2019 (10) TMI 149 - AT - Income Tax

Assessment u/s 153A - addition of cash paid for property purchased - HELD THAT - The assessee did not produce any receipt executed in favour of the purchaser of ₹ 8 lakhs. No reasons have been explained why the cash of ₹ 8 lakhs have been received. Further no evidence have been produced on record with respect to availability of ₹ 8 lakhs in cash with the buyer of the garage. Further cheque payment of ₹ 9 lakhs have been made in March, 2006 and September, 2006, but, the Agreement to Sell of the garage is Dated 15.04.2006 which has no co-relation with the payments for purchase of the Flat at Hyderabad. The assessee failed to prove the genuineness of the execution of the Agreement to Sell Dated 15.04.2006. The alleged purchaser has not filed any confirmation before the authorities below. Considering the totality of the facts and circumstances of the case and incriminating document found during the course of search to show that assessee has initially declared lesser value of the Flat, but, when seized document was found during the course of search which shows assessee has paid higher value of the flat. It, therefore, appears assessee has created a story of payment of ₹ 8 lakhs on receipt of ₹ 8 lakhs for sale of garage. The preponderance of the probability do not support the case of the assessee at all. Conduct of the assessee prior to the search and after search clearly disentitle the assessee for any relief. No interference is required in the mater. We, therefore, confirm the Orders of the authorities below and dismiss the appeal of assessee.

Issues:
- Addition of ?8 lakhs towards purchase of a flat in Hyderabad.
- Justification for the addition based on incriminating documents found during search.
- Challenge to the addition before the Ld. CIT(A) and subsequent dismissal of the appeal.

Issue 1: Addition of ?8 lakhs towards purchase of a flat in Hyderabad

The case involves the assessee declaring the purchase value of a flat in Hyderabad at ?9 lakhs, with payments made through cheque and cash. However, during a search operation, an incriminating document was found indicating the purchase value of the flat at ?17 lakhs. The assessee claimed that the additional ?8 lakhs came from the sale of a garage, supported by an agreement dated 15.04.2006. The assessing officer (A.O.) did not accept this claim due to lack of documentary evidence, treating the ?8 lakhs as undisclosed income and making an addition accordingly.

Issue 2: Justification for the addition based on incriminating documents found during search

The Ld. CIT(A) upheld the A.O.'s decision, stating that there was no direct connection between the advance received from the garage sale and the cash payment for the flat. The absence of receipts for the alleged payments and the lack of contemporaneity between the garage sale and flat purchase led to the conclusion that the ?8 lakhs constituted concealed income. The appellate authority emphasized the need for evidence regarding the source of the cash payment, ultimately confirming the A.O.'s order.

Issue 3: Challenge to the addition before the Ld. CIT(A) and subsequent dismissal of the appeal

The assessee challenged the addition before the Ld. CIT(A), reiterating the explanation for the ?8 lakhs payment and providing supporting documents. However, the Ld. CIT(A) dismissed the appeal, emphasizing the lack of evidence linking the cash payment to the garage sale proceeds. The appellate tribunal concurred with the lower authorities, noting discrepancies in the assessee's claims and the incriminating document seized during the search. The tribunal held that the totality of facts and conduct of the assessee did not support the explanation provided, leading to the dismissal of the appeal.

In conclusion, the appellate tribunal upheld the addition of ?8 lakhs towards the purchase of the flat in Hyderabad, based on incriminating documents found during the search and the lack of evidence linking the cash payment to the garage sale proceeds. The tribunal found no grounds to interfere with the lower authorities' orders and dismissed the appeal of the assessee.

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