INCOME TAX ACT, 1961

Sections 69A & 56

Assessment - Addition of unexplained income - Advance money under agreement to sell - Forfeited amount not appearing in books of account of assessee

Assessee claimed to have received Rs. 1,80,00,000 from M/s. True Value Contractors (P) Ltd. on sale of property. AO treated the same as unexplained income of assessee alleging that assessee was not able to prove the genuineness of transaction with M/s. True Value Contractors (P) Ltd./Jaffa Contractors (P) Ltd. Also bank account/details provided by assessee for M/s. True Value Contractors (P) Ltd./Jaffia Contractors (P) Ltd., i.e., 913020032425869 was found wrong and the same was found to be the Account of M/s. Excel Buildtech (P) Ltd. Also agreement to sell submitted by assessee with respect of sale of the property was without any legal stamp paper, which raised doubt on veracity of claim of assessee. Assessee submitted certificate issued by SBI and his statement of the account. Held: SBI has also given a detailed certificate of the transaction with a detailed narration which very clearly stated that amount had emanated from bank account of True Value Contractors (P) Ltd. From a perusal of certificate of SBI, it was apparent that AO fell into error in holding that the amount of Rs. 1.80 crore did not emanate from the bank account of True Value Contractors (P) Ltd. and was hence unexplained income of assessee. An affidavit from Jaffna Contractors (P) Ltd. (Previously True Value Contractors (P) Ltd.) was also filed to authenticate claim. In normal circumstances, an affidavit does not have any evidentiary value. However, SBI certificates corroborated the deposition in the affidavit and affidavit could, therefore, not be brushed aside. Also, AO failed to controvert veracity and credibility of the SBI certificates furnished by assessee. AO relied upon a bank certificate pertaining to account of one Excel Buildtech instead of bank account of True Value Contractors (P) Ltd. As this fact was confronted to assessee at the fag end of the assessment proceedings and as he was allowed only a day to rebut the same, the error and consequent conclusions of AO were based on a factually incorrect premise. In nutshell, assessee received an amount of Rs. 1,80,00,000 on account of sale of property and received money from one entity namely, 'True Value Contractors Pvt. Ltd.' whose name had been changed to 'Jaffna Contractors'. The amount has been duly reflected in bank account of assessee and a certificate from State Bank of India revealed that the payments to the tune of Rs. 1,80,00,000 have been received from Axis Bank into the account of assessee. Accordingly, AO was not justified in making addition.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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