ITAT deletes Addition made u/s 69 of Income Tax Act without considering Evidence related Agreement of Sale [Read Order]

The two member bench of Delhi Income Tax Appellate Tribunal ( ITAT ) deleted the addition made under Section 69 of the Income Tax Act, 1961 without considering the evidence related to agreement of sale.

The Assessee, Vipul Gupta derives income from salary, commission and also income from other sources. When a  Search and seizure operation under section 132 of the Act was carried out in the case of M/s. Shubhkamna Buildtech Pvt. Ltd. on 09.10.2013. Proceedings under section 153C of the Income Tax Act were initiated. During the search  the AO found certain agreement related to sale of land area of 300 sq. metres and the total consideration mentioned in the agreement is Rs.27,00,000/-, Shri Vipul Gupta made payment of advance of Rs.24,00,000/- through cheque nos. 893987 and 893086 on 20.03.2012.

Thereafter the assessment was completed and assessed at Rs.1,59,64,810 as against income of Rs.33,64,810 declared by the appellant. While assessing the income, the assessing officer made an addition of Rs. 1,26,00,000 under section 69 of the Income Tax  Act on the alleged ground that the said amount represents unexplained investment made by the assessee.

Aggrieved, the assessee filed an appeal before the CIT( A ) who confirmed the addition.Accordingly the assessee filed appeal before the tribunal.

During the adjudication Tarun, the counsel for assessee  submitted that  the Assessing officer made the addition based on the loose papers  found during the search proceedings.

Amit Katoch, Counsel for Revenue supported the order of lower authorities.

The tribunal observed that the AO has not even made any enquiry about the value of the property purchased by the assessee. Since the document relied as incriminating material to make addition in assessment under Section  153C of the Income Tax  Act, is not one which is kept in ordinary course of business, and the author of the document is not identified and disclosed to the assessee and the transaction is not verified by any enquiry, then only on the content of the documents the addition is not justified.

After reviewing the facts the ITAT bench of Astha Chandra (Judicial Member) and Dr. B. R. R. Kumar(Accountant Member)  deleted the addition made under Section 69 of the Income Tax Act  without considering the evidence related to agreement of sale.

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