INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Additions not based on incriminating material -

Assessee-company was in real estate business. AO required assessee to furnish complete details of the units sold in its 'Shiromani' Project. Based on information submitted by assessee, AO made enquiries under section 133(6) from all the flat purchasers and the summarized details of all the flats sold during the year and the information was set out in assessment order. AO concluded that assessee was regularly involved in accepting part of the consideration for sale of flats in cash and accordingly held that assessee-must have received similar cash component on sale of other units and car parks from the remaining purchaser of the flats in its Shiromani Project. Extrapolating the on-monies @ 46.67% of the declared sale consideration and Rs. 6,00,000 on sale of each car park, AO made an addition of Rs. 47,20,09,864 by way of receipt of undisclosed 'on-monies' (cash) on sale of flats and car parks in the relevant assessment year 2013-14. CIT(A) held that Revenue was able to find only one instance of payment of on-money (cash). Held: In the case of unabated assessments of an assessee, no addition is permissible in the order under section 153A unless it is based on any tangible, cogent and relevant incriminating material found during the course of search qua the assessee and qua the assessment year. The statement given by SB under section 132(4) had evidentiary value and strengthens the assessee's case that Pages 2 & 3 was of the document ID Marked RB/12 relied upon by AO to justify the impugned addition were merely rough notings which was just an estimate and it cannot be a cogent basis to draw adverse inference against the appellant. Upon going through the response to the RTI query, when SB had stated that these documents, i.e., RB/12 were rough calculations, the AO of M/s. SB HUF accepted his submission and neither drew any adverse inference nor made any addition on account of alleged cash payments in its hands as unexplained expenditure. Assessee had also placed the copy of the sale deed, dated 30-6-2014 along with its ledger at Pages 340 to 380 of the convenience compilation from which it was evident that all the transactions involving receipt of payments in lieu of sale of flat and car park to M/s. S B HUF was conducted through proper banking channel without there being any involvement of cash. For the reasons discussed in the foregoing, the Tribunal therefore held that documents ID marked RB/12 could not be construed to be 'incriminating' in nature qua the assessee for drawing adverse inference and so it could not be considered as a basis for making any addition against the assessee.

Followed:CIT v. Kabul Chawla reported in (2016) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC)Relied:Pr. CIT v. Salasar Stock Broking Ltd. G.A. No. 1929 of 2016 ITAT No. 264 of 2016, dated 24-8-2016, CIT v. Veerprabhu Marketing Ltd. (2016) 73 Taxmann.com 149 (Cal HC), Pr. CIT v. Subhash Khattar ITA No. 60 of 2017, dated 25-7-2017, Krishna Kumar Singhania & Ors. v. Dy. CIT IT(SS) Nos. 106 to 112/Kol/2017, dated 6-12-2017 : 2018 TaxPub(DT) 200 (Kol-Trib) and Rajat Minerals (P) Ltd. v. Dy. CIT (2020) 114 Taxmann.com 536 (Ranchi-Trib) : 2020 TaxPub(DT) 483 (Ranchi-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 to 2017-18

INCOME TAX ACT, 1961

Section 68 Section 69C

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