RAKESH PAL SINGH,NEW DELHI vs. DCIT, CENTRAL CIRCLE, DEHRADUN

PDF · subscribers
ITA 1232/DEL/2018Status: DisposedITAT Dehradun20 October 2022AY 2010-115 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition for property purchase was wrongly made in the assessee's hands as the property was purchased by a company. The addition for alleged undisclosed capital gains was deleted due to lack of corroborative evidence.

What were the facts?

The assessee's appeal concerns additions made by the Assessing Officer (AO) and upheld by the CIT(A) regarding alleged cash payments for property purchase and undisclosed capital gains. The AO relied on documents found during a search operation.

What were the issues?

Whether additions made based on documents found during a search are valid when the property was purchased by a company, and whether additions for undisclosed capital gains are justified without corroborative evidence.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 68,Section 292C,Section 132(4A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN BENCH ‘DB’, DEHRADUN

Before: Sh. Kul BharatDr. B. R. R. Kumar

Hearing: 12.10.2022Pronounced: 20.10.2022

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of ld. CIT(A)-IV, Kanpur dated 22.12.2017. 2. Following grounds have been raised by the assessee:

“1. That the learned CIT (Appeals) erred in not adjudicating ground no. 4 raised by the Assessee before him, which was a legal ground and went to the root of the validity of assessment and is covered in Assessee’s favour by a judgment of the Hon’ble Allahabad High Court, besides others.

2.

That on the facts and in the circumstances of the case, the learned CIT (Appeals) erred in upholding the addition of Rs.2,05,00,000 allegedly paid in cash by the assessee for purchase of a property, which the assessee never purchased.

2.

1 That at any rate, the learned CIT (A) erred in upholding the finding of the AO that the aggregate amount of cash payments made for purchase of property at N-5, Ground floor, Sector 18, Noida was 2 Rs.2,05,00,000 out of a total consideration of Rs.2,70,00,000 in the teeth of unimpeachable evidence adduced by the Assessee that a sum of Rs. 1,55,00,000 was paid by cheques through regular banking channels from the account of the purchaser of the property M/s R.P. Singh 8s Co. (P) Ltd.

3.

That on the facts and in the circumstances of the case, the learned CIT (A) erred in upholding the addition of Rs. 23,00,000 representing alleged receipt of cash by the assessee for sale of a property, over and above the consideration recorded in the sale deed.”

3.

A search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on the assessee in connection with group of cases pertaining to Sh. Manjeet Johar on 23.12.2014. The assessment u/s 153A has been completed by making an addition of Rs.2,05,00,000/- on account of unexplained investment and Rs.23,00,000/- on account of undisclosed long term capital gains. The action of the Assessing Officer has been affirmed by the ld. CIT(A).

4.

Aggrieved, the assessee filed appeal before us.

5.

During the arguments, the ld. AR primarily argued that the purported property at N-5, Sector-18, Noida for which cash amount of Rs.2,05,00,000/- has been allegedly paid was never purchased by the assessee.

6.

During the search, the incriminating material marked as Annexure A-2, page nos. 1, 2, 3, 9, 10 and 11 reflected cash payment of Rs.2,05,00,000/- and the same has been assessed u/s 68 in the hands of the assessee. The ld. AR submitted that the said property was in fact purchased by a company named M/s R.P. Singh & Co. Pvt. Ltd. for Rs.1,55,00,000/- and the company paid entire purchase amount through a/c payee cheque and hence the assessee cannot be held to be liable for any addition u/s 68. We find that the ld. CIT(A) confirmed the addition resorting to provisions of Section 292C of the Act that the incriminating documents found during the course of search belongs to the person in possession of such incriminating documents and the contents of such incriminating documents are deemed to be true and correct. Against the observation of the ld. CIT(A), the ld. AR argued that the said property was disclosed in the regular books of accounts of the company M/s R.P. Singh & Co. Pvt. Ltd. and the copy of the sub-lease deed for purchase of property was also found during the course of search and was a part of inventory of Annexure LP-1 page no. 112 to 117. 7. Heard the arguments of both the parties and perused the material available on record.

8.

We have gone through the sub-lease dated 09.02.2010 wherein the ground floor of the property N-5, Atta Market, Sector-18, Noida has been purchased by the company without the roof rights. Thus, we find that the revenue authorities erred in relying on the deeming provision rather than the factual position. Since, the purchase has been made by the company M/s R.P. Singh & Co. Pvt. Ltd., the purported payment of the cash should have been rightly assessed in the hands of the company who is the real owner of the property instead of taxing it in the hands of Sh. Rakesh Pal Singh, the assessee before us. Thus, a grievous error has crept in the assessment of the Assessee. Hence, we hold that the addition made in the hands of the Assesssee is liable to be deleted.

9.

Appeal of the Assessee on this ground is allowed.

10.

The Assessing Officer made an addition of Rs.23,00,000/- on account of alleged under declaration of consideration for sale of property at A-56, DSIDC, Narela, New Delhi on the basis of page -9 of Annexure A-2, on which noting “A-56 sold DSIDC” consideration figure of Rs.1,19,00,000/- was made. The Assessing Officer held that the assessee was in receipt of cash of Rs.23,00,000/- over and above the declared amount of Rs.96,00,000/- as per the sale document to justify the addition. The Assessing Officer alleged that the difference the amount of Rs.1,19,00,000/- and the consideration received of Rs.96,00,000/- is the unaccounted income of the assessee. The ld. CIT(A) affirmed the action of the Assessing Officer relying on the provisions of Section 292C and Section 132(4A).

11.

We have gone through the document and also the submissions of both the parties. The assessee has received an amount of Rs.9,00,000/- on 13.12.2009, Rs.44,00,000/- on 24.12.2009 and Rs.19,00,000/- on 31.12.2009. No enquiries have been conducted from Smt. Rajni Bansal and Smt. Santosh Devi Bansal who have purchased the property. The statement of the assessee on this issue recorded during the search has not been brought on record. The period of alleged cash payments do not tally with the period of purchase of the property. Since, no corroborative evidences have been brought on record to prove the fact of unaccounted payments, we hold that no addition on this issue is called for.

12.

Appeal of the assessee on this ground is allowed.

13.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 20/10/2022. (Kul Bharat) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 20/10/2022 *Subodh Kumar, Sr. PS*

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →