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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
ORDER This is an appeal by the assessee against order dated 05.03.2019 of learned Commissioner of Income Tax (Appeals)-32, New Delhi, for the assessment year 2008-09.
The dispute in the present appeal is confined to addition of an amount of Rs.37,22,940/- towards alleged on-money paid in cash towards purchase of a property.
Briefly the facts are, the assessee is a resident individual.
For the assessment year under dispute, the assessee filed her return of income on 30.03.2009 declaring of Rs.6,39,889/-.
Subsequently, the Assessing Officer received information that the assessee had paid on-money in cash towards purchase of immovable property from a builder, namely, AEZ Group. The information received by the Assessing Officer revealed that in course of a search/survey operation conducted in case of the builder it was found that the builder has received on-money in cash from various customers towards sale of property. Based on the information received, the Assessing Officer found that the total amount paid to the builder was to the tune of Rs.63,15,840/-, out of which, an amount of Rs.25,92,900/- was paid through cheque and the balance amount of Rs.37,22,940/- was paid in cash. He further found that in course of search/survey operation a number of investors have accepted of having made cash payment for purchasing the property. In course of assessment proceeding, the assessee was called upon to explain the source of cash payment. Though, the assessee accepted the payment made in cheque, however, she denied of having made any cash payment. However, rejecting the explanation of the assessee, the Assessing Officer added back an amount of Rs.37,22,940/-, being alleged cash payment to the builder, to the income of the assessee. The assessee contested the 2 | P a g e aforesaid addition before learned Commissioner (Appeals).
However, the addition was sustained.
I have considered rival submissions and perused the materials on record. Short issue arising for consideration is, whether the assessee has paid on-money in cash towards purchase of a property. Undisputedly, based on certain information received in course of search/survey operation conducted in case of the builder, the Assessing Officer has made the disputed addition. However, in course of proceedings before the departmental authorities, the assessee had stoutly denied of having paid any on-money in cash, over and above the amount paid in cheque. It is observed, except, the information stated to have been gathered during the search/survey operation, the Assessing Officer has not brought on record any material which can conclusively establish the payment of on-money by the assessee.
On the contrary, in course of the proceeding before the first appellate authority, a direction was issued to the Assessing Officer to inquire into assessee’s claim that no on-money was paid. In the remand report dated 23.08.2017, a copy of which is placed in the paper book, the Assessing Officer has clearly stated 3 | P a g e that in response to summons issued under section 131 of the Act, the builder furnished a reply stating that no amount in cash was received towards sale of the property. Further, it is interesting to note that in case of the concerned builder, the Assessing Officer made an assessment under section 153C read with section 143(3) of the Act for assessment year 2008-09 by adding back an amount of Rs.17,10,07,792/- representing alleged on money received in cash to the income of the assessee. However, while deciding the appeal of the builder, learned first appellate authority, in order dated 29.09.2015, deleted the addition made on account of alleged receipt of on-money in cash. Further, the sole material available with the Assessing Officer, based on which the addition was made is Annexure -27 seized from the builder. A perusal of the said seized document reveals, it merely shows certain payments received in check and cash in respect of certain persons/entities. However, no other documentary evidences have been brought on record by the Assessing Officer to corroborate the authenticity of the figures mentioned in the seized material.
Even, in post search proceeding neither the builder, nor the assessee have accepted the payment/receipt of on- money. That being the case, in absence of any other material to corroborate 4 | P a g e the facts found in the solitary seized document, no addition can be made at the hands of the assessee.
In view of the aforesaid, I delete the addition made. In view of my decision on merits, the legal grounds, being merely of academic importance, are not adjudicated.
In the result, the appeal is allowed, as indicated above.
Order pronounced in the open court on 30th November, 2022