2023 (6) TMI 562 - AT - Income Tax

Assessment u/s 153C - cash payment for purchase of property - Addition u/s 69 - addition made on basis of the copy of the agreement - HELD THAT - As during hearing the registered deed was filed by the assessee and the copy of the audited balance sheet of the assessee - Where it is clear that the entire amount Rs.31,50,000/- was paid through banking channel. Supporting document was also submitted before the first appellate authority. DR had not made any contradictory submission against the facts of the assessee. During assessment and in the appeal proceeding the issue was fully agitated by the assessee but it was not taken care by the revenue. Accordingly, the addition amount is quashed. Decided in favour of assessee.

Summary

Issues involved:
The judgment involves issues related to the assessment order passed u/s 153C/143(3) of the Income Tax Act 1961 for A.Y. 2017-18, specifically concerning an addition of Rs.50,00,000/- u/s 69 of the Act on account of alleged cash payment for purchase of property.

Grounds of Appeal:
The appellant challenged the order passed by the CIT (A) on the grounds that it was against the law and facts of the case. They argued that the AO erred in framing the assessment order u/s 153C r.w.s. 143(3) without complying with mandatory conditions. Additionally, they contended that the AO made an incorrect addition of Rs.50,00,000/- u/s 69 without considering the actual facts and submissions made by the assessee.

Facts of the Case:
The assessment was completed u/s 153C with an addition of Rs.50 lac for cash payment related to the purchase of property. The assessee claimed the entire transaction amount was paid through HDFC Bank, but the assessment was completed with the addition amount. The written submission by the assessee detailed the payments made through the bank account and disputed the alleged cash payment.

Contentions During Hearing:
The assessee presented evidence of payments made through the bank account and highlighted discrepancies in the alleged agreement found during the search. They argued that the entire amount was paid through banking channels and provided supporting documents to substantiate their claim. The appellant's submissions were not contradicted by the revenue department.

Decision and Rationale:
After considering the submissions and documents presented, the Tribunal found that the addition of Rs.50 lac was unjustified as the entire amount was shown to be paid through banking channels. The Tribunal noted that the appellant had provided evidence to support their claims, which were not refuted by the revenue department. Consequently, the appeal was allowed, and the addition amount was quashed.

Conclusion:
The Appellate Tribunal ITAT Amritsar ruled in favor of the assessee, allowing the appeal against the addition of Rs.50,00,000/- made by the AO u/s 69 of the Income Tax Act for alleged cash payment for property purchase. The Tribunal found that the appellant had adequately demonstrated that the entire transaction amount was paid through banking channels, leading to the quashing of the addition.