2014 (5) TMI 2 - AT - Income Tax

Deletion of addition made by the AO Document found during the search Burden to prove Held that - The document is titled as Statement of Assets & Liabilities and it contains the details of Immovable and Movable Properties - Under the heading Immovable Properties , the details of five properties have been furnished - The AO has accepted that the property listed as (a) and having a value of Rs.52.00 lakhs has already been disclosed by the assessee, even though there was a difference in the door number - In respect of the remaining four properties, the assessing officer has conducted enquiries during the course of remand proceedings - the AO has accepted that all the four properties have not been acquired by the assessee during the year - the CIT(A) has deleted the addition relating to the properties thus, there was no infirmity in the decision taken by the first appellate authority in respect of the immovable properties. CIT(A) has deleted the addition with the simple observation that No evidence whatsoever is adduced in support of movable properties - revenue contended that CIT(A) has placed the burden of proof upon the AO, which is against the established principles, i.e., the burden lies upon the assessee to disprove the items disclosed in the Statement of Assets and Liabilities thus, the issue relating to the movable properties needs to be adjudicated by the CIT(A) thus, the matter is remitted back to the CIT(A) for adjudication Decided partly in favour of Revenue.

Summary

Issues:
1. Addition of Rs.1,88,01,000 made by the A.O. based on a document found during search operations.
2. Assessment of immovable and movable properties based on the document.
3. Deletion of the addition by the Ld. CIT(A) and appeal by the Revenue.

Analysis:

Issue 1:
The appeal by the Revenue challenged the decision of the Ld. CIT(A) in deleting the addition of Rs.1,88,01,000 made by the A.O. based on a document found during search operations. The document titled "Statement of Assets & Liabilities" was crucial in this regard. The A.O. deducted the value of disclosed assets and assessed the difference as income under section 69 of the Act.

Issue 2:
Regarding the assessment of immovable and movable properties based on the document, the A.O. conducted enquiries and submitted remand reports. The Ld. CIT(A) considered these reports and concluded that the addition made by the A.O. was not justified. The Ld. CIT(A) found that the immovable properties were not acquired during the relevant assessment year and no evidence was provided for the movable properties. Consequently, the Ld. CIT(A) deleted the impugned addition.

Issue 3:
The Revenue contended that the Ld. CIT(A) erred in deleting the addition without proper appreciation of the evidence and remand reports. The Revenue argued that the burden of proof lay with the assessee, especially regarding movable properties. On the other hand, the assessee argued that the document was prepared for a bank loan application and contained exaggerated values. The Ld. CIT(A) justified the deletion based on lack of evidence for movable properties. The Tribunal upheld the decision on immovable properties but directed a reevaluation of the movable properties issue by the Ld. CIT(A.

In conclusion, the Tribunal partly allowed the appeal for statistical purposes, upholding the deletion of the addition related to immovable properties but directing a reassessment of the issue concerning movable properties.