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Facts
The assessee filed an appeal against the CIT(A)'s order confirming an addition of ₹2,39,130/- as unexplained money for AY 2013-14. The assessment was reopened under Section 147 based on information that the assessee, among 41 others, purchased land, with a cash payment treated as unexplained money by the AO. The assessee contended the issue was covered by a co-ordinate bench decision involving the same transaction and parties.
Held
The Tribunal condoned the 27-day delay in filing the appeal, finding it for sufficient and bonafide reasons. It followed a co-ordinate bench decision which held that the reopening of assessment and subsequent addition were not sustainable, as the AO had not correctly appreciated the facts, and the transaction had been thoroughly examined under the Benami Property Transactions Act, 1988. The Tribunal therefore set aside the CIT(A)'s order and directed the AO to delete the addition.
Key Issues
Whether the delay in filing the appeal should be condoned. Whether the reopening of assessment under Section 147 and the addition of unexplained money for a land purchase were valid and sustainable, particularly in light of a co-ordinate bench decision on a related transaction and findings under the Benami Property Transactions Act.
Sections Cited
147, 148, 144, Benami Property Transactions Act, 1988
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 05.01.2023 for the AY 2013-14.
There is a delay in filing the appeal by 27 days for which the assessee has filed the condonation petition along with the affidavit explaining the reasons for the delay.
After hearing the rival contentions and perusing the materials available on record, we find that the delay in filing the appeal was for sufficient and bonafide reasons and accordingly, the same is condoned by admitting the appeal for adjudication.
5. For that the ld. CIT (A) was not justified in confirming the addition of ₹2,39,130/- made by the ld. AO on account of unexplained money.
The ld. Counsel for the assessee submitted that the issue is squarely covered by the decision of the co-ordinate Bench in the case of Shree Shiromani Project Pvt. ltd. vs ITO in for A.Y. 2013-14 vie order dated 29.07.2024, wherein the issue of purchase of land by 41 purchaseers including the assessee has been decided by the co-ordinate Bench by holding that there is no application of mind by the ld. AO to the facts and circumstances in this case not only the reopening of assessment is bad in law but the additions made are also not sustainable in the eyes of law and accordingly, the impugned addition of ₹2,94,13,031/- made by the ld. AO by alleging the amount introduced by way of sale of property by the assessee was deleted. The assessee, therefore, prayed that the amount of addition may kindly be deleted by setting aside the order of the ld. CIT (A) and directing the ld. AO to delete the addition.
The ld. Departmental Representative on the other hand relied on the order of the authorities below.
After hearing the rival contentions and perusing the materials available on record, we find that the assessee filed the return of income on 05.08.2013, declaring total income of ₹4,93,770/-. The case of the assessee was thereafter reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 20.03.2020, after obtaining the approval from the competent authority. The said reopening was made after receipt of information from Dy. Director of Income Tax (I & C.I.),
“5.1 A perusal of the above reasons recorded would reveal that the allegation is that the assessee company has sold its own land by way of sham transaction and received
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 01.04.2025.