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Facts
The assessee filed a return of income which was selected for scrutiny. The Assessing Officer (AO) made additions for cash deposits and property purchase, citing lack of compliance and details from AIR/CIB information. The assessee's appeals to the CIT(A) were partly dismissed, leading to the present appeal before the Tribunal.
Held
The Tribunal noted that the CIT(A) had not considered additional evidence. For the cash deposit addition, the matter was restored to the CIT(A) for considering the evidence. For the property addition, the CIT(A)'s finding was set aside as it was not in accordance with law, and the issue was restored to the CIT(A) for fresh verification and decision.
Key Issues
Whether the CIT(A) erred in not considering additional evidence and whether additions for cash deposits and property purchase were justified, especially considering the property was allegedly purchased by a partnership firm.
Sections Cited
144, 143(2), 142(1), 271(1)(b), 251, 250(4), 14, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal by the assessee is directed against order dated 28.02.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds:
1. In the facts and circumstances of the case and in law, the learned A.O. erred in passing ex-part orders 144 on the basis of AIR/CIB information
Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde not pertaining to the appellant and therefore rendering hall assessment not pertaining to the appellant and therefore rendering hall assessment not pertaining to the appellant and therefore rendering hall assessment bad in law.
2. In the facts and circumst 2. In the facts and circumstances of the case and in law, the learned A.O. ances of the case and in law, the learned A.O. erred in adding Rs.11.55.000/ erred in adding Rs.11.55.000/- on account of cash deposited in bank on account of cash deposited in bank account for want of details which were submitted during remand account for want of details which were submitted during remand account for want of details which were submitted during remand proceedings 3. In the facts and circumstances of the case and in law, the lear In the facts and circumstances of the case and in law, the learned A.O. In the facts and circumstances of the case and in law, the lear erred in adding Rs. 1.61,00,000/ erred in adding Rs. 1.61,00,000/- even though the property under even though the property under reference was purchased by M/s Shinde Construction in which the reference was purchased by M/s Shinde Construction in which the reference was purchased by M/s Shinde Construction in which the Appellant was only a partner.. Appellant was only a partner..
In the facts and circumstances of the case and in law, the learned A.O. In the facts and circumstances of the case and in law, the learned A.O. In the facts and circumstances of the case and in law, the learned A.O. erred in levying interest u/s 234 &initiating penalty u/s 271[1][c]. ying interest u/s 234 &initiating penalty u/s 271[1][c]. ying interest u/s 234 &initiating penalty u/s 271[1][c].
5. In the facts and circumstances of the case and in law, the CIT[A] NFAC 5. In the facts and circumstances of the case and in law, the CIT[A] NFAC 5. In the facts and circumstances of the case and in law, the CIT[A] NFAC erred in passing order without obtaining remand report u/r 46A and erred in passing order without obtaining remand report u/r 46A and erred in passing order without obtaining remand report u/r 46A and overlooking cash flow submitted overlooking cash flow submitted 2. At the outset, the Ld. At the outset, the Ld. counsel for the assessee submitted that counsel for the assessee submitted that the Ld. CIT(A) has not considered the additional evidences filed by the Ld. CIT(A) has not considered the additional evidence the Ld. CIT(A) has not considered the additional evidence the assessee and therefore, matter may be restored back to him for the assessee and therefore, matter may be restored back to him for the assessee and therefore, matter may be restored back to him for taking into consideration the additional evidence of the assessee taking into consideration the additional evidence of the assessee taking into consideration the additional evidence of the assessee and decide the issue in dispute afresh. issue in dispute afresh.
Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed return of income on 30.03.2018 declaring total income at return of income on 30.03.2018 declaring total income return of income on 30.03.2018 declaring total income Rs.6,50,000/-. The return of income filed by the assessee was . The return of income filed by the assessee was . The return of income filed by the assessee was selected for scrutiny and statutory notice r scrutiny and statutory notice u/s 143(2) of the Income 143(2) of the Income- tax Act, 1961 (in short ‘the Act’) dated 10.08.2019 was issued and tax Act, 1961 (in short ‘the Act’) dated 10.08.2019 tax Act, 1961 (in short ‘the Act’) dated 10.08.2019 served on the assessee within the stipulated time. However, no served on the assessee within the stipulated time. However, no served on the assessee within the stipulated time. However, no compliance was made on the part of the assessee. Subsequently, compliance was made on the part of the assessee. Subsequently, compliance was made on the part of the assessee. Subsequently, the Assessing Officer issued notice u/s 1 the Assessing Officer issued notice u/s 142(1) of t 42(1) of the Act dated 14.09.2018, however however same also remained non-complied. Thereafter, complied. Thereafter, the Assessing Officer issued penalty notice u/s 271(1)(b) of the Act the Assessing Officer issued penalty notice u/s 271(1)(b) of the Act the Assessing Officer issued penalty notice u/s 271(1)(b) of the Act
Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde dated 21.09.2018 ; 01.10.2018 ; 10.10.2018 and 25.10.2018 but ; 01.10.2018 ; 10.10.2018 and 25.10.2018 but ; 01.10.2018 ; 10.10.2018 and 25.10.2018 but same remain unattended same remain unattended. Thereafter, the Assessing Officer hereafter, the Assessing Officer issued a show cause notice u/s 144 of the Act proposing as why the ex-parte show cause notice u/s 144 of the Act proposing as why the ex show cause notice u/s 144 of the Act proposing as why the ex assessment might not be carried out in the case of the assessee. not be carried out in the case of the assessee. not be carried out in the case of the assessee. Same was also not complied by the assessee. The Assessing Officer not complied by the assessee. The Assessing Officer not complied by the assessee. The Assessing Officer was in possession of the information from the annual information n of the information from the annual information n of the information from the annual information return/CIB statement that assessee ,firstly, made cash deposit to return/CIB statement that assessee made cash deposit to s.11,55,000/- in Bank of India, Secondly Secondly, made the tune of Rs.11,55,000/ investment investment investment in in in purchase purchase purchase of of of the the the property property property amounting amounting amounting to to to Rs.1,61,00,000/-. In absence, . In absence, of any submission and non of any submission and non- compliance on the part of the assessee, the Assessing Officer made compliance on the part of the assessee, the Assessing Officer made compliance on the part of the assessee, the Assessing Officer made both the additions.
4. Before the Ld. CIT(A), the assessee though claimed to have Before the Ld. CIT(A), the assessee though claimed to have Before the Ld. CIT(A), the assessee though claimed to have filed cash book proving the cash deposit filed cash book proving the cash deposit , but no attachment was no attachment was enclosed, therefore, the Ld. CIT(A) sus efore, the Ld. CIT(A) sustained the disallowance of tained the disallowance of Rs.11,55,000/-. The relevant finding of the Ld. CIT(A) is reproduced . The relevant finding of the Ld. CIT(A) is reproduced . The relevant finding of the Ld. CIT(A) is reproduced as under:
6.2.2 During the course of appellate proceedings the appellant has not 6.2.2 During the course of appellate proceedings the appellant has not 6.2.2 During the course of appellate proceedings the appellant has not given any written submissions or explanation regardin given any written submissions or explanation regarding sources of cash g sources of cash deposits. The appellant in reply simply submitted that cash book for deposits. The appellant in reply simply submitted that cash book for deposits. The appellant in reply simply submitted that cash book for proving cash deposits is attached. However no attachment is made. Hence, proving cash deposits is attached. However no attachment is made. Hence, proving cash deposits is attached. However no attachment is made. Hence, the sources for the same remain to be unverified in absence of the sources for the same remain to be unverified in absence of the sources for the same remain to be unverified in absence of corroborative evidences. corroborative evidences.
Regarding the addition of Rs.1,61,00,000/ rding the addition of Rs.1,61,00,000/- before the Ld. CIT(A), CIT(A), CIT(A), the the the assessee assessee assessee submitted submitted submitted that that that property property property belonged belonged belonged to to to partnership firm of the assessee namely M/s Shinde Construction partnership firm of the assessee namely M/s Shinde Construction partnership firm of the assessee namely M/s Shinde Construction
Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde and source of the same is explain and source of the same is explained out of fund of firm of firm. The Ld. CIT(A) directed the Assessing Officer to verify whether the payment the Assessing Officer to verify whether the payment the Assessing Officer to verify whether the payment was made by the firm and whether same was recorded in the books was made by the firm and whether same was recorded in the books was made by the firm and whether same was recorded in the books of accounts of the firm. The relevant finding of the Ld. CIT(A) is of accounts of the firm. The relevant finding of the Ld. CIT(A) is of accounts of the firm. The relevant finding of the Ld. CIT(A) is reproduced as under: reproduced as under:
“6.3.3 I have considered the facts and written subm 6.3.3 I have considered the facts and written submissions of the appellant issions of the appellant as against the observations/ findings of the AO in assessment order. The as against the observations/ findings of the AO in assessment order. The as against the observations/ findings of the AO in assessment order. The assessment order is passed u/s 144. This means that the AO has not assessment order is passed u/s 144. This means that the AO has not assessment order is passed u/s 144. This means that the AO has not verified the relevant necessary documents. It is also true that the appellant verified the relevant necessary documents. It is also true that the appellant verified the relevant necessary documents. It is also true that the appellant has not compl has not complied to the notices issued during the course of scrutiny ied to the notices issued during the course of scrutiny proceedings. The appellant has strongly contended that the property does not belongto The appellant has strongly contended that the property does not belongto The appellant has strongly contended that the property does not belongto the appellant. It was also reiterated that the amount of Rs. 58,00,000/ the appellant. It was also reiterated that the amount of Rs. 58,00,000/ the appellant. It was also reiterated that the amount of Rs. 58,00,000/- Rs.45,00,000/- - & Rs.58,00,000/- is in respect of purchase of property pect of purchase of property made by a firm M/s Shinde Construction in which the appellant is a made by a firm M/s Shinde Construction in which the appellant is a made by a firm M/s Shinde Construction in which the appellant is a partner. It is also contended that the said purchases was partner. It is also contended that the said purchases was already shown by said M/s Shinde Construction in their books out of their bank by said M/s Shinde Construction in their books out of their bank by said M/s Shinde Construction in their books out of their bank statements (Copy of Ban statements (Copy of Bank statement, Balance sheet & ITR enclosed). k statement, Balance sheet & ITR enclosed). Hence, it was submitted that the said property belonged to M/s Shinde Hence, it was submitted that the said property belonged to M/s Shinde Hence, it was submitted that the said property belonged to M/s Shinde Construction and not to the Appellant who is only a partner in the firm. The Construction and not to the Appellant who is only a partner in the firm. The Construction and not to the Appellant who is only a partner in the firm. The appellant has attached the following documents. appellant has attached the following documents.
Computation of 1. Computation of total income.
Balance sheet, capital a/c 2. Balance sheet, capital a/c 3. Copy of agreement 3. Copy of agreement 4. Balance sheet, capital a/c Balance sheet, capital a/c 5. Copy of bank statement, balance sheet & ITR of firm 5. Copy of bank statement, balance sheet & ITR of firm In the course of assessment proceedings, Assessing Officer noted that a In the course of assessment proceedings, Assessing Officer noted that a In the course of assessment proceedings, Assessing Officer noted that a property was purchased by appellant as per the AIR/CIB details. In this property was purchased by appellant as per the AIR/CIB details. In this property was purchased by appellant as per the AIR/CIB details. In this regards, the appellant says that the property was purchased by M/s regards, the appellant says that the property was purchased by M/s regards, the appellant says that the property was purchased by M/s Shinde Construction. I am of the view that th Shinde Construction. I am of the view that the Assessee was not afforded e Assessee was not afforded proper and reasonable opportunity of putting forth its case before the AO. I proper and reasonable opportunity of putting forth its case before the AO. I proper and reasonable opportunity of putting forth its case before the AO. I am also of the view that the attachments filed before me as proofs are am also of the view that the attachments filed before me as proofs are am also of the view that the attachments filed before me as proofs are relevant evidence for rendering a proper decision on this issue involved in relevant evidence for rendering a proper decision on this issue involved in relevant evidence for rendering a proper decision on this issue involved in the appeal and are therefore required to be verified thoroughly by the appeal and are therefore required to be verified thoroughly by the appeal and are therefore required to be verified thoroughly by the Assessing Officer. Since the AO had not got the opportunity to examine the Assessing Officer. Since the AO had not got the opportunity to examine the Assessing Officer. Since the AO had not got the opportunity to examine the claim, of the Assessee, it is just and appropriate that the documents must claim, of the Assessee, it is just and appropriate that the documents must claim, of the Assessee, it is just and appropriate that the documents must be verified by the AO. The Assessee if be verified by the AO. The Assessee if possible may file the original copies possible may file the original copies or registered copies and such other evidence that may be required to prove or registered copies and such other evidence that may be required to prove or registered copies and such other evidence that may be required to prove
Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde its case before the AO. The AO will consider the proof admitted and its case before the AO. The AO will consider the proof admitted and its case before the AO. The AO will consider the proof admitted and thereafter decide the issue in accordance with law after affording the thereafter decide the issue in accordance with law after affording the thereafter decide the issue in accordance with law after affording the Assessee opportunity of being heard to submit the relevant documents ssee opportunity of being heard to submit the relevant documents ssee opportunity of being heard to submit the relevant documents After considering the totality of facts, the written submissions of appellant, After considering the totality of facts, the written submissions of appellant, After considering the totality of facts, the written submissions of appellant, the applicable law and on the basis of discussions mentioned above, I find the applicable law and on the basis of discussions mentioned above, I find the applicable law and on the basis of discussions mentioned above, I find merit in the argument of the appellan merit in the argument of the appellant and draw strength from the decision t and draw strength from the decision given by the Hon'ble ITAT, Pune in the case of I.T.O. vs. Amit Vijay given by the Hon'ble ITAT, Pune in the case of I.T.O. vs. Amit Vijay given by the Hon'ble ITAT, Pune in the case of I.T.O. vs. Amit Vijay Kulkarni Gandamla& Sons vACIT (101 ITD 368) Kulkarni ITA No.1597/PN/2013, Gandamla& Sons vACIT (101 ITD 368) Kulkarni ITA No.1597/PN/2013, Gandamla& Sons vACIT (101 ITD 368) and decision of ITAT Cochin in the case of Muthoot Bankers vs DC (11 SOT and decision of ITAT Cochin in the case of Muthoot Bankers vs DC (11 SOT and decision of ITAT Cochin in the case of Muthoot Bankers vs DC (11 SOT 603). However, as per provision of Section 14 of the Indian Partnership Act er, as per provision of Section 14 of the Indian Partnership Act er, as per provision of Section 14 of the Indian Partnership Act clearly provides that any property obtained by means of partnership, clearly provides that any property obtained by means of partnership, clearly provides that any property obtained by means of partnership, whether by way of purchase or by employment in the business, is the whether by way of purchase or by employment in the business, is the whether by way of purchase or by employment in the business, is the partnership property unless contrary is established. I partnership property unless contrary is established. In the case of the n the case of the appellantit is contended that the property does not belong to the assessee. appellantit is contended that the property does not belong to the assessee. appellantit is contended that the property does not belong to the assessee. The property is purchased by the partnership firmand payments were also The property is purchased by the partnership firmand payments were also The property is purchased by the partnership firmand payments were also made by the partnership firm. made by the partnership firm. Conclusion: The AO to verify whether payment was made by the Conclusion: The AO to verify whether payment was made by the Conclusion: The AO to verify whether payment was made by the firm? and was also recorded in the books of account of the firm? Also, in the present was also recorded in the books of account of the firm? Also, in the present was also recorded in the books of account of the firm? Also, in the present case, assessee denies having made any investment in the instant case, assessee denies having made any investment in the instant case, assessee denies having made any investment in the instant property. Hence, if there is no denying of fact regarding the source of investment in Hence, if there is no denying of fact regarding the source of investment in Hence, if there is no denying of fact regarding the source of investment in the property, which the property, which has come from the partnership firm and payment has come from the partnership firm and payment made by firm then no addition is warranted. Hence, the explanation given made by firm then no addition is warranted. Hence, the explanation given made by firm then no addition is warranted. Hence, the explanation given by the appellant appears to be reasonable however the relevant necessary by the appellant appears to be reasonable however the relevant necessary by the appellant appears to be reasonable however the relevant necessary proof must be verified by the AO. In view of the aforesaid dis proof must be verified by the AO. In view of the aforesaid dis proof must be verified by the AO. In view of the aforesaid discussion, I have came to the conclusion that nature of transaction stands explained have came to the conclusion that nature of transaction stands explained have came to the conclusion that nature of transaction stands explained subject to verification of relevant evidences which were not verified by the subject to verification of relevant evidences which were not verified by the subject to verification of relevant evidences which were not verified by the assessing officer. In result, this ground is allowed subject to my directions assessing officer. In result, this ground is allowed subject to my directions assessing officer. In result, this ground is allowed subject to my directions made above.”
We have heard rival submission of the parties and perused the have heard rival submission of the parties and perused the have heard rival submission of the parties and perused the relevant material on record. As far as the issue of addition of cash relevant material on record. As far as the issue of addition of cash relevant material on record. As far as the issue of addition of cash deposit of Rs.11,55,000/ deposit of Rs.11,55,000/- is concerned, the assessee has not filed is concerned, the assessee has not filed evidence in support of its claim before the Ld. CIT(A). Before us, the evidence in support of its claim before the Ld. CIT(A). Befo evidence in support of its claim before the Ld. CIT(A). Befo Ld. counsel for the assessee submitted that evidence filed by the Ld. counsel for the assessee submitted that evidence filed by the Ld. counsel for the assessee submitted that evidence filed by the assessee has not been considered by the Ld. CIT(A). The Ld. counsel assessee has not been considered by the Ld. CIT(A). The Ld. counsel assessee has not been considered by the Ld. CIT(A). The Ld. counsel for the assessee has given undertaking that evidence in support of for the assessee has given undertaking that evidence in support of for the assessee has given undertaking that evidence in support of source of the cash deposit of Rs.11,55,000/ source of the cash deposit of Rs.11,55,000/- shall be submitted shall be submitted before the lower authorities if the matter is restored back. Though before the lower authorities if the matter is restored back. Though before the lower authorities if the matter is restored back. Though
Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde the assessee remained ed non-complied before the AO however, complied before the AO however, in view of undertaking given Ld. counsel for the assessee given Ld. counsel for the assessee and and in respect of substantial justice, we restore th substantial justice, we restore the matter back to the file of the Ld. e matter back to the file of the Ld. CIT(A) for considering the additional evidence if any by the assessee CIT(A) for considering the additional evidence if any by the assessee CIT(A) for considering the additional evidence if any by the assessee in accordance with law including the Rule 46A of the Income-tax in accordance with law including the Rule 46A of the Income in accordance with law including the Rule 46A of the Income Rules, 1961 (in short ‘the Rules’). The ground No. 2 of the appeal of Rules, 1961 (in short ‘the Rules’). The ground No. 2 of the appeal of Rules, 1961 (in short ‘the Rules’). The ground No. 2 of the appeal of the assessee is accordingly allowed for statistical purposes. accordingly allowed for statistical purposes. accordingly allowed for statistical purposes.
As far as ground No. 3 of the appeal relating to addition of As far as ground No. 3 of the appeal relating to addition of As far as ground No. 3 of the appeal relating to addition of Rs.1,61,00,000/- is concerned. We find that the Ld. CIT(A) has is concerned. We find that the Ld. CIT(A) has is concerned. We find that the Ld. CIT(A) has directed the Assessing Officer for verification of the source in the directed the Assessing Officer for verification of the source in the directed the Assessing Officer for verification of the source in the hand of the fund. We are of the view that under the fund. We are of the view that under the provision of the section 251 of the Act the of the Act the Ld. CIT(A) is not authorized to restore the Ld. CIT(A) is not authorized to restore the matter to Assessing Officer matter to Assessing Officer. Under the provisions of section 250(4) . Under the provisions of section 250(4) of the Act, he may direct the AO to of the Act, he may direct the AO to carry out enquiry and re out enquiry and report the result of the same to him but he can’t restore the matter back to result of the same to him but he can’t restore the matter back to result of the same to him but he can’t restore the matter back to him. Therefore, finding of the Ld. CIT(A) on the issue in dispute herefore, finding of the Ld. CIT(A) on the issue in dispute herefore, finding of the Ld. CIT(A) on the issue in dispute being not in accordance with law, eing not in accordance with law, same is set aside. same is set aside. Since, the claim of the assessee that said property was purchased by the Firm claim of the assessee that said property was purcha claim of the assessee that said property was purcha M/s Shinde Construction needs verifi M/s Shinde Construction needs verification, therefore, we feel it therefore, we feel it appropriate to restore this issue appropriate to restore this issue also to the file of the Ld. CIT(A) to the file of the Ld. CIT(A) with the direction to the assessee to file necessary evidence in with the direction to the assessee to file necessary evidence in with the direction to the assessee to file necessary evidence in support of its claim. The Ld. CIT(A) if support of its claim. The Ld. CIT(A) if required may call for the required may call for the remand report following the provisions of Rule 46A of the Rules and remand report following the provisions of Rule 46A of the Rules and remand report following the provisions of Rule 46A of the Rules and then decide the issue in accordance with law. The ground No. 3 of then decide the issue in accordance with law. The ground No. 3 of then decide the issue in accordance with law. The ground No. 3 of Jayprakash Ramchandra Shinde Jayprakash Ramchandra Shinde the appeal of the assessee is accordingly allowed for statistical the appeal of the assessee is accordingly allowed for statistical the appeal of the assessee is accordingly allowed for statistical purposes. The ground Nos. 1, 4 purposes. The ground Nos. 1, 4 and 5 of the appeal and 5 of the appeal were not pressed by the assessee and therefore, same are dismissed as pressed by the assessee and therefore, same are dismissed as pressed by the assessee and therefore, same are dismissed as infructuous.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.