Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 1047 - AT - Income TaxUnexplained investment u/s. 69B - evidence gathered during the course of search and post-search investigation coupled with statements recorded from Directors of the seller company shows that the appellant company had paid additional consideration on or before the registration of the property - HELD THAT:- As observations of the AO in light of date of sale deed executed by the parties and subsequent statement of Director of vendor company cannot proceed on the premises of justifying the Revenue’s attempt in asking for source for the additional consideration paid. It is common in many cases that property has been registered by accepting part consideration and remaining consideration has been paid in installments, after the date of registration and it all depending upon the arrangements between the parties and other issues like disputes, if any on the properties. It is an exceptional case whereby dispute relating to the subject property is resolved only after registration of the documents including the payment of additional consideration. Therefore, from the combined reading of all the answers given in the sworn statement of the Director of the appellant company, it is abundantly clear that said additional consideration has been paid and being accounted in the assessment year 2013-14. Shortfall for the source for payment of additional consideration is already offered for taxation in the assessment year 2013-14, in the hands, Director of the appellant company. Therefore, in our considered view, the reasons given by the Assessing Officer to allege that the arguments of the appellant with regard to substantiate payment to the vendor company, in light of affidavit and confirmation letter from the Director of the vendor company is an afterthought is devoid of merits and thus, rejected. AO has made additions solely on the basis of statement of Directors of the seller company, but fact remains that said statement cannot be relied upon for the simple reason of non-furnishing of the full version before passing of the re-assessment order. There is no iota of any evidence with regard to details of payments, even though he had admitted that additional consideration of Rs. 12 crores has been received for sale of property. The offer of the additional consideration received by the seller in the income tax returns filed for the assessment year 2008-09, by virtue of provisions governing computation of capital gains would not alter the recognition of payments by the appellant during the assessment year 2013-14 in the hands of appellant company, especially when amounts were paid to resolve dispute, which was pending after the execution of sale deed and also stated on oath in the statement which should be considered as sacrosanct. Reporting of additional consideration by the seller either as capital gains or as other income because of the search conducted in the month of March 2012 in the assessment year 2008-09, so as to justify and to link the additional consideration to the sale deed executed for several reasons to come out from the rigors of the Income Tax Act. Presumption of disputed sum being paid during the assessment year under consideration is wholly unjustified especially in view of the settlement of dispute in the subsequent assessment years. Assessing Officer should not have read the statement recorder in isolation and combined reading of the statement and facts emerging there from would establish the fact that the transactions is completed only in the assessment year 2013-14 and the appellant has established the source for balance consideration - CIT(A), without appreciating relevant facts simply sustained additions made by the AO. Thus, we set aside the order passed by the ld. CIT(A) and direct the Assessing Officer to delete additions made towards additional consideration paid for purchase of property as unexplained investment u/s. 69B of the Act. Decided in favour of assessee.
|