Syed Ahmed, Jammu vs Department Of Income Tax

Income Tax Officer, vs. Sh. Syed Ahmed, Ward 1(3), Jammu. Flat No.5, Block -A, Dreamland Co-operative Housing Society, Trikuta Nagar, Jammu. (Appellant) (Respondent)

Appellant by:Sh. V.K.Singh, DR Respondent by:Sh.Joginder Singh, CA

Date of hearing:19/02/2015 Date of pronouncement:26/02/2015

ORDER

PER B.P.JAIN, AM:

This appeal of the Revenue arises from the order of the of the CIT(A),

Jammu, dated 24/07/2014 for the assessment year 2005-06. The Revenue

has raised the following grounds of appeal:

"1. Whether the CIT(A) Jammu was right in law in deleting the addition made by the AO on account of flat purchased.

2. Whether the CIT(A) Jammu was right in law in deleting the addition made by the AO on account of flat purchased as the assessee has furnished neither copy of bank accounts wherefrom the payments were made nor source of credit entries to justify the same have been produced.

2 ITA No.579(Asr)/2014 3. Whether the CIT(A) Jammu was right in law in deleting the addition made by the AO on account of flat purchased when the proof of assessability of the payments has not been produced by the assessee either during the appellate or assessment proceedings.

4. Whether the CIT(A) Jammu was right in law in deleting the addition made by the AO on account of flat purchased as no bank certificate regarding transfer entry to the assessee from the account of his mother has been produced by the assessee to justify his contention."

2. The brief facts of the case as per order of the AO are reproduced for the sake of convenience as under:

"As per the information available with this office, the assessee has purchased a flat from Dreamland Cooperative housing Society Ltd. for Rs. 18 lacs out of which he has paid Rs.7 lacs by cheques and Rs.11 lacs by cash during the F.Y. 2004-05 relevant to the A.Y.2005-

06. The assessee has not disclosed this investment to the department. He has not filed his income tax return for the A.Y. 2005-06. Accordingly, notice u/s 148 was issued to the assessee after getting necessary approval from jcit-Range-1, Jammu on 28.03.2012, which was on the assessee on 29.03.2012 through Notice Server. On taking the charge of this ward, the undersigned issued a letter to the assessee dated 18.10.2012 which was received back with the remarks that assessee is out of station on 31.10.2012. On 22.11.2012 the undersigned again issued a letter alongwith notice u/s 142(1) and 143(2) of the Act which was again received back unserved. A show cause notice u/s 274 read with sec. 271 of the Act was issued on 30.11.2012 which was received back un-served. As the matter is time barring the undersigned is left with no other option but to pass an ex-parte order u/s 144 of the Act as per the information available with me. The case is now assessed as under:

Addition on account of Flat purchased Rs.18,00,000/-

Total income assessed Rs.18,00,000/-"

3 ITA No.579(Asr)/2014

3. Before the ld. CIT(A), the assessee made the submissions alongwith

certain documents, which were sent to the AO for report. The Ld. CIT(A)

after considering the submissions of the assessee, report of the AO and

rejoinder to the remand report deleted the addition of Rs.17,00,000/- and

sustained the addition of Rs.1,00,000/- vide para 6.2. of his order.

4. The Ld. DR relied upon the order of the AO and argued that the

assessee has neither furnished the copy of bank account from where

payments were made nor source of entries of credit were justified. He,

therefore, prayed to reverse the order of the ld. CIT(A) and confirm the order

of the AO.

5. The Ld. Counsel for the assessee, on the other hand, relied upon the

submissions made before the ld. CIT(A) and the order of the ld. CIT(A).

6. We have heard the rival contentions and perused the facts of the case.

At the outset, Rs.11 lacs were invested on 6.5.2005 and Rs. 3 lacs on

7.5.2005 which pertained to the year ending 31st March, 2006, relevant to

the assessment year 2006-07 whereas we are in the assessment year 2005-

06. The AO cannot make an addition of Rs. 11 lacs + Rs.3 lacs totaling

Rs.14 lacs during the impugned year and it is not a subject matter of the

impugned year. The Ld. CIT(A) has verified the same and has rightly

deleted the addition.

4 ITA No.579(Asr)/2014

7. As regards the payment of Rs. 3 lacs on 18.03.2055, the necessary

documents were sent to the AO for verification who actually did not verify

the same. Accordingly, the ld. CIT(A) verified the documents that Rs. 3

lacs were invested from the closure proceeds of old FDR in the name of

mother of the assessee. Therefore, the source of investment stands

explained. The assessee has submitted the explanation of investment to the

extent of Rs. 17 lacs before the ld. CIT(A), who had forwarded the same to

the AO for comments who declined to verify the same and in turn, the ld.

CIT(A) has examined the source of the impugned investment and therefore,

the ld. CIT(A) has rightly deleted the addition. We find no infirmity in the

order of the ld. CIT(A) and the same is upheld. The appeal of the Revenue

is dismissed accordingly.

8. In the result, the appeal filed by the Revenue in ITA No.579(Asr)/2014 is dismissed.

Order pronounced in the open court on 26th February, 2015.

Sd/- Sd/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 26th February, 2015 /SKR/ Copy of the order forwarded to: 1. The Assessee:Sh.Syed Ahmad, Jammu 2. The ITO Ward 1(3), Jammu 3. The CIT(A), Jammu 4. The CIT, Jammu 5. The SR DR, ITAT, Amritsar. True copy