The ITAT bench comprising acting judicial member Ravish Sood and vice president P.K. Bansal recently recently held that additions in respect of unexplained cash credit under Section 68 of the Income Tax Act, 1961 is valid since the Assessee paid ‘On Money’ for the purchase of property.
In the instant case, the return of income including agricultural income filed by the assessee was processed and completed as such under Section 143(1) of the Income Tax Act. The case of the assessee was thereafter reopened and a notice u/s 148 was issued to the assessee finding that the documents impounded during the course of survey proceedings conducted on M/s Dev Sharda Developers Pvt. Ltd. revealed that the assessee had paid “on money” for purchase of Flat.
On perusal of impounded document which revealed that total payment amounting to Rs.76,00,000/- was paid by the assessee for purchase of the aforesaid flat, as against the investment of Rs. 29,00,000/- shown by him. The A.O called upon the assessee to show cause as to why the amount of Rs. 47,00,000/- paid by him as “on money” for purchase of flat may not be added to his income for the year under consideration.
Dissatisfied with the contention of assessee, the AO made an addition of Rs. 47,00,000/-under Sec. 69 and aggrieved assessee carried the matter before CIT (A) However, the CIT(A) not finding favour with the contentions of the assessee, being of the view that the assessee had failed to rebut the presumptions regarding the noting of the cash payments in the impounded document, therefore, upheld the addition of Rs. 47,00,000/- made by the A.O.
While relying on the various decisions of High Court the tribunal bench had an opinion that presumption under Sec. 292C and under Sec. 132(4A) invoked in the case before the High Court is applicable only in a respect of documents seized during the course of search proceedings, therefore, the same would not be applicable to the case of the present assessee where survey proceedings were conducted.
During the survey proceedings, it was found that the said document is an unsigned one, the assessee in the present case had never admitted the contents of the seized documents relating to the purchase of the property under consideration. Based on this findings the bench ordered that the addition of Rs. 47,00,000/- made by the A.O u/s 69 and sustained by the CIT(A), cannot be upheld.
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