PR COMMISSIONER OF INCOME TAX (CENTRAL )-1 vs. SMT. KUNDAN SINGH

PDF · subscribers
ITA/920/2019HC DelhiDLHC01042332201912 February 2024Author: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV,HON'BLE MR. JUSTICE YASHWANT VARMA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT's judgment was concluded by findings of fact and did not raise any substantial questions of law. Therefore, the appeal filed by the Principal Commissioner of Income Tax was dismissed. The reasoning was that the ITAT's decision, which upheld the deletion of the addition of Rs. 4,85,74,816/- based on the lack of material to support the ATS consideration and compliance with Section 50C, was a factual determination. The court found no legal infirmity in the ITAT's approach to the evidence presented. The issue regarding the Rs. 50,00,000/- token payment, which was conceded by the assessee and remitted by the ITAT, was not the subject of the appeal before the High Court. The operative direction was the dismissal of the appeal.

What were the facts?

The appeal by the Principal Commissioner of Income Tax (Central)-1 challenges the ITAT's order dated April 29, 2019. The dispute concerns an Agreement to Sell (ATS) executed in October 2008 for two land parcels in Village Mehrauli, New Delhi. The ATS showed a total consideration of Rs. 2,97,87,408/- for each parcel, with Rs. 50,00,000/- acknowledged as token payment in cash. The assessee claimed the ATS was not proceeded with due to overcharging by vendors. A Sale Deed was later executed on January 19, 2009, for Rs. 31 Lakhs and Rs. 29 Lakhs for the respective parcels. The Assessing Officer (AO) considered the difference between the ATS consideration and the sale deed value. The CIT(A) deleted an addition of Rs. 4,85,74,816/-, finding no material to establish the transaction at the ATS value and noting compliance with circle rates under Section 50C. The ITAT upheld this deletion but remitted the matter regarding the Rs. 50,00,000/- token payment, which the assessee conceded.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT erred in deleting the addition of Rs. 4,85,74,816/- by holding the assessee's version to be correct without documentary evidence of ATS cancellation, and ignoring settled legal principles? (Question of law and fact, concerning Section 132(4A) and 292C of the Income Tax Act, 1961). 2. Whether the ITAT was justified in shifting the onus to the Income Tax Department when the assessee was liable to explain incriminating seized material under Section 132(4A) and 292C of the Act, and failed to rebut the presumption with cogent evidence like a cancellation deed? (Question of law and fact, concerning Section 132(4A) and 292C of the Income Tax Act, 1961). 3. Whether on the facts and in the circumstances of the case, the ITAT erred in ignoring the standard of evidence (preponderance of probability) adduced by the AO, who had sufficiently proved that the agreement was acted upon? (Question of law and fact). Assessee's contentions: The assessee argued that the ATS was not proceeded with due to overcharging and potential fraud by the vendors. A Sale Deed was subsequently executed at a lower consideration. The CIT(A) deleted the addition of Rs. 4,85,74,816/-, finding no material to support the ATS value and compliance with Section 50C. The ITAT upheld this deletion. Revenue's contentions: The revenue argued that the ITAT erred in deleting the addition without documentary evidence of ATS cancellation and by shifting the onus to the Department. They contended that the assessee failed to rebut the presumption under Section 292C by submitting cogent evidence. The revenue also argued that the AO had sufficiently proved the agreement was acted upon based on the preponderance of probability.

Which sections of the Income-tax Act were involved?

Section 132(4A),Section 292C,Section 50C

AI-generated summary — verify with the full judgment below

$~22 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 920/2019

PR COMMISSIONER OF INCOME TAX (CENTRAL )-1

..... Appellant Through: Mr. Aseem Chawla, SSC with Ms. Pratishtha Chaudhary & Mr. Aditya Gupta, Advs.

versus

SMT. KUNDAN SINGH

..... Respondent Through: Mr. Gaurav Jain & Mr. Manish Yadav, Advs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

12.02.2024

1.

The appellant seeks to question the judgment rendered by the Income Tax Appellate Tribunal [“ITAT”] dated 29 April 2019 and place the following questions of law for our consideration: A. Whether on the facts and in the circumstances of the case the ITAT erred in deleting the addition of Rs. 4,85,74,816/- by holding that version of the assessee to be correct even when no documentary evidence was submitted in support of the contention that the Agreement to Sell [“ATS”] was cancelled and ignoring all settled principles of law? B. Whether the ITAT is justified in shifting onus to the Income Tax Department [“Department”] whereas in law the assessee was liable to furnish explanation on the incriminating seized material under Section 132(4A) and 292C of the Income Tax

Act, 1961 [“Act”] the assessee failed to rebut the presumption under Section 292C by way of submission of cogent evidence such as cancellation/termination/ settlement deed? C. Whether on the facts and in the circumstances of the case the ITAT has erred in ignoring the standard of evidence (preponderance of probability) adduced by the AO in this case wherein the AO has sufficiently proved that the agreement was acted upon? 2. The dispute appears to emanate from an ATS which was executed in favour of the assessee sometime in October 2008. The aforesaid ATS insofar as consideration for the land parcel comprised in Khasra No. 31/7 (0-15) and 31/14 (0-5) situated in the Revenue Estate of Village Mehrauli, New Delhi [hereinafter referred to as “Land Parcel –A”] is concerned, was shown to be Rs.2,97,87,408/-. Insofar as the other land parcel bearing Khasra No. 31/7 (0-18) and 31/14 (0-2) situated in Revenue Estate of Village Mehrauli, New Delhi [hereinafter referred to as “Land Parcel –B”] is concerned, the total sale consideration was shown as Rs.2,97,87,408/-. The ATS thus, comprised of both the aforenoted land parcels. Apart from the above, the ATS also acknowledged a payment of Rs. 50,00,000/-, having been made over in cash and constituting token payment. 3. It was the case of the assessee that upon her husband realizing that the vendors were over-charging and were seeking to defraud, the ATS was not proceeded with further. Ultimately, a Sale Deed came to be executed in respect of Land Parcels A and B on 19 January 2009 for a total consideration of Rs. 31 Lakhs and Rs. 29 lakhs, respectively. It is in the aforesaid backdrop that the case appears to have been taken up for scrutiny by the appellant.

4.

The appellant essentially appears to have taken into consideration the aspect of total sale price as disclosed in the ATS and the sale thereafter being culminated at a much lower rate. They also took into consideration some of the cheques which found mention in the ATS being also referred to in the Sale Deed. 5. The Commissioner of Income Tax (Appeals) [“CIT(A)”] deleted the addition of Rs. 4,85,74,816/- noting that there was no material which could have established that the transaction was undertaken at the consideration value as was mentioned in the ATS. It also found that the valuation of the property was as per the circle rates and thus compliant with the provisions made in Section 50C of the Act. Ultimately, the ITAT has on an overall consideration of the aforesaid, while upholding the deletion of the addition of Rs. 4,85,74,816/- remitted the matter and restricted it to the addition of Rs. 50,00,000/-. Undisputedly, the payment of Rs. 50,00,000/- as token money was an aspect which was conceded to even by the assessee. 6. On an overall consideration of the aforesaid, we find that the judgment impugned is concluded by findings of fact and raises no substantial questions of law. The appeal fails and shall stand dismissed.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. FEBRUARY 12, 2024/kk

More judgments on Section 132(4A)

All 580 judgments and leading authorities on Section 132(4A) →

Recent GST High Court judgments

Search GST case law →