2023 (1) TMI 897 - AT - Income Tax

Tribunal rules in favor of assessee, dismisses revenue's appeals, citing lack of evidence.

Anil Bala Goyal, Maanya Goyal Versus Dy. Commissioner of Income-Tax, Central Circle, Ghaziabad And Yugank Goyal Versus Dy. Commissioner of Income-Tax, Central Circle, Ghaziabad And (Vice-Versa) And Bankey Behari Goyal Versus Dy. Commissioner of Income- Tax, Central Circle, Ghaziabad And (Vice-Versa)

The Tribunal allowed the assessee's appeals and deleted the additions based on alleged on-money payments and unexplained investments due to lack of ... Addition of payment of on money for Purchase of Shop - Difference in consideration shown by the assessee and accepted by the Stamp Valuation Officer and DVO report - HELD THAT:- Actual sale of value shown by the three co-purchasers including the assessee was at Rs. 1,99,20,000/- whereas the Departmental Valuation Officer report vide dated 24.04.2018, valuated the market value of the property at Rs. 2,08,22,000/- and there was a difference of Rs. 9.02 lakh which was picked up by the Ld. CIT(A) for making for restricted the addition made by the A.O. As per third proviso to section 50C of the Act, where the value adopted or assessed or assessable by the stamp valuation authority does not exceed 10% of the consideration received the consideration so received of accruing as a result of transfer shall for the purpose of section 48 deemed to be value of consideration. Even as per order of Joseph Mudaliar [2021 (9) TMI 701 - ITAT MUMBAI] as relied by the Ld.AR, third provision of section 50C of the Act the difference less than 10% from the consideration shown by the assessee and accepted by the Stamp Valuation Officer and DVO report has to be ignored and no addition is called in the situation. In the present case the amount of Rs. 9.02 lakh is less than 5% of total sale consideration of Rs. 1,99,20,000/- shown by the assessee. Therefore, no further addition is required to be made in the hands of the assessee u/s. 69B or any other provision of the Act. Accordingly ground no. 1 of the revenue is dismissed. Unexplained cash deposits in the saving bank account - CIT-A deleted the addition - HELD THAT:- It is pertinent to mentioned that the assessee has declared an income of Rs. 41,55,470/- for A.Y. 2015-16 and the impugned amount is only Rs. 9 lakh which is also less than the cash balance available in the proprietary firm of the assessee. Therefore the Ld. CIT(A) was right in deleting the addition of Rs. 9 lakh made by the A.O. u/s. 69A of the Act. Finally we are unable to see any valid reason to interfere with the findings arrived by the Ld. CIT(A), therefore we confirm the same. Resultantly ground no 2 of revenue is also dismissed. Difference of “On Money” paid in cash at the rate of 60% of the shop, for allotment of shops - Addition based on documentary evidence found and seized from the premises of the assessee - HELD THAT:- Cash payment pertaining to shop no GF 289 be deleted by observing that no mention of shop no. GF 289 found has been found in the seized material in respect of cash payment by the assessee to the builder. Addition u/s 69A - on money for Purchase of unit - Payment in cash out of books of accounts from the income earned from undisclosed sources - HELD THAT:- In the case of Saamag Developers (P.) Ltd. [2018 (1) TMI 1596 - ITAT DELHI] held that when the Assessing Officer has not made any independent enquiry from such persons and in the absence thereof no addition can be made. Especially when the Assessing Officer did not bring any adverse material on record or gave a finding with cogent evidence contrary to the explanation of the assessee and has not brought any independent corroborative material suggesting that the assessee has purchased such land/property and has made payment as recorded in the seize paper. In the present case AO has made addition merely on the basis of so called agreement which has not been signed by the assessee and the A.O. has not brought on record any other positive or corroborative material to show that the assessee has actually purchased property under this agreement and made payment of Rs. 54,00,000/- in cash out of books of accounts from the income earned from undisclosed sources. Therefore, we reach to a logical conclusion that the addition made by the A.O. and confirmed by the Ld. CIT(A) u/s. 69A of the Act, is not sustainable hence we direct the A.O. to delete the same. Issues Involved:1. Addition of Rs. 1,50,23,692 on account of alleged payment of on-money for the purchase of Shop No. 387.2. Levy of tax under section 115BBE.3. Addition of Rs. 9,02,000 based on the difference in property valuation by DVO and the registered purchase deed.4. Deletion of addition of Rs. 2,01,89,000 based on the difference between the sale agreement and final sale deed.5. Deletion of addition of Rs. 9,00,000 on account of unexplained cash deposits.6. Addition of Rs. 1,05,96,000 based on circumstantial evidence of 'on-money' paid for shop GF-289.7. Addition of Rs. 54,00,000 for alleged payment of on-money for units No. 805 and 806.Issue-wise Detailed Analysis:1. Addition of Rs. 1,50,23,692 on account of alleged payment of on-money for the purchase of Shop No. 387:The Tribunal noted that the addition was based on so-called incriminating material (LP-70 & 71) found at the assessee's premises. The Tribunal observed that there was no corroborative evidence, no cross-examination of the assessee's statement, and no evidence that the fair market value was higher than that recorded in the sale deed. The Tribunal held that any addition based on the presumption that figures written on a loose sheet of paper represent the fair market value of the property would not be justified, following the judgment of the Supreme Court in CBI vs. V.C. Shukla (1998) 3 SCC 410. Consequently, the Tribunal allowed the assessee's appeal and deleted the addition.2. Levy of tax under section 115BBE:Given that the Tribunal deleted the base addition under section 69A, the consequential levy of tax under section 115BBE was also rendered moot and not adjudicated upon.3. Addition of Rs. 9,02,000 based on the difference in property valuation by DVO and the registered purchase deed:The Tribunal noted that the difference between the actual purchase price and the DVO's valuation was less than 5%, which should be ignored as per the provisions of the Act. The Tribunal upheld the CIT(A)'s decision to restrict the addition to Rs. 9.02 lakh and found no reason to interfere with this finding. The Tribunal allowed the assessee's appeal on this ground.4. Deletion of addition of Rs. 2,01,89,000 based on the difference between the sale agreement and final sale deed:The Tribunal observed that the CIT(A) had rightly considered the valuation report called by the Directorate of Investigation Wing, which valued the property at Rs. 2,08,22,000. The Tribunal agreed with the CIT(A) that the addition made by the AO was not sustainable, as the basis of the addition was a cancelled agreement that was never acted upon. The Tribunal dismissed the revenue's appeal on this ground.5. Deletion of addition of Rs. 9,00,000 on account of unexplained cash deposits:The Tribunal noted that the CIT(A) had properly considered the cash books and the available cash balance in the assessee's proprietorship firm. The Tribunal found that the AO had not identified any deficiency in the books of accounts and accepted the same. Therefore, the Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 9 lakh and dismissed the revenue's appeal on this ground.6. Addition of Rs. 1,05,96,000 based on circumstantial evidence of 'on-money' paid for shop GF-289:The Tribunal observed that the CIT(A) had rightly deleted the addition, noting that there was no evidence of cash payments found in the seized material pertaining to shop no. GF-289. The Tribunal found that the AO had drawn parallels without justification and that no mention of cash payment was found in the seized material. The Tribunal dismissed the revenue's appeal on this ground.7. Addition of Rs. 54,00,000 for alleged payment of on-money for units No. 805 and 806:The Tribunal noted that the alleged agreement was not signed by the assessee and that the AO had not brought any corroborative evidence to show that the assessee had made the payment. The Tribunal found that the addition was based on hypothetical grounds and not supported by any adverse or positive material. The Tribunal allowed the assessee's appeal and directed the AO to delete the addition.Conclusion:The Tribunal allowed the appeals of the assessee regarding the additions based on alleged on-money payments and unexplained investments, finding that the additions were not supported by corroborative evidence. The Tribunal dismissed the revenue's appeals, upholding the CIT(A)'s decisions to delete the additions based on the difference in property valuation and unexplained cash deposits.