PARAMJIT SINGH vs. ITO, PHAGWARA

ITA/401/2009HC Punjab & HaryanaPHHC01084506200910 February 2010Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE JITENDRA CHAUHAN6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the submissions made by the assessee's counsel did not warrant acceptance. The Court referred to Sections 91 and 92 of the Indian Evidence Act, 1872, which state that when the terms of a contract or disposition of property are reduced to writing, no oral evidence is admissible to prove any such terms, except the document itself or secondary evidence thereof. Furthermore, once a document is proved, no oral agreement or statement is admissible to contradict, vary, add to, or subtract from its terms. The Court cited an illustration where an oral agreement that money was not to be paid till a specified date cannot be proved if the written agreement specifies payment by a certain date. Therefore, no oral agreement contradicting or varying the terms of a document could be offered. Consequently, the ostensible sale consideration disclosed in the registered sale deed dated 24.9.2002 had to be accepted and could not be contradicted by oral evidence. The Tribunal's order did not suffer from any legal infirmity in concluding that the amount shown in the registered sale deed was received by the vendors and deserved to be added to the gross income of the assessee as unexplained investment, as the assessee had not explained the source of investment. The appeal was dismissed.

What were the facts?

The assessee, Paramjit Singh, appealed to the High Court against an order of the Income Tax Appellate Tribunal (Tribunal) for assessment year 2003-04. The Tribunal had reversed the decision of the CIT(A) and held that the ostensible sale consideration of land, Rs. 24,65,000, as stated in a registered sale deed dated 24.9.2002, should be added to the assessee's income. The vendors, who were the assessee's uncles, had provided affidavits stating that no sale consideration passed and they had relinquished their share in the property as they were settled abroad. The Assessing Officer (AO) questioned the vendors, who reiterated that the amount in the sale deed was the government's reserve price for stamp duty and that they had received financial help from the assessee's father for settling abroad, in lieu of which they gifted their share. The CIT(A) had accepted this version, but the Tribunal disregarded the affidavits, considering them self-serving and not giving credence to them.

What were the issues?

1. Whether the Tribunal erred in law by disregarding the affidavits of the vendors, who were close relatives of the assessee, and holding that the ostensible sale consideration of Rs. 24,65,000 mentioned in the registered sale deed dated 24.9.2002 should be added to the assessee's income, thereby contradicting the findings of the CIT(A)? (Question of law and fact, concerning Section 68 of the Income Tax Act, 1961). Assessee's contentions: The arrangement between the assessee's father and his uncles should have been given due credence, as the uncles stated on oath that no consideration passed. The assessee could not have paid such a huge amount as his account balance was minimal. The CIT(A) had rightly accepted this version. Revenue's contentions: The Tribunal's order was based on the registered sale deed which clearly reflected the payment of sale consideration. The affidavits from close relatives were self-serving and lacked credibility. The CIT(A) had not properly arrived at the findings of fact. The sale deed was an admitted fact, and since it was a sale deed, the consideration reflected therein, accepted by the Registration Authority for stamp duty, was relevant. The AO had reason to believe the consideration was not explained and should be treated as unexplained investment. The Tribunal opined that the real intention of the parties was different from the apparent intention, and the affidavit could not override the registered sale deed.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68,Section 91,Section 92

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision 10.2.2010 Paramjit Singh ...Appellant Versus Income Tax Officer, Phagwara 2, Phagwara ... Respondents CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr.Ravish Sood ,Advocate for the appellant 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The assessee has approached this Court by invoking the provisions of Section 260 A of the Income Tax Act, 1961 (for brevity 'the Act')challenging order dated 17.12.2008 (A.6) passed by the Income Tax Appellate Tribunal, Amritsar (for brevity 'The Tribunal') in ITA No. 373 ASR -2007 in respect of assessment year 2003-04. The Tribunal while accepting the appeal of the Revenue has expressed the view that ostensible sale consideration of the land disclosed in the registered sale deed dated 24.9.2002 deserves to be added to the income of the assessee- appellant. The Tribunal has dis-regarded the statement made on affidavit by the vendor S/Shri Tirath Singh and Surmukh Singh, who are the real uncles of the assesse- appella

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