Balwant Singh Vs D/ACIT (ITAT Chandigarh)
Unsigned Agreement to Sell- Not Valid Evidence for Sec. 69/69B- Cannot Justify Addition
Assessee was subjected to search u/s 132 on 28.01.2021. AO, in assessment u/s 153A r.w.s. 143(3), made addition of ₹13 lakhs treating it as unexplained investment in Plot No. 3, Divine Enclave, Bathinda, on the basis of an unsigned agreement to sell seized during search. CIT(A) upheld addition, presuming agreement as executed & registered.
Before Tribunal, Assessee argued that:
- The seized agreement was unsigned, unregistered & executed on ₹50 stamp paper, hence not enforceable.
- Property continued in name of seller, Shri Manish Kumar, as shown by electricity bills & records.
- AO did not record seller’s statement or allow cross-examination.
- No corroborative evidence of payment or transfer was found.
Tribunal observed that document was admittedly unsigned & unregistered. No registry was executed, nor any independent inquiry from seller was conducted. Electricity bills showed property still in seller’s name. Following precedents including Krishan Kumar Jhamb vs ITO (P&H HC), CIT vs Akme Projects Ltd. (Delhi HC) & ITAT Raipur ruling in Sanjay Agrawal, it held that no addition can be made merely on basis of unsigned agreement to sell. Accordingly, Tribunal deleted addition of ₹13 lakhs & allowed appeal in full
