Dayawati , Gurgaon (Haryana) V. ITO,Ward-2(3),Grugram , Gurugram

ITA 1463/DEL/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1220 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 17-10-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 147; 68; 143(2); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No.1463/Del/2021 Assessment Year: 2011-12 Dayawati, C/o. Suraj Bhan Nain, Adv. House No.203, Sector-27, Gurugram PIN:122 002 Vs. ITO, Gurugram PAN :FEZPD6390Q (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 18.08.2021 passed by the National Faceless Appeals Centre (NFAC), Delhi for the assessment year 2011-12. 2. The only issue arising in the appeal as per the main grounds of appeal raised by assessee relates to addition of Rs.49,00,000 made under Section 68 of the Income-Tax Act, 1961. Appellant by Shri Suraj Bhan Nain, Adv. Respondent by Shri Om Parkash, Sr. DR Date of hearing 13.07.2022 Date of pronouncement 11.10.2022 2 ITA No.1463/Del./2021 3. Of course, assessee has raised an additional ground challenging the validity of the assessment order in absence of a notice issued under Section 143(2) of the Income-Tax Act, 1961. However, I will deal with the additional ground, if necessary, at a later point. 4. Briefly, the facts relating to the main ground are, assessee is a resident individual. From the facts on record, it appears, for the assessment year under dispute, assessee did not file any return of income voluntarily under Section 139(1) of the Act. Subsequently, the Assessing Officer received information from the Office of the Director of Income-Tax (I & CI), Chandigarh, indicating that assessee had purchased agricultural land in the year under consideration for a consideration of Rs.87,00,000. Based on such information, the Assessing Officer reopened the assessment under Section 147 of the Act. 4. In course of assessment proceedings, the Assessing Officer called upon the assessee to furnish the source of investment in purchase of agricultural land. In reply, assessee submitted that she made part of the investment out of sale consideration of rural lands sold by her and her husband. Further, she submitted, out of the balance 3 ITA No.1463/Del./2021 sales consideration of an amount of Rs.38,00,000 was paid through cheque and Rs.10,00,000 was received from her husband’s younger brother and Rs.5.6 lacs was contributed by her husband and Rs.8,00,000 from family income. The Assessing Officer, however, was not convinced with the submissions of the assessee in absence of supporting evidence. Accordingly, he treated the payment of Rs.49,00,000 made towards purchase of agricultural land otherwise than through cheque as unexplained cash credit under Section 68 of the Act and added back to the income of assessee. 5. Contesting such addition, assessee filed an appeal before the first appellate authority. However the addition was sustained. 6. Before me, learned counsel appearing for the assessee submitted, since, assessee has not maintained any books of accounts, no addition under Section 68 of the Act could have been made. Without prejudice, he submitted, not only in course of assessment proceedings but before the first appellate authority also, assessee had furnished enough evidence to prove the source of investment of Rs.49,00,000. He submitted, even in the remand report, the Assessing Officer has not found anything adverse in the evidences furnished by the assessee. 4 ITA No.1463/Del./2021 Therefore, he submitted, the source of investment having been established through proper evidence, no addition could have been made. 7. Learned Departmental Representative strongly relied upon the observation of the departmental authorities. 8. I have considered rival submissions and perused the material available on record. 9. Undisputedly, in the year under consideration, assessee had invested an amount of Rs.87,00,000 in purchase of agricultural land. While explaining the source of such investment, the assessee had submitted that an amount of Rs.38,00,000 was paid through cheque and the balance cash payment of Rs.49,00,000 was from funds received through sale of land, contribution made by husband’s brother, husband and family income. Apparently, while completing the assessment, Assessing Officer accepted the investment made through cheque amounting to Rs.38,00,000. Whereas, he did not accept the source of investment of the balance amount of Rs.49,00,000 paid in cash. 5 ITA No.1463/Del./2021 10. On perusal of remand report dated 15.05.2020 furnished by the Assessing Officer, a copy of which is placed at page 5 of the paper book, it is seen, Assessing Officer has observed as under: “2. Contention of the assessee : Kindly refer to the enclosed written submission of the assessee vide your office letter F.No.CIT(A)- 1/GGN/Admn./2019-20/2437 dated 15.01.2020, along with which a copy of the letter from the AR of the assessee dated 20.11.2019 was enclosed. The contention of the assessee is that the payment of Rs.87,00,000 was made through cheque Rs.38,00,000/- and the balance of Rs.49,00,000/- as cash on different dates to the seller. Further, the source of such cash paid have been claimed by the assessee viz.