Income Tax Appellate Tribunal - Jaipur
Jai Kumar Gurbani, Jaipur vs Dcit, Circle International Taxation, ... on 5 October, 2023
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"B" JAIPUR
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BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
vk;dj vihy la-@IT(IT)A No.06/JP/2023
fu/kZkj.k o"kZ@Assessment Years :2017-18
Jai Kumar Gurbani cuke DCIT
H II/13 Flats, Sector-02, Vs. Circle (Int. Tax), Jaipur
Vidhyadhar Nagar, Jaipur
LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANPPG 4061 P
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@Assessee by : Sh. Rahul Pandya
jktLo dh vksj ls@Revenue by:Smt. Monisha Choudhary(Addl. CIT)
lquokbZ dh rkjh[k@Date of Hearing : 14/09/2023
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 05/10/2023
vkns'k@ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the Commissioner of Income Tax (Appeals), Delhi-42 dated 09/01/2023 [here in after "CIT(A)"] for assessment year 2017-18 which in turn arise from the order dated 13/05/2022 passed under section 147 r.w.s. 144 of the Income Tax Act, by the DCIT, Circle, International Taxation, Jaipur.
2. In this appeal, the assessee has raised following grounds: -
2IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT "1. That Learned Assessing Authority grossly erred in Law issuing Notice U/s 148 of Income Tax Act without verifying the facts shown Investment of Rs.
3,29,26,948/- taken twice amount of Registry & TDS Return and have not verified the amount of Registry before issue of Notice & have not applied his mind for opening the Case U/s 148 of Income Tax Act. Thus all the proceedings are void & bad in law.
2. That on the facts and circumstances of the case the Learned Assessing Officer has erred in treating unexplained Investment of the Assessee to the extent of Rs. 1,10,82,319/- without verifying the fact of Registry the payment made in earlier year(Jaipur Flat) and Amount not paid during the year /payable on next year (Pune Flat) have estimated as unexplained Investment U/s 69 of Income Tax Act and levied Tax U/s 115BBE of Act is against Law & Facts of the Case.
3. That the Income of Deceased person is added in the income of Humble Appellant is against the Law.
4. That all the Purchase Agreements / Deeds & Payment made through Account Payee Cheques which are verified by Ld Assessing Officer, Thus no Question of Section 69 arises.
5. That Without prejudice to above the Learned Assessing Officer levied 60% Tax instead of 30% against the provision of Law.
6. That the CIT (A) grossly eared in not considering the withdrawal Application filed before DCIT (DRP-1), Delhi (Sec) & rejected the Appeal without considering the Facts.
7. That on the facts and circumstances of the case the ld. AO has erred in levying interest under section 234A/234B/234C of the Act.
8. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 270A of the Act.
3IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
9. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 271AAC(1) of the Act.
10. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 272A(1)(d) of the Act.
11. That further submissions in support of appeal shall be made at the time of hearing.
12. That appellant craves leave to add, amend or alter all or any grounds of appeal before or at the time of hearing."
3. Succinctly,the fact as culled out from the records is thatfor the year under consideration the assessee did not file his ITR for the A.Y 2017-18.
The ld. AO received information, in this case and based on theinformation received a notice u/s 148 was issued to the assessee on 30.03.2021 for filling ITR for A.Y 2016-17. The said notice was issued after getting prior approval from the Jt. Commissioner of Income Tax, Range-4, Jaipur. In response the notice u/s 148, the assessee filed his ITR for A.Y 2017-18 on 26.07.2021 declaring a total income of Rs. 2,49,940/-. Thereafter, a notice u/s 143(2) of the I.T. Act, 1961 was issued to the assessee on 25.12.2021.
3.1 On perusal of the submission made by the assessee and information available on record as form 26AS, ITR filed, income computation, sale/purchase deeds etc., it is noted by the ld. AO that during the year 4 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT under consideration i.e. F.Y 2016-17 the assessee has purchased two immovable properties, details of which are given below:-
Table-A Address of the Date of Sale deed Joint Ownership Sale Consideration Stamp Duty Paid Property nd Flat No. 206, 2 06.09.2016 Sh. Nanak Gurbani 91,64,348/- 5,49,770/-
floor, Okay Plus (Assessee's
Empress, Shiv Father)
Marg, Banipark,
Jaipur
th
Flat no. 1701, 17 01.03.2017 None 1,18,81,300/- 7,12,900/-
floor, A1, F
Residencies,
Belawadi, High
Street, Pune,
Maharashtra
Total 2,10,45,648/- 12,62,670/-
During the assessment proceedings the assessee was asked to furnish documentary evidence regarding the source of investment made for purchase of the aforementioned immovable properties. The same was furnished by the assessee vide submissions dated 07.02.2022, 09.03.2022 & 21.03.2022.Regarding the source of investment for purchase of the properties mentioned above. The ld. AO noted that the assessee has not produced any documentary evidence regarding the payment of Rs.
52,37,475/- (11881300-6643825). Also, the assessee has claimed that this payment of Rs. 52,37,475/- was made by his father, Mr. Nanak Gurbani.
Also, assessee is the sole owner of this property and claiming that he has only made payment of Rs. 66,43,825/- and rest of the payment is made by 5 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT his father Mr. Nanak Gurbani. The ld. AO noted that the assessee failed in furnishing documentary evidence regarding the capacity of payment of his father and relevant bank a/c statements have also not been furnished by the assessee. Hence, the source of investment of Rs. 52,37,475/- is considered as unexplained.The ld. AO contended that the possibility of the fact that whole of the invested amount is originally transferred by Mr. JaiKumar Gurbani into the bank a/c of Mr. Nanak Gurbani also cannot be denied considering that the account balance of Mr. Nanak Gurbani during the F.Y. 2016-17 is continuously very low. In the property, Flat no. 206, assessee is the joint owner and claiming that whole of the payment is made by assessee's father. The assessee has failed in furnishing documentary evidence regarding the capacity of payment of his father and relevant bank a/c statements have also not been furnished by the assessee. Hence, the source of investment of Rs. 45,82,174/- (91,64,348/2) considered as unexplained.Based on these observations the amount of investment of Rs.
1,10,82,319/- (5237475+1262670+45,82,174) considered as unexplained and comes under the purview of unexplained investment u/s 69 of the IT Act, 1961 and added back to the total income of the assessee for A.Y. 2017-18. The assessee has earned interest on saving bank a/c amounting to Rs. 488/- which has not been declared by the assessee in 6 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT computation/ITR submitted; hence, the same was also added to the total income of the assessee.
4. Before us, the ld. AR of the assessee presentingthe merits of the case, submitted that ld. AO passed the order before outcome of the DRP.
Therefore, the assessee to secure the vested right of appeal filed an appeal before ld. CIT(A). The fact that the DRP not considered the merit of the case of the assessee as the assessment order has been passed on 13.05.2022 and therefore, the DRP vide order dated 09.12.2022 disposed the reference mentioning as under:-
"The Assessing Officer is directed to complete the assessment as per the above direction of the Dispute Resolution Panel. The Assessing Officer shall place a copy of these directions as annexure to the final order, to be read as a part of the order. While passing the final order, the Assessing Officer shall incorporate the reasons given by the Dispute Resolution Panel in respect of various objections, at appropriate places. The Grounds of Objections are decided as above"
5. As the order in this case passed before the order of DRP made the ld.
AO passed the order making the addition as discussion in para 3 above.
Aggrieved by the order of the assessing officer, assessee carried the matter before the ld. CIT(A). Apropos to the grounds so raised by the assessee the relevant findings of the ld. CIT(A) is reiterated here in below:
"5. It is observed from the Statement of Facts filed along with Form 35, that in this case the AO had issued a Draft Order U/s 144C of the Act on 27.03.2022. In 7 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT response to the same, the appellant approached Dispute Resolution Panel and filed application before DRP-1, Delhi on 26.04.2022.
6. There is no dispute in law that on receipt of a draft order u/s 144C proposing variations to the returned income, the assessee can either accept the variations or file an objection before the DRP. In the alternative, the assessee also has the option to prefer appeal before the Commissioner of Income Tax (Appeals). Undisputedly, the assessee cannot both file objections before the DRP and also file the appeal before CIT(A). In this case, as the appellant had already preferred filing objections before the DRP, he did not have any legal right to file an appeal before the CIT(A). Clearly, the appeal filed before the CIT(A) was not maintainable in law. Therefore, the appeal deserves to be dismissed being not-maintainable in law.
7. As mentioned earlier, the appellant has filed an application under Rule 46A of Income Tax Rules, 1962 for admission of certain additional evidences. As already discussed, the present appeal is found to be not maintainable, therefore, there is no question of any admission of additional evidences in this case. The said application is rejected."
6. Considering that aspect of the case, the ld. AR of the assessee submitted that the assessee has not received justice from the orders of the lower authorities. The merits of his case have not been consideredeven though all the relevantmaterial related tothe disputewas placed on record.
In the light of that peculiar situation, he prayed to dispose of his appeal based on the evidence on record. To support the various grounds so raised the ld. AR appearing on behalf of the assessee has placed their written submission on record and the same is extracted here in below;
"Brief Facts:-
That the humble Appellant is an NRI and has been serving in a company of Ivory Coast (West Africa) since last over 15 Years.
That the case of humble Appellant was reopened U/s 148 on the reasons:-8
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
1. Payment made in respect of Transfer of Immoveable Property (TDS Form 26QB, Section 194IA amounting to Rs. 1,18,81,300/-
2. Purchase of Immovable Property amounting to Rs. 2,10,45,648/-.
3. TDS Return -Payment to Non - Residents (Section 195 ) amounting to Rs. 488/-
That in Response of Notice U/S 147/148 issued by Income Tax Officer, Ward 4(1), Jaipur the Humble Appellant have e-filed his Return of Income on Dt 26-07-2021 . The Learned Income Tax Officer, Ward 4(1), Jaipur have not supplied copy of reasons for issue of Notice U/s 148 of Income Tax Act.
Thereafter Assistant Commissioner of Income Tax NFAC issued Notice on Dt 26-11-2021 to provide the documents and the Humble Appellant submit reply on due date 10-12-2021 the NFAC further issued notice on Dated 28-12- 2021 to provide details of payment, copy of registry and details of bank interest. The Humble Appellant submitted NRE& NRO Bank Statement, Copy of Registry of both the flats and copy of written reply on due Date 10-01-2022.
That Hon'ble PCIT Jaipur-2 U/s 127 of Income Tax Act Transfer the case from Income Tax Officer, Ward 4(1), Jaipur to DCIT, International Tax, Jaipur on Dt 19-01-2022. Factually case is with ITO (NFAC) instead of ITO Ward 4(1), Jaipur.
That the Learned Assessing Officer (DCIT, International Tax, Jaipur) have issued Notice U/s 142(1) of Income Tax Act on Dt 02-02-2022 requiring information's from Humble Appellant submitted the reply on Dt 07-02-2022. The Learned Assessing Authority further issued Show Cause Notice on Dt 01-03- 2022 for addition on Investment of Rs. 2,10,45,648/- and given hearing Dt 16- 03-2022 further The Learned AO Circle (Int. Tax) Jaipur issued show cause Notice on Dt 08-03-2022 for hearing date 11-03-2022. That Humble Appellant in 9 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT response to Notice 01-03-2022 submitted the Reply & statement of account of Builder M/s Nahar Homes and copy of Bank account of Late Sh. Nanak Gurbani on Dt 16-03-2022.
The Learned Assessing Officer, Circle (Int. Tax) Jaipur have issued Notice on Dt 19-03-2022 for hearing Dt 04-04-2022 asking to provide evidence/ source for deposits of Rs. 99,81,115/- in Account Number 00541060001672 and issued notice of unexplained investment of Rs. 1,18,81,300/-as Income of the year but accepted Rs 2,10,45,648/-. The Humble Appellant submitted the information and also submitted copy of Bank Statement, Remittance Certificate alongwith Salary Certificate of Overseas Employer on Dt 04-04-2022.
The Learned Assessing Officer, Circle (Intel. Tax) Jaipur have issued Draft Order U/s 144C of income tax act on dated 27-03-2022 for Addition of Rs. 1,10,82,319/- estimating Total Income of Rs. 1,13,32,750/- the draft order is anti dated considering Reply of Dt 04-04-2022.
The Humble Appellant submitted objections against draft order along with copy of Death Certificate of Late Sh. Nanak Gurbani (Father of Appellant and also co-owner in one property ) and copy of His ITR for AY 2017-18 on Dt 26- 04-2022 The Learned Assessing Officer, Circle (Intel. Tax) Jaipur have passed the order u/s 147r.w.s. 144C (3) of income tax act on Dated 13-05-2022 estimated Total Income of Rs. 1,13,42,747/- without considering the reply submitted and verifying the Bank Statement and Copy of Registry. Thus the order is passed is against facts & predetermination for addition is bad in Law.
The Learned Assessing Officer, Circle (Intel. Tax) Jaipur have issued notice on Incorrect Information finding investment of Rs. 3,29,26,948/- in two 10 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT properties factully the humble appellant have made registry for purchase of one flat at jaipur Bani park from Shri Krishna Vatika Build Mart Pvt Ltd (Okay Plus Group) with joint ownership of Late Shri Nanak Gurbani Father of the Assessee the details of payment is given in the registry showing payment of Rs. 1,71,744/- During the Financial Year 2016-17 out of Registry Amount of Rs. 91,64,348/- & balance amount is paid in earlier years and the another property is purchased at Pune from M/s Nahar Homes LLP of Rs. 1,18,81,300/- showing stage wise payment is to be made and as per agreement the humble appellant have paid Rs. 66,43,825/- is paid during the years and remaining amount is to be paid in next years. Thus the documents relied by learned AO have not properly appreciated and examined for issue of Notice u/s 148 and during Assessment Proceeding.
Investment of Rs.52,37,475/-
That the Property situated at Pune being flat no. A1-1701,F Residencies, Village Balewadi, High Street, Balewadi, Baner Link Road, Pune- 411045 (Maharashtra). The quantum of this alleged unaccounted investment has been worked out by deducting Rs. 66,43,825 out of agreed sale consideration of Rs. 1,18,81,300.While raising this allegation the Learned Assessing Officer has framed opinion that whole of the agreed sale consideration of Rs. 1,18,81,300 was paid by the assessee during the concerned year itself. The allegation of making an unaccounted investment of Rs. 52,37,475/-seems to has been raised by ignoring all the documents submitted by the Humble Appellant in the assessment proceedings. The Humble Appellant had filed following documents in connection to above said property purchase:-
i) Agreement of the assesse with the developer to purchase said property.11
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
ii) Account statement of the Humble Appellant provided by M/s.Nahar Homes LLP, developer of above project Both the above documents prove that the agreed sale consideration for above property is Rs., 1,18,81,300 + Service Tax, out of which during the previous year relevant to this concerned Assessment Year the Humble Appellant had made payment of Rs.66,43,825 only which is verified by Learned Assessing Officer and rest of the payment has been made in subsequent year(s). The Humble Appellant has even proved the source of payment of above said sum which was made through three cheques for Rs.5,00,000, Rs.20,00,000 and Rs.41,43,825 respectively and no objection was ever raised by Learned Assessing Officer there on during the assessment proceedings.
The Humble Appellant has nowhere claimed about payment by Shri Nanak Gurbani for above said property. This property was purchased by the Humble Appellant as sole owner only and there was no body as co-buyer of the same. Therefore opinion of Learned Assessing Officer to consider a sum of Rs. 52,37,475/-as unexplained investment by the Humble Appellant is without any basis and is not borne out of records.
Stamp Duty of Rs.12,62,670/-
No such evidence was ever sought from the Humble Appellant during the assessment proceedings. Right from initiation of the assessment proceedings the Learned Assessing Officer had been raising queries about the investment of the quantum which was made the basis of initiation of reassessment proceedings and the Assesse had submitted all relevant documents in connection thereto. The Assesse had made following payments for registration of sale deeds/ Agreements:-
A. For property at Pune Rs. 7,44,060/-
12
IT(IT) A No. 06/JP/2023
Jai Kumar Gurbani vs. DCIT
(Taken by Learned Assessing Officer Rs.7,12,900/-) B. For property at Bani Park, Jaipur Rs. 6,41,920/-
(Taken by Learned Assessing Officer Rs.5,49,770/-) Regarding payment of Rs. 7,44,060 in respect of stamp duty of property situated at Pune is concerned a sum of Rs. 7,42,900 was paid by the developer and the same has been debited by the developer on Dt 11-02- 2017 in the Account Statement of the Humble Appellant. Even in the Registered Agreement also in para 59 the fact of payment of stamp duty is duly mentioned and such sum of Rs. 7,42,900 has been adjusted out of payment of Rs. 66,43,825 made by the Humble Appellant to the developer during the concerned year. The brother of Humble Appellant had paid a petty sum of Rs. 1,160 in cash out of balance available with him.
Regarding payment of Rs. 6,41,920 in respect of stamp duty for property situated at Jaipur (Bani Park) is concerned the same was arranged and paid by Late Shri Nanak Gurbani, father of the Humble Appellant who was also co owner of the property. It is also relevant to mention that payment of the stamp duty was made on 06-09-2016 and the registration of the sale deed was also made on that day itself and on this date the assessee was not in India as his relative Power of Attorney Holder Shri Girish Gurbani had signed this Deed as Power of Attorney Holder of the Humble Appellant. Hence there cannot be any presumption about payment made by the Humble Appellant. The capacity of payment of stamp duty by Shri Nanak Gurbani stands proved with the fact that he was also an Income Tax Assessee having PAN :
ABEPG0467C and he had filed his ITR for the AY 2017-18 on 11-11-2017. Shri Nanak Gurbani was partner in one M/.s Jay Pee Industries and he had received Partners Remuneration of Rs. 1,50,000 and interest on Partner's 13 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Capital at Rs. 2,96,282 from the above named firm. Shri Nanak Gurbani had unfortunately expired on Dt 09-03-2019. The ITRV and computation of income of Shri Nanak Gurbani for the AY2017-18 has been submitted before the Learned Assessing Officer to justify the source of payment of said sum of Rs. 6,41,920/-, the Additions made in Appellant case is against Facts & Law.
Unexplained investment by calculating 50% of the total agreed sale consideration of Rs. 91,64,348 ie Rs.45,82,174/-
That the Learned Assessing Officer suomoto treated Rs. 45,82,174/-as unexplained investment by estimating 50% of the total agreed Purchase consideration of Rs. 91,64,348 for the property situated at Shiv Marg, Banipark, Jaipur. The Learned Assessing Officer has himself agreed in draft order that the Humble Appellant has claimed that whole amount for the purchase has been paid by Shri Nanak Gurbani and in absence of proving capacity of father of the Assesse Shri Nanak Gurbani 50% of the agreed sale consideration has been proposed to be considered as unexplained investment of the Humble Appellant. That the Humble Appellant had submitted copy of the registered Sale Deed of the Property bearing flat no.206, Okay Plus, Empress, Shiv Marg, Banipark, Jaipur owned by Shri Krishna Vatika Build Mart Private Limited, Jaipur wherefrom following facts are appearing:-
i. The flat was agreed to purchased by the Appellant jointly with his father Shri Nanak Gurbani.
ii. The Agreed consideration of the property was Rs.91,64,348/-+ Service Tax iii. The payment of Purchase consideration was made on the following dates as per Registry of Flat:-
14
IT(IT) A No. 06/JP/2023
Jai Kumar Gurbani vs. DCIT
S.No Cheque/DD No. Dated Amount Name of Bank
1 238231 14-06-2011 5,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
2 238232 24-06-2011 8,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
3 Cash 10-08-2011 9,50,000 -
4 238236 10-12-2012 15,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
5 319110 31-12-2012 22,50,000 ICICI Bank LTD. (Home Loan
Account of Nanak Gurbani)
6 319300 16-01-2013 22,50,000 ICICI Bank LTD(Home Loan
Account of Nanak Gurbani)
7 000033 02-07-2015 5,52,902 HDFC Bank Ltd.
C-Scheme Account of Jai
Kumar Gurbani
8 000032 02-07-2015 4,65,750 HDFC Bank Ltd. C-Scheme,
Account of Jai Kumar
Gurbani
9 000139 05-09-2016 1,71,744 Bank of Baroda VKIA Jaipur,
Account of Nanak Gurbani
Total 94,40,396 Total Sum Paid
From the above all the payment is made in earlier year by the Appellant & his father out of Home Loan granted by ICICI Bank.
Note:- The Cheque of Rs. 1,71,744/- includes TDS of Rs. 91,644/- which has been deposited by seller on behalf of buyer.
That during the year under consideration the buyers of the property had paid only Rs. 1,71,744/- which was paid from the bank account of Shri Nanak Gurbani and in support of the same copy of the bank statement of Shri Nanak Gurbani was also submitted to the learned Assessing officer and rest 15 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT of the payments had been made in years earlier to relevant previous year. Thus the assumption to treat Rs.45,82,174/-as unexplained investment of the Humble Appellant is incorrect & against the facts of the case.
Further the Humble Appellant had not claimed that whole Purchase consideration was paid by Shri Nanak Gurbani. It was only regarding the payment of Rs. 1,71,744/- made during the relevant previous year. The Learned Assessing Officer have not Verified / Examined copy of Registry & Facts stated.
That as per Section 69 "Where in a year the taxpayer has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and he offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, than the value of the investments may be deemed to be the income of the taxpayer of such year". Since the Humble Appellant has proved nature & source of Investments as appeared in both the Registry executed during the year of Flat, Thus the value of Investments cannot be treated as Income of the Taxpayer.
The humble Appellant and his Father Late Shri Nanak Gurbani (co-owner in Jaipur Flat) have given Payment through Account Payee Cheques, submitted the Death Certificate of Late Shri Nanak Gurbani Ji, Purchase Agreement & Registries - the Learned Assessing Officer made the Additions U/s 69 of the Income Tax Act while passing the Order for AY 2017-18 of Humble Appellant.
Saving Bank Interest of Rs. 488/-
That the Humble Appellant received Interest from Bank 68808/-, the same is shown under ITR & Computation thus no Question arises of double Taxation. Further the Income Surrendered, thus eligible to tax Credit of Rs. 151/-.16
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT The Humble Appellant explained the facts / details of Investment but the Ld AO without verifying the facts of the case & made additions as unexplained Investment u/s 69 r.w.s. 115BBE treating undisclosed income under the head other sources of the previous year relevant to the AY 2017-18.
The Learned Assessing Officer have also initiated the Penalty proceedings u/s 270A, 271AAC(1), 272A(1)(d) of the I.T. Act, 1961 in respect of income assessed u/s 69 of the I.T. Act.
The Humble Appellant filed application before dispute resolution panel-I on 26-04-2022 but no decision/ direction issued by the panel is provided to Humble Appellant. That aggrieved with Proposed Draft Order, the Humble Appellant have submitted an Application before DRP to issue direction to Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR. That the Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR without waiting for receipt of direction from DRP have passed the Order & created Huge Demand on Dt 13-05-2022 and Application filled before DRP become infructuous.
That the Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR was aware of the facts, issued Draft Assessment Order U/s 147 forwarded U/s 144C of Income Tax Act 1961 & thereafter passed the Final Order U/s 147 rws 144C(3) of Income Tax Act 1961.
That as per Section 144C is as under:-
Sub section 2:- On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,--
(a) file his acceptance of the variations to the Assessing Officer; or 17 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
(b) file his objections, if any, to such variation with,--
(i) the Dispute Resolution Panel; and
(ii) the Assessing Officer.
Sub section 3:- The Assessing Officer shall complete the assessment on the basis of the draft order, if--
(a) the assessee intimates to the Assessing Officer the acceptance of the variation; or
(b) no objections are received within the period specified in sub-section (2).
That as per Order Sheet Dt 26-04-2022 the learned AO have accepted that the Assessee have Filled Objections but in Order Sheet Dt 13-05-2022 -no response received by the Assessee.
That the Dispute Resolution Panel have not informed the Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR.
That on receipt of Assessment Order the Humble Appellant have no other alternate remedy except to file the Appeal before CIT (A) within Limitation Period.
That the Hon'ble CIT (A) fixed the case for hearing and the Humble Appellant have submitted Reply and Paper Book on Dt 21-08-2022 before Learned CIT(A). That Learned CIT(A) issued Letter to Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR to furnish Report and the Learned Assessing Officer DCIT, CIRCLE (INTL TAX), JAIPUR have furnished Report on 18 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Dt 09-09-2022 and also sent us on 20-09-2022 to file the Objections on or before 28-09-2022.
That in the meantime DCIT (DRP-1), Delhi (Sec) issued Notice Vide DIN & Letter No. ITBA/DRP/F17/2022-23/1045473154(1) Dated 14-09-2022 for Hearing Date 27-09-2022. That the Humble Appellant filled an Application on Dt 22-09- 2022 for withdrawal for the said Application filled before DRP, since as per Law the Humble Appellant can avail either option ie to file an Application to DRP or to file an Appeal before CIT (Appeals) (Refer 6 of Order). The Humble Appellant therefore have withdrawn the Application filled before DRP. Since the DRP have not inform/advice and learned AO passed the order disregarding the Documents /Paper Submitted.
Grounds of Appeal
1. That Learned Assessing Authority grossly erred in Law issuing Notice U/s 148 of Income Tax Act without verifying the facts shown Investment of Rs. 3,29,26,948/- taken twice amount of Registry & TDS Return and have not verified the amount of Registry before issue of Notice & have not applied his mind for opening the Case U/s 148 of Income Tax Act. Thus all the proceedings are void & bad in law.
2. That on the facts and circumstances of the case the Learned Assessing Officer has erred in treating unexplained Investment of the Assessee to the extent of Rs. 1,10,82,319/- without verifying the fact of Registry the payment made in earlier year(Jaipur Flat) and Amount not paid during the year /payable on next year (Pune Flat) have estimated as unexplained Investment U/s 69 of Income Tax Act and levied Tax U/s 115BBE of Act is against Law & Facts of the Case.
19IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
3. That the Income of Deceased person (Father of Assessee) is added in the income of Humble Appellant is against the Law.
4. That the Interest Income on Saving Bank of Rs. 488/- is added in the Total Income of Humble Appellant & disallowance of TDS of Rs. 151/- is against the Law.
5. That as per all the Purchase Agreements / Deeds & Payment have made through Account Payee Cheques which are verified by Ld Assessing Officer, Thus no Question of Addition under Section 69 arises.
6. That Without prejudice to above the Learned Assessing Officer levied 60% Tax instead of 30% against the provision of Law - "not pressed".
7. That the CIT (A) grossly eared in not considering the withdrawal Application filed before DCIT (DRP-1), Delhi (Sec) & rejected the Appeal without considering the Facts, Remand Report & objection submitted by Humble Appellant.
8. That on the facts and circumstances of the case the ld. AO has erred in levying interest under section 234A/234B/234C of the Act- "Interlinked with Ground-1 to 7".
9. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 270A of the Act- "Interlinked with Ground-1 to 7".
10. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 271AAC(1) of the Act- "Interlinked with Ground-1 to 7".
11. That on the facts and circumstances of the case the ld. AO has erred in initiating the penalty under section 272A(1)(d) of the Act. - "Interlinked with Ground-1 to 7".
20IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
12. That further submissions in support of appeal shall be made at the time of hearing.
13. That appellant craves leave to add, amend or alter all or any grounds of appeal before or at the time of hearing.
Written Submission:-
I. That Learned Assessing Authority grossly erred in Law issuing Notice U/s 148 of Income Tax Act without verifying the facts shown Investment of Rs. 3,29,26,948/- taken twice amount of Registry & TDS Return and have not verified the amount of Registry before issue of Notice & have not applied his mind for opening the Case U/s 148 of Income Tax Act.
Thus all the proceedings are void & bad in law.
That the case of humble Appellant was reopened U/s 148 on the reasons:-
a. Payment made in respect of Transfer of Immoveable Property (TDS Form 26QB, Section 194IA amounting to Rs. 1,18,81,300/- b. Purchase of Immovable Property amounting to Rs. 2,10,45,648/-. c. TDS Return -Payment to Non - Residents (Section 195) amounting to Rs. 488/-
The Learned Assessing Officer, Circle (Intel. Tax) Jaipur have issued notice on Incorrect Information finding investment of Rs. 3,29,26,948/- in two properties factully the humble appellant have made registry of one flat at Jaipur Bani park from Shri Krishna Vatika Build Mart Pvt Ltd (Okay Plus Group) with joint owner Late Shri Nanak Gurbani Father of the Assessee the details of payment is given in the registry showing payment of Rs. 1,71,744/- During the Financial Year 2016-17 out of Registry Amount of Rs. 91,64,348/- & balance amount is paid in earlier 21 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT years and the another Registry of Flat situated at Pune from M/s Nahar Homes LLP of Rs. 1,18,81,300/- showing stage wise payment is to be made and as per agreement the humble appellant have paid Rs. 66,43,825/- during the years and remaining amount have paid in next years. Thus the documents relied by learned AO have not properly appreciated and examined for issue of Notice u/s 148 is bad in law as held in following judicial Judgements:-
i) That the Hon'ble HIGH COURT OF GUJARAT incase of Vithalbhai G. Prajapati v. Income-tax officer* Held that "Section 48, read with section 148, of the Income-tax Act, 1961 - Capital gains - Computaion of (Full value of consideration) - Assessment year 2009-10 - During relevant assessment year, assessee along with her four legal heirs had received a sale consideration from sale of a land which had to be taxed as long term capital gain - In response to notice issued by Assessing Officer, assessee filed her return of income - Only declaration in return was of sale of immovable property through which, she had received sale consideration - During assessment, this was a focal point of Assessing Officer - Assessing Officer did not complete assessment and, time for completion of assessment lapsed - Much later, Assessing Officer issued fresh notice of reopening on ground that assessee had showed fair market value of plot of land at higher amount based on valuer's report whereas according to Assessing Officer, fair market value of land was lesser - Therefore, income had escaped assessment - It was noted that during assessment proceedings, assessee had brought on record assessment orders in case of co-owners of land where identical valuation and declarations were accepted - Assessing Officer had no iota of information to 22 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT believe that cost of acquisition of property claimed by assessee at a particular rate was not quite accurate - Whether, on facts, notice for reopening of assessment was based on reasons which were product of non-application of mind; therefore, deserved to be quashed - Held, yes [Paras 9 and 11][In favour of assessee]"
ii) That the Hon'ble HIGH COURT OF PATNA incase of Ravindra Kumar (HUF) @ Rabindra Kumar (HUF) v. Commissioner of Income-tax, Bhagalpur*[2019] 110 taxmann.com 58 (Patna) held that "Section 2(1A), read with section 148, of the Income-tax Act, 1961 -
Agricultural income (Reassessment) - Assessment year 2011-12 - Assessee filed its return of income showing agricultural income of certain amount - Same was accepted and an assessment order was passed - Later on, Assessing Officer noted that an advisory was issued by department wherein Assessing Officer was directed to thoroughly verify claims in respect of agricultural income earned by several parties including assessee - On basis of same, Assessing Officer issued reopening notice against assessee so as to treat its agricultural income as income from undisclosed sources - It was noted that it was fairly informed by revenue that such exercise was initiated in view of an advisory issued by revenue - Such advisory contained in a letter which was issued in light of an order passed by this Court on a public interest litigation and required verification of agricultural income for certain period, which also included assessment year in question - Advisory directed Assessing Officer to verify whether there was any data entry error in returns filed; to provide feedback where assessment was complete and in cases where assessment was pending, to thoroughly verify claims on agricultural income - Whether, 23 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT on facts, reopening was simply founded on advisory issued by department and there was no tangible material in possession of Assessing Officer for formation of belief about escapment of income chargeable to tax, therefore, impugned reopening notice was unjustified - Held, yes [Paras 27, 28 to 31] [In favour of assessee]
iii) That the Hon'ble ITAT MUMBAI BENCH 'B' incase of Income-Tax Officer, 5(1)(2) v. Bidbhanjan Investment & Trading & Co. (P.) Ltd.* [2011] 12 taxmann.com 443 (Mumbai) held that "Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 2000-01 - Whether if there is no rational and intelligible nexus between reasons and belief, an appellate authority is competent to hold that re-assessment proceedings are invalid and liable to be quashed - Held, yes - Assessee filed its return claiming profit on sale of development right in property in question as capital gains - Assessment was, accordingly, processed under section 143(1)
- Subsequently Assessing Officer sought to reopen assessment on assumptions that municipal tax paid by assessee was for conversion of property from factory to shops and marriage halls - Upon re- opening, Assessing Officer found that these assumptions were not true, but he proceeded to complete assessment by treating said amount as business income - Commissioner (Appeals) quashed reassessment proceedings - Whether fact that assessment was not made on strength of recorded reasons, clearly supported case of assessee that reopening was made merely to harass it - Held, yes - Whether since Assessing Officer had re-opened assessment on arbitrary and flimsy grounds and no addition was made on strength 24 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT of such reasons, Commissioner (Appeals) was justified in quashing reassessment proceedings - Held, yes [In favour of assessee]"
iv) That the Hon'ble IN THE ITAT DELHI BENCH 'B' (THIRD MEMBER) incase of Assistant Commissioner of Income-tax, Circle 11(2) v. O.P. Chawla* [2008] 114 ITD 69 (Delhi) (TM) held that "Section 147, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment year 1995-96 - Whether fact that notice of reopening was not prompted by a mere change of opinion cannot save said notice if Assessing Officer had no 'reason to believe' but had only 'reason to suspect' that income chargeable to tax had escaped assessment - Held, yes - Whether an attempt on part of Assessing Officer to probe into return further, without any fresh facts or change in law coming to his notice, would be a case of 'reason to suspect' and not 'reason to believe' - Held, yes -
Assessing Officer processed under section 143(1)(a), return filed by assessee - Thereafter, he reopened assessment under section 147, read with section 148, on ground that balance sheet of assessee revealed that he had received certain amount by way of gift from an NRI for which no details had been filed - Not being satisfied with evidence adduced by assessee in support of gift received, Assessing Officer made addition of gift amount to his income as income from undisclosed sources - Whether since as per section 139(9), there was no legal obligation on assessee to file details in support of return, so-called omission itself could not be treated as a reason for reopening assessment - Held, yes - Whether, therefore, it could be said that reasons recorded by Assessing Officer for reopening of assessment were a mere pretence and an excuse to enquire into gift 25 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT received by assessee, which could at best be said to be 'reason to suspect' and, hence, reopening of assessment was not valid and consequent reassessment made was void ab initio - Held, yes"
v) That the Hon'ble ITAT CALCUTTA BENCH 'A' incase of Raj Kumar Rawlav. Asstt. Commissioner of Income-tax [1992] 42ITD509 (CAL.) Held that "Section 69 of the Income-tax Act, 1961 - Unexplained investment - Assessment year 1975-76 - Whether section 69 is only an inferential and enabling provision empowering the Assessing Officer to add, while computing his income, such investments as may remain unexplained by assessee and cannot be invoked for reopening assessment - Held, yes"
Since in the present case the Learned Assessing Officer have 'reason to suspect' and not 'reason to believe', & to just make fishing enquiry wherein the Return Income is accepted & made the addtions U/s 69 of Income Tax Act. We therefore request you to kindly Quash the Notice U/s 148 of the Income Tax Act & oblige.
We therefore request you to kindly accept the Ground of Appeal.
II. That on the facts and circumstances of the case the Learned Assessing Officer has erred in treating unexplained Investment of the Assessee to the extent of Rs. 1,10,82,319/- without verifying the fact of Registry the payment made in earlier year (Jaipur Flat) and Amount not paid during the year /payable on next year (Pune Flat) have estimated as unexplained Investment U/s 69 of Income Tax Act and levied Tax U/s 115BBE of Act is against Law & Facts of the Case.
a) Investment of Rs.52,37,475/-
26IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT That the Property situated at Pune being flat no. A1-1701,F Residencies, Village Balewadi, High Street, Balewadi, Baner Link Road, Pune- 411045 (Maharashtra). The quantum of this alleged unaccounted investment has been worked out by deducting Rs. 66,43,825 out of agreed sale consideration of Rs. 1,18,81,300.While raising this allegation the Learned Assessing Officer has framed opinion that whole of the agreed sale consideration of Rs. 1,18,81,300 was paid by the assessee during the concerned year itself. The allegation of making an unaccounted investment of Rs. 52,37,475/-seems to has been raised by ignoring all the documents submitted by the Humble Appellant in the assessment proceedings. The Humble Appellant had filed following documents in connection to above said property purchase:-
i) Agreement of the assesse with the developer to purchase said property.
ii) Account statement of the Humble Appellant provided by M/s.Nahar Homes LLP, developer of above project Both the above documents prove that the agreed sale consideration for above property is Rs., 1,18,81,300 + Service Tax, out of which during the previous year relevant to this concerned Assessment Year the Humble Appellant had made payment of Rs.66,43,825 only which is verified by Learned Assessing Officer and rest of the payment has been made in subsequent year(s). The Humble Appellant has even proved the source of payment of above said sum which was made through three cheques for Rs.5,00,000, Rs.20,00,000 and Rs.41,43,825 respectively and no objection was ever raised by Learned Assessing Officer there on during the assessment proceedings.27
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT The Humble Appellant has nowhere claimed about payment by Shri Nanak Gurbani for above said property. This property was purchased by the Humble Appellant as sole owner only and there was no body as co- buyer of the same. Therefore opinion of Learned Assessing Officer to consider a sum of Rs. 52,37,475/-as unexplained investment by the Humble Appellant is without any basis and is not borne out of records as held in following judicial Judgements:-
i) The Hon'ble SUPREME COURT OF INDIA in case of Commissioner of Income-tax *v. P. Mohanakala [2007] 161 Taxman 169 (SC) held that "Section 68 of the Income-tax Act, 1961 - Cash credits -
Assessment years 1993-94 to 1996-97 - Assessing Officer rejected explanation of assessees that amounts credited in their respective accounts were gifts from NRI and added said amount to income of assessees as income from undisclosed sources, on ground that so called gifts were not real and genuine - On appeal, Commissioner (Appeals) as well as Tribunal did not accept explanation of assessee and confirmed finding of Assessing Officer - High Court, however, reappreciated evidence available on record and substituted its own findings for that of Tribunal - High Court held that reasons assigned by Tribunal and other authorities were in realm of surmises, conjectures and suspicions - Whether since findings of fact arrived at by authorities below were based on proper appreciation of facts, material available on record and surrounding circumstances, High Court committed error in disturbing concurrent findings of facts - Held, yes"
ii) The Hon'ble HIGH COURT OF KARNATAKA incase of Commissioner of Income-tax V. Vijayanand Roadlines Ltd.* [2014] 42 taxmann.com 28 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT 409 (Karnataka) held that "Section 69 of the Income-tax Act, 1961 -
Unexplained investments (Investment in immovable property) - Assessment year 2003-04 - Assessing Officer made certain addition on assessee-transporter's income, considering difference of cost of building and interest of previous year as 'unexplained investments' - Assessing Officer had not considered details of expenses incurred by assessee for previous year - Whether matter was required to be reconsidered by Assessing Officer afresh, after providing an opportunity to assessee to explain expenditure incurred by him for previous year - Held, yes [Para 4] [Matter remanded]"
iii) The Hon'ble THE ITAT KOLKATA BENCH 'SMC' incase of Ashutosh Jha v. Income-tax Officer, Ward 2(5), Ranchi* [2021] 129 taxmann.com 204 (Kolkata - Trib.) IN held that "Section 56 of the Income-tax Act, 1961 - Income from other sources - Chargeable as [Sub-section (2)(vii)(b)] - Assessment year 2014-15 - Assessee entered into an agreement for purchase of a property and made part payment for purchase through cheque on very next day after date of execution of agreement - Registry was done after a year - Assessing Officer made addition on account of difference between amount of sale consideration shown in agreement and stamp value of property noting that as per section 56(2)(vii)(b) value of consideration mentioned in agreement to purchase could be relevant only if amount of consideration referred to in agreement or a part thereof, was paid by any mode other than cash on or before date of agreement for transfer of property, however, in instant case payment was made on next day - It was noted that part payment made by cheque on very next day of execution of 29 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT agreement by assessee was very much towards fulfilment of terms of purchase contract itself - Therefore, Assessing Officer was not justified in taking a hyper technical view - Further, facts of case showed that there was no mala fide or false claim on part of assessee - Whether, on facts, impugned addition made by Assessing Officer taking difference between amount of sale consideration shown in agreement and stamp value to income of assessee by invoking section 56(2)(vii)(b) was unjustified and, accordingly, same was to be deleted - Held, yes[Paras 7 and 8] [In favour of assessee]"
iv) The Hon'ble ITAT JAIPUR BENCH 'B' incase of Assistant Commissioner of Income-tax v. Swami Complex (P.) Ltd. [2008] 23 SOT 27 (Jaipur) (URO) held that "Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 2001-02 - Assessee had purchased a plot of land for a certain consideration - Assessing Officer on basis of valuation of land adopted by Sub- Registrar for purpose of stamp duty and further on basis of DVO's report made in case of selling of land estimated value of land on a higher amount than disclosed by assessee - He, therefore, added differential amount to income of assessee under section 69 as unexplained expenditure - Whether sale consideration of a property agreed upon by parties depends upon several factors, like locality, size, availability, etc., of properties, besides needs of parties and it is always negotiable and, hence, same cannot be equated with general value fixed for purpose of payment of stamp duty - Held, yes
- Whether since in instant case there was no positive evidence that assessee had actually paid more them consideration than shown in sale deed for purchase of land, Assessing Officer was not justified in 30 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT valuing land on a higher amount as per DVO's report in case of seller and value adopted by Sub-Registrar for purpose of stamp duty - Held, yes - Whether, therefore, impugned addition made to income of assessee was not justified and was liable to be deleted - Held, yes"
We therefore request you to kindly accept the Ground of Appeal.
b) Stamp Duty of Rs.12,62,670/-
No such evidence was ever sought from the Humble Appellant during the assessment proceedings. Right from initiation of the assessment proceedings the Learned Assessing Officer had been raising queries about the investment of the quantum which was made the basis of initiation of reassessment proceedings and the Assesse had submitted all relevant documents in connection thereto. The Assesse had made following payments for registration of sale deeds/ Agreements:-
A. For property at Pune Rs. 7,44,060/-
(Taken by Learned Assessing Officer Rs.7,12,900/-) B. For property at Bani Park, Jaipur Rs. 6,41,920/-
( Taken by Learned Assessing Officer Rs.5,49,770/-) Regarding payment of Rs. 7,44,060 in respect of stamp duty of property situated at Pune is concerned a sum of Rs. 7,42,900 was paid by the developer and the same has been debited by the developer on Dt 11-02-2017 in the Account Statement of the Humble Appellant. Even in the Registered Agreement also in para 59 the fact of payment of stamp duty is duly mentioned and such sum of Rs. 7,42,900 has been adjusted out of payment of Rs. 66,43,825 made by the Humble Appellant to the developer during the concerned year. The brother of 31 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Humble Appellant had paid a petty sum of Rs. 1,160 in cash out of balance available with him.
Regarding payment of Rs. 6,41,920 in respect of stamp duty for property situated at Jaipur (Bani Park) is concerned the same was arranged and paid by Late Shri Nanak Gurbani, father of the Humble Appellant who was also co owner of the property. It is also relevant to mention that payment of the stamp duty was made on 06-09-2016 and the registration of the sale deed was also made on that day itself and on this date the assessee was not in India as his relative Power of Attorney Holder Shri Girish Gurbani had signed this Deed as Power of Attorney Holder of the Humble Appellant. Hence there cannot be any presumption about payment made by the Humble Appellant. The capacity of payment of stamp duty by Shri Nanak Gurbani stands proved with the fact that he was also an Income Tax Assessee having PAN :
ABEPG0467C and he had filed his ITR for the AY 2017-18 on 11-11-2017. Shri Nanak Gurbani was partner in one M/.s Jay Pee Industries and he had received Partners Remuneration of Rs. 1,50,000 and interest on Partner's Capital at Rs. 2,96,282 from the above named firm. Shri Nanak Gurbani had unfortunately expired on Dt 09-03-2019. The ITRV and computation of income of Shri Nanak Gurbani for the AY2017-18 has been submitted before the Learned Assessing Officer to justify the source of payment of said sum of Rs. 6,41,920/-, the Additions made in Appellant case is against Facts & Law as held in following judicial Judgements:-
i) The Hon'ble ITAT DELHI BENCH 'SMC-1' incase of Ashish Bhardwaj v.
Income-tax Officer, Ward-36(4), New Delhi* [2021] 130 taxmann.com 197 (Delhi - Trib.) held that "I. Section 69A, read with section 148, of the Income- tax Act, 1961 - Unexplained investments (Immovable property) - Assessment year 2011-12 - An information was received that assessee 32 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT had purchased an immovable property amounting to Rs. 49.97 lakhs during year - On basis of same, Assessing Officer issued a reopening notice against assessee - He further noted that an amount of Rs. 3.50 lakhs was spent towards stamp duty for purchase of such property - He completed reassessment wherein he only made addition of Rs. 3.50 lakhs being stamp duty incurred for purchase of immovable property as unexplained investment - It was noted that admittedly Assessing Officer had not made any addition on account of purchase of immovable property amounting to Rs. 49.97 lakhs meaning thereby he had accepted source of that huge amount - So far as amount towards stamp duty was concerned, it was found that property was owned by assessee jointly with his wife, namely, VB and said entire amount towards stamp duty was actually paid by VB and said fact was also brought forward before Assessing Officer - Assessing Officer had himself given a finding that VB had made cash payment towards stamp duty as per records maintained by seller of property - Therefore, there was no reason for making addition in hands of assessee - Whether, on facts, impugned addition made in hands of assessee was to be deleted - Held, yes [Para 13] [In favour of assessee]"
ii) That Hon'ble ITAT JODHPUR BENCH incase of Om Prakash Joshi v. Income-
tax Officer* [2009] 34 SOT 33 (Jodhpur) (URO) held that "Section 69 of the Income-tax Act, 1961 - Unexplained investments - Assessment year 2004- 05 - Assessee had madepayment of Rs. 1.32 lakhs as stamp duty - He explained that said payment was made out of advance of Rs. 2 lakhs which was reflected in balance sheets and for which only accounting adjustment remained to be made - Assessing Officer treated said amount as unexplained investment under section 69 which was confirmed by Commissioner (Appeals)
- Whether since assessee had explained that stamp duty was paid by him out 33 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT of advance amount as reflected in balance sheet and only accounting adjustment remained to be made, in such situation without bringing any adverse material on record, Assessing Officer was not justified in making addition - Held, yes"
We therefore request you to kindly accept the Ground of Appeal.
c) Unexplained investment by calculating 50% of the total agreed sale consideration of Rs. 91,64,348 ie Rs.45,82,174/-
That the Learned Assessing Officer suomoto treated Rs. 45,82,174/-as unexplained investment by estimating 50% of the total agreed Purchase consideration of Rs. 91,64,348 for the property situated at Shiv Marg, Banipark, Jaipur. The Learned Assessing Officer has himself agreed in draft order that the Humble Appellant has claimed that whole amount for the purchase has been paid by Shri Nanak Gurbani and in absence of proving capacity of father of the Assesse Shri Nanak Gurbani 50% of the agreed sale consideration has been proposed to be considered as unexplained investment of the Humble Appellant. That the Humble Appellant had submitted copy of the registered Sale Deed of the Property bearing flat no.206, Okay Plus, Empress, Shiv Marg, Banipark, Jaipur owned by Shri Krishna Vatika Build Mart Private Limited, Jaipur wherefrom following facts are appearing:-
i. The flat was agreed to purchased by the Appellant jointly with his father Shri Nanak Gurbani.
ii. The Agreed consideration of the property was Rs.91,64,348/-+ Service Tax iii. The payment of Purchase consideration was made on the following dates as per Registry of Flat:-34
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT S.No Cheque/DD No. Dated Amount Name of Bank 1 238231 14-06-2011 5,00,000 Jai Kumar Gurbani Bank of Baroda Vidhyadhar Nagar 2 238232 24-06-2011 8,00,000 Jai Kumar Gurbani Bank of Baroda Vidhyadhar Nagar 3 Cash 10-08-2011 9,50,000 -
4 238236 10-12-2012 15,00,000 Jai Kumar Gurbani Bank of Baroda Vidhyadhar Nagar 5 319110 31-12-2012 22,50,000 ICICI Bank LTD. (Home Loan Account of Nanak Gurbani) 6 319300 16-01-2013 22,50,000 ICICI Bank LTD(Home Loan Account of Nanak Gurbani) 7 000033 02-07-2015 5,52,902 HDFC Bank Ltd.
C-Scheme Account of Jai
Kumar Gurbani
8 000032 02-07-2015 4,65,750 HDFC Bank Ltd. C-Scheme,
Account of Jai Kumar
Gurbani
9 000139 05-09-2016 1,71,744 Bank of Baroda VKIA Jaipur,
Account of Nanak Gurbani
Total 94,40,396 Total Sum Paid
From the above all the payment is made in earlier year by the Appellant & his father out of Home Loan granted by ICICI Bank.
Note:- The Cheque of Rs. 1,71,744/- includes TDS of Rs. 91,644/- which has been deposited by seller on behalf of buyer.
That during the year under consideration the buyers of the property had paid only Rs. 1,71,744/- which was paid from the bank account of Shri Nanak Gurbani and in support of the same copy of the bank statement of Shri Nanak Gurbani was also submitted to the learned Assessing officer and rest 35 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT of the payments had been made in years earlier to relevant previous year. Thus the assumption to treat Rs.45,82,174/-as unexplained investment of the Humble Appellant is incorrect & against the facts of the case.
Further the Humble Appellant had not claimed that whole Purchase consideration was paid by Shri Nanak Gurbani. It was only regarding the payment of Rs. 1,71,744/- made during the relevant previous year. The Learned Assessing Officer have not Verified / Examined copy of Registry & Facts stated.
That as per Section 69 "Where in a year the taxpayer has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and he offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, than the value of the investments may be deemed to be the income of the taxpayer of such year". Since the Humble Appellant has proved nature & source of Investments as appeared in both the Registry executed during the year of Flat, Thus the value of Investments cannot be treated as Income of the Taxpayer.
The humble Appellant and his Father Late Shri Nanak Gurbani (co-owner in Jaipur Flat) have given Payment through Account Payee Cheques, submitted the Death Certificate of Late Shri Nanak Gurbani Ji, Purchase Agreement & Registries - the Learned Assessing Officer made the Additions U/s 69 of the Income Tax Act while passing the Order for AY 2017-18 of Humble Appellant. The Additions made in Appellant case is against Facts & Law as held in following judicial Judgements:-
i) That the Hon'ble ITAT JAIPUR BENCH incase of Smt. Renu Agarwal v. Assistant Commissioner of Income-tax, Central Circle-3, Jaipur* 36 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT [2017] 88 taxmann.com 872 (Jaipur - Trib.) held that Section 69 of the Income-tax Act, 1961 - Unexplained investments (Immovable property) - Assessment year 2009-10 - Where seller had given a statement on oath that he had received Rs. 65 lakhs only from assessee on sale of land and that agreement to sell plot of land after carrying out construction for Rs. 1.41 crore was cancelled, in absence of any evidence of payment of any on-money on purchase of vacant plot, lower authorities had erred in confirming addition of differential amount on account of unexplained investment in purchase of plot [In favour of assessee]
ii) That the Hon'ble HIGH COURT OF DELHI Commissioner of Income-
tax-XIV v. Vivek Aggarwal* [2015] 56 taxmann.com 7 (Delhi) held that "Section 69, read with section 158BB of the Income-tax Act, 1961
- Unexplained investments (Purchase of property) - Block assessment years 2001-02 to 2007-08 - Assessee purchased a property for a consideration of Rs. 3.70 lakh - During course of block assessment proceedings, Assessing Officer rejected transaction value and referred matter to AVO who in his report valued property at Rs. 10.65 lakh - Accordingly, addition of Rs. 6.95 lakh was made to assessee's income
- Tribunal, however, set aside said addition - Whether in absence of any incriminating evidence with respect to payment over and above reported amount, it could not be concluded that transaction relating to property in question was undervalued, and, therefore, impugned order deleting addition was to be confirmed - Held, yes [Para 17] [In favour of assessee]"
iii) The Hon'ble IN THE ITAT COCHIN BENCH M.M. Sulaiman v.
Assistant Commissioner of Income-tax* [2014] 51 taxmann.com 310 37 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT (Cochin - Trib.) held that "I. Section 69, read with sections 132 and 153A, of the Income-tax Act, 1961 - Unexplained investments (Property) - Assessment year 2001-02 - Whether amount of total income and agricultural income declared by assessee aggregating to Rs.2.50 lakhs was sufficient enough to explain sources for Rs.50,000, hence, there was no justification in confirming addition of said amount - Held, yes [Para 9] [In favour of assessee] II. Section 69, read with sections 132 and 153A, of the Income-tax Act, 1961 - Unexplained investments (Purchase of car) - Assessment year 2002-03
- Consequent to search, Assessing Officer made an addition on account of investment made by assessee in purchase of car stating that assessee could not explain sources for purchasing car - Whether since department did not unearth any material to show that assessee had purchased vehicle during relevant assessment year, Commissioner (Appeals) was justified in deleting addition - Held, yes [Para 19.2] [In favour of assessee] III. Section 69, read with section 132 of the Income-tax Act, 1961 - Unexplained investments (Purchase of property) - Assessment year 2002-03 - Assessee proved that investment in purchase of impugned property was made out of money returned by two parties with whom he carried out financial transactions - Whether since fund was available with assessee at relevant time, additions made by Assessing Officer towards unexplained investment in property were not maintainable and Assessing Officer was to be directed to delete same - Held, yes [Paras 20.2 & 20.3] [In favour of assessee] IV. Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Bank deposits) - Assessment year 2002-03 - Whether revenue having 38 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT accepted purchase of property by assessee, a real estate broker for Rs. 19 lakhs, claim of sale of same for Rs. 21 lakhs and deposit of same in bank was to be accepted - Held, yes - Whether since Assessing Officer, in immediately succeeding year, has accepted submission of assessee that bank deposits represented advances received from various persons in respect of his real estate business, loans availed by him and commission received, same was to be accepted for current year also - Held, yes [Para 23] [In favour of assessee] V. Section 153A, read with section 69, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Profit on sale of estate) - Assessment year 2003-04 -
Assessee purchased 101.50 acres of land, converted same in small plots and sold them - As total 83.22 acres of plots were sold, Assessing Officer in computing gains, deducted cost pertaining to 83.22 acres - Assessee's case was that 18.28 acres of land was used for creating internal roads for converting land into plots, hence entire cost of Rs. 101.50 acres was to be deducted - Since, assessee's claim of compensation of 18.28 acres of land for creating internal roads was not substantiated, Commissioner (Appeals) deducted an additional amount of Rs. 5 lakhs towards roads - Whether, there was no infirmity in order of Commissioner (Appeals) - Held, yes [Paras 29.1 & 29.2] [Partly in favour of assessee] VI. Section 69, read with section 153A, of the Income-tax Act, 1961 - Unexplained investments (Purchase of property) - Assessment year 2004-05 - Whether assessee had reconciled payments made for purchase of rubber estate and assessee's explanations were supported by statements given by person from whom he had taken money, as well as by letter 39 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT given by bank which issued demand draft, additions were rightly deleted by Commissioner (Appeals) - Held, yes [Para 30.6] [In favour of assessee] VII. Section 69 of the Income-tax Act, 1961 - Unexplained investments (Purchase of car) - Assessment year 2004-05
- Assessee had purchased a car during relevant year - As, assessee could not substantiate his claim of having received loan for purchasing car, Assessing Officer treated above said investment in purchase of car as income of assessee and made additions - Whether since assessee had declared additional income of Rs.15 lakhs during year under consideration and same should be available with him for making investments; cost of car being Rs.5.70 lakhs, could have been funded through this additional income - Held, yes - Whether, thus, Commissioner (Appeals) was justified in giving telescoping benefit - Held, yes [Para 31.1] [In favour of assessee] VIII. Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Peak credit in banks) - Assessment year 2004-05 - Assessing Officer noticed huge transactions in various bank accounts maintained by assessee - In absence of details, Assessing Officer computed peak credit balance at Rs.98.65 lakhs and assessed same as income of assessee - Whether in absence of corresponding asset/expense vis-à- vis alleged income, it would not be proper to presume that entire amount of deposits made into bank account represented current income of assessee - Held, yes - Whether Assessing Officer having accepted for previous year that deposits found in bank accounts relate to transactions carried by assessee in his real estate and vehicle brokerage business, same logic was to be extended for current year also - Held, yes - Whether thus Assessing Officer was to 40 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT be directed to delete additions relating to bank deposits - Held, yes [Paras 32.4 & 32.7] [In favour of assessee] IX. Section 69 of the Income-tax Act, 1961 - Unexplained investments (Purchase of car)
- Assessment year 2005-06 - Whether, where assessee had explained that payments made by him for purchase of cars were from several car loans taken from banks, Commissioner (Appeals) had rightly deleted addition - Held, yes [Para 36.4] [In favour of assessee] XIII. Section 153A of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Premium income) - During course of search, a receipt was found, which suggested that assessee would be entitled to receive Rs. 3.95 crore as premium - However, during course of assessment proceeding, assessee filed a copy of revocation agreement entered by assessee with proposed buyers which stated that buyers had given a sum of Rs.3.42 crores to assessee - Receipt mentioned about 'payment due' and not actual payment, where as revocation agreement mentioned about actual payment made - Whether, premium amount had to be taken as Rs.3.42 crore only, as mentioned in revocation agreement - Held, yes [Para 52] [In favour of assessee]"
iv) The Hon'ble SUPREME COURT OF INDIA incase of KishinchandChellaramv. Commissioner of Income-tax* [1980] 4 Taxman 29 (SC) held that "Section 23(3) of the Indian Income-tax Act, 1922 [Corresponding to section 143(3) of the Income-tax Act, 1961] - Assessment - Income from undisclosed sources - Employee of one office of assessee made, through a bank, telegraphic transfer of certain amount to employee of another office - ITO, on the basis of letters from bank manager, not shown to assessee, treated amount 41 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT so remitted as income from undisclosed sources - Tribunal, relying on letters of bank manager, upheld ITO's action - Whether tribunal justified - Held, on facts, no - Whether burden of proof lay on department to show that remitted amount belonged to assessee by bringing proper evidence - Held, yes"
v) That the Hon'ble THE ITAT MUMBAI BENCH 'F' incase of Mukesh R. Maroliav. Addl. Commissioner of Income-tax, Rg-15(2) [2006] 6 SOT 247 (Mumbai)[15-12-2005] held that "Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 2001-02 - Assessing Officer treated certain amount, deposited in bank account of assessee's minor daughter, as unexplained cash credit under section 68 and added same to income of assessee - Assessing Officer rejected explanation of assessee that said amount was gifted to his daughter by his brother, who was a non-resident, and payment was routed through NRE account - Whether since remittance of money was supported by banking documents, there was no reason to disbelieve version of assessee and make an addition thereof - Held, yes - Whether, therefore, said addition was liable to be deleted - Held, yes"
vi) THE Hon'ble ITAT COCHIN BENCH (THIRD MEMBER) incase of K. Moidu v. Assistant Commissioner of Income-tax[2002] 81 ITD 242 (COCHIN) (TM) held that "Section 158B of the Income-tax Act, 1961 -
Block assessment in search cases - Undisclosed income - Block assessment years 1987-88 to 1997-98 - Assessees were non-resident Indians carrying on business outside India - They had made considerable remittances to their NRE accounts in India - During relevant period, they had purchased immovable properties and constructed various buildings in India - Department carried out a 42 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT search operation under section 132 at residential premises of assessees in India on suspicion of undervaluation and 'on money' payments in respect of such purchases - Subsequently, Assessing Officer initiated assessment proceedings under section 158BC and found that actual consideration paid by assessees for acquiring immovable properties was more than ostensible consideration mentioned in registration documents - Difference in above two considerations was treated by him as undisclosed income in hands of assessees - Similarly, Assessing Officer made further additions under Chapter XIV-B by estimating cost of construction of buildings at a rate higher than that conceded by assessees and treating difference as undisclosed income - He further made addition on account of additional estimate made by him against personal expenses of assessees' family residing in India and on account of reduction made by him in estimated agricultural income declared by assessees - Assessees had no known sources of income in India - Whether there was no case of undisclosed income in respect of understatement of purchase consideration since entire 'on- money' payments made against all purchases were covered by NRE remittances sent by assessees - Held, yes - Whether there is any scope for general estimation in block assessment in absence of specific and speaking materials - Held, no - Whether generally in a block assessment estimated additions cannot be justified - Held, yes - Whether there being no incriminating materials to prove that assessees had expended money in excess of amount admitted by them to have been spent for constructing various buildings and also no evidence in support of estimates made by Assessing Officer in 43 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT respect of personal expenses and agricultural income, additions were unjustified and unsustainable and, consequently, there was no case of undisclosed income - Held, yes"
vii) The Hon'ble HIGH COURT OF GUJARAT incase of Income-tax Officer v. Bharat A. Mehta* [2015] 60 taxmann.com 31 (Gujarat) held that "Section 69 of the Income-tax Act, 1961 - Unexplained investment (Investment in property) - Assessment year 1992-93 -
Assessee purchased a bunglow in a housing scheme from a builder firm during search, partners of said firm admitted having received certain amount as 'on money' from buyers of bunglows in said scheme - On basis of that material Assessing Officer made certain addition under section 69 to income of assessee on account of 'on money' paid to builders - On appeal, Tribunal deleted addition holding that revenue failed to prove that assessee had made undisclosed investment in aforesaid bunglow - Whether as findings recorded by Tribunal were based on appreciation of facts, no interference was called for - Held, yes [Paras 9 and 10] [In favour of assessee]"
viii) The Hon'ble HIGH COURT OF JHARKHAND incase of Prayag Tendu Leaves Processing Co. v. Commissioner of Income-tax.* [2017] 88 taxmann.com 23 (Jharkhand) held that "Section 68 of the Income-tax Act, 1961 - Cash credits (Gifts) - Assessment year 2001-
02 - Whether under section 68, Assessing Officer, while assessing a partnership firm, can go behind source of income of partnership firm, but he cannot go to 'source of source' - Held, yes - Whether where assessee has given supporting material evidencing gift or amount received from particular person with necessary documents, such as, copies of demand drafts and cheques etc., no addition could have 44 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT been made by Commissioner in respect of amount received by assessee - Held, yes [Paras 6 & 7] [In favour of assessee]"
ix) That the Hon'ble HIGH COURT OF GUJARAT incase of Principal Commissioner of Income-tax-2 v. D & H Enterprises* [2016] 72 taxmann.com 91 (Gujarat) held that "Section 68, read with section 131, of the Income-tax Act, 1961 - Cash credit (Advance) -
Assessment years 2006-07 and 2007-08 - In scrutiny, it was revealed that assessee had shown advances from 84 persons towards investment in land - Assessee submitted that these were received as advance booking amounts through cheques in ordinary course of business - Assessee had filed confirmations of all persons, copies of their bank statements, income tax returns, etc. - Assessing Officers was not satisfied and made additions of certain amounts for both assessment years - Whether since Assessing Officer could have easily verified these sums from details available, merely because summons could not be served upon some parties or they did not appear before him, transactions could not be held to be non-genuine - Held, yes [Para 7][In favour of assessee]"
We therefore request you to kindly accept the Ground of Appeal.
III. That the Income of Deceased person is added in the income of Humble Appellant is against the Law.
That the case of the Humble Appellant was reopened on the basis of :-
"As per data available on the ITBA portal classified under Multi Year NMS category, it is found that the assessee had made financial transactions of Rs.3,29,27,436/- during the F.Y. 2016-17 and not filed 45 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT return of income for the A. Y. 2017-18. The detail of the financial transaction made by the assessee during the F.Y. 2016-17 is as under :-
1. Payment made in respect of transfer of immovable property (TDS Form 26QB, Section 194IA amounting to Rs. 1,18,81,300/-
2. Purchase of immovable property amounting to Rs. 21045648/-
3. TDS Return - payment to Non-residents ( Section 195) amounting to Rs. 488/- "
(Refer Page No. 8 & 37 of Supplementary Paper Book Dt 15-05-2023) That the Learned Assessing Officer issued Show Cause Notice on Dt 19- 03-2022 (Refer Page No. 31 of Supplementary Paper Book) wherein Accepted 2,10,45,648/- & proposed the Additions of Rs. 1,18,81,300/- on Account of Point No. 1 of reasons of Reopening of the case.
That the Learned Assessing Officer issued the Draft Assessment Order on Dt 27-03-2022 wherein proposed Additions of Rs. 1,10,82,807/- (Point 5.1 Rs. 1,10,82,319/- + Point 5.2 Rs. 488/-Refer page No. 26 of Supplementary Paper Book) as per below:-
5.1 The claim of the assessee is not acceptable for the following reasons:
1. The assessee has not produced any documentary evidence regarding the payment of Rs. 52,37,475/- (11881300- 6643825). Also, the assessee has claimed that this payment of Rs. 52,37,475/- was made by his father, Mr. Nanak Gurbani. Also, assessee is the sole owner of this property and claiming that he has only made payment of Rs. 66,43,825/- and rest of the payment is made by his father Mr. 46 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Nanak Gurbani. The assessee has failed in furnishing documentary evidence regarding the capacity of payment of his father and relevant bank a/c statements have also not been furnished by the assessee.
Hence, the source of investment of Rs. 52,37,475/- is remained unexplained.
2. The assessee has also failed in furnishing evidence regarding the source of payments made against stamp duty of Rs. 12,62,670/- for both the properties mentioned above.
3. The possibility of the fact that whole of the invested amount is originally transferred by Mr. Jai Kumar Gurbani into the bank a/c of Mr. Nanak Gurbani also can not be denied considering that the account balance of Mr. Nanak Gurbani during the F.Y. 2016-17 is continuously very low.
4. In the property, Flat no. 206, assessee is the joint owner and claiming that whole of the payment is made by assessee's father. The assessee has failed in furnishing documentary evidence regarding the capacity of payment of his father and relevant bank A/c statements have also not been furnished by the assessee. Hence, the source of investment of Rs. 45,82,174/- (91,64,348/2) is remained unexplained. Hence, on basis of the discussion made above, the amount of investment of Rs. 1,10,82,319/- (5237475+1262670+45,82,174) is remained unexplained and comes under the purview of unexplained investment u/s 69 of the I.T. Act, 1961 and the same is hereby added back to the total income of the assessee for A.Y. 2017-18. Also, as the assessee did not file original ITR for the A.Y. 2017-18 and filed 47 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT ITR only in response to the notice u/s 148 of the Act, hence, TDS credit is hereby disallowed.
[Addition:- Rs. 1,10,82,319/-] Penalty u/s 271AAC(1) r.w.s. 115BBE is initiated separately on this issue.
5.2 During the year the assessee has earned interest on saving Bank a/c total amounting to Rs. 488/- which has not been declared by the assessee in computation/ITR submitted, hence, the same is hereby added to the total income of the assessee.
[Addition: Rs. 488/-] Para wise reply as per below:-
1. In this regard we like to inform that the Humble Appellant have paid only Rs. 66,43,825/- & the rest payment is payable in future Years as per payment schedule (refer page No 70 of Main Paper book), thus the remarks were incorrectly made.
2. No such evidence was ever sought from the Humble Appellant during the assessment proceedings. Right from initiation of the assessment proceedings the Learned Assessing Officer had been raising queries about the investment of the quantum which was made the basis of initiation of reassessment proceedings and the Assesse had submitted all relevant documents in connection thereto. The Assesse had made following payments for registration of sale deeds/ Agreements:-
C. For property at Pune Rs. 7,44,060/-
48
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(Taken by Learned Assessing Officer Rs.7,12,900/-) D. For property at Bani Park, Jaipur Rs. 6,41,920/-
(Taken by Learned Assessing Officer Rs.5,49,770/-) Regarding payment of Rs. 7,44,060 in respect of stamp duty of property situated at Pune is concerned a sum of Rs. 7,42,900 was paid by the developer and the same has been debited by the developer on Dt 11-02-2017 in the Account Statement of the Humble Appellant. Even in the Registered Agreement also in para 59 the fact of payment of stamp duty is duly mentioned and such sum of Rs. 7,42,900 has been adjusted out of payment of Rs. 66,43,825 made by the Humble Appellant to the developer during the concerned year. The brother of Humble Appellant had paid a petty sum of Rs. 1,160 in cash out of balance available with him.
Regarding payment of Rs. 6,41,920 in respect of stamp duty for property situated at Jaipur (Bani Park) is concerned the same was arranged and paid by Late Shri Nanak Gurbani, father of the Humble Appellant who was also co owner of the property. It is also relevant to mention that payment of the stamp duty was made on 06-09-2016 and the registration of the sale deed was also made on that day itself and on this date the assessee was not in India as his relative Power of Attorney Holder Shri Girish Gurbani had signed this Deed as Power of Attorney Holder of the Humble Appellant. Hence there cannot be any presumption about payment made by the Humble Appellant. The capacity of payment of stamp duty by Shri Nanak Gurbani stands proved with the fact that he was also an Income Tax Assessee having PAN : ABEPG0467C 49 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT and he had filed his ITR for the AY 2017-18 on 11-11-2017. Shri Nanak Gurbani was partner in one M/.s Jay Pee Industries and he had received Partners Remuneration of Rs. 1,50,000 and interest on Partner's Capital at Rs. 2,96,282 from the above named firm. Shri Nanak Gurbani had unfortunately expired on Dt 09-03-2019. The ITRV and computation of income of Shri Nanak Gurbani for the AY2017-18 has been submitted before the Learned Assessing Officer to justify the source of payment of said sum of Rs. 6,41,920/-, the Additions made in Appellant case is against Facts & Law.
3. Imagination of Learned Assessing Officer, which is against the facts of the case- no notice is issued to Shri Nanak Gurbani. Who has expired on Dt 06-03-2019.
4. That we are submitting herewith payment schedule annexed to main Paper Book (refer Page No. 61) wherein the details of Payments were informed to learned Assessing Officer.
Further the Learned AO while submitting Remand Report -refer Page No 4 of supplementary Paper Book para 6 is as under:-
"this loan Account is in the name .......................hence, the additional evidence produced pertain s to the other half part of the Sale consideration paid by the assessee's father which is not a part of the addition made."
5.2 that the Humble Appellant has earned interest on saving Bank a/c total amounting to Rs. 488/- which has been declared by the assessee in computation/ITR submitted, hence, the interest is twice added to the total income of the assessee.
50IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT That the Learned Assessing Officer suomoto treated Rs. 45,82,174/-as unexplained investment by estimating 50% of the total agreed Purchase consideration of Rs. 91,64,348 for the property situated at Shiv Marg, Banipark, Jaipur. The Learned Assessing Officer has himself agreed in draft order that the Humble Appellant has claimed that whole amount for the purchase has been paid by Shri Nanak Gurbani and in absence of proving capacity of father of the Assesse Shri Nanak Gurbani 50% of the agreed sale consideration has been proposed to be considered as unexplained investment of the Humble Appellant. That the Humble Appellant had submitted copy of the registered Sale Deed of the Property bearing flat no.206, Okay Plus, Empress, Shiv Marg, Banipark, Jaipur owned by Shri Krishna Vatika Build Mart Private Limited, Jaipur wherefrom following facts are appearing:-
i. The flat was agreed to purchased by the Appellant jointly with his father Shri Nanak Gurbani.
ii. The Agreed consideration of the property was Rs.91,64,348/-+ Service Tax iii. The payment of Purchase consideration was made on the following dates as per Registry of Flat:-
S.No Cheque/DD No. Dated Amount Name of Bank
1 238231 14-06-2011 5,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
2 238232 24-06-2011 8,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
3 Cash 10-08-2011 9,50,000 -
4 238236 10-12-2012 15,00,000 Jai Kumar Gurbani Bank of
Baroda Vidhyadhar Nagar
5 319110 31-12-2012 22,50,000 ICICI Bank LTD. (Home Loan
Account of Nanak Gurbani)
51
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Jai Kumar Gurbani vs. DCIT
6 319300 16-01-2013 22,50,000 ICICI Bank LTD(Home Loan
Account of Nanak Gurbani)
7 000033 02-07-2015 5,52,902 HDFC Bank Ltd.
C-Scheme Account of Jai
Kumar Gurbani
8 000032 02-07-2015 4,65,750 HDFC Bank Ltd. C-Scheme,
Account of Jai Kumar
Gurbani
9 000139 05-09-2016 1,71,744 Bank of Baroda VKIA Jaipur,
Account of Nanak Gurbani
Total 94,40,396 Total Sum Paid
From the above all the payment is made in earlier year by the Appellant & his father out of Home Loan granted by ICICI Bank.
