AJAY SHIVRAM KALAN,BHIWANDI vs. ITO -WARD- 1 (1), KALYAN

The assessee in appeal has assailed the addition of Rs.14.00 lacs on account of unexplained investment. The brief facts of the case as emanating from records are: The reassessment proceedings were initiated against assessee by the Assessing Officer based on information received from ITO(Inv), Thane that the assessee along with other three persons had purchased land vide agreement dated 12/01/2011 at Shelar Thaluka Bhiwandi for a total consideration of Rs.34.32 lacs. Notice under section 148 of the Act was issued to the assessee on 26/03/2015. In reassessment proceedings, the assessee was asked to explain the source of investment for purchase of land. The assessee tried to explain the source of investment in land. The Assessing Officer disbelieved the same and made addition of Rs.10,50,000/-. Further, the Assessing Officer made addition of Rs.3,50,000/- in respect of loan advanced by assessee to his wife from undisclosed sources. Aggrieved against the assessment order daed 09/03/2016 passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’) the assessee filed appeal before the CIT(A). The assessee reiterated his contentions before the first appellate authority. The CIT(A) dismissed the contentions of the assessee and confirmed the additions. Hence, the present appeal by the assessee.

Shri Sudhir V. Hunnargikar,appearing on behalf of the assessee submitted that assessee had invested in land and had advanced loan to his wife from the sale proceeds received from sale of two parcels of agricultural land. The assessee had received the money through banking channel directly from the purchaser of land. All the transactions are recorded in the bank passbook. The ld. Authorized Representative for the assessee referred to the photocopy of the passbook of saving bank account No.060510006040 with Dena Bank, Navi Chawl Bazar Peth, Mumbai. The ld. Authorized Representative for the assessee submitted that amount on sale of land was received by way of cheque and the same were deposits in aforesaid saving bank account. The ld. Authorized Representative for the assessee further furnished details of the cheques through which the amounts were received and paid. The same are at pages 22 and 23 of the Paper Book. The ld. Authorized Representative for the assessee submitted that the authorities below have not examined the documents furnished by the assessee and has made the addition.

On the other hand, Shri Akhtar H. Ansari, representing the Department vehemently defended the impugned order. The ld. Departmental Representative submitted that the agriculture land which assessee is referring was sold way back in the year 2008. The land was sold by assessee’s mother. The assessee has not placed on record any documentary evidence to show that the mother of the assessee had gifted the amount or has advanced the amount as loan to the assessee. The ld. Departmental Representative prayed for confirming the impugned order and dismissing the appeal of the assessee.

Both sides heard. Orders of authorities below examined. The solitary issue raised in the appeal is regarding confirming the addition of Rs.14.00 lacs as unexplained investment. The assessee has purchased the land at Bhiwandi. The assessee purportedly source the funds for purchase of land from the sale of family property in the name of his mother. The contention of the assessee is that the sale proceeds of the said property were directly credited to the bank of the assessee in the saving bank account No.060510006040 with Dena Bank, Navi Chawl Bazar Peth, Mumbai. Further, the assessee has advanced loan of Rs.3,50,000/- to his wife. The source of said loan advanced is also stated to be the part of sale consideration of agriculture land in the name of assessee’s mother. Apparently, the authorities below has not examined the bank details of the assessee before making/ confirming the addition. The assessee has furnished details of the cheques. The same is tabulated below:-

The impugned order is set-aside and the appeal of assessee is allowed for statistical purpose in the terms aforesaid.

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