2021 (5) TMI 80 - AT - Income Tax

Unexplained investment u/s 69 - HELD THAT - Upon perusal of the entire set of documents as made available before us it is ascertained that payment were made to TIPL through banking channel. AO has failed to disprove such facts. The statement of TIPL confirming the payment of ₹ 3.50 crores made by the appellant supported by corroborating evidence being the return of income and the balance sheet of the year under consideration keeps no scope of questioning the genuineness of the payment made by the appellant. The source of payment made by the appellant has neither been doubted by the Ld. AO. Therefore, under the circumstances the provisions of Section 69 of the Act are not applicable in the absence of primary condition for invoking the said section that the investment made is not recorded in the books of accounts The ratio laid in the case of CIT vs. M.B. Patel 2013 (11) TMI 527 - GUJARAT HIGH COURT is rightly applicable to the instant case; the investment made by the assessee were duly shown; the source of investment as made from the assessee s account has neither been doubted by the Ld. AO. The plea of the Ld. AO of not being able to verify the genuineness of the transaction with TIPL in their absence cannot be said to be justified when all other evidences speak otherwise. The appellant company and the confirming parties as well regularly assessed to tax and the amount received is duly reflected in their books of accounts. Neither it is the case of the revenue that the declaration made by the confirming party through its director is false and, therefore, considering entire aspect of the matter the addition on account of unexplained investment is not sustainable in the eye of law fact of which has rightly been taken care of by the Ld. CIT(A) while deleting addition - Decided against revenue..

Summary

Issues involved:
Challenge to deletion of addition of unexplained investment under Section 69 of the Income Tax Act, 1961.

Detailed Analysis:

1. Background and Facts:
The appeal was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals) concerning the deletion of an addition of ?3,50,00,000 made on account of unexplained investment under Section 69 of the Income Tax Act for Assessment Year 2011-12. The appellant, engaged in real estate development, was involved in a transaction where a confirming party, Tripada Infrastructure Pvt. Ltd., received a payment of ?3,50,00,000 in relation to the purchase of land.

2. Arguments and Evidence:
During the assessment proceedings, the appellant submitted comprehensive evidence including agreements, deeds, bank transactions, and declarations to support the genuineness of the payment made to Tripada Infrastructure Pvt. Ltd. The appellant argued that the addition was made without proper consideration of the facts and evidence provided. The confirming party did not attend the summons issued by the Assessing Officer, leading to the addition under Section 69.

3. First Appellate Authority's Decision:
The First Appellate Authority deleted the addition, emphasizing the lack of contrary evidence to doubt the genuineness of the payment. The authority noted the comprehensive evidence submitted by the appellant, including ledger accounts, bank transactions, and declarations from Tripada Infrastructure Pvt. Ltd. The authority also highlighted that the source of payment was not in question and that the provisions of Section 69 were not applicable as the investment was duly recorded in the books of account.

4. Judgment and Conclusion:
Upon thorough review of the documents and evidence, the Tribunal found that the payment to Tripada Infrastructure Pvt. Ltd. was made through banking channels and supported by corroborating evidence. The Tribunal concluded that the provisions of Section 69 were not applicable as the investment was recorded in the books of account, in line with the decision of the jurisdictional High Court. The Tribunal dismissed the Revenue's appeal, affirming the deletion of the addition of unexplained investment. The Tribunal found the appeal devoid of merit and upheld the decision of the First Appellate Authority.

5. Final Outcome:
The Tribunal pronounced the order on 30/04/2021, dismissing the Revenue's appeal and affirming the deletion of the addition of unexplained investment under Section 69 of the Income Tax Act for the Assessment Year 2011-12.

This detailed analysis highlights the key arguments, evidence, decisions, and conclusions drawn in the legal judgment regarding the challenge to the deletion of the addition of unexplained investment under Section 69 of the Income Tax Act.