PRINCIPAL COMMISSIONER OF INCOME TAX Vs. KULWINDER SINGH

JUDGEMENT

(1.) This order shall dispose of bunch of six appeals bearing ITA Nos.101, 124, 125 of 2017, 92, 97 and 107 of 2018, as learned counsel for the parties are agreed that the issues involved in all these appeals are similar. However, the facts are being extracted from ITA No.101 of 2017.

(2.) Ita No.101 of 2017 has been preferred by the appellant-revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 1.8.2016, Annexure A.III, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal") in ITA No.659(Asr)/2014 for the assessment year 2009-10, claiming following substantial questions of law:-

(3.) A few facts relevant for the decision of the controversy involved as available on the record of ITA No.101 of 2017 may be noticed. The respondent assessee is engaged in the business of sale/purchase of property. During the course of assessment proceedings under Section 153A read with Section 143(3) of the Act, it was noticed by the Assessing Officer that the respondent-assessee during the financial year 2008-09 relevant to the assessment year 2009-10 had purchased land measuring 2 kanals 10 marlas from Punjab Iron and Steel Co. Limited (PISCO), GT Road, Jalandhar and the same was shown to have been purchased for Rs. 1 crore as per the registered conveyance deed. During the course of search at the residential premises of Shri Vinay Kumar, Accountant of M/s PISCO, a photo copy of duly stamped, witnessed and fully honoured agreement dated 10.5.2007 was found and seized. The said agreement was between Ravneet Takhar son of Ravinder Singh, MD of M/s PISCO and Mohinder Singh Bajwa and Joginder Singh for sale of land measuring 24 kanals 1 marla situated at Village Birring, Jalandhar at the rate of Rs. 11,05,00,000/- per acre. Since the land purchased by the assessee was a part of the same land situated in Village Birring, the Assessing Officer after allowing opportunity of hearing to the assessee and considering his submissions, arrived at a conclusion that the assessee had understated the investment in the purchase of the land and by adopting the same rate as shown in the above mentioned agreement dated 10.5.2007, an addition of Rs. 2,27,00,000/- was made under section 69B of the Act on account of undisclosed investment in the purchase of the land vide assessment order dated 24.3.2014, Annexure A.1. An addition of Rs. 14 lacs was made by the Assessing Officer on account of disallowance of interest expenditure under Section 36(1)(iii) of the Act as the assessee had made interest free advances to his relatives. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income tax (Appeals) [CIT(A)]. Vide order dated 14.8.2014, Annexure A.II, the CIT(A) restricted the addition of Rs. 14 lacs relating to the interest disallowance to Rs. 10,95,795/-. The addition of Rs. 2,27,00,000/- made by the Assessing Officer under section 69B of the Act on account of undisclosed investment in the purchase of the land was deleted by the CIT(A) on the ground that action on the basis of such an agreement even though being a photo copy, could be made in the hands of the parties to the agreement, as the evidence in the case of the income tax proceedings did not have to be in the nature of evidence under Section 65 of the Evidence Act, 1872. Aggrieved thereby, the revenue filed appeal before the Tribunal. Vide order dated 1.8.2016, Annexure A.III, the Tribunal upheld the order passed by the CIT(A) and dismissed the appeal. Hence the instant appeals by the appellant-revenue.