Shri Manoj Mittal, Panchkula V. ACIT, Chandigarh

ITA 393/CHANDI/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9799 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Search and seizure; Document seized; Additional evidence; Cost of acquisition; Documents seized
• Section: 92C; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 393/CHD/2013 (ASSESSMENT YEAR : 2008-09) SHRI MANOJ MITTAL, VS. THE A.C.I.T, # 536, SECTOR 16, CENTRAL CIRCLE-II, PANCHKULA. CHANDIGARH. PAN: AAZPM1127B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI SUSHIL KUMAR, CIT DR DATE OF HEARING : 19.07.2016 DATE OF PRONOUNCEMENT : 20.07.2016 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (CENTRAL), GURGAON DATED 8.3.2013 FOR ASSESSMENT YE AR 2008- 09. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PR ESS GROUND NO.4 OF THE APPEAL OF THE ASSESSEE, WHICH WA S ALSO NOT PRESSED BEFORE THE CIT (APPEALS). THE GROUND NO.5 IS CHARGING OF INTEREST, WHICH IS MANDATORY AND AS SUCH, NOT PR ESSED. THE GROUND NOS.4 AND 5 ARE, THEREFORE, DISMISSED BEING NOT PRESSED. 4. ON GROUND NOS.1 AND 2, THE ASSESSEE CHALLENGED ADDITION OF RS.34,92,900/- MADE ON ACCOUNT OF SHORT TERM CAPITAL GAINS ARISING OUT OF SALE OF PLOT OF LAND B ASED ON SEIZED PAPERS. 5. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CA SE, SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF T HE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED ON THE RESIDENTIAL/BUSINESS PREMISES OF MITTAL GROUP OF CA SES ON 16.1.2009. THE ASSESSEE FILED RETURN OF INCOME DEC LARING INCOME OF RS.5,21,550/-. THE ASSESSING OFFICER, HO WEVER, COMPLETED ASSESSMENT AT RS.51,52,000/- VIDE ORDER D ATED 25.8.2011. THE DOCUMENT IN A-5 WAS FOUND IN THE PO SSESSION OF SHRI ASHOK MITTAL AT THE RESIDENCE; PAGE 47-56 B EING COPIES OF AGREEMENT TO SELL BETWEEN M/S SAWAN LAND DEVELOP ERS PVT. LTD. AND A GROUP OF PERSONS INCLUDING THE ASSESSEE FOR SALE OF 6 KANAL, 6 AND 1/6 MARLA AT KHARAR ON 21.12.2006 FO R RS.1,90,00,000/-. PAGE 63 IS A RECEIPT ISSUED BY M /S SAWAN FOR RS.50,00,000/- DATED 30.5.2007. SHRI ASHOK MI TTAL IS THE BROTHER OF THE ASSESSEE. THE ASSESSEE HAD MAINTAIN ED THAT HE WAS NOT IN RECEIPT OF ANY CONSIDERATION MONEY FROM M/S SAWAN AND THAT THE ORIGINAL CHEQUE OF RS.50 LACS WA S UN- 3 ENCASHED AS THE SAME WAS LYING WITH THE DEPARTMENT. IT IS THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSE ALON G WITH OTHER CO-OWNERS HAD SOLD THE LAND TO M/S SAWAN, WHO IN TU RN SOLD TO SHRI AVATAR SINGH RECEIVING AN ADVANCE OF RS.1,9 0,00,000/- ON 28.12.2006. THE TOTAL CONSIDERATION WAS RS.2,15 ,00,000/-. CONSIDERING THE COST OF THE LAND AND THE SHARE OF T HE ASSESSE WHICH IS L/5 TH , AN AMOUNT OF RS.34,92,900/- WAS TREATED AS SHORT TERM CAPITAL GAINS IN THE HANDS OF THE ASSESS EE. 6. THE ASSESSEE CHALLENGED THE ADDITION OF RS.34,92,900/- MADE ON ACCOUNT OF SHORT TERM CAPITA L GAINS ON SALE OF LAND. THE WRITTEN SUBMISSION OF THE ASS ESSEE IS REPRODUCED IN THE IMPUGNED ORDER, WHICH READS AS UN DER : BRIEF FACTS LEADING TO THE IMPUGNED ADDITION ARE T HAT ONE DOCUMENT A-5 (PAGES 47-56 & 63) WERE FOUND FROM THE POSSESSION OF SHRI ASHOK MITTAL BROTHER OF THE ASSESSEE. THIS DOCUMENT IS ONE UNSIGNED AGREEMENT TO SELL WHEREIN IT IS MENTIONED THAT LAND BELONGING TO CERTAIN INDIVIDUALS INCLUDING THE ASSESSEE IS BEING SOLD TO ONE M/S SAWAN LAND AND DEVELOPERS. COPY OF THE AGREEMENT TO SELL (A-5 PAGE S 47-56) IS PLACED IN THE PAPER BOOK AT PAGE 5-24 ALONGWITH ENGLISH TRANSLATION. ON THE BASIS OF THIS AGREEMENT, THE ASSESSING OFFICER CONCLUDED THAT THE LAND HAS BEEN SOLD FOR RS.1,90,00,000/- TO M/S SAWAN LAND DEVELOPERS PRIVATE LIMITED, ON PERUSAL OF THE SAID AGREEMENT, IT WOULD BE SEEN THAT THE SA ME IS UNSIGNED. THE ORIGINAL AGREEMENT TO SELL IS IN THE POSSESSION OF THE DEPARTMENT, WHEREIN THIS AMOUNT I S MENTIONED. FURTHER, IT IS PERTINENT TO MENTION HER E THAT EVEN THE ORIGINAL CHEQUES FOR RS.1,90,00,000/- AS MENTIONED IN THE AGREEMENT TO SELL STAND SEIZED BY THE DEPARTMENT. THUS, THE CONCLUSION ARRIVED AT 4 BY THE ASSESSING OFFICER IS BEREFT OF ANY MERIT. I T IS ONLY ON SUSPICION, SURMISES AND CONJECTURES THAT TH E ADDITION HAS BEEN MADE. FURTHER, THE ASSESSING OFFICER COULD HAVE SUMMONED THE OTHER ALLEGED SELLE RS AND THE INTENDING PURCHASES TO CULL OUT THE FACTS. IT IS A PROVEN FACT THAT AN AGREEMENT TO BE ENFORCEABL E HAS TO BE SIGNED BY BOTH THE PARTIES. ADMITTEDLY, T HE IMPUGNED AGREEMENT IS UNSIGNED. EVEN THE RECEIPT BEING SEIZED DOCUMENT NO.A-5 PAGE 47-52 IS UNSIGNED. THE SAID RECEIPT IS AT PAGES 9/19 OF THE PAPER BOOK. THE ORIGINAL CHEQUES ARE LYING WITH THE DEPARTMENT. COPY OF ONE SUCH CHEQUE IS DOCUMENT A-5 PAGE 63, WHICH IS PLACED IN THE PAPER BOOK AT PAGE 33. FURTHER, THERE IS ONE AGREEMENT TO SELL ALLEGEDLY ENTERED INTO BETWEEN M/S SAWAN LAND AND DEVELOPERS PRIVATE LIMITED AND ONE SHRI AVTAR SINGH , WHEREIN M/S SAWAN LAND AND DEVELOPERS HAVE ALLEGEDLY SOLD THIS LAND FOR RS.2,15,00,000/-. THI S DOCUMENT (A-5 PAGE 57-60) ALONGWITH ENGLISH TRANSLATION FINDS PLACE AT PAGES 25-32 OF THE PAPER BOOK. AS ALREADY SUBMITTED, THE ASSESSING OFFICER COULD HAVE SUMMONED THE OTHER ALLEGED SELLERS AND THE INTENDING PURCHASES TO CULL OUT THE FACTS. ASSESSEE IS NOT EVEN A PARTY TO THIS AGREEMENT. TH IS EXERCISE HAS NOT BEEN DONE BY THE ASSESSING OFFICER AND HAS PROCEEDED TO CONCLUDE THAT THE ASSESSEE ALONGWITH OTHER CO-OWNERS HAD IN FACT SOLD THE LAND FOR RS.1,90,00,000/-. HE AFTER GIVING THE BENEFIT O F COST OF ACQUISITION MADE AN ADDITION OF RS.34,92,900/-. UNDER THE CIRCUMSTANCES, IT IS PRAYED THAT THE ADDITION MADE MAY PLEASE BE DELETED. 7. THE LEARNED CIT (APPEALS) CONSIDERING THE SUBMISSIONS OF THE PARTIES AND MATERIAL ON RECORD, CONFIRMED 5 THE ADDITION AND DISMISSED THESE GROUNDS OF APPEAL, HOLDING AS UNDER : 1 HAVE CONSIDERED THE SUBMISSIONS AND THE IMPUGNED ORDER. THE ARGUMENT BEFORE ME IS THAT THE AGREEMENT SELL, WAS UNSIGNED AND EVEN THE ORIGINAL CHEQUE FOR RS.1.90 CR ORE AS MENTIONED IN THE AGREEMENT STANDS SEIZED BY THE DEPART MENT. THESE ARGUMENTS HAVE NO FORCE AS THE SALE AGREEMENT HAS BEEN DULY NOTARISED. THE FACT THAT THE ASSESSEE HAD ACQU IRED 1/5 TH SHARE IN THE RELEVANT LAND UNDER CONSIDERATION, VALUE D AT RS. 13,35,000/- AND STAMP DUTY AT RS. 2,00,500/- DURING F .Y. 2005-06 IS AN ADMITTED FACT. IT LOGICALLY FOLLOWS THAT UNLESS THE SAID PLOT OF LAND WAS NOT SOLD BY THE ASSESSE AND OTHER CO-OWNER TO M/S SAWAN, IT COULD NOT HAVE BEEN POSSIBLE FOR M/S SAWAN TO HAVE FURTHER SOLD IT TO SH. AVATAR SINGH. THE RECEIPT OF ADVANCE, THE ORIGINAL SALE DEED AND THE REGISTERED SALE DEED ON R ECORD ARE CORROBORATING EVIDENCES. THE DATES ALSO CORROBORATE. T HESE COPIES WERE FOUND IN THE POSSESSION OF THE BROTHER OF THE ASSESSEE AT HIS RESIDENCE WHERE THE BROTHERS AT ONE TIME LIV ED JOINTLY. THE ASSESSEE HAS OBVIOUSLY NOT BEEN ABLE TO PUT FOR TH ANY PROPER, REASONABLE NOR REASONABLE EXPLANATION THAT THE CONTENTS OF THE DOCUMENTS ARE NOT TRUE. THUS CONSIDE RING THE FACT OF THE CASE IT IS VERY EVIDENT THAT THE ASSESSEE HAD SOLD HIS SHARE AND HAD EARNED A PROFIT WHICH HE FAILED TO DECLARE IN HIS RETURN OF INCOME. THUS THE ADDITION MADE BY THE A.O. IS CONFIRME D. ASSESSEE FAILS ON THIS GROUND OF APPEAL. 8. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE SEIZED AGREEMENT IN QUESTION IS UN-SIGNED AND IS DATED 21.12.2006. THEREFORE, IT CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. FURTHER, IT IS NOT RECOVERED FROM THE POSSESSION OF THE ASSESSEE, THEREFORE, NO PRESUMPTI ON COULD BE DRAWN AGAINST THE ASSESSEE. HE HAS SUBMITTED TH AT THE CHEQUE IN QUESTION WAS NOT ENCASHED BY THE ASSESSEE AND THE 6 ASSESSEE HAS NOT RECEIVED ANY CONSIDERATION. THERE FORE, ENTIRE ADDITION IS UNJUSTIFIED. HE HAS REFERRED TO COPIES OF THE AGREEMENT TO SELL I.E. SEIZED PAPER FROM THE PAPER BOOK IN SUPPORT OF HIS CONTENTION. HE HAS SUBMITTED THAT S INCE THERE IS NO MATERIAL FOUND AGAINST THE ASSESSEE AND NO SA LE IS CONDUCTED IN THE YEAR UNDER CONSIDERATION, THEREFOR E, THE ADDITION IS UNJUSTIFIED. HE HAS ALSO FILED APPLICA TION FOR ADMISSION OF ADDITIONAL EVIDENCE, WHICH ARE COPIES OF THE PURCHASE DEED BY THE ASSESSEE ALONGWITH OTHER CO-OW NERS WITH JAMABANDI FOR VARIOUS YEARS AND COPIES OF THE SALE DEED DATED 28.12.2006 AND 29.12.2006, WHEREBY THE PROPERTY IN QUESTION WAS TRANSFERRED THROUGH SALE DEED, WHICH ALSO WOULD NOT FALL IN ASSESSMENT YEAR UNDER APPEAL. 9. THE LEARNED D.R., ON THE OTHER HAND, RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW AND FILED OBJECTION REGARDING ADMISSION OF ADDITIONAL EVIDENCE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSEE HAS FILED COPIES OF THE SEIZED DOCUMENTS I .E. AGREEMENT TO SELL IN THE PAPER BOOK, WHICH DID NOT BEAR SIGNATURE OF THE ASSESSEE. THE ASSESSEE SPECIFICAL LY PLEADED BEFORE THE CIT (APPEALS) THAT THE DOCUMENT IS UN-SI GNED. THE ASSESSING OFFICER HAS ALSO PLACED COPIES OF THE SEI ZED PAPERS I.E. AGREEMENT TO SELL WITH THE ASSESSMENT ORDER, W HICH SUPPORTS THE CONTENTION OF THE ASSESSEE THAT IT IS UN-SIGNED AGREEMENT TO SELL. SINCE THE ASSESSEE HAS NOT SIGN ED THE AGREEMENT FOUND DURING THE COURSE OF SEARCH, NO LIA BILITY COULD BE ATTRIBUTED QUA THE AGREEMENT TOWARDS THE A SSESSEE 7 SINCE HE WAS NOT A PARTY TO THE AGREEMENT TILL THE ASSESSEE HAS SIGNED THE AGREEMENT. FURTHER, THE SEIZED AGRE EMENT TO SELL WAS NOT RECOVERED FROM THE POWER AND POSSESSIO N OF THE ASSESSEE, THEREFORE, NO PRESUMPTION UNDER SECTION 2 92C OF THE ACT COULD BE DRAWN AGAINST THE ASSESSEE. THE HON'B LE DELHI HIGH COURT IN THE CASE OF CIT VS. KULWANT RAI, 291 ITR 36 (DEL) HELD AS UNDER : HELD, DISMISSING THE APPEAL, (I) THAT, ADMITTEDLY, THE ASSESSEE HAD NOT SIGNED THE AGREEMENT IN QUESTION AND SINCE HE HAD NOT SIGNED THE AGREEMENT, NO LIABILITY COULD BE ATTRIBUTED QUA THAT AGREEMENT TOWARDS HIM SINCE HE WAS NOT A PARTY TO THE AGREEMENT TILL HE HAD SIGNED THE AGREEMENT. THE MERE FACT THAT THIS AGREEMENT WAS FOUND IN THE POSSESSION OF THE ASSESSEE DID NOT LEAD ANYWHERE. THUS, THE ADDITION OF RS.17,00,892 MADE BY THE ASSESSING OFFICER BY WAY OF HALF SHARE OF THE ASSESSEE IN THE EARNEST MONEY WAS BASED ON SURMISES AND GUESS WORK ONLY AND WAS LIABLE TO BE DELETED. 11. SINCE THE DOCUMENT WAS FOUND FROM THE POSSESSI ON OF SHRI ASHOK MITTAL, BROTHER OF THE ASSESSEE, THER EFORE, IT WAS DUTY OF THE INVESTIGATION AGENCY TO FIND OUT THE TR UTH FROM SHRI ASHOK MITTAL AS TO WHOM THE DOCUMENT BELONG. SINCE THE SEIZED DOCUMENT IS UN-SIGNED, THEREFORE, NO LIABILI TY COULD BE ATTACHED TO THE ASSESSEE. FURTHER, THE ORIGINAL CH EQUE OF RS.50 LACS IN FAVOUR OF THE ASSESSEE WAS ALSO SEIZE D BY THE REVENUE DEPARTMENT. THE SAME HAS NOT BEEN ENCASHED BY THE ASSESSEE, WHICH IS IN SUPPORT OF THE ASSESSEE THAT THE ASSESSEE WAS NOT PARTY TO THE AGREEMENT TO SELL. N O EVIDENCE 8 WAS FOUND DURING THE COURSE OF SEARCH THAT THE ASSE SSEE HAD TRANSFERRED ANY CAPITAL ASSET IN ASSESSMENT YEAR UN DER APPEAL. THEREFORE, THERE IS NOT QUESTION OF CHARGI NG ANY CAPITAL GAIN FROM THE ASSESSEE. IT MAY ALSO BE NOT ED HERE THAT THE AGREEMENT TO SELL IS DATED 21.12.2006. THEREFO RE, THE SAME WOULD HAVE FALL IN ASSESSMENT YEAR UNDER APPEA L I.E. 2008-09. AT THE MOST, SUCH TRANSACTIONS EVEN IF CO NSIDERED GENUINE BY THE REVENUE AUTHORITIES ON THE BASIS OF SEIZED AGREEMENT TO SELL DATED 21.12.2006, THE ALLEGED SAL E COULD BE CONSIDERED IN ASSESSMENT YEAR 2007-08. SINCE THERE IS NO EVIDENCE OF SALE OR TRANSFER OF ANY CAPITAL ASSET I N ASSESSMENT YEAR UNDER APPEAL AND NO CONSIDERATION HAS BEEN FOU ND TO HAVE BEEN RECEIVED BY THE ASSESSEE, THEREFORE, ENTI RE ADDITION MADE BY THE AUTHORITIES BELOW IS UNJUSTIFIED. THE DOCUMENTS ARE NOT INCRIMINATING IN NATURE AGAINST THE ASSESSE E AND AS SUCH, CANNOT USED IN EVIDENCE AGAINST THE ASSESSEE. THE AUTHORITIES BELOW ALSO CONSIDERED SOME TRANSACTIONS BETWEEN M/S SAWAN LAND DEVELOPERS PVT. LTD. AND SHRI AVTAR SINGH BUT THE SAME HAS NO CONNECTION WITH THE TRANSFER OF ANY CAPITAL ASSET BY THE ASSESSEE IN ASSESSMENT YEAR UN DER APPEAL. 12. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF MATERIAL ON RECORD AND IN THE LIGHT OF JUDGMENT OF DELHI HIGH COURT IN THE CASE OF KULWANT RAI (SUPRA), NO ADDITION COULD BE MADE AGAI NST THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.34, 92,900/-. 9 IN VIEW OF THE ABOVE FINDINGS, THERE IS NO NEED TO CONSIDER THE REQUEST OF THE ASSESSEE FOR ADMITTING ADDITIONAL EV IDENCES FOR ADJUDICATION. THE GROUND NOS.1 AND 2 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 13. ON GROUND NO.3, THE ASSESSEE CHALLENGED ADDITI ON OF RS.11,10,453/- UNDER SECTION 68 OF THE ACT. THE AS SESSING OFFICER ON PERUSAL OF THE BANK STATEMENT OF SAVING BANK ACCOUNT WITH BANK OF INDIA IN THE NAME OF THE ASSES SEE NOTED THAT SEVERAL SUMS HAD BEEN CREDITED IN THE BANK ACC OUNT ON DIFFERENT DATES. THE ASSESSEE SUBMITTED THAT HE HA S RECEIVED THESE AMOUNTS FROM VARIOUS PERSONS IN SUM OF RS.11, 16,125/- THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE DO CUMENTARY EVIDENCE TO SUBSTANTIATE HIS CLAIM BUT THE ASSESSEE DID NOT FILE ANY EVIDENCE. THEREFORE, IN THE ABSENCE OF AN Y EVIDENCE ON RECORD, THE SAME WAS TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND ADDITION WAS ACCORD INGLY, MADE. 14. THE ASSESSEE ALSO SUBMITTED BEFORE THE CIT (AP PEALS) THAT NO DOCUMENTARY EVIDENCE IS READILY AVAILABLE. THE LEARNED CIT (APPEALS) IN THE ABSENCE OF ANY EVIDENC E ON RECORD, DISMISSED THE APPEAL OF THE ASSESSEE. 15. THE LEARNED COUNSEL FOR THE ASSESSEE VERY FAIR LY SUBMITTED BEFORE US THAT THE ASSESSEE HAS NO EVIDEN CE TO EXPLAIN THE CASH CREDIT. IN THIS VIEW OF THE MATT ER AND CONSIDERING THE SUBMISSIONS OF LEARNED COUNSEL FOR THE ASSESSEE, WE DO NOT FIND ANY JUSTIFICATION TO INTER FERE WITH 10 ORDERS OF THE AUTHORITIES BELOW. THEREFORE, THIS G ROUND FAILS AND IS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH JULY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH