ACIT, Circle cc 15, New Delhi V. Alka Mendiratta , Delhi

ITA 1864/DEL/2021

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3468 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 13-02-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 05-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMIT GOEL; ADVV
• Keywords: Unexplained investment; Unexplained expenditure; Depreciation; Search and seizure; Salary income; Document seized; Corroborative evidences; Valuation report; Block assessment; Documents seized; Set aside
• Section: 131; 69; 132; 69C; 143(3); 133A; 153A; 69B; 64; 158BC; 113; 43; 13; 22; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Ms. Astha Chandra, Judicial Member ITA No. 1863/Del/2021 : Asstt. Year : 2016-17 ACIT, Central Circle-15, New Delhi-110055 Vs Yash Pal Mendiratta, House No. 10, Road No. 41, Punjabi Bagh, New Delhi-110026 (APPELLANT) (RESPONDENT) PAN No. AAIPM3927A CO No. 28/Del/2022 : Asstt. Year : 2016-17 Yash Pal Mendiratta, House No. 10, Road No. 41, Punjabi Bagh, New Delhi-110026 Vs ACIT, Central Circle-15, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAIPM3927A ITA No. 1864/Del/2021 : Asstt. Year : 2016-17 ACIT, Central Circle-15, New Delhi-110055 Vs Alka Mendiratta, House No. 10, Road No. 41, Punjabi Bagh, New Delhi-110026 (APPELLANT) (RESPONDENT) PAN No. AALMP5560E CO No. 25/Del/2022 : Asstt. Year : 2016-17 Alka Mendiratta, House No. 10, Road No. 41, Punjabi Bagh, New Delhi-110026 Vs ACIT, Central Circle-15, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AALMP5560E Assessee by : Sh. Amit Goel, CA & Sh. Pranav Yadav, Advv. Revenue by : Ms. Sapna Bhatia, CIT-DR Date of Hearing: 14.02.2024 Date of Pronouncement: 08.03.2024 ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 2 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals and the Cross Objections have been filed by the assessees against the orders of ld. CIT(A)-26, New Delhi dated 23.08.2021. 2. Common issues raised by the Revenue in ITA Nos. 1863 & 1864/Del/2021. In ITA No. 1863/Del/2021, following grounds have been raised by the Revenue: “1. "On the facts & circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 12,03,00,000/- made by AO on account of undisclosed investment u/s 69 r.w.s 115BBE of the IT Act 1961." 2. "On the facts and in the circumstances of the case, the CIT(A) erred by ignoring the fact that as per seized documents (copy of agreement) seized from the residence of Sh. Yashpal Mendiratta, the assessee has purchased the same property at and around the same period and thus, the CIT(A) was incorrect in considering the consideration of not sale Rs. 40,06,00,000/- as stated in the said incriminating document" 3. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the document based on which the addition was made was with respect to the house property purchased by the Appellant and was also found during the course of search in the case of Sh. Yashpal Mendiratta. The CIT(A) ought to have considered the circumstantial evidence." 4. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the assessee has not been able to adduce any evidence before the AO or even before the CIT(A) which could prove or justify the fall in the fair market value of the property by 40% within a short time span of 3-4 months. That on the facts and in the circumstances of the case, the CIT(A) failed to appreciate the fact that the house property with respect to which the incriminating document was seized was renovated/reconstructed by the assessee and thus, the contention of the assessee denying the ownership of such document as having left over at his place by unknown person is incorrect." 5. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the parties being sellers, ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 3 whose names have been stated in the incriminating evidence had in-fact sold the property to the assessee and thus, in view of the circumstantial evidence, the CIT(A) ought to have confirmed the addition" 6. "On the facts and in the circumstances of the case, the CIT(A) failed to appreciate that the addition was made by the AO on the basis of circumstantial evidence, which is the best evidence under Civil Laws. The deletion of sole addition of Rs. 12,06,00,000/- based on technicalities, if any, is contrary to probability the human and circumstantial evidence." 7. (a) The Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any/all grounds of appeal before or during the course of hearing of appeal.” 3. Common issues raised by the assessees in CO Nos. 25 & 28/Del/2022. In CO No. 28/Del/2022, following grounds have been raised by the assessee: “1. That the notice issued under section 153A of the Act is illegal, bad in law and without jurisdiction. 2. That the assessment order dated 19.03.2021 passed u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 ("the Act") by the Assessing Officer ("A.O.") and the additions made therein are illegal, bad in law, without jurisdiction and barred by time limitation. 3. That on the facts and circumstances of the case and in law CIT(A) has erred in not appreciating that addition of Rs. 12,03,00,000/- made by the AO is beyond the scope/jurisdiction of section 153A of the Act as there were no incriminating material belonging to Assessee found during the course of search on the basis of which addition is made. 4. That on the facts and circumstances of the case and in law CIT(A) has erred in not appreciating that photocopy of document does not constitute a valid evidence in the eyes of law and as such the addition made merely /solely on the basis of photocopy of document without determining the authenticity of the original document is bad in law. 5. That on the facts and circumstances of the case and in law CIT(A) has erred in not appreciating that no show cause notice proposing the addition under section 69 of the Act was issued by AO before passing the impugned assessment order. Hence, ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 4 the addition made is illegal, bad in law and without jurisdiction. 6. That on the facts and circumstances of the case and in law, provisions of Section 69 are not applicable as the basic conditions/ingredients of the said section are not fulfilled. 7. That the alleged approval u/s 153D of the Act is illegal, bad in law and without any application of mind and the Assessment order passed without obtaining valid approval is liable to be quashed. 8. That the assessment order passed without valid approval U/s 153D of the Act is illegal, bad in law and without jurisdiction and the CIT(A) has erred in law and on facts in upholding the same. 9. That without prejudice, the AO has wrongly and illegally applied the provisions of Section 115BBE and charged higher rate of tax. The amendment made in Section 115BBE in December 2016 is also not applicable to this case. 10. That the evidence filed and materials available on record have not been properly construed and judiciously interpreted by Assessing Officer, hence the addition/disallowance made are uncalled for.” 4. The assessee filed return of income on 05.10.2020 declaring income Rs.1,57,99,610/-. During the year under consideration, the assessee has derived salary income from M/s Globe Group of Companies, income from House Property and ‘Income from Other Sources’ which includes interest from Savings bank/interest on FDR/post office MIS. 5. During the course of search and seizure action at the residence of Shri Yashpal Mendiratta, at 10/42, Punjabi Bagh West, New Delhi, an agreement to sale of property with respect to 10/42, Punjabi Bagh West, New Delhi dated 15.07.2015 was found. 6. The Assessing Officer found that the above said property was owned by Sh. Praveen Kumar and Sunil Kumar who are ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 5 brothers and they have sold the property situated at 10/42, Punjabi Bagh West, New Delhi, to Mr. R.K. Chawla and Mr. Brij Kumar for a total consideration of Rs.40,06,00,000/-. The stamp for registration of document was purchased by Brij Kumar and others who are the 2nd party to the agreement. Further, it is observed that a sum of Rs. 10 crores were paid by the buyers to Praveen Kumar and Sunil Kumar on various dates out of which Rs. 8.50 crores were paid by way of cash and remaining Rs.1.50 Crores were paid through cheque to the owners by Sh. Brij Kumar. The agreement to sell is also having the receipts duly acknowledged on revenue stamps of payments made to Praveen Kumar and Sunil Kumar and are signed by all the four parties to the agreement namely, Sh. Praveen Kumar, Sh. Sunil Kumar, Mr. R.K. Chawla and Mr. Brij Kumar. 7. In short, it is the agreement to sale between the owners Sh. Praveen Kumar and Sh. Sunil Kumar as the first party and Sh. Brij Kumar and Sh. R. K. Chawla as a second party. For the sale of property at Punjabi Bagh measuring 1088 sq. yrds. for Rs.40.06 Cr. 8. The Assessing Officer has examined the agreement to sale dated 13.07.2015 which was seized from his residence during the course of search proceedings conducted at his residence on 20.07.2018. The Assessing Officer held that the underlying property as mentioned in the Agreement to Sale is the same which the assessee has purchased vide the sale deed dated 27.01.2016 and the sellers are also the same in both the Agreement to Sale and the Sale Deed. The price of the property as mentioned in the Agreement to Sale is Rs. 40.06 crores ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 6 whereas the price as per the sale deed is Rs. 16 crores only, for the same property at West Punjabi Bagh, New Delhi. The Assessing Officer held that agreement to sell mentions dealing in cash as well as cheque and the receipt of payments in cash are duly authenticated through signature on revenue stamp. Since the cheque payment and the cash payment have been made through the same document, therefore, the transaction amount of Rs.40.06 crores as mentioned in the agreement to sell cannot be denied. The Assessing Officer held that when the cheque number along with the cheque amount mentioned in the Agreement to Sell is being corroborated with the bank statement of Shri Brij Kumar then the cash portion mentioned in the Agreement to Sell also get authenticated thereby giving credence to the fact that the purchase price as per the Agreement to Sell is Rs. 40.06 crores only and that the actual consideration which has got exchanged for purchase of the property was infact Rs. 40.06 crores as against Rs. 16 crores for which Sale Deed has been executed. 9. The Assessing Officer further held that one of the buyers Shri R. K. Chawla is the same person whose name was appearing in the Agreement to Sell as one of the purchasers and in the Sale Deed as one of the witnesses and it is not difficult to observe here that his name has been put in the witness to the sale deed with a definite design so that no disputes arise in future. 10. Hence, based on all these circumstantial evidences, the Assessing Officer concluded that the sale consideration of the impugned property cannot be less than Rs.40.06 crores and ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 7 treated the consideration of the impugned property at Rs. 40.06 crores. 11. Aggrieved, the assessee filed appeal before the ld. CIT(A) who deleted the addition. 12. Aggrieved, the assessee filed appeal before the Tribunal. 13. During the hearing, the ld. DR reiterated the rationale of the Assessing Officer while treating the difference of amount of Rs.40.06 Cr. and Rs.16 Cr. 14. The submission of the ld. DR is reproduced as under: “During the course of hearing, exhaustive arguments were made with regard to the Department's Appeal in these cases. A reiteration of the arguments for the benefit of the Bench is being made as under: In this case, a photocopy of an 'Agreement to Sale' (ATS) was seized from the residential premises of the asssessee bearing address House No 10, Road No 42. Punjabi Bagh West, New Delhi during the course of search u/s 132 of the I. T. Act on 20.07.2018. The ATS was in respect of the same residential property in which the assessee was residing at the time of search. The ATS dated 13.07.2015 was between sellers (Praveen Kumar and Sunil Kumar) and buyers (Shri Brij Kumar and Shri R. K. Chawla) accompanied by receipts of cheque and cash payments duly signed by the parties involved. The total consideration for the purchase of this property as per ATS was Rs. 40 cr. Subsequently, the property was purchased by the assessee and his wife Smt. Alka Mendiratta, vide registered agreement dated 15.01.2016. One of the buyers in ATS, Shri R. K. Chawla was the witness to the registered deed for the purchase of property by assessee. The total consideration for the purchase of this property as ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 8 per registered deed was Rs. 16 crore. The NO has added Rs. 24 crore, being the difference amount, by establishing a link of the assessees to the ATS. Whereas, the assessee has contended that it has no relation with the document seized and that it is not aware how it came about at his residence. During the course of last hearing, with regard to the links that connect the assessee to the ATS, it was argued as under: 1. A copy of the Agreement to Sale was found and seized from the residential premises of the assessee. The ATS which was executed in July 2015, was seized after a gap of 3 years from the residential premises of the assessee. The contention of the assessee that it is not a party to the ATS and that it is not aware how it came to his premises is absurd considering the fact that it was seized from the assessee's premises after a gap of 3 years and after major renovation of the property for residential use by the assesee since its acquisition. Undoubtedly, the ATS has been kept/retained by the assessee at his premises even after 3 years. 2. Shri R. K. Chawla, who was one of the original buyers and signatory of the ATS was a Witness in the registered agreement for purchase of property by the assessee. As is evident from the dates of execution of ATS and the registered deed, there is a gap of only 6 months between the two. Shri R. K. Chawla, who was a buyer in the ATS, was a witness in the registered deed. The statement of Shri R. K. Chawla was recorded u/s 131 of the IT Act and the same is forming part of the ld. CIT(A) order. Sh Chawla has submitted that he is a relative of Praveen Kumar and Sunil Kumar, the ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 9 sellers of the property. He has denied that the signature in the ATS are his. However, his signature in the receipts and ATS are the same as in statement u/s 131 and the registered deed. Evidently, Shri R. K. Chawla was known both to the sellers and the assessee and acted as a link. 3. Shri Brij Kumar, the other buyer in ATS had banking transactions with assessee till the time of purchase of property by the assessee. The payments of cheque and cash to the sellers had been made by Shri Brij Kumar in the ATS. On page 10 of the Assessment Order, receipt forming part of the ATS is produced. As per the receipt, two cheque of Rs.75,00,000/-each were given in favour of the sellers. These payments were made by Shri Brij Kumar to Praveen Kumar and Sunil Kumar. However, in the statement recorded u/s 131 of the I.T. Act, he has denied any knowledge about the ATS. He stated that he had loaned the cheque amounts of Rs. 75 lakh each to Praveen Kumar and Sunil Kumar on which no interest had been charged. Evidently, this is a story that has been made up to cover the transaction. Further, the bank account statements of assesses, Yashpal and Alka Mendiratta, contain transactions with Shri Brij Kumar in the period around ATS and registered deed. A copy of the bank statement of assessee and his wife showing the financial transactions with assessees during the same financial year was submitted during the course of hearing. The assessee and his wife through their Joint A/e had made a payment of Rs.3 crore to Shri Brij Kumar on 07.12.2015, 2 days before making a payment of Rs. 2.5 crore to Shri Praving Kumar. Subsequently, an amount of Rs.1 crore was received from Brij Kumar on 16.01.2016. Evidently, Shri Brij Kumar was known both to the sellers and the assessee and was a connecting link. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 10 In view of the facts as mentioned above, it is evident that even though the name of assessee and his wife is not appearing in ATS, yet they are connected to the ATS through Sh. R. K. Chawla and Brij Kumar, who have been shown as buyers in ATS. The registered deed of the property was executed within 6 months of the ATS and financial transactions took place with erstwhile buyers and they also participated in the registering of the property. The surrounding circumstances clearly establish the link of assessee to the ATS. It is humbly submitted that while purchasing a property, the usual market practice is to pay the consideration in cash and in cheque. The ratio may vary, but is usually around 60% cash and 40% cheque. In the present case, the transaction amount in ATS was Rs. 40 crore, whereas it was registered for Rs. 16 crore by the assessee. As can be seen, the cheque amount of Rs. 16 crore is approximately 40% of the entire transaction amount of Rs. 40 crore. The AO has rightly added this difference amount of Rs. 24 crore equally between the assessee and his wife. The ld. CIT(A) has deleted the addition by disregarding this connection and holding Shri R. K. Chawla to be a weak link. However, he has not factored the banking transactions of the assessee with Shri Brij Kumar. In view of the facts as mentioned above, it is humbly submitted that the mesesses are connected with the ATS, wherein the original buyer, Shri R. K. Chawla, a relative of sellers was a witness in the registered deed and Shri Brij Kumar, the original buyer and a person who had made cheque cash payments in ATS received the cheque amount from assessee before registered deed. The Hon’ble Supreme Court in the cases of Sumati Dayal vs. CIT and CIT vs. Durga Prasad More had held that the courts must judge the ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 11 evidence before them by applying the test of human probabilities. It is humbly submitted that the present case merits the same attention. Why would the sellers of the property sell it at such a substantial loss, that too with the involvement of the original buyers. It is also submitted that in terms of provisions of section 292C of the IT ACT, as the document was found and seized from the possession of assessee, the presumption is that the same belongs to the assessee. The assessee has not brought any credible evidence to refute the same. Accordingly, it is humbly submitted that the addition made by the AO may be sustained.” 15. On the other hand, the ld. AR relied on the order of the ld. CIT(A). 16. We have examined the adjudication of the ld. CIT(A) which is as under: “10.1.1 From a bare perusal of the above ATS (i.e. Pages 10 to 19 of Annexure A1 Party BW), the following pertinent facts are observed: 1. That the ATS was found from the premises of the Appellant in photocopied form and not in original form. 2. That even though it was found from the premises of the Appellant (i.e. from Property bearing house no. 10, road no.42, West Punjabi Bagh, New Delhi), for proving possession it is necessary to show that the person concerned had the intentiopossessendi. There is nothing on record which would prove that the Appellant ever had any intention to execute it as it was even not a party to the agreement. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 12 3. That the Appellant and the spouse of the Appellant were not authors or even party in any capacity of ATS. 4. That the ATS was not even prepared or signed by any other person on behalf of the Appellant or the spouse of the Appellant or under their instructions. There is no such allegation even in the assessment order. 5. That the Appellant and the spouse of the Appellant had nowhere put their signatures in the ATS. 6. That the Appellant and the spouse of the Appellant were not even related to either any party in ATS or any witness to ATS. 7. That in the ATS, details of certain payments by way of cheques have been recorded. It is evident that there is no allegation of the AO that these cheques were issued by the Appellant or the spouse of the Appellant. 8. That the parties whose names are appearing as purported buyers in the purported incriminating document (i.e. Sh. Brij Kumar and Sh. R.K. Chawla) had refused to identify the purported agreement. 9. That the purported buyers in the ATS (i.e. Sh. Brij Kumar and Sh. R.K.Chawla) had expressly denied that they had never ever entered into any such purported agreement. They had denied having ever put their signature on the purported agreement. 10. That the one of party whose names is appearing as purported buyer in the ATS (i.e. Sh. Brij Kumar) had denied ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 13 that the money paid by him to the purported seller was on account of sale consideration towards property. 11. That there is no evidence that the persons whose names have been stated as witnesses in the ATS were ever examined by the Investigation wing or by the AO and they have confirmed that signatures of this ATS by A,B,C,D were put in their presence. 12. That with respect to the cash amounts stated in the ATS, there is no observation or allegation that the said cash amount reflected on the seized receipts had emanated out of the coffers of the Appellant or the spouse of the Appellant. 13. That there is no allegation of the AO that the purported incriminating document was executed in the presence of the Appellant or spouse of the Appellant, though not being a witness. 14. That the stamp paper on which the ATS was executed is neither in the name of the Appellant nor in the name of the spouse of the Appellant. 15. That there is no allegation that the original of the proposed ATS was ever ascribed to the Appellant. In-fact the AO in the assessment order had admitted that this agreement to sell was rescinded. This fact is emanating from the repayments made by the sellers on 10.12.2015 in cheque to one of the sellers, who had made all the cheque payments as per ATS. In the above factual position, it is observed that only a photocopy of a purported agreement to sell has been found, which has been ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 14 denied by the buyers expressively on oath in their statement recorded under Section 131 of the Act. The mere fact that the same property has been bought by the Appellant at a lesser amount, at a later date, cannot perse, on its own and without any corroborative evidence on record lead to any presumption or assumption of any unexplained investment. The fact that this property as referred in the said proposed ATS was purchased by the Appellant and the spouse of the' Appellant from the parties whose names have been recorded as sellers in the ATS. Thus, except for the mere coincidence of the property and the sellers being the same, there cannot be a presumption, without any corroborative evidence that the Appellant and his spouse had at-least made payments equivalent to the amount stated in the purported ATS between other parties, which was never executed. 10.2 From a conjoint perusal of the above statements on oath of both, i.e. Sh. Brij Kumar and Sh. R.K. Chawla, the following observations are made: a) That, both Sh. Brij Kumar and Sh. R.K. Chawla have specifically denied having any knowledge, about the existence of any agreement to sell entered by into by them with Sh. Sunil Kumar and Sh. Praveen Kumar. b) That, both Sh. Brij Kumar and Sh. R.K. Chawla have completely denied that they knew each other personally. c) That, both Sh. Brij Kumar and Sh. R.K. Chawla have specifically confirmed that had never entered into any transaction related to sale of property situated at 10/42, West Punjabi Bagh, New Delhi with Sh. Sunil Kumar and Sh. Praveen Kumar. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 15 d) That, both Sh. Brij Kumar and Sh. R.K. Chawla had specifically stated that they had never ever made any payments to Sh. Sunil Kumar and Sh. Praveen Kumar regarding the purchase of property situated at 10/42, Punjabi Bagh West, New Delhi. e) That, both Sh. Brij Kumar as well as Sh. R.K. Chawla had specifically stated that they had never ever signed the purported incriminating document (i.e. Pages 10 to 19 of Annexure A1 Party BW). f) That, Sh. Brij Kumar in response to question no. 34 of his statement and Sh. R.K. Chawla in response to question no. 14 of his statement, had specifically stated that he has nothing to do with the ATS. g) That, Sh. Brij Kumar in response to question no. 35 of his statement and Sh. R.K. Chawla in response to question no. 15 of his statement, had specifically stated that the signatures appearing on the ATS were not their signatures. h) That, Sh. Brij Kumar in response to question no. 21 of his statement, had confirmed to have advanced loans each of Rs.75,00,000/- Sh. Sunil Kumar as well as to Sh. Praveen Kumar some two years back (i.e. .2 years from the date on which his statement was recorded). In response to question no. 22 of his statement, he had further stated that the loans of Rs. 75,00,000/- each advanced by him Sh. Sunil Kumar as well as to Sh. Praveen Kumar were interest free loans and that Sh. Sunil Kumar as well as to Sh. Praveen Kumar had both repaid back the loans to Sh. Brij Kumar after 4-5 months from the date on which such loans were given to them. He ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 16 further stated that the loans were interest-free loan which were returned back to him through banking channels. i) That, Sh. Brij Kumar in response to question no. 23 of his statement, had stated that the loans as aforesaid were given by him to Sh. Sunil Kumar as well as to Sh. Praveen Kumar since their financial position was not good. Further, in response to question no. 24 of his statement, as aforesaid, Sh. Brij Kumar had duly stated that names of two other persons to whom such loans were given by Sh. Brij Kumar. j) That, Sh. R.K. Chawla in response to question no. 10 of his statement, had stated that he personally knows Sh. Sunil Kumar and Sh. Praveen Kumar. He stated that these both persons are his nephews and even the details of the city/town where each of them was residing has been stated. k) That, Sh. R.K. Chawla in response to question no. 16 of his statement, as aforesaid, had stated that he had signed the duly executed Sale deed entered into between the Appellant & the spouse of the Appellant as buyers and Sh. Sunil Kumar & Sh. Praveen Kumar as sellers with respect to Property bearing house no. 10, road no.42, West Punjabi Bagh, New Delhi. He stated that being uncle of Sh. Sunil Kumar and Sh. Praveen Kumar (i.e. Sh. Sunil Kumar and Sh. Praveen Kumar being the nephews of Sh. R. K. Chawla) he had signed the sale deed as a witness. Further he had specifically identified his signatures on the sale deed of the appellant/ spouse. 10.2.1 Thus, facts emanating out of statements recorded on oath of Sh. Brij Kumar and Sh. R. K. Chawla are that, (i) The proposed ATS was never signed by them. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 17 (ii) That the bank payments of Rs 1.5 Cr were made by Sh. Brij Kumar to Sh. Sunil Kumar and Sh. Praveen Kumar as loans (Rs.75lakhs each) and not as sale consideration for purchase of any property. In his case, it may be a called a self serving statement of Sh. Brij Kumar as these cheque nos. are mentioned in the ATS as well as in receipts seized. This can corroborate the fact that he may be hiding the facts about his signatures on ATS to avoid any tax implications in his case. It had been ascertained from the sellers that the amount of Rs 1.5 Cr taken by them from Sh. Brij Kumar had been repaid back on 10.12.2015 from their respective bank accounts, much before the execution of the sale deed of the appellant/his wife with these sellers. (iii) Sh. R. K. Chawla had claimed that it had not made any payment reflected in ATS. In the absence of any cheque payment, proportion to his proposed 25% share made by him in ATS, absence of his name as purchaser on stamp paper of ATS and the fact that the receipts issued by the proposed sellers do not bear his signatures, the cash portion paid by him cannot be established and only can be presumed provided the signature on ATS are proved to be of him. In these facts and discussion, it is observed that in the absence of original ATS, the forensic expert opinion for verifying their signatures on ATS to rebut their statements cannot be undertaken. The witnesses have not been examined by the AO or the investigation wing, to ascertain that it was witnessed by them, for placing signature of all the entities on the ATS. In the absence of it, their statements that they have not put signature on any ATS cannot be rebutted. However, other evidences can be evaluated to rebut this fact stated by both the proposed buyers. In the case of Sh. Brij Kumar, the verification of evidences of cheques paid by him as per ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 18 the agreement, his name on one of the loose document against figures of Rs. 4 Cr., reproduced in the assessment order and the fact that the stamp paper of ATS had been purchased in the name of Sh. Brij Kumar do prove that he was party to this ATS. However, there are no such evidences in the case of Sh. R.K. Chwla, except his signatures, which cannot be proved with any other evidence in case of denial of signatures on this agreement. Thus, in view of denial of his signatures on ATS, it cannot be established with admissible evidences that Mr. R.K. Chawla was a party to this agreement. Hence, in these facts & circumstances, the finding of the AO that Sh. R.K. Chawla was the common link between the ATS (as buyer) and Sale deed of the appellant (as witness) is a very weak link to establish. 10.3 The AO had completely ignored the evidences filed by the appellant regarding the registered Govt. Approved valuer report as well as the comparative registered sales deeds submitted by the appellant and contended in the remand report that the addition has been made only on the basis of value of property reflected in the photocopy of ATS belonging to third parties. Detailed discussion on this issue will be made in subsequent para, after considering the legal position and applying it to the facts of the case. 11. The first plea taken by the appellant is that the photocopy of the document is not an admissible evidence and no addition can be made on the basis of photocopy of the document, which pertains to third party. The appellant had relied on various judicial decisions on this issue. 11.1 In the case of Vikrant Dutt Chaudhary vs. Commissioner of Income-tax, Panchkula (Haryana) [2017] 88 taxmann.com 727 (Punjab & Haryana), it had been held as under: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 19 “The very use of the word ’material’ in section 143(3) clearly shows that the Assessing Officer is not fettered by the technical rules of evidence and the like and that he may act on material which may not, strictly speaking, be accepted as evidence in a court of law. Photostat copies of documents, in the absence of their original constitute material in the hands of the Assessing Officer if they are relevant for the purpose of assessment and if they are not successfully rebutted by the assessee." In view of the above decision wherein it is held that photocopies of documents do constitute "material", the plea of the appellant is rejected. However, the material is rebuttable and for use against the assessee it had to be corroborated with other evidences/statements. 11.2 It is observed the buyers C & D ( through statements) who are the parties to alleged agreement to sell, have denied the execution of agreement to sell. Sellers A & B have not been confronted on this ATS. The buyers C & D have denied to put the signatures on this agreement and the forensic of a photocopy of a document is not possible. Therefore only corroborative evidences can establish the existence of the ATS and its buyers. In view of it, once parties to alleged agreement to sell themselves have denied, any reliance placed on that agreement to sell otherwise is misplaced. The Hon'ble Delhi High Court in the case of CIT v. S.M. Agrawal reported in 293 ITR 43 has held as under: “12. It is well-settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or hand writing of that person, on such document by itself cannot prove the contents of the document.” ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 20 Therefore, the presumption of the transactions and values recorded in the photocopy of ATS are although material, it need to be corroborated by independent evidences to be used against the parties to it, as its contents have been denied. Even after proving the existence of this ATS between third parties, in the case of the appellant (who is not a party to this ATS), it is at the most an information that the proposed value of property mentioned therein is at Rs. 40.06 Cr between these set of buyers & sellers and for raising the presumption of this value of property, in the case of the appellant, it is required to be corroborated with other independent evidences. Further for making addition u/s 69, the evidence of unaccounted payment had to be brought on record. These aspects are discussed in subsequent para. 12. The appellant had contended that the show cause notice dated 02.03.2021 was issued to the Appellant requiring the Appellant as to why the addition of Rs. 12,03,00,000/- be not made under Section 69C of the Act, though the addition was finally made by the AO under Section 69 of the Act. 12.1 In this regard, it is observed that that a show cause dated 02.03.2021 was issued by the AO to the appellant, requiring the appellant to show cause as to why the addition of Rs.12,03,00,000/- be not made under Section 69C of the Act. The AO had, referred the provisions of Section 69C of the Act. Thus, even though there is a reference to a wrong section, it cannot be said that the Appellant did not get an opportunity to put forward the contentions and submissions and the relevant evidence before the AO. The Appellant had replied to this SCN, but the AO had made addition u/s 69 of the IT Act 1961. In the case of Maneka Gandhi vs. Union of India [on 25 January, 1978; 1978 AIR 597, 1978 SCR (2) 621], It was held by the Hon'ble Supreme Court as under: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 21 "It is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual, the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action." However, in the case of CIT vs Rajinder Nath [(1972) 85 ITR 296 Delhi], on the very issue of reference to a wrong section, the Hon'ble Delhi High Court had held as under: "It is a well settled principle of law that the exercise of a power would be referable to a jurisdiction which confers validity upon it and merely because the Income-tax Officer while proceeding to assess the assessed, has quoted a wrong section, the assessment cannot be rendered invalid”. Thus, from the conspectus of the above facts and legal position, it is observed that the Appellant was issued a specific and detailed show cause notice wherein except for mentioning a wrong Section (i.e. Section 69C), the AO had specifically referred to the expression "undisclosed investment". Also, the Appellant had furnished the submissions controverting the observations of the AO and contending that no "undisclosed investment" was made by the Appellant in the residential house property purchased by the Appellant during the above assessment year jointly with his spouse. Here it is pertinent to refer to the observations of Hon'ble Justice P.N. Bhagwati while rendering the judgment in the case of Distributors (Baroda) P Ltd. Vs. Union of India & Otrs., reported in 155 ITR 120 (SC) - larger bench decision as under: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 22 “To perpetuate an error is no heroism. To rectify it is the compulsion of the judicial conscience. In this, we derive comfort and strength from the wise and inspiring words of justice Bronson in Pierce v. Dela meter (A.M.Y. at page 18): "a judge ought to be wise enough to know that he is fallible and, therefore, ever ready to learn: great and honest enough to discard all mere pride of opinion and follow truth wherever it may lead :and courageous enough to acknowledge his errors". 12.2 The AO had rectified his error of SCN, by making final addition u/s 69 of the IT Act 1961.The powers of CIT(A) are co-terminus with the assessing officer and the appellant had been granted enough opportunities in appellate proceedings to make submissions on the addition made u/s 69, which are being considered in the adjudication of this issue. In view of the above discussion, the contention of the appellant is not acceptable and this plea of the appellant is, hereby, rejected. 13. The AO had applied the provisions of section 292C and section 69 for making the addition in the case of the appellant. 13.1 The section 292C, after the retrospective amendment w.e.f. 1975, made by the finance act 2007, read as under: "Presumption as to assets, books of account, etc. 292C. (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed— ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 23 (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub- section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132." 13.2 Section 69 read as under:- "Unexplained investments 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 24 him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.” 13.2.1 The salient features of Section 69 are as under: (a) Where in the financial year.......... the assessee has made investments. (b) Which are not recorded in the books of accounts, if any maintained by him for any source of income, And (c) The assessee offers no explanation about the nature and source of the investment, Or (d) The explanation offered by him is not, in the opinion of the Assessing Officer, Satisfactory, The value of investments may be deemed to be the income of the assessee of such financial year. This may be noted that the provisions under section 69 is a machinery provision and is a rule of evidence. 14. Let us examine the various judicial decisions on the issue of presumption u/s 292C & sections dealing with the deeming income u/s 69/69A/69B/69C and the legal position emerging from these decisions applied to the facts of the case of the appellant. (i) In the case of Smt. Harmohinder Kaur v. Deputy Commissioner of Income-tax, Central Circle-II, Jalandhar [2021] (supra), the ITAT had held that: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 25 "Section 69A, read with section 292C, of the Income-tax Act, 1961 - Unexplained money (Presumptive addition) - Assessment year 2009- 10 - Assessee sold a property and derived long-term capital gain - During search, diary of a third party was seized from residence of assessee - This diary had notings which showed an amount of Rs. 1.15 crores as sale consideration - Assessing Officer observed that in registered sale deed, total consideration was shown at Rs. 29.50 lakhs - By making presumption as per section 292C, he considered sale consideration shown in diary as actual consideration and made additions accordingly - There was nothing on record to suggest that assessee had underestimated value of property and violated circle rate as prescribed by government - Even diary admittedly did not belong to assessee, and noting of same were also not in handwriting of assessee - Furthermore, entry recorded in diary qua amount of sale was not confirmed from buyers of property - Whether since Assessing Officer had drawn presumptions only on basis of notings of diary without making independent exercise; and entry found in diary was without any corroborative evidence and had no authenticity, no additions could be made in assessee's income - Held, yes [Paras 11 and 13]" The facts of the case of the appellant are much stronger. In the above case, the fact was that the diary was found from the house of the appellant maintained by her husband wherein the higher sales consideration than the amounts in the sale deed was mentioned. In the case of the appellant, there is no evidence found relating to appellant to suggest that the purchase consideration of the property was higher. The seized ATS does not relate to the transaction of the appellant. (11) In the case of Dy. Cit- 2(1), Raipur (Cg) vs. Shri Chhaganlal Mundra, Raipur (supra) a diary was seized from the residence of the assessee and it was in the handwriting of the assessee. The diary ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 26 contained various figures against various expenses. The AO on the basis of presumption under section 132(4A) added Rs.8,06,14,288/- to the total income of the assessee as unaccounted expenditure u/s.69C of the Act. The CIT(A) deleted the addition by holding that the presumption section 132(4A) cannot be drawn with regard to the incurrence of the expenses by holding as under:- "11. It is clear that Section 69C is applicable (i) where the assessee has incurred any expenditure, and (ii) he offers no explanation or the explanation tendered as to the source is not satisfactory as regards the whole or part thereof. The whole or part of such unexplained expenditure would be construed as assessee's income of the financial year in which the expenditure has been incurred. I find that before invoking the provisions of Section 69C, it has to be proved beyond all shadows of doubt that the expenditure has been incurred as the words "in the opinion of the Assessing Officer" do not precede the phrase "an assessee has incurred any expenditure". The opinion of the A.O is material and relevant only with regard to the explanation of the appellant and not with regard to the incurrence of the expenditure. In the instant case, the A.O has not come across even a single bill or voucher or delivery challan to even indicate that the appellant incurred any expenditure as alleged by the A.O. It is not the case of the A.O that the parties whose name have been found recorded in the diary have confirmed having received the payments from the appellant even remotely or indirectly." The Hon'ble ITAT upheld the order of CIT(A). Applying the ratio of the above decision on the case of the appellant, the AO has not established that any investment over and above the consideration mentioned in the registered sale deed was made by the appellant. Therefore, the AO could not have drawn a presumption ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 27 that the appellant has made investment over and above the consideration mentioned in the registered sale deed. (iii) In the case of Smt. Kundan Singh vs. The ACIT, Central Circle- 25, New Delhi, ITA. No. 1797/Del./2015,during the course of search an agreement to sell in respect of certain land for the value of Rs.297.87 lacs was found. However, as per the registered sale deed these lands were purchased for Rs.31 lakhs and Rs.29 lakhs. The assessing officer made the addition on the basis of the agreement to sell on the ground that subsequently the transaction has actually took place, the parties to the agreement were same and even the cheque payment as per the agreement to sell was also reflected in the bank account of the assessee and the same was mentioned in the registered sale deed. The CIT(A) deleted all the addition except amount of Rs.50 lacs which was mentioned in the agreement to sell as the cash amount paid by the assessee to the sellers. On further appeal to ITAT by the assessee as well as the AO the ITAT confirmed the deletion of addition by the CIT(A) by holding that there was no evidence that the assessee has actually paid the consideration of Rs. 297.87 lacs as mentioned in the agreement to sell. With regard to addition of Rs. 50 lacs confirmed by CIT(A), the ITAT set aside the issue to the file of the AO to verify the contention of the assessee that the agreement to sell was never acted upon and there was to exchange of money of Rs. 50 lacs between the assessee and the seller for which the addition was confirmed by the CIT(A). It is observed that the facts of the case of the appellant are much stronger that the facts in the above case. In the aforesaid case, the ATS and registered sale deed was between the same parties i.e. the assessee and the sellers whereas, in the present case of the appellant, there is no ATS between the appellant and the seller. In the aforesaid case, there was mention of cash payment by the assessee to the seller in the ATS, whereas in the present case of the ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 28 appellant, there is no mention of any cash payment by the appellant. In the aforesaid case there was mention of cheque payments by the assessee to the seller which was found to be correct from the bank account of the appellant and inspite of that it was held that the addition on the basis of amount of property mentioned in the ATS could not have been made whereas in the present case of the appellant, in the ATS, no payment by the appellant is reflected and even he/spouse are not party to this ATS. (iv) The Hon'ble Delhi High Court in the case of CIT vs. Ved Prakash Choudhary (2008) 305 ITR 245 (Del.) held as under: "During the search conducted at the residential premises of the assessee, two memorandums of understanding were recovered. These memorandums were entered into between the assessee, R and M. In terms of the memorandum, the assessee had paid Rs.25 lakhs each towards part consideration for the purchase of agricultural land valued at Rs. 123.30 lakhs to R and M. The Assessing Officer concluded that denial by the assessee was only to escape payment of tax liabilities and added Rs.50 lakhs in the hands of the assessee under section 69 of the Income-tax Act, 1961. The Commissioner (Appeals) as well as the Tribunal held that there was not enough evidence to add the amount in the hands of the assessee. On appeal: Held, dismissing the appeal, that the assessee had stated that there was no transfer of money between the assessee, R and M and they had denied the receipt of any money from the assessee. In the face of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner (Appeals) as well as the Tribunal had come to the conclusion that there was no such material on record. The Assessing Officer relied on certain other transactions entered into by the assessee with R and M for drawing a presumption in respect of the transfer of money but the Tribunal rightly held that those were ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 29 independent transactions and had nothing to do with the memorandums of understanding. No substantial question of law arose." The facts of the case of the appellant are much stronger that the facts in the above case. In the aforesaid case, the MOU and registered sale deed was between the same parties i.e. the assessee and the sellers whereas in the present case of the appellant, there is no MOU or ATS between the appellant and the seller. In the aforesaid case, there was mention of cash payment by the assessee to the seller in the MOU, whereas in the present case of the appellant, there is no mention of any cash payment by the appellant. In the aforesaid case there was mention of cash payments by the assessee to the seller and in spite of this, it was held that once the buyers and sellers have denied about receipt of any such cash amount, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. In the present case of the appellant, there is neither any admission by the appellant nor the seller about exchange of any money for which the AO has made the addition. In fact, there is not even any seized document showing any cash payment, leave alone any other corroborative evidence to show that there was in fact transfer of money for which the AO has made the addition. (v) The Hon'ble Madras High Court in the case of CIT vs. P.V. Kalyanasundaram (2006) 282 ITR 259 (Madras) has held as under: "The burden of proving actual consideration in such transaction is that of the revenue. The Tribunal had given factual finding and, inter alia, held that the Apex Court in K.P. Varghese v. ITO [1991] 131 ITR 597 / 7 Taxman 13 held that the burden of proving actual consideration in such transaction is that of the revenue. The Assessing Officer did not conduct any independent enquiry relating ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 30 to the value of the property purchased. He merely relied upon the statement given by the seller If he would have taken independent enquiry by referring the matter to the Valuation Officer, the controversy could have been avoided. Failing to refer the matter was a fatal one. In view of the above, there was no error in the order of the Tribunal and required no interference.” The Hon'ble Supreme Court in the case of CIT vs. P.V. Kalyanasundaram (2007) 294 ITR 49 (SC) has confirmed the above Judgment of the Hon'ble Madras High Court by dismissing the Departmental Appeal. The AO has not discharged the burden in the case of the appellant that the actual consideration of the property was more that the value stated in the registered sale deed. The AO has not made any independent enquiry. He has merely relied upon the seized ATS which does not even figure the name of the appellant. In fact, the facts of the case of the appellant are much stronger than the facts in the aforesaid case. In the aforesaid case there was no independent valuation report available whereas in the present case, the appellant has submitted the valuation report of the independent valuer and also the comparative sale instances and the AO has not pointed out any discrepancy in these report/instances. (vi) The Hon'ble Kerala High Court in the case of CIT vs. Smt. K.C. Agnes (2003) 262 ITR 354 (Kerala) had held as under: "After considering the evidence and on the basis of the assessment order passed against the assessee, the case of the assessee that the property was purchased at the rate of Rs.8,000 per cent, had been accepted. Thus, the Tribunal allowed the appeal. The sale deed showed that the price was Rs.8,000 per cent while the agreement showed that the parties agreed to purchase the property at Rs. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 31 12,951 per cent. A receipt was also relied on in the form of a fetter to show that the property was agreed to be purchased at Rs. 12,951 per cent. When a document shows a fixed price, there would be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of the agreement, the sale deed is executed. But it is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale, none can come to the conclusion that the price mentioned in the sale deed is not correct. In the instant case, in the assessment of the purchaser, it was finally found that the amount was received only at Rs.8,000 per cent. Taking all these matters into consideration, the Tribunal held that the property was sold at the rate of Rs.8,000 per cent. Thus, the Tribunal, on the basis of the facts and circumstances of the case and on the appreciation of evidence, came to the conclusion that Rs. 12,951 was not the amount for which the property was sold. There is no rule that the amount shown in the receipt is the-actual amount paid. Accordingly, the amount stated in the sale deed was the correct amount unless there were circumstances to ignore the same. In the above view of the matter, the questions were answered in favour of the assessee and against the revenue." In the above case, it has been held that it may not be necessary that the consideration as mentioned in the ATS and final sale deed will be same. Where sale deed have been registered, the value stated therein cannot be disputed merely because some higher value was mentioned in the ATS unless it was proved that the ATS was actually ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 32 acted upon. The facts of the case of the appellant are much stronger that the facts in the aforesaid case. There is not even any ATS pertaining to the appellant. Even the seized ATS(pertaining to others), according to AO himself, was cancelled and the amounts exchanged between the parties in ATS till its cancellation were less than the amount of regd. sales deed of the appellant. (vii) The Hon'ble Punjab and Haryana High Court in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588 (P&H) had held as under: "Whether in view of settled principle that no oral evidence is admissible once documents contain all terms and conditions, sale consideration disclosed in sale deed in instant case was to be accepted and no oral evidence could have been adduced to contradict such sale consideration - Held, yes - Whether, thus, view taken by Assessing Officer as also confirmed by Tribunal was correct - Held yes." Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference in the case of the appellant w.r.t. value recorded in registered sale deed. There is no corroborative evidence brought on record by the AO to disregard the value stated in the registered sale deed. (viii) In the case of CIT vs. Provestment Securities (P.) Ltd. [2016] 65 taxmann.com 69 (Delhi), the Hon'ble Delhi High Court has held as under:- "14. At this stage it is necessary to refer to Section 69 of the Act, which reads as under:— "69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 33 explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year." 15. It is apparent from the plain language of Section 69 of the Act that in order for any addition to be made under Section 69 of the Act, the following conditions must be met: (a) It is established as a fact that the Assessee has made an investment; b) That the investment made is not recorded in the books of the Accounts, if so maintained; and (c) The Assessee offers no explanation as to the nature and source of investment made or the explanation offered by the Assessee is, in the opinion of the AO, not satisfactory. 16. Thus, first and foremost, AO must come to a conclusion that an Assessee had, in fact, made an investment. Once an AO finds that an investment has been made, he has to examine the Assessee's explanation as to the source of that investment. It is only in cases where the Assessee is unable to explain the source of the investment made that provisions of Section 69 of the Act can be applied to tax the value of the investment made. .................................. 19. In the circumstance, we are inclined to agree with the Tribunal that the question whether an investment had been made or not is a matter of fact and the same cannot be presumed." The ratio of the aforesaid decision is squarely applicable to the facts of the present case of the appellant. The AO has not been able to ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 34 establish through any evidence that the appellant had, in fact, made the investment for which the addition had been made the addition in the assessment order. Once this primary and basic condition of section 69 has not been fulfilled, as held by the Hon'ble High court in the above case, provisions of Section 69 of the Act cannot be applied. (ix) In the case of Ushakant N. Patel vs. CIT [2005 (12) TMI 63] wherein the Hon'ble Gujarat High Court had held as under:- "The Tribunal lost sight of the fact that section 69 of the Act opens with the words "Where in the financial year immediately preceding the assessment year, the assessee has made investments ..." Therefore, in the first instance it was incumbent upon the authority to establish that there were investments made by the assessee; that such investments were not recorded in the books of account maintained by the assessee; and that such investments had been made in the financial year immediately preceding the assessment year in question. Unfortunately, despite the Commissioner (Appeals) having recorded a categorical finding, the Tribunal has failed to appreciate the said finding and dealt with the same without giving cogent reasons. If the Tribunal found that the said finding was not correct, it was necessary for the Tribunal to have recorded reasons for reversing the same. The observation of the Tribunal that the difficulty as to financial year had to be finalized in accordance with the provisions and the date of search and seizure is too general and vague. It does not indicate anything. When the provision requires fulfillment of certain prerequisite conditions before the assessee can be called upon to explain, the Tribunal has to record its finding on this issue in a specific manner, because the case of the assessee all along has been ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 35 that in the first place the seized documents do not reflect any investments, in the second place, even if the entries could be treated as investments made by the assessee, it was further necessary to show that such investments have been made by the assessee in the financial year immediately preceding the assessment year and are not recorded in the books maintained by the assessee. The Tribunal's order does not record any finding. In fact, the Tribunal is hardly aware, it appears, as to what the requirements of section 69 are, and if it is aware, it has consciously chosen to ignore the same. It could not have done so in the face of the finding recorded by the Commissioner (Appeals) on this issue." The ratio of the aforesaid decision is squarely applicable to the facts of the present case of the appellant. The AO has not been able to establish that the appellant had, in fact, made the investment for which he has made the addition in the assessment order. Once this primary and basic condition of section 69 has not been fulfilled, as held by the Hon'ble High court in the above case, provisions of Section 69 of the Act cannot be applied. (x) In the case of CIT v. Lubtec India Ltd (2009) 311 ITR 175 (Del.) it had been held that it is quite clear that what is postulated in section 69C of the Income-tax Act, 1961, is that first of all the assessee must have incurred that expenditure---" The above decision, though, rendered in the context of provisions of section 69C will squarely apply to the case of the appellant as provisions of section 69 and 69C are similar and the only difference is that section 69 deals with investment whereas section 69C deals with expenditure. In section 69, the prerequisite is of making of investment whereas in section 69C the prerequisite is of incurrence of expenditure. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 36 (xi) In the case of Pr. Commissioner of Income Tax-Ill, Ahmadabad Versus Vivek Prahladbhai Patel 2015 (12) TMI 1287 - GUJARAT HIGH COURT the Hon'ble High Court had held as under:- “8. For the reasons stated hereinabove, this court is in complete agreement with the findings recorded by the Tribunal upon appreciation of the evidence on record and finds no reason to take a different view. In the opinion of this court, having regard to the evidence which has come on record, which reveals that there is an agreement to sell executed between the assessee and the sellers, which shows the price of the plots of land in question to be a much higher figure than the documented price and the fact that the sellers have stated that they have received higher amounts by way of on- money and have also shown receipt of such amount in their income tax returns, the circumstances do raise a suspicion. However, as held by the Supreme Court in Commissioner of Income tax v. Daulatram Rawatmull, (1964) S3 ITR 574 (SC), even if circumstances raise a suspicion, suspicion cannot take the place of evidence.” The facts of the case of the appellant are even stronger. There is neither any evidence of any consideration made by the appellant over and above the amount recorded in the registered sale deed nor there is any confession/admission by the sellers of having received any amount over and above the amount recorded in the registered sale deed. Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference. (xii) The Hon'ble Supreme Court in the case of P.R. Metrani vs CIT (Appeal (civil) 5673-5675 of 2002 dated 15/11/2006) held as under: "A presumption is an inference of fact drawn from other known or proved facts. It is a rule of law under which courts are authorized to ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 37 draw a particular inference from a particular fact. It is of three types, (i) "may presume", (ii) "shall presume" and (iii) "conclusive proof". "May presume" leaves it to the discretion of the Court to make the presumption according to the circumstances of the case. "Shall presume" leaves no option with the Court not to make the presumption. The Court is bound to take the fact as proved until evidence is given to disprove it. In this sense such presumption is also rebuttable. "Conclusive proof' gives an artificial probative effect by the law to certain facts. No evidence is allowed to be produced with a view to combating that effect. In this sense, this is irrebuttable presumption. The words in sub-section (4) are "may be presumed". The presumption under sub-section (4A) therefore, is a rebuttable presumption. The finding recorded by the High Court in the impugned judgment that the presumption under sub-section (4A) is a irrebuttable presumption in so far as it relates to the passing of an order under sub-section (5) of Section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in Section 132 or any other provisions of the Act which could warrant such an inference or finding. Presumption under sub-section (4A) would not be available for the purpose of framing a regular assessment. There is nothing either in Section 132 or any other provision of the Act to indicate that the presumption provided under Section 132 which is a self contained code for search and seizure and retention of books etc. can be raised for the purposes of framing of the regular assessment as well. Wherever the legislature intended the presumption to continue, it has provided so. Reference may made to Section 278D of the Act which provides that where during the course of any search under Section 132, any money, bullion, jewellery or other valuable articles ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 38 or things or any books of account etc. are tendered by the prosecution in evidence against the person concerned, then the provisions of sub-section (4A) of Section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents. This clearly spells out the intention of legislature that wherever the legislature intended to continue the presumption under sub- section (4A) of Section 132, it has provided so. It has not been provided that the presumption available under Section 132 (4A) would be available for framing the regular assessment under Section 143 as well." The ratio of the above decision is that presumption u/s 132(4A) is rebuttable. (xiii) Hon'ble Jurisdictional Delhi High Court vide its order dated 10.02.2016 in the case of Pr. CIT vs M/s Delco India Pvt. Ltd. reported at (2016) 2 TMI 607 (Del.) wherein it has been held as under: "17. Section 292C of the Act, inter alia, provides that where any books of accounts or other documents are found in possession or control of any person in the course of search under Section 132 or survey under Section 133A of the Act, it may be presumed that such books or documents belong to such person. Undisputedly, such presumption is rebuttable.” As per this judgment, the presumption u/s 292C and 132 are rebuttable. (xiv) The ITAT Mumbai Bench in the case of Sh. Pandoo P. Naig vs ACIT in ITA Nos. 7089 & 7364/Mum/2011 and ITA No. 6671 &. 6672/Mum/2012 (supra) vide order dated 24.06.2016 had held as under: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 39 "14. We find that the wording of the section 292C which supposes the presumption to be taken is qualified with the words 'may be', hence, it may or may not be presumed that such documents belong to the person searched. Firstly, the section uses the word "may presume' and not 'shall presume', hence the presumption of facts under section 292C is not a mandatory or compulsory presumption, but, a discretionary presumption; secondly, such a presumption is not a conclusive presumption but is a rebuttable presumption because it is a presumption of fact not a presumption of law.” The presumption u/s 292C and 132 are not presumption of law, but facts and are rebuttable. (xv) In the case of Vijay Kumar Aggarwal vs. ACIT, Central Circle- 12, New Delhi [No.- ITA No. 1182/Del/2011 dated 17/02/2017], the Hon'ble ITAT Delhi had held as under: "12. From the observations made in the aforesaid referred to orders, it is clear that the presumption of facts u/s 292C of the Act is not a mandatory or compulsory presumption but a discretionary presumption. Since, the word used in the said Section is "may be" and not "shall". Secondly, such a presumption is rebuttable presumption and not a conclusive presumption because it is a presumption of fact not a presumption of law.” Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference. The presumption against the appellant stood rebutted. (xvi) In the case of Ram Krishan Gupta vs. DCIT CC-4, New Delhi [No.- IT(SS)A.No.63/Del/2008 dated.- July 31, 2013]; 2013 (8) TMI 329 the Hon'ble ITAT Delhi has held as under: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 40 "Difference between amount shown in agreement to sale and sale deed - Block assessment - 158BC - Addition u/s 69 - Addition made on account of purchase of property - CIT upheld addition - Held that:- When the document shows a fixed price, there will be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of the agreement the sale deed was executed. But it is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale one cannot come to the conclusion that the price mentioned in the sale deed is not correct -There is no rule that the amount shown in the receipt was the actual amount paid.” The facts of the case of the appellant are even stronger. There is no receipt/agreement or any other evidence of any consideration made by the appellant over and above the amount recorded in the registered sale deed. Applying the ratio of the aforesaid decision on the present case of the appellant, the AO could not have drawn any adverse inference. (xvii) The Hon'ble A.P. High Court in the case of Smt. K.V. Lakshmi Savitri Devi v. ACIT in ITTA 563 of 2011, held as under: “We are of the view that the Tribunal has rightly held that the registered document date 21-8-2006 under which the respondent purchased the above property showed that only Rs. 65.00 lakhs was paid to the vendor by the respondent; that there was no evidence to show that the respondent had paid Rs. 1.00 crore in cash also to the vendor; that no presumption of such payment of Rs. 1.00 crore in cash can be drawn on the basis of an entry found in a diary/loose ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 41 sheet in the premises of C. Radha Krishna Kumar which is not in the respondent's handwriting and which did not contain the name of the respondent or any date of payment or the name of the person who made the payments. It rightly held that the Revenue failed to establish the nexus of the seized material to the respondent and had drawn inferences 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 enquiry 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 the said burden.” The facts of the case of the appellant are even stronger. There is no receipt/agreement or any other evidence of any consideration made by the appellant over and above the amount recorded in the registered sale deed. (xviii) In the case of ACIT vs. Rakesh Narang, 64 taxmann.com 332 (Del), the Court had held as under:- “4. We have heard the rival submissions and perused the relevant material on record. It is noticed that the extant addition was made by the AO u/s 69B of the Act. The relevant part of this section stipulates that: 'Where in any financial year the assessee has made investments or and the Assessing Officer finds that the amount expended on making such investments or .... exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 42 such financial year.' The pre-requisite conditions for making an addition under this section are that firstly, the assessee should have made investment and then the AO should find that the amount actually expended on making such investment is more than the amount recorded in the books of account. In other words, there should be some positive evidence with the AO to find that the assessee had, in fact, invested more amount than that actually recorded in the books of account. Such a finding by the AO can be based on some positive evidence about the making of more investment than that declared in the books of account. This section cannot be triggered on a mere presumption of the AO. When the legislature has unambiguously provided so, it is impermissible to substitute such a finding with a presumption about actual investment having been made by the assessee at a level higher than that depicted in the books of account. Only some positive and irrefutable evidence converts a presumption into a finding. Absent affirmative evidence, what remains is a mere supposition of unexplained investment etc., which cannot take the place of a finding of the AO towards unexplained investment.” (xix) In the case of CIT vs Dinesh Jain HUF, ITA no. 610/2012, Dated 19.10.2012 (Del), the Court had held as under:- "This Court in its order dated 28.9.2012 held that (a) Section 69B in terms requires the assessing officer to first prove that the assessee has actually expended an amount which he has not fully recorded in his books of account; (b) there has to be a finding that such amount was actually paid by the assessee over and above the declared consideration and the extra amount was not recorded in the assessees books of account; (c) the provisions of the Wealth Tax Act and Schedule III thereto cannot be imported into the provisions of Section 69B because the enquiry under the Wealth Tax Act is towards estimating the market value of the property which is different from ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 43 the actual price paid for the property; (d) Section 69B does not permit an inference to be drawn from the circumstances surrounding the transaction that the purchaser of the property must have paid more than what was actually recorded in this books of account, because such an inference could be very subjective and could lead to the taxation of notional or fictitious income contrary to the strict provisions of Article 265 of the Constitution of India as held by the Supreme Court in the case of KP Verghese \/s. ITO (1981) 131 ITR 597." (xx) In the case of CIT vs. Naresh Khattar (HUF) 261 ITR 664 (Del), the Court had held as under:- "8. There is no gainsaying that to invoke the provisions of section 69B of the Act, the burden is on the Revenue to prove that the real investment exceeds the investments shown in the books of accounts of the appellant. As observed by the Apex Court in K.P. Varghese v. ITO [1981] 131 ITR 597. to throw the burden of showing that there is no understatement of the consideration received, on the appellant would be to cast an almost impossible burden upon him to establish in negative, namely, that he did not receive any consideration more than what has been declared by him. Therefore, if the Revenue seeks to hold that the appellant has received more than what has been declared by him in respect of the assessment in question, the onus would lie on the Revenue to prove this fact by bringing some material on record.” (xxi) In the case of in the case of CIT vs. Kulwant Rai reported in 291 ITR 36, Delhi High Court had held as under: "12. Coming to the facts of the present case with regard to the addition of Rs. 17,00,892/- made by the Assessing Officer as undisclosed income of the Assessee for the block period, we may ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 44 refer to the findings of the Tribunal on this point and the relevant portion reads as under:- "On consideration of the matter we find that the addition has been made by the learned Assessing Officer on the basis of surmises and guess work. He has ignored the fact that the agreement was found in possession of the Assessee. ........The reasoning given by the learned Assessing Officer is entirely guess work. It is well settled legal position in respect of income tax assessment proceedings that although strict rules of Evidence Act do not apply to Income-tax proceedings, assessments cannot be made on the basis of imagination and guess work. Reference in this respect may be made to the judgment of Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd. vs. CIT(1954) 26 ITR 775 (SC) and a host of Supreme Court and High Court's judgments thereafter on the subject. We, therefore, direct deletion of the sum of Rs.17,00,892/- assessed by the Assessing Officer by way of half share of the Assessee in the alleged earnest money. 13. It is an admitted fact that the present Assessee had not signed the agreement in question and since the Assessee had not signed the agreement, no liability can be attributed qua that agreement towards the Assessee since he is not party to the agreement till he had signed the same. The mere fact that this agreement was found in the possession of the Assessee does not lead us anywhere. We find no hesitation in holding that this addition of Rs. 17,00,892/- made by Assessing Officer is based on surmises and guess work and on this point case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax, (1954) 26 ITR 775, may be referred to..." (xxii) The Hon'ble Delhi High Court in the case of CIT vs. Ved Parkash Chaudhary reported in 305 ITR 245 held that even where a ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 45 MOU was found then too in view of the denial of the parties to the MOU, it was held that, no addition is tenable in view of the non- availability of the corroborative evidence. Infact, in the above case, it was held by Their Lordships as under: "12. In so far as the present case is concerned, the Assessee had stated that in fact there was no transfer of money between him and Ravi Talwar and MadhuTalwar. On the other hand, Ravi Talwar and Madhu Talwar had denied receipt of any money from the Assessee. In the fact of these denials, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. Both the Commissioner as well as the Tribunal have come to the conclusion that there was no such material on record.” (xxiii) In the case of CIT vs. Mother India Refrigeration Industries (P.) Ltd -SC-155 ITR 711, the Hon'ble Supreme Court observed that- "10. It is true that proviso (b)to section 10(2)(vi) (Corresponding to section 32(2) of Income Tax Act 1961) creates a legal fiction and under that fiction unabsorbed depreciation either with or without current year's depreciation is deemed to be the current year's depreciation but it is well settled, as has been observed by this Court in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 2 SCR 603 at p. 606, that legal fictions are created only for some definite purpose and these must be limited to that purpose and should not be extended beyond that legitimate field. 11. Such being the purpose for which the legal fiction is created, it is difficult to extend the same beyond its legitimate field and will have to be confined to that purpose. It is, therefore, not possible to accept the contention of the counsel for the assessees that because of the legal fiction the unabsorbed carried forward losses should be ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 46 given preference not merely over the unabsorbed carried forward depreciation but also over the current year's depreciation. There is, thus, no modification of nor deviation from the basic and well recognized principle of commercial accountancy by the statute as is contended by the counsel for the assessees." (xxiv) The Hon'ble Supreme Court in the case of CIT vs. Moon Mills Ltd - 59 ITR 574 [larger bench of 3 judges] held that – “But the fourth proviso introduces a fiction that in case any insurance, salvage or compensation money received in respect of the said property exceeds the difference between the written down value and the scrap value, so much of the excess as mentioned therein will be deemed to be the profits of the previous year in which such money is received. Though in fact the said compensation represents a capital asset, to the extent mentioned in the proviso, the compensation is deemed to be the profits of the previous year in which such money is received. The proviso, therefore, introduces a fiction. What is not a profit in the previous year is deemed to be a profit in that year. The previous year is that year in which such moneys were received. The fiction is an indivisible one. It cannot be enlarged by importing another fiction, namely; that if an amount was receivable during the previous year it must be deemed to have been received during that year. So too, in the instant case, the fiction serves the purpose, if the said compensation was deemed to be the profits of the previous year or of the year in which it was received. This fiction cannot be enlarged by giving the expression "received" a technical meaning which it may bear in the mercantile system of accountancy.” ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 47 (xxv) In the case of ACIT vs. M/s Vatika Greenfield (P) Ltd. ITR 113 (AT) (Del), the court had held as under:- "21. A conjoint reading of the above decisions suggests that taxing statutes have to be interpreted strictly. In the deeming provision what is prescribed is to be deemed and deeming provision cannot be extended beyond the legislative scope. The presumption as envisaged in s. 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. If it is so, then unless some evidence/material is brought on record by the Revenue to say that what is stated in the seized document is not correct, state of affairs, the state of affairs stated in the impounded document has to be presumed to be true. It has already been observed that there is no material/evidence on record to suggest alleged excess payment of Rs. 1 crore received by the assessee from Raja Singh Sethi was in any way in the shape of income and not an unsecured interest-free loan. Therefore also, the argument of learned Departmental Representative that on the basis of s. 292C, the action of the AO should be upheld, cannot be accepted. Therefore, we find no material to interfere in the decision arrived at by the CIT(A) vide which impugned addition has been deleted." 15. The ratio-decidendi on section 292C emerging from the above judicial precedents is that, (a) The presumption of facts u/s 292C of the Act is not a mandatory or compulsory presumption but a discretionary presumption. Since, the word used in the said Section is "may be" and not "shall". ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 48 (b) Such a presumption is rebuttable presumption and not a conclusive presumption because it is a presumption of fact, not a presumption of law. 15.1 The above judgments of various courts had held that the presumption available in section 292C of the Act is a rebuttable presumption, Mere possession of documents perse does not warrant any addition on the basis of values in non executed documents. The AO cannot make any addition simply on the basis of this presumption but need to bring other corroborative evidences on record. 16. Conclusion: 16.1 Regarding the photocopy of the ATS and the receipts signed by the seller in context of this ATS, following facts are observed: (i) This ATS and the receipts are in no way connected to the appellant, as the transactions are between different parties mentioned in this ATS. The appellant is in no way connected with this ATS as discussed in Para 10 above. (ii) The AO had mentioned in the assessment order that this ATS was the rescinded and not executed beyond the payments of Rs. 10 crore as reflected in the seized photocopy of receipts. This fact is evident from the statement of Sh. Brij Kumar and evidences of return of cheque amounts mentioned in this ATS by sellers to him. (iii) The AO had initiated 153C proceedings in the case of sellers & buyers mentioned in ATS, thereby himself admitting that this agreement and the transactions mentioned therein belong/pertain to the persons mentioned in this ATS and not the appellant. In fact, on the basis of cash transactions reflected in the seized documents, the ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 49 addition of Rs 6 Cr had been made by the AO, in the case of Sh. Brij Kumar (one of the buyers in ATS) in the, 153C order passed on 06.08.2021. (iv) This property was later registered at value of Rs. 16 crores in the name of the appellant and his wife and no evidence of any payment proposed or made over & above this amount had been brought on record by the AO. However, the AO had presumed on the basis of the value mentioned in the ATS that the actual value of the property could be at Rs. 40.06 crores. 16.2 As discussed above, the presumption u/s 292C is rebuttable and the appellant had rebutted the value of property mentioned in the photocopy of ATS of third parties with following the evidences: (i) The agreements on stamp papers are private commercial agreements between two parties. The ATS is between buyers C & D with sellers A & B, whereas the registered sale deed is between other set of buyers E & F with sellers A & B. The price and the terms of agreement are specific between the parties and cannot be generally imported from the agreement between one set of parties with the agreement between the other set of parties. Further, the ATS was never eventually acted upon and the amount exchanged in this ATS before cancellation was lesser (Rs. 10 crores) than the amount mentioned in sale deed (16 crores). However, in this case the sellers and the property in question are same in the ATS between one set of buyers and registered sale deed with another set of buyers, therefore, some reference can be drawn from the contents of ATS. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 50 (ii) There is no adverse statement of any person connected with ATS or the registered sale deed, from where the value of property at Rs. 40.06 crore can be established independently. (iii) It is observed that as per the photocopies of seized documents, the payment of only Rs. 10 crores had been made by the buyers to the sellers of this ATS. There are evidences that the payment made in cheque had been returned back to the buyer after few months. There is no evidence on record, who have cancelled the agreement and under what circumstances it had been cancelled. As per the terms of agreement, the earnest money of Rs. 5 crore was either to be forfeited by sellers or it was to be returned double of this amount alongwith the other advances by the sellers, depending on the default of party. There is nothing on record, except the return of payment of Rs. 1.5 crore received by sellers in cheque from Shri. Brij Kumar as per the ATS. Thus, the penal terms of the ATS have not been complied either by buyers or sellers mentioned in this ATS, Further, as discussed in Para 10.2.1 above, it has been observed that the linkage of Sh. R. K. Chawla as buyer in ATS and as witness in registered sale deed of the appellant cannot be established in the given circumstances. It is observed that the value exchanged between the buyers and sellers as per seized photocopies of documents was just Rs. 10 crores, which is not more than the value of Rs. 16 crores as mentioned in sale deed. These facts cause doubts on the purpose of execution of this ATS and the value of property mentioned therein. (iv) The agreement to sell is a proposed contract between the parties and in this particular case; the appellant is not a ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 51 party to this ATS. In the situation where the ATS has been denied by all the parties to it and the contents & purpose of this partly executed ATS is not fully established, the presumption u/s 292C, for the fair market value of this property at Rs. 40.06 crores, as mentioned in the ATS cannot be taken on the face value. There could be a case where buyers of ATS might have negotiated at higher value than the market value of the property or some issues might have cropped up which led to the cancellation of this agreement at mutually agreed terms between the buyers & sellers of this ATS and the penal terms of the ATS were not invoked. At the most, this information of value of Rs. 40.06 crore mentioned in the agreement could have been the starting point of Investigation to bring on record evidences of a different value than mentioned in the sale deed of the appellant. (v) The value mentioned in the registered sale deed of Rs. 16 crore with the Govt. Authorities, without any evidence on record, of any other amount paid by the appellant/his spouse to the sellers and the confirmative affidavit of the seller, which have not been rebutted by the AO in the assessment order. These are admissible concrete evidences, rebutting the presumption of the value adopted by the AO as per the seized ATS belonging to third parties. (vi) The appellant had filed the valuation report of a Govt. registered valuer, wherein the property in question had been valued at Rs. 15,46,43,516/-. The circle rate of the property as per registered deed is at Rs.15,46,43,516/-. Further, the appellant had filed two comparable instances of the sale of property in the same area, which also reflect the similar price as mentioned in the sale deed of the appellant. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 52 Neither any evidence have been found during the search nor brought by the AO on record in the assessment proceedings, which shows that the appellant & his wife had made any payment over and above the amount reflected in sale deed. In the search on the appellant, no source of any unaccounted income generation by the appellant or his wife has been found. These are enough evidences to rebut the presumption of 292C used by the AO against the appellant on the basis of unexecuted photocopy of ATS seized to which the appellant or his wife not a party. With these evidences on record, the burden of proof shifts to the AO and he cannot adopt the value of property mentioned in the ATS to replace the figures of exchanged price as mentioned in the registered sale deed. Further, the provision of section 69 cannot be invoked against the buyers only on presumption, in the absence of any evidence of money actually paid over & above the registered sale deed had been brought on record. (vii) The above judgments of various courts had held that the presumption available in section 292C of the Act is a rebuttable presumption, mere possession of documents perse does not warrant any addition and the AO cannot make any addition simply on the basis of this presumption. In the case laws cited above, the courts have mentioned that presumption cannot be made for the value mentioned in ATS even if it belongs to the same parties, for the same property, where the sale deed is at lower value than mentioned in ATS. (viii) In order to invoke the provisions of Section 69 of the Act, the AO ought to have established: ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 53 a) That the Appellant had made investment during the above assessment year. Section 69 cannot be invoked on the basis of suspicion. It is for the AO to prove that assessee has made the payment over and above the amount mentioned in the purchase deed. b) That the said investment was not recorded in the books of accounts, if any, maintained by the Appellant for any source of income, & c) That the Appellant has either not offered any explanation as to the nature and source of investment OR the explanation offered by the Appellant is not satisfactory in the opinion of the AO. In the present case, the assessment order is completely silent as to how and in which manner the AO had invoked the provisions of Section 69 of the Act. There are no details in the assessment order of the unexplained investment added by the AO. No material has been brought on record, except for presuming probability that the appellant must have purchased the residential house property at- least for the amounts stated in the photocopy of the ATS. There is no other evidence on record that anything over and above, as mentioned in the registered sale deed, is paid by the appellant. (ix) From the above decisions at (xxiii) to (xv) in para above, following noteworthy principles follow- a) Every fiction created under law has a purpose and the meaning of expressions used in said deeming provision should be considered in ordinary sense, in which purpose, deeming provision is created serves the purpose. ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 54 b) If the technical meaning ascribed to the expressions used in legal fiction enlarges the original scope for which legal fiction was introduced, in such case, such (technical) meaning should not be considered. c) If the terms used in the deeming provision are defined somewhere else in the Act and if adopting such meaning would facilitate working of the Act in accordance with the object of such deeming provision, then such meaning should be adopted. However, the intent and purpose of bringing deeming provision cannot be allowed to be whittled down by bringing into play the meaning of terms used somewhere else in the Act by the legislature. d) There cannot be deeming within deeming while interpreting deeming provision. 16.3 The Hon'ble Apex Court decision in the case of K.P. Vargheser vs. ITO [1981] 131 ITR 587, had held that the burden of proving is that on the Revenue when there is allegation of understatement or concealment in the consideration shown. Further it had been held by Delhi High court in the case of ACIT vs. M/s Vatika Greenfield (P) Ltd (Supra) that the deeming provisions of the statue should be strictly interpreted and cannot be extended beyond the legislative scope. The presumption u/s 292C is rebuttable and the appellant had rebutted it with sufficient evidences. The AO had observed that Sh. R.K. Chawla is a common link between the ATS (as buyer) and Sales deed (as witness) of the appellant, however as discussed in para 10.2.1 above, it emerges that this link is very weak link to establish in the given facts & circumstances. The gustimate of the AO that these seized papers might have been kept by the appellant to complete the chain of property transactions. It is observed that these are photocopies of the documents, which are not admissible ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 55 evidences in the Court of Law. The unexecuted ATS, otherwise also, will not form part of the complete chain of transactions. Further no proof of any payment made by the appellant & his wife, over and above the amount mentioned in the registered sale deed had been found during the search on the appellant. As held in the case of CIT, Delhi-V vs. Provestment Securities (P.) Ltd (Supra), that for invoking section 69, there is precondition to bring evidence that the appellant had made investment, which had not been recorded in the books. In the case of Dy. CIT-2(1), Raipur (Cg) vs Shri Chhaganlal Mundra,, Raipur (supra), the ITAT had held that "I find that before invoking the provisions of Section S9C, it has to be proved beyond all shadows of doubt that the expenditure has been incurred as the words "in the opinion of the Assessing Officer" do not precede the phrase "an assessee has incurred any expenditure". The opinion of the A.O is material and relevant only with regard to the explanation of the appellant and not with regard to the incurrence of the expenditure. In the instant case, the A.O has not come across even a single bill or voucher or delivery challan to even indicate that the appellant incurred any expenditure as alleged by the A.O. It is not the case of the A.O that the parties whose name have been found recorded in the diary have confirmed having received the payments from the appellant even remotely or indirectly". In the case of Ram Krishan Gupta vs. DCIT CC-4, New Delhi, the ITAT Delhi had held that" But it is not necessary that the price stated in the agreement will be the price shown in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale one cannot come to the conclusion that the price mentioned in the sale deed is not correct -There is no rule that the amount shown in the receipt was the actual amount paid." In the case of Smt. Kundan ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 56 Singh vs ACIT (Supra) where the ATS of higher value and sale deed of lower value, were found for same set of buyers/sellers/property, there was mention of cheque payments by the buyer to the seller in ATS which was found to be correct from the bank account of the appellant and inspite of that it was held that the addition on the basis of ATS could not have been made in the case of buyer. In the case of CIT vs. Ved Prakash Choudhary (2008) 305 ITR 245 (Del.), the jurisdictional court had held that no addition can be made if there is no evidence found of any payment as per MoU(ATS) by the buyer to the seller, although the amount as written in MOU was higher. It was held that once the buyers and sellers have denied about receipt of any such cash amount, there ought to have been corroborative evidence to show that there was in fact such a transfer of money. In the case of ACIT vs. Rakesh Narang (Supra), the jurisdiction of High Court had held that "there should be some positive evidence with the AO to find that the assessee had, in fact, invested more amount than that actually recorded in the books of account. Such a finding by the AO can be based on some positive evidence about the making of more investment than that declared in the books of account. This section cannot be triggered on a mere presumption of the AO. When the legislature has unambiguously provided so, it is impermissible to substitute such a finding with a presumption about actual investment having been made by the assessee at a level higher than that depicted in the books of account. Only some positive and irrefutable evidence converts a presumption into a finding. Absent affirmative evidence, what remains is a mere supposition of unexplained investment etc., which cannot take the place of a finding of the AO towards unexplained investment." Similarly in the case of CIT vs. Kulwant Rai (Supra), the Jurisdictional Delhi High Court had held that " since the Assessee ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 57 had not signed the agreement, no liability can be attributed qua that agreement towards the Assessee since he is not party to the agreement till he had signed the same. The mere fact that this agreement was found in the possession of the Assessee does not lead us anywhere. We find no hesitation in holding that this addition of Rs. 17,00,892/- made by Assessing Officer is based on surmises and guess work. The Hon’ble Supreme Court in Commissioner of Income tax v. Daulatram Rawatmull, (Supra), had held that even if circumstances raise a suspicion, suspicion cannot take the place of evidence. In view of these facts and position of law it is observed that the circumstantial evidences in the case of non executed ATS of third party, cannot take the place of evidence in the case of the appellant. The AO had not brought any evidence of any payment made by the appellant/his wife over & above the amount reflected in the sale deed of the appellant/wife. The precondition to invoke section 69, that the appellant had made unaccounted investment in property, is not backed by any evidence on record of unaccounted payment by the appellant/his wife to the sellers. The appellant had rebutted the evidences found during the search with credible admissible evidences to establish the price of the property paid by him/his wife was as per the registered sale deed and thereafter the burden of proof shifts to the AO. As discussed above the courts have not agreed to presumption of 292C for invoking sections relating to deemed income/expenditure on the basis of higher value in ATS, where the seller/buyer/property are same and the amounts in ATS were much higher that the value in the sale deed, in the absence of any proof of payment made by the buyers to the sellers. The facts of the case of the appellant are on very sound footing as compared to the facts of these cases cited above. The Kerala High Court in the case of CIT vs. Smt. K.C. Agnes have even held that the value in ATS may be higher or lower than the value in sale deed and the amount stated in the sale deed was the correct amount unless there were ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 58 circumstances to ignore the same. The appellant is not a party to the ATS, therefore the presumption of value of property as mentioned in this unexecuted ATS between third parties & denied by all the parties cannot be taken against the appellant, without bringing independent evidences on this value of property to be adopted in the case of the appellant. Further, during the search, post search investigations & the assessment proceedings, no evidence of any amount paid over & above the value of Rs 16 Cr mentioned in the registered sale deed had been brought on record. In these facts and circumstances of the case, it is held that the AO had been not able to establish with evidences on record that the appellant had made any investment over and above the amount of Rs 8 Cr. (50% share of the appellant of total consideration of Rs. 16 crores) as mentioned in the registered sale deed. Accordingly, the addition of Rs 12.03 Cr (corresponding to his 50% share in the property) made by the AO u/s 69 r.w.s 115BBE, is not sustainable and is hereby deleted.” 17. In crux,  the agreement found and seized and the payments made thereon are no way connected to the assessee.  The Assessing Officer clearly accepted that the agreement was cancelled and not executed.  Assessment u/s 153C concluded in the assessment of one of the buyer in the agreement mentioned being taxed as per the cash transactions mentioned in the agreement. Hence, assessee cannot be held responsible to contents of the agreement for which he is neither signatory nor executor.  The property was registered by the assessee and no evidence of payment by the assessee is mentioned neither ITA Nos. 1863 & 1864/Del/2021 CO Nos. 25 & 28/Del/2022 Yash Pal & Alka Mendiratta 59 in the agreement nor on any material gathered during the search or post search enquiries.  Even the cheque payments made by the alleged buyer in the agreement have been returned back to the buyer. Hence, the assessee cannot be tied up with the agreement which is executed between four unrelated parties to the assessee.  The ld. CIT(A) has duly examined the evidences on record and the confirmative evidence of the seller and came to a conclusion that assessee cannot be taxed for the money which has not paid.  The ld. CIT(A) has also examined the comparable instances of the sale of property in the same area which is at parity with the value adopted and purchased by the assessee. 18. Hence, in view of the tangible material on record duly examined by the ld. CIT(A), we hereby affirm the decision of the ld. CIT(A). 19. Since, the appeals of the Revenue are dismissed, the Cross Objections filed by assessees are dismissed as infructuous. 20. In the result, the appeals of the Revenue are dismissed and the Cross Objections of the assessees are also dismissed. Order Pronounced in the Open Court on 08/03/2024. Sd/- Sd/- (Astha Chandra) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 08/03/2024 *Subodh Kumar, Sr. PS*