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TMI Blog2024 (4) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged agreement to sell dated 5 March 2010. The original copy of the said document has not seen the light of the day. Further, there is no other evidence to support the veracity of the recitals made in the aforesaid alleged agreement. Therefore, under the facts of the present case, the same cannot be construed to be a sustainable ground for making addition to the income of the assessee. Decided in favour of assessee. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Appellant Through: Mr. Shlok Chandra, Sr.SC with Ms.Madhavi Shukla, Jr.SC, Ms. Priya Sarkar, Jr.SC and Mr. Ujjwal Jain, Adv. For the Respondent Through: Mr. Ved Jain with Mr. Nischay Kantoor, Advs. ORDER PER: PURUSHAINDRA KUMAR KAURAV, J. 1. These two appeals preferred by the Revenue are against the common impugned order dated 28 May 2019 passed by the Income Tax Appellate Tribunal [ ITAT ] in ITA No. 3643/Del/2018 and ITA No. 4398/Del/2018, whereby, while the appeal preferred by the Revenue has been dismissed, the appeal preferred by the assessee has been allowed. In both the appeals, proposed substantial questions of law are common and therefore, keeping in min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained addition of Rs. 1,37,00,000/-. The ITAT vide common order dated 28 May 2019 dismissed the appeal preferred by the Revenue and the appeal of the assessee was allowed. 7. As stated above, both the appeals have been decided by the impugned common order. The Revenue has challenged the order passed in both the appeals under Section 260A of the Act. The instant appeals propose the following common substantial question of law for our consideration:- A. Whether the photocopy of a document, some part of information/facts recorded on it found to be correct in verification, could be treated as a valid document or not in the absence of the original? 8. We have heard learned counsels appearing for the parties and perused the material available on record. 9. During the assessment proceedings, the assessee s stand was to the effect that the said land was purchased against a consideration of Rs. 2,00,00,000/-.The AO, on the other hand, while relying on the photocopy of the alleged agreement to sell, proceeded to make an addition treating the consideration to be Rs. 11,00,00,000/-. The AO held that the genuineness of the said document cannot be denied as the signatures of the relevant parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies. Therefore, it is presumed that the assessee has no explanation to offer in this regard. In view of the above facts, it is established that the property was sold for Rs. 11 /- crore. [Emphasis Supplied] 10. It is thus seen that the sole basis for addition of Rs. 9,00,00,000/- to the income of the assessee is the photocopy of the alleged agreement to sell which contains, inter alia the signatures of the assessee as a purchaser of the property, wherein, the sale consideration is shown to be Rs. 11,00,00,000/-. 11. The CIT(A) while placing reliance on the photocopy of the alleged agreement to sell concluded that the cash transaction of Rs. 1,37,00,000/- had taken place at the time of execution of the said agreement to sell i.e., on 5 March 2010. Therefore, an addition of a sum of Rs. 1,37,00,000/- is attributable to the income of the assessee only in the relevant AY. The balance amount was required to be paid at the time of execution of the sale deed which, admittedly, had taken place on 07 June 2010 and therefore, the said date does not fall in the concerned AY. The relevant paragraph is being reproduced herein below:- 5.2 Coming back to the impugned order, it is observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment has been made. In view of this fact, we are of the view that CIT (A) was correct in deleting addition of Rs. .63 Crores on this account. In the result, the appeal of the Revenue is dismissed. 13. Now coming to the appeal of the assessee which is regarding addition of Rs. 1.37 Crores sustained by the CIT (A). On going through the same, we note that issue here is the allegation of payment in cash for purchase of land on the basis of the alleged agreement to sell. The AO received a tax evasion petition along with the copy of agreement to sell. On the basis of this petition and the agreement to sell the AO had reopened the assessment u/s 147. The assessee in response thereto filed the return and submitted her replies. It was a contention of the assessee that she has not signed any such agreement to sell and this is a manipulated agreement by her husband who because of the strained relationship has implanted this document to harass her. The AO in order to verify the authenticity of this document issued summon to Mr. Rajiv Mehta the other co-owner but surprisingly while recording his statement, he did not even ask any question about the authenticity of the alleged agreement to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to sell and thus, we are of the view that the addition on the basis of such photocopy the authenticity of which has not been established, the same cannot be sustained. Accordingly, we direct the AO to delete the addition. [Emphasis Supplied] 13. The Hon ble Supreme Court in the case of S. Ganga Saran Sons (P) Ltd. v. ITO [(1981) 3 SCC 143] has held that the Income Tax Officer must rely upon relevant material to form a reason to believe escapement of income and such belief should not be arbitrary or irrational. 14. Further, this Court in the case of CIT v. Kulwant Rai [2007 SCC OnLine Del 1777], while relying on the decision of the Hon ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775], has opined that though tax assessment proceedings do not follow the strict rules of the Indian Evidence Act, 1872 but the assessment by the AO cannot be based on guess work and imagination. Rather, there must be something more than a mere suspicion to prove escapement of income. 15. In the case of CIT v. Moorti Devi [2010:DHC:4677-DB], the issue pertained to the addition on the basis of seizure of two different set of documents i.e., agreement to sell and sale d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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