IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.(SS)A. No. 52/Del/2009 BLOCK ASSESSMENT PERIOD 1997-98 TO 2003-04 (UPTO 23.12.2002) ACIT, CIRCLE-2, VS. Smt. Sarabjeet Kaur, Meerut 341, Soti Ganj, Meerut (PAN: AOCPK7550B) (ASSESSEE) (RESPONDENT) Assessee by: Sh. Sandeep Sapra, Adv. Revenue by: Sh. Satpal Gulati, CIT(DR) Date of Hearing on : 19/09/2016 Order Pronounced on : 29/09/2016 PER H.S. SIDHU, JM ORDER This appeal is filed by revenue against order dated 16.3.2009 passed by Ld. CIT(A)-Meerut relating to Block Assessment Period (upto 23.12.2002) 1997-98 to 2002-03 on following grounds:- 1. Whether in facts and circumstances of case, CIT(A) erred in deleting addition of Rs.1,08,75,000/- ignoring earlier agreement for sale of property found during search. 2. Whether in facts and circumstances of case, CIT(Appeals) was justified in ignoring evidenuary value of documents found during search and holding that no legal value attached to such documents. 3. Whether in facts and circumstances of case, CIT(Appeals) was justified in holding that no constructive 2 evidence was brought on record by AO whereas agreements between earlier purchasers were found during search at premises of assessee, who was last purchaser. 4. Whether in facts and circumstances of case, CIT(Appeals) erred in not applying ratio decidendi of Supreme Court Judgment in Me Dowell & Co. (1541TR 148) and holding that instant transaction was colourable one. 5. Whether in facts and circumstances of case, CIT(Appeals) was justified in admitting additional evidence in respect of loan of Rs. 5 lakh whereas ample opportunity had been granted by AO at time of assessment. 6. Whether in facts and circumstances of case, CIT(Appeals) was justified in holding as genuine, loan of RS.5 lakh from deceased person on basis of affidavit of wife of deceased without any supporting evidence. 7. Whether in facts and circumstances of case, CIT(Appeals) erred in deleting addition of Rs.25 lakhs when creditor could not explain cash deposits just prior to advancement of loan. 8. In fact circumstance of case, order of Commissioner of Income Tax (Appeals) may be set aside and that of AO restored. 2. brief facts of case is that assessee is housewife. As far as her sources of income during block period are concerned she had income from M/s Avneet Hire & Purchase and Finance Co. Ltd. In pursuance of warrant of authorization under section 132 of I.T., in name of Sh. Surjeet Singh Goldy, husband of assessee, Sh. Devendra Singh Goldy, brother in law of assessee, 5 premises were searched on 3 23.12.2002 and several incriminating documents related to Mrs. Sarbjeet Kaur were found and seized which need investigation and verification. Hence, notice u/s. 158BD dated 16.9.2004 was served on assessee on 20.9.2004. In response to notice u/s. 158BD return for block period was filed by assessee on 18.1.2005 and during block period assessee had filed returns for 1997-98 and 1998-99 only. Thereafter she had stopped filing return on ground that her income was not taxable. Notice u/s. 143(2) dated 2.1.2006 was served on assessee on 3.1.2006. Notices u/s. 142(1) dated 22.5.2006 and 22.8.2006 were served on assessee on 3.1.2006 and 25.8.2006 respectively. In response thereto, assessee s AR appeared and filed written submissions. AO observed that compliance from assessee s side was adequate. Accordingly, AO proceeded to complete assessment proceedings and assessed income of assessee at Rs. 1,52,03,360/- and made various additions vide his order dated 29.9.2006 passed u/s. 158BD/143(3) of I.T. Act, 1961. 3. Aggrieved with aforesaid order, assessee preferred appeal before Ld. CIT(A), who vide his impugned order dated 16.3.2009 has partly allowed appeal of assessee. 4. Now Revenue is aggrieved against impugned order and filed present appeal before Tribunal. 5. Ld. DR relied upon order of AO and reiterated contentions raised in grounds of appeal and requested that order 4 of Ld. CIT(A) may be set aside and that of AO be restored and accordingly, appeal of Revenue may be allowed. 6. On other hand, Ld. Counsel of assessee stated that Ld. CIT(A) has passed well reasoned order which does not need any interference on our part, hence, same may be upheld and Appeal of Revenue may be dismissed. In order to support assessee s case, he relied upon following cases laws and filed its copies with paper book:- - 288 ITR 498 CIT vs. Raj Pal Singh Ram Avtar (jurisdictional Allahabad High Court). - 98 ITR 280 CIT vs. Daya Chand Jain Vaidya (jurisdictional Allahabad High Court) - 178 ITR 660 CIT vs. Roshan Lal Seth (P&H High Court) - 82 ITD 85 (Mum), ITAT - SP Goyal vs. DCIT - 87 ITR 349, CIT vs. Daulat Ram Rawatmull (Supreme Court) - 224 ITR 180 CIT vs. Ram Narain Goel - 262 ITR 295 CIT vs. Faqir Chand Chaman Lal (P&H High Court) Ld. Counsel of assessee also filed Written Synopsis and requested that same may be considered. 