BINOD KUMAR MAHIPAL,KOLKATA V. ITO, WARD-2(10, KOLKATA

ITA 677/KOL/2024

AI Insights

The case involves an appeal by Binod Kumar Mahipal against the order of the National Faceless Appeal Centre, Delhi, which confirmed an addition of \\u20b9;2,39,130/- to the assessee's income for the Assessment Year 2013-14. The addition was initially made by the Assessing Officer under sections 147 and 144 of the Income Tax Act, alleging that the amount was unexplained money introduced by the assessee. The Tribunal, referencing a similar case (Shree Shiromani Project Pvt. Ltd. vs ITO), found that the Assessing Officer had not correctly appreciated the facts, leading to a wrongful addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25220 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Other Referred Cases: Shree Shiromani Project Pvt. Ltd. vs ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALTAF HUSSAIN
• Assessee Lawyers: ANKIT JALAN
• Keywords: Set aside; Reopening of assessment; Competent authority; Bogus
• Section: 147; 148; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.677/KOL/2024 (Assessment Year:2013-14) Binod Kumar Mahipal 1B, Raja Subodh Mulick Square, Ground Floor, Dharmatala, S.O. Kolkata-700013 West Bengal Vs. ITO, Ward-2(1) Aaykar Bhavan P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. ADZPM8369G Assessee by : Shri Ankit Jalan, AR Revenue by : Shri Altaf Hussain, DR Date of hearing: 25.02.2025 Date of pronouncement : 01.04.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 05.01.2023 for the AY 2013-14. 02. There is a delay in filing the appeal by 27 days for which the assessee has filed the condonation petition along with the affidavit explaining the reasons for the delay. 03. After hearing the rival contentions and perusing the materials available on record, we find that the delay in filing the appeal was for sufficient and bonafide reasons and accordingly, the same is condoned by admitting the appeal for adjudication. Page | 2 ITA No.677/KOL/2024 Binod Kumar Mahipal; A.Y. 2013-14 04. At the time of hearing, the ld. Counsel for the assessee pressed only the ground no.5 which is extracted as under:- “5. For that the ld. CIT (A) was not justified in confirming the addition of ₹2,39,130/- made by the ld. AO on account of unexplained money.” 05. The ld. Counsel for the assessee submitted that the issue is squarely covered by the decision of the co-ordinate Bench in the case of Shree Shiromani Project Pvt. ltd. vs ITO in ITA No. 106/KOL/2024 for A.Y. 2013-14 vie order dated 29.07.2024, wherein the issue of purchase of land by 41 purchaseers including the assessee has been decided by the co-ordinate Bench by holding that there is no application of mind by the ld. AO to the facts and circumstances in this case not only the reopening of assessment is bad in law but the additions made are also not sustainable in the eyes of law and accordingly, the impugned addition of ₹2,94,13,031/- made by the ld. AO by alleging the amount introduced by way of sale of property by the assessee was deleted. The assessee, therefore, prayed that the amount of addition may kindly be deleted by setting aside the order of the ld. CIT (A) and directing the ld. AO to delete the addition. 06. The ld. Departmental Representative on the other hand relied on the order of the authorities below. 07. After hearing the rival contentions and perusing the materials available on record, we find that the assessee filed the return of income on 05.08.2013, declaring total income of ₹4,93,770/-. The case of the assessee was thereafter reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 20.03.2020, after obtaining the approval from the competent authority. The said reopening was made after receipt of information from Dy. Director of Income Tax (I & C.I.), Page | 3 ITA No.677/KOL/2024 Binod Kumar Mahipal; A.Y. 2013-14 Circle-1, Kolkata, that during the course of investigation it was found that assessee was amongst 41 persons who had purchased 394.77 decimal of land from Shree Shiromani Projects Private Limited for a consideration of ₹2,94,13,031/-, against the stamp duty valuation of ₹15,16,64,069/-. It was also informed the assessee had made a payment of ₹2,39,130/- in cash. Finally, the ld. AO treated the payment made by the assessee of ₹2,39,130/-as unaccounted money of the assessee and accordingly, same was treated as unexplained money and added to the income of the assessee in the assessment framed u/s 147 read with section 144 of the Act dated 30.09.2021. We note that the ld. AO has not appreciated the case correctly. In this case the land was not purchased by 41 persons from M/s Shree Shiromani Projects Private Limited for a consideration of ₹2,94,13,031/-, whereas the same was purchased by 41 persons including assessee from Smt. Sandhya Sadhukhan, Sri Ranjan Sadhukhan and Smt. Ritu Sadhukhan mentioned as Shri Binod Kumar Mahipal and Ors, who were allegedly the benamidars of the property in question. The alleged transaction was thoroughly examined by the competent authority under the provisions of Benami Property Transactions Act, 1988 and the competent authority recorded a finding that M/s Shree Shiromani Projects Private Limited was confirming the party in the said conveyance deed. Considering the facts, we are of the view that the addition made by the ld. AO was totally on the wrong facts. The case of the assessee find support from the decision of the co-ordinate Bench in the case of Shree Shiromani Project Pvt. ltd. vs ITO (supra), wherein the co-ordinate Bench has held as under:- “5.1 A perusal of the above reasons recorded would reveal that the allegation is that the assessee company has sold its own land by way of sham transaction and received Page | 4 ITA No.677/KOL/2024 Binod Kumar Mahipal; A.Y. 2013-14 sale consideration of Rs.2,94,13,031/-and further the allegation is that the said amount was paid in cash by the assessee itself to 41 persons in whose name the sale was recorded, who further paid the amount to the assessee through cheques/banking channel. The second allegation is that the assessee had received an amount of Rs.28,00,000/- from M/s Raghuvir Sales Pvt. Ltd. through banking channel. However, the Id. counsel for the assessee has brought our attention to the copy of an order bearing no.31/2018-19 dated 01.05.2018 passed u/s 24(4)(a) (ii) of the Prohibition of Benami Property Transactions Act 1988 in case of the assessee. A perusal of the aforesaid order, copy of which has been placed at page 12 of the paper-book, would reveal that the proceedings under Prohibition of Benami Property Transactions Act 1988 were initiated against the assessee in relation to the very same transactions of sale/purchase of the property. A perusal of the said order would reveal that firstly, the observation of the Assessing Officer in the reasons recorded that the assessee had sold the property in question was factually wrong. In fact, the said property in question was sold by the vendors, Smt. Sandhya Sadhukahn, Sri Ranjan Sadhukhan and Smt. Ritu Sadhukhan to the 41 persons mentioned as Shri Binod Kumar Mahipal and others who were allegedly the Benamidars of the property in question. The assessee namely Shree Shiromani Project Pvt. Ltd. was allegedly the beneficiary of the said transaction. The alleged transaction was examined thoroughly by the competent authority in the said proceedings and a finding was arrived to the effect that out of total sale consideration of Rs.2,94,13,013/-, an amount of Rs.2,39,130/ each was paid by the aforesaid 41 persons directly to the vendors and further an amount of Rs.4,78,261/- each on behalf of the aforesaid 41 persons was paid by the assessee through banking channel. It was further explained before the competent authority that the assessee was the confirming party in the said conveyance deed. That the assessee had entered into a Joint Development Agreement (JDA) with the said 41 persons and further that the litigation was going on in the Civil Court and subsequently in the High Court relating to the said JDA entered into by the assessee with the aforesaid 41 persons. So far as the fact relevant to the present. case is concerned, a factual finding has been given in the said order that the assessee had duly explained the source of the payment and which was found satisfactory. Not only this, the assessee has made another payment of Rs.6,00,000/- to Shri Nirmal Mukherjee and other, source of which was duly explained before the competent authority and after consideration of the entire facts and circumstances, the proceedings under Prohibition of Benami Property Transactions Act 1988 were dropped against the assessee. The observation of the Assessing Officer not only in the reasons recorded but also in the assessment order that the assessee has sold the property in question by way of sham transaction and further the assessee has introduced his own money through the 41 persons and has sold its own property and thereafter itself became the Benami beneficial owner of the property, is factually wrong and false. There is no application of mind by the Assessing Officer to the facts and circumstances of the case. In this case, not only the reopening of the assessment is bad in law but also the addition on merits is not sustainable in the eyes of law. In view of this, the impugned addition of Rs.2,94,13,031/- made by the Assessing Officer alleging that the amount introduced by way of bogus sale of the property by the assessee is ordered to be deleted.” Page | 5 ITA No.677/KOL/2024 Binod Kumar Mahipal; A.Y. 2013-14 08. We therefore respectfully following the finding of the Tribunal in the above decision, set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. 09. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 01.04.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 01.04.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "