No Evidence of Cash Payments for Demand Drafts to 34 Parties: ITAT Upholds Deletion of Additions by CIT (A) u/s 68 of Income Tax Act [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of additions made under Section 68 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals) (CIT(A)), citing no evidence of cash payments for demand drafts to 34 parties.

Briefly fact of the case is that the assessee is a private Limited company engaged in the business of Real Estate Development. In furtherance of its objects the assessee received advance of Rs.29,201,930/- from 34 parties. These amounts were received as booking advances towards booking of residential unit in the project Antriksh Square at Jaipur, Rajasthan

The Assessing Officer (AO) asked the assessee to produce five persons namely Manish, Sh. Swarn, Rampal, Shakti and Vijay Singh for verification. The assessee sought permission to produce other 5 persons and the AO accepted the prayer of the assessee and thereafter the assessee produced Chattar Singh, Swarn, Jitender, Bimla and Munni Devi. Their statements were recorded supported by the evidence which were discarded by the AO who completed the assessment by making an addition of Rs.29202930/- u/s. 68 of the Act.

Aggrieved, the assessee challenged the addition before the CIT (A) and explained that the advance received for the project Antriksh Square was received in demand draft from 34 parties towards booking of residential flats at Jaipur. It was further explained that due to recession and delay in the completion of the project 13 customers issued legal notice to the assessee claiming refund of the booking advance.

The Tribunal consisting, Saktijih Dey ( Vice President ) and N.K.Billaiya ( Accountant member) observed that no evidence has been brought on record to show that the assessee has purchased the demand drafts by paying cash to 34 parties. The AO has also not brought any evidence to demolish the affirmations made in the affidavits of the persons who have given advances. It appeared that the AO has made the additions on suspicion, conjecture and surmises without any evidence and the CIT (A) has deleted the impugned additions on proper appreciation of facts. Thus, the ITAT does not find any reason to interfere with the findings of the CIT (A).

To Read the full text of the Order CLICK HERE

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