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Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI ANUBHAV SHARMA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld. CIT(A) – 30, New Delhi dated 19.05.2022 pertaining to Assessment Year 2012-13.
The grievances of the assessee read as under:
“1. The learned CIT(A) erred in law and on facts in rejecting the contention of the appellant that the impugned assessment order is bad in law ab initio and non est as the same does not bear the mandatory DIN thereon nor it has been regularized as per the circular no. 19 dated 14/08/2019 issued by the CBDT, application of which is mandatory w.e.f. 15/10/2019. Thus, the same must be quashed as non est and void ab initio.
2. The CIT(A) erred in law and on facts in ignoring that the AO passed the impugned assessment order without considering the submissions of the assessee and the information filed on her record during the assessment proceedings as well as during the post search proceedings before the investigation unit. In fact, the AO has completely ignored the said information by not mentioning even a single word in respect thereof. Thus, the said assessment order must be annulled.
The CIT(A) erred in law and on facts in ignoring that the AO made the impugned addition and applying cut and paste method there as the female assessee has been referred to as a male assessee in para 7, proving non-application of mind and the same must be quashed.
4. The impugned assessment order is bad in law and on facts as it is based on a mechanical approval u/s 153D of the Act given by the Addl. CIT without application of his mind as a supervisory authority on the subject and the material available on the record. Thus, the same must be quashed.
5. The learned CIT(A) erred in law and on facts in confirming an addition of Rs 68,00,000/- u/s 69 of the Act ignoring that the assessee being an individual was not required to maintain any books of account under the law and therefore, was not under legal compulsion to record any said transaction by maintaining any books of account. Thus, the addition made on an illegal presumption must be deleted.
6. The learned CIT(A) erred in law and on facts in confirming the addition of Rs 68,00,000/- for investment made in cash to acquire a residential flat for Rs 98,00,000/- during the relevant period though the sources of the said investment in cash on sale of the bullion and receipt of the same were duly explained with supporting affidavits but ignored in toto by the AO & CIT(A). Therefore, the addition made on surmise and conjectures must be deleted.
7. The learned C1T(A) erred in law and on facts in not granting exemption u/s 54F of the Act for investment of the entire sale consideration of the bullion sold during the relevant period and invested in acquisition of the said residential flat as the appellant did not have any other residential property till the date of purchase of said flat. Thus, the said exemption claimed u/s 54F of the Act must be allowed.
8. The learned CIT(A) erred in law and on facts in not giving any finding on applicability of the provisions of the section 115BBE of the Act for this assessment year though the said section was legislated w.e.f. the next subsequent AY 2013-14 and was not in the statute during the relevant period, proving non- application of mind in toto by the AO while passing the assessment order which must be quashed.
9. The CIT(A) erred in law and on facts in just brushing aside the GOA that the AO passed the impugned assessment order on extraneous reasons and not the facts placed on her record during the assessment proceedings which attracts annulment of the same.
10. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing.”
3. Briefly stated, the facts of the case are that a search and seizure action under section 132 of the Income Tax Act. 1961 (hereinafter referred to as the "Act") was carried out on 14.10 2020 in the case of Shri Manoj Kumar Singh, his associates and various transacting parties.
During the course of search proceedings it was established that Shri Manoj Kumar Singh entered into unaccounted cash transactions with the various persons/entities. The premises/locker of the assessee was also covered during the search operations. Accordingly, notice u/s 153A of the Act was issued and served upon the assessee, in response to which, the assessee e-filed her return of income on 23.02.2022 at an income of Rs 2,42,070/-
Returned income consisted of income from house property, capital gains and income from other sources. During the course of search proceedings at the residence of the husband of the assessee, part payment receipt dated 21.05.2011 for purchase of property at Rohini, Delhi was found and seized. As per the said part payment receipt, the said flat was purchased by the assessee for a total consideration of Rs. 98 lakhs.
However, on perusal of the sale deed, it was found that the said property was purchased for a total consideration of Rs. 30,00,000/- only. When the said difference was confronted to the assessee, the assessee in her statement recorded on oath u/s 132(4) of the Act submitted that she is not aware of the said deal and that all the matters pertaining to the said deal were handled by her husband.
The assessee was again provided an opportunity to explain the difference and she explained that the said sum of Rs. 68 lakhs was sourced by sale of 2 kgs of gold received by way of inheritance and 1.05 kg gold as part of Stridhan. Since the entire proceeds from sale of gold was used for acquiring residential house, no capital gain arose.
The Assessing Officer dismissed the reply of the assessee treating the same to be a fictional story.
The Assessing Officer concluded assessment by making addition of Rs. 68 lakhs.
The assessee challenged the matter before the ld. CIT(A) but without any success.
Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel for the assessee that once the assessee has accepted in her statement on oath that she was not aware of the transaction and her husband has paid the money and when the husband was confronted with this, he accepted that he has paid the money, the assessee has successfully discharged the source of investment and, therefore, any action need to be taken should be taken in the hands of the husband of the assessee and not the assessee.
12 Per contra, the ld. DR strongly supported the findings of the Assessing Officer and vehemently stated that if that be so, then why the assessee tried to explain the source of investment as proceeds from sale of gold ornaments. It is the say of the ld. DR that the assessee has grossly failed in discharging the initial burden cast upon her to explain the source of investment.
13 We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the impugned property was purchased in the name of the assessee and as per the sale deed, consideration was Rs. 30 lakhs. It is also not in dispute that a document was found and seized from the premises of the husband of the assessee which showed that transaction was for Rs. 98 lakhs and, therefore, it becomes incumbent upon the assessee to explain the source of investment of Rs. 68 lakhs.
There is no dispute that in her statement recorded on oath u/s 132(4) of the Act which is binding on her, she had categorically stated that she is not aware of the transaction and her husband has paid the money.
15 Interestingly, the statement of the husband of the assessee was also recorded u/s 132(4) of the Act on the very same day and in his statement, the husband of the assessee emphatically accepted that he has paid the sum of Rs. 68 lakhs for purchase of the impugned property in the name of his wife. There is no quarrel that the assessee was not having any independent source of income other than house property, capital gain and other sources.
In our considered opinion, when at the very first moment of search proceedings the assessee has categorically admitted that payment was done by her husband and on the very same moment, the husband also admitted that he has made the payment, then it can be safely concluded that the wife, i.e. the assessee, has successfully discharged the onus cast upon her to explain the source of investment of Rs. 68 lakhs.
In so far as the husband of the assessee is concerned, the Revenue was/is free to take any action as per the provisions of law.
Considering the facts of the case in totality, addition of Rs. 68 lakhs is not sustainable in the hands of the assessee and the Assessing Officer is directed to delete the same.
Since other grounds were not seriously contested by the ld. counsel for the assessee, they are dismissed as not pressed.
In the result, the appeal of the assessee in is partly allowed.
The order is pronounced in the open court on 13.01.2023.