MOTI RAM BAIRWA,BASSI, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 1504/JPR/2024

AI Insights

The case involves Moti Ram Bairwa, the appellant, who contested several additions made by the Assessing Officer (AO) under various sections of the Income Tax Act, 1961, for the Assessment Year 2016-17. The additions included unexplained investments and other sources of income, which the appellant argued were unjust and not supported by proper evidence. The CIT(A) initially dismissed the appeal due to non-prosecution, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the handling of the case by the CIT(A) and restored the matter for a comprehensive re-evaluation on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126420 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Other Referred Cases: CIT Vs. B.N. Bhattacharjee & Another 118 ITR 461
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL PARIHAR; LD
• Assessee Lawyers: DEEVAN AGARWAL; LD
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Unexplained investment; Principle of natural justice; Earning of tax free income; Grounds of appeal; Notarized affidavit; Dismissed; AMP; Voucher; Statistical purposes; Restored; Exempt; Proper opportunity of being heard; Explanation
• Section: 250; 69; 139(4)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “B”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 1504(A.Y. 2016-17)/JPR/2024 Moti Ram Bairwa, 54, Gujaron Ki Dhani, Village-Jhinjha Post-Dev Gaon Teh-Bassi 303301 PAN No. AXFPB 4944G ...... Appellant Vs. ITO, Ward 7(4), Jaipur …...Respondent Appellant by : Mr. Deevan Agarwal, CA, Ld. AR Respondent by : Mrs. Swapnil Parihar, JCIT, Ld. DR Date of hearing : 22/04/2025 Date of pronouncement : 24/04/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of NFAC, Delhi dated 16.10.2023 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2016-17.The assessee has raised the following grounds of appeal: 1. The additions made by the AO are arbitrary, excessive, and without proper appreciation of facts and evidence submitted by the appellant. 2 2. The CIT(A) erred in law and on facts by dismissing the appeal for non-prosecution without adjudicating the merits of the case. 3. The AO erred in law and on facts by making an addition of Rs. 30,32,230/- under Section 69 as unexplained investment. The payment was duly accounted for, supported by evidence, and sourced from the sale proceeds of exempt agricultural land. 4. The AO erred in law and on facts by making an addition of Rs. 28,31,439/- under Section 56(2)(vii). The provision is inapplicable to the buyer of a property, and its invocation was legally untenable, the AO failed to appreciate that the transaction was genuine, duly accounted for, and the discrepancy in value arose solely due to market conditions of the purchased property. Specifically, 5. a) the agricultural land purchased from Smt. Naina Devi was under dispute at the time of purchase, significantly affecting its marketability and valuation. The appellant acquired the property at a genuine market value, which was lower than the stamp duty valuation due to the legal risks and infrastructural limitations involved. The invocation of Section 56(2)(vii) in such a case is unwarranted, as the appellant did not gain any undue benefit or income from the transaction. Judicial precedents have consistently held that stamp duty valuations cannot be the sole basis for addition under Section 56(2)(vii) when properties are encumbered or disputed b) the property was situated at a lower height and lacked proper water supply, further reducing its effective market value. The payment made was in line with the prevailing market rate. 6. The AO erred in law and on facts by adding Rs. 14,41,000 as unexplained expenses despite the availability of bills and vouchers substantiating the land development expenses. The AO failed to consider the appellant's explanation and evidence. 7. The AO failed to provide adequate opportunity to the appellant to present explanations, contrary to the principles of natural justice. The timeline between the issuance of the show-cause notice and the completion of the assessment was inadequate for a fair hearing. 2. The brief facts of the case are that the assessee filed his return of income on 28.03.2017 u/s. 139(4) of the Act at Rs. 2,69,350/-. The case of the assessee was selected for complete scrutiny under CASS on the reason “Claim of Large Exempt Income”, as the assessee claimed exempt income amounting to Rs. 55 3 Lacs. After a detailed deliberation between the assessee and the AO, the case of the assessee was assessed after making addition of Rs. 30,32,230/- as unexplained investment u/s. 69 of the Act, Rs. 14.41 Lacs as unexplained investment u/s. 69 of the Act and addition under the head other sources amounting to Rs. 28,31,439/- u/s. 56(2)(vii) of the Act. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee on ex-parte basis as none appeared or filed any details before the office of the Ld. CIT(A). The assessee being further aggrieved with the same preferred the present appeal before us. 3. We have gone through the order of the AO, order of the Ld. CIT(A) and submissions of the assessee alongwith grounds taken before us. Before we move further, it is brought to our notice by the registry that the appeal of the assessee is time barred by 351 days. In response to the same the assessee filed an application for condonation of delay alongwith a duly notarized affidavit for the same. We have gone through the contents of the same and find the same to be genuine with a reasonable cause is also there making the same fit for condonation of delay. In view of this, the delay in filing of the appeal is duly condoned. 4. It is observed that there is no finding by the office of the Ld. CIT(A) on merits as the matter was disposed ex-parte as on the designated dates none appeared on behalf the assessee vide para 4 of the appeal order. Hence, the Ld. CIT(A) relied on the decision of the CIT Vs. B.N. Bhattacharjee & Another 118 ITR 461 and dismissed the appeal without discussing the merits of the case. In view of this, the matter is restored back to the file of the Ld. CIT(A) for fresh hearing after 4 giving the assessee a proper opportunity of being heard as per section 282 of the Act and the assessee is directed to be vigilant and cooperative enough during the proceedings before the Ld. CIT(A) without seeking any adjournment. In these terms grounds raised by the assessee are allowed for statistical purposes. 5. In the result the appeal of the assessee is allowed for statistical purposes. The Order is pronounced in the open court on the 24th Day of April 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 24/04/2025 Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 24.04.2025 Sr.PS/PS 2 Draft Placed before author 24.04.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order 5 "