Smt.M.Thankamma, Cochin V. ACIT, Ernakulam

ITSSA 151/COCH/2004

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0379 (ITAT-COCHIN)
• Duration Of Justice: 9 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-09-2014
• Assessment Year: misc
• Appeal Filed On: 17-12-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: A KUMAR
• Keywords: Document seized; Block assessment; Documents seized

Judgement Text

1 IT(SS)A NO.151/COCH/2004 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T(SS)A NO. 151-COCH-2004 (BLOCK PERIOD 1989-90 TO 1998-99) SMT. M THANKAMMA VS ACIT, INVESTIGATION CIR.2 40/7634, LAKSHMI VIHAR DIVISION-2, ERNAKULAM DORAISWAMI IYER ROAD COCHIN-35 PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A KUMAR RESPONDENT BY : SHRI K.K. JOHN, SR DR DATE OF HEARING : 18-09-2014 DATE OF PRONOUNCEMENT : 14-11-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A), CALICUT-II, CALICUT DATED 13-10-2004 AND PERTAINS T O BLOCK PERIOD 1989-90 TO 1998-99. 2. THIS APPEAL OF THE ASSESSEE WAS EARLIER DISPOSED OF BY THIS TRIBUNAL BY AN ORDER DATED 10-09-2008. HOWEVER, ON APPEAL B Y THE REVENUE, THE 2 IT(SS)A NO.151/COCH/2004 HIGH COURT, BY JUDGMENT DATED 26-11-2009 REMANDED T HE MATTER BACK TO THE FILE OF THE TRIBUNAL. ACCORDINGLY, THE APPEAL WAS FIXED FOR HEARING. 3. SHRI A KUMAR, THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT EARLIER THIS TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE BY PLACING RELIANCE ON THE JUDGMENT OF THE APEX COURT IN CIT VS P.V. KALYANASU NDARAM 294 ITR 49 (SC) ON THE GROUND THAT THE LOOSE SHEET SAID TO BE SEIZED IN THE COURSE OF SEARCH OPERATION CANNOT BE A BASIS FOR MAKING ANY A DDITION. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE SOLD FOUR CENTS OF LAND TOGETHER WITH TWO STOREYED BUILDING BY A REGISTERED SALE DEED DATED 04-06- 1998 AND 02-07-1998 TO ONE SHRI B JAGJIVAN CHANDAK. ACCORDING TO THE LD.COUNSEL, THE SALE CONSIDERATION WAS RS.9,30,000. ACCORDING TO THE LD.COUNSEL, THE ASSESSING OFFICER FOUND THAT THE AS SESSEE HAS DECLARED THE VALUE OF THE LAND AS ON 31-03-1997 FOR THE PURPOSE OF WEALTH-TAX AT RS.14,65,000. THE ASSESSING OFFICER HAS ALSO REFER RED THE MATTER TO THE VALUATION OFFICER, WHO ESTIMATED THE VALUE OF THE L AND AND BUILDING AT RS.32,63,500. IGNORING THE VALUE DECLARED IN THE W EALTH-TAX RETURN AND THE VALUE DETERMINED BY THE VALUATION OFFICER NOMINATED BY THE ASSESSING OFFICER HIMSELF, THE ASSESSING OFFICER TAKEN THE VA LUE AT RS.48 LAKHS. ACCORDING TO THE LD.COUNSEL, THE ASSESSING OFFICER CLAIMS THAT ONE OF THE SEIZED DOCUMENTS MARKED AS A-23 MORE PARTICULARLY P AGE 65 OF THE SAME CONTAINS A REFERENCE ABOUT THE SALE OF THE IMPUGNED PROPERTY. THE 3 IT(SS)A NO.151/COCH/2004 LD.COUNSEL FURTHER SUBMITTED THAT SHRI B JAGJIVAN C HANDAK HAS ALSO WRITTEN A LETTER ON 06-06-2000 STATING THAT HE HAS NOT PAID ANY AMOUNT OVER AND ABOVE THE SALE CONSIDERATION DISCLOSED IN THE REGIS TERED SALE DEED. ACCORDING TO THE LD.COUNSEL, WHEN SHRI B JAGJIVAN C HANDAKS APPEAL CAME BEFORE THE CIT(A) HE FIXED THE VALUE AT RS.27,55,00 0 AS PURCHASE PRICE. THEREFORE, ACCORDING TO THE LD.COUNSEL, WHEN THE PU RCHASE PRICE WAS FIXED IN THE HANDS OF THE PURCHASER AT RS.27,55,000, TAKI NG THE CONSIDERATION AT RS.45 LAKHS IN THE HANDS OF THE VENDOR IS UNREASONA BLE AND CANNOT BE JUSTIFIED. HOWEVER, WHEN THE APPEAL CAME UP BEFORE THE CHENNAI BENCH OF THIS TRIBUNAL IN THE CASE OF THE PURCHASER, THE ORD ER OF THE COMMISSIONER (APPEALS) WAS SET SIDE AND REMANDED BACK TO THE FIL E OF THE ASSESSING OFFICER WITH THE DIRECTION TO THE ASSESSING OFFICER TO EXAMINE THE ASSESSMENT FRAMED IN THE HANDS OF THE VENDOR AND TH EREAFTER FRAME THE ASSESSMENT, BY AN ORDER DATED 28-10-2002 IN IT(SS)A NO.21/MDS/2001. 4. ACCORDING TO THE LD.COUNSEL NO BOOKS OF ACCOUNT OR OTHER DOCUMENT WAS SEIZED FROM THE ASSESSEE IN THE COURSE OF SEARC H OPERATION. THE LOOSE SHEET SAID TO BE FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERATION CONTAINED IN A-23 DOES NOT REFER ANYTHING ABOUT THE SALE CONSIDERATION SAID TO BE RECEIVED BY THE ASSESSEE. ACCORDING TO THE LD.COUNSEL, THE LOOSE SHEET DID NOT CONSTITUTE BOOK S OF ACCOUNT OR OTHER DOCUMENT FOUND DURING THE COURSE OF SEARCH OPERATIO N. 4 IT(SS)A NO.151/COCH/2004 5. REFERRING TO PAGE 61 OF SEIZED LOOSE SHEETS MARK ED AS A-23, THE LD.COUNSEL SUBMITTED THAT THE ASSESSEES HUSBAND AD MIT THE CONTENTS OF PAGE 61 IN THE LOOSE SHEETS MARKED AS A-23. HOWEVE R, IT IS NOT INCRIMINATING SO AS TO INFER THAT WHAT WAS RECEIVED AS SALE CONSIDERATION IS RS.48 LAKHS. HOWEVER, OTHER PAGES IN THE SEIZED DO CUMENT MARKED AS A- 23 VIZ. PAGE 62, 63, 64 & 65 ARE NOT IN THE HANDWRI TING OF EITHER THE ASSESSEE OR HER HUSBAND OR HER SON. ACCORDING TO T HE LD.COUNSEL, THE DEPARTMENT COULD NOT ELICIT ANY EVIDENCE DURING THE COURSE OF EXAMINATION THAT THE SAID DOCUMENT PERTAINS TO THE ASSESSEE OR IT PERTAINS TO THE PROPERTY SOLD BY THE ASSESSEE. THE DEPARTMENT HAS NOT ESTABLISHED THAT PAGE 65 OF SEIZED DOCUMENT A-23 WAS WRITTEN IN THE HANDWRITING OF THE ASSESSEE OR HER HUSBAND OR HER SON. SINCE THE SAI D DOCUMENT IS NOT IN THE HANDWRITING OF THE ASSESSEE OR HER HUSBAND IT C ANNOT BE TREATED AS A SEIZED DOCUMENT. THEREFORE, THE PRESUMPTION U/S 13 2(4A) MAY NOT BE ATTRACTED. ACCORDING TO THE LD.COUNSEL, SINCE THE PRESUMPTION U/S 132(4A) IS NOT APPLICABLE, THE ASSESSING OFFICER IS NOT JUS TIFIED IN TAKING THE SALE CONSIDERATION AT RS.48 LAKHS. 6. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTE D THAT THE ASSESSING OFFICER IS TRYING TO CO-RELATE THE SEIZED MATERIAL A-23 MORE PARTICULARLY PAGE 65 WITH BOOKS OF ACCOUNT SAID TO BE SEIZED FROM THE PURCHASER SHRI B JAGJIVAN CHANDAK. THE ENTRIES FOUND IN THE BOOKS O F ACCOUNT OF SHRI B 5 IT(SS)A NO.151/COCH/2004 JAGJIVAN CHANDAK SHOW THE PAYMENT OF RS.18,25,000 T O SHRI T.K. NAIRS ACCOUNT. THE ASSESSEE HAS DENIED THE RECEIPT OF AN Y AMOUNT AS FOUND IN THE BOOKS OF ACCOUNT OF SHRI B JAGJIVAN CHANDAK. T HE PURCHASER HIMSELF EXPLAINED BY WAY OF HIS LETTER DATED 06-06-2000 THA T THE PURCHASE PRICE IS ONLY RS.9,30,000 FOR 4 CENTS OF LAND ALONG A DOUBLE STOREYED BUILDING. IN THOSE CIRCUMSTANCES, ACCORDING TO THE LD.COUNSEL, T HE BOOKS OF ACCOUNT SAID TO BE SEIZED FROM THE PURCHASER, SHRI B JAGJIV AN CHANDAK HAS NO RELEVANCE AT ALL. REFERRING TO THE STATEMENT RECOR DED FROM THE ASSESSEE, THE LD.COUNSEL SUBMITTED THAT NO QUESTION WAS PUT T O ASSESSEE WITH REGARD TO SEIZED DOCUMENT A-23 MORE PARTICULARLY, PAGE 65 ON WHICH THE ASSESSING OFFICER IS PLACING RELIANCE. NO QUESTION WAS ASKED ABOUT THE HANDWRITING OR THE SIGNATURE OF THE ASSESSEE. IN F ACT, NO ONE KNOWS WHO HAS WRITTEN PAGE 65 OF SEIZED DOCUMENT A-23. IN TH E ABSENCE OF ANY EVIDENCE TO SHOW THAT THE ENTRIES WERE MADE BY THE ASSESSEE AT PAGE 65 OF SEIZED DOCUMENT A-23, ACCORDING TO THE LD.COUNSE L, NO RELIANCE CAN BE PLACED UPON THAT FOR DECIDING THE SALE CONSIDERATIO N SAID TO BE RECEIVED BY THE ASSESSEE. ACCORDING TO THE LD.COUNSEL, SINCE P AGE 65 OF A-23 IS NOT A DOCUMENT AT ALL, THERE CANNOT BE ANY PRESUMPTION U/ S 132(4A) OF THE ACT. ACCORDING TO THE LD.COUNSEL, OTHER THAN THE REGISTE RED SALE DEED, THE ONLY MATERIAL AVAILABLE ON RECORD IS SEIZED DOCUMENT A-2 3. AT PAGES 61 TO 65, THE REVENUE IS PLACING RELIANCE FOR THE PURPOSE OF MAKING ADDITION. HOWEVER, PAGE 61 IN DOCUMENT A-23 IS WRITTEN BY ASS ESSEES HUSBAND. 6 IT(SS)A NO.151/COCH/2004 OTHER PAGES 62 TO 65 ARE NOT WRITTEN BY THE ASSESSE E OR HER HUSBAND OR HER SON. UNLESS THE REVENUE ESTABLISHES THAT THE C ONTENTS OF THE DOCUMENT WERE WRITTEN BY THE ASSESSEE OR ANY OF HER RELATIVE S, NO RELIANCE CAN BE PLACED UPON THAT. REFERRING TO PAGE 65 OF SEIZED D OCUMENT A-23, THE LD.COUNSEL SUBMITTED THAT THERE IS NO CONSISTENCY W ITH REGARD TO CONSIDERATION. THE FIRST PART OF PAGE 65 SHOWS THE TOTAL CONSIDERATION AS IF RS.22 LAKHS. IT SHOWS A RECEIPT OF ADVANCE OF RS.3 LAKHS ON 30-04-1997. THERE IS NO REFERENCE ABOUT THE DATE WITH REGARD TO RECEIPT OF ANOTHER SUM OF RS.3 LAKHS. THE BALANCE WAS TO BE PAID ON THE D ATE OF REGISTRATION. HOWEVER, THERE IS NO REFERENCE ABOUT THE BALANCE AM OUNT REMAINS TO BE PAID. THEREFORE, AT THE BEST, PAGE 65 OF SEIZED MA TERIAL A-23 CAN BE TAKEN FOR RECEIPT OF RS.3 LAKHS ON 30-04-1997. THERE IS NO REFERENCE ABOUT THE PAYMENT / RECEIPT OF OTHER AMOUNT. THEREFORE, ACCO RDING TO THE LD.COUNSEL, THE DEPARTMENT CANNOT TAKE PART OF PAGE 65 OF THE S EIZED MATERIAL A-23 BY IGNORING THE OTHER PART. ACCORDING TO LD.COUNSEL, PAGE 65 OF SEIZED DOCUMENT A-23 DOES NOT THROW ANY LIGHT WITH REGARD TO SALE CONSIDERATION OF SALE OF 4 CENTS OF LAND WITH BUILDING. 7. THE LD.COUNSEL FURTHER SUBMITTED THAT THERE IS N O MATERIAL AVAILABLE ON RECORD TO EXPLAIN OR TO DETERMINE THE SALE CONSI DERATION AT RS.48 LAKHS. ACCORDING TO THE LD.COUNSEL, THE REVENUE CANNOT IGN ORE THE TOTAL SALE CONSIDERATION MENTIONED AS RS.22 LAKHS ON THE TOP O F THE PAGE 65 AND 7 IT(SS)A NO.151/COCH/2004 ADOPT RS.48 LAKHS WHICH DOES NOT EVEN SAY THAT IT W AS THE SALE CONSIDERATION. MOREOVER, THE PURCHASERS BOOKS OF ACCOUNT DOES NOT SHOW ANY PAYMENT OVER AND ABOVE THE SALE CONSIDERATION M ENTIONED IN THE SALE DEED. IN THOSE CIRCUMSTANCES, ACCORDING TO THE LD .COUNSEL, THE CIT(A) COMMITTED AN ERROR IN CONFIRMING THE ADDITION OF RS .48 LAKHS. THE LD.COUNSEL SUBMITTED THAT IN THE ABSENCE OF ANY MAT ERIAL TO SUGGEST THAT THE SALE CONSIDERATION WAS OF RS. 48 LAKHS, THE SALE CO NSIDERATION MENTIONED IN THE SALE DEED AT RS.9,30,000 CANNOT BE IGNORED. 8. ON THE CONTRARY, SHRI K.K. JOHN, THE LD.DR SUBMI TTED THAT THERE WAS A SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSE E ON 17-09-1998 AND 30-09-1998. THE SEARCH IN THE PREMISES OF THE ASSE SSEE WAS CONDUCTED AS A CONSEQUENCE TO THE SEARCH CONDUCTED IN THE PRE MISES OF SHRI B JAGJIVAN CHANDAK OF NISHA FABRICS, ERNAKULAM. ACCO RDING TO THE LD.DR, SHRI SHRI B JAGJIVAN CHANDAK OF NISHA FABRICS PURCH ASED 4 CENTS OF LAND ALONGWITH TWO STOREYED BUILDING BELONGING TO THE AS SESSEE AT P.O. LINK ROAD, ERNAKULAM. DURING THE COURSE OF SEARCH OPERA TION SEVERAL INCRIMINATING MATERIALS WERE FOUND IN THE PREMISES OF THE ASSESSEE AS WELL AS IN THE PREMISES OF SHRI B JAGJIVAN CHANDAK. A B UNCH OF LOOSE SHEETS WAS FOUND WHICH WERE SEIZED. THE BUNCH OF LOOSE SH EETS FOUND AND SEIZED WERE MARKED AS A-23. PAGE 65 OF THE SAID LO OSE SHEETS HAS A REFERENCE ABOUT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. THOUGH 8 IT(SS)A NO.151/COCH/2004 AT THE TOP OF THE PAGE THE TOTAL SALE CONSIDERATION WAS MENTIONED AT RS.22 LAKHS, AT THE BOTTOM IT IS SHOWN THAT THE ASSESSEE HAS RECEIVED RS.8 LAKHS AS ADVANCE; THE BALANCE TO BE PAID IS RS.40 LAKHS. FROM THE NOTING CONTAINED AT PAGE 65 OF SEIZED DOCUMENT A-23, ACCOR DING TO THE LD.DR, IT IS OBVIOUS THAT SHRI B JAGJIVAN CHANDAK PURCHASED THE PROPERTY FOR SALE CONSIDERATION OF RS.48 LAKHS. HOWEVER, THE ASSESSE E HAS DISCLOSED THE SALE CONSIDERATION ONLY AT RS.9,30,000. THEREFORE, THE DIFFERENCE BETWEEN THE SALE CONSIDERATION FOUND IN THE SEIZED DOCUMENT A-23 PAGE 65 AND THE SALE CONSIDERATION DISCLOSED IN THE REGISTERED SALE DEED WAS TAKEN AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. IN FACT, ACCORDING TO THE LD.DR, RS.38,70,000 WAS TAKEN AS UNDISCLOSED INCOME. 9. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE WA S EXAMINED U/S 132(4) OF THE ACT. THE ASSESSEE ADMITTED THAT 4 CE NTS OF LAND WITH TWO STOREYED BUILDING WAS SOLD TO SHRI B JAGJIVAN CHAND AK. SHE ALSO ADMITTED THAT THE ENTIRE TRANSACTION WAS DONE BY HER HUSBAND , SHRI KRISHNAN NAIR. IN THE RESIDENTIAL PREMISES OF SHRI B JAGJIVAN CHAN DAK THE BOOKS OF ACCOUNT WAS SEIZED WHICH SAYS THE PAYMENT TO T.K. A CCOUNT. ACCORDING TO THE LD.DR, T.K. ACCOUNT MEANS T KRISHNAN NAIR ACCOU NT. THE MATERIAL FOUND IN THE SHRI B JAGJIVAN CHANDAKS HOUSE SHOW P AYMENT OF RS.18,25,000 ON VARIOUS DATES AS EXTRACTED BY THE A SSESSING OFFICER AT PAGE 5 OF HIS ORDER. THEREFORE, ACCORDING TO THE L D.DR, THE SALE 9 IT(SS)A NO.151/COCH/2004 CONSIDERATION IS NOT DEFINITELY RS.9,30,000. THOUG H SHRI B JAGJIVAN CHANDAK CLAIMS THAT THE PAYMENT OF RS.18,25,000 IS NOT FOR PURCHASE OF THE PROPERTY AT P.O. LINK ROAD, ERNAKULAM FROM THE ASSESSEE BUT FOR PURCHASE OF GOODS. SHRI B JAGJIVAN CHANDAK DID NOT PRODUCE ANY PURCHASE BILL OR DETAILS OF GOODS PURCHASED. THERE FORE, THE CLAIM OF SHRI B JAGJIVAN CHANDAK THAT THE PAYMENT TO KRISHNAN NAIR IS ONLY FOR PURCH ASE OF GOODS IS NOT ESTABLISHED. SINCE THE SEIZED DOCUMEN T A-23 PAGE 65 SEIZED FROM THE ASSESSEE, THERE IS A PRESUMPTION U/S 132(4 A) THAT THE SAID DOCUMENT BELONGS TO HER. THEREFORE, THE ASSESSEE C ANNOT DISOWN THE CONTENTS OF THE SAID DOCUMENT. 10. THE LD.DR FURTHER SUBMITTED THAT AS ON 31-03-19 94 THE ASSESSEE HIMSELF VALUED THE PROPERTY FOR THE PURPOSE OF WEAL TH-TAX AT RS.13,98,125. SUBSEQUENTLY ON 31-03-1995 SHE VALUED THE PROPERTY AT RS. 14,65,625 FOR THE PURPOSE OF WEALTH-TAX. MOREOVER, THE VALUATION OFFICER FIXED THE VALUE OF THE PROPERTY AT RS. 32,63,500. IN VIEW OF THE P RESUMPTION U/S 132(4A), ACCORDING TO THE LD.DR, THE MATERIALS FOUND IN THE PREMISES OF THE ASSESSEE RELATE TO THE PAYMENT RECEIVED BY THE ASSE SSEE FOR SALE OF 4 CENTS OF LAND ALONGWITH BUILDING. THEREFORE, THE A SSESSING OFFICER HAS RIGHTLY TAKEN THE SALE CONSIDERATION AT RS.48 LAKHS AND THE DIFFERENCE OF RS.38,70,000 WAS ADDED AS UNDISCLOSED INCOME FOR TH E BLOCK PERIOD. 10 IT(SS)A NO.151/COCH/2004 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS IS A BLOCK ASSESSMENT FRAMED U/S 158BC OF THE ACT. ORIGINALLY A SEARCH W AS CONDUCTED IN THE PREMISES OF SHRI B JAGJIVAN CHANDAK, THE PURCHASER OF THE PROPERTY. CONSEQUENTLY, A SEARCH WAS ALSO CONDUCTED IN THE PR EMISES OF THE ASSESSEE. THE ONLY QUESTION ARISES FOR CONSIDERATI ON IS WHAT IS THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE FOR SALE OF 4 CENTS OF LAND AND BUILDING SAID TO BE SITUATED AT P.O. LINK ROAD, ERN AKULAM. THE ASSESSEE CLAIMS THAT THE SALE CONSIDERATION IS RS.9,30,000. THE PURCHASER ALSO CLAIMS THAT THE SALE CONSIDERATION IS RS.9,30,000. IN THE ASSESSMENT OF THE PURCHASER, THE SALE CONSIDERATION WAS DETERMINED AT RS.27,55,000. THIS RS.27,55,000 WAS ARRIVED AT ON THE BASIS OF THE MAT ERIAL FOUND IN THE PREMISES OF SHRI B JAGJIVAN CHANDAK WHICH DISCLOSES THE PAYMENT OF RS.18,25,000 AND RS.9,30,000 DISCLOSED IN THE SALE DEED. IT IS ALSO AN ADMITTED FACT THAT WHEN THE APPEAL OF THE PURCHASER SHRI B JAGJIVAN CHANDAK CAME BEFORE THE CHENNAI BENCH OF THIS TRIBU NAL, THE CHENNAI BENCH OF THIS TRIBUNAL, AFTER TAKING NOTE OF THE SE IZED BOOKS OF ACCOUNT FROM THE PREMISES OF SHRI B JAGJIVAN CHANDAK WITH R EGARD TO RS.18,25,000 SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND RE MANDED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO DETERMINE THE SALE CONSIDERATION AFTER FINALIZATION OF THE SALE CONSID ERATION IN THE HANDS OF THE VENDOR, I.E THE PRESENT ASSESSEE. 11 IT(SS)A NO.151/COCH/2004 12. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS O F SECTION 158BC OF THE ACT. SECTION 158BC ENABLES THE ASSESSING OFFIC ER TO DETERMINE THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD ON THE BASI S OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENT OR ASSET FOUND IN THE COU RSE OF SEARCH OPERATION. THE COMPUTATION OF UNDISCLOSED INCOME F OR THE BLOCK PERIOD IS PROVIDED IN SECTION 158BB OF THE ACT. SECTION 158B B(1) SAYS THAT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD SHALL BE CO MPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT ON THE BASIS OF EVID ENCE FOUND AS A RESULT OF SEARCH. THEREFORE, THE ASSESSING OFFICER HAS TO CO NFINE HIMSELF TO ONLY THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATIO N. THE KERALA HIGH COURT WHILE INTERPRETING THE TERM EVIDENCE AS FOU ND IN SECTION 158BB(1) OF THE ACT, FOUND THAT THE TERM EVIDENCE INCLUDE S BOTH MATERIAL AND ORAL. THEREFORE, A STATEMENT RECORDED U/S 132(4) OF THE A CT DURING THE COURSE OF SEARCH OPERATION IS ALSO AN EVIDENCE WHICH WOULD FA LL U/S 158BB(1) OF THE ACT. THEREFORE, IT IS THE OBLIGATION OF THE LOWER AUTHORITIES TO TAKE INTO CONSIDERATION NOT ONLY THE MATERIAL FOUND DURING TH E COURSE OF SEARCH OPERATION BUT ALSO THE ORAL STATEMENT RECORDED U/S 132(4) FOR THE PURPOSE OF COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK P ERIOD. 13. NOW WHAT WAS FOUND BY THE DEPARTMENT DURING THE COURSE OF SEARCH OPERATION IS LOOSE SHEET WHICH IS MARKED AT A-23. PAGE 65 OF THE LOOSE SHEET A-23 DISCLOSES AS FOLLOWS: 12 IT(SS)A NO.151/COCH/2004 B.JAGNEEVN CHANDAK AGE 44 YEARS. BUSINESS S/O BABULALJI CHANDAK SREERANGAM DIWNS ROAD-KOCHI-16 DOUBLE STORIED BUILDING GROUND 40/2732 OCCUPIED BY THE PURCHASER 2333 FIRST FLOOR OCCUPIED BY SRI VENKITASWARA SHENOI LAND WITH BUILDING TOTAL OF RS.22 LAKHS ADVANCE OF RS.3 LAKH ON 30 TH APRIL 97 RS.3 LAKHS ON -9-97 BALANCE WITHIN 4 MONTH AND REGISTRATION COMPLETE (SD/-) M. THANKAMMA ADVANCE DOUBLE STORIED BUILDING RS.48 LAKHS. 3 + 3 + 2 GROUND FLOOR ALREADY TENANT. (8 LAKHS) FIRST FLOOR ONE BALAJI TEXTILES FOR REN T BALANCE 40 LAKHS VACATE 6 MONTHS TIME. 14. APART FROM THIS, BOOKS OF ACCOUNT FOUND DURING THE COURSE OF SEARCH OPERATION IN THE PREMISES OF SHRI B JAGJIVAN CHANDA K DISCLOSES THE PAYMENT OF RS.18,25,000. THESE ARE THE TWO MATERIA L EVIDENCES FOUND DURING THE COURSE OF SEARCH OPERATION. APART FROM THAT THE ASSESSEE, HER HUSBAND SHRI T KRISHNAN NAIR AND HIS SON, SHRI NARA YANAN KUTTY WAS ALSO EXAMINED U/S 132(4) OF THE ACT. THE SALE CONSIDERA TION DISCLOSED IN THE SALE DEED IS ONLY RS.9,30,000. 15. LET US EXAMINE THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. PAGE 65 OF THE SEIZED DOCUMENT A -23 SHOWS THE NAME 13 IT(SS)A NO.151/COCH/2004 OF SHRI B JAGJIVAN CHANDAK, HIS FATHERS NAME AND H IS ADDRESS. IT ALSO SHOWS THAT THE GROUND FLOOR OF THE BUILDING WAS OCC UPIED BY THE PURCHASER. THE FIRST FLOOR APPEARS TO BE UNDER THE OCCUPATION OF VENKITASWRA SHENOI. THE LAND AND BUILDING IS TOTALLY SHOWN AS RS.22 LAK HS. IN THE NEXT LINE IT IS SHOWN AS ADVANCE OF RS.3 LAKHS ON 30 TH APRIL 97. THEN THERE IS A REFERENCE ABOUT RS.3 LAKHS WITHOUT MENTIONING THE D ATE. BUT THE MONTH IS MENTIONED AS 9-97. IT ALSO SAYS THAT THE BALANCE I N 4 MONTH AND REGISTRATION COMPLETE. ON THE BOTTOM OF THE SAME P AGE IT IS WRITTEN AS ADVANCE 3 + 3 + 2 (8 LAKHS) BALANCE 40 LAKHS. AND O N THE RIGHT HAND SIDE OF THAT ENTRY IT IS WRITTEN DOUBLE STORIED BUILDING RS.48 LAKHS. IT ALSO REFERS GROUND FLOOR WAS ALREADY TENANT AND FIRST FLOOR ON E BALAJI TEXTILES FOR RENT. THE ASSESSEE WAS EXAMINED U/S 132(4). NO Q UESTION WAS ASKED ABOUT THE SEIZED DOCUMENT AT PAGE 65 OF THE DOCUMEN T A-23. IN RESPECT OF QUESTION NO.4, THE ASSESSEE EXPLAINED THAT ALL THE MATTERS WERE DEALT WITH BY HER HUSBAND T KRISHNAN NAIR. IN FACT, QUESTION NO.4 AND ANSWER READS AS FOLLOWS: Q.4 HAVE YOU SOLD ANY LANDED PROPERTY OR BUILDING RECENTLY? A. I KNOW THAT ONE TWO STORIED BUILDING AND LAND OF MINE HAS BEEN SOLD TO A TEXTILE DEALER CHANDAK. ALL THESE M ATTERS WERE DEALT WITH BY MY HUSBAND SHRI T. KRISHNAN NAIR . HE ONLY HAS BARGAINED, RECEIVED MONEY AND DEALT WITH I T. AS TOLD BY HIM I.. SIGNATURE KNOWS ABOUT IT. 14 IT(SS)A NO.151/COCH/2004 16. THE ASSESSEES HUSBAND WAS ALSO EXAMINED WITH R ESPECT OF SEIZED DOCUMENT A-23. IN RESPONSE TO QUESTIONS NO.23 TO 2 7, HE STATED AS FOLLOWS: Q.23.I AM SHOWING YOU A BROWN PAPER NUMBERED 61 IN THE BUNCH OF PAPERS FOUND AND NUMBERED AS A-23. WHOSE HANDWRITING IS ON THAT? A. IT IS MINE ONLY. Q.24 WHOSE HANDWRITING IS THERE ON THE PAPER NUMBER ED 62 IN THE SAME PAPER BUNCH? A. DONT KNOW. NOT MINE. Q.25 WHOSE HANDWRITING ON THE PAPER NUMBERED 63? A DONT KNOW. NOT MINE. Q.26 WHOSE HANDWRITING ON THE PAPER MARKED 64? A. DONT KNOW. Q.27 IN WHOSE HANDWRITING THE WRITING IN ENGLISH ON THE PAPER NUMBERED 65. A. THE HAND WRITING ON THOSE ARE NOT FAMILIAR TO M E. I AM NOT THE PERSON WHO WROTE IT. 17. THE ASSESSEES HUSBAND ADMIT THAT PAGE 61 OF TH E SEIZED PAPER A- 23 WAS WRITTEN IN HIS HAND; HOWEVER, THE OTHER PAGE S VIZ. PAGES 62 TO 65 ARE NOT WRITTEN BY HIM. WE ARE CONCERNED WITH ONLY PAGE 65 OF SEIZED PAPER PAGE A-23. NO OTHER QUESTION WAS ASKED WITH REGARD TO SEIZED MATERIAL. IN RESPECT OF QUESTION 33 ABOUT THE SALE CONSIDERATION, THE 15 IT(SS)A NO.151/COCH/2004 ASSESSEES HUSBAND EXPLAINED THAT GROUND FLOOR WAS SOLD FOR RS.4,80,000 AND FIRST FLOOR WAS SOLD FOR RS.4,50,000 TOTALLING RS.9,30,000 AND HE DENIED THE SUGGESTION MADE BY THE REVENUE FOR RECEIPT OF M ORE MONEY OVER AND ABOVE THE SALE CONSIDERATION. THE ASSESSEES HUSBA ND FURTHER ADMITTED THAT THE PAYMENT OF RS.9,30,000 WAS RECEIVED ONLY B Y CHEQUE. THE ASSESSEES SON SHRI NARAYANAN KUTTY WAS ALSO EXAMIN ED. THE DEPARTMENT COULD NOT ESTABLISH THAT THE SEIZED MATE RIAL MORE PARTICULARLY PAGES 62 TO 65 WAS WRITTEN EITHER BY THE ASSESSEE O R HER HUSBAND OR HER SON. IN THE ABSENCE OF ANY EVIDENCE WITH REGARDING TO HAND WRITING OF THE SEIZED MATERIAL, CAN WE PLACE MUCH RELIANCE ON THE SEIZED MATERIALS PAGES 62 TO 65? FROM THE ASSESSMENT ORDER IT APPEARS THA T THE LOOSE SHEETS WERE FOUND FROM THE RESIDENCE OF THE ASSESSEE. THE SE LOOSE SHEETS, MORE PARTICULARLY PAGE 65 REFERS TO THE PROPERTY SOLD BY THE ASSESSEE. THEREFORE, BY MERELY SAYING THAT SHE DOES NOT KNOW IN WHOSE HANDWRITING IT IS WRITTEN, THE ASSESSEE CANNOT IGNORE THE RESPO NSIBILITY ESPECIALLY WHEN THE SEIZED MATERIAL REFERS TO THE PROPERTY SOLD BY HER. 18. WE HAVE CAREFULLY GONE THROUGH THE XEROX COPY O F PAGE 65 OF SEIZED DOCUMENT A-23. ON A PERUSAL OF THE XEROX COPY OF P AGE 65 IT REVEALS THAT THE UPPER PORTION OF PAGE 65, IS WRITTEN BY ONE PER SON AND THE LOWER PORTION WAS WRITTEN BY SOME OTHER PERSON. THE DIFF ERENCE IN HANDWRITING IS OBVIOUS EVEN TO THE NAKED EYE. THEREFORE, CONTENTS WRITTEN AT THE BOTTOM 16 IT(SS)A NO.151/COCH/2004 OF PAGE 65 HAS TO BE IGNORED. THE FIRST PORTION SH OWS THAT THE GROUND FLOOR WAS OCCUPIED BY THE PURCHASER. THEREFORE, THE PURC HASER MAY BE A TENANT AT THAT POINT OF TIME. THE REVENUE COULD HAVE CLAR IFIED THE SAME WHILE EXAMINING THE ASSESSEE OR HER HUSBAND. IT IS NOT K NOWN HOW THE PURCHASER COULD OCCUPY A BUILDING BEFORE COMPLETION OF THE SALE DEED. THE ONLY POSSIBILITY IS THAT THE PURCHASER MAY BE A TEN ANT. THEREFORE, THE REFERENCE ABOUT PAYMENT OF ADVANCE OF RS.3 LAKHS ON 30-04-2007 MAY BE FOR LEASING OUT THE PROPERTY. THIS IS ONE OF THE P OSSIBLE INTERPRETATION ONE COULD MAKE FROM THE SEIZED MATERIAL. IF WE GO LITT LE FURTHER ON PAGE 65, AFTER ADVANCE OF RS.3 LAKHS ON 30-04-2007 IT IS ALS O MENTIONED RS.3 LAKHS WITHOUT MENTIONING THE DATE IN THE MONTH OF SEPTEMB ER, 1997. FURTHER, IT SAYS THE BALANCE IS TO BE PAID IN 4 MONTHS. A HARM ONIOUS READING OF PAGE 65 AT THE UPPER PORTION WITH REGARD TO BALANCE IN 4 MONTHS AND REGISTRATION COMPLETE GIVES AN IMPRESSION THAT THE TOTAL CONSID ERATION RS.22 LAKHS. IF THE TOTAL CONSIDERATION IS RS.48 LAKHS AS CLAIMED B Y THE DEPARTMENT, THE ASSESSEE WOULD NOT HAVE STATED TOTAL RS.22 LAKHS IN THE UPPER PORTION OF PAGE 65. MOREOVER, THE SEIZED MATERIAL PAGE 65 SHO ULD BE TAKEN IN ITS ENTIRETY OR IT SHOULD BE REJECTED IN ITS ENTIRETY. THE REVENUE CANNOT TAKE PART OF THE INFORMATION FOR DETERMINING THE SALE CO NSIDERATION. SINCE THE UPPER PORTION OF PAGE 65 WRITTEN BY ONE PERSON AND THE LOWER PORTION WAS WRITTEN BY SOME OTHER PORTION, IT CREATES A DOUBT / SUSPICION ABOUT THE 17 IT(SS)A NO.151/COCH/2004 GENUINENESS OF THE CONTENTS. MOREOVER, THE EVIDENC E FOUND IN THE PREMISES OF THE PURCHASER SHOWS THE PAYMENT OF RS.1 8,25,000 ONLY. 19. NOW COMING TO THE MATERIAL FOUND IN THE RESIDEN CE OF SHRI B JAGJEEVAN CHANDAK, THE BOOKS OF ACCOUNT SHOW THE PA YMENT OF ONLY RS.18,25,000. THERE IS NO MATERIAL AVAILABLE ON RE CORD TO SUGGEST THAT ANY OTHER PAYMENT HAS BEEN MADE. THEREFORE, THERE WAS A CONFUSION WHETHER THE SALE CONSIDERATION IS RS.18,25,000 AS FOUND IN THE BOOKS OF ACCOUNT OF THE PURCHASER SHRI B JAGJEEVAN CHANDAK OR RS.22 LAK HS AS FOUND IN THE SEIZED MATERIAL MORE PARTICULARLY THE UPPER PORTION OF PAGE 65 OF DOCUMENT A-23. THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE SEIZED MATERIAL FOUND IN THE COURSE OF SEARCH AT THE RESIDENTIAL PR EMISES OF THE ASSESSEE DOES NOT INSPIRE CONFIDENCE, SINCE THE SAME IS WRIT TEN IN TWO DIFFERENT HAND WRITINGS AND ALSO SHOWS TWO FIGURES I.E. RS.22 LAKH S AND RS.48 LAKHS AS CONSIDERATION. THEREFORE, AS OBSERVED EARLIER, PAG E 65 OF THE SEIZED DOCUMENT A-23 HAS TO BE IGNORED. TO THE EXTENT OF PAYMENT OF RS.18,25,000 THERE IS AN EVIDENCE FOUND IN THE PREM ISES OF SHRI B JAGJEEVAN CHANDAK. THOUGH THE PURCHASER CLAIMS THA T THE PAYMENT WAS MADE FOR PURCHASE OF GOODS, THE SAID CLAIM COULD NO T BE SUBSTANTIATED BY PRODUCING THE PURCHASE BILLS AND DETAILS OF GOODS P URCHASED FROM SHRI T KRISHNAN NAIR. THE FIRST ENTRY MADE ON 03-09-1997 SHOWS THAT SHRI T KRISHNAN NAIR ACCOUNT P.O. LINK ROAD, ERNAKULAM. T HEREFORE, IT IS OBVIOUS 18 IT(SS)A NO.151/COCH/2004 THAT THE PAYMENT IS MADE FOR PURCHASE OF THE PROPER TY NOW IN QUESTION. IN THE ABSENCE OF ANY OTHER MATERIAL FOR PAYMENT OR RE CEIPT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE SALE CONSIDERATION OF THE SAID PROPERTY IS RS.18,25,000. SINCE RS.9,30,000 WAS ALREADY DISCLO SED, THE DIFFERENCE BETWEEN THE AMOUNT DISCLOSED AND THE AMOUNT DETERMI NED COMES TO RS.8,95,000. THEREFORE, THE UNDISCLOSED SALE CONSI DERATION RECEIVED BY THE ASSESSEE IS RS.8,95,000. 21. NOW COMING TO THE VALUATION MADE BY THE ASSESSE E AS DISCLOSED IN THE WEALTH-TAX RETURNS AND THE VALUE ESTIMATED BY T HE VALUATION OFFICER AT RS.32,60,500 THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT WHILE FILING THE WEALTH-TAX RETURN, THE ASSESSEE HAS TO ESTIMATE THE MARKET VALUE OF THE PROPERTY AS ON THE DATE OF VALUATION ON ESTIMATE BA SIS. AN ESTIMATE WILL ALWAYS REMAIN AS AN ESTIMATE. THE MARKET RATE IS N OT A STATIC FIGURE. IT MAY FLUCTUATE DEPENDING UPON VARIOUS CIRCUMSTANCES. AS HELD BY THE APEX COURT IN VARIOUS CASESS, THE MARKET RATE IS NO THING BUT AN AGREED PRICE BETWEEN A WILLING PURCHASER AND A WILLING SEL LER. MOREOVER, IN ASSESSMENT U/S 158BC, THE COMPUTATION OF UNDISCLOSE D INCOME HAS TO BE MADE ON THE BASIS OF THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, THE ASSESSING OFFICER HAS TO CONFINE HIMSELF ONLY TO THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPER ATION. THE WEALTH-TAX RETURN AND THE ESTIMATE MADE BY THE VALUATION OFFIC ER CANNOT FORM PART OF 19 IT(SS)A NO.151/COCH/2004 THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPER ATION. THE WEALTH-TAX RETURN AND THE ESTIMATION MADE BY THE VALUATION OFF ICER CANNOT BE SUBSTITUTED OR REPLACED WITH THE SEIZED MATERIAL. THE VALUE ESTIMATED BY THE ASSESSEE IN THE WEALTH-TAX RETURN OR THE VALUAT ION OFFICER ON THE REFERENCE OF THE ASSESSING OFFICER CANNOT BE A BASI S FOR DETERMINING THE SALE CONSIDERATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE WEALTH-TAX RETURN AND THE REPORT OF T HE VALUATION OFFICER DOES NOT FORM PART OF THE EVIDENCE FOUND DURING THE COUR SE OF SEARCH OPERATION, THE SAME CANNOT BE TAKEN AS EVIDENCE FOR THE PURPOS E OF COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. MOREOVER, FOR THE PURPOSE OF COMPUTING UNDISCLOSED INCOME CONCRETE EVIDENCE IS R EQUIRED IN THE FORM OF MATERIAL EVIDENCE OR ORAL EVIDENCE. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE AMOUNT WAS EITHER PAID OR RECEIVED, THERE CANNOT BE ANY ADDITION ON ESTIMATE BASIS ON THE BASIS OF THE VALUATION REP ORT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE VALU ATION REPORT AND THE VALUE SHOWN IN THE WEALTH-TAX RETURN MAY NOT HAVE MUCH RE LEVANCE FOR THE PURPOSE OF DETERMINING THE SALE CONSIDERATION SAID TO BE RECEIVED BY THE ASSESSEE. 22. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE SALE CONSIDERATION SHALL BE FIXED AT RS.18,25,000. SINCE 20 IT(SS)A NO.151/COCH/2004 THE ASSESSEE HAS ALREADY DISCLOSED RS.9,30,000 THE ASSESSING OFFICER SHALL TAKE THE UNDISCLOSED RECEIPT AT RS.8,95,000. 23. IN THE RESULT, THE ORDER OF THE LOWER AUTHORITI ES ARE MODIFIED TO THE EXTENT OF FIXING THE UNDISCLOSED SALE CONSIDERATION AS SALE OF 4 CENTS OF LAND TOGETHER WITH TWO STOREYED BUILDING AT RS.8,95 ,000. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH NOVEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 14 TH NOVEMBER, 2014 PK/- COPY TO: 1. SMT. M THAMKAMMA, 40/7634, LAKSHMI VIHAR, DORAIS WAMI IYER ROAD, COCHIN-35 2. THE ACIT, INVESTIGATION CIR-2, DIVISIN-2, ERNAKU LAM 3. THE COMMISSIONER OF INCOME-TAX, COCHIN 4. THE COMMISSIONER OF INCOME-TAX(A)-II, CALICUT 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH