Gautam Bajoria, Pune V. Tax Recovery Officer,

ITA 1057/PUN/2016

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1696 (ITAT-PUNE)
• Duration Of Justice: 6 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure
• Section: 147; 69; 148; 132; 143(3); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1057/PUN/2016 िनधाᭅरण वषᭅ / Assessment Year: 2007-08 Gautam Bajoria, Marvel Viva City, 4 th Floor, ‘A’ Building, Lane No.1, Kalyani Nagar, Pune- 411006. PAN : AECPB7120A Vs. Tax Recovery Officer, Range-2, Pune. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 5, Pune [‘CIT(A)’ for short] dated 17.03.2016 for the assessment year 2007-08. 2. The appellant raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer have erred in reopening the assessment u/s 147 of the Income Tax Act, 1961 on the basis of search action u/s 132 of the Income Tax Act, 1961 in the case of Assessee by : Shri Pramod S. Shingte Revenue by : Shri S. P. Walimbe Date of hearing : 17.05.2022 Date of pronouncement : 20.05.2022 ITA No.1057/PUN/2016 2 “Marvel Group”. Under such situation, Learned Assessing Officer ought to have preceded u/s 153C of the Income Tax Act, 1961, the action of reopening the assessment u/s 147 is thus, bad in law and deserves to be struck down. 2. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer have erred in reopening the assessment u/s 147 of the Income Tax Act, 1961 by disregarding appellant objection in which it was categorically pointed out that presumption of alleged escapement of income does not exist when it was clarified that there was no transaction of the appellant with the said “Marvel Group”, in the impugned year. Without prejudice to the above grounds, your appellants intends to raise following grounds on merit. 3. On the facts and in the circumstances of case and in law, the Learned Assessing Officer erred in making an addition of Rs. 10,00,000/-, u/s 69 of Income Tax Act, as unexplained investment merely on basis of eternal evidence and by disregarding the appellant’s submission in this regard. 4. On the facts and in circumstances of case and in law, the Learned Assessing Officer erred in changing the interest u/s 234 B of Income Tax Act, without considering the fact that appellant could not have apprehended the liability to pay tax at time of payment of advance tax. The appellant craves for to leave, add, alter, modify, delete above ground of appeal before or at the time hearing, in the interest of natural justice.” 3. Briefly, the facts of the case are that the appellant is an individual engaged in the business of deals and sales of securities. Originally, the return of income for the assessment year 2007-08 was filed on 30.10.2007 declaring total income of Rs.14,67,245/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 22.12.2009 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of ITA No.1057/PUN/2016 3 Rs.48,38,710/-. Subsequently, on receipt of the information from the Investigation Wing of the Department that the appellant had paid on-money consideration of Rs.10,00,000/- in cash on 11.05.2006 to Marvel Group at the time of booking of flat, the Assessing Officer formed an opinion that the income had escaped assessment to tax and, accordingly, issued a notice u/s 148 on 19.03.2012. In response, it was submitted that the original return of income filed be treated as return of income in response to notice u/s 148 of the Act. Against the said return of income, the assessment was completed by the Tax Recovery Officer, Range-2, Pune (‘the Assessing Officer’) vide order dated 25.03.2013 passed u/s 143(3) r.w.s. 147 of the Act after making an addition of Rs.10,00,000/- on account of alleged payment of on-money consideration to Marvel Group at the time of booking of Flat No.701 on 11.05.2006. Briefly, the factual matrix of this case are as follows : There was search and seizure operations under the provisions of section 132 of the Act in the case of Marvel Group on 22.05.2008. During the course of search and seizure operations, certain documents were seized and impounded, which according to the Assessing Officer ITA No.1057/PUN/2016 4 revealed that the appellant had paid a sum of Rs.10,00,000/- in cash on 11.05.2006 at the time of booking of a flat in the name of wife of the appellant, namely, Mrs. Vidisha Bajoria. Copy of the seized documents were also submitted to the appellant who, in turn, had denied having paid any on-money consideration in cash to the Marvel Group by stating that he had booked a flat only on 29.09.2010 and the consideration for the purchase of the flat was paid by Cheque. However, the Assessing Officer was of the opinion that the consideration was paid in cash on 11.05.2006 to Marvel Group at the time of booking of flat in the name of wife of the appellant, Mrs. Vidisha Bajoria. 4. Being aggrieved by the above action of the Assessing Officer, an appeal was preferred before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer. 5. Being aggrieved by the decision of the ld. CIT(A), the appellant is in appeal before us with the above extracted grounds of appeal. 6. Ground of appeal no.1 and 2 challenges the validity of the jurisdiction u/s 147 of the Act. By stating that the impugned assessment order was passed on the incriminating material found ITA No.1057/PUN/2016 5 during the course of search of a third party, therefore, the jurisdiction to assess the escaped income can only be u/s 153C not u/s 147 of the Act. 7. Having heard the ld. Counsels of both the parties at length, it is suffice to hold that the appellant had not proved the existence of conditions precedent for exercise of jurisdiction u/s 153C of the Act. Therefore, the question of jurisdiction to assess the escaped income under the provisions of section 153C does not arise. Therefore, we hold that the Assessing Officer was justified in initiating the re-assessment proceedings u/s 147 of the Act. Thus, the ground of appeal no.1 and 2 stands dismissed. 8. Ground of appeal no.3 challenges the action of the lower authorities in bringing to tax a sum of Rs.10,00,000/- as unexplained investments in the form of on-money consideration to Marvel Group at the time of booking of a flat in the name of wife of the appellant, Mrs. Vidisha Bajoria. 9. We have carefully gone through the assessment order. The case of the Assessing Officer is that the appellant had paid on- money consideration at the time of booking of a flat in the name of wife of the appellant, Mrs. Vidisha Bajoria to Marvel Group. It is ITA No.1057/PUN/2016 6 undisputed position that the flat was booked in the name of wife of the appellant and also sale deed was executed only in the name of wife of the appellant, Mrs. Vidisha Bajoria. Without going into the sufficiency or otherwise of the evidence indicating the payment of on-money consideration, we are of the considered opinion that even assuming for a moment that such on-money consideration was paid to Marvel Group, the addition, if any, is warranted only in the hands of the wife of the appellant not in the hands of the appellant- assessee. Therefore, we hold that the addition of Rs.10,00,000/- made on account of unexplained investments for payment of on- money consideration at the time of booking of a flat is not warranted. Accordingly, we direct the Assessing Officer to delete the same. Thus, ground of appeal no.3 stands allowed. 10. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 20 th day of May, 2022. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 20 th May, 2022. Sujeet ITA No.1057/PUN/2016 7 आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-5, Pune. 4. The Pr. CIT-4, Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.