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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER S.S. VISWANETHRA RAVI, JM :
This appeal by the assessee against the order dated 31-07-2014 passed by the Commissioner of Income Tax (Appeals)-Central, Pune [‘CIT(A)’] for assessment year 2007-08.
We find that this appeal was filed with a delay of 124 days and the assessee filed an affidavit stating the reasons for delay. On perusal of record and hearing both the parties, we find that the reasons stated by the assessee are bonafide which really prevented the assessee to file the present appeal in time. Therefore, the delay of 124 days is condoned.
The assessee raised two grounds of appeal amongst which constitutes only issue challenging the action of CIT(A) in confirming the addition of Rs.21,00,000/- on account of alleged cash consideration in the facts and circumstances of the case.
Brief facts relating to the issue on hand are that the assessee is a partnership firm engaged in the business of construction and development of plots. The assessee belongs to Netsurf group on which a search action was conducted on 07-05-2007. In response to notice u/s. 153A(a) of the Act, the assessee filed its return of income declaring a total income of Rs.10,35,325/-. The AO determined the total income of the assessee at Rs.33,35,910/- inter alia making addition on account of alleged cash receipts under the cancellation of agreement vide its order dated 31-12- 2009. The CIT(A) confirmed the same u/s. 143(3) r.w.s. 153A of the Act. Aggrieved by the same, the assessee is before us by raising above mentioned grounds of appeal.
5. Heard both the parties and perused the material available on record. We note that the assessee entered into an agreement on 25-05-2003 and acquired rights on a piece of land belonging to Parande family. The said Parande family entered into a fresh agreement with Kamalraj Associates by cancelling the agreement with the assessee. By such cancellation, the assessee received Rs.20 lakh as per such cancellation deed but according to AO the consideration was of Rs.41 lakh. The ld. AR submits that there was no evidence to show that the assessee received Rs.41 lakh in addition to the consideration reflected in the cancellation deed. We note that the case of the AO was that a statement of Shri Bapu Vithal Parande recorded u/s. 131 of the Act that they agreed to pay Rs.41 lakh for cancellation of earlier agreement out of which Rs.20 lakh was paid by M/s. Kamalraj Associates and remaining were paid in cash by withdrawal of the said amount in the account of the members of his family. The ld. AR argued that such statement cannot be believed as there were many members to its family and no family other than Shri Bapu Vithal Parande are given any statement showing that withdrawals are made from the accounts of other family members and paid to the assessee. Further, she argued that there was no incriminating material found during the course of search and addition made on in the absence of search material is bad under law. We find according to the ld. AR that no evidence with regard to cash payment said to have been paid to the assessee was found during the search and no credence could be given to only statement of Shri Bapu Vithal Parande amongst others his family members. The ld. AR submits that a statement u/s. 131 of the Act lacks evidentiary value and the statement made by Shri Bapu Vithal Parande and we note that there was no evidence brought on record showing that the assessee received cash payment to the tune of Rs.21 lakh in addition to consideration mentioned in the cancellation deed except to statement made by the said Shri Bapu Vithal Parande u/s. 131 of the Act.
6. The assessee contended that the addition made by the AO basing on statement recorded u/s. 131 of the Act without there being any documentary evidence to such statement. The CIT(A) sought remand report from the AO which is reproduced at Page No. 11 and 12 of the impugned order. On perusal of the same, we note that the CIT(A) directed the AO call for search material as he considered fit for conducting enquiries to verify the factual aspect and contention of no documentary evidence, no opportunity of cross-examination and denial of concerned person of assessee receipt of any amount other than the consideration recorded in cancellation agreement. The remand report of the AO was furnished to assessee. On perusal of remand report we note that the AO had given opportunity for cross-examination of Shri Bapu Vithal Parande to the assessee. The said person reaffirmed cash payment of Rs.21 lakh to the partners of the assessee and according to the AO that the assessee could prove nothing in favour of the assessee that no cash payment is made. The assessee made rebuttal to the cross-examination of the said Shri Bapu Vithal Parande and that the said Shri Bapu Vithal Parande expressed his inability of those persons present during the alleged search. We note that the alleged cash was withdrawn from the accounts of Shri Bapu Vithal Parande, Shri Sandeep Parande and two others. The said person expressed his inability bring Shri Sandeep Parande and two others from whose accounts amounts have been withdrawn as witnesses to the alleged cash payment who are none of them his own family members. We note that the AO in its order at Para No. 5 clearly observed that certain documents were seized which are related to Dighi property which resulted in making addition in the hands of assessee. The CIT(A) also affirmed the said observation at Para No. 6.13 of the impugned order but no such documentary evidence brought on record before this Tribunal showing that the assessee received the alleged cash payment. We find the case of ld. DR is that Shri Bapu Vithal Parande made statement that the cash payment to assessee withdrawing such amounts from the accounts of his family members but there was no statement recorded by the AO in this regard from such family members and also Shri Bapu Vithal Parande expressed inability such members for the examination. Thus, the evidence of cash payment by Shri Bapu Vithal Parande cannot be believed for the reason that there was no witnesses to the said cash payments and a mere statement by the said person that some of the amounts received from the accounts of others is not sufficient to make the addition in the hands of the assessee. Therefore, it is established that there was no documentary evidence corroborating the statement of Shri Bapu Vithal Parande recorded u/s. 131 of the Act. Thus, the order of CIT(A) is not justified and it is set aside and the grounds raised by the assessee are allowed.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 10th May, 2022.