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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI R. K. PANDA
O R D E R
PER R. K. PANDA, AM :
The above two appeals filed by the assessee are directed against the common order dated 31.10.2017 of the CIT(A)- IV, Kanpur relating to assessment years 2001-02 and 2002-03 respectively. Since identical grounds have been taken by the assessee in both the appeals, therefore, these were heard together and are being disposed of by this common order for the sake of convenience.
The grounds raised by the assessee in both the appeals are as under :-
ITA No.7402/Del/2017 :
“1. That the CIT(A) has failed to acknowledge that no material was found/seized against the assessee at the time of search proceedings and that the assessment u/s 153A is bad in law and facts and hence, shall be quashed. 2. That the order of CIT(A) is bad in law and in upholding the addition of Rs.1,39,901/- being investment in house property. However, same was through banking channel.” :
“1. That the CIT(A) has failed to acknowledge that no material was found/seized against the assessee at the time of search proceedings and that the assessment u/s 153A is bad in law and facts and hence, shall be quashed. 2. That the order of CIT(A) is bad in law and in upholding the addition of Rs.2,05,000/-being investment in house property. However, same was through banking channel.”
First we take up the facts of the case for assessment year 2001-02 as the lead case. The assessee is an individual. An action u/s 132 was taken on the residential premises of the assessee at A-130, Shastri Nagar, Meerut on 27.10.2005 and the bank lockers in the name of the assessee and in the name of the family members of the assessee were also searched on various dates.
During the course of search action an amount of Rs.3,39,700/- in cash was found out of which Rs.2,00,000/- was seized. Similarly, out of jewellery found of Rs.26,06,077/-, jewellery valued at Rs.12,51,599/- was seized. In response to notice u/s 153A, the assessee filed her return of income for the impugned assessment year declaring income of Rs.3,18,106/-. The Assessing Officer in the assessment order framed u/s 153A/143(3) determined the total income of Rs.5,73,794/- wherein apart from the other additions he made addition of Rs.1,39,901/- on account of undisclosed investment in house property which is the subject-matter of litigation in the impugned appeal. The basis of addition of the above amount is on account of the comparison of the Balance Sheet for the year ending on 31.03.2000 to 31.03.2001 according to which the assessee has made investment of Rs.1,39,901/- in the property during the year and no amount was shown towards withdrawal for construction purposes. (Similar addition of Rs.2,05,000/- has been made in assessment year 2002-03).
In appeal, the ld. CIT(A) upheld the action of the Assessing Officer by observing as under :-
“7. Ground no.4, relates to addition of Rs.1,39,901/- and Rs.2,05,000/- for A.Y. 2001-02 and 2002-03 respectively on account of investment in house property. The AO has observed from the perusal of the details of account that no amount has been credited from the bank for the construction purpose, hence the same stands unexplained. On the other hand appellant has submitted that the cash was withdrawn from time to time from the bank account and the same is utilized for the purpose of construction. However, appellant has failed to submit the cogent evidence regarding the utilization of cash for investment in house property from the cash withdrawal from the bank. Also, the cash withdrawn from the bank is barely sufficient to meet the expenses on account of investment in property. It is also not undisputed that the appellant must have spends for the house hold expenses and medical expenses etc. from the cash withdrawn from the bank. As appellant has failed to establish the unbreakable nexus between the cash withdrawn from the bank and investment made in the house property, addition made by the AO is confirmed and appeal of the appellant is dismissed.”
4.1 Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal.
I have considered the rival arguments made by both the sides and perused the material available on record. I find the Assessing Officer made the addition on the ground that the assessee has made investment of Rs.1,39,901/- in the house property during the year which is as per the difference in the Balance Sheet for the year ending on 31.03.2000 to 31.03.2001 and the assessee has shown the entire withdrawal for construction purposes. It is the submission of the ld. counsel for the assessee that cash was withdrawn from time to time from the bank account and the same is utilized for the purposes of construction.
It is the submission of the ld. DR that the assessee failed to submit cogent evidence regarding the utilization of cash for investment in house property from the cash withdrawal from the bank. It is also his submission that the cash withdrawal from the bank is barely sufficient to meet the construction expenses for the house. I find the entire investment in house property for both the years is very negligible i.e. Rs.1,39,901/- for assessment year 2001-02 and Rs.2,05,000/- for assessment year 2002-03. Considering the smallness of the investment in the house property and in absence of any incriminating material found during the course of search regarding any other lavish expenditure such as marriage in the family, foreign tour etc. and considering the totality of the facts of the case, I am of the considered opinion that no addition is called for in the instant case.
Accordingly, the addition sustained by the ld. CIT(A) amounting to Rs.1,39,901/- for assessment year 2011-02 and Rs.2,05,000/- for assessment year 2002-03 is directed to be deleted. Since the assessee succeeds on merit, the legal ground raised by the assessee being academic in nature is not being adjudicated.
In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open Court on this 30th July, 2018.