TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 422
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....by Assessing Officer u/s 69B of the Act. 2. The assessees has also filed cross objections to the appeals filed by revenue and has taken similar grounds of appeal where by the assessees has challenged the reopening of the cases u/s 148 of the Act. 3. At the outset, the Ld. AR submitted that he will not be pressing cross objections therefore the same may be treated as withdrawn. 4. The Ld. DR had no objection to withdrawal of cross objections and therefore the cross objections filed by assessee are dismissed as withdrawn. As regards the issue under appeals, the Ld. AR submitted that the issue under appeals is duly covered in favour of assessees by the order of Tribunal in the case of Sh. Kulwinder Singh and M/s Harman Builders Pvt. Ltd. vide its order dated 01.08.2016 in ITA No. 659 & 660/Asr/2014. The Ld. AR submitted that the Ld. CIT(A) has followed the order of Hon'ble ITAT and had deleted the additions. 5. The Ld. DR fairly conceded that the issue under appeals was duly covered in favour of assessees. 6. We have heard the rival parties and have gone though the material placed on record. We find that the assessments in the case of assessees were reopened u/s 148 of the A....
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....circumstances, the Appeal of the revenue was dismissed. The Hon'ble Tribunal in the case of Sh. Kulwinder Singh and M/s Harman Builders Pvt. Ltd. has reproduced the orders of Ld. CIT(A) and after reproducing the same has dismissed the appeals filed by revenue by holding as under: "7. We have heard the rival contentions and have perused the material available on record. We have also gone through the very detailed and order of the ld. CIT(A), who has discussed each and every aspect of the matter and has found that the findings given by the ld. CIT(A) based on the facts and circumstances of the case, which do not require any interference on our part. The relevant findings given by the ld. CIT(A) in his order in paras 9 to 24 of the order are as follows: '9. I have considered the facts of the case, the basis of addition made by the Assessing Officer and the arguments of the AR during assessment proceedings as well as appellate proceedings. It is quite apparent that the case of the Assessing Officer is entirely dependent upon the documents found and seized not in the case of the appellant but from unrelated party being an Accountant of the company which happens to be seller of....
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....s in similar cases wherein the documents relied upon by the Assessing Officer had been seized in the case of third arties. The documents to be relied upon have to be extremely clearly specific and descriptive enough to establish the factum of passing on if unaccounted sale consideration for transfer of property in question. the documents seized in the case of M/s PISCO Ltd only create a doubt or suspicion which cannot take the place of the evidence as has been held in the catena of judgments, some of which are as under:- DCIT Vs. D.N. Kamani (HUF) 70 ITD (Patna- Trib) 77 Commissioner of Income Tax Vs. Ram Narain 224 ITR 180 (P&H) Elite Developers Vs. Dy. Commissioner of Income Tax 73 ITD (Nagpur- Trib) 379 Monga Metals Pvt. Ltd. Vs. ACIT 67 TTJ (All) 247 JCIT Vs. Gramophone Company of India Ltd. 265 ITR (Kol-Trib) 46 (AT) 11. The case of Amarjit Singh Bakshi (HUF) vs ACIT is on similar facts as is clear from the following head note:- "Search and seizure-Block assessment-Computation of undisclosed income -Addition under section 69B-A loose sheet, purporting to be an agreement, partly written in pencil and partly in pen, found during search of the premises of ....
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....kesh Kumar C/o Dreamland Cooperative Society had given statement to the effect that amount had been received from the assessee. However a mere presumption that sale deed was registered in the impugned assessment year would not mean that cash payment was also in the same year. The presumption available u/s 132(4A) was not available in the case of the assessee as no documents had been seized from his possession. The Hon'ble Court held as under: "The only piece of paper which is computerized 04.07.2007 seized from a third party i.e. M/s Dreamland co-operative Society on 19.07.2007 is the only document on the basis of which the Assessing Officer had made the addition. We concur with the view of the Ld. CIT(A) that except for the only document i.e. page No. 66 of annexure 50 seized from M/s Dreamland co-operative Society, a third party there is nothing else to suggest that assessee had in fact paid an amount of Rs. 11,50,000/- in cash to the society. It is undisputed that the document is not seized from assessee. It is also undisputed that the document I not seized from the assessee. It is also undisputed that document is not in handwriting of the assessee and did not belong to asses....
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....f transfer of such consideration from the buyer to seller. The appellant alongwith seller had been subjected to search operation within the meaning of section 132 of the I.T. Act 1961 but no such evidence could be found to be existing. This means that the presumption of the Assessing Officer eventually remains a presumption and therefore can not substituted in place of evidence i.e. essential requirement to unsettle the sale consideration as recorded in the registered documents. It is also important to appreciate that the said registration between the appellant and seller has been at a price which is at least as per circle - rate approved by the Revenue Authorities and hence can not be said to be below fair market price. The Hon'ble Apex Court in the case of K.P. Varghese Vs. ITO 131 ITR 597 (SC) had given judgment in the context of applicability of Section 52(2) of Income Tax Act 1961 which dealt with the possible under statement of sale consideration. The said section has been omitted by Finance Act 1987 w.e.f. 1.4.88 and the only presumption as of now is in terms of applicability of section 50C in the case of computation of capital gain in the case of the seller. The under s....
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.... that the primary burden of proof to prove understatement or concealment of income is on the Revenue and it is only when such burden is discharged that it would be permissible to / upon the valuation given by the DVO. In any event, the opinion of a DVO, per se is not an information and cannot be relied upon without the books of account being rejected which has not been done i the present case. Moreover, in the present case, no evidence much ass incriminating evidence was found as a result of the search to suggest that the assessee had made any payment over and above the consideration mentioned in the registered purchase deed. A reading of the Assessing Officer's order does not disclose that the assessee had made any admission in her alleged statement under section 132(4). In fact, no such statement has been produced. It is also pertinent to mention that no adjustment on account of sales consideration has been made by the Revenue in the case of the seller. Consequently, no substantial question of law arises in the present appeal which, being bereft of merit, is dismissed.- K.P. Varghese vs. ITO (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 (SC), CIT vs. Smt. Shakuntala Devi (2009)....
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.... 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." 18. "The Hon'ble High Court of Rajasthan in the case of COMMlSSIONER OF INCOME TAX vs. BHANWARLALMURWATIYA , reported in (2008) 215 CTR (Raj) 489, held:- "The Question as to what was the price of the land at the relevant time is a pure question of fact. Apart from the fact, that even if it were to be assumed, that the price of the land was different than the one, recited in the sale deed, unless it is established on record by the Department, that as a matter of fact, the consideration, as alleged by the Department, did pass to the seller from the purchaser, it cannot be said, that the Department had any right to make any additions. It is a different story as to, to what extent and how, the statement of 5, as given before different authorities, at different times, can be used against the assessee. More so, when none of the witnesses was examined before the AO,....
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....e to suggest that the sales were effected with the object of avoidance or reduction of tax liability for capital gains and this was affirmed by Hon'ble apex court in (1986) 159 ITR 71 (SC). We are of the view that unless there is evidence that more than what is stated in the documents or was received, no higher price can be taken to be the basis for computation of tax either in business transaction or capital gain transactions. The entire onus is on Revenue and the inferences might be drawn in certain cases but come to a conclusion that a particular higher amount was, in fact received must be based on such material from which such an irresistible conclusion follows. In our considered view, in the present case, the Revenue could not primary facts, from which inference can be drawn that the considerations recorded by assessee-firm in its account and the s deeds is not the full consideration or the actual price received by assessee for the transfer of shops was the under-stated price. 22. The Hon'ble Apex Court in the case of CIT Vs. George Handerson & Company Limited 66 ITR 622 has observed that full value of consideration for which the sale, exchange or transfer of the ca....
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....is common ground that no incriminating material was seized during the search which revealed any understatement of the purchase e. That is precisely the reason why the Assessing Officer had to sort to Rule 3 of Schedule III to the Wealth Tax Act. This Rule does not even claim to estimate the "fair market value" of an asset; it merely lays down a procedure for computing the value of an asset for the purposes of the Wealth Tax Act. The Schedule derives its authority from Section 7(1) of the Wealth Tax Act. The section, as it now stands, has dropped all pretensions to ascertaining the fair market value of an asset for the purposes of the Wealth Tax Act. Prior to the amendment made w.e.f. 1-4-1989 the section provided for the estimation of the fair market value of an asset on the principle of what it would fetch if sold in the open market. This involved an assumption of an open market, be it fictional, a willing seller and a willing buyer, all fictional. This fiction facilitated a realistic estimation of the fair market value of the property, and it moved with the ups and downs of the market. Not anymore. From 1-4- 1989, the value was frozen. For all times to come, an immovable property....
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....k to measure the precise extent of understatement. There can therefore be no compromise in the application of the section. It would seem to require the Assessing Officer even to show the exact extent of understatement of the investment; it does not even give the Assessing Officer the option of applying any reasonable yardstick to measure the precise extent of understatement of the investment once the fact of understatement is proved. It appears that the Assessing Officer is not only required to prove understatement of the purchase price, but also to show the precise extent of the understatement. There is no authority given by the section to adopt some reasonable yardstick to measure the extent of understatement. But since it may not be possible in all cases to prove the precise or exact amount undisclosed investment, it is perhaps reasonable to permit the Assessing Officer to rely on some acceptable basis of ascertaining the market value of the property to assess the undisclosed investment. Whether the basis adopted by the Assessing Officer is an acceptable or not may depend on the facts and circumstances of the particular case. That question may however arise only when actual unde....
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.... which he had made before the Asstt. Director of IT (Inv.). In spite of allthis evidence, the Assessing Officer made the addition under section 69B only on the basis of conjectures while observing that it is a well known practice that the sale deeds of immovable properties are being registered at the much lower rates than the prevailing in the markets. It is also disputed fact that after selling of the land, 'S' was assessed under the Act and at that time the sale value of the said land was taken as indicated in the registered sale deed and that assessment had become final. The Tribunal has duly appreciated the evidence/material available on the record and various contentions raised by the parties, and then came to the aforesaid conclusion, which is a pure finding of fact which does not require any interference by the Court. Therefore, in these appeals no substantial question of law is arising from the impugned order for consideration of the court." 24. The Hon'ble Apex Court in the case of Commissioner of Income Tax vs. P.V. Kalyanasundaram reported in (2007) 212 CTR (SC) 97, held:- "The respondent assessee vide a registered sale deed dt. 26th Oct., 1998 purchase....
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.... as per the guidelines for registration the fair value for registration on the relevant date was Rs. 244 to Rs. 400 per sq. ft. and the sale consideration for Rs. 850 per sq.ft. claimed by the Revenue was unrealistic and ignored the ground situation. It was further held that the tax of approximately Rs. 1,84,000 determined on the basis of the addition would not show that the assessee had acquiesced in the addition made by the Department or that it was conclusive evidence of the sale price as the deposit had been made in an obvious effort to save himself from further substantial questions of law were raised: a. Whether or not when the returns and the statements of the seller admit higher sale consideration actually received, the Revenue is justified in fixing the sale consideration at the higher amount than what has been declared? b. When the assessee did not give any explanation to the notings found and at the same time the Revenue is able to corroborate the same with the statement of the seller for the purpose of determination of actual sale value, would the lower authority be justified in interfering with the same? c. When consistent sworn (statements) were taken into co....
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....ct as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid is all questions of fact. We therefore find no infirmity in the order of the High Court. Accordingly, we dismiss the appeal." In view of the above detailed analysis of facts and circumstances of the case and analysis of jurisdictional pronouncement on the issue, the addition made by the Assessing Officer by presuming the sale consideration at Rs. 11.05 crore per acre is directed to be deleted." 8. From the rival contentions and the material on record, the following facts emerge: (i) The agreement seized was only a photocopy of the original. (ii) It was seized not from the assessee, but from the third party. (iii) The seller refused to identity the agreement. (iv) The buyer refused to identify the agreement. (v) The witnesses to the agreement refused to identify it. (vi) The AO did not make total addition on account of total value of the transactions in the cases of the other buyers or sellers, as mentioned in the agreement. (vii) The assessee was not....