PATCHAIAPPAN ANBU KOTHANDARAMAN,PUDUCHERRY vs. ACIT PONDICHERRY CIRCLE, PONDICHERRY

The assessee is an individual doing real estate business, filed the return of income for the A.Y. 2012-13 on 08.01.2013 admitting total income of Rs.9,73,380/-. The ld. Assessing Officer received Information through the NMS data that the assessee had purchased immovable property to the tune of Rs.1,61,40,000/- during the year under consideration and the return was not in commensuration with the information available with the ld. Assessing Officer. Hence, the ld. Assessing Officer had reasons to believe that Income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Accordingly, the case was re-opened u/s.147 of the Act with the prior approval of the Principal Commissioner of Income Tax, Puducherry, by issuance of notice u/s.148 dated 30.03.2019. The same was duly served on the assessee on 02.04.2019. Further, show cause notice dated 20.06.2019 and 01.07 2019 were issued. In response to the notice issued u/s 148, the assessee filed a return of income for the Asst. Year 2012-13 on 10.07.2019 admitting a total income of Rs.9,73,380/-. Subsequently, the case was transferred from the Income Tax Officer, Ward 1, Pondicherry. On change of incumbent, a notice u/s.142(1) alongwith questionnaire dated 03.12.2019 was issued and duly served. Subsequent to that a notice u/s.143(2) was issued on 12.12.2019 and duly served. The ld. Assessing Officer meanwhile obtained copy of purchase deed from the Sub-Registrar, Oulgaret Municipality, Pondicherry and examined. In response to the above notices, the assessee has produced computation of total income, copy of sale and purchase deeds, encumbrance certificate from Registration Department, M/s Mass Bar, M/s Akshradha Garden and real estate business and the other details called for. In the assessment proceedings, the ld. Assessing Officer directed the assessee to produce material evidences claimed towards the development expenses of Rs.13,47,250/-on mud-dumping, levelling, removing of plants and small trees, bushes. However, the assessee could not produce any evidences for the same. Hence, the ld. Assessing Officer added an amount of Rs.13,47,250/- to the income returned. Aggrieved, assessee preferred an appeal before the ld. CIT(A).

In the appellant proceedings, the assessee stated that the land is situated in the remote village Selliamedu Revenue Village Bahour Commune Puducherry. The village is situated 20 kilometre away from Puducherry town limit and it is mostly undeveloped area. The proper approach road was not available for the land and the same was actually agricultural land. Further, the assessee submitted in the appellate proceedings that it had incurred heavy development expenditure like mud- dumping, leveling, laying the approach road and cutting unwanted bushes, plants and trees. Only after incurring the above mentioned expenditures assessee were able to sell the land. However assessee has not produced any evidence of having incurred these expenses except submitted before the ld. CIT(A) self made vouchers. However, the ld. CIT(A) was not impressed and he confirmed the addition made by the ld. Assessing Officer. Aggrieved, assessee is in appeal before the Tribunal.

Heard both the parties.

Before us, the ld. Counsel for the assessee produced a ‘certificate’ from the purchaser of land. He also undertakes to file vouchers if the matter is set aside to AO. Per contra, the ld.DR for the revenue supported the impugned order of the ld. CIT(A) and prayed for the dismissal of the appeal.

We find that this issue requires re-verification at the level of the AO hence we set aside the appeal and remitted back to the file of AO to call for the vouchers, certificate issued by the purchaser as referred supra. The ld.AR for the assessee also assured the bench that the assessee will file all necessary requisites/details asked by the ld.AO. Therefore, in the light of above submissions we set aside this appeal to the file of ld.AO to hear the case afresh after providing proper opportunity of hearing to the assessee. The assessee is directed to substantiate and file any evidence to support incurring of development expenditure forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the disposal of the application as per law.

In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 25th day of March, 2025 at Chennai.