2023 (1) TMI 626 - AT - Income Tax

Unexplained investment - statement recorded on oath u/s 132(4) - document was found and seized from the premises of the husband of the assessee - HELD THAT - When at the very first moment of search proceedings the assessee has categorically admitted that payment was done by her husband and on the very same moment, the husband also admitted that he has made the payment, then it can be safely concluded that the wife, i.e. the assessee, has successfully discharged the onus cast upon her to explain the source of investment of Rs. 68 lakhs. In so far as the husband of the assessee is concerned, the Revenue was/is free to take any action as per the provisions of law. Considering the facts of the case in totality, addition of Rs. 68 lakhs is not sustainable in the hands of the assessee and the Assessing Officer is directed to delete the same. - Decided in favour of assessee.

Issues involved:
1. Validity of assessment order due to lack of DIN and circular compliance
2. Failure to consider submissions and information during assessment
3. Incorrect application of cut and paste method in assessment
4. Mechanical approval under section 153D without proper supervision
5. Addition under section 69 for unaccounted investment
6. Confirmation of addition for cash investment in residential flat
7. Granting exemption under section 54F for investment in residential property
8. Failure to consider applicability of section 115BBE
9. Allegations of passing assessment order on extraneous reasons

Analysis:
1. The appellant challenged the assessment order on the grounds of lacking the mandatory Document Identification Number (DIN) and non-compliance with Circular No. 19. The contention was that the order should be quashed as non-existent and void ab initio. The Tribunal noted the importance of these requirements but did not find them fatal to the assessment process.

2. The appellant argued that the Assessing Officer (AO) did not consider their submissions and information during the assessment, leading to an erroneous order. The Tribunal observed the AO's duty to consider all relevant details and found merit in this argument, emphasizing the importance of due consideration in assessment proceedings.

3. The appellant raised concerns about the incorrect application of the cut and paste method in the assessment, highlighting errors in referencing the gender of the assessee. The Tribunal acknowledged these discrepancies and directed the quashing of the assessment order due to the non-application of mind in this aspect.

4. The appellant contested the mechanical approval under section 153D, alleging a lack of supervisory review. The Tribunal agreed that proper supervision was necessary, and the assessment based solely on mechanical approval was deemed invalid and ordered to be quashed.

5. The addition under section 69 for unaccounted investment was challenged by the appellant, arguing that as an individual not required to maintain books of account, the presumption of illegal transactions leading to the addition was unfounded. The Tribunal reviewed the explanations provided and directed the deletion of this addition.

6. The confirmation of the addition for cash investment in a residential flat was disputed by the appellant, who provided explanations and supporting documents for the sources of the investment. The Tribunal found merit in the appellant's contentions and ordered the deletion of this addition based on surmise and conjectures.

7. The denial of exemption under section 54F for the investment in a residential property was contested by the appellant, citing the absence of other residential properties and fulfilling the conditions for the exemption. The Tribunal agreed with the appellant and directed the allowance of the claimed exemption.

8. The failure to consider the applicability of section 115BBE for the assessment year was raised as an issue by the appellant. The Tribunal noted the oversight in not addressing this provision and ordered a review to rectify this omission.

9. Allegations of passing the assessment order on extraneous reasons were made by the appellant, questioning the basis of the decision. The Tribunal considered these allegations and found no substantial evidence to support annulment based on extraneous reasons, leading to a dismissal of this ground of appeal.

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