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2. These appeals are interlinked as the impugned additions relate to the same transaction of sale and purchase of property. Assessee Mohinder Singh (since deceased through his legal heirs) was the seller of the property whereas assessee Malkiat Singh was the purchaser of the property.

3. The brief facts relevant to the issue under consideration are that during the election days, a police party intercepted the vehicle of Shri Mohinder Singh, assessee (since deceased, now represented through his legal heirs) and recovered the cash amount of Rs. 2,46,30,000/-. The information was also given to the income tax authorities who reached the ITA No. 665 & 666/Chd/2016 & 747/Chd/2016 police station and recorded the statement of Shri Mohinder Singh u/s 131 (1A) of the Income Tax Act. In his statement, Shri Mohinder Singh stated that he was an agriculturist and that the source of the aforesaid cash was from the sale of his agricultural land at Village Deelwal to one Shri Malkiat Singh S/o Shri Balwant Singh (appellant in ITA No. 474/Chd/2017), who was a property dealer and was dealing in properties along with M/s J.P. Properties Dealers, having its office, opposite Punjabi University, Patiala. Shri Mohinder Singh also produced the photocopies of the three sale deeds dated 23.11.2012, 28.12.2012 and 4.2.2013, however, the total sale value mentioned in all the three sale deeds was Rs. 42,37,500/-. He was asked to explain the source of the remaining amount of Rs. 2,03,92,500/- but he insisted that the entire amount was relating to the aforesaid sale of land. He explained that the sale deed was executed at Govt./Circle rates which was less than the actual consideration received by him. But the income tax authorities were not satisfied with his explanation, hence, an authorization u/s 132 A of the Income Tax Act was issued by the DIT (Investigation) Ludhiana and cash amounting to Rs. 2,03,92,500/- was requisitioned and seized u/s 132A of the Income Tax Act. Statement of Shri Malkiat Singh was also recorded in which he denied of having paid any other money except the sale consideration depicted in the sale deeds. He also denied of having any relation with M/s J.P. Properties Dealers. However, he submitted that he runs his business of property dealer, opposite Punjabi University, Patiala, but he could not give complete address of his office. Income tax authorities made discreet inquiries but no such office could be found. Subsequently, a survey action was carried out u/s 131A on the premises of Shri Jagdev Singh, Prop. M/s J.P. Property ITA No. 665 & 666/Chd/2016 & 747/Chd/2016 Dealer, Patiala on 23.4.2013 and his statement was recorded in which he stated that he knew Shri Malkiat Singh, who had paid a sum of Rs 2,46,30,000/- to Shri Mohinder Singh to purchase the property through three different sale deeds but all the sale deeds were executed at circle rate depicting total sale consideration at Rs 42,37,500/-. Subsequently, summons were sent by the Income Tax Authorities (Investigation Wing) to Shri Malkiat Singh, to appear on 29.4.2013 but he simply sent the copy of his income tax return and did not appear in person. From the statements of Shri Mohinder Singh, Shri Jagdev Singh and from the conduct of Shri Malkiat Singh it was inferred by the income tax authorities that Shri Malkiat Singh paid cash of Rs 2,46,30,000/- to Shri Mohinder Singh to purchase the properties. Hence, it was concluded that Shri Malkiat Singh could not satisfactorily explained the source of the aforesaid amount and that the same was required to be assessed as unaccounted income u/s 69 of the I.T. Act in the hands of Shri Malkiat Singh. In the case of Shri Mohinder Singh, it was observed that had the cash not been seized by the police and requisitioned by the income tax department, Shri Mohinder Singh would never had paid capital gains tax. The Dy. Director of Income Tax (Investigation), Patiala accordingly in his appraisal report suggested the assessing officer to go through the relevant statements and the evidences an assess the unaccounted income of Rs. 2,46,30,000/- in the hands of Shri Malkiat Singh and Shri Mohinder Singh. The assessment proceedings accordingly were carried out in the case of Shri Mohinder Singh u/s 143(3) read with section 153A of the Act, [though mentioned by the AO as 153 B (1)(b)]. The assessment in the case of Shri Malkiat Singh was also reopened u/s 147 of the Act.

5. In the case of Shri Malkiat Singh, the AO confronted him of with the statement of Shri Mohinder Singh recorded at the time of seizure of the amount from him, the reply dt. 5.11.2015 filed by Shri Jasvir Singh S/o Shri Mohinder Singh, wherein they have stated that the actual sale consideration for the land sold by them was Rs. 2,46,30,000/- and not Rs. 42,37,500/-. Shri Malkiat Singh was also confronted with the statement of Shri Jagdev Singh recorded by the DDIT (Investigation) to this effect. Further, the statement of Shri Jagdev Singh Prop. of M/s J.P Property Dealers was also recorded on 21.3.2016 during the assessment proceedings. When confronted with the above, the assessee Shri Malkiat Singh could explain the source of investment of 42,37,500/- only , the amount which he claimed to have paid to Shri Mohinder Singh as sale consideration of the property, The AO accordingly added the remaining amount of Rs.2,03,92,500/- into the income of the assessee Sh. Malkiat Singh as unexplained investment. Further, an amount of Rs. 27,45,500/- was added to the income of the assessee from the property dealing business of the assessee. It is pertinent to mention here that both the assessees namel y ITA No. 665 & 666/Chd/2016 & 747/Chd/2016 Shri Mohinder Singh and Shri Malkiat Singh were assessed by different assessing officers.

11. On the other hand, Shri N.K. Shahi, Advocate, Ld. counsel for the purchaser Shri Malkiat Singh, has submitted that the actual sale consideration paid was Rs. 42,37,500/- and that the same was correctly written in the sale deeds. That there was no evidence that any extra money has been paid by Shri Malkiat Singh. That when the terms of a deed are required to be reduced into writing and also the said writing is required to be registered under the law, then the oral evidence in relation to the terms of such registered sale deed was not admissible. That even the amount was recovered from Shri Mohinder Singh on 26.2.2013 i.e. after a gap of 94 days of the execution of the first sale deed and after a gap of 22 days from the execution of the last sale deed on 4.2.2013. That the addition, if any is warranted, that has to be made in the hands of the ITA No. 665 & 666/Chd/2016 & 747/Chd/2016 persons from whom the cash was seized. The reliance of the lower authorities on the oral evidence of the seller and his son was misplaced as they were interested parties. That even during the assessment proceedings, Shri Mohinder Singh seller, did not appear before the AO rather a reply was filed by Shri Jasvir Singh, on his behalf, even that was not a sufficient or reliable evidence to assume that any consideration higher than that was depicted in the sale deed was paid by Shri Malkiat Singh to Shri Mohinder Singh. That Shri Jagdev Singh was neither a witness to the sale deeds nor he could bring any material on record of any extra payment by Shri Malkiat Singh. That the AO had failed to consider the affidavit of Shri Malkiat Singh declaring that he purchased the land for a sum of Rs 42,37,500/- only. Even the lower authorities ignored the statement made on oath by Shri Malkiat Singh before the Investigation Wing. He in this respect has relied upon the decision of Hon'ble Supreme Court in the case of 'K.P. Varghese Vs ITO' [1981] 131 ITR / 7 Taxman 13 (SC). He has further relied upon the following decisions:

v) Very small parts of the land were sold vide three sale deeds.

Though the land was purchased by Sh. Malkiat Singh as agricultural land but the same was sold in the form of residential/commercial plots without carrying out any further development activity.

vi) Though Shri Malkiat Singh claimed himself to be in the business of property dealer, however, he could not give the exact address of his office. Further, the address mentioned by his is of the same locality in which the office of Sh. Jagdev Singh of M/s J.P. Property Dealer exists. Shri Jagdev Singh had also admitted that he had received commission out of the aforesaid transactions.