TMI Blog2019 (3) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... current account of proprietary concern is verified, then no addition is required on this account . The ground of the appeal is accordingly allowed for statistical purposes. Unexplained investment u/s 69 - As alleged assessee during assessment as well as Remand proceedings had failed to furnish complete documentary evidence in support of his claim - CIT-A deleted the addition - AO is claiming that no document in support of purchase agreement of the property was produced before him in remand proceeding - in view of no documents provided in support, the Assessing Officer objected to admission of the additional evidences - HELD THAT:- CIT(A) has allowed the issue in dispute without following the provisions of Rule 46A of the Rule and, therefore, we feel it appropriate to restore the issue-in-dispute to the file of the Assessing Officer for deciding the issue afresh, with the direction to the assessee to produce all the documentary evidence relied in support of its claim, before the Assessing Officer. Though the issue of dealing with Rule 46A should have been in normal course restored to the Ld. CIT(A), but we have already restored the issue in dispute involving Ground No. 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer for ascertaining non-business purposes use of the telephone or car or conveyance on the basis of documentary evidences. The ground of the appeal is accordingly allowed for statistical purposes. Treating the sale of agricultural land resulting into long-term capital gain - whether the land which was sold by the assessee, was agricultural land in terms of the provisions of the Act? - admission of additional evidence - HELD THAT:- We agree with the observation of the learned DR that the handwritten certificate is not bearing any seal or name of the Patwari or the person who has issued the certificate. The learned counsel has also not produced the original return of income filed for the earlier years to establish that agricultural income was offered for rate purposes in those returns. The Assessing Officer objected admitting of the additional evidences, however, the Ld. CIT(A) admitted the evidences after giving his reasoning. But the Ld. CIT(A) was required to make compliance of the Rule 46A(3) of the Income Tax Rules, 1962 and provide opportunity to the Assessing Officer to rebut those evidences as held by the Hon ble Delhi High Court in the case of Manish B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 90,02,000/- on account of Long Term Capital Gain overlooking the. fact the assessee had failed to discharge his onus in respect of claim as lawful and valid and also failed to prove that the land sold was genuinely agricultural land during the assessment proceedings. Also, whether the Ld. CIT(A) was right in not appreciating the fact that merely by stating that the receipts are on account of sale proceeds of agricultural land without documentary evidence does not constitute discharge of onus on the part of assessee. The appellant reserves his right to add. Amend or alter the grounds of appeal on or before the date; the appeal is finally heard for disposal. 2. Briefly stated facts of the case are that an memorandum of understanding (MOU) relating to transactions of purchase and sale of shares of M/s SR Resorts Private Limited was seized during the course of search action under section 132 of the Income-tax Act, 1961 (in short the Act ) carried out on 19/02/2009 at the premises of Koutons group of cases. The name of the assessee was appearing as one of the 4 sellers mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal raising the grounds is reproduced above. As per record, no appeal or cross objection has been filed by the assessee. 3. Before us, the Ld. counsel of the assessee referred to Rule 27 of the ITAT Rules and raised additional ground submitting that no incriminating document was found except one MOU and that too was not signed by the assessee, thus, in absence of any incriminating material qua the assessment year under consideration, the proceedings under section 153C of the Act are invalid. The Ld. counsel also submitted that no satisfaction under section 153C of the Act was recorded by the Assessing Officer of the searched person. In support of the contention the Ld. counsel relied on the decision of the Tribunal in the case of Jasjit Singh in ITA No. 1436/Del/2012, for assessment year, 2009-10. According to the learned counsel, Sh. Jasjit Singh is one of the co-seller of MOU of the sale of the shares of M/s. SR Resort Pvt. Ltd., along with the assessee. 4. The Ld. DR objected raising of the additional ground without filing any application under Rule 27 of the ITAT Rules. The Ld. DR submitted that the assessee is required to follow the due procedure laid down in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in bank account of the proprietary concern was by way of transfer of equal amount from the saving bank account of the assessee. The source of such sum in the saving account was explained by the assessee as by way of sale of agricultural land and other office premises amounting to ₹ 1,15,27,000/- and ₹ 36,00,000/- respectively. The Ld. CIT(A) was of the view that this amount was sufficient to finance the complete addition of ₹ 11,26,672/- in the capital account of M/s Sanjay plastic industries. The Ld. CIT(A) held that no opportunity of being heard was provided to the assessee and thus the addition made was highly unjustified and arbitrary and totally against the principle of natural Justice and bad in law. The Rrevenue in its grounds has challenged this finding of the Ld. CIT(A) that addition was made in violation of principle of natural Justice. 7.1 Before us, the Ld. DR submitted that before the Assessing Officer no explanation as to the credit of ₹ 11,26,672/- in the capital account was given by the assessee. But before the Ld. CIT(A), the assessee explained for the first time that money was transferred from the saving account of the assessee, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on this account . The ground of the appeal is accordingly allowed for statistical purposes. 8. The ground No. 2 relate to addition of ₹ 35,00,918/-. During assessment proceeding, the Assessing Officer observed income of ₹ 99,082/- on sale of the property by the assessee in the year under consideration. This property was shown to have been purchased for ₹ 35,00,918/-. The Assessing Officer asked about the date of the purchase of said property and source of investment. According to the Assessing Officer, the assessee failed to explain the source of investment as well as to file documentary evidence supporting the investment. Before the Ld. CIT(A), the assessee filed details of investment along with an affidavit, claiming that the investment was made partially through bank account of proprietary concern, M/s Sanjay plastic industries, whose accounts were duly audited and audit report along with the balance sheet and profit and loss account was duly submitted before the Assessing Officer. Further, remaining part of payment was made from bank account of M/s Katyani Construction on behalf of the assessee. According to the assessee, the cheque number and amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceeding, thus, the said decision cannot be relied in the instant case. On the issue of whether addition could be made under section 69 of the Act, the learned DR submitted that the assessee had not discharged burden as regard to the source from which the investment has been made and therefore the Assessing Officer was justified in treating the investment in property as unexplained investment under section 69 of the Act. In support of the contention, the Ld. DR relied on number of decisions cited in the written submission filed including decision of the Hon ble Supreme Court in the case of R. Mallika Vs. CIT (2017) 79 taxmann.com 117 (SC). The learned DR submitted that assessee may be directed to file all the evidence before the Assessing Officer and then issue may be decided in accordance with law. 8.2 On the contrary, the learned counsel of the assessee filed a paperbook containing pages 1 to 45. He relied on the finding of the Ld. CIT(A) on the issue in dispute and submitted that the Assessing Officer ignored the explanation in support of mode and source of payment etc. filed with him in remand proceeding. The learned counsel referred to page 27 of the paper-book, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 27 of the paperbook, regarding the source and mode of the payment, the assessee submitted as under: That I had sold out the property for ₹ 3600000.00 of Preal Infrastructure which cost tome ₹ 3500918.00. The sales consideration has been recd. vide cheque No.446204 of ₹ 1600000 Ch. 446203 of ₹ 20000000/-, whereas the payment has been made through the M/s Sanjay Plastic Inds. Vide Cheque No.948131, 948130, 948129, 948128 of ₹ 465725, 465725, 400000 400000 respectively the balance payment of ₹ 1731450/- was made by the Katyani Construction on our behalf in the inter party adjustment account. The relevant documents for sales purchase has been not traceable by me despite of my best efforts. (Emphasis supplied externally by us) 8.5 On perusal of the above submission, it is clear that the assessee did not provide purchase and sale agreement in respect of this property. The ledger account of M/s Pearl Developers Ltd., also shows transaction of ₹ 17,69,468/- as against claim of sale proceed of ₹ 36,00,000/-. In view of no documents provided in support, the Assessing Officer objected to admission of the additional evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any witness in rebuttal of the additional evidence produced by the appellant. 8.7 The Hon ble Delhi High Court in the case of CIT Vs Manish Buildwell Private Limited (245 CTR 397) (Delhi) has also held that after admitting the additional evidences by the Ld. CIT(A), the Assessing Officer should be provided opportunity to rebut those additional evidences. 8.8 In view of the above, we are of the opinion that the Ld. CIT(A) has allowed the issue in dispute without following the provisions of Rule 46A of the Rule and, therefore, we feel it appropriate to restore the issue-in-dispute to the file of the Assessing Officer for deciding the issue afresh, with the direction to the assessee to produce all the documentary evidence relied in support of its claim, before the Assessing Officer. Though the issue of dealing with Rule 46A should have been in normal course restored to the Ld. CIT(A), but we have already restored the issue in dispute involving Ground No. 1 to the Assessing Officer, thus to avoid proceedings at multiple level, we have restored this issue also to the file of the Assessing Officer. The ground of the appeal is accordingly allowed for statistical purposes. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst business income. On page 35 of the paper-book, the list of sundry debtors amounting to ₹ 39,61,009/- is appearing. The said list include Reliance LIC Ltd. and Katyani Construction Company. The Assessing Officer has questioned particularly the amount of ₹ 31,00,000/- advanced to Reliance LIC Company Limited and ₹ 10,19,468/- advanced to Katyani Construction. Despite the specific queries raised, the assessee has not submitted as for what purposes these advances were made, whether it was advanced for purchase or whether any sales were made to these parties and payment from them was due. During the first appellate proceeding also, no such details ware provided. Even before us, also except the claim that borrowed funds were utilized for the purpose of the business, no detail about the money advanced to Reliance LIC Company Limited and M/s Katyani Construction company were provided. On the perusal of the balance sheet available on page 32 of the paperbook, we find that assessee has taken secured loan from Punjab and Sindh Bank, the closing balance of which is ₹ 4,51,255/- and there are unsecured loan of ₹ 15,72,100/-. As it is not clear from the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the onus is on the assessee to produce the desired documents of details of use of the vehicles or telephone, maintained in day-to-day course, otherwise only course left would be to estimate the disallowance on the basis of a small sample for a week or a month and then extrapolate the same for the entire year. Since we have already restored other grounds of the appeal to the Assessing Officer for deciding a fresh, we feel it appropriate to restore this issue also to the file of the Assessing Officer for ascertaining non-business purposes use of the telephone or car or conveyance on the basis of documentary evidences. The ground of the appeal is accordingly allowed for statistical purposes. 10. The next ground relate to addition of ₹ 90,02,000/-made by the Assessing Officer treating the sale of agricultural land resulting into long-term capital gain. The Assessing Officer observed sale of property of ₹ 1,15,27,000/- which was acquired by the assessee at ₹ 25,25,000/- resulting into capital gains of ₹ 90,02,000/-, which the assessee claimed as exempt being sale consideration received on sale of agricultural land. The Assessing Officer has noted that sale de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned counsel relied on the finding of the Ld. CIT(A) and submitted that all the documents were duly filed before the Assessing Officer in assessment proceeding as well as remand proceeding and therefore the Ld. CIT(A) is justified in deleting the addition. 10.3 We have heard the rival submissions and perused the relevant material on record. The issue in dispute in the ground raised is whether the land which was sold by the assessee, was agricultural land in terms of the provisions of the Act. The assessee was required to prove that land was situated beyond 8 kms. from the municipal limit and agricultural activity was carried out by the assessee on the said land. Before us, the assessee has referred pages 43 to 45 of the paperbook, which are handwritten certificate issued by the Patwari (Land Revenue Authority). We agree with the observation of the learned DR that the handwritten certificate is not bearing any seal or name of the Patwari or the person who has issued the certificate. The learned counsel has also not produced the original return of income filed for the earlier years to establish that agricultural income was offered for rate purposes in those returns. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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