2022 (11) TMI 473 - AT - Income Tax

Unaccounted cash - On-money received - receipt of the payment after the cancellation of the booking of flat - digital data which was seized during the course of search clearly established the Planned (1) cheque and Planned (2) received as an unaccounted cash - HELD THAT - It is pertinent to note that the assessee has given the details related to payment of Rs. 43,26,000/- which was never doubted by the Revenue as the said payment was made through cheque. The cancellation of the flat was during the search period for which after the search the assessee was paid the exact amount through cheque by J. P. Iscon Ltd. The assessee has pointed various documents including the agreement to sale wherein it was clearly set out that the flat was booked for Rs. 68,26,000/- but due to certain reasons there was cancellation of flat. The Ledger Account of J. P. Iscon Ltd. from 01.04.2010 to 31.03.2017 from assessee s books of accounts showing complete details of mode of payments/received and amount paid/received back was given by the assessee during the assessment proceeding. Merely finding the name of the transaction in the excel sheet during the search cannot held the assessee responsible for cash which was never tracked down by the Assessing Officer from assessee s books of accounts. The assessee has denied any payment of cash portion during the assessment proceeding. AO has never pointed out from the accounts of the assessee that Rs. 14,00,000/- were paid to J. P. Iscon Ltd. in cash, thus, AO as well as CIT(A) was not right in making this addition. The appeal of the assessee is allowed.

Summary

Issues:
Assessment of unexplained investment based on alleged cash payment for flat booking.

Analysis:

1. The appeal was filed against the order passed by the Ld. CIT(A) for A.Y. 2011-12. The appellant contended that there was no material to show cash payment for flat booking. The search conducted revealed digital data indicating unaccounted cash received. The Assessing Officer made an addition of Rs. 14,00,000 as unexplained investment.

2. The CIT(A) dismissed the appeal, leading the assessee to approach the ITAT. The appellant argued that all payments were made through cheques, totaling Rs. 43,26,000, for flat booking, which was later canceled. The amount was refunded by the company through a cheque, duly reflected in the books of accounts.

3. The Ld. A.R. presented details of payments made and documents supporting the transactions. The cancellation of the flat did not affect the legitimacy of the payments. The appellant relied on legal precedents to support their case.

4. On the other hand, the Ld. D.R. contended that the cash payment of Rs. 14,00,000 was separate from the flat cancellation issue. However, the ITAT found that the Assessing Officer did not establish the alleged cash payment from the assessee's accounts.

5. After considering the arguments and evidence, the ITAT noted that all payments were made through cheques, and the canceled flat booking was duly accounted for. The appellant provided detailed documentation and explanations during the assessment proceedings, which were not refuted by the Assessing Officer.

6. The ITAT observed that the mere mention of a transaction in an excel sheet during the search was insufficient to implicate the assessee for unexplained cash payment. Since the Assessing Officer failed to identify any cash payment from the assessee's accounts, the addition of Rs. 14,00,000 as unexplained investment was deemed unjustified.

7. Consequently, the ITAT allowed the appeal of the assessee, emphasizing the lack of evidence supporting the alleged cash payment and the proper accounting of all transactions related to the flat booking and subsequent cancellation.