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Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU
Before: SHRI B.R. BASKARAN & SHRI PAVAN KUMAR GADALE
The revenue has filed the appeal against the order of the CIT(A)-4, Bengaluru, dated 28/05/2018 passed u/s 143(3) and 250 of the Income-tax Act,1961 ['the Act' for short] for the assessment year 2012-13.
The revenue raised the following grounds of appeal:
The Order of the Ld. CIT (A)-4, Bangalore, in so far as it is prejudicial to the interest of the Revenue, is opposed to law and the fact and circumstances of the case.
Page 2 of 5 2. On the facts and circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.1,18,10,386/ made by AO on account of unexplained investment on construction of Building.
3. On facts of the case the Ld. CIT (A) has erred in deleting the addition of Rs.1,18,10,386/ without verifying the details of share transactions statements, mutual fund statement, Cash withdrawal etc, as mentioned in Remand Report.
For these and other grounds that may be urged at the time of hearing, it is prayed that the order of CIT(A) is so far as it relates to the above grounds may be reversed and that of Assessing officer may be restored.
The appellant craves the right to add, alter, amend and / or delete any of the grounds that may be urged.
Brief facts of the case are that the assessee is in the business of trading of shares and filed Return of income on 18/09/2013 declaring ‘nil’ income and the loss disclosed being Rs.51,71,968/-. The Return of income was processed u/s 143(1) of the Act. The case was selected for scrutiny under CASS and notices u/s 143(2) and 142(1) were issued. In response, the learned AR appeared from time to time and submitted the information. The AO found that the assessee has made investment in the construction of building and the sources were called to explain. Since the assessee failed to establish one to one link and cash flow in respect of Page 3 of 5 construction of the building and also no details of construction of building were filed. Hence, the AO treated the sources for construction as unexplained by the assessee and observed that the building needs to be referred to the Valuation Officer to arrive at actual cost and made addition of Rs.1,08,10,386/- with other additions and assessed the total income of Rs.1,32,26,120/- vide order u/s 143(3) of the Act dated 26/03/2015.
4. Aggrieved by the order, the assessee has filed an appeal with the CIT(A). The CIT(A) having considered the grounds of appeal and the findings of the AO and the submissions made by the learned AR dealt with issues independently and granted relief. On appeal by the Revenue to Tribunal, on disputed issue of building construction, the learned DR vehemently relied on the order of the AO and prayed for allowing the revenue appeal.
Contra, the learned AR supported the order of the CIT(A) and filed written objections.
5. We heard rival submissions and perused material on record. Prima facie, the revenue’s contention that he CIT(A) has erred in deleting addition made by the AO on account of unexplained investment without verifying the details. Whereas on perusal of the CIT(A)’s order, at page 5 we found the observations of the CIT(A) as under:
Page 4 of 5 “The AO. in the remand-report has recorded a clear finding to the effect that. the payments towards the building construction being_ made through Bank. were duly verified and were found to be in-order. The relevant part of the remand-report is extracted as under:
“The AO in his order had made addition of Rs.1,18,10,386/-, since the assessee could not able to explain the source for the said investment. On perusal of the submission made to CIT(A)-4, the assessee has contended that the entie payment was made through Bank and was financed through inflow from sale of shares, impex sales, mutual funds encashed. On verification of the submission, it was found that the assessee had submitted ledger entry for Building Construction, ledger books of ING Vysya Bank and Kotak Bank. The verification of each individual entry in the ledger of building construction was verified with Bank Statements. The claim of the assessee that the payment for construction of Building through Bank is found to be in order. On verifying the ledger book of Kotak Mahindra Bank the total receipt received from Kotak Securities is Rs.1,19,63,449/- for FY 2011-12 and was verified along with Bank Statements. In background of the above detailed discussion and facts & circumstances of the case, I find no valid evidenciary basis to sustain the impugned addition. The same is therefore directed to be deleted. The assessee's grounds of appeal in this respect are therefore allowed.
We found that the assessee has submitted evidence which was forwarded to the AO for his comments and the CIT(A) having considered the remand report, the submissions of the assessee and the material on record, observed that the addition cannot be sustained. The learned DR has only supported the orders of Page 5 of 5 the AO but could not controvert the findings of the CIT(A) with any cogent evidence or material. Therefore, we are not inclined to interfere with the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue.
In the result, the appeal filed by the revenue is dismissed.