Construction company, not individual, liable for payments to tenants. Tribunal ruling favors assessee.

The Tribunal allowed the assessee's appeal, ruling that the cash payments to tenants were made by the construction company, not the individual assessee. The Tribunal considered project details and ownership of transactions, leading to the deletion of the addition. The decision favored the assessee, emphasizing the distinction between the company and the individual in making the payments, pronounced on 29-10-2018.

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Issues:
Appeal against CIT(A)'s order restricting addition of cash payments to tenants made by AO.

Analysis:
The appeal arose from CIT(A)'s order limiting the addition of Rs. 69.55 lakhs out of total Rs. 88.50 lakhs made by the AO under cash payments to tenants. The assessee contended that no such addition was warranted, challenging CIT(A)'s decision. The AO, based on a seized document, added the unexplained cash payments under section 69C of the Income Tax Act, 1961. The CIT(A) restricted the addition to Rs. 69.55 lakhs paid to certain tenants, deleting the balance amount. The Tribunal heard arguments and examined the facts.

The assessee, a Director of a construction and trading company, faced a search operation leading to the AO's assessment under section 153A. The AO relied on a seized document showing cash payments to tenants. The CIT(A) restricted the addition to specific tenants, based on explanations provided. The Tribunal analyzed the seized document and the nature of payments made.

The Tribunal considered the front and back sides of the seized document, noting that the payments were related to a project undertaken by a group concern of the assessee, not by the individual. The Tribunal observed that the payments were made to tenants by the construction company, not the assessee personally. The Tribunal highlighted that sufficient evidence was provided for some payments, while clarification was lacking for others. The Tribunal concluded that the payments were made by the construction company for property vacation, not by the assessee, ultimately deleting the addition.

In conclusion, the Tribunal allowed the assessee's appeal, emphasizing that the payments were made by the construction company, not the individual assessee. The Tribunal considered the project details and ownership of transactions, leading to the deletion of the addition. The decision was pronounced in favor of the assessee on 29-10-2018.

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