No Evidence to prove Nature and Source of Property: ITAT upholds Income Addition u/s 69 A [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has upheld the addition under section 69 of the Income Tax Act,1961 in the absence of evidence to prove the nature and source of property.

M/s. Shivram Consultants India Pvt. Ltd, the assessee company filed its return of income for the A.Y. 2011-12 under section 139(1) of the Income Tax Act, 1961 on 30.09.2011 declaring a total taxable income of Rs.10,62,27,410/-.

The return of income was later revised on 31.03.2012 under section 139(5) of the Income Tax Act, 1961 declaring a total income of Rs.10,62,27,410/-. Based on information received from the Investigation Wing the case of the assessee-company was reopened under section 148.

The assessee electronically filed its return of income declaring a total income of Rs.10,62,27,410/-. The AO held that Rs.4 crores was received in cash by the assessee-company as income under section 69A of the Income Tax Act, 1961 and made the addition. The CIT(A) disallowed the addition made by the AO. 

It was submitted that during the course of the search on AKN Group of cases, a hard disk was found at the residential premises of Shri Naresh Gupta, who is a Deed Writer and an Advocate by profession. From the data recovered from the hard disk it was found that during A.Y. 2011-12, the assessee had received Rs.4 crores in cash from Shri Munish Arora on account of the sale of a property.

 It was submitted that the data retrieved from the hard disk matched with the details of the sale deed furnished by the assessee as the name of purchaser and seller matched with the Draft Deed and the actual Sale Deed.

It was alleged by the assessee that the addition was made based on a draft cash receipt which is undated, unexecuted and unsigned and it has no evidentiary value. He further submitted that since the assessee was not found to be in possession or ownership of money amounting to Rs.4 crore, Section 69A does not apply.

A Coram Shri Anil Chaturvedi, Accountant Member and Shri Anubhav Sharma, Judicial Member observed that the AO noted that the Draft Deed retrieved from the hard disk showed that the major constituents like the Vendor, Vendee, the name of the shareholders and their shareholdings, the sale consideration was exactly similar in the Draft Deed and original Sale Deed executed by the assessee.

 The material evidence for the part of the sale consideration of Rs.5 crores along with the date of the cheque, its number and the bank on which it was drawn matched with the Draft Agreement cannot be simply ignored. While allowing the appeal of the revenue, the Tribunal upheld the addition under section 69 A of the Income Tax Act,1961.

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