The Assistant Commissioner of Income Tax, Central Circle, Bellary V. Shri Vishnukant C Bhutada, Raichur

ITA 247/PAN/2019

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted certain additions made by the Assessing Officer following a search and seizure operation under section 132 of the Income Tax Act, 1961. The respondent-assessee, Shri Vishnukant C. Bhutada, had his residential premises searched, leading to the discovery of incriminating evidence related to unexplained investments and accommodation entries for claiming bogus Long Term Capital Gains. The Assessing Officer made additions to the assessee's income, which were later contested and partially overturned by the CIT(A). The Revenue appealed against these deletions, leading to the current judgment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136957 (ITAT-PANAJI)
• Duration Of Justice: 4 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: WT(D)
• Next Hearing Date: 05-09-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 08-08-2019
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHWINI D. HOSMANI
• Keywords: Search and seizure; Principle of natural justice; Accommodation entries; Capital Gains; Bogus
• Section: 132; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI – VIRTUAL COURT BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.247/PAN/2019 िनधाᭅरण वषᭅ / Assessment Year : 2016-17 ACIT, Central Circle, Bellary. Vs. Shri Vishnukant C. Bhutada, Door No.7-5-216, Radha Krupa, Jawahar Nagar School Lane, Raichur- 584103. PAN : ADQPB5719G Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)-2, Panaji-Goa [‘the CIT(A)’] dated 30.05.2019 for the assessment year 2016-17. 2. Briefly, the facts of the case are that the respondent-assessee is an individual deriving income under the head “salary” and “income from other sources”. The Return of Income for the assessment year 2016-17 was filed on 21.09.2016 declaring total income of Revenue by : Shri Ashwini D. Hosmani Assessee by : None Date of hearing : 06.09.2023 Date of pronouncement : 25.09.2023 ITA No.247/PAN/2019 2 Rs.6,60,40,580/-. A search and seizure operations were conducted under the provisions of section 132 of the Income Tax Act, 1961 (‘the Act’) on the residential premises of the respondent-assessee on 16.12.2015. It is stated that during the course of search and seizure operations certain incriminating evidence indicating the unexplained investments and accommodation entries obtained by the respondent- assessee for claim of bogus Long Term Capital Gains on the sale of scrip of Pearl Agriculture Limited for the assessment years 2014-15, 2015-16 and 2016-17 were found. Based on this evidence gathered during the course of search and seizure operations, the assessment was completed by the Assessing Officer vide order dated 28.12.2017 passed u/s 143(3) of Act at a total income of Rs.8,47,33,780/-. While doing so, the Assessing Officer made addition of Rs.1,00,00,000/-, as the assessee had failed to explain the source for expenditure incurred on marriage expenditure of his daughter rejecting the explanation that a sum of Rs.1,00,00,000/- advanced on 18.03.2014 to M/s. Haigreeva Infratech Projects Ltd. Infra was received back for utilization of marriage expenses of the assessee. The Assessing Officer also estimated unrecorded expenditure of Rs.86,93,200/- on rent for marriage venue, lighting, ITA No.247/PAN/2019 3 decoration, event management, catering, photography, videography, stay in hotel, local travelling and travel from the places of the assessee to marriage venue. 3. Being aggrieved by the above additions, an appeal was filed before the ld. CIT(A), who vide impugned order deleted the addition of Rs.1,00,00,000/- and also deleted the addition made on account of estimated expenditure of Rs.86,93,200/-. 4. Being aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before us in the present appeal. 5. It is contended that the ld. CIT(A) ought not to have deleted the addition of Rs.1,00,00,000/- by considering the additional evidence furnished by the assessee in violation of provisions of Rule 46A of the Income Tax Rules, 1962 (‘the Rules’). Similarly, it is contended that the ld. CIT(A) ought not to have deleted the addition of Rs.86,93,200/- without considering the evidence found as a result of search and seizure operations. 6. On the other hand, none appeared on behalf of the assessee despite due service of notice of hearing, therefore, we proceed to dispose of this appeal on merits in the absence of assessee. ITA No.247/PAN/2019 4 7. We heard the ld. Sr. DR and perused the material on record. We had carefully gone through the order passed by the ld. CIT(A). From perusal of para 10.3 of the impugned order passed by the ld. CIT(A), it is apparent that the ld. CIT(A) had considered the evidence in the form of confirmation furnished by M/s. Haigreeva Infratech Projects Ltd. Infra and granted relief to the assessee. This confirmation was not brought on record before the ld. CIT(A) in terms of the provisions of Rule 46A of the Rules thereby violating the principles of natural justice. Thus, the order of the ld. CIT(A) suffers from the illegality and the violation of the principles of natural justice. Thus, this ground of appeal filed by the Revenue stands allowed. 8. As regards to the deletion of addition of 86,93,200/-, it is an undisputed fact that it is not an unabated assessment but abated assessment, therefore, the onus lies upon the assessee to prove the source of expenditure incurred on rent for marriage venue, lighting, decoration, event management, catering, photography, videography, stay in hotel, local travelling and travel from the places of the assessee to marriage venue. It is not the case of the assessee that the assessee had not incurred the expenditure on those items and, ITA No.247/PAN/2019 5 therefore, the order of the ld. CIT(A) suffers from the lack of discussion on facts. Therefore, the findings of the ld. CIT(A) is reversed and the matter is restored to the file of the ld. CIT(A) for de novo examination of this issue in accordance with law. Thus, this ground of appeal filed by the Revenue stands partly allowed. 9. In the result, the appeal filed by the Revenue stands partly allowed. Order pronounced on this 25 th day of September, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 25 th September, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-2, Panaji. 4. The Pr. CIT, Central, Bangalore. 5. DR, ITAT, Panaji. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.