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Facts
The assessee appealed against an order confirming additions made by the AO. The appeal was filed with a delay of 281 days. The assessee had purchased a property with co-sharers, and the AO made additions relating to the consideration paid and stamp duty, treating part of it as unexplained investment and deemed income under Section 56(2)(x).
Held
The Tribunal condoned the delay in filing the appeal, observing that it was due to genuine and compelling circumstances and not deliberate or mala-fide. On merits, the Tribunal followed a coordinate bench's decision and directed the AO to delete additions related to investments made in earlier years and payments made via cheque from bank accounts with sufficient brought-forward deposits. The issue of cash payments was restored to the AO.
Key Issues
Whether the delay in filing the appeal can be condoned. Whether additions made on account of property purchase and stamp duty relating to earlier years or payments made through bank accounts are sustainable when the source is explained.
Sections Cited
250, 56(2)(x), 69, 4, 71B, 72
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 30.08.2024, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2020-21.
2. At the outset, it is observed that there is a delay of 281 days in filing the instant appeal, on which the Assessee has claimed as under :- AFFIDAVIT FOR CONDONATION OF DELAY 1, Mrs. Deepali Vikki Ajmera, age about 45 years, residing at 5th Floor, Prem Ratna Building, Ambedkar Road, Opp Balaji Temple, Mulund West, Mumbai-400080, do hereby solemnly affirm and state as under: 1. That my aadhar Number is 828973842133 and my PAN number is AGVPS7279Q.
That I am the Appellant in the above appeal, and I am fully conversant with the facts of the case and competent to swear this affidavit for seeking condonation of delay in filing the appeal before the Hon'ble Income Tax Appellate Tribunal.
That in the case of my husband, Shri Vikky Ajmera, for the same assessment year i.e. A.Y. 2020-21, the appellate order under section 250 of the Income-tax Act, 1961, was passed on 23.05.2025, wherein no relief was granted. Consequently, it was decided to challenge the said order before the Hon'ble Tribunal, and accordingly, the appeal in his case was filed on 21.07.2025 vide Acknowledgement No. 1800031052.
4. That while the filing in my husband's case was underway, in the meantime It was realised that a similar appeal in my case was also pending, and accordingly, my portal was checked, whereupon it came to notice that the appellate order under section 250 had already been passed on 30.08.2024, However, I was never informed about the same by my tax consultant, Mr. Chandrakant Shah, who handled the appellate proceedings, Upon Inquiry, he stated that he does not make it a practice to regularly check the portal for tracking appeal proceedings. That the email ID provided in Form 35 was that of Mr. Chandrakant Shah viz., chandrakant_shah2001@yahoo.co.in, and no email address of mine was mentioned. As a result, I did not receive any notices or communication from the CIT(A), and I remained unaware of the passing of the appellate order.
6. That upon becoming aware of the appellate order, I took immediate steps to engage legal counsel for the purpose of filing the appeal before the Hon'ble Tribunal. Appeal fee challan was paid promptly on 09.07.2025. However, data collation, document preparation, and compilation took some time, and the appeal is now being filed.
7. That in the absence of specific information regarding service of the appellate order, the date of the order i.e., 30.08.2024 is being taken as the date of receipt for computation of limitation. Accordingly, there is a delay in filing the appeal which is being explained through this affidavit
8. That the delay in filing the appeal is neither deliberate nor intentional but has occurred solely due to the genuine and compelling circumstances narrated above. I have a limited knowledge of income- tax procedures and had placed full trust in my tax consultant.
That I have acted bona fide and diligently throughout, and the delay is purely procedural in nature without any intent to evade the law. Hence, it is respectfully submitted that the delay deserves to be condoned in the interest of justice.
That the Hon'ble Supreme Court in Inder Singh v. State of Madhya Pradesh [2025 INSC 382] has held that where delay is not deliberate but caused due to circumstances beyond control, it must be condoned in the interest of substantial justice, and even a delay of 1537 days was condoned in that case.
That the Hon'ble Pune Bench of ITAT in Rahul Jagannath Bandal (ITA No. 1382/PUN/2024) and in Minhaj Foundation (ITA Nos. 401 to 404/PUN/2025) has consistently held that technicalities must not override justice, and when meritorious grounds exist, even procedural delays should not obstruct adjudication on merits.
12. I, therefore, humbly pray that the Hon'ble Tribunal may be pleased to condone the delay in filing the present appeal and admit the same for hearing and adjudication on merits, in the interest of justice.”
3. The Assessee therefore, on the aforesaid reasons has claimed that the delay of 281 days in filing of instant appeal, may kindly be condoned, as the delay was neither intentional nor mala-fide but because of the aforesaid reasons and / or beyond the control of the Assessee.
4. On the contrary, the Ld. D. R. refuted the claim of the Assessee.
5. Having considered the reasons stated by the Assessee for condonation delay, as genuine, bonafide, plausible and unintentional, this Court is inclined to condone the delay, thus, the delay is condoned.
6. Coming to the merits of the case, it is observed that the Assessee had declared her income at Rs.7,39,507/- by filing return of income on dated 22.10.2020 for the AY under consideration and during the assessment year under consideration, the Assessee had purchased a property on a consideration of Rs.72,50,000/- on a stamp of Rs.8,85,400/- having been paid as per agreement, jointly with her husband Shri Vikki Ajmera and mother-in-law Smt. Ushaben M. Ajmera.
The AO therefore, in order to examine the transactions, show caused the Assessee, who vide replies dated 20.01.2022 and 01.02.2022 filed along with agreement of sale, claimed inter-alia that the original transaction was entered in 2011 with the builder, who promised to give possession in 2013. Booking amount of Rs. 5,00,000/- was paid to the builder, vide cheque no. 390167 dated 2.05.2011 drawn on Dena Bank, Mulund West Mumbai. The balance consideration of Rs.72,50,000/- was paid to the builder on 22.02.2020 at the time of possession, as per agreement. The Assessee has also submitted the bank statement showing the payments made to the builder as detailed below: - Sr. Cheque Drawn on Date Amount No. No. 1 387945 Dena Bank 22.06.2011 Rs. 5,00,000/- Mulund (w) 2 387926 Dena Bank 28.06.2011 Rs. 5,00,000/- Mulund (w)
3 387949 Dena Bank 18.07.2011 Rs. 4,49,793/- Mulund (w) 4 390174 Dena Bank 01.08.2011 Rs. 5,00,000/- Mulund (w) 5 390167 Dena Bank 22.05.2011 Rs.5,00,000/- Mulund (w)
The AO thus considering the aforesaid claim and details and documents observed that the Assessee during the FYs 2011-12, 2012-13, 2014-15 and 2015-16 has paid an amount of Rs.23,45,960/- in total, out of total sale consideration amount of Rs. 72,50,000/- as confirmed by the builder company vide allotment letter dated 26.09.2011 and as appears from the relevant bank details.
The AO further observed that out of total sale consideration of Rs.72,50,000/- of the property under question, the amount of Rs.51,98,675/- has been paid to the builder, in the earlier years as detailed below: -
Sr. Name Amount No. 1 Assessee Rs. 23,45,960/- (Deepali V. Ajmera) [15,00,000/-(FY 2011-12) + Rs. 2,24,927 (FY 2012-13) + Rs. 2,24,220/- (FY 2014-15) + Rs. 3,96,813/- (FY 2015-16)]
2. Smt. Ushaben M. Ajmera Rs. 9,48,442/- [Rs.6,98,442 (FY 2014-5) + Rs.2,50,000/- (FY 2015-16)]
3. Viki M. Ajmera Rs. 19,04,273/- [Rs.12,27,175/- (FY 2011-12) + Rs.4,49,149/- (FY 2013-14) + Rs.2,27,949/- (FY 2015-16)]
Mrs. Deepali Vikki Ajmera 9. Therefore, the AO construed that remaining amount of Rs.20,51,325/- (Rs.72,50,000 – Rs. 51,98,675) and the stamp duty of Rs.8,85,400/- has been paid during the year under consideration. Thus, total investment in the aforesaid property and receipts u/s 56(2)(x) work out to Rs. 1,04,41,440/- [Rs. 20,50,325/- (unexplained investment) + 8,85,400 (stamp duty paid) + 75,05,715 (difference between stamp value & purchase value)] as per Agreement of sale submitted by the Assessee and also as per the provisions of section 56(2)(x) as discussed above.
9.1 The AO ultimately, held the differential amount of Rs. 75,05,715/- between the stamp duty value and purchase valuation as deemed income under Section 56 (2) (x) of the Act, which works out to Rs. 25,01,905/- being 1/3rd in the hands of the Assessee and consequently added to the total income of the Assessee.
9.2 Further, the AO also treated the amount of Rs.20,50,325/- as unexplained investment and held the amount of Rs.6,83,442/- being 1/3rd, in the hands of the Assessee and consequently, also made the addition of said amount being variation and added to the income of the Assessee.
9.3 The AO further by considering the stamp duty of Rs.8,85,400/- as unexplained investment under Section 69 of the Act, also worked out the Assessee’s share being 1/3rd at
10. The Assessee being aggrieved challenged the said addition/disallowance by filing first appeal before the Ld. Commissioner, who by taking into consideration the peculiar facts and circumstances, the allotment letter of the property issued in the year 2011 and advance payment made through Cheque in the year 2011, held that from the provisions of Section 56 (2) (x) of the Act, the stamp duty value of the property in the year 2011 should be taken for the purpose of computing income of the Assessee under Section 56 (2) (x) of the Act and therefore, he accordingly, deleted the addition of Rs. 25,01,905/-.
11. However, the Ld. Commissioner by taking into consideration the other additions of Rs.6,83,442/- and Rs.2,95,133/- being 1/3rd of Rs. 20,50,325/- balance investment and Rs.8,85,400/- being stamp duty as determined by the AO, held as under: -
“ The Assessee was given opportunity on various dates mentioned in para 4 above for representing her case, vide notice sent at e-mail address, appearing in the ITR and also in the mail ID mentioned in Form 35, however, the Assessee failed to furnish any compliance/documents in support of her contention. The documents furnished during assessment proceedings have also been perused and it is seen that no document or explanation has been furnished by the Assessee in this regard. It is trite that the onus is on a person making claim and the primary responsibility/onus/burden of proving the claim made before the tax authorities, lies with the Assessee. In the present case, the Assessee has not been able to even discharge the primary onus/burden statutorily and judicially cast upon her to substantiate the claims made in the ground of appeal, in spite of adequate time and opportunities given as discussed in para 4.
11.1 The Ld. Commissioner, thus on the aforesaid reasons affirmed the addition of Rs. 9,78,575/- (Rs. 6,83,442/- + Rs. 2,95,133/-) as made by the AO.
Thus, the Assessee being aggrieved has preferred instant appeal.
Heard, the parties and perused the material available on record. Admittedly, the property under consideration was purchased on a total consideration of Rs.72,50,000/-, for which the stamp duty of Rs.8,85,400/- has been paid. In fact, the property was purchased by the Assessee, along with two co-sharers i.e. Assessee’s husband and mother-in-law, on a total consideration of Rs. 81,35,400/- [72,50,000/- (consideration amount) + 8,85,400/- (Stamp Duty)], out of which, as per assessment order, the Assessee has paid the amount of Rs. 24,49,792/- in five installments i.e. Rs.5,00,000/-, Rs.5,00,000/-, Rs.4,49,793/-, Rs.5,00,000/- and Rs.5,00,000/- respectively on dated 22.06.2011, 28.06.2011, 18.07.2011, 01.08.2011 and 22.05.2011, which worked out approximately 1/3rd of the total amount of consideration of Rs.72,50,000/-, as the aforesaid amount has been paid by the Assessee for her share being 1/3rd share in 2011 (AY 2012-13) and therefore, according to the Assessee, no addition could have been made by the AO in the year under consideration i.e. 2020-21.
This Court observes that identical situation has also been dealt with by the Hon’ble Co-ordinate Bench of the Tribunal in the case of Km. Preeti Singh Vs. Income Tax Officer Ward (1) (3), Noida, decided on 21.10.2018 (2019) 103 taxmann.com 293 (Delhi-Trib), wherein the Hon’ble co-ordinate bench of the Tribunal, considering the relevant provisions of Section 4 of the Act, relevant to the charge of income tax and the identical situation, wherein payments were made in the previous years but not during the year under consideration, ultimately deleted the identical addition by observing and holding as under :
We have heard both sides patiently and attentively. We have also considered all the materials on our record. At the time of hearing before us, the relevant facts are not in dispute. Firstly, it is not disputed that the total investment made by the assessee in this year was Rs. 12,58,100/- and the remaining investment was made in earlier years. It is also not disputed that out of the aforesaid investment of Rs. 12,58,100/-, the total payment amounting to Rs. 6,05,100/- was made by cheque and the remaining balance of Rs. 6,53,100/- was made by cash. It is also not disputed that the assessee had sufficient deposits in her bank account due to brought forward deposits of earlier year at the beginning of the year under consideration to explain the source of aforesaid transactions by cheque totaling Rs. 6,05,000/-. It is further not disputed that the deposits in the bank accounts of the assessee at the beginning of the year had accumulated in the past, across several years. It is also not disputed that the assessee had made significant amounts of withdrawals in cash, out of her bank account in an earlier year.
4.1 It will be useful to refer to Section 4 of I.T. Act, which is the charging section. For ease of reference, Section 4 is reproduced as under: "Charge of income-tax. 4. (1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and [subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income of the previous year of every person:
Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly.
(2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act."
4.1.1 On perusal of Section 4(1) of I.T. Act, it is obvious that in the year under consideration, no addition can be made in respect of investments in property made by the assessee in earlier years or in respect of deposits in bank accounts of the assessee made in earlier year which brought forward to this year for making cheque payments of the aforesaid total amount of Rs. 6,05,100/-. Moreover, in any case, when certain amounts were invested by the assessee and also, certain other amounts were deposited in the bank account of the assessee, in previous years relevant to earlier A.Ys.; such investments or deposits could not possibly have been out of the income of the previous year under consideration (relevant to A.Y. 2009-10). It is well settled that each year is separate and self-contained period. Income Tax is annual in its structure and organization. We take strength from decisions Sir Kikabhai Premchand v. CIT[1953] 24 ITR 506(SC); ITO v. Murlidhar Bhagwan Das[1964] 52 ITR 335 (SC); CIT v. British Paints India Ltd. [1991] 188 ITR 44/54 Taxman 499 (SC) and CIT v. Basant Rai Takht Singh [1933] 1 ITR 197 (SC) for the proposition that each 'previous year' is a distinct unit of time for the purposes of assessment and further, that the profits made; and the liabilities of losses made before or after the relevant previous year are immaterial in assessing income of a particular year, unless in accordance with proviso to Section 4(1) of I.T. Act, there is statutory provision to the contrary, authorizing income of a period other than the previous year under consideration to be charged to income-tax (such as Section 71B of I.T. Act and Section 72 of I.T. Act which allow losses to be carried forward). Useful reference may also be made to in the Ratanchand Lallumal, In re [1936] 4 ITR 189 (All.), Jagannath Ram Dayal v. CIT[1950] 18 ITR 375 (All); M.K Muhammad Ibrahim v. CIT[1942] 10 ITR 64 (Mad.), CIT v. Jug Sah Muni Lal Sah[1939] 7 ITR 522 (Patna), CIT v. Planters Co. Ltd.[1980] 123 ITR 648 (Mad.), CIT v. Spunpipe & Construction Co. (Baroda) (P.) Ltd.[1982] 10 Taxman 270/[1983] 141 ITR 246 (Guj.), Debaprasanna Mulcharjee v. CIT[1951] 20 ITR 293 (Cal.), CIT v. Bijli Cotton Mills Pvt. Ltd. [1970] 76 ITR 625 (All.) and CIT v. Partabmull Rameshwar[1977] 107 ITR 526 (Cal.) for proposition that, even if certain income has escaped tax in the relevant assessment year, because of a device adopted by the assessee or otherwise, it does not entitle Revenue to assess the same as the income of any subsequent year when the mistake becomes apparent.
4.2 In view of the aforesaid undisputed facts, and the legal position we dispose off this appeal with the following directions. Firstly, in computation of assessee's total income for the year under consideration, we direct the AO to delete the additions in respect of those amounts which were invested by the Assessee in earlier years i.e. before previous year 2008-09 relevant for A.Y. 2009-10. The AO is directed to quantify this amount while giving effect to this order. Secondly, we also direct the AO to delete the addition amounting to Rs.6,05,000/- which was made by the assessee during the year under consideration through cheque transactions of the assessee in her bank accounts in Allahabad Bank and Punjab National Bank; because, as stated earlier, it is not disputed that the assessee had sufficient deposits in her bank account at the beginning of the year to explain the source of aforesaid transactions by cheque. Thirdly, as far as investment totaling aforesaid amount of Rs.6,53,100/- in cash is concerned, we restore the matter to the file of the AO with the direction to pass a fresh order on merits on this limited issue after considering the explanation of the assessee. At this stage we are expressing no opinion on merits of the explanation tendered by the assessee. The Assessing Officer will decide the issue on this limited point in accordance with law and facts of the case.
By way of abundant caution, we wish to clarify that this order is limited in its application to A.Y. 2009-10, which is the year under consideration for this appeal filed by assessee. Undisputedly, the investment in property has been made by the assessee partly in this year and partly in other years. Undisputedly deposits in the bank accounts of the assessee include deposits made in earlier years. Our observations, directions and order are applicable only for this particular appeal filed by assessee for A.Y. 2009-10. As no other appeal for any year is before us; we decline to express any opinion for any other year.
Admittedly, the Assessee has not made any investment and/or paid any amount in the year under consideration and nothing material is available on record and also not brought on record by the Revenue Authority that the Assessee has paid any amount in the AY under considerations and therefore, on the aforesaid analyzations, this Court is inclined to delete the addition under consideration, as affirmed by the Ld. Commissioner. Thus, the addition is deleted.
In the result, appeal filed by the Assessee is allowed.
Order pronounced in the open court on 30.12.2025.