KARIM TAJDIN HALANI,ANAND vs. THE ITO, WARD-1, ANAND

The assessee has raised the following ground of appeal :-

The assessee is an individual and filed return of income for the Assessment Year 2016-17 on 21.06.2017 declaring total income at Rs.11,47,230/-. The case of the assessee was selected for limited scrutiny through CASS to verify the issue of cash deposits in bank and transactions in property. The assessee was served show cause notice dated 14.11.2018 which was responded by the assessee thereby explaining that the assessee has purchased property at Survey No.339/2+3, sub plot No.C/26, At-Vaghasi for Rs.43,00,000/-. The assessee has discharged consideration of Rs.25,00,000/- by obtaining loan from DCB Bank. As regards balance consideration of Rs.18,00,000/-, the same was not paid due to the dispute with the seller. These facts were submitted before the Assessing Officer and after taking into account the Assessing Officer made addition of Rs.18,00,000/- as investment in property made out of undisclosed sources. The Assessing Officer also made addition of Rs.11,00,000/- towards cash deposited in Karur Vaisya Bank Limited treating the same as unexplained cash.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

The Ld. AR submitted that the CIT(A) was not justified in confirming the addition of Rs.18,00,000/- being investment in property made out of undisclosed sources despite the fact that the said amount was not paid by the assessee due to the dispute with the seller of the assessee. The Ld. AR further submitted that there is a delay of 21 days in filing the present appeal, as the assessee, due to personal circumstances, could not file the appeal within the time.

The Ld. DR submitted that the assessee is enjoying the possession but has not paid the amount as per the submission is not tenable as the assessee could not establish that there was a dispute between the parties.

Heard both the parties and perused all the relevant material available on record. The assessee purchased immovable property of Rs.43,00,000/- and in fact taken a home loan of Rs.25,00,000/- and balance payment of Rs.18,00,000/- was paid in subsequent year but the details of remaining Rs.18,00,000/- was not supported by any evidence as mentioned by the CIT(A). Before the Tribunal, the assessee submitted that the there was a dispute but the assessee has not demonstrated that any legal action in respect of the dispute with the seller was taken or not. Besides this, the assessee is enjoying the possession of the property which shows that the assessee, as per the documents, must have paid the amount of Rs.18,00,000/-. Even for the time being it is taken into account that the assessee has paid fully but the reflection of the payment in his details of Bank account is not demonstrated or properly linked by the Assessing Officer and merely estimation cannot be termed as unexplained investment from undisclosed sources. The decision of the Hon’ble Gujarat High Court in the case of CIT vs Star Builders (IT Ref. No.9 of 1999, order dated 13.11.2006) merely mentioned that the mere suspicion cannot be ground for making addition. Therefore, in the present case, the Assessing Officer as well as the CIT(A) has only presumed that there was payment of Rs.18,00,000/- which is not reflected in any of the accounts or demonstrated by the Assessing Officer that the assessee made only payment of Rs.18,00,000/-. Thus, appeal of the assessee is allowed

In the result, appeal filed by the assessee is allowed.