MR. MANDANNA AIYANNA MUNDACHADIRA ,KODAGU V. .ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, HASSAN

ITA 996/BANG/2024

AI Insights

The case involves Mr. Mandanna Aiyanna Mundachadira, who was subjected to a search by the Income Tax Department, resulting in the discovery of Rs. 25 lakhs in cash. Subsequently, the AO assessed the income of Mr. Mundachadira at Rs. 81,30,000, including unexplained cash and unaccounted business receipts. The PCIT later found discrepancies in the property transaction records, where a property was purchased for Rs. 1,30,00,000, but only Rs. 23,33,000 was recorded in the sale deed. The PCIT noted that the AO had not adequately investigated the source of the remaining amount, leading to the conclusion that the order was prejudicial to the revenue's interests. Mr. Mundachadira appealed against the PCIT's decision, challenging the jurisdiction and the use of a document not served to him during the original proceedings. The Tribunal dismissed his appeal, supporting the PCIT's jurisdiction under section 263.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470424 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEERA MALHOTRA
• Assessee Lawyers: VISHAL S. RAO
• Keywords: Business income; Revision of order
• Section: 263

Judgement Text

"ITA No.996/Bang/2024 Mr. Mandanna Aiyanna Mundachadira, Kodagu IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No.996/Bang/2024 Assessment Year: 2020-21 Mr. Mandanna Aiyanna Mundachadira Block No.11, Serenity Hall Panjarapet, Virajpet-Gonikoppa Road Kodagu 571 218 Karnataka PAN NO : ALSPK1924G Vs. ACIT Central Circle Hassan APPELLANT RESPONDENT Appellant by : Sri Vishal S. Rao, A.R. Respondent by : Ms. Neera Malhotra, D.R. Date of Hearing : 18.12.2024 Date of Pronouncement : 23.12.2024 O R D E R PER PRAKASH CHAND YADAV, JUDICIAL MEMBER: Present appeal of the assessee is arising from the order of ld. PCIT dated 21.3.2024 having DIN No.ITBA/COM/M/17/2023- 24/1063191602(1) and relates to assessment year 2020-21. 2. Brief facts of the case are that the assessee had been searched by the Income tax department on 16.1.2020. During the course of search, cash amounting to Rs.25 lakhs belonging to the assessee was found. Thereafter, the AO completed the assessment at an income of Rs.81,30,000/-, assessing the unexplained cash seized as well as advance paid for property purchase and business receipts not accounted for by the assessee in the books of accounts. ITA No.996/Bang/2024 Mr. Mandanna Aiyanna Mundachadira, Kodagu Page 2 of 4 3. The ld. PCIT while examining the case record, observed that assessee had purchased one immovable property at Balagodu village by making a payment of Rs.1,30,00,000/-. The ld. PCIT observed that the registered sale deed of the land showed the value of sale at Rs.23,33,000/- only. The ld. PCIT further observed that as per the memorandum of association dated 10.4.2019, found from the premises of the assessee, it is coming out that the assessee has paid an amount of Rs.40,00,000/- in cash towards the purchase of the property. The ld. PCIT further noted that though the assessee has paid an amount of Rs.1,30,00,000/-, out of which Rs.40,00,000/- has only been added by the AO and no enquiries with respect to the remaining amount has been made by the AO during the course of assessment proceedings. Therefore, the PCIT took a view that sum of Rs.1,06,67,000/- is the “on mony” paid by the assessee in respect of this property. The ld. PCIT further observed that out of this amount, assessee has offered only Rs.40,00,000/- during the course of assessment proceedings and the AO has also accepted the version of the assessee without making any enquiry with respect to the remaining amount of Rs.66,67,000/-. Therefore, the ld. PCIT was of the view that the order of AO is erroneous in so far as prejudicial to the interest of revenue. 4. The assessee has come up in appeal before us and challenged the jurisdiction of the ld. PCIT on the ground that the document is neither signed by the assessee and nor accepted by the assessee. It is pertinent to note that the assessee has challenged the additions made by the AO in original proceedings before the ld. CIT(A) and the same is pending before the ld. CIT(A). It is the contention of the assessee that the document relied upon by the ld. PCIT was never served to the assessee in the proceedings u/s 263 of the Act despite being asking specifically. ITA No.996/Bang/2024 Mr. Mandanna Aiyanna Mundachadira, Kodagu Page 3 of 4 5. The ld. D.R. pointed out that all other details such as location of the property and cheque amount made by the assessee are matching with the seized papers, therefore, the contentions of the assessee are not tenable. 6. We have heard the rival submissions and perused the materials available on record. We observe that the impugned document which is relied upon by the ld. PCIT is there in paper book from pages 30 to 35. On page 35, certain figures are mentioned, taking cognizance of these figures, the ld. PCIT concluded that the AO failed to enquire into the veracity of these documents and hence, its order is erroneous and prejudicial to the interest of the revenue. It is worthy to note here that this document was found from the premises of the assessee and hence as per the presumption provided in section 292C of the Act, this documents belong to the assessee. Therefore, the burden is on the assessee to rebut the contents of the documents with cogent material. However, the ld. AO could not be able to look into this document during the course of assessment proceedings for the reasons best known to him. Therefore, we are of the view that it is a case of lack of enquiry and hence, we are of the firmed view that the jurisdiction assumed by the ld. PCIT u/s 263 of the Act is legally tenable. Therefore, we do not find any error in the order of ld. PCIT. 7. Before parting, we make it clear that we have not made any comments on the merits of the additions and the assessee is at liberty to explain the contents during the consequential proceedings. ITA No.996/Bang/2024 Mr. Mandanna Aiyanna Mundachadira, Kodagu Page 4 of 4 8. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 23rd Dec, 2024 Sd/- (Prashant Maharishi) Vice President Sd/- (Prakash Chand Yadav) Judicial Member Bangalore, Dated 23rd Dec, 2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "