JOGINDER LAL C/O M/S BAMBI HOTELS LUDHIANA vs. COMMISSIONER OF INCOME TAX LUDHIANA PUNJAB

Facts

The assessee, late Sh. Joginder Lal (represented by his LR Smt. Bimla Rani), purchased a plot of 61 square yards in February 1999 for Rs. 3,70,000, as per the registered sale deed. The vendors later filed a revised return declaring a sale consideration of Rs. 38 lacs. Following a survey under Section 133A against the vendors, reassessment proceedings were initiated against the assessee. The initial reassessment concluded at Rs. 35,56,110. After appeals and remands, the assessing officer, relying on the vendors' statements and other evidence, determined the sale consideration to be Rs. 38 lacs, adding Rs. 34,30,000 as undisclosed income. The CIT(A) and the Tribunal affirmed this finding. The present appeal challenges the Tribunal's order dated 09.07.2012.

Held

The High Court held that the onus to prove a valuation different from that in a registered sale deed initially lies with the revenue. However, if the revenue possesses sufficient material raising a presumption that the consideration in the sale deed is incorrect, the burden shifts to the assessee to rebut this presumption. In this case, the revenue discharged its onus by recording the vendors' statements, who were duly cross-examined and maintained their stand that the true value was Rs. 38 lacs. The assessing officer also relied on other sale deeds and a PUDA auction reflecting a sale consideration of Rs. 10,000 per square yard. The court found these statements clear, categoric, and free from contradictions, sufficient to infer that the revenue discharged its onus, especially when read with other sale deeds and the nature/location of the land. The assessee failed to produce evidence to rebut these statements. The court referred to the precedent in Shashi Kiran Vs. Commissioner of Income Tax, ITA-129-2010, which held that if sellers' statements remain unrebutted, the revenue's onus is discharged. Consequently, the questions of law were answered against the assessee, holding that the revenue had discharged its onus. The appeals were dismissed.

Key Issues

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal's order is unreasonable in accepting the surrender of income by the seller through a revised return after the detection of concealment, creating a paradoxical stand for the assessee? 2. Whether the Tribunal's order is sustainable when it relies on uncorroborated and unilateral statements recorded after a survey, not as a consequence of a return under Section 139(1)? 3. Whether the Tribunal's order is unreadable by applying a rule of thumb on the 'doctrine of presumption' regarding statements recorded, treating them as sacrosanct without concrete third-party evidence from survey proceedings? 4. Whether there was a lack of jurisdiction and erroneous assumption thereof under Section 133A for recording the statement, resulting in abuse and misutilization of powers as per CBDT Instruction No. 286/2/2003-IT (Inv.)? Assessee's contentions: The vendors' statements declaring a high consideration cannot be read against the assessee without other material evidence. The sale deed consideration should not be discarded on mere presumptions. Presumptions under Section 132(4) read with Section 292(C) cannot be raised without corroboration as statements were not recorded during search proceedings. The onus to prove the property's value lies on the revenue. Revenue's contentions: The vendors admitted a total sale consideration of Rs. 38 lacs. The assessing officer recorded their statements, afforded cross-examination to the assessee, and the vendors maintained their statements. The sale deed consideration is irrelevant as the assessee adduced no evidence of the property's probable value.