TaxTMI 
TaxTMI 
2012 (5) TMI 256
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....orking partner of the firm, Shri R.K. Khosla is suffering from cancer and due to his prolonged illness, he could not attend to the business of his firm. He came to know about passing of the order by CIT(A) on 01.05.2010. He, took steps to get the said appeal filed immediately. The medical treatment chart of Shri R.K. Khosla is enclosed as evidence. It was, further, contended that delay in filing the appeal is not willful, nor intentional but occurred due to reasons of the illness. Therefore, delay deserves to be condoned. Partner Shri R.K. Khosla, has also filed affidavit to this effect. 2(i) Ld. 'DR', however contended that having regard to the circumstances of the case, the condonation of delay may be considered. 2(ii) After careful perusal of the documentary evidence, in the form of Out Patient Ticket from Post Graduate Institute of Medical Education and Research, Chandigarh, filed by the assessee appellant and the contention raised in the application, we are of the considered opinion that delay is not intentional but, due to compelling circumstances of illness. It is well settled proposition of law that substantive justice should not be scuttled at the threshold stage, on....
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....to question 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 lacs from M/s Rajdeep Builders. Sale Deed of which was executed on 1.5.2003". In response to another question 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, it is evident that Shri Subhash Sharma gave a different version in the course of cross examination. However, the AO made the impugned addition. Ld. CIT(A), confirmed the addition made by the AO, as is evident from para 4 of her order, which is reproduced hereunder : "4. I have considered the written submission as well as facts of the case. There is sufficient evidence on record to prove payment over and above registered amount of Rs. 9 lacs. This is clear beyond doubt from the following facts:- (i) Agreement to sell was entered into in Jan., 2003 on 28/1/2003 and the assesses has withdrawn matching amount fro....
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....tatement under any Section of the Income-tax Act, except u/s 133A(5) of the Act, which is meant for conducting survey of certain social functions, such as marriage, any ceremony or event. However, in the present case, survey was conducted u/s 133A(1) of the Act, whereby Inspector of Income Tax is not competent to record the statement. The provisions of Section 133A specifies Income Tax authorities and their respective jurisdiction by way of explanation. The Income-tax Inspector is clearly not authorized, to record statement under this Section. Therefore, such statement recorded contrary to the provisions of the Act, hardly has any evidentiary value. The argument that evidence gathered in the course of invalid search operation, can be used against the assessee, is not applicable to the facts of the present case. In an invalid search, the authorizing authority, CIT or DIT (Inv.), has jurisdiction u/s 132(1) of the Act, to issue warrants of authorization. However, the Income Tax inspector has no jurisdiction under any provision of the Act, as indicated earlier, to record statement, in the course of survey operation u/s 133A(1) of the Act. The said statement does not bear the signature....
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....party, the issue is determined on facts and the onus cannot be said to have influenced the decisions. 6(iii) The Hon'ble Supreme Court, in the case of Chuhar Mal v. CIT [1988] 172 ITR 250, highlighted the fact that the principle of evidence law are not to be ignored by the authorities, but at the same time, human probability has to be the guiding principle, since the AO is not fettered, by technical rules of evidence, as held by the Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills v. CIT [1954] 26 ITR 775. The Hon'ble Supreme Court, in the case of Chuhar Mal v. CIT (supra) held that what was meant by saying that Evidence Act did not apply to the proceedings under Income-tax Act,1961, was that the rigors of Rules of evidence, contained in the Evidence Act was not applicable; but that did not mean that when the taxing authorities were desirous of invoking the principles of Evidence Act, in proceedings before them, they were prevented from doing so. It was further held by the Hon'ble Apex Court that all that Section 110 of the Evidence Act, 1872 did, was to embody a salutary principle of common law, jurisprudence viz, where a person was found in possessing of anything,....
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.... validity of the 'sale deed'. The AO merely, on the basis of statement of Shri Subhash Sharma, one of the purchases, who later on, in the cross-examination retracted the statement, made in the impugned addition. It is pointed out that in income-tax matters, the proposition that the form of a transaction should prevail over its substance or vice-versa, is too broad and general proposition, to be universally applicable in all circumstances. 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. This view is supported by the Hon'ble Supreme Court, in the case of Motors and General Stores (P) Ltd. (1967) 66 ITR 692 (S.C) by holding that, where statutorily the parties have to reduce a certain transaction into writing, it is not open to Court or any authority to permit oral evidence to be adduced by the parties or to entitle them to go behind the statements made in the document. Income Tax Authorities are under the ordinary law. No greater power or authority is vested in them, except that which the law confers. A bare perusal of Se....
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....the case in its nature is susceptible, should always be presented. Section 91 of law of evidence relates to evidence of terms of contract, grants and other disposition of properties reduced to form of document. This Section merely forbids proving the contents of writing otherwise than by writing itself; it is covered by the ordinary rule of evidence, applicable not merely to solemn writing of the sort named but to others known sometimes as the "best evidence rule". In Bai Hira Devi v. Official Assignee of Bombay AIR 1958 S.C. 448, the Supreme Court observed that Section 91 is based on what is sometimes described as the best evidence rule. The best evidence about contents of a document is the document itself and it is the production of the document that is required by Section 91, in proof of its contents. It is after the document has been produced to prove its terms under Section 91 that the provision of Section 91 came into operation for the purpose of excluding evidence of any oral agreement or statement, for the purpose of contradicting, varying, adding to or subtracting from its terms. In a nutshell, when the terms of a contract are reduced in writing, the intention of the parti....
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.... 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." (ii) The Hon'ble Punjab & Haryana High Court, in the case of CIT v. Chandni Bhochar [2010] 323 ITR 510 has held that the purchase price disclosed in the sale deed at Rs. 17,06,700/- cannot be adopted as the purchase price for Rs. 30,32,000/- by the AO, which is assessed for the purpose of stamp duty. The AO, accordingly, held that assessee must have paid Rs. 13,25,300/-, over and above the purchase price disclosed in the Sale Deed and made the addition as income from undis....
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....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 assessmen....
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....of Subhash Chand v. ACIT, CC, Patiala in ITA No. 571 to 573/Chd/2011, A.Y. 2005-06, 2006-07 and 2007-08, vide order dated 28.11.2011, the Chandigarh Bench of the Tribunal has clearly upheld the sanctity of the sale deed, particularly the sale consideration specified therein by the parties, to the sale deed. In the said order, the Bench frustrated the intent of the assessee, to read the sale consideration in the deed, as Rs. 38 lacs, instead of Rs. 8 lacs for the purpose of explaining the undisclosed investment, in the purchase of property by him. The plea of the assessee was that stamp valuation authority has valued the sale consideration for the purpose of stamp duty at Rs. 38 lacs and out of that deemed consideration, the assessee attempted to explain the source of investment in the purchase of plot/flat. However, relevant part of the decision is reproduced hereunder : "21. In the present case, the AO has found that the assessee has paid a sum of Rs. 27,90,000/- towards purchase of flat/plot and for meeting household expenses in the year under appeal. The assessee could not have paid the aforesaid amount without having the money with him. No material has been placed before us ....
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.... the deed of conveyance, the assessee cannot turn around to say that he has received Rs. 38 lakhs instead of Rs. 8 lakhs as recited in the deed of conveyance and that too without bringing any material on record to prove that he has actually received Rs. 38 lakhs instead of Rs. 8 lakhs. Besides, conveyance deed has been signed by both the buyer as well as seller (i.e., the assessee) of the property. The assessee cannot succeed in its claim to have received Rs. 38 lakhs unless the said amount is shown to have been paid by the buyer. There is no confirmation from the buyer that he has paid Rs. 38 lakhs to the assessee and not Rs. 8 lakhs as recited in the deed of conveyance. If the buyer had actually paid and the assessee had actually received Rs. 38 lakhs from him then nothing prevented them from stating so in the deed of conveyance. The assessee has placed no evidence either before the Departmental authorities or before us to establish that the recital in the conveyance deed that a sum of Rs. 8 lakhs has been received by the assessee from the buyer, is factually incorrect or that any money has been actually received over and above the one shown to have been paid by the buyer in the ....