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Facts
The assessee purchased a flat and was asked to explain why the on-money payment of ₹.82,13,261/- should not be treated as unexplained investment. The assessee denied making such payments, but the Assessing Officer added the amount based on the statement of Shri Sandeep Runwal, Director of Runwal Group, who admitted receiving on-money payments.
Held
The Tribunal held that the allegation of the assessee not being allowed cross-examination of Shri Sandeep Runwal was baseless as the assessee never requested it. The Tribunal found that the statement of Shri Sandeep Runwal, detailing cash received on sale of flats, specifically listed the assessee's transaction for Flat No. 501 at Runwal Elegante with a cash receipt of ₹.82,13,261/-, which was not an estimate.
Key Issues
Whether the on-money payment for the purchase of a flat can be treated as unexplained investment under section 69 of the Income Tax Act, 1961.
Sections Cited
69, 132, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HONBLE & SHRI SANDEEP SINGH KARHAIL, HONBLEDr. SS Rao Marg, Parel Shri Sumit Mantri Shri Manoj Kumar Sinha
O R D E R PER NARENDRA KUMAR BILLAIYA (AM)
This appeal by the assessee is preferred against the order dated 21.12.2023 by National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] pertaining to A.Y.2015-16. (A.Y: 2015-16) Ali Akbar Sami Choudhari 2. The grievance of the assessee read as under: - “1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (appeal) erred in confirming the addition of Rs.82,13,261/- u/s. 69 of the income Tax Act, 1961 as unexplained investments without appreciating the facts and circumstances of the case and position of law.
On the facts and circumstances of the case, the learned Commissioner of Income Tax (appeal) failed to appreciate that the Learned Assessing Officer has not allowed the opportunity of cross examination to the Appellant before framing the said addition.”
Briefly stated the facts of the case are that the, assessee filed his return of income on 01.10.2015 declaring a total income of ₹.29,29,980/-. The return was processed under section 143(1) of Income-tax Act, 1961 (in short “Act”) and subsequently selected for scrutiny under CASS and accordingly, statutory notices were issued and served upon the assessee.
During the course of the scrutiny assessment proceedings the Assessing Officer was seized with the information received from the Investigation Wing, Mumbai that during the search and seizure action under section 132 of the Act in the case of Runwal Group, statement of Shri Sandeep Runwal, Director was recorded in which he admitted that his group has been receiving on-money on the properties sold by it. Taking a leaf out of the statement of Shri Sandeep Runwal, the assessee
Page No. 2 (A.Y: 2015-16) Ali Akbar Sami Choudhari was asked to show cause why the same on-money paid over and above the transactions valued amounting to ₹.82,13,261/- for purchasing of flat at Runwal Elegante be not treated as unexplained investment under section 69 of the Act.
In his reply the assessee denied of having made such on-money payments. This contention of the assessee was dismissed by the Assessing Officer who was of the firm belief that since Shri Sandeep Runwal has accepted of having received the on-money the assessee has invested and went on the make the addition of ₹.82,13,261/-.
The assessee agitated the matter before Ld. CIT(A) but without any success.
Before us, the counsel for the assessee vehemently stated that the assessee has purchased the property being Flat No. 501 at Runwal Elegante but has not paid any on-money in cash for the purchase of said flat. It is the say of the counsel that the builder M/s. Runwal Projects Pvt Ltd., has confirmed the transaction. In support the counsel relied upon various judicial decisions of the Coordinate Benches wherein transactions with Runwal Group has been considered by this Tribunal.
Page No. 3 (A.Y: 2015-16) Ali Akbar Sami Choudhari 8. Per contra, Ld. DR strongly supported the findings of the Assessing Officer and the Ld. CIT(A) and read the operative part.
We have given a thoughtful consideration to the orders of the authorities below and have also considered the statement of Shri Sandeep Runwal. At the very outset, we have to state that the allegation that cross-examination of Shri Sandeep Runwal was never allowed to the assessee is baseless in as much as when the Assessing Officer confronted the statement of Shri Sandeep Runwal to the assessee during the course of the assessment proceedings the assessee never asked for any cross-examination.
In the statement of Shri Sandeep Runwal the list is attached wherein Shri Sandeep Runwal has given the details of cash received on sale of flats at various projects of the Runwal Group with names of the customers and the exact amount. The name of the assessee is at Sl.No.21 for the Flat No. 501 at Runwal Elegante which shows the cash receipt by Runwal Group of ₹.82,13,261/-. The contention of the counsel that it is merely an estimation defies all commercial logic because an estimated figure is always a complete figure. But the figure mentioned hereinabove is so accurate that it cannot considered as an Page No. 4 (A.Y: 2015-16) Ali Akbar Sami Choudhari estimated figure. Most important fact is that the recipient i.e., seller has admitted of having received a cash component of the transaction. Therefore, it is reasonable to conclude that the payee must have made the said payment. The undisputed fact is that the assessee has in fact purchased the flat from Runwal Group. When the purchase is not in dispute, the payment is not dispute then in all probability the cash component is also correct. The seller has admitted of having received on-money which is the income of the seller and no prudent business man would offer income which it has never earned / received. The decision of the Coordinate Benches are misplaced in as much as each case has to be decided on the facts of its own and since in the case in hand the income has been assessed in the hands of the seller applying the principles of preponderance of probability on the facts of the case in hand, we do not find any reason to interfere with the findings of the Ld.CIT(A).
In the result, appeal filed by the assessee is dismissed.