Addition u/s 69A can't be made on basis of Unsigned and Unexecuted Draft of Agreement to Sale found in Soft Copy from Third Party Premises: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the addition under Section 69A of the Income Tax Act, 1961 cannot be made on the basis of an unsigned and unexecuted draft of an agreement to sale found in soft copy from the third-party premises.

The Departmental Representative supporting the assessment order submitted that the Commissioner of Income Tax (Appeal) [CIT(A)] has erred in law and on facts of the case by deleting the addition of Rs. 1.50 Cr. Made as unexplained money under Section 69A of the Income Tax Act by ignoring the established facts that seized document found during search has permissibility as per the provision of presumption under Section 292C of the Income Tax Act.

The Authorized Representative submitted that the provision of Section 69A of the Income Tax Act cannot be invoked in a vacuum only on the standalone basis of an unsigned document found from the computer of the document writer which was never acted upon either by the assessee or by the other party.

It was further submitted that the unsigned agreement to sale (ATS) seized in the soft copy from the computer of a deed writer who was a third party and the existence of the same was denied by both parties to it including the assessee. And the said ATS never culminated into a complete transaction by execution of the registered sale deed and the appellant never sold the property.

The Two-member bench comprising of Chandra Mohan Garg (Judicial member) and Pradip Kumar Kedia (Accountant member) held that the CIT(A) was right in holding that no addition can be made and sustained only on the basis of an unsigned unexecuted draft agreement to sale found from the premises of third party i.e. deed writer without any other collaborative evidence supporting the factum of receipt of cash by the assessee under the alleged document. Thus, the appeal of the revenue was dismissed.

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