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आदेश/Order
Per R.L. Negi, Judicial Member:
The assessee has preferred the present appeal against the order dated 08.04.2021 passed by Commissioner of Income Tax (Appeals)-5, Ludhiana [for short ‘the CIT(A) ’] for the assessment year 2015-16, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed u/s 153A / 143(3)of the Income Tax Act, 1961 [for short ’the Act’].
2. The brief facts emanating from the record and pleadings of the parties are that a search and seizure operation u/s 132 of the Act was conducted at the residential premises of the assessee on 01.11.2017. -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 2 During the search certain documents were seized. Accordingly, AO issued notice u/s 153 of the Act to the assessee. In response thereof, the assessee filed his return of income declaring total income of Rs. 5,40,380/- Thereafter, AO passed the assessment order u/s 153A/143(3) of the Act and determined the total income of Rs.16,40,380/- after making addition of Rs.3,75,000/- on account of undisclosed income, Rs. 4,00,000/- on account of undisclosed profit and addition of Rs. 3,25,000/- on account of investment in purchase of LED. The assessee challenged the assessment order before the Ld. CIT(A), who after hearing the assessee partly allowed the appeal and sustained the addition of Rs. 3,75,000/-, Rs.3,25,000/- aforesaid, however restricted the addition of Rs. 4,00,000/- to Rs. 80,000/-. Still aggrieved, the assessee is in appeal before this Tribunal.
The assessee has challenged the impugned order passed by the Ld. CIT(A) on the following grounds
That the ld. CIT(A) has erred in giving part relief to the appellant.
2. That the CIT(A) has erred in confirming the addition on account of the undisclosed capital gain amounting to Rs. 3,75,000/- without any basis. 3. That the CIT(A) has failed to appreciate that no incriminating evidence was found during the course of search relating to the part additions as confirmed by the Worthy CIT(A). 4. That the CIT(A) has erred in not considering the sale agreement as seized and has erred in relying only on the oral statement of the family member.
-Chd-2021- Shri Surinder Singl Bindra, Ludhiana 3 5. That the CIT(A) has erred in confirming the addition on account of the undisclosed profit amounting to Rs. 80,000/- without any basis. 6. That the CIT(A) has erred in confirming the addition on account of the undisclosed investment in LED amounting to Rs. 3,25,000/- without any basis. 7. That the appellant craves leave to add or amend the ground of appeal before the appeal is finally heard or dispose off.
3. Before us the ld. counsel submitted that the assessee does not want to press ground No 5 of the appeal. Hence, we dismiss ground No 5 of the appeal as not pressed.
4. Ground No 1 and 7 are general in nature, therefore do not require specific adjudication.
5. Vide ground No 2,3 and 4, the assessee has challenged the action of the Ld. CITA) in confirming the addition of Rs. 3,75,000/- made by the AO on account of undisclosed capital gain. The ld. counsel pointed out that the issue raised by the assessee has been dealt with by the Chandigarh Bench of the Tribunal in the case of Sh. Harvinder Singh vs. DCIT for the AY 2015-15 and Smt. Harvinder Kaur vs. DCIT ITA No 80 & 81/ Chd/2021 for the AY 2015-16 and 2016-17 respectively and deleted the identical addition made/confirmed by the AO/ld. CIT(A) on account of undisclosed capital gain. The ld. counsel accordingly submitted that since the issue has already been settled, the addition may be deleted.
6. On the other hand, the ld. departmental representative fairly -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 4 admitted that the Tribunal has dealt with the issue relating to the capital gain arising out of exchange of old house with residential plot by the assessee and other co-owners and vide common order dated 27.08.2021 deleted the addition made on the identical ground. During the search action in the house of the present assessee, documents relating to exchange of old house with residential plot by the present assessee and three co-owners Smt. Harvinder Kaur(his wife), Sh. Harvinder Singh and Smt. Jatinder Kaur were recovered. The present assessee stated on oath that they received the difference of Rs. 35,00,000/- as the value of their property was Rs. 83 lacs and the value of property acquired through exchange was Rs. 48 lacs. However, in the registered deed the value of their property was mentioned at 68 lacs. On the basis of the statement made by the assessee AO held that the assessee and the other three co- owners received the difference of Rs. 15 lacs which was not offered to tax. Accordingly, the AO made addition of Rs. 3,75,000/- to the income of the co-owners including the present assessee. The ld. CIT(A) confirmed the addition in the first appeal, however, the Chandigarh Bench of the Tribunal deleted the said addition holding as under:-
“We have heard both the parties. We find merit in the contention of the Ld. counsel for the assessee . The sole basis for making the addition of Rs.3,75,000/- in the present case to the capital gain returned by the assessee on sale of property jointly owned with his brother Shri Surinder Singh Bindra, and both their respective spouses, we find, is based on the statement recorded of his brother, who was the searched -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 5 person, wherein he stated a higher sale consideration of Rs. 83 lacs having been received as opposed to Rs. 68 lacs sale consideration basis which the share of capital gain earned by the assessee was computed. But it is a fact on record that the only documentary evidence available in the present case is the registered sale deed which records and confirms the sale consideration declared by the assessee of Rs. 68 lacs. No other evidence whatsoever contradicting the sale consideration mentioned in the registered sale deedhas been found. Further it is also not denied that no investigation with regard to the difference in the sale consideration as stated by Surinder Singh Bindra and as recorded in the registered sale deed, which was done by the AO. On the contrary, we find, he merely jumped on the oral statement of Shri Surinder Singh Bindra taking it to be a solemn truth merely because it was a statement recorded on oath, totally disregarding the registered documentary evidence being the sale deed. A registered sale deed cannot be summarily dismissed as evidence when juxtaposed with the oral statement alone that too only of one of the parties to the transaction even when made on oath. The statement, to carry weight as evidence needs to be supported with other evidences. The statement at best raises a suspicion about the consideration exchanged in the transaction which should prompt further inquiries, but oral statement even if recorded on oath alone is not sufficient to contradict/displace a duly registered documentary evidence. We agree with the Ld. counsel for the assessee that the conclusion of the AO that the excess consideration was received, was based on mere surmises and lacked being backed by any evidence documentary or otherwise of any sort. In view of the same, we hold that the approach of the revenue authorities in treating the oral statement of the searched person as sacrosanct in total disregard to the registered documentary evidence available, is -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 6 not in accordance with law and the addition made , therefore, by holding that the surplus consideration was received in the impugned transaction amounting to Rs. 3,75,000/- in the hands of the assessee is, therefore, directed to be deleted.”
Since the Chandigarh Bench of the Tribunal has decided the issue involved in this ground of appeal of the assessee in the cases referred and the Tribunal has already deleted the addition in the case of the co- owners, we do not find any reason to take a different view. Hence, following the decision of the ‘A’ Bench of the ITAT Chandigarh discussed above, we allow this ground of appeal and set aside the findings of the ld. CIT(A).
8. Vide ground No 6, the assessee has challenged the action of the Ld CIT(A) in confirming the addition of Rs. 3,25,000/- made by the AO on account of expenses incurred in purchase of LED. During the course of search action bill dated 22.10.2014 was recovered showing purchase of LED from m/s Rahul Sales, Ludhiana by the assessee. The assessee contended before the authorities below that the said LED was gifted by his late sister Smt. Amarjit Kaur, which was later on returned to her.
However, the AO rejecting the contention of the assessee made addition of the said amount to the income of the assessee. In the first appeal the ld. CIT(A) confirmed the said addition.
The ld. counsel submitted before us that, the ld. CIT(A) has wrongly confirmed the addition made by the AO ignoring the -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 7 submissions made by the assessee and further ignoring the affidavit submitted by Smt. Bhupinder Kaur daughter of Sm Amarjit Singh. The ld. counsel further pointed out that the said LED was not found in the house of the assessee during search.
On the other hand, the ld DR supported the action of the ld. CIT(A) and submitted that since the assessee had taken contradictory statement regarding the source of the investment in question the ld. CIT(A) has rightly confirmed the addition made by the AO.
We have perused the material on record in the light of the rival submissions. The ld. CIT(A) has confirmed the addition basically on the ground that the explanation given by the assessee is not plausible and the assessee has made a contradictory statement. As pointed out by the ld. counsel, the ld. CIT(A) has rejected the affidavit of Smt. Bhupinder Kaur daughter of Sm Amarjit Singh supporting the version of the assessee. So far as the contradictory statement is concerned, the assessee has submitted in his reply that the LED in question was gifted by his sister, which was later on returned to her. The assessee has not taken the alternative plea that the LED was purchased from the income of his wife but has submitted for the sake of argument. So, the submissions made for the sake of argument, in our considered view is not sufficient to confirm the addition in question particularly, in the light of the fact that the said LED was not recovered from the house of the assessee and Smt. Bhupinder Kaur has submitted an affidavit to -Chd-2021- Shri Surinder Singl Bindra, Ludhiana 8 substantiate the contenting of the assessee. Moreover, the authorities below have not made any enquiry from the deponent Smt. Bhupinder Kaur or from any other person to rebut the contention of the assessee. As per the settled law additions cannot be made on the basis of surmises. Hence, we allow this ground of appeal and set aside the findings of the ld CIT(A) and direct the AO to delete the addition.
In the result, the appeal of the assessee is allowed.
Order pronounced on 2nd Nov., 2021.