Asha Aggarwal, New Delhi V. DCIT, New Delhi

ITA 3668/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3373 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Unexplained investment; Search and seizure; Document seized; Opportunity of cross examination; Documents seized
• Section: 153A; 132

Judgement Text

+ IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3668 /DEL/201 4 [ASSESSMENT YEAR: 20 09 - 10 ] SMT. ASHA AGGARWAL VS. THE D .C.I.T B 312, SARASWATI VIHAR CENTRAL CIRCLE - 1 6 NEW DELHI NEW DELHI PAN : A A TPA 0581 F [APPELLANT] [RESPONDENT] DATE OF HEARING : 27 .1 1 .2017 DATE OF PRONOUNCEMENT : 21 . 01 .201 8 ASSESSEE BY : SHRI VED JAIN , ADV REVENUE BY : S MT. APARNA KARAN, CIT - DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 2 4 . 04 .201 4 OF COMMISSIONER OF INCOME TAX (APPEALS) - XXX II, NEW DELHI AND RELATES TO ASSESSMENT YEAR 2009 - 10. 2 2. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON THE ASSESSEE ON 10 TH FEBRUARY, 2011. DURING THE COURSE OF THE SEARCH, DOCUMENT IDENTIFIED AS MA 1/ ANX. A - 1 / PAGE 39 & 40 AND MA 1/PAGE 66 - 72 WERE FOUND. THESE DOCUMENTS WERE COPY OF AGREEMENT TO SELL AND COPY OF REGISTERED SALE DEED RESPECTIVELY IN RESPECT OF A PROPERTY AT AMBALA. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A, T HE AO ASKED THE ASSESSEE TO EXPLAIN THE DIFFERENCE IN THE CONSIDERATION STATED IN THESE TWO DOCUMENTS. NOT BEING SATISFIED WITH THE REPLY OF THE ASSESSEE, THE AO MADE ADDITION OF THE DIFFERENCE AMOUNT OF RS. 50,16,000/ - IN THE HANDS OF THE ASSESSEE ALLEGIN G THAT THE SAID DIFFERENCE AMOUNT HAS BEEN PAID BY THE ASSESSEE FROM ITS UNDISCLOSED SOURCES. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED THE ADDITION MADE BY THE AO. 3. FURTH E R A GGRIEV ED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 3 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE PROCEEDINGS INITIATED UNDER SECTION 153A AGAINST THE APPELLANT AND THE AS SESSMENT FRAMED UNDER SECTION 153A/143(3) ARE IN VIOLATION OF THE STATUTORY CONDITIONS OF THE ACT AND THE PROCEDURE PRESCRIBED UNDER THE LAW AND AS SUCH THE SAME IS BAD IN THE EYE OF LAW AND LIABLE TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE PROCEEDINGS INITIATED UNDER SECTION 153A ARE BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING FOUND. 4(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF AN AMOUNT OF RS.50,16,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY. (II) THAT THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT NO ADDITION ON THE BASIS OF AN UNSIGNED, UNDATED AND UNREGISTERED DOCUMENT FOUND DURING THE COURSE OF SEARCH CAN BE MADE. 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION MADE BY THE AO D ESPITE THE DETAILED EXPLANATION AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. 4 (II) THAT THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE FACT THAT THE PRESUMPTION UNDER SECTION 132(4A) IS A REBUTTABLE PRESUMPTION AND THE ASSESSEE HA S PROVIDED A VALID EXPLANATION TO REBUT THE SAME. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN RELYING UPON THE STATEMENT WITHOUT GIVING ANY OPPORTUNITY OF CROSS EXAMINATION. 7. THE APPELLANT CRAVE S LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4. GROUND NO. 1 TO 3 WERE NOT PRESSED BY THE LD. AR AND AS SUCH THE SAME ARE DISMISSED AS NOT PRESSED. 5. GROUND NO. 4 TO 6 ARE ON THE MERIT OF ADDITION OF RS. 50,16,000/ - IN THE HANDS OF THE ASSESSEE. IT WAS CONTENDED BY THE LD. AR THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) ARE UNTENABLE IN THE HANDS OF THE ASSESSEE. IN THIS REGARD IT WAS CONTENDED THAT A PERUSAL OF THE AGREEMENT TO SALE, ON WHICH THE AO AS WELL AS THE LD. CI T(A) HAVE RELIED, WOULD CLEARLY SHOW THAT THE SAME WAS NEITHER REGISTERED, NOR SIGNED BY THE ASSESSEE AND NOT EVEN DATED, AS AGAINST THE REGISTERED DEED, WHICH WAS ENTERED INTO BY THE ASSESSEE FOR PURCHASE OF THE SAID PROPERTY. ANOTHER IMPORTANT FACT TO BE 5 APPRECIATED IS THAT IN THE AGREEMENT TO SELL (PB 2 - 3), ON WHICH THERE IS NO SIGNATURE OF THE ASSESSEE, THE SOLE OWNER MENTIONED OF THE PROPERTY IS SH. SUNIL KUMAR, WHILE IN THE REGISTERED SALE DEED ( PB 6 12 ), SH. SUNIL KUMAR AND SH. KARTIKEY BATLA ARE STATED TO BE THE CO - OWNERS OF THE PROPERTY. THE SALE DEED, BEING A REGISTERED DOCUMENT, DULY MADE IN THE PRESENCE OF STAMP VALUATION AUTHORITIES, HAS IN ANY CASE, MORE SANCTITY THAN A DUMB NON - REGISTERED AND NON - SIGNED DOCUMENT, WHEREIN EVEN THE FACTS RECORDED ARE NOT TRUE. THE MERE FACT THAT THE AGREEMENT TO SELL WAS FOUND AT ASSESSEES PREMISES DURING THE COURSE OF SEARCH IS NOT CONCLUSIVE TO ALLEGE THAT THE ASSESSEE HAD MADE PART PAYMENT IN CASH, AND THAT TOO OUT OF HER INCOME FROM UNDISCLOSED SOURC ES. IT IS PERTINENT TO MENTION HERE THAT AN UNSIGNED AGREEMENT FOR PURCHASE OF PROPERTY CANNOT BE A MATERIAL TO RELY UPON, WHEN THE REGISTERED SALE DEED WAS ALSO FOUND DURING THE COURSE OF SEARCH. 6. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE JU DGMENT OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT V. SMT. NALINI DEVI IN ITA NO. 232 OF 2013 DATED 10.07.2013, WHEREIN CONSIDERING SIMILAR SET OF FACTS, THE HONBLE COURT CONCLUDED AS UNDER: 6 IT APPEARS, THE ASSESSING OFFICER HAD RELIED ON A P HOTOCOPY OF AN UNSIGNED SALE AGREEMENT IN ORDER TO FIND THAT CONSIDERATION AMOUNT HAS BEEN PAID AT RS.1,68,00,000/ - . THEREFORE, THIS AMOUNT WAS NOT DISCLOSED. THE LEARNED TRIBUNAL HAS CORRECTLY CONCLUDED THAT UNSIGNED PHOTOCOPY OF THE AGREEMENT FOR PURCHAS E OF THE PROPERTY CANNOT BE A MATERIAL TO RELY ON, WHEN THE REGISTERED SALE DEED HAS BEEN PRODUCED AND THE SAME SHOWS THAT THE PROPERTY WAS PURCHASED AT A PRICE OF RS.23,50,000/ - . THIS REGISTERED SALE DEED WAS DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT. ACCORDING TO US, THE AGREEMENT OF SALE LOSES ITS FORCE, THE MOMENT REGISTERED SALE DEED IS EXECUTED. IF THE PROPERTY HAS BEEN PURCHASED AT A HIGHER PRICE THAN THAT OF MENTIONED IN THE PURCHASE DEED, THEN THE ONUS IS ON THE ASSESSING OFFICER TO ESTABLISH TH AT, AS HAS BEEN RIGHTLY CONCLUDED BY THE TRIBUNAL ON THIS ISSUE. MOREOVER, PHOTOCOPY OF THE UNSIGNED AGREEMENT HAS GOT NO EVIDENTIARY VALUE. THE ASSESSING OFFICER HAS DONE A GUESS WORK WHILE COMING TO THE CONCLUSION THAT THE PRICE OF THE PROPERTY IS MORE T HAN MENTIONED IN THE SALE DEED. THERE MUST BE SOME MATERIAL AND BASIS TO CONCLUDE THAT THE PURCHASE HAS BEEN MADE AT AN UNDER VALUATION. 7. THE LD. AR ALSO PLACED RELIANCE ON THE FOLLOWING JUDGMENTS: A) CIT V. FAIRDEAL TEXTILE PARK (P.) LTD. 362 ITR 497 (GUJ) B) DCIT V. RAJAT AGARWAL 144 TTJ 753 (JAIPUR) 7 8. THE LD. AR FURTHER ARGUED THAT IT WAS SUBMITTED BEFORE THE AO, AS WELL AS THE LD. CIT(A) THAT THE PROPERTY UNDER CONSIDERATION WAS PURCHASED BY SH. SUNIL KUMAR ON 25.01.2006 FOR RS.2.20 LAKHS. A COPY OF THE PURCHASE DEED OF THE SAID PROPERTY WAS ALSO SUBMITTED BEFORE THE AO AND THE LD. CIT(A). AFTER A PERIOD OF AROUND 3 YEARS, THE SAID PROPERTY WAS TRANSFERRED TO THE ASSESSEE VIA A REGISTERED DEED FOR AN AMOUNT OF R S.5.50 LAKHS. HOWEVER, IT IS IMPROBABLE TO SAY THAT A PROPERTY WORTH RS.2.20 LAKHS WOULD FETCH A PRICE OF RS.55.67 LAKHS ONLY AFTER A SPAN OF 3 YEARS. THE AO, AS WELL AS THE LD. CIT(A) HAVE NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT THE ALLEGATION THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT IN EXCESS OF THE AMOUNT MENTIONED IN THE REGISTERED DEED, AND THEREFORE, IN THE ABSENCE OF THE SAME, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) HAS TO BE DELETED. 9. IN SUPPORT OF THE ABOVE PROPOSITION THE LD. AR PLACED RELIANCE ON THE FOLLOWING JUDGMENTS: CIT V. PREM PRAKASH NAGPAL [2014] 220 TAXMAN 168 (DELHI) ITO V. DUA AUTO COMPONENTS (P.) LTD. [2011] 135 TTJ 621 (DELHI) JAWAHARBHAI ATMARAM HATHIWALA V. ITO [2010] 128 TTJ 36 (AHD) 8 10 . IT WAS FURTHER CONTENDED THAT THE RECEIPT OF RS.7 LAKHS, ON WHICH THE AO AS WELL AS THE LD. CIT(A) HAVE RELIED UPON WHILE MAKING THE IMPUGNED ADDITION HAS BEEN EXECUTED BY SHASHI KANT AGARWAL AND NOT THE ASSESSEE. ALSO, THE SAID RECEIPT DOES NOT EVEN HAVE ANY MENTION AS TO IN RESPECT OF WHICH ASSET / PROPERTY THE SAID PAYMENT HAS BEEN MADE. THEREFORE, THE ACTION OF THE AO IN MAKING THE ADDITION ON THE BASIS OF SAID RECEIPT IS MERELY ON THE BASIS OF SURMISES AND CONJECTURES. THE LD. AR FURTHER CONTENDED THAT THE AO AS WELL AS THE LD. CIT(A) HAVE ALSO RELIED UPON THE STATEMENT OF SH. SUNIL KOHLI, RECORDED AT THE BACK OF ASSESSEE, DURING THE POST SEARCH ENQUIRIES. THE ASSESSEE WAS NEVER GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE SAID PARTY. THE ASSESSEES INCOME IS TO BE ASSESSED ON THE BASIS OF THE MATERIAL WHICH IS ORDINARILY REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF ASSESSMENT, AND NOT ON THE BASIS OF A STATEMENT OF A THIRD PARTY, IF NO OPPORTUNITY OF CROSS EXAMINATION OF THE SAME HAS BEEN GIVEN TO THE ASSE SSEE. IT IS A WELL SETTLED LAW THAT ANY ADVERSE INFERENCE ON THE BASIS OF MATERIAL COLLECTED ON THE BACK OF THE ASSESSEE, WITHOUT AFFORDING ANY OPPORTUNITY OF CROSS EXAMINATION OR REBUTTAL IS NOT ADMISSIBLE AS VALID EVIDENCE AND HENCE, CANNOT BE THE BASIS FOR MAKING ANY ADDITION. IN SUPPORT OF THE ABOVE PROPOSITION, THE LD. AR RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF ANDAMAN TIMBER 9 INDUSTRIES V. CCE IN CIVIL APPEAL NO. 4228 OF 2006 DATED 02.09.2015 AND ALSO ON FOLLOWING JU DGMENTS: PRAKASH CHAND NAHATA VS. UNION OF INDIA 163 CTR 310 (SC) KISHAN CHAND CHELLARAM VS. CIT 125 ITR 713 (SC) CIT VS. SMC SHARE BROKERS LTD. 288 ITR 345 (DEL.) 11. THE LD. AR FURTHER SUBMITTED THAT ADDITION OF RS. 36 LAKH IN ANY CASE CANNOT BE MADE IN THIS YEAR AS THE DOCUMENT ON WHICH RELIANCE IS PLACED MAKE A REFERENCE OF 17 TH APRIL, 2009 WHICH DOES NOT FALL IN THIS ASSESSMENT YEAR. IN VIEW OF THE ABOVE FACTS AND THE JUDGMENTS CITED, THE LEARNED AR PLEADED THAT THE ADDITION MADE BY THE AO AND SUSTAI NED BY THE LD. CIT(A) IS BAD IN LAW AND LIABLE TO BE DELETED. 12. IN REPLY, THE LD. DR SUBMITTED THAT THIS IS A CASE WHERE THE DIFFERENCE IN THE VALUE OF THE TWO AGREEMENTS IS QUITE CLEAR. THE ASSESSEE HAS PURCHASED THE PROPERTY. THIS FACT IS NOT DENIED. THE ASSESSEE HAS MADE THE PAYMENT BY CHEQUE WHICH IS ALSO NOT DENIED. THUS, THE PRESUMPTION WILL BE AGAINST ASSESSEE OF HAVING MADE THE PAYMENT IN CASH. IN VIEW OF THE FACTS FOUND DURING THE COURSE OF SEARCH AND THE FACTS BROUGHT ON RECORD BY THE AO DURING THE COURSE OF THE ASSESSMENT, THE LD. DR PLEADED THAT ADDITION NEED TO BE CONFIRMED. 10 13. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE LD. AR AS WELL AS DR. WE HAVE PERUSED THE PAPER BOOK. THE ONLY DISPUTE IN THIS CASE IS THE ADDITION OF RS. 50,16,000 / - MADE BY THE AO ON ACCOUNT OF THE DIFFERENCE IN THE VALUE STATED IN THE AGREEMENT TO SELL AND THE SALE DEED. DURING THE COURSE OF THE SEARCH, THESE DOCUMENTS WERE FOUND. 14. NOW THE ISSUE IS WHETHER ON THE BASIS OF THESE DOCUMENTS THE ADDITION CAN BE M ADE IN THE HANDS OF THE ASSESSEE. ON GOING THROUGH THE SEIZED DOCUMENTS PLACED AT PB. PG. 4, WE NOTE THAT IT IS A RECEIPT ISSUED BY MR. SUNIL KUMAR OF HAVING RECEIVED RS. 7 LAKH FROM MR. SHASHI KANT AGARWAL. THERE IS NO NAME NOR ANY SIGNATURE OF THE ASSES SEE ON THIS RECEIPT. SIMILARLY, ON THE BOTTOM SIDE OF THIS PAGE, THERE IS A RECEIPT OF RS. 36 LAKH IN CASH FROM SH. SHASHI KANT AGARWAL. AGAIN THERE IS NO NAME OF THE ASSESSEE. THIS DOCUMENT WAS ALSO FOUND DURING THE SEARCH. THE CONTENT OF THIS DOCUMENT HA S TO BE TAKEN INTO ACCOUNT IN VIEW OF THE PROVISIONS OF SECTION 132 (4A). AS PER THIS SECTION 132 (4A) WHERE ANY DOCUMENTS ARE FOUND DURING THE COURSE OF A SEARCH, IT MAY BE PRESUMED THAT THE CONTENTS OF SUCH DOCUMENTS ARE TRUE. APPLYING THIS PRESUMPTION, ONE HAS TO CONSIDER THAT WHAT IS STATED IN THESE DOCUMENTS AS TRUE. A READING OF THIS DOCUMENT CLEARLY SHOW THAT CASH HAS BEEN RECEIVED FROM MR. SHASHI KANT AGARWAL AND NOT FROM THE 11 ASSESSEE. EVEN THE AGREEMENT TO SELL WHICH HAS BEEN FOUND DURING THE COURS E OF THE SEARCH DOES NOT HAVE THE SIGNATURE OF THE ASSESSEE. ACCORDINGLY, NO PRESUMPTION CAN BE DRAWN AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE VIEW THAT THE AO AND THE CIT(A) HAVE GONE WRONG IN DRAWING PRESUMPTION AGAINST THE ASSESSE E AND MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. THE CIT(A) HAVING NOTED THESE FACTS THAT THE ACKNOWLEDGEMENT RECEIPT DATED 17 TH APRIL, 2009 ISSUED BY MR. SUNIL KUMAR KOHLI, IS TO THE EFFECT THAT THIS CASH HAS BEEN RECEIVED FROM MR. SHASHI KANT AGARWAL, HUSBAND OF THE APPELLANT, STILL INVOKED PRESUMPTION UNDER SECTION 132 (4A) AGAINST THE ASSESSEE. IT IS A SETTLED LAW THAT THE PRESUMPTION HAS TO BE STRICTLY DRAWN AND THIS CANNOT BE SHIFTED MERELY BECAUSE THE ASSESSEE IS WIFE OF MR. SHASHI KANT AG ARWAL. WE ARE ALSO CONSCIOUS OF THE FACT THAT THE PRESUMPTION UNDER SECTION 132 (4A) IS A REBUTTABLE PRESUMPTION. HOWEVER, NO FACTS OR EVIDENCES HAVE BEEN BROUGHT ON RECORD BY THE AO SO AS TO REBUT THE PRESUMPTION OF SECTION 132(4A) THAT THE CASH HAS BEEN PAID BY THE ASSESSEE AND NOT BY THE PERSON WHOSE NAME IS STATED THEREIN. THE ASSESSEE IS AN INDIVIDUAL AND IN THE ABSENCE OF ANY MATERIAL, IT CANNOT BE PRESUMED THAT THIS CASH WOULD HAVE EMANATED FROM HER. NO EVIDENCE TO THIS FACT WERE FOUND DURING THE COU RSE OF THE 12 SEARCH. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ADDITION IN THE HANDS OF THE ASSESSEE ARE UNTENABLE AND THE SAME IS DIRECTED TO BE DELETED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 3668 /DEL/201 4 IS ALLOWED. THE ORDER IS PRONOU NCED IN THE OPEN COURT ON 2 1 . 0 2 .2018 . SD/ - SD/ - [ SUDHANSHU SRIVASTAVA ] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 S T FEBRUARY , 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI