TaxTMI 
TaxTMI 
2008 (3) TMI 685
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.... High Court in the case of Hira Lal Ram Dayal v. CIT [1980] 122 ITR 461. 2. During arguments we have heard Shri D.P. Dhankar ld. DR and Shri Sudhir Sehgal alongwith Shri Ashok Goyal, ld. counsels for the assessee. Mr. Dhankar reiterated the submissions identical to the grounds raised in both the appeals. Plea was also raised that the department is placing reliance upon the statement of Shri Gulzar Singh, assessee was confronted with all facts, Shri Dhayan Singh is signatory to the agreement, therefore, the revenue discharged its burden. In nutshell, the assessment order was supported. On the other hand, the ld. counsel for the assessee relied upon the impugned order and contended that the assessee requested for cross examination and further contended that the impugned issue is covered by the decision of the Tribunal in the case of ITA Nos. 679, 680/Chd./2005, and ITA Nos. 363 and 634/Chd/2005, the copies of which were submitted by the ld. counsel. 3. We have considered the rival submissions and perused the material available on the file. Both these appeals can be disposed of by this consolidated order as the same pertains to the same assessee for different assessment years. B....
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....tion was the statement of Shri Gurmail Singh recorded by the ADI on 26-11-2001. The assessee filed a letter dated 24-8-2004, in reply, the assessee informed the Assessing Officer that she had purchased the land alongwith her husband Dr. Gurpreet Singh Wander measuring 9 kanal and 15 marla and the total expenses including stamp paper and registration charges were Rs. 55,02,000. The complete address alongwith Photostat copy of purchase deeds for purchase of land had also been filed alongwith the letter. There was categorical denial by the assessee of having paid any money in addition to what was reflected in the sale deeds. The assessee had asked for the copy of statement of Shri Gurmail Singh which was supplied to the assessee. Copies of statement of Shri Gurmail Singh and other co-owners namely S/Shri Gurnam Singh, Hargurbinder Singh and Manjinder Singh recorded on 24-12-2004 by the Assessing Officer were also supplied to the assessee. The Assessing Officer found that as per the sale deeds, the total consideration paid by the assessee and her husband to various co-owners for the purchase of 9 kanal and 15 marla was Rs. 4,55,000 only. 4. The Assessing Officer obtained bank ....
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....Mrs.) Simranjit Kaur w/o Dr. Gurpreet Singh Wander got the sale deeds registered at the rate of Rs. 5 lakhs per acre as against Rs. 18.50 lakhs per acre. It was further stated that Smt. Kamla Jain, i.e., the respondent before us had got the sale deed executed at the rate of Rs. 2 lakhs per acre as against the actual amount of Rs. 18 lakhs per acre. The Assessing Officer has also referred to some sale instances where the land has been sold at the rate of Rs. 18.50 lakhs per acre to Rs. 26 lakhs per acre. When the assessee was confronted with the information and evidence, the proposed addition was objected on the following grounds :- That no reliance can be placed on the statement of Shri Gurmail Singh recorded by the ADI (Inv.), Ludhiana on 26-11-2001 wherein he had stated that he had sold the land at the rate of 18 lakhs per acre and in the subsequent statement on 24-12-2004 he has stated that the land was sold at the rate of 11 lakhs per acre. That the other co-owners S/Shri Gurnam Singh, Har Gurbinder Singh and Manjinder Singh clearly stated that they are not aware at which rate the land was sold and they categorically stated that the deposits in their bank accounts were....
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....Gurpreet Singh inequal proportion. The difference of Rs. 17,38,750 has been assessed at the rate of 50 per cent each in the case of Dr. Simran Kaur Wander and Dr. Gurpreet Singh Wander. In the case of Smt. Kamla Jain, the Assessing Officer has worked out the purchase of the land of 16 kanal and 7.5 marla at the rate of Rs. 11 lakhs per acre. The total consideration has been worked out at Rs. 22,51,560 as against which the consideration shown in the sale deed is Rs. 3,18,000. The Assessing Officer accordingly assessed the difference of Rs. 19,33,560 as undisclosed income in the hands of Smt. Kamla Jain. 7. On appeal, the Commissioner of Income-tax (A) has deleted the addition in all the three cases. It has been held by the Commissioner of Income-tax (A) that the Assessing Officer had not granted opportunity to the respondents to cross-examine Shri Gurmail Singh. It has further been held by the Commissioner of Income-tax (A) that the Assessing Officer has not investigated the source of deposits in the banks of legal heirs of Shri Gurmail Singh and others. It has also been pointed out by the Commissioner of Income-tax (A) that the Assessing Officer had recorded the statement ....
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..... According to the learned D.R., the assessee never demanded cross-examination of Shri Gurmail Singh or any other person. Therefore, there was no violation of the principle of natural justice. It was pointed out that other co-owners of the land have specifically pointed out that Shri Gurmail Singh had settled the price for the sale of land and that they did not know about the rate at which the land was sold. It was further pointed out that the-Assessing Officer had made enquiries about the market rate of land prevalent in the vicinity at the time of sale and when such instances are seen with the statement of Shri Gurmail Singh, it appears that the statement of Shri Gurmail Singh is highly probable. Relying upon the decision of the Hon'ble Supreme Court in the case of Sumati Dayal v. CIT, 214 ITR 801 and the decision in the case of CIT v. Durga Prasad More, 82 ITR 540 , it was contended that the Assessing Officer is required to take into consideration the surrounding circumstances and human probabilities in considering the evidence. Our attention was invited to the finding of the Assessing Officer at page 4 of the assessment order which finding has not been rebutted. It was accordin....
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....for the assessee also placed reliance on the following decisions to support the contention that where there is violation of natural principle of justice, the addition made is bad in law :- Gargi Din Jwala Prasad v. CIT, 96 ITR 97 (All.) Kishinchand Chellaram v. CIT 125 ITR 713 (SC) R.B. Shreeram Durga Prasad & Fatechand Nursing Das 176 ITR 169 (SC) 10. It was further pointed out that in the case of Smt. Kamla Jain the sale of land has been taken at Rs. 11 lakhs per acre which is in variation with the rate taken in the case of other two parties. 11. The learned D.R. in counter reply, contended that mere are two letters of the assessee on record placed in the Paper Book which clearly admit the receipt of statement of Shri Gurmail Singh and other co-owners of land. The assessee has never asked for any cross-examination of the parties. It was contended that the stand of the sellers was that Shri Gurmail Singh only dealt with the assessee and he only knew the price at which the land was sold. Shri Gurmail Singh has categorically stated that the sale of land has taken place at the rate of Rs. 18 lakhs per acre. The Assessing Officer has also g....
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....ction (2) relieves the Revenue of all burden of regarding the extent of understatement or concealment.' The under section 52 now not being on the statute book it not open to the Assessing Officer to substitute the market annual price received by the vendors for the sale of land. So however, it is clarified that mere omission of the Income-tax Act, 1961 does not take away of the Assessing Officer to assess any understatement of consideration paid in respect of the purchase of any property. The omission of section 52 has taken away the power of the Assessing Officer to substitute the declared price by the market price and assess the difference as undisclosed income. However, even after omission of section 52 the Assessing Officer can invoke section 69 in such cases where it is established that assessee has paid more consideration than declared in the sale deeds. Now the Assessing Officer has to establish two things:- firstly that there is understatement of consideration, secondly he has also to determine the quantum of understatement with reference to evidence. The prevalent market value of property at the time of purchase would be relevant consideration but not the Sole bas....
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....ld "Though evidentiary value has to be attached to a registered document that document cannot be taken as being conclusive in a matter." Therefore, the said decision relied upon by the assessee does not advance the case of the assessee. The decision of the Bombay High Court in the case of Smt. R.R. Sood (supra) is distinguishable on facts. In that case, there was no evidence that assessee had paid more consideration than reflected in the sale deeds. The Hon'ble Bombay High Court held that the Assessing Officer was not justified in substituting the declared sale price by the market price. 15. In our considered view, as per the law after omission of section 52 the declared sale price shall have to be taken as the actual price paid unless proved otherwise. The higher prevalent price at the time of purchase of property will give rise to suspicion but that alone would not be sufficient to invoke section 69 of the Act. 16. In this case, the assessee is relying upon the consideration shown in the conveyance deeds to support the price paid. As per the order of the Commissioner of Income-tax (A) page 4 last para the assessee had filed a list of 11 to 12 properties having b....
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.... to strong suspicion but cannot be said to be sufficient to rebut the evidence placed by the assessee. Needless to repeat that the burden to prove that the respondents had paid more consideration for the purchase of land than disclosed in the sale deeds is upon the Revenue. We would like to mention that the Assessing Officer being a quasi-judicial Authority has to treat S. Gurmail Singh and others, i.e., the vendors, on the one hand, and the assessee on the other hand equally. The issue was to be decided by testing the evidence on the scales of justice. The Assessing Officer ought to find out the missing answers to the questions raised by the respondents. For example, questions relating to the actual amount received vis-a-vis the deposits in the bank accounts, the nature of the deposits in the bank accounts of the vendors prior to the date of execution of agreement, the quantum of agricultural income and evidence to support the claim if any made. 18. Taking the totality of the facts and circumstances of the case into consideration, we are of the view that the Revenue has failed to establish that the respondents had purchased land at higher price can disclosed in the sale d....
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.... case of the Assessing Officer is that Sh. Satinder Pal Singh, i.e., seller in his statement recorded by ADI (Inv.), Ludhiana on 18-9-2001 admitted that he had received consideration over and above the consideration stated in the Sale Deed. Consequently, the Assessing Officer has observed that it is "a well known practice" that the Purchase and Sale Deeds of immovable properties are registered at rate much lower than the prevailing market rates. For both the above reasons, the Assessing Officer has justified the addition. Before us, the ld. DR appearing on behalf of the revenue has taken similar arguments as taken by the Assessing Officer to justify the addition. The ld. DR submitted that in this case the seller of the land Sh. Satinder Pal Singh clearly admitted having received on money and therefore onus cast on the revenue stood discharged. Regarding to the conclusion of the CIT(A) that in the case of the seller Sh. Satinder Pal Singh, the Assessing Officer has increased the assessment and has accepted the sale consideration at the stated consideration, the ld. DR submitted that the impugned assessment has been made on the basis of investigations carried out by ADI (Inv.), Ludhi....
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....said statement as well as the subsequent retraction was also before the assessing authority who had assessed the return of income filed by the seller Sh. Satinder Pal Singh. We have perused the said assessment order placed at Pages 13 to 29 of the paper book and find that the stated consideration has been accepted. The Assessing Officer in the case of the seller has referred to the information received from the Investigation Wing in Para 1 itself, therefore, it is not a case where the said assessing authority was unaware of the information gathered by the Investigation Wing of the department. Inspite of the same, the assessing authority has independently verified the position and has not inferred that no consideration over and above the stated consideration has changed hands. Thirdly, we also notice that the present assessee, in the course of assessment proceedings, specifically contested the alleged admission by Sh. Satinder Pal Singh and requested that the assessee be allowed to cross examine the said person. There is nothing on record to indicate the reasons as to why the assessing authority failed to allow cross examination, specially when the only evidence with the assessing a....
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.... arrived at by the ITO, Ward-III, Khanna in the case of the seller. This aspect cannot be lost sight of. Any inference to the contrary in the case of the purchase, i.e., presently before us would only be imprudent and arbitrary. 10. For all these reasons, we hereby affirm the decision of the CIT(A) and hold that there was no justification in making an addition of Rs. 38.65 lakh in the hands of the assessee. 11. In the result, the appeal of the revenue for assessment year 2001-02 is hereby dismissed. 12. Since the facts in ITA No. 364/CHD/2005 pertaining to assessment year 2002-03 are para materia with those in assessment year 2001-02 that has been dealt by us in the earlier paragraphs, out decision therein applies mutatis mutandis in this year also. 13. In the result, both the appeals of the revenue are dismissed." 4. If the facts of the present appeal and the ratio laid down alongwith the facts in the cases of Dr. Simran Kaur Wander (supra) and Harpal Singh (supra) are analysed, we have found that the ld. CIT(A) has relied upon the decision of the Hon'ble jurisdictional High Court in the case of Hira Lal Ram Dayal (supra) wherein it was held ....