2003 (10) TMI 252 - AT - Income Tax

Summary

Issues involved:
Common issue of deletion of addition attributable to on-money component received on sale of flat.

Detailed Analysis:

1. Focal Year Selection:
The appeals by the Department for assessment years 1989-90 to 1994-95 involve a common issue of deletion of addition related to on-money component received on the sale of a flat. The authorized representative based arguments on the assessment year 1994-95, making it the focal year for the judgment.

2. Background and Seizure Operation:
The assessee-company engaged in constructing residential flats faced a search and seizure operation at the residential premises of one of its directors. During the search, a paper ('Chit') detailing sales of flats was seized. Subsequent inquiries and statements were recorded, leading to the Department questioning the cash components received from flat sales.

3. AO's Decision and CIT(A) Deletion:
The Assessing Officer (AO) made additions, which were later deleted by the Commissioner of Income Tax (Appeals) [CIT(A)]. The Department contended that the deletion overlooked crucial evidence such as seized papers and statements made during the search.

4. Contentions and Evidence:
The Department alleged that the addition was linked to on-money received on flat sales. The CIT(A) accepted retractions of statements, prompting the Department to challenge the coercion claim. However, the evidence did not conclusively prove on-money payments received by the assessee.

5. Judicial Review and Conclusion:
After reviewing voluminous evidence, including affidavits and valuation reports, the Tribunal found no substantial proof of on-money payments. The chit seized lacked specific details, and the retraction of statements was not effectively refuted by the Department. The Tribunal upheld the CIT(A)'s decision to delete the additions, dismissing the Department's appeals.

6. Final Decision:
The Tribunal dismissed the Department's appeals, emphasizing the lack of evidence supporting the alleged on-money payments. The judgment highlighted discrepancies in the Department's contentions and affirmed the CIT(A)'s deletion of the additions, concluding in favor of the assessee-company.