2021 (2) TMI 467 - AT - Income Tax

Addition u/s 69B - investments exceeding the amount shown in the sale deed would not fasten any liability on the assessee under section 69B - HELD THAT - No documentary evidence has been placed on record which revealed that the assessee in the present case had purchased the property in question at a higher sum than what was revealed in the sale deed. Even otherwise, after going through contents of the registered sale deeds placed on record, we are of the view that these sale deeds are registered documents and the sale consideration of ₹ 39,12,000/- and ₹ 32,15,000/- were received by Shri Narayan and Shri Ganga Ram respectively. On the contrary, no document or corroborative evidence has been placed on record by the revenue authorities to prove that the investments made exceeded the investments shown in the books of account of the assessee. Therefore, merely stating that the assessee made investments exceeding the amount shown in the sale deed would not fasten any liability on the assessee under section 69B - We delete the addition - Decided in favour of assessee.

Summary

Issues:
Challenge to addition under section 69B of the IT Act.

Analysis:
The appeal was against the order of the ld. CIT (A) upholding the addition of ?6,50,000 under section 69B of the IT Act for the assessment year 2012-13. The AO added the amount on account of unexplained investment, which the assessee contested before the ld. CIT (A) to no avail.

The assessee had purchased land for ?39,12,000 and ?32,15,000 from two individuals. The AO added ?6,50,000 under section 69B as unexplained investment, as per the difference between the amounts shown in the books of account and the amounts mentioned by the sellers. The assessee argued that the AO did not provide an opportunity to explain, nor allow cross-examination of the sellers. The burden of proof was on the revenue to show the real investments exceeding those in the books of account.

Upon review, the Tribunal found that the revenue failed to prove that the assessee had made investments exceeding the amounts shown in the books of account. The sellers' statements did not mention the assessee's name, and there was no other corroborative evidence. The Tribunal distinguished a cited case where documents revealed higher purchase amounts, which was not the scenario here. The registered sale deeds supported the amounts paid to the sellers, and no evidence was presented to prove otherwise. Relying on precedents, the Tribunal concluded that merely alleging investments exceeding the amounts in the sale deed was insufficient to invoke section 69B liability. Consequently, the addition was deleted, and the appeal was allowed.

In conclusion, the Tribunal found in favor of the assessee, highlighting the revenue's failure to meet the burden of proof in establishing unexplained investments under section 69B of the IT Act. The decision was based on the lack of evidence supporting the addition and the absence of mention of the assessee in the sellers' statements.