2015 (4) TMI 57 - HC - Income Tax

Unaccounted purchases - Whether the appellate authorities were correct in holding that the sum of ₹ 2,83,01,868/- reflected in the profit and loss account and the books of accounts of the assessee as payment made to Mr Chotu Sab and his relatives for purchase of land should be accepted in its entirety even though the finding are based on mere conjuncture and surmises when proof of ₹ 1,27,00,000/- only was shown and the balance ₹ 1,56,01,868/- had not been proved by the assessee by adducing any cogent evidence? - Held that - In view of the fact that the Department itself has accepted the payment of ₹ 2.83 crores and add to the sellers Mr Chotu Sab and his family members and assessed them on the said amount for payment of capital gains, the contention of the learned counsel for the appellants that the burden of proof of payment by the respondent - assessee should not be shifted on the Revenue, is not worthy of acceptance. The respondent has claimed that he made the payment of the said amount to Mr Chotu Sab and his family members which has also been accepted by the Revenue in the returns filed by Mr Chotu Sab and his family members. Once the same has been done, the Department cannot turn around and claim that the respondent assessee should prove to have made such payment of ₹ 2.83 crores and add for purchase of the said land. No substantial question of law to be decided by this Court. - Decided against revenue.

Summary

Issues:
1. Dispute over the payment of a specific amount by the assessee to the sellers for the purchase of land.
2. Burden of proof regarding the payment amount on the assessee and the Revenue.
3. Acceptance of the payment by the sellers and assessment of capital gains by the Revenue.

Analysis:
1. The appeal concerns a dispute regarding the payment of Rs. 1,56,01,868/- by the assessee to the sellers for the purchase of land, with the Revenue contending that only Rs. 1.27 crores was paid, not the full amount claimed by the assessee.

2. The main legal questions raised were whether the appellate authorities were correct in accepting the entire amount reflected in the accounts of the assessee as payment made to the sellers, and whether the burden of proving non-payment of Rs. 1,56,01,868/- rested with the Revenue. The appellants argued that it was the assessee's responsibility to prove payment, not the Revenue's.

3. The respondent contended that evidence was presented showing the payment of Rs. 2.83 crores and odd to the sellers, which was also reflected in the assessee's account books. The Revenue had assessed the sellers on this amount, and the matter had been previously considered by the Court, confirming receipt of the amount by the sellers. The dismissal of a special leave petition further supported this position.

4. The Court noted that the Revenue had accepted the payment to the sellers and assessed them for capital gains based on the amount received. As the payment was acknowledged in the returns filed by the sellers, the Court rejected the appellants' argument shifting the burden of proof to the Revenue, concluding that no substantial legal question arose for consideration.

5. Consequently, the Court dismissed the appeal, upholding the acceptance of the payment made by the assessee to the sellers for the purchase of land, as evidenced by the assessments made by the Revenue and the previous judicial decisions on the matter.