2017 (5) TMI 1053 - HC - Income Tax

Addition u/s 69C - Held that - As has been noted by the CIT(A) in the order dated 11th February 2013 there was an unsigned note which was recovered neither from the office of the M/s. AMR Infrastructure Ltd. which had accepted the application of the Assessee for the booking of space or the office of the Assessee. The CIT(A) has referred to the two Memorandum of Understanding (MoUs) entered into between the Assessee and M/s. AMR Infrastructure Ltd. with regard to the two areas i.e. plot of 5000 sq. ft. and another of 1000 sq. ft. both being booked @ 1, 500 sq. ft. through the documents placed before the CIT(A) which were also before the AO the Assessee was able to demonstrate that it had not paid any sum over and above what was reflected therein. Consequently there was no occasion to make any addition under Section 69 C of the Act. - Decided in favour of assessee.

Summary

Issues:
1. Denial of opportunity to the Assessing Officer to respond to documents produced by the Assessee.
2. Shifting burden of proof under Section 69 C on the Revenue by the ITAT.

Issue 1: Denial of Opportunity to the Assessing Officer:
The appeal pertained to the denial of an opportunity to the Assessing Officer (AO) to respond to documents produced by the Assessee before the Commissioner of Income Tax (Appeal) [CIT(A)]. The Revenue argued that the CIT(A) denied the AO the chance to respond to the documents for the first time, alleging a violation of Rule 46 A of the Income Tax Rules, 1964. However, it was highlighted that the documents presented before the CIT(A) were already on record before the AO. The order of the CIT(A) did not mention any application filed by the Assessee for introducing new documents not previously before the AO. Ultimately, the Court found no substantial question of law arising from the issue, leading to the dismissal of the appeal.

Issue 2: Shifting Burden of Proof under Section 69 C:
Another issue raised was the allegation that the ITAT had shifted the burden of proof under Section 69 C onto the Revenue, contrary to the requirement for the Assessee to provide a satisfactory explanation. The Revenue contended that the Assessee needed to explain the non-inclusion of certain expenditure, supported by a note found in the office of Ms. Real Gain Estates Pvt. Ltd. However, the CIT(A) noted the absence of the note from the offices directly involved in the transactions. By referencing Memorandum of Understanding (MoUs) and documents already before the AO, the Assessee demonstrated that no additional payments were made beyond what was documented. Consequently, no addition under Section 69 C was deemed necessary. The Court upheld the findings of the CIT(A) and ITAT, leading to the dismissal of the appeal.

In conclusion, the judgment addressed the issues of denial of opportunity to the Assessing Officer and the burden of proof under Section 69 C. The Court found no substantial legal questions arising from the decisions of the lower authorities and dismissed the appeal accordingly.