DCIT, Circle-4(1), Gurgaon V. Arvind Gupta, New Delhi

ITA 8146/DEL/2019

AI Insights

The case involves an appeal by the Revenue against the decision of the CIT(A) which had allowed the assessee's appeal regarding the source of investment in a foreign property. The assessee, a US citizen and employee of Accenture Services Private Limited in India, had declared an investment in a property in the USA during the assessment year 2016-17. The Assessing Officer (AO) had added the entire investment amount to the assessee's income as unexplained investment in a foreign asset. However, the CIT(A) found that the investment was made from explained sources, and the property was acquired in a previous year, thus not taxable in the year under consideration. The Tribunal agreed with the CIT(A)'s findings and dismissed the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 112567 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-08-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 10-10-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 148; 143(3)

Judgement Text

1 ITA No. 8146/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 8146/DEL/2019 Assessment Year: 2016-17 DCIT, Circle-4(1), Gurgaon. Vs Arvind Gupta, E-345, Ground Floor, Greater Kailash, Part-I, New Delhi-110048 PAN- AQMPG5268Q APPELLANT RESPONDENT Assessee represented by Shri S.K. Agarwal, CA Department represented by Shri P. Praveen Sidharth, CIT(DR) Date of hearing 22.08.2023 Date of pronouncement 31.10.2023 O R D E R PER ANUBHAV SHARMA, JM: The Revenue has come in appeal against the order dated 30.07.2019 passed by the Commissioner of Income Tax (Appeals)-I, Gurgaon (hereinafter referred as “learned First Appellate Authority” or in short “FAA”) in Appeal no. 465/18-19, for the assessment year 2016-17, arising out of the assessment order dated 2 ITA No. 8146/Del/2019 13.12.2018 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred as the “Act”), passed by the Dy. Commissioner of Income-tax, Circle 1(1), Gurgaon (hereinafter referred in short as “Ld. AO”). 2. Heard and perused the record. The Grounds of appeal raised by the Revenue are as under: “1. Whether on the facts and in the circumstances of the case the Ld. CIT(A) was right in law in holding that investment amounting to Rs. 8,67,10,000/- has been made from explained sources. 2. Whether on facts and in the circumstances, the Ld. CIT(A) has not erred in admitting the additional evidence in contravention of Rule 46A of IT Rules. 3. That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal.” 3. Brief facts giving rise to the present dispute can be summarized as, that the Respondent-Assessee is an individual who is a US Citizen and was employed in India with one M/s Accenture Services Private Limited during the previous year relevant to assessment year under consideration. For the assessment year under consideration, the Assessee has filed return of income wherein, he had inter-alia, shown one immovable property held abroad (in short referred to as “USA Property”) and the value acquired was Rs. 15,41,00,000/- . The AO asked the assessee to explain the source of such investment. So, however, he was not satisfied with the explanation furnished and accordingly, made an addition of Rs. 15,41,00,000/- to the returned income treating the same as investment in foreign asset from unexplained source of income. 3 ITA No. 8146/Del/2019 4. In appeal before the Ld. CIT(A), assessee raised various submissions inter- alia pointing out that the said USA property was acquired in the year 2005 for a consideration of Rs. 15,41,00,000/-. Secondly, it was contended that out of the total consideration in USD 35,54,383/-, a sum of USD 20,00,000/- (i.e. Rs. 8,67,10,000/-) was raised by way of loan against the mortgage of property and the balance of USD 15,54,383 (i.e. Rs. 6,73,90,275/-) was out of savings in the US. It was also canvassed that in the year 2005 the record substantiated that assessee did not visit India at all and therefore, there was no income earned in India which could be taxed in the year 2005. The Ld. CIT(A) considered the factual submissions as well as the Remand Report submitted by the AO and concluded that the foreign property in question was indeed acquired by the assessee in the previous year 2005-06 relevant to assessment year 2006-07 and therefore, the addition could not have been made in the impugned assessment, which pertains to assessment year 2016-17. Be that as it may, Ld. CIT(A) noted that the AO would be at liberty to initiate the proceedings u/s. 148 of the Act for AY 2006-07, in accordance with provisions of law. 5. Against the said decision of the Ld. CIT(A), Revenue is in appeal before the Tribunal, in terms of the afore-stated Grounds of Appeal. 6. A perusal of the Grounds of Appeal, revealed that the only grievance of the Revenue is qua the findings of the Ld. CIT(A) that investment amounting to Rs. 8,67,10,000/- has been from unexplained source of income. Notably, the aforesaid amount is reflective of the investment made by the assessee in acquiring the foreign asset in the year 2005 on the strength of loan of USD 20,00,000/- (i.e. Rs. 4 ITA No. 8146/Del/2019 8,67,10,000/-) obtained against the mortgage of the property. The Ld. CIT(A) noted this aspect and found it to be from explained sources. 7. Having heard rival parties, we find that the impugned Appeal of the Revenue is quite misconceived. Firstly, there is no challenge to the findings of the Ld. CIT(A) that the foreign asset in question was acquired by the assessee in the year 2005-06 relevant to assessment 2006-07. In fact the assessee has been consistently asserting this position right from the stage of return of income. The Ld. CIT(A) has noted the submissions of the Ld. AR in para 3.2 of his order wherein, assessee has referred to his return of income filed for AY 2016-17 wherein, the acquisition of the said property at Rs. 15,41,00,000/- has been specifically stated to have been done in the year 2005. Thus, the said position, which has been found, as a matter of fact by the Ld. CIT(A) is not disputed, hence, the present Appeal of the Revenue does not survive at all. 8. Furthermore, in the course of hearing before us, the Representative for the Respondent pointed out that following the directions of the Ld. CIT(A), the assessment of the assessee for the AY 2006-07 was initiated under Section 148 of the Act and completed vide order dated 31.3.2022, a copy of which was placed on record. In terms of the said order, we find that the AO noted that the said property has been acquired in the year 2005 for a total investment of Rs. 15,41,00,000/-. It is also noted by him that the total investment has been partly met by way of loan of USD 20,00,000 (Rs. 8,67,10,000) from a mortgage bank. In final analysis, the AO has concluded that assesseee qualifies to be a non-resident in India in the previous year 2005-06, relevant to assessment year 2006-07 and the returned income at NIL has been accepted. In view of the aforesaid, we find that the dispute regarding 5 ITA No. 8146/Del/2019 the acquisition of the impugned property and investment thereof has been accepted by the AO, as has been contended by the assessee. 9. Therefore, in overall analysis, we find no reason to interfere with the order of the Ld. CIT(A), hence, we uphold the same and accordingly, the Grounds of Appeal raised by the Revenue have no substance. The appeal is dismissed. Order pronounced in open court on 31.10.2023. Sd/- Sd/- (G.S. PANNU) (ANUBHAV SHARMA) VICE PRESIDENT JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI