DCIT Vs Bommidala Realty Ltd. (ITAT Visakhapatnam)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Visakhapatnam bench, has dismissed an appeal by the Revenue against an order that deleted an addition of ₹2.85 crores to the income of M/s. Bommidala Realty Ltd. The addition was made by the Assessing Officer (AO) based on notations found in a diary seized from the purchaser of a property, which the AO interpreted as ‘on money’ received by the seller over and above the registered sale consideration.
The case, DCIT Vs Bommidala Realty Ltd., for the Assessment Year 2007-08, stemmed from a survey operation conducted at Bommidala Realty Ltd.’s premises on August 21, 2009. This survey followed information from the DCIT, Central Circle, Chennai, indicating that the company had sold a property in T. Nagar, Chennai, for a total consideration of ₹5.60 crores, while the sale deed was registered for ₹2.75 crores.
During the survey, a sworn statement was recorded from the company’s director, who maintained that the sale consideration received was only the registered amount of ₹2.75 crores. However, when confronted with diary notations seized from the purchaser, Sri V. Sampath, showing “C-2.85” and “D-2.75,” the director denied knowledge of their contents.
