Appellate Tribunal Upholds Addition of Rs. 26,50,500 for Assessment Year 2006-07

The Appellate Tribunal upheld the CIT(A)'s decision to sustain an addition of Rs. 26,50,500 in relation to the assessment year 2006-07. The Tribunal found the restriction of the total surrender to Rs. 38 lakh justified based on evidence, and rejected the assessee's attempt to retract admissions regarding cash payments not recorded in books. Affidavits filed by the assessee were deemed lacking evidentiary value and contradictory to survey evidence. The Tribunal dismissed the appeal, affirming the addition of Rs. 26,50,500.

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Issues:
Sustenance of addition of Rs. 26,50,500 only.

Analysis:
The appeal before the Appellate Tribunal arose from an order passed by the CIT(A) related to the assessment year 2006-07. The only issue in the appeal was the sustenance of the addition of Rs. 26,50,500. The assessee, a property dealer in real estate business, had surrendered an additional income of Rs. 40 lakh during a survey action, based on impounded documents. However, in the return, the disclosed additional income was only Rs. 11,49,500. The Assessing Officer made an addition of Rs. 28,50,500, which was reduced to Rs. 26,50,500 by the CIT(A), leading to the appeal.

During the survey, documents were found indicating payments made by the assessee for property deals. The assessee explained the source of these payments, linking them to commissions earned on resale of plots. The CIT(A) restricted the total surrender to Rs. 38 lakh, as evidence was only for that amount. The Tribunal found this restriction justified and noted that the Revenue did not appeal against the deletion of the remaining Rs. 2 lakh addition.

Regarding the cash payments not recorded in the books, the assessee initially admitted to the surrenders but later tried to retract the admission. The Tribunal cited a High Court case where a similar retraction was not accepted due to delayed timing and contrary evidence. The Tribunal upheld the CIT(A)'s decision not to accept the retraction.

Affidavits filed by the assessee during the appeal process were deemed self-serving and lacking evidentiary value, as they contradicted the evidence found during the survey. Citing a High Court ruling, the Tribunal agreed with the CIT(A) in rejecting these affidavits. Ultimately, the Tribunal found no reason to overturn the order sustaining the addition of Rs. 26,50,500, and the appeal was dismissed.

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