Survey cannot be based only for treating on-money when purchaser as well as registered sale documents state amount of purchase clearly without contradiction: ITAT deletes addition [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal held that the survey cannot be only based for treating the said amount as on-money and when the purchaser as well as registered sale documents stating the amount clearly.

The assessee raised the appeal on the grounds that the learned CIT(A) grievously erred in confirming the addition inspite of the fact that appellant was not provided with sufficient and reasonable opportunity and that the CIT(A) grievously erred in law, and on facts, in confirming the addition of Rs.21,58,000/.

The return of income was field on 30.09.2014 declaring total income of Rs.7,52,410/- and agricultural income of Rs.6,16,315/-. The same was processed under Section 143(1) of the Income Tax Act, 1961. The Assessing Officer observed that in this case information was received from Deputy Director of Income Tax (Investigation) and as per the documents found, the assessee was in receipt of on-money on sale of two shops at Radhanpur. Therefore, show cause notice dated 14.03.2016 was issued to explain as to why the on-money received of Rs.26,00,000/- should not be added to the total income of the assessee treating the same as unaccounted. After taking the reply of the assessee and the details, the Assessing Officer made addition of Rs.21,58,000/- as unaccounted sale proceeds.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. Thus the assessee appealed before the tribunal.

After hearing both the parties, the tribunal noted that the entire revenue’s base on addition is of the loose papers found in the diary as well as statements of the partners but the said statement was retracted. In fact, it was not retracted but the statement given at the time of survey did not reveal that there was on-money transaction in respect of sale of shop.

The single member bench consisting of Suchitra Kamble held that From the affidavit of the partners as well as from the registered document of sale deed, it clearly indicates that the purchase price of the shop was Rs.2.21,000/- only. Creating doubt when there is no doubt on papers as well as to that of the conduct of the parties cannot be the basis for making addition. Thus, the Assessing Officer as well as the CIT(A) was not right in making addition in respect of unaccounted sale proceeds. Thus the appeal was allowed. 

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates