GINNI DEVI,NEW DELHI vs. DCIT, NEW DELHI

ORDER PER BENCH : These cross appeals filed by the assessee and Revenue are directed against the order of the Commissioner of Income Tax (A)-

2 29, New Delhi dated 22.02.2017 relating to Assessment Year 2012-13.

2. That on facts and circumstances of the case and in law the Order passed by Ld. CIT(A) is illegal and bad in law as the same has been passed without providing reasonable opportunity of being heard to the Appellant.

3. That on facts and circumstances of the case and in law the Ld. CIT (A) was not justified in upholding the contention of the AO for making addition of Rs.55,67,131/- to the returned income of the assessee by treating the amount being investment made by the assessee for renovation of its properties which has been duly recorded in the books of accounts of the assessee as income earned from undisclosed sources/unexplained investment. 4. That the appellant craves leave to add, alter, amend, and modify any of the grounds of appeal at the time of hearing or earlier.”

4. On the other hand, grounds raised by the Revenue in for A.Y. 2012-13 reads as under:

1. “That on the facts and circumstances of the case, the Ld. CIT(A) had erred in law as well as facts in deleting the addition of Rs.1,63,982/- made by assessing officer on account of commission income.

2. That on the facts and the circumstances of the case, the Ld. CIT (A) has erred in law as well as facts in deleting the addition of Rs. 13,33,880/- made by the assessing officer on account of rental income. 3. That on the facts and circumstances of the case, Ld. CIT(A) has erred in law as well as facts in deleting the addition of Rs.1,50,00,000/- made by the assessing officer on account of Short Term Capital Gain. 4. On the facts and in the circumstances of the case, the Ld. C1T (A) has erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon’ble Supreme Court. 5. On the facts and in the circumstances of the case, the Ld. C1T (A) has erred in law and on facts in arriving at the conclusion that the words ‘total income ’ as used in 4 section 153A would only mean undisclosed income discovered from seized/incriminating material.

6. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in law and on facts in adopting restrictive and pedantic interpretation of the scope of assessment u/s 153A of the Act.

7. On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in arriving at the conclusion that the words ‘total income ’ as used in section 153A would only mean income unearthed during search when the decision of the Hon’ble High Court of Karnataka in the case of Canara Housing Development Company vs DCIT dated 09.08.2014 has held that total income includes income unearthed during search and any other income.

8. That the grounds of appeal

are without prejudice to each other.

9. The appellant craves leave to add, amend, alter or forgo any ground(s) of appeal before or at the time of hearing of the appeal.” We first proceed with assessee’s appeal:

5. Before us, assessee has filed an application for admission of additional evidence under Rule 29 of Appellate Tribunal Rules, 1963. He submitted that the addition of Rs.55,67,131/- was made by AO by treating the increase in value of immovable property on account of renovation as unexplained investment. The addition was made, as AO was of the view that assessee has not filed statement of affairs, narration of bank account and other relevant documents. The aforesaid addition made by the AO was upheld by CIT(A). Before us, Learned AR submitted that no opportunity was given to the assessee for explaining the source of investment at the assessment stage and no show-cause notice

5 was issued on this particular addition. He submitted that at the appellate stage since assessee was confident of succeeding in appeal on the basis of ratio laid down by Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla, 61 taxmann.com 412, as it was under the impression that for A.Y. 2012-13 being a non- abated assessment year no addition could be made. He submitted that however CIT(A) noted that assessment proceedings for the Year 2012-13 is pending and hence the ratio of the decision in the case of Kabul Chawla (supra) was not applicable. He therefore submitted that CIT(A) decided that all the grounds on merits but as the assessee could not place evidence to support the case with respect to the source of expenditure on renovation of shops, assessee now wishes to bring on record the necessary evidence. He therefore submitted that in the interest of justice, the additional evidences be admitted and the matter be remitted back to the lower authorities for verification.

6 Considering the totality of the facts that no opportunity was given to the assessee by the AO for explaining the source of investments, we are of the view that in the interest of justice one more opportunity be granted to the assessee to place on record the necessary evidences to support her case. We therefore admit the additional evidence and restore the additional evidence to the file of AO to examine the same and thereafter decide the issue on merits in accordance with law. Needless to state that AO shall grant adequate opportunity of hearing to the assessee. Since we are restoring the issue to the file of AO, the other grounds raised by the assessee and the grounds raised by Revenue are not being adjudicated at present and the same are also remitted to AO. Thus the grounds of Revenue and assessee are allowed for statistical purposes.

Order pronounced in the open court on 16.08.2021