Per Shri G. Santhanam, Accountant Member - This is an appeal by the assessee against the order of the Commissioner of Income-tax (Appeals). - (1.)
(2.) The assessee along with certain others purchased certain house property from one Smt. Razia Begum. The Registered deed showed a consideration of Rs. 4,00,000. A search was carried out by the Income-tax Department at the resident of Smt. Razia Begum and her two daughters Smt. Anees Ali and Smt. Rafat Zaheer. Cash amounting to Rs. 7,56,600 was found out of which Rs. 7,20,000 was seized as per the following details : judgement_13338_tlit0_19880.htm During the course of the search operation statements were recorded under section 132(4) from the above ladies. Smt. Razia Begum stated that the sale consideration of the house sold by her to the assessee and his brothers was only Rs. 4,00,000. She could not explain the sources of cash Rs. 3,69,600 which was found with her. A statement was recorded from her husband Dr. Zaheer Ahmed in the course of the search wherein he stated that his wife had sold the house property recently to the assessee and his brothers for a sum of Rs. 4,00,000. Smt. Anees Ali stated that the cash found with her represented sale proceeds of her jewellery, gold ornaments and silver articles. Smt. Rafat Zaheer stated that she received the cash from her mother as a gift and that she was not absolutely sure of the nature of the receipt. One and half months after the search i.e. on 11-5-1984, Smt. Razia Begum filed an affidavit before the Commissioner of Income-tax (Survey and Investigation), Hyderabad, stating that cash found with her and her two daughters belonged to her and represented part to the sale proceeds of her house property bearing Door No. 8-2-583/2 Road No. 9 Banjara Hills, Hyderabad which had been sold by her to Sri Ramesh Pershad and others. She stated that she had sold her property for Rs. 11.75 lakhs and that the sale proceeds were partly in cash of Rs. 7.75 lakhs and partly by demand draft for Rs. 4,00,000, but in the sale deed only Rs. 4,00,000 was declared as sale consideration due to pressure from the vendees. Out of the cash of Rs. 7.75 lakhs, she gave Rs. 1.97 lakhs to Smt. Anees Ali and Rs. 1.9 lakhs to Smt. Rafat Zaheer, being her daughters, for safe custody. She stated that she had already purchased 3 years National Rural Development Bonds to the tune of Rs. 4,00,000 and had made a request to the Commissioner of Income-tax to invest the seized cash also in 3-year National Rural Development Bonds or in the Capital Gains Units Scheme.
(3.) ACQUISITION proceedings were started against the assessee and his brothers. The department also obtained the valuation of the property seems to have been valued thrice by the valuation cell. This property seems to have been valued thrise by the valuation cell. The first, valuation report dated 26-5-1984 by Sri Veerabhadra Rao, Valuation Officer, determined the value of the property at Rs. 4.53 lakhs. A second valuation report was obtained by the inspecting Assistant commissioner of Income-tax, ACQUISITION Range, Hyderabad from Sri. B. R. Rao, Executive Engineer, Unit I valuation cell, which determined the value of the property at Rs. 11.85 lakhs. Sri B. R. Rao had also given a statement before the Income-tax Offcer, Central circle III, Hyderabad, under section 131 of the Income-tax act, in which he made certain a varmints to the effect that he took the value of land as per rates indicated by the Superintending Engineer, that he did not visit the property at Door No. 8-2-583/2, that he saw it from outside and that he did not give any intimation of his visit to the assessee nor cold he recollect the date of his visit as the same was not recorded, that the Superintending Engineer told him orally that the vendor, Smt. Razia Begum had given a sworn statement stating that the actual consideration received for the property was about Rs. 10 lakhs and thereupon he obtained a photostat copy of the affidavit given by Smt. Razia Begum and thus determined the value at Rs. 11,85.000. The Inspecting Assistant Commissioner (ACQUISITION) in his letter dated 20-5-1985 addressed to the Valuation Officer, requested him to submit a report after visiting the property and after collecting all the relevant materials necessary for proper valuation of the property and after visiting other properties quoted by him earlier as comparable cases. In this revised valuation report forwarded on 12-7-1985 the very same Valuation Officer, Sri B. R. Rao, reestimated the value of the property at Rs. 4.60 Lakhs. The acquisition proceedings, which were initiated by the competent authority were held to be not valid by the Tribunal in its order dated 6-11-1986 in IT Acq. A. No. 12/Hyd. /1986 on the ground that the provisions of section 269D (2) which are mandatory, have not been complied with be the competent authority.;