Vaibhav Mishra vs Income Tax Officer, Noida

PER MANISH AGARWAL, AM:

The captioned appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A) in short], dated 05.03.2024 in Appeal No. 56/2016-17/Noida, arising out of the order passed u/s 144 of the Income Tax Act, 1961 (the Act, in short) dated 18.03.2016 for Assessment Year 2013-14.

Brief facts are that case of the assessee was taken up for scrutiny under CASS and since, the assessee filed to make compliance to any notice issued, the investment made in purchase of immovable property for Rs.1,93,11,000/- was treated as unexplained investment u/s 69C of the Act, and additions for the same was made.

Against the said order, assessee filed appeal before the Ld. CIT(A) who vide order dated 26.11.2018 allowed the appeal of the assessee by accepting the contention of the assessee that he alongwith his mother had sold the property owned by his deceased father for Rs.1,88,00,000/- and utilized the sale proceeds to buy another property jointly with his younger brother.

Against the said order, Revenue preferred an appeal before the ITAT, wherein the Tribunal vide its order dated 21.11.2022 in ITA No.4246/Del/2019 had allowed the appeal of the revenue and remanded the matter back to the file of Ld. CIT(A) with the directions to follow the procedure under Rule 46A(3) of the Income Tax Rules, 1962 (“the Rules”), as the Ld. CIT(A) has allowed the appeal of the assessee by admitting the additional evidences without confronting the same to the AO. Thereafter, Ld. CIT(A) in set aside proceedings sought remand report from the Assessing Officer on the documents filed by the assessee. In the remand report, the AO stated that no additional evidences were submitted by the assessee. However, Ld. CIT(A) without appreciating the fact that all the documents relied upon by his predecessor in first round of the proceedings were already filed before the AO and after appreciating the same appeal of the assessee was allowed in first round, has dismissed the appeal of the assessee by observing that no documentary evidences were filed in support of the claim made by the assessee.

Aggrieved by the said order, the assessee filed the present appeal before the Tribunal.

Heard the parties and perused the materials available on record. In the instant case, sole issue of dispute is with respect to the source of investment in acquisition of the new property by the assessee jointly with his mother and younger brother. The claim of the assessee was that after the death of his father, assessee along with his mother has sold the property owned by his father which was received by them under inheritance. The sale proceeds from such sale were utilized to buy new property jointly with his mother and younger brother Shri Abhinav Mishra. The assessee has purchased the new property within the statutory time limit provided under the Act from the sale of old property and, therefore, exemption u/s 54 of the Act was claimed out of the capital gains earned from the sale of other property. It is further observed that in the case of mother of the assessee entire transactions was considered and accepted in the assessment order passed u/s 143(3) by DCIT, Range Lucknow vide order dated 21.12.2015, copy of the same is placed before us.

After considering these facts, in the first round, Ld. CIT(A) has allowed the appeal of the assessee, however, in set aside proceedings Ld. CIT(A) though obtained remand report from the Assessing Officer wherein the AO has categorically admitted that no additional evidence was filed by the assessee which is evident from the observation of Ld. CIT(A) in para 5.3 of its order but without considering the details so available, had dismissed the appeal of the assessee.

Since, the assessee has filed all the details with respect to the sale of the property jointly with his mother and purchased new property and further filed copy of the bank statements wherein the sale consideration was duly credited as deposits as well as the payment made for acquisition of new property are also appearing as withdrawals. Therefore, the claim of the assessee that he has a valid source for making investment in new property in the shape of sale consideration received from the sale of the property owned by his father cannot be denied. In view of these facts, we hereby allowed all the grounds of the assessee and deleted the additions so sustained by Ld. CIT(A) in the set aside order. Accordingly, all the grounds of appeal raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.