2023 (5) TMI 1409 - AT - Income Tax

Validity of assessment order passed u/s 147 r.w.s. 144 - assessee did not submit any relevant verifiable sources for the investment made towards the acquisition of property - Assessee filed objections before the learned DRP and submitted certain documents before the learned DRP - DRP sustained the addition holding that there was no evidence to establish the date on which the loan amount was credited or the date of payment to the Lodha Group with reference to the bank statement. HELD THAT - Though the DR opposed the prayer of the assessee there is no material to contradict the fact that there were insolvency proceedings against DHFL and ultimately PHFL took over the DHFL company and also that Bank of Baroda entered the shoes of DHFL in respect of this particular loan. Assessee procured the documents from PHFL and Bank of Baroda and submitted now in the shape of additional evidence. The case of the assessee is that if these documents are considered in the light of the contentions raised by the assessee assessee has got a fair chance of winning the matter. In such situation we are of the considered opinion that a meritorious case cannot be thrown out at the threshold without giving an opportunity to the assessee that too when the assessee produced the documents from proper custody. We find it just and proper to receive the additional evidence and to direct the learned Assessing Officer to verify and to take a plausible view - Appeal of assessee allowed for statistical purposes.

Summary

Issues:
Assessment under section 147 r.w.s. 144 of the Income Tax Act, 1961 for the assessment year 2015-16.

Detailed Analysis:

Issue 1: Background and Assessment Process
The appellant, a non-resident individual, did not file an income tax return for the assessment year 2015-16 as the income earned outside India was not taxable in India. However, the Assessing Officer noticed property purchase and investments, leading to a notice being issued to the appellant.

Issue 2: Initial Assessment and Addition
The Assessing Officer proposed to tax an amount of Rs. 2.60 crores as unexplained income based on discrepancies in the payment schedule provided by the appellant and the bank account transactions. The Dispute Resolution Panel (DRP) upheld this addition citing lack of evidence regarding loan disbursement and property payment dates.

Issue 3: Appeal and Additional Evidence
The appellant contended that the authorities did not appreciate the facts and source of funds for the property investment. The appellant sought to submit additional evidence, including housing loan statements and payment receipts, to clarify the payment schedule and loan takeover by another entity due to insolvency.

Issue 4: Consideration of Additional Evidence
The appellant's request to admit additional evidence was opposed by the Revenue, citing prior opportunities given to the appellant. However, considering the insolvency proceedings and change in loan ownership, the Tribunal allowed the additional evidence submission. The Tribunal emphasized the importance of giving the appellant a fair chance to present relevant documents.

Issue 5: Tribunal's Decision
The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to review the additional evidence provided by the appellant and make a decision in accordance with the law. The Tribunal highlighted the need to consider the new evidence and provide a fair opportunity to the appellant for a proper assessment.

This judgment showcases the importance of considering additional evidence in tax assessments, especially when circumstances beyond the taxpayer's control affect the availability of relevant documents. The Tribunal's decision to allow the submission of additional evidence emphasizes the principle of fairness and the need for a thorough review of all relevant facts in tax proceedings.