The Tax PublishersITA No. 243/Viz/2019
2021 TaxPub(DT) 0047 (Visakhapatnam-Trib) : (2020) 084 ITR (Trib) 0423

INCOME TAX ACT, 1961

Section 68

Addition made by AO on account of unexplained land advances received back by assessee could not be sustained as it was a fact that though the names of the land owners who wanted to sell the land was not mentioned, but the fact remains that the mediator arranged the refund. Therefore, it cannot be disbelieved that the identity of the parties were not proved.

Income from undisclosed sources - Addition under section 68 - Land advances received back by assessee - Identity of parties proved

Assessee gave advance for acquisition of agricultural land from three farmers through an Advocate. On verification of the land records, the Advocate expressed his opinion that law does not permit a person to purchase those lands and thus arranged refund amount to the assessee. AO made addition of said transaction as unexplained land advances received back by assessee on the ground of failure to discharge the burden by showing the identity of the person and capacity of such person and genuineness of the transaction. Held: It was a fact that assessee has advanced the amount and also a fact that transaction was not materialized because the legality of the agricultural land was the issue. It was also a fact that mediator arranged repayment of the amount. Though the names of the land owners who wanted to sell the land was not mentioned, but the fact remains that the mediator arranged the refund. Therefore, it cannot be disbelieved that the identity of the parties were not proved. Thus, addition made was required to be deleted.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2009-10



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