2018 (7) TMI 1561 - HC - Income Tax

Addition made u/s 68 - ITAT was of opinion that on the date of the survey the title to the property of the assessee was itself under serious doubt - Held that - The entire issue is based on appreciation of evidence. The Tribunal having considered relevant aspects and having come to the conclusion that the Revenue has failed to bring on record sufficient evidence of cash amounts have been received by the assessee, no question of law arises.

Summary

Issues:
Challenge to deletion of addition made under section 68 of the Income Tax Act, 1961 for the assessment year 2011-12.

Analysis:
The issue in this case revolves around the deletion of an addition made under section 68 of the Income Tax Act, 1961 for the assessment year 2011-12. The respondent-assessee, a private limited company, had its business premises surveyed under section 133 of the Act, where a diary allegedly revealing cash transactions related to the sale of Vatva land was seized by the Revenue. The Assessing Officer made additions of undisclosed income under section 68 based on this material, which was confirmed by the Commissioner of Income Tax (Appeals). The assessee then approached the Tribunal challenging these additions.

The Tribunal, in its detailed order, noted that the directors of the company retracted their statements made during the survey, claiming the diaries were created under pressure. The Tribunal cited relevant Supreme Court decisions emphasizing that statements under section 133A of the Act do not have evidentiary value. It also highlighted that the property in question was under litigation at the time of the survey, casting doubt on the assessee's title to the land. Additionally, the absence of the purchaser's name in the diary and the lack of an executed agreement to sell raised doubts about the cash transactions mentioned. Considering these factors, the Tribunal deleted the additions made by the Assessing Officer.

The crux of the matter lies in the Tribunal's assessment of the evidence presented. The Tribunal concluded that the Revenue failed to provide sufficient evidence to prove that cash amounts were received by the assessee. As a result, the Tribunal found no legal question arising from its decision and dismissed the Tax Appeal. This case underscores the importance of thorough evaluation of evidence in tax matters and the significance of establishing a clear evidentiary trail to support income additions under the Income Tax Act, 1961.