Law:

Section:

Section 158B of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income - Block period 1-4-1988 to 8-12-1998 - Whether where Assessing Officer did not conduct any independent enquiry relating to value of property purchased by assessee and merely relying upon statement of seller that he had received higher amount as sale consideration as against disclosed in registered sale deed made addition of difference in assessee's income, Tribunal was justified in deleting addition holding that Assessing Officer had failed to discharge its duty of proving actual consideration in such transaction - Held, yes FACTS During the course of search, it was found that the assessee had purchased a land which was registered for Rs. 4.10 lakhs. The seller in his sworn statement admitted that he had received Rs. 4.10 lakhs as sale consideration but on one question he admitted that he had received Rs. 34.35 lakhs. Subsequently, again in the statement recorded, the seller admitted that a total consideration of Rs. 34.85 lakhs was received from the assessee out of which Rs. 4.10 lakhs was received in demand draft and the balance in cash. The Assessing Officer, on the basis of statement of seller, made addition of difference as undisclosed income. On appeal, the Commissioner (Appeals) deleted the addition made by the Assessing Officer on the ground that due to the conflicting nature of the statements given by the seller, his statement could not be relied upon. On further appeal, the Tribunal confirmed the order of the Commissioner (Appeals). On appeal : HELD The burden of proving actual consideration in such transaction is that of the revenue. The Tribunal had given factual finding and, inter alia, held that the Apex Court in K.P. Varghese v. ITO [1991] 131 ITR 597/ 7 Taxman 13 held that the burden of proving actual consideration in such transaction is that of the revenue. The revenue, in the instant case, had failed to discharge its duties. [Para 5] The Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. He merely relied upon the statement given by the seller. If he would have taken independent enquiry by…

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