2013 (11) TMI 805 - AT - Income Tax

Unaccounted investment in purchase of property Held that - The assessee had purchased a property - As per the seized diary the actual consideration received by assessee was recorded at ₹ 165 lakhs as against the consideration of ₹ 65 lakhs in the registered sale deed Following CIT v. P.V. Kalyanasundaram 2007 (9) TMI 25 - SUPREME COURT OF INDIA - The burden of proving the actual consideration in the purchase of property is on the Revenue - The assessment made should have enough material and it should stand on its own legs - The basis for addition cannot be only the loose sheet or a third party statement. In the absence of corroborative material - The Revenue has failed to discharge its duty The Department has not brought on record the date on which the payment was made and the source from which it is paid and/or any details of bank account from where the cash was withdrawn - The authorities made up a case on surmises and conjectures which cannot be allowed Decided in favour of assessee. Amount received from father Held that - Following CIT v. P. Mohanakala 2007 (5) TMI 192 - SUPREME Court - Where there is a relation between the donor and the donee and there was an occasion to make gift, the same has to be considered as genuine - The donor was assessee s father and the gift was given to settle the life of his daughter, the assessee and the donor being a father, it is natural in the Indian social system to give gift to daughters Decided in favour of assessee. Loan from father s friend Held that - The assessee could not furnish any confirmation letter except furnishing of a self-declaration - The assessee also stated that she does not know lender personally - The credit cannot be considered as genuine and the same has to considered as income of the assessee - The assessee has not proved the genuineness of this amount Decided against assessee.

Issues Involved:
1. Addition of Rs. 1 crore on account of unaccounted investment in the purchase of property.
2. Addition of Rs. 5 lakhs received from the assessee's father.
3. Addition of Rs. 5 lakhs loan obtained from S. Sudha Rani.
4. Validity of notice issued under s. 153A.

Issue-wise Detailed Analysis:

1. Addition of Rs. 1 crore on account of unaccounted investment in the purchase of property:
The primary issue in this appeal concerns the addition of Rs. 1 crore attributed to unaccounted investment in the purchase of a property. The facts reveal that during a search action at the premises of Shri C. Radha Krishna Kumar, a diary was seized which indicated that the actual consideration for the property was Rs. 165 lakhs, whereas the registered sale deed showed Rs. 65 lakhs. The Assessing Officer (AO) concluded that there was an 'on-money' payment of Rs. 1 crore. The assessee denied knowledge of the cash payments, stating the transaction was managed by her brothers. The AO relied on the seized diary and statements from the seller and the assessee's brother to justify the addition.

Upon appeal, the CIT(A) upheld the AO's decision. However, the Tribunal found that the evidence, including the seized diary and statements, was insufficient to conclusively prove the payment of Rs. 1 crore as 'on-money.' The Tribunal emphasized that the seized material did not contain any direct reference to the assessee and lacked corroborative evidence. The Tribunal concluded that the addition was based on conjectures and surmises, and hence, deleted the addition of Rs. 1 crore.

2. Addition of Rs. 5 lakhs received from the assessee's father:
The second issue pertains to the addition of Rs. 5 lakhs received from the assessee's father, which the AO treated as not genuine. The assessee argued that the gift was given out of natural love and affection. The Tribunal noted that the Department did not dispute the relationship between the donor and the donee or the occasion for the gift. Citing the Supreme Court judgment in CIT v. P. Mohanakala, the Tribunal held that the gift was genuine and deleted the addition of Rs. 5 lakhs.

3. Addition of Rs. 5 lakhs loan obtained from S. Sudha Rani:
The third issue involves the addition of Rs. 5 lakhs purportedly received as a loan from S. Sudha Rani. The assessee failed to provide a confirmation letter, and the AO treated the loan as unsubstantiated. The Tribunal upheld the AO's decision, stating that the assessee could not prove the genuineness of the loan. Consequently, the addition of Rs. 5 lakhs was sustained.

4. Validity of notice issued under s. 153A:
The final issue concerns the validity of the notice issued under s. 153A. The assessee argued that the notice was invalid as there was no search action under s. 132 against her, and at best, a notice under s. 153C should have been issued. However, the Tribunal noted that the assessee did not press this ground during the hearing and that under s. 292BB, the assessee could not raise objections after cooperating during the assessment. Therefore, this ground was dismissed.

Conclusion:
The Tribunal partly allowed the appeal, deleting the addition of Rs. 1 crore and Rs. 5 lakhs received from the assessee's father, while sustaining the addition of Rs. 5 lakhs loan from S. Sudha Rani and dismissing the ground regarding the validity of the notice under s. 153A.

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