SHRI RAJPAL JAIN,INDORE vs. THE ITO 3 (3), INDORE

This appeal by the assessee is directed against the order dated 11.11.2022 of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi for Assessment Year 2013-14.

“01. That the CIT(A) is in erred into not considering the facts that the all the three brothers had taken loan of Rs. 25,00,000/- for purchase of house on the basis of non-providing of evidence of loan to him. 2.Ground02. That the CIT(A) is in erred into not considering the 0 evidence attached by the assessee during the hearing of the case and held that in absence of application for the provision of rule 46A the documents submitted is not considered for hearing. 3.Ground03. That the CIT(A) is in erred into misinterpreted the head of income for salary income of Rs. 2,59,200/- and held that there is no change in the taxable income therefore no adjustment is required. 4.Ground04. That the CIT(A) is in erred into not considering the plea 0 of the assessee that if the stamp duty paid is considered as income than the payment of stamp duly for purchase of house is also eligible for deduction under section 80C. 5.Ground05. The levy of interest u/s 234-B & 234-C is arbitrary, illegal and bad-in-law on the facts and circumstances of the case. 6.Ground06. That no proper and reasonable opportunity was given to the appellant to prove his case and lead evidence in support of his claim through the video conferencing. 7.Ground07. The Appellant craves, to leave, to add, to alter or amend any grounds of appeal at the time of or before final hearing of this appeal.”

4. At the time of hearing Ld. AR of the assesse has submitted that the AO has passed ex-parte order u/s 144 of the Act. The assesse challenged the order of the AO before ld. CIT(A) and also requested for admission of the additional evidence for want of the same the AO made disallowance but the Ld. CIT(A) has rejected plea of the assesse for admission of additional evidences. The Ld. AR has pointed out that the assesse has purchased property in question along with two brothers in joint name for a consideration of Rs.32,11000/- out of which a sum of Rs.25,00,000/- was Page 2 of 5 Rajpal Jain Page 3 of 5 taken as loan from bank for purchase of this property and further sum of Rs. 5,00,000/- was taken as loan from Cooperative Society M/s Jay Bharat Cooperative Society. The ld. AR has submitted that all relevant record was produced before the AO except loan taken from Cooperative Society. The entire payment was made through Cheque for the purpose of consideration except a sum of Rs.2,24,800/- towards stamp duty and registration charges paid in cash which is explained by the assesse from loan taken from bank as well as from Cooperative Society. The AO in the order passed u/s 154 has accepted the loan taken from bank but since the record of the loan taken from the society was not available on the assessment record therefore, the AO refused to accept the said plea while passing the order u/s 154 of the Act. The ld. CIT(A) has confirmed the addition made by the AO for want of evidence and refused to accept additional evidence in the absence of proper application under Rule 46A of the Income Tax Rules. Thus, Ld. AR has submitted that once the assesse has brought on record the supporting evidence to show the source of the purchase consideration the addition sustained by the ld. CIT(A) is not justified and the same may be deleted.

5. On the other hand Ld. DR has submitted that the AO has already allowed the claim of the assesse to the extent which is supported by the evidence filed before the AO. In the proceeding u/s 154 the AO cannot conduct a fresh inquiry in respect of the evidence which was not filed by the assesse during the assessment proceedings. He has relied upon the orders of the authorities below and submitted that the additional evidence sought to be filed by the assesse requires verification and examination. Therefore, the matter may be remanded to the record of the AO for verification and examination of the additional evidences sought to be filed by the assessee.

6. We have considered rival submission as well as relevant material on record. Initially the Assessing officer has made the addition by considering loan amount of Rs.11,25,000/- however, in the rectification order passed u/s 154 of the Act on 27.06.2019 the AO accepted the loan amount of Page 3 of 5 Rajpal Jain Page 4 of 5 Rs.25,00,000/- and consequently addition of Rs.3,11,933/- was made by the AO. Ld. AR of the assesse has submitted that the AO has not considered the loan of Rs.5 lac taken by the assesse from Cooperative Society namely M/s Jay Bharat Cooperative Society and therefore, the addition sustained by the Ld. CIT(A) is not justified. It is pertinent to note that the assessment order was passed ex-parte u/s 144 when there was no compliance on behalf of the assesse to the notices issue by AO. Though the AO in the rectification order has accepted the claim of loan from bank of Rs.25 lac which was part of the assessment record but did not entertain the claim of loan from cooperative Society. Before the Ld. CIT(A) the assesse made a request of admission of the additional evidence however, no formal application was filed and consequently the Ld. CIT(A) has confirmed the addition made by the AO as under:

“6.2.2 The assessee submitted that the consideration was paid by different family members as per details submission. However, these details were not filed before AO therefore, this details should have been filed along with the application for admission of additional evidence as per provisions of Rule 46A. As no such application was filed the evidence cannot be admitted for consideration. 6.2.3 The assesse also submitted that part of the money was financed from his salary. This also is a additional evidence and as cited above cannot be considered. Moreover, as the assesse has not offered any salary income even if the source is concerned it will have no impact on the total income of the assesse as on one hand part of the investment will be treated as explained being out of salary income on the other hand the same would be added under the head 'Salary'.”

Order in pronounced in Open Court on 25 / 07/2023.