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2019 (3) TMI 265 - HC - Income TaxUndisclosed investment - search u/s 132 - addition on the assessee with respect to a sale agreement of a property in Menonpara at Palakkad - materialization of agreement - non disclosures in cash flow statement - HELD THAT:- The amount having not figured in the cash flow statement, we are of the opinion that necessarily, an addition has to be made as an undisclosed investment; which if the transaction has not materialised would have been returned to the assessee and would have been invested elsewhere. No reason to accept the contention of the assessee that part of the agreement being exchange of a building at Akathethara, had actually taken place. If the exchange was part of the transaction of sale of the property at Menonpara, the assessee will have to explain why the further sale and conveyance did not take place. When the exchange is said to be an inextricable part of the agreement, the assessee cannot resile from that and take a different contention. In any event, we have already found that how the transaction concluded is not material since the existence of unaccounted cash in the hands of the assessee is established. The extracted portion of the specific answer to the question put by the Officer and recorded under Section 132(4) that the assessee agreed to having paid ₹ 50 lakhs in cash. It is also an admitted fact that there were two others, Babu and Hussain, involved in the property transaction; all of whom figured in the agreement also. Hence, going by the agreement recovered and the specific admission of the assessee that he had paid ₹ 50 lakhs in cash, the same has to be made an addition. In such circumstances, we modify the order of the Tribunal to the effect that the addition has to be confined to ₹ 50 lakhs and not ₹ 78 lakhs. - Decided partly in favour of assessee
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