Income Tax Act, 1961

Section 148

Reassessment - Denial of natural justice - Alleged - Unexplained investment in property

Assessee was doing business in Saudi Arabia. AO found that assessee had purchased 28.73 cents of land from Mr. M. AO issued notice under section 148. It was submitted that as per the registered document, 13.73 cents of land was purchased on 6-11-2004 and 15 cents of land had been purchased on 15-12-2004. Mr. M had stated that he had entered into an agreement with his brother and his wife for selling the property. AO had as a consequence from statement recorded from one brother of the seller, who had asserted that he had received consideration of Rs. 8,50,000 per cent of land, took the stand that purchase cost of 28.73 cents of land by assessee from Mr. M was at the rate of Rs. 8,50,000 per cent and the total consideration was Rs. 2,44,20,500 and worked out the on-money payment at Rs. 1,92,70,500. AO worked out the cash flow deficit at Rs. 2,23,23,046 and made an addition thereof as unexplained income of assessee invested in purchase of property. Held: CIT(A) recorded that seller had not filed any return of income admitting the income in his sworn statement. Revenue had not produced any evidence to show whether brother of seller had admitted any income from the said transaction. This stand of the Revenue as to whether said on-money which was allegedly admitted by brother of seller had led to an assessment of higher capital gain tax or whether the said amount was assessed under any other heads was also not known. There was violation of principles of natural justice also, issues in this appeal must be restored to AO for re-adjudication after granting the assessee adequate opportunity. As issues in appeal was restored to AO for re-adjudication after granting adequate opportunity to assessee, the issues raised by assessee in his cross-objection were also restored to AO.

REFERRED :

FAVOUR : Matter remanded.

A.Y. :

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