Note:- The Cheque of Rs. 1,71,744/- includes TDS of Rs. 91,644/- which has been deposited by seller on behalf of buyer.
That during the year under consideration the buyers of the property had paid only Rs. 1,71,744/- which was paid from the bank account of Shri Nanak Gurbani and in support of the same copy of the bank statement of Shri Nanak Gurbani was also submitted to the learned Assessing officer and rest of the payments had been made in years earlier to relevant previous year. Thus the assumption to treat Rs.45,82,174/-as unexplained investment of the Humble Appellant is incorrect & against the facts of the case.
Further the Humble Appellant had not claimed that whole Purchase consideration was paid by Shri Nanak Gurbani. It was only regarding the payment of Rs. 1,71,744/- made during the relevant previous year.52
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT The Learned Assessing Officer have not Verified / Examined copy of Registry & Facts stated.
That as per Section 69 "Where in a year the taxpayer has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and he offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, than the value of the investments may be deemed to be the income of the taxpayer of such year". Since the Humble Appellant has proved nature & source of Investments as appeared in both the Registry executed during the year of Flat, Thus the value of Investments cannot be treated as Income of the Taxpayer.
The humble Appellant and his Father Late Shri Nanak Gurbani (co- owner in Jaipur Flat) have given Payment through Account Payee Cheques, submitted the Death Certificate of Late Shri Nanak Gurbani Ji, Purchase Agreement & Registries - the Learned Assessing Officer made the Additions U/s 69 of the Income Tax Act while passing the Order for AY 2017-18 of Humble Appellant. The Additions made in Appellant case is against Facts & Law.
Further the Humble Appellant had not claimed that whole Purchase consideration was paid by Shri Nanak Gurbani. It was only regarding the payment of Rs. 1,71,744/- made during the relevant previous year. The Learned Assessing Officer have not Verified / Examined copy of Registry & Facts stated.
That as per Section 69 "Where in a year the taxpayer has made investments which are not recorded in the books of account, if any, 53 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT maintained by him for any source of income, and he offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, than the value of the investments may be deemed to be the income of the taxpayer of such year". Since the Humble Appellant has proved nature & source of Investments as appeared in both the Registry of Flat Purchased, Thus the value of Investments cannot be Income of the Taxpayer as held in Judicial Judgements as per below:-
i) The Hon'ble HIGH COURT OF PATNA incase of M.K. Jha v. Income-
tax Appellate Tribunal* [2007] 163 Taxman 537 (Patna) held that "Section 64, read with section 147, of the Income-tax Act, 1961 - Transfer of assets - For benefit of spouse, etc. - Assessment years 1989-90 to 1994-95 - Whether it is impermissible to club disclosed income of an assessee, as accepted by department, in income of another assessee without reopening assessment of that assessee, whose income was sought to be clubbed with income of other assessee - Held, yes"
ii) The Hon'ble HIGH COURT OF ALLAHABAD incase of Ram Krishna Tekeriwalv. Commissioner of Income-tax* [1999] 106 Taxman 470 (Allahabad) held that "Section 64 of the Income-tax Act, 1961 -
Transfer of assets - For benefit of spouse, etc. - Assessment year 1977-78 - Whether, where an individual is partner in a firm in a representative capacity as karta of HUF and his wife is also a partner in that firm, income earned by spouse of such individual from firm is liable to be clubbed in income of such individual - Held, no"
iii) The Hon'ble THE ITAT AHMEDABAD BENCH 'D' incase of Deputy Commissioner of Income-tax , Central Circle-2, Surat v.54
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT MoolchandMaganlal Jain* [2015] 62 taxmann.com 353 (Ahmedabad - Trib.) held that "Section 64 of the Income-tax Act, 1961 - Transfer of assets - For benefit of spouse etc. (Daughter-in-law) - Assessment year 2009-10 - During relevant year, assessee paid job work charges to his daughters-in-law - Assessing Officer took a view that income in hands of daughters-in-law was required to be clubbed with income of assessee under section 64(1) - Whether unless it was proved that income earning asset was transferred by assessee to daughters- in-law, their income could not be clubbed in hands of assessee - Held, yes - Whether since Assessing Officer failed to bring any evidence on record demonstrating fact that assessee had transferred any income generating asset to daughters in law, impugned addition was to be set aside - Held, yes [Para 12] [In favour of assessee]"
iv) That Hon'ble ITAT BANGALORE BENCH 'A' incase of C. Babu v.
Income-tax Officer, Ward-I, Chitradurga [2006] 6 SOT 233 (Bangalore)[16-02-2005] held that "Section 64, read with section 148, of the Income-tax Act, 1961 - Transfer of assets - For benefit of spouse, etc. - Assessment years 1991-92 and 1992-93 - Assessee, his wife and two minor daughters were partners in a firm having 25 per cent shares each - Both assessee and his wife had no other income except share of profit from firm - Assessing Officer, after issue of notice under section 148, reassessed assessee's total income by clubbing share income of his wife and minor daughters in his hands under section 64(1)(i) - Whether section 64(1)(i) empowers Assessing Officer to include income of minors in hands of parents - Held, no - Whether under Explanation 1, such income is to be clubbed in hands of spouse whose income is 55 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT more - Held, yes - Whether in instant case since admittedly both husband and wife were having equal income, Explanation 1 could not be applied and, therefore, issuance of notice under section 148 and consequential addition in hands of assessee could not be sustained - Held, yes"
We therefore request you to kindly accept the Ground of Appeal.
IV. That the Interest Income on Saving Bank of Rs. 488/- is added in the Total Income of Humble Appellant & disallowance of TDS of Rs. 151/- is against the Law.
That the Humble Appellant received Interest from Bank 68,808/-which includes Interest of Rs. 488/- received from HDFC Bank, the same is shown under ITR & Computation thus no Question arises of double Taxation. Further the Income Surrendered, thus eligible to tax Credit of Rs. 151/- which has been disallowed while faming the Assessment Order. In support of our claim we are referring the following Judicial Judgements as per below:-
i) The Hon'ble HIGH COURT OF MADRAS incase of Principal Commissioner of Income Tax-4, Chennai v. Kal Comm. (P.) Ltd.* [2021] 127 taxmann.com 102 (Madras) held that "Section 199 of the Income-tax Act, 1961 - Deduction of tax at source - Credit for tax deducted (Conditions precedent) - Assessment years 2009-10, 2010-11 and 2011-12 - 'S' had engaged services of assessee for collection of subscription charges from cable operators against commission - As per Agreement entered into between assessee and 'S' invoices were raised by assessee on various cable 56 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT operators who at time of payment of subscription, deducted tax at source and TDS certificates were issued by payers i.e., cable operators in name of assessee - Thereafter, assessee remitted entire gross amount received from cable operators to 'S' -
Assessee-company filed its return of income for relevant year - Assessing Officer during assessment, disallowed credit for corresponding TDS on ground that assessee had not included subscription charges corresponding to TDS amount in profit and loss account - Whether since subscription collected by assessee from various Cable Operators was not income of assessee, same was not shown in profit and loss account - Held, yes - Whether subscription amount was income of 'S' and as such taxable in hands of 'S' - Held, yes - Whether further, since TDS had been deducted in name of assessee and paid to Government at time of making collections, assessee would be entitled to get credit of same while receiving commission income - Held, yes [Paras 13, 14 and 21] [In favour of assessee]"
ii) That the Hon'ble THE ITAT MUMBAI BENCH 'SMC' incase of Shri Rangji Realties (P.) Ltd. v. Income-tax Officer-1(3)(1), Mumbai* [2017] 82 taxmann.com 456 (Mumbai - Trib.) held that "Section 199, read with sections 23 and 198, of the Income-tax Act, 1961 and Rule 4 of the Income-tax Rules, 1962 - Deduction of tax at source - Credit for tax deducted (Unrealised rent) -
Assessment year 2010-11 - In assessee's case, assessment for relevant year was completed under section 143(3) - Later on, Assessing Officer noticed that assessee company had offered income under head of 'income from house property' after deducting 57 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT amount of unrealized rent under rule 4 and claimed TDS credited on both, realized as well as unrealised rent - He thus restricted allowance of TDS credited to extent of actual amount of rent received by passing a rectification order under section 154 - Commissioner (Appeals) confirmed said rectification order - It was noted from records that unrealized rent was duly offered to tax by assessee at first instance, and then same was claimed as deduction from rental income under section 23(1) read with rule 4 - Moreover, amount of TDS corresponding to claim of unrealised rent was duly offered to tax under section 198 - Whether on facts, assessee's action was in accordance with provisions of section 199 and, thus assessee was eligible for seeking credit of TDS on entire amount - Held, yes - Whether, consequently, impugned order passed by authorities below was to be set aside - Held, yes [Paras 7 and 8] [In favour of assessee]"
Since the Humble Appellant have received Interest from Bank of Rs. 68,808/-, the same is shown under ITR & Computation thus no Question arises of double Taxation. Further the Income Surrendered, thus eligible to tax Credit of Rs. 151/-.
We therefore request you to kindly accept the Ground of Appeal.
V. That all the Purchase Agreements / Deeds & Payment made through Account Payee Cheques which are verified by Ld Assessing Officer, Thus no Question of Section 69 arises.
That as per Section 69 of Income Tax Act is as under:-
Unexplained investments.58
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69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the 53[Assessing] Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.
Since the Humble Appellant has proved nature & source of Investments as appeared in both the Registry executed during the year of Flat, Thus the value of Investments cannot be treated as Income of the Taxpayer.
The humble Appellant and his Father Late Shri Nanak Gurbani (co- owner in Jaipur Flat) have given Payment through Account Payee Cheques, submitted the Death Certificate of Late Shri Nanak Gurbani Ji, Purchase Agreement & Registries - the Learned Assessing Officer made the Additions U/s 69 of the Income Tax Act while passing the Order for AY 2017-18 of Humble Appellant. The Additions made in Appellant case is against Facts & Law as held in following judicial Judgements:-
i) That the Hon'ble ITAT JAIPUR BENCH incase of Smt. Renu Agarwal v. Assistant Commissioner of Income-tax, Central Circle-3, Jaipur* [2017] 88 taxmann.com 872 (Jaipur - Trib.) held that Section 69 of the Income-tax Act, 1961 - Unexplained investments (Immovable property) - Assessment year 2009-10 - Where seller had given a statement on oath that he had received Rs. 65 lakhs only from assessee on sale of land and that agreement to sell plot of land after carrying out construction for Rs. 1.41 crore was cancelled, in absence of any evidence of payment of any on-money on purchase of vacant 59 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT plot, lower authorities had erred in confirming addition of differential amount on account of unexplained investment in purchase of plot [In favour of assessee]
ii) That the Hon'ble HIGH COURT OF DELHI Commissioner of Income-
tax-XIV v. Vivek Aggarwal* [2015] 56 taxmann.com 7 (Delhi) held that "Section 69, read with section 158BB of the Income-tax Act, 1961
- Unexplained investments (Purchase of property) - Block assessment years 2001-02 to 2007-08 - Assessee purchased a property for a consideration of Rs. 3.70 lakh - During course of block assessment proceedings, Assessing Officer rejected transaction value and referred matter to AVO who in his report valued property at Rs. 10.65 lakh - Accordingly, addition of Rs. 6.95 lakh was made to assessee's income
- Tribunal, however, set aside said addition - Whether in absence of any incriminating evidence with respect to payment over and above reported amount, it could not be concluded that transaction relating to property in question was undervalued, and, therefore, impugned order deleting addition was to be confirmed - Held, yes [Para 17] [In favour of assessee]"
iii) The Hon'ble IN THE ITAT COCHIN BENCH M.M. Sulaiman v.
Assistant Commissioner of Income-tax* [2014] 51 taxmann.com 310 (Cochin - Trib.) held that "I. Section 69, read with sections 132 and 153A, of the Income-tax Act, 1961 - Unexplained investments (Property) - Assessment year 2001-02 - Whether amount of total income and agricultural income declared by assessee aggregating to Rs.2.50 lakhs was sufficient enough to explain sources for Rs.50,000, hence, there was no justification in confirming addition of said amount - Held, yes [Para 9] [In favour of assessee] II. Section 60 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT 69, read with sections 132 and 153A, of the Income-tax Act, 1961 - Unexplained investments (Purchase of car) - Assessment year 2002-03
- Consequent to search, Assessing Officer made an addition on account of investment made by assessee in purchase of car stating that assessee could not explain sources for purchasing car - Whether since department did not unearth any material to show that assessee had purchased vehicle during relevant assessment year, Commissioner (Appeals) was justified in deleting addition - Held, yes [Para 19.2] [In favour of assessee] III. Section 69, read with section 132 of the Income-tax Act, 1961 - Unexplained investments (Purchase of property) - Assessment year 2002-03 - Assessee proved that investment in purchase of impugned property was made out of money returned by two parties with whom he carried out financial transactions - Whether since fund was available with assessee at relevant time, additions made by Assessing Officer towards unexplained investment in property were not maintainable and Assessing Officer was to be directed to delete same - Held, yes [Paras 20.2 & 20.3] [In favour of assessee] IV. Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Bank deposits) - Assessment year 2002-03 - Whether revenue having accepted purchase of property by assessee, a real estate broker for Rs. 19 lakhs, claim of sale of same for Rs. 21 lakhs and deposit of same in bank was to be accepted - Held, yes - Whether since Assessing Officer, in immediately succeeding year, has accepted submission of assessee that bank deposits represented advances received from various persons in respect of his real estate business, loans availed by him and commission received, same was to be 61 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT accepted for current year also - Held, yes [Para 23] [In favour of assessee] V. Section 153A, read with section 69, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Profit on sale of estate) - Assessment year 2003-04 -
Assessee purchased 101.50 acres of land, converted same in small plots and sold them - As total 83.22 acres of plots were sold, Assessing Officer in computing gains, deducted cost pertaining to 83.22 acres - Assessee's case was that 18.28 acres of land was used for creating internal roads for converting land into plots, hence entire cost of Rs. 101.50 acres was to be deducted - Since, assessee's claim of compensation of 18.28 acres of land for creating internal roads was not substantiated, Commissioner (Appeals) deducted an additional amount of Rs. 5 lakhs towards roads - Whether, there was no infirmity in order of Commissioner (Appeals) - Held, yes [Paras 29.1 & 29.2] [Partly in favour of assessee] VI. Section 69, read with section 153A, of the Income-tax Act, 1961 - Unexplained investments (Purchase of property) - Assessment year 2004-05 - Whether assessee had reconciled payments made for purchase of rubber estate and assessee's explanations were supported by statements given by person from whom he had taken money, as well as by letter given by bank which issued demand draft, additions were rightly deleted by Commissioner (Appeals) - Held, yes [Para 30.6] [In favour of assessee] VII. Section 69 of the Income-tax Act, 1961 - Unexplained investments (Purchase of car) - Assessment year 2004-05
- Assessee had purchased a car during relevant year - As, assessee could not substantiate his claim of having received loan for purchasing car, Assessing Officer treated above said investment 62 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT in purchase of car as income of assessee and made additions - Whether since assessee had declared additional income of Rs.15 lakhs during year under consideration and same should be available with him for making investments; cost of car being Rs.5.70 lakhs, could have been funded through this additional income - Held, yes - Whether, thus, Commissioner (Appeals) was justified in giving telescoping benefit - Held, yes [Para 31.1] [In favour of assessee] VIII. Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Peak credit in banks) - Assessment year 2004-05 - Assessing Officer noticed huge transactions in various bank accounts maintained by assessee - In absence of details, Assessing Officer computed peak credit balance at Rs.98.65 lakhs and assessed same as income of assessee - Whether in absence of corresponding asset/expense vis-à- vis alleged income, it would not be proper to presume that entire amount of deposits made into bank account represented current income of assessee - Held, yes - Whether Assessing Officer having accepted for previous year that deposits found in bank accounts relate to transactions carried by assessee in his real estate and vehicle brokerage business, same logic was to be extended for current year also - Held, yes - Whether thus Assessing Officer was to be directed to delete additions relating to bank deposits - Held, yes [Paras 32.4 & 32.7] [In favour of assessee] IX. Section 69 of the Income-tax Act, 1961 - Unexplained investments (Purchase of car)
- Assessment year 2005-06 - Whether, where assessee had explained that payments made by him for purchase of cars were from several car loans taken from banks, Commissioner (Appeals) had rightly deleted addition - Held, yes [Para 36.4] [In favour of assessee] XIII.
63IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Section 153A of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Premium income) - During course of search, a receipt was found, which suggested that assessee would be entitled to receive Rs. 3.95 crore as premium - However, during course of assessment proceeding, assessee filed a copy of revocation agreement entered by assessee with proposed buyers which stated that buyers had given a sum of Rs.3.42 crores to assessee - Receipt mentioned about 'payment due' and not actual payment, where as revocation agreement mentioned about actual payment made - Whether, premium amount had to be taken as Rs.3.42 crore only, as mentioned in revocation agreement - Held, yes [Para 52] [In favour of assessee]"
iv) The Hon'ble SUPREME COURT OF INDIA incase of KishinchandChellaramv. Commissioner of Income-tax* [1980] 4 Taxman 29 (SC) held that "Section 23(3) of the Indian Income-tax Act, 1922 [Corresponding to section 143(3) of the Income-tax Act, 1961] - Assessment - Income from undisclosed sources - Employee of one office of assessee made, through a bank, telegraphic transfer of certain amount to employee of another office - ITO, on the basis of letters from bank manager, not shown to assessee, treated amount so remitted as income from undisclosed sources - Tribunal, relying on letters of bank manager, upheld ITO's action - Whether tribunal justified - Held, on facts, no - Whether burden of proof lay on department to show that remitted amount belonged to assessee by bringing proper evidence - Held, yes"
v) That the Hon'ble THE ITAT MUMBAI BENCH 'F' incase of Mukesh R. Maroliav. Addl. Commissioner of Income-tax, Rg-15(2) [2006] 6 SOT 64 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT 247 (Mumbai)[15-12-2005] held that "Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 2001-02 - Assessing Officer treated certain amount, deposited in bank account of assessee's minor daughter, as unexplained cash credit under section 68 and added same to income of assessee - Assessing Officer rejected explanation of assessee that said amount was gifted to his daughter by his brother, who was a non-resident, and payment was routed through NRE account - Whether since remittance of money was supported by banking documents, there was no reason to disbelieve version of assessee and make an addition thereof - Held, yes - Whether, therefore, said addition was liable to be deleted - Held, yes"
vi) THE Hon'ble ITAT COCHIN BENCH (THIRD MEMBER) incase of K. Moidu v. Assistant Commissioner of Income-tax[2002] 81 ITD 242 (COCHIN) (TM) held that "Section 158B of the Income-tax Act, 1961 -
Block assessment in search cases - Undisclosed income - Block assessment years 1987-88 to 1997-98 - Assessees were non-resident Indians carrying on business outside India - They had made considerable remittances to their NRE accounts in India - During relevant period, they had purchased immovable properties and constructed various buildings in India - Department carried out a search operation under section 132 at residential premises of assessees in India on suspicion of undervaluation and 'on money' payments in respect of such purchases - Subsequently, Assessing Officer initiated assessment proceedings under section 158BC and found that actual consideration paid by assessees for acquiring immovable properties was more than ostensible consideration mentioned in registration documents - Difference in above two 65 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT considerations was treated by him as undisclosed income in hands of assessees - Similarly, Assessing Officer made further additions under Chapter XIV-B by estimating cost of construction of buildings at a rate higher than that conceded by assessees and treating difference as undisclosed income - He further made addition on account of additional estimate made by him against personal expenses of assessees' family residing in India and on account of reduction made by him in estimated agricultural income declared by assessees - Assessees had no known sources of income in India - Whether there was no case of undisclosed income in respect of understatement of purchase consideration since entire 'on- money' payments made against all purchases were covered by NRE remittances sent by assessees - Held, yes - Whether there is any scope for general estimation in block assessment in absence of specific and speaking materials - Held, no - Whether generally in a block assessment estimated additions cannot be justified - Held, yes - Whether there being no incriminating materials to prove that assessees had expended money in excess of amount admitted by them to have been spent for constructing various buildings and also no evidence in support of estimates made by Assessing Officer in respect of personal expenses and agricultural income, additions were unjustified and unsustainable and, consequently, there was no case of undisclosed income - Held, yes"
vii) The Hon'ble HIGH COURT OF GUJARAT incase of Income-tax Officer v. Bharat A. Mehta* [2015] 60 taxmann.com 31 (Gujarat) held that "Section 69 of the Income-tax Act, 1961 - Unexplained investment (Investment in property) - Assessment year 1992-93 -66
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Assessee purchased a bunglow in a housing scheme from a builder firm during search, partners of said firm admitted having received certain amount as 'on money' from buyers of bunglows in said scheme - On basis of that material Assessing Officer made certain addition under section 69 to income of assessee on account of 'on money' paid to builders - On appeal, Tribunal deleted addition holding that revenue failed to prove that assessee had made undisclosed investment in aforesaid bunglow - Whether as findings recorded by Tribunal were based on appreciation of facts, no interference was called for - Held, yes [Paras 9 and 10] [In favour of assessee]"
viii) The Hon'ble HIGH COURT OF JHARKHAND incase of Prayag Tendu Leaves Processing Co. v. Commissioner of Income-tax.* [2017] 88 taxmann.com 23 (Jharkhand) held that "Section 68 of the Income-tax Act, 1961 - Cash credits (Gifts) - Assessment year 2001-
02 - Whether under section 68, Assessing Officer, while assessing a partnership firm, can go behind source of income of partnership firm, but he cannot go to 'source of source' - Held, yes - Whether where assessee has given supporting material evidencing gift or amount received from particular person with necessary documents, such as, copies of demand drafts and cheques etc., no addition could have been made by Commissioner in respect of amount received by assessee - Held, yes [Paras 6 & 7] [In favour of assessee]"
ix) That the Hon'ble HIGH COURT OF GUJARAT incase of Principal Commissioner of Income-tax-2 v. D & H Enterprises* [2016] 72 taxmann.com 91 (Gujarat) held that "Section 68, read with section 131, of the Income-tax Act, 1961 - Cash credit (Advance) -
Assessment years 2006-07 and 2007-08 - In scrutiny, it was revealed 67 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT that assessee had shown advances from 84 persons towards investment in land - Assessee submitted that these were received as advance booking amounts through cheques in ordinary course of business - Assessee had filed confirmations of all persons, copies of their bank statements, income tax returns, etc. - Assessing Officers was not satisfied and made additions of certain amounts for both assessment years - Whether since Assessing Officer could have easily verified these sums from details available, merely because summons could not be served upon some parties or they did not appear before him, transactions could not be held to be non-genuine - Held, yes [Para 7][In favour of assessee]"
We therefore request you to kindly accept the Ground of Appeal. VII. That the CIT (A) grossly eared in not considering the withdrawal Application filed before DCIT (DRP-1), Delhi (Sec) & rejected the Appeal without considering the Facts.
That as per Section 144C is as under:-
(1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward3 a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation 4[***] which is prejudicial to the interest of such assessee.
(2) On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order,--
(a) file his acceptance of the variations to the Assessing Officer; or 68 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
(b) file his objections, if any, to such variation with,--
(i) the Dispute Resolution Panel; and
(ii) the Assessing Officer.
(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if--
(a) the assessee intimates to the Assessing Officer the acceptance of the variation; or
(b) no objections are received within the period specified in sub-section (2).
(4) The Assessing Officer shall, notwithstanding anything contained in section 1535[or section 153B], pass the assessment order under sub-
section (3) within one month from the end of the month in which,--
(a) the acceptance is received; or
(b) the period of filing of objections under sub-section (2)
expires.
(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment.
(6) The Dispute Resolution Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:--
(a) draft order;
(b) objections filed by the assessee;
(c) evidence furnished by the assessee;
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(d) report, if any, of the Assessing Officer, Valuation
Officer or Transfer Pricing Officer or any other
authority;
(e) records relating to the draft order;
(f) evidence collected by, or caused to be collected by, it;
and
(g) result of any enquiry made by, or caused to be made
by, it.
(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),--
(a) make such further enquiry, as it thinks fit; or
(b) cause any further enquiry to be made by any income-
tax authority and report the result of the same to it.
(8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order.
[Explanation.--For the removal of doubts, it is hereby declared that the 6 power of the Dispute Resolution Panel to enhance the variation shall include and shall be deemed always to have included the power to consider any matter arising out of the assessment proceedings relating to the draft order, notwithstanding that such matter was raised or not by the eligible assessee.] (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members.
70IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT (10) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.
(11) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively.
(12) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.
(13) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 1537[or section 153B], the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.
(14) The Board may make rules8 for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee.
9[(14A) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the 10[Principal Commissioner or] Commissioner as provided in sub-section (12) of section 144BA.] 11 [(14B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuance of directions by the dispute resolution panel, so as to impart greater efficiency, transparency and accountability by--
(a) eliminating the interface between the dispute resolution panel and the eligible assessee or any other person 71 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT to the extent technologically feasible;
(b) optimisingutilisation of the resources through economies of scale and functional specialisation;
(c) introducing a mechanism with dynamic jurisdiction for issuance of directions by dispute resolution panel.
(14C) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (14B), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 11a [2024].
(14D) Every notification issued under sub-section (14B) and sub-section (14C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] (15) For the purposes of this section,--
(a) "Dispute Resolution Panel" means a collegium comprising of three 10[Principal Commissioners or] Commissioners of Income-tax constituted by the Board12 for this purpose;
(b) "eligible assessee" means,--
(i) any person in whose case the variation
referred to in sub-section (1) arises as a
consequence of the order of the Transfer
Pricing Officer passed under sub-section (3)
of section 92CA; and
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[(ii)
13
any non-resident not being a company, or
any foreign company.]]
That as per Section 246A is as under:-
246A. (1) Any assessee 88[or any deductor] 89[or any collector] aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner (Appeals) against--
(a) an order 90[passed by a Joint Commissioner under clause (ii) of sub-section (3) of section 115VP or an order] against the assessee where the assessee denies his liability to be assessed under this Act or an intimation under sub-section (1) or sub-section (1B) of 91[ section 143 or 92[sub-section (1) of section 200A or sub-section (1) of section 206CB, where the assessee or the deductor or the collector] objects] to the making of adjustments, or any order of assessment under sub-section (3) of section 14393[[except an order passed in pursuance of directions of the Dispute Resolution Panel 94[***] 95[or an order referred to in sub-
section (12) of section 144BA]]] or section 144, to the income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed;
[(aa) 96 an order of assessment under sub-section (3) of section 115WE or section 115WF, where the assessee, being an employer objects to the value of fringe benefits assessed;
(ab) an order of assessment or reassessment 73 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT under section 115WG;] (b) an order of assessment, reassessment or 97
recomputation under section 147 [[except an order passed in pursuance of directions of the Dispute Resolution Panel 98[***] 99[or an order referred to in sub-section (12) of section 144BA]]] or section 150;
1[(ba) an order of assessment or reassessment 2 under section 153A [[except an order passed in pursuance of directions of the Dispute Resolution Panel]] 3[***] 4[or an order referred to in sub-
section (12) of section 144BA];] 5 [(bb) an order 6[made] under sub-section (3) of section 92CD;]
(c) an order made under section 154 or section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by the assessee under either of the said sections 7[***] 8[except an order referred to in sub-section (12) of section 144BA];
(d) an order made under section 163 treating the assessee as the agent of a non-resident;
(e) an order made under sub-section (2) or sub-
section (3) of section 170;
(f) an order made under section 171;
(g) an order made under clause (b) of sub-section (1)
or under sub-section (2) or sub-section (3) or sub-
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section (5) of section 185 in respect of an
assessment for the assessment year commencing on or before the 1st day of April, 1992;
(h) an order cancelling the registration of a firm under sub-section (1) or under sub-section (2) of section 186 in respect of any assessment for the assessment year commencing on or before the 1st day of April, 1992 or any earlier assessment year;
9[(ha) an order made under section 201;] 10 [(hb) an order made under sub-section (6A) of section 206C;] (i) an order made under section 237; 10a [(ia) an order made under section 239A;] (j) an order imposing a penalty under-- (A) section 221; or (B) section 271, section 271A, 10b[ section 271AAA,] 11[ section 271AAB,] section 12 271F, [ section 271FB,] section 272AA or section 272BB; (C) section 272, section 272B or section 273, as they stood immediately before the 1st day of April, 1989, in respect of an assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment years; 75 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT 13
[(ja) an order of imposing or enhancing penalty under sub-section (1A) of section 275;]
(k) an order of assessment made by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of January, 1997;
(l) an order imposing a penalty under sub-section (2) of section 158BFA;
(m) an order imposing a penalty under section 271B or section 271BB; (n) an order made by a Deputy Commissioner imposing a penalty under section 271C14[, section 271CA], section 271D or section 271E; (o) an order made by a Deputy Commissioner or a
Deputy Director imposing a penalty under section 272A;
(p) an order made by a Deputy Commissioner imposing a penalty under section 272AA;
(q) an order imposing a penalty under Chapter XXI;
(r) an order made by an Assessing Officer other than a Deputy Commissioner under the provisions of this Act in the case of such person or class of persons, as the Board may, having regard to the nature of the cases, the complexities involved and other 76 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT relevant considerations, direct.
Explanation.--For the purposes of this sub-section, where on or after the 1st day of October, 1998, the post of Deputy Commissioner has been redesignated as Joint Commissioner and the post of Deputy Director has been redesignated as Joint Director, the references in this sub-section for "Deputy Commissioner" and "Deputy Director" shall be substituted by "Joint Commissioner" and "Joint Director" respectively.
15[(1A) Every appeal filed by an assessee in default against an order under section 201 on or after the 1st day of October, 1998 but before the 1st day of June, 2000 shall be deemed to have been filed under this section.] 16 [(1B) Every appeal filed by an assessee in default against an order under sub-section (6A) of section 206C on or after the 1st day of April, 2007 but before the 1st day of June, 2007 shall be deemed to have been filed under this section.] (2) Notwithstanding anything contained in sub-section (1) of section 246, every appeal under this Act which is pending immediately before the appointed day, before the Deputy Commissioner (Appeals) and any matter arising out of or connected with such appeals and which is so pending shall stand transferred on that date to the Commissioner (Appeals) and the Commissioner (Appeals) may proceed with such appeal or matter from the stage at which it was on that day :
Provided that the appellant may demand that before proceeding further with the appeal or matter, the previous proceeding or any part thereof be reopened or that he be re-heard.
Explanation.--For the purposes of this section, "appointed day" means the day appointed by the Central Government by notification17 in the Official Gazette.] 77 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT The summary of Proceedings as per below:-
Draft Order Issued on Dt 27-03-2022 U/s 147 Application Filed before DRP -1 on Dt 26-04-2022 against the Draft Order U/s 147 Order passed U/s 147 rws 144C (3) on Dt 13-05-2022 Appeal Filed before CIT(A) against the Order Dt 13-05-2022 on dt 06-06- 2022 Withdrawal of Application filled before DRP-1 against the Draft Order U/s 147 Dt 27-03-2022 on dt 22-09-2022 78 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Order passed by DRP-1 on Dt 13-12-2022 stating that ""..the Panel further takes a note that the assessee files the objections before the Panel on 02.05.2022 against the AO's draft order dated 27.03.2022. Since the AO has already passed the final order as submitted above, no action lies at the end of the Panel and no interference is warranted at end of the Panel; the assessee's objections in this regard, are disposed of accordingly."
Hence, considering the above, the order u/s 147 r.w.s. 144C(3) dated 13.05.2022 is final order w.e.f. 13.05.2022.
The CIT(A) passed Order u/s 250 of Income Tax Act,1961 on Dt 09-01-2023 stating that "6. There is no dispute in law that on receipt of a draft order u/s 144C proposing variations to the returned income, the assessee can either accept the variations or file an objection before the DRP. In the alternative, the assessee also has the option to prefer appeal before the Commissioner of Income Tax (Appeals). Undisputedly, the assessee cannot both file objections before the DRP and also file the appeal before CIT(A). In this case, as the appellant had already preferred filing objections before the DRP, he did not have any legal right to file an appeal before the CIT(A). Clearly, the appeal filed before the CIT(A) was not maintainable in law. Therefore, the appeal deserves to be dismissed being not-maintainable in law."
That in the present case the Learned Assessing Officer completed the Assessment without the directions of DRP-1 & the Appeal filled before CIT (A) under section 246A (1) (a) except an order passed in pursuance of directions 79 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT of the Dispute Resolution Panel, thus the Appeal was correctly filed before CIT (A) & the learned CIT(A) eared in deciding the Appeal on Merits.
I therefore requesnt you to kindly accept the ground & oblige.
In view of the above, I request you to kindly accept the Appeal & delete the Additions made vide order Dt 13-05-2022 & oblige."
7. In addition to the above written submissions, the ld. AR of the assessee relied upon the following evidences:-
S Particulars Page No.
No
1. Reply to Rejoinder before CIT (A) 1-5
2. Copy of Notice issued in pursuance to Application U/R 46A by 6-7
Learned AO
3. Copy of Reply in pursuance to Application U/R 46A to Learned AO 8-33
4. Copy of Remand Report in pursuance to Application U/R 46A by 34-36
Learned AO
5. Copy of Letter filed before DRP for withdrawal of Application 37-38
6. Application U/R 46A Submitted Before CIT(A) 39
7. Copy of ITR & Computation of Shri Nanak Gurbani AY 2014-15 To 40-52
2017-18
8. Copy of Housing Loan - ICICI Bank Limited (Nanak Gurbani) 53-58
9. Copy of Housing Loan - Repayment Schedule - ICICI Bank Limited 59-60
(Nanak Gurbani)
10. Payment Statement along with supporting bank Statements 206, Okay 61-68
Plus Empress (Jaipur Flat)
11. Payment Statement along with supporting bank Statements Nahar 69-78
Homes LLP (Pune Flat)
80
IT(IT) A No. 06/JP/2023
Jai Kumar Gurbani vs. DCIT
12. Death Certificate (Nanak Gurbani) 79
13. Purchase Agreement / Registry (Jaipur Flat) 80-101
14. Purchase Agreement / Registry (Pune Flat) 102-129
15. Remittance Certificate & Supporting Bank Statement 130-131
Paper book - II
S Particulars Page No.
No
1. Application for obtaining Certified copy of proceedings & paper for 1
Decision U/s 147 rws 144(3) of Income Tax Act
2. Letter Dt 12-01-2023 issued by AO 2
3. Copy of Remand Report 3-5
4. Demand Notice, Order, Computation Sheet of Order Dt 13-05-2022 6-16
5. Copy of Reply against the Draft Order 17-21
6. Copy of Draft Assessment Order Dt 27-03-2022 22-29
7. Copy of Show Cause Notice Dt 19-03-2022 30-31
8. Copy of Show Cause Notice Dt 08-03-2022 32
9. Copy of Notice U/s 142(1) Dt 02-02-2022 33-34
10. Copy of Notice U/s 143(2) & reasons for reopening of the case U/s 35-45
148
11. Copy of Notice U/s 142(1) Dt 28-12-2021 46-47
12. Copy of AS-26 48-52
13. Section 246A of Income Tax Act 53-55
14. Section 144C of Income Tax Act 56-58
8. The ld. AR of the assessee has also filedthe followingevidences as per direction of the bench so as to support the contentions raised in the written submission.
"Appropus to above & as per directions of Hon'ble Bench, we are submitting herewith following documents in duplicate as per below:-81
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
1. Affidavit to Shri Girish Gurbani (Special Power of Attorney Holder)
2. Special Power of Attorney given by Jai Kumar Gurbani for the same flat for which affidavit is filed before your Honour.
3. Bank Statement of late Shri nanak Gurbani Wherein name mentioned on the bank statement.
4. Copy of reply & Enclosures submitted before Learened Assessing Officer On various dates.
8.1 As directed by the bench the ld. AR of the assessee in support of contentions raised also filed an affidavit and the content of the affidavit reads as under:82
IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
9. The ld. AR of the assessee in respect of Ground No. 1 challenging reopening has relied upon the decision in the case of Raj Kumar Rawla vs. Asstt. Commissioner of Income-tax [1992] 42 ITD 509 (Calcutta)[29-05- 1992].
83IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
10. The ld. AR of the assessee in addition to the above evidence and written submission submitted before us that the addition of Rs. 52,37,475/-
is made on the presumption and assumption and in support he relied upon the agreement and the content of the affidavit filed. Based on this evidence he vehemently argued that the assessee has neither made the payment in the year under consideration nor claimed any benefit for this amount which is added by the ld. AO. It is only the commitment to make the future payment for purchase of property for an amount of Rs. 1,18,81,300/- out of that Rs. 66,43,825/- is paid for which there is no dispute before us. As it is evident from the record that the assessee has not paid an amount of Rs.52,37,475/- for the year under consideration the same cannot be added as unexplained investment. To support this contention ld. AR of the assessee drawn our attention to page 106 of his paper book wherein the agreement for purchase of this property is made and the assessee has filed an affidavit stating that he has not paid at Rs. 52,37,475/- as extracted here in above. Therefore, only the commitment to make the future payment cannot be added as unexplained investment of the assessee.
11. As regards the addition of Rs. 12,62,670/-, [ refer Table A para 3.1 above ]the ld. AR of the assessee submitted that Rs. 5,49,770/- added by 84 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT the ld. AO is not correct. But the total amount for this property amounts to Rs. 6,41,920/-[ page 87 of paper book]out of that the assessee has paid at Rs. 1,71,744/- as it is evident from an agreement submitted by the assessee at page 90 of his paper book which is not under dispute. The balance amount is paid by his father as the property is in joint name with his father. Therefore, the addition made to the extent of Rs. 5,49,770/- is incorrect and is not paid by the assessee. As regards the 2nd part of the stamp duty of Rs. 7,12,900/- for the purchase of property the ld. AR of the assessee submitted that out of that amount of Rs. 7,42,900/- has been debited to the account of the assessee by the builder but the assessee has not paid it an amount has been debited to the account on 11.02.2017 (assessee's paper book page No. 70). As the assessee has only made part payment of the property and the amount debited to the assessee' account on stamp duty registration was not paid to the builders/seller of the property also. Thus, the same cannot be added as unexplained investments by the assessee as the has been paid by the builder and debited to the account of the assessee [ APB -70].
12. As regards the addition of Rs. 45,82,174/-, the ld. AR of the assessee submitted that this addition consist of exactly 50% of an amount for which 85 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT his father as jointly with the assessee invested the money and the ld. AO contended that assessee might have send the money to his father and his father invested his money and in absence of the evidences. The ld. AR of the assessee submitted in the remand proceeding before ld. CIT(A) placed on record the fact that his father Mr. Nanak Gurbani has taken a housing loan for an amount of Rs. 45,00,000/- and payment of two cheques of Rs.
22,50,000/- each was also reflected in the bank account of the father of the assessee (assessee's paper book page 53 and 61) based on this evidence even the addition of Rs. 45,82,174/- is also not correct. Thus, based on this observation the addition of Rs. 45,82,174/- is vacated.
13. As regards the addition of Rs. 488/-, the ld. AR of the assessee fairly admitted that the addition is correctly made and being the small amount, it left attention while filing ITR.
14. On the other hand, ld. DR representing the revenue submitted that the assessee being non-resident has not placed on record the correct details. Therefore, the finding of ld. AO be sustained and even the alternatively since before both lower authorities i.e. DRP and ld. CIT(A), the 86 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT averments of the assessee has not been tested, the matter should be decided based on the finding of the ld. AO.
15. We have heard the rival contentions and perused the material placed on record. The bench noted that the addition of Rs. 52,37,475/- consist of unpaid purchase consideration and the future commitment made to the builder bythe assessee. Merely at the time of registration and TDS process the total amount of investment considered but the same cannot be taken as a basis for which the actual payment neither due nor paid by the assessee.
Thus, the same cannot be considered as unexplained investment by the assessee. We have gone through the proposals,letters and relevant deed of purchase of property placed on record before us and before ld. CIT(A). The said information contended by the ld. AR of the assessee is based on evidence which has not been controverted that the assessee has not paid the said amount. Hence, in the absence of clear evidence placed before us we are of the considered view that once the assessee has not made any payment the same cannot be added as unexplained investment.The revenue did not bring on record contraryfact that the assessee has paid this amount. But in fact it is based on the record that the same is considered as due by the builder. Thus, the due payment cannot be added as unexplained 87 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT investment by the assessee. Therefore, we are of the considered view that the addition of Rs. 52,37,475/- does not have leg to stands and the same is thus vacated.
16. As regards the addition of stamp duty for an amount of Rs. 5,49,770/-, the assessee has already placed record the evidence to prove that the assessee has paid a sum of Rs. 1,71,744/-. Balance amount has been paid out of the loan taken by his father. The proof of payment in the form of bank account maintained by his father (assessee's paper book page 67) is available on record. Therefore, since the source of this payment of stamp duty duly discharged by the assessee, the same cannot be added in the hands of the assessee merely stating that the assessee might have given this money to his father but in fact his father has taken housing loan and from that ICICI bank housing loan, this payment has been made. Therefore, same cannot be added in the hands of the assessee as unexplained investments. As regards the addition of Rs. 7,12,900/-, the ld. AR of the assessee based on the deed of seller proved that the assessee has out of total deal of Rs. 1,18,81,300/- paid a sum of Rs. 66,43,825/- which is not disputed, and a stamp duty and other related payment is yet not paid by the assessee but the builder has in the schedule just debited the amount.
88IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT Therefore, when the said amount is not paid the same cannot be considered as an unexplained investment of the assessee. Based on these facts already on record the addition of Rs. 12,62,670/- is vacated.
17. As regards the addition of Rs. 45,82,174/-, the fact has noted that the assessee has along with his father purchased a property at Banipark, Jaipur for an amount of Rs. 91,64,348/- and 50% of that amount which comes to Rs. 45,82,174/- has been added as unexplained investments of the assessee on the pretext that the whole of the payment is made by the assessee and therefore, he has not considered the fact that the father of the assessee taken a loan to meet investment of his part for which the ld.
AR of the assessee relied upon (assessee's paper book page 53 and 61) being the evidence of loan taken and payment of cheque made by his father from his bank account. This factual aspect of the matter has not been challenged. Thus, based on this discussion, the addition of Rs. 45,82,174/-
is vacated.
18. Based on the detailed findings recorded here in above, we are of the considered view that the addition totaling to Rs. 1,10,82,319/-
89IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT [52,37,475+12,62,670+45,82,174] is factually incorrect and thus vacated.
Thus, Ground No. 2 raised by the assessee is allowed.
19. The Ground No. 1 is not adjudicated since we have considered the merits of the case and therefore, this becomeeducative in nature. Ground No. 4 to 12 are general, either for challenging the proceeding, contesting the interest, initiation of penalty etc. for which no specific arguments were advanced and since we have deleted the addition based on the above discussion these ground no. 4 to 12 are either consequential in nature or educative in nature and the same are not adjudicated.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 05/10/2023.
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vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. The Appellant- Jai Kumar Gurbani, Jaipur 90 IT(IT) A No. 06/JP/2023 Jai Kumar Gurbani vs. DCIT
2. izR;FkhZ@ The Respondent- DCIT, Circle (Int. Tax), Jaipur
3. vk;djvk;qDr@ The ld CIT
4. vk;dj vk;qDr¼vihy½@The ld CIT(A)
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6. xkMZQkbZy@ Guard File (IT(IT)A No. 06/JP/2023) vkns'kkuqlkj@ By order, lgk;diathdkj@Asst. Registrar