Saj Properties (P) Ltd., Jaipur V. ITO, New Delhi

CO 130/DEL/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7181 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN KOHLI
• Assessee Lawyers: K P GARG; VEENEET GARG
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund; Additional evidence
• Section: 68; 69; 144

Judgement Text

ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 535/DEL/2010 A.Y. : 2006-2007 INCOME TAX OFFICER, WARD 7(2), ROOM NO. 306, CR BUILDING, NEW DELHI VS. M/S SAJ PROPERTIES P LTD., S-137, PANCHSHEEL PARK, NEW DELHI (PAN/GIR NO. : AAKCS1529B) AND C.O. NO. 130/DEL/2011 (IN ITA NO. 535/ DEL/2010) A.Y. 2006-2007 M/S SAJ PROPERTIES P LTD., VS. ITO, WARD 7(2), ROOM NO. 306, C/O NL BHATIA, CR BUILDING, NEW DELHI 431, MAHIMAS TRINITY, PLOT NO. 5, SWEJ FARM, NEW SANGANER ROAD, SODALA, JAIPUR - 302018 (PAN : AAKCS1529B) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. VEENEET GARG, ADV. & SH. KP GARG, CA DEPARTMENT BY : NIRANJAN KOHLI, C.I.T. (D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM PER SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE EMANATE OUT OF ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) DATED 13.11.2009 AND PERTAIN TO ASSESSMENT YEAR 20 06-07. ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 2 2. ASSESSEES CROSS OBJECTION LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING THE C.O. ACCORDINGLY, THE C.O. IS DISMISS ED AS NOT PRESSED. 3. THE ISSUES RAISED IN THE REVENUES APPEAL READ AS UNDER:- (I) LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED, I N LAW AND ON THE FACT AND CIRCUMSTANCES OF THE CASE, IN DELET ING THE ADDITION OF ` 3,47,60,000/- MADE BY THE ASSESSING OF FICER U/S. 68 OF THE IT ACT. (II) LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED, IN LAW AND ON THE FACT AND CIRCUMSTANCES OF THE CASE, IN DELET ING THE ADDITION OF ` 3,16,28,456/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE IT ACT. 4. IN THIS CASE ASSESSMENT WAS FRAMED U/S. 144 OF T HE IT ACT. ASSESSING OFFICER HAS ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE REGARDING THE FOLLOWING:- I) IN VIEW OF THEIR FAILURE TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE GIVERS OF ` 3,47,60,000/- (` 5,15,42,410/- LESS ` 1,67,82,410) FRESH UNSECURED LOANS THE SAME SHOULD NOT BE ADDED BACK TO YOUR NET PROFIT IN VIEW OF THE PROVISIONS OF SEC TION 68 OF THE IT ACT, 1961. ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 3 II) IN THE ABSENCE OF AN EXPLANATION AS TO THE SOUR CE OF FUNDS, ` 3,16,28,456/- (` 4,93,13,456/- LESS ` 1,76,85,000/-) SUPPOSEDLY INCURRED ON FRESH PURCHAS E OF LAND SHOULD NOT BE TREATED AS UNEXPLAINED INVESTMENT AS PER PROVISIONS OF SEC. 69 OF THE IT A CT, 1961. 4.1 NO COMPLIANCE WAS MADE IN THIS REGARD, HENCE, ASS ESSING OFFICER ADDED UNEXPLAINED RECEIPTS U/S. 68 AMOUNTING TO ` 3 ,47,60,000/- AND UNEXPLAINED INVESTMENT U/S. 69 AMOUNTING TO ` 3,16,2 8,456/-. 5. IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME T AX (APPEALS), ASSESSEE SUBMITTED FRESH EVIDENCES AND MADE SUBMISSI ONS. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBTAINED THE RE MAND REPORT FROM THE ASSESSING OFFICER IN THIS REGARD. LD. CO MMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT CREDITWORTHINESS OF THE UNSECURED LOANS HAS BEEN EXPLAINED BY THE ASSESSEE IN ITS SUB MISSION ALONGWITH EVIDENCES WHICH HAVE BEEN EXAMINED BY THE ASSESSING OFFICER AT THE TIME OF REMAND REPORT. IN THE REMAND REPORT, THE A SSESSING OFFICER HAS EXAMINED THE UNSECURED LOANS AMOUNTING TO ` 3,47 ,60,000/- RECEIVED BY THEM DURING THE PERIOD. THE ASSESSIN G OFFICER HAS STATED AS BELOW IN THE REMAND REPORT:- ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 4 THE A.R. OF THE ASSESSEE COMPANY HAS SUBMITTED AS ADDITIONAL EVIDENCES BEFORE THE LD. COMMISSIONER O F INCOME TAX (APPEALS)-X THE BANK ACCOUNT STATEMENTS OF THE LOAN GIVERS FOR PROVING THE SOURCE OF UNSECU RED LOANS RECEIVED THROUGH BANKING CHANNELS. FURTHER, THE LD. AUTHORISED REPRESENTATIVE HAS ALSO FURNISH ED COPIES OF THE PAST ITRS OF THE LOAN GIVERS FOR PROV ING THEIR CREDITWORTHINESS. THEREFORE, SO FAR AS THE CHEQUE RECEIPTS OF UNSECURED LOANS IS CONCERNED, TH E CONTENTION OF THE ASSESSEE COMPANY APPARENTLY SEEMS TO BE SOUND. HOWEVER, IT IS SEEN FROM THE ABOVE BREAK UP THAT THE ASSESSEE COMPANY HAS ALSO RECEIVED UNSECURED LOAN IN CASH. THE LD. AUTHORISE D REPRESENTATIVE DID NOT FURNISH ANY PROOF IN SUPPOR T OF THE CREDITWORTHINESS AND GENUINENESS OF THESE TRANSACTIONS. 5.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT ASSESSING OFFICER HAS STATED THAT THE SOME AMOUNTS HAVE BEEN PAID BY CASH. IT HAS ALSO BEEN STATED BY THE ASSESSIN G OFFICER IN THE REMAND REPORT THAT THE LD. AUTHORISED REPRESENTATIVE DID NOT FURNISH ANY PROOF IN SUPPORT OF THESE CASH LOANS/ TRANSACTI ONS. LD. ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 5 COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVE D THAT THE PERUSAL OF THE DETAILS SHOWS CASH TRANSACTIONS IN C ONNECTION WITH THE CASH PAID FOR LAND REGISTRATION. IT WAS SUBMITTED B EFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT SUCH CA SH IS REQUIRED FOR LAND REGISTRATION FOR VARIOUS EXPENSES. ASSESSE E FURTHER EXPLAINED THAT THE GENUINENESS OF THE TRANSACTIONS AND CREDIT WORTHINESS OF THE CREDITORS STAND ESTABLISHED BY THEIR CONFIRMATIONS AND BANK ACCOUNT DETAILS. LD. COMMISSIONER OF INCOME TAX (APPEALS) F URTHER OBSERVED THAT ASSESSING OFFICER HAS NOT POINTED OUT ANY DIS CREPANCY AFTER HAVING EXAMINED THE COPIES OF PAST ITRS OF THE LOAN GIVERS. HE FURTHER OBSERVED THAT IT IS SEEN THAT THEIR CONFIRMATIONS R EFLECT THE CASH LOANS ALSO. HENCE, HE HELD THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED. 6. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT IN THE REMAND REPORT ASSESSING OFFICER HAS ACCEPTED THE CORRECTN ESS OF THE LOAN TO THE EXTENT THAT THE SAME WAS RECEIVED FROM BANK, EX CEPT THE AMOUNT WHICH WAS RECEIVED IN CASH. ASSESSING OFFICER HA S OPINED THAT EVIDENCES FOR CASH LOAN WAS NOT PROVIDED. IN THIS REGARD, WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED THAT THE CASH ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 6 AMOUNT WAS REQUIRED FOR REGISTRATION PURPOSES AND TH E ASSESSEE HAS SUBMITTED THE CONFIRMATIONS FROM THE PARTIES. THE ITRS OF THE LOAN GIVERS HAS ALSO GIVEN. IN THIS CASE ASSESSEE HAS ALSO SUBMITTED THE BANK STATEMENT OF THE LOAN GIVERS FOR PROVING THE S OURCE OF UNSECURED LOAN. HENCE, THE ASSESSEE HAS DISCHARGED ITS ONUS. THUS WE FIND THAT OUT OF THE LOAN OF ` 3,47,60,000/-, LOAN OF ` 3,25, 00,000/- WERE ACCEPTED BY THE ASSESSING OFFICER AND THE CONTENTI ON OF THE ASSESSEE IN THIS REGARD WAS CONSIDERED SOUND. IT WAS ONLY WITH REGARD TO THE BALANCE CASH LOAN THAT ASSESSING OFFICER HAS GIVEN HIS OBJECTION. IN THIS REGARD, WE FIND THAT THIS CASH WAS REQUIRED FO R LAND REGISTRATION AND THE ASSESSEE HAS SUBMITTED THE CONFIRMATIONS AND THE PAST ITR RECORDS OF THE LOAN GIVERS. IN OUR CONSIDERED OPI NION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) IN DELETING THE ADDITION. ACCORDINGLY, WE UPHOLD T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD. 8. AS REGARD ANOTHER ADDITION U/S. 69 OF ` 3,16,28, 456/- . THE ASSESSING OFFICER HELD THAT THE SAME WAS INCURRED F OR FRESH PURCHASE OF LAND AND HENCE SHOULD BE TREATED AS UNEXPLAINED INVESTMENT U/S 69 OF THE IT ACT. 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT THESE CASH PAYMENTS WERE SHOWN IN THE LAND ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 7 FILLING WORK AND THE ASSESSING OFFICER HAS STATED IN THE REMAND REPORT THAT NO TDS WAS DEDUCTED ON THESE PAYMENTS. IN THE IR REJOINDER, THE ASSESSEE SUBMITTED THAT THESE CASH PAYMENTS WERE MADE TOWARDS LAND FILLING WORK AND THE ASSESSING OFFICER HAS NO T POINTED OUT ANY DISCREPANCY FOR THE SAME BUT HAS ONLY MADE A GENERAL IZED REMARK REGARDING CASH PAYMENTS FOR LAND FILLING WORK. CON SIDERING THE SAME, LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE OF 5 LACS. 10. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 11. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THA T IN THE SUBMISSIONS BEFORE THE LD. COMMISSIONER OF INCOME TA X (APPEALS) ASSESSEE HAS SUBMITTED THAT THE ASSESSEE COMPANY DEAL S IN SALE AND PURCHASE OF REAL ESTATE. AS A PART OF ITS BUSINESS OPERATIONS, THE COMPANY HAD ACQUIRED LAND AGGREGATING TO ` 3,16,28,4 56/- DURING THE ASSESSMENT YEAR UNDER APPEAL. ADDITION TO THE SA ID LAND IS DULY REFLECTED AS STOCK IN HAND IN THE AUDITED BALANCE S HEET OF THE COMPANY. ASSESSING OFFICER HAD TREATED THE SAID A DDITION TO LAND AS UNEXPLAINED INVESTMENT AND ADDED THE SAME U/S. 69 OF THE IT ACT. IT WAS FURTHER SUBMITTED THAT A PERUSAL OF THE REMAND RE PORT WOULD REVEAL THAT THE ONLY GROUND FOR MAKING THE IMPUGNED ADDITIO N IS THE ABSENCE ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 8 OF AN EXPLANATION AS TO THE SOURCE OF FUNDS ON FRES H PURCHASE OF LAND. AGAINST THE ABOVE SUBMISSIONS, LD. COMMISSIONER OF INC OME TAX (APPEALS) HAS NOTED THAT WITH REGARD TO THE CASH PA YMENT UNDER THE HEAD LAND FILLING WORK AS NOTED IN THE REMAND REPORT THAT NO TDS WAS DEDUCTED IN THESE PAYMENTS. IN THEIR REJOINDER, THE ASSESSEE HAS STATED THAT THESE CASH PAYMENTS WERE MADE TOWARDS LAN D FILLING WORK AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY FOR THE SAME BUT HAS ONLY MADE A GENERALIZED REMARK REGARDIN G CASH PAYMENTS FOR LAND FILLING WORK. IN THESE CIRCUMSTANC ES, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS HELD THAT T HE DISALLOWANCE OF ` 5 LACS IS UPHELD. 11.1 WE FIND THAT LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS DEALT THIS ISSUE RATHER LACONICALLY AND BY NONSPEAKING OR DER. ASSESSING OFFICER IN THE REMAND REPORT HAS CLEARLY DOUBTED T HE INVESTMENT SHOWN IN LAND AMOUNTING TO ` 3,16,28,456/-. COPY O F THE REMAND REPORT IN THIS REGARD WAS NOT PRODUCED BEFORE US. NOR THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DEALT WITH THE REMAND REPORT FULLY IN HIS APPELLATE ORDER. UNDER THE CI RCUMSTANCES, INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH, AF TER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. AC CORDINGLY, THE ITA NO. 535/DEL/2010 & CO NO. 130/DEL/2011 9 ISSUE STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPO RTUNITY OF BEING HEARD. 12. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND ASSESSEES CROSS OBJECTION STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/4/2012. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE:- 20/4/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES