SAJID MUSHRIF, MUMBAI V. ITO WD 15(3)(2), MUMBAI

ITA 6726/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9165 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNA MURTHY
• Assessee Lawyers: MRS DEEPA KHARE
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Gift; Source of fund; Non compliance
• Section: 50C; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT (MZ) AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.6725/M/2010 (AY: 2006-2007) I.T.A. NO.6726/M/2010 (AY: 2006-2007) MR. SAJID MUSHRIF, C-6, MANTRI BUNGLOW, NARIMAN POINT, NEXT TO AIR INDIA BUILDING, MUMBAI 400 032. PAN: AHAPM1040P VS. INCOME TAX OFFICER, WARD 15(3)(2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MRS. DEEPA KHARE, AR RESPONDENT BY : SHRI V. KRISHNAMURTHY, DR DATE OF HEARING: 29.11.2012 DATE OF ORDE R: 7 .12.2012 O R D E R PER D. KARUNAKARA RAO, AM: THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINST TWO DIFFERENT ORDERS OF THE CIT (A)-26. WHILE THE APPEAL ITA NO.6725/M/2010 IS AGAINST THE ORDER OF THE CIT (A)-26, MUMBAI DATED 14.7.2010 IN CONNECTION WI TH A COUPLE OF ADDITIONS NAMELY (A) ADDITION OF RS.2,00,000/- ON ACCOUNT OF GIFT FROM MRS. SAHERA MUSHRIF AND (B) ADDITION OF RS. 2,83,573/- ON ACCOUNT OF UNEXPL AINED INVESTMENT IN A IMMOVABLE PROPERTY. THE OTHER APPEAL ITA NO.6726/M/2010 IS F ILED AGAINST THE ORDER OF THE CIT (A)-26, MUMBAI DATED 15.7.2010 IN CONNECTION WITH L EVY OF PENALTY U/S 271(1)(C) ON THE AFORE MENTIONED ADDITIONS OF RS 2 LAKHS AND RS 2,83,573/-. CONSIDERING THE CONNECTIVITY OF THE FACTS AND THE ARGUMENTS, BOTH T HE APPEALS ARE CLUBBED AND ADJUDICATED IN THIS COMMON ORDER. THE APPEAL WISE A DJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. 2 ITA NO.6725/M/2010 (AY: 2006-2007) APPEAL ON MERITS OF ADDITIONS 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUND S. 1. THE ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.2,00,000/- GIFT FROM MRS. SAHERA MUSHRIF AS UNEXPLAINED INCOME. 2. THE ASSESSING OFFICER ERRED IN MAKING ADDITION O F RS. 2,83,573/- AS INVESTMENT IN IMMOVABLE PROPERTY AT ICHALKARANJI-AB SENCE OF ANY DETAILS . 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING AT RS 1,18,576/-. AO MADE EX-PARTE ASSESSMENT U/S 144 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 56,84,080/- . AO MADE CERTAIN ADDITIONS AND THE ADDITIONS ON ACCOUNT OF GIFT FROM MRS. SAHERA MUSHRIF AND UNEXPLAINED INVESTMENT IN AN IMMOVABLE PROPERTY AT ICHALKARANJI ARE THE SUBJECT MATTERS OF APPEAL BEFORE US. WE SHALL TAKE UP EACH OF THE ISSU E SEPARATELY AND THE FACTS RELEVANT FOR THE ADDITION OF GIFT ARE THAT THE ASSE SSEE CLAIMED A CASH GIFT OF RS. 2,00,000/- AND AO ISSUED STATUTORY