TaxTMI 
TaxTMI 
2014 (7) TMI 1290
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....to the impugned addition, ignoring the valuation report submitted by the assessee and also the stamp duty valuation made by the registering authority. 3. The ld. CIT(A) erred on facts and in law in confirming charging interest u/s 234A & 234B of the Act. 4. The ld. CIT(A) erred in law and facts confirming the action of initiating penalty proceedings u/s 271(1)(c) of the Act. 2. During hearing of this appeal, we have heard Shri P.M. Choudhary, learned Counsel for the assessee and Shri Srikant Namdeo, ld. DR. The crux of arguments on behalf of the assessee is that the assessee firm, consisting of five partners, came into existence on 14.7.2006 to carry business of trading of property, construction of property and other business activities. The assessee purchased land in Goyala Khurd, Ujjain for a consideration of Rs. 1,22,46,236/- including registration charges and further made expenditure on site development at Rs. 8,47,722/-. The assessee executed five registration deeds in respect of purchase of land, declaring total cost at Rs. 1,22,46,236/-. It was contended by the learned Counsel for the assessee that information u/s 133(6) of the Act was collected by the Department. Th....
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.... statements of the sellers. The learned Counsel for the assessee also relied upon the decisions in 323 ITR 588 (P&H), 32 ITD 494 (Hyd), (1970) TLJ 20, 171 Taxman 198 (Del), 71 DTR(Jp-Tribunal) 33, 282 ITR 259, 131 ITR 259 (SC), 82 ITR 259 (Mad), which was affirmed by Hon'ble Apex Court in 294 ITR 49 (SC), 196 Taxman 415 (Del) and 250 ITR 484 (P&H). It was pleaded that the sellers of the land are themselves trading in land. On the other hand, the ld. DR defended the addition by submitting that the assessee is not a dealer of the land as has been claimed by the assessee. It was pointed out that valuation has been done at the higher rate by the registering authority and the seller of the land is 80 years old. Our attention was also invited to page 46 of the paper book. In reply, the learned Counsel for the assessee contended that no evidence has been produced by the Revenue to establish that cash was actually paid by the assessee to the sellers of the land. 2.1 We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm was constituted by the registered partnership deed dated 14.7.2006. The assessee is a b....
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....e Department on the basis of statements of the sellers to the effect that underhand cash was received from the assessee. On the other hand, the purchaser of the land also filed reply/affidavit explaining that no underhand cash was given to the sellers except the amount which has been mentioned in the registered sale deeds. There was counter claims/explanations from both sides. During hearing, the learned Counsel for the assessee explained that the assessee firm came into existence only on 14.7.2006 whereas the money was found deposited in the accounts of the sellers prior to this date and even in the year 2005, which raises a suspicion, more specifically when no agreement to sale has been brought on record by the Revenue evidencing that the transaction was done at different amount which has been shown in the registered sale deed. Even no statement has been recorded from the witnesses to the sale deed/transaction which clearly weakens the case of the Department. The first deposit found in the account of the sellers is of December 2005 then on 25.8.2006 and thereafter on 14.10.2006. It is further noted that affidavits of sellers are dated 31.12.2009 which is clearly an afterthought, ....
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....e is no evidence, in view of these facts, we are of the considered opinion that presumption cannot take the shape of evidence, however strong it may be. The Assessing Officer has not brought on any evidence on record interlinking the relation of the cash deposited in the accounts of the sellers that it actually belongs to the purchaser. The addition, so made, on presumption basis cannot stand on its legs. It is also noteworthy that even when the sellers found themselves cornered by the Department, they said that their own affidavits are wrong. In such a situation, the statements, tendered by the sellers, are clearly under the shade of dark clouds and cannot be appreciated as the sole basis for making the addition in the hands of another person, here the assessee. 2.6 So far as to the question whether burden has been discharged by the Department for establishing the nexus with the cash found deposited in the account of another person, here the seller, is concerned, we note that neither any agreement to sale has been brought on record nor the witnesses have been examined by the Assessing Officer. While deliberating upon the first question, it is proved beyond doubt that addition has....
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.... Section 91 & 92 of the Indian Evidence Act expressly bars/prohibits acceptance of oral evidence against such documents, more specifically when the registered documents are duly admitted to be correct by both the parties. The only admissible evidence regarding the terms of such contract/agreement, available before us, is the registered sale deed itself, therefore, the oral evidence loses its credibility in view of Section 92 of the Indian Evidence Act. Section 54 of the Transfer of the Property Act and Section 91 of the Indian Evidence Act conjointly says that the proof about terms of such contract can only be adduced by only placing the documents in evidence and no other evidence except the document itself is admissible. 2.8 Now, we shall deal with the issue with the help of judicial pronouncements, for which, ratio laid down by Hon'ble Orissa High Court in the case of Umakanta Das vs. Pradeep Kumar Roy (AIR) 1986 (Ori) 196 and the case of Ramchandra Biharilal vs. Mathur Mohan Nayak (AIR) 1964 (Ori) 239 throw some light. In these cases, it is settled that once the execution of the sale deed is proved, the recitals regarding payment of consideration are prima facie proof of it....
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....oozing out from these judicial pronouncements, is that oral evidence is not conclusive for making the addition and the value mentioned in the registered documents is having more evidentiary value. In another case of CIT vs. Satender Kumar, 250 ITR 484 (P&H) held that since there was no material evidence to establish that assessee made investment over and above that recorded in the sale deed, the Tribunal was justified in deleting the addition made u/s 69 of the Act. The Hon'ble Allahabad High Court in the case of CIT vs. Dayachand Jain Vaidya, 98 ITR 280 held that onus shifts to Revenue if the explanation of the assessee is not acceptable. In the case of CIT vs. N. Swami (2000) 241 ITR 363 (Mad), it was held that the burden of showing that the assessee had undisclosed income is on the Revenue. The burden cannot be said to be discharged by merely referring to the statement given by a third party. Identical ratio was laid down in CIT vs. P.V. Kalyansundaram, 164 Taxman 78 and 294 ITR 49 (SC). The Hon'ble Rajasthan High Court in Smt. Amar Kumar Surana vs. CIT, 89 Taxman 544 laid down the ratio that burden in on the Revenue to prove that real investment exceeded the investment ....
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....s. JCIT; 260 ITR 189 (Cal), in that case also, the addition u/s 69 & 69B of the Act was made for cost of construction wherein facts are different. 2.10 We further note that vide letter dated 23rd October 2009 (page 235 of the paper book) that Shri Pratap Singh Anjana, addressed to the ITO, in response to information sought u/s 133(6)(reference letter no.ITO-2(1)/UJN/9- 10/3418 dated 13.10.2009), duly furnished the passbook (the copy of which is also available in the paper book at page 246 to 249) for the period from 1.4.2005 to 31.3.2007 himself said that he sold agricultural land to the assessee for Rs. 21 lacs. Likewise, Shri Bahadur Singh also through his letter (page 250 of the paper book) confirmed that he sold the agricultural land to the assessee for Rs. 21 lacs along with his bank passbook. Likewise, Shri Vikram Singh confirmed of selling land to the assessee for Rs. 21 lacs (page 257 to 262 of the paper book). Shri Balu Singh, vide letter dated 23.10.2009, identically, confirmed of selling land for Rs. 21 lacs, which was in the joint name with his mother Smt. Leela Bai (page 262 to 267 of the paper book). Shri Motiram through identical letter also confirmed about the sale....
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....t the assessee and the statements of the sellers. Wherever cash has been given to the sellers, it has been specifically admitted in the affidavit as is evidenced from page 31 (Bahadur Singh Rs. 3 lacs on 27.7.2006, Rs. 3 lacs on the same date to Leela Bai, Rs. 1 lac on 24.8.2006 to Shri Moti Ram, Rs. 1 lac on 24.8.2006 to Shri Pratap Singh and Rs. 3 lacs on 27.8.2006 to Shri Vikram Singh). All the transactions made through cash and cheque are duly recorded in the books of accounts maintained by assessee firm in regular course of its business. This factual matrix, contained in the affidavit of the assessee, has not been controverted by the Revenue, therefore, there is no reason to affirm the addition, so made, by the Assessing Officer. The Assessing Officer is merely trying to catch the straw in whirlwinds with the help of oral statements of the sellers, ignoring the contents of the registered sale deeds, which are duly signed by the assessee as well as the sellers, in the presence of the witnesses and the registering authorities. It is noteworthy, as argued by the learned Counsel for the assessee also, that the sale was made on 27.7.2006 whereas the cash was deposited by the seller....