2015 (9) TMI 1359 - HC - Income Tax

Addition received as advance for sale of property - Held that - It is very difficult to believe that the assessee who is not owner of the land had entered into agreement when the land belonged to her husband. Though it was stated before Assessing Officer and the Ld. CIT(A) that Power of Attorney was executed by her husband in favour of the assessee but copy of the power of attorney has not been produced before the Assessing Officer and, therefore, the Ld. CIT(A) should have been little careful in asking for the power of attorney but he simply believed this theory without examining the Power of Attorney All the four persons have not stated how much money each one of them has paid. No specific source of the payment has been explained and it has been simply stated that they are agriculturists. When four persons have paid a sum of ₹ 43 lakhs the Assessing Officer could have verified the sources only if such persons were produced before him. We fail to understand how Ld. CIT(A) believed these affidavits particulars when the Assessing Officer had insisted on producing these persons. The affidavits are clearly in the nature of self serving documents and cannot be believed. Further there is no evidence why the deal did not mature. How the amounts were returned whether any receipts were taken or not is not clear. All these circumstances make the whole story not plausible. In our opinion it seems to be only a story to explain the deposits of cash and does not have any substance. Therefore, we set aside the order of Ld. CIT(A) and restore that to Assessing Officer. The aforesaid findings of fact recorded by the assessing authority and the Tribunal sustaining the addition though received as advance for sale of property are not shown to be erroneous or perverse in any manner. Thus, no substantial question of law arises in this appeal. - Decided against assessee.

Summary

Issues:
1. Addition of Rs. 43,00,000 as undisclosed income for the assessment year 2009-10.
2. Validity of the agreement for the sale of property and the sources of the amount.

Analysis:
1. The appellant challenged the addition of Rs. 43,00,000 as undisclosed income, received as an advance for the sale of property, which was later returned. The Assessing Officer initially made the addition due to unexplained sources. The CIT(A) reversed this decision, citing the unreliability of the agreement as the reason. However, the Tribunal overturned the CIT(A)'s decision, emphasizing that the appellant was not the landowner, the husband was, and no registered power of attorney was provided. The Tribunal found discrepancies in the affidavits of the alleged advance providers, noting the lack of individual amounts specified and unverified sources. The Tribunal concluded that the story presented was implausible, and the appeal was dismissed based on these findings.

2. The Tribunal highlighted key issues, including the absence of proof of land ownership by the appellant, the lack of a registered power of attorney, and discrepancies in the affidavits provided by alleged advance providers. The Tribunal emphasized the need for concrete evidence and verification of sources, ultimately deeming the appellant's explanation as lacking substance. The Tribunal's decision was based on the inconsistencies and lack of credibility in the presented documents and statements. As a result, the Tribunal upheld the addition of Rs. 43,00,000 as undisclosed income, dismissing the appeal due to the absence of substantial questions of law arising from the case.

This detailed analysis of the judgment provides a comprehensive overview of the issues raised, the arguments presented, and the final decision reached by the Tribunal, underscoring the importance of concrete evidence and credibility in legal proceedings.