KAILASH MITTAL,NEW DELHI vs. ACIT CENTRAL CIRCLE-20, NEW DELHI

This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-27, New Delhi, dated 30.09.2020, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:

“1. Under the facts and circumstances of the case, the assessment order passed by the Ld. AO is illegal and bad in law.

3. That the Ld. CIT(A) grossly erred in law in upholding additions of Rs. 3,32,313/- to the income of the assesse on his own presumptions without allowing any opportunity of being heard in this regard.

6. That the addition of Rs. 3,32,313/- is not tenable under the law and facts of the case as the assessee has duly explained the source of said expenditure.

7. That the appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or during the hearing.”

2. By way of the above grounds, the assessee has challenged the action of the learned CIT(A) in confirming the addition of Rs. 3,32,313/- and also challenging such addition on the ground that there was no incriminating material related to this expenditure.

The assessee’s residential premises at 151-152, Deepali Enclave Pitampura, New Delhi was also covered in the search operation carried out u/s 132(1) of the Income-tax Act, 1961, hereinafter referred to as the “Act”. Thereafter the Assessing Officer issued a notice u/s 153A of the Act on 29.3.2019. In response thereof the assessee filed return of income declaring income at Rs. 9,39,600/- on 29.08.2019. Thereafter, the Assessing Officer proceeded to frame the impugned assessment. Thereby, he made addition of Rs. 9,28,199/- in respect of the investment made in cash. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions restricted the addition to the extent of Rs. 3,32,313/-. Aggrieved by this the assessee is in appeal before this Tribunal.

4. The learned counsel for the assessee vehemently argued that the authorities below were not justified in making and sustaining the addition as the assessee had placed all evidences related to such expenditure. He submitted that due to typographical error wrong year was mentioned before the Investigation Wing of the Revenue. He submitted that there was no incriminating material. Therefore, the impugned addition could not have been sustained. He submitted that the sufficient opportunity was not provided to the assessee. Hence, there is miscarriage of justice.

5. On the other hand, learned CIT(DR) opposed the submissions and supported the orders of the authorities below. He submitted that the objection of the assessee is unfounded as the investments were made in cash and the assessee could not explain the source of such cash. He submitted that sufficient opportunity was given to the assessee. He took us through the impugned order and submitted that the fact that learned CIT(Appeals) had considered the evidences as placed before him is a testimony that sufficient opportunity was afforded to the assessee. The assessee grossly failed to support the veracity of the claim made before lower authorities.

“6. Regarding the cash expenses of Rs. 3,32,313/-, the appellant had explained that these cash expenses have been made on 2.12.2017 and in the chart given to the Investigation wing in post search proceedings had inadvertent error of including this amount in the F.Y. 2016-17 instead of 2017-18. It is observed that the construction of the house was completed in FY 2016-17 as no other expense either in cash or cheque had been claimed in any of the partners beyond this period. The appellant had initially given the year of spend in FY 2016-17 and now is claiming that it had made the cash expense of Rs 3,32,313 in FY 2017-18. It is strange that the appellant does not have any evidence of making this expense, does not remember the nature of expense , but remembers the exact date of making this cash expense. To my opinion, the appellant had given correct information to the Investigation Wing, but later in the absence of much cash in hand available with family members, she had tried to explain it from the available cash in hand of FY 2017-18. This is clearly an afterthought as this isolated expense had been claimed in FY 2017-18 without any description of construction expense after completion of the house. In these facts and circumstances of the case, the plea of the appellant cannot be accepted and it is held that this expenditure was made by the appellant in FY 2016-17 only, as per the chart submitted in post search proceedings. However, in the absence of any source of cash available, this amount is held to be paid out of undisclosed sources of income.

7. The above finding on fact clearly mentioned that the assessee failed to establish the source of cash. Moreover, the assessee did not file any representation before the Revenue authorities regarding typographical error. It is evident from the records that the learned CIT(Appeals) has given a finding about bank withdrawal and and deleted part of addition after considering the same. Thereby, he partly allowed the appeal of the assessee. It is not the case where the learned CIT(Appeals) sustained the addition without considering the material available on record. Therefore, looking to the facts of the present case at this stage the assessee has not made out any case for deletion of impugned addition, hence no interference is called for in the order of learned CIT(Appeals). Grounds raised in this appeal are dismissed.

Order pronounced in open court on 27th April, 2023.