2005 (3) TMI 386 - AT - Income Tax

Summary

Issues:
Appeal against deletion of addition for unexplained investment in the purchase of a plot.

Analysis:
The appeal before the Appellate Tribunal ITAT Amritsar concerned the deletion of an addition of Rs. 48,000 made by the AO on account of unexplained investment in the purchase of a plot in Jalandhar. The AO treated the investment as unexplained despite the disclosure in the statement under s. 132(4) of the IT Act and the explanation provided through a cash flow statement. The CIT(A) initially found infirmity in the cash flow statement but later concluded that the source of investment was explained based on entries in seized documents. The CIT(A) noted entries showing cash collection from the sale of land and subsequent payment for the plot purchase. The CIT(A) found the source of the plot purchase explainable and deleted the addition of Rs. 48,000. The Tribunal upheld the CIT(A)'s decision, stating that the source of investment was adequately explained based on the seized documents, and no infirmity was found in the CIT(A)'s order.

The Tribunal noted that the Departmental Representative failed to identify any material or seized document showing infirmity in the CIT(A)'s decision. The Tribunal emphasized that the CIT(A) was satisfied with the explanation provided based on the seized documents, leading to the deletion of the addition. Consequently, the Tribunal dismissed the appeal of the Revenue, affirming the CIT(A)'s decision to delete the addition of Rs. 48,000.

A Cross Objection (CO) filed by the assessee in support of the CIT(A)'s order was also dismissed in line with the findings of the Tribunal. Ultimately, both the Departmental appeal and the CO of the assessee were dismissed, upholding the decision to delete the addition for unexplained investment in the plot purchase.

In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition, emphasizing the satisfactory explanation provided through seized documents and the absence of any identified infirmity in the CIT(A)'s order. The appeal and cross-objection were both dismissed, confirming the deletion of the addition for unexplained investment in the plot purchase.