2019 (1) TMI 407 - HC - Income Tax

Payment for obtaining Power of Attorney with respect to a property - Held that - No question of law arising and on facts it has to be stated that there is absolutely no explanation offered by the assessee. The assessee merely produced a letter of the person who executed the Power of Attorney showing that he had received the amounts from another. There were no bank details or the other party confirmation produced before the Department. No infirmity in the order of the Tribunal. We answer the question as to perversity against the assessee and in favour of the Revenue.

Summary

Issues:
1. Addition of ?10,00,000 to the assessee's income for the assessment year 1999-2000.
2. Correctness of the Tribunal's decision in confirming the addition and the alleged non-consideration of relevant facts.

Analysis:
The case involved an appeal by the assessee against the Tribunal's decision to add ?10,00,000 to the assessee's income for the assessment year 1999-2000. The amount in question was paid to obtain a Power of Attorney for a property, for which the assessee had also reported capital gains from the property's sale. However, there was a lack of explanation regarding the investment amounts and payments made to the individual who received the ?10,00,000. The Assessing Officer found the explanation provided unsatisfactory, leading to an initial addition of ?10,00,000 to the assessee's income.

Subsequently, the First Appellate Authority increased the addition to ?15,91,650 based on a report indicating the actual payment amount. The Tribunal, in its order, acknowledged the assessee's explanation that a portion of the amount was sourced from the bank accounts of the assessee's wife and her father. This explanation was accepted, and the Tribunal deleted the corresponding portion of ?5,91,650 from the addition. However, the Tribunal noted that this issue was raised post the initial assessment, and since there was no appeal by the Department, it was not further pursued.

Regarding the primary issue of the ?10,00,000 addition, the Tribunal found no legal question and emphasized the lack of explanation provided by the assessee. The only evidence presented was a letter from the individual who received the payment, without supporting bank details or confirmation from the other party. Consequently, the Tribunal upheld the addition, ruling against the assessee and in favor of the Revenue. The appeal was dismissed, with no costs awarded.

In conclusion, the Tribunal's decision to confirm the addition of ?10,00,000 to the assessee's income for the assessment year 1999-2000 was upheld by the High Court. The lack of a satisfactory explanation from the assessee regarding the payment made and the absence of supporting documentation led to the dismissal of the appeal, with the court ruling in favor of the Revenue.