2017 (12) TMI 734 - AT - Income Tax

Reopening of assessment - no notice under section 143(2) have been issued - Held that - In the present case, admittedly the AO issued notice under section 143(2) on 17th March, 2015 which have been served upon assessee and assessee participated in reassessment proceedings for year 2008-09. Therefore mere mistake in mentioning assessment year 2008-09 for filing of the return is not fatal to the case of the Revenue. Therefore not inclined to entertain the plea of the assessee that no notice under section 143(2) have been issued and served upon the assessee. The learned DR therefore rightly contended that this ground of appeal of assessee should be rejected. In view of the above discussion, this ground of appeal of assessee is rejected. Addition of sales - assessee submitted that it was a sale transaction without monetary consideration and in her alternate contention she has contended that the assessee being a house wife has no source of income - Held that - The assessee has filed copy of the sale deed on record which clearly shows that assessee has paid ₹ 20,00,000/- to the seller/vendor in cash. Therefore, subsequent affidavits of deed writer, vendor and witnesses to the sale deed are not relevant and are clearly after thought and have been rightly rejected by the authorities below. The assessee failed to explain source of investment in purchase of property. All the contentions raised by the assessee have not been supported by any evidence or material on record. The case of the assessee is covered by judgment of Hon ble Punjab and Haryana High Court in the case of Paramjit Singh (2010 (2) TMI 262 - PUNJAB & HARYANA HIGH COURT). The appeal of the assessee has no merit, the same is accordingly dismissed.

Summary

Issues:
1. Validity of notice under section 143(2) for reassessment.
2. Addition of unexplained investment in purchase of property.
3. Challenge to the addition of ?20,00,000.

Issue 1: Validity of notice under section 143(2) for reassessment:
The case involved a dispute regarding the validity of the notice under section 143(2) for reassessment. The Assessing Officer (AO) issued a notice under section 148 of the Income Tax Act, and the assessee filed the return of income showing nil income. The AO mentioned issuing a notice under section 143(2) on 17th March, 2015, although there was an error in mentioning the assessment year as 2008-09 instead of 2009-10. The assessee contended that as no notice under section 143(2) was issued, the reassessment should be quashed. However, the Tribunal held that the notice was valid as the assessee participated in the proceedings without raising any objection regarding the error. The Tribunal cited precedents to support its decision, emphasizing that the inadvertent mistake did not invalidate the notice, and the assessee's participation in the proceedings indicated acceptance of the notice. Therefore, the Tribunal rejected the plea challenging the validity of the notice.

Issue 2: Addition of unexplained investment in purchase of property:
The AO made an addition of ?20,00,000 as unexplained investment in the purchase of property by the assessee. The sale deed clearly indicated the purchase price and that cash payment was made by the assessee. The assessee submitted affidavits later, claiming no monetary consideration was involved in the transaction. However, the Tribunal upheld the AO's decision, stating that the sale deed was a valid legal document and the subsequent affidavits were afterthoughts and not supported by evidence. The Tribunal emphasized that the assessee failed to explain the source of investment in the property purchase, leading to the addition of the amount as unexplained investment under section 69 of the Income-tax Act.

Issue 3: Challenge to the addition of ?20,00,000:
On the merits of the case, the assessee challenged the addition of ?20,00,000, arguing that no monetary consideration was involved in the sale transaction. The Tribunal, however, upheld the addition based on the sale deed's contents, which clearly stated the sale consideration paid by the assessee. The Tribunal dismissed the appeal, citing the principle that oral evidence cannot contradict the terms of a document when all conditions are contained within it. The Tribunal found the subsequent affidavits irrelevant and upheld the addition, stating that the case was similar to a precedent where the sale consideration disclosed in the deed had to be accepted. Consequently, the Tribunal dismissed the appeal challenging the addition of ?20,00,000.

In conclusion, the Tribunal dismissed the appeal of the assessee, upholding the addition of ?20,00,000 as unexplained investment in the purchase of property and rejecting the challenges to the validity of the notice under section 143(2) and the addition itself.