ACIT, CENTRAL CIRCLE- 26, NEW DELHI vs. VRP LANDBASE PVT. LTD., NEW DELHI

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ITA 2266/DEL/2018Status: DisposedITAT Delhi28 March 2022AY 2013-146 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of additions by the CIT(A), finding no corroborative evidence for cash receipts. The denial by the other party to the agreement and the absence of any mention of cash in subsequent legal proceedings further supported the assessee's case.

What were the facts?

During a search, an agreement to sell was found indicating a cash payment of Rs. 1.80 crores to the assessee. Another agreement suggested a Rs. 50 lakhs cash payment for a property not owned by the assessee. The Assessing Officer made additions based on these documents and a statement from one director.

What were the issues?

Whether additions on account of alleged undisclosed cash receipts are justified based on seized documents and statements, especially when the other party denies the transaction and there is no other corroborative evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 132,Section 153A,Section 153C,Section 131,Section 292C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI

Before: SHRI SAKTIJIT DEY & SHRI N.K. BILLAIYA

Hearing: 28.03.2022Pronounced: 28.03.2022

This is an appeal by the Revenue against order dated 09.01.2018 of learned Income Tax Commissioner (Appeals)-29, New Delhi, for the assessment year 2013-14.

2.

The effective grounds raised by the Revenue read as under:

1.

That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,80,00,000/- on account of undisclosed cash receipt u/s 69A of the Act, ignoring the fact that the said addition was made on the basis of seized document found during the search and the legal

presumption contained in Sec. 292C has not been fully rebutted by the assessee. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 50,00,000/- on account of cash receipt u/s 69A of the Act, ignoring the fact that the said addition was made on the basis of seized document found during the search and the legal presumption contained in Sec. 292C has not been fully rebutted by the assessee

3.

Briefly the facts are, the assessee is a resident company. For the assessment year under dispute, the assessee originally filed its return of income on 31.03.2014 declaring income of Rs.27,370/-. Pursuant to search and seizure operation carried out under section 132 of the Income-tax Act, 1961 (for short ‘the Act’), assessment proceeding under section 153A read with section 153C of the Act was initiated in case of the assessee. In course of the assessment proceeding, the Assessing Officer noticed that in course of search operation an agreement to sale between the assessee and M/s. Bharat Buildtech Pvt. Ltd. was found, wherein, cash payment of Rs.1.8 crores to the assessee was mentioned. He further found that the agreement to sale was signed by Sh. Ved Prakash, as Director of the Assessee Company, and Sh. Rajesh Kumar Dhir, as an authorized signatory of M/s.

Bharat Buildtech Pvt. Ltd. Based on such information, summons were issued to Sh. Ved Prakash and statement under section 131 was recorded from him. As alleged by the Assessing Officer, in the said statement Sh. Ved Prakash acknowledged receipt of cash of Rs.1.40 crores. Based on such statement, the authorized signatory of M/s. Bharat Buildtech Pvt. Ltd. was also summoned and statement was recorded from him. However, Sh. Rajesh Kumar Dhir denied of having paid any cash to the assessee.

4.

Be that as it may, relying upon such material, the Assessing Officer proceeded to complete the assessment by adding back an amount of Rs.1.80 crores under section 69A of the Act. Further, the Assessing Officer observed, Sh. Ved Prakash has entered into another agreement with Sh. Chandrakant Sharma for the very same property on 12th September, 2011. As per the terms of the agreement, Sh. Ved Prakash was to purchase the property for Rs.16 crores and on the date of agreement, an amount of Rs. 1 crore was paid comprising of Rs.50 lakhs in cheque and Rs.50 lakhs in cash. Rejecting assessee’s explanation that Rs.50 lakhs in cash was written as a dummy figure, the Assessing Officer made addition of the said amount.

5.

Being aggrieved with the additions so made, the assessee preferred an appeal before learned Commissioner (Appeals).

6.

After considering the detailed submission of the assessee in the context of facts and materials on record, learned Commissioner (Appeals) deleted the additions.

7.

We have considered rival submissions and perused the materials on record. A reading of the assessment order clearly reveals that based on the document seized from the premises of a third party as well as the statement recorded on oath from Sh.

Ved Prakash, the Assessing Officer has added back an amount of Rs.1.80 crores under section 69A of the Act. Though, the Assessing Officer has alleged that the signatories to the agreement to sale pursuant to which the assessee received the amount of Rs.1.80 crores are Sh. Ved Prakash and Sh. Rajesh Kumar Dhir, however, in the statement recorded under section 131 of Sh. Rajesh Kumar Dhir has emphatically denied of having paid the amount of Rs.1.80 crores to Sh. Ved Prakash.

8.

Further, on in-depth analysis of facts and materials on record, learned Commissioner (Appeals) has recorded a factual finding that the assessee had only received a cheque of Rs.60 lakhs as an advance from M/s. Bharat Buildtech Pvt. Ltd. and no other payment was to be received till the execution of sale deed.

The aforesaid factual position was also corroborated in the cross examination of Sh. Rajesh Kumar Dhir. It is also a fact on record that apart from the agreement to sale and the statement initially recorded from Sh. Ved Prakash, there was no other corroborative evidence available with the Assessing Officer to demonstrate that any cash was received by the assessee. Even, no such entry was found recorded in the books of account of the assessee. It is also relevant to observe that M/s. Bharat Buildtech Pvt. Ltd. had also filed a suit before the Hon’ble Delhi High Court subsequently for recovery of the cheque amount of Rs.60 lakhs paid to the assessee. In the suit filed before the Hon’ble Delhi High Court, there is no mention of any cash payment being made to the assessee. As rightly observed by learned Commissioner (Appeals), since the agreement to sale was found from the premises of a third party, the Assessing Officer could not have drawn presumption under section 292C of the Act. It is also a fact that the property in question was owned by Sh. Chandrakant Sharma, which was finally sold to M/s. AKN Developers Pvt. Ltd. on 26.08.2012. Thus, the assessee was never the owner of the said property.

9.

As regards the addition of Rs.50 lakhs, the facts are identical as the property was owned by Sh. Chandrakant Sharma and was finally sold to M/s. AKN Developers Pvt. Ltd. As has been observed by learned Commissioner (Appeals), even the amount of Rs.50 lakhs paid in cheque was not cleared by the bank. Keeping in view the facts discussed by learned Commissioner (Appeals) which remain uncontroverted before us, we hold that there is no infirmity in the decision of learned Commissioner (Appeals) in deleting the disputed additions. Thus, the grounds raised by the Revenue, being bereft of merits, deserve to be dismissed.

10.

In the result, the appeal is dismissed.

Order pronounced in the open court on 28th March, 2022

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