SMT. GURJEET KAUR,JALANDHAR vs. INCOME TAX OFFICER, WARD- IV (2),, JALANDHAR

PER BENCH : The present appeals filed by the assessee are directed

against the respective orders passed by the Commissioner of Income-Tax

(Appeals)-2, Jalandhar, dated 19.07.2017, which in turn arises from the

orders passed by the A.O u/ss. 147/143(3) of the Income-Tax Act, 1961

(for short ‘Act’), dated 30.03.2016 for A.Y 2008-09 AND dated 30.12.2016

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for Assessment Year 2009-10. As the issues involved in the present appeals

are inextricably interlinked or in fact interwoven, therefore, the respective

appeals are being taken up and disposed off by way of a common order.

We shall first take up the appeal filed by the assessee for A.Y 2008-09,

wherein the impugned order has been assailed before us on the following

grounds :

“1. That on the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) {C1T(A)} has grossly erred in law in rejecting ground of appeal of the assessee that impugned assessment framed u/s 143(3)/147 of the Act is without assumption of valid jurisdiction and as such is illegal and bad in law.

a) Certified true copy of agreement alleged to have been executed by the assessee in favour of some Surjit Singh has never been provided to the assessee in spite of repeated requests.

b) Department is in possession of photocopy of agreement alleged to have been executed by the assessee in favour of Surjit Singh. Agreement in original is not available with the department.

c) Statement of alleged witnesses who have admitted that alleged agreement was executed in their presence was recorded at back of the

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assessee and alleged witnesses were not made available for cross examination though request to this effect was made.

a) Honorable Supreme Court Judgment in the case of Smt. J. Yashodha vs. Smt. K. Shobha Rani dated 19.04.2007 SLP (C) No. 12625 of 2005 wherein it has been held that photocopy of a document is not admissible evidence in terms of Indian Evidence Act, 1872.

b) Hon’ble Punjab and Haryana High Court Judgment in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588: 236 CTR 466 (P&H) wherein it has been held “There is well known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to Section 91 of the Act when terms of a contracts, grants or other dispositions of property has been reduced to the form of a documents then no evidence is permissible to be given in proof of any such terms of such grant or disposition of the property except the document itself or the secondary evidence thereof

a). No query on cash deposits in saving bank account of the husband of the assessee was ever made during the assessment proceedings.

b). During the appeal proceedings, copy of assessment order u/s 143(3) of the Act in the case of Kulwant Singh husband of the assessee

4 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

was filed to prove genuineness of cash deposits in his saving account which has not been considered by learned CIT(A).

c). Without prejudice to issues raised in (a) & (b) above, even otherwise also no adverse inference can be drawn in the case of the assessee since her husband is independent assessee.

2008-09 on 09.01.2009, declaring an income of Rs. 3,64,110/- a/w

agriculture income of Rs. 7,88,964/-. Information was received by the A.O

from the Dy. Director of Income-tax (Investigation), Ludhiana, that the

assessee had executed an “agreement to sell”, dated 25.02.2008 with one

Shri. Surjit Singh S/o. Sh. Mohan Singh, R/o. 1548-D, Model Town

(Extension), Ludhiana, wherein she had agreed to sell her land

admeasuring 09 Kanal - 03 Marla (i.e 5535 sq. yards) situated at Village :

Daad, Pakhowal Road, Ludhiana for a consideration of Rs. 7,19,55,000/-

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i.e 5,535 sq. yards @ Rs. 13,000/- per sq. yard and, out of the aforesaid

sale consideration had received an amount of Rs. 1.5 crore as earnest

money on 25.02.2008 from Shr. Surjit Singh (supra). As per the aforesaid

information shared by the Dy. DIT (Inv.), Ludhiana, the balance sale

consideration was to be received by the assessee in tranches, viz. amount

of Rs. 1.5 crore was to be paid by 16.05.2008, while for the sale deed was

to be executed latest by 03.12.2008. Further, as per the information,

registered sale deed for part of the land in question was executed by the

assessee on 08.10.2008 in favour of certain third parties, viz. (i). Sh. Vipan

Kumar Goyal, 101-A, Agar Nagar, Ludhiana (30%); (ii). Sh. Suresh Jain,

r/o. Krishna Nagar, Civil Lines, Ludhiana (15%) (iii). Smt. Silky Jain, r/o.

127, New Jawahar Nagar, Jalandhar (20%); (iv). Sh. Tushal Goyal S/o. Sh.

Surinder Kumar Goyal, r/o. Sukhmoney Enclave, South Canal, Ludhiana

(15%); and (v). Sh. Naveen Jain S/o. Sh. Tarsem Jain, r/o. Krishna nagar,

Ludhiana (15%). Observing, that though the assessee had entered into an

“agreement to sell” with Sh. Surjit Singh (supra), and in lieu thereof, had

as on 25.02.2008 received earnest money of Rs. 1.50 crore from him,

however, the sale deed was executed not in his favour, but in favour of

certain third parties, the A.O held a belief that the aforesaid consideration

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of Rs. 1.50 crore (supra) having been received by the assessee without any

consideration was liable to be assessed in her hands u/s 56(2)(vi) of the

Act. Backed by the aforesaid facts, the A.O holding a belief that the income

of Rs. 1.50 crore (supra) of the assessee that was chargeable to tax had

escaped assessment, thus, reopened his case u/s 147 of the Act.

Objections raised by the assessee as regards the validity of the

reassessment proceedings were disposed off by the A.O vide his order

dated 05.06.2015. Rebutting the adverse inferences that the A.O had

sought to draw on the basis of the aforesaid “agreement to sell” (supra),

the assessee dubbed the same as a forged document, and claimed to have

sold the land in question vide a registered sale deed, dated 08.10.2008.

However, the A.O was not persuaded to subscribe to the aforesaid claim of

the assessee. Observing, that the witnesses to the “agreement to sell”,

viz. S/sh. Rishikesh Verma and Baldev Raj (since deceased) had in the

course of the proceedings before the Dy. DIT (Inv.), Ludhiana admitted

that the “agreement” in question was executed in their presence and the

assessee had signed the same in their presence, the A.O rejected the claim

of the assessee that she had not executed the said “agreement”. Further,

the fact that the sale deed of the land in question was executed on

7 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

08.10.2008, i.e, within the stipulated time period within which the same

was to be executed as per the “agreement to sell”, i.e, latest by

03.12.2008, also did weigh in the mind of the A.O for rejecting the claim of

the assessee that the same was a dumb document. In so far the routing of

the unaccounted sale consideration was concerned, the A.O was of the

view that the same was deposited in the bank accounts of the assessee’s

husband, viz. Shri. Kulwant Singh, a property dealer by profession, i.e (i).

A/c No. 0165201900016 (Joint account of Sh. Kulwant Singh a/w his

father); (ii). A/c No. 0165101023514 with Canara Bank, Branch: BMC

Chowk, Jalandhar; (iii). A/c No. 0165201900013 with Canara Bank, Branch

:BMC Chowk, Jalandhar; (iv). A/c No. 0165201900014 with Canara Bank,

Branch: BMC Chowk, Jalandhar; (v). A/c No. 0165201900016with Canara

Bank, Branch: BMC Chowk, Jalandhar. In order to fortify his conviction that

the funds of the assessee were being managed by her husband, viz. Sh.

Kulwant Singh, the A.O had tried to draw support from the fact that a FDR

drawn in the name of the assessee was sourced out of the amount that

was transferred from his bank account. Backed by his aforesaid

observations, the A.O acting upon the contents of the “agreement to sell”,

therein, held the amount of Rs. 1.50 crore received by the assessee as

8 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

earnest money from Sh. Surjit Singh (supra), as the unexplained money of

the assessee within the meaning of Sec. 69 of the Act. Accordingly, on the

basis of his aforesaid deliberations, the A.O vide his order passed u/s 147

r.w.s 143(3), dated 30.03.2016 assessed the income of the assessee at Rs.

1,53,64,110/- a/w agriculture income of Rs. 7,88,960/-.

CIT(A). Before the CIT(A), the assessee on the basis of his multi facet

contentions assailed both the validity of the jurisdiction that was assumed

by the A.O for framing the assessment u/s 147 r.w.s 143(3), dated

30.03.2016, as well as on merits challenged the addition of Rs. 1.50 crore

(supra) that was made by him, viz. (i). the A.O had though reopened the

assessment on the ground that an amount of Rs. 1.50 crore (supra)

received by the assessee from Sh. Surjit Singh (supra) without any

consideration was liable to be assessed u/s 56(2)(vi) of the Act, however,

in the absence of any addition having been made as regards the reason on

the basis of which the case of the assessee was reopened, the assessment

framed by him u/s 147/143(3), dated 30.03.2016 was liable to be quashed;

(ii). that the addition made as regards the alleged on-money of Rs. 1.50

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crore (supra) received by the assessee on sale of her land in question

could not have been assessed u/s 69 of the Act; (iii). that no adverse

inferences could have validly been drawn on the basis of a photocopy of

the “agreement to sell”; (iv). that the assessee despite persistent requests

had not been confronted with the original “agreement to sell” in question;

(v). that the A.O in his ‘remand report’ had admitted that though he had

received from the Dy. DIT(Inv.), Ludhiana a copy of the “agreement to

sell”, dated 25.02.2008, while for the Dy. DIT(Inv.), Ludhiana in his letter

dated 16.12.2016 had informed the A.O that the Original “agreement to

sell” was not available with him.; (vi). that the statements of S/sh. Baldev

Raj (since deceased) and Rishikesh Verma, witnesses to the impugned

“agreement to sell” that were used by the A.O for drawing of adverse

inferences were recorded at the back of the assessee; (vii). that despite

requests no cross-examination of Sh. Rishikesh Verma, witness to the

‘agreement’ had been facilitated by the department; (viii). that no adverse

inferences had been drawn by the department in the case of the alleged

purchaser, viz. Sh. Surjit Singh, and in fact the reassessment proceedings

that were initiated in his case for A.Y 2008-09 had been dropped by his

A.O vide her order passed u/s 147/148(3), dated 23.03.2016; (ix). that the

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bank accounts held by the assessee’s husband, viz. Sh. Kulwant singh, a

regular income-tax assessee (PAN: ABQPS5509K), pertained to his petrol

pump business etc., and was duly accounted for by him in his personal

books of accounts; (x). that the case of Sh. Kulwant Singh (supra) for the

year under consideration, i.e, A.Y 2008-09 was selected for scrutiny

assessment and his returned income was accepted as such; (xi). that the

sale consideration disclosed in the registered sale deed, dated 08.10.2008

was to be accepted to have been received by the assessee and no oral

evidence would have any superseding effect on the same; (xii). that the

fact that the circle rate of the property in question at the time of sale was

Rs. 15 lac per acre, while for the same had been sold by the assessee @

Rs. 38 lac per acre, substantiated the genuineness of the sale transaction

under consideration; (xiii). that the alleged sale consideration of Rs. 7.19

crore (as per the “agreement to sell”) was 50 times the circle rate, which,

thus clearly revealed the falsity of the contents of the said document; and

(xiv). that copy of sale deed of an adjoining piece of land @ Rs. 20 lac per

acre which was much below the rate at which the assessee had sold his

land i.e @ Rs. 38 lac per acre substantiated the authenticity of the sale

consideration at which the assessee had executed the sale transaction.

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However, the CIT(A) was not persuaded to subscribe to the aforesaid

contentions of the assessee and upheld both the validity of the

reassessment, as well as the addition of Rs. 1.50 crore made by the A.O.,

observing as under :

“4.9 Having considered the detailed evidence placed on record, I find that reasons recorded by the AO for initiation of reassessment proceedings are in conformity with the evidence placed on record. I also find that is an accepted fact that sale of property has been made by the appellant. The appellant has state that no amount was received under the agreement to sell as neither the property was sold to the person with whom agreement was entered into nor any original agreement to sell could be produced by the A.O. It is a matter of common knowledge that once an agreement to sell is entered into then a period of 3 to 6 months is provided under that agreement for payment of remaining consideration and execution of sale deed. During this period the person who has paid the biana retains the option under the agreement to register the property in the name of any person. In this case also, the position is similar as per the evidence available on record. The signatures of the appellant have been confirmed by the husband of the appellant in his statement and sale consideration has been received by the appellant.

4.10 It is also a common knowledge that malaise of on-money is widely prevalent in all real estate transactions where the circle rate fixed for the purpose of payment of stamp duty on execution of sale deed is much below the prevalent market price of the property. This fact of receipt of on-money under the agreement to sell by the appellant stands amply proved by the quantum of cash deposits made in the bank accounts of the appellant and family members. Hence, I do not find force in the contentions of the appellant and the judicial decisions relied upon are found to be distinguishable on account of differences in factual matrix of the case. Further, I find that the agreement to sell is not a dumb document and authenticity of the same stands established in the course of enquiries conducted by the investigation wing. Accordingly, I hold that AO was justified in treating an amount of Rs. 1.50 crores as unexplained money of the appellant u/s 69 of the IT Act. “

Accordingly, the CIT(A) finding no merit in the appeal of the assessee

dismissed the same.

12 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

carried the matter in appeal before us. We have heard the ld. Authorized

Representatives for both the parties, perused the orders of the lower

authorities and the material available on record, as well as considered the

judicial pronouncements that have been pressed into service by the ld. A.R

to drive home his respective contentions. Controversy involved in the

present appeal lies in a narrow compass, i.e, as to whether or not the

lower authorities are right in law and the facts of the case in acting upon

the copy of the “agreement to sell”, dated 25.02.2008, for concluding, that

the assessee had sold the land in question for a consideration of Rs. 7.19

crore (approx.), as therein stated, and not for the consideration as stated

in the registered sale deed, dated 08.10.2008, and thus, had received an

earnest money of Rs. 1.50 crore on 25.02.2008 i.e during the year under

consideration?. Before proceeding any further, we may herein observe that

the entire case of the department rests upon the copy of the “agreement

to sell”, dated 25.02.2008, and its contents thereof, on the basis of which it

has been inferred by the A.O that the assessee had sold her land in

question for a consideration of Rs. 7.19 crore, i.e, 5535 Sq. yards @ Rs.

13,000/- per Sq. yard, and not as per the sale consideration reflected in

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the registered sale deed, dated 08.10.2008. At this stage, we may herein

observe, that as to what is the source of the copy of the “agreement to

sell” that was made available to the A.O by the Dy. DIT (Inv.), Ludhiana, is

neither discernible from the records, nor anything in support thereof on a

specific query that was raised by the bench, as regards the same, was

brought to our notice by the ld. D.R. Be that as it may, it is an admitted

fact that the “agreement to sell”, dated 25.02.2008 is not a document that

was found in possession or control of the assessee in the course of any

search or survey proceedings conducted upon her, which would have

otherwise triggered the presumption as regards the correctness or

truthfulness of the contents thereof as provided in clause (ii) of sub-section

(1) to Sec. 292C or sub-section (4A) of Sec. 132 of the Act. As is

discernible from the records, we find that the A.O in his ‘remand report’

that was filed in the course of the proceedings before the CIT(A), had fairly

admitted that he had only received a copy of the “agreement to sell”,

dated 25.02.2008 from the Dy. DIT (Inv.), Ludhiana, and the latter on a

specific request by him vide his letter dated 09/15.12.2016, had reverted

back, and vide his letter dated 16.12.2016 intimated that no such original

agreement was available with him during the inquiry proceedings. Backed

14 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

by the aforesaid facts, we shall herein look into the sustainability of the

adverse inferences that have been drawn by the lower authorities on the

basis of the contents of the copy of the “agreement to sell”, dated

25.02.2008 in the backdrop of the other circumstantial evidences

/observations. Before proceeding any further, we may herein observe, that

the assessee in the course of the proceedings before the lower authorities

had time and again requested for a certified copy of the “agreement to

sell”, dated 25.02.2008, which however was never made available to her.

At this stage, we would not hesitate to observe, that as stated by the ld.

A.R, and rightly so, it has been held by the Hon’ble Supreme Court in the

case of Smt. J. Yashodha Vs. Smt. K. Shobha Rani, Appeal (Civil) 2060 of

2007, dated 19.04.2007, that an uncertified photocopy of a document

cannot even be taken as a secondary evidence under Sec. 63 of the Indian

Evidence Act, 1872. Also, we find, that a similar view, that a photocopy of

a document in the absence of the original document has no evidentiary

value had been arrived at in various judicial pronouncements as had been

relied upon by the ld. A.R before us, viz. (i). Moosa M. Madha & Azam S.

Madha Vs. CIT (1973) 89 ITR 65 (SC); (ii). Ram Saroop Saini, HUF Vs.

ACIT (2007) 26 CCH 246 (Delhi)(Trib); (iii). Arati Bhargava (Ms.) Vs. Shri.

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Kavi Ram Bhargava, order dated 10.05.1999, AIR 1999 Delhi 280; (iv).

ACIT Vs. Kulwinder Singh, ITA No. 930, 931 of 2009; (v). DCIT Vs. Vijy

Kumar, ITA No. 930, 931 of 2009 (Hyd); and (vi). Shri. Krishan Gopal,

Prop. M/s Kay Pee Lock Inds. Vs. ITO, Ward 39(1), New Delhi, ITA No.

3249/Delhi/2015. On the basis of our aforesaid deliberations, we are

unable to subscribe to the standalone reliance placed by the lower

authorities on the contents of the uncertified copy of the “agreement to

sell”, dated 25.02.2008. At this stage, we may herein observe, that the sale

consideration disclosed in a registered sale deed has to be accepted to

have been received by the seller, and once the said registered document

contains all the terms and conditions, then, no oral evidence is permissible

to be given in an attempt to prove that the consideration disclosed in the

said registered document had not changed hands. Our aforesaid view is

fortified by the judgment of the Hon’ble High Court of Punjab & Haryana in

the case of Paramjit Singh Vs. ITO (2010) 323 ITR 588 (P&H). We, thus, in

terms of our aforesaid observations are of the considered view, that the

sale consideration qua the transaction of sale of land in question, as

disclosed in the registered sale deed, dated 08.10.2008, could not have

been dislodged by the A.O on the basis of the contents of an uncertified

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copy of an “agreement to sell”, dated 25.02.2008, which on the basis of

our aforesaid observations would not even be in the nature of a secondary

evidence within the meaning of Sec. 63 of the Indian Evidence Act, 1872.

evidences/documents, as well as observations of the lower authorities on

the basis of which they have tried to support the adverse inferences qua

the sale transaction in question. As observed by us hereinabove, one of the

issue that had weighed in the mind of the A.O for concluding that the

assessee had executed the “agreement to sell”, dated 25.02.2008 was that

the two witnesses to the said agreement, viz. (i). Shri. Baldev Raj Taneja

S/o. Sh. Ram Rang R/o. 29, Partap Colony, Model Gram, Ludhiana; and (ii).

Shri. Rishikesh Verma S/o. Sh. Kundan Lal Verma, R/o. 999/6, Rama

Mandi, Jalandhar, had in the course of the inquiries carried out by the Dy.

DIT (Inv.), Ludhiana, stated that the “agreement to sell”, dated 25.04.2008

was executed in their presence and Smt. Gurjeet Kaur, i.e, the assessee

had signed the same in their presence. As is discernible from the records,

the assessee in the course of the assessment proceedings, had requested

the A.O, that as the statements of the aforesaid persons, viz. S/sh. Baldev

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Raj Taneja and Rishikesh Verma were recorded at his back, therefore, their

cross-examination be facilitated to him. As one of the witness, viz. Shri.

Baldev Raj Taneja had expired on 30.05.2015, therefore, the A.O in order

to facilitate the cross-examination of the other person, viz. Shri. Rishikesh

Verma had issued summons to him u/s 131 of the Act, dated 27.03.2016,

therein directing him to attend his office on 30.03.2016, and had endorsed

a copy of the summons to the assessee, with a direction, that either she or

her authorized representative be present on the said date so that the

aforementioned person may be cross-examined. However, we find, that as

on the stipulated date though the assessee’s counsel remained present, but

the aforesaid person, viz. Shri. Rishikesh Verma did not attend, as a result

whereof his cross-examination could not be carried out. Backed by the

aforesaid facts, we are of the considered view, that as the assessee despite

specific requests had not been facilitated a cross-examination of the

witnesses, therefore, their statements could not have been acted upon by

the A.O for drawing of adverse inferences in the hands of the assessee.

Our aforesaid view is fortified by the judgment of the Hon’ble Supreme

Court in the case of Andaman Timber Industries Vs. Commissioner of

Central Excise, Kolkata-II, Civil Appeal No. 4228 of 2006, dated

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02.09.2015, wherein the Hon’ble Apex Court had observed, that the failure

to give the assessee the right to cross-examine the witnesses whose

statements were relied upon would result in breach of principles of natural

justice, which being a serious flaw may render the order as nullity. Also, we

find that various Hon’ble High Courts, have concluded, that the action of

the A.O in acting upon the statement of a third party that was recorded at

the back of the assessee, without affording a cross-examination to the

assessee despite specific requests was not sustainable, viz. (i). CIT Vs.

Sanjeev Kumar Jain (2009) 77 CCH 53 (P&H); (ii). Kishinchand Chellaram

Vs. CIT (1980) 48 CCH 716 (SC); (iii). Sona Electric Company Vs. CIT

(1984) 52 CCH 103 (Del); and (iv). CIT Vs. Pradeep Kumar Gupta (2006)

74 CCH 975 (Del). In the backdrop of our aforesaid observations, we are of

a strong conviction, that the statements of the aforesaid persons which

were recorded at the back of the assessee, could not have been acted

upon by the A.O for drawing of adverse inferences in the hands of the

assessee, i.e, without facilitating the necessary cross-examination to the

assessee despite his specific requests for the same. Admittedly, one of the

witness, viz. Shri. Baldev Raj Taneja had expired on 30.05.2015, i.e, in the

course of the assessment proceedings, therefore, there could have been no

19 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

occasion for the A.O to have facilitated his cross-examination. But then, in

so far the other witness, viz. Shri. Rishikesh Verma (supra) is concerned,

we are of the considered view, that as the as the assessee despite specific

requests had had remained divested of an opportunity to cross-examine

the said person, all the more for no fault no on her part, therefore, his

statement lost its evidentiary value and could not have been pressed into

service by the A.O for drawing of adverse inferences in the case of the

assessee. We, thus, in the backdrop of our aforesaid deliberations are of

the considered view, that the statements of the aforesaid witnesses, viz.

S/shri. Baldev Raj Taneja and Rishikesh Verma that were admittedly

recorded at the back of the assessee, therein, de hors any opportunity to

the assessee to rebut the same, thus, could not have been used for

drawing of adverse inferences in his case.

the on-money received by the assessee on the sale of land in question was

deposited in the bank accounts of her husband, viz. Shri. Kulwant Singh, a

property dealer by profession, viz. (i). A/c No. 0165201900016 (Joint A/c of

Sh. Kulwant Singh a/w his father); (ii). A/c No. 0165101023514 with

20 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

Canara Bank, Branch : BMC Chowk, Jalandhar; (iii). A/c No.

0165201900013 with Canara Bank, Branch : BMC Chowk, Jalandhar; (iv).

A/c No. 0165201900014 with Canara Bank, Branch : BMC Chowk,

Jalandhar; (v). A/c No. 0165201900016 with Canara Bank, Branch : BMC

Chowk, Jalandhar. As noticed by us hereinabove, the aforesaid bank

accounts pertained to the various lines of business of Shri. Kulwant Singh

(supra), a regular income-tax assessee (PAN ABQPS5509K), and the same

were duly accounted for by him in his personal books of accounts. Apart

from that, as stated by the ld. A.R, the case of Sh. Kulwant Singh (supra)

for the year under consideration, i.e, A.Y 2008-09 was selected for scrutiny

assessment, and his returned income was accepted as such. On a perusal

of the records, we find, that the A.O in order to support his view that the

funds of the assessee were being managed by her husband, viz. Shri.

Kulwant Singh (supra), had drawn support from the fact that a FDR drawn

in the name of the assessee was sourced out of the amount that was

transferred from the bank account of her husband. In our considered view,

the very basis adopted by the A.O, for inferring, that the alleged on-money

received by the assessee on sale of the land in question was deposited in

the bank accounts of her husband, viz. Shri. Kulwant Singh, we would not

21 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

shirk to observe, is nothing short of a baseless assumption, which we are

afraid had been attempted to be triggered to give effect to a pre-

determined view. As observed by us hereinabove, the cash deposits in the

bank accounts of Shri. Kulwant Singh (supra), a regular income-tax

assessee, as had been referred by the A.O in the body of the assessment

order are his duly disclosed bank accounts that were accounted for by him

in his personal books of accounts. In fact, as had been brought to our

notice by the ld. A.R, and not rebutted by the ld. D.R, the case of Shri.

Kulwant Singh (supra) for the year under consideration was selected for

scrutiny assessment wherein his returned income was accepted as such.

Backed by the aforesaid factual matrix, we are of the considered view, that

the observations of the A.O that the cash deposits in the bank accounts of

Shri. Kulwant singh (supra) were sourced from the on-money that was

received by the assessee, being devoid and bereft of any substance and,

being nothing short of an allegation in the thin air, cannot be subscribed on

our part. We, thus, in the backdrop of our aforesaid deliberations vacate

the observations of the A.O that the alleged on-money received by the

assessee on sale of the land in question was deposited by her in the bank

accounts of her husband, viz. Shri. Kulwant Singh (supra).

22 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

from the circle rate of the land in question that was sold by her, for two

fold reasons, viz. to drive home the authenticity of the sale transaction that

was executed by her vide registered sale deed, dated 08.10.2008; and to

demonstrate that the sale rate as per the alleged “agreement to sell”,

dated 25.02.2008 being manifold the rates prevailing in the area was

beyond comprehension. As observed by us hereinabove, as against the

circle rate of the property in question at the time of sale, i.e, Rs. 15 lac per

acre, the assessee had executed the sale transaction @ Rs. 38 lac per acre,

which in our considered view does lend credence, or, in fact, substantiates

the genuineness of the sale consideration that had exchanged hands as

disclosed in the registered sale deed. Apart from that, it was the claim of

the assessee, that considering the circle rate of the land in question, the

alleged sale rate as per the “agreement to sell”, dated 25.02.2008 was 50

times of the same, which, thus clearly revealed the falsity of the contents

of the said document. Also, the assessee had in order dispel all doubts as

regards the sale consideration that was received as per the registered sale

deed, dated 08.10.2008, had drawn support from a comparative

23 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

transaction of sale of an adjoining piece of land that was carried out vide a

registered sale deed @ Rs. 20 lac per acre. We find that the A.O had

summarily brushed aside the aforesaid facts as were brought to his notice

by the assessee for two fold reasons, viz. (i) to support the authenticity of

the sale transaction that was executed by him vide registered sale deed,

dated 08.10.2008; and (ii). to impress upon him that the alleged

“agreement to sell”, dated 25.02.2008 was a forged/fabricated document.

In our considered view, not only the A.O had failed to prove that the

assessee had sold the land in question at the sale consideration mentioned

in the copy of the “agreement to sell”, dated 25.02.2008, and had on the

basis of flimsy grounds drawn adverse inferences qua the transaction of

sale executed by the assessee vide a registered sale deed; but rather, had

put the assessee in a situation where she was required to disprove the

“agreement to sell”, dated 25.02.2008. i.e, a dumb document and its

contents thereof. In our considered view, the support drawn by the

assessee from, viz. the circle rate of the property in question that was

prevailing at the time of execution of the sale deed; and the rate at which

an adjoining piece of land during the relevant period was sold, undeniably

had a strong bearing in not only proving that the land in question was sold

24 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

as per the consideration disclosed in the registered sale deed, but was also

indispensably instrumental in proving the falsity of the “agreement to sell”,

dated 25.02.2008, and the contents thereof. We, thus, are not inclined to

subscribe to the view taken by the lower authorities that the aforesaid

circle rate and the comparative sale transaction had no bearing on the

adjudication of the issue in hand.

the lower authorities, i.e, now when no adverse inferences had been drawn

by the department in the case of the alleged purchaser, viz. Sh. Surjit

Singh, and in fact the reassessment proceedings that were initiated in his

case for A.Y 2008-09 were dropped by the A.O vide her order passed u/s

147/148(3), dated 23.03.2016, therefore, the said fact supports the falsity

of the contents of the “agreement to sell”, dated 25.02.2008. Admittedly,

as is discernible from the records, the reassessment proceedings that were

initiated by the department in the case of the aforementioned alleged

purchaser, viz. Shri Surjit Singh (supra), were thereafter dropped by the

ITO, Ward 6(8), Ludhiana. In our considered view, the fact that no adverse

inferences had been drawn by the A.O in the case of the alleged purchaser,

25 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

viz. Shri. Surjit Singh, at the first blush lends credence to the assessee’s

claim that the “agreement to sell”, dated 25.02.2008 being a

forged/fabricated document, was thus, for the said reason not acted upon

by the department in the case of the alleged purchaser; but then, in the

absence of the complete details of the case of Shri. Surjit Singh, i.e the

basis for reopening of his case; reason for dropping of the reassessment

proceedings etc., we would refrain from drawing any inferences. Be that as

it may, in our considered view, the A.O instead of brushing aside the

aforesaid claim of the assessee ought to have made necessary verifications

as regards the reasons leading to reopening, as well as dropping of the

reassessment proceedings in the case of the alleged purchaser, viz. Shri.

Surjit Singh (supra), and also as to what was the latter’s claim as regards

the alleged transaction of purchase of land in question before his A.O, and

should not have summarily discarded the same. Be that as it may, in the

absence of the complete details as regards the aforesaid issue, we refrain

from commenting on the aforesaid claim of the assessee.

grossly erred in law and the facts of the case in assessing the alleged

26 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

suppressed sale consideration/on-money as the assessee’s unexplained

money u/s 69 of the Act. Before adverting any further, we shall for the

sake of clarity cull out Sec. 69, which reads as under :

“ 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.” As stated by the ld. A.R, and rightly so, as Sec. 69 caters to unexplained

investments of an assessee which are not recorded in his books of

accounts, if any, maintained by him for any source of income, therefore,

the same could not have been triggered for bringing to tax the alleged on-

money stated to have been received by the assessee on sale of land in

question. In our considered view, receipt of on-money cannot be brought

within the meaning of unexplained investment. But then, on a careful

perusal of the assessment order, we find, that the A.O had triggered the

provisions of Sec. 69, for the reason, that the assessee had deposited the

on-money in the bank accounts of her husband, viz. Shri. Kulwant Singh.

However, as we have already vacated the view taken by the lower

authorities that the alleged amount of on-money received by the assessee

27 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

was parked in the bank accounts of her husband, viz. Shri. Kulwant Singh,

therefore, the applicability of Sec. 69 of the Act is ousted on the said count

itself. Be that as it may, as we have already vacated the addition made by

the A.O on the basis of the contents of the uncertified copy of a

“agreement to sell”, dated 25.02.2008, which has been held by us as a

dumb document that could not have been acted upon by the A.O,

therefore, we refrain from adverting any further qua the validity of

invocation of Sec. 69 of the Act.

the “agreement to sell”, dated 25.02.2008 as a dumb document, thus, set-

aside the order of the CIT(A) and vacate the addition of Rs. 1.50 crore

(supra) made by the A.O.

our observations recorded hereinabove.

ITA No. 628/Asr/2017 A.Y 2009-10

28 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

the impugned order passed by the CIT(A) has been assailed before us on

the following grounds :

“1. That on the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) (CIT(A)} has grossly erred in law in rejecting ground of appeal of the assessee that impugned assessment framed u/s 143(3)/l47 of the Act is without assumption of valid jurisdiction and as such is illegal and bad in law.

a). Certified true copy of agreement alleged to have been executed by the assessee in favour of some Surjit Singh has never been provided to the assessee in spite of repeated requests.

b) Department is in possession of photocopy of agreement alleged to have been executed by the assessee in favour of Surjit Singh. Agreement in original is not available with the department.

c). Statement of alleged witnesses who have admitted that alleged agreement was executed in their presence was recorded at back of the assessee and alleged witnesses were not made available for cross examination though request to this effect was made.

29 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

a) Honorable Supreme Court Judgment in the case of Smt. J. Yashodha vs. Smt. K. Shobha Rani dated 19.04.2007 SLP (C) No. 12625 of 2005 wherein it has been held that photocopy of a document is not admissible evidence in terms of Indian Evidence Act, 1872.

b)Hon’ble Punjab and Haryana High Court Judgment in the case of Paramjit Singh vs. ITO (2010) 323 ITR 588: 236 CTR 466 (P&H) wherein it has been held

“There is well known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act) incorporate the aforesaid principle. According to Section 91 of the Act when terms of a contracts, grants or other dispositions of property has been reduced to the form of a documents then no evidence is permissible to be given in proof of any such terms of such grant or disposition of the property except the document itself or the secondary evidence thereof’.

a). No query on cash deposits in saving bank account of the husband of the assessee was ever made during the assessment proceedings.

b). During the appeal proceedings, copy of assessment order u/s 143(3) of the Act in the case of Kulwant Singh husband of the assessee was filed to prove genuineness of cash deposits in his saving account which has not been considered by learned CIT(A).

c). Without prejudice to issues raised in (a) & (b) above, even otherwise also no adverse inference can be drawn in the case of the assessee since her husband is independent assessee.

30 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

made by Ld. Assessing Officer that husband of the appellant failed to attend the proceedings before the AO. is without any material on records and this was never case of the assessing officer.

2009-10 on 30.03.2010, declaring an income of Rs.4,31,880/- a/w

agriculture income of Rs. 8,83,880. Information was received by the A.O

from the Dy. Director of Income-tax (Investigation), Ludhiana, that the

assessee had executed an “agreement to sell”, dated 25.02.2008 with one

Shri. Surjit Singh S/o. Sh. Mohan Singh, R/o. 1548-D, Model Town

(Extension), Ludhiana, wherein she had agreed to sell her land

admeasuring 09 Kanal - 03 Marla (i.e 5535 sq. yards) situated at Village :

31 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

Daad, Pakhowal Road, Ludhiana for a consideration of Rs. 7,19,55,000/-

i.e 5,535 sq. yards @ Rs. 13,000/- per sq. yard, and had out of the

aforesaid sale consideration received an amount of Rs. 1.5 crore as earnest

money on 25.02.2008 from Shr. Surjit Singh (supra). As per the aforesaid

information shared by the Dy. DIT (Inv.), Ludhiana, the balance sale

consideration was to be received by the assessee in tranches, viz. (i).

amount of Rs. 1.5 crore was to be paid by 16.05.2008; while for the sale

deed was to be executed latest by 03.12.2008. Further, as per the

information, a registered sale deed for part of the land in question was

executed on 08.10.2008 in favor of certain third parties, viz. (i). Sh. Vipan

Kumar Goyal, 101A, Agar Nagar, Ludhiana (30%); (ii). Sh. Suresh Jain, r/o.

Krishna Nagar, Civil Lines, Ludhiana (15%) (iii). Smt. Silky Jain, r/o. 127,

New Jawahar Nagar, Jalandhar (20%); (iv). Sh. Tushal Goyal S/o. Sh.

Surinder Kumar Goyal, r/o. Sukhmoney Enclave, South Canal, Ludhiana

(15%); and (v). Sh. Naveen Jain S/o. Sh. Tarsem Jain, r/o. Krishna nAgar,

Ludhiana (15%). Backed by the aforesaid facts, the A.O holding a belief

that the income of Rs. 7,19,55,000/- of the assessee for the year under

consideration, i.e, A.Y 2009-10 that was chargeable to tax had escaped

assessment, thus, reopened her case u/s 147 of the Act. Objections raised

32 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

by the assessee as regards the validity of the reassessment proceedings

were disposed off by the A.O vide his order dated 02.12.2016. Rebutting

the adverse inferences that the A.O had sought to draw on the basis of the

aforesaid “agreement to sell” (supra), the assessee dubbed the same as a

forged document, and claimed that she had sold the land in question vide a

registered sale deed, dated 08.10.2008. However, the A.O was not

persuaded to subscribe to the aforesaid claim of the assessee. Observing,

that the witnesses to the “agreement to sell”, viz. S/sh. Rishikesh Verma

and Baldev Raj (since deceased) had in the course of the proceedings

before the Dy. DIT (Inv.), Ludhiana admitted that the agreement was

executed in their presence and the assessee had signed the same in their

presence, the A.O rejected the claim of the assessee that she had not

executed the said agreement. Also, the fact that the sale deed of the land

in question was executed on 08.10.2008, i.e, within the stipulated time

period within which the same was to be executed as per the “agreement to

sell”, i.e, latest by 03.12.2008, also did weigh in the mind of the A.O for

rejecting the claim of the assessee that the same was a dumb document.

In so far the routing of the alleged unaccounted sale consideration, i.e, on-

money was concerned, the A.O was of the view that the same was

33 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

deposited in the bank accounts of the assessee’s husband, viz. Shri.

Kulwant Singh, a property dealer by profession, i.e (i). A/c No.

0165201900016 (Joint A/c of Sh. Kulwant Singh a/w his father); (ii). A/c

No. 0165101023514 with Canara Bank, Branch : BMC Chowk, Jalandhar;

(iii). A/c No. 0165201900013 with Canara Bank, Branch : BMC Chowk,

Jalandhar; (iv). A/c No. 0165201900014 with Canara Bank, Branch : BMC

Chowk, Jalandhar; (v). A/c No. 0165201900016 with Canara Bank, Branch :

BMC Chowk, Jalandhar. In order to fortify his conviction that the funds of

the assessee were being managed by her husband, viz. Sh. Kulwant Singh,

the A.O had tried to draw support from the fact that a FDR drawn in the

name of the assessee was sourced out of the amount that was transferred

from his bank account. Backed by his aforesaid observations, the A.O

acting upon the contents of the “agreement to sell”, as well as drawing

support from his observations that were recorded by him while framing the

assessment in the case of the assessee for the immediately preceding year

i.e A.Y 2008-09, therein, held that the assessee had sold the land in

question for a consideration of Rs. 7,19,55,000/-. Observing, that the

assessee had executed the registered sale deed, dated 08.10.2008, i.e,

during the year under consideration, the A.O adopting the aforesaid

34 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

amount of sale consideration assessed the LTCG of Rs. 6,83,21,705/- as

the undisclosed capital gains in her hands.

CIT(A). Although the CIT(A) principally concurred with the A.O, however,

taking cognizance of the fact that an amount of Rs. 1.50 crore was already

brought to tax by the A.O while framing the assessment in the case of the

assessee for the immediately preceding year, i.e, A.Y 2008-09, which

thereafter had been upheld by his predecessor, the CIT(A) directed the A.O

to re-compute the capital gain after reducing the amount of Rs. 1.50 crore

which had already been brought to tax in the preceding year. Accordingly,

the CIT(A) partly allowed the appeal.

carried the matter in appeal before us. At the very outset, it was submitted

by the ld. Authorized representatives of both the parties, that the facts and

the issue involved in the preset appeal remained the same as was there

before us in the assessee’s appeal for the immediately preceding year, i.e.

for A.Y 2008-09 in ITA No, 627/Asr/2017. As the facts and the issue

involved in the present appeal remains the same as were there before us in

35 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

the assessee’s appeal for the immediately preceding year, i.e, A.Y 2007-08,

therefore, our order therein passed shall apply mutatis mutandis for the

purpose of disposing off the present appeal for A.Y 2009-10 in ITA No.

628/Asr/2017. As we have while disposing off the assessee’s appeal for A.Y

2008-09 in ITA No. 627/Asr/2017 held the “agreement to sell”, dated

25.02.2008 as a dumb document, therefore, on the same premises we

herein vacate the addition of LTCG of Rs. 6,83,21,705/-, to the extent the

same had been sustained by the CIT(A).

aforesaid observations.

627/Asr/2017 for A.Y 2008-09 and ITA No. 628/Asr/2017 for A.Y 2009-10

are allowed in terms of our aforesaid observations.

Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962, by placing the details on the notice board.

Sd/- Sd/- (Dr. M.L. Meena) (Ravish Sood) Accountant Member Judicial Member Date: 21.02.2022 **GP/Sr./PS*

36 Smt. Gurjeet Kaur Vs. ITO-Ward 3(4), Jalandhar ITA No. 627 & 628/Asr/2017 – A.Y 2008-09 & 2009-10

Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T True copy By Order