It is enough to proved the source of investment

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH: A: NEW DELHI

BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER

AND

SHRI T.S. KAPOOR, ACCOUNTANT MEMBER

ITA No.1413/Del/2012

Assessment Year: 2009-10

ACIT,

Central Circle-2, Room

No.323,

3rd Floor, ARA Centre, E-2,

Jhandewalan Extn.,

New Delhi.

                                                                    (Appellant)

Vs.

Anju Chaudhary,

240, Okhla Industrial Estate,

Phase III,

New Delhi.

PAN: AACPC4087F

(Respondent)

Assessee by: Shri K. Sampath & Shri V. Raja Kumar, Advocates

Revenue by: Shri Pirthi Lal, Sr.DR

ORDER

PER A.D. JAIN, JUDICIAL MEMBER

This is an appeal filed by the department for Assessment Year 2009-10 against the order dated 11.1.2012 passed by the CIT (A)-III, Delhi. The effective ground of appeal reads as under:-

“On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of ` 23,93,567/- made by the Assessing Officer on the basis of entries in the seized document on account of “On Money” paid by the assessee outside books of account.”

2. The facts as per the relevant orders are that a search was conducted on the assessee on 15.01.2009, together with searches in the Gopal Zarda group of cases. The assessee individual is a partner in certain firms and has, during the year, derived income from house property and interest income. The Assessing Officer made the addition on the basis of the seized page 10 which related to booking of a residential flat, Unit No.601 in Paramount Symphony at Grossings Republic, NH-24 for a total consideration of ` 26,68,567/- with M/s Paramount Residency P. Ltd. On this page itself, recital of the detail of payment made by cheque dated 18.11.2007, for ` 2,75,000/- by the assessee was given. No other payment was referred to on this document. While making the addition, the Assessing Officer observed that the assessee had completely failed to substantiate the contention that no payment on the seized document had been made by the assessee; that the assessee had not filed any sale document or confirmation from the seller of the property mentioning the sale particulars; that the assessee had failed to prove that the difference had not been paid; and that the difference was nothing, but ‘on money’ paid outside the books of account. The addition of ` 23,93,567/- was, thus, made.

3. By virtue of the impugned order, the Ld. CIT (A) allowed the appeal of the assessee and deleted the addition made by the Assessing Officer.

4. Challenging the impugned order, the Ld. DR has contended that the Ld. CIT (A) has erred in deleting the addition correctly made by the Assessing Officer on the basis of entries in the seized document, on account of on money paid by the assessee outside her books of account. It has been submitted that the Ld. CIT (A) has wrongly ignored the fact that before the Assessing Officer, the assessee did not submit any evidence in support of her stand, nor did she file before the Assessing Officer either any sale document or confirmation from the seller of the property mentioning the sale price, area or payment; that as such, it could not be proved that the payment mentioned on the top of the seized page had been made by the assessee; that the Ld. CIT (A) has further failed to take into account the observation of the Assessing Officer that in property deals, on money is always involved and, as correctly observed by the Assessing Officer, it is unacceptable that no on payment had been made by the assessee; and that therefore, for these reasons, the order of the Ld. CIT (A) is liable to be cancelled and that of the Assessing Officer is entitled to be revived.

5. On the other hand, the ld. counsel for the assessee has strongly relied on the impugned order. It has been contended that the Ld. CIT (A), while correctly deleting the addition wrongly made, has taken into account the factum of payment having been made by the assessee through cheque. It has been submitted that the amount had been debited in the bank account of the assessee; that the Assessing Officer neither took the same into consideration, nor made any adverse comment with regard thereto; that the investment made by the assessee was duly amply proved; that then, an amount of ` 2,75,000/- was received back by the assessee through cheque and it was credited in the assessee’s bank account, which fact was recorded on the seized document; that therefore, no unaccounted cash exchanged hands; that the refund of money also stood proved from the correspondence between the assessee and M/s Paramount Residency Pvt. Ltd.; that though this correspondence was produced by the assessee before the Assessing Officer, the Assessing Officer, without drawing any adverse inference therefrom, went on to make the addition illegally; that the Ld. CIT (A) correctly took this correspondence also into consideration while rightly deleting the addition; and that as such, there being no merit whatsoever in the appeal filed by the department, the same be dismissed outright.

6. While deleting the addition made by the Assessing Officer, it is seen, the Ld. CIT (A) has duly taken into consideration the fact that the amount paid through cheque by the assessee had been debited in the  account of the assessee with Standard Chartered Bank at Noida. Though the copy thereof had been filed before the Assessing Officer, the Assessing Officer did not consider the same, nor was any adverse inference drawn from the payments made by cheque. The narration on the seized document coupled with the fact that the payment was made from the bank account of the assessee goes to show that the source of the investment made by the assessee stood proved. Moreover, the assessee received back an amount of ` 2,75,000/- vide cheque dated 02.07.2008. This stood duly credited in the assessee’s bank account. This back receipt also stands recorded on the seized document itself. As such, there was no occasion to make any addition on account of unaccounted payment in cash. Further still, the assessee also filed copies of the correspondence between her and M/s Paramount Residency P. Ltd., with whom the flat was booked. This correspondence concerned refund of money. No adverse finding was recorded by the Assessing Officer even on such correspondence. The Ld. CIT (A), on the other hand, has duly taken the same into consideration and holding it to fortify the case of the assessee.

7. In view of the above discussion, we find no error in the order of the Ld. CIT (A) and the same is hereby confirmed rejecting the ground raised by the department.

8. In the result, the appeal filed by the department is dismissed.

The order pronounced in the open court on 26.10.2012.

                                                      Sd/-                             Sd/-

                                             [T.S. KAPOOR]          [A.D. JAIN]

                                    ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated, 26.10.2012.

dk

Copy forwarded to: -

1. Appellant

2. Respondent

3. CIT

4. CIT(A)

5. DR, ITAT

By Order,

Deputy Registrar,

ITAT, Delhi Benches