2020 (1) TMI 401 - AT - Income Tax

Unaccounted investment in land - HELD THAT - As perused the statement made by the said Shri Indravadan Intwala and the cross examination done by the assessee of the said statement at page no.13 of the order of the AO. On specific question in the cross examination put by the assessee to the said witness i.e. Shri Shri Indravadan Intwala to the effect that what was the consideration received by him? and in reply to this question the said Shri Indravadan Intwala has categorically admitted that he do not remember but it was as per sale deed executed . When once the said Shri Indravadan Intwala in his categorical examination in respect of the consideration received by him has clearly stated that he had received the consideration in respect of land sold to the assessee as per sale deed executed by him. Therefore there was no doubt left for the Revenue to discard the said statement made during cross examination of said Shri Indravadan Intwala. The Revenue Authorities have misinterpreted misconstated the statement of Shri Indravadan Intwala wherein he has nowhere mentioned the specific amount of on money received from the assessee on the contrary had specifically and in clear words had admitted in cross examination to question no.3 that the sale consideration received by him was as per sale deed executed . We are also of the view that the sale deed executed by the Shri Indravadan Intwala in favour of assessee was a registered document and therefore presumption of correctness is attached to the contents contained in the said register document. Therefore if the Revenue wanted to uproot the said presumption then it was the onus of the Revenue to bring on record some cogent convincing or admissible evidence on record to disprove the contents of the registered documents in the shape of sale deed. Therefore there was no occasion left with the Revenue to make additions merely on some vague answers given by the said Shri Indravadan Intwala. It is a settled Law that no additions can be made on suspicions as howsoever strong the suspicion may be but the same cannot take place of proof. Therefore keeping in view of the above principles in mind we allow this ground and deleted the addition accordingly appeal of the assessee is allowed.

Summary

Issues:
Appeal against additions of unexplained cash credit and unaccounted investment in land.

Analysis:
1. The appeal was against the order of the Commissioner of Income Tax (Appeals) confirming the additions made by the Assessing Officer for the assessment year 2006-07. The original assessment was passed in 2006, and after a remand, reassessment proceedings were completed in 2015, resulting in additions.

2. The main contention in the appeal was regarding the addition of ?25,52,780 on account of unaccounted investment in land. The Assessee argued that confirmations and PAN details of lenders were provided during the first appellate proceedings, and the loans were received through account payee cheques. The Assessee also challenged the reliability of the statement of the seller of the land, highlighting contradictions and pressure during the recording of the statement.

3. The Tribunal considered the arguments of both parties and examined the facts of the case. It noted that the seller had admitted to receiving part of the consideration as 'on money' and agreed to pay tax on it. However, the Assessee denied making any such additional payment. The Tribunal found discrepancies in the statement of the seller and the cross-examination, where the seller failed to recall the exact consideration received.

4. The Tribunal emphasized that the sale deed was a registered document, and the contents of a registered document carry a presumption of correctness. It held that the Revenue had the burden to provide convincing evidence to disprove the contents of the registered sale deed if they wanted to challenge it. The Tribunal concluded that additions cannot be made solely on suspicions and overturned the addition of unaccounted investment in land.

5. Ultimately, the Tribunal allowed the appeal of the Assessee, ruling in favor of deleting the addition of ?25,52,780 on account of unaccounted investment in land. The decision was based on the lack of concrete evidence provided by the Revenue to challenge the registered sale deed and the presumption of correctness attached to it.

6. The judgment was delivered by the Appellate Tribunal ITAT Surat, with detailed analysis and reasoning provided for overturning the addition made by the Revenue Authorities. The Tribunal's decision highlighted the importance of concrete evidence and adherence to legal principles in making additions in assessment proceedings.