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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 06.08.2024, which in turn arises from the order passed by the A.O under Sec. 147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 18.12.2019 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal:
“Gr.No.1 "1. On the facts and circumstances of the case and in law, reasons are wrongly recorded without having tangible material for escaped income of Rs.42,47,000 in the hands of assessee-co-owner; it is merely on borrowed satisfaction without verifying the facts; when assessee was having 50% share at Rs.21,23,500 and out of which, Rs.22,00,000 invested by assessee's husband (i.e., Kunj Bihari Mishra) from his bank account which is accepted in scrutiny assessment made u/s.147 of assessee's husband for AY13-14; reopening u/s.148 is merely for verification, is not permissible in the eyes of law, is invalid & is liable to be quashed." Gr.No.2 "2. On the facts and circumstances of the case and in law, approval granted by ld. PCIT u/s.151(1) is in mechanical, routine & casual manner without application of mind on his part on the dotted lines of reasons recorded by AO, without verifying the records of the assessee that she was co-owner of the impugned property and more so, Rs.22 lakhs has been made invested by her husband which is accepted by the revenue in scrutiny assessment made u/s.147 for assessee's husband 'case for AY13-14 later on and more so, without recording any concurrence/satisfaction on his own by Id PCIT in the impugned approval granted u/s.151(1); sanction granted u/s.151(I) is invalid & thus, assessment made u/s.147 would also be invalid & is liable to be quashed; relied on Pioneer Town Planners P Ltd (2024) (Del HC)." Gr.No.3 "3. On the facts and circumstances of the case and in law, Id CIT(A) has erred in sustaining addition of Rs.11,73,850 on the count of investment in property while, assessee-co-owner Was made investment of Rs.22,72,250 as her share was 50% on the property and out of which, Rs.22,00,000 had been invested by assessee's husband (Kunj Bihari Mishra) from his bank account which is accepted by the Revenue in scrutiny assessment made u/s.147 dt.15-12-19 in case of assessee's husband for AY.13-14; addition of Rs.11,73,850 is unjustified and is liable to be deleted."
Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the captioned appeal involves a delay of 34 days. Elaborating on the reasons leading to the delay, the Ld. AR submitted that though the assessee had specifically stated in Form No.35 that all notices/communications be sent in a mode otherwise through email but, till date, no physical/hard copy of the impugned order of the CIT(A) had been received by her. The Ld. AR in support of his aforesaid contention has taken me through the “Form-35” which substantiated the aforesaid factual position. For the sake of clarity, the relevant extract of the “Form 35” is culled out as under:
Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) though did not raise any objection to the seeking of the condonation of delay involved in filing of the present appeal but at the same time, submitted that in the faceless regime physical service of the orders passed by the CIT(Appeals) had been dispensed with. It was thus, the Ld. DR’s claim that as the explanation of the assessee as regards the delay involved in filing of the appeal was not backed by any cogent/plausible explanation, therefore, the same did not merit to be condoned.
I have heard the Ld. Authorized Representatives of both the parties qua the issue of delay involved in filing of the present appeal. The assessee has filed an “affidavit”, dated 04.12.2024, wherein it is deposed by him that though the assessee had specifically stated in Form No.35 that all notices/communications be sent in a mode otherwise through email but, till date, no physical/hard copy of the impugned order of the CIT(A) had been received by him. Although, it is the Ld. DR's claim that service of notices/communications by the CIT(Appeals)/NFAC is only carried out by dropping the notices/communications/orders in the email address provided by the assessee, but I am unable to persuade myself to subscribe to the same. If that would have so then there was no need to provide for an option to the appellants to receive the notices/communications through e- mail or by any other mode. As the memorandum of appeal in “Form 35” specifically provides an option as to whether or not notices/communications (which includes notices intimating fixation of appeal) are to be sent on email address, therefore, I am unable to comprehend as to on what basis it is claimed by the Ld. DR that the assessee who had opted out of service of all notices/communications through email was validly served with the notices intimating the fixation of the appeal by dropping the same in her email account. As regards the email account provided by the assessee in the memorandum of appeal, i.e. personal information/Column 17, the same is only for the purpose of providing the details as sought for in the said column. Be that as it may, now when the assessee had in the memorandum of appeal in “Form 35” specifically opted out of service of all notices /communications from the CIT(Appeals)'s office through email, therefore, I am afraid that the Ld. DR's contention that the assessee was validly put to notices vide the notices intimating the fixation of the appeal dropped in her e-mail account does not merit acceptance. Considering the aforesaid facts, I am of the view that as there are justifiable reasons leading to the impugned delay of 34 days in filing of the present appeal, therefore, the same considering the totality of the facts merits to be condoned.
Controversy involved in the present appeal hinges around in a narrow compass i.e. as to whether or not the A.O was justified in law and facts of the case in treating the unexplained portion of the investment made by the assessee as an unexplained investment u/s. 69 of the Act?
Succinctly stated, the assessee a/w. another co-owner viz. Smt. Jyoti Mishra, W/o. Shri Banke Bihari Mishra, R/o. Ashok Nagar, Bilaspur had purchased a property i.e. a residential plot admeasuring 3808 Sq. Ft. (out of Khasra Nos. 4/3 & 4/4) situated at ward No.42, Dr. Shyamprasad Nagar, Bilaspur.
During the course of assessment proceedings, the A.O called upon the assessee to put forth an explanation as regards the source of the investment made by her for purchase of the aforesaid property. In reply, the assessee submitted that her share of investment in the aforesaid property amounted to Rs.22,72,250/-. Elaborating further, the assessee submitted before the A.O that the aforesaid investment was sourced out of the bank account No.30089020384 with State Bank of India, Branch: Bilaspur of her husband viz. Dr. Kunj Bihari Mishra. The assessee further submitted that she was not holding any bank account during the year under consideration. Also, the assessee to substantiate her aforesaid claim had enclosed a copy of the reply a/w. bank statement of her husband, viz.Dr. Kunj Bihari Mishra. The assessee further submitted before the A.O that she a/w. her husband had made cash deposits in his savings bank account No. 30089020384 with State Bank of India, Branch: Bilaspur which, inter alia, wascomprised of viz. (i) loan raised by her husband from M/s. Gruh Finance Ltd. on 26.03.2013: Rs.10 lacs; and (ii) their past accumulated savings. Apart from that, the assessee stated that she had during the subject year carried out business but no evidence regarding the same was retained by her.
The A.O based on the contents of the purchase deed observed that the assessee, viz. Smt. Radha Mishra and Smt. Jyoti Mishra had jointly purchased the subject property during the year under consideration for a total consideration of Rs.42,47,000/-. The A.O observed that one-half share of the assessee in the aforesaid investment worked out at Rs.21,23,500/- (i.e. 1½ of Rs.42,27,000/-). Referring to the sale deed, the A.O observed that the sale consideration of Rs.42,47,000/- was paid by the aforementioned purchaser to the seller viz. Smt. Nisha Sharma, as under:
SBI Cheque No.075552, dated Rs.10,00,000.00 09.02.2013 SBI Cheque No.075576, dated Rs.12,00,000.00 28.03.2013 By cash Rs.20,47,000.00 Total Rs.42,47,000.00
Apropos the payment aggregating to Rs.22 lacs that were made to the seller viz. Smt. Nisha Sharma vide cheques, the A.O observed that the said respective cheques were issued from the saving bank account No. 30089020384 with State Bank of India, Branch: Bilaspur of Dr. Kunj Bihari Mishra, husband of the assessee. It was further observed by him that two withdrawals of Rs.6 lacs each (totaling to Rs.12 lacs) were reflected in the aforesaid bank account on 30.03.2013. The A.O further observed that expenditure aggregating to Rs.3,00,701/- comprising of viz. (i) stamp duty charges : Rs.2,66,350/-; and (ii) registration fees :Rs.34,151/- was also incurred for registering the sale deed. Accordingly, the A.O worked out total investment towards purchase of the aforementioned property at Rs.45,47,701/-.
The A.O though accepted the source of the investment made by the assessee to the extent of Rs.22 lacs (supra), viz. (i) Rs.10 lacs vide SBI cheque No.075552 drawn on 09.02.2013; (ii) Rs.12 lacs vide SBI cheque No.075576 drawn on 28.03.2013, but thereafter concluded that the assessee had failed to come forth with any satisfactory explanation as regards the source of the balance investment of Rs.23,47,701/- [Rs.45,47,701/- (-) Rs.22,00,000/-]. The A.O observed that the assessee had merely stated that the balance investment was sourced out of accumulated savings of herself and her husband. The A.O in absence of any plausible explanation concluded that as the assessee was a co-owner of the subject property holding equal share, therefore, the investment of the balance amount to the extent of one-half of her share i.e. Rs.11,73,850/- (one-half of Rs.23,47,701/-) was to be treated as her unexplained investment u/s.69 of the Act. Accordingly, the A.O vide his order passed u/s.147 of the Act, dated 18.12.2019 after making the aforesaid addition of Rs.11,73,850/- u/s. 69 of the Act determined the income of the assessee at Rs.13,69,540/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out, as under:
“6. Discussion and Decision; 6.1 I have gone through the assessment .order grounds of appeal and the submission submitted by the appellant. In ground No 1, the appellant has contested the addition of Rs.11,73,850/- under section 69 of the act. The A.O has treated the above some as unexplained investment and deemed income under section 69 of the act. It was submitted that the appellant along with Smt.Jyoti Mishra had purchased the immovable property to the amount of Rs.42,47,000/-. The purchase consideration paid for the above said property is given as below: -
SBI Cheque No.075552, dated Rs.10,00,000.00 09.02.2013 SBI Cheque No.075576, dated Rs.12,00,000.00 28.03.2013 By cash Rs.20,47,000.00 Total Rs.42,47,000.00
The above consideration was paid by the purchasers in 50-50 ratio. The appellant had challenged the re-opening on the ground that the AO had recorded incorrect fact for reopening of the assessment. According to the appellant the AO had recorded aggregate amount of income which had escaped the assessment works out to Rs.42,47,000/- However the appellant had only invested 50% of the above sum.
6.2 I have gone through the assessment order and the appellant's consideration. It is to be noted here that the appellant had not filed return of income for the assessment year 2013-14. However, she is one of the purchasers who had invested in the above said immovable property. A letter was also generated through the ITD application which was issued to the appellant requiring him to give the requisite details of source of the transaction of investment. The appellant had not filed written submissions in response to the above letter. In this circumstance, the AO has a valid reason to believe that the investment on the above property is totally unexplained. This particular fact which is vital for the reopening of the assessment is not disputed by the appellant anywhere. The figures may not to be mismatching due to some reconciliation error in the segregation of investment ratio between the two purchasers. Hence I do not find any reasons to hold that reopening is invalid. Because of the peculiar facts and circumstances of the case which is elaborated above, the case laws relied by the assessee is also clearly distinguish on facts. Hence, the ground taken by the appellant to hold the reopening as invalid is here by dismissed. 6.3 On the above ground the appellant had also taken another issue by challenging the addition of Rs.11,73,850/- as unexplained investment. As seen from the assessment order for the above said property cash of Rs.20,47,000/- was paid which is an undisputed fact. Further expenses which were also incurred towards stamp duty and registration fees which is also made through cash. Hence the onus on the appellant to explain the source of cash that has been given towards the purchase of property. However in the written submissions filed during the appellate proceeding the appellant has not explained any source with respect to the cash, instead he had only given the sources of cheque payments . In any case the AO has not made any addition with respect to the cheque payments, the AO based on the reasons given by him is clearly doubted the cash transaction and asked the appellant to submit nature of source of the above cash transactions which was not compiled by the appellant. Since the appellant could not explain the source of cash which was utilized for the above investment, the addition made by the AO is appropriate and no interference is called for. The said addition of Rs.11,73,850/- to the total income of the appellant is hereby confirmed. In view of the above facts, the ground of appeal raised by the appeal raised by the appellant with respect to the unexplained investment u/s.69 of the Act is dismissed.
7. In the result, the appeal of the appellant is dismissed.”
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal.
I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record.
Ostensibly, the subject property viz. a residential plot admeasuring 3808 Sq. Ft. (out of Khasra Nos.4/3 & 4/4) situated at Ward No.42, Dr. Shyamprasad Nagar, Bilaspur had jointly been purchased by Smt. Radha Mishra (i.e. the assessee) and Smt. Jyoti Mishra for a total consideration of Rs.45,47,701/- [Rs.42,47,000/-(purchase consideration) (+) Rs.3,00,701/- (stamp duty/registration charges). As there is no mention in the purchase deed about the respective shares of the aforementioned co- owners/purchasers, therefore, as per Section 45 of the Transfer Act, 1982 it is to be presumed that the said persons had equal interest in the subject property. For the sake of clarity, Section 45 of the Transfer Act, 1982 is culled out as under:
“45. Joint transfer for consideration.- Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced. In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.” (emphasis supplied by me)
Based on the aforesaid factual position, the investment falling to the share of the assessee works out at Rs.22,73,850/-(half of Rs.45,47,701/-). At this stage, I may herein observe that the A.O as regards the balance amount of investment, for which, no explanation was forthcoming had wrongly made addition of the same in the hands of the assessee. I, say so, for the reason that the A.O had lost sight of the fact that the total purchase consideration of the subject property aggregated to Rs.45,47,701/-, out of which, the assessee had come up with an explanation as regards her one-half share of investment to the extent of Rs.22 lacs.
Be that as it may, I am of a firm conviction that the share of investment of the assessee, i.e. a joint/co-owner in the subject property works out at one-half of the total purchase consideration of Rs.45,47,701/- i.e. 22,73,850/-. As the assessee had validly come forth with an explanation as regards the source of her investment to the extent of Rs.22 lacs, therefore, she could have been called upon to put forth an explanation as regards the source of the balance investment of Rs.73,850/- [Rs.22,73,850 (-) Rs.22,00,000/-]. In so far the balance source of investment i.e. Rs.73,850/- is concerned, I find substance in the claim of the Ld. AR that the same could safely be related to have been made out of cash in hand that would have been available with the assesse specifically when she had filed her return of income for the year under consideration disclosing income from dairy business.
Considering the aforesaid facts, I find no justification in the view taken by the lower authorities who had failed to appreciate the facts of the case in the right perspective and had made/sustained the addition u/s. 69 of the Act. Accordingly, the order of the CIT(Appeals) is set-aside and the addition of Rs.11,73,850/- is vacated.
Resultantly, the appeal filed by the assessee is allowed in terms of the aforesaid observations.