Sunny Tarunkumar Doshi Vs ITO (ITAT Ahmedabad)
Conclusion: AO had rightly reopened assessee’s case as there was no change of opinion but all the aspects should have been taken into consideration by AO under proceedings related to Section 143(1) and assessee was admitting that the cancelation had not been done but was under process, but no evidence had been filed by assessee as regards cancellation of sale deed. Therefore, AO rightly made addition of Rs.69,49,250/- as assessee’s income from undisclosed sources (50% of the stamp duty value of the properties).
Held: Assessee was engaged in the business of commission work and trading of Chemical. Revenue found that the assessee had jointly purchased agricultural land at Village Ukhrala, Bhavnagar vide two separate purchase deeds for a consideration of 29,26,500/- and Rs.1,09,72,000/- respectively (total Rs.1,38,98,500/-) and assessee’s share worked out to Rs.69,49,250/- (being 50% owner). This purchase of land was not shown by assessee in his Balance Sheet for the year under consideration. AO observed that in view of the provisions of Section 69A, the value of investments which was not recorded in the books of account of assessee and the same was required to be treated as income from the investments. Thus, assessee purchased immovable property during the year under consideration without adequate consideration and therefore the provisions of Section 56(1)(vii) were applicable. After recording the reasons for reopening the case and also obtaining approval of the Higher Authorities, notice under Section 148 was issued AO made addition of Rs.69,49,250/- as assessee’s income from undisclosed sources (50% of the stamp duty value of the properties). It was held that in the original assessment under Section 143(1), the issue related to the deed of purchase of land was not looked into as the same was not reported in the assessee’s income before the Revenue. Besides that, there was no change of opinion but all the aspects should have been taken into consideration by AO under proceedings related to Section 143(1) and, therefore, the Department had rightly reopened assessee’s case. Assessee is admitting that the cancelation has not been done but was under process, but no evidence had been filed by the assessee as regards cancellation of sale deed. Though assessee had produced confirmation that no payment had been made through co-purchaser but the same should have been taken from the seller as well and the stamp duty had not been refunded to either of the parties and assessee failed to demonstrate that the agreement did not exist at this juncture. Thus, AO had rightly taken a view and it was not a change of opinion. It was further noticed that the assessee since not filed any evidence in respect of cancellation of sale deed nor filed any details of processing the cancellation of sale deed, AO and CIT(A) rightly confirmed the addition.
