SH. BHUPESH KUMAR DHINGRA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 6559/DEL/2013Status: DisposedITAT Delhi16 February 2016AY 2007-084 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made under Section 69 was incorrect because the investment was recorded in the assessee's books of accounts. The assessee had demonstrated that the cash advance was out of balances available in the books.

What were the facts?

During a search operation, the assessee paid Rs. 5 lakhs in cash as an advance for a property transaction. The Assessing Officer treated this as unexplained investment as there was no corresponding cash withdrawal from the bank.

What were the issues?

Whether an investment recorded in the books of account can be treated as unexplained investment under Section 69 if there is no corresponding bank withdrawal.

Which sections of the Income-tax Act were involved?

Section 69,Section 153A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : “A” NEW DELHI

Before: SHRI H.S.SIDHU, J.M. & SHRI J.SUDHAKAR REDDY, AM

O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER

This is an appeal filed by the Assessee directed against the order of the Ld.Commissioner of Income Tax (Appeals)-II dated 8th November,2013 pertaining to the Assessment Year (A.Y.) 2007-08.

2.

Facts in brief:- The assessee is an individual and derives income from profession, house property and other sources. A search and seizure operation was conducted at the premises of the assessee on 20.11.2008. In response to a notice u/s 153A of the Income Tax Act, 1961 (the Act) dt. 30.9.2009, the assessee filed a return of income on 23.10.2009 declaring income of Rs.69,42,160/-.

2.1. The facts leading to the addition in question before us is at page 1 para 2 of the assessment order which is extracted for ready reference.

Sh.Bhupesh Kumar Dhingra, New Delhi “As per seized Annexure A-15 from 604, Padma Tower, Rajinder Place, New Delhi pages 73 to 102 relate to a property transaction by the assessee with Shri SC Jagota in respect of property no. D-8, Soami Nagar, Delhi. As per the copy of the signed agreement to sell dt. 8.3.2007 and 6.3.2007 both declared that Shri BK Dhingra has paid Rs.5 lakhs by cash on 8.3.2007. A copy of cash receipt is also available on page 86 to 87 of this Annexure. The total advance paid was Rs.30 lakhs. The assessee was asked to explain the source of Rs.5 lakhs. The assessee replied that it is out of cash in hand. However, while go through the bank statement it is been found that there was no cash withdrawal in bank account during March, 2007. The assesseealso otherwise could not prove that the amount was available as cash in hand. Therefore, the amount of Rs.5 lakhs is treated as unexplained investment u/s 69 of the Act. Hence the amount of Rs.5 lakhs is added to the income of the assessee u/s 69. As the assessee has concealed income penalty u/s 271(1) (c ) is initiated separately.”

3.

On appeal the First Appellate Authority confirmed the addition.

4.

Aggrieved the assessee filed the present appeal before us.

5.

We have heard Shri Ravi Jain, Ld.CIT, DR on behalf of the Revenue. Shri Bhupesh Kumar Dhingra, the assessee represented himself. On a careful consideration of the facts and circumstances of the case, perusal of material on record, orders of lower authorities, case laws cited, we hold as follows.

6.

Though the assessee has filed 10 grounds of appeal, he pressed only ground nos. 7(a), 7(b) and 7(c ). All the other grounds i.e. ground nos. 1 to 6 and ground nos. 8, 9 and 10 are dismissed as ‘not pressed’.

7. We find that the addition in question is made u/s 69 of the Act. S.69 of the Act reads as follows.

“S. 69. Unexplained investments Where in the financial year immediately preceding the assessment year � the assessee has made investments which are not recorded in the Sh.Bhupesh Kumar Dhingra, New Delhi books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the 2[Assessing] Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

7.1. The investment in question is recorded in the books of accounts. This is clear from the audited balance sheet dt. 30.4.2007. This factual submission of the assessee could not be controverted by the Ld.CIT, D.R. Thus we delete the addition of Rs.5 lakhs made u/s 69 of the Act, as the assessee has demonstrated that the cash advance was made out of balance available as on that date in the books of accounts and as the transactions were duly recorded in the books of accounts.

7.2. In the result the addition is deleted and this ground of the assessee is allowed.

8.

In the result assessee’s appeal is allowed.

Order pronounced in the Open Court on 16th February, 2016.

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