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Facts
The assessee challenged additions made by the AO regarding unexplained investment in property and cash credit. The CIT(A) upheld some additions, including Rs. 22,50,000 for investment and Rs. 4,06,663 for cash credit, while deleting the rest. The assessee appealed further.
Held
The Tribunal held that the addition of Rs. 22,50,000 for the purchase of immovable property was deleted as the assessee had discharged the initial onus by providing supporting documents and loan confirmations. Similarly, the cash credit of Rs. 4,06,663 was also deleted as the assessee provided relevant documents to substantiate the business operations.
Key Issues
Whether the additions for unexplained investment in property and cash credit were justified without proper evidence, and whether the assessee discharged the initial onus.
Sections Cited
250, 144, 69, 80C, 147, 150, 148, 143(2), 143(1), 68, 133(6), 56(2)(x)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
(Assessment Year : 2012-13) Faisal Abdul Majeed Kazi ITO-24(1)(1) E-651, B Wing, 6th Floor Room No. 702 New Chandra CHSL, Veera Desai Road, Vs. Piramal Chambers Andheri West Lalbaug, Parel Mumbai-400 053 Mumbai-400 051. PAN : AMYPK5431D Appellant Respondent Assessee by : Shri Satyaprakash Singh, Ld. CA Revenue by : Ms. Kavitha Kaushik, Ld DR Date of Hearing : 06 /11/2025 Date of : 24/12/2025 pronouncement O R D E R Per Narender Kumar Choudhry (JM) :-
This appeal has been preferred by the assessee against the order dated 10.5.2024 impugned herein passed by the Learned Commissioner of Income Tax (Appeals)/NFAC, (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short „Act‟) for 2012-13.
In the instant case, the Assessing Officer vide original assessment order dated 30.12.2011 under section 144 of the Act, has made following additions: - i) Unexplained investment under section 69 for purchase of immovable property of Rs. 49,76,580/-. ii) Deduction of Rs.1,02,316/- under section 80C of the Act.
2 Faisal Abdul Majeed Kazi 3. The said additions were challenged by the Assessee before CIT(A)-31, Mumbai, who vide order dated 25.10.2013 found that the purchase of property was made in Financial Year 2007-08 and therefore in view of the provisions of section 69 of the Act, addition on account of investment in property can be made only in A.Y. 2008-09 and accordingly deleted the addition in the case pertaining to A.Y. 2009-10.
Thus, in view of the aforesaid decision of the then Ld. CIT(A)-31, Mumbai, case of the assessee was reopened mainly on the reason that income of Rs. 53,83,243/- (Rs. 49,76,580/- as consideration amount of property plus Rs. 4,06,663/- cash deposit in savings account) has escaped assessment within the meaning of section 147 read with section 150 of the Act for the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the previous year relevant to A.Y. 2008-09.
The AO therefore accordingly issued the notice under section 148 of the Act alongwith reasons for reopening of assessment to the Assessee on 14.3.2014, who in response to, by filing a letter dated 17.6.2014 stated that the return of income filed originally on 30.3.2009 may be treated as return of income filed in response to notice under section 148 of the Act. Thereafter, the Assessing Officer issued other statutory notices under section 143(2) and 143(1) of the Act to the assessee. However, the assessee made no compliance and therefore the Assessing Officer completed the assessment on the basis of material available on record and ultimately held that the assessee had purchased an immovable property of Rs. 49,76,580/- and also deposited cash amount of Rs. 4,06,663/- in his bank account during assessment year under consideration and in the absence of any explanation regarding purchase of immovable property and source of such deposit, the said amounts of Rs. 49,76,580/- and Rs. 4,06,663/- are treated as unexplained investment and unexplained cash credit respectively under section 68 and 69 of the Act.
3 Faisal Abdul Majeed Kazi
The assessee being aggrieved, challenged the said additions by filing first appeal before Ld. Commissioner and during the appellate proceedings, by filing some additional evidence like bank statement, purchase deed of the property, profit and loss account, balance sheet etc. has claimed that the property in fact was purchased for Rs. 22,50,000/- but not at the stamp duty value of Rs. 49,76,580/- and the fund was sourced from loan taken from M/s. Sunchan Securities Ltd. and assessee‟s own fund. With regard to the cash credit of Rs. 4,06,663/- the assessee explained that the amount was generated from his business operation.
Since the assessee has submitted additional evidence, therefore the Ld. Commissioner forwarded the same to the Assessing Officer for verification. The Assessing Officer accordingly submitted its remand report inter-alia reporting that the assessee could not prove genuineness of loan taken from M/s. Sunchan Securities Ltd. of Rs. 33.50 lakhs, however with regard to the value of the property, the Assessing Officer did not dispute or mention any word.
The Ld. Commissioner though considered the aforesaid remand report and found that provisions of section 56(2)(x) of the Act is not applicable in the case of the assessee, because this particular section has been introduced to the Income Tax through Finance Act 2017 and applicable from 1st April 2017, whereas in the instant case, the property had been purchased in 2007-08. However, Ld. Commissioner further held that unexplained investment was of Rs. 22,50,000/- and further with regard to cash credit of Rs. 4,06,663/- the Ld. Commissioner considered the remand report, wherein it was reported that the assessee could not provide evidence like list of persons and register of labour etc., who sought employment, to substantiate credit in his bank account and since the assessee failed to explain credit, he found no merit in this ground.
4 Faisal Abdul Majeed Kazi 9. The Assessee, thus being aggrieved with the affirmation of the additions to the extent as mentioned above, has preferred instant appeal.
Heard the parties and perused the material available on record. Admittedly the Assessee had taken loan of Rs. 33,50,000/- from M/s. Sunchan Securities Ltd. through banking channel, as detailed below:
Bank Date Amount ICICI Bank 1.10.2007 10,00,000 ICICI Bank 16.2.2008 6,00,000 ICICI Bank 18.2.2008 2,50,000 Dena Bank 18.1.2008 15,00,000
Admittedly, the Assessee before the Ld. Commissioner, as it appears from para 4, page 4 of the impugned order that the assessee in support of its case filed some additional evidence like bank statement, purchase deed of property, profit and loss account and balance sheet in order to substantiate its claim. Further the assessee also provided the loan confirmation from M/s. Sunchan Securities Ltd. However, still in the remand report simply on the reason that the notice under section 133(6) of the Act send to M/s. Sunchan Securities Ltd. retuned back with the postal remarks “left”, the AO doubted the said transactions, whereas it is the fact that the transactions were carried out during A.Y. 2007-08, whereas remand proceedings were carried out during April- May 2019 and therefore could be a reasonable cause for not finding M/s. Sunchan Securities Ltd. at the address given and whereas it is a fact that the assessee by filing relevant documents, such as bank statement, purchase deed of property, profit and loss account, balance sheet etc. and confirmation as well, has prima facie discharged its onus cast under section 68 of the Act and therefore the addition affirmed to the extent of Rs. 22,50,000/- by Ld. Commissioner, deserves to be deleted. Thus the addition is deleted.
5 Faisal Abdul Majeed Kazi 11. Coming to the decision of Ld. Commissioner in sustaining the addition of Rs. 4,06,663/- regarding cash credit, we observe that in the remand proceedings, the Assessing Officer found that the Assessee had deposited cash on different dates and immediately transferred to various parties like Sayeed, Dhanraj Jew, M/s. Asma Enterprises, AN Merchant etc. which was not explained by the assessee with supporting documents. The assessee has claimed that he is engaged in the business of organized labors class persons and artisans and carried out the business in the name of Safa Enterprises. The assessee supplied laborers on receiving respective amount from the parties, further made payments to the labourers like Sayeed, Dhanraj Jew, M/s. Asma Enterprises, AN Merchant etc. In the unorganized labour business, there are very less chances of making record and it is not the case of the Department that the assessee has carried any other business and from the bank statements, which have been examined by the Assessing Officer during the assessment proceedings as well as remand proceedings, it appears that there are certain amounts credited on receipt from the persons/entities for whom the assessee carried out small petty labour works and in order to make payment, the Assessee from time to time withdrawn amount for making payment. The assessee in order to substantiate its claim has submitted relevant documents, as mentioned above hence the bank statement, profit and loss account, balance sheet etc., which were not only examined by the Assessing Officer during the assessment proceedings but also during the remand proceedings, as well by the Ld. Commissioner during the first appellate proceedings originally as well as subsequent appellate proceedings. Thus, considering the aforesaid peculiar facts and circumstances, as the assessee has duly filed relevant documents and discharged its prima facie onus cast under section 69 of the Act and therefore the addition which is under consideration is also liable to be deleted. Thus the addition in hand is also deleted.
6 Faisal Abdul Majeed Kazi 12. In the result, assessee‟s appeal is allowed. Order pronounced in the open Court on 24/12/2025.