2017 (3) TMI 531 - AT - Income Tax

Unexplained investment in land - assessee now is claiming that it had only 1/3rd interest in the property intended to be purchased - Held that - In view of the overwhelming evidences that the appellant had entered into a deal to purchase this land and subsequent gone to get it registered; the eventual seller to her had registered it earlier as a purchaser; she was purported to be clearly 50% owner; no one can believe that she was entitled to such a benefit without spending a single rupee. We do not find any reason to deviate from the findings of the CIT. Hence, we would like to observe that once a registered statement is made before a Lawful authority it should normally be taken to be true. No one should be allowed to blow hot and cold in the same breathe to suit its personal interest before different authorities. Therefore, the addition confirmed by the Ld. CIT(A) of ₹ 25,50,000/- as undisclosed income, not reflected in the return of income is confirmed. - Decided against assessee

Summary

Issues:
Addition of unexplained investment in land

Analysis:
The appeal was against the order of the Commissioner of Income Tax (Appeals) confirming the addition of ?25,50,000 as unexplained investment in land for the Assessment Year 2009-10. The assessee had shown a total income of ?2,03,240, but the assessing officer added the amount of alleged unexplained investment in land. The assessing officer found that the assessee had purchased agricultural land for ?51,00,000 and asked for an explanation regarding the source of funds for the purchase. It was discovered that a sale deed was executed between the assessee and another party for ?51,00,000, with ?15,00,000 paid by cheque and ?36,00,000 in cash. However, further investigation revealed that the sale deed was forged, and the original landowners objected to the transaction. The original landowners later sold the land to different parties, leading to legal complications.

The Tribunal noted that the appellant claimed only 1/3rd interest in the property, contrary to the registered agreement where she would have legally become the owner of 50% of the property. The Tribunal found it implausible that the appellant would claim ownership without paying any amount, especially when written documents indicated otherwise. The Tribunal emphasized the importance of registered deeds as prime proof of title for immovable property. Despite the appellant's arguments, the Tribunal found overwhelming evidence that she had entered into a deal to purchase the land and that the seller had registered the transaction earlier. The Tribunal cited a judgment highlighting the importance of not allowing individuals to make contradictory statements to suit personal interests before different authorities. Consequently, the addition of ?25,50,000 as undisclosed income was confirmed, and the appeal was dismissed.

In conclusion, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) to add ?25,50,000 as undisclosed income due to the questionable nature of the land transaction and the discrepancies in the appellant's claims. The Tribunal emphasized the significance of registered deeds in determining ownership of immovable property and rejected the appellant's assertions of ownership without any financial contribution. The judgment serves as a caution against making contradictory statements to different authorities for personal gain.