5 7. We have heard both parties and perused records, especially impugned order passed by Ld. CIT(A) as well as Written Synopsis filed by ld. Counsel of Assessee and case laws referred by him. We find that Ld. First Appellate Authority has elaborately discussed issues in dispute by considering submissions of assessee and adjudicated issues vide para no. 9 at page no. 36 to 39 of impugned order. said relevant paras are reproduced as under:- On Addition of Rs.1,08,75,000/-: It is very much apparent on record that agreement dated 21.03.2000 is unregistered agreement in between Smt. Suneeta Jain and Dr. Puneet Kumar and that same has been entered into after execution of sale deed of property in question from Smt. Sunita Jain to Mr. Rajendra Kumar Singhal and Mr. Ramesh Chand Gael vide sale deed dated 7.3.2000 for sum of Rs.35,00,000/-- and that said sale deed was not disputed or rescinded by any of parties thereto. It is also clear from this fact that Mrs. Suneeta Jain was not legal owner of property on date of impugned agreement dated 21.3.2009. In circumstances no legal value was attached to said agreement. It is also apparent on record that Mr. Singhal & Mr. Gael have executed and registered sale deed in favour of appellant on 12.09.2001 and therefore there remained n value whatsoever to any Agreement entered into, in respect of said property. In this back ground, possession of unregistered agreement dated 21.3.2009 cannot be considered to have any 6 documentary and / or legal attached to same necessitating safe preserving thereof by appellant and therefore it may well be concluded that same was found with appellant only for reason that same was available with her and her explanation regarding availability thereof with here deserve to be accepted. Further AO has not been able to bring on record any fact that any payment whatsoever was made by appellant against said agreement. addition of Rs. 1,08,75,000/- has been made by AO on basis of long drawn inferences by alleging modus operandi for purchase of property in question without bringing any constructive supporting material on record. estimation of cost of construction at Rs. 1.33 crores besides value of land also do not find support from stamp valuation fixed by Stamp valuation authorities and relevant material on record. impugned addition also do not find any support from seized material. In view of above and in absence of any proof on record in seized material to suggest any unaccounted payment by appellant, impugned addition of Rs.1,08,75,000/- cannot be sustained and, therefore, is hereby deleted. On Addition of Rs.25,OO,OOO/- being loan from Shri Jasjeet Singh: - appellant has proved identity of depositor, Mr. Jasjeet Singh, who is man of means having total capital of Rs.5,64,39,416/- and genuineness of transactions which were through crossed bank drafts. depositor has confirmed loan by sending confirmatory letter and fax before A.O. as well as before A.D.I. He has further confirmed advancement of loan to appellant in his statement on oath recorded on 23.12.08. All three basic 7 ingredient for explaining cash credit having been complied with. addition made by A.O. cannot be sustained in view of judicial pronouncements cited by Ld. AR and is therefore, deleted. On Addition of loan of Rs.5,OO,OOO/- from Shri Surendra Singh: - appellant has proved identity of depositor by filing photograph, and death certificate and has also proved genuineness of transaction being through banking channel. However credit worthiness of depositor is not proved by documents on record including affidavit and confirmation of depositor's wife and even if same are admitted as additional evidence, confirmation letter, affidavit and P.A.No. do not prove creditworthiness of depositor. I do not agree with alternative submissions of ld. counsel of appellant that appellant is house, lady carrying on no business and therefore no addition can be made in her hands u/s 69/68 of Income Tax Act, 1961 in view of judgment of Hon'ble Supreme Court in P.K. Noorjahan's case as facts of this case are quite different from that of P.K Noorjan. In view of this, addition of Rs.5,00,000/- is confirmed. On Addition of loan of Rs.5 00 000/- from Mr. Pankaj Narang identity of third depositor Mr. Pankaj Narang stands proved, as he is assessed to tax with same AO. genuineness of transaction is also proved by filing bank accounts and recording of confirmatory statement on oath. In my view credit worthiness of deposit can also not be doubtful in view of block at undisclosed income of Rs,20,24,OOO/- in depositors hands. All three basic 8 ingredients required to prove cash credit having been proved, addition on this account cannot be upheld and is, therefore, deleted . 7.1 After going through findings of Ld.CIT(A), as aforesaid, with regard to deletion of addition of Rs. 1,08,75000/- raised vide ground no. 1 to 4 in Revenue s Appeal is concerned, we find that agreement dated 21.03.2000 is unregistered agreement in between Smt. Suneeta Jain and Dr. Puneet Kumar and that same has been entered into after execution of sale deed of property in question from Smt. Sunita Jain to Mr. Rajendra Kumar Singhal and Mr. Ramesh Chand Gael vide sale deed dated 7.3.2000 for sum of Rs.35,00,000/- and that said sale deed was not disputed or rescinded by any of parties thereto. It is also clear from this fact that Mrs. Suneeta Jain was not legal owner of property on date of impugned agreement dated 21.3.2009. In circumstances no legal value was attached to said agreement. It is also apparent on record that Mr. Singhal & Mr. Gael have executed and registered sale deed in favour of appellant on 12.09.2001 and therefore there remained n value whatsoever to any Agreement entered into, in respect of said property. In this view, possession of unregistered agreement dated 21.3.2009 cannot be considered to have any documentary and / or legal attached to same necessitating safe preserving thereof by appellant and therefore it may well be concluded that same was found with appellant only for reason that same was available with her and her explanation regarding availability thereof with here deserve to be accepted. We further find that AO has not been able to bring on record any fact that any payment whatsoever was made by assessee against said agreement. addition of Rs. 1,08,75,000/- has been made by AO on basis of long drawn inferences by alleging modus operandi for purchase of property in question without bringing any constructive supporting material on record. estimation of 9 cost of construction at Rs. 1.33 crores besides value of land also do not find support from stamp valuation fixed by Stamp valuation authorities and relevant material on record. impugned addition also do not find any support from seized material. In view of above and in absence of any proof on record in seized material to suggest any unaccounted payment by assessee, impugned addition of Rs.1,08,75,000/- cannot be sustained and, therefore, rightly been deleted by Ld. CIT(A). Accordingly, we are of view that Ld. CIT(A) has passed well reasoned order on issue in dispute, which does not need any interference on our part, hence, we uphold order of Ld. CIT(A) on issue in dispute. Accordingly, issue in dispute is decided against Revenue. 7.2 With regard to ground no. 5 & 6 against action of Ld. CIT(A) in admitting additional evidence in respect of loan of Rs. 5 lacs and against deletion of this amount. We find that AO had made addition of Rs. 5 lacs on account of loan from Sh. Surender Singh which had been confirmed by Ld. CIT(A) of his appellate order. Therefore, both grounds of appeal are misconceived, hence, dismissed as such. 7.3 With regard to ground no. 7 relating to deletion of addition of Rs. 25 lacs is concerned, we find that assessee has proved identity of depositor, Mr. Jasjeet Singh, who is man of means having total capital of Rs.5,64,39,416/- and genuineness of transactions which were through crossed bank drafts. Further, depositor has confirmed loan by sending confirmatory letter and fax before A.O. as well as before A.D.I. He has further confirmed advancement of loan to assessee in his statement on oath recorded on 23.12.08. All three basic ingredient for explaining cash credit having been complied with. Therefore, Ld. CIT(A) has rightly held that addition made by A.O. cannot be sustained in view of judicial pronouncements cited by Ld. AR and is therefore, deleted. Accordingly, we are of view that Ld. CIT(A) has passed well reasoned order on issue in dispute, 10 which does not need any interference on our part, hence, we uphold order of Ld. CIT(A) on issue in dispute. Accordingly, issue in dispute is decided against Revenue. 8. In result, appeal of Revenue is dismissed. Order pronounced in Open Court on 29/09/2016. Sd/- Sd/- [O.P. KANT] [H.S. SIDHU ACCOUNTANT MEMBER JUDICIAL MEMBER Date 29/09/2016 SRBHATNAGAR Copy forwarded to: - 1. Appellant - 2. Respondent - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Benches ACIT, CIRCLE-2, Meerut v. Sarabjeet Kaur