GOMESH DWIVEDI,PADRA vs. ITO-REWA, DISTRICT REWA (MP), REWA

2. For that in the facts and circumstances of the case, the Commissioner of Income Tax (A), NFAC-Delhi, erred in violating the principles of natural justice by not providing opportunity for virtual hearing and hence, the action of the Commissioner of Income -Tax (A), NFAC - DELHI was entirely unreasonable, uncalled for and bad in law.

3. That on the facts and in the circumstances of the case and in law, the learned A.O. as well as Commissioner of Income Tax (A), NFAC -DELHI erred in making addition of Rs. 9376630/-on account of un-explained investment, without appropriate reasons and justification, hence the same should be deleted.

4. Because the Commissioner of Income Tax (A), NFAC -DELHI has passed order without considering the facts & submission, hence same should be quashed.

5. The appellant craves leave to add/alter any of the grounds of appeal before or at the time of hearing.”

& 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi 3. Aggrieved with the said addition, the assessee went in appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee submitted, that the order under section 144 had been passed without considering the facts of the case. It was submitted that out of the payment of Rs.1,64,00,000/-, Sh. Dileep Kumar Rajwani had paid a sum of Rs.1,50,00,000/- through account payee cheques issued from Rewa Sidhi Gramin Bank where he had been maintaining the account no.8081959076 and the balance of Rs.14,00,000/- had been paid in cash by remaining co-owners. It was submitted that the assessee, Sh. Gomesh Dwivedi, had paid a sum of Rs.2,33,333/- in cash and his ownership of the land was therefore only 1.42%. Therefore, there was no reason to make an addition of Rs.23,42,857/- in his hands. Since the assessee had not made any compliance before the AO, he filed a petition under Rule 46A for submitting additional evidences which were the copies of the two purchase title deeds of the impugned agricultural lands and the copy of bank account of Sh. Dileep Kumar Rajwani at Rewa Sidhi Gramin Bank. He also asked for permission to file a copy of his bank account for the assessment year 2011-12, to demonstrate that he had only paid Rs.2,33,333/- on account of the purchase of the above agricultural land. The assessee relied upon the judgment of K.Venkataramiah vs. A. Seetharama Reddy & Ors, AIR 1963 AIR 1526 (SC), to argue that as the order had been passed ex parte, there was sufficient cause to justify the admission of additional evidences. The ld. CIT(A) forwarded the additional evidences filed by the assessee to the AO for a remand report. In the remand report, the ld. AO submitted that the assessee had not made & 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi compliance during the course of assessment proceedings and therefore, the assessee’s claim for submission of additional evidences under Rule 46A should be rejected. The ld. AO submitted that it was evident from a perusal of the materials on record that all seven purchasers / partners had equal shares / ownership on both the purchased properties and for the first time the assessee was submitting that he only enjoyed 1.42% rights on the property because he had only paid 1.42% of the entire purchase consideration. Therefore, he pointed out that the claim was nothing but an afterthought and moreover the cash withdrawn from the bank account, was withdrawn long after the purchase of the said properties. Furthermore, he pointed out that the assessee had only disclosed income of Rs.1,23,600/- for A.Y. 2011-12, Rs. 1,79,040/- for A.Y. 2012-13 and Rs.4,99,670/- for A.Y. 2013-14 and thus the income shown by the assessee was not commensurate to the bank account submitted by him, where almost Rs.27,00,000/- worth of deposits were noted. The ld. AO also pointed out that the assessee and Sh. Dileep Kumar Rajwani had received large amounts of cash in their bank accounts and had not furnished the source of these credits, in his bank account. The ld. CIT(A) found the logic of the AO for rejection of the additional evidence as prima facie acceptable, but in the interest of natural justice, he decided to forward a copy of the remand report to the assessee for his comments. However, the assessee did not furnish the rejoinder to the remand report, therefore, the ld. CIT(A) decided to proceed with the matter on the basis of materials on record and held that the sale deed obtained by the AO clearly revealed that each person had equal share & 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi in the property; the bank account of Sh. Dileep Kumar Rajwani was used for the purchase and that the submission against equal ownership was against the facts that were recorded in the registered sale deed. Furthermore, Sh. Dileep Kumar Rajwani had never filed any income tax returns in the past hence the ld. AO was correct in holding that the assessee had an afterthought in saying that he only had 1.42% of the rights in the property. Therefore, the ld. CIT(A) thought it fit to dismiss the appeals of the assessee.

5. Aggrieved with the said addition, the assessee went in appeal to the ld. CIT(A). Before the ld. CIT(A), it was submitted that the assessee only enjoyed a 1.42% interest in the said property on account of the facts that he had only invested Rs. 2,33,333/- out of the total purchase consideration of Rs. 1,64,00,000/- and, in fact, the amount of Rs.1,50,00,000/- in this purchase had been invested by Sh. Dileep Kumar Rajwani by account payee cheques from his account at Rewa Sidhi Gramin Bank. It was submitted that the assessee was not an equal partner in the said lands and therefore, could not be assessed to tax on a 1/7th share of the sale proceeds. Since the assessment had been completed under section 144, the assessee filed an application for submission of additional evidences under Rule 46A of the Income Tax Rules, in which he sought to submit a copy of the ITR, a copy of the two purchase deeds, copy of the sales deeds and the copy of the bank account. The ld. CIT(A) forwarded these additional evidences to the AO and called for a remand report. The AO submitted that since the assessee had been given ample opportunity during the course of assessment proceedings to file the details, there was no justification for accepting the additional evidences at this stage. On the merits of the matter, the ld. AO noted that, contrary to his submission made for the assessment year 2012-13, in this assessment year, the assessee had shown the cost of acquisition of his part of the land at Rs.7,76,251/- in the computation of income furnished by him. He had also & 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi claimed land development expenses of Rs.16,51,710/-, the details of which were unknown and without documentary evidences. Thus there was no basis to the assessee’s claim that he had invested only 1.4% of the entire purchase cost and received only 4.2% (i.e. Rs. 27,00,000/-) of the entire sales consideration of Rs.6,40,33,000/-. The ld. AO pointed out that the claim of the assessee did not seem to be genuine because the purchase deed dated 23.12.2011 showed that all the seven purchasers had equal ownership of the land and therefore, his plea was nothing but an afterthought to distort the facts. Looking at the bank account of the assessee, the AO pointed out that many of the credits in the said bank account were unexplained from the returns filed by the assessee in this year and in the previous years. It was also pointed out that Sh. Dileep Kumar Rajwani, who is stated to have paid Rs.1.5 Crores out of the total purchase cost of Rs.1.64 Crores, had never filed a return of income in the past. Thus, the genuineness of transaction could not be accepted. Furthermore, Sh. Dileep Kumar Rajwani had received huge amount in cash into his bank accounts prior to the issue of cheques. Thus, there was no reason to accept the submission of the assessee. The ld. CIT(A) was of the opinion that prima facie the submissions of the Assessing Officer seem to be correct but he forwarded the same to the assessee to make a rejoinder. The assessee did not avail of this opportunity to give a rejoinder and therefore, the ld. CIT(A) decided to proceed on the basis of the materials on record. He pointed out that the details had already been discussed by him in the appeal order for the A.Y. 2012-13. On the specific issues relating to this & 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi appeal, he pointed out that the assessee had submitted LTCG claim calculations before the AO and claimed land development expenditure of Rs.16,15,710/- for which no evidence had been submitted; the fact of investment of only 1.41% had already been disproved during the assessment proceedings for the A.Y. 2012-13; Sh. Dileep Kumar Rajwani was a benami purchaser who had been used for the purchase and sale of some of the properties; the purchase and sale deeds indicated that the assessee enjoyed an equal share in the properties; the AO had critically examined the bank accounts of the assessee and recorded that the source of credit entries in his bank account were not explained; that Sh. Dileep Kumar Rajwani had never filed a return of income hence shifting the onus upon him was not acceptable and the assessee had not responded to the remand report. In view of all these factors, the ld. CIT(A) dismissed the appeal of the assessee in A.Y. 2013-14 also.

& 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi 8. We have duly considered the facts and circumstances of the case. We noticed that the fact of payment of Rs.1.5Crores through the account of Sh. Dileep Kumar Rajwani has not been disputed at any stage. However, the explanation of Sh. Dileep Kumar Rajwani has never been sought to explain the sources of the income that he used for the purchase of the property or the extent of profits that he enjoyed upon the sale of the property. Rather it has been assumed that the account of Sh. Dileep Kumar Rajwani was used as a benami account for making the payments by various assesses, on the strength of the fact that the sale deed does not indicate the shares of the respective parties and that large cash deposits have been made into the account of Sh. Dileep Kumar Rajwani, before the payment of the amounts made for the purchase of the land. It is also observed that the ld. CIT(A) and the ld. AO have pointed out, that Sh. Dileep Kumar Rajwani was not a regular taxpayer. Therefore, we are unable to understand, as to how the ld. AO and ld. CIT(A) could proceed against the assessee without first confronting these facts to Sh. Dileep Kumar Rajwani and recording his explanation on the matter. The payments having emanated out of the account of Sh. Dileep Kumar Rajwani, it is he who must explain the sources of such payments and his share in the property and also the share of the profits on the sale of the property. Further, it is, Sh. Dileep Kumar Rajwani who may explain as to why he had not filed returns despite having purportedly made an investment of Rs. 1.5 Crores and earned capital gains on his share of those properties. Without disproving the credentials of Sh. Dileep Kumar Rajwani, the addition against the assessee is not & 16/JAB/2024 A.Ys. 2012-13 & 2013-14 Gomesh Dwivedi possible. Therefore, in the interest of justice to both parties, we restore these matters to the file of the ld. AO so that he may make further enquiries from Sh. Dileep Kumar Rajwani, in order to determine the source of the consideration for the purchase of the land and the extent of profits earned by him and the assessee on the sale of the land. As all matters stand restored to the file of the ld. AO for de novo consideration, both the appeals are held to be allowed for statistical purposes.

& 16/JAB/2024 are held to be allowed for statistical purposes.

Order pronounced in the Open Court on 19/09/2025.