AADESH TYAGI,GHAZIABAD vs. ITO, WARD- 1(5), GHAZIABAD

The grievances raised by the assessee read as under:

Brief facts of the case are that AIR information was received in the present case that the assessee has deposited cash amount of Rs. 10,01,000/- in Savings Bank Account and enjoyed capital gain of Rs. 70,25,000/- on sale of immovable property during the F.Y. 2008-09. On the basis of material available on record and in the absence of any compliance from the side of the assessee, the Assessing Officer concluded that the source of deposits in his savings bank account is unexplained and made an addition of Rs. 10,01,000/- u/s 69A.

On the second issue, the Assessing Officer observed that the assessee has sold immovable property for Rs. 70,25,000/- during the F.Y. but has failed to furnish plausible explanation with respect to short term capital gain liability on sale of immovable property for Rs. 70,25,000/- under short term capital gain. Therefore, the Assessing Officer added a sum of Rs. 70,25,000/- as short term capital gain in the hands of assessee. Thus, total income of the assessee was assessed at Rs. 80,26,000/-. 5. When the aggrieved assessee went in appeal before the ld. CIT(A), the ld. CIT(A) confirmed the cash deposit of Rs. 10,01,000/-. The ld.

Per contra, the ld. DR relying upon the order of the ld. CIT(A) contended that the assessee has failed to provide the bank details of Sri Khemraj to substantiate such claim. There is nothing on record which suggests that the money transferred from the accounts of the assessee has gone to the account of Sri Khemraj. Even if it would have been credited to the account of Sri Khemraj, all the amount would have been withdrawn from the bank account of Khemraj as it is a practice in this ITA No. 4151/DEL/2018 [A.Y. 2009-10]

It is say of the ld. DR that when such power of attorney is given by the first owner of the property, the first owner receives the sale consideration in lieu of complete transfer of rights to the power of attorney holder. The power of attorney holder becomes the actual owner from the date when such power of attorney is given to him. In the present case, Sri Khemraj ceases to be owner of the property when such power of attorney was given to the assessee. It is more evident from the fact that all sales consideration was received by the assessee at the time of sale of the impugned property. The assessee is the actual owner of the property at the time of sale and the Assessing Officer has correctly computed the short term capital gain of Rs. 41,70,288/ over such sale of the property judiciously allowing the cost of acquisition of Rs. 28,54,712/against the sales consideration of Rs. 70,25,000/. Hence the short term capital gain of Rs. 41,70,288/- should be confirmed.

We have heard the rival submissions and have perused the relevant material on record. We find that the assessee has submitted

After considering the factual matrix and the submissions of both the counsels, we note from the CIT(A) order that during the remand proceedings before the AO, the assessee had produced his bank account showing debit of all the sale proceeds from his account to Sh Khemraj bank account. The AO however could not verify the credit entries in Sh Khemraj bank account to establish the veracity of the assessee submissions. We are therefore of the considered opinion that in the interest of justice and fair play, the appeal be restored to the file of the Assessing Officer for fresh examination on this aspect. The ld. Assessing Officer is directed to decide the issues afresh after affording reasonable and sufficient opportunity of being heard to the assessee. The assessee is directed to avail the opportunity and present its case. This issue is allowed for statistical purposes.

On the issue of cash deposit of Rs. 10,01,000/- the ld counsel of the assessee vehemently submitted that the cash deposit of Rs. 10,01,000/ was received from Sri Tulsi Ram Tyagi and investment of the same in purchase of some agriculture land. The Assessing officer and the CIT(A) added the same stating that the assessee has failed to furnish adequate evidences to explain the cash deposit.

After considering the facts and submissions, we are of the considered opinion that this issue also needs to be set aside to the file of the Assessing Officer for examination of Sh Tulsi Ram Tyagi and adjudicate the issue afresh. We, therefore, remit this matter also to the file of the Assessing Officer for verification of facts.

In the result, the appeal of the assessee in ITA No. 4151/DEL/2018 is allowed for statistical purposes. The order is pronounced in the open court on 14 .02.2025. [SUDHIR KUMAR]