The Income Tax Appellate Tribunal (ITAT), Chennai deleted addition as no incriminating material found in respect of on-money receipt.
A search under section 132 of the Income Tax Act, 1961 was conducted at the residential premises of the assessee at Chennai. During the course of search, unaccounted cash of ₹.10 lakhs has been seized. Subsequent to the search, the assessee, Vijay M Pai file has been centralized to Central Circle I(4) vide Commissioner of Income Tax, Chennai IV, Chennai Notification No. 11/2010-11 dated 28.03.2011.
Notice under section 153A of the Income Tax Act dated 24.07.2012 was issued to the assessee to file the return of income for the assessment year 2010-11. The assessee filed the return of income in response to the notice issued under section 153A of the Act only on 25.10.2012 admitting income of Rs.1,64,49,440.
Subsequently, the Assessing Officer has issued notice under section 143(2) of the Act and in response to the notice, the assessee has filed details. After examining the details and discussions with the assessee’s AR, the Assessing Officer has completed the assessment by recomputing the long-term capital gains. The AO held that the assessee has not admitted the on-money payment of Rs 5,68,75,000 as capital gain and accordingly, the assessment was completed.
The Commissioner of Income Tax also concurred with the decision of the AO. Hence the assessee preferred an appeal before the Tribunal.
A Division Bench consisting of V. Durga Rao, Judicial Member and G. Manjunatha, Accountant Member observed that “The only documentary evidence available with the Assessing Officer is that after conducting search, the purchaser has accepted in her sworn statement in respect of on-money payment. Therefore, the Assessing Officer has made addition in the hands of the purchaser, Pramila. Simply because the purchaser has admitted on-money payment is not sufficient. Particularly, in this case, a search was conducted and no incriminating material has been found in respect of on-money receipt. Therefore, in our opinion, addition cannot be made in the hands of the assessee.”
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