TMI Blog2021 (8) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... R 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 assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as received an amount of ₹ 23,00,000/- in cash from Shri Navin C. Punjani, Nisha Navin Punjani and Chirag Navin Punjani over and above the cheques of ₹ 19,75,000/- as mentioned in the registered sale deed executed on 12-11-2012 in respect of sale of shop no. 11, Hari Bhuvan Co-op. Hsg. Soc., Zaveri Road, Mulund (W), Mumbai - 400 080. As the information received from the DDIT(Inv.), Unit-VII(3) that Shri Navin C. Punjani, Nisha Navin Punjani and Chirag Navin Pujani have made the payments of ₹ 23,00,000/- in cash and Navin C. Punjani, is assessed with this charge and to verify the transactions of immovable property made by the assessee, the assessment for the assessment year 2013-14 needs to be re-opened. I, therefore, have reason to believe that the assessment has escaped income to the extent of ₹ 23,00,000/- in the case of navin C. Punjani, within the meaning of section 147 of the I.T. Act, for the assessment year 2013-14. 3.1. The assessee is a proprietor of M/s. Pushpam Store wherein he sells ladies dress materials and clothes. The assessee was having 1/3rd share of shop at Haribhuvan which was purchased for ₹ 6,98,040/- (being assessee s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he had not paid any cash to Shri Jignesh Jayantilal Doshi over and above the cheque payment for purchase of property ; that he knows Shri Jignesh Jayantilal Doshi as Shri Jignesh Jayantilal Doshi was doing business opposite to his shop; and Shri Jignesh Jayantilal Doshi was introduced to assessee through his friend who is an estate agent by name Shri Bipin Thakkar. The ld. AO completely disregarded the entire contentions of the assessee and merely by placing reliance on the statement recorded from Shri Jignesh Jayantilal Doshi and in view of the fact that Shri Jignesh Jayantilal Doshi did not respond to the summons issued by the ld. AO, proceeded to treat 50% (1/2 share) of ₹ 23,00,000/- as unexplained income of the assessee and added the same in the hands of the assessee, a sum of ₹ 11,50,000/-. 3.2. We find that ld. CIT(A) had in principle upheld the addition made by the ld. AO but by making the minor modification by stating that the addition should have made by the ld. AO u/s.69 of the Act instead of Section 68 of the Act. The ld. CIT(A) also observed that the mere fact that the cash has been seized from the seller is more than sufficient to prove that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 days prior to the date of registered sale deed. As far as the assessee is concerned, he alongwith his relatives had purchased the entire property for ₹ 19,75,000/- as against the market value as per ready reckoner rates at ₹ 18,44,189/- which figure is mentioned in the written submission of the ld. AR and the same is considered as a statement made from the Bar. No contrary evidence has been brought on record by the ld. DR in this regard. However, 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. We hold that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- as mentioned in the registered sale deed executed on 12-11-2012 in respect of sale of shop no.11, Hari Bhuvan Co-op. Hsg. Soc., Zaveri Road, Mulund (W), Mumbai ~ 400 080. As the information received from the DDIT(Inv.), Unit-VII(3) that Shri Navin C. Punjani, Nisha Navin Punjani, Chiiag Navin Pujani have made the payments of ₹ 23,00,000/- in cash and Navin C. Punjani, is assessed with this change and to verify the transactions of immovable property made by the assessee, the assessment for the assessment year 2013-14 needs to be re-opened. I, therefore, have reason to believe that the assessment has escaped income to the extent of ₹ 23,00,000/- in the case of Navin C. Punjani within the meaning of section 147 of the I.T. Act, for the assessment year 2013-14. 5.2. The ld. AO sought to add 50% (1/2) share in the hands of Ms. Nisha N Punjani towards on-money payment for purchase of property in the sum of ₹ 11,50,000/- for the same reasons adduced in the case of Shri Navin C Punjani. This was also upheld by the ld. CIT(A) on the same reasons as was decided in the case of Shri Navin C Punjani. 5.3. From the perusal of the reasons recorded in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced. 5.4. Respectfully following the aforesaid decision, we hold that the reasons recorded by the ld. AO for reopening the assessment itself does not contemplate any formation of belief to concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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