Income Tax Appellate Tribunal - Chandigarh
Smt. Bimla Rani, Ludhiana vs Assessee on 28 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH "A" CHANDIGARH
BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM
ITA No. 1440/Chd/2010
Assessment Year: 1999-2000
Smt. Bimla Rani V. A.C.I.T. Central Circle - I
L/H of Late Joginder Lal Ludhiana
Bambi Hotels
1082, Opp. Railway Station
Ludhiana
ABKPB 0266 G
ITA No. 1441/Chd/2010
Assessment Year: 1999-2000
Smt. Bimla Rani V. A.C.I.T. Central Circle - I
C/O Bambi Hotels Ludhiana
1082, Opp. Railway Station
Ludhiana
ABCPR 5455 R
(Appellant) (Respondent)
Appellant by: Shri Sudhir Sehgal
Respondent by: Shri N.K. Saini
Date of hearing: 28.06.2012
Date of Pronouncement: 09 .07.2012
ORDER
PER T.R. SOOD, A.M
In both these appeals the assessee has raised identical grounds which are as under:-
"1 That the ld. CIT(A)-I, Ludhiana has erred in up-holding addition of Rs. 34,30,000/- made by the Assessing Officer as undisclosed income by way of unexplained investment in the purchase of property.
2 That while up-holding addition ofRs. 34,30,000/- the ld. CIT(A) has erred in not considering the basic fact that the market value of the property cannot be other than the value for which registration deed has been made."
2. The brief facts of the case are that originally return was processed u/s 143(1) and later on notice u/s 148 was issued and the assessment was completed u/s 143(3)/147 vide order dated 30.3.2006 in which net taxable income was determined at Rs. 35,56,110/- against the returned income of Rs. 1,26,108/-. The addition was mainly against the sale of property wherein sale consideration was considered Rs. 38.00 lakhs as declared by seller whereas the assessee had declared sale consideration only at Rs. 3,70,000/-.
3. The assessee had purchased a half share of house in plot measuring 61 sqyd No. B-7-1082 from Shri Dig Vijay in February, 1999 and the sale deed for the same was executed showing consideration of Rs. 3,70,000/-. The plot is situated opposite Railway Station which is one of the prime location of the city. Enquiries were made from Shri Dig Vijay i.e. seller of the property and his statement were recorded on 17.8.2000. In the statement Shri Dig Viay stated that he has sold the plot to Shri Joginder Lal for a sum of Rs. 38.00 lakhs but the sale deed was executed only of Rs. 3,70,000/-. Subsequently Shri Dig Vijay filed revised return on 31.3.2001 in which sale consideration was declared at Rs. 38.00 lakhs. On the basis of statement the Assessing Officer was of the view that actual sale consideration must have been Rs. 38.00 lakhs. It was further noted that there was a search on the premise of Smt. Bimla Rani and other members of the family and whole group had surrendered a sum of Rs. 3.00 crores on various accounts. According to the Assessing Officer this fact clearly shows that the assessee was in possession of unaccounted sums of money. When the ld. counsel of the assessee was confronted with the statements of Shri Dig Vijay, it was stated that the statements have been collected behind the back of the assessee and therefore, same can not be relied. However, the Assessing Officer went on to make assessment on the basis of sale consideration of Rs. 38.00 lakhs. The matter finally traveled to the Tribunal and the Tribunal set aside the assessment and remanded the matter back to the file of Assessing Officer with a direction to give opportunity for cross-examination etc. In fact the relevant para of order of the Tribunal which has been extracted at para 3 of the assessment order reads as under:-
"The ld. counsel of the assessee during arguments invited our attention to the fact that the statement of Shri Dig Vijay Singh was recorded by the department when they visited their premises and threatened with dire consequences and he made the statement under pressure and revised the return under pressure and fact remains that Shri Dig Vijay Singh filed original return declaring the amount of Rs. 3,70,000/-. The counsel for the assessee also invited our attentions to various decisions on recording of statement/opportunity ...............This fact was not denied by the revenue that the statement was only provided to the assessee during penalty proceedings. In view of these facts, we are of the firm opinion, that due and proper opportunity should have been provided to the assessee as the same is clear cut violation of principle of natural justice because the ultimate aim of the law is to do justice. Therefore, on this we are in agreement with the ld. counsel of the assessee, consequently. This issue is sent to he file of the Assessing Officer for fresh adjudication. Needless to mention here that due opportunity be provided to the assessee. The assessee is also at liberty to produce evidence, if any, to substantiate its claim.
Next ground raised by the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 34,30,000/- u/s 69 specially when no material has been confronted to the appellant. Without going into much deliberation, when we have remanded the issue of cross examination which includes resultant additions, this ground has remained for academic interest only, therefore, automatically remanded to the file of the Assessing Officer for fresh adjudication with liberty to the Assessing Officer for filing evidence, if any."
Following the direction of the Tribunal the case was fixed for hearing again and summons were issued to Mrs. Prem Lata and Shri Dig Vijay (seller of the property). Their statements were recorded on 8.5.2008. In view of the directions of the Tribunal the assessee was given full opportunity to cross-examine Mrs. Prem Lata and Shri Dig Vijay. Cross examination was done by Shri Harish Sharma representative of the assessee and Shri Mukesh Bambi son of Smt. Bimla Rani.
4. Smt. Prem Lata and Shri Dig Vijay categorically stated during cross-examination that half share of the property was sold for a sum of Rs. 38.00 lakhs. The copy of the statement recorded during cross-examination were given to the assessee and the assessee raised further objections mainly stating that survey was conducted in the business premises of Shri Dig vijay and his mother Smt. Prem Lata who had filed revised returns of income showing capital gains to avoid effect of other incriminating documents found during the survey. The sellers were unable to name the persons who paid the sale consideration in cash. The details of utilization of sale consideration were not made available by the seller. Some instances of the lower value as well as for the vicinity were also furnished before the Assessing Officer. The Assessing Officer summed up his conclusion in para 11 and relevant portion is as under:-
"(i) It is totally incorrect on the part of the assessee or his A/R to claim that during survey various incriminating documents were found from business premises of seller Shri Digvijay but the Department accepted revised return showing capital gains based on sale consideration of 38.00 lakhs and ignoring other incriminating documents found during survey. Such a contention raised by the assessee is just without any evidence and is totally devoid of any merit. The assessee has not pointed out as to what incriminating documents were found at the premises of sellers and how the assessee had come to know about such incriminating documents. In their statements or even in cross examination both the sellers have not admitted that statements recorded during survey were under any threat.
(ii) The next argument of the assessee is that the assessee was unable to name the person who had paid cash amounts. In her statement Smt. Prem Lata has clearly stated that the amount was paid by Shri Joginder Lal who was present there along with another person. Attention in this regard is drawn to the following question raised by the assessee during cross examination and reply of the seller Smt. Prem Lata:
Q: 1: Who had given this amount of Rs. 35 lakhs to you?
Ans: It was given by your father Shri Joginder Lal who was accompanied by another persons but main I don't recall. I don't remember exactly now but most probably it was Shri Joginder Lal (buyer) who was accompanied by another person.
The assessee objected to her statement on the ground that buyer was Smt. Bimla Rani and not Shri Joginder Lal. However, this objection of the assessee's A/R is not accepted for the reason that an old lady (Smt. Bimla Rani) will never carry that much cash when her husband (who is also a joint purchaser) was present for such a deal.
(iii) It is again incorrect on the part of assessee to expect details of utilization of sale proceeds after a gap of 10 years particularly when both the sellers have given brief description of utilization of amounts. It is a well settled law that it is for the person, who asserts, to prove that apparent was not the real. In this case the sellers stated during their cross examination that they had utilized amounts for construction of houses, deposit in Bank Account, amounts given to daughter, purchase of car and payment of taxes etc. The assessee has not proved anything contrary to such statement of seller, such a mere objection and that too without any evidence, deserves to the rejected and accordingly I do so.
(iv) The assessee has now produced some sale instances according to which the registered cost shown bythe assessee is allegedly claimed as justified. One such document is photocopy of sale deed dated 12.5.2000 for sle of property measuring 45 sq. yards for Regd value of Rs. 1,20,000/- and the other one is photocopy of sale of 42 sq. yards of 42/208 share in a property for Regd value of Rs. 1,25,000/-. Average cost of these two properties comes to less that 3000 per sq yards whereas another property is claimed to have been sold by PUDA in an auction @ 10,000 per sq yards. From this very reply of the assessee it is clear that cost of each property differs depending upon its location, size and various other factors. As is clear from above facts that property of PUDA was auctioned @ 10,000 per sq. yard while the others were sold @ less than 3,000 per sq. yards. The property purchased by the assessee (Husband + Wife) from sellers who happened to be mother and son was such that a Hotel Building could be constructed there on and that too just opposite to Railway Station and was capable to fetch a good number of Hotel Customers. In this view of the matter as well as categorical statement of sellers (who have paid taxes also on capital gain arising on the basis of sale value adopted at 38 lakhs) I find no merit in the assessee's contentions."
Thereafter the Assessing Officer discussed the case laws relied on by the assessee and reached the conclusion that the case laws relied on has no relevance to the facts of assessee's case. In this background addition of Rs. 34,30,000/- has been made to the income of the assessee.
5. The assessee could not improve upon her case and the ld. CIT(A) confirmed the addition and hence the appeal before us.
6. Before us, the ld. counsel of the assessee submitted that in the second round of the assessment the addition has been confirmed mainly on the basis of statement of Smt. Prem Lata and Shri Dig Vijay. He contended that in fact, a survey was conducted in the premise of Shri Dig Vijay and many incriminating documents were found there and to avoid the consequences of such incriminating documents Shri Dig Vijay and Smt. Prem Lata choose to file revised return showing excess sale consideration. In this regard he referred to page 29 of paper book which is a copy of letter through which Shri Dig Vijay has written to the Assessing Officer to revise his return. Then he referred to page 30 of the paper book which is computation of the income in case of Shri Dig Vijay. He pointed out that after declaring sale consideration of Rs. 38.00 lakhs Shri Dig vijay had claimed exemption u/s 54 at Rs. 20.00 lakhs. This clearly shows that Shri Dig Vijay had wanted to save taxes which could have arisen in his case because of the survey conducted by the Department and he has got away with very little taxes on higher sale consideration which was not correct position. If the actual sale consideration was really Rs. 38.00 lakhs then why Shri Dig Vijay has originally shown it at Rs. 3,70,000/-. He referred to page 1-6 of the paper book which is a copy of the statement of Smt. Prem Lata recorded on 8.5.2008 when cross-examination was also done. In the reply to Q No. 1 that who had given Rs. 35.00 lakhs, Smt. Prem Lata stated that it was given by Shri Joginder Lal whereas in Q No. 2 when it was asked that do you know Shri Joginder Pal She had replied that it was a presumption that the person who gave the money was buyer. The answer to Q No. 3 was also vague. Through Q No. 3 it was asked how the amount was utilized she had replied that the amount was partly given to the daughter and partly kept in the bank account and some amount was used for construction of house, purchase of car and payment of taxes. This clearly shows that she did not know how exactly the amount was disposed off. In fact through Q No. 4 when it was asked that whether she had any details of the bank deposits, she categorically stated that presently she did not remember them because she was not keeping well after suffering from two heart attacks. All these replies clearly show that she was telling lies. Thus the addition have been made mainly on the basis of submissions made by the seller which can not be made basis for addition on higher purchase consideration without any tangible evidence for the same.
7. He also contended that the assessee had also filed copies of sale instances before the Assessing Officer as well as the ld. CIT(A) showing that the property in the similar locality were sold at comparative rate for example a plot measuring 45 per Sq.yard was sold for Rs. 1,20,000, thus giving a per Sq.yard rate of Rs. 2666 and 42 Sq.yard plot for a sum of Rs. 1,25,000/- wherein rate per Sq.yd works out to Rs. 2976/- per Sq.yd whereas in assessee's case per Sq.yd works out to Rs. 6700/-. In this connection he referred to relevant sale deeds which are filed at page 15 to 28. It was pointed out to the ld. counsel of the assessee that such sale deeds are in the Punjabi language, then he promised to file the translation of the sane within two days which has not been filed till today. It was also noticed that the assessee has purchased a house and not a plot as mentioned in the revised return by Shri Dig Vijay through a letter dated 6.12.2000 copy of which is at page 29 of the paper book. The ld. counsel of the assessee submitted that the assessee in fact, had purchased the plot only but it was further noticed that the assessee has not filed copy of the relevant sale deed and he again promised to file the sale deed and the same was never furnished.
8. He further contended that it was settled law that apparent has to be taken as real unless proved otherwise. In the case before us, the seller had declared sale consideration of Rs. 3,70,000/- and the sale deed also shows the sale consideration at Rs. 370,000/- therefore, the same has to be accepted in the absence of any other evidence. The onus lies on the department to prove that the assessee i.e. the buyer had given something under hand to the seller. In this regard he mainly relied on the decision of Hon'ble Supreme Court in the case of K.P Varghese V ITO, 131 ITR 597 (SC), CIT V. P.V. Kalyanasundaram, 282 ITR 259 (Mad) and CIT V. Daulat Ram Rawatmull, 87 ITR 349 (S.C). He contended that Hon'ble Punjab & Haryana High Court in case of Paramjit Singh V. ITO, 323 ITR 588 (PH) has clearly held that ostensible sale consideration disclosed in the sale deed has to be accepted. He then referred to decision of Chandigarh Bench of the Tribunal in case of Rajdeep Builders V ACIT, ITA No. 666/Chd/2010 wherein the above case law has been considered and by various observations it has been clearly held that unless and until revenue has clear evidence of extra consideration such consideration can not be added to the income of the assessee.
9. On the other hand, the ld. DR for the revenue while strongly supporting the order of the Assessing Officer and the ld. CIT(A) brought to our notice the observations of the Assessing Officer in Para 7 wherein it is clearly mentioned that a search was conducted in the group of assessee and the assessee group ultimately approached the Settlement Commission. During the settlement proceedings, the Settlement Commission gave a choice to the assessee to offer the clear extra consideration of the sale of this property or to allow the matter to be taken up with the Department. This clearly shows that the Settlement Commission was of the opinion that extra amount paid by the assessee has to be considered as income. Apart from this there is clear evidence available that the Department in the form of return filed by the seller wherein higher sale consideration has been declared by the seller, therefore, the cases relied on by the assessee are clearly distinguishable.
10. In the rejoinder the ld. counsel of the assessee referred to para 7 of the assessment order and submitted that reading of this para clearly shows that Settlement Commission has never given a finding that the assessee has definitely paid more money. In fact nothing incriminating was found during search in the assessee's group to show that the assessee has paid extra consideration for the said property.
11. We have heard the rival submissions carefully and are unable to accept the submissions of the ld. counsel of the assessee. No doubt it is settled position of law that the consideration mentioned in the sale deed has to be accepted by the Department unless the Revenue has some evidence to show that higher consideration was paid. The decision quoted by the ld. counsel of the assessee have been considered by the Chandigarh Bench of the Tribunal in case of Rajdeep Builders (supra). In that case a survey was conducted in assessee's business firm wherein the assessee surrendered a sum of Rs. 3.00 lakhs. Later on a statement of one Shri Subhash Sharma who has purchased a flat from the assessee firm stated that he has made payment of Rs. 7.00 lakhs to the builders over and above sale consideration of Rs. 9.00 lakhs in the sale deed. The statement was later on retracted by saying that he had a dispute with the builder that is why he made a statement. The Tribunal considered the theory of burden and made various observations as under:
"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 CIT V. Daulat Ram Rawatmull (1973) 87 ITR 349 (S.C) and CIT V. Durga Prasad More (1971) 82 ITR 540 (S.C). In the case of CIT V. Durga Prasad More (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.
7(i) 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.
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 ITR 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 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 ITO, 323 ITR 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 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."
v) The Hon'ble Supreme Court in the case of K.P.Varghese V ITO, 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, 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 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."
All the above observations clearly show that if the Revenue alleges that the assessee has received extra sale consideration then the Revenue can not make addition unless and until some material is brought on record.
12 In case of Rajdeep Builders (supra) a survey was conducted on the assessee wherein the assessee made a surrender of Rs. 3.00 lakhs for receiving under-stated consideration. Later on a statement of one Shri Subhash Sharma was recorded on 3.9.2004 through which it was stated that he has made payment of Rs. 7.00 lakhs to Rajdeep Builders over and above the sale consideration of Rs. 9.00 lakhs declared in the sale deed. The Assessing Officer gave credit of Rs. 3.00 lakhs surrender by the assessee during survey and balance of Rs. 4.00 lakhs was treated as unexplained income of the assessee. However, later on during cross examination on 7.11.2006 Shri Subhash Sharma stated -
"No, I do not confirm the facts stated by him fully, as given in my above referred statement on 3.9.2004." In response to Q 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. 9.00 lacs from M/s Rajdeep Builders. Sale deed of which was executed on 1.5.2003." In response to another Q 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 from above it is clear that Shri Subhash Sharma had retracted from his statement and revenue had no evidence other than the statement of Shri Subhash Sharma for payment of on money that is why after considering various decisions it was held by the Tribunal that the burden was on the revenue to prove that the assessee had received extra consideration and accordingly the addition was deleted.
13 Similarly in case of K.P. Verghese V ITO (supra) the assessee was owner of a house which was purchased in 1958 for Rs. 16500/-. This house was sold at the same price in 1965 to his daughter-in-law and five of his children. The assessment for Assessment Year 1966-67, for which the relevant accounting year was the calendar Year 1965, was completed without any capital gain. Later on a notice u/s 148 was issued and through subsequent letter it was clarified that by the ITO that he proposed to fix the fair market value of the house sold by the assessee at Rs. 65,000. The ITO could not invoke the provisions of section 52(1) of the Act but for brining the same Rs. 48,500 to tax he invoked provisions of section 52(2) of the Act because this sub-section did not require that there should be under statement of consideration. However, the Hon'ble Supreme Court after detailed analysis observed that the burden was still on the revenue to prove that the assessee had actually received extra consideration. In fact later on Section 52(2) itself was omitted.
14 Similarly in the case of CIT V. P.V. Kalyanasundaram (supra) there was a conflicting statement of the seller of the property. Sometime he stated that he has received Rs. 4.10 lakhs and sometimes stating that he has received Rs. 34.85 lakhs. The addition was deleted by the High Court.
15. However, in case before us, when survey was conducted in the premise of the seller i.e. Shri Dig Vijay and Smt. Prem Lata and Smt Prem Lata in her statement on 14.5.2007 clearly stated that the plot was sold for Rs. 38.00 lakhs. The relevant Q No. 3,4 & 5 and the answers are as under:
Q 3: Do you remember that you have sold a plot B-7-1082, Opp. Rly Station, Ludhiana to Smt. Bimla Rani R/O 31-B, Udham Singh Nagar, Ludhiana in Feb 1999?
Ans: Yes, I remember the same.
Q 4: Do you remember the sale amount of that plot?
Ans: Yes, that plot was sold for Rs. 38,00,000/- out of which Rs. 3,70,000/- was received through cheque and rest of payment was received in cash.
Q 5: Where the sale amount received by you is kept?
Ans: Some of the amount was given to my daughter Sm. Asha Aggarwal and some amount was deposited in my bank accounts. The bifurcation of the amount I do not remember at present.
16. The above clearly shows that as early as 14.5.2007 the seller has stated that she has received extra consideration apart from Rs. 3,70,000/- since the Assessing Officer has made addition merely on the basis of above, the Tribunal had set aside the matter back to the file of Assessing Officer to give opportunity of cross examination. When this opportunity was given the statement of Smt. Prem Lata was again recorded on 8.5.2008. The following questions and answers are relevant:
Q 1. Did you ever sell any property at Rly Road, Ludhiana to Smt. Bimla Bambi in February 1999 or to Shri Joginder Lal Bambi?
Ans. Yes I had sold my share in the property to Smt. Bimla Rani. The other Co-owner was Shri Dig vijay - my son.
Q 2. What was the sale consideration of your share in the said property?
Ans. It was for a consideration of Rs. 38.00 lakhs. Same facts were stated by me in my earlier statement recorded in this office last year also and that statements be also kept in mind.
Q 4. Did you file any return of income to pay capital gains tax on such transaction?
Ans. Yes, return for Assessment Year was filed on 28.11.2000 showing such capital gain at Rs. 33,78,800/- and tax was duly paid thereon. Photocopy of the return is also having submitted.
17. After the statement of assessee's representative Smt. Prem Lata was cross-examined by the representative of assessee Shri Harish Sharma and Shri Mukesh Bambi who is the son of the assessee. The various questions and answers are as under:-
Q 1. Who had given this amount of Rs. 38.00 lakhs to you?
Ans. It was given by your father Shri Joginder Lal who was accompanied by another person but name I do not recall. I do not remember exactly now but most probably it was Shri Joginder Lal (buyer) who was accompanied by another person.
Q 2. Do you know Mr. Joginder Lal by face?
Ans. No. It was only a presumption that it was the buyer.
Q 3. How the amount was utilized?
Ans. Partly it was given to my daughter. Partly kept in bank account. Some amount was used for construction of house, purchase of car and payment of taxes etc. Q 4. Do you have any details about your bank deposits?
Ans. Presently I do not remember. I have suffered from two heard attacks and presently not keeping good health.
Q 5. Can you tell me name of the Bank?
Ans. I do not remember.
Q 6. Present Bank account, if any, Pl give details?
Ans. It is (i) Canara Bank Rajpura Road, Ludhiana (ii) Bank of Baroda, Tagore Nagar, Ludhiana (iii) Indian Overseal Bank, Exst Counter, Arya College. Some accounts stand now closed.
18. Similarly the statement of Shri Dig Vijay was recorded on 8.5.2008 and relevant questions and answers are as under:
Q 1. Did you ever sell any property at Rly Road, Ludhiana. If so please give details of such property and its buyers?
Ans: Yes, I sold a plot of land at Rly Road, Ludhiana to Shri Joginder Bambi in Feb, 1999.
Q 2. What was the sale consideration?
Ans. It was sold for Rs. 38.00 lakhs.
Q 3. What was the mode of receipt of Rs. 38.00 lakhs?
Ans. It was partly by cheque and partly by cash.
Q 4. Can you tell about cheque amount or cash?
Ans. Cheque amount was as per sale deed and balance was in cash.
Q 7. Can you specify utilization of such cash amount?
Ans. Partly it was spent on construction of my residential H No. 88-C, Udham Singh Nagar, Ludhiana. About balance I do not remember the detailed now.
Q 8. Did you pay any tax on such capital gain/ and if so can you give me a copy of your IT return?
Ans. Yes, taxes were paid but copy of such I.T. Return is not presently available with me.
19. Shri Dig Vijay was also examined by Shri Harish Sharma representative of the assessee and Shri Mukesh Bambi son of Shri Joginder Lal and Smt. Bimla Rani. The relevant questions and answers are as under:
Q 3. Do you remember who paid you cash amount at the time of execution of sale deed?
Ans. I do not remember at present.
Q 5. What were reasons for not declaring such enhanced value (cash also) while filing original return of income?
Ans. Original return was field as per sale deed only.
Q 6. After survey what were the reasons for declare cash amount in the revised return / revised income computation chart filed with the letter dated 6.11.2000?
20. The main objection of the ld. counsel of the assessee is that the survey was conducted in the premise of the seller and some incriminating documents were found and to convert the concealed income the sellers have preferred to declare the income by way of extra consideration. The seller was not able to give the names and addresses who had paid such amounts. The Assessing Officer has already dealt with these objections in para 11 elaborately and we find nothing with these observations. The seller Smt. Prem Lata has clearly stated that money was given to her by Shri Joginder Lal. We fail to understand what is wrong if the husband of the assessee who was also part purchaser of the property then definitely he would take cash for delivery. Simply that Smt. Prem Lata did not know him personally would not make her statement incorrect. It is wrong that she has not given proper utilization of the sums. She had clearly stated in reply to Q No. 3 that part of the money was given to her daughter, part was kept in the bank account and some amount was used in construction. It is significant to note that identical statement was given even on 14.5.2007 which means she had not changed her stand. The ld. counsel of the assessee has argued vehemently because of the survey operation where incriminating documents were found, the seller had tried to disclose the concealed income by way of declaring higher sale consideration and part of the tax was saved by claming exemption u/s 54 of the Act. The Assessing Officer has actually observed in para 11(i) that there is no wrong with that. We agree with the observations in para 11(i) which are reproduced as under:
""(i) It is totally incorrect on the part of the assessee or his A/R to claim that during survey various incriminating documents were found from business premises of seller Shri Digvijay but the Department accepted revised return showing capital gains based on sale consideration of 38 lakhs and ignoring other incriminating documents found during survey. Such a contention raised by the assessee is just without any evidence and is totally devoid of any merit. The assessee has not pointed out as to what incriminating documents were found at the premises of sellers and how the assessee had come to know about such incriminating documents. In their statements or even in cross examination both the sellers have not admitted that statements recorded during survey were under any threat
21. Further it is significant to note that by making this allegation the ld. counsel of the assessee is trying to tell the conduct of the seller that they were not very clean people because survey was conducted in their premise where incriminating documents were found. But if same theory is applied then assessee's conduct is no better because search was conducted in group of assessee's firm and ultimately sum of Rs. 3.00 crores has been surrendered and assessee's group has approached the Settlement Commission. This clearly shows that the assessee's group was involved in generating income which wass not declared to income-tax and therefore, the probability that the assessee has paid higher consideration for purchase of plot cannot be ruled out in the light of glaring evidence available in the firm of higher sale consideration declared by the seller. The observations of the Settlement Commission which has been reproduced by the Assessing Officer as under:
"(i) It is totally incorrect on the part of the assessee or his A/R to claim that during survey various incriminating documents were found from business premises of seller Shri Digvijay but the Department accepted revised return showing capital gains based on sale consideration of 38 lakhs and ignoring other incriminating documents found during survey. Such a contention raised by the assessee is just without any evidence and is totally devoid of any merit. The assessee has not pointed out as to what incriminating documents were found at the premises of sellers and how the assessee had come to know about such incriminating documents. In their statements or even in cross examination both the sellers have not admitted that statements recorded during survey were under any threat."
22. The above clearly shows that the Settlement Commission was of the view that the evidence produced by the Department for purchase of property at Rs. 76.00 lakhs cannot be brushed aside. In fact the Settlement Commission wanted the assessee to declare this amount also as undisclosed income but the assessee choose to litigate the same before the appellate authority. Therefore, the seller has declared higher consideration clearly pointing out that the assessee has purchased this plot by paying lot of consideration in cash.
23. As far as comparable examples are concerned the assessee has claimed to purchase the plot but the letter addressed by the seller, Shri Dig Vijay to the ITO, copy of which at page 29 reads as under:
" The Income Tax Officer Ward 11(1) Ludhiana Sub: Dig Vijay C/O M/s Kundan Lal & Sons, 26/9 Partap Chowk, Ludhiana, A/Y 1999-2000, GIR 306-D Sir, Return of income for A.Y 1999-2000 was filed by me declaring total income at Rs. 98,612/- on 27.3.2000 in your Hon'our's office.
At the time of filing the original return I had declared long term capital gains at Rs. 4960/- on sale of a residential house situated at GT Road, Ludhiana. Fact of the matter is that this house was actually sold by me for Rs. 38 lacs whereas while filing the return the sale proceeds has been returned at Rs. 3,70,000/-. A revised computation chart of income has been prepared showing the total sale proceeds at 38 lacs and the tax due on the revised computation at Rs. 4,29,147/- has been deposited on 31.8.2000.
It is respectfully prayed that assessment may kindly be framed on the basis of the revised computation being submitted and the return already filed on 27.3.2000 may kindly be deemed to have been revised to this extent.
Thanking you, Yours faithfully, Sd/-
Dated: 6.11.2000 (Dig Vijay) "
24. The above highlighted portion clearly shows that the assessee has purchased a house. Since copy of sale deed has not been furnished even after this was pointed out by the Bench (see our observation at page 8). Moreover this plot is located Opp. Railway Station, Ludhiana which is most prime location and it transpired during the hearing that the assessee has already constructed a Hotel there. Therefore, the same cannot be compared to the other instances cited by the ld. counsel of the assessee because they refer only to the plot and their location is near Railway Station and not opposite Railway station. Therefore, in our opinion, the assessee has clearly paid higher consideration which have been rightly brought to tax by the Revenue.
25. Our above view is supported by the decision of Hon'ble Punjab & Haryana High Court in case of Shashi Kiran V. CIT. 195 Taxman 332 (PH). In this case also the assessee has purchased a piece of land along with another from one Shri Inder Pal Garg by a sale deed dated 8.6.2004 for ostensible consideration of Rs. 5.00 lakhs. A notice u/s 153C was served. On the basis of information that sale price was offered at Rs. 11,19,000/- which was detected because of survey conducted on the premise of seller. The difference was added to the income of the assessee. The Hon'ble Punjab & Haryana High Court discussed the case of K.P. Varghese V. ITO (supra) as well as Paramjit Singh V. ITO (supra) and observed that definitely the revenue has to prove higher consideration. Ultimately the head note reads as under:
"There is no doubt that burden of proving higher consideration is on the Revenue but the same can shift to the assessee by presumption of law and facts having regard to facts and circumstances of the case. The assessing authority may presume existence of facts which may appear to have happened, having regard to common course of events or human conduct in the facts of a particular case. In the present case, the seller declared the sale consideration to be Rs. 11,90,000/- in his return as against Rs. 5,00,000 shown by the assessee. The seller confirmed the said consideration. The assessee was allowed to cross examine the said seller and the stand about valuation could not be shown to be wrong. The assessee did not lead any evidence to show the probable value of the property on the date in question. In these circumstances, there is no error in the view consecutively taken by all the authorities that the Revenue was able to discharge the burden that sale consideration mentioned in the sale deed was not real. Contention raised on behalf of the appellant cannot, thus, be accepted. No substantial question of law arises - Bai Hira Devi & Ors. V. Official Assignee of Bombay AIR 1958 S.C 448 applied; Paramjit Singh V. ITO (2010) 37 DTR (PH) 228 distinguished."
26. In the case before us, the facts are similar to the facts which were there in case of Shashi Kiran V. CIT (supra). Moreover the seller has given a categorical statement during cross examination that they had received a sum of Rs. 38.00 lakhs as total consideration including Rs. 35,30,000/- as cash in addition to Rs. 3,70,000 stated in the sale deed. Further this amount has been duly declared by the seller in their revised return and the assessee has not been able to controvert this evidence. Therefore, in our opinion, particularly in the light of the decision of Hon'ble Punjab & Haryana High Court in case of Shashi Kiran V. CIT (supra) the assessee must have received total consideration of Rs. 38.00 lakhs and accordingly we confirm the order of the ld. CIT(A).
ITA No. 1441/Chd/201027. In this appeal the assessee has raised identical grounds which have been raised in the above noted appeal filed by her in capacity of legal heir. Since all the facts are identical and therefore, following the above decision this appeal is also dismissed.
28. In the result, both the appeals filed by the assessee are dismissed.
Order pronounced on 09 .07. 2012
Sd/- Sd/-
(H.L. KARWA) (T.R. SOOD)
VICE PRESIDENT ACCOUNTANT MEMBER
Dated: 09.07.2012
SURESH
Copy to: The Appellant/The Respondent/The CIT/The CIT(A)/ The DR
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