2021 (9) TMI 332 - AT - Income Tax

Tribunal rules for assessee, deletes unaccounted investment based on registered sale deed

The Tribunal allowed the appeal, ruling in favor of the assessee, and ordered the deletion of the addition of Rs. 38,00,000 as unaccounted investment in ... Unaccounted investment in land - Investment from undisclosed sources - Purchase of land in joint name - acceptance of registered sale deed over the Agreement - HELD THAT:- Agreement though mentions names of 15 persons as sellers but is actually signed by only one person. Similarly, it records 2 persons as buyers but has been signed only by one buyer. Further, this is not a registered document. Thus, on one hand, there is the Agreement which is partly signed by the parties and whose contents have not been verified by the AO and on the other there is a registered sale deed duly signed by all the buyers as well as sellers indicating the sale consideration of ₹ 45.00 lakh. Factor which weighs in accepting the registered sale deed over the Agreement is that the stamp value of the plot of land purchased by the assessee, as recorded in the impugned order, is ₹ 12.09 lakh, which is far away from the value given in the Agreement. - there are two buyers of the plot of land viz., the assessee and Mr. Nitin Navandar. The ld. DR was directed to give the status of the assessment in the case of Mr. Nitin Navandar for ascertaining if similar addition was made in his hands as well. On the next date of hearing, the ld. DR submitted that no addition has been made in the hands of Mr. Nitin Navandar. The registered sale deed needs to be acted upon in preference to the Agreement dated 17-06-2010. We are, therefore, satisfied that the plot was purchased for ₹ 45.00 lakh as given under the registered sale deed. Thus, no addition made in the hands of the assessee is called for. We, therefore, order to delete the same. - Decided in favour of assessee. Issues:Confirmation of addition of unaccounted investment in land.Analysis:The appeal was against the confirmation of the addition of Rs. 38,00,000 as unaccounted investment in land. The assessee, a civil contractor involved in the sale and purchase of plots, had purchased land jointly with another individual. The Assessing Officer (AO) initiated re-assessment proceedings based on discrepancies in the purchase price. The AO concluded that the transaction was actually finalized for a higher amount than recorded, resulting in unexplained investment. The CIT(A) upheld the assessment order, leading to the appeal before the Tribunal.The key issue was to determine the authenticity of two documents: an agreement dated 17-06-2010 showing a higher sale price and a registered sale deed dated 02-08-2010 recording a lower purchase price. The Tribunal had to decide which document should be relied upon for the assessment.The Tribunal examined the agreement and the sale deed. The agreement, signed by only one seller and one buyer, was not registered and had discrepancies. In contrast, the registered sale deed, signed by all parties, showed the purchase price as per the assessee's claim. The stamp value of the land in the sale deed also differed significantly from the agreement. Additionally, no similar addition was made in the co-buyer's assessment. Considering these factors, the Tribunal concluded that the registered sale deed was genuine and should be accepted over the agreement. Therefore, the addition of Rs. 38,00,000 as unaccounted investment was deemed unnecessary and ordered to be deleted.In conclusion, the Tribunal allowed the appeal, emphasizing the importance of relying on authenticated and registered documents in determining the actual transaction value. The decision highlighted the significance of proper documentation and verification in assessing unaccounted investments in land.