SH. ASHWANI KUMAR GUPTA,CHANDIGARH vs. DCIT, CC-I, CHANDIGARH

आदेश/ORDER

PER BENCH: The above appeals have been filed by the different assessees against the consolidated order of the

Commissioner of Income Tax (Appeals)-3, Gurgaon [(in short ‘CIT(A)’] dated 30.11.2018, passed u/s 250(6) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’), relating to

assessment year 2004-05.

second round before us with the issue originally having been restored back by the ITAT in the first round to the Assessing Officer (A.O.) for consideration afresh. All the

appeals were, therefore, taken up together for hearing.

3 ITA Nos.150 to 152/2019 A.Y.2004-05

Ld.Counsel for the assessee stated that for the sake of

convenience he shall be dealing with the facts in the case of

Shri Vijay Kumar Gupta in ITA No.152/Chd/2019. Ta k i n g

u s t h r o u g h t h e f a c t s o f t h e c a s e , a s r e p r o d u c e d i n t h e

o r d e r p a s s e d b y t h e I . T. A . T. i n t h e f i r s t r o u n d i n I TA

N o . 6 6 0 - 6 6 3 / C h d / 2 0 0 8 d a t e d 3 0 - 0 4 - 1 4 , c o p y o f w h i c h

w a s p l a c e d b e f o r e u s a t p a g e N o s . 2 4 t o 6 8 , t h e

L d . C o u n s e l f o r t h e a s s e s s e e d r e w o u r a t t e n t i o n t o p a r a

7 6 o f t h e o r d e r w h e r e t h e f a c t s r e l a t i n g t o t h e i s s u e

w e r e d i s c u s s e d . Th e L d . C o u n s e l f o r t h e a s s s e s s e e

p o i n t e d o u t f r o m t h e s a m e t h a t t h e a s s e s s e e a l o n g w i t h

h i s b r o t h e r s S / S h r i A s h w a n i K u m a r G u p t a a n d A j a y

K u m a r G u p t a ( t h e o t h e r a s s e s s e s / a p p e l l a n t s ) h a d

p u r c h a s e d H o u s e N o . 1 6 4 , S e c t o r 2 7 , C h a n d i g a r h

d u r i n g t h e i m p u g n e d y e a r v i d e s a l e d e e d r e g i s t e r e d f o r

a c o n s i d e r a t i o n o f R s . 4 8 l a c s . Th a t t h e s a i d p r o p e r t y

w a s p u r c h a s e d f r o m o n e S h r i S h a n t i L a l S e t h i a . Th a t

d u r i n g s e a r c h & s e i z u r e o p e r a t i o n a t t h e p r e m i s e s o f

o n e S h r i M u k e s h M i t t a l a p r i n t o u t o f a g r e e m e n t t o

s e l l f r o m h i s c o m p u t e r , r e f l e c t e d a c o n s i d e r a t i o n o f

R s . 7 5 l a c s f o r t h e s a i d p r o p e r t y . Th e A . O . f u r t h e r

f o u n d t h a t t h e s e l l e r h a d m o r t g a g e d t h i s p r o p e r t y f o r

r a i s i n g l o a n f r o m b a n k o f R s . 7 5 l a c s . Th e A . O . f u r t h e r

4 ITA Nos.150 to 152/2019 A.Y.2004-05

n o t e d t h a t t h e a s s e s s e e h a d d e c l a r e d i n v e s t m e n t o f a

s u m o f R s . 1 7 l a c s o n l y f o r p u r c h a s e o f s a i d h o u s e

d u r i n g t h e y e a r i n h i s r e t u r n o f i n c o m e f i l e d . Th e

a s s e s s e e w a s a s k e d t o e x p l a i n t h e s o u r c e o f

i n v e s t me n t o f R s . 7 5 l a c s i n t h e p r o p e r t y a n d s i n c e t h e

a s s e s s e e f a i l e d t o f u r n i s h a n y e v i d e n c e r e g a r d i n g t h e

s o u r c e o f i n v e s t m e n t , t h e A . O . t r e a t e d t h e e n t i r e a m o u n t a s u n e x p l a i n e d a n d a d d e d 1 / 3 r d o f t h e t o t a l

i n v e s t me n t m a d e i n t h e h a n d s o f e a c h a s s e s s e e ,

a m o u n t i n g t o R s . 2 8 l a c s , a s d e e m e d i n c o m e u / s 6 9 B

o f t h e A c t . P a r a 7 6 o f t h e I . T. A . T . o r d e r , n o t i n g th e

a b o v e f a c t s i s r e p r o d u c e d h e r e u n d e r :

“76. The brief facts relating to the issue are that the assessee alongwith his brothers S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta purchased House No.164, Sector 27, Chandigarh vide sale deed registered on 10.2.2004 for total consideration of Rs.48 lacs. The said property was purchased from Shri Shanti Lal Setia. During the course of search and seizure operation at the premises of Shri Mukesh Mittal a printout of agreement to sell from the computer of Shri Mukesh Mittal reflected the consideration of Rs.75 lacs as against sale consideration mentioned in the sale deed at Rs.48 lacs. The Assessing Officer noted that as per the agreement to sell consideration was Rs.75 lacs, whereas as per sale deed the consideration was Rs.48 lacs and came to the conclusion that the concealment of income in this property transaction was to the tune of Rs.27 lacs. Reference was made to section 2(22AA) of the Act defining the documents and also to section 2(1)(f) of the Information Technology and also the information gathered from Chief Manager, Union Bank of India,

5 ITA Nos.150 to 152/2019 A.Y.2004-05

Sector 17B, Chandigarh. The Assessing Officer on investigation found that Shri Shanti Lal Setia has mortgaged the property for raising the loan and sum of Rs.75 lacs was paid to the bank out of which Rs.27 lacs was paid in cash on 27.1.2004. The agreement to sell was executed in the month of January and as per the Assessing Officer the same represented undisclosed portion of the consideration. The assessee was asked to explain the source of Rs.75 lacs in the purchase of property with evidence. The assessee, on the other hand, in the computation of income had declared that he had invested sum of Rs.17 lacs for purchase of residential House in Sector 27, Chandigarh jointly with S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta during the year but as the assessee had failed to furnish any evidence regarding the nature and source of this investment either in the return of income or in the course of proceedings, the Assessing Officer held that 1/5 t h share in the total income i.e. Rs.75 lacs plus other over head expenses of Rs.3 lacs equal to Rs.78 lacs was the share of the assessee and thus sum of Rs.28 lacs was added as deemed income under section 69B of the Act”. 4 . T h e L d . C o u n s e l f o r t h e a s s s e s s e e t h e r e a f t e r

s t a t e d t h a t t h e C I T( A ) d e l e t e d t h e e n t i r e a d d i t i o n o n

t h e b a s i s t h a t t h e c o n s i d e r a t i o n r e c o r d e d i n t h e s a l e

d e e d s t o o d d i s c l o s e d i n t h e r e t u r n f i l e d b y t h e

a s s e s s e e a n d h a d b e e n s h o w n a s p a i d f r o m t h e b a n k

a c c o u n t s o f t h e a s s e s s e e s a n d t h u s s t o o d e x p l a i n e d .

F u r t h e r t h a t t h e u n d i s c l o s e d i n v e s t m e n t o v e r a n d

a b o v e R s . 4 8 l a c s a m o u n t i n g t o R s . 2 7 l a c s h a d b e e n

d e n i e d b o t h b y t h e b u y e r a n d t h e s e l l e r t o h a v e b e e n

t r a n s a c t e d a n d t h e r e w a s n o e v i d e n c e w i t h t h e

R e v e n u e t o h o l d t h a t t h e i m p u g n e d a m o u n t o f m o n e y

h a d p a s s e d f o r t h e p u r c h a s e o f t h e s a i d p r o p e r t y a n d ,

6 ITA Nos.150 to 152/2019 A.Y.2004-05

t h e r e f o r e , n o a d d i t i o n w a s w a r r a n t e d o n a c c o u n t o f

t h e s a m e a l s o . Th u s b o t h t h e r e g i s t e r e d s a l e

c o n s i d e r a t i o n i . e . t h e d i s c l o s e d c o n s i d e r a t i o n i . e .

d i s c l o s e d c o n s i d e r a t i o n a n d t h e u n d i s c l o s e d

c o n s i d e r a t i o n r e l a t i n g t o t h e i m p u g n e d i n v e s t m e n t o f

R s . 7 5 l a c s a m o u n t i n g t o R s . 4 8 l a c s a n d R s . 2 7 l a c s

r e s p e c t i v e l y w a s d e l e t e d b y t h e L d . C I T( A ) L d . C o u n s e l

f o r t h e a s s e s s e e t o o k u s t h r o u g h p a r a 7 7 o f t h e o r d e r

o f t h e I TA T n o t i n g t h e a f o r e s a i d f a c t s a s u n d e r :

“77. The CIT (Appeals) noted that the total investment worked out by the Assessing Officer was Rs.78 lacs and 1/3 r d of the same comes to Rs.26 lcas, whereas addition of Rs.28 lacs had been made. The CIT (Appeals) further noted that the Assessing Officer himself had mentioned that Rs.48 lacs was declared as consideration in the property in question and the source of the said Rs.48 lacs plus Rs.3 lacs was that Rs.17 lacs have been paid by the assessee, S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta each. As the said amount was paid from the respective bank accounts of the said persons, the CIT (Appeals) was of the view that the said obviously was paid from the explained sources of the persons and duly reflected in the relevant documents. Thus as per the CIT (Appeals) there was no question of considering the investment of Rs.51 lacs to be unexplained investment. In respect of the balance sum of Rs.27 lacs, the CIT (Appeals) noted that both the assessee and the seller of the property had stated that no such amount was either paid or received on account of the said transaction. The CIT (Appeals) held that the addition for such on money could not be made on the basis of suspicion and on the basis that such on money does pass in similar manner. In the absence of any concrete evidence the CIT (Appeals) held that no addition was warranted on the basis of suspicion. The CIT (Appeals) further noted that Shri Shanti Lal Setia and his wife had

7 ITA Nos.150 to 152/2019 A.Y.2004-05

categorically refused to have received the amount from the assessee or his brothers and the sources of the cash deposited in the Union Bank of India was explained by him and hence there was no ground for taking adverse view against the assessee. Further in the hands of Shri Shanti Lal Setia and his wife the sale consideration of the property had been considered at Rs.48 lacs only and in view thereof, there was no justification for taking contrary stand in the hands of the assessee on the basis of the computer printout of agreement to sell found in the possession of Shri Mukesh Mittal. Thus addition of Rs.28 lacs was deleted.” 5 . T h e r e a f t e r t h e L d . C o u n s e l f o r t h e a s s s e s s e e

s t a t e d t h a t t h e I . T. A . T. r e s t o r e d t h e a d d i t i o n m a d e o n

a c c o u n t o f t h e r e g i s t e r e d s a l e c o n s i d e r a t i o n o f R s . 4 8

l a c s t o t h e A O , h o l d i n g t h a t m e r e d i s c l o s u r e o f t h e

i n v e s t me n t i n t h e r e t u r n o f i n c o me f i l e d d i d n o t

d i s c h a r g e t h e o n u s u p o n t h e a s s e s s e e t o e x p l a i n w i t h

e v i d e n c e t h e s o u r c e o f t h e i n v e s t me n t a n d t h a t i n t h e

i n t e r e s t o f j u s t i c e t h e i s s u e n e e d e d t o b e

r e c o n s i d e r e d b y t h e A . O . O u r a t t e n t i o n w a s d r a w n t o

t h e f i n d i n g s o f t h e I . T. A . T. a t P a r a 7 9 o f t h e o r d e r a s

u n d e r :

“79. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the investment in House no.164, Sector 27, Chandigarh. The assessee alongwith his two brothers S/Shri Ashwani Kumar Gupta and Vijay Kumar Gupta had made investment in the purchase of the said property. The said deed was registered on 10.2.2004 and the total consideration in the sale deed was Rs.48 lacs. During the course of search and seizure operation at the premises of Shri Mukesh Mittal, a printout of

8 ITA Nos.150 to 152/2019 A.Y.2004-05

agreement to sell was taken in which the consideration was mentioned at Rs.75 lacs. As the assessee failed to explain the sources of investment both the declared and un-declared, before the Assessing Officer because of non filing of any information before the Assessing Officer, the Assessing Officer treated the investment of Rs.75 lacs plus over head expenses of Rs.3 lacs as unexplained and made addition of Rs.28 lacs each in the hands of three co-owners. The CIT (Appeals) in the first instance noted that 1/3 r d share of Rs.78 lacs was Rs.27 lacs and not Rs.28 lacs. The CIT (Appeals) further observed that the sale consideration declared in the sale deed i.e. Rs.48 lacs was out of the declared sources of the assessee and addition to that effect was deleted by the CIT (Appeals). We find no merit in the said stand of the CIT (Appeals) where the assessee had failed to furnish basic evidence of the source of investment in House No.164, Sector 27, Chandigarh merely because assessee had declared that it had invested in the purchase of the said property in the computation of income filed alongwith the return of income, does not discharge the onus upon the assessee to explain with evidence the source of investment in the said property. We reverse the finding of the CIT (Appeals) in this regard. However, in the interest of justice, we deem it fit to send this issue back to the file of the Assessing Officer, who shall adjudicate the issue in accordance with law. The assessee is directed to discharge his onus with evidence of sources of investment in the said property. Reasonable opportunity of hearing shall be afforded to the assessee by the Assessing Officer and the issue be decided in accordance with law.” 6 . T h e L d . C o u n s e l f o r t h e a s s s e s s e e t h e r e a f t e r t o o k

u s t h r o u g h t h e o r d e r o f t h e A . O . p a s s e d i n t h e s e c o n d

r o u n d p o i n t i n g o u t f r o m p a r a 4 t h e r e o f t h a t t h e

a s s e s s e e d u r i n g p r o c e e d i n g s b e f o r e t h e A . O . h a d

s t a t e d t h a t i t h a d a p p r o a c h e d t h e I . T. A . T . t o b r i n g t o

i t s n o t i c e t h e d e f e c t i n i t s o r d e r o f h a v i n g n o t

c o n s i d e r e d t h e a d d i t i o n a l e v i d e n c e f i l e d b e f o r e i t . Th e

9 ITA Nos.150 to 152/2019 A.Y.2004-05

c o n t e n t s o f t h e l e t t e r f i l e d t o t h e I . T. A . T. w e r e

s u b m i t t e d t o t h e A . O . Th a t t h e r e a f t e r t h e A . O . h a d

w r i t t e n t o t h e R e g i s t r a r o f t h e I . T. A . T. t o c o n f i r m

w h e t h e r a n y s u c h a p p l i c a t i o n w a s f i l e d b y t h e

a s s e s s e e a n d i f s o , t o s e n d t h e s t a t u s o f t h i s

a p p l i c a t i o n . Th a t i n r e s p o n s e t o t h e s a m e , t h e A . O .

w a s i n f o r m e d t h a t n o a p p l i c a t i o n w a s p e n d i n g f o r

d i s p o s a l b e f o r e t h e I . T. A . T. a n d f u r t h e r t h e s t a t u s o f

t h e a p p l i c a t i o n f i l e d b y t h e a s s e s s e e t o t h e I . T. A . T.

h a d b e e n s e n t t o i t . Th e A . O . a f t e r c o n s i d e r i n g t h e

r e p l y w a s o f t h e v i e w t h a t t h e a s s e s s e e w a s m e r e l y

a v o i d i n g r e p r e s e n t i n g h i s c a s e o n m e r i t s i n d u l g i n g i n

d e l a y i n t h e p r o c e e d i n g s r a i s i n g p e t t y m a t t e r s a n d

s i n c e d e s p i t e m a n y n o t i c e s a n d q u e r i e s r a i s e d , n o

r e p l y w a s f i e l d b y t h e a s s e s s e e . Th e A . O . c o n f i r m e d

t h e a d d i t i o n o f R s . 2 8 l a c s o n a c c o u n t o f u n e x p l a i n e d

i n v e s t me n t i n H o u s e N o . 1 6 4 , S e c t o r 2 7 , C h a n d i g a r h .

P a r a 6 o f t h e A . O . ’ s o r d e r h o l d i n g s o , i s r e p r o d u c e d

h e r e u n d e r :

“6. In view of the above state of affairs, it can clearly be observed that the assessee has avoided representing his case on merits and he has willfully indulged in delaying the proceedings while raising some other petty matters like making representation before Hon'ble ITAT with regard to alleged defects in the order of the Hon'ble ITAT. Considering

10 ITA Nos.150 to 152/2019 A.Y.2004-05

the delaying tactics and not responding to the queries raised vide notices issued u/s 142(1), penalty proceedings were initiated u/s 271(1)(b) and subsequently penalty for Rs.20,000/- was imposed on the assessee vide order dated 11.03.201 6. It may further be important to mention here that even during the course of original assessment proceedings, the assessee remained non-cooperative in finalizing the assessment. Despite many notices issued and queries raised, no concrete reply was filed by the assessee. Accordingly, the then Assessing Officer had to frame the assessment 153A on the basis of material available on record. Thus, I am of the opinion that the assessee has nothing to offer on the issue of addition of Rs. 28,00,000/- on account of unexplained investment in House No.164, Sector-27, Chandigarh. Accordingly, an addition of Rs.28,00,000/- is made to the returned income of the assessee.” 7 . T h e L d . C o u n s e l f o r t h e a s s s e s s e e t h e r e a f t e r

s t a t e d t h a t t h e L d . C I T( A ) u p h e l d t h e o r d e r o f t h e A . O

b u t b a s e d h i s f i n d i n g s o n f a c t s w h i c h w e r e n o t r e l a t e d

t o t h e i s s u e a t h a n d . L d . C o u n s e l f o r t h e a s s e s s e e t o o k

u s t h r o u g h t h e o r d e r o f t h e C I T( A ) a t p a r a 6 . 5 a s

u n d e r :

“6.5 During the appellate proceedings, the appellant has neither made any request for admission of additional evidence nor any explanation with regard to the source of investment of Rs. 51 lacs (sale price of Rs. 48 lacs + Rs. 3 lacs of overhead expenses). The Hon'ble ITAT has already adjudicated the issue with regard to the amount of Rs, 27 lakhs over and above the declared sales consideration of Rs. 48 lakhs at para 80 of the order by stating that no adverse inference can be drawn against the assessee on the basis of the alleged agreement to sale which is a computer printout and not even signed by any parties. However, it is apparent that the appellant has failed to identify the creditor, prove the capacity of the creditor and

11 ITA Nos.150 to 152/2019 A.Y.2004-05

justify the genuineness of loan with regard to Rs. 51 lacs received through account payee cheque in the bank account of the appellants), Sh. Ajay Kr. Gupta, Sh, Vijay Kr. Gupra & Sh. Ashwini Kr. Gupta for the-year under consideration. Further, the appellant (s) have also not given any fresh evidence with regard to the issue related to Rs. 51 lakhs received in case of all the three appellants which was restored back to the file of the AO, who as well as the undersigned have afforded reasonable opportunity to appellant(s). In view of the above discussion, addition of Rs. 17 lakhs is confirmed in the hands of the appellant, Shri Ajay Kumar Gupta. As similar issue is involved in the case of other appellants] of this common order as discussed above, similar addition of Rs. 17 lacs is also confirmed in the hands of Shri Vijay Kumar Gupta and Shri Ashwani Kumar Gupta also for the year under consideration.” 8 . T h e L d . C o u n s e l f o r t h e a s s s e s s e e p o i n t e d o u t

f r o m t h e s a m e t h a t t h e L d . C I T( A ) w h i l e a d j u d i c a t i n g

t h e i s s u e o f i n v e s t me n t i n h o u s e p r o p e r t y h a d g o n e o n

a t o t a l l y d i f f e r e n t t a n g e n t , d i v e r g i n g f r o m t h e i s s u e a t

h a n d c o m p l e t e l y b y m a k i n g a r e f e r e n c e t o t h e f a c t t h a t

t h e a s s e s s e e h a d f a i l e d t o i d e n t i f y c r e d i t o r , p r o v e i t s

c a p a c i t y a n d j u s t i f y t h e g e n u i n e n e s s o f t h e l o a n .

L d . C o u n s e l f o r t h e a s s e s s e e c o n t e n d e d t h a t t h e

f i n d i n g s o f f a c t t h u s r e c o r d e d b y t h e C I T( A ) , b a s e d o n

w h i c h h e h a d u p h e l d t h e a d d i t i o n w a s c l e a r l y a l i e n t o

t h e i s s u e a t h a n d . Th e L d . C o u n s e l f o r t h e a s s s e s s e e

c o n t e n d e d , t h e r e f o r e , t h a t t h e C I T( A ) h a d u p h e l d t h e

12 ITA Nos.150 to 152/2019 A.Y.2004-05

o r d e r o f t h e A . O . w i t h o u t a p p l y i n g h i s m i n d t o t h e

i s s u e a t a l l .

9 . T h e L d . D R f a i r l y c o n c e d e d t h a t t h e f i n d i n g s o f

f a c t r e c o r d e d b y t h e C I T( A ) w h i l e c o n f i r m i n g t h e

a d d i t i o n m a d e b y t h e A . O . , w e r e n o t i n r e l a t i o n t o t h e

i s s u e a t h a n d .

1 0 . I n v i e w o f t h e a b o v e , s i n c e u n d i s p u t e d l y t h e o r d e r

p a s s e d b y t h e C I T( A ) i s n o t b a s e d o n t h e f a c t s r e l a t i n g

t o t h e i s s u e a t h a n d , t h e r e i s c l e a r l y n o a p p l i c a t i o n o f

m i n d b y t h e L d . C I T( A ) . Th e o r d e r p a s s e d i s p e r v e r s e .

I n t h e i n t e r e s t o f j u s t i c e t h e r e f o r e , w e c o n s i d e r i t f i t

t o r e s t o r e t h e i s s u e b a c k t o t h e C I T( A ) t o a d j u d i c a t e

t h e i s s u e a f r e s h a f t e r c o n s i d e r i n g t h e r e l e v a n t f a c t s

r e l a t i n g t o t h e i s s u e . N e e d l e s s t o a d d t h a t t h e

a s s e s s e e b e g i v e n d u e o p p o r t u n i t y o f h e a r i n g a n d i s

f r e e t o f i l e a l l e v i d e n c e s w h i c h h e c o n s i d e r s n e c e s s a r y

f o r t h e a d j u d i c a t i o n o f t h e i s s u e a t h a n d . Th e

L d . C o u n s e l f o r t h e a s s s e s s e e h a s g i v e n a n o r a l

u n d e r t a k i n g t o u s t o p a r t i c i p a t e i n t h e p r o c e e d i n g s

a n d n o t t a k e u n n e c e s s a r y a d j o u r n me n t s , f a i l i n g w h i c h

t h e L d . C I T( A ) i s f r e e t o a d j u d i c a t e t h e i s s u e o n t h e

13 ITA Nos.150 to 152/2019 A.Y.2004-05

b a s i s o f m a t e r i a l i n h i s p o s s e s s i o n a n d a s h e d e e m s f i t , i n a c c o r d a n c e w i t h l a w .

1 1 . S i n c e t h e i s s u e i s c o m m o n t o a l l t h e a p p e a l s , our decision rendered above will mutatis mutandis to all the appeals.

Order pronounced in the Open Court.

Sd/- Sd/- �दवा �संह अ�नपूणा� गु�ता (ANNAPURNA GUPTA) (DIVA SINGH ) �याय�क सद�य/Judicial Member लेखा सद�य/Accountant Member �दनांक /Dated: 08th July, 2019 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar