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Facts
The assessee filed an appeal against the reassessment order for AY 2011-12. The Assessing Officer made an addition of ₹35 lacs for the purchase of an immovable property and ₹3 lacs for credit card payments, treating them as unexplained income. The assessee claimed the property was purchased with a loan and credit card payments were out of accounted income.
Held
The Tribunal found that while the assessee did not initially provide all details, they later submitted a loan statement and explained the credit card payments. The CIT(A) erred in not considering this evidence. The Tribunal decided to restore the matter back to the Assessing Officer for a fresh decision.
Key Issues
Whether the CIT(A) was justified in not admitting additional evidence and confirming the additions made by the Assessing Officer without a proper application of Rule 46A.
Sections Cited
143(3), 147, 68, 69, 234A, 148, 142(1), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI SUNIL KUMAR SINGH, JM Shri Bhavya Sandesha, AR
Mr. Dinesh Bhoja Shetty (assessee / appellant) for the Assessment Year 2011-12, against the order of the learned CIT (A) dated 6th December, 2023, wherein the appeal filed by the assessee against the reassessment order passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) dated 27th December, 2018, passed by the ACIT 29(1), Mumbai (the learned Assessing Officer), was dismissed.
“The Appellant appeals against the impugned order dated 6 December, 2023 passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) under section 250 of the Income-tax Act (the Act) received by the Appellant on 6th December, 2023 on the following amongst other grounds each of which is in the alternative and without prejudice to any others:
1) The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 35,00,000/- being cost of new house purchased as undisclosed income.
2) The learned Commissioner of Income Tax (Appeals) erred in improving on assessment order by changing the section of addition from Section 68 to Section 69.
3) The learned Commissioner of Income Tax (Appeals) erred in not admitting the additional evidence during the course of appellate proceedings.
4) The learned Commissioner of Income Tax (Appeals) ought to have considered that the Appellant has taken loan of Rs. 18 lakhs from Karnataka Bank Ltd. for purchase of this house property.
The learned Assessing Officer found that assessee has purchased an immovable property at ₹35 lacs whereas the market value of the same is ₹39,51,000/-. The assessee was asked to explain the source of funds for purchase of the above property. The assessee did not comply and did not submit any information. Therefore, the learned Assessing Officer made an addition of ₹35 lacs. Similarly, it was found that assessee has paid payment for credit card of ₹3 lacs. The assessee was asked to furnish the details, the assessee was asked to submit the copy of the bank statement and the details of the credit card and the same were not submitted. Therefore, the addition of ₹3 lacs was made. 05. Accordingly, assessment order under Section 143(3) read with section 147 of the Act was passed on 27th December, 2018, determining the total income of the assessee at ₹63,52,400/-. 06. Aggrieved, assessee preferred the appeal before the learned CIT (A). Before the learned CIT (A) assessee made a written submission which was reproduced on paragraph no.5.2 of the appellate order. The assessee submitted that
The assessee aggrieved with the same is in appeal before us. The learned Authorized Representative submitted that assessee is a salaried person and is also having business of software and hardware supplier. The credit card payments of ₹3 lacs is out of his return income of ₹25,52,400/- and further, property purchased of ₹35 lacs is out of loan taken from Karnataka Bank Ltd. The learned CIT (A) has rejected this evidence merely because in Form no. 35 at column no.12 the assessee mentioned “no”. He submitted that if these additional evidences are considered, additions deserves to be deleted.
The learned Departmental Representative submitted that assessee did not make any application for admission of
We have carefully considered the rival contentions and perused the orders of the learned lower authorities. The addition of ₹35 lacs made for purchase of the property was made by the learned Assessing Officer for the reason that assessee could not submit relevant details before him. The assessee also could not submit the evidences of payment of ₹3 lacs for the credit card. The reason given by the assessee is that as the reassessment proceedings were carried out in 2018 assessee was not in possession of those details because of passage of time. We find that it is correct that at Serial no.12 in Form no.35, the assessee has mentioned that he does not want to file any additional evidences. It is also true that assessee has not made any application for additional evidences under Rule 46A of the Income-tax Rules. Despite that, we find that before the learned CIT (A), the assessee submitted a loan statement of Karnataka bank to explain the source of purchase of property of ₹35 lacs. Further, for the credit card payment of ₹3 lacs, the assessee has adequate declared income of ₹25,52,400/-. If the assessee has not filed any application for additional evidences, the learned CIT (A) should have asked the assessee that in absence of application for additional evidence it would not be possible for him to admit these evidences and assessee should have been asked to file necessary application in accordance with law. If in spite of that assessee does not file the same , perhaps no fault can be found with his
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 25.07.2024.