M.BALASARAVANAN,COIMBATORE vs. ITO, COIMBATORE

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ITA 292/CHNY/2016Status: DisposedITAT Chennai31 October 2017AY 2006-075 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that there was no corroborative material to support the alleged payment of extra consideration and the payment was not supported by any statement from the sellers. Therefore, the addition was not confirmed.

What were the facts?

The assessee purchased land with a co-owner for a registered value of Rs. 5,94,000. However, an impounded document indicated a higher purchase consideration of Rs. 62,40,000, with the assessee's share being Rs. 31,20,000.

What were the issues?

The primary issue was whether the addition of Rs. 31,20,000, based on an impounded document and a retracted statement, was sustainable without corroborative evidence.

Which sections of the Income-tax Act were involved?

Section 133A,Section 131(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ ‘C’ BENCH, CHENNAI

Before: SHRI CHANDRA POOJARI

For Respondent: Shri B. Sagadevan
Hearing: 31.10.2017Pronounced: 31.10.2017

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-3, Coimbatore, dated 27.11.2015 and pertains to assessment year 2006-07.

2.

The assessee has raised the following grounds for consideration.

(1) The learned CIT(A), has erred in upholding the validity of the proceedings u/s 147 of the l.T.Act, 1961, in the facts and the circumstances of the case and in law. (2) The learned CIT(A), merely based on an imaginary entry made by the appellant in a sheet of paper that was impounded, has erred in confirming the addition of Rs.31 ,20,000/-, by the AC, in the facts and the circumstances of the case and in law. (3) The learned CIT(A) ought to have deleted the addition of Rs.31,20,000/-, as it could not be corroborated with any evidence brought on record by the AC, for such an investment, if any, had been made, by the appellant, in the facts and the circumstances of the case and in law. (4) The learned CIT(A) has erred in confirming the addition, merely on the basis of suspicion that such transaction would have taken place, as stated in alleged self declaration of the appellant, that was impounded at the appellant’s premises during the survey, without more, in the facts and the circumstances of the case and in law. (5) For these and other additional grounds of appeal that may be adduced at the time of hearing, the order of the Commissioner of Income Tax (Appeals), in so far it goes to the extent to confirm the action of the AO, is opposed to law and unsustainable in the facts and the circumstances of the case.

3.

None appeared on behalf of the assessee. However, the ld.A.R filed a letter dated 14.10.2017 seeking adjournment on the reason of professional pre-occupation. In my opinion, the reasons advanced by the Authorised Representative of assessee in the above cited letter cannot be considered as reasonable cause so as to adjourn the case. Accordingly, seeking of adjournment is rejected.

4.

After hearing the ld.D.R and perusing the materials on record, the only issue raised before me is with regard to addition of `31.20 lakhs on the basis of impounded document in the form of loose sheet during the survey at assessee’s premises. The facts of the issue are that an addition of `31.20 lakhs 5. was made for purchase consideration of property at Chinnavedampatti village. The assessee had purchased this land along with a co-owner Shri Sivakumar for a registered value of `5,94,000/-. As per signed statement found and impounded during the course of survey u/s.133A, the assessee mentioned that the purchase consideration is `62,40,000/-; an amount of `50,00,000/- was paid on 27.02.2006 and balance amount of `12,40,000/- paid during the year 2006. The Authorised Representative of assessee contended that the other purchaser has not admitted any price over the registered value. It was also argued that in the impounded sheet, only the assessee had signed. Normally, in an agreement both the parties sign. The statement given during the survey has been retracted. The ld.A.R argued before Ld.CIT(A) that there was no corroborative evidence to establish payment of extra consideration for purchase of land. 4.1 The Ld.CIT(A) observed that it is undisputed fact that the signed statement is maintained by the assessee as a part of his personal information and his has been impounded during survey.

According to Ld.CIT(A), the assessee’s A.R contended that the statement is written to enhance the assessee’s credibility for having done big transaction, which is not sustainable. The authenticity of a document found in assessee’s premises and impounded during the survey is not disputed. This is primary evidence and has more value than the statement given during the survey and its subsequent retraction. The impounded statement found is titled as oath taking in vernacular language and contain details of the transactions. According to Ld.CIT(A), this being found in appellant’s premises and the addition made by the AO for `31.20 lakhs for actual consideration paid for purchase of land is sustained. Against the order of Ld.CIT(A), now the assessee is in appeal before us.

5.

I have heard both the parties and perused the material on record. In this case, the addition was based on the loose sheet marked as XL-243 and the statement given by the assessee u/s.131(1A) on 29.07.2011 before the DDIT(investigation), Coimbatore that he had paid `50/- lakhs towards purchase of land on 27.02.2006 and balance amount of `12.04 lakhs during the year 2006. According to me, the ld. Assessing Officer inferred that the assessee purchased the property at Chinnavedampatti village

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