SANGEETABEN M. MARDIA,MUMBAI vs. ITO 18(3)(2), MUMBAI

This is an appeal filed by the assessee against the order of CIT(A)- 29, Mumbai dated 22/11/2016 for the A.Y.2007-08 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act.

Rival contentions have been heard and record perused.

Facts in brief are that the assessee, an individual, filed her return of income for AY 2007-08 on 31/07/2007 admitting an income of Rs. 2,46,617/-. Subsequently, the AO received information from the DDIT (Investigation), Unit-III(2), Mumbai which is as under: "the assessee Smt. Sangeetaben M. Mardia, has booked a flat in the project developed by M/s. Esque Finmark Private Ltd. at Kala Chowkie, Mumbai. Upon enquiry and investigation it is observed that during FY 2006-07 the assessee has made investment in the said project towards which payment of Rs. 42,25,000/- was made in cash. The assessee could not produce the proof of source of payment of Rs. 42,25,000/- made in cash to the developer." Based on this information the AO, upon formation of reason to believe that income has escaped assessment, issued notice u/s 148 of the Income Tax Act, 1961 to the assessee. During the course of assessment proceedings, the assessee submitted copy of allotment letter from M/s. Esque Finmark Private Ltd. and copy of receipts issued by them along with her bank statement. The AO noticed that the payments of Rs. 30 lakhs were made to M/s. Esque Finmark by cheque. He asked the assessee to furnish confirmation from M/s. Esque Finmark Private Ltd. for the total payments made' to them. The assessee stated that as the building was incomplete, the balance payment of Rs. 12,25,000/- has not been made. The AO refused to acept the argument of the assessee stating that the assessee failed to furnish ledger confirmation of payment made to M/s. Esque Finmark Private Ltd., payment of 'on money' is not uncommon in this line of business and placing his reliance on the judgement of the Hon’ble Supreme Court in the case of Sumati Dayal vs. CIT, made an addition of Rs.12,25,000/- to the total income of the assessee.

By the impugned order, CIT(A) confirmed the action of the AO which assessee is in further appeal before us.