2011 (12) TMI 784 - AT - Income Tax

Summary

Issues Involved:
1. Deletion of addition of Rs. 5,18,220/- u/s 139(1) for bogus capital gains.
2. Deletion of addition of Rs. 6,09,000/- for unaccounted money paid for immovable property.

Issue 1: Deletion of addition of Rs. 5,18,220/- for bogus capital gains:
The Assessing Officer added Rs. 5,18,220/- as bogus capital gains despite the assessee disclosing long term capital gains of Rs. 4,97,610/- from the sale of shares. The CIT(A) deleted the addition based on the submission that no incriminatory material was found during a search u/s 132. The assessee provided evidence including Demat statements, sale contract notes, and transfer deeds to support the genuineness of the transaction. The CIT(A) held that the addition was unjustified. However, the ITAT Delhi Bench 'D' set aside a similar case for allowing cross-examination, leading to the restoration of the issue to the Assessing Officer for further examination.

Issue 2: Deletion of addition of Rs. 6,09,000/- for unaccounted money in property purchase:
The Assessing Officer added Rs. 6,09,600/- as undisclosed income for the purchase of a property based on a valuation report by the District Valuation Officer. The CIT(A) deleted the addition as there was no evidence of additional payment beyond the declared value in the agreement to sell. The CIT(A) emphasized that the burden of proof was on the department to establish undisclosed investment, which was not done. The ITAT found no evidence or circumstances indicating underhand payments, and upheld the CIT(A)'s decision to delete the addition.

In conclusion, the ITAT Delhi partially allowed the Revenue's appeal for statistical purposes, restoring the first issue to the Assessing Officer for further examination while upholding the deletion of the second issue's addition.