Sunil Kumar Batra L/H of Late Rajkumar Batra , Bhopal V. DCIT, Central Circle I, Bhopal

ITSSA 12/Ind/2022

AI Insights

The case involves Sunil Kumar Batra, the legal heir of Late Rajkumar Batra, who appealed against the orders of the lower authorities regarding an addition of Rs. 47,00,000 to his income as unexplained expenditure under section 69C of the Income-tax Act, 1961. This addition was based on a document seized during a search operation in the premises of another individual, which allegedly contained notings related to a transaction involving the assessee. The Tribunal examined the legality of the proceedings under section 153C and the merits of the addition made under section 69C. The Tribunal concluded that the addition was not sustainable due to the lack of direct evidence linking the assessee to the alleged expenditure and the failure to provide an opportunity for cross-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130921 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 24-02-2022
• Other Referred Cases: Smt. Jyoti Garg ITA No. 8/Ind/2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure
• Section: 132; 69C; 153C

Judgement Text

Page 1 of 7 आयकर अपीलीय अिधकरण, इंदौर ायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER (Conducted through Virtual Court) IT(SS)A No.12/Ind/2022 Assessment Year: 2012-13 Sunil Kumar Batra L/H of Late Rajkumar Batra, Bhopal बनाम/ Vs. DCIT Central Circle-I Bhopal (Appellant / Assessee) (Respondent / Revenue) PAN: AEFPB 7775 L Assessee by Shri S.S. Deshpandey, AR Revenue by Shri P.K. Mishra, CIT-DR Date of Hearing 07.12.2022 / 16.03.2023 Date of Pronouncement 23.03.2023 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by appeal-order dated 29.12.2021 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“Ld. CIT(A)”], which in turn arises out of assessment-order dated 08.04.2021 passed by learned DCIT (Central)-1, Bhopal [“Ld. AO”] u/s 153C/143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on following grounds: “1. That on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax was not justified in holding that proceedings initiated u/s 153C by the learned Assessing Officer is not illegal, arbitrary, Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 2 of 7 barred by limitation and is not vitiated in law as no documents related to the assessee were found and seized. 2. That on the facts and in the circumstances of the case the learned Ld. Commissioner of Income Tax was not justified in holding that the Assessing Officer was justified to hold and add to the total income of the assessee a sum of Rs. 47,00,000/- as unexplained expenditure u/s 69C of the Act. 3. That on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax was not justified in holding that Assessing Officer had prepared a proper satisfaction note prior to assuming jurisdiction u/s 153C. 4. That on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax was not justified in holding that Assessing Officer was justified to make an addition u/s 69C without establishing that the assessee has incurred any expenses. 5. That on the facts and in the circumstances of the case the Ld. Commissioner of Income Tax was not justified in holding that Assessing Officer was justified to hold that the assessee has made investment in purchase of plot, on the basis of third-party documents without there being corroborative evidence to justify.” 2. Heard the learned Representatives of both sides at length and case- records perused. 3. Briefly stated the facts are such that the assessee in present-appeal is “Raj Kumar Batra” but since he expired, the appeal is pursued by “Sunil Kumar Batra, Legal Heir of Late Rajkumar Batra”. A search u/s 132 was conducted in the case of “Shri Pradeep Saraiya” Group on 04/08/2017 wherein a document marked as “LPS-5-Page 76” was seized from the possession of one Shri Santosh Kumar Ramnani. This document contained certain notings including a noting in the name of “Raj Kumar Batra” which mentioned a receipt of Rs. 47 lakh (Rs. 5 lakh through cheques + Rs. 42 lakh in cash) for purchase of plot. Based on this document, action u/s 153C was taken against assessee which culminated into addition of Rs. 47,00,000/- u/s 69C on account of unexplained expenditure. Being aggrieved by assessment-order, the assessee filed first appeal but did not succeed. Now, the assessee has come in this appeal before us assailing the orders of lower authorities. Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 3 of 7 4. Ground No. 1 and 3 are legal objections raised by assessee with respect to maintainability of the proceeding of section 153C conducted by Ld. AO. But, however, during the course of hearing, both sides did not make any pleading or submission thereon. Hence, these grounds are dismissed as non-pressed by appellant. 5. We take up Ground No. 2, 4 and 5 which deal with the merit of addition of Rs. 47,00,000/- made by AO u/s 69C. 6. Ld. AR representing the assessee drew our attention to the assessment-order as also the documents placed in the Paper-Book filed by him and made several contentions as under: (i) The revenue-authorities seized the document marked as “LPS-5-Page 76” [and also “LPS-5-Page 75” and “LPS-5-Page 77”], reproduced in the assessment-order, from the possession of “Shri Santosh Ramnani” in the search conducted upon “Shri Pradeep Saraiya” Group. Based on this document, the Ld. AO confronted Shri Pradeep Saraiya and Shri Santosh Ramnani but they did not submit any details (last para on Page No. 2 of assessment-order). Ld. AR submitted that finding no response from those persons qua the document seized from their possession, the Ld. AO turned his face towards the assessee. (ii) Carrying us to Para No. 6.1 and 6.2 of the assessment-order, Ld. AR submitted that when the AO issued notice dated 23.01.2021 u/s 142(1) to assessee to explain the nature and content of the seized documents, the assessee immediately filed a reply dated 02.02.2021 to Ld. AO raising objections and at the end of reply making following specific request: “You are hereby humble requested to give to the assessee copies of documents on the basis of which it has been concluded that the assessee made payments to Santosh Kumar Ramtani and has purchased a plot for Rs. 47.00 lacs, such documents may be as under:- Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 4 of 7 1) Copy of statements recorded of Mr. Santosh Kumar Ramnani in this respect. 2) Copy of sale deed of impugned property in the name of assessee provided by Mr. Ramtani, and, 3) Any other such documents/statements which may lead to such conclusion that the assessee made the investment and purchased a plot. You are requested to please provide copies of relevant documents if any so that the assessee could offer his comments. You are once again requested to provide copy of satisfaction notes which has been requested already vide letter dated 26.01.2021.” (iii) It is a fact that the assessee has not purchased any plot and the assessee clearly informed this fact to Ld. AO. The assessee also filed a solemnized affidavit dated 11.03.2021, copy placed at Page 27 of Paper-Book, containing averments that he had not purchased any plot of land and that he had not invested any amount for purchase of plot. The Ld. AO has not made any whisper on the affidavit in assessment- order and thereby ignored the solemnized averments of assessee. (iv) The cheque of Rs. 5,00,000/- alleged by revenue-authorities to have been paid by assessee as per the seized document, is not issued from any bank account of assessee. (v) Lastly, the Ld. AO has made addition on the basis of extraneous material which was seized from someone else and that too without providing opportunity of cross-examination to the assessee. Relying upon the order of ITAT, Indore in Smt. Jyoti Garg ITA No. 8/Ind/2022 order dated 30.08.2022, Ld. AR submitted that in similar circumstance, the Hon’ble Co-ordinate Bench has deleted the addition made by revenue-authorities. 7. With these submissions, Ld. AR prayed that the addition made/confirmed by lower authorities is without any material, based on pure conjecture and illegal too since the same was made without providing any opportunity of cross-examination to the assessee. Hence, the Ld. AR prayed to delete the addition. Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 5 of 7 8. Replying to above, Ld. DR vehemently supported the orders of lower authorities. He submitted that the seized document is not a stray document. Referring to Para No. 6.3(ii) and (iii) of the assessment-order and Para No. 3.2.1 and 3.4.1 of the order of first-appellate authority, he submitted that during the course of statement dated 15/10/2017, the assessee himself admitted that he has paid amount of Rs. 20,50,000/- to Shri Santosh Kumar Ramtani towards purchase of a property located at A-4, DK Devsthali, Bawadia Kalan, Bhopal. Ld. DR stated that although the assessee submitted that the impugned property at A-4, DK Devshtali, Bawadia Kalan, Bhopal was purchased by his brother Shri Sunil Batra but, however, the assessee did not file any sale-deed to prove/confirm his submission. Ld. DR submitted that even during the first-appellate proceeding, the assessee did not file any sale-deed. Therefore, the lower authorities have rightly concluded that it is the assessee who had made unexplained investment of Rs. 47,00,000/- as mentioned in the seized document and their action must be upheld. 9. In Rejoinder, Ld. AR submitted drew our attention to Point No. 9(iii) of the “Statement of Facts” submitted by assessee to Ld. CIT(A) as part of Form No. 35 where the assessee has clearly submitted the following fact: “9 On 23.02.2021, the assessee filed another detailed reply explaining the contents of seized papers. The assessee explained on the basis of facts and documents that: (i) to (ii) XXX (ii) Brother of the assessee Shri Sunil Batra has purchased a plot in Bawadia Kalan Bhopal for which copy of sale-deed was furnished alongwith the written submission dated 17.02.2021. However, the Assessing Officer preferred not to discuss in the order of assessment any of the issues raised by the assessee.” 10. We have considered the rival submissions of both sides and perused the material held on record including the orders of lower authorities. We observe that the assessee has all along been claiming seriously before the Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 6 of 7 revenue-authorities that he has not made any purchase of plot and even made solemnized averment to this effect in an affidavit before lower authorities. It is also a stand of assessee that the cheque of Rs. 5,00,000/- as mentioned in the seized-document is not issued from any of his bank account and this fact is very crucial, goes again in favour of assessee. The assessee has also made a factual submission to both of the lower authorities that his brother had purchased a plot. It is also borne out from the “Statement of Facts” filed by assessee in the Statutory Form No. 35 that the assessee filed a copy of sale-deed by which the plot was purchased by his brother. On legal front, we observe that the impugned seized material identified as “LPS-5-Page 76”, which is the sole basis to make addition in the hands of assessee, was found in the possession of one Shri Santosh Kumar Ramnani during the course of search conducted upon “Shri Pradeep Saraiya” which is an extraneous material and the same had been taken as basis to draw adverse conclusions against assessee without providing even the opportunity of cross-examination to assessee. This approach of the Ld. AO is clearly against the well-settled principle of jurisprudence “Audi alteram partem”. Therefore, we fail to understand how the revenue authorities have derived a conclusion against the assessee without even giving the opportunity to assessee. We find that in the case of Smt. Jyoti Garg (supra), the Hon’ble Co-ordinate Bench has deleted the addition which was made by revenue-authorities on the basis of extraneous material and that too without providing opportunity of cross-examination. Therefore, the present case is fully governed by the ratio taken by Hon’ble Co-ordinate Bench. Thus, taking into account all these factual and judicial principles, we are of the considered view that the addition made by revenue-authorities in the present case is without adequate material besides being illegal. Hence, the same is not sustainable. Therefore, we delete the addition. Sunil Kumar Batra IT(SS)A No.12/Ind/2022 Assessment year 2012-13 Page 7 of 7 11. Resultantly, this appeal of assessee is allowed. Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on 23/03/2023. Order pronounced in the open court on ....../....../2023. Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 23.03.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore 1. Date of taking dictation 2. Date of typing & draft order placed before the Dictating Member 3. Date on which the approved draft comes to the Sr. P.S./P.S. 4. Date on which the approved draft is placed before other Member 5. Date on which the fair order is placed before the Dictating Member for pronouncement 6. Date on which the file goes to the Bench Clerk 7. Date on which the file goes to the Head Clerk 8. Date on which the file goes to the Assistant Registrar for signature on the order 9. Date of dispatch of the Order