SMT. KAJARI BANERJEE,KOLKATA vs. ITO WARD-29(1), KOLKTAT

At the outset, we note that there is a delay of 108 days in filing the appeal for which condonation petition along with affidavit was filed by the assessee. After going through the condonation petition, we find that the delay in filing the appeal is attributable to the counsel of the assessee Sri Pranabesh Choudhury, who appeared in the appellate proceedings through online mode and thereafter did not bother to find out the status of the order. Thereafter he was busy in filing the ITR, etc. Then, only when the matter was assigned to the present counsel on

The only issue raised in the various grounds of appeal is against the applicability of the provisions of Section 56(2)(X) of the Act by the ld. AO which was upheld by the ld. CIT (A).

The case of the assessee was selected for limited scrutiny on the ground of investment in property. Accordingly, statutory notices were issued along with questionnaire and duly served on the assessee. The AO found that assessee has purchased a property in District-24 Paraganas, P.S. Kalighat Corporation, Kolkata Municipal Corporation, Road Turf Road, Premise No.17, Ward-71, during the year, the stamp value of which was ₹1,54,23,248/- but the purchase price was only ₹50 lacs. Accordingly, the ld. AO invoked the provisions of Section 56(2)(X) of the Act and made an addition of ₹1,04,23,248/- to the income of the assessee in the assessment framed u/s 143(3)/ 143(3A) and 143(3B) of the Act.

In the appellate proceedings, the ld. CIT (A) upheld the applicability of Section 50(2)(X) of the Act. However, directed the ld. AO to assess the income in the hands of the assessee to the extent of his ownership in the said property which was 25% thereby deleting the ¾ of the addition made in the hands of the assessee. The ld. CIT (A) recorded a finding of facts that the 50% ownership in the property belonged to Amarjit Sing and 25% to Manjit Singh and 25% of the assessee i.e. Kajari Banerjee.

After hearing the rival contentions and perusing the materials available on record, we find that the agreement for the purchase of the said “6. After hearing the rival contentions and perusing the materials available on record, we find that the ld. AO has made the addition on account of investment in the flat by the assessee of ₹19 lacs which according to the ld. AO was not explained. However, we note that the investment in the flat has been made in the earlier year and was duly reflected in the balance sheet of the assessee a copy of which is available at page no.3 of the Paper Book. We note that the investment in Bengal Peerless was shown at ₹18,96,939/- under the head investment and deposits in the balance sheet as on 31.03.2020. We further note that the payments for the purchase of flats were made in the earlier financial year as per the details contained in the memo of consideration attached with the sale deed dated 30.04.2019. The details whereof are extracted below for ready reference:-

We have also perused the copy of the agreement which is attached at page no.15 to 33 and thus, it is clear from the above that all payments were made through banking channel right from the F.Y. 2012-13 to A.Y. 2018-19. Therefore, conclusion drawn by the ld. AO is against the facts on record available in the assessment folder as all the materials were before the ld. AO. Similarly, the ld. CIT (A) has not appreciated these facts correctly and simply confirmed the addition made by the ld. AO. We note that the ld. AO has wrongly made the addition and similar ld. CIT (A) affirmed the same. Considering these facts, we are inclined to set aside the order of ld. CIT (A) on this issue and direct the ld. AO to delete the audition. The ground no. 2 is allowed.

In the result, the appeal of the assessee is allowed.