2022 (6) TMI 877 - AT - Income Tax

Reopening of assessment / best judgment assessment - addition of receipt of on-money - addition based on the evidence found as result of search and seizure operations in the hands of Shri Madhukar Narayan Patil who is a land aggregator for Jai Corp Group - as no return of income was filed by the appellant in response to said notice u/s 148 appellant also not complied with the other notices issued u/s 143(2) and 142(1) - AO completed the assessment to best judgement by making addition based on the information furnished by the Investigation Wing of the Department, Mumbai that the appellant was paid on-money payment on transfer of the plot HELD THAT - On mere perusal of the assessment order, it would reveal that the appellant had neither complied with the notice issued u/s 148 nor responded to the notices issued u/s 143(2) and 142(1) of the Act. In these circumstances, based on the information/evidence furnished by the Investigation Wing of the Department, Mumbai found as result of search and seizure operations in the hands of Shri Madhukar Narayan Patil who is land aggregator for Jai Corp Group, the Assessing Officer completed the assessment. No pleadings were made either before the ld. CIT(A) or during the course of hearing before the Tribunal, as to how the appellant was prevented from causing appearance before the Assessing Officer or complying with the statutory notices u/s 148/ 143(2) 142(1). Therefore, the Assessing Officer was justified in making an ex-parte assessment to the best of judgement of the Assessing Officer. The ld. CIT(A) has clearly discussed these facts of the case in great detail vide para 15 of his order. During the course of hearing before us, the appellant had not rebutted the findings of the ld. CIT(A) given in para 15 of his order. Similarly, the evidence and statement given by Shri Madhukar Narayan Patil were supplied to the appellant during the course of proceedings before the ld. CIT(A). The only course of action open to the appellant is to rebut the assessment by cogent reliable evidence, which the appellant failed to do so. In these circumstances, the contentions raised by the appellant before us cannot be accepted - Decided against assessee.

Summary

Issues:
Taxing alleged receipt of on-money payment based on search and seizure operations.

Analysis:
The appeal was against the assessment order for the assessment year 2008-09. The appellant, an individual, did not file a return of income despite receiving a notice u/s 148. The Assessing Officer completed the assessment to best judgment based on information that the appellant received on-money payment on sale of plots. The assessment included short term capital gains and on-money receipt. The appellant contended before the ld. CIT(A) that no evidence of on-money receipt existed, but the appeal was dismissed. The appellant challenged this decision before the ITAT.

The appellant argued that the addition was based on surmises and third party statements without offering cross-examination. Additionally, the property sold was jointly held by 5 persons, and the entire on-money consideration should not be taxed in the appellant's hands. The Revenue supported the lower authorities' orders, stating the appellant did not avail opportunities to respond to notices or rebut evidence.

The ITAT found that the issue revolved around taxing the alleged on-money payment based on information from search and seizure operations. The appellant failed to comply with statutory notices and did not provide any reasons for non-compliance. The Assessing Officer's ex-parte assessment was deemed justified. The ld. CIT(A) extensively discussed the case details, which the appellant did not rebut during the ITAT hearing. The evidence and statements were provided to the appellant, who failed to present reliable evidence to challenge the assessment. Consequently, the ITAT upheld the ld. CIT(A)'s decision, dismissing the appeal.

In conclusion, the ITAT dismissed the appeal filed by the assessee, upholding the order of the ld. CIT(A) regarding the taxing of the alleged on-money payment.