Saral Talwar, Hyderabad V. DCIT., Central Circle-4, Hyderabad, Hyderabad

ITA 1784/HYD/2014

• Counselvise Citation: 178422514 RSA 2014
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 27-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure; Document seized; Cost of acquisition; Documents seized
• Section: 143(3); 131; 37; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1783, 1784, 1785, 1786, 1787/HYD/2014 ITA.NO.1801 & 1802/HYD/2014 ASSESSMENT YEARS 2005-2006, 2006-2007,2007-2008, 2008-2009, 2009-2010, 2010-2011 & 2011-2012 MR. SARAL TALWAR HYDERABAD - 28. PAN AAWPT7109D VS. DCIT, CENTRAL CIRCLE - 4 HYDERABAD. (APPELLANT) (RESPONDENT) ITA.NO.1788, 1789, 1790/HYD/2014 ITA.NO.1887 & 1888/HYD/2014 ASSESSMENT YEARS 2006-2007, 2007-2008, 2009-2010, 2008-2009 AND 2011-2012 SMT. RADHIKA TALWAR HYDERABAD - 28. PAN ADSPB7845F VS. DCIT, CENTRAL CIRCLE - 4 HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. MURALIMOHAN RAO FOR REVENUE : SMT. AMISHA S. GUPT DATE OF HEARING : 02 .0 7 .2015 DATE OF PRONOUNCEMENT : 22 . 0 7 .2015 ORDER PER BENCH THESE GROUP OF TWELVE APPEALS BY TWO DIFFERENT ASSESSEES ARE AGAINST TWO SEPARATE ORDERS, BOTH DAT ED 20.10.2014, OF THE LD. CIT(A)-I, HYDERABAD. APPEALS PERTAINING TO MR. SARAL TALWAR ARE FOR A.YS. 2005-2 006 TO 2 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. 2011-2012, WHEREAS, APPEALS PERTAINING TO SMT. RADH IKA TALWAR ARE FOR A.Y. 2006-2007 TO 2009-2010 AND 2011 - 2012. SINCE FACTS INVOLVED IN ALL THESE APPEALS ARE MORE OR LESS IDENTICAL AND ISSUES RAISED ARE ALSO COMMON, T HESE APPEALS ARE CLUBBED TOGETHER AND DISPOSED OF BY THI S CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA.NOS. 1783 TO 1787/HYD/2014 & 1801 & 1802/HYD/ 2014 MR. SARAL TALWAR 2. THE ASSESSEE HAS BASICALLY RAISED THREE ISSUES IN ALL THESE APPEALS WHICH ARE AS UNDER : (I) VALIDITY OF PROCEEDING INITIATED UNDER SECTION 153C OF THE ACT. (II) DISALLOWANCE OF 50% OUT OF THE EXPENDITURE CLAIMED ON THE COMMISSION INCOME. (III) ADDITION OF RS.1,33,00,000 UNDER SECTION 69A OF THE ACT. 2.1. WHILE ISSUE NO.(I) AND (II) ARE COMMON IN ALL THE APPEALS, ISSUE NO.(III) IS SPECIFIC TO A.Y. 200 9-2010 ONLY. 3. AT THE OUTSET, WE PROPOSE TO DEAL WITH THE MERITS OF THE ADDITIONS MADE ON ACCOUNT OF DISALLOW ANCE OF 50% OF EXPENDITURE OF COMMISSION INCOME AS WELL AS ADDITION UNDER SECTION 69A OF THE ACT. AS FAR AS TH E FIRST ISSUE RELATING TO DISALLOWANCE OF 50% EXPENDITURE O F COMMISSION INCOME IS CONCERNED, BRIEFLY THE FACTS A RE THE ASSESSEE AN INDIVIDUAL IS A DIRECTOR OF M/S. TALWAR 3 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. MOBILES P. LTD., AND M/S. TALWAR AUTO GARAGES P. LT D., THAT APART ASSESSEE ALSO DERIVES INCOME FROM COMMIS SION. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN CASE OF MR. SURESH CHAND AGARW AL AND OTHERS IN THE GROUP ON 29.10.2010. DURING THE S EARCH AND SEIZURE OPERATION, CERTAIN DOCUMENTS WERE SEIZE D WHICH REVEALED A TRANSACTION RELATING TO SALE OF PR OPERTY NAMED AS THE TRAILS AT PLOT NO.6, GATED COMMUNITY , MANIKONDA JAGIR VILLAGE, RAJENDRA NAGAR MANDAL, RANGAREDDY DISTRICT OWNED BY THE ASSESSEE AND HIS W IFE SMT. RADHIKA TALWAR. ON THE BASIS OF THE SEIZED DOCUMENTS, A NOTICE UNDER SECTION 153C OF THE ACT W AS ISSUED TO THE ASSESSEE ON 31.01.2012 CALLING UPON H IM TO SUBMIT HIS RETURNS OF INCOME FOR THE A.YS.2005-2006 TO 2010-2011. IN RESPONSE TO THE SAID NOTICE, ASSESSEE SUBMITTED HIS RETURN OF INCOME FOR THE CONCERNED ASSESSMENT YEARS DECLARING TOTAL INCOME AS UNDER : ASSESSMENT YEAR DECLARED INCOME (RS.) 2005 - 2006 8,44,195 2006 - 2007 12,83,900 2007 - 2008 24,33,573 2008 - 2009 31,03,380 2009 - 2010 37,17,726 2010 - 2011 47,11,830 2011 - 2012 58,34,576 3.1. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. WHILE VERIFYING THE COMPUTATION OF INCOME OF THE AS SESSEE FILED ALONG WITH RETURNS OF INCOME NOTICED THAT THE ASSESSEE HAS CLAIMED CERTAIN AMOUNTS IN DIFFERENT 4 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. ASSESSMENT YEARS TOWARDS EXPENSES INCURRED ON COMMISSION INCOME AS UNDER : ASSESSMENT YEAR EXPENSES OF COMMISSION (RS.) 2005 - 2006 3,80,158 2006 - 2007 3,81,360 2007 - 2008 9,52,300 2008 - 2009 8,80,850 2009 - 2010 5,22,300 2010 - 2011 21,13,700 2011 - 2012 14,36,933 3.2. AS OBSERVED BY THE A.O. IN THE ASSESSMENT ORDER, WHEN THE ASSESSEE WAS ASKED TO FURNISH EVIDE NCES FOR THE EXPENDITURE INCURRED SUCH AS VOUCHERS, DETA ILS OF COMMISSION PAYEES AND THE NATURE OF EXPENDITURE, TH E ASSESSEE DID NOT FURNISH ANY EVIDENCE EXCEPT A LIST CONTAINING THE NAMES, CHEQUE NUMBERS AND AMOUNTS OF COMMISSION PAID. THE A.O. THEREFORE, WAS OF THE VI EW THAT THE ASSESSEE HAS NOT ESTABLISHED THE FACT THAT THE EXPENDITURE WAS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF ASSESSEES BUSINESS IN TERMS WITH SECTION 37 OF THE ACT. THE A.O. REFERRING TO C ERTAIN JUDICIAL AUTHORITIES HELD THAT AS THE ASSESSEE HAS NOT DISCHARGED THE ONUS CASTE UPON HIM, 50% OF THE EXPENDITURE CLAIMED HAS TO BE DISALLOWED. ACCORDING LY, THE A.O. AFTER DISALLOWING 50% OF THE EXPENSES CLAI MED IN DIFFERENT ASSESSMENT YEARS MADE ADDITION TO THE INC OME RETURNED BY THE ASSESSEE. BEING AGGRIEVED OF SUCH DISALLOWANCE MADE BY THE A.O. ASSESSEE CHALLENGED T HE 5 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. SAME BEFORE THE LD. CIT(A). THE LD. CIT(A) ALSO CON FIRMED THE DISALLOWANCE MADE BY THE A.O. 4. THE LEARNED A.R. SUBMITTED BEFORE US THAT WHEN THE ASSESSEE HAS MAINTAINED ALL EVIDENCES AND ALSO FURNISHED THE SAME BEFORE THE A.O. IN RESPECT OF TH E EXPENDITURE INCURRED, THERE IS NO JUSTIFICATION IN MAKING ADHOC DISALLOWANCE OF 50% OUT OF THE EXPENDITURE CLAIMED, THAT TOO IN AN ASSESSMENT UNDER SECTION 15 3C OF THE ACT WITHOUT REFERRING TO ANY INCRIMINATING MATE RIAL. 5. THE LEARNED D.R. ON THE OTHER HAND, JUSTIFIED THE DISALLOWANCES. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND ALSO PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. A S CAN BE SEEN, THE A.O. MADE AN ADHOC DISALLOWANCE OF 50% OF EXPENDITURE CLAIMED TO HAVE BEEN INCURRED IN EARNIN G COMMISSION INCOME, PRIMARILY FOR THE REASON THAT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN FULLY THAT TH E EXPENDITURE CLAIMED WAS WHOLLY AND EXCLUSIVELY LAID OUT FOR THE PURPOSE OF BUSINESS. HOWEVER, FROM THE OBSERVATIONS OF THE A.O. IN THE ASSESSMENT ORDER, I T IS CLEAR THAT DURING THE ASSESSMENT PROCEEDING, THE AS SESSEE HAS FURNISHED THE DETAILS OF EXPENDITURE INCURRED B Y FURNISHING NAMES OF THE PERSONS TO WHOM PAYMENTS WE RE MADE, CHEQUE NUMBERS AND AMOUNT PAID. IN CONTRAST, THE A.O., AS IT APPEARS, HAS NOT MADE ANY ENQUIRY EITHE R WITH 6 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. REGARD TO THE GENUINENESS OF SUCH PAYMENT OR WHETHE R SUCH PAYMENTS WERE REQUIRED FOR THE PURPOSE OF BUSI NESS OR NOT BEFORE MAKING ADHOC DISALLOWANCE OF 50% OF T HE EXPENDITURE. WHEN THE ASSESSEE HAS FURNISHED THE NA MES OF THE PERSONS TO WHOM PAYMENTS WERE MADE AND THE PAYMENTS ARE THROUGH CHEQUES, THE DETAILS OF WHICH WERE BEFORE THE A.O., NOTHING PREVENTED HIM FROM MAKING ENQUIRY TO ASCERTAIN THE CORRECTNESS OF ASSESSEES CLAIM OR GENUINENESS OF THE EXPENDITURE. MOREOVER, WHEN THE A.O. ACCEPTED 50% OF THE EXPENDITURE CLAIMED, THERE CANN OT BE ANY DOUBT WITH REGARD TO THE FACT THAT THE EXPENDIT URE WAS LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE DOUBT ENTERTAINED BY THE A.O. IS ONLY ON THE QUANTUM OF EXPENDITURE INCURRED. AS STATED EARLIER, THE ENTIRE EXPENDITURE HAS BEEN INCURRED THROUGH CHEQUE PAYMENTS. THEREFORE, THE GENUINENESS OF THE EXPENDI TURE CANNOT BE DOUBTED WITHOUT BRINGING POSITIVE EVIDENC E ON RECORD THAT THE PAYMENTS MADE THROUGH CHEQUES WERE NOT ON ACCOUNT OF EXPENDITURE INCURRED FOR EARNING THE COMMISSION INCOME OR THEY ARE BOGUS. THERE BEING NO ENQUIRY WHATSOEVER BY THE A.O. IN THIS REGARD, THE ADDITION MADE CANNOT BE SUSTAINED. THE LD. CIT(A), IN OUR VIEW, WHILE CONFIRMING THE ADDITION MADE BY THE A.O . INSTEAD OF DECIDING THE MERITS OF THE ADDITION ON T HE BASIS OF FACTS HAS DELIBERATED MORE ON THE ISSUE, WHETHER SUCH ADDITION CAN BE MADE IN A PROCEEDING UNDER SECTION 153C OF THE ACT. THEREFORE, THERE BEING NO VALID REASON BEHIND DISALLOWANCE OF 50% OUT OF THE EXPENDITURE CLAIMED, WE 7 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. DELETE THE ADDITIONS MADE ON THIS ACCOUNT IN DIFFER ENT ASSESSMENT YEARS. THIS GROUND IN ALL THE APPEALS AR E THEREFORE ALLOWED. 7. THE ONLY OTHER ISSUE OF ADDITION OF AN AMOUNT OF RS.1,33,00,000 UNDER SECTION 69A ARISES IN A.Y. 2009- 2010. 8. BRIEFLY, THE FACTS RELATING TO THIS ISSUE ARE, AS STATED EARLIER, DURING THE SEARCH AND SEIZURE OPERA TION IN THE RESIDENTIAL PREMISES OF MR. SURESH CHAND AGARWA L DOCUMENTS WERE SEIZED PERTAINING TO TRANSACTIONS OF PROPERTY NAMELY THE TRAILS AT PLOT NO.6, GATED COMMUNITY, MANIKONDA JAGIR VILLAGE, RAJENDRANAGAR MANDAL, RANGA REDDY DISTRICT OWNED BY THE ASSESSEE AND HIS WIFE SMT. RADHIKA TALWAR. ON VERIFYING THE SEIZ ED DOCUMENT, IT WAS FOUND THAT THE SAID SEIZED DOCUMEN TS CONTAIN AN AGREEMENT OF SALE DATED 18.08.2008 BETWE EN THE ASSESSEE, HIS WIFE AND MR. SURESH CHAND AGARWAL TOWARDS SALE OF THE PROPERTY THE TRAILS AT PLOT N O.6, GATED COMMUNITY, MANIKONDA JAGIR VILLAGE, RAJENDRANAGAR MANDAL, RANGA REDDY DISTRICT ADMEASURING 514 SQ. YARDS AND HAVING BUILT-UP AREA OF 4500 SQ. FEET FOR A CONSIDERATION OF RS.1,31,00,000 . AS A FOLLOW-UP TO THE AGREEMENT OF SALE, AN UNSIGNED LET TER WAS ALSO FOUND AND SEIZED WHICH STATED THAT AN AMOUNT O F RS.2,66,00,000 HAS BEEN PAID BY MR. SURESH CHAND AGARWAL TO THE ASSESSEE AND HIS WIFE AND BALANCE AM OUNT OF RS.55,00,000 REMAINS TO BE PAID OUT OF THE TOTAL SALE 8 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. CONSIDERATION. CERTAIN RECEIPTS, ALLEGEDLY EXECUTED BY THE ASSESSEE, WERE ALSO SEIZED WHICH INDICATED THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.2,30,00,000 IN CA SH ON DIFFERENT DATES ON ACCOUNT OF SALE CONSIDERATION OF THE PROPERTY OWNED BY HIM IN ADDITION TO THE AMOUNT OF RS.36,00,000 RECEIVED IN CHEQUE. THE A.O. OBSERVED THAT IN THE COURSE OF POST SEARCH PROCEEDING WHEN THE AS SESSEE WAS CONFRONTED WITH THE SEIZED MATERIAL, IN STATEME NT DATED 08.11.2011, THE ASSESSEE ADMITTED THAT SIGNAT URE ON THE RECEIPTS APPEARS TO BE HIS, BUT, AT THE SAME TIME, HE EXPRESSED THAT HE HAD NO KNOWLEDGE OF THE CONTEN TS OF THE RECEIPTS. THE ASSESSEE HOWEVER DENIED OF RECEIV ING THE CASH OF RS.2,30,00,000. EVEN IN THE COURSE OF ASSES SMENT PROCEEDINGS ALSO, A STATEMENT WAS RECORDED FROM THE ASSESSEE ON 20.03.2013 AND IN THE COURSE OF RECORDI NG OF SUCH STATEMENT, THE ASSESSEE AGAIN DENIED OF HAVING RECEIVED THE AMOUNT OF RS.2,30,00,000 TOWARDS SALE OF THE PROPERTY. THE A.O. HOWEVER, DID NOT BELIEVE THE CLA IM OF THE ASSESSEE. HE OBSERVED THAT THE CONTENTS OF THE RECEIPTS AS WELL AS THE SIGNATURE IS IN HAND WRITIN G OF ONE PERSON. THEREFORE, WHEN THE ASSESSEE ACCEPTS THE SIGNATURE IN THE RECEIPTS TO BE HIS, HE CANNOT DENY THE CONTENTS OF THE RECEIPTS. HE FURTHER OBSERVED THAT SINCE THE ASSESSEE IS AN EDUCATED PERSON AND RUNNING A SUCCESSFUL BUSINESS, IT CANNOT BE BELIEVED THAT HE HAS PUT HIS SIGNATURE WITHOUT KNOWING THE CONTENTS OF THE RECEIPTS. THEREBY, DISBELIEVING THE STATEMENT OF TH E ASSESSEE TO THE EFFECT THAT HE HAS NOT RECEIVED AMO UNT OF 9 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. RS.2.30 CRORES IN CASH, THE A.O. FORMED AN OPINION THAT THE ASSESSEE HAS RECEIVED TOTAL AMOUNT OF RS.2.66 C RORES FROM MR. SURESH CHAND AGARWAL DURING THE YEAR UNDER CONSIDERATION TOWARDS SALE OF THE PROPERTY. HOWEVE R, SINCE THE ASSESSEE HAS FAILED TO DISCLOSE THE SAME TO THE DEPARTMENT, HE TREATED THE AMOUNT AS UNEXPLAINED MO NEY UNDER SECTION 69A OF THE ACT. AS THE ASSESSEE WAS 5 0% OWNER OF THE PROPERTY ALONG WITH HIS WIFE, THE A.O. TREATED AN AMOUNT OF RS.1,33,00,000 AS ASSESSEES SHARE IN THE UNEXPLAINED MONEY AND ADDED IT TO HIS INCOME FOR TH E YEAR UNDER CONSIDERATION. 9. BEING AGGRIEVED OF SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. IN COURSE OF HEARING OF APPEAL BEFORE THE FIRST APPELL ATE AUTHORITY, THE ASSESSEES CONTENTION BROADLY ARE AS UNDER: (1) NO ADDITION CAN BE MADE ON THE BASIS OF AN UNSIGNED AGREEMENT. (2) THE TRANSACTION BETWEEN THE ASSESSEE AND MR. SURESH CHAND AGARWAL DID NOT MATERIALIZE. HENCE, THE AGREEMENT OF SALE WAS ULTIMATELY CANCELLED ON 04.10.2010. (3) THE PROPERTY WAS ULTIMATELY SOLD TO MRS. B. SARADA KALYANI THROUGH A REGISTERED SALE DEED ON 30.04.2011 FOR A CONSIDERATION OF RS.1,45,00,000. (4) THE ENCUMBRANCE CERTIFICATE CLEARLY SHOWS THAT MR. SURESH CHAND AGARWAL WAS NEVER OWNER OF THE PROPERTY. 10 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. 9.1. LD. CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. SHE OBSERVED THAT IF T HE ASSESSEES CONTENTION THAT UNSIGNED AGREEMENT OF SA LE WAS NEVER ACTED UPON IS TO BE ACCEPTED, THEN THERE WAS NO NEED FOR CANCELLATION OF THE AGREEMENT DATED 04.10. 2010. SHE OBSERVED THAT WHETHER NAME OF MR. SURESH CHAND AGARWAL IS REFLECTED IN THE ENCUMBRANCE CERTIFICATE OR NOT IS NOT OF ANY RELEVANCE AS THE REGISTRATION OF THE PROPERTY WAS NOT COMPLETED. HOWEVER, ACCORDING TO THE LD. CI T(A), WHEN SIGNED RECEIPTS OF THE ASSESSEE FORMING PART O F THE SEIZED DOCUMENT CLEARLY INDICATE THAT THE ASSESSEE HAS RECEIVED CASH OF RS.2.30 CRORES ALONG WITH CHEQUE PAYMENT OF RS.36 LAKHS, THE CLAIM OF THE ASSESSEE T HAT NO SUCH PAYMENTS HAVE BEEN RECEIVED CANNOT BE ACCEPTED . FINALLY, THE LD. CIT(A) CONFIRMED THE ADDITION ON T HE FOLLOWING REASONING. (I) THERE WAS A SEARCH AT THE PREMISES OF THE INTENDING PURCHASER OF THE PROPERTY WHERE THE AGREEMENT OF SALE BETWEEN THE SAID PERSON WITH THE APPELLANT HAS BEEN FOUND. (II) AS PER THE AGREEMENT OF SALE, THERE WAS A TRANSACTION FOR PURCHASE OF THE PROPERTY, THE TRAIL AT PLOT NO.6, GATED COMMUNITY, MANIKONDA JAGIR VILLAGE TO WHICH THE APPELLANT AND HIS WIFE ARE PARTIES ALONG WITH THE INTENDING PURCHASER, I.E., SRI SURESHCHAND AGARWAL. (III) THERE WERE DOCUMENTS SHOWING THE TOTAL PAYMENTS MADE BOTH IN CASH AND CHEQUE AND THE APPELLANTS CLAIMING THAT ONLY THE CHEQUE PAYMENTS WERE THE TOTAL CONSIDERATION CANNOT 11 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. BE ACCEPTED BECAUSE THE DOCUMENT AS A WHOLE NEEDS TO BE CONSIDERED AND CANNOT OWN PART OF IT AND DISOWN THE INCONVENIENT ONE. (IV) THE INTENDING PURCHASER ADMITTED TO HAVE PAID ON-MONEY CONSIDERATION OF RS.2.30 CRORES TO THE APPELLANT AND HIS WIFE IN CASH AND HE PAID TAXES ON THE UNDISCLOSED INCOME ON ACCOUNT OF THIS. (V) THE SEIZED DOCUMENT 39, 40 AND 41 WHICH ARE SIGNED RECEIPTS GIVEN BY THE APPELLANT AND ACKNOWLEDGED BY SRI SURESHCHAND AGARWAL. BEING AGGRIEVED OF THE ORDER OF LD. CIT(A), ASSESSE E IS IN APPEAL BEFORE US. 10. THE LEARNED A.R. MORE OR LESS REITERATING THE SUBMISSION MADE BEFORE THE DEPARTMENTAL AUTHORITIES SUBMITTED, ASSESSEE RIGHT FROM THE TIME OF POST SEA RCH PROCEEDING HAS CONSISTENTLY TAKEN THE STAND THAT HE HAS NEVER RECEIVED ANY AMOUNT IN CASH FROM MR. SURESH CHAND AGARWAL TOWARDS SALE OF THE PROPERTY. HE SUBMITTED THAT THOUGH THE ASSESSEE IN THE STATEMENT RECORDED FROM HIM STATED THAT THE SIGNATURES IN THE RECEIPTS APPEAR TO BE HIS, BUT HE NEVER ACCEPTED TH E CONTENTS OF THE RECEIPTS. FURTHER, IT WAS SUBMITTED THAT THE ENTIRE ADDITION HAS BEEN MADE BY THE A.O. ON TH E BASIS OF AN UNSIGNED LETTER/AGREEMENT FOUND IN THE PREMISES OF MR. SURESH CHAND AGARWAL. THEREFORE, NO ADDITION CAN BE MADE ON THE BASIS OF AN UNSIGNED DOCUMENT WHICH HAS NO EVIDENTIARY VALUE. LEARNED A. R. SUBMITTED, THOUGH INITIALLY THE ASSESSEE AND HIS WI FE ON 12 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. 18.08.2008 HAS ENTERED INTO AN AGREEMENT OF SALE WI TH MR. SURESH CHAND AGARWAL FOR SALE OF THE PROPERTY O WNED BY THEM BUT SUBSEQUENTLY THE SAID AGREEMENT WAS CANCELLED ON 04.10.2010 AS THE DEAL COULD NOT BE MATERIALIZED. THEREFORE, WHEN THE DEAL ITSELF DID N OT MATERIALIZED, THERE IS NO QUESTION OF ASSESSEE HAVI NG RECEIVED ANY PAYMENT FROM MR. SURESH CHAND AGARWAL TOWARDS SALE OF THE PROPERTY. LEARNED A.R. SUBMITTE D, THE PROPERTY IN QUESTION ALL THROUGH REMAINED IN POSSES SION OF THE ASSESSEE TILL IT WAS SOLD TO A THIRD PARTY, SMT. B. SARADA KALYANI THROUGH REGISTERED SALE DEED EXECUTE D ON 30.04.2011 FOR A CONSIDERATION OF RS.1,45,00,000 AN D THE ASSESSEE AND HIS WIFE HAVE ALSO DISCLOSED CAPITAL G AIN/LOSS ON ACCOUNT OF SUCH SALE IN A.Y. 2012-2013. IN THIS CONTEXT, THE ASSESSEE DREW REFERENCE TO THE ASSESSM ENT ORDERS PASSED IN THE CASE OF ASSESSEE AND HIS WIFE SMT. RADHIKA TALWAR FOR A.Y. 2012-2013. THE LEARNED A.R. SUBMITTED WHEN THE PROPERTY WAS NOT SOLD TO MR. SUR ESH CHAND AGARWAL AND THE AUTHENTICITY OF THE SEIZED DOCUMENT IS ALSO NOT FREE FROM DOUBT, ONLY RELYING ON SUCH DOCUMENT, NO ADDITION UNDER SECTION 69A CAN BE MADE. LEARNED A.R. SUBMITTED, MERELY BECAUSE THE ASSESSEE HAS STATED THAT THE SIGNATURE IN THE RECEI PTS APPEARS TO BE HIS THAT ITSELF WILL NOT BE ENOUGH TO PROVE THAT HE HAS SIGNED THOSE RECEIPTS OR HAS RECEIVED A MOUNTS MENTIONED IN THOSE RECEIPTS. THE LEARNED A.R. SUBMI TTED THAT FOR MAKING ADDITION UNDER SECTION 69A OF THE A CT, MONEY, BULLION AND JEWELLERY HAS TO BE FOUND IN 13 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. POSSESSION OF THE ASSESSEE WHEREAS IN THE PRESENT C ASE, NO MONEY WAS FOUND WITH THE ASSESSEE TO ATTRACT THE PROVISIONS OF SECTION 69A. HE THEREFORE SUBMITTED T HAT THE ADDITION MADE IN VIOLATION OF THE STATUTORY PROVISI ON AND ALSO NOT BASED ON ANY EVIDENCE HAS TO BE DELETED. 11. LEARNED D.R. ON THE OTHER HAND SUBMITTED BEFORE US THAT THE SEIZED DOCUMENTS HAVING CLEARLY ESTABLISHED THE FACT THAT ASSESSEE HAS RECEIVED AN AMOUNT OF RS.2.30 CRORES IN CASH AND RS.36 LAKHS IN CHEQUE FROM MR. SURESH CHAND AGARWAL TOWARDS SALE OF THE PROPER TY DURING THE RELEVANT PREVIOUS YEAR, THE ADDITION MAD E IN IS JUSTIFIED. LEARNED D.R. SUBMITTED THAT THERE IS NOT HING CONTAINED UNDER SECTION 69A TO SUGGEST THAT THE ADD ITION CAN BE MADE ONLY IN CASE OF ACTUAL MONEY HAVING BEE N FOUND IN THE POSSESSION OF THE ASSESSEE. ALTERNATIV ELY, IT WAS SUBMITTED THAT EVEN IF THE ADDITION CANNOT BE M ADE UNDER SECTION 69A BUT IT CERTAINLY CAN BE MADE UNDE R SECTION 57 OF THE ACT AND MENTIONING A WRONG PROVIS ION WOULD NOT VITIATE THE VALIDITY OF THE ADDITION. LEA RNED D.R. FURTHER SUBMITTED THAT MR. SURESH CHAND AGARWAL AT THE TIME OF SEARCH HAS STATED THAT HE HAS PAID AN AMOUN T OF RS.2.66 CRORES TOWARDS PURCHASE OF THE PROPERTY OF THE ASSESSEE AND HIS WIFE WHICH INCLUDED CASH PAYMENT O F RS.2,30,00,000 AND ACCORDINGLY HE MADE A DECLARATIO N OF RS.2.50 LAKHS TOWARDS ADDITIONAL INCOME IN A.Y. 200 9- 2010. IN THIS REGARD, LEARNED D.R. PLACED ON RECORD LETTER DATED 30.06.2015 OF THE DCIT, CC(2), HYDERABAD. 14 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD AS WELL AS ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE. NO DOUBT, IT IS EVIDENT FROM RECORD THAT DURING THE SEARCH AN D SEIZURE OPERATION IN THE CASE OF MR. SURESH CHAND AGARWAL CERTAIN DOCUMENTS WERE SEIZED WHICH INDICAT ED A TRANSACTION INVOLVING SALE OF PROPERTY BELONGING TO THE ASSESSEE AND HIS WIFE SMT. RADHIKA TALWAR TO MR. SU RESH CHAND AGARWAL. IN THIS CONTEXT, A REFERENCE TO THE SEIZED MATERIALS, COPIES OF WHICH HAVE BEEN SUBMITTED IN ASSESSEES PAPER BOOK, WOULD REVEAL THAT ASSESSEE A ND HIS WIFE HAD ENTERED INTO AN AGREEMENT OF SALE WITH MR. SURESH CHAND AGARWAL IN AUGUST, 2008 (NO DATE MENTIONED) FOR SALE OF THE PROPERTY NAMED THE TRAI LS AT PLOT NO.6, GATED COMMUNITY, MANIKONDA JAGIR VILLAGE , RAJENDRANAGAR MANDAL, RANGA REDDY DISTRICT FOR A TO TAL CONSIDERATION OF RS.1.31 CRORES. THE SAID AGREEMENT OF SALE ALSO MENTIONS THAT THE VENDEE (MR.SURESH CHAND AGARWAL) HAS PAID A SUM OF RS.31 LAKHS TO THE VENDO R (MR. SARAL TALWAR AND SMT. RADHIKA TALWAR). AS IT APPEAR S FROM THE PERUSAL OF THE AGREEMENT OF SALE, IT IS SI GNED BY ALL THE PARTIES. HOWEVER, LETTER DATED 19 TH NOVEMBER, 2009, WHICH ALSO FORMS PART OF THE SEIZED DOCUMENT, IS AN UNSIGNED LETTER PURPORTEDLY WRITTEN BY SRI. SARAL T ALWAR AND SMT. RADHIKA TALWAR TO MR. SURESH CHAND AGARWAL , THE CONTENTS OF WHICH INDICATE THAT MR. SURESH CHAN D AGARWAL HAS PAID AN AMOUNT OF RS.2,35,00,000 BY WAY OF CASH TO THE ASSESSEE AND HIS WIFE APART FROM CHEQUE 15 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. PAYMENTS. OF-COURSE, THERE ARE RECEIPTS PURPORTEDLY SIGNED BY ASSESSEE INDICATING CASH PAYMENTS WHICH A LSO FORMS PART OF THE SEIZED DOCUMENTS. THESE RECEIPTS AND THE UNSIGNED LETTER DATED 19 TH NOVEMBER, 2009 ARE THE PRIMARY EVIDENCE ON THE BASIS OF WHICH ADDITIONS HA VE BEEN MADE AT THE HANDS OF THE ASSESSEE AND HIS WIFE . THEREFORE, THE PRELIMINARY ISSUE TO BE DECIDED IS, WHETHER ON THE BASIS OF THE UNSIGNED LETTER DATED 19 TH NOVEMBER, 2009 AND CERTAIN RECEIPTS PURPORTEDLY SIGNED BY ASS ESSEE, ADDITION CAN BE MADE UNDER SECTION 69A OF THE ACT. 12.1. IT NEEDS TO BE MENTIONED, ASSESSEE FROM THE VERY INITIAL STAGE OF THE PROCEEDING HAS DENIED OF RECEIVING ANY CASH AMOUNT FROM MR. SURESH CHAND AGARWAL TOWARDS THE SALE OF PROPERTY. IT IS ALSO EVIDENT TH AT APART FROM THE RECEIPTS AND THE UNSIGNED DOCUMENT, THERE IS NO OTHER EVIDENCE IN THE POSSESSION OF THE DEPARTMENT TO CONCLUSIVELY PROVE THAT THE ASSESSEE HAS ACTUALLY R ECEIVED THE AMOUNT OF RS.2.66 CRORES FROM MR. SURESH CHAND AGARWAL. ON A PLAIN READING OF SECTION 69A, IT IS V ERY MUCH EVIDENT THAT THE SAID SECTION CAN BE INVOKED O NLY IN A CASE WHERE THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY, ARTICLE, WHICH IS N OT RECORDED IN THE BOOKS OF ACCOUNTS AND FURTHER ASSES SEE OFFERS NO EXPLANATION WITH REGARD TO SUCH MONEY, BU LLION, JEWELLERY OR EXPLANATION OFFERED, IS NOT FOUND SATI SFACTORY BY THE A.O. IN THE PRESENT CASE, ADMITTEDLY, APART FROM CERTAIN DOCUMENTS SEIZED AT THE TIME OF SEARCH AND 16 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. SEIZURE OPERATION AT THE PREMISES OF MR. SURESH CHA ND AGARWAL, THE ASSESSEE ACTUALLY WAS NOT FOUND IN POSSESSION OF ANY MONEY. MOREOVER, THE LETTER DATED 19 TH NOVEMBER, 2009 IS AN UNSIGNED DOCUMENT AND SEIZED FROM A THIRD PARTY. THEREFORE, NEITHER IT WILL HAVE ANY EVIDENTIARY VALUE NOR MUCH IMPORTANCE CAN BE ATTACH ED TO IT. MOREOVER, ASSESSEE HAS ALSO DISOWNED THE DOCUME NT. FURTHER, THOUGH THE DEPARTMENT HAS ALLEGED THAT THE ASSESSEE HAS ACCEPTED THE SIGNATURE IN THE RECEIPTS TO BE HIS BUT ON A PERUSAL OF THE STATEMENT RECORDED FROM ASSESSEE UNDER SECTION 131, IT IS VERY MUCH EVIDENT THAT WHILE EXPRESSING HIS IGNORANCE ABOUT THE CONTENTS O F THE RECEIPTS, WHAT THE ASSESSEE HAS STATED IS SIGNATURE IN THE RECEIPTS CLOSELY MATCHES HIS. HE NEVER STATED THAT IT WAS 100% HIS SIGNATURE. THOUGH, LEARNED D.R. SUBMITTED BEFORE US THAT MR. SURESH CHAND AGARWAL HAS MADE A STATEMENT BEFORE THE DEPARTMENT ACCEPTING THE PAYME NT OF RS.2.66 CRORES TO ASSESSEE AND HAS ALSO DECLARED IT AS HIS UNDISCLOSED INCOME, HOWEVER, ON PERUSAL OF RECO RD WE FIND, THIS FACT WAS NEITHER DISCUSSED BY THE A.O. O R BY LD. CIT(A) IN THEIR ORDERS. ALSO, THERE IS NOTHING ON R ECORD TO SUGGEST THAT SUCH STATEMENT OF MR. AGARWAL WAS EVER CONFRONTED TO ASSESSEE OR HE WAS ALLOWED TO CROSS- EXAMINE MR. AGARWAL. ON THE OTHER HAND, ON GOING THROUGH THE STATEMENT OF ASSESSEE UNDER SECTION 131 OF THE ACT, DURING THE POST SEARCH PROCEEDING IT IS AB SOLUTELY CLEAR, ASSESSEE CATEGORICALLY DENIED OF HAVING RECE IVED ANY THING IN CASH FROM MR.AGARWAL. EVEN, ACCEPTING THE 17 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. CONTENTS OF THE RECEIPTS TO BE TRUE, WHAT IT INDICA TES IS ASSESSEE AND HIS WIFE HAVE RECEIVED CERTAIN AMOUNT TOWARDS PART SALE CONSIDERATION FOR SALE OF THEIR IMMOVABLE PROPERTY TO MR. SURESH CHAND AGARWAL IN PURSUANCE TO AN AGREEMENT OF SALE. THEREFORE, AS TH E RECEIPT OF MONEY IS LINKED TO TRANSFER OF AN IMMOVA BLE PROPERTY, THE ONLY WAY IT CAN BE BROUGHT TO TAX, IF AT ALL, IS UNDER THE HEAD CAPITAL GAINS PROVIDED, TRANSFER I S COMPLETE IN ALL RESPECTS. UNDER NO CIRCUMSTANCES, I T CAN BE BROUGHT TO TAX UNDER SECTION 69A OF THE ACT, MUC H LESS UNDER SECTION 57 OF THE ACT AS PROPOSED BY LEARNED D.R. 13. HAVING HELD SO, NOW WILL PROCEED TO EXAMIN E, WHETHER THE AMOUNT ALLEGEDLY RECEIVED BY THE ASSESS EE FROM SHRI SURESH CHAND AGARWAL TOWARDS SALE OF IMMOVABLE PROPERTY CAN BE ASSESSED UNDER THE HEAD CAPITAL GAINS. FOR THIS PURPOSE, IT WILL BE RELEV ANT TO LOOK INTO SOME OTHER DOCUMENTS WHICH ALSO FORM PART OF THE SEIZED MATERIAL. AMONGST THEM IS A LETTER DATED 22.01.2010 (PROBABLY DATE IS WRONG) WHICH SPEAKS OF RETURNING THE AMOUNT OF RS.2,61,00,000 TO MR. SURES H CHAND AGARWAL BY ASSESSEE AND HIS WIFE. OF COURSE, THIS DOCUMENT IS AGAIN AN UNSIGNED ONE. THERE IS AN UNDERTAKING BY THE ASSESSEE AND HIS WIFE FOR RETURN ING THE AMOUNT OF RS.1,90,00,000 TO MR. SURESH CHAND AGARWA L. THERE IS ALSO A CANCELLATION DEED EXECUTED BETWEEN THE ASSESSEE AND HIS WIFE WITH MR. SURESH CHAND AGARWAL CANCELLING THE AGREEMENT OF SALE FOR SALE OF THE PR OPERTY. SALE CONSIDERATION MENTIONED IN THE AFORESAID CANCE LLATION 18 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. DEED IS RS.1,31,00,000. IT ALSO APPEARS THAT THE CANCELLATION DEED HAS BEEN SIGNED BY ALL THE PARTIE S. AS PER THE SAID CANCELLATION DEED, ONE OF THE REASON F OR CANCELLING THE AGREEMENT OF SALE IS, THE MARKET VAL UE OF THE PROPERTY IN THE MEANWHILE HAS GONE-UP TO RS.3,21,00,000. ONE OF THE CLAUSE IN CANCELLATION D EED ALSO SPECIFIES THAT IF THE PROPERTY IS SOLD FOR LES S THAN THE MARKET VALUE OF RS.3,21,00,000, THE VENDORS WILL AD JUST A MAXIMUM AMOUNT OF RS.15 LAKHS FROM THE AMOUNT RECEIVED BY THEM TOWARDS PART OF THE SALE CONSIDERA TION FROM MR. SURESH CHAND AGARWAL AND REFUND THE BALANC E AMOUNT TO HIM. FINALLY, THERE IS A RECEIPT DATED 04.10.2010 EXECUTED BY SHRI SURESH CHAND AGARWAL ACKNOWLEDGING RECEIPT OF AN AMOUNT OF RS.40 LAKHS F ROM ASSESSEE AND HIS WIFE. THUS, FROM THE AFORESAID DOCUMENTS FORMING PART OF SEIZED MATERIAL, IT IS CL EAR THAT THE TRANSACTION OF SALE OF PROPERTY BY THE ASSESSEE AND HIS WIFE TO MR. SURESH CHAND AGARWAL ULTIMATELY DID NOT MATERIALIZE. THIS IS FURTHER CORROBORATED FROM THE FACT THAT THE PROPERTY IN QUESTION WAS ULTIMATELY SOLD TO A T HIRD PARTY NAMELY MRS. B. SARADA KALYANI VIDE REGISTERED SALE DEED EXECUTED ON 30.04.2011 FOR A CONSIDERATION OF RS.145 LAKHS. IN FACT, SHRI SURESH CHAND AGARWAL IS A WITNESS TO THE AFORESAID REGISTERED SALE DEED. LEAR NED A.R. HAS ALSO BROUGHT TO OUR NOTICE THAT, ASSESSEE HAS D ECLARED SUCH TRANSACTION IN A.Y. 2012-2013 AND THE A.O. IN ASSESSMENT ORDER PASSED UNDER SECTION 143(3) HAS ACCEPTED THE CAPITAL LOSS SHOWN BY ASSESSEE. ON 19 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. CONSIDERATION OF AFORESAID FACTS, IT IS TO BE UNDER STOOD, THOUGH ASSESSEE MIGHT HAVE RECEIVED THE PART SALE CONSIDERATION OF RS.2.66 CRORES FROM MR. SURESH CHA ND AGARWAL, BUT THE SAID AMOUNT AUTOMATICALLY WILL NOT BECOME HIS INCOME UNLESS THE SALE IS FINALIZED. AT BEST, IT CAN BE TREATED AS ADVANCE RECEIVED BY THE ASSESSEE TOWARDS SALE OF HIS PROPERTY. THIS FACT IS FURTHER CORROBORATED FROM THE CANCELLATION DEED DATED 04.10 .2010 AND OTHER SEIZED MATERIAL INCLUDING THE UNDERTAKING WHICH INDICATE THAT THE ASSESSEE IS REQUIRED TO RET URN BACK THE MONEY RECEIVED FROM MR. SURESH CHAND AGARW AL. SEIZURE OF RECEIPT EXECUTED BY MR.SURESH CHAND AGAR WAL ACKNOWLEDGING RECEIPT OF RS.40 LAKHS FROM ASSESSEE TO A GREAT EXTENT PROVES SUCH FACT. THAT BEING THE CASE, CASH RECEIVED BY THE ASSESSEE FROM MR. SURESH CHAND AGAR WAL, CANNOT BE THE INCOME OF THE ASSESSEE AS THE ASSESSE E HAS TO RETURN BACK THE MONEY TO MR. SURESH CHAND AGARWA L SINCE THE TRANSACTION DID NOT MATERIALIZE. 14. READING OF THE ASSESSMENT ORDER AS WELL AS ORDER OF LD. CIT(A) GIVES AN IMPRESSION THAT DEPART MENT HAS SELECTIVELY RELIED UPON THE SEIZED MATERIAL WHI LE MAKING THE ADDITION. WHILE DEPARTMENT HAS RELIED UP ON THE UNSIGNED LETTER DATED 19.09.2010 AND THE RECEIP TS, IT HAS COMPLETELY IGNORED THE AGREEMENT OF SALE, CANCE LLATION AGREEMENT AND THE UNDERTAKING BY ASSESSEE AND HIS W IFE TO RETURN BACK THE MONEY TO MR. SURESH CHAND AGARWA L, RECEIPT EXECUTED BY MR.SURESH CHAND AGARWAL, WHICH WERE ALSO PART OF THE SEIZED MATERIAL. KEEPING ASID E FOR THE 20 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. MOMENT ASSESSEES CLAIM THAT HE NEVER RECEIVED THE AMOUNT OF RS.2.66 CRORES AND ALSO ASSUMING THAT THE CONTENTS OF THE UNSIGNED LETTER DATED 19.09.2010 AN D RECEIPTS ARE CORRECT, HOWEVER, ON CONSIDERATION OF THE ENTIRE SEIZED MATERIAL AS A WHOLE, THE SITUATION WH ICH EMERGES IS, THOUGH THE ASSESSEE MIGHT HAVE RECEIVED AN AMOUNT OF RS.2.66 CRORES FROM MR. SURESH CHAND AGAR WAL TOWARDS PART SALE CONSIDERATION OF THE PROPERTY BUT HE WAS SUPPOSED TO RETURN BACK THE MONEY TO MR. SURESH CHA ND AGARWAL ONCE THE TRANSACTION DID NOT MATERIALIZE AN D AGREEMENT OF SALE WAS CANCELLED. THEREFORE, THE AMO UNT OF RS.2.66 CRORES BEING A DEBT DUE TO MR. SURESH CHAND AGRWAL CANNOT BE TREATED AS INCOME OF ASSESSEE AND HIS WIFE. MOREOVER, IT IS NEITHER EXPECTED NOR BELIEVAB LE THAT INSPITE OF THE FACT THAT THE TRANSACTION FELL THROU GH AND PROPERTY WAS ULTIMATELY SOLD TO A THIRD PARTY, MR. SURESH CHAND AGARWAL WOULD HAVE GIVEN UP HIS RIGHT OVER SU CH A SUBSTANTIAL AMOUNT OF MONEY AND KEPT QUITE WITHOUT RECOVERING IT FROM THE ASSESSEE. ONE CANNOT VISUALI ZE SUCH A SITUATION AS IT IS BEYOND HUMAN PROBABILITY AND N ORMAL HUMAN CONDUCT. THEREFORE, EVEN ASSUMING THAT ASSESS EE MIGHT HAVE RECEIVED THE AMOUNT OF RS.2.66 CRORES FR OM MR. SURESH CHAND AGARWAL TOWARDS SALE OF PROPERTY, IT MUST BE EQUALLY TRUE THAT ASSESSEE HAS REFUNDED BAC K THE MONEY TO MR. SURESH CHAND AGARWAL ON CANCELLATION O F AGREEMENT OF SALE. RECEIPT EXECUTED BY MR. SURESH C HAND AGARWAL, COPY OF WHICH IS AT PAGE NO.23 OF THE PAPE R BOOK BEARS TESTIMONY TO THIS FACT. THEREFORE, THE AMOUNT IN 21 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. QUESTION CANNOT BE BROUGHT TO TAX EVEN UNDER THE HE AD CAPITAL GAIN AS THE SALE IS NOT COMPLETE. THUS, L OOKED AT FROM ANY ANGLE THE AMOUNT OF RS.1,33,00,000 IS NOT TAXABLE AT THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITION. THIS GROUND IS ALLOWED. 15. HOWEVER, BEFORE PARTING WE MUST OBSERVE , AS PER CANCELLATION AGREEMENT ASSESSEE AND HIS WIFE CA N RETAIN A MAXIMUM AMOUNT OF RS.15 LAKHS FROM THE ADVANCE RECEIVED FROM MR. SURESH CHAND AGARWAL, IF THE PROPERTY IS SOLD AT A PRICE LESSER THAN THE MARKET VALUE OF RS.3,21,00,000. ADMITTEDLY, AS PER REGISTERED SALE DEED ASSESSEE HAS RECEIVED CONSIDERATION OF RS.1,45,00,0 00 ON SALE OF THE PROPERTY IN QUESTION TO SMT. SARADA KAL YANI. THEREFORE, IF THE DEPARTMENT CAN ESTABLISH ON RECOR D THAT ASSESSEE, IN FACT, HAS RETAINED A PART OF THE ADVAN CE RECEIVED FROM MR. SURESH CHAND AGARWAL, SUCH AMOUNT CAN BE DEDUCTED FROM THE COST OF ACQUISITION IN TER MS WITH SECTION 51 OF THE ACT WHILE COMPUTING CAPITAL GAIN IN THE ASSESSMENT YEAR IN WHICH ASSET WAS TRANSFERRED. 16. IN VIEW OF OUR DECISIONS IN THE PRECEDING PARAGRAPHS ON THE MERITS OF THE ADDITIONS MADE BY A .O., THE OTHER GROUNDS, INCLUDING THE ADDITIONAL GROUND RAISED BY ASSESSEE ON THE LEGAL ISSUE OF VALIDITY OF PROCE EDING INITIATED UNDER SECTION 153C ARE OF MERE ACADEMIC INTEREST, HENCE NOT REQUIRED TO BE ADJUDICATED UPON . 22 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. 17. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PAR TLY ALLOWED. ITA.NOS.1788, 1789, 1790/H/2014, ITA.NO.1887 & 1888/H/2014 SMT. RADHIKA TALWAR 18. THE FACTS AND ISSUES INVOLVED IN THESE APPEALS OF THE ASSESSEE ARE MORE OR LESS IDENTICAL TO THE F ACTS AND ISSUES INVOLVED IN CASE OF HER HUSBAND MR. SARAL TA LWAR. IN THIS ASSESSEES CASE ALSO, A.O. MADE ADHOC DISALLOWANCE OF 50% OF THE EXPENDITURE INCURRED ON COMMISSION INCOME IN ALL THE ASSESSMENT YEARS, THOU GH, ASSESSEE FURNISHED DETAILS OF PERSONS TO WHOM PAYME NTS WERE MADE AND ALSO PAYMENTS WERE MADE IN CHEQUES. L D. CIT(A) CONFIRMED THE DISALLOWANCE WITH THE SAME REASONING AS WAS GIVEN WHILE CONFIRMING SIMILAR DISALLOWANCES MADE IN THE CASE OF MR. SARAL TALWAR. AS FACTS ARE MATERIALLY SAME, FOLLOWING OUR DECISION W HILE DECIDING SIMILAR ISSUE IN CASE OF MR. SARAL TALWAR AS CONTAINED IN PARA-6 OF THE ORDER, WE DELETE THE ADD ITION MADE BY A.O. IN ALL THE ASSESSMENT YEARS. ASSESSEE S GROUNDS ARE ALLOWED. 19. THE NEXT ISSUE WHICH ARISES FOR CONSIDERATION IS RELATING TO ADDITION OF RS.1.33 CRORES UNDER SEC TION 69A OF THE ACT FOR THE A.Y. 2009-2010. IDENTICAL ADDITI ON WAS ALSO MADE AT THE HANDS OF MR. SARAL TALWAR FOR THE VERY SAME ASSESSMENT YEAR. FACTS BEING MATERIALLY SAME, FOLLOWING OUR DECISION WHILE DECIDING SIMILAR ISSUE IN CASE 23 ITA.NO.1783 TO 1787/H/2014 & ITA.NO.1801 & 1802/H/2014 MR. SARAL TALWAR, HYDERABAD. OF ASSESSEES HUSBAND MR. SARAL TALWAR, AS CONTAINE D IN PARAGRAPHS NO. 12 TO 15 OF THIS ORDER, WE DELETE TH E ADDITION. GROUND RAISED IS ALLOWED. 20. IN VIEW OF OUR DECISION HEREINABOVE, THE LEGAL ISSUE RAISED BY THE ASSESSEE RELATING TO VALIDITY O F PROCEEDINGS UNDER SECTION 153C ARE OF MERE ACADEMIC INTEREST, HENCE NOT REQUIRED TO BE ADJUDICATED UPON . 21. IN THE RESULT, ALL APPEALS OF ASSESSEE ARE PAR TLY ALLOWED. 22. TO SUM-UP, ITA.NOS.1783, 1784, 1785, 1786, 1787/HYD/2014, 1801 AND 1802/HYD/2014 IN THE CASE OF MR. SARAL TALWAR ARE PARTLY ALLOWED AND ITA.NOS. 1788, 1789, 1790/HYD/2014, 1887 AND 1888/HYD/2014 IN THE CASE OF SMT. RADHIKA TALWAR ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07. 2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 22 ND JULY, 2015 VBP/- COPY TO : 1. MR. SARAL TALWAR, SOMAJIGUDA, HYDERABAD - 28. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82. 2. SMT. RADHIKA TALWAR, BANJARA HILLS, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82. 3. DCIT, CENTRAL CIRCLE-4, HYDERABAD. 4. CIT(A)-I, HYDERABAD. 5. CIT-(CENTRAL), HYDERABAD 6. D.R. ITAT A BENCH, HYDERABAD. 7. GUARD FILE