TaxTMI 
TaxTMI 
2004 (6) TMI 271
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....that some cricket players and other individuals were involved in betting and fixing of matches, a search action was conducted under s. 132(1) of the IT Act at the residence of the assessee, i.e., at R-10, Nehru Enclave, New Delhi. The first operation of search was conducted on 20th July, 2000, and, thereafter the last on 25th July, 2000, on which date locker of the assessee was also searched. During the course of search at the residence of the assessee certain documents were found and seized. Page 25 of Annex. A3 was a document which contained a commission account. The figures mentioned on this document were as under: Rs. Gurgaon 2 plots (sold) 20,000 Sarvpriya Vihar flat 66,000 Oasis (Suraj Kund road) 30,000 GK-I basement 56,000 1,72,000 4.2 In relation to this document, which was marked as Annex. A3, the statement of the assessee, namely, Shri Manoj Prabhakar, was recorded on 18th Sept., 2000. The relevant question and answer in this regard is as under: "Q. 22. Page No. 25 of Annex. A3 mentions commission account which mentions a commission of Rs. 1.72 lakhs for four properties. Please explain the paper? ....
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....al cost of this flat was Rs. 30,00,000 which has been paid by Sh. Manoj Prabhakar and Simmi Prabhakar. Q. 11. Please give details of the transaction of the Oasis (Suraj Kund Road) property transaction. A. 11. Sh. Manoj Prabhakar has purchased a suite in 'K' Block of Hotel Hill view. Though initially the agreement was for Rs. 7,50,000 but subsequently some other payments were made and hence the total consideration increased to Rs. 15,00,000 which has been paid by Sh. Manoj Prabhakar. Q. 12. Please give details of the property GK-I, basement. A. 12. Sh. Manoj Prabhakar and Mrs. Simmi Prabhakar purchased the rear portion of basement of R-65, GK-I,N. Delhi, from Mr. Mishore Taklu of M/s Matang Builders for a total consideration of Rs. 28,00,000. This amount has been paid by Sh. Manoj Prabhakar. Q. 13. Please give details of the two plots (sold) at Gurgaon. A. 13. There were two plots of 200 sq. yards each in Sector 15, Gurgaon, owned by Mr. Manoj Prabhakar and Mrs. Simmi Prabhakar. These were sold in 1993-94 to some buyers the names, I don't remember, for consideration of Rs. 5,00,000 each." 4.4 On the basis of the statement of S....
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.... these transactions he did not receive the payment of commission as he was sure that Shri Prabhakar being a sports personality would definitely pay the commission to him. He also admitted that he received commission of Rs. 10,000 from the purchaser of two plots of Gurgaon, the purchase price of which was approximately Rs. 5,00,000 for each plot and out of the bill of Rs. 20,000 he received only Rs. 10,000. Regarding sale consideration of Sarvpriya flat, he disclosed that it was Rs. 33 lakhs and he billed the commission account accordingly. He also stated that he did not know the exact finally negotiated price. After his cross-examination the assessee submitted further additional submissions vide letter dt. 19h July, 2002, which are as under: "Proprietor of estate agency M/s Good Luck Estate was present when the IT authority conducted survey on the premises of M/s Good Luck Estate. Therefore, the rightful person to address the seized papers was the proprietor and not Sh. Kochhar who was helper of the estate agency. As per the cross-examination Mr. Kochhar has no clue of the negotiated amount of the above properties. It was submitted that Sh. Kochhar claims that ass....
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....eightage has been given by the assessee to Sh. Parvesh Kochhar being not the proprietor. That Sh. Parvesh Kochhar was fully involved in the property deals of assessee is further proven by the fact that he has witnessed the agreements. Usually it is the property dealer concerned who signs as a witness in the sale-purchase agreements. Statement of Sh. Parvesh Kochhar only has been recorded as he was the person in whose handwriting the commission a/c is written. It is to be noted that his father, who is the proprietor of Good Luck Estate was present during the course of survey under s. 133A of IT Act and still statement of Sh. Parvesh Kochhar was recorded, as he was the person who acted as property dealer in the sale-purchase transactions of assessee. (b) Assessee has stressed upon the consideration recorded in the sale-purchase deed and has also requested to cross-verify its correctness from other party involved in the deal. Assessee's reliance on the sale deed, though beneficial from his own point of view is out of context. It is common knowledge that property deals are done actually at a higher value than the consideration recorded in sale deed to avoid stamp duty as well ....
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.... does not help the cause of assessee as Sh. Kochhar clearly admits that the billing was done @ 2 per cent only. It is very much possible that the vendor and vendee do not pay the property dealer through books, the commission which is due to him as these transactions, most of the times, occur outside the books of accounts. (e) The contention that no amount was paid by assessee as commission also doesn't help assessee as for this reason only commission a/c was prepared and given to Sh. Prabhakar by Sh. Kochhar mentioning that such and such amount was due from the assessee. The fact that Sh. Prabhakar preserved this paper proves that it contained as unsettled account of real transactions. (f) Another point raised by assessee is as to how the commission agent was dealing with him when no payment was forthcoming. A commission agent may keep dealing with the agent getting commission from the vendor and the hope that vendee will pay the commission at a later date, etc. In fact, it has been categorically stated by Sh. Kochhar in his cross-examination that he had received commission of Rs. 10,000 on account of sale of two Gurgaon plots from other party involved and as Sh. ....
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....cular, he made the following submissions: (i) The document, i.e., Annex. A3 did not pertain to the assessee. It was not in the handwriting of the assessee nor the assessee made any payment on the basis of this document; (ii) Shri Parvesh Kochhar was not a property dealer. He was not even partner in the firm, namely, M/s Good Luck Estate. At the most his father Shri S. Kochhar could have been the commission agent as he was the proprietor of M/s Good Luck Estate. (iii) Shri Parvesh Kochhar was neither employee of the firm nor executed any agreement of commission with the assessee. Shri Parvesh Kochhar did not receive any amount from the assessee on account of commission. (iv) Shri Parvesh Kochhar was witness to the sale deeds which proved the sale consideration and any statement given by him contradictory to the version in the sale deed, which is a documentary evidence, has to be rejected. Otherwise also, Shri Parvesh Kochhar has stated that he did not know the finally settled or negotiated price. Thus, Shri Kochhar denied to have any knowledge of payment of Rs. 33 lakhs so far as Sarvpriya property is concerned. It is strange that an amount of Rs.....
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.... Manoj Prabhakar, the assessee, and the statement of Shri Parvesh Kochhar. He further made reference to various decisions including the following: (i) R.K. Swamy vs. Asstt. CIT (2004) 88 TTJ (Chennai) 940 : (2004) 88 ITD 185 (Chennai); (ii) Rajender Kumar Garg vs. Dy. CIT (2000) 67 TTJ (Del) 347; (iii) Smt. Purnima Beri vs. Dy. CIT (2002) 76 TTJ (Asr)(TM) 467 : (2002) 82 ITD 137 (Asr)(TM); (iv) S.P. Goyal vs. Dy. CIT (2002) 77 TTJ (Mumbai)(TM) 1 : (2002) 82 ITD 85 (Mumbai)(TM); (v) Prasanchand Surana vs. Asstt. CIT (2001) 71 TTJ (Hyd) 456 : (2001) 76 ITD 423 (Hyd); (vi) Redhey Shyam Tanwar vs. Asstt. CIT (2002) 77 TTJ (Jd) 505; (vii) Chitra Devi vs. Asstt. CIT (2002) 77 TTJ (Jd) 640; (viii) Jinka Plaza vs. Asstt. CiT (2002) 77 TTJ (Bang) 327 ; and (ix) P.K. Ganeshwar vs. Dy. CIT (2002) 80 ITD 429 (Chennai). 9. We have carefully considered the entire material on record and the rival submissions. The learned counsel for the assessee invited our attention to the valuation report which has been filed in the paper book. The assessee has obtained this report for showing the value of the properties purchas....
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....ideration beyond and above the consideration mentioned in the sale deeds. Under these circumstances, we are of the considered opinion that the addition sustained by the learned CIT(A) on the basis of the above cannot be maintained. We are further of the view that the matter has not been properly investigated by the AO inasmuch as the buyers and sellers are not called for examination and for verification of the actual price paid to them or received by the assessee. Under these circumstances and in the interest of justice, we deem it fit and proper to set aside the matter to the file of AO for fresh adjudication. Accordingly, orders of authorities below on the issue in question are set aside and the matter is restored to the file AO to decide the issue afresh after making proper investigation and enquiry. While doing so, the AO shall also take into consideration the valuation report mentioned above and shall deal with the same accordingly and as per law. Accordingly, ground Nos. 2 and 3 stand allowed for statistical purposes. 10. Ground No. 4 : This ground has been taken to challenge the sustenance of addition of Rs. 9,65,000 on account of the payments received from bookies. The A....