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2024 (8) TMI 526 - AT - Income TaxUnexplained money u/s. 69A - addition was made on the basis of incriminating documents seized during the course of search proceedings in the form of notarized satakhat - CIT(A) deleted addition - HELD THAT - On perusal of contents of Satakhat, we find that it contains the photograph and signature of several sellers, however, the part of acknowledgement/receipt of payment is blank. Moreover, the said Satakhat is not signed by seven persons as seen on page No. 12 of assessment order. We also find that the AO has not made any independent investigation of fact, when the assessee right from the beginning was claiming that Satakhat was not materialized. The sellers were the best persons to strengthen the case of Assessing officer, who were not examined by Assessing Officer for the reasons best known to him. As in the case of CIT Vs Fairdeal Textile Park (P) Ltd. 2014 (5) TMI 226 - GUJARAT HIGH COURT held that no addition could be made only on the basis of agreement to sell, found during the search which was not at all implemented. In view of the aforesaid factual and legal discussion, we do not find any reason to interfere with the order of ld. CIT(A) which we affirm with our additional observation. In the result, grounds of appeal raised by the revenue are dismissed. Unaccounted investment u/s. 69B - additions were made on the basis of incriminating documents extracted from digital devices - CIT(A) deleted addition - HELD THAT - As in the search action no evidence of on money payment for purchase of impugned land was found. The assessee right from the beginning took his plea that the contents shown on the digital image found in the Pen drive was related with same land transaction which was never acted upon. Kedar Jagirdar was in fact not the owner nor having any relation with the original buyer. The father of assessee filed the settlement application before the Settlement Commission, Mumbai and offered 10% income of the figure mentioned on said Sauda Chithi which was accepted, copy of order of Settlement Commission was filed before the Assessing Officer as well as before the ld. CIT(A). We find that all such facts are not countered by the assessing officer as well as by ld CIT- DR while arguing his case. The seller of the land were the best person to through light on the entire transaction of the land, if the said land was in fact purchased by the assessee as a part of same Sauda Chitthi found during the search action in the pen drive or fresh deal was materialized between them and the assessee. The assessing officer had not taken any effort to examine them for the reasons best known to him. Thus, in absence of any corroborative evidence that any on money was paid by the assessee for purchase of land, we do not find any reason to interfere with the finding of ld CIT(A) which we affirm. In the result, all the grounds of appeal raised by the revenue are dismissed.
Issues Involved:
1. Deletion of addition of Rs. 4,12,50,000/- under Section 69A of the Income Tax Act for AY 2016-17. 2. Deletion of addition of Rs. 13,96,60,000/- under Section 69B of the Income Tax Act for AY 2020-21. Analysis of Judgment: Issue 1: Deletion of Addition of Rs. 4,12,50,000/- under Section 69A for AY 2016-17 Facts and Background: - A search and seizure action under Section 132 of the Income Tax Act was conducted on the Kuberji Group of Surat on 06/02/2020, covering the assessee. - During the search, a notarized Satakhat (agreement) was found at the residence of the assessee's father, indicating a land deal for Rs. 16.50 crores with a 25% payment of Rs. 4.12 crores in cash. - The Assessing Officer (AO) added Rs. 4.12 crores to the assessee's income, considering it as unexplained money under Section 69A. Assessee's Argument: - The Satakhat was incomplete as it was not signed by all co-owners, and the deal did not materialize. - The notary and the father of the assessee confirmed that no cash payment was made. - The land was still in the name of the original owners, and no corroborative evidence of cash payment was found during the search. CIT(A)'s Decision: - The CIT(A) deleted the addition, noting that the Satakhat was incomplete and not signed by all co-owners. - The land was still in the name of the original owners, and no evidence of cash payment was found. - The notary confirmed that no payment was made in his presence. Tribunal's Decision: - The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO did not examine the sellers or bring any corroborative evidence. - The Tribunal noted that the Satakhat was not signed by all co-owners, making it incomplete and not legally binding. - The Tribunal found no reason to interfere with the CIT(A)'s order, affirming the deletion of the addition. Issue 2: Deletion of Addition of Rs. 13,96,60,000/- under Section 69B for AY 2020-21 Facts and Background: - During the search on 06/02/2020, a Pen drive containing a digital image of a Sauda Chitthi (agreement) dated 03/07/2014 for land was found. - The AO noted that the land was sold to the assessee for Rs. 65 lacs in 2019, but the original Sauda Chitthi indicated a value of Rs. 14.61 crores. - The AO added Rs. 13.96 crores as unexplained investment under Section 69B. Assessee's Argument: - The Sauda Chitthi was related to a deal by the assessee's father, which was canceled due to title issues. - The father had disclosed the payment of Rs. 10.90 crores before the Settlement Commission, which was accepted. - The land was purchased from a different owner in 2019 for Rs. 65 lacs, as confirmed by the Deputy Collector, Stamp Duty Valuation. CIT(A)'s Decision: - The CIT(A) deleted the addition, noting that the original Sauda Chitthi was canceled and the land was purchased from a different owner. - The valuation of Rs. 65 lacs was accepted by the Deputy Collector, Stamp Duty Valuation. - There was no evidence of on-money payment found during the search. Tribunal's Decision: - The Tribunal upheld the CIT(A)'s decision, emphasizing that there was no evidence of on-money payment. - The Tribunal noted that the AO did not examine the sellers or bring any corroborative evidence. - The Tribunal found no reason to interfere with the CIT(A)'s order, affirming the deletion of the addition. Conclusion: The Tribunal dismissed both appeals filed by the revenue, upholding the CIT(A)'s decisions to delete the additions of Rs. 4,12,50,000/- for AY 2016-17 and Rs. 13,96,60,000/- for AY 2020-21. The Tribunal emphasized the lack of corroborative evidence and the failure of the AO to examine the relevant parties.
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