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TMI Blog2014 (10) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... Registration Act, of which Stamp Duty is required to be paid - only that property can be sold which is owned by the seller - In the absence of documents for ownership of the property, the factum of execution of sale agreement cannot be accepted -No prudent man will purchase any property from anyone which is not owned by him - this is the case where the assessee has raised certain funds for investment and onus is upon him to prove the same - It is for the assessee to place the relevant evidence to establish that he in fact has received the amount of ₹ 8.80 lakhs from the buyer on execution of sale agreement - assessee has badly failed to discharge his onus - the claim of the assessee that receipt through execution of sale agreement is also one of the sources of investment, cannot be accepted – thus, the order of the CIT(A) is set aside and the AO is directed to compute the addition. Availability of funds on redemption of investment – Held that:- The details of year-wise investments were not furnished in order to ascertain the nature and quantum of capital gain - the assessee has not offered any capital gain on redemption of these Mutual funds - the CIT(A) had accepted the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at investments of ₹ 21,43,986/- was made by redemption of investment in earlier years, even though the assessee had failed to provide any evidence for the same before the A.O. 7. The CIT(A) has erred in law and on facts in accepting the claim of the assessee that his investment in TATA Assets Management Ltd, was only ₹ 10,00,000/- and not ₹ 27,67,236/- which is on record, the difference being on account of switching between various schemes. He ignored the fact that the assessee had failed to provide any evidence in support of his claim before the A.O. 2. Though various grounds are raised, but they all are interrelated and the main issue involved in this appeal is with regard to the addition made on account of unexplained investment of ₹ 51,81,514/- under various heads. 3. Assessee had filed written submissions before the ld. CIT(A) explaining the details of investment made during the year in his name; in the name of his wife and in the name of his daughter. It was also stated before the ld. CIT(A) that though the Assessing Officer noted the total investment of ₹ 61,09,693/-, but in fact assessee has made investment of ₹ 43,40,457/- and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into it and taken the cumulative figure of investment in TATA Assets Management. The ld. CIT(A) took cognizance of these switch over of investments and having verified from the details, he accepted the contention of the assessee that the total investment was of ₹ 43,40,457/- as against ₹ 61,09,693/- taken by the Assessing Officer. Accordingly, the ld. CIT(A) deleted the addition. For the sake of reference, we extract the relevant portion of the order of the ld. CIT(A) as under:- 7(1)(i) I have examined the facts and circumstances of the case. I have perused the findings of the Assessing Officer in the assessment order and I have also considered the submissions of the appellant. It is imperative first to examine the difference in investments found by the AO and the investments accepted by the assessee. The comparative position is as under- S.No Investments As per AO Actual Investment as per assessee Appellant Wife Daughter Total Appellant and daughter Mrs. Nazia Iqbal Wife ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) It is evident that there are two differences in the value of investments examined by the AO for which additions have been made and the investments accepted by the appellant as per details above. The first difference is with regard to HDFC Mutual fund. The AO has made the addition for an amount of ₹ 2,88,757/- whereas the assessee accepts an investment of ₹ 2,86,757/-. The difference appears to be a typographical error in so far as the AO has mentioned the figure of ₹ 2,86,757/- in the body of order at page 4 of the assessment order which is same as that accepted by the assessee but while making the addition the figure inadvertently haS been taken as ₹ 2,88,757/-. The investment in HDFC Mutual fund is therefore accepted as ₹ 2,86,757/-. 7(1)(iii) The only other difference in with regard to investments made with TATA Assets Management. The AO has found investments of ₹ 27,67,236/- whereas the assessee has accepted the investments of ₹ 10,00,000/-. It is therefore imperative to examine this difference. The assessee has submitted that the difference has been caused by switches i.e. the same investment being rotated over a period of time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 7,00,000 18 47,167.20 2023061 TATA Indo Global Infrastructure Fund - Total ₹ 47,167.2 26 1,00,000 1969584 TATA Equity PE fund 17 37,983 1969584 TATA Indo Global Infrastructure Fund - Total ₹ 1,37,983 Cumulative Total ₹ 8,85,150.2 7(2)(ii) The remaining investments in TATA mutual fund considered as unexplained by the AO are in fact switches from one scheme to another. The details compiled from the details of investments in 26 schemes are as under - S. No. Investment Folio No. Remarks as explained by appellant 1 47,167.2 1483191 Switch Out 2 36,598.56 1483191 It is Switch Out on 14/3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 27,65,237.63. In other words the difference worked out by the AO is explained by the switches from one scheme to another. However, the appellant has worked out his investment in TATA Assets Management Schemes at ₹ 10,00,000/- from the statements of Mutual Funds which were also filed with the AO. 7(2)(iv) On the basis of above examination, it is evident that the total investment by the appellant during the year under consideration is to be taken at ₹ 43,40,457/- as against ₹ 61,09,693/- taken by the AO. The difference of ₹ 17,69,236/- has been explained as above on account of firstly, the typographical error of ₹ 2,2,000/- in the investments in HDFC Mutual Fund and secondly, the difference of ₹ 17,67,236/- on account of switches from one scheme to another in schemes of TATA Assets Management. 6. Aggrieved, the Revenue has preferred an appeal before the Tribunal with the submission that the details furnished by the assessee with regard to the switch over of investment in TATA Assets Management from one scheme to the other were not explained before the Assessing Officer and he has taken a new plea before the ld. CIT(A) and the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to explain the total source of investment of ₹ 43,40,457/- for which assessee had furnished the details before the ld. CIT(A). As per details, assessee had furnished known source of income amounting to ₹ 50,09,986 to explain the investment of ₹ 43,40,457/-. In these details, the dispute as raised before us in the Revenue s appeal is with regard to ₹ 1 lakh from agricultural income; withdrawal of ₹ 3 lakhs from G.P.F.; receipt of ₹ 8.80 lakhs as advance from Mr Mehboob Alam against sale of property; receipt of cash loan from Mohd. Naseem Mansoori of ₹ 2.50 lakhs and redemption of investment in earlier years at ₹ 21,43,986/-. We, therefore, prefer to deal each and every entry in the light of the orders of the ld. CIT(A) as well as the Assessing Officer. 11. With regard to receipt of agricultural income, it was contended that the assessee s family owns agricultural land of 57 hectares and the assessee has earned agricultural income of ₹ 1 lakh. The Assessing Officer disputed this stand of the assessee on the ground that assessee has not disclosed agricultural income in his return of income. But this contention of the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not agree with the findings of the ld. CIT(A) and accordingly we set aside the order of the ld. CIT(A) on this issue and hold that withdrawal of ₹ 3 lakhs from G.P.F. account cannot be considered to be the valid source of investment. 15. With regard to receipt of ₹ 8.80 lakhs from Mr Mehboob Alam for sale of property, assessee has simply placed sale deed/sale agreement through which he alleged to have received an advance of ₹ 8.80 lakhs in cash from Mr. Mehboob Alam. The Assessing Officer asked the assessee to produce the proof of ownership of the property, but it was not produced before him and he accordingly did not accept it to be the source of investment. 16. The ld. CIT(A) accepted it to be source of investment, having observed that once the appellant had claimed receipt of ₹ 8.80 lakhs from Mr. Mehboob Alam on account of intended sale of ancestral property, the Assessing Officer could have examined the person making advance instead of rejecting the claim summarily by stating that proof of ownership was not furnished. The ld. CIT(A) further observed that non-filing of proof of ownership cannot negate receipt of money from a person and in case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee did not place the ownership document before the Assessing Officer. Similar is the position before us and the ld. CIT(A). He simply placed reliance upon the so called sale agreement but could not place ownership document of the property. In the absence of documents for ownership of the property, the factum of execution of sale agreement cannot be accepted. No prudent man will purchase any property from anyone which is not owned by him. Moreover, this is the case where the assessee has raised certain funds for investment and onus is upon him to prove the same. It is for the assessee to place the relevant evidence to establish that he in fact has received the amount of ₹ 8.80 lakhs from the buyer on execution of sale agreement. But assessee has badly failed to discharge his onus. We are, therefore, of the view that the claim of the assessee that receipt of ₹ 8.80 lakhs through execution of sale agreement is also one of the sources of investment, cannot be accepted. Finding no merit in the observations of the ld. CIT(A), we set aside his order on this issue and direct the Assessing Officer to compute the addition accordingly. 20. With regard to receipt of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hd. Naseem Mansoori in India at the relevant point of time, as the loan was given in cash. Otherwise, a loan cannot be given in cash from an NRI living in abroad. Since the onus is upon the assessee to place relevant evidence in this regard, but he did not place the same. We are, therefore, of the view that assessee has not discharged the primary onus which lays on him. Accordingly, the alleged receipt of ₹ 2.50 lakhs in cash from Mohd. Naseem Mansoori cannot be treated to be one of the sources of investment. 25. With regard to the availability of funds of ₹ 23,31,473/- available on account of redemption of investment in earlier years is concerned, we find that before the Assessing Officer, it was contended that the investments were made out of redemption/maturity of earlier years investments in mutual funds with different banks, of which details are as under:- S.No. Bank a/c with bank head Amount received from MF redemption 1 ICICI Bank 69,239.00 2 IDBI Bank 3,60,356.10 3 Cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58,426.13 27/07/2007 (ii) Redemption On 10.9.2007 from Frank Flexi Cap India oppur.(Date of purchase :5/4/05 for ₹ 25,000/-,13/10/05 for ₹ 25,000/-,20/12/2005 for ₹ 50,000/-) 1,42,667.00 13/09/2007 (iii) Redemption on 10/9/2007 from Frank India Prima Fund (Purchases done through SIP from April 2005) 2,31,339.55 13/09/2007 (iv) Redemption on 10/9/2007 from HDFC Equity Fund (Purchases done through SIP from April 2005) 2,74,097.36 13/09/2007 (v) Redemption on 10/9/2007 from ICICI Infrastructure Fund (Purchases done on 31/8/2005 for ₹ 50,000/- and 11/10/2006 for ₹ 50,000/-) 1,51,133.40 13/09/2007 (vi) Redemption on 10/9/2007 from ICICI Dynamic fund (Purchases done on 13/10/2005 for ₹ 50,000/- and 20/12/2006 for ₹ 50,000/-) 1,38,154.59 13/09/2007 (vii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manager FoF Scheme-Growth, Folio No.5033366/86, Purchase dated 22.12.06 for ₹ 1,50,000/- 154,303.50 18/06/2007 (iv) Redemption on 1.6.2007 of 1010 ING Optimix Equity Multi Manager FoF Scheme-Growth, Folio No.5033357/16, purchase dated 22.12.2006 for ₹ 1,50,000/- 154,303.50 18/06/2007 (v) Redemption from Fidelity MF (Date of investment 28.05.2007 ₹ 1,00,000. Redemption date 26/12/2007) 118,051.19 31/12/2007 (vi) Redemption SBI MF :6/7/2007 purchase for ₹ 45,000 date of redemption 26/12/2007 64,503.00 31/12/2007 (vii) Redemption of Fidelity Mutual Fund : 21/03/2004 purchase for ₹ 50,000/- 67,174.31 08/01/2008 (viii) Redemption from SBI Mutual Fund Date of purchase 24/11/2005 date of redemption 24/7/2007 72,441.40 03/08/2007 TOTAL 7,45,552.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but details were not furnished despite of specifically asked by the Assessing Officer. The details of receipt of redemption was filed before the ld. CIT(A). The details of year-wise investments were not furnished in order to ascertain the nature and quantum of capital gain. It is also noticed that the assessee has not offered any capital gain on redemption of these Mutual funds. Even then, the ld. CIT(A) had accepted the claim. In the light of the totality of the facts, this issue was not properly examined by the ld. CIT(A) in the light of year-wise investment in Mutual funds and its redemption and also nature of holdings and nature and quantum of capital gain accrued in the impugned assessment year. We, therefore, set aside the order of the ld. CIT(A) in this regard and restore the matter to the file of the ld. CIT(A) with a direction to re-adjudicate the issue afresh in the light of the evidence furnished before him after obtaining remand report from the Assessing Officer. The ld. CIT(A) is also directed to examine the aspect of capital gain accrued on the redemption of these Mutual Funds to examine the year of investment in Mutual funds. Needless to mention here that proper opp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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