- • Rs.2800000- Received by her husband on sale of rural land. • Rs.300000 – Received from sale of rural land. • Rs.1000000- Rs.6 lac from Husband’s younger brother – Rs.5.6 lacs withdrawn from husband’s saving bank account. • Rs.800000 – Family income. 3. Hearing and Verification – The assessee was provided an opportunity vide this office letter No.ITO/W-1(4)/GGN/2019- 20/2100 dated 10.02.2020 wherein he was asked to furnish the following: 2. As per the chart provided by you in respect of source of investment under consideration, a payment amounting to Rs.28,00,000/- has been claimed to be made on 18.06.2010 from the amount of 6 ITA No.1463/Del./2021 Rs.28,30,000/-, received from the sale of a rural land by Sh. Surjeet Singh (assessee’s husband). But perusal of sale deed no. 790 dated 14.06.2010 reveals that Sh. Surjeet Singh was the owner of only 50% of the property. 3. Copy of receipts in respect of advance paid to the seller Sh. Mahendra S/o Sh. Parkash Chand have been produced by you now at the time of appellate proceedings. Since these receipts were supposed to be in your possession at all the time, why the same were not produced during the assessment proceedings. 4. Payments in respect of the investment under consideration have been claimed to be started from 15.03.2010 whereas the sale deed was executed on 21.02.2011 i.e. almost one year later. But no copy of any agreement in respect of the property under consideration is still furnished by you according to which the advance payments were being made to Sh. Mahendr (Seller). 5. Rs.10,00,000/- have been claimed to be received from Sh. Anup Singh Jakhar against an agreement to sell dated 15.03.2010. However, no signatures of Sh. Anup Singh Jhakar were found placed on the agreement. Also, the advance amount of Rs.10,00,000 is stated to be given as advance to Sh. Mahender on 16.03.2011 i.e. after the period of one year. Please file your response in this regard and also furnish the copy of sale deed, if any, executed against the said agreement. In case, the deal did not get matured due to any reason, please specify the date (with supporting documentary evidence) on which the advance was returned to Sh. Anop Singh Jakhar. 7 ITA No.1463/Del./2021 The reply of the assessee submitted on 14.02.2020 in respect of the above queries is placed on record. Assessee has also furnished the documents requisitioned vide the subsequent queries. The said reply and the documents submitted by the assessee during the remand proceedings have been gone through and found satisfactory. 4. Though the comments on the documents presented by the assessee during the appellate proceedings have been submitted in the above paras on the direction of your good office, but it is humbly requested not to admit any additional evidence at this stage as the assessee has already been given ample opportunities to furnish submission during the assessment proceedings and the assessee has not mentioned any sufficient cause that prevented him from proceeding the evidence which she was called upon to produce by the Assessing Officer at the time of assessment proceedings under consideration. Since none of the provisions of Rule 46A of the income Tax Rules, 1962 apply to assessee’s case, the appellant is now not entitled in produce, any additional evidence, whether oral or documentary, before your good self. It is, therefore, requested not to entertain the assessee’s application for consideration if any additional evidence.” 8 ITA No.1463/Del./2021 11. Thus from the aforesaid observations of the Assessing Officer, it is very much clear that on verifying the evidences furnished by assessee to explain the source of investments made in cash, the Assessing Officer has found them to be satisfactory. However, only because such evidences were not produced in course of assessment proceedings, the Assessing Officer has observed that such evidences should not be considered. Thus, in my view, is unacceptable. When the Assessing Officer, after due examination of the evidences furnished by the assessee, has found nothing adverse in them, rather, found them to be satisfactory, then, the source of investment having stood explained, should have been accepted. More difficult is to understand the reasoning of the first appellate authority in sustaining the addition by stating that in absence of corroborative evidence, assessee’s claim cannot be accepted. When, in the remand report, the Assessing Officer has recorded a categorical finding that evidences furnished by assessee explaining the source of investment made in cash is satisfactory, then, there is nothing more the assessee could have done to establish her claim. In view of the aforesaid, I do not find any reason to sustain the addition made by the Assessing Officer. 9 ITA No.1463/Del./2021 12. In view of my decision hereinabove, the additional ground having become academic, is not required to be adjudicated. 13. In the result, the appeal is allowed, as indicated above. Order pronounced in the open court on 11 th October, 2022. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 11 th October, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi