KULVINDER SINGH,NEW DELHI vs. ITO, WARD- 41(2), NEW DELHI

This appeal by the assessee is preferred against the order of the CIT(A)-24, New Delhi dated 12.06.2014 pertaining to assessment year 2005-06.

The grievance of the assessee is two-fold- firstly, the assessee has challenged the reopening of the assessment u/s 147 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] stating that the issue of notice u/s 148 is bad in law and secondly, the assessee is aggrieved by the additions confirmed by the ld. CIT(A).

At the very outset, we have to point out that this is the second round of litigation. In the first round, the quarrel travelled upto the Tribunal and the Tribunal in set aside the issue to the file of the ld. CIT(A) with a direction that the ld. CIT(A) should first decide the jurisdictional issue raised before him.

Pursuant to the direction of the Tribunal, the ld. CIT(A) disposed the appeal challenging the reopening of the assessment and the validity of notice u/s 148 of the Act by dismissing the appeal of the assessee on this ground. However, on merits of the addition, the ld. CIT(A) restricted the addition of Rs. 23 lakhs made by the Assessing Officer to Rs. 6 lakhs.

Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities and in the first round of litigation.

Facts are that, as per the AIR information received from the INV Wing in the form of TEP, it came to the knowledge of the Assessing Officer that the assessee has initiated recovery proceedings of an advance of Rs. 23 lakhs given to one Shri Jai Deep. On the basis of such information, the Assessing Officer proceeded to examine the source of Rs. 23 lakhs which was advanced to Shri Jai Deep.

The assessee explained that Rs. 23 lakhs was given by the assessee out of sale proceeds of agricultural land sold by the assessee.

Before us, the ld. counsel for the assessee vehemently stated that the loan was given on 08.03.2004 which is relevant to A.Y 2004-05 and therefore, no addition could be made in the impugned A.Y. Though, this claim of the assessee was dismissed by the ld. CIT(A) for want of evidence.

Before us also, the assessee could not furnish any evidence that the loan was given in F.Y. 2003-04. In our considered opinion, this very statement by the ld. counsel for the assessee that the loan was given in F.Y. 2003-04 goes to the root of the matter and without examining the same, the quarrel cannot be decided. Therefore, in the interest of justice and fair play, we deem it fit to restore the entire issue to the file of the Assessing Officer. The assessee is directed to demonstrate that the loan was actually given in F.Y. 2003-04 and the Assessing Officer is directed to examine the same and if the contention of the assessee is found to be correct, no addition be made in the impugned A.Y i.e. 2005-06.

All other related issues remain open for both the sides which will be subject to the determination of correct A.Y.

In the result, the appeal of the assessee in is treated as allowed for statistical purposes.