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Facts
The assessee's case was reopened under Section 147 for AY 2018-19 due to the purchase of immovable property worth Rs. 1,00,00,000. The AO made an addition of Rs. 64,00,000 as unexplained investment, which the CIT(A) partly upheld, confirming an addition of Rs. 9,50,000.
Held
The Tribunal found some merit in the assessee's submissions regarding the source of funds and directed the AO to make an ad-hoc addition of Rs. 6,40,000 (10% of Rs. 64,00,000) to cover inconsistencies, applying normal income tax rates instead of Section 115BBE.
Key Issues
The key legal issues were the validity of the assessment order due to alleged procedural violations under Section 148A(b) and the justification for the addition made under Section 69 for unexplained investment in property.
Sections Cited
Section 147, Section 148, Section 144B, Section 69, Section 148A(b), Section 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & DR. DINESH MOHAN SINHA
आदेश/ORDER Per Dr. Dinesh Mohan Sinha, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY)-2018-19, is directed against the order passed by the Commissioner of Income Tax [(in short “Ld. CIT(A)”] vide order dated 03.12.2024, which in turn assessment order dated 26.03.2023passed by Income Tax Department/Assessing Officer under section 147 r.w.s. 144B of the Income Tax Act, 1961 (in short “the Act”).
Grounds of appeal raised by the assessee are as follows:
“1.The order passed by the Ld. CIT (A) is against law, equity & justice.
2. The Ld. CIT (A) has erred in law and on facts in considering the validity of assessment order as there is violation of the procedure prescribed under section 148A(b) on account of failure of the Ld. JAO to provide the requisite material which ought to have been supplied along with the information in terms of the section 148A(b) of the Act.
3. The Ld. CIT(A) has erred in law and on facts in upholding addition made by the Ld. A.O. to the extent of Rs. 9,50,000/- U/S 69 of the Act.
4. The appellant Craves liberty to add, amend, after or modify all or any grounds of appeal before final appeal.”
Brief facts of the case that the appellant is an Individual. The return of income for AY 2018-19 was not filed by the appellant. The case was reopened u/s 147 on the basis of information made available to the AO in the insight portal as per Risk Management Strategy formulated by the CBDT according to which the appellant had purchased immovable property for Rs.1,00,00,000/-. A notice u/s 148 was issued on 31/03/2022 after following the prescribed procedure. The appellant had filed return of income on 29/04/2022 declaring total income of Rs.2,00,000/-. The appellant had submitted housing loan details from DHFL of Rs.31,55,050/- only and had claimed that her share in the property is only 20% but no other details were filed in spite of giving 4 opportunities including show cause notices issued and opportunity of personal hearing granted through VC but assesse fail to avail the opportunity, therefore assessment was completed by making addition of Rs.64,00,000/- as unexplained investment, Total income assessed at Rs. 66,00,000/-.
That the assessee filed an appeal against the order before the Ld.CIT(A). That the appeal was partly allowed by following remarks:
1. “In view of the above discussion, the addition of Rs.9,50,000/-(Rs.7,00,000/- +Rs.2,50,000/-) is confirmed and addition of Rs.54,50,000/-(Rs.41,50,000/- +Rs.13,00,000/-) is hereby deleted. Thus the ground of appeal raised by the appellant is partly allowed.
1. 8. Ground No.4:- In this ground the appellant crave liberty to add, amend, alter or modify all or any grounds of appeal before final hearing. However during appellate proceedings the appellant has not exercised the above option. Therefore the ground of appeal raised by the appellant is dismissed.
9. In the result, the appeal is partly allowed.”
1. 5.1. During the course of hearing, the Ld. AR submitted that the relevant document has already been submitted before the lower authorities. The addition may kindly be deleted.
5.2. On the contrary, the Ld. Sr. DR for the revenue relied on the order of the Ld.CIT(A).
We have heard both the parties carefully and gone through the submission put forth on record. We note that the assessee submitted. The assesse has purchased property worth Rs. 64,00,000/- and the assesse paid through banking channel. The assesse submitted that out of the total amount of Rs. 64,00,000/-, Rs.30,00,000/- was invested in previous year not relevant to this year and Rs. 31,55,050/- housing loan, taken from DHFL, loan confirmation, bank statement was placed on record. The assesse also stated that her share in property is only 20% however no supporting document was filed. The assesse has also taken unsecured loan from various persons but the assesse could not prove beyond doubt about the loan. Considering the above fact and circumstance of the case, and considering the smallness of the amount and in order to protect the revenue leakage an ad-hoc, estimated addition should be made in the hands of the assessee. Hence, we find that there is some merits in the case of the assesse, at the same time entire relief cannot be permitted to the assessee. In our view the ends of justice would be met if disallowance @ 10% of Rs. 64,00,000/- which comes to Rs. 6,40,000/-, since the same would take care of the inconsistencies, in the various documents and evidences submitted before the lower authorities. Therefore, in order to plug the leakage of revenue, we direct the assessing officer to make addition of Rs. 6,40,000/-, by applying the normal rate of income tax (not under section 115BBE of the Act). It is also made clear that instant adjudication Page 3 of 4
In the result, the appeal of the assessee is allowed.
Order is pronounced in the open court on 09/03/2026.