2010 (3) TMI 838 - AT - Income Tax

Block Assessment - Purchase of flat - source of income - receipt of on-money by the developers - The assessee in his initial reply admitted before the Assessing Officer that the flat in question has been purchased by him in his name for a sum of Rs. 3, 73, 000. However the seized material proves that it was purchased for a sum of Rs. 6, 21, 000. The amount of Rs. 3, 73, 000 according to the assessee was paid by cheque. The builders in their statements have admitted to have received on-money from purchasers for sale of the flats. The seized material is therefore supported by the statements of the builders. Ultimately when the assessee was confronted with the seized material he has changed his version and explained that remaining amount of Rs. 2, 48, 000 has been paid by him out of Rs. 2, 50, 000 contributed by his father. - Held that - the authorities below were justified in holding that the assessee has failed to explain the source of investment in the flat in a sum of Rs. 2, 48, 000. Considering the facts and circumstances noted above and the facts that no entry is also recorded in the account of the assessee in respect of the amount contributed by the assessee s father - Decided against the assesssee. Additional evidence - Held that - since the assessee has not raised this ground either before the Assessing Officer or before the learned Commissioner of Income-tax (Appeals) and no specific ground is taken in the grounds of appeal before the Tribunal therefore submission of the assessee may not be entertained which also requires verification of facts. - request for additional ground rejected.

Summary

Issues:
1. Addition of on-money for purchase of flat.
2. Jurisdiction of the Assessing Officer.
3. Burden of proof regarding unexplained investments.
4. Entertaining additional grounds of appeal.

Issue 1: Addition of on-money for purchase of flat:
The appeal challenged the addition of Rs. 2,48,000 as on-money paid for the purchase of a flat. The appellant contended that the explanation for the source of this amount was provided, including funds from the appellant's father. However, discrepancies arose regarding the total consideration paid for the flat, leading to the Assessing Officer making the addition. The appellant argued that the father's affidavit confirmed the contribution, but the tribunal found the affidavit unsubstantiated and motivated. The tribunal concluded that the appellant failed to prove the source of the investment, leading to the confirmation of the addition.

Issue 2: Jurisdiction of the Assessing Officer:
The appellant raised concerns about the jurisdiction of the Assessing Officer, claiming that the officer did not have authority over the case due to regular assessment in a different range. However, it was noted that post-search, cases were centralized under the Assistant Commissioner of Income-tax, Circle-3, Surat, justifying the officer's jurisdiction. The objection was dismissed, and the tribunal upheld the Commissioner's decision.

Issue 3: Burden of proof regarding unexplained investments:
The appellant relied on the burden of proof lying with the Revenue to establish unexplained investments. Citing a precedent, the appellant argued that the Revenue failed to discharge this burden adequately. However, the tribunal found discrepancies in the appellant's explanations and upheld the addition, emphasizing the lack of substantiated evidence regarding the source of the investment.

Issue 4: Entertaining additional grounds of appeal:
The appellant attempted to introduce additional grounds of appeal related to the limitation of the block assessment order, citing a previous case. However, as the grounds were not raised earlier in the proceedings, the tribunal rejected the submissions, emphasizing the necessity of raising such grounds at the appropriate stages of the appeal process.

In conclusion, the tribunal dismissed the appeal, affirming the addition of on-money for the flat purchase and upholding the jurisdiction of the Assessing Officer. The burden of proof regarding unexplained investments was not met by the appellant, and attempts to introduce additional grounds of appeal were rejected due to procedural shortcomings.