SHRI BHARAT ARORA, JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCL-2E, JALANDHAR

ITA 196/ASR/2023

AI Insights

The case involves Bharat Arora, the appellant, who contested an assessment order passed by the Deputy Commissioner of Income Tax (DCIT), Central Circle-2, Jalandhar, which was upheld by the Commissioner of Income Tax (Appeals)-5, Ludhiana. The dispute centered on an addition of Rs. 23,00,000 to the appellant's income, deemed as unexplained investment in property. This addition was based on a property transaction where the DCIT accepted a higher valuation than what the appellant claimed to have paid. The appellant's additional evidence during the appeal, including an affidavit from the property seller, was not substantiated by cross-examination, leading to its rejection. The Tribunal, noting the denial of a reasonable opportunity to the appellant, remitted the case back to the CIT(A) for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114799 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 27-06-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence; Set aside
• Section: 131; 132; 143(3); 133A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 Bharat Arora, H. No. 129, Urban Estate, Phase-2, Jalandhar. [PAN:-AGVPA4505D] (Appellant) Vs. DCIT, Central Circle-2, Jalandhar. (Respondent) Appellant by None Respondent by Sh. Radhey Shyam Jaiswal, Sr.DR. Date of Hearing 17.08.2023 Date of Pronouncement 25.08.2023 ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana, (in brevity ‘the CIT (A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2011-12. The impugned order was emanated from the order of I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 2 the ld. DCIT Central Circle- II, Jalandhar, (in brevity the ld. AO) order passed u/s 143(3) of the Act. 2. The assessee has taken the following revised grounds: “1. That the order passed by the Hon’ble CIT(A) dated 17.02.2023 is against the law and facts of the case. 2. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143(3) r.w.s. 147 of the Act and without complying with the mandatory conditions u/s 147 as envisaged under the Income Tax Act, 1961. 3. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs.23,00,000/-, on account of investment in property, by treating the same as unexplained investment, without considering the facts of the case and without observing the principles of natural justice. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 3 3. Brief fact of the case is that the assessment was framed u/s 143(3) of the Act with addition amount of Rs.23 lacs. A search and seizure operation was conducted u/s 132 on the film industry group. Further a survey was conducted u/s 133A of the Act at the premises of M/s Film Institute. During survey the documents was impounded where the Bharat Arora, i.e. assessee had purchased the property in Jalandhar for consideration of 47 lacs plus Rs.3,76,000/- for registration charges. The documents were impounded was an agreement and the consideration of property was fixed amount to Rs.1,05,00,000/-. In this agreement the proposed purchaser has been mentioned as Smt. Rupinder Arora W/o assessee and the seller was Smt. Ripanjit Kaur. During assessment proceeding Smt. Ripanjit Kaur stated that the amount was finally settled amount to Rs.96 lacs. The ld. AO rejected the claim of the assessee about the valuation of the property and accepted the valuation amount to Rs.1,05,00,000/-. The ld. AO in assessment allowed the assessee genuine payment to the party which is amount to Rs.35 lacs and 47 lacs which works out totally Rs.82 lacs. The said amount was deducted from the total valuation of property and finally the balance amount Rs.23 lacs was added back with the total income. Aggrieved assessee filed an appeal before the ld. CIT(A) and submitted the additional evidence before the ld. CIT(A) with an affidavit from Smt. Ripanjit Kaur. The cross-examination was duly initiated by the ld. AO as per the direction of the ld. I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 4 CIT(A) but none was present. The additional evidence is duly discard. The ld. CIT(A) upheld the assessment order. Being aggrieved the assessee filed an appeal before us. 4. When the case was called for hearing, none was present on behalf of the assessee. The adjournment petition was filed without the proper reason for allowing adjournment. The adjournment petition was rejected, and we proceed to dispose of the matter on ex parte qua for assessee after hearing the ld. DR. 5. The ld. DR vehemently argued and relied on the order of the ld. CIT(A). The relevant paragraphs of the CIT(A) order pages 7 to 8 are duly inserted as below: “During the appellate proceedings, the assessee filed additional evidence in the form of affidavit from Smt. Ripanjit Kaur wherein, she submitted that she received only an amount of Rs. 96 lacs instead of Rs. 1.05 crores for the sale consideration of the said property. Also, she submitted that payment of Rs. 14 lacs was received on 20.05.2010 i.e. after the date of registration of property on 17.05.2010. The additional evidence was forwarded to the AO for consideration who submitted his report vide letter no. 2084 dated 20.12.2021. During the course of forwarding of additional evidence to the AO, authorization was given under Section 250(4) to examine I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 5 the genuineness of the affidavit of Smt. Ripanjit Kaur by examining the said person on oath. In pursuance to that, the AO in his report cited above submitted that summons u/s 131 were issued on 04.02.2020 to Smt. Ripanjit Kaur for verification of the affidavit. The summons was received back undelivered with postal remarks as "unclaimed". Further, the AO informed that vide his office letters dated 20.02.2020, 13.05.2021, 01.02.2021 & 07.02.2021, the assessee was asked to produce Smt. Ripanjit Kaur along with supporting evidence for verification. However, no compliance was made. Hence, the AO recommended rejection of the affidavit filed by the assessee in name of Smt. Ripanjit Kaur. Subsequent to that, a detailed show-cause notice was issued to the assessee to explain his case. Reminders were issued as tabulated below for giving opportunity to the assessee: S. No. DIN & Date of Notice/Show-Cause Notice Hearing Date Remarks 1. ITBA/APL/M/17/2021-22/1038130910(l) dated 27.12.2021 05.01.2022 None appeared 2. ITBA/APL/M/17/2021-22/1038800445(1) dated 17.01.2022 31.01.2022 Seek Adjournment 3. ITBA/APL/F/APL_l/2021-22/1039280884(l) dated 01.02.2022 28.02.2022 Seek Adjournment 4. ITBA/APL/F/APL_l/2021-22/1041163266(l) dated 21.03.2022 07.04.2022 None appeared 5. ITBA/APL/F/APL_l/2022-23/1042854814(l) dated 26.04.2022 05.05.2022 Seek Adjournment 6. ITBA/APL/F/APL_l/2022-23/1043054968(l) dated 18.05.2022 23.05.2022 Seek Adjournment 7. ITBA/APL/F/APL_l/2022-23/1046263275(l) dated 12.10.2022 20.10.2022 None appeared 8. ITBA/APL/F/APL_l/2022-23/1047965624(l) dated 13.12.2022 20.12.2022 Adj. for 24.01.2023 9. On 24.01.2023 AR appeared and seek adjournment 09.02.2023 None Appeared I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 6 It is seen that no reply has been filed despite reminders being issued for more than a year. It appears from above that the assessee has nothing more to substantiate regarding the additional evidence submitted during the course of proceedings. As seen from the facts above, the additional evidence submitted by the assessee could not be corroborated by the statement of the person who has signed the affidavit. The value of the said document during the appellate proceedings becomes of no consequence. Hence, the assessee could not substantiate his contentions as filed during the appellate proceedings and the additional evidence produced by the AR is rejected. In view of above, the addition made by the AO to the extent of Rs. 23 lacs is sustained. Accordingly, this ground of appeal is dismissed.” 6. We heard the rival submission and considered the documents available in the record. In the assessment proceedings the assessee tried to establish that agreement of sale was not a final document. The negotiation was done, and the final amount was settled to Rs.96 lacs. Against the acceptance, the purchaser submitted an affidavit before the ld. CIT(A) as additional evidence. But the revenue authorities were unable to examine the additional evidence duly submitted by the assessee during the appeal proceeding. But the ld. AR further placed in the ground that the reasonable opportunity was denied in the appeal proceeding. We are, therefore, of the opinion that interest of justice would be I.T.A. No. 196/Asr/2023 Assessment Year: 2011-12 7 sub served if the impugned order is set aside and the matters are remitted back to the ld. CIT(A) for consideration thereof afresh. We are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). Needless to say, the assessee should get a reasonable opportunity of hearing for setting aside proceedings. 7. In the result, the appeal of the assessee bearing ITA No. 196/Asr/2023 is allowed for statistical purposes. Order pronounced in the open court on 25.08.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order