CHANDER MOHAN BHATI,JAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, JAIPUR

paid in cash at the time of registration and Rs. 6.00 Lakhs were

paid through two cheques of Rs. 3.00 lakhs each (No. 989600 dt.

13.05.2013 and No. 000006 dt. 14.05.2013). During the search

proceedings, the purchasers, Shri Ramesh Chand... Saini and Shri

Kishan Mali, were summoned u/s 131 of Income-tax Act, 1961 and

their statements were recorded on oath on 23.08.2017. Shri

Kishan Mali and Shri Ramesh Chand Saini were confronted with

the contents of the above mentioned agreement dated 14.04.2013

and registered sale deeds. They were asked about the source of

payments made by them as mentioned in these agreements and

sale deeds. Shri Kishan Mali was also confronted with the

registered sale deed dated 24.10.2013. In his reply, he stated that

this is a sale deed in respect of Plot No. 9, Adarsh Basti, Tonk

Phatak, Jaipur measuring 121.78 sq yard. He further stated that

8 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT Shri Kishan Singh and Shri Chandra Mohan Bhati had forced him

to sign on the said sale deed. He further stated that they had also

forced his brother Shri Ramesh Chand Saini to sign on sale deed

of the other part of the same plot. The assessee had surrendered

the amount of Rs. 2,28,44,808/- (1,25,00,000 + 1,03,44,808) as his

undisclosed income for F.Y 2014-15, but the purchase of the said

property was effected in F.Y 2013-14, relevant to the AY 2014-15.

From the perusal of the return of income filed by the assessee in

response to the notice u/s 153A of the IT. Act, 1961, it is clear that

the assessee has retracted from his statements recorded u/s

132(4) of the IT Act, 1961. The total number of shops at Balaji

Tower was twenty six and a flat was also built on the second floor

of the three storey building. The sale consideration of only sixteen

shops are mentioned in the seized document, hence to ascertain

the total sale consideration of the remaining shops and flat. The

total sale consideration of the shops and flat is of Rs. 4,53,50,000/-

, hence the profit ratio has to be worked out according to the ratio

of investment of both the persons. On the top of this page, the

details of investment of both the persons, i.e. Sh. Kishan Singh

and Sh. Chandra Mohan Bhati are delineated.

9 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT

The ratio of the profit has been stated as 121/139 = 260

The total sale consideration is of Rs 4, 53 ,50,000/-

Total cost of construction is of Rs. 2, 60 ,00,000/-

Hence, the gross profit is of Rs. 1, 93 ,50,000/-

G. P 5 is 42.67%

Assessee's share of profit is 139/260 = Rs 1,03,44,808/-

The shops and the flat of "Balaji Towers" were sold during the F. Y.

2013-14, 2014-15 and 2015-16, hence the profit has to be decided

for each assessment year. The property was purchased on the fag

end of October 2013, and the construction got underway, hence it

is not possible that the shops and the flat would have been sold

this year itself. From the registered deeds available with the

department, it is seen that four shops were sold this year, i.e. G-5,

G-6, F-2 and F-4. As per annexure-AS-2, page no. 14 and 15

scanned above, the sale considerations of the shops, G-5 and G-6

and F-2 are Rs. 14.00, 15.00, 18.00 respectively and for shop no.

F-4 Registered Value of 6.00 lakhs i.e. for total sale consideration

of Rs. 54,00,000/-. To determine the profit component, the cost

10 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT price of the shops and the flat as calculated by the ld. AO and the

same is as under:

A) Cost of Flat: 1,20,00,000 x 1,93,50,000/4,5350,000=68,79,600/

B) Cost of each shop: 2,60,00,000-68,79,600/26=7,35,400/-

The profit on sale of the shops are 53,00,000 (7,35,400 x 4)

29,41,600/- = 23 ,58,400/-

The assessees share of profit as per the ratio of his investment is

23,58,400 x 139/260 = 12 ,60,836/-

The investment made in the purchase of the land and in

construction of the building of Rs. 1,25,00,000/- is the undisclosed

income of the assessee. The profit earned on the sale of the four

shops during the year of Rs. 12,60,836/- is also being added to the

income of the assessee undisclosed income. This will result in an

addition of Rs. 1,37,60,836/- to the income of the assessee as his

undisclosed income.

5.2 On perusal of the computation of the income, it is seen that

the assessee has claimed deduction u/s 24(b) of the IT. Act, 1961

of Rs. 76,761/- on self occupied property, 17, Kalyan Colony,

11 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT Jaipur. From the assessment records for the A. Y. 2011-12 of Smt.

Laxmi Bhati, it is seen that the housing loan has been taken for the

property at 16, Telephone Colony, Jaipur, owned by Smt. Laxmi

Bhati and not for this property. Moreover, for claiming the

deduction u/s 24(b) of the I. T. Act, 1961, the person should be the

co-owner of the property as well as the co-applicant of the housing

loan. The property, 17, Kalyan Colony, Jaipur, belongs to his wife,

Smt. Laxmi Bhati, hence the deduction claimed u/s 24(5) of the I.

T. Act, 1961 is being disallowed and added to the income of the

assessee.

preferred an appeal before ld. CIT(A). The ld. CIT(A) noted that

even though the assessee was given five opportunities from 2021

to 2023. The assessee has neither filed any reply nor attained to

the notice to the assessee. Therefore, the ld. CIT(A) has

dismissed. The appeal of the assessee and relevant part of the

decision of ld. CIT(A) is reiterated here in below:-

“5. DECISION: 5.1 Despite of the various opportunities, the appellant has neither filed any reply nor any documentary evidences in support of his pending

12 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT appeal. Hence the appeal is decided on the basis of material available on record.

5.2 During the course of search, various incriminating material were found and seized. On analysis of these documents, it was found that assessee has made unaccounted investment and had earned unaccounted profit on sale of flats and shops. During the course of search the assessee had surrendered this undisclosed income while recording statement u/s 132(4). The AO had discussed each fact in assessment order in detailed manner. Further relevant seized material and statement recorded u/s 132(4) had also scanned in the assessment order. These documents and figures written on these documents clearly reflect that the assessee had made unaccounted investment and had earned profit. It was concluded that the total investment and profit earned for the year was Rs 1,37,60,836/- and the same had added in the hand of the appellant.

5.3 The addition was based upon incriminating material found and admission in statement recorded u/s 132(4). Such statement was based upon documents seized from his residence, which is sufficiently reliable in the eye of law. The disclosure was made voluntarily by the appellant. Admission of a particular fact during the course of search proceedings is strong evidence, which can be used against the person giving it. More so, when a person himself admits it to be true it may reasonable be presumed to be so, unless it is satisfactorily explained otherwise. Thus the effect of an admission is to shift the burden of proof to the person making the admission especially in a case when the statement so given was based upon incriminating documents impounded during search. The Supreme Court in the case of Basant Singh Janki Singh AIR 1967 SC 341 held that "An admission by a party in a plaint signed and verified by him in a prior suit is an admission within the meaning of section 17 of the Indian Evidence Act, 1872 and may be proved against him in other litigation. Section 17 of the Act makes no distinction between an admission made by a party in a pleading and other admission". Considering the evidentiary value of an admission and the fact that an admission shifts the onus in terms of section 31 of the evidence Act, the Supreme Court in Kishorilal Vs. Mst Chaltibai AIR 1959 SC 304 held that the admission shifted the onus on to the respondent on the principle that what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted the facts admitted must be taken to be established ....... It is also relevant to point out that the staternent which are recorded are presumed to be carrying truth in view of section 181 and section 193 of the Indian penal Code. In the Income tax proceedings, admission made during the course of search proceedings binds its maker unless rebutted through clear and specific evidence to the contrary. Unless the

13 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT contrary is specifically demonstrated, the admission is to be considered as conclusive evidence.

5.4 Considering the above facts and circumstances, the addition made by the AO of Rs 1,37,60,836/- (Rs 1,25,00,000+ Rs 1260.836/-) as his undisclosed income is hereby confirmed.

5.5 It was noticed that the assessee has claimed deduction u/s 24(b) of the Act of Rs 76,761/-on self occupied property 17. Kalyan Colony, Jaipur. On verification it was found that housing loan has been taken on property 16, Telephone Colony, Jaipur which is owned by his wife Smt Laxmi Bhati. Moreover the property 17, Kalyan Colony, Jaipur also belongs to his wife Srnt Laxmi Bhati. Considering the above facts and circumstances, the appellant had wrongly taken deduction u/s 24(b) and the AO had correctly disallowed the same. Hence the addition made by the AO of Rs 76,761/- by disallowing deduction u/s 24(b) is hereby confirmed.

5.6 Further, I take support from a judgement of the Hon'ble ITAT Agra Bench in the case of Shivangi Steel (P.) Ltd. v. Assistant Commissioner of Income tax, Central Circle, reported in [2014] 42 taxmann.com 393 (Agra Trib.), where it has been held that Section 251, read with section 144, of the Income-tax Act, 1961-Commissioner (Appeals) Powers of [Exparteorder) - Assessment year 2005-06 - Despite several notices issued under sections 143(2) and 142(1), assessee did not attend assessment proceedings, nor filed any explanation -Assessing Officer, therefore. passed an exparte assessment order under section 144 on assessee - Further assessee in spite of large number of adjournments granted by Commissioner (Appeals) did not produce any document in respect of grounds of appeal, nor made written or oral submissions before him Commissioner (Appeals), therefore, proceeded ex parte against assessee and confirmed assessment order -Whether both Commissioner (Appeals) and Assessing Officer rightly proceeded ex parte against assessee Held, yes [Para 6] [In favour of revenue] Section 254 of the Income-tax Act, 1961 read with rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 Appellate Tribunal Powers of [Powers to admit additional evidence] Assessment year 2005-06 Assessing Officer passed an exparte assessment order under section 144 on assessee -Commissioner (Appeals) in absence of any co- operation from side of assessee proceeded exparte against assessee and confirmed assessment order Against order of Commissioner (Appeals), assessee filed appeal before Tribunal - It also moved application under rule 29 of Appellate Tribunal Rules. 1963 for admission of additional evidences - Whether since assessee had not made out any case that authorities below had decided case without giving sufficient opportunity to adduce evidence, requirement of rule 29

14 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT had not been satisfied - Held yes Whether, therefore, above application was liable to be rejected - Held, yes [Para 7][In favour of revenue] 5.7 Following the above discussion, I uphold the additions made by the AO Rs 1,37,60,836/-(Rs 1,25,00,000+ Rs 1260,836/-) and Rs 76,761/-. Thus, grounds of appeal 1 to 9 are hereby dismissed

assessee has preferred the present appeal submitting that the ld.

CIT(A) has not appreciated the contentions raised by the assessee

before ld. AO and has simply confirmed the view of the ld. AO and

even the assessee could not advance the argument because of the

fact that they have filed the adjournment application and the proof

of the same was placed on record. Since, the assessee could not

get chance to represent the case on all the occasion as the

assessee sought the adjournment and therefore, the assessee

humbly prayed that the order of the ld. CIT(A) be set aside and the

assessee may be granted one more opportunity.

that ld. CIT(A) has given as many as five opportunities from 2021

to 2023 and on all five opportunities granted to the assessee has

not filed any written submission and has not responded to the

notices and considering aspect of the matter there is no meaning of

15 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT set aside. The relevant fact of the case of the assessee has been

decided on merit by the ld. CIT(A) and therefore, there is no meaning to give the 2nd inning to the assessee

placed on record. A propose to the grounds so raised by the

assessee that the order of the ld. CIT(A) is ex-party. The ld. AR of

the assessee submitted that although four notices were issues and

all the occasions. They have filed adjournment application and the

proof of the same is placed on record. The bench noted that there

is no reference as to the acceptance or rejection of these

adjournment applications by the ld. CIT(A) and therefore, the

assessee is deprive of justice and therefore, considering that

aspects of the matter which is not disputed by the ld. DR that these

adjournment applications were not on record. In the light of this

fact, we are of considered view that the assessee sought

adjournment. The adjournment applications were not discussed or

disposed off by ld. CIT(A) and the order has been passed without

giving any opportunity to the assessee and therefore, we set aside

the order of ld. CIT(A) and directly to set aside afresh in

16 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT accordance with law and set aside the issue on merits after giving

proper opportunity being heard to the assessee. At the same time,

the assessee is directed to represent and present all the facts

before the ld. CIT(A) and should not ask for adjournment of trifles

grounds. At this stage, we remand back the matter without

commenting upon the merits of the case and ld. CIT(A) is directed

to pass an order in accordance with law.

In terms of these observations, the appeal of the assessee in

ITA no. 161/JP/2024 is allowed for statistical purposes.

to the case in ITA No. 161-JP-2024 and we have heard both the

parties and persuaded the materials available on record. The

bench has noticed that the issues raised by the assessee in this

appeal No. 162 & 163/JP/2024 is equally similar on set of facts and

grounds. Therefore, it is not imperative to repeat the facts and

various grounds raised by both the parties. Hence, the bench feels

that the decision taken by us in ITA No. 161/JP/2024 for the

Assessment Year 2014-15 shall apply mutatis mutandis in the

17 ITA Nos. 161 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT case of Shri Chander Mohan Bhati in ITA Nos. 162 & 163-JP-2024 for the Assessment Year 2015-16 & 2017-18.

In the result, three appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 03/04/2024.

Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 03/04/2024 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Chander Mohan Bhati, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-04, Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA Nos. 161 to 163/JP/2024} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत