Wp/14600/2023 Of Deepa Moti Singh v. Income Tax Officer, Ward 4 (1) , Thane And Anr

1/5 425.WP-14600-2023.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO.14600 OF 2023 Deepa Moti Singh ….Petitioner V/s.Income Tax Officer, Ward 4(1) & Ors. ....Respondents---- Mr. Tanmay M. Phadke for petitioner.Mr. Ajeet Manwani a/w. Ms. Samiksha Kanani for respondents – Revenue. ---- CORAM : K. R. SHRIRAM & DR. NEELA GOKHALE, JJ.DATED : 18[th] DECEMBER 2023 P.C. : 1It is petitioner’s case that petitioner (assessee), during theFinancial Year 2015-2016 pertaining to Assessment Year 2016-2017, hadsold a residential flat for Rs.36.51 lakhs and purchased another residentialflat for Rs.35 lakhs. Petitioner has been candid in admitting that though theresidential flat sold during the year was a short term capital asset andpetitioner was liable to pay tax thereon, petitioner did not pay any tax onshort term capital gain because petitioner was advised that as the flat was aresidential flat and in the same year petitioner had purchased another flat,no income was chargeable to tax. 2Petitioner received a show cause notice dated 10[th] February2023 under Section 148A(b) of the Income Tax Act, 1961 (the Act) forAssessment Year 2016-2017. The information, on which reliance was 2 2/5 425.WP-14600-2023.doc placed, read as under : 3Petitioner filed a reply explaining her case and provided copyof the Sale Deed, Purchase Deed and working of capital gain on sale of flatalongwith index II of purchase of said property. Petitioner also explainedthat petitioner has not purchased any property worth Rs.70 lakhs but haspaid only Rs.35 lakhs and the source of Rs.35 lakhs was Rs.5 lakhs loanfrom petitioner’s brother and Rs.30 lakhs by way of home loan disbursed onvarious dates. Copy of petitioner’s brother’s bank statement as well ashousing loan statement was also made available. 4On the working of the short term capital gain for the flat sold,the Assessing Officer came to a finding that taxable capital gain wasRs.13,64,000/-. But strangely in the impugned order dated 29[th] March 2023issued under Section 148A(d) of the Act, the Assessing Officer proceededfurther on the basis “as regards the two immovable properties purchased bythe assessee, the assessee has submitted that, she has purchased only one property for the consideration of Rs.35,00,000/-”. Paragraphs 2 to 6 of the impugned order read as under : 2. As regards the two immovable properties purchased by theassessee, the assessee has submitted that, she has purchasedonly one property for the consideration of Rs.35,00,000/-.However, the assessee has not submitted any documentaryevidences i.e. the confirmation letter of SRO, Vasai-1, to provethat during the year under consideration the assessee haspurchased only one property. Hence the source of investment forpurchase of property for the consideration of Rs.35,00,000/-remains unexplained. 3. As regards, the purchase of property for the consideration ofRs.35,00,000/- on 15.03.2016, the assessee has submitted thesource of investment as Rs.30,00,000/- loan taken from Bank ofBaroda. In supporting of the same the assessee has submittedthe loan statement of Bank of Baroda from 08.06.2016 to25.06.2020. The Balance payment of Rs.5,00,000/- madethrough Bank account of the assessee. In supporting of the samethe assessee has enclosed copy of relevant page of Bankstatement of her brother. 4. As discussed above the Capital gain of Rs.15,10,200/-remains undisclosed and source of purchase of immovableproperty for the consideration of Rs.35,00,000/- remainsunexplained. 5. Inspite of having substantial transaction, the assessee hasfailed to disclose the above transactions by filing ROI for theyear under consideration. 4. As discussed above the Capital gain of Rs.15,10,200/-remains undisclosed and source of purchase of immovableproperty for the consideration of Rs.35,00,000/- remainsunexplained. 5. Inspite of having substantial transaction, the assessee hasfailed to disclose the above transactions by filing ROI for theyear under consideration. 6. Thus, the source of purchased immovable property for aconsideration of Rs.35,00,000/- remains unexplained andCapital gain of Rs.15,10,200/- remains undisclosed for A.Y.2016-17 thereby escaping assessment in the hands of assessee. 5What we find difficult to digest is even in the notice issuedunder Section 148A(b) of the Act or the information annexed thereto,nowhere does it state petitioner has purchased two properties forRs.70 lakhs. Petitioner has provided documents to justify that petitioner has 4/5 425.WP-14600-2023.doc purchased only one property for Rs.35 lakhs and also has explained thesource of funding. If the Assessing Officer has to say that there are twoproperties purchased, either erroneously the figure of Rs.35 lakhs isdoubled and shown as Rs.70 lakhs in the AIS, or the Assessing Officershould provide the details of the second property, which according to theAssessing Officer, petitioner has purchased but has failed to discloseresulting in an escapement of income. An assessee cannot prove negative. Ifthe Assessing Officer has any positive information about the details of thesecond property allegedly purchased, the Assessing Officer was duty boundto apply his mind and confront petitioner with those documents. Simplyrelying on what the AIS states and passing an order is not something whichthis Court can accept. 6Mr. Phadke states that assessee will pay the actual capital gainas will be determined within 30 days of receiving a computation of incomefrom the Assessing Officer. Mr. Phadke further states that assessee will notraise any issue of limitation at any stage. 7We accept this statement as undertaking to this Court and weshould state that we agreed to entertain this petition only in view of thisundertaking given by Mr. Phadke that assessee will pay the capital gainpayable and will not raise the issue of limitation under Section 149(1)(b) ofthe Act. 8The impugned order to the extent of Rs.35 lakhs remaining asunexplained is hereby quashed and set aside. 9The Assessing Officer shall give effect to this order and providecomputation of income to petitioner within four weeks of this order beinguploaded and as per the undertaking given, petitioner shall pay the amountas computed within four weeks thereafter. Even if petitioner feels thecomputation is wrong, the amount will be paid and thereafter, petitionermay take such steps as advised in accordance with law to impugn thecomputation of income. 10Petition disposed accordingly. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)