COMMISSIONER OF INCOME TAX Vs. VED PRAKASH CHOUDHARY

JUDGEMENT

(1.) THE Revenue is aggrieved by an order dated 8th September, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench "g" in IT (SS) No. 107/del/2003 relevant for the block period from 1st April, 1989 to 20th February, 2000.

(2.) BRIEFLY the facts of the case are that a search was conducted at the residence of the Appellant on 10th February, 2000. During the course of search, two Memorandums of Understanding (MOU) dated 1st March, 1999 were recovered. These MOUs were entered into between the Assessee, Ravi Talwar and Madhu Talwar. In terms of the MOUs, the Assessee had paid Rs. 25 lakhs each to Ravi Talwar and madhu Talwar towards part consideration for the purchase of agricultural land valued at Rs. 123. 30 lakhs. The balance amount was to be paid on or before 30th april, 1999, failing which the amount of Rs. 25 lakhs each would be forfeited.

(3.) ON the basis of the MOUs, the Assessing Officer issued a questionnaire to Ravi Talwar and Madhu Talwar regarding receipt of the amount of Rs. 25 lakhs each but while they both admitted having signed the MOUs, they denied having received any amount. The Assessing Officer concluded that the denials by the assessee of having made payments and of Ravi Talwar and Madhu Talwar of having received the amounts was only to escape payment of tax liabilities. Accordingly, an amount of Rs. 50 lakhs was added in the hands of the Assessee under Section 69 of the Income Tax Act, 1961 (for short the Act) as unexplained expenditure.