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2021 (8) TMI 205 - AT - Income TaxAddition u/s.69 or 68 - assessee has paid on-money towards purchase of property to the seller - HELD THAT:- As per the statement given by the assessee before the ld. AO during the course of assessment proceedings, Shri Jignesh Jayantilal Doshi is running his business in the premises which is opposite to the shop of the assessee. Hence, there may be a reasonable belief that assessee or his relatives could have influenced Shri Jignesh Jayantilal Doshi (seller) for not responding to the summons issued by the ld. AO. Preponderance of Probability Theory would come into play in the instant case. Though this observation is made only as a passing remark, we would like to address the entire issue in dispute on merits of the addition in the peculiar facts and circumstances of the instant case instead of addressing on the legal arguments advanced by the ld. AR before us. We would like to make it clear that the decision rendered in this case shall not be considered as a binding precedent for other cases as the same is peculiar to the facts of the instant case alone - DR pointed before us that the seller has conceded the cash portion of ₹ 23,00,000/- as part of sale consideration of property and had paid capital gains tax in his returns. Hence, it could be reasonably inferred that the said cash of ₹ 23,00,000/- represents on money payments made by the assessee to the seller for purchase of property. Addition towards unexplained cash payments should be made in the hands of the assessee. Admittedly, the assessee Shri Navin C Punjani is only owner of 1/3rd share in the property purchased. This fact is not disputed at all. Hence, any addition that could be made in the hands of the assessee on account of unexplained investment made on purchase of property could only be to the extent of 1/3rd share and not 1/2 share as made by the Revenue in the instant case. We direct the ld. AO accordingly. Accordingly, the grounds raised by the assessee in the case of Shri Navin C Punjani are partly allowed. Reopening of assessment u/s 147 - Unexplained investment u/s.69 - Recorded by the ld. AO in the case of Ms. Nisha N Punjani nowhere mentions that the ld. AO while recording reasons had a reasonable belief that her income had escaped assessment. Hence no addition per se could be made in the hands of Ms. Nisha N Punjani - we hold that the reasons recorded by the ld. AO for reopening the assessment itself does not contemplate any formation of belief to conclude that income of Ms. Nisha N Punjani had escaped assessment. Accordingly, re-assessment made herein in the hands of Ms. Nisha N Punjani is hereby quashed. In the result, appeal of the assessee is allowed.
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