THE COMMISSIONER OF INCOME TAX vs. RAM KUMAR

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in not appreciating the facts of the case in right perspective thereby rendering its order to be perverse.” The assessee filed his return of income for the assessment year 1994-95 on 21.2.1995 declaring his total income at Rs. 1,06,740/-. On 25.11.2002, the Assessing Officer framed the assessment under Section 143(3) of the Act at a total income of Rs. 11,97,600/- and made an addition of Rs. 11,22,260/- on account of short term capital gain on sale of 92 marlas of land (P-1). The assessee filed an appeal before the Commissioner of Income Tax (Appeals), Jalandhar, who deleted the addition of Rs. 11,22,260/-, which was made by the Assessing Officer on account of short term capital gain, holding that the profit earned by the assessee on the sale of land was long term capital gain as declared by the assessee at Rs. 29,404/- and not a short term capital gain as assessed by the Assessing Officer (P-2). Feeling aggrieved by the order of the CIT (A), the revenue filed an appeal before the Tribunal, who vide order dated 16.12.2005, passed in I.T.A. No. 291(ASR)/2003, upheld the order of the CIT (A) and dismissed the appeal on the ground that the seized documents on the basis of which the Assessing Officer had determined the value of capital gain was never confronted to the assessee (P-3). It is appropriate to mention that the assessee has been a partner of M/s Chopra Cloth House, Kapurthala. He acquired 92 marlas of land by virtue of a Will executed in his favour by Smt. Balbir Kaur daughter and one of the legal heirs of Brig. Jai Singh, on 24.2.1993. Smt. Balbir Kaur had 1/54th share out of land measuring 249 kanals 10 marlas. The assessee executed a registered Power of Attorney on 28.10.1993 in favour of Sarvshri Joginder Singh and Harbans Singh sons of Shri Mool Singh, transferring his rights to deal/sell the aforementioned land, which was registered with the Tehsildar, Kapurthala on 19.11.1993. However, on 18.11.1993 the assessee executed an agreement to sell this land for Rs. 3,00,000/- to one Shri Gurbachan Singh son Shri Arjan Singh and Shri Harminder Singh son Shri Surjan Singh and passed on actual physical possession to them. The amount received on sale of land was mentioned as Rs. 3,00,000/-, which was received by the assessee through bank drafts. A search, under Section 132 of the Act, was conducted by the Department at the residence/business premises of Shri Gurbachan Singh, who had purchased the aforementioned land from the assessee. On the basis of the documents seized, the total payment received by Shri Ram Kumar, assessee, from Gurbachan Singh was Rs. 12,35,000/-. The document narrated the cash amount paid to the assessee twice as Rs. 5,00,000/- and Rs. 4,35,000/- other than the drafts of Rs. 3,00,000/- and accordingly the Assessing Officer held that the assessee had received Rs. 12,35,000/- as sale price and not Rs. 3,00,000/- as disclosed in the return or in the transfer deed. The same was held to be short term capital gain because the assessee was stated to have acquired the rights of ownership in the property on 24.2.1993, which was disposed of vide agreement executed on 18.11.1993, after a period of nine months. The Assessing Officer determined the value of the land in view of the provisions of Section 49(1)(ii)/55(2)(b)(ii) of the Act. The land was found to be banjar kadim.