Principal Commissioner Of Income Tax-I, Jodhpur v. Shri Ramlal Choudhary Huf(D.b.income Tax Appeal

PRINCIPAL COMMISSIONER OF INCOME TAX-I, JODHPURVS. SHRI RAMLAL CHOUDHARY HUF(D.B.INCOME TAX APPEAL NO.124/15) Dated:- 6.5.16. HON'BLE MR.JUSTICE SANGEET LODHAHON'BLE MR.JUSTICE KAILASH CHANDRA SHARMA Mr.K.K.Bissa, for the appellant. 1.This appeal is directed against order dated 28.8.14 ofIncome Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur,whereby an appeal preferred by the Revenue against the orderof Commissioner of Income Tax (Appeals) [CIT(A)], Jodhpur,dated 10.1.14, deleting the addition of Rs.74,54,720/- made bythe Assessing Officer (AO) on account of difference in saleconsideration, has been dismissed. 2.The relevant facts are that the assessee filed Return ofincome for the assessment year 2003-04 declaring an income ofRs.35,73,280/-. The assessment was completed by the AOassessing the income at Rs.1,12,89,660/- vide assessment orderdated 23.3.06. The addition was made on account of differencein sale consideration as disclosed by the assessee and actuallyreceived from the purchasers of the plots. Aggrieved by theassessment order, the assessee preferred an appeal before theCIT (A), which deleted the additions made on account of capital gain on the ground that the statements of the purchasers of theplots did not conclusively prove that the amount, over andabove, disclosed in the sale agreement/sale deed was actuallyreceived by the assessee. That apart, the CIT (A) observed thatthe assessee was not extended an opportunity to cross examinethe purchasers, though specifically requested for. The legality ofthe order passed by the CIT (A) was questioned by the Revenueby way of an appeal before the ITAT, which was allowed videorder dated 31.8.09 and the matter was restored to the file ofAO with regard to addition of Rs.74,54,720/- made on account ofdifference between the sale consideration shown by the assesseeand estimated by the AO. In compliance of the directions issuedby the ITAT, the AO framed fresh assessment on 29.11.10computing the income as originally assessed i.e. atRs.1,11,88,663/-. The AO recorded that the assessee failed toavail the opportunity of cross examination as directed by theITAT. The order passed by the AO as aforesaid was appealedagainst by the assessee before the CIT (A). The CIT (A) takinginto consideration the facts of the case that no opportunity wasgiven to the assessee for cross examination, directed the AO togive fresh opportunity of cross examination and in compliancethereof, the AO issued summons under Section 131 of the Act to ten witnesses, out of which six witnesses appeared, who werecross examined by the authorised representative of theassessee. The Joint Commissioner, Income Tax forwarded thereport alongwith the copies of the statements of crossexamination of six persons to the office of the CIT (A) on22.8.13. 3.After due examination of the evidence on record, the CIT(A) arrived at the finding that the oral evidence which form basisof addition, did not survive the legal test of cross examinationand beyond that there was no other reliable documentary or oralevidence to show that the assessee received more amount thanconsideration shown in the agreements for transfer of plots.Accordingly, the addition of Rs.74,44,720/- made by the AO tothe sale consideration, was ordered to be deleted by the CIT (A)and the AO was directed to accept the sale proceeds arising onsale of plots as declared by the assessee. The appeal preferredby the Revenue against the order passed by the CIT (A) standsdismissed by the ITAT. Hence, this appeal. 4.Learned counsel appearing for the appellant contendedthat the order impugned passed by the ITAT in mechanicalmanner without applying the mind, is not sustainable in the eyesof law. Learned counsel would submit that the statements of the 4.Learned counsel appearing for the appellant contendedthat the order impugned passed by the ITAT in mechanicalmanner without applying the mind, is not sustainable in the eyesof law. Learned counsel would submit that the statements of the witnesses during the cross examination by the authorisedrepresentative of the assessee cannot be said to be reliable.Learned counsel would submit that the ITAT should have allowedthe AO to re-examine the witnesses. Learned counsel wouldsubmit that the addition made by the AO on the basis of thestatements of the 9 persons was absolutely justified. On beingpointedly asked by the court as to whether there was anyevidence other than the oral evidence of 9 witnesses out ofwhich 3 did not appear for cross examination, learned counselfor the Revenue fairly submitted that there was no otherevidence on record to substantiate the addition made. 5.We have considered the submissions of the learned counselfor the Revenue and perused the material on record. 6.Indisputably, the addition was made by the AO on thebasis of the statement of the 9 persons recorded in the back ofthe assessee. It is not disputed that pursuant to the directions ofthe CIT (A), the assessee was extended an opportunity to crossexamine the witnesses and accordingly, the summons wereissued by the AO to all the witnesses, however, out of 9witnesses, only 6 witnesses appeared for the cross examination.It is not disputed before this court that in the cross examination,the said witnesses have categorically stated that nothing over and above than disclosed in the sale agreement was paid bythem. It was sought to be contended on behalf of the Revenuebefore the ITAT that the witnesses who appeared for crossexamination was tutored by someone, but there was no evidenceto substantiate the allegation. It is pertinent to note that thewitnesses have categorically admitted that they have beenassessed to tax and had disclosed the investment in their income tax returns as per the sale agreement and no amount was paidby them over and above the amount as disclosed in the return ofincome. Admittedly,there was no evidence brought on record tocontradict the position emerging on record as a result of crossexamination of the witnesses on the basis of whose statements,the addition was made by the AO. In this view of the matter, weare of the opinion that the finding arrived at by the CIT (A), afterdue consideration of the evidence on record, affirmed by theITAT remains finding of facts, which cannot be said to becapricious or perverse. 7.Thus, no substantial question of law arises forconsideration of this court in the present appeal and therefore,the same is hereby dismissed. (KAILASH CHANDRA SHARMA),J. (SANGEET LODHA),J.