2012 (10) TMI 1032 - HC - Income Tax

Addition u/s 69 - addition of the amounts directed by the AO, were the documents obtained by the income tax authorities in the course of a search conducted in the premises of Manav Rachna Group - Held that - The claim of on money transactions has not at all proved in this case. As held the onus is that of revenue to prove the same and as clearly found by us above the revenue has failed to do so the same. See CIT Versus. M/s INDICATION INSTRUMENTS LTD. & vice versa 2010 (9) TMI 1112 - ITAT DELHI

Summary

Issues:
1. Validity of the order of the Income-tax Appellate Tribunal deleting certain sums brought to tax under Section 69 of the Income Tax Act, 1961.

Analysis:
The Revenue challenged the Tribunal's order directing the deletion of sums totaling Rs. 7,82,000 and Rs. 49,28,000, treated as undisclosed income under Section 69 of the Income Tax Act, 1961. The dispute arose from the reopening of the assessment based on information regarding undisclosed income related to property purchases in Faridabad. The Assessing Officer treated the amounts as cash payments for concealed property purchases, a decision upheld by the Commissioner of Income Tax (Appeals) but overturned by the Tribunal. The Tribunal's decision relied on a precedent involving a similar transaction, emphasizing discrepancies in the seized documents and the lack of conclusive evidence of on-money transactions.

The Tribunal's decision was based on the doctrine of stare decisis, upholding the Commissioner of Income Tax (Appeals) order in favor of the assessee. The Tribunal highlighted that the Revenue failed to prove the on-money transactions conclusively, as required by legal precedents. The Tribunal emphasized that the burden of proof lies with the Revenue in cases of alleged understatement or concealment of income, citing relevant Supreme Court judgments. The Tribunal concluded that the additions made by the Assessing Officer were not sustainable due to insufficient evidence and discrepancies in the seized documents.

The High Court affirmed the Tribunal's decision, citing previous rulings and legal principles, including the application of the K.P. Varghese and CIT v. P.V. Kalyanasundaram cases. The Court found no substantial question of law warranting consideration, ultimately dismissing the Revenue's appeal. The judgment underscored the importance of the Revenue meeting the burden of proof in establishing undisclosed income and the need for conclusive evidence in such cases.