DATTA JAYARAM GARAD,GADHANPURA, DIST. BEED V. THE INCOME TAX OFFICER, WARD 1(5), AURANGABAD

ITA 2727/PUN/2024

AI Insights

The case involves Datta Jayaram Garad, the appellant, who did not file a return of income for the Assessment Year 2011-12 but was found to have made an unexplained investment of Rs. 40,00,000 in immovable property. The Income Tax Department initiated scrutiny based on this investment. The Assessing Officer (AO) made a best judgment assessment under sections 144 and 147 of the Income Tax Act, 1961, adding the entire amount as unexplained investment under section 69. The appellant's appeal to the CIT(A) was unsuccessful, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found that the AO had not adequately verified the appellant's claims and documents and thus remitted the matter back for a thorough examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312457 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH
• Keywords: Additional evidence; Reasonable cause; Unexplained investment
• Section: 147; 148; 144; 142(1); 271(1)(c); 69

Judgement Text

" आयकर अपीलीय अधिकरण \"एस एम सी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2727/PUN/2024 धििाारण वषा / Assessment Year: 2011-2012 Datta Jayaram Garad, Near Municipal Corporation, Main Road, Gadhanpura, Tq. Majalgaon, Dist. Beed- 431131 Maharashtra PAN-APHPG1705Q Vs ITO, Ward- 1(5), Aurangabad Appellant Respondent Assessee by : None Revenue by : Shri Akhilesh Srivastava, Additional CIT Date of hearing : 24.04.2025 Date of pronouncement : 30.04.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of assessee pertaining to Assessment Year 2011-12 is directed against the order passed by CIT(A) National Faceless Appeal Centre, (NFAC) Delhi u/s 250 of the Income-tax Act, 1961 dated 13.06.2024 which in turn is arising out of the Assessment Order passed u/s 147 r.w.s 144 dated 26.12.2018. 2. Assessee has raised following grounds of appeal:- 1. \"The order passed is illegal, invalid and bad in law. 2 ITA No.2727/PUN/2024 2. The addition of Rs. 40,00,000/- as unexplained investment u/s 69 of the Income Tax Act, 1961 is incorrect and unjustifiable. 3. The leamed assessing officer erred in passing the said assessment order and assessing total income at Rs. 40,00,000/-. 4. The assessing officer also erred by charging interest u/s 234A, 234B,234C and initiating penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961. 5. Any other ground may be taken at the time of hearing.\" 3. When the case was called for none appeared on behalf of the assessee. On perusal of records we notice that in spite of serving valid notice to the assessee fixing the date of hearing on 27.01.2025, 20.02.2025, 17.03.2025 and on 24.04.2025, the assessee has not appeared in person or either through authorized representative. We therefore proceed to adjudicate the appeal on the basis of available records. 4. Brief facts of the case are that the assessee is an individual and did not file return of income for A.Y. 2011-12. Based on the information about the investment of Rs. 40,00,000/- made by the assessee for purchasing immovable property at Majalgaon District paid vide Purchase Deed dated 31.03.2011, the case of the assessee was selected for scrutiny for which valid notice u/s 148 and 142(1) of the Act were served on the assessee. During the course of assessment proceeding, assessee failed to appear as a result Ld. Assessing Officer (AO) passed best judgement assessment u/s 144 r.w.s 147 of the Act on 26.12.2018 making addition of Rs. 40,00,000/- in the investment of assessee. 5. Aggrieved assessee preferred appeal before Ld. CIT(A) claiming that the source of investment in immovable property is partially from sale of agricultural immovable property in which the assessee received Rs. 35,00,000/- in cash and remaining amount of Rs. 5,00,000/- was paid out of agricultural income. Assessee also filed additional evidence for which remand report was called for by Ld. CIT(A). However assessee failed to succeed 3 ITA No.2727/PUN/2024 as Ld. CIT(A) dismissed the appeal of the assessee observing as follows:- 6.2.2 I have considered the facts of the case, perused the assessment order, submissions of the appellant and remand report received from the A.O. On perusal of assessment order, it is noted that the case of the appellant was reopened u/s 148 of the Act on the basis of information that the appellant has purchased property of Rs. 40 lakh however no return of income was filed by the appellant. During the assessment proceedings, the A.O. issued multiple notices to the appellant however the appellant had not responded to any notices issued by the A.O. Thus, in the absence of any submission on the part of the appellant, the A.O. treated Rs.40 lakh in purchased property as unexplained investment u/s 69 of the Act and made addition of Rs. 40 lakh. During the appellate proceedings submission filed through online mode, the appellant stated that he had entered into agreement for selling his share in an immovable ancestral property for Rs. 40,00,000/- with Sh. Suresh Uttamrao Narval 05th January 2010 and received Rs. 20,00,000/- on 05th January 2010 and Rs. 15,00,000/-on 15th January 2010 as stipulated in the agreement. Further stated that he has entered in an agreement with Shri. Anant Damodar Rudrawar & Shri. Subhash Damodar Rudrawar for purchase of subject matter of immovable property for Rs. 40,00,000/- on 16th January 2010 and paid advance Rs. 35,00,000/- on 16th January 2010. The advance amount paid for purchase of property was out of the proceeds from agreement to sale of the ancestral property. The photocopy of Karar nama for the sale of ancestral property dt. 05th January 2010 and also furnished the copy of Karar nama of the purchase of property dated 16th January 2010. The appellant further stated that he had given Rs. 5 lakh out of his agricultural 4 ITA No.2727/PUN/2024 income and past accumulation to the seller. As these documents were not furnished at the time of assessment proceedings and now submitted as additional evidences, a remand report was sought in this case. The operative part of the remand report is reproduced as hereunder: .......it is found that assessee in his additional evidence he has submitted only \"Agreement to Sale\" which is not a legal evidence to transfer of title of immovable of property. Further, sale deed of the property has not been found in the additional evidence submitted by the assessee. Furthermore, assessee has not submitted bank account statement showing transaction regarding transfer of property. Hence, the contention of the assessee is not acceptable to the undersigned. Further, w.r.t. the addition of Rs.40,00,000/- the assessee has contended that the said amount was accumulated from the sale of agricultural land and from the agricultural income from which he purchased property. However, the assessee has failed to furnish any relevant documentary evidence against such claim. 6.2.3 I have perused the remand report submitted by the A.O. I am totally in agreement with the findings of the A.O. made in the remand report. The appellant failed to furnish the sale deed of the property stated to be sold ancestral property and only furnished agreement to sale in this regard, which is not a legal evidence for transfer of the immoveable property. Further, the appellant failed to furnish the essential evidences viz. copy of bank account statement showing transactions of properties (sold & purchased), evidences showing payment paid from past accumulated saving and agricultural income. In the absence of above evidences, the contention of the appellant cannot be 5 ITA No.2727/PUN/2024 accepted. Therefore, the order of the A.O. is hereby confirmed. Accordingly, the grounds of appeal are not allowed. 6. Aggrieved assessee is now in appeal before this Tribunal. Ld. DR vehemently argued supporting the finding of Ld. CIT(A). 7. We have heard Ld. DR and perused the record placed before us. The only issue is regarding the source of investment of Rs. 40,00,000/- for investment in immovable property by the assessee during the year. We note that the immovable property has been purchased by the assessee for consideration of Rs. 40,00,000/- vide purchase deed dated 30.03.2021. The assessee was asked by the AO to explain the source of the alleged investment. The assessee failed to reply to the A.O. but before the first appellant authority assessee furnished the details which have been examined by AO in the remand proceedings. As per these details the assessee has claimed to have sold the agricultural property to Shri Suresh Uttamrao Narval for a consideration of Rs. 40,00,000/- vide agreement for sale dated 05.01.2010 and had received part of the consideration of Rs. 20,00,000/- on 05.01.2020 and 15,00,000/- on 15.01.2020. Immediately thereafter on 16.01.2020, the assessee entered in an agreement with Shri Anant Damodar Rudrawar and Shri Subhash Damodar Rudrawar for purchase of immovable property at Majalgaon District Beed for a consideration of Rs. 40,00,000/- and paid advance of Rs. 35,00,000/- on 16.01.2010 and remaining amount of Rs. 5,00,000/- was paid in March, 2010 source of which was from agricultural income. 8. We further notice that the copy of Karar Nama for sale of agricultural property on 05.01.2010 and Karar Nama for 6 ITA No.2727/PUN/2024 purchase of property dated 16.01.2010 were duly furnished before the Ld. CIT(A) and also examined by the AO in the remand proceedings. Though the revenue authorities have not doubted the correctness of the karar nama for sale and purchase of the immovable property but have doubted the transaction for want of registered sale deed. We also observe that in spite of the fact that the impugned transaction is in cash mode and the source of making investment is also in cash received from sale of immovable property. Ld. CIT(A) has observed that the assessee has not filed any Bank Statement showing (transactions of property sold and purchased). It is also pertinent to note that Ld. CIT(A) has not carried out any inquiry from parties with whom the party has transacted for selling and purchasing the immovable properties. Under these given facts and circumstances, we deem it appropriate to remit the issue raised on merits to the file of Jurisdictional Assessing Officer (JAO) for carrying out de-novo assessment proceedings for examining the alleged transactions of sale of immovable property after duly verifying the correctness of copies of Karar Nama dated 05.01.2010 and also the Karar Nama dated 16.01.2010 for purchase of the property and also confirming the transactions from the parties appearing in both the above Karar Nama. Ld. AO is also directed to call for the land holding of the assessee and also the proof of earning agricultural income which is also partly claimed to be the source of investment in immovable property and then decide in accordance with law. Ld. JAO shall grant fair opportunity to the assessee. Assessee is also directed to remain vigilant and not to take unnecessary adjournment unless otherwise for reasonable cause. Effective grounds of appeal raised by the assessee are allowed for statistical purposes. 7 ITA No.2727/PUN/2024 9. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 30th day of April, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 30th April, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "