MRS NEELAM VIJAY DAND,MUMBAI vs. ITO WARD 29(2)(4), MUMBAI

Date of Hearing – 04/02/2025 Date of Order – 06/02/2025

O R D E R PER SANDEEP SINGH KARHAIL, J.M. 1. The assessee has filed the present appeal challenging the impugned order dated 05/12/2024, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2015-16.

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1. The Assessing Officer erred in making an addition of Rs.70,45,500/- under section 69 of the Income Tax Act, 1961 on the allegation that the appellant made on money payment to the builder during the year for purchase of property. It was submitted that all payments have been effected through bank and confirmation to that effect was submitted. The learned CIT(A) NFAC erred in upholding the same.”

3. At the outset, we find that the learned CIT(A) dismissed the appeal filed by the assessee against the addition of INR 70,45,500 under section 69 of the Act on the basis that the assessee made an on-money payment to the builder for the purchase of property, by observing as follows: –

“1. The grounds of appeal object to addition of Rs. 7045500/- being on money paid u/s 69 of the I T Act, 1961. As per the records mentioned in the reasons recorded for initiation of proceedings u/s 147, the assessee has paid Rs.7045500/- for purchase of the FLAT NO.F.51 in the building named Runwal Greens while the agreement value of the said property was Rs.88, 14,500/-. In the backdrop of the above admitted preposition of law, it would be reiterated that the statements given by the Director establish that the assessee had paid cash of Rs. 7045500/- in the shape of on-money for purchase of that flat. Thus the same do constitute the substantial circumstantial evidence that the assessee had paid Rs.7045500/- in cash to the builder. Hence taking these facts into account as the assessee had not furnished any explanation of the source of the aforesaid expenditure, The AO considered the same as unexplained investment u/s 69 of the I T Act, 1961. In view of the above Rs.7045500/- being payment made in cash to the builder during the year under consideration is added to the total income of the assessee as income from other sources. The addition of Rs.7045500/- u/s 69 is confirmed.”

4. From the aforenoted findings of the learned CIT(A), vide impugned order, it is evident that neither the detailed submissions filed by the assessee were considered by the learned CIT(A) nor material found during the search, on the basis of which re-assessment proceedings were initiated in the case of the assessee, were examined by the learned CIT(A). During the hearing, the learned Authorised Representative submitted that the assessee filed its submissions on 15/11/2022 and 30/11/2024, copies of the same were furnished before us, which have not been considered by the learned CIT(A) and the additions made by the AO were merely affirmed.

5. It is trite that the power of the learned CIT(A) is co-terminus to the AO, however, in the present case the learned CIT(A) did not examine any of the contentions raised by the assessee and nor call for any further information to upheld the addition made by the AO. Therefore, in view of the above, we deem it appropriate to restore the issues raised in the present appeal to the file of the learned CIT(A) for de novo adjudication after examination of all the documents/submissions filed by the assessee. The learned CIT(A) shall be at liberty to call for any further information from the assessee and in this regard, the due opportunity to respond be also provided to the AO as per law. Needless to mention, no order shall be passed without affording the reasonable and adequate opportunity of hearing to the parties. With the above directions, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes.