MANJU SINGH,NOIDA vs. ITO, WARD-2(2), NOIDA

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ITA 7/DEL/2019Status: DisposedITAT Delhi07 October 2019AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the reassessment notice was for the purchase of property, but the addition was made on account of a surrender. The lower authorities failed to examine the documentary evidence provided by the assessee regarding the source of funds.

What were the facts?

The Assessing Officer (AO) initiated reassessment proceedings based on AIR information regarding the purchase of immovable property for Rs. 34.50 lakhs. During assessment, the assessee claimed an unsecured loan of Rs. 50 lakhs, but surrendered Rs. 15 lakhs, which the AO added to income.

What were the issues?

Whether the addition made by the AO was justified when the reassessment was initiated for a different purpose and the assessee's evidence regarding the source of funds was not examined.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,

Before: SHRI N.K. BILLAIYA

For Appellant: Shri Ajith Sharma, CA
For Respondent: Ms. Ekta Vishnoi, Sr. DR
Hearing: 07.10.2019Pronounced: 07.10.2019

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - 1, Noida dated 29.06.2018 pertaining to assessment year 2009-10.

2.

The assessee has raised several grounds of appeal alongwith additional grounds of appeal. However, the sum and substance of the grievances of the assessee is that the Assessing Officer erred in framing the assessment u/s 143(3) r.w.s 147 of the Income tax Act, 1961 and making addition of Rs. 15 lakhs whereas the reasons for reopening the assessment was in respect of purchase of immovable property of Rs. 34.50 lakhs.

3.

Briefly stated, the facts of the case are that as per Non PAN AIR information, the Assessing Officer came to know that the assessee has purchased immovable property for Rs. 34.50 lakhs during the F.Y. under consideration. Notice u/s 148 of the Act was issued and served upon the assessee. Reasons for reopening the assessment were the AIR information in respect of purchase of immovable property of Rs. 34.50 lakhs.

4.

During the course of assessment proceedings, the Assessing Officer sought explanation from the assessee regarding the source of purchase of immovable property. In his reply, the assessee stated that he has taken unsecured loan of Rs. 50 lakhs from Shri Vijay Tehalani, out of which Rs. 35 lakhs was taken in F.Y. 2007-08 and Rs. 15 lakhs was received during the current F.Y. Copy of bank statements was furnished. However, for some reason, the assessee agreed to surrender Rs. 15 lakhs and the Assessing Officer completed the assessment by making addition of Rs. 15 lakhs, which was confirmed by the ld. CIT(A) by giving some illogical and absurd reasons.

5.

Before me, the ld. counsel for the assessee stated that the reassessment proceedings were initiated to examine the source of purchase of immovable property of Rs. 34.50 lakhs whereas the Assessing Officer has made addition of Rs. 15 lakhs stating that the said amount was surrendered by the assessee during the assessment proceedings. The ld. counsel for the assessee stated that the bank statements were furnished before the Assessing Officer and also before the ld. CIT(A), but none of them examined those statements.

6.

On the other hand, the ld. DR supported the findings of the lower authorities.

8.

I have carefully considered the orders of the authorities below.

It is true that the notice u/s 148 of the Act was issued to examine the surrender of purchase of immovable property of Rs. 34.50 lakhs. It is equally true that for some reason or the other, the Assessing Officer made addition of Rs. 15 lakhs as the amount surrendered by the assessee. The order of the first appellate authority does not even mention about the documentary evidences filed by the assessee explaining the source of purchase of immovable property.

9. On such cryptic order, I am left with no choice but to restore the issue to the file of the Assessing Officer. The Assessing Officer is directed to examine the amount of loan taken in the two F.Ys. The Assessing Officer is further directed to match the source of investment and decide the issue afresh after giving reasonable and sufficient opportunity of being heard to the assessee. I order accordingly.

9.

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

The order is pronounced in the open court on 07.10.2019.

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