KATTA PRAVEEN KUMAR,HYDERABAD vs. ITO., WARD-7(2), HYDERABAD

Assessee is an individual. According to the learned Assessing Officer he along with his mother and brother sold the property admeasuring 540 sq. yards under document No. 2036/2009, dated 25/6/2009 for a considera�on of Rs. 50 Lacs whereas even as per the sale deed, the value of the property sold as per the state registra�on authori�es was Rs. 86.70 Lacs. Since the assessee did not file any return of income, learned Assessing Officer issued no�ce under sec�on 148 of the Income Tax Act, 1961 (for short “the Act”). Since no�ce could not be served, learned Assessing Officer got it affixed. He issued no�ce under sec�on 143(1) of the Act. Assessee appeared and informed the learned Assessing Officer that there has never been any property as scheduled in the sale deed in existence. and one Smt. Naseema Farhat Begum fabricated document with a view to occupying an area earmarked for park by the Municipal Corpora�on of Hyderabad and obtained the signatures of the assessee, his mother and brother. Assessee informed the learned Assessing Officer that there was no transac�on as evidenced by the sale deed, but it is only a sham and nominal document fabricated for ulterior purposes by Smt. Naseema Farhat Begum. Assessee also informed the learned Assessing Officer that in a suit filed by the said buyer in respect of such property, the competent court, namely, IX Addi�onal Junior Civil Judge, City Civil Court, Hyderabad held that there is no property in existence as men�oned in the sale deed.

Learned Assessing Officer deputed the Inspector a�ached to his office to verify the allega�ons levelled by the assessee and came to know that the GHMC displayed a board claiming ownership of the property in ques�on, and the same thing is evidenced by the encumbrance cer�ficate extracted from the government website. Based on this learned Assessing Officer accepted the conten�on of the assessee that there is no capital gain that had arisen from the transac�on. Learned Assessing Officer, however, observed that s�ll the assessee cannot be absolved from taxing the amount of considera�on he received along with other executants of the fake document because the assessee failed to provide the confirma�on le�er from the buyer of the property about the sale considera�on as to whether it was really passed are not. According to the learned Assessing Officer, since the document was executed before the sub registrar and in the presence of two witnesses, though the document is a fake one, the considera�on must have been passed. On this premise learned Assessing Officer sought to tax a sum of Rs. 16, 66, 660/-towards the assessee is a share of considera�on.

Aggrieved assessee preferred appeal before the learned CIT(A) and pleaded the same thing as he did before the learned Assessing Officer. In addi�on to that the assessee also produced a copy of the judgement of the competent court where the court declared the registra�on of the property in ques�on itself as null and void and such judgement evidences that it was rendered a�er contest. learned CIT(A) further noted that the assessee also provided the order of the court and provided the cer�ficate issued by the registrar cancelling the sale deed. Assessee further pleaded that in order to reach a conclusion that considera�on has passed, it shall be established that there was a property worth conveying and in the face of the regula�ons made by competent courts, it is clear that there has never been any such property in existence. 5. learned AR pleaded that the mother of the assessee is an illiterate woman eking out the livelihood as a housemaid in a few houses and taking advantage of their innocence, the alleged buyer fabricated the documents with an ulterior mo�ve, and having held that the sale is a sham and nominal transac�on, sale deed is a fake document and that there has never been the property in ques�on in existence, the learned Assessing Officer should have understood that in such transac�on no considera�on would be passed. Passing considera�on of Rs. 50 Lacs under a sham and nominal transac�on and a fake document is contrary to ordinary course of human conduct. 6. Per contra, learned DR argued that as rightly observed by the learned CIT(A) no bank statement of the relevant period was provided by the assessee and thereby the assessee did not discharge the onus whether any income accrued to him are not by means of the said the sale transac�on. According to the learned DR, any considera�on received even under a fake document is liable to be taxed. 7. I have gone through the record in the light of the submissions made on either side. I have also perused the copies of the judgements in OS 5395/2009 on the file of the IX Junior Civil Judge, City Civil Court Hyderabad and OS 962/2017 on the file of the II Addi�onal Chief Judge, City Civil Court, Hyderabad wherein a clear finding was returned by the courts that there was a mischief done by the alleged buyer in crea�ng the documents and as a ma�er of fact there has never been any property so men�oned in the sale deed nor the purchaser under the sale deed was ever in possession thereof. For that ma�er, there is no dispute in respect of these findings returned by the competent courts. The authori�es insisted that the assessee must prove that he never received the sale considera�on. According to the assessee, sale considera�on that was never received could not be proved.

Law does not require proof for everything. Admissions, confessions, judicial no�ce, presump�ons etc., do not call for proof in respect of certain ma�ers covered by them. In a case where there is no property at all a document is fabricated for the purpose of appropria�ng a community property and in that design an illiterate lady with her children are implicated, it would be too much to expect that the considera�on of Rs. 50 Lacs should have passed under such a transac�on. It is not as though everything is depending upon the self-serving oral tes�mony of the assessee himself. The competent court declared these facts and even the Revenue does not dispute the same. In this sort of situa�on, it may be presumed that, regard being had to the common course of natural events, human conduct, it is quite unlikely likely that the buyer should have paid Rs. 50 Lacs to assessee, his mother and his brother.

Apart from this fact the assessment order reads that the assessee requested the learned Assessing Officer to summon the buyer of the property in ques�on, namely, Smt. Naseem begum or send a no�ce to her for verifica�on. In spite of the same, the learned Assessing Officer did not think it proper to make some inquiries with the so-called buyer also as to whether she really parted with such huge amount in connec�on with a fake document, or her source or capacity to pay such huge amount. Unless someone pays, the other cannot receive.

Having regard to all these facts and circumstances of the considered opinion that the view taken by the authori�es is not proper and correct, and probabili�es of the case are that in connec�on with a fake document no huge considera�on should have been parted with by the buyer nor the assessee and his family members could have received Rs. 50 lakhs for subscribing a sham document. Learned Assessing Officer believed the assessee that no capital gains have arisen because of the sham and nominal transac�on under a fake document. Except this there is no possibility of assessee receiving any amount from anyone. If the learned Assessing Officer does not believe the capital gains, there is no scope for adding any amount. I, therefore, accept the conten�on of the assessee and direct the learned Assessing Officer to delete the addi�on made. Grounds of appeal