2018 (3) TMI 726 - AT - Income Tax

Addition on account of undisclosed sources - unexplained investment - assessee had not paid the amount for purchase of property directly from her account and had not filed documentary evidence which can prove that the payment through transfer by her son was paid to the seller/related to the purchaser of the property under consideration - Held that - From the details as recorded by the AO that there was a cash withdrawal from the bank account of Shri Raj Kumar the son of the assessee of ₹ 45 lacs and also there is transfer entry of ₹ 83 lacs which was accepted by the AO in his order however, the AO has considered only the cash withdrawal as source available with the assessee for payment of consideration. CIT(A) noted that an amount of ₹ 83 lacs was paid through cheque No. 868041 dated 14.01.2009 which was also shown in the details as recorded by the AO. Therefore, when the purchase consideration to the extent of ₹ 83 lacs paid through cheque from the account of the son of the assessee then, the balance amount of ₹ 19,44,940/- was very much accepted by the AO as source from the cash withdrawal of ₹ 45 lacs. Accordingly, no merit and substance in the present appeal of the Revenue

Summary

Issues:
1. Addition of Rs. 57,44,940 on account of undisclosed sources.
2. Acceptance of seller's affidavit in contravention of Rule 46A of the I.T. Rules, 1961.

Issue 1: Addition of Rs. 57,44,940 on account of undisclosed sources
In this case, the Revenue appealed against the CIT (A)'s order deleting the addition of Rs. 57,44,940 made by the AO on the grounds of undisclosed sources related to the purchase of property. The assessee, along with her sister-in-law, purchased agricultural lands for a total consideration of Rs. 1,94,42,000. The AO issued a notice under section 148 as the transaction was not declared in the income tax return. The AO made the addition as unexplained investment after finding that only Rs. 45,00,000 was withdrawn from the son's bank account. However, the CIT (A) deleted the addition, noting that Rs. 83,00,000 was paid through a cheque from the son's account, which the AO had accepted as cash consideration up to Rs. 45 lacs. The Tribunal upheld the CIT (A)'s decision, emphasizing that the entire investment amount of Rs. 1,02,44,940 was explained, and no justification existed for the Rs. 57,44,940 addition.

Issue 2: Acceptance of seller's affidavit in contravention of Rule 46A of the I.T. Rules, 1961
The Revenue contended that the CIT (A) erred in accepting the seller's affidavit, contravening Rule 46A of the I.T. Rules, 1961, as it was not filed during the assessment proceedings. The assessee filed affidavits from the sellers and her son to explain the payment source. The CIT (A) considered these affidavits, along with the details submitted to the AO, and found that Rs. 83 lacs were paid through a cheque from the son's account. The Tribunal supported the CIT (A)'s decision, stating that the source of the entire investment amount was explained, leading to the deletion of the Rs. 57,44,940 addition. Therefore, the Tribunal dismissed the Revenue's appeal, upholding the CIT (A)'s order.

---