×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This is an appeal filed by the assessee against the order of ld.CIT(A), Ajmer dated 04/10/2017 for the A.Y. 2009-10 in the matter of order passed U/s 143(3) read with Section 147 of the Income Tax Act, 1961 (in short the Act).
2. In this appeal, the assessee is aggrieved for reopening of the assessment as well as merit of the addition of Rs. 4,66,660/- made by the A.O. as unexplained investment in plot.
3. At the outset, the ld AR of the assessee placed on record the order of the Coordinate Bench wherein under the similar facts, the addition so made by the A.O. was deleted by the Tribunal.
4. I have heard the rival contentions and carefully gone through the orders of the authorities below and found that the assessee, being a State Govt. employee, has purchased one Plot situated at 187, Revenue Residency at village Peepla Bharatsingh, (Jaisinghpura Muhana Road), Bhankrota, Tehsil Sanganer, Jaipur. Total size of Plot was Rs. 233.33 Sq. Yards. The consideration of the Plot was negotiated @ Rs. 1150/- per Sq. Yards and total amount was Rs. 268330/- The plot was pur hased through Rajasthan Tehsildar Sewa Parishad and advance money of Rs. 30000/- was paid in the F.Y. 2006- 07. All the terms and conditions were settled between the assessee and Rajasthan Tehsildar Sewa Parishad. Balance amount of consideration was paid during the F.Y. 2008-09.
5. The A.O. reopened the assessment as per information received from Investigation Wing, Jaipur by the A.O., one Sh. Madan Mohan Gupta has accepted on money receipt on sale of Revenue Residency Scheme which is Rs. 2000/- per square yard. On the basis of the information as mentioned above, the A.O. added a sum of Rs. 466660/- to the income of the assessee as unexplained money/ investment.
6. I have considered the rival contentions and carefully gone through the orders of the authorities below and found that under similar facts, the addition made on account of on money was deleted after following the observation made in the case of Dhirendra Singh Vs. ITO in ITA No. 1273/JP/2018 order dated 25/03/2019 wherein the bench concluded having exactly similar facts and circumstances as under:
“6. Now I come to the merit of the addition, I found that the Assessing Officer observed at pages 2 to 15 of the order that in search at business premises of Shri Madan Mohan Gupta dated 23.05.2013, incriminating documents were found and seized which revealed that the assessee made payment of Rs.2,68,330/- and Rs.2,670/- towards boundary expenses by receipt no. 53 dated 07.07.2008 through cheque and Rs.4,66,660/- as ‘on-money’. He referred to the relevant extract of the statement of Shri Madan Mohan Gupta u/s 132(4) reproduced at pages 10-13 of the order to conclude that assessee made ‘on-money’ payment at the rate of Rs.2,000 per sq. yard and thus, made addition of Rs.4,66,660/- u/s 69 of the Act. By the impugned order, the ld. CIT(A) has confirmed the action of the Assessing Officer. On the issue of opportunity of cross examination, it was held that Shri Madan Mohan Gupta is not third party as he was the owner of the plots. All the documents on the basis of which assessment was made were provided to the assessee. Accordingly, it was held that the contention raised by the assessee as to the denial of cross examination by the Assessing Officer does not carry much weight and thus, confirmed the addition.
7. After going through the order passed by the lower authorities, I observe that both the lower authorities have not placed any material on record to show that the assessee had paid alleged ‘on-money’ of Rs.4,66,660/-. Neither in the seized documents found from Shri Madan Mohan Gupta nor in the statement recorded u/s 132(4), he admitted that he received any amount from the assessee by way of ‘on- money’. In fact, in reply to question nos. 25 to 27 of his statement u/s 132(4) with reference to the amount of Rs. 1,60,96,000/- as referred by the Ld. CIT(A), he stated that he does not remember that what is this working but it may be with reference to commission with respect to certain property which he offered for tax. In statement u/s 131(1) dated 24.02.2016 and 29.02.2016 recorded by the AO in course of his assessment proceedings, he has categorically admitted that he has sold the plots to the Rajasthan Tehsildar Sewa Parishad at the
rate of Rs 1,150 per sq. yard on which he earned profit of Rs 87,20,000/- which he has already offered for tax and the remaining profit of Rs. 1,60,96,000/- is not his profit but profit of the Parishad but to purchase peace of mind, he has surrendered this amount in his hand. Thus, from the reading of the statement of Shri Madan Mohan Gupta and the papers found from him, it is evident that there is nothing to suggest that allottees of the plot have paid any ‘on-money’ on purchase of the plot. In fact, the assessee has not purchased any plot from Shri Madan Mohan Gupta rather he was allotted the plot by the Rajasthan Tehsildar Sewa Parishad and thus, there is no privity of contract between the assessee and Shri Madan Mohan Gupta.