2008 (5) TMI 663 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition of Rs. 11,70,56,000 made on account of receipt from M/s Mittal Group of Companies.
2. Validity of assessment framed u/s 143(3)/147 based on documents found during the search.

Summary:

Issue 1: Deletion of Addition of Rs. 11,70,56,000
The Revenue appealed against the CIT (A)'s order deleting the addition of Rs. 11,70,56,000 made by the Assessing Officer (AO) based on documents found during a search on the Mittal Group of Companies. The AO had added this amount to the assessee's income, alleging unaccounted consideration received from the Mittal Group for the sale of land at a higher rate than declared. The CIT (A) deleted the addition, relying on a previous order in the case of Chavan Rishi International Pvt. Ltd., where it was held that no extra consideration was paid beyond what was recorded in the investors' agreement.

Issue 2: Validity of Assessment u/s 143(3)/147
The AO's assessment was based on a seized document (Annexure A-I, page 5) from the Mittal Group, which purportedly showed higher payments for land than declared. The assessee argued that the document reflected market value, not actual payments. The Tribunal upheld the CIT (A)'s decision, noting that the seized document was not a cash book and lacked corroborative evidence of actual higher payments. The Tribunal emphasized that the document should be read as a whole and not selectively, and found that the AO's presumption of higher payments was not substantiated by independent evidence.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT (A)'s deletion of the addition. It held that the seized document indicated market value, not actual payments, and the AO's addition was based on unsubstantiated presumptions. The Tribunal's findings in the case of Chavan Rishi International Pvt. Ltd. applied mutatis mutandis to the present case, leading to the conclusion that no unaccounted consideration was received by the assessee.