TaxTMI 
TaxTMI 
2007 (4) TMI 704
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls) was dismissed. 2. The facts of this case are that the assessee filed return of income on 30-12-1991 at "nil income". Later on, information was received that the assessee had purchased property No.4B/16, Tilak Nagar, New Delhi for Rs. 6 lakhs plus registration charges on 5-10-1990. A search was conducted in the business and residential premises of sister concern M/s. B.K. Jewellery House and its partners. After that a survey was also conducted at the business premises of Sh. Gajender Seth, husband of Smt. Pushpa Seth who had sold the abovestated property to the assessee-company. Smt. Pushpa Seth in her statement confirmed that the total sale consideration for the sale of the said property was Rs. 45 lakhs. In fact this amount was disclo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the issues regarding investment in the said property was also pending and, therefore, the request was made to keep the assessment proceedings pending till the proceedings before the Settlement Commission become final. 6. The Assessing Officer observed that the assessment was getting time-barred on 31-3-2000 and, therefore, the same had to be completed and it was further observed by the Assessing Officer that the assessee has not been able to furnish any evidence that amount of Rs. 39 lakhs being the additional sale consideration was not assessable in the hands of the company. The Assessing Officer, thus, made the addition of Rs. 39 lakhs. This action of Assessing Officer was confirmed by the Commissioner of Income-tax (Appeals). 7. B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s but the Sale Deed was got registered only for Rs. 6 lakhs. The balance amount of Rs. 39 lakhs was received by me in cash. I have disclosed this fact in my return for the assessment year 1990-91 and I have paid all the taxes for this disclosure as per the assessment Order dated 31-12-1992 by DCIT (Asst.) Spl. Range 13, New Delhi. Q. I again put to you whether the sale consideration declared by you for the House Property No. 4-B, Tilak Nagar, New Delhi was received by you from M/s. Malik Bros. Pvt. Ltd. in cash. Ans. Yes, I confirm and declare that I have received Rs. 39 lakhs in cash for the sale consideration of the House Property No. 4-B/16, Tilak Nagar, New Delhi. All the due taxes on the capital gains have been paid by me after the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... On the basis of these remarks, the assessee requested to stay the assessment proceedings in the case of the assessee till final orders are passed by the Settlement Commission in the firm M/s. B.K. Jewellery House. The assessee did not explain the source of Rs. 39 lakhs. Regarding the stay of assessment proceedings, the contention of the assessee is not acceptable as the petition had not been filed in the case of the assessee. In the absence of any explanation on the part of the assessee, investment of Rs. 39 lakhs is to be treated as unexplained investment in the hands of the assessee and assess it under section 69 of the Income-tax Act, 1961 as income of the assessee company." 12. According to these proceedings, it is clear that the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Supreme Court in the case of ICICI India 83 ITR 710 has pointed out that only if there is any cogent material on which the ITO could have reason to believe that the transfers effected with the object of avoidance or reduction of liability to tax. In the instant case, it is abundantly clear that an amount other than the apparent consideration has exchanged hands and the person who has received this money has clearly confessed that she has received this money and paid tax thereon. The appellant company is taking recourse to this fictional myth to avoid their liability to tax." 14. So, the records of this case show that the assessee was afforded reasonable opportunity and was also given opportunity that he can ask for documents, if any, but i....