2021 (7) TMI 770 - AT - Income Tax

Addition on account of unaccounted money was invested by the assessee for purchase of property in J.P. Green, Greater Nodia - entries reflected in the loose papers - HELD THAT - In the instance case, the property was in the name of elder brother of the assessee namely Shri Pradeep Kumar Gupta and his wife Smt. Seema Gupta, the price of ₹ 5.85 Cores mentioned in allotment letter is more than the amount of ₹ 5.65 crores mentioned in the seized documents and considering the fact that the document found in the premises of the assessee does not relate to him but his brother and his wife and further considering the fact that the entire payment has been made through banking channels by his brother and his wife, therefore, in view of the detailed discussion by the learned CIT(A) while deleting the addition, we do not find any infirmity in the same. Accordingly, the order of the learned CIT(A) is upheld and the ground raised by the Revenue is dismissed.

Issues Involved:
1. Whether the addition of ?2,15,00,000/- as unaccounted money invested by the assessee for the purchase of property in J.P. Green, Greater Noida was justified.

Issue-wise Detailed Analysis:

1. Facts and Background:
The case involves an appeal by the Revenue against the order of CIT(A) deleting an addition of ?2,15,00,000/- made by the Assessing Officer (AO) on account of unaccounted money allegedly invested by the assessee in a property transaction. The assessee, an individual with income from business, house property, and other sources, was subjected to a search under Section 132(1) of the I.T. Act, during which certain documents were seized. The AO noted that these documents indicated payments for a property transaction in Jaypee Greens, Greater Noida, and concluded that the assessee had made unaccounted payments.

2. AO's Findings:
The AO observed discrepancies between the amounts mentioned in the seized documents and the provisional allotment letter. The AO concluded that the assessee used coded terms ‘A’ for accounted money and ‘B’ for unaccounted money. Based on the seized documents, the AO inferred that the assessee made unaccounted payments totaling ?2.15 crore and added this amount to the assessee’s income.

3. Assessee's Defense:
The assessee argued that the AO's addition was based on presumptions without corroborative evidence. The property was actually purchased by the assessee’s elder brother and his wife, and all payments were made through banking channels. The assessee submitted that the total property price was ?5.85 crore, out of which ?2.65 crore had been paid by cheque, and the remaining amount was still outstanding. The assessee also provided the provisional allotment letter and payment plan to support his claim.

4. CIT(A)'s Observations:
The CIT(A) examined the seized document and found that the total property price mentioned was ?5.65 crore, with ?3.5 crore as accounted money and ?2.15 crore as unaccounted money. However, the CIT(A) noted that the property was in the name of the assessee’s elder brother and his wife, and the total price as per the allotment letter was ?5.85 crore. Since the payments made were through banking channels and the outstanding amount was ?3.20 crore, the CIT(A) concluded that there was no scope for unaccounted cash payments. The CIT(A) also highlighted that the AO did not provide evidence to show that the property value exceeded ?5.85 crore.

5. Tribunal's Analysis:
The Tribunal upheld the CIT(A)’s order, noting that the property was in the name of the assessee’s elder brother and his wife, and payments were made from their bank accounts. The Tribunal found no evidence to support the AO’s claim of unaccounted cash payments. The Tribunal also referenced several judicial precedents, including decisions from the Delhi High Court and Mumbai Bench of the Tribunal, which emphasized that additions based on loose papers or uncorroborated documents could not be justified.

6. Conclusion:
The Tribunal concluded that the AO’s addition of ?2.15 crore as unaccounted money was not substantiated by evidence. The property transaction was conducted through banking channels, and the property was not in the assessee’s name. Therefore, the Tribunal upheld the CIT(A)’s decision to delete the addition and dismissed the Revenue’s appeal.

Judgment:
The appeal filed by the Revenue was dismissed, and the order of the CIT(A) deleting the addition of ?2.15 crore was upheld. The Tribunal found no infirmity in the CIT(A)’s detailed analysis and conclusions. The judgment was pronounced in the open court on 15/07/2021.

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