SUDESH KUMAR(THROUGH LEGAL HEIR ASHISH KUMAR),NEW DELHI vs. DCIT, CENTRAL CIRCLE-3, NEW DELHI

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ITA 9876/DEL/2019Status: DisposedITAT Delhi30 June 2023AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 9,70,000/- related to the property sale should be deleted as the seized material did not prove the cash payment. For the property purchase, the Tribunal found that the assessee had discharged the burden of proving the source of investment, and the addition of Rs. 23,18,000/- was directed to be deleted.

What were the facts?

The assessee appealed against additions made by the AO and sustained by the CIT(A) concerning the sale of a property and the purchase of another property. The additions related to alleged under-valuation of a sale and unexplained cash payments for a purchase.

What were the issues?

Whether additions made on account of alleged under-valuation in property sale and unexplained cash payments for property purchase are justified.

Which sections of the Income-tax Act were involved?

Section 153A

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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

Before: Dr. B. R. R. KumarMs. Astha Chandra

Hearing: 03.04.2023Pronounced: 30.06.2023

Heard together (2 matters)

ITA No. 9875/Del/2019
ITA No. 9876/Del/2019

Read from the judgment's own cause title. This page is filed under one of them.

ORDER

Per Dr. B. R. R. Kumar, Accountant Member:

1.

1. The present appeals have been filed by the assessee against the orders of ld. CIT(A)-23, New Delhi dated 31.10.2019.

2.

In the assessee has raised the following grounds of appeal:

“1. That on the facts and circumstances of the case and in law, the order passed by CIT (A)-23, New Delhi (hereinafter referred to as CIT (A)), is bad in law. 2. That on the facts and circumstances of the case and in law the CIT (A) was not justified in sustaining the addition made by the AO aggregating to Rs. 9,70,000/- by erroneously holding that Rs. 16,70,000/- was paid in cash to Mrs. Shelly Vashisth by the assessee (including Rs. 7,00,000/- received from Mrs. Lalita) as 40% share for 2 & 9876/Del/2019 Sudesh Kumar investment in property located at 2/30 Roop Nagar, Delhi.

3. That on the facts and circumstances of the case and in law, the CIT (A) has erred in confirming the addition of Rs. 16,70,000/- minus Rs. 7,00,000/- i.e. Rs. 9,70,000/- (Being 40% share of alleged under valuation in sale of property) made in the assessment order by alleging that property located at 2/30 Roop Nagar, Delhi was sold for 70,00,000/- as against the sale consideration of Rs. 28,25,000/- declared by the assessee.

4.

That on the facts and circumstances of the case and in law, the CIT (A) was not justified in confirming the actions of AO and in not referring the matter to the DVO for the purpose of determining fair market value of the property as due to distress sale the property was actually sold for Rs. 28,75,000/- and not Rs. 70,00,000/-.

5. That on the facts and circumstances of the case and in law, the CIT(A) has erred confirming the actions of AO in making additions in a non- abated assessment completed u/s 153A in the absence of any incriminating material in view of the decision laid down by the jurisdictional high court in the case of CIT vs. Kabul Chawla 61 Taxmann.com 412.”

3.

In , the assessee has raised the following grounds of appeal:

“1. That on the facts and circumstances of the case and in law, the order passed by CIT (A)-23, New Delhi (hereinafter referred to as CIT (A)), is bad in law.

2. That on the facts and circumstances of the case and in law the CIT (A) was not justified in sustaining the addition made by the AO aggregating to Rs. 23,18,000/- on account of alleged failure on part of assessee in explaining the source of payment of Rs. 23,18,000/- made for purchase of property from Shefali Aggarwal.

3. That on the facts and circumstances of the case and in law, the CIT (A) has erred in upholding the action of AO in not taking cognizance of the fact that out of Rs. 23,18,000/-, Rs. 10,00,000/- was paid by cheque. “

3 & 9876/Del/2019 Sudesh Kumar A.Y. 2014-15 Cash Paid: 4. During search initiated on 02.05.2016 at 248, Gujrawala Town, the residence of Sh. Sudesh Kumar documents annexurised at pages 48-56 of Annexure-1 (Team-1) relate to the- purchase of the property no. 2/30, Roop Nagar, Delhi jointly by Shri Arvind Manchanda and Shri Sudesh Kumar, in the ratio of 60% and 40%.

5.

As per the document seized as pages 29-33 of Annexure 1, by an agreement this property was agreed to be sold by the assessee at a sale consideration of Rs. 70 lakhs to Smt. Lalita w/o Late Shri Sudesh Kumar. An amount of Rs. 9 lakhs had been paid as an advance for this property as per the receipt dated 30.08.2013 (page 29, annex 1). An amount of Rs. 7 lakhs out of this was paid in cash. As per deed executed & seized at page 48-56, it was found that this property was sold for Rs. 28,25,000/- to Shri Sudesh Kumar ( 40% of undivided share) and Shri Arvind Manchanda (60% undivided share) during the F.Y. 2013-14.

6.

The seized material proves that Rs. 7 lakhs was paid in cash by Smt. Lalita. However, there was no evidence that an amount of Rs. 41,75,000/- was paid to Smt. Shelly Vashisth in cash by the two vendee i.e. Shri Sudesh Kumar (since deceased) and Shri Arvind Manchanda. Hence, relying on the judgment of Hon’ble Supreme Court in the case of K.P. Varghese Vs. ITO (131 ITR 597), the addition of Rs.9,70,000/- made by the AO is hereby directed to be deleted.

7.

During the search at the premises of the assessee, a document “agreement to sale & purchase” dated 10.10.2015 was found. As per the agreement Smt. Shefali Aggarwal wife of Sh. Rameshwar Das Aggarwal received Rs.70,00,000/- in cash from two persons namely, Sh. Satish Kumar and Sh. Parvesh Kumar. This fact has not been disputed in Assessment Order (para 4). The addition has been made in the hands of the assessee (since deceased). The assessee has also explained the sources of the availability of the cash from various sources namely gifts as per the returns, confirmations, cash as per the books, interest income, an amount received from the mother & brothers. The details are as under:

1.

cash withdrawn from books of wife (Smt. Rs.13, 00,000/- Lalita) F.Y. 2013-14 2. cash withdrawn from books of wife (Smt. Rs.21, 00,000/- Lalita) F.Y. 2014-15 3. Cash available with appellant as per books Rs.11, 82,000/- 4. Gift from son (Sh. Ashish Kumar) Rs.7,00,000/- 5. Interest received from parties Rs.6,00,000/- 6. Advance forfeited form Sh. Rajesh Rs.6,00,000/- 7. Cash contributed by Brother (Sh. Satish Rs.2,50,000/- Kumar) 8. Cash contributed by Mother (Smt. Ram Pyari) Rs.2,50,000/- 9. Others Rs. 18,000/- 10. Cheque paid by Shri Pravesh Kumar Rs. 10,00,000/- Total Rs. 80,00,000/-

5 & 9876/Del/2019 Sudesh Kumar 8. The AO made addition of Rs.23,18,000/- out of Rs.70,00,000/-. On going through the evidences filed by the assessee, we hold that the assessee has discharged his burden of proving the source of investment and hence, the addition made by the AO of Rs.23,18,000/- is directed to be deleted.

9.

In the result, both the appeals of the assessee are allowed. Order Pronounced in the Open Court on 30/06/2023.

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