2023 (11) TMI 866 - HC - Income Tax

Addition u/s 69 - cash paid by assessee for purchasing 50% of the 10% share held by deceased partner in a firm - addition was made based on two documents which were recovered in a search action carried out at the premises of the aforementioned partnership firm - Tribunal stated that the incriminating document which constituted a receipt in full discharge of the claim qua the subject property and the receipt for payment qua the very same property could not have been used against the respondent/assessee, i.e., the partner - Whether documents found at the business premises could not have been used against the respondent/assessee, i.e., the partner? - HELD THAT - Tribunal notes that as per the valuation report, the worth of the subject property was Rs. 2.10 crores as on 10.08.2011. Thus according to the Tribunal, it was incomprehensible as to why anyone would pay Rs. 12.75 crores in cash for a property which is worth Rs. 2.10 crores. Given the aforesaid position, apart from other legal aspects which have been touched upon by the Tribunal, we are of the view that no interference is called for. The factual circumstances which have been brought to the fore by the Tribunal do not persuade us to interfere with the order. As regards the other legal aspects which have been adverted to in the impugned order as to whether a document found at the business premises of the partnership firm could not be used against the partners is an aspect, that we need not touch upon in this case. No substantial question of law.

Summary

Issues Involved:
The delay in filing the appeal for condonation, the addition made under Section 69 of the Income Tax Act, 1961, concerning the cash payment for purchasing shares in a partnership firm, and the reliability of documentary evidence in the case.

Delay Condonation Application:
An application was filed seeking condonation of a 39-day delay in filing the appeal, which was allowed by the court based on the reasons provided in the application.

Appeal Concerning Addition Under Section 69:
The appeal pertains to the Assessment Year 2014-15 and challenges the order passed by the Income Tax Appellate Tribunal regarding the addition made by the Assessing Officer under Section 69 of the Income Tax Act. The dispute revolves around the cash payment made for purchasing shares in a partnership firm.

Reliability of Documentary Evidence:
The Tribunal reversed the Commissioner of Income Tax (Appeals) order based on documents recovered during a search at the partnership firm's premises. The Tribunal questioned the reliability of the documents, including an unsigned document detailing cash payments for acquiring shares in a property. The Tribunal highlighted discrepancies in the cash amounts paid compared to the property's valuation, raising doubts about the authenticity of the transactions.

Conclusion:
The court upheld the Tribunal's decision, emphasizing the factual discrepancies and lack of evidence supporting the cash payments. The court found no grounds to interfere with the Tribunal's order, as the circumstances presented did not warrant a reversal. Additionally, the court noted that no substantial question of law merited further consideration, leading to the closure of the appeal.