2022 (8) TMI 857 - AT - Income Tax

Undisclosed sale consideration against the sale of property - survey operation u/s 133A - In survey operation, a draft sale deed was found between the assessee and other party wherein the sale consideration was shown different leading to a difference in the sale consideration which was less/short reported by the assessee - HELD THAT - The draft sale deed based on which the addition has been made by the authorities below has never been signed by the assessee and therefore no credence can be given to such draft sale deed. Likewise, the admission before the Settlement Commission made by the third party cannot be used against the assessee until and unless it is provided to the assessee for the confrontation. Draft sale deed in the absence of other corroborative materials cannot substitute the evidence. Hon ble Supreme Court in the case of CBI vs. VC Shukla 1998 (3) TMI 675 - SUPREME COURT held that entry can be made by any person against the name of any other person in any sheet, paper or computer, but the same cannot be the basis of making charges against the person whose name noted on sheet without corroborating the same The admission made by the buyer of the property before the Settlement Commission does not establish the fact that the assessee has received unaccounted consideration. Thus, we are not convinced with the findings of the authority below. Hence, we set aside the finding of the Ld. CIT(A), and direct the AO to delete the addition made by him. Thus, the ground of appeal of the assessee is allowed.

Issues:
1. Appeal against order of Commissioner of Income Tax (Appeal) under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 for Assessment Year 2015-2016.
2. Addition made by Assessing Officer and sustained by Commissioner of Income Tax (Appeal) under section 143(3) r.w.s 147.
3. Legality of proceeding initiated under section 147 and notice issued under section 148.
4. Confirmation of income assessed under 'Addition of Unaccounted Receipt' and sale of Land at Himatnagar.
5. Recovery of tax during survey proceedings for relevant assessment year.
6. Framing of Assessment order without specifying the section of the income tax act for addition of unaccounted receipt.
7. Lack of evidence to prove actual receipt of cash by the appellant.

Analysis:
1. The appeal challenged the Commissioner of Income Tax (Appeal) order under s. 143(3) r.w.s. 147 for the Assessment Year 2015-2016. The appellant disputed the addition made by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeal) under section 143(3) r.w.s 147.
2. The appellant contested the legality of the proceeding initiated under section 147 and the notice issued under section 148. The argument focused on the erroneous nature of the addition and the sustainability of the same in law.
3. The issue centered around the confirmation of income assessed under 'Addition of Unaccounted Receipt' and the sale of Land at Himatnagar. The appellant challenged the basis of the addition, citing discrepancies in the documents and lack of proper consideration.
4. Concerns were raised regarding the recovery of tax during survey proceedings for the relevant assessment year. The appellant highlighted the premature nature of tax recovery without completing assessment proceedings for the correct assessment year.
5. The appellant criticized the Assessment order for the lack of specification under which section of the income tax act the addition of unaccounted receipt was made. This ambiguity raised questions about the validity of the assessment.
6. The final issue revolved around the absence of concrete evidence to prove the actual receipt of cash by the appellant. The appellant argued that the lack of substantiating evidence rendered the addition unsustainable.

Detailed Analysis:
1. The appeal challenged the order of the Commissioner of Income Tax (Appeal) under s. 143(3) r.w.s. 147 for the Assessment Year 2015-2016. The appellant raised multiple grounds disputing the addition made by the Assessing Officer and sustained by the Commissioner of Income Tax (Appeal) under section 143(3) r.w.s 147. The appellant contended that the addition was erroneous, illegal, and unsustainable in law.
2. The legality of the proceeding initiated under section 147 and the notice issued under section 148 was questioned by the appellant. The argument focused on the procedural irregularities and the lack of jurisdiction in making the addition. The appellant sought the annulment or cancellation of the assessment.
3. The issue of the confirmation of income assessed under 'Addition of Unaccounted Receipt' and the sale of Land at Himatnagar was a key point of contention. The appellant raised concerns about the basis of the addition, highlighting discrepancies in the documents and the lack of proper consideration in determining the undisclosed receipt.
4. The appellant also criticized the premature recovery of tax during survey proceedings for the relevant assessment year. The appellant argued that tax recovery should not have been initiated without completing the assessment proceedings for the correct assessment year, leading to procedural irregularities.
5. Another significant issue was the framing of the Assessment order without specifying the section of the income tax act for the addition of unaccounted receipt. The appellant highlighted this ambiguity as a procedural flaw that undermined the validity of the assessment and subsequent addition.
6. Lastly, the appellant emphasized the lack of concrete evidence to prove the actual receipt of cash. The appellant argued that the addition made on the basis of statements recorded from third parties during survey proceedings lacked evidentiary value, casting doubt on the sustainability of the addition.

This detailed analysis covers the various issues raised in the appeal and provides a comprehensive overview of the arguments presented by the appellant challenging the assessment order.

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