ANIL SALUJA,BILASPUR V. INCOME TAX OFFICER WARD - 1(1) BILASPUR, BILASPUR

ITA 483/RPR/2024

AI Insights

The case involves Anil Saluja, who appealed against the order of the Commissioner of Income-Tax (Appeals), which sustained an addition of Rs.3,79,365 as unexplained investment under Section 69 of the Income-tax Act, 1961. The appeal also contested the application of Section 115BBE for imposing a higher rate of tax. The Tribunal examined the grounds of delay in filing the appeal, which was initially contested by the Department but later condoned based on the assessee's affidavit and the specifics of Form No. 35. The main contention revolved around the source of funds used for purchasing a property, where the assessee claimed the funds were from past savings and income from his retail business, which the lower authorities had not accepted due to lack of documentary evidence.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35816 (ITAT-RAIPUR)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-11-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2024
• Other Referred Cases: Roshan Di Hatti Vs CIT, I Khan Mohammad Hanif Vs CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: VIMAL KUMAR AGRAWAL
• Keywords: Unexplained investment; Cost of acquisition; Period of limitation
• Section: 147

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.483/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Anil Saluja Budhwari Bazar, Railway Station, Bilaspur-495 001 (C.G.) PAN: BAAPS8593P .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(1), Bilaspur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Vimal Kumar Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 28.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 05.12.2024 2 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 28.03.2024, which in turn arises from the order passed by the A.O under Sec. 147 r.w.s.144 r.w.s. 144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 26.03.2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the facts and circumstances of the case and in law, ld. CIT(A) has erred in sustaining addition of Rs.3,79,365/- on the count of unexplained investment u/s.69, is unjustified and is liable to be deleted. 2. On the facts and circumstances of the case and in law, ld. CIT(A) has erred in applying Sec.115BBE for imposing higher rate of tax, is unjustified, is liable to be deleted. 3. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing.” 2. Shri Vimal Kumar Agrawal, Ld. Authorized Representative (for short 'AR') for assessee at the threshold submitted that a delay of 160 days is involved in filing of the present appeal. Elaborating on the reason leading to the delay of 160 days in filing of the present appeal, the ld. AR has drawn my attention to the \"affidavit\" dated 26.11.2024 filed by the assessee. The ld. AR stated that though the assessee had specifically 3 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 stated in Form No. 35 that all notices/communications be sent in a mode otherwise through email but, till date, no physical/hard copy of the impugned order of the CIT (A) had been received by him. The learned AR to fortify his contention has taken me through “Form No. 35”, which revealed that the assessee had opted for receiving all notices/communications otherwise than through email. 3. Per contra, Dr. Priyanka Patel, Ld. Senior Departmental Representative (for short, 'Sr.DR') objected to the request for condonation of delay. It was submitted by her that as the delay involved in filing the appeal was inordinate, therefore, the same does not merit to be condoned. 4. I have heard the learned authorized representatives of both the parties qua the issue of delay involved in filing the present appeal. Ostensibly, a perusal of “Form No. 35” reveals that the assessee had opted out of service of notices/communications through email. For the sake of clarity, the relevant extract of “Form No. 35” is culled out as under: 4 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 5. Although, the assessee had specifically stated that all the notices/communications be sent otherwise through email but no physical/hard copy of the order of the CIT(A) had been served upon him. The Ld. AR in support of his aforesaid contention had drawn my attention to the assessee’s “affidavit” dated 26.11.2024, which reads as under: 5 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 6. Admittedly, as the Department had failed to serve upon the assessee, a hard copy of the impugned order, therefore, I find no justification in reckoning the period of limitation from the date on which the impugned order is stated to have been dropped in his email account i.e. on 28.03.2024. Accordingly, I am of the view that as the Ld. AR claims that the impugned order of the CIT(A) had come to assessee’s notice only 6 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 in the first week of November, 2024 i.e. 07.11.2024, therefore, in all fairness, the period of limitation has to be reckoned from the said date. As the present appeal has been filed by the assessee on 07.11.2024, therefore, the same can safely be held to have been filed within the prescribed time. 7. I, thus, in terms of the aforesaid observations, condone the impugned delay of 160 days (as pointed out by the registry) in filing of the present appeal by the assessee. 8. Succinctly stated, the assessee had filed his return of income for A.Y.2013-14 on 09.03.2014, declaring an income of Rs.2,75,060/-. Subsequently, the A.O based on information that the assessee had purchased a piece of land bearing Khasra No.826/10, Patwari Halka No.22/34 at Juna, Dist. Bilaspur a/w. two other co-owners for a consideration of Rs.30 lacs and also incurred cost of Rs.2,75,500/-, reopened his case u/s. 147 of the Act. 9. During the course of assessment proceedings, the A.O called upon the assessee to put forth an explanation as regards the source of his share of investment of Rs.10,91,833/- (1/3rd share of Rs.32,75,500/-). In reply, it was the claim of the assessee that the aforesaid investment was primarily sourced out of housing loan raised by him from Chhattisgarh Rajya Gramin Bank, A/c. No.77004874350 wherein his share in the 7 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 borrowed funds amounted to Rs.7,23,333/- i.e. 33.33% of the total borrowing. Also, it was submitted by the assessee before the A.O that the balance investment was sourced out of his past/accumulated savings. However, as the copy of bank statement of the loan account revealed that the loan was sanctioned in the name of Shri Kamal Saluja, therefore, the A.O did not find any substance in the claim of the assessee that investment towards purchase of the subject property was partly sourced by raising loan from the bank. Further, the A.O in absence of any supporting documentary evidence rejected the assessee’s claim as regards the source of the balance amount of investment. Accordingly, the A.O vide his order passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act after making an addition of Rs.10,91,833/- as the assessee’s unexplained investment u/s. 69 of the Act, determined the income of the assessee at Rs.13,66,893/-. 10. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). Although the CIT(Appeals) concurred with the claim of the assessee that a part of his investment of Rs.7,23,333/- (supra) was sourced out of the loan which he a/w. the remaining two co-owners had raised from Chhattisgarh Rajya Gramin Bank, A/c. No.77004874350, but rejected his claim as regards the source of the balance amount of investment of Rs.3,79,369/-. Accordingly, the CIT(Appeals) partly allowed the appeal of the assessee, observing as under: 8 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 “6. I have considered the facts and circumstances of the case and material available on record on the above matter. The appellant filed return of income on 09.03.2024 declaring total income at Rs.2,75,060/-. In this case, information was available with Department that the appellant had purchased a land along with two other co-buyers for a consideration of Rs.30,00,000/- and incurred cost of Rs.2,75,500 and thus total aggregate cost of acquisition of land was of Rs.32,75,500/- and proportionate share of the appellant come to Rs.10,91,833/-. The case was selected u/s.147 of the IT Act and notice u/s.148 was issued to the appellant. In response, the appellant filed return of income on 31.05.2021 declaring total income at Rs.2,75,060/-. Appellant contended that the property has been purchased out of borrowed loan and cash payment made out of saving of earlier years. AO did not accept the explanation of the appellant stating that the entire loan was sanctioned in the name of Shri Kamal Saluja alone. Assessing Officer completed the assessment order uls.147 rws 144 of the I.T. Act on 26.03.2022 making addition on account of unexplained investment u/s.69 of the I.T. Act amounting to Rs.10,91,833/-. 6.1 During the course of appeal proceedings, appellant submitted that the cost of land including all the expenses paid was Rs.33,08,100/-. Out of which Rs.21,70,000/- was paid out of housing loan form Chhattisgarh Rajya Gramin Bank. Rs.3,00,000 was paid as margin money via Bank demand drafts. Rs.5,30,000 /- (out of cost of land) was paid in cash by way of business of retail trade and earlier year savings. Further, registry expenses, stamp duty and other costs of Rs.3,08,100/- was also paid in cash. 6.2 Total cost of acquisition of the property is Rs.33,08,100/-. Appellant has borrowed loan of Rs.21,70,000/- from Chhattisgarh Rajya Gramin Bank. On perusal of the loan sanction letter it is seen that the said loan has been issued to Shri Kamal Saluja, Shiri Sunil Saluja and Shri Anil Saluja for purchase of said property. Hence the contention of the AO that the loan has been borrowed by shri Kamal Saluja only is incorrect. For the Balance amount of payment of Rs.11,38,100/-. Appellant has stated that the same has been paid in cash out of earlier year savings. However, appellant has not submitted any documentary evidence to show that such huge amount of cash in hand was available with the appellant and his brothers at the time of payment. Mere submitting the details of ITR filed for earlier year does not prove that the appellant was having such amount as cash in hand. Neither the appellant has produced any cash book or copy of any bank 9 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 account statement reflecting any cash withdrawal. Appellant has paid Rs.3,00,000/- as margin money via Bank draft. However, appellant has not submitted the source of money utilized for creation of the Bank drafts. Without documentary evidence that the appellant was holding cash in hand, its cannot be accepted. 6.3 In the case of Roshan Di Hatti Vs CIT(SC)107 ITR 938 and I Khan Mohammad Hanif Vs CIT (SC) 50 ITR 1, Hon'ble Supreme Court I that the onus of proving the source of a sum of money found to have been received by an assessee is on him. When the nature and source of a receipt whether it be of money or other property, cannot be satisfactorily explained the assessee, it is open to the Revenue to hold that it is the income of t, assessee and no further burden lies on the Revenue to show that the income is from any particular source. 6.4 In view of the above, appellant has failed to explain the source of his share of Rs.3,79,365/-. Hence AO is directed to restrict the additions to Rs.3,79,365/-. 6.5 Appellant has also challenged that the AO has not disposed of the objection raised vide email dated 01.09.2021. However, appellant has not filed copy of the said email. Even on perusal of ITBA system no response of the appellant on 01.09.2021 could be traced out. Hence the contention of the appellant regarding raising objection is found to be incorrect. 6.6 In view of the above, Hence ground no 1 of appeal is partly allowed. 7. Vide ground no 2 appellant has challenged levy of interest u/s 234A, B and C of the I.T. Act. 7.1 The charging of interest is mandatory in view of Hon'ble Supreme Court decision in the case of Anjum M H Ghaswala 252 (2001) ITR 1 (SC). However, since ground no 1 of appeal is partly allowed, AO is directed to re-compute interest u/s 234A, B and C of the I.T. Act. 8. Vide ground no.3 of appeal appellant craves leave to add, to alter and or amend the above grounds of appeal. 8.1. No such option has been exercised by the appellant. Hence ground no.3 of appeal is hereby dismissed. 9. In the result, the appeal is partly allowed.” 10 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 11. The assessee being aggrieved with the order of the CIT(Appeals) to the extent he had upheld the addition of Rs.3,79,365/- (supra) has carried the matter in appeal before the Tribunal. 12. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 13. Shri Vimal Kumar Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that as the assessee’s balance investment of Rs.3,79,365/-(supra) in the subject property was sourced out of the past/accumulated savings of the assessee, therefore, there was no justification for the lower authorities to have held the same as having been made out of the assessee’s unexplained sources. The Ld.AR submitted that the assessee had been filing his income tax returns for the last ten years i.e. since A.Y.2007-08. The Ld. AR further submitted that the assessee is engaged in the business of retail trading of items related to food, e.g. ready to eat foods items, packed food items etc. The Ld. AR to fortify his aforesaid claim that the balance amount of investment in the subject property was sourced out of past/accumulated savings a/w. income derived by the assessee during the current year had drawn support from the fact that the assessee had for the year under consideration filed his return of income declaring an income of Rs.2,75,060/-. The Ld. AR 11 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 further submitted that as the orders passed by the lower authorities smacks of arbitrariness, and were devoid of any merit, therefore, the addition sustained by the CIT(Appeals) was liable to be struck down. 14. Dr. Priyanka Patel, Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. The Ld. DR submitted that as the assessee had for the year under consideration filed his return of income declaring a meagre income, therefore, his claim as regards the availability of a substantial amount of cash in the form of past savings/accumulated funds did not merit acceptance. 15. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. As observed by the CIT(Appeals), and rightly so, the assessee except for harping on his claim that the balance investment of Rs.3,79,365/- (out of Rs.10,91,833/-) in the subject property made by him during the year under consideration towards purchase of plot was sourced out of his past savings/accumulated funds a/w. current year income, had failed to substantiate the same based on any irrefutable documentary evidence. At the same time, I am of the view that as the assessee had been filing his income tax returns since A.Y.2007- 08, therefore, he would have in possession of certain amount of past savings/accumulated funds. Considering the totality of the facts involved 12 Anil Saluja Vs. ITO, Ward- Bilaspur ITA No. 483/RPR/2024 in the present case, I am of the view that the assessee can safely be held to be in possession of cash amounting to Rs.1 lac at the time of making the subject cash deposits. Accordingly, the order of the CIT(Appeals) is modified in terms of my aforesaid observations and the addition sustained by him is scaled down to Rs.2,79,365/- [Rs.3,79,365/-(-) Rs.1 lacs]. 16. In the result, appeal of the assessee is partly allowed in terms of the aforesaid observations. Order pronounced in open court on 05th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 05th December, 2024. ****SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "