DCIT, Tirupathi V. Smt K.Najimunnisa, Proddatur

ITA 794/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66178 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Opportunity of cross examination; Revised return
• Section: 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 794 &795 /HYD/2010 ASSESSMENT YEAR: 2004-05 DCIT, CIR-2(1), TIRUPATI. .... APPELLANT 1)SMT. K.NAJIMUNNISA, PRODDATUR. PAN:ADIPN 3009 K 2) SMT. K. SAJIDA PRODDATUR PAN:AWEPS 8440 A ..RESPONDENTS APPELLANT BY : SHRI B.V. PRASAD REDDY RESPONDENTS BY : SHRI S. RAMA RAO DATE OF HEARING : 26-06-2012 DATE OF PRONOUNCEMENT: 24-08-2012 ORDER PER SAKTIJIT DEY, J.M.: THESE TWO APPEALS FILED BY THE REVENUE IN THE CASES OF TWO ASSESSEE-RESPONDENTS ARE DIRECTED AGAINST COMMON ORDER DATED 24-3-2010 OF CIT (A), TIRUPATI P ASSED IN APPEAL NOS.451 & 452/ACIT-2(1)/TPT/CIT(A)/TPT/09-10 AND THEY PERTAINS TO THE ASSESSMENT YEAR 2004-05. 2. COMMON GROUND NO.1, WHICH IS THE EFFECTIVE GROUN D IS REPRODUCED HEREUNDER:- 2 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. THE LD. CIT (A) IS NOT CORRECT IN DIRECTING TO DEL ETE THE ADDITION OF RS.8,20,150/- WITHOUT TAKING INTO CONSI DERATION THE CONFIRMATION GIVEN BY THE WITNESS WHO WAS IN NO WAY CONCERN TO THE PROPERTY AS BUYER OR A SELLER AND AL SO TO THE FACT THAT THE SELLER ADMITTED THAT HE HAD RECEIVED SAID CONSIDERATION OF RS.26,00,000/- BUT NOT RS.9,60,000 /-. 3. BRIEFLY THE FACTS ARE AS A RESULT OF A SURVEY U /S 133A CONDUCTED IN THE BUSINESS PREMISES OF ROYAL JEWELLE RS, PODDATUR OF MR. K. HUSSAIN BASHA, MATERIALS WERE FOUND INDIC ATING PURCHASE OF LAND BY THE ASSESSEE AND HER SISTER, THE OTHER R ESPONDENT, FOR A CONSIDERATION OF RS.9,60,000/- INCLUDING REGISTRA TION EXPENSES. IN RESPONSE TO NOTICE U/S 142(1) THE ASSESSEE FILED A RETURN OF INCOME ON 23-3-2005 DECLARING A TOTAL INCOME OF RS. 89,310.00. SUBSEQUENTLY A SURVEY U/S 133A WAS ALSO CONDUCTED O N THE VENDOR OF THE PROPERTY DR.K. ASHOK. AS A CONSEQUEN CE OF THE SURVEY THE VENDOR, DRK ASHOK FILED A REVISED RETURN DECLARING THAT HE RECEIVED SALE CONSIDERATION OF RS.26,00,000 /- FROM THE ASSESSEE AND HER SISTER. THOUGH THE RESPONDENT ASS ESSES DENIED OF HAVING PAID SALE CONSIDERATION OF RS.26,00,000, THE AO COMPLETED THE ASSESSMENT BY ADDING THE DIFFERENTIAL AMOUNT IN THE HANDS OF THE RESPONDENT ASSESSES. THE ADDITION WAS CONFIRMED BY THE CIT (A) AND THE MATTER WENT IN APP EAL BEFORE THE ITAT. THE ITAT SET ASIDE THE ASSESSMENT WITH A DIRECTION TO THE AO TO REDO IT AFTER GIVING OPPORTUNITY TO THE A SSESSEE TO CROSS EXAMINE THE VENDOR DR. K. ASHOK AND LALU SAHEB, TH E WITNESS TO THE SALE DEED AND THEY APPEARED FOR CROSS EXAMINATI ON. THE AO AGAIN COMPLETED THE REASSESSMENT BY RELYING UPON TH E STATEMENT OF THE VENDOR DR. K. ASHOK AND V. LALU SAHEB THAT T HE ASSESSEE AND HER SISTER HAVE PAID AN AMOUNT OF RS.26,00,000 /- TOWARDS PURCHASE OF THE PROPERTY AND ADDED 50% OF THE DIFF ERENTIAL 3 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. AMOUNT OF RS.16,40,000/- AT THE HANDS OF EACH OF T HE ASSESSEE- RESPONDENTS AS UNDISCLOSED INCOME. 4. THE ASSESSEE BEING AGGRIEVED WITH THE ADDITION M ADE FILED APPEAL BEFORE THE CIT (A). IT WAS CONTENDED ON BEH ALF OF THE ASSESSEE BEFORE THE CIT (A) THAT THOUGH THE ASSESSE E HAS ACTUALLY PAID RS.9,60,000 AS PER THE REGISTERED SALE DEED, T HE VENDOR DR. K. ASHOK HAS STATED IN COURSE OF SURVEY OPERATION T O HAVE RECEIVED RS.26,00,000 ONLY FOR THE PURPOSE OF EXPLA INING AWAY THE UNEXPLAINED INVESTMENT MADE IN HIS HOUSE CONSTR UCTION. THE ASSESSEE FURTHER CONTENDED THAT NEITHER DR. K. ASHO K NOR V. LALU SAHEB COULD PRODUCE ANY PROOF OR DOCUMENTARY EVIDEN CE TO SUBSTANTIATE THE FACT THAT THE ASSESSEE HAS PAID TH E SALE CONSIDERATION OF RS.26,00,000. IN ABSENCE OF ANY S UPPORTING EVIDENCE THE STATEMENT GIVEN BY DR. K. ASHOK IS ONL Y SELF SERVING TO ADJUST HIS UNEXPLAINED MONEY WHICH WILL GET REGU LARISED AS TAX FREE CAPITAL GAIN. THE ASSESSEE CONTENDED THAT BOT H DR. K. ASHOK AND V. LALU SAHEB BEING SIGNATORIES TO THE SALE DEE D REGISTERED BEFORE THE REGISTERING AUTHORITY OF THE GOVERNMENT , THEY CANNOT DISPUTE THE VALUE MENTIONED THEREIN WITHOUT BRINGIN G MATERIAL TO DISPROVE IT. IT WAS CONTENDED BY THE ASSESSEE THAT APPARENT HAS TO BE CONSIDERED AS REAL. IN THIS CONTEXT THE ASSE SSEE RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN CASE O F K.P. VERGHESE (131 ITR 597). 5. THE CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE MATERIALS ON RECORD ALLO WED THE APPEAL BY HOLDING IN THE FOLLOWING MANNER:- IN THIS GIVEN CASE, THE SALE DEED HAS BEEN REGISTER ED FOR THE CONSIDERATION ACTUALLY EXCHANGED BETWEEN THE PA RTIES 4 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. AND THE BURDEN OF PROVING ANY UNDERSTATEMENT IN THE CONSIDERATION HAS NOT BEEN DISCHARGED BY THE AO, NONETHELESS BY DR.K. ASHOK OR HIS WITNESS MR. V. LA LUSAHEB. THE STATEMENTS OF BOTH THE VENDOR AND HIS WITNESS W ERE ONLY SELF-SERVING IN NATURE AS THEY DO NOT COME UP TO THE EXPECTED YARDSTICK OF A VERIFIABLE STATEMENT. NONE OF THEM COULD BRING ANY MATERIAL OR VERIFIABLE EVIDENCE TO SUBSTANTIATE THAT THE APPELLANTS HAD PAID CONSIDERA TION IN EXCESS OF THE STATED AMOUNTS. AS LAID DOWN IN THE CITED DECISION, I AM NOT INCLINED TO DEVIATE FROM THE APP ARENT IN THIS CASE, ESPECIALLY CONSIDERING THAT THE VENDOR H AS A VESTED INTEREST IN BRINGING ADDITIONAL TAX-FREE MON IES. HENCE, IT IS HELD THAT THE FINDING OF THE AO FOR TH E TOTAL CONSIDERATION WORKS OUT TO RS.26,00,000/- IS HELD T O BE WRONG AND ACCORDINGLY THE AO IS DIRECTED TO GIVE RE LIEF. 6. THE LEARNED DR SUBMITTED BEFORE US THAT WHEN THE V ENDOR AND THE WITNESS TO THE SALE DEED HAVE CATEGORICALLY STATED THAT THE ASSESSEE HAD PURCHASED THE PROPERTY FOR A CONSI DERATION OF RS.26,00,000/- THE AO CANNOT IGNORE IT AND ACCEPT T HE VALUE MENTIONED IN THE SALE DEED. IN SUPPORT OF HIS CONT ENTION THE LD. DR RELIED UPON A DECISION IN THE CASE OF CIT VS. DH ARMENDRA KUMAR REPORTED IN 154 TAXMAN 170. 7. LEARNED AR SUBMITTED THAT IN THE ORIGINAL RETURN FILED BY THE VENDOR, HE HAS SHOWN THE SALE CONSIDERATION RECEIVE D AT RS.9,60,000 AS PER THE REGISTERED SALE DEED. ONLY AFTER SURVEY WAS CONDUCTED ON HIM U/S 133A THE VENDOR CAME UP WI TH THE STORY THAT HE HAS RECEIVED RS.26,00,000/- FROM THE ASSESSEE FOR EXPLAINING THE UNEXPLAINED INVESTMENT MADE IN HOUSE 5 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. CONSTRUCTION AND FILED A REVISED RETURN. THE LD. A R FURTHER SUBMITTED EVEN THOUGH THE ITAT WHILE SETTING ASIDE THE ASSESSMENT ORDER HAD DIRECTED THE AO TO ALLOW THE A SSESSEE TO CROSS EXAMINE DR. K. ASHOK AND V. LALU SAHEB, THE A SSESSEE WAS NOT GIVEN A FAIR CHANCE TO CROSS EXAMINE THEM. THE LD. AR RELYING UPON THE JUDGMENT OF THE HONBLE SUPREME COURT SUBM ITTED THE APPARENT HAS TO BE TAKEN AS REAL UNTIL IT IS PROVED TO BE CONTRARY WITH STRONG EVIDENCE. THE REGISTERED SALE DEED BEI NG AN INSTRUMENT OF THE STATE GOVERNMENT HAS TO BE CONSID ERED AS MORE AUTHENTIC THAN THE STATEMENT GIVEN BY DR. K. ASHOK AND V. LALU SAHEB WHICH WERE NOT SUPPORTED BY VALID PIECE OF EV IDENCE. THE LD. AR ALSO SUBMITTED THAT THE FACT STATED BY V. LA LU SAHEB THAT HE WAS PRESENT IN CHENNAI WHEN THE ASSESSEE PAID RS .16 LAKHS CASH TO DR. K. ASHOK WAS ALSO FALSE SINCE HE HAD NO T GONE TO CHENNAI ON THAT DAY. IN THIS REGARD THE LD. AR REF ERRED TO THE AFFIDAVITS AT PAGE 16 AND 17 OF THE PAPER BOOK. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, IN THE REGISTERED SALE DE ED THE PROPERTY HAS BEEN SHOWN TO HAVE BEEN SOLD FOR A CONSIDERATIO N OF RS.9,60,000. IN THE ORIGINAL RETURN FILED THE VEND OR HAS ALSO DISCLOSED THE CONSIDERATION RECEIVED TOWARDS SALE O F THE PROPERTY AT RS.9,60,000. IT IS ALSO REVEALED FROM THE STATE MENT RECORDED FROM THE VENDOR DR. K. ASHOK THAT HE CONFESSED OF HAVING RECEIVED THE CONSIDERATION OF RS.26 LAKHS TOWARDS S ALE OF THE PROPERTY DURING AN ENQUIRY CARRIED ON BY THE DDIT(I NV.) AND THEREAFTER FILED A REVISED RETURN CLAIMING TO HAVE RECEIVED ACTUAL CONSIDERATION OF RS.26 LAKHS. IT WAS STATED BY DR. K. ASHOK THAT OVER AND ABOVE THE AMOUNT OF RS.9,60,000 MENTIONED IN THE REGISTERED SALE DEED HE RECEIVED AN AMOUNT OF RS.1 6,40,000 IN CASH TOWARDS THE SALE CONSIDERATION. HOWEVER, APAR T FROM THIS 6 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. STATEMENT NO OTHER EVIDENCE WAS PRODUCED BY HIM TO SUBSTANTIATE THE CLAIM THAT HE ACTUALLY RECEIVED MORE THAN WHAT IS MENTIONED IN THE REGISTERED SALE DEED. THE ITAT WHILE SETTI NG ASIDE THE ASSESSMENT MADE EARLIER HAD IN ITS ORDER IN ITA NO. 1275- 76/HYD/2008 DATED 14-10-2008 DIRECTED THE AO TO ALL OW THE ASSESSEE TO CROSS EXAMINE DR. ASHOK AND LALU SAHEB NO REAL OPPORTUNITY OF CROSS EXAMINATION SEEMS TO HAVE BEEN GIVEN BY THE AO TO THE ASSESSEE. IN THE COPY OF THE ORDER S HEET DATED 17- 2-2009 NOTHING HAS BEEN MENTIONED AS TO WHAT QUESTI ONS WERE PUT BY THE ASSESSEE DURING THE CROSS EXAMINATION OF DR. ASHOK AND LALU SAHEB AND WHAT ARE THEIR ANSWERS. THERE I S SANCTITY ATTACHED TO A REGISTERED SALE DEED. IN THE PRESENT CASE THERE IS ALSO NO ALLEGATION OF UNDERVALUATION BY THE REGIST ERING AUTHORITY. THEREFORE IN ABSENCE OF ANY CLINCHING EVIDENCE TO T HE CONTRARY THE VALUE MENTIONED IN THE SALE DEED HAS TO BE ACCEPTED AS THE CONSIDERATION AT WHICH THE PROPERTY WAS PURCHASED BY THE ASSESSEE. THE CONTENTION OF THE LD. AR THAT THE ST ATEMENT GIVEN BY DR. K. ASHOK AND LALU SAHEB ARE ONLY SELF SERVIN G TO EXPLAIN AWAY THE INVESTMENT MADE IN HOUSE CONSTRUCTION BY D R. K. ASHOK APPEARS TO HAVE SOME FORCE. THE VENDOR K. ASHOK KN OWING FULLY WELL THAT CONSIDERATION RECEIVED ON SALE OF PROPERT Y WOULD NOT BE CHARGED TO CAPITAL GAIN IF INVESTED IN HOUSE CONSTR UCTION HAS COOKED UP THE STORY OF RECEIVING RS.16,40,000/- IN CASH OVER AND ABOVE WHAT HAS BEEN MENTIONED IN THE REGISTERED SAL E DEED. THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN CAS E OF CIT VS. DHARMENDRA KUMAR (SUPRA) RELIED UPON BY THE LD. DR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN CA SE OF CIT VS. DHARMENDRA KUMAR THE FIRST APPELLATE AUTHORITY AND TRIBUNAL FOLLOWED THEIR EARLIER ORDER PASSED IN ANOTHER CASE WHICH WAS NOT APPROVED BY THE HONBLE HIGH COURT. THEREFORE ON T HAT GROUND ALONE THE REFERENCE WAS ALLOWED IN FAVOUR OF THE R EVENUE. IN THE 7 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR. APPEAL BEFORE US EXCEPTING THE STATEMENTS OF DR.K. ASHOK AND LALU SAHEB THERE IS NO OTHER EVIDENCE BROUGHT ON RE CORD TO PROVE THAT ASSESSEE HAS PAID RS.16,40,000/- IN CASH OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED . IN AFORESAID VIEW OF THE MATTER, THE ORDER PASSED BY THE CIT (A) CALLS FOR NO INTERFERENCE. THE GROUNDS RAISED BY THE REVENUE FO R THE YEARS UNDER CONSIDERATION ARE THUS REJECTED. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 24- 8-2012. SD/- SD /- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 24 TH AUGUST, 2012. COPY TO:- 1) SMT. K. NAJIMUNNISA, & SMT. K. SAJIDA, D.NO.22/ 560, ASAR SHARIF STREET, PRODDATUR. 2) DCIT, CIR-2(1), AAYAKAR BHAVAN, ANANTAPUR. 3) THE CIT (A), TIRUPATI. 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 8 ITA NO. 794 OF 2010 K. NIJIMUNNISA, PRODDATUR.