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Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
PER SUDHANSHU SRIVASTAVA, JM: This appeal is preferred by the assessee against order dated 21.11.2017 passed by the Learned Commissioner of Income Tax (Appeals)-IV, Kanpur {CIT(A)} for Assessment Year 2012-13.
2.0 The brief facts of the case are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) was conducted on 15.10.2013 on the premises of the assessee comprising Dkrrish Group of cases. During the course of search & seizure operation, certain incriminating documents were found and seized. According to these documents, the assessee had purchased four properties which are as under:
Page No. Annexure Date of Amount of Share of purchase Purchase the assessee in the purchase Page no.75 LP-7 15/03/2012 1304000 1304000 to 79 Page no.54 LP-7 27/02/2012 3500000 700000 to 60 Page no.28 LP-7 27/02/2012 3500000 700000 to 34 Page no.61 LP-24 27/02/2012 3500000 700000 to 67 Total Payment made by the assessee 3404000 2.1 As per the Assessing Officer (AO), the investment made by the assessee in these properties amounted to Rs.27,04,000/-. The assessee was asked to provide the details of sources of these investments along with the documentary evidences of these investments but since the assessee failed to provide the required details, addition of Rs.27,04,000/- was made u/s 69 of the Act to the income of the assessee and the assessment was completed at an income of Rs.30,61,390/- u/s 143(3)/153C of the Act.
2.2 The assessee’s appeal before the Ld. CIT(A) was partly allowed wherein the Ld. CIT(A) gave a relief of Rs.13,04,000/- to the assessee. Thus, the Ld. CIT(A) sustained an addition of Rs.14,00,000/-. While passing the impugned order, the Ld. CIT(A) gave a categorical finding that the addition made by the Assessing Officer was sustainable u/s 56(2)(vii)(b)(i) of the Act to the extent of Rs.14,00,000/-.
2.3 Aggrieved, the assessee has now approached this Tribunal and has challenged the action of the Ld. CIT(A) by raising the following grounds of appeal:
“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the action of Ld. AO in making addition of Rs.14,00,000/- and that too u/s 56(2)(vii)(b)(i) and has further erred in directing the assessing officer to compute the addition under the said section and that too by recording incorrect facts and findings and in violation of principles of natural justice.
That in any case and in any view of the matter, action of Ld. CIT(A) in sustaining the action of Ld. AO in making addition of Rs.14,00,000/- and that too u/s 56(2)(vii)(b)(i), is bad in law and against the facts and circumstances of the case.
That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in charging interest u/s 234A, 234B, 234C and 234D of Income Tax Act, 1961.
That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”
3.0 At the outset, the Ld. Authorized Representative (AR) submitted that the Assessing Officer had made the addition u/s 69 of the Act as being unexplained investment whereas the Ld. CIT(A), while partly allowing the assessee’s appeal had observed that the addition was to be sustained to the extent of Rs.14,00,000/- u/s 56(2)(vii)(b)(i) of the Act. He drew our attention to page-6 of the first appellate order and submitted that the Ld. CIT(A) has invoked the provisions of Section 56(2)(vii)(b)(i) of the Act without giving the assessee any show cause notice in this regard and, therefore, the principle of natural justice was not followed. The Authorized Representative prayed that the issue should be restored to the file of the Assessing Officer for being examined afresh.
4.0 Per contra, the Ld. CIT-DR had no objection if the matter was being restored for fresh examination.
5.0 Having heard both the parties and having gone through the impugned order, we do find force in the submission of the Ld. Authorized Representative that the Ld. CIT(A) has invoked provisions of Section 56(2)(vii)(b)(i) of the Act without giving the assessee an opportunity of hearing in this regard whereas the initial addition had been made u/s 69 of the Act. Therefore, in the interest of substantial justice, we restore this issue to the file of the Assessing Officer for being examined afresh after giving proper opportunity to the assessee to present its case.
6.0 In the final result, the appeal of the assessee stands allowed for statistical purposes.
Above decision was announced on conclusion of Virtual Hearing on 7th July, 2021