Sh. Surinder Singh, Kathua V. The Income-tax Officer, Kathua

CO 23/ASR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7586 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMRIK SINGH
• Keywords: Sale consideration of property below Jantri Value; Document seized; Assessment record; Reason to believe; Documents seized
• Section: 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.229(ASR)/2012 ASSESSMENT YEAR:2007-08 PAN : AZUPS5927P INCOME TAX OFFICER VS. SH.SURINDER SINGH, WARD 1(4), KATHUA. KATHUA. (APPELLANT) (RESPONDENT) C.O. NO.23(ASR)/2012 (ARISING OUT I.T.A. NO.229(ASR)/2012) ASSESSMENT YEAR:2007-08 SH.SURINDER SINGH VS. INCOME TAX OFFICER, KATHUA. WARD 1(4), KATHUA. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH.AMRIK SINGH, DR RESPONDENT BY:SH. R.K. GUPTA, CA DATE OF HEARING:18/09/2012 DATE OF PRONOUNCEMENT:25/09/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU, DATED 01.03.2012 RELATING TO ASSESSMENT YEAR 2007-08. ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF U NDISCLOSED INCOME ON PURCHASE OF FLAT WHEN THE SECRETARY OF TH E SOCIETY IN HIS STATEMENT RECORDED U/S 132(4) OF THE INCOME-TAX , 1961 HAS ADMITTED THAT THE AMOUNT RECEIVED FROM MEMBERS IN C ASH AS WELL AS CHEQUES WERE UTILIZED FOR THE CONSTRUCTION OF THE FLATS. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSE D INCOME ON PURCHASE OF FLAT RELYING UPON THE DECISION OF THE H ONBLE ITAT WHICH IS NOT THE ORDER OF THE JURISDICTIONAL ITAT. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSE D INCOME ON PURCHASE OF FLAT RELYING UPON THE DECISION OF THE H ONBLE ITAT WHICH HAS BEEN CHALLENGED BY THE DEPARTMENT BEFORE HONBLE AP HIGH COURT IN ITTA NO.563/2011 & ITTASR 2026/11. 4. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSE D INCOME ON PURCHASE OF FLAT WHEN THE AMOUNT SHOWN IN ANNEXURE A-50 HAS BEEN RECEIVED BY M/S. DREAM LAND COOPERATIVE HOUSE BUILDING LTD. FROM THE MEMBERS OF THE SOCIETY AND UTILIZED B Y THE SOCIETY FOR THE CONSTRUCTION OF THE FLATS, DEVELOPMENTS OF THE AREA BY THE SIDE OF THAT PARTICULAR SITE ETC. AND FOR PROVIDING VARIOUS AMENITIES TO THE FLAT OWNERS AND TOTAL PROFIT OF RS.50,00,000 /- WAS EARNED BY THE SOCIETY FOR THE A.Y. 2007-08 AND THE DOCUMENT A -50 IS A RELEVANT DOCUMENT WHICH IS CORROBORATED BY THE STAT EMENT OF SH. RAKESH SINGH RECORDED U/S 132(4) OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE HAS ALSO FILED C.O. 4. THE BRIEF FACTS OF THE PRESENT CASE AS PER ORDE R OF THE A.O. ARE REPRODUCED AS UNDER: A COMPUTERIZED STATEMENT OF THE DREAM LAND COOPERAT IVE HOUSING SOCIETY SHOWS THAT IT HAD SOLD FLATS TO 46 PERSONS IN ALL AND ASSESSES NAME FIGURES AT S.NO.15. THIS STATEMENT ALSO SHOW B IFURCATION OF AMOUNT DUE AND RECEIVED BY CHEQUE AND BY CASH FROM ALL PERSONS ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 3 MENTIONED THEREIN. IN ASSESSEES CASE IT IS MENTION ED THAT THEY HAVE RECEIVED PAYMENT OF RS.7 LACS BY CHEQUE AND RS.11.5 0 LACS BY CASH. THE ASSESSEE HAS CITED FEW CASE LAWS WHOSE FACTS A RE ENTIRELY DIFFERENT FROM THE FACTS OF THIS CASE. IN THIS CAS E, THE PERSON WHO HAS SOLD THE FLAT HAS ADMITTED NOT MERELY GIVEN A STATE MENT) TO HAVE RECEIVED THE AMOUNT OF RS.11.50 LACS IN CASH FROM T HE ASSESSEE. THIS ADMISSION IS NOT IN RESPECT OF THE ASSESSEE ALONE B UT IN RESPECT OF ALL OTHERS WHO HAVE PURCHASED FLATS FROM THE SOCIETY. F URTHER, HE HAS SURRENDERED THE AMOUNT TAKEN IN CASH FROM BUYERS OF THE FLAT AND EVEN PAID INCOME TAX THEREON. IN THE PRESENT CASE, THE AO HAD RECEIVED INFORMATI ON THAT THE ASSESSEE HAD MADE PAYMENT IN RESPECT OF THE FLAT AN D CONSULTED THE ASSESSMENT RECORD OF THE ASSESSEE. HAVING NOT FOUND ANY MENTION OF PAYMENT OF FLAT AND PAYMENT MADE IN CASH HEREOF, TH E AO HAD A REASON TO BELIEVE THAT THE INCOME HAD ESCAPED ASSES SMENT. FROM THE ADMISSION OF THE SECRETARY OF THE SOCIETY , IT IS CLEAR THAT THE ASSESSEE PAID RS.11.50 LACS IN CASH (IN AD DITION TO THE AMOUNT OF RS.7 LACS PAID BY CHEQUES FOR PURCHASE OF FLAT F ROM DREAMLAND HOUSING COOPERATIVE SOCIETY. THE SAID AMOUNT OF RS. 11.50 LACS HAS BEEN PAID FROM THE SOURCES NOT DISCLOSED IN THE RET URN OF INCOME, IN VIEW OF ABOVE, THE AMOUNT OF RS.11.50 LACS IS TREAT ED AS ASSESSEES INCOME AND ADDED TO THE INCOME DECLARED IN HIS RETU RN. 5. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE SUB MISSIONS WHICH WERE FORWARDED TO THE AO. AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND THE COMMENTS OF THE AO AND COUNTER COMMENTS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION FOR THE REASON THAT TH OUGH A PRESUMPTION U/S 132(4A) OF THE ACT THAT TOO REBUTTABLE, IS AVAILABL E AGAINST THE PERSON FROM WHOSE POSSESSION A SEIZURE IS MADE BUT THIS PRESUMP TION CANNOT BE EXTENDED TO OTHERS AND WITHOUT ANYTHING ELSE THAN THE SOLE SEIZED DOCUMENTS, ANY ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 4 ADDITION CANNOT BE MADE. IN THE PRESENT CASE ALSO T HE SOLE COMPUTERIZED SLIP COULD BE A STARTING POINT OR A CLUE ONLY BUT IS NOT CONCLUSIVE EVIDENCE TO JUSTIFY THE ADDITION, MORE SO IN ASSESSMENT YEAR 2 007-08, WHEN NO EVIDENCE TO THIS EFFECT IS AVAILABLE EVEN IN THE COMPUTERIZE D SLIP. THEREFORE, THERE CANNOT BE ANY PRESUMPTION AS TO THE DATE ALSO. ACC ORDINGLY, THE LD. CIT(A) DELETED THE ADDITION OF RS.11,50,000/- MADE BY THE A.O. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ONLY PIECE OF PAPER WHICH IS A COMPUTERIZED SHE ET DATED 04.07.2007 SEIZED FROM A THIRD PARTY I.E. M/S. DREMLAND CO-OPE RATIVE SOCIETY ON 19.07.2007 IS THE ONLY DOCUMENT ON THE BASIS OF WHI CH THE AO HAD MADE THE ADDITION. WE CONCUR WITH THE VIEWS 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 NOTHI NG 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 FR OM ASSESSEE. IT IS ALSO UNDISPUTED THAT THE DOCUMENT IS NOT IN THE HANDWRIT ING OF ASSESSEE AND DID NOT BELONG TO ASSESSEE. IT IS ALSO NOT DISPUTED THA T THERE IS NO DATE OF ALLEGED PAYMENT MENTIONED IN THIS LOOSE DOCUMENT. IT IS A F ACT THAT AS PER SALE DEED DATED 11.01.2007 THE FLAT WAS SOLD BY THE SOCIETY T O THE ASSESSEE FOR A FULL ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 5 AND FINAL CONSIDERATION OF RS.7.00 LACS PAID THROUG H CHEQUE NO.346637 DATED 08.01.2007 AND THIS VALUE HAS DULY BEEN ACCEP TED BY THE REGISTRATION AUTHORITY. IT IS ALSO NOT UNDER DISPUTE THAT THE SE CTION 50C IS NOT INVOKED IN THIS CASE. AS PER SALE DEED THE DESCRIPTION OF THE FLAT AGAINST THE NAME OF SH. SURINDER SINGH IS GIVEN AS FLAT NO.15 IN BLOCK-A, F ALLING IN THE THIRD FLOOR OF THE SOCIETY WHEREAS AS PER THE DOCUMENT SEIZED IT I S SHOWN AT 4 TH FLOOR. THE OCCUPANTS AT 3 RD FLOOR MENTIONED IN THE DOCUMENTS ARE SOME OTHER PE RSONS. IN RESPECT OF MOST OF OTHER NAMES IN THE DOCUMENT IN C OLUMN ARE DOA AND DUE DATE IS MENTIONED BUT THERE IS NO MENTION OF ANY D UE DATE IN CASE OF ASSESSEE. THE ASSESSEE HAS CATEGORICALLY DENIED HAV ING MADE ANY PAYMENT IN CASH IN HIS WRITTEN SUBMISSIONS THOUGH NO STATEMENT HAVE BEEN RECORDED. THE AO HAS BASED HIS ENTIRE CASE ON THIS DOCUMENT AND THE STATEMENT GIVEN BY SH. RAKESH KUMAR OF M/S. DREAMLAND CO-OPERATIVE SOCIETY. MOREOVER, DURING THE ASSESSMENT OF THE SOCIETY A VALUATION R EPORT OF THE PROPERTY WAS FILED WHERE AN AMOUNT OF RS.50 LAKHS HAD BEEN SURRE NDERED BY THE SAID SOCIETY. IN THE PRESENT CASE, WHEN DOCUMENT SEIZED IS NOT BEARING ANY DATE AS REGARDS THE PAYMENT MADE IN CASH, THE SAME CANNO T BE LINKED TO THE ASSESSEE CONCLUSIVELY IN THE IMPUGNED ASSESSMENT YE AR. A MERE PRESUMPTION THAT SALE DEED IS REGISTERED IN THE IMPUGNED ASSESS MENT YEAR AND THEREFORE, CASH PAYMENT IS ALSO MADE IN THE SAME YEAR IS NOT E NOUGH IN THE ABSENCE OF ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 6 ANY LINK IN THE LIST OF THE PAYMENT. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) AND THE CASES RELIED UPON BY HIM THAT PRESUM PTION IS AVAILABLE AGAINST THE PERSON FROM WHOSE POSSESSION A SEIZURE IS MADE BUT THE SAME CANNOT BE EXTENDED TO OTHERS. ACCORDINGLY, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO AND WE FIND NO INFIRMITY IN HIS ORDER. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 7. AS REGARDS C.O. NO. 23(ASR)/2012 OF THE ASSESSEE , THE LD. COUNSEL HAS RELIED UPON THE DECISION OF AMRITSAR BENCH IN THE CASE OF INCOME TAX OFFICER VS. ARUN KUMAR KAPOOR (2011) 140 TTJ 249 AN D A COPY OF THE SAME HAS BEEN PLACED ON RECORD, WHERE IT HAS BEEN HELD T HAT REASSESSMENT ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH OF THIRD PARTY AND THE PROVISIONS OF SECTION 153C ARE APPLICABLE WHICH EXC LUDE THE APPLICATION OF SECTION 147 & 148. HENCE, NOTICE ISSUE U/S 148 AND PROCEEDINGS U/S 147 ARE ILLEGAL AND VOID AB INITIO. THE AO HAVING NOT FOLLO WED THE PROCEDURE U/S 153C, REASSESSMENT ORDER WAS RIGHTLY QUASHED BY TH E LD. CIT(A). ON THE IDENTICAL FACTS, IN THE PRESENT CASE, THE AO HAD IS SUED NOTICE U/S 148 AND THEREFORE, FOLLOWING THE SAID DECISION OF THE ITAT, AMRITSAR BENCH, IN THE CASE OF I.T.O. VS. ARUN KUMAR KAPOOR (SUPRA), THE R EASSESSMENT MADE BY THE AO IS DIRECTED TO BE QUASHED. THUS, THE C.O. OF THE ASSESSEE IS ALLOWED. ITA NO.229((ASR)2012 CO NO.23(ASR)/2012 7 8. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.229(ASR)/2012 IS DISMISSED AND C.O. NO.23(ASR)/2012 OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH SEPTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.SURINDER SINGH PRO. UNIQUE ENTERPRI SES, KATHJUA. 2. THE ITO KATHUA. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.