2022 (11) TMI 1168 - AT - Income Tax

Unexplained investment u/s 69 - Advance receipt against sale of land - Transfer yet to be registered - Addition made on the basis incriminating documents - Dumb Document - Saudha Chithi found and seized during the course of search and seizure action - unaccounted land transactions - CIT(A) deleted the additions - HELD THAT - We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in in the case of Shri Pravinchandra Dahyabhai Umriger 2022 (5) TMI 1479 - ITAT SURAT as held sauda chithi is a dumb document as far as the assessee is concerned. Hence, the additions cannot be made on the basis of such dumb documents. As the issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench(supra) and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the Coordinate Bench (supra). We find no reason to interfere in the said order of the Coordinate Bench, therefore, respectfully following the binding judgment of the Coordinate Bench, we dismiss the appeal of the Revenue.

Summary

Issues Involved:
1. Dismissal of assessee's appeal for AY 2016-17.
2. Deletion of addition of Rs. 41,67,45,000/- for AY 2017-18 by CIT(A).
3. Validity of incriminating documents (Saudha Chithi) as evidence.
4. Non-grant of cross-examination opportunity.
5. Valuation discrepancies and DVO report.
6. Legal principles on tax imposition and collection.

Issue-wise Detailed Analysis:

1. Dismissal of Assessee's Appeal for AY 2016-17:
The assessee chose not to press the appeal for AY 2016-17 (ITA No.110/SRT/2021). The Departmental Representative had no objection, leading to the dismissal of the appeal.

2. Deletion of Addition of Rs. 41,67,45,000/- for AY 2017-18 by CIT(A):
The CIT(A) deleted the addition made by the Assessing Officer (AO) based on the Saudha Chithi. The CIT(A) observed that the document was found at a third party's premises and not at the assessee's premises, thus the presumption under sections 132(4) and 292(C) was not applicable. The document did not contain the assessee's name or signature, and the statements from co-owners did not implicate the assessee.

3. Validity of Incriminating Documents (Saudha Chithi) as Evidence:
The Saudha Chithi was deemed a "dumb document" as it did not directly implicate the assessee. The CIT(A) noted that the document was neither in the handwriting of the assessee nor signed by them. The statements of the co-owners and the retraction by Shri Manoj C. Patel further weakened the document's evidentiary value. The Supreme Court judgments in Common Cause (A Registered Society) vs. Union of India and CBI vs. V.C. Shukla were cited to support this conclusion.

4. Non-grant of Cross-examination Opportunity:
The AO denied the assessee's request for cross-examination of Shri Manoj C. Patel and Shri Jayantibhai Babariya, citing the request was made at the end of the year. The Tribunal found this denial as a violation of natural justice, referencing Supreme Court rulings in Krishnachand Chelaram vs. CIT and Andaman Timber Industries vs. Commissioner of Central Excise, which emphasize the necessity of cross-examination in due process.

5. Valuation Discrepancies and DVO Report:
The AO made the addition before receiving the District Valuation Officer's (DVO) report, which later valued the property significantly lower than the amount stated in the Saudha Chithi. The AO's assessment for AY 2018-19 accepted the DVO's valuation, further discrediting the Saudha Chithi's figures. The Tribunal upheld the CIT(A)'s reliance on the DVO report over the Saudha Chithi.

6. Legal Principles on Tax Imposition and Collection:
The Tribunal emphasized that tax must be levied and collected in accordance with the law, referencing Article 265 of the Constitution of India. The Supreme Court's decision in ITO vs. CH. Atchaiah was cited, highlighting that only the right person should be taxed. The Tribunal concluded that the Saudha Chithi did not provide a legal basis to tax the assessee for the alleged unaccounted investment.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the addition. The decision was based on the lack of direct evidence against the assessee, the improper denial of cross-examination, and the reliance on a more credible DVO report. The Tribunal's ruling was consistent with legal precedents ensuring due process and accurate tax imposition.