Photocopy of a document is acceptable evidence in income tax assessment proceedings

Brief of the case:

• The Hon’ble Punjab & Haryana High Court in the case of Vikrant Dutt Chaudhary Vs. CIT held that photocopy of a document will always constitute relevant “material” for the purpose of assessment because the very use of word “material” in sec 143(3) clearly shows that the AO is not bound by the technical rules of evidence and the like and that he may act on material which may not, strictly speaking, be accepted as evidence in a court of law.
• Therefore , the photocopy of a document if corroborated by the assessee would be sufficient evidence which revenue may use in the course of making assessment.

 Facts of the case:

• Three co-owners i.e. two brothers – Prashant Dutt Chaudhary & Vikrant Dutt Chaudary and their mother – Smt.Vijay Dutt Chaudhary had sold House No.146, Sector 8A, Chandigarh for consideration of `Rs. 39 lacs in September 2000 in which each co-owner had equal share. All the co-owners did not furnish return of income believing that there income was below the taxable limit.
• The co-owners were issued a notice for reassessment u/s 148, in response to said notice he filed his return of income. The case was reopened on the basis of a receipt coming into the hands of Investigation wing that the assessee had received Rs. 55 lacs in cash as advance for the sale and remaining Rs. 28 lacs after sale and such receipt was bearing the signature of Mr. Dutt as seller and his brother and mother as witnesses.
• AO concluded that the Mr. Vikrant had sold the property for Rs. 93 lacs (55+38) and accordingly long term capital gain was assessed in the hands of co-owners equally. Aggrieved by the order, the appellant went in appeal before the CIT(A) ,the CIT(A) dismissed the appeal relying on the impugned receipt of Rs. 55,00,000/-.
• Tribunal also upheld the findings of AO and held that the photocopy of receipt would be sufficient material to prove the case of revenue. Aggrieved by the order of tribunal assessee is in appeal before the High Court.

 Contention of the Assessee:

• The learned counsel for the assessee pleaded that none of the co-owners signed the impugned receipt. They also retracted from their statements confirming the validity of receipt stating that the statements were taken from them forcibly and under coercion.
• They also challenged the authenticity of receipt on the ground that :

i)The receipt was showing that only Mrs. Vijay Chaudhary has taken the whole payment as seller and Mr. Parshant and Vikram Chaudhary are just witnesses. It nowhere found mention that other two were co-owners. So, how this could be possible that the proposed buyer would make such a heavy payment without taking the consent of two other co-owners?

ii) The receipt were indicating that total sale consideration was Rs. 93 lacs of which Rs. 55 lacs received on 15.09.2000 and Rs. 38 lacs to be received at the time of registry. Whereas actually Rs. 9.90 lacs was received through Account payees cheques in June 2000/- as part payment and only Rs. 28.10 lacs were pending to be received on 15.9.2000 and that was received in October 2000.

• These all prove that it was just a forged receipt containing imaginary facts created by some childish brain

 Contention of the Revenue:

• The revenue supported the findings made by the AO based on the receipt showing the payment of Rs. 55 lacs by the co-owners. Further, it was contended that apart from the receipt the AO was right to add the amount of receipt in the hands of assessees because all the co-owners before Investigation wing of the department accepted that the amount was received by them and same signed off by them.
• Further, revenue also relied on the similarity between the signatures on the revenue stamp and that of Smt.Vijay Chaudary (a co-owner) and they were one and the same.

 Held by the Hon’ble High Court:

♠ High court upheld the fact findings of the tribunal who made the following observations :

i) It is true that photostat copies of the documents, in the absence of their original have no value under the Indian Evidence Act. But it can be seen that sec 142 and 143 of the Income Tax Act ,1961 has used the expression “the relevant material which he has gathered for the purpose of making assessment”. The expression “material” would cover anything that may help in deciding the question arising in the case.

As such, by the use of word “material” in sec 143(3) , the AO is not bound by the technical rules of evidence as prescribed in the Indian Evidence Act and he is allowed to go ahead with the material which may not be termed as evidence under the law of evidence.

ii) The photocopy of the receipt was clearly evidencing Rs. 55 lakhs cash received from Shri Joginder Singh and Mrs. Harjinder Kaur, being the purchasers, on 15.9.2000. It was duly signed by all the assessees in token of having received the aforesaid sum of money in cash. The name of the purchasers as also the date of receipt of the aforesaid sum of money are also mentioned in the receipt in clear terms.

iii) Further, the authenticity of the receipt, the authenticity of the signatures of the assessees on the receipt, and the fact that a sum of Rs. 55 lakhs was actually received by them in cash have been confirmed by the assessees in their respective statements recorded on oath by the ADIT (Investigation), though the they retracted from the same giving diverse reasons.

♠ Considering all the observations as above, tribunal rightly concluded that departmental authorities were not acting merely on the basis of photo copy of the receipt but also they get the same corroborated by the assessees in their respective statements.

♠ In result the court affirmed the findings of the tribunal and dismissed the assessee’s appeal.