MR ATAUR RAHMAN,KOLKATA vs. THE ITO, WD-54(4), KOLKATA, KOLKATA

O R D E R

Per Dr. Arjun Lal Saini, AM:

raised by the assessee reads as follows: “1.That the Learned Commissioner of Income Tax(Appeals) has unjustifiably confirmed the addition of Rs.15,21,500/- made by Assessing Officer treating the said amount as unexplained cash of the appellant from undisclosed sources.

2. That the Learned Commissioner of Income Tax(Appeals) has erred in not considering lessee deed of the property and considering the income under the head capital gain and business income.

3. That the appellate order as passed in against facts and is bad in law.”

Mr. Ataur Rahman Assessment Year: 2009-10 3. The brief facts apropos these grounds are that assessee filed its return of income on 23.06.2009 declaring a total income of Rs.1,27,681/-. The assessee’s return of income was processed u/s 143(1) of the Act, on 07.06.2010. Later, the assessee’s case was selected for scrutiny u/s 143(2) of the Act and the AO completed assessment u/s 143(3) by making addition u/s 69A on account of unexplained money of Rs.15,21,500/-. During the assessment proceedings, it was found from the AIR information that during the F.Y 2008-09, there was a cash deposit of Rs.15,21,500/- in the Saving Bank account of the assessee, maintained with the ICICI bank. From the copy of the bank statement filed by the assessee, during the course of assessment proceedings, it was found that the sum of Rs.15,21,500/- had been deposited in cash on different dates. The assessee was asked to explain the source of cash deposit of Rs.15,21,500/-. In response to that, the assessee explained to the AO that the deposit of Rs.15,21,500/- was out of sale proceeds of his residential flat at 34A, Momonpur Road, Kolkata – 700 027 to Mr Asgar Ali Warsi Babu for a consideration of Rs.14,00,000/-. This flat was purchased by the assessee from the developer four years back for a consideration of Rs.10,75,000/- and he paid the amount in cash in instalments. The assessee submitted that cash in saving bank account was deposited, out of the sale proceeds of Rs.14,00,000/- which he received in cash in instalments from the buyer of his flat. However, the assessee was asked to submit the copy of the sale deed of the flat as the document in support of his claim. The assessee was also asked to submit the copy of the deed of purchase of the property by him. During the assessment proceedings, the assessee submitted only a copy of money receipts but he could not submit any of the deeds i.e. Sale deed and purchase deed etc. The assessee explained to the AO that he had only the possession right of the property. The assessee never registered the flat in his name. However, the assessee submitted that no purchase deed was made. Similarly, on sale, he also transferred the possession right of the property to its buyer. No deed was made this time also. However, the AO asked the assessee to produce the copy of agreement to sale of that property. During the Page | 2 Mr. Ataur Rahman Assessment Year: 2009-10 assessment proceedings, the AO also sent a notice u/s 133(6) to Mr. Asgar Ali Warsi Babu, the buyer of the flat for confirmation of the transaction but no reply was received by the AO from Mr. Ali Babu. Therefore, the AO held that the assessee could not substantiate the fact and his claim and therefore, he made the addition u/s 69A as an unexplained money at Rs.15,21,500/- 4. Aggrieved by the order of the AO, the assessee filed an appeal before the ld. CIT(A) who has confirmed the addition made by the AO. Before the ld. CIT(A), the assessee produced a photocopy of a lease deed, a copy of hand-made memo receipt. The ld. CIT(A) also observed that Mr. Asgar Ali Babu, the buyer of the flat had also not confirmed the transaction and did not response to the notice u/s 133(6) of the Act. Before the ld. CIT(A), the assessee also submitted that at the time of filing return of income, the assessee was in serious mental trauma due to the death of his minor son. Therefore, he has forgot to disclose his capital gains. The ld. CIT(A) observed that assessee has appeared several occasions before the AO but he has not produced any documents or explanation to substantiate his claim. Therefore, the ld. CIT(A) held that since the assessee has not explained the source of cash deposit in the said bank account and hence confirmed the addition made by the AO.