SANJAY KOHLI, MUMBAI V. ASST CIT CC 25, MUMBAI

ITA 3831/MUM/2012

• Counselvise Citation: 383119914 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 30-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIPUL B JOSHI; NISHIT GANDHI
• Assessee Lawyers: MANJUNATHA SWAMY
• Keywords: Sale consideration of property below Jantri Value; Gift; Search and seizure; Share purchase agreement
• Section: 132; 143(3); 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM) , AND B.R.BASKARAN (AM) , ! ' # . . , ./I.T.A. NO.3831/MUM/2012 ( / ASSESSMENT YEAR : 2003-04) SHRI SANJAY KOHLI 1101-1106, OCEAN VIEW BUILDG, DECCAN CHS, UNION PARK, KHAR (W), MUMBAI-400052 $ / VS. ASSTT. COMMISSIONER OF INCOME TAX CC-25, MUMBAI. ( / APPELLANT) .. ( / RESPONDENT) ./I.T.A. NO.3838 AND 3839/MUM/2012 ( / ASSESSMENT YEARS : 2007-08 AND 2008-09) SHRI SANJAY KOHLI 1101-1106, OCEAN VIEW BUILDG, DECCAN CHS, UNION PARK, KHAR (W), MUMBAI-400052 $ / VS. ASSTT. COMMISSIONER OF INCOME TAX CC-25, MUMBAI. ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN/GIR NO. :AADPK4255M / ASSESSEE BY: SHRI VIPUL B JOSHI AND SHRI NISHIT GANDHI /ASSESSEE BY : SHRI MANJUNATHA SWAMY ! '# / DATE OF HEARING : 18.12.2014 $% '# /DATE OF PRONOUNCEMENT : 14.1.2015 %& / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE THREE APPEALS FILED BY THE ASSESSEE ARE D IRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-39, MUMBAI AND THEY RELATE TO T HE ASSESSMENT YEARS 2003- 3831-3839-3838/M/12 2 04, 2007-08 AND 2009-10. ALL THESE APPEALS WERE HE ARD TOGETHER AND HENCE THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER, FO R THE SAKE OF CONVENIENCE. 2. THE FACTS RELATING TO THESE APPEALS ARE STAT ED IN BRIEF. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATIONS U/S 132 O F THE ACT ON 17.01.2008 IN THE HANDS OF EDIT II GROUP OF CASES AND THE ASSESSEE WA S ALSO SUBJECTED TO SEARCH OPERATIONS. CONSEQUENT THERETO THESE THE ASSESSMEN TS UNDER CONSIDERATION WERE COMPLETED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 153A OF THE ACT. THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THESE TH REE YEARS, HAVING BEEN CONFIRMED BY LD CIT(A), THE ASSESSEE HAS PREFERRED THESE THREE APPEALS BEFORE US. 3. WE SHALL FIRST TAKE UP THE APPEAL FILED FOR AY 2003-04. FOR THIS YEAR, THE ASSESSEE HAD ORIGINALLY FILED RETURN OF INCOME ON 2 5.10.2002 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 30-01-2006. HENCE, AS ON THE DATE OF SEARCH, THE AY 2003-04 FALLS IN THE CATEGORY OF CONCLUDED ASSES SMENT AND HENCE IT WOULD NOT BE ABATED U/S 153A OF THE ACT. IN THE FINANCIA L YEAR RELEVANT TO THIS ASSESSMENT YEAR, THE ASSESSEE HAD RECEIVED A SUM OF RS.50.00 LAKHS AS GIFT FROM A DUBAI NATIONAL, WHO HAPPENED TO BE HIS NON-R ELATIVE. THIS GIFT AMOUNT HAD ALREADY BEEN DECLARED IN THE ORIGINAL RETURN OF INCOME. IN SEC. 153A PROCEEDINGS, THE ASSESSING OFFICER ASSESSED THE ABO VE SAID GIFT OF RS.50.00 LAKHS AS INCOME OF THE ASSESSEE AND THE SAME WAS AL SO CONFIRMED BY LD CIT(A). 4. BEFORE US, THE LD A.R SUBMITTED THAT THE DE PARTMENT DID NOT UNEARTH ANY INCRIMINATING MATERIAL DURING THE COURSE OF ASSESSM ENT PROCEEDING IN ORDER TO SHOW THAT THE IMPUGNED GIFT AMOUNT WAS BOGUS ONE OR THE ASSESSEE HAD FUNDED THE SAME. HE SUBMITTED THAT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE ASSESSING OFFICER WAS NOT ENTITLED TO RE-EXAMINE TH E CONCLUDED MATTERS IN THE CASE OF CONCLUDED ASSESSMENTS. HE SUBMITTED THAT T HE AO HAS MADE ENQUIRIES ABOUT THIS GIFT DURING THE COURSE OF ORIGINAL ASSES SMENT PROCEEDINGS AND HAS ACCEPTED THE SAME AS GENUINE. IN THIS REGARD, HE I NVITED OUR ATTENTION TO PAGE NO.37 OF THE PAPER BOOK, WHEREIN A LETTER DATED 09- 01-2006 WRITTEN BY THE ASSESSING OFFICER DIRECTLY TO THE DONOR IS PLACED. HE THEN INVITED OUR ATTENTION TO PAGE NO.36 OF THE PAPER BOOK, WHEREIN A LETTER DATE D 23-01-2006 WRITTEN BY THE 3831-3839-3838/M/12 3 DONOR DIRECTLY TO THE ASSESSING OFFICER IS PLACED. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSING OFFICER IS REVISING THE CONCLUDED MAT TER IN THE SEC. 153A PROCEEDING. HE FURTHER SUBMITTED THAT THE DEPARTMEN T HAS FOUND ONLY THE GIFT CONFIRMATION LETTER FROM THE DONOR AND THE SAME CAN NOT BE CONSIDERED AS INCRIMINATING MATERIAL. ACCORDINGLY HE CONTENDED T HAT THE AO WAS NOT JUSTIFIED IN RE-EXAMINING THIS ISSUE IN SEC. 153A PROCEEDING IN RESPECT OF CONCLUDED MATTER THAT TOO IN THE ABSENCE OF INCRIMINATING MATERIAL. HE FURTHER SUBMITTED THAT THE AO HAD MADE IDENTICAL ADDITION FOR THE GIFT RECEIVE D IN THE SUCCEEDING ASSESSMENT YEAR, I.E., AY 2004-05 AND THE SAME WAS DELETED BY THE LD CIT(A). HE SUBMITTED THAT THE DEPARTMENT HAS ACCEPTED THE D ECISION OF THE FIRST APPELLATE AUTHORITY AND HENCE IT DID NOT CHALLENGE HIS ORDER. HE SUBMITTED THAT THE FACTS AND CIRCUMSTANCES ARE IDENTICAL IN THIS YEAR ALSO. 5. ON THE CONTRARY, THE LD D.R PLACED RELIANC E ON THE ORDER DATED 19-3-2013 PASSED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF SATISH L BABLADI IN ITA NO.1732 & 2109/MUM/2010 AND ALSO THE DECISION O F HONBLE HIGH COURT OF RAJASTHAN RENDERED IN THE CASE OF CHAIN SUKH RATHI VS. CIT (270 ITR 368) AND SUBMITTED THAT THE PROCEEDINGS INITIATED U/S 153A W AS VALID AND THE AO WAS JUSTIFIED IN MAKING THE ADDITION RELATING TO THE GI FT. 6. THE LD A.R, HOWEVER, PLACED RELIANCE ON THE FOLLOWING DECISIONS TO SUPPORT HIS LEGAL PROPOSITION THAT THE CONCLUDED ASSESSMENT S SHOULD NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL:- (A) CIT VS. M/S MURLI AGRO PRODUCTS LTD (ITA NO.36 OF 2009 DATED 29-10- 2010) (B) SMT LAKSHMI SINGH VS. DCIT (ITA NO.113/PNJ/201 4 DATED 09-12- 2014) 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. THE ADMITTED FACTS ARE THAT THE ASSESSEE HAD DULY DISCLOSED THE RECEIPT OF GIFT OF RS.50.00 LAKHS IN THE ORIGINAL RETURN OF INCOME FILED FOR TH IS YEAR WELL BEFORE THE DATE OF SEARCH. IT IS ALSO AN UNDISPUTED FACT THAT THE ASS ESSING OFFICER, DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, HAS MADE ENQUIR IES ABOUT THE GIFT NOT ONLY WITH THE ASSESSEE, BUT ALSO WITH THE DONOR DIRECTLY . BOTH THE ASSESSEE AS WELL AS 3831-3839-3838/M/12 4 THE DONOR HAS DULY REPLIED TO THE QUERIES RAISED BY THE AO. HAVING SATISFIED WITH THE GENUINENESS OF THE GIFT, THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION. 8. DURING THE COURSE OF SEARCH PROCEEDING, THE DEPARTMENT HAS FOUND THE GIFT CONFIRMATION LETTER AND THE AO HAS PROCEEDED TO EXA MINE THE SAME ON THE BASIS OF THIS DOCUMENT. IN THIS REGARD, WE AGREE WITH TH E CONTENTIONS OF THE LD A.R THAT THIS GIFT CONFIRMATION LETTER CANNOT BE CONSIDERED TO BE AN INCRIMINATING MATERIAL WARRANTING AN EXAMINATION, SINCE IT ONLY CONFIRMS T HE DISCLOSURE ALREADY MADE BY THE ASSESSEE AND NOT AGAINST SUCH DISCLOSURE. A MA TERIAL CAN BE CONSIDERED TO BE AN INCRIMINATING MATERIAL, ONLY IF IT SHOWS THAT THE APPARENT WAS NOT REAL. A PERUSAL OF THE PRESENT ASSESSMENT ORDER ALSO SHOWS THAT THE ASSESSING OFFICER HAS ONLY REVISITED THE CONCLUDED MATTER RELATING TO THE GIFT AND ASSESSED THE SAME ON CERTAIN NEW GROUNDS NOT EMANATING FROM THE SEARCH. 9. IN OUR VIEW, THE DECISION RENDERED BY HONBL E JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF MURALI AGRO PRODUCTS LTD (SUPR A) COMES TO THE SUPPORT OF THE ASSESSEE, I.E., THE ASSESSING OFFICER IS NOT ENTITL ED TO DISTURB THE CONCLUDED ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MAT ERIAL. ACCORDINGLY, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ASSESSMENT OF GIFT AMOUNT OF RS.50.00 LAKHS IN THIS YEAR. WE NOT ICE THAT THE ASSESSEE HAS RAISED THIS LEGAL GROUND BEFORE THE LD CIT(A), BUT THE FIRST APPELLATE AUTHORITY HAS DECLINED TO ADMIT THE SAME. IN OUR VIEW, THE ACTIO N OF LD CIT(A) IN REJECTING THE LEGAL GROUND IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.50.00 LAKHS RELATING TO THE GIFT RECEIPT. 10. WE SHALL NOW TAKE UP THE APPEALS FILED FOR A Y 2007-08 AND 2008-09. IN BOTH THE YEARS, THE ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS UNDISCLOSED INVESTMENT IN PURCHASING FLATS HAVE BEEN CONFIRMED BY LD CIT(A). HENCE THE ASSESSEE HAS FILED APPEALS BEFORE US. 11. THE FACTS RELATING TO THE ABOVE SAID ISSUE A RE STATED IN BRIEF. DURING THE COURSE OF SEARCH PROCEEDINGS, IT WAS NOTICED THAT T HE ASSESSEE HAS PURCHASED TWO FLATS, VIZ., ROOM NO.5 AND ROOM NO.6 IN AN APAR TMENT COMPLEX NAMED 3831-3839-3838/M/12 5 ANAND VIHAR CHS, 20 TH ROAD, KHAR, MUMBAI. THE DOCUMENTS REVEALED THAT THE UNACCOUNTED CONSIDERATION WAS TO THE TUNE OF RS.49. 09 LAKHS AND THE ASSESSEE, IN THE STATEMENT TAKEN FROM HIM ON 17.01.2008/18.01 .2008 AGREED TO OFFER A SUM OF RS.21.00 LAKHS IN AY 2007-08 AND RS.28.09 LAKHS IN AY 2008-09. HOWEVER, IN THE RETURNS OF INCOME FILED IN RESPONSE TO THE NOTI CES ISSUED U/S 153A, THE ASSESSEE DID NOT OFFER THE SAME. THE EXPLANATIONS GIVEN BY THE ASSESSEE FOR NOT OFFERING THE ABOVE SAID AMOUNTS IN THE RETURNS OF I NCOME WERE NOT CONVINCING TO THE ASSESSING OFFICER AND HENCE HE ASSESSED THE AMO UNTS AS DISCLOSED BY THE ASSESSEE IN THE SWORN STATEMENT. THE LD CIT(A) ALS O CONFIRMED THE ADDITIONS. 12. THE LD A.R SUBMITTED THAT BOTH THE ASSESSIN G OFFICER AS WELL AS THE LD CIT(A) HAS MADE THE ADDITION OF RS.21 LAKHS ONLY ON THE BASIS OF THE ADMISSION MADE BY THE ASSESSEE IN THE SWORN STATEMENT WITHOUT CORROBORATING THE SAME WITH THE MATERIALS AVAILABLE ON RECORD. HE SUBMITT ED THAT THE MATERIALS AVAILABLE ON RECORD AND THE SURROUNDING CIRCUMSTANCES CLEARLY SHOW THAT THE ADMISSION MADE BY THE ASSESSEE WAS NOT ONLY UNDER CONFUSED MI ND BUT ALSO TOTALLY CONTRARY TO THE FACTS. ACCORDINGLY HE SUBMITTED TH AT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN PLACING RELIANCE SOLELY ON THE SWORN S TATEMENT GIVEN BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS RETRACTED FROM T HE STATEMENT WHILE FILING RETURN OF INCOME BY NOT DISCLOSING THE AMOUNT ADMIT TED BY HIM. LATER, BEFORE THE AO, THE ASSESSEE HAS FURNISHED DETAILED REASONS AND EVIDENCES TO SHOW THAT THE ADMISSION WAS WRONG. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN PLACING RELIANCE SOLELY ON THE SWORN S TATEMENT FOR MAKING THE IMPUGNED ADDITION. IN THIS REGARD, HE PLACED RELIA NCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF VINOD SOLAN KI VS. UNION OF INDIA (2008)(16 SCC 537), WHEREIN THE HONBLE SUPREME COU RT HAS HELD THAT IT IS A TRITE LAW THAT EVIDENCE BROUGHT ON RECORD BY WAY OF CONFESSION WHICH STOOD RETRACTED MUST BE SUBSTANTIALLY CORROBORATED BY OTH ER INDEPENDENT AND COGENT EVIDENCE, WHICH WOULD LEND ADEQUATE ASSURANCE TO TH E COURT THAT IT MAY SEEK TO RELY THEREUPON. HE SUBMITTED THAT THE TAX AUTHORIT IES HAVE NOT BROUGHT ON RECORD ANY MATERIAL TO SUPPORT THE CONFESSION MADE, HOWEVE R, THE ASSESSEE HAS BROUGHT ON RECORD MANY EVIDENCES TO SHOW THAT THE C ONFESSION WAS NOT CORRECT. 3831-3839-3838/M/12 6 13. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE ASSESSEE HAS GIVEN THE STATEMENT VOLUNTARILY AND HE HAS NOT RETRACTED THE SAME BY ANY SEPARATE LETTER. HE SUBMITTED THAT THE ADMISSION IS BEST EVIDENCE AN D HENCE THE LD CIT(A) WAS JUSTIFIED IN PLACING RELIANCE ON THE SAME. 14. THE LD A.R, THEN MADE DETAILED SUBMISSIONS AS TO WHY THE SALE CONSIDERATION WAS REDUCED BY THE VENDORS. HE SUBMI TTED THAT THOUGH THE PARTIES HAD INITIALLY AGREED FOR A CONSIDERATION OF RS.44.0 0 LAKHS, YET THE CONVEYANCE DEED WAS NOT EXECUTED ON THE SAME RATE DUE TO EXIST ENCE OF SEVERAL ENCUMBRANCES IN THE FORM OF COMPETITIVE CLAIMS OVER OWNERSHIP, UNAUTHORIZED CONSTRUCTIONS; OBJECTIONS FROM THE SOCIETY AND ALSO FROM THE COLLECTOR MSD. ULTIMATELY, THE FLAT WAS AGREED TO BE SOLD FOR A LE SSER AMOUNT. THOUGH THE REGISTRATION VALUE WAS SHOWN AS RS.24.00 LAKHS, YET IT WAS MORE THAN THE STAMP DUTY VALUE OF RS.21.73 LAKHS. FURTHER, THE ASSESSE E HAS INCURRED A SUM OF RS.32.16 LAKHS IN AGGREGATE CONNECTION WITH THE PUR CHASE OF THIS FLAT AND ALL THE PAYMENTS EXCEPT THE REGISTRATION FEE AND SOME SMALL EXPENSES WERE INCURRED BY WAY OF CHEQUE THROUGH THE BANK ACCOUNTS. HE SUBM ITTED THAT THE TAX AUTHORITIES HAVE PLACED RELIANCE ON A RECEIPT GIV EN BY THE VENDOR, WHEREIN HE HAD ACKNOWLEDGED THE RECEIPT OF ADVANCE AMOUNT OF R S.2.00 LAKHS. IN THAT RECEIPT THE ORIGINAL CONSIDERATION DID FIND PLACE. ON THE CONTRARY, THE ASSESSEE HAS BROUGHT ON RECORD ADEQUATE EVIDENCES TO SHOW TH AT THE ORIGINALLY AGREED CONSIDERATION HAS UNDERGONE CHANGE DUE TO CHANGED C IRCUMSTANCES. HOWEVER, THE ASSESSING OFFICER HAS FAILED TO CONDUCT ENQUIRI ES WITH THE VENDORS OF THE PROPERTY AND INSTEAD, CHOSE TO PLACE SOLE RELIANCE ON THE RECEIPT AND THE STATEMENT OF THE ASSESSEE, WHICH WAS RETRACTED AT T HE TIME OF FILING RETURN OF INCOME. ON MERITS, THE LD D.R RELIED UPON THE ORDE R OF LD CIT(A). 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. BEFORE US, THE ASSESSEE HAS FILED A DETAILED WRITTEN SUBMISSIO N NARRATING THE CHRONOLOGICAL EVENTS THAT TOOK PLACE FROM THE DATE OF AGREEMENT T O THE DATE OF FINAL REGISTRATION OF THE CONVEYANCE DEED. FOR THE SAKE OF CONVENIENC E, WE EXTRACT THE SAME BELOW:- 3831-3839-3838/M/12 7 1. THE ASSESSEE, AS A JOINT OWNER ALONG WITH HIS WIFE, ACQUIRED, VIDE DEED OF TRANSFER DATED 08.12.2006, A RESIDENTIAL PR OPERTY, BEING FLAT NO. 5, AT THE ANAND VIHAR CHS LTD., 20TH ROAD, KHAR (W), M UMBAI - 400052, FOR A SUM OF RS. 24 LAKHS. 2. THE TRAIL OF EVENTS / DOCUMENTS LEADING TO THE S AID PURCHASE WAS AS UNDER: [REF: PG. NO. 192 OF THE PAPER BOOK ('P.B.')] A) MOU DATED 16.08.2005, FOR PURCHASE OF THE SAID PROPERTY. NOT EXECUTED AND COPY NOT AVAILABLE] B) LETTER OF SOCIETY DATED 08.11.2005, ADDRES SED TO THE VENDOR, CONVEYING ITS NOC FOR TRANSFER OF SHARE NOS. 833 TO 842, RELATED TO THE SAID PROPERTY, IN FAVOUR OF THE ASSESSEE [RE F: PG. NO. 179 OF THE P.B.]. THIS NOC WAS SUBJECT TO OBTAINING NOC FROM THE COLLECTOR, M.S.D. C) LETTER DATED 12.11.2005, RECEIVED FROM MAHESH A. THAKER, ADVOCATE, FOR AND ON BEHALF OF MRS. SONABEN, WIDOW OF LATE PREMJIBHAI KARSONDAS RAWADKA, CLAIMING TITLE TO THE SAID PROPERTY ALONGWITH OTHER LEGAL HEIRS AND STATING TH AT THE VENDORS WERE NOT ABSOLUTE OWNERS OF THE SAID PROPERTY [REF: PG. NO. 180 TO 185 OF THE P.B.] (D) IN HER APPLICATION TO TRANSFER THE FLAT DATED 2 1.2.2006 FILED BEFORE THE SOCIETY, THE TRANSFEROR CITED HER BAD FINANCIAL POSITION AND NEED OF MONEY, AS THE REASON FOR TRANSFER. [REF: PG. NO. 195 TO 197 OF THE P.B.] E) RECEIPT DATED 24.02.2006, TOWARDS PART PAYMENT O F RS. 2,00,000/- BY THE ASSESSEE TO THE VENDOR. AS PE R THIS RECEIPT, THE TOTAL CONSIDERATION ORIGINALLY AGREED WAS RS. 44 LACS. THE PAYMENTS REFLECTED IN THE RECEIPT WERE AL L ACCOUNTED FOR. [REF: PG. NO. 177 OF THE P.B.]. F) LETTER FROM THE COLLECTOR, DATED 20.10.2006, APP ROVING THE TRANSFER OF THE SAID PROPERTY IN FAVOUR OF THE ASSE SSEE [REF: PG. NO. 187 - 188 OF THE P.B.]. THE APPROVAL WAS SUBJECT TO DEMOLITION OF THE ADDITIONAL CONSTRUCTION OF ABOUT 130 SQ. FT. G) AS THE TRANSFEROR WAS IN NEED OF MONEY, A SUPPLE MENTARY MOU WAS EXECUTED BETWEEN THE TRANSFEROR AND THE TRANSFE REES [REFERRED TO AS VENDOR AND VENDEE] ON 03.12.2006 [REF: PG. NO. 189 TO 191 OF THE P.B.]. THE SALIENT FEATURES WERE AS UNDER:- - THE VENDOR AGREED TO LET THE VENDEE RETAIN A SUM OF RS.13,10,833/-,OUT OF THE ORIGINALLY AGREED PURCHAS E 3831-3839-3838/M/12 8 CONSIDERATION OF RS. 44 LACS, UNTIL A CLEAR AND MAR KETABLE TITLE TO THE PROPERTY WAS CONVEYED BY THE VENDOR TO THE VEND EE. - THE VENDOR ASSURED THE VENDEE THAT SHE WOULD, AT HER OWN COST, CONVEY, ASSIGN AND TRANSFER A CLEAR MARKETABL E TITLE TO THE PROPERTY, FREE FROM ALL DISPUTE, ENCUMBRANCES, GOVE RNMENT ORDERS, INCLUDING SOCIETY CLEARANCES AND AGREED TO ENSURE THAT THE VENDEE GETS A CLEAR MARKETABLE TITLE TO THE SAI D PROPERTY. - IT WAS TTHEREFORE STATED / AGREED THAT: (I) AS VENDOR WAS NOT IN A POSITION TO DELIVER A CL EAR MARKETABLE TITLE TO THE SAID PROPERTY, FREE FROM ALL DISPUTES, ENCUMBRANCES, GOVERNMENT ORDERS, INCLUDING SOCIETY CLEARANCES, SH E AGREED TO LET THE VENDEE RETAIN A SUM OF RS. 13,10,833/-, OUT OF THE SALE CONSIDERATION, TILL SUCH TIME THE VENDOR OBTAINED A LL CLEARANCES FROM HER FAMILY AND SOCIETY CLEARANCE FOR TRANSFERR ING THE PROPERTY IN THE NAME OF THE VENDEE, IN THE BOOKS OF THE SOCIETY. (II) TIME WAS OF ESSENCE AND IF THE VENDOR WAS UNAB LE TO RENDER A CLEAR, FREE AND MARKETABLE TITLE WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF EXECUTION OF THE MOU, THEN THE VEN DEE WOULD DO SO AT THEIR OWN COST AND WOULD NOT PAY THE BALAN CE AMOUNT OF RS. 13,10,833/- TO THE VENDOR. (III) IF THE VENDOR WAS ABLE TO RENDER A CLEAR, FR EE AND MARKETABLE TITLE TO THE PROPERTY TO THE VENDEE, FRE E FROM ALL DISPUTE, ENCUMBRANCES AND GOVERNMENT ORDERS, THEN T HE PARTIES WOULD EXECUTE AN ADDITIONAL CONVEYANCE DEED FOR THE SUM OF RS. 13,10,833/- AND WOULD PRESENT THE SAME FOR REGI STRATION TO THE OFFICE OF THE SUB REGISTRAR. (H) AN AFFIDAVIT DATED 11.12.2006 WAS EXECUTED BY T HE VENDOR STATING THAT THE SUPPLEMENTARY MOU (SUPRA) WAS ENTERED INTO , SINCE SHE WAS NOT IN A POSITION TO DELIVER A CLEAR MARKETABLE TIT LE TO THE SAID PROPERTY, FREE FROM ALL DISPUTE ENCUMBRANCES AND GOVERNMENT O RDERS, INCLUDING SOCIETY CLEARANCES, TO THE ASSESSEE. SHE REAFFIRMED THE SAID SUPPLEMENTARY MOU (SUPRA) AND CONFIRMED THAT SHE H AD RECEIVED TOTAL RS. 30,89,167/- TOWARDS TRANSFER OF THE SAID PROPER TY IN FAVOUR OF THE ASSESSEE [ REF: PG. NO. 193 TO 194 OF THE P.B .]. (I) DEED OF TRANSFER, DATED 08.12.2006, FOR TRANSFE R OF THE SAID PROPERTY IN FAVOUR OF THE ASSESSEE [REF: PG. NO. 134 TO 176 OF THE P.B.]. ITS SALIENT FEATURES ARE AS UNDER: - DEED OF TRANSFER, DATED 08.12.2006 - TRANSFEROR - MS. RAJUBEN ARUN RAWADKA - TRANSFEREES - MR. SANJAY KOHLI AND MS. BINAIFERR KOHLI LI 3831-3839-3838/M/12 9 - CONFIRMING PARTIES - MR. GIRISH ARUN RAWADKA, MR. ASHOK ARUN RAWADKA, MS,USHA PRADIP BORICHA AND MR. PRAVIN RAWADKA. - PROPERTY - ROOM NO, 5, ADMEASURING 450 SQ. FT. AT ANAND VIHAR SOCIETY, 20TH ROAD, KHAR (W), MUMBAI - 400 05 2, REPRESENTED BY SHARE CERTIFICATE NOS. 833 TO 842. - NOC GRANTED BY THE SOCIETY, VIDE ITS LETTER DATED 08.11.2005 - NOC GRANTED BY COLLECTOR MSD, VIDE LETTER DATED 2 0.10.2006 - THE TRANSACTION WAS VALUED AT A FAIR MARKET PRICE OF RS. 21,72,967/-,FOR THE PURPOSE OF STAMP DUTY PAYABLE O N REGISTRATION, BY THE STAMP DUTY AUTHORITIES. 3. THE FOLLOWING PAYMENTS WERE MADE BY THE ASSESSEE TOWARDS PURCHASE OF THE SAID PROPERTY: STANDARD CHARTERED BANK - A/C. NO. 237-1-004540-3 DATE CHEQUE NO. AMOUNT SANJAY KOHIL 16.08.2005 984467 1,00,000/- 15.11.2005 989641 1,00,000/- 28.2.2006 989656 3,00,000/- 14.07.2006 340371 35,000/- 2.11.2006 DD 1,04,167 STANDARD CHARTERED BANK - A/C. NO. 237-0-500399-4 EDIT II PRODUCTION (BINNAIFFER KOHLI) 01.09.2006 953566 5,50,000/- 06.12.2006 DD NO, 015339 ICICI BANK 1,02,600/- STAMP DUTY 08.12.2006 CASH 24,440/- REGISTRATION FEE 06.08.2007 174711 64,455/- 06.08.2007 CASH 35,545/- HDFC BANK A/C. NO. 1551 08.12.2006 0278340 18,00,000/- TOTAL COST RS. 32,16,207/- 3831-3839-3838/M/12 10 II. SUBMISSIONS OF THE ASSESSEE A. ON JURISDICTION THE ENTIRE ADDITION IS MADE PURELY, SIMPLY AND MECH ANICALLY RELYING UPON ONLY ONE DOCUMENT, SR. NO. (E) ABOVE, BYPASSING HOS T OF EVIDENCES, INCLUDING REGISTERED SALE DOCUMENT. THIS TOO, WITHO UT MAKING ANY INQUIRY / VERIFICATION WORTH A NAME. EVEN THIS PAPER DOES NOT PER SE AND ON ITS OWN OR EVEN PRIMA FACIE, SUGGEST ANY ON-MONEY PAYMENT. THE PAYMENTS REFERRED IN THIS RECEIPT WERE DULY ACCOUNTED. AS SU CH, IT WAS NOT A MATERIAL, MUCH LESS INCRIMINATING MATERIAL, WHICH COULD HAVE GIVEN JURISDICTION TO MAKE THE ASSESSMENT UNDER SECTION 153A OF THE ACT. AS REGARDS THE STATEMENT, IT HAD NO EVIDENTIARY VAL UE. IT IS A WELL SETTLED LEGAL POSITION THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF SURRENDER DURING A STATEMENT; ESPECIALLY WHEN -THERE IS NO OTHER CORROBORATIVE EVIDENCE TO SUPPOR T THE ALLEGATION OF THE A.O.; THERE IS NO ADMISSION OF ANY WRONG DOING BY T HE ASSESSEE EVEN IN THE STATEMENT; - SUCH SURRENDER WAS UNDER DURESS OR MISTAKEN BELIEF OF FACTS OR LAW; AND --SUCH STATEMENT IS LATER ON RETRACTEDD/NOT ACTED U PON. THIS LEGAL POSITION IS TOO WELL SETTLED, UNDER GENE RAL LAW AS WELL AS UNDER THE ACT. IN FACT, VIDE INSTRUCTION NO. F. NO.286, D ATED 10.03.2003, THE CBDT ITSELF HAS INSTRUCTED AGAINST SUCH PRACTICE OF EXTRACTING SURRENDER. PLEASE ALSO REFER TO THE SUBSEQUENT STATEMENT OF TH E ASSESSEE, DATED 07.02.2008, UNDER SECTION 132 (4) AT PAGE 66 TO 68O F THE P.B. B. ON MERITS 1. AT THE TIME OF ENTERING INTO THE MOU IN 2005, TH E SAID PROPERTY, JOINTLY PURCHASED BY THE ASSESSEE AND HIS WIFE, WAS SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, ARISING DUE TO: A) A NUMBER OF CLAIMANTS TO TITLE TO THE SAID PROPE RTY, WHO COULD PREVENT / OBSTRUCT THE DEAL. B) OBJECTIONS FROM THE SOCIETY (DESPITE THE NOC), A RISING OUT OF CLAIMS AND COUNTER CLAIMS. C) NEED TO OBTAIN NOC OF THE COLLECTOR MSD D) THERE WAS UNAUTHORIZED CONSTRUCTION OF ABOUT 130 SQ. FT. (WHICH WAS LATER ON ORDERED TO BE DEMOLISHED BY THE COLLEC TOR, WHILE GIVING NOC.) 2. FROM THE TIME OF AGREEING TO PURCHASE THE SAID P ROPERTY, TILL ITS FINALIZATION/CONSUMMATION, THE ASSESSEE FACED VARIO US CLAIMS TO THE TITLE. 3831-3839-3838/M/12 11 SOME OF THEM COULD NOT BE RESOLVED BY THE TRANSFERO R, INCLUDING SOME CLAIMS TO TITLE. 3. SINCE THE TRANSFEROR WAS REQUIRED TO GIVE A CLEA R, FREE AND MARKETABLE TITLE TO THE PROPERTY TO THE TRANSFEREE AFTER RESOLVING ALL DISPUTES / CLAIMS AND OBTAINING ALL APPROVALS, WHIC H SHE WAS UNABLE TO DO SO, SHE HAD AGREED TO RECEIVE A LESSER SALE CONSIDE RATION, LEAVING ALL THE ATTENDANT RISKS OF SUCH CLAIMS TO BE BORNE / CONTES TED BY THE ASSESSEE. IN OTHER WORDS, WHILE THE ASSESSEES ORIGINALLY CONTRAC TED TO ACQUIRE A PROPERTY WITH FREE, CLEAR AND MARKETABLE TITLE, THE Y COULD NOT DO SO IN REALITY, FOR FAILURE ON THE PART OF THE TRANSFEROR TO HONOUR HER COMMITMENTS. THAT LED TO PAYMENT OF A LESSER CONSIDERATION BY TH E ASSESSEES. 4. SINCE, AT THE TIME OF CLOSURE OF THE DEAL, THE TRANSFEROR WAS UNABLE TO HONOUR HER COMMITMENTS DUE TO A DISPUTE / CLAIM FROM THE FAMILY MEMBERS, WHICH WAS TO THE PREJUDICE OF THE PROPERTY ACQUIRED, IN ORDER TO PROTECT THEIR INTERESTS, THE ASSESSEE HAD TO PAY A SUM HIGHER THAN THE CONTRACTED AMOUNT, SO AS TO SECURE THEIR RIGHTS, NO T JUST TO THE PROPERTY, BUT ALSO THE PAYMENT MADE THERE AGAINST. 5. IT MAY NOT BE OUT OF PLACE TO POINT OUT THAT WHILE THE SALE CONSIDERATION RECORDED IN THE DEED OF TRANSFER IS R S. 24 LACS, THE VALUATION THEREOF BY THE REGISTRATION AUTHORITIES, FOR THE PAYMENT OF STAMP DUTY WAS RS. 21,72,967/-. THIS ITSELF IS AN AUTHENT IC AND INDEPENDENT AFFIRMATION OF THE BONAFIDES OF THE TRANSACTION. 6. THE ENTIRE ADDITION IS MADE PURELY, SIMPLY AND M ECHANICALLY RELYING UPON ONLY ONE DOCUMENT, BY PASSING HOST OF EVIDENCE S, INCLUDING REGISTERED SALE DOCUMENT. THIS TOO, WITHOUT MAKING ANY INQUIRY / VERIFICATION WORTH A NAME. 16. A PERUSAL OF THE ABOVE SAID WRITTEN SUBMISS IONS WOULD SHOW THAT THE ASSESSEE HAS DEMONSTRATED THE REASONS FOR REDUCING THE AGREED SALE CONSIDERATION ALONG WITH DOCUMENTARY EVIDENCES TO S UBSTANTIATE THE SAME. WE NOTICE THAT THE TAX AUTHORITIES HAVE NOT REBUTTED T HE SAME BY CONDUCTING NECESSARY ENQUIRIES AND INSTEAD, CHOSE TO PLACE REL IANCE ON THE SWORN STATEMENT GIVEN BY THE ASSESSEE DURING THE COURSE OF SEARCH O PERATION. A CAREFUL PERUSAL OF THE PROVISIONS OF SEC. 132(4) WOULD SHOW THAT TH E SAID PROVISIONS ONLY PROVIDE THAT ADMISSIONS MADE IN THE SWORN STATEMENT MAY BE USED AS EVIDENCE AGAINST THE ASSESSEE. THE STATUTES GENERALLY PROVIDE THREE TYPES OF LEGAL PRESUMPTIONS VIZ., MAY BE PRESUMED, SHALL BE PRESUMED AND C ONCLUSIVE PROOF. IT IS A WELL SETTLED PROPOSITION OF LAW THAT A PARTY CAN STILL R EBUT THE FIRST TWO PRESUMPTIONS BY BRINGING MATERIALS CONTRARY TO THE LEGAL PRESUMPTIO NS. ONLY IN RESPECT OF THE THIRD TYPE OF PRESUMPTION, ALL THE PARTIES DO NOT HAVE AN Y OPTION. WHEN THE LAW IS 3831-3839-3838/M/12 12 SETTLED IN THIS MANNER EVEN IN RESPECT OF LEGAL PRE SUMPTIONS, WE ARE OF THE VIEW THAT IT WOULD BE WELL WITHIN HIS RIGHT FOR AN ASSES SEE TO REBUT THE ADMISSIONS MADE IN THE SWORN STATEMENT, WHEN THE PROVISIONS OF SEC. 132(4) SPECIFIES THAT THE SAID ADMISSION MAY BE USED AS EVIDENCE. THE ADMISSION MADE BY THE ASSESSEE IS NO DOUBT, BEST EVIDENCE, BUT THERE IS N OTHING IN LAW TO PREVENT THE ASSESSEE TO SHOW THAT THE SAID ADMISSION WAS WRONG. IN OUR VIEW, THE SAID ADMISSION MAY BE RELIED UPON ONLY IF THE ASSESSEE F AILS TO REBUT THE SAME WITH COGENT EVIDENCES. THUS THE RELIABILITY OF THE ADMI SSION WOULD DEPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND HENCE ANY GENERAL PROPOSITION SHOULD NOT BE MADE ABOUT ITS RELIABILITY. 17. IN THE INSTANT CASE, AS NOTICED EARLIER, TH E ASSESSEE HAS NARRATED THE EVENTS AND ALSO THE CIRCUMSTANCES WHICH COMPELLED T HE VENDORS TO REDUCE THE SALE CONSIDERATION AT THE TIME OF REGISTRATION OF T HE FLAT. SINCE THE SAID EVIDENCES HAVE NOT BEEN SHOWN TO BE WRONG BY THE TAX AUTHORIT IES, WE ARE UNABLE TO SUSTAIN THE ADDITION OF RS.21.00 LAKHS MADE BY THE ASSESSIN G OFFICER IN AY 2007-08. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. 18. WE SHALL FIRST TAKE UP THE APPEAL FOR THE ASSES SMENT YEAR 2008-09. IN THIS YEAR ALSO, THE AO MADE AN ADDITION OF RS.28.09 LAKH S TOWARDS UNDISCLOSED INVESTMENT MADE IN PURCHASE OF FLAT NO.6. THE AD DITION IS MADE ONLY ON THE BASIS OF ADMISSION MADE BY THE ASSESSEE IN THE STAT EMENT TAKEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. CIT(A) ALSO CONFIRMED THE SAME. 19. THE LD. AR SUBMITTED THAT THE FLAT NO.6 WAS AGR EED TO BE PURCHASED ALONG WITH THE OPEN SPACE OF 1550 SQ.FT. FOR A CONSIDERAT ION OF RS.88.09 LAKHS. HOWEVER, IT WAS NOTICED LATER THAT THE OPEN SPACE B ELONGS TO THE SOCIETY, WHICH COULD NOT BE SOLD BY THE VENDOR. SOME OTHER TYPES ENCUMBRANCES, LIKE THE ONE FACED IN RESPECT OF FLAT NO.5, ALSO SURFACED AND A LL THESE FACTORS LEAD TO THE REDUCTION OF THE SALE CONSIDERATION TO RS.68 LAKHS. THE LD. COUNSEL SUBMITTED THAT THE STAMP DUTY CONSIDERATION WAS RS.56.11 LAKH S ONLY AND THE SAME SUBSTANTIATES THE SALE CONSIDERATION OF RS.68 LAKHS . ACCORDINGLY, HE SUBMITTED THAT THE ADDITION OF RS.28.09 LAKHS HAS TO BE DELE TED. 3831-3839-3838/M/12 13 20. ON THE CONTRARY, THE LD.DR PLACED STRONG RELIAN CE ON THE ORDER OF LD. CIT(A). 21 WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E LD A.R HAS FILED WRITTEN SUBMISSIONS NARRATING THE EVENTS THAT TOOK PLACE FROM THE DATE OF AGREEMENT TO THE DATE OF REGISTRATION INCLUDING THE ENCUMBRANCES AND PROBLEMS WHICH LED TO THE REDUCTION OF SALE CONSIDERATION. F OR THE SAKE OF CONVENIENCE, WE EXTRACT THE SAME BELOW: 1. THE ASSESSEE, AS A JOINT OWNER ALONG WITH HIS WIFE, VIDE DEED OF TRANSFER DATED 26.07.2007, ACQUIRED A RESIDENTIAL P ROPERTY, BEING FLAT NO. 6, AT THE ANAND VIHAR CHS, 20TH ROAD, KHAR (W), MUM BAI - 400 052, FOR A SUM OF RS. 60 LAKHS. 2. THE TRAIL OF EVENTS I DOCUMENTS LEADING TO THE SAID PURCHASE WAS AS UNDER: A) MOU DATED 16.09.2005, ENTERED INTO FOR PURCHASE OF THE SAID PROPERTY ALONGWITH OPEN SPACE OF AROUND 1550 SQ. FT . [NOT EXECUTED AND COPY NOT AVAILABLE]. B) A NOC DATED 07.10.2005 WAS ISSUED BY THE SOCIETY TO MAHENDRA A. RAWADKA, PERMITTING HIM TO TRANSFER SHARES NO. 843 TO 852, REPRESENTING FLAT NO. 6, IN THE SOCIETY'S PREMISES AT 20 TH H ROAD, KHAR (W), MUMBAI - 400 052 TO THE ASSESSEE, SUBJECT TO A NOC BEING GRA NTED BY THE COLLECTOR, M.S.D. ENCLOSED WITH IT WAS A CERTIFIED COPY OF THE PLAN OF MEASUREMENT OF THE SAID PREMISES AND THE PLOT APPURTENANT TO IT [R EF: PG. NO. 207 - 208 OF THE P.B.] C) LETTER DATED 12.11.2005, RECEIVED FROM MAHESH A. TH AKER, ADVOCATE, FOR AND ON BEHALF OF MRS. SONABEN, WIDOW OF LATE PREMJIBHAI KARSONDAS RAWADKA, CLAIMING TITLE TO THE SAID PROPE RTY ALONG WITH OTHER LEGAL HEIRS AND STATING THAT THE VENDORS WERE NOT A BSOLUTE OWNERS OF THE SAID PROPERTY [REF: PG. NO. 180 TO 185 OF THE P.B.] . D) AN APPLICATION DATED 25.04.2007 WAS FILED BY THE TR ANSFEROR, WITH THE COLLECTOR MSD, SEEKING HIS NOC FOR TRANSFER OF THE SAID FLAT WITH THE OPEN SPACE (PLOT) BESIDE IT, TO THE ASSESSEE [REF: PG. NO. 211 - 212 OF THE P.B.]. 3831-3839-3838/M/12 14 E) AN UNSIGNED RECEIPT DATED 23.02.2007, FOR A PART PA YMENT OF RS. 10,00,000/- AGAINST THE THEN AGREED CONSIDERATION O F RS. 88.09 LACS FOR TRANSFER OF THE FLAT ALONGWITH OPEN PLOT. [REF: PG. NO. 178 OF THE P.B.]. F) THE COLLECTOR MSD, VIDE LETTER DATED 02.06.2007, GR ANTED APPROVAL FOR SUCH TRANSFER OF THE PROPERTY IN FAVOUR OF THE ASSESSEE, BUT ORDERED THAT THE OPEN SPACE APPURTENANT TO THE PREMISES / PROPER TY DID NOT BELONG TO THE TRANSFEROR, BUT WAS A COMMON PLOT OF LAND ALLOT TED TO THE SOCIETY FOR ITS COMMON USE. FURTHER, THE ADDITIONAL CONSTITUTION OF AROUND 130 SQ. FT. WAS ORDERED TO BE DEMOLISHED [REF: PG NO. 214 TO 217 OF THE P.B.]. G) DEED OF TRANSFER, WAS EXECUTED ON 26.07.2007, WHOSE SALIENT FEATURES WERE AS UNDER [REF: PG. NO. 153 TO 176 OF THE P.B.]:- - TRANSFEROR - MAHENDRA A. RAWADKA - -TRANSFEREES -) MR. SANJAY KOHLI AND MS. BINAIFER R KOHIL - -CONFIRMING PARTIES - MR. KISHORE A. RAWADKA, MR. RANJIT A. RAWADKA,MS. SHABNAM SYED AHMED KALAHTERZEDHA (NEE K ALPANA A. RAWADKA) - THE TRANSFEROR HAS SOLD TO THE ASSESSEE, FLAT NO. 6, TOGETHER WITH OPEN SPACE BEING COURTYARD MEASURING 1550 SQ. FT., FREE FROM ALL ENCUMBRANCES, FOR A SUM OF RS. 60 LACS - THE SOCIETY HAS GRANTED NOC VIDE LETTER DATED 07. 10.2005 - THE COLLECTOR MSD HAS GRANTED NOC, VIDE LETTER DA TED 02.06.2007 - THE PROPERTY WAS ASSESSED AT A FAIR MARKET PRICE OF RS. 56,11,378/-, BY THE SUB REGISTRAR, FOR PAYMENT OF STAMP DUTY, FOR THE PURPOSE OF REGISTRATION THEREOF. (H) THE FOLLOWING PAYMENTS WERE MADE BY THE ASSESSE E, TO THE TRANSFEROR, TOWARDS THE SAID PROPERTY ACQUIRED: 3831-3839-3838/M/12 15 STANDARD CHARTERED BANK - A/C. NO. 237-1-004540-3 DATE CHEQUE NO. AMOUNT SANJAY KOHIL 26.4.2007 004011 15,00,000/- 24.7.2007 DD NO.003512 2,82,000/- STAMP DUTY 24.7.2007 DD NO.018248 30,000/- (REGISTRATION CHARGES) 600/- (CASH) 28.7.2007 058036 17,50,000/- STANDARD CHARTERED BANK - A/C. NO. 237-0-004541-1 (BINNAIFFER KOHLI) 27.2.2007 4043 10,00,000 28.7.2007 136337 17,50,000 08.12.2006 CASH 24,440/- REGISTRATION FEE 06.08.2007 174711 64,455/- TOTAL COST RS. 63,13,200/- II. SUBMISSIONS OF THE ASSESSEE A. ON JURISDICTION THE ENTIRE ADDITION IS MADE PURELY, SIMPLY AND MECH ANICALLY RELYING UPON ONLY ONE DOCUMENT, SR. NO. (E) ABOVE, BYPASSING HOS T OF EVIDENCES, INCLUDING REGISTERED SALE DOCUMENT. THIS TOO, WITHO UT MAKING ANY INQUIRY / VERIFICATION WORTH A NAME. IN FACT, THIS PAPER IS U NSIGNED, AS SUCH HAD NO EVIDENTIARY VALUE. EVEN OTHERWISE, THIS PAPER DOES NOT PER SE AND ON ITS OWN OR EVEN PRIMA FACIE, SUGGEST ANY ON-MONEY PAYME NT. THE PAYMENTS REFERRED IN THIS RECEIPT WERE DULY ACCOUNTED. AS SU CH, IT WAS NOT A MATERIAL, MUCH LESS INCRIMINATING MATERIAL, WHICH COULD HAVE GIVEN JURISDICTION TO MAKE THE ASSESSMENT UNDER SECTION 153A OF THE ACT. AS REGARDS THE STATEMENT, IT HAD NO EVIDENTIARY VAL UE. IT IS A WELL SETTLED LEGAL POSITION THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF SURRENDER DURING A STATEMENT; ESPECIALLY WHEN- - THERE IS NO OTHER CORROBORATIVE EVIDENCE TO SUPPO RT THE ALLEGATION OF THE A.O.; - THERE IS NO ADMISSION OF ANY WRONG DOING BY THE A SSESSEE EVEN IN THE STATEMENT; - SUCH SURRENDER WAS UNDER DURESS OR MISTAKEN BELIE F OF FACT OR LAW; AND 3831-3839-3838/M/12 16 - SUCH STATEMENT IS LATER ON RETRACTED / NOT ACTED UPON THIS LEGAL POSITION IS TOO WELL SETTLED, UNDER GENE RAL LAW AS WELL AS UNDER THE ACT. IN FACT, VIDE INSTRUCTION NO. F. NO.286, D ATED 10.03.2003, THE CBDT ITSELF HAS INSTRUCTED AGAINST SUCH PRACTICE OF EXTRACTING SURRENDER. PLEASE ALSO REFER TO THE SUBSEQUENT STATEMENT OF TH E ASSESSEE, DATED 07.02.2008, UNDER SECTION 132 (4) AT PAGE 66 TO 68 OF THE P.B. B. ON MERITS 1. AT THE TIME OF ENTERING INTO THE MOU IN 2005, TH E SAID PROPERTY, JOINTLY PURCHASED BY THE ASSESSEE AND HIS WIFE, WAS SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, ARISING DUE TO: A) A NUMBER OF CLAIMANTS TO TITLE TO THE SAID PRO PERTY, WHO COULD PREVENT / OBSTRUCT THE DEAL. B) OBJECTIONS FROM THE SOCIETY (DESPITE THE NOC), A RISING OUT OF CLAIMS AND COUNTER CLAIMS. C) NEED TO OBTAIN NOC OF THE COLLECTOR MSD D) THERE WAS UNAUTHORIZED CONSTRUCTION OF ABOUT 130 SQ. FT. (WHICH WAS LATER ON ORDERED TO BE DEMOLISHED BY THE COLLEC TOR, WHILE GIVING NOC.) E) THE ISSUE OF THE VENDOR'S RIGHT TO TRANSFER OPEN PLOT OF LAND [AROUND 1550 SQ. FT.] [WHICH ULTIMATELY WAS NOT ALLOWED TO BE TRANSFERRED]. 2. FROM THE TIME OF AGREEING TO PURCHASE THE SAID PROP ERTY, TILL ITS FINALIZATION / CONSUMMATION, THE ASSESSEE FACED VAR IOUS CLAIMS TO THE TITLE. A KEY DEFECT IN TITLE EMERGED ONLY SUBSEQUENTLY I.E . UPON RECEIPT OF THE LETTER OF THE COLLECTOR MSD, WHEREIN IT WAS POINTED OUT THAT THE APPURTENANT LAND, WHICH THE TRANSFEROR CLAIMED TO O WN, DID NOT BELONG TO HIM, BUT WAS A COMMON PLOT OF ALLOTTED TO THE SOCIE TY AND HENCE NO INDIVIDUAL MEMBER WAS ITS OWNER. THE SAID PLOT OF L AND, TAKING INTO ACCOUNT OF WHICH THE ORIGINAL SALE CONSIDERATION WAS FIXED, THUS DID NOT BELONG TO THE TRANSFEROR, AS WAS POINTED OUT AND OBJECTED TO BY THE COLLECTED (SUPRA). 3. SINCE THE TRANSFEROR WAS REQUIRED TO GIVE A CLEAR, FREE AND MARKETABLE TITLE TO THE TOTAL PROPERTY BEING SOLD T O THE TRANSFEREE, WHICH HE WAS UNABLE TO DO SO (SINCE A PART OF THE PROPERTY W AS TRULY NOT OWNED BY HIM), HE OBVIOUSLY AGREED TO RECEIVE A LESSER SALE CONSIDERATION. IN OTHER WORDS, THE TRANSFEROR WAS UNABLE TO SELL THE AGGREG ATE PROPERTY WHICH HE CONTRACTED TO SELL, SINCE HE DID NOT OWN A PART IT. 4. IT MAY NOT BE OUT OF PLACE TO POINT OUT THAT WHILE THE SATE 3831-3839-3838/M/12 17 CONSIDERATION RECORDED IN THE DEED OF TRANSFER IS R S. 60 LACS, THE VALUATION THEREOF BY THE REGISTRATION AUTHORITIES, FOR THE PAYMENT OF STAMP DUTY WAS RS. 56,11,378/-. THIS ITSELF IS AN AUTHENT IC AND INDEPENDENT AFFIRMATION OF THE BONAFIDES OF THE TRANSACTION. 5, THE ENTIRE ADDITION IS MADE PURELY, SIMPLY AND M ECHANICALLY RELYING UPON ONLY ONE DOCUMENT, BY PASSING HOST OF EVIDENCE S, INCLUDING REGISTERED SALE DOCUMENT. THIS TOO, WITHOUT MAKING ANY INQUIRY / VERIFICATION WORTH A NAME. 22. THUS, WE NOTICE THAT THE FACTS AND CIRCUMSTA NCES RELATING TO FLAT NO.6 ARE IDENTICAL TO THAT RELATING TO FLAT NO.5, WHICH WE H AVE CONSIDERED WHILE DEALING WITH THE APPEAL FILED BY THE ASSESSEE FOR AY 2007-0 8. HENCE, FOR IDENTICAL REASONS DISCUSSED IN AY 2007-08, WE HOLD THAT THE A DDITION OF RS.28.09 LAKHS MADE IN AY 2008-09 WAS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE TH E SAID ADDITION. 23. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH JAN, 2015 . $% ! & '( )* 14TH JAN, 2015 % + , SD SD ( %-+& / 0/ JOGINDER SINGH ) ( . . ,/ B.R. BASKARAN ) & / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' ! MUMBAI:14TH JAN,2015. . . ./ SRL , SR. PS %& ' (!)* +%*,) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! 2' ( ) / THE CIT(A)- CONCERNED 4. ! 2' / CIT CONCERNED 5. 6. 34+ '- , # - , ' ! / DR, ITAT, MUMBAI CONCERNED +5 6 / GUARD FILE. 3831-3839-3838/M/12 18 7 ! / BY ORDER, TRUE COPY 0 (ASSTT. REGISTRAR) # - , ' ! /ITAT, MUMBAI