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Judgment
PER MANISH AGARWAL, A.M.:
The present appeal is filed by the assessee against the order dated 07.08.2023 passed by Ld. Commissioner of Income Tax (A)-24, New Delhi [“Ld. CIT(A)”] in Appeal No. CIT(A), Delhi-24/10451/2016-17 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of the assessment order dated 31.12.2022 passed u/s 153C of the Act pertaining to Assessment Year 2017-18.
Brief facts of the case are that as a result of search carried out in the case of Navneet Dawar and others Group on 03.01.2018, the residence of Shri Gurvinder Singh Duggal was also covered. During the course of search at the residential premises of Shri Gurvinder Singh Duggal at G-9, Greater Kailash-III, Masjid Moth, New Delhi, one document was found and seized marked as Annexure A-5 at page A-31, according to which the receipt was issued by the assessee of INR 80.00 Lakhs against Cheque No.265293 dated 16.05.2016. Accordingly, the AO held that the assessee has received cash of INR 80.00 Lakhs which was not disclosed in the return of income filed and therefore, proceedings u/s 153C were initiated by issue of notice on 15.05.2021. Thereafter, on 30.05.2021, assessee had died and his son Shri Mohinder Malik participated in the proceedings and filed necessary replies. The AO observed that in the statement given by Shri Gurvinder Singh Duggal, he stated that 65% share in the subject property i.e. E-36, Kalindi Colony, New Delhi was purchased by Shri Ashish Malik son of the appellant Shri Mohinder Kumar Malik and remaining 35% was purchased by M/s Duggal Builders Pvt. Ltd. (Now known as Studio D Builders Pvt. Ltd.) who in turn sold that undivided portion to Shri Ashish Malik son of the assessee i.e. Shri Mohinder Kumar Malik in the year 2017-18 and the Deed was not yet registered. The cheque mentioned in the loose paper matched with the cheque mentioned in the sale deed for INR 80.00 lacs. The AO thus, concluded that INR 80.00 Lakhs was received by the assessee against the payment made through cheque and made the addition of the same u/s 69A of the Act. In first appeal, ld. CIT(A) confirmed the said addition.
Aggrieved by the said order, the assessee is in appeal before ld. CIT(A) who vide impugned order dated 07.08.2023, dismissed the appeal of the assessee.
Aggrieved by the order of ld. CIT(A), the assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo out of which Ground of appeal No. 6 wherein the assessee has challenged the approval granted u/s 53D however, the said ground of appeal was not pressed hence, dismissed.
With respect to remaining Grounds of appeal Nos. 1 to 5 & 7, ld.AR submits that the satisfaction recorded by the AO of the assessee was mechanical in nature and full of errors and omissions and therefore, the proceedings initiated based on such satisfaction deserves to be hold bad in law.
On merits, it is submitted that the assessee has not received any such amount and the cheque issued has already been recorded. The assessee was neither the seller in the instant case nor the buyer and except the so-called document, there was no corroborative documents/evidences were brought on record either during the post-search proceedings and during the assessment proceedings. Ld.AR submits that when the assessee was not attached with the transaction in any capacity therefore, no addition could be made in the hands of the assessee, more particularly, u/s 69A when he was not found the owner of such cash. He prayed accordingly.
On the other hand, ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submits that a document was found during the course of search according to which the assessee has received INR 80.00 Lakhs in cash against Cheque No.265293 and such cheque was paid for purchase of property therefore, direct link is established. Ld. CIT DR further submits that the addition was also made in the hands of Shri Gurvinder Singh (director of the seller company) who stated to have made this payment to the assessee and the same was confirmed by the ld. CIT(A). Ld. CIT DR submits that the coordinate bench of Tribunal though allowed the appeal of Shri Gurvinder Singh however, the same was allowed by holding that the approval granted u/s 153D of the Act was mechanical and no discussion was made with respect to alleged payment made to the assessee and thus the assessee cannot escaped from the fact of receipt of money from Shri Gurvinder Singh and thus, the addition made deserves to be confirmed.
Heard the contentions of both the parties at length and perused the material available on record. It is observed that the assessee has issued receipt of INR 80.00 Lakhs of cash received against a cheque which was found recorded in the sale deed and the said loose slip was found during the course of search conducted in the case of seller. In the said receipt, though name of the assessee was nowhere mentioned however a reverence of Cheque No.265293 is made which is mentioned in the registered sale deed and the said receipt was signed by the assessee which is an undisputed fact, copy of which is placed before us. It is observed that the sale Deed is with respect to 35% undivided share in property situated at 36, Kalindi Colony, Delhi sold by M/s. Studio D Builders Pvt. Ltd. [formerly known as M/s. Duggal Builders Pvt. Ltd.] to Shri Ashish Malik son of the assessee and was executed on 02.08.2019 wherein cheque of INR 80.00 Lakhs was issued on Yes Bank to the seller found place at page 4 of the deed placed before us. Though the said property was neither sold by the assessee nor was purchased by the assessee however, the receipt of cash of INR 80.00 lacs was issued by the assessee and the cheque number mentioned on it, matched with the cheque stated in the registered sale deed being part of the total sale consideration paid. These facts have not been denied by any of the party. The fact which has to be examined that who issued the said cheque and why the cash was received against the said cheque by the assessee when the amount of 80.00 lacs paid through cheque No. 265293 is forming part of the total sale consideration of INR 4,65,00,000/- paid by Shri Ashish Malik. These facts remained unanswered even before us. In view of the overall discussions, we set aside the issue to the file of AO with the direction to make proper inquiry with respect to the questions remained unanswered before us and decide this issue in accordance with law. Here it is relevant to state that the assessee cannot take shelter of the judgement of the coordinate bench passed in the case of seller Shri Gurvinder Singh where the appeal was allowed on other facts and no discussion was made regarding the payment made to the assessee. Accordingly, Grounds of appeal No. 1 to 5 & 7 raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.