In another ruling against actress Priyanka Chopra, the Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that the actress is liable to pay tax for the purchase of property in respect of cash payment made for the property at Bandra.
In another two orders, the bench had confirmed additions against the actress.
During the course of assessment proceedings the Assessing Officer (AO) conducted a search and seizure action under section 132 of the Income Tax Act 1961 and found that the assessee has paid an amount of Rs.10 lakhs for purchase of property in respect of cash payment made for property at Bandra and the same was escaped from the income of the assessee which she declared earlier.
AO further observed that at the time of search Smt. Madhu Chopra mother of the assessee had admitted that she had spent Rs.10 lakhs in the purchase of property to clear encumbrances on the property as the seller bank is only a Power of Attorney holder and the actual owner was a proprietor. However, in the retraction statement, she stated that the said property was purchased from Memon Co-op. Bank Ltd., and for the purchase of such property they have withheld Rs.10 lakhs for non-clearance of certain terms of the agreement and also submitted that outstanding payment is still shown as the liability.
However, the AO was not satisfied with her submission and accordingly, he added the same to the income of the assessee by holding the fact that she has made the cash payment to the tune of Rs.10 lakhs for the purchase of Bandra property out of the books.
On appeal CIT(A) also upheld the order of the AO and confirmed the addition made by him.
Aggrieved by the assessee approached the tribunal on appeal against the order passed by the CIT(A).
While analyzing the above-narrated facts tribunal bench comprising of Judicial Member Sandeep Gosain and Accountant Member Shameem Yahya jointly upheld the decision of the lower authorities. The bench observed that when the assessee and her mother were confronted with the incriminating document found during search, they have accepted cash payment for the Bandra property and in the statement mother of the assessee stated that she has spent Rs.10 lakhs in purchase of the property to clear encumbrances on the property, as the bank is only a PAO holder and the actual owner was a proprietor named as Mr. Shaik Ismail. Therefore it is clear that the amount was paid in cash to clear encumbrances.
The division bench further observed that the addition made by the AO is based on the incriminating material found during the search pursuant to which the assessee’s mother and assessee herself gave a statement accepting the investment of Rs.10 lakhs out of books in clearing the said property to clear encumbrances. Hence the bench also confirmed the said addition and held that the assessee is liable to pay tax for the purchase of the property.
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