Unsigned, Unstamped Sale Agreement Cannot Prove Cash Receipt: ITAT Deletes Section 271DA Penalty

Kusum Devi Goyal Vs ACIT (ITAT Kolkata)

Unsigned and unstamped sale agreement cannot prove actual receipt of ₹25 lakh cash advance: Kolkata ITAT deletes Section 271DA penalty

Summary: The Kolkata Bench of the Income Tax Appellate Tribunal has deleted a penalty imposed under Section 271DA for alleged violation of Section 269ST, holding that an unsigned and unstamped draft agreement, relating to a transaction that never materialised, could not by itself prove that the assessee had actually received a cash advance of ₹25 lakh.

The Tribunal found that the Department had failed to bring any independent evidence on record to substantiate the alleged cash receipt or to show that the contemplated property sale had actually taken place.

Draft agreement recovered during search

The assessee filed her return for AY 2021-22 declaring a total income of ₹32.38 lakh.

A search under Section 132 was conducted on February 24, 2022 in the cases of the Naxal Group. The assessee was also covered by the search proceedings.

During the search, the Department retrieved a document from a mobile phone belonging to Shri Prithiviraj Goyal, identified in the seized material as item PRG HD/1.

The document was described as an agreement for sale dated March 15, 2021 between the assessee, Smt. Kusum Devi Goyal, as the proposed seller and M/s Swastil Vilas Pvt. Ltd. as the proposed purchaser.