2023 (9) TMI 742 - AT - Income Tax

Validity of the assessment order on the ground that no notice u/sec. 143(2) was issued by the AO - HELD THAT - The contention of the assessee is contrary to the material on record in mere perusal of the assessment order, it would be clear that the AO had issued notices u/sec. 143(2) and 142(1) and the assessee had also responded and participated in the assessment proceedings. Therefore, the contention of the assessee is devoid of any merit and is hereby dismissed. Assessment should not have been made in the individual hands of the assessee, but in AOP status - The assessee had not brought any material to show that the transaction of purchase of property was done in AoP status. On the other hand, the material on record clearly indicates that the properties were purchased jointly along with two other persons, namely Shri Ashok Selarka and Shri Vikesh Agrawal with a definite share in the property, which clearly indicates that there was no intention on the part of the assessee and other two parties to purchase the property in the capacity of an AoP. Thus, the findings of the ld. CIT(A) are very well reasoned and this ground of appeal has no merits. Accordingly, dismissed. Addition solely on the basis of the statement given by the vendors of the property from whom the assessee has purchased the land jointly with other two parties - During the course of assessment proceedings, the assessee had denied having paid on money consideration over and above the consideration mentioned in the sale deed. During the course of appellate proceedings before the ld. CIT(A), the ld. CIT(A) had directed the AO to afford an opportunity to cross examine the vendors. AO in the remand proceedings offered the assessee an opportunity to cross examine the vendors, but the assessee could not disprove the statements made by the vendors and also could not deny the existence of agreement for on money consideration over and above the consideration mentioned in sale deed. There was a conclusive evidence to show that the assessee had paid on money consideration cash at the time of purchase of agricultural land and the assessee could not offer any explanation as to the source of on money consideration paid. AO was justified in making the addition in the hands of the assessee. Therefore, this ground of appeal raised by the assessee is dismissed.

Summary

Issues Involved:
The appeals filed by different assessees against orders of Commissioner of Income-Tax (Appeals)-II, Nagpur for A.Y. 2007-08.

Issue 1: Assessment Order Validity
The assessee contended that no notice u/sec. 143(2) was issued, challenging the validity of the assessment order. However, the assessment order clearly showed that notices u/sec. 143(2) and 142(1) were issued, and the assessee participated in the proceedings. The contention was dismissed for lack of merit.

Issue 2: Assessment in Individual Capacity
The second ground raised was that the assessment should have been made in the status of Association of Persons (AoP) rather than in the individual hands of the assessee. The assessee failed to provide evidence that the property transaction was done in AoP status. Records indicated joint purchase with specific shares, negating AoP intention. The CIT(A)'s findings were upheld, dismissing this ground of appeal.

Issue 3: Addition of On Money Consideration
The third ground challenged the addition of on money consideration based on vendors' statements. The assessee denied paying extra consideration, but during appellate proceedings, vendors confirmed on money transactions. Despite the opportunity to cross-examine vendors, the assessee couldn't disprove their statements. Lack of explanation for the source of additional payment led to the justified addition by the AO. This ground of appeal was dismissed.

Additional Appeals:
Two additional appeals with similar facts were addressed, and the findings from the first appeal applied to these cases as well.

In conclusion, the appeals of the assessees were dismissed based on the above assessments and considerations. The order was pronounced on 3rd August 2023.