The Asstt. Commissioner of Income Tax, Jalandhar V. Harman Builder, Jalandhar

ITA 666/ASR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9669 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: DINESH SARNA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Search and seizure; Document seized; Question of law; Fair market value; Block assessment; Onus to prove; Documents seized
• Section: 143(3); 50C; 153A; 133(6); 131; 132; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.659 & 660(ASR)/2014 ASSESSMENT YEARS:2009-10 & 2010-11 PAN: ADVPS8383E ASSTT. COMMR. OF INCOME TAX, VS. SH. KULWINDER SING H, CENTRAL CIRCLE-1, JALANDHAR. 425, MOTA SINGH NAGAR , JALANDHAR. (APPELLANT) (RESPONDENT) ITA NO. 666(ASR)/2014 ASSESSMENT YEARS:2009-10 PAN: AABCH4481J ASSTT. COMMR. OF INCOME TAX, VS. M/S. HARMAN BUILDE RS PVT. LTD. CENTRAL CIRCLE-1, JALANDHAR. 666, LINK ROAD, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKER, DR RESPONDENT BY: SH. DINESH SARNA, DR DATE OF HEARING: 30/06/2016 DATE OF PRONOUNCEMENT: /07/2016 ORDER PER A.D. JAIN, JM: THESE ARE THE DEPARTMENTS APPEALS FOR THE ASSESSM ENT YEARS 2009-10, 2010-11 & 2009-10, AGAINST THE SEPARATE OR DERS DATED 14.08.2014, 26.08.2014 & 12.08.2014, PASSED BY THE LD. CIT(A)-1, LUDHIANA, PASSED IN THE RESPECTIVE CASES OF THE TWO ASSESSEES. AS THE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON, THEY ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER, FOR THE SAKE OF CONVENI ENCE. ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 2 2. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO.659(ASR)/2014, FOR THE A.Y. 2009-10, WHICH ARE I DENTICAL IN THE OTHER APPEALS, EXCEPT VARIATION IN AMOUNTS: 1. WHETHER THE DECISION OF THE LD. CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.2,27,00,000/- MADE BY THE AO ON ACCO UNT OF UNACCOUNTED AND UNDISCLOSED INVESTMENT U/S 69B OF T HE ACT BY NOT CONSIDERING PHOTOCOPY OF AGREEMENT TO SELL A S AN EVIDENCE WHEN SUBSEQUENTLY SOME OF THE CHEQUES MENT IONED IN THE SAID AGREEMENT WERE FOUND DEBITED IN THE BAN K STATEMENT OF SH. MOHINDER SINGH BAJWA (PURCHASER). A. WHETHER THE LD. CIT(A) IS RIGHT TO HOLD THAT TH E FAIR MARKET VALUE OF ASSET AS ON DATE OF TRANSACTION EXC EEDS FULL VALUE OF CONSIDERATION DECLARED BY THE ASSESSEE THE N IT IS FOR THE AO TO PROVE THAT THE VALUE DECLARED BY THE ASSE SSEE IS UNDERSTATED. WHEREAS THREE CHEQUES DATED 10.05.200 7 NO.148467 RS.15 LACS NO.148468 RS. 15 LACS, NO.1484 69 RS.10 LACS AS MENTIONED IN THE PAGE 2 OF THE SAID P HOTOCOPY OF AGREEMENT HAVE BEEN FOUND DEBITED IN BANK ACCOUN T OF SH.MOHINDER SINGH BAJWA, BANK STATEMENT OF WHICH W ERE OBTAINED U/S 133(6) OF THE I.T. ACT, 1961 FROM THE CITIZEN URBAN COOPERATIVE BANK LIMITED, MITHAPUR ROAD, JALANDHAR. THIS COPY OF AGREEMENT IS VERY VALID EVI DENCE TO PROVE THAT THE VALUE DECLARED BY THE ASSESSEE IS UN DERSTATED. B. WHETHER THE LD. CIT(A) IS RIGHT TO HOLD THAT THE AO IS ENTIRELY DEPENDENT UPON THE DOCUMENTS FOUND AND SEI ZED NOT IN THE CASE OF THE APPELLANT BUT FROM UNRELATED PARTY. THE LD. CIT(A) FAILED TO CONSIDER THE ISSUE THAT Q UESTION OF VALUE OF PROPERTY OF THE APPELLANT IS ONE OF THE SA ME CHUNK OF LAND OF M/S. PISCO LTD. ONLY WHICH IS VERY WELL MENTIONED IN THE SAID SEIZED COPY OF AGREEMENT. C. WHETHER THE LD. CIT(A) IS RIGHT TO HOLD THAT H OW VARIOUS PAYMENTS IN CHEQUES AS WELL AS IN CASH HAVE BEEN MA DE BY THE IMPUGNED BUYER TO M/S. PISCO LTD; AND THE SAID PAYMENT IN CHEQUES, AS OBSERVED BY THE AO STAND REC ORDED IN THE BOOKS OF ACCOUNTS OF THE BUYER. SINCE, THE P AYMENT MADE BY CHEQUES AND CASH IS RECORDED IN THE COPY OF AGREEMENT AND THE SAID TRANSACTION OF PAYMENT MADE BY CHEQUES ARE REFLECTED IN THE BANK STATEMENT OF BUYE R IS A ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 3 VALID EVIDENCE, WHETHER THE TRANSACTIONS ARE RECORD ED IN THE BOOKS OR NOT. D. WHETHER THE LD. CIT(A) IS RIGHT TO HOLD THAT TH E SAME TEST REGARDING ADMISSIBILITY OF EVIDENCE COULD NOT BE EXTENDED IN THE CASE OF EVERY OTHER BUYER OF THE LA ND IN THE SAME VILLAGE OR SIMILAR LOCATED LAND. BUT THE LD. C IT(A) FAILED TO APPRECIATE THAT THE LAND OF APPELLANT IS A CHUNK OF PART OF THE SAME LAND OF PISCO LTD. ONLY. E. WHETHER THE LD. CIT(A) IS RIGHT TO HOLD THAT TH E PRESUMPTION MADE BY THE AO ON THE BASIS OF SEIZED DOCUMENTS IN THE CASE OF M/S. PISCO LTD. IN RESPECT OF IMPUGNED DEAL RECORDED IN THE SAID DOCUMENT COULD DEFINITELY BE MADE BUT SAME PRESUMPTION CANNOT BE EXTENDED TO IN THE CASE OF EVERY OTHER CONSEQUENTIA L SALE OF LAND BY M/S. PISCO LTD. IN THIS REGARD, IT IS PERTI NENT TO MENTION HERE THAT THE LD. CIT(A) FAILED TO CONSIDER THE ISSUE THAT THE QUESTION OF SALE OF LAND IS NOT ON THE BAS IS OF PRESUMPTION BECAUSE THE LAND OF APPELLANT IS A CHUN K OF PART OF THE SAME LAND OF PISCO LTD. ONLY. 2. WHETHER THE DECISION OF THE LD. CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS.14,02,104/- MADE BY THE AO ON ACCOUN T OF DISALLOWANCE OF INTEREST UNDER SECTION 36(1)(III) O F THE ACT. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF SALE/PURCHASE OF PROPERTY. SEARCH AND S EIZURE WAS CONDUCTED AT THE BUSINESS AS WELL AS RESIDENTIAL PR EMISES OF THE ASSESSEE ON 03.08.2011 AND NOTICES U/S 153A OF THE INCOME TA X ACT WERE ISSUED FOR THE SIX YEARS IMMEDIATELY PRECEDING THE ASSESSM ENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OPERATION WAS CONDUCTED. IN RESPONSE, THE ASSESSEE FILED RETURN OF INCOME DECLA RING INCOME OF RS.10,04,250/- ON 28.02.2013. THE ASSESSEE FILED RE PLY TO THE QUESTIONNAIRE ALONG WITH THE REQUIRED DETAIL AND DO CUMENTS. ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT WAS FRAMED ON 24. 03.2014, AT ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 4 RS.2,51,52,675/-, AS AGAINST THE RETURNED INCOME OF RS.10,04,250/- . THUS, THE AO MADE ADDITION OF RS. 2,41,48,425/- ON DIFFERENT ACCOUNTS. 4. THE LD. CIT(A), PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED, NOW THE DEPARTMENT IS IN APPEAL BEFOR E THIS BENCH AGAINST THE ORDER OF THE LD. CIT(A). 5. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. HOWEVER, AS REGARDS THE FIRST ISSUE RELATING TO DELETION OF ADDITION OF RS.2,27,00,000/-, HE SUBMITTED THAT THE ADDITION WA S MADE BY THE AO ON ACCOUNT OF UNACCOUNTED AND UNDISCLOSED INVESTMENT U /S 69B OF THE I.T. ACT, BY CONSIDERING THE PHOTOCOPY OF AGREEMENT TO SELL AS AN EVIDENCE, WHEN SOME OF THE CHEQUES MENTIONED IN THE SAID AGRE EMENT WERE FOUND DEBITED IN THE BANK STATEMENT OF SH. MOHINDER SINGH BAJWA (PURCHASER). HE FURTHER SUBMITTED THAT THE LD. CIT(A) IS NOT JUS TIFIED IN DELETING THE ADDITION. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STRONGLY SUPPORTED THE IMPUGNED ORDER. HE CONTENDED THAT TH E ADDITION WAS MADE ON ACCOUNT OF AN AGREEMENT WHICH WAS NEITHER F OUND FROM THE RESIDENCE OF THE ASSESSEE, NOR WAS THE ASSESSEE WAS A PARTY TO THIS AGREEMENT, AND AS SUCH, THE LD. CIT(A) WAS JUSTIFIE D IN DELETING THE ADDITION OF RS.2,27,000/- . HE SUBMITTED THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, STATEMENTS OF SH. RAMESH IN DER SINGH, ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 5 CHAIRMAN OF PISCO AND SH. VINAY KUMAR, ACCOUNTANT O F THE ASSESSEE WERE ALSO RECORDED U/S 131 OF THE I.T. ACT, 1961, I N THE CASE OF THE ASSESSEE, WHEREIN THEY HAD CATEGORICALLY REFUSED TO IDENTIFY THE SAID AGREEMENT AS MENTIONED IN PARA 5.6 OF THE ASSESSMEN T ORDER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE VERY DETAILED AND ORDER OF THE LD. CIT(A), WHO HAS DISCUSSED EACH AND EVERY ASPECT OF THE MATTER AND HAS FOUND THAT THE FINDINGS GIVEN BY T HE LD. CIT(A) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHICH DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. THE RELEVANT FINDINGS GIV EN BY THE LD. CIT(A) IN HIS ORDER IN PARAS 9 TO 24 OF THE ORDER ARE AS FOLL OWS: 9. I HAVE CONSIDERED THE FACTS OF THE CASE, THE BA SIS OF ADDITION MADE BY THE ASSESSING OFFICER AND THE ARGUMENTS OF THE AR DURING ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEED INGS. IT IS QUITE APPARENT THAT THE CASE OF THE ASSESSING OFFICER IS ENTIRELY DEPENDENT UPON THE DOCUMENTS FOUND AND SEIZED NOT IN THE CASE OF THE APPELLANT BUT FROM UNRELATED PARTY BEING AN ACCOUNTANT OF THE COMPANY WHICH HAPPENS TO BE SELLER OF THE LAND IN QUESTION. IT IS ALSO FACT THAT IMPUGNED UNREGISTERED AGREEMENT TO SELL ALLEGEDLY E NTERED INTO BY M/S PISCO LTD. AND TWO OTHER PERSONS IS A PHOTO COP Y OF THE AGREEMENT TO SELL IN RESPECT OF LAND IN THE SAME VI LLAGE BIRRING AT THE RATE OF RS. 11.05 CRORE PER ACRE. THE SAID DOCU MENTS FURTHER RECORD AS TO HOW VARIOUS PAYRMENTS IN CHEQUE AS WEL L ASTN CASH HAVE BEEN MADE BY THE IMPUGNED BUYER TO M/S PISCO L TD. AND SAID PAYMENTS IN CHEQUE, AS OBSERVED BY THE ASSESSING OF FICER STAND RECORDED IN THE BOOKS OF ACCOUNT OF BUYER. THIS CRU CIAL FACT LENDS CREDIBILITY TO IMPUGNED AGREEMENT TO SELL. THE ACTI ON ON THE BASIS OF SUCH AN AGREEMENT TO SELL, EVEN THOUGH BEING A PHOT OCOPY IS WARRANTED IN THE CASE OF PARTIES TO AGREEMENT AS TH E EVIDENCE IN THE CASE OF INCOME TAX PROCEEDINGS DOES NOT HAVE TO BE IN THE NATURE OF EVIDENCE UNDER SECTION 65 OF THE EVIDENCE ACT, 1872. ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 6 10. HOWEVER THE SAME TEST REGARDING ADMISSIBILITY OF EVIDENCE COULD NOT BE EXTENDED IN THE CASE OF EVERY OTHER BU YER OF LAND IN THE SAME VILLAGE OR SIMILARLY LOCATED LAND. THE PRE SUMPTION U/S 132 (4A) IS TO BE INVOKED IN THE CASE OF M/S PISCO LTD. FROM WHOM THE DOCUMENT OR VALUABLES ARE FOUND AND SEIZED AND EVEN IN THE SAID CASE SUCH A PRESUMPTION IS REBUTTABLE. HOWEVER, IT I S CLEAR THAT NO EVIDENCE WHATSOEVER HAS BEEN FOUND FROM THE APPELLA NT DURING THE COURSE OF SEARCH OPERATION WHICH COULD EVEN SUGGEST THAT THERE HAS BEEN UNACCOUNTED INVESTMENT IN THE PURCHASE OF LAND TO THE TUNE OF RS.2.27 CRORE. THE PRESUMPTION MADE BY THE ASSESSIN G OFFICER ON THE BASIS OF THE SEIZED DOCUMENTS IN THE CASE OF M/ S PISCO LTD. IN RESPECT OF THE IMPUGNED DEAL RECORDED IN THE SAID D OCUMENT COULD DEFINITELY BE MADE BUT SAME PRESUMPTION CAN NOT BE EXTENDED TO IN THE CASE OF EVERY OTHER CONSEQUENTIAI SALE OF LA ND BY 'M/S PISCO LTD. THE ASSESSING OFFICER HAS CLEARLY OBSERVED IN THE ASSESSMENT YEAR THAT THE SALE CONSIDERATION AS RECORDED IN THE SEIZED COPY OF AGREEMENT OF SALE HAS BEEN TAKEN FOR THE PURPOSES O F COMPARATIVE RATE AT VILLAGE BIRRING ONLY AND THE LAND PURCHASED BY THE APPELLANT WAS DIFFERENT THAN THE ONE MENTIONED IN THE IMPUQNE D SEIZED DOCUMENTS. THIS ISSUE HAS BEEN CLARIFIED BY THE ASS ESSING OFFICER AT PARA 4.6 IN THE ASSESSMENT ORDER. THIS FURTHER UNDE RLINES THE BASIS OF ASSESSING OFFICER'S PRESUMPTION HERE IT IS IMPORT ANT TO CONSIDER THE FACTS OF THE CASE IN THE LIGHT OF JUDICIAL PRON OUNCEMENTS IN SIMILAR CASES WHEREIN THE DOCUMENTS RELIED UPON BY THE ASSESSING OFFICER HAD BEEN SEIZED IN THE CASE OF THIRD ARTIES . THE DOCUMENTS TO BE RELIED UPON HAVE TO BE EXTREMELY CLEARLY SPEC IFIC AND DESCRIPTIVE ENOUGH TO ESTABLISH THE FACTUM OF PASSI NG ON IF UNACCOUNTED SALE CONSIDERATION FOR TRANSFER OF PROP ERTY IN QUESTION. THE DOCUMENTS SEIZED IN THE CASE OF M/S PISCO LTD O NLY CREATE A DOUBT OR SUSPICION WHICH CANNOT TAKE THE PLACE OF T HE EVIDENCE AS HAS BEEN HELD IN THE CATENA OF JUDGMENTS, SOME OF W HICH ARE AS UNDER:- DCIT VS. D.N. KAMANI (HUF) 70 ITD (PATNA- TRIB) 77 COMMISSIONER OF INCOME TAX VS. RAM NARAIN 224 ITR 1 80 (P&H) ELITE DEVELOPERS VS. DY. COMMISSIONER OF INCOME TAX 73 ITD (NAGPUR- TRIB) 379 MONGA METALS PVT. LTD. VS. ACIT 67 TTJ (ALL) 247 JCIT VS. GRAMOPHONE COMPANY OF INDIA LTD. 265 ITR (KOL-TRIB) 46 (AT) ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 7 11. THE CASE OF AMARJIT SINGH BAKSHI (HUF) VS ACIT I S ON SIMILAR FACTS AS IS CLEAR FROM THE FOLLOWING HEAD NOTE:- SEARCH AND SEIZURE-BLOCK ASSESSMENT-COMPUTATION OF UNDISCLOSED INCOME -ADDITION UNDER SECTION 69B-A LO OSE SHEET, PURPORTING TO BE AN AGREEMENT, PARTLY WRITTE N IN PENCIL AND PARTLY IN PEN, FOUND DURING SEARCH OF THE PREMI SES OF 'N'- SAID DOCUMENT REVEALED THAT AGRICULTURAL 'WAS SOLD BY 'N' TO ASSESSEE (ASB) AT A CONSIDERATION MUCH HIGHER THAN THAT DECLARED BY ASB-AO, IN REGULAR ASSESSMENT OF ASSESS EE ASB(HUF) ON PROTECTIVE BASIS, MADE ADDITION OF THE DIFFERENCE AND IN BLOCK ASSESSMENT OF ASB' (INDIVID UAL), MADE AN ADDITION OF RS. 6.8 CRORES AS UNDISCLOSED INVEST MENT- ADDITION NOT JUSTIFIED-SUCH A DOCUMENT COULD NOT BE SAID TO BE AN 'AGREEMENT' NOR A 'DUMB DOCUMENT'-'N' HAVING CHANGED HIS STAND AND RETRACTED HIS STATEMENT AT VARIOUS LE VELS, HIS TESTIMONY COULD NOT BE SAID TO BE RELIABLE- FURTHER , THE DOCUMENT IN QUESTION WAS NOT RECOVERED FROM THE POS SESSION OF ASSESSEE AND ASSESSEE WAS NOT GIVEN ANY OPPORTUN ITY TO CROSS-EXAMINE 'N'-IN THE ABSENCE OF ANY RELIABLE EV IDENCE, NO ADDITION COULD BE MADE.' 12. FURTHER THE DECISION OF FLONBLE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF NEENA SYAL VS ASSISTANT COMMISSIONER OF INCOME TAX 69 (CHD-TRIB) 516 IS ALSO ON SIMILAR ISSUE AS IS CL EAR FROM FOLLOWING HEAD NOTE: - 'SEARCH AND SEIZURE-BLOCK ASSESSMENT-COMPUTATION OF UNDISCLOSED INCOME-ADDITION OF PREMIUM ALLEGEDLY PA ID OVER AND ABOVE THE COST OF PLOT MENTIONED IN THE REGISTE RED DEED- SEIZED DOCUMENTS ON THE BASIS OF WHICH THE IMPUGNED ADDITION WERE MADE NOT FOUND AT THE RESIDENCE OF TH E ASSESSEE BUT AT THE RESIDENCE OF A THIRD PARTY- SAM E HAVE NOT BEEN SPECIFICALLY CONFRONTED TO THE ASSESSEE BEFORE MAKING THE ADDITION-EXPLANATION GIVEN BY ASSESSEE NOT CONT ROVERTED BY AO-AO HAS NOT GIVEN ANY REASON FOR EITHER NOT AC CEPTING THE EXPLANATION OF THE ASSESSEE OR FOR FINDING THE EXPLANATION AS UNSATISFACTORY-THUS, AO DID NOT COMPLY WITH THE CONDITIONS STIPULATED IN S. 69-ADDITION DELETED-REMAND OF THE CASE NOT CALLED FOR-POWER OF REMAND UNDER S. 254 IS REQUIRED TO BE EXERCISED IN A DISCIPLINED AND RESPONSIBLE MANNER-S AME CANNOT BE INVOKED IN A CASE WHERE AO HAS NOT CARED TO FOLLOW THE BASIC PROVISIONS OF S. 69/69B.' 13. THE DECISION OF THE JURISDICTIONAL ITAT AMRITSAR IN THE CASE OF ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 8 ITO VS. SH. SURINDER SINGH IS DIRECTLY ON THE SIMIL AR FACTS AS CERTAIN DOCUMENTS SEIZED FROM THE THIRD PARTY M/S DREAMLAND CO-OPERATIVE WHICH WAS SELLER IN SAID CASE AND THE DOCUMENTS IN QUESTION HAD RECORDED CERTAIN AMOUNTS RECEIVED BY M/S DREAMLAND CO- OPERATIVE SOCIETY FROM THE ASSESSEE ON ACCOUNT OF SALE OF FLA T. IT IS FURTHER TO BE NOTED THAT SH. RAKESH KUMAR C/O DREAMLAND COOPER ATIVE SOCIETY HAD GIVEN STATEMENT TO THE EFFECT THAT AMOU NT HAD BEEN RECEIVED FROM THE ASSESSEE. HOWEVER A MERE PRESUMPT ION THAT SALE DEED WAS REGISTERED IN THE IMPUGNED ASSESSMENT YEAR WOULD NOT MEAN THAT CASH PAYMENT WAS ALSO IN THE SAME YEAR. T HE PRESUMPTION AVAILABLE U/S 132(4A) WAS NOT AVAILABLE IN THE CASE OF THE ASSESSEE AS NO DOCUMENTS HAD BEEN SEIZED FROM HIS POSSESSION. THE HONBLE COURT HELD AS UNDER: 'THE ONLY PIECE OF PAPER WHICH IS COMPUTERIZED 04.0 7.2007 SEIZED FROM A THIRD PARTY I.E. M/S DREAMLAND CO-OPE RATIVE SOCIETY ON 19.07.2007 IS THE ONLY DOCUMENT ON THE B ASIS OF WHICH THE ASSESSING OFFICER HAD MADE THE ADDITION. WE CONCUR WITH THE VIEW OF THE LD. CIT(A) THAT EXCEPT FOR THE ONLY DOCUMENT I.E. PAGE NO. 66 OF ANNEXURE 50 SEIZED FRO M M/S DREAMLAND CO-OPERATIVE SOCIETY, A THIRD PARTY THERE IS NOTHING ELSE TO SUGGEST THAT ASSESSEE HAD IN FACT PAID AN A MOUNT OF RS. 11,50,000/- IN CASH TO THE SOCIETY. IT IS UNDISPUTE D THAT THE DOCUMENT IS NOT SEIZED FROM ASSESSEE. IT IS ALSO UN DISPUTED THAT THE DOCUMENT I NOT SEIZED FROM THE ASSESSEE. IT IS ALSO UNDISPUTED THAT DOCUMENT IS NOT IN HANDWRITING OF T HE ASSESSEE AND DID NOT BELONG TO ASSESSEE. IT IS ALSO NOT DISP UTED THAT THERE IS NO DATE ON ALLEGED PAYMENT MENTIONED IN THIS LOO SE DOCUMENT. IT IS A FACT THAT AS PER SALE DEED DATED 11.01.2007 THE FLAT WAS SOLD BY THE SOCIETY TO THE ASSESSEE FO R A FULL AND FINAL CONSIDERATION OF RS. 7 LANES PAID THROUGH CHE QUE NO. 346637 DATED 08.01.2007 AND THIS VALUE HAS DULY BEE N ACCEPTED BY THE REGISTRATION AUTHORITY. THE ASSESSI NG OFFICER HAS BSED HIS ENTIRE CASE ON THIS DOCUMENT AND THE STATE MENT GIVEN BY SH. RAKESH KUMAR M/S DREAMLAND CO-OPERATIVE SOCI ETY. MOREOVER, DURING THE ASSESSMENT OF THE SOCIETY A VA LUATION REPORT OF THE PROPERTY WAS FILED WHEREIN AMOUNT OF RS. 50 LACS HAD BEEN SURRENDERED BY THE SAID SOCIETY. IN THE PR ESENT CASE, WHEN DOCUMENT SEIZED IS NOT BEARING ANY DATE AS REG ARD THE PAYMENT MADE IN CASH, THE SAME CANNOT BE LINKED TO THE ASSESSEE CONCLUSIVELY IN THE IMPUGNED ASSESSMENT YE AR. A MERE 'PRESUMPTION THAT SALE DEED IS REGISTERED IN THE IM PUGNED ASSESSMENT YEAR AND THEREFORE, CASH PAYMENT IS ALS O MADE IN THE SAME YEAR IS NOT ENOUGH IN THE ABSENCE OF ANY L INK IN THE LIST OF PAYMENT. WE CONCUR WITH THE VIEW OF THE LD. CIT(A) AND THE CASES RELIED UPON BY HIM THAT PRESUMPTION IS AV AILABLE AGAINST THE PERSON FROM WHOSE POSSESSION A SEIZURE IS MADE BUT ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 9 THE SAME CANNOT BE EXTENDED TO OTHERS. ACCORDINGLY, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND WE FIND NO INFIRMITY IN HIS ORDER. THUS ALL THE GROUNDS OF THE REVENUE ARE DISMISSED.' 14. THE ISSUE OF ALLEGED UNDERSTATEMENT OF SALE CON SIDERATION IN THE REGISTRATION DEED HAS TO BE PROVED BY THE REVEN UE AND THE SAME CAN BE DONE BY LEADING POSITIVE EVIDENCE EITHER IN THE FORM OF SOME DOCUMENTS FOUND DURING THE COURSE OF SEARCH OR OTHE RWISE WHICH COULD PROVE THAT CONSIDERATION OVER AND ABOVE THE REGISTR ATION DEED HAD BEEN PASSED ON FROM BUYER TO SELLER. THE EVIDENCE R ELIED UPON BY THE ASSESSING OFFICER IN THE INSTANT CASE REPRESENTS A PHOTOCOPY OF AN AGREEMENT TO SELL WITH REGARD TO A DEED BETWEEN TWO OTHER PERSONS IN RESPECT OF DIFFERENT PIECE OF LAND AND ON A DIFFERE NT DATE. THE ASSESSING OFFICER ON THE BASIS OF THE SAID SEIZED D OCUMENTS, WHICH HAS BEEN DENIED BY ALL THE CONSTITUENTS MENTIONED THERE IN, COULD DEFINITELY MAKE A PRESUMPTION ON SALE PRICE BEING HIGHER THAN WHAT WAS STATED IN THE REGISTRATION DEED BY THE APPELLANT. HOWEVER, THE SAID PRESUMPTION HAS TO BE BACKED UP BY THE SOME EVIDENC E OF TRANSFER OF SUCH CONSIDERATION FROM THE BUYER TO SELLER. THE AP PELLANT ALONGWITH SELLER HAD BEEN SUBJECTED TO SEARCH OPERATION WITHI N THE MEANING OF SECTION 132 OF THE I.T. ACT 1961 BUT NO SUCH EVIDEN CE COULD BE FOUND TO BE EXISTING. THIS MEANS THAT THE PRESUMPTION OF THE ASSESSING OFFICER EVENTUALLY REMAINS A PRESUMPTION AND THEREF ORE CAN NOT SUBSTITUTED IN PLACE OF EVIDENCE I.E. ESSENTIAL REQ UIREMENT TO UNSETTLE THE SALE CONSIDERATION AS RECORDED IN THE REGISTERE D DOCUMENTS. IT IS ALSO IMPORTANT TO APPRECIATE THAT THE SAID REGISTRA TION BETWEEN THE APPELLANT AND SELLER HAS BEEN AT A PRICE WHICH IS A T LEAST AS PER CIRCLE - RATE APPROVED BY THE REVENUE AUTHORITIES AND HENCE CAN NOT BE SAID TO BE BELOW FAIR MARKET PRICE. THE HON'BLE APEX COURT IN THE CASE OF K.P. VARGHESE VS. ITO 131 ITR 597 (SC) HAD GIVEN JUDGMEN T IN THE CONTEXT OF APPLICABILITY OF SECTION 52(2) OF INCOME TAX ACT 1961 WHICH DEALT WITH THE POSSIBLE UNDER STATEMENT OF SALE CON SIDERATION. THE SAID SECTION HAS BEEN OMITTED BY FINANCE ACT 1987 W .E.F. 1.4.88 AND THE ONLY PRESUMPTION AS OF NOW IS IN TE RMS OF APPLICABILITY OF SECTION 50C IN THE CASE OF COMPUTATION OF CAPITA L GAIN IN THE CASE OF THE SELLER. THE UNDER STATEMENT THAT COULD BE PRESU MED IN SUCH EVENTUALITY IN THE HANDS OF THE BUYER CANNOT LEAD T O AN ADDITION U/S 69 WHICH CLEARLY SHOWS THAT IT IS THE EVIDENCE OF PASS ING ON OF UNACCOUNTED SALE CONSIDERATION THAT HAS TO BE BROUG HT ON RECORD. THE HON'BLE APEX COURT CLEAR HELD AS UNDER:- 'IT IS A WELL SETTLED RULE OF LAW THAT THE ONUS OF ESTABLISHING THAT THE CONDITIONS OF TAXABILITY ARE FULFILLED IS ALWAY S ON THE REVENUE AND THE BURDEN LIES ON THE REVENUE TO SHOW THAT THE RE IS AN UNDERSTATEMENT OF THE CONSIDERATION. MOREOVER, TO T HROW THE BURDEN OF SHOWING THAT THERE IS NO UNDERSTATEMENT O F THE CONSIDERATION ON THE ASSESSEE WOULD BE TO ALMOST IM POSSIBLE ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 10 BURDEN UPON HIM TO ESTABLISH A NEGATIVE, NAMELY, TH AT HE DID NOT RECEIVE ANY CONSIDERATION BEYOND THAT DECLARED BY HIM. ONCE IT IS ESTABLISHING BY THE REVENUE THAT THE CON SIDERATION FOR THE TRANSFER HAS BEEN UNDERSTATED OR, TO PUT IT DIF FERENTLY THE CONSIDERATION ACTUALLY RECEIVED BY THE ASSESSEE IS MORE THAN WHAT IS DECLARED OR DISCLOSED BY HIM, SECTION 52(2) IS IMMEDIATELY ATTRACTED, SUBJECT OF COURSE TO THE FUL FILLMENT OF THE CONDITION OF 15% OR MORE DIFFERENCE, AND THE REVENU E IS THEN NOT REQUIRED TO SHOW WHAT IS THE PRECISE EXTENT OF THE UNDERSTATEMENT OR IN OTHER WORDS, WHAT IS THE CONSI DERATION ACTUALLY RECEIVED BY THE ASSESSEE. THAT WOULD IN MO ST CASES BE DIFFICULT, IF NOT IMPOSSIBLE, TO SHOW AND HENCE SUB -SECTION (2) RELIEVES THE REVENUE OF ALL BURDEN OF PROOF REGARDI NG THE EXTENT OF UNDERSTATEMENT OR CONCEALMENT AND PROVIDES A STA TUTORY MEASURE OF THE CONSIDERATION RECEIVED IN RESPECT OF THE TRANSFER. IT DOES NOT CREATE ANY FICTIONAL RECEIPT. IT DOES N OT DEEM AS RECEIPT SOMETHING WHICH IS NOT IN FACT RECEIVED. IT MERELY PROVIDES A STATUTORY BEST JUDGMENT ASSESSMENT OF TH E CONSIDERATION ACTUALLY RECEIVED BY THE ASSESSEE AND BRINGS TO TAX CAPITAL GAINS ON THE FOOTING THAT THE FAIR MARK ET VALUE OF THE CAPITAL ASSET REPRESENTS THE ACTUAL CONSIDERATION R ECEIVED BY THE ASSESSEE AS AGAINST THE CONSIDERATION UNTRULY DECLA RED OR DISCLOSED BY HIM. 15. THE SAID JUDGMENT OF HON'BLE APEX COURT HAS BEEN CONSISTENTLY FOLLOWED VARIOUS HIGH COURT AND TRIBUNALS ON THE ISS UE OF UNDERSTATEMENT OF SALE CONSIDERATION IN RESPECT OF CASES FOLLOWING UNDER THE INCOME TAX ACT, 1961. FOR INSTANT THE HON' BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. SURAJ DEVI 328 IT R 604 HELD AS UNDER:- 'IT IS SETTLED LAW THAT THE PRIMARY BURDEN OF PROOF TO PROVE UNDERSTATEMENT OR CONCEALMENT OF INCOME IS ON THE R EVENUE AND IT IS ONLY WHEN SUCH BURDEN IS DISCHARGED THAT IT WOULD BE PERMISSIBLE TO / UPON THE VALUATION GIVEN BY THE DV O. IN ANY EVENT, THE OPINION OF A DVO, PER SE IS NOT AN INFOR MATION AND CANNOT BE RELIED UPON WITHOUT THE BOOKS OF ACCOUNT BEING REJECTED WHICH HAS NOT BEEN DONE I THE PRESENT CASE . MOREOVER, IN THE PRESENT CASE, NO EVIDENCE MUCH ASS INCRIMINA TING EVIDENCE WAS FOUND AS A RESULT OF THE SEARCH TO SUG GEST THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE REGISTERED PURCHASE DEED. A READING OF THE ASSESSING OFFICER'S ORDER DOES NOT D ISCLOSE THAT THE ASSESSEE HAD MADE ANY ADMISSION IN HER ALLEGED STATEMENT UNDER SECTION 132(4). IN FACT, NO SUCH STATEMENT HA S BEEN PRODUCED. IT IS ALSO PERTINENT TO MENTION THAT NO A DJUSTMENT ON ACCOUNT OF SALES CONSIDERATION HAS BEEN MADE BY THE REVENUE IN ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 11 THE CASE OF THE SELLER. CONSEQUENTLY, NO SUBSTANTIA L QUESTION OF LAW ARISES IN THE PRESENT APPEAL WHICH, BEING BEREF T OF MERIT, IS DISMISSED.- K.P. VARGHESE VS. ITO (1981) 24 CTR (SC ) 358 : (1981) 131 ITR 597 (SC), CIT VS. SMT. SHAKUNTALA DE VI (2009) 224 CTR (DEL) 79: (2009) 316 ITR 46 (DEL), SARGAM C INEMA VS. CIT (2011) 241 CTR (SC) 179 AND ASSTT. CIT VS. DHAR IYA CONSTRUCTION CO. (2010) 236 CTR (SC) 226: (2010) 47 DTR (SC) 288 FOLLOWED.' 16. THE ABOVE JUDGMENT OF THE HON'BLE DELHI HIGH COUR T, WHICH IS IN THE CONTEXT OF VALIDITY OF REPORT OF DVO WITH REGAR D TO FAIR MARKET PRICE OF THE PROPERTY BUT IT CLEARLY UNDERLINES THAT NO E VIDENCE MUCH LESS INCRIMINATING EVIDENCE HAD BEEN FOUND AS A RESULT O F THE SEARCH TO SUGGEST THAT THE ASSESSEE HAD MADE ANY PAYMENT OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE REGISTERED PURCHASE DEED. 17. THE HON'BLE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF PARAMJIT SINGH VS. ITO HAS CLEARLY UPHE LD THE FAR REACHING IMPORTANCE OF THE AMOUNTS SHOWN IN THE SALE DEED. T HE SAID JUDGMENT HAS BEEN GIVEN IN THE CONTEXT OF ADMISSION OF ORAL EVIDENCE AS AGAINST THE TERMS AND CONDITION RECORDED IN THE REGISTERED SALE DEED. THE HON'BLE COURT HELD AS UNDER:- 'THERE IS WELL-KNOWN PRINCIPLE THAT NO ORAL EVIDENC E IS ADMISSIBLE ONCE THE DOCUMENT CONTAINS ALL THE TERMS AND CONDITIONS. SECS. 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872 (FOR BREVITY 'THE 1872 ACT') INCORPORATE THE AFORES AID PRINCIPLE. ACCORDING TO SECTION 91 WHEN TERMS OF A CONTRACT, G RANTS OR OTHER DISPOSITION OF PROPERTY HAVE BEEN REDUCED TO THE FORM OF A DOCUMENT THEN NO EVIDENCE IS PERMISSIBLE TO BE GIVE N IN PROOF OF ANY SUCH TERMS OF SUCH GRANT OR DISPOSITION OF THE PROPERTY EXCEPT THE DOCUMENT ITSELF OR THE SECONDARY EVIDENC E THEREOF. ACCORDING TO SECTION 92 OF THE 1872 ACT ONCE THE DO CUMENT IS TENDERED IN EVIDENCE AND PROVED AS PER THE REQUIREM ENTS OF SECTION 91 THEN NO EVIDENCE OF ANY ORAL AGREEMENT O R STATEMENT WOULD BE ADMISSIBLE AS BETWEEN THE PARTIES TO ANY S UCH INSTRUMENT FOR THE PURPOSES OF CONTRADICTING, VARYI NG, ADDING TO OR SUBTRACTING FROM ITS TERMS. ACCORDING TO ILLUSTR ATION 'B' TO SECTION 92 IF THERE IS AN ABSOLUTE AGREEMENT IN WRI TING BETWEEN THE PARTIES WHERE ONCE HAS TO PAY THE OTHER A PRINC IPAL SUM BY SPECIFIED DATE THEN THE ORAL AGREEMENT THAT THE MON EY WAS NOT TO BE PAID TILL THE SPECIFIED DATE CANNOT BE PROVED . THEREFORE, IT FOLLOWS THAT NO ORAL AGREEMENT CONTRADICTING/VARYIN G THE TERMS OF A DOCUMENT COULD BE OFFERED. ONCE THE AFORESAID PRINCIPLE IS CLEAR THEN OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED DATED 24 TH SEPT., 2002 HAS TO BE ACCEPTED AND IT CANNOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE. THEREFO RE, THE ORDER OF THE TRIBUNAL DOES NOT SUFFER FROM ANY LEGA L INFIRMITY IN ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 12 REACHING TO THE CONCLUSION THAT THE AMOUNT SHOWN IN THE REGISTERED SALE DEED WAS RECEIVED BY THE VENDORS AN D DESERVES TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE.' 18. 'THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF COMMLSSIONER OF INCOME TAX VS. BHANWARLALMURWATIYA , REPORTED IN (2008) 215 CTR (RAJ) 489, HELD:- THE QUESTION AS TO WHAT WAS THE PRICE OF THE LAND AT THE RELEVANT TIME IS A PURE QUESTION OF FACT. APART FR OM THE FACT, THAT EVEN IF IT WERE TO BE ASSUMED, THAT THE PRICE OF THE LAND WAS DIFFERENT THAN THE ONE, RECITED IN THE SALE DEE D, UNLESS IT IS ESTABLISHED ON RECORD BY THE DEPARTMENT, THAT AS A MATTER OF FACT, THE CONSIDERATION, AS ALLEGED BY THE DEPARTME NT, DID PASS TO THE SELLER FROM THE PURCHASER, IT CANNOT BE SAID , THAT THE DEPARTMENT HAD ANY RIGHT TO MAKE ANY ADDITIONS. IT IS A DIFFERENT STORY AS TO, TO WHAT EXTENT AND HOW, THE STATEMENT OF 5, AS GIVEN BEFORE DIFFERENT AUTHORITIES, AT DIFFER ENT TIMES, CAN BE USED AGAINST THE ASSESSEE. MORE SO, WHEN NONE OF THE WITNESSES WAS EXAMINED BEFORE THE AO, AND THE ASSES SEE DID NOT HAVE ANY OPPORTUNITY TO CROSS EXAMINE THEM. IN ANY CASE, THE QUESTION AS TO WHETHER THE CONSIDERATION OF RS. 61 LACS, OR ANY OTHER HIGHER CONSIDERATION THAN THE ONE, MENTIO NED IN THE SALE DEED, DID PASS FROM THE ASSESSEE TO THE SELLER OR NOT, DOES NOT THE LESS REMAIN A QUESTION OF FACT, AND IT IS N OT SHOWN BY THE DEPARTMENT, THAT ANY RELEVANT MATERIAL HAS BEEN IGN ORED, OR MISREAD BY THE CIT(A), OR THE TRIBUNAL. IN THAT VIE W OF THE MATTER, THE QUESTIONS, AS FRAMED, CANNOT BE EVEN SA ID TO BE ARISING, AND IN ANY CASE, ARE REQUIRED TO BE ANSWER ED AGAINST THE REVENUE, AND IN FAVOUR OF THE ASSESSEE.' 19. THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHAND IGARH BENCH 'B', CHANDIGARH IN THE CASE OF I.T.O. VS. SHRI MOHINDER SINGH REPORTED IN (2008)ITR 118 (ITAT, CHD), HELD:- 'ADDITION MADE UNDER CAPITAL GAIN ON THE GROUND THA T INCOME BY WAY OF SALE RECEIVED BY THE ASSESSEE WAS MORE THAN WHAT IT WAS SHOWN IN THE DEED OF REGISTRATION ON THE BASIS OF R EPORT OF INVESTIGATION WING OF THE DEPARTMENT BASED ON A PHO TOCOPY OF AN AGREEMENT DISOWNED BY THE ASSESSEE. NO EVIDENCE ON RECORD TO SHOW THAT ASSESSEE HAD RECEIVED MORE THAN WHAT W AS DISCLOSED ON THE REGISTERED INSTRUMENT, THE BURDEN FOR WHICH IS ON REVENUE. NO ADDITION CAN BE MADE ON THE BASIS OF THE PHOTOCOPY OF A DOCUMENT WHEN THE TRANSACTION IS SEP ARATELY EVIDENCED BY A REGISTERED SALE DEED.' 20. THE HONBLE INCOME TAX APPELLATE TRIBUNAL, CHAN DIGARH BENCH, CHANDIGARH IN THE CASE OF I.T.O. V. SHRI MANJIT SIN GH REPORTED IN ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 13 (2010) 128 TTJ (CHD)(UO) 82, HELD:- 'IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE AS SESSEE HAD RECEIVED ANY CONSIDERATION OVER AND ABOVE WHAT IS S TATED IN THE SALE DEED, ADDITION COULD NOT BE MADE BY DISREGARDING TH E 'FULL VALUE OF THE CONSIDERATION' DECLARED BY THE ASSESSEE SIMPLY BECA USE ANOTHER PORTION OF LAND HAS BEEN SOLD BY THE ASSESSEE ALONG WITH HIS BROTHER AT A HIGHER RATE,' 21. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SIVA KAMI CO. PVT. V. CIT (1973) 88 ITR 311 (MAD) HAS HELD THAT THE BU RDEN OF PROVING THAT CERTAIN SALES WERE EFFECTED WITH THE OBJECT OF AVOIDANCE OR REDUCTION OF TAX ON CAPITAL GAINS IS ON REVENUE AND IT IS NOT ENOUGH IN 3 EXPLANATION OFFERED BY THE ASSESSEE WAS NOT ACCEP TABLE AND THERE E STRONG SUSPICION AS TO THE REAL MOTIVE, WHICH PROMP TED THE SSESSEE TO SELL THE ASSETS. THERE MUST BE SOMETHING POSITIVE T O SUGGEST THAT THE SALES WERE EFFECTED WITH THE OBJECT OF AVOIDANCE OR REDUCTION OF TAX LIABILITY FOR CAPITAL GAINS AND THIS WAS AFFIRMED B Y HON'BLE APEX COURT IN (1986) 159 ITR 71 (SC). WE ARE OF THE VIEW THAT UNL ESS THERE IS EVIDENCE THAT MORE THAN WHAT IS STATED IN THE DOCUM ENTS OR WAS RECEIVED, NO HIGHER PRICE CAN BE TAKEN TO BE THE BA SIS FOR COMPUTATION OF TAX EITHER IN BUSINESS TRANSACTION OR CAPITAL GA IN TRANSACTIONS. THE ENTIRE ONUS IS ON REVENUE AND THE INFERENCES MIGHT BE DRAWN IN CERTAIN CASES BUT COME TO A CONCLUSION THAT A PARTI CULAR HIGHER AMOUNT WAS, IN FACT RECEIVED MUST BE BASED ON SUCH MATERIA L FROM WHICH SUCH AN IRRESISTIBLE CONCLUSION FOLLOWS. IN OUR CONSIDER ED VIEW, IN THE PRESENT CASE, THE REVENUE COULD NOT PRIMARY FACTS, FROM WHICH INFERENCE CAN BE DRAWN THAT THE CONSIDERATIONS RECO RDED BY ASSESSEE- FIRM IN ITS ACCOUNT AND THE S DEEDS IS NOT THE FULL CONSIDERATION OR THE ACTUAL PRICE RECEIVED BY ASSESSEE FOR THE TRANSFER OF SHOPS WAS THE UNDER-STATED PRICE. 22. THE HON'BLE APEX COURT IN THE CASE OF CIT VS. GE ORGE HANDERSON & COMPANY LIMITED 66 ITR 622 HAS OBSERVED THAT FULL VALUE OF CONSIDERATION FOR WHICH THE SALE, EXCHANGE OR TRANS FER OF THE CAPITAL ASSET IS MADE APPEARING IN SECTION 12B OF INDIAN IN COME TAX ACT,1922 (CORRESPONDING TO THE PRESENT SECTION 48 OF THE INC OME TAX ACT,1961), DOES NOT MEAN THE MARKET VALUE OF THE ASSET TRANSFE RRED BUT THE PRICE BARGAINED FOR BY THE PARTIES TO THE SALE, ETC. THE CONSIDERATION FOR THE TRANSFER OF CAPITAL ASSET IS WHAT THE TRANSFEROR RE CEIVES IN LIEU OF THE ASSET HE PARTS WITH, VIZ., MONEY OR MONEY'S WORTH. THE EXPRESSION 'FULL CONSIDERATION' IN THE MAIN PART OF SECTION 12B(2) C ANNOT BE CONSTRUED AS HAVING A REFERENCE TO THE MARKET VALUE OF THE AS SET TRANSFERRED. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. P. S URYANARAINA 88 ITR 321 HELD THAT THE FULL VALUE OF CONSIDERATION I N THE SAID SECTION MEANT ONLY THE ACTUAL VALUE RECEIVED BY THE ASSESSE E. HOWEVER THE MARKET VALUE MAY ALSO BE TAKEN IN PLACE OF FULL VAL UE OF THE CONSIDERATION ONLY IN THE EVENT OF THE CONSIDERATIO N AS PER REGISTERED ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 14 DOCUMENT BEING LESS THAN THE VALUE FIXED BY REVENUE AUTHORITIES FOR PURPOSE OF COLLECTION OF STAMP DUTY. IT MEANS THAT THE FULL VALUE OF CONSIDERATION AS EVIDENCED BY THE REGISTERED DOCUME NT CAN BE CONSTITUTED FOR THE VALUE MEANT FOR THE PURPOSES OF STAMP DUTY AS PER SECTION 50C. THIS SECTION HAS BEEN INTRODUCED BY FI NANCE ACT 2002 , W.E.F. 1.4.2003 AND HAS BEEN TITLED 'SPECIAL PROVIS ION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES' WHICH MEANS THAT TH E FULL VALUE OF CONSIDERATION CAN BE SUBSTITUTED ONLY IF THE CONDIT IONS AS STIPULATED IN THE PROVISIONS OF SECTION 50C ARE FULFILLED. APART FROM THE PROVISIONS OF SECTION 50C, THE SALE CONSIDERATION AS REFLECTED IN THE REGISTERED DOCUMENT CAN BE SUBSTITUTED BY A HIGHER FIGURE IF T HERE IS EVIDENCE ON RECORD TO SUGGEST THAT AMOUNT OVER AND ABOVE THE ON E RECORDED IN THE REGISTERED DOCUMENTS HAD PASSED ON FROM THE BUYER T O THE SELLER.' 23. THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CO MMISSIONER OF INCOME TAX VS. DINESH JAIN HUF REPORTED IN 254 CTR ( DEL) 534, HELD:- 'SECTION 69B IN TERMS REQUIRES THAT THE ASSESSING O FFICER HAS TO FIRST 'FIND' THAT THE ASSESSEE HAS 'EXPENDED' AN AMOUNT W HICH HE HAS NOT FULLY RECORDED IN HIS BOOKS OF ACCOUNT. IT IS ONLY THEN THAT THE BURDEN SHIFTS TO THE ASSESSEE TO FURNISH A SATISFACTORY EX PLANATION. TILL THE INITIAL BURDEN IS DISCHARGED BY THE ASSESSING OFFIC ER, THE SECTION REMAINS DORMANT. A 'FINDING' OBVIOUSLY SHOULD REST ON EVIDENCE. IN T HE PRESENT CASE, IT IS COMMON GROUND THAT NO INCRIMINATING MATERIAL WAS SE IZED DURING THE SEARCH WHICH REVEALED ANY UNDERSTATEMENT OF THE PUR CHASE E. THAT IS PRECISELY THE REASON WHY THE ASSESSING OFFICER HAD TO SORT TO RULE 3 OF SCHEDULE III TO THE WEALTH TAX ACT. THIS RULE DOES NOT EVEN CLAIM TO ESTIMATE THE 'FAIR MARKET VALUE' OF AN ASSET; IT ME RELY LAYS DOWN A PROCEDURE FOR COMPUTING THE VALUE OF AN ASSET FOR T HE PURPOSES OF THE WEALTH TAX ACT. THE SCHEDULE DERIVES ITS AUTHORITY FROM SECTION 7(1) OF THE WEALTH TAX ACT. THE SECTION, AS IT NOW STAND S, HAS DROPPED ALL PRETENSIONS TO ASCERTAINING THE FAIR MARKET VALUE O F AN ASSET FOR THE PURPOSES OF THE WEALTH TAX ACT. PRIOR TO THE AMENDM ENT MADE W.E.F. 1-4-1989 THE SECTION PROVIDED FOR THE ESTIMATION OF THE FAIR MARKET VALUE OF AN ASSET ON THE PRINCIPLE OF WHAT IT WOULD FETCH IF SOLD IN THE OPEN MARKET. THIS INVOLVED AN ASSUMPTION OF AN OPEN MARKET, BE IT FICTIONAL, A WILLING SELLER AND A WILLING BUYER, AL L FICTIONAL. THIS FICTION FACILITATED A REALISTIC ESTIMATION OF THE FAIR MARK ET VALUE OF THE PROPERTY, AND IT MOVED WITH THE UPS AND DOWNS OF TH E MARKET. NOT ANYMORE. FROM 1-4-1989, THE VALUE WAS FROZEN. FOR A LL TIMES TO COME, AN IMMOVABLE PROPERTY THAT FETCHES RENT SHALL BE VA LUED AT 12.5 TIMES THE NET MAINTAINABLE RENT. THERE IS A FUNDAMENTAL FALLACY IN INVOKING THE PROV ISIONS OF THE WEALTH TAX ACT TO THE APPLICATION OF SECTION 69B OF THE IN COME TAX ACT, NOTWITHSTANDING THAT BOTH THE ACTS ARE COGNATE AND HAVE EVEN BEEN ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 15 SAID TO CONSTITUTE AND INTEGRATED SCHEME OF TAXATIO N. UNDER THE INCOME TAX ACT, WE ARE TO FIND WHAT WAS THE REAL AN D ACTUAL CONSIDERATION PAID BY THE ASSESSEE AND WHETHER THE FULL CONSIDERATION HAS BEEN RECORDED IN THE BOOKS. UNDER SECTION 7(1) OF THE WEALTH TAX ACT AS IT STOOD BEFORE 1-4-1989, WE ARE TO ESTIMATE THE FAIR MARKET VALUE OF THE ASSET; AFTER THIS DATE, IT IS NOT EVEN ESTIMATION OF THE FAIR MARKET VALUE, BUT COMPUTATION OF THE VALUE OF THE A SSET ON THE BASIS OF CERTAIN RULES PRESCRIBED BY THE STATUTE. SEC. 69B DOES NOT PERMIT AN INFERENCE TO BE DRAWN F ROM THE CIRCUMSTANCES SURROUNDING THE TRANSACTION THAT THE PURCHASER OF THE PROPERTY MUST HAVE PAID MORE THAN WHAT WAS ACTUALLY RECORDED IN HIS BOOKS OF ACCOUNT FOR THE SIMPLE REASON THAT SUCH AN INFERENCE COULD BE VERY SUBJECTIVE AND COULD INVOLVE THE DANGEROUS CON SEQUENCE OF A AL OR FICTIONAL INCOME BEING BROUGHT TO TAX CONTRARY T O THE STRICT VISIONS OF ARTICLE 265 OF THE CONSTITUTION OF INDIA AND ENTRY 82 IN LIST 1 OF THE SEVENTH SCHEDULE THERETO WHICH DEALS WITH 'TAXES ON INCOME OTHER THAN AGRICULTURAL INCOME.' FOR THE PURPOSES OF SECTION 69B IT IS THE BURDEN OF THE ASSESSING OFFICER TO FIRST PROVE THAT THERE WAS UNDERSTATEMEN T OF THE CONSIDERATION (INVESTMENT) IN THE BOOKS OF ACCOUNT. ONCE THAT UNDERVALUATION IS ESTABLISHED AS A MATTER OF FACT, THE ASSESSING OFFICER, IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION FROM THE ASSESSEE AS TO THE SOURCE OF THE UNDISCLOSED PORTION OF THE INVEST MENT, CAN PROCEED TO ADOPT SOME DEPENDABLE OR RELIABLE YARDSTICK WITH WH ICH TO MEASURE THE EXTENT OF UNDERSTATEMENT OF THE INVESTMENT. ONE SUCH YARDSTICK CAN BE THE FAIR MARKET VALUE OF THE PROPERTY DETERM INED IN ACCORDANCE WITH THE WEALTH TAX ACT. THE ERROR COMMITTED BY THE INCOME TAX AUTHORITIES I N THE PRESENT CASE IS TO JUMP THE FIRST STEP IN THE PROCESS OF APPLYIN G SECTION 69B- THAT OF PROVING UNDERSTATEMENT OF THE INVESTMENT- AND REPLY THE MEASURE OF UNDERSTATEMENT. IF ANYTHING, THE LANGUAGE EMPLOYED IN SECTION 69B IS IN STRICTER TERMS THAN THE ERSTWHILE SECTION 52(2). IT DOES NOT EVEN AUTHORIZE THE ADOPTION OF ANY YARDSTICK TO MEASURE THE PRECISE EXTENT OF UNDERSTATEMENT. THERE CAN THEREFORE BE NO COMPRO MISE IN THE APPLICATION OF THE SECTION. IT WOULD SEEM TO REQUIR E THE ASSESSING OFFICER EVEN TO SHOW THE EXACT EXTENT OF UNDERSTATE MENT OF THE INVESTMENT; IT DOES NOT EVEN GIVE THE ASSESSING OFF ICER THE OPTION OF APPLYING ANY REASONABLE YARDSTICK TO MEASURE THE PR ECISE EXTENT OF UNDERSTATEMENT OF THE INVESTMENT ONCE THE FACT OF U NDERSTATEMENT IS PROVED. IT APPEARS THAT THE ASSESSING OFFICER IS NO T ONLY REQUIRED TO PROVE UNDERSTATEMENT OF THE PURCHASE PRICE, BUT ALS O TO SHOW THE PRECISE EXTENT OF THE UNDERSTATEMENT. THERE IS NO A UTHORITY GIVEN BY THE SECTION TO ADOPT SOME REASONABLE YARDSTICK TO M EASURE THE EXTENT OF UNDERSTATEMENT. BUT SINCE IT MAY NOT BE POSSIBLE IN ALL CASES TO PROVE THE PRECISE OR EXACT AMOUNT UNDISCLOSED INVES TMENT, IT IS ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 16 PERHAPS REASONABLE TO PERMIT THE ASSESSING OFFICER TO RELY ON SOME ACCEPTABLE BASIS OF ASCERTAINING THE MARKET VALUE O F THE PROPERTY TO ASSESS THE UNDISCLOSED INVESTMENT. WHETHER THE BASI S ADOPTED BY THE ASSESSING OFFICER IS AN ACCEPTABLE OR NOT MAY DEPEN D ON THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. THAT QUESTION MAY HOWEVER ARISE ONLY WHEN ACTUAL UNDERSTATEMENT IS FIRST PROVED BY THE ASSESSING OFFICER. IT IS ONLY TO THIS EXTENT THAT THE RIGOUR OF THE BURDEN PLACED ON THE ASSESSING OFFICER MAY BE RELAXED IN CASES WHERE THERE IS EVIDENCE TO SHOW UNDERSTATEMENT OF THE INVESTMENT, BUT EVIDE NCE TO SHOW THE PRECISE EXTENT THEREOF IS LACKING. SINCE THE ENTIRE CASE HAS PROCEEDED ON THE ASSUMPTI ON THAT THERE WAS UNDERSTATEMENT OF THE INVESTMENT, WITHOUT A FINDING THAT THE ASSESSEE INVESTED MORE THAN WHAT WAS RECORDED IN THE BOOKS O F ACCOUNT, THE DECISION OF THE INCOME TAX AUTHORITIES CANNOT BE AP PROVED. SECTION 69B WAS WRONGLY INVOKED. THE ORDER OF THE TRIBUNAL IS APPROVED; THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN THE NEGA TIVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE CIT. CONCLUSION :- SECTION 69B CANNOT BE INVOKED ON THE ASSUMPTION THA T THERE WAS UNDERSTATEMENT OF THE INVESTMENT, WITHOUT A FINDING THAT THE ASSESSEE INVESTED MORE THAN WHAT WAS RECORDED IN THE BOOKS O F ACCOUNT.' VII) THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. HARPAL SINGH REPORTED IN (2008) 3 DTR 254, HELD:- 'TRIBUNAL HAS RECORDED A PURE FINDING OF FACT AFTER TAKING INTO CONSIDERATION THE EVIDENCE/MATERIAL AVAILABLE ON TH E RECORD TO THE EFFECT THAT BEFORE THE ASSESSING OFFICER THERE WAS NO MATERIAL OR EVIDENCE TO CONCLUDE THAT THE ASSESSEE HAD PAID A C ONSIDERATION AND ABOVE THE AMOUNT MENTIONED IN THE REGISTERED SALE D EED, I.E. @ RS.2.30 LACS PER ACRE AND THE ADDITION MADE BY HIM WAS WITHOUT ANY BASIS. THE ONLY EVIDENCE/MATERIAL AVAILABLE BEFORE THE ASSESSING OFFICER WAS THE SO CALLED STATEMENT OF 'S', WHICH W AS RECORDED BY THE ASSTT. DIRECTOR OF IT (INV.), ON 18 TH SEPT., 2001 IN WHICH HE HAD DEPOSED THAT HE HAD SOLD THE LAND IN QUESTION @ RS. 4 LACS PER ACRE, AND APART FROM THE AMOUNT MENTIONED IN THE REGISTER ED SALE DEED, HE HAD RECEIVED RS. 72 LACS CASH FROM THE ASSESSEE IN FIVE INSTALLMENTS. UNDISPUTEDLY, SAID 'S' SUBSEQUENTLY RETRACTED FROM HIS STATEMENT THE ASSTT. DIRECTOR OF IT (INV.) ITSELF WHEREBY HE HAD CONFIRMED THAT HE HAD NOT RECEIVED ANY AMOUNT OVER AND ABOVE THE CONSIDER ATION STATED IN THE SALE DEED. FURTHER, IT IS ALSO UNDISPUTED POSIT ION THAT BEFORE THE ASSESSING OFFICER SAID 'S' DID NOT APPEAR AND M ADE ANY STATEMENT NOR AN OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO C ONFRONT THE SALE DEED AND CROSS-EXAMINE 'S' ON THE STATEMENT WHICH H E HAD MADE BEFORE THE ASSTT. DIRECTOR OF IT (INV.). IN SPITE O F ALLTHIS EVIDENCE, THE ASSESSING OFFICER MADE THE ADDITION UNDER SECTI ON 69B ONLY ON THE BASIS OF CONJECTURES WHILE OBSERVING THAT IT IS A W ELL KNOWN PRACTICE THAT THE SALE DEEDS OF IMMOVABLE PROPERTIES ARE BEI NG REGISTERED AT ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 17 THE MUCH LOWER RATES THAN THE PREVAILING IN THE MAR KETS. IT IS ALSO DISPUTED FACT THAT AFTER SELLING OF THE LAND, 'S' W AS ASSESSED UNDER THE ACT AND AT THAT TIME THE SALE VALUE OF THE SAID LAN D WAS TAKEN AS INDICATED IN THE REGISTERED SALE DEED AND THAT ASSE SSMENT HAD BECOME FINAL. THE TRIBUNAL HAS DULY APPRECIATED THE EVIDEN CE/MATERIAL AVAILABLE ON THE RECORD AND VARIOUS CONTENTIONS RAI SED BY THE PARTIES, AND THEN CAME TO THE AFORESAID CONCLUSION, WHICH IS A PURE FINDING OF FACT WHICH DOES NOT REQUIRE ANY INTERFERENCE BY THE COURT. THEREFORE, IN THESE APPEALS NO SUBSTANTIAL QUESTION OF LAW IS ARISING FROM THE IMPUGNED ORDER FOR CONSIDERATION OF THE COURT.' 24. THE HON'BLE APEX COURT IN THE CASE OF COMMISSION ER OF INCOME TAX VS. P.V. KALYANASUNDARAM REPORTED IN (2007) 212 CTR (SC) 97, HELD:- 'THE RESPONDENT ASSESSEE VIDE A REGISTERED SALE DEE D DT. 26TH OCT., 1998 PURCHASED CERTAIN LAND AT BRINDAVAN ROAD, FAIR LANDS, SALEM FOR A SUM OF RS. 4.10 LAKHS. DURING A SEARCH OF THE OFFIC E AND RESIDENTIAL PREMISES OF POLIMER NET WORK, CERTAIN NOTES ON LOOS E SHEETS ALLEGEDLY IN THE HANDS OF THE RESPONDENT WERE FOUND AND SEIZE D BY THE DEPARTMENT. IN HIS STATEMENT RECORDED ON 8TH DEC., 1998, THE ASSESSEE SUBMITTED THAT HE COULD NOT REMEMBER AS TO WHY THE NOTINGS HAD BEEN MADE. THE STATEMENT WAS FURTHER CONFIRMED BY ANOTHER STATEMENT ON 11TH DEC., 1998. THE DEPARTMENT ALSO RECORDED THE STATEMENT OF THE VENDOR RAJARATHINAM ON 8TH DEC ., 1998 WHICH TOO WAS CONFIRMED ON 11TH DEC., 1998 IN WHICH HE ADMITT ED THAT HE HAD IN RECEIVED A TOTAL CONSIDERATION OF RS. 34.35 LAKHS A ND THAT THE SUM 4.10 LAKHS REFLECTED IN THE SALE DEED HAD BEEN RECEIVED BY HIM WAY OF A DEMAND DRAFT AND THE BALANCE IN CASH. RAJARATHINAM HOWEVER RETRACTED FROM HIS STATEMENT ON 8TH JAN., 1999 AND FILED AN AFFIDAVIT DEPOSING THAT THE SALE PRICE WAS RS. 4.10 LAKHS ONL Y AND THAT HIS STATEMENTS EARLIER GIVEN TO THE AUTHORITIES WERE IN CORRECT. IN A SUBSEQUENT STATEMENT RECORDED ON 20TH NOV., 2000 RA JARATHINAM AGAIN REVERTED TO HIS EARLIER PORTION AND DEPOSED T HAT THE SALE PRICE WAS RS. 34.85 LAKHS. THE AO CONCLUDED THAT THE SALE CONSIDERATION WAS ACTUALLY RS. 34.85 LAKHS AND NOT RS. 4.10 LAKHS AS HAD BEEN RECITED IN THE SALE DEED. HE ACCORDINGLY ADOPTED THE AFORESAID ENHANCED FIGURE FOR THE PURPOSE OF ASSESSMENT AND MADE AN ADDITION OF RS. 3,75,005 AS UNDISCLOSED INCOME FOR THE BROKEN PERIOD IST APR IL, 1998 TO 8 TH DEC., 1998. THE MATTER WAS THEREAFTER TAKEN TO THE CIT(A) , WHO AFTER EXAMINING THE ENTIRE MATTER, OBSERVED THAT THE STAT EMENTS GIVEN BY RAJARATHINAM COULD NOT BE RELIED UPON MORE PARTICUL ARLY AS THE FLOOR PRICE FIXED BY THE AUTHORITIES FOR SUCH PROPERTY WA S MUCH LOWER THAN THE VALUE WHICH WOULD RESULT IF THE SALE DEED HAD B EEN REGISTERED AT RS. 34.85 LAKHS. THE CIT ACCORDINGLY DELETED THE AD DITION MADE. AN APPEAL WAS THEREAFTER PREFERRED BY THE REVENUE AGAI NST THE ORDER OF THE CIT BEFORE THE TRIBUNAL. THE TRIBUNAL IN ITS OR DER DT. 6TH JULY, 2005 HELD THAT THE NOTINGS ON THE LOOSE PIECES OF PAPER ON THE BASIS OF ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 18 WHICH THE INITIAL SUSPICION WITH REGARD TO THE UNDE RVALUATION HAD BEEN RAISED WERE VAGUE AND COULD NOT BE RELIED UPON AS I T APPEARED THAT THE TOTAL AREA WITH RESPECT TO THE SALE DEEDS AND THAT REFLECTED IN THE LOOSE SHEET WAS DISCREPANT. IT WAS ALSO OBSERVED THAT AS PER THE GUIDELINES FOR REGISTRATION THE FAIR VALUE FOR REGISTRATION ON THE RELEVANT DATE WAS RS. 244 TO RS. 400 PER SQ. FT. AND THE SALE CONSIDE RATION FOR RS. 850 PER SQ.FT. CLAIMED BY THE REVENUE WAS UNREALISTIC A ND IGNORED THE GROUND SITUATION. IT WAS FURTHER HELD THAT THE TAX OF APPROXIMATELY RS. 1,84,000 DETERMINED ON THE BASIS OF THE ADDITION WO ULD NOT SHOW THAT THE ASSESSEE HAD ACQUIESCED IN THE ADDITION MADE BY THE DEPARTMENT OR THAT IT WAS CONCLUSIVE EVIDENCE OF THE SALE PRIC E AS THE DEPOSIT HAD BEEN MADE IN AN OBVIOUS EFFORT TO SAVE HIMSELF FROM FURTHER SUBSTANTIAL QUESTIONS OF LAW WERE RAISED: A. WHETHER OR NOT WHEN THE RETURNS AND THE STATEMEN TS OF THE SELLER ADMIT HIGHER SALE CONSIDERATION ACTUALLY REC EIVED, THE REVENUE IS JUSTIFIED IN FIXING THE SALE CONSIDERATION AT THE H IGHER AMOUNT THAN WHAT HAS BEEN DECLARED? B. WHEN THE ASSESSEE DID NOT GIVE ANY EXPLANATION T O THE NOTINGS FOUND AND AT THE SAME TIME THE REVENUE IS ABLE TO C ORROBORATE THE SAME WITH THE STATEMENT OF THE SELLER FOR THE PURPO SE OF DETERMINATION OF ACTUAL SALE VALUE, WOULD THE LOWER AUTHORITY BE JUSTIFIED IN INTERFERING WITH THE SAME? C. WHEN CONSISTENT SWORN (STATEMENTS) WERE TAKEN IN TO CONSIDERATION ALONG WITH EVIDENCES FOUND AT THE TIM E OF SEARCH, WOULD (THEY) ALL BE LIABLE TO BE REJECTED ON THE BASIS OF ONE STATEMENT IN BETWEEN CONTRADICTING THE EARLIER ONES WHICH WAS AL SO EXPLAINED AWAY AS A RESULT OF INTIMIDATION? THE HIGH COURT RELYING HEAVILY ON THE ORDER OF THE C IT AND THE TRIBUNAL HELD THAT NO SUBSTANTIAL QUESTIONS OF LAW HAD BEEN RAISED AND ACCORDINGLY DISMISSED THE APPEAL. IT IS THIS SITUAT ION THAT THE PRESENT MATTER IS HERE BEFORE US. MR. G.N. VAHANVATI, THE LEARNED SOLICITOR GENERAL H AS AT THE VERY OUTSET RAISED SERIOUS OBJECTION TO THE ORDER OF THE HIGH COURT POINTING OUT THAT DIVISION BENCH HAD MERELY PLAGIARIZED SUBS TANTIAL PORTIONS FROM THE ORDER OF THE CIT AND TRIBUNAL IN ARRIVING AT ITS CONCLUSION AND NO INDEPENDENT ASSESSMENT ON THE QUESTIONS OF LAW T HAT AROSE FOR CONSIDERATION, HAD BEEN MADE. HE ALSO POINTED OUT TH AT SEVERAL QUESTIONS OF LAW PERTAINING TO THE IMPLICA TIONS OF THE STATEMENTS AND THE COUNTER STATEMENTS MADE BY RAJAR ATHINAM DID ARISE IN THE CASE AND THE MATTER HAD NOT BEEN DEALT WITH BY THE HIGH COURT IN THAT PERSPECTIVE AND IT WAS THEREFORE APPR OPRIATE THAT THE MATTER BE REMITTED FOR FRESH DECISION. THE LEARNE D COUNSEL REPRESENTING THE ASSESSEE RESPONDENT HAS HOWEVER PO INTED OUT THAT ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 19 THE CIT IN PARTICULAR, HAD AFTER A VERY ELABORATE DISCUSSION OF THE MATTER, CONCLUDED ON A FINDING OF FACT WITH REGARD TO THE NATURE OF THE TRANSACTION AND THIS VIEW HAD BEEN ACCEPTED BY THE TRIBUNAL AS WELL, HAS ACCORDINGLY SUBMITTED THAT NO SUBSTANTIAL QUEST IONS OF LAW HAVE BEEN RAISED IN THIS MATTER AND THE ISSUES RAISED WE RE PURELY QUESTIONS OF FACT. WE HAVE HEARD THE LEARNED COUNSEL FOR THE PARTIES A ND HAVE GONE THROUGH THE RECORD. IT IS TRUE THAT THE DIVISION BE NCH OF THE HIGH COURT HAS BORROWED EXTENSIVELY FROM THE ORDERS OF THE TRI BUNAL AND THE CIT AND PASSED THEM OFF AS IF THEY WERE THEMSELVES THE AUTHORS. WE FEEL THAT QUOTING FROM AN ORDER OF SOME AUTHORITY PARTIC ULARLY SPECIALIZED ONE CANNOT PER SE BE FAULTED AS THIS PROCEDURE CAN OFTEN HELP IN MAKING FOR BREVITY AND PRECISION, BUT WE AGREE WITH MR. VAHANAVATI TO THE EXTENT THAT ANY 'BORROWED WORDS' USED IN A JUDG MENT MUST BE ACKNOWLEDGED AS SUCH IN ANY APPROPRIATE MANNER AS A COURTESY TO THE TRUE AUTHOR(S). BE THAT AS IT MAY, WE ARE OF THE OP INION THAT THE THREE QUESTIONS REPRODUCED ABOVE CAN, IN NO WAY, BE CALLE D SUBSTANTIAL QUESTIONS OF LAW. THE FACT AS TO THE ACTUAL SALE PR ICE OF THE PROPERTY, THE IMPLICATION OF THE CONTRADICTORY STATEMENTS MAD E BY RAJARATHINAM OR WHETHER RELIANCE COULD BE PLACED ON THE LOOSE SH EETS RECOVERED IN THE COURSE OF THE RAID IS ALL QUESTIONS OF FACT. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE HIGH COURT. ACCORDINGL Y, WE DISMISS THE APPEAL.' IN VIEW OF THE ABOVE DETAILED ANALYSIS OF FACTS AND CIRCUMSTANCES OF THE CASE AND ANALYSIS OF JURISDICTIONAL PRONOUNCEME NT ON THE ISSUE, THE ADDITION MADE BY THE ASSESSING OFFICER BY PRESUMING THE SALE CONSIDERATION AT RS. 11.05 CRORE PER ACRE IS DIRECT ED TO BE DELETED. 8. FROM THE RIVAL CONTENTIONS AND THE MATERIAL ON R ECORD, THE FOLLOWING FACTS EMERGE: (I) THE AGREEMENT SEIZED WAS ONLY A PHOTOCOPY OF T HE ORIGINAL. (II) IT WAS SEIZED NOT FROM THE ASSESSEE, BUT FROM THE THIRD PARTY. (III) THE SELLER REFUSED TO IDENTITY THE AGREEMENT . (IV) THE BUYER REFUSED TO IDENTIFY THE AGREEMENT. (V) THE WITNESSES TO THE AGREEMENT REFUSED TO IDEN TIFY IT. ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 20 (VI) THE AO DID NOT MAKE TOTAL ADDITION ON ACCOUNT OF TOTAL VALUE OF THE TRANSACTIONS IN THE CASES OF THE OTHER BUYER S OR SELLERS, AS MENTIONED IN THE AGREEMENT. VII) THE ASSESSEE WAS NOT A PARTY TO THE AGREEMENT. VIII) THE ASSESSEE WAS NOT WITNESS TO THE AGREEMENT . IX) THE ASSESSEE WAS NOT RELATED TO EITHER ANY PART Y OR ANY WITNESS TO THE AGREEMENT. X) THE ASSESSEE PURCHASED HIS LAND DIRECTLY FROM P ISCO. XI) THE ASSESSEE PURCHASED THE LAND AT THE PREVALENT CI RCULAR RATE. XII) THE ASSESSEE PAID DUE STAMP DUTY ON THE TRANSA CTION XIII) THE PURCHASE DEED OF THE ASSESSEE WAS REGISTE RED WITH THE REGISTRAR AT JALANDHAR. XIV) IN THE ASSESSEES PURCHASE DEED, THE RATE MENTIONED WAS OF RS. 4 CRORE PER ACRE = 2.50 LAKHS PER MARLA, AS AGA INST THAT OF RS.11.05 CRORE PER ACRE, AS MENTIONED IN THE AGR EEMENT SEIZED. XV) ACTION ON THE BASIS OF THE AGREEMENT SEIZED WA S WARRANTED IN THE CASES OF THE PARTIES THERETO, DUE TO THE PRE SUMPTION U/S 132(4A) OF THE ACT, WHICH PRESUMPTION, NOTICEAB LY, IS REBUTTABLE. XVI) NO SUCH ACTION CAN BE TAKEN IN THE CASE OF A P ARTY WHOSE TRANSACTION WAS WITH REGARD TO LAND CONTIGUOUS OR S IMILARLY SITUATED TO THE LAND MENTIONED IN THE AGREEMENT SEI ZED. XVII) NO ACTION IS CALLED FOR IN A CASE OF TRANSACT ION CONSEQUENTIAL TO THE TRANSACTION MENTIONED IN THE AGREEMENT SEIZE D. XVIII) THERE IS NO EVIDENCE OF UNACCOUNTED INVESTME NT BY THE ASSESSEE. XIX) THE AO HIMSELF CLARIFIED TO THE ASSESSEE THAT THE SALE CONSIDERATION IN THE AGREEMENT SEIZED WAS TAKEN FOR THE PURPOSE OF COMPARATIVE RATE ONLY. XX) THE LAND PURCHASED BY THE ASSESSEE WAS DIFFERE NT FROM THAT MENTIONED IN THE AGREEMENT SEIZED. ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 21 XXI) IT IS THE BURDEN OF THE DEPARTMENT TO PROVE UN DER-STATEMENT OF SALE CONSIDERATION. XXII) THIS BURDEN HAS NOT BEEN DISCHARGED. XXIII) THERE IS NO POSITIVE EVIDENCE AGAINST THE AS SESSEE. XXIV) THUS, THE AOS PRESUMPTION DID NOT MATERIALIZE INTO CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE. XXV) SUCH A PRESUMPTION CANNOT BE ACCORDED THE STATUS OF FOOL- PROOF EVIDENCE AGAINST THE ASSESSEE. XXVI) SUCH A PRESUMPTION CANNOT LEAD TO A CONCLUSION OF U NDER INVESTMENT BY THE ASSESSEE, LIABLE FOR ADDITION. 9. THE LD. CIT(A) HAS DULY CONSIDERED ALL THE ABOV E SAID FACTS AS WELL AS THE RELEVANT CASE LAWS. THERE HAS BEEN NO EFFECT IVE REBUTTAL TO THE WELL REASONED ELABORATE FINDINGS RECORDED BY THE LD. CI T(A). 10. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS PASSED A DETAILED, WELL REASONE D AND WELL VERSED ORDER, WHICH DOES NOT REQUIRE ANY INTERFERENCE AND ACCORDI NGLY, THE SAME IS UPHELD. GROUND NO.1 IS, THUS, REJECTED. 11. AS REGARDS GROUND NO.2, THE DEPARTMENT HAS CONT ENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .14,02,104/- ON ACCOUNT OF DISALLOWANCE OF INTEREST UNDER SECTION 3 6(1)(III) OF THE I.T. ACT. 12. THE LD. DR, RELIED ON THE ORDER OF THE ASSESSIN G OFFICER. ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 22 13. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A) AND REITERATED THE S UBMISSIONS MADE BEFORE HIM. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE CA REFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE ORDER OF THE LD. CIT(A). THE RELEVANT FINDINGS GIVEN BY THE LD. CIT( A) QUA THIS ISSUE, IN HIS ORDER IN PARAS 25 TO 29 OF THE ORDER ARE AS FOLLOWS : 25. THE GROUND OF APPEAL AT SR. NO. 3 PERTAINS TO THE CLAIM OF THE APPELLANT THAT THE ASSESSING OFFICER HAS WRONGL Y MADE DISALLOWANCE OF RS. 14,00,000/- U/S 36(L)(III). THE ASSESSING OFFICER HAS BROUGHT ON RECORD THAT THE ASSESSEE HAS MADE INTEREST FREE ADVANCED AND LOANS TO HIS FAMILY MEMB ERS/SISTER CONCERNS IN THE FOLLOWING MANNER:- S.NO. NAME OF ENTITY ADVANCE AMOUNTS (IN LACS) 1. ADVANCES PAID SATPAL COLD 1 2. | SH. DALBIR SINGH 1 3. SH. GURBACHAN SINGH 4.20 4 . M/S HARMAN BUILDERS PVT. LTD. 67.93 5. SH. INDERPAL SINGH S/O TAJINDER SINGH 2 6. SH. JAGJIT SINGH 3 7. SH. NAROTTAM SINGH 0.50 8. SMT. RAMINDER KAUR 25.96 9. SH. RAVINDER SINGH 1 10. SH. SATISH KUMAR 8 11. M/S VENUS BUILDERS PVT. LTD. 2 TOTAL 116.59 AT THE SAME TIME HAD DEBITED BANK INTEREST TO THE T UNE OF RS. 22.19 LACS. THE ASSESSING OFFICER REQUIRED THE ASSE SSEE TO EXPLAIN AS TO HOW THE INTEREST BEARING FUNDS COULD BE SAID TO BE USED FOR THE PURPOSES OF BUSINESS ESPECIALLY IN FAC E OF INTEREST FREE LOANS TO FRIENDS/SISTER CONCERNS HIGHLIGHTED A BOVE. NO ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 23 EXPLANATION ON THE SAID ISSUE BEFORE THE ASSESSING OFFICER AS RECORDED IN THE ASSESSMENT YEAR AT PARA 5.2. THE AS SESSING OFFICER THEREFORE PROCEEDED TO DISALLOW 12% ON THE ENTIRE AMOUNT OF ADVANCES LEADING TO DISALLOWANCE OF RS.14 ,00,000/-. 26. DURING THE COURSE OF APPELLATE PROCEEDINGS THE AR OF THE APPELLANT SUBMITTED HIS ARGUMENTS ON THE ISSUE AS U NDER:- 'SIR, IT IS SUBMITTED THAT DURING THE YEAR UNDER CO NSIDERATION ASSESSEE HAS MADE CERTAIN ADVANCES TO THE RELATIVE PERSONS AS SUNDRY DEBTORS, SISTER CONCERNS OF THE ASSESEE AND ALSO TO THE OUTSIDER TO THE TUNE OF RS. 1,16,59,000/- LISTED IN PARA 5 AT PAGE NO. 12 OF THE ASSESSMENT ORDER AND ON THIS OUTSTAND ING AMOUNT OF RS.1,16,59,000/- AS ON 31.03.2009 INTEREST @ 12% TO THE TUNE OF RS.14,00,000/- HAS BEEN DISALLOWED. SIR, IT IS SUBMITTED THAT WHILE FRAMING ASSESSMENT THE LD. ASSESSING OFFICER STATED THAT 'NO EXPLANATION ON TH E ABOVE ISSUE HAS BEEN RECEIVED TILL DATE, SINCE THE ASSESSEE HAS USED THE INTEREST BEARING FUNDS FOR NON-BUSINESS PURPOSE BY THE WAY OF LOAN/ADVANCES TO THE RELATIVE/SISTER CONCERN OF THE ASSESSEE AS DISCUSSED IN PARA 2 OF SHOW CAUSE DATED 13.01.2014. IN VIEW OF THE ABOVE, IT IS PROVED THAT THE ASSESSEE HAS NOTHI NG TO SAY IN THIS REGARD AS THE ISSUE RAISED ON ACCOUNT OF DISA LLOWANCE OF INTEREST AMOUNTING TO RS. 14,00,000/- AS DISCUSSED ABOVE IS DISALLOWED U/S 36(I)(III) OF THE ACT, 1961 BY RELYI NG UPON THE DECISION OF ABHISHEK INDUSTRIES VS. CIT AND RS. 14, 00,000/- IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE'.SI R, IN THIS REGARD IT IS SUBMITTED THAT ASSESSEE HAS DULY FILED HIS SUBMISSION BEFORE THE LD. ASSESSING OFFICER BUT WE REALLY DO NOT KNOW WHY THE LD. ASSESSING OFFICER WHILE FRAMING AS SESSMENT, SUBMISSION OF ASSESSEE HAS NOT CONSIDERED, SUBMISSI ON OF ASSESSEE IS REPRODUCED HEREIN BELOW FOR YOUR KIND P ERUSAL: 'AS REGARD INTEREST FREE LOAN/ ADVANCES IT IS SUBMI TTED THAT DURING THE YEAR UNDER CONSIDERATION NO FRESH INTERE ST FREE ADVANCE EXCEPT BUSINESS TRANSACTION HAS BEEN MADE B Y THE ASSESSEE. HOWEVER, THERE IS AN OLD OUTSTANDING INTER EST FREE ADVANCE OF RS. 4,20,000/- TO FATHER IN LAW S. GURBA CHAN SINGH AGAINST WHICH ASSESSEE HAS CAPITAL BALANCE TO THE T UNE OF RS. 2,65,76,305/- AND INTEREST FREE LOANS RECEIVED OF R S. 18,58,000/- ON WHICH NO INTEREST HAS BEEN PAID BY T HE ASSESSEE DURING THE YEAR UNDER CONSIDERATION.' SIR, IT IS SUBMITTED THAT THE LD. ASSESSING OFFICER MADE DISALLOWANCE OF INTEREST AMOUNTING TO RS. 14 LACS U /S 36(L)(III) OF THE ACT WITHOUT CONSIDERING THE SUBMISSION OF ASSES SEE. DURING ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 24 THE YEAR UNDER CONSIDERATION ASSESSEE WAS HAVING SU FFICIENT INTEREST FREE FUNDS AVAILABLE WITH HIM OUT OF WHICH HE HAS TRIACLE CERTAIN INTEREST FREE LOAN/ADVANCES DETAIL OF THE S AME IS AS FOLLOWS: INTEREST FREE FUNDS AVAILABLE AMOUNT INTEREST FREE LOANS/ADVANCES TO RELATIVES/NON RELATIVES AMOUNT CAPITAL OF S. KULWINDER SINGH 2,65,76,30 TO OUTSIDER 18,00,000 INTEREST FREE LOAN RECEIVED DETAIL OF THE SAME AS BELOW: 18,58,000 TO RELATIVES 98,59,000 HIMSON EXPORTS (NON RELATIVE) 2. 3,00000/- JALAANDHAR CONST. CO. (NON RELATIVE) 5,00000/- 3. JASWANT SINGH & SONS(NON RELATIVE) 5,00000/- 4. RAJINDERA DEP & ADV.LTD.(NON RELATIVE)5,58,000/- TOTAL 2,84,34,305 TOTAL 1,16,59,000 SIR, IT IS SUBMITTED THAT IT HAS BEEN HELD BY THE V ARIOUS HON'BLE COURTS THAT IF THE ASSESSEE HAVE SUFFICIENT INTERES T FREE FUNDS AVAILABLE WITH HIM TO MEET ITS INTEREST FREE INVEST MENT AND AT THE SAME TIME IT AD RAISED A LOAN THEN IT CAN BE PR ESUMED THAT INVESTMENT WERE MADE ON THE INTEREST FREE FUNDS. IN SUPPORT OF OUR CONTENTION RELIANCE IS BEING PLACED UPON THE FO LLOWING DECISIONS: CIT VS. RELIANCE UTILITIES & POWER LTD. (2009) 221 CTR 435 WHEREIN THE HON'BLE HIGH COURT OF BOMBAY HAS HELD T HAT 'BOTH IN THE ORDER OF THE CIT(A) AS ALSO THE TRIBUNAL, A CLEAR FINDING IS RECORDED THAT ASSESSEE HAD INTEREST FREE FUNDS OF I TS OWN WHICH ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 25 HAS BEEN GENERATED IN THE COURSE OF THE YEAR COMMEN CING ON 1.4.1999. APART FROM THAT IN THE TERMS OF THE BALAN CE SHEET THERE WAS A FURTHER AVAILABILITY OF RS. 398.19 CROR ES INCLUDING RS. 180 CRORES OF SHARE CAPITAL. IN THIS CONTEXT, T HE FINDING OF FACTS RECORDED BY CIT(A) AND TRIBUNAL AS TO AVAILAB ILITY OF INTEREST FREE FUNDS REALLY CANNOT BE FAULTED. IF TH ERE BE INTEREST FREE FUNDS AVAILABLE WITH ASSESSEE WHICH IS SUFFICI ENT TO MEET ITS INVESTMENT AND AT THE SAME TIME THE ASSESSEE HAD RA ISED A LOAN IT CAN BE PRESUMED THAT INVESTMENT WERE FROM THE IN TEREST FREE FUNDS AVAILABLE. SIR, FACTS OF THE CASE CITED ABOVE ARE SIMILAR TO O UR CASE AS IN OUR CASE ASSESSEE COMPANY IS HAVING ABOUT RS. 2,84, 34,305/- INTEREST FREE FUNDS WHEREAS IF FOR ARGUMENT SAKE IT IS ADMITTED THAT ASSESSEE ADVANCE RS. 1,16,59,000/- AS INTEREST FREE LOANS EVEN THEN FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT NO ADDITION CAN BE MADE. BUT IN THE PRESENT CASE WE HAVE NOT MADE ADVANCES WHICH ARE INTEREST FREE BUT THESE ARE TRADE ADVANCES SO, IT IS REQUESTED THAT ADDITION MADE BY THE LD. ASSESSING OFFICER MAY KINDLY BE DELETED.' 27. THE AR OF THE APPELLANT FURTHER SUBMITTED CALCU LATION OF INTEREST IN RESPECT OF AMOUNTS GIVEN FREE OF INTER EST AND INTEREST IN RESPECT OF AMOUNTS TAKEN FREE OF INTE REST AS FOLLOWS:- 'IN ADDITION TO OUR EARLIER SUBMISSIONS AND AS REQU IRED BY YOUR GOODSELF WITH REGARD TO DISALLOWANCE ON ACCOUNT OF INTEREST FREE ADVANCES, WE SUBMIT AS UNDER:- WE ARE ENCLOSING HEREWITH COPIES OF ACCOUNT OF ALL THE FAMILY MEMBERS AND SISTER CONCERNS ETC. WE HAVE CALCULATED INTEREST ON ALL THE DEBIT/CREDIT BALANCE @ 12% P.A. CHART DE PICTING INTEREST CHARGEABLE AND PAYABLE ON THESE AMOUNTS ON PRODUCT BASIS (DAY-WISE) IS AS UNDER:- R PARTICULARS INTEREST CHARGEABLE @ 12% ON DEBIT BALANCES INTEREST PAYABLE @ 12% ON CREDIT BALANCES ADVANCE FOR SATPAL COLD 12,000.00 DALBIR SINGH 12,000.00 GURBACHAN SINGH 50,400.00 HARMAN BUILDERS PVT. LTD. 896,835.00 INDERPAL SINGH 24,000.00 ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 26 JAGJIT SINGH 36,000.00 NAROTAM SINGH 6,000.00 RAMINDER KAUR 311,520.00 RAVINDER SINGH 12,000.00 SATISH KUMAR 96,000.00 VENUS BUILDERS PVT. LTD. 24,000.00 KULWINDER SINGH- CAPITAL 2,497,899.00 HIMSONS EXPORTS 36,000.00 JALANDHAR CONSTRUCTION CO. LTD. 60,000.0 JASWANT SINGH & SONS 60,000.00 R AJINDRA DEPOSITS & ADVANCES LTD. 66,960.00 HARPREET SINGH 162,000.00 TOTAL 1,480,755.00 2,882,859.00 SIR, CALCULATION, AS REQUIRED BY YOUR GOOD SELF CAL CULATING DATE WISE INTEREST ON CREDIT OUTSTANDING AND ADVANCES GI VEN ARE ENCLOSED HEREWITH. THIS SHOWS THAT THE ASSESSEE HAS USED MORE INTEREST FREE FUNDS THEN FUNDS BEING USED BY THE FAMILY MEMBERS. HENCE, DISALLOWANCE OF RS.14,0,000/- IS TOTALLY UNJUSTIFIE D. HENCE, WE PRAY YOUR GOODSELF TO GIVE US RELIEF.' 28. THE PERUSAL OF THE CALCULATION CHART GIVEN BY THE A PPELLANT SHOWS THAT EVEN THE AMOUNTS OF CAPITAL OF SH. KULWI NDER SINGH IN THE BUSINESS HAS BEEN TAKEN TO BE PART OF THE CA LCULATION, MEANING THEREBY THE SAME HAD ALSO BEEN TREATED AS F UNDS AVAILABLE FREE OF INTEREST. I DON'T AGREE WITH THE VIEW OF THE APPELLANT ON THE ISSUES AS THE FUND DEPLOYED BY THE ASSESSEE AS CAPITAL WHICH ARE MEANT TO EARN PROFITS AND SEPARAT E INTEREST ON THE SAME TO DECIDE THE ISSUE OF DISALLOWANCE COULD NOT BE DONE. THEREFORE, NO INTEREST IS PAYABLE TO THE APPELLANT FOR DEPLOYING ITS CAPITAL IN ITS OWN BUSINESS WHICH MEANS THE CLA IM INTEREST PAYABLE AT RS. 24,97,899/- GOES OUT OF CALCULATION. 29. I HAVE CONSIDERED THE FACTS OF THE CASE, THE B ASIS OF ADDITION MADE BY THE ASSESSING OFFICER AND THE ARGU MENTS OF THE AR ON THE ISSUE. IT IS SEEN THAT THE ENTIRE SET OF ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 27 CIRCUMSTANCES SHOW THAT THE APPELLANT HAS AVOIDED T O GIVE DATA FROM THE BOOKS OF ACCOUNT TO SHOW THE BUSINESS USE OF INTEREST BEARING FUNDS. IN THE CIRCUMSTANCES THE VIEW OF THE ASSESSING OFFICER THAT THE INTEREST BEARING FUNDS HAVE BEEN D IVERTED TO ADVANCE INTEREST FREE LOANS CANNOT BE SAID TO BE AR BITRARY. IN THE CIRCUMSTANCES THE DISALLOWANCE IS RESTRICTED TO RS. 10,,95,795/-, IN VIEW OF THE COMMENTS OF THE UNDERSIGNED IN PARA 21 OF THIS APPELLATE ORDER. 15. IT IS SEEN THAT THE LD. CIT(A) HAS DULY TAKEN I NTO CONSIDERATION AND GIVEN CREDIT TO THE ASSESSEE, OF INTEREST PAYABLE @ 12% ON CREDIT BALANCES OF HIMSONS EXPORTS RS.36,000/-, JALANDHAR CONSTRUCT ION CO. LTD. RS.60,000/-, JASWANT SINGH & SONS RS.60,000/-, RAJI NDRA DEPOSITS & ADVANCES LTD. RS.66,960/- AND HARPREET SINGH RS.1,6 2,000/-. THE LD. CIT(A) HAS ALSO TAKEN COGNIZANCE OF THE INTEREST CH ARGEABLE @ 12% ON THE DEBIT BALANCES OF ADVANCE FOR SATPAL COLD RS.12,000 /-, DALBIR SINGH RS.12,000/-, GURBACHAN SINGH RS.50,400/-, HARMAN BU ILDERS PVT. LTD., RS.8,96,835/-, INDERPAL SINGH RS.24,000/-, JAGJIT S INGH RS.36,000/-, NAROTAM SINGH RS.6,000/-, RAMINDER KAUR RS.3,11,520 /-, RAVINDER SINGH RS.12,000/-, SATISH KUMAR RS.96,000/- AND VEN US BUILDERS PVT. LTD., RS.24,000/-. IT IS IN THIS MANNER THAT THE DI SALLOWANCE HAS BEEN RESTRICTED TO RS.10,95,795/-, TAKING OUT THE SUM OF INTEREST PAYABLE AMOUNTING TO RS.24,97,899/- REPRESENTING THE CAPITA L BROUGHT IN BY SH. KULWINDER SINGH. 16. THE LD. CIT(A) HAS OBSERVED THAT AS AVAILABLE F ROM THE CALCULATION CHART GIVEN BY THE ASSESSEE, EVEN THE AMOUNT OF CAP ITAL OF SH. KULWINDER SINGH BROUGHT INTO THE BUSINESS WAS TAKEN TO BE A P ART OF THE ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 28 CALCULATION, TREATING THIS AMOUNT TO BE FUNDS AVAI LABLE FREE OF INTEREST; AND THAT THE CAPITAL IS MEANT TO EARN PROFITS AND S EPARATE INTEREST THEREON TO DECIDE THE ISSUE OF DISALLOWANCE COULD N OT HAVE BEEN DONE. IT WAS ON THIS BASIS THAT THE LD. CIT(A) HELD THAT NO INTEREST WAS PAYABLE TO THE ASSESSEE ON THIS AMOUNT OF RS.24,97,899/-. 17. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD . CIT(A). THE ASSESSEE HAS NOT CHALLENGED THE SAME. FINDING NO ERROR THERE WITH, THE SAME IS HEREBY UPHELD. ACCORDINGLY NO.2 IS UPHELD. 18. THE APPEAL OF THE REVENUE IN ITA NO.659(ASR)/20 14 IS, ACCORDINGLY, DISMISSED. 19. NOW, WE TAKE UP THE APPEAL OF THE REVENUE IN IT A NO.660(ASR)/2014 FOR THE ASSESSMENT YEAR 2010-11. T HE ISSUES IN DISPUTE IN THIS APPEAL ARE EXACTLY SIMILAR TO THOSE WE HAVE DECIDED HEREINABOVE IN ITA NO.659(ASR)/2014, FOR THE ASSESS MENT YEAR 2009-10. THEREFORE, THE FINDINGS GIVEN THEREIN WILL APPLY EQ UALLY, MUTATIS MUTANDIS, TO THIS APPEAL AS WELL. HENCE, THIS APPEA L OF THE DEPARTMENT IS ALSO DISMISSED. 20. AS REGARDS THE APPEAL IN ITA NO.666(ASR)/2014 F OR THE A.Y. 2009- 10, IN THE CASE OF HARMAN BUILDERS, JALANDHAR, TH E ISSUES IN INVOLVED IN THIS APPEAL ARE EXACTLY SIMILAR TO THOSE WE HAVE DE CIDED HEREINABOVE IN ITA NO.659(ASR)/2014, FOR THE ASSESSMENT YEAR 2009- 10. THEREFORE, THE ITA NOS. 659, 660 & 66(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 29 FINDINGS GIVEN THEREIN WILL APPLY EQUALLY, MUTATIS MUTANDIS, TO THIS APPEAL AS WELL. HENCE, THIS APPEAL OF THE DEPARTMEN T IS ALSO DISMISSED. 13. IN THE RESULT, ALL THE THREE APPEALS ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/08 / 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 01/08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES:I) SH.KULWINDER SINGH, JALANDHAR (II) M/S. HARMAN BUILDERS, JALANDHAR. 2. THE ACIT, CC-1, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER