Income Tax Addition u/s 69B of Income Tax Act made on basis of Cogent Documentation: ITAT Dismisses Income Tax Appeal [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that since the document on the basis of which addition of Rs.2 crores is sought to be made is not a cogent document, the Tribunal upheld the order of Commissioner of Income Tax (Appeals) [CIT(A)] in deletion of income tax addition under Section 69 B of the Income Tax Act,1961 .

The assessee in this case is Gammon Construction Pvt.Ltd. During the assessment proceeding the assessee submitted that assessee is not at all party to the document and the same was fabricated document.

Considering the submissions of the assessee, Assessing Officer (AO) noted that assessee company filed bank statements to prove that they have not received any payment by way of cheque or through banking channel. Hence, AO dropped the issue of cheque cleared/debited from the bank account but not the addition for cash payment of Rs.2 crores.

Hence, the payment of Rs.2,00,00,000/- made in cash is treated as amount of investment towards purchase of land not fully disclosed in books of accounts and added to the income of the assessee company under Section 69 B of the Income Tax Act.

Aggrieved by the order the assessee appealed before the CIT(A), which  deleted the addition by noting that AO has put the onus on assessee to prove that the said cash transaction has not taken place. 

The Revenue being aggrieved by the order filed an appeal before the Tribunal. The Departmental representative (DR) for the Revenue Vivek Kumar Upadhyay , relied upon the order of Assessing Officer.     

The Authorised representative of the assessee Sushil Chadha, supported the finding of the CIT(A) and further submitted that document being relied upon by the Revenue is a photocopy and an unsigned one.       

The Bench comprising of Shamim Yahya, Accountant Member and Anubhav Sharma, Judicial Member observed that the document on the basis of which addition of Rs.2 crores is sought to be made is not a cogent document, the same is unsigned photocopy on which the addition was made for the impugned amount.     

Furthermore, AO instead of proving that cash transaction took place rather put the burden on the assessee to prove that the said transaction did not take place. Therefore the Tribunal found that the CIT (A) has passed a correct order which does not require any interference on our part. Accordingly upheld the order of the CIT(A). Hence the appeal filed by the Revenue was dismissed.   

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates