2023 (8) TMI 641 - AT - Income Tax

Tribunal reinstates assessment order due to errors in granting relief, emphasizing importance of considering all evidence

ITO, Ward-32 (2), New Delhi Versus Sukhbir Singh Dagar

ITO, Ward-32 (2), New Delhi Versus Sukhbir Singh Dagar - TMI Issues involved:The issues involved in this legal judgment include the deletion of undisclosed long term capital gain by the Ld CIT(A), the appreciation of facts related to evidence found during a search operation, the application of yardsticks to different parties involved in a transaction, and the consideration of seized documents as evidence for computation of long term capital gains.Deletion of undisclosed long term capital gain:The revenue appealed against the Ld CIT(A)'s deletion of the addition made by the AO amounting to Rs. 5,17,11,467 on account of undisclosed long term capital gain for AY 2006-07. The revenue contended that the Ld CIT(A) erred in not appreciating the evidence found during a search operation by DRI, Mumbai, which indicated that a significant portion of the sale proceeds was in cash, not recorded in the sale deed. Additionally, the revenue argued that the Ld CIT(A) failed to consider that different parties were involved in the transaction, and the seized documents had evidentiary value showing cash transactions that should be considered part of the sale consideration for computing long term capital gains.Appreciation of facts and seized documents:The Ld CIT DR argued that the AO was correct in dismissing the assessee's claim of no relationship with certain parties involved in the transaction. The Investigation Wing provided evidence that the assessee had received a total sum of Rs. 5,46,23,012, out of which a significant amount was received in cash. The Ld CIT DR emphasized that the seized documents revealed cash transactions matching the amounts in registered sale deeds, supporting the addition of income from long term capital gain. The Ld AR, on the other hand, supported the Ld CIT(A)'s decision to recompute long term capital gain based on the sale consideration mentioned in the registered sale deed, highlighting the lack of evidence to substantiate unrecorded cash transactions.Judgment and decision:Upon careful consideration, the Tribunal noted that the property sold was a capital asset, and the AO was justified in initiating reassessment proceedings due to the undisclosed long term capital gain. The Tribunal found that the Ld CIT(A) erred in granting relief to the assessee without sufficient basis, ignoring vital evidence of cash payments in the transaction. Therefore, the Tribunal set aside the Ld CIT(A)'s order and restored the assessment order passed by the AO, allowing the revenue's appeal. The Tribunal emphasized the importance of considering all evidence, including seized documents, in calculating long term capital gains.Separate Judgement:No separate judgment was delivered by the judges in this case.