Tribunal overturns tax assessment, finds unexplained property investment unjustified. Appeal allowed, addition deleted.

The Tribunal, after reviewing the evidence, found that the addition of Rs. 5,75,000 for unexplained investment in immovable property was unjustified. The Tribunal noted that the land in question was actually sold to a third party, not to the assessee or his son as claimed. As the AO's addition was solely based on the surrender made during the survey and the actual sale deed contradicted this, the Tribunal ruled the addition unsustainable. Consequently, the appeal was allowed, and the Rs. 5,75,000 addition was deleted.

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Issues:
1. Addition of unexplained investment in immovable property.

Analysis:
The appeal before the Appellate Tribunal ITAT Jaipur was against the order of the ld. CIT (A), Alwar regarding the addition of Rs. 5,75,000 on account of unexplained investment in immovable property for the assessment year 2013-14. The assessee, engaged in trading of Fertilizers and pesticides, had a survey conducted at their business premises under section 133A of the I.T. Act. During the survey, an agreement to sale a plot of land was found, where the son of the assessee agreed to purchase the land for Rs. 6,75,000 with an advance payment of Rs. 1,00,000. The assessee surrendered Rs. 5,75,000 as undisclosed income during the survey. Subsequently, the assessee claimed that the agreement was canceled by the son, and the surrender was a mistake. The AO made an addition of Rs. 5,75,000 not declared in the return but surrendered during the survey. The assessee challenged this before the ld. CIT (A) but was unsuccessful.

Upon considering the submissions and evidence, the Tribunal noted that a sale deed dated 18.05.2012 showed the land was sold to a third party, not to the assessee or his son. Therefore, the question of the Rs. 5,75,000 investment did not arise. The AO's addition was solely based on the surrender made during the survey, despite the land being sold to a third party. As only Rs. 1,00,000 was paid as an advance according to the agreement, any addition beyond that was unwarranted. Since the assessee had already surrendered the advance amount, no further addition was justified. The Tribunal held that the addition made by the AO was unsustainable in law and thus deleted it.

In conclusion, the appeal of the assessee was allowed, and the addition of Rs. 5,75,000 on account of unexplained investment in immovable property was deleted. The order was pronounced in the open court on 24/07/2018.

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