2021 (11) TMI 1002 - AT - Income Tax

Addition u/sec. 69A - Assessee had received on-money over and above the consideration mentioned in the registered sale deeds - Commissioner held that the provisions of section 69A are not applicable in Assessee's case and the AO has erred in applying the provisions of this section - HELD THAT - In the instant case, it is an admitted fact that no money was found at the time of survey conducted u/sec. 133A, however, certain information was found qua selling of flats at higher rate than the rate recorded in the sale deeds, however the AO without corroboration and fulfilling the ingredients of section 69A of the Act made the addition u/s. 69A of the Act, hence we are in concurrence with the finding of the Ld. Commissioner qua non-application of the provisions of section 69A to the issue in hand, consequently no interference is warranted qua conclusion drawn by the Ld. Commissioner. Department has also raised a grievance that the Ld. Commissioner erred in directing the AO to estimate the profit @ 15% on unaccounted sale receipts, when the provisions of section 69 of the Act clearly applicable to the facts of the present case - Commissioner while deciding non-applicability of the provisions of section 69A of the Act to the case of the Assessee, directed the AO to estimate profit @15% on unaccounted sale receipts. We are of the considered opinion that the ld. Commissioner though decided that section 69A of the act is not applicable to the facts of the case, however used his own wisdom by considering the peculiar facts and circumstances while following the decision in the case of Jay Builder 2012 (12) TMI 1194 - GUJARAT HIGH COURT by estimating profit @15% on unaccounted sale receipts. The direction of the Ld. Commissioner is based on the judgement of Hon'ble High Court and even otherwise in favour of the Revenue Department and against the Assessee, therefore, on overall consideration, no interference is called for on this issue as well.

Summary

Issues involved: Appeal by Revenue Department and cross objection by Assessee against order relating to non-application of section 69A of the Income Tax Act, 1961 for the A.Y. 2015-16.

Analysis:

1. Issue of Non-Application of Section 69A:
The Revenue Department raised multiple grounds of appeal, primarily challenging the non-application of section 69A of the Act by the ld. Commissioner. The AO had added a specific amount under section 69 of the Act, alleging that the Assessee received on-money not recorded in the sale deeds. However, the ld. Commissioner held that section 69A was not applicable in this case. The ld. Commissioner emphasized that for section 69A to apply, the Assessee must be found as the owner of unrecorded money with no explanation provided. In this case, no unrecorded money was found during the survey, only information about higher flat sale rates. The Tribunal agreed with the ld. Commissioner's finding, stating that the AO erred in invoking section 69A without proper corroboration, leading to no interference with the ld. Commissioner's conclusion on this issue.

2. Estimation of Profit on Unaccounted Sale Receipts:
Another aspect raised by the Revenue Department was the ld. Commissioner's direction to estimate profit at 15% on unaccounted sale receipts, despite the non-application of section 69A. The Tribunal noted that the ld. Commissioner, while deciding section 69A's inapplicability, directed the profit estimation based on a High Court judgment. The Tribunal reasoned that the ld. Commissioner's decision was in line with the High Court's ruling and favored the Revenue Department. Therefore, the Tribunal found no grounds for interference on this issue as well, leading to the dismissal of the Revenue Department's grounds.

3. Cross Objection by Assessee:
The cross objection filed by the Assessee supported the ld. Commissioner's order, indicating no need for any interference. Consequently, the Tribunal dismissed the cross objection as infructuous. Ultimately, the Tribunal dismissed the appeal by the Revenue Department and the cross objection by the Assessee, upholding the order pronounced by the ld. Commissioner.

In conclusion, the Tribunal's detailed analysis and findings on the issues of non-application of section 69A and estimation of profit on unaccounted sale receipts reflect a thorough consideration of the facts and legal precedents, resulting in the dismissal of both the appeal and cross objection.