosed bank accounts that were accounted for by him in his personal books of accounts. In fact, as had been brought to our notice by the ld. A.R, and not rebutted by the ld. D.R, the case of Shri. Kulwant Singh (supra) for the year under consideration was selected for scrutiny assessment wherein his returned income was accepted as such. Backed by the aforesaid factual matrix, we are of the considered view, that the observations of the A.O that the cash deposits in the bank accounts of Shri. Kulwant singh (supra) were sourced from the on-money that was received by the assessee, being devoid and bereft of any substance and, being nothing short of an allegation in the thin air, cannot be subscribed on our part. We, thus, in the backdrop of our aforesaid deliberations vacate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather, had put the assessee in a situation where she was required to disprove the agreement to sell , dated 25.02.2008. i.e, a dumb document and its contents thereof. In our considered view, the support drawn by the assessee from, viz. the circle rate of the property in question that was prevailing at the time of execution of the sale deed; and the rate at which an adjoining piece of land during the relevant period was sold, undeniably had a strong bearing in not only proving that the land in question was sold as per the consideration disclosed in the registered sale deed, but was also indispensably instrumental in proving the falsity of the agreement to sell , dated 25.02.2008, and the contents thereof. We, thus, are not inclined to subscribe to the view taken by the lower authorities that the aforesaid circle rate and the comparative sale transaction had no bearing on the adjudication of the issue in hand. 8. We shall now deal with the claim of the assesee as was raised before the lower authorities, i.e, now when no adverse inferences had been drawn by the department in the case of the alleged purchaser, viz. Sh. Surjit Singh, and in fact the reassessment proceedings that we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts or the explanation offered by him is not, in the opinion of the Assessing Officer satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. As stated by the ld. A.R, and rightly so, as Sec. 69 caters to unexplained investments of an assessee which are not recorded in his books of accounts, if any, maintained by him for any source of income, therefore, the same could not have been triggered for bringing to tax the alleged onmoney stated to have been received by the assessee on sale of land in question. In our considered view, receipt of on-money cannot be brought within the meaning of unexplained investment. But then, on a careful perusal of the assessment order, we find, that the A.O had triggered the provisions of Sec. 69, for the reason, that the assessee had deposited the on-money in the bank accounts of her husband, viz. Shri. Kulwant Singh. However, as we have already vacated the view taken by the lower authorities that the alleged amount of on-money received by the assessee was parked in the bank accounts of her husband, viz. Shri. Kulwant Singh, therefore, the applicability of Sec. 69 of the Act is ousted on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and alleged witnesses were not made available for cross examination though request to this effect was made. 4. That on the facts and circumstances of the case, learned CIT(A) has grossly erred in not considering submission of the assessee that addition made is bad in law since no addition has been made in the case of alleged purchaser Surjit Singh whose case was also re opened for A.Y. 2008-09 and proceedings initiated u/s 147 of the Act were filed without any adverse inference. 5. That on the facts and circumstances of the case, learned CIT(A) has grossly erred in law while confirming the addition of ₹ 5,33,21,805/- made by learned assessing officer based on photocopy of an agreement. Addition confirmed on the basis of photocopy of agreement is opposed to following judgments: a) Honorable Supreme Court Judgment in the case of Smt. J. Yashodha vs. Smt. K. Shobha Rani dated 19.04.2007 SLP (C) No. 12625 of 2005 wherein it has been held that photocopy of a document is not admissible evidence in terms of Indian Evidence Act, 1872. b)Hon ble Punjab and Haryana High Court Judgment in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588: 236 CTR 466 (P H) wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year under the head Capital Gains . 9. That on the facts and circumstances of the case, addition confirmed by Id. CIT(A) is illegal and bad in law since Id. CIT(A) in the assessment year 2008- 09 has confirmed addition of ₹ 1,50,00,000/- u/s 69 of the Act, being alleged advance received against alleged agreement to sell and the same has been reduced from the alleged capital gain on account of alleged agreement and this was never case of the assessing officer that transaction cannot be taxed in one year u/s 69 of the Act and in the next year under the head Capital Gains . 10. The assessee requests for leave to add or annex any other grounds of appeal before the appeal is heard or disposed off. 13. Succinctly stated, the assessee had filed her return of income for A.Y 2009-10 on 30.03.2010, declaring an income of ₹ 4,31,880/- a/w agriculture income of ₹ 8,83,880. Information was received by the A.O from the Dy. Director of Income-tax (Investigation), Ludhiana, that the assessee had executed an agreement to sell , dated 25.02.2008 with one Shri. Surjit Singh S/o. Sh. Mohan Singh, R/o. 1548-D, Model Town (Extension), Ludhiana, wherein she had agreed to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the land in question was executed on 08.10.2008, i.e, within the stipulated time period within which the same was to be executed as per the agreement to sell , i.e, latest by 03.12.2008, also did weigh in the mind of the A.O for rejecting the claim of the assessee that the same was a dumb document. In so far the routing of the alleged unaccounted sale consideration, i.e, on-money was concerned, the A.O was of the view that the same was deposited in the bank accounts of the assessee s husband, viz. Shri. Kulwant Singh, a property dealer by profession, i.e (i). A/c No. 0165201900016 (Joint A/c of Sh. Kulwant Singh a/w his father); (ii). A/c No. 0165101023514 with Canara Bank, Branch : BMC Chowk, Jalandhar; (iii). A/c No. 0165201900013 with Canara Bank, Branch : BMC Chowk, Jalandhar; (iv). A/c No. 0165201900014 with Canara Bank, Branch : BMC Chowk, Jalandhar; (v). A/c No. 0165201900016 with Canara Bank, Branch : BMC Chowk, Jalandhar. In order to fortify his conviction that the funds of the assessee were being managed by her husband, viz. Sh. Kulwant Singh, the A.O had tried to draw support from the fact that a FDR drawn in the name of the assessee was sourced out of the amount tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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