2021 (12) TMI 829 - HC - Income Tax

Addition based on documents found in search - Onus to prove - Whether the Respondent had failed to discharge its onus to prove the genuineness of the sale transaction with regard to the shop in the Cross River Mal? - HELD THAT - This Court finds that the name of the assessee nowhere appears in the computer generated loose sheets found from the residence of Mr.Lalit Modi, the alleged broker. ITAT in its impugned order has concluded that there was no corroborative evidence or statement to prove that the payment had been received by the assessee other than cheque amount as entered in the sale agreement. The Tribunal had observed that on the bare perusal of the seized document it cannot be inferred or concluded that seized document belongs to or has any nexus with the assessee. Tribunal/ITAT has given cogent reasons for arriving at its decision.

Summary

Issues:
Challenge to ITAT order on genuineness of sale transaction and seized material, reliance on previous court decision, jurisdictional benchmark under Section 153C, corroborative evidence of payment, cogency of ITAT decision, dismissal of appeal by Supreme Court.

Analysis:

1. The appeal challenges the ITAT order dated 28th February, 2020, in ITA 2738/DEL/2016, concerning the genuineness of a sale transaction related to a shop in the Cross River Mall.

2. The Appellant argues that the ITAT did not provide independent reasoning to deviate from the findings in the assessment order regarding the Respondent's failure to prove the transaction's genuineness. The Appellant highlights discrepancies in the seized material, emphasizing matching details of cheque amounts and square footage.

3. The Appellant further contends that the ITAT erred in relying on a previous court decision without appreciating the factual distinctions. Specifically, the Appellant argues that the assessing officer had jurisdiction over the Respondent and had satisfied that the seized material belonged to the Respondent.

4. The Court notes that the name of the assessee does not appear in the computer-generated loose sheets found at the alleged broker's residence, raising doubts about the connection to the transaction.

5. The ITAT's order lacked corroborative evidence or statements confirming payment receipt by the assessee, leading to the conclusion that the seized document did not establish a nexus with the assessee.

6. The Court acknowledges the cogency of the ITAT's reasons for its decision, emphasizing the importance of supporting evidence in such cases.

7. Referring to a previous case involving similar issues, the Court highlights the dismissal of the Revenue's appeal on jurisdictional and merits grounds, further reinforcing the validity of the ITAT's decision.

8. The Supreme Court's dismissal of a Special Leave Petition against the aforementioned judgment adds weight to the conclusion that no substantial question of law necessitates consideration in the present appeal.

9. Consequently, the Court dismisses the appeal, affirming the ITAT's decision and reinforcing the importance of jurisdictional benchmarks and corroborative evidence in tax matters.