TMI Blog2014 (4) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) was justified in deleting the addition made by the AO. It is ordered accordingly.- Decided against revenue. - ITA No.1366/Bang/2012, C.O. No.67/Bang./2013 (Arising out of ITA No.1366/Bang/2012) - - - Dated:- 11-4-2014 - SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For the Department : Shi Biju M.K. (DR) For the Assessee : Shri K. Sheshadri, CA ORDER Per George George K. J.M. 1. This appeal of the Revenue as well as the Cross Objection of the assessee is directed against the order of the CIT (A)-VI, Bangalore, dated 30.7.2012. The relevant assessment year is 2008-09. 2. The Revenue has, in its Memorandum of Appeal, raised a solitary issue, namely, that the CIT (A) had erred in deleting an addition of ₹ 3,39,22,177/- made by the Assessing Officer. 3. The assessee had, in its Cross Objections, contested that, (i) the assessment order u/s 147 r. w. s. 143(3) was not valid in law and requires to be cancelled; (ii) no notice u/s 143(2) was issued and failure of issuance of said notice is not curable u/s 292BB; (iii) and that the order of the AO was a non-speaking order etc., 4. As the Revenue s appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income, admitting a total income of Re. NIL. During the course of assessment proceedings u/s 147 of the Act, the assessee was required to explain the difference between the market value of ₹ 6,79,18,477/- and the actual cost of ₹ 3,39,96,600/- (recorded in sale deed) made to Shri B.G.Chennappa and Sri Jagadeeshchandra Ankalagi and as to why the same should not be added as its income for the relevant AY under consideration, by holding that the difference was an on money payment . After taking into account the assessee s submissions as recorded in the assessment order, the AO had, however, added a sum of ₹ 3.39 crores to the taxable income of the assessee for the following reasons: The show-cause notice was sent to the assessee proposing the additions based on the impounded materials and the assessee has not produced any additional evidences in support of its claim. The tax liabilities in case of suspicious transactions have to be assessed on the basis of the material available on record, surrounding circumstances and human conduct and preponderance of probability. Therefore, the claim of the assessee is not accepted and an amount of ₹ 3,39,22,177/- i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement that The acquired value mentioned on this computer sheet is the value which we have paid to the land owner for purchase of the relevant properties. The amount shown as market value is our own calculation based on the present market rates of the said property. The fact is that APIPL has nothing to do with these transactions. This is clear from assessment orders also. It is obvious that there are misconceptions and confusion in the minds of both Mr Aga and the questioner, ADIT (Inv), Belgaum; Excel sheets give computations with reference to the property of Mr Srinivasa Raju also thought the appellant did not buy any property from him. There is no reason for the appellant to record on money transacted with him in appellant s records especially more than two years after the sale deed when the two have had no transaction with each other. This supports appellant s contentions that the sheets give internal calculations only. Under the circumstances, the statement of Mr Aga cannot be treated as an admission. 4. The following decisions are relevant in this context: (i) In Embassy Classic Pvt. Ltd and Another v. ACIT (7 ITR (Tribunal) 287), the Hon ble ITAT, Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except for the loose sheet with adhoc workings, there is nothing on record to prove that the payment of on-money to the company has been made. There are no supporting evidence available in any other seized material to come to a legitimate conclusion that ₹ 3,39,22,177/- was on-money. The deposition of Mr.Aga was out of context and had nothing to do with this transaction as the property did not belong to him. Therefore, the statement of Mr Aga did not have much relevance in the total gamut of affairs. Therefore, there was no evidence of on-money payment. Addition on inconclusive facts without any enquiry, without any corroborate evidence is not correct. Therefore, the addition made is deleted. 7. Aggrieved, the Revenue has come up before us with the present appeal. During the course hearing, the learned DR submitted that the CIT (A) had erred on facts and also in law in deleting the addition of ₹ 3,39,22,177/- made by the AO on account of unaccounted investment made by the assessee in purchase of the subject property. It was, further, argued that the Director of APIPL had, on oath, admitted that the acquired value mentioned in the seized material (computer sheet) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying on the statement of Sri Aga, Director of APIPL, on oath. 8.2. As a matter of fact, APIPL had nothing to do with the transaction between the assessee and the sellers of the subject property, namely, Shri Chennappa and Shri Jagadish Chandra Ankalagi. This fact has since been exhaustively verified by the CIT (A) in her findings and came to a conclusion that (a) If the statement of Mr Aga were to be treated as admission , then also it cannot be a sound footing for sustaining the addition of ₹ 3.39 crores in the hands of the assessee; (b) Obviously, no corroborate documents/evidences were brought on record to justify the addition in the hands of the assessee; (c) The contentions put-forth by the assessee during the course of re-assessment proceedings have not been effectively contradicted by the AO; (d) The addition was made based solely on the ADIT(Inv) s report, as fairly conceded by the AO in his remand report and, thus, it was explicitly true that no attempt was made by the AO to have an independent enquiry to arrive at a factual conclusion; (e) No attempt was made by the AO bring on record any credible documentary evidence in support of his conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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