DR. ANAMIKA GUPTA,LUCKNOW vs. DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD

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ITSSA 189/AHD/2019Status: DisposedITAT Ahmedabad12 May 2023AY 2008-098 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that in the interest of justice, the matters for all three assessment years should be set aside to the file of the CIT(A) for de-novo consideration. For AY 2007-08, the Tribunal noted the assessee's claim of providing substantial additional evidence and detailed explanations for the investment in Poineer Residency-II and the income from house property. The Tribunal acknowledged that the CIT(A) had dismissed the appeal without fully appreciating these evidences. Similarly, for AY 2010-11 and 2011-12, the assessee claimed to have explained the investments in the UPAVP housing project before the CIT(A), but the evidence was allegedly ignored. The Tribunal found merit in the assessee's plea that the CIT(A) had passed orders disregarding substantial evidence. Consequently, the appeals were allowed for statistical purposes, with directions to the CIT(A) to pass a fresh order after providing the assessee with a due opportunity to present her case on merits and produce all supporting documents. The procedural grounds regarding Section 144 and Section 127 were implicitly addressed by the decision to set aside the matter for fresh consideration, implying that these issues would be re-examined.

What were the facts?

The assessee, Dr. Anamika Gupta, filed appeals before the ITAT against the orders of the CIT(A)-7, Ahmedabad, for assessment years (AY) 2007-08, 2010-11, and 2011-12. These appeals arose from a search action under Section 132 of the Income Tax Act, 1961, conducted on the Neesa Group on September 8, 2010. Notices under Section 153A were issued to the assessee. For AY 2007-08, the Assessing Officer (AO) made additions of Rs. 16,50,000/- for unaccounted investment in a flat at Poineer Residency-II and Rs. 1,69,050/- for unaccounted income from house property. The assessee had declared a total income of Rs. 2,94,670/- for AY 2007-08. The CIT(A) sustained these additions. For AY 2010-11 and 2011-12, additions of Rs. 18,75,000/- and Rs. 13,50,000/- respectively were made for unexplained investments in a housing project of UPAVP's Vridavan Yojna No. -3, which were also confirmed by the CIT(A).

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the CIT(A) erred in law and facts by sustaining the addition of Rs. 16,50,000/- as unaccounted investment in Poineer Residency-II, considering the assessee's claim of providing evidence of investment and its sources, and whether the AO/CIT(A) wrongly invoked Section 69 of the Act. 2. Whether the CIT(A) erred in law and facts by sustaining the addition of Rs. 1,69,050/- as unaccounted income from house property, particularly when the leave and license agreement was between Technosys Services Pvt. Ltd. and Anil Enterprises, and not directly involving the assessee. 3. Whether the CIT(A) erred in law by invoking Section 144 without issuing a show cause notice. 4. Whether the transfer of the case from Lucknow to Ahmedabad under Section 127 was done without providing an opportunity of being heard, rendering the AO's order beyond jurisdiction. 5. Whether the CIT(A) erred in law and facts by not considering additional evidence submitted by the assessee under Rule 46A. 6. Whether the CIT(A) erred in confirming additions of Rs. 18,75,000/- (AY 2010-11) and Rs. 13,50,000/- (AY 2011-12) for unexplained investments in UPAVP's Vridavan Yojna. Assessee's Contentions: The assessee argued that the CIT(A) disregarded substantial additional evidence, including proof of investment through account payee cheques and detailed sources supported by affidavits. The investment was fully explained, and the identity, creditworthiness, and genuineness of donors were established. Regarding house property income, the assessee contended that the leave and license agreement was not between her and Anil Enterprise, and the AO was aware of this. The assessee also raised procedural issues regarding the invocation of Section 144 without notice and the transfer of the case under Section 127 without a hearing. The assessee prayed for the matter to be set aside to the CIT(A) for de-novo consideration. Revenue's Contentions: The judgment does not record specific contentions from the Revenue's side regarding the issues decided.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 250,Section 144,Section 127,Section 69,Section 46A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: Ms. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri U.S. Bhati , A.R. &, Shri Abhimanyusing Bhati, A.R
For Respondent: Shri A.P. Singh, CIT-D.R

आदेश/ORDER

PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-

These are appeals filed by the assessee for assessment years, 2007- 08, 2010-11 and 2011-12 against the order of ld. CIT(A)-7, Ahmedabad, u/s. 250 of the Act.

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 2 Dr. Anamika Gupta vs. DCIT

2.

Since common issues are involved for all the years under consider, all the three appeals are being disposed of by way of a common order.

3.

We shall first discuss assessee’s appeal for assessment year 2007-08.

4.

The assessee has taken the following grounds of appeal:

“1. Because the Ld. CIT(A)-7 erred in law and on facts while making an addition of Rs.16,50,000/- towards unaccounted investment as no addition could be made merely on the assumption u/s.!32(4A) unless proved with factual evidence that the content of the material has resulted in undisclosed income resulting from an actual transaction belonging to the appellant executed by him during a specific assessment year. 2. Because, the Ld. CIT(A)-7has erred in law and on facts while making an addition of Rs.1,69,050/- towards unaccounted income from house property as no addition could be made merely on the assumption u/s.!32(4A) and that too about payment of security deposit not at all indicating the fact that the rent is received by the appellant unless proved with factual evidence that the content of the material has resulted in undisclosed income resulting from an actual transaction belonging to the appellant executed by him during a specific assessment year. 3. Because, the Ld. CIT(A)-7 has erred in law by invoking provisions of section 144 without giving any show cause notice stating that the provisions of section 144 would be invoked. 4. Because, the Commissioner of Income Tax - Lucknow did not given an opportunity of being heard while transferring the case u/s. 127 of the Act from Lucknow to Ahmedabad, when the distance between the two places is more than 1300 kms as the convenience in effective investigation and assessment should not result in hardships and harassment to the appellant, the impugned order passed by the Ld. AO is prayed to be treated as beyond his jurisdiction and hence be quashed. And order of Ld. CIT(A)-7 is prayed for set aside. 5. Because the order u/s 153Ar.w.s. 144 of the Income Tax Act, 1961 dated 27-12-2018 passed by the Ld. ClT(A)-7, bearing based on whims, surmises is unjust and contrary to the facts and law and liable to be vacated. 6. Because the Ld. CIT (A)-7 has erred in law and facts that appellant had submitted additional evidences, which has been not considered and caused hardship to the appellant and has not given the benefit of Rule 46 A of the Income Tax Rules. 7. Because the appellant craves leave to modify any of the grounds of appeal mentioned above and/or add any fresh grounds as and when it is required to do so. 8. Because the Ld. CIT(A)-7 erred in law and on facts in not appreciating the natural spirit of the appellant.”

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 3 Dr. Anamika Gupta vs. DCIT

5.

The brief facts of the case are that a search action u/s. 132 of the Act was carried out on the Neesa Group on 08-09-2010. Notice u/s. 153A of the Act was issued to the assessee and the assessee filed return of income for assessment years 2005-06 to 2010-11 on 08-10-2012 and for assessment year 2011-12 on 30-07-2011. The assessee declared total income at Rs. 2,94,670/- for assessment year 2007-08. During the course of assessment, several notices were issued to the assessee, but she did not cause appearance and accordingly, the Assessing Officer proceeded to pass ex-parte order on the basis of materials available on record. The Assessing Officer observed that on the basis of materials seized from the residence of Rohit Gupta, it is seen that the assessee had purchased flat at Poineer Residency-II for Rs. 16,50,000/-. Since the assessee did not furnish her books of account from where the investment made by her could be verified and also the assessee did not offer any explanation regarding the investment made in Poineer Residency-II, the Assessing Officer added the amount of Rs. 16,50,000/- as unaccounted investment in the hands of the assessee. Further, the Assessing Officer observed that the assessee had entered into a “leave and license” agreement with M/s. Anil Enterprise on 31-06-2006 and as per the terms of agreement, the assessee had received a sum of Rs. 1,50,000/- as deposit and further she was supposed to receive monthly rental income of Rs. 4500/- per month as per the above Agreement. However, the Assessing Officer observed that from perusal of the return of income filed by the assessee, she has not shown any house property income during assessment year 2007-08 and assessment year 2008-09. Accordingly, on the basis of documents available on record, the Assessing Officer added a sum of Rs. 1,69,050/- as income from house property in the hands of the assessee.

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 4 Dr. Anamika Gupta vs. DCIT

6.

In appeal before the ld. CIT(A), the assessee placed on record substantial additional evidence in support of her contention that the additions made by the Assessing Officer are not sustainable in the hands of the assessee. However, ld. CIT(A) dismissed the appeal of the assessee with the following observations:-

“8.7 So far as addition of Rs. 16,50,000 being unexplained investment for purchase of flat at Pioneer - II Residency is concerned, Appellant has claimed that she has made payment of Rs. 1,50,000 by DD on 24th December, 2005, Rs.3,00,000 on 13th May, 2005, Rs. 4,50,000 paid by DD on 13 December, 2005 and Rs. 7,50,000 on 10th May, 2006 from ICICI Bank. The Appellant has claimed that she has received refund from NOIDA Development Authority for Rs. 1,39,000 and considering the savings of Rs. 11,000, DD of Rs. 1,50,000 was given. Further Rs.3,00,000 was paid by M/s. Technosys Services Pvt. Limited against her remuneration. Further, cheque of Rs. 4,50,000 was given from gift of Rs.4,58,500 received from her real sister Ms. Anupama Gupta for which confirmation was filed. The balance Rs. 7,50,000 was given out of gift received from her father for Rs.5,00,000 and Rs. 1,50,000 from M/s. Technosys Services Pvt. Limited against her remuneration. The Appellant has given copy of Affidavit of her father in support of her claim that she has received gift from her father. On this basis Appellant has tried to explain that she has sources of funds for making above investment. It is observed that above explanation was forming part of Exhibit - 1 of written submission dated 31st August, 2013, which includes prayer for allowing additional evidences under Rule 46A. The Appellant in her letter dated 15th December, 2018 has submitted tabular chart wherein it is stated that gift affidavit of Rs.4,58,500, gift affidavit of Rs.5,00,000 and medical receipts of Rs. 1,00,000 disclosed in ITR are on record of AO whereas refund received from NOIDA Development, bank statement showing withdrawal and certificate of salary paid from Technosys Services Pvt. Limited are additional details. 8.8 On careful consideration of all these details, it is observed that Appellant has claimed to have made payment of Rs.9,00,000 (Rs. 1,50,000 + 3,00,000 + 4,50,000) by DD however, the appellant has not provided any proof of such payment and the source thereof . In the absence of any cogent evidences, it has to be considered as unexplained investment in the year under consideration as provisions of Section 69 of the Act clearly states that when Assessee has made investment in the Financial Year immediately preceding the Assessment Year and if such investment is not recorded in Books of Account, or if it is recorded, then no explanation is provided, such investment can be subject matter of addition. Considering this fact, addition made by AO to the extent of Rs.9,00,000 is sustained.

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 5 Dr. Anamika Gupta vs. DCIT

8.9 So far as payment of Rs,7,50,000 made on 10th May, 2006 from ICICI Bank, Appellant has claimed that Rs.5,00,000 is received as gift and Rs. 1,50,000 is received from Technosys Services Pvt. Limited towards remuneration and Rs. 1,00,000 is medical receipts. It is observed from the bank statement that Appellant has made various cash deposits of Rs. 1,05,000 during the period 8th May, 2006 to 9th May, 2006 but has not proved that such cash deposits are her medical receipts the same is part of disclosed income in return of income hence explanation of Appellant that her medical receipts are sources of investment cannot be accepted. So far as gift of Rs.5,00,000 received from her father, Appellant has simply submitted affidavit but such gift deed does not explain the sources of fund with donor, copy of bank statement of donor hence genuineness and creditworthiness of donor is not proved. So far as contention of Appellant. 9.1 So far as addition of Rs. 1,69,050 being rent income, it is observed that during the course of search leave & license agreement being Pioneer -II Residency on rent to Anil Enterprise. The Appellant has claimed that this agreement was executed between Anil Enterprise and Technosys Services Pvt. Limited hence such agreement does not pertain to her. The Appellant in Appellate Proceedings or Assessment Proceedings has not denied the fact that above flat was not purchased by her but was purchased by Technosys Services Pvt. Limited. The AO in the Assessment Order has made addition for unexplained investment of above flat in the hands of Appellant which was partially confirmed in preceding para which clearly prove that Appellant was owner of above premises and lease rent is required to be taxed in the hands of Appellant only more particularly, when Appellant has not rebutted the observation of AO that rent deposit of Rs. 1,50,OOP was received on 28th July, 2006 by her vide cheque drawn in favour of UTI Bank. The Appellant has not even proved that above rent is already offered to tax by Technosys hence claim of Appellant that such income cannot be taxed in her hand is not accepted and addition of Rs. 1,69,050 is confirmed. The related ground of appeal is dismissed.”

7.

Before us, the counsel for the assessee submitted that the ld. CIT(A) has erred in facts and in law in disregarding the additional evidence placed on record by the assessee during the course of appellate proceedings. Further, the counsel for the assessee submitted that ld. CIT(A) erred in not appreciating that the entire investment of Rs. 16,50,000/- in Poineer Residency-II was made by way of account payee cheques of various dates and hence the investment was fully explained by the assessee. Further, the assessee had also given a detailed account of source of such investment duly

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 6 Dr. Anamika Gupta vs. DCIT

supported by affidavits of the concerned persons. Not only this, the assessee has also explained the source of source of such investments and has therefore proved and established the identity of their donors, their creditworthiness and also the genuineness of the transactions. However, the ld. CIT(A) has absolutely ignored the evidence placed on record by the assessee and proceeded and confirmed the addition in the hands of the assessee. Further, so far as addition on account of “income from house property” is concerned, the counsel for the assessee submitted that the entire addition has been made on a purely notional basis. The ld. CIT(A) failed to appreciate that the “leave and license agreement” was entered into between M/s. Technosys Services Pvt. Ltd. and M/s. Anil Enterprises and the assessee was not a party to this rent agreement in the first instance. Further, notably, this leave and license agreement was available with the Assessing Officer at the time of search and this fact was well within the knowledge of the Assessing Officer. Still, disregarding the aforesaid evidence, the ld. CIT(A) proceeded to confirm the aforesaid additions in the hands of the assessee.

7.1 Accordingly, the counsel for the assessee submitted before us that since the ld. CIT(A) has passed an order completely disregarding the substantial evidence placed on record by the assessee to prove the source of investment and therefore, in the interest of justice, the matter may be set aside to the file of ld. CIT(A) for de-novo consideration after giving due opportunity of hearing to the assessee to present her case on merits. The ld. Departmental Representative has also not objected to the matter being restored to the file of ld. CIT(A) in the interest of justice and looking into the

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 7 Dr. Anamika Gupta vs. DCIT

facts of the instant case. Accordingly, in the interest of justice, the matter is being set aside to the file of ld. CIT(A) to pass a fresh order after giving the assessee due opportunity to present her case on merits and produce all supporting documents in support of her case.

8.

In the result, the appeal of the assessee is allowed for statistical purposes for assessment year 2007-08.

9.

We observe that for assessment year 2010-11 and 2011-12, the Assessing Officer made an addition of Rs. 18,75,000/- and Rs. 13,50,000/- on account of unexplained investments in housing project of UPAVP’s Vridavan Yojna No. -3. The Assessing Officer held that the assessee had made investments in the aforesaid housing project, spread over two assessment years i.e. assessment year 2010-11 and assessment year 2011-12 the source of which remained unexplained. The aforesaid additions were confirmed by the ld. CIT(A).

10.

Before us, the counsel for the assessee submitted that the entire investment was duly explained by the assessee before ld. CIT(A), however, he ignored the detailed supporting evidence place on record and proceeded to confirm the addition in the hands of the assessee.

11.

Accordingly, in the interest of justice, this issue is being set aside to the file of ld. CIT(A) for de-novo consideration after the due opportunity of hearing to assessee of allowing the assessee to place all supporting material/evidence in support of investment in the aforesaid housing project.

I.T(SS).A No. 188, 190 & 191/Ahd/2019 A.Y. 2007-08, 2010-11 & 2011-12 Page No. 8 Dr. Anamika Gupta vs. DCIT

12.

In the result, the matter for assessment years 2010-11 and 2011-12 is restored to the file of ld. CIT(A) with the aforesaid directions.

13.

In the combined result, all the three appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 12-05-2023

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 12/05/2023 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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