MADHUKAR NARAYAN PATIL,RAIGAD vs. INCOME-TAX OFFICER, PANVEL

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 2, Aurangabad [‘CIT(A)’ for short] dated 23.03.2017 for the assessment year 2008-09.

Briefly, the facts of the case are as under: The appellant is an individual and no return of income under the provisions of section 139 of the Income Tax Act, 1961 (‘the Act’) was filed for the assessment year 2008-09. Subsequently, based on the information received from the Investigation Wing of the Department, Mumbai that the appellant had received on-money payment on sale of plots situated at CIDCO Plots bearing Plot No.08, Sector- 56, admeasuring 450 sqm by Jai Corp Group, the Income Tax Officer, Ward- 3, Panvel, Dist.- Raigad (‘Assessing Officer’) issued a notice u/s 148 calling upon the appellant to file the return of income. However, no return of income was filed by the appellant in response to said notice u/s 148 of the Act. The appellant also not complied with the other notices issued u/s 143(2) and 142(1) of the Act. Therefore, in these circumstances, the Assessing Officer completed the assessment to best judgement by making addition of Rs.42,73,530/- based on the information furnished by the Investigation Wing of the Department, Mumbai that the appellant was paid on-money payment of Rs.42,73,530/- on transfer of the plot to M/s Iconic Realtors Ltd. (an entity of Jai Corp Group). Accordingly, the Assessing Officer completed the assessment by bringing to tax as ‘short term capital gains’ of Rs.11,50,000/- and on-money receipt of Rs.42,73,530/- u/s 144 r.w.s 147 of the Act vide order dated 24.03.2014.

Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A) contending that in the absence of evidence of receipt of on-money of Rs.42,73,530/-, no addition should have been made. It was contention of the assessee that the assessment has been made without making available to the assessee evidence/material evidence, recorded statements. The said contention of the assessee had been rejected by the ld. CIT(A). The ld. CIT(A) duly considering the statement/evidence against the assessee held the addition made is based on the evidence found as result of search and seizure operations in the hands of Shri Madhukar Narayan Patil who is a land aggregator for Jai Corp Group. The ld. CIT(A) discussed in detail the facts of case in his findings vide para 14 and 15 of the impugned order. Accordingly, the ld. CIT(A) dismissed the appeal filed by the assessee.

Being aggrieved by the order of the ld. CIT(A), the appellant is before us in the present appeal. 5. The ld. Counsel submitted that the addition was made by the Assessing Officer solely on the basis of surmises, conjectures and third party’s statement without offering any cross-examination to the appellant. Without prejudice to this argument, it was further 5 persons and the entire on-money consideration cannot be taxed in the hands of appellant alone. 6. On the other hand, ld. Sr. DR placing reliance on the orders of the lower authorities submitted that the assessee had not availed opportunities given by the Assessing Officer nor filed the return of income in response to notice issued u/s 148 of the Act. He also submitted that the evidence relied upon by the Assessing Officer for the purpose of making addition was furnished to the appellant. However, the appellant had not availed opportunity of rebutting the evidence. Therefore, the action of the lower authorities should be upheld. 7. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the taxing on alleged receipt of on-money payment of Rs.42,73,530/- based on the information found as a result of search and seizure operations in the hands of Shri Madhukar Narayan Patil and Jai Corp Group. On mere perusal of the assessment order, it would reveal that the appellant had neither complied with the notice issued u/s 148 nor responded to the notices issued u/s 143(2) and 142(1) of the Act. In