2015 (7) TMI 398 - AT - Income Tax

On Money paid on the purchases of two plots in the name of his family members - CIT(A) deleted the addition - Held that - Copy of both the Affidavit itself disclosed all the facts regarding inquiry, assurance of investigating officer, statement recorded without any witness, statement proceedings prolong from 07.09.2006 to 21.09.2006, submissions of records etc. On plain reading of affidavit, any prudent person can feel & realize the intention of person who has recorded the statement. The assessee has no knowledge about using the statement against him till the Show Cause Notice was received from the assessing officer and hence affidavit which seems by the assessing officer is as a retraction of statement is not the afterthought. The assessee has filed affidavit immediately when he knew the facts. There was no just and fair disclosure by the assessee. He was forced to state only so that the Department and or so called investigating officer can use it & take action against the seller of the properties under such type of falsely confession. Before us, DR simply relied on the order of the AO and could not point out any specific error in the order of the CIT(A). The DR even before us could not explain why and in what circumstances statement under section 131 of the assessee was recorded by the AO. Therefore, we do not find any good reason to interfere with the order of the CIT(A), which is confirmed and the ground of appeal of the Revenue are dismissed. - Decided against revenue.

Summary

Issues:
- Addition of on-money paid on purchases of two plots in the name of family members
- Retraction of statement recorded under section 131 of the Act
- Deletion of the addition by CIT(A)
- Lack of evidence of on-money payment in purchase transactions
- Concern of the appellant with purchase transactions
- Failure to disclose true facts by the assessing officer
- Recording of statement by Income Tax Officer (Inv.)
- Denial of purchasing plots and paying on-money
- Affidavits filed by the assessee and purchasers
- Failure to point out specific errors in CIT(A) order

Analysis:
1. The appeal involved the Revenue contesting the deletion of an addition of on-money paid on the purchases of two plots in the name of family members, despite the appellant admitting to the payment. The Revenue argued that the retraction of the statement recorded under section 131 of the Act was an afterthought, seeking restoration of the Assessing Officer's order.

2. The lower authorities and material on record were considered, revealing that the assessee disclosed on-money paid for the plots in a statement under section 131 of the Act. However, discrepancies arose when this disclosure was not reflected in the income tax return for the relevant year. Subsequently, a show cause notice led to the assessee filing an affidavit retracting the initial statement, which the Assessing Officer deemed as an attempt to conceal undisclosed income.

3. The CIT(A) deleted the addition, emphasizing the lack of evidence of on-money payment in the purchase transactions, the failure to consider affidavits by the appellant and real purchasers, and the absence of proof linking the appellant to the property transactions. The CIT(A) concluded that the addition was unwarranted, as the appellant had no involvement in the purchase transactions.

4. The appellant's representative argued that the assessing officer failed to disclose crucial facts and wrongly recorded the statement under section 131. The appellant denied purchasing the plots or paying on-money, supported by documents and affidavits. The assessing officer's oversight of key details and reliance on a statement without proper authority were highlighted, leading to the dismissal of the Revenue's appeal.

5. The lack of specific errors in the CIT(A) order pointed out by the Revenue's representative further solidified the decision to uphold the deletion of the addition. The tribunal confirmed the CIT(A)'s decision, dismissing the Revenue's appeal and emphasizing the importance of evidence and proper procedure in such cases.