RITESH AGGARWAL,MUMBAI vs. ITO - 16(3)(3), MUMBAI

3 In appeal, the l [CIT(A)] granted part additions sustained preferred the prese grounds as reproduce 3. Before us the paperbook containing 4. The ground No. of the principle of n pressed and therefore 5. In Ground No. reassessment proce preconditions for ini not duly satisfied. It assessee that the ent he termed as "mere h evidence on record to payment in cash, no recipient affirming th was therefore conten was unsustainable unsubstantiated fact IT learned Commissioner of Incom t relief to the assessee. Being a by the learned CIT(A), the ent appeal before the Tribun ed hereinabove. learned counsel for the as g pages 1 to 64. 1(one) of the appeal relates to a natural justice. This ground of e same is dismissed as infructuo 2, the assessee has assailed th eedings on the plea that itiation and completion of reas t has been urged by learned tire edifice of the reassessment r hearsay". According to him, ther o establish that the assessee h or is there even any statemen he receipt of such cash from t nded that the very initiation o in law, being founded on no s. Mr. Ritesh Aggarwal 5 TA No. 200/MUM/2024 me Tax (Appeals) aggrieved by the e assessee has nal, raising the ssessee filed a alleged violation appeal was not ous. he validity of the the statutory ssessment were counsel for the rests upon what re is no tangible ad in fact made nt of the alleged the assessee. It of reassessment on-existent and 5.1 Per contra, lea that the reopening w founded upon speci credible official sourc contended that the directly relatable to Assessing Officer, ac justified in forming t support of his submi Hon’ble Supreme Co Rajesh Jhaveri Stock wherein it was held proceedings, what is material and not con 5.2 We have caref perused the record. I challenged the valid learned CIT(A). The additional ground be the fact that the gr necessitate investigat of objection from the admitted by way of or IT arned Departmental Representa was not premised upon conje ific and tangible information r ce, namely, the Income-tax Offic information was not general the assessee, and that on suc cting as a prudent and reasona the requisite belief of escapemen ission, reliance was placed upon urt in Assistant Commissioner k Brokers Pvt. Ltd. [(2007) 291 that at the stage of initiation o required is a bona fide belief ba clusive proof of escapement of in fully considered the rival su It is pertinent to note that the a dity of reassessment proceedi ground, therefore, could be ur efore this Tribunal. However, h round is purely legal in nature tion into fresh facts, and in view e Departmental Representative ral plea. Mr. Ritesh Aggarwal 6 TA No. 200/MUM/2024 ative submitted ctures but was received from a cer, Mumbai. He in nature but ch material, the able person, was nt of income. In n the decision of of Income-tax v. ITR 500 (SC)], of reassessment ased on relevant ncome. ubmissions and assessee had not ings before the rged only as an having regard to e and does not w of the absence , the same was 5.3 The foundation reasons recorded by Act. Since the asses reasons on the grou becomes necessary to Reason reopening t (P The assessee h Rs.8,89,570/- The informatio Mumbai. The Income ta Realtors (PAN: business as b Acres” in Bicho A survey action V.K.Realtors b survey, the sur of the said doc V.K.Realtors fo the statement recorded which which is over sale of flats in The assessee V.K.Realtors, th Flat No. Name of the Beneficiaiy 1 Ritesh Aga The assessee, believe that am IT n of the reassessment proceedi the Assessing Officer under Se ssee has challenged the very v und that they rest upon non-e o reproduce them as under: “ORDERSHEET ns recorded u/s 148(2) of the Act, 1961for the assessment in the case of Ritesh Aga PAN : AAPPA6828R) for A.Y. 2016-17 has filed return of income for A.Y. 2016-17 on total income. n has been received from Office of the Incom ax Officer 25(1)(4), Mumbai has given a fi :AAJFV9968R) is a partnership firm and e builders and developers and developed a p olim, Goa. n u/s,133A of the act was conducted at busi y the ITO-WD-2(3), Panaji on 03/09/2015. rvey team impounded certain incriminating do cuments revealed that the same pertained to or the project “Green Acres”. Based on the i of Sh. Kunal Naren Kuwandekar(Partner h established that M/s. V.K.Realtors has rece and above the agreement value/booking va this project. has paid part consideration in cash for pu he details of which are as under: e y PAN Cash given app impounded mat rwal AADPA6828R 8,88,776/- Ritesh Agarwal, is one the beneficiary. Ther mount of Rs.8,88,776/- has escaped assessm Mr. Ritesh Aggarwal 7 TA No. 200/MUM/2024 ings lies in the ction 147 of the validity of such existent facts, it r rwal n 27.10.2016 declaring me-tax Officer 25(1)(4), finding that M/s. V.K. engaged in real estate project namely “Green iness premises of M/s. During the course of ocuments. The contents o sale of flats by M/s. mpounded documents, of the assessee) was eived on money in cash lue shown against the urchase of flat to M/s. pearing in terial refore, I have reason to ment for A.Y 2016-17 in the case of the u/s 148 r.w.s.1 Approval u/s 1 5.4 A careful perus the course of a surve the business premis documents were im cash from customers Acres”. The statemen the said firm, was re receiving cash over a disclose such receipt along with details of specifically figured w payment of ₹8,88,776 5.5 The law laid d Brokers Pvt. Ltd. (sup of notice under Sect material is not to formation of a prima is whether a reas information, could information emanate Income-tax Departm IT assessee. Thus, 1 am satisfied that this is a 147 of the I.T Act, for A.Y. 2016-17. 151(1) of the 1. T. Act is solicited in this case f sal of the reasons recorded reve ey conducted under Section 133 es of M/s V.K. Realtors, Panaj pounded indicating receipt of s in respect of flats sold in its nt of Shri Kunal Naren Kuwand ecorded, in which he admitted and above the recorded value an ts to tax. He also furnished a li f cash received, in which the a with respect to flat No. A-302, 6/-. down by this Court in Rajesh pra) makes it clear that at the st tion 148, the sufficiency or cor be examined, but only its re a facie belief of escapement of in onable person, in possession form such belief. In the pre d from a lawful survey action co ment itself, in the regular d Mr. Ritesh Aggarwal 8 TA No. 200/MUM/2024 a fit case to issue notice for A.Y. 2016-17.” eals that during 3A of the Act at ji, incriminating f “on-money” in s project “Green dekar, partner of d the practice of nd undertook to ist of customers assessee’s name reflecting cash h Jhaveri Stock tage of issuance rrectness of the elevance to the ncome. The test n of the said esent case, the onducted by the ischarge of its statutory duties. The the assessee, and cle the recorded consider 5.6 In these circum the reassessment p existent material can Assessing Officer ha upon which he coul chargeable to tax h proceedings are, ther ground no. 2 of the a 6. The ground No. 88,776/-made by the for purchase of flat Goa. 6.1 The facts, bri proceedings, the As requiring the assess ₹8,88,776/- allegedly the agreement value called upon to show c treated as unexplain 69B of the Income-ta IT e information was specific, dir early indicated payment of cash ration. mstances, the contention of th proceedings were based on he nnot be sustained. We are sa ad before him relevant and cr ld reasonably entertain the bel had escaped assessment. The refore, held to have been validl appeal is accordingly dismissed. 3(three) of the appeal relates to e Assessing Officer in relation t in ‘Green Acres’ real estate pr iefly stated, are that during ssessing Officer issued a sho see to explain the source of ca y made to M/s. V.K. Realtors, e of the property. The assess cause as to why the said amoun ned investment within the mea ax Act, 1961. Mr. Ritesh Aggarwal 9 TA No. 200/MUM/2024 rectly related to h over and above e assessee that earsay or non- atisfied that the redible material lief that income e reassessment ly initiated. The o addition of ₹ 8, o cash payment roject at Panaji, g reassessment ow-cause notice ash payment of over and above see was further nt should not be aning of Section 6.2 In response, th any such cash paym had been issued by t no registered sale a assessee intended t contended that the to was ₹29,43,296/-, o approximately 88% cheque by 25th Janu 20th November, 2012 6.3 The Assessing explanation of the a during the course o including the written partner, Shri Kuna customers and cash Officer noted that the of flat A-302, against 6.4 To further corr under Section 133(6) his reply dated 19th booking of flat A-3 assessment order, le IT he assessee categorically denie ment. It was submitted that an the builder on 22nd November agreement had yet been execu to dispose of the property. otal cost of the flat, as per the out of which a sum of ₹25,7 of the cost, had already been uary, 2014. A copy of the allotm 2 was also placed on record. Officer, however, was not sat assessee. Relying upon the mat of survey in the case of M/s. n statement dated 21st Septem al Kuwadekar, wherein a un h received had been furnished e assessee was specifically show t which cash of ₹8,88,776/- was roborate, the Assessing Officer of the Act to Shri Kunal Kuwad h November, 2019, confirmed 302. The said reply, as ex aves no ambiguity on the admi Mr. Ritesh Aggarwal 10 TA No. 200/MUM/2024 ed having made allotment letter , 2012 and that uted, since the It was further allotment letter, 79,106/-, being n discharged by ment letter dated tisfied with the terial unearthed . V.K. Realtors, mber, 2015 of its nit-wise list of , the Assessing wn as purchaser s recorded. r issued notice dekar, who, vide d the assessee’s xtracted in the ission of receipt of cash by the buil extracted as under: "2. Yes we a Green Acres concerned we Agreement w of Rs.29,43,2 The differe agreement v deposit tow which is pay cheque paym Rs.8,88,776/ 4. As stated a Aggarwal wh 6.5 The Assessing income filed by M/ disclosure of additio had been made, wit statements. The re reproduced as under “6.4 In suppo has enclosed statements of same, it is se effect of decla from custome agreement va received from Realtors have on sale of fl A.Y:2016-17 proceedings IT lder. For ready reference, sai agree that Mr. Ritesh Aggarwal has boo Project in Goa. As far as copy of sa e have to state that till that we have not with Mr. Ritesh Aggarwal. The Agreement 96/- and he has paid all this amount till ence between the payment receive value of Flat is because of VAT & Serv wards Society Maintenance, Electrici yable over and above the sale price. B ment, we had been committed a cash /- by Mr. Aggarwal. above Cash Components of Rs.8,88,776/ ich is included in the Income of M/s. V. K ( emph Officer also referred to the re /s. V.K. Realtors for A.Y. 20 onal income on account of suc th supporting entries in the r elevant finding of the Assess : ort of the aforesaid submission, Shri Kuna copy of revised return of income and rev f M/s. V. K. Realtors for A.Y:2016-17. On een that in the Notes to Accounts at Claus aration of additional income on account ers on sale of flat which was over an alue for sale has been given by inflating m customers. This clearly settles the fact th e declared cash payments received from lat in Green Acres, Goa in its return and as per the submissions made durin by its partner Shri Kunal Kuwadek Mr. Ritesh Aggarwal 11 TA No. 200/MUM/2024 d paragraph is ked flat inour ale agreement executed Sale t value of Flat date. ed and the rvice Tax and ity & Water Besides above h payment of /- from Ritesh K. Realtors." hasis supplied) evised return of 16–17, wherein ch cash receipts revised financial sing Officer is al Kuwadekar vised financial perusal of the se 8(II)(iii), the cash collected nd above the the advances hat M/s. V. K. its customers of income for ng the survey kar, cash of Rs.8,88,776/ assessee i.e. said fact was response to wherein he h financials evi cash received 6.6 On this basis, assessee had in fact reflected in his book unexplained investme 7. In appeal, the a been undertaken a schedule before the such documents cou on account of techn portal. The learned Officer had conducte record the sworn sta practice of acceptin referred to the cash p K. Realtors for A.Y. 2 list of the customers vide letter dated 21. Mr. Ritesh Aggarwal project and cash pay The Ld. CIT(A) noted IT was received by M/s. V. K. Realt Shri Ritesh Aggarwal on sale of flat A-30 s further confirmed by Shri Kunal Kuw this office notice u/s.133(6) of the as submitted the revised return of incom idencing the declaration additional receip d on sale of flats therein for A.Y:2016- 17. , the Assessing Officer concl t made the said cash payment, ks of account, and accordingl ent under Section 69B of the Ac assessee reiterated that no cash and filed the allotment letter learned CIT(A). It was further ld not be produced before the A nical reasons, namely, closure CIT(A), however, noted that ed enquiries under Section 133 atement of Shri Kunal Kuwadek ng cash was admitted. The L payment received and offered to 2016-17. The Ld. CIT(A) also re which was furnished by Mr. Ku .09.2015 specifying the name as purchaser of the flat No. A- yment of Rs. 8,88,776/- again that merely filing allotment lett Mr. Ritesh Aggarwal 12 TA No. 200/MUM/2024 tors from the 02 to him. The wadekar in his 1.T.Act, 1961 me and revised pts by way of ” luded that the which was not ly treated it as ct. transaction had r and payment contended that Assessing Officer e of the online the Assessing 3(6) and had on kar, wherein the Ld. CIT(A) also o tax by M/s. V. ferred unit wise unal Kuwadekar of the assessee 302 in the said st the said flat. ter and payment schedule received fr enough to discharge of the Ld. CIT(A) is re “6.3.2 The app submission, dt cash transact Realtors. It wa investor in the p The agreement invest more on also contended Payment the as was not paid b VK Realtors w cross verificati law. 6.3.2 Allotmen from M/s. V.R payment sche submission an and furnishing was not made failed to furni allowed to cros The assessee/ payment was n cash payments do so both bef the First Appe above addition evidence collec appellant's con and dismissed.

Having conside material on record, examination for more IT rom M/s. V. K. Realtors was the onus of cash payment. The eproduced as under: ellant has submitted in this regard vi t.29/01/2021 and reiterated that t ions taken place between him a as also contended that the appellant project and invested for the purpose o t was still pending and as he was no that flat, stamp duty for same was no d in the Statement of Facts that re ssessee/appellant Strongly protested y him and he was not allowed to cros which is against the natural justice, ion and without documentary eviden nt letter, payment schedule stated t R. Realtors in this regard are attach edule to M/s. V.K. Realtors. Th d its attachments were perused. Me g of copy of allotment letter, ledger ex e by the assessee/appellant. The a ish any evidence to the effect that ss examine the entity M/s. V.K. Realto /appellant was supposed to prov not made by him or to furnish source s made before the A.O, But, the asse fore the Assessing Officer and subseq ellate Authority, whereas the AO h n u/s.69B of the Act on the basi cted by him u/s 133(6) of the A ntention in the form of Ground No.4 is n .” ered the rival submissions and , we find that the issue re e than one reason. Firstly, whil Mr. Ritesh Aggarwal 13 TA No. 200/MUM/2024 s not sufficient relevant finding ide his written there was no and M/s-V.K. t was just an of capital gain. ot interested to ot paid. It was egarding Cash that the same ss question the oath without nce is bad in to be received hed along-with he appellant's re submission xtract payment appellant even t he was not ors by the A.O. ve that cash es for the said essee failed to quently before had made the is of concrete ct. Thus, the not acceptable d examined the equires a fresh le the Assessing