2021 (5) TMI 664 - ITAT PUNE - Income Tax

Head Note / Extract:
Undisclosed investment in the purchase of property in the form of payment of on-money consideration - on-money over and above stated consideration of the sale deed - addition made on mere statement made u/s 132(4) - HELD THAT:- In the present case, the additions are made merely based on statement of third parties without bringing on record any corroborative evidence. No such addition can be made. As held by the Hon’ble Supreme Court in the case of CIT vs. Daulatram Rawatmull,[1964 (3) TMI 14 - SUPREME COURT] even the circumstances raises suspicion, suspicion cannot take place of the evidence. That apart, the contentions of the appellant i.e. the assessee that the vendors had declared additional income only in order to escape the rigouts of the law to claim the benefits u/s 54 of the Act remains uncontroverted. Therefore, we are of the considered opinion that the fact that the vendors had disclosed additional income on account of sale of land as additional income before the Settlement Commission cannot form any basis for the addition in the hands of the appellant herein. Thus we are of the considered opinion that the Department had failed to establish that the appellant had paid any on-money over and above stated consideration of the sale deed to the vendors of the property at the time of purchase of Savargaon land. Therefore, no addition can be made on the mere statement given by the third party. Therefore, the orders of the lower authorities are reversed, we direct Assessing Officer to delete addition for the assessment year under consideration. Addition on-money consideration at the time of purchase of the lands - HELD THAT:- It is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of “dumb documents” having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondentassessee and its group companies, no material whatsoever was seized and found indicating payment of on-money consideration at the time of purchase of the lands The Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO [1981 (9) TMI 1 - SUPREME COURT]held that the capital gains is intended to tax the gains of assessee not what an assessee might have gained and what is not gained cannot be computed as gain and the assessee cannot fastened with the liability on a fictional income. Similarly, the Hon'ble Supreme Court in the case of CIT Vs. Shivakami Co. (P.) Ltd. [1986 (3) TMI 2 - SUPREME COURT] held that unless there is evidence that more than what was stated was received, no higher price can be taken to be the basis for making addition. In the present case, we do not find any material on record suggesting the payment of onmoney consideration at the time of purchase of land by the respondentassessee and its group companies. Therefore, it can be said that the Assessing Officer had failed to bring on record any reliable evidence to prove that the respondent assessee had made investment in purchase of lands over and above the stated consideration. Therefore, we do not see any perversity in the findings of the ld. CIT(A) in deleting the addition based on the seized material. The findings given by us in relation to the appeal filed by the assessee for the same year also equally holds good in respect of present appeal and therefore, we do not find any merit in the appeal filed by the Revenue and we dismiss the appeal. Accordingly, we dismiss the appeal filed by the Revenue.