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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
1. The revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals) -32 Mumbai passed u/s 143(3) and 250 of the Income Tax Act, 1961. The revenue has raised the following grounds of appeal.
a) Whether on the facts and circumstances of the case and in-law, the Ld. CIT(A) erred in deleting the addition of Rs.1,48,46,248/- declared by the assessee in his statement recorded under section 131 of the Act.
Mr. Jamil Ahmed Qureshi, Mumbai - 2 -
(b) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the statement recorded during the survey proceeding was only after the verification of details and records and after confronting the assessee. (c) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) ignored the fact the during the course of survey proceedings his statement was recorded wherein his books of accounts was rejected due to improper maintenance. The disclosure of the business income made of Rs.1,48,46,248/- was not disclosed in his return of income. Hence, the assessee had intention to conceal the said income which was added to the total income during the course of assessment proceedings. (d) Whether on the facts and circumstances of the case and in-law, the Ld. CIT(A) erred in deleting the addition of Rs.1,40,78,000/- under section 69C of the Act as unexplained expenditure. (e) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) ignored the fact that though the deeds for the purchase shows that the plots were purchased by the firm Bagrodia Group of Companies but the assessee failed to show that the firm has accounted for the same in its books of account. (f) The appellant prays that the order of the CIT(A) on the above ground be reversed and that of the Assessing Officer be restored. (h) The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.
The brief facts of the case are that the assessee is engaged in the business as a builder and manpower recruitment agency. The assessee has filed the return of income for the A.Y 2010-11 on 08.09.2010 disclosing a total income of Rs.43,40,134/- and the Mr. Jamil Ahmed Qureshi, Mumbai - 3 - return of income was processed u/s 143(1) of the Act. Subsequently the case was selected for scrutiny under the CASS and notice u/s 143(2) and 142(1) of the Act are issued. In compliance to the notice, the Ld. AR of the assessee appeared from time to time and filed the details. The assessee is carrying business under two proprietary concerns i.e M/s AH construction engaged in redevelopment business and M/s. Kariman Enterprises which is a recruitment agency. There was a survey u/s 133A of the Act at the premises of the assessee. In the course of survey, a statement from the assessee was recorded and the books of accounts were rejected due to improper maintenance. Whereas, the assessee has disclosed the aggregate total income of Rs. 2,46,03,473/- in respect of proprietary concern of M/s AH construction for A.Y 2008-09, 2009-10 and 2010-11. Similarly in respect of second proprietary concern M/s Kariman Enterprises, were the books of accounts were rejected and the assessee has disclosed the aggregate total income of Rs. 30,00,000/- for the A.Y 2009-10 and 2010-11 thus the total business income declared by the assessee in the survey
Mr. Jamil Ahmed Qureshi, Mumbai - 4 - u/sec133A of the Act for the A.Y 2010-11 was Rs. 1,48,46,248/-.
3. During the course of Assesseement proceedings, the assessee was provided ample opportunities but the assessee has not filed the revised return of income for the A.Y 2010-11. Therefore the A.O observed that the assessee does not have intention to file the return of income and worked out the income of the assessee from the construction and redevelopment activity. Since the assessee has not filed any documents in respect of purchase of plots and failed to explain the sources from bank account the A.O. has observed that the assessee has made unexplained investments in the properties and made addition u/s 69C of the Act of Rs. 1,40,78,000/- which is over and above the total income declared by the assessee in the survey proceedings and assessed the total income of Rs. 2,89,24,250/- and passed the order u/s 143(3) of the Acted dated 28.03.2013.
4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) considered the facts, submissions, findings of the A.O
Mr. Jamil Ahmed Qureshi, Mumbai - 5 - and dealt on the disputed issues and granted relief considering the fact that the addition was made without any corroborative evidence. The CIT(A) has admitted the additional evidence under Rule 46A of I T rules and called for the remand report. The CIT(A) considered the facts, remand report and findings of the A.O. and has granted the relief and allowed the assessee appeal. Aggrieved by the CIT(A)order, the revenue has filed an appeal before the Honble Tribunal.
