SANJAY MITTAL, AMBIKAPUR,AMBIKAPUR vs. ACIT, CENTRAL CIRCLE, BILASPUR, BILASPUR

4. Ground No.1 & 2: During the assessment proceedings, the Ld. AO noted that Shri Sanjay Mittal has constructed posh and luxurious bungalow fitted with costly and luxury furniture and fixture. During the course of search action, approved valuer was called upon and got valued this bungalow. The valuer has worked out the valuation of the property at Rs.18,69,50,000/- as on 17.02.2018. But, in his statement recorded on 24.05.2018 during post search inquiry the assessee stated that amount of Rs.6,58,87,564/- has been invested on construction of said residential bunglow. Thus, there is a difference of Rs.12,10,62,436/- in cost of construction, which is treated as "unexplained investment" met out of undisclosed sources of income which is not recorded in the books of the assessee. During the course of assessment proceedings, the copy of valuation report of same residential bunglow was provided to assessee.

The assessee was asked to explain as to why the addition should not be made in to his total income on the ground of unexplained investment made on construction of residential bunglow. In response to the same, no reply was been filed by assessee, show cause notice was also issued vide dated 13.11.2019. the assessee was asked to furnish his compliance on or before 20.11.2019. But, no reply was filed by assessee on stipulated date.

The valuer has already worked out and mentioned in valuation report the total value of property as on date of valuation is Rs.18,69,50,000/-. The assessee has shown only amounting Rs.6,58,87,564/- in his books and failed to give proper explanation and documents. It is evident that the assessee has nothing to say about this investment. Therefore, an amount of Rs.12,10,62,436/- is cost of construction treated as unexplained investment from undisclosed source of income which is not recorded in the books of the assessee, hence, the amount of Rs.12,10,62,436/-was added to the total income of the assessee.

During the appeal proceedings. The appeal was fixed for hearing as under: …………………………. …………………………. No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Ld. AO. In absence of any explanation & on the basis of facts gathered and discussed by the Ld. AO, considering entire facts in the assessment order, the contention of the assessee has been found to be incorrect and unjustified. During the assessment proceedings, the Ld. AO noted that Shri Sanjay Mittal has constructed posh and luxurious bungalow fitted with Sanjay Mittal vs. ACIT, Central Circle, Bilaspur costly and luxury furniture and fixture. During the course of search action, approved valuer was called upon and got valued this bungalow. The valuer has worked out the valuation of the property at Rs.18,69,50,000/- as on 17.02.2018. But, in his statement recorded on 24.05.2018 during post search inquiry the assessee stated that amount of Rs.6,58,87,564/- has been invested on construction of said residential bunglow. Thus, there is a difference of Rs.12.10,62,436/- in cost of construction, which is treated as "unexplained investment met out of undisclosed sources of income which is not recorded in the books of the assessee. Hence, the amount of Rs.12,10,62,436/- was added to the total income of the assessee.

During the appeal proceedings, the assessee had failed to furnish any details or explanation with respect to the transaction made in his books of accounts and failed to explain the source of unrecorded transaction. I find that Ld. AO is justified in assessing the total income of the appellant as discussed above. when repeated opportunities in this regard was provided however no compliance was made by the assessee, it clearly shows that the appellant is not interested in pursuing the appeal. In these circumstances, I have no option but to confirm the addition made by the Ld. AO and dismiss the grounds of appeal of the appellant. Respectfully, following the view taken in the cases cited above, the appeal filed by the appellant deserves to be dismissed. Therefore, appeal on these grounds was dismissed.”

4. Before us, Shri R.B. Doshi, CA, Ld. Authorized Representative (‘AR’) of the assessee drew our attention to the fact that the Ld. CIT(A) had decided the appeal ex-parte due to non-prosecution. Further, on merit of the case, the Ld. CIT(A) had not given the detailed justification while agreeing with the Ld. AO’s finding. Non- compliance on the part of the assessee was the sole reason for dismissal of the appeal on merit also. He prayed for remanding the case back to the file of Ld. CIT(A).

5. Ms. Bharti Singh, Ld. CIT-DR, drawing our attention to various paras of the assessment order and impugned appellate order, submitted that reasonable Sanjay Mittal vs. ACIT, Central Circle, Bilaspur opportunities of being heard had been provided to the appellant assessee by the Authorities below; Ld. AO and Ld. CIT(A). However, the appellant assessee tactfully ensured noncompliance to avoid investigations. Hence, she prayed for dismissing the appeal. On our specific query, she reluctantly admitted for remanding the case back to the file of the Ld. CIT(A) for adjudication on merit.