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2024 (4) TMI 734 - AT - Income TaxAddition u/s 69 - AO made addition merely on the reasoning that the payment of consideration was not disclosed - assessee before the CIT(A) contended that the lands purchased by it through sale deed was not disclosed in the books as the consideration was not paid due to dispute - CIT(A) after considering the facts in totality confirmed the addition made by the AO - HELD THAT:- There is no dispute that the land in question was purchased by the assessee much earlier through the sale deed and payment for the same was made subsequently. Generally, such transactions are against the prevailing market forces/ practices. Under standard conditions, the buyer needs to make the payment to the vendor on or before the registration of the sale deed. There can always be exceptions to such kind of prevailing market practices but the same can be accepted if there is some reasonable justification. We note that in the case of CIT versus Lubtec India Ltd [2007 (7) TMI 281 - DELHI HIGH COURT] has observed that the provisions of section 69C of the Act are applicable with respect to the expenditures which have actually been incurred by the assessee and the assessee fails to offer any explanation about the source of such expenditure. From the judgement, it’s transpired that actual expenditure, the source of which has not been explained, should have been incurred for attracting the deeming provisions provided u/s 69 of the Act. In the present case there were several justifiable factors for the delayed payment against the purchase of land. These justifiable factors have been elaborated in the preceding paragraph and the same has not been doubted by the revenue authorities. Thus, in such facts and circumstances, we are of the view that the addition cannot be made in the hands of the assessee merely on the reason that the assessee got the property transferred through registered sale without making the payment to the vendor. There was no document brought on record by the Revenue suggesting that the assessee has incurred the expenses in connection with the purchase of land in cash so as to apply the provisions of section 69 of the Act. As such, the provisions of section 69 of the Act cannot be attracted in the light of the discussion held in the case of Lubtec India Limited. (supra). Thus addition directed to be deleted - Decided in favour of assessee.
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