AKSHAY KUMAR SAXENA,MUMBAI V. ITO-4(2)(1), MUMBAI

ITA 946/MUM/2024

AI Insights

The case involves Akshay Kumar Saxena, the appellant, who contested the reassessment order issued by the Income Tax Officer (ITO) for the assessment year 2013-14. The primary contention was regarding the validity of a notice issued under Section 148 of the Income Tax Act, 1961, and the subsequent addition of Rs.4,99,525 as unexplained money. The ITO had alleged that this amount was paid in cash over and above the documented sale consideration for a flat purchased by Saxena. The CIT(A) upheld the ITO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal's decision focused on the timing of the cash payment, determining it occurred in a different financial year than claimed by the ITO, thus not warranting the addition in the assessment year 2013-14.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471346 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Other Referred Cases: Ram Kishan vs ITO (ITA No. 1909/Del/2020)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Assessee Lawyers: BIMLENDU BHUSHAN
• Keywords: Reason to believe
• Section: 148; 143(1); 69; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SUNIL KUMAR SINGH (JUDICIAL MEMBER) ITA No. 946/MUM/2024 Assessment Year: 2013-14 Akshay Kumar Saxena, A-1604 Rushi Heights, Riddhi Gardens Filmcity Road, Malad (E), Mumbai-400097. Vs. ITO-4(2)(1), Room No. 1702, 17th floor, Air India Building, Nariman Point, Mumbai-400021. PAN NO. AXSPS 3020 R Appellant Respondent Assessee by : Mr. Bimlendu Bhushan Revenue by : Mr. Krishna Kumar, Sr. DR Date of Hearing : 27/01/2025 Date of pronouncement : 30/01/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 10.02.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – 58, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2013-14. The relevant grounds raised by the assessee, which were revised through letter dated 10.10.2024, are reproduced as under: A. Ground No 1) The Assessing officer has issued 31.03.2021 which is uploaded on portal on 01/04/2021) So the service of Notice considered as 01/04/2021. As per Finance Act,2021, The New Provision of Reassessment has been introduced in FY 2021 01/04/2021. S mentioned in Section 148A/149/151 of the Income Tax Act, 1961 the Issuance of the Notice u/s148 under the older regime on 01/04/2021 should not prevail. B. Ground No 1) We would like to inform your honor that, purchase flat in FY 2012 55,48,000/- 20/12/2012. As per Ld. Assessing Officer observation, we have paid cash over and above the sale consideration for purchasing the flat. The Cash payment was made by Assessee to Bhagwati Developers after 5 years since the purchased of Flat for parking and installation of grills, society and Club charges, which are related to repairs & maintenance in FY 2017-18. 2) Unexplained Mo our case, we would like to inform you that, we have explained the nature of expense and the source of cash payment along with bank statements. Hence, concern matter in this no more unexplained. So, it is Unjustif income. 2. Briefly stated, facts of the case are that the assessee had filed its original return of income on 30.07.2013 declaring total income at Rs.2,500/-. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) on 14.12.2013. Subsequently, information was received from the Asst. Commissioner of Income during the course of search/survey action conducted in the case of Akshay Kumar Saxena ITA No. 946/MUM/2024 A. Ground No-1: - 1) The Assessing officer has issued notice u/s 148 on dated 31.03.2021 which is uploaded on portal on 01/04/2021) So the service of Notice considered as 01/04/2021. As per Finance Act,2021, The New Provision of Reassessment has been introduced in FY 2021-22 which effective from 01/04/2021. So, as per the consideration of provision mentioned in Section 148A/149/151 of the Income Tax Act, 1961 the Issuance of the Notice u/s148 under the older regime on 01/04/2021 should not prevail. B. Ground No-2: - 1) We would like to inform your honor that, Appellant has purchase flat in FY 2012-13 for the sale consideration of Rs. and Our Sale Agreement are register on dated 20/12/2012. As per Ld. Assessing Officer observation, we have paid cash over and above the sale consideration for g the flat. The Cash payment was made by Assessee to Bhagwati Developers after 5 years since the purchased of Flat for parking and installation of grills, society and Club charges, which are related to repairs & maintenance 18. 2) Unexplained Money: Section 69A of Income Tax act, 1961 In our case, we would like to inform you that, we have explained the nature of expense and the source of cash payment along with bank statements. Hence, concern matter in this no more unexplained. So, it is Unjustifiable to Add the same in the total Briefly stated, facts of the case are that the assessee had filed its original return of income on 30.07.2013 declaring total income . The return of income was processed u/s 143(1) of x Act, 1961 (in short ‘the Act’) on 14.12.2013. Subsequently, information was received from the Asst. Commissioner of Income-tax, Central Circle (3), Mumbai that during the course of search/survey action conducted in the case of Akshay Kumar Saxena 2 ITA No. 946/MUM/2024 notice u/s 148 on dated 31.03.2021 which is uploaded on portal on 01/04/2021) So the service of Notice considered as 01/04/2021. As per Finance Act,2021, The New Provision of Reassessment has 22 which effective from o, as per the consideration of provision mentioned in Section 148A/149/151 of the Income Tax Act, 1961 the Issuance of the Notice u/s148 under the older Appellant has 13 for the sale consideration of Rs. and Our Sale Agreement are register on dated 20/12/2012. As per Ld. Assessing Officer observation, we have paid cash over and above the sale consideration for g the flat. The Cash payment was made by Assessee to Bhagwati Developers after 5 years since the purchased of Flat for parking and installation of grills, society and Club charges, which are related to repairs & maintenance ney: Section 69A of Income Tax act, 1961 In our case, we would like to inform you that, we have explained the nature of expense and the source of cash payment along with bank statements. Hence, concern matter in this no more iable to Add the same in the total Briefly stated, facts of the case are that the assessee had filed its original return of income on 30.07.2013 declaring total income . The return of income was processed u/s 143(1) of x Act, 1961 (in short ‘the Act’) on 14.12.2013. Subsequently, information was received from the Asst. tax, Central Circle (3), Mumbai that during the course of search/survey action conducted in the case of M/s Bhagwati Developers on material was seized which reflected that assessee had purchased a flat viz A-1102, Sky Oasis for an agreement value of Rs.55,48,000/ and cash of Rs.4,99,525/ value. Accordingly, the As that income escaped assessment and Act. The Assessing Officer on page 6 of the dated 25/05/2022 has reproduced the relevant document which was seized in search of M/ contended that entire money his bank account. The contention of the assessee AO and he made the addition for u/s 147 dated 25.05.2022. On further appeal, the Ld. CIT(A) also upheld the addition observing as under: “6.2 The assessee during the course of appellate proceedings has mentioned that he had made cash payment to the builder after the purchase of flat for parking and in and society and club charges which are related to repair and maintenance in F.Y.2017 cash payment was made after cash withdrawal from the bank account of the assessee and also from cash in hand of his mother and grandmother. 6.3 Order of the AO and submission of the assessee have been examined. During the course of search action on Bhagavati Developers and its group concerns from which the assessee had purchased a flat, the documents were seized which show that the assessee had paid an amount of Rs.60,47,525/ Oasis. Further, statement of Kulin Shantilal Voha, key person of the developers was recorded during the search action u/s. Akshay Kumar Saxena ITA No. 946/MUM/2024 M/s Bhagwati Developers on 15.10.2018, certain incriminating material was seized which reflected that assessee had purchased a 1102, Sky Oasis for an agreement value of Rs.55,48,000/ and cash of Rs.4,99,525/- was paid on and above the agreement value. Accordingly, the Assessing Officer recorded reason to believe that income escaped assessment and issued notice u/s 148 of the The Assessing Officer on page 6 of the reassessment order has reproduced the relevant document which in search of M/s Bhagwati Developers contended that entire money for acquisition of flat his bank account. The contention of the assessee the addition for Rs.4,99,525/- in the order passed 25.05.2022. On further appeal, the Ld. CIT(A) also upheld the addition observing as under: “6.2 The assessee during the course of appellate proceedings has mentioned that he had made cash payment to the builder after the purchase of flat for parking and installation of grill and society and club charges which are related to repair and maintenance in F.Y.2017-18. The assessee further stated that cash payment was made after cash withdrawal from the bank account of the assessee and also from cash in hand of s mother and grandmother. 6.3 Order of the AO and submission of the assessee have been examined. During the course of search action on Bhagavati Developers and its group concerns from which the assessee had purchased a flat, the documents were seized show that the assessee had paid an amount of Rs.60,47,525/- against the purchase of flat no. A- Oasis. Further, statement of Kulin Shantilal Voha, key person of the developers was recorded during the search action u/s. Akshay Kumar Saxena 3 ITA No. 946/MUM/2024 certain incriminating material was seized which reflected that assessee had purchased a 1102, Sky Oasis for an agreement value of Rs.55,48,000/- was paid on and above the agreement recorded reason to believe issued notice u/s 148 of the assessment order has reproduced the relevant document which s Bhagwati Developers. The assessee for acquisition of flat was paid out of his bank account. The contention of the assessee was rejected by in the order passed 25.05.2022. On further appeal, the Ld. CIT(A) also “6.2 The assessee during the course of appellate proceedings has mentioned that he had made cash payment to the builder stallation of grill and society and club charges which are related to repair and 18. The assessee further stated that cash payment was made after cash withdrawal from the bank account of the assessee and also from cash in hand of 6.3 Order of the AO and submission of the assessee have been examined. During the course of search action on Bhagavati Developers and its group concerns from which the assessee had purchased a flat, the documents were seized show that the assessee had paid an amount of -1102 in Sky Oasis. Further, statement of Kulin Shantilal Voha, key person of the developers was recorded during the search action u/s. 132(4) of the Act wherein Developers had received on money from various clients against the sale of flats. The assessee, during the course of assessment proceedings has mentioned he has not made any cash payment to the builder and he was not party entries made in respect of purchase of flat reflected in the seized document. Now, before the appellate proceedings, the assessee has come out with a totally new theory that he has made cash payment after the purchase of flat for parking, installation of grills, society and club charges which are related to repair and maintenance in F.Y.2017 6.4 However, the contention of the assessee is without merit as the seized document has clearly mentioned that the value of the flat at Rs.60,47,525/ these charges, i.e.parking, installation of grills, society and club charges and the assessee has paid Rs.55,48,000/ per agreement value and Rs.4,99,525/ above the agreement value in A.Y.2013 assessee has not furnished any supporting documents received from the builder regarding cash payment made by him against repairs and maintenance in F.Y.2017 6.5 The assessee has relied on decision of the ITAT, Delhi in the case of Ram Kishan VS I However the same is not applicable to the facts of the case as the assessee could not explain the source of cash of Rs. 4,99,525/- paid to the builder in A.Y.2013 6.6 In view of the above facts, an addition of Rs.4,99,525/ made by the AO on account of cash payment made to M/s. Bhagavati Developers Pvt. Ltd. over and above the agreement value towards the purchase of flat u/s.69A of the Act as unexplained money has been confirmed.” 3. Before us, the assessee has challenged the notice issued u/s 148 of the Act and also challenged the addition on merit. Akshay Kumar Saxena ITA No. 946/MUM/2024 132(4) of the Act wherein he had admitted that the Bhagvati Developers had received on money from various clients against the sale of flats. The assessee, during the course of assessment proceedings has mentioned he has not made any cash payment to the builder and he was not party entries made in respect of purchase of flat reflected in the seized document. Now, before the appellate proceedings, the assessee has come out with a totally new theory that he has made cash payment after the purchase of flat for parking, ion of grills, society and club charges which are related to repair and maintenance in F.Y.2017-18. 6.4 However, the contention of the assessee is without merit as the seized document has clearly mentioned that the value of the flat at Rs.60,47,525/- which has already included these charges, i.e.parking, installation of grills, society and club charges and the assessee has paid Rs.55,48,000/ per agreement value and Rs.4,99,525/-paid in cash over and above the agreement value in A.Y.2013-14 only. Further assessee has not furnished any supporting documents received from the builder regarding cash payment made by him against repairs and maintenance in F.Y.2017- 6.5 The assessee has relied on decision of the ITAT, Delhi in the case of Ram Kishan VS ITO (ITA No. 1909/Del/2020). However the same is not applicable to the facts of the case as the assessee could not explain the source of cash of Rs. paid to the builder in A.Y.2013-14. 6.6 In view of the above facts, an addition of Rs.4,99,525/ made by the AO on account of cash payment made to M/s. Bhagavati Developers Pvt. Ltd. over and above the agreement value towards the purchase of flat u/s.69A of the Act as unexplained money has been confirmed.” Before us, the assessee has challenged the notice issued u/s 148 of the Act and also challenged the addition Akshay Kumar Saxena 4 ITA No. 946/MUM/2024 he had admitted that the Bhagvati Developers had received on money from various clients against the sale of flats. The assessee, during the course of assessment proceedings has mentioned he has not made any cash payment to the builder and he was not party to the entries made in respect of purchase of flat reflected in the seized document. Now, before the appellate proceedings, the assessee has come out with a totally new theory that he has made cash payment after the purchase of flat for parking, ion of grills, society and club charges which are 18. 6.4 However, the contention of the assessee is without merit as the seized document has clearly mentioned that the value has already included these charges, i.e.parking, installation of grills, society and club charges and the assessee has paid Rs.55,48,000/- as paid in cash over and 14 only. Further, the assessee has not furnished any supporting documents received from the builder regarding cash payment made by him against repairs and maintenance in F.Y.2017-18. 6.5 The assessee has relied on decision of the ITAT, Delhi in TO (ITA No. 1909/Del/2020). However the same is not applicable to the facts of the case as the assessee could not explain the source of cash of Rs. 6.6 In view of the above facts, an addition of Rs.4,99,525/- made by the AO on account of cash payment made to M/s. Bhagavati Developers Pvt. Ltd. over and above the agreement value towards the purchase of flat u/s.69A of the Act as validity of the notice issued u/s 148 of the Act and also challenged the addition 4. We have heard rival submissions of the parties and perused the relevant materials on record seized from the premises of M/s Bh been reproduced by the Assessing Officer on page 6 of the assessment order. We find that developer has charged total Rs.60.47,525/- to the assessee along with parking club etc. facilities, whereas the value in the agreement for 20.12.2012 agreement value is only Rs.55,42,000/ amount has been worked paper, this amount has been shown to have been paid Rs.3,00,000/- on 29.09.2017 Thus, it is evident that said amount of cash of Rs.4,99,525/ been paid in the period corresponding to and not in the assessment year under consideration. In the assessment year 2013 has been booked and agreement to sale was registered whereas property has completed later on and therefore, tho been paid in the financial year corresponding to the assessment year 2018-19. In our opinion, when the cash has been paid in the financial year corresponding to the assessment year 2018 addition could have been made in the year under consideration under section 69 of the Act Assessing Officer and upheld by the Ld. CIT(A) is hereby deleted. The ground No. 2 of the appeal is accordingly allowed. Akshay Kumar Saxena ITA No. 946/MUM/2024 We have heard rival submissions of the parties and perused the relevant materials on record. On verification of the document seized from the premises of M/s Bhagwati Developers been reproduced by the Assessing Officer on page 6 of the assessment order. We find that developer has charged total to the assessee along with parking club etc. facilities, whereas the value in the agreement for 20.12.2012 agreement value is only Rs.55,42,000/ amount has been worked to Rs.4,99,525/-. In the said seized his amount has been shown to have been paid on 29.09.2017 and Rs.1,99,525/- it is evident that said amount of cash of Rs.4,99,525/ period corresponding to assessment year 2018 and not in the assessment year under consideration. In the assessment year 2013-14 only the under construction properties booked and agreement to sale was registered whereas eted later on and therefore, those payment been paid in the financial year corresponding to the assessment 19. In our opinion, when the cash has been paid in the al year corresponding to the assessment year 2018 addition could have been made in the year under consideration under section 69 of the Act. Accordingly, the addition made by the Assessing Officer and upheld by the Ld. CIT(A) is hereby deleted. ground No. 2 of the appeal is accordingly allowed. Akshay Kumar Saxena 5 ITA No. 946/MUM/2024 We have heard rival submissions of the parties and perused . On verification of the document agwati Developers, which has been reproduced by the Assessing Officer on page 6 of the assessment order. We find that developer has charged total to the assessee along with parking club etc. facilities, whereas the value in the agreement for sale dated 20.12.2012 agreement value is only Rs.55,42,000/- and balance . In the said seized his amount has been shown to have been paid as on 10.11.2017. it is evident that said amount of cash of Rs.4,99,525/- has assessment year 2018-19 and not in the assessment year under consideration. In the 14 only the under construction properties booked and agreement to sale was registered whereas se payments have been paid in the financial year corresponding to the assessment 19. In our opinion, when the cash has been paid in the al year corresponding to the assessment year 2018-19, no addition could have been made in the year under consideration . Accordingly, the addition made by the Assessing Officer and upheld by the Ld. CIT(A) is hereby deleted. ground No. 2 of the appeal is accordingly allowed. 4.1 Since we have already allowed the appeal of the assessee on merit, the ground No. 1 challenging the validity of the reassessment proceedings is accordingly rendered academic. Therefore, we are not adjudicating upon the same 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on Sd/ (SUNIL KUMAR SINGH JUDICIAL MEMBER Mumbai; Dated: 30/01/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Akshay Kumar Saxena ITA No. 946/MUM/2024 Since we have already allowed the appeal of the assessee on ground No. 1 challenging the validity of the reassessment proceedings is accordingly rendered academic. Therefore, we are not udicating upon the same at this stage. In the result, the appeal of the assessee is allowed. nounced in the open Court on 30/01/2025. Sd/- Sd/ (SUNIL KUMAR SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Akshay Kumar Saxena 6 ITA No. 946/MUM/2024 Since we have already allowed the appeal of the assessee on ground No. 1 challenging the validity of the reassessment proceedings is accordingly rendered academic. Therefore, we are not In the result, the appeal of the assessee is allowed. /01/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "