SANJEEV KUMAR,BULANDSHAHR vs. ITO, WARD 2(3)(2), BULANDSHAHR

of said representative was mentioned for communication. He

further submitted that after filing appeal before the Ld.CIT(A) no

communication was received by Shri Gaurav Goel and the assessee

was not aware of passing impugned first appellate order and its

communication. The Ld. AR submitted that when the assessee

received penalty notice dated 22.02.2023 then he contacted to Shri

Gaurav Goel but he refused to handle the matter for the reasons

best known to him. Under such circumstances present AR was

engaged to handle the penalty case. The Ld. AR further submitted

I.T.A.No.658/Del/2023

that while preparing the penalty appeal the AR on examination of

ITBA portal of assessee came to know that the quantum appeal of

the assessee has been dismissed on 23.03.2022. The Ld. AR further

submitted that thereafter the assessee came to know about the

dismissal of the first quantum appeal by the Ld.CIT(A) on

22.02.2023 and immediately filed appeal before the Tribunal on

13.03.2023. Therefore, delay caused in filing the appeal before the

Tribunal is bona fide delay which may kindly be condoned.

condonation of delay. He vehemently submitted that the affidavit

of assessee has been deposed on 18.04.2023. There is no evidence

showing non-receipt of first appellate order, the assessee is

required to be diligent, vigilant but he proved to be a negligent,

litigant and, therefore, there is no sufficient cause explaining the

delay. Application seeking condonation may kindly be dismissed.

However, he did not controvert that as per Form 35 the e-mail

address of communication has been given as

charteredaccountantgauravgoelbcr@gmail.com.

that the delay caused in filing appeal before the Tribunal is bona

fide delay due to the reasons stated above and beyond control of 3

I.T.A.No.658/Del/2023

assessee. The assessee never gets any benefit in filing delayed

appeal before the Tribunal except enlargement of controversy and

litigation in the present case. Therefore, I find it appropriate to

condone the delay in filing appeal before the Tribunal due to the

reasons noted above which have not been controverted by the Ld.

Sr. DR. Accordingly, delay of 295 days in filing appeal before the

Tribunal is condoned and appeal is admitted for consideration and

adjudication.

Officer made an addition of Rs.18,75,000/- u/s 69 of the Act on

account of cash deposited towards repayment of home loan being

75% of total cash deposit of Rs.24,96,274/- which was incorrectly

noted by the Assessing Officer as 25 lakhs.

by merely mentioning that what has been stated by the Assessing

Officer in the assessment order and simply by accepting the same in

2-3 lines. Therefore, the first appellate order is not sustainable

being cryptic and untenable.

7.1 The Ld. AR submitted that in fact Rs.24,96,274/- were

deposited to the joint home loan account of assessee with his wife

I.T.A.No.658/Del/2023

and 50% EMI of said home loan was contributed by the assessee and

his wife equally. The Ld. AR also submitted that out of total

deposit of Rs.24,96,274/- the assessee deposited Rs.12,91,883/- and

remaining amount of Rs.12,08,116/- was deposited by his wife Smt.

Shalini. The Ld. AR submitted that the cash pertaining to wife of

assessee amounting to Rs.12,48,137/- was first taken into cash book

of assessee on 08.11.2016 and thereafter, the same was deposited

to the home loan account in two installments viz. first of

Rs.14,46,274/- on 10.11.2016 and second on 12.10.2016 of

Rs.10,50,000/-. The Ld. AR submitted that the assessee during the

assessment and first appellate proceedings submitted all relevant

documentary evidences establishing the source of cash deposits by

submitting complete cash book of assessee, affidavit dated

19.12.2019 of father of assessee Shri Kalu Mal stating Rs.20,000/-

per month given by father to the assessee, ITR acknowledgement of

father Shri Kalu Mal showing returned income of Rs.5,82,894/- for

AY 2017-18, confirmation of wife showing returned income of

Rs.4,68,820/- for AY 2017-18, joint home loan account and home

loan repayment schedule shows that assessee, his father and his

wife has sufficient income dividend funds which were accumulated

and used for deposit to their joint home loan account. The Ld.AR

I.T.A.No.658/Del/2023

also submitted that the AO has made addition u/s 69 of the Act

which pertains to unexplained investment whereas in the present

case the assessee has not made any unexplained investment but he

made repayment of loan. Therefore, the view of judgment of

Hon’ble ………………….the addition made and confirmed under

irrelevant and incorrect charging section is not sustainable and part

addition sustained by the Ld.CIT(A) cannot be held as valid being

bad in law.

assessee spread over 42 pages submitted that the assessee has filed

confirm ledger account of partnership firms M/s Umang Beverages

and M/s Mohan Oil & Cattle Feed and Bihar Milk Foods Pvt. Ltd.

showing cash withdrawal of capital and salary in cash and copies of

the returns of income for AY 2017-18 of all three said entities

showing that their Income Tax payee entities and confirming

payment of salary as well as cash withdrawal of capital from both

the said partnership firms. The Ld. AR submitted that in view of

said confirmations when the computation of income filed by the

assessee along with return of income for AY 2017-18 and cash flow

statement placed at pages 2 to 4 of assessee’s paper book 1 is seen

together then it is amply clear that the assessee has successfully

I.T.A.No.658/Del/2023

explained the source of cash deposits to the joint home loan

account with his wife Smt. Shalini. Therefore, no addition could

have been made in the hands of the assessee.

kindly be allowed on both the counts that on merits as well as on

the legal position that the Assessing Officer has adopted incorrect

charging section of 69 of the Act which pertains to the issue of

unexplained investment by the assessee, whereas the assessee has

not made any investment by way of depositing cash to his joint

home loan bank account with his wife.

the authorities below and submitted that merely because the AO

has mentioned incorrect charging section of 69 of the Act instead of

section 68 of the Act the entire assessment as well as first appellate

proceedings do not vitiate. The Ld. Sr. DR further submitted that it

is highly unbelievable that the assessee is receiving cash salary and

cash capital withdrawal from partnership firm in this era of banking

transaction. However, on being asked by the Bench the Ld. Sr. DR

did not dispute that the correct figure of cash deposit to the joint

home loan account was Rs.24,96,274/- out of which Rs.12,91,883/-

were deposited by the assessee out of cash in hand as per cash book 7

I.T.A.No.658/Del/2023

and remaining amount of Rs.12,08,116/- was deposited by Smt.

Shalini which was explained to the AO during assessment

proceedings vide letter dated 28.11.2019 which has also been

extracted and reproduced in the assessment order.

father Kalu Mal are Income tax payee and continuously filing return

of income showing sufficient income. The affidavit of Shri Kalu Mal

copy of which is available at page 24 of assessee’s PB 1 shows that

Shri Kalu Mal had given cash gift of Rs.20,000/- per month during FY

2016-17 totaling to Rs.2,40,000/-. From copy of his return of

income available at page 25 shows that his returned income for the

relevant year was Rs.5,82,894/- whereas the total cash gift was

only Rs.2,40,000/- for the relevant period. Therefore, the

authorities below were not correct in dismissing the explanation of

the assessee in this regard. Copy of confirmation certificate issued

by Smt. Shalini i.e. wife of assessee shows that she has categorically

stated that out of total cash deposit Rs.12,08,116/- was given to

the assessee by her for deposit to the joint home loan account

no.xxx889938. The copy of return of income available at page 27

shows that her returned income was Rs.4,69,820/- which is also not

in dispute.

I.T.A.No.658/Del/2023

deposit was made by the assessee on her own and on behalf of her

wife to their joint home loan account as repayment of home loan.

Thus, I safely presumed that assessee has not made any investment

for acquiring any movable or immovable property. Therefore, the

allegation of unexplained investment cannot be made against the

assessee invoking the charging section u/s 69 of the Act. From the

relevant part of assessment order, I note that the AO has made

addition by mentioning charging section as 69 of the Act and

Ld.CIT(A) has also upheld the same without any change or without

addressing the grievance of the assessee in this regard.

Allahabad in the case of Smt. Sarika Jain Vs. CIT in ITA No.435/2008

and order of ITAT Chennai Bench in the case of Smt. Sekar

Jayalakshmi Vs. ITO in ITA No.20/Chny/2021 which has been

considered and referred by ITAT Delhi Bench in the case of M/s

Toffee Agricultural Farms Pvt. Ltd. Vs. ITO dated 18.04.2022 in ITA

NO.4903/Del/2019 for AY 2006-07. The coordinate bench of

Tribunal held as follows:

“3. Learned counsel for the assessee submitted that the orders of the authorities below are unjust, arbitrary and against the principles of law. He submitted that in 9

I.T.A.No.658/Del/2023

the present case the Assessing Officer had made assessment u/s 69C of the Act and he had referred the matter to DVO U/s 142A of the Act. He contended that the reference u/s 142A can be made for the purpose of ascertaining the correct value of investment referred to in section 69 or 69B. However, Section 69C is not mentioned in the proviso. He placed reliance on the judgment of Hon’ble Delhi High Court rendered in the case of CIT Vs. Aar Pee Apartments (P) Ltd. 319 ITR 276 to buttress the contention that reference is bad in law. Learned counsel further submitted that even otherwise also the Assessing Officer did not make any inquiry regarding the correct fair market value of the land. In support of the contention that if inquiry is not made by the assessing authority the assessment is vitiated, learned counsel for the assessee has placed reliance on the judgment of the Hon’ble Delhi High Court rendered in the case of CIT Vs. Lubtech India Ltd. (2009) 311 ITR 175 (Del). Further reliance was placed on the judgment of the Hon’ble Allahabad High Court rendered in the case of Dinesh Kumar Mittal Vs. ITO (1992) 193 ITR 770 (All). He further submitted that the learned CIT(Appeals) to fill the legal lacuna, regarding assessment made u/s 69C, arbitrarily replaced Section 69B in place of Section 69C, as mentioned in the assessment order. Therefore, he submitted that the action of the learned CIT(Appeals) tantamount to assess a new source of income not forming part of the assessment order. Learned counsel for the assessee placed reliance on the judgment of the Hon’ble Delhi High Court rendered in the case of CIT Vs. Sardari Lal & Co. (2001) 251 ITR 864. Further reliance was placed on the decision of Hon’ble Delhi High Court in the case of CIT Vs. Union Tyres (1999) 240 ITR 556 (Del). Further reliance was placed on the judgment of the Hon’ble Delhi High Court in the case of CIT Vs. Naresh Khattar (HUF) 261 ITR 664. He further placed reliance on the decision of Hon’ble Allahabad High Court rendered in the case of Smt. Sarika Jain Vs. CIT (2017) 84 Taxmann.com 64 (All) to buttress the contention that the learned CIT(Appeals) was not justified in invoking the provisions of Section 69B when the Assessing Officer

I.T.A.No.658/Del/2023

had invoked the provisions of Section 69C of the Act. Learned counsel also placed reliance on the decision of the Tribunal rendered in the case of Hari Mohan Sharma rendered in ITA No. 2953/Del/2018 to buttress the contention that the words “enhance the assessment” are confined to the assessment reached through a particular process. 4. The learned DR opposed the submissions and supported the orders of the authorities below. He submitted that merely because there was an error in writing Section 69C by the Assessing Officer, would not vitiate the entire proceedings. The Assessing Officer was dealing in substance with the subject matter relating to the investment made by the assessee in immovable property. He submitted that by mistake the Assessing Officer has stated Section 69C, that has been correctly construed to be Section 69B by the learned CIT(Appeals). He submitted that the case laws relied by the learned counsel for the assessee, are distinguishable on facts and circumstances of the present case. 5. I have heard rival submissions, perused the material available on record and gone through the orders of authorities below. The objection of the assessee regarding erroneous reference to the DVO, it was submitted that the Assessing Officer was not empowered to refer the matter to DVO, where the assessment was being made u/s 69C of the Act. In support of this contention, learned counsel for the assessee has placed reliance on various case laws. There is no dispute with regard to the fact that the Assessing Officer in the assessment order has stated addition regarding unexplained expenditure u/s 69C of the Act. The Revenue has not brought on record that mentioning of Section 69C was on account of any typographical error. It is also clear from the assessment order that the Assessing Officer had referred the issue of market value of the property in question u/s 142A of the Act. However, as per Section 142A such reference can be made to ascertain the value of any investment referred to in Section 69 or Section 69B or the value of any bullion, jewellery or any other valuable article referred 11

I.T.A.No.658/Del/2023

to in section 69A or Section 69B of the Act. There is conspicuous exclusion of Section 69C. In the present case, reference u/s 142A was not made regarding ascertaining the correct market value of the investment in property. But, it was in fact for the purpose of ascertaining expenditure which the assessee made on the purchases. I find merit into the contention of the assessee that the reference to DVO u/s 142A for the purpose of Section 69C is not valid. 6. Now coming to the question regarding action of the learned CIT(Appeals) to treat the reference u/s 142 for the purpose of Section 69B, I find merit into the contention of the assessee that there is no power conferred upon the learned CIT(Appeals) to assess a particular item under different provision of the Act what the Assessing Officer had done without giving a specific notice to the assessee regarding such action. The Revenue has not brought any material to suggest that the assessee was put to notice by the learned CIT(Appeals) before taking such action. I am of the considered view that law does not permit for such change of provision of law. As per Section 250 of the Act, the learned CIT(Appeals) is empowered to make further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report to the learned CIT(Appeals). As per Section 251(1)(a), in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that learned CIT(Appeals) could change the provision of law qua the item of which assessment was made. Therefore, in the absence of such power, learned CIT(Appeals) could not have treated the addition made u/s 69C as the addition made u/s 69B and the same is contrary to the spirit of the Act. Reliance placed by the learned counsel for the assessee on the judgment of the Hon’ble Delhi high Court, rendered in the case of CIT Vs. Aar Pee Apartments (P) Ltd. (supra), has held that from the reading of sub-section (1) of Section 142A, it is clear that legislature referred to the provisions of Section 69, 69A and 69B but specifically excluded 69C. The principle of casus omissus becomes applicable in a situation like 12

I.T.A.No.658/Del/2023

this. What is not included by legislature and rather specifically excluded, cannot be interpreted by the Court through the process of interpretation. The only remedy is to amend the provision. It is not the function of the Court to legislate or to plug the loopholes in the law. In the light of the above binding precedent the action of the learned CIT(Appeals) in treating the addition made by the Assessing Officer u/s 69C as have been made u/s 69B is contrary to the law laid down by the Hon’ble Jurisdictional High Court. I, therefore, respectfully following the decision of the Hon’ble Jurisdictional High Court in the case of CIT Vs. Aar Pee Apartments (P) Ltd. (supra), the impugned order is therefore set aside. The addition made u/s 69C on the basis of the report of the DVO by the Assessing Officer deserves to be deleted. Hence, impugned addition is hereby deleted. Grounds of appeal taken by the assessee are allowed accordingly.” 14. In view of foregoing discussion, I reach to a logical conclusion

that the complete cash book statement clearly explains the source

of cash deposit to the bank account of assessee, wherein the

assessee has not only included cash receipts as salary and capital

withdrawal from two partnership firms M/s Umang Beverages and

M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods

Pvt. Ltd. and has also reduced the amount of drawings for

household expenses. The copy of return of income of wife of

assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly

established that the other family members of assessee are also

earning and contributing towards household expenses. Therefore,

in my humble understanding the source of cash deposit during

I.T.A.No.658/Del/2023

demonetization to the bank account of assessee is properly

explained by the assessee by way of self speaking documentary

evidence and explanation. Secondly, the AO has made addition u/s

69 of the Act which pertains to unexplained investments, whereas

the assessee has not made any investment either in movable or any

immovable property during the relevant period by way of using cash

amount. The Ld.CIT(A) though has given credit of 25% of impugned

cash deposit confirming the remaining part of addition but there is

no logic of this segregation. From the relevant operative part of

first appellate order, I also note that the Ld.CIT(A) has upheld the

part addition without mentioning any charging section and impliedly

adopting section 69 of the Act in the line of assessment order.

Therefore, respectfully following the proposition rendered by the

Hon’ble Jurisdictional High Court of Allahabad in the case of Sarika

Jain (supra). I have no hesitation to hold that the addition made by

the AO by mentioning incorrect and irrelevant charging section is

not sustainable and valid being bad in law. Accordingly, grounds of

assessee are allowed and AO is directed to delete the entire

addition.

I.T.A.No.658/Del/2023

Order pronounced in the open court on 18/10/2023 Sd/- (C.M. GARG) JUDICIAL MEMBER Dated: 18.10.2023 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order

Assistant Registrar, ITAT: Delhi Benches-Delhi