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of <h1>Reassessment u/s 147 valid but Rs. 5.41 crores addition u/s 69 deleted for lack of corroborative evidence</h1> <h3>M/s. Maple Destinations and Dreambuild Pvt. Ltd. Versus Deputy Commissioner of Income Tax, Circle -16 (1), New Delhi</h3> M/s. Maple Destinations and Dreambuild Pvt. Ltd. Versus Deputy Commissioner of Income Tax, Circle -16 (1), New Delhi - TMI The issues involved in the judgment are:1. Reopening of the case u/s 147 r.w.s 148 of the Income Tax Act, 1961.2. Estimation of the cost of acquisition of the property and the addition made u/s 69 of the Income Tax Act, 1961.Issue 1: Reopening of the Case u/s 147 r.w.s 148The Assessee challenged the reopening of the case, arguing it was 'absolutely bad in law.' The Ld. Departmental Representative countered that the reassessment was based on information from the Investigation Wing indicating cash payments in a property transaction. The Tribunal found that the Assessing Officer (AO) had 'reason to believe' that income had escaped assessment based on sufficient and relevant material, thus satisfying the requirements of section 147 of the Act. The Assessee's objections, including a writ petition, were dismissed, and Ground No. 1 of the Assessee was dismissed.Issue 2: Estimation of Cost of Acquisition and Addition u/s 69The Assessee argued that the estimation of the property's cost at Rs. 28,49,38,823/- was 'absolutely bad in law and facts,' asserting the property was purchased for Rs. 1,20,00,000/-. The AO's addition of Rs. 27,29,38,823/- was based on statements from individuals involved in the transaction, which were later retracted. The Tribunal noted that these retracted statements, claimed to be made under duress, could not be considered valid evidence. The Tribunal also criticized the AO for denying the Assessee's request for cross-examination of the witnesses, which violated principles of natural justice. It was held that the addition could not be made solely on retracted statements without corroborative material. Consequently, the Tribunal deleted the addition made by the AO, allowing Ground No. 2 of the Assessee.In conclusion, the appeal filed by the Assessee was partly allowed.Order pronounced in open Court on 21st March, 2024.
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