Parulben Bipinbhai Patel, Ahmedabad V. The Income tax Officer,Ward-7(1), Ahmedabad

CO 81/AHD/2012

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 1984 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained investment; Opportunity of being heard; Cost of acquisition; Onus to prove
• Section: 234B; 133(6); 131; 68; 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER AN D SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA NO. 169/AHD/2012 / ASSESSMENT YEAR: 2008-2009 PARULBEN B. PATEL, 118/1, PATEL VAS, GOTA, TAL: DASCROI, AHMEDABAD .. APPELLANT PAN : AHZPP 5309 F VS INCOME TAX OFFICER, WARD 7 (1), AHMEDABAD .. RESPONDENT ./ ITA NO. 219/AHD/2012 & CO NO.81/AHD/2012 / ASSESSMENT YEAR: 2008-2009 INCOME TAX OFFICER, WARD 7 (1), AHMEDABAD .. APPELLANT VS PARULBEN B. PATEL, 118/1, PATEL VAS, GOTA, TAL: DASCROI, AHMEDABAD .. RESPONDENT & PAN : AHZPP 5309 F CROSS-OBJECTOR ASSESSEE(S) BY : SHRI S.N. DIVATIA, AR REVENUE BY : SHRI DINESH SINGH, SR. DR / DATE OF HEARING 12/02/2016 /DATE OF PRONOUNCEMENT 31/03/2016 / O R D E R PER SHAILENDRA K. YADAV, JUDICIAL MEMBER: THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD DATED 14.11.2011 FOR ASSESSMENT YEAR 2008 -09 AND THE ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 2 PRESENT CROSS OBJECTION IS PRESENTED AT THE INSTANC E OF ASSESSEE IN APPEAL OF THE REVENUE, I.E., ITA NO. 219/AHD/2012 I N ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE IN HER APPEAL READ AS UNDER:- IN THE CIRCUMSTANCES AND FACTS OF THE CASE AND ON T HE LEGAL AND OTHER GROUNDS, THE CIT(A) HAS ERRED IN UPHOLDING TH E ADDITION OF RS. 20,00,000/- IN THE FOLLOWING MATTER: 1. THE LD. CIT(A) HAS ERRED IN MAKING INCOME ADDITION U/S - 68 OF THE ACT IN RESPECT OF RS. 20 LACKS LOANS RECEIVE D THROUGH BANKING CHANNELS FROM JAYAMBE TRADERS AND SMT. REKHA N. PATEL. THE PARTIES ARE ASSESSED TO INCOME-TAX, HAVI NG PAN AND ALSO CONFIRMING THE FACT OF GRANTING LOAN. MORE SO, WHEN THE A.O. HAS MADE INCOME ADDITION WITHOUT INVITING OBJECTIONS FROM THE APPELLANT WITHOUT GIVING REASON ABLE OPPORTUNITY OF BEING HEARD. IT BE HELD SO. 2. THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATION TH E FOLLOWING GROUNDS OF APPEAL. - THE ID. CIT(A) HAS ERRED IN CHARGING INTEREST U/S - 234B & 234C WITHOUT PROVIDING . THE CALCULATION THEREOF AND THAT YOUR APPELLANT DENIES THE CHARGEABILITY OF INTEREST . - THE A.O. HAS GROSSLY ERRED IN ISSUING NOTICE U /S - 271(L)(C) FOR THE REASON THAT THE NOTICE IS ISSUED WITHOUT RE CORDING THE SATISFACTION IN THE ASSESSMENT ORDER WHICH IS T HE PREREQUISITE CONDITION FOR ISSUANCE OF NOTICE. IN A BSENCE OF RECORDING OF SUCH SATISFACTION THE NOTICE ITSELF IS ILLEGAL AND BADE IN LAW. IT MAY BE HELD SO. 3. YOUR APPELLANT THEREFORE PRAYS THAT THE RELIEF MAY BE GRANTED ON ALL GROUNDS BY DELETING THE ADDITION OF INCOME A ND HOLDING THAT THE INTEREST CHARGE IS ILLEGAL AND THA T THE PENALTY NOTICE ISSUED U/S - 271(L)(C) BE QUASHED. 