BHARAT HAREKRISHNA SAHOO,MUMBAI vs. THE INCOME TAX OFFICER, WARD 41(1)(1), MUMBAI, MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER;

dated 19.02.2024 for Assessment Year (AY) 2018-19. The assessee has

raised following grounds of appeal:

“1. General Ground That the order passed by the learned Commissioner of Income Tax (Appeals). National Faceless Appeal Centre, Delhi, dated 19.02.2024. for Assessment Year 2018-19, is bad in law, contrary to facts, and against the principles of natural justice, in so far as it confirms the addition of 15.00,000 under section 69 as alleged unexplained investment and 12.99,758 under section 56(2)(x) as deemed income, without appreciating the factual circumstances.

before Tribunal. The learned Authorised Representative (ld. AR) of the

assessee submits that assessee has filed application in the form of

affidavit for condonation of delay. The ld. AR of the assessee submits that

delay in filing appeal is not intentional or deliberate. The order of

NFACT/CIT(A) passed on 19.02.2024. The assessee came from humble

background and studied only upto 10th standard. The assessee is working

as an electrician to support his family. The family of assessee is residing

in slum rehabilitation area. On receipt of various notices during first

appeal, the assessee sent those notice to his CA. His CA was also not well

versed nor has sufficient knowledge of appellate litigation. Copy of final

order was also sent to him but he has not taken step to file appeal in

time. The assessee on realizing that he is not taking proper care of his

appeal engaged new (present) consultant for filing appeal. The ld. AR of

the assessee submits that there was no intentional delay on the part of

assessee. The assessee was acting on the advice of his consultant who

represented him during first appellate state. The delay may actually be

condoned. The assessee may good case merits and is likely to succeed

that his case is heard on merit.

Sr. DR) for the Revenue submits that no proper and reasonable

explanation is given by assessee. The assessee is perhaps relying on self-

serving story. However, at the last, the ld. Sr. DR for the Revenue

submits that bench may take decision as per law.

fact that assessee is really interested in pursuing his case on merit. The

delay in filing appeal is not intentional or deliberate. Thus, keeping in

view, the principle of law on limitation that when the technical

consideration and cause of substantial justice are kept against each other,

the casue of substantial justice may be preferred. Hence, delay in filing

appeal before Tribunal is condoned. Now, adverting to merits of the case.

income for A.Y. 2018-19 on 14.06.2018 declaring income of Rs.

3,19,750/-. The case was selected for scrutiny. During assessment, the

assessing officer noted that as per information from office of DIT (I&CI),

Mumbai that a survey at the premises of various Slum Rehabilitation

project offices was carried out wherein it was found that there was

infringement section 50C/43CA and section 56(2)(vii). Such information

was forwarded to his office through Principal Chief Commissioner of

Income tax (Pr.CCIT). As per information, the assessee entered into

transaction during F.Y. 2017-18 showing sale/purchase transaction at

Rs. 19,50,000/-, the stamp valuation authority valued the property at

Rs. 32,49,758/-, thus, there was a difference of Rs. 12,99,758/-. On

show cause notice, the assessing officer recorded that assessee has not

furnished any relevant document. In absence of any reply, the assessing

officer made addition of Rs. 12,99,758/- under section 56(2)(x).

for purchase of property at Rs. 19,50,000/- but complete details of investment was not furnished. The assessing officer treated such

investment as unexplained investment.

appeal before ld CIT(A). Before ld. CIT(A), the assessee filed his

submission. The submission of assessee are recorded in para 4 of his

order. The Ld. CIT(A) recorded that in submission, the assessee stated

that the statement of fact and grounds raised by him may be considered

and he is not in a position to make uncalled and high demand of tax. He

has purchased property in slum area i.e. Slum Rehabilitation Authority

Property, having only 50% amenities. Rate of such properties is 50% of

the market value. Such fact may be considered and he may be relieved

from nightmare.

facts placed before him recorded that Rs. 14,50,000/- was availed from

Punjab & Maharashtra Cooperative Bank as a housing loan. The relevant

evidence regarding disbursement of loan was furnished. Thus, out of

total addition of Rs. 19,50,500/- the Ld. CIT(A) deleted addition of Rs.

14,50,000/-. With regard to remaining addition of Rs.5,00,00/-, the

assessee claimed that an amount of Rs. 3,50,000/-, was arranged from

relatives and friends as loan. The Ld. CIT(A) held that the assessee has

not furnished cogent evidence and his explanation is not satisfactory

thereby the addition of source of undisclosed investment of Rs.

3,50,000/- was sustained. The assessee further claimed that remaining

part of investment of Rs. 1,50,000/- was paid in cash from his savings.

The ld CIT(A) held that the assessee has not produced any evidence

thereby claim of 1,50,000/- was also disallowed. Thereby, the AO out of

undisclosed investment of Rs. 19,50,000/- allowed partial relief of

14,50,000/- and sustained the addition to the extent of Rs. 5,00,000/-

(3,50,000/-and 1,50,000/-) Against the addition under Section 56 (2)(X)

Rs. 12,99,758/-, the Ld. CIT (A) recorded that main contention of

assessee is that he has purchased the property under Pradhan Mantri

Avas Yojna (PMAY) under SRA Project having less amenity and 50%

value compared to other property in market. The Ld. CIT(A) held that

AO made addition on the basis of naming provision of Section 56(2)(X).

As there is no infirmity in the order of Ld. CIT(A). Further aggrieved, the

assessee has filed present appeal before Tribunal.

the assessee and Ld. Sr. Departmental Representative (DR) for the

revenue. Ground No. 1 is general and needs no specific adjudication.

Ground No. 2 relates to addition of Rs. 12,99,758/- under Section

56(2)(X). Ground No. 3 relates to addition under Section 69 of Rs.

5,00,000/-. The Ld. AR of the assessee submits that he has filed

application for admission of additional evidence. In the application of

additional evidence, the assessee has submitted confirmation of loan

from friends and valuation of property valued by Government Registered

valuer. Copy of confirmation of loan and the valuation report by

Government Registered valuer was not placed before the lower

authorities. The assessee was not advised to file such evidences. The additional evidences have material bearing on the issue under

consideration. The assessee will suffer prejudice, if the additional

evidences are not allowed and considered. The assessee has availed

loan from friends and relatives. The loans were availed through banking

channel and confirmation of loan and PAN card of lenders are file. The

lenders are close relatives. The assessee is an electrician by profession

and having weak economic position. Therefore, such evidence may be

accepted and assessee may be allowed relief. So far as addition under

Section 56 (2)(x) is concerned, the ld AR of the assessee submits that

no reference was made by AO to District Valuation Officer (DVO) for

ascertaining the fair market value of flat purchased by the assessee. As

per report of Government Registered Valuer, the value of property as

estimated by Valuer is of Rs. 19,50,000/- only. Thus, both additions are

liable to be deleted.

assessee has filed additional evidence on both the additions for the first

time before the Bench, which were not available before lower

authorities. Therefore, in case the bench is of the view that such

additional evidences are to be considered the matter may be restored to

the file of lower authorities for verification of facts and evidences.

record carefully. Firstly, I am considering the admission of additional

evidence. I find that the assessee has filed report of Government

Registered valuer in support of his contention that market value of property is less than 50% being a slum rehabilitation project.

Considering the fact that valuation by registered valuer is file for the first

time before Tribunal and such report is relevant for adjudication of the

issue of addition under section 56(2)(x), and moreover the AO has not

made reference to DVO for estimation of fair market value. Therefore,

additional evidence qua the market value of property is admitted and

the issue is restored back to the file of AO with the direction to make

reference to DVO and pass order afresh. Needless to direct that before

passing the order, the AO shall allow reasonable opportunity to the

assessee. Thus, the ground No. 2 of appeal is allowed for statistical

purpose.

Section 69 to the extent of Rs. 5,00,000/- is concerned, I find that the

assessee is claiming that he has availed loan from family members and

friends, details of which are as under;

1 Confirmation & PAN Baliraj Maurya 15,000/-, 2 Amita Sahoo (wife) 2,08,000/- Confirmation & PAN 3 Sibuni Sahoo 71,000/- Confirmation & PAN 4 Kamal kant Sahoo 12,000/- Confirmation & PAN 5 Govinda Sahoo 17,000/- Confirmation & PAN Confirmation & PAN 6 Nuri Singa sahoo 18,000/- Confirmation & PAN Total 3,41,000/- 13. I find that majority of lenders all are family members. The loan amount

is very meager amount, therefore, taking a lenient view, the source of

investment to that extent is also accepted. So far as Rs. 1,50,000/- is

concerned, the assessee claimed that it was paid in cash. The assessee

has shown return of income of Rs. 3,19,750/-. Moreover, the assessee

has paid such amount for purchase of house. Thus, considering the 8 peculiar facts of the case, I have no reason to doubt such a small

amounts of loans which was arranged for purchasing house. Thus, Rs.

1,50,000/- from personal saving is also accepted. Thus, the addition of

unexplained investment to the extent of Rs. 4,91,000/- is also deleted.

And remaining of Rs. 9,000/- is sustained. In the result, this ground of

appeal is partly allowed.

Order pronounced in the open court on 24/04/2026

Sd- (PAWAN SINGH) JUDICIAL MEMBER Mumbai, Dated: 24/04/2026 Biswajit

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai