TMI Blog2023 (10) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... en applied to aforesaid provisions applicable to DRP prohibits such directions of verification of the whole of the case of an assessee without any element of guidance for the Ld. AO. There was no liberty for further enquiry the Ld. AO has merely reasserted his opinion without any verification of the material and submissions which Ld. DRP had considered were relevant to settle the query raised in assessment. The verification is process of examination of truth by proof and a general direction to verify without liberty of further enquiry on the issue is of no help to Ld. AO. Thus the Bench is inclined to allow ground in favor of the assessee and allow the appeal for statistical purposes. - Sh. G.S.Pannu, Hon ble President And Sh. Anubhav Sharma, Judicial Member For the Appellant : S/Sh. Ruchesh Sinha, Adv. Tarun Rohatgi, CA For the Revenue : Sh. Vizay B. Vasanta, CIT-DR ORDER PER ANUBHAV SHARMA, JM: The appeal has been filed by assessee against the assessment order dated 25.01.2023 for assessment year 2016-17 passed by Circle Int. Tax, 1(1)(2), u/s 147 r.w.s. 144C(13) of the Income Tax Act, 1961 in pursuant to the directions of Dispute Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (d) Explain the source of investment along with documentary evidences (iv) Provide the details of payment made to Non-Resident and details of TDS deducted thereon along with relevant documents to substan tiate your claim. 4. Ld. AO observed that assessee has not complied to the notice u/s 142(1) and not submitted any details called for vide said notice. Subsequently, the assessee was issued with show cause notice dated 02.03.2022, the relevant extract of the same are as under- As per the information available with the department you have been involved in following transactions during the FY 2015-16 relevant to AY 2016-17- (a) Payment made in respect of transfer of immovable property valued at Rs. 4,91,58, 190/-. (b) Payment in respect of purchase of mutual funds of Rs 1,23.49,151/- (c) Payment to Non-resident of Rs 1,60,315/-. 1. Statutory notice u/s 142/1) of the IT Act, 1961 dated 24.02.2022 was issued through ITBA portal to file requisite documents/evidences in respect of source of income/investment made during the year. However, you choose not to furnish the details and documents as per requirement of the statutory notice issued in you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from which funds were transferred to NRE account and further used for investment. AR of assessee has submitted that assessee is a high net worth assessee, further assessee has not submitted copy of Income Tax Return filed aboard to corroborate the investment made. In view of the same the genuineness and source of funds were held to have remained unexplained and that provisions of Section 69 of the Act are attracted. 7. The assessee raised objections with the Ld. DRP with respect to same. Ld. DRP has directed the Ld. AO to verify the assessee's contention in light of submission including the assessee's rejoinder by passing a speaking and reasoned order vide its order dated 22.12.2022. 8. Thereafter Ld. AO held in the final assessment order as follows; Thereby kindly note during the assessment proceedings, the assessee has not given any details of property purchased such as copy of purchase deed/agreement/payment schedule etc. Further, in course of assessment proceedings assessee mentioned that Home loan was obtained from ICICI Banks to purchase said property, but assessee has not submitted the Loan Sanction Letter from Bank and any other payment made thereon in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clearly depicting therein. 7. That both the DRP and the Learned ACIT have grossly erred in holding and proceeding on the assumption that the evidence filed by the Assessee before the DRP is additional evidence, whereas the fact is that all these document were duly filed/uploaded by the Appellant, but were ignored while giving the directions as well as while passing the order. 8. That in any case, the Learned ACIT was not justified in holding that the investment made during the year in Immovable Property of Rs. 4,91,58,190/- was unexplained especially when Esanction letter, details of property purchased and amount disbursed by the Bank were duly placed on record and even otherwise could have been called by invoking the inherent power bestowed with the AO 9. That the learned ACIT has wrongly and erroneously noted that the Assessee has not filed any details regarding investment in Mutual Funds of Rs. 1,23,49,151/- 9.1 That the Learned ACIT failed to appreciate that the investment in Mutual Funds was not unexplained and that these were purchased out of the bank account of the Assessee and the major source being redemption of Mutual Funds and capital gains, the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the PB is the copy of From 35 filed before Ld. DRP. In this at page no 5 to 8 of the paper book assessee has placed on record the details of responses he had submitted to Ld. AO. Perusal of the same shows assessee had given a detailed account of the investment in purchase of the property through ICICI bank home loan. The disbursement letter of ICICI bank is mentioned as attached. At page no. 81 of the paper book is a disbursement schedule from ICICI bank. And at Page no. 72 to 78 is the assessee s ledger account with Experion Developers Pvt. Ltd. Same were all part of the submissions of assessee dated 2/3/22 and 4/3/22 available at page no 51 to 85 of the PB. 13. It appears that the Ld. AO has fallen in error in not examining and appreciating the material before him in correct perspective at time of passing the final order, as his powers were restricted by the Ld. DRP with order that the AO shall not conduct any fresh inquiry in this regard; the verification shall be made on the basis of documents/submissions available on the record. 14. On the contrary, the Bench is of firm view that Ld. DRP was somehow under wrong impression about absence of powers with DRP for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was raised or not by the eligible assessee. 16. The aforesaid Sub Section (5) when Read with Sub Section (7) and (8) makes it very clear that DRP could not have issued direction for verification in the manner it has done in the present case. Ld. DRP is supposed to examine the material before it and directions issued by way of guidance to Ld. AO under sub section (5) should be categorical, specific and comprehensive. 17. In the case in hand, the direction for verification as issued were colourable and the Latin maxim Quando aliquid prohibetur ex directo, prohibetur et per obliquum , which means you cannot do indirectly what you cannot do directly when applied to aforesaid provisions applicable to DRP prohibits such directions of verification of the whole of the case of an assessee without any element of guidance for the Ld. AO. 18. In fact as there was no liberty for further enquiry the Ld. AO has merely reasserted his opinion without any verification of the material and submissions which Ld. DRP had considered were relevant to settle the query raised in assessment. The verification is process of examination of truth by proof and a general direction to verify without ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
