2013 (5) TMI 418 - HC - Income Tax

Unexplained investment for purchase of land - ITAT deleted the addition - Held that - Tribunal has found that a sum of Rs.52 lacs was received from M/s SAR Stitchers Pvt. Ltd. Delhi on 05.01.2007 & also noticed that Rs.60 lacs was paid in cash to Radha Swami Satsang Beas, Karan Ban, Jammu, which deposit finds mention in the accounts of seller. The Tribunal has taken into consideration the record produced by the assessee in respect of transaction entered with copy of confirmations, PAN number, Income tax particulars and audited accounts of the lendor. Thus finding that the investment of Rs.52 lacs was duly explained by the assessee, is a finding of fact and such finding of fact does not give rise to any substantial question of law. Revenue appeal dismissed.

Summary

Issues:
1. Reversal of addition of unexplained investment for land purchase by ITAT
2. Discharge of onus of proving sources of investment by the assessee
3. Discharge of onus of proving unexplained investment by the assessee

Analysis:
1. The appeal under Section 260-A of the Income Tax Act, 1961 challenged the order passed by the Income Tax Appellate Tribunal (ITAT) for the assessment year 2007-08. The Revenue raised substantial questions of law regarding the reversal of the addition of Rs.53 lakhs as unexplained investment for the purchase of land by the ITAT. The Commissioner of Income Tax (Appeals) had confirmed this addition, but the Tribunal deleted it as the assessee provided explanations for the sources of the funds used for the land purchase.

2. The ITAT considered the assessee's explanation that Rs.52 lakhs were received from M/s SAR Stitchers Pvt. Ltd. Delhi and that Rs.60 lakhs were paid in cash to the seller for the land purchase. The Tribunal reviewed the records presented by the assessee, including confirmations, PAN number, income tax particulars, and audited accounts of the lender. The Tribunal concluded that the investment of Rs.52 lakhs was adequately explained by the assessee, leading to the deletion of the addition. The Tribunal's decision was based on factual findings and did not give rise to any substantial question of law.

3. The assessee initially declared income of Rs.1,44,840 and later the income was assessed at Rs.54,44,839. The Commissioner of Income Tax (Appeals) upheld the addition of Rs.53 lakhs as unexplained investment, but the ITAT overturned this decision based on the assessee's provided explanations and evidence. The Tribunal noted discrepancies in the statements made by the assessee regarding the source of funds for the land purchase but ultimately accepted the explanations and evidence presented, leading to the dismissal of the appeal by the High Court.

In conclusion, the High Court dismissed the appeal as the ITAT's decision to delete the addition of unexplained investment for land purchase was based on factual findings and the explanations provided by the assessee, which were supported by relevant documentation.