The Income Tax Appellate Tribunal ( ITAT ) has deleted the addition of 5 crore, citing the absence of corroborative evidence to prove that the taxpayer had indeed made any payment of Rs. 5 crores.
There was a search which had happened on the assessee Amit Katyal itself on 18.11.2011 based on a separate warrant of authorization in his bank locker No. 235 for which proceedings under Section 153A of the Income Tax Act, 1961. Hence, for AY 2012-13 being the year of search qua the bank locker, the assessment should be framed on the assessee under Section 143(3) of the Income Tax Act for determination of the total income of the assessee wherein, the regular income of the assessee and the undisclosed income, if any, of the assessee which were found during the course of search on 18.11.2011 could be subject matter of consideration.
However, in support of the alleged payment of Rs. 5 crores mentioned in the email dated 19.05.2011 which stood supported by the statement under Section 132(4) of the Income Tax Act from the assessee, the only recourse available to the revenue is to examine the said veracity of the email and veracity of the statement under Section 132(4) of the Income Tax Act in the separate and independent proceedings under Section 153C of the Act and the same cannot be done in the regular assessment proceedings under Section 143(3) of the Act for AY 2012-13.
It was illegal to frame an assessment under Section 153A of the Income Tax Act for the same assessment year; and assessment under Section 153C of the Income Tax Act for the same assessment year and an assessment under Section 143(3) of the Income Tax Act for the same assessment year. This is so because each section operates on its own separate and distinct procedural requirements.
The bench found that only basis of the addition is email dated 19.05.2011 which does not indicate in any manner that the sum of Rs. 5 crores was actually paid by the assessee to Mr. Gulbir Madan. In the very same email Mr. Gulbir Madan had categorically denied having received any money of Rs. 5 crores from the assessee and had even sought for details of the alleged payment of Rs. 5 crores made by assessee to him. This fact has been ignored by the lower authorities in the instant case.
Further, the assessee filed a letter dated 18.12.2013 and even requested the AO to seek a direct confirmation from Mr. Gulbir Madan to ascertain the actual fact as to whether any payment of Rs. 5 crores was received by him from the assessee. This was not acted upon by the AO.
Further the fact of assessee making payment of Rs. 5 crores or not to Gulbir Madan could have been established and brought on record. The AO merely took the email contents as sacrosanct and taking support from the statement recorded at the time of search under Section 132(4) of the Act which effectively stood retracted by the assessee by not honoring it in the return of income, proceeded to make the addition of Rs. 5 crores on the premise that assessee had made payment of Rs. 5 crore to Gulbir Madan. No doubt the assessee had given a statement under Section 132(4) of the Income Tax Act but had not duly reflected the same in the return of income by not honoring it because there was no payment made by him to Gulbir Madan to the extent of Rs. 5 crores.
Hence, two member bench of the tribunal comprising C.N.Prasad (Judicial member) and Balaganesh (Accountant member) concluded that there was absolutely no corroborative evidence at all to prove that the assessee had indeed made any payment of Rs. 5 crores to Mr. Gulbir Madan. Accordingly, even on merits, this addition deserved to be deleted and was hereby deleted.
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