DCIT Central-2,Bhopal, Bhopal V. Smt Kiran Agarwal, Bhopal

ITSSA 69/Ind/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5300 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Business income; Opportunity of cross examination; Period of limitation; Set aside
• Section: 131; 132; 56(2)(vii)(b); 43CA; 92; 50C; 153A; 69B; 143(2); 2(A)

Judgement Text

Kiran Agrawal (SS) 69 of 2020 1 अपीलȣय अͬधकरण, इÛदौर Ûयायपीठ, इÛदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER (Virtual hearing) IT(SS)A No.69/Ind/2020 Assessment Year: 2010-11 DCIT, Central-II, Bhopal ... Appellant Vs. Smt. Kiran Agrawal, Bhopal PAN – AASPA 9452 C ... Respondent Revenue by Shri P.K. Mitra, CIT-DR Assessee by Shri S.S. Deshpande, CA Date of Hearing 25.11.2021 Date of Pronouncement 25.01.2022 O R D E R PER MANISH BORAD, A.M The above captioned appeal filed at the instance of the Revenue is directed against the orders of Ld. Commissioner of Income Tax(Appeals)-3, Bhopal [in short Ld. CIT(A)] dated 13.2.2020, which is arising out of the assessment order dated 22.2.2014, framed by DCIT-Central, Bhopal. This appeal was filed on 24.6.2020 and Registry has informed that this appeal is time-barred by 50 days. Ld. CIT-DR submitted that due to current pandemic, the delay occurred which may be condoned in view of guidelines of Govt. of India and Hon’ble Supreme Court. Kiran Agrawal (SS) 69 of 2020 2 On the other hand, ld. Counsel for assessee submitted that delay should not be condoned. We find that vide Gazette “CG-DL-E- 29092020-222110 No.63 New Delhi, 29/2020 issued by Secretary to Govt. of India, it has been directed that in computing the period of limitation for any appeal, the period for 20.3.2020 till 31.12.2020 or 31.3.202, as the case may be, shall stand excluded. Further, the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 dated 08.3.2021 has issued directions that in computing the period of limitation for any suit/appeal, the period for 15.3.2020 till 14.3.2021 shall stand excluded. Considering the same, we condone the delay in filing the departmental appeal and admit the same for hearing. The Revenue has raised the following grounds of appeal: “1. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.8,74,000/- made by the Assessing Officer on account of undisclosed on-money payment. 2. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.2,60,000/- made by the Assessing Officer on account of undisclosed on-money payment. 3. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.10,00,000/- made by the Assessing Officer on account of undisclosed on-money payment. 4. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.25,60,000/- made by the Assessing Officer on account of undisclosed on-money payment. 5. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.28,26,000/- made by the Assessing Officer on account of undisclosed on-money payment. 6. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.50,00,000/- made by the Assessing Officer on account of undisclosed on-money payment. 7. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.44,25,000/- made by the Assessing Officer on account of undisclosed on-money payment. 8. On the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition of Rs.22,25,000/- made by the Assessing Officer on account of undisclosed on-money payment.” Kiran Agrawal (SS) 69 of 2020 3 2. Facts as culled out from the orders of the Revenue Authorities are that the assessee is an Individual and having source of income as salary and business income. In this case, search and seizure operation u/s 132 of the Income Tax Act, 1961 was carried out at the various premises of Sagar Group and its business associates. Consequently, notice u/s 153A of the IT Act, 1961 was issued on 09.10.2012. In response to the above notice, the assessee filed return of income. The AO made the addition of Rs.1,91,70,000/- [Rs.8,74,000/-, Rs. 2,60,000/-, Rs. 10,00,000/-, Rs. 25,60,000/-, Rs. 28,26,000/-, Rs. 50,00,000/-, Rs. 44,25,000/- and Rs. 22,25,000/-] in A.Y. 2010-11 on account of alleged undisclosed on-money payments. 3. Being aggrieved, the assessee approached the ld. CIT(A) and the ld. CIT(A) deleted these additions considering the facts, submissions thereof in the light of the relevant judicial precedents. 4. Being aggrieved, the Revenue is in appeals. Ld. CIT-DR relied upon the orders of the Assessing Officer whereas learned Counsel for the assessee submitted that no addition can be made in the non-abated assessment without finding any incriminating Kiran Agrawal (SS) 69 of 2020 4 material as the Assessing Officer failed to bring on record any paper or document which show any on-money payment. The statements of the sellers were recorded after the conclusion of the search and the Assessing Officer merely relied on these statements without making any inquiry, therefore, the Ld. CIT(A) was right in holding that without finding any incriminating material no addition can be made in the assessment. Further, no opportunity of cross examination was provided to the assessee. In the absence of the opportunity of cross examination the statements cannot be relied for making any addition. There is no proof on record about the utilization of the alleged on-money received by the seller. No attempt has been made to investigate such an investment, if any and DDIT has no jurisdiction to record a statement after the conclusion of the search. Such a statement is bad in law and cannot be used for making any addition as documentary evidence is required to be followed instead of oral evidence. The documentary evidence is conclusive. Thus, learned Counsel for the assessee submitted that since the assessee has explained her case from all the sides, the ld. CIT(A) was right in deleting the additions. Kiran Agrawal (SS) 69 of 2020 5 5. We have considered the rival submissions of both the parties and gone through the material available on the file. During the course of search and seizure operation at the premises at E-2/4, Arera colony, Bhopal, the following registered sale deeds were found and seized. The brief details of the registered sale added are as under:- S.No Details of seized papers Name seller Details of land Date of purchase Registered amount 1 10 to 23 of LPS-13 Shri Awdhesh Kumar Sharma Khasara No 299, 302 & 303 at gram Jhagariya Khurad, Huzur, Bhopal total area 1.11 hectare 17.07.2009 826000 2 181 to 186 of LPS-3 Smt Ramkali Bai 0.95 acre located at Gram-Samariya Khurd, distt. Dewas. 03.10.2009 390000 3 - - Khasra No. 297, 298 total area 1.117 hectare located at Gram- Jhagariya Khurd, Patwari Halka No. 18/24, Tehsil-Huzur, distt. Bhopal. 17.07.2009 1197000 4 - Shri Kareem Khan, Shri Kallu Khan & Shri Waseem Khan 1.37 hectare, Gram- Sikandarbad, Patwari Halka No.-32, RI Mandal-4, Tehsil- Huzur, Distt. Bhopal in the name of Shri Kareem Khan, Shri Kallu Khan and Shri 16.01.2008 1000000 Kiran Agrawal (SS) 69 of 2020 6 Waseem Khan 5 - Shri Kareem Khan, Shri Kallu Khan & Shri Waseem Khan 0.45 hectare, Gram- Sikandarbad, Patwari Halka No.-32, RI Mandal-4, Tehsil- Huzur, Distt. Bhopal in the name of Shri Waseem Khan 20.02.2008 500000 6 - Shri Kareem Khan, Shri Kallu Khan & Shri Waseem Khan 1.21 hectare, Gram- Sikandarbad, Patwari Halka No.-32, RI Mandal-4, Tehsil- Huzur, Distt. Bhopal in the name of Shri Waseem Khan 18.03.2008 700000 7 - Shri Laxminarayan 2.67 Hectare land, bearing Kh.No. 309, 315/1, 318/2, 318/4 located at Gram- Jhagariya Khurd, Patwari Halka No. 18/24, vikas khand- Fanda, Teh-Huzoor, Dist.-Bhopal 18.12.2009 2724000 8 - Shri Laxminarayan 0.809 Hectare land, bearing Kh.No. 218/2 located at Gram- Jhagariya Khurd, Patwari Halka No. 18/24, vikas khand- Fanda, Teh-Huzoor, Dist.-Bhopal 26.09.2009 825000 9 - Shri Lala Ram Land at Jhagariya Khurd 2.250 Hectre 14.10.2009 2295000 10 - Shri Panmal Sahu Land at Jhagariya Khurd 1.440 Hectre 08.06.2009 1470000 Kiran Agrawal (SS) 69 of 2020 7 11 - Shri Arun Mishra 2.67 hectare land located at Gram- Jhagariya Khurd, P.H.No. 18/24, Tehsil- Huzur, Distt.-Bhopal 06.07.2008 2725000 12 - Smt Padma Rani Khanna Khasra No. 72,73,171/72/5/1/1/2 total area 0.60 acre located at Gram- Jatkhedi, Patwari Halka No. 42,, Vikaskhand- Fanda, Th.- Huzur, Dist- Bhopal. 03.10.2009 700000 The assessee, during the course of appellate proceedings, submitted that search at various premises of Sagar Group was conducted on 21.10.2011 and during the search various registered deeds were found relating to assessee company. During the post search enquiry, summons u/s 131 of the Act were issued to sellers by DDIT (Inv), Bhopal and statements of sellers were recorded. The assessee also submitted that no opportunity of cross examination was given by the AO and all the additions were made on assumption and presumption basis. However, the Assessing Officer made additions relying to the statement given by sellers before DDIT (Inv)-I, Bhopal and on the basis of difference in registered value and market value of the land. We find that the ld. CIT(A) decided the matter as under: Kiran Agrawal (SS) 69 of 2020 8 “4.2.2 I have considered the facts of the case, written submissions filed by the appellant and findings of the AO. This is an undisputed facts that during the course of search at premises of Sagar Group of Bhopal, various registered sale deeds of lands purchased by the appellant were found and seized. The Ld AR has vehemently challenged the arbitrary approach of the AO mainly on four major Counts: (a) The AO erred in making additions simply the basis of statements of sellers; (b) The AO erred in making additions on the basis of statement of sellers and without providing opportunity of cross examination before making such additions; (c) The AO erred in making additions on the basis of oral evidences; (d) The AO erred in making additions on assumption and presumption basis and without having any incriminating material on record; (a) Additions made on the basis of statement of sellers:- This is an admitted fact that statements of sellers were recorded by DDIT(Inv), Bhopal and not by the AO. Now, let me discuss each and every point in detail regarding the findings of the AO and plea raised by the appellant. The brief details of statement of sellers recorded by DDIT(Inv), Bhopal and my findings are as under:- (i) Shri Awdhesh Kumar Sharma (Addition of Rs. 8,74,000/-) :- Appellant during the AY 2010-11 has purchased land admeasuring 1.11 hectare from Shri Awdhesh Kumar Sharma s/o Shri Ramnarayan ( through POA Shri Vishnu Vishwakarma), located at Khasra No. 299, 302 and 303 total area 1.11 hectare located at Gram-Jhagariya Khurd, Patwari Halka No. 18/24, Tehsil-Huzur, distt. Bhopal for a total sale consideration of Rs. 8,26,000/- on 17.07.2009. Statement of Shri Awdhesh Kumar Sharma was recorded by DDIT(Inv) on 24.11.2011. Shri Awdhesh Sharma in reply to question no 9 stated that he has received sum of Rs. 8,74,000/- in cash which was distributed by Mr. Vishnu Vishwakarma to farmers and Rs. 8,26,000/- was received through cheque. Appellant has strongly contended that Shri Vishnu Vishwakarma has paid sum of Rs. 8,74,000/- directly to the farmers and not the appellant. Further, it was never stated that the cash was received from appellant. Also, the utilization of cash has not been explained by Shri Awdhesh Sharma. The AO did not make any independent enquiry and has solely relied upon the statement of the sellers without having any cogent evidence on record having direct nexus of impunged on money payment. (ii) Shri Roopram Gurjar (Addition of Rs. 2,60,000/-) :- Appellant during the AY 2010-11 has purchased land admeasuring 0.95 acre bearing khasara No 299, 302 & 303 from Smt Ramkali Bai at village Jhagaria Khurad, patwari halka no 18/24, Tehsil Huzur, Bhopal for a total sale consideration of Rs. 3,90,000/- on 03.10.2009. Statement of Shri Roop Ram Gurjar was recorded by DDIT(Inv), Bhopal. Shri Roop Ram Gurjar in reply to question no 9 stated that a sum of Rs. 6,50,000/- was received from Sagar Group out of which sum of Rs. 2,60,000/- was received in cash. Appellant has Kiran Agrawal (SS) 69 of 2020 9 strongly contended that Shri Roop Ram Gurjar never stated that the said amount received in cash was from appellant. Further, Smt Ramkali Bai is the actual seller, therefore, statement of the seller ought to have been recorded. Smt Ramkali Bai before the Registrar has accepted that the impunged land has been sold for Rs. 3,90,000/- and in his statement before the DDIT(Inv) he stated that cash was also received which is not included in the registered sale deed. Further, statement of the actual seller should have been recorded by the AO and an opportunity of cross examination should also have been provided to the appellant before making any addition to the income of the appellant. Further, in reply to question no 9 Shri Roop Ram Gurjar has stated that the received cash was utilized for purchase of agricultural land at village Lingapani in July 2009. It is important to mention that the sale was executed in the month of October 2009, however, the agricultural land was purchased in July 2009 which shows that either the facts of the case have been manipulated or Shri Roop Ram Gurjar made a false statement before the DDIT. Further, the AO did not make any independent enquiry and has solely relied upon the statement of the third party without having any cogent evidence on record having direct nexus of impunged on money payment. (iii) Shri Premnarayan Vishwakarma (Addition of Rs. 10,00,000/-):- Appellant during the AY 2010-11 has purchased land admeasuring 1.117 hectare from Shri Premnarayan Vishwakarma & Shri Raghuveer Meena at village Jhagaria Khurad, patwari halka no 18/24, Huzur, Bhopal for a total sale consideration of Rs. 11,97,000/- on 17.07.2009. Statement of Shri Premnarayan Vishwakarma was only recorded by DDIT(Inv), Bhopal. Shri Premnarayan Vishwakarma in reply to question no 9 stated that he has received sum of Rs. 5,98,000/- through cheque and Rs. 5,00,000/- in cash. However, the AO has made addition of Rs. 10,00,000/- on account of on- money payment by the appellant. The appellant has strongly contended that statement of co-partner was never recorded and the AO has made addition on presumption basis. Also, the seller before the Registrar has accepted that sum of Rs. 5,98,500/- was received against sale of land which is in contradiction to the statement given before the DDIT. Shri Premnarayan Vishwakarma Devendra before DDIT stated that sum of Rs. 5,00,000/- was received in cash, however, failed to file any evidence for utilization of cash. Further, the AO without taking any statement of Shri Raghuveer Meena made addition of Rs. 5,00,000/- on presumption basis assuming that appellant has also paid sum of Rs. 5,00,000/- to him. Further, the AO did not make any independent enquiry and has solely relied upon the statement of only one seller without having any cogent evidence on record having direct nexus of impunged on money payment. (iv) Shri Kareem Khan, Shri Kallu Khan and Shri Waseem Khan (Addition of Rs. 25,60,000/-) :- Appellant during the AY 2010-11 has purchased three lands admeasuring 1.37 hectare, 0.45 hecatre and 1.21 hectare from Shri Kareem Khan, Shri Kallu Kiran Agrawal (SS) 69 of 2020 10 Khan and Shri Waseem Khan at village Sikandarbad, Patwari Halka No 32, RI Mandal-4, Huzur, Bhopal for a total sale consideration of Rs. 10,00,000/- on 16.01.2008, Rs. 5,00,000/- on 20.02.2008 and Rs. 7,00,0000/- on 18.03.2008 respectively. Statement of Shri Kareem Khan, Shri Kallu Khan and Shri Waseem Khan were recorded on 18.02.2012. In statement the sellers admitted that they received total consideration of Rs. 47,60,000/-, however, registry was made for Rs. 22,00,000/-. The sum of Rs. 22,00,000/- was paid through cheque and balance amount was paid in cash. The cash was utilized for purchasing additional land in Sehore district; however, no proof of utilization of cash has been submitted by the seller neither before the AO nor before me. Further, the sellers before the Registrar has admitted that they received sum of Rs. 22,00,000/- only which is in contradiction with the statement given before the DDIT. Therefore, the sellers has made a false comment either before the Registrar or before the DDIT(Inv). Further, the AO did not make any independent enquiry and has solely relied upon the statement of the sellers without having any cogent evidence on record having direct nexus of impunged on money payment. (v) Shri Laxmi Narayan (Addition of Rs. 28,26,000/-) :- Appellant during the AY 2010-11 has purchased land admeasuring 2.67 hecatre on 18.12.2009 for consideration of Rs. 27,24,000/- and 0.809 hectare on 26.09.2009 for consideration of Rs. 8,25,000/- at village Jhagariya Khurd, Fanda, Huzur, Bhopal. Statement of Shri Laxminarayan s/o Shri Amarsingh was recorded by DDIT(Inv), Bhopal on 06.01.2012. Shri Laxminarayan in reply to question no 9 stated that he has received sum of Rs. 28,26,000/- in cash over and above registered value received through cheque. Shri Laxminarayan also stated that the cash was utilized for purchase of other land at Bawadiya Khurd, however, no details has been filed either before the AO or before me. Appellant has strongly contended that Shri Laxminarayan in his statement has stated that both the lands were purchased on same date, however, as per registered sale deed both the lands were purchased on different dates. Further, Shri Laxminarayan stated that he has received sum of Rs. 7,90,000/- and Rs. 27,24,000/- against sale of lands, however, payments were made of Rs. 8,25,000/- & Rs. 27,24,000/-. Further, Shri Laxminarayan before the Registrar has admitted that they received sum of Rs. 8,25,000/- & Rs. 27,24,000/- only which is in contradiction with the statement given before the DDIT. Therefore, the seller made a false comment either before the Registrar or before the DDIT(Inv). Further, the AO did not make any independent enquiry and has solely relied upon the statement of the sellers without having any cogent evidence on record having direct nexus of impunged on money payment. (vi) Shri Vishnu Vishwakarma (Addition of Rs. 50,00,000/-) :- Appellant during the AY 2010-11 has purchased land admeasuring 2.25 hecatre on 14.10.2009 for consideration of Rs. 22,95,000/- and 1.44 hectare on 08.06.2009 for consideration of Rs. 14,70,000/- at village Jhagariya Khurd, Fanda, Huzur, Bhopal from Shri Lala Ram and Shri Panmal Sahu through Kiran Agrawal (SS) 69 of 2020 11 POA Shri Vishnu Vishwakarma. Statement of Shri Vishnu Vishwakarma was recorded by DDIT(Inv), Bhopal on 22.12.2011. Shri Vishnu Vishwakarma in reply to question no 10 & 11 stated that he has sold lands to Agrawal Builders and received sum of Rs. 50,00,000/- in cash over and above registered value received through cheque. Shri Vishnu Vishwakarma also stated that the cash was utilized for purchase of other land, however, no details has been filed either before the AO or before me. Appellant has strongly contended that Shri Vishnu Vishwakarma is PAO holder to execute sale deed and legally not authorized to collect sale consideration. Shri Vishnu Vishwakarma in his statement has stated that both the lands were sold to Agrawal Builders, however, he never stated that the lands were sold to appellant. Therefore, the AO has presumed that lands were sold to appellant and the addition was made on presuming Agrawal Builders as appellant. Further, the AO did not make any independent enquiry and has solely relied upon the statement of the POA holder and not the impunged seller who is the actual beneficiary of the sale consideration. The AO does not have any cogent evidence on record having direct nexus of impunged on money payment. (vii) Shri Arun Mishra (Addition of Rs. 44,25,000/-) :- Appellant during the AY 2010-11 has purchased land admeasuring 2.67 hecatre on 06.07.2008 for consideration of Rs. 27,25,000/- at village Chhan, Huzur, Bhopal from Shri Sitaram Rajpoort through POA holder Shri Arun Mishra. Statement of Shri Arun Mishra was recorded on oath by DDIT(Inv), Bhopal on 23.12.2011. Shri Arun Mishra in reply to question no 9 stated that the land of Shri Sitaram Rajpoort was sold through him to appellant on 06.07.2008 and received sum of Rs. 27,25,000/- was received through cheque. The amount received through cheque was transferred to Shri Sitaram Rajpoot and he is not aware of receipt of cash of Rs. 44,25,000/- by Shri Sitaram Rajpoot. Thus, it is very clear that neither the seller nor the POA holder has admitted receipt of cash from appellant. Further, the AO did not make any independent enquiry and has solely relied upon the statement of the POA holder and not the impunged seller who is the actual beneficiary of the sale consideration. The AO does not have any cogent evidence on record having direct nexus of impunged on money payment. (viii) Further, during AY 2010-11 appellant purchased land admeasuring 0.60 acre from Smt Padma Rani Khanna at village Jatkhedi, Patwari Halka No 42, Vikaskhand-Fanda, Huzur, Bhopal for a total sale consideration of Rs. 7,00,000/- on 03.10.2009. The market value of the said land was Rs. 29,25,000/-. The AO required assessee to show cause as to why the difference in market value and registered value should not be added to the total income. The assessee in reply submitted that the said land has been purchased for Rs. 7,00,000/- only. Hon’ble Supreme Court in the case of CIT v/s KP Varghese 131 ITR 574 (SC) has held that in absence of evidence that actually assessee paid more amount than declared in registered deed, no addition can be made. In the case of Bansal Strips (P) Ltd & Ors Vs. ACIT (2006) 99 ITD 177 (Del) it has been held that :- Kiran Agrawal (SS) 69 of 2020 12 “If an income not admitted by assessee is to be assessed in the hands of the assessee, the burden to establish the such income is chargeable to tax is on the AO. In the absence of adequate material as to nature and ownership of the transactions, undisclosed income cannot be assessed in the hands of the assessee merely by arithmetically totally various figures jotted down on loosed document”. Hon’ble MP High Court in the case of Krishna Kumar Rawat vs UOI & others (1994) 214 ITR 610 has held that the market rates for the purpose of registration of an immovable property as notified by the sub registrar can also have no application for determining the market value under Chapter XXC of the Act. It is limited only for payment of the stamp duty. The AO has simply presumed that village Jatkhedi is a prime area of tehsil Huzur, Bhopal and the rates of land are very high. It is settled legal pronouncement that presumption how strong may cannot take place of evidence. Hon’ble ITAT Ahmedabad in the case of Vallabhbhai Purshottambhai Surani 54 SOT 556 (ITAT Ahmedabad) has held as under:- “Section 69B is deeming fiction which provides that addition can be made by AO when conditions mentioned therein are satisfied. AO failed to bring on record any material to support his estimated price. Section 50C is deeming provision where under stamp duty rate is treated as full value of consideration for purpose of computing capital gain u/s 48. It is applicable in case of seller of property and therefore cannot be invoked in case of purchaser of property for purpose of Section 69B. AO has not made any independent enquiry or collected corroborative evidence to justify addition. AO failed to bring on record any material to support his estimated rates. Therefore, relying on decisions of High Courts and of co-ordinate Bench, no addition can be made. Order of CIT(A) is upheld. Appeal dismissed.” Without prejudice to the above, the differential amount between value as per registered purchase deed vis-a-vis guideline value determined by Stamp Valuation Authority is not taxable under any provision of the Act as applicable under “deeming fiction” enshrined u/s 50C of the Act as applicable in the case of sellers. Thus, differential amount per se cannot be brought to tax under provision of IT Act in the hands of purchasers in absence of charging deeming provision in the Act. Hon’ble Supreme Court in the case of CIT v/s Mother India Refrigeration Industries Pvt Ltd (1985) 4 SCC 1 has held that statutory fiction must be limited strictly to the purpose for which it is introduced. So, the “deeming fiction” enshrined in sec 50C cannot be extended to the case of buyers. This is an undisputed fact that the property have been purchased in F.Y 2009-10 (A.Y 2011-12) and at the relevant time, there was no deeming provision in the statute to make the buyers liable to pay tax as per guideline Kiran Agrawal (SS) 69 of 2020 13 value of property as applicable in the case of sellers u/s 50C of the Act. This is pertinent to mention that purchasers [Individual & HUF] have been made liable to pay tax on differential amount i.e. as per stamp valuation vis-à-vis shown in purchase deed w.e.f. 01.04.2014 i.e. A.Y. 2014-15 by making necessary amendments in section 43CA and 56(2)(vii)(b) of the Act. Obviously, because the said transaction had taken place before 01.04.2014, assessee’s case is not hit by the said provisions. Section 43CA and 50C are applicable in the case of the seller of an immovable property whereas section 56(2)(vii)(b) is applicable to purchasers of immovable property viz. individual/ HUF and not to other assessees. In order to plug this loophole, scope of said provision was expanded by inserting a new section 56(2)(x) by Finance Act 2017 w.e.f 01.04.2017 thereby including all categories of assessees so that the assets received without or inadequate consideration may be brought to tax. The said provision is not even applicable in instant case and even otherwise provision of section 56(2)(vii)(b) is applicable w.e.f. A.Y. 2014-15 only. Hon’ble ITAT, Chandigarh Bench in the case of ITO v/s Mrs. Inderjit Kour (2012) 50 SOT 377 (Chd) has held that deeming fiction created u/s 50C regarding full value of consideration received or accrued to seller, cannot be extended to the provisions of section 69, in the case of purchasers. Such statutory legal fiction cannot be extended, to make in the purchasers liable to tax, in the context of undisclosed investment u/s 69 of the Act. It has been held that legal fictions created for a definite purpose should be limited for that purpose and cannot be extended beyond their legislative needs. It is well- settled that deeming provision creating legal fictions, specially in taxing statute have to be strictly construed. (b) No opportunity of cross examination given:- Statement of sellers were recorded by DDIT(Inv), Bhopal who is not the authorized authority to issue summons u/s 131 of the Act. Nevertheless, statements of sellers were recorded and subsequently additions were made to the total income of the appellant without providing any oppotyunity of cross examination either by the DDIT(Inv), Bhopal or by the AO. Appellant during appellate proceedings has strongly contended that no opportunity of cross examination was given by the AO. I find force in the contentions of the appellant that no proper and meaningful opportunity of cross examination was provided to the appellant. This is also an admitted fact that statement of sellers/POA holders were recorded behind the back of the appellant. No opportunity of cross-examination was ever allowed to the assessee. This has been held by the Hon’ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise Kolkata in Civil Appeal No.248 of 2006 that in absence of cross-examination of parties, the assessment proceedings to be quashed. Further, the Hon’ble Gujarat High Court in the case of Praful Chunilal Patel Vs. M.J. Makwana [236 ITR 832 (Guj)] and JCIT & Ors. Vs. George Willimson (Assam) Ltd. [258 ITR 126 (Guj)] has held that statement of third party cannot be relied upon without having any corroborative evidence. Similarly, Hon’ble Supreme Court in the case of Kishanchand Chellaram V/s. CIT 125 ITR 713 (SC) has held that adverse inference cannot be drawn against the assessee from the statement of third parties. Similarly, Ld. AR of the assessee has relied upon the decision of Kiran Agrawal (SS) 69 of 2020 14 jurisdictional High Court in the case of CIT V/s. Indrajit Singh Suri (2013) 33 Taxmann 281 (Guj.) that where additions were made on the basis of statements of persons who were not allowed to be cross examined by the appellant, additions were not sustainable. It is a serious flaw which renders the order a nullity. (c) Addition made on oral evidence:- The AO apart from the statement of the sellers or POA holder has nothing on record to establish that appellant has paid on money to the sellers. Hon’ble Punjab and Harayan High Court in the case of Paramjeet Singh vs ITO (2010) 323 ITR 588 (P & H) has held that no oral evidence is admissible once the document contained all the terms and conditions. Section 91 & 92 of the Indian Evidence Act, 1872 incorporate the principle. Hon’ble ITAT Indore in the case of Shri Parshwanath Constrcution vs ITO (ITA/379/Ind/2013 dated 18.07.2014 wherein it has been held that:- As per the provision of Section 54 of the Transfer of Property Act, any tangible immovable property for an amount exceeding Rs.100 can be transacted only through a registered instrument and since the registered document is duly signed by the parties i.e. sellers and the purchasers and duly witnessed by independent persons, that too, in the presence of registering authorities, therefore, oral statement loses its credibility, more specifically when at pages 2 & 3 of each sale deed, there is a receipt/mentioning of consideration amount agreed between the parties. When the documents are reduced in writing then provision of Section 91 & 92 of 18 the Indian Evidence Act expressly bars/prohibits acceptance of oral evidence against such documents, more specifically when the registered documents are duly admitted to be correct by both the parties. The only admissible evidence regarding the terms of such contract/agreement, available before us, is the registered sale deed itself, therefore, the oral evidence loses its credibility in view of Section 92 of the Indian Evidence Act. Section 54 of the Transfer of the Property Act and Section 91 of the Indian Evidence Act conjointly says that the proof about terms of such contract can only be adduced by only placing the documents in evidence and no other evidence except the document itself is admissible. Similar view has also been taken by Hon’ble ITAT Agra in the case of V Ramchandra Construction Pvt Ltd vs ACIT (2011) 18 ITJ 590 (Trib Agra). Thus, it is not settled legal principle that oral evidence have evidentiary value in criminal proceedings, but in income tax proceedings the oral evidence can only be accepted when there is no written evidence. Therefore, in view of the above judicial pronouncements it is the registered sale deed which has more evidentiary value than the oral statements of the sellers. (d) Additions made on assumption and presumption basis:- Before embarking upon the discussion on the issue, it is important to discuss certain undisputed facts. This is an undisputed fact that nothing was brought on record to prove that assessee paid more amount than the amounts disclosed in the purchase deed and books of accounts. It is also not the case of AO that the vendors received more amounts and having disclosed more amount than shown in sale deed in their books or returns. It is a proven fact that AO has Kiran Agrawal (SS) 69 of 2020 15 made the addition only on the basis of difference in consideration shown in purchase deed and market value of the land as determined by Stamp Valuation Authority or on the basis of statement of the sellers/POA holder. At the outset, ld. AR of the assessee has strongly opposed to the applicability of provision of Section 69 of the Act because there was not even an iota of evidence to establish that investment was not fully recorded in the books of account. Onus of proof is on the department to prove that appellant made some unaccounted investment in purchase of these properties. It is undisputed fact that the AO has failed to discharge his onus and simply by applying the ‘deeming fiction’ and on guess work, presumption and suspicion basis, addition in this regard has been made. I agree with the contention of the appellant that the A.O. is not justified in making the addition simply on assumption and presumption basis. It would be pertinent to refer to the decision of Hon’ble Apex Court in the case of Umacharan Saha & Bros Co. v/s CIT 37 ITR 21 (SC) wherein it was held that suspicion, however, strong cannot take place of proof. It would be most pertinent to refer to the decision of Hon’ble Supreme court in the case of K P Varghese v/s ITO (1981) 131 ITR 597(SC) wherein it was held that assessee must be shown to have received more than what is disclosed by him as consideration. In the present case, onus probandi is on the department. There is legal maxim which says affirmanti non neganti incumbit probation means burden of proof lies upon him which affirms not upon him who denies. Here the ratio of the above cited case is squarely applicable to the facts of this case, the AO is required to bring some tangible and positive material on record to prove that assessee has paid more consideration than disclosed by it in the books. Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, assessment cannot be made on the basis of imagination and guess work. Similar views have been expressed by Apex court in the case of Dhiraj Lal Girdharilal v/s CIT (1954) 26 ITR 736 (SC). 4.5.3 Nonetheless, Hon’ble ITAT Indore in the case of Shri Lokesh Gadia vs ACIT (2019) 35 ITJ 301 (Trib-Indore) has held as under:- 28. In the instant case the assessee is not maintaining any books of accounts nor the land in question is purchased by him. Even otherwise the amount of investment in land shown by Natural Gadia Real Estate Pvt. Ltd is duly supported by various documentary evidences referred above and payment made through account payee cheque duly mentioned in the registered sale deeds. 29. We, therefore in the given facts and circumstances of the case are of the considered view that both the lower authorities erred in confirming the addition of Rs.1,75,00,000/- by wrongly invoking provisions of Section 69B of the Act, as the alleged transaction of sale of land by two sellers to the buyer M/s. Natural Gadia Real Estate Pvt. Ltd was entered into at a consideration of Rs.95,00,000/- only and no corroborative evidence is placed on record by the revenue authorities as well as Ld. Departmental Representative which could prove that “on money” of Rs.1,75,00,000/- was paid over and above the stated sale Lokesh Gadia ITA No.854/Ind/2017 41 consideration in the registered sale deed. We, therefore set aside the finding of Ld. CIT(A) and delete the Kiran Agrawal (SS) 69 of 2020 16 addition of Rs.1,75,00,000/- made in the hands of the assessee by Ld. A.O u/s 69B of the Act and allow Ground No. 2(a) & 2(b) of the assessee. Further, Hon’ble Supreme Court in the case of Roop Kumar V/s Mohan Thedeni (2003) 6 SCC 595 has observed as under:- “It is likewise a general and most inflexible rule that wherever written instruments are appointed, either by the requirement of law, or by the contract of the parties, to be the repositories and memorials of truth, any other evidence is excluded from being used either as a substitute for such instruments, or to contradict or alter them. This is a matter both of principle and policy. It is of principle because such instruments are in their own nature and origin, entitled to a much higher degree of credit than parol evidence. 4.5.4 Thus, in view of the above discussion, the AO was not justified in making additions on account of on money paid to sellers u/s 69 of the Act in absence of any corroborative evidence. Therefore, the addition made by the AO amounting to Rs. 64,45,000/-, Rs. 8,74,000/-, Rs. 2,60,000/-, Rs. 10,00,000/-, Rs. 25,60,000/-, Rs. 28,26,000/-, Rs. 50,00,000/-, Rs. 44,25,000/- & Rs. 22,25,000/- in AY 2010-11 are Deleted. Therefore, appeal on these grounds is Allowed.” 6. We find that that the Ld. CIT(A) allowed the assessee’s appeal on the ground that no additions can be made in the non abated assessment year without finding any incriminating material as held by the ld. CIT(A) at page 41-65 of the impugned order. The Ld. CIT(A) considered many High Court and Tribunal judgments especially the cases of the Indore ITAT in the case of Omprakash Gupta (Pg.54), Sainath Colonisers (Pg.55), Rashmi Majumdar (Pg.56). The Ld. CIT(A) at Pg.64 observed that the A.O. did not refer to any incriminating material found during the course of search. He further observed that the search was conducted on 21.10.2011 and the assessment was not pending before the A.O. We find that on merits, the Ld. CIT(A) observed Kiran Agrawal (SS) 69 of 2020 17 that in some cases, the farmers have not been examined and it was never stated by them that the cash was received from the assessee. The Ld. CIT(A) further observed that the A.O. did not make any independent enquiry and solely relied upon the statements of the sellers without having any cogent evidence on record which is having a direct nexus of impugned on-money payment. The Ld. CIT(A) also observed that an opportunity of cross-examination should have been provided to the assessee before making any addition. The Ld. CIT(A) relied on the case law of Paramjeet Singh Vs. ITO 323 ITR 588 (P&H) for the proposition that no oral evidence is admissible once the document contained all the terms and conditions. The Ld. CIT(A) further referred to the judgment of the ITAT, Indore Bench in the case of Shri Parshwanath Construction vs. ITO ITA 379/Ind/2013 dated 18.07.2014 ( Pg. 79 of CIT(A)’s order) and the case of Lokesh Gadiya Vs. ACIT 35 ITJ 301 (Pg.81 of Ld. CIT(A)’s order). Accordingly, ld. CIT(A) deleted the additions. 7. On consideration of above, we find that the search was conducted on 21.10.2011 and the return was filed in time on 26.09.2010 and the notice u/s 143(2) could have been issued Kiran Agrawal (SS) 69 of 2020 18 upto 30.09.2011. Having gone through the material, submission thereof in the light of the relevant judicial pronouncements (supra), we are of the view that no addition can be made in the non-abated assessment without finding any incriminating material because the ld. Assessing Officer could not bring on record any paper or document which show any on money payment. We find that the statements of the sellers were recorded after the conclusion of the search and the ld. Assessing Officer merely relied on these statements without making any inquiry which was not justified, therefore, the Ld. CIT(A) relying relevant judicial precedents was right in holding that without finding any incriminating material, no addition can be made in the assessment. We also find that no opportunity of cross- examination was provided to the assessee and in the absence of the opportunity of cross-examination the statements cannot be relied for making any addition. This has been held by the Hon’ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise Kolkata in Civil Appeal No.248 of 2006 that in absence of cross-examination of parties, the assessment proceedings to be quashed. Therefore, we are of the view the view that ld. CIT(A) was right in holding that without Kiran Agrawal (SS) 69 of 2020 19 opportunity of cross-examination, the additions are unjustified Further, we find that there is no proof on record about the utilization of the alleged on-money received by the seller and no attempt was made to investigate such an investment, if any. We are also of the view that DDIT has no jurisdiction to record a statement after the conclusion of the search. Such a statement is bad in law and cannot be used for making any addition. We further find that documentary evidence are required to be followed instead of oral evidence as the documentary evidence is conclusive and not oral evidence as held in the relevant decisions i.e. Lokesh Gadiya vs. ACIT, ITAT Indore, 35 ITJ 301, Paramjeet Singh vs. ITO 323 ITR 588, Roopkumar vs. Mohan Thedini 6 SCC 595. In view of the above facts/discussion in the light of the judicial pronouncements (supra), we are of the view that the ld. CIT(A) rightly deleted the additions under consideration made by the Assessing Officer on account of alleged undisclosed on-money payment. We do not find any infirmity in the order of the ld. CIT(A) on this issue. Thus, ground nos.1 to 8 raised by the Revenue for the assessment year 2010-11 are dismissed. Kiran Agrawal (SS) 69 of 2020 20 8. In the result, the departmental appeal i.e. IT(SS)A No.69/Ind/2020 is dismissed. Order was pronounced as per Rule 34 of I.T.A.T., Rules 1963 on 25 .01.2022. Sd/- (MAHAVIR PRASAD) Sd/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore; Ǒदनांक Dated : 25.01.2022 !vyas! Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar, Indore