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Facts
The assessee did not file her return of income for A.Y. 2013-14. Re-assessment proceedings were initiated u/s 147 based on seized material, leading to an addition of Rs. 73,62,600 u/s 69 for unexplained investments in a flat purchase, comprising cash, cheque payments, and stamp duty. The CIT(A) upheld this addition.
Held
The Tribunal condoned a 363-day delay in filing the appeal. It ruled that the alleged cash investment of Rs. 40 lakh pertained to F.Y. 2010-11 (A.Y. 2011-12) and not the year under consideration, and verified the actual cash component was less. The sources for cheque payments (SBI Housing Loan) and stamp duty (loan from brother and joint contributions) were adequately explained, leading to the deletion of the entire addition of Rs. 73,62,600 made u/s 69.
Key Issues
1. Condonation of delay in filing the appeal. 2. Whether the addition of Rs. 73,62,600 for unexplained investments in a flat purchase under Section 69 was justified, considering the correct assessment year and explanation of sources.
Sections Cited
Section 147 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961, Section 144B of the Income Tax Act, 1961, Section 69 of the Income Tax Act, 1961, Section 250 of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2013-14 is directed against the order dated 08.01.2024 framed by National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 17.03.2022 passed u/s.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.
Registry has informed that there is delay of 363 days in filing of the appeal before this Tribunal. Assessee has filed an affidavit explaining the reasons which gave rise to delay and the contents of said Affidavit reads as under:
“2. That for the A.Y. 2013-14, the learned Assessing Officer of Income Tax. National Faceless Assessment Centre vide his order dt. 17.03.2022 made addition of Rs.73,62,600 u/s.69 of the I.T. Act 1961 for the reasons as mentioned in the said order.
3. That the Resp. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC). Delhi, vide his appellate order dt. 08.01.2024 confirmed the addition made by the Ld. Assessing Officer as referred above.
That at the time of filing the Form No. 35 before the Resp. CIT(A)-NFAC, I had given the email Id of my brother i.e. abhijeet9333@yahoo.co.in. Since, my brother used to look after all the financial matters, his mail id was given on form no. 35.
However, due to some disputes in our family, my brother has disconnected relation with me and my in-laws. All the notices were served on his mail id as it was given at the time of filing the appeal before Respected CIT(A). Due to our strained relationship, he did not communicate the same to me.
I have also updated my email id on the system and it is seen that some of the notices were also sent to my mail id. However, the same were delivered to my Spam folder and hence I could not track the same.
7. Recently, when I casually visited to my consultant to know the status of the appeal filed, then on verification, it was revealed that the notices were already issued by the Resp. CIT(A)-NFAC on the dates mentioned in his order and the Resp. CIT(A) has already passed the order under section 250 of the Act on 08.01.2024.
Thus, the moment I came to know about the passing of order under section 250, I immediately insisted my consultant to file the appeal and the same is being filed before the Hon'ble Bench now.
Due to the above genuine difficulty, there is delay in filing the said appeal by 363 days (from 09.03.2024 to 06.03.2025) in filing the said appeal.
Given these circumstances, I sincerely request the Hon'ble Bench to kindly condone the said delay of 363 days in filing the appeal as the said delay in not intentional and deliberate.”
Having gone through the reasons, we are satisfied that ‘reasonable cause’ prevented the assessee to file the appeal within the stipulated time. We note that the delay is not intentional and assessee would not have gained from filing the appeal with a delay. We therefore in light of judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condone the delay of 363 days in filing of the instant appeal before this Tribunal and admit the appeal for adjudication.
4. Assessee has raised four grounds of appeal of which Ground No.4 is general in nature which needs no adjudication. Ground No.1 has been raised challenging the jurisdiction assumed by the ld. Assessing Officer for carrying the re- assessment proceedings. Ground Nos. 2 and 3 are on merits of the case against the finding of ld.CIT(A) affirming the action of the ld. Assessing Officer making addition of Rs.73,62,600 u/s.69 of the Act.
5. At the outset, ld. Counsel for the assessee requested for not pressing Ground No.1 raising legal issue challenging the validity of re-assessment proceedings. Accordingly, Ground No.1 raised by the assessee is dismissed as ‘not pressed’.
6. The only ground which survives for our adjudication is the Ground Nos. 2 and 3 on merits of the case regarding addition of Rs.73,62,600 made by the ld. Assessing Officer u/s.69 of the Act.
Brief facts of the case are that the assessee is an individual and did not file any return of income for A.Y. 2013- 14. Based on the information about seized material found during the course of search and seizure action carried out in the case of Nandan Group and Shri Shamkant Kotkar, assessee was issued notice u/s.148 of the Act and re- assessment proceedings were carried out. Assessee did not file any return of income in response to notice u/s.148 of the Act. During the course of re-assessment proceedings, ld. AO mentioned that on page 39 Bundle No.2 of the seized material found during the course of search at Nandan Group and based on such information appearing in such seized material he concluded that the assessee has made unexplained investment in cash at Rs.40.00 lakh, unexplained investment through cheque at Rs.30.70 lakh and unexplained investment for Stamp Duty at Rs.3,62,600/- towards the purchase of flat from Nandan Associates. The assessment has been framed u/s.147 r.w.s.144 r.w.s.144B of the Act and income assessed at Rs.73,62,600/-.
8. Aggrieved with the additions, assessee preferred appeal before ld.CIT(A) before whom though the assessee did not appear but ld.CIT(A) has dealt the issue on merits in length and dismissed the assessee’s appeal where he has held that ld.AO has assumed valid jurisdiction u/s.147 of the Act and consequently has rightly made the impugned addition of Rs.73,62,600/- u/s.69 of the Act. Now the assessee is in appeal before this Tribunal.
9. Ld. Counsel for the assessee referring to the paper book running into 30 pages and also referring to the assessment order firstly contended that the addition of Rs.40.00 lakh for unexplained cash is uncalled for because such transaction took place during F.Y. 2010-11 relevant to A.Y. 2011-12 and in support he submitted that during the course of assessment proceedings itself ld. AO has referred to the statement of Shri Abhijit Nikam, key person of the Nandan Group, who in the statement recorded on 09.03.2021 and in reply to Question No.9 while explaining the entries of the alleged seized material referred by ld. AO in the assessment order, has stated that the entries in these pages pertain to F.Y. 2010-11. He further submitted that out of the total amount of Rs.40.00 lakh which was paid during F.Y. 2010-11 only Rs.9,80,000/- was paid in cash and remaining was through cheque. Therefore, he submitted that the addition of Rs.40.00 lakh could not have been made for A.Y. 2013-14.
10. So far as the remaining addition of Rs.3,63,600/- he submitted that the source of the issue of cheque are from State Bank of India Housing Loan Account which is in the name of assessee, her mother and her brother and reference was made to the relevant pages of the loan account where these entries of Rs.25,29,000/- paid on 08.05.2012 and Rs.4,71,000/- paid on 26.06.2012 are appearing and therefore the same are clearly explaining the source of investment of Rs.30.00 lakh. For the remaining amount of stamp duty, it was submitted that apart from the income earned by the assessee during the year and preceding years, assessee has taken loan from his brother Shri Abhijit Nikam on 09.05.2012 at Rs.5.00 lakh. He thus stated that source of the alleged investment have been explained and impugned additions deserve to be deleted.
On the other hand, ld. DR supported the order of ld.CIT(A) and stated that assessee has not participated in the proceedings before both the lower authorities.
We have heard the rival contentions and perused the record placed before us. Addition of Rs.73,62,600/- made by the ld. Assessing Officer in the hands of assessee u/s.69 of the Act for the unexplained investment in purchase of flat from Nandan Associates. The alleged addition constitutes the addition for unexplained investment in cash at Rs.40.00 lakh and the remaining amount is through cheque. Even though the assessee has not participated in the proceedings before the authorities however the assessee has filed complete details which on the face of itself explain the transactions in dispute. We will first like to reproduce the seized material referred to by ld. AO in the assessment order :
From the above seized material, on the left side there are figures starting from 1.5 and goes on to the last figure 6.0. Shri Abhijit Nikam has stated that the transactions appearing in this sheet pertains to F.Y.2010-11. Ld. counsel for the assessee has furnished detail of the total payment of Rs.70.00 lakh and the same reads as under :
On going through the above details which remain uncontroverted by ld. DR and even the statement of Shri Abhijit Nikam also supports the sheet, it indicates that payment of Rs.40.00 lakh has been made during F.Y.2010-11 relevant to A.Y. 2011-12 and major amount of payment have been made through cheques received from assessee’s mother Mrs. Hiradevi Kalane and her brother Shri Abhijit Kalane and the relevant entries have been verified from the bank statement filed in the paper book placed at pages 13 to 30. We thus find that since the payment of Rs.40.00 lakh referred to by ld. AO in the assessment order includes firstly the transaction carried out during F.Y. 2010-11 and secondly the allegation of payment of cash also is not correct because the cash payment if Rs.9,80,000/-. Even otherwise since the transaction pertains to F.Y. 2010-11 relevant to A.Y. 2011-12 no addition could be made for the assessment year under consideration, i.e. A.Y. 2013-14. We therefore delete the addition of Rs.40.00 lakh.
Now for the alleged addition made by ld. AO at Rs.33,62,600/-, ld. Counsel has given reference to the State Bank of India Housing Loan statement which is placed at pages 10 to 12 of the paper book and this statement is in the joint name of Mrs. Arundhati Kalane, her mother Mrs.Hiradevi Kalane and her brother Mr.Abhijit Kalane. The entries in this statement are that on 07.05.2012 loan of Rs.25,29,000/- has been issued and on 22.06.2012 another entry of Rs.4,71,000/- is appearing. As on 31.03.2013, SBI housing loan due amount if Rs.29,40,044/-. Details of SBI loan account and the specific entries referred above clearly indicates that the source of investment through cheque at Rs.30.00 lakh is clearly explained and no addition deserves to be made for this amount and the same is hereby deleted.
As far as the addition for explained investment on stamp duty at Rs.3,62,600/- is concerned, we notice that the assessee has purchased the flat jointly with her mother and brother and all three have contributed for the purchase of the said flat. Assessee has also taken loan of Rs.5.00 lakh from her brother and the same is verifiable from the Savings Bank account of his brother Mr. Abhijeet Dnyandeo Kalane bearing No.31208254643 wherein on 09.05.2012 there is an entry which relates to the payment which has been made directly by him to Nandan Associates at Rs.5,00,050/-. Taking into consideration all these facts including cumulative savings of the assessee, her brother and her mother, we find force in the contention of ld. Counsel for the assessee that sufficient funds are available with the assessee to pay for the stamp duty at Rs.3,62,600/- and therefore no addition for the said amount is called for.
In totality and in view of the discussion made hereinabove, we hereby set aside the finding of ld.CIT(A) and deletion the addition of Rs.73,62,600/- made by the ld. AO u/s.69 of the Act. Ground Nos. 2 and 3 raised by the assessee are allowed.
In the result, the appeal filed by the assessee is partly allowed as per the terms indicated above.
Order pronounced on this 06th day of January, 2026.