TaxTMI 
TaxTMI 
1994 (12) TMI 341
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....pany owned the property known as Sujan Singh Park in one of the exclusive residential areas of New Delhi and its source of income disclosed was the rent from various residential flats, servants quarters and garages, etc., in the Sujan Singh Park Complex. 3.1 The AO noted that during the relevant accounting period, a number of new tenants for various servants quarters, flats and garages, etc., had come in the said property and he requested the company to produce the said tenants for examination in order to confirm the various terms and conditions on which they had become tenants in the said property. The company vide its letter dt. 28th Nov., 1987 expressed its inability and requested the AO that attendance of the said tenants may be enforced by issuing summons to them. The AO examined Sarva Shri Dalip Kumar, Sukh Darshan Lal, Mohan Lal, P.S. Chopra, Daljit Singh (director in the company), C.K. Govinder, Harnam Singh and Mrs. Parveen Begum. Shri Dalip Kumar and Mrs. Parveen Begum admitted that they had paid "Pagree" of ₹ 22,000 and ₹ 29,000 respectively for becoming tenants in quarter No. 2 and quarter No. L-6 respectively. Shri Sukh Darshan Lal stated that th....
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....any had filed a suit against him did not detract from the truth of his statement. In fact, it re-enforced the truth. With reference to examination of Mrs. Praveen Begum, the AO observed that she withdraw the money from the money sent by her husband from Saudia Arabia to have a roof over her head. Although she failed to attend the office a second time for cross-examination, looking at her type of background, it was very likely that in view of the position of women in the Muslim community, she was prevented from repeated visits to any office or for that matter, any place. In view of the above discussion made by the AO, he held that pagree was paid in all cases of new tenants except in the cases of P.S. Chopra and Smt. Nagima Lal Singh and made an addition of ₹ 2,76,000 in the income of the assessee on this account. 4. On appeal before the CIT(A), the learned counsel for the assessee submitted that neither statement could be relied upon. He submitted that the statement of Shri Dalip Kumar was not true but malicious and intended to cause harm to the assessee company as eviction proceedings were pending against him. With reference to the statement of Smt. Parveen Begum, the learn....
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....ed that the evidentiary value of the statement of Shri Delip Kumar had already been looked into by the CIT(A) XVI, New Delhi in appeal against assessment order for asst. yr. 1983-84. The CIT(A), vide order dt. 17th Nov., 1986, in appeal number 827/85-86, deleted similar addition amounting to ₹ 8,40,000. With reference to the statement of Smt. Parveen Bagum, it has been mentioned that her statement is no statement in the eye of law, having been recorded at the back of the assessee and without affording the assessee the opportunity to cross-examine her. It has also been mentioned that the statement of Smt. Parveen Begum further remains unsubstantiated because the AO had not verified the source of payment of ₹ 29,000. It has further been mentioned that the AO had drawn adverse inference from statements of other tenants who had categorically stated that they had paid no pagree. The learned counsel again relied on the decision of the Hon'ble Delhi High Court in the case of Sona Electric Co. (supra) wherein the Hon'ble Delhi High Court had held that the statements recorded at the back of the assessee, without providing any opportunity to the assessee for a cross-exami....
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....edly received by the assessee company. Under these circumstances, we delete the addition of ₹ 51,000 sustained by the CIT(A). With reference to the other additions amounting to ₹ 2,25,000, as deleted by the CIT(A), we hold that the said additions have been rightly deleted by the CIT(A) as the same have been made on mere suspicion and conjectures in the absence of any evidence. In view of the aforesaid deletions of ₹ 2,76,000, we need not go into the question as to whether salami/pagree constituted capital or revenue receipt as claimed by the learned counsel on the basis of the case reported in (1979) 13 CTR (SC) 179: (1979) 120 ITR 549(SC) (supra). 8. In the result, the ground of appeal is allowed in the case of the assessee and the ground of appeal of the Department is rejected. 9. The second ground of appeal by the Department relates to the direction made by the CIT(A) to the AO to allow the assessee's claim for deduction of ₹ 74,372 on account of salaries paid to watchman, sweepers, malies and pump operators and 1/3rd of manager's salary of ₹ 1,880 while computing the income under the head "income from house property". 10. The A....