2023 (9) TMI 1175 - HC - Income Tax

High Court overturns Tribunal decision, rules in favor of appellant for assessment year 2000-01. Burden of proof on revenue.

The High Court allowed the appellant's appeal, overturning the Tribunal's decision that upheld the addition of income to the appellant for the assessment ... Assessment u/s 153A - profit from the sale of the plot - additions in the hands of broker / commission agent - unexplained and undisclosed income of the appellant - No addition was made by the revenue in the hands of the vendor-Company or its Managing Director for receiving any unaccounted for cash amount of money in respect of the transaction of sale of Plot - HELD THAT:- Addition was made in the income of the buyer, but a perusal of orders passed by CIT (A) as well as by the Tribunal reveals that the said addition had been ordered to be deleted. No material had been placed on record by the revenue to show that the said deletion was on any technical ground and as to what was that technical ground. Revenue also failed to produce any material on record to show that any addition of income at all qua the same transaction had been made in the income of the vendor of Plot No. 42 who was obviously the main person who could have derived profits from the same. The burden of proving all this lied heavily on the revenue, but nothing could be brought on record to prove the allegation that there was concealment in the consideration amount as reflected in the sale deeds of the Plot No. 42 and, therefore, in our considered opinion, on the basis of these documents which are part of Annexure A-1 and are rather loose rough papers only, no reasonable conclusion could be drawn that any amount of money what to say had been received by the appellant. Also in the absence of any material forthcoming on record to show that any addition was made by the revenue in the hands of the vendor-Company or its Managing Director for receiving any unaccounted for cash amount of money in respect of the transaction of sale of Plot No. 42, in our opinion, the appellant who was only a broker could not be saddled with any addition of money - Decided against revenue. Issues involved:The appeal challenging the order passed by the Income Tax Appellate Tribunal was upheld by the Tribunal, leading to the dismissal of the appellant's appeal.Details of the Judgment:Issue 1: Background of the CaseA search and seizure operation was conducted at the appellant's premises, leading to the discovery of documents related to a real estate transaction. Notices were issued under various sections of the Income Tax Act, culminating in an addition of income to the appellant for the assessment year 2000-01.Issue 2: Appeal and DismissalThe appellant filed an appeal against the addition of income, which was dismissed by the Commissioner of Income Tax (Appeals). Subsequently, the appellant filed ITA No. 1609/Del/2011 before the Tribunal, which was also dismissed, prompting the current appeal.Issue 3: Appellant's ArgumentThe appellant argued that the Tribunal erred in assuming the appellant derived significant profit from a real estate transaction as a broker, emphasizing that he was neither the buyer nor the seller of the property. The appellant contended that the documents seized did not prove undisclosed income.Issue 4: Revenue's ArgumentThe revenue argued that the appellant, as a broker, earned a substantial profit from the transaction, as evidenced by documents seized during the search. The revenue contended that the addition made in the case of the buyer was deleted on technical grounds and urged the dismissal of the appeal.Issue 5: Court's Analysis and DecisionAfter considering the arguments of both parties, the Court found in favor of the appellant. It noted that the appellant was not the owner or buyer of the property in question and that no conclusive evidence was presented to prove undisclosed income. The Court highlighted the lack of proof regarding the alleged transaction of money and emphasized that the burden of proof lay with the revenue.Separate Judgment:The Court, comprising Hon'ble Ms. Justice Ritu Bahri and Hon'ble Mrs. Justice Manisha Batra, reversed the impugned order, setting aside the Tribunal's decision and allowing the appeal filed by the appellant.