2019 (10) TMI 1130 - HC - Income Tax

Income Tax Tribunal affirms genuine payments to landowners via cheques, dismissing Revenue's challenge under Section 260(A)

Principal Commissioner of Income Tax-3 Versus Swadesh Villas Private Limited

The Court upheld the Income Tax Appellate Tribunal's decision, affirming that the additional payments made by the assessee to landowners were genuine as ... Revision u/s 263 - direction to the AO to verify whether the extra amounts paid by the assessee-company over and above the consideration recorded in the sale deeds to the land owners in respect of certain properties purchased by it are payments made towards purchase of lands or not and whether such extra amounts were received by the sellers - Tribunal was convinced that all payments were made to the land owners by the assessee by cheque and therefore the identity and genuineness of the transactions was proved - HELD THAT:- Revenue sought to contend that the finding of the Tribunal that the transactions made by the assessee were genuine, is perverse and illegal, and a case is made out for interference of this Court in exercise of its jurisdiction under Section 260(A) of the Income Tax Act, 1961, we are unable to accede to the said contentions for the reason that finding of the Tribunal recorded above is based on appreciation of evidence and after perusing the material placed before the Tribunal by the assessee. The finding of the Tribunal that payments were made by cheques by the assessee to the land owners and the identity and the genuineness of the transactions between the land owners and the assessee is proved, is a finding of fact based on appreciation of evidence and does not warrant any interference by this Court in exercise of its jurisdiction under Section 260A of the Act. Appeal is without merit and it is dismissed Issues:Challenge to order of Income Tax Appellate Tribunal regarding assessment year 2008-09.Analysis:The case involved a Company engaged in the purchase and sale of plots, with the initial income tax return processed under Section 143(3) of the Income Tax Act, 1961. The Commissioner of Income Tax(Appeals) later set aside the assessment order under Section 263 of the Act, directing the Assessing Officer to verify certain payments made by the assessee over and above the consideration recorded in sale deeds. This decision was upheld by the Income Tax Appellate Tribunal. Subsequently, the Assessing Officer passed a fresh assessment order, questioning the nature of the extra payments made by the assessee to landowners. The CIT(Appeals) confirmed this view. However, the ITAT, after reviewing the documents provided by the assessee, concluded that all payments were made to the landowners by cheque, establishing the genuineness of the transactions. The Tribunal accepted the assessee's claim that the additional payments were legitimate and should not have been added to the income.The Revenue challenged this decision, arguing that the Tribunal's findings were erroneous and warranted interference under Section 260(A) of the Income Tax Act, 1961. The Court, however, held that the Tribunal's conclusions were based on a thorough evaluation of the evidence presented and the material provided by the assessee. The Court emphasized that the Tribunal's determination that payments were made via cheques to the landowners, establishing the authenticity of the transactions, was a factual finding that did not justify intervention under Section 260A of the Act. Consequently, the Court dismissed the appeal, stating it lacked merit and did not award costs. Any pending miscellaneous petitions were also closed as a result of this judgment.