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2018 (2) TMI 51 - AT - Income TaxReopening of assessment - payment of “on money” was made by the assessee for purchase of flats - Held that:- The reassessment proceedings initiated by the A.O beyond a period of four years from the end of the assessment year, without making a mention in the ‘reasons to believe’ that the income of the assessee chargeable to tax had escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for framing of assessment, cannot be sustained and on the said count too is liable to be vacated. We are of the considered view that there is substantial force in the contention of the ld. A.R that mere admission of the amounts recorded in the pen drive as the additional income by Sh. Niranjan Hiranandani, falling short of any such material which would inextricably evidence payment of “on money” by the assessee would not lead to drawing of adverse inferences as regards the investment made by the assessee for purchase of the property under consideration. A strong conviction that the very fact that the consideration paid by the assessee for purchase of the property under consideration when pitted against the ‘market value’ fixed by the stamp valuation authority is found to be substantially high, further fortifies the veracity of the claim of the assessee that his investment made towards purchase of the property under consideration was well in order. We are of the considered view that though the material acted upon by the department for drawing of adverse inferences as regards payment of “on money” by the assessee formed a strong basis for doubting the investment made by the assessee for purchase of the property under consideration, but the same falling short of clinching material which would have irrefutably evidenced the said fact, thus, does not inspire much of confidence as regards the way they have been construed by the lower authorities for drawing of adverse inferences in the hands of the assessee. the adverse inferences drawn by the A.O as regards payment of “on money” of ₹ 2.23 crore by the assessee for purchase of Flat No. 2501 from M/s Lakeview Developers are based on of premature observations of the A.O, which in the absence of any clinching evidence cannot be sustained. - Decided in favour of assessee.
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