PRAVIN HARCHANDRAI AGARWAL (HUF),BHIWANDI vs. INCOME TAX WARD 1(1), KALYAN

O R D E R

Per : Narender Kumar Choudhry, Judicial Member:

2. In the instant case, the Assessee along with his uncle had purchased a flat in ISCON Platinum, Ahmedabad on a consideration of Rs. 59,30,000/- through cheques. Subsequently, search under Section 132 of the Act was conducted by the Investigation Wing, in the case of JP ISCON Shri Sanjay Haresh Mulchandani Group and related Assessee, wherein certain incriminating documents /evidences were seized in respect of ‘On Money’ received from various customers, qua projects developed by JP ISCON Pvt. Ltd. and its group concerns. During such proceedings, the statement of Smt. Kalindi Shah, Sales Manager, who was working under Mr. Jatin Gupta, Director of J.P. ISCON Pvt. Ltd. was recorded, wherein she stated that there ‘on money’ was involved, in the flat bookings and the same was used to be decided by Mr. Jatin Gupta and she was instructed to maintain record qua amounts received for parties.

3. Thus, the AO on the said reasons, reopened the case of the Assessee under Section 147 read with Section 148 of the Act and ultimately, made the addition of Rs. 17,64,500/- being 50% of the amount of total on money Rs.35,29,000/- as alleged, as the Assessee had jointly purchased the property with his uncle.

3.The brief facts of the case are that the assessee is an individual who filed his return of income for the A.Y. 2013-14 on 24.09.2013 showing total income of Rs.3266840/-. The return was processed under Section 143(1). The case was reopened under Section 147 vide notice under Section 148 dated 31.03.2019 against which return was filed by the assessee on 30.04.2019 declaring total income of Rs.32,66,840/- as shown in the original return of income. The assessee asked for reasons of reopening against which the Ld. AO vide letter dated 30.05.2019 furnished copy of reasons of reopening to the assessee. The reasons stated that information was received from ACIT, Central Circle-2(4), Ahmedabad along with statement recorded on oath of Ms. Kalindi Shah, Sales Manager in JP Iskon Ltd with respect to search conducted under Section 132 of the Act. Upon perusal of information, it is observed that incriminating documents /materials, evidences were seized in respect of on-money received from various customers of the projects developed by J.P. Iskon for booking/purchase of units in Iskon Platinum bearing details of date of booking, with amount as per "plan" 1 being cheques of Rs.4585350/-received from the assessee and amount as per plan 2 being cash of Rs. 1965150/- received from the assessee by JP Iskon group, and a mention that booking is by Girish Dani. The Ld. AO analyzed the data and came to the conclusion that assessee has paid cheque payment of Rs. 45,85,350/- and cash payment of Rs. 19,65,150/- for purchase of property with Iskon Group. The assessee filed objection vide letter dated 12.7.2019 with the Ld. AO with multiple points supported by judicial judgments regarding wrongful belief of the Ld. AO by placing reliance on such loose evidence. The assessee submitted that the crucial link between information made available to the AO and the formation of the belief is absent. It was submitted by the assessee that there is no information or documentary evidence that assessee has paid money for purpose of booking the flat. Neither is there any allotment letter or receipt in the name of the assessee nor the name of the assessee was found in the reproduction of the document found in the search. However, the Ld. AO proceeded to make made addition of Rs. 19,65,150/- as unexplained investment under Section 69 of the Act. While making the addition, the Ld. Assessing Officer made the following observations:

"In response to above notices, the assessee submitted the ledger account of JP Iscon Ltd. in the books of New Freezland Proprietary concern of assessee for the period from 01/04/2014 to 31/03/2015. The assessee's contention that he has given loan of Rs. 1890815/- to JP Iscon as per copy of ledger submitted, is not acceptable. As per the information received from ACIT Central Circle 2(4), Ahmedabad, the assessee had booked a flat H-1002 in the Iscon Platinum Scheme and paid Rx. 1965150/- in cash and Rs. 4585350/- by cheque. As per Platinum final Booking chart 28-03-2015(revision-1) The assessee had booked a flat the details available on 18/04/2012 which is also authenticated as per Schedule-E of the balance sheet as on 31/03/2013. Since the assessee has made cash payment of Rs 19,65,150/- for the purchase of property at Iscon Platinum, the source of the same has remain explained. Moreover, the assessee has not given any explanation to the notice issued ws. 142(1) of the Act dated 02.12.2019 accept to file the ledger account of JP Iscon Ltd. (Flat) in his books of account. Since it has been established beyond doubt that I RI Iscon is indulged in receiving on money from customer along with the cheque amount, the amount of Rs. 1965150/- shown under plan-2 in the books of JP Iscon represents the cash quantum paid by the assessee. In absence of any corroborative evidence submitted by the assessee, the cash payment of Rs.1965150/- is treated as unexplained investment of the assessee and added to the total income u/s. 69 of the Act. Penalty proceedings u/s. 271(1)(C) of the Act are initiated separately for concealment of Income. (Addition: Rs.19,65,150/-) 4. Aggrieved by the said assessment order, the assessee filed appeal with Ld. CIT(Appeals). The Ld. CIT(Appeals) dismissed the appeal of the assessee with the following observations:

"5.3 Ground Nos. 1. 3. 4 and 7 pertains to addition of Rs119,65,150/- made by the AD on account of on money paid by the appellant to M/s. JP Iscon for booking of a flat H-1002 1 was argued by the appellant before the AO that the amount was paid towards loan to M/s Iscon. However, the appellant has not given any explanation to the notice issued u/s 142(11 of the act dated 2.12.2019 except to file the ledger account of IP Ixcon Ltd. in his books of accounts. In the submissions, the appellant had argued and objected for the reopening of the assessment only. He neither argued on merits nor filed any information called for. In the absence of any details, the contention of the appellant cannot be acceptable. In view of the above. I do not find any reason to interfere in the order passed by the assessing Officer and hence, the ground No. 1, 3 and 4 are dismissed.

5. Before us, the Counsel for the assessee submitted that the contention of the assessing officer that assessee had advanced/paid cash for booking/purchase of a unit in Iskon Platinum and had paid cash amounting to Rs.19.65 lakhs is absolutely without any basis and corroborative evidences. The Counsel for the assessee firstly submitted that in the reasons recorded for reopening the case of the assessee, the name of the assessee is nowhere appearing in the data on the basis of which the case of the assessee has been reopened. It was submitted before us that name of the assessee is not appearing in any of the data and there is no concrete information on the basis of which the aforesaid additions have been made/sustained in the hands of the assessee. The Counsel for the assessee drew our attention to Pages 55-57 of the Paper Book containing the reasons for reopening the case of the assessee under Section 147 of the Act and submitted that in the aforesaid reasons, the name of the assessee does not find any mention at all. The Counsel for the assessee submitted that in the so-called reasons for reopening the assessment, there is no document whatsoever mentioning the name of the assessee and further, no document has been found in the handwriting of the assessee. Further, the Counsel for the assessee submitted that no details or material or documents were provided to the assessee to corroborate the allegation of any such cash having being paid by the assessee. Further, the assessing officer has also not brought on record any allotment letter given to the assessee or any other documentary evidence confirming such booking. Further and more importantly, the Counsel for the assessee submitted that the entire amount which had been advanced to J P Iskon group by cheque had been received back by the assessee, as per letter submitted by the assessee during the course of assessment proceedings. Further, the fact of return of the amount so advanced to JP Iskon group to the assessee has also not been disputed by the Department. Therefore, in sum and substance, since the name of the assessee was not appearing in any of the documents on the basis of which the case of the assessee was reopened, there is no handwritten note by the assessee in any of the documents seized, there is no allotment letter in the name of the assessee to show that the assessee had advanced money for purchase of any flat in JP Iskon group, the fact that the amount which was given as loan/advance to J P Iskon group by way of cheque was returned back to the assessee has not been disputed, all substantiate that the additions have been made/sustained in the hands of the assessee without any basis/corroborative evidence.

6. In response, Ld. DR placed reliance on the observations made by assessing Officer and Ld. CIT(Appeals), in their respective orders.

4. Learned Counsel for the petitioner could not successfully demolish the facts, which are recorded concurrently by the CITA and ITAT 5 No question of law much less any substantial question of law arises to entertain this appeal. The same is accordingly, dismissed." Accordingly, looking into the instant facts and the observations made by Hon'ble Gujarat High Court, as reproduced above, we are of the considered view that the Ld. CIT(Appeals) erred in sustaining the aforesaid additions made in the hands of the assessee.

8. Accordingly, looking into the instant facts and the observations made by Hon’ble Gujarat High Court, as reproduced above, we are of the considered view that the Ld. CIT(Appeals) erred in sustaining the aforesaid additions made in the hands of the assessee.

9. In the result, Assessee’s appeal is allowed.

Order pronounced in the open Court on 30.12.2025.