The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench quashed the addition of alleged unexplained investment as the assessee discharged the onus of explaining transactions.
The Revenue’s sole substantive grievance that the CIT(Appeals) has erred in law in reversing the Assessing Officer’s action adding the alleged unexplained investment amount of Rs.1.90 Crores.
The CIT(A) held that the assessee has discharged the onus of explaining the transaction which were attributed to M/s. Suvarnabhoomi Developers Pvt. Ltd. (SDPL) where he is a Managing Director (MD). As per the information brought on record, it clearly indicates that the payments relate to acquisition of land and such transactions were not taking in the name of the assessee as an individual and as indicated the payments are purely relatable to the transactions of purchase of lands. Hence, based on facts of the case, it is reasonable to hold that there is no basis to presume that the said amounts of Rs.1,90,00,000/- were stated to be paid by the assessee. Hence, the addition of Rs.1,90,00,000/- held to have no legs to stand and as such the addition is ordered for deletion and the ground related to the issue are treated as allowed.
The departmental representative vehemently supported the Assessing Officer’s action that he had rightly made the impugned unexplained investment addition in the assessee’s hands-on account of the incriminating material found during the course of search in case of M/s. Suvarnabhoomi Group. And that the CIT(Appeals) has erred in law and on facts in deleting the same.
The coram of Lakshmi Prasad Sahu and S.S.Godara the assessee, Sri ruled that Meka Srinivas has already proved himself to have acted as a Managing Director (MD) of M/s. SDPL who was engaged in corresponding business transactions in real estate. And also that the seized document has nowhere indicated the assessee’s name at all leading to the inference that it was he himself in an individual capacity and not the company who had carried out all the real estate transactions leading to impugned unexplained investment addition in the issue.
“We thus find no reason to restore the assessment findings assessing the sum in the issue of Rs.1.90 Crores in assessee’s hands. The CIT(A)’s conclusion under challenge is upheld,” the ITAT said.
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