S.NAGARAJ,COIMBATORE vs. DCIT CENTRAL CIRCLEI, COIMBATORE

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ITA 2843/CHNY/2017Status: DisposedITAT Chennai21 September 2022AY 2013-143 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal accepted the assessee's plea that the actual outflow during the year was Rs. 15.31 Lacs. Therefore, the addition was restricted to this amount, considering the actual outflows during the relevant year.

What were the facts?

The assessee purchased land for Rs. 36 Lacs, paying Rs. 7 Lacs initially and registration/stamp duty. The Assessing Officer added Rs. 21.25 Lacs to the assessee's income as unexplained investment, considering only Rs. 14.75 Lacs as explained.

What were the issues?

The main issue was the extent of unexplained investment in land purchase that could be added to the assessee's income for the assessment year.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C/SMC’ BENCH, CHENNAI

Before: SHRI MANOJ KUMAR AGGARWAL, AM

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income Tax (Appeals)-18, Chennai [CIT(A)] dated 13-10-2017 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 24.11.2016. The sole grievance of the assessee is confirmation of addition of Rs.20.44 Lacs.

2.

The Ld. AR pleaded that the addition may restricted to the extent of outflow which has taken place during the year. The Ld. Sr. DR pleaded for dismissal of the appeal.

1.

2 - Assessment Proceedings 3.1 Pursuant to search action in the case of Sri D.Ramgopal on 27.11.2013, Shri D. Ramgopal deposed that he had made an MOU with the assessee for sale of 21 cents of certain land for Rs.36 Lacs. Through court order, a sale deed was executed in favor of assessee on 18.06.2012 after obtaining consideration of Rs.10 Lacs whereas balance consideration of Rs.26 Lacs was yet to be received from him. 3.2 Upon perusal of sale deed, it transpired that the assessee made payment of Rs.7 Lacs and also paid registration / stamp duty. The assessee did not file any return of income and the known sources of assessee’s income were held to be not sufficient to cover the investment. 3.3 The assessee’s explanation were rejected vide factual findings as contained in para 3.2 of the assessment order. The Ld. AO finally held that out of Rs.36 Lacs, the amount of Rs.14.75 Lacs could be considered as explained. Accordingly, the balance amount of Rs.21.25 Lacs was added to assessee’s income. 3.4 Upon further appeal, Ld. CIT(A) rejected the claim made by the assessee and allowed partial relief of Rs.81,000/- only. Aggrieved, the assessee is in further appeal before us. My findings and Adjudication 4. The only plea of Ld. AR is that the actual sale consideration as paid by the assessee during this year is only Rs.15.31 Lacs and therefore, the same alone should be considered to make the additions in this year. Accepting the same, I direct Ld. AO to restrict the additions by considering the actual outflows that have taken place during the year in this transaction and restrict the addition accordingly. The relief 3 - as already granted in the assessment order as well as in appellate order shall remain available to the assessee. The assessee is directed to provide the requisite details.

5.

The appeal stand partly allowed. Order pronounced on 21st September, 2022.

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