ACIT., Circle-16(2), Hyderabad, Hyderabad V. Smt Anitha Sharma, Secunderabad

ITA 1601/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6509 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Unexplained investment; Retraction
• Section: 133A; 147

Judgement Text

ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1601/HYD/2014 (ASSESSMENT YEAR:2008-09) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(2) HYDERABAD VS. SMT. ANITA SHARMA HYDERABAD PAN: AMBPS 7416 F (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI M. SITARAM, DR FOR ASSESSEE : SHRI K.C. DEVDAS DATE OF HEARING : 28.04.2016 DATE OF PRONOUNCEMENT : 31 .05.2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2008-09. IN TH IS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF TH E CIT (A) IN DELETING THE ADDITION OF RS.55.00 LAKHS MADE BY THE AO TOWARDS UNEXPLAINED INVESTMENT IN A FLAT AND IN RULING THAT THERE WAS NO CORROBORATIVE EVIDENCE FOR SUCH ADDITION WITHOUT CO NSIDERING THE SWORN STATEMENT AND THE AGREEMENT OF SALE AS ELIGIB LE EVIDENCE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, ENGAGED IN THE BUSINESS OF LOGISTIC SERVICES, FILED HER RETURN OF INCOME FOR THE RELEVANT A.Y 2008-09 ON 31.07.2008 A DMITTING INCOME OF RS.9,78,855. THE SAME WAS PROCESSED U/S 1 43(1) OF THE I.T. ACT. THERE WAS SURVEY U/S 133A OF THE ACT ON 28.07.2010 IN THE BUSINESS PREMISES OF THE ASSESSEE COMPANY. S UBSEQUENTLY ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 2 OF 8 THE ASSESSMENT OF THE ASSESSEE WAS REOPENED U/S 147 BY ISSUANCE OF NOTICE U/S 148, DATED 26.03.2013. THE A SSESSEES REPRESENTATIVE APPEARED AND FURNISHED THE INFORMATI ON/DETAILS CALLED FOR. DURING THE RE-ASSESSMENT PROCEEDINGS, T HE AO OBSERVED THAT DURING THE COURSE OF SURVEY OPERATION S U/S 133A CONDUCTED IN THE BUSINESS PREMISES OF M/S. MERIDIAN CARGO LINES PVT. LTD, HYDERABAD, CERTAIN INCRIMINATING MA TERIAL WAS IMPOUNDED. UPON PERUSAL OF THE SAID IMPOUNDED MATER IAL, THE AO FURTHER NOTICED THAT VIDE AGREEMENT OF SALE DATE D 31.10.2007, THE ASSESSEE HAD AGREED TO PURCHASE FLAT NO.9, 2 ND FLOOR, H.NO.10-2-294 & 205/9, SNEHA ENCLAVE IN PLOT NO.196 , WEST MAREDPALLY, SECUNDERABAD FOR A TOTAL CONSIDERATION OF RS.55.00 LAKHS. HE OBSERVED THAT THE SALE DEED HAS BEEN EXEC UTED MENTIONING THE TOTAL SALE CONSIDERATION AT RS.20.00 LAKHS ONLY AND THEREFORE, THERE IS A DIFFERENCE AMOUNTING TO R S.35.00 LAKHS TOWARDS THE AGREEMENT OF SALE DATED 31.10.2007 AND SALE DEED DATED 01.11.2007. HE ALSO OBSERVED THAT THE SWORN S TATEMENT OF HUSBAND OF THE ASSESSEE AND THE MANAGING DIRECTOR O F M/S MERIDIAN CARGO PVT. LTD WAS RECORDED 28.07.2010. IN THIS STATEMENT, HE HAD ADMITTED THE PAYMENT OF ON MONEY OF RS.35.00 LAKHS OVER AND ABOVE THE SALE CONSIDERATIO N OF RS.20.00 LAKHS FOR PURCHASE OF THE HOUSE/FLAT BY HIS WIFE. H E HAD ALSO AGREED TO OFFER THE UNDISCLOSED INCOME. HOWEVER, DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE HER LETTER DATED NIL RECEIVED IN THE OFFICE OF THE AO ON 6.12.2013 SUBMITTED THAT THERE WAS NO FULL FLEDGED AGREEMENT BETWEEN THE VENDOR AND THE VENDEE IN RESPECT OF THE TRANSACTION OF THE PROPERTY AND THAT THE AGREEMENT OF SALE IMPOUNDED W AS ONLY A DRAFT AGREEMENT PREPARED AND SIGNED BY THE ASSESSEE HEREIN. IT ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 3 OF 8 WAS SUBMITTED THAT THE EXECUTION OF THE AGREEMENT D ID NOT GO BEYOND, AS THE VENDOR WAS NOT READY TO AGREE WITH T HE CLAUSES IN DRAFT AGREEMENT. THE AO WAS HOWEVER, NOT CONVINCED WITH THE ASSESSEES CONTENTION AND TAKING THE AGREEMENT OF T HE SALE AND ALSO THE SUBMISSION OF MR. BIMAL KISHORE SHARMA, HU SBAND OF THE ASSESSEE, INTO CONSIDERATION, TREATED THE SUM O F RS.35.00 LAKHS AS UNDISCLOSED INVESTMENT IN THE ABOVE MENTIO NED PROPERTY BY THE ASSESSEE. HE ACCORDINGLY BROUGHT RS .35.00 LAKHS TO TAX. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT (A) BY MAKING ELABORATE SUBMISSIONS. THE CIT (A) ACCEPT ED THE SAID CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION S AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 3. THE LEARNED DR, WHILE RELYING ON THE ORDER OF TH E AO, HAS ALSO FILED DETAILED WRITTEN SUBMISSIONS AND ALSO CO PIES OF THE DECISIONS ON WHICH HE PLACED RELIANCE UPON IN SUPPO RT OF HIS CONTENTIONS. IN ADDITION TO THE WRITTEN SUBMISSIONS , THE LEARNED DR RELIED ON THE STATEMENT OF THE ASSESSEE AND AGRE ED THAT THE ASSESSEES CONTENTION THAT THE VENDOR WAS NOT AGREE ABLE TO THE CONTENTS OF THE DRAFT AGREEMENT OF SALE IS ONLY A S ELF-SERVING ARGUMENT, BECAUSE NEITHER THE ASSESSEE NOR THE AUTH ORISED REPRESENTATIVE OF THE ASSESSEE EXPLAINED BEFORE ANY OF THE AUTHORITIES BELOW AS TO WHICH PORTION OF THE AGREEM ENT WAS NOT AGREEABLE TO THE VENDOR. HE ARGUED THAT THE RELEVAN T CLAUSES WHICH ARE NOT AGREEABLE TO THE VENDOR ARE YET TO BE POINTED OUT BY THE ASSESSEE AND IN THE ABSENCE OF SUCH IDENTIFI CATION, IT IS ONLY A SELF SERVING ARGUMENT WITHOUT ANY LEGS TO ST AND UPON. HE FURTHER AGRUED THAT THE AGREEMENT OF SALE IS SIGNED BY ONLY THE ASSESSEE AND NOT THE VENDOR AND THEREFORE, SUCH CON TENTION IS ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 4 OF 8 DEVOID OF MERIT. HE ALSO SUBMITTED THAT IN THE ABSE NCE OF THE SIGNED DOCUMENT WHICH IS ADVERSE TO ONES OWN INTERE ST AND THE FACT THAT THE ASSESSEE HAS SIGNED SUCH A DOCUMENT P ROVES THE COMMITMENT OF THE ASSESSEE TO PAYMENT OF THE SUM OF RS.55.00 LAKHS FOR THE TRANSACTION AND THAT THIS DOCUMENT HA S BEEN VOLUNTARILY PREPARED WHICH WAS FOUND DURING THE COU RSE OF SURVEY. HE SUBMITTED THAT THE ASSESSEES HUSBAND MR . BIMAL KISHORE SHARMA, IN THE SWORN STATEMENT, HAD AGREED THAT THE SUM OF RS.35.00 LAKHS, OVER AND ABOVE THE SALE CONS IDERATION HAS BEEN PAID AND THAT THE RETRACTION OF THE SAME B Y THE ASSESSEE AFTER A PERIOD OF NEARLY THREE YEARS IS ON LY AN AFTER THOUGHT WHICH COULD NOT BE GIVEN ANY CREDENCE. IN S UPPORT OF HIS CONTENTIONS ABOVE, HE PLACED RELIANCE UPON THE FOLL OWING DECISIONS: DECISIONS RELIED UPON BY THE DR: A) HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CA SE OF NAVDEEP DHINGRA VS. CIT (2015) 56 TAXMANN.COM 75 (P &H) B) ITAT AHMEDABAD IN THE CASE OF PRADUMAN RANCHHODB HAI PATEL VS. INSPECTING ASSTT. COMMISSIONER IN ITA NO.1764/AHD/1988 DATED 3.1.1995 C) HON'BLE GUJARAT HIGH COURT IN THE CASE OF SUDAR SHAN P. AMIN VS. ACIT (35 TAXMAN.COM 370 (GUJ)(2013) D) HON'BLE DELHI HIGH COURT IN THE CASE OF BHAGIRAT H AGGARWAL V. CIT (2013) 31 TAXMANN.COM 274 (DELHI) E) MUMBAI TRIBUNAL IN THE CASE OF INCOME TAX OFFICE R VS. DEVJI PREMJI PUJARA & SONS (2013) 34 TAXMANN.COM 96 (MUM) . F) HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF S ANJEEV AGARWAL VS. INCOME TAX SETTLEMENT COMMISSIONER (201 5) 56 TAXMANN.COM 214 (ALL.) G) HON'BLE HIGH COURT OF A.P IN THE CASE OF KERMEX MICRO SYSTEMS (INDIA) LTD VS. DCIT REPORTED IN (2014) 47 TAXMANN.COM 375 (AP). ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 5 OF 8 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEF ORE THE AUTHORITIES BELOW AND ALSO SUPPORTED THE ORDERS OF THE CIT (A). HE SUBMITTED THAT THE AGREEMENT OF SALE WAS PREPARE D BY THE ASSESSEE STATING THE SALE CONSIDERATION TO BE RS.55 .00 LAKHS IN ORDER TO OBTAIN A BANK LOAN BY QUOTING A HIGHER VAL UE, BUT SINCE THE VENDOR DID NOT AGREE TO THE SAME, THE AGREEMENT OF THE SALE WAS NOT SIGNED BY THE VENDOR. ACCORDING TO HIM, SIN CE IT WAS ONLY A ONE SIDED DOCUMENT, IT IS NOT AN AGREEMENT OF SAL E AND CANNOT BE GIVEN ANY CREDENCE TO. AS REGARDS THE SWORN STAT EMENT OF THE ASSESSEES HUSBAND SHRI BIMAL KISHOR SHARMA, HE SUB MITTED THAT THE STATEMENT GIVEN BY HIM HAS BEEN RETRACTED BY THE ASSESSEE. HE SUBMITTED THAT THE STATEMENT OF THE AS SESSEE WAS NOT RECORDED DURING THE COURSE OF SURVEY PROCEEDING S AND THE STATEMENT OF THE HUSBAND OF THE ASSESSEE CANNOT BE TREATED AS THE STATEMENT OF THE ASSESSEE. IN SUPPORT OF HIS CO NTENTION, HE HAS FILED A PAPER BOOK CONTAINING 32 PAGES AND HAS RELIED UPON THE FOLLOWING DECISIONS: DECISIONS RELIED ON BY THE AR I) HON'BLE SUPREME COURT IN THE CAE OF PULLANGODE R UBBER PRODUCE CO LTD VS. STATE OF KERALA (91 ITR 18) II) HON'BLE SUPREME COURT IN THE CASE OF NAGUBAI AR MAL VS. B. SHARMA RAO, AIR (1965) 100 III) HON'BLE SUPREME COURT IN THE CASE OF SWARAN SI NGH RATAN SINGH VS. STATE OF PUNJAB (1957) S.C. 637. IV) HON'BLE DELHI HIGH COURT IN THE CASE OF S. ARJA N SINGH VS. CWT (175 ITR 91). V) ITAT AHMEDABAD IN THE CASE OF ACIT VS. MRS. SUSH EELA DEVI S. AGARWAL (49 TTJ 663). VI) ITAT AHMEDABAD IN THE CASE OF DINESH CHANDRA J. DINA VS. INCOME TAX OFFICER (112 TAXMAN 107) VII) HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF KISHAN LAL SHIVCHAND RAI VS. CIT (88 ITR 293) VIII) ITAT DELHI IN THE CASE OF RP LOCKS VS. DCIT ( 67 TTJ 588) ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 6 OF 8 IX) ITAT VIZAG IN THE CASE OF SRMT LTD VS.DCIT (152 TAXMAN 8) 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE DIFFERENCE IN THE SALE CON SIDERATION OF THE PROPERTY IN THE AGREEMENT OF THE SALE AND THE SALE DEED CAME TO LIGHT DURING THE COURSE OF SURVEY WHEN THE AGREEMEN T OF SALE WAS FOUND. THE CONTENTS OF THIS DOCUMENT HAS BEEN ACCEP TED BY THE HUSBAND OF THE ASSESSEE IN HIS SWORN STATEMENT BASI NG ON WHICH THE AO HAS MADE THE ADDITION. ADMITTEDLY, THE AGREE MENT OF SALE IS DATED 31.10.2007 WHILE THE SALE DEED IS EXECUTED ON 1.11.2007. THE AGREEMENT OF SALE IS ALSO SIGNED ONL Y BY THE VENDEE I.E. THE ASSESSEE HEREIN. SINCE THE AGREEMEN T OF SALE DOES NOT CONTAIN THE SIGNATURE OF THE VENDOR OR ANY OF T HE WITNESSES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL, IT C ANNOT BE TREATED AS THE AGREEMENT OF SALE AGREED TO BY BOTH THE PARTIES. ADMITTEDLY, THE SALE DEED HAS BEEN REGISTERED ON TH E VERY NEXT DAY FOR A SUM OF RS.20.00 LAKHS ONLY AND THE VERY S AME PROPERTY HAS BEEN SUBSEQUENTLY I.E. AFTER A PERIOD OF TWO YE ARS, REGISTERED IN THE NAME OF THE ASSESSEES HUSBAND FOR A SUM OF RS.21,76,000. IT IS A SETTLED PRINCIPLE OF LAW THAT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND SURVEY ALO NE IS NOT SUFFICIENT TO PROVE EVASION OF INCOME. IT HAS TO BE CORROBORATED BY INDEPENDENT EVIDENCE. IT IS THE CASE OF THE REVENUE THAT THE STATEMENT OF SHRI B.K. SHARMA IS CORROBORATED BY TH E AGREEMENT OF SALE FOUND DURING THE COURSE OF SURVEY. IN THE D ECISIONS RELIED UPON BY THE REVENUE, THE RATIO LAID DOWN IS THAT WH ERE A STATEMENT HAS BEEN RECORDED AND SUCH A STATEMENT IS RETRACTED BELATEDLY WITHOUT GIVING ANY REASON, SUCH RETRACTIO N IS NOT ACCEPTABLE UNLESS THE ASSESSEE ESTABLISHES THAT SUC H STATEMENT ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 7 OF 8 IS NOT VOLUNTARY AND WAS OBTAINED UNDER MENTAL STRE SS, COERCION, UNDUE INFLUENCE OR DUE TO ANY OTHER ABNORMAL CONDIT ION AND CIRCUMSTANCE WHEN SUCH STATEMENT WAS MADE. THE DECI SIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO LAY DOWN THE SAME RATIO AND FURTHER LAY DOWN THAT A PAR TY IS ENTITLED TO SHOW AND PROVE THAT AN ADMISSION MADE BY HIM PRE VIOUSLY WAS IN FACT NOT CORRECT AND TRUE. IN THE CASE BEFOR E US, THE ASSESSEE HAD RETRACTED THE STATEMENT MADE BY HER HU SBAND ONLY DURING THE ASSESSMENT PROCEEDINGS I.E. AFTER A PERI OD OF NEARLY 3 YEARS. SINCE THE ASSESSEE HAS ALLEGED MENTAL STRESS FOR RECORDING OF SUCH STATEMENT, AS HELD IN THE ABOVE JUDGMENTS C ITED BY BOTH THE PARTIES, IT IS OPEN FOR THE ASSESSEE TO SHOW TH AT IT IS INCORRECT. THE ASSESSEE HAS RELIED ON THE FACT THAT AGREEMENT OF SALE WAS ALLEGEDLY ENTERED INTO ON 31.10.2007 AND THE SALE D EED EXECUTED ON THE VERY NEXT DAY I.,E 1.11.2007 TO SUBMIT THAT THE AGREEMENT OF SALE WAS NOT EXECUTED AS THERE IS NO REQUIREMENT OF AGREEMENT OF SALE, WHERE THE SALE DEED WAS TO BE EXECUTED ON THE VERY NEXT DAY. THEREFORE, IT IS IMPORTANT TO EXAMINE THE NECE SSITY AND GENUINENESS OF THE DOCUMENT. AS BROUGHT OUT ABOVE, THE AGREEMENT OF SALE IS NOT SIGNED BY THE VENDOR AND T HE WITNESSES AND IT WAS ONLY THE ASSESSEE WHO HAS SIGNED IT. UNL ESS THERE IS AN OFFER BY ONE PARTY AND ACCEPTANCE OF THE SAME BY THE OTHER, IT WOULD NOT RESULT IN ANY ENFORCEABLE CONTRACT AND NO T A VALID DOCUMENT. THUS, IN OUR VIEW, WHEN SUCH AN AGREEMENT OF SALE IS NOT A VALID DOCUMENT, IT CANNOT BE TREATED AS RELIA BLE CORROBORATIVE EVIDENCE. THOUGH WE AGREE WITH THE CO NTENTION OF THE REVENUE THAT THE SALE CONSIDERATION OF RS.20.00 LAKHS MENTIONED IN THE SALE DEED ALONE MAY NOT BE THE COR RECT SALE CONSIDERATION PAID BY THE ASSESSEE, WE ALSO DO NOT AGREE WITH THE ITA NO 1601 OF 2014 ANITHA SHARMA HYDERABAD PAGE 8 OF 8 REVENUE THAT THE SUM OF RS.55.00 LAKHS MENTIONED IN THE AGREEMENT OF SALE (NOT SIGNED BY THE VENDOR) CAN BE TAKEN AS THE CORRECT SALE CONSIDERATION AND THAT THE DIFFERENCE IS THE ON MONEY PAID BY THE ASSESSEE. IN VIEW OF THE SAME, WE AGREE WITH THE FINDINGS OF THE CIT (A) THAT THE REVENUE HAS NO T DISCHARGED THAT A SUM OF RS.35.00 LAKHS IS UNDISCLOSED INVESTM ENT MADE BY THE ASSESSEE. THE REVENUE HAS NOT BROUGHT ANY OTHER EVIDENCE ON RECORD AND THE STATEMENT OF ASSESSEES HUSBAND A LONE ACCEPTING THAT THE ACTUAL SALE CONSIDERATION AS RS. 55.00 LAKHS IS NOT SUFFICIENT TO CONFIRM THE ADDITION. IN VIEW OF THE SAME, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2016. S D/ - S D/ - (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 31 ST MAY, 2016. VNODAN/SPS COPY TO: 1. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 16(2), 7 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH. HYDERABAD 2. SMT. ANITA SHARMA (PRO. PRASIT LOGISTIC SOLUTIONS) 10-2-294- 295, FLAT NO.301, SNEHA ENCLAVE, STREET NO.4, WEST MAREDPALLY, SECUNDERABAD 3. CIT(A) - V HYDERABAD 4. CIT IV HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER