TaxTMI 
TaxTMI 
2026 (6) TMI 1261
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....ef facts of the case are that the assessee, an individual and non-resident, filed his return of income for A.Y. 2016-17 on 24.01.2017 declaring total income of Rs. 14,09,610/-. The return was initially processed under section 143(1) of the Act. Subsequently, the case was selected for limited scrutiny under CASS and during the course of assessment proceedings, the Assessing Officer noticed that the assessee had purchased two immovable properties registered on 26.05.2015, one property situated at Final Plot No.324, T.P. Scheme No.6, Anand for consideration of Rs. 32,12,400/- involving stamp duty of Rs. 1,58,000/- and another property situated at Valasan, District Anand for consideration of Rs. 47,00,000/- involving stamp duty of Rs. 2,30,500/-. The Assessing Officer further observed that the assessee had deposited Rs. 80,00,000/- in SBI Bank Account No.3494996182 and had also made cash deposits aggregating to Rs. 41,96,550/- in ICICI Bank account. 4. During the course of assessment proceedings, according to the Assessing Officer, the assessee failed to comply with the notices issued and did not furnish any explanation or documentary evidence regarding the source of investment in t....
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....e in Financial Year 2013-14 relevant to A.Y. 2014-15 and not during the year under consideration i.e. A.Y. 2016-17. The assessee submitted that out of the total consideration of Rs. 32,12,400/- paid for the Anand property, an amount of Rs. 31,87,500/- had already been paid on 27.11.2013 through banking channel. Similarly, the consideration of Rs. 47,00,000/- for the Valasan property had been paid on 15.04.2013 and 16.04.2013 through cheques. It was submitted that section 69 of the Act could be invoked only in the year in which the investment was actually made and not in the year in which the sale deed came to be registered. The assessee therefore contended that addition of Rs. 78,87,500/- in A.Y. 2016-17 was fundamentally erroneous. 7. The CIT(Appeals) forwarded the additional evidences and grounds raised by the assessee to the Assessing Officer for remand report. In the remand proceedings, the Assessing Officer objected to admission of additional evidences under Rule 46A by contending that sufficient opportunities had already been granted during assessment proceedings and the assessee failed to establish any reasonable cause for non-compliance. However, on merits, the Assessing....
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....re maintained in the remand report that the cash deposits remained unexplained. 10. In response to the remand report, the assessee filed a rejoinder explaining that the Assessing Officer himself had accepted in the remand report that the property payments were made in Financial Year 2013-14 and therefore no addition could survive in A.Y. 2016-17. The assessee also clarified that the Assessing Officer had mixed up the explanations relating to property payments and SBI deposits. The assessee submitted that the deposits of Rs. 80,00,000/- in SBI account were not sourced from Shri Mukeshbhai Vaswani but from three independent parties namely Shri Bipinchandra Shivabhai Patel, Shri Navinbhai Shivabhai Patel and Shri Nishithkumar Chandrakant Patel from whom loans had been received through RTGS. Confirmations, PAN details and bank statements of all the lenders were furnished and the assessee submitted that the Assessing Officer had not made any adverse comments on these documentary evidences in the remand report. 11. The assessee further reiterated that the cash deposits in ICICI Bank account were fully explained by jewellery sale transactions and agricultural income. The assessee su....
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....Bipinchandra Patel, Shri Navinbhai Patel and Shri Nishithkumar Patel along with their bank statements showing RTGS transfers to the assessee. The Ld. CIT(A) observed that the Assessing Officer had not brought any material on record to establish that the lenders did not have creditworthiness or that the instant transactions were not genuine. The CIT(Appeals) therefore held that the source of Rs. 80,00,000/- stood satisfactorily explained. 15. Similarly, in relation to cash deposits in ICICI Bank account, the Ld. CIT(A) noted that the assessee had furnished confirmation from M.V. Jewellers, PAN details of the proprietor, promissory note and detailed cash flow statement duly reconciling with the deposits in the bank account. The CIT(Appeals) further took note of the additional evidences regarding agricultural land holdings and agricultural receipts from cultivation under "santhbhag" arrangement. The CIT(Appeals) held that the assessee had demonstrated receipt of Rs. 11,50,000/- from agricultural sharing arrangement and such receipts were also corroborated by cash flow statement and land records. The CIT(Appeals) observed that the Assessing Officer had merely raised suspicion regard....
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....ssessment year. However, during appellate proceedings before CIT(Appeals), the assessee furnished purchase deeds, bank statements and RTGS details to demonstrate that the actual payments towards acquisition of the properties were made much earlier during Financial Year 2013-14 relevant to A.Y. 2014-15. The assessee showed that payment of Rs. 31,87,500/- relating to Anand property was made on 27.11.2013 through banking channel and similarly payments aggregating to Rs. 47,00,000/- relating to Valasan property were made on 15.04.2013 and 16.04.2013 through cheques. 20. What is significant is that these factual aspects were verified by the Assessing Officer in the remand report. The Assessing Officer observed that the dates and cheque numbers mentioned in the purchase deeds matched with the entries appearing in the bank statements for Financial Year 2013-14 and therefore admitted that the payments towards the properties had indeed been made in earlier years. Once this factual position is accepted by the Revenue itself, the very basis of addition under section 69 of the Act in the year under consideration disappears. 21. It is settled proposition of law that for invoking section 6....
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....Court observed:- "the provisions of Section 69A of the IT Act contemplate that the 'money' (cash deposit in the present case) could be deemed to be in the nature of income only in the financial year in respect of which the assessee is found to be the owner" 26. Thus, the Hon'ble High Court clearly laid down that where the assessee demonstrates that the impugned money or investment pertains to earlier years, no addition under section 69A can be made in a later year merely because the amount surfaces, gets deposited or is reflected during such later year. The correct year of taxability under section 69A is the year in which the unexplained money or investment actually came into existence or the assessee became owner thereof, and not the year in which the same is subsequently utilized, deposited or registered. 27. In the present case, the assessee furnished complete documentary evidence in the form of purchase deeds, bank statements and RTGS entries, and even the remand report of the Assessing Officer supports the assessee's claim that the payments were made in Financial Year 2013-14. In such circumstances, we are of the considered view that the Ld. CIT(A) was justified....