Merely on basis of unsigned document it cannot be assumed that amount/price paid is as stated in said document – ITAT
In a recent judgment, the ITAT Hyderabad has held that merely on the basis of an unsigned document it cannot be assumed that price paid is as stated in said document, when there are no contrary evidences, no addition can be made in the hands of the assessee as unexplained investment.
ABCAUS Case Law Citation:
ABCAUS 4070 (2024) (06) ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the addition towards towards unexplained investments.
The appellant assessee was an individual and one of the Director of a company and its group concerns. A search & seizure operation u/s 132 of the Income Tax Act, 1961 (the Act) was carried out on the group cases of the said company along with the residential premises of the assessee.
Consequent to the search notice u/s 153A of the Act was issued and case was taken up for scrutiny. Dduring the course of assessement proceedings, the Assessing Officer noticed that during the course of survey operation u/s 133A of the Act conducted at the business premises of the said company, certain papers/documents were found and the same were impounded.
The Assessing Officer noted that during the course of search conducted at the residential premises of the assessee, bills for purchase of jewellery and deed for purchase of property were found and seized. The assessee was called upon to explain the documents and the source for purchase, for which the assessee replied that he has purchased silver article out of cash balance available with him.
Similarly, during the course of search in the residential premises of the assessee a large amount of cash was found which was seized. The assessee was asked to explain the same for which the assessee stated that this amount belong to the company and it was given for the purpose of carrying to the site.
The Assessing Officer, on the basis of evidences collected during the course of search and survey observed that the assessee could not explain the source for purchase of property and accordingly by taking note of relevant seized material and also the sale deed for the purpose of property, made addition towards undisclosed investment on the purchase of property and for purchase of jewellery and cash found during the course of search.
The CIT(A) considering the additional evidences filed by the assessee allowed partial relief in respect of addition made by the Assessing Officer towards unexplained investment in purchase of property. Further, the CIT(A) also deleted the additions made by the Assessing Officer towards unaccounted investment in jewellery on the ground that the assessee was having sufficient cash in hand to explain the investment in purchase of jewellery.
The assessee and the Revenue, both aggrieved by the order of the CIT (A), went in appeal before the Tribunal.
The Tribunal observed that with respect to purchase of property, the Assessing Officer arrived at the conclusion on the basis of unsigned document found during the course of search which contained details of 2 flats and price negotiated etc. Neither the appellant being a purchaser, nor the company being a seller had signed on the document. Further, there was no reference of any cash payment over and above the consideration specified in the registered document.
The Tribunal stated that on the basis of a document which was unsigned, it cannot be assumed that the appellant has paid the price as stated in the said document, unless it was further corroborated with other evidences including confirmation from the seller.
Further, the Tribunal opined that the argument of the Revenue that the appellant had admitted undisclosed income towards purchase of property during the search does not take away the right of the appellant and other party to rebut the claim with necessary evidence and prove that the initial admission during the course of search is incorrect.
Accordingly, the Tribunal held that the Assessing Officer erred in making addition towards cash paid for alleged purchase of property on the basis of the said document.
Regarding the argument of the assessee before the lower authorities was that he had sufficient source of income including cash in hand, the Tribunal noted that the Assessing Officer had not disputed the fact that the cash was withdrawn from bank by an employee of the searched company and was also handed over to the assessee being M.D. of the said company. The appellant had also filed necessary bank statement and books of account to prove that the cash withdrawn was accounted and also debited into the account of the assessee.
The Tribunal opined that since the evidences filed by the assessee clearly showed that the cash found during the course of search does not belong the assessee and further it was the cash withdrawn from bank account of the company, when there are no contrary evidences, no addition can be made in the hands of the assessee as unexplained investment. Accordingly, it upheld the order of the CIT(A) and rejected the ground taken by the Revenue.
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