Tribunal confirms income from share transfer, deletes undisclosed sources, and sales income. Appeals dismissed.

The Tribunal confirmed the addition of Rs. 2,04,00,000/- each as income from a terminated share transfer deal, upheld the deletion of Rs. 9,20,00,000/- (correct amount Rs. 7,16,00,000/-) as income from undisclosed sources, and upheld the deletion of Rs. 1,48,51,840/- as income from undisclosed sales in the case involving Mahesh Mehta and Kusum Mehta. The Tribunal dismissed all appeals, finding the CIT (A)'s decisions legally sound and without error.

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Issues Involved:
1. Confirmation of addition of Rs. 2,04,00,000/- as income from the terminated deal of transfer of shares.
2. Deletion of addition of Rs. 9,20,00,000/- (correct amount Rs. 7,16,00,000/-) as income from undisclosed sources.
3. Deletion of addition of Rs. 1,48,51,840/- as income from undisclosed sales.

Issue-wise Detailed Analysis:

1. Confirmation of Addition of Rs. 2,04,00,000/-:

The appellants, Mahesh Mehta and Kusum Mehta, disputed the confirmation of an addition of Rs. 2,04,00,000/- each as income allegedly earned from a terminated deal of transfer of shares of M/s. Raj Refuellers & Fire Safety Equipments Pvt. Ltd. (RRFSL). The Assessing Officer (AO) based this on a draft agreement dated 22.02.2008 found during a search and seizure operation, which indicated a sale consideration of Rs. 25,00,00,000/- for property Plot No.115, Udyog Vihar, Gurgaon. The AO observed that Rs. 18,50,01,100/- was received by the sellers, Mahesh Mehta and Kusum Mehta, but the deal was not completed due to objections from HSIIDC. The AO treated the remaining amount as income from undisclosed sources. The CIT (A) confirmed the addition of Rs. 2,04,00,000/- each, considering the profit from the transaction, despite the appellants' claim that the draft agreement was never acted upon. The Tribunal upheld the CIT (A)'s decision, stating that the draft agreement was not a dumb document and the profit was rightly assessed.

2. Deletion of Addition of Rs. 9,20,00,000/- (Correct Amount Rs. 7,16,00,000/-):

The Revenue challenged the deletion of an addition of Rs. 9,20,00,000/- (correct amount Rs. 7,16,00,000/-) each in the hands of Mahesh Mehta and Kusum Mehta. The AO made this addition based on the statement of Mahesh Mehta recorded under section 132(4) of the Income-tax Act, which indicated receipt of Rs. 18,40,00,000/- from the sale of shares. The CIT (A) deleted this addition, noting that the transaction was not completed through the appellants, as the shares were transferred directly from the original owners, the Gargs, to the Aroras. The CIT (A) found that the appellants received only Rs. 9,26,00,000/- and paid Rs. 5,18,00,000/- to the Gargs, resulting in a profit of Rs. 4,08,00,000/-. The Tribunal upheld the CIT (A)'s findings, stating that the addition was based on presumption without concrete evidence and that the appellants had refunded the amount except Rs. 4,08,00,000/-.

3. Deletion of Addition of Rs. 1,48,51,840/-:

The AO added Rs. 1,48,51,840/- as income from undisclosed sales of Katha, a forest product, alleging that the stock was not recorded in the books. The appellant, Mahesh Mehta, claimed that the stock was spoiled due to heavy rains and was ordered to be destroyed by the Forest Department. The CIT (A) deleted the addition, verifying the stock details and the Forest Department's report, which confirmed the stock's destruction. The Tribunal upheld the CIT (A)'s decision, noting that the stock was physically verified and declared of nil value by the Forest Department, and the addition was not legally sustainable.

Conclusion:

The Tribunal dismissed the appeals filed by Mahesh Mehta and Kusum Mehta, as well as the Revenue's appeals, finding no illegality or perversity in the CIT (A)'s findings. The Tribunal confirmed the addition of Rs. 2,04,00,000/- each as income from the terminated deal of transfer of shares, upheld the deletion of the addition of Rs. 9,20,00,000/- (correct amount Rs. 7,16,00,000/-) each as income from undisclosed sources, and upheld the deletion of the addition of Rs. 1,48,51,840/- as income from undisclosed sales.

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