IN INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 51/CHD/2013 Assessment Year : 2007-08 Shri M.R.Jaidka, Vs DCIT, C/o Mahadev Steel Industries, Central Circle-1, Amloh Road, Patiala. Mandi Gobindgarh, PAN: ABFPJ2692H (Appellant) (Respondent) Appellant by : Shri Ashok Goel Respondent by : Shri Ravi Sarangal & ITA No. 72/CHD/2012 Assessment Year : 2007-08 Late Smt. Amarjit Kaur, Vs DCIT, Through L/H Sh Jagmohan Singh, Central Circle-1, 2409, Krishna Nagar, Patiala. Ludhiana. PAN: ACJPK7761R (Appellant) (Respondent) Appellant by : Shri Tej Mohan Singh Respondent by : Shri Ravi Sarangal Date of Hearing : 29.09.2016 Date of Pronouncement : 18.10.2016 ORDER PER BHAVNESH SAINI, JM Both appeals by different assessees are directed against different orders of ld. Ld.CIT(Appeals)-I Ludhiana 2 dated 05.10.2012 and 11.11.2011 for assessment year 2007-08. 2. Both appeals were heard together on identical issue. Ld. Representatives of both parties mainly argued in case of assessee Shri M.R.Jaidka and submitted that issue is same and order in case of Shri M.R.Jaidka may be followed in case of other assessee. Therefore, for purpose of disposal of both appeals, we decide appeal of Shri M.R.Jaidka as under. ITA 51/2013 ( Shri M.R. Jaidka) 3. In this appeal, assessee challenged upholding of addition of Rs. 36,22,300/- on account of payment of purchase consideration in excess of amount recorded in Registered Deed. brief facts of case are that one Sh.Tehal Singh, had property at Khanna measuring 10-K I9 -M, and after his death, property was passed on to his legal heirs, seven in numbers, which comprise of his wife, two sons and four daughters. Out of four daughters, two daughters were from his second wife. Thus, each legal heir had l/7th share in that property. However, after death of his first wife, her l/7th share went to his two sons. Thus share of each legal heir was l/7th except two sons, who also owned l/7th share of their mother in equal proportion. Though, till its sale, share ratio of each legal heir was ascertainable but property, in 3 question, was undivided and as such, detail of particular portion of said property belonging to each legal heir was not ascertainable. 3(i) As stated supra, Sh. Tehal Singh had two wives and thus, his family had two units. One unit consists of four members i.e. two brothers and two sisters under reference, having 5/7th shares and other unit consists of two members having 2/7th share. first unit consisting of two brothers and two sisters entered into agreement with Sh. Roop Sachdeva and Sh. Ashok Tiwari for sale of property known as Tehal Singh Di Kothi for sum of Rs. 3.80 Crores through Dr. Ravinder Singh Sidhu, being holder of POA on behalf of two brothers (namely Sh. Mahinder Singh & Sh. Gurdeep Singh) and Sh. Jagmohan Singh, husband of Mrs. Amarjit Kaur, being holder of POA of his sister-in-law (namely Ms. Surinder Kaur) whereas, Ms. Amarjit Kaur, haying l/7th share entered into that agreement independently herself. At time of agreement, prospective buyers paid amount of Rs. 60 lacs as advance money (biana). This agreement is dated 14.05.2005 and it was to be implemented by 28.02.2006. On date of implementation of agreement i.e. 28.02.2006, prospective buyers appeared before Registering Authority with settled amount of sale price of Rs. 3.80 crore but sellers didn't appear and as such, that agreement was not materialized. prospective buyers, 4 accordingly, filed civil suit in Hon'ble Court of Additional Civil Judge (Senior Division) Khanna, bearing Civil Suit No. 169 of 11.05.2006 against sellers. In their Civil Suit, original prospective buyers sought following reliefs : i) For specific performance on basis of contract of sale dated 14.05.2005, executed by seller relating to land measuring 10-K, 191/2 M, including kothi and other buildings and structure & 4 shops. ii) For possession by partition of said property; and iii) For grant of permanent injunction restraining defendants from alienating or transferring in any manner, leasing out, mortgaging and creating charge and encumbrance of any kind from constructing, changing existing condition, in any manner of said property, till partition is effected by metes and bounds. 3(ii) During pendency of civil suit, POA executed in favour of Dr. Ravinder Pal Sidhu and Sh. Jagrpohan Singh were cancelled and instead new POA on behalf of three co-owners (i.e. Sh. Mahinder Singh, Sh. Gurdeep Singh, brothers and Ms. Surinder Kaur, sister) was executed in favour of other person. owners alongwith holder of 5 POA on behalf of brothers and sister entered into transaction for sale of said property i.e. Tehal Singh Di Kothi with different purchaser and ultimately executed sale deeds dated 28.08.2006 in their favour (including assessee) in respect of property measuring 8-Kanals for total consideration of Rs. 80,00,000/- sale price for which sale deed of property was executed was far less than that of amount of Rs. 3.80 Crores, agreed to be paid by original prospective buyers i.e. Sh. Roop Sachdeva & Sh. Ashok Tiwari in respect of said property. AO, in this back ground confronted assessee with proposal that sale consideration for entire property should be taken at amount of Rs. 3,80,00,000/-. Assessing Officer also relied upon document in form of Muffisil report dated 29/12/2006 submitted by internal vigilance cell, Punjab certifying value of property at Rs. 6.527 Crores. Apart from this AO relied upon post dated cheque for amount of Rs. 20 Lacs issued by Sh. Ravinder Pal Singh in favour pf Dr. Ms. Amarjit Kaur and same was dated 5/9/2006 and property was sold by registration deed dated 28/8/2006. legal heir of late Dr. Ms. Amarjit kaur i.e. her husband Mr. Jagmohan Singh could not give any satisfactory explanation for having received above mentioned cheque which was not encashed at all. AO after 6 considering explanation submitted by Sh. Ravinder Singh came to conclusion that cheque was in fact issued to assure assessee regarding extra amount to be paid in cash over and above registered amount. A.O. made above addition against assessee. 4. assessee challenged addition before ld. CIT(Appeals) and arguments of assessee are reproduced in appellate order which read as under : "The brief facts are that Appellant is individual having income from business, rental, interest income. During F.Y 2006- 07 relevant to A.Y.2007-08 he alongwith other co owners purchased property at Khanna on 28.08.2006. His share was 18% he invested & Rs.13,20,300/- which was duly accounted for. However legal dispute arose in court relevant to that property & appellant surrendered his share in court at purchase value much before search & seizure operation which took place on 04.10.2007. This fact was disclosed to search party during search operation also. We reproduce our submission before A.O. in this regard. Regarding property at Khanna, we submit as under:- We purchased property from Mahinder Singh S/o Sh. Tehal Singh, through Jatinder Pal Singh S/o Sampuran Singh & Gurdeep Singh S/o Sh.Tehal Singh, Surinder Kaur & Amrajit Kaur on dated.28.08.2006. total investment in property made by us amounts to Rs.23,06,115/-, Rs.l4,31,115/- by Sh.Mangat Rai Jaidka & Rs.8,75,000/- by Sh. Devinder Pal Jaidka. Source of same has been disclosed & explained to your goodself earlier also. Lately property went into dispute and court case started at Hon'ble Court of Additional Civil Judge (Senior Division), Khanna. We surrendered our right for same amount in court and settled case from our angel. amount has been deposited in court. However, we have not received same till date. same facts were also told by Sh. Mangat Rai Jaidka in his statement recorded by income tax department which is reproduced as under : 7 Page 10: Reply to Question no.31: "These papers relate to purchase property of Sh. Tehal Singh and his family members in name of Sh. Mangat Rai Jaidka, Sh. Devinder Pal and Smt. Sneh Lata. We have purchased property at Rs.32-34 lacs approximately. However, we have surrendered property to court at same price." Copy of registration deeds has been already submitted with yourself. Further, document no.7 to 15 seized from premises of Sh. Ravi Sharma at time of survey contains affidavits of Sh. Mangat Rai Jaidka & Sh. Devinder Pal Jaidka in which we have surrendered said property (Copy of said document is enclosed for your reference) We are enclosing copy of court's proceedings in which property was surrendered by us, which proves same." There were seven co-owners of property (admitted by A.Y. in para 22 of Asst. order) reliaince of A.O is on basis of agreement to sell between Sh. Roop Sachdeva & Sh. Ashok Tiwari (buyer) & three co-owners & one co-owner through power of attorney only. How this agreement is valid when all co-owners through power of seller group has not signed tine same. Further reliance of A.O on stale cheque found from residence of Dr. Mrs. Amarjit Kaur issued by Dr. Ravinder Pal Singh Sidhu has no relevance with us. said documents was never found from us & was never confronted to us. It has nothing to do with our purchase transaction. Dr. Ravinder Pal Singh has replied said purchase transaction. Dr. Ravinder Pal Singh has replied said query in his own case which has been reproduced in para 2.6.4.1 of Assessment order which is self explanatory. submission of A.O. that cheque which was not encashed has no relevance. Firstly registration already happens before that & Ravinder Pal Singh was only POA holder of other co-owners neither we have any connection with Ravinder Pal Singh. Neither is he seller or buyer with us. We have advance following agreements which during Asst. proceedings part of which has been summarily rejected by A.O. We have purchased property from direct owners. They have not said that anything received over & above amount account for. Further Government has fixed market price of various properties. said value has been recognized by Income Tax Act also 8 (Sec. 50C of I.T. Act). registration is at that price. That recognizes market price of property as on date of registration. As registration of properties is before Tehsildar who is Gazette Govt. Officer & he certifies registration deed & consideration exchanged, which also justifies value of property amount paid by buyer. At time of registration title of property was clear & due to which registration was done. party who alleges to have agreement does not got any stay from court. Further we have surrendered our share before court to avoid litigation for same cost. Had we invested more we would have fought in court to save our interest? We were at solid footing as registration was in our favor & possession was also with us. Why we would surrender our interest if your version is there. Further why alleged buyer as per agreement agreed for much higher price when market prices are best known to him. There may be many reason for his alleged deal for which we are not answerable/liable. It may be mentioned here what buyer has agreed the' amount as per our registration deed in court because he was sure that we have invested that amount only. He never offered amount as per his agreement which proves fact that our cost is factual. Furthermore, there have been search operations at my residence nothing incriminating in regard to such investment have been seized or found. Further, we brought to your kind knowledge that buyers mentioned in alleged agreement to sell on which show cause has been issued have purchased 36% of share of Iqbal Singh S/o Harnam Singh, Rupinder Kaur W/o Iqbal Singh, Inderjit Singh So Harnam Singh, Gurwinder Kaur, W/o Inderjeet Singh, Sarabjit Singh S/o Ravinder Pal Singh, Satinder Kaur W/o Sarabjit singh for sum of R.36 Lacs, which is after 16 months from purchase by said sellers. said seller namely Iqbal Singh S/o Harnam Singh, Rupinder Kaur W/o Iqbal Singh, Inderjit Singh S/o Harnam Singh, Gurwinder Kaur W/o Inderjeet Singh, Sarabjeet Singh S/o Ravinder Pal Singh, Satinder Kaur W/o Sarabjit Singh have purchased said land with us in August 2006 for Rs.29 Lacs & odd. That proves that agreement was malafide & unreliable for best reason known to buyer. When he has purchased at lesser amount how he can justify his earlier agreement. Photocopies of registration deeds are enclosed. 9 A.O has mentioned following reason for not accepting few of above explanation. Regarding Para 3 above. Para 2.6.1 (of Assessment order) "However he (Tehsildar) is not concerned with actual consideration exchange as stated above. It is factually wrong. Govt. Officer has to charge stamp duty on basis of actual consideration circle rate are minimum rate on which stamp duty has to be paid even if consideration is less. In case consideration is higher, higher stamp duty is payable & he is very much concerned with consideration. second objection of A.O is in para 2.6.2 ( of Assessment order) that bare reading of provision as contained in section 50C of I.T. Act clearly shows that these provisions are applicable for purpose of determination of capital gain u/s 48 of Income Tax Act and not for purpose of determining undisclosed investments in property is not correct. Sec. 50C reference to full value of consideration received which have been substituted for market value which was existing earlier. value adopted, for Sec. 50C which is full value of consideration has relevance here. Regarding purchase of land from other co-owner who purchased land alongwith appellant in 2006 namely Iqbal Singh, Inderjit Singh, Sarbjit Singh. Ms. Rupinder Kaur & Mr. Gurvinder Kaur & Ms. Satinder Kaur by Sh. Roop Sachdeva & Sh. Ashok Tiwari at same cost at which they purchase & not with reference to price mentioned in original agreement. A.O submission that ; "In this connection, it is stated that reasons for executing deeds of such property at same rate of its purchase are best known to those co-owners particularity when prospective buyers were ready to purchase it at higher rate. Apparently it appears that avoidance of capital gain tax arising out of same of said property, in case sale deed had been executed at higher rate be cause or reason for execution of sale deed at same price at which it was purchased." 10 It mat be submitted there is no, fact that purchasers were ready to buy at higher rate. No such fact was confronted by A.O during assessment proceedings. Capital gains tax is only small part of total consideration. For that amount who will forgo total amount when he can fetch higher price. It may be pointed out I.T. cases of purchasers have been assessed by same A.O in scrutiny after search & no allegation has been made that consideration at much higher figure has been passed by them. Further report of vigilance cell has no relevance & same is highly exaggerated & has not been relied upon by A.O himself. Further A.O have relied upon statement of Sh. Ravi Sharma that he stated that registration are been done by M.R. Jaidka and family below market price is totally wrong in view following facts. In last six years land purchased by family and statement given by Sh. Ravi Sharma comparative chart is produced below: As per Actual Statement Status Date Amount Date Amount Building Opp. Sneh Lata & 1985 1 Lac 90,000 PWD 150 SQ Veena Jaidka yards Adjacent to Sneh Lata & 2002-03 5.5 Lac 30.03.2006 5,46,250 above 250 sq. Veena Jaidka yards Agricultural Sneh Lata & 2005-016 23.24 03.08.2006 23,00,000 Land Alour Puneet Jaidka Lac only reliance of AO that agreement exist for same property which is defective in itself & further purchaser mentioned in said document purchases same property from co-owners at rate at which those co-owners actually purchased which is much less than agreement which proves that agreement is false. 11 There are seller, purchaser & Tehsildar when transaction has taken place. A.O has never pointed out that seller have admitted receipt any many or any money has actually passed to then. None of their statement has been confronted which implies that they have confirmed that actual amount as per Regd. Deed has been received. Without prejudice & without admitting even if consideration mentioned in agreement to sell as mentioned above is market value even than whereas by any cogent evidence unless it is proved that additional consideration has been given by purchaser no addition is called for. We draw your kind attention to section 69B of I.T. Act which is reproduced as under: "Where in F.Y immediately proceeding assessment year assessee has made investments which are not recorded in books of accounts, if any, maintained by him for any source of income, and assessee offers no explanation about nature and source of investments or explanation, value of investments may be deemed to be income of assessee of such financial year." burden is on the- revenue to prove that real investment exceeded investment shown in account books of assessee." 5. CIT(Appeals), however, did not accept contention of assessee and relying upon agreement to sell dated 14.05.2005 considered as incriminating evidence against assessee, confirmed addition. findings of ld. CIT(Appeals) in paras 4 to 6 of appellate order are reproduced as under : 4. I have considered facts of case and rival views on addition made on account of purchase of property. sequence of events have to be appreciated as they happened in order to understand whether there were any constraining factors that could have led to sharp depreciation in market value of impugned property. It is matter of fact that agreement to sell 12 was entered into by valid power of attorney holders of Sh. Mohinder Singh and Sh. Gurdeep Singh as well as of Suririder Kaur with buyers i.e. Mr. Roop Sachdeva and Mr. Ashok Tiwari on 14/5/2005. property was agreed to be sold for 3.8 Crores for Which advance of Rs. 60 Lacs in cash had passed on from buyer to seller (power of attorney holders). transaction of sale was to be completed by 31st 3anuary 2006, however l/7th share holder of property i.e. Mrs. Mohinder Kaur sold front portion of property by sale deed dated 1/9/2005 for total consideration of Rs. 28,20,000/-. It needs to be kept in mind that Mohinder Kaur was not party to original agreement to sell property and same was entered into by co-owners having only 6/7th share of total property. In circumstances sellers having 6/7th share of property, who had entered into agreement with Mr. Roop Sachdeva and Mr. Ashok Tiwari dated 14/5/2005, did not complete; transaction as agreed and buyers moved civil court by suit No. 196 dated 11/5/2006 in order to force sellers to register property in their favour as agreed. During pendency of civil suit co-owners having 6/7th share of property cancelled power of attorneys given earlier and sold property vide registration deeds dated 28/8/2006 for amount of Rs. 80 Lacs to group of 14 buyers including assessee. It therefore seems that there was some amount of misrepresentation on part of 6/7th owners of property while entering into agreement with Ashok Tiwari and Roop Sachdeva so much so that they represented as full owners of property. It is however not clear as to why 6/7th owners of property choose to sell at price of Rs. 80 lakh especially when there was buyer for price of Rs. 3.80 crs. and he had filed civil suit to get deal consummated at Rs. 3.80 crs. AR of appellant has not been able to bring on record any convincing explanation as to why much higher price for property was ignored. AR has only submitted that earlier agreement could not be executed for want of clear title of sellers and litigation amongst parties. explanation given is not logically acceptable as there is no flaw in title of owners with reference to 6/7th share of property and 13 dispute in question is only to enforce said agreement in form of transferring property for stated sale consideration of Rs. 3.8 crores. It is however reasonable to expect that 6/7th share would be fetching lesser price as Rs. 3.8 crore was sale consideration for entire property. issue to be decided here is that whether agreement to sell evidencing sale consideration at 3.8 crores backed by civil suit filed by buyers to get agreement executed according to given terms and conditions can be taken as evidence of actual consideration at Rs. 3.8 crores as against registered price of Rs. 80 lacs. 5. Since case under consideration pertains to taxability of amount received by assessee on account of sale of capital asset being land and building, provisions of section 48 need to be appreciated to understand as to what would be full value of sale consideration in facts of case. Hon'ble Apex Court in case of CIT Vs. George Handerson & Company Limited 66 ITR 622 has observed that full value of consideration for which sale, exchange or transfer of capital asset is made appearing in section 12B of Indian Income Tax Act, 1922 (corresponding to present section 48 of Income Tax Act, 1961), does not mean market value of asset transferred but price bargained for by parties to sale, etc. consideration for transfer of capital asset is what transferor receives in lieu of asset he parts with, viz., money or money's worth. expression "full consideration" in main part of section 12B(2) can not be construed as having reference to market value of asset transferred. Hon'ble Madras High Court in case of CIT Vs. P. Suryanaraina 88 ITR 321 held that full value of consideration in said section meant only actual value received by assessee. However market value may also be taken in place of full value of consideration only in event of consideration as per registered document being less than value fixed by revenue authorities for purpose of collection of stamp duty. It means that full value of consideration as evidenced by registered document can be substituted for 14 value meant for purposes of stamp duty as per section 50C. This section has been introduced by Finance Act 2002 w.e.f. 1.4.2003 and has been titled "special provision for full value of consideration in certain cases" which means that full value of consideration can be substituted only if conditions as stipulated in provisions of section 50C are fulfilled. Apart from provisions of section 50C, .sale Consideration as reflected in registered document can be substituted by higher figure if there is evidence on record to suggest that amount over and above one recorded in registered documents had passed on from buyer to seller. This view has been upheld by jurisdictional Tribunal at Amritsar in case of Inderpal Singh Ahuja Vs. ACIT 103 TD 271. Hon'ble Bench has held:- "As per provision of section 48, capital gains is required to be computed by deducting from full value of consideration received or accrued as result of transfer of capital asset expenditure incurred wholly and exclusively in connection with such transfer and cost of acquisition of asset and cost of any improvement thereto. section does not show that only consideration shown in sale deed is to be regarded as full value of consideration received. There is nothing in section, which precluded AO from substituting actual sale consideration for sale consideration shown in sale deeds, if there is evidence to show that assessee had indeed received higher amount. Thus, contention of counsel for assessee that AO is not empowered to substitute consideration for sale consideration shown in sale deeds is without any substance. If this case case, there was no need for legislature to confer powers on AO under section 55A for making reference to Valuation Officer with view to ascertain fair market value of capital asset for purpose of computation of income from capital gains provided under Chapter IV. If AO cannot ascertain consideration and substitute same with one shown in sale deed for purpose of computation of capital gains then whole exercise of referring property to valuation cell would have been futile.............. 15 .................... As regards contention of counsel that had there been undervaluation of sale consideration in sale deeds, revenue authorities of State Government would have not registered sale deeds, it is mentioned that sale rates fixed by State Government are only indicative of rates but are not decisive or conclusive of market rates. It is common knowledge that due to various reasons and also procedural requirement rates are not revised immediately as soon as these go up. rates fixed by State Revenue authorities for purpose of stamp duty are not conclusive about market rates of property. same depends on several other factors. Therefore, this plea is also of no help to assessee 6. judgement of Hon'ble ITAT Amritsar bench cited supra spells out circumstances in which full value of sale consideration can be taken to be figure other than registered price. It needs to be seen whether deal for transfer of impugned land was negotiated at price recorded in registered document or higher amount as evidenced by circumstantial evidence. It is settled law that while deciding matters Income tax authorities can take into account circumstantial evidence and also apply test of human probabilities. In case of CIT vs. Durga Prasad 82, ITR 540 (SC), Hon'ble Apex court has held that though apparent statement must be considered real until it was shown that there were reasons to believe that apparent was not real, in case where party relied on self serving recitals in documents, it was for party to establish truth of, those recitals. taxing authorities were entitled to look into surrounding circumstances to find out reality of such recitals. In case of Sumati Dayal vs. CIT, Hon'ble Apex court observed that IT authorities could consider surrounding circumstances and apply test of human probability while deciding issues before them. In case of Hira Lal Ram Dayal, Hon'ble Punjab and Haryana high court observed that if assessee, even in face of registered sale 16 deed, is able to prove by cogent evidence and satisfy Tribunal that no sale took place, Tribunal has to come to conclusion that no sale took place. It was held that that registered sale deed executed by assesses to sell property was not conclusive that sale had actually taken place. High court further observed that people, who want to avoid payment of tax, sell property by getting sale deeds executed at understated value. If it was held that sale deed was final, IT authorities would be barred from finding how much sale consideration passed under transaction. factum of sale and sale proceeds are real questions to be determined by IT authorities. perusal of above detailed judgements shows that mere fact that assessee had executed sale deeds at particular price is not conclusive in deciding full value of actual purchase consideration paid. In this case direct evidence in form of validly executed and acted upon agreement to sell is on record whereby price of property has been settled at Rs. 3.80 cr and buyer has given statement on oath before civil court that he is ready with requisite balance payment to get sale deed registered. In this situation there have not been any mitigating circumstances for seller to sell property at substantially lower price of Rs 80 lakh. only logical conclusion that can be drawn from given circumstances is that assessee actually paid price for property which was higher than Rs 3.80 cr and therefore purchased impugned property from sellers, though registered document reflected very low consideration of Rs 80 lakh. I think revenue has discharged burden cast upon it to prove actual consideration at Rs. 3.80 crs at least, if not higher. In view of above addition made by AO is confirmed. 6. We have heard ld. Representatives of both parties. ld. counsel for assessee reiterated submissions made before authorities below and referred to Agreement to Sell dated 14.05.2005 (PB- 264) 17 between 6/7th owners and Shri Roop Sachdeva and Shri Ashok Tiwari. He has submitted that assessee is not party to agreement to sell and this agreement to sell was never acted upon between parties, therefore, no liability could be attached to assessee on basis of agreement to sell in question. assessee purchased his 18% share vide registered sale deed dated 28.08.2006 for consideration of Rs. 13,20,300/-. No material was found during course of search against assessee. third party agreement is not binding on assessee. Ultimately, assessee surrendered right in property and made statement before Civil Court, copy of which is filed at page 167 and 168 of Paper Book. He has submitted that assessee surrendered right in this property at purchase price only. assessee never signed any cheque in question and no cheque was found from his possession. Assessing Officer never confronted any such material to assessee. cheque in question was never encashed, therefore, it is no more relevant. There was no evidence available with Assessing Officer that any amount passed on from assessee to seller over and above what is recorded in registered sale deed. sale deed was registered as per circle rate. Since it was disputed property, therefore, no adverse inference should be drawn against assessee. 18 6(i) He has relied upon decision of Gujrat High Court in case of CIT Vs Fair Deal Textile Park P.Ltd. 362 ITR 497 made under section 69B wa s not jus tif ied . He has further submitted that owners of property have not made any statement or allegation against assessee of receiving any amount more than what is recorded in sale deed. 6(ii) In case of other assessee Dr. Amarjit Kaur, it is stated that she is seller of same property and in her case, report of DVO was also called who valued property at lesser rate of Rs. 1.43 Crores which was not relied upon by authorities below. agreement in this case was cancelled before Civil Court. ld. counsel for assessee also relied upon decision of Hon'ble Supreme Court in case of K.P.Varghese 131 ITR 597 and decision of Hon'ble Punjab & Haryana High Court in case of Paramjit Singh 323 ITR 588. 7. On other hand, ld. DR relied upon orders of authorities below and submitted that statement of broker Shri Ravi Sharma, Stamp Vendor was recorded which is referred to in assessment order in which he has confirmed that all these rates are market price for which registry cost was much lesser than that. Internal 19 Vigilance Cell have given value of property at higher rate. purchasers had gone to Sub Registrar to get sale deed registered, would clearly indicate that value as per agreement was correct. provisions of Section 50C of Act cover lower rates if same are not as per circle rate. agreement and statement before Civil Court are enough to sustain addition. 8. We have considered rival submissions. authorities below have heavily relied upon agreement to sell dated 14.05.2005 in which sale consideration of property is alleged to have been mentioned at Rs. 3.08 Crores. It is admitted fact that this agreement to sell is not signed by assessee and he was not party to same. How it is admissible in evidence against assessee is not at all explained. This agreement to sell was also not found from possession of assessee. Hon'ble Delhi High Court in case of CIT V Kulwant Rai 291 ITR 36 held that Admittedly assessee had n o t s i g n e d t h e g r e e me n t i n q u e s t i o n n d s i n c e h e h d n o t signed agreement, no liability could be attributed qua t h t g r e e me n t t o wa r d s h i m . S i n c e h e wa s n o t p r t y t o t h e g r e e me n t t i l l h e h d s i g n e d t h e g r e e me n t . No incriminating material was found during search against assessee, therefore, third party agreement to sell will not be binding on assessee. alleged agreement to sell dated 14.05.2005 was executed through Power of Attorney holders and during pendency of civil suit, 20 Power of Attorney was cancelled meaning thereby owners did not agree to agreement to sell. owners of property directly executed sale deed dated 28.08.2006 in favour of assessee and others. share of assessee was 18% only. Since dispute arise between parties in Civil Court therefore, assessee surrendered his share in court at purchase value much before search & seizure operation. ld. counsel for assessee referred to statement of assessee and decree ordered by Civil Court to show that assessee has surrendered his share in purchased property at same rate at which it was purchased by assessee. This itself proved that no on money paid by assessee as against sale consideration recorded in Sale Deed. authorities below have relied upon agreement to sell between Shri Roop Sachdeva and Shri Ashok Tiwari (buyers) and three co-owners and one co-owner through Power of Attorney only, who have only 6/7th share in property in reference. Unless all co-owners have signed agreement, it is not explained as to how agreement to sell was valid without it being signed by all co-owners of property and without ascertaining their portion in property. Since shares of various co-owners in property were not ascertainable therefore, there was no question of some of co-owners entering into agreement to sell to sell property. 21 9. Assessing Officer relied upon some cheque found from residence of Dr. Amarjit Kaur issued by Dr. Ravinder Pal Singh. This document was never found from possession of assessee and not signed by assessee. This cheque was never confronted to assessee and under Negotiable Instrument Act, when said cheque was never encashed, it would loose its validity after expiry of certain period. Therefore, recovering of uncashed cheque would have no relevance to matter in issue. No material or evidence has been brought on record that assessee has paid any amount over and above what is recorded in registered sale deed. assessee purchased property directly from owners and they have not made any statement against assessee for receiving any amount over and above amount mentioned in registered sale deed. It is also not in dispute that sale deed was registered as per circle rate. Hon'ble Punjab & Haryana High Court in case of Paramjit Singh Vs ITO 323 ITR 588 held as under: It is well kno wn principle that no oral evidence is admissible once documents contain all terms and conditions. Sections 91 and 92 of Indian Evidence Act, 1872 incorporate principle. Tribunal held that ostensible sale consideration of l and disclosed in registered sale deed dated September 24, 2002 added to income of assessee. Tribunal disregarded statement made on aff idavit by vendors who were uncles 22 of assessee. They had stated that no sale consideration had passed hands and they had relinquished their share in l anded property. object of executing sale deed was only to hand over landed property to assessee. On appeal to High Court : Held, dismissing appeal, that ostensible sal e consideration disclosed in sale deed dated September 24, 2002, had to be accepted and it could not be contradicted by adducing any oral evidence. Therefore, order of Tribunal did not suff er from any legal inf irmity. amount sho wn in registered sale deed was received by vendors and deserved to be added to gross income of assessee. 10. Hon'ble Supreme Court in case of K.P.Varghese V ITO 131 ITR 597 held that Capital gains disclosed by him as consideration. Burden of proof on revenue . 11. assessee explained that why buyers have agreed for much higher rate as per agreement, when market price was known to them. There may be so many reasons for alleged deal but assessee is not answerable, therefore, Assessing Officer should have made thorough inquiry on this aspect of matter. assessee also explained that buyer mentioned in agreement to sell 23 have purchased 36% of shares of other co-owners at lesser price after 16 months from purchase by said seller. This explanation of assessee has not been rebutted by authorities below. Further, this Internal Vigilance Cell of Punjab giving report of valuation of property has no relevance because it was not based upon facts of case and also not relied upon by Assessing Officer. Further, when in case of Dr. Amarjit Kaur, matter was referred to DVO and for value of property who has valued property at lesser price at Rs. 1.43 Cr, there was no reason for authorities below to take higher value as per agreement to sell. 12. Assessing Officer relied upon statement of Shri Ravi Sharma to give market value but assessee has given certain instances to show that in last many years, land purchased by family and statement given by Shri Ravi Sharma has different valuation. Assessing Officer has never pointed out that seller if have admitted receipt of any on money actually passed on to them over and above what is recorded in sale deed. None of statements recorded during course of search were confronted to assessee. Therefore, agreement to sell in question could not be considered as incriminating evidence against assessee so as to make addition against assessee of this nature. In absence of any evidence that 24 assessee paid any amount over and above recorded in Sale Deed, no addition could be made against assessee. 13. Considering totality of facts and circumstances of case, we are of view that revenue has failed to prove that assessee has paid any amount more than amount mentioned in sale deed. burden upon Assessing Officer have not been discharged as per law. Therefore, no addition could be made against assessee. We, therefore, set aside orders of authorities below and delete addition of Rs. 36,22,300/- as unexplained investment. 14. In result, appeal of assessee is allowed. ITA 72/2012 ( Late Smt. Amarjit Kaur ) 15. In this appeal, assessee challenged addition of Rs. 39,29,421/- on account of taxable capital gains. issue is same. assessee is seller in this case who has executed sale deed in favour of assessee Shri M.R.Jaidka and others. Since we have deleted addition in case of purchase of same nature, therefore, no evidence is available against this assessee as well for receipt of any on money over and above what is recorded in sale deed. Following reasons for decision in case of Shri M.R.Jaidka (supra) we set 25 aside orders of authorities below and delete addition of Rs. 39,29,420/-. 16. In result, appeal of assessee is allowed. 17. In result, both appeals of different assessees are allowed. Order Pronounced in Open Court. Sd/- Sd/- (ANNAPURNA GUPTA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18th October, 2016. Poonam Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT,DR Assistant Registrar, ITAT/CHD M.R. Jaidka v. DCIT, Central Circle-1, Patiala