Bharat Laxman Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, partly allowed the appeal of the assessee for Assessment Year 2011-12 by deleting the addition of ₹31 lakh made under Section 69 of the Income-tax Act, 1961, towards alleged unexplained investment in the form of on-money paid for the purchase of a flat from Cosmos Group. However, the Tribunal dismissed the assessee’s challenge to the reopening of assessment under Section 147 as the ground was not argued during appellate proceedings.
The assessee, an individual deriving income from salary, had filed a return declaring total income of ₹4.40 lakh. The return was initially processed under Section 143(1). Subsequently, based on information received from the Deputy Director of Investigation regarding a search conducted on September 24, 2014, in the case of Cosmos Group, the Assessing Officer (AO) reopened the assessment by issuing notice under Section 148 on March 30, 2018. The information suggested that the assessee had allegedly paid cash on-money of ₹31 lakh over and above the agreement value for purchasing Flat No. A-07, 7th Floor, Twilight, Cosmos Horizon, Thane.
According to the Revenue, documents found during the search indicated that Cosmos Group had maintained excel sheets containing details of cash receipts from buyers of flats, shops, and offices. Statements recorded from key personnel of Cosmos Group, including the sales head and the head of accounts, allegedly revealed that cash components were involved in property transactions and that details of such transactions were maintained in specific email accounts and excel sheets. Relying on this information, the AO concluded that the assessee had made cash payments of ₹31 lakh and treated the amount as unexplained investment under Section 69.
