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Facts
The assessee filed a return disclosing Long Term Capital Gain on sale of a showroom. However, the AO, based on information about deposits in the assessee's bank account, issued a notice u/s 148 and made an ex-parte addition. The property in question was a SCO which was sold for Rs. 61 lacs, with sale consideration reflected in the bank statement.
Held
The Tribunal held that the AO failed to examine the assessee's record and the Income Tax Return, passing a non-speaking order. The deposits in the bank account represented the sale consideration of the property, and the re-opening of assessment was not well-founded as the AO did not have complete details.
Key Issues
Whether the re-opening of assessment was justified and whether the additions made by the AO were on merit, considering the assessee had disclosed the income.
Sections Cited
148, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER RAJPAL YADAV, VP
The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 20.05.2024 passed for assessment year 2011-12.
The assessee has taken 8 grounds of appeal, however, his grievance revolves around two issues, namely ; A.Y.2011-12 2 a) The ld.CIT (Appeals) has erred in upholding the re-opening of assessment u/s 148/147 of the Income Tax Act. b) The ld.CIT (Appeals) has erred in confirming the addition of Rs.69,75,770/-.
3. The brief facts of the case are that assessee has filed his return of income on 19.07.2011 and duly disclosed Long Term Capital Gain on sale of a showroom. However, without taking cognizance of this return, the AO simply, on the basis of an information exhibiting deposits in the Saving Bank account of the assessee, has issued a notice u/s 148 of the Income Tax Act. The AO, by way of ex-parte assessment order dated 22.12.2018 has made the addition of Rs.69,75,768/- which, according to the AO was deposited in the Saving Bank account with ICICI Bank. Though order of the ld.CIT (Appeals) is running into 33 pages but his contribution is only from page No. 30 to 33. Rest is the reproduction of written submissions but he concurred with the Assessing Officer.
With the assistance of ld. Representative, we have gone through the record carefully. It has been brought to our notice that assessee and his wife Smt. Aman Kaur were owners and in possession of a SCO bearing No. 9 which was A.Y.2011-12 3 three storey alongwith a basement. This property was sold by the assessee for a consideration of Rs.61 lacs. The amount has been received by the assessee through Account Payee Cheque No.468822 dated 24.04.2010 Rs.9,50,000/- and Cheque No.468821 dated 25.04.2010 Rs. .9,50,000/- Rs.39,00,000/- and others. These amounts have been deposited with ICICI Bank which are duly reflected. The Bank Statement duly indicate the receipts of the amount alongwith transaction ID. The stand of the assessee is that this sale consideration has been deposited in the bank account and therefore, there is no unexplained cash credit. Since it was an ex-parte assessment order, therefore, these details were not before the AO but these were brought to the notice of ld.CIT (Appeals) who also did not take cognizance of these aspects.
Before us, ld. counsel for the assessee initially did not place on record complete bank statement. We have directed the ld. counsel for the assessee to file the complete copy of the bank statement so that a reconciliation can be made with regard to the availability of the funds vis-à-vis deposits made by the assessee. Earlier, ld. counsel for the assessee has submitted the statement from 01.04.2010 upto A.Y.2011-12 4 17.05.2010, however later on, complete bank statement has been placed on record.
With the assistance of ld. Representative, we have gone through this material. We have verified this fact and satisfied that deposits made by the assessee represent sale consideration of SCO No. 9. This fact is evident if we compare the cheque number in the bank statement and in the Sale Deed. Apart from the above, we are of the view that AO even failed to examine the assessment record of the assessee. He has passed a very non-speaking order without taking cognizance of the Income Tax Return filed by the assessee, he simply treated the information percolated to him as a gospel truth and without making an analysis of the assessment record of the assessee. The assessee has disclosed Long Term Capital Gain on sale of this capital asset. Had the AO verified this aspect, he would have not made any addition. The ld. AO, on the basis of that information, straight away reopened the assessment without making analysis of the information with the returns of the assessee. Thus, re-opening is also not well founded. Rather it is to be observed that AO was not possessing complete details before formation of the belief that income has A.Y.2011-12 5 escaped assessment. Accordingly, we quash the re- assessment order as well as delete the additions on merit.
In the result, appeal of the assessee is allowed.
Order pronounced on 16.03.2026.