What did the Tribunal hold?

The Tribunal deleted the addition of Rs. 5 lakhs towards initial payment, finding the assessee's explanation plausible in the absence of rebuttal. However, the addition of Rs. 3.09 lakhs for stamp duty was confirmed due to lack of satisfactory explanation.

The Assessing Officer added Rs. 33,00,500/- to the assessee's income as undisclosed sources related to property purchase. The CIT(A) confirmed an addition of Rs. 8,09,000/- towards initial payment and stamp duty charges.

What were the issues?

Whether the initial payment and stamp duty charges for a property purchase can be treated as income from undisclosed sources when the assessee provides a partial explanation.

Shri Bhupendra Ranchhodbhai… vs ITO | ITAT Ahmedabad 2017

Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD

Before: SHRI S.S. GODARA & SHRI PRADIP KUMAR KEDIA

For Respondent: Shri Pradeep Kumar Majumdar,Sr.DR

Hearing: 01/05/2017

आदेश / O R D E R PER PRADIP KUMAR KEDIA, AM: The captioned appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-XIV, Ahmedabad [CIT(A) in short] dated 16/12/2013 for the Assessment Year (AY) 2009-10.

ITA No. 696/Ahd/2014 Bhupendra Ranchhodbhai Thakkar vs. ITO Asst.Year – 2009-10 - 2 - 2. The short controversy in the present appeal is towards addtion of Rs.8.09 lakhs as income from undisclosed sources in the hands of the assessee.

The assessee is an individual and derives income from commission etc. The return of income for AY 2009-10 was filed at Rs.1,51,097/-. The case was selected for scrutiny assessment. In the course of the assessment proceedings, the Assessing Officer (AO) noticed that the AIR information showed that assessee had purchased immovable property for Rs.62,92,000/- on 17/10/2008 being Plot No.16 at Neelkanth Greens, Shilaj, Ahmedabad jointly with his brother Shri Rajesh Thakkar. The source of the aforesaid investment was enquired into. The assessee explained that he has received Rs.58 lakhs towards sale agreement of this very property from one Shri M.A.Parmar. The AO however did not find the explanation towards source of investment to be satisfactory. Accordingly, an addition of Rs.33,00,500/- being 50% of the cost of property Rs.66,01,000/- including stamp duty was assessed in the hands of the assessee.

In first appeal, the CIT(A) however subscribed to the explanation of the assessee towards receipt of funds from Shri M.A.Parmar to the extent of Rs.58 lakhs. Nonetheless, the source towards the differential amount of Rs.8,09,000/- being Rs.5 lacs towards initial payment and

ITA No. 696/Ahd/2014 Bhupendra Ranchhodbhai Thakkar vs. ITO Asst.Year – 2009-10 - 3 - Rs.3.09 lakhs incurred towards stamp duty charges were not accepted as satisfactory and accordingly confirmed. 5. Aggrieved, the assessee is in appeal before the Tribunal.

The Ld.AR for the assessee Shri S.N.Divatia submitted that initial payment of Rs.5 lakhs on 15/04/2008 is out of own resources in the hands of the assessee. However, as regards stamp duty charges of Rs.3.09 lakhs, the Ld.AR drew blank and could not give any firm reply.

The Ld.DR, on the other hand, relied on the order of the CIT(A).

We have carefully considered the rival submissions. We find that the assessee, at the first instance, before the AO came out with the explanation that initial payment of Rs.5 lakhs in April-2008 is out of its own resources. We do not find any rebuttal from the Revenue on this fact. We also find that explanation of the assessee is plausible in the wake of the socio-economic environment as prevalent in the country where some cash is normally preferred to be kept in custody for immediate needs. In the absence of any rebuttal, we find no reason to deny the benefit of doubt to the assessee. Accordingly, unexplained income to the extent of Rs.5 lakhs stands deleted. However, in the absence of any satisfactory explanation towards source of payment of

ITA No. 696/Ahd/2014 Bhupendra Ranchhodbhai Thakkar vs. ITO Asst.Year – 2009-10 - 4 -

stamp duty Rs.3.09 lakhs, we decline to interfere with the order of the CIT(A). 9. In the result, appeal of the assessee is partly allowed. This Order pronounced in Open Court on 19 / 05/2017

Sd/- Sd/- (एस.एस.गोदारा) (�द�प कुमार के�डया) �या�यक सद�य लेखा सद�य ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 19/ 05 /2017 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-XIV, Ahmedabad �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation .. 18.5.17 (dictation-pad 8- pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member … 18.5.17 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S…….19.5.17 7. Date on which the file goes to the Bench Clerk…………………19.5.17 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………

SHRI BHUPENDRA RANCHHODBHAI THAKKAR,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-7(1),

What did the Tribunal hold?

What were the facts?

What were the issues?

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