2019 (8) TMI 1403 - AT - Income Tax

Tribunal confirms additions under Income Tax Act for unaccounted cash in land deals

The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision to confirm additions under section 69B of the Income Tax Act for unaccounted cash ... Addition u/s. 69B - receipt of on-money - arguments of the assessee challenging the addition in the impugned assessment years are, that the document seized in search operation carried out the premise of Tapadia family does not bear the name or signatures of the assessee/appellant - HELD THAT:- The assessee had entered into transaction for purchase of land with Tapadias. The assessee made no effort either to obtain clarification from Ajay B Tapadiya regarding onmoney payments nor the assessee could ensure presence of Ajay B Tapadiya before the Assessing Officer to dispel that there was no involvement of on-money in the transaction. The assessee has failed to dislodge the allegation of on-money payments. The documents seized from the premises of Tapadias during search operation coupled with unrebutted statement of Ajay B Tapadiya explaining the entire transaction as recorded on seized document clearly indicates assessee‟s involvement in on-money payment for purchase of land. No infirmity in the order of Commissioner of Income Tax (Appeals) in confirming the addition with respect to on-money payment for purchase of land, in the hands of assessee. Accordingly, the impugned order is upheld - Decided against assessee. Issues:Appeals against orders of Commissioner of Income Tax (Appeals) for assessment years 2006-07 and 2010-11.Analysis:The appeals were filed by the assessee against the orders of Commissioner of Income Tax (Appeals) for assessment years 2006-07 and 2010-11. The appeals were taken up together as they involved identical issues arising from the same set of facts. The case originated from a search and seizure action under section 132 of the Income Tax Act, 1961. Incriminating documents revealed that the Tapadia family had received 'on-money' from the assessee in addition to the recorded consideration for the sale of land. The Assessing Officer made additions under section 69B of the Act for both assessment years based on the seized documents. The Commissioner of Income Tax (Appeals) dismissed the appeals, leading to the assessee approaching the Tribunal.The primary issue raised by the assessee was the addition made under section 69B of the Act for unaccounted cash expenditure. The assessee contended that there was insufficient evidence to substantiate the cash payments made over and above the recorded consideration. The assessee argued that the seized documents lacked crucial details, and the opportunity for cross-examination of a key witness was not adequately provided. The Department, on the other hand, defended the additions, citing admissions by the Tapadia family regarding the receipt of 'on-money' from the assessee. The Department highlighted that the Tapadias had offered the cash component received from the assessee for taxation.The Tribunal analyzed the arguments from both sides and found that the documents seized during the search operation clearly outlined the transaction and cash component received by the Tapadia family. Despite the absence of the assessee's name or signature on the seized documents, the Tribunal noted the comprehensive details provided. Regarding the opportunity for cross-examination, it was revealed that the Assessing Officer had summoned the key witness twice, but the witness did not appear. The Tribunal concluded that the assessee failed to disprove the allegations of on-money payments, as supported by the seized documents and the unrebutted statement of the key witness. Consequently, the Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision to confirm the additions for on-money payments, dismissing the appeals for lack of merit.In conclusion, the Tribunal upheld the orders of the Commissioner of Income Tax (Appeals) for both assessment years, affirming the additions made under section 69B of the Act. The appeals filed by the assessee were dismissed, emphasizing the involvement of on-money payments in the purchase of land from the Tapadia family.