2024 (7) TMI 640 - AT - Income Tax

Addition u/s. 69A - cash received from the buyers of the flats - document taken from the accountant clearly depicts the details of cash receipts against flat numbers and name of the assessee - AO placed reliance on the statement taken from Sr. Accountant - case of the assessee is that it has made all payments by way of cheques only and the relevant details were furnished to the AO and purchase value of flats are also supported by the valuation report issued by a registered valuer and this report support the case of the assessee HELD THAT - In the case of Shri Anil Jaggi 2018 (2) TMI 51 - ITAT MUMBAI the co-ordinate bench examined the addition made in the hands of buyer of flat on the basis of evidence seized from the builder during the course of search operations conducted u/s 132 of the Act - the addition could not have been made on the basis of recording done at the end of builder, when the purchase consideration matches with the market rates and further no other evidence corroborating those entries are found. In the case before the co-ordinate bench, the pen drive was found during the course of search operations conducted u/s 132(4) of the Act and further the builder has offered the alleged on-money receipts as its income. The coordinate bench has held that the action taken by the builder would not automatically support the presumption that the concerned assessee has paid on money. In the instant case, the facts are not in better footing at all on account of following reasons - (a) The impugned document was found during the course of survey operations. (b) The accountant and director has admitted the entries in the statement taken u/s 133A of the Act, which does not have any evidentiary value. (c) The dates mentioned in the document did not match with actual dates of allotment or registration. (d) As observed by the co-ordinate bench in the above said case, the entries made in the document falls short of certain material facts, viz. date and mode of receipt of on money‟, who had paid the money, to whom the money was paid, date of agreement etc. Thus, we are of the view that the impugned addition made by the AO is not sustainable in law. Accordingly, we set aside the order passed by CIT(A) on this issue and direct the AO to delete the above said addition. Appeal of the assessee is allowed.

Summary

Issues:
Validity of reopening of assessment, Addition of undisclosed income u/s. 69A of the Act.

Validity of Reopening of Assessment:
The appellant challenged the order dated 11/12/2023 passed by Ld CIT(A), NFAC, Delhi, relating to the assessment year 2013-14. The Ld.A.R did not press the grounds regarding the validity of reopening of assessment, leading to their dismissal. The remaining ground pertained to the addition of Rs. 1.61 crores made by the Assessing Officer u/s. 69A of the Act.

Addition of Undisclosed Income:
The Assessing Officer reopened the assessment based on information received during survey operations in the hands of a builder company. The documents seized indicated cash receipts of Rs. 1.61 crores against flat numbers purchased by the assessee. The Assessing Officer relied on statements from the company's Accountant and Director confirming the cash receipts. The assessee disputed the entries, stating the flats were allotted in 2011, payments were made by cheque, and registration occurred in 2016-17. The Assessing Officer, without further corroboration, assessed the amount as undisclosed income u/s. 69A. The Tribunal noted the lack of evidentiary value of the statements taken u/s. 133A and discrepancies in the document's entries. Referring to a similar case, the Tribunal emphasized the need for conclusive evidence and set aside the addition, directing its deletion.

Conclusion:
The Tribunal found the addition unsustainable due to lack of corroborative evidence and discrepancies in the document's entries. The order passed by Ld CIT(A) was set aside, and the AO was directed to delete the addition of Rs. 1.61 crores. As a result, the appeal of the assessee was allowed.