2023 (5) TMI 843 - AT - Income Tax

Long term capital gain - reliance on unsigned computerized Satakhat (agreement for sale) found during course of survey in premiss of third party lawyer - HELD THAT - We find merit in the submission made by assessee that AO made addition on the basis of third-party information neither the AO made investigation on fact from purchasers nor copy of such satakat was provided to assessee nor the person from whose possession the document was recovered was examined during the re-assessment proceedings. There was no corroborative and supporting evidence to support the alleged incriminating material found at the business premises of Vasudev Goplani, Advocate. In absence of corroborative and supporting evidence, no justification for making addition on account of long term capital gains. Appeal of assessee allowed.

Summary

Issues Involved:
The issues involved in the judgment are the delay in filing the appeal before the Tribunal and the addition of long-term capital gains based on an alleged agreement found during a survey at a third party's premises.

Delay in Filing Appeal:
The appeal was filed with a delay of thirty-eight days, and the assessee sought condonation of the delay. The assessee explained that the delay was due to efforts to contact an advocate involved in the survey action. The Authorized Representative argued that the delay was not intentional and that the appeal should be heard on merit to prevent prejudice to the assessee. The Revenue, however, claimed that the reasons for the delay were artificial and based on a concocted story. After considering both sides, the Tribunal condoned the delay, emphasizing the cause of substantial justice over technical considerations.

Addition of Long-Term Capital Gains:
The case revolved around the addition of Rs.17,80,500/- on account of long-term capital gains based on an unsigned agreement found during a survey at a third party's premises. The Assessing Officer reopened the case based on this agreement, alleging that the income of the assessee had escaped assessment. The assessee argued that the agreement was not signed by them, and no cross-examination was conducted with the advocate or purchaser mentioned in the document. The Revenue contended that the details in the agreement matched the payment made to the assessee as per the conveyance deed. However, the Tribunal found that the Assessing Officer solely relied on the document found at the third party's premises without conducting thorough investigations or providing corroborative evidence.

Conclusion:
After reviewing the submissions and lower authorities' orders, the Tribunal found that the addition of long-term capital gains lacked sufficient evidence and justification. The Tribunal directed the Assessing Officer to delete the addition, ruling in favor of the assessee. Consequently, the appeal of the assessee was allowed.