Parameshwar Agarwal, Hyderabad V. ACIT, Hyderabad

ITA 746/HYD/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9826 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 12-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K KAMAKSHI
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained investment; Set aside
• Section: 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO. 746/H/2007 ASSESSMENT YEAR 2002-03 SHRI PARAMESWAR AGARWAL AVANTI NAGAR, HYDERABAD (A ABQPA 4834 P) VS THE ACIT, CENTRAL CIRCLE, HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. MURALI MOHAN RAO RESPONDENT BY : SMT. K. KAMAKSHI O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT(A) I, HYDERABAD DATED 26.2 .2007 AND PERTAINS TO THE ASSESSMENT YEAR 2002-03. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN ITS AP PEAL IS WITH REGARD TO SUSTAINING THE ADDITION MADE TOWARDS ON MONEY PA ID ON PURCHASE OF PROPERTY AT AVANTHI NAGAR, BASHEERBAGH, HYDERABAD. 3. BRIEF FACTS OF THE CASE ASSESSEE ARE THAT A S EARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND OTHER GROUP CONCERNS ON 8.10.2003. DURING THE COURSE OF SEARCH , AN AGREEMENT OF SALE DATED 12.10.2001 BETWEEN SRI ABDUL KHADER ZIRAPURY, OWNER OF THE HOUSE PROPERTY AND THE ASSESSEE WAS FOUND. THE SAID PROP ERTY CONSISTS OF CELLAR, GROUND AND TWO UPPER FLOORS. THE AGREEMENT WAS EXE CUTED IN A NON JUDICIAL STAMP PAPER. THE AGREEMENT WAS DULY SIGN ED BY THE VENDOR OF THE PROPERTY SHRI ABDUL KHADER ZIRAPURY AND WITNESSED B Y SMT. SHAKINA, WIFE OF THE VENDOR AND SMT. DEVI, WIFE OF THE ASSESSEE. AS PER THE SAID SALE AGREEMENT, THE PROPERTY WAS VALUED AT RS.94 LAKHS A ND THE MODE AND ITA NO.746/H/2007 SHRI PARAMESHWAR AGARWAL, HYDERABAD 2 2 SCHEDULE OF PAYMENT WAS CLEARED MENTIONED. AS ON T HE DATE OF AGREEMENT, AN ADVANCE AMOUNT OF RS.5 LAKHS WAS ALREADY PAID BY THE ASSESSEE FOR WHICH ACKNOWLEDGEMENT WAS GIVEN. 4. THE PROPERTY WAS SOLD VIDE SALE DEED EXECUTED ON 23.1.2002. THE PROPERTY WAS SOLD TO THREE PERSONS I.E. GROUND FLOOR TO THE ASSESSEE, FIRST FLOOR TO SHRI PRAVEEN KUMAR AGARWAL, SON OF T HE ASSESSEE AND THE SECOND FLOOR TO SHRI PRADEEP KUMAR AGARWAL, ANOTHER SON OF THE ASEEL. AS PER THE SALE DEEDS, THE VALUE OF THE PROPERTY MENTI ONED IN RESPECT OF THE ASSESSEE WAS RS.10 LAKHS AND IN RESPECT OF BOTH THE SONS WAS RS.6.5 LAKHS EACH. THUS, THE TOTAL VALUE OF THE PROPERTY AS PER THE THREE SALE DEEDS TO THE FAMILY OF FATHER AND TWO SONS WAS RS.23 LAKHS A S AGAINST THE VALUE OF RS.94 LAKHS MENTIONED IN THE SALE AGREEMENT. THE P ORTION OF THE PROPERTY SOLD TO THE ASSESSEE WAS REGISTERED ON 23.1.2002 AN D THE PORTIONS OF THE PROPERTY SOLD TO THE TWO SONS WERE REGISTERED ON 25 .7.2003. 5. THE ASSESSEE, BEFORE THE ASSESSING OFFICER DIS PUTED THE PAYMENT OF ON MONEY AND EVEN INITIALLY DISPUTED THA T HIS WIFE WAS A WITNESS TO THE SIGNING OF THE SALE AGREEMENT. THE ASSESSEE MENTIONED THAT HE DOES NOT KNOW THE VENDOR AND THE AMOUNTS WERE PA ID BY SHRI EASHWARLAL AGARWAL, WHO WAS HANDLING THE FAMILY SET TLEMENT MATTERS. 6. DURING THE COURSE OF ENQUIRIES, THE VENDOR SHR I A.K. ZIRAPURY ADMITTED THAT TO HAVE RECEIVED MONEY IN EXCESS OF W HAT IS MENTIONED IN THE SALE DEEDS AND HE HAS ADMITTED TO HAVE RECEIVED RS. 64 LAKHS FOR THE SALE OF THE HOUSE PROPERTY AS AGAINST TOTAL OF RS.23 LAKHS MENTIONED FOR THE PROPERTY IN THE THREE SALE DEEDS. HOWEVER, THIS IS LESSER THAN THE TOTAL VALUE MENTIONED IN THE SALE AGREEMENT WHICH IS RS.9 4 LAKHS. ITA NO.746/H/2007 SHRI PARAMESHWAR AGARWAL, HYDERABAD 3 3 7. IN VIEW OF THE FACTUAL POSITION, THE ASSESSING OFFICER WAS OF THE VIEW THAT ON MONEY HAS BEEN PAID OVER AND ABOVE THE VALUE MENTIONED IN THE SALE DEEDS AND THE AMOUNT HAS BEEN PAID BY THE ASSESSEE OUT OF HIS UNEXPLAINED SOURCES FOR THE PURCHASE OF THE ENTIRE PROPERTY WHICH WAS ACTUALLY REGISTERED IN THE NAME OF THE ASSESSEE AND HIS TWO SONS. SINCE THE SALE AGREEMENT WAS MADE FOR RS.94 LAKHS, THE AS SESSING OFFICER WAS OF THE VIEW THAT THE PROPERTY COULD NOT HAVE BEEN SOLD FOR AN AMOUNT LESS THAN THAT, WITHOUT ANY ADEQUATE REASONS AND THE STA TEMENT OF THE VENDOR ADMITTING RECEIPT OF RS.64 LAKHS IS ONLY A PARTIAL ADMISSION APPARENTLY GIVEN TO SUPPRESS HIS UNEXPLAINED INVESTMENTS. THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE INITIALLY REFUSED THAT HI S WIFE IS A WITNESS TO THE SALE AGREEMENT BUT LATER ON ACCEPTED THE FACT THAT WHEN THE SIGNATURE WAS VERIFIED AND HE WAS CONFRONTED. ACCORDINGLY, THE A SSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE TRIED TO HIDE THE REL EVANT FACTS AND ALSO THE PAYMENT OF ON MONEY. ACCORDINGLY, AFTER DETAILED D ISCUSSION, THE ASSESSING OFFICER ASSESSED THE EXTRA AMOUNT OF MONE Y AMOUNTING TO RS.84 LAKHS WHICH WAS PAID OVER AND ABOVE THE AMOUNT OF R S.10 LAKHS SHOWN BY THE ASSESSEE. ON APPEAL, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ASSESS THE ON MONEY OF RS.84 LAKHS AND IT HAS BEEN PAID BY THE FAMILY FOR PROPERTY HAS TO BE SHARED BETWEEN THE FATHER AND HI S TWO SONS SHRI PRAVEEN KUMAR AGARWAL, SHRI PRADEEP KUMAR AGARWAL I N THE RATIO OF 10: 6.5 : 6.5 AND IF NECESSARY TO TAKE APPROPRIATE STEP S TO ASSESS IN THE HANDS OF THE ASSESSEES SONS. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 8. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US SUBMITTED THAT THE DEPAR TMENT HAS NOT GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE VENDORS WHOSE STAT EMENTS WERE RELIED UPON AND THERE WAS NO CONCLUSIVE EVIDENCE REGARDING THE RECEIPT OF ON MONEY AND THE ADDITION IS BASED ON ONLY SURMISES AND CONJECTURES. ITA NO.746/H/2007 SHRI PARAMESHWAR AGARWAL, HYDERABAD 4 4 9. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL RE PRESENTATIVE SUBMITTED THAT THERE WAS A SALE AGREEMENT EXECUTED ON 12.10.2001 IN A NON JUDICIAL STAMP PAPER AND WHICH WAS DULY SIGNED BY VENDOR SHRI ABDUL KHADER ZIRAPURY AND SAME WAS WITNESSED BY TWO WITNE SSES I.E., THE VENDORS WIFE SMT. SHAKINA AND SMT. DEVI, WIFE OF T HE ASSESSEE. AS PER SALE AGREEMENT THE PROPERTY WAS VALUED AT RS.94 LAK HS AND THERE IS NO REASON FOR REGISTERING THE PROPERTY FOR A LESSER VA LUE THOUGHT IT WAS IN THE SALE AGREEMENT MENTIONED AS RS.94 LAKHS. THE LEARN ED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE WAS AN UNSIGNED DECLARATION WHEREIN THE CONSIDERATION WAS SHOWN AS RS.94 LAKHS. IT SUP PORTS THE RECEIPT OF ON MONEY BY THE ASSESSEE. HE RELIED ON THE ORDER OF THE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIALS AVAILABLE ON RECORD. THE MAIN GRIEVANCE OF THE ASS ESSEE IN THIS REGARD IS WITH REGARD TO NON FURNISHING OF THE STATEMENT COLL ECTED FROM THE VENDOR. BUT AS SEEN FROM THE FACTS, THE MATTER WITH REGARD TO SALE CONSIDERATION OF RS.94 LAKHS WAS PUT TO THE ASSESSEE FOR WHICH THE A SSESSEE STATED THAT THE PROPERTY WAS PURCHASED BY HIM AND HIS TWO SONS AT A CONSIDERATION OF RS.23 LAKHS. LATER, THE ISSUE WAS FURTHER EXAMINED BY ASSESSING OFFICER WITH THE VENDOR SHRI ABDUL KHADER ZIRAPURY FOR WHIC H HE HAS STATED HE HAS RECEIVED SALE CONSIDERATION OF RS.64 LAKHS, RS .10 LAKHS BY CHEQUE AND BALANCE BY CASH. IN OUR OPINION, IT IS FAIR TO F URNISH THE STATEMENTS COLLECTED FROM THE VENDOR TO THE ASSESSEE FOR HIS C OMMENTS AND ALSO GIVE AN OPPORTUNITY TO CROSS EXAMINE THE VENDOR, IF THE ASSESSEE WANTS TO CROSS EXAMINE THE VENDOR. ACCORDINGLY, WE ACCEDE TO THE REQUEST OF THE ASSESSEES COUNSEL AND SET ASIDE THE ENTIRE ISSUE T O THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO CONFRONT THE EVIDENCE COLLECTED FROM THE VENDOR AND IF NECESSARY GIVE AN OPPORTUNITY FOR CROSS EXAMINATION OF THE VENDOR BY THE ASSESSEE. AT THIS STAGE, WE REFRAIN FROM GOING INTO THE OTHER GROUNDS RAISED BY THE ASSESSEE . ITA NO.746/H/2007 SHRI PARAMESHWAR AGARWAL, HYDERABAD 5 5 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 11. 2.2011 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 11 TH FEBRUARY, 2011 COPY FORWARDED TO: 1. SHRI P. MURALI & CO.,, CA, 6-3-655/2/3 1 ST FLOOR, SOMAJIGUDA, HYDERABAD-82. 2. THE ACIT, CENTRAL CIRCLE, 4, HYDERABAD 3. CIT(A)- I, HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. NP