2016 (7) TMI 1291 - AT - Income Tax

Addition of undisclosed payment received on sale of land on the basis of seized documents - Held that - We find that ground 1 of revenue s appeal as mentioned elsewhere is misplaced in as much as it refers to the additions on account of undisclosed payment received on sale of land whereas the facts show that the assessee has in fact purchased the impugned land. The undisputed fact is that the impugned land was purchased jointly with one Shri Bharatbhai Patel. However, we find that the entire additions have been made in the hands of the assessee. Further, the impugned incriminating material was found from the premises of Shri Kalidas Patel but surprisingly the said Shri Kalidas Patel did not even made a whisper of having received consideration over and above what has been stated in the registered document. In our considered opinion, the impugned additions made by the A.O. does not have any basis - Decided against revenue

Summary

Issues Involved:
Appeal against order of CIT(A) deleting addition of undisclosed payment received on sale of land based on seized documents for A.Y. 2006-07.

Analysis:

Issue 1: Addition of undisclosed payment received on sale of land
The Revenue appealed against the CIT(A)'s decision to delete the addition of ?3,37,58,800 made by the Assessing Officer (A.O.) on account of undisclosed payment received on the sale of land. The A.O. based the addition on seized documents during a search action under section 132 of the Income Tax Act. The A.O. believed the land's purchase cost was ?3.43 crores, while the assessee declared it at ?5,41,200. The CIT(A) noted that the documents relied upon by the A.O. did not mention the appellant's name and were found in possession of a third party. The CIT(A) found no evidence that the appellant paid ?3.43 crores for the land, leading to the deletion of the addition. The Revenue contended that the impugned land was purchased jointly, but all additions were made in the assessee's hands. The Tribunal observed that the A.O.'s additions lacked basis, and Shri Kalidas Patel did not claim to have received additional consideration. Consequently, the Tribunal upheld the CIT(A)'s decision and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of undisclosed payment received on the sale of land based on seized documents, as there was no evidence of the appellant's involvement in the alleged undisclosed payment. The Tribunal found the A.O.'s additions lacked a basis and declined to interfere with the CIT(A)'s decision, ultimately dismissing the Revenue's appeal for the assessment year 2006-07.