DCIT, Ludhiana V. M/s Vallabh Steels Ltd., Ludhiana

ITA 889/CHANDI/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1647 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Earning of tax free income; Period of limitation; Question of law; Commercial expediency; Retraction
• Section: 143(3); 153A; 14A; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NOS. 889 TO 891/CHD/2012 A.Y.: 2007-08 TO 2009-10 THE DCIT, VS M/S VALLABH STEELS LTD., CENTRAL CIRCLE-1, VILLAGE PAHWA,G.T. ROAD, LUDHIANA. SAHNEWAL, LUDHIANA. PAN: AAACV5819K & ITA NOS. 735 TO 737/CHD/2012 A.Y.: 2007-08 TO 2009-10 M/S VALLABH STEELS LTD., VS THE DCIT, VILLAGE PAHWA,G.T. ROAD, CENTRAL CIRCLE-I, SAHNEWAL, LUDHIANA. LUDHIANA. PAN: AAACV5819K (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. CHANDER KANTA, DR ASSESSEE BY : SHRI ASHWANI KUMAR DATE OF HEARING : 08.12.2015 DATE OF PRONOUNCEMENT : 18.12.2015 O R D E R PER BHAVNESH SAINI,JM ALL THE CROSS APPEALS ARE DIRECTED AGAINST DIFFEREN T ORDERS OF LD. CIT(APPEALS)-I LUDHIANA DATED 04.06.2 012 AND 05.06.2012 FOR THE ABOVE ASSESSMENT YEARS. 2 2. SINCE COMMON ISSUES ARISE IN THE CROSS APPEALS, THEREFORE, ALL WERE HEARD TOGETHER AND WE DISPOSE O F THE SAME THROUGH THIS COMMON CONSOLIDATED ORDER ISSUE- WISE. ISSUE NO. 1 ( DISALLOWANCE U/S 14A OF THE IT ACT) 3. THIS ISSUE ARISES IN ALL THE APPEALS OF THE ASSESSEE. IN ASSESSMENT YEAR 2007-08, ASSESSEE CHALLENGED THE ADDITION OF RS. 2,16,000/-. THE ASS ESSEE CHALLENGED THIS ADDITION UNDER SECTION 14A TO THE T UNE OF RS. 2,47,860/- BEFORE LD. CIT(APPEALS). THE ASS ESSING OFFICER, IN THIS REGARD HAS OBSERVED THA ASSESSEE H AD INVESTMENT TO THE TUNE OF RS. 61,03,117/- AS ON 01.04.2006 AND RS. 57,12,950/- AS ON 31.03.2007 AND NO DISALLOWANCE UNDER SECTION 14A HAD BEEN WORKED O UT. THE ASSESSING OFFICER ASKED FOR EXPLANATION OF THE ASSESSEE AND ASSESSEE OBJECTED TO THE PROPOSED DISALLOWANCE BEFORE ASSESSING OFFICER ON THE REASON S THAT MOST OF THE INVESTMENTS AS APPEARING IN THE BALANCE SHEET ARE CONTINUING FROM THE PREVIOUS YEAR S PRIOR TO THE PREVIOUS YEAR UNDER CONSIDERATION I.E . THESE ARE OLD INVESTMENTS. THE INVESTMENTS TOWARDS PURCHASE OF SAME IS OUT OF CASH PROFIT AVAILABLE WI TH THE ASSESSEE AND NOT FROM THE BORROWED FUNDS. RULE 8D IS NOT APPLICABLE TO ASSESSMENT YEAR 2007-08. IT WAS CLAIMED THAT DISALLOWANCE, IF ANY, TO BE MADE SHOUL D NOT EXCEED TO EXEMPTED INCOME WHICH IN THIS YEAR HAS BE EN EARNED BY ASSESSEE AT RS. 544/-. THE ASSESSING OFF ICER 3 CONCLUDED THAT THE ASSESSEE HAD ADMITTED THAT THE EXPENDITURE INCURRED ON INVESTMENT HAD BEEN MADE AF TER DEBITING THE WORKING CAPITAL LOANS FROM THE BANK WH ERE THE EXPENSES SUCH AS INTEREST HAD BEEN DEBITED. TH E ASSESSING OFFICER RECORDED THAT THOUGH AS PER CONTENTION OF THE ASSESSEE, NO EXTRA EXPENDITURE WA S INCURRED AND DEBITED TO THE PROFIT & LOSS ACCOUNT B UT AT THE SAME TIME, IT IS NOT DENIED THAT ASSESSEE WAS DEBITING INTEREST TO PROFIT & LOSS ACCOUNT WHICH INCLUDED THE INTEREST PAID ON SUCH INVESTMENTS. TH E ASSESSING OFFICER, ACCORDINGLY, DISALLOWED RS. 2,47,860/- READ WITH RULE 8D OF THE IT RULES. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT DISALLOWANCE HAS BEEN MADE WITHOUT PIN-POINTING ANY SPECIFIC AMOUNT OF EXPENSES INCURRED BY ASSESSEE TO EARN EXEMPT INCOME. RULE 8D IS NOT APPLICABLE. TH E ASSESSEE RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HERO CYCLE LTD. 3 23 ITR 518 IN WHICH IT WAS HELD THAT DISALLOWANCE UNDE R SECTION 14A WAS NOT PERMISSIBLE WHERE NO NEXUS BETWEEN EXPENDITURE INCURRED AND INCOME GENERATED H AS BEEN PROVED. WHERE NO EXPENDITURE IS INCURRED, NO DISALLOWANCE IS PERMISSIBLE. THE ASSESSEE ALSO REL IED UPON DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF WINSOME TEXTILE INDUSTRIES LTD . 319 ITR 204 IN WHICH IT WAS HELD THAT ASSESSEE DID NOT MAKE CLAIM OF EXEMPTION. 14A DO NOT APPLY. 4 4. THE LD. CIT(APPEALS), CONSIDERING THE DETAILS NO TED THAT ASSESSEE IS NOT ABLE TO RELATE THE INTEREST EXPENDITURE TO SPECIFIC ITEMS OF RECEIPTS/INCOME, T HEN THE ONLY LOGICAL INFERENCE IS THAT CERTAIN AMOUNT O F INTEREST PERTAINS TO EARNING OF EXEMPT INCOME. TH E LD. CIT(APPEALS) ALSO NOTED THAT RULE 8D IS NOT APPLICA BLE IN ASSESSMENT YEAR UNDER APPEAL, HOWEVER, CONSIDERI NG THE PERCENTAGE OF INVESTMENT IN SPECIFIED ASSETS LE ADING TO EXEMPT INCOME, RESTRICTED THE DISALLOWANCE TO RS . 2,11,000/-. THE LD. CIT(APPEALS) ALSO OBSERVED THA T ADMINISTRATIVE EXPENSES IN MANAGING SUCH INVESTMENT S COULD NOT BE MORE THAN RS. 5,000/-. THEREFORE, FUR THER RS. 5000/- WAS ALSO DISALLOWED RESULTING INTO TOTAL DISALLOWANCE OF RS. 2,16,000/-. 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHOR ITIES BELOW. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V DEEPAK MITTAL 361 ITR 131 HELD AS UND ER : HELD, DISMISSING THE APPEALS, THAT THE ONUS WAS UPO N THE ASSESSEE TO PROVE THE QUANTUM OF EXPENDITURE INCURR ED ON EARNING OF TAX FREE INCOME OF DIVIDEND. WHEN THE CO NSISTENT CASE OF THE ASSESSEE, DESPITE THE NOTICE GIVEN BY THE AS SESSING OFFICER TO GIVE DETAILS OF THE EXPENDITURE MADE ON EARNING OF EXEMPTED INCOME IN THE NATURE OF DIVIDEND, WAS THAT HE HAD N OT MADE ANY EXPENDITURE ON EARNING SUCH INCOME, THE ASSESSI NG OFFICER IN TERMS OF SUB-SECTION (2) OF SECTION 14A HAD TO PRO CEED FURTHER TO COLLECT SUCH MATERIAL OR EVIDENCE TO DETERMINE THE EXPENDITURE, IF 5 ANY, INCURRED BY THE ASSESSEE BUT THE ASSESSING OFF ICER INSTEAD, RELYING ON RULE 8D OF THE RULES, APPLIED AS A FORMU LA, APPLICABLE TO AN ASSESSEE WHO HAS INCURRED EXPENDITURE BY WAY OF INTEREST WHICH WAS NOT DIRECTLY ATTRIBUTABLE TO ANY PARTICUL AR INCOME OR RECEIPT WHICH WAS NOT THE CASE OF THE PRESENT ASSES SEE, WHICH WAS CLEARLY A WRONG APPLICATION INTRODUCED AS A SUB STITUTE FOR SUB-SECTION (2) OF SECTION 14A AND THUS WAS NOT PER MISSIBLE IN LAW. 6. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HERO CYCLES LTD.(SUPRA) HELD THAT WHERE NO EXPENDITURE IS INCURRED, NO DISALLOWANCE SHOULD BE MADE. SIMILAR VIEW IS TAKEN IN THE CASE OF WINSOME TEXTILE INDUSTRIES LTD. (SUPRA) IN WHICH IT WAS HEL D THAT WHEN ASSESSEE DID NOT MAKE CLAIM OF EXEMPTION, 14A DO NOT APPLY. OWN FUNDS USED TO ACQUIRE SHARES, NO EXPENSES INCURRED. IN THE CASE OF METALMAN AUTO P . LTD. 336 ITR 434, HON'BLE PUNJAB & HARYANA HIGH COU RT HELD THAT, WHEN NO EXPENSES INCURRED TO EARN EXEMP T INCOME, 14A DO NOT APPLY. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITS RECENT DECISION IN THE CA SE OF CIT V KAPSON ASSOCIATES ITA 354/2013 VIDE JUDGEMENT DATED 04.08.2015 IN PARA 7 TO 10 HELD AS UNDER : 7. THE ASSESSEE HAD INVESTED AN AMOUNT OF RS.25,22,43,396/- IN SHARES AND MUTUAL FUNDS. THE I NCOME IN RESPECT THEREOF WOULD BE EXEMPTED. IN ANSWER TO A QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE CATEG ORICALLY STATED THAT THE INVESTMENTS IN SHARES WERE OLD INVE STMENTS WHICH HAD BEEN MADE OUT OF THE CAPITAL AND OUTSTAND ING RESERVES OF THE COMPANY AND THAT NO SEPARATE AMOUNT HAD BEEN BORROWED FOR MAKING THE SAID INVESTMENTS. IT F URTHER 6 STATED THAT NO SPECIAL EXPENDITURE WAS INCURRED FOR EARNING THIS DIVIDEND INCOME. 8. THE ENTIRE RECORD OF THE ASSESSEE WAS AVAILABLE. THE ASSESSEE CANNOT ESTABLISH THE NEGATIVE. IF THE ASSE SSING OFFICER DISBELIEVED THE ASSESSEE, IT WAS FOR HIM TO HAVE ESTABLISHED THE SAME FROM THE RECORDS OR OTHERWISE. THE ASSESSING OFFICER HAS NOT EVEN CONSIDERED THIS ASSE RTION EXPRESSLY MADE BY THE ASSESSEE. THE ASSESSING OFFIC ER'S CONCLUSION THAT THE ASSESSEE HAD NOT PROVIDED DETAI LS OF EXPENSES INCURRED ON MAKING THESE INVESTMENTS, THER EFORE, CANNOT BE ACCEPTED. THE ASSESSEE'S CASE WAS THAT NO SUCH EXPENSES HAD BEEN INCURRED. IT WAS, THEREFORE, RIGH TLY OBSERVED BY THE CIT (APPEALS) THAT THE ASSESSING; O FFICER HAD NOT RECORDED ANY REASONS IN THE ASSESSMENT ORDE R TO HOLD THAT ANY EXPENDITURE HAD BEEN INCURRED ON EARN ING THE EXEMPT INCOME AND THAT THE ASSESSING OFFICER HAD RE JECTED THE CLAIM OF THE APPELLANT WITHOUT GIVING .ANY REAS ONS FOR THE SAME. WE HAVE ALREADY DEALT WITH THIS ISSUE. TH E CONCLUSION, THEREFORE, THAT THE ASSESSING OFFICER H AD MECHANICALLY APPLIED RULE 8D OF THE INCOME TAX RULE S, 1962 IS WELL FOUNDED. THE TRIBUNAL REITERATED THESE FACTS AND THE SAME POSITION. 9. AS HELD BY A DIVISION BENCH OF THIS COURT IN ITA NO. 320 OF 2013 TITLED AS COMMISSIONER OF INCOME TAX-I, LUDHIANA VS. M/S. ABHISHEK INDUSTRIES LTD, LUDHIANA DECIDED ON 27.01.2015, SECTION 14A REQUIRES THE ASS ESSING OFFICER TO RECORD SATISFACTION THAT THE INTEREST BE ARING FUNDS HAVE BEEN USED TO EARN TAX FREE INCOME AND THAT THE SATISFACTION MUST BE BASED UPON CREDIBLE AND RELEVA NT EVIDENCE. IT WAS FURTHER HELD THAT THE TO PROVE T HAT INTEREST BEARING FUNDS WERE USED LIES SQUARELY ON THE REVENU E. THE ISSUE, THEREFORE, IN THIS REGARD WAS BASED ONLY ON FACTS. THE LEAST THAT MUST BE SAID IN FAVOUR OF THE RESPON DENTS IS THAT THE FINDINGS OF FACTS RECORDED BY THE CIT (APP EALS) AND BY THE TRIBUNAL ARE NOT PERVERSE AND THAT THE VIEW TAKEN BY THEM IS CERTAINLY A POSSIBLE VIEW. IN VIEW THEREOF, NO 7 QUESTION OF LAW ARISES WITH RESPECT TO THESE QUESTI ONS AS WELL. 10. THE APPEAL IS THEREFORE, DISMISSED. 7. DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE SPECIFICALLY SUBMITTED THAT MOST OF THE INVESTMENTS APPEARING THE BALANCE SHEET ARE COMING FROM PREVIOU S YEAR AND THESE ARE OLD INVESTMENTS. THE INVESTMENT S SO MADE ARE OUT OF CASH PROFIT AVAILABLE TO THE ASSESS EE AND NOT FROM BORROWED FUNDS. THE ASSESSEE ALSO EXPLAINED THAT NO EXPENDITURE HAVE BEEN INCURRED FO R EARNING THE EXEMPT INCOME. THE ASSESSING OFFICER H AS NOT CONSIDERED THE EXPLANATION OF THE ASSESSEE IN P ROPER PERSPECTIVE. THE ASSESSING OFFICER INSTEAD OF EXAM INING THE EXPLANATION OF THE ASSESSEE THAT NO EXPENDITURE HAVE BEEN INCURRED TO EARN EXEMPT INCOME, REJECTED EXPLANATION OF THE ASSESSEE WITHOUT ANY REASONS. SECTION 14A REQUIRES THE ASSESSING OFFICER TO RECOR D SATISFACTION THAT INTEREST BEARING FUNDS HAVE BEEN USED TO EARN TAX FREE INCOME AND THAT THE SATISFACTION W AS BASED UPON CREDIBLE AND RELEVANT EVIDENCE. THUS, O NUS UPON ASSESSING OFFICER HAVE NOT BEEN DISCHARGED IN THIS CASE. THE LD. CIT(APPEALS) MERELY ON THE BASIS OF EXPENDITURE PRESUMED THAT CERTAIN AMOUNT OF INTERES T EXPENDITURE RELATE TO EARNING OF EXEMPT INCOME. FINDINGS OF THE AUTHORITIES BELOW HAVE NO BASIS WHA T-SO- EVER, FURTHER RULE 8D WOULD NOT APPLY TO THE ASSESS MENT YEAR 2007-08 UNDER APPEAL. 8 8. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DECISIONS, IT IS CLEAR THAT WHEN ASSESSEE CLA IMED THAT NO EXPENDITURE HAVE BEEN INCURRED FOR EARNING EXEMPT INCOME, THEN THE ASSESSING OFFICER SHALL HAV E TO RECORD SATISFACTION AS REQUIRED UNDER SECTION 14A W HICH IS NOT SO DONE IN THIS CASE. THEREFORE, DISALLOWAN CE MADE BY THE ASSESSING OFFICER IS WHOLLY UNJUSTIFIED PARTICULARLY READ WITH RULE 8D WHICH IS NOT APPLICA BLE TO THE ASSESSMENT YEAR UNDER APPEAL. WE, ACCORDING LY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELET E THE ADDITION. THIS GROUND IN ASSESSMENT YEAR 2007-08 I S ACCORDINGLY ALLOWED. 9. IN ASSESSMENT YEAR 2008-09, ASSESSEE CHALLENGED THE DISALLOWANCE UNDER SECTION 14A TO THE EXTENT OF RS. 4,27,517/-. THIS ISSUE IS SAME AS HAVE BEEN CONSID ERED IN ASSESSMENT YEAR 2007-08 EXCEPT THAT IN THIS YEAR , RULE 8D OF THE IT RULES IS APPLICABLE. THEREFORE, FOLLOWING THE ORDER FOR ASSESSMENT YEAR 2007-08, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E ADDITION. THIS GROUND IN ASSESSMENT YEAR 2008-09 I S ACCORDINGLY ALLOWED. 10. IN ASSESSMENT YEAR 2009-10, THE ASSESSEE CHALLENGED THE DISALLOWANCE UNDER SECTION 14A TO TH E EXTENT OF RS.15,54,936/-. THE FACTS ARE SAME AS HA VE CONSIDERED IN ASSESSMENT YEAR 2007-08. FURTHER, TH E ASSESSEE EXPLAINED BEFORE ASSESSING OFFICER THAT ASSESSEE HAS NOT EARNED ANY INCOME WHICH HAS BEEN 9 CLAIMED AS EXEMPT, THEREFORE, NO DISALLOWANCE IS CA LLED FOR. THE AUTHORITIES BELOW DID NOT ACCEPT CONTENTI ON OF THE ASSESSEE AND CONFIRMED THE ADDITION. SINCE ASSESSEE DID NOT MAKE CLAIM OF EXEMPT INCOME, THEREFORE, SECTION 14A WOULD NOT APPLY AGAINST THE ASSESSEE AS IS HELD BY HON'BLE PUNJAB & HARYANA HIG H COURT IN THE CASE OF WINSOME TEXTILE INDUSTRIES LTD . (SUPRA). WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION. THIS GR OUND OF APPEAL OF THE ASSESSEE IN ASSESSMENT YEAR 2009-1 0 IS ACCORDINGLY ALLOWED. 11. THE ISSUE IS, THEREFORE, DECIDED IN FAVOUR OF T HE ASSESSEE IN ALL ASSESSMENT YEARS. ISSUE NO.2 (DISALLOWANCE U/S 36(1)(III) OF IT ACT 12. THIS ISSUE ARISES IN ALL THE ASSESSMENT YEARS. THE ASSESSEE CHALLENGED THE DISALLOWANCE OF RS.14,14,59 8/-, RS. 48,805/- AND RS. 1,17,251/- IN ALL ASSESSMENT YEARS. THE ASSESSING OFFICER ON THIS ISSUE OBSERVE D THAT ASSESSEE HAD DEBITED INTEREST EXPENDITURE IN PROFIT & LOSS ACCOUNT AND AT THE SAME TIME, HE HAS NOT CHARG ED ANY INTEREST FROM FAMILY MEMBERS ON THE AMOUNTS ADVANCED TO THEM. THE ASSESSEE EXPLAINED BEFORE TH E AUTHORITIES BELOW THAT ASSESSEE COMPANY HAD SUFFICI ENT AMOUNT AT BALANCE OF UNSECURED LOANS FROM FAMILY MEMBERS FREE OF INTEREST AND HAD ITS SHARE CAPITAL/ FREE RESERVE WHICH ARE SUFFICIENT TO MEET OUT THE AMOUNT S 10 ADVANCED FREE OF INTEREST. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED AND BY FOLLOWING THE DECI SION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES LTD. 286 ITR 1, ADDITION WAS CONFIRMED. 13. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE HAS SUFFICIENT RESERVE FUND S WHICH WOULD MEET OUT INTEREST FREE ADVANCES WHICH W ERE ALSO ADVANCED DUE TO COMMERCIAL EXPEDIENCY. HE HAS SUBMITTED THAT THE DECISION IN THE CASE OF ABHISHEK INDUSTRIES LTD. (SUPRA) HAS BEEN OVER RULED BY THE HON'BLE SUPREME COURT IN IT RECENT DECISION IN THE CASE OF HERO CYCLES P.LTD. 63 TAXMAN.COM 308 IN WHICH IT WAS HELD THAT ONCE IT IS ESTABLISHED THAT THERE IS NEXUS BETWEEN EXPENDITURE AND THE PURPOSE OF BUSINESS, TH E REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN T HE ARM CHAIR OF THE BUSINESS MAN OR IN THE POSITION OF THE BOARD OF DIRECTORS AND TO DECIDE HOW MUCH IS REASONABLE EXPENDITURE, HAVING REGARD TO THE FACTS OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE , SUBMITTED THAT MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIG HT OF THE RECENT DECISION OF THE SUPREME COURT IN THE CAS E OF HERO CYCLES P.LTD. ON THE OTHER HAND, LD. DR RELIE D UPON ORDERS OF THE AUTHORITIES BELOW. 11 14. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE A RE OF THE VIEW THE MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. THE ASSESSEE CLAIM ED BEFORE THE AUTHORITIES BELOW THAT IT HAS SUFFICIENT FUNDS AVAILABLE OUT OF WHICH, INTEREST FREE FUNDS COULD B E GIVEN FOR BUSINESS EXPEDIENCY. THE CLAIM OF ASSESS EE WAS DISALLOWED BY FOLLOWING THE DECISION IN THE CAS E OF ABHISHEK INDUSTRIES LTD. (SUPRA). IN THE RECENT DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HERO CY CLES P.LTD. (SUPRA), THE MATTER HAS BEEN CONSIDERED IN F AVOUR OF THE ASSESSEE BY CONSIDERING THE JUDGEMENT IN THE CASE OF ABHISHEK INDUSTRIES LTD. THEREFORE, IT WOULD BE APPROPRIATE TO SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND TO RESTORE THE MATTER BACK TO ASSESSING OFFICER TO RE-DECIDE THIS ISSUE IN THE LIGHT OF DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF HERO CYCLES P.LTD. WE , ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BE LOW AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFF ICER WITH DIRECTION TO RE-DECIDE THIS ISSUE IN THE LIGHT OF DECISION IN THE CASE OF HERO CYCLES P. LTD. (SUPRA) . THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. IN THE RESULT, THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 16. THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES IN FAVOUR OF THE ASSESSEE. 12 ISSUE NO. 3 ( SERVICE OF NOTICE UNDER SECTION 143(2) BEYOND THE PERIOD OF LIMITATION. 17. THIS ISSUE ARISES IN ALL THE APPEALS OF THE ASSESSEE. 18. THE ASSESSEE CLAIMED IN THE ADDITIONAL GROUND O F APPEAL BEFORE LD. CIT(APPEALS) THAT ASSESSMENT FRAM ED BY THE ASSESSING OFFICER IS AGAINST THE LAW AS THE SAME IS TIME BARRED BECAUSE NO NOTICE UNDER SECTION 143( 2) WAS SERVED UPON ASSESSEE WITHIN THE PERIOD OF LIMITATION. THE LD. CIT(APPEALS) NOTED THE DECISIO NS OF VARIOUS BENCHES OF THE TRIBUNAL IN THE ORDER AS REL IED UPON BY ASSESSEE. THE LD. CIT(APPEALS), HOWEVER, FOLLOWED THE RECENT DECISION OF THE HON'BLE DELHI H IGH COURT IN THE CASE OF ASHOK CHADHA VS ITO 337 ITR 39 9 IN WHICH IT WAS HELD THAT IN THE PROCEEDINGS UNDE R SECTION 153A, THE SERVICE OF THE NOTICE UNDER SECTI ON 143(2) IS NOT NECESSARY. THE LD. CIT(APPEALS), ACCORDINGLY, DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 19. IT IS ADMITTED FACT THAT IN ALL THE ASSESSMENT YEARS, THE ASSESSMENT ORDERS HAVE BEEN PASSED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED TH AT THOUGH THERE ARE SEVERAL DECISIONS OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BUT THE ISSUE IS NOW COVERED AGAINST THE ASSESSEE BY JUDGEMENT OF HON'BLE DELHI HIGH 13 COURT IN THE CASE OF SHRI ASHOK CHADHA (SUPRA). IN VIEW OF THE ABOVE SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. 20. THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. ISSUE NO. 4 ( DELETION OF DISALLOWANCE ON ACCOUNT OF TRAVELING EXPENSES ) 21. THIS ISSUE ARISES IN ALL THE DEPARTMENTAL APPEA LS. THE ASSESSING OFFICER DISALLOWED 20% OF TRAVELING EXPENSES DEBITED UNDER THE HEAD DIRECTORS TRAVELIN G AS FOR NON-BUSINESS PURPOSES. THE ASSESSING OFFICER I N THIS REGARD HAS HIGHLIGHTED A RESOLUTION AUTHORIZIN G THE DIRECTORS TO TAKE THEIR SPOUSE ALONGWITH THEM ON TH EIR BUSINESS TRIP AND ACCORDING TO ASSESSING OFFICER, T HIS WOULD MEAN THAT CERTAIN PORTION OF THE TRAVELING EXPENSES WERE ATTRIBUTABLE TO THE TRAVELING DONE BY SPOUSE AND THEREFORE, ADDITION WAS MADE. THE ASSESS ING OFFICER, ACCORDINGLY, DISALLOWED TRAVELING EXPENSES TO THE EXTENT OF 20%. 22. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT ASSESSING OFFICER HAS NOT POINTED OUT ANY SPEC IFIC ITEM OF TRAVELING OF PERSONAL NATURE. DIRECTORS HA VE UNDERTAKEN TRAVELING FOR BUSINESS PURPOSE ONLY. TH E BOARD RESOLUTION HAS AUTHORIZED THE DIRECTORS TO TA KE THEIR SPOUSE WITH THEM ON THEIR BUSINESS TRIP. THE ASSESSEE IS ALSO LIABLE TO MAKE PAYMENT OF FBT AND 14 THEREFORE, PERSONAL USER HAVE BEEN TAKEN CARE IN FB T PROCEEDINGS. THE LD. CIT(APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE BECAUSE ASSESSING OFFICE R HAS NOT POINTED OUT ANY EXPENDITURE WHICH COULD SUGGEST ANY PERSONAL EXPENDITURE INCURRED BY THE DIRECTORS. FURTHER, ASSESSEE WAS LIABLE TO FRINGE B ENEFIT TAX WHICH WOULD TAKE CARE OF PERSONAL USER OF TRAVE LING EXPENSES AND ACCORDINGLY, ENTIRE ADDITIONS WERE DEL ETED. 23. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE DEPARTMENTAL APPEAL. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC ITEM OUT OF TRAVELING EXPE NSES TO PROVE IF THE SAME EXPENSES WERE INCURRED FOR PER SONAL PURPOSES. THE ASSESSEE IS A COMPANY AND LEGAL ENTI TY AND COULD NOT HAVE UNDERTAKEN ANY PERSONAL EXPENDITURE. IT, THEREFORE, APPEARS TO BE ADHOC AD DITION WHICH HAVE BEEN RIGHTLY DELETED BY THE LD. CIT(APPE ALS). THESE GROUNDS OF APPEAL OF DEPARTMENTAL APPEALS HAV E NO MERIT, SAME ARE ACCORDINGLY DISMISSED. 24. THIS ISSUE IS DECIDED AGAINST THE REVENUE. ISSUE NO. 5 (UNDISCLOSED INVESTMENT IN PURCHASE OF LAND) 25. THIS ISSUE ARISES IN ALL THE DEPARTMENTAL APPEA LS. THE ASSESSEE IN ASSESSMENT YEAR 2007-08 CHALLENGED THE ADDITION OF RS. 6,66,86,724/- ON ACCOUNT OF ALLEGED UNDER STATEMENT IN THE PURCHASE OF LAND BY THE ASSE SSEE 15 COMPANY BEFORE LD. CIT(APPEALS). IN ASSESSMENT YEA R 2008-09, ASSESSEE SIMILARLY CHALLENGED THE ADDITION OF R. 3,26,79,558/- BEFORE LD. CIT(APPEALS). IN ASSESSME NT YEAR 2009-10 ASSESSEE CHALLENGED ADDITION OF RS. 2,82,17,595/- ON THE SAME ISSUE BEFORE LD. CIT(APPE ALS). 26. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY ALONGWITH ITS ASSOCIATE GROUP ENTITIES NAME LY M/S VARDHMAN INDUSTRIES LTD., ADITYA NATH INVESTMEN T P. LTD. AND M/S ASSOCIATED LEASING LTD. HAD PURCHA SED AGRICULTURE LAND NEAR CHANDIGARH FALLING MOSTLY IN SUB TEHSIL MAJRI OF TEHSIL KHARAR OF MOHALI DISTRICT. T HE VALUE OF THE LAND PURCHASED, AS SHOWN IN THE BALANC E SHEET OF THE ASSESSEE COMPANY IN ALL THE YEARS HAVE BEEN NOTED AT PAGE 20 OF THE APPELLATE ORDER. THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER HAS REFERRED TO CER TAIN DOCUMENTS THAT HAD BEEN FOUND AND SEIZED DURING SEARCH OPERATION IN THE CASE OF THE ASSESSEE COMPAN Y WHICH REVEALED DIFFERENT PURCHASES MADE BY ASSESSEE . THE POST SEARCH INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING LED TO RECORDING OF STATEMENTS O F 31 PERSONS, WHO HAD SOLD THEIR LAND TO THE ASSESSEE COMPANY. ALL THE 31 PERSONS WHOSE STATEMENT WAS RECORDED BY INVESTIGATION WING STATED TO HAVE RECEI VED AMOUNTS OVER AND ABOVE THE FIGURE RECORDED IN THE REGISTRATION DEED. THE ASSESSING OFFICER DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, PROCEEDED TO ALLO W AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THESE 16 PERSONS WHO HAD GIVEN IMPUGNED STATEMENTS. THE CRO SS EXAMINATION OF ONLY 23 PERSONS COULD BE CARRIED OUT AS THE REST OF THEM WERE EITHER NOT AVAILABLE OR HAD EXPIRED. THE CROSS-EXAMINATION CARRIED OUT BY THE ASSESSEE COMPANY BROUGHT ON RECORD RETRACTION ON TH E PART OF ALL PERSONS WHO HAD ORIGINALLY STATED TO HA VE RECEIVED AMOUNTS IN EXCESS OF REGISTRATION DOCUMENT S. 26(I) THE ASSESSING OFFICER IN THIS BACKGROUND, ANALYZED THE STATEMENTS MADE BY THE SELLERS BEFORE THE INVESTIGATION WING AND BROUGHT ON RECORD DETAILED C HART OF PURCHASES MADE BY THE ASSESSEE COMPANY, SELLER- WISE. THE ASSESSING OFFICER CONSIDERING THE EXPLAN ATION OF THE ASSESSEE, CONCLUDED THAT THERE WAS UNDER STATEMENT OF INVESTMENT TO THE TUNE OF THE ABOVE REFERRED AMOUNTS UNDER CHALLENGE. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE MADE PURCHASES BUT S ALE DEED HAVE BEEN REGISTERED AT CIRCLE RATE FIXED BY T HE GOVERNMENT. THE SELLERS IN THEIR INITIAL STATEMENT S ON OATH STATED THAT THEY HAVE RECEIVED THE AMOUNT OVE R AND ABOVE THE AMOUNT SPECIFIED IN THE REGISTRATION DEED. THEREFORE, INITIAL STATEMENTS WERE FOUND TO BE RELIABLE. THE CONTENTION OF THE ASSESSEE THAT NO INCRIMINATING DOCUMENT WAS FOUND REGARDING EXECUTIO N OF BAYANA (ADVANCE) FOR MAKING THE PAYMENT WAS NO T ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE THE ABOVE ADDITIONS. 17 27. THE ASSESSEE CHALLENGED ALL THE ADDITIONS BEFOR E LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSE SSEE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT WHATEVER AMOUNTS WE RE PAID AGAINST THE PURCHASE OF SUCH LANDS, STAND ACCOUNTED FOR IN THE BOOKS OF ACCOUNT MAINTAINED IN NORMAL COURSE OF BUSINESS. DURING THE COURSE OF PO ST SEARCH INVESTIGATION, ADIT RECORDED STATEMENTS OF S OME OF THE LAND OWNERS WHO HAVE STATED THAT THEY HAD SO LD THE LAND AT THE PRICE WHICH WAS MORE THAN THE PRICE REFLECTED IN THE REGISTERED DEED. IT WAS SUBMITTED THAT ASSESSEE PURCHASED LAND FROM THE AGRICULTURISTS/FAR MERS AND IN SOME CASES, LANDS WERE PURCHASED WHICH BELON G TO THE COMMUNITY/SHAM-LAT. DURING THE COURSE OF PO ST- SEARCH INVESTIGATION, STATEMENTS OF 31 SELLERS WERE RECORDED WHO HAVE ALLEGED TO HAVE MADE STATEMENTS AGAINST THE ASSESSEE BUT THE SALE DEED FOUND MENTIO N THE CORRECT SALE CONSIDERATION. SINCE STATEMENTS O F THESE 31 PERSONS WERE RECORDED AT THE BACK OF THE ASSESSEE, THEREFORE, ASSESSEE ASKED FOR THE CROSS EXAMINATION OF THESE 31 PERSONS. THE ASSESSING OFF ICER, HOWEVER, PRODUCED 23 SELLERS ONLY WHO HAVE BEEN CRO SS- EXAMINED BY THE ASSESSEE AND ALL THESE PERSONS IN T HEIR STATEMENTS CATEGORICALLY STATED THAT THEY DID NOT R ECEIVE ANY AMOUNT OVER AND ABOVE THE AMOUNT REFLECTED IN T HE REGISTRATION DEED. IT WAS, THEREFORE, SUBMITTED THA T SINCE REMAINING PERSONS WERE NOT PRODUCED, THEREFOR E, THEIR STATEMENTS CANNOT BE READ IN EVIDENCE. THE 18 ASSESSING OFFICER SOLELY RELIED UPON STATEMENT OF T HESE 31 PERSONS WHICH ARE NOT INCRIMINATING IN NATURE AN D CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. T HE ASSESSEE RELIED UPON DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF KISHAN CHAND CHELA RAM 125 ITR 713. NO REGISTRATION DEED HAVE BEEN DONE BELOW THE CIRCLE RATE AND NO EVIDENCE WAS FOUND DURING THE CO URSE OF SEARCH TO PROVE IF ASSESSEE PAID ANY AMOUNT TO T HE SELLERS OVER AND ABOVE WHAT IS RECORDED IN THE REGISTRATION DEEDS. THE ASSESSEE ALSO RELIED UPON DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F K.P.VARGHESE V ITO 131 ITR 597 IN WHICH IT WAS HELD THAT, ASSESSEE MUST BE SHOWN TO HAVE RECEIVED MORE THAN WHAT IS DECLARED OR DISCLOSED BY HIM AS CONSIDERATION BEFORE PUTTING THE AMOUNT TO TAX. T HE ASSESSEE ALSO RELIED UPON DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V P.V. KALYANASUNDARAM 294 ITR 49 IN WHICH DEPARTMENTAL APPEAL WAS DISMISSED BECAUSE OF THE CONTRADICTORY STATEMENTS MADE BY THE VENDOR. THE ASSESSEE ALSO RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF PARAMJIT SINGH V ITO 323 ITR 588 IN WHICH IT WAS HELD THAT, NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUMENT CONTAINS ALL THE TERMS AND CONDITIONS. IT WAS SUBMITTED THAT SINCE PROPE R SALE CONSIDERATION HAS BEEN DISCLOSED IN THE SALE D EED, THEREFORE, NO ORAL EVIDENCE SHOULD BE ADMITTED. TH E ASSESSEE ALSO RELIED UPON DECISION OF THE HON'BLE P UNJAB 19 & HARYANA HIGH COURT IN THE CASE OF RAVI KUMAR 294 ITR 78 IN WHICH IT WAS HELD THAT IF ASSESSEE FAILED TO EXPLAIN THE CONTENTS OF THE SLIP, IT WAS FOR THE RE VENUE TO PROVE ON THE BASIS OF MATERIAL ON RECORD THAT TH EY REPRESENTED TRANSACTIONS OF SALES OR STOCKS IN HAND BEFORE MAKING ANY ADDITION ON THIS SCORE. 28. THE LD. CIT(APPEALS), CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE AND MATERIAL ON RECORD, DELETED THE ENTIRE ADDITION IN ALL THE APPEALS. THE LD. CIT(AP PEALS) NOTED THAT THE STATEMENTS RECORDED BY ADIT (INVESTIGATION) WAS AT THE BACK OF THE ASSESSEE AND WHEN ASSESSEE WAS CONFRONTED WITH THE SAME AND THEY WERE CROSS-EXAMINED ON BEHALF OF THE ASSESSEE IN WHICH T HEY HAVE STATED THAT THEY HAD NOT RECEIVED ANY AMOUNT I N EXCESS OF THE SALE CONSIDERATION. THE LD. CIT(APPEA LS) ALSO CONSIDERED OTHER MATERIAL ON RECORD AND NOTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COUR SE OF SEARCH TO PROVE THAT ASSESSEE PAID ANY AMOUNT OV ER AND ABOVE WHAT IS STATED IN THE SALE DEEDS, THEREFO RE, ORAL STATEMENTS COULD NOT BE ADMISSIBLE AGAINST THE DOCUMENTARY EVIDENCE. THEREFORE, LD. CIT(APPEALS) DELETED THE ENTIRE ADDITIONS. 29. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. DR RELIED UPON ORDER OF THE ASSES SING OFFICER. ON THE OTHER HAND, LD. COUNSEL FOR THE AS SESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. 20 30. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS ADMITTED FACT THAT DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL WAS FOUND TO PROVE THAT ASSE SSEE PAID ANY MONEY OVER AND ABOVE WHAT IS RECORDED IN T HE REGISTERED SALE DEEDS. THE ADIT (INVESTIGATION) SUBSEQUENTLY IN POST SEARCH ENQUIRIES RECORDED THE STATEMENTS OF 31 PERSONS/SELLERS IN WHICH THEY HAVE ALLEGED TO HAVE STATED THAT THEY HAVE RECEIVED HIGH ER AMOUNT ON ACCOUNT OF SALE CONSIDERATION. HOWEVER, SUCH STATEMENTS RECORDED AT THE BACK OF THE ASSESSE E. THEREFORE, SAME WOULD NOT BE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE UNLESS THE SAME WERE CONFRONTE D TO THE ASSESSEE AND SUBJECTED TO CROSS-EXAMINE ON BEHA LF OF THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, A T THE ASSESSMENT STAGE PRODUCED 23 PERSONS/SELLERS FOR CR OSS- EXAMINATION ON BEHALF OF THE ASSESSEE. THE REMAINI NG EIGHT PERSONS COULD NOT BE PRODUCED BECAUSE EITHER THEY WERE NOT AVAILABLE OR HAD EXPIRED. THEREFORE, THE INITIAL STATEMENTS OF THESE 8 PERSONS CANNOT BE READ IN EVIDENCE AGAINST THE ASSESSEE. WE RELY UPON DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF KISHAN CHAND CHELA RAM VS CIT 125 ITR 713. FURTHER, NO REGISTRATION DEED HAS BEEN DONE BELOW THE CIRCLE RA TE AND SINCE NO MATERIAL WAS FOUND AGAINST THE ASSESSE E DURING THE COURSE OF SEARCH THAT ASSESSEE PAID ANY AMOUNT TO THE SELLERS OF THE LAND OVER AND ABOVE TH E AMOUNT REFLECTED IN THE REGISTERED SALE DEEDS, THEREFORE, THE THEORY OF THE ASSESSING OFFICER WAS 21 ENTIRELY DEPENDANT UPON THE INITIAL STATEMENTS RECO RDED BY THE ADIT. IT IS INTERESTING TO NOTE HERE THAT WHEN 23 PERSONS WERE PRODUCED AT THE ASSESSMENT STAGE FOR CROSS-EXAMINATION ON BEHALF OF THE ASSESSEE, ALL TH ESE PERSONS/SELLERS RESILED FROM EARLIER INITIAL STATEM ENTS MADE TO THE ADIT AND DID NOT SUPPORT CASE OF THE REVENUE THAT THEY HAVE RECEIVED ANY AMOUNT OVER AND ABOVE WHAT IS RECORDED IN THE REGISTERED SALE DEEDS . THEY HAVE RETRACTED FROM THEIR INITIAL STATEMENTS A ND HAVE AFFIRMED THE CASE OF THE ASSESSEE THAT WHATEVE R SALE CONSIDERATION WAS RECORDED IN THE REGISTERED S ALE DEEDS, HAVE BEEN RECEIVED BY THEM. THEREFORE, NOTH ING WAS LEFT FOR THE REVENUE TO MAKE ANY ADDITION AGAIN ST THE ASSESSEE. THE INITIAL STATEMENT, AT THE MOST, COULD BE SAID TO BE THE EXAMINATION-IN-CHIEF OF THESE WITNESSES WHICH HAVE RESILED IN CROSS-EXAMINATION, THEREFORE, THE ENTIRE STATEMENTS OF THESE 23 PERSON S SHALL HAVE TO BE CONSIDERED IN ENTIRETY WHICH CLEAR LY SUGGEST THAT THERE WERE NO EVIDENCES AVAILABLE WITH THE ASSESSING OFFICER TO PROVE THAT ASSESSEE HAS PAID A NY EXTRA AMOUNT TO THESE SELLERS. IN THESE CIRCUMSTAN CES, NO ORAL EVIDENCE I.E. INITIAL STATEMENT IS ADMISSIB LE ONCE THE DETAILS OF SALE CONSIDERATION ARE RECORDED IN T HE REGISTERED SALE DEEDS. THE HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF PARAMJIT SINGH V ITO (SUPRA)HELD AS UNDER : 22 IT IS A WELL KNOWN PRINCIPLE THAT NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUMENTS CONTAIN ALL THE TERMS AND CONDITIONS. SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872 INCORPORATE THE PRINCIPLE. THE TRIBUNAL HELD THAT THE OSTENSIBLE SALE CONSIDERATION OF THE LAND DISCLOSED IN THE REGISTER ED SALE DEED DATED SEPTEMBER 24, 2002 ADDED TO THE INCOME OF THE ASSESSEE. THE TRIBUNAL DISREGARDED TH E STATEMENT MADE ON AFFIDAVIT BY THE VENDORS WHO WERE THE UNCLES OF THE ASSESSEE. THEY HAD STATED THAT N O SALE CONSIDERATION HAD PASSED HANDS AND THEY HAD RELINQUISHED THEIR SHARE IN THE LANDED PROPERTY. TH E OBJECT OF EXECUTING THE SALE DEED WAS ONLY TO HAND OVER LANDED PROPERTY TO THE ASSESSEE. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEAL, THAT THE OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED DATED SEPTEMBER 24, 2002, HAD TO BE ACCEPTED AND IT COULD NOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE. THEREFORE, THE ORDER OF THE TRIBUNAL DID NOT SUFFER FROM ANY LEGAL INFIRMITY. THE AMOUNT SHOWN IN THE REGISTERED SALE DEED WAS RECEIVED BY THE VENDORS AN D DESERVED TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE. 31. THE ITAT CHANDIGARH BENCH IN THE CASE OF RAJDEE P BUILDERS V ACIT 52 SOT 62 IN PARA 9 TO 11 OF THE OR DER HELD AS UNDER : 9. IN THE PRESENT CASE, THE AO AS WELL AS THE CIT( A), PROCEEDED TO DRAW INFERENCES AGAINST THE ASSESSEE, ON THE BASIS OF INVALID STATEMENT OF SHRI SUBHASH SHAR MA, WHICH WAS RECORDED ON 3.9.2004, IGNORING THE RETRAC TION MADE BY HIM IN THE CROSS-EXAMINATION, CONDUCTED ON 7.11.2006. IT IS, FURTHER CONSEQUENT TO HIGHLIGHT THAT BOTH THE AO AND CIT(A), COMPLETELY DISREGARDED THE SALE 23 DEED, EXECUTED BY THE PARTIES VOLUNTARILY, WHICH CONTAINS RS.9 LACS AS SALE CONSIDERATION. AS DISCU SSED ABOVE, ORAL EVIDENCES CANNOT DISPLACE THE DIRECT DOCUMENTARY EVIDENCE, IN THE SHAPE OF SALE DEED CONTAINING SPECIFIC SALE CONSIDERATION OF RS. 9 LAC S. THIS VIEW IS DULY SUPPORTED BY THE DECISION OF THE HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF PARAMJIT S INGH (SUPRA), CHANDNI BHOCHAR. 9(1) THE QUESTION IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V SMT. K.C.AGNES & OTHERS (2003) 262 ITR 354 (KERALA), WHEREIN THE HON'BLE HIGH COURT HELD THAT WHEN A DOCUMENT SHOWS FIXED PRICE, THERE WILL BE A PRESUMPTION THAT, THAT IS CORRECT PRICE AGREED UPON BY THE PARTIES. IT IS NO T NECESSARY THAT THE PRICE STATED IN THE AGREEMENT WILL BE THE PRICE SHOWN IN THE SALE DEED. SOMETIMES, IT MY BE HIGHER AND SOMETIMES IT MAY BE LOWER. SOMETIMES, INTENTIONALLY A LESSER VALUE MAY BE SHOWN IN THE SALE DEED. EVEN IF IT IS ASSUMED T O BE SO, UNLESS IT IS PROVED THAT THE AGREEMENT WAS ACTED UPON AND UNLESS THE AMOUNT STATED IN THE AGREEMENT WAS PAID FOR SALE, THE COURT CANNOT COME TO THE CONCLUSION THAT THE PRICE MENTIONED IN THE SALE DEED IS NOT CORRECT. IN THIS CASE, APPEAL OF THE REVENUE WAS DISMISSED. IT IS SEEN THAT THE HON'BLE HIGH COURT HAS GONE A STEP AHEAD AND EVEN CONSIDERED THE EXISTENCE OF BOTH THE AGREEMENT TO SELL AND THE SALE DEED AND UPHELD THE VALIDITY AND SANCTITY OF THE SALE DEED. 10. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSI ONS AND HAVING REGARD TO THE DIRECT DECISIONS OF THE HO N'BLE TRIBUNALS, INCLUDING THAT OF CHANDIGARH TRIBUNAL, VARIOUS HIGH COURTS AND THE HON'BLE SUPREME COURT, IN THE MATTER, WE HOLD THAT THE SALE CONSIDERATION SPE CIFIED IN THE IMPUGNED SALE DEED CANNOT BE SUBSTITUTED, ON THE 24 BASIS OF MERE ORAL EVIDENCES. THEREFORE, THE IMPUG NED ADDITION UPHELD BY THE CIT(A), IS DELETED AND THE A PPEAL OF THE ASSESSEE IS ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 32. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO DEMONSTRATED DURING THE COURSE OF ARGUMENTS THAT IN THE SAME AREA, SALE CONSIDERATION WAS SAME AS HAVE BEEN RECORDED IN THE REGISTERED SALE DEEDS ON WHICH NO ADVERSE COMMENTS HAVE BEEN OFFERED. SINCE NO EVIDE NCE WAS FOUND AGAINST THE ASSESSEE AT ANY STAGE REGARDI NG CASH PAID OVER AND ABOVE THE SALE CONSIDERATION RECORDED IN THE SALE DEED, LD. CIT(APPEALS) ON PROP ER APPRECIATION OF FACTS AND MATERIAL ON RECORD WAS JUSTIFIED IN DELETING THE ADDITION. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT ONUS CAST UPON THE REVENUE TO PROVE THAT SALE CONSIDERATION AS RECORDED IN THE REGISTERED SALE DEED WAS NOT REAL, HAS NOT BEEN DISCHARGED EVEN IN RESPECT OF LAND DEALS ENTERED IN TO BY 31 SELLERS. SINCE, THERE IS NO EVIDENCE ON RECORD IN RESPECT OF DEALS WITH 31 SELLERS TO SUBSTITUTE PERC EIVED MARKET RATE FOR REGISTERED SALE PRICE, THE OBSERVAT ION MADE BY THE ASSESSING OFFICER IN RESPECT OF OTHER D EALS WOULD NOT SURVIVE. 33. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW LD. CIT(APPEALS) CORRECTLY APPRECIATED THE FACTS AND MATERIAL ON REC ORD AND RIGHTLY DELETED THE ADDITION IN ALL THE THREE Y EARS. 25 NO INFIRMITY HAVE BEEN POINTED OUT IN THE ORDERS OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION. THEREFO RE, WE DO NOT FIND ANY MERIT IN DEPARTMENTAL APPEALS ON TH IS ISSUE. THE SAME ARE THEREFORE, DISMISSED. 34. THIS ISSUE IS DECIDED AGAINST THE REVENUE. IN T HE RESULT, DEPARTMENTAL APPEALS ON THIS ISSUE ARE DISMISSED. 35. NO OTHER POINT IS ARGUED OR PRESSED. 36. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PART LY ALLOWED AND DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH DECEMBER, 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD