Habitat Royale Projects Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1539/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3550 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 17-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Income from undisclosed sources; Opportunity of being heard; Opportunity of cross examination; Tangible material; Third party statement; Accommodation entries; Block assessment
• Section: 50C; 133A; 260A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1539/DEL/2015 A.Y. : 2008-09 M/S HABITAT ROYALE PROJECTS P LTD., 2, GOLDEN GATE, WESTEND GREEN, RAJOKARI, NEW DELHI 110 038 (PAN: AABCH4891A) VS. ACIT, CENTRAL CIRCLE-22, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV. DEPARTMENT BY : SH. ARUN KUMAR YADAV, SR. DR ORDER PER H.S. SIDHU, JM ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER DATED 16.01.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-I, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2008-09 ON THE FOLLOW ING GROUNDS:- 1.THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING A PENALTY O F RS. 4,53,000/- U/S. 271(1)(C) OF THE I.T. ACT. 2. THAT LD. CIT(A) HAS CONFIRMED THE PENALTY WITHOU T AFFORDING A PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 2 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DEMAND , SUPPLEMENT OR RAISE FRESH GROUND OF APPEAL, IF CONSIDERED EXPE DIENT AND ADVISABLE AT THE TIME OF HEARING OF APPEAL. IT IS PRAYED THAT THE APPELLANT APPEAL BE ALLOWED . 2. THE FACTS IN BRIEF ARE THAT DURING THE COURSE OF SEARCH U/S. 132 OF THE INCOME TAX ACT, 1961, IT WAS FOUND THAT THE ASS ESSEE SOLD A PROPERTY AT GURGAON FOR A DECLARED VALUE OF RS. 60,00,000/- ON WHICH IT HAS RECEIVED CASH OF RS. 97,00,000/- ON VARIOUS DATES. OUT OF CASH OF RS. 97,000/-, RS. 15,00,000/- WERE RECEIVED DURING THE YEAR UNDER CONSIDERATION. THE AO MADE ADDITION OF RS. 15,00,00 0/- WHICH WAS CONFIRMED BY THE LD. CIT(A) VIDE HIS ORDER DATED 29 .11.2012. THEREFORE, THE AO LEVIED THE PENALTY OF RS. 4,53,000/- U/S. 27 1(1)(C) OF THE ACT. 3. AGGRIEVED WITH THE PENALTY ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 16.1.2015 DISMISSED THE APPEAL OF THE ASSESSEE. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE, SH. KAPIL GOEL, ADV. STATED THAT THE QUANTUM ADDITION ON WHICH THE PENALTY HAS BEEN IMPOSED, HAS ALREADY BEEN DELETED BY THE ITAT IN IT A NO. 377/DEL/2012 (AY 2008-09) VIDE ORDER DATED 29.11.2016. IN THIS BEHALF HE FILED THE COPY OF THE TRIBUNALS ORDER DATED 29.11.2016 IN A SSESSEES OWN CASE AND HE REQUESTED THAT PENALTY IN DISPUTE MAY BE DEL ETED. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 3 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT IN ASSESSEES OWN CASE IN IT A NOS. 377 & 378/DEL/2012 (AYRS 2008-09 & 2009-10) VIDE ORDER DA TED 29.11.2016, THE TRIBUNAL HAD ADJUDICATED THE ISSUES VIDE PARA N O. 8 TO 10 AT PAGES 5 TO 21 AND DELETED THE QUANTUM ADDITIONS IN THIS RE GARD. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING THE RELEVANT PORTIO N OF THE TRIBUNAL ORDER DATED 29.11.2016 AS UNDER:- 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE CASE LAWS CITED BY THE LD. COUNSEL OF THE ASSESSEE. WE FIND THAT ASSESSEE HAS SOLD PROPERTY NO. ES95, BLOCK R & T NIRVANA COUNTRY, SOUTH CITY -II, GURGAON DURING FY 2008- 09 FOR RS. 60 LACS. IT HAS NOT MADE ANY SALES DURIN G THE FY 2007-08 AND THAT ALL THE PAYMENT AGAINST SALE OF THIS PROPERTY HAS BEEN RECEIVED THROUGH CHEQUES AND THAT NO OTHER AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE IN CASH AGAINST THE SALES CONSIDERATION OF THIS PROPERTY. THE DETAILS MENTIONED ON THE RIGHT SIDE OF PAGE 4 OF ANNEXURE A-I OF PARTY G- 3 ARE SEEM TO BE SOME ROUGH WORKING AND IT IS NOT CLEAR FROM THE DETAILS WHETHE R THESE ARE FOR PURCHASE /SALE/INVESTMENT IN THE 4 PROPERTY ES -95. IT ALSO SEEMS THAT THESE ARE SOME WRONGLY MENTIONED FIGURES NOTED BY SOMEBODY. IN THE DETAILS BELOW 'CHQ', FIGURE OF 15,700,000.00 IS MENTIONED. AS PER RECORD, THERE IS NO REFERENCE OF ANY CASH PAYMENT ON THESE DETAILS AND ALSO THERE IS NO REFERENCE OF ANY PAYMENT RECEIVED OR PAID IN CASH ON THESE DETAILS. THEREFORE, THE ALLEGATION MADE BY AO THAT A CASH PAYMENT OF RS 97 LACS HAS BEEN MADE RECEIVED AGAINST THIS PROPERTY & OUT OF WHICH RS 15 LACS HAS BEEN PAID REED DURING THE FINANCIAL YEAR 2007-08 IS BASED ON MERE CONJECTURE & SURMISES. THAT THE CHART DOES NOT REVEAL ANY SUCH TRANSACTION DATES/AMOUNT PERTAINING TO ANY YEAR. THIS IS SIMPLY A DUMB DOCUMENT. THERE IS NO OTHER MATERIAL ON RECORD OTHER THAN THIS LOOSE PAPER TO CORROBORATE THE STAND OF THE DEPARTMENT. WE FIND THAT SINCE ASSESSEE HAS NOT RECEIVED PAID ANY AMOUNT IN CASH AGAINST THE SALE OF THE ABOVE PROPERTY, NO UNEXPLAINED AND UNACCOUNTED INCOME FROM UNACCOUNTED SOURCES CAN BE ATTACHED TO THE ASSESSEE WITH RESPECT TO ABOVE TRANSACTION. THEREFORE, THE PRESUMPTION U/S. 292C OF THE ACT IS A REBUTTAL PRESUMPTION. THE PRESUMPTION AS 5 ENVISAGED IN SECTION 292C IS LIMITED TO THE CORRECTNESS OF THE DOCUMENTS FOUND AT THE TIME OF SEARCH OR SURVEY, BUT THAT PRESUMPTION HAS NOT BEEN EXTENDED BY THE STATUTE TO BE PRESUMED TO BE THE INCOME OF THE ASSESSEE. IN VIEW OF THE AFORESAID DISCUSSIONS, WE FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL SUBMISSIONS THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE FOLLOWING DECISIONS:- 8.1 IN THE CASE OF VATIKA LANDBASE PVT. LTD. 383 IT 320 (ITA NO. 670/2014 DATED 26.2.2016)- DELHI HIGH COURT HAS ADJUDICATED AS UNDER:- IN THE PRESENT APPEAL, THE REVENUE URGED THE FOLLOW ING QUESTIONS: '1. WHETHER ON THE FACTS A D CIRCUMSTANCES OF THE C ASE, THE INCOME TAX APPELLATE TRIBUNAL WAS CORRECT IN LAW IN DELETING THE ADDITION OF RS. 25,40,36,454 OUT OF THE TOTAL A DDITION OF RS. 31,01,09,834 MADE BY THE AO ON ACCOUNT OF UNDISCLOS ED RECEIPT (FROM SALE OF SPACE FLATS IN VATIKA TRIANGLE? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE INCOME TAX APPELLATE TRIBUNAL WAS CORRECT IN LAW IN DELETING OF RS. 11.49,55,096 (I.E. RS. 11,34,05,096 PLUS RS. 15 .50,000) OUT OF THE TOTAL ADDITION OF RS. 13,84,20.000 MADE BY THE AD ON ACCOUNT 6 OF UNDISCLOSED INCOME NOT DECLARED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT? 3. WHETHER ON THE (ACTS AND CIRCUMSTANCES OF THE CA SE, THE INCOME TAX APPELLATE TRIBUNAL WAS CORRECT IN LAW IN DELETING THE ADDITION OF RS. 1,04,39,000 MADE BY THE AO ON ACCOU NT OF ACCOMMODATION ENTRIES TAKEN BY THE ASSESSEE? 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE ITAT IS NOT PERVERSE AS IT HAS FAILED TO CONSIDER THAT IN THIS CASE, THE AO MADE THE ADDITION ON THE BASIS OF THE RELEVANT SEARCHED MATERIAL GATHERED FROM THE ASSESSEE DURING THE COURSE OF THE SEARCH PROCEEDINGS?' 29. HOWEVER, BY AN ORDER DATED 20 TH MAY 2015 THE ONLY QUESTION THAT WAS FRAMED FOR CONSIDERATION BY THE ITAT WAS A S UNDER: 'DID THE ITAT FALL INTO ERROR IN HOLDING THAT THE A DDITION OF RS. 5,60,73,380 WAS UNSUSTAINABLE IN LAW IN THE CIRCUMS TANCES 0 THE CASE?' 30. CONSEQUENTLY, AS THE PRESENT APPEAL BY THE REV ENUE WAS CONCERNED, ITS SCOPE IS CONFINED TO THE QUESTION FR AMED VIZ., THE SUSTAIN ABILITY OF THE DELETION BY THE ITAT OF THE ADDITIONS MADE BY THE AO AS SUSTAINED BY THE CIT(A) OF RS. 5,60,73 ,380/- PERTAINING TO THE SALE OF FLATS ON THE SECOND AND T HIRD FLOOR OF VT. 40. TURNING TO THE CASE ON HAND, THE DOCUMENT RECOV ERED FROM THE FILE IN THE COMPUTER OF MR. AWASTHI, FORMS THE BASIS OF THE 7 ADDITION MADE BY THE AO, WHICH WAS FURTHER REDUCED BY THE CIT (A). THIS WAS IN THE FORM OF A COMPUTER PRINT OUT O F THREE SHEETS WHICH WERE UNSIGNED AND UNDATED. THE FIRST SHEET WA S TITLED 'CASH- IN-FLOW DETAIL FOR THE REVENUE', THE NEXT WA S TITLED 'REVENUE DETAILS' AND THE THIRD WAS TITLED 'VATIKA TRIANGLE, GUARGAON.' THE NOTES TO THE DOCUMENTS ARE INDICATIVE OF THEIR BEIN G PROJECTIONS. NOTING (I) STATES THAT 'IT IS PRESUMED THAT THE BUI LDING WILL BE COMPLETED AND FULLY LET OUT IN THE MONTH OF NOVEMBE R 2002.' ANOTHER NOTE STATES 'FURTHER, THE SALE OF THE BUILD ING WILL TOOK PLACE OVER A PERIOD OF NINE MONTHS.' ADMITTEDLY, AS ON THE DATE OF THE SEARCH THE CONSTRUCTION WAS STILL IN PROGRESS. FLATS UP TO THE FOURTH FLOOR HAD BEEN SOLD. THE VIEW TAKEN BY THE I TAT THAT MERE FACT THAT THE PRINT OUT STATES THAT THE FLATS ON SE COND AND THIRD FLOOR HAVE BEEN SOLD, DOES NOT NECESSARILY MEAN THA T THEY WERE SOLD AT THE RATES INDICATED THEREIN IS DEFINITELY A PLAUSIBLE VIEW TO TAKE. 41. CONSIDERING THAT THE DOCUMENT WAS RECOVERED FRO M THE COMPUTER OF MR. SUNIL AWASTHI, HE OUGHT TO HAVE BEE N SUMMONED TO EXPLAIN THE RATES OF SALE SHOWN THEREIN FOR THE FLATS ON DIFFERENT FLOORS. IN FACT, THE ASSESSEE DID MAKE A REQUEST FO R HIS CROSS- EXAMINATION. THE OTHER POSSIBILITY WAS TO EXAMINE T HE PURCHASERS OF THE FLATS AS THEY WOULD HAVE CONFIRMED THE PRICE PAID BY THEM 8 AND HOW MUCH OF IT WAS IN CHEQUE AND WHAT EXTENT IN CASH. HOWEVER, THAT TOO WAS NOT DONE. .. 43. THE REVENUE HAS NOT BEEN ABLE TO COUNTER THE SU BMISSION OF THE ASSESSEE THAT THERE ARE ANOMALIES IN THE FIGURE S MENTIONED IN SHEET NOS. 3 AND 4 OF THE SAID DOCUMENT. 45. AS POINTED OUT IN COMMISSIONER O{INCOME TAX V. S.M AGGARWAL (SUPRA) THE SAID DOCUMENT CAN AT BEST BE T ERMED AS A 'DUMB' DOCUMENT WHICH IN THE ABSENCE O{INDEPENDENT CORROBORATION COULD NOT POSSIBLY HAVE BEEN RELIED U PON AS A SUBSTANTIVE PIECE OF EVIDENCE TO DETERMINE THE ACTU AL RATES AT WHICH THE FLATS WERE SOLD. FURTHER AS POINTED OUT I N COMMISSIONER OF INCOME TAX V. D.K. GUPTA (SUPRA) ME RELY BECAUSE THERE ARE NOTINGS OF FIGURES ON SLIPS OF PA PER, IT DID NOT MEAN THAT THOSE TRANSACTIONS ACTUALLY TOOK PLACE. L IKEWISE IN COMMISSIONER OF INCOME GIRISH CHAUDHARY (SUPRA), TH E COURT TERMED A LOOSE SHEET CONTAINING SOME NOTINGS OF FIG URES AS A 'DUMB DOCUMENT' SINCE THERE WAS NO MATERIAL TO SHOW AS TO ON WHAT BASIS THE AO HAD REACHED A CONCLUSION THAT THE FIGURE '48' OCCURRING IN ONE OF THEM WAS TO BE READ AS RS. 48 LAKHS. 46. IN THE PRESENT CASE, THERE WAS AGAIN NO MATERIA L ON THE BASIS OF WHICH THE AO COULD HAVE APPLIED A STANDARD RATE OF RS 4,800 9 PER SQ FT FOR ALL THE FLOORS OF VT. IT WAS ALSO NOT OPEN TO THE AO TO DRAW AN INFERENCE ON THE BASIS OF THE PROJECTION IN THE DOCUMENT, PARTICULARLY WHEN THE ASSESSEE OFFERED A PLAUSIBLE EXPLANATION FOR THE DOCUMENT. THE BURDEN SHIFTED TO THE REVENUE TO SHOW, ON THE BASIS OF SOME RELIABLE AND TANGIBLE MATERIAL, H OW RATE AT WHICH THE FLATS ON THE SECOND AND THIRD FLOORS OF V T WAS HIGHER THAN THAT DICTATED IN THE SALES REGISTER OR THE SAL E DEEDS THEMSELVES. 47. IN THE CIRCUMSTANCES, THE COURT IS OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT THE ADDITION OF RS. 5,60,73,380 MADE BY THE CIT (A) WAS NOT SUSTAINABLE IN LAW. 48. FOR THE AFOREMENTIONED REASONS, THE QUESTION FR AMED BY THE COURT IS ANSWERED IN THE NEGATIVE, I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8.2 IN THE CASE OF M/S DELCO INDIA PVT. LTD. (ITA NO. 116/2016) DATED 10.2.2016 DELHI HIGH COURT HAS HE LD AS UNDER:- SECTION 292C OF THE ACT, INTER ALIA, PROVIDES THAT WHERE ANY BOOKS OF ACCOUNTS OR OTHER DOCUMENTS ARE FOUND IN POSSESS ION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH UNDE R SECTION 132 OR SURVEY UNDER SECTION 133A OF THE ACT, IT MAY BE PRESUMED THAT SUCH BOOKS OR DOCUMENTS BELONG TO SUCH PERSON. UNDI SPUTEDLY, SUCH PRESUMPTION IS REBUTTABLE. IT IS NOT DISPUTED THAT THE 10 ASSESSEE HAD CLEARLY DENIED HAVING ANY DEALING WITH M/S SMRIDHI SPONGE LIMITED AND HAD ALSO FILED AN AFFIDAVIT TO T HAT EFFECT. THE ITAT FOUND, AS A MATTER OF FACT, THAT THE ASSESSEE ON ITS PART HAD MADE THE NECESSARY ENQUIRIES AND ALSO PROVIDED FINA L ACCOUNTS OF M/S SMRIDHI SPONGE LIMITED; CONFIRMATION FROM THE D IRECTOR OF M/S SMRIDHI SPONGE LIMITED; DETAILS OF THE BANK ACC OUNTS; FINAL ACCOUNTS; DIRECTOR' S REPORT; PAN NUMBER ETC. WHICH SUFFICIENTLY DISCHARGED THE BURDEN CAST ON THE ASSE SSEE. THE ITAT ALSO FOUND THAT THE ASSESSEE HAD PROVIDED THE NECES SARY INFORMATION FOR THE AO TO MAKE THE REQUISITE ENQUIR IES FROM M/S SMRIDHI LIMITED AS WELL AS M/S GALAX EX ORTS PVT. L TD. IN OUR VIEW NO INTERFERENCE WITH THE ORDER OF THE ITAT IS CALLED FOR UNDER SECTION 260A OF THE ACT SINCE THE FINDINGS OF THE ITAT ARE ESSENTIALLY FACTUAL. FURTHER, WE FIND NO INFIRMITY WITH THE FINDINGS RETURNED BY THE ITAT AND IN ANY EVENT THE SAME CANN OT BE HELD TO BE PERVERSE BY ANY STRETCH. 8.3 IN THE CASE OF P. KOTESHWARA RAO ORDER DATED 12 .8.2016 OF THE ITAT, VISAKHAPATNAM (ITA NO. 251 & 252VIZAG/ 2012 (AYRS. 2007-08 & 2008-09), THE ITAT HAS OBSERVED AS UNDER:- 11. THE ONLY ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE SEIZE D DOCUMENTS INDICATE EXCHANGE OF ON MONEY BETWEEN THE PARTIES. ADMITTEDLY, IN THE ASSESSEE'S CASE THERE WAS NO SEARCH. THE SEI ZED DOCUMENT FOUND DURING THE COURSE OF SEARCH IN THE PREMISES O F M/S. M.V.V. 11 BUILDERS, IS A LOOSE SHEET WHEREIN CERTAIN FINANCIA L TRANSACTIONS WERE RECORDED IN THE NAME OF THE ASSESSEE. THOUGH, SRI M.V.V. SATYANARAYANA STATED THAT HE HAD PAID A SUM OFRS.50 LAKHS AND RS.25 LAKHS IN THE FINANCIAL YEAR RELEVANT TO ASSES SMENT YEAR 2007-08 & 2008-09, TO SRI P. KOTESWARA RAO TOWARDS LAND DISPUTE SETTLEMENT, NOWHERE IT IS STATED THAT HE HA D PAID ON MONEY TO THE ASSESSEE TOWARDS PURCHASE OF SITE. THE ASSES SEE RIGHT FROM THE BEGINNING STATED THAT HE HAD NOT RECEIVED ANY O N MONEY FROM M/S. M.V.V. BUILDERS TOWARDS SALE OF SITE. BESIDES, LOOSE SHEETS FOUND IN THE PREMISES OF M/S. M.V.V. BUILDERS, THE A.O. DOES NOT HAVE ANY OTHER DOCUMENT TO SHOW THAT THE ASSESSEE H AS RECEIVED ON MONEY FROM THE PURCHASER. THE A.O. HAS NOT MADE OUT ANY ATTEMPT TO FIND OUT SOME RELIABLE COGENT MATERIAL E VIDENCE ON RECORD TO SUPPORT HIS FINDINGS OR TO CORROBORATE T HE STATEMENT OF THE PURCHASER. THE ASSESSEE DENIED HAVING RECEIVED ANY ON MONEY OVER AND ABOVE WHAT WAS STATED IN THE SALE DE ED. THE ASSESSEE RIGHTLY CLAIMED THAT THE SALE TRANSACTION HAS BEEN COMPLETED ON 7.6.2006. THE SALE TRANSACTION HAS BEE N COMPLETED BY WAY OF REGISTERED SALE AGREEMENT-CUM-GPA. THE AS SESSEE HAS RECEIVED FULL CONSIDERATION AS ON THE DATE OF REGIS TRATION OF DOCUMENT AND HANDED OVER THE POSSESSION OF THE PROP ERTY TO THE BUYERS. THE ALLEGATION OF THE A.O. IS THAT THE PURC HASER HAS PAID ON MONEY TO THE ASSESSEE IN THE FINANCIAL YEARS REL EVANT TO 12 ASSESSMENT YEAR 2007-08 AND 2008-09 WHICH IS ALMOST ONE YEAR AFTER SALE IS COMPLETED. WE FURTHER NOTICED THAT TO TAL CONSIDERATION HAS BEEN PAID THROUGH PROPER BANKING CHANNEL. IT WAS NOT A CASE OF A.O. THAT THE VALUE SHOWN IN THE SALE DEED IS NOT REAL VALUE OF THE PROPERTY, BECAUSE THE VALUE DECLA RED IN THE SALE DEED IS THE MARKET VALUE OF THE PROPERTY, FIXED BY THE STATE GOVERNMENT AUTHORITIES FOR DETERMINING STAMP DUTY P URPOSE. FURTHER, THERE IS NO EVIDENCE WITH THE A.O. TO SHOW THAT THERE IS A UNDER VALUATION OF PROPERTY AND PROVISIONS OF SECTI ON SOC OF THE ACT IS INVOKED WHILE COMPLETING THE ASSESSMENT. THE A.O. MERELY ACTED UPON THE STATEMENT GIVEN BY THE THIRD PARTY W HICH WAS TOTALLY DENIED BY THE ASSESSEE. IT IS A SETTLED POS ITION OF LAW THAT UNLESS STATEMENT IS TESTED UNDER CROSS EXAMINATION, THE SAME CANNOT BE CONSIDERED AS EVIDENCE AGAINST THE ASSESS EE. THE A.O. USED THE ADMISSION OF PARTNERS OF PURCHASER FIRM MA DE U/S 13 (4) OF THE ACT IN THEIR CASE AGAINST THE ASSESSEE, BUT FAILED TO NOTE THAT ADMISSION OF OTHER PARTIES CANNOT BE CONSIDERE D AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE, UNLESS TH ERE IS A CORROBORATIVE EVIDENCE ON RECORD, BECAUSE THE MAKER OF STATEMENT CAN BIND HIMSELF, BUT HOW HE BIND OTHERS FROM HIS STATEMENT WITHOUT THERE BEING ANY FURTHER EVIDENCE ON RECORD. 12. IN THE PRESENT CASE ON HAND. EXCEPT LOOSE SHEET FOUND IN THE PREMISES OF M/S. M V V BUILDERS AND ADMISSION MADE BY THE THIRD 13 PARTY IN THEIR ASSESSMENT PROCEEDINGS. THERE IS NO OTHER EVIDENCE ON RECORD TO PROVE THAT ON MONEY IS PAID TO THE ASS ESSEE TOWARDS PURCHASE OF SITE. WE FURTHER NOTICED THAT SRI M V V SATYANARAYANA. WHILE DEPOSING BEFORE THE INVESTIGAT ING OFFICER HAS STATED THAT HE HAS PAID MONEY TO SRI P. KOTESWA RA RAO TOWARDS SETTLEMENT OF LAND DISPUTES. BUT NOWHERE ST ATED THAT HE HAD PAID ON MONEY TO THE ASSESSEE TOWARDS PURCHASE OF VENKOJIPALEM SITE. THE AO WITHOUT BRINGING ON RECO RD AN EVIDENCE TO PROVE THAT ON MONEY IS EXCHANGED BETWEE N THE PARTIES. 13 .. MERELY HARPING UPON LOOSE SHEET AND THIRD PARTY STA TEMENT, WHICH CANNOT BE CONSIDERED AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE TO BRING ON MONEY TO TAX AS UNDISCLOSED INCOME. TH E A.O. IS REQUIRED TO BRING FURTHER EVIDENCE ON RECORD TO SHO W THAT ACTUAL MONEY IS EXCHANGED BETWEEN THE PARTIES, BUT LITERAL LY FAILED TO DO SO. THE AO DID NOT CONDUCT ANY INDEPENDENT ENQUIRY RELATING TO VALUE OF THE PROPERTY, INSTEAD MERELY RELIED UPON S TATEMENT GIVEN BY THE PURCHASE OF THE PROPERTY WHICH IS NOT COVERE D. FURTHER, THERE IS NO EVIDENCE WITH THE A.O. THAT MONEY HAS B EEN EXCHANGED BETWEEN PURCHASER AND SELLER. THEREFORE, WE ARE OF THE VIEW THAT THE A. 0. IS NOT CORRECT IN MAKING AD DITIONS TOWARDS ON MONEY WITHOUT THERE BEING ANY EVIDENCE TO SHOW T HAT THE 14 ASSESSEE HAS RECEIVED ANV MONEY OVER AND ABOVE WHAT WAS STATED IN THE SALE DEED. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO APPLYING THE RATIOS OF THE JUDGEMENTS CITED ABOVE, WE ARE OF THE VIEW THAT THE A.O. IS NOT CORRECT IN COMING TO THE CONCLUSION THAT ON MONEY EXCHANGED BETWEEN THE PARTIES BASED ON A L OOSE SHEET FOUND IN THE PREMISES OF A THIRD PARTY AND ALSO STA TEMENT GIVEN BY A THIRD PERSON. TO SUSTAIN THE ADDITION, THE A.O. S HOULD HAVE TAKEN AN INDEPENDENT ENQUIRY ABOUT THE VALUE OF THE PROPERTY AND ASCERTAIN WHETHER ANY UNDER VALUATION IS DONE, IF S O WHAT IS THE CORRECT VALUE OF THE PROPERTY. FURTHER, THE A.O. FA ILED TO BRING ANY EVIDENCE TO SUPPORT HIS FINDINGS THAT THERE IS ON-MONEY PAYMENT OVER AND ABOVE WHAT IS STATED IN THE SALE D EED. IN THE ABSENCE OF PROPER ENQUIRY AND SUFFICIENT EVIDENCES, WE FIND NO REASONS TO CONFIRM THE ADDITIONS MADE BY THE A.O. T HE CIT(A) WITHOUT APPRECIATING FACTS, SIMPLY UPHELD ADDITIONS MADE BY THE A.O. HENCE, WE SET ASIDE THE ORDER PASSED BY THE CI T(A) AND DIRECT THE A.O. TO DELETE THE ADDITIONS MADE TOWARD S ALLEGED ON MONEY FOR THE ASSESSMENT YEARS 2007-08 & 2008-09. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NOS. 251 &252IVIZAG/2012 ARE ALLOWED. 8.4 IN THE CASE OF K.V LAKSHMI SAVITRI DEVI VS. ACI T (2012) 148 TTJ 157, ITAT HYDERABAD BENCHES HAS HELD AS UND ER:- 15 'ADMITTEDLY THERE WAS NO SEARCH ACTION IN THE CASE OF THE ASSESSEE. IT IS A LOOSE SLIP CONTAINING CERTAIN ENT RIES RECORDING THE PAYMENT WHICH WAS FOUND AT THE PREMISES OF CRK. IT DOES NOT CONTAIN EITHER DATE OF PAYMENT OR NAME OF THE PERSO N WHO HAS MADE THE PAYMENT. ACCORDING TO THE DEPARTMENT, CRK DENOTES C RADHA KRISHNA KUMAR AND KRK DENOTES K. RAJANI KUMAR I. HOWEVER, NO NAME OF THE ASSESSEE WAS FOUND IN THE L OUSE SHEET. THE PROPERTY WAS PURCHASED FROM P W/C CRK FOR A DIS CLOSED CONSIDERATION OF PS. 65 LAKHS BV THE ASSESSEE. THE PROPERTY HAS BEEN REGISTERED AND THE SALE DEED WAS EXECUTED FOR A CONSIDERATION OF PS. 651AKHS ON 21ST AUG., 2006 WHI CH CONSIDERATION HAS BEEN ACCEPTED BY THE STATE REGIST RATION AUTHORITIES. FURTHER NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THERE WAS ANY INVOKING OF S. 50C WHILE COMPLETING T HE ASSESSMENT IN THE CASE OF THE SELLER. THERE IS NO EVIDENCE OTH ER THAN THE SEIZED MATERIAL MARKED AS 'A/CRK104' WHERE RELEVANT ENTRIES ARE MADE AT RS. 1,65,00,000. THE SEIZED MATERIAL WAS NO T FOUND AT THE PREMISES OF THE ASSESSEE AND THERE IS NO CORROBORA TIVE MATERIAL TO SUGGEST THAT THE ASSESSEE HAS ACTUALLY PAID RS. 1.65 CRORES TOWARDS PURCHASE CONSIDERATION OF THE PROPERTY, THE ASSESSEE AND HER BROTHER CATEGORICALLY DENIED THE PAYMENT O F ANY MONEY OVER AND ABOVE RS. 65 LAKHS. THE AO PLACED RELIANC E ON THE STATEMENT OF 5, WHO IS A THIRD PARTY, THE EVIDENCE BROUGHT ON 16 RECORD BY THE DEPARTMENT IS NOT ENOUGH TO FASTEN AD DITIONAL TAX LIABILITY ON THE ASSESSEE. AS SEEN FROM THE ABOVE D OCUMENT THIS IS JUST A HANDWRITTEN LOOSE DOCUMENT AND THE HANDWRITI NG IS ALSO NOT OF THE ASSESSEE AND THE LOOSE DOCUMENT WAS FOU ND AT THE PREMISES OF A THIRD PARTY. THE BURDEN ON THE DEPART MENT TO PROVE CONCLUSIVELY THAT THE LOOSE DOCUMENT BELONGS TO THE ASSESSEE. THERE IS NO PRESUMPTION IN LAW THAT THE ASSESSEE HA S ACTUALLY PAID RS. 1651AKHS TOWARDS PURCHASE OF THE PROPERTY. THE UNDISCLOSED INCOME IN THIS CASE IS TO BE COMPUTED B Y THE AO ON THE BASIS OF THE AVAILABLE MATERIAL ON RECORD. IT S HOULD NOT BE BASED ON CONJECTURES AND SURMISES. AS OF NOW, THE M ATERIAL CONSIDERED BY THE AO FOR MAKING THE ADDITION OF RS. 1 CRORE IS SEIZED MATERIAL MARKED A 'A/CRK104' AND THE STATEME NT OF 5. THIS LOOSE SHEET FOUND AT THE PREMISES OF CRK IS NO T ENOUGH MATERIAL TO SUSTAIN THIS ADDITION. THE SEIZED MATER IAL FOUND DURING THE COURSE OF SEARCH AND THE STATEMENT RECOR DED ARE SOME PIECE OF EVIDENCE TO MAKE THE ADDITION. THE AD HAS TO ESTABLISH THE LINK BETWEEN THE SEIZED MATERIAL AND OTHER BOOK S OF ACCOUNT TO THE ASSESSEE. THE SEIZED MATERIAL AND STATEMENT OF CRK CANNOT BE CONCLUSIVE EVIDENCE TO MAKE THIS ADDITION. THE E NTIRE CASE HEREIN IS DEPENDING UPON THE RULE OF EVIDENCE. THER E IS NO CONCLUSIVE PRESUMPTION TO SAY THAT ACTUAL CONSIDERA TION PASSED ON BETWEEN THE PARTIES IS ACTUALLY RS. 165LAKHS. TH E ASSESSEE AS 17 WELL AS HER BROTHER STATED IN THEIR RESPECTIVE STAT EMENTS THAT THE CONSIDERATION PASSED BETWEEN THE PARTIES IS ONLY RS . 65LAKHS. IN SPITE OF THIS THE AO PROCEEDED TO CONCLUDE THAT THE SEIZED MATERIAL IS CONCLUSIVELY REFLECTING THE PAYMENT OF CONSIDERATION AT RS. 165LAKHS. THE DEPARTMENT HEREIN IS REQUIRED TO ESTABLISH THE NEXUS OF THE SEIZED MATERIAL TO THE ASSESSEE. A S STATED EARLIER THERE IS NO DATE AND NAME OF THE ASSESSEE. THE ALLE GATION OF THE DEPARTMENT IS THAT THE SEIZED MATERIAL DENOTES THE PAYMENT MADE BY THE ASSESSEE TO THE PURCHASER FOR PURCHASE OF TH E PROPERTY. HOWEVER, NO SUCH NARRATION OR NAME OF THE ASSESSEE WAS FOUND IN THE SEIZED MATERIAL. THE DEPARTMENT IS NOT ABLE TO UNEARTH ANY DOCUMENT OR MATERIAL OR ANY CORROBORATIVE MATERIAL TO SHOW THAT THE ASSESSEE HEREIN ACTUALLY PAID PS. 1651AKHS FOR PURCHASE OF THE PROPERTY. THE DEPARTMENT HAS NOT BROUGHT ON REC ORD THE DATE ON WHICH THE PAYMENT WAS MADE AND THE SOURCE FROM W HICH II IS PAID AND/OR ANY DETAILS OF BANK ACCOUNT FROM WHERE THE CASH WAS WITHDRAWN. WITHOUT ANY OF THESE DETAILS, THE DEPART MENT HAS TAKEN A VIEW THAT THE ASSESSEE HAS PAID PS. 1651AKH S FOR PURCHASE OF THE PROPERTY. THE DEPARTMENT CANNOT DRA W INFERENCE ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISES . SUSPICION, HOWEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SUP PORT OF THE FINDING FROM THE AO. THE AO SHOULD ACT IN A JUDICIA L MANNER, PROCEED WITH JUDICIAL SPIRIT AND COME TO A JUDICIAL CONCLUSION. 18 THE AO IS REQUIRED TO ACT FAIRLY AS A REASONABLE PE RSON AND NOT ARBITRARILY AND CAPRICIOUSLY. THE ASSESSMENT MADE S HOULD HAVE ENOUGH MATERIAL AND IT SHOULD STAND ON ITS OWN LEGS . THE BASIS FOR ADDITION CANNOT BE ONLY THE LOOSE SHEET OR A THIRD PARTY STATEMENT IN THE ABSENCE OF THE CORROBORATIVE MATERIAL AND/OR CIRCUMSTANTIAL EVIDENCE, THE ADDITION CANNOT BE SUS TAINED THUS, NO ADDITION CAN BE MADE ON A DUMB DOCUMENT AND NOTI NG ON LOOSE SHEET. IT SHOULD BE SUPPORTED BY THE EVIDENCE ON RECORD AND THE EVIDENCE ON RECORD IS NOT SUFFICIENT TO SUPPORT THE REVENUE'S ACTION. IN A BLOCK ASSESSMENT UNDISCLOSED INCOME HA S TO BE DETERMINED OR THE .BASIS OF THE MATERIAL AND EVIDEN CE DETECTED IN THE COURSE OF THE SEARCH ACTION. THE CIRCUMSTANCES SURROUNDING THE CASE ARE NOT STRONG ENOUGH TO JUSTIFY THE ADDIT ION MADE BY THE DEPARTMENT. THE BURDEN OF PROVING THE ACTUAL CONSI DERATION IN THE PURCHASE OF PROPERTY IS ON THE REVENUE. CONSIDE RING THE ENTIRE FACTS OF THE CASE, THE REVENUE HAS FAILED TO DISCHARGE ITS DUTY, INSTEAD MADE UP A CASE ON SURMISES AND CONJEC TURES WHICH CANNOT BE ALLOWED. UNDER THESE CIRCUMSTANCES, THERE IS NO REASON TO CONFIRM THE ADDITION OF RS. 100 LAKHS TOWARDS ON -MONEY PAYMENT. ACCORDINGLY, THE ADDITION OF RS. 100 LAKHS IS DELETED. CIT VS. P. V. KALYANASUNDARAM (2006) 203 CTR (MAD) 449: (2006) 282ITR 259 (MAD) RELIED ON. 19 8.4.1 THE HONBLE A.P. HIGH COURT IN THE CASE OF K LAKSHMI SAVITRI DEVI (SUPRA) IN ITA NO. 563 OF 2011 HAS UPH ELD THE ORDER OF THE TRIBUNAL. 'WE ARE OF THE VIEW THAT THE TRIBUNAL HAS RIGHTLY H ELD THAT THE REGISTERED DOCUMENT DT. 21.8.2006 UNDER WHICH THE R ESPONDENT PURCHASED THE ABOVE PROPERTY SHOWED THAT ONLY RS.65 . 00 LAKHS WAS PAID TO THE VENDOR BY THE RESPONDENT: THAT THER E WAS NO EVIDENCE TO SHOW THAT THE RESPONDENT HAD PAID RS.L. 00 CRORE IN CASH ALSO TO THE VENDOR; THAT NO PRESUMPTION OF SU CH PAYMENT OF RS.1.00 CRORE IN CASH CAN BE DRAWN ON THE BASIS OF AN ENTRY FOUND IN A DIARY LOOSE SHEET IN THE PREMISES OF C. RADHA KRISHNA KUMAR WHICH IS NOT IN THE RESPONDENTS HANDWRITING A ND WHICH DID NOT CONTAIN THE NAME OF THE RESPONDENT OR ANY D ATE OF PAYMENT OR THE NAME OF THE PERSON WHO MADE THE PAYM ENT. IT RIGHTLY HELD THAT THE REVENUE FAILED TO ESTABLISH T HE NEXUS OF THE SEIZED MATERIAL TO THE RESPONDENT AND HAD DRAWN INF ERENCES BASED ON SUSPICION, CONJECTURES AND SURMISES WHICH CANNOT TAKE THE PLACE OF PROOF. WE ALSO AGREE WITH THE TRIBUNAL THAT THE ASSESSING OFFICER DID NOT CONDUCT ANY INDEPENDENT E NQUIRY RELATING TO THE VALUE OF THE PROPERTY PURCHASED AND THE BURDEN OF PROVING THE ACTUAL CONSIDERATION IN THE PURCHASE OF THE PROPERTY IS ON THE REVENUE AND IT HAD FAILED TO DISCHARGE TH E SAID BURDEN. 20 8.5 IN THE CASE OF CBI VS. VC SHUKLA (1998) 3 SCC 4 10) IT HAS BEEN HELD THAT THE LOOSE SHEETS OF PAPER CANNOT BE CONSIDERED TO BE BOOKS. 8.6 IN THE CASE OF CIT VS. PV KALYANSUNDARAM (294 I TR 49) IT HAS BEEN OBSERVED AS UNDER:- 'NOTINGS ON THE LOOSE PIECES O{PAPER ON THE BASIS O F WHICH THE INITIAL SUSPICION WITH REGARD TO THE UNDER VALUATIO N HAD BEEN RAISED WERE VAGUE AND COULD NOT BE RELIED UPON AS I T APPEARED THAT THE TOTAL AREA WITH RESPECT TO THE SALE DEED A ND THAT REFLECTED IN THE LOOSE SHEET WAS DISCREPANT. IT WAS ALSO OBSE RVED THAT 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. 8.7 IN THE CASE OF CIT VS. GIRISH CHAUDHARY (2008) 296 ITR 619 (DELHI) DELHI HIGH COURT HAS HELD AS UNDER:- THAT THE REVENUE HAS TO PROVE THE UNDISCLOSED INCO ME BEYOND DOUBT. FURTHER IT WAS HELD THAT THE DOCUMENT SHOULD BE A SPEAKING ONE AND IT SHOULD CONTAIN NARRATION IN RES PECT OF VARIOUS FIGURES NOTED THEREIN. OTHERWISE THE SAME S HOULD BE CONSIDERED AS DUMB DOCUMENT ON WHICH RELIANCE COULD NOT PLACED UPON. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE PRECEDENTS AS AFORESAID, WE DELETE THE ADDITION IN DISPUTE AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 10. AS REGARDS THE ITA NO. 378/DEL/2012 (AY 2009-10 ) IS CONCERNED, FOLLOWING THE CONSISTENT VIEW AS TAKEN B Y US IN ITA NO. 21 377/DEL/2012 (AY 2008-09) AS AFORESAID, THE ITA NO . 378/DEL/2012 (AY 2009-10) ALSO STANDS ALLOWED. 6.1 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANC ES OF THE CASE, WE FIND THAT THE ADDITIONS ON WHICH THE PENALTY IN DISPUTE WAS LEVIED, HAS ALREADY BEEN DELETED BY THE ITAT VIDE ORDER DATED 29.11.201 6 IN ITA NO. 377 & 378/DEL/2012 (AYRS. 2008-09 & 2009-10) IN ASSESSEE S OWN CASE AS AFORESAID, HENCE, THE PENALTY IN DISPUTE WILL NOT SURVIVE. ACCORDINGLY, WE CANCEL THE ORDERS OF THE AUTHORITIES BELOW AND DELE TE THE PENALTY IN DISPUTE AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/11/2017. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 08/11/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY OR DER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 22