Mohammed Mannan Abdul Vs. ITO (ITAT Hyderabad)
Assessee filed his return of income declaring total income of Rs.1,08,500/-. The assessment has been subsequently reopened u/s.147 on the basis of the reasons recorded for reopening, as per which, information available with the Dept shows that the assessee had entered into an agreement of sale for purchase of commercial space for a consideration of Rs.75,67,000/- & paid entire amount, out of the above Rs.59,22,000/- paid in cash. 148 notice was issued & served on the assessee. in response, assessee filed return of income declaring total income at Rs.1,08,500/-. The assessment has been completed u/s.147 r.w.s.144B of & determined the total income of the assessee at Rs.60,30,500/- by making addition of Rs.59,22,000/- u/s.69 as unexplained investment for purchase of property.
subsequently PCIT issued show cause notice u/s.263 was & called-upon the assessee to explain as to why order passed by the AO u/s.147 shall not be revised. In the SCN, the PCIT observed that as per the insight portal information, the assessee had also purchased one more commercial space in the same premises for the total consideration of Rs.29 lakhs, out of which, Rs.19 lakhs has been paid in cash. During the course of scrutiny, the assessee has also furnished copies of both the sale deeds. However, while completing the assessment, the AO had considered only one sale deed for purchase of commercial space for a consideration of Rs.75,67,000/-, but, ignored the second sale deed even though the same was available with AO. Since the AO has not considered the second sale deed for the purpose of taxation & also bring to tax unexplained investment of Rs.19 lakhs, the PCIT observed that the assessment order passed by the AO u/s.147 is erroneous in so far as it is prejudicial to the interest of the revenue. In response to SCN , assessee submitted that, the assessment order passed by the AO is not prejudice to the interest of revenue because, the AO has considered the issue of purchase of property & after considering relevant facts has made addition towards unexplained investment in purchase of property as per the sale deed &, therefore, the observation of the PCIT that the AO has not considered the issue is incorrect. The PCIT after considering the relevant submissions of the assessee, set-aside the assessment order passed by the AO u/s.147 & directed the AO to re-frame the assessment by making addition of Rs.19 lakhs towards cash payment for purchase of property as unexplained investment u/s.69.
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