Sh. Joginder Lal Bambi, Ludhiana V. DCIT, Ludhiana

ITA 923/CHANDI/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9781 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-07-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 24-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Capital asset; Income from undisclosed sources; Opportunity of cross examination; Bonafide belief; Cost of acquisition; Initiation of penalty proceedings; Fair market value; Onus to prove; Revised return
• Section: 54B; 27; 148; 132; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 923/CHD/2013 ASSESSMENT YEAR: 1999-2000 SHRI JOGINDER LAL BAMBI, VS THE DCIT, THROUGH L/H SMT.BIMLA RANI (WIFE), CENTRAL CIRCLE -1, C/O M/S BAMBI HOTELS, LUDHIANA. 1082, OPP. RAILWAY STATION, LUDHIANA. PAN: ABKPB0266G & ITA NO. 924/CHD/2013 ASSESSMENT YEAR: 1999-2000 SMT. BIMLA RANI, VS THE DCIT, C/O M/S BAMBI HOTELS, CENTRAL CIRCLE 1, 1082, OPP. RAILWAY STATION, LUDHIANA. LUDHIANA. PAN: ABKPB0266G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 21.07.2016 DATE OF PRONOUNCEMENT : 28.07.2016 O R D E R BOTH THE APPEALS BY DIFFERENT ASSESSEES ARE DIRECTE D AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-1 LUDH IANA DATED 18.07.2013 FOR ASSESSMENT YEAR 1999-2000 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT. 2 2. THE ISSUE IS SAME IN BOTH THE APPEALS AND BOTH T HE PARTIES STATED THAT DECISION IN ITA 923/2013 COULD BE FOLLOWED IN OTHER APPEAL ALSO. 3. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES, PERUSED THE EVIDENCE OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. ITA 923/2013 ( SHRI JOGINDER SINGH BAMBI ) 4. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT HAD PURCHASED A PLOT MEASURING 61 YARDS FROM ONE SH. DIGVIJAY SINGH IN FEBRUARY 1999 FOR WHICH THE SALE DEED HAD BEEN EXECUTED AT RS.3,70,000/-. DURING THE COUR SE OF POST SEARCH INVESTIGATION IN THE CASE OF THE APPELLANT STATEMENT ON OATH WAS RECORDED OF SH. DIG VIJAY SINGH I.E. THE SELLER HE CONFESSED TO HAVE RECEIVED AN AMOUNT OF RS.38,00,000/- AS THE SALE CONSIDERATION EVEN THOUGH THE AMOUNT RECORDED IN THE REGISTERED DEED W AS RS. 3,70,000/-. THE AO ON THE BASIS OF CONFESSIONAL STATEMENT OF THE SELLER PROCEEDED TO M AKE AN ADDITION OF THE AMOUNT OF DIFFERENCE WHICH WAS U PHELD BY THE HON'BLE CIT(A) BUT ISSUE WAS SET ASIDE BACK TO THE FILE OF THE AO BY HON'BLE ITAT ON THE GROUND THAT T HE STATEMENT OF THE SELLER SH. DIGVIJAY SINGH HAD NOT BEEN CONFRONTED TO THE ASSESSEE. DURING THE SET ASIDE PROCEEDINGS, THE APPELLANT WAS ALLOWED THE OPPORTUN ITY OF CROSS EXAMINING SH. DIGVIJAY SINGH ON THE ISSUE OF SALE CONSIDERATION AND SH. DIGVIJAY SINGH STUCK TO HIS 3 ORIGINAL CONFESSIONAL STATEMENT AND REITERATED THAT THE SALE CONSIDERATION RECEIVED WAS RS.38,00,000/- AND NOT RS.3,70,000/-. THE ADDITION MADE BY THE AO ON THE B ASIS OF RE-CONFIRMATION BY THE SELLER WAS SUSTAINED BY T HE HON'BLE CIT(A) AND FURTHER CONFIRMED BY THE HON'BLE ITAT. THE AO DURING THE PENALTY PROCEEDINGS EMPHASI ZED THE FACT THAT THE ASSESSEE HAD CONSCIOUSLY SUPPRESS ED THE SALE CONSIDERATION WHICH HAD LED TO CONCEALMENT OF INCOME AND EVASION OF TAXES THEREOF AND PROCEEDED T O IMPOSE THE PENALTY U/S 271(L)(C) TO THE TUNE OF RS.10,26,611/-. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED HIS ARGUMENTS AS UNDER : 'THIS IS A CASE OF LEVY OF PENALTY U/S 271 ( L)(C ) AND THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE LATE SH. JOGINDER LAL HAD PURCHASED A PLOT MEASURING 61 SQ. YARDS FROM SH. DIGVIJAY IN FEBRUARY 1999 AND THE SALE DEE D WAS EXECUTED FOR RS. 3,70,000/-. THE PLOT WAS SITUATED OPPOSITE RAILWAY STATION, LUDHIANA. THERE WAS SEARCH AND SEIZU RE OPERATION U/S 132 BY THE INVESTIGATION WING OF THE DEPARTMENT ON 24.05.2000 AT THE VARIOUS BUSINESS PRE MISES OF THE ASSESSEE'S GROUP AND DURING THE COURSE OF SE ARCH, NO DISCREPANCY WITH REGARD TO THE PURCHASE OF CONSIDER ATION IN THE FORM OF ANY SEIZED DOCUMENT WAS FOUND. HOWEVER, DURING POST SEARCH ENQUIRIES, THE DEPARTMENT RECORDE D THE STATEMENT OF SELLER SH. DIGVIJAY ON 17.08.2000 AND H E HAD STATED THAT THE PLOT WAS SOLD ACTUALLY FOR RS. 38LA CS AND THE REGISTRATION DEED WAS EFFECTED FOR RS. 3,70,000/-. THI S STATEMENT WAS RECORDED AT THE BACK OF THE ASSESSEE AND THE SAME WAS NEVER CONFRONTED TO HIM. SHRI DIGVIJAY HAD ORIGINALLY FILED HIS RETURN OF INC OME DECLARING THE SALE CONSIDERATION OF RS, 3,70,000/- WH EN THE SEARCH WAS CARRIED OUT AT HIS BUSINESS PREMISES UNDE R THE NAME AND STYLE OF M/S KUNDAN LAL & SONS ON 17.08.20 00 4 AND HE ACCORDINGLY, REVISED HIS RETURN OF 31 ST MARCH, 2001, WHERE HE DECLARED THE SALE CONSIDERATION OF RS. 38 L ACS. IN HIS REVISED RETURN, SH. DIGVIJAY STATED THAT HE HAD SPENT A SUM OF RS. 20 LACS ON THE CONSTRUCTION OF NEW HOUSE AND, ACCORDINGLY, TOOK EXEMPTION OF RS. 20 LACS U/S 54B A ND PAID THE BALANCE TAX ALONGWITH INTEREST. THUS, FROM THE ABOVE, IT IS VERY CLEAR THAT IN THE ORIGINAL RETURN FILED BY SH. DIGVIJAY, HE HAD NOT DE CLARED THE SO CALLED CORRECT CONSIDERATION AND IT WAS ONLY AT T HE TIME WHEN THE SURVEY WAS CONDUCTED AND CERTAIN INCRIMINATIN G DOCUMENTS WERE FOUND THAT HE REVISED THE RETURN. ON THE BASIS OF ABOVE STATEMENT, THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 AND THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF STATEMENT OF SH, DIGVIJAY. THE MATTER WAS CARRIED T O THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH, CHANDIGARH, WHO HAD SET ASIDE THE CASE TO THE FILE OF THE ASSESSING OFFICER FOR GIVING OPPORTUNITY TO THE ASSESS EE FOR CROSS EXAMINATION OF SH. DIGVIJAY. SIMILARLY, THE OTH ER 1 /2 SHARE OF 61 SQ. YARDS PLOT WAS PURCHASED BY SMT BIML A RANI, WIFE OF ASSESSEE, LATE SH. JOGINDER LAL FOR A CONSIDERATION OF RS. 3,70,000/- AND THE SELLER WAS THE MOTHER OF SH. DIGVIJAY NAMELY SMT. PREM LATA AND SHE HAD ALSO STATED IN HER STATEMENT AT THE BACK OF THE ASS ESSEE THAT THE SALE CONSIDERATION WAS RS. 38 LACS AGAINST R S. 3,70,000/-. THE ASSESSING OFFICER HAD MADE THE ADDITION ON THE BASIS OF SAME LINE IN THE HAND OF SMT. BIMLA RANI O N THE BASIS STATEMENT OF SMT. PREM LATA AND THEREAFTER, TH E CASE WAS SET ASIDE BY THE HON'BLE INCOME TAX APPELLATE TRIBUNAL FOR GIVING OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. THOUGH, IN THE CROSS EXAMINATION, BOTH SH, DIGVIJAY AND SMT. PREM LATA CONFIRMED THE CONSIDERATION AT RS. 38 L ACS EACH, BUT THE FOLLOWING INCONSISTENCY WERE THERE IN TH EIR STATEMENTS:- I) IN THE ORIGINAL RETURN BY BOTH THE SELLERS I.E. SH. DIGVIJAY AND SMT. PREM LATA, THE CORRECT S ALE CONSIDERATION OF RS. 3,70,000/- HAD DECLARED AND IT WAS ONLY DURING SURVEY THAT CERTAIN DISCREPANCIES WERE NOTICED IN THE CASE OF BUSINESS CONCERN OF M/S KUNDAN LAI 5 & SONS THAT THE SELLERS REVISED THEIR RETURNS BY DECLARING THE SALE CONSIDERATION AT RS. 38 LACS EACH . THIS CLEARLY PROVES THAT THE SALE CONSIDERATIONS WERE REVI SED ONLY TO AVOID THE EFFECT OF OTHER INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SURVEY. II). SMT. PREM LATA WAS NOT ABLE TO QUANTIFY TH E UTILIZATION OF THE ALLEGED SALE CONSIDERATION, THOUG H, IT WAS SPECIFICALLY ASKED TO HER. III). WE HAD FILED SOME SALE INSTANCES IN THE SAME LOCALITY TO PROVE THAT THE SALE CONSIDERATION AS RE CORDED IN THE REGISTRATION DEED WAS VERY MUCH COMPARABLE A ND WHICH HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICE R. IV). THE SELLERS WERE NOT ABLE TO NAME THE PERSON WHO PAID THE SALE CONSIDERATION IN CASH. THUS, FROM THE ABOVE, IT IS CLEAR THAT THE ADDITION WAS MADE AND CONFIRMED BY THE INCOME TAX APPELLATE TRIBUNAL ONLY ON THE BASIS OF STATEMENTS OF TWO SELLERS AND NO MATER IAL OR ANY DOCUMENT HAVE BEEN FOUND DURING THE COURSE OF SE ARCH. IT IS FURTHER SUBMITTED THAT, THOUGH, THE ADDITIONS HAVE BEEN CONFIRMED BY THE HON'BLE ITAT, CHANDIGARH BENCH , CHANDIGARH. IT IS SUBMITTED THAT BOTH ASSESSMENT AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND , THOUGH, THE SAID STATEMENT MAY CONSTITUTE GOOD EVIDENCE IN THE ASSESSMENT PROCEEDINGS, BUT THE SAM E CANNOT BE HELD THE GROUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS SINCE THE PENALTY PROCEEDING S ARE QUASSI CRIMINAL PROCEEDINGS AND THERE HAS TO BE SOME COGENT MATERIAL ON RECORD FOR THE PURPOSE OF LEVYING THE PENALTY U/S 271 (L)(C). THIS HAS BEEN HELD BY THE A MRITAR BENCH OF INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF M/S PREET PALACE, JALANDHAR AS UNDER : IT IS ALSO A SETTLED LAW THAT BOTH ASSESSMENT AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND NOW THE QUESTION IS WHETHER MERE FACT THE ADDITION HAS BEEN MADE AND UPHELD IN APPEAL BY ITSELF WOULD JUSTIFY LEVY OF PENALTY U/S 271 (1) (C ) OF THE ACT. IN THE CASE OF CIT VS. J.K. SYNTHETICS LTD . 6 219 ITR 267, DELHI HIGH COURT HAS HELD THAT PENALTY AND ASSESSMENT PROCEEDINGS ARE DISTINCT AND SEPARATE PROCEEDINGS, AND THEREFORE, INDEPENDENT PROVISIONS HAVE BEEN ENACTED IN THE STATUTE FOR INITIATION OF PENALTY PROCEEDINGS U/S 27 1 (1) (C ). THE FINDING RECORDED BY THE TRIBUNAL IN T HE QUANTUM APPEAL CANNOT BE SAID TO BE DECISIVE. IN THE CASE OF J & K ETC. VS. SADIQ ALI & BROS. 92 ITR 276, THE J & K HIGH COURT HAS HELD THAT MERE FACT, THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT PROVED TO THE SATISFACTION OF INCOME TAX DEPARTMENT OR WAS NOT CORRECT, COULD NOT BY ITSELF BE SUFFICIE NT TO INVOKE THE PENALTY U/S 271 (1)(C) OF THE ACT. IN TH E CASE OF ANANTHA RAM VEERA SINGHAIH & CO. VS CIT 123 ITR 458, THE HON'BLE SUPREME COURT HAS HELD THAT NO DOUBT, THE FACT THAT ASSESSMENT ORDE R CONTAINS A FINDING THAT DISPUTED AMOUNT REPRESENTS INCOME CONSTITUTES GOOD EVIDENCE IN THE PENALTY PROCEEDINGS, BUT THE FINDING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF PENALTY PROCEEDINGS. BEFORE A PENALTY CAN BE IMPOSED, THE ENTIRETY OF THE CIRCUMSTANCES MUST BE TAKEN INTO ACCOUNT AND MUST POINT TO THE CONCLUSION THAT THE DISPUTED AMOUNT REPRESENTS INCOME AND THAT THE ASSESSEE HAS CONSCIOUSLY CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME.' THE LD. ASSESSING OFFICER WHILE LEVYING THE PENALTY HAD ONLY RELIED UPON THE ORDER OF THE ITAT, CONFIRMING THE PENALTY OR HAS GIVEN THE FACTS OF THE CASE. THERE IS NO MATERIAL ON RECORD WORTH THE NAME TO SUBSTANTIATE T HE FINDING OF THE ASSESSING OFFICER THAT THE ON MONEY WAS PAID FOR THE PURCHASE OF PLOT. THE HON'BLE BENCH WHILE CONFIRMING THE ADDI TION HAS STATED THAT ANY INCRIMINATING MATERIAL WAS FOUND DU RING THE COURSE OF SEARCH AT THE FACTORY PREMISES OF SH. DIGVIJAY, BUT IT IS A FACT WHICH HAS BEEN ACCEPTED BY SH, DIGVI JAY AND BY THE ASSESSEE THAT SURVEY HAD BEEN CONDUCTED AT H IS FACTORY PREMISES AND WHICH LED TO THE REVISED RETURN . IT IS NOT THAT THE SELLER HAD FILED THE ORIGINAL RETURN D ECLARING THE CONSIDERATION OF R. 38 LACS BUT IT WAS ONLY AFTER THE SURVEY, 7 THE RETURN WAS REVISED AND THAT PROVES THE CONDUCT OF THE SELLER. THERE IS NO EVIDENCE OF ANY DOCUMENT OR PAPER SEIZE D DURING THE COURSE OF SEARCH EVIDENCING THE PAYMENT OF ON M ONEY TO THE SELLER OF THE LAND AND THE WHOLE CASE HAS BEEN MADE OUT ONLY ON THE BASIS OF STATEMENT OF THE SELLER OF THE LAND. 'THE COMPARABLE CASES WHICH WERE CITED BEFORE HIM W ERE NOT DISPUTED. AS REGARDS THE PAYMENT OF TAXES BY TH E SELLER ON THE BASIS OF REVISED RETURN, IT IS SUBMITTED THAT T HE SAME IS NOT THE CONCERN OF THE ASSESSEE, AT ALL AND RATHE R SH. DIGVIJAY HAD CLAIMED THE EXEMPTION OF RS. 20 LACS AS HAVING BEEN SPENT ON THE CONSTRUCTION OF NEW HOUSE U/S 54B . SMT. PREM LATA EVEN COULD NOT SPECIFICALLY STATE THE AMOU NT DEPOSITED IN THE BANK OR USED FOR CONSTRUCTION OF H OUSE, PURCHASE OF CAR OR FOR PAYMENT OF TAXES AND WHEN IT WAS SPECIFICALLY ASKED TO PROVIDE THE DETAIL, SMT. PREM LATA CONTENDED THAT SHE DID NOT REMEMBER AS SHE WAS NOT MAINTAINING GOOD HEALTH. ALL THESE REPLIES CLEARLY PROVE THAT SHE WAS NOT TELLING THE TRUTH AND THE ONUS WAS UPON HER TO SUBSTANTIATE WHAT SHE HAD STATED IN HER STATEMEN T. IT IS THE SELLER WHO WAS ALLEGING ABOUT THE EXTRA CONSIDERATION PAID BY THEM AND, THEREFORE, IT HAD T O BE PROVED BY THEM BEYOND ANY DOUBT THAT THEY HAD RECEI VED THE EXTRA CONSIDERATION BECAUSE AS PER THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DAULATRA M RAVATMULL AS REPORTED IN 87 ITR 349, IN WHICH, IT HAS BEEN HELD THAT ONUS US UPON THE ASSESSEE, WHO ALLEGED A PARTICULAR FACT AND IN THE PRESENT CASE, THE ONUS WE RE CLEARLY ON THE SELLERS OF THE LAND WHICH THEY HAVE TOTALLY FAILED AND THE DEPARTMENT CANNOT RELY MERELY ON THE STATEMENT FOR THE PURPOSE OF LEVYING THE PENALTY U/ S 271 (1)( C). IT IS FURTHER SUBMITTED THAT THE GENERAL RULE IS THAT 'BURDEN OF PROOF IS ALWAYS ON THE AUTHORITY, W HO 8 ASSETS A PROPOSITION OR FACT, WHICH IS NO SELF- EVI DENT. THE BURDEN OF PROOF HAS TWO SHADES OF MEANING. IN T HE PRIMARY SENSE, IT MEANS, THE BURDEN OF ESTABLISHING THE CASE. THE SECOND MEANING OF BURDEN OF PROOF IS ON THE PRINCIPLE OF EVIDENCE. TN THE SECOND SENSE, THE BURDE N WOULD BE SHIFTED FROM ONE PARTY TO THE OTHER, AS AND WHEN ADEQUATE EVIDENCE TO DISCHARGED THE BURDEN, THAT LA Y ON A PARTY, IS BEING PRODUCED, BY THAT PARTY. IT IS ALSO A SETTLED LEGAL PROPOSITION, IF NO EVIDE NCE IS GIVEN BY THE PARTY ON WHOM THE BURDEN IS CAST, THE ISSUE MUST BE FOUND AGAINST HIM. THEREFORE, ONUS IS ALWAY S ON A PERSON WHO ASSERTS A PROPOSITION FACT, WHICH IS NOT SELF- EVIDENT. THE ONUS, AS A DETERMINING FACTOR OF THE WHOLE CASE CAN ONLY ARISE IF THE TRIBUNAL, WHICH IS VESTE D WITH THE AUTHORITY TO DETERMINE, FINALLY ALL Q UESTIONS OF FACT, FINDS THE EVIDENCE PRO & CON, SO EVE NLY BALANCED THAT IT CAN COME TO NO CONCLUSION, THEN, THE ONUS WILL DETERMINE THE MATTER. NEEDLESS TO SAY THAT THE ONUS IS HEAVY OR LIGHT, DEPENDING ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. THERE CANNOT BE ANY DOUB T THAT ONUS HAS A DETERMINING FACTOR, COMES IN TO PLAY WHERE, EITHER THERE IS NO EVIDENCE ON EITHER S IDE, OR WHERE IT IS EQUALLY WORTHLESS OR WHERE IT IS EQUALL Y BALANCED. IT IS IMPERATIVE TO MENTION HERE THAT WHE RE SUCH IS NOT THE CASE AND ALL AVAILABLE EVIDENCE IS CONSIDERATION, WITHOUT REFERENCE TO T HE ONUS AND WITHOUT RELYING ON THE CIRCUMSTANCES THAT ONUS LIES ON A PARTICULAR PARTY, THE ISSUE IS DETERMINE D ON FACTS AND THE ONUS CANNOT BE SAID TO HAVE INFLUENCE D THE DECISIONS. THEN AGAIN, THE SALE DEED HAD BEEN EXECUTED AND WHICH IS A REGISTERED DOCUMENT AND THAT AMOUNT REFLEC TED IN THE REGISTERED DOCUMENT CANNOT BE DISPUTED WITHO UT THERE BEING ANY EVIDENCE ON RECORD. THE ASSESSING OF FICER HAS NOT CHALLENGED THE GENUINENESS OR VALIDITY OF SAL E DEED BUT HE HAS MERELY RELIED UPON THE BASIS OF STATEMEN T OF 9 SELLERS. IT HAS BEEN HELD IN THE CASE OF M/S RAJDEE P BUILDERS IN ITA NO. 666/CHD/2010 FOR ASSTT. YEAR 200 4-05 AND IN PARA 7.1. AND 7.2, IT HAS BEEN HELD AS UNDER :- '7(I) AS INDICATED EARLIER, THE AO HAS NOT CHALLENGE D THE GENUINENESS OR VALIDITY OF THE 'SALE DEED' . THE AO MERELY, ON THE BASIS OF STATEMENT OF SHRI SUBHASH SHARMA, ONE OF THE PURCHASES, WHO LATER ON, IN THE CROSS-EXAMINATION RETRACTED THE STATEMENT, MADE IN T HE IMPUGNED ADDITION. IT IS POINTED OUT THAT IN INCOME-TA X MATTERS, THE PROPOSITION THAT THE FORM OF A TRANSACT ION SHOULD PREVAIL OVER ITS SUBSTANCE OR VICE-VERSA, IS TOO BROAD AND GENERAL PROPOSITION, TO BE UNIVERSALLY APPLICABLE IN ALL CIRCUMSTANCES. HOWEVER, IT IS WELL- ESTABLISHED PROPOSITION THAT DIRECT DOCUMENTARY EVIDENCE, IN THE SHAPE OF VALIDLY EXECUTED SALE DEED , IF PITTED AGAINST THE MERE ORAL EVIDENCE, THE DOCUMENTAR Y EVIDENCE WOULD CERTAINLY PREVAIL. THIS VIEW IS PORTED BY THE HON'BLE SUPREME COURT, IN THE CASE OF MOTORS AND GENERAL STORES (P) LTD. (1967) 66 ITR 692 (S.C) BY HOLDING THAT WHERE STATUTORY THE PARTIES HAVE TO RED UCE A CERTAIN TRANSACTION INTO WRITING, IT IS NOT OPEN TO CO URT OR ANY AUTHORITY TO PERMIT ORAL EVIDENCE TO BE ADDUC ED BY THE PARTIES OR TO ENTITLE THEM TO GO BEHIND THE STATEMENTS MADE IN THE DOCUMENT. INCOME TAX AUTHORITIES ARE UNDER THE ORDINARY LAW. NO GREATER POWER OR AUTHORITY IS VESTED IN THEM, EXCEPT THAT WH ICH THE LAW CONFERS. A BARE PERUSAL OF SECTION 91 TO 94 OF THE EVIDENCE ACT LIMITS THE POWER, SUBJECT OF COURS E TO THE EXCEPTIONS STATED IN SECTION 91 AND 92 OF THE EVIDENCE ACT. IT IS SETTLED PROPOSITION THAT THE REV ENUE COULD EITHER ACCEPT THE DOCUMENTS AS REPRESENTING GENUINE TRANSACTIONS OR REJECT IT ON VALID AND SUBSTANTIAL GROUNDS WHICH ARE TENABLE IN LAW, BUT THEY CANNOT, WHILE ACCEPTING THAT IT IS A GENUINE TRANSACTIO N, REWRITE THE DOCUMENT, CONTRARY TO WHAT THE PARTIES HAVE IN-FACT EFFECTED, OR GAVE A CONSTRUCTION BY REFERENCE INADMISSIBLE IN EVIDENCE. 7(II) IN THE PRESENT CASE, THE AO ACCEPTED THE SALE TRANSACTION AS RECORDED IN THE IMPUGNED SALE DEED, AS GENUINE, BUT THE SALE CONSIDERATION SPECIFIED THEREIN WAS REJECTED AS NON-GENUINE AND, FURTHER, ENHANCED THAT SALE CONSIDERATION, ON THE BASIS OF INVALID ORAL EVIDENCE, IN THE SHAPE OF STATEMENT OF T HE PURCHASER, IGNORING THE SPECIFIC DENIAL OF THE FACTS STATED IN THAT STATEMENT, IN THE DEPOSITION MADE AT T HE TIME OF CROSS-EXAMINATION. THUS, THE AO DISREGARDED T HE VALID DOCUMENTARY EVIDENCE, VARIOUS JUDICIAL PRONOUNCEMENTS AND UNDERTAKEN THE EXERCISE OF REWRITING THE SALE DEED AND SUBSTITUTING HIS OWN SA LE 10 CONSIDERATION OF THE FLAT IN PLACE OF THE SALE CONSIDERATION DULY SPECIFIED IN THE SALE DEED. NEED LESS TO STATE HERE THAT THE SALE DEED WAS VOLUNTARY ENTE RED AND EXECUTED BY THE PARTIES THERETO.' 6. THE LD. CIT(APPEALS) CONSIDERING THE SUBMISSION OF THE ASSESSEE AND MATERIAL ON RECORD, DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARAS 4 TO 5 ARE REPRODUCED AS UNDER : 4. I HAVE CONSIDERED THE BASIS OF PENALTY IMPOS ED BY THE AO AND ARGUMENTS OF THE AR ON THE ISSUE. THE AR'S ARGUMENT AGAINST THE IMPOSITION OF PENALTY BROADLY RE STS UPON THE CLAIM THAT ASSESSMENT PROCEEDINGS AND PENA LTY PROCEEDINGS WERE TWO DISTINCT STEPS AND CONFIRMATION OF ADDITION IN ASSESSMENT PROCEEDINGS WOULD NOT IPSO F ACTO LEAD TO IMPOSITION OF PENALTY. VARIOUS JUDGMENTS HA VE BEEN RELIED UPON BY THE AR TO BUTTRESS HIS POINT ON THIS ISSUE. I AM IN AGREEMENT WITH THE AR ON THIS ISSUE BUT THE ISSUE IS WHETHER THE EVIDENCE COLLECTED DURING THE A SSESSMENT PROCEEDINGS WAS SUFFICIENT TO ESTABLISH THE CONCEAL MENT OF INCOME OR NOT. IT IS ALSO TO BE SEEN WHETHER THE EXPLANATION OFFERED BY THE APPELLANT FOR THE ALLEGE D DIFFERENCE IN SALE CONSIDERATION WAS FALSE OR COULD BE SUBSTANTIATED. THE SECOND ISSUE HIGHLIGHTED BY THE AR IN HIS SUBMISSIONS IS THAT THE STATEMENT OF THE SELLER ADMI TTING TO THE ALLEGED SALE CONSIDERATION TO BE AT RS. 38,00,0 00/- WAS NOT RELIABLE AS HE COULD NOT SPECIFY THE DETAILS OF THE PERSON WHO HAD GIVEN THE CASH NOR THE USAGE OF THE SAME COULD BE ELABORATED. HERE IT WOULD BE IMPORTANT TO APPRECIATE THE SEQUENCE OF EVENTS LEADING TO UNRAVELL ING OF FACT OF ACTUAL SALE CONSIDERATION BEING RS.38,00,000/ -. THE BUYER AND THE SELLER HAVING REGISTERED THE SALE DEE D AT RS.3,70,000/- HAD FILED THEIR RETURNS OF INCOME INCORPORATING THE INVESTMENT AT RS.3,70,000/- ONLY. IT IS ONLY 11 UPON POST SEARCH INVESTIGATION THAT THE FACT OF SALE CONSIDERATION BEING RS.38,00,000/- WAS CONFESSED BY THE SELLER LEADING TO REVISION OF HIS RETURN OF INCOME INCOR PORATING THE ACTUAL SALE CONSIDERATION AND THE USAGE THEREOF IN TERMS OF HOUSE CONSTRUCTION. IT IS ALSO MATTER OF RECORD THAT THE DUE TAXES ON THE ACTUAL SALE CONSIDERATION WERE ALS O PAID. THE SELLER HAD STUCK TO HIS CONFESSIONAL STATEMENT DE SPITE LAPSE OF A PERIOD OF ALMOST 9 YEARS. THE CROSS EXAMIN ATION BY THE APPELLANT DID NOT BRING ON RECORD ANY VITAL INCONSISTENCY TO BELITTLE THE SIGNIFICANCE OF ADMIS SION OF ACTUAL SALE CONSIDERATION BEING 38,00,000/-. FURTHE R, IT IS OF UTMOST RELEVANCE THAT THERE ARE ONLY TWO PARTIES TO THE IMPUGNED TRANSACTION OF PURCHASE/SALE AND THE SELLE R HAVING MADE THE STATEMENT ON OATH OF RECEIVING ACTU AL SALE CONSIDERATION IN EXCESS OF AMOUNT RECORDED IN T HE REGISTERED DEED AND PAID THE DUE TAXES ON THE SAME IS SUFFICIENT TO HOLD THAT THE AMOUNT RECORDED IN THE RE GISTERED DEED AT RS.3,70,000/- HAD TO BE IGNORED. THE APPELL ANT'S CLAIM THAT THE ADMISSION ON THE PART OF THE SELLER WAS ON ACCOUNT OF OTHER INCRIMINATING DOCUMENTS FOUND FROM HIM AT THE TIME OF SURVEY OPERATION IS ONLY AN INFERENCE DRAWN BY HIM AND NOT A MATTER OF FACT. THERE ARE NO SUCH INCRIMINATING DOCUMENTS THAT HAD BEEN HIGHLIGHTED I N THE CASE OF SELLER THAT COULD BE THE BASIS OF CONFESSIO NAL STATEMENT. EVEN OTHERWISE THIS REMOTE POSSIBILITY, AS HIGHLIGHTED BY THE APPELLANT, CANNOT BE GIVEN THE WEIGH TAGE OF HAVING THE EFFECT OF CONFESSIONAL STATEMENT BEING AN ADJUSTMENT. IN FACT, THERE IS NOTHING ON RECORD TO SU GGEST SO. IN THE CIRCUMSTANCES, THE STATEMENT OF THE SELLER MAD E DURING THE COURSE OF POST SEARCH INVESTIGATION AND R E- CONFIRMED DURING CROSS EXAMINATION 9 YEARS LATER CAN B E SAID TO BE THE CLINCHING EVIDENCE TO HOLD THAT THE ACTUAL S ALE CONSIDERATION IN RESPECT OF THE IMPUGNED TRANSACTION WAS RS. 38,00,000/- AND NOT RS.3,70,000/-. SUCH AN ISSUE HAD ALSO COME BEFORE THE AMRITSAR BENCH OF HO N'BLE ITAT IN THE CASE OF INDERPAL SINGH AHUJA VS. ACIT 1 03 ITD 271 AND OBSERVATION OF HON'BLE BENCH AS UNDER : 12 'AS PER PROVISION OF SECTION 48, THE CAPITAL GAINS IS REQUIRED TO BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUED AS A RESULT OF TRANSFER OF THE CAPITAL ASSET THE EXPENDIT URE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SU CH TRANSFER AND THE COST OF ACQUISITION OF THE ASSET A ND THE COST OF ANY IMPROVEMENT THERETO. THE SECTION DOES NOT SHOW THAT ONLY CONSIDERATION SHOWN IN SALE DEED IS TO BE REGARDED AS THE FULL VALUE OF THE CONSIDERATION RECEIVED. THERE IS NOTHING IN THE SECT ION, WHICH PRECLUDED THE AO FROM SUBSTITUTING THE ACTUAL SALE CONSIDERATION FOR THE SALE CONSIDERATION SHOWN IN THE SALE DEEDS, IF THERE IS EVIDENCE TO SHOW THAT T HE ASSESSEE HAD INDEED RECEIVED HIGHER AMOUNT. THUS, TH E CONTENTION OF THE COUNSEL FOR THE ASSESSEE THAT THE AO IS NOT EMPOWERED TO SUBSTITUTE THE CONSIDERATION FOR TH E SALE CONSIDERATION SHOWN IN THE SALE DEEDS IS WITHOUT ANY SUBSTANCE. IF THIS CASE THE CASE, THERE WAS NO NEED FOR THE LEGISLATURE TO CONFER POWERS ON THE AO UNDE R SECTION 55A FOR MAKING A REFERENCE TO VALUATION OFFICE R WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF CA PITAL ASSET FOR THE PURPOSE OF COMPUTATION OF INCOME FROM CAPITAL GAINS PROVIDED UNDER CHAPTER IV. IF THE AO CANNOT ASCERTAIN CONSIDERATION AND SUBSTITUTE THE SAM E WITH THE ONE SHOWN IN THE SALE DEED FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS THEN THE WHOLE EXERCISE OF REFERRING THE PROPERTY TO VALUATION CELL WOULD HAVE BEEN FUTILE. AS REGARDS THE CONTENTION OF THE COUNSEL THAT HAD T HERE BEEN UNDERVALUATION OF SALE CONSIDERATION IN THE SALE DEEDS, THE REVENUE AUTHORITIES OF THE STATE GOVERNME NT WOULD HAVE NOT REGISTERED THE SALE DEEDS, IT IS MENTIONED THAT SALE RATES FIXED BY THE ST ATE GOVERNMENT ARE ONLY INDICATIVE OF THE RATES BUT ARE N OT DECISIVE OR CONCLUSIVE OF THE MARKET RATES. IT IS COMM ON KNOWLEDGE THAT DUE TO VARIOUS REASONS AND ALSO THE PROCEDURAL REQUIREMENT THE RATES ARE NOT REVISED IMMEDIATELY AS SOON AS THESE GO UP. THE RATES FIXED BY THE STATE REVENUE AUTHORITIES FOR THE PURPOSE OF STA MP DUTY ARE NOT CONCLUSIVE ABOUT THE MARKET RATES OF THE PROPERTY. THE SAME DEPENDS ON SEVERAL OTHER FACTORS . THEREFORE, THIS PLEA IS ALSO OF NO HELP TO ASSESSEE. 5. THE JUDGEMENT OF HON'BLE ITAT AMRITSAR BENCH CIT ED SUPRA SPELLS OUT THE CIRCUMSTANCES IN WHICH FULL VALUE OF SALE 13 CONSIDERATION CAN BE TAKEN TO BE A FIGURE OTHER THAN REGISTERED PRICE. IT NEEDS TO BE SEEN WHETHER THE DEAL FOR TRAN SFER OF IMPUGNED LAND WAS NEGOTIATED AT A PRICE RECORDED IN THE REGISTERED DOCUMENT OR HIGHER AMOUNT AS EVIDENCED B Y CIRCUMSTANTIAL EVIDENCE. IT IS SETTLED LAW THAT WHILE DECIDING THE MATTERS INCOME TAX AUTHORITIES CAN TAKE INTO ACCO UNT THE CIRCUMSTANTIAL EVIDENCE AND ALSO APPLY THE TEST OF H UMAN PROBABILITIES. IN THE CASE OF CIT VS. DURGA PRASAD 82, ITR 540 (SC), THE HON'BLE APEX COURT HAS HELD THAT THOU GH AN APPARENT STATEMENT MUST BE CONSIDERED REAL UNTIL IT W AS SHOWN THAT THERE WERE REASONS TO BELIEVE THAT APPARE NT WAS NOT REAL, IN A CASE WHERE PARTY RELIED ON SELF SERVI NG RECITALS IN DOCUMENTS, IT WAS FOR THE PARTY TO ESTABLISH THE TRUTH OF THOSE RECITALS. THE TAXING AUTHORITIES WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALI TY OF SUCH RECITALS. IN THE CASE OF SUMATI DAYAL VS. CIT , THE HON'BLE APEX COURT OBSERVED THAT THE IT AUTHORITIES COULD CONSIDER THE SURROUNDING CIRCUMSTANCES AND APPLY TH E TEST OF HUMAN PROBABILITY WHILE DECIDING THE ISSUES BEFO RE THEM. IN THE CASE OF HIRA LAI RAM DAYAL, THE HON'BL E PUNJAB AND HARYANA HIGH COURT OBSERVED THAT IF AN AS SESSEE, EVEN IN THE FACE OF REGISTERED SALE DEED, IS ABLE TO P ROVE BY COGENT EVIDENCE AND SATISFY THE TRIBUNAL THAT NO SA LE TOOK PLACE, THE TRIBUNAL HAS TO COME TO THE CONCLUSION TH AT NO SALE TOOK PLACE. IT WAS HELD THAT THAT THE REGISTERED SAL E DEED EXECUTED BY THE ASSESSEE TO SELL THE PROPERTY WAS N OT CONCLUSIVE THAT SALE HAD ACTUALLY TAKEN PLACE. THE HIGH COURT FURTHER OBSERVED THAT PEOPLE, WHO WANT TO AVOID PAY MENT OF TAX, SELL THE PROPERTY BY GETTING THE SALE DEEDS EXE CUTED AT UNDERSTATED VALUE. IF IT WAS HELD THAT SALE DEED WAS FINAL, THE I.T AUTHORITIES WOULD BE BARRED FROM FINDING HOW MUCH SALE CONSIDERATION PASSED UNDER THE TRANSACTION. THE FAC TUM OF SALE AND SALE PROCEEDS ARE REAL QUESTIONS TO BE DET ERMINED BY I.T. AUTHORITIES. THE PERUSAL OF ABOVE DETAILED JUD GEMENTS SHOWS THAT MERE FACT THAT THE ASSESSEE HAD EXECUTED THE SALE DEEDS AT A PARTICULAR PRICE IS NOT CONCLUSIVE IN DECIDING THE FULL VALUE OF ACTUAL PURCHASE CONSIDER ATION 14 PAID. IN THIS CASE DIRECT EVIDENCE IS IN THE FORM O F CONFESSIONAL STATEMENT OF THE SELLER WHICH HAS NOT BEEN RETRACTED EVEN AFTER PERIOD OF 9 YEARS. THE ONLY LO GICAL CONCLUSION THAT CAN BE DRAWN FROM GIVEN CIRCUMSTANC ES IS THAT ASSESSEE ACTUALLY PAID PRICE FOR THE PROPERTY WHICH WAS HIGHER THAN RS. 3,70,000/- AND THEREFORE PURCHAS ED THE IMPUGNED PROPERTY FROM THE SELLERS, THOUGH THE REGI STERED DOCUMENT REFLECTED VERY LOW CONSIDERATION OF RS 3,70,000/-. I THINK THE REVENUE HAS DISCHARGED THE BURDEN CAST UPON IT TO PROVE THE ACTUAL CONSIDERATION AT R S 38,00,000/- AT LEAST, IF NOT HIGHER. IN THE CIRCUMS TANCES, THE EXPLANATION GIVEN BY THE ASSESSEE FOR CONCEALMENT OF INCOME HAS NO LEGS TO STAND ON AS NOTHING MORE NEEDS TO BE BROUGHT ON RECORD TO PROVE THAT THE ACTUAL SALE CONSIDERATION PAID BY THE APPELLANT WAS RS. 38,00,0 00/- AS HE HAD UNACCOUNTED INCOME TO THE TUNE OF RS. 34,30,000/- DURING THE YEAR UNDER CONSIDERATION. HE HA S NOT BEEN ABLE TO EXPLAIN THE SOURCES THEREOF AND THE REA SONS FOR NOT DISCLOSING THE SAID INCOME FOR THE YEAR UNDER CONSIDERATION. AS SUCH, THE ACTION OF AO IN IMPOSIN G THE PENALTY U/S 271(L)(C) IS CONFIRMED. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT ORIGINAL RETURN WAS FILED ON 16.11.1 999 AND ASSESSEE DISCLOSED ALL THE PARTICULARS CORRECTL Y. NOTICE UNDER SECTION 148 WAS ISSUED ON 10.03.2005 A FTER THE SEARCH WAS CONDUCTED ON 24.05.2000. DURING POS T SEARCH INVESTIGATION, STATEMENTS OF SELLER SHRI DIG VIJAY SINGH AND PREM LATA WERE RECORDED AND ASSESSEE WAS ALLOWED CROSS OBJECTION ON 08.05.2008 IN WHICH THEY DID NOT MAKE SPECIFIC ALLEGATION AGAINST THE ASSESS EE OF PAYMENT OF CASH. NO MATERIAL WAS FOUND DURING THE 15 COURSE OF SEARCH TO PROVE THAT ASSESSEE PAID ANY AM OUNT OVER AND ABOVE WHAT IS RECORDED IN THE SALE DEED. NO INCRIMINATING MATERIAL WAS FOUND IN SEARCH AGAINST THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS BONA FIDE. THE SELLER SHRI DIGVIJAY SINGH IN HIS STATEMENT STA TED THAT MATERIAL OF SALE CONSIDERATION WAS FOUND IN SU RVEY BUT NO MATERIAL HAS BEEN PRODUCED ON RECORD. THE SELLER HAVE ALSO DECLARED THE SAME SALE CONSIDERATI ON IN THEIR ORIGINAL RETURN OF INCOME. THE ASSESSEE ALSO FILED EVIDENCES OF COMPARABLE CASES TO SHOW THAT SALE CONSIDERATION AS PER SALE DEED OF THE ASSESSEE WAS TRUE AND CORRECT. THE SELLER HAVE OFFERED HIGHER AMOUNT ONLY FOR THE PURPOSE OF TAXATION. THE REVENUE DEPARTMEN T DID NOT DOUBT THE SALE DEED IN QUESTION AND ADDITIO N IS PURELY MADE ON THE STATEMENTS OF THE SELLERS. HE H AS SUBMITTED THAT PENALTY AND QUANTUM PROCEEDINGS ARE DIFFERENT AND NOTHING IS PROVED THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. NO POSITIVE EVIDENCES HAVE BEEN FOUND AGAINST THE ASSESSEE OF CONCEALMENT OF INCOME, THEREFORE, NO PENALTY IS LEV IABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HE HAS RELIED UPON DECISION OF ANDHRA PRADESH HIGH COURT I N THE CASE OF CIT V KODURI PAPA RAO 102 ITR 834 IN WH ICH IT WAS HELD AS UNDER : EVEN WHERE ADDITION IS MADE AS INCOME OF ASSESSEE FROM UNDISCLOSED SOURCES ON FINDING HIS SUCCESSIVE EXPLANATIONS UNSA TISFACTORY, PENALTY FOR CONCEALMENT UNDER S. 28(L)(C) CANNOT BE LEVIED IN THE ABSENCE OF 16 POSITIVE EVIDENCE TO SHOW THAT THE AMOUNT WAS INCOM E OF ASSESSEE DELIBERATELY CONCEALED. 8. THE EXPLANATION GIVEN BY THE ASSESSEE IS BONAFID E AND WOULD NOT LEAD TO LEVY OF THE PENALTY UNDER SEC TION 271(1)(C) OF THE ACT. ON THE OTHER HAND, LD. DR RE LIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT QUANTUM ADDITION HAS BEEN CLAIMED BY THE TRIBUNAL, COPY OF THE ORDER DATED 09.07.2012 IS FILED ON RECO RD. THE LD. DR, THEREFORE, SUBMITTED THAT PENALTY SHALL BE CONFIRMED IN THE MATTER. 9. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. HON'BLE PUNJAB & HARYANA H IGH COURT IN THE CASE OF PARAMJIT SINGH V ITO 323 ITR 5 88 HELD AS UNDER : 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 REGISTERED SALE DEED DATED SEPTEMBER 24, 2002 ADDED TO THE INCOME OF THE ASSESSEE. THE TRIBUNAL DISREGARDED THE STATEMENT MADE ON AFFIDAVIT BY THE VENDORS WHO WERE THE UNCLES OF THE ASSESSEE. THEY HAD STATED THAT NO SALE CONSIDERATION HAD PASSED HANDS AND THEY HAD RELINQUISHED THEIR SHARE IN THE LANDED PROPERTY. THE OBJECT OF EXECUTING THE SALE DEED WAS ONLY TO 17 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 AND DESERVED TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE. 9. HON'BLE SUPREME COURT IN THE CASE OF M/S RAJASTHAN SPINNING & WEAVING MILLS (2009)-TIOL-63(S .C) HELD THAT ON EVERY DEMAND, PENALTY IS NOT AUTOMATIC. HON'BLE SUPREME COURT IN THE CASE OF CIT V MUNIM 31 3 ITR (STATUTE) (S.C) 30 CONFIRMING THE DECISION OF H ON'BLE PUNJAB & HARYANA HIGH COURT REPORTED IN 302 ITR 262 HELD THAT WHERE ASSESSEE DOES NOT INCLUDE PARTICULAR ITEM IN THE TAXABLE TURNOVER UNDER BONAFIDE BELIEF THAT HE IS NOT LIABLE TO DO SO, IT WOULD NOT BE RIGHT TO TR EAT THE RETURN AS FALSE RETURN INVITING PENALTY. 9(I). IN THIS CASE, THE ASSESSEE FILED ORIGINAL RE TURN OF INCOME ON 16.11.1999 ON THE BASIS OF THE MATERIAL AVAILABLE WITH HIM DISCLOSING THE COMPLETE TRANSACT ION OF PURCHASE OF THE PROPERTY BASED ON SALE DEED EXEC UTED BETWEEN ASSESSEE AND THE SELLER. THERE WAS NO INCRIMINATING MATERIAL AVAILABLE AT THAT TIME AGAIN ST THE ASSESSEE FOR MAKING ANY ADDITION. THE SELLERS SMT. 18 PREM LATA AND SHRI DIGVIJAY HAVE ALSO FILED THEIR ORIGINAL RETURN OF INCOME IN WHICH THEY HAVE DECLAR ED SALE CONSIDERATION AS PER THE AMOUNT MENTIONED IN T HE SALE DEED. THEY HAVE FILED THEIR REVISED RETURN OF INCOME LATER ON WHEN SURVEY WAS CONDUCTED IN THE CA SE OF SELLER. THE ASSESSEE, DURING THE QUANTUM PROCEEDINGS HAVE FILED DETAILS OF COMPARABLE CASES TO PROVE THAT THE SALE CONSIDERATION MENTIONED IN THE SALE DEED IS MORE OR LESS THE SAME WHICH HAVE NOT BEEN DISPUTED BY THE REVENUE AUTHORITIES. THE INVESTIGA TION WING DURING THE COURSE OF INQUIRIES RECORDED THE STATEMENTS OF THE SELLERS IN WHICH FOR THE FIRST TI ME, IT WAS STATED THAT THE SELLERS HAVE RECEIVED MORE SALE CONSIDERATION IN CASH FROM THE ASSESSEE. THE ASSES SEE HAS BEEN ALLOWED CROSS-EXAMINATION OF THEIR STATEME NTS ON 08.05.2008. COPY OF THEIR STATEMENTS AND CROSS- EXAMINATION ARE FILED IN THE PAPER BOOK WHICH HAVE ALSO BEEN CONSIDERED BY THE TRIBUNAL IN THE QUANTUM APPEALS. SMT. PREM LATA IN HER STATEMENT STATED THE SALE CONSIDERATION OF RS. 38 LACS, HOWEVER IN HER C ROSS- EXAMINATION, WHEN A QUESTION WAS PUT TO HER DO YOU KNOW MR. JOGINDER LAL BY FACE NOT ? SHE HAS ANSWERED NO. IT WAS ONLY A PRESUMPTION THAT IT WAS THE BUYE R. AS REGARDS UTILIZATION OF THE CASH AMOUNT, SHE WAS NOT ABLE TO GIVE ANY ANSWER SPECIFICALLY. 9(II) SIMILARLY, THE CROSS-EXAMINATION OF SHRI DIG VIJAY WAS CONDUCTED ON BEHALF OF THE ASSESSEE. QUESTION NO. 3 19 WAS ASKED TO HIM IN CROSS-EXAMINATION, DO YOU REMEMBER WHO PAID YOU CASH AMOUNT AT THE TIME OF EXECUTION O F SALE DEED ? - ANSWER I DO NOT REMEMBER AT PRESENT. QUESTION NO. 4 WAS AGAIN ASKED TO HIM IN THE CROSS- EXAMINATION, DO YOU HAVE ANY PROOF THAT YOU RECEIVED THE AMOUNT IN CASH ? ANSWER NO, BUT IT WAS USED FOR CONSTRUCTION OF MY HOUSE HE FURTHER STATED IN THE CROSS- EXAMINATION THAT ORIGINAL RETURN WAS FILED AS PER S ALE DEED ONLY, AND FURTHER STATED THAT DURING SURVEY, VARIOUS QUERIES WERE RAISED INCLUDING SALE CONSIDERATION OF THE SAID PROPERTY. SINCE HE WAS HEART PATIENT, AFTER CONSIDERING COUNSEL, HE HAD OFFERED ADDITIONAL INCO ME ON ACCOUNT OF SALE CONSIDERATION OF THE SAID PROPERTY FOR TAXATION PURPOSES. FROM THE FACTS STATED IN THE CR OSS- EXAMINATION OF THE SELLER SMT. PREM LATA AND SHRI DIGVIJAY, IT IS CLEARLY BROUGHT ON RECORD THAT THEY WERE NOT SURE ABOUT THE FACT THAT WHO HAS GIVEN CASH AMOUNT TO THEM OVER AND ABOVE WHAT IS RECORDED IN THE SALE DE ED. ATLEAST ONE FACT IS VERY CLEAR THAT BOTH THE SELLER S HAVE NOT IDENTIFIED THE ASSESSEE FOR GIVING CASH AMOUNT TO THEM AT THE TIME OF EXECUTION OF THE SALE DEED. THESE V ITAL FACTS SHOULD NOT BE IGNORED AT THE TIME OF CONSIDER ING THE PENALTY MATTER. IT IS WELL SETTLED LAW THAT THE FI NDINGS GIVEN IN THE QUANTUM PROCEEDINGS ARE RELEVANT AND H AVE PROBATIVE VALUE BUT THESE ARE NOT CONCLUSIVE TO LEV Y THE PENALTY AGAINST THE ASSESSEE. THE ASSESSEE CAN EXP LAIN AT THE PENALTY STAGE THAT PENALTY IS NOT LEVIABLE ON T HE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ST ATEMENT 20 OF SHRI DIGVIJAY IN THE CROSS-EXAMINATION ALSO MADE IT CLEAR THAT THE SELLER HAVE FILED REVISED RETURN ONL Y AFTER SURVEY WAS CONDUCTED IN THEIR CASES. BUT NOTHING I S BROUGHT ON RECORD IF ANY INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SURVEY IN THE CASES OF THE SEL LERS TO PROVE IF ASSESSEE HAS PAID ANY CASH AMOUNT OVER AND ABOVE WHAT IS RECORDED IN THE SALE DEED. 9(III) THE ABOVE FACTS, THEREFORE, CLEARLY PROVE ON RECORD THAT THE SELLERS IN THEIR ORIGINAL RETURN OF INCOME HAVE SHOWN THE CORRECT SALE CONSIDERATION OF RS. 3,70,00 0/- AND IT WAS LATER ON DURING SURVEY WHEN THEY HAVE MA DE SAME STATEMENTS AND REVISED THEIR RETURN OF INCOME DECLARING HIGHER CONSIDERATION. THE SELLERS HAVE N OT BEEN ABLE TO NAME ANY PERSON WHO HAD PAID SALE CONSIDERA TION IN CASH TO THEM. THEREFORE, REVENUE WOULD NOT BE H AVING ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE, EI THER FOUND DURING THE COURSE OF SEARCH IN THE CASE OF TH E ASSESSEE OR DURING THE COURSE OF SURVEY CONDUCTED I N THE CASE OF SELLERS TO PROVE IF ASSESSEE PAID ANY CASH AMOUNT TO THE SELLER. THE REVENUE AUTHORITIES ARE TRYING TO DISPUTE THE SALE CONSIDERATION MENTIONED IN THE REG ISTERED SALE DEED THROUGH THE ORAL EVIDENCE. HOWEVER, HON' BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PARAMJIT SINGH (SUPRA) DID NOT APPROVE SUCH PROPOSITION AND HELD THAT NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUME NT CONTAINED ALL THE TERMS AND CONDITIONS. THE EXPL ANATION 21 GIVEN BY THE ASSESSEE CLEARLY PROVES THAT EXPLANATI ON OF THE ASSESSEE WAS BONAFIDE AND ASSESSEE WAS JUSTIFIE D IN CONTENDING THAT HE HAS NOT INCLUDED THE CASH AMOUNT AS ALLEGED SALE CONSIDERATION IN THE RETURN OF INCOME. THE EXPLANATION GIVEN BY THE ASSESSEE CREATES A DOUBT I N THE STORY OF THE REVENUE. EVEN THOUGH THE QUANTUM ADDIT ION HAS BEEN CONFIRMED BUT THE FACTS AND CIRCUMSTANCES NOTED ABOVE CLEARLY PROVE THAT IT IS NOT A FIT CASE OF LEVY OF PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME. EVEN WHERE ADDITION IS MADE AS INCOME OF THE ASSESSEE FR OM UNDISCLOSED SOURCE ON FINDING THE SUCCESSIVE EXPLAN ATION OF THE ASSESSEE UNSATISFACTORY BUT, IN MY VIEW THE PENALTY FOR CONCEALMENT CANNOT BE LEVIED IN THE ABSENCE OF POSITIVE EVIDENCE TO SHOW THAT AMOUNT WAS INCOME OF THE ASSESSEE WHICH WAS DELIBERATELY CONCEALED. 10. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IN THE LIGHT OF VARIOUS DECISIONS NOT ED ABOVE, I AM OF THE VIEW THAT PENALTY IS NOT LEVIABL E AGAINST THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. I , ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BE LOW AND CANCEL THE PENALTY. I MAY NOTE HERE THAT THE OBSER VATION AND FINDINGS IN THIS ORDER SHALL NOT HAVE ANY BEARI NG ON THE QUANTUM MATTER ALREADY DECIDED BY THE TRIBUNAL. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 22 ITA 924/2013 (SMT. BIMLA RANI ) 12. THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN IT A 923/2013 IN THE CASE OF SHRI JOGINDER SINGH. FOLLO WING THE REASONS FOR DECISION IN THE CASE OF SHRI JOGIND ER SINGH, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 14. IN THE RESULT, BOTH THE APPEALS OF DIFFERENT ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 28 TH JULY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD