2022 (6) TMI 234 - AT - Income Tax

Addition u/s 69B - Amount of investments, etc., not fully disclosed in books of account. - HELD THAT - On a perusal of the statutory provision, it can safely be gathered that the assessee has made investment in the property and the investment recorded by him based on the statement recorded by the witness stated that the consideration of the said property was Rs. 50,00,000 and they have received the said money from the assessee. Whereas the assessee has not officered any plausible explanation. He remained to be silent right from the assessment proceedings and before the CIT(A) and has not objected to the findings recorded by the witness and he also remained silent on the cross examination of the witness whose statement is relied upon. Thus, the silence of the assessee on the statement recorded proves that he has accepted the averments made in the statement of the witness whose statement has been recorded after the due process of law. We, thus, in terms of our aforesaid observations and concurring with the well-reasoned view taken by the CIT(A) that mere filling of an appeal and filling of an affidavit which are self-serving documents and learned AR at the time of hearing before CIT(A) could not bring any material which could have change the factual position of the case. Thus, based on this observation we uphold of the view of the CIT(A) and the appeal of the assessee is dismissed.

Issues Involved:
1. Confirmation of addition of Rs. 45,00,000 under Section 69B of the Income-tax Act, 1961.
2. Alleged denial of opportunity to the appellant to argue before the Commissioner of Income Tax (Appeal) [CIT(A)].

Detailed Analysis:

1. Confirmation of Addition of Rs. 45,00,000 under Section 69B:
The primary issue revolves around the addition of Rs. 45,00,000 made by the Assessing Officer (AO) under Section 69B of the Income-tax Act, 1961, which was confirmed by the CIT(A). The assessee had filed a return of income declaring Rs. 9,87,670, but during the assessment, it was found that the assessee had purchased two properties for amounts significantly lower than their market value as determined by the Stamp Valuation Authority. The AO observed discrepancies in the declared purchase prices and the actual market values, leading to the suspicion of undisclosed investments.

The AO issued summons to the sellers of the properties. One of the sellers, Shri Nardha, had passed away, but his legal heirs, Smt. Chutki Bai and Shri Jaswant Kumar Sonant, confirmed receiving Rs. 50,00,000 in cash from the assessee. They provided detailed statements about the transaction and the utilization of the received amount, which were included in the assessment order. Conversely, the other seller, Shri Mukesh Tiwari, denied receiving any extra money beyond the declared Rs. 10,00,000.

The assessee was confronted with these statements but denied the allegations, claiming the statements were false and concocted. The assessee also argued that the statements were taken behind his back without an opportunity for cross-examination, and thus should not be used against him. However, the AO and CIT(A) dismissed these contentions, emphasizing that the statements were recorded under oath and the assessee failed to request cross-examination during the assessment proceedings.

The Tribunal upheld the findings of the lower authorities, noting that the assessee did not provide any plausible explanation for the discrepancies and remained silent on the opportunity for cross-examination. The Tribunal concluded that the silence and failure to provide substantial evidence or challenge the statements effectively indicated acceptance of the statements made by the witnesses.

2. Alleged Denial of Opportunity to Argue Before CIT(A):
The assessee contended that he was not provided an opportunity to argue before the CIT(A). However, the CIT(A) found that the assessee's authorized representative had been duly informed and had participated in the proceedings. The CIT(A) noted that the statements of the legal heirs of the deceased seller were confronted to the assessee, and it was the assessee's responsibility to request cross-examination, which he did not do. The Tribunal agreed with the CIT(A), stating that the assessee's claims were unsubstantiated and appeared to be delaying tactics.

Conclusion:
The Tribunal dismissed the appeal of the assessee, confirming the addition of Rs. 45,00,000 under Section 69B of the Income-tax Act, 1961. The Tribunal found that the assessee failed to provide a satisfactory explanation for the discrepancies in the property transactions and did not effectively challenge the statements of the witnesses. The Tribunal also upheld the CIT(A)'s finding that the assessee was provided with adequate opportunity to present his case and that the procedural requirements were duly followed. The appeal was dismissed, and the order was pronounced in open court on 2nd June, 2022.

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