DCIT, UDAIPUR V. M/s. Pacific Industries Ltd, MUMBAI

ITA 186/JODH/2013

• Counselvise Citation: 18623314 RSA 2013
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGALCIT
• Assessee Lawyers: DEVENDRA MEHTA
• Keywords: Capital asset; Depreciation; Income from undisclosed sources; Search and seizure; Cost of acquisition; Fair market value; Capital receipt; Onus to prove
• Section: 133A; 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 186/JODH/2013 (A.Y. 2007-08) DCIT, CENTRAL CIRCLE-1, VS M/S. PACIFIC IND USTRIES LTD., UDAIPUR. 1302, DHEERAJ GAURAV HEIGHTS-1 , ADARSH NAGAR, ANDHERI (W), MUMBAI 400 065. PAN NO. AAACP7645R (APPELLANT) (RESPONDENT) ASSESSEE BY : SH DEVENDRA MEHTA. DEPARTMENT BY : DR. DEEPAK SEHGAL-CIT- DR. DATE OF HEARING : 05/07/2013. DATE OF PRONOUNCEMENT : 30/08/2013 O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE REVENUE FOR A.Y. 2007-08 IS DIR ECTED AGAINST THE ORDER OF LD. CIT(A), JAIPUR, DATED 28/01/2013. 2. BRIEFLY STATED, THE FACTS OF THE SOLE ISSUE INVO LVED IN THIS CASE ARE THAT DURING SEARCH OPERATION CONDUCTED U/S 132 OF T HE I.T. ACT 1961 (THE ACT FOR SHORT) ON 12/08/2009 AT THE RESIDENT IAL / BUSINESS PREMISES OF SHRI R.N. BHANDARI AND SHRI VINOD KATUW A, CERTAIN 2 INCRIMINATING EVIDENCE PERTAINING TO THIS ASSESSEE- COMPANY (IN APPEAL BEFORE US) WERE FOUND AND SEIZED. BOTH THESE PERSON S ARE PARTNERS IN A FIRM NAMELY M/S. CHETAK COMPLEX, BANSWARA. IN THE C ASE OF CHETAK COMPLEX A SURVEY U/S 133A WAS SIMULTANEOUSLY CONDUC TED ON 12/08/2009. 2.1 TO BE MORE SPECIFIC ON FACTS, DURING SEARCH PRO CEEDINGS AT THE RESIDENTIAL PREMISES OF SHRI R.N. BHANDRI DOCUMENTS ANNEXURE AS-1 TO AS-4 WERE FOUND AND SEIZED. LIKEWISE, FROM THE RESI DENCE OF SHRI VINOD KATUWA DOCUMENTS ANNEXURE A-1 TO A-3 WERE SEIZED. I N THEIR CASES ASSESSMENT PROCEEDINGS FOR A.YS. 2004-05 TO 2009-10 U/S 153A, WERE INITIATED AND ON VERIFICATION OF THE ABOVE NOTED SE IZED DOCUMENTS IT WAS FOUND THAT SOME OF THEM RELATED TO M/S. PACIFIC INDUSTRIES LTD., BANSWARA, THE PRESENT ASSESSEE, WHICH CONTAINED DOU BTFUL (DUBIOUS) TRANSACTIONS OF SUBSTANTIAL AMOUNTS. ACCORDINGLY NO TICE U/S 153C R.W.S. 153A WAS ISSUED TO THIS ASSESSEE ON 21/1/2011 AFTER RECORDING REQUISITE SATISFACTION VIDE ORDER SHEET DATED 19/09/2011, REQ UIRING THE ASSESSEE TO PREPARE A TRUE AND CORRECT RETURN OF ITS TOTAL I NCOME INCLUDING UNDISCLOSED INCOME IN RESPECT OF WHICH IT IS ASSESS ABLE FOR A.Y. 2007- 08. THE ASSESSEE COMPLIED BY FILING RETURN DISCLOSI NG NIL INCOME ON 30/11/2011. THIS COMPANY HAD FILED ORIGINAL RETURN ON 31/10/2007 DECLARING NIL INCOME (OR RS. 0 INCOME). 3 2.2 THIS ASSESSEE IS ENGAGED IN THE ACTIVITY OF MAN UFACTURING OF POLISHED GRANITE SLABS AND TILES AND POLISHED MARBL E SLABS AND TILES. THE ASSESSEE HAS DECLARED PROFIT OF RS. 5,96,19,747 /- AFTER CLAIMING DEPRECIATION ETC. AND AFTER SETTING OFF B/F BUSINES S LOSSES INCOME OF RS. 0 WAS DECLARED. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED DETAILS/COPIES OF DOCUMENTS, ACCOUNTS RELA TED TO THE ABOVE INCOME. 2.3 DURING THE COURSE OF SEARCH OF BHANDARIS AND KA TUWAS IT WAS FOUND THAT SMT. NEETA KATUWA AND SMT. ANITA BHANDAR I HAD PURCHASED PIECES OF LAND MEASURING 25.07 HECTARES AT A CONSID ERATION OF RS. 27,83,000/-. THIS LAND IS SITUATED IN THE VILLAGE B ADLIYA. THEY HAD PURCHASED THIS LAND FROM THE ASSESSEE. 2.4 DURING THE SAME PERIOD, SMT NEETA KATAWA AN D SMT ANITA BHANDARI HAS PURCHASED OTHER LANDS ALSO AS MENTIONE D BELOW:- SELLER SMT NEETA KATUA SMT ANITA BHANDARI DATE M/S PACIFIC INDUSTRIES 5 . 11 HECTARES 20.16 HECTARES 05/10/2006 M/S GOKULDHAM DEVELOPERS 5.17 HECTARES 1.18 HECTARES 05/10/2006 SHRI NARENDRA K NANAVATI 2.40 HECTARES 19/10/2006 TOTAL 12.68 HECTARES 21.34 HECTARES 4 2.5. OUT OF ABOVE HOTCH-POTCH OF LAND THE AREA ADME ASURING 2.4 HECTARES IS SITUATED ON UDAIPUR ROAD, WHICH WAS PUR CHASED FROM SHRI NARENDRA KUMAR NANAVATI AND IT HAS BEEN ESTABLISHED OUT OF THE SEIZED RECORDS/ DOCUMENTS IN CASE OF M/S CHETAK COMPLEX TH AT SUCH LAND WAS PURCHASED AT A CONSIDERATION OF RS. 25,00,000/-. RE GARDING PURCHASE COST OF WHOLE OF THE ABOVE LAND SMT NEETA KATUWA AN D SMT ANITA BHANDARI HAS SUBMITTED FOLLOWING DETAILS:- 'AT THE TIME OF COMPUTING THE SHORT TERM CAPITAL GA IN OUT OF SALES OF 158 BIGHA AGRICULTURE LAND IN A, Y. 2007-08, THE RE HAS BEEN CAUSED MISTAKE INADVERTENTLY AND THEREBY OUT OF SAL ES REALIZATION OF RS. 1,72,97,500/- AND RS. 1,07,500/-, TOTAL COST INVOLVED IN PURCHASE OF 208 BIGHA AGRICULTURE LAND RS. 57,98,47 0/- AND RS. 64,69,420/- TOTALING TO RS. 1,22,67,920/- WAS REDUC ED IN THE HANDS OF SMT. ANITA BHANDARI AND SMT. NEETA KATUWA AGAINST RELATABLE ACTUAL COST OF PURCHASE OF 158 BIGHA AGRI CULTURE LAND TO BE RS. 44,04,607/- AND RS. 49,14,270/-, TOTALING T O RS. 93,18,877/-. IT HAS RESULTED INCREASED SHORT TERM C APITAL GAIN OF RS. 29,49,043/- IS NOTHING BUT AMOUNTS TO THE RELAT ABLE COST TO THE REMAINING 53.1 BIGHA AGRICULTURE LAND. 5 2.6. THE A.O. MADE THE ADDITION OF RS. 45 LAKH S BY OBSERVING AS UNDER: FROM THE ABOVE REPRODUCTION OF SUBMISSION BY THE P URCHASERS OF THE ASSESSEE COMPANY'S LAND IT IS ESTABLISHED TH AT BOTH THE LADIES HAD PAID AN AMOUNT TOTALING TO RS. 1,22,67,9 20/- FOR PURCHASE OF TOTAL 34.02 HECTARES OF LAND AS DETAILE D IN ABOVE TABLE. OUT OF THIS 2.4 HECTARES HAS BEEN PURCHASED FOR TOTAL CONSIDERATION OF RS.25,00,000/- THUS THE REMAINING 31.62 HECTARES HAS BEEN PURCHASED FOR RS. 1,22,67,920/- L ESS RS. 25,00,000/-EQUAL TO RS. 97,67,920/-. THIS FIGURE OF RS.97,67,920/- HAS BEEN ASCERTAINED FOR ARRIVING AT PER HECTARE PURCHASE PRICE OF LAND NOT FALLING ON ANY ROAD. ON THE BASIS OF BEFORE MENTIONED FIGURE THE PURCHASE PRICE FOR 1 HE CTARE OF LAND COMES TO RS.97,67,920/- DIVIDED BY 31.62 HECTARES E QUAL TO RS. 3,08,916/- PER HECTARE. THEREFORE, SALES CONSIDERAT ION INCLUDING ON MONEY' IN CASH RECEIVED BY THE ASSESSEE COMPANY FOR ITS TOTAL LAND ADMEASURING TO 25.07 HECTARES IS RS. 3,08,916/ - MULTIPLY BY 25.07 EQUAL TO RS. 77,44,521/-. AS PER PURCHASE DEE D SUBMITTED BY SMT NEETA KATUWA AND ANITA BHANDARI THE ASSESSEE COMPANY HAS RECEIVED CONSIDERATION OF RS. 27,83,300/-, THER EFORE, THE ASSESSEE COMPANY MUST HAVE RECEIVED AN AMOUNT OF RS . 49,61,221/- IN CASH OVER AND ABOVE THE AMOUNT RECEI VED BY CHEQUES. KEEPING IN VIEW THE FACT THAT THE LAND UND ER CONSIDERATION WAS INITIALLY TO BE PURCHASED BY M/S GOKULDHAM DEVELOPERS AND THEY MUST HAVE ALSO GOT SOME 'BROKER AGE AND COMMISSION' FOR TRANSFERRING THE DEAL TO SMT NEETA KATUWA AND SMT ANITA BHANDARI, AN AMOUNT OF RS. 5,00,000/- IS ALLOWED AS 6 THEIR PROFIT AND EXPENDITURE IN THIS TRANSACTION RE CEIVED LESS BY THE ASSESSEE COMPANY. CONCLUSIVELY, AN AMOUNT OF RS . 45,00,000/- IS ADDED TO THE INCOME OF THE ASSESSEE COMPANY WHICH, IS IN NATURE OF CAPITAL RECEIPT HOWEVER NO I NDEXATION BENEFIT IS ALLOWED AS SAME HAS NOT BEEN CLAIMED BY ASSESSEE IN- ORIGINAL AS WELL AS RETURN U/S 153C. ADDITION OF RS. 45,00,000/- 2.7 ADDITIONS ON ABOVE COUNT ARE CONS IDERED AS CONCEALED INCOME OR FURNISHING OF INACCURATE PA RTICULARS OF INCOME U/S 271 (1)(C) OF THE I.T. ACT AND PENALTY PROCEEDING FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME U/S 271 (1)(C) IS BEING INITIATED SEPARAT ELY. 2.8. AGGRIEVED, THE ASSESSEE WENT IN APPEAL AND LD. CIT(A) HAS DELETED THE ENTIRE ADDITION BY HOLDING THAT THIS ADDITION I S NOT SUPPORTED BY ANY MATERIAL EVIDENCE. THE REVENUE HAS FILED APPEAL BEFORE THE APPELLATE TRIBUNAL. 7 2.9 WE HAVE HEARD BOTH SIDES WHO HAVE REITERATED TH EIR STAND WHICH FOR THE REVENUE IS COVERED UNDER ASSESSMENT ORDER A ND FOR THE ASSESSEE UNDER THE CIT(A)S ORDER. 2.10 AFTER COGITATING THE RIVAL STANDS IN THE LIGHT OF THE ABOVE STATED FACTS AND THE AVAILABLE EVIDENCE, WE HAVE FOUND THA T THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A), WHICH DESERVE S TO BE UPHELD. OUR REASONS FOR ARRIVING AT THE ABOVE CONCLUSION ARE TH AT APPARENTLY THERE IS NO DOCUMENTARY EVIDENCE TO INDICATE THAT SUCH AM OUNT WAS RECEIVED BY THE ASSESSEE-COMPANY. THE A.O. HAS BASED HIS CON CLUSION SIMPLY ON HIS PRESUMPTION THAT THEY MUST HAVE RECEIVED SUCH ON MONEY. DISCLOSURE MADE BY TWO LADIES FOR COMPUTATION OF CA PITAL GAINS IN THEIR CASES, THIS ASSESSEE WAS NOT GIVEN AN OPPORTUNITY T O EXPLAIN THESE FACTS OR TO CROSS EXAMINE THEM. IT WAS SUBMITTED BY THE L D. A.R. THAT THE ASSESSEE COMPANY ENTERED INTO AN ORAL AGREEMENT FOR SALE OF ITS 154.17 BIGHAS OF AGRICULTURAL LAND SITUATED AT BANSWARA TO M/S. GOKULDHAM DEVELOPERS IN FINANCIAL YEAR 2005-06. ONE OF THE TE RMS OF ORAL AGREEMENT WAS THAT THE ASSESSEE COMPANY WOULD TRANS FER THE SAID LAND TO EITHER M/S. GOKULDHAM DEVELOPERS OR ANY OTHER PE RSON AS PER ITS DIRECTION ON THE ALREADY AGREED PRICE OF RS.27,87,3 00/-. (REFER TO REPLY TO Q.NO.2 OF THE STATEMENT OF SHRI DEVENDRA MALIWAL , DIRECTOR OF THE ASSESSEE-COMPANY RECORDED U/S.131 ANNEXURE 'C'). ON THE BASIS OF 8 DIRECTION OF M/S. GOKULDHAM DEVELOPERS AS PER THE I MPUGNED ORAL AGREEMENT, THE ASSESSEE COMPANY TRANSFERRED THE SAI D AGRICULTURAL LAND BY FOUR SEPARATE REGISTERED SALE DEEDS DATED 0 5.10.2006 TO SMT. NEETA KATUWA AND SMT. ANITA BHANDARI, THE DETAILS O F WHICH ARE AS FOLLOWS: NAME OF THE PARTY AREA IN HECTARE AREA IN BIGHA CONSIDERATION (RS.) MARKET VALUE FOR LEVY OF STAMP DUTY (RS.) SMT. NEETA KATUWA 5.09 31.10 5,67,000 7,17,380 SMT. ANITA BHANDARI 0.90 5.10 99,000 1,26,850 SMT. ANITA BHANDARI 11.68 72.02 12,97,800 16,46,150 SMT. NEETA KATUWA AND SMT. ANITA BHANDARI 7.40 45.15 8,23,500 10,42,940 154.17 27,87,300 35,33,320 2.11 THE COPIES OF AFORESAID REGISTERED SALE D EEDS, WHICH WERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER, AND ALSO PL ACED BEFORE US FOR OUR PERUSAL AT ANNEXURE 'B'. 2.12 DURING POST SEARCH INQUIRIES PURSUANT TO SEAR CH AND SEIZURE OPERATION IN THE CASE OF SHRI R. N. BHANDARI AND SH RI VINOD KATUWA, BANSWARA, SHRI DEVENDRA MALIWAL, THE DIRECTOR OF TH E ASSESSEE COMPANY, WAS SUMMONED U/S.131 OF THE INCOME-TAX ACT , 1961. HE WAS CONFRONTED WITH PAGE NO.5 OF ANNEXURE A-2 FOUND & S EIZED DURING 9 SEARCH IN THE CASE OF SHRI VINOD KATUWA BY THE DEPU TY DIRECTOR OF INCOME-TAX (INV.), UDAIPUR. IN REPLY TO Q.NO.2 TO Q .NO.5 OF HIS STATEMENT RECORDED U/S.131 ON 03.11.2009, HE CAT EGORICALLY STATED THAT THE SAID AGRICULTURAL LAND WAS SOLD TO SMT. N EETA KATUWA AND SMT. ANITA BHANDARI AS PER DIRECTION OF M/S. GOKULD HAM DEVELOPERS BY THE ASSESSEE COMPANY AT THE CONSIDERATION STATED IN THE REGISTERED SALE DEED AND NO EXTRA PAYMENT OVER AND ABOVE THE STATED CONSIDERATION WAS RECEIVED. IT WAS SUBMITTED THAT THE COPY OF SA ID STATEMENT FOR OUR PERUSAL WAS FURNISHED AS ANNEXURE 'C'. THE LD. A.R. FURTHER SUBMITTED THAT FROM THE FACTS PLACED ON RECORD, IT IS EVIDENT THAT THE INCOME-TAX DEPARTMENT FAILED TO BRING ANY EVIDENCE TO SHOW THE RECEIPT OF ANY EXTRA CONSIDERATION BY THE ASSESSEE. EVEN SHRI VINO D KATUWA, FROM WHOSE PREMISES THE IMPUGNED ANNEXURE WAS FOUND, COM PLETELY DENIED ANY CASH PAYMENT TO THE ASSESSEE BUT CONFIRMED PAYM ENT OF RS.2,22,00,000/- TO M/S. GOKULDAM DEVELOPERS AND CO NSEQUENT TRANSFER OF LAND BY THE ASSESSEE TO SMT. NEETA KATU WA AND SMT. ANITA BHANDARI. IT WAS SUBMITTED THAT THE ADMISSION MADE BY A THIRD PARTY IN HIS STATEMENT RECORDED U/S.132(4) OR 131 OF THE INC OME-TAX ACT, 1961 IS BINDING UPON HIM IN HIS CASE ONLY AND THE SAME C ANNOT BE FOISTED UPON OTHER PARTIES IF THERE IS NO OTHER CORROBORATO RY MATERIAL TO SUPPORT THE TRUTHFULNESS OF THE ADMISSION. THE ABOV E PROPOSITION IS IN 10 ACCORDANCE WITH THE SETTLED POSITION OF LAW AND THE RELIANCE IS PLACED UPON THE FOLLOWING JUDGMENTS : A. C.I.T. VS. M. K. BROTHERS 163 ITR 249 (GUJ) B. A.C.I.T. VS. PRABHAT OIL MILLS 52 TTJ 533 (AHD) 2.13 IT WAS SUBMITTED THAT THE EVIDENCES OR INFORM ATION COLLECTED BY AN ASSESSING OFFICER IN THE COURSE OF ANY ENQUIRY O R OTHERWISE, CANNOT BE USED AGAINST THE ASSESSEE UNLESS SUCH EVIDENCES OR INFORMATION, WHICH ARE SOUGHT TO BE USED AGAINST THE ASSESSEE, A RE SUPPLIED TO THE ASSESSEE AND HE IS ALLOWED ADEQUATE OPPORTUNITY TO REBUT THE SAME. IF SUCH EVIDENCES CONSIST OF ORAL EVIDENCES, THE ASSES SEE SHOULD BE GIVEN AN OPPORTUNITY TO CROSS-EXAMINE THE PERSON CONCERNE D. IT WOULD BE THAT TESTIMONY WHICH HAS BEEN SUBJECTED TO CROSS-EX AMINATION, WHICH COULD BE USED AGAINST THE ASSESSEE. IN SUPPORT OF A BOVE CONTENTION, HE RELIED UPON THE FOLLOWING JUDGEMENTS : A. KISHINCHAND CHELLARAM VS. C.I.T. 125 ITR 713 (SC) B. ADDL. I.T.O. VS. PONKUNNAM TRADERS 102 ITR 366 (KER) C. ADDL. C.I.T. VS. MISS LATA MANGESHKAR 97 ITR 696 (BOM) D. MOLA BUX VS. I.T.O. 54 TTJ 1 (JP) E. VIRENDRAKUMAR SAKLECHA VS. D. C.I.T. 59 TTJ 785 (INDORE) F. I.T.O. VS. BALA PRASAD R. LOKMANYAWAR 18 TTJ 167 (PUNE) G. I.T.O. VS. BAJRANG OIL INDUSTRIES 12 ITD 631 (NAGPUR) H. AMAR SINGH VS. I.T.O. 54 ITD 375 (DEL) I. UDEYRAJA GOLIYA (HUF) VS. A.C.I.T. 64 ITD 21 MUM (TM) J - SILVER & ARTS PALACE VS. A.C.I.T. 52 ITD 493 (JAIPUR) 11 2.14 IN THE ASSESSEE'S CASE, THE VALUE OF CONSIDERA TION WAS ESTIMATED BY THE ASSESSING OFFICER ON THE BASIS OF SUBMISSION MADE BY SMT. NEETA KATUWA AND SMT. ANITA BHANDARI AS QUOTED IN PARA 8. 3 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS NEVER CONFRONTED BY THE ASSESSING OFFICER WITH THE IMPUGNED SUBMISSION DURING ASSESSM ENT PROCEEDINGS AS EVIDENT FROM THE ENCLOSED COPY OF NOTICE U/S.142(1) DT.14.12.2011 PLACED AS ANNEXURE 'D'. BECAUSE OF IT, THE ASSESSE E NEVER HAD ANY OPPORTUNITY TO FIND OUT THE BASIS ON WHICH SHORT TE RM CAPITAL GAINS ON SALE OF LAND AND COST RELATING THERETO WAS WORKED O UT BY SMT. NEETA KATUWA AND SMT. ANITA BHANDARI, DETAILS OF PAYEES W HETHER THE ASSESSEE OR ANY OTHER PERSON, MODE OF PAYMENT I.E. WHETHER CASH OR CHEQUE, DATE OF PAYMENT ETC. IT ALSO PREVENTED IT F ROM SEEKING OPPORTUNITY TO EXAMINE BOTH THE LADIES AND ASCERTAI N THE CORRECT STATE OF AFFAIRS. THE LD. A.R. RELIED ON THE FOLLOWING C ASE LAWS: 2.15 THE HON'BLE PUNJAB & HARYANA HIGH COURT HELD IN THE CASE OF CHIRANJILAL STEEL ROLLING MILLS VS. C.I.T (84 ITR 2 22) AS UNDER : IT IS OPEN FOR THE ASSESSING OFFICER TO COLLECT EV IDENCES FROM ANY SOURCE BUT IT IS HIS DUTY TO PUT IT TO THE ASSESSEE BEFORE MAKING IT THE BASIS OF HIS ASSESSMENT. IF TH E ASSESSEE DENIES THE INFORMATION COLLECTED BY THE AS SESSING OFFICER, THE ASSESSING OFFICER HAS TO BE SATISFY HI MSELF BY 12 MAKING INDEPENDENT INQUIRY FROM SOURCES CONSIDERED RELIABLE BY HIM AND DECIDE WHETHER INFORMATION PASS ED ON TO HIM IS TRUE OR NOT. IF AS A RESULT OF HIS OWN EN QUIRY HE COMES TO THE CONCLUSION THAT THE INFORMATION RECEIV ED BY HIM IS TRUE, HE IS AT LIBERTY TO ACT THEREUPON AFTE R DISCLOSING IT TO THE ASSESSEE AND AFFORDING HIM A R EASONABLE OPPORTUNITY OF REBUTTING IT. BUT HE HAS NO RIGHT TO BURDEN THE ASSESSEE WITH AN EXTRA AMOUNT OF TAX ON VAGUE INFORMATION GIVEN TO HIM WITHOUT HIMSELF VERIFYING ITS TRUTHFULNESS OR RELIABILITY. 2.16 FURTHER, IN THE ASSESSEE'S CASE, THE STATEM ENT OF SHRI VINOD KATUWA IN RESPECT OF PAGE NO.5 OF ANNEXURE A-2 SEIZ ED FROM HIS PREMISES, WAS RECORDED DURING SEARCH AND SEIZURE PR OCEEDINGS IN HIS CASE. SHRI VINOD KATUWA NEVER STATED IN HIS STATEME NT THAT HE MADE ANY CASH PAYMENT TO THE ASSESSEE ON ACCOUNT OF PURC HASE OF LAND. IN FACT, HE STATED THAT A SUM OF RS.30 LACS WAS PAID B Y CHEQUE TO PACIFIC INDUSTRIES LTD. AS REGARD 'RS.18 LACS PACIFIC PROFI T', IT WAS EXPLAINED CLEARLY BY SHRI VINOD KATUWA IN HIS STATEMENT THAT IT REPRESENTED REMUNERATION RECEIVABLE FROM M/S. GOKULDHAM DEVELOP ERS BY HIM TOWARDS SERVICES RENDERED BY HIM. IT HAD NOTHING TO DO WITH THE ASSESSEE. HE ALSO STATED THAT AFTER MAKING PAYM ENT OF RS.2,22,00,000/- TO M/S. GOKULDHAM DEVELOPE RS, M/S. GOKULDHAM DEVELOPERS GOT THE LAND TRANSFERRED FROM PACIFIC INDUSTRIES 13 LTD. IN THE NAME OF SMT. NEETA KATUWA AND SMT. ANITA BHANDARI. (PAGE NO.4, 5 & 6 OF NOTICE DT. 14.12.2011 ISSUED U/S.142(1) OF THE INCOME-TAX ACT, 1961 - ANNEXURE ' D'), COPY OF STATEMENT OF SHRI VINOD KATUWA WAS FURNISHED AS ANN EXURE 'E'. IT WAS STATED THAT, DESPITE SPECIFIC REQUEST MADE BEFORE T HE ASSESSING OFFICER, THE ASSESSEE WAS NOT GRANTED ANY OPPORTUNITY TO EXA MINE/ CROSS- EXAMINE SHRI VINOD KATUWA AND NO INCRIMINATING DOCU MENT OR EVIDENCE WAS FOUND EITHER DURING SEARCH AND SEIZURE OPERATIO N OR IN THE COURSE OF SUBSEQUENT PROCEEDINGS INDICATING RECEIPT OF ANY CONSIDERATION BY THE ASSESSEE OVER AND ABOVE THE STATED CONSIDERATIO N. 2.17 THE HON'BLE KERALA HIGH COURT HELD IN THE C ASE OF ADDL, INCOME- TAX OFFICER VS. PONKUNNAM TRADERS' (102 ITR 366) TH AT: '. . . WHEN AN INCOME-TAX OFFICER GATHERS MATERIALS FROM A SOURCE OTHER THAN THE RECORDS RELEVANT TO THE YEAR OF ASSESSMENT, HE HAS GATHERED MATERIALS ON THE BASIS OF ENQUIRY WITHIN THE MEANING OF SECTION 142(3) AND, THEREFORE, HE WILL BE BOUND TO GIVE AN OPPORTUNITY TO THE ASSESSEE IN RESPECT OF THE MATERIALS SO GATHERED. T HE FAILURE TO CONFORM TO THE PRINCIPLE OF NATURAL JUST ICE OF AUDI ALTERAM PARTEM WOULD MAKE A JUDICIAL OR QUASI- JUDICIAL ORDER VOID : ' 14 2.18 THE HON'BLE GUJARAT HIGH COURT HELD IN THE CASE OF LAXMAN BHAI S. PATEL VS. C.I.T. (327 ITR 290) AS UNDER: 'THE LEGAL EFFECT OF, THE STATEMENT BEHIND THE BACK OF THE ASSESSEE AND WITHOUT FURNISHING THE COPY THEREOF TO THE ASSESSEE OR WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATI ON AND THE ADDITIONS IF MADE, THE SAME IS REQUIRED TO BE DELET ED ON THE GROUND OF VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. ' 2.19 THE HONOURABLE DELHI HIGH COURT HELD IN THE CASE OF C.I.T. VS. DHARAM PAL PREM CHAND LTD. (167 TAXMAN 168) AS UNDE R : 'WITH A VIEW TO ASCERTAIN PERCENTAGE OF SILVER USED BY ASSESSEE IN ITS PRODUCT, THE ASSESSING OFFICER SENT SAMPLES OF PRODUCTS TO A RESEARCH INSTITUTE. ON BASIS OF REPORT OF SUCH INST ITUTE, TOTAL CONSUMPTION OF SILVER BY ASSESSEE WAS ESTIMATED. AS SESSEE FILED OBJECTIONS TO SAID REPORT AND SOUGHT PERMISSION TO CROSS-EXAMINE ANALYST. HOWEVER, ASSESSING OFFICER PAID NO HEED TO SUCH REQUEST AND PROCEEDED WITH ASSESSMENT ORDER. WHETHER SINCE CORRECTNESS OR OTHERWISE OF REPORT, ON BASIS OF WHICH ASSESSMEN T ORDER WAS PASSED AGAINST ASSESSEE, WAS ITSELF UNDER CHALLENGE , SAID REPORT COULD NOT BE AUTOMATICALLY ACCEPTED AND ASSESSING O FFICER COMMITTED VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E IN NOT PERMITTING CROSS-EXAMINATION OF ANALYST AND RELYING UPON HIS REPORT TO DETRIMENT OF ASSESSEE.' 15 2.20 IT WAS SUBMITTED THAT THE SEARCH AND SURVEY ACTION WERE CARRIED OUT BY THE INCOME-TAX DEPARTMENT IN THE CASE OF SHRI VINOD KATUWA AND NOT IN THE ASSESSEE'S CASE. THE INCRIMINATI NG DOCUMENTS WERE RECOVERED FROM HIS PREMISES/POSSESSION AND NOT FROM THE ASSESSEE'S PREMISES/POSSESSION. THE STATEMENTS RECORDED U/S. 1 32(4) AND/OR 131 OF THE INCOME-TAX ACT, 1961 WERE BINDING UPON THE P ERSON SEARCHED AND THEY SHOULD HAVE BEEN USED AGAINST THEM IN THEI R OWN ASSESSMENT. IF THESE PERSONS WERE UNABLE TO EXPLAIN THE TRANSAC TIONS RECORDED IN THE SEIZED MATERIAL, SUITABLE ACTION AS PER LAW SHO ULD HAVE BEEN TAKEN IN THEIR RESPECTIVE ASSESSMENTS. IF THE ASSESSING O FFICER INTENDED TO USE THESE EVIDENCE/STATEMENTS AGAINST THE ASSESSEE, HE SHOULD HAVE GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND REBUT THE SAME. HOWEVER, NOTHING OF THAT SORT WAS DONE BY HIM. IT W AS SUBMITTED THAT THE ASSESSEE CANNOT BE BURDENED WITH AN EXTRA AMOUN T OF TAX ON VAGUE INFORMATION AND IN THE ABSENCE OF ANY CONCRETE EVID ENCE. 3. AS REGARD SALE OF LAND AT SUBSTANTIALLY HIGHE R PRICE BY THE PURCHASERS TO RSWM LTD., IT WAS SUBMITTED THAT THE ASSESSEE SOLD THE LAND AT THE CONSIDERATION STATED IN THE SALE DEEDS WHICH WAS DRAWN ON THE BASIS OF ITS ORAL AGREEMENT WITH M/S. GOKULDHAM DEVELOPERS. IT RECEIVED ENTIRE CONSIDERATION AS PER SALE DEED, THE DETAILS OF WHICH HAVE BEEN STATED ABOVE. IF THE PRICE AT WHICH THE P URCHASERS WERE ABLE 16 TO SELL THE IMPUGNED LAND SUBSEQUENTLY AT A SUBSTAN TIALLY HIGHER VALUE, IT CAN, AT THE MOST, BE CALLED A BAD DECISION ON THE ASSESSEE'S PART AND IN THE ABSENCE OF ANY INCRIMI NATING DOCUMENTS OR EVIDENCE SUGGESTING RECEIPT OF EXTRA CONSIDERATION IN CASH OR OTHERWISE OVER AND ABOVE THE STATED CONSIDERATION, NO UNACCOUNTED INCOME CAN BE PRESUMED. EVEN THE STATEMENT OF SHRI VINOD KATUWA NO WHERE INDICATED THAT ANY ADDITIONAL CONSIDERATION O VER AND ABOVE THE STATED CONSIDERATION WAS EVER PAID TO THE ASSESSEE. ALSO, THERE WAS NO SIGNIFICANT DIFFERENCE BETWEEN THE MARKET VALUE AS PER THE OFFICE OF THE SUB-REGISTRAR AND THE CONSIDERATION MENTIONED I N THE SALE DEEDS. 3.1 THE HON'BLE SUPREME COURT HELD IN THE CASE O F K.P. VARGHESE VS. I.T.O. (131 ITR 597) THAT: IF THE REVENUE SEEKS TO BRING A CASE WITHIN SECTIO N 55(2), IT MUST SHOW NOT ONLY THAT THE FAIR MARKET VALUE OF TH E CAPITAL ASSET ON THE DATE OF TRANSFER EXCEEDS THE FULL VALU E OF THE CONSIDERATION BUT ALSO ESTABLISH THAT THE CONSIDERA TION HAS BEEN UNDERSTATED AND THE ASSESSEE HAS ACTUALLY RECEIVED MORE THAN WHAT IS DECLARED BY HIM. 3.2 THE HON'BLE DELHI HIGH COURT HELD IN THE CAS E OF C.I.T. VS. NAVEEN GERA (328 ITR 516) THAT 17 IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE ACTUAL CONSIDERATION AS PER AGREEMENT HAS TO BE ACCEPTED A ND NO ADDITION CAN BE MADE IN THE CASE OF BUYER BECAUSE O F DIFFERENCE BETWEEN STAMP DUTY VALUATION OF THE PROPERTY AND AC TUAL CONSIDERATION AS PER THE AGREEMENT. THE HONOURABLE DELHI HIGH COURT HELD IN THE CASE OF C.I.T. VS. SMT. SURAJ DEV I (328 ITR 604) THAT THE PRIMARY BURDEN OF PROOF TO PROVE UNDERSTATEMENT OR CONCEALMENT OF INCOME IS ON THE R EVENUE AND IT IS ONLY WHEN SUCH BURDEN IS DISCHARGED THAT IT W OULD BE PERMISSIBLE TO RELY UPON THE VALUATION GIVEN BY THE VALUATION OFFICER.................... MOREOVER, NO EVIDENCE MUCH LESS INCRIMINATING EVIDE NCE WAS FOUND AS A RESULT OF THE SEARCH TO SUGGEST THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE CONSIDERATION M ENTIONED IN THE REGISTERED PURCHASE DEED. NO ADJUSTMENT ON A CCOUNT OF SALE CONSIDERATION HAS BEEN MADE IN THE CASE OF THE SELLER. 3.3 CONSIDERING THE ABOVE FACTS AND LEGAL POSITIO N, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. A.R. AND DECISIONS RELI ED UPON. ACCORDINGLY, WE CANNOT ALLOW THIS GROUND AND DISMISS THE SAME. 18 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT BY ORDER 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR