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Facts
The assessee company filed its return of income. Subsequently, a search operation revealed information about on-money payment for a property booking. The assessee's case was reopened, and an addition was made based on this alleged on-money payment.
Held
The Tribunal held that the addition made by the Assessing Officer (AO) was not based on valid evidence. The alleged on-money payment was recorded as 'Discount Receivable' and not 'Cash Received', and the advance money was refunded due to cancellation. The AO's action was based on surmises without independent inquiry.
Key Issues
Whether the addition made on account of alleged on-money payment is sustainable without proper evidence and independent inquiry, especially when the amount was recorded as a receivable and subsequently refunded?
Sections Cited
148, 250, 147, 143(3), 69A, 153C, 132A
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
(A.Y. 2012-13) Sajjan India Limited that the lower authorities have not made any independent inquiry or for that case, any further inquiry as to the payment of on-money by the assessee to the builder and whether or not the same has been returned back by the builder upon cancellation of the said transaction. In the absence of the relevant findings, we do not find any justification in the action of the ld. AO in making the impugned addition merely on surmises and conjectures without any valid basis. We therefore deem it fit to set aside the order of ld. CIT(A) and allow the appeal of the assessee. As we have decided the issue on the merits, the other legal grounds raised by the assessee requires no further adjudication.
10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 04.03.2025