Dr. Abha Goyal, Rewari V. ACIT, Faridabad

ITA 3198/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3864 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Unexplained investment; Search and seizure; Document seized; Valuation report; Retraction; Documents seized
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NOS. 3194 & 3195 (DEL)2010 ASSESSMENT YEARS: 2004-05 & 2005-06 DR. KAUSHAL GOYAL, PROP. M/S. KAUSHAL SURGICAL HOSPITAL & MATERNITY HOME, V. ASSTT.CO MMISSIONER OF MODEL TOWN, REWARI. IT, CENT.CIR.II, FARI DABAD. ITA NOS. 3197 & 3198 (DEL)2010 ASSESSMENT YEARS: 2004-05 & 2005-06 DR.(MRS.) ABHA GOEL, C/O M/S. KAUSHAL SURGICAL HOSPITAL & MATERNITY HOME, V. ASSTT .COMMISSIONER OF MODEL TOWN, REWARI. IT, CENT.CIR.II, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: DR.RAKESH GUPTA RESPONDENT BY : SHRI ASHOK PANDEY, CIT/DR ORDER PER A.D. JAIN, J.M . ITA NO. 3194 (DEL)2010: THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 004-05, TAKING THE FOLLOWING GROUNDS:- ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 2 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-I, LUDHIANA HAS ERRED IN CONFIRMING THE ADDITION OF ` 16,77,500/- AS ALLEGED INVESTMENT IN THE PURCHASE OF PROPERTY IN H ALF SHARE AT REWARI. HE HAS FURTHER ERRED IN NOT CONSIDERING T HE DOCUMENTS FURNISHED BY SHRI RAM LAL, SELLER WITH AFFIDAVIT, H IS STATEMENT BEFORE THE LD. ACIT, CIRCLE II, FARIDABAD AND ALSO THE CIRCUMSTANCES. 2. THAT THE LD. CIT(A)I,LUDHIANA HAS GROSSLY ERRED IN IGNORING THAT THE FIRST STATEMENT OF SHRI RAM LAL OF SONIPAT , THE SELLER IS NOT ACCORDING TO THE PROVISIONS OF LAW AS NO NOTICE U/S 131(1) WAS EVER ISSUED FOR RECORDING THE STATEMENT U/S 132(4) OF TH E INCOME TAX ACT. 3. THAT THE LD. CIT(A)-I, LUDHIANA HAS ERRED IN NO T CONSIDERING THE FACTS OF THE ILLNESS, HANDICAPPED POSITION AND OTHE R CIRCUMSTANCES ELABORATED BY THE SELLER OF PLOT SH. RAM LAL IN HIS SUBMISSION, DULY SWORNED AFFIDAVIT AND ALSO THE STATEMENT BEFORE CIT , CIRCLE II, FARIDABAD DURING THE APPELLATE ASSESSMENT PROCEEDIN GS. 4. THAT THE LD. CIT(A)-I, LUDHIANA HAS ALSO ERRED IN UPHOLDING THE ADDITION OF ` 7,81,000/- AS AN EXTRA AMOUNT CONSTRUCTION EXPENSES BY RELYING THE REPORT OF DVO, ROHTAK WHICH IS NOT A CCORDING TO THE PROVISIONS OF LAW. FURTHER, HE HAS ERRED IN IGNOR ING THAT THE VALUATION OF CONSTRUCTION HAS ALREADY BEEN ACCEPTED BY THE LD. AO, REWARI IN ASSESSMENT PROCEEDINGS U/S 143(3) WHILE A LL THE DOCUMENTS AND VALUATION REPORT AS PER LAW ARE ON RE CORD. 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAD BOUGHT A PLOT OF LAND MEASURING 436 SQ.YDS. AT REWARI, VIDE SALE DEED DATED 8.10.03, FROM ONE SHRI RAM LAL, RESIDENT OF 105-R, MODEL TO WN, SONEPAT. SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 24. 8.2006. ON THE SAME DAY, A STATEMENT OF SHRI RAM LAL WAS RECORDED BY THE OFFICERS OF ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 3 THE DEPARTMENT AT SONEPAT. THEREIN, HE STATED THAT THIS PLOT OF LAND WAS SOLD AT ` 48.81 LAKHS, WHEREAS THE REGISTRY WAS DONE FOR ` 15.26 LAKHS ONLY. HE ALSO STATED AS TO HOW THE MONEY RECEIVED OUT OF THE SALE CONSIDERATION OF PLOT WAS UTILIZED. IN THE ASSESSME NT PROCEEDINGS, ON 17.12.08, SHRI RAM LAL WAS PRODUCED BEFORE THE AO. HE WAS EXAMINED BY THE AO. IN THE ASSESSMENT ORDER DATED 19.12.08, THE AO OBSERVED , INTER ALIA, THAT SHRI RAM LAL HAD COM PLETELY DENIED ALL THAT HE HAD STATED BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, AT THE TIME OF THE SEARCH; THAT HE HAD STATED THAT HE WAS SICK AT THE TIME OF RECORDING OF HIS STATEMENT BY THE INVESTIGATION WI NG AND FINDING SO MANY PEOPLE ALONG WITH ARMED POLICE FORCE IN HIS RE SIDENCE, HE HAD BECOME NERVOUS AND SCARED; AND THAT THE DEPARTMENTA L OFFICERS WHO RECORDED HIS STATEMENT DID NOT READ OUT THE STATEME NT TO HIM AND HE WAS FORCIBLY MADE TO SIGN THE SAME. THE AO OBSERVED T HAT THIS WAS ONLY AN AFTER-THOUGHT ON THE PART OF RAM LAL; THAT HIS STAT EMENT BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, RECORDED ON 2 4.8.06, WAS IMPROMPTU AND CARRIED MORE WEIGHT AS COMPARED TO WH AT HE HAD STATED AS A WITNESS OF THE ASSESSEE, BEFORE THE AO, IN THE AS SESSMENT PROCEEDINGS. IT WAS, THEREFORE, THAT THE AO HELD THAT AN UNACCOU NTED INVESTMENT OF ` 33.55 LAKHS HAD BEEN MADE IN THE PURCHASE OF PLOT O F LAND. SINCE THE ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 4 ASSESSEE WAS THE OWNER OF SHARE OF THE PLOT ALONG WITH HIS WIFE, THE AO MADE AN ADDITION OF ` 16,77,500/- IN THE CASE OF THE ASSESSEE. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ABOVE ACTION OF THE AO. THIS HAS GIVEN RISE TO GRO UND NOS. 1 TO 3 TAKEN BY THE ASSESSEE. 4. IN THE ASSESSMENT ORDER, THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD DISCLOSED IN THE RETURN OF INCOME, INVESTMENT I N THE BUILDING, AMOUNTING TO ` 7,29,895/-. THE AO REFERRED THE BUILDING U/S 142 A OF THE I.T. ACT, FOR VALUATION, TO THE DVO. AS PER T HE REPORT OF THE DVO, THE COST OF BUILDING WAS ESTIMATED AT ` 60,03,600/-. THE SHARE OF THE ASSESSEE THEREIN CAME TO ` 46,78,964/-. THE BALANCE WAS THAT OF THE ASSESSEES WIFE, DR.(MRS.)ABHA GOYAL. THE DVO, ON A PRO-RATA BASIS, DETERMINED A SUM OF ` 17,78,602/- AS INVESTMENT IN THE BUILDING. AFTER GIVING AN ALLOWANCE OF 15% ON ACCOUNT OF SUBJECTIVI TY IN THE DVOS REPORT AND DUE TO PAUCITY OF TIME, THE AO MADE AN A DDITION OF ` 7,81,900/-. THE CIT(A) ALSO CONFIRMED THIS ACTION OF THE AO. THIS HAS LED TO TAKING OF GROUND NO.4 BEFORE US. 5. CHALLENGING THE IMPUGNED ORDER, THE LEARNED COUN SEL FOR THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS GONE WRONG IN CONFIRMING ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 5 THE ADDITION OF ` 16,77,500/-, AS ALLEGED INVESTMENT IN THE PURCHASE OF PROPERTY AT REWARI; THAT THE LD. CIT(A) HAS ERRED I N NOT CONSIDERING THE DOCUMENTS FURNISHED BY RAM LAL, THE SELLER, INCLUDI NG HIS AFFIDAVIT AND HIS STATEMENT BEFORE THE AO, BESIDES THE OTHER CONN ECTED CIRCUMSTANCES; THAT THE LD. CIT(A) FAILED TO CONSIDER THE FACT THA T THE FIRST STATEMENT OF RAM LAL WAS NOT IN ACCORDANCE WITH THE PROVISIONS O F LAW, AS NO NOTICE UNDER SECTION 131(1) OF THE I.T. ACT WAS EVER ISSUE D FOR RECORDING THE STATEMENT U/S 132(4) OF THE ACT; THAT MOREOVER, IT HAS BEEN IGNORED THAT THE STATEMENT RECORDED BY THE INVESTIGATION WING OF THE DEPARTMENT WAS NEITHER RECORDED BY AN AUTHORIZED OFFICER, NOR BY T HE AO OF RAM LAL AND THAT SO, THE SAME IS NOT THE LEAST RELIABLE; (A TTENTION IN THIS REGARD WAS DRAWN TO COPY OF STATEMENT DATED 17.12.08 OF RA M LAL, THE SELLER, U/S 153 OF THE ACT, BY THE ACIT(FARIDABAD) PAGES 33 T O 38 OF THE ASSESSEES PAPER BOOK); THAT THE LD. CIT(A) HAS ERR ED IN FAILING TO CONSIDER THE FACTS OF THE ILLNESS AND HANDICAPPED P OSITION OF RAM LAL AT THE TIME OF RECORDING OF THE STATEMENT BEFORE THE I NVESTIGATION WING AND OTHER RELATED CIRCUMSTANCES AS ELABORATED BY HIM IN HIS STATEMENT BEFORE THE AO; THAT THE LD. CIT(A) HAS ALSO ERRED IN IGNOR ING THE DULY SWORN AFFIDAVIT OF RAM LAL; THAT THE LD. CIT(A) HAS FURTH ER ERRED IN UPHOLDING THE ADDITION OF ` 7,81,900/- REPRESENTING EXTRA AMOUNT OF CONSTRUCTIO N ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 6 EXPENSES; THAT IN DOING SO, THE CIT(A) ERRONEOUSLY RELIED ON THE REPORT OF THE DVO, WHICH REPORT IS NOT IN ACCORDANCE WITH LAW ; AND THAT THE LD. CIT(A) ALSO ERRED IN IGNORING THE FACT THAT THE VAL UATION OF THE CONSTRUCTION STANDS ALREADY ACCEPTED BY THE AO IN T HE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT AND THAT ALL THE DOCUMENTS AND VALUATION REPORT, AS PER LAW, WERE ALREADY ON RECOR D. 6. THE LD. DR, ON THE OTHER HAND, HAS STRONGLY SUPP ORTED THE IMPUGNED ORDER. HE HAS CONTENDED THAT THE SEARCH T OOK PLACE ON 24.8.06; THAT IT HAS BEEN FOUND AS A FACT BY THE AO, THAT TH E ASSESSEE HAD SHOWN INVESTMENT OF ` 15.26 LAKHS IN LAND DURING THE YEAR; THAT THIS INV ESTMENT HAD BEEN SHOWN TO HAVE BEEN MADE FOR PURCHASE OF A PLOT MEASURING 436 SQ,YDS. AT REWARI, VIDE SALE DEED NO.3332 DATED 8.1 0.03; THAT THIS INVESTMENT WAS SHOWN TO HAVE BEEN MADE BY THE ASSES SEE ALONG WITH HIS WIFE, DR.(MRS.)ABHA GOYAL, ON A 50-50 % BASIS; THAT IN THE COURSE OF SEARCH, NO DIRECT EVIDENCE WAS FOUND TO ESTABLISH A NY INVESTMENT/PAYMENT OUT OF BOOKS; THAT HOWEVER, AS P ER THE ENQUIRIES CONDUCTED FROM SHRI RAM LAL, THE SELLER, THE TOTAL CONSIDERATION FOR THE PLOT WAS OF ` 48.81 LAKHS; THAT AN AMOUNT OF ` 33.55 LAKHS WAS APPARENTLY PAID BY THE ASSESSEE AND HIS WIFE OVER AND ABOVE TH E REGISTERED VALUE IN CASH TO THE SELLER, IN LIEU OF THE LAND; THAT A COP Y OF THE BANK PASS BOOK OF ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 7 RAM LAL, AS FILED BEFORE THE AO, IS AT PAGES 42 TO 47 OF THE ASSESSEES PAPER BOOK; THAT THEREIN, AN AMOUNT OF ` 3,50,000/- HAS BEEN SHOWN TO HAVE BEEN CREDITED IN CASH, ON 20.5.03; THAT AN AMO UNT OF ` 5,00,000/- HAS BEEN SHOWN TO HAVE BEEN CREDITED IN CASH, ON 9.7.03 ; THAT IN THE STATEMENT DATED 24.8.06, OF RAM LAL, (COPY AT APB PAGES 48 TO 51), IN THE LAST PARA THEREOF (APB 51), IT HAS BEEN STATED WHATEVER IS STATED ABOVE IS TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF AND NOTHING HAS BEEN CONCEALED. THE STATEMENT HAS BEEN GIVEN WITHOUT ANY FEAR OR CO ERCION; THAT THIS AMPLY PROVES THAT THE STORY PUT FORWARD BY SHRI RAM LAL BEFORE THE AO WAS A COCK AND BULL STORY, MERELY AN AFTER-THOUGHT, ON THE TUTORING OF THE ASSESSEE; AND THAT THE SAID STATEMENT WAS RECORDED UNDER OATH; THAT REMARKABLY, RAM LAL TOOK TWO YEARS TIME TO RETRAC T HIS ORIGINAL STATEMENT. REFERRING TO SECTION 142 A OF THE ACT, THE LD. DR HAS CONTENDED THAT FOR THE PURPOSE OF MAKING AN ASSESSM ENT, WHERE AN ESTIMATE OF THE VALUE OF ANY INVESTMENT IS REQUIRED TO BE MADE, THE AO MAY REQUIRE THE VALUATION OFFICER TO MAKE AN ESTIMA TE OF SUCH VALUE. IT HAS BEEN CONTENDED THAT THE REFERENCE TO THE DVO BY THE AO, WAS MADE PERFECTLY IN ACCORDANCE WITH LAW. 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. THE ISSUE BEFORE US IS AS TO WHICH OF THE STATEMEN TS OF RAM LAL, I.E., THE ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 8 ONE RECORDED BY THE INVESTIGATION WING AT THE TIME OF SEARCH, OR THAT GIVEN BY HIM BEFORE THE AO, IS TO BE RELIED ON. 8. IN THE STATEMENT RECORDED ON 24.8.2006, I.E., TH E DATE OF THE SEARCH, SHRI RAM LAL DEPOSED THAT THE PLOT OF LAND MEASURIN G 436 SQ.YDS, SITUATED AT REWARI, WAS SOLD FOR A SUM OF ` 48.81 LAKHS, WHEREAS THE REGISTRY THEREOF WAS GOT DONE FOR ` 15.26 LAKHS ONLY. HE STATED THAT HE HAD NO SOURCE OF INCOME OTHER THAN PENSION, SINCE HE HAD R ETIRED FROM THE FOOD & SUPPLIES DEPARTMENT, SONEPAT; THAT HE WAS MAINTAI NING THE SAVINGS BANK ACCOUNT NO.23454 WITH PUNJAB NATIONAL BANK, MA IN BRANCH, SONEPAT; THAT THERE WAS NO BANK ACCOUNT EITHER IN T HE NAME OF HIS WIFE OR IN THE NAMES OF HIS CHILDREN; THAT HE HAD RECEIVED A SUM OF ` 3,50,000/- AS EARNEST MONEY IN CASH FROM THE PURCHASERS, SHRI KAU SHAL GOEL AND SMT. ABHA GOEL; THAT THE SAME WAS DEPOSITED IN HIS SAVIN GS BANK ACCOUNT; THAT THEREAFTER, HE RECEIVED A SUM OF ` 5,00,000/- IN CASH ON 9.7.2003; THAT THIS AMOUNT WAS ALSO DEPOSITED IN HIS SAVINGS BANK ACCOUNT; THAT THE BALANCE AMOUNT OF ` 40.31 LAKHS WAS RECEIVED AT THE TIME OF REGISTRATI ON; THAT THE AMOUNTS OF ` 6.26 LAKHS AND ` 9 LAKHS, TOTAL AMOUNTING TO ` 15.26 LAKHS, WERE RECEIVED THROUGH CHEQUE DATED 13.10.200 3; THAT THE BALANCE AMOUNT OF ` 25.05 LAKHS WAS RECEIVED IN CASH FROM THE PURCHASER S; THAT ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 9 THE DEAL WAS FINALIZED FOR ` 38.81 LAKHS WITH THE BROKER, SHRI LEELA DHAR, RESIDENT OF REWARI; THAT NO SEPARATE COMMISSION WAS PAID BY HIM (RAM LAL), AS THE DEAL WAS FINALIZED WITH HIM ONLY; THAT THERE WAS A TIME OF SIX MONTHS FOR GETTING THE SALE REGISTERED AND THE SAME WAS GOT REGISTERED BEFORE THE EXPIRY OF THE SAID PERIOD OF SIX MONTHS; THAT THE PAYMENT OF ` 50,000/- WAS MADE ON 19.6.2003, OUT OF HIS (RAM LAL S) SAVINGS BANK ACCOUNT TO SHRI THAKAR DASS, A RESIDENT OF SONEPAT, A PERSONAL FRIEND OF RAM LAL; THAT THAKAR DASS HAD RECEIVED THIS AMOUNT FROM RAM LAL FOR PERSONAL USE; THAT THE EXACT ADDRESS OF THAKAR DASS WAS NOT KNOWN TO RAM LAL; THAT RAM LAL HAD PURCHASED THE PLOT IN QUE STION IN 1973; THAT RAM LAL HAD INVESTED THE SALE PROCEEDS OF ` 48.81 LAKHS, BY INVESTING ` 8.50 LAKHS IN CASH IN HIS SAVINGS BANK ACCOUNT AND ALSO DEPOSITING ` 6.26 LAKHS AND ` 9 LAKHS, RECEIVED THROUGH CHEQUE, IN THE SAID BANK ACCOUNT; THAT RAM LAL HAD ALSO PURCHASED A HOUSE BEARING NO. 53, VIJAY NAGAR, SONEPAT FOR A SUM OF ` 24 LAKHS, WHICH AMOUNT INCLUDED THE AMOUNT CONCERNING REPAIR AND RENOVATION; THAT RAM LAL HAD ALSO PURCHASED FDRS IN JOINT NAME WITH HIS WIFE, SMT. KAMLESH KUMARI, F OR A SUM OF ` 1.50 LAKHS IN PUNJAB NATIONAL BANK, SONEPAT; THAT THIS W AS THE ONLY INVESTMENT MADE BY RAM LAL OUT OF SALE PROCEEDS OF ` 48.81 LAKHS, ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 10 CONCERNING THE SALE OF THE PLOT IN QUESTION; THAT H OUSE NO. 53, VIJAY NAGAR, SONEPAT HAD BEEN PURCHASED BY RAM LAL FROM S HRI AVTAR SINGH, RESIDENT OF SONEPAT FOR ` 24 LAKHS; THAT HOWEVER, THE REGISTRATION OF THIS HOUSE WAS GOT DONE FOR ` 5.82 LAKHS AND THE BALANCE WAS PAID IN CASH; THAT RAM LAL WAS FILING HIS RETURNS OF INCOME IN THE INC OME TAX OFFICE, SONEPAT; AND THAT HIS PAN WAS AADPL 7292. 9. A COPY OF THE ABOVE STATEMENT OF SHRI RAM LAL I S TO BE FOUND AT PAGES 48 TO 51 OF THE ASSESSEES PAPER BOOK (APB FOR SHORT). 10. AN UNDATED LETTER (STATED TO BE A SUBMISSION OF RAM LAL, DATED 24.11.2008), A COPY WHEREOF IS AT PAGE APB 29 30, WAS SUBMITTED BY RAM LAL TO THE AO. AS PER THIS LETTER, SHRI RAM L AL STATED THAT HE WAS A HANDICAPPED PERSON; THAT A TUMOR HAD DEVELOPED IN H IS SPINE, DUE TO WHICH, BOTH OF HIS LEGS HAD GOT DILAPIDATED AND SO, HE WAS UNABLE TO WALK PROPERLY; THAT BESIDES, HE WAS A DIABETIC; THAT HE HAD RETIRED FROM THE FOOD & SUPPLIES DEPARTMENT; THAT THE STATEMENT RECO RDED BY THE INCOME TAX OFFICERS, SONEPAT HAD BEEN RECORDED BY THEM OF THEIR OWN AND RAM LAL HAD BEEN FORCED TO APPEND HIS SIGNATURE THEREON ; THAT THE AO WAS BEING REQUESTED TO CANCEL THE SAID STATEMENT; THAT THE PLOT AT REWARI WHICH RAM LAL HAD SOLD TO DR. KAUSHAL, HAD BEEN SOL D FOR ` 15,26,000/- AND THE REGISTRATION THEREOF WAS GOT DONE BY SHRI RAM LAL ONLY FOR THIS ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 11 VERY AMOUNT; THAT SO FAR AS REGARDS THE DEPOSIT OF ` 3,50,000/- ON 15.5.03 AND OF ` 5,00,000/- ON 9.7.03, THESE AMOUNTS HAD BEEN DEPOSI TED BY SHRI RAM LAL OUT OF THE FUNDS RECEIVED BY HIM FROM THE G OVERNMENT ON HIS RETIREMENT; THAT HE HAD RECEIVED GPF AND LEAVE ENCA SHMENT OF ` 5,46,000/-, DCRG OF ` 1,91,582/- AND COMMUTED PENSION OF ` 2,09,242/-, TOTAL AMOUNTING TO ` 9,47,824/-; THAT OUT OF THAT, SHRI RAM LAL HAD DEPOSITED ` 8,50.000/- IN HIS BANK ACCOUNT; THAT RAM LAL HAD J OINED SERVICE IN THE FOOD DEPARTMENT IN 1962 AS INSPECTOR FOOD SUPPLIES AND HE HAD RETIRED IN 2000, FROM THE POST OF ASSISTANT FOOD SUPPLIES OFFICER; THAT AS SUCH, HE HAD RENDERED SERVICE OF 37 YEARS A ND 6 MONTHS; THAT OUT OF THE AMOUNT SAVED DURING SERVICE, RAM LAL HAD PUR CHASED A HOUSE IN SONEPAT FOR ` 5,82,000/-, FOR HIS RESIDENTIAL PURPOSE AND IT HAD BEEN GOT REGISTERED FOR THIS VERY AMOUNT; AND THAT OTHER THA N THIS, WHATEVER EXPENSES HAD BEEN INCURRED FOR GETTING THE REGISTR ATION DONE, HAD ALSO BEEN INCURRED BY RAM LAL OUT OF HIS SAVINGS. ALON G WITH THIS LETTER, SHRI RAM LAL ENCLOSED A COPY OF HANDICAP CERTIFICATE, A COPY OF REGISTRATION OF HOUSE, A COPY OF AFFIDAVIT DATED 18.11.08(COPY AT A PB 31-32) AND INCOME TAX DOCUMENTS. ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 12 11. IN THE AFORESAID AFFIDAVIT, SHRI RAM LAL REITE RATED THE AFORESAID FACTS. 12. A COPY OF THE STATEMENT OF SHRI RAM LAL, RECORD ED ON 17.12.2008, DURING THE ASSESSMENT PROCEEDINGS, IS AT APB 33 3 8. AS PER THIS STATEMENT, SHRI RAM LAL DEPOSED, INTER ALIA, THAT H E HAD A TUMOR IN HIS SPINAL CHORD AND HAD TO UNDERGO SURGERY TWICE, I.E ., IN 1973 AND 2002; THAT GRADUALLY, HIS LEGS WERE GOING NUMB AND WEAK A ND HE WAS NOT ABLE TO WALK OR CLIMB STAIRS; THAT HE HAD A LINGERING PAIN SO AS TO HANDICAP HIM FROM HIS NORMAL FUNCTIONS AND DUE TO THE ADDITIONAL PROBLEM OF DIABETIES, HE GOT NERVOUS AND SCARED VERY SOON; THAT HE RECOGN IZED HIS SIGNATURE ON HIS STATEMENT BEFORE SHRI MANJIT SINGH, ITO, RECORD ED ON 24.8.06, IN THE COURSE OF SEARCH PROCEEDINGS IN THE CASE OF DR. KAU SHAL GOEL; THAT HE DID NOT REMEMBER AS TO WHAT HE HAD TOLD THE ITO IN THE SAID STATEMENT; THAT AS PER THAT STATEMENT, HE HAD SOLD A PLOT MEASURING 456 SQ.YDS, SITUATED AT REWARI, TO DR. KAUSHAL GOEL; THAT IT HAD WRONGLY BE EN RECORDED IN THE SAID STATEMENT THAT HE HAD SOLD THE PLOT FOR ` 48,81,000/- ON 8.6.2003; THAT IN FACT, THE PLOT HAD BEEN SOLD FOR ` 15.26 LAKHS ONLY; THAT THE OFFICERS WHO RECORDED THE STATEMENT HAD COME WELL PREPARED WITH THE FIGURES QUOTED IN THE STATEMENT AND THOUGH SHRI RAM LAL HAD STATED TH E CORRECT FIGURES, THEY HAD RECORDED THE FIGURES WHICH THEY HAD APPARE NTLY HEARD FROM ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 13 SOMEBODY OR FROM SOME SOURCE AND THEY HAD COMPELLED SHRI RAM LAL TO SIGN ON WHATEVER THEY HAD RECORDED; THAT RAM LAL, B EING SICK, GOT NERVOUS AND SIGNED THE DOCUMENTS AGAINST HIS WILL , ONLY TO BUY PEACE; THAT THE ITO, WHO HAD COME TO HIS RESIDENCE ALONG W ITH SEVERAL POLICE OFFICERS, ENTERED HIS HOUSE WITHOUT ANY WARRANT OR AUTHORIZATION; THAT THEY WERE CARRYING THE COPIES OF BANK ACCOUNT STATEMENT AND THEY MADE UP THE ENTIRE STATEMENT BY LOOKING INTO THE BANK ENTRIES; THAT HE WAS NOT ALLOWED TO EXPLAIN THE ENTRIES AND WAS COERCED INTO SIGNING THE STATEMENT WITHOUT EVEN READING IT; THAT THE AMOUNT OF ` 8.50 LAKHS IN HIS BANK ACCOUNT, WAS OUT OF HIS RETIREMENT BENEFITS OF ` 9,47,824/-, I.E., GPF AND LEAVE ENCASHMENT OF ` 5,46,000/-, DCRG OF ` 1,91,582/- AND COMMUTED PENSION OF ` 2,09,242/-; THAT THOUGH THIS AMOUNT HAD BEEN RECEIV ED BY HIM IN 2000-01, IT HAD BEEN LYING WITH HIM TILL MAY JULY 2003; THAT HE HAD DEPOSITED ` 8.50 LAKHS OUT OF THE SAME, IN HIS BANK ACCOUNT ON 15.5.03 AND ON 9.7.2003; THAT HE HAD PURCHASED HOUSE NO. 53 - VIJAY NAGAR, SONEPAT, FOR ` 5,82,500/- PLUS STAMP DUTY OF ` 90,290/- PLUS OTHER INCIDENTAL EXPENSES OF ABOUT ` 1,000/-; THAT APROPOS HIS HAVING ALLEGEDLY STATED IN HIS EARLIER STATEMENT THAT HE HAD PURCHAS ED THE SAID HOUSE FOR ` 24 LAKHS, HE DID NOT KNOW WHAT HAD BEEN WRITTEN IN HIS EARLIER STATEMENT ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 14 AND HE HAD BEEN FORCED TO SIGN THAT STATEMENT, WITH OUT IT HAVING BEEN READ OVER TO HIM; THAT REGARDING THE FDRS OF ` 1.5 LAKHS, MADE ON 22.2.2004 JOINTLY IN HIS NAME AND HIS WIFES NAME, THESE FDRS WERE MADE OUT OF HIS SAVINGS IN HIS SAVINGS BANK ACCOUNT; THAT THE INCOM E TAX OFFICERS WHO HAD RECORDED HIS STATEMENT ON 24.8.2006, HAD COME W ITH ALL THE DATA COLLECTED FROM THE BANK OR FROM OTHER SOURCE AND TH EY HAD MADE UP THIS STORY OF THE FDRS HAVING BEEN MADE OUT OF RECEIPTS FROM THE SALE OF THE PLOT; THAT SINCE HE HAD SOLD THE PLOT AND HAD PURCH ASED A HOUSE IMMEDIATELY OUT OF THE PROCEEDS OF SUCH SALE, THER E WAS NO INCIDENCE OF CAPITAL GAIN; THAT HE HAD SUBMITTED A SWORN AFFIDAV IT IN SUPPORT OF HIS INSTANT STATEMENT (DATED 17.12.2008) WHICH AFFIDAVI T HAD BEEN SENT TO THE ITO AT FARIDABAD (SHRI ALOK NATH, ACIT, CENTRAL CIR .II, FARIDABAD), BY POST, ALONG WITH COPIES OF HIS INCOME TAX RETURNS A ND THE DEED IN RESPECT OF THE PROPERTY PURCHASED BY HIM IN 2003; AND THAT THESE DOCUMENTS BE ALSO CONSIDERED. 13. THE ABOVE STATEMENT DATED 17.12.2008 WAS RECORD ED BY THE ACIT, CEN.CIR.II, FARIDABAD, IN THE PRESENCE OF SHRI M.L. GULATI, AUTHORISED REPRESENTATIVE OF DR. KAUSHAL GOEL. IT WAS CERTIFI ED TO HAVE BEEN READ OVER TO THE DEPONENT AND TO HAVE BEEN CORRECTLY RE CORDED . THE ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 15 DEPONENT ALSO CERTIFIED THAT NO COERCION, THREAT OR UNDUE INFLUENCE HAD BEEN BROUGHT UPON HIM WHILE RECORDING THE SAID STAT EMENT. 14. THEREFORE, WHEREAS AS PER THE INITIAL STATEMEN T DATED 24.8.2006, SHRI RAM LAL HAD ALLEGEDLY CONTENDED THAT THE LAND AT REWARI HAD BEEN SOLD FOR ` 48.81 LAKHS AND THAT THE REGISTRY THEREOF HAD BEEN GOT DONE FOR ` 15.26 LAKHS ONLY, IN HIS SUBSEQUENT STATEMENT DATED 17.12.2008, RECORDED BY THE AO, IN THE ASSESSMENT PROCEEDINGS, SHRI RAM LAL RETRACTED FROM HIS SAID EARLIER STAND AND STATED THAT THE PLOT HAD BEEN SOLD FOR ` 15.26 LAKHS ONLY AND NOT FOR ` 48.81 LAKHS, AS WRONGLY RECORDED IN HIS EARLIER STATEMENT, WHICH HE WAS NEVER ALLOWED TO READ, NOR WAS READ OVER TO HIM AND ON WHICH, HIS SIGNATURE WAS OBTAINED FORCIBLY 15. SHRI RAM LAL, AS SUCH, RETRACTED FROM HIS EARLI ER STATEMENT RECORDED DURING THE SEARCH OPERATION. 16. THE AO HELD THAT THE SECOND STATEMENT DATED 17. 12.2008, GIVEN BY SHRI RAM LAL, WAS MERELY AN AFTER-THOUGHT, WHEREAS HIS FIRST STATEMENT DATED 24.8.2008 WAS AN IMPROMPTU STATEMENT AND THAT IT WAS THIS FIRST STATEMENT WHICH CARRIED MORE WEIGHT THAN HIS STATEM ENT AS THE WITNESS OF THE ASSESSEE. THE AO, ON THIS BASIS, HELD THAT AN UNACCOUNTED INVESTMENT OF ` 33.55 LAKHS HAD BEEN MADE IN THE PURCHASE OF THE PL OT OF ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 16 LAND. AS SUCH, HE MADE ADDITION OF ` 16,77,500/- IN THE CASE OF DR. KAUSHAL GOEL, HE BEING SHARE OWNER OF THE PLOT AL ONG WITH HIS WIFE. 17. THE LEARNED CIT(A), WHILE UPHOLDING THE AFORESA ID ACTION OF THE AO, OBSERVED, INTER ALIA, THAT THE ASSERTION OF SHR I RAM LAL DURING THE ASSESSMENT PROCEEDINGS, TO THE EFFECT THAT HE, AT T HE TIME OF RECORDING OF THE INITIAL STATEMENT, HAD BEEN SCARED AND HAD BEEN MADE TO SIGN IT UNDER DURESS, COULD NOT BE TAKEN ON ITS FACE VALUE; THAT THERE WAS NOTHING ON RECORD TO SUGGEST THAT SHRI RAM LAL WAS THREATENED OR COERCED TO SIGN THE STATEMENT RECORDED ON 24.8.2006; THAT THE STATEMENT RECORDED ON 24.8.2006 HAD BEEN DENIED BY HIM IN THE FORM OF AN AFFIDAVIT DATED 24.11.2008 AFTER A LAPSE OF MORE THAN 2 YEARS; THAT IF HE WAS MADE TO SIGN THE STATEMENT UNDER DURESS AND COERCION, HE SHOULD HAVE RETRACTED THE SAME AT THE FIRST AVAILABLE OPPORTUNITY AND NOT WAI TED FOR SUCH A LONG PERIOD OF TIME; THAT RAM LAL WAS AN EDUCATED PERSON , RETIRED AS ASSISTANT FOOD & SUPPLIES OFFICER; THAT THE STATEMENT MADE B Y HIM ON 24.8.2006 WAS THE FIRST SPONTANEOUS AND IMPROMPTU VERSION; TH AT THE SAME WOULD TAKE PRECEDENCE OVER THE SUBSEQUENT STATEMENT GIVEN BY HIM IN THE ASSESSMENT PROCEEDINGS; THAT THE SUBSEQUENT STATEME NT HAD APPARENTLY BEEN MADE BY HIM, ON HAVING BEEN TUTORED; THAT THE SALE PROCEEDS RECEIVED BY HIM ON ACCOUNT OF SALE OF THE PLOT OF L AND STOOD CORROBORATED ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 17 WITH THE ENTRIES IN THE BANK PASS BOOK; THAT HIS LA TER STAND THAT THESE ENTRIES REPRESENTED THE BENEFITS RECEIVED BY HIM ON RETIREMENT, WAS NOT CREDIBLE; THAT THE RETIREMENT BENEFITS OF GOVERNMEN T EMPLOYEES ARE GENERALLY RECEIVED THROUGH CHEQUES; THAT IT WAS FOR SHRI RAM LAL TO SHOW AS TO HOW HE HAD UTILIZED HIS RETIREMENT BENEFITS A ND AS TO HOW CASH WAS AVAILABLE WITH HIM FOR MAKING DEPOSIT IN THE BANK A CCOUNT, AS CLAIMED; THAT THE STRONG CIRCUMSTANTIAL EVIDENCE LED TO THE IRRESISTIBLE CONCLUSION THAT ON MONEY HAD BEEN PAID FOR THE PURCHASE OF THE PLOT BY THE ASSESSEE; AND THAT AS SUCH, THE AO HAD RIGHTLY MADE THE ADDIT ION. 18. AT THE OUTSET, ADMITTEDLY, NO MATERIAL ADVERSE TO THE ASSESSEE WAS FOUND BY THE DEPARTMENT IN THE SEARCH AND SEIZURE O PERATION. NOW, THOUGH IT CANNOT BE DENIED THAT IN INCOME TAX PROCE EDINGS, PREPONDERANCE OF PROBABILITY IS, OF NECESSITY, A MA JOR CONSIDERATION, IT IS TO BE SEEN WHETHER IN THE PRESENT CASE, THERE IS AN Y SUCH PREPONDERANCE AGAINST THE ASSESSEE. 19. THE FIRST OBSERVATION OF THE LD. CIT(A) IN THIS REGARD IS THAT THERE IS NOTHING ON RECORD TO SUGGEST THAT RAM LAL WAS THREA TENED OR COERCED TO SIGN THE STATEMENT DATED 24.8.2006, RECORDED AT THE TIME OF THE SEARCH. IN THIS REGARD, FIRSTLY, IT REMAINS UNREBUTTED THAT NO NOTICE U/S 131 OF THE I.T. ACT WAS EVER SERVED ON SHRI RAM LAL. SHRI RAM LAL HAS TAKEN THIS ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 18 POSITION IN HIS STATEMENT BEFORE THE AO AND ALSO IN HIS AFFIDAVIT DATED 24.11.2008. THE AO NOWHERE REFUTED SUCH STAND TAK EN BY SHRI RAM LAL. THE LD. CIT(A) HAS COMPLETELY IGNORED THIS ASPECT O F THE MATTER. THE STATEMENT OF SHRI RAM LAL WAS RECORDED U/S 131 AT S ONEPAT BY ITO, SONEPAT, WHEN NO PROCEEDINGS WERE PENDING AGAINST H IM. IN THE FOLLOWING CASES, IT HAS BEEN HELD THAT WHEN NO PROC EEDINGS ARE PENDING, NO SUMMONS U/S 131(1) CAN BE ISSUED:- 1. ACIT V. BALDEV PLAZA, 93 ITD 579(ALL); 2. CHOUDHARY BUILDERS (P)LTD. V. PRINCIPAL SECRETARY, UNION OF INDIA & ORS., 209 CTR 133(MP)/295 ITR 98(MP); 3. RINA SEN V. CIT, 235 ITR 219, 225-26(PAT); 4. JAMNA DAS MADHAV JI&CO. V. ITO, 162 ITR 331(BOM). 20. FURTHER, SHRI RAM LAL HAD CATEGORICALLY CONTEND ED BEFORE THE AO THAT HE WAS SICK AT THE TIME OF RECORDING OF HIS ST ATEMENT ON 24.8.2006, SINCE HE WAS A HANDICAPPED PERSON AND A TUMOR HAD D EVELOPED IN HIS SPINAL CHORD, DUE TO WHICH, BOTH OF HIS LEGS HAD GO T DILAPIDATED AND HE WAS UNABLE TO WALK PROPERLY AND BESIDES,HE WAS SUFF ERING FROM DIABETES ; THAT THE SEARCH TEAM HAD COME TO HIS RESIDENCE WITH OUT ANY WARRANT; THAT HE HAD BECOME NERVOUS DUE TO THE PRESENCE OF SO MA NY OFFICERS/OFFICIALS; THAT THE SEARCH TEAM HAD COME PREPARED WITH ALL BAN K DETAILS AND FDRS; THAT THEY HAD ASKED QUESTIONS AND NOT WRITING WHAT HE WAS STATED, THEY ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 19 JUST WROTE DOWN WHATEVER THEY WANTED FROM DETAILS O F BANK ACCOUNTS THAT THEY WERE CARRYING; THAT THE STATEMENT RECORDED BY THE SEARCH TEAM HAD BEEN RECORDED OF THEIR OWN ACCORD AND HE HAD BEEN F ORCED TO APPEND HIS SIGNATURE THEREON; AND THAT THEY DID NOT READ OVER THE STATEMENT TO HIM, NOR WAS HE ALLOWED TO READ IT. THESE SPECIFIC AVER MENTS WERE MADE BY THE ASSESSEE BY WAY OF A LETTER TO THE AO ALONG WIT H OTHER DOCUMENTS. A COPY OF HIS HANDICAPPED CERTIFICATE HAD ALSO BEEN F ILED. BESIDES, HE HAS ALSO FURNISHED HIS AFFIDAVIT. 21. HOWEVER, THE AO DID NOT MEET ANY OF HIS AVERMEN TS POINT-WISE. HE MERELY OBSERVED THAT HIS SUBSEQUENT STATEMENT WA S AN AFTER-THOUGHT, WHEREAS THAT MADE BEFORE THE OFFICIALS OF THE INVES TIGATION WING OF THE DEPARTMENT ON 24.8.2006 HAD BEEN IMPROMPTU AND AS SUCH, IT CARRIED MORE WEIGHT. 22. THE LD. CIT(A) HAS ALSO NOT TAKEN THIS ASPECT O F THE MATTER INTO CONSIDERATION AT ALL. IN THE IMPUGNED ORDER, HE HAS NOT EVEN MADE REFERENCE TO THESE SPECIFIC ASSERTIONS MADE BY RAM LAL AND IT HAS BEEN OBSERVED THAT THERE IS NOTHING ON RECORD TO SUGGEST THAT SHRI RAM LAL WAS THREATENED OR COERCED TO SIGN THE STATEMENT REC ORDED ON 24.8.2006. THE LD. CIT(A) DISBELIEVED RAM LALS A FFIDAVIT, SAYING THAT IT HAD BEEN FILED AFTER A LAPSE OF MORE THAN T WO YEARS AND THAT IF HE ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 20 HAD BEEN COERCED INTO SIGNING THE STATEMENT, HE WOU LD HAVE RETRACTED IT ON THE FIRST AVAILABLE OPPORTUNITY. 23. APROPOS THE ISSUE OF SHRI RAM LAL HAVING MADE T HE RETRACTION AFTER TWO LONG YEARS OF RECORDING OF HIS STATEMENT ON 24.8.2006, IT IS NOTED THAT THE FIRST OPPORTUNITY T O DO THIS BECAME AVAILABLE TO SHRI RAM LAL ONLY IN THE ASSESSMENT PR OCEEDINGS OF THE ASSESSEE AND IT WAS AT THIS FIRST AVAILABLE OPPORTU NITY THAT HE MADE THE RETRACTION BY WAY OF THE AFORESAID LETTER AND HIS S TATEMENT BEFORE THE AO, ACCOMPANIED BY HIS AFFIDAVIT, HANDICAP CERTIFIC ATE AND OTHER DOCUMENTS. IN THIS VIEW OF THE MATTER, THE LAPSE O F TWO YEARS BETWEEN THE RECORDING OF THE FIRST STATEMENT OF RAM LAL ON 24.8.2006 AND HIS SUBSEQUENT STATEMENT IN THE ASSESSMENT PROCEEDINGS CANNOT BE TAKEN TO BE A CIRCUMSTANCE GOING AGAINST THE ASSESSEE. 24. AS FOR THE CIT(A)S OBSERVATIONS OF THE FIRST S TATEMENT OF RAM LAL BEING HIS FIRST SPONTANEOUS IMPROMPTU VERSI ON, WHICH OUGHT TO TAKE PRECEDENCE OVER THE SECOND STATEMENT, IN TH E FACE OF THE UNREBUTTED ASSERTION OF RAM LAL REGARDING NO NOTICE U/S 131 OF THE ACT HAVING BEEN ISSUED TO HIM, HE BEING A HANDICAPP ED PERSON HAVING A TUMOR IN HIS SPINAL CHORD AFFECTING BOTH HIS LEGS , DUE TO WHICH HE WAS UNABLE TO WALK PROPERLY AND HIS BEING A DIABETE S, COUPLED WITH ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 21 THE FACT THAT THE SEARCH TEAM COMPRISED OF NUMEROUS OFFICERS/OFFICIALS WHO ENTERED WITHOUT WARRANT OF AUTHORIZATION AND RE CORDED THE STATEMENT AND HIS HAVING BECOME NERVOUS DUE TO HIS CONDITION, SHRI RAM LALS FIRST STATEMENT CANNOT AT ALL BE SAID TO BE ANY STATEMENT IN THE EYE OF LAW, MUCH LESS AN IMPROMPTU STATEMENT. 25. THE LD. CIT(A) IS FURTHER NOT CORRECT IN OBSER VING THAT THE STATEMENT MADE BY SHRI RAM LAL ON 24.11.2008 BEFORE THE AO, WAS A DOCTORED STATEMENT. THERE IS NOTHING ON RECORD TO ARRIVE AT SUCH A CONCLUSION. 26. SOFAR AS REGARDS THE CIT(A)S OBSERVATIONS THAT THE SALE PROCEEDS RECEIVED BY RAM LAL ON ACCOUNT OF THE SAL E OF PLOT OF LAND STOOD CORROBORATED WITH THE ENTRIES IN HIS BANK PAS S BOOK AND THAT IT WAS NOT BELIEVABLE THAT THE RETIRAL BENEFITS RECEIV ED BY HIM WERE WHAT HAD BEEN REFLECTED IN THE BANK PASS BOOK, SHRI RAM LAL HAD PRODUCED BEFORE THE AO, A CERTIFICATE FROM THE SUPDT., FOOD AND SUPPLIES DEPARTMENT, SONEPAT, CONCERNING THE RELEASE OF HIS RETIREMENT BENEFITS. A COPY OF THIS CERTIFICATE IS AT APB 57 . ACCORDING TO THIS CERTIFICATE, THE FOLLOWING WERE THE RETIRAL BENEFIT S RECEIVED BY SHRI RAM LAL:- ` 1. COMMUTATION OF PENSION 2,09,242/- ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 22 2. DCRG 1,91,582/- 3. GPF 4,29,175/- 4. LEAVE ENCASHMENT 1,16,950/- 5. GIS 7,724/- 27. NOW, SOFAR AS REGARDS THE AO, THOUGH HE HAS NOT ED IN PARA 6.6 AT PAGE 7 OF THE ASSESSMENT ORDER THAT THIS CER TIFICATE WAS PRODUCED BEFORE HIM, THERE IS NO FINDING THAT THIS CERTIFICA TE WAS FALSE. ACCORDINGLY, IT IS TO BE TAKEN THAT THIS CERTIFICAT E WAS NOT DISPUTED BY THE AO. AS FOR THE LD. CIT(A), HE HAS NOT EVEN ME NTIONED THIS CERTIFICATE IN THE IMPUGNED ORDER AND HE HAS GONE B Y THE GENERAL PROPOSITION THAT THE RETIRAL BENEFITS OF GOVERNMENT EMPLOYEES ARE GENERALLY RECEIVED BY CHEQUES. 28. THE LD. CIT(A) HAS THEN OBSERVED THAT IT WAS F OR RAM LAL TO SHOW AS TO HOW HE UTILIZED HIS RETIRAL BENEFITS BY HELP OF HIS BANK PASS BOOK AND TO SHOW THAT THE CASH WAS AVAILABLE WITH H IM FOR DEPOSITING IN THE BANK ACCOUNT, AS CLAIMED. SHRI RAM LAL, AS OBSERVED IN THE ASSESSMENT ORDER (PAGE 7, PARA 6.6) ALSO EXPLAINED THAT AN AMOUNT OF ` 3.5 LAKHS WAS DEPOSITED IN HIS BANK ACCOUNT ON 15.5 .2003 AND THAT OF ` 5 LAKHS WAS DEPOSITED ON 9.7.2003 AND THAT THESE A MOUNTS WERE OUT OF HIS RETIRAL BENEFITS AND NOT OUT OF THE SALE PRO CEEDS OF THE PLOT IN QUESTION. NEITHER OF THE AUTHORITIES BELOW HAS BR OUGHT ANYTHING TO ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 23 THE CONTRARY ON RECORD. THAT BEING SO, THE LD. CI T(A) HAS ERRED IN DISBELIEVING THE STAND TAKEN BY RAM LAL IN THIS CON CERN. 29. FURTHER, RAM LAL PRODUCED A COPY OF THE REGISTE RED SALE DEED OF HIS NEW HOUSE TO SUBSTANTIATE THAT IT WAS P URCHASED FOR ` 5,82,000/- ONLY AND NOT FOR ` 24,00,000/-, AS ALLEGEDLY RECORDED IN THE STATEMENT DATED 24.8.2006, AT THE TIME OF THE SEARC H. MOREOVER, THERE IS NO EVIDENCE ON RECORD TO THE EFFECT THAT THE AGR EEMENT OF THE PROPERTY IN QUESTION WAS DONE NEAR 15.5.2003, WHEN CASH OF ` 3.50 LAKHS WAS FOUND TO HAVE BEEN DEPOSITED IN HIS BANK ACCOUNT. STILL FURTHER, REMARKABLY, NO ACTION WAS TAKEN BY THE DEP ARTMENT AGAINST RAM LAL BY ASSESSING THE PURPORTED SALE CONSIDERATI ON OF ` 41.81 LAKHS. 30. IN VIEW OF THE ABOVE, WE ARE UNABLE TO SUBSCRIB E TO THE VIEW OF THE LD. CIT(A) THAT HEREIN, THE CIRCUMSTANTIAL E VIDENCE IS SO STRONG AS TO LEAD TO THE CONCLUSION THAT ON MONEY WAS PAID BY THE ASSESSEE FOR THE PURCHASE OF THE PLOT. 31. FURTHERMORE, IT IS TRITE LAW THAT IN THE ABSENC E OF THE DOCUMENTARY EVIDENCE TO THE CONTRARY, THE RECITALS IN A SALE DEED ARE TO BE ACCEPTED AS THEY ARE. ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 24 32. IN VIEW OF THE ABOVE DISCUSSION, THE GRIEVANCE OF THE ASSESSEE IN THIS REGARD IS FOUND TO BE CORRECT AND IS ACCEPTED AS SUCH. WE HOLD THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF ` 16,77,500/- AS ALLEGED INVESTMENT BY THE ASSESSEE I N THE PURCHASE OF PROPERTY IN SHARE AT REWARI. 33. THE OTHER ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF ` 7,81,900/- AS AN EXTRA AMOUNT OF CONSTRUCTION EXPENSES, BY RELYING ON THE REPORT OF THE DVO, ROHTAK. 34. THE AO OBSERVED THAT THE ASSESSEE HAD DISCLOSED AN AMOUNT OF ` 7,29,895/-, AS INVESTMENT IN THE BUILDING. THE AO REFERRED THE VALUATION TO THE DVO U/S 142 A OF THE ACT. THE DV O ESTIMATED THE COST OF BUILDING AT ` 60,03,600/-. THE SHARE OF THE ASSESSEE WAS ESTIMATED AT ` 46,78,964/- AND THE BALANCE WAS ATTRIBUTED TO THE ASSESSEES WIFE, DR.(MRS.)ABHA GOEL. THE INVESTME NT DURING THE YEAR UNDER CONSIDERATION WAS DETERMINED BY THE DVO AT ` 17,78,602/-. THE AO MADE ADDITION OF ` 7,81,900/-, GIVING ALLOWANCE OF 15% ON ACCOUNT OF SUBJECTIVITY IN THE DVOS REPORT. ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 25 35. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THIS ADDITION. 36. IN THIS REGARD, THE STAND OF THE ASSESSEE IS TH AT THERE WAS NO EVIDENCE FOUND AS A RESULT OF THE SEARCH CONDUCTED, TO SHOW THAT MORE INVESTMENT HAD BEEN MADE IN CONSTRUCTION THAN HAD B EEN SHOWN; THAT THE AO BASED HIS FINDINGS MERELY ON THE DVOS REPOR T; AND THAT THE ISSUE OF INVESTMENT IN CONSTRUCTION CANNOT BE REOPE NED U/S 153 A OF THE ACT, IN VIEW OF THE FOLLOWING DECISIONS:- 1. SH.ANIL KUMAR BHATIA IN ITA 2660-2665/2009, DATE OF ORDER 01.01.2010 AND FINDING OF THIS VERY JUDGMENT HAS BEEN AFFIRMED BY HONBLE MUMBAI ITAT IN THE CASE OF ANIL P. KHIMANI V. DCIT IN ITA 2855-2860/2008, DATE OF ORDER 23.02.2010; 2. MEGHMANI ORGANICS LTD. V. DCIT IN ITA 2909- 2913/2008, DATE OF LORDER 19.01.2009(ITAT, AHMEDABAD); 3. DCIT V. MEGHMANI INDUSTRIES IN ITA 3400-3402/2008, DATE OF ORDER 16.01.2009. (ITAT, AHMEDABAD); 4. LMJ INTERNATIONAL LTD. V. DCIT, 119 TTJ 214. 37. THE LD. DR HAS, ON THE OTHER HAND, STRONGLY SUP PORTED THE IMPUGNED ORDER, CONTENDING THAT THE ASSESSEE HAS MO RE THAN ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 26 REASONABLY BEEN GRANTED 15% MARGIN OUT OF THE VALUE AS DETERMINED BY THE DVO. 38. IN ORDER TO PROVE MORE INVESTMENT HAVING BEEN M ADE THAN THAT DECLARED, IT IS FOR THE DEPARTMENT TO BRING MA TERIAL ON RECORD. IN THE PRESENT CASE, IN THE SEARCH CONDUCTED, OR AS A RESULT THEREOF, NO EVIDENCE WAS FOUND TO SHOW ANY SUCH INVESTMENT OVER AND ABOVE THAT SHOWN TO HAVE BEEN MADE IN THE CONSTRUCTION. MOREO VER, THIS ISSUE STOOD DULY CONSIDERED BY THE AO IN THE ORIGINAL ASS ESSMENT PROCEEDINGS. THE FINDINGS IN THE ORIGINAL ASSESSM ENT PROCEEDINGS WERE BASED ON THE REPORT OF THE REGISTERED VALUER. IN THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 2001-02 TO 2007-08 , ALL THE SEIZED DOCUMENTS WERE CHECKED AND CASH WAS ALSO TALLIED. NO ADDITION WAS MADE TO THE RETURNED INCOME. THE DEPARTMENT, THER EBY ACCEPTED THE STAND TAKEN BY THE ASSESSEE. 39. IN VIEW OF THE ABOVE, WE HOLD THAT SINCE NO MAT ERIAL WAS FOUND DURING THE COURSE OF SEARCH, THE ADDITION WAS NOT WARRANTED. ACCORDINGLY, THIS GRIEVANCE BY WAY OF GROUND NO.4 O F THE ASSESSEE IS ALSO ACCEPTED. 40. CONSEQUENTLY, ITA NO. 3194 (DEL)2010 FILED BY T HE ASSESSEE IS ALLOWED. ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 27 ITA NO. 3195(DEL)2010: 41. IN THIS APPEAL FOR ASSESSMENT YEAR 2005-06, TH E ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMI NG THE ADDITION OF ` 11,95,700/- ON ACCOUNT OF EXTRA CONSTRUCTION COST B Y CONSIDERING THE REPORT OF THE DVO, IGNORING THAT THE CONSTRUCTION C OST HAS ALREADY BEEN ACCEPTED BY THE DEPARTMENT IN THE ASSESSMENT PROCEE DINGS U/S 143(3) OF THE ACT IN THE CASE OF THE ASSESSEE, SUPPORTED WITH ALL DOCUMENTS, CHART AND VALUATION OF REGISTERED VALUER, WHEN NO MATERIA L WAS FOUND DURING THE COURSE OF THE SEARCH. 42. THIS ISSUE IS EXACTLY SIMILAR TO GROUND NO.4 IN ITA NO. 3194 (DEL)2010(SUPRA). OUR OBSERVATIONS MADE THEREIN A RE, THEREFORE, MUTATIS MUTANDIS, APPLICABLE HERETO ALSO. 43. ACCORDINGLY, THE GRIEVANCE OF THE ASSESSEE IN T HIS REGARD IS ALSO ACCEPTED AND CONSEQUENTLY, ITA NO. 3195(DEL)2 010 IS ALLOWED. ITA NO. 3197(DEL)2010: 44. THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2 004-05. GROUND NOS. 1 TO 4 ARE SIMILAR TO GROUNDS IN ITA NO. 3194( DEL)10. OUR OBSERVATIONS MADE THEREIN ARE, THEREFORE, MUTATIS M UTANDIS, APPLICABLE HERETO ALSO. CONSEQUENTLY, ITA NO. 3197(DEL)2010 IS ALLOWED. ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 28 ITA NO. 3198 (DEL)2010: 45. THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2 005-06. GROUND NOS. 1 & 2 ARE EXACTLY SIMILAR TO GROUNDS IN ITA NO . 3195(DEL)10. CONSEQUENTLY, ITA NO. 3198 (DEL)2010 IS ALLOWED. 46. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.06..2011 . SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 01.06.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR ITA NOS. 3194 & 3195(D EL)10& 319 7 & 3198(DEL)10 29