Manav Singla, Chandigarh V. DCIT, Chandigarh

ITA 229/CHANDI/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6698 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Document seized; Deemed to accrue or arise in india; Cost of acquisition; Documents seized
• Section: 69C; 69B; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH , ! . .., # $, %& BEFORE: SH. SANJAY GARG , JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMB ER ./ ITA NO. 229/CHD/2013 ( !) / ASSESSMENT YEAR : 2006-07 MANAV SINGLA H.NO. 244, SECTOR 16-A CHANDIGARH THE DCIT, CENTRAL CIRCLE-1 AYAKAR BHAWAN, SECTOR-17-E CHANDIGARH ./ PAN NO: AUKPS1017R / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI. SUDHIR SEHGAL / REVENUE BY : SMT. RENU AMITABH ! ' # / DATE OF HEARING: 14/02/2019 $%&'() # / DATE OF PRONOUNCEMENT : 07/05/2019 %*/ ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)(CENTRAL), GURGAON DT. 17/12/2012. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THAT THE ORDERS OF THE COMMISSIONER OF INCOME TAX ( APPEALS)(CENTRAL) ARE CONTRARY TO LAW AND THE FACTS OF THE APPELLANTS CA SE. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (CENTRAL) H AS ERRED IN CONFIRMING AN ADDITION OF RS. 45,58,000/- AS DEEMED INCOME OF THE ASSESSEE UNDER SECTION 69B OF THE INCOME TAX, ACT, 1961 AND ALSO INCOME OF RS. 13,55,000/- ASSESSED U/S 154 BY THE ASSESSING OFFICER U/S 69B. 3. FIR THESE AND OTHER REASONS THAT MAY BE URGED AT TH E TIME OF HEARING THE APPELLANT PRAYS FOR RELIEF. 3. DURING THE SEARCH THE DOCUMENTS MARKED PAGE 20 OF ANNEXURE D-8 WAS FOUND WHEREIN THE HANDWRITING OF THE ASSESSEE HAS S HOWN NOTING PERTAIN TO TWO PLOTS NAMELY, PLOT NO.9 FOR AN AMOUNT OF RS. 33,56,050/- + 5,34, 907/- = RS. 38,91,557/- PLOT NO. 55 FOR AN AMOUNT OF RS. 26,80,250/- + RS. 8,20,836/- = 35,91,557/- THE SAME WAS ALSO REFLECTED ON PAGE NO. 103 OF ANNE XURE D-4 WHICH IS SIMILAR THE ABOVE ENTRIES OF RS. 33,56,050 AND RS. 26,80,25 0/-. 2 4. THE ASSESSING OFFICER CONCLUDED THAT THE FIGURES AS MENTIONED IN THE DIARY WERE NOT ROUGH FIGURES BUT WERE SPECIFIC NOTING AS FIGURES BEEN METICULOUSLY MENTIONED WITH FINAL RUPEE COUNT AND THEREFORE, AD DED THE SAME TOWARDS THE INCOME OF THE ASSESSEE. 5. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFI CER THAT THE DOCUMENTS UNDER REFERENCE REFLECTED THE ESTIMATED MARKET PRIC E OF THE PLOTS OF LAND. AS FOR THE HANDWRITING, IT WAS STATED AS HIS, SUBMITTED TH AT THE CONTENTS OF THE ENTRIES RELATED TO COST OF CONSTRUCTION AND THE FIGURE OF R S. 5,34,907/- PERTAINED TO COST OF CONSTRUCTION OF PLOT NO.9 AND RS. 8,20,836/-.AS THE COST CONSTRUCTION OF PLOT NO 55. 6. DURING THE ARGUMENTS BEFORE US, THE LD. AR REITE RATED THE SUBMISSIONS TAKEN BEFORE THE LD. CIT(A) WHICH ARE AS UNDER: 'THE ASSESSEE DURING THE SAID PERIOD WAS STUDYING I N THE FINAL YEAR OF B.TECH IN INDO GLOBAL COLLEGE. THE ASSESSEE AFTER THE COLLEGE HOURS GOT INVOLVED IN THE MARKET SURVEY OF REAL ESTATE AS HE HAD NO EARLIER E XPERIENCE IN THE LINE. THE ASSESSEE DURING THE YEAR UNDER REFERENCE PURCHASED TWO PLOTS IN FEB., 2006 PLOT NO 55 FOR A PRICE OF RS 6,18,000/- AND PLOT NO 9 FO R A PRICE OF RS 7,20,000/- AND SUBSEQUENTLY CONSTRUCTION WAS DONE ON THE SAID PLOT S. DURING SEARCH OPERATIONS A HAND WRITTEN DOCUMENT AT PAGE NO 20 OF ANNEXURE D-8 WAS SEIZED. THE SAID DOCUMENT IS WRITTEN IN THE HANDWRITING OF THE ASSESSES AND REFLECTS ESTIMATED MARKET PRICE OF THE PLOTS PU RCHASED BY THE ASSESSEE. DURING THAT PERIOD THERE WAS A SPURT IN THE MARKET IMMEDIATELY AFTER THE PURCHASE OF THE SAID PLOTS. THE ASSESSEE IS NOT AN EXPERT ACCOUNTANT. HE WAS TRYING TO FIND OUT THE MARKET PRICE OF THE PLOT PLU S CONSTRUCTION EXPENSES FOR THE PURPOSES OF DISPOSING OFF THE CONSTRUCTED PLOTS. TH E SAID PLOTS WERE PURCHASED BY THE ASSESSEE IN FEB., 2006 PLOT NO 55 FOR A PRICE O F RS 6,18,000/- AND PLOT NO 9 FOR A PRICE OF RS 7,20,000/-. THE FIGURES OF RS 33,56,950 /- END 26,80,250/- AS MENTIONED IN THE DAIRY AS COST OF PLOT WAS ARRIVED AT BY ADDING ESTIMATED MARKET PRICE OF THE PLOTS RS 32,50,000/- AND RS 25,75,000/-AT THAT POIN T OF TIME AND VARIOUS EXPENSES INCURRED ON THE REGISTRATION ETC OF THE SAID PLOTS AS DETAILED IN THE SAID PAPER AMOUNTING TO RS 1,09,650/- AND RS 1,05,250/-RESPECT IVELY. THE FIGURES HAVE BEEN CALCULATED THE PURPOSE OF DISPOSING OFF THE SAME. C OPIES OF REGISTRATION DEEDS ALONG WITH AFFIDAVITS FROM THE CONCERNED SELLERS MR S SUNITA GUPTA AND SH PHOOL KUMAR GOYAL WERE SUBMITTED BEFORE THE ASSESSING OFF ICER. THE SAID FIGURES ARE ALSO CO-RELATED WITH THE BALANCE SHEETS OF MANAV SINGLA SUBMITTED BEFORE THE ASSESSING OFFICER AND WITHDRAWALS FROM THE BANK FOR THE PURCHASE OF THE PLOTS AND CONSTRUCTION THEREON. THE FIGURES OF RS 38,91,557/- FOR PLOT NO 9 AND RS 35,01,056/- FOR PLOT NO 55 ARE NOT THE TRUE COST OF THE PLOTS BUT THE ESTIMATED MARKET PRICE OF THE PLOTS FOR THE PURPOSES OF DISPOSING OFF THE SAME. THE DIFFERENCE WAS TREATED BY THE ASSESSING OFFICER AS THE INCOME OF THE ASSESSEE FROM UNDISCLO SED INVESTMENTS U/S 69B. 3 7. THE ARGUMENTS WERE SUMMED UP AS UNDER: 1. THE PLOTS NO 55 AND 9 WERE PURCHASED BY THE ASSESSE E FOR RS 6,18,000/- AND RS 7,20,000/ RESPECTIVELY IN FEB., 2006 THROUGH A REGISTERED SALE DEED COPIES OF WHICH WERE SUBMITTED WITH THE ASSESSING OFFICER. 2. AFFIDAVITS FROM THE CONCERNED SELLERS MRS SUNITA GU PTA AND SH PHOOL KUMAR GOYAL WERE SUBMITTED BEFORE THE ASSESSING OFF ICER CONFIRMING SALE OF PLOTS NO 55 AND 9 TO SH MANAV SING LA FOR A CONSIDERATION OF RS 6,18,000/- AND RS 7,20,000/- RESPECTIVELY. 3. THE FIGURES OF RS 38,91,557/- FOR PLOT NO 9 AND RS 35,01,056/- FOR PLOT NO 55 AS MENTIONED IN THE SEIZED DOCUMENTS ARE NOT THE TR UE COST OF THE PLOTS BUT THE ESTIMATED MARKET PRICE OF THE PLOTS FOR THE PURPOSE S OF DISPOSING OFF THE SAME. 4. THERE IS NO OTHER CORROBORATIVE EVIDENCE WITH THE D EPARTMENT TO ARRIVE AT A OPINION THAT THE SAID PLOTS WERE PURCHASED FOR RS 38,91,557/-AND RS 35,01,056/-. 5. THE PLOTS WERE REGISTERED AT THE RATE MORE THAN THE COLLECTOR RATES APPLICABLE IN THAT AREA AND THE ASSESSING OFFICER H AS NOT DISPUTED THE SAME. 8. THE LD. AR FURTHER TAKEN US THROUGH THE DOCUMENT S IN QUESTION. THE PLOT NO. 9 IS OF 240 SQ.YDS AND PLOT NO. 55 IS OF 55 SQ. YDS. THE FIGURES MENTIONED ABOVE WERE IN ABSOLUTE, FOR EXAMPLE 534907, 3891857 , 820836, 3501086. IT WAS ALSO ARGUED THAT WHILE ANSWERING THE QUESTION NO. 1 0 AND 12 DURING THE STATEMENT RECORDED ON 14/08/2008 AND QUESTION NO. 1 0 DURING THE STATEMENT RECORDED ON 16/10/2010 IT WAS CLARIFIED THAT THE DI ARY IS IN THE HAND WRITING OF THE ASSESSEE CONTAINED THE GENERAL MARKET INFORMATION A ND ON SOME DAYS THE RATES OF CERTAIN ITEMS SPENT ON THE CONSTRUCTION OF THE H OUSE. IT WAS ARGUED THAT THE PURCHASERS HAVE ALSO FILED AFFIDAVITS DECLARING THE PURCHASE PRICE. 9. IT WAS FURTHER ARGUED THAT THE COST OF RS. 68680 0/- OF PLOT NO. 55 AND RS. 792600/- BEING THE COST OF PLOT NO. 9 HAVE BEEN DUL Y REFLECTED IN THE BALANCE SHEET OF THE CONCERN OF THE ASSESSEE AS ON 31/03/2 006. IT WAS ALSO ARGUED THAT THE SUBSEQUENT YEARS THE REVENUE HAS ACCEPTED THE R EGISTERED RATES ONLY WHILE COMPUTING THE CAPITAL GAINS ARISED ON THE SALE OF T HE SALE OF THESE TWO PLOTS. IT WAS FURTHER RELIED ON THE FOLLOWING CASE LAWS IN SU PPORT OF HIS ARGUMENTS: I) (2008) 169 TAXMAN 90 (P&H) CIT VS. HARPAL SINGH II) (1999) 63 TTJ (DEL) 532 S.K.GUPTA VS. DCIT III) (1998) 64 ITD 21 (BOM)(TM) UDEYRAJA GOLIYA (HUF) VS . ACIT IV) (2000) 66 TTJ (MUMBAI) 582 SMT. RAJRANI GUPTA VS. D CIT 10. ON THE OTHER HAND THE LD. CIT DR ARGUED THAT TH E FACT OF NOTING IS VERY SPECIFIC AND IT IS IN THE COMMON KNOWLEDGE THAT THE AMOUNT OF RS. 33,56,050/- 4 AND RS. 26,80,250/- REPRESENTS THE CASH PORTION OF THE TRANSACTION WHEREAS THE AMOUNT OF RS. 534907/- AND RS. 820836/- REPRESENTS THE COLLECTOR VALUE OF THE PLOTS. IT WAS ARGUED THAT THE FACT THAT THE PLOTS H AVE BEEN DULY PURCHASED AS MENTIONED IN THE DOCUMENT NAMELY PLOT NO. 55 AND PL OT NO. 9. SHE RELIED ON THE ORDER OF THE LD. CIT(A) WHICH IS AS UNDER: IN THIS CASE ON HAND, IT IS AN UNDISPUTED FACT TH AT THE DIARY FOUND AND SEIZED IN THE COURSE OF SEARCH IS ADMITTED BY THE ASSESSEE TO BE IN HIS OWN WRITING THE ONLY DISPUTED POINT BEING THAT THE CONTENTS WERE MERE ES TIMATES OF PLOTS OF LAND AND CONSEQUENTLY THE ADDITION U/S 69C WAS UNWARRANTED A S THE SELLERS HAD FURNISHED AFFIDAVITS ETC. I FIND THAT THE LD AO AT PAGE 4 & 5 OF THE IMPUGNED ORDER WHEREIN THE SCANNED COPIES OF THE DIARY PAGES HAVE BEEN AFF IXED, HAS CLEARLY HELD THAT THE PAGES CONTAINED METICULOUS DETAILS VIZ. PLOT NU MBERS HAVE BEEN MENTIONED AGAINST WHICH THE TOTAL COST HAS BEEN MENTIONED. SI MILARLY, FOR PLOT NO. 55, THE TOTAL COST OF THE PLOT PLUS CONSTRUCTION HAVE BEEN INDICATED. THESE UNAMBIGUOUS NOTING, MENTIONED IN ROUND FIGURES, THEREFORE COULD NOT BE PASSED OVER TO BE MERE ESTIMATES. THE FILING OF AFFIDAVITS FROM THE SELLER OF THE LAND WERE THUS HELD TO BE AT BEST ONLY SELF-SERVING EVIDENCES WHICH INSPIR ED NO CONFIDENCE. THUS, THE LD AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 69 B AS THE ONUS WAS OR, THE ASSESSEE TO PROVE THAT THE CONCLUSIONS BEING DRAWN BY THE LD AO WAS INACCURATE BY LEADING EVIDENCE. CONSEQUENTLY, TAKING INTO CONS IDERATION THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, I HAVE NO REASON NOT TO UP HOLD THE ADDITION AS MADE BY THE ASSESSING OFFICER TO THE TO THE TUNE OF RS. 45,58,000/-. 11. WE HAVE HEARD THE ARGUMENTS AND PERUSED THE MAT ERIAL ON RECORD THE FOLLOWING FACTS EMANATE FROM THE RECORD. THE NOTING AND THE DETAILS OF THE PURCHASE DEEDS ARE AS UNDER, SL.NO. PLOT NO. AMOUNT MENTIONED IN THE DIARY PURCHASE COST AS PER REGISTERED DOCUMENTS 1 PLOT NO. 9 3356950 + 534907 = 3891557 720000/ - 2 PLOT NO. 55 2680250+820836=3501086 618000/ - HENCE IT CANNOT BE SAID AT THIS JUNCTURE THAT THE O THER FIGURES NECESSARILY CONSTITUTE CASH PAYMENT IN THE ABSENCE OF ANY PAYME NT CORROBORATING THE FIGURES MENTIONED IN THE DIARY. THE PURCHASE VALUE VARIES FROM THE FIGURES NOTED IN THE DIARY. THE REVENUE WHILE RECORDING THE STATE MENT UNDER SECTION 132(4) EVEN AT THE TIME OF SEARCH AND AT THE TIME OF ASSES SMENT COULD NOT BRING OUT ANYTHING ON RECORD TO PROVE ARE CORROBORATE THE DIA RY NOTING. IT HAS BEEN THE CONSISTENT STAND OF THE ASSESSEE THAT THESE ARE EST IMATES IN THE STATEMENTS RECORDED. THERE WAS NO EVIDENCE OF CASH PAYMENT OR GENERATION OF CASH OR PHYSICAL CASH PERTAINING TO THE ASSESSEE FOUND AT T HE TIME OF SEARCH. THE REVENUE DID NOT ENQUIRE ON THE SIDE OF SELLERS OF T HE PLOTS TO PROVE ANYTHING CONTRA AS PUT FORWARD BY THE ASSESSEE. THUS, WHAT W E HAVE ON RECORD IS A MERE NOTING OF THE DIARY WHICH IN THE ABSENCE OF ANY OTH ER CORROBORATIVE EVIDENCE CANNOT BE UTILIZED FOR MAKING ADDITION UNDER SECTIO N 69B. AS FAR AS THE REVENUE 5 IS CONCERN THERE ARE NO EVIDENCES ON RECORD TO PROV E UNEXPLAINED INVESTMENTS. THE PAPER IN QUESTION DOES NOT INDICATE THAT IN THE TRANSACTION CASH PAYMENT HAS EVER TAKEN PLACE BECAUSE IT DOES NOT CONTAIN AN Y INFORMATION AS TO WHAT WAS THE CHEQUE AMOUNT OR CASH AMOUNT, WHAT WAS THE DATE OF THE TRANSACTION, WHAT DID THE FIGURE NOTED ON THE PIECE OF PAPER REP RESENT, AND WHETHER IN ANY MANNER THE PAPER IN QUESTION HAS ANY RELEVANCE TO T HE DETERMINATION OF THE INCOME IN THE HANDS OF THE ASSESSEE. NO EVIDENCE HA S BEEN BROUGHT ON RECORD TO CORROBORATE THE ALLEGATION THAT THE ASSESSEE HAD PAID CASH. THEREFORE UNLESS THERE IS A CORROBORATIVE EVIDENCE TO SHOW THAT THE PAYMENT OF CASH HAS TAKEN PLACE DURING THE PURCHASE, NO AMOUNT CAN BE ADDED I N THE HANDS OF THE ASSESSEE. IN THE INSTANT CASE DISTINCT AND SEPARATE PROOFS WERE NECESSARY NAMELY PROOF OF CASH PAYMENT BY THE WAY OF GENERAT ION OF AMOUNT OR PHYSICAL CASH, PROOF OF TRUTHFULNESS BY THE WAY OF ORAL STAT EMENTS RECORDED OR DOCUMENTS TO PROVE THAT THE CONTENTS IN THE DIARY AMOUNTS TO UNEXPLAINED INVESTMENTS AS PER THE PROVISIONS OF SECTION 69B. HENCE IN THE ABS ENCE OF ANY OTHER EVIDENCES COLLECTED BY THE REVENUE, WE HEREBY HOLD THAT THE A DDITION MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED. FURTHER, WE ALSO FIND FROM THE RETURNS OF THE ASSES SEE, FILED FOR THE ASSESSMENT YEAR 2011-12 AND 2012-13 AND ALSO THE 14 3(3) ORDER FOR THE ASSESSMENT YEAR 2012-13 THAT THE REVENUE ITSELF HAS ACCEPTED THE CAPITAL GAINS DECLARED BY THE ASSESSEE TAKING INTO CONSIDERATION THE AMOUNT DECLARED IN THE REGISTERED DOCUMENTS. NO ACTION HAS BEEN TAKEN BY T HE REVENUE TO DISPUTE THE COST OF ACQUISITION PERTAINING TO THE PROPERTIES IN QUESTION. BY ACCEPTING THE CAPITAL GAINS DECLARED BY THE ASSESSEE THE REVENUE HAS MADE A SELF GOAL PERTAINING TO THE ADDITION MADE IN THE EARLIER YEAR S (THOUGH THIS IS NOT THE ONLY REASON TO DELETE THE ADDITION). 12. AS A RESULT, THE APPEAL OF THE ASSESSEE IS HERE BY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- / (SANJAY GARG ) . .., # $ / ( DR. B.R.R. KUMAR) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER DATE: 07/05/2019 AG COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3.CIT, 4. DR, ITA T, CHANDIGARH, 5. GUARD FILE