5. At the time of hearing the Ld.DR submitted that the CIT(A) has erred in granting the relief to the assessee irrespective of the facts that the assessee has made declaration of income in the survey operations and failed to file the revised return of income including the income disclosure. Further the income has to be taxed considering the facts and the statement of income disclosed/ recorded during the survey proceedings. The CIT(A) has erred in admitting the additional evidence overlooking the factual aspects and the Ld.DR relied on the order of the A.O. Contra, the Ld.AR supported the order of the CIT(A).
Mr. Jamil Ahmed Qureshi, Mumbai - 6 -
6. We heard the rival submissions and perused the material on record. Prima-facie the Ld. DR contentions are that the CIT(A) has erred in granting the relief overlooking the statement recorded u/s 131 of the Act. Whereas the CIT(A) has considered the facts, additional evidence and remand report and granted the relief. At this juncture, it is appropriate to refer to submissions made by the assessee on the disputed issues and the findings of the CIT(A). We find the CIT(A) has dealt on the disputed issue and deleted the addition and has observed at Para 4.3 to 5 as under:
4.3 As regards ground no. 3 the facts are that some information was received from ITO 19(2)(1), Mumbai wherein it is stated that M/s. Bagrodia Group of companies had purchased two plots of land of the value of Rs. 97 lacs and Rs. 43,78,000 / - totaling to Rs. 1,40,78,000 /-. The conveyance deed was registered through the partner Jamil A. Qureshi (who is the appellant in this case). The payments for the purchase of 2 plots were also made through the bank account of M/s. A.H Construction, proprietary firm of the appellant. The A.O contends that apparently the source of payment is nowhere declared and mentioned in the survey statement and therefore added the same u/s.69C of the Act in absence of any further explanation from the appellant.
Mr. Jamil Ahmed Qureshi, Mumbai - 7 - 4.4 During the course of the appellate proceedings, additional evidence u/s. 46A of the I.T. Rules was submitted vide letter dated 30.07.2014 as under:
"Sub: Application for admission of additional evidence under Rule 46A of the I.T. Rules - Shri Jamil Ahmed Qureshi - PAN - AABPQ1063C Under instruction of our above named client we submit as under :
It is required to accord kind permission for production of additional evidence as the assessee was not provided proper opportunity of being heard. Besides the evidences go to the very root of the matter and have a direct and substantial bearing in determining the correct income and tax liability of the assessee for the year under consideration.
2. It is submitted that A. O. purported to have received information from ITO 19(2)(1) regarding purchase of plot through the Applicant. A.O. had asked for the details regarding purchase of plot for the first time on 20-03- 2013. However, the details could not be furnished as Applicant's brother-in-law suffered heart attack and was hospitalized in very critical condition. Hospitalization bill is attached.
3. Kind permission may kindly be accorded to adduce additional evidences which are complied in the paper book Vol. I. Regarding ground of appeal
no. 4 the source of payments towards purchase of plot were from business receipts and are made from BMC Bank Ade No. 4860, CITI Bank Ade No. 990416-117 & Citizen Co-operative Bank Ade No. which could not produce earlier for the reason stated above are submitted
4. Since the Assessee was prevented by sufficient cause from production of above
Mr. Jamil Ahmed Qureshi, Mumbai - 8 - evidences before. the Ld. AO. It has been held in number of cases including in Keshaw Mills Co. Ltd. Vs. CIT (1965) 56 ITR 365 and Smt. Prabhavati S Shah (1998) 231 ITR 1 (BOM). It is now settled and recognized as Rule 46A that the appellate authority has a right to admit authority has a right to admit additional evidence in the interest of justice.
5. The enclosed paper books are in duplicate with a request to kindly allow an opportunity to the ld. AO to rebut the same in terms of Rule 46(3) We trust your goodself will appreciate our concern and accord the permission to submit additional evidence and oblige.
4.5 The same was forwarded to the A.O vide letter no. CIT(A)-30 / Remand Report/2014-15/35 dated 22.08.2014 and the A.O was directed to make necessary verification, examination and send a report u/s. 250(4) of the Act. Various reminders were sent to the A.O as per record and finally a Remand Report of A.O dated 07.10.2019 was forwarded vide letter no.J.CIT, Rg 22(1)/Remand Report dated 10.10.2019 by the JCIT, Range 22(1), Mumbai, the same is reproduced as under:
Assessment proceedings:
During the assessment proceeding, an addition of Rs. 1,40,78,000/ - u/s 69C of the IT. Act was made based on the following points viz, l. Information was received from ITO Ward 19(2)(1), Mumbai that his assessee M/s Bogrodia Group of companies had purchase two plots land for total value of Rs. 1,40,78,000/- and the conveyance deed was registered through its partner Mr. Jamil Ahmed Qureshi (assessee of Circle 22/1), Mumbai). 'In addition, the payments for the purchase of the said two plots of land
Mr. Jamil Ahmed Qureshi, Mumbai - 9 - were through the bank accounts of M/s AH. Construction (Propriety concern of the assessee Mr. Jamil Ahmed Qureshi).
2. During survey operation the business premises of the assessee on 01.02.2011, the plots of land of the said value of Rs. 1,40,78,000/- appeared nowhere .to be declared.
The assessee's contention is that the purchase was made by the M/s Bagrodia Group of Companies although puyments were made through the bank accounts of the assessee. During assessment proceedings, the assessee was served a Show Cause Notice dated 20.03.2013 to explain the source of payments and the reasons of payment through the bank accounts of the assessee. However, at that time no documents of corroborating evidences were filed and at that matter no reply was submitted in that regard.
Appellate Stage:
At the appeal stage, the assessee submitted fresh evidences in the form of evidence for making payments from - Bombay Mercantile Cooperative Bank A/ C No 1101/4860, CITI Bank A/ C No 0-990416-117 and Citizen Credit Co-operative Bank.
AO's comments:
1. From the submission provided, it is found that all the three aforementioned bank accounts are held by M/s. A. H. Constructions, a proprietorship concern of the assessee Shri Jamil Ahmed Qureshi.
2. Further, ledger accounts of Mr. Jamil Ahemed Qureshi with M/s Kariman Enterprises and M/s A. H.
Mr. Jamil Ahmed Qureshi, Mumbai - 10 - Constructions were furnished to show transfer of money to Banks for issue of cheque for purchase money and also purchase of DD for plots.
3. Now, the moot point is that the payments from Bank accounts of the assessee were not disputed. On the other hand, this very information was initially provided by ITO Ward 19 (2)(1), Mumbai.
It was more important to know why the payments were made from a partner i.e. Shri Jamil Ahmed Qureshi and not from the partnership firm's accounts of M/s Bagrodia Group of Companies.
There was no Power of Attorney issued to the partner to act on behalf of the firm.
Moreover, the plots of land were not found to be entered anywhere in the Books of Accounts of the Bagrodia Group of Companies or the Books of Accounts Shri Jamil Ahmed Qureshi.
In the recent questionnaire (dated 26/ 09/2019) also, assessee was asked clarification regarding these points on which the assessee gave evasive replies and did not produce any supporting documents that were called for.
AO’s question: Explaantion why the payments for the purchase of plots were made from a partner i.e Jamil Ahmed Qureshis bank account and not from the firm M/s Bagrodia Groups bank account.
Assessee's reply - Part payments for purchase of plot were made from partners account as partnership firm M/s Bagrodia group of Companies did not sufficient balance at relevant time and Proprietorship firm of our client M/s A H Construction and balance in the account, hence the part
Mr. Jamil Ahmed Qureshi, Mumbai - 11 - payments were made from Proprietorship firm of our client M/s A H Construction's bank account.
AO's Comment: 'Insufficient funds' for an independent legal entity is not a sufficient explanation to explain payments made for another entity. Shri Jamil Ahmed Qureshi has made payments on 7 occasions with dates ranging between 18/04/2006 and 10/02/2010. It is not a suitable explanation that the Bagrodia Group of Companies was short of funds on all the 7 occasions spanning over 4 long years. Further, it is to be seen that both the entities are distinct in the eyes of the law and tax authorities. Hence, no suitable explanation provided for this basic point. AO's question: Was there any power of attorney issued to the partner Jamil Ahmed Cureshi to act on behalf of the firm for the purchase of plots? If yes, provide a copy of the same.
Assessee's reply - As per section 22 of the Indian Partnership Act, 1932 any partner can enter into transaction on behalf of partnership firm and bind the firm. Covu of agreement is attached herewith which clearly spells out our client has signed the agreement in the capacity of managing partner on behalf of M/s BagrocLia Group of Companies.
AO's Comment: No copies of the registration and purchase agreements have been provided which could prove that Shri Jamil Ahmed Qureshi was acting on behalf of the partnership firm and not in his personal capacity. The assessee mentioned that copy of agreement is attached but the attachment had no such copies. No such documents have been provided in past 5 years and the same question remained unanswered.
Mr. Jamil Ahmed Qureshi, Mumbai - 12 - AO's question: If the purchase of the plots was made for the firm Bagrodia Group then such plots of land must be reflecting in the books of accounts of the Bagrodia Group. Please provide a copy of complete ITR, P&L account and Balance sheet of the firm Bagrodia Group for AY 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12.
Assessee's reply - Books of accounts of M/s Bagrodia group of Companies are not readily available.
AO's Comment: It is a ground taken by the assessee that he was acting on behalf of the firm. He was the managing partner in the firm and signed agreements which were binding on the firm. As per his contention, he even paid money for the firm from his personal accounts for the firms. Hence, the onus was squarely lying on the assessee to prove these unusual grounds that he has taken. However no such documents in the form of books of accounts were provided.
Further, the assessee has been evasive in his earlier replies also. In a submission dated 19/05/2015, the assessee said "With respect to your query regarding Partner's Capital Account in the books of M/s Bagrodia Group of Companies for the AY 2007-08, we submit that the books of accounts for the said year are not readily available".
It is also notable that in the same submission, the assessee said "As no amount was paid from M/s. Bagrodia Group of Companies during the Assessment Year 2010-11 the said plots were not accounted in the books of accounts of M/s. Bagrodia Group of Companies"
AO's question: Provide copies of agreement for purchase, bank transaction details with account statements highlighting the transaction, and copy of registered deed.
Mr. Jamil Ahmed Qureshi, Mumbai - 13 - Similar details to be filed in respect of forfeiture of advance taken for property. Also, provide following details for the sellers of property S.No Name Pan Complete Phone Email Flat Date of Date of Postal Number property purchase property address details Assessee's reply - Copies of agreement are attached herewith. With regard to your quern regarding details of sellers the same is there in agreement cop which is attached.
AO's Comment: Neither such copies of agreements were provided now nor were they provided any time earlier. The attachments didn't have copies of purchase agreements or deeds of property registration. They merely provided receipt vouchers for payments made to A.H. Constructions by some other buyers for some other properties. These are immaterial to this case and are not disputed. The details sought in the table above were also not provided.
AO's question: In your submission you claimed that the first part of payment was made in 2007-08. Provide bank account statement highlighting that transaction. Provide ITR and supporting books of account of the Bagrodia Group of Companies for the relevant assessment year in which such investment is accounted for.
Assessed reply - Details of payment along with copy of bank statement is attached and details of pan merit mentioned in point no. 5 above A's Comment: Bank statement of A.H. Constructions is provided which is not disputed. ITR, Balance Sheet, etc. for AY 2007-08 for either party are not provided which could have shown that the purchases of the plots were accounted for in any of those parties. Hence, it is clear that the plots of land
Mr. Jamil Ahmed Qureshi, Mumbai - 14 - were not entered anywhere in the Books of Accounts of the Bagrodia Group of Companies or the Books of Accounts Shri Jamil Ahmed Qureshi. Same was the finding of the AO earlier in the Assessment Proceedings.
Further, the assessee has been evasive in his earlier replies also. In a submission dated 19/05/2015,the assessee said "With respect to your quern regardinq Partner's Capital Account in the books of M/s Bagrodia Group of Companies for the AY 2007-08. we submit that the books of accounts for the said near are not readily available"
It is also notable that in that submission dated 19/05/2015, the assessee said no amount was paid from M/s. Bagrodia Group of Companies during the Assessment Year 2010-11, the said plots were not accounted in the books of accounts of M/s. Bagrodia Group of Companies Conclusion:
Hence, the fact remains that the purchase of the plots of land was nothing but unexplained investment of the assessee Shri Jamil Ahmed Qureshi. Hence addition us 69C of the Act of Rs 1,40,78,000 made by the Assessing Officer in the Assessment Order dated 28/03/2013 remains completely and fully justified.
Without prejudice to the above, it is respectfully submitted that the addition of Rs 1,40,78,000 which was made u/s 69C of the IT Act as unexplained expenditure in the Assessment Order dated 28/03/2013 as the assessee could not explain source of investment. Now at the appellate stage, the assessee has attempted to explain the source of investment by providing bank account statement and receipts of sale of some other flats. With Mr. Jamil Ahmed Qureshi, Mumbai - 15 - this, the alibi, that the assessee made investments on behalf of the partnership firm Bagrodia Group of Companies gets negated as the assessee has owned up the investments. Further, it is humbly submitted that even if the assessee manages to provide some source of investment then also the addition of Rs 1,40,78,000 would remain sustainable u/s 69B of the IT Act as the investments were not disclosed in Books of Account of Jamil Ahmed Qureshi.
It is sincerely hoped that the reply would satisfy the kind requirement of the Ld. CIT(A) -34, Mumbai.
4.6 The assessee further filed replied as under:
1. Further to our earlier submission our comments with respect to the remand report submitted by ACIT Range 22(1), Mumbai, are as under:
Learned ACIT has stated in his opening comment that assessee had been asked several times to explain and provide supporting documents first letter being sent on 17-10-2014 and latest on 26-09-2019 by writing this it suggest that assessee is not co-operating however we submit that we have furnished the required details much in advance below is the chronological order of our submissions:
Date of Details submission submitted 15.09.2014 Details submitted including bank statement reflecting payments made on behalf of Shri Jamil Qureshi for purchase of property by Bagrodia. This submission was made based upon copy received from CIT(A) seeking remand report from A.O. Details were submitted in advance without letter being issued by the AO. 18.03.2015 AO sought details of investment made and source of investment date fixed was 24-03-
Mr. Jamil Ahmed Qureshi, Mumbai - 16 -
2015. 24.03.2015 We sought adjournment as we were having time barring assessments on 31-03-2015. 06.04.2015 We submitted the details sought by AO vide letter dated 18-03-2015. 19.05.2015 Further details sought were furnished 20.05.2015 Details submitted 26.09.2019 Details were sought by AO 03.10.2019 Details sought were furnished by email. . From the above table it can be deduced that assessee have always co-operated and furnished the required details.
2. AO has not disputed the payments being made from bank accounts of the proprietors hip concerns of Shri Jamil Qureshi, further he has also accepted the source of payments from the proprietorship concern being receipts from sale of flat to Shri Nipun Jhaveri.
AO is only concerned about why payments were not made from Bagrodia Group of Companies, It was explained by the assessee that Shri Jamil Ahmed Qureshi being partner of Bagrodia Group of Companies can always make payment from his proprietorship concerns.
Further he has stated that he wanted to make sure that Shri Jamil Qureshi was acting on behalf of firm or has purchased property in his personal name, therefore he sought power of attorney by firm in favour of Jamil Qureshi.
Mr. Jamil Ahmed Qureshi, Mumbai - 17 - In this respect assessee had submitted that any partner can act on behalf of partnership firm and bind all the partners there is no requirement of power of attorney required to be executed authorizing partners to act on its behalf. Further copy of agreement was furnished by email dated 03-10-2019, copy of mail is attached herewith for your ready reference, which clearly shows the attachments are attached. In any case AO has himself admitted that he got information from ITO 19(2)(1) that M/s Bagrodia Group of Companies has purchased property through its partner Shri Jamil Qureshi and vide questionnaire dated 26-09-2019 AO wanted to verify whether Jamil Qureshi purchased property in the capacity of partner or personal capacity this itself in contradictory statement of AO.
Having accepted the fact that payments for purchase of property been made from bank accounts of proprietorship concerns of Shri Jamil Qureshi during the previous year relevant to assessment ear 2010-11, further the same has been debited to capital account of Shri Jamil Qureshi in the Books of accounts of the proprietorship concerns, further source of payments are from receipts out of sale of flat to Shri Nipum Jhaveri, this all facts are not disputed b y AO.
However, despite accepting the above facts in his conclusion he concluded that purchase of plots of land was nothing but unexplained investment is not conceivable from the facts of the case stated above. It seems that AO got carried away from the fact that M/s Bagrodia Group of Companies have not recorded the same
Mr. Jamil Ahmed Qureshi, Mumbai - 18 - in their books of accounts and Partners capital account in the books of account of M/s Bagrodia Group of Companies are not submitted.
We submit that for making addition in the case of assessee he has to see the source of investment and entries in the books of assessee and if that is explained then no addition can be made in the hands of assessee even if for the sake of argument it is accepted that M/s Bagrodia Group of Companies has not recorded the same in their books of accounts.
Further AO alternatively suggest to make addition under section 69B as Investment not being recorded in the books of assessee, even this stand of the AO is not tenable as AO himself has accepted without dispute that payments been made from bank accounts of proprietorship concerns of Shri Jamil Qureshi during the previous year relevant to assessment year 2010-11, further the same has been debited to capital account of Shri Jamil Qureshi in the Books of accounts of the proprietorship concerns. If this facts are accepted then how come AO says that Investment is not disclosed in books of accounts of the assessee. It is to be kept in mind that any payment on capital account can either be debited of assets account or if the same is incurred on behalf of proprietor then the same be debited to capital account, and the payments made on behalf of Shri Jamil Qureshi is debited to his capital account.
Mr. Jamil Ahmed Qureshi, Mumbai - 19 - In view of the above assessee has explained the nature and source of payments made during the previous year relevant to assessment year 2010-11 towards acquisition of plots by M/s Bagrodia group of Companies, further the same payments having been debited to proprietors capital account same is recorded in the books of accounts, hence additions U/s 69C made by the AO be deleted.
4.7. As regards Ground no. 3, the first issue raised by the A.0 in the remand proceedings is that the registration/purchase agreements have not been provided to prove that Shri Jamil A. Qureshi was acting on behalf of the partnership firm and not in his present capacity. I find that the A. O himself in the assessment order contends that as per information received from ITO 19(2)(1), Mumbai, the conveyance deed was registered through its partner Shri Jamil A. Qureshi. In fact in the assessment order of Bagrodia Group of Companies for A.Y 2010-11 dated 25.03.2012 passed by ITO 19(2)(1), Mumbai wherein also the same addition has been made and appeal in that case is disposed off vide appeal no. CIT(A)-32,Mumbai/10242/2017-18 dated 10.02.2020, the A.O noticed that as per information received u/s. 133(6) of the Act from the Jt. Sub Registrar at Bandra, the said lands were purchased through the partner Shir Jamil A. Qureshi. As mentioned in that assessment order the payments were made through the accounts of the appellant Shri Jamil A. Qureshi. For the first land Rs. 97 lacs total has been paid which includes Rs. 49,50,000 /- paid in A.Y 2010-11 and Rs. 47,50,000 /- paid in A.Y 2007-08. Similarly, for the second land the total of Rs. 43,78,000 / - is paid out of which Rs. 21,89,000 /- is paid in A.Y 2010-11 and Rs. 21,89,000 / - was paid in A.Y 2007-08. For the first land certain amount has been Mr. Jamil Ahmed Qureshi, Mumbai - 20 - paid from the accounts of Bagrodia Group of Companies maintained with Citizen Group Co-operative Bank amounting to Rs. 23,75,000 /- and for the second land 35,02,400/- while the balance are paid from the accounts of the appellant Shri Jamil A. Qureshi. Thus, as regards the payments made through the appellant as a managing partner with Bagrodia Group of Companies is duly established from the assessment order of Bagrodia Group of companies as appearing in the assessment order passed by the A.O in that case and also from the assessment order passed in the case of Shri Jamil A. Qureshi wherein the same information was also received from the ITO 19(2)(1), Mumbai and now admitted by A.O also. Therefore, there is no doubt that the payments are made from the accounts of the appellant and there is nothing on record that there is any undisclosed income in these accounts. So it cannot be said that source of investment is not proved. The second issue raised by the A.O is that these lands are not part of the books of Bagrodia Group of Companies and the fact that whether the land is disclosed in the books of the appellant or not could not be verified on the as the same was not submitted by the appellant contending that the same are not readily available being old. Secondly, whether this is part of capital account of the partner in the books of Bagrodia group of Companies is also not verifiable due to same facts. However, the facts remains that the land is purchased in the name of the Bagrodia Group of Companies through its managing partner Shri Jamil A. Qureshi and part of the payment is also sourced out of the bank accounts of the appellant as per assessment order passed in the case of these two entities. It is also noted that the deed were already called for by the A.0 in the case of Bagrodia Group of Companies and accordingly it was contended that the lands were purchased in the Mr. Jamil Ahmed Qureshi, Mumbai - 21 - name of Bagrodia Group of Companies through the managing partners i.e. the assessee in this case and on that basis only the case of appellant was taken up. Section 69C is reproduced as under:-
"Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the 3 Assessing| Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year.
Provided that, not withstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income."
Looking into the facts of the case, therefore, as source of investment is proved, in my considered opinion, addition u/s. 69C also cannot be sustained. Similarly, the addition now proposed to be made u/s. 69B also cannot be approved as there is no excess expenditure which is not explained. Section 69B is reproduced as under:
"Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, und the assessee offers no explanation about such excess amount or the Mr. Jamil Ahmed Qureshi, Mumbai - 22 - explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory than the excess amount may be deemed to be the income of the assessee for such financial year." Thus, as there is no investment source which is not explained, such addition cannot be made either u/s. 69C or 69B of the Act. Therefore, the addition made by the A.O is deleted. 4.8. Ground no. 4 & 5 are general in nature and hence no comment is made. In the result, the appeal is allowed. 5.
We find that the addition is made by the A.O in the assessment proceedings based on the statement recorded u/s 133A of the Act without any corroborative evidence bringing on record. Further, the A.O has made observations that the books of accounts are rejected during the survey proceedings and whereas he has not rejected the same in the assessment proceedings. Therefore there is no discrepancy in the record regarding the details filed in the return of income. The Ld. DR could not controvert the observations of the CIT(A) with any cogent material or information to take a different view. Accordingly We find the CIT(A) has considered the facts, circumstances, additional evidence, provisions
Mr. Jamil Ahmed Qureshi, Mumbai - 23 - of the Act and the remand report and directed the Assessing officer to delete the additions and has passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.
In the result, the appeal filed by the revenue is dismissed.
Order pronounced in the open court on 23.06.2022.