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Facts
The assessee's assessment for A.Y. 2013-14 was reopened, leading to an addition of Rs. 13,90,500 under Section 69A for unexplained money related to a vehicle purchase. The assessee contended that although the vehicle was booked in his name, it was later transferred to Mr. Nagendra Singh, who took delivery and made the payment, and the assessee's initial deposit was refunded. The CIT(A) upheld the addition made by the AO.
Held
The Tribunal observed that while the registration was in the assessee's name, evidence suggested the delivery and possession were transferred to Mr. Nagendra Singh, and the assessee's deposit was refunded. Concluding that the Assessing Officer's inquiry was insufficient, the Tribunal remanded the case for a de novo investigation, directing the AO to summon records from M/s Sterling Motors and examine Mr. Nagendra Singh to ascertain the true nature of the transaction.
Key Issues
Whether an addition for unexplained money under Section 69A for a vehicle purchase can be sustained when the assessee disputes beneficial ownership and claims payment by a third party, and if a comprehensive investigation is required to establish the transaction's true nature.
Sections Cited
147, 144, 69A, 115BBE, 148, 149, 150, 151
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िनधा"रती की ओर से/Assessee by : Shri B.M. Monga, Advocate and Shri Rohit Kaura, Advocate राज" की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 22/05/2025 उदघोषणा की तारीख/Date of Pronouncement : 23/05/2025 आदेश/Order PER LALIET KUMAR, J.M:
This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 15/10/2024 pertaining to Assessment Year 2013-14. 2. In the present appeal Assessee has raised the following grounds:
1. That the order of Ld. CIT(A) is against the law and facts of the case.
2. That the Ld. CIT(A) has erred while upholding the illegal & arbitrary addition of Rs. 13,90,500/- without considering the submissions, documents and evidences of the assessee appellant, that assessee has never purchased any vehicle from M/s Sterling Motors Sales Pvt. Ltd. during the year under consideration.
3. That the Ld. CIT(A) has grossly erred in upholding the addition made by the AO without even appreciating the important fact that only a vehicle namely XUV 500 was booked on 30.02.2012 through DD of Rs. 80,000/-, which was lateron cancelled and refund of Rs. 80,000/- was duly refunded back vide NEFT on 07.03.2012 and the impugned vehicle was actually purchased by Sh. Nagendra Singh from M/s Sterling Motors Sales Pvt. Ltd and the impugned vehicle has duly been registered in the name of Sh. Nagendra Singh.
4. That the Ld. CIT(A) has grossly erred in upholding the action of AO in reopening u/s 147/148, which reopening/reassessment/Notice is itself based on presumptions, incorrect, vague and non existent facts and therefore, whole the proceeding are without jurisdiction.
5. That the learned CIT(A), has grossly erred while upholding the reassessment Notice u/s 148, and the consequential assessment order, which has been passed in violation of the statutory provisions of section 148, 149, 150, 151 of the Act and against the mandate of reopening, in the facts and the circumstances of the case.
That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off.
3. Briefly the facts of the case are that the assessee filed return of income on 14.04.2021 for the A.Y. 2013-14, declaring a total income of Rs.6,16,490. The assessment was reopened under section 147 r.w.s. 144 of the Act, and the Assessing Officer completed the assessment on 30.03.2022, making an addition of Rs.13,90,500/- under section 69A of the Act on account of unexplained money, thus assessing the total income at Rs.20,06,990/-. The addition was based on information received from the DDIT (Investigation), Delhi, regarding cash purchase of a vehicle from M/s. Sterling Motors Sales Pvt. Ltd.
Aggrieved, the assessee filed appeal before the CIT(A), contending that the addition under section 69A was unjustified. The grievance, as recorded in the statement of facts and grounds of appeal
, revolved around denial of any such cash purchase and emphasized that no such asset was purchased by the assessee.
5. During appellate proceedings, several notices were issued and submissions were filed by the assessee on 31.08.2024. The assessee reiterated that no vehicle was purchased from M/s. Sterling Motor Co. during FY 2012-13 either in cash or otherwise. It was explained that although the booking was made in the assessee’s name, the vehicle was never taken by him. Instead, the same was allegedly transferred immediately to Mr. Nagendra Singh, who took delivery and made the payment. Affidavit of transfer and delivery receipt were submitted in support.
6. The CIT(A), after considering the assessment order and the assessee’s submissions, noted that the purchase invoice dated 04.06.2012 was indeed issued in the assessee’s name and that the payment as per records was attributed to him. The affidavit and explanations offered by the assessee were found unconvincing. It was held that the claim of subsequent transfer or cancellation of the booking did not justify the source of the cash investment initially recorded in the assessee’s name. The appellate authority found the Assessing Officer’s action justified in treating the said amount of Rs.13,90,500 as unexplained money under section 69A and taxing it under section 115BBE of the Act.
7. Consequently, the CIT(A) upheld the addition made by the Assessing Officer and dismissed the appeal.
8. During the course of hearing before us, the Learned AR reiterated the submissions made before the lower authorities and further pointed to the bank statement to show that a sum of Rs.80,000/- was deposited on 03.02.2016 with the company, which was later refunded in June 2016, before the vehicle was delivered. It was submitted that although the registration certificate was in the name of the assessee, the vehicle was handed over to Mr. Nagendra Singh on the date of delivery, and documents to that effect, including affidavit and delivery records, were filed. It was contended that the ownership and payment belonged to Mr. Nagendra, and the assessee’s name was used merely for booking purposes.
9. The Learned DR, on the other hand, relied on the orders of the lower authorities and emphasized that the vehicle was registered in the name of the assessee, which evidences ownership. It was argued that there was no reason for the company to register the vehicle in the assessee’s name unless payment was made by him, and therefore the addition under section 69A was justified.
10. We have heard the rival contentions and perused the material available on record, including the documents filed by the assessee. The uncontroverted fact remains that the assessee had deposited Rs.80,000/- with the company, which was subsequently returned to him prior to delivery of the vehicle. While the registration certificate of the vehicle was issued in the assessee’s name, the delivery and possession of the vehicle were simultaneously transferred to Mr. Nagendra Singh on the very same day. Supporting documents such as transfer letter, possession note, and delivery challan were placed on record. 10.1 The crucial question, therefore, is whether the addition can be sustained in the hands of the assessee merely because the booking and registration were in his name, when the surrounding circumstances indicate that the actual buyer and user of the vehicle was Mr. Nagendra. The fact that the vehicle continues to be held by Mr. Nagendra and payment was claimed to have been made by him raises a serious doubt as to whether the assessee was the actual purchaser. 10.2 In our view, the Assessing Officer ought to have made a deeper inquiry into the matter, including summoning records of M/s Sterling Motors to verify the booking, refund, and final payment details; ascertaining whether the name of the assessee was used to obtain out-of-turn allotment; and examining Mr. Nagendra Singh to confirm if the payment was made by him. These investigative steps are crucial to determine the true nature of the transaction. 10.3 In light of the above discussion and considering the preponderance of probabilities and circumstantial evidence, we are of the considered view that the matter requires fresh examination. Accordingly, we deem it fit to remand the matter back to the file of the Assessing Officer with a direction to conduct a de novo investigation in accordance with law, after providing adequate opportunity of being heard to the assessee. 11. In the result, the appeal of the assessee is allowed for statistical purposes and the matter is restored to the file of the Assessing Officer for fresh adjudication in the light of the above observations.