The Tax Publishers2020 TaxPub(DT) 0567 (Visakhapatnam-Trib)

INCOME TAX ACT, 1961

Section 68

Where loose sheet does not indicate whether it was related to Navaratna Estates (assessee_) or not, it does not bear the date, address, name and there was no signature on the loose sheet therefore, the documents were to be taken as a dumb documents which cannot be inferred against the assessee firm AO did not make any cross verification or enquiry to establish that Navaratna Estates (assessee) had received on money the voucher is generally used for payment but not for receipt.

Income from undisclosed sources - Addition under section 68 - Unaccounted on money receipt in land transaction -

During the course of search under section 132 in the residence of Shyam, three vouchers with the dates marked as 14/7, 6/7 and 14/1 were found seized as page No. 12 to 14 of Annexure MKS/2. The AO found that name appearing in the voucher sri Nageswara Raio was the same person to whom the land was sold on 14-7-2015 by Navaratna estates (asessee). The AO viewed that the vouchers were related to the sale of land of Navaratna Estates on 14-7-2015. Sri Shyam stated that the vouchers were related to the transactions of Sri Nageswara Rao and he further stated that sale consideration was Rs. 50,00,000 was received by cheque and the registration charges were Rs. 4,50,100 and other charges were borne by the purchaser. He also stated that no unaccounted money was involved in this transaction. Thus, AO held that the sum of Rs. 51,75,650 consisting of Rs. 50,00,000 plus Rs. 1,75,650 mentioned in page No. 14 dated 14/1 was treated as on money received for sale of land on 14-7-2015, accordingly AO brought to tax the same as undisclosed income.Held: The loose sheet does not indicate whether it was related to Navaratna Estates (assessee) or not, it does not bear the date, address, name and there was no signature on the loose sheet. Therefore, the documents were to be taken as a dumb documents which cannot be inferred against the assessee firm. With regard to the assessee firm, the assessee had explained that the transaction was related to the sale of land to Nageswara Rao and explained in the statement recorded on 13-1-2016 by Shyam that no excess money was received. No other evidence was brought on record by the AO to controvert the statement given by the Shyam. Since the document was found in the residence of Shyam, presumption was available to the department to hold that the contents of the document were related to Shyam. The AO did not make any cross verification or enquiry to establish that Navaratna Estates had received on money. The voucher is generally used for payment but not for receipt. There was, therefore, no reason to interfere with the order of the CIT(A) and the same was thus, upheld.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16 & 2016-17

INCOME TAX ACT, 19561

Section 153C

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