TaxTMI 
TaxTMI 
2025 (2) TMI 1536
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....e contrary, Ld.DR present in the court is ready with the arguments. Therefore we have decided to proceed with the hearing of the case ex parte. 3. We have heard Ld. Ld.DR and also perused the documents placed on record and orders passed by the revenue authorities. From the records, we noticed that the present appeal is the second round of litigation before us. As during the first round of litigation, the matter was remanded back to the AO by the ITAT. Under the above scenario, it is important to mention the background of the case. 4. The first round of assessment proceedings culminated in an assessment order under section 143(3) dated 14/03/2016. During the proceedings there was information with AO regarding property transactions done by the assessee during the year under consideration, but the same were not disclosed in the return of income, either as a rental income or as capital gains. When this fact was pointed out to, then the assessee vide letter dated 9/01/2016, declared the sale of three properties. The details of which are reproduced here in below: "(i) Sale of property at Office No.J-1, 4th Floor, Tex centre, Chandivali, Saiknaka, Andheri (E), Mumbai - 400 ....
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....not considering the appellant claim and erroneously upheld the addition made by the Ld. AO towards Capital Gain Rs. 2,04,52,182 on the Properties merely on the ground of registration. 2.1 The Ld. CIT (A) & Ld. AO failed to consider the fact that after Registration of Sale Agreement, due to Various Issues the transaction was not completed and as a result of which Right/Possession was not handed over. 2.2 The Ld. CIT (A) & Ld. AO further failed to appreciate the fact that since the Right/Possession wasn't transfer, accordingly the said Properties were duly reported under the heading "Fixed Assets" in the Financials for the year under consideration. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in approving/confirming Ld. AO's action of considering DVO without appreciating the facts that the Amount reported by the appellant was higher than the ready-reckoner value. 3.1 Further during the Assessment proceedings, the Ld. AO dint recorded and establish any adequate justification for accepting the Higher Value reported by DVO vis a vis amount considered by the appellant. 4. On the facts and circumsta....
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....lved and hence the director did not disclose the sale in the ITR filed. - 8.4 The contentions of the appellant cannot be accepted since they are not backed by any evidence. Nothing has been submitted by the appellant in these proceedings to support its claim that the sale was cancelled. The fact of the matter is that the sale agreements were made and were registered and hence it has to be presumed that the sales took place as per the same. In case they would have been cancelled there would have been a proper cancellation agreement between the buyer and the company but no such document has been produced. The submission of the appellant does not merit acceptance without even a shred of evidence to prove its veracity. Similarly, with regard to Office J-3, the appellant neither submitted any evidence with regard to the cost of improvement of Rs. 35,67,524/- before the A.O, and in these proceedings has remained completely silent on this issue and hence the action of the A.O in not accepting this claim is upheld. Consequently, and in conclusion it can be said that the entire addition of Rs. 1,90,57,182/- made by the A.O on account of the undisclosed capital gains on sale of offi....
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....e DVA was inaccurate and how the valuation was not justified. The assertions of the appellant are meaningless without any specific evidence and documentation. Hence the enhancement of Rs. 13,95,000/- made of the basis of the DVO's report is upheld. Accordingly, taking both the orders together the addition of Rs. 2,04,52,182/- on account of undisclosed capital gains on account of the sale of the 3 office premises is confirmed. The Ground of Appeal is Not Allowed." 13. After having gone through the orders of Ld. CIT(A), we found that nothing has been placed on record by the assessee to disprove the report of the DVO. No concrete evidence was placed on record to show as to how the report is in accurate. Therefore in the absence of any documentary evidence, the Ld. CIT(A) was having no other option except to uphold the report of DVO. Even before us nothing has been placed on record. Therefore we found no reason to interfere into the orders passed by Ld. CIT(A) and thus uphold the same and dismiss this ground raised by the assessee. 14. Ground No. 4 raised by the assessee relates to challenging the order of Ld. CIT(A) in upholding the order of you in this annoying business exp....
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.... below: "11.1 The A.O has stated in the order that on the basis of the details filed by the assessee notice u/s. 133(6) was issued on 21.01.2016 but was returned unserved by the postal authorities. Hence the assessee was asked to produce the party during the assessment proceedings for verification but failed to do so. Accordingly, since the identity of the party had not been proved, the A.O made the addition. The appellant has stated in the submissions that the loan was taken by cheque and properly accounted for in the books. That the PAN and other details were submitted to the A.O during the proceedings. 11.2 As per the provisions of section 68 of the Act, the Burden of proof is on the assessee who is required to offer an explanation to the satisfaction of the Assessing Officer so as not to attract the mischief of section 68 of the Act. This aspect has been deliberated upon by the Hon'ble Supreme Court in numerous decisions. Relevant portion from following case laws are extracted below: i. Sreelekha Banerjee v CIT (1963) 49 1TR 112 (SC) "It seems to us that the correct approach to questions of this kind is this. If there is an entry in the a....
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....it differently, where the nature and source of a receipt whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that that income is from any particular source." iii. Sumati Dayal v. CIT [1995] 80 Taxman 89 (SC) "But, in view of Section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year the same may be charged to income tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such case there is, prima facie, evidence against the assessee, viz., the receipt of money, and if he fails to rebut, the said evidence being unrebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee the Department cannot, however, act unreasonably." iv. CIT v. P. Mohanakala [2007] 161 Taxman 169 (SC) "The expression "the assessees offer no explan....
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....s the transactions which he had with the creditors, his burden stands discharged and the burden then shifts to the revenue to show that though covered by cheques, the amounts in question, actually belonged to, or was owned by the assessee himself" The Hon'ble ITAT, Delhi in the case of Pee Aar Securities Ltd. vs. DCIT, Circle-14(1), New Delhi [(2018) 96 taxmann.com 602 (Delhi - Trib.)] has held as under: "It is also a settled legal position that the onus of the assessee, of explaining nature and source of credit, does not get discharged merely by filing confirmatory letters, or demonstrating that the transactions are done through the banking channels or even by filing the income tax assessment particulars. In the case of CIT v. United Commercial and Industrial Co (P.) Ltd [1991] 187 ITR 596/56 1 Taxman 304 (Cal), Hon'ble Calcutta High Court has held that "it was necessary for the assessee to prove prima facie the identity of creditors, the capacity of such creditors and lastly the genuineness of transactions". Similarly, in the case of CIT v. Precision Finance (P.) Ltd [1994] 208 ITR 465/[1995} 82 Taxman 31 (Cal), it was observed that "it is for the assess....
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....ong with other facts be relevant in establishing the genuineness of the transaction. As held by Hon. Supreme Court in the case of CIT vs. N. Tarika Properties Investment (2014) 51 taxmann.com 387(SC) that "PAN cannot be treated as sufficient disclosure of identity of the person. PANs are allowed on the basis of application without actual de facto clarification of identity or ascertainment of activities, nature of business activity and are just as to facilitate the Revenue to keep track of transactions and thus PAN cannot be blindly and without consideration of surrounding circumstances treated as sufficient disclosing the identity of individual". 11.5 Looking to the present case it is seen that the A.O made the addition of the basis of the fact that the notice u/s. 133(6} issued to the party was returned unserved and that the assessee did not produce the party before the A.O as requested by him. Thus it is seen that on the basis of the details provided by the assessee, the A.O had carried out independent enquiries by issuing notice u/s. 133(6) of the Act and since they did not yield any result, the onus was on the assessee to produce the party before the A.O. The contentio....