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2008] 305 ITR 245 [2008] 169 TAXMAN 130 (DELHI) HIGH COURT OF DELHI Commissioner of Income-tax, (Central)-1, New Delhi v. Ved Prakash Choudharyï‚ ï-ª MADAN B. LOKUR AND V.B. GUPTA, JJ. IT APPEAL NO. 903 OF 2007 FEBRUARY 19, 2008 Section 69C, read with section 132, of the Income-tax Act, 1961 - Unexplained expenditure - Block period 1-4-1989 to 20-2-2000 - Pursuant to a search at residence of assessee, two Memorandum of Understandings (MoUs) were recovered, which were entered into by assessee with 'R' and 'M' for purchase of agricultural land - In terms of MoUs, assessee had paid certain amount as part consideration - However, before Assessing Officer, assessee denied of having made any payment and 'R' and 'M' also denied of having received any amount -Assessing Officer concluded that denial was only to escape payment of tax liabilities and added that amount to income of assessee as unexplained expenditure - On appeal, Commissioner (Appeals) as well as Tribunal deleted that addition on ground that there was not enough evidence to add that amount in hands of assessee, and it appeared from facts that property in question was eventually sold by 'R' and 'M' to 'D' - Whether since there was no corroborative evidence to show that there was in fact a transfer of money, addition was rightly deleted - Held, yes FACTS Pursuant to a search at the residence of the assessee, two Memorandums of Understanding (MoUs) were recovered which were entered into by the assessee with 'R' and 'M' in respect of purchase of agricultural land. In terms of the MoUs, the assessee had paid certain amount to 'R' and 'M' towards part consideration for the purchase of agricultural land. The Assessing Officer issued a questionnaire to 'R' and 'M' regarding receipt of the amount from the assessee but while they both admitted of having signed the MoU, they denied having received any amount. The Assessing Officer concluded that the denials by the assessee of having made payments and by 'R' and 'M' of having received the amount was only to escape payment of tax liabilities. Accordingly, said amount was added in the hands of the assessee as unexplained expenditure. However, on appeal, the…

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