Revenue's appeal dismissed for unexplained money under section 69A and unaccounted investment under section 69B lacking corroborative evidence

ITAT Surat dismissed revenue's appeal regarding unexplained money under section 69A and unaccounted investment under section 69B. The AO made additions based on incriminating documents seized during search - a notarized satakhat and digital device contents. CIT(A) deleted additions. ITAT upheld CIT(A)'s decision, noting the satakhat lacked acknowledgment of payment receipt and wasn't signed by seven persons. AO failed to conduct independent investigation or examine sellers who could have strengthened the case. For section 69B, no evidence of on-money payment was found, and Settlement Commission had already accepted 10% of the disputed amount. Without corroborative evidence, additions were unsustainable.

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Issues Involved:
1. Deletion of addition of Rs. 4,12,50,000/- under Section 69A of the Income Tax Act for AY 2016-17.
2. Deletion of addition of Rs. 13,96,60,000/- under Section 69B of the Income Tax Act for AY 2020-21.

Analysis of Judgment:

Issue 1: Deletion of Addition of Rs. 4,12,50,000/- under Section 69A for AY 2016-17

Facts and Background:
- A search and seizure action under Section 132 of the Income Tax Act was conducted on the Kuberji Group of Surat on 06/02/2020, covering the assessee.
- During the search, a notarized Satakhat (agreement) was found at the residence of the assessee's father, indicating a land deal for Rs. 16.50 crores with a 25% payment of Rs. 4.12 crores in cash.
- The Assessing Officer (AO) added Rs. 4.12 crores to the assessee's income, considering it as unexplained money under Section 69A.

Assessee's Argument:
- The Satakhat was incomplete as it was not signed by all co-owners, and the deal did not materialize.
- The notary and the father of the assessee confirmed that no cash payment was made.
- The land was still in the name of the original owners, and no corroborative evidence of cash payment was found during the search.

CIT(A)'s Decision:
- The CIT(A) deleted the addition, noting that the Satakhat was incomplete and not signed by all co-owners.
- The land was still in the name of the original owners, and no evidence of cash payment was found.
- The notary confirmed that no payment was made in his presence.

Tribunal's Decision:
- The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO did not examine the sellers or bring any corroborative evidence.
- The Tribunal noted that the Satakhat was not signed by all co-owners, making it incomplete and not legally binding.
- The Tribunal found no reason to interfere with the CIT(A)'s order, affirming the deletion of the addition.

Issue 2: Deletion of Addition of Rs. 13,96,60,000/- under Section 69B for AY 2020-21

Facts and Background:
- During the search on 06/02/2020, a Pen drive containing a digital image of a Sauda Chitthi (agreement) dated 03/07/2014 for land was found.
- The AO noted that the land was sold to the assessee for Rs. 65 lacs in 2019, but the original Sauda Chitthi indicated a value of Rs. 14.61 crores.
- The AO added Rs. 13.96 crores as unexplained investment under Section 69B.

Assessee's Argument:
- The Sauda Chitthi was related to a deal by the assessee's father, which was canceled due to title issues.
- The father had disclosed the payment of Rs. 10.90 crores before the Settlement Commission, which was accepted.
- The land was purchased from a different owner in 2019 for Rs. 65 lacs, as confirmed by the Deputy Collector, Stamp Duty Valuation.

CIT(A)'s Decision:
- The CIT(A) deleted the addition, noting that the original Sauda Chitthi was canceled and the land was purchased from a different owner.
- The valuation of Rs. 65 lacs was accepted by the Deputy Collector, Stamp Duty Valuation.
- There was no evidence of on-money payment found during the search.

Tribunal's Decision:
- The Tribunal upheld the CIT(A)'s decision, emphasizing that there was no evidence of on-money payment.
- The Tribunal noted that the AO did not examine the sellers or bring any corroborative evidence.
- The Tribunal found no reason to interfere with the CIT(A)'s order, affirming the deletion of the addition.

Conclusion:
The Tribunal dismissed both appeals filed by the revenue, upholding the CIT(A)'s decisions to delete the additions of Rs. 4,12,50,000/- for AY 2016-17 and Rs. 13,96,60,000/- for AY 2020-21. The Tribunal emphasized the lack of corroborative evidence and the failure of the AO to examine the relevant parties.

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