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TMI Blog2022 (7) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion. The fact that transaction for the property was being contemplated is an evidence on record which remains unrebutted. In pursuance thereof, earnest money has been received which remains unrebutted. The name of the purchaser and the address etc. of the witness and the parties to the document is available to the Ld. PCIT as was available to the AO. The terms and conditions stated to have been honored therein vis-a-vis. the parties to the agreement is evidence available on record. The document records that that in case the seller backs out, double the amount of earnest money is to be paid and in case sale is not completed on account of the purchaser, then earnest money is to be forfeited. Sale did not fructify. The evidence is available on record. The ownership of the said asset continues to remain vested with the assessee. In the absence of any evidence or fact rebutting the claim of the assessee, the order passed after due enquiries as per record by the AO cannot be set aside on mere inferences and presumptions. The suspicions of the Ld. PCIT cannot be the basis for setting aside a validly passed assessment order. Law requires the Ld. PCIT to meet the twin conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.2019. This order was subjected to the Revisionary proceedings by the Ld. PCIT this order is under challenge in the present proceedings. 3. The Ld. AR inviting attention to the assessment order and the reply given to the Ld. PCIT submitted that the issue had been enquired into by the AO in detail specifically on this point. It was submitted that only after considering the replies of the assessee, the returned income of the assessee was accepted. The sources of investment for the specific property it was argued were all considered by the AO exhaustively. It was submitted that merely because the AO does not record these, this fact by itself cannot be a factor to reopen a validly concluded assessment proceedings by the Ld. PCIT exercising Revisionary powers u/s. 263 arbitrarily. Heavy reliance was placed upon the following orders passed by the AO: In response to these notices authorised representative of assessee furnished reply along with documents/information called for including the documentary evidence regarding the source of investment for purchase of immovable property on behalf of assessee. The reply of the assessee and documents submitted has been considered and no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the AO has looked into the relevant data on the basis of PAN details available and apparently was satisfied and accepted the flow of money from the said nephew and in the order passed by the Ld. PCIT neither the relationship has been upset nor the fact that the said amount was not available to Shri Sahil Gupta, whose PAN details were available even to the Ld. PCIT. It was argued that no evidence to rebut the affidavit has been taken into consideration to upset the validly passed order by the AO has been placed on record. 3.3. Inviting attention to para 7 of the impugned order, it was submitted, that an amount of Rs. 3,25,000/- had been received by the assessee as earnest money from Shri Yashpal for the contemplated sale of House No. 149, New Darshani Bagi, Manimajra, 0-3 Marlas owned by the assessee. It was submitted that the evidence placed on record was discarded by the Ld. PCIT holding that it was on a plain piece of paper with the Revenue Stamp of Rs. 1/-. The fact that it was the earnest money for a specific property which was forfeited by the purchaser as he was unable to complete the transaction within the stipulated time has not been disputed by the Ld. PCIT. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 lac as advance, and the genuineness of the entire transaction. The AO did not even try to enquire if the deal had actually materialized or not. The evidence, it was submitted, was not upset by the Ld. PCIT. It was discarded holding it to be in house production to concoct a cock and bull story . The fact that the property continues in the possession of the assessee, it was submitted, has also been accepted by the Ld. PCIT. 3.5. Referring to para 8 of the impugned order, it was submitted, that the Ld. PCIT also takes note of the fact that the evidence of gift, earnest money and savings from rent etc. were facts explained to the AO and enquired into by the AO. This fact, it was submitted, is evidenced from para 8 of the impugned order itself. For ready reference, it is extracted hereunder: 8. It is also pertinent to note that in her initial first response to the notices dated 16.7.2019 and 01.08.2019 of the assessing officer for the assessment proceedings, the assessee had submitted that she had received income from rent and construction business during the relevant year. It was only in response to the last notice dated 12.11.2019 of the AO that the assessee presented her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the smallness of the amounts involved and considering the supporting evidences chose possibly not to discuss it in the order. This fact cannot be held against the assessee. 3.11. It was also reiterated that merely because the assessment order is short, the fact remains that the sources of money have been enquired into by the AO. This fact, it was submitted, is evident from the impugned order itself which have been highlighted in various paras of the order. Attention was invited in the said background to the reply of the assessee to the Show Cause Notice issued by the Ld. PCIT which is also extracted at pages 4 and 5 of the impugned order. Referring to the same, it was his submission that the present case is a case of arbitrary exercise of power and based entirely on suspicions. For ready reference, reply extracted in the impugned order heavily relied upon in the present proceedings is reproduced hereunder: this is in reference to your above stated letter and show cause letter u/s. 263 wherein it has been show caused as to why the assessment order dated 23.11.2019 not be cancelled for making fresh assessment. In this regard it is humbly submitted that we had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed that if any adverse action, prejudicial to the interest of the assessee is preferred after considering the reply above, an opportunity to represent and defend the revision of order through personal hearing may kindly be allowed in the interest of justice. 3.12. Accordingly on the basis of these facts and submissions, it was his prayer that in the absence of any incorrect fact taken into consideration by the AO to pass an order after due enquiry, the impugned order may be quashed. The AO considering the smallness of the amount in the case of a gift of Rs. 1 lac from the nephew whose PAN details were available to the AO and in the absence of evidence to the contrary were enquired into has been accepted by him. No infirmity in the acceptance of the said claim, it was submitted, has been pointed out by the Ld. PCIT except for the suspicion of the Ld. PCIT. The arbitrary whim that it should have been enquired into to a greater degree, it was submitted, is contrary to the legal position. It was his submission that in the absence of any incorrectness of acceptance of assessee's claim by the AO, the decision of the Ld. PCIT for holding the belief that a greater enquiry shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, these have been discarded on the grounds of being bald documents. The Ld. PCIT having gone through the records of the AO has noticed that supporting documents have been called forth which have been examined and the case of the assessee has been accepted. It is inferred by the Ld. PCIT that on account of this exercise, there is an error in the order which is prejudicial to the interests of the Revenue. We find on going through the impugned order that there is no basis for the said inference. The relationship of Shri Sahil Gupta as the nephew of the assessee has not been assailed. His PAN details made available to the AO and presumably enquired into have not been upset by the Ld. PCIT. The fact that he has given a gift of Rs. One Lac accepted by the AO has not been shown to be an incorrect decision of the AO. Thus, the decision to further enquire into the said issue stated on an affidavit which have remained unrebutted, we find cannot be upheld. Without upsetting the contents of the affidavit, the exercise in the peculiar facts of the present case is an arbitrary exercise of power. Hence, cannot be sustained in law. Similarly, the documents relied upon in support of the earnest mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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