KISHOR JAGANNATH DANDEKAR,CHENNAI vs. ITO NON CORPORATE WARD-11(3), CHENNAI

O R D E R

PER DUVVURUL RL REDDY, JUDICIAL MEMBER:

3.1 On being aggrieved, the assessee is in appeal before the Tribunal. 3.2 We have heard both sides through video conferencing, perused the materials available on record and gone through the orders of authorities below including brief paper book filed by the assessee. In this case, the assessee has admitted the sale consideration at ₹.8,11,00,000/- for the sale of property of the assessee along with three others, whereas, the Assessing Officer observed that the consideration for the property sold was ₹.8,50,00,000/-. On verification of the bank statement with HDFC Bank, the authorities below have observed that on 07.06.2014, a sum of ₹.50,00,000/- was received from Vikranthi Foundations Firm and on the very same day, a cheque was given in favour of Sunil Bhandari for the same amount of ₹.50,00,000/-. Apart from the above entry, the ld. CIT(A) has observed that there was another entry of ₹.50,00,000/- on 27.06.2014 received from M/s. Vikranthi Foundations Firm by funds transfer and this transaction was not reflected in the ledger account submitted by M/s. Vikranthi Foundations Firm. The ld. CIT(A) further observed that even if the above payment made on 07.06.2014 is ignored as balancing payments, still, the assessee had received a sum of ₹.50,00,000/- on 27.06.2014 and thereby confirmed the addition. Before us, the ld. Counsel for the assessee has submitted that before confirming the addition with regard to the entry of ₹.50,00,000/- on 27.06.2014 stated to have received from M/s. Vikranthi Foundations Firm by funds transfer and not reflected in the ledger account, the assessee was not given an opportunity of being heard. On perusal of the appellate order, we find that the assessee was not given any opportunity to explain about the entry of ₹.50,00,000/- on 27.06.2014 received from M/s. Vikranthi Foundations Firm by funds transfer which was not reflected in the ledger account submitted by M/s. Vikranthi Foundations Firm. Thus, this ground of appeal requires verification.

4. With regard to the second addition on unexplained investments of ₹.54,00,000/- under section 69 of the Act, the Assessing Officer has observed that the assessee has received ₹.50,00,000/- on 07.06.2014 and the same was debited to Shri Sunil Bhandari through journal entry. As the assessee has not given any break up for the payment of the amount towards UDS, this amount was taken as the source for the purchase of land and regarding the balance of ₹.40,00,000/ - plus registration of ₹.14,00,000/- and no details were available either in the ledger account or in the bank account. Regarding the land development charges of ₹.50,00,000/- paid to Shri Sunil Bhandari, it was seen from the bank account and ledger account that the assessee has received ₹.50,00,000/- on 13.06.2014 and the same has been paid on 14.06.2014. Regarding the construction cost of ₹.40,00,000/- the same was debited in the account on 31.03.2015. Thus, out of the total cost of the new flat purchased, source for ₹.1,40,00,000/- stands explained and the balance of ₹.40,00,000/- plus registration charges of ₹.14,00,000/- was not explained and therefore, the Assessing Officer treated the same as unexplained investments of the assessee and the same was brought to tax under the head income from other sources as per the provisions of sec. 69 of the Act and taxed accordingly. On appeal, after considering the submissions of the assessee, the ld. CIT(A) confirmed the addition.

4.1 On being aggrieved, the assessee is in appeal before the Tribunal.

4.2 We have heard the rival submissions. In this case, it was the submission of the ld. Counsel that the undivided share of the property was sold and the assessee’s share is 1/4th. It was sold to M/s. Vikranthi Foundation Firm and moreover, from the same firm, the assessee purchased new flat out of sale consideration after entering into agreement and these facts are not in dispute. Further, in this case, the buyer of the old property and seller of the new flat to the assessee are one and the same and the transactions were all routed through ledger accounts. Similar transactions in co-owner’s case have been accepted without making any addition. It was further submission that in view of the above facts, the ld. CIT(A) was incorrect to give findings that each case has to be decided on its own merits and simply because in the co-owner’s case the source for the investment was accepted it does not mean that the source for the assessee’s case should also be accepted. After considering the submissions of the ld. Counsel for the assessee, we find that the ld. CIT(A) as well as the Assessing Officer have not passed any detailed order regarding the unexplained investment and also not given an opportunity to the assessee to explain about the unexplained investment of ₹.40 lakhs and registration charges of ₹.14 lakhs.

4.3 Thus, we set aside the order of the authorities below and remit the matters back to the file of the Assessing Officer to call for details from the assessee on the specific observations of the ld. CIT(A) with regard to the receipt of sum of ₹.50,00,000/- on 27.06.2014 received from M/s. Vikranthi Foundations Firm by funds transfer which was not reflected in the ledger account submitted by M/s. Vikranthi Foundations Firm as well as the issue of unexplained investments and after verification of the details of the assessee as well as co-owner’s case, both the issues may be decided afresh in accordance with law after affording an opportunity of being heard to the assessee. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.