2013 (1) TMI 1072 - HC - Income Tax

Seized noting alleging cash payment for land purchase rejected where corroborative evidence absent; tax addition disallowed

Seized noting purporting to record a cash payment for land was held insufficient when evaluated against the full evidentiary record; reliance on an ... - Issues: Whether the Tribunal was justified in holding that the noting seized during search (showing a cash entry of Rs.33 lakhs) was insufficient to conclude that the assessee had paid Rs.33 lakhs in cash for purchase of land and therefore Section 69 of the Income-tax Act, 1961 was not attracted.Analysis: The Tribunal assessed the totality of evidence produced by the assessee including conveyance deed, valuation by stamp authorities, stamp duty paid, books of account entries and a subsequent sale deed showing sale for Rs.55 lakhs. The Tribunal found that the seized noting could not be relied upon in isolation and that the assessing officer and CIT(A) had relied selectively on parts of the seized document without supporting corroborative documents. The Tribunal further noted the absence of any corresponding addition against the seller and concluded on the basis of factual materials that the alleged cash payment of Rs.33 lakhs had not in fact changed hands. The High Court examined whether there was any reason to entertain the question of law, having regard to the Tribunal's finding of fact based on the evidentiary record.Conclusion: The Tribunal's factual finding that the seized noting was insufficient to establish a cash payment of Rs.33 lakhs is upheld and Section 69 is inapplicable on the facts; the revenue's appeal is dismissed.