CHANDER MOHAN BHATI,JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, JAIPUR, JAIPUR

ITA 732/JPR/2025

AI Insights

The case involves Shri Chandra Mohan Bhati, who appealed against the order of the Learned CIT(A) which confirmed the additions made to his income by the Assessing Officer for the assessment year 2016-17. The additions included Rs. 37,13,331 as undisclosed profits from the sale of properties and Rs. 55,445 as disallowance of deduction under section 24(b) of the Act. The Tribunal dismissed the appeal, agreeing with the findings of the lower authorities that the appellant had not adequately responded to notices and that the additions were justified based on the evidence and admissions made by the appellant during the search and seizure operations.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781590 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 02-05-2025
• Other Referred Cases: Principal CIT v. Abhisar Buildwell Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H
• Assessee Lawyers: RAJNI KANT BHATRA
• Keywords: Set aside; Opportunity of being heard; Unexplained investment; Period of limitation; Retraction; Principle of natural justice; Search and seizure; Loose papers; Assessment record
• Section: 143(3); 132; 153A; 131; 133A

Judgement Text

" vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘’A” JAIPUR Jh xxu Xkks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihyla-@ITA No. 732 /JP/2025 fu/kZkj.ko\"kZ@AssessmentYear : 2016-17 Shri Chandra Mohan Bhati 17, Kalyan Colony, Barkat Nagar Tonk Phatak, Jaipur – 302 015 cuke Vs. The ACIT Central Circle-4 Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAPPB 4314 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Rajnikant Bhatra,CA jktLo dh vksjls@Revenue by: Smt. Anita Rinesh, JCIT . lquokbZ dh rkjh[k@Date of Hearing : 24 /09/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 29/09/2025 PER: NARINDER KUMAR, JUDICIAL MEMBER Present appeal has been filed by the assessee challenging order dated 18-12- 2023 passed by Learned CIT(A), relating to the assessment year 2016-17 passed by ld. CIT(A), Jaipur-5. 2. Vide assessment order dated 31.12.2019, the Assessing Officer, make two additions in recomputing the total income of the assessee at Rs.44,00,800/-. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 2 3. One addition of Rs.37,13,331/-was on account of undisclosed profit. The other addition of Rs. 55,445/-by way of disallowance of deduction under section 24(b) of the Act. 4. When the assessee was in appeal before Learned CIT(A), against the assessment order, 5 notices under section 250 of the Act came to be issued by the said office to the assessee, but, as observed in para 4 of the impugned order passed by Learned CIT(A), there was no response from the assessee-appellant to any of said notices. 5. Ultimately, Learned CIT(A) proceeded to dispose of the appeal on merits on the basis of material available on record. 6. Observations and reasons recorded by Learned CIT(A) while dealing with the matter and the issues involved, and in dismissing the appeal, find mention in para 5 to 7 of the impugned order. 7. That is how, feeling dissatisfied with the impugned order, the assessee is before this Appellate Tribunal. 8. It may be mentioned here that as per deficiency note by the Registry of the Appellate Tribunal, present appeal came to be filed 428 days after the prescribed period of limitation. In this regard, appellant has filed an application dated 2.5.2025 seeking condonation of delay. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 3 As claimed by the applicant, it was in the month of December, 2023 that he handed over 4 orders passed by Learned CIT(A)-5, Jaipur, relating to the assessment years 2014-15, 2015-16, 2016-17, and 2017-18 to his CA Shri Rakesh Kumar Kachhawal from M/s B. Khosla & Company, for the purpose of challenging the same by way of appeals, but the said authorized representative told him subsequently that he inadvertently forgot tofile against the order passed by Learned CIT(A) for the assessment year under consideration, even though he had filed other 3 appeals, pertaining to other 3 assessment years within the prescribed period of limitation. 9. Learned AR for the applicant has submitted that the assessee received penalty order dated 27.3.2025, passed under section 271(1)© relating to the assessment year under consideration and delivered the same to his Chartered Accountants, and it was thereupon that the CA found that he had forgotten to file appeal to challenge the impugned order. Accordingly, the contention is that delay in filing of the appeal may be condoned, as the same occurred due to mistake on the part of the CA,he having forgotten to file appeal against the impugned order. 10. In support of the claim put forth in the application, the applicant has furnished his own affidavit. In addition thereto, the concerned CA-Sh. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 4 Rakesh Kumar Kachhawal, has furnished his own affidavit to support the applicant. 11. In view of the affidavit of the applicant, supported by that of Shri Rakesh Kumar Machhawal, the Chartered Accountant working with M/s B. Khosla & Co., which have gone unchallenged, having regard to the mistake admitted by the CA of the applicant in not having filed the appeal, even though asked for by the applicant, we deem it to be a fit case to condone delay in filing of the appeal. We order accordingly. On Merits 12. In the memorandum of appeal,the appellant challenged the impugned order byraising following grounds of appeal: ‘’1. That on the facts and in the circumstances of the case the Id CIT (A) is wrong, unjust and has erred in law in passing impugned order an ex-parte basis and without properly appreciating material on record and submissions made by the appellant in assessment proceeding and may be set aside 2. That without prejudice to the ground No (1) above on the facts and in the circumstances of the case, the id CIT (A) is wrong and has erred in law in not accepting plea of the appellant that the proceeding initiated by the Id AO us 153A of the IT Act. 1961 and consequent assessment made u/s 153A r.w.s. 143(3) were wrong and bad in law 3. That without prejudice to the ground No. (1) & (2) above on the facts and in the circumstances of the case Id CIT(A) is wrong, unjust and has erred in law in confirming addition of Rs. 3713331 made by the Id AO to the income of the appellant after upholding finding recorded by the Id AO that (a) the appellant has allegedly purchased plot No. 9, Adrsh Basti, Ruparampura, Touk Phatak, Jaipur even though sale deed thereof was not registered is favour of the appellant and furthers the appellant has allegedly made investment to the tune of Rs. 12500000 in the said Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 5 plot/construction thereon out of his alleged unaccounted and/or undisclosed income, and (b) the appellant has allegedly earned profit of Rs.3713331- during the year from the sale of the said project 4. That without prejudice to the ground No. (1) & (2) above on the facts and in the circumstances of the case the ld CIT(A) is wrong, unjust and has erred in law (a) in confirming disallowance of Rs. 55445/- claimed by the appellant on account of interest on self occupied property u/s 24(b) of the IT Act, 1961 allegedly on the ground that the appellant is only co-applicant of the housing loan on which said interest is paid (b) in not accepting alternate plea of the appellant that deduction for above said interest be directed to the allowed in the hands of Smt. Laxmi Devi, wife of the appellant, owner of the said property.’’ 13. It is pertinent to mention here that as observed by Learned CIT(A) in the impugned order, 5 notices under section 250 of the Act were issued to the assessee-appellant, but the appellant did not furnish any response to any of the 5 notices. 14. In this part heard matter listed again on 24.9.2025 for hearing of further arguments, when the appeal was taken up, Learned AR for the appellant contended that principles of natural justice having not been followed by Learned CIT(A), by not providing reasonable opportunity of being heard to the appellant, the appeal dismissed vide impugned order, be restored to its original for decision afresh, after providing an opportunity to the appellant of being heard. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 6 15. On the other hand, Learned DR submitted since Learned CIT(A) had issued five notices, ample opportunity of hearing the appellant was granted but,the appellant remained non-compliant, and as such, there is no merit in the contention that no reasonable opportunity was granted to the appellant by Learned CIT(A) in connection with his appeal, or for remand of the matter on this ground. 16. Learned DR further submitted that since the entire relevant material is on record, the Bench may consider the matter on merits and law also, instead of restoring the matter to the files of Learned CIT(A). 17. As regards said submission, Shri Rajnikant Bhatra, Learned AR for the appellant was categorically asked as to whether he was to make any further submission on the issue or as to whether he was to seek adjournment. Thereupon, Learned AR for the appellant expressed that he was not to seek further adjournment or opportunity, and then came up with therequest that his written submissions only be taken into consideration in deciding the appeal on merits. Accordingly, while observing all this in the proceeding sheet dated 24.9.2025, the appeal came to be listed for orders on merits. Whether reasonable opportunity of being heard was afforded to the appellant by the First Appellate Authority? Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 7 18. As regards this ground raised on behalf of the appellant that reasonable opportunity of being heard was not afforded by the Learned CIT(A) to the appellant, record reveals that the office of Learned CIT(A) issued five notices under section 250 of the Act to the appellant, but there was no response from the side of the assessee. In this regard, reference may be made to the table available in para 4 of the impugned order, which describes the date(s) of issuance of notice(s) by the said office to the assessee, and that there was no response to any of the said five notices. As per Paper Book dated 21.8.2025 submitted on behalf of the appellant, in reply to the last mentioned notice dated 13.12.2023 issued for 18.12.2023, on behalf of the appellant, an application seeking adjournment of the appeal before Learned CIT(A) was submitted on the portal, but the Learned CIT(A) did not consider said request for adjournment, and proceeded to dispose of the appeal vide order dated 18.12.2023. 19. On the other hand, learned DR for the department has pointed out that copy of the e-proceedings Response Acknowledgement available at page 1 of the Paper Book which purports to be copy of an application uploaded on the portal of the department seeking adjournment of the appeal, does not contain any date of communication of said request to the Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 8 office of Learned CIT(A), as the relevant column meant for date of communication of the document is lying blank. It is true that said column meant for date of sending of communication on the e-portal of the department is lying blank, but, on the right side top corner of said document purported to have been uploaded by the appellant on the e-portal, there is acknowledgement number: 558228361181223. The last 6 digits of this number purports todenote the date of acknowledgement. It is a different matter that from this document, copy whereof has been submitted as page 1 of the Paper Book, it cannot be made out as to at what time, on the said date, said application was uploaded on the e-portal of the department. As per case of the department, last mentioned notice was admittedly issued to the assessee on 13.12.2023 for 18.12.2023, and as noticed above, adjournment was sought by moving application on e-portal on 18.12.2023, but, there is no explanation from the side of the appellant as to why the adjournment application was submitted on the e-portal on the date of hearing itself, and not before that. At the cost of repetition, it may be mentioned that the appellant has not furnished any material to suggest as to at what time, said application was uploaded on the e-portal on 18.12.2023. In absence thereof, it cannot Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 9 be said that said application seeking adjournment came to be put up before Learned CIT(A) on 18.12.2023 itself or not, for his perusal and consideration. 20. Admittedly, three notices were issued prior to the said last notice dated 13.12.2023, but the appellant did not submit any reply to any of the said notices. Appellant has not furnished any explanation as to why said 3 notices issued earlier, were not complied with. In the given situation, we do not find any merit in the contention raised on behalf of the appellant that Learned CIT(A) did not afford reasonable opportunity to the appellant of being heard. 21. As noticed above, learned AR for the appellant and Learned DR for the department have submitted that this Bench may decide the appeal on merits on the basis of material available on record. Learned AR for the appellant has categorically submitted that no oral argument is to be advanced, and that his written submissions may be considered for deciding the appeal on merits. So, we proceed to deal with the grounds of appeal as put forth in the written submissions. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 10 First Addition 22. While challenging the impugned assessment, and the impugned order passed in appeal, as per written submissions furnished on behalf of the appellant, one of the grounds of challenge is that the assessment made under section 153A read with section 143(3) of the Act is bad in law, the reason being that neither any incriminating document nor bullion, cash or other valuable article or things were seized, but even then Learned CIT(A) rejected said ground raised in the appeal filed there. Consequently, the appellant has challenged the addition of Rs. 37,13,331, and contended that same deserves to be deleted especially when no incriminating document was seized and there was no corroborative evidence. In support of this contention, reliance has been placed on decision in Principal CIT v. Abhisar BuildwellPvt. Ltd., (2023) 293 Taxman 141/149. Com 399. 23. While dealing with the contentions relating to challenge as regards the first addition of Rs. 37,13,331/-, Learned CIT(A) observed in the impugned order that the addition was based upon incriminating material found as well as the admission made by the assessee in the statement recorded under section 132(4) of the Act. Undisclosed Profit 24. As noticed above, the Assessing Officer vide assessment order dated 31.12.2019, made first mentioned addition due to undisclosed profit of Rs. 37,13,331/- . Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 11 25. Case of the department is that on 23.08.2017 search and seizure action u/s 132 of the Act and /or survey action u/s 133A of the Act was carried out by the Department on the members of Shri Chandra Mohan Bhati and Shri Kishan Singh Group, Jaipur. Said action led to recovery of incriminating material including documents, books of account and loose papers from the premises of members of the above said group. The assessee-appellant herein happens to be one of the members of the said group. These facts are nowhere in dispute. 26. Further, it is a case of the department that a TEP was received that the assessee and his partners to Shri Kishan Singh were involved in investing their unaccounted and undisclosed income, in purchase of land and development of projects thereon. The information further revealed that the assessee-appellant and Shri Kishan Singh had purchased a land, plot No. 9, Adarsh Basti, Ruparampura, Tonk Phatak, Jaipur, vide an agreement in the name of two benamidars, Shri Kishan Mal and Shri Ramesh Chand Saini for sale consideration of Rs. 1.50 crores and further that they had developed a three storied building, namely Balaji Towers, on the said piece of land. As Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 12 finds mention in the assessment order, copy of an agreement to sell was also received by the department . 27. During survey at the premises of M/s Prince Bhojnalaya, Proprietorship firm of Shri Akshat Bhati S/o Shri Chandra Mohan Bhati certain incriminating documents were found and impounded. Some of the contents of the documents, so found and impounded in the course ofsurvey have also been referred to in the assessment order, especially in para 8 and 9, and same read as under:- “The document impounded at Annexure-A, Exhibit-2 page no. 22-29 is a registered sale deed dated 24.10.2013 executed between Semi. Mohini Devi (Seller) and Shri Ramesh Chand Saini S/o Shri Chhotu Mali (Buyer) for sale of southern part of residential plot No. 9, Adarsh Basti, Rampurarupa, Tonk Phatak, Jaipur measuring 20 x 60 feet except the shop on south-east corner without terrace. As per the deed, the said plot was sold to Shri Ramesh Chand Saini by Smt. Mohini Devi W/o Shri Trilok Chand Sharma for total consideration of Rs. 16 Lakhs and out of total sale consideration amount of Rs. 10 lakhs was paid in cash at the time of registration and amount of Rs. 6.00 Lakhs was paid through two cheques of Rs. 3.00 lakhs each (Ch. No. 076712 dt. 23.10.2013 and No. 076713 dt. 25.10.2013). 1333350 9. During the search proceedings, another registered deed, dated 24/10/2013, was seized from the residential premises of Shri Chandra Mohan Bhati, which was inventoried as Annexure-AS, Exhibit-7 page no. 212-224, was a sale deed executed between Sh. Ram Krishna Sharma (seller) and Shri Kishan Mali S/o Shri Chhotu Mali (purchaser) for sale of northern part of residential Plot No. 9, Adarsh Basti, Rampurarupa, Tonk Phatak, Jaipur measuring 20 x 60 Feet except the shop on north-east corner without terrace. As per this registered deed the said land was sold to Shri Kishan Mali for total consideration of Rs. 16 Lakhs and out of total sale consideration, Rs. 10 lakhs were paid in cash at the time of Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 13 registration and Rs. 6.00 Lakhs were paid through two cheques of Rs. 3.00 lakhs each (No. 989600 dt. 13.05.2013 and No. 000006 dt. 14.05.2013).” 28 Case of the department, as further mentioned in the assessment order, is that during search proceedings, Shri Ramesh Chand Saini and Shri Kishan Mali, were summoned u/s 131 of Income-tax Act, 1961 and their statements were recorded on oath on 23.08.2017. Shri Kishan Mali and Shri Ramesh Chand Saini were confronted with the contents of the above mentioned agreement dated 14.04.2013 and registered sale deeds. They were asked about the source of payments made by them as mentioned in these agreements and sale deeds. Shri Kishan Mali was also confronted with the registered sale deed dated 24.10.2013. In his reply, he stated that same was a sale deed in respect of Plot No. 9, Adarsh Basti, Tonk Phatak, Jaipur, measuring 121.78 sq yards. He further stated that Shri Kishan Singh and Shri Chandra Mohan Bhati had forced him to sign on the said sale deed. He further stated that they had also forced his brother Shri Ramesh Chand Saini to sign on sale deed of the other part of the same plot. Shri Kishan Mali was asked to explain the source of the investment made in purchase of the plot. In his reply, Shri Kishan Mali stated that he Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 14 had not made any payment and that he had allowed them only to use his name, whereas the actual beneficial owners were Shri Kishan Singh and Shri Chandra Mohan Bhati, purchasers of the said plot in his name. He further stated that all expenses for purchase of the said plot were borne by Shri Chandra Mohan Bhati and Shri Kishan Singh. Moreover, the sale proceeds of the shops, which were constructed on the said plot, were also received by them. He stated that he had never received any money or other benefits on sale of the shops as mentioned above and further stated that his name was used in the entire transaction. It is noteworthy that the Assessee did not allege any ill-will or animosity against him for the abovesaid statements made by Shri Kishan Mali. Nothing was brought on record to suggest as to why Shri Kishan Mali levelled the abovesaid allegations against the assessee and his partner. In this situation, the Assessing Officer rightly observed that it was for Shri Kishan Singh and Chandra Mohan Bhati to explain the source of investment. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 15 29. Shri Ramesh Chand Saini s/o Shri Chhotu Mali was also examined on oath u/s 131 of Income-tax Act, 1961 and his statement was recorded on 23.08.2017. He too was questioned andto explain about the details of payment of Rs. 123 Lakhs, as reflected on back side of agreement and alsothe details of payment of Rs.16 Lakh as mentioned in the registered sale deed dated 24.10.2013. In response, Sh. Ramesh Chand Saini stated that he had not paid any cash as mentioned in the agreement or in the registered sale deed. As regards payment of Rs. 6 lakhs through heques as mentioned in the registered sale deed, Shri Ramesh Chand Saini stated that said amount was made available to him by Chandra Mohan Bhati and thereupon, he deposited it in his bank account from time to time. He further stated that his name was used in this entire transaction even thoughthe maker of the statementhad no concern with the said property. 30. Shri Ramesh Chand Saini also stated that Shri Kishan Singh and Shri Chandra Mohan Bhati had purchased plot No. 9, Adarsh Basti, Tonk Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 16 Phatak, Jaipur admeasuring 266.66 sq yard, in his name and his brother Shri Kishan Mali and for this transaction, sale consideration was actually paid by Shri Kishan Singh and Shri Chandra Mohan Bhati, and further thatpayments which were made through cheques were actually arranged by Shri Kishan Singh and Shri Chandra Mohan Bhati and consideration received against the sale of shops in his account was ultimately withdrawn by them through self-drawn-cheques. He further stated that said persons also used his account for other payments like Rs. 1.5 Lakh made toMs. Vinika Bhati, daughter of the assessee, Rs. 2.00 lakhs to Smt. Laxmi Bhati, wife of the assessee and Rs. 5.00 lakhs to Smt. Anjali Rathore wife of abovesaid Sh. Kishan Singh. Significant to note that the Assessee did not allege any ill-will or animosity against him for the abovesaid statements made by Shri Kishan Mali. Nothing was brought on record to suggest as to why Shri Ramesh Saini levelled the abovesaid allegations against the assessee and his partner. In this situation, the Assessing Officer rightly observed that it was for Chandra Mohan Bhati to explain the source of investment. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 17 Search at the house of the Assessee 31. Further, it is case of the department that on 23.08.2017 a search and seizure action u/s 132 of the Act was carried out at the residential premises of the assessee i.e. 17, Kalyan colony, Tonk Phatak, Jaipur, which led to seizure of survey documents. The assessee-appellant was confronted with the said documents marked as Exhibit-01 to 11 of Annexure-AS. When so confronted, the assessee-appellant stated that said papers related to investment in Balaji Towers, and sale of shops/flat raised in the building. There is nothing to suggest that when so confronted with the abovesaid documents, the assessee was under the impact of any undue influence or coercion or threat from anyone, including officers of the Income Tax Department. 32. In para 15 of the assessment order, the Assessing Officer described details of shops sold by the assessee and his partner Shri Kishan Singh and also details of loans claimed to have been taken by him. The assessee was confronted with the contents of page 13 to 16 of Exhibit-02 relating to saleof shops by the assessee and his partners, and Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 18 details of loans claimed to have been taken by the assessee. The assessee, during search proceedings is claimed to have stated that said pages contained statement of account of income from sale of shops raised at Balaji Towers and also the amount of loans borrowed by him from various persons. 33.. Exhibit-02, note book was also found and seized from the residential premises No. 17 Kalyan Colony, Tonk Phatak, jaipur on 2308.2017. The assessee was confronted with the said documents. Assessing Officer has described the reply of the assessee to question No. 16 as under: “Shri Chandra Mohan Bhati in reply to question number 16 stated that page nos. 13 to 16 of this exhibit contain details of investment in the Balaji Market/Tower constructed at Plot No. 9, Adarsh Basti, Ruparam Pura, Tonk Phatak, Jaipur and also contain details of sale of shops in Balaji Tower. He further stated that he had invested amount of Rs. 1.39 Crores in construction and development of Balaji Tower which is out of his unaccounted and undisclosed income. He offered this unaccounted investment of Rs. 1.39 crores in Balaji Tower for taxation as his undisclosed income for financial year 2016-17. He further admitted that he had earned net profit of Rs. 1,03,44,808/- from sale of shops at Balaji Tower which he has not disclosed in his return of income.” 34. Again, there is nothing to suggest that when so confronted with the abovesaid documents, the assessee was under the impact of any undue influence or coercion or threat from anyone, including officers of the Income Tax Department. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 19 Further, it is case of the department that the assessee offered the above said unaccounted profit of Rs. 1,03,44,808/- from sale of shops for taxation for the financial year 2016-17. 35. It is also case of the department that subsequently the assessee disclosed to have availed and mortgage loan of Rs. 14,00,000/- from SBBJ Bank, and further that he had invested said amount in the construction of Balaji Towers, in this manner, the amount offered by the assessee for taxation, was revised. Had this fact not been disclosed to the Officers, by the assessee, how they would have gained knowledge thereof. Consequently, the assessee offered a total sum of Rs. 2,28,44,808/- as is undisclosed income for the assessment year 2017-18. 36. In his statement, in reply to question no. 28, the assessee stated that plot no. 9 Adarsh Basti, Tonk Phatak, Jaipur was purchased in the name of Shri Ramesh Chand Saini and Shri Kishan Mali, but the entire consideration for the purchase of said plot was paid by him, in addition to the expenses incurred on construction on the said plot. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 20 The assessee further disclosed that he had agreed with Shri Kishan Singh whom he treated like his brother, that both of themshall share profit on sale of shops/ flat in equal shares. 37. Coming to the sale of certain shops from the said building or project, the assessee also stated that Shri Ramesh Chand Saini and Shri Kishan Mali sold 13 shops respectively and further that the sale consideration for the shops was received by him (assessee) as his share of profit. From the above material, the Assessing Officer observed in para 20 of the assessment order that the assessee and Shri Kishan Singh had purchased plot no. 9 Adarsh Basti, Tonk Phatak, Jaipur in the name of Shri Ramesh Chand Saini and Shri Kishan Malo, and then got constructed Balaji Tower on it. 38. From para 21 of the assessment order, it transpires that the assessee even after having surrendered a sum of Rs. 2,28,44,808/-, did not act upon the same as per offer and disclosure made by him in his statement recorded u/s 132(4) of the Act. 39. As regards survey noting at page 13 to 16 of Annexure AS-2, seized from the residence of the assessee, he denied that the same related to him. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 21 40. Ultimately, having regard to the documentary evidence and statement of other associates, in para 23 of the assessment order, the Assessing Officer made following observations,:_ “22. During the assessment proceedings, the assessee was asked about the notings on the page numbers 13-16 of Annexure AS-2 seized from his residence. He has replied that noting soon the said pages not related to the assessee. 23. The documentary evidences and the statements of the other associates are apparently against this stand of the assessee. The statement of Sh. Kishan Singh, assessee's partner in the project of Balaji Towers was recorded u/s 131 of the I. T. Act, 1961. Statements were also recorded of the two benamidars, Sh. Kishan Mali and his brother, Sh. Ramesh Chand Saini.” 41. As regards sale of shops at Balaji Tower, in view of entry recorded at page 14 and 15 of Exhbit-2 following details were calculated:- Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 22 42. After going through the contents of the above said table and other material available, the Assessing Officer made following observations:- “The above table depicts only a part of the consideration. The total number of shops at Balaji Tower was twenty six and a flat was also built on the second floor of the three storey building. The sale consideration of only sixteen shops are mentioned in the seized document, hence to ascertain the total sale consideration of the remaining shops and flat, we have to examine the page-3 of the annexure AS-1, seized and impounded from the residence of Sh. Kishan Singh, which shows the total sale consideration received by them (Confirmed and surrendered by Sh. Kishan Singh)” Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 23 43. Page no. 3 of Annexure AS-1, impounded from the residence of Kishan Singh, following details relating to BalaJiTower purchased were noticed by the Assessing Officer:- Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 24 Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 25 44. In para 27 and 28, the Assessing Officer, calculated ratio of profit and cost of price of the shops and flats by observing as under:- “27. The total sale consideration of the shops and flat is of Rs 4,53,50,000/-hence the profit ratio has to be worked out according to the ratio of investment of both the persons. On the top of this page, the details of investment of both the persons, i.e. Sh. Kishan Singh and Sh. Chandra Mohan Bhati are delineated. The ratio of the profit has been stated as 121:139=260. The total sale consideration is of Rs. 4,53,50,000/- Total cost of construction is of Rs. 2,60,00,000/- Hence, the gross profit is of Rs. 1,93,50,000/- G. P 5 is 42.67% Assessee's share of profit is 139/260= Rs. 1,03,44,808/- 28. The shops and the flat of \"Balaji Towers\" were sold during the F. Y. 2013-14, 2016-17 and 2016-17; hence the profit has to be decided for each assessment year. During the year, the remaining thirteen shops of \"Balaji Towers\" were sold off by the assessee and the full sale consideration recovered. To determine the profit component, the cost price of the shops and the flat as calculated as under: Cost of each shop: 2,60,00,000-68,79,600/26-7,35,400/- The profitonsale of the shops are 1,65,06,000- (7,35,400 x 13) 95,60,200/-=69,45,800/- The assessees share of profit as per the ratio of his investment is 69,45,800x 139/260-37,13,331/-“ Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 26 45. So far as investment made in purchase of land and expenses incurred on construction of the building, including profit of sale of four shops, the Assessing Officer was of the view that the said amount were assessed as undisclosed income of the assessee for the assessment year 2014-15; profit earned on sale of 16 shops and flats was determined and added to the income of the assessee as undisclosed income for the assessment year 2015-16. Profit on sale of shops during the year under consideration 46. As is available from the assessment order, profit earned onsale of remaining shops i.e. Rs. 37,13,331/- was added to the income of the assessee, for the year under consideration i.e. A.Y. 2016-17, and added to the income of the assessee. As noticed above, the claim of the department regarding investments made by the assessee and his partner in the abovesaid project, right from the stage of purchase of lands upto the stage of sale of shops onwards during the abovesaid assessment years, including the assessment year under consideration here, stood established from documentary evidence and oral statements of Shri Kishan Mali and Shri Ramesh Chand Saini, the two brothers, and further that the statements of said two brothers find Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 27 support from the documentary evidence. Even from the statement of the assessee, the version put forth by the two brothers and the contents of the documents found and seized fully supported the case of the department. In view of all this, there is no merit in the contention on behalf of the appellant that this is a case where is no incriminating material against him or that the authorities below fell in error in initiating proceedings against the assessee. It is also noteworthy that the assessee did not bring on record any cogent or convincing material to suggest that neither any construction was got raised by him and his partner on the abovesaid pieces of land and that nor any of the shops constructed thereon was actually sold by anyone of them. Not only this, the assessee had even offered and surrendered specific amount by way of investments made on land as well as on the construction as his undisclosed income. As observed by the Assessing Officer, subsequently, while filing his return of income in response to the notice u/s 153A, the assesseewas found to have not reflected any such surrender in the return of income furnished. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 28 Assessing Officer rightly observed that retraction, whenever made, should be supported by strong evidence. Here, it is not case of the assessee that soon after the search proceedings or action, he lodged protest with the department as regards his statement which included offer and surrender of the abovesaid amount. There is no explanation from the side of the assessee for not lodging any protest with the department soon after the search proceedings, which fact speaks volumes against him. Significant to note that even during search action or proceedings, the assessee did not lodge any protest on the point of offer and surrender. Nothing has been brought to our notice to suggest that it was a case of any duress or coercion or undue influence on the assessee in recording of offer and surrender of the amount. 47. As regards retraction made by the assessee, the Assessing Officer made following observations in para 30 of the assessment order:- “30. The assessee has in his statement recorded u/s 132(4) of the T. Act, 1961 surrendered the amount of investment on land as well as on the construction as his undisclosed income. Later on, while filing his return of income in response to the notice u/s 153A, the assessee has retracted from the said statement, as the return does not reflect any such surrender. Such retraction, however, should be supported by strong evidence stating that the earlier statement was recorded Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 29 under duress and coercion, and this has to have certain definite evidence to come to the conclusion indicating that there was an element of compulsion for assessee to make such statement. The assessee, while filing the return of income, has not disclosed the surrendered income and hence, retracted from the admission made earlier. The retraction loses its conviction if filed after considerable lapse of time, the retraction has been filed only during the assessment proceedings, i.e. more than two years later.” We may further observe that even if the assessee, while filing the return of income, did not declare the income as offered and surrendered by him during search proceedings, it cannot be said to be a case of retraction from the admission made earlier. Retraction has to be specific, prompt and coupled by evidence to justify the same. 48. Here, in absence of any specific, prompt retraction before the competent officers and evidence to justify or support the same, it cannot be said that no such offer or surrender was made by the assessee. 49. In view of the material available on record and discussed in the assessment order in detail, with reasons, reference made by Learned AR for the appellant, in the written submissions, to certain answers by the assessee to certain questions is of no help to the appellant to disbelieve the claim of the department as regards the undisclosed investments and the income. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 30 50. One of the submissions in the written arguments is that there was contradiction version in the statement of the assessee as regards the amount of undisclosed income. But, said contradiction does not adversely affect the case of the department or help the claim of the assessee, in view of the calculations described in the assessment order as regards the profits onsale of the shops. Even if an assessee offers certain amount(s) in the statement made during the proceedings, which as contended in the written submissions, was not correct or was contradictory as appearing in different answers to different questions put to him, this fact also does not help the appellant, when in the end the Assessing Officer made calculations taking into consideration the entire material available with him, in ultimately arriving at the conclusion that the assessee made profit of Rs. 37,13,331/-during the year under consideration on sale of 13 shops only. 51. In view of the above discussion, we do not find any merit in the claim of the appellant that neither any offer or surrender was made or that the offer or surrender of undisclosed income was legally retracted. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 31 Conclusion 52. As a result, we see no ground to reject as the observations made by the Assessing Officer and the conclusions drawn by Learned CIT(A) on the point of profit earned by the assessee and his partner on sale of some of the shops from the said building Balaji Tower during the year under consideration. Second Addition 53. In para 31 of the assessment order, the Assessing Officer observed that the assessee had claimed deduction at Rs. 55,445/- u/s 24(b) of the Act, on self occupied property, 17 Kalyan colony, Jaipur, but on perusal of the assessment record for the assessment year 2011-12 relating to Smt. Laxmi Bhati it was revealed that housing loan was availed on property no. 16, Telephone colony, Jaipur owned by Smt. Laxmi Bhati and not on property No. 17. The Assessing Officer further observed that as the property belonged to Smt. Laxmi Bhati, said deduction claimed u/s 24(b) of the Act was being disallowed and added to the income of the assessee. 54. While challenging the second addition due to disallowance of Rs. 55,445/-, in the written submission it has been submitted that said deduction was claimed by the assessee as per legal provisions, but the Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 32 Assessing Officer fell in error in disallowing the same, and Learned CIT(A) also fell in error in having confirmed the assessment order, by not accepting the alternative plea that deduction for the said interest be allowed in the hands of the wife of the appellant. 55. As noticed above, the assessee has come up with alternative plea as regards said second addition. There is nothing in the submissions to point out as to under which provision said benefit could be allowed to Smt. Laxmi, wife of the assessee, when the proceedings were conducted qua the assessee and another, on the above mentioned specific allegations of undisclosed investment and profit, in addition to the issue of dedication. 56. In order to support the claim that the assessee had legally claimed said deduction, it was for the assessee to establish his claim by leading cogent and convincing evidence. However, no evidence has been brought on record to support his claim or to rebut the allegations levelled by the Assessing Officer, based on material. Conclusion 57. As a result, we do not find any merit in the contention raised by the appellant while challenging the second addition. Printed from counselvise.com ITA No. 732/JPR/2025 Sh. Chander Mohan Bhati, Jaipur. 33 Result 58. In view of the above discussion, reasons and findings, this appeal deserves to be dismissed. While sustaining the impugned order, whereby the assessment order was confirmed, we hereby dismiss present appeal filed by the assessee-appellant. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 29/09/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/09/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Chander Mohan Bhati, Jaipur. 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-4, Jaipur. 3. vk;djvk;qDr@ Theld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 732/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "