SHRI BHAGWANSAHAY K. YOGI,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-12(4),, AHMEDABAD

The assessee has raised following grounds of appeal:-

During the course of appellate proceeding the assessee has not pressed the ground no. 1 and 2 pertaining to invoking the provision of sec. 147 of the Act. Therefore, these grounds of appeal are dismissed as not pressed. The remaining two grounds of appeal of the assessee are filed against the decision of CIT(A)-XX, Ahmedabad in confirming the addition of Rs. 8,14,920/- on account of common unaccounted investment in flats and in confirming addition of notional rental income to the extent of Rs. 33,600/-. The fact in brief is that assessee has filed return of income on 27.12.2006 declaring total income at Rs. 3,07,540/-. Subsequently, the case was reopened by issuing of notice u/s. 148 of the Act on 29.08.2012. During the course of assessment proceeding regarding purchase of two flats the assessee has stated that he has submitted before the predecessor of the AO that those flats were purchased out of his income and savings.Regarding estimation of rent from flats the assessee has submitted that he had not earned any rental income and the flats were used for business purposes. The AO has not accepted the explanation of the assessee and simply stated that the source of investment in flats were not disclosed. Therefore, the AO has made addition of Rs. 8,14,920/- (Rs. 3,52,510 + Rs. 4,62,410) in respect of these properties and added to the total income of the assessee. The A.O. has observed that the assessee was having ownership of two flats and assessee has also not shown annual value of one of the flat for rent purpose, therefore, he has made addition on account of notional rent to the amount of Rs. 50,400/-.

Aggrieved assessee has filed appeal before the Ld. CIT(A). The Ld. CIT(A) has dismissed the appeal of the assessee reiterating the same reason cited by the AO.

During the course of appellate proceeding before us the Ld. Counsel has submitted paper book containing 89 pages pertaining to the detail and information in support of investment in the flats. The Ld. Counsel also contended that AO has not considered and disproved the submission of the assessee with any specific findings.

On the other hand the Ld. DR has placed reliance on the order of the lower authorities.

We have heard both the sides and perused the material on record. The AO has made addition vide order u/s. 143(3) r.w.s 147 dated. 22.03.2013 in respect of investment in flats to the amount of Rs. 8,14,920/- and deemed rental income on these flats to the amount of Rs. 50,400/-. We find that in the assessment order the AO has only stated that the assessee has not disclosed any source of investment in flat. However, after going through the paper book filed by the Ld. Counsel it is noticed that the assessee has filed various document and information i.e. copy of register document for purchase of flat, copy of return along with audited financial statement, copy of bank statement, copy/details of flats purchased as per books of account and detail of submission made before AO etc. It is also noticed that the investment in the flats has been reflected in the balance sheet as on 31.03.2006 which was duly audited by the auditor along with audit report u/s. 44AB of the Act which was filed with the return of income. The assessee has also filed copy of bank statement ledger account of transaction with the parties and copies of agreements of purchase of flats etc. In view of the above we consider that the aforesaid proof material and other detail placed in the paper book demonstrate that AO has not verified and examined the submission of the assessee before arriving to the conclusion that assessee has made unexplained investment in the flats and determining of notional income in respect of the aforesaid flats. Looking to the above facts and circumstances we restore this case to the file of the AO for deciding afresh after examination verification of the detail/information as cited

In the result, theappeal of the assessee is allowed for statistical purposes.

The assessee has raised following grounds of appeal:

The solitary ground of appeal of the assessee is against the decision of Ld. CIT(A)-XX in confirming penalty of Rs. 2,74,302/- levied by the AO u/s. 271(1)(c) of the Act. Since, the quantum addition on the basis of which this impugned penalty of Rs. 2,74,302/- was levied by the AO has been set aside to the file of AO for deciding the issue afresh. Therefore, the penalty levied in the case of the assessee has become infructuous as the same has to be decided by the AO on the outcome of set aside assessment to be framed in this case. Therefore, this ground of appeal of the assessee is allowed.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

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.