The Tax Publishers2020 TaxPub(DT) 3935 (Del-Trib)

INCOME TAX ACT, 1961

Section 153C

Where AO made addition on account of unaccounted cash receipt on the basis of some cancelled receipt, which the Investigation Wing did not consider proper to confront with the assessee, therefore, in absence of any other corroborative material before the AO, he was not justified in making the addition on the basis of such cancelled money receipt.

Search and seizure - Assessment under section 153C - Addition on account of unaccounted cash receipt for sale of property - Addition based on cancelled money receipt

On basis of some sheet of paper seized during course of search in case of a person named 'S', assessee was confronted with the fact that he received cash amount of Rs. 11 lakhs and Rs. 50 lakhs in respect of sale of a property. Assessee stated that he did not receive any money other than Rs. 8.42 lakhs as per agreement to sell the said property. However, to buy peace of mind, the assessee agreed to surrender the amount of Rs. 11 lakhs and, accordingly, filed return of income. According to AO, merely because the assessee denied to have received the amount of Rs. 50 lakhs, the same could not be accepted. Therefore, he made addition of Rs. 50 lakhs on account of unaccounted cash receipt for sale of property, which was upheld by CIT (A).Held: During course of examination by Investigation Wing, assessee was confronted with a receipt for Rs. 11 lakhs and he was never asked for any further amount received by him. It was only during the assessment proceedings that the AO confronted the assessee regarding the receipt of Rs. 50 lakhs. Therefore, in absence of any material before him, he could not have made the addition since the so-called Rs. 50 lakhs was a cancelled receipt, which the Investigation Wing did not consider proper to confront with the assessee. Further, although complete address of the payer, i.e., 'S' was available in the cancelled money receipt, the AO never bothered to summon him to find out the authenticity of the said receipt. Therefore, as the Investigation Wing after considering the cancelled receipt never confronted the assessee regarding the receipt of Rs. 50 lakhs, therefore, in absence of any other corroborative material before the AO, he was not justified in making the addition on the basis of such cancelled money receipt. Accordingly, said addition was deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

IN THE ITAT, DELHI BENCH

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