IN INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER] I.T.A. No.1749/CHNY/2016 /Assessment year : 2011-2012. Shri. J. Nagendran, Vs. Deputy Commissioner of No.3, Kalingarayan Street, Income Tax, Ramnagar, Circle II, Coimbatore 641 009. Coimbatore [PAN ABEPN 1149A] (Appellant) ( /Respondent) Appellant by : None &' Respondent by : Shri. Sridhar Dora, IRS, JCIT. /Date of Hearing : 08-08-2019 $ /Date of Pronouncement : 27-09-2019 / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER This is appeal filed by Assessee directed against order of Commissioner of Income Tax (Appeals)-2, Coimbatore ( CIT(A) for short) dated 25.04.2016 for Assessment Year (AY) 2011-2012. :- 2 -: ITA No. 1749/2016 2. Assessee raised following grounds of appeal: 1. learned CIT(A) has grossly erred in upholding addition of Rs.6 Crores, alleging on-money payment made, by appellant for purchase of property by him, along with others, contrary to contents of registered sale deed dated 15th November 2010, including actual sale consideration disclosed, in absence of any cogent materials with AO, in facts and circumstances of case and in law. 2. learned CIT(A) has failed to appreciate that addition of Rs.6 Crores cannot be sustained only on basis of surrounding circumstances, human probabilities and, on mere suspicion, as, however strong it may be, suspicion etc. cannot take place of evidence on record in facts and circumstances of case, as appellant has totally rebutted allegation of AO that excess payment was made by him, in facts and circumstances of case and in law. 3. learned CIT(A), has grossly erred in rejecting categorical statement of Power of Attorney holder, who had executed sale deed, at time of recording statement u/s 131 of Income Tax Act, 1961, from him on oath on 10.03.2014, that there was no payment of on-money received by him over and above consideration stated in registered document for conveyance of property, in facts and circumstances of case and in law. 4. learned CIT(A) has failed to appreciate that onus is on Revenue to prove, beyond any reasonable doubt with cogent material evidence, conclusively that appellant had actually made investment in purchase of property by way of on-money payment in excess of sale consideration stated in sale deed, which it has miserably failed to do so, in facts and circumstances of case and in law. 5. learned CIT(A) ought to have held that AC has failed to prove conclusively that appellant has made on-money payments towards sale consideration to seller, and therefore addition made in assessment, on presumptions, surmises and conjectures, without discharging onus resting with Revenue, is not sustainable in hands of appellant, in facts and circumstances of case and in law and deleted addition of Rs.6 Crores made in assessment of appellant as unwarranted and unsustainable, in facts and circumstances of case and in law. 6. learned CIT(A) has grossly erred in merely relying on loose sheets impounded during survey, at premises of third party, :- 3 -: ITA No. 1749/2016 stranger to appellant in every respect, and without disputing fact that appellant was not interested party to understanding, if any, reached by individuals named as beneficiaries in unsigned MOU so impounded, besides relying on two decisions of Apex Court, reported in 291 ITR 278 and 214 ITR 801, having no application in facts of case of appellant, with closed mind, purely on his subjective considerations, confirming addition of Rs.6 Crores, to income admitted by appellant in his return of income. 7. For these and other additional grounds of appeal that may be adduced at time of hearing, order of Commissioner of Income Tax (Appeals), is opposed to law and unsustainable in facts and circumstances of case be quashed and consequent demand for income tax be deleted in full . 3. brief facts of case are as under: appellant is individual engaged in business of running hotel in name of M/s. Vijay Paradise. return of income for AY 2011-12 was filed on 22.7.2011 disclosing total income of Rs.1,69,18,690/-. Against said return of income, assessment was completed by Dy. Commissioner of Income Tax, Circle-II, Coimbatore vide order dated 11.03.2014 passed u/s. 143(3) of Income Tax Act, 1961 (for short Act ) at total income of Rs.7,69,18,690/-. While doing so, Assessing Officer made addition of G6,00,00,000/- on account of payment of on money over and above consideration stated in sale deed. Factual background of issue is as under:- Assessee purchased land measuring 57.87 cents located at Sowripalayam Village bearing GS No.278/1 and 279/1 from Shri. D. :- 4 -: ITA No. 1749/2016 Srinivasan (power agent) for registered value of G4,00,00,000/- vide sale deed No.3950/2010, dated 15.11.2010. During course of survey operation conducted on 27.01.2011 in business premises of M/s. Tejas, Department had come to know that payment of G6,00,00,000/- was paid over and above consideration stated in sale deed on purchase of 57.87 cents of land. During course of survey proceedings, Department found one MOU and impounded MOU entered between assessee alongwith one Mr. D. Senthilkumar. said Senthilkumar had also gave sworn statement dated 07.02.2011 confirming receipt of on money in connection with said transaction. When assessee was confronted with this information on 15.02.2011, assessee had denied having paid any on money. However, Assessing Officer based on MOU and statement of Shri. D. Senthilkumar, who is partner of M/s.Teja concluded that there was payment of on money over and above consideration stated in sale deed. As assessee failed to explain source for sum, brought same to tax amount as unexplained investments. 4. Being aggrieved, appeal was preferred before ld. CIT(A) and contended that allegation made by Assessing Officer is false and property has been purchased only through POA holder of :- 5 -: ITA No. 1749/2016 seller namely Shri D. Senthilkumar, assessee had no dealings whatsoever with M/s. Tejas and Assessing Officer without granting opportunity of cross examination of M/s. Tejas made addition. It is further contended that no addition can be made based on unsigned MOU. ld. CIT(A) on consideration of contention of MOU impounded during course of survey of M/s. Tejas and statements recorded from Shri. D. Senthilkumar and Shri. D. Srinivasan concluded that in view of circumstantial evidence that there was payment of on money of G6,00,00,000/- confirmed addition. 5. Being aggrieved by order of CIT(A), appellant is in appeal before us in present appeal. When appeal was called for hearing, none appeared on behalf of assessee. 6. On other hand, ld. Sr. Departmental Representative placed reliance on orders of lower authorities. 7. We heard Departmental Representative and perused material on record. sole issue involved in present appeal relating to addition of unexplained investments for payment of on money for purchase of property at Sowripalayam Village. Admittedly, sellers of property have admitted receipt of on money in their :- 6 -: ITA No. 1749/2016 individual hands. On perusal of impugned order, it is clear that ld. CIT(A) had considered MOU and statements of Shri D Srinivasan, who was POA holder of property and Shri.D. SenthilKumar. Considering probability and circumstantial evidence on record he categorically held that there was payment of on money at time of purchase of land. We find that findings of ld. CIT(A) is based on proper appreciation of materials on record, we do not find any reason to interfere with order of ld. CIT(A). Accordingly, appeal filed by assessee stands dismissed. 8. In result, appeal of assessee stands dismissed. Order pronounced on 27th day of September, 2019, at Chennai. Sd/- Sd/- (N.R.S. GANESAN) (INTURI RAMA RAO) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /Chennai . Dated:27th September, 2019 Copy to: 1. Appellant 3. 3 ( CIT(A) 5. /DR 2. Respondent 4. 3 /CIT 6. /GF J. Nagendran v. Deputy Commissioner of Income-tax, Circle II, Coimbatore