2021 (4) TMI 1309 - HC - Income Tax

Unexplained investment in land - AO made addition as deemed income being unexplained investment in land shown less in the balance sheet of the appellant - Substantial question of law or fact - CIT-A also after considering the oral and documentary evidence, recorded the findings that there was unexplained investment in land shown less in the balance sheet of the appellant and dismissed the appeal filed by the appellant - Tribunal has also recorded various findings of fact while dismissing the appeal preferred by the appellant - HELD THAT - As the appellant vehemently urged that on the basis of photocopy of the agreement for sale between Shri Ayub Haji Abdul Rashid Qureshi and Shri Rajansingh Kuvarsingh Baisthkur, the assessing officer could not have made an addition in the income of the appellant. Learned counsel for the appellant could not dispute that the appellant had cross-examined Shri Rajansingh Kuvarsingh Baisthkur. Even in the cross-examination of the said seller Shri Rajansingh Kuvarsingh Baisthkur, he admitted that he had received the sum of ₹ 30.55 lakhs out of which ₹ 2 lakhs was received by cheque and balance amount of ₹ 23.50 lakhs was received in cash. The entire order passed by the Income Tax Appellate Tribunal is based on pure findings of fact. No substantial question of law arises in this appeal filed under Section 260A of the Income Tax Act, 1961. The appeal being devoid of merit is accordingly dismissed.

Summary

Issues:
1. Addition of deemed income by assessing officer
2. Dismissal of appeal by Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal
3. Dispute over valuation of property and unexplained investment in land

Analysis:
1. The appellant challenged the order dismissing the appeal by the Income Tax Appellate Tribunal, confirming the Commissioner of Income Tax (Appeals) order and assessment order, which added deemed income of ?28,88,125 as unexplained investment in land shown less in the balance sheet. The appellant contended that the assessing officer's decision was based on a photocopy of the agreement for sale, which was inadequate as the original agreement was produced. However, the assessing officer considered oral evidence and concluded that the purchase price discrepancy was significant, justifying the addition of deemed income.

2. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal upheld the assessing officer's decision after considering oral and documentary evidence. The Tribunal's order was based on factual findings, and the appellant's argument that the photocopy of the agreement should not have led to the income addition was dismissed. The Tribunal affirmed the lower authorities' conclusions, emphasizing that no substantial question of law arose in the appeal under Section 260A of the Income Tax Act, 1961.

3. The appellant's counsel argued that the assessing officer's decision was flawed as it relied on a photocopy of the agreement for sale. However, it was revealed during cross-examination that the seller received a substantial amount in cash, contradicting the declared purchase price. The court found that the Tribunal's order was based on factual findings and no legal question merited interference. Consequently, the appeal was dismissed for lacking merit, highlighting the importance of factual evidence in tax disputes.