Legality of the addition made by the Assessing Officer (AO) ...

Taxman's unfair land value addition sans proper evidence scrutiny.

Case Laws     Income Tax

September 3, 2024

Legality of the addition made by the Assessing Officer (AO) regarding the gain on sale of agricultural land, based on the alleged understatement of consideration paid. The key points are: The AO failed to follow proper cross-examination procedures under the Evidence Act, relying solely on statements without allowing cross-examination. The Supreme Court has held that while the Evidence Act does not strictly apply to income tax proceedings, its principles can be applied. The registered sale deed carries a presumption of genuineness, and the AO did not rebut this with concrete evidence. The AO did not examine other relevant witnesses or consider circle rates or comparable land values. The AO also failed to refer the matter to the District Valuation Officer for value ascertainment. Based on these lapses, the addition made solely on unsubstantiated statements was unjustified, and the Tribunal allowed the assessee's appeal, deleting the addition.

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