Income Tax Appellate Tribunal - Delhi
Parminder Chadha, New Delhi vs Assessee on 29 December, 2009
1
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : "H" NEW DELHI
BEFORE SMT. DIVA SINGH, JM AND
SHRI J.SUDHAKAR REDDY, AM
ITA no. 992/Del/2011
Assessment Year : 2008-09
Shri Tej Pal Singh vs. ACIT, CC 1
10, Mathura road, Jangpura Faridabad
New Delhi
PAN: ALJPS 2151 E
ITA no.993/Del/2011
Assessment Year : 2008-09
Shri Parminder Chadha vs. ACIT, CC - I
New Delhi New Delhi
(Appellant) (Respondent)
Appellant by:- Shri Ajay Vohra, Adv.
Respondent by:- Sh. R.S.Meena, CIT, DR
ORDER
PER J.SUDHAKAR REDDY, AM
Both these appeals are filed by the assessee and are directed against separate orders of the Ld.Commissioner of Income Tax (Appeals)-I, Ludhiana for the A.Y. 2008-09. In the case of Mr.Tej Pal Singh, the Ld.Commissioner of Income Tax (Appeals) followed his decision in the case of Smt.Parmidner Chadha.
22. Facts in brief:- The assessee is an existing Income Tax assessee filing his Return of Income regularly for many years. He is presently employed as an executive with Max New York Life Insurance Co. Ltd. His source of Income comprises mainly of Salary Income and Interest income. However for the said Assessment Year, the assessee, apart from regular sources of income, had declared Long Term Capital Gains on sale of Land at Mewla Maharajpur, Faridabad.
A Search and Seizure operation u/s 132 of the Income Tax Act was carried out at the residential premises of the assessee on 16.01.2008. Search warrant was issued in the name of " Smt. Parminder Chadha and Shri Tej Pal Singh". Notice u/s 153A was issued in the name of assessee individually. In response Returns for Assessment Year 2002-03 to 2007-08 were filed. These are the same returns as were originally filed. These original returns of income were processed u/s 143(1) without adjustments. Notice under Section 142(1) was also issued to file Return of Income for the said assessment year. In response the assessee filed a Return of Income declaring an Income of Rs.17042411/-, the same Income which was declared in original Return filed u/s 139(1). In the said Return of Income, apart from other Incomes, the assessee had declared Long Term Capital Gains on sale of Plot in Mewla Maharajpur, Faridabad sold for a total sum of Rs.5.5 crores of which the assessee was beneficiary of one-third share.
3As per Order passed by the Assessing Officer u/s 143(3) it was alleged that The Income Tax Department while conducting search at the premises or Piyush Group received a document from "anonymous sources" through fax purporting to be an Agreement to Sale of the said Property at Mewla Maharajpur, Faridabad as per which the said land was agreed to be sold by the sellers namely the assessee, Smt. Parminder Chadha and Smt. Kavita Chadha (to the extent of one third share each) to the buyers for a sum of Rs.18 crores, Admittedly this was a faxed document received through anonymous sources and on being confronted, the assessee and the buyers vehemently denied having ever entered into any such Agreement to sale of the said property at this consideration. They however stated that there was an earlier agreement to sell the property at a sum of Rs. eight crores which due to some problems in title in the land got reduced to Rs.5.5 crores and the final sale deed was executed at this sum of Rs.5.5 crores and this was the consideration which passed on to the vendors. Importantly no such document or semblance of such document of Rs. 18 crores was seized during search operations from the premises of vendors or the vendees. The Department on specific requests has not been able to produce original copies thereof and the assessee and the vendees have being crying hoarse that this document was a forged document.
The Assessing Officer relying on this document has taken total sales consideration of the said land at Rs.18 crores (of which assessee's share is one third) and has consequently calculated Long Term Capital Gains in case of assessee based on his share in the said consideration, mainly for which and 4 for other grounds which are urged herewith without prejudice to one another, the assessee is in appeal.
3. The A.O. assessed the total income at Rs.4,21,17,720/- in the case of Mr.Tej Pal Singh and Rs.5,52,96,060/- in the case of Mr.Parminder Chadha.
The assessee filed an appeal before the First Appellate Authority who dismissed the appeal.
4. Aggrieved the assessee is in appeal before us on the following grounds.
1. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not quashing the assessment order dated 29.12.2009, passed by the assessing officer under section 143(3) read with section 153A of the Income-tax Act, 1961 ('the Act'), being beyond jurisdiction, bad in law and void ab-initio.
1.1. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A, since the same was made on the basis of invalid search carried out under section 132 of the Act, and consequently the assessment order was illegal and bad in law.
1.2. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A, since the same was made on the basis of search carried out under section 132 of the Act, which was illegal, being carried out without proper authorization given by competent authority.
1.3. That the CIT (Appeals) erred on facts and in law in not quashing the impugned assessment order passed under section 153A of the Act on the appellant, in her individual capacity, whereas search warrant and panchnama were issued/drawn in the joint name of Smt. Parminder Chadha and Shri Tej Pal Singh.
1.4. That the CIT (Appeals) erred on facts and in law in not quashing / setting aside the assessment completed under section 153A of the Act without following settled principle of natural justice.
2. That the CIT (Appeals) erred on facts and in law in upholding the action of the assessing officer in making an addition of Rs. 16,66,666/- under the head "long term capital gains" on account of alleged proportionate undisclosed sale consideration of property at Mewla Maharajpur, Faridabad for Rs. 18 crores (appellant's share being one-third) as against aggregate sale 5 consideration of Rs. 5.5 crores declared by the appellant in respect of the said property in the return of income.
2.1 That the CIT(Appeals) erred on facts and in law in upholding the action of the assessing officer in drawing adverse inference against the appellant qua receipt of undisclosed sale consideration in respect of impugned property at Rs. 18 crores, on the basis of agreement to sell, dated 15.2.2007, allegedly entered between the appellant (seller) and the Piyush Infrastructure India P.Ltd. (purchaser), which was received by way of fax from anonymous sources during the course of search operation being carried out at the premises of a third party, viz., Piyush Group.
2.2 That the CIT(Appeals) erred on facts and in law in not appreciating that the aforesaid agreement was not reliable, more so since the document was neither found at premises of appellant nor the purchaser during course of search operations and execution of same was denied both by the seller (appellant) and purchaser(s) (Piyush Infrastructure India Pvt. Ltd. through Director) and was contrary to actual sale deed in respect of the same property executed between the parties and registered with appropriate authority of State Government.
2.3 That the CIT(Appeals) erred on facts and in law in holding that the two receipts towards receipt of Rs. 1 crore and Rs. 2.70 crores in respect of the impugned property, found from the premises of the appellant during the course of search, was sufficient evidence to prove that the appellant had received excess consideration than that disclosed in the return of income.
2.4 That the CIT(Appeals) erred on facts and in law in not appreciating that the aforesaid receipts were only draft receipts, which were prepared by Smt. Parminder Chadha in anticipation of agreement to sell, dated 1.2.2007, entered between the parties for sale of same property at Rs. 8 crores, which was not finally executed and was cancelled by the parties subsequently.
2.5 That the CIT(Appeals) erred on facts and in law in holding that the plea that the amounts stated in draft receipts were prepared by the appellant in anticipation of the proposed agreement to sell for Rs. 8 crores, which was subsequently cancelled, was not taken during the course of assessment proceedings and thus could not be relied upon.
2.6 That the CIT(Appeals) erred on facts and in law in not appreciating that if the receipts for aggregate amount of Rs. 3.7 crores were real and not draft receipts, the same should have been found from the premises of the purchasers of the property (Piyush Group). That the CIT(Appeals) further erred on facts in stating that these draft receipts had been issued to the prospective purchasers whereas the appellants have always maintained that these were 6 "draft" receipts which were never issued to the buyers as no consideration had been received against these.
2.7 That the CIT(Appeals) erred on facts and in law in relating the receipts for aggregate amount of Rs. 3.7 crores to the appellant even though these did not bear his signatures and hence he could not be a beneficiary to this amount.
2.8. That the CIT(Appeals) erred on facts and in law in holding that the explanation given by the appellant qua receipt of Rs. 2 crores by Smt. Parminder Chadha by cheques from Piyush Group to the effect that the same was in respect of different proposed agreement to sell, was an afterthought. That the CIT(Appeals) erred in relating these cheques to the appellant even though these were received by Smt. Parminder Chadha in her personal capacity and were never found credited in bank account of appellant and hence he could never be a beneficiary to this amount.
2.9 That the CIT(Appeals) erred on facts and in law in not expunging the incorrect findings/observations made by the assessing officer, on pure conjectures and surmises, that the appellant had made investment of Rs.l,42,50,000 in commercial property of Piyush Group instead of actual declared investment of Rs.62,04,170/- and had further erred in holding that balance amount of Rs.80,45,830 was adjusted out of the alleged sale consideration of Rs. 18 crores.
2.10 That the CIT(Appeals) erred on facts and in law in upholding the reliance placed by the assessing officer on the ex-parte statement of Shri Harish Singla without appreciating that:-
(a) statement by Mr. Harish Singla is not reliable since he had been taking contradictory stands;
(b) Mr. Harish Singla had changed his statement just to settle scores with Goel Faction of Piyush Group as at the time of changing his statement, he was drawn in a courtroom battle with Goel Faction of Piyush Group over control of Group Companies from which he had been ousted.
(c) such statement cannot be relied upon without allowing cross-examination to the appellant.
The appellant craves leave to add to, alter, amend or vary the above grounds of appeal.
5. Mr.Ajay Vohra, Ld.Advocate represented the assessee and Shri R.S. Meena, Ld. CIT, D.R. represented the Revenue. The sum and substance of the 7 argument of Mr.Ajay Vohra is that the addition made in the hands of the purchasers of the said land, on the same set of facts and based on the same material has been deleted by the Tribunal in its order dt. 25.10.2012, 'F' Bench of the Delhi Tribunal in the case of M/s Piyush Infrasturcture India P.Ltd. in ITA no.1072//Del/2011. He submits that the issue is covered in his favour. He did not press ground nos. 1 to 1.4.
6. The Ld.D.R. on the other hand argued at length and tried to distinguish the findings in the order of the Tribunal in the case of M/s Piyush Infrasturcture India P.Ltd. (supra).
7. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and a perusal of the papers on record and the orders of the authorities below, we hold as follows.
8. The undisputed fact is that the material seized during the course of search and information gathered by means of post search queries did not form the basis of the addition. In the case of M/s Piyush Infrasturcture India P.Ltd. (supra) on the very same transaction, the Tribunal considered each set of evidences relied upon by the Ld.A.O. and deleted the addition of Rs.12.5 crores made in the hands of the purchaser. Before us is the case of the sellers of this property. In view of the findings of the Coordinate Bench of the Tribunal on the very same material and for the very same transaction, we have no other alternative but to delete the additions in question and allow the appeals of the assessee. The Tribunal at para 3.10 onwards held as follows.
8"3.10. We have considered the arguments advance by the parties and have gone through the orders of the authorities below, material available on record and the decisions relied upon. Undisputedly onus lies upon the claimant to establish the genuineness of its claim. We have to decide in the present case as to whether the evidence furnished by the AO was sufficient to establish his allegation that the amount in consideration for the purchase of property in question was Rs.18 crore. As discussed above the ld. DR has referred 5 sets of evidences to establish the allegation of the AO. First set of evidence is copies of the alleged agreement to sell along with other papers received by the department from anonymous sources. Copies of these documents have been made available at page nos. 26 to 30 of the PB filed by the assessee. It is agreement to sell dated 5th Feb. 2007. The copy of other document has been placed at page no. 75 of the pb-II. It is copy of a receipt received on fax by the department. In the said agreement dated 15.2.2007 between the Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita as first party and the assessee as second party, the consideration amount for the sale of the property at Mewla, Maharajpur, Faridabad has been shown at Rs.18. crore. The submission of the Id. DR remained that the agreement dated 15.2.2007 has been signed by both the parties concern. Similarly the said receipt dated 15.2.2007 showing the receipt of Rs.1 crore in cash and a cheque of Rs.l crore dated 15.2.2007 drawn on Punjab National Bank has been signed by both the parties. The ld. DR submitted further that the other evidence discussed in the remaining sets of I evidence corroborate the payment of Rs.18 crore agreed upon between the parties as the total consideration for the purchase of the property by the assessee however, in the sale deed registered, the amount paid through cheque for Rs.5.50 crore only has been shown as the sale consideration. As per him the remaining amount out of Rs.18 crore has been paid in cash. So far other sets of evidence are concern we will discuss its reliability in the succeeding paragraphs. The contention of the ld. AR against the reliability of the first set of evidence remained that both the alleged agreement dated 15.2.2007 and receipt dated 15.2.2007 have been sent to the department on fax from the unknown person and hence in absence of identity of the source and original copies of these documents, the same cannot be relied upon. He contended further that even the telephone no. name appearing on fax message was not investigated despite specific request of the assessee during the course of assessment proceedings. In support he referred page nos. 31 to 33 of the paper book and also the reply dated 19.11.2009 in this regard reproduced at page no. 7 of the assessment order. The ld. AR contended further that since the fax message has not been found from the premises of the assessee, the onus to establish its genuineness does not lie upon the assessee. He has placed reliance on several decisions in support. Having gone through these decisions we 9 find that in the case of District Magistrate Vs. R. Kumaravel (Supra) the Hon'ble Supreme Court has been pleased to hold that a telegramme by itself is not an authentic document, it is like and unsigned and anonymous communication, unless a telephone is confirmed by a subsequent signed application, representation or an affidavit; the contents of the telephone have no authenticity at all and the same cannot be taken into consideration for assessing the value of the other authentic documents on the record. In that case before Hon'ble Supreme Court the detention order was passed by the District Magistrate on the basis of the material placed before him by the Police Authorities. The Hon'ble High Court was pleased to hold that any material received by the District Magistrate in the shape of telegram could not be taken into consideration by him in the absence of any subsequent communication confirming the same. The Delhi Bench of the Tribunal in the case of Ram swaroop Saini (HUF) Vs. ACIT (Supra) has held that a mere photo copy of a document cannot be considered to be reliable unless the original document is brought on record. In that case the AO was in possession of copies of the alleged agreement to sell which showed higher price than that recorded in the sale deed and the AO did not possess the original nor he informed as to how the copies of the said agreement to sell came into his possession. Similar are the fact in the present case the AO was not having the original copies of the agreement to sell and receipt both dated 15.2.2007 nor had he disclosed the identity of the person who had sent these documents to the department through fax. Respectfully following the above decisions relied upon by the ld. AR we hold that these documents were not having any evidentiary value in the eyes of law hence, these are not reliable. In other words on the basis of these documents alone it cannot be said beyond doubt that the sale consideration involved in the transaction of the property in question was Rs.18 crore instead of Rs.5.50 crore shown in the registered sale deed.
3.11 So far as second set of evidence relied upon by the ld. DR is concerned, these are the copies of two receipts made available at page nos. 91 to 92 of the pb (d). The copy of cash receipt of Rs.1 crore dated 11.4.2007 has been placed at page no. 91 of the pb (d) and receipt of Rs.2.70 crore dated 14.5.2007 has been placed at page no.92 of the pb (d). In the copy of receipt dated 11.4.2007 amount of Rs.1 crore in cash shown to have been received in lieu of a part payment towards agreement of sale dated nil from the assessee. In the receipt dated 14.5.2007 an amount of Rs.2.70 crore shown to have been received by the assessee as in lieu of a part payment towards agreement of sale dated nil. Thus Rs.3.70 crore has been shown paid in cash as a part payment towards agreement to sell by the assessee to the owners of the property. The ld. DR submitted that the amount shown in these receipts paid in a cash corroborates 10 this fact that these payments were made above the amount shown in the sale deed at Rs.5.50 crore through cheque. The contention of the ld. AR remained that these receipts have not been shown signed by the remaining Co-owners of the property i.e. Sh. Tej Pal Singh and Ms. Kavita nor these receipts have been signed by the assessee. His further contention remained that these receipts should have been found from the possession of the assessee since assessee was the purchaser of the property from Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita however, these have been recovered from the possession of Smt. Parminder Chadha. He submitted further that Smt. Parminder Chadha in her statement recorded on 24.11.2009 has stated that the copies of the said receipts found from her possession during the course of search are draft copies of the receipts which were to be issued when the amount was to be received. She submitted that there was an agreement to sell the property in question for Rs.8 crore which could not be materialized hence consideration mentioned therein never passed hands. Thus these receipts were never issued to the assessee. On perusal of these receipts we observe that these are not signed by all the owners of the property but signature of Smt. Parminder Chadha only has been shown. There is also substance in the submission of the ld AR that if these receipts would have been acted upon, these should have been found from the possession of the purchaser i.e. assessee who has been shown made this payment to the owners of the property. Under these circumstances we are of the view that on the basis of these documents alone an inference beyond doubt cannot be drawn that these amount of Rs.3.70 crores were paid by the assessee to the owners of the property.
3.12 The third set of evidence relied upon by the department are copy of a letter dated 4.12.2009 along with copy of account of Smt. Parminder Chadha in the books of the assessee, made available at page nos. 41 and 42 of the Pb (d).The ld. DR submitted that these documents have been procured from the assessment record of Smt. Parminder Chadha and copies of these documents have been made available at page no. 41 and 42 of the Pb (d). In the letter dated 4.12.2009 of the assessee addressed to the AO it has been submitted that Rs.2 crore was paid separately to Smt. Parminder Chadha for purchase of other property from her and this payment is altogether a separate transaction which is being shown as advance paid in the Financial statement of the assessee. It has been submitted further that out of the above amount, amount of Rs.1 crore was received back. The transaction was not yet materialized since the title of the property was not cleared. In support ledger account of Smt. Parminder Chadha with the assessee was attached, a copy whereof has been made available at page no. 42 of the Pb (d). The ld. DR submitted that the transaction period of the 11 claimed separate deal is the same and there is no evidence of other deal on record claimed as by the assessee in his letter dated 4.12.2009. The ld. AR on the other hand contended that even if the explanation of the assessee regarding payment of this amount shown in the documents is denied, no inference can be drawn that payment was made towards the sale consideration of the present property in question.
3.13 The ld. AR submitted that there was no question of taking extra payment through cheque and during the search proceedings no specific question was asked to the assessee regarding the payment of Rs.2 crore shown in the ledger account of Smt. Parminder Chadha with the assessee, made available at page no. 42 of the Pb (d). We are not fully convinced with the contention of the ld. AR in this regard, but at the same time on the basis of the stated payment of Rs.2 crores through cheque an inference beyond doubt cannot be drawn that the amount was paid towards the sale consideration of the property in question.
3.14 The 4th set of evidence relied upon by the ld. DR are copies of the documents made available at page nos. 43 to 90 of the Pb (d). These are copies of the 3 agreements dated 14.5.2007 between the assessee at one hand and Smt. Parminder Chadha, Ms. Kavita Chadha and Sh. Tej Pal Singh on the other hand. These documents were seized from the residence of Smt. Parminder Chadha. Referring these documents, the ld. DR submitted that total consideration has not been shown in the agreement. These agreements were entered into between the assessee and the above named 3 persons for purchase of an office space measuring 2000/- sq. ft. super area in the first floor of the business park named as Mis Piyush Business Park, situated at main Mathura Road, NH-2 (Sector 27), Faridabad under the development of the assessee. Each of the said 3 persons i.e. second party shown to have agreed on the sale consideration and they have paid to the first party prior to the execution of the agreement an amount of Rs.62,04,170/- each as the booking amount through cheque and balance amount of Rs.7.50 lac each was agreed upon to be paid at the time of handing over of the possession. The ld. DR submitted that they have paid only Rs.62,04,170/- individually through cheque and the balance amount of Rs.80,45,830/- individually has been shown as closing balance. Though substantial amount is due to be paid by the aforesaid 3 sellers to the assessee company for booking of the aforesaid commercial space, but they are receiving assured interest on the above payment which clearly indicate that the balance shown has been adjusted out of the cash payment to the sellers the property in question. The ld. DR pointed out further that an advance of Rs.1 crore given by cheque as mentioned in the agreement dated 15.2.2007 has been adjusted 12 against total purchase amount of Rs.5.50 crores mentioned in the sale deed. He submitted that these facts clearly lead to a conclusion that the property in question has been purchased by the assessee for Rs.18 crores as against Rs.5.50 crores shown in the sale deed and balance amount ofRs.12.50 crores has been paid in cash.
3.15 The ld. AR contended that the office premises booked in the name of the above 3 persons in the business complex to be developed by the assessee concern does not in any way support the allegation of the A.O. that the total sale consideration in the case of property in question purchased by the assessee was Rs.18 crores. He pointed out that the said business complex could not be developed by the assessee and the land on which the said business complex, was to be developed is still in dispute and no construction has been raised so far. It is only an imagination of the Assessing Officer that any adjustment of sale consideration of the property in question has been made against booking of the space by the above 3 persons. He submitted that the sale consideration of the property at Rs.5.50 crores as per registered deed of the property has already been paid by the assessee. Considering these submissions we are of the view that there is no evidence beyond doubt to establish the allegation of the department that the amount payable by the above 3 persons towards their booking of the space in the business premises to be developed by the assessee, was actually paid to the assessee by way of adjustment of the sale consideration towards the property in question above the amount shown in the sale deed or towards Rs.18 crores shown in the alleged agreement to sell dated 15.2.2007 received by the department on fax.
3.16 The 5th set of evidence relied upon by the AO and ld. DR are the set of statements of Sh. Harish Singla recorded by the AO on 20.10.2010, wherein he has specifically stated that the property in question was purchased for Rs.18 crores however, in the sale deed amount of Rs.5.5O crores paid through cheque only was shown. The ld. DR submitted that Sh. Singla during the period when the transaction was entered into was director of the assessee company and he also remained signatory of the agreement as well as sale deed on behalf of the assessee company. His statement has thus got evidentiary value and has been rightly relied upon by the AO.13
3.17 The contention of the ld. AR in this regard remained that the said statements of Sh. Harish Singla subsequently recorded by the AO without affording opportunity to the assessee to cross-examine him cannot be used adversely against the assessee. His further contention remained that Sh. Singla has not been confronted by the AO with his contrary statements made by him during the course of search proceedings u/s 132 (4) of the Act on 16.1.2008, wherein he had stated on oath that sale consideration of the property was Rs.5.50 crore as declared in the sale deed. His contention also remained that statements recorded u/s 132 (4) of the Act on oath carries more weight and reliability and unless there is strong reason for, one cannot deviate from his such statements subsequently. No such reason has been assigned by Sh. Singla in the present case for deviating from hi earlier statement recorded u/s 132 (4) of the Act. Reliance has been placed on several decisions. It was also submitted that later on some enemity was developed between Sh. Harish Singla and the assessee which al 0 led in filing of an FIR against him on 21.11.2009 and he was also terminated from the directorship of the company. Under this background Sh. Harish Singla had deviated from his statements made during the course of search proceedings. We find substance in the above contention of the ld. AR so far as credibility and reliability of the statements subsequently made by Sh. Harish Singla in concern. It is an establish proposition of law that statements made u/s 132 (4) on oath during the course of search has got evidentiary value and for retracting from such statements there must be sufficient reason like undue influence, freight, duress to be established by such person and that such retraction should be within reasonable time. No such fact has been brought on record in the present case by Sh. Harish Singla to deviate from his earlier statements recorded u/s 132 (4) of the Act. The Hon'ble Punjab and Haryana High Court in the case of Bachittar Singh Vs. CIT (Supra) relied upon by the ld. AR, has been pleased to hold that the Tribunal was justified in holding that retraction made after 2 months was not permissible and voluntary statements recorded in the presence of family members was an important) material which could be acted upon. In that case the AO made addition on the basis of statements recorded during the course of survey. The addition was in respect of investment not recorded in the books of accounts. The assessee later on retracted from his earlier statements by taking stand that he had agriculture income to that effect investment was from that source. In the case of ACIT V s. Hukum Chand Jain (Supra) before the Hon'ble High Court of Chhattisgarh relied upon by the ld. AR, the assessee could not explain recovery of cash and jewellery during the course of search proceedings and in his statement recorded u/s 132 (4) he had surrendered certain amount as his undisclosed income for block period and had also expressed his willingness to pay taxes worked out on 14 the surrendered income. However, in his return of income filed in response to the notice issued u/s 158 BC, he declared lower return contending that statement u/s 132 (4) was obtained under duress. The AO made assessment on the basis of surrendered income. The matter traveled before the High Court and the Hon'ble High Court was pleased to hold that when assessee did not retract his statements immediately after search and seizure was over and in return also no explanation was offered for surrender of undisclosed income at the time of search and seizure operations u/s 132 (4), it could be said that the assessee had failed to the discharge onus of proving that confession made by him u/s 132 (4) was as a result of intimidation, duress and coercion or that same was made as a result of mistaken belief of law or facts. It was held that the Assessing Officer was justified in assessing income of the assessee on the basis of surrender of undisclosed income made by the assessee u/s 132 (4) of the Act. Likewise in the case of Kanti Lal C. Shah V s. ACIT (Supra) before the Ahmedabad Bench of the Tribunal it was held that statements recorded u/s 132 (4) is an evidence by itself and any retraction contrary to that should be supported by strong evidence for demonstrating that earlier evidence recorded was under coercion. In view of these decisions we are of the view that there was no reason with Sh. Barish Singla to establish that his statements u/s 132 (4) of the Act was made under coercion, compulsion, duress or threat. In absence of such evidence the statement made u/s 132 (4) of the Act cannot be ignored merely because a different statement was made subsequently. We thus conclude that on the basis of subsequent statements of Sh. Barish Singla it cannot be held established that the property in question was actually purchased for Rs.18 crore and not for Rs.5.50 crore as declared in the sale deed and confirmed by Sh. Singla in his statements recorded u/s 132 (4) of the Act on oath on earlier occasion. The 5th set of evidence is thus of no help to the revenue.
3.18 When we look to all the facts relating to the addition of Rs.12.50 crores in question in totality, we come to the conclusion that the agreement of sale dated 15.2.2007 sent by an unknown source to the department as well as receipt dated 15.2.2007 also sent to the department on fax by unknown source or the contrary statements of Sh. Barish Singla recorded subsequently on 20.10.2010 during the course of assessment proceedings as discussed above are not sufficient in any way to establish beyond doubt that the property in question was actually sold for Rs.18 crores out of which the amount of Rs.5.50 crores paid through cheque only was shown in the sale deed and the remaining amount paid in cash was on money. So far other claimed evidences are concerned these are also not sufficient to establish the above allegation of involvement of on money. It is only an inference which has been presumed by the department that 15 the advance of Rs.2 crore (Rs.l crore in cash and Rs.1 crore by cheque) was given out of which the amount of Rs.1 crore paid by cheque dated l5.2.2007 has been adjusted against the payments shown as per sale deed; Rs.1 crore vide cheque dated 23.4.2007 and another Rs.l crore vide cheque dated 8.5.2007 were received by the assessee apart from payment shown in the sale deed of Rs.5.50 crores; Rs.1 crore shown in the receipt dated 11.4.2007 and Rs.2.70 crore shown in the receipt dated 14.S.2007 were apart from the payment shown in the sale deed and that Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita Chadha had booked the office premises in the commercial complex of the assessee and the due amount shown as closing balance in their accounts with the assessee had already been adjusted out of the cash payable to Smt. Parminder Chadha Sh. Tej Pal Singh and Ms. Kavita against sale consideration of the property in question at Mewla Maharajpur, Mathura Road, Faridabad. On the contrary in the sale deed of the property duly registered the parties have shown the consideration of Rs.5.50 crore. In their statements recorded u/s 132 (4) during the course of search proceeding all the parties to the sale deed have stated that the sale consideration of the property remained Rs.5.50 crores only.
The amount of Rs.6.70 crores which the revenue claims as per the receipts recovered was paid over and above Rs.5.50 crore consists of an undisputed amount of Rs.3 crore shown to have been paid through cheques. And even if the claim of the Department is accepted for a moment that an amount of Rs.2,41,37,490/- (Rs.80,45,830/- X 3) which remained balance to be paid by Smt. Parminder Chadha, Sh. Tej Pal Singh and Ms. Kavita to the assessee against the sale price of the office premises to be developed by the assessee was adjusted against Rs.12.50 crore the amount over and above the sale price of the property shown in the sale deed at Rs.5.50 crore, the aggregate amount comes to Rs.9,1l,37,490/-(Rs.6,70,OOOOO/- + Rs.2,41,37,490/-) only which is still not near to the alleged cash payment of Rs.12.50 crores. The decisions relied upon by the ld. DR having distinguishable facts are not helpful to the assessee. There is no question of any debate on the ratio laid down in these decisions but we will have to see its application under the facts and circumstances of the present case. In the case of Homi Jehangir Gheesta Vs. CIT (Supra) the issue was as to whether where circumstances of rejection of explanation of assessee are such that only proper inference is that receipt must be treated as income in the hands of the assessee, there is no reason why assessing authority should not draw such an inference, it being an inference of fact and not of law. he question has been answered in affirmative. In the present case before us we have also concentrated on the facts and circumstances of the case to see as to whether it leads to justifying the addition made at Rs.12.50 crores. Like wise in the case of Dhakeshwari Cotton Mills Ltd. V s. CIT (Supra) it has been held that though ITO 16 is not fettered by technical Rules of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law but in making assessment uls 23 (3) of 1922 Act he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. In the present case before us the issue raised was as to whether there were on sufficient material with the Assessing Officer to justify the addition made at Rs.l2.50 crores with this finding that the property was sold for Rs.18 crores but in the sale deed it was shown at Rs.5.50 crores and remaining amount was paid in cash. In the case of C. Vasanti Lal & Co. Vs. CIT (Supra) it was held that ITO is not bound by any technical law of evidence and it is open to him to collect materials to facilitate assessment even by providing inquiry. In the case of ACIT Vs. Jay Engineering Works Ltd. (Supra) the Hon'ble Delhi High Court has been pleased to hold that ITO not being a Court can rely upon material which may not be strictly evidence admissible under Indian Evidence Act for purpose of making an order of assessment. In that case before the Hon'ble Delhi High Court the relevant books of accounts of assessee were destroyed in fire and the Tribunal while allowing deductions claimed by assessee had taken into account as proof of material auditor's report from which it could be inferred that deductions were properly supported by relevant entries in account books, the Hon'ble High Court held that it could not be said that decision of Tribunal was not based on any evidence. Different are the facts in the present case before us. In the present case before us the AO tried to establish that there was corroboration of fact that an amount over and above the amount shown in the sale deed was paid in cash with the assistance of claimed different evidences, discussed hereinabove, either of which does not have its credibility and reliability. Similarity of certain figure alleged to have been paid in cash towards undisclosed sale consideration in the statements of a person who is adversely interested against the assessee and so alleged by deviating without reason from his earlier statements recorded under Section 132 (4) of the Act, with the figure appearing in some documents received on fax by the Department unanimously from the unknown source, in our view cannot be given the status of "corroboration of fact" in absence of some reliable evidence and circumstances in support. Reason being the onus lies heavily on the person who wishes to turn an admissible evidence as false and unreliable. In this regard we also find strength from the decision in the case of CIT Vs. Krishna Veni Ammal (Supra) relied upon by the ld. DR holding that when even according to assessee there is other documentary evidence of corroborative value and same is within reach of assessee, Judicial Body cannot act on such interested testimony of assessee alone. The Hon 'ble High Court has held further that if based evidence is not placed before the Court, an adverse inference can be drawn as against person who ought to have produced it.
17Under these circumstances we come to the conclusion that the Assessing Officer in the present case has failed to establish beyond doubt that the property in question was actually purchased for Rs.18 crore out of which the amount of Rs.5.50 crore paid through cheque only has been shown as consideration in the sale deed and the remaining amount has been paid in cash from unknown sources to justify the addition of Rs.12.50 crore made by him and sustained by the Ld.Commissioner of Income Tax (Appeals). We thus while setting aside the orders of the authorities below on the issue, direct the Assessing Officer to delete the addition of Rs.12.50 crores questioned by the assessee. The ground nos. 3 to 9 are thus allowed.
4. In the result appeal is partly allowed."
9. The Tribunal has considered all the evidences in question and after analyzing the same, deleted the additions in the hands of the purchaser. A different view cannot be taken on the same set of facts and evidences. Hence, respectfully following the same, we delete the additions in question in the hands of the assessee.
10. In the result both the appeals of the assesssees are allowed.
Order pronounced in the Open Court on 22nd November, 2013.
Sd/- Sd/-
(DIVA SINGH) (J.SUDHAKAR REDDY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: the 22nd November, 2013
*manga
18
Copy of the Order forwarded to:
1. Appellant; 2.Respondent; 3.CIT; 4.CIT(A); 5.DR; 6.Guard File By Order Asst. Registrar