2019 (6) TMI 401 - AT - Income Tax

Addition of total consideration - joint property - distribution agreement, the sale proceeds were to be divided into 8 parts - CIT( A) allowed the claim - HELD THAT - As perused relevant material on record including documents placed in the paper-book. The undisputed fact that emerges are that the stated plot of land was acquired by the assessee by way of inheritance from his mother. The documents on record has established that assessee was not the sole owner of the land under question and it was entitled for share to the extent of ₹ 16.42 Lacs only which has rightly been brought to tax in his hand. Deduction u/s 54F - HELD THAT - Assessee supplied construction bills as well as certificate of civil contractor to suggest that the money was spent for construction of the residential building. The assessee in support of the claim had filed copy of construction bills, statement showing mode of payment to contractor, correspondence with Sarpanch of Grampanchayat, Naygaon, Uran, NOC from other legal heirs to build a house, 7/12 extract, property tax receipt etc. The said documents were filed during remand proceedings also to AO vide submissions dated 23/05/2015 and therefore, there was no violation of Rule 46A as urged by the revenue in grounds of appeal. The perusal of these documents clearly established the assessee s claim u/s 54F. Therefore, no infirmity could be found in the impugned order, in this regard. Ground No.1 stands dismissed. Addition u/s 68 - HELD THAT - So far as the addition it emerges that except for third party documents / evidences, there is nothing on record which corroborates the fact that any such unaccounted money flowed to the assessee in cash. The assessee denied having received any such money and therefore, the onus had shifted on revenue to dislodge the assessee s claim. As rightly noted by CIT(A), no further investigation /inquiry has been conducted by Ld.AO to contradict the assessee s claim. The opportunity to cross-examine the persons has never been provided to the assessee and the assessee was directed to prove the negative i.e. that he did not receive any unaccounted money. Therefore, we do not find any infirmity in the impugned order on this issue. Ground No. 2 stand dismissed.

Summary

Issues Involved:
1. Allowance of deduction u/s. 54F based on evidence provided by civil contractor without verifying genuineness and physical existence of building.
2. Deletion of addition of unaccounted cash credit of ?1,13,40,000 under section 68 due to lack of evidence and verification.

Analysis:

Issue 1: Allowance of deduction u/s. 54F
The Appellate Tribunal upheld the decision of the CIT(A) to allow the deduction u/s. 54F. The assessee submitted bills and a certificate from a civil contractor to support the claim of spending on construction. The Tribunal found that the documents provided, including construction bills, payment details, and approvals, sufficiently proved the expenditure for building a residential house. It was noted that the documents were submitted during remand proceedings, and there was no violation of Rule 46A. The Tribunal concluded that the claim under section 54F was valid based on the documentary evidence presented, dismissing the revenue's appeal on this ground.

Issue 2: Deletion of unaccounted cash credit addition under section 68
Regarding the deletion of the addition of unaccounted cash credit of ?1,13,40,000 under section 68, the Tribunal upheld the CIT(A)'s decision. The Tribunal observed that there was no concrete evidence or verification by the Assessing Officer (AO) to prove that the assessee received the alleged unaccounted cash. The AO did not conduct a thorough investigation or verification to confirm the receipt of the amount. The Tribunal noted that the burden of proof lay on the revenue to establish the receipt of unaccounted money, which was not adequately done. The Tribunal emphasized that the mere entry in a third party's books was insufficient to support the addition. As the AO failed to provide substantial evidence or conduct proper inquiries, the Tribunal found no fault in the CIT(A)'s decision to delete the addition under section 68. Consequently, the Tribunal dismissed the revenue's appeal on this ground.

In conclusion, the Appellate Tribunal affirmed the decisions of the CIT(A) regarding the allowance of deduction u/s. 54F and the deletion of the addition of unaccounted cash credit under section 68. The appeal by the revenue was dismissed, and the order was pronounced on 6th June 2019.