COMMISSIONER OF INCOME TAX Vs. KANHAIYA LAL

JUDGEMENT

(1.) THE appeals of the three assessees, and deleting the additions made by the AO, which were confirmed by the learned CIT(A).

(2.) THE necessary facts are, that block assessment of the three assessees was made for the period 1989 -90 to 1998 -99. The background facts are, that search and seizure operations were conducted on the premises of certain persons, which which certain documents were found and seized. Panchnama was prepared. Documents included an agreement of sale of the property, called Indore Coffee House at Chittorgarh, which was sold by three assessees Kanhaiyalal Gurnani, Mohanlal Gurnani and Smt. Leela Devi to Akhtar Hussain, Iqbal Hussain and Akram Hussain (Nabi Group). This 18,71,001, while the property was sold vide three registered sale deeds for a total value of Rs. 3 lacs, i.e. for Rs. 1 lac, by each of the assessees. On these facts, the AO made a total addition of Rs. 15,71,001, being the difference amount between the price shown in the registered sale deed and the agreement, said to have been recovered during search, and divided the amount between the three assessees in equal shares. This addition was confirmed, as is observed above, by the learned CIT(A), which was challenged in further appeal before the learned Tribunal. The learned Tribunal allowed the appeals, by finding, in the detailed impugned judgment running into 53 pages, inter alia, that the agreement found is not a complete document. The other two papers did not appear to form part of this agreement. Apart from that, they are not signed, and other various attending circumstances were appreciated, and noticed by the learned Tribunal.

(3.) THE appeals were admitted by this Court by framing following substantial question of law : "Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the additions of Rs. 5,23,667 made by the AO as share of the assessee in the concealed sale consideration and the findings reached by the Tribunal in this connection are perverse - the originals of the papers, which are said to have been seized, during the course of search. After receipt of the record, transaction of purchase and sale, and the amount involved, being very huge, being more than Rs. 15 lacs, and since the purchasers are also the regular assessees, on whose premises search and seizure operations were conducted, a query was put to the learned counsel for the Revenue, as to what had been the outcome of the block assessment proceedings against the purchasers.