Dr. Yeshodha By L/H Sreekumar, Calicut V. ACIT, Calicut

CO 62/COCH/2007

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8307 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 5 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-12-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 31-08-2007
• Court: TRIBUNAL
• Keywords: Search and seizure; Loose papers; Valuation report; Block assessment
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 690, 691 & 692/COCH/2007 ASSESSMENT YEARS : 1999-2000, 2000-01 & 2004-0 5 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, CALICUT. VS. DR. E. YESHODHA (LATE), BY L/HR. DR. A.V. SREEKUMAR, FRAGRANCE VELLUR, PAYYANNUR, KANNUR. [PAN: AAYPK 0761C]. (REVENUE -APPELLANT) (ASSESSEE-R ESPONDENT) C.O. NOS. 62,63 & 64/COCH/2007 (ARSG. OUT OF I.T.A. NOS. 690, 691 & 692/COCH/20 07 ASSESSMENT YEARS : 1999-2000, 2000-01 & 2004-0 5 DR. E. YESHODHA (LATE), BY L/HR. DR. A.V. SREEKUMAR, FRAGRANCE VELLUR, PAYYANNUR, KANNUR. [PAN: AAYPK 0761C]. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, CALICUT. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) REVENUE BY SHRI M. ANIL KUMAR, CIT(DR) ASSESSEE BY SHRI V.V. ASHOKAN, ADV. DATE OF HEARING 06/12/2012 DATE OF PRONOUNCEMENT 08/02/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: ALL THESE APPEALS FILED BY THE REVENUE AND TH E CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. CIT(A)-I, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 1999-2000, 2000-01 A ND 2004-05. ALL THESE APPEALS WERE HEARD TOGETHER AND HENCE THEY ARE BEING DISPOS ED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE.. I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 2 2. THESE APPEALS WERE ORIGINALLY HEARD EX PARTE BY THE CO-ORDINATE BENCH AND A COMMON ORDER WAS PASSED ON 11-02-2010. THE ASSESSE E MOVED MISCELLANEOUS APPLICATIONS SEEKING RECALL OF THE ORDER, WHICH WAS DISMISSED. CONSEQUENT THERE-TO, THE ASSESSEE APPROACHED THE HONBLE HIGH COURT OF KERA LA BY FILING A WRIT PETITION AND THE HONBLE HIGH COURT DIRECTED THE TRIBUNAL TO RE-HEAR THE APPEALS ON THE CONDITION THAT THE PETITIONER REMITS A SUM RS.5000/- TO THE DEPART MENT AS COST WITHIN ONE MONTH. CONSEQUENT TO THE DIRECTION OF THE HONBLE HIGH COU RT, THESE APPEALS WERE TAKEN ON RECORD BY THE TRIBUNAL AND THEY WERE HEARD ON 08-08 -2012. HOWEVER, IT WAS NOTICED THAT THE COST AMOUNT OF RS.5000/- WAS PAID BY DR. A .V. SREEKUMAR, THE LEGAL REPRESENTATIVE OF THE ASSESSEE, IN HIS INDIVIDUAL C APACITY IN HIS P.A. NO. AKAPS 8705J, AS HIS PERSONAL SELF-ASSESSMENT TAX FOR THE ASSESSM ENT YEAR 2011-2012. THE BENCH TOOK THE VIEW THAT THE COST AMOUNT OF RS. 5000/- SH OULD HAVE BEEN REMITTED IN THE ASSESSEES P.A. NO. AAYPK 0761C AS OTHER PAYMENTS . ACCORDINGLY, THE CASES WERE RELEASED FOR SEEKING CLARIFICATION. HENCE, THE ASS ESSEE APPROACHED THE HONBLE HIGH COURT AGAIN AND THE HONBLE HIGH COURT HELD THAT TH E PAYMENT ALREADY MADE BY THE PETITIONER (DR. A.V. SREEKUMAR IN HIS PAN A/C) SHAL L BE ACCEPTED AS PAYMENT OF COST AS DIRECTED BY THE HONBLE HIGH COURT. ACCORDINGLY, T HESE CASES WERE FINALLY HEARD ON 06- 12-2012. 3. IN THE ASSESSMENT YEARS 1999-2000 AND 2000-0 1, THE ISSUES URGED BY THE REVENUE RELATES TO THE DETERMINATION OF CAPITAL GAIN ARISIN G ON SALE OF LAND ADMEASURING 16 CENTS, WHICH WAS SOLD IN TWO PARTS DURING THE PERIO D FALLING IN THE ABOVE SAID TWO ASSESSMENT YEARS. IN BOTH THE YEARS, THE REVENUE IS ASSAILING THE DECISION OF LD CIT(A) IN HOLDING THAT THE SALE VALUE OF 16 CENTS SHOULD B E TAKEN AS RS.60.00 LAKHS IN THE PLACE OF RS.1,01,00,000/- DETERMINED BY THE AO. THE REVE NUE IS ALSO ASSAILING THE DECISION OF LD CIT(A) IN DIRECTING THE AO TO DETERMINE THE VALU E AS ON 1.4.1981 AS PER THE APPROVED VALUERS REPORT INSTEAD OF THE AMOUNT DETE RMINED BY THE ASSESSING OFFICER. IN ASSESSMENT YEAR 2004-05, THE REVENUE IS ASSAILING T HE DECISION OF LD CIT(A) IN HOLDING THAT THE SALE VALUE OF THE FLAT LOCATED IN BANGALOR E SHOULD BE TAKEN AS RS.10,40,000/- IN THE PLACE OF RS.14,00,000/- DETERMINED BY THE ASSES SING OFFICER. I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 3 4. IN THE CROSS OBJECTIONS, THE ASSESSEE HAS RA ISED FOLLOWING TWO LEGAL GROUNDS. (A) WHETHER THE ASSESSING OFFICER WAS RIGHT IN LAW IN REOPENING THE ASSESSMENT OF THE ASSESSMENT YEAR 1999-2000, SINCE THE LAST PA NCHANAMA WAS DRAWN ON 20- 04-2005. (B) WHETHER THE ASSESSMENT MADE U/S 153A OF THE AC T FOR THE ASSESSMENT YEARS 1999-2000 AND 2000-01 WERE RIGHT IN LAW WHEN NO SEA RCH MATERIAL RELATING TO THESE TWO YEARS WAS FOUND DURING THE COURSE OF SEAR CH. THE ASSESSEE HAS ALSO RAISED FOLLOWING GROUNDS ON M ERITS IN ASSESSMENT YEARS 1999- 2000 AND 2000-01:- (A) THE LD CIT(A) WAS NOT JUSTIFIED IN HOLDING TH AT THE SALE CONSIDERATION OF 16 CENTS OF LAND SOLD BY THE ASSESSEE AT RS.60.00 LAKH S AS AGAINST THE AMOUNT OF RS.32.00 LAKHS DECLARED IN THE CONVEYANCE DEEDS. (B) THE CONTENTION OF THE ASSESSING OFFICER THAT T HE VALUATION REPORT DETERMINING THE VALUE AS ON 1.4.1981 WAS NOT FILED BEFORE HIM I S WITHOUT ANY BASIS. IN ASSESSMENT YEAR 2004-05, THE ASSESSEE IS CONTEND ING THAT THE LD CIT(A) WAS NOT JUSTIFIED IN DETERMINING THE SALE VALUE OF BANGALOR E FLAT AT RS.10,40,000/- IN THE PLACE OF RS.9,10,000/- DECLARED BY THE ASSESSEE. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS A DOCTOR BY PROFESSION. THE DEPARTMENT CARRIED SEARCH AND SEIZ URE OPERATIONS IN THE HANDS OF THE ASSESSEE ON 22-03-2005. THE SEARCH WAS CONTINUED O N 20-04-1995 AND THE FINAL PANCHANAMA WAS PREPARED ON THAT DATE. CONSEQUENT T O SEARCH AND SEIZURE OPERATIONS, THE ASSESSMENT PROCEEDINGS U/S. 153A WAS INITIATED FOR SIX PRECEDING ASSESSMENT YEARS FROM 1999-2000 TO 2004-05. IN THE MEANTIME, DR. E. YESHODHA EXPIRED ON 24-02-2006 AND HENCE, THE ASSESSMENT PROCEEDINGS WERE CONTINUE D IN THE NAME OF HER LEGAL HEIR, DR. A.V. SREEKUMAR (SON OF THE ASSESSEE). 4. WE SHALL FIRST TAKE UP THE APPEALS OF THE RE VENUE RELATING TO THE ASSESSMENT YEARS 1999-2000 AND 2000-2001. DR. E. YESHODHA HAD SOLD 1 6 CENTS OF LAND AND HOUSE IN PAYYANNUR TO A PERSON NAMED SHRI K.N. ABDUL HAMEED AND HIS TWO BROTHERS, WHO WERE I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 4 NON-RESIDENT INDIANS, IN TWO PARTS, VIZ., 8 CENTS O F LAND WAS SOLD ON 02-07-1998 AND THE REMAINING 8 CENTS WERE SOLD ON 10-05-1999. THE SAL E CONSIDERATION WAS SHOWN AS RS.16.00 LAKHS IN EACH DOCUMENT AND HENCE THE AGGRE GATE SALE CONSIDERATION OF THE ENTIRE AREA OF 16 CENTS WORKED OUT TO RS.32 LAKHS. WE CAN NOTICE THAT THE SALE OF FIRST PART TOOK PLACE IN THE YEAR RELEVANT TO THE ASSESSM ENT YEAR 1999-2000 AND THE SECOND SALE TOOK PLACE IN THE YEAR RELEVANT TO THE ASSESSM ENT YEAR 2000-01. 5. THE DEPARTMENT HAD RECEIVED A TAX EVASION PE TITION, WHEREIN IT WAS STATED THAT THE IMPUGNED PROPERTY OF 16 CENTS OF LAND WAS SOLD BY THE ASSESSEE FOR A CONSIDERATION OF RS.1,01,00,000/- AND IN SUPPORT OF THE SAME TWO PHOTO COPIES OF CONSENT LETTERS SIGNED BY THE ASSESSEE WERE ENCLOSED WITH THE PETIT ION. THE AO ANALYSED THE ABOVE SAID CONSENT LETTERS WITH THE BANK ACCOUNTS OF THE ASSESSEE; EXAMINED THE WITNESSES AND CAME TO THE CONCLUSION THAT THE ACTUAL SALE CON SIDERATION WAS ONLY RS.1,01,00,000/- AND NOT RS.32,00,000/- AS DECLARED IN THE CONVEYANC E DEEDS. THE AO DID NOT AGREE WITH THE VALUE OF THE LAND AS ON 01.4.1981 DECLARED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. ACCORDINGLY, THE ASS ESSING OFFICER RECOMPUTED THE LONG TERM CAPITAL GAIN ARISING ON SALE OF 16 CENTS OF LA ND IN THE TWO ASSESSMENT YEARS, VIZ., ASST. YEAR 1999-2000 AND 2000-01. THE LD CIT(A) NO TICED THAT THE SALE CONSIDERATION COULD BE TRACED TO THE BANK ACCOUNTS OF THE ASSESSE E ONLY TO THE EXTENT OF RS.60.00 LAKHS. FURTHER, THE LD CIT(A) TOOK THE VIEW THAT T HE PHOTO COPIES OF THE CONSENT LETTERS ARE DUMB DOCUMENTS ON WHICH NO RELIANCE COULD BE PL ACED. ACCORDINGLY, HE DIRECTED THE AO TO TAKE THE SALE CONSIDERATION AS RS.60.00 L AKHS. THE LD CIT(A) ALSO DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE AS ON 1.4. 1981 AT THE FIGURE DETERMINED BY AN APPROVED VALUER. AGGRIEVED BY THE ORDER OF LD CIT( A), THE REVENUE HAS PREFERRED APPEALS BEFORE US FOR THE ABOVE SAID TWO YEARS. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS FOR THESE TWO YEARS. 6. BEFORE GOING INTO THE MERITS OF THE ISSUES, WE FEEL IT APPROPRIATE TO ADJUDICATE THE LEGAL ISSUES URGED BY THE ASSESSEE IN HIS CROSS OBJ ECTION. ACCORDING TO THE ASSESSEE, THE ASSESSING OFFICER WAS WRONG IN RE-OPENING THE A SSESSMENT OF THE ASSESSMENT YEAR 1999-2000, AS IT FALLS BEYOND SIX YEARS PRESCRIBED IN SEC. 153A OF THE ACT, SINCE THE I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 5 SEARCH WAS CONCLUDED ONLY ON 20-04-1995. IT MAY BE RECALLED THE SEARCH WAS COMMENCED IN THE HANDS OF THE ASSESSEE ON 22.3.2005 AND CONTINUED ON 20.4.1995. THE ASSESSING OFFICER HAS RECOGNISED THE SEARCH CON DUCTED ON 22.3.2005 AND HENCE REOPENED THE ASSESSMENT OF THE ASSESSMENT YEAR 1999 -2000. HOWEVER, IF THE DATE OF 20.4.1995 IS CONSIDERED, THE ASSESSMENT YEAR 1999-2 000 WOULD FALL OUTSIDE THE PURVIEW OF SEC. 153A OF THE ACT. ACCORDING TO THE PROVISIO NS OF CLAUSE (B) OF SUB. SEC. (1) OF SEC. 153A OF THE ACT, THE AO SHALL ASSESS OR REASSE SS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. THERE CANNOT BE ANY DISPU TE THAT THE SEARCH WAS CONDUCTED IN THE HANDS OF THE ASSESS EE ON 22.3.2005. IN THAT CASE, IN OUR VIEW, THE ASSESSING OFFICER WAS RIGHT IN LAW IN REOPENING THE ASSESSMENT OF THE ASSESSMENT YEAR 1999-2000, AS THAT YEAR FALLS WITHI N THE PERIOD OF SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR 2005-06. THE CONTENT ION OF THE ASSESSEE THAT THE DATE ON WHICH THE LAST PANCHANAMA WAS DRAWN SHOULD BE RE COGNISED FOR DETERMINING THE YEARS TO BE COVERED U/S 153A DOES NOT HAVE ANY LEGA L BACKING. AS OBSERVED BY LD CIT(A), THE EXPLANATION RELATING TO THE LAST PANCHA NAMA IS SEEN SPECIFIED FOR DETERMINING THE TIME LIMIT FOR COMPLETION OF ASSESS MENT U/S 153A OF THE ACT. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE DECISION TAKEN BY LD CIT(A) ON THIS ISSUE. 7. THE NEXT LEGAL ISSUE RELATES TO THE VALIDITY OF THE PROCEEDINGS U/S 153A OF THE ACT, AS THERE WAS NO SEIZURE OF ANY MATERIAL EITHER DURI NG THE COURSE OF SEARCH OR DURING POST SEARCH ENQUIRIES. ACCORDING TO THE ASSESSEE, IN THE ASSESSMENT PROCEEDINGS CARRIED ON U/S 153A OF THE ACT, THE AO WAS NOT ENTI TLED TO RELY UPON MATERIALS WHICH WERE ALREADY AVAILABLE WITH HIM PRIOR TO THE DATE O F SEARCH FOR CARRYING OUT THE SEARCH ASSESSMENTS U/S 153A OF THE ACT. IN THIS REGARD, THE ASSESSEE PLACED RELIANCE ON THE DECISION OF KOLKATTA BENCH OF TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL LTD VS. DCIT (2008)(119 TTJ 214). HOWEVER A CAREFUL PERUSAL OF THE PROVISIONS OF SEC. 153A SHOW THAT THE ASSESSMENT PROCEEDINGS UNDER THAT SECTION ARE TRIGGERED ON CONDUCTING THE SEARCH AFTER 31 ST DAY OF MAY, 2003 AND THE ASSESSMENTS FOR THE ASSES SMENT YEARS SPECIFIED IN THAT SECTION ARE REOPENED BY ISSUING A NOTICE. IN THE CASE OF PROVISIONS OF BLOCK ASSESSMENT CARRIED UNDER CHAPTER XIV-B, THE A CT SPECIFICALLY PROVIDED THAT THE I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 6 ASSESSMENTS SHALL BE MADE ON THE BASIS OF INCRIMINA TING MATERIALS FOUND DURING THE COURSE OF SEARCH, SINCE THE BLOCK ASSESSMENT RAN PA RALLEL TO THE REGULAR ASSESSMENTS. HOWEVER, NO SUCH CONDITION HAS BEEN PRESCRIBED IN S EC. 153A OF THE ACT, I.E., IT IS NOT PROVIDED THAT THE ASSESSMENT SHOULD BE BASED UPON S EARCH MATERIALS ONLY. FURTHER THE SAID SECTION DOES NOT CONTEMPLATE TWO PARALLEL ASSE SSMENTS, MEANING THEREBY, THE AO SHOULD FRAME ONLY ONE ASSESSMENT FOR EACH OF THE AS SESSMENT YEARS. IN THAT CASE, IN OUR VIEW, THE AO IS REQUIRED TO COMPUTE THE TOTAL I NCOME OF EACH OF THE ASSESSMENT YEAR AND IN THAT PROCESS, HE IS ENTITLED TO TAKE IN TO ACCOUNT THE INCOME ALREADY DISCLOSED, THE INCOME FOUND DURING THE COURSE OF SE ARCH AND ANY OTHER INCOME ESCAPING THE ASSESSMENT. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE ASSESSING OFFICER WAS ENTITLED TO TAKE INTO ACCOUNT THE MATERIAL ALREADY AVAILABLE WITH HIM FOR THE PURPOSE OF COMPLETING THE ASSESSMENTS U/S 153A OF THE ACT. IN THE CASE OF LMJ INTERNATIONAL LTD (SUPRA), THE ASSESSING OFFICER THEREIN RECONSIDERED THE REGULAR ITEMS OF INCOME ALREADY DISCLOSED BY THE ASSESSEE IN THE ASSESSMENT PROCEED INGS UNDERTAKEN U/S 153A OF THE ACT. IN THAT CONTEXT, THE TRIBUNAL DELETED THE ADDI TIONS RELATING TO REGULAR ITEMS OF INCOME. THE FACTS AVAILABLE IN THE INSTANT CASE BE ING DIFFERENT, IN OUR VIEW, THE SAID DECISION IS NOT APPLICABLE HERE. 8. THE ISSUES TO BE CONSIDERED ON MERITS, WHICH ARE COMMON IN THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE AS SESSEE ARE:- (A) WHAT WAS THE ACTUAL SALE CONSIDERATION AND (B) WHAT WAS THE VALUE OF THE PROPERTY AS ON 1.4 .1981. AS STATED EARLIER, THE TAX EVASION PETITION RECEIVE D BY THE INVESTIGATION WING OF THE DEPARTMENT WAS ATTACHED WITH PHOTO COPIES OF TWO LE TTERS DATED 15.12.1997 AND 05.01.1998. THE SAID TWO LETTERS WERE SIGNED BY TH E ASSESSEE SMT. E. YASHODHA, WHEREIN SHE HAD GIVEN CONSENT TO SELL THE IMPUGNED PROPERTY FOR A CONSIDERATION OF RS.1,01,00,000/-. THE CONSENT LETTER DATED 15.12.1 997 WAS WITNESSED BY THE HUSBAND OF THE ASSESSEE NAMED DR. A.V.KARUNAKARAN AND ANOTH ER PERSON NAMED E.C.MANOHARAN. THE SECOND CONSENT LETTER WAS WITNES SED BY DR. A.V.KARUNAKARAN ONLY. BOTH THE CONSENT LETTERS WERE PREPARED BY A DOCUMEN T WRITER NAMED SRI MADHAVAN. AS PER THE FIRST CONSENT LETTER, THE ASSESSEE WAS GIVE N 10 CHEQUES OF RS.1.00 LAKH EACH BY I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 7 THE BUYER SHRI ABDUL HAMEED AND THE ASSESSEE ALSO E NCASHED THE FIRST CHEQUE. IN THE SECOND CONSENT LETTER THE ADVANCE AMOUNT OF RS.10.0 0 LAKHS WAS MENTIONED. ACCORDING TO THE AO, THE ASSESSEE WAS PAID 9.00 LAKHS IN CASH AND THE 9 CHEQUES OBTAINED EARLIER WERE RETURNED BACK. THE FIRST DOCUMENT CONVEYING 8 CENTS OF LAND WAS REGISTERED ON 02-07-1998 FOR AN APPARENT CONSIDERATION OF RS.16.0 0 LAKHS AND THE SECOND DOCUMENT CONVEYING THE REMAINING 8 CENTS OF LAND FOR AN EQUA L CONSIDERATION WAS REGISTERED ON 10-05-1999. THE AO NOTICED THAT THERE WERE TRANSFE R/DEPOSIT OF FUNDS TO THE TUNE OF RS.32.00 LAKHS IN ACCOUNT NO.1094 AND FURTHER A SUM OF RS.28.00 LAKHS WAS ENCASHED THROUGH ANOTHER ACCOUNT NUMBERED 1101. WHEN CONFRO NTED WITH THE BANK TRANSACTIONS, THE ASSESSEE FILED A CASH FLOW STATEM ENT, WHEREIN THE AMOUNT RECEIVED FROM SHRI ABDUL HAMEED (PURCHASER) WAS DECLARED AT RS.60.00 LAKHS (RS.32 LAKHS AS PER SALE DEED + RS.28.00 LAKHS EXCESS RECEIVED). B ASED ON THE EVIDENCE OF EXCESS OF RECEIPT OF RS.28.00 LAKHS AND ALSO ON THE BASIS OF CONSENT LETTERS REFERRED SUPRA, THE AO CONCLUDED THAT THE ASSESSEE HAS RECEIVED SALE CONSI DERATION TO THE TUNE OF RS. 1,01,00,000/-. HOWEVER, THE LD CIT(A) HELD THAT TH E CONSENT LETTERS ARE DUMB DOCUMENTS AND HENCE HELD THAT THE AO SHOULD NOT PLA CE RELIANCE ON THEM. ACCORDINGLY, THE LD CIT(A) DETERMINED THE SALE CONSIDERATION AT RS.60.00 LAKHS, I.E., TO THE EXTENT OF THE DEPOSITS FOUND IN THE BANK ACCOUNTS OF THE ASSE SSEE. IN THE CASH FLOW STATEMENTS, THE ASSESSEE HAD DECLARED RS.16.00 LAKHS IN THE FIN ANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 1999-2000 AND THE REMAINING AMOUNT OF RS.44.00 LAKHS IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2000 -01. 9. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE AND CAREFULLY PERUSED THE RECORD. ACCORDING TO THE ASSESSEE, THE CONSENT LET TERS WERE SIGNED BY THE ASSESSEE ONLY, I.E., THE BUYER OF THE PROPERTY HAS NOT SIGNE D THE LETTERS AND HENCE THEY CANNOT BE CONSIDERED AS SALE AGREEMENTS. HOWEVER, THE FACT R EMAINS THAT WITNESSES HAVE AVERRED THAT THE CONSENT LETTERS WERE SIGNED IN THE PRESENC E OF THE BUYER, SHRI ABDUL HAMEED. AS PER THE CONSENT LETTER DATED 15.12.1997, THE ASS ESSEE WAS GIVEN 10 CHEQUES OF RS.1.00 LAKH EACH AND THE ASSESSEE HAS ALSO ENCASHE D ONE CHEQUE THROUGH HER BANK ACCOUNT. THUS, IT IS PROVED THAT THE SAID CONSENT LETTER WAS ACTED UPON BY THE ASSESSEE AND HENCE ITS AUTHENTICITY STANDS ESTABLISHED. IN THE SAID CONSENT LETTER, THE SALE I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 8 CONSIDERATION WAS STATED AT RS.1,01,00,000/-. THOU GH THERE WAS ANOTHER CONSENT LETTER DATED 05.01.1998, IT IS STATED THAT THERE IS NO SIG NIFICANT VARIATION BETWEEN THE TWO LETTERS EXCEPT THE DETAILS RELATING TO THE ADVANCE PAYMENTS. 10. THOUGH THE DOCUMENTS WERE REGISTERED FOR AN APPARENT CONSIDERATION OF RS.32.00 LAKHS, THE BANK ACCOUNTS OF THE ASSESSEE PROVED THA T SHE HAS ACTUALLY RECEIVED A SUM OF RS.60.00 LAKHS. THIS FACT PROVES THAT THE ASSESSEE HAS SUPPRESSED THE ACTUAL SALE CONSIDERATION IN THE REGISTERED DOCUMENTS. NOW THE QUESTION THAT ARISES IS ABOUT THE QUANTUM OF SUPPRESSION. THE BANK ACCOUNTS COULD REV EAL ONLY THE AMOUNTS RECEIVED BY WAY OF CHEQUES. NORMALLY, NO EVIDENCE IS KEPT WITH REGARD TO THE AMOUNT RECEIVED BY WAY OF CASH. THE AO HAS VERIFIED THE BANK ACCOUNT OF THE PURCHASER AND NOTICED THAT HE HAS WITHDRAWN A SUM OF RS.50.50 LAKHS AFTER THE REGISTRATION OF THE FIRST DEED ON 05.01.1998. THE SAID WITHDRAWAL IS EQUIVALENT TO T HE SALE PRICE OF REMAINING 8 CENTS OF LAND, WHICH WAS REGISTERED ON 07.05.1999. THUS, IT IS SEEN THAT THE AMOUNT OF SALE CONSIDERATION MENTIONED IN THE CONSENT LETTERS STAN D CORROBORATED WITH THE BANK ACCOUNTS OF THE ASSESSEE AS WELL AS THE WITHDRAWALS MADE FROM THE BANK ACCOUNT OF THE BUYER OF THE PROPERTY. AS OBSERVED BY THE AO, THE ASSESSEE HAD SHOWN THE SALE CONSIDERATIONS AS RS.16.00 LAKHS IN RESPECT OF THE FIRST DEED AND RS.44.00 LAKHS IN RESPECT OF THE SECOND DEED. THE PARTIES, ON AGREEI NG TO CONVEY THE PROPERTY IN TWO PARTS, COULD NOT HAVE SETTLED FOR DIFFERENT CONSIDE RATIONS FOR TWO PARTS OF THE SAME PROPERTY, WHICH WAS DIVIDED EQUALLY. 11 IT IS A WELL SETTLED PROPOSITION OF LAW THAT T HE STRICT RULE OF EVIDENCE SHALL NOT APPLY TO THE INCOME TAX PROCEEDINGS AND THE ISSUES CAN BE DECIDED ON THE BASIS OF PREPONDERANCE OF PROBABILITIES. THE SEQUENCE OF EV ENTS NARRATED BY THE ASSESSING OFFICER SHOW THAT THE CONSENT LETTERS CANNOT BE CON SIDERED AS DUMB DOCUMENTS. THE AO HAS CORROBORATED THEM WITH THE BANK ACCOUNTS OF THE ASSESSEE AS WELL AS THE BUYER. FURTHER THE DOCUMENT WRITER WHO DRAFTED THE CONSENT LETTER AND ALSO THE WITNESS TO THE LETTERS HAVE CONFIRMED THEM. THE ASSESSEE HAS ALSO ACTED UPON THE CONSENT LETTER BY ENCASHING A CHEQUE OF RS.1.00 LAKH THAT WAS MENTION ED THEREIN. HENCE, IN OUR VIEW, THE ASSESSING OFFICER WAS JUSTIFIED IN PLACING RELI ANCE ON THE CONSENT LETTERS AND I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 9 ACCORDINGLY HE WAS JUSTIFIED IN ADOPTING THE SALE C ONSIDERATION AS RS.1,01,00,000/-. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE ASSESSING OFFICER. 12. THE NEXT ISSUE RELATES TO THE DETERMINATION OF MARKET VALUE AS ON 1.4.1981. THE ASSESSEE HAD ESTIMATED THE MARKET VALUE AS ON 1.4.1 981 FOR VACANT LAND AT RS.25,000/- PER CENT AND AT RS.8,95,000/- FOR THE BUILDING. TH E AO, HOWEVER, DETERMINED THE VALUE OF LAND AT RS.5,000/- PER CENT AND THE VALUE OF BUI LDING AT RS.65,000/- PER CENT, ON THE BASIS OF DETAILS COLLECTED BY HIM FROM THE OFFICE O F THE SUB-REGISTRAR. BEFORE LD CIT(A), IT WAS CONTENDED THAT THE ASSESSEE HAS ADOPTED THE VALUE AS PER A VALUATION REPORT GIVEN BY A APPROVED VALUER. THE LD CIT(A) TOOK THE VIEW THAT THE AO SHOULD NOT HAVE REJECTED THE VALUATION GIVEN BY THE APPROVED VALUER . HOWEVER, A CAREFUL PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT THE ASSESSING OFFI CER DID NOT DISCUSS ANYTHING ABOUT THE VALUATION REPORT EXCEPT STATING THAT THE VALUAT ION REPORT WAS NOT AVAILABLE ON RECORD. ON THE CONTRARY, THE LD CIT(A) HAS PLACED FULL RELIANCE ON THE VALUATION REPORT. THE FACT REMAINS THAT THE AO DID NOT HAVE THE OPPOR TUNITY TO EXAMINE THE VALUATION REPORT AS ACCORDING TO HIM, THE SAME WAS NOT AVAILA BLE ON RECORD. IN OUR VIEW, THE LD CIT(A) WAS NOT JUSTIFIED IN PLACING ON THE VALUATIO N REPORT WHICH WAS NOT EXAMINED BY THE ASSESSING OFFICER AT ALL. BEFORE US ALSO, THE COPY OF THE VALUATION REPORT WAS NOT FILED BY EITHER OF THE PARTIES AND HENCE WE ARE UNA BLE TO EXAMINE THE BASIS/EVIDENCES/MATERIAL RELIED UPON BY THE APPROVE D VALUER TO DETERMINE THE VALUE AS ON 1.4.1981. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRE FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGL Y, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FI LE OF THE ASSESSING OFFICER WITH THE DIRECTION TO TAKE INTO CONSIDERATION THE VALUATION REPORT ALSO AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 13. NOW WE SHALL PROCEED TO ADJUDICATE THE APPEA L AND CROSS OBJECTION RELATING TO THE ASSESSMENT YEAR 2004-05. THE ONLY ISSUE URGED IN T HESE APPEALS RELATE TO THE AMOUNT OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE ON S ALE OF A FLAT LOCATED IN BANGALORE, WHICH WAS PURCHASED IN THE YEAR 1998-99. THE ASSES SEE DECLARED THE SALE VALUE OF THE I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 10 FLAT AT RS.9,10,000/-. FROM THE SEIZED MATERIALS, IT WAS NOTICED THAT THE ASSESSEE HAD RECEIVED A SUM OF RS.14.00 LAKHS ON SALE OF FLAT. IT WAS NOTICED THAT A SUM OF RS.9.50 LAKHS WAS FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE AND THE BALANCE AMOUNT OF RS.4.50 LAKHS WAS FOUND CREDITED IN THE BANK ACC OUNT OF HER HUSBAND SHRI A.V.KARUNAKARAN. IT WAS EXPLAINED THAT THE ASSESSE E RECEIVED A SUM OF RS.9.10 LAKHS TOWARDS THE SALE VALUE OF FLAT AND FURTHER SUM OF R S.0.40 LAKH FOR SALE OF CAR PARKING. HER HUSBAND RECEIVED RS.2.50 LAKHS TOWARDS THE SALE VALUE OF FURNITURE THAT WERE AVAILABLE IN THE FLAT AND FURTHER SUM OF RS.2.00 LA KHS TOWARDS THE COST INCURRED BY HIM ON REPAIRS. IN THIS REGARD, THE AO PLACED RELIANCE , INTER ALIA, ON THE STATEMENT GIVEN BY ONE SRI RAM KUMAR, SON OF THE PURCHASER OF THE PROP ERTY. HOWEVER, THE LD CIT(A) NOTICED THAT THE ABOVE SAID SRI RAM KUMAR HAD STATE D THAT HE HAD PAID A TOTAL AMOUNT OF RS.12.40 LAKHS, OUT OF WHICH A SUM OF RS.2.00 LA KHS WAS PAID TOWARDS REPAIRS. HENCE THE LD CIT(A) CONCLUDED THAT THE SALE CONSIDE RATION OF FLAT SHOULD BE TAKEN AS RS.10.40 LAKHS (RS.12.40 LAKHS LESS RS.2.00 LAKHS). AGGRIEVED, BOTH THE PARTIES ARE IN APPEAL BEFORE US. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. APPARENTLY, MUCH RELIANCE WAS PLACED ON THE LETTER GIVEN BY SHRI RAM KUMAR, SON OF THE PURCHASER OF THE FLAT. THE SAID LETTER CONFIRMS THE FACT THAT A SUM OF RS.2.00 LAKHS WAS PAID TOWARDS THE COST OF REPAIRS OF THE BUILDING OUT OF THE TOTAL SA LE CONSIDERATION OF RS.12.40 LAKHS. IT WAS CLAIMED THAT SHRI KARUNAKARAN ALSO RECEIVED A S UM OF RS.2.50 LAKHS TOWARDS THE VALUE OF FURNITURE. WE NOTICE THAT THE AO HAS REJE CTED THE SAID CLAIM WITHOUT CAUSING ANY ENQUIRY AND CONCLUDED THAT THE SAID AMOUNT WAS RECEIVED AS A PART OF SALE CONSIDERATION ONLY ON THE BASIS OF SURMISES. IN TH E ABSENCE OF ANY ADVERSE MATERIAL, IN OUR VIEW, THERE IS NO REASON TO REJECT THE EXPLANAT ION GIVEN BY THE ASSESSEE. WE HAVE ALREADY NOTICED THAT THE BUYER HAS CONFIRMED THE SA LE VALUE AS RS.10.40 LAKHS (RS.12.40 LAKHS LESS RS.2.00 LAKHS). HOWEVER, THE ASSESSEE H AS FAILED TO REBUT THE AVERSION MADE IN THE CONFIRMATION LETTER GIVEN BY THE BUYER. UND ER THESE CIRCUMSTANCES, IN OUR VIEW, THE LD CIT(A) WAS JUSTIFIED IN ADOPTING THE SALE VA LUE OF FLAT AT RS.10.40 LAKHS. I.T.A. NOS./ 690,691 & 692/COCH/2007 & C.O. NOS. 62,63 & 64/COCH/207 11 15. IN THE RESULT, THE APPEALS FILED BY THE REV ENUE FOR ASSESSMENT YEARS 1999-2000 AND 2000-01 ARE TREATED AS ALLOWED. THE CROSS OBJE CTIONS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 1999-2000 AND 2000-01 ARE TREATED AS ALLOWED. THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE REL ATING TO THE ASSESSMENT YEAR 2004- 05 ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 08-02-2 013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 8TH FEBRUARY 2013 GJ COPY TO: 1. DR. E. YESHODHA (LATE), BY L/HR. DR. A.V. SREEKUM AR, FRAGRANCE VELLUR, PAYYANNUR, KANNUR. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTR AL CIRCLE, CALICUT. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN