Satish Kumar Mittal, J. - (1.) THIS order shall dispose of two appeals i.e. IT Appeal Nos. 474 and 475 of 2007 filed under Section 260A of the Income Tax Act, 1961 by the Department against the order dated 9 -3 -2007 passed by the Income Tax Appellate Tribunal, Chandigarh (hereinafter referred to as 'Tribunal') in ITA Nos. 363 and 364/Chd/2005 preferred against the respondent/assessee for the years 2001 -02 and 2002 -03, raising the following substantial questions of law for consideration of this Court: (i) Whether the Tribunal was right in confirming the order of Commissioner (Appeals) in favour of the assessee by stating that the seller has retracted his statement based on which the assessing officer had made the addition in view of the fact that the assessee cannot be allowed to retract from an earlier admission by mere statement ? (ii) Whether the Tribunal was right in confirming the order of Commissioner (Appeals) in favour of the assessee by stating that the assessee was not provided opportunity to cross examine the seller in view of the fact that the right to cross examine is not necessarily a part of reasonable opportunity ?
(2.) IN the present case, the assessee purchased 17.5 and 21 acres of agricultural land on 14 -12 -2000 and 9 -4 -2001, on behalf of Avtar Singh and Smt. Satinder Kaur (NRIs), situated at village Kalalmajra from one Satinder Pal Singh for a consideration of Rs. 38,35,000 and Rs. 46,32,500, respectively, at the rate of Rs. 2,30,000 per acre. The payment of the sale consideration was made from NRI account No. 01190057727 belonging to aforesaid Avtar Singh and Smt. Satinder Kaur. The assessing officer on receiving the information from the Assistant Director of Income Tax (Investment), Ludhiana along with a copy of statement of the seller Satinder Pal Singh, recorded by the Investigating Wing of the Department in which the seller had admitted that he had sold the land in question at the rate of Rs. 4 lacs per acre, but the sale deed was got registered at the rate of Rs. 2.30 lacs per acre, issued notices under, Section 148 of the Income Tax Act (hereinafter referred to as 'the Act') for the assessment years 2001 -02 and 2002 -03. After hearing the assessee, the assessing officer while relying upon the statement of Satinder Pal Singh recorded by the Investigating Wing of the Department, which he subsequently retracted, assessed the value of the land purchased by the assessee at the rate of Rs. 4 lacs per acre and framed the assessment while adding Rs. 38.65 lacs for the assessment year 2001 -02 and Rs. 46,32,500 for the assessment year 2002 -03 under Section 69B of the Act by treating the same as investment from undisclosed sources.
(3.) AGGRIEVED against the aforesaid order of assessment, the assessee filed two separate appeals before the Commissioner (Appeals), Patiala which were allowed by the appellate authority on 3 -2 -2005 while making the following observations: ...The learned assessing officer has heavily relied upon the statement recorded by the Assistant Director of Income Tax (Investment), Ludhiana on 18 -9 -2001 in which the seller has deposed that apart from the registration deed he had received Rs. 72,00,000 from the appellant in five instalments. This statement has been perused by me and it is found that the contents of this statement regarding declaration of extra money received from the purchasers had not been substantiated by him either in the same statement or through his subsequent conduct. Neither the Assistant Director of Income Tax (Investment) nor the learned assessing officer has brought any adverse material to substantiate the contents of the said statement relied upon by them despite the retraction of the same. Unless, some money or consideration is proved to have been actually passed on to the seller, mere controversial one time confession of the seller that had been retracted by him later on, cannot help the Department in view of the ratio of Hon'ble Supreme Court in the famous case of K.P. Varghese. Moreover, the learned assessing officer had also not given any opportunity to the appellant in the interest of natural justice to cross examine the seller. Since, it is a case of an agent working for NRI masters and no concrete evidence has been brought on record to strengthen his case, it is difficult to concur with the views of the learned assessing officer that the appellant had indeed paid any amount over and above the registered sale deed. There is no dispute that the seller was not able to tell the appropriation of money as to where he invested the alleged money and also that no asset had been found by the Assistant Director of Income Tax (Investment), Ludhiana in consonance with so called confession to corroborate his view and support the passing of any money. Clearly in the instant case, the Departmental stand has not been substantiated with proper evidence. Rather, in the case of the seller Shri Satinder Pal Singh who is being assessed with Income Tax Officer, Ward -Ill, Khanna, the learned assessing officer while completing his assessment after detailed scrutiny has categorically accepted that he had sold the land to the appellant in the capacity of agent of NRIs for a sum of Rs. 38,35,000 only in this year. 6.1 In view of the above discussion, I am of the considered opinion that the learned assessing officer was not justified in adding the sum of Rs. 38,65,000 in the hands of the appellant treating the same as investment from undisclosed sources. Hence the same is deleted.;