2.1 THE SOLITARY GROUND TAKEN BY THE REVENUE IN ITS APPEAL READS AS UNDER:- ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 3 THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE INCOME ADDITION OF RS.1,32 ,97,025/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHA SES OF PROPERTY U/S 69 OF THE ACT. 2.3 THE GROUNDS TAKEN BY THE ASSESSEE IN HER CROSS- OBJECTION READ AS UNDER:- 1. THE LEARNED INCOME TAX OFFICER HAS ERRED IN STATING IN GROUND NO.1 OF THE APPEAL THAT THE ASSESSEE HAS MAD E AN INVESTMENT ON ACCOUNT OF AN UNEXPLAINED INVESTMENT IN PURCHASE OF PROPERTY. THE RESPONDENT DENY TO HAVE MADE THE ALLEGED INVESTMENT WHEN THE ACTUAL CONSIDERATION FO R PURCHASE OF LAND PROPERTY IS MADE BY TWO OTHERS TO THE EFFECT OF RS.1,32,97,025/- 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION OF RS.20,00,000/- U/S 68 OF THE ACT AS UNEXPLAINED CAS H CREDIT EVEN THOUGH THE DEPOSITORS ARE ASSESSED TO TAX AND HAVE CONFIRMED THE DEPOSITS. RELIANCE IS PLACED ON GUJA RAT HIGH COURT DECISION IN THE CASE OF ROSHNI BUILDERS. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE HAS PURCHASED AN IMMOVABLE PROPERTY, I .E. LAND, ON A TOTAL CONSIDERATION OF RS.1,32,94,025/-. THE ASSESSEE WAS ASKED TO FURNISH THE SOURCE OF THE SAME ALONGWITH REGISTERED DEED OF THE PROPERTY. THE ASSESSEE FURNISHED BEFORE THE ASSESSING OFFICER THE REGISTERED DEED OF THE PROPERTY WHICH WAS REGISTERED IN THE SUB-REGIST RAR OFFICE, GANDHINAGAR. ACCORDING TO THE SALE DEED, THE LAND W AS SOLD BY SEVEN PERSONS TO THE ASSESSEE. ACCORDING TO THE SALE DEE D, THE ASSESSEE IS THE SINGLE PURCHASER OF THE PROPERTY AND A STAMP DUTY O F RS.6,52,500/-- WAS BORNE OUT BY THE ASSESSEE. REGARDING THE SOURCE , THE ASSESSEE HAS STATED THAT HER TOTAL INVESTMENT WAS ONLY RS.6,50,0 00/- AND REST OF THE AMOUNT INCLUDING STAMP DUTY EXPENSES WERE BORNE OUT BY TWO ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 4 PERSONS NAMELY SHRI ARVIND L. PATEL AND SHRI VINOD SOLANKI. AS PER THE ASSESSEE, THE TOTAL INVESTMENT MADE AS PER THE FOLLOWING:- PURCHASE COST - RS.1,32,94,325/- STAMP DUTY - RS. 6,52,700/- ----------------------- TOTAL INVESTMENT RS.1,39,47,025/- ============ THE DETAILS OF PAYMENT MADE BY DIFFERENT PERSONS WA S CLAIMED AS UNDER:- PARULBEN B. PATEL RS. 6,50,000/- BY CASH ARVIND L. PATEL RS. 65,00,000/- BY PAYORDER ARVIND L. PATEL RS. 4,50,000/- BY CASH VINOD SOLANKI RS. 58,94,325/- BY PAYORDER VINOD SOLANKI RS. 4,52,700/- BY CASH -------------------- TOTAL RS.1,39,47,025/- =========== 3.1 THE ASSESSEE IN SUPPORT OF HER CONTENTION FURNI SHED THE AFFIDAVITS MADE BY THE ABOVE PERSONS ON NON-JUDICIA L STAMP PAPER. SHE HAS ALSO FURNISHED THE COPY OF RETURN OF INCOME OF SHRI ARVIND L. PATEL, HOWEVER SHRI VINOD SOLANKI DID NOT FILE THE RETURN OF INCOME. THE BANK STATEMENT OF AFORESAID PERSONS WAS PRODUCE D BEFORE THE LOWER AUTHORITIES ALONGWITH A MEMORANDUM OF UNDERST ANDING. ON PERUSAL OF BANK STATEMENT OF SHRI ARVIND L. PATEL A ND SHRI VINOD SOLANKI, IT WAS NOTICED THAT BOTH THE PERSONS HAD D EPOSITED RS.65,00,000/- AND RS.58,94,325/- ON THE SAME DAY I .E., ON 03.10.2007 IN CASH AND MADE PAYORDERS. THE ASSESSING OFFICER , A FTER REJECTING THE CONTENTIONS OF THE ASSESSEE, TREATED THE AMOUNT IN QUESTION AS UNEXPLAINED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3.2 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF THE AS SESSEE AND HAVING ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 5 CONSIDERED THE SAME, THE CIT(A) DELETED THE ADDITIO N IN QUESTION, WHICH HAS BEEN OPPOSED ON BEHALF OF THE REVENUE, INTER ALIA, SUBMITTING THAT THE CIT(A) ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.1,32,97,025/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF PROPERTY U /S 69 OF THE INCOME-TAX ACT. ACCORDINGLY, THE DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT THE ORDER OF THE CIT(A) MAY BE SET A SIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, T HE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). 3.3 AFTER GOING THROUGH THE RIVAL CONTENTIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS PURCHASED IMM OVABLE PROPERTY AND THE TOTAL INVESTMENT OF RS.1,39,47,025/- WAS MA DE IN THE SAID PURCHASE. THE ASSESSEE EXPLAINED THAT SHE HAD INVES TED ONLY RS.6,50,000/-- IN THE PURCHASE AND THE REST OF THE AMOUNT WAS BORNE BY TWO OTHER PERSONS NAMELY, SHRI ARVIND L. PATEL AND SHRI VINOD SOLANKI. THE ASSESSEE STATED BEFORE THE ASSESSING O FFICER THAT THE INVESTMENT WAS MADE BY OTHER PERSONS AND THEY HAVE ENTERED A MOU FOR THAT PURPOSE. THE ASSESSING OFFICER ALSO NOTED FROM THE BANK ACCOUNTS OF THE OTHER TWO PERSONS THAT FOR MAKING T HE PAY ORDERS, THE PERSONS HAVE DEPOSITED CASH IN THE BANK ACCOUNT ON THE SAME DATE. THE ASSESSING OFFICER AFTER CONSIDERING THE POSITIO N OF THE RETURN OF INCOME OF OTHER PERSONS AND THE FACT THAT ONE OF TH EM WAS NOT HAVING A PAN HELD THAT THE PERSONS DID NOT HAVE CREDITWORTHI NESS. HE ACCORDINGLY HELD THAT IT WAS AN UNEXPLAINED INVESTM ENT U/S. 69 OF THE ACT BY THE ASSESSEE. THE STAND OF THE ASSESSEE, I N THIS REGARD, WAS THAT SINCE IT WAS NOWHERE CLAIMED BY THE ASSESSEE THAT T HE INVESTMENT HAD ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 6 BEEN MADE BY HER, ADDITION U/S. 69 OF THE ACT COULD NOT BE MADE. THE INVESTMENT HAS BEEN MADE UNDER THE ARRANGEMENT OF A N MOU AND THE OTHER PERSONS HAVE A BENEFICIAL INTEREST IN THE PRO PERTY. IN THIS REGARD, WE FIND THAT THE ASSESSEE HAS MADE INVESTMENT OF RS .6,50,000/- ONLY IN THE PROPERTY AND THE OTHER TWO PERSONS NAMELY; SHRI ARVINDBHAI PATEL AND SHRI VINODBHAI SOLANKI HAS MADE THE INVESTMENT OF RS.65,00,000/- AND RS.58,94,325/- RESPECTIVELY. THE INVESTMENT HAS BEEN MADE UNDER THE ARRANGEMENT OF AN MOU AND SAME WAS ACCEPTED BY THE OTHER TWO PERSONS. IT IS NOT IN DISPUTE THAT THE PAY-ORDERS HAVE BEEN PURCHASED FROM THEIR BANK ACCOUNTS AND HAVE BEEN GIVEN TO THE REVENUE AUTHORITIES. THEREFORE, THE DECISION OF THE ASSESSI NG OFFICER HOLDING THAT THE INVESTMENT BELONGED TO THE ASSESSEE WAS NO T JUSTIFIED AND ADDITION U/S. 69 CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE CIT(A) HAS RIGHTLY DELETED THE ADD ITION IN QUESTION. THE CIT(A) HAS ALSO RIGHTLY OBSERVED THAT THE SOURC E OF INVESTMENT BY THE OTHER TWO PERSONS, WHO HAVE OWNED THE AMOUNT OF INVESTMENT IN THE LAND, WAS NOT CLEAR. HE ALSO POINTED OUT THAT SINCE THE OTHER TWO PARTIES HAVE OWNED THE INVESTMENT, THE ASSESSING OF FICER SHOULD HAVE TO INVESTIGATE THE SOURCE OF INVESTMENT IN THEIR RE SPECTIVE HANDS BY INITIATING APPROPRIATE PROCEEDINGS AND IN CASE THEY WERE NOT ASSESSED WITH THE ASSESSING OFFICER, THE CONCERNED ASSESSING OFFICER SHOULD HAVE TO PASS ON THE INFORMATION TO THE JURISDICTION AL ASSESSING OFFICER FOR TAKING THE NECESSARY ACTION. HAVING OBSERVED S O, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION IN QUESTION. TH US, IN OUR OPINION, THESE REASONED FININGS OF THE CIT(A) DO NOT REQUIRE ANY INTERFERENCE FROM OUR SIDE; WE UPHOLD THE SAME. ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 7 4. NEXT ISSUE IS WITH REGARD TO THE ADDITION U/S 68 OF THE ACT IN RESPECT OF RS.20 LAKHS LOAN RECEIVED THROUGH BANKIN G CHANNELS FROM JAYAMBE TRADERS AND SMT. REKHA N. PATEL. 4.1 THE FACTS OF THE CASE ARE THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAS TAKEN LOAN FROM JAY AMBE TRADERