Dr. Deven Juneja, New Delhi V. Addl. CIT, New Delhi

ITA 5501/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52658 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 06-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: SK PASSCY FCAS
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained investment; Depreciation; Fair market value; Valuation report; Reason to believe; Reassessment proceedings
• Section: 147; 131; 68; 148; 132; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 5501/DEL/2010 ASSESSMENT YEAR: 2003-04 DR. DEVEN JUNEJA, VS. ADDITIONAL CIT, G-148, PREET VIHAR, RANGE-41, NEW DELHI. NEW DELHI. (PAN: AECPJ4707P) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI KVS GU PTA & SK PASSCY, FCAS RESPONDENT BY: SHRI KISHORE B, S R. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 20.07.2010 PASSED FOR ASSESSMENT YEAR 2003-04. IN GROUND NO.1, ASSESSEE HAS PLEADED THAT LEARNED CIT( APPEALS) HAS ERRED IN UPHOLDING THE REOPENING OF ASSESSMENT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. HE HAS FILED HIS RETURN OF INCOME ON 28.9.2003 DECLARING T OTAL INCOME AT RS.1,77,830. THIS RETURN WAS PROCESSED UNDER SEC. 1 43(1)(A) OF THE INCOME- TAX ACT, 1961 AT THE RETURNED INCOME. ASSESSING OFF ICER HAD REOPENED THE ASSESSMENT BY ISSUING A NOTICE UNDER SEC. 148 OF TH E ACT. HE HAS REPRODUCED THE REASONS ON PAGE NOS. 2 AND 3 OF THE ASSESSMENT ORDER. AS PER THE REASONS RECORDED BY HIM, THE ASSESSEE HAD PURCHASED A SHOP BEARING NO.17 AT LOWER 2 GROUND FLOOR OF THE CENTRE STAGE MALL, L-I, SECTO R 18, NOIDA (UP), FROM R.M. ENTERTAINMENT. A SEARCH UNDER SEC. 132 OF THE INCOME-TAX ACT, 1961 WAS CONDUCTED ON CHADDHA GROUP WHO ARE THE BUILDERS OF THIS MALL. ACCORDING TO THE ASSESSING OFFICER, DURING THE COUR SE OF SEARCH, A LEDGER AND A DIARY WERE FOUND FROM THE RESIDENCE OF SHRI RK PA THAK, AN EMPLOYEE OF M/S. R.M. ENTERTAINMENT & A.B. MOVIES PVT. LTD. THE SE DOCUMENTS WERE INVENTORIZED AS A-4 AND A-2. ON PAGE 28 OF ANNEXURE A-2, ACTUAL SALES CONSIDERATION OF THIS PROPERTY HAS BEEN MENTIONED A T RS.61 LACS WHEREAS ASSESSEE HAS PAID RS.33,55,000 ONLY BY WAY OF A CHE QUE. ASSESSING OFFICER FORMED AN OPINION THAT SUM OF RS.27,45,000 WAS PAID IN CASH AND INCOME TO THIS EXTENT HAS ESCAPED ASSESSMENT. HE ALSO OBSERVE D THAT M/S. R.M. ENTERTAINMENT, A PROMOTER OF THE CENTRE STAGE MALL ACCEPTED THE ACCEPTANCE OF CASH COMPONENT IN THE SALES CONSIDERATION FOR SA LE OF THESE SHOPS. ON THE STRENGTH OF THIS INFORMATION, ASSESSING OFFICER HAR BORED A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT, THEREFORE, HE ISSUED A SHOW -CAUSE NOTICE UNDER SEC. 148 OF THE ACT. 3. DISSATISFIED WITH THE NOTICE ISSUED BY THE ASSES SING OFFICER, ASSESSEE SOUGHT COPY OF REASONS VIDE LETTER DATED 5.2.2007 A ND THEREAFTER FILED OBJECTIONS ON REOPENING OF THE ASSESSMENT. THE ASSE SSEE HAS CONTENDED THAT 3 HE HAS PURCHASED THE SHOP AFTER MAKING PAYMENT THRO UGH ACCOUNT PAYEE CHEQUES. HE HAS NOT PAID ANY AMOUNT OVER AND ABOVE THE AMOUNTS STATED IN THE CONTRACT WITH THE DEVELOPER. ACCORDING TO THE A SSESSEE, THERE IS NO MATERIAL POSSESSED BY THE ASSESSING OFFICER WHICH C AN ENABLE HIM TO FROM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. HOWEVER, ASSESSING OFFICER DID NOT FIND ANY MERIT IN THE OBJECTIONS RAISED BY THE ASSESSEE. ASSESSING OFFICER, ON THE STRENGTH OF DECISION OF HON'BLE DEL HI HIGH COURT IN THE CASE OF CIT VS. VIPIN BATRA REPORTED IN 293 ITR 389 HAS OBSERVED THAT ASSESSING OFFICER CAN USE INFORMATION RECEIVED/COLLECTED FROM THE INVESTIGATION WING FOR HARBORING A BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT. HE REJECTED THE CONTENTIONS MADE BY THE ASSESSEE. 4. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSING OFFICER HAD FIRST SERVED THE NOTICE UNDER SEC. 148 DATED 16.1.2006 FOR THE ASSESSMENT YEAR 2005-06. THIS NOTICE WAS SU BSEQUENTLY WITHDRAWN ON 16.5.2006 WHEN ASSESSEE MADE THE REQUEST TO PROV IDE REASONS TO REOPEN THE ASSESSMENT. HE POINTED OUT THAT ASSESSING OFFIC ER FIRST FORMED HIS BELIEF 4 ON THE BASIS OF ASSUMPTION AND THEN PROCEEDED TO ST RENGTHEN HIS BELIEF BY COLLECTING THE MATERIAL AGAINST THE ASSESSEE. ASSES SEE HAS DISCLOSED PURCHASE CONSIDERATION SPECIFICALLY IN THE INVESTMENT DETAIL S. HE HAS MADE PAYMENT THROUGH ACCOUNT PAYEE CHEQUES AND, THEREFORE, THERE ARE NO REASONS WITH THE ASSESSING OFFICER TO BELIEVE THAT INCOME HAS ESCAPE D ASSESSMENT. ON THE OTHER HAND, LEARNED DR POINTED OUT THAT IN THE REAS ONS RECORDED BY THE ASSESSING OFFICER, A REFERENCE TO THE SEIZED MATERI AL WAS MADE. COPY OF THE SEIZED MATERIAL HAS BEEN PLACED BY THE ASSESSEE ON THE PAPER BOOK. IT IS A COMPUTERIZED SHEETS DISCLOSING THE DETAILS OF 53 PU RCHASERS WHO HAVE MADE PAYMENTS THROUGH ACCOUNT PAYEE CHEQUES AS WELL AS I N CASH. THIS IS A SUFFICIENT MATERIAL FOR THE ASSESSING OFFICER TO HA RBOUR A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. SECTION 147 OF THE ACT PROVIDES T HAT IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SEC. 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH CAME TO HIS NOTICE SUBSEQUENTLY IN COURSE OF THE PROCEEDINGS UN DER THIS SECTION, HE CAN 5 RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY ALLOWANCE AS THE CASE MAY BE FOR THAT ASSESSMENT YEAR. THUS, THE CON DITION PRECEDENT FOR REOPENING OF ANY ASSESSMENT IS THAT ASSESSING OFFIC ER SHOULD HAVE INFORMATION IN HIS POSSESSION WHICH CAN ENABLE HIM TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THIS INFORMATION SHOULD HAV E A DIRECT NEXUS WITH HIS BELIEF. IN THE PRESENT CASE, DURING THE COURSE OF SEARCH, A COMPUTERIZED SHEET WAS FOUND WHICH IS CONSTRUED AS A LEDGER ACCO UNT BY THE REVENUE OFFICER. IT DEPICTS NAME OF THE PURCHASE, SHOP NUMB ER, ITS LOCATION, NAME OF THE BROKER, AMOUNT, DISCOUNT, NET AMOUNT, PAYMENT T HROUGH CHEQUE OR RECEIVED, BALANCE ETC. THESE DETAILS ARE MAINTAINED FOR ALL THE SHOPS IN THE MALL. AGAINST THE NAME OF ASSESSEE, IT HAS BEEN IND ICATED THAT SHOP WAS PURCHASED FOR A CONSIDERATION OF RS.61 LACS, WHICH HAS TWO COMPONENTS, CHEQUES AND OTHERWISE. ON THE STRENGTH OF THIS INFO RMATION, ASSESSING OFFICER HAS HARBORED A BELIEF THAT INCOME HAS ESCAP ED ASSESSMENT. ON AN ANALYSIS OF THE REASONS COUPLED WITH THIS MATERIAL , WE ARE OF THE OPINION THAT SUFFICIENT MATERIAL WAS POSSESSED BY THE ASSESSING OFFICER, WHICH CAN ENABLE HIM TO FORM THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT. THEREFORE, TO OUR MIND, HE HAS RIGHTLY ISSUED NOTICE UNDER SEC. 148 O F THE ACT. IN VIEW OF THE ABOVE DISCUSSION, GROUND NO.1 IS REJECTED. 6 7. GROUND NOS.2 TO 4 ARE INTER-CONNECTED. IN THESE GROUNDS OF APPEAL, GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEA LS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.27,45,000. THE FACTS WE HAVE ALREADY STATED WHILE DEALING WITH GROUND NO.1, IN BRIEF THEY ARE T HAT ASSESSEE HAS PURCHASED A SHOP AT LOWER GROUND FLOOR OF THE CENTRE STAGE MA LL. DURING THE COURSE OF SEARCH, AT THE PREMISES OF THE BUILDER, IT REVEALED THAT A LEDGER AND A DIARY WAS FOUND FROM THE RESIDENCE OF AN EMPLOYEE SHRI RK PATHAK, EXHIBITING THE DETAILS OF PAYMENT MADE BY THE VENDEES IN CASH AS W ELL AS BY CHEQUES. ACCORDING TO THE ASSESSING OFFICER, ASSESSEE HAS PU RCHASED THE SHOP BEARING NO.17. HE HAS SHOWN INVESTMENT AT RS.33,55,000, WHE REAS IN THE SEIZED MATERIAL, THE VALUE OF THE SHOP HAS BEEN SHOWN AT R S.61 LACS. THE CASH COMPONENTS IS OF RS.27,46,000. ASSESSING OFFICER HA S REPRODUCED THE DETAILS NOTICED IN THE SEIZED MATERIAL AND FORMED AN OPINIO N THAT TO THIS EXTENT IT IS UNEXPLAINED INVESTMENT OF THE ASSESSEE. WHEN HE CON FRONTED THE ASSESSEE, AS TO WHY THIS AMOUNT BE NOT ADDED AS UNEXPLAINED INVE STMENT, THE ASSESSEE HAS RAISED MULTI-FOLD SUBMISSIONS. THE FIRST SUBMISSION RAISED BY HIM IS THAT ALLEGED SEIZED MATERIAL/LOOSE SHEETS SHOWING SALES CONSIDERATION OF RS.61 LACS ARE NOT AUTHENTICATED AND GENUINE RECORD. THES E LOOSE SHEETS WERE MERE ROUGH ESTIMATE/PROJECTION AND THESE WERE FOUND FROM THE RESIDENCE OF ONE EMPLOYEE, NOT FROM THE BUSINESS PREMISES OF THE VEN DOR AND NOR FROM THE 7 PREMISES OF THE ASSESSEE. THE CALCULATION MADE ON T HE SEIZED MATERIAL IS NOT IN THE HANDS OF THE ASSESSEE. THESE ARE THE ENTRIES MADE BY A THIRD PERSON AT BEST HE CAN EXPLAIN HIS POSITION AS TO WHY HE MADE THESE ENTRIES. THE ASSESSEE FURTHER CONTENDED THAT ASSESSING OFFICER H AD MADE A REFERENCE TO THE DVO. WHILE PASSING THE ASSESSMENT FOR ASSESSMEN T YEAR 2005-06, AND THAT ASSESSMENT HAS ALSO BEEN FRAMED BY THE SAME OF FICIAL. DVO HAS DETERMINED THE VALUE OF THE PROPERTY ON SUCH REFERE NCE AT RS.38.12 LACS WHICH INDICATES THAT VALUE OF THE PROPERTY AT THAT VERY POINT OF TIME COULD NOT BE RS.61 LACS. 8. ASSESSING OFFICER HAS REJECTED THIS CONTENTION O F THE ASSESSEE ON THE GROUND THAT THE ENTRIES IN THE DIARY CONSIST OF TWO PARTS, NAMELY, PAYMENTS MADE BY CHEQUE AND THE PAYMENTS MADE BY CASH. THE P AYMENTS MADE BY CHEQUES HAVE NOT BEEN DISPUTED BY THE VENDEE OR THE VENDOR AND IF ONE PART OF THE PAPER IS ACCEPTED BY THE ASSESSEE THEN THE O THER PART WOULD ALSO BE ADMISSIBLE. FOR BUTTRESSING HIS VIEW POINT, ASSESSI NG OFFICER HAS MADE THE REFERENCE TO THE ORDER OF THE ITAT IN THE CASE OF R ATI RAM GOTTEWALA VS. DCIT REPORTED IN 89 ITD 14. HE FURTHER OBSERVED THA T VENDOR HAS ACCEPTED IN HIS ASSESSMENT PROCEEDINGS THAT CASH PAYMENT WAS RECEIVED OVER AND ABOVE THE CHEQUE PAYMENT. 8 9. IN THE NEXT FOLD OF SUBMISSIONS, IT WAS CONTENDE D BY THE ASSESSEE THAT MATERIAL WAS COLLECTED IN THE ABSENCE OF ASSESSEE A ND IT CANNOT BE USED AGAINST HIM. THE ASSESSEE RELIED UPON THE ORDER OF THE ITAT IN THE CASE OF SMT. NEENA SYAL VS. ACIT REPORTED IN 70 ITD 62. ASS ESSING OFFICER REJECTED THIS CONTENTION ALSO. HE OBSERVED THAT SEI ZED MATERIAL WAS DULY SUPPLIED TO THE ASSESSEE. SHRI RK PATHAK FROM WHOSE POSSESSION THE DIARY AND OTHER MATERIAL EXHIBITING PAYMENT OF CASH AND C HEQUES WERE FOUND WAS ASKED FOR APPEARANCE SO THAT AN OPPORTUNITY TO CROS S-EXAMINE COULD BE GRANTED. THE SUMMONS UNDER SEC. 131 OF THE ACT HAD BEEN ISSUED TO SHRI RK PATHAK BUT HE COULD NOT APPEAR ON THE APPOINTED DAT E BECAUSE OF HIS ILLNESS. ASSESSING OFFICER HAS REFERRED TO THE MEDICAL CERTI FICATE SENT BY SHRI RK PATHAK WHICH WERE SUPPLIED TO THE ASSESSEE. THE ASS ESSEE FURTHER SUBMITTED THAT HE HAS GOT THE PROPERTY VALUED BY A REGISTERED VALUER ON 28.11.2007 AND ENCLOSED A COPY OF THE SAID VALUATION REPORT. THE V ALUER HAS DETERMINED THE VALUE OF THE PROPERTY AT RS.33,53,266, THEREFORE, A CCORDING TO THE ASSESSEE, THE VALUATION MADE BY THE REGISTERED VALUER IS AT P AR WITH THE PURCHASE PRICE PAID BY HIM. ASSESSING OFFICER HAS REJECTED THESE C ONTENTIONS ON THE GROUND THAT THE ISSUE UNDER CONSIDERATION IS ONE OF THE PA YMENTS OF ON MONEY FOR THE PURCHASE OF THE PROPERTY AND A POSITIVE EVIDENCE OF PAYMENT OF PURCHASE 9 PRICE PARTLY IN CASH CAME TO THE POSSESSION OF THE REVENUE. HE RELIED UPON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CA SE OF CIT VS. DURGA PARSAD MORE REPORTED IN 82 ITR 540 AND OBSERVED THA T HON'BLE SUPREME COURT HAS POINTED OUT THAT TAX AUTHORITIES CAN TAKE NOTE OF SURROUNDING CIRCUMSTANCES AND IGNORED THE SELF-SEVING STATEMENT /DOCUMENT. IN THIS WAY, ASSESSING OFFICER HAS MADE AN ADDITION OF RS.27,45, 000. 10. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRIN G ANY RELIEF TO THE ASSESSEE. 11. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE REI TERATED HIS CONTENTIONS AS WERE RAISED BEFORE THE ASSESSING OFFICER. HE TOO K US THROUGH WRITTEN SUBMISSIONS AVAILABLE ON PAGES 1 TO 6 OF THE PAPER BOOK. ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AU THORITIES BELOW. HE POINTED OUT THAT DOCUMENTARY EVIDENCE EXHIBITING PA YMENT IN CASH OVER AND ABOVE THE PAYMENT MADE THROUGH ACCOUNT PAYEE CHEQUE WAS FOUND AT THE PREMISES OF THE VENDOR. THAT EVIDENCE CANNOT BE OVE RLOOKED. IT GOES TO ESTABLISH THAT THE ASSESSEE HAS PAID ON MONEY TO TH E VENDOR. ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION AND HAS RIGHT LY REFERRED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF DURGA PARS AD MORE & ORS. 10 12. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. THE SOLITARY ISSUE REQUIRED TO BE ADJUDICATED BY US IN THESE GROUNDS IS, WHETHER ON THE BASIS OF ENTRIES FOUND I N ANNEXURE A-2 AND A-4 RECORDED BY SHRI RK PATHAK AND UNEARTHED DURING THE SEARCH CARRIED OUT ON CHADDHA GROUP, CAN IT BE HELD THAT ASSESSEE HAD MAD E UNEXPLAINED INVESTMENT TO THE EXTENT OF RS.27,45,000 ON THE PUR CHASE OF A SHOP BEARING NO.17 AT LOWER GROUND FLOOR, THE CENTRE STAGE MALL, NOIDA? ON DUE CONSIDERATION OF THE RECORD, WE FIND THAT THE ASSES SING OFFICER IS HARPING UPON THESE TWO SEIZED MATERIALS I.E. ANNEXURE A2 AN D ANNEXURE A4. ACCORDING TO HIM, THE ENTRIES WERE MADE IN A SCIENT IFIC MANNER WHICH ARE AKIN TO ANY LEDGER ACCOUNT MAINTAINED IN THE ORDINA RY COURSE OF BUSINESS, THEREFORE, THEIR AUTHENTICITY CANNOT BE DOUBTED. HE FURTHER OBSERVED THAT THE VENDOR IN ITS ASSESSMENT HAS ACCEPTED THE GENUINENE SS OF THESE ENTRIES AND ASSESSEE HAS ALSO ACCEPTED ONE PART OF THE ENTRIES I.E. PAYMENTS MADE THROUGH CHEQUES. BECAUSE THERE IS NO DISPUTE ABOUT THE PAYM ENT MADE THROUGH ACCOUNT PAYEE CHEQUES AND THE PURCHASE OF THE SHOP. ACCORDING TO HIM, THE CUMULATIVE EFFECT OF ALL THESE FACTORS SUGGEST THAT ASSESSEE HAS MADE PAYMENT OVER AND ABOVE, THE ONE RECORDED IN THE SALE DEED A ND MADE THROUGH ACCOUNT PAYEE CHEQUES. 11 13. THE CASE OF THE ASSESSEE ON THE OTHER HAND IS T HAT DIARY WAS NOT FOUND FROM HIS PREMISES. THE ENTRIES IN THE ALLEGED DIARY WERE NOT IN HIS HANDWRITINGS, THEREFORE, ASSESSEE CANNOT BE ASKED T O EXPLAIN HIS STAND QUA THE NATURE OF ENTRIES AND QUA THE DOCUMENTS ITSELF. THE ASSESSEE FURTHER CONTENDED THAT HE HAS ASKED THE ASSESSING OFFICER T O PROVIDE AN OPPORTUNITY OF CROSS-EXAMINATION OF THE AUTHOR SHRI RK PATHAK. ACCORDING TO THE ASSESSEE, SHRI RK PATHAK APPEARED BEFORE THE ASSESS ING OFFICER ON 26.11.2007 IN RESPONSE TO THE SUMMONS ISSUED UNDER SEC. 131(1) OF THE ACT. BUT HIS STATEMENT COULD NOT BE RECORDED FOR WANT OF CLARIFICATION AND THE HEARING WAS ADJOURNED TO 5 TH DECEMBER 2007. THEREAFTER THAT MAN DID NOT TURN UP. THEREFORE, THE ALLEGED ENTRIES ARE UNSUBST ANTIATED. ON THE BASIS OF SUCH LOOSE DOCUMENT WHICH ARE MAINTAINED BY A THIRD PERSON AND FOUND FROM THE PREMISES OF A THIRD PERSON, ADDITION IN THE HAN DS OF THE ASSESSEE CANNOT BE MADE. 14. ON DUE CONSIDERATION OF BOTH THESE STANDS, WE A RE OF THE VIEW THAT ADDITION IS NOT SUSTAINABLE, BECAUSE THE ALLEGED EN TRIES IN DIARY WAS NOT IN THE HANDWRITING OF THE ASSESSEE. IT WAS NOT FOUND FROM THE PREMISES OF THE ASSESSEE. IT IS DIFFICULT FOR THE ASSESSEE TO EXPLA IN HOW A THIRD PERSON IS MAKING SUCH ENTRIES AND WHAT WAS THE OBJECT OF MAKI NG THOSE ENTRIES. TO OUR 12 MIND, SUCH TYPE OF EVIDENCE CAN BE A STARTING POINT OF INVESTIGATION IN THE CASE OF ASSESSEE AND AT THE MOST, IT IS CORROBORATI VE PIECE OF EVIDENCE BUT SOLELY ON THE BASIS OF SUCH TYPE OF EVIDENCE COLLEC TED FROM THE PREMISES OF A THIRD PERSON, ASSESSEE CANNOT BE BURDEN WITH A TAX LIABILITY. APART FROM THIS, ONE BASIC ISSUE, THERE ARE OTHER PERIPHERAL CONSIDE RATION WHICH PERSUADE US TO DELETE THE ADDITION, NAMELY, THE AUTHOR OF THE D IARY AND FROM WHOSE POSSESSION IT WAS FOUND WAS NOT SUBJECTED TO CROSS- EXAMINATION, THEREFORE, THE DOCUMENTS LOSE ITS SANCTITY FOR CONSIDERING IN THE EVIDENCE. WE FIND THAT THE ASSESSING OFFICER HAS MADE A REFERENCE TO ONE O RDER OF THE ITAT RENDERED IN THE CASE OF RATI RAM GOTTEEWALA VS. DCI T. THERE ARE BASIC DIFFERENCE IN THE FACTS. IN THAT CASE, DIARY WAS FO UND FROM THE PREMISES OF THE ASSESSEE. HE HAS ACCEPTED ONE PART OF THE ENTRIES I N THAT DIARY. THEREFORE, THE ITAT OBSERVED THAT OTHER PART CANNOT BE IGNORED AND IN ORDER TO GIVE A LOGICAL END THE COMPLETE DOCUMENT HAS TO BE READ. I N THE PRESENT CASE, DIARY WAS NOT FOUND FROM THE RESIDENCE OF THE ASSESSEE. I T IS NOT IN THE HANDWRITING OF THE ASSESSEE. SECTIONS 91 OF THE INDIAN EVIDENCE ACT, CONTEMPLATES THAT WHEN TERMS OF CONTRACT GRANTS OR OTHER DISPOSSESSIO N OF PROPERTY HAVE BEEN REDUCED TO THE FORM OF DOCUMENT THEN NO EVIDENCE IS PERMISSIBLE TO BE GIVEN IN PROOF OF ANY SUCH TERM OF SUCH GRANT OR DISPOSSE SSION OF THE PROPERTY EXCEPT THE DOCUMENT ITSELF OR THE SECONDARY EVIDENC E THEREAFTER. SIMILARLY, 13 SECTION 92 PROVIDES THAT ONCE THE DOCUMENT IS TENDE RED IN EVIDENCE AND PROVED AS PER THE REQUIREMENT OF SECTION 91, THEN N O EVIDENCE OF ANY ORAL AGREEMENT OR STATEMENT WOULD BE ADMISSIBLE AS BETWE EN THE PARTIES TO ANY SUCH INSTRUMENT FOR THE PURPOSE OF CONTRADICTING VE RY, ADDING TO OR SUBTRACTING FROM ITS TERM. HON'BLE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF PRAMJIT SINGH VS. ITO REPORTED IN 323 ITR 5 88 HAS CONSIDERED THIS ASPECT. IN THAT CASE, ASSESSEE HAD PURCHASED A PROP ERTY FROM HIS UNCLE AND THE SALE DEED REFLECTS THE PAYMENT OF SALES CONSIDE RATION OF RS.24,65,000. THE SALE DEED WAS EXECUTED. IT WAS DULY REGISTERED BEFORE THE REGISTRATION AUTHORITY. WHEN ASSESSING OFFICER ENQUIRED THE SOUR CE OF INVESTMENT THEN THE ASSESSEE SOUGHT TO FILE AFFIDAVIT OF HIS UNCLE CONTENDING THEREIN THAT NO MONEY EXCHANGED HANDS. THIS STAND OF THE ASSESSEE W AS REJECTED ON THE GROUND THAT ONCE THE ENTRIES ARE REFLECTED IN A DEE D, THEY CANNOT BE CHANGED BY LEADING ORAL EVIDENCE OR ANY OTHER EVIDENCE IN V IEW OF SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT. IN THE PRESENT CASE ALS O, ASSESSEE HAS PURCHASED THE SHOP AFTER ENTERING INTO A CONTRACT WITH THE VE NDOR. IN THE CONTRACT SALES PRICE WAS SETTLED AT RS.33,55,000 WHICH HAS BEEN PA ID BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES. NOW, ASSESSING OFFIC ER WANTS TO CHANGE THIS SALES PRICE BY VIRTUE OF AN EVIDENCE FOUND AT THE PREMISES OF A THIRD PERSON AND ENTRIES MAINTAINED BY SUCH THIRD PERSON. THE NEXT CONSIDERATION 14 WHICH WEIGH OUR MIND FOR ACCEPTING THE STAND OF THE ASSESSEE IS THAT ASSESSMENT IN ASSESSMENT YEAR 2005-06 WAS FRAMED ON 24.12.2007. IN THE PRESENT ASSESSMENT YEAR, I.E. 2003-04, IT WAS FRAME D ON 31.12.2007. ASSESSING OFFICER IS SAME. IN ASSESSMENT YEAR 2005- 06, IN ORDER TO DETERMINE THE CAPITAL GAIN, ASSESSING OFFICER SENT A REFERENC E TO THE DVO UNDER SEC. 55A OF THE ACT. HE HAS ASSIGNED A REASON FOR SENDIN G THE REFERENCE ON THE GROUND THAT DURING THE COURSE OF SEARCH, IT REVEALE D THAT ASSESSEE HAS PURCHASED THE PROPERTY FOR A CONSIDERATION OF RS.61 LACS WHICH INCLUDES CASH COMPONENTS OF RS.27,45,000. DVO HAS SUBMITTED ITS R EPORT ON 28.11.2007. HE DETERMINED THE FAIR MARKET VALUE AT RS.38,12,500 AS AGAINST DECLARED VALUE OF RS.34 LACS. ASSESSING OFFICER IN THIS WAY ACCEPTED THE DECLARED VALUE WHILE COMPUTING CAPITAL GAIN MEANING THEREBY AT THAT RELEVANT POINT OF TIME, THE FAIR MARKET VALUE OF THIS PROPERTY WAS NO T MORE THAN RS. 38 LACS. IF THAT BE SO, THEN, WHY ASSESSEE WOULD PAY RS.61 LACS . THEREFORE, WE ARE OF THE VIEW THAT THE EVIDENCE POSSESSED BY THE ASSESSING O FFICER IN THE SHAPE OF ALLEGED SEIZED MATERIAL FROM THE PREMISES OF A THIR D PERSON AND MAINTAINED BY SUCH THIRD PERSON IS TOO SCAN TO SAY THAT ASSESS EE HAS MADE PAYMENT IN CASH OVER AND ABOVE THE PAYMENTS SHOWN TO BE MADE B Y ACCOUNT PAYEE CHEQUES. WE ALLOW THESE GROUNDS OF APPEAL AND DELET E THE ADDITION OF RS.27,45,000. 15 15. IN GROUND NO.6, GRIEVANCE OF THE ASSESSEE IS TH AT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION O F RS.3,48,000 ON ACCOUNT OF UNEXPLAINED CREDIT FOUND IN THE BOOKS OF ASSESSEE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS RECEIVED A LO AN OF RS.3,48,000 FROM SHRI BRIJESH THAREJA. IN ORDER TO PROVE THE INGREDIENCE OF SEC. 68 OF THE ACT, ASSESSEE HAS FILED A CONFIRMATION FROM THE CREDITOR , COPY OF PAN CARD, BANK STATEMENT AND ACKNOWLEDGEMENT OF INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2003-04. ASSESSING OFFICER HAS CALLED FOR THIS CREDITOR BY ISSUING SUMMONS UNDER SEC. 131 OF THE ACT. HE RECORDED HIS STATEMENT. IT REVEALED FROM THE DETAILS THAT SHRI THAREJA HAD ISSUED EIGHT CHEQUES OF DIFFERENT AMOUNTS, TOTALING TO RS.3,48,000, ON 9 TH AND 10 TH AUGUST 2002 IN FAVOUR OF THE ASSESSEE. THERE WAS NO CREDIT BALANCE IN HIS BA NK ACCOUNT IN BETWEEN APRIL 2000 TO AUGUST. THE AMOUNTS WERE DEPOSITED BY CASH AND THEREAFTER THIS MAN HAD ISSUED CHEQUES. ASSESSING OFFICER FORM ED AN OPINION THAT CREDITOR WAS UNABLE TO EXPLAIN THE SOURCE OF CASH D EPOSITED IMMEDIATELY PRIOR TO ADVANCING THE LOAN TO THE ASSESSEE. HE, TH EREFORE, DISBELIEVED THE CREDIT WORTHINESS OF THE CREDITOR AND MADE THE ADDI TION. BEFORE THE LEARNED CIT(APPEALS), ASSESSEE REITERATED THAT HE HAS FILED CONFIRMATION FROM THE CREDITORS. THE CREDITOR IS AN INCOME-TAX ASSESSEE. HIS ITRS WERE ALSO 16 SUBMITTED BEFORE THE ASSESSING OFFICER. HE APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRMED THE TRANSACTION. THEREFORE, A SSESSEE HAS FULFILLED ALL THE REQUISITE CONDITIONS PROPOUNDED BY SEC. 68 OF THE ACT I.E. GENUINENESS OF THE TRANSACTION, CREDITWORTHINESS OF THE CREDITOR A ND IDENTITY OF THE CREDITOR. THE LOANS HAVE BEEN TAKEN THROUGH ACCOUNT PAYEE CHE QUES. IT PROVES THE GENUINENESS OF THE TRANSACTION. LEARNED CIT(APPEALS ) APPRECIATED ALL THESE ASPECTS AND OBSERVED THAT PERUSAL OF INCOME-TAX REC ORD AND BANK ACCOUNT OF SHRI THAREJA SHOWS THAT NET WORTH OF SHRI THAREJA D OES NOT EQUIP HIM FOR ADVANCING OF SUCH A LOAN TO THE ASSESSEE. 16. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE HAS REITERATED HIS CONTENTIONS AS WERE RAISED BEFORE THE REVENUE AUTHO RITIES BELOW. HE RELIED UPON THE DECISION OF HON'BLE MADHAYA PRADESH HIGH C OURT IN THE CASE OF CIT VS. METACHEM IND. REPORTED IN 245 ITR 160. SIMI LARLY, HE RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CAS E OF VIPIN KHANNA VS. CIT REPORTED IN 251 ITR 782. ON THE STRENGTH OF HON 'BLE DELHI HIGH COURTS DECISION, HE SUBMITTED THAT IN A REASSESSMENT ORDER , ASSESSING OFFICER CANNOT MAKE INQUIRY INTO THE ISSUES WHICH WERE NOT CONNECT ED WITH THE RE-OPENING OF ASSESSMENT. LEARNED COUNSEL FOR THE ASSESSEE IN THIS WAY SUBMITTED THAT THIS ADDITION DESERVES TO BE DELETED. ON THE OTHER HAND, LEARNED DR POINTED 17 OUT THAT THERE WAS NO CASH BALANCE AVAILABLE IN THE ACCOUNT OF SHRI THAREJA. IT IS THE ASSESSEES MONEY WHICH WAS DEPOSITED BY WAY OF A CASH IN THE ACCOUNT AND THEREAFTER THE CREDITOR HAD ISSUED CHEQUES OF T HE ALLEGED LOAN IN FAVOUR OF ASSESSEE. LEARNED REVENUE AUTHORITIES HAVE RIGHT LY HELD THAT CREDITOR FAILED TO EXPLAIN THE SOURCE OF CREDIT AND IT IS THE UNEXP LAINED MONEY OF THE ASSESSEE. 17. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME-TAX ACT, 1961 CONTEMPLATES THAT IF ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESS EE MAINTAINED FOR ANY PREVIOUS YEAR, AND ASSESSEE OFFERS NO EXPLANATION A BOUT THE NATURE AND SOURCE THEREAFTER OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY, THEN THE SUMS S O CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS, IT HAS BEEN PROPOUNDE D THAT IN ORDER TO DISCHARGE THE ONUS CONTEMPLATED BY SEC. 68, ONE HAS TO FULFILL THREE CONDITIONS, NAMELY, ONE HAS TO IDENTITY THE CREDITO R I.E. IDENTITY OF THE CREDITOR HAS TO BE PROVED. THE NEXT CONDITION IS TH AT GENUINENESS OF THE TRANSACTION DEMONSTRATING THE LOAN ETC. HAS TO BE P ROVED AND IT HAS TO BE DEMONSTRATED THAT CREDITORS HAS THE SOURCE OF ADVAN CING SUCH LOANS. IN THE 18 PRESENT CASE, THE REVENUE AUTHORITIES HAVE NOT DOUB TED THE IDENTITY OF THE CREDITORS. HE APPEARED BEFORE THE ASSESSING OFFICE R AND CONFIRMED THE ADVANCEMENT OF LOAN. THE AMOUNT HAS BEEN TAKEN THRO UGH ACCOUNT PAYEE CHEQUE. THEREFORE, IT IS ALSO NOT DISPUTED THAT MON EY HAS COME FROM SHRI THAREJAS ACCOUNT. THE GRIEVANCE OF THE REVENUE AUT HORITIES IS THAT CREDITOR WAS NOT HAVING SUFFICIENT SOURCE FOR ADVANCING A LO AN OF RS.3,48,000 TO THE ASSESSEE. ASSESSING OFFICER HAS HIGHLIGHTED CIRCUMS TANTIAL ASPECTS IN THIS CONNECTION. HE HAS REFERRED THE STATEMENT OF THE CR EDITOR AS WELL AS THE BANK ACCOUNT. ON AN ANALYSIS OF ALL THESE DOCUMENTS, LEA RNED CIT(APPEALS) HAS OBSERVED THAT NET WORTH OF SHRI THAREJA DOES NOT EQ UIP HIM TO ADVANCE THIS MUCH AMOUNT TO THE ASSESSEE. THE SUBMISSIONS MADE B Y THE ASSESSEE DOES NOT DEAL WITH THIS ISSUE. THE LEARNED COUNSEL FOR T HE ASSESSEE RELIED UPON THE DECISION OF HON'BLE MADHAYA PRADESH HIGH COURT BUT IN THAT CASE THE CREDIT WAS STANDING IN THE NAME OF THE PARTNER AND IT WAS A CASE OF A FIRM. AS FAR AS THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CAS E OF VIPIN KHANNA IS CONCERNED, WE HAVE ALREADY UPHELD THE REOPENING OF THE ASSESSMENT. THEREFORE, ASSESSING OFFICER CAN LOOK INTO ANY OTHE R ASPECTS WHICH CAME TO HIS NOTICE DURING THE REASSESSMENT PROCEEDINGS. THE ASSESSEE FAILED TO GIVE ANY PLAUSIBLE EXPLANATION DEMONSTRATING THE SOURCE OF THE MONEY IN THE 19 ACCOUNT OF SHRI THAREJA. WE DO NOT FIND ANY FORCE I N THIS GROUND OF APPEAL. IT IS REJECTED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 09.09.201 1 SD/- SD/- ( K.G. BANSAL ) ( RA JPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/09/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR