SIDDHI PARAGBHAI PATEL,KHAMBHAT vs. THE ITO, WARD-1(3)(1), PETLAD
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “A” BENCH
Before: Shri T.R. Senthil Kumar, Judicial Member
And Shri Narendra Prasad Sinha, Accountant Member
Siddhi Paragbhai Patel
Chok Koi No Pado,
Khambhat,
Gujarat 388620
PAN: AOIPP3661G
(Appellant)
Vs
The ITO,
Ward-1(3)(1),
Petlad
(Respondent)
Assessee Represented: Shri Mahesh Varjani, A.R.
Revenue Represented: Shri Aashish Rajesh Rewar, Sr.D.R.
Date of hearing
: 28-11-2024
Date of pronouncement : 03-01-2025
आदेश/ORDER
PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 24.04.2024 passed by the Commissioner of Income Tax
(Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2015-16. 2. Brief facts of the case is that the assessee is an individual filed his Return of Income on 17-03-2016 declaring taxable income of Rs.6,26,050/- and also agricultural income of Rs.1,18,500/-. The Assessment Year 2015-16
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return was processed u/s. 143(1) of the Act and taken for scrutiny assessment. The assessee purchased an immovable property namely agricultural land for Rs.1,01,98,000/- on 16-04-2024 but the source of funds were not disclosed. Therefore a show cause notice was issued to explain the source of funds for purchase of the property. The assessee has not produced relevant materials for the source, therefore the Assessing Officer made the entire investment of Rs.1,01,98,000/- and stamp duty of Rs.5,00,000/- as unexplained investment and added as the income of the assessee and demanded tax thereon.
Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A) who has confirmed the addition by holding that the assessee failed to file relevant details relating to source of investment in immovable property rather disputing about the date of registration and valuation u/s. 50C of the Act. Thus Ld. CIT(A) confirmed the addition made by the Assessing Officer on the purchase of land as unexplained investment.
Aggrieved against the appellate order, assessee is in appeal before us raising the following Grounds of Appeal:
a. The learned CIT(A) erred in confirming the addition of Rs. 1,06,98,000/- as unexplained investment under section 69 of the Income Tax Act, 1961, without considering the actual property value and the detailed explanation provided by the appellant.
b. The learned CIT(A) failed to acknowledge that the appellant paid stamp duty as per the old circle rate which was approved by virtue of government order and mentioned in the purchase deed. The actual rate applicable to the appellant's area as approved by virtue of government's order was not considered by the Assessing Officer (AO) as well. Hence,
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both the Assessing Officer (AO) and the learned CIT(A) failed to consider the correct value of property.
c. The learned CIT(A) ignored the fact that a major portion of the property payment amounting to Rs. 37,62,000 was made during the financial year
2011-12, and erroneously treated this amount as unexplained investment in the assessment year 2015-16. d. The learned CIT(A) erred in confirming the addition of Rs. 25,49,500
paid as premium to the government for circle rate change, considering it as unexplained investment, despite clear evidence of the payment being made to a government body.
e. The learned CIT(A) made an error in treating the stamp duty and other charges paid in cash on 31/03/2014 as unexplained, disregarding the bank statements showing cash withdrawals corresponding to these payments.
f. The appellant provided all necessary details and sources of funds to prove the investment in the property, which were unjustly ignored by the AO and the CIT(A).
g. The CIT(A) failed to provide a proper opportunity for the appellant to present the case, and the order passed was a mere copy-paste of the AO's findings without considering the appellant's submissions and facts.
h. The learned CIT(A) erred in confirming the addition for the Assessment
Year 2015- 16, despite no payment or deed registration occurring in that year. All relevant payments were made during the financial years 2011-12
and 2013-14, with no financial activity related to the property in the Assessment Year 2015-16. The AO's addition for the Assessment Year
2015-16 is thus baseless and has created unnecessary litigation.
i. The learned CIT(A) erred in confirming the addition based on the property value as per the deed, which is Rs. 1,01,98,000, while the actual payment made for the property, including the premium for circle rate, was only Rs. 70,27,200. The difference of Rs. 31,70,800 is solely due to the change in the circle rate for registration purposes, and no actual payment was made for this amount. The AO has also erroneously added this difference amount and the stamp duty paid of Rs. 5,00,000 as unexplained investment.
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5. Ld. Counsel appearing for the assessee submitted that the assessee purchased the immovable property for actual value of Rs.70,27,200/- as follows:
Particulars
Amount (in Rs.)
Payment to Seller (Detail mentioned in point no. 2)
39,77,000
Premium Paid as per Government Order
25,49,500
Stamp Duty Paid
5,00,000
Registration Fees Paid
700
Total
70,27,200
1. Whereas the property value as per the Sale Deed is Rs.1,01,98,000/-, the difference of Rs.31,70,800/- is due to revision in the circle rate for registration purposes, which has been approved by virtue of Government order and no actual payment was made for this amount. Further the actual payment of Rs.39,77,000/- paid to the sellers were between 20-04-2011 to 26- 08-2011 through banking channel as well as Rs. 1,62,000/- by cash payment. Thus the assessee paid Rs.25,49,500/- towards the premium for the circle rate change to the Government of Gujarat as per approval order dated 12-02-2024 from assessee’s UBI Saving Account vide Cheque No. 027208, whereas the Assessing Officer added the entire amount of Rs.1,01,98,000/- + Stamp Duty of Rs.5,00,000/- also as unexplained investment. Though the assessee filed the appeal on 22-01-2018, Ld. CIT(A) dismissed the appeal vide order dated 24-04-2024 without giving proper opportunity of hearing to the assessee, though the assessee filed its detailed Written Submission. Thus the Ld. CIT(A) passed the appellate order without addressing the submissions made by the assessee which is liable to be set aside.
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6. Per contra, Ld. Sr. D.R. appearing for the Revenue requested to uphold the additions made by the Lower Authorities.
We have given our thoughtful consideration and perused the materials available on record. As it can be seen from the registered Sale Deed which is dated 31-03-2014 but registration was completed by the Sub-