AND OTHER FOLLOW UP NOTICES AND THERE IS NO RESPONSE FROM THE ASSESSEE. AO INITIATED PENALTY PR OCEEDINGS FOR NON COMPLIANCE U/S 271(1)(B) OF THE ACT AND THE END RESULT OF THE SAME IS UNKNOWN. AO HELD THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION IS NOT VERIFIABLE AND THEREFORE, AO MADE ADDITION OF RS 2 LAKHS IN THE EX -PARTE ASSESSMENT U/S 144 OF THE ACT. DURING THE FIRST APPELLATE PROCEEDINGS, ASSES SEE SUBMITTED THAT M/S SAHERA MUSHRIF IS THE DONOR AND MOTHER OF THE ASSESSEE, WH O IS REGULARLY ASSESSED TO TAX IN ITO 15(3)(2), MUMBAI. IN SUPPORT, THE ASSESSEE FILE D COPY OF THE RETURN OF THE DONOR SHOWING THE PROOF OF FILING RETURN REFLECTING THE D AIRY AND POULTRY INCOME. HER RETURN OF INCOME IS ACCOMPANIED BY THE CAPITAL ACCOUNT, WH ICH REFLECTS THE FACT OF GIFTING OF RS 2 LAKHS EACH TO HER SONS. THE DONOR HAS DISCLOSE D THE GROSS RECEIPTS ON ACCOUNTS DAIRY AND POULTRY BUSINESS FOR THE YEAR AT RS 6,05, 340/-. THE OPENING BALANCE AS PER THE CAPITAL ACCOUNT IS RS 25.33 LAKHS. AO WAS GIVEN OPPORTUNITY TO OFFER COUNTER COMMENTS ON THE PAPERS FILED BEFORE THE CIT(A). IN R EPLY, AO MENTIONED THAT THE RETURN OF THE DONOR IS NOT FILED IN THE SAID JURISD ICTION AND THE PAN: AKEPM 3152D IS NOT TRACEABLE IN ITO 15(3)(2) AND PAN IN FACT FALLS IN THE JURISDICTION OF ITO 25(2)(3). COMMENTING ON THE CRISS-CROSS TRANSACTION REGISTERE D BETWEEN THE DONOR AND THE 3 DONE, AO DESIRED THE NEED FOR TIME FOR VERIFICATION OF THE FACTS. DURING THE APPEAL PROCEEDINGS, ASSESSEES COUNSEL ASSERTED THAT THE D ONOR IS REGULARLY ASSESSED TO TAX AND HER IDENTITY AND CREDITWORTHINESS IS BEYOND DOU BT. THE COPIES OF THE CAPITAL ACCOUNT AND THE BALANCE SHEET OF THE DONOR HAVE NOT ACCOMPANIED THE COPY OF THE RETURN OF THE DONOR, WHICH WAS FILED BEFORE THE CIT (A). CIT(A) CONSIDERED THE ABOVE FACTS AND CONFIRMED THE ADDITION OF RS 2 LAKH S CONSIDERING THE FAILURE OF THE ASSESSEE IN ESTABLISHING THE GENUINENESS OF THE TRA NSACTIONS. AGGRIEVED WITH THE SAME, THE ASSESSEE RAISED THE RELEVANT ISSUE IN THE APPEAL FILED BEFORE US. DURING THE HEARING PROCEEDINGS BEFORE US, MS DEEPA KHARE, LD C OUNSEL FOR THE ASSESSEE NARRATED THE ABOVE FACTS OF THE CASE AND MENTIONED THAT THE IMPUGNED CAPITAL ACCOUNT OF THE DONOR IS VERY MUCH SUBMITTED TO THE CIT(A) AND THEREFORE, THE STATEMENTS MADE IN THE IMPUGNED ORDER REQUIRES CERT AIN CHANGES. THE CONFUSION WITH REGARD TO THE JURISDICTION AND THE PAN IS ALSO UNNECESSARY AS THE ASSESSEE IS REGULARLY ASSESSED TO TAX AS EVIDENT FROM THE COPY OF THE RETURN OF INCOME FILED IN THE FORM OF THE PAPER BOOK, WHICH WAS ALSO FILED BE FORE THE CIT(A). THE GENUINENESS ISSUE RAISED BY THE CIT(A) IS NOT PROPER CONSIDERIN G THE ACCEPTED SOURCES OF INCOME IE DAIRY AND POULTRY BUSINESS AND THE BUSINESS OF T HE DONOR IS BASICALLY OF CASH TRANSACTIONS. LD COUNSEL ALSO PRAYED FOR GRANT OF A NOTHER OPPORTUNITY BEFORE THE AO TO SORT OUT ALL THE ISSUES RELATING TO THE GENUINEN ESS OR IDENTITY OR CREDITWORTHINESS OR CONTEXT FOR GIFTS OR OTHER CRISS-CROSS TRANSACTI ONS BETWEEN THE ASSESSEE AND DONOR. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO AND CIT(A). 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE ALONG WITH THE PAPER BOOK FILED BEFORE US. IT IS AN ADMITTED FA CT THAT THE ASSESSEE DID NOT ATTEND TO THE ASSESSMENT PROCEEDINGS BEFORE THE AO FOR SAME REASONS AND THEREFORE, AN EXPARTE-ASSESSMENT WAS MADE U/S 144 O F THE ACT. DURING THE CIT(A), ASSESSEE CAME UP WITH VARIOUS PAPERS AND THE CIT(A) REMANDED THEM TO THE AO FOR COMMENTS. THE SAID COMMENTS WERE PUT TO THE ASSESSE E. AFTER CONSIDERING ALL THESE COMMENTS, THE CIT(A) SUSTAINED THE IMPUGNED ADDITIO N OF RS 2 LAKHS. IN THE PROCESS, THERE IS SOME CONFUSION WITH REGARD TO THE CORRECT JURISDICTION AND THE PAN PARTICULARS OF THE DONOR, WHICH WERE RAISED BY THE AO. THESE ISSUES WERE NOT SORTED 4 OUT. FURTHER, CIT (A) RAISED THE ISSUE OF GENUINENE SS OF THE TRANSACTIONS BETWEEN THE ASSESSEE AND HIS MOTHER-DONOR OF THE GIFT. IT A PPEARS THE DONORS INCOME TAX PARTICULARS WERE NOT ACCEPTED BY THE AO FOR WANT OF VERIFICATION INTO THE PARTICULARS FILED BY THE ASSESSEE. THE REMAND REPORT OF THE AO REFERS TO THE AOS REQUEST TO THE CIT(A) TO CONDUCT ENQUIRY BEFORE ACCEPTING THE SAME . BUT THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE WITHOUT GOING INTO THE MERITS OF THE CLAIMS OF THE ASSESSEE WITH REGARD TO THE GENUINENESS OF THE GIFT. FURTHER , THE ISSUES RELATING TO THE FILING OR NOT FILING THE COPIES OF THE CAPITAL ACCOUNTS OF TH E DONOR BEFORE THE CIT(A)/AO ARE YET TO BE SORTED OUT. FURTHER, THERE IS NO DISCUSSI ON IN THE ORDERS RELATING TO CRUCIAL ISSUE OF OCCASION OF THE GIFT. IT IS ALSO NOT KNOWN AS TO THE TREATMENT GIVEN BY THE REVENUE WITH REGARD TO THE OTHER GIFT OF RS 2 LAKHS GIVEN BY THE MRS. SAHERA MUSHRIF TO OTHER SON. LD COUNSEL FAIRLY MENTIONED THAT ALL THE PAPERS, REQUIRED FOR ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHI NESS OF THE DONOR, SHALL BE FURNISHED AT THE INSTANCE OF THE AO IN THE SET ASID E PROCEEDINGS. CONSIDERING THE ABOVE, IN OUR OPINION, AS REQUESTED BY LD COUNSEL, THE MATTER SHOULD BE SET ASIDE TO THE FILES OF THE AO FOR EXAMINING THE ISSUE AFRESH AND DECIDE THE ISSUE AFTER GRANTING REASONABLE OPPORTUNITY TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO FILE REQUIRED EVIDENCES TO DEMONSTRATE THE GENUINENESS OF THE IMP UGNED TRANSACTION OF GIFT OF RS 2 LAKHS FROM HIS MOTHER. ACCORDINGLY, THE ISSUE OF GIFT RAISED AT GROUND 1 IS SET ASIDE . 6. GROUND NO.2 RELATES TO UNEXPLAINED INVESTMENTS I N THE IMMOVABLE PROPERTY AT ICHALKARNJI AND IT INVOLVES THE ADDITION OF RS 51,93 ,000/- BY THE AO FOR WANT OF DETAILS. THE FACTS RELATING TO THIS ISSUE, AS MENTI ONED BY CIT(A) IN PARA 5.1 AND 5.2, ARE THAT THE ASSESSEE IS A CO-OWNER OF THE SAID PRO PERTY WITH THE 1/3 RD SHARE IN IT. THE SAID PROPERTY WAS PURCHASED FOR RS. 40 LAKHS WH EN THE SRO VALUE IS RS. 51.93 LAKHS. AFTER CONSIDERING THE STAMP DUTY EXPENDITUR E, THE ASSESSEES SHARE COMES TO RS. 14,47,427/- WHICH WAS DULY REFLECTED IN THE BOO KS. HOWEVER, AS PER THE AO RS. 51,93,000/- SHOULD BE CONSIDERED, CONSIDERING THE S RO VALUE OF THE PROPERTY. IN EFFECT, THE AO INVOKED THE PROVISIONS OF SECTION 50 C OF THE ACT. 7. ON CONSIDERING THE ABOVE CONTENTIONS OF THE ASSE SSEE AND THE AO, THE CIT(A) DISCUSSED THE NEED FOR ADDING ONLY 1/3 RD OF ASSESSEES INTEREST IN THE PROPERTY. AS 5 PER THE CIT(A), THE MINIMUM PRICE OF THE PROPERTY W AS OF RS. 51,93,000/- AND NOT OF RS. 40 LAKH. THEREFORE, THE CIT(A) COMPUTED 1/3 RD SHARE OF THE ASSESSEE FOR PURCHASE OF PROPERTY AT RS. 17,31,000/- AND NOT RS. 14,47,427/-. THE ADDITION TO THE EXTENT OF RS. 2,83,573/- (17,31,000 14,47,427 ) WAS CONFIRMED. PARA 5.2 OF THE IMPUGNED ORDER IS RELEVANT AND THE SAME READS AS FO LLOWS. 5.2 AS REGARDS QUANTUM OF ADDITION, IT IS VERY OBVIOUS THAT LD AO HAS IGNORED THE VITAL FACT THAT APPELLANT IS A OWNER OF ONLY 1/3 RD PART OF THE PURCHASED PROPERTY SITUATED AT ICHALKARANJI VID E S.NO. 12265 AND 12265/1A. THE 1/3 RD SHARE IS VISIBLE FROM THE PURCHASE DEED ITSELF AND FURTHER IT IS CORROBORATED FROM THE BALANCE SHEET F ILED BY THE APPELLANT ALONG WITH RETURN OF INCOME. THEREFORE, THE CONTENTION O F THE LD AO IN REGARD TO FULL OWNERSHIP OF THE PROPERTY IS UNFOUNDED. AS RE GARDS MARKET PRICE OF THE PROPERTY, THE FINDING OF THE ASSESSING OFFICER IS W ORTH APPROVAL BECAUSE OF THE REASON THAT APPELLANT HAS NOT EXPLAINED PROPERL Y AS TO HOW THE ACTUAL PURCHASE PRICE WAS ONLY OF RS. 40 LAKH AND PROPERTY WAS NOT PURCHASED FOR RS. 51,93,000/- BEING A MINIMUM PRICE. THERE CANNOT BE PRESUMPTION THAT PROPERTY WAS SOLD OUT BELOW THE MARKET PRICE. IT IS AN OPEN FACT THAT STAMP DUTY IS LEVIED AT THE MINIMUM MARKET PRI CE AND NOT AT THE MAXIMUM PRICE OF THE PROPERTY, IT MEANS, AT LEAST T HE MINIMUM PRICE OF THE PROPERTY WAS OF RS. 51,93,000/- AND NOT OF RS. 40 L AKH. THEREFORE, THE CONTENTION OF LD AR IS NOT TENABLE CONSIDERING THE FACT OF THE CASE AND EVIDENCE UNDER REFERENCE AS STAMP DUTY AUTHORITIES HAVE TAKEN MINIMUM MARKET PRICE OF THE PROPERTY. THEREFORE, IT IS HEL D THAT APPELLANT ALSO WITH OTHERS HAVE PURCHASED THE PROPERTIES NOT BELOW RS. 51,93,000/-. THEREFORE, 1/3 RD SHARE OF THE APPELLANT FOR PURCHASE OF PROPERTY CO MES TO RS. 17,31,000/- AND NOT OF RS. 14,47,429/-. THEREFORE, THE ADDITION TO THE EXTENT OF RS. 2,83,573/- BEING SHARE OF THE APPELLANT IS C ONFIRMED AGAINST THE ADDITION OF RS. 51,93,000/- MADE BY THE AO. AS SUC H, AO IS DIRECTED TO CONFINE TO ADDITION OF RS. 2,83,573/-. 8. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THERE IS NO DISPUTE ON THE FACTS REL ATING TO THIS ISSUE UNDER CONSIDERATION. FURTHER, SHE MENTIONED THAT IN EFFEC T, THE INCOME TAX AUTHORITIES INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT, W HICH CAME INTO EXISTENCE VIDE THE FINANCE ACT, 2002 AND IT APPLIES TO THE PRESENT AY 2006-07. AS PER LD COUNSEL, SECTION 50C APPLIES TO THE TRANSFEROR OF THE ASSET AND NOT TO THE TRANSFEREE. WHEREAS, THE PRESENT ISSUE RELATES TO THE COST OF A CQUISITION OF THE ASSET TO THE BUYER AND THE GENUINENESS OF THE PURCHASE PRICE OF THE ASSET. THEREFORE, CONSIDERING THE TRANSFEROR, SPECIFIC PROVISIONS OF SECTION 50C OF THE ACT, THE AO IS BARRED FROM MAKING ADDITIONS ON THE TRANSFEREE OF T HE ASSET UNDER THE PROVISIONS. IN SUPPORT OF HER CONTENTION, LD COUNSEL RELIED ON T HE DECISION OF ITAT, AHMEDABAD 6 BENCH IN THE CASE OF DCIT VS. VIRJIBHAI KALYANBHAI KUKADIA [2012] 138 ITD 255 FOR THE PROPOSITION THAT AS PER PROVISIONS OF SECTION 5 0C READ WITH SECTION 69B OF THE ACT, ADDITIONS CANNOT BE MADE IN THE HANDS OF THE T RANSFEREE OF THE PROPERTY. THE FACT THAT THE SAID DECISION WAS PASSED AFTER CONSID ERING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NARESH KHATTAR HUF 261 ITR 664 AND AMAR KUMAR SURANA 226 ITR 344 IS EVIDENT. FURTHER, HONBLE TRI BUNALS ORDER IN THE CASE OF HARLEY STREET PHARMACEUTICALS LTD [2010] 38 SOT 48 6 (AHD) IS CATEGORICAL IN HOLDING THAT THE PROVISIONS OF SECTION 50C ARE APPLICABLE O NLY FOR COMPUTATION OF CAPITAL GAINS IN REAL ESTATE TRANSACTION IN RESPECT OF SELL ER ONLY AND NOT FOR PURCHASER. 9. ON THE OTHER HAND, LD DR HAS NOT BROUGHT ANY OTH ER DECISION CONTRARY TO ABOVE. AS SUCH, THERE IS NO INCRIMINATING EVIDENCE AGAINST THE ASSESSEE THAT THE PURCHASE PRICE OF THE PROPERTY IS MORE THAN RS 40 L AKHS. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED RELE VANT PROVISIONS OF SECTION 50C OF THE ACT AND SUB-SECTION (1) READS AS UNDER: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSES SABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER.. 11. FROM THE ABOVE, IT IS EVIDENT THAT THE EXPRESSI ONS NAMELY, WHERE THE CONSIDERATION RECEIVED OR ACCRUING, DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING. IMPLY THAT THE PERSON RECEIVING THE CONSIDERATION IN THE TRANSACTION OF TRANSFER OF THE PROPERTY IS TO BE TAXED ON THE DIFFERENCE OF VALUE. HENCE, THE TRANSFEROR IS TO B E CHARGED TO TAX U/S 50C OF THE ACT. THEREFORE, SECTION 50C IS TRANSFEROR-SPECIFIC AND NOT TO APPLY TO THE TRANSFEREE OF THE PROPERTY. THIS VIEW GETS THE STRENGTH OF THE D ECISION OF THE TRIBUNAL, AHMEDABAD BENCH IN THE CASE OF DCIT VS. VIRJIBHAI K ALYANBHAI KUKADIA (SUPRA). THEREFORE, THE ADDITION OF RS.2,83,573/- REFERRED T O IN GROUND NO.2 IS TECHNICALLY INVALID. HENCE, THE ASSESSEE IS ENTITLED TO RELIEF . THE ORDER OF THE CIT (A) IS REVERSED ON THIS ISSUE. ACCORDINGLY, GROUND NO.2 I S ALLOWED. 7 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE ALLOWED PARTLY FOR STATISTICAL REASONS. I.T.A. NO.6726/M/2010 (AY: 2006-2007) APPEAL ON PENALTY U/S 271(1)(C) 13. IN THIS APPEAL ASSESSEE RAISED THE ONLY EFFECTIV E GROUND READS AS UNDER: THE LD ASSESSING OFFICER HAS ERRED IN LEVYING PENAL TY ON ADDITIONS OF RS. 4,83,573/-. 14. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A)-26, MUMBAI DATED 15.7.2010 AND THE SOLITARY GROUND RAIS ED IN THIS REGARD RELATES TO THE PENALTY OF RS 18,51,475/- LEVIED BY THE AO IN CONNE CTION WITH THE ADDITIONS MADE BY THE AO ON ACCOUNTS OF GIFT OF RS 2 LAKHS AND THE UNEXPLAINED INVESTMENT OF RS 51,93,000/-IN PROPERTY AT ITCHALKARNJI. RELEVANT DI SCUSSION ON FACTS AND THE DECISIONS OF THE TRIBUNAL ON BOTH THE ISSUES ARE DI SCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER WHILE ADJUDICATING THE APP EAL I.T.A. NO.6725/M/2010 (AY: 2006-2007). IN THE SAID PARAGRAPHS, WE HAVE SET ASIDE THE ISSU E OF ADDITION OF RS 2 LAKHS TO THE FILES OF AO FOR FRESH CONSIDERATION AN D THEREFORE THERE IS NEED FOR FRESH CONSIDERATION OF THE AO FROM PENALTY ANGLE ALSO. TH EREFORE, THE PENALTY ORDER ON THIS ISSUE STANDS SET ASIDE TO THE FILES OF THE AO FOR W ANT OF CONGRUOUS DECISION. REGARDING THE MERITS OF ADDITION ON ACCOUNT OF UNEX PLAINED INVESTMENT IN PROPERTY AT ICHALKARANJI, WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE AND DELETING THE ADDITION OF UNEXPLAINED INVESTMENT MAD E BY THE AO U/S 69B READ WITH SECTION 50C OF THE ACT. THUS, THE ADDITION IS DELET ED AND CONSEQUENTLY, THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON THIS ISSUE DOES NOT ARISE. THUS, THE ASSESSEES APPEAL STANDS ALLOWED . 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF DECEMBER, 2012. SD/- SD/- (D MANMOHAN) (D. KARUNAKARA RAO) VICE PRESEIDENT ACC OUNTANT MEMBER DATE :7.12.2012 8 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR E, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI