Brij Mahajan, New Delhi V. ACIT, New Delhi

ITA 608/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2906 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Unexplained investment; Value adopted by valuation officer; Document seized; Corroborative evidences; Valuation report; Documents seized
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI A BENCH , NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 608 /D EL /20 1 2 [ ASSESSMENT YEAR : 20 07 - 08 ] SHRI BRIJ MAHAJAN VS. THE A.C.I.T 2 , AVENUE CASSIA WESTEND CENTRAL CIRCLE - 2 GREENS, RAJOKARI NEW DELHI NEW DELHI PAN : AKDPM 1320 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 2 9 . 1 1 . 201 7 DATE OF PRONOUNCEMENT : 27 . 1 2 .201 7 ASSESSEE BY : SHRI SALIL KAPOOR, ADV MS. SOUMYA SINGH, ADV REVENUE BY : SMT. APARNA KARAN - CIT [DR] ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - III DATED 21.11.2011 FOR A.Y 2007 - 08. 2 ITA NO. 608/DEL/20012 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THAT THE LEARNED CIT(A) ERRED IN LAW AND AS WELL AS ON FACTS IN DISMISSING THE APPEAL AS PER GROUND OF APPEAL NO. 1, BY UPHOLDING THE ACTION OF THE LD. AO IN MAKING ADDITION OF RS. 6,98,00,000/ - TO THE INCOME OF THE APPELLANT, ON ACCOUNT OF UNACCOUNTED I NVESTMENT, IN PURCHASING 50% SHAREHOLDING OF M/S BLUEBIRD SOFTWARE PRIVATE LIMITED, A COMPANY WHICH OWNS AND POSSESS THE ONLY IMMOVABLE ASSET, I.E. INDUSTRIAL LAND AND INDUSTRIAL SHED LOCATED AT 391, UDYOG VIHAR, PHASE - III, GURGAON, ON THE BASIS OF UNSIGN ED AGREEMENT ON PLAIN PAPER BEARING DATED 7.3.2007, SHOWING CONSIDERATION OF RS. 21,96,00,000/ - WHICH IS FOUND AND SEIZED DURING THE COURSE OF SEARCH AS PAGE NO. 64 - 70 OF ANNEXURE - AA - 2, PARTY G - 2 OF DATED 26 - 11 - 2008, AND BY NOT CONSIDERING: (I) THE AGRE EMENT DATED 15.6.2007 WHICH IS PREPARED ON STAMP PAPER, DULY EXECUTED AND SIGNED BY ALL THE PARTIES AND DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE APPELLANT, SHOWING CONSIDERATION OF RS. 8,00,00,000/ - IN RESPECT OF ABOVE REFERRED INDUSTRIAL PROPERT Y, WHICH WAS ALSO FOUND AND SEIZED BY THE REVENUE IN SEARCH ACTION U/S 132 OF THE ACT I.E. BEARING PAGE NO. 94 - 99 OF ANNEXURE - A - 6, PARTY G - 2, DATED 6 - 11 - 2008, AND; (II) THE ANOTHER AGREEMENT DATED JUNE, 2007 WHICH IS EXECUTED AND SIGNED PLAIN PAPER AND ALSO SHOWING 3 ITA NO. 608/DEL/20012 CONSIDERATION OF RS. 8,00,00,000/ - IN RESPECT OF THE ABOVE REFERRED INDUSTRIAL PROPERTY, AND FOUND AND SEIZED IN SEARCH ACTION U/S 132 OF THE ACT I.E. BEARING PAGE NO. 13 - 17 OF ANNEXURE - A - 6, PARTY G - 2, DATED 6 - 11 - 2008. 2. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, VARY, MODIFY OR OTHERWISE AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY DISPOSED OF. 3. BRIEFLY STATED, THE FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE THAT DURING THE COURSE OF SEARCH AT THE ASSESSEE GROUP ON 26.11.2008, AT THE REGISTERED OFFICE OF THE COMPANIES OF THE NIMITAYA GROUP I.E. 2A, AVENUE CASSIA, WES TEND GREENS, RAJOKARI, NEW DELHI, AN UNSIGNED AGREEMENT TO SELL WAS FOUND THAT WAS ANNEXURISED AS PAGES 64 - 70 OF ANNEXURE - AA2 OF PARTY G - 2. AS PER THIS AGREEMENT, SHRI VIRENDER KUMAR MITTAL, SHRI RAVINDER KUMAR MITTAL AND M/S BLUEBIRD SOFTWARE PRIVATE LI MITED (SELLERS) HAVE AGREED TO SELL THE SHAREHOLDING IN M/S BLUE BIRD SOFTWARE PRIVATE LIMITED ALONGWITH INDUSTRIAL LAND BARING PLOT NO. 391, UDYOG VIHAR, PHASE - III, GURGAON TO SHRI SANJEEV MAHAJAN AND M/S NIMITAYA PROMOTERS PVT. LTD. (BUYERS) FOR A TOTAL CONSIDERATION OF RS. 21,96,00,000/ - . 4 ITA NO. 608/DEL/20012 3. DURING THE COURSE OF SEARCH, A SIGNED AGREEMENT TO SELL DATED 15.06.2007 WAS FOUND ANNEXURISED AS PAGES 13 - 17 OF ANNEXURE A - 6, PARTY G - 2. AS PER THIS AGREEMENT, SHRI VIRENDER KUMAR MITTAL AND SHRI RAVINDER KUMAR MITTAL (SELLERS) GAVE AGREED TO SELL 2,10,000 SHARES OF M/S BLUEBIRD SOFTWARE PRIVATE LIMITED ALONGWITH THE FACTORY PREMISES COMPRISING 3970 SQUARE METER OF INDUSTRIAL LAND BEARING PLOT NO. 391, UDYOG VIHAR, PHASE - III, GURGAON TO SHRI SANJEEV MAHAJAN AND SHRI BRIJ MOHAN MAHAJAN (BUYERS) FOR TOTAL SALE CONSIDERATION OF RS. 8,00,00,000/ - . HAVING FOUND TWO DIFFERENT VALUES IN TWO DIFFERENT AGREEMENT S WITH REGARD TO THE SAME PROPERTY, THE AO ISSUED THE FOLLOWING SHOW CAUSE NOTICE ON 14.12.2010: DURING THE CO URSE OF SEARCH, A SIGNED AGREEMENT TO SELL WAS FOUND ANNEXURISED AS PAGES 13 - 17 OF ANNEXURE A - 6, PARTY G - 2. AS PER THIS AGREEMENT, SHRI VIRENDER KUMAR MITTAL AND SHRI RAVINDER KUMAR MITTAL (SELLERS) GAVE AGREED TO SELL 2,10,000 SHARES OF M/S BLUEBIRD SOFTW ARE PRIVATE LIMITED ALONGWITH THE FACTORY PREMISES COMPRISING 3970 SQUARE METER OF INDUSTRIAL LAND BEARING PLOT NO. 391, UDYOG VIHAR, PHASE - III, GURGAON TO SHRI SANJEEV MAHAJAN AND SHRI BRIJ MOHAN MAHAJAN (BUYERS) FOR TOTAL SALE CONSIDERATION OF RS. 8,00,0 0,000/ - . THERE WAS ANOTHER SIGNED AGREEMENT TO SELL WHICH HAS BEEN ANNEXED AT PAGES 94 TO 99 OF ANNEXUREA - 6, PARTY G - 2. 5 ITA NO. 608/DEL/20012 HOWEVER, DURING THE COURSE OF SEARCH & SEIZURE OPERATIONS AT THE REGISTERED OFFICE OF THE COMPANIES OF THE NIMITAYA GROUP I.E. 2A, AV ENUE CASSIA, WESTEND GREENS, RAJOKARI, NEW DELHI, AN ANOTHER UNSIGNED AGREEMENT TO SELL WAS FOUND ANNEXURISED AS PAGES 64 - 70 OF ANNEXURE - AA2 OF PARTY G - 2. AS PER THIS AGREEMENT, SHRI VIRENDER KUMAR MITTAL, SHRI RAVINDER KUMAR MITTAL AND M/S BLUEBIRD SOFT WARE PRIVATE LIMITED (SELLERS) HAVE AGREED TO SELL THE SHAREHOLDING IN M/S BLUE BIRD SOFTWARE PRIVATE LIMITED ALONGWITH INDUSTRIAL LAND BARING PLOT NO. 391, UDYOG VIHAR, PHASE - III, GURGAON TO SHRI SANJEEV MAHAJAN AND M/S NIMITAYA PROMOTERS PVT. LTD. (BUYER S) FOR A TOTAL CONSIDERATION OF RS. 21,96,00,000/ - . IN FACT OUT OF THE TOTAL SHARE HOLDING OF 2,10,000, SHRI B. M. MAHAJAN HAS PURCHASED 1,05,000 SHARES AND SHRI SANJEEV MAHAJAN HAS PURCHASED 105000 SHARES I.E. 50% EACH. ACCORDINGLY ON MONEY PAYMENT OF R S. 13.96 CRORES IS RECEIVED IN TO TWO PART WHICH COMES TO RS. 6.98 CRORE IN EACH HAND. IN VIEW OF THE ABOVE FACT, YOU ARE HEREBY REQUEST TO EXPLAIN AS TO WHY AN AMOUNT OF RS. 6.98 CRORES SHOULD NOT BE TREATED AS UNACCOUNTED INVESTMENT FOR THE YEAR UNDER CONSIDERATION. 4. THE ASSESSEE VIDE ITS REPLY DATED 27.12.2010 TO THE ABOVE SHOW CAUSE NOTICE STATED THAT THE AGREEMENT OF RS. 21.96 CRORE IS AN UNSIGNED DOCUMENT AND IT WAS NOT CONFRONTED BY THE SEARCH TEAM AT 6 ITA NO. 608/DEL/20012 THE TIME OF SEARCH IN THE OFFICE PREMISES. SO, THE ASSESSEE IS NOT AWARE ABOUT SUCH DOCUMENT AND REITERATED THAT THE PARTIES HAVE ACTED ON THE BASIS OF SIGNED AGREEMENT. THE ASSESSEE ALSO STATED THAT THE VALUATION OF THIS PROPERTY WAS REFERRED TO THE DEPAR TMENTAL VALUATION OFFICER (DVO) AND THE DEPARTMENT VALUER HAS VALUED THIS PROPERTY AT RS. 7.11 CRORE, WHICH IS MUCH LESS THAN THE AMOUNT ALLEGED TO HAVE BEEN SHOWN IN THE UNSIGNED AND UNDATED AGREEMENT TO SELL TOGETHER WITH CERTAIN CASES RELIED ON BY THE A SSESSEE. THUS, UNDATED AND UNSIGNED AGREEMENT CONTAINING SOME EXTRA ORDINARY VALUE HAS NO EFFECT. 5. THE AO FURTHER OBSERVED IN PARA 13 OF THE ORDER THAT THE PLEAS TAKEN BY THE ASSESSEE IN HIS LETTER DATED 27.12.2010 WERE NEVER TAKEN DURING THE COURSE OF POST SEARCH INVESTIGATION OR ASSESSMENT PROCEEDINGS AS WELL AS NO DOCUMENTARY EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM AND PLEA TAKEN BY THE ASSESSEE WAS REJECTED BY THE AO. 6. AO IN PARA 25 OF THE ORDER OBSERVED THAT KEEPING IN VIEW THE FACT THAT THE INTENTION OF THE ERSTWHILE SHAREHOLDERS OF THE COMPANY WAS TO SELL BOTH, SHARES HELD BY THEM IN THE COMPANY AND TRANSFER OF ASSET HELD BY THE COMPANY. IN VIEW OF THE OVERALL CIRCUMS TANCES AND FACTS OF 7 ITA NO. 608/DEL/20012 THE CASE, IT IS PROVED THAT THIS IS NOT A SIMPLE SALE OF SHARES BUT THE SALE OF PROPERTY IN THE FORM OF TRANSFER OF ENTIRE SHARE CAPITAL OF THE COMPANY, AND CONCLUDED IN PARA 28 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SIMPLY FURNI SHED A GENERAL REPLY AND WHICH IS APPARENTLY UNSATISFACTORY. THE DOCUMENT HAS BEEN SEIZED FROM THE ASSESSEES OWN OFFICE PREMISES. AS PER SECTION 132(4A) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' , THERE IS LEGAL PRESUMPTION THAT THE DOCUMENTS BELONG TO THE ASSESSEE AND THE CONTENTS THEREOF ARE TRUE. THE ASSESSEE COULD NOT REBUT THE PRESUMPTION CAST UNDER LAW. THEREFORE, IN ABSENCE OF ANY JUSTIFIED REPLY, THE PARTICULARS MENTIONED IN THE SAID SEIZED DOCUMENTS ARE CONSIDERED TO BE TRUE . HOWEVER, CONSIDERING THE ACCOUNTED PAYMENT SHOWN IN THE AGREEMENT, THE AMOUNT OF RS. 13.96 CRORE IS CONSIDERED TO BE PAYMENT MADE OUTSIDE BOOKS OF ACCOUNT DURING THE YEAR. CONSIDERING THE DOCUMENT TO BE ABSOLUTELY TRUE, IT IS INFERRED THAT THE TOTAL AMOU NT OF RS. 13.96 CRORE IS PAID OUTSIDE THE BOOKS OF ACCOUNTS. THEREFORE, THE SAID AMOUNT OF RS. 13.96 CRORE IS TAKEN TO BE UNDISCLOSED INCOME OUTSIDE THE BOOKS OF ACCOUNTS. BEING 50% SHARE OF RS. 6,98,00,000/ - IS ADDED TO THE INCOME OF THE ASSESS E E AS UNACC OUNTED INVESTMENT FOR THE YEAR UNDER CONSIDERATION. BEING AGGRIEVED WITH THE ADDITION OF THE SAID AMOUNT TO 8 ITA NO. 608/DEL/20012 THE RETURNED INCOME, THE ASSESSEE PREFERRED THE APPEAL BEFORE THE CIT(A) WHO UPHELD THE ORDER OF THE AO. 7, THE LD. AR ARGUED THAT THE AO AND CIT) A) HAS IGNORED THE DOCUMENTARY EVIDENCES AND OTHER RELATIVE CORROBORATIVE EVIDENCES PRODUCED DURING THE ASSESSMENT AND THE APPELLATE PROCEEDINGS AND HAS ERRONEOUSLY HELD IN ORDER THAT THE APPELLANT HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SUBSTANTIATE ITS CLAIM. THE CIT (A) HAS MISLED HIMSELF WITH THE PROPOSITION THAT THE COMPANY HAS SECURED A LOAN OF RS. 30 CRORE FROM OBC, INDUSTRIAL FINANCE BRANCH. THE LEARNED COUNSEL OF THE APPELLANT HAS DRAWN OUR ATTENTION TO THE PAPER BOOK AND DOCUMENTS FILED BEFORE TH E LD. CIT(A) AS EVIDENCE AGAINST THE IMPUGNED ADDITION OF RS. 6,98,00,000/ - , AND STATED THAT THREE DIFFERENT DOCUMENTS WERE FOUND DURING SEARCH AND ALL THESE THREE DOCUMENTS MENTION THE SALE CONSIDERATION OF 8 CR AND ALL THE THREE DOCUMENTS ARE DULY SIGNED , WHICH ALSO INCL U DE MOU SIGNED MUCH BEFORE THE DATE. IN RESPECT OF UNSIGNED DOCUMENT HE SUBMITTED THAT THE CASE OF ASSESSEE HAS BEEN ALL ALONG THAT IT DID NOT BELONG TO THE ASSESSEE AND IS NOT AWARE HOW IT CAME IN THE HANDS OF INCOME TAX AUTHORIT I ES. ACCO RDING TO HIM THERE IS ENOUGH EVIDENCE ON RECORD TO SHOW THAT THE VALUE SHOWN IN THE SIGNED DOCUMENTS IS THE SALE 9 ITA NO. 608/DEL/20012 CONSIDERATION BETWEEN THE PARTIES. ACCORDING TO HIM THE PRESUMPTION U/S 132(4A) IS A REBUTTABLE PRESUMPTION AND THE ASSESSEE HAS BEEN ABLE TO P RODUCE ENOUGH EVIDENCE TO REBUT THE SAME. THE ASSESSEE FURTHER SUBMITTED THAT THE UNSIGNED DOCUMENT ALLEGED TO BE FOUND AS A RESULT OF SEARCH ACTION IS A AVAILABLE FOR TESTING ITS VERACITY. BEFORE DRAWING ANY ADVERSE INFERENCE THE SAME IS REQUIRED TO BE P ROVED WITH SURROUNDING CIRCUMSTANCES. 8. OUR A TTENTION WAS INVITED TO PAGE 10 OF THE APPEAL ORDER AND APPELLANT CONTESTED THAT THE PROPERTY PURCHASED BY THE SHAREHOLDERS BY WAY OF TAKEOVER OF OWNERSHIP AND MANAGEMENT CONTROL OF THE ASSESSEE COMPANY, WAS REFERRED BY THE AO TO THE DEPARTMENTAL VALUATION OFFICER [DVO] ON 18.6.2010 AT PAGES 19 - 22 OF PAPER BOOK, WHO HAS VALUED THE PROPERTY AT RS. 7.11 CRORE VIDE HIS REPORT DATED 21.07.2010. OUR ATTENTION WAS FURTHER DRAWN TO THE PAGE 21 UNDER THE HEAD POINT TO BE NOTED WHERE THE AO INFORMED THE VALUER IN ADVANCE THAT AN UNSIGNED AGREEMENT HAVING CONSIDERATION OF RS. 21.96 CRORE HAS BEEN FOUND DURING THE COURSE OF SEARCH. THUS, THE DVO HAS VALUED THE PROPERTY VIDE HIS REPORT DATED 21.07.2010 AT RS. 7.11 CRORE AFTER HAVING THE COMPLETE KNOWLEDGE OF THE UNSIGNED AGREEMENT. THE COUNSEL OF THE APPELLANT FURTHER CONTENDED THAT IT CANNOT BE SAID THAT 10 ITA NO. 608/DEL/20012 THE DVO DID NOT APPLY HIS MIND TO THE SPECIAL INSTRUCTIONS GIVEN BY AO TO THE DVO AS THE SAME IS APPEARING AS ANNEXUR E - A TO THE VALUATION REPORT WHICH IS REPRODUCED AS UNDER: 1. ANOTHER AGREEMENT TO SELL WAS FOUND AND SEIZED DURING THE S EARCH OPERATION VIDE WHICH SHRI VIRENDER KUMAR MITTAL ,SHRI RAVINDER KUMAR MITTAL AND M/S BLUEBIRD SOFTWARE PVT LTD HAVE AGREED TO SELL THE SHAREHOLDING IN M/S BLUEBIRD SOFTWARE PVT. LTD. ALONGWITH INDUSTRIAL LAND BEARING PLOT NO. 391 UDYOG VIHAR, PHASE III, GURGAON TO SHRI SANJEEV MAHAJAN AND M/S NIMITAYA PROMOTERS PVT LTD(BUYERS) FOR A TOTAL SALE CONSIDERATION OF RS. 21,96,00,000/ - OUT OF THIS TOTAL CONSIDERATION, A SUM OF RS. 1,40,00,000/ - HAS BEEN MENTIONED AS PAID VIDE TWO CHEQUES BEARING NO. 480674 AND 480683 DATED 21 - 02 - 2007 AND 06 - 03 - 2007 FOR RS. 1,00,00,000/ - AND RS. 40,00,000/ - RESPECTIVELY DRAWN ON PUNJAB NATIONAL BANK, BHIKAJI CAMA P LAKHS E, NEW DELHI. THE BALANCE AMOUNT OF RS. 20, 56, 00,000/ - WAS AGREED TO BE PAID ON OR BEFORE 07 - 06 - 2007. BOTHE THESE CHEQUES HAVE BEEN ISSUED BY M/S NIMITAYA PROMOTERS PVT LTD TO M/S BLUEBIRD SOFTWARE PVT LTD AND HAVE BEEN DULY DEBITED TO THE BANK ACCOUNT. 9. THE LD. AR FURTHER CONTENDED THAT THE DVO REPORT OBTAINED BY THE AO FROM ITS OWN RESOURCES CLEARLY DEMOLISHED THE CONSIDERATION CONTAINED IN THE UNSIGNED AGREEMENT WHICH IS THE BASIS OF IMPUGNED ADDITION. IT IS FU RTHER CONTENDED THAT THE AO HAS NOT MENTIONED ANY REASON THAT WHY HE IS NOT CONSIDERING THE DVO REPORT OR WHY HE IS 11 ITA NO. 608/DEL/20012 REJECTING THE SAME. IT WAS FURTHER CONTENDED THAT WHILE DISPOSING OF THE APPEAL, EVEN THE CIT(A) FAILED TO GIVE ANY COGENT REASON THAT WHY H E IS UPHOLDING THE ORDER OF THE AO IGNORING THIS DVO REPORT. THE LD. AR FURTHER CONTENDED AND DR EW OUR ATTENTION TO THE PAGE NO. 61 - 63A OF THE PAPER BOOKS WHICH ARE THE ASSESSMENT ORDERS OF THE SELLERS AND IT WAS SHOWN THAT NO ADDITION WITH REFERENCE TO T HIS ALLEGED UNACCOUNTED INVESTMENT. THE CAPITAL GAIN ON THE BASIS OF SIGNED DOCUMENTS IS DULY DECLARED BY THE SELLERS AND ACCEPTED BY THE AO. THE ASSESSMENT MADE IN THE HANDS OF THE SELLERS IS ALSO SEARCH ASSESSMENT MADE IN THE CENTRAL CIRCLE. IT WAS CONT ENDED THAT THE LD. CIT(A) HAS FAILED TO ADDRESS THIS ARGUMENT AS WELL WHILE UPHOLDING OF THE ORDER OF THE AO. 10. THE LD. AR FURTHER DREW OUR ATTENTION TO PARA 3 AT PAGE 22 OF THE APPEAL ORDER AND STATED THAT THE LAND ALLOTMENT RATE OF HSIIDC IN JUNE 2007 WAS AROUND RS. 12,500/ - PER SQUARE METER WHEREAS AS PER THE UNSIGNED AGREEMENT THIS VALUE COMES AT RS. 53,930/ - PER SQUARE METER WHICH SHOWS THAT IT I S NOT REALISTIC. THE LD. AR DREW OUR ATTENTION TO ANOTHER DOCUMENT PAGE 84 - 94 OF PAPER BOOK WHICH IS COP Y OF REGISTERED SALE DEED DATED 9.01.2007 WHICH RELATES TO PLOT ADMEASURING 487.50 SQUARE METER BEARING NO. 444, UDYOG VIHAR PHASE - III, GURGAON WHICH WAS SOLD FOR RS. 1,60,00,000/ - . IT WAS CONTENDED 12 ITA NO. 608/DEL/20012 THAT THE PROPERTY IN QUESTION IS 391 WHICH IS MUCH HIGHE R IN SIZE OF LAND AND IT IS A MARKET NORM THAT THE PLOT OF A SMALLER SIZE CARRIES A HIGHER VALUE THAN THE LARGE SIZE PLOT. THIS CONTENTION WAS ALSO MADE BEFORE LEARNED CIT (A) AS EVIDENT FROM PAGE 24 OF APPEAL ORDER AND THE SAME WAS IGNORED BY THE LEARNED COMMISSIONER OF INCOME TAX - APPEALS WHILE UPHOLDING THE ORDER OF THE AO. THIS FACT PROVE S THE RATE OF PURCHASE CONSIDERATION IN THE SIGNED AGREEMENT IS IN CONSONANCE WITH THE GOING RATE AT THAT TIME IN THE MARKET. 11. OUR ATTENTION WAS ALSO DRAWN TO THE B ANK LOAN SANCTION LETTER ISSUED BY OBC AND P LAC ED AT PAGES 95 - 103 WHICH IS OF DATED 16.08.2007 AND SHOWN PAGE 97 WITH REGARD TO PURPOSE OF LOAN WHICH STATE THAT THE PROJECT COST IS RS. 53.53 CRORE AND TO PART FUND THE PROJECT, THE BANK HAD SANCTIONED A LOA N OF RS. 30 CRORE. THUS, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MISGUIDED HIMSELF THAT PLOT ITSELF WAS CAPABLE FOR SECURING LOAN OF RS. 30 CRORE. FACTUAL POSITION IS THAT LOAN OF RS. 30 CRORE WAS SANCTIONED TO PART FUND THE PROJECT COST 53.53 CRO RE FOR THE PROPOSED BUILDING. THUS, THE CIT(A) ERRED IN READING THE SANCTION LETTER IN RIGHT PERSPECTIVE BEFORE UPHOLDING THE ORDER OF THE AO. HE FURTHER STATED THAT 43.96% WAS THE MARGIN TO BE FUNDED BY THE ASSESSEE OF THE TOTAL PROJECT COST WHICH COME TO ABOUT 23 CR. THE CONTRIBUTION OF THE 13 ITA NO. 608/DEL/20012 ASSESSEE WAS IN THE SHAPE OF 8 CR LAND, 6 CR EQUITY AND 9 CR UNSECURED LOANS. HE FURTHER SUBMITTED THAT THE SAID PROPERTY WAS PURCHASED BY BLUE BIRD SOFTWARE PVT LTD FROM SHERWOOD PRODUCTS P VT ON 1.9.2006 FOR 6.80CR A ND THIS PURCHASE VALUE IS ALSO ACCEPTED U/S 153A ASSESSMENT PROCEEDINGS IN THE HANDS OF BLUE BIRD SOFTWARE WHICH WAS ALSO SUBJECT TO SEARCH. HENCE THE VALUE COULD NOT HAVE JUMPED TO 21.96 CRS ON 7.3.2007 WHICH IS DATE OF ALLEGED UNSIGNED DOCUMENT. THIS ALS O SUPPORT S THE CONTENTION OF THE ASSESSEE THAT SALE CONSIDERATION OF 8 CR IS CORRECT. 12. IN SUPPORT OF HIS ARGUMENTS THAT PRESUMPTION U/S 132 (4A) IS REBUTTABLE PRESUMPTION HE RELIED ON THE FOLLOWING CASE LAW A . ITO VS VED PRAKASH CHOUDHARY 305 ITR 245 (DELHI) B . M.M.FINANCERS (P) LTD VS DCIT 17 SOT 5 (CHENNAI) ITAT C . ACIT VS S. PREETHA ITA NOS 1313 TO 1319/MDS/2012 D . ACIT VS RADHESHYAM PODDAR 41 ITD 449 (CAL ) ITAT 13. ON THE BASIS OF ABOVE ARGUMENTS THE CASE OF THE ASSESSEE IS THAT THE AO HAS MA DE THE ADDITION ONLY ON THE BASIS OF UNSIGNED DOCUMENT WITHOUT TESTING THE VERACITY OF THE SAME EVEN WITH THE DVO REPORT WHICH WAS OBTAINED BY HIM AFTER MAKING THE DVO AWARE THAT AN 14 ITA NO. 608/DEL/20012 UNSIGNED AGREEMENT OF VALUE OF RS. 21.96 CRORE IS FOUND DURING THE COURSE OF SEARCH. IT WAS CONTENDED THAT EVEN THE DVO ITSELF HAS DISPROVE THE CONTENTION OF THE AO AND THE UNSIGNED DOCUMENT AS EVIDENT FROM RECORD. THIS IS THE REASON THAT AO DELIBERATELY DID NOT REFER THE DVO REPORT IN THE IMPUGNED ASSESSMENT ORDER AND PRAYED FO R DELETION OF THE IMPUGNED ADDITION OF RS. 698 LAKH S. 14. ON THE OTHER HAND, THE LD DR ARGUED THAT THE DOCUMENT WAS FOUND AS A RESULT OF SEARCH AND THE APPELLANT FAILED TO DISPROVE THE DOCUMENT IN ASSESSMENT PROCEEDINGS. IT WAS FURTHER CONTENDED BY THE L EARNED DR THAT DVO REPORT IS MERELY AN ESTIMATE AND CANNOT BE SACROSANCT TO DISPROVE THE MATERIAL DOCUMENT WHICH IS FOUND AS A RESULT OF SEARCH ACTION. THE ONUS TO DISPROVE THE SEIZED DOCUMENT IS ON THE APPELLANT AND NOT ON THE DEPARTMENT AND HE RELIED ON THE CONTENTS OF THE ASSESSMENT ORDER. SHE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT IT IS A MATTER OF RECORD THAT THE UNSIGNED AGREEMENT TO SELL WAS FOUND AS A RESULT OF SEARCH BUT IT IS ALSO A MATTER OF FACT, AS SUBMITTED BY THE ASSESSEE AND NOT DENIED 15 ITA NO. 608/DEL/20012 BY THE DR, THAT NO QUESTION WAS ASKED BY THE SEARCH TEAM ON THIS DOCUMENT DURING THE COURSE OF SEARCH. THE CONTENTION OF THE LEARNED DR THA T THE DOCUMENT SEIZED IS SUFFICIENT TO MAKE ADDITION OF UNACCOUNTED INVESTMENT IS CONTRARY TO THE PROVISIONS OF LAW AS THE DOCUMENT FOUND DURING THE COURSE OF SEARCH IS NOT REQUIRED TO BE PROVED OR DISPROVED BY BOTH, ASSESSEE AS WELL AS THE DEPARTMENT AS O NLY PRESUMPTION CAN BE MADE U/S 132(4A) OF THE ACT WITH REGARD TO A SEIZED DOCUMENT. THIS PRESUMPTION IS A REBUTTABLE PRESUMPTION. HOWEVER, THE FIRST ONUS TO DISPROVE SUCH DOCUMENT IS ON THE ASSESSEE. IN THE PRESENT CASE WE NOTE THAT THE AO IN ORDER TO VER IFY THE VERACITY OF THE DOCUMENT, REFERRED THE VALUATION OF THE PROPERTY IN QUESTION TO THE DVO WITH SPECIFIC REMARKS THAT A DOCUMENT SHOWING CONSIDERATION OF RS. 21.96 CRORE HAS BEEN FOUND DURING THE COURSE OF SEARCH. THE DVO AFTER HAVING THE KNOWLEDGE OF THE SEIZED DOCUMENT SHOWING VALUE OF RS. 21.96 CRORE VALUED THE PROPERTY AT RS. 7.11 CRORE WITH SUPPORTING EVIDENCE. STRANGELY, THE AO AFTER CARRYING OUT THIS EXERCISE OF VALUATION DURING THE ASSESSMENT PROCEEDINGS DID NOT REFER THE SAME IN ASSESSMENT ORD ER WHILE MAKING THE ADDITION OF RS. 698 LAKH S. WE HAVE ALSO GONE THROUGH THE DOCUMENT LIKE DVO REPORT, SALE DEED OF ADJACENT PROPERTY, HSIIDC RATE OF ALLOTMENT DOCUMENT AND OTHER DOCUMENTS AND FIND THAT THE LAND PRICES OF THE PROPERTY, EXCLUDING CONSTRUCTI ON WERE 16 ITA NO. 608/DEL/20012 IN THE VICINITY OF THE AMOUNT PAID BY THE APPELLANT TO BLUEBIRD SOFTWARE PRIVATE LIMITED AND ITS SHAREHOLDERS. IT IS ALSO A MATTER OF FACT AND RECORD THE SALE PRICE ON THE BASIS OF SIGNED DOCUMENTS IS ACCEPTED BY THE DEPARTMENT IN THE HANDS OF SEL LERS OF THE PROPERTY OR SHAREHOLDERS OF BLUE BIRD SOFTWARE PRIVATE LIMITED. THOSE ASSESSMENT ORDERS ARE ALSO PASSED AFTER SEARCH IN THEIR CASES BY THE CENTRAL CIRCLE. 16. THE ASSESSEE HAS ALSO PLACED ON RECOR D THE ASSESSMENT ORDER OF BLUE B IRD SOFTWARE PV T L TD WHO HAS PURCHASED THIS PROPERTY FOR 6.80 CR JUST FEW MONTHS BEFORE THE DATE OF UNSIGNED DOCUMENT. THIS VALUE IS ALSO ACCEPTED BY THE INCOME TAX AUTHORIT I ES. THE ASSESSEE HAS BEEN ABLE TO PRODUCE ENOUGH EVIDENCE ON RECORD TO REBUT THE PRESUMPTION. IN THE CASE OF M.M. FINANCERS (P) L TD VS DCIT 17 SOT 5 (CHENNAI) ITAT IT IS HELD THAT THE EXPRESSION USED IN SECTION 132(4A) IS MAY BE PRESUMED AND IT DOES NOT MEAN THAT OTHER FACTORS ARE NOT TO BE TAKEN INTO CONSIDERATION. THE MANDATE DOES NOT MEAN THAT I T HAS TO BE PRESUMED IRRESPECTIVE OF ALL OTHER FACTORS. THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS VED PRAKASH C HOUDHARY 305 ITR 245 (DELHI) ALSO SUPPORT THE CASE OF THE ASSESSEE. 17 ITA NO. 608/DEL/20012 17. ALL THESE CIRCUMSTANCES SUGGEST THAT THE ADDITION MADE BY THE AO IS CONTRARY TO THE DVO REPORT OBTAINED BY HIM AND THE CIT(A) HAS IGNORED THE VITAL AND MATERIAL DOCUMENTS AND EVIDENCES ON RECORD BEFORE UPHOLDING THE ORDER OF THE AO. CONSEQUENTLY, THE ADDITION OF RS. 698 LAKH S MADE BY THE AO AND UPHELD BY THE CIT(A) IS DELETED AND THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 608/DEL/2012 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 7 .1 2 .2017. S D / - S D / - [SUDHANSHU SRIVASTAVA] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: DECEM BER , 201 7 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI