Income Tax Appellate Tribunal (ITAT), New Delhi held that Addition u/s 43CA on absence of evidence for receipt of money in addition to sale consideration is invalid.
The assessee Company, M/s. Divine InfraconPvt. Ltd which is engaged in the business of running of hotels, filed its return for the Assessment Year 2015-16 declaring loss of Rs. 27,83,37,701/-. The assessment proceedings have been initiated and the assessment order came to be passed on 04/06/2018 holding that, the amount of Rs. 22,93,71,100/- determined by the DVO as full value of the sale consideration received by the assessee and made an addition of Rs. 1,76,54,600/- to the total income of the assessee for the year under consideration as per Section 43CA of the Act.
Consequent to the assessment order dated 04/06/2018, the penalty proceedings has been initiated against the assessee and vide order dated 30/11/2018 an order u/s 271(1)(c) of the Act has been passed by imposing penalty of Rs. 57,38,358/- .
Aggrieved by the penalty order dated 30/11/2018, the assessee has preferred an Appeal before the CIT(A). The CIT(A) vide order dated 31/10/2019 allowed the Appeal filed by the assessee by deleting the order of imposition of penalty. Aggrieved by the order of CIT(A) dated 31/10/2019, the Department is in appeal before the Tribunal.
The Bench consisting of Shamim Yahya, Accountant Member and Yogesh Kumar US, Accountant Member observed that “In the present case, the Assessing Officer, in the absence of any evidence regarding receipt of money in addition to the sale consideration disclosed in the sale deed and even without there being any allegation to that effect, the A.O based on the fiction created u/s 43CA of the Act, the addition has been made which cannot be sustained under law. By following the settled principal of law mentioned above, we are of the opinion that, the CIT(A) has justified in deleting the penalty imposed by the A.O. Therefore, the order of the CIT(A) requires no interference.”
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