Joint CIT(OSD), Ernakulam V. Sri, A.M. Sanoj , Cochin

ITA 583/COCH/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96731 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 09-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2011
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Unexplained investment; Salary income; Principle of natural justice; Deemed dividend; Block assessment
• Section: 260A; 131; 92

Judgement Text

.T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 1 IN THE INCOME TAX APPELLATE TR IBUNAL COCHIN BENCH COC HIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEORGE K., JM I.T.A. NO. 583/COCH/2011 ASSESSMENT YEAR : 2008-09 THE JOINT COMMISSIONER OF INCOME-TAX(OSD), CIRCLE-4(2), KOCHI VS. SHRI A.M. SANOOJ, M/S. ZAHI TYRES (INDIA)(P) LTD., NO.403, PIONEER TOWERS, MARINE DRIVE, ERNAKULAM, KOCHI-31. [PAN: AJPPS 8240Q] (REVENUE -APPELLANT) (ASSESSEE -RESPONDENT) C.O. NO. 39/COCH/2011 (ARSG. OUT OF I.T.A. NO. 583/COCH/ 2011) ASSESSMENT YEAR : 2008-09 SHRI A.M. SANOOJ, M/S. ZAHI TYRES (INDIA)(P) LTD., NO.403, PIONEER TOWERS, MARINE DRIVE, ERNAKULAM, KOCHI-31. [PAN: AJPPS 8240Q] VS. THE DY. COMMISSIONER OF INCOME- TAX, CIRCLE-4(2), RANGE-4, KOCHI. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR ASSESSEE BY SHRI R.KRISHNA IYER, CA DATE OF HEARING 09/09/2015 DATE OF PRONOUNCEMENT 12/10/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), KOCHI DATED 19 TH AUGUST, 2011 FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION AGAINST THE REVENUES APPEAL. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS-II) COCHIN IN APPEAL NO: I.T. A-52/E/R-4/CIT(A)-II/2010-2011 DATED 19/08/2011 FOR THE A.Y. 2008-09 IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHORT T ERM CAPITAL GAIN, ON THE GROUND THAT THERE IS NO EVIDENCE FOR RECEIPT OF THE AMOUNT IN EXCESS OF RS.55,40,000/- AS CONSIDERATION FOR THE SALE. THE ASSESSING OFFICER H AS MADE THE ADDITION ON THE BASIS OF THE AGREEMENT DATED 22.06.2007 BETWEEN THE ASSESSEE AND SRI M.V. PRAKASAN. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FAILED TO CONSIDER THE FACTS OF THE CASE IN ITS PROPER PERSPECTIVE AND HAS ALSO IGN ORED THE GROUND REALITIES IN TRANSACTIONS OF SUCH NATURE. THE CIT(APPEALS) HAS A LSO FAILED TO CONSIDER THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE AND THE FACTS AND EVI DENCES EXPLAINED BY THE ASSESSING OFFICER IN PARA-11 & 15 OF THE ASSESSMENT ORDER. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS IN THE CROSS OBJECTION: 1. THE ORDER OF THE LEARNED CIT(A) SUSTAINING THE ADDITION OF RS.35 LAKHS IS AGAINST LAW AND HENCE UNSUSTAINABLE. 2. IT IS SUBMITTED THAT IN ORDER TO FALL WITHIN TH E MEANING OF DEEMED DIVIDEND AS PER SECTION 2(22)(E) TWO CONDITIONS MUST BE SATISFIED. FIRST IT MUST BE A LOAN OR ADVANCE. SECOND IT MUST BE FOR THE BENEFIT OF THE SHARE HOLD ER. 3. ALL PAYMENTS CANNOT BE CONSIDERED AS LOAN. THE COURTS HAVE REPEATEDLY HELD THAT ADVANCES FOR TRADE TRANSACTIONS CANNOT BE SUBJECTED TO TAX AS DEEMED DIVIDEND. GIST OF VARIOUS DECISIONS CONFIRMING THAT ADVANCES AS PA RT OF TRADE TRANSACTIONS CANNOT BE CONSIDERED AS LOAN OR ADVANCE FOR THE PURPOSE OF DE EMED DIVIDEND IS ENCLOSED AS ANNEXURE. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 3 76 ITR 369 (BOM) 177 ITR 393 (BOM). 318 ITR 462 (DEL) 106 TTJ 250 (ITAT, CHANDIGARH) 87 TTJ (DEL) 1086 1 SOT 510 (DEL) 4. IT IS SUBMITTED THAT THERE IS NO FINDING THAT THE TRANSACTION IS NOT GENUINE AND IT IS NOT PERMITTED AS PER THE COMPANY LAW. VARIOUS CASE LAWS ARE FURNISHED. PAYMENTS INCLUDING ADVANCES/DEPOSITS IN THE ORDINARY COURSE OF BUSINESS OR NORMAL BUSINESS TRANSACTIONS CANNOT BE TREATED AS DEEMED DIVIDEND. 5. THE LEARNED CIT(A) HAS NOT CONSIDERED THE VARI OUS DECISIONS RELIED UPON BY THE RESPONDENT. THE LEARNED CIT(A) OBSERVED THAT THERE IS NO MERIT IN THE CASE OF THE RESPONDENT AND HE AGREED WITH THE AO AND ACCORDINGL Y, SUSTAINED THE ADDITION OF RS.35 LAKHS. THE VARIOUS CASE LAWS CITED BY THE RE SPONDENT HAS NOT BEEN CONSIDERED BY THE LEARNED CIT(A). THEREFORE THE FINDING OF TH E LEARNED CIT(A) (AO IS NOT CORRECT AND THE ADDITION SHOULD HAVE BEEN DELETED. 6. AND SUCH OTHER GROUNDS, AS MAY BE ADVANCED A T THE TIME OF HEARING. 7. IT IS THEREFORE PRAYED THAT THE HONBLE TRIB UNAL MAY BE PLEASED TO DISMISS THE APPEAL FILED BY THE DEPARTMENT AND ALSO DELETE THE ADDITION OF RS.35 LAKHS SUSTAINED BY THE LEARNED CIT(A). 4. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE IS THE MANAGING DIRECTOR OF M/S. ZAHI TYRES (INDIA) PVT. LTD. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DISCLOSED A TOTAL INCOME OF RS.56.30 LAKHS IN HIS R ETURN OF INCOME. THE TOTAL INCOME RETURNED BY THE ASSESSEE INCLUDED INCOME FROM SALARY AMOUNTING TO RS.10.80 LAKHS AND INCOME FROM SHORT TERM CAPITAL GAIN AT RS.45.50 LAKHS. THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY AND .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 4 CONSEQUENTLY NOTICE UNDER SECTION 143(2) OF THE ACT DATED 3RD SEPTEMBER, 2009 WAS SERVED ON THE ASSESSEE. THE BANK ACCOUNT DETAILS OF THE ASSE SSEE WERE VERIFIED AND IT WAS FOUND THAT THE ASSESSEE HAD RECEIVED RS.22 LAKHS AS ADVANCE FROM M /S. ZAHI TYRES (INDIA) PVT. LTD. AS SECURITY DEPOSIT FOR LAND TO BE PURCHASED IN THE NA ME OF THE ASSESSEE. HE FURTHER RECEIVED AN AMOUNT OF RS.15 LAKHS AS ADVANCE FOR THE PURCHASE O F LAND. THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SUBMITTED THAT THE AFORESAI D AMOUNTS RECEIVED FROM THE COMPANY M/S. ZAHI TYRES (INDIA) PVT. LTD. WERE UTILIZED TO BUY LAND AT MARADU AND THE SAID LAND WAS BOUGHT IN HIS NAME. IN THE SAID COMPANY, THE ASSESS EE WAS HOLDING MORE THAN 50% OF SHARES. THE ASSESSING OFFICER HELD THAT ALL THE CONDITIONS LAID DOWN UNDER SECTION 2(22)(E) OF THE I.T. ACT WERE SATISFIED AND THE AMOUNT OF RS.35 LAKHS WA S ADDED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. 5. IN THE ASSESSMENT PROCEEDINGS, IT WAS OBSER VED THAT THE ASSESSEE HAD SHOWN SHORT TERM CAPITAL GAIN AMOUNTING TO RS.45.50 LAKHS ON THE SAL E OF TWO PROPERTIES TOTALLING TO 30.65 ARES (75.75 CENTS) LAND AT CHENGAMANAD VILLAGE. ONE OF T HE PROPERTIES MEASURING 4.05 ARES OF LAND WAS SOLD TO M/S. HILINE DEVELOPERS AND PROJECTS LTD . BY SALE DEED DATED 06/11/ 2007 FOR A CONSIDERATION OF RS.16 LAKHS AND THE PROPERTY MEASU RING 26.60 ARES WAS SOLD TO M/S. ALPHA HOLDING INFRASTRUCTURES PVT. LTD. BY SALE DEED DATE D 29/10/2007 FOR A SALE CONSIDERATION OF RS.39.40 LAKHS. BOTH THE SALE DEEDS WERE REGISTERE D SALE DEEDS EXECUTED BEFORE THE SUB REGISTRAR WHO RECORDED THE AFORESAID CONSIDERATION PAID TO THE ASSESSEE. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 5 6. ACCORDING TO THE ASSESSING OFFICER, A SEPARA TE AGREEMENT DATED 27/06/2007 WAS ENTERED INTO BETWEEN THE ASSESSEE AND SHRI M.V. PRAKASHAN, A REPRESENTATIVE OF THE COMPANY M/S. KINGS INFRA VENTURES LTD. WHICH RECORDED THAT THE L AND IS TO BE SOLD AT RS.4.50 LAKHS PER CENT TOTALING TO RS.3,40,87,500/-. THE ASSESSING OFFICE R ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO THE ASSESSEE WHEREIN HE HAD ADMITTED THAT HI S SIGNATURE AS AFFIXED ON THE AFORESAID AGREEMENT. THE REPRESENTATIVE, SHRI M.V.PRAKASHAN IN HIS STATEMENT BEFORE THE ASSESSING OFFICER STATED THAT HE WAS WORKING FOR M/S. KINGS I NFRA VENTURES LTD. FOR THE PAST 25 YEARS AND WAS ACTING AS LAND AGGREGATOR FOR THE COMPANY. IT WAS STATED BY HIM THAT THE COMPANY USED TO TRANSFER MONEY FOR THE PURCHASE OF LAND TO HIS PERS ONAL BANK ACCOUNT FROM WHERE CASH WAS WITHDRAWN AND PAID. WITH RESPECT TO THE AFORESAID AGREEMENT, HE STATED THAT RS.50 LAKHS WAS GIVEN AS ADVANCE BY HIM TO THE ASSESSEE IN THE FORM OF DEMAND DRAFT AND ANOTHER RS.50 LAKHS WAS PAID IN CASH TO THE ASSESSEE. THE REMAINING AMO UNT OF RS.2,40,87,500/- WAS GIVEN IN CASH TO THE ASSESSEE BY HIM AT THE TIME OF REGISTRATION OF THE SALE DEEDS. 7. THE ASSESSEE, ON THE OTHER HAND, SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE WAS A SEPARATE AGREEMENT DATED 06-03-2010 BETWEEN THE ASS ESSEE AND SHRI M.V. PRAKASHAN EXECUTED BEFORE THE NOTARY PUBLIC WHEREIN HE HAD ACCEPTED TH AT THE ACTUAL SALE DEEDS EXECUTED BETWEEN THE COMPANIES (BUYER) AND THE ASSESSEE (SELLER) WAS FOR A TOTAL CONSIDERATION OF RS.55.40 LAKHS AND THE ASSESSEE WAS NOT ENTITLED TO THE DIFFERENCE IN THE AMOUNT OF RS.3.42 CRORES AND RS.55.40 LAKHS. IN THE AGREEMENT, IT WAS FURTHER S TATED THAT SHRI M.V.PRAKASHAN WOULD HIMSELF REMIT INCOME TAX ON DIFFERENTIAL AMOUNT. THE SAID AGREEMENT HAS BEEN SIGNED BEFORE THE NOTARY PUBLIC AND WAS NOT DENIED BY SHRI M.V. PRAKA SHAN IN HIS STATEMENT BEFORE THE ASSESSING OFFICER. THE ASSESSEE FURTHER STATED THAT HE RECEI VED RS.50 LAKHS IN THE FORM OF D.D. FROM SHRI .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 6 M.V. PRAKASHAN AND THE BALANCE AMOUNT OF RS.5.40 LA KHS BY WAY OF CASH AT THE TIME OF REGISTRATION OF SALE DEEDS AND OVER AND ABOVE THE S AID AMOUNTS, THE ASSESSEE HAS NOT RECEIVED ANY CASH FROM EITHER THE BUYER OR FROM THE REPRESEN TATIVE, SHRI M.V. PRAKASHAN. THE ASSESSEE FURTHER STATED THAT THE AGREEMENT DATED 27-06-2007 WAS SIGNED TO FACILITATE SHRI M.V. PRAKASHAN TO SELL THE PROPERTY AT A HIGHER PRICE TO A PROSPECTIVE BUYER. 8. IN THE ASSESSMENT ORDER DATED 30-12-2010, THE ASSESSING OFFICER REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE BY RELYING UPON THE AGREEMENT DATED 27-06-2007 AND HOLDING THAT THE ACTUAL SALE CONSIDERATION WAS RS.3,40,87,500/- . A CCORDING TO THE ASSESSING OFFICER, THE AGREEMENT DATED 06/03/2010 WAS ONLY MADE TO ESCAPE ASSESSMENT ON THE TOTAL CONSIDERATION. THE ASSESSING OFFICER BASED HIS FINDINGS ON THE FAC T THAT SHRI M.V. PRAKASHAN IN HIS STATEMENT STATED THAT HE DID NOT KNOW ENGLISH AND HE SIGNED T HE AGREEMENT OF 2010 IN GOOD FAITH ONLY. THE ASSESSING OFFICER, ACCORDINGLY, ASSESSED THE TO TAL INCOME AT RS.3,75,77,500/- AS AGAINST THE RETURNED INCOME OF RS.56,30,000/-. 9. THE ASSESSEE CARRIED THE MATTER IN APPEAL BE FORE THE LD. CIT(A). THE LD. CIT(A) VIDE HIS IMPUGNED ORDER DATED 19-08-2011 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE WHEREIN THE ADDITION WITH RESPECT TO SHORT TERM CAPITAL GAIN WA S DELETED. THE LD. CIT(A) OBSERVED THAT THERE WAS NO EVIDENCE THAT THE ASSESSEE RECEIVED THE MONE Y OVER AND ABOVE THE SALE CONSIDERATION MENTIONED IN THE SALE DEEDS. THE MONEY WAS RECEIVE D BY SHRI M.V.PRAKASHAN FROM THE BUYER COMPANY IN HIS PERSONAL ACCOUNT. IT CANNOT BE PRES UMED THAT THE SAID MONEY CAME TO THE ASSESSEE. IT WAS FURTHER OBSERVED THAT THE STATEME NT OF SHRI M.V. PRAKASHAN THAT HE DOES NOT .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 7 KNOW ENGLISH CANNOT BE ADMITTED AT ITS FACE VALUE. ACCORDING TO THE LD. CIT(A), A PERSON WHO HAD BEEN DEPLOYED BY A BIG COMPANY AS A LAND AGGREG ATOR FOR SIGNING DOCUMENTS BEFORE THE NOTARY PUBLIC CANNOT DO SO WITHOUT KNOWING ITS IMPL ICATIONS. 10. THE OTHER ADDITION OF RS.35 LAKHS UNDER S ECTION 2(22)(E) OF THE ACT WAS CONFIRMED BY THE LD. CIT(A) BY HOLDING THAT THE BENEFIT OF THE S AID AMOUNT WAS RECEIVED BY THE INDIVIDUAL ASSESSEE HIMSELF BY UTILIZING THE FUNDS OF THE COMP ANY. 11. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD. CIT(A) FOR DELETING THE ADDITION WITH RESPECT TO SHORT TERM CAPITAL GAIN. T HE ASSESSEE IS IN CROSS OBJECTION PRAYING FOR DELETION OF ADDITION ON ACCOUNT OF DEEMED DIVIDEND. 12. ON BEHALF OF THE REVENUE, THE LD. DR ARGUED AND SUBMITTED THAT THE LD. CIT(A) HAS IGNORED THE GROUND REALITY IN THE TRANSACTIONS OF S UCH NATURE AND IF THE TOTALITY OF CIRCUMSTANCES OF THE CASE IS SEEN THEN THE ADDITION WITH RESPECT TO SHORT TEM CAPITAL GAIN OUGHT NOT TO HAVE BEEN DELETED. ACCORDING TO THE LD. DR, THE COMPAN IES (BUYERS) HAD TRANSFERRED THE ENTIRE SALE CONSIDERATION TO THE BANK ACCOUNT OF SHRI M.V. PRAK ASHAN DURING THE PERIOD JUNE 2007 TO OCTOBER, 2007 AND IT WAS LIKELY THAT SHRI M.V. PRAK ASHAN HAD WITHDRAWN THE ENTIRE MONEY AND HANDED OVER THE SAME TO THE ASSESSEE AFTER DEDUCTIN G HIS COMMISSION. MOREOVER, IT IS THE CASE OF THE REVENUE THAT SHRI M.V. PRAKASHAN IN HIS STAT EMENT HAD STATED THAT THE CASH ABOVE THE DOCUMENTED CONSIDERATION WAS HANDED OVER TO THE ASS ESSEE AT THE TIME OF REGISTRATION OF SALE DEEDS. IT WAS ARGUED BY THE LD. DR THAT THE AGREEM ENT DATED 06-03-2010 IS OF NO .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 8 CONSEQUENCE IN VIEW OF THE PRIOR AGREEMENT DATED 27 -06-2007 AND ALSO THE FACT THAT SHRI M.V. PRAKASHAN HAS STATED THAT HE DID NOT KNOW HOW TO RE AD AND WRITE ENGLISH. 13. THE LD. AR ARGUED ON THE OTHER HAND THAT THE DEPARTMENT HAS NOT CONSIDERED THE REGISTERED SALE DEED EXECUTED FOR SALE WITH THE BUY ER ON 29/10/2007 AND 06/11/2007 BEFORE THE SUB REGISTRAR AND ALSO THE SUBSEQUENT AGREEMENT DATED 06-03-2010 SIGNED BY SHRI M.V. PRAKASHAN. IT IS THE CASE OF THE ASSESSEE THAT THE RE IS NO EVIDENCE FOR THE RECEIPT OF ALLEGED BALANCE OF SALE CONSIDERATION BY THE ASSESSEE EXCEP T A BALD STATEMENT BY SHRI M.V. PRAKASHAN. MOREOVER, SHRI M.V. PRAKASHAN HAS NOT DENIED THE EX ISTENCE OF THE AGREEMENT DATED 06-03- 2010 AND THE STATEMENT THAT HE DID NOT KNOW ENGLISH SHOULD BE DISREGARDED IN VIEW OF THE REASONING GIVEN BY THE LD. CIT(A). THE LD. AR FURT HER SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN THE OPPORTUNITY TO CROSS EXAMINE SHRI M.V. PR AKASHAN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE RECORD AND FACTS OF THE CASE AND JUDGMENT RELIED UPON BY THE PARTIES. THE CASE PUT FORTH BY THE REVENUE IS THAT THE ASSESSEE HAD RECEIVED SALE CONSIDERATION OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED EXECUTED BEFORE THE SUB-REGISTRAR. THE L D. DR HAS BASED HIS ARGUMENT, INTER ALIA, ON THE STATEMENT MADE BY SHRI M.V. PRAKASHAN, AGREE MENT DATED 27-06-2007 EXECUTED BETWEEN THE ASSESSEE AND SHRI M.V. PRAKASHAN AND ST ATEMENT OF THE ASSESSEE ADMITTING THE EXISTENCE OF THE AGREEMENT DATED 27-06-2007. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 9 15. THE REGISTERED SALE DEED DULY EXECUTED, SIGN ED AND STAMPED BY THE PARTIES BEFORE THE SUB REGISTRAR IS DIRECT PIECE OF DOCUMENTARY EVIDEN CE WITH RESPECT TO THE CLAUSES CONTAINED THEREIN INCLUDING THE CONSIDERATION AMOUNT MENTIONE D. AS PER SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872, ONCE THE DOCUMENT IS TENDERED I N EVIDENCE AND PROVED AS PER THE REQUIREMENT OF THE ACT, NO EVIDENCE OF ANY STATEMEN T OR ORAL EVIDENCE WOULD BE ADMISSIBLE, AS BETWEEN THE PARTIES, TO ANY SUCH DOCUMENT, FOR THE PURPOSES OF CONTRADICTION OR VARIATION OF ITS TERMS. THERE HAS TO BE POSITIVE EVIDENCE ON RECORD, THE BURDEN OF WHICH IS ON THE REVENUE, TO CONCLUSIVELY ELUCIDATE THAT THE PRICE DISCLOSED IN THE SALE DEED COULD NOT BE ADOPTED FOR TAXATION PURPOSES. IN THE ABSENCE OF CREDIBLE EVIDENCE, THE ADDITION WITH RESPECT TO UNEXPLAINED CASH PAYMENT CANNOT SUSTAIN. 16. IN THE LIGHT OF ABOVE LEGAL POSITION, WE SHALL EXAMINE THE FACTS OF THE CASE. A PERUSAL OF THE RECORD WOULD SHOW THAT THERE IS NO POSITIVE EVI DENCE ON RECORD TO PROVE THAT THE PAYMENT HAS BEEN MADE IN CASH OVER AND ABOVE WHAT WAS RECOR DED IN THE SALE DEED BY SHRI M.V. PRAKASHAN TO THE ASSESSEE. THERE HAS BEEN NO RECO VERY OF CASH FROM THE PREMISES OF THE ASSESSEE. IT IS NOWHERE STATED BY THE REVENUE THAT THE ASSESSEE HAD UTILIZED THE ALLEGED CASH RECEIVED IN UNEXPLAINED INVESTMENTS. THE REVENUE HA S ONLY PROVED THAT MONEY HAD BEEN TRANSFERRED FROM THE BUYERS COMPANY TO ITS REPRESEN TATIVE SHRI M.V. PRAKASHAN AND NOT BEYOND THAT. THE BEST CASE OF THE REVENUE IS THAT THERE I S LIKELIHOOD THAT THE CASH WITHDRAWN BY SHRI M.V. PRAKASHAN WAS PAID TO THE ASSESSEE AS PART OF THE SALE CONSIDERATION. THE PROBABILITY IS NOT STRONG ENOUGH TO DISPEL A DIRECT AND A DOCUMENT ARY EVIDENCE IN THE FORM OF SALE DEED WHEREIN THE SALE CONSIDERATION HAS BEEN CLEARLY MEN TIONED. THE STATEMENT OF SHRI M.V. PRAKASHAN THAT HE PAID SALE CONSIDERATION IN CASH T O THE ASSESSEE OVER AND ABOVE THE SALE .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 10 CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED DOES NOT INSPIRE CONFIDENCE TO US AS THE SAME PERSON HAD EXECUTED ANOTHER AGREEMENT WITH THE ASSESSEE ON 06-03-2010 WHEREIN HE HAD ADMITTED THAT THE ACTUAL SALE DEEDS EXECUTED BE TWEEN THE COMPANIES (BUYER) AND THE ASSESSEE (SELLER) WERE FOR A TOTAL CONSIDERATION OF RS.55.40 LAKHS AND THE ASSESSEE WAS NOT ENTITLED TO THE DIFFERENCE IN THE AMOUNT OF RS.3.42 CRORES AND RS. 55.40 LAKHS. IN THE AGREEMENT, IT WAS FURTHER STATED THAT SHRI M.V. PRA KASHAN WOULD HIMSELF REMIT THE INCOME TAX ON THE DIFFERENTIAL AMOUNT. THE SAID AGREEMENT HAS BEEN SIGNED BEFORE THE NOTARY PUBLIC AND WAS NOT DENIED BY SHRI M.V. PRAKASHAN IN HIS STATE MENT BEFORE THE ASSESSING OFFICER. ONLY ON THE BASIS OF THE AGREEMENT DATED 27-06-2007, IT CAN NOT BE PRESUMED THAT THE ASSESSEE RECEIVED THE ALLEGED BALANCE SALE CONSIDERATION IN CASH. THE ADDITION IS ONLY MADE ON THE BASIS OF SUSPICION, SURMISES AND CONJECTURES. 17. INCOME TAX AUTHORITIES CANNOT GO BEHIND THE SALE INSTRUMENT AND REWRITE THE SAME SO AS TO SUIT THE PURPOSE OF THE REVENUE. THE ASSES SING OFFICER IN THE PRESENT CASE HAS FAILED TO CONDUCT INDEPENDENT ENQUIRY SO AS TO CONCLUSIVELY E STABLISH THAT THE CASH WAS ACTUALLY RECEIVED BY THE ASSESSEE FROM SHRI M.V. PRAKASHAN. THE CONT ENTS OF THE SALE DEED CANNOT BE VARIED ONLY AT THE INSTANCE OF SHRI M.V. PRAKASHAN WHO WAS NOT EVEN A PARTY TO THE SALE DEED. THE ASSESSING OFFICER DID NOT INDEPENDENTLY ENQUIRE THE VALUE OF THE PROPERTY CONCERNED. THE MATTER WAS NOT EVEN REFERRED TO THE VALUATION OFFIC ER BY THE ASSESSING OFFICER. IN VIEW THEREOF, THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOU NT OF SHORT TERM CAPITAL GAIN CANNOT BE SUSTAINED AND IS LIABLE TO BE DELETED WHICH THE LD . CIT(A) HAS RIGHTLY DONE SO. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 11 18. OUR FINDINGS ARE SUPPORTED BY THE JUDGMENT OF T HE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. SMT. K.C. AGNES AND ORS. (262 ITR 354) W HEREIN THE HONBLE HIGH COURT WAS PLEASED TO HOLD AS UNDER: 5. AFTER CONSIDERING THE EVIDENCE AND ON THE BASIS OF THE ASSESSMENT ORDER PASSED AGAINST PASHA, THE CASE OF THE ASSESSEE THAT THE PROPERTY WAS PURCHASED AT THE RATE OF RS. 8,000 PER CENT HAS BEE N ACCEPTED. THUS, THE TRIBUNAL ALLOWED THE APPEALS. THE SALE DEED WILL SH OW THAT THE PRICE WAS FOR RS.8,000 PER CENT WHEN THE AGREEMENT DATED MARCH 1, 1983, SHOWS THAT THE PARTIES AGREED TO PURCHASE THE PROPERTY AT RS.12,95 1 PER CENT. A RECEIPT IS ALSO RELIED ON IN THE FORM OF A LETTER DATED APRIL 2, 1983, TO SHOW THAT THE PROPERTY WAS AGREED TO BE PURCHASED AT RS.12,951 PE R CENT. WHEN THE DOCUMENT SHOWS A FIXED PRICE, THERE WILL BE A PRESU MPTION THAT IT IS THE CORRECT PRICE AGREED UPON BY THE PARTIES. IT IS TRU E THAT ON THE BASIS OF THE AGREEMENT THE SALE DEED WAS EXECUTED. BUT IT IS NO T NECESSARY THAT THE PRICE STATED IN THE AGREEMENT WILL BE THE PRICE SHOWN IN THE SALE DEED. SOMETIMES, IT MAY BE HIGHER AND SOMETIMES IT MAY BE LOWER. SOM ETIMES INTENTIONALLY A LESSER VALUE MAY BE SHOWN IN THE SALE DEED. EVEN I F IT IS ASSUMED TO BE SO, UNLESS IT IS PROVED THAT THE AGREEMENT WAS ACTED UP ON AND UNLESS THE AMOUNT STATED IN THE AGREEMENT WAS PAID FOR THE SAL E, WE CANNOT COME TO THE CONCLUSION THAT THE PRICE MENTIONED IN THE SALE DEED IS NOT CORRECT. IN THIS CASE, FURTHER IT IS FOUND THAT IN THE ASSESSME NT OF PASHA, IT WAS FINALLY FOUND THAT THE AMOUNT WAS RECEIVED ONLY AT RS.8,000 PER CENT. IT IS TAKING INTO ALL THESE MATTERS INTO CONSIDERATION THAT THE TRIBUNAL HELD THAT THE PROPERTY WAS SOLD AT THE RATE OF RS.8,000 PER CENT. THUS, THE TRIBUNAL, ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ON THE APPRECIATION OF EVIDENCE, CAME TO THE CONCLUSION THAT RS. 12,951 WAS NOT AMOUNT FOR WHICH PROPERTY WAS SOLD. ACCORDING TO US, THERE IS NO RULE THAT THE AMOUNT SHOWN IN THE RECEIPT WAS THE ACTUAL AMOUNT PAID. S O FAR AS THE OTHER QUESTIONS ARE CONCERNED, WE DO NOT FIND THAT ANY SU BSTANTIAL QUESTIONS OF LAW ARISE BECAUSE AS ALREADY STATED, THE ONLY QUESTION IN THIS CASE IS WHETHER THE AMOUNT STATED IN THE SALE DEED IS CORRECT OR NOT. ACCORDING TO US, THE AMOUNT STATED IN THE SALE DEED IS THE CORRECT AMOUN T UNLESS THERE ARE CIRCUMSTANCES TO IGNORE THE SAME. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS . P.V. KALYANASUNDARAM (282 ITR 259) HELD AS UNDER: 3. THE BURDEN OF PROVING ACTUAL CONSIDERATION IN S UCH TRANSACTION WAS THAT OF REVENUE. THE TRIBUNAL HAD GIVEN FACTUAL FINDING AND HELD AS FOLLOWS: WE FIND THAT IT IS THE UNIFORM VIEW OF THE COURTS AND ALSO HELD BY THE APEX COURT .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 12 AS REPORTED IN 131 ITR 397 THE BURDEN OF PROVING AC TUAL CONSIDERATION IN SUCH TRANSACTION IS THAT OF REVENUE. CONSIDERING TH E ENTIRE GAMUT OF THE CASE, WE FIND THAT THE REVENUE HAS FAILED TO DISCHARGE IT DUTIES AND AS HELD BY THE LD. CIT(A) INSTEAD MADE UP A CASE ON SURMICES AND C ONJECTURES WHICH CANNOT BE ALLOWED. UNDER THE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AN WE UPHOLD THE APPELL ATE ORDER IN THIS REGARD. WE ALSO FOUND THAT THE ASSESSING OFFICER DID NOT CO NDUCT ANY INDEPENDENT ENQUIRY RELATING TO THE VALUE OF THE PROPERTY PURCH ASED. HE MERELY RELIED ON THE STATEMENT GIVEN BY THE SELLER. IF HE WOULD HAV E TAKEN INDEPENDENT ENQUIRY BY REFERRING THE MATTER WITH THE VALUATION OFFICER, THE CONTROVERSY COULD HAVE BEEN AVOIDED. FAILING TO REFER THE MATT ER WAS A FATAL ONE. 4. IN VIEW OF THE FOREGOING CONCLUSIONS, WE FIND N O ERROR IN THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL AND REQUIRES NO INTER FERENCE. HENCE NO SUBSTANTIAL QUESTIONS OF LAW ARISE FOR CONSIDERATIO N OF THIS COURT. ACCORDINGLY, THE ABOVE TAX CASE IS DISMISSED. NO CO STS. THE ITAT, RAJKOT BENCH IN THE CASE OF DY. CIT VS. S HRI CHANDRAKANT V BHALARA VS. IN IT(SS)A NO. 66/RJT/2009 DATED 17 TH JUNE, 2011 HELD AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON THE EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUESTION ARISES FOR CONSIDERATION IS WHAT IS THE SALE CONSIDERATION PAI D BY THE ASSESSEE FOR PURCHASE OF PROPERTY. THE SALE CONSIDERATION/PURCH ASE PRICE IS NOTHING BUT A PRICE AGREED BETWEEN A WILLING PURCHASER AND A WILL ING SELLER. THEREFORE, WHEN A WILLING PURCHASER AND A WILLING SELLER AGREE FOR A PARTICULAR PRICE, THEN THE SALE CONSIDERATION SHALL BE THE SAID AGREED PRI CE BETWEEN THE PARTIES. THE SALE DEED HAS ALSO DISCLOSED THE AGREED PRICE BETWE EN THE PARTIES. IN VIEW OF THE COMPULSORY REGISTRATION OF THE DOCUMENT UNDER T HE REGISTRATION ACT, THE SALE DEED WAS PRESENTED FOR REGISTRATION. THE SAID REVENUE AUTHORITY WAS EMPOWERED TO COLLECT STAMP DUTY ON THE MARKET PRICE . THEREFORE, WHEN THE AGREED SALE PRICE IS LESS THAN THE MARKET PRICE AN OPTION WAS GIVEN TO THE STAMP AUTHORITY TO ESTIMATE THE MARKET VALUE OF THE PRICE AFTER MAKING LOCAL ENQUIRIES. THEREFORE, THE STAMP AUTHORITIES VALUE THE MARKET PRICE ON THE ESTIMATE BASIS AND COLLECT STAMP DUTY THEREON. MER ELY BECAUSE THE MARKET PRICE WAS DETERMINED BY THE STAMP AUTHORITIES FOR T HE PURPOSE OF COLLECTION OF STAMP DUTY IT CANNOT BE CONSTRUED THAT THE SAID MARKET VALUE DETERMINED BY THE STAMP AUTHORITIES HAS TO BE TREATED AS SALE CONSIDERATION. AS WE HAVE ALREADY DISCUSSED THE SALE CONSIDERATION IS A PRICE AGREED BETWEEN A WILLING .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 13 PURCHASER AND WILLING SELLER. IT MAY BE EITHER MORE THAN THE MARKET VALUE AND IN SOME CASES LESS THAN THE MARKET VALUE. UNDER TH E INCOME-TAX ACT, THE ASSESSING OFFICER WAS EMPOWERED TO ASSESS THE INCOM E AND COLLECT TAX THEREON. THEREFORE, THE ASSESSING OFFICER HAS TO E XAMINE INDEPENDENTLY AND FIND OUT WHAT IS THE ACTUAL PRICE AGREED BETWEEN TH E PARTIES AND WHAT WAS THE PRICE ACTUALLY PAID BY THE ASSESSEE FOR PURCHAS E OF THE PROPERTY. IN THIS CASE, THE ASSESSEE HAS DISCLOSED THE SALE CONSIDERA TION AS AGREED TO BY THE PARTIES AND NO OTHER MATERIAL IS ON RECORD TO SUGGE ST THAT THE ASSESSEE HAS RECEIVED ANYTHING MORE THAN WHAT WAS DECLARED IN TH E SALE DEED. IN SUCH A SITUATION, IN OUR OPINION, THE MARKET VALUE AS DETE RMINED BY THE STAMP AUTHORITIES CANNOT BE SUBSTITUTED IN PLACE OF SALE CONSIDERATION. THE SALE CONSIDERATION REMAINS TO A PRICE/AMOUNT AGREED TO B ETWEEN BOTH BUYER AND THE SELLER. THEREFORE, THE CIT(A) IN THE ABSENCE OF ANY OTHER MATERIAL TO JUSTIFY THAT THE ASSESSEE HAS RECEIVE ANY MONEY OVE R AND ABOVE THE SALE CONSIDERATION DECLARED IN THE SALE DEED HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. A SIMILAR DECISION WAS TA KEN BY THIS TRIBUNAL IN THE CASE OF SHRI PRAVINCHANDRA C SAVALIA (SUPRA). ACCO RDINGLY, THE ORDER OF CIT(A) IS CONFIRMED. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF CIT VS. SATINDER KUMAR (2001) 250 ITR 484, HELD THAT THE ASSESSING OFFICER IS NOT COM PETENT TO MAKE ADDITION IN THE ABSENCE OF CREDIBLE EVIDENCE IN RESPECT OF INVESTMENT MADE OVE R AND ABOVE CONSIDERATION RECORDED IN THE SALE DEED. IN THE CASE OF V. RAMCHANDRA CONSTRUCTION (P) LTD. VS. ACIT (2011) 131 ITD 71 TM, IT HAS BEEN HELD THAT THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT WILL NOT AFFECT EVIDENCE ON RECORD, IN THE FORM OF AGREEMENT TO SELL AND POWER OF ATTORNEY EXECUTED BY THE ASSESSEE. THE STATEMENT CAN BE AN AFTERTHOUGHT. THE ORAL EVIDENC ES HAVE TO BE LOOKED INTO WHEN WRITTEN EVIDENCES ARE NOT AVAILABLE ON RECORD AND ORAL EVID ENCES CAN BE ACCEPTED ONLY WHEN THEY ARE CORROBORATED BY THE WRITTEN EVIDENCES. 19. IN THE PRESENT CASE, SHRI M.V. PRAKASHAN WAS NO T EVEN CROSS EXAMINED BY THE ASSESSEE DESPITE HIS REQUEST TO DO SO. THE EVIDENCE COLLECTE D IN THE FORM OF STATEMENT UNDER SECTION 131 .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 14 BEHIND THE BACK OF THE ASSESSEE CANNOT BE USED AGAI NST HIM TO HIS DETRIMENT IN THE ABSENCE OF CROSS EXAMINATION OF THE WITNESS. RELIANCE IS PLAC ED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD. (288 ITR 345) WHEREIN IT WAS HELD THAT THE STATEMENT OF A WITNESS WHICH HAS AN EVIDENTIARY VAL UE AND THE SAME BEING NOT TESTED UNDER CROSS EXAMINATION BY THE ASSESSEE COULD NOT BE RELI ED UPON BY THE REVENUE TO THE DETRIMENT OF THE ASSESSEE. THE RELEVANT FINDING OF THE HONBLE D ELHI HIGH COURT IN THE ABOVE CITED CASE IS AS UNDER: 5. THE TRIBUNAL HELD THAT THE ASSESSING OFFICER WA S FUNCTIONING AS A QUASI JUDICIAL AUTHORITY AND WAS UNDER AN OBLIGATION TO A DHERE TO THE PRINCIPLES OF NATURAL JUSTICE. SEVERAL REQUESTS WERE MADE BY THE ASSESSED, BUT MANOJ AGGARWAL WAS NOT MADE AVAILABLE FOR CROSS-EXAMINATI ON. ON THIS BASIS, THE TRIBUNAL SET ASIDE THE BLOCK ASSESSMENT AND THAT IS WHY THE REVENUE IS BEFORE US IN APPEAL U/S. 260A OF THE ACT. 6. LEARNED COUNSEL FOR THE REVENUE RELIED UPON O NE-UP SHARES AND STOCK BROKERS P,. LTD. V. R.R. SINGH, CIT TO CONTEND THAT THE STATEMENT OF MANOJ AGGARWAL HAD EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSED WITHOUT IT BEING T ESTED UNDER CROSS EXAMINATION. IN THE ABSENCE OF THE STATEMENT BEING TESTED, IT CANNOT BE SAID THAT IT SHOULD BELIEVED COMPLETELY TO THE PREJUDICE OF THE ASSESSED. UNDER THE CIRCUMSTANCES, WE DO NOT THIN THAT THE JUDGMENT RELIED UPON BY THE LEARNED COUNSEL CARRIES HIM ANY FURTHER. 7. WE ARE OF THE OPINION THAT THE TRIBUNAL WAS RI GHT IN ITS VIEW THAT IN THE ABSENCE OF MANOJ AGGARWAL BEING MADE AVAILABLE FOR CROSS-EXAMINATION, DESPITE REPEATED REQUEST BY THE ASSESSED, HIS STATE MENT COULD NOT BE RELIED UPON TO HIS DETRIMENT. 20. ACCORDINGLY, GROUND NOS. 1 TO 4 RAISED BY THE REVENUE ARE DISMISSED AND ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 15 21. THE ASSESSEE HAS CHALLENGED THE ORDER OF T HE LD. CIT(A) BY WAY OF CROSS OBJECTION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADV ANCE PAID BY THE COMPANY IN WHICH THE ASSESSEE IS MANAGING DIRECTOR AND IS HOLDING MORE T HAN 50% OF SHARES CANNOT COME WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT AND THEREFO RE, SECTION 2(22)(E) IS NOT ATTRACTED AND THE ADDITION IS LIABLE TO BE DELETED. THE LD. DR, ON T HE OTHER HAND RELIED ON THE DECISION OF THE LD. CIT(A) TO ADVANCE HIS SUBMISSIONS. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE FACTS OF THE CASE AND THE JUDGMENTS RELIED UPON BY THE ASSESSEE. WE FIND NO MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE. THE ASSESSEE HAS UTILIZED THE LOAN/ADVAN CE FOR PURCHASING THE LAND IN HIS OWN NAME. THE FUNDS HAVE BEEN PAID BY THE COMPANY IN WHICH TH E ASSESSEE IS HOLDING MORE THAN 50% SHARES. THE PAYMENT IS NOT MADE FOR THE BUSINESS P URPOSE OF THE COMPANY AND IS UTILIZED FOR THE BENEFIT OF THE ASSESSEE. IN VIEW THEREOF, SECT ION 2(22)(E) IS ATTRACTED AND THE ADDITION OF RS.35 LAKHS AS DEEMED DIVIDEND IS CONFIRMED. ACCO RDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THUS ALL THE GROUNDS RAISED B Y THE ASSESSEE IN THE CROSS OBJECTION ARE DISMISSED. 23. IN THE RESULT THE APPEAL FILED BY THE REV ENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED I N THE OPEN COURT ON 12-10-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12TH OCTOBER, 2015 .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 16 GJ COPY TO: 1. SHRI A.M. SANOOJ, M/S. ZAHI TYRES (INDIA)(P) LT D., NO.403, PIONEER TOWERS, MARINE DRIVE, ERNAKULAM, KOCHI-31. 2. THE JOINT COMMISSIONER OF INCOME-TAX (OSD), CIRC LE-4(2), KOCHI. 3. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-4(2), RANGE-4, KOCHI. 4. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I. 5. THE COMMISSIONER OF INCOME-TAX,KOCHI 6. D.R., I.T.A.T.,COCHIN. 7. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A .T., COCHIN .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 17 .T.A. NO. 583/COCH/2011 & C.O. NO.39/COCH/2011 18