Vikrant Chaudhary, Panchkula V. ACIT, Panchkula

ITA 978/CHANDI/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5428 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-08-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 14-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: KK BASSI
• Keywords: Unexplained investment; Income from undisclosed sources; Principle of natural justice; Retraction; Reason to believe
• Section: 147; 131; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: A BENCH: CH ANDIGARH BEFORE HONBLE SHRI D K SRIVASTAVA, AM AND HONBLE MS. SUSHMA CHOWLA, JM ITA NO. 978/CHANDI/2009 ASSESSMENT YEAR: 2001-02 VIKRANT DUTT CHAUDHARY V A.C.I.T. PANCHKULA H NO. 162, SECTOR 2, PANCHKULA PAN: AHFPC 8192 B ITA NO. 979/CHANDI/2009 ASSESSMENT YEAR: 2001-02 MRS. VIJAY DUTT CHAUDHARY V A.C.I.T. PANCHKULA H NO. 162, SECTOR 2, PANCHKULA PAN: AHFPC 8225 R ITA NO. 980/CHANDI/2009 ASSESSMENT YEAR: 2001-02 PRASHANT DUTT CHAUDHARY V A.C.I.T. PANCHKULA H NO. 162, SECTOR 2, PANCHKULA PAN: AFLPD 8640 L (APPELLANT-ASSESSEES) (RESPONDENT) APPELLANT-ASSESSEES BY: SHRI KK BASSI, FCA RESPONDENT BY: SHRI NK SAINI, DR ORDER D K SRIVASTAVA : ALL THE AFORESAID THREE ASSESSEES WERE CO-OWNERS OF THE PROPERTY BEING HOUSE NO. 146, SECTOR 8A, CHANDI GARH, WHICH WAS SOLD BY THEM IN THE YEAR UNDER APPEAL. THE ASSESSING OFFICE R (AO IN SHORT) HAS ENHANCED THE SALE CONSIDERATION FOR THE REASONS GIV EN BY HIM IN THEIR ASSESSMENT ORDERS AND TAXED THE CAPITAL GAINS ARISI NG THEREON ACCORDINGLY. ON APPEAL, THE ACTION OF THE AO HAS BEEN CONFIRMED BY THE LEARNED FIRST APPELLATE AUTHORITY, I.E., THE COMMISSIONER OF INCOME-TAX (AP PEALS). AGGRIEVED BY THE ORDER PASSED BY THE CIT(A), THEY ARE NOW IN APPEAL BEFORE THIS TRIBUNAL. ALL OF THEM HAVE TAKEN IDENTICAL GROUNDS OF APPEAL. FACTS AND CIRCUMSTANCES OF THE CASE AND THE GROUNDS OF APPEAL BEING SIMILAR IN ALL THE THREE APPEALS, IT WILL BE CONVENIENT TO DISPOSE OFF ALL THE THREE APPEALS BY A COMMON ORDER. FOR THE SAKE OF CLARITY, THE APPEAL FILED BY SMT. VIJAY DUT T CHAUDHARY IS TAKEN AS A LEAD CASE. IN VIEW OF THE SIMILARITY IN FACTS, ISSUES AN D SUBMISSIONS MADE BY THE SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 2 2 PARTIES, THE DECISION TAKEN IN THE LEAD CASE SHALL MUTATIS MUTANDIS APPLY TO OTHER TWO APPEALS ALSO. GROUNDS OF APPEAL 2. GROUNDS OF APPEAL, AS AMENDED, ARE IDENTICAL IN AL L THE THREE APPEALS. THEY READ AS UNDER: 1. THAT THE ORDER OF THE AO BAD IN LAW AND ON FACT S AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2. THAT THE INITIATION OF PROCEEDINGS U/S 147/148 OF THE ACT WAS UNJUST AND REASONS TO BELIEVE RECORDED FOR COMMEN CEMENT OF RE- OPENING PROCEEDINGS WERE NOT FACTUAL AND WERE TOTAL LY UNFOUNDED, WRONG, ARBITRARY AND FRIVOLOUS AND ON THE WRONG GRO UND AND THEREFORE PROCEEDINGS U/S 147/148 ARE LIABLE TO BE QUASHED. 3. THAT THE AO HAS NOT PASSED SPEAKING ORDER IN RES PONSE TO ASSESSEES SUBMISSION FOR CHALLENGING REASONS TO B ELIEVE BEFORE THE COMMENCEMENT OF ASSESSMENT PROCEEDINGS. 4. THE AO HAS WRONGLY MADE ADDITION OF RS. 18,00,00 0/- AND WRONGLY RELIED ONLY ON THE FORGED PHOTOCOPY AND NOT ON THE ORIGINAL DOCUMENT, THE IDENTITY OF THE COMPLAINANT IS NOT ON RECORDS WHILE MAKING AN ADDITION OF RS. 18,00,000/- AND WRONGLY I GNORED THE REGISTERED SALE DEED AND STATEMENT OF BUYERS RECORD ED THRICE BEFORE ADITS & AO DURING ASSESSMENT PROCEEDINGS. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE ADDITIONS MADE IGNORING THE FACTS AND SUBMISSIONS O F THE APPELLANT, LEGAL POSITION AND JUDICIAL PRECEDENTS, IS AGAINST THE PROVISION OF LAW, WRONG, BASELESS, INVALID AND THEREFORE, THE SAID AD DITIONS ARE LIABLE TO BE DELETED AS A WHOLE. 6. THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WITHO UT PREJUDICE TO ONE ANOTHER. 7. THAT THE APPELLANT RESERVE ITS RIGHT TO ADD, ALT ER, AMEND, MODIFY OF FOREGO ANY GROUND OF APPEAL WITH THE PERMISSION OF THE HON'BLE MEMBERS ITAT BEFORE OR AT THE TIME OF HEARING/FINAL DISPOSAL OF THIS APPEAL. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 3 3 8. KINDLY STAY THE DEMAND PENDING DISPOSAL OF APPEA L. FACTS OF THE CASE 3. BRIEFLY STATED, THE FACTS OF THE CASE AS CULLED OU T FROM THE ASSESSMENT ORDERS, STATEMENT OF FACTS FILED BY THE ASSESSEES B EFORE THE CIT(A), THE APPELLATE ORDERS PASSED BY THE CIT(A), AND OTHER MA TERIALS PLACED BEFORE US ARE AS UNDER: (I) SMT. VIJAY DUTT CHAUDHARY, ONE OF THE ASSESSEES IN APPEAL INHERITED THE PROPERTY BEARING HOUSE NO.146, SEC 8- A, CHANDIGARH FROM HER MOTHER-IN-LAW. SHE ALONG WITH HER TWO SONS, NAM ELY, S/SHRI PARSHANT DUTT CHAUDHARY AND VIKRANT DUTT CHAUDHARY BEING OTHER TWO ASSESSEES IN APPEAL ARE CO-OWNERS OF THE SAID PROPE RTY. (II) THE SAID PROPERTY WAS SOLD REPORTEDLY FOR APPARENT CONSIDERATION OF RS. 39.00 LAKHS IN SEPTEMBER 2000 IN WHICH THE S HARE OF EACH CO- OWNER WAS SHOWN AT RS.13.00 LAKHS. THE PROPERTY WAS PURCHASED BY SHRI JOGINDER SINGH AND SMT. HERJINDER KAUR. (III) IT IS CLAIMED THAT NEGOTIATIONS FOR SALE OF PROPER TY WERE CARRIED OUT BY THE HUSBAND OF SMT. VIJAY CHAUDHARY AND SMT. VIJAY CHAUDHARY. (IV) NONE OF THE THREE ASSESSEES FILED VOLUNTARY RETURN OF INCOME U/S 139 FOR THE ASSESSMENT YEAR UNDER APPEAL ON THE GRO UND THAT THEIR INCOME WAS BELOW TAXABLE LIMIT. (V) MATERIALS AVAILABLE ON RECORD INCLUDING THE STATEM ENT OF FACTS FILED BY THE ASSESSEES BEFORE THE LD. CIT(A) SHOW T HAT A TAX EVASION PETITION WAS RECEIVED BY THE INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT CONSEQUENT UPON WHICH INQUIRIES WERE INI TIATED BY THE ASSISTANT DIRECTOR OF INCOME-TAX (INV.). (VI) IN THE COURSE OF INQUIRY INITIATED BY THE INVESTIG ATION WING OF THE DEPARTMENT, THE ASSESSEES WERE CONFRONTED WITH THE PHOTOCOPY OF A RECEIPT DULY DATED AND SIGNED BY SMT. VIJAY DUTT CH AUDHARY AND HER SONS, NAMELY, S/SHRI PRASHANT DUTT CHAUDHARY AND VI KRANT DUTT CHOUDNARY AS WITNESSES. A COPY OF THE SAID RECEIPT DATED 15.9.2000 (RECEIPT IN SHORT) HAS BEEN PLACED BY THE ASSESSE ES IN THEIR PAPER BOOK SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 4 4 FILED BEFORE THIS TRIBUNAL. IT IS RECITED IN THE SA ID RECEIPT THAT A SUM OF RS.55.00 LAKHS WAS RECEIVED BY SMT VIJAY DUTT CHAUD HARY FROM SHRI JOGINDER SINGH AND SMT. HARJINDER KAUR AS PART PAYM ENT TOWARDS SALE OF HOUSE NO.146, SEC 8-A, CHANDIGARH OVER AND ABOVE RS .38.00 LAKHS TO BE PAID SUBSEQUENTLY. THE SAID RECEIPT IS DATED 15. 9.2000 AND CARRIES SIGNATURES OF SMT. VIJAY DUTT CHAUDHARY ON THE REVENUE STAMP AFFIXED ON THE RECEIPT AND THE SIGNATURES OF BOTH O F HER SONS AS WITNESSES. A COPY OF THE SAID RECEIPT WAS GIVEN BY THE ADIT (INV.) TO THE ASSESSEES FOR VERIFICATION. AFTER VERIFICATION, SMT . VIJAY DUTT CHOUDNARY AND SHRI PRASHANT CHAUDHARY VERIFIED THE AUTHENTICI TY OF THEIR SIGNATURES AS APPEARING ON THE SAID RECEIPT AND CONFIRMED ON 4 .11.2003 THAT THE SIGNATURES ON THE RECEIPT WERE THEIR OWN SIGNATURES AND THAT THEY HAD ACTUALLY SIGNED ON THE SAID RECEIPT. (VII) THE ADIT (INV.) THEN PROCEEDED TO RECORD THE STATE MENT OF SMT. VIJAY DUTT CHAUDHARY ON OATH ON 4.11.2003. DURING T HE COURSE OF HER STATEMENT, SMT. VIJAY CHAUDHARY STATED THAT SHE WAS A HOUSE WIFE AND HAD NO SOURCE OF INCOME. IT WAS FURTHER STATED THAT HER HUSBAND SHRI VIRAT DUTT CHAUDHARY WAS POSTED AT DELHI AS ASSTT. COMMISSIONER (NARCOTICS). AS REGARDS THE GENUINENESS OF THE PHOT OCOPY OF RECEIPT EVIDENCING RECEIPT OF RS. 55.00 LAKHS BY HER FROM T HE BUYERS OF THE PROPERTY, THE RELEVANT QUESTIONS PUT BY THE ADIT (I NV.) AND THE ANSWERS GIVEN BY SMT. VIJAY DUTT CHAUDHARY READ AS UNDER:- QUESTION NO. 3 DID YOU SIGN ANY DOCUMENT/AGREEMEN T/RECEIPT IN LIEU OF AMOUNT RECEIVED? ANSWER - I DID NOT SIGN ANY RECEIPT AS FAR AS I REMEMBER CANT RECALL AT THIS POINT OF TIME. QUESTION NO. 4 NOW I AM SHOWING YOU A RECEIPT DAT ED 15.9.2000 WHERE YOU HAVE SIGNED AS A TOKEN OF HAVIN G RECEIVED A SUM FROM SHRI JOGINDER SINGH AND SMT. HARJINDER KAU R ON ACCOUNT OF PART PAYMENT FOR THE SALE OF H NO. 146, SECTOR 8 A, CHANDIGARH. COMMENT ON IT? SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 5 5 ANSWER - YES, I VERIFY THAT THESE SIGNATURES BELONG TO ME. I HAVE SIGNED ON THE REVENUE STAMP IN THIS RECEIPT AN D I HAVE CERTIFIED AGAIN TODAY, I.E., 4.11.2003. (VIII) AT THE END OF THE STATEMENT, SMT. VIJAY DUTT CHAUD HARY CONFIRMED THAT THE STATEMENT AS RECORDED HAS BEEN R EAD OVER AND ACCEPTED BY HER AS CORRECT. THE STATEMENT IS DULY S IGNED BY HER. A COPY OF HER STATEMENT RECORDED ON 4.11.2003 BY THE ADIT (INV.) WAS ALSO SUPPLIED TO HER ON THE SAME DATE ON WHICH IT WAS RE CORDED, I.E., 4.11.2003, BY THE ADIT (INV.) TOGETHER WITH A COPY OF RECEIPT AS REFERRED TO IN HER STATEMENT. (IX) STATEMENT OF SHRI PRASHANT DUTT CHAUDHARY WAS ALSO RECORDED ON 4.11.2003 BY THE ADIT (INV.). THE RELEVANT QUESTION S PUT BY THE ADIT (INV.) AND THE ANSWERS GIVEN BY SHRI PRASHANT DUTT CHAUDHARY READ AS UNDER: QUESTION NO.2 DID YOU SELL ANY PROPERTY BEFORE PU RCHASING THIS PROPERTY? ANSWER YES, I SOLD MY SHARE IN H NO. 146, SECTOR 8A, CHANDIGARH (2 KANALS). THIS HOUSE WAS SOLD BY US IN THE YEAR 2000 JUST BEFORE WE PURCHASED THIS PROPERTY. I HAD 1/3 RD SHARE IN H NO. 146, SEC 8A, CHANDIGARH. 1/3 RD SHARE IN THE NAME OF MY MOTHER AND 1/3 RD SHARE IN THE NAME OF MY BOTHER SHRI VIKRANT DUTT CHAUDHARY. THIS PROPERTY WAS WILLED BY MY GRAN D MOTHER TO THREE OF US. THE PROPERTY WAS SOLD BY US TO SOMEBOD Y OF BADALS AREA OR RELIABLE TO HIM WHO WAS LIVING IN SOME HOUS E IN SEC 9, CHANDIGARH. THE BUYERS WERE SOME SIKH FAMILY INCLUD ING HUSBAND, WIFE AND DAUGHTER. NOW AFTER YOU HAVE TOLD ME, I CAN RECALL THAT THE NAMES OF BUYERS WERE SHRI JOGINDER SINGH AND SMT. HARJINDER KAUR. QUESTION NO. 3- WHAT WAS THE CONSIDERATION RECEIVED FOR SALE OF H NO. 146, SEC 8A, CHANDIGARH? ANSWER - I DONT KNOW ANYTHING ABOUT THIS MATTER. MY FATHER SHRI VIRAT DUTT CHAUDHARY AND MY MOTHER HAND LE THE CONSIDERATION POINT. THE DEAL WAS MADE IN FRONT ME SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 6 6 AND MY BOTHER VIKRANT ALSO BUT I CANT RECALL THE D ETAILS AS TO HOW MUCH MONEY WAS RECEIVED BY US AND WHAT WAS T HE REGISTRATION AMOUNT. MY FATHER COLLECTED THE PAYMEN T ON OUR BEHALF. THE DEAL WAS FINALISED WITH ONE PROPERTY DEALER SARDARJI WHOSE NAME I DONT REMEMBER BUT USED TO CO ME TO OUR HOUSE WHEN WE WERE LIVING IN H NO. 146, SEC 8A, CHA NDIGARH BEFORE OCTOBER, 2000. QUESTION NO. 4 DID YOU SIGN ANY DOCUMENT DURING T HE SALE OF H NO. 146, SEC 8A, CHANDIGARH? ANSWER - THE DEAL WAS FINALISED AFTER TWO THREE VIS ITS OF SHRI JOGINDER SINGH AND PROPERTY DEALER OF THIS HOUSE. A FTER THAT I DONT REMEMBER WHETHER ANY ADVANCE MONEY WAS PAID. I ALSO DONT REMEMBER WHETHER I SIGNED ANY AGREEMENT OR DO CUMENT OR RECEIPT IN LIEU OF PAYMENT RECEIPT. AT THIS MOMENT I CANNOT RECALL BUT IF YOU SHOW ME SOME SUCH DOCUMENT WITH M Y SIGNATURES THEN I CAN VERIFY IT. QUESTION NO. 5- THERE IS A RECEIPT DATED 15.9.2000 WITH REGARD TO THE SALE OF H NO. 146, SEC 8A, CHANDIGARH WHICH CAR RIES YOUR SIGNATURES AS A WITNESS. WHAT DO YOU SAY ABOUT THIS ? ANSWER YES, I HAVE SEEN THIS RECEIPT AND SIGNATURES ON THIS DOCUMENT ARE MINE WHERE I HAVE SIGNED AS A WIT NESS. I AGAIN SIGN THIS DOCUMENT TODAY DATED (I.E. 4.11.2 003) BUT STILL I DONT REMEMBER AS TO WHERE I SIGNED THI S DOCUMENT. I ALSO VERIFY THAT THIS RECEIPT HAS SIGNA TURES OF MY MOTHER SMT. VIJAY CHAUDHARY (ON THE REVENUE STAM P) AND MY BROTHER VIKRANT CHAUDHARY WHO HAS SIGNED AS A WITNESS ALONG WITH ME BUT I STILL DONT REMEMBER AS TO WHEN EXACTLY THESE SIGNATURES WERE PUT BY US. MOST PROBABLY THESE SIGNATURES WERE PUT BY US WHEN WE WE RE LIVING IN H N. 146, SEC 8A, CHANDIGARH. ALL THESE DOCUMENTS WERE SIGNED BY US AFTER THE DEAL TO SALE THIS HOME WAS FINALISED AND WE WERE PLANNING TO SHIFT H NO. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 7 7 162, SEC 2, PANCHKULA WHICH WAS PURCHASED AT THAT T IME BY US. QUESTION NO. 6 WHAT DO YOU HAVE TO SAY ABOUT THE NATURE OF THIS DOCUMENT? ANSWER SINCE THIS DOCUMENT CARRIES MY DOCUMENT MY BROTHER AND MY MOTHER SIGNATURES. IT MUST BE A GENU INE DOCUMENT WHICH IS NOT WITH MEAT THIS POINT OF TIME. I HAVE NEVER KEPT A COY OF THIS RECEIPT. I THINK I WA S PRESENT AT THE TIME OF SIGNING OF THIS RECEIPT AND AT THE TIME OF HANDING OVER OF THE AMOUNT MENTIONED IN THI S RECEIPT DATED 15.9.2000. THE NAMES OF THE BUYERS MENTIONED IN THIS RECEIPT, I.E., SHRI JOGINDER SING H AND SMT. HARJINDER KAUR IS ALSO GENUINE AND REAL. THE A MOUNT OF PAYMENT MENTIONED IN THIS RECEIPT ALONG WITH AMO UNT OF REGISTRY IS THE ACTUAL AMOUNT WHICH WAS RECEIVED BY ALL THREE OF THE (THE OWNERS) ON 15.9.2000. (X) AT THE END OF THE STATEMENT, SHRI PRASHANT DUTT CH AUDHARY HAS CERTIFIED THE CORRECTNESS OF THE STATEMENT RECORDED BY THE ADIT (INV). COPY OF THE STATEMENT OF SHRI PRASHANT DUTT CHAUDHA RY RECORDED BY THE ADIT (INV.) WAS ALSO GIVEN BY THE ADIT (INV.) TO SH RI PRASHANT DUTT CHAUDHARY ON THE SAME DATE ON WHICH HIS STATEMENT W AS RECORDED. (XI) STATEMENT OF SMT. HARJINDER KAUR, ONE OF THE BUYERS OF THE PROPERTY WAS ALSO RECORDED BY THE ADIT(INV.) ON 1.1 2.2003. IN RESPONSE TO Q. NO.1 ASKING HER TO IDENTIFY HERSELF, SHE STAT ED THAT SHE IS A POST- GRADUATE IN PHYSICAL EDUCATION (MPED.). QUESTION NO .3 PUT TO HER AND THE ANSWERS GIVEN BY HER ARE RELEVANT AND READ AS U NDER: Q. 4 - WHAT WAS THE CONSIDERATION PAID FOR H NO. 14 6, SEC. 8A, CHD.? ANS. I DO NOT REMEMBER THE EXACT AMOUNT BECAUSE ALL THESE MATTERS ARE LOOKED AFTER BY MY HUSBAND SH. JOGINDER SINGH. HE ONLY HANDLED THE ACTUAL PAYMENT FOR THIS HOUSE. I W ILL TALK TO HIM AND GIVE THE DETAILS TO YOU. I WILL ALSO GIVE THE C OPY OF REGISTERED SALE DEED FOR H NO.146/8A, CHD. ON 8.12.2003 AT 11 AM. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 8 8 (XII) IT IS STATED IN THE REPORT DATED 11.3.2004 SUBMITT ED BY THE ADIT(INV.) TO THE DIT(INV.) (PLACED IN THE PAPER-BO OK FILED BY THE DEPARTMENT A COPY OF WHICH WAS ALSO GIVEN TO THE LD . AUTHORIZED REPRESENTATIVE FOR THE ASSESSEES ) THAT SHE DID NOT FURNISH THE DETAILS ON 8.12.2003 AS PROMISED BY HER OR EVEN THERE-AFTER. (XIII) IT IS FURTHER STATED IN THE REPORT DATED 11.3.2004 SUBMITTED BY THE ADIT(INV.) TO THE DIT(INV.) THAT SUMMONS DATED 13.11.2003 WAS ALSO ISSUED TO SHRI JOGINDER SINGH CALLING UPON HIM TO FURNISH THE DETAILS AS SPECIFIED IN THE SUMMONS ON 28.11.2003 BUT HE TO O DID NOT FURNISH THOSE DETAILS. (XIV) THE AO HAVING JURISDICTION OVER THE ASSESSEES WAS APPRISED OF THE AFORESAID FACTS BY ADIT (INV). THE AO CONSIDERED TH E MATERIALS AVAILABLE ON RECORD AND FORMED THE BELIEF THAT THE INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT AND CONSEQUENTLY ISSUED A NOTICE U/S 147/148 AFTER RECORDING THE REASONS WHICH HAVE BEEN REPRODUCED IN PARA 2 OF THE APPELLATE ORDER PASSED BY THE LD. CIT(A). THE REASO NS SO RECORDED BY THE AO AND REPRODUCED BY THE CIT(A) IN HIS APPELLAT E ORDER READ AS UNDER: ON THE BASIS OF THE STATEMENT RECORDED BY ADIT (IN V.) OF SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY, THEY H AVE CONFIRMED THE RECEIPT OF RS. 93.00 LAKHS FOR THE SA LE OF PROPERTY BEARING NO. 146, SECTOR 8A, CHANDIGARH. IN FACT SMT . VIJAY CHAUDHARY WIFE OF SHRI VIRAT DUTT CHAUDHARY, SHRI V IKRANT CHAUDHARY SONS OF SHRI VIRAT DUTT CHAUDHARY HAVE SO LD HOUSE NO. 146 SECTION 8A, CHANDIGARH HAVING EQUAL SHARE. THRE E SALE DEEDS HAVE BEEN EXECUTED FOR RS. 39.00 LAKHS ONLY. EVEN T HE RECEIPT OF HIGHER AMOUNTS WAS ADMITTED BY SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY IN THEIR STATEMENT BEFORE THE AD IT (INV.) CHANDIGARH. THE ASSESSEE SHRI VIKRANT CHAUDHARY HAS CONCEALED PARTICULARS OF HIS INCOME WHICH WAS CHARGEABLE TAX AMOUNTING TO RS. 31.00 LAKHS BY OMISSION AND THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION U/S 139 AND TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AM OUNT FOR THE SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 9 9 ASSESSMENT YEAR 2001-02 AS THE SALE DEEDS WERE REGI STERED ON 18.10.2000 AND 19.10.2000. THE RECEIPT IS DATED 15. 9.2000; THE INCOME TO THE EXTENT OF RS. 31.00 LAKHS HAS ESCAPED ASSESSMENT, AS THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME IN THIS CASE. THE NOTICE U/S 148 HAD BEEN ISSUED WITH THE PRIOR A PPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, PANCHKULA RA NGE, PANCHKULA VIDE LETTER DATED 14/18/07/06. (XV) IT IS STATED IN THE ASSESSMENT ORDER AS WELL AS IN THE APPELLATE ORDER PASSED BY THE LD. CIT(A) AND CONFIRMED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US THAT A COPY OF THE REASONS SO RECORDED BY THE AO WAS SUPPLIED TO THE ASSESSEES ON 5.10.2007. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSES SEES CHALLENGED THE INITIATION OF PROCEEDINGS ON SEVERAL GROUNDS. THEY WERE CONSIDERED AND, AFTER CONSIDERATION, REJECTED BY TH E AO. AFTER TAKING INTO ACCOUNT ALL THE MATERIALS ON RECORD INCLUDING THE M ARKET VALUE OF LAND IN THE AREA, THE AO TOOK THE SALE VALUE OF THE PROPERT Y AT RS. 93.00 LAKHS AND ACCORDINGLY ASSESSED 1/3 RD OF THE SAME U/S 45 OF INCOME-TAX ACT IN THE INDIVIDUAL HANDS OF ALL THE THREE ASSESSEES BEF ORE US. DECISION OF THE FIRST APPELLATE AUTHORITY, I.E., CI T(A) 4. AGGRIEVED BY THE ORDER PASSED BY THE AO, THE ASSES SEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THERE WERE TWO MAIN ISSUES RAISED BEFORE THE LD. CIT(A). WHILE THE FIRST ISSUE RELATE D TO THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 147/148, THE SECOND ISSUE RELATED T O THE CORRECTNESS OF THE ADDITION MADE BY THE AO ON THE BASIS OF THE RECEIPT EVIDENCING RECEIPT OF RS. 55.00 LAKHS BY THEM. ALL THE AFORESAID ASPECTS WERE DULY CONSIDERED BY THE LD. CIT(A). HE HOWEVER DISMISSED ALL OF THEM. 5. THE PLEA OF THE ASSESSEE WITH REGARD TO THE VALIDI TY OF INITIATION OF PROCEEDINGS U/S 147/148 HAS BEEN REJECTED BY THE CI T(A) WITH THE FOLLOWING OBSERVATIONS: I HAVE CAREFULLY CONSIDERED ARGUMENTS OF THE COUNS EL FOR THE APPELLANT AND THE OBSERVATIONS OF THE AO IN THE ASSESSMENT OR DER. THE AO HAS DULY RECORDED THE REASONS FOR REOPENING THE ASSESSM ENT WHICH HAVE BEEN CLEARLY MENTIONED IN THE ASSESSMENT ORDER. THE ASSESSMENT HAS SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 10 10 BEEN REOPENED ON THE BASIS OF THE RECEIPT SHOWING C ASH PAYMENT OF RS. 55.00 LAKHS AND STATEMENTS OF SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY WHO CONFIRMED HAVING RECEIVED RS. 93.00 L AKHS FOR SALE OF H NO.146 SECTOR 8A, CHANDIGARH AS AGAINST THE DECLARE D SALE CONSIDERATION OF RS.39.00 LAKHS. THE RECEIPT OF RS.55.00 LAKHS WA S ADMITTED BY SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY IN THEI R STATEMENTS RECORDED BY THE DDIT (INV.) CHANDIGARH. THE ASSESSM ENT HAS BEEN VALIDLY REOPENED ON THE BASIS OF THE RECEIPT OF RS. 55.00 LAKHS IN CASH AND THE STATEMENTS OF SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY. THERE IS NO MERIT IN THE ARGUMENTS OF TH E COUNSEL FOR THE APPELLANT THAT THE HOUSE WAS SOLD FOR RS.39.00 LAKH S ONLY AND THE CASE HAS BEEN REOPENED ON THE BASIS OF FORGED PHOTOCOPY/ SCANNED RECEIPT. THERE IS ALSO NO MERIT IN THE ARGUMENT OF THE COUNS EL THAT THE STATEMENT OF SMT. VIJAY CHAUDHARY WAS RECORDED FORCIBLY. THE ASSESSMENT HAS BEEN VALIDLY REOPENED BASED ON MATERIAL AVAILABLE W ITH THE AO AFTER HAVING REASON TO BELIEVE. THE SECOND GROUND OF APPE AL IS THEREFORE DISMISSED. 6. IT WAS ALSO CONTENDED BEFORE THE CIT(A) THAT THE A SSESSMENT ORDER PASSED BY THE AO WAS VITIATED AS THE AO HAS NOT DIS POSED OFF THE OBJECTIONS FILED BY THE ASSESSEES AGAINST THE INITIATION OF PR OCEEDINGS U/S 147/148, BEFORE PASSING THE ASSESSMENT ORDERS. THE LD. CIT(A) HAS R EJECTED THE AFORESAID SUBMISSIONS WITH THE FOLLOWING OBSERVATIONS: I HAVE CAREFULLY CONSIDERED ARGUMENTS OF THE COUNS EL FOR THE APPELLANT AND THE OBSERVATIONS OF THE AO IN THE ASSESSMENT OR DER. THERE IS NO MERIT IN THE ARGUMENTS OF THE COUNSEL. THE AO HAS P ASSED A SPEAKING ORDER IN RESPONSE TO ASSESSEES SUBMISSION FOR CHAL LENGING THE REASON TO BELIEVE MENTIONING THE REASONS FOR REOPENING THE A SSESSMENT. THE ARGUMENT OF THE COUNSEL IS REJECTED. THE DECISION O F THE HON'BLE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD V. ITO & OTHERS, 259 ITR 19 IS NOT APPLICABLE IN THE PRESENT CASE. THIS GROU ND OF APPEAL IS REJECTED. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 11 11 7. THE PLEA OF THE ASSESSEE WITH REGARD TO CORRECTNES S OF THE ADDITION MADE BY THE AO ON THE BASIS OF RECEIPT AND OTHER MA TERIALS ON RECORD HAS ALSO BEEN REJECTED BY THE LD. CIT(A) WITH THE FOLLOWING OBSERVATIONS: I HAVE CAREFULLY CONSIDERED ARGUMENTS OF THE COUNS EL FOR THE APPELLANT AND THE OBSERVATIONS OF THE AO IN THE ASSESSMENT OR DER. THE AO HAS MADE THE ADDITION OF RS.18.00 LAKHS ON THE GROUND T HAT THE PROPERTY H NO. 146, SECTION 8A, CHANDIGARH WAS SOLD FOR A CONS IDERATION OF RS.93.00 LAKHS. THE APPELLANT WAS HAVING 1/3 RD SHARE IN THE PROPERTY AND HENCE HE RECEIVED RS.31.00 LAKHS ON THE SALE OF THE HOUSE AS HIS SHARE WHEREAS THREE SALE DEEDS HAVE BEEN EXECUTED F OR RS.13.00 LAKHS EACH SHOWING THE SALE CONSIDERATION OF THE WHOLE HO USE AS RS.39.00 LAKHS. THE DIFFERENCE IN THE SALE CONSIDERATION SHO WN AND THE ACTUAL SALE CONSIDERATION IN THE HANDS OF THE APPELLANT IS RS. 18.00 LAKHS WHICH HAVE BEEN TREATED AS UNACCOUNTED INCOME OF THE APPELLANT AND THE ADDITION OF THE SAME HAS BEEN MADE. THE AO HAS MENTIONED THA T THE ADIT (INV.) WAS IN POSSESSION OF A RECEIPT DATED 15.9.2000 WHIC H HAS BEEN SIGNED BY THE APPELLANTS MOTHER AND WITNESSED BY THE APPE LLANT AND HIS BOTHER SHRI PRASHANT CHAUDHARY. THE RECEIPT MENTIONS THE A CTUAL SALE CONSIDERATION OF RS.93.00 LAKHS SMT. VIJAY CHAUDHAR Y AND SHRI PRASHANT CHAUDHARY ADMITTED THE SALE CONSIDERATION OF RS.93. 00 LAKHS IN THEIR STATEMENTS RECORDED ON OATH. MOREOVER, THEY ALSO ID ENTIFIED THEIR SIGNATURES ON THE RECEIPT AND ACCEPTED THE RECEIPT AS CORRECT. ON THE BASIS OF THIS CONCLUSIVE EVIDENCE IN THE SHAPE OF A RECEIPT SHOWING TOTAL SALE CONSIDERATION OF RS. 93.00 LAKHS AND CASH PAYM ENT OF RS.55.00 LAKHS WHICH HAS BEEN DULY CONFIRMED BY SMT. VIJAY C HAUDHARY AND SHRI PRASHANT CHAUDHARY THE AO HAS MADE ADDITION OF RS. 18.00 LAKHS. THE COUNSEL FOR THE APPELLANT HAS TAKEN A NUMBER O F ARGUMENTS. HOWEVER ALL THE ARGUMENTS FLOW FROM TWO MAIN ARGUME NTS WHICH ARE THAT THE RECEIPT SHOWING TOTAL CONSIDERATION OF RS. 93.00 LAKHS AND CASH PAYMENT OF RS. 55.00 LAKHS IS A FORGED PIECE OF PAP ER HAVING NO EVIDENTIARY VALUE AND THAT THE STATEMENTS OF SMT. V IJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY WERE FORCIBLY RECORDED BY T HE ADIT (INV.) ON 4.11.2003. THERE IS NO FORCE IN THE ARGUMENTS OF TH E COUNSEL FOR THE APPELLANT THAT THE RECEIPT IS A FORGED PHOTOCOPY AN D THAT THE STATEMENTS SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 12 12 OF SMT. VIJAY CHAUDHARY AND SHRI PRSHANT CHAUDHARY WERE RECORDED BY THE ADIT (INV.) ON 4.11.2003 FORCIBLY. THE STATEMEN TS WERE RECORDED BY THE ADIT (INV.) ON OATH AND WITHOUT ANY PRESSURE OR UNDUE INFLUENCE. THE STATEMENT WAS GIVEN VOLUNTARILY BY TWO PERSONS. THE SUBSEQUENT RETRACTION FROM THE STATEMENTS BY THE TWO PERSONS I S AN AFTERTHOUGHT TO WRIGGLE OUT OF THE SITUATION. HAVING CONFIRMED THE SALE CONSIDERATION OF RS. 93.00 LAKHS FOR THE HOUSE AND RECEIPT OF RS. 55 .00 LAKHS IN CASH THE APPELLANT CANNOT SUBSEQUENTLY CHANGE THE STAND THAT THE PROPERTY WAS SOLD FOR RS. 39.00 LAKHS. SINCE THE CONTENTS OF THE RECEIPT AND THE SIGNATURES ON THE SAME HAVE BEEN CONFIRMED BY SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY IN THEIR STATEMENTS, TH E GENUINENESS OF THE RECEIPT IS CONFIRMED BY THEM. THE RECEIPT CANNOT BE CALLED A FORGED PIECE OF PAPER. IT IS IMMATERIAL WHETHER THE RECEIP T IS ORIGINAL OR A PHOTOCOPY OF THE RECEIPT ONCE THE CORRECTNESS OF TH E SAME IS CONFIRMED. THE STATEMENTS OF THE BUYERS THAT THE PROPERTY WAS PURCHASED BY THEM FOR RS. 39.00 LAKHS CANNOT BE RELIED UPON SINCE THE Y ARE INTERESTED PARTY. IN CASE THEY ADMIT THE ACTUAL CONSIDERATION THEY WILL BE GUILTY OF UNACCOUNTED INVESTMENT IN THE HOUSE PROPERTY. THE A RGUMENT OF THE COUNSEL FOR THE APPELLANT ARE REJECTED. THE ADDITIO N OF RS. 18.00 LAKHS MADE BY THE AO IS UPHELD. THIS GROUND OF APPEAL IS REJECTED. SUBMISSIONS ON BEHALF OF THE APPELLANTS 8. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), A LL THE THREE ASSESSEES ARE NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF THEIR APPEALS, THE LD. AUTHORIZED REPRESENTATIVE FOR THEM HAS FILED IDENTI CAL WRITTEN SUBMISSIONS BEFORE US IN ALL THE APPEALS IN WHICH THE SUBMISSIO NS EARLIER MADE BEFORE THE CIT(A) HAVE BROADLY BEEN REITERATED. HIS SUBMISSION S, IN BRIEF, ARE AS UNDER: (I) THE RECEIPT ON THE BASIS OF WHICH THE AO ISSUED NO TICE U/S 147/148 WAS FORGED AND FAKE FOR SEVERAL REASONS. ONE , THE RECEIPT IN THE POSSESSION OF THE DEPARTMENT WAS A MERE PHOTOCO PY OR SCANNED COPY AND, THEREFORE, THE AO WAS NOT JUSTIFIED IN AC TING UPON THE SAME WITHOUT HAVING ORIGINAL RECEIPT THEREOF ON RECORD. TWO , NEITHER THE COMPLAINANT FROM WHOM THE SAID RECEIPT WAS OBTAINED WAS IDENTIFIED NOR HIS AFFIDAVIT PLACED ON RECORD IN CONFIRMATION OF T HE CORRECTNESS OF THE SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 13 13 PHOTOCOPY OF THE RECEIPT. THREE , THE SIGNATURES OF SMT. VIJAY DUTT CHAUDHARY AND PRASHANT DUTT CHAUDHARY AS AVAILABLE ON THEIR STATEMENTS RECORDED BY THE AO ON 4.11.2003 WERE DIF FERENT FROM THEIR SIGNATURES AS AVAILABLE ON THE SAID RECEIPT. FOUR , TOTAL CONSIDERATION AS PER FAKE RECEIPT WORKS OUT TO RS.93 LAKHS (RS. 55 + 38 LAKHS) AS AGAINST WHICH THE ACTUAL CONSIDERATION RECEIVED WAS ONLY RS .39 LAKHS AND THAT TOO AT THE TIME OF REGISTRATION. FIVE , IT IS MENTIONED IN THE RECEIPT THAT A SUM OF RS.38 LAKHS WOULD BE PAID AT THE TIME OF REG ISTRY WHEREAS THE AMOUNT THAT WAS ACTUALLY PAID AT THE TIME OF REGIST RATION WAS RS.39 LAKHS AND NOT RS.38 LAKHS. SIX, THE FAKE RECEIPT WAS FORCIBLY GOT ATTESTED BY SMT. VIJAY DUTT CHAUDHARY AND SHRI PRASHANT DUTT CHAUDHARY BY THE ADIT(INV.) ON 4.11.2003. SEVEN, STATEMENTS OF SMT. VIJAY DUTT CHAUDHARY AND PRASHANT DUTT CHAUDHARY WERE FORCIBLY RECORDED BY THE ADIT (INV.) ON 4.11.2003 AT THE RESIDENCE OF SMT. V IJAY DUTT CHAUDHARY. EIGHT, THE STATEMENTS OF SMT.VIJAY DUTT CHAUDHARY A ND SHRI PRASHANT DUTT CHAUDHARY RECORDED BY THE AO ARE NOT WITNESSED BY ANY THIRD PARTY. (II) RELYING UPON THE STATEMENTS OF BUYERS, NAMELY, SHR I JOGINDER SINGH AND SMT. HARJINDER KAUR AS RECORDED BY THE AD IT(INV.)/AO, IT WAS SUBMITTED THAT THE SAID BUYERS IN THEIR RESPECTIVE STATEMENTS HAVE DULY CONFIRMED TO HAVE PAID ONLY RS.39 LAKHS AND THAT TO O AT THE TIME OF REGISTRATION AND HENCE THERE WAS NO ELEMENT OF TRUT H IN THE ALLEGATION THAT A SUM OF RS.55 LAKHS WAS PAID OVER AND ABOVE T HE AMOUNT PAID AT THE TIME OF REGISTRATION. (III) THE STATEMENTS AS GIVEN BY SMT.VIJAY DUTT CHAUDHAR Y AND SHRI PRASHANT DUTT CHAUDHARY WERE SUBSEQUENTLY RETRACTED BY THEM BY THEIR LETTERS DATED 1.12.2003 ADDRESSED TO THE ADIT(INV.) . (IV) THE MARKET VALUE OF THE PROPERTY TAKEN BY THE AO A T RS.93 LAKHS FOR THE PURPOSE OF WORKING OUT THE SALE CONSIDERATI ON WAS MISPLACED FOR THE REASON THAT THE AO HIMSELF HAS NOT APPLIED THE SAME PRINCIPLE FOR DETERMINING THE PRICE PAID BY THE BUYERS IN THEIR I NDIVIDUAL HANDS. 9. AT THIS STAGE, IT MAY BE RELEVANT TO REPRODUCE THE LETTER DATED 1.12.2003 WRITTEN BY SMT. VIJAY DUTT CHAUDHARY TO THE ADIT (I NV.) BY WHICH SHE IS SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 14 14 REPORTED TO HAVE RETRACTED HER STATEMENT AS GIVEN B EFORE THE ADIT (INV.) ON 4.11.2003. A COPY OF THE SAID LETTER HAS BEEN FILED BEFORE US. IT READS AS UNDER: WITH RESPECT TO MY STATEMENT RECORDED BY YOU ON 4. 11.2003 AT MY RESIDENCE AND IN RELATION TO THE RECEIPT OF RS. 55, 00,000/- PURPORTEDLY SIGNED BY ME AND BY MY MOTHER AND BROTHER, I HEREBY SUBMITS AS FOLLOWS: I HAD NOT RECEIVED RS. 55,00,000/- OR ANY AMOUNT AS MENTIONED IN THAT RECEIPT IN CASH FROM MR. JOGINDER SINGH & MRS. HARJ INDER KAUR ON 15.9.2000. I OR MY SONS PARSHANT & VIKRANT HAVE NEVER SIGNED A NY SUCH RECEIPT/DOCUMENT. THE SAID DOCUMENT IS A FORGED AND FRIVOULENT DOCUMENT AND SIGNATURES ON SUCH RECEIPT ARE EITHER FORGED OR SCANNED FROM SOME OTHER DOCUMENTS ETC. AND CREATED JUST TO HARASS ME AND MY FAMILY MEMBERS. AS PER THAT RECEIPT THE TOTAL CONSIDERATION OF SALE OF THE H. NO. 146, SECTOR 8, CHANDIGARH IS RS. 83,00,000/-. RS. 55,00, 000/- WERE RECEIVED ON 15.9.2009 AND RS. 38,00,000/- SHALL BE PAID AT T HE TIME OF REGISTRY. WHEREAS I WOULD LIKE TO POINT OUT THAT RS. 9,90,000 /- WAS RECEIVED THROUGH ACCOUNTS PAYEES CHEQUES IN JUNE, 2000/- AS PART PAYMENT AND ONLY RS. 28,10,000/- WERE PENDING TO BE RECEIVED ON 15.9.2000 AND THAT WAS RECEIVED IN OCTOBER, 2000. THIS SHOWS THAT THE SAID RECEIPT IS JUST A FALSE DOCUMENT CREATED WITHOUT FULL KNOWLEDGE OF FA CTS. PHOTOCOPY OF SUCH RECEIPT DOES NOT DEFINE THE STATU S OF MRS. VIJAY CHAUDHARY, MR. VIKRANT CHAUDHARY & MR. PARSHANT CHA UDHARY. IT SHOWS THAT ONLY MRS. VIJAY CHAUDHARY HAS TAKEN THE WHOLE PAYMENT AS SELLER AND MR. PARSHANT & VIKRAM CHAUDHARY ARE JUST WITNES SES. IT NOWHERE SHOWS THEM AS CO-OWNERS. SIR, HOW IS THIS POSSIBLE THAT THE PROPOSED BUYER WOULD MAKE SUCH A HEAVY PAYMENT WITHOUT TAKIN G THE CONSENT OF 2 OTHER CO-OWNERS? THIS DOES NOT SHOW THAT OTHER CO -OWNERS HAVE TAKEN ANY AMOUNT. THIS FURTHER CEMENTS THE FACTS THAT THI S VERY RECEIPT IS JUST A FIGMENT OF IMAGINATION AND JUST CREATED TO HARASS US AND WASTER THE PRECIOUS TIME OF INCOME TAX DEPARTMENT. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 15 15 THE RECEIPT IS INCOMPLETE AND IMAGINARY IS FURTHER CONFIRMED BY THE FACT THAT PROPOSED BUYERS AND SELLERS HAVE NOT IDENTIFIE D FULLY AS TO THEIR FATHERS NAME AND ADDRESS. THERE IS ALSO NO REFEREN CE TO ANY AGREEMENT TO SELL MADE FOR THAT PURPOSE. THIS PROVES THAT THE FACT THIS JUST A CRUDE RECEIPT CREATED BY SOME CHILDISH BRAIN AND EVEN THE SPELLING OF WORD RECEIPT ARE SHOWN AS RECEIPT IN THAT. I REQUEST THAT ORIGINAL DOCUMENT SHOULD BE SHOWN TO ME FOR MY VERIFICATION AND SIGNATURE VERIFICATION FROM FORENS IC LABORATORY SHOULD PLEASE BE CARRIED OUT TO CONFIRM THAT SIGNATURES ON THAT RECEIPT ARE A FORGED ONE. AGEING OF HANDWRITING, AGEING OF PAPER USED FOR SUCH RECEIPT & AGEING OF REVENUE STAMP AFFIXED ON THIS S HOULD ALSO BE DONE TO CONFIRM THAT THE DOCUMENT WAS SIGNED ON 15.9.200 0. I REQUEST YOU TO FULLY INVESTIGATE THE MATTER. MATT ER MAY FURTHER INVESTIGATED AS TO WHO HAD SENT THE WRONG COMPLAINT TO WASTER THE PRECIOUS TIME OF IT DEPARTMENT AND MISLEAD THE SENI OR OFFICERS. PROPER ACTION MAY PLEASE BE TAKEN AGAINST THE SENDER OF TH E RECEIPT SO THAT NO ONE SHOULD DARE TO MISLEAD THE IT DEPARTMENT. I FURTHER CONFIRM THAT THIS STATEMENT TAKEN FROM ME ON 4.11.2003 AT MY RESIDENCE WAS TAKEN FORCIBLY AND UN DER COERCION AND I TOTALLY DISOWN MY STATEMENT GIVEN ON 4.11.2003 . I FURTHER WANT TO ASK AS FOR WHAT REASONS SUMMONS W ERE ISSUED TO ME FOR 10.11.2003 WHEN NO STATEMENT OF MINE WAS SUPPOS ED TO BE TAKEN. WAS IT WERE JUST TO MARK MY ATTENDANCE IN THE IT OF FICE. 10 . THE SUBMISSIONS MADE BY THE LD. AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEES, IN BRIEF, ARE: (I) THE RECEIPT ON THE BASIS OF WHICH PROCEEDINGS U/S 147/148 HAVE BEEN INITIATED BY THE AO IS FORGED AND FAKE AND THEREFORE CAN NOT FORM THE BASIS FOR FORMATION OF BELIEF AS CONTE MPLATED BY SECTION 147; (II) STATEMENTS OF SMT. VIJAY DUTT CHAUDHARY AND PRASHAN T DUTT CHAUDHARY WERE FORCIBLY RECORDED BY THE ADIT (INV.) ON 4.11.2003 W HICH WERE SUBSEQUENTLY RETRACTED BY THEM AND THEREFORE IT WAS NOT OPEN TO THE AO TO ACT UPON RETRACTED STATEMENTS FOR FORMING THE BELIEF AS CONT EMPLATED BY SECTION 147 AND FOR MAKING THE IMPUGNED ADDITIONS; AND (III) THE SALE CONSIDERATION TAKEN BY THE AO AT RS.93 LAKHS IS INCORRECT AS THERE IS NO E VIDENCE ON RECORD TO SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 16 16 SUBSTANTIATE THAT THE ASSESSEES HAVE ACTUALLY RECEI VED RS.93 LAKHS AS SALE CONSIDERATION. 11. BASED ON THE AFORESAID SUBMISSIONS, THE LD. AUTHOR IZED REPRESENTATIVE CONTENDED THAT THE PROCEEDINGS INITIATED BY THE AO U/S 147/148 WERE BAD IN LAW AND THEREFORE ALL THE PROCEEDINGS TAKEN IN PURS UANCE THEREOF INCLUDING THE ASSESSMENT ORDERS PASSED BY THE AO SHOULD BE QUASHE D. HE FURTHER CONTENDED THAT THE SALE CONSIDERATION RECEIVED WAS ONLY RS.39 LAKHS AND NOTHING ELSE AND HENCE THE AO WAS NOT JUSTIFIED IN TAKING THE SAME A T RS. 93 LAKHS. 12. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEES HAS RELIED UPON THE FOLLOWING AUTHORITIES : (I) SHEO NATH SINGH V. AAC, 82 ITR 147 (SC) FOR THE PR OPOSITION THAT THE WORDS REASON TO BELIEVE SUGGEST THAT THE BELI EF MUST BE OF AN HONEST AND REASONABLE PERSON BASED UPON REASONABLE GROUNDS AND THAT THE ITO MAY ACT ON DIRECT OR CIRCUMSTANTIAL EVIDENC E BUT NOT ON MERE SUSPICION, GOSSIP OR RUMOUR. (II) CIT V. DAULAT RAM RAWATMULL, 87 ITR 349 (SC) FOR TH E PROPOSITION THAT THE USE OF EXTRANEOUS AND IRRELEVA NT MATERIAL IN ARRIVING AT A CONCLUSION WOULD VITIATE THE CONCLUSION OF FAC T BECAUSE IT IS DIFFICULT TO PREDICATE AS TO WHAT EXTENT THE EXTRANEOUS AND I RRELEVANT MATERIAL HAS INFLUENCED THE AUTHORITY IN ARRIVING AT THE CON CLUSION OF FACT. (III) ITO V. LAKHMANI MEWAL DAS, 103 ITR 437 (SC) FOR THE PROPOSITION THAT THE POWERS OF THE ITO TO REOPEN ASSESSMENT, TH OUGH WIDE, ARE NOT PLENARY AND THAT THE WORDS OF THE STATUTE ARE REAS ON TO BELIEVE AND NOT REASON TO SUSPECT. (IV) CANARA SALES CORPORATION V. CIT, 176 ITR 340 (KAR.) FOR THE PROPOSITION THAT FAILURE TO DISCLOSE FULLY AND TRUL Y MATERIAL FACTS NECESSARY FOR ASSESSMENT ARISES ONLY WHEN ASSESSEE HAS KNOWLEDGE OF THE FACTS. SUBMISSIONS ON BEHALF OF THE RESPONDENT 13. IN REPLY, THE LD. DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE ORDERS PASSED BY THE ASSESSING OFFICER/CIT(A) AND THE MATE RIALS BROUGHT ON RECORD BY THEM. HE ALSO FILED A PAPER-BOOK CONTAINING COPIES, INTER-ALIA, OF THE (I) SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 17 17 STATEMENTS OF SMT. VIJAY DUTT CHOUDARY, SHRI PRASHA NT CHAUDHARY AND SMT. HARJINDER KAUR AND (II) REPORT OF THE ADIT (INV.) A S SUBMITTED BY HIM TO THE DIRECTOR OF INCOME-TAX (INV.) ON THE OUTCOME OF THE INQUIRIES MADE BY HIM ON THE TAX EVASION PETITION RECEIVED AGAINST THE ASSES SEES. HE SUBMITTED THAT THE AUTHENTICITY OF THE RECEIPT DATED 15.9.2000 EVIDENC ING RECEIPT OF RS. 55.00 LAKHS BY THE ASSESSEES WAS DULY VERIFIED BY SMT. VI JAY DUTT CHAUDHARY AS WELL AS HER SON SHRI PRASHANT DUTT CHAUDHARY IN THE COUR SE OF THEIR STATEMENTS RECORDED ON OATH BY THE ADIT (INV.) ON 4.11.2003. H E SUBMITTED THAT THE RECEIPT DATED 15.9.2000 EVIDENCING THE RECEIPT OF R S. 55.00 LAKHS WAS NOT ONLY SHOWN TO THEM BUT A COPY THEREOF WAS ALSO GIVEN TO THEM BY THE ADIT(INV.) TO ENABLE THEM TO REBUT THE SAME IF THEY WERE FORGED. ACCORDINGLY TO HIM, BOTH SMT. VIJAY DUTT CHAUDHARY AND SHRI PRASHANT DUTT CH AUDHARY PERUSED THE SAID RECEIPT AND IT WAS ONLY AFTER THEY HAD SATISFIED TH EMSELVES THAT THEY CONFIRMED THE AUTHENTICITY AND GENUINENESS OF THEIR SIGNATURE S ON THE SAID RECEIPT. HE SUBMITTED THAT THE REPORT RECEIVED FROM THE ADIT (I NV.) WAS DULY CONSIDERED BY THE AO AND IT WAS ONLY THEN THAT THE AO PROCEEDE D TO RECORD THE REASONS AS REQUIRED U/S 148 AND THERE-AFTER ISSUED A NOTICE U/ S 147/148 TO ALL THE ASSESSEES. HE SUBMITTED THAT THE REPORT RECEIVED BY THE AO FROM THE ADIT (INV.) TOGETHER WITH COPIES OF THE RECEIPT DATED 15 .9.2000 AND THE STATEMENTS OF SMT. VIJAY CHAUDHARY AND SHRI PRASHANT CHAUDHARY CONSTITUTED RELEVANT MATERIAL IN THE POSSESSION OF THE AO ON THE BASIS O F WHICH THE AO COULD FORM THE REQUISITE BELIEF AND, IN FACT, FORMED THE BELIE F THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT AND ACCORDINGLY I SSUED NOTICES U/S 147/148. HE CONTENDED THAT THE ONLY QUESTION AT THE STAGE OF ISSUE OF NOTICE U/S 147/148 WAS WHETHER THERE WAS RELEVANT MATERIAL IN THE POSSESSION OF THE AO ON WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF. ACCORDING TO HIM, THE AFORESAID MATERIALS IN THE POSSESSION O F THE AO WERE RELEVANT AND THEREFORE THE AO WAS JUSTIFIED IN FORMING THE REQUI SITE BELIEF CONTEMPLATED BY SECTION 147 ON THAT BASIS. HE FURTHER CONTENDED THA T SUCH MATERIALS AS AVAILABLE WITH THE AO AT THE STAGE OF INITIATION OF PROCEEDINGS U/S 147/148 NEED NOT CONCLUSIVELY ESTABLISH THE ESCAPEMENT OF I NCOME. HE SUBMITTED THAT ALL THE REQUISITE CONDITIONS LAID DOWN BY THE MAIN PROVISIONS OF SECTION 147 ARE FULLY SATISFIED AND THEREFORE THE LD. CIT(A) WAS JU STIFIED IN UPHOLDING THE VALIDITY OF NOTICE ISSUED BY THE AO U/S 147/148. SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 18 18 14 . AS REGARDS THE PLEA OF THE ASSESSEES THAT THE NOT ICE DATED 15.9.2000 WAS FORGED, THE LD. DR SUBMITTED THAT THE GENUINENE SS AND THE AUTHENTICITY OF THE RECEIPT WERE DULY AUTHENTICATED NOT ONLY BY SMT . VIJAY CHAUDHARY BUT ALSO BY HER SON SHRI PRASHANT CHAUDHARY IN THE COURSE OF THEIR STATEMENTS RECORDED SEPARATELY ON OATH. THEREFORE, IT CANNOT BE SAID TH AT THE AFORESAID RECEIPT WAS FAKE AND BOGUS. 15. AS REGARDS THE ALLEGATION THAT THE PHOTOCOPY OF TH E RECEIPT COULD NOT FORM THE BASIS FOR INITIATING THE PROCEEDINGS U/S 1 47/148 IN THE ABSENCE OF ORIGINAL RECEIPT, THE LD. DR SUBMITTED THAT THE ORI GINAL RECEIPT WOULD ALWAYS BE IN THE POSSESSION OF THE PERSON WHO HAD PAID THE AM OUNT AND THEREFORE ORIGINAL RECEIPT BY ITS VERY NATURE COULD NOT BE IN THE POSSESSION OF THE DEPARTMENT. HE FURTHER CONTENDED THAT WHEREABOUTS O F THE ORIGINAL RECEIPT WERE KNOWN ONLY TO THE PARTIES TO THE TRANSACTION A S THEY WERE WITHIN THEIR SPECIAL AND EXCLUSIVE KNOWLEDGE. HE SUBMITTED THAT THE DEPARTMENT HOWEVER DID NOT ACT SOLELY UPON THE PHOTOCOPY OF THE RECEIP T ALONE BUT ON THE BASIS OF THE STATEMENTS OF SMT. VIJAY CHAUDHARY AND SHRI PRA SHANT CHAUDHARY IN WHICH THEY CONFIRMED AND CORROBORATED THE AUTHENTICITY AN D THE VERACITY OF THE SAID RECEIPT AS ALSO OF THEIR SIGNATURES ON IT. 16 . AS REGARDS THE ALLEGATION OF THE ASSESSEES THAT T HEY HAVE SUBSEQUENTLY RETRACTED THEIR STATEMENTS, VIDE THEIR LETTERS DATE D 1.12.2003 ADDRESSED TO THE ADIT(INV.-I), PANCHKULA, THE SUBMISSIONS MADE BY TH E LD. DR ARE THREE-FOLD. ONE, THE TIME OF RETRACTION WAS QUITE RELEVANT. THE FAC T THAT THE SAID LETTER WAS SUBMITTED BY THE ASSESSEES TO THE ADIT (INV.) A LMOST AFTER A MONTH SINCE THEIR STATEMENTS WERE RECORDED BY THE ADIT (INV.) O N 4.11.2003 AND HENCE IT WAS A CLEAR CASE OF AFTER-THOUGHT SO AS TO WRIGGLE OUT OF THE SITUATION IN WHICH THE ASSESSEES WERE PLACED AS A RESULT OF THEIR OWN STATEMENTS. TWO , THOUGH IT HAS BEEN ALLEGED THAT STATEMENTS WERE FORCIBLY RECO RDED BY THE ADIT (INV.) YET THE NATURE OF FORCE THAT WAS APPLIED HAS NOT BEEN S PELT OUT. ACCORDING TO HIM, MATERIALS AVAILABLE ON RECORD TO NOT SUPPORT THE AL LEGATION OF THE ASSESSEES IN THIS BEHALF. THREE AND WITHOUT PREJUDICE TO THE AFORESAID TWO SUBMISS IONS, HE SUBMITTED THAT MERE PERUSAL OF THE SAID LETTER DATE D 4.11.2003 WOULD SHOW THAT THE ASSESSEES HAVE NOT STATED ANYWHERE IN THE SAID LETTER THAT THE SIGNATURES APPEARING ON THE RECEIPT WERE NOT THEIR OWN. ACCORDING TO HIM, THE SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 19 19 ONLY SUBMISSION MADE BY THE ASSESSEES IN THE SAID L ETTER IS THAT THEY HAVE NOT SIGNED ON THE SAID RECEIPT. 17 . AS REGARDS THE CORRECTNESS OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER, THE LD. DR SUBMITTED THAT THE ASSESSMENT I S BASED ON THE RELEVANT MATERIALS WHICH HAVE NEVER BEEN REBUTTED WITH ANY R ELIABLE EVIDENCE BY THE ASSESSEES IN SPITE OF THE OPPORTUNITIES GIVEN TO TH EM AND THEREFORE THE SAME, IN THE ABSENCE OF REBUTTAL, WAS RIGHTLY CONFIRMED B Y THE LD. CIT(A). ANALYSIS OF FACTS AND DECISION 18. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSI DERED THEIR SUBMISSIONS INCLUDING THE AUTHORITIES REFERRED TO B Y THEM. THE FIRST ISSUE THAT NEEDS ADJUDICATION IS WHETHER THE INITIATION OF PRO CEEDINGS U/S 147/148 BY THE AO IS VALID IN LAW. IT IS NOT DISPUTED THAT A COPY OF THE RECEIPT DATED 15.9.2000 EVIDENCING THE RECEIPT OF RS. 55.00 LAKHS FROM SHRI JOGINDER SINGH AND SMT. HARJINDER KAUR WAS IN THE POSSESSION OF THE DEPARTM ENT WHEN THE PROCEEDINGS WERE INITIATED U/S 147/148. IT IS ALSO NOT IN DISPU TE THAT THE COPY OF THE SAID RECEIPT SHOWS, IN UNAMBIGUOUS TERMS, RECEIPT OF RS. 55.00 LAKHS FROM SHRI JOGINDER SINGH AND SMT. HARJINDER KAUR AS PART PAYM ENT ON SALE OF HOUSE NO. 146, SECTOR 8A, CHANDIGARH IN ADDITION TO RS.33 LAK HS TO BE PAID SUBSEQUENTLY. THERE IS NO DISPUTE THAT THE COPY OF THE AFORESAID RECEIPT CARRIES THE SIGNATURES OF ALL THE THREE ASSESSEES. PERUSAL OF THE PHOTOCOP Y OF THE RECEIPT FILED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEES BEF ORE US SHOWS THAT THE AFORESAID SIGNATURES HAVE BEEN DULY VERIFIED NOT ON LY BY SMT. VIJAY CHAUDHARY BUT ALSO BY SHRI PRASHANT CHAUDHARY IN THEIR STATEM ENTS RECORDED BY THE ADIT (INV.) ON 4.11.2003 IN WHICH THEY NOT ONLY CONFIRME D THE AUTHENTICITY OF THEIR SIGNATURES ON RECEIPT DATED 15.9.2000 AS APPEARING ON THE RECEIPT BUT ALSO THE RECEIPT OF THE SAID SUM, VIDE ANSWER GIVEN BY PRASH ANT DUTT CHAUDHARY IN RESPONSE TO Q. NO. 6 PUT BY THE ADIT(INV.), AS REPR ODUCED EARLIER IN THIS ORDER. THE DEPARTMENT HAS FILED A COPY OF THE REPORT DATED 11.3.2004 SUBMITTED BY THE ADIT (INV.) TO THE DIRECTOR OF INCOME-TAX (INV. ). IT IS ONLY THEN THAT THE AO PROCEEDED TO RECORD HIS BELIEF AS REQUIRED BY SECTI ON 147 AND THERE-AFTER ISSUED A NOTICE U/S 147/148. THE COPY OF THE REASON S SO RECORDED WAS ALSO GIVEN BY THE AO TO THE ASSESSEES ON 5.10.2007. THE OBJECTIONS FILED BY THE ASSESSEE AGAINST THE INITIATION OF PROCEEDINGS U/S 147/148 WERE DULY SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 20 20 CONSIDERED AND DISPOSED OFF BY THE AO AS EVIDENT FR OM THE ASSESSMENT ORDERS PASSED BY THE AO. 19. NONE OF THE ASSESSEES HAS FILED RETURN OF INCOME U /S 139 FOR THE ASSESSMENT YEAR UNDER APPEAL AND THEREFORE IT IS NE ITHER A CASE OF RE- ASSESSMENT NOR A CASE WHERE THE ASSESSING OFFICER H AS SOUGHT TO REOPEN A COMPLETED ASSESSMENT. IT IS SIMPLY A CASE OF FRESH ASSESSMENT. THE VALIDITY OF INITIATION OF PROCEEDINGS WOULD THEREFORE NEED TO B E EXAMINED IN THE LIGHT OF THE MAIN PROVISIONS OF SECTION 147 AND NOT OF THE P ROVISO TO SECTION 147. MAIN PROVISIONS OF SECTION 147 AUTHORIZE AND PERMIT THE ASSESSING OFFICER TO ASSESS OR RE-ASSESS INCOME CHARGEABLE TO TAX IF HE HAS REA SON TO BELIEVE THAT INCOME CHARGEABLE TO TAX FOR THE RELEVANT ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD REASON IN THE PHRASE REASON TO BELIEVE IN SECTION 147 WOULD MEAN CAUSE OR JUSTIFICATION. IF THE AO HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAS ESCAPED ASSESSMENT, HE CAN BE SAID TO HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT. THE EXPRESSION REASON TO BELIEVE CANNOT BE HELD TO ME AN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACTS G IVING RISE TO HIS FORMATION OF BELIEF BY LEGAL EVIDENCE. WHAT IS CONTEMPLATED BY S ECTION 147 IS THE PRIMA FACIE BELIEF BY THE AO THAT INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT. IN ORDER TO TEST THE VALIDITY OF INITIATION OF PROC EEDINGS UNDER THE MAIN PROVISIONS OF SECTION 147, ONLY ONE ASPECT HAS TO B E CONSIDERED AND THAT IS WHETHER THERE WAS RELEVANT MATERIAL OR REASONABLE G ROUND ON THE BASIS OF WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQ UISITE BELIEF. WHETHER THOSE MATERIALS AND GROUNDS WOULD CONCLUSIVELY PROV E THE ESCAPEMENT OF INCOME IS NOT THE CONCERN AT THE INITIATION STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE ASSESSING OFFICER IS WIT HIN THE REALM OF HIS SUBJECTIVE SATISFACTION. TESTED ON THE AFORESAID PRINCIPLES, T HE ACTION OF THE ASSESSING OFFICER IN INITIATING THE PROCEEDINGS U/S 147 ON TH E BASIS OF THE REPORT OF THE ADIT (INV.) AND OTHER MATERIALS AVAILABLE WITH HIM IS IN ORDER AS THE INFORMATION GIVEN BY THE ADIT (INV.) OR THE MATERIA LS AVAILABLE WITH HIM ON RECORD CANNOT BE SAID TO BE IRRELEVANT. IT ALSO CAN NOT BE SAID THAT THE INITIATION OF PROCEEDINGS U/S 147/148 IS MOTIVATED BY SUSPICIO N, RUMOUR OR GOSSIP. IN THIS VIEW OF THE MATTER, WE CONFIRM AND UPHOLD THE VALID ITY OF THE PROCEEDINGS SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 21 21 INITIATED BY THE ASSESSING OFFICER U/S 147/148. GRO UNDS OF APPEAL TAKEN BY ALL THE ASSESSEES IN THIS BEHALF ARE THEREFORE DISMISSE D. 20. ONE OF THE GROUNDS TAKEN BY THE ASSESSEES IS THAT THE AO HAS NOT PASSED SPEAKING ORDER TO DISPOSE OFF THE OBJECTIONS TAKEN BY THEM BEFORE THE AO AGAINST THE INITIATION OF PROCEEDINGS U/S 147/14 8 BEFORE PASSING THE ASSESSMENT ORDER. THE LAW IN THIS BEHALF IS FAIRLY WELL SETTLED. THE AO IS REQUIRED TO FURNISH A COPY OF THE REASONS RECORDED BY HIM U/S 148 ONLY AFTER AN ASSESSEE FURNISHES HIS RETURN AND THEREAFTER MAKES A REQUEST SEEKING COPY OF THE REASONS SO RECORDED BY THE AO. IT IS NOT IN DIS PUTE THAT THE AO HAS SUPPLIED A COPY OF THE REASONS RECORDED BY HIM U/S 148 TO ALL THE ASSESSEES. AS EVIDENT ON BARE PERUSAL OF THE ASSESSMENT ORDERS, T HE AO HAS DISPOSED OFF THE OBJECTIONS RAISED BY THE ASSESSEES AGAINST THE INIT IATION OF PROCEEDINGS. IT IS HOWEVER THE GRIEVANCE OF THE ASSESSEES THAT THE AO HAS NOT DISPOSED OF THEIR OBJECTIONS BEFORE PASSING THE ASSESSMENT ORDERS. TH E LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEES COULD NOT CITE ANY PROVISION OF LAW OR AUTHORITY WHICH REQUIRES THE AO TO DISPOSE OFF SUCH OBJECTION S BEFORE PROCEEDING TO PASS THE ASSESSMENT ORDER. ANOTHER REASON WHY SUCH ORDER S (I.E., ORDERS DISPOSING OFF THE OBJECTIONS) ARE NOT INDEPENDENTLY PASSED IS THAT THEY ARE NOT INDEPENDENTLY APPELLABLE. THEY ARE APPELLABLE AS PA RT OF THE ASSESSMENT ORDER AND TOGETHER WITH ASSESSMENT ORDER. SUCH OBJECTIONS ARE THEREFORE BETTER DEALT WITH IN THE ASSESSMENT ORDER. IF THE AO ACCEPTS THE OBJECTIONS AGAINST THE INITIATION OF PROCEEDINGS U/S 147/148, HE, IN THAT CASE, IS EXPECTED TO DROP THE PROCEEDINGS. IN THE PRESENT CASE, THE AO HAS REJECT ED THE OBJECTIONS FOR THE REASONS GIVEN IN THE ASSESSMENT ORDERS. BE THAT AS IT MAY, WE HAVE ALREADY UPHELD THE VALIDITY OF THE INITIATION OF PROCEEDING S U/S 147/148. RESULTANTLY, THE GROUNDS OF APPEAL TAKEN BY ALL THE ASSESSEES IN THI S BEHALF ARE DISMISSED. 21 . WE SHALL NOW CONSIDER VARIOUS OTHER SUBMISSIONS M ADE BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEES. ACCORD ING TO THE ASSESSEES, THEIR STATEMENTS WERE FORCIBLY RECORDED BY THE ADIT (INV. ) AT THEIR RESIDENCE. TWO PROPOSITIONS OF LAW IN THIS BEHALF ARE FIRMLY SETTL ED, I.E., ONE, THAT THE STATEMENTS WHICH ARE VOLUNTARILY MADE CAN ALONE BE ACTED UPON; AND TWO, WHILE MERE RETRACTION OF A STATEMENT MAY NOT BE SUF FICIENT TO MAKE THE STATEMENT IRRELEVANT FOR THE PURPOSE OF A PROCEEDIN G IN A CASE, THERE CANNOT BE ANY DOUBT WHATSOEVER THAT THE COURT IS OBLIGATED TO TAKE INTO CONSIDERATION THE SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 22 22 PROS AND CONS OF BOTH THE STATEMENT AND RETRACTION MADE BY A PERSON. WITH A VIEW TO ARRIVE AT A FINDING AS REGARDS THE VOLUNTAR Y NATURE OF STATEMENT OR OTHERWISE WHICH HAS SINCE BEEN RETRACTED, THE ATTEN DING CIRCUMSTANCES WHICH WOULD INCLUDE THE TIME OF RETRACTION, THE NATURE TH EREOF, THE MANNER IN WHICH SUCH RETRACTION HAS BEEN MADE AND OTHER RELEVANT FA CTORS HAVE TO BE KEPT IN VIEW. KEEPING IN VIEW THE AFORESAID PRINCIPLES, WE SHALL NOW PROCEED TO EXAMINE WHETHER THE RETRACTED STATEMENTS WERE MADE VOLUNTAR ILY AND THEREAFTER EVALUATE THE RETRACTED STATEMENT AND RETRACTION. 22. PROCEEDINGS RELATING TO ASSESSMENT OF INCOME ARE N OT OF CRIMINAL OR QUASI CRIMINAL NATURE. UNLIKE POLICE, CUSTOMS, CENT RAL EXCISE, ENFORCEMENT, NARCOTICS, ETC., THE OFFICERS AND STAFF OF THE INCO ME-TAX DEPARTMENT INCLUDING ADIT (INV.) OR THE ASSESSING OFFICERS ARE NEITHER A RMED NOR THERE IS ANY UNIFORMED CADRE/MANPOWER IN THE DEPARTMENT NOR HAVE THEY THE POWER TO ARREST OR DETAIN OR TO TAKE INTO CUSTODY ANYONE FOR ANY REASON WHATSOEVER. OFFICERS OF THE DEPARTMENT AT SUFFICIENTLY SENIOR L EVEL HAVE THE POWER TO EMBARK UPON ENQUIRIES INCLUDING SPOT INQUIRIES FOR WHICH PURPOSE THEY HAVE BEEN AUTHORIZED, INTER-ALIA, TO RECORD STATEMENTS O N OATH. IT IS IN ORDER TO MAKE INQUIRIES UPON RECEIPT OF TAX EVASION PETITION AGAI NST THE ASSESSEES THAT THE ADIT (INV.) PROCEEDED TO MAKE ON-SPOT INQUIRIES AT THEIR RESIDENCE AND IT IS IN PURSUANCE OF THOSE INQUIRIES THAT HE FURTHER PROCEE DED TO RECORD THEIR STATEMENTS ON OATH IN TERMS OF SECTION 131 OF THE I NCOME-TAX ACT. HE VISITED THEM AT THEIR RESIDENCE AT CONVENIENT TIME. THE FAM ILY OF SMT. VIJAY DUTT CHAUDHARY CONSISTS OF HERSELF, HER HUSBAND, WHO HIM SELF IS ASSISTANT COMMISSIONER (NARCOTICS), AND TWO GROWN UP SONS WHO ARE ALSO IN APPEAL BEFORE US. IT IS QUITE UNLIKELY THAT THE ADIT (INV. ) WAS IN A POSITION TO APPLY FORCE AND PRESSURE WHILE SITTING TO RECORD STATEMEN T IN THE HOME OF A PERSON HAVING SEVERAL ADULTS AND GROWN UP PERSONS. SECONDLY, IT IS IMPORTANT TO OBSERVE HERE THAT STATEMENTS OF THE ASSESSEES WERE NOT RECORDED IN THE COURSE OF THEIR CUSTODY OR EVEN IN THE OFFICE OF ADIT (INV .). IT IS EQUALLY RELEVANT TO MENTION THAT EVEN THE ASSESSEES HAVE NOT SPELT OUT, EITHER IN THEIR RETRACTION OR EVEN BEFORE US, THE NATURE OF FORCE APPLIED ON THEM AT THE TIME WHEN THEIR STATEMENTS WERE RECORDED. THIRDLY, THE TIMING OF THE RETRACTION IS ALSO QUITE RELEVANT. THEIR STATEMENTS WERE RECORDED BY THE ADI T (INV.) ALMOST A MONTH BEFORE THEY WERE SOUGHT TO BE RETRACTED. IT IS TRUE THAT THERE IS NO TIME LIMIT SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 23 23 FOR RETRACTION YET THE TIMING OF RETRACTION IS A RE LEVANT FACTOR TO BE TAKEN INTO ACCOUNT TO ASSESS THE MOTIVE BEHIND RETRACTION. THE ASSESSEES COULD NOT EXPLAIN BEFORE US AS TO WHAT PREVENTED THEM FROM RE TRACTING THEIR STATEMENTS AT THE EARLIEST POSSIBLE OPPORTUNITY, WHICH AROSE A LMOST AFTER THE ADI (INV.) LEFT THE PREMISES OF THE ASSESSEES AFTER RECORDING THEIR STATEMENTS. IT IS QUITE OBVIOUS THAT THE ASSESSEES, AFTER HAVING GIVEN THEI R STATEMENTS ON OATH, MUST HAVE HAD RETHINKING EITHER ON THEIR OWN OR ON ADVIC E THAT THEIR STATEMENTS WOULD GO AGAINST THEM. IT IS THIS THOUGHT THAT COMP ELLED THEM TO RETRACT THEIR STATEMENTS. THE LD. CIT(A) IS QUITE RIGHT IN HIS OB SERVATION THAT THEIR RETRACTIONS ARE AFTER-THOUGHT. FOURTHLY, THE SAME ADIT (INV.) HAS ALSO RECORDED THE STATEMENT OF BUYER, NAMELY, SMT. HARJINDER KAUR, BU T THERE IS NO ALLEGATION EITHER BY THE BUYERS OR BY THE ASSESSEES THAT STATE MENT OF HARJINDER KAUR WAS FORCIBLY RECORDED BY THE ADIT (INV.) OR THAT SHE WA S EVEN COERCED TO GIVE A STATEMENT, MUCH LESS AGAINST THE ASSESSEES. IN FACT , THE ASSESSEES STRONGLY RELY UPON THE STATEMENT OF SMT. HARJINDER KAUR (BUY ER) RECORDED BY THE SAME ADIT (INV.). THUS THESE VERY ASSESSEES, ON ONE HAND , RELY UPON THE STATEMENT OF THE BUYER AS RECORDED BY THE SAME ADIT (INV.) IN SUPPORT OF THEIR CASE BUT THEY, ON THE OTHER HAND, ALLEGE THAT THEIR OWN STAT EMENTS WERE FORCIBLY RECORDED BY THE SAME ADIT (INV.). THE REASONS FOR S UCH A STAND TAKEN BY THE ASSESSEES ARE NOT DIFFICULT TO UNDERSTAND. THE ASSE SSEES WANT US TO BELIEVE AND HOLD THAT THE STATEMENT OF SMT. HARJINDER KAUR WHIC H IS FAVOURABLE TO THE ASSESSEES HAS NOT BEEN FORCIBLY RECORDED WHILE THE STATEMENTS OF THE ASSESSEES WHICH GO AGAINST THEM HAVE BEEN FORCIBLY RECORDED B Y THE SAME ADIT (INV.). WE ARE UNABLE TO HOLD SO. FIFTHLY, PERUSAL OF THE STATEMENT OF SHRI PRASHANT DUTT CHAUDHARY (ANSWER TO Q.3) SHOWS THAT HE INITIA LLY FEIGNED IGNORANCE ABOUT THE MATTER. IT IS ONLY WHEN HE WAS SHOWN THE COPY O F THE RECEIPT THAT HE REALIZED THE GRAVITY OF THE SITUATION AND IT IS ONL Y THEN THAT HE NOT ONLY ACCEPTED THE GENUINENESS OF SIGNATURES ON THE RECEI PT BUT ALSO ADMITTED RECEIPT OF THE AMOUNT MENTIONED IN THE RECEIPT. THI S SHOWS THAT THE ANSWERS WERE NOT GIVEN UNDER ANY FORCE OR PRESSURE BUT WERE GIVEN BY THE ASSESSEES SPONTANEOUSLY. BESIDES, THE ALLEGATION THAT THE STA TEMENTS OF THE ASSESSEES WERE FORCIBLY RECORDED BY THE ADIT (INV.) IS NEITHE R BORNE OUT BY THE MATERIALS PLACED BEFORE US NOR BY THE ATTENDANT CIRCUMSTANCES . THE POSITION THAT EMERGES IS THAT THE ADIT (INV.) HAS RECORDED THE ST ATEMENTS OF SELLERS AND SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 24 24 BUYERS SPONTANEOUSLY IN THE SAME MANNER IN WHICH TH EY WERE GIVEN BY THEM INCLUDING THE ASSESSEES AND THE BUYERS OF THE PROPE RTY. ON CAREFUL CONSIDERATION OF ALL THE ATTENDING CIRCUMSTANCES IN CLUDING THE TIME OF RETRACTION, THE NATURE OF RETRACTION, THE MANNER IN WHICH SUCH RETRACTION HAS BEEN MADE AND OTHER RELEVANT FACTORS AS PLACED BEFORE US, WE FIND NO SUBSTANCE IN THE ALLEGATION OF THE ASSESSEES THAT THEIR STATEMENTS W ERE FORCIBLY RECORDED BY THE ADIT (INV.). RESULTANTLY, OUR FINDING OF FACT IS TH AT THE STATEMENTS GIVEN BY THEM BEFORE THE ADIT (INV.) WERE VOLUNTARY UNINFLUE NCED BY ANY FORCE, COERCION, THREAT, ETC. 23. WE ARE NOT OBLIVIOUS OF THE FACT THAT EVEN VOLUNTA RILY GIVEN STATEMENTS MAY NOT IN ALL THE CIRCUMSTANCES BE SUFFICIENT TO D RAW CONCLUSIONS AGAINST THE MAKER OF THE STATEMENT. IT ALL DEPENDS UPON THE NAT URE OF STATEMENT AND THE FACTS OF THE CASE. IN THE CASE BEFORE US, THE RECEI PT BEARS THE SIGNATURES OF THE ASSESSEES WHICH THEY, IN THEIR RESPECTIVE STATEMENT S, HAVE CONFIRMED, AFTER VERIFICATION AND SATISFYING THEMSELVES, TO BE THEIR OWN. THUS THE RECEIPT AND THE STATEMENTS GIVEN BY THE ASSESSEES CORROBORATE E ACH OTHER. IT IS NOT THAT THE AO IS ACTING UPON THE COPY OF THE RECEIPT ALONE OR THE STATEMENTS GIVEN BY THE ASSESSEES ALONE. HE IS USING BOTH OF THEM AS CO RROBORATING EACH OTHER. 24 . NOTWITHSTANDING THE FACT THAT THE GENUINENESS OF THE SIGNATURES OF THE ASSESSEES ON THE RECEIPT IS CORROBORATED BY THEIR S TATEMENTS AND THEIR STATEMENTS ARE CORROBORATED BY THEIR SIGNATURES ON THE RECEIPT, THE ASSESSEES WANT US TO BELIEVE THAT SIGNATURES ON THE RECEIPT A RE NOT THEIR SIGNATURES. THE RELEVANT QUESTION THEREFORE IS NOT AS TO HOW EVIDEN CE HAS BEEN OBTAINED OR THE STATEMENTS HAVE BEEN RECORDED BUT AS TO WHETHER THE FACTS EMERGING FROM THEM HAVE BEEN REBUTTED BY THE ASSESSEES. IT IS WEL L SETTLED BY CATENA OF AUTHORITIES THAT THE RELEVANT ISSUE IN THE ADMISSIB ILITY OF EVIDENCE IS NOT AS TO HOW IT HAS BEEN OBTAINED BUT AS TO WHETHER IT IS RE LEVANT AND IF IT IS RELEVANT AS TO WHETHER IT HAS BEEN REBUTTED BY THE PARTY AGAINS T WHOM IT IS PROPOSED TO BE USED. A STATEMENT ON OATH IS A STRONG PIECE OF EVID ENCE QUA THE MAKER OF THE STATEMENT. IT CANNOT BE LIGHTLY IGNORED. AFTER HAVI NG CONFIRMED THE AUTHENTICITY OF THEIR SIGNATURES ON THE RECEIPT IN THEIR RESPECT IVE STATEMENTS RECORDED BY THE ADIT (INV.) ON OATH, THE ASSESSEES COULD HAVE STILL RECANTED FROM THEIR STATEMENTS BY LEADING EVIDENCE TO PROVE THAT THE SI GNATURES APPEARING ON THE RECEIPT WERE NOT THEIR SIGNATURES. IT IS NOT DISPUT ED THAT A COPY OF THE RECEIPT SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 25 25 WAS GIVEN TO THEM TOGETHER WITH A COPY OF THEIR STA TEMENTS. THEY WERE THUS IN POSSESSION OF ALL THE RELEVANT MATERIALS WHICH WERE PROPOSED TO BE USED AGAINST THEM. THEY ALSO HAD SUFFICIENT TIME AT THEI R DISPOSAL TO LEAD EVIDENCE TO ESTABLISH THAT THE SIGNATURES AS APPEARING ON THE R ECEIPT WERE FORGED OR AT LEAST NOT THEIR SIGNATURES. BUT THEY DID NOT DO SO. THE FACTS AS STATED BY THE ASSESSEES IN THEIR RESPECTIVE STATEMENTS HAVE NOT B EEN PROVED BY THE ASSESSEES TO BE INCORRECT AND THUS THEY REMAIN UN-R EBUTTED. IN OTHER WORDS, THEIR ASSERTIONS THAT THE RECEIPT IS FAKE OR FORGED OR THAT THE SIGNATURES APPEARING ON IT WERE NOT THEIR OWN SIGNATURES ARE N OT SUBSTANTIATED BY ANY RELIABLE EVIDENCE. WE THEREFORE HOLD THAT THEIR BAL D ASSERTION THAT THE SIGNATURES ON THE RECEIPT WERE NOT THEIR OWN IS NOT SUPPORTED BY ANY RELIABLE EVIDENCE AND RESULTANTLY IT IS NOT POSSIBLE FOR US TO HOLD THAT THE CONCLUSIONS REACHED BY THE AO/CIT(A) IN THIS BEHALF ARE PERVERS E OR WITHOUT FOUNDATION. 25. TURNING TO THE EVALUATION OF RETRACTED STATEMENTS AND RETRACTIONS, WE ARE INCLINED TO HOLD THAT THE RETRACTED STATEMENTS ARE MORE RELIABLE ON THE FACTS OF THE CASE THAN RETRACTIONS FOR SEVERAL REASONS. ONE, RETRACTED STATEMENTS WERE MADE SPONTANEOUSLY WHILE RETRACTIONS WERE MADE AFTER LOT OF THOUGHT AND ADVICE TO WRIGGLE OUT OF THE SITUATION. TWO, RETRACTED STATEMENTS WERE VOLUNTARILY MADE ON OATH AND THEREFORE IT IS DIFFIC ULT TO BELIEVE THAT THE MAKERS OF STATEMENT WOULD MAKE ANY WRONG STATEMENT AS THEY WERE AWARE THAT THEIR WRONG STATEMENT COULD LEAD TO THEIR CRIMINAL PROSEC UTION FOR COMMITTING THE OFFENCE OF PERJURY. THREE, RETRACTED STATEMENTS ARE CORROBORATED BY RECEIPT WHILE RETRACTIONS ARE NOT CORROBORATED BY ANY RELIA BLE EVIDENCE. 26. RELIANCE WAS PLACED BY THE LD. AUTHORIZED REPRESENTATIVE ON THE STATEMENTS GIVEN BY THE BUYERS, NAMELY, SHRI JOGIND ER SINGH AND SMT. HARJINDER KAUR BEFORE THE ADIT (INV.)/AO. THE STATE MENTS GIVEN BY THE BUYERS ARE MORE IN THE NATURE OF ACCOMMODATING THE ASSESSE ES AND TO HELP THEM IN AVOIDING THE TAX LIABILITY. BESIDES, THEY ARE INCON SISTENT WITH THE STATEMENTS GIVEN BY THE ASSESSEES THEMSELVES. WE ARE THEREFORE UNABLE TO LEND CREDENCE TO THEM IN THE FACE OF OTHER UN-REBUTTED EVIDENCE A VAILABLE ON RECORD. 27. IT WAS FURTHER CONTENDED BY THE LD. AUTHORIZED REPR ESENTATIVE THAT THE SALE VALUE TAKEN IN THE HANDS OF THE ASSESSEES OUGH T TO HAVE BEEN TAKEN AS THE INVESTMENT MADE BY THE BUYERS FOR PURCHASING TH E PROPERTY AND THE BUYERS SMT. VIJAY DUTT CHAUDHARY & OTHERS V. ACIT ITA NOS.978,979 & 980/CHANDI/2009 26 26 TAXED ACCORDINGLY. WE ARE UNABLE TO COMMENT UPON TH IS MATTER AS THE PARTIES HAVE NOT PLACED ANY MATERIAL IN THIS BEHALF BEFORE US. BE THAT AS IT MAY, THERE IS NO PROVISION IN THE INCOME-TAX ACT WHICH MAKES M ERE INVESTMENT AS TAXABLE. WHAT IS TAXABLE IS THE UNEXPLAINED INVESTMENT AND N OT MERE INVESTMENT AS SUCH. THERE IS NOTHING ON RECORD BEFORE US TO SHOW THAT THE INVESTMENT MADE BY THE BUYERS WAS UNEXPLAINED. IF IT WAS AT ALL SO, IT WAS FOR THE REVENUE TO TAX THE SAME IN CONFORMITY WITH LAW. 28 . AS REGARDS THE CORRECTNESS OF THE IMPUGNED ADDITI ONS, THE CASE OF THE ASSESSEES IS THAT THEY ARE BASED ON FORGED RECEIPT AND RETRACTED STATEMENTS AND THEREFORE NOT TENABLE IN LAW. WE HAVE ALREADY R EJECTED THE SUBMISSIONS MADE BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE A SSESSEES IN THIS BEHALF. WE HOLD ON THE FACTS OF THE CASE THAT THE IMPUGNED ADD ITIONS HAVE RIGHTLY BEEN MADE ON THE BASIS OF RELIABLE EVIDENCE AND MATERIAL S ON RECORD, WHICH HAVE NOT BEEN REBUTTED BY THE ASSESSEES. IN THIS VIEW OF THE MATTER, ALL THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEES IN THIS BEHALF ARE DI SMISSED. 29. IN VIEW OF THE FOREGOING, ALL THE APPEALS ARE DISM ISSED. ORDER PRONOUNCED ON FEBRUARY 2011 (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE FEBRUARY 2011 SURESH COPY TO: 1. THE APPELLANTS, NAMELY, SMT. VIJAY DUTT CHAUDHAR Y, SHRI PRASHANT DUTT CHAUDHARY AND SHRI VIKRAM DUTT CHAUDHARY 2. THE RESPONDENT, A.C.I.T. PANCHKULA 3. THE CIT(A), PANCHKULA 4. THE CIT, PANCHKULA 4. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH