The Tax Publishers2021 TaxPub(DT) 0877 (Chen-Trib)

INCOME TAX ACT, 1961

Sections 69 & 132(4)

Where on the basis of seized diary on-money payment to purchase property was confirmed in retracted statement under section 132(4), hence, to decide correct value the Tribunal set aside the issue to the file of AO and directed him to consider order of Chief Revenue Officer/Inspector General of Registration, Chennai, and decide the issue in accordance with law on the basis of evidences available on record.

Income from undisclosed sources - Addition under section 69 - Alleged on-money payment to purchase property -

During the course of search on 22-5-2014, an executive diary maintained by assessee for the year 2008 was found and seized. During the course of search, statement under section 132(4) was also recorded wherein assessee admitted maintenance of diary and also confirmed entries recorded therein and accordingly, admitted undisclosed income on account of on-money payment for purchase of property. AO made additions under section 69. The assessee carried the matter in appeal before first appellate authority, but could not succeed. The Tribunal had confirmed the additions. Assessee had challenged order of the Tribunal before the High Court. The High Court had set aside the appeal to the file of the ITAT 'B' Bench for fresh consideration with a direction to consider orders of Chief Revenue Officer/Inspector Generaol of Registration, Chennai, dt. 11-2-013. Held: Admission made during the course of search had been subsequently retracted on the ground that contents found in executive diary was only an estimate for purchase and construction of property, but not amount paid for purchase of property. Assessee had taken support from the order of Chief Revenue Officer /Inspector General of Registration, Chennai dt. 11-2-2013. The Tribunal in earlier round of litigation on perusal of various details, recorded categorical finding that sole basis for addition towards on-money payment for purchase of property was an executive diary found during the course of search. It was further noted that when the document found during the course of search was confronted to assessee, the assessee had admitted contents and also admitted undisclosed income towards on-money payment for purchase of property. Further, assessee had filed retraction statement with necessary evidence and retracted from his earlier statement. In the present case, before making any addition, the AO should have examined the claim of assessee in light of report/order of Chief Revenue Officer /Inspector General of Registration, Chennai or determine value of the property by conducting further enquiry or referring valuation to Departmental Valuation Officer (DVO). In this case, although assessee had filed order of Chief Revenue Officer /Inspector General of Registration, Chennai, but the AO as well as CIT(A) had not taken said order into cognizance, while adjudicating the issue. Since the assessee had taken a plea in light of said order/report of Chief Revenue Officer /Inspector General of Registration, the AO ought to have considered the order before arriving at conclusion that assessee had paid on-money payment for purchase of property, even though the AO was not bound to accept the order of Chief Revenue Officer /Inspector General of Registration. Hence, to decide correct value the Tribunal set aside the issue to the file of AO and directed him to consider order of Chief Revenue Officer/Inspector General of Registration, Chennai, and decide the issue in accordance with law on the basis of evidences available on record.

Relied:Pullongode Rubber Produce Co. Ltd. v. State of Kerala (1973) 91 ITR 18 (SC) : 1973 TaxPub(DT) 89 (SC) and P.V. Kalyanasundaram v. CIT (2007) 294 ITR 49 (SC) : 2007 TaxPub(DT) 1498 (SC).

REFERRED : (2010) 328 ITR 411 (Guj-HC) : 2010 TaxPub(DT) 190 (Guj-HC), (2008) 303 ITR 235 (Mad) : 2008 TaxPub(DT) 438 (Mad-HC), (2006) 282 ITR 259 (Mad) : 2006 TaxPub(DT) 1332 (Mad-HC), (2006) 294 ITR 49 (SC) : 2006 TaxPub(DT) 1332 (SC), (2007) 163 Taxman 482 (Del-HC) : 2007 TaxPub(DT) 515 (Del-HC) and (2009) 313 ITR 178 (Asr-Trib) : 2009 TaxPub(DT) 467 (Asr-Trib).

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