2022 (1) TMI 962 - AT - Income Tax

Tax Tribunal upholds CIT(A)'s decision, dismisses departmental appeals for lack of evidence.

ACIT, 4 (1) Indore Versus M/s. Sharthak Real Built P. Ltd. Indore, Shri Ashwin Mehta Indore

ACIT, 4 (1) Indore Versus M/s. Sharthak Real Built P. Ltd. Indore, Shri Ashwin Mehta Indore - TMI Issues Involved:1. Justification of the Ld. CIT(A)'s decision in not appreciating the findings and establishment of the AO.2. Deletion of the addition of Rs. 2,43,12,100/- due to alleged non-enquiry by the AO, non-establishment of greater market value, and non-appreciation of the seller's statement.3. Non-reliance on the information and report received by the AO from the Investigation Wing.4. Delay in filing the appeals and its condonation due to the COVID-19 crisis.Issue-wise Detailed Analysis:1. Justification of the Ld. CIT(A)'s Decision:The Revenue argued that the Ld. CIT(A) did not appreciate the findings and establishment of the AO. The AO had made an addition of Rs. 2,43,12,000/- based on statements recorded from the joint seller, Shri Manohar Patel, who admitted to receiving cash payments from the assessee. However, the Ld. CIT(A) deleted the addition, stating that mere admission by the joint seller without tangible evidence could not justify the addition. The Ld. CIT(A) emphasized the need for concrete evidence to support the claim of 'on-money' payments, which was lacking in this case. The Tribunal upheld this view, stressing that the burden of proving actual consideration lies with the Revenue, and merely relying on statements without corroborative evidence is insufficient.2. Deletion of the Addition of Rs. 2,43,12,100/-:The AO's addition was based on the statement of the joint seller, which claimed that the assessee paid an additional Rs. 2,43,12,000/- in cash over the registered sale deed amount. The Ld. CIT(A) found that the AO did not conduct any independent inquiry or provide tangible evidence to substantiate the claim. The Tribunal noted that the purchase transaction was conducted at the registered value of Rs. 2,69,90,000/-, with all payments made through banking channels. The Tribunal also highlighted that the AO failed to establish that the market value of the land was higher than the registered value. Consequently, the Tribunal agreed with the Ld. CIT(A) that the addition was based on suspicion and conjecture rather than solid evidence.3. Non-reliance on Information from the Investigation Wing:The Revenue contended that the Ld. CIT(A) did not rely on the detailed inquiry and investigation report from the Investigation Wing. However, the Tribunal observed that the AO merely relied on the information provided by the Investigation Wing without conducting any independent verification or inquiry. The Tribunal emphasized that the AO should have conducted an independent inquiry to verify the claims, which was not done in this case. Therefore, the Tribunal found no merit in the Revenue's argument and upheld the Ld. CIT(A)'s decision.4. Delay in Filing the Appeals and Its Condonation:The appeals were delayed by 48 days, and the delay was attributed to the COVID-19 crisis. The Tribunal condoned the delay, considering the exceptional circumstances and the extension of due dates for filing appeals as per CBDT's notification. The Tribunal admitted the appeals for adjudication on merits, finding the reasons for the delay satisfactory.Conclusion:The Tribunal dismissed the departmental appeals, confirming the Ld. CIT(A)'s decision to delete the addition of Rs. 2,43,12,000/-. The Tribunal found that the AO's addition was based on mere statements without tangible evidence, and the burden of proving actual consideration was not discharged by the Revenue. The Tribunal also noted the lack of independent inquiry by the AO and the violation of principles of natural justice due to the denial of cross-examination. The appeals were dismissed, and the Ld. CIT(A)'s findings were upheld.