2013 (3) TMI 855 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition of Rs. 92,00,000/- made by the A.O. as on money paid towards purchase of land.

Summary:

Issue 1: Deletion of Addition of Rs. 92,00,000/- as On Money Paid Towards Purchase of Land

The Revenue appealed against the CIT(A)'s order deleting the addition of Rs. 92,00,000/- made by the A.O. as on money paid towards the purchase of land. The A.O. based the addition on documents seized during a search operation u/s 132 on Vikas A. Shah, which included a power of attorney and details of land sale transactions. The A.O. concluded that the appellant had paid Rs. 92,00,000/- in addition to the documented price of Rs. 4.5 lakhs for the land at Survey No. 60 of Village Dholakuva, relying on statements recorded u/s 131(1A) and various case laws.

The CIT(A) deleted the addition, observing that the A.O.'s conclusions were based on assumptions and the statement of Vikas A. Shah without independent corroborative evidence. The CIT(A) noted that the land's purchase value of Rs. 9 lakh was registered and accepted by the Stamp Duty Authority, and there was no basis to presume additional payment. The CIT(A) also referenced the jurisdictional ITAT decisions in similar cases, emphasizing that additions cannot be made based on presumptions or third-party statements without corroborative evidence.

The ITAT upheld the CIT(A)'s order, agreeing that the A.O. erred in making the addition without allowing cross-examination of Vikas A. Shah, which violated the principles of natural justice. The ITAT noted that the registered document's value was accepted by the Registering Authority, and no material evidence suggested on money payment. The ITAT referenced decisions in Prathana Construction Pvt. Ltd., Prabhat Oil Mills, and Jaindal Stainless Ltd., concluding that third-party evidence cannot be the basis for addition without supporting evidence.

Conclusion:
The ITAT dismissed the Revenue's appeal, upholding the CIT(A)'s order deleting the addition of Rs. 92,00,000/- made by the A.O. as on money paid towards the purchase of land.