The Tax Publishers2019 TaxPub(DT) 8340 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 153A

As per section 292C if any document was found in possession of assessee, he has to explain that it is not belonging to him. In the instant case though assessee denied that he had not advanced the amount, but documentary evidence by way of promissory notes and receipts from borrower showed that assessee had advanced the amount. That apart nobody sign a promissory note without receiving the money. Also, borrower had deposited original title deeds relating to properties with assessee with an intention to create equitable mortgage thereof and for securing impugned advance amount of Rs. 45 lakhs. Thus it was proved beyond doubt that assessee had paid Rs. 45 lakhs to 'N' on receipt original title deeds and since assessee had failed to disclose the amount of Rs. 45 lakhs in return of income, AO was justified in making addition thereof.

Search and seizure - Assessment under section 153A - Addition on account of unexplained advances -

During search and seizure at assessee's premises pro-notes to the extent of Rs. 45,00,000 and also receipts in respect of said amount received by one N were found and seized. Assessee denied that he had not advanced the amount, but documentary evidence by way of promissory notes and receipts from borrower showed that assessee had advanced the amount. That apart, nobody signs a promissory note without receiving the money. Accordingly, AO made addition on account of undisclosed advances/investment.Held: As per section 292C if any document was found in possession of assessee, he has to explain that it is not belonging to him. In the instant case though assessee denied that he had not advanced the amount, but documentary evidence by way of promissory notes and receipts from the borrower showed that assessee had advanced the amount. That apart nobody sign a promissory note without receiving the money. Also, borrower had deposited original title deeds relating to properties with assessee with an intention to create equitable mortgage thereof and for securing impugned advance amount of Rs. 45 lakhs. Thus it was proved beyond doubt that assessee had paid Rs. 45 lakhs to 'N' on receipt original title deeds and since assessee had failed to disclose the amount of Rs. 45 lakhs in return of income, AO was justified in making addition thereof.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2007-08 to 2009-10

INCOME TAX ACT, 1961

Section 69

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT