SHRI BHARAT SINGH,NEW DELHI vs. ACIT, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: “A”, NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA Nos. 2001 & 3256/Del/2017 Assessment Years: 2008-09 & 2012-13 Shri Bharat Singh, Vs. ACIT, 14, Ashoka Avenue Road, Central Circle-26, New Delhi DLF Farms, Chattapur, New Delhi PAN :AAXPS3124L (Appellant) (Respondent) Appellant by Shri Rajesh Malhotra, CA Respondent by Shri Sanjay Goel, CIT(DR)

Date of hearing 09.01.2019 Date of pronouncement 25.01.2019 ORDER PER O.P. KANT, A.M.: These two appeals by the assessee are directed against two separate orders dated 20/01/2017 and 24/03/2017 passed by the Ld. Commissioner of Income-tax (Appeals)-31, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2008-09 and 2012-13 respectively. Both the appeals, being connected with one assessee, same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of common facts and circumstances of the cases. ITA No.2001/Del/2017 for AY: 2008-09 2. First, we proceed to decide the appeal, bearing, ITA No.2001/Del/2017. The grounds raised by the assessee in ITA

2 ITA No.2001 & 3256/Del/2017 No.2001/Del/2017 for assessment year 2008-09 are reproduced as under: 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in concluding that Learned AO has correctly assumed jurisdiction to assess the assessee u/s 153A/143(3) of the Act, the whole action is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 2. On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming addition of Rs.83,50,000/- on presumption basis that the assessee has received this amount of Rs.83,50,000/- in cash not declared in Registered Sale Deed on account of sale of first floor and barsati of property no. 31, Block J, South Extension Part 1, New Delhi. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 3. On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming the addition of Rs.83,50,000/- objected in ground no. 2 above on the basis of search and seizure conducted and alleged evidences found in premises of third party without following the proper procedure in the law before relying on those evidences therefore action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 4. On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming addition of Rs.83,50,000/- on presumption basis that the assessee has received this amount of Rs.83,50,000/- in cash not declared in Registered Sale Deed on account of sale of another property at ground floor property no. 31, Block J, South Extension Part 1, New Delhi. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 5. On the facts and in the circumstances of the case and in law, the authorities below have erred in making the addition of Rs.83,50,000/- objected in ground no.4 above

3 ITA No.2001 & 3256/Del/2017 on the basis of search and seizure conducted and alleged evidences found in premises of third party without following the proper procedure in the law before relying on those evidences therefore action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law, therefore, it should be quashed. 6. On the facts and in the circumstances of the case and in law, the authorities below have erred in charging interest u/s 234A Rs.5,03,601/-, interest u/s 234B Rs.53,71,740/- and interest u/s 234C Rs.2,07,035/-. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 7. The appellant craves the right to add, submit, alter or withdraw any or all or on the date of hearing. 3. Briefly stated facts of the case are that the assessee, an individual did not file original return of income under the provision of section 139 of the Income-tax Act, 1961 (in short ‘the Act’ ) on the prescribed due date (i.e. 31/07/2008). In subsequent proceedings, the assessee explained that the return was not filed as the total income was below the taxable limit. A search and seizure action under section 132 of the Act was carried out at the premises of the assessee on 11/09/2013 alongwith the other cases of the “AKN” Group. Consequent to search action, notice under section 153A of the Act was issued on 30/06/2014 and served upon the assessee, asking to file the return of income for the assessment year under consideration. In response, the assessee filed return of income on 30/03/2015 declaring total income of Rs.65,712/-. Thereafter, statutory notices were issued and complied with and assessment was completed on 30/03/2016 under section 153A read with section 143(3) of the Act and total additions of Rs.1,67,00,000/- for unexplained sale

4 ITA No.2001 & 3256/Del/2017 consideration received on sale of two properties at the rate of Rs.83,50,000/- each was made to the income returned by the assessee. Before the Ld. CIT(A), i.e., the first appellate authority, the assessee challenged validity of the assessment proceeding as well as merit of the addition. The Ld. CIT(A) in the impugned order upheld both the validity and merit of the addition. Aggrieved with the finding of the Ld. CIT(A), the assessee is in appeal before the Tribunal, raising the grounds as reproduced above. 4. In ground No. 1, the assessee has challenged validity of the assessment completed under section 153A of the Act. According to the assessee, in absence of any incriminating material found from the premises of the assessee, the action of the Assessing Officer in making the assessment under section 153A of the Act is against the law laid down by the Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawala, (2016) 380 ITR 573 (Delhi). 4.1 The facts qua the issue in dispute are that along with a search proceeding carried out at the premise of the assessee, a search action was also carried out at the premise of Sh. Naresh Gupta, resident of R-36, Greater Kailash, New Delhi, wherein certain draft sale deeds were found recorded on the computer hard disk. One of such draft deed (agreement to sell) was found related to the assessee. As per the document, agreement to sell was executed by Sh. Giriraj Singh and Bharat Singh (i.e. the assessee) in favour of Sh. Rajeev Goel, resident of 75, Khan market New Delhi for a total sale consideration of Rs.2,01,00,000/- for 1st floor and ‘Barsati’ of a Freehold plot of land bearing No. 31 in block ‘J’ measuring 267 yd.² situated in the residential colony, South Extension, Part – 1, New Delhi. The

5 ITA No.2001 & 3256/Del/2017 relevant extract of the said document has been reproduced by the Assessing Officer in the assessment order. 4.2 This property was registered with the stamp duty authorities and according to the said registered sale deed, the property was sold at Rs.34,00,000/-. According to the Ld. Assessing Officer, on perusal of the contents of draft of sale of agreement found in the hard disk of computer as well as contents of the registered sale deed, he found that both are same except difference of amount of sale consideration. The Ld. Assessing Officer has reproduced the relevant content of the registered sale deed in the assessment order. 4.3 The documents found from the premises of Shri Naresh Gupta, were confronted to him and his statement was recorded on 08/11/2013, wherein he admitted the fact the document were taken from the hard disk of his computer, however, he denied of having any information/actual detail of money transaction involved in agreement to sale. The relevant part of his statement has been reproduced by the Assessing Officer in the assessment order. 4.4 The Assessing Officer has noted in the assessment order that on the basis of the documents found from the premises of Shri Naresh Gupta, the case of the assessee was reopened after obtaining prior approval of the Range Head, and notice under section 148 of the Act was issued to the assessee for the year under consideration. According to the Assessing Officer, since during the pendency of the reassessment proceeding, the notice u/s 153A of the Act was issued, the reassessment proceedings under section 148 of the Act got abated and thus issue of

6 ITA No.2001 & 3256/Del/2017 understatement of sale consideration was taken in 153A proceedings. 4.5 Before us, the Ld. counsel of the assessee referred to the decision of Hon’ble Delhi High Court in the case of Kabul Chawala (supra) and submitted that no addition could be made under section 153A proceedings in case of completed assessments without any incriminating material found during the course of the search from the premises of the assessee. The Ld. counsel submitted that firstly, the alleged incriminating document in the form of agreement to sale has been found and seized from the premises of the third party and not from the assessee and thus condition of no incriminating material is satisfied. Secondly, the total income of the assessee for the year under consideration was below taxable limit and therefore the assessee was not required to file return of income as per provisions of section 139 of the Act and no proceeding could have been initiated under section 143(1)/143(2) or 143(3) of the Act and, therefore, in this case assessment should be treated as unabated or completed, and the second condition was also satisfied. According to the Ld. counsel, both the conditions for not making additions under section 153A proceeding as laid down in the decision in case of Kabul Chawala (supra) are satisfied and therefore the Ld. CIT(A) was not justified in upholding the validity of addition made by the Assessing Officer in the proceedings under section 153A of the Act, in case of completed assessments without any incriminating material found during the course of search at the residence of the assessee. 4.6 On the contrary, the learned DR referred to the finding of the Assessing Officer that on the basis of the documents found

7 ITA No.2001 & 3256/Del/2017 from the premises of Sh. Naresh Gupta and statement of Sh. Naresh Gupta recorded on 08/11/2013, the case of the assessee for the year under consideration was reopened by way of issue notice under section 148 of the Act and the reassessment proceeding were pending as on the date of issue of notice u/s 153A of the Act. According to him, on account of the notice u/s 153A of the Act, the reassessment proceeding got abated. The Ld. DR submitted that once the reassessment proceedings under section 148 of the Act were pending, which got abated due to notice u/s 153A of the Act, the assessment cannot be treated as completed and the condition of completed assessment for not making any addition under section 153A of the Act is not satisfied. Thus, the ratio of the decision in the case of the Kabul chawla (supra) cannot be imported in the facts of the instant case. Accordingly, the Ld. counsel justified the finding of the Ld. CIT(A) in upholding the validity of the proceedings under section 153A of the Act. 4.7 We have heard the rival submissions and perused the relevant material on record. In view of the decision of the jurisdictional High Court in the case of Kabul Chawala (supra) for making addition in proceedings under section 153A of the Act, two conditions of completed assessment and incriminating material found from the premises of the assessee have to be fulfilled simultaneously. In the instant case, the Assessing Officer has mentioned that assessment in the case of the assessee was reopened by way of issue notice under section 148 of the Act and those reassessment proceeding under section 148 were pending on the date of issue of notice u/s 153A of the Act. This fact has not been contorted by the assessee either before the Assessing

8 ITA No.2001 & 3256/Del/2017 Officer or before the Ld. CIT(A). In view of this uncontroverted fact, we are bound to conclude that as on the date of the issue of notice u/s 153A of the Act, assessment proceedings were pending in the case of the assessee, which got abated. Hence, the contention of the assessee that no assessment proceedings were pending in the case of the assessee, is rejected. As the one of the condition required for holding addition made under section 153 proceedings as valid in terms of decision of Kabul Chawala (supra) has not been satisfied, we do not find any infirmity in the finding of the Ld. CIT(A) on this issue and accordingly we uphold the same. The ground No. 1 of the appeal of the assessee is dismissed. 4.8 The Ld. counsel of the assessee made one more proposition to challenge the validity of proceedings under section 153A of the Act. According to him, the material found during the course of the search at the premise of Sri Naresh Gupta, belonged to the assessee and as per the procedure laid down in the provisions of the Act, the assessment was to be completed under section 153C of the Act. In our opinion, the material found from the premise of the Sh Naresh Gupta is digital record of the draft deed maintained in the computer of Sh. Naresh Gupta, Advocate (deed writer), which belonged to him. As the information contained in said agreement to sell was merely related to the assessee. The said document was prepared in ordinary course of his profession and thus he was rightful owner of the document, though the document contained related information to the assessee, it belongs to Sh. Naresh Gupta only. Therefore, the Assessing Officer correctly reopened the assessment under the provisions of section 147 of the Act. Since the said reassessment proceedings

9 ITA No.2001 & 3256/Del/2017 under section 147 of the Act were found to be pending as on the date of issue of notice u/s153A of the Act, the Assessing Officer is justified in completing the assessment under the provisions of section 153A of the Act. Accordingly, the ground No. 1 of the appeal challenging the validity of proceeding under section 153A of the Act is dismissed. 5. The ground No. 2 and 3 of the appeal are related to challenge of addition on merit in respect of first floor of the property under reference. In the grounds, the assessee has challenged the addition made on presumption basis as well as addition made without following the proper procedure in law before relying on the alleged evidences found from the premises of the third party. 5.1 According to the Assessing Officer, transaction mentioned in the agreement to sell was actually made by the concerned parties. The Assessing Officer also observed the detail mentioned in the registered sale deed related to mode of payments and those payment details tallied with the details mentioned in the agreement to sell except cash payments. On the basis of these observation, the learner Assessing Officer is of the view that the assessee alongwith his co-owner has received the difference of the above documents i.e. Rs. 1.67 crores in cash from the buyer i.e. Sh. Rajiv Goel and thus 50% of the this amount which works out to Rs.83,50,000/-has been received by the assessee over and above the sale consideration declared in the registered sale deed. Before the Ld. CIT(A), the assessee challenged that the document was found in the search of the premises of third-party and therefore, neither presumption under section 132(4A) of the Act can be invoked against the assessee, nor any kind of evidentiary

10 ITA No.2001 & 3256/Del/2017 value in such document can be assumed. The assessee also filed a copy of letter from Sh. Naresh Gupta stating that during the course of drafting various instruments, data from the master document is copied and sometimes during such cutting/pasting, data of some other file is also copied by mistake, which shows various discrepancies/variance as per the actual figures/ amounts/terms. Relying on said letter, it was submitted that the document found was only cut paste over the documents and same does not reflect any kind of nature of contract or transaction and has no relevance. The assessee also submitted an affidavit, wherein he stated that no cash was received over and above the sale consideration recorded in the registered sale deed. The Ld. CIT(A) forwarded the additional evidences in the form of the affidavit of the assessee etc to the Assessing Officer for his comment. The Assessing Officer submitted that the affidavit filed by the assessee was a self declaration. The Assessing Officer submitted that provisions of section 292C of the Act are applicable in the instant case and according to which contents of any books of accounts or the documents or asset, which have been delivered to the Requisitioning Officer in accordance with the provisions of section 132A of the Act, has to be taken as correct. In the rejoinder filed, the assessee submitted that the document is unsigned by either party; the document seized from the premises of the third party is not having evidentiary value under section 132(4A)/292C; the third party, i.e., Sh. Naresh Gupta has confirmed that it is a cut paste method of drafting and does not reflect any type of nature of contract and no other evidence has been gathered by the Assessing Officer to substantiate the case. The assessee also submitted that copy of

11 ITA No.2001 & 3256/Del/2017 the said document i.e. agreement to sale found from the premises of Sri Naresh Gupta was not supplied to the assessee, however on the instruction of the Ld. CIT(A), the Assessing Officer provided a copy of the said document to the assessee. After considering the submission of the assessee in the remand report, the Ld. CIT(A) confirmed the addition observing as under: “7. I have considered the impugned order, the submission of the appellant, the remand report furnished by the Id. AO, the rejoinder of the appellant, the facts of the case on record and the position of the law. The Id. AO added undisclosed sale consideration in the form of cash received on the sale of a house property located in one of the posh colonies of the city. The basis of addition was a draft of 'agreement to sell' found on the computer of the appellant’s deed writer. The appellant argued that the same was only a draft and no cash as mentioned therein was received. It is seen that the details mentioned in the registered sale deed like mode of payments and the amounts tallied with the same mentioned in the 'agreement to sell' except for the cash payments e.g. Rs.5 lakhs and Rs.10 lakhs have been mentioned as paid by cheque in both the documents. The appellant has also admitted the above. It is trite that every document has to be considered in its entirety. It is not possible to consider one part of document as true and other part as not. If the cheque component is verifiable and found to be true then the cash component is also bound to be true. In the case of Glass Line Equipments Co. Ltd. Vs. CIT (2002) 99 ITD 177, it has been held that as per presumption if one part of document is true, the other part of document will also be true. Hence, it is clear that the said draft deed was prepared only on the direction of the appellant and the portion mentioning cash was subsequently deleted at the time of preparation of final registered deed. As a result, it was concluded that the appellant along with the co-owner received the difference of the two amounts, i.e. Rs.1.67 crore in cash from Sh. Rajiv Goel, the buyer. Since the share of the appellant in the property was 50%, half of the sale consideration over and above the registered price, i.e. Rs.83,50,000/- [50% of Rs.1,67,00,000/- (Rs.2,02,00,000/- less Rs.34,00,000/-) was added in the hands of the appellant. 7.1 In the given facts and circumstances, the probability of preponderance weigh more in favour of revenue. The appellant has not denied that the said deed writer was not the one who prepared the final deed for him or the former never had any contact with the latter. In view of the above, the affidavits filed by the appellant are nothing more than after thoughts and self serving documents. In the case of CIT versus Nova Promoters and Finlease (P) Ltd. (342 ITR 169), Hon'ble Jurisdictional High Court has held as under:

12 ITA No.2001 & 3256/Del/2017

"25. In the light of the above facts, the evidentiary value of the affidavits is open to serious doubts. The Indore Bench of the Madhya Pradesh High Court in the case of Smt. Gunwati Bai Rati Lai vs. CIT(MP) 146 ITR 140 explained the judgment of the Supreme Court in the case of Mehta Parikh and Company vs. CIT (Supra) and held that the said decision cannot be considered to have laid down the proposition that unless the deponents of the affidavits are cross-examined, the affidavits cannot be dejected. It was explained that the decision of the Supreme Court lays down "that if there is no material whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross-examination for bringing out the validity of their statements, then the Tribunal would not be justified in doubting the correctness of the statement made by the deponents in the affidavits Thus the affidavits need not be accepted as reliable when there is enough material on record to doubt the veracity of the transaction. In such a case it cannot be said that the affidavits can be rejected only after cross examination. In the present case, there is enough material on record to negate the claim of genuineness of the transactions and in the light of over-whelming material, the plea that the AO should not have rejected the affidavits without cross- examination, of the deponents has no force. The said exercise has resulted in complete miscarriage of justice." 7.2 Having carefully gone through the provisions of sec 292C of the Act, I agree with Id. AO that sub section (2) of the said section is applicable on the appellant in view of which the onus was on him to explain the contents of the 'agreement to sell' 5.2 Before us, the Ld. counsel of the assessee filed a paper book, combined for both the appeals for assessment year 2008-09 and 2012-13, containing pages 1 to 115. The Ld. the counsel argued, firstly that no incriminating material was found from the premises of the assessee and the completed assessment cannot be disturbed by the Assessing Officer in view of the decision of the Hon’ble High Court in the case of Kabul Chawala (supra). Secondly, the Ld. counsel argued that the provisions of section 292C of the Act relied upon by the Ld. CIT(A) are not applicable in the case of the assessee as the document on the basis of which

13 ITA No.2001 & 3256/Del/2017 addition has been made, was found from the premise of third- party and thus the presumptions under section 292C 132(4A) of the Act cannot be invoked against the assessee. In support of the contention, the Ld. counsel relied on the decision of the Hon’ble Delhi High Court in the case of PCIT Vs. Vinita Chaurasia, 82 taxmann.com 153 (Delhi) wherein it is held that presumption under section 292C attract only qua the person from whom the document has been seized and not against the other person. Thirdly, the Ld. counsel argued that the draft agreement to sale printed from the hard disk of computer owned by Sh. Naresh Gupta is an unsigned copy and thus cannot be admitted as an evidence against the assessee. According to him, Sh. Naresh Gupta himself has admitted that it was prepared as cut and paste from other documents, which resulted in mentioning of cash payment and he denied of having any knowledge of monetary transaction between the buyer and seller. The Ld. counsel also submitted that the assessee has affirmed on the affidavit that no cash component was received from the seller. The Ld. counsel also submitted that no enquiry has been carried out by the Assessing Officer from the buyer of the property and statements recorded, if any, of the buyer of the property had not been provided to the assessee. In support of the contention that the addition made on the basis of single document, without any further investigation or enquiry from the broker etc is bound to be rendered unsustainable in law, the learner counsel relied on the decision of the Hon’ble Delhi High Court in the case of Vinita Chaurasia (supra). The Ld. counsel also relied on the decision of the Hon’ble Delhi High Court in the case PCIT Vs. Manoj Hora, ITA 1045 of 2017, wherein it is held that the presumption under

14 ITA No.2001 & 3256/Del/2017 section 132(4) arises in case of the search party. The Ld. counsel also relied on the decision of the coordinate bench of the Tribunal in the case of Ramniwas Asha Rani Lakhotia Trust Vs ACIT in ITA No. 425/del/2015 for assessment year 2006-07, wherein the addition made on the basis of Excel sheet found from the hard disk of the third party was not found to be sustainable in law. 5.3 We have heard the rival submissions and perused the relevant material on record, including paper-book filed by the assessee. In the instant case addition of Rs.83,50,000/- has been made on the basis of a document found from the hard disk of computer of deed writer Sh. Naresh Gupta. This document is a draft of agreement to sell of the first floor of the property of the assessee, which was sold to buyer namely Sh. Rajeev Goel. Print out of this document was taken from the hard disk seized from the premise of Sh. Naresh Gupta. A copy of this unsigned agreement to sell found in the hard disk of the deed writer, has been filed at pages 95 to 106 of the paper book. The relevant para of the document on page 99 of the paper book reads as under: “NOW THIS AGREEMNT TO SELL WITNESSETH AS UNDER: This in consideration of the sum of Rs.2,01,00,000/- (Rs. Two Crores One Lac Only), out of which a sum of Rs.70,00,000/- (Rs. Seventy Lacs Only), as advance money has been received by the Vendors from the Vendee, in the following manner: Rs. 55,00,000/- in cash Rs. 5,00,000/- vide Cheque No……………dated…….. Rs. 10,00,000/- vide Cheque No………… dated……….. both drawn on……………………. the receipt of which the Vendors hereby admit and acknowledge and the balance sum of Rs. 1,31,00,000/- (Rs. One Crore Thirty One Lacs Only), will be paid by the Vendee to the Vendors on or before…….(time being the essence of this contract), the Vendors do hereby agree to grant, convey, sell, transfer and assign all their rights, titles and interests in the said portion of the said property, fully described above, together with proportionate undivided indivisible and impartible ownership rights in the said plot of land measuring 267 Sq. Yds., to the Vendee, on the terms and conditions

15 ITA No.2001 & 3256/Del/2017 herein contained provided that nothing herein stated shall confer or deemed to have conferred upon the Vendee exclusively any right or title to the common staircase, overhead water tanks, sewers, water meters and other common facilities to the exclusion of the Vendors and or the Vendee or owners or occupants of the other units of the said building. That the actual physical vacant possession of the said portion of the said property will be delivered by the Vendors to the Vendee, on receiving the balance sale consideration. That on or before………….,the Vendors(on receiving the balance sale consideration) will execute and get the sale deed of the said portion of the said property registered, in favour of the Vendee or his nominee/s.”

5.4 A copy of a registered sale deed in respect of the above property has been placed on pages 4 to 26 of the paper book. According to the registered sale deed, the property has been sold for total consideration of Rs.34 lakh. The detail of the payment received of Rs.34 lakh is mentioned on page 21 of the paper book. For ready reference, said detail is reproduced as under: “That in consideration of the sum of Rs. 34,00,000/— (Re. Thirty Four Lacs Only), which has received by the Vendors f ram the Vendee, in fallowing manner;- Rs.5,00,000/- vide Cheque No. 965677, dated 26.08.2007 Rs. 10,00,000/- vide Cheque No. 965678, dated 26.08.2007 Re.12,00,000/- vide Cheque No.965684, dated 04.10.2007 Rs.7,00,000/- vide Cheque No. 965685, dated 04.10.2007 the receipt of which the Vendors hereby admit and acknowledge, in full arid final settlement, the Vendors do hereby grant, convey, sell, transfer and assign all their rights, titles and interests in the said portion of the said property, fully described above, together with proportionate undivided indivisible and impartial ownership rights in the said plot of land measuring 267 Sq, Yds., to the Vendee, on the terms and conditions herein contained provided that nothing herein stated shall confer or deemed to have conferred upon the Vendee exclusively any right or title to the common staircase, overhead water tanks, sewers, water meters and other common facilities to the exclusion1 of the Vendors end or the Vendee or owners or occupants of the other units of the said building. That the actual physical vacant possession of the said portion of the said property has been delivered by the Vendors to the Vendee on the spot.

16 ITA No.2001 & 3256/Del/2017 Now the Vendors have been left with no right, title, interest, claim on concern of any nature with the said portion of the said property and the Vendee has become the absolute owner of the said portion of the said property, with full right to use and enjoy the same as absolute owner without any objection/ hindrance by the Vendors or any other person claiming through or under the Vendors.”

5.5 According to the Assessing Officer the entries of cheque payment of Rs. 5 lakh and 10 lakh mentioned in the draft agreement to sell found in the course of search at Shri Naresh Gupta, matches with the first two entries of payment received mentioned in the registered sale deed. The assessee has admitted of receipt of these two cheque payments. The Ld. CIT(A) has held that every document has to be considered in its entirety and it is not possible to consider one part of the document as true and other part as not. The Ld. CIT(A) has relied on the decision of the Glass Line equipment company limited versus CIT (2002), 99 ITD 177 wherein it is held that as per presumption if one part of the document is true, the other part of the document will also be true. The Ld. CIT(A) has concluded that the said draft deed was prepared only on the direction of the assessee and the portion mentioning cash was subsequently deleted at the time of the preparation of the final register deed. 5.6 The issue before us is that whether in view of the above document, can it be presumed that the assessee received payment in cash of Rs.83,50,000/-in addition to the amounts recorded in registered sale deed . 5.7 The first argument of the Ld. counsel is that no incriminating material was found from the premises of the assessee. According to him, the said draft agreement to sell has been found from the premises of the 3rd party and therefore no

17 ITA No.2001 & 3256/Del/2017 addition could have been made in terms of section 153A of the Act following the decision of the Hon’ble Delhi High Court in the case of Kabul Chawala(supra). We are not convinced with this argument of the Ld. counsel. We have already observed in earlier paras of this order that in this case the reassessment proceedings were initiated under section 147 of the Act, which were abated due to the action under section 153A of the act and thus the ratio of making no addition in the case of Kabul Chawala(supra) does not apply in the facts of the instant case. 5.8 As regard to the argument that no presumption can be made under section 292C of the Act against the assessee, we find that presumption made u/s 292C of the Act that contents of documents are true, can be invoked when the document is found in the possession or in the control of the person in the course of search or survey proceedings. But, in the instant case, the said document in the form of draft agreement to sell has been found from the possession of third party i.e. Sh. Naresh Gupta. Hon’ble Delhi High Court in the case of Vinita Chaurasia (supra) in the identical circumstances held that presumption can be drawn only against the search person. The relevant part of the judgment is reproduced as under: “ 24. In the present case, however, it is nobody‟s case other than the Revenue that the document found in the premises of Mr. Lalit Modi belongs to the Assessee. Mr. Shivpuri referred to Section 292 C of the Act for the purposes of drawing two presumptions (i) the one contained in Section 292 C (1) (i) to the effect that the document found in possession of a person should be presumed to belong to such person. As far as this is concerned, clearly, since the document was found in possession of Mr. Modi, the presumption, if at all, is attracted only qua Mr. Lalit Modi and not the Assessee herein.” 5.9 The finding of the Assessing Officer the document has been requisitioned under section 132A of the Act and, thus, provisions

18 ITA No.2001 & 3256/Del/2017 of section 292C(2) would apply in the case is also not correct, as no such record has been produced before us to show that the said document has been requisitioned by the Assessing Officer in terms of section 132A of the Act. Accordingly, we hold that the addition in dispute cannot be sustained on the ground that the assessee failed to rebut the presumption under section 132(4A) or presumption under section 292C of the Act. 5.10 Further, we find that the conclusion of the Ld. CIT(A) that the assessee received cash payment of Rs.83,50,000/-, is based on the presumption that said draft agreement to sell was prepared on the direction of the assessee. The Assessing Officer has recorded the statement of Sh. Naresh Gupta, a copy of which is available on page 85 to 88 of the paper book. The relevant part of his statement is reproduced as under: “Q.12 I am showing you printouts taken from the hard disk seized from your office premises R- 36 GK Part -I, New Delhi, in which contain various agreement to sell and sale deeds. In view of the fact and circumstances (a) Why these document should not be treated as belong to you u/s 132(4A) of the I T Act, 1961. (b) Why those should not be treated as true? Ans. The printouts of the documents shown to me taken from the hard disk from my office is pertaining to my various clients, it does not pertain to me in many manner whatsoever. These documents are drafted under the instruction of my various clients in discharge of my professional duty/obligation. Any other information/actual details of money transaction is not my knowledge. Any other details pertaining to the same is protected under the privileged communication under the Indian evidence Act.”

5.11 Subsequently, the assessee filed a letter from Sh. Naresh Gupta, wherein he has submitted that said draft deed was as a result of preparation of document by way of cut-and-paste of

19 ITA No.2001 & 3256/Del/2017 paragraphs from other documents. A copy of the said letter is available on page 3 of the paper book. Content of the said letter are reproduced as under: Dated: 19.03.2016 “The ACIT, Circle 26, New Delhi, Sub: In the case of Bharat Kumar, for the assessment year 2008-2009, (Reference property No. J-31, N.D.S.E.-I, New Delhi), Sir, I state that I am in to profession of providing consultancy services to my various Clients j regarding Real Estate Matters. During the course of consultancy, I do draft various documents under the instruction of Clients. Sometimes under the instructions of seller, sometimes under the instructions of Purchaser and sometimes under the instructions of Real Estate Agents. I do not remember as to under whom instruction I drafted the document picked-up from my hard disk, regarding property No. J-31, situated N.D.S.E.-I, New Delhi. That during the course of drafting of various instruments, data from the Master Document is copied and sometimes during such cutting/ pasting, data of some other file is also copied by mistake, which shows various discrepancies / variance as per the actual figures/ amounts/ terms. Therefore simply picking up file from the hard disk of the Computer will not reflect true nature of the contract. True nature of the contract can only be gathered from the contracting parties only. Regards Sd/- NARESH GUPTA (ADVOCATE)”

5.12 On perusal of the statement and letter of Sh. Naresh Gupta, we find that though he initially admitted that draft document was prepared on the direction of the assessee, however, he has denied of any knowledge of information/actual details of money transaction between the buyer and assessee. No other evidence corroborating the payment in cash by the buyer to the assessee has been either found in the course of the search or collected in the course of assessment proceedings by the Assessing Officer,

20 ITA No.2001 & 3256/Del/2017 which could substantiate receipt of alleged cash amount recorded in the draft agreement to sale. 5.13 It is undisputed that the draft agreement to sell is not signed either by the purchaser or the seller. The author of the draft has denied any knowledge of alleged payment recorded in the draft. No other evidence, like a statement of the buyer or any valuation report regarding the sale value of the property are available on record. In our opinion, unless there are enough corroborative evidence to show that the payments as noted in the draft agreement to sell was actually received by the assessee, no addition can be made in the hands of the assessee merely on the basis of unsigned draft agreement to sale. The finding of the Ld. CIT(A) that part of the document is found to be true and thus the balance should also be treated as true is not correct and instant case the entire document found is a draft prepared by the deed writer, which is not signed by any of the party mentioned in the said draft. Such an unsigned document cannot be made basis of presumption that the assessee received cash on sale of the property. The assessee has been subjected to search but no other documentary evidence of receipt of cash by the assessee has been found in the course of the search. We also note that no attempt has been made by the Assessing Officer to make an enquiry from the buyer or to ascertain the prevalent market value of the property sold by the assessee. 5.14 In view of the aforesaid discussion, we are of the opinion that no addition can be sustained only on the basis of the unsigned draft agreement to sell found from the premises of the third party and that too without any corroborative evidences. Accordingly, we set aside the order of the Ld. CIT(A) and the

21 ITA No.2001 & 3256/Del/2017 Assessing Officer on the issue in dispute and direct the Assessing Officer to delete the addition of Rs.83,50,000/- for alleged cash received on sale of 1st floor of the property under reference. The grounds No. 2 and 3 of the appeal are, accordingly, allowed. 6. In ground 4 and 5 of the appeal, similar addition of Rs.83,50,000/- has been made in respect of the ground floor of the same property sold by the assessee on the basis of the draft agreement to sale discussed in Grounds No. 2 and 3 of the appeal. The Grounds No. 2 and 3 of the appeal have already been allowed and thus, to have consistency in our decision on the issue in dispute, the ground no. 4 and 5 of the appeal are also allowed. 7. In the result, appeal of the assessee is allowed partly.

ITA No. 3256/Del/2017 for AY: 2012-13 8. The grounds raised in the appeal by the assessee are reproduced as under: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs. 65,08,020 on account of long term capital gain on sale of agriculture land. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 2. On the facts and in the circumstances of the case and in law, the authorities below have erred in charging interest u/s 234A Rs.1,76,336/-, interest u/s 234B Rs.7,05,347/- and interest u/s 234C Rs.87,053/-. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 3. The appellant craves the right to add, submit, alter or withdraw any or all grounds of appeal before or on the date of hearing.

22 ITA No.2001 & 3256/Del/2017

23 ITA No.2001 & 3256/Del/2017 'previously left over parts of village Ghata’ and various other villages are now included in the Municipality of Gurgaon. In response, as per rejoinder dated 22.03.2017, Ld. ARs admitted that it has been mentioned in the aforesaid notification that left over parts of village Ghata shall be covered under the Municipality of Gurgoan, however, such left over parts are not defined in either the said notification dated 23.03.2010 or in the earlier notification dated 02.06.2008. 7.3 The aforesaid arguments of the appellant are nothing but an attempt to circumvent the issue and beat around the bush. The Tehsildar, Sohna, time and again reported that Village Ghata falls within Municipal limits of Gurgaon. The same also emerges from the notification dated 23.03.2010 issued by the Government of Haryana which specified that all the previously left over parts of Village Ghata and various other villages shall be covered under the Municipal limits of Gurgoan. This clearly means that earlier only a part of village Ghata was under the Municipal limits; whereas, subsequently vide notification 23.03.2010, the remaining parts were also brought under the Municipal limits. On the basis of the above, it can be said that without any doubt the land in question falls in the Municipal limits, and therefore, it is not an agricultural land and hence I hold that the capital gain on the sale of the above has rightly been taxed by Ld. AO. The action of the AO is, therefore, confirmed.”

24 ITA No.2001 & 3256/Del/2017 finding of the fact recorded by the Ld. CIT(A) that the land in question was situated within the 8 km of the limits of the Municipal Corporation, the sale of the land is liable to provisions of the capital gain. In view of the above, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute, accordingly we uphold the same. The ground No. 1 of the appeal is, accordingly, dismissed. 11. In ground No. 2, the assessee has challenged levy of interest in the section 234A, 234B and 234C of the Act. The levy of the interest is consequential to the addition made by the Assessing Officer. As we have already upheld the said addition, the ground No. 2 of the appeal is also dismissed. 12. In the result, the appeal of the assessee is dismissed. 13. In summary, the appeal of the assessee having ITA No. 2001/Del/2017 for assessment year 2008-09 is partly allowed, whereas appeal of the assessee having ITA No. 3256/Del/2017 for assessment year 2012-13 is dismissed.

Order is pronounced in the open court on 25th January, 2019.

Sd/- Sd/- [AMIT SHUKLA] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25th January, 2019. RK/-[d.t.d.s] Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi