8. We have considered the contention of the parties and the facts, evidences and the material on record where by the addition has been sustained by placing the reliance on the provisions of Sec. 69B of the Act whereby the relevant provisions are extracted herein below to deal with the controversy at
“‘Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.”
The case set up by the assessee is that once there is invoking of provisions of section 50C and there after the provisions of section 69B have been invoked then the primary evidence for consideration and appreciation coming into play is that of section 69B wherein the addition is being made by invoking the deeming provision and the onus to prove with regard to the payment over and above the declared amount is on the revenue and there cannot be transaction unilaterally by the assessee himself till a corroborative piece of direct evidence has been brought on record adverse the assessee which in the present case has been none for which we are supported by the judgment of ( 1981) 131 ITR 597 (SC) wherein it has been held as under:
K.P. Varghese Vs I.T.O.
It is a well settled rule of interpretation that the court should as far as possible avoid that construction which attributes irrationality to the legislature. Besides, the entry 82 in list 1 of the Seventh Schedule to the Constitution, which deals with “I axes on income other than agricultural income” and under which the Income-tax Act, 1961 has been enacted. Parliament cannot “‘choose to tax as income an item which in no rational sense can be regarded as a citizen’s income or even receipt. Sub-section (2) would, therefore, on the construction of the revenue, go outside the legislative power of Parliament and it would not be possible to justify it even as an incidental or ancillary provision or a provision intended to prevent evasion of tax. Sub-section (2) would also be violative of the fundamental right of the assessee under art 19(l)(f)-which fundamental right was in existence at the time when sub.-s (2) came to be enacted-since on the construction canvassed on behalf of the revenue, the effect of sub-s. (2) would be to penalize the assessee for transferring his capital asset for a consideration lesser by 15% or more than the fair market value and that would constitute unreasonable restriction on the fundamental right of the assessee to dispose of his capital asset at the price of his choice. The court must obviously prefer a construction which renders the statutory provision constitutionally valid rather than that which makes it void. We must, therefore, hold that sub-s, (2) of Section 50 can be invoked only where the consideration for the transfer has been understated by the assessee or, in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him and the burden of proving such an understatement or concealment is on the revenue. This burden may be discharged my the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him and there is an understatement or concealment of the consideration in respect of the transfer. The reliance placed by on the judgment of the Hon’ble jurisdictional High Court is mis-placed since the same is also based on the availability of sufficient material on record on the basis of which reasonable inference can be drawn for the investment can be made by the assessee which there is a merely a report by the departmental valuation officer for which we are supported by the judgment of various divisional benches and as extracted herein below in the written pleading dated 21.1.2009 submitted during the course of hearing.
1. Jugal Kishore Garg Vs. DCIT 33 TW 219
2. Badn Narain Modi Vs. ACIT 39 TW 105
There has not been placed any counter to the written pleadings (supra) to controvert the contention raised and we are further of the view that when there is no corroborative piece of evidence placed on record by the revenue to substantiate contention raised emerging from the order under challenge in form of verification from the seller then the assessee cannot put to tax on the lapse of the department to which extent written pleadings were advanced at the very initial stage during the course of assessment proceedings and which remains and un-rebutted fact till date. In such circumstances and facts of the case, the Id. CIT(A) is not justified in confirming the action of the AO and the addition sustained is directed to be deleted. Thus Ground No. 3 of the CO. of the assessee is allowed.