TaxTMI 
TaxTMI 
2022 (1) TMI 1385
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....builder and developer. Nil income was shown in the return filed on 12.02.2014. Notice u/s 148 of the Act was served followed with serving of notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceeding Ld. AO enquired about the issue of unexplained investment in property. Search action was carried out u/s 132 of the Act in M/s. Sagar Group. Various incriminating documents were found. Based on the seized documents Annexure LPS-3 page 62 to 75 it was observed that the assessee through its partner Sanjeev Agrawal purchased 1.495 hectare land located at Gram Katara, Patawari Halka No.25, RI No.03, Vikashkhand, Fands, The-Huzur Bhopal from Shri Pankaj Mikhija, Shri Pradeep sharma and Shri Pradeep Hirani Power of Attorney (POA) holder of Smt. Rekha Bai, Shri Lala Ram and Shri Devi Singh and Agarwal Buildcon through partner Shri Sanjeev Agarwal. During post search enquiry summons were issued to the sellers. Smt. Rekha Bai, shri lalaram and Shri Devi Singh attended before DDIT(Investment) and statements recorded on oath on 30.10.2011. During the statement, these persons produced agreement dated 27.11.2010 between Shri Raj Kumar Hirani, Shri Pradeep sharma and Shri Lal....
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....g opportunity of cross examination was declined by the Ld. AO and thus the additions were made on assumption in presumption. Ld. CIT(A) after considering the submission of the assessee deleted the addition observing that the additions were made merely on the basis of statement of seller but no opportunity of cross examination was provided and the additions made only on the basis of oral evidences and the same are on assumption basis without having any incriminating material on record. 4. Aggrieved revenue is now in appeal before this Tribunal. 5. Ld. counsel for the assessee vehemently argued supporting the order of Ld. AO and heavily relied on the detailed finding of Ld. CIT(A) and the decisions referred and relied in the appellate order. Reference was also made to the paper book dated 11.01.2022 containing 44 pages providing details for sale deed, agreements, statement of Rekha Bai, copy of audited financial statements and reasons for reopening. 6. We have heard rival contentions and perused the records placed before us. Revenue's sole grievance raised in ground no.1 relates to deletion of addition by ld. CIT(A) of Rs.3,53,80,000/- made by the ld. AO on account of unexpl....
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....ht on record stating that the impunged land was to be sold by Shri Lalaram, Shri Devi Singh and Smt Reha Bai to Shri Raj Kumar Hirani & Shri Pradeep Sharma. Against sale of this land the has received sum of Rs. 5,03,68,500/- on various dates which includes Rs. 1,72,99,998/- though cheque and Rs. 3,30,68,502/- in cash. It is important to mention that during statement in reply to Q.No. 9 it was admitted that all the three person have no connection with the appellant or its group i.e. Sagar Group. Further, registry was also done through POA holders, therefore, statement given by all the three persons is doubtful in nature and cannot be relied upon. The appellant has strongly contended that statement of the seller was recorded by the DDIT(Inv) in the post search proceedings and was recorded behind the back of the appellant. Further, the statement recorded DDIT(Inv) is without authority of law. Reliance has been placed on the decision of Hon'ble ITAT Allahabad Bench in the case of VVS Alloys Ltd vs ACIT 68 TTJ (All) 516. No other corroborative evidence is on record suggesting on-money payment by appellant to these persons. The AO did not make any independent enquiry and has solely r....
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....idences brought by them were solely relied by the AO and subsequently additions were made to the total income of the appellant without providing any opportunity of cross examination either by the DDIT(Inv), Bhopal or by the AO. It may be a case that the documents brought on record may be fabricated or may have been prepared after registry or during the course of assessment proceedings. Appellant during appellate proceedings has strongly contended that no opportunity of cross examination was given by the AO. I find force in the contentions of the appellant that no proper and. meaningful opportunity of cross examination was provided to the appellant. This is also an admitted fact that statement of sellers/POA holders were recorded behind the back of the appellant. No opportunity of cross-examination was ever allowed to the assessee. This has been held by the Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise Kolkata in Civil Appeal No.248 of 2006 that in absence of cross-examination of parties, the assessment proceedings to be quashed. Further, the Hon'ble Gujarat High Court in the case of Praful Chunilal Patel Vs, M.J. Makwana [....
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....fore, 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. Similar view has also been taken by Hon'ble ITAT Agra in the case of V Ramchandra Construction Pvt Ltd vs ACIT (2011) 18 ITJ 590 (Trib Agra). Thus, it is not settled legal principle that oral evidence have evidentiary value in criminal proceedings, but in income tax proceedings the oral evidence can only be accepted when there is no written evidence. Therefore, in view of the above judicial pronouncements it is the registered sale deed which has more evidentiary value than the oral statements of the sellers. (d) Additions made on assumption and presumption basis: Before embarking upon the discussion on the issue, it is important to discuss certain undisputed facts. This is an undisputed fact that nothing was brought on record to prove that assessee paid more amount than the amounts discl....
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....court in the case of Dhiraj Lal Girdharilal vis CIT (1954) 26 ITR 736 (SC). 4.2.3 Nonetheless, Hon'ble ITAT Indore in the case of Shri Lokesh Gadia vs ACIT (2019) 35 ITJ 301 (Trih-Indore) has held as under:- 28. In the instant case the assessee is not maintaining any books of accounts nor the land in question is purchased by him. Even otherwise the amount of investment in land shown by Natural Gadia Real Estate Pvt. Ltd is duly supported by various documentary evidences referred above and payment made through account payee cheque duly mentioned in the registered sale deeds. 29. We, therefore in the given facts and circumstances of the case are of the considered view that both the lower authorities erred in confirming the addition of Rs.1,75,00,000/- by wrongly invoking provisions of Section 69B of the Act, as the alleged transaction of sale of land by two sellers to the buyer Mis. Natural Gadia Real Estate Pvt. Ltd was entered into at a consideration of Rs.95,00,000/- only and no corroborative evidence is placed on record by the revenue authorities as well as Ld Departmental Representative which could prove that "on money" of Rs.1,75,00,000/- was paid....