SHRI AJAY KUMAR,KOLKATA V. INCOME TAX OFFICER, WARD-1(1), BILASPUR, BILASPUR

ITA 230/RPR/2022

AI Insights

The case involves Shri Ajay Kumar, a Central government employee, who appealed against the orders of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi, which were based on the reassessment orders under Section 147 r.w.s. 144B of the Income-tax Act, 1961. The reassessment was triggered by information from the CBI regarding assets disproportionate to his known sources of income. The Tribunal examined the validity of the reassessment proceedings and the additions made under Sections 69 and 69A of the Act, which pertained to unexplained investments and money, respectively. The Tribunal found that the assessee had not satisfactorily explained the source of certain cash receipts and investments, leading to the upholding of some additions but remanding others for further examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469744 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 27-08-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 17-11-2022
• Other Referred Cases: Sumati Dayal Versus CIT, CIT Versus Durga Prasad More, Chuhar Mal Versus CIT, Raymond Woollen Mills Ltd. Vs. Income-Tax Officer And Ors., CIT (International Taxation)-1, New Delhi Vs. Hersh Washesher Chadha
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: Y. K. MISHRA
• Keywords: Set aside; Unexplained investment; Cost of acquisition; Bonafide belief; Sham transactions; Source of fund; Deemed to accrue or arise in india; Bogus
• Section: 147; 148; 143(3); 143(1); 131; 69; 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos. 230 & 231/RPR/2022 Ǔनधा[रण वष[ / Assessment Years : 2015-16 & 2016-17 Shri Ajay Kumar Flat No.2, Block No.20, Railway North Colony, 11, Garden Reach Road, Kolkata-700 043 PAN: AJQPK2968Q .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer Ward-1(1), Bilaspur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Y.K. Mishra, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 27.08.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 08.10.2024 2 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 आदेश / ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 26.10.2022 and 17.10.2022, which in turn arises from the orders passed by the A.O under Sec.147 r.w.s.144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 19.03.2022 and 21.03.2022 for the assessment years 2015-16 & 2016-17. As common issues are involved in the captioned appeals, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. I shall first take up the appeal filed by the assessee in ITA No.230/RPR/2022 for A.Y.2015-16 as the lead matter, and the order therein passed shall mutatis mutandis apply for the purpose of disposing off the remaining appeal. The assessee has assailed the impugned order on the following grounds of appeal: \"1. On the facts and in the circumstances of the case the notice issued u/s 147 is bad in law since the learned A.0 merely on the basis of information received from CBI, without making any independent inquiries and without application of mind formed an opinion that there is escapement of Income. 2. On the facts and in the circumstances of the case the reopening an assessment completed under Section 143(1) of the Act is without jurisdiction and is merely based on a change of opinion as the appellant had disclosed fully and truly all the material facts at the time of filing of original return of income. 3 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Hence the reassessment made u/s 147 is bad in law, illegal and non-est. 3. On the facts and in the circumstances of the case the CIT(A) erred in sustaining the addition of Rs.16,51,000/- made by the assessing officer u/s. 69A of the Income Tax Act,1961. 4. The addition made u/s 69A of Rs.16,51,000/- is bad in law since the AO himself is not sure whether the amounts received against the sale of property is the income of the assessee or the assessee has accepted cash against the sale of property. 5. On the facts and in the circumstances of the case the order passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961, is bad in law. 6. That the order of the learned CIT(A) is contrary to the facts, law and circumstances of the case. Hence the same need to be set aside. 7. On the facts and in the circumstances of the case the CIT(A) erred in not adjudicating the ground of appeal raised in respect of addition of Rs.2,46,915/- made u/s 69 of the Income Tax Act,1961. 8. The Assessee craves leave to add, amend or alter the grounds of appeal at the time of hearing.\" 3. Succinctly stated, the assessee who is a Central government employee working with the Indian Railways had filed his return of income for A.Y.2015-16 on 16.07.2015, declaring an income of Rs.6,17,630/-. The A.O received information from the Central Bureau of Investigation (CBI), Anti-Corruption Branch (ACB), Nagpur that a case was registered against the assessee, for the reason that he had amassed assets during the period 2003 to 2016 which were disproportionate to his disclosed sources of income. As per the information the assessee along with his spouse, viz. Smt. Dezy Kumar had entered into an \"agreement\" on 27.12.2011 for sale 4 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 of an immovable property, viz. Flat No.GF-401, Sumangal Apartment, Phase-II, Vinoba Nagar, Bilaspur with S/shri Khalid Khan (a property broker who was engaged in construction of buildings) and Khalid Anjum (a property broker) for a consideration of Rs.24,50,000/-. The A.O observed that the assessee at the time of executing the impugned \"agreement to sell\" had received token money of Rs.21,000/- in cash. As per Para 4 of the \"agreement to sell\" dated 27.12.2011 the balance amount of sale consideration was to be paid to the assessee within a period of three years from the date of the agreement, i.e. 27.12.2011. 4. Also, the A.O was informed that the assessee during the year under consideration had received a sum of Rs.5,25,000/-. It was observed by him that the assessee along with his spouse had made an “agreement to sell” with Shri Shiv Sambu Singh, resident of Nagpur for selling his duplex house No.HIG-II/598, Sector 29, Naya Raipur on 19.08.2014 for a consideration of Rs.45,50,000/-. The A.O observed that at the time of executing the “agreement of sell” the assessee had taken Rs.21,000/- as token money with a condition that the purchaser will pay the remaining amount within a period 12 months from the date of execution or at the time of registration of sale deed, which ever was earlier. It was further observed by the A.O that till 20.07.2016, the assessee had received a sum of Rs.18,00,000/- from the purchaser. Accordingly, the A.O observed that the assessee had received an amount of Rs.8,21,000/- [Rs.8,00,000/- (+) 5 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Rs.21,000/-] from Shri Shiv Sambhu Singh. As per information, it was gathered by the A.O that the assessee had borrowed a sum of Rs.7,55,000/- through promissory notes from Shri Ritesh Yadav for the period 07.02.2015 to 01.01.2016. Also, the A.O as per the information observed that the assessee had during the F.Y.2014-15 borrowed a sum of Rs.3,05,000/- through promissory notes. 5. Further, the A.O observed that during the course of the assessment proceedings in the case of the assessee for A.Y.2012-13, the statement of Shri Khalid Khan was recorded u/s.131 of the Act. The A.O observed that the creditworthiness of Shri Khalid Khan (supra) was not proved. The A.O observed that the assessee had received the consideration of the first property on 40 occasions and in a piecemeal manner. The A.O observed that the assessee during the year under consideration had received a part consideration of Rs.5,25,000/- against the first property on 10 occasions with the remarks that the amount was being received as per requirement. 6. The A.O based on the information received from the CBI, ACB, Nagpur culled out the details as regards the amount of Rs.5,25,000/- that was stated to have been paid by Shri Khalid Khan (as Shri Khalid Anjum had exited from the agreement on 05.09.2012) to the assessee during the F.Y. 2014-15 as under: 6 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 S. No. Date F.Y. Amount Aggregate receipt 1. 25.04.2014 2014-15 40000 40000 2. 25.05.2014 2014-15 40000 80000 3. 10.07.2014 2014-15 50000 130000 4. 10.08.2014 2014-15 50000 180000 5. 15.09.2014 2014-15 50000 230000 6. 10.10.2014 2014-15 40000 270000 7. 10.11.2014 2014-15 55000 325000 8. 14.12.2014 2014-15 60000 385000 9. 10.01.2015 2014-15 75000 460000 10. 21.02.2015 2014-15 65000 525000 7. Also, it was observed by the A.O that the assessee had received an amount of Rs.8,00,000/- in lieu of sale of ‘second property’, located at Nagpur during the year under consideration, as under: Sr. No. Date Amount ( in Rs.) 1. 05.12.2014 200000 2. 09.01.2015 100000 3. 13.02.2015 300000 4. 16.03.2015 200000 Total 800000 7 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Accordingly, the A.O based on his aforesaid observations initiated proceedings u/s.147 of the Act. Notice u/s.148 of the Act dated 28.03.2021 was issued to the assessee. 8. Although the assessee in the course of the assessment proceedings submitted that he had received the amount of Rs.5,25,000/- in cash from Shri Khalid Khan (supra) as advance in lieu of sale of the “First Property”, viz. Flat No.GF-401, Sumangal Apartment, Phase-II, Vinoba Nagar, Bilaspur AND an amount of Rs.8,21,000/- from Shri Shiv Shambhu Singh as advance in lieu of sale of second property, viz. Duplex House No. HIG-II, 598, Sector-29, Naya Raipur, but the said explanation did not find favour with the A.O for the following reasons: \"7. Reply of the assessee duly considered and found unacceptable and the cash deposit received by the assessee remained explained as for the following reasons: (i) During the course of assessment proceedings of the assessee for the A.Y.2012-13, Shri Khalid Khan was examined on oath u/s131. While examination it was found that he is not a person having adequate resources. His creditworthiness could not be proved during the course of assessment proceedings. (ii) Further, it is also crucial to mention that the main purpose of Sale of an immovable property is to fetch maximum profit from the investment so made. A seller is always in search of a prospective buyers from whom he may fetch maximum profit if not at least at par with market value. As Sale of a property may be need based or with purpose of further investment. A seller can reasonably expect that transactions of Sale may be concluded on minimum occasions not in a piecemeal manner as happened in this case. Further, being a seller the assessee is getting just Rs.20,000/- to Rs.95,000/- at a time. For the A.Y2015-16 he has just received Rs.5,25,000/- quoting as per requirement is receiving cash from Shri Khalid Khan. Similarly, against the second 8 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 property he has just received a sum of Rs.8,00,000/- in a piecemeal manner. It is hard to digest that why shall a person having income more than Rs.5.00 lac and getting decent salary from Central Government would be engaged in an agreement for merely receiving the consideration of Rs.5,25,000/- and Rs.8,00,000/- in lieu of sale of his two properties located in different cities in a year. Similarly, no prudent person usually approaches before local money lender to borrow money by executing promissory notes. To meet requirement there is a provision of personal loan, loan from friends and relatives etc. There are so many options to meet such personal needs. In such a situation a prudent person cannot entered or engaged such an agreement which prima facie is not beneficial to his interest (iii) The transaction as claimed was nothing but a sham transaction to explain the availability of cash in hand against the allegation leveled by the CBI, Nagpur. As the transactions was an arranged one entire cash received as advance was indeed the own undisclosed money of the assessee which has been colored as advance against property from the broker Shri Khalid Khan.” Accordingly, the A.O observing that the assessee had failed to give any explanation as regards the “nature” and “source” of the cash deposits of Rs.13,46,000/-[ Rs.5,25,000/- (+) Rs.8,21,000/-], held the entire amount as the assessee's unexplained money u/s. 69A of the Act. 9. Also, the A.O observed that the assessee had borrowed a sum of Rs.3,05,000/- from Shri Ritesh Yadav through promissory notes. As the assessee had failed to substantiate the genuineness of the loan received by him on the basis of documentary evidence, therefore, the A.O made an addition of the same u/s. 69A of the Act. 10. Further, as per the bank statement provided by the assessee, it was observed by the A.O that the assessee had made an investment of 9 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Rs.2,46,915/- in mutual fund and shares. The A.O asked the assessee to furnish the completes details of the aforesaid investment made during the subject year, i.e. purchase cost, sale, capital gain/loss, details of demat account with copy of transaction statement and detail of dividend income. As the assessee failed to substantiate the source of the investment, therefore, held the same as unexplained investment u/s. 69 of the Act. Accordingly, the A.O vide his order passed u/s.144 r.w.s. 144B of the Act, dated 19.03.2022, determined the income of the assessee at Rs.24,91,020/-. 11. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: \"7.4 The AO examined the buyer Mr. Khalid Khan and recorded statement on oath u/s. 131 of the Act. The AO observed that is not a person having adequate resources and his creditworthiness is not proved. It was found that after the initial advance, the Appellant is getting only Rs.40,000/- to Rs. 75,000/- at a time, the payments were not made on a specific time schedule and the amount of each instalment is varying. As the primary motive of any sale is to earn maximum profit in a minimum possible time but in the impugned case the Appellant is far away from this carinal aspect. Out of the total sale consideration of Rs. 26.50 lakh, the appellant has received only a sum of Rs.5,25,000/- during the year and that also in ten varying instalments. As the Appellant was unable to offer a satisfactory explanation, the source of funds remain unexplained, the source of funds was not substantiated, the creditworthiness of the source was not established thus the AO made an addition of the amount received during the year ie Rs. 5,25,000/- as deemed income of the Appellant as per the provisions of section 69A of the Act. 10 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 7.5 The AO further opined that the agreement to sale of property Shumagnal Apartment, was nothing but was a sham transactions in attempt to explain the availability of cash in hand against the allegation levelled by the CBI, ACB Nagpur by making a fallacious attempt to give a colour of advance received to the cash in hand found by the CBI, Nagpur. 8. The Appellant submitted an another sale agreement with the similar modus operendi. The Appellant his spouse has made an agreement of sale with Shri Shiv Sambhu Singh, resident of Nagpur for selling his duplex house no. HIG-II/598, Sector-29, Naya Raipur(hereinafter referred as Second property) on 19.08.2014 for a total consideration of Rs.45,50,000/-. At the time of making agreement of sale he has taken Rs.21,000/- as token amount with a condition that the purchaser will pay the remaining amount within a period of 12 months from the date of execution or at the time of registration of sale deed, whichever is earlier, however, till 20.07.2016 from the date of execution of agreement of sale the appellant has received a sum of Rs.8,21,000/- from the purchaser which include a sum of Rs. 21,000/-received at the time of making the agreement. The Appellant has not provided any cogent reason for receiving only a part of the sum which is not in coherence with the term and conditions of the agreement submitted. The AD, therefore added the amount received during the year as unexplained income as per the provisions of section 69A of the Act. 8.1. As per the ITR filed by the appellant for the buyer Shiv Sambhu Singh, having PAN CBRPS8045P filed who his return of income for the A.Y. 2015-16 declaring an income of Rs. 2,62,790/- with not tax paid/ payable. 9. In the impugned case the AO has made independent enquiries, and the findings for the inquiries made and the details of ITR filed by the purchaser for the year under consideration clearly indicates that there is no possibility of any sale from the said buyers and loan providers. As it does not have the credibility, the source of funds are not explained. These surrounding circumstances strengthen the information available with the AD that the nature and source of fund available with the appellant is not explained. 10. In the decision of the Hon'ble Supreme Court in Sumati Dayal Versus CIT 214 ITR 801 SC wherein the Hon'ble Supreme Court pointed out that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probability. Hon'ble Supreme Court in CIT Versus Durga Prasad More 82 ITR 540 SC also 11 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 pointed out similar observations. Further in Section 143 (3) the word used is \"evidence\" which will include circumstantial evidence also and in tax jurisprudence the word evidence has much wider connotation and further the word \"material\" used in Section 143(3) of the Act, showed that the assessing officer not being a court could rely upon material which might not be strictly admissible under the Indian Evidence Act and therefore the assessing officer is not fettered by the technical rules of evidence and would be entitled to act on the \"material\". As per the principle laid down in Sumati Dayal the true nature of transaction can be ascertained from surrounding circumstances and proof beyond reasonable doubt has no applicability in determination of matters under taxing statute. Further the human probability has to be the guiding principle as held by the Hon'ble Supreme Court in Chuhar Mal Versus CIT 86. 11. In view of the above discussion, the undersigned is of considered view that the inference of AO that the appellant has taken bogus entry from the alleged buyer of the property and the sum of Rs.16,51,000/- is deemed as unexplained money u/s 69A of the Income Tax Act, 1961, does not require any interference. Accordingly, the ground of appeal no. 2 and 3 raised by the Appellant is rejected. 12. In the result, the appeal is dismissed.\" 12. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 13. Shri Y.K Mishra, Ld. Authorized Representative (for short 'AR') for the assessee, at the threshold assailed the validity of the jurisdiction that was assumed by the A.O for initiating proceedings u/s.147 of the Act. It was submitted by the Ld. AR that proceedings u/s.147 of the Act were initiated by the A.O without any independent application of mind to the material/information received by him from the CBI, ACB, Nagpur. The Ld. AR submitted that now when it was an admitted fact that the amount of Rs.5,25,000/- and Rs.8,21,000/- received by the assessee during the year 12 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 was an \"advance\" received against sale of the subject properties, therefore, it was incomprehensible as to how the same could have been disclosed as income and offered for tax by the assessee in his return of income for the said year. It was, thus, the Ld. AR's contention that as the proceedings u/s. 147 of the Act were initiated in the case of the assessee based on a view which was factually incorrect and not as per the settled position of law, therefore, the assessment framed by the A.O vide his order u/s. 147 r.w.s. 144B of the Act, dated 19.03.2022 was liable to be struck down on the said count itself. Elaborating on his contention, the Ld. AR submitted that the A.O had merely acted upon the information received from CBI, ACB, Nagpur without carrying out any further inquiry and independently applying his mind to the material based on which the impugned proceedings were initiated by him. The Ld. AR had further drawn my attention to the copy of \"agreement to sell\" dated 27.12.2011, Page 55 to 58 of APB, which revealed that the amount of Rs.5,25,000/- (supra) was received by the assessee during the subject year as an \"advance\" from Shri Khalid Khan (supra), i.e. purchaser of the property. Also, the Ld. AR had drawn my attention to the copy of “agreement to sell” dated 19.08.2014, Page 59 to 61 of APB which revealed that the amount of Rs.8,00,000/- (supra) a/w. token money of Rs.21,000/- was received by the assessee during the subject year as an \"advance\" from Shri Shiv Shambhu Singh (supra), i.e. purchaser of the property. 13 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 14. Apropos the amount of addition of Rs.3,05,000/-, it was submitted by the Ld. AR that as the assessee had not maintained any “books of accounts”, therefore, for the said reason applicability of provisions of Section 69A of the Act were ousted in his case. The Ld. AR in support of his aforesaid contention had drawn my attention to the provisions of Section 69A of the Act. It was submitted by the Ld. AR that where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Elaborating on his contention, the Ld. AR submitted that as the assessee in the present case during the year under consideration had not maintained any books of account, therefore, there was no justification for the A.O to have made the impugned addition u/s. 69A of the Act. The Ld. AR in support of his contention had relied on the judgment of the Hon’ble High Court of Delhi in the case of CIT (International Taxation)-1, New Delhi Vs. Hersh 14 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Washesher Chadha, ITA No.676/2023 dated 12.12.2023 (copy placed on record). 15. Alternatively, the Ld. AR submitted that notice u/s. 148 of the Act was issued by a non-jurisdictional A.O, i.e. ITO, Ward-1(1), Bilaspur who had no jurisdiction over the case of the assessee. Elaborating further on his contention, the Ld. AR submitted that as the jurisdiction over the assessee's case was exclusively vested with the ITO, Ward-3(3), Nagpur, therefore, the impugned assessment on the said count itself was liable to be struck down. The Ld. AR to support his contention had drawn my attention to a letter dated 21.08.2019 issued by ITO, Ward-1(1), Bilaspur to the Pr. CIT, Bilaspur wherein it was stated by him that as the jurisdiction over the assessee was vested with ITO-1(1), Nagpur, therefore, an order u/s. 127 of the Act may be passed and the case be transferred to the said jurisdictional officer. The Ld. AR further submitted that the A.O had grossly erred in law and facts of the case in treating the aforementioned amount aggregating to Rs.16,51,000/- (supra) as the assessee's unexplained money u/s. 69A of the Act. It was submitted by him that as the assessee was not found to be the owner of any money, bullion, jewellery or other valuable article or thing, therefore, the applicability of the provisions of Section 69A of the Act was clearly ousted. 15 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 16. Per contra, Ld. Sr. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was submitted by the Ld. Sr. DR that as the A.O had made the impugned addition after due application of mind to the information/material that was received from the CBI, ACB, Nagpur, therefore, no infirmity arises from the addition made/sustained by the lower authorities. The Ld. DR further submitted that as the assessee had not raised any objection as regards the jurisdiction assumed by the A.O who based on notice u/s.148, dated 28.03.2021 had framed the assessment u/s.147 r.w.s. 144B of the Act, dated 19.03.2022, therefore, he could not now raise the said objection as per the mandate of Section 124(3) of the Act. Alternatively, the Ld. DR submitted that as per the PAN data base the assessee had provided the address of Bilaspur. The Ld. DR had placed on record a report dated 21.08.2024 filed by the ITO-1(1), Bilaspur along with a letter dated 05.11.2019 of the ITO, Ward-2(3), Nagpur. 17. Shri Anjani Kumar Singh, ITO, Ward-1(1), Bilaspur as per the directions of the Bench had put up an appearance to clarify certain issues. The A.O on specifically being queried about the reply to the letter dated 23.10.2018 that was received from the CBI, ACB, Nagpur, wherein it was, inter alia, queried by the Investigating Agency as to whether the transaction of sale of Flat No.GF-401, Sumangal Apartment, Phase-II, Vinoba Nagar, Bilaspur by Shri Ajay Kumar (assessee) and Smt. Dezy 16 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 Kumar (assessee's wife) were to be considered as income of the assessee as per the Income Tax Act, had drawn my attention to his letter dated 08.05.2024 that was filed before me wherein it was stated that no such reply to the aforesaid letter of CBI, ACB, Nagpur was filed by his predecessor. For the same of clarity, the same is culled out as under: 18. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 17 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 19. As the assessee has assailed the validity of the jurisdiction assumed by the A.O for initiating proceedings u/s. 147 of the Act, therefore, I shall first deal with the same. 20. It is the Ld. AR's claim that the impugned proceedings u/s. 147 of the Act initiated by the A.O suffers from two-fold infirmities, viz. (i) that the impugned proceedings had been initiated based on misconceived facts; and (ii) that the A.O had failed to apply his independent mind to the material/information received from the CBI, ACB, Nagpur. For the sake of clarity, the \"reasons to believe\" based on which proceedings u/s. 147 of the Act were initiated are culled out as under: 18 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 19 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 20 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 21 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 22 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 21. I have perused the \"reasons to believe\", based on which, the A.O had initiated proceedings u/s. 147 of the Act in the case of the assessee for the year under consideration, i.e. A.Y.2015-16. I am unable to concur with the Ld. AR that the A.O had failed to indispensably apply his mind to the information that was received by him from CBI, ACB, Nagpur vide letter dated 23.10.2018 regarding the case bearing No.RC0282016A0010 /CBI/NGP registered against the assessee for amassing of assets disproportionate to his known source of income. After perusing the “reasons to believe”, I am of a firm conviction that the A.O after independent application of mind to the aforesaid information shared by the CBI, ACB, Nagpur, had arrived at a bonafide belief that the income of the assessee chargeable to tax had escaped assessment u/s. 147 of the Act. I am unable to subscribe to the Ld. AR's claim that the A.O had failed to independently apply his mind to the material/information so received. On a careful perusal of the \"reasons to believe\", it transpires that the A.O had deliberated at length on the information shared with him by CBI, ACB, Nagpur, and had only after analyzing the same had formed a bonafide belief that the income of the assessee chargeable to tax had escaped assessment. As observed by the Hon’ble Apex Court in the case of Raymond Woollen Mills Ltd. Vs. Income-Tax Officer And Ors. (1999) 236 ITR 34 (SC), what is required for validly initiating proceedings u/s.147 of the Act is the availability of some material on the basis of which 23 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 the department could reopen the case and the sufficiency and correctness of the said material is not a thing to be considered at the stage of reopening. Accordingly, in the backdrop of the judgment of the Hon’ble Apex Court in Raymond Woolen Mills Ltd. (supra), the challenge thrown by the Ld. AR to the validity of the jurisdiction assumed by the A.O u/s 147 of the Act, on the ground that the same was based on misconceived facts, being devoid and bereft of any merit is rejected. Also, I find that the A.O had applied his mind to the material/information received by him from the CBI (Nagpur), ACB for arriving at a bonafide belief that the income of the assessee chargeable to tax for the subject year had escaped assessment. 22. Apropos the claim of the Ld. AR that as the impugned proceedings had been initiated based on notice u/s. 148 of the Act issued by a non- jurisdictional A.O, i.e. ITO-1(1), Bilaspur who had no jurisdiction over the case of the assessee, therefore, the consequential assessment so framed by him vide his order u/s. 147 r.w.s. 144B of the Act, dated 19.03.2022 is liable to be struck down on the said count itself, I am unable to concur with the same. As per sub-section (3) of Section 124 of the Act no person, inter alia, shall be entitled to call in question the jurisdiction of the A.O after expiry of one month from the date, on which, he was served with the notice under sub-section (2) of Section 143; or after completion of the assessment, whichever is earlier. As the assessee in the present case before me at no stage of the assessment proceedings had objected to the 24 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 jurisdiction of the ITO-1(1), Bilaspur who had issued notice u/s. 148 of the Act, therefore, he is precluded from assailing the validity of the jurisdiction in the course of the present proceedings. Accordingly, the challenge thrown by the A.O as regards the validity of the jurisdiction assumed by the A.O for framing the assessment being devoid and bereft of any merit is rejected. Thus, the Grounds of appeal Nos. 1, 2, & 5 raised by the assessee are dismissed in terms of the aforesaid observations. 23. I shall now deal with the contention of the Ld. AR that the A.O had grossly erred in law and facts of the case in treating the amount of Rs.16,51,000/- as the assessee's unexplained money u/s.69A of the Act. Before proceeding any further, I think it apt to cull out Section 69A of the Act, which reads as under: \"69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\" 24. As the assessee himself had stated to be in receipt of cash amounting to Rs.13,46,000/- during the subject year from two persons, viz. (i) Shri Khalid Khan:Rs.5,25,000/-;and (ii) Shri Shiv Shambhu Singh: Rs.8,21,000/-, therefore, the A.O after rejection of his explanation as 25 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 regards the source of the same, in my view, had rightly observed that the assessee was the “owner” of the said amount. As the assessee is found to be the owner of the aforementioned amounts of money, the source of which, he had failed to come forth with any satisfactory explanation, therefore, I find no infirmity in the views taken by the A.O who had rightly held the said amount as the unexplained money of the assessee under Section 69A of the Act. 25. Apropos the merits of the addition made by the A.O, I have thoughtfully considered the observations of the lower authorities and concur with the view taken by them. On a perusal of the assessment order, I find that the A.O had rejected the explanation of the assessee that the cash amount aggregating to Rs.13.46 lacs (supra) [Rs.5.25 lacs (+) Rs.8.21 lacs] was received by him as advance sale consideration (in part) during the year under consideration from Shri Khalid Khan and Shri Shiv Sambhu Singh, for the following reasons:- \"7. Reply of the assessee duly considered and found unacceptable and the cash deposit received by the assessee remained explained as for the following reasons: (i) During the course of assessment proceedings of the assessee for the A.Y.2012-13, Shri Khalid Khan was examined on oath u/s131. While examination it was found that he is not a person having adequate resources. His creditworthiness could not be proved during the course of assessment proceedings. (ii) Further, it is also crucial to mention that the main purpose of Sale of an immovable property is to fetch maximum profit from the investment so made. A seller is always in search of a prospective buyers from 26 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 whom he may fetch maximum profit if not at least at par with market value. As Sale of a property may be need based or with purpose of further investment. A seller can reasonably expect that transactions of Sale may be concluded on minimum occasions not in a piecemeal manner as happened in this case. Further, being a seller the assessee is getting just Rs.20,000/- to Rs.95,000/- at a time. For the A.Y2015-16 he has just received Rs.5,25,000/- quoting as per requirement is receiving cash from Shri Khalid Khan. Similarly, against the second property he has just received a sum of Rs.8,00,000/- in a piecemeal manner. It is hard to digest that why shall a person having income more than Rs.5.00 lac and getting decent salary from Central Government would be engaged in an agreement for merely receiving the consideration of Rs.5,25,000/- and Rs.8,00,000/- in lieu of sale of his two properties located in different cities in a year. Similarly, no prudent person usually approaches before local money lender to borrow money by executing promissory notes. To meet requirement there is a provision of personal loan, loan from friends and relatives etc. There are so many options to meet such personal needs. In such a situation a prudent person cannot entered or engaged such an agreement which prima facie is not beneficial to his interest (iii) The transaction as claimed was nothing but a sham transaction to explain the availability of cash in hand against the allegation leveled by the CBI, Nagpur. As the transactions was an arranged one entire cash received as advance was indeed the own undisclosed money of the assessee which has been colored as advance against property from the broker Shri Khalid Khan.” As the assessee had failed to substantiate the authenticity of his claim as regards the source of the aforesaid cash receipts aggregating to Rs.13.46 lacs (supra), therefore I find no infirmity in the view taken by the lower authorities who have rightly held the same as unexplained money u/s. 69A of the Act. The claim of the assessee of receiving the entire sale consideration in lieu of sale of the subject property in 38 installments over a period of 41/2 years for his property, viz. Flat No.GF-401, Sumangal Apartment, Phase-II, Vinoba Nagar, Bilaspur years does not inspire any confidence as regards the veracity of the \"agreement to sell\". Apart from 27 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 that, the fact that the assessee had claimed to have executed a similar “agreement to sell” of his another property , viz. House No.HIG-II/598, Sector-29, Naya Raipur, wherein the sale consideration was to be received in 8 installments over a period 1/1/2 years (approx.), supports the observation of the A.O that the said \"agreements to sell\" were arranged transactions executed by the assessee to meet out the allegations levelled against him by the CBI ( Nagpur), ACB. Be that as it may, as the assessee had failed to prove to the satisfaction of the A.O his claim of having received the amount of Rs.13,46,000/- as an advance in lieu of sale of the subject properties, therefore, the same had rightly been held as his unexplained money u/s. 69A of the Act. I, thus, in terms of my aforesaid observations, finding no infirmity in the view taken by the lower authorities, sustain the same. Thus, the Grounds of appeal Nos.3 & 4 (to the extent relevant) raised by the assessee are dismissed in terms of the aforesaid observations. 26. I shall now deal with the contention of the Ld. AR that both the lower authorities had grossly erred in making/sustaining the addition of Rs.3,05,000/- made by the A.O u/s. 69A of the Act. 27. Ostensibly, the assessee had borrowed sum of Rs.3,05,000/- from Shri Ritesh Yadav through promissory notes. As the assessee in the course of the assessment proceedings despite specific directions had failed to 28 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 place on record documentary evidence to substantiate the authenticity of the aforesaid transaction, viz. PAN, address of the lender, purpose/utilization of the loan amount and documents evidencing repayment of loan, rate of interest, total interest paid during the year and confirmation of the lender a/w. return of income and bank statement, therefore, the A.O held the entire amount of Rs.3,05,000/- as assessee’s unexplained money of the assessee u/s. 69A of the Act. 28. I have thoughtfully considered the contentions advanced by the Ld. AR in the backdrop of the judicial pronouncement that have been pressed into service by him. I find that though the assessee had assailed the addition made by the A.O of Rs.3,05,000/- u/s. 69A of the Act (forming part of Rs.16,51,000/-) before the CIT(Appeals) but the same had not been adjudicated by him. Although the CIT(Appeals) had upheld the addition u/s. 69A of Rs.16,51,000/- (supra), but he had failed to address the very basis on which, the addition of Rs.3,05,000/- (supra) was made by the A.O. Accordingly, I am of the view that the matter in all fairness regarding the addition of Rs.3,05,000/- (supra) requires to be restored to his file for fresh adjudication. Thus, the Grounds of appeal Nos.3 & 4 (to the extent relevant) is allowed for statistical purposes in terms of the aforesaid observations. 29 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 29. Apropos the addition of Rs.2,46,915/- made by the A.O regarding the investment made by the assessee towards mutual fund and shares, I find that as the assessee had failed to place on record the requisite details as were called for by the A.O, viz. purchase cost, sale, capital gain/loss, details of demat account with copy of transaction statement and detail of dividend income, therefore, the A.O held the same as unexplained investment of the assessee u/s. 69 of the Act observing as under: “11. As per bank statement provided by the assessee, there is consideration of Rs.2,46,915/- through investment in Mutual Fund and Share. Vide notice u/s.142(1) of the Act, the assessee was asked to furnish the complete details of investment made during the year i.e. purchase cost, sale, capital gain/loss, detail of Demat account with copy of transaction statement, detail of dividend income received. 11.1 Further, the show cause notice with draft assessment order was shared with assessee on 14.03.2022. Assessee submitted his reply on 17.03.2022. However, the reply was not found tenable as assessee has only provided the bank statement reflecting the sales proceeds received. However, all other information asked regarding the investments is not provided. In absence of any reply /explanation/documentary evidences, it is hard to prove the genuineness and creditworthiness of the investment made by the assessee during the year. Therefore, amount of Rs.2,46,915/- taken as investment remained unexplained and disallowed u/s. 69 of the Act. Further added to / the total income of the assessee.” 30. As is discernible from the records the assessee had not assailed the addition of Rs.2,46,915/- made by the A.O u/s. 69 of the Act before the CIT(Appeals), therefore, the same does not emanate from the impugned order before me. As the addition of Rs.2,46,915/- made by the A.O u/s. 69 of the Act does not arise from the impugned order of the CIT(Appeals) 30 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 before me, therefore, I refrain from dealing with the said issue raised by the assessee before me. Thus, the Grounds of appeal Nos. 6 & 7 raised by the assessee is dismissed in terms of the aforesaid observations. 31. Ground of appeal No.8 being general in nature is dismissed as not pressed. 32. In the result, appeal of the assessee in ITA No.230/RPR/2022 for A.Y.2015-16 is partly allowed for statistical purposes in terms of the aforesaid observations. ITA No.231/RPR/2022 A.Y. 2016-17 33. As the facts and issues involved in the captioned appeal filed by the assessee qua the Grounds of appeal No.5 (to the extent relevant) remains the same as were there before me in the aforementioned appeal vide Ground of appeal Nos.3 & 4, in ITA No.230/RPR/2022 for assessment year 2015-16, therefore, my order therein passed while disposing off the said appeal shall apply mutatis-mutandis for disposing off the captioned appeal, i.e., ITA No. 231/RPR/2022 for A.Y.2016-17. In this case also, I, find no infirmity in the view taken by the lower authorities, and, thus, sustain the addition of Rs.7,51,000/-made by the A.O u/s. 69A of the Act. Thus, the Ground of appeal No.5 (to the extent relevant) raised by the assessee is dismissed in terms of the aforesaid observations. 31 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 34. As Grounds of appeal Nos.1, 2, & 3 raised by the assessee in ITA No.231/RPR/2022 for A.Y.2016-17 are similar to the Grounds of appeal No.1, 2, & 5 raised in ITA No. 230/RPR/2022 for A.Y.2015-16, therefore, my adjudication rendered on the aforesaid issue in ITA No.230/RPR/2022 shall apply mutatis mutandis for the year under consideration, i.e. A.Y.2016-17. Thus, the Grounds of appeal Nos. 1, 2, & 3 raised by the assessee are dismissed. 35. As Ground of appeal No.5 (to the extent relevant) qua the addition of Rs.4,50,000/- raised by the assessee in ITA No.231/RPR/2022 for A.Y.2016-17 is similar to the Grounds of appeal Nos. 3 & 4 (to the extent relevant) raised in ITA No. 230/RPR/2022 for A.Y.2015-16, therefore, my adjudication rendered on the said issue in ITA No.230/RPR/2022 shall apply mutatis mutandis for the year under consideration, i.e. A.Y.2016-17. Thus, the Ground of appeal No. 5 (to the extent relevant) raised by the assessee is allowed for statistical purposes. 36. Apropos the Ground of appeal No.4, I find that as the assessee despite having been afforded sufficient opportunity had failed to participate in the proceedings before him, therefore, the latter was constrained to dispose off the appeal on the basis of submissions and records available before him. Accordingly, I am unable to persuade myself to subscribe to the contention of the Ld. AR that the CIT(Appeals) had 32 Shri Ajay Kumar Vs. ITO, Ward-1(1), Bilaspur ITA Nos. 230 & 231/RPR/2022 passed the order without affording a sufficient opportunity to the assessee. Thus, the Ground of appeal No.4 raised by the assessee is dismissed in terms of the aforesaid observations. 37. In the result, appeal of the assessee in ITA No.231/RPR/2022 for A.Y.2016-17 is partly allowed for statistical purposes in terms of the aforesaid observations. 38. Resultantly, both the appeals of the assessee are partly allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in the open court on 08th October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated 08th October, 2024 *****SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "