Sunil Bajaj Infrastructure Builders Pvt. Ltd., Ahmedabad V. The ITO, Ward-2(1)(3), Vadodara

ITA 149/AHD/2022

AI Insights

The case involves Sunil Bajaj Infrastructure Builders Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre, Delhi. The appeal was directed against the reassessment order for the Assessment Year 2012-13, where an addition of Rs. 12,00,000 was made as unexplained investment under Section 69B of the Income Tax Act, 1961. The Assessing Officer had reopened the assessment based on the grounds that the full value of the property purchased was not disclosed in the books of accounts. The Tribunal dismissed the legality of the reopening but allowed the appeal on merits, finding that the addition was not justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129019 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 28-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 08-05-2022
• Other Referred Cases: CIT vs. Shitalben Saurabh Vora
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 68; 69; 148; 142(1); 143(1); 69B; 250; 143(2)

Judgement Text

ITA No. 149/Ahd/2022 Sunil Bajaj Infrastructure Builders Pvt Ltd Vs. ITO Assessment Years: 2012-13 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD \ BEFORE Ms. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 149/Ahd/2022 Assessment Year: 2012-13 Sunil Bajaj Infrastructure Builders Pvt. Ltd., 28, Radhaswamy Society, Varasiya Ring Road, Vadodara-390006 PAN : AALCS 6532 R Vs Income Tax Officer, Ward-2(1)(3), Vadodara अपीलाथ / (Appellant) यथ / (Respondent) Assessee by : Shri Kinjal V. Shah, CA Revenue by : Shri Yogesh Mishra, Sr. DR सुनवाई की तारीख/Da te of Hear ing : 29/ 08/2 023 घोषणा की तारीख /Date of Pro noun ce men t : 13/1 0/20 23 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "CIT(A)" for short] dated 30.03.2022 passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short] for the Assessment Year (AY) 2012-13. 2. The grounds raised by the assessee in its appeal read as under:- “On Legality: 1. Your Appellant submits that notice u/s.148 of the Act issued dt.27-3-2019 is bad in Law and Void and time barred and it does not entitle the A.O. to reopen the assessment since he has failed to take adequate permission/ sanction of Authorities as per provisions of Law. Further it is submitted that no Income has escaped assessment or under assessed and therefore Reassessment is not valid. 2. It is further submitted that the Assessing Officer has not Supplied copy of Reasons Recorded for Reopening the Assessment which is mandatory on his part and not supplying the same makes Asst. Order bad-in-Law and Void. ITA No. 149/Ahd/2022 Sunil Bajaj Infrastructure Builders Pvt Ltd Vs. ITO Assessment Years: 2012-13 Page 2 of 5 On Merits: 1. Your Appellant is a Limited Company maintaining regular and proper books of account which are duly Audited and also subjected to Tax Audit and that during course of audit the independent Auditor has not found any lacuna or has made any detrimental observation and not found anything wrong with books of accounts and other relevant documents with regard to payment of Rs.12 Lakhs for purchase of Land. 2. Your Appellant submits that on facts of the case and provisions of Law Sec.69B does not apply since your Appellant has not made any investment or payment which is not fully disclosed in books of accounts and that during course of assessment proceedings as well as before Ld. CIT(A) your Appellant had wholly and fully explained the source of payment with supporting evidence Rs. 12 Lakhs in two equal installments of Rs. 6 Lakhs each. 3. It is further submitted that the payment of Rs. 12 Lakhs was made out of known and established source through banking channel duly supported by Bank Statement and the CIT(A) has erred in not accepting the cogent evidence placed before him and hence addition be deleted. 4. Without Prejudice and in the Alternative if Rs. 12 lakhs is liable to be added as arising from Estate Business of your Appellant then only Net Profit of Business be added as held by various authorities and High Courts.” 3. The assessee is engaged in the business of Real Estate. The assessee filed original return of income for A.Y. 2012-13 on 31.03.2014 declaring total income at Rs. Nil. The return of income was processed u/s 143(1) of the Act. After getting proper approval from the competent authority, the case of the assessee was re-opened by issuing notice u/s 148 of the Income Tax Act, 1961 on 27.03.2019. Subsequently, notice u/s 142(1) of the Act was issued on various dates i.e., 22.06.2019, 09.09.2019, 15.10.2019 and 02.12.2019. However, the assessee did not furnish the details. In response to the notice issued u/s 148 of the Act, the assessee filed return of income on 16.11.2019. Accordingly, notice u/s 143(2) of the Act was issued on 04.12.2019 and served upon the assessee. The reasons were also provided to the assessee. The Assessing Officer observed that the assessee company purchased an immovable property name R.G. Chambers at a consideration price of Rs. 25,00,000/- vide banakhat dated 08.10.2008 which was subsequently registered with Sub-Registrar office vide conveyance deed dated 05.06.2009. The Assessing Officer observed that the conveyance deed mentions that out of the total payment of Rs.25,00,000/-, the payment of Rs. 6,00,000/- was to be made on 09.08.2011 and Rs. 6,00,000/- on ITA No. 149/Ahd/2022 Sunil Bajaj Infrastructure Builders Pvt Ltd Vs. ITO Assessment Years: 2012-13 Page 3 of 5 11.09.2011 totaling to Rs. 12,00,000/- by Cheque. Thus, these payments were made in the Financial Year 2011-12 i.e., A.Y. 2012-13. The Assessing Officer further observed that the price of the said property was fixed by the state revenue authority at Rs. 9,99,51,400/- vide order dated 19.12.2011. Against this order the assessee has gone in appeal by paying 25% of the stamp duty amount of Rs. 11,53,655/- and the case is pending till the assessment proceedings. The Assessing Officer therefore, held that the assessee has not fully and truly disclosed the full value paid for the purchase of property in its books of account. Thus, the Assessing Officer made addition of Rs. 12,00,000/- as unexplained investment u/s 69B of the Income Tax Act, 1961. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that as relates to Ground No. 1 and 2 on legality, the since the copy of reasons recorded does not show any date of recording reasons therefore, the same is invalid. The Ld. DR submitted that the reasons recorded were proper. 6. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the reasons were properly recorded, and the mention of the date was not correct stand, hence re-opening is valid. Ground No. 1 and 2 on legality are dismissed. 7. As relates to Ground No. 1 to 4 on merits, the Ld. AR submitted that the assessee is engaged in business of real estate and developer and is maintaining regular books of accounts and the Auditor during company audit has not found any defect maintained in books and even the Assessing Officer during the course of Assessment proceedings have not found any mistake or lacuna in the books of accounts maintained and has not rejected the books of account. The amount paid by the assessee for purchase of property is paid by cheque and duly reflected in the bank passbook/statement. The amount were paid from time to time and have been admitted the payment schedule is not the same as mentioned in the Deed of Purchase and owing to personal and financial adjustment difficulty full amount of cheques ITA No. 149/Ahd/2022 Sunil Bajaj Infrastructure Builders Pvt Ltd Vs. ITO Assessment Years: 2012-13 Page 4 of 5 have been paid earlier or later that mentioned in the schedule in Purchase Deed which does not amount for liability under Section 68 or 69 of the Act. The Ld. AR further submitted that the Assessing Officer solely relied on the fact that the property purchased is not reflected in the books of accounts and therefore he had presumed that the amount paid is liable to addition and made huge addition which is not supported by any evidence and any other circumstances. As a matter of fact the Assessing Officer had not raised a specific query as to why property was not reflected. The Ld. AR further submitted that without prejudice, Section 68 or 69 does not apply and in the Balance sheet if any amount is liable to be added then only token amount of 2% as net profit be added for probable, leakage if any. The Ld. AR relied upon the decision of Hon’ble Gujarat High Court in case of CIT vs. Shitalben Saurabh Vora 136 taxmann.com 441 which is upheld by the Hon’ble Supreme Court. The Ld. AR further submitted that no new information has come before the Assessing Officer and it is a case of change of opinion. The Ld. AR further submitted that the addition of Rs. 12,00,000/- be treated as Gross Income from business and only profit of 2% be added as Income. 8. The Ld. DR submitted that the property is that of Rs. 10,00,00,000/- worth which is seen from the conduct of the assessee that the assessee paid Rs. 11,53,655/- stamp duty which is 25% of the actual land value while filing the appeal against revenue authorities. The Ld. DR further submitted that the invocation of Section 69B of the Income Tax Act, 1961 is justifiable. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 9. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has made payment of Rs. 12,00,000/- and disputed the stamp valuation of the stamp Revenue authorities’ valuation. This fact remains undisputed. Though the dispute is yet pending, the valuation whether is higher or not is not verified independently by the Revenue authorities. Since the amount paid by the assessee for the transaction was established by the assessee through Deed of Purchase and the Banakhat as well there was no rejection of books of accounts, the provisions of Section 69B will not be application in the present case. ITA No. 149/Ahd/2022 Sunil Bajaj Infrastructure Builders Pvt Ltd Vs. ITO Assessment Years: 2012-13 Page 5 of 5 Thus, the addition made by the Assessing Officer as well as confirmed by the CIT(A) is not correct. Ground No. 1 to 3 on merit are allowed. As regards to Ground No. 4 on merit the same is without prejudice, hence not adjudicated at this juncture. 10. In result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 13 th day of October, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 13 th day of October, 2023 Bt* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of dictation: .... Words processed by Hon’ble JM on her laptop...11.10.2023 2. Date on which the typed draft is placed before the Dictating Member: ...12.10.2023.... 3. Date on which the approved draft comes to the Sr. P.S./P.S.: ...12.10.2023.... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: ......13.10.2023..................... 5. Date on which the file goes to the Bench Clerk : ......13.10.2023............. 6. Date on which the file goes to the Head Clerk : .................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order: ...... 8. Date of Despatch of the Order: ........................