RISHI RAM vs. COMMISSIONER OF INCOME TAX,AAYAKAR BHAWAN,SECTOR-12,KARNAL
What did the High Court hold?
The High Court held that the substantial question of law did not arise. The Court found that the conclusions reached by the lower authorities were based on an appreciation of facts that could not be considered perverse or irrational. The core issue was whether the apparent consideration of ₹3.60 lacs and ₹3.40 lacs in the sale deeds dated 19.01.2001 and 01.02.2001 represented the actual consideration received by the appellant. The ITAT's reliance on the agreement dated 06.10.2000, found during a search and admitted to be signed by the assessee, was deemed not unfounded or irrational. The Court noted the significant fall in price from ₹21 lacs to ₹7 lacs (implied from the sale deeds) without explanation and the lack of evidence for default by the prospective purchaser. Therefore, the Tribunal's findings were based on factual appreciation, not perverse or irrational.
What were the facts?
The appeal concerns assessment year 2001-2002 and challenges an order of the Income Tax Appellate Tribunal (ITAT) dated 28.06.2017. The ITAT had confirmed the order of the CIT(Appeals) dated 28.11.2013, which upheld the Assessing Officer's order dated 08.12.2008. The core issue revolves around the actual consideration received by the assessee for sale of property. The assessee had entered into sale agreements on 19.01.2001 and 01.02.2001, showing consideration of ₹3.60 lacs and ₹3.40 lacs respectively. However, during a search of a third party's premises, an earlier agreement dated 06.10.2000 was found, mentioning a consideration of ₹21 lacs, signed by the assessee but not the vendee. The assessee admitted to receiving ₹2.10 lacs advance pursuant to this earlier agreement.
What were the issues?
The High Court was asked to decide the following substantial questions of law: 1. Whether the ITAT erred in holding that the agreement dated 06.10.2000, not signed by the vendee, is a valid agreement? 2. Whether the ITAT erred in ignoring registered sale deeds dated 19.01.2001 and 01.02.2001 and relying on the unregistered, unsigned agreement dated 06.10.2000? 3. Whether the ITAT erred in relying on a photocopy (Annexure A-3) to fix the value of House No. 295-R, Model Town, Panipat? 4. Whether the ITAT erred in relying on the statement of a person whose veracity could not be tested by the appellant through cross-examination? 5. Whether the ITAT erred in fixing long-term capital gain by ignoring the property's value and improvements, and basing its decision solely on an unenforceable document? 6. Whether the ITAT's order is perverse due to incorrect application of law? Assessee's Contentions: The assessee argued that the ITAT erred in treating the unsigned agreement of 06.10.2000 as valid, ignoring the registered sale deeds, relying on a photocopy, and using an untested statement. The assessee contended that the capital gains were fixed based on an unenforceable document. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions but implies that the revenue authorities (Assessing Officer, CIT(Appeals), and ITAT) concluded that the actual value of the property was higher than the apparent consideration in the sale deeds dated 19.01.2001 and 01.02.2001.
Which sections of the Income-tax Act were involved?
None explicitly mentioned as being discussed in the judgment text provided.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
order of the Assessing Officer dated 08.12.2008. The appeal pertains to the assessment year 2001-2002. 2. According to the appellant, the following substantial questions of law arise in this appeal:- (i) Whether in the facts and circumstances of the case Ld. Income Tax Appellate Tribunal erred in law to hold that agreement dated 06.10.2000 which is not signed by the vendee is a valid agreement?
(ii) Whether in the facts and circumstances of the case Ld. Income Tax Appellate Tribunal erred in law to ignore the registered sale deed dated 19.01.2001 and 01.02.2001 and rely upon an unregistered sale agreement dated 06.10.2000 which is not signed by the vendee?
Amodh Sharma 2018.01.29 16:13 I attest to the accuracy and integrity of this document Chandigarh
ITA-523-2017 (O&M)
2 (iii) Whether in the facts and circumstances of the case Ld. Income Tax Appellate Tribunal erred in law in relying upon the photocopy of Annexure A-3 to fix the value of House No. 295-R, Model Town, Panipat?
(iv) Whether in the facts and circumstances of the case Ld. Income Tax Appellate Tribunal erred in law in relying upon the statement of a person whose veracity could not be tested by the appellant by cross examining him?
(v) Whether in the facts and circumstances of the case Ld. Income Tax Appellate Tribunal erred in law fixing the long term capital gain ignoring the value of the property and the improvements made thereon and basing its decision solely on a document which is not enforceable in law?
(vi) Whether the orders of the Ld. Income Tax Appellate Tribunal is perverse as the same is based on incorrect application of the provisions of law?
The issue really is only one. It is whether the apparent consideration in the documents of sale dated 19.01.2001 and 01.02.2001 of ` 3.60 lacs and ` 3.40 lacs were the actual consideration received by the appellant or not. During the search carried out in the premises of a third party, the authorities found an agreement dated 06.10.2000 in which consideration of ` 21 lacs was mentioned, albeit with another prospective purchaser, namely, one Rakesh Dogra. The agreement was signed by the assessee. It was not signed by the prospective purchaser. An amount of ` 2.10 lacs received as an advance by the appellant was, however, pursuant to that agreement. All three authorities under the Income Tax Act, 1961 came to the conclusion that the actual value of the property Amodh Sharma 2018.01.29 16:13 I attest to the accuracy and integrity of this document Chandigarh
ITA-523-2017 (O&M)
3 was higher and in any event was not the apparent consideration mentioned in the agreements of sale dated 19.01.2001 and 01.02.2001. The reliance upon the agreement found during the search cannot be said to be unfounded or irrational. The appellant admits to have signed the same. There is no explanation as to why the price fell from ` 21 lacs to ` 7 lacs. There is no evidence on record to indicate that there was any default on the part of the prospective purchaser compelling the appellant to enter into the agreement which was finally entered into.
A substantial question of law does not arise. The conclusions are based on an appreciation of the facts which we are unable to hold as perverse or irrational.
The appeal is, therefore, dismissed.
(S.J. VAZIFDAR) CHIEF JUSTICE
(AVNEESH JHINGAN) JUDGE 24.01.2018 Amodh Whether speaking/reasoned Yes/No Whether reportable Yes/No Amodh Sharma 2018.01.29 16:13 I attest to the accuracy and integrity of this document Chandigarh
Recent GST High Court judgments
Search GST case law →- M/S Sita Enterprises vs. Office Of The CommissionerUttarakhand · 26 Oct 2026
- Capri Global Capital LTD Through Represented By Its Law Officer Mr. Varun Kaljoria vs. The State Of Madhya Pradesh Through Principal SecretaryMadhya Pradesh · 26 Oct 2026
- Sri Tatiparthy Venkata Swamy vs. The State Of Andhra PradeshAndhra Pradesh · 25 Oct 2026
- Piyush Shantilal Veera vs. State Of U.P.Allahabad · 23 Oct 2026
- Tvl. Pooja Shri Traders vs. The Deputy State Tax Officer - 1Madras · 23 Oct 2026
