Dushyantbhai Ranchhodbhai Patel Vs DCIT (ITAT Ahmedabad)
Third-Party Settlement Admission Can’t Bind Buyer: On-Money Addition under section 69 Deleted
Ahmedabad ITAT deleted an addition of ₹23 lakh u/s 69, holding that on-money admitted by the seller before Settlement Commission cannot be presumed against the purchaser in absence of independent evidence.
The Assessee had purchased a commercial office space on 10-12-2014 from M/s Dev Procon Ltd., with 50% share and recorded consideration of ₹21.55 lakh. AO reopened the assessment after four years alleging that during a search on Dev Group on 03-01-2013, the seller admitted receipt of on-money on sale of properties and therefore presumed that the Assessee also paid on-money, making addition of ₹23 lakh.
ITAT noted that the purchase by the Assessee was subsequent to the search, and hence any material or admission pertaining to pre-search period of the seller had no nexus with the Assessee’s transaction. Tribunal further observed that no seized material, document or evidence showed any cash payment by the Assessee and that addition was made purely on presumption, without granting opportunity of cross-examination.
Revenue fairly conceded that post-search purchases cannot be roped in on the basis of pre-search admissions of the seller. Accordingly, ITAT held that the impugned addition was legally unsustainable and deleted the entire addition, allowing the Assessee’s appeal in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
