Shri Sunil Kumar, New Delhi V. ACIT, New Delhi

ITA 2000/DEL/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8314 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 04-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 143(3); 142(1); 234B; 119

Judgement Text

1 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.2000/Del/2017 Assessment Year: 2014-15 Sunil Kumar 14, Ashoka Avenue Road, DLF Farms, Chaattarpur New Delhi Vs. ACIT Central Cicle-26 New Delhi PAN :AIAPK9773A (Appellant) (Respondent) ORDER PER YOGESH KUMAR U.S., JUDICIAL MEMBER: The present appeal is preferred by the assessee for the assessment year 2014-15 against order dated 31.01.2017 passed under Section 250(6) of the Income-Tax Act, 1961 (“the Act”) by the Commissioner of Income-Tax(Appeals), 31, New Delhi. 2. The assessee is an individual deriving income from house properties and income from other sources. A search and seizure operation was conducted u/s Appellant by Shri Rajesh Malhotra, CA & Ms. Shivangi Kumar, Adv Respondent by Sh. H. K. Chaudhary, CIT (DR) Date of hearing 10.05.2022 Date of pronouncement 12.07.2022 2 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT 132 of the Act in AKN Group of cases during which the premises of the assessee was covered. Accordingly, proceedings were initiated, a notice u/s 142(1) of the Act was issued. In response, the assessee has filed return on 30/03/2015 declaring an income of Rs. 38,90,638/-. Subsequently, a notice u/s 143(2), 142(1) of the Act along with questionnaire were issued. The assessment was completed u/s 143(3) of the Act vide order dated 29/03/2016 by the A.O by making an addition of Rs. 14,88,110/- on account of notional rent on vacant property and of Rs. 44,51,750/- on account of unexplained cash. As against the assessment order dated 29/03/2016, the assessee has travel as to CIT(A) by way of an appeal. The Ld.CIT(A) by order dated 31/01/2017 dismissed the appeal by confirming the order of the A.O. 3. Aggrieved by the order of the CIT(A), the assessee has preferred the present appeal on following grounds:- 1. “On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming addition of Rs. 14,88,110/- on account of rent which was never earned and realized by the assessee. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 2. On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming addition of Rs.44,51,750/- as unexplained cash found during search whereas this was received as advance against sale of property. The action of the authorities below is wrong, illegal, misconceived, unjustified and 3 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT bad at law therefore it should be quashed. 3. On the facts and in the circumstances of the case and in law, the authorities below have erred in charging interest u/s 234A Rs. 1,92,640/-, interest u/s 234B Rs.5,52,160/- and interest u/s 234C Rs.21,188/-. The action of the authorities below is wrong, illegal, misconceived, unjustified and bad at law therefore it should be quashed. 4. The Ld. Counsel for the assessee submitted that, the Ground No. 1 is in respect of addition of Rs.14,88,110/- on account of rent which was never earned and realized by the assessee. Further contended that, the said issue is fully covered and order passed by the Tribunal in Assessee’s own case vide order dated 09/03/2022 for the immediately preceding years i.e. Assessment Year 2013-14, 2012-13 and Assessment Year 2011-12, wherein the very same additions made by the A.O has been deleted by the Tribunal in ITA No. 1267/Del/2017, 1268/Del/2018 and 1269/Del/2017. 5. Per contra, the Ld. DR has vehemently contended that, the order of the Ld. A.O and CIT(A) has no infirmity or error and the same requires no interference from the Tribunal and further the Ld. DR has relied on the orders of the Lower Authorities. 6. We have heard the parties perused the materials on record and gave our thoughtful consideration. 4 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT 7. In the present case in hand, the addition of Rs.14,88,110/- has been sustained by CIT(A) on the observation that ‘the assessee has stated that, the house was very old, partly damaged and was not in livable condition but on verification by the A.O found that, a well built structure was in exist at the given address’. Further, the Ld. A.O estimated the ALV of the property at Rs. 123 lac for the Assessment Year 2008-09 and added an annual enhancement of Rs.10% on the same by referring the provision of Section 23(1)(c) of the Act. The similar additions have been made for the Assessment Year 2011-12, 2012- 13 and 2013-14 which are hereunder:- ASSESSMENT YEAR Returned Income Total Additions Income assessee 2011-12 Rs. 1,84,575/- Rs.11,18,040/- Rs.12,82,615/- 2012-13 Rs.28,87,749/- Rs.12,29,844/- Rs.40,97,593/- 2013-14 Rs.24,37,540/- Rs.13,52,828/- Rs.37.90.388/- 8. The above additions made in the Assessment Years 2011-12, 2012-13 & 2013-14 was subject to the Appeal in ITA No. 1267/Del/2017, 1268/Del/2018, 1269/Del/2017 and the Coordinate Bench of the Tribunal vide order dated 19/03/2022 held as under:- “9. We are not in agreement with the arguments o f the ld. AR on the issue o f benefit of 23(1)(c) were not being allowed where property was vacant met vacancy in actual rent receivable shout have been taken as Nil. In that case , sub-Section (a) would be applicable. 5 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT 10. We have considered the findings recorded by the AO as per the assessment order, the submissions made by the ld. AR and the facts of the case on record. As per the assessment orders, the AO observed that in view o f the provisions of section 23 o f the Act, the deemed rental income of the property at C-17A, NOSE, Delhi, which remained vacant during the year was required to be taxed under the head Income from House Property’. The AO, therefore, con fronted the appellant who stated that the house was very old and partly damaged and was not in a livable condition. However, the AO got field verification done and found that a well-built structure existed at the given address. He, accordingly, rejected the explanation and estimated the ALV of the property at Rs. 12,00 ,000/- for the AY 2008-09 and added an annual enhancement of 10% on the same for the subsequent years. Referring to the provisions o f section 23(1)(c), the AO held that since the property was not let out at ITA Nos. 1267, 1268 & 1269/Del/2018 Sunil Kumar 6 any time during the period, the vacancy allowance was not available to the appellant. The AO has not based the estimate on any reasonable working in determining the annual letting value . No description of the property as to the area and the market rates prevalent for rentals has been brought on record. Since, the annual value determined is devoid o f any rational endorsement, we hereby delete the addition made by the revenue authorities. 11. In the result, the appeals o f the assessee are allowed.” 9. In the present case also, the Ld. A.O has not based the estimated on any reasonable working in determining the annual letting value. No description of the property as to the area and the market rate prevalent for the relevance has 6 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT been brought on record. By respectfully following the ratio laid down in the above decisions, we are inclined to delete the addition made by the Lower Authorities. Accordingly, Grounds of Appeal No. 1 is allowed. 10. The Ground of appeal No. 2 is on addition of Rs. 44,51,750/-as unexplained cash found during the search. The Ld. Counsel for the assessee submitted that, the said amount is the advance received against the sale of property which did not materialized and as such the agreement was cancelled. The assessee has produced the agreement to sale dated 20/08/2013 entered into between Sh. Sunil Kumar and Sh. Ajit Singh and also produced the cancellation of the agreement dated 11/09/2016. The Ld. Counsel for the assessee further submitted that the entire amount of Rs. 45 lacs advance sale consideration received from Mr. Ajit Singh has been refunded by way of cheque on 12/04/2022 to substantiate the same, also produced the statement of account of the assessee. 11. The Ld. Counsel for the assessee further submitted that, the Ld. A.O has committed an error by making an addition without even making necessary enquiries, the assessee has discharged his onus by showing the materials for the source of the income, the Assessing Officer without even examining Sh. Ajit Singh completely brush aside the evidence and documents provided by the assessee. The assessee has relied on following citations:- 7 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT Principal Commissioner of Income Tax, Central-1 Vs Adamine Construction (P.) Ltd. reported at 99 taxmann.com 44 (2018) [Hon’ble High Court of Delhi & SLP Dismissed by Hon’ble Supreme Court of India] Kumar Nirman & Nivesh (P.) Ltd. Vs. Assistant Commissioner of Income Tax, Bangalore reported at 121 taxmann.com 174 [Hon’ble High Court of Karnataka]. Adhithiya Gears (P.) Ltd. Vs. Assistant Commissioner of Income Tax, Circle-I reported at 120 taxmann.com 399 (2020) [Hon’ble High Court of Madras] Commissioner of Income-tax Vs. T.B Kunhimahin Haji reported at 109 taxmann.com 237 (2019) [Hon’ble High Court of Kerala]. Commissioner of Income Tax-1 Vs. Hitesh Somani (2014) reported at 41 taxmann.com 119 [Hon’ble High Court of Gujrat]. Commissioner of Income Tax Vs. Puran Chand Mittal (2013) reported at 33 taxmann.com 531 [Hon’ble High Court of Punjab and Haryana] 12. Per contra, the Ld. DR has drew our attention to the statement recorded by the Assessing Officer. It was contended that the assessee was having only property i.e. 1804/2, Kota, Mubarakpur, and no other property is in exist with the assessee to have huge sum in cash which was found during the 8 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT search and further relied on the order of the lower authorities and contended that no interference is required by this Tribunal. 13. We have heard the parties on the above issue, the case of the assessee is that, the cash found during the search was the advance sale consideration received one Mr. Ajit Singh, since the deal could not be materialized, the same has been repaid to him in due course. Further, submitted that, the assessee was having immovable properties apart from 1804/2, Kota, Mubarakpur and was drawing the rental income from those properties to substantiate the same produced ITR for the Assessment Year 2012-13 and 2013-14 which are hereunder:- 9 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT 14. The documents relied by the assessee i.e. the agreement to sale dated 20/08/2013 and the cancellation of agreement to sale dated 11/09/2016 has been seriously disputed by the DR. But the fact remain that the Ld. A.O has not examined Sh. Ajit Singh to know the veracity of the claims of the Assessee. It is well settled law that, once assessee discharges the onus initially cast upon him by providing basic details, it is for the Assessing Officer to enquire the same and come to the conclusion. In the present case, the Assessing Officer has failed to make any enquiry against the information and particulars of the source of income provided by the assessee and proceeded to make additions. Therefore, in our opinion, the addition made by the A.O which was confirmed by the CIT(A) is required to be deleted. Accordingly, Ground No. 2 of the appeal is allowed. 10 ITA No. 2000/Del/2017 Sh. Sunil Kumar Vs. ACIT 15. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 12 th July, 2022. Sd/- Sd/- ( ANIL CHATURVEDI ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 12 th July, 2022. * R.N* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi