Vijay Mohan Gupta v. Income-tax Officer, Ward-32(3), New Delhi
[Citation -2019-LL-0822-29]

Citation 2019-LL-0822-29
Appellant Name Vijay Mohan Gupta
Respondent Name Income-tax Officer, Ward-32(3), New Delhi
Court ITAT-Delhi
Relevant Act Income-tax
Date of Order 22/08/2019
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags unexplained investment • computation of income • stamp duty authority • substantial evidence • unexplained credit • declared income • issue of notice • cash deposited • loan creditor • purchase deed • undisclosed source • expenditure incurred
Bot Summary: In sustaining the addition of Rs. 7,00,000/- as unexplained investment in purchase land relying on the statement of some of the sellers of land to the assessee. In sustaining addition of Rs. 4,08,000/- being cash deposited in the bank account of lender, out of total of Rs. 12,93,200/- borrowed by assessee through bank transaction. The aforesaid Ikrarnama was abandoned and did not result in transfer of land between the two co-owners and the aforesaid Mr. Bhupinder Singh; the AO took note of the aforesaid Ikrarnama while completing the assessment vide Assessment Order U/s 147 read with section 143(3) of I.T. Act passed on 31/03/2014 wherein the following additions were made: a. Addition of Rs. 65,67,000/- on account of assessee 1/3rd share in the payment of Rs. 1,97,00,000/- made for the purchase of land at Tipra, Kalka, Panchkula, Haryana treating the same as unexplained investment in the hands of the assessee and added as income from undisclosed sources to the declared income of the assessee. Page 2 of 14 b. Addition of Rs. 12,93,200/- on account of unexplained credit in the hands of the assessee and added as income from undisclosed sources to the declared income of the assessee. Out of total of Rs. 65,67,000/- and addition of Rs. 7,00,000/-; an addition of Rs. 4,08,000/- out of the aforesaid addition of Rs. 12,93,200/-; and the entire aforesaid additions of Rs. 3,24,000/- were sustained by the Ld. CIT(A). 2002-03, 03-04, 04-05, 05-06, 06-07, 07-08 and 08-09 were also filed from assessee s side during the course of appellate proceedings in ITAT. At the time of hearing before us, the Ld. Counsel for assessee reiterated the submissions made on behalf of the Assessee before the Ld. CIT(A) which have been duly incorporated in the aforesaid impugned order dated 16.08.2016 of Ld. CIT(A). The assessee had borrowed the total amount of Rs. 12,93,200/- out of which the Ld. CIT(A) has confirmed the addition of Rs. 4,08,000/-.


IN INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G : NEW DELHI) BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No:- 5754/Del/2016 (Assessment Year: 2007-08) Shri Vijay Mohan Gupta, Income Tax Officer, New Delhi. Vs. Ward- 32(3), New Delhi. PAN No: AANPG6772G APPELLANT RESPONDENT Assessee by : Shri Manoj Patawari, CA Revenue by : Shri N.K. Bansal, Sr. DR ORDER PER ANADEE NATH MISSHRA, AM (A) This appeal by Assessee is filed against impugned appellate order of Learned Commissioner of Income Tax (Appeals)-18, New Delhi, [ Ld. CIT(A) , for short], dated 16.08.2016 for Assessment Year 2007-08. grounds of appeal are as under: Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts: 1. In sustaining addition of Rs. 7,00,000/- as unexplained investment in purchase land relying on statement of some of sellers of land to assessee. 2. In sustaining addition of Rs. 4,08,000/- being cash deposited in bank account of lender, out of total of Rs. 12,93,200/- borrowed by assessee through bank transaction. Page 1 of 14 3. In sustaining addition of Rs. 3,24,000/- on account of low drawings without any substantial evidence in hands. Assessee craves leave of this Hon ble Tribunal to add or amend aforesaid grounds at time of hearing or before disposal of appeal. (B) Original return was filed on 01/08/2007 declaring income of Rs. 2,13,240/-. Proceedings U/s 147 read with section 148 of Income Tax Act, 1961 ( I.T. Act , for short) were initiated by Assessing Officer ( AO , for short), by issue of notice dated 07/03/2013 U/s 148 of I.T. Act on basis of one Ikrarnama (agreement) between two co-owners of land (vendors) and one Mr. Bhupinder Singh; found during search at premises of third party. In aforesaid Ikrarnama (agreement) agreed consideration for piece of land was shown at figure higher than consideration for which subsequently piece of land was transferred to assessee. Although, aforesaid Ikrarnama (agreement to sell) was abandoned and did not result in transfer of land between two co-owners and aforesaid Mr. Bhupinder Singh; AO took note of aforesaid Ikrarnama (agreement to sell) while completing assessment vide Assessment Order U/s 147 read with section 143(3) of I.T. Act passed on 31/03/2014 wherein following additions were made: a. Addition of Rs. 65,67,000/- on account of assessee 1/3rd share in payment of Rs. 1,97,00,000/- made for purchase of land at Tipra, Kalka, Panchkula, Haryana treating same as unexplained investment in hands of assessee and added as income from undisclosed sources to declared income of assessee. Page 2 of 14 b. Addition of Rs. 12,93,200/- on account of unexplained credit in hands of assessee and added as income from undisclosed sources to declared income of assessee. c. Addition of Rs. 3,24,000/-, on account of income from undisclosed sources is made to declared income of assessee, for personal and for contribution to household expenses. (B.1) Aggrieved by above stated additions, Assessee filed appeal before Learned Commissioner of Income Tax (Appeals)-18, New Delhi. Vide aforesaid impugned appellate order dated 16.08.2016 of Ld. CIT(A); assessee was allowed partial relief. However, out of total of Rs. 65,67,000/- and addition of Rs. 7,00,000/-; addition of Rs. 4,08,000/- out of aforesaid addition of Rs. 12,93,200/-; and entire aforesaid additions of Rs. 3,24,000/- were sustained by Ld. CIT(A). Still aggrieved, assessee has filed this present appeal. (C) In course of appellate proceedings in Income Tax Appellate Tribunal ( ITAT , for short), following particulars i.e, Paper Book, Case Law Book and Synopisis, were filed from assessee s side: Contents of Paper Book: 1. Copy of ITR acknowledgement filed on 01.08.2007 along with computation of income for A.Y. 2007-08. 2. Copy of written submissions filed before Ld. CIT(A)-18. 3. Copy of Purchase Deed dated 07.04.2006 in favour of appellant & others duly filed before Ld. CIT(A)-18. Page 3 of 14 4. Copy of sale Deed dated 21.05.2007 by appellant & others duly filed before Ld. CIT(A)-18. 5. Copy of Ikrarnama dated 31.10.2005 duly filed before Ld. CIT(A)-18. 6. Copy of statements recorded by ADIT, Chandigarh. 7. Copy of reasons recorded for re-opening assessment. 8. Copy of ITR acknowledgment alongwith Pan Card and Loan confirmation Certificate for A.Y. 2007-08 of Shri Rahul Kalsi. Contents of Case Law Book : 1. Order of Hon ble Supreme court in CIT Vs. P.V. Kalayansundraram (2007) 294 ITR 49/164 Taxman 78 confirming decision of Madras High Court in CIT Vs. P.V. Kalyansundaram (2006) 282 ITR 259/155. 2. Order in case of Paramjit Singh vs. ITO (2010), 323 ITR 588 of Punjab and Haryana Court followed in Sunita Dhadda Vs. Dy. CIT, 2013(Jaipur-Tribunal) by ITAT Jaipur. 3. Order of Rajasthan High Court in case of CIT Vs. Sunita Dhadda, shri Padam Chand Dhadda And Smt. Vijay Laxmi Dhadda, D.B. Income Tax Appeal No. 197/2012, D.B. Income Tax Appeal No. 199/2012 and D.B. Income Tax Appeal No. 198/2012, Dated:- 31 July 2017. 4. Order in case of M/s Kamakshi Hospitality Pvt. Ltd. Versus Dcit Central Circle-1, Jaipur ITA No. 481/JP/2016 2018. 5. Order in case of Sheth Akshay Pushpavadan Versus Dcit ITA No. 3178/AHD/2009; 2010 ITAT, Ahemdabad. 6. Order in case of CIT v. Lovely Exports (P) Ltd [2008] 216 CTR 195 (SC) 7. Order in case of CIT v. Gagandeep Infrastructure (P) Ltd (2017) 394 ITR 680 (Bombay HC) 8. Order in case of CIT v. Orchid Industries (P) Ltd (2017) 397 ITR 136 (Bombay HC) 9. Order in case of PCIT v. Apeak Info Tech (2017) 397 ITR 148 (Bombay HC) 10. Order in case of Cit Vs. Diamond Products Limited (2009) (Delhi) ITA No. 1004/2008 Page 4 of 14 Contents of Synopsis Page 5 of 14 Page 6 of 14 Page 7 of 14 Page 8 of 14 (C.1) Further, copy of order of Income Tax Appellate Tribunal, Lucknow Benches dated 28.04.2016 in case of Shri Rajendra Kumar Somani vs. DCIT in Page 9 of 14 ITA No.- 35,36 & 37/Lkw/2016 for Assessment Years 2004-05, 2005-06 & 2006-07; order dated 24/08/2016 in case of A.C.I.T. Central Circle-2, New Delhi versus Punit Beriwala 2016 (10) TMI 254-ITAT Delhi in ITA No. 964/Del/2012 and order dated 23.07.2012 of Income Tax Appellate Tribunal, B Bench, Chennai, in case of Jt. Commissioner of Income Tax vs. Shri V. Sampath in ITA no. 710, 711, 712, 713, 714, 715 and 716/Mds/2012 and C.O. Nos. 73, 74,75,76,77, 78 and 79/Mds/2012 for A.Ys. 2002-03, 03-04, 04-05, 05-06, 06-07, 07-08 and 08-09 were also filed from assessee s side during course of appellate proceedings in ITAT. (D) At time of hearing before us, Ld. Counsel for assessee reiterated submissions made on behalf of Assessee before Ld. CIT(A) which have been duly incorporated in aforesaid impugned order dated 16.08.2016 of Ld. CIT(A). Ld. Counsel for assessee placed further reliance on particulars filed during appellate proceedings in ITAT, which have been listed already in foregoing paragraph no. (C). On other hand, Ld. Departmental Representative ( Ld. DR for short) relied on Assessment Order and Order of Ld. CIT(A). He read out relevant portions from orders of Ld. CIT(A) and AO to draw our attention to facts of case. (E) We have heard both sides patiently. We have perused materials available on records. We have referred to judicial precedents mentioned in our records and also judicial precedents towards which our attention has been drawn in course of appellate proceedings in ITAT. Page 10 of 14 (E.1) As far as First Ground of appeal is concerned. We find that Ld. CIT(A) has sustained addition of Rs. 7,00,000/- as unexplained investment in purchase of land on account of on-money payment. However, both lower authorities namely, Ld. CIT(A) as well as AO have failed to bring anything on record to prove conclusively, that allegation of payment of on-money is in consonance with circle rate or with valuation of land by Stamp Duty Authority. addition is also not based on valuation of land by any registered valuer. Moreover, addition is also not based on any report of Valuation Officer. lower authorities have also failed to bring any material on record to show that addition is justified on basis of fair market value of land. In fact, from perusal of orders of Ld. CIT(A) and AO; we find no material to even indicate that true value of land commanded figure higher than what is reported by assessee. There is also no material on record to show that any on-money payment might have been required to be paid by assessee having regard to true market value of land in market or having regard to circle rate / valuation by Stamp Duty Authority / valuation by Registered Valuer / valuation by Valuation Officer. Having regard to facts and circumstances of case, materials on record, and in view of aforesaid discussion, we delete aforesaid addition of Rs. 7,00,000/- which was confirmed by Ld. CIT(A). (F) Second Ground of appeal pertains to addition of Rs. 4,08,000/- being cash deposited in bank account of lender. From perusal of record, we find that this amount is part of amount borrowed by assessee for purchase of aforesaid Page 11 of 14 piece of land. assessee had borrowed total amount of Rs. 12,93,200/- out of which Ld. CIT(A) has confirmed addition of Rs. 4,08,000/-. Mr. Rahul Kalsi, loan creditor has submitted Loan Confirmation Certificate, which was filed by Assessee before AO during assessment proceedings. relevant portion of Loan Confirmation Certificate of Mr. Rahul Kalsi is reproduced as under: LOAN CONFIRMATION CERTIFICATE I, Rahul Kalsi, S/o Ravi Kalsi, resident of 117, Arjun Marg, DLF Phase-1, Gurgaon, Haryana- 122002, has given loan to tune of Rs. 12,93,200/- during month of April, 2006 to Sh. Vijay Mohan Gupta, S/o B.M. Gupta, resident of E-211, Lajpat Nagar-1, New Delhi-24. same loan has been given from my HDFC Account No. 0921000026260, by making direct payment to seller from whom Sh. Vijay Mohan Gupta has purchased agricultural land. same payment has been made based on instruction received from Sh. Vijay Mohan Gupta. That I am assessed to Income Tax and my PAN. ABMPK0274H. Sd/- (Rahul Kalsi) (F.1) From perusal of records, we find that assessee has conclusively proved that assessee took loan from Mr. Rahul Kalsi, loan creditor, for purpose of purchasing aforesaid piece of land and has explained source of funds for purchase of aforesaid piece of land, loan creditor has also submitted Loan Confirmation Certificate, which is part of record. From perusal of record we find that assessee has proved identity of loan creditor, capacity of loan creditor and genuineness of loan transaction. Ld. CIT(A) has expressed doubt about aforesaid amount of Rs. 4,08,000/-, on ground that such huge amount was paid by loan creditor directly to seller of land and on this basis, Ld. CIT(A) has confirmed addition. However in doing so, Ld. Page 12 of 14 CIT(A) has contradicted himself because he has accepted genuineness of rest of loan amount of Rs. 8,13,200/- (i.e. 12,93,200 minus Rs. 4,08,000/-), in identical facts and circumstances. Moreover, there is no provision under law prohibiting loan creditor to make direct payment to seller of land. Having regard to facts and circumstances of case, materials on record, and foregoing discussion, we delete aforesaid addition of Rs. 4,08,000/-, which was sustained by Ld. CIT(A). (G) Third Ground of appeal is regarding addition of Rs. 3,24,000/- on account of low drawings for household expenses. This addition is based on estimated monthly household expenses of Rs. 30,000/- per month. On perusal of records, and having regard to facts and circumstances of case, we are of view that this estimate made by AO cannot be said to be excessive, unreasonable or high pitched. Therefore, this addition made by AO, and sustained by Ld. CIT(A) is hereby confirmed. (H) In result, appeal is partly allowed for statistical purposes. Order pronounced in open court on 22nd day of August, 2019. Sd/- Sd/- (BHAVNESH SAINI) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22.08.2019 Pooja/- Page 13 of 14 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Date of dictation Date on which typed draft is placed before dictating Member Date on which typed draft is placed before Other Member Date on which approved draft comes to Sr. PS/PS Date on which fair order is placed before Dictating Member for pronouncement Date on which fair order comes back to Sr. PS/PS Date on which final order is uploaded on website of ITAT Date on which file goes to Bench Clerk Date on which file goes to Head Clerk date on which file goes to Assistant Registrar for signature on order Date of dispatch of Order Page 14 of 14 Vijay Mohan Gupta v. Income-tax Officer, Ward-32(3), New Delhi
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