ITO, NEW DELHI vs. SHRI ABHAY KUMAR MISHRA, NEW DELHI

The Revenue has raised the following grounds of appeal :-

(i) Deleting the addition of Rs.1,81,11,875/- as rightly made by the AO on account of unexplained investments made in the immovable property.

The facts of the case are that as per information collected by the Revenue, the assessee has purchased the immovable property amounting to `1,81,11,875/- during the accounting year relevant to the assessment year 2008-09. During the course of assessment proceedings, the Assessing Officer asked the assessee to explain the source of such investment, in response to which, the assessee informed that all the above properties were purchased by M/s Hira Realtors Pvt.Ltd. and the assessee signed the sale deed only in his capacity as director of the said company. Thereafter, the Assessing Officer called for the information u/s 133(6) from M/s Hira Realtors Pvt.Ltd., in response to which, M/s Hira Realtors Pvt.Ltd. denied to have purchased any such property. Therefore, the Assessing Officer made the addition of `1,81,11,875/- in the hands of the assessee. On appeal, learned CIT(A) examined the sale deed and found that the sale deed was in the name of M/s Hira Realtors Pvt.Ltd. and assessee acted only as a director of the company. He also noted that there is dispute between the assessee and M/s Hira Realtors Pvt.Ltd. and FIR in this regard is registered with Dabri Police Station. Considering these facts, learned CIT(A) deleted the addition but, at the same time, he directed the Assessing Officer to pass on the information to the Assessing Officer of M/s Hira Realtors Pvt.Ltd. so that appropriate action can be taken in the case of the company. The Revenue, aggrieved with the deletion of the addition, is in appeal before us.

We have heard the arguments of both the sides and have perused the material placed before us. At the time of hearing before us, learned counsel for the assessee has stated that there was dispute between the assessee and M/s Hira Realtors Pvt.Ltd. and not only the FIR was registered but other criminal cases were also filed by the 3 ITA-38/Del/2013 parties against each other. That finally, a settlement has been arrived at between M/s Hira Realtors Pvt.Ltd. and the assessee and the settlement is approved by Hon’ble High Court of Delhi vide order dated 16th December, 2013. A copy of the order is placed before us. The learned DR stated that this decision of Hon'ble Jurisdictional High Court was not available either to the Assessing Officer or to the CIT(A) when the matter was decided. That since now the parties have agreed to certain facts before Hon'ble Jurisdictional High Court, it would be appropriate if the matter is set aside to the file of the Assessing Officer and he can examine, in the light of the settlement between the parties, who is the real owner of the assets purchased during the year under consideration and then further examine the source of such investment. Learned counsel for the assessee has no objection to this suggestion of the learned DR. In view of the above, we set aside the orders of authorities below and restore the matter to the file of the Assessing Officer. We direct the assessee to furnish the copy of decision of Hon'ble Jurisdictional High Court of the settlement to the Assessing Officer and thereafter, the Assessing Officer is directed to first examine who is the actual owner of the land purchased during the year under consideration and thereafter to examine the source of such purchase. Needless to mention that he will allow adequate opportunity of being heard to the assessee and then pass a speaking order in accordance with law.

In the result, the appeal of the Revenue is deemed to be allowed for statistical purposes. Decision pronounced in the open Court on 09.09.2016.