SHRI NARENDRA LAKHI,JAIPUR vs. DCIT, CENTRAL CIRCLE-3, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 52/JP/2021 fu/kZkj.k o"kZ@Assessment Year : 2016-17 cuke Shri Narendra Lakhi The DCIT, Vs. 75, Gopal Ji Ka Rasta, Central Circle-3, Johari Bazar, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AARPL 0856 E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri B. K. Gupta (Pr.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/10/2021 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/10/2021 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 28.05.2021 of ld. CIT(A)-4, Jaipur for the assessment year 2016-17. The assessee has raised the following grounds:- “1. The ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 54,50,000/- made by the AO on account of alleged investment in purchase of land at village Jamdoli only on assumption and presumption without bringing any material on

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

record that such payment is made in the year under consideration. She has further erred in confirming the addition without considering the fact that due to family disputes of seller the transaction has not yet materialized and therefore, no such payment has been made. 1.1. The ld. CIT(A) has erred on facts and in law in confirming the addition by holding that as per the sale agreement actual possession of the property has been given to the assessee and therefore, addition in the year under consideration is justified ignoring that the sale agreement is dt. 30.04.2008, assessee is not yet in the possession of property and there is no evidence that payment of Rs. 54.50 lacs has been made in the year under consideration.” 2. The appellant craves to alter, amend and modify any ground of appeal. 3. Necessary cost be awarded to the assessee.” 2. Due to prevailing COVId-19 pandemic condition the hearing of

the appeal is concluded through video conference.

case of the assessee. The dispute in the present appeal is regarding

addition made by the AO while framing assessment U/s 143(3) r.w.s

153B(1)(b) of the Income Tax Act on account of unexplained

investment for purchase of land vide agreement dated 30.04.2008

found during the course of search and seizure action. The Assessing

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

Officer has noted that as per said agreement the assessee agreed to

purchase the property situated at village Jamdoli, Agra Road, Jaipur for

a total consideration of Rs. 85,51,000/- from Shri Dayal Chetwani.

Further, it is stated in the agreement that the assessee paid Rs.

24,00,000/- in cash and Rs. 1,51,000/- through cheque to the seller at

the time of the agreement. Further a sum of Rs. 5,50,000/- was to be

paid by the assessee in the next month of the agreement i.e. May,

2008. The balance amount of Rs. 54,50,000/- was to be paid by the

assessee before the registration sale deed therefore, the AO has

considered the said amount of Rs. 54,50,000/- as unaccounted

payment/expenditure to be assessed for the year under consideration.

The assessee challenged the action of the AO before the ld. CIT(A) and

contended that due to the dispute between the family members, the

seller could not execute the sale deed and therefore, the transaction

was not materialized and the balance payment was not paid by the

assessee till date. The assessee contended that in the absence of any

record to show that the assessee has paid the balance payment the

same cannot be treated as unaccounted expenditure or investment for

the year under consideration. The ld. CIT(A) did not accept the

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

contention of the assessee and confirmed the addition made by the AO

while passing the impugned order.

the Assessing Officer has accepted that the payment to the extent of

Rs. 29,50,000/- apart from the cheque payment of Rs. 1,51,000/-

pertains to the assessment year 2009-10 and the same cannot be

added for the year under consideration. He has further submitted that

the Assessing Officer has recorded this fact that the time period of

payment of balance amount of Rs. 54,50,000/- is not known but the

same is held to be unaccounted expenditure made by the assessee for

the purpose of investment in the property during the current year.

Therefore, the addition is made by the AO only on the basis of

assumption and presumption of payment made by the assessee during

the year without any incriminating material. There was no material or

basis to presume that against the agreement dated 30.04.2008 the

assessee paid the alleged amount of Rs. 54,50,000/- during the year

under consideration. It is settled law that for the purpose of making

addition on account of unexplained investment U/s 69 of the I.T. Act

the burden to prove that such investment has been made and that too

in a particular year is on the person who alleges so. Neither the AO nor

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

the ld. CIT(A) has brought any evidence on record to effect that the

investment of Rs. 54,50,000/- has been made by the assessee during

the year under consideration. Thus the addition without any evidence

and without discharging the burden to prove is unjustified and uncalled

for and liable to be deleted. In support of this contention he has relied

on the following decisions:- • PCIT Vs Vivek Prahladbhai Patel (2016) 237 Taxman 331. • CIT Vs Agile Properties (P) Ltd. (2014) 107 DTR 201. • CIT Vs Khandelwal shringi & Co. (2017) 159 DTR 59. • ACIT Vs Govindbhai N. Patel (2015) 2015 Taxman 575.

was owned by Late Shri Harish Kumar who has also executed a will

dated 12.07.2006 in favour of one Kumari Veena Shah. There was

dispute between family members of the deceased regarding inheritance

of the property through the will and the case was filed in the court of

Ld. Additional and District Sessions Judge, Jaipur. Therefore, it is

evident from the court record and order dated 22.02.2014 of the ld.

Additional and District Sessions Judge that there was dispute between

family members of deceased Late Shri Harish Kumar. The assessee

explained these facts that due to the dispute between family members

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

of the seller transaction could not materialis and no payment other than

paid at the time of agreement was made by the assessee.

order of the Ld. Additional and District Sessions Judge is concerned it is

not clear whether this property was part of the dispute in the case

before the court. Even otherwise this is an additional evidence which

was not produced before the authorities below. He has further

submitted that the AO as well as ld. CIT(A) has recorded that the

assessee surrendered income of Rs. 24,00,000/- being the amount paid

by the assessee at the time of execution of the agreement and

therefore, in the absence of any record to show that the transaction

was not concluded and the assessee has not paid the balance amount it

is a natural corollary to treat the balance amount of the purchase

consideration as unaccounted payment made by the assessee. He has

relied upon the orders of the AO as well as ld. CIT(A).

material available on record. There is no dispute that during the course

of search and seizure an agreement dated 30.04.2008 regarding

purchase of the property by the assessee from one Shri Dayal Chetwani

was found showing the total purchase consideration of the land at Rs.

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

84,00,000/- the said agreement to show that the assessee paid Rs.

24,00,000/- in cash and Rs. 1,51,000/- vide cheque dated 30.04.2008

out of the total consideration and the balance amount of Rs.

60,00,000/- was to be paid by the assessee subsequently. The said

agreement further, enumerates time and manner of payment by the

assessee regarding the balance amount of Rs. 60,00,000/- out of which

a sum of Rs. 5,50,000/- was to be paid within a month from the

agreement, Rs. 25,00,000/- was to be paid to the Oriental Bank of

Commerce to discharge the mortgage loan taken on this property and

the balance of Rs. 29,50,000/- was to be paid at the time of registration

of sale deed. Even otherwise without discharging the charge of

mortgage with the bank the property could not be transferred through a

registered sale deed. So far as the payment of Rs. 24,00,000/- in cash

and Rs. 1,51,000/- by cheque is concerned there is no dispute

regarding the said payment as it is paid at the time of agreement dated

30.04.2008 and the assessee has accepted the same. The Assessing

Officer has also recorded this fact that the said amount of Rs.

24,00,000/- paid at the time of agreement and Rs. 5,50,000/- was to

be paid in the next month of the agreement pertains to the assessment

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

year 2009-10. The relevant part of the order at page 3 of the

assessment order reads as under:-

“It is observed that as per the agreement, the assessee made the payment of Rs. 31.01 lakhs in thy AY 2009-10 against the transaction, while the period of balance payment of Rs. 54,50,000/- is not known. Since, the unaccounted payment of Rs. 24 lakhs & Rs. 505 lakhs pertains to the AY 2009-10, the same cannot be added in the year under consideration. However, with respect to the unaccounted expenditure of Rs. 54,50,000/-, since the time period of the payment of this amount is not known and also not disclosed by the assessee, the same is held to be the unaccounted expenditure made by the assessee for the purpose of investment property during the current year and accordingly, added to his total income for the AY 2016-17. Penalty proceedings u/s 271AAB(1)(c) are initiated due to concealment of income spent towards making investment in property.”

Therefore, the AO has not made any addition in respect of the payment

of Rs. 24,00,000/- in cash at the time of agreement and further of Rs.

5,50,000/- was to be paid in the next month of the agreement. Except

this agreement dated 30.04.2008 there was no other material found

during the course of search to show that the assessee has made the

balance of purchase consideration to the seller. The assessee explained

before the AO well as ld. CIT(A) that due to the dispute between family 8

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

members to the seller the transaction did not materialize and no

payment other than paid at the time of agreement was made by the

assessee. The AO has also accepted this fact that there was no material

to show that the balance payment was made by the assessee and even

the time period of the alleged payment. In support of his presumption

the AO has not referred any evidence or material. Once there was no

material available with the AO to show that the assessee has made the

payment of the balance purchase consideration of Rs. 54,50,000/- the

addition cannot be made on the basis of presumption. The Assessing

Officer instead of conducting any enquiry to find out the correct facts

about the alleged payment has proceeded only on the basis of

assumption and presumption regarding the alleged payment of Rs.

54,50,000/-. Further, he has also assumed that the payment has been

made during the year under consideration. In the absence of any

material or other facts to indicate that the alleged payment was made

by the assessee and that too in the year under consideration the

addition made by the AO merely on the basis of assumption and

presumption has not justified. The ld. CIT(A) has confirmed the addition

made by the AO by giving the reasons that the assessee has not

explained the details of payment. It is pertinent to note that once the

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT

assessee has denied any payment except the payment made by the

assessee at the time of agreement, the assessee is not supposed to

produce any evidence of non existing transaction. Further as per terms

of the agreement the assessee was to pay Rs. 25,00,000/- for discharge

of loan amount against the property and once this payment is not made

by the assessee to discharge the property in question from the

mortgage charge of the bank which is matter of record then it cannot

be presumed that the assessee has made the said payment. The

Assessing Officer instead of discharging his duty to bring any material

on record to show that the assessee has made unaccounted payment

during the year under consideration the addition made purely on the

basis of presumption it is not justified and the same is liable to be

deleted. Accordingly the addition made by the AO is deleted.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 28/10/2021.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/10/2021.

ITA No.52/JP/2021 Shri Narendra Lakhi vs. DCIT *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Narendra Lakhi, Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Central Circle-3, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 52/JP/2021} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत