2012 (11) TMI 1262 - HC - Income Tax

High Court upholds Commissioner's decision, dismisses appeal lacking merit. Payment for land purchase deemed legitimate.

Commissioner of Income-tax –I Versus Magnificent Construction (P.) Ltd.

The High Court dismissed the appeal as it lacked merit, upholding the decision of the Commissioner of Income-tax (Appeal) and the Tribunal. The court ... - Issues involved: The issues involved in this case are related to the addition made by the Assessing Officer under Section 40-A (3) of the Income-tax Act, 1961, regarding the payment made for the purchase of land in an open auction held by the High Court of Judicature at Bombay.Facts:The respondent - assessee purchased a land for Rs. 3.5 crores in an open auction held by the High Court of Judicature at Bombay. The Assessing Officer made an addition of Rs. 70,00,000/- being 20% of the total payment of Rs. 3.5 crores, alleging that the payment was made in cash due to lack of details in the conveyance deed and absence of relevant bank account information.Decision:The Commissioner of Income-tax (Appeal) allowed the appeal of the assessee and deleted the disallowance made under Section 40-A (3) of the Act. The CIT (Appeal) considered that the entire payment of Rs. 3.5 crores was made through Pay Orders and Drafts from bank accounts of M/s. Zoom Developers Private Limited on behalf of the assessee. The Tribunal affirmed this view, stating that the payment was made through different bank accounts and the land was purchased through an open auction by the High Court of Bombay.Judgement:After considering the submissions and reviewing the orders passed by the Tribunal, the High Court found no substantial question of law involved in the matter. The Court concluded that the findings of the CIT (Appeal) and the Tribunal were factual and based on the available material. Therefore, the appeal was dismissed as it lacked merit.Separate Judgement:No separate judgement was delivered by the judges in this case.