NAYNESH VARDHAMAN SING,CHENNAI V. ITO, NC WARD 19(4), CHENNAI, CHENNAI

ITA 2830/CHNY/2024

AI Insights

The case involves Shri Naynesh Vardhaman Shah, who appealed against the order of the CIT(A) confirming the addition of Rs.18.50 Lacs as unexplained investment for the Assessment Year 2012-13. The amounts were credited to the assessee's bank account, which were claimed to be advances for a property transaction where the assessee was the power of attorney holder. The primary legal issue was whether the income from these advances should be taxed in the hands of the assessee or the property owner. The tribunal found that while the advances were received by the assessee as a power of attorney holder, it needed to be conclusively shown that the amounts were handed over to the property owner, Smt. J. Poongothai.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472384 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWIN D. GOWDA LD.
• Assessee Lawyers: D. ANAND LD
• Keywords: Unexplained investment; Capital Gains
• Section: 73

Judgement Text

" आयकर अपीलीय अिधकरण “ए” \rा यपीठ चे\u0012ई म\u0015। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI मा ननीय \u0018ी एबी टी. वक\u001c, \rा ियक सद\u001f एवं मा ननीय \u0018ी मनोज क ुमा र अ$वा ल ,लेखा सद\u001f क े सम&। BEFORE HON’BLE SHRI ABY T. VARKEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं ./ ITA No.2830/Chny/2024 (िनधा 'रणवष' / Assessment Year: 2012-13) Shri Naynesh Vardhaman Shah 123, Arihant Vaikunt Apartment, Bricklin Road, Purasawalkam, Chennai-600 07. बनाम/ Vs. ITO Non-Corporate Ward-19(4), Chennai. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. AAEPN-3700-E (अपीलाथ\u001c/Appellant) : (\u001f थ\u001c / Respondent) अपीलाथ\u001cकीओरसे/ Appellant by : Shri D. Anand (Advocate) - Ld.AR \u001f थ\u001cकीओरसे/Respondent by : Shri Ashwin D. Gowda (Addl.CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 27-01-2025 घोषणाकीतारीख /Date of Pronouncement : 03-02-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of the order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Kolkata [CIT(A)] dated 26-06-2024 in the matter of an assessment framed by the Ld. AO u/s.143(3) r.w.s. 147 of the Act on 16- 12-2019. The registry has noted delay of 73 days in the appeal, the condonation of which has been sought by the Ld. AR. Considering the 2 period of delay, the delay is condoned and we proceed we proceed for disposal of appeal on merits. 2. Upon perusal of assessment order, it could be seen that an amount of Rs.10 Lacs was found credited in the bank account of the assessee from M/s Flash Builders and another amount of Rs.2.50 Lacs was received from Ravi Raj, HUF and Kannan Associates on 30-08-2011. Accordingly, the case was reopened and the assessee was directed to explain the same. It was stated by the assessee that the said amount represent advance against certain property for which the assessee was holding power of attorney. The amount was stated to be paid to the owner of the property. However, the assessee did not file the details of receiver of payment and confirmation thereof. From the documents, it was noted that one Smt. J. Poongothai nominated assessee as power of attorney to sell her property at Chennai. The assessee received advance but did not repaid the same through banking channels. The amount of Rs.11 Lacs was handed over in cash to Smt. J. Poongothai. The amounts of Rs.8 Lacs were transferred to one Shri RG Raghave as per the wishes of Smt. J. Poongothai. The assessee merely filed receipt signed by Smt. J. Poongothai but failed to prove the genuineness and creditworthiness of Smt. J. Poongothai. Accordingly, the receipt of Rs.18.50 Lacs was added as unexplained investment in the hands of the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 3. The Ld. AR has stated that the advances were received as power agent only and the same would not constitute income of the assessee. The Ld. AR stated that obligation to pay applicable capital gains tax was on the owner of the property. The Ld. AR also filed details of payment 3 made to Smt. J. Poongothai along-with her confirmation. The Ld. Sr. DR stated that except for receipt, no other document has been placed on record. 4. Apparently, the advance has been received by the assessee as power of attorney holder and accordingly, the obligation to pay tax on the same would lie with owner of the property. However, it has to be conclusively shown that the amount was received as power agent only and the same was handed over to the owner. To enable the assessee to substantiate the same, we restore the assessment back to the file of Ld. AO who is directed to verify the aforesaid claim of the assessee. The assessee is directed to file the requisite documents to establish the aforesaid fact. 5. The appeal stand allowed for statistical purposes. Order pronounced on 3rd February, 2025 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) \rा ियक सद\u001f /JUDICIAL MEMBER लेखा सद\u001f / ACCOUNTANT MEMBER चे4ई Chennai; िदनांक Dated :03-02-2025 DS आदेश की Fितिलिप अ$ेिषत / Copy of the Order forwarded to : 1. अपीलाथ\u001c/Appellant 2. \u001f थ\u001c/Respondent 3. आयकरआयु=/CIT Coimbatore/Madurai/Chennai. 4. िवभागीय\u001fितिनिध/DR 5. गाडBफाईल/GF "