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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI PRADIP KUMAR KEDIA
order of the CIT(A)-1, Ahmedabad (‘CIT(A)’ in short), dated 23.03.2015 arising in the assessment order dated 30.03.2013 passed by the Assessing Officer under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2010-11.
[ITO vs. M/s. Chintu Realities Pvt. Ltd.] A.Y. 2010-11 - 2 -
The grounds of appeal of the Revenue reads as under:-
“(1) The ld. CIT(A) has erred in law and on facts in admitting additional evidences and on that basis deleting the addition of Rs. 99,67,268/- for unexplained investment and addition of Rs. 2,52,37,140/- as unexplained income on sale of properties. (2) The ld. CIT(A) has not appreciated the fact that the assessee has not explained the circumstances that prevented it from producing the information called for.”
None appeared for the assessee. It is seen from the record that despite several opportunities, the assessee has remained recalcitrant and did not turn up in compliance of the statutory notices of hearing.
In the circumstances, we are constraint to proceed ex-parte in the absence of the assessee.
Briefly, stated in the course of assessment proceeding, the AO took note of certain transactions of immovable property as reflected in the AIR information replied in the departments data base. It was noticed that as per the AIR information, the assessee has purchased immovable properties aggregating to Rs. 99,67,260/- and has also sold immovable properties carrying transaction value of Rs. 2,52,37,140/-. In the absence of explanation offered in respect of such transactions, the AO invoked the provisions of the Act and added Rs. 99,67,260/- towards unexplained investment and Rs. 2,52,37,140/- towards unexplained income on sale of properties.
The total income returned by the assessee at Rs. 9,43,850/- was thus assessed at Rs. 3,61,48,250/-.
[ITO vs. M/s. Chintu Realities Pvt. Ltd.] A.Y. 2010-11 - 3 -
Aggrieved, assessee preferred the appeal before the CIT(A).
Before the CIT(A), the assessee inter alia contended that the assessee is dealing in land transaction as stock-in-trade and purchase and sale of the respective transactions being performed are accounted for in the respective year. The CIT(A) after taking note of written submissions made by the assessee as well as the remand report of the AO dislodged the aforesaid additions in following terms:-
“5. I have perused the facts of the case as enumerated by A.O. and as submitted by appellant. After careful consideration of facts, submission and contention of both A.O. as well as of appellant, ground wise adjudication is as follows: 5.1. Before adjudication of ground, the first & for most requirement is adjudication of admission of additional evidences. The A.O. in the impugned order recorded that appellant furnished the audit report in form no. 3CD alongwith its enclosures as required under 44AB of the Act and books of accounts were produced which were examined. Both the addition made by A.O. are on account of AIR information in this case related to purchase & sale of immovable properties. The A.O. on verification of details & reply from appellant held that “It is not clear that the transaction reflected in AIR have been accounted for in the books of account or no”. The appellant before my predecessor in appeal vide letter dt. 03/07/2014 (submitted on 15/07/2014) contended that since additions are based on AIR information related to purchase & sale of immovable properties and there being difference in some amount with respect to figures of purchase/sale reported by sub registrar, Anand in the AIR hence to evidence the bona fide of appellant a certified copy under Rule 114(b) reflecting true nature with other details was requested from sub Registrar Anand which was supplied by him to appellant at 5 PM of 30/03/2013 but by that time the A.O. already passed the order on 30/03/2013. When such evidences were submitted to A.O. who refused to admit since he already passed the order. Now these evidences be admitted as additional evidences. It was also contended that A.O. had called such details u/s. 133(6) of the Act on 24/03/2013 directly from sub Registrar Anand but he also did not received the same before-passing of order on 30/03/2043 though he received the same in 1st week of April. This being information from third party, the appellant contended that it was prevented by sufficient cause not to produce the same, hence these evidences be admitted under Rule 46A. The [ITO vs. M/s. Chintu Realities Pvt. Ltd.] A.Y. 2010-11 - 4 - appellant submitted a copy of reply dt. 30/03/2013 with letter no. I.Tax/detail/574 from sub Registrar Anand to A.O.ITO Wd.1(3)/133(6)/CRPC/2012-13/dt.08/03/2013 (Received on 30/03/2013) along with copies under Rule 114(b) of the IT Rule. The A.O. vide report dt.12/08/2014 though admitted that such information from sub Registrar was received on 03/04/2013 but since appellant failed to explain about such transaction recorded in the books or not, he was not prevented by sufficient cause, for producing information requested with so called. When appellant again the actual discrepancy involved and crucial nexus of such Index under I.T. Rule 114(b), the matter was specifically referred to A.O. vide my letter dt. 18/02/2015 (already discussed above at para 4(F). In response to this letter where the discrepancy was elaborated and A.O. was requested to consider such Index under I.T. Rule 114(b), the A.O. vide letter dt. 09/03/2015 reported that "on going through the copies of sale deed along with PAN details received from the sub Registrar, Anand, the transaction referred there in are found to have recorded in the book of accounts".
In view of above facts and findings, I am inclined to admit the additional evidences being vital and goes to the core of grounds of appeal so raised. It is undisputed that on account of improper reporting by sub Registrar, Anand, such incorrect figures are reflected in AIR. The appellant submitted copies of purchase & sale deed but in the absence of Index as per IT Rule 114(b), the name, PAN & amount are not verifiable for purchase and sale of immovable properties as reported in AIR. The A.O. also called for such details which indicate that these Index certificate are crucial for the issue under appeal. The appellant very appropriately demonstrated that this being third party evidence which he got on 30/03/2013 as A.O. also got it on 03/04/2013, he was prevented by sufficient cause for not submitting the same before A.O. It is therefore all these evidences are admitted for the adjudicating the appeal.
5.2. Now coming to ground wise adjudication as follows: (A)Ground no. 1 to 4 are interlinked and both technical as well as on merit. It was contended that A.O. has not appreciated the documents in the form of purchase & sale deed and without giving show cause made such addition in total disregard of appellant business of real estate and such purchase & sale is considered as stock in trade (Inventory). It was also contended that A.O. has not considered the reply from sub Registrar Anand and passed the order on 30/03/2013 in hurry.
(B) As discussed in details above at para4() TO 4(H) as well as while admitting evidences that A.O. after verification of such evidences, purchase & sales deeds now submitted a report (discussed at para 4(G) above) that all the purchase & sale transaction of immovable properties for which information was received through AIR are found to be duly recorded in the books of accounts. It is therefore, now, there is no justification for addition of Rs. 9967260 for unexplained investment and addition of Rs. 2,52,37,140 as unexplained income on sale of properties. The A.O.is therefore directed to delete the [ITO vs. M/s. Chintu Realities Pvt. Ltd.] A.Y. 2010-11 - 5 - addition so made of Rs. 9967260 and Rs. 25237140. The appellant gets relief accordingly. All the grounds are treated as allowed.”
Aggrieved by the reversal of additions made by the AO, the Revenue is in appeal before the Tribunal.
The Ld. DR for the Revenue supported the order of the AO and submitted that the assessee has failed to explain the entries found in the AIR before the AO and no proper enquiry in respect of such transactions has been carried out by the AO or by the CIT(A). It is not known from the order of the CIT(A) as to what queries were raised in the remand report and what directions were given for compliance to AO. It was further submitted that it is also not known as to when and how such transactions of substantial amount have been recorded and subjected to scheme of taxation either in financial year in question or any other financial years. The Ld. DR submitted that the CIT(A) has passed the order in haste without directing the AO to make requisite enquiry warranted in this regard.
We have carefully considered the rival submissions. We find substance of the plea of the Revenue. The CIT(A) has not spelt out as to how he was satisfied with explanations offered by the assessee, if any, with reference to the transactions of purchase and sale of property as reflected in AIR and source thereof. The order of the CIT(A) is thus to be regarded as cryptic in the sense that it is silent
[ITO vs. M/s. Chintu Realities Pvt. Ltd.] A.Y. 2010-11 - 6 - on issue of source or nature of transactions pertinent for adjudication of the issue. We, thus, set-aside the order of the CIT(A) and restore the matter back to the file of the CIT(A) for fresh adjudication in accordance with law after granting reasonable opportunity to AO for appreciation of evidence in support of AIR transactions in question. Needless to say the CIT(A) shall grant reasonable opportunity to the assessee to explain and support the transaction with documentary evidences. It shall be open to the CIT(A) to make such enquiry or cause to make such enquiry as may be considered appropriate to ascertain the nature and source of the transactions in question.
In the result, appeal of the Revenue is allowed for statistical purpose.
This Order pronounced in Open Court on 11/07/2019
Sd/- Sd/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 11/07/2019 TANMAY TRUE COPY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।