Income Tax Appellate Tribunal - Chandigarh
Manav Singla, Chandigarh vs Dcit, Chandigarh on 7 May, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "बी", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH "B", CHANDIGARH
ी संजय गग , या यक सद य एवं डा. बी.आर.आर, कुमार, लेखा सद य
BEFORE: Sh. SANJAY GARG, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No. 229/Chd/2013
नधा रण वष / Assessment Year : 2006-07
Manav Singla बनाम The DCIT,
H.No. 244, Sector 16-A Central Circle-1
Chandigarh Ayakar Bhawan, Sector-17-E
Chandigarh
थायी लेखा सं./PAN No: AUKPS1017R
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri. Sudhir Sehgal
राज व क ओर से/ Revenue by : Smt. Renu Amitabh
सन
ु वाई क तार#ख/Date of Hearing: 14/02/2019
उदघोषणा क तार#ख/Date of Pronouncement : 07/05/2019
आदे श/Order
PER DR. B.R.R. KUMAR, A.M:
The present appeal has been filed by the Assessee against the order of the Ld. CIT(A)(Central), Gurgaon dt. 17/12/2012.
2. In the present appeal Assessee has raised the following grounds:
1. That the orders of the Commissioner of Income Tax (Appeals)(Central) are Contrary to law and the facts of the appellant's case.
2. That the Ld. Commissioner of Income Tax (Central) has erred in confirming an addition of Rs. 45,58,000/- as deemed income of the assessee under section 69B of the Income Tax, Act, 1961 and also income of Rs. 13,55,000/- assessed u/s 154 by the assessing officer u/s 69B.
3. Fir these and other reasons that may be urged at the time of hearing the appellant prays for relief.
3. During the search the documents marked "Page 20 of Annexure D-8" was found wherein the handwriting of the assessee has shown noting pertain to two plots namely, plot no.9 for an amount of Rs. 33,56,050/- + 5,34,907/- = Rs. 38,91,557/-
plot no. 55 for an amount of Rs. 26,80,250/- + Rs. 8,20,836/- = 35,91,557/-
The same was also reflected on page no. 103 of Annexure D-4 which is similar the above entries of Rs. 33,56,050 and Rs. 26,80,250/-.
24. The Assessing Officer concluded that the figures as mentioned in the diary were not rough figures but were specific noting as figures been meticulously mentioned with final rupee count and therefore, added the same towards the income of the assessee.
5. The assessee submitted before the Assessing Officer that the documents under reference reflected the estimated market price of the plots of land. As for the handwriting, it was stated as his, submitted that the contents of the entries related to cost of construction and the figure of Rs. 5,34,907/- pertained to cost of construction of plot No.9 and Rs. 8,20,836/-.as the cost construction of plot No
55.
6. During the arguments before us, the Ld. AR reiterated the submissions taken before the Ld. CIT(A) which are as under:
"The assessee during the said period was studying in the final year of B.Tech in Indo Global College. The assessee after the college hours got involved in the market survey of real estate as he had no earlier experience in the line. The assessee during the year under reference purchased two plots in Feb., 2006 Plot No 55 for a price of Rs 6,18,000/- and Plot No 9 for a price of Rs 7,20,000/- and subsequently construction was done on the said plots.
During search operations a hand written document at Page No 20 of Annexure D-8 was seized. The said document is written in the handwriting of the assesses and reflects estimated market price of the plots purchased by the assessee. During that period there was a spurt in the market immediately after the purchase of the said plots. The assessee is not an expert accountant. He was trying to find out the market price of the plot plus construction expenses for the purposes of disposing off the constructed plots. The said plots were purchased by the assessee in Feb., 2006 Plot No 55 for a price of Rs 6,18,000/- and Plot No 9 for a price of Rs 7,20,000/-. The figures of Rs 33,56,950/- end 26,80,250/- as mentioned in the dairy as cost of plot was arrived at by adding estimated market price of the plots Rs 32,50,000/- and Rs 25,75,000/-at that point of time and various expenses incurred on the registration etc of the said plots as detailed in the said paper amounting to Rs 1,09,650/- and Rs 1,05,250/-respectively. The figures have been calculated the purpose of disposing off the same. Copies of registration deeds along with affidavits from the concerned sellers Mrs Sunita Gupta and Sh Phool Kumar Goyal were submitted before the assessing officer. The said figures are also co-related with the balance sheets of Manav Singla submitted before the assessing officer and withdrawals from the bank for the purchase of the plots and construction thereon.
The figures of Rs 38,91,557/- for Plot No 9 and Rs 35,01,056/- for Plot No 55 are not the true cost of the plots but the estimated market price of the plots for the purposes of disposing off the same. The difference was treated by the assessing officer as the income of the assessee from undisclosed investments u/s 69B.3
7. The arguments were summed up as under:
1. The plots No 55 and 9 were purchased by the assessee for Rs 6,18,000/-
and Rs 7,20,000/ respectively in Feb., 2006 through a registered sale deed copies of which were submitted with the assessing officer.
2. Affidavits from the concerned sellers Mrs Sunita Gupta and Sh Phool Kumar Goyal were submitted before the assessing officer confirming sale of plots No 55 and 9 to Sh Manav Sing la for a consideration o f R s 6,18,000/- and Rs 7,20,000/- respectively.
3. The figures of Rs 38,91,557/- for Plot No 9 and Rs 35,01,056/- for Plot No 55 as mentioned in the seized documents are not the true cost of the plots but the estimated market price of the plots for the purposes of disposing off the same.
4. There is no other corroborative evidence with the department to arrive at a opinion that the said plots were purchased for Rs 38,91,557/-and Rs 35,01,056/-.
5. The plots were registered at the rate more than the collector rates applicable in that area and the Assessing Officer has not disputed the same.
8. The Ld. AR further taken us through the documents in question. The plot no. 9 is of 240 Sq.yds and plot no. 55 is of 55 Sq.yds. The figures mentioned above were in absolute, for example 534907, 3891857, 820836, 3501086. It was also argued that while answering the question no. 10 and 12 during the statement recorded on 14/08/2008 and question no. 10 during the statement recorded on 16/10/2010 it was clarified that the diary is in the hand writing of the assessee contained the general market information and on some days the rates of certain items spent on the construction of the house. It was argued that the purchasers have also filed affidavits declaring the purchase price.
9. It was further argued that the cost of Rs. 686800/- of plot no. 55 and Rs. 792600/- being the cost of plot no. 9 have been duly reflected in the balance sheet of the concern of the assessee as on 31/03/2006. It was also argued that the subsequent years the Revenue has accepted the registered rates only while computing the capital gains arised on the sale of the sale of these two plots. It was further relied on the following case laws in support of his arguments:
i) (2008) 169 Taxman 90 (P&H) CIT Vs. Harpal Singh
ii) (1999) 63 TTJ (Del) 532 S.K.Gupta Vs. DCIT
iii) (1998) 64 ITD 21 (Bom)(TM) Udeyraja Goliya (HUF) Vs. ACIT
iv) (2000) 66 TTJ (Mumbai) 582 Smt. Rajrani Gupta Vs. DCIT
10. On the other hand the Ld. CIT DR argued that the fact of noting is very specific and it is in the common knowledge that the amount of Rs. 33,56,050/-
4and Rs. 26,80,250/- represents the cash portion of the transaction whereas the amount of Rs. 534907/- and Rs. 820836/- represents the collector value of the plots. It was argued that the fact that the plots have been duly purchased as mentioned in the document namely plot no. 55 and plot no. 9. She relied on the order of the Ld. CIT(A) which is as under:
" In this case on hand, it is an undisputed fact that the diary found and seized in the course of search is admitted by the assessee to be in his own writing The only disputed point being that the contents were mere estimates of plots of land and consequently the addition u/s 69C was unwarranted as the sellers had furnished affidavits etc. I find that the Ld AO at page 4 & 5 of the impugned order wherein the scanned copies of the diary pages have been affixed, has clearly held that the pages contained meticulous details viz. plot numbers have been mentioned against which the total cost has been mentioned. Similarly, for plot No. 55, the total cost of the plot plus construction have been indicated. These unambiguous noting, mentioned in round figures, therefore could not be passed over to be mere estimates. The filing of affidavits from the seller of the land were thus held to be at best only self-serving evidences which inspired no confidence. Thus, the Ld AO has rightly invoked the provisions of Section 69B as the onus was or, the assessee to prove that the conclusions being drawn by the Ld AO was inaccurate by leading evidence. Consequently, taking into consideration the entirety of the facts and circumstances, I have no reason not to uphold the addition as made by the Assessing Officer to the to the tune of Rs. 45,58,000/-."
11. We have heard the arguments and perused the material on record the following facts emanate from the record. The noting and the details of the purchase deeds are as under, Sl.No. Plot No. Amount mentioned in the diary Purchase Cost as per Registered documents 1 Plot No. 9 3356950 + 534907 = 3891557 720000/- 2 Plot No. 55 2680250+820836=3501086 618000/-
Hence it cannot be said at this juncture that the other figures necessarily constitute cash payment in the absence of any payment corroborating the figures mentioned in the diary. The purchase value varies from the figures noted in the diary. The Revenue while recording the statement under section 132(4) even at the time of search and at the time of assessment could not bring out anything on record to prove are corroborate the diary noting. It has been the consistent stand of the assessee that these are estimates in the statements recorded. There was no evidence of cash payment or generation of cash or physical cash pertaining to the assessee found at the time of search. The Revenue did not enquire on the side of sellers of the plots to prove anything contra as put forward by the assessee. Thus, what we have on record is a mere noting of the diary which in the absence of any other corroborative evidence cannot be utilized for making addition under section 69B. As far as the Revenue 5 is concern there are no evidences on record to prove unexplained investments. The paper in question does not indicate that in the transaction cash payment has ever taken place because it does not contain any information as to what was the cheque amount or cash amount, what was the date of the transaction, what did the figure noted on the piece of paper represent, and whether in any manner the paper in question has any relevance to the determination of the income in the hands of the assessee. No evidence has been brought on record to corroborate the allegation that the assessee had paid cash. Therefore unless there is a corroborative evidence to show that the payment of cash has taken place during the purchase, no amount can be added in the hands of the assessee. In the instant case distinct and separate proofs were necessary namely proof of cash payment by the way of generation of amount or physical cash, proof of truthfulness by the way of oral statements recorded or documents to prove that the contents in the diary amounts to unexplained investments as per the provisions of Section 69B. Hence in the absence of any other evidences collected by the Revenue, we hereby hold that the addition made by the Assessing Officer cannot be sustained.
Further, we also find from the returns of the assessee, filed for the assessment year 2011-12 and 2012-13 and also the 143(3) order for the assessment year 2012-13 that the Revenue itself has accepted the capital gains declared by the assessee taking into consideration the amount declared in the registered documents. No action has been taken by the Revenue to dispute the cost of acquisition pertaining to the properties in question. By accepting the capital gains declared by the assessee the Revenue has made a self goal pertaining to the addition made in the earlier years (though this is not the only reason to delete the addition).
12. As a result, the appeal of the assessee is hereby allowed.
Order pronounced in the open Court.
Sd/- Sd/- संजय गग / (SANJAY GARG ) डा. बी.आर.आर, कुमार / ( DR. B.R.R. KUMAR) या यक सद य/ Judicial Member लेखा सद य/ Accountant Member Date: 07/05/2019 AG Copy of the order forwarded to :
1. The Appellant, 2. The Respondent, 3.CIT, 4. DR, ITAT, CHANDIGARH, 5. Guard File