M.R. Jaidka, Mandi Gobindgarh V. DCIT, Patiala

ITA 51/CHANDI/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9015 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: ASHOK GOEL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Depreciation; Cost of acquisition; Onus to prove
• Section: 50C; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 51/CHD/2013 ASSESSMENT YEAR : 2007-08 SHRI M.R.JAIDKA, VS THE DCIT, C/O MAHADEV STEEL INDUSTRIES, CENTRAL CIRCLE-1, AMLOH ROAD, PATIALA. MANDI GOBINDGARH, PAN: ABFPJ2692H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK GOEL RESPONDENT BY : SHRI RAVI SARANGAL & ITA NO. 72/CHD/2012 ASSESSMENT YEAR : 2007-08 LATE SMT. AMARJIT KAUR, VS THE DCIT, THROUGH L/H SH JAGMOHAN SINGH, CENTRAL CIRCLE-1, 2409, KRISHNA NAGAR, PATIALA. LUDHIANA. PAN: ACJPK7761R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SING H RESPONDENT BY : SHRI RAVI SARANGAL DATE OF HEARING : 29.09.2016 DATE OF PRONOUNCEMENT : 18.10.2016 O R D E R PER BHAVNESH SAINI, JM BOTH THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECT ED AGAINST DIFFERENT ORDERS OF LD. LD.CIT(APPEALS)-I L UDHIANA 2 DATED 05.10.2012 AND 11.11.2011 FOR ASSESSMENT YEAR 2007-08. 2. BOTH THE APPEALS WERE HEARD TOGETHER ON IDENTICA L ISSUE. LD. REPRESENTATIVES OF BOTH THE PARTIES MAI NLY ARGUED IN THE CASE OF ASSESSEE SHRI M.R.JAIDKA AND SUBMITTED THAT ISSUE IS SAME AND ORDER IN THE CASE OF SHRI M.R.JAIDKA MAY BE FOLLOWED IN THE CASE OF OTHE R ASSESSEE. THEREFORE, FOR THE PURPOSE OF DISPOSAL O F BOTH THE APPEALS, WE DECIDE THE APPEAL OF SHRI M.R.JAIDK A AS UNDER. ITA 51/2013 ( SHRI M.R. JAIDKA) 3. IN THIS APPEAL, ASSESSEE CHALLENGED THE UPHOLDIN G OF ADDITION OF RS. 36,22,300/- ON ACCOUNT OF PAYMEN T OF PURCHASE CONSIDERATION IN EXCESS OF THE AMOUNT RECO RDED IN THE REGISTERED DEED. THE BRIEF FACTS OF THE CAS E ARE THAT ONE SH.TEHAL SINGH, HAD A PROPERTY AT KHANNA MEASURING 10-K I9 -M, AND AFTER HIS DEATH, THE PROPERTY WAS PASSED ON TO HIS LEGAL HEIRS, SEVEN IN NUMBERS, WHICH COMPRISE OF HIS WIFE, TWO SONS AND F OUR DAUGHTERS. OUT OF THE FOUR DAUGHTERS, TWO DAUGHTERS WERE FROM HIS SECOND WIFE. THUS, EACH LEGAL HEIR HAD L/7 TH SHARE IN THAT PROPERTY. HOWEVER, AFTER THE DEATH OF HIS FIRST WIFE, HER L/7 TH SHARE WENT TO HIS TWO SONS. THUS THE SHARE OF EACH LEGAL HEIR WAS L/7 TH EXCEPT TWO SONS, WHO ALSO OWNED THE L/7 TH SHARE OF THEIR MOTHER IN EQUAL PROPORTION. THOUGH, TILL ITS SALE, THE SHARE RATIO OF EACH LEGAL HEIR WAS ASCERTAINABLE BUT THE PROPERTY, IN 3 QUESTION, WAS UNDIVIDED AND AS SUCH, THE DETAIL OF A PARTICULAR PORTION OF THE SAID PROPERTY BELONGING T O EACH LEGAL HEIR WAS NOT ASCERTAINABLE. 3(I) AS STATED SUPRA, SH. TEHAL SINGH HAD TWO WIVE S AND THUS, HIS FAMILY HAD TWO UNITS. ONE UNIT CONSISTS O F FOUR MEMBERS I.E. TWO BROTHERS AND TWO SISTERS UNDER REFERENCE, HAVING 5/7 TH SHARES AND THE OTHER UNIT CONSISTS OF TWO MEMBERS HAVING 2/7 TH SHARE. THE FIRST UNIT CONSISTING OF TWO BROTHERS AND TWO SISTERS ENT ERED INTO AN AGREEMENT WITH SH. ROOP SACHDEVA AND SH. AS HOK TIWARI FOR SALE OF PROPERTY KNOWN AS TEHAL SINGH DI KOTHI FOR A SUM OF RS. 3.80 CRORES THROUGH DR. RAVINDER S INGH SIDHU, BEING THE HOLDER OF POA ON BEHALF OF TWO BRO THERS (NAMELY SH. MAHINDER SINGH & SH. GURDEEP SINGH) AND SH. JAGMOHAN SINGH, HUSBAND OF THE MRS. AMARJIT KAU R, BEING THE HOLDER OF POA OF HIS SISTER-IN-LAW (NAMEL Y MS. SURINDER KAUR) WHEREAS, MS. AMARJIT KAUR, HAYING L/ 7 TH SHARE ENTERED INTO THAT AGREEMENT INDEPENDENTLY HER SELF. AT THE TIME OF AGREEMENT, THE PROSPECTIVE BUYERS PA ID AN AMOUNT OF RS. 60 LACS AS ADVANCE MONEY (BIANA). THI S AGREEMENT IS DATED 14.05.2005 AND IT WAS TO BE IMPLEMENTED BY 28.02.2006. ON THE DATE OF IMPLEMENTATION OF AGREEMENT I.E. 28.02.2006, THE PROSPECTIVE BUYERS APPEARED BEFORE THE REGISTERING AUTHORITY WITH THE SETTLED AMOUNT OF SALE PRICE OF RS. 3.80 CRORE BUT THE SELLERS DIDN'T APPEAR AND AS SUC H, THAT AGREEMENT WAS NOT MATERIALIZED. THE PROSPECTIVE BUY ERS, 4 ACCORDINGLY, FILED A CIVIL SUIT IN THE HON'BLE COUR T OF ADDITIONAL CIVIL JUDGE (SENIOR DIVISION) KHANNA, BE ARING CIVIL SUIT NO. 169 OF 11.05.2006 AGAINST THE SELLER S. IN THEIR CIVIL SUIT, THE ORIGINAL PROSPECTIVE BUYERS S OUGHT THE FOLLOWING RELIEFS : I) FOR SPECIFIC PERFORMANCE ON THE BASIS OF CONTRACT OF SALE DATED 14.05.2005, EXECUTED BY THE SELLER RELATING TO LAND MEASURING 10-K, 19 1 /2 M, INCLUDING THE KOTHI AND OTHER BUILDINGS AND STRUCTURE & 4 SHOPS. II) FOR POSSESSION BY PARTITION OF THE SAID PROPERTY; AND III) FOR GRANT OF PERMANENT INJUNCTION RESTRAINING THE DEFENDANTS FROM ALIENATING OR TRANSFERRING IN ANY MANNER, LEASING OUT, MORTGAGING AND CREATING CHARGE AND ENCUMBRANCE OF ANY KIND FROM CONSTRUCTING, CHANGING THE EXISTING CONDITION, IN ANY MANNER OF THE SAID PROPERTY, TILL THE PARTITION IS EFFECTED BY METES AND BOUNDS. 3(II) DURING THE PENDENCY OF CIVIL SUIT, THE POA EXECUTED IN FAVOUR OF DR. RAVINDER PAL SIDHU AND SH. JAGRPOHAN SINGH WERE CANCELLED AND INSTEAD A NEW POA ON BEHALF OF THREE CO-OWNERS (I.E. SH. MAHINDER SINGH, SH. GURDEEP SINGH, BROTHERS AND MS. SURINDER KAUR, SISTER) WAS EXECUTED IN FAVOUR O F OTHER PERSON. THE OWNERS ALONGWITH THE HOLDER OF 5 POA ON BEHALF OF BROTHERS AND SISTER ENTERED INTO A TRANSACTION FOR SALE OF SAID PROPERTY I.E. TEHAL SI NGH DI KOTHI WITH THE DIFFERENT PURCHASER AND ULTIMATEL Y EXECUTED SALE DEEDS DATED 28.08.2006 IN THEIR FAVOUR (INCLUDING ASSESSEE) IN RESPECT OF PROPERTY MEASURING 8-KANALS FOR A TOTAL CONSIDERATION OF RS . 80,00,000/- THE SALE PRICE FOR WHICH THE SALE DEED OF THE PROPERTY WAS EXECUTED WAS FAR LESS THAN THAT OF THE AMOUNT OF RS. 3.80 CRORES, AGREED TO BE PAID BY THE ORIGINAL PROSPECTIVE BUYERS I.E. SH. ROOP SACHDEVA & SH. ASHOK TIWARI IN RESPECT OF SAID PROPERTY. THE AO, IN THIS BACK GROUND CONFRONTED THE ASSESSEE WITH THE PROPOSAL THAT THE SALE CONSIDERATION FOR THE ENTIRE PROPERTY SHOULD BE TAKEN AT AN AMOUNT OF RS. 3,80,00,000/-. THE ASSESSING OFFICER ALSO RELIED UPON DOCUMENT IN THE FORM OF MUFFISIL REPORT DATED 29/12/2006 SUBMITTED BY INTERNAL VIGILANCE CELL, PUNJAB CERTIFYING THE VALUE OF THE PROPERTY AT RS. 6.527 CRORES. APART FROM THIS THE AO RELIED UPON A POST DATED CHEQUE FO R AN AMOUNT OF RS. 20 LACS ISSUED BY SH. RAVINDER PAL SINGH IN FAVOUR PF DR. MS. AMARJIT KAUR AND THE SAME WAS DATED 5/9/2006 AND THE PROPERTY WAS SOLD BY REGISTRATION DEED DATED 28/8/2006. THE LEGAL HEI R OF THE LATE DR. MS. AMARJIT KAUR I.E. HER HUSBAND MR. JAGMOHAN SINGH COULD NOT GIVE ANY SATISFACTORY EXPLANATION FOR HAVING RECEIVED THE ABOVE MENTIONED CHEQUE WHICH WAS NOT ENCASHED AT ALL. THE AO AFTER 6 CONSIDERING THE EXPLANATION SUBMITTED BY SH. RAVINDER SINGH CAME TO THE CONCLUSION THAT THE CHEQUE WAS IN FACT ISSUED TO ASSURE THE ASSESSEE REGARDING THE EXTRA AMOUNT TO BE PAID IN CASH OVER AND ABOVE THE REGISTERED AMOUNT. THE A.O. MADE ABOVE ADDITION AGAINST ASSESSEE. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND ARGUMENTS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER WHICH READ AS UND ER : 'THE BRIEF FACTS ARE THAT THE APPELLANT IS AN INDIVIDU AL HAVING INCOME FROM BUSINESS, RENTAL, INTEREST INCOME. DURI NG THE F.Y 2006- 07 RELEVANT TO A.Y.2007-08 HE ALONGWITH OTHER CO OW NERS PURCHASED PROPERTY AT KHANNA ON 28.08.2006. HIS SHAR E WAS 18% HE INVESTED & RS.13,20,300/- WHICH WAS DULY ACCOUNTED FOR. HOWEVER A LEGAL DISPUTE AROSE IN THE COURT RELEVANT TO THAT PROPERTY & APPELLANT SURRENDERED HIS SHARE IN COURT AT THE PURCHASE VALUE MUCH BEFORE THE SEARCH & SEIZURE OPE RATION WHICH TOOK PLACE ON 04.10.2007. THIS FACT WAS DISCLOSED T O SEARCH PARTY DURING SEARCH OPERATION ALSO. WE REPRODUCE OU R SUBMISSION BEFORE A.O. IN THIS REGARD. REGARDING PROPERTY AT KHANNA, WE SUBMIT AS UNDER:- WE PURCHASED THE PROPERTY FROM MAHINDER SINGH S/O S H. TEHAL SINGH, THROUGH JATINDER PAL SINGH S/O SAMPURAN SINGH & GURDEEP SINGH S/O SH.TEHAL SINGH, SURINDER KAUR & AMRAJIT KAUR ON DATED.28.08.2006. THE TOTAL INVESTM ENT IN THE PROPERTY MADE BY US AMOUNTS TO RS.23,06,115/-, RS.L 4,31,115/- BY SH.MANGAT RAI JAIDKA & RS.8,75,000/- BY SH. DEVIND ER PAL JAIDKA. SOURCE OF THE SAME HAS BEEN DISCLOSED & EXP LAINED TO YOUR GOODSELF EARLIER ALSO. LATELY THE PROPERTY WENT INTO DISPUTE AND COURT CASE STARTED AT HON'BLE COURT OF ADDITIONAL CIVIL JUDGE (SENIOR DIVISION), KHANNA. WE SURRENDERED OUR RIGHT F OR THE SAME AMOUNT IN THE COURT AND SETTLED THE CASE FROM OUR AN GEL. THE AMOUNT HAS BEEN DEPOSITED IN THE COURT. HOWEVER, WE HAVE NOT RECEIVED THE SAME TILL DATE. THE SAME FACTS WERE AL SO TOLD BY SH. MANGAT RAI JAIDKA IN HIS STATEMENT RECORDED BY THE INCO ME TAX DEPARTMENT WHICH IS REPRODUCED AS UNDER : 7 PAGE 10: REPLY TO QUESTION NO.31: 'THESE PAPERS RELATE TO PURCHASE PROPERTY OF SH. TE HAL SINGH AND HIS FAMILY MEMBERS IN THE NAME OF SH. MANGAT RAI JAIDKA , SH. DEVINDER PAL AND SMT. SNEH LATA. WE HAVE PURCHASED THE PROPERTY AT RS.32-34 LACS APPROXIMATELY. HOWEVER, W E HAVE SURRENDERED THE PROPERTY TO THE COURT AT THE SAME P RICE.' COPY OF THE REGISTRATION DEEDS HAS BEEN ALREADY SUB MITTED WITH YOURSELF. FURTHER, DOCUMENT NO.7 TO 15 SEIZED FROM TH E PREMISES OF SH. RAVI SHARMA AT THE TIME OF SURVEY CONTAINS AFFIDA VITS OF SH. MANGAT RAI JAIDKA & SH. DEVINDER PAL JAIDKA IN WHICH W E HAVE SURRENDERED THE SAID PROPERTY (COPY OF THE SAID DOCUM ENT IS ENCLOSED FOR YOUR REFERENCE) WE ARE ENCLOSING THE COPY OF THE COURT'S PROCEEDING S IN WHICH THE PROPERTY WAS SURRENDERED BY US, WHICH PROVES THE SA ME.' THERE WERE SEVEN CO-OWNERS OF THE PROPERTY (ADMITTE D BY A.Y. IN PARA 22 OF THE ASST. ORDER) THE RELIAINCE OF A.O IS O N THE BASIS OF AN AGREEMENT TO SELL BETWEEN SH. ROOP SACHDEVA & SH . ASHOK TIWARI (BUYER) & THREE CO-OWNERS & ONE CO-OWNER THRO UGH POWER OF ATTORNEY ONLY. HOW THIS AGREEMENT IS VALID WHEN ALL THE CO-OWNERS THROUGH POWER OF SELLER GROUP HAS NOT SIGNED TINE SAME . FURTHER RELIANCE OF A.O ON STALE CHEQUE FOUND FROM T HE RESIDENCE OF DR. MRS. AMARJIT KAUR ISSUED BY DR. RAVINDER PAL SINGH SIDHU HAS NO RELEVANCE WITH US. THE SAID DOCUMENTS WAS NEV ER FOUND FROM US & WAS NEVER CONFRONTED TO US. IT HAS NOTHING TO DO WITH OUR PURCHASE TRANSACTION. DR. RAVINDER PAL SINGH HAS REPLIED THE SAID PURCHASE TRANSACTION. DR. RAVINDER PAL SINGH HAS REPLIED THE SAID QUERY IN HIS OWN CASE WHICH HAS BEEN REPRODUCED IN PARA 2.6.4.1 OF THE ASSESSMENT ORDER WHICH IS SELF EXPLAN ATORY. THE SUBMISSION OF A.O. THAT CHEQUE WHICH WAS NOT ENCASHED H AS NO RELEVANCE. FIRSTLY REGISTRATION ALREADY HAPPENS BEFO RE THAT & RAVINDER PAL SINGH WAS ONLY POA HOLDER OF OTHER CO- OWNERS NEITHER WE HAVE ANY CONNECTION WITH RAVINDER PAL SINGH . NEITHER IS HE SELLER OR BUYER WITH US. WE HAVE ADVANCE THE FOLLOWING AGREEMENTS WHICH DURIN G ASST. PROCEEDINGS PART OF WHICH HAS BEEN SUMMARILY REJECTED BY A.O. WE HAVE PURCHASED PROPERTY FROM THE DIRECT OWNERS. T HEY HAVE NOT SAID THAT ANYTHING RECEIVED OVER & ABOVE THE AMO UNT ACCOUNT FOR. FURTHER GOVERNMENT HAS FIXED MARKET PRICE OF VARIOU S PROPERTIES. THE SAID VALUE HAS BEEN RECOGNIZED BY THE INCOME TAX ACT ALSO 8 (SEC. 50C OF THE I.T. ACT). THE REGISTRATION IS AT T HAT PRICE. THAT RECOGNIZES THE MARKET PRICE OF THE PROPERTY AS ON T HE DATE OF REGISTRATION. AS THE REGISTRATION OF PROPERTIES IS BEFORE TEHSILDAR WHO IS A GAZETTE GOVT. OFFICER & HE CERTIFIES THE REGISTRATION DEED & CONSIDERATION EXCHANGED, WHICH ALSO JUSTIFIES THE V ALUE OF THE PROPERTY AMOUNT PAID BY THE BUYER. AT THE TIME OF REGISTRATION TITLE OF THE PROPERTY WA S CLEAR & DUE TO WHICH REGISTRATION WAS DONE. THE PARTY WHO ALLEGES T O HAVE AN AGREEMENT DOES NOT GOT ANY STAY FROM COURT. FURTHER WE HAVE SURRENDERED OUR SHARE BEFORE THE CO URT TO AVOID LITIGATION FOR THE SAME COST. HAD WE INVESTED MORE WE WOULD HAVE FOUGHT IN COURT TO SAVE OUR INTEREST? WE WERE AT SOL ID FOOTING AS REGISTRATION WAS IN OUR FAVOR & POSSESSION WAS ALSO W ITH US. WHY WE WOULD SURRENDER OUR INTEREST IF YOUR VERSION IS T HERE. FURTHER WHY THE ALLEGED BUYER AS PER AGREEMENT AGRE ED FOR MUCH HIGHER PRICE WHEN THE MARKET PRICES ARE BEST KNOWN TO HIM. THERE MAY BE MANY REASON FOR HIS ALLEGED DEAL FOR WHICH WE ARE NOT ANSWERABLE/LIABLE. IT MAY BE MENTIONED HERE WHAT THE BUYER HAS AGREE D THE' AMOUNT AS PER OUR REGISTRATION DEED IN THE COURT BEC AUSE HE WAS SURE THAT WE HAVE INVESTED THAT AMOUNT ONLY. HE NEV ER OFFERED THE AMOUNT AS PER HIS AGREEMENT WHICH PROVES THE FACT TH AT OUR COST IS FACTUAL. FURTHERMORE, THERE HAVE BEEN SEARCH OPERATIONS AT MY RESIDENCE NOTHING INCRIMINATING IN REGARD TO SUCH INVESTMENT HAV E BEEN SEIZED OR FOUND. FURTHER, WE BROUGHT TO YOUR KIND KNOWLEDGE THAT THE BUYERS MENTIONED IN THE ALLEGED AGREEMENT TO SELL ON WHICH SHOW CAUSE HAS BEEN ISSUED HAVE PURCHASED 36% OF THE SHARE OF IQBAL SINGH S/O HARNAM SINGH, RUPINDER KAUR W/O IQBAL SINGH, INDER JIT SINGH SO HARNAM SINGH, GURWINDER KAUR, W/O INDERJEET SINGH, SARABJIT SINGH S/O RAVINDER PAL SINGH, SATINDER KAUR W/O SARAB JIT SINGH FOR A SUM OF R.36 LACS, WHICH IS AFTER 16 MONTHS FRO M THE PURCHASE BY SAID SELLERS. THE SAID SELLER NAMELY IQBA L SINGH S/O HARNAM SINGH, RUPINDER KAUR W/O IQBAL SINGH, INDERJIT SINGH S/O HARNAM SINGH, GURWINDER KAUR W/O INDERJEET SINGH, SARA BJEET SINGH S/O RAVINDER PAL SINGH, SATINDER KAUR W/O SARA BJIT SINGH HAVE PURCHASED THE SAID LAND WITH US IN AUGUST 2006 FOR RS.29 LACS & ODD. THAT PROVES THAT AGREEMENT WAS MALAFIDE & UNRELIABLE FOR THE BEST REASON KNOWN TO THE BUYER. W HEN HE HAS PURCHASED AT THE LESSER AMOUNT HOW HE CAN JUSTIFY H IS EARLIER AGREEMENT. PHOTOCOPIES OF THE REGISTRATION DEEDS ARE ENCLOSED. 9 THE A.O HAS MENTIONED THE FOLLOWING REASON FOR NOT AC CEPTING FEW OF ABOVE EXPLANATION. REGARDING PARA 3 ABOVE. PARA 2.6.1 (OF THE ASSESSMENT ORDER) 'HOWEVER HE (TEHSILDAR) IS NOT CONCERNED WITH THE ACT UAL CONSIDERATION EXCHANGE AS STATED ABOVE. IT IS FACTUALLY WRONG. THE GOVT. OFFICER HAS TO CHAR GE THE STAMP DUTY ON THE BASIS OF ACTUAL CONSIDERATION CIRCLE RAT E ARE THE MINIMUM RATE ON WHICH STAMP DUTY HAS TO BE PAID EVEN IF THE CONSIDERATION IS LESS. IN CASE CONSIDERATION IS HIGHE R, THE HIGHER STAMP DUTY IS PAYABLE & HE IS VERY MUCH CONCERNED W ITH THE CONSIDERATION . THE SECOND OBJECTION OF THE A.O IS IN PARA 2.6.2 ( O F THE ASSESSMENT ORDER) THAT A BARE READING OF THE PROVIS ION AS CONTAINED IN SECTION 50C OF THE I.T. ACT CLEARLY SHOW S THAT THESE PROVISIONS ARE APPLICABLE FOR THE PURPOSE OF DETERMIN ATION OF THE CAPITAL GAIN U/S 48 OF THE INCOME TAX ACT AND NOT FO R THE PURPOSE OF DETERMINING THE UNDISCLOSED INVESTMENTS IN PROPERT Y IS NOT CORRECT. SEC. 50C REFERENCE TO FULL VALUE OF CONSID ERATION RECEIVED WHICH HAVE BEEN SUBSTITUTED FOR MARKET VALUE WHICH WAS EXISTING EARLIER. THE VALUE ADOPTED, FOR SEC. 50C WHICH IS FUL L VALUE OF CONSIDERATION HAS RELEVANCE HERE. REGARDING PURCHASE OF LAND FROM OTHER CO-OWNER WHO P URCHASED LAND ALONGWITH THE APPELLANT IN 2006 NAMELY IQBAL SIN GH, INDERJIT SINGH, SARBJIT SINGH. MS. RUPINDER KAUR & MR. GURVIN DER KAUR & MS. SATINDER KAUR BY SH. ROOP SACHDEVA & SH. ASHOK T IWARI AT THE SAME COST AT WHICH THEY PURCHASE & NOT WITH REF ERENCE TO PRICE MENTIONED IN THE ORIGINAL AGREEMENT. THE A.O S UBMISSION THAT ; 'IN THIS CONNECTION, IT IS STATED THAT THE REASONS FO R EXECUTING THE DEEDS OF SUCH PROPERTY AT THE SAME RATE OF ITS PURCH ASE ARE BEST KNOWN TO THOSE CO-OWNERS PARTICULARITY WHEN THE PROS PECTIVE BUYERS WERE READY TO PURCHASE IT AT HIGHER RATE. APP ARENTLY IT APPEARS THAT THE AVOIDANCE OF CAPITAL GAIN TAX ARISING OUT OF THE SAME OF SAID PROPERTY, IN CASE THE SALE DEED HAD BEE N EXECUTED AT A HIGHER RATE BE CAUSE OR REASON FOR EXECUTION OF S ALE DEED AT THE SAME PRICE AT WHICH IT WAS PURCHASED.' 10 IT MAT BE SUBMITTED THERE IS NO, FACT THAT PURCHASER S WERE READY TO BUY AT A HIGHER RATE. NO SUCH FACT WAS CONFRONTED B Y A.O DURING ASSESSMENT PROCEEDINGS. CAPITAL GAINS TAX IS ONLY A SM ALL PART OF THE TOTAL CONSIDERATION. FOR THAT AMOUNT WHO WILL FO RGO THE TOTAL AMOUNT WHEN HE CAN FETCH HIGHER PRICE. IT MAY BE PO INTED OUT THE I.T. CASES OF PURCHASERS HAVE BEEN ASSESSED BY THE SA ME A.O IN SCRUTINY AFTER SEARCH & NO ALLEGATION HAS BEEN MADE T HAT CONSIDERATION AT MUCH HIGHER FIGURE HAS BEEN PASSED BY THEM. FURTHER THE REPORT OF VIGILANCE CELL HAS NO RELEVAN CE & THE SAME IS HIGHLY EXAGGERATED & HAS NOT BEEN RELIED UPON BY A. O HIMSELF. FURTHER A.O HAVE RELIED UPON THE STATEMENT OF SH. R AVI SHARMA THAT HE STATED THAT REGISTRATION ARE BEEN DONE BY M. R. JAIDKA AND FAMILY BELOW THE MARKET PRICE IS TOTALLY WRONG IN VIEW THE FOLLOWING FACTS. IN THE LAST SIX YEARS LAND PURCHASED BY THE FAMILY AND STATEMENT GIVEN BY THE SH. RAVI SHARMA COMPARATIVE CHART IS PRODUCED BELOW: AS PER STATEMENT ACTUAL STATUS DATE AMOUNT DATE AMOUNT BUILDING OPP. PWD 150 SQ YARDS SNEH LATA & VEENA JAIDKA 1985 1 LAC 90,000 ADJACENT TO ABOVE 250 SQ. YARDS SNEH LATA & VEENA JAIDKA 2002-03 5.5 LAC 30.03.2006 5,46,250 AGRICULTURAL LAND ALOUR SNEH LAT A & PUNEET JAIDKA 2005-016 23.24 LAC 03.08.2006 23,00,000 THE ONLY RELIANCE OF THE AO THAT AN AGREEMENT EXIST FOR THE SAME PROPERTY WHICH IS DEFECTIVE IN ITSELF & FURTHER THE P URCHASER MENTIONED IN THE SAID DOCUMENT PURCHASES THE SAME PRO PERTY FROM CO-OWNERS AT RATE AT WHICH THOSE CO-OWNERS ACTUALLY PURCHASED WHICH IS MUCH LESS THAN THE AGREEMENT WHICH PROVES T HAT THE AGREEMENT IS FALSE. 11 THERE ARE SELLER, PURCHASER & TEHSILDAR WHEN THE TR ANSACTION HAS TAKEN PLACE. THE A.O HAS NEVER POINTED OUT THAT SEL LER HAVE ADMITTED THE RECEIPT ANY MANY OR ANY MONEY HAS ACTUALLY PASS ED TO THEN. NONE OF THEIR STATEMENT HAS BEEN CONFRONTED WHICH IM PLIES THAT THEY HAVE CONFIRMED THAT ACTUAL AMOUNT AS PER REGD. DEED HAS BEEN RECEIVED. WITHOUT PREJUDICE & WITHOUT ADMITTING EVEN IF THE CONS IDERATION MENTIONED IN THE AGREEMENT TO SELL AS MENTIONED ABOVE IS THE MARKET VALUE EVEN THAN WHEREAS BY ANY COGENT EVIDENC E UNLESS IT IS PROVED THAT ADDITIONAL CONSIDERATION HAS BEEN GIVE N BY THE PURCHASER NO ADDITION IS CALLED FOR. WE DRAW YOUR KIND ATTENTION TO SECTION 69B OF THE I. T. ACT WHICH IS REPRODUCED AS UNDER: 'WHERE IN THE F.Y IMMEDIATELY PROCEEDING THE ASSESSME NT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT REC ORDED IN THE BOOKS OF ACCOUNTS, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT T HE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION, TH E VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE INCOME OF THE ASSESS EE OF SUCH FINANCIAL YEAR.' THE BURDEN IS ON THE- REVENUE TO PROVE THAT REAL INV ESTMENT EXCEEDED THE INVESTMENT SHOWN IN ACCOUNT BOOKS OF TH E ASSESSEE.' 5. THE CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND RELYING UPON THE AGREEMENT TO SELL DATED 14.05.2005 CONSIDERED AS INCRIMINATING EVIDENCE AGAINST THE ASSESSEE, CONFIR MED THE ADDITION. THE FINDINGS OF LD. CIT(APPEALS) IN PARAS 4 TO 6 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE RIVAL VIEWS ON ADDITION MADE ON ACCOUNT OF PURCHASE OF PROPERTY. THE SEQUENCE OF EVENTS HAVE TO BE APPRECIATED AS THEY HA PPENED IN ORDER TO UNDERSTAND WHETHER THERE WERE ANY CONSTRAIN ING FACTORS THAT COULD HAVE LED TO A SHARP DEPRECIATION IN THE M ARKET VALUE OF IMPUGNED PROPERTY. IT IS A MATTER OF FACT THAT AN AG REEMENT TO SELL 12 WAS ENTERED INTO BY THE VALID POWER OF ATTORNEY HOLD ERS OF SH. MOHINDER SINGH AND SH. GURDEEP SINGH AS WELL AS OF SURIRIDER KAUR WITH THE BUYERS I.E. MR. ROOP SACHDEVA AND MR. ASHOK TIWARI ON 14/5/2005. THE PROPERTY WAS AGREED TO BE S OLD FOR 3.8 CRORES FOR WHICH AN ADVANCE OF RS. 60 LACS IN CASH HAD PASSED ON FROM THE BUYER TO THE SELLER (POWER OF ATTORNEY HOLDERS). THE TRANSACTION OF SALE WAS TO BE COMPLETED BY 31 ST 3ANUARY 2006, HOWEVER L/7 TH SHARE HOLDER OF THE PROPERTY I.E. MRS. MOHINDER KA UR SOLD THE FRONT PORTION OF THE PROPERTY BY SALE DEED DATED 1/9/2005 FOR A TOTAL CONSIDERATION OF RS. 28,20,000/ -. IT NEEDS TO BE KEPT IN MIND THAT MOHINDER KAUR WAS NOT PARTY TO THE ORIGINAL AGREEMENT TO SELL THE PROPERTY AND THE SAME WAS ENT ERED INTO BY CO-OWNERS HAVING ONLY 6/7 TH SHARE OF TOTAL PROPERTY. IN THE CIRCUMSTANCES THE SELLERS HAVING 6/7 TH SHARE OF THE PROPERTY, WHO HAD ENTERED INTO AN AGREEMENT WITH MR. ROOP SACHDEV A AND MR. ASHOK TIWARI DATED 14/5/2005, DID NOT COMPLETE; THE TRANSACTION AS AGREED AND THE BUYERS MOVED THE CIVIL COURT BY S UIT NO. 196 DATED 11/5/2006 IN ORDER TO FORCE THE SELLERS TO REG ISTER THE PROPERTY IN THEIR FAVOUR AS AGREED. DURING THE PENDEN CY OF CIVIL SUIT THE CO-OWNERS HAVING 6/7 TH SHARE OF THE PROPERTY CANCELLED THE POWER OF ATTORNEYS GIVEN EARLIER AND SOLD THE P ROPERTY VIDE REGISTRATION DEEDS DATED 28/8/2006 FOR AN AMOUNT OF RS. 80 LACS TO A GROUP OF 14 BUYERS INCLUDING THE ASSESSEE. IT T HEREFORE SEEMS THAT THERE WAS SOME AMOUNT OF MISREPRESENTATION ON TH E PART OF 6/7 TH OWNERS OF PROPERTY WHILE ENTERING INTO AGREEMENT WI TH ASHOK TIWARI AND ROOP SACHDEVA SO MUCH SO THAT THEY REPRESENTED AS FULL OWNERS OF PROPERTY. IT IS HOWEVE R NOT CLEAR AS TO WHY THE 6/7 TH OWNERS OF PROPERTY CHOOSE TO SELL AT A PRICE OF RS. 80 LAKH ESPECIALLY WHEN THERE WAS A BUYER FOR A PRIC E OF RS. 3.80 CRS. AND HE HAD FILED CIVIL SUIT TO GET THE DEAL CON SUMMATED AT RS. 3.80 CRS. THE AR OF THE APPELLANT HAS NOT BEEN ABLE TO BRING ON RECORD ANY CONVINCING EXPLANATION AS TO WHY A MUCH HIGHER PRICE FOR THE PROPERTY WAS IGNORED. THE AR HAS ONLY SUBMI TTED THAT THE EARLIER AGREEMENT COULD NOT BE EXECUTED FOR WANT OF CLEAR TITLE OF THE SELLERS AND THE LITIGATION AMONGST THE PARTIES. TH E EXPLANATION GIVEN IS NOT LOGICALLY ACCEPTABLE AS THERE IS NO FL AW IN THE TITLE OF THE OWNERS WITH REFERENCE TO 6/7 TH SHARE OF THE PROPERTY AND THE 13 DISPUTE IN QUESTION IS ONLY TO ENFORCE THE SAID AGREEME NT IN THE FORM OF TRANSFERRING THE PROPERTY FOR THE STATED SA LE CONSIDERATION OF RS. 3.8 CRORES. IT IS HOWEVER REASONABLE TO EXPEC T THAT 6/7 TH SHARE WOULD BE FETCHING LESSER PRICE AS RS. 3.8 CRO RE WAS THE SALE CONSIDERATION FOR ENTIRE PROPERTY. THE ISSUE TO BE DE CIDED HERE IS THAT WHETHER THE AGREEMENT TO SELL EVIDENCING THE S ALE CONSIDERATION AT THE 3.8 CRORES BACKED BY A CIVIL SUIT FILED BY THE BUYERS TO GET THE AGREEMENT EXECUTED ACCORDING TO T HE GIVEN TERMS AND CONDITIONS CAN BE TAKEN AS AN EVIDENCE OF THE ACT UAL CONSIDERATION AT RS. 3.8 CRORES AS AGAINST THE REGI STERED PRICE OF RS. 80 LACS. 5. SINCE THE CASE UNDER CONSIDERATION PERTAINS TO TAX ABILITY OF AMOUNT RECEIVED BY THE ASSESSEE ON ACCOUNT OF SALE OF CAPITAL ASSET BEING LAND AND BUILDING, THE PROVISIONS OF SEC TION 48 NEED TO BE APPRECIATED TO UNDERSTAND AS TO WHAT WOULD BE THE FULL VALUE OF SALE CONSIDERATION IN THE FACTS OF THE CASE. THE HON' BLE APEX COURT IN THE CASE OF CIT VS. GEORGE HANDERSON & COMPANY LI MITED 66 ITR 622 HAS OBSERVED THAT FULL VALUE OF CONSIDERATIO N FOR WHICH THE SALE, EXCHANGE OR TRANSFER OF THE CAPITAL ASSET IS MADE APPEARING IN SECTION 12B OF INDIAN INCOME TAX ACT, 1922 (CORRESP ONDING TO THE PRESENT SECTION 48 OF THE INCOME TAX ACT, 1961), DOES NOT MEAN THE MARKET VALUE OF THE ASSET TRANSFERRED BUT THE PRICE BARGAINED FOR BY THE PARTIES TO THE SALE, ETC. THE CO NSIDERATION FOR THE TRANSFER OF THE CAPITAL ASSET IS WHAT THE TRANSF EROR RECEIVES IN LIEU OF THE ASSET HE PARTS WITH, VIZ., MONEY OR MONE Y'S WORTH. THE EXPRESSION 'FULL CONSIDERATION' IN THE MAIN PART OF S ECTION 12B(2) CAN NOT BE CONSTRUED AS HAVING A REFERENCE TO THE M ARKET VALUE OF THE ASSET TRANSFERRED. THE HON'BLE MADRAS HIGH COUR T IN THE CASE OF CIT VS. P. SURYANARAINA 88 ITR 321 HELD THAT THE FULL VALUE OF CONSIDERATION IN THE SAID SECTION MEANT ONLY THE ACTUAL VALUE RECEIVED BY THE ASSESSEE. HOWEVER THE MARKET VALUE MAY ALSO BE TAKEN IN PLACE OF FULL VALUE OF CONSIDERATION ONLY I N THE EVENT OF THE CONSIDERATION AS PER REGISTERED DOCUMENT BEING LESS THAN THE VALUE FIXED BY REVENUE AUTHORITIES FOR THE PURPOSE OF COLLECTION OF STAMP DUTY. IT MEANS THAT THE FULL VALUE OF CONSIDER ATION AS EVIDENCED BY THE REGISTERED DOCUMENT CAN BE SUBSTITU TED FOR THE 14 VALUE MEANT FOR THE PURPOSES OF STAMP DUTY AS PER S ECTION 50C. THIS SECTION HAS BEEN INTRODUCED BY FINANCE ACT 2002 W.E.F. 1.4.2003 AND HAS BEEN TITLED 'SPECIAL PROVISION FOR F ULL VALUE OF CONSIDERATION IN CERTAIN CASES' WHICH MEANS THAT THE F ULL VALUE OF CONSIDERATION CAN BE SUBSTITUTED ONLY IF THE CONDITION S AS STIPULATED IN THE PROVISIONS OF SECTION 50C ARE FULF ILLED. APART FROM THE PROVISIONS OF SECTION 50C, THE .SALE CONSIDERAT ION AS REFLECTED IN THE REGISTERED DOCUMENT CAN BE SUBSTITUTED BY A H IGHER FIGURE IF THERE IS EVIDENCE ON RECORD TO SUGGEST THAT AMOUNT OVER AND ABOVE THE ONE RECORDED IN THE REGISTERED DOCUMENTS HAD PA SSED ON FROM THE BUYER TO THE SELLER. THIS VIEW HAS BEEN UPHELD BY THE JURISDICTIONAL TRIBUNAL AT AMRITSAR IN THE CASE OF INDE RPAL SINGH AHUJA VS. ACIT 103 TD 271. THE HON'BLE BENCH HAS HELD:- 'AS PER PROVISION OF SECTION 48, THE CAPITAL GAINS IS REQUIRED TO BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CO NSIDERATION RECEIVED OR ACCRUED AS A RESULT OF TRANSFER OF THE CAPITAL ASSET THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNE CTION WITH SUCH TRANSFER AND THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO. THE SECTION DOES NOT SHOW THAT ONLY CONSIDERATION SHOWN IN SALE DEED IS TO BE REGARDED A S THE FULL VALUE OF THE CONSIDERATION RECEIVED. THERE IS NOTHING IN TH E SECTION, WHICH PRECLUDED THE AO FROM SUBSTITUTING THE ACTUAL SALE CONSIDERATION FOR THE SALE CONSIDERATION SHOWN IN THE SALE DEEDS, IF T HERE IS EVIDENCE TO SHOW THAT THE ASSESSEE HAD INDEED RECEIVED HIGHE R AMOUNT. THUS, THE CONTENTION OF THE COUNSEL FOR THE ASSESSEE THAT THE AO IS NOT EMPOWERED TO SUBSTITUTE THE CONSIDERATION FOR THE SALE CONSIDERATION SHOWN IN THE SALE DEEDS IS WITHOUT ANY SUBSTANCE. IF THIS CASE THE CASE, THERE WAS NO NEED FOR THE LEGIS LATURE TO CONFER POWERS ON THE AO UNDER SECTION 55A FOR MAKING A REFE RENCE TO VALUATION OFFICER WITH A VIEW TO ASCERTAIN THE FAIR MA RKET VALUE OF CAPITAL ASSET FOR THE PURPOSE OF COMPUTATION OF INCO ME FROM CAPITAL GAINS PROVIDED UNDER CHAPTER IV. IF THE AO CANNOT AS CERTAIN CONSIDERATION AND SUBSTITUTE THE SAME WITH THE ONE S HOWN IN THE SALE DEED FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS THEN THE WHOLE EXERCISE OF REFERRING THE PROPERTY TO VALUATI ON CELL WOULD HAVE BEEN FUTILE.............. 15 .................... AS REGARDS THE CONTENTION OF THE C OUNSEL THAT HAD THERE BEEN UNDERVALUATION OF SALE CONSIDERATION IN THE SAL E DEEDS, THE REVENUE AUTHORITIES OF THE STATE GOVERNMENT WOULD HAV E NOT REGISTERED THE SALE DEEDS, IT IS MENTIONED THAT SALE R ATES FIXED BY THE STATE GOVERNMENT ARE ONLY INDICATIVE OF THE RATE S BUT ARE NOT DECISIVE OR CONCLUSIVE OF THE MARKET RATES. IT IS COMM ON KNOWLEDGE THAT DUE TO VARIOUS REASONS AND ALSO THE PROCEDURAL REQUIREMENT THE RATES ARE NOT REVISED IMMEDIATELY AS SOON AS THESE GO UP. THE RATES FIXED BY THE STATE REVENUE AUTHORITIES FOR THE PURPO SE OF STAMP DUTY ARE NOT CONCLUSIVE ABOUT THE MARKET RATES OF THE PR OPERTY. THE SAME DEPENDS ON SEVERAL OTHER FACTORS. THEREFORE, THIS P LEA IS ALSO OF NO HELP TO ASSESSEE 6. THE JUDGEMENT OF HON'BLE ITAT AMRITSAR BENCH CITED SUPRA SPELLS OUT THE CIRCUMSTANCES IN WHICH FULL VALUE OF SALE CONSIDERATION CAN BE TAKEN TO BE A FIGURE OTHER THAN REGISTERED PRICE. IT NEEDS TO BE SEEN WHETHER THE DEAL FOR TRANSFER O F IMPUGNED LAND WAS NEGOTIATED AT A PRICE RECORDED IN THE REGISTERE D DOCUMENT OR HIGHER AMOUNT AS EVIDENCED BY CIRCUMSTANTIAL EVIDENCE . IT IS SETTLED LAW THAT WHILE DECIDING THE MATTERS INCOME TAX AUTHOR ITIES CAN TAKE INTO ACCOUNT THE CIRCUMSTANTIAL EVIDENCE AND ALSO AP PLY THE TEST OF HUMAN PROBABILITIES. IN THE CASE OF CIT VS. DURGA PRASAD 82, ITR 540 (SC), THE HON'BLE APEX COURT HAS HELD THAT THOUGH AN APPARENT STATEME NT MUST BE CONSIDERED REAL UNTIL IT WAS SHOWN THAT THERE WERE RE ASONS TO BELIEVE THAT APPARENT WAS NOT REAL, IN A CASE WHERE PARTY RELIED ON SELF SERVING RECITALS IN DOCUMENTS, IT WAS FOR THE PA RTY TO ESTABLISH THE TRUTH OF, THOSE RECITALS. THE TAXING AUTHORITIES W ERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF SUCH RECITALS. IN THE CASE OF SUMATI DAYAL VS. CIT, THE HON'BLE APEX COURT OBSERVED THAT THE IT AUTHORITIES COULD CONSID ER THE SURROUNDING CIRCUMSTANCES AND APPLY THE TEST OF HUM AN PROBABILITY WHILE DECIDING THE ISSUES BEFORE THEM. IN TH E CASE OF HIRA LAL RAM DAYAL, THE HON'BLE PUNJAB AND HARYANA HIGH COURT OBSERVED THAT IF AN ASSESSEE, EVEN IN THE FACE OF R EGISTERED SALE 16 DEED, IS ABLE TO PROVE BY COGENT EVIDENCE AND SATIS FY THE TRIBUNAL THAT NO SALE TOOK PLACE, THE TRIBUNAL HAS TO COME T O THE CONCLUSION THAT NO SALE TOOK PLACE. IT WAS HELD THAT THAT THE R EGISTERED SALE DEED EXECUTED BY THE ASSESSES TO SELL THE PROPERTY WAS NOT CONCLUSIVE THAT SALE HAD ACTUALLY TAKEN PLACE. THE HIGH COURT FURTHER OBSERVED THAT PEOPLE, WHO WANT TO AVOID PAY MENT OF TAX, SELL THE PROPERTY BY GETTING THE SALE DEEDS EXECUTED AT UNDERSTATED VALUE. IF IT WAS HELD THAT SALE DEED WAS FINAL, THE IT AUTHORITIES WOULD BE BARRED FROM FINDING HOW MUCH SALE CONSIDER ATION PASSED UNDER THE TRANSACTION. THE FACTUM OF SALE AND SALE PROCEEDS ARE REAL QUESTIONS TO BE DETERMINED BY IT AUTHORITIES. TH E PERUSAL OF ABOVE DETAILED JUDGEMENTS SHOWS THAT MERE FACT THAT THE ASSESSEE HAD EXECUTED THE SALE DEEDS AT A PARTICULAR PRICE IS NOT CONCLUSIVE IN DECIDING THE FULL VALUE OF ACTUAL PURCHASE CO NSIDERATION PAID. IN THIS CASE DIRECT EVIDENCE IN THE FO RM OF A VALIDLY EXECUTED AND ACTED UPON AGREEMENT TO SELL IS ON REC ORD WHEREBY PRICE OF THE PROPERTY HAS BEEN SETTLED AT RS. 3.80 CR AND THE BUYER HAS GIVEN STATEMENT ON OATH BEFORE THE CIVIL COURT THAT HE IS READY WITH THE REQUISITE BALANCE PAYMENT TO GET THE SALE D EED REGISTERED. IN THIS SITUATION THERE HAVE NOT BEEN ANY MITIGATING CIRCU MSTANCES FOR SELLER TO SELL THE PROPERTY AT SUBSTANTIALLY LOW ER PRICE OF RS 80 LAKH. THE ONLY LOGICAL CONCLUSION THAT CAN BE DRAWN FROM GIVEN CIRCUMSTANCES IS THAT ASSESSEE ACTUALLY PAID PRICE FO R THE PROPERTY WHICH WAS HIGHER THAN RS 3.80 CR AND THEREFORE PURCHA SED THE IMPUGNED PROPERTY FROM THE SELLERS, THOUGH THE REGI STERED DOCUMENT REFLECTED VERY LOW CONSIDERATION OF RS 80 L AKH. I THINK THE REVENUE HAS DISCHARGED THE BURDEN CAST UPON IT T O PROVE THE ACTUAL CONSIDERATION AT RS. 3.80 CRS AT LEAST, IF NO T HIGHER. IN VIEW OF THE ABOVE THE ADDITION MADE BY THE AO IS CONFIRME D. 6. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH PARTIE S. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO THE AGREEMENT TO SELL DATED 14.05.2005 (PB- 264) 17 BETWEEN THE 6/7 TH OWNERS AND SHRI ROOP SACHDEVA AND SHRI ASHOK TIWARI. HE HAS SUBMITTED THAT ASSESSEE IS NOT PARTY TO THE AGREEMENT TO SELL AND THIS AGREEME NT TO SELL WAS NEVER ACTED UPON BETWEEN THE PARTIES, THER EFORE, NO LIABILITY COULD BE ATTACHED TO THE ASSESSEE ON T HE BASIS OF THE AGREEMENT TO SELL IN QUESTION. THE AS SESSEE PURCHASED HIS 18% SHARE VIDE REGISTERED SALE DEED D ATED 28.08.2006 FOR A CONSIDERATION OF RS. 13,20,300/-. NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAI NST THE ASSESSEE. THE THIRD PARTY AGREEMENT IS NOT BIN DING ON THE ASSESSEE. ULTIMATELY, THE ASSESSEE SURRENDE RED THE RIGHT IN THE PROPERTY AND MADE A STATEMENT BEFO RE CIVIL COURT, COPY OF WHICH IS FILED AT PAGE 167 AND 168 OF THE PAPER BOOK. HE HAS SUBMITTED THAT ASSESSEE SURRENDERED THE RIGHT IN THIS PROPERTY AT THE PURCH ASE PRICE ONLY. THE ASSESSEE NEVER SIGNED ANY CHEQUE I N QUESTION AND NO CHEQUE WAS FOUND FROM HIS POSSESSIO N. THE ASSESSING OFFICER NEVER CONFRONTED ANY SUCH MAT ERIAL TO THE ASSESSEE. THE CHEQUE IN QUESTION WAS NEVER ENCASHED, THEREFORE, IT IS NO MORE RELEVANT. THERE WAS NO EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER THAT ANY AMOUNT PASSED ON FROM ASSESSEE TO THE SELLER OVER A ND ABOVE WHAT IS RECORDED IN THE REGISTERED SALE DEED. THE SALE DEED WAS REGISTERED AS PER CIRCLE RATE. SINCE IT WAS A DISPUTED PROPERTY, THEREFORE, NO ADVERSE INFERENC E SHOULD BE DRAWN AGAINST THE ASSESSEE. 18 6(I) HE HAS RELIED UPON DECISION OF THE GUJRAT HIGH COURT IN THE CASE OF CIT VS FAIR DEAL TEXTILE PARK P.LTD. 362 ITR 497 IN WHICH IT WAS HELD THAT WHERE THERE WAS NO REFERENCE TO VALUATION OFFICER TO POINT OUT THAT THE VALUE OF THE LAND WAS BELOW THE MARKET PRICE, THE A DDITION MADE UNDER SECTION 69B WAS NOT JUSTIFIED. HE HAS FURTHER SUBMITTED THAT OWNERS OF THE PROPERTY HAVE NOT MADE ANY STATEMENT OR ALLEGATION AGAINST ASSESSEE O F RECEIVING ANY AMOUNT MORE THAN WHAT IS RECORDED IN THE SALE DEED. 6(II) IN THE CASE OF OTHER ASSESSEE DR. AMARJIT KAU R, IT IS STATED THAT SHE IS SELLER OF THE SAME PROPERTY AND IN HER CASE, REPORT OF DVO WAS ALSO CALLED WHO VALUED THE PROPERTY AT LESSER RATE OF RS. 1.43 CRORES WHICH WA S NOT RELIED UPON BY THE AUTHORITIES BELOW. THE AGREEMENT IN THIS CASE WAS CANCELLED BEFORE CIVIL COURT. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED UPON DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF K.P.VARGHESE 1 31 ITR 597 AND DECISION OF THE HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF PARAMJIT SINGH 323 ITR 58 8. 7. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT STATEMENT OF B ROKER SHRI RAVI SHARMA, STAMP VENDOR WAS RECORDED WHICH I S REFERRED TO IN THE ASSESSMENT ORDER IN WHICH HE HAS CONFIRMED THAT ALL THESE RATES ARE MARKET PRICE FO R WHICH REGISTRY COST WAS MUCH LESSER THAN THAT. THE INTER NAL 19 VIGILANCE CELL HAVE GIVEN THE VALUE OF PROPERTY AT HIGHER RATE. THE PURCHASERS HAD GONE TO SUB REGISTRAR TO GET THE SALE DEED REGISTERED, WOULD CLEARLY INDICATE TH AT VALUE AS PER AGREEMENT WAS CORRECT. THE PROVISIONS OF SECTION 50C OF THE ACT COVER LOWER RATES IF THE SAM E ARE NOT AS PER CIRCLE RATE. THE AGREEMENT AND STATEMEN T BEFORE CIVIL COURT ARE ENOUGH TO SUSTAIN THE ADDITI ON. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE AUTHORITIES BELOW HAVE HEAVILY RELIED UPON THE AGRE EMENT TO SELL DATED 14.05.2005 IN WHICH THE SALE CONSIDER ATION OF THE PROPERTY IS ALLEGED TO HAVE BEEN MENTIONED A T RS. 3.08 CRORES. IT IS ADMITTED FACT THAT THIS AGREEMEN T TO SELL IS NOT SIGNED BY THE ASSESSEE AND HE WAS NOT P ARTY TO THE SAME. HOW IT IS ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE IS NOT AT ALL EXPLAINED. THIS AGREEMENT T O SELL WAS ALSO NOT FOUND FROM THE POSSESSION OF THE ASSES SEE. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V KULWA NT RAI 291 ITR 36 HELD THAT ADMITTEDLY THE ASSESSEE HAD NOT SIGNED THE AGREEMENT IN QUESTION AND SINCE HE H AD NOT SIGNED THE AGREEMENT, NO LIABILITY COULD BE ATTRIBU TED QUA THAT AGREEMENT TOWARDS HIM. SINCE HE WAS NOT A PAR TY TO THE AGREEMENT TILL HE HAD SIGNED THE AGREEMENT. NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH AGAI NST THE ASSESSEE, THEREFORE, THIRD PARTY AGREEMENT TO S ELL WILL NOT BE BINDING ON THE ASSESSEE. THE ALLEGED AGREEM ENT TO SELL DATED 14.05.2005 WAS EXECUTED THROUGH THE POWE R OF ATTORNEY HOLDERS AND DURING THE PENDENCY OF CIVIL S UIT, 20 THE POWER OF ATTORNEY WAS CANCELLED MEANING THEREBY OWNERS DID NOT AGREE TO AGREEMENT TO SELL. THE OWN ERS OF THE PROPERTY DIRECTLY EXECUTED SALE DEED DATED 28.08.2006 IN FAVOUR OF THE ASSESSEE AND OTHERS. T HE SHARE OF THE ASSESSEE WAS 18% ONLY. SINCE DISPUTE ARISE BETWEEN THE PARTIES IN THE CIVIL COURT THEREFORE, T HE ASSESSEE SURRENDERED HIS SHARE IN THE COURT AT THE PURCHASE VALUE MUCH BEFORE THE SEARCH & SEIZURE OPERATION. THE LD. COUNSEL FOR THE ASSESSEE REFERR ED TO THE STATEMENT OF THE ASSESSEE AND DECREE ORDERED BY THE CIVIL COURT TO SHOW THAT ASSESSEE HAS SURRENDERED H IS SHARE IN PURCHASED PROPERTY AT THE SAME RATE AT WHI CH IT WAS PURCHASED BY THE ASSESSEE. THIS ITSELF PROVED THAT NO ON MONEY PAID BY ASSESSEE AS AGAINST SALE CONSIDERATION RECORDED IN SALE DEED. THE AUTHORITIE S BELOW HAVE RELIED UPON AGREEMENT TO SELL BETWEEN SH RI ROOP SACHDEVA AND SHRI ASHOK TIWARI (BUYERS) AND TH REE CO-OWNERS AND ONE CO-OWNER THROUGH POWER OF ATTORNE Y ONLY, WHO HAVE ONLY 6/7 TH SHARE IN PROPERTY IN REFERENCE. UNLESS ALL THE CO-OWNERS HAVE SIGNED THE AGREEMENT, IT IS NOT EXPLAINED AS TO HOW THE AGREEMENT TO SELL WAS V ALID WITHOUT IT BEING SIGNED BY ALL THE CO-OWNERS OF THE PROPERTY AND WITHOUT ASCERTAINING THEIR PORTION IN PROPERTY. SINCE THE SHARES OF VARIOUS CO-OWNERS IN THE PROPERTY WERE NOT ASCERTAINABLE THEREFORE, THERE WA S NO QUESTION OF SOME OF THE CO-OWNERS ENTERING INTO AGREEMENT TO SELL TO SELL THE PROPERTY. 21 9. THE ASSESSING OFFICER RELIED UPON SOME CHEQUE FOUND FROM THE RESIDENCE OF DR. AMARJIT KAUR ISSUED BY DR. RAVINDER PAL SINGH. THIS DOCUMENT WAS NEVER FO UND FROM POSSESSION OF THE ASSESSEE AND NOT SIGNED BY ASSESSEE. THIS CHEQUE WAS NEVER CONFRONTED TO THE ASSESSEE AND UNDER THE NEGOTIABLE INSTRUMENT ACT, W HEN THE SAID CHEQUE WAS NEVER ENCASHED, IT WOULD LOOSE ITS VALIDITY AFTER EXPIRY OF CERTAIN PERIOD. THEREFORE, RECOVERING OF UNCASHED CHEQUE WOULD HAVE NO RELEVAN CE TO THE MATTER IN ISSUE. NO MATERIAL OR EVIDENCE HA S BEEN BROUGHT ON RECORD THAT ASSESSEE HAS PAID ANY AMOUNT OVER AND ABOVE WHAT IS RECORDED IN THE REGISTERED S ALE DEED. THE ASSESSEE PURCHASED THE PROPERTY DIRECTLY FROM THE OWNERS AND THEY HAVE NOT MADE ANY STATEMENT AGAINST THE ASSESSEE FOR RECEIVING ANY AMOUNT OVER AND ABOVE THE AMOUNT MENTIONED IN THE REGISTERED SALE D EED. IT IS ALSO NOT IN DISPUTE THAT SALE DEED WAS REGIST ERED AS PER CIRCLE RATE. HON'BLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF PARAMJIT SINGH VS ITO 323 ITR 588 HELD AS UNDER: IT IS A WELL KNOWN PRINCIPLE THAT NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUMENTS CONTAIN ALL THE TE RMS AND CONDITIONS. SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872 INCORPORATE THE PRINCIPLE. THE TRIBUNAL HELD THAT THE OSTENSIBLE SALE CONSIDER ATION OF THE LAND DISCLOSED IN THE REGISTERED SALE DEED D ATED SEPTEMBER 24, 2002 ADDED TO THE INCOME OF THE ASSESSEE. THE TRIBUNAL DISREGARDED THE STATEMENT MADE ON AFFIDAVIT BY THE VENDORS WHO WERE THE UNCLE S 22 OF THE ASSESSEE. THEY HAD STATED THAT NO SALE CONSIDERATION HAD PASSED HANDS AND THEY HAD RELINQUISHED THEIR SHARE IN THE LANDED PROPERTY. TH E OBJECT OF EXECUTING THE SALE DEED WAS ONLY TO HAND OVER LANDED PROPERTY TO THE ASSESSEE. ON APPEAL TO THE H IGH COURT : HELD, DISMISSING THE APPEAL, THAT THE OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED DATED SEPTEMBER 24, 2002, HAD TO BE ACCEPTED AND IT COULD NOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE. THEREFORE, THE ORDER OF THE TRIBUNAL DID NOT SUFFER FROM ANY LEGAL INFIRMITY. THE AMOUNT SHOWN IN THE REGIST ERED SALE DEED WAS RECEIVED BY THE VENDORS AND DESERVED TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE. 10. HON'BLE SUPREME COURT IN THE CASE OF K.P.VARGHE SE V ITO 131 ITR 597 HELD THAT CAPITAL GAINS UNDERSTATEMENT DIFFERENCE BETWEEN MARKET VALUE AN D CONSIDERATION DECLARED NOT SUFFICIENT. ASSESSEE MU ST BE SHOWN TO HAVE RECEIVED MORE THAN WHAT IS DECLARED O R DISCLOSED BY HIM AS CONSIDERATION. BURDEN OF PROOF ON THE REVENUE. 11. THE ASSESSEE EXPLAINED THAT WHY THE BUYERS HAVE AGREED FOR MUCH HIGHER RATE AS PER AGREEMENT, WHEN MARKET PRICE WAS KNOWN TO THEM. THERE MAY BE SO MA NY REASONS FOR ALLEGED DEAL BUT ASSESSEE IS NOT ANSWER ABLE, THEREFORE, ASSESSING OFFICER SHOULD HAVE MADE THORO UGH INQUIRY ON THIS ASPECT OF THE MATTER. THE ASSESSEE ALSO EXPLAINED THAT BUYER MENTIONED IN THE AGREEMENT TO SELL 23 HAVE PURCHASED 36% OF THE SHARES OF OTHER CO-OWNERS AT A LESSER PRICE AFTER 16 MONTHS FROM THE PURCHASE BY T HE SAID SELLER. THIS EXPLANATION OF THE ASSESSEE HAS NOT BEEN REBUTTED BY THE AUTHORITIES BELOW. FURTHER, T HIS INTERNAL VIGILANCE CELL OF PUNJAB GIVING REPORT OF VALUATION OF THE PROPERTY HAS NO RELEVANCE BECAUSE IT WAS NOT BASED UPON FACTS OF THE CASE AND ALSO NOT RELIE D UPON BY ASSESSING OFFICER. FURTHER, WHEN IN THE CASE OF DR. AMARJIT KAUR, MATTER WAS REFERRED TO DVO AND FOR A VALUE OF PROPERTY WHO HAS VALUED PROPERTY AT LESSER PRICE AT RS. 1.43 CR, THERE WAS NO REASON FOR THE AUTHORITIES BE LOW TO TAKE A HIGHER VALUE AS PER AGREEMENT TO SELL. 12. THE ASSESSING OFFICER RELIED UPON STATEMENT OF SHRI RAVI SHARMA TO GIVE MARKET VALUE BUT THE ASSESSEE H AS GIVEN CERTAIN INSTANCES TO SHOW THAT IN THE LAST MA NY YEARS, LAND PURCHASED BY THE FAMILY AND STATEMENT G IVEN BY SHRI RAVI SHARMA HAS DIFFERENT VALUATION. THE ASSESSING OFFICER HAS NEVER POINTED OUT THAT SELLER IF HAVE ADMITTED THE RECEIPT OF ANY ON MONEY ACTUALLY PASSED ON TO THEM OVER AND ABOVE WHAT IS RECORDED I N THE SALE DEED. NONE OF THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH WERE CONFRONTED TO THE ASSESSEE. THEREFORE, AGREEMENT TO SELL IN QUESTION COULD NOT BE CONSIDERED AS INCRIMINATING EVIDENCE AGAINST THE ASSESSEE SO AS TO MAKE THE ADDITION AGAINST THE ASS ESSEE OF THIS NATURE. IN THE ABSENCE OF ANY EVIDENCE THA T 24 ASSESSEE PAID ANY AMOUNT OVER AND ABOVE RECORDED IN SALE DEED, NO ADDITION COULD BE MADE AGAINST ASSESS EE. 13. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT REVENUE HAS FAILED TO PROVE THAT ASSESSEE HAS PAID ANY AMOUNT MORE THAN THE AMOUNT MENTIONED IN THE SALE DEED. THE BURDEN UPON ASSESSING OFFICER HAVE NOT B EEN DISCHARGED AS PER LAW. THEREFORE, NO ADDITION COUL D BE MADE AGAINST THE ASSESSEE. WE, THEREFORE, SET ASID E THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 36,22,300/- AS UNEXPLAINED INVESTMENT. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA 72/2012 ( LATE SMT. AMARJIT KAUR ) 15. IN THIS APPEAL, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 39,29,421/- ON ACCOUNT OF TAXABLE CAPITAL GAINS . THE ISSUE IS SAME. THE ASSESSEE IS SELLER IN THIS CASE WHO HAS EXECUTED THE SALE DEED IN FAVOUR OF ASSESSEE SH RI M.R.JAIDKA AND OTHERS. SINCE WE HAVE DELETED THE ADDITION IN THE CASE OF PURCHASE OF THE SAME NATURE , THEREFORE, NO EVIDENCE IS AVAILABLE AGAINST THIS AS SESSEE AS WELL FOR RECEIPT OF ANY ON MONEY OVER AND ABOVE WHAT IS RECORDED IN THE SALE DEED. FOLLOWING THE REASON S FOR DECISION IN THE CASE OF SHRI M.R.JAIDKA (SUPRA) WE SET 25 ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E ADDITION OF RS. 39,29,420/-. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 17. IN THE RESULT, BOTH APPEALS OF DIFFERENT ASSESS EES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH OCTOBER, 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD