INCOME TAX OFFICER, WARD-6(2) JAIPUR, NCRB, JAIPUR V. SH. PANKAJ MEENA, JAIPUR

ITA 769/JPR/2023

AI Insights

The case involves an appeal by the Income Tax Officer against the decision of the CIT(A) which had deleted the addition made under section 56(2)(vii) concerning a property transaction involving Pankaj Meena, a partner in M/s Dreamline Colonizers and Developers. The property was allegedly purchased by the firm but registered in the name of Pankaj Meena. The CIT(A) found that the actual sale consideration was paid by the firm and not by Meena personally. The Tribunal agreed with the CIT(A)'s decision, noting that the property was effectively owned by the firm and not Meena individually. Additionally, the Tribunal remanded the issue of unexplained cash deposits back to the AO for a detailed examination, as the assessee failed to provide satisfactory explanations during the initial proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669291 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GORAV AVASTHI
• Assessee Lawyers: TARUN MITTAL
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Sale consideration of property below Jantri Value; Salary income; Gift; Principle of natural justice; Valuation report
• Section: 143(3); 142(1); 271(1)(c); 56; 56(2)(vii)(b); 56(2)

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 769/JP/2023 fu/kZkj.k o\"kZ@Assessment Year : 2016-17 Income Tax Officer, Ward-6(2), Jaipur, NCRB, Jaipur cuke Vs. Pankaj Meena C-108, J. P. Colony Imli Ka Phatak, Tonk Road 302015. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANRPM7777Q vihykFkhZ@Appellant izR;FkhZ@Respondent CO. No. 01/JPR/2024 (Arising out of ITA. No. 769/JPR/2023) fu/kZkj.k o\"kZ@Assessment Year : 2016-17 Pankaj Meena C-108, J. P. Colony Imli Ka Phatak, Tonk Road 302015. cuke Vs. Income Tax Officer, Ward-6(2), Jaipur, NCRB, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANRPM7777Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Tarun Mittal, CA jktLo dh vksj ls@ Revenue by : Sh. Gorav Avasthi, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 03/06/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 26/06/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM 2 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena The present appeal filed by the Revenue and Cross Objection to that appeal was filed by the assessee, which arises out of the order of the National Faceless Appeal Centre, Delhi [for short CIT(A) / NFAC] passed on 18.10.2023. The dispute relates to the assessment year 2016-17. Ld. CIT(A) passed that order because the assessee challenged the assessment order dated 24.12.2018 passed under section 143(3) of the Income Tax Act, 1961 [ for short “Act” ] by Income Tax Officer, Ward 6(2), Jaipur [ for short “AO” ]. 2. The appeal of the revenue and cross objection of the assessee were heard together and with the consent of the parties we considered it to dispose of by this consolidated order. 3. The grounds of the appeal filed by revenue are as under :- 1 On the facts and circumstances of the case and in law, the order of Ld. CIT (A) is contrary to the facts and also the law applicable to the facts of the case. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) is not correct in giving relief to the assessee and holding that the property pertaining to the firm in spite of the fact that the property was registered in the name of the assessee partner not the firm. 3. On the facts and circumstances of the case and in law, the Ld. CIT (A) erred in allowing the appeal of the assessee by holding that addition under section 56(2) of the Income-tax Act is not applicable in assessee's case as the property was purchased/payment was made prior to 01.04.2013 in spite of the fact that 3 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena the assessee has not made any agreement for purchasing the property prior to registration of this property. 4. The assessee has filed cross objection in CO No. 01/JPR/2024 against the revenue’s appeal, on the following grounds:- 1. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has grossly erred in confirming the action of ld. AO in making addition of Rs. 11,25,000/- u/s 68 of the Income Tax Act, 1961 on account of cash deposits made in bank account of assessee, arbitrarily. 2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal.” 5. Succinctly, the fact as culled out from the records is that the assessee has e-filed his return of income for assessment year 2016-17 on 29.3.2017 declaring total income of Rs. 12,55,000/-. The return was processed u/s 143(1)(a) of Income Tax Act, 1961. The case was selected for scrutiny and notice u/s 143(2) of Income Tax Act, 1961 was issued on 18.9.2017. Notice u/s 142(1) was issued to the assessee on 11.4.2018. Another notice u/s 142(1) was issued along with questionnaire on 10.7.2018. Show cause notice was issued on 28.10.2018. In response to these notices, the assessee filed reply online/of line to the notices issued to the assessee from time to time and he submitted necessary details and explanations on line/off line, which are placed on record. 4 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena 5.1 For the year under consideration the assessee has shown income from salary, business and income from other sources. During assessment proceedings the assessee was asked to furnish the source of cash deposit into his bank account and source of investment into the immovable property purchased through notice u/s 142(1) dated 11.4.2018 and 10.7.2018, but the assessee did not comply these notices, thereafter show cause notice was issued to the assessee on 28.10.2018 and served personally in the office of the assessee on 31.10.2018, In response the assessee furnished some details. 5.2 Ld. AO on perusal of the details noted that the assessee deposited cash of Rs. 11,25,200/- into his bank account. The assessee was requested to furnish source of the cash deposit into his bank vide notice dated 11.4.2018, 10.8.2018 and show cause notice dated 28.10.2018 but the assessee has not furnished any source of cash deposit. Ld. AO therefore considering the facts of the case made addition of Rs. 11,25,000/- to the total income of the assessee. 5.3 The assessee has made the investment in purchase of immovable property at Rs. 2,33,60,000/- plus transfer expenses. During assessment proceedings, the assessee was requested to furnish source of investment in property vide notice dated 11.4.2018 and 10.8.2018 and show cause 5 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena notice dated 28.10.2018. In response, the assessee submitted that your proposal vide show cause notice to make the addition of Rs. 2.33,60,000/- being the sale consideration determined by Sub Registrar for stamp duty purposes of the property situated at Delhi which was registered in the name of the assessee during the year under consideration. In this regard, at the outset, it is submitted that assessee is partner in M/s Dreamline Colonizers and Developers, who had purchased said property from M/s P. P Buildwell P. Ltd., for a total sum of Rs. 65 lacs way back in 2011 and thereafter making all the payments of the sale consideration through account payee's cheque, the possession was also taken. The actual sale consideration was paid by the firm and duly recorded in the regular books of accounts and is appearing in the Audited Balance Sheets. The copy of the balance sheet was also filed. Thus, assessee submitted that the ownership as well as possession of such property lies with M/s Dreamline Colonizers and Developers, a partnership firm. Ld. AO considered the reply but not found acceptable because, the assessee submitted that the assessee has not made payment of this property whereas the firm M/s Dreamline Colonizers and Developers has made payment of Rs. 65 lacs and by mistake the property has been registered in the name of the assessee because he is partner of this firm. In this regard it is stated that the payment may be made 6 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena by the firm when the partner purchases a property. In this case, the partner purchases the property, but the firm made advance payments for purchasing the property for the partner of the firm. This is evident from the registered sale deed registered on 4.3.2016. The payment of Rs. 65 lacs made by the firm but the assessee has not made any agreement for purchasing this property prior to registration of this property; therefore, the property has been transferred in the year under consideration, though the firm has made advance payment for the same. The assessee submitted that the firm has made payment and by mistake the name of the assessee mentioned in the registered document. In this regard, it is stated that the firm can made payment on behalf of the partner or it can gift the advance payment made by it to the seller as per section 56(2)(vii) of the Act. Ld. AO also noted that the assessee submitted that the firm has made payment and the transfer has been completed in 2011-12, then why the firm or the partner not registered this document before the year under consideration. Why do they wait for 4 years to register this document. The assessee has not furnished proper evidence which proves that the transfer has already been made before 2015-16. Considering those facts of the case, and reply furnished by the assessee it was not acceptable that the property has been transferred to the assessee or the firm before the year under consideration, 7 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena therefore, the assessee is liable to pay tax as per provisions of section 56(2) of the Income Tax Act, 1961. Calculation of addition u/s 56(2) is as under: Total DLC rate as per sale deed Rs 2,33,60,000/- Less: Sale consideration declared by the assessee Rs. 65.00.000/- Difference Rs 1,68,60,000/- Add: Registration Charges Rs. 14.01.600/- Total Rs. 1,82,61,600/- Finally, ld. AO determined the assessed income as under : Return income of the assessee Rs. 12,55,000/- Add: Addition as discussed above Rs. 11,25.000/- Add: Addition as discussed above Rs. 1,82.61.600/- Total income Rs. 2,06,41,600/- 6. Aggrieved from the assessment order of the ITO Ward 6(2), Jaipur the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 10. Though, the appeal is dismissed on account of non-prosecution by the appellant, the merits of the case has also been examined. 8 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena 11. In ground no. 1, the appellant has challenged the action of the AO in making the addition of Rs.11,25.000/- u/s 68 of the Act on account of unexplained cash deposits in the bank account. During the year under consideration, the appellant has made deposit cash of Rs 11,25,200/- into his bank account. The appellant was requested to furnish source of the cash deposit into his bank. However, the appellant failed to explain the sources of cash deposit and hence, the AO made the addition of Rs.11.25,200/-on account unexplained cash deposit in his bank account. During the course of Appellate proceedings, adequate opportunities were given to submit the reply with supporting evidences in relation to the grounds of appeal raised in Form No.35. However, the appellant failed to comply with all the aforesaid notices and also failed to avail the opportunities given to substantiate his claim in the grounds of appeal with supporting documentary evidences. The Appellant has not provided explanation regarding the source of cash deposit in his bank account either in the assessment proceedings or in the appellate proceedings. In the absence of any documentary evidence, the source of cash deposit in his bank account remained unexplained. Therefore, the action of the AO cannot be faulted with. Accordingly, ground no 1 is dismissed. 12. Ground Nos. 2 to 2.3 are against the addition of Rs 1,82,61,600/-, The AO found that the appellant has purchased immovable property at Rs.2.33,60,000/-. The appellant was asked to furnish the source of investment in property. During assessment proceedings, the appellant has contended that the appellant is partner of M/s Dreamline Colonizers and Developers, who had purchased said property from M/s P. P. Buildwell P. Ltd., for a total sum of Rs.65 lacs way back in 2011 and after making all the payments of the sale consideration through payee's account cheque, the possession was also taken. The actual sale consideration was paid by the firm and duly recorded in the regular books of accounts and is appearing in the Audited Balance Sheets. Thus, ownership as well as possession of such property lies with M/s Dreamline Colonizers and Developers. However, the AO has not satisfied with the submission of the appellant and made the addition of Rs. 1,82,61,600/- by holding as under- 1. The assessee submitted that the assessee has not made payment of this property whereas the firm M/s Dreamline Colonizers and Developers has made payment of Rs.65 lacs and by mistake the property has been registered in the name of the assessee because he is partner of this firm. In this regard it is stated that the payment may be made by the firm when the partner purchase a property. In this case, the partner purchases the property but the firm made advance 9 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena payments for purchasing the property for the partner of the firm. This is evident from the registered sale deed registered on 4.3.2016. 2. The payment of Rs.65 lacs made by the firm but the assessee has not made any agreement for purchasing this property prior to registration of this property, therefore, the property has been transferred in the year under consideration, though the firm has made advance payment for the same. 3. The assessee submitted that the firm has made payment and by mistake the name of the assessee mentioned in the registered document. In this regard, it is stated that the firm can made payment on behalf of the partner or it can gifted the advance payment made by it to the seller as per section 56(2)(vil) of the Income Tax Act. 1961. The assessee submitted that the firm has made payment and the transfer has been completed in 2011-12, then why the firm or the partner not registered this document before the year under consideration. Why they wait for 4 years to register this document. The assessee has not furnished proper evidences which prove that the transfer has already been made before 2015-16. 4. Considering the facts of the case, and reply furnished by the assessee it is not acceptable the property has been transferred to the assessee or the firm before the year under consideration, therefore, the assessee is liable to pay tax as per provisions of section 56(2) of the Income Tax Act, 1961. Calculation of addition u/s 56(2) is as under: Total DLC rate as per sale deed Rs.2,33,60,000/- Less: Sale consideration declared by the assessee Rs. 65,00,000/- Difference Rs.1,68,60,000/- Add: Registration Charges Rs. 14,01,600/- Total Rs. 1,82,61,600/- As the assessee has concealed income of Rs. 1,82,61,600/-, therefore, penalty proceeding u/s 271(1)(c) is initiated separately. The appellant has contended in his ground of appeal that the AO ignored the submissions made and evidences adduced by assessee which proved it beyond doubt that property was purchased by the firm in which assessee was partner and was being used as well by the firm since inception: The subject property was 10 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena purchased prior to 01.04.2013 and the payments thereof were also made through payee a/c cheque prior to 01.04.2013, thus the provision of section 56(2) were not applicable in the case of assessee and thus additions made by Id. AO deserves to be deleted. The addition of Rs. 14,01,600/- paid towards registration charges u/s 56(2) in arbitrary manner. I have gone through the assessment order and submission of the appellant. It is seen from the assessment order, the appellant has contended that the property was purchased by the firm and the actual sale consideration was paid by the firm and duly recorded in the regular books of accounts and is appearing in the Audited Balance Sheets. This facts has not been controverted by the AO in the assessment order. This clearly shows that the property was infact purchased by the firm and not the partner. Whatever, the action could have been taken, the same could have taken in the case of the firm and not the partner i.e. the appellant. Therefore, the action of the AO in invoking the provisions of section 56(2)(vii)(b) of the Act in respect of the property purchase by the firm, in the hands of the partner i.e. appellant cannot be sustained. However, the AO is directed to examine the possibility of reopening the case of the firm and take appropriate action in the case of the firm. Accordingly ground nos.2 to 2.3 are allowed.” 7. Aggrieved with that order of the ld. CIT(A), revenue preferred the present appeal and since the appeal of the assessee was considered in part the assessee has also preferred the cross objection. 8. Before us at the time of hearing both the parties relied upon the orders of the lower authority as favourable to them. 9. Ld. DR is heard as regards the cross objection filed by the assessee, ld. DR relied upon the finding recorded in the order of the ld. CIT(A) vide para 11. As regards the ground raised in the appeal of the revenue ld. DR 11 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena submitted that before the ld. CIT(A) the assessee did not present and the appeal on that count was dismissed on account of non-prosecution. Having done so ld. CIT(A) should not have decided the appeal of the assessee on merits of the case. Ld. DR referring to page 31 of the paper book submitted that the document was in the name of the assessee and therefore, the addition was rightly made in the name of the assessee by the ld. AO. As the assessee is partner in the firm it will not make the difference as he being a partner of the firm can withdraw the money from his capital account. Ld. DR also submitted that even the possession of the property was taken over by the assessee. Based on these argument he relied upon the finding recorded in the order of the assessment. 10. On the other hand ld. Authorized Representative appearing on behalf of the assessee, apropos to the appeal of the revenue and cross objection of the assessee, has relied upon the following written submission:- Brief facts of the case are that the assessee is an individual and is partner in M/s Dreamline Colonisers and Developers. Return of income for the year under consideration was filed on 29.3.2017 declaring total income of Rs. 12,55,000/- (APB 1-4) from salary, business and income from other sources. The case was selected for scrutiny assessment. Details and information as sought by ld.AO were filed by assessee from time to time and assessment was completed after making following additions: 12 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena - Addition on account Cash Deposits in bank account Rs.11,25,000/- - Addition u/s 56(2)(vii) Rs.1,82,61,600/- Aggrieved of the additions so made, assessee preferred appeal before ld.CIT(A). Ld.CIT(A), vide order dated 18.10.2023, deleted the addition of Rs.1,82,61,600/- made by ld.AO u/s 56(2)(vii), however addition of Rs.11,25,000/- made on account of cash deposits was confirmed. Therefore, department has preferred appeal before hon’ble bench against relied granted by ld.CIT(A), whereas assessee has filed Cross Objections in respect of addition confirmed by ld.CIT(A). With this background, detailed submission on grounds of appeal raised by the department is made as under: Grounds of Appeal No. 1 to 3 In these grounds of appeal, department has challenged the action of ld.CIT(A) in deleting addition of Rs.1,82,61,600/- made by ld.AO u/s 56(2)(vii) of the Income Tax Act. Brief facts pertaining to the grounds of appeal are that M/s Dreamline Colonisers and Developers had purchased a property located at Westend Mall, Janakpuri from M/s P.P. Buildwell (P) Ltd. for a total sum of Rs.65 lacs way back in 2011 and after making all the payments of the sale consideration through payee’s a/c cheque (APB 13-19), the possession was also taken, which is evident from Copy of Possession Letter issued by the seller (WS Page 08). The actual sale consideration was paid by the firm and duly recorded in the regular books of accounts and is appearing in the Audited Balance Sheets, (APB 9-12). Thus, ownership as well as possession of such property lied with M/s Dreamline Colonizers & developers since 2011. It is submitted that such property was sold through a verbal agreement for the main reason that entire payment was made through banking channels. In the year under consideration, i.e. in F.Y. 2015-16, for the purpose of getting property registered, assessee, being partner of M/s Dreamline Colonizers & developers approached a deed writer, who asked for various details including PAN of firm, in whose name property was to be registered as well as PAN of partner signing the deed. However, due to some misunderstanding, name of M/s Dreamline Colonizers & developers was omitted to be mentioned as purchasing party and instead name of signing partner, i.e. assessee was mentioned as buyer without specifying that assessee had signed such deed in the capacity of partner. Thus, the name of assessee as purchaser was mentioned in the registered sale deed solely due to inadvertent mistake on the part of deed writer, which is evident from the chronological events as well as 13 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena documentary evidences in the name of M/s Dreamline Colonizers & developers, i.e. (i) Copy of Possession Letter dated 20.12.2011 issued by the Builder M/s P.P. Buildwell (P) Ltd. (WS Page 08) (ii) Electricity bills of the subject property in the name of partnership firm, which are of the date much prior to the date of registration (APB 23-26) (iii) Copy of Bank statement of the firm having address of the said premises at Delhi since 2011 (iv) Entire consideration as mentioned in Registered Sale Deed has been paid by Dreamline Colonizers and Developers (copy of bank statements at APB 13-19) (v) Fact of booking made in the year 2011, payment through banking channel in the year 2011 and handing over the possession also in the year 2011 are duly evident from the registered sale deed itself.(APB 27-46) (vi) Balance Sheet of Dreamline Colonisers wherein subject property was shown under Fixed Assets (APB 9-12) Thus, all these facts and documents clearly indicate the intention of parties that property belongs to firm and the ownership as well as possession of same remained with the firm since beginning. As stated above, it is reiterated that omission in registered sale deed of the fact that assessee had signed in the capacity of partner and not in his individual capacity was purely an inadvertent mistake on the part of deed writer, which was beyond the control of assessee as assessee had just relied upon the professional assistance. It is thus clear that the actual investment of Rs.65,00,000/- in the said property was made by firm, source of which is duly disclosed by the firm who is the owner of said property. However, ld.AO without appreciating all the factual and circumstantial evidences, and solely relying upon the inadvertent mistake in sale deed, presumed that Payment of Rs.65 lacs was made by firm on behalf of assessee and thus treated the same as “Gift” in terms of section 56(2)(vii). In this regard, it is submitted that it has been rightly observed by ld.CIT(A) that since the subject property was purchased prior to 01.04.2013 and the payments thereof were also made through payee a/c cheque prior to 01.04.2013, thus the provision of section 56(2) were not applicable in the case of assessee. Kind attention of your honours is invited to provisions of section 56(2)(vii) (b)(ii) as they existed in F.Y. 2011-12, which read as under: 14 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena Income from other sources. 64 56.(1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head \"Income from other sources\", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub- section (1), the following incomes, shall be chargeable to income-tax under the head \"Income from other sources\", namely :— ………. ( vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,— …….. ( b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;] Subsequently, Finance Act 2013 inserted sub clause (ii) to section 56(2)(vii)(b), which reads as under: Sub clause(ii): (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Thus, if at all, for arguments’s sake, contention of AO is treated as correct, then too it is only after insertion of sub clause (ii) to section 56(2)(vii) , the captioned transaction could be treated as “Gift”. Whereas, in the year 2011, when M/s Dreamline Colonisers and developers actually purchased the property, only transactions in immovable property without consideration were covered within the purview of section 56 (2)(vii). It is submitted that above sub clause (ii) was inserted by Finance Act 2013 w.e.f.1.4.2014 and is thus applicable for A.Y. 2014-15 and onwards. It is a trite law that any amendment which affects rights of taxpayer substantively or creates additional tax liability upon assessee, can be applied prospectively. It is thus submitted that addition has bene rightly deleted by ld. CIT(A). Ld. AO has further presumed that since no agreement was entered into for 4 years, i.e. till the year of registration, it implies that property was sold in the year under consideration: In this regard, it is submitted that property was purchased by firm through verbal agreement. Moreover, law does not mandate anywhere that a property be registered within a specific time span. So far as both the parties to the transaction perform their part without any dispute, even a verbal 15 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena agreement constitutes a valid evidence. In the present case, even payments have been made by cheque in F.Y. 2011-12, which are duly appearing in Registered Sale Deed. Thus, by no stretch of imagination it can be treated as taken place in the year under consideration. With regard to the application of provisions 56(2)(vii)(b) of the Income Tax Act, 1961, as submitted above, it is reiterated that the property was acquired by Dreamline Colonisers in 2011 by payment through account payee cheque assessment and was being used by firm throughout. It is submitted that property was not transferred to assessee and therefore there is no question of “Gift” being received by assessee. Further, only registration of sale transaction has only taken place during the year, wherein inadvertently, name of assessee has been mentioned as purchaser. It is therefore submitted that ld. CIT(A) has rightly deleted the said addition. Without prejudice to above, it is submitted that as the property was purchased by firm in 2011 and payment for which was made through cheque, stamp duty value for the purposes of section 56(2)(vii)(b) should be taken as “stamp duty value on the date of agreement” in view of first proviso to section 56(2)(vii)(b) of the Act, which is reproduced below for the sake of convenience and ready reference: “56(2) In particular, and without prejudice to the generality of the provisions of sub- section (1), the following incomes, shall be chargeable to income-tax under the head \"Income from other sources\", namely :— (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,— (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; 8[(b) any immovable property,— (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub- clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other 16 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena than cash on or before the date of the agreement for the transfer of such immovable property;” Accordingly, as per the aforesaid provisions, DLC Value determined by the revenue authorities in the year 2011 should be referred. For the purpose, the copy of Notification No. F1(281)/Regn. Br./Div.Com,/09/45 dated 04.02.2011 issued by Revenue Department, (APB 20-22) was furnished by assessee before ld.AO, according to which DLC rate for the property purchased is as under: Land rate per Sq. Mtr. : Rs. 43,600/-(Category D- Residential use) Land rate for Commercial Plot : 43600*3 = Rs. 1,38,900/- Total Area of Commercial Plot : 5507.25 Sq. Mtr. Total Plinth Area : 15000 Sq. Mtr. Super area under Sale : 157.47 Sq. Mtrs. (1695 Sq. ft) Covered Area under Sale : 94.48 Sq. Mtrs.(1017 Sq. ft.) Land Use : Commercial Number of Floors : Twelve Floors Minimum Cost of Property : 157.47/ 15000*5507.25 *43600*3 = Rs. 75,62,216/- Minimum Cost of Construction : 94.48*7600 = Rs.7,18,048/- Minimum Value of property : Rs.75,62,216/- + 7,18,048/ = Rs.82,77,264/- In view of above, it is submitted that if at all it is presumed that assessee has received property without adequate consideration in the year 2011, Stamp Duty Value thereof for the purposes of section 56(2)(vii)(b) shall be taken at Rs.82,77,264/- and not Rs.2,33,58,624/-. DLC rate computed above is further supported by Valuation report (APB 47-51) furnished by assessee, according to which also DLC rate comes to Rs. 82.80 lakhs, it is thus submitted that even if for argument’s sake it is presumed that the property was purchased by assessee (though all the evidences including Electricity bill, possession clearly prove that property was purchased by Firm), then too DLC value of 2011 as stated above need to be considered for the purpose of section 56(2)(vii)(b). Ground of Cross Objections: In this ground of cross Objection, assessee has challenged the addition of Rs.11,25,000/- made by ld.AO on account of Cash deposits, for which no detailed submission could be made before ld.AO and it is therefore requested 17 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena that the issue may be set aside to the ld.AO so that necessary documentary evidences could be made.” 11. The ld. AR of the assessee also filed on a detailed paper book in support of the contention so raised in the written submission and the index of the document submitted reads as under :- S. No. PARTICULARS PAGE NOS. 1. Copy of Return of Income along with Computation of Income filed u/s 139(1) of the Act. 01- 04 2. Copy of Reply dated 07.11.2018 filed against notice issued u/s 142(1) dated 10.07.2018, along with following enclosures: 05 - 08 3. Copy of Balance Sheet of M/s Dreamline Colonizers and Developers for FY 2011- 12 & 2012-13 09 - 12 4. Copy of Bank Statement of M/s Dreamline Colonizers and Developers for FY 2011- 12 13 - 19 5. Copy of Circular No. F.1(281)/Regn-Br./HQ/Div.Com./09/45 notifying the minimum rates (circle rates) for valuation of lands and immovable properties in Delhi. 20 - 22 6. Copy of Electricity Bills in name of M/s Dreamline Colonizers and Developers 23 - 26 7. Copy of Sale Deed of the Property 27 - 46 8. Copy of Valuation Report 47 - 51 12. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the firm has booked the property in 2011 and had paid Rs. 65 lac from the bank account of the firm. Details of the payment made by the firm appear at page 32 of the paper 18 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena book. This fact of having made the payment in 2011 has not been denied or disputed by the revenue. Even the ld. AO did not dispute the same in the assessment proceeding. The balance sheet of the firm as at 31.03.2012 shows this payment as advance for purchase of office is reflected in the balance sheet of the firm [ page 9 and 10 of paper book filed]. This fact has also not been disputed by the revenue. The deed was done inadvertently in the name of the firm and the correction deed executed was placed on record. The ld. AR of the assessee also submitted that the firm pays dues such as electricity and are in the name of the firm i.e. Dreamline Colonisers & Developers [ paper book page 23 to 26 having different period ]. Therefore, the addition has rightly been deleted by the ld. CIT(A). He alternatively argued that even if the addition is required to be made the same is required to be made in the year of purchase not in the year under consideration. As regards the ground taken in the cross objection the ld. AR of the assessee submitted that the assessee could not prove the cash deposit as to the source being agricultural activity receipt and since the relevant records if considered by the ld. AO which was not produced then even that cash deposit can be explained. Considering that aspect of the matter ld. AR of the assessee submitted that the issue be set a side to the file of the ld. AO to verify the source of cash deposit made by the assessee. 19 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena 13. We have heard the rival contentions and perused the material placed on record. In the present appeal though the revenue has taken three different grounds of appeal, but they all are relates to the deletion of addition under section 56(2) of the Act contending that the property purchased and payment was made prior to 01.04.2013 in spite of the fact that the assessee has not made any agreement for purchasing the property prior to the registration of property and the property was not in the name of the firm. The brief facts of the case is that the assessee has made the investment in purchase of immovable property at Rs. 2,33,60,000/- plus transfer expenses. The assessee in response to the show cause submitted that assessee is partner in M/s Dreamline Colonizers and Developers, who had purchased said property from M/s P. P. Buildwell P. Ltd., for a total sum of Rs. 65 lacs way back in 2011 and thereafter making all the payments of the sale consideration through account payee's cheque [ page 32 of the paper book], the possession was also taken by the firm [ Electricity charge August 2012, May 2013, September 2013 in support placed on record at page 23 to 26 to prove that the property was in the name of the firm]. The bench also noted that the details of the property is the same as to which the dispute is. Merely that firm has not made any agreement while giving the 20 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena payment and taking the possession does not hold the property which is reflected in the books of the firm become the property of the assessee. In support of this fact the assessee placed on record the balance sheet of the firm dated 31.03.2012 at page 9 & 10 where the advances made are duly reflected. This fact has not been disputed by the revenue. Thus, when the actual sale consideration was paid for by the firm and duly recorded in the regular books of accounts and is appearing in the Audited Balance Sheets of M/s Dreamline Colonizers and Developers, a partnership firm the same cannot be considered as merely there was an error while making the deed which even the assessee has corrected and made in the name of the firm. Thus, it is proved by the assessee that the actual investment of Rs.65,00,000/- in the said property was made by firm, source of which is duly disclosed by the firm who is the owner of said property. However, ld.AO without appreciating all the factual and circumstantial evidence, and solely relying upon the inadvertent mistake in sale deed, presumed that Payment of Rs.65 lacs was made by firm on behalf of assessee and thus treated the same as “Gift” in terms of section 56(2)(vii). The other circumstantial evidence already on record suggest that the property was in the name of the firm and not in the name of the assessee the addition u/s. 56(2) in the hands of the assessee is not correct and has rightly been 21 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena directed to be deleted by the ld. CIT(A). Therefore, we see no reason to deviate from the detailed findings recorded by the ld. CIT(A) and therefore, the appeal filed by the revenue stands dismissed. 14. Now coming to the cross objection filed by the assessee where in the assessee contended that the ld. CIT(A) erred on facts & in law while confirming the action of the ld. AO in making addition of Rs. 11,25,000/- u/s 68 of the Income Tax Act, 1961 on account of cash deposits made in bank account of assessee, arbitrarily. 14.1 On this aspect the ld. AR of the assessee submitted that before the ld. CIT(A) he did not get an opportunity to submit the details of the source of cash deposited into the bank account as the said cash was sourced from the agricultural activities carried out by the assessee and in the interest of principles of natural justice he prayed that the matter be remanded back to the file of the ld. AO. 14.2 On the other hand ld. DR relied upon the orders of the lower authority stating that the assessee was given sufficient opportunity to but the assessee failed to submit the details of source of cash deposit and therefore, there is no need to remit the cash back to the file of the ld. AO. 22 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena 14.3 We have heard the rival contentions and perused the material placed on record. The bench noted that in the cash the assessee has deposited cash of Rs. 11,25,200/- in his bank account. In the assessment proceeding the ld. AO issued three notices but the assessee did not submit the details of source of cash deposit. When the matter carried before the ld. CIT(A) the assessee did not appear and the ld. CIT(A) decided the appeal of the assessee based on the material available on record and thereby the bench noted that the assessee could not placed on record the details of the cash deposited into the bank account and the source thereof. Therefore, we are of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Thus, the bench noted that considering the overall facts of the case the assessee be given a chance to represent their case before the ld. AO as the order passed in both proceedings are ex- parte on this issue. Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter and decide the issue after providing sufficient opportunity to the assessee and decided the issue in accordance with the law. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO. 23 ITA No. 769/JP/2023 & CO No. 01/JP/2024 Sh. Pankaj Meena Based on this observation cross objection of the assessee is allowed for statistical purposes. In the result, the Cross objection of the assessee is allowed for statistical purpose and the appeal of the Revenue stands dismissed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the noticeboard. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 26/06/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- ITO, Ward 6(2), Jaipur 2. izR;FkhZ@ The Respondent- Sh. Pankaj Meena, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 769/JP/2023 & CO No. 01/JP/2024) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar "