Income Tax Appellate Tribunal - Chandigarh
Rajdeep Builders, , Shimla vs Assessee on 19 April, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'B' CHANDIGARH
BEFORE SHRI H.L.KARWA, VICE PRESIDENT
AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER
ITA No.666/CHD/2010
Assessment Year: 2004-05
M/s Rajdeep Builders, V ACIT, Circle,
Rajdeep Apartments, Shimla.
Strawberry Hills,
Chhota Shimla.
PAN: AAGFR-7658P
(Appellant) (Respondent)
Appellant by: Shri Vishal Mohan
Respondent by : Shri Manjit Singh
Date of Hearing : 19.04.2012
Date of Pronouncement : 27.04.2012
ORDER
PER MEHAR SINGH, AM
The present appeal has been filed by the assessee appellant against the order passed by the CI T(A) on 5.11.2009 u/s 250(6) of the Income-tax Act,1961 (in short 'the Act'). In the sole ground of appeal, raised by the assessee, it is contended that in the facts and circumstances of the case, ld. CIT(A) is not justified in sustaining the addition of Rs.4,00,000/- on the basis of statement of Shri Subhash Sharma, recorded at the time of survey, though subsequently the same was retracted in the cross examination.
2. The assessee appellant filed application for condonation of delay in filing the appeal, supported by affidavit dated 13.05.2010. Ld. 'AR', contended that the order of CI T(A) was received on 19.11.2009 and, hence, 2 the last date for filing appeal expired on 18.05.2010. In the application for condonation of delay, it is contended that working partner of the firm, Shri R.K.Khosla is suffering from cancer and due to his prolonged illness, he could not attend to the business of his firm. He came to know about passing of the order by CI T(A) on 01.05.2010. He, took steps to get the said appeal filed immediately. The medical treatment chart of Shri R.K.Khosla is enclosed as evidence. It was, further, contended that delay in filing the appeal is not willful, nor intentional but occurred due to reasons of the illness. Therefore, delay deserves to be condoned. Partner Shri R.K.Khosla, has also filed affidavit to this effect.
2(i) Ld. 'DR', however contended that having regard to the circumstances of the case, the condonation of delay may be considered.
2(ii) After careful perusal of the documentary evidence, in the form of Out Patient Ticket from Post Graduate Institute of Medical Education and Research, Chandigarh, filed by the assessee appellant and the contention raised in the application, we are of the considered opinion that delay is not intentional but, due to compelling circumstances of illness. It is well settled proposition of law that substantive justice should not be scuttled at the threshold stage, on technical grounds. Further, the fatal illness of cancer falls beyond the control of human beings. Therefore, having regard to 3 the fact-situation of the case, we are of the opinion that there exists sufficient cause for non-filing of the appeal, within the prescribed time. Accordingly, delay is condoned.
3. In the course of present appellate proceedings, ld. 'AR' contended that no addition can be made purely on the basis of statement without its corroboration by supporting evidences. It was argued by ld. 'AR' that the statement of Shri Subhash Sharma recorded on 3.9.2004, was retracted by him, in the cross- examination conducted on 7.11.2006, in the course of assessment proceedings by the DCI T, Circle Shimla. The ld. 'AR', further, placed reliance on the decision, in the case of K.P.Varghese V I TO 131 I TR 597 (S.C), wherein it has been held that no addition can be made, on the plea of understatement of sale consideration, unless it is established that physically money has been received over and above the declared consideration. 3(i). Ld. 'DR', on the other hand, supported the assessment order and the appellate order.
4. The brief and undisputed facts, as culled out from the relevant record, are that the assessee is a firm engaged in the business of construction of flats at Khalini, Shimla. A survey was conducted by the Income Tax Department u/s 133A of the Act on 02.09.2004. The assessee made a surrender of Rs.3 lacs, for the assessment year under consideration. The AO, on the basis of the statement of one of the purchasers, Shri 4 Subhash Sharma, recorded on 3.9.2004, made addition of Rs. 4 lacs, as unexplained income of the assessee. In the impugned statement, Shri Subhash sharma stated that he made payment of Rs.7 lacs to M/s Rajdeep Builders, over and above the sale consideration of Rs. 9 lacs, declared in the Sale Deed executed, on 1.5.2003, in pursuance of the 'Agreement to sell' dated 28.01.2003. The AO, gave the credit of Rs.3 lacs, surrendered by the assessee, at the time of survey operations and the balance amount of Rs.4 lacs was treated, as unexplained income of the assessee, which is in dispute in the present appeal. In the cross- examination, Shri Subhash Sharma, on 7.11.2006, clearly stated in response to question No.1 "No, I do not conf irm the f acts stated by him fully, as given in my above ref erred statement on 3.9.2004." In response to question No.2, in the course of cross-examination, Shri Subhash Sharma stated, "That I had purchased a Flat bearing No. Flat No.4, First Floor, Santoshi Complex, Khalini, shimla-II for a consideration of Rs.9 lacs from M/s Rajdeep Builders. Sale Deed of which was executed on 1.5.2003". In response to another question No.3, Shri Subhash Sharma stated, "Due to harassment from Shri R.K.Khosla, Partner of M/s Rajdeep Builders, I stated, "that sale consideration for the Flat No.4, Santoshi Complex, Khalini, Shimla, paid by me to M/s Rajdeep Builders was Rs.16 lacs." Thus, it is evident that Shri Subhash 5 Sharma gave a different version in the course of cross examination. However, the AO made the impugned addition. Ld. CI T(A), confirmed the addition made by the AO, as is evident from para 4 of her order, which is reproduced hereunder :
"4. I have considered the written submission as well as facts of the case. There is sufficient evidence on record to prove payment over and above registered amount of Rs. 9 lacs. This is clear beyond doubt from the following facts:-
i) Agreement to sell was entered into in Jan., 2003 on 28/1/2003 and the assesses has withdrawn matching amount from his account in Jan., 2003 only. There is a clear NUXUS between the withdrawal from the assessee's account and the payment to the assessee as per agreement entered in the same month. The withdrawals were made in Jan. 2003 as under-
Date Amount Bank Account
13.1.03 50,000.00 SB A/c No.5009 with UCO Bank
13.1.03 1,50,000.00 -do-
29.1.03 5,50,000.00 SB A/c No.8982 Union Bank o
Of India, Sml
ii) Sh. Subhash Sharma could not substantiate any
transaction alleged to have been made out of the withdrawal of Rs.7,00.000/- after retracting from his first statement recorded during survey on 02/09/2O04.
iii) The assessee himself has surrendered Rs. 3 lacs voluntarily on this account.
From these facts it is clear that the assessee has received Rs.7 lacs from Sh. Subash Sharma over and above the registered amount. It is held that the Id. A.O. s rightly assessed Rs.4 lacs as assessee's income from undisclosed sources after giving credit for the amount surrendered by the assessee at Rs.3 lacs. The addition of Rs.4 lacs is confirmed and as a result and this ground of appeal is dismissed."
5. In this appeal, core issue, which is to be adjudicated by us is whether the AO can make a valid addition, and can the CIT(A), upheld the same, merely on the basis of such statement, which was retracted in the cross-examination, without corroboration of the same by 6 credible and cogent evidence. It would be pertinent to analyze the evidentiary value of the so called statement, which was made the foundation of addition and sustenance of the same by the CIT(A). A photo copy of the statement, marked as Annexure-A, of Shri Subhash Chander Sharma, recorded by the Inspector, on 3.9.2004 is on record. A perusal of the statement reveals that no Section of the Act has been mentioned, under which such statement of Shri Subhash Sharma was recorded. The impugned statement has been recorded by some official of the Income Tax Department, who marked his status as 'Income-tax Act' which is duly signed by Shri Subhash Sharma. In the facts of the statement submitted before the CI T(A), the assessee stated that the said statement was recorded by the Income Tax Inspector, which is specified as last Income Tax authority u/s 116 of the Act. The Income Tax authority, i.e. 'Inspector of Income-tax' is not competent to record statement under any Section of the Income-tax Act, except u/s 133A(5) of the Act, which is meant for conducting survey of certain social functions, such as marriage, any ceremony or event. However, in the present case, survey was conducted u/s 133A(1) of the Act, whereby Inspector of Income Tax is not competent to record the statement. The provisions of Section 133A specifies Income Tax authorities and their respective jurisdiction by way of explanation. The Income-tax Inspector is clearly not authorized, to record statement under this Section. Therefore, such statement recorded 7 contrary to the provisions of the Act, hardly has any evidentiary value. The argument that evidence gathered in the course of invalid search operation, can be used against the assessee, is not applicable to the facts of the present case. In an invalid search, the authorizing authority, CI T or DI T (Inv.), has jurisdiction u/s 132(1) of the Act, to issue warrants of authorization. However, the Income Tax inspector has no jurisdiction under any provision of the Act, as indicated earlier, to record statement, in the course of survey operation u/s 133A(1) of the Act. The said statement does not bear the signature of the competent Income tax authority specified u/s 133A of the Act.
6. Burden of Proof The general rule is that 'burden of proof' is always on the authority, who asserts a proposition or fact, which is not self-evident. The burden of proof has two shades of meaning. In the primary sense, it means, the burden of establishing the case. The second meaning of 'burden of proof' is on the principle of evidence. In the second sense, the burden would be shifted from one party to the other, as and when adequate evidence to discharge the burden, that lay on a party, is being produced, by that party. 6(i) The onus to prove that apparent, is not the real one, is on the party who claims it to be so, as held by the Hon'ble Supreme Court in the case of CI T V Daulat Ram Rawatmull (1973) 87 I TR 349 (S.C) and CIT V Durga Prasad More (1971) 82 ITR 540 (S.C). In the case of CIT V Durga Prasad More 8 (supra), it has been held by the Apex Court that though an apparent statement must be considered real, until it was shown that there were reasons to believe that apparent was not the real, in a case where an authority relied on self serving recitals in documents. It was for the party to establish the proof of those recitals; the taxing authorities were entitled to look into the surrounding circumstances to find out reality of such recitals.
6(ii) It is also a settled legal proposition, if no evidence is given by the party on whom the burden is cast, the issue must be found against him. Therefore, onus is always on a person who asserts a proposition or fact, which is not self evident. The onus, as a determining factor of the whole case can only arise if the Tribunal, which is vested with the authority to determine, finally all questions of fact, finds the evidence pro & con, so evenly balanced that it can come to no conclusion, then, the onus will determine the matter. Needless to say that the onus is heavy or light, depending on the facts and circumstances of each case. There cannot be any doubt that onus has a determining factor, comes into play where, either there is no evidence on either side, or where it is equally worthless or where it is equally balanced. It is imperative to mention here that where such is not the case and all available evidence is consideration, without reference to the onus and without relying on the circumstances that onus lies on a particular party, the issue is determined on facts and the onus cannot be said to have influenced the decisions.
96(iii) The Hon'ble Supreme Court, in the case of Chuhar Mal V CIT (1988) 172 ITR 250, highlighted the fact that the principle of evidence law are not to be ignored by the authorities, but at the same time, human probability has to be the guiding principle, since the AO is not fettered, by technical rules of evidence, as held by the Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills v CIT (1954) 26I TR 775. The Hon'ble Supreme Court, in the case of Chuhar Mal V CI T (supra) held that what was meant by saying that Evidence Act did not apply to the proceedings under Income-tax Act,1961, was that the rigors of Rules of evidence, contained in the Evidence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of Evidence Act, in proceedings before them, they were prevented from doing so. It was further held by the Hon'ble Apex Court that all that Section 110 of the Evidence Act, 1872 did, was to embody a salutary principle of common law, jurisprudence viz, where a person was found in possessing of anything, the onus of proving that he was not its owner, was on that person. Thus, this principle could be attracted to a set of circumstances that satisfies its conditions and was applicable to taxing proceedings.
6(iv) In the present case, burden of proof lies on the revenue, to justify the impugned addition.
7. The real issue to be addressed, in this appeal is, whether the AO can rewrite the validly executed sale deed 10 and substitute his own recitals in the place of recitals, as incorporated, in the sale deed, particularly in respect of the sale consideration, specified therein. Can AO brush aside the valid sale deed and disregard the legal rights and liabilities arising under such a contract between the purchaser and seller and decide the question of sale consideration, purely on the basis of bare husk of oral evidence, in the shape of invalid statement of Shri Subhash Sharma, recorded by the inspector, which was in specifically retracted in the course of cross-examination, assigning reason of animosity between him and one of the partners of the assessee appellant. The impugned sale deed has not been challenged, as obtained by fraud or coercion by the seller, the appellant assessee. The AO is not competent to accept such invalid statement and ignore the valid deposition made at the time of cross-examination. Further, the statement is not supported by agreement entered into prior to sale deed and documentary evidences, such as receipts, obtained in token of having paid the part of sale considered, over and above as specified in the duly executed sale deed. Both the purchaser and seller have exclusive knowledge of such payment made or received, over and above the specified sale consideration. The seller discharged his part of onus by adducing that sale deed, evidencing sale consideration of Rs.9 lacs. The purchaser filed no evidence to demonstrate the payment of sale consideration in excess of the amount specified in the impugned sale deed. Accordingly, the impugned addition is 11 made by the AO and upheld by the CIT(A), on the fulcrum of bare surmises and conjectures. In view of this, it is not possible for the AO to completely ignore the legal character of the said transaction and substitute the 'uncertain and crooked cord of discretion' for the golden and straight mete wand of the law.' 7(i) As indicated earlier, the AO has not challenged the genuineness or validity of the 'sale deed'. The AO merely, on the basis of statement of Shri Subhash Sharma, one of the purchases, who later on, in the cross-examination retracted the statement, made in the impugned addition. It is pointed out that in income-tax matters, the proposition that the form of a transaction should prevail over its substance or vice-versa, is too broad and general proposition, to be universally applicable in all circumstances. However, it is well-established proposition that direct documentary evidence, in the shape of validly executed sale deed, if pitted against the mere oral evidence, the documentary evidence would certainly prevail. This view is supported by the Hon'ble Supreme Court, in the case of Motors and General Stores (P) Ltd. (1967) 66 ITR 692 (S.C) by holding that, where statutorily the parties have to reduce a certain transaction into writing, it is not open to Court or any authority to permit oral evidence to be adduced by the parties or to entitle them to go behind the statements made in the document. Income Tax Authorities are under the ordinary law. No greater power or authority is vested in them, except that which the 12 law confers. A bare perusal of Section 91 to 94 of the Evidence Act limits the power, subject of course to the exceptions stated in Section 91 and 92 of the Evidence Act. It is settled proposition that the Revenue could either accept the documents as representing genuine transactions or reject it on valid and substantial grounds which are tenable in law, but they cannot, while accepting that it is a genuine transaction, rewrite the document, contrary to what the parties have in-fact effected, or gave a construction by reference inadmissible in evidence.
7(ii) In the present case, the AO accepted the sale transaction as recorded in the impugned sale deed, as genuine, but the sale consideration specified therein was rejected as non-genuine and, further, enhanced that sale consideration, on the basis of invalid oral evidence, in the shape of statement of the purchaser, ignoring the specific denial of the facts stated in that statement, in the deposition made at the time of cross-examination. Thus, the AO disregarded the valid documentary evidence, various judicial pronouncements and undertaken the exercise of rewriting the sale deed and substituting his own sale consideration of the flat in place of the sale consideration duly specified in the sale deed. Needless to state here that the sale deed was voluntary entered and executed by the parties thereto.
7(iii) The statement recorded during survey has lesser legal sanctity then the statement recorded during search operations u/s 132(4) of the Act, as is evident from the 13 difference in language of Section 133A and 132(4) of the Act. There is initial burden of proof on the revenue to establish the findings of the impugned addition, as there is no initial presumption of excess consideration paid by the purchaser, in view of the specific consideration contained in the impugned sale deed. The AO has failed to establish the factum of physical receipt of money, in excess of the consideration specified in the sale deed, by bringing credible and corroborative evidences. When a transaction has been reduced to writing either by agreement of the parties or by requirement of law, the writing becomes the exclusive memorial thereof, as no evidence shall be given to prove the transaction, except the document itself or secondary evidence of its contents, where such evidence is admissible. The rule is based on the principle that the best evidence, of which the case in its nature is susceptible, should always be presented. Section 91 of law of evidence relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This Section merely forbids proving the contents of writing otherwise than by writing itself; it is covered by the ordinary rule of evidence, applicable not merely to solemn writing of the sort named but to others known sometimes as the "best evidence rule". In Bai Hira Devi V Official Assignee of Bombay AIR 1958 S.C. 448, the Supreme Court observed that Section 91 is based on what is sometimes described as the best evidence rule. The best evidence about contents of a document is the document itself and it is the production 14 of the document that is required by Section 91, in proof of its contents. It is after the document has been produced to prove its terms under Section 91 that the provision of Section 91 came into operation for the purpose of excluding evidence of any oral agreement or statement, for the purpose of contradicting, varying, adding to or subtracting from its terms. In a nutshell, when the terms of a contract are reduced in writing, the intention of the parties thereto can be gathered from such written document. It is, further, stated that the rule with regard to writings is that oral proof cannot be substituted for the written evidence of any contract which the parties have put into writing. And the reason is that the writing is considered by the parties themselves as the only repository and the appropriate evidence of their agreement.
8. The issue in the present appeal is directly covered in favour of the appellant by the following decisions :
i) The Hon'ble Punjab & Haryana High Court, in the case of Paramjit Singh V ITO (2010) 323 I TR 588 (P&H) has held that the assessee, had purchased a property from his uncles, for a consideration, specified in the registered sale deed, but the assessee claimed that no amount was paid on the basis of oral evidence of uncles.
The inference of the AO, that the amounts shown to have been paid in the sale deed was actually paid, was upheld by the Hon'ble High Court. The Hon'ble High Court pointed out that oral evidence is not conclusive as against documentary evidence u/s 91 and 92 of the 15 Indian Evidence Act, 1872 and upheld the inference of the AO. The relevant part of the decision of the Hon'ble Punjab & Haryana High Court in the case of Paramjit Singh V I TO, 323 I TR 588 (P&H) is reproduced hereunder :
"We have thoughtfully considered the submissions made by the learned counsel and are of the view that they do not warrant acceptance. There is well known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to Section 91 of the Act when terms of a contracts, grants or other 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 of the 1872 Act once the document is tendered in evidence and proved as per the requirements of Section 91 then no evidence of any oral agreement or statement would be admissible as between the parties to any such instrument for the purposes of contradicting, varying, adding to or subtracting from its terms. According to illustration 'b' to Section 92 if there is absolute agreement in writing between the parties where one has to pay the other a principal sum by specified date then the oral agreement that the money was not to be paid till the specified date cannot be proved. Therefore, it follows that no oral agreement contradicting/ varying the terms of a document could be offered. Once the aforesaid principal is clear then ostensible sale consideration disclosed in the sale deed dated 24.9.2002 (A.7) has to be accepted and it cannot be 16 contradicted by adducing any oral evidence. Therefore, the order of the Tribunal does not suffer from any legal infirmity in reaching to the conclusion that the amount shown in the registered sale deed was received by the vendors and deserves to be added to the gross income of the assessee- appellant."
ii) The Hon'ble Punjab & Haryana High Court, in the case of CI T V Chandni Bhochar (2010) 323 I TR 510 has held that the purchase price disclosed in the sale deed at Rs.17,06,700/- cannot be adopted as the purchase price for Rs.30,32,000/- by the AO, which is assessed for the purpose of stamp duty. The AO, accordingly, held that assessee must have paid Rs.13,25,300/-, over and above the purchase price disclosed in the Sale Deed and made the addition as income from undisclosed sources. The AO has failed to bring on record positive evidence, supporting the price assessed by the State Govt. for the purpose of stamp duty. Therefore, the provision of Section 50C of the Act cannot be applied in the case of a purchaser. The addition made by the AO u/s 69B on unexplained investment in the property, cannot be based on the provisions of Section 50C of the Act. Therefore, the apparent consideration disclosed in the Sale Deed would remain unrebutted, unless displaced by credible documentary evidence.
iii). The Hon'ble Punjab & Haryana High Court, in the case of CIT V Satinder Kumar (2001) 250 ITR 484 clearly held that AO is not competent to make addition in the absence of credible evidence, in respect of investment 17 made over and above the consideration recorded, in the sale deed. The head-note of the decision is reproduced hereunder :
"Appeal to High Court-Substantial question of law-Search and Seizure-Additions to income- Income f rom undisclosed sources-No material evidence to establish that assessee made investment over and above that recorded in sale deed-Tribunal deleting additions made under Section 69-Justif ied-No question of law arises- Income-tax Act,1961 ss.69, 260A."
iv). The Hon'ble Supreme Court, in the case of CIT V Motor & General Stores Pvt. Ltd. 66 I TR 692 (S.C) held that "it is, therefore, obvious that it is not open to the income tax authorities to deduce the nature of the document from the purported intention, by going behind the document or to consider the substance of the matter or to accept it in part and reject it in part or to rewrite the document, merely to suite purpose of revenue.
v) The Hon'ble Supreme Court in the case of K.P.Varghese V I TO, Ernakulam and another, 131 ITR 597 (S.C.) has held as under :
"Capital gains-Understatement-Scope of provisions-Difference between market value and consideration declared not sufficient- Assessee must be shown to have received more than what is declared or disclosed by him as consideration- Burden of proof on the Department-Computation-Only that income which has accrued or been received-Circulars of Central Board-Circulars dated July 7,1964, 18 and January 14,1974-Binding on Deptt. -
"Declared", meaning and effect of - Income- tax Act,1961, ss. 48. 52(1), 52(2).
vi) The Hon'ble Madras High Court, in the case of CIT V P.V.Kalyanasundaram, 282 ITR 259 (Mad) has held as under :
"Search & seizure - Block Assessment -
Undisclosed income-Property purchased by
assessee - Burden on revenue to prove that price had been understated-No enquiry and no evidence except conflicting statements of seller-Amount not assessable as undisclosed income - Income-tax Act, 1961, s. 158BC."
Assessment was made on the assessee under Section 158BC of the Income-tax Act, 1961, for the period April 1,1988 to December 8,1988. The assessee has purchased land on October 26,1998. The land was registered for Rs.4,10 lakhs. During the course of the search certain notings had been found. The assessee stated that he did not remember for what purpose he had made notings, which was confirmed by the assessee in a subsequent statement recorded on December 11,1998. The land was purchased from one R. The purchasers' statement was also recorded on the date of search, i.e. December 8,1998.
R admitted that he had received Rs.34.85
lakhs but subsequently in an affidavit he
mentioned that the sale consideration
received was Rs.4.10 lakhs. In a further
sworn statement R again stated that he had received Rs.34.85 lakhs. In the cash flow statement for the assessment year 1999-2000, i.e. block period April 1,1988, to December 19 8,1998, the AO adopted the sum in the cash flow relating to purchase of land at Rs.35.45 lakhs as against Rs.4,69,995/- disclosed by the assessee in his cash flow statement. This resulted in an addition of Rs.30,75,005 as undisclosed income for the block period. The Commissioner (Appeals) noted that due to the conflicting nature of the statements given by the seller, his statement could not be relied upon and hence he deleted the addition made by the AO. Aggrieved by the order of the Commissioner(Appeals) the Revenue filed an appeal before the Income-tax Appellate Tribunal. The Tribunal dismissed the Revenue's appeal and confirmed the order of the Commissioner(Appeals). On appeal to the High Court:
Held, that the burden of proving actual consideration in such a transaction was that of the Revenue. The AO did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. The deletion of the addition was justified.
K.P.Varghese v. ITO (1981) 131 ITR 597 (S.C) referred to."
vii) Hon'ble Supreme Court in the case of CIT V P.V.Kalyanasundram (2007) 294 ITR 49 (S.C) has held as under :
"Held, affirming the decision of the High Court, that the implication of contradictory statements made by the vendor or whether reliance could be placed on the loose sheets recovered in the course of the raid were all questions of fact, and no question of law arose out of the order of the Appellate Tribunal.20
Decision of the Madras High Court in CIT v.
P.V.Kalyanasundaram (2006) 282 ITR 259 affirmed."
viii) In the case of V.Ramchandra Construction Pvt. Ltd. V ACI T (2011) 131 I TD 71(TM), it has been held that the statement recorded u/s 131 of the Act will not affect evidence on record, in the form of agreement to sell and Power of Attorney executed by the assessee. The statement can be an after-thought. In income tax proceedings, oral evidences are not to be so relevant as written evidences". Oral evidence, no doubt has evidentiary value so far criminal proceedings are concerned, but in the income tax proceedings, the oral evidences have to be looked into when written evidences are not available on record and oral evidences can be accepted only when they are corroborated by the written evidences.
ix). In the case of Subhash Chand V ACI T, CC, Patiala in I TA No. 571 to 573/Chd/2011, A.Y. 2005-06, 2006-07 and 2007-08, vide order dated 28.11.2011, the Chandigarh Bench of the Tribunal has clearly upheld the sanctity of the sale deed, particularly the sale consideration specified therein by the parties, to the sale deed. In the said order, the Bench frustrated the intent of the assessee, to read the sale consideration in the deed, as Rs.38 lacs, instead of Rs.8 lacs for the purpose of explaining the undisclosed investment, in the purchase of property by him. The plea of the assessee was that stamp valuation authority has valued the sale 21 consideration for the purpose of stamp duty at Rs.38 lacs and out of that deemed consideration, the assessee attempted to explain the source of investment in the purchase of plot/flat. However, relevant part of the decision is reproduced hereunder :
"21. In the present case, the AO has found that the assessee has paid a sum of Rs.27,90,000/- towards purchase of flat/plot and for meeting household expenses in the year under appeal. The assessee could not have paid the aforesaid amount without having the money with him. No material has been placed before us to establish that the assessee had actually been paid by the buyer any money over and above Rs.8.00 lakhs or that the assessee has actually received from the buyer of the agricultural land over and above Rs.8 lakhs. In the absence of availability of cash to pay for the investments, etc., the assessee cannot be said to have satisfactorily explained the nature and source of the investment and expenses. One cannot pay unless he has money in his pocket. There is no evidence on record to establish that he had Rs.27,90,000/- in his pocket at the relevant point of time. Consideration, which is deemed to have been received in terms of section 50C, does not mean that the assessee has actually received that money so as to be physically available with him for making the investments. The physical availability of money needs to be proved as a matter of fact and on the basis of evidence and not on the basis of fictions. The assessee had received Rs.8.00 lakhs on sale of agricultural land and therefore had only Rs.8 lakhs in his pocket for making investments or for meeting expenses. The AO has rightly given the benefit of Rs.8.00 lakhs and not of Rs.38 lakhs while considering the explanation as regards the nature and source of investment amounting to Rs.27,90,000/-.
22. There is yet another angle to the case. It is the case of the assessee that he has received a sum of Rs.8.00 lakhs, being the amounting actually paid by the buyer on transfer of land by the assessee to him. There is no material on record to hold that the buyer of the agricultural land has paid anything over and above Rs.8.00 lakhs. Since 22 there is no evidence on record that the buyer has paid anything over and above Rs.8.00 lakhs, being the amount stated in the conveyance deed to have actually been paid by the buyer to the assessee on transfer of agricultural land, it is not possible to hold that the assessee has received a sum of Rs.38.00 lakhs from the buyer. For this reason also the claim of the assessee deserves to be rejected and is accordingly rejected.
23. The assessee wants us to hold that the consideration deemed to be received in terms of section of section 50C should be treated as consideration actually received. We are unable to hold so for the reason that it is the assessee himself who has recited in the deed of conveyance to have received only Rs.8 lakhs. Having so recited in the deed of conveyance, the assessee cannot turn around to say that he has received Rs.38 lakhs instead of Rs.8 lakhs as recited in the deed of conveyance and that too without bringing any material on record to prove that he has actually received Rs.38 lakhs instead of Rs.8 lakhs. Besides, conveyance deed has been signed by both the buyer as well as seller (i.e., the assessee) of the property. The assessee cannot succeed in its claim to have received Rs.38 lakhs unless the said amount is shown to have been paid by the buyer. There is no confirmation from the buyer that he has paid Rs.38 lakhs to the assessee and not Rs.8 lakhs as recited in the deed of conveyance. If the buyer had actually paid and the assessee had actually received Rs.38 lakhs from him then nothing prevented them from stating so in the deed of conveyance. The assessee has placed no evidence either before the Departmental authorities or before us to establish that the recital in the conveyance deed that a sum of Rs.8 lakhs has been received by the assessee from the buyer, is factually incorrect or that any money has been actually received over and above the one shown to have been paid by the buyer in the deed of conveyance. For this reason also, the explanation of the assessee has rightly been rjected by the AO ad the CIT(A). "
ix(a) It is validly held by the Bench, in this case, that sale consideration specified in the valid sale deed, duly executed voluntarily by the parties 23 thereto, cannot be varied, at the convenience or volition of the seller, for the purpose of explaining his undisclosed/unexplained transaction. Similarly, the purchaser cannot claim different purchase price paid by him, purely with an intent to settle personal grievance nurtured against one of the partners, a situation obtaining in the present appeal. The findings could be the same where a seller intends to vary the consideration specified in the sale deed, with a view to explaining his unexplained investment. The inescapable conclusion is that both the purchaser or the seller, cannot rewrite the duly executed valid sale deed, with a view to suit their convenience. Needless to state here that documentary evidence cannot be displaced by oral evidence, being the best evidence in itself, as held by the Hon'ble Supreme Court, various High Courts and the Tribunal, in the case laws discussed above. If direct documentary evidence, like the valid sale deed is permitted to read differently in terms of its clear and specific recital such as sale consideration voluntarily agreed upon by the seller and the purchaser, then credibility of such public documents would be the first casualty and such transactions in the commercial world would collapse.
9. In the present case, the AO as well as the CI T(A), proceeded to draw inferences against the assessee, on the basis of invalid statement of Shri Subhash Sharma, which was recorded on 3.9.2004, ignoring the retraction made by 24 him in the cross-examination, conducted on 7.11.2006. It is, further consequent to highlight that both the AO and CIT(A), completely disregarded the sale deed, executed by the parties voluntarily, which contains Rs.9 lacs as sale consideration. As discussed above, oral evidences cannot displace the direct documentary evidence, in the shape of sale deed containing specific sale consideration of Rs. 9 lacs. This view is duly supported by the decision of the Hon'ble jurisdictional High Court in the case of Paramjit Singh (supra), Chandni Bhochar.
9(1) The question in the present appeal is squarely covered by the decision of the Hon'ble Kerala High Court in the case of CIT V Smt. K.C.Agnes & Others (2003) 262 ITR 354 (Kerala), wherein the Hon'ble High Court held that when a document shows fixed price, there will be a presumption that, that is correct price agreed upon by the parties. It is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it my be higher and sometimes it may be lower. Sometimes, intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for sale, the court cannot come to the conclusion that the price mentioned in the sale deed is not correct. In this case, appeal of the Revenue was dismissed. It is seen that the Hon'ble High Court has gone a step ahead and even considered the existence of both the agreement 25 to sell and the sale deed and upheld the validity and sanctity of the sale deed.
10. In view of the above legal and factual discussions and having regard to the direct decisions of the Hon'ble Tribunals, including that of Chandigarh Tribunal, various High Courts and the Hon'ble Supreme Court, in the matter, we hold that the sale consideration specified in the impugned sale deed cannot be substituted, on the basis of mere oral evidences. Therefore, the impugned addition upheld by the CIT(A), is deleted and the appeal of the assessee is allowed.
11. In the result, appeal of the assessee is allowed.
Order pronounced in the Open Court on 27 t h April,2012.
Sd/- Sd/-
(H.L.KARWA) (MEHAR SINGH)
VICE PRESIDENT ACCOUNTANT MEMBER
Dated: 27 t h April, 2012.
'Poonam'
Copy to:
The Appellant, The Respondent, The CI T(A), The CIT,DR Assistant Registrar, TAT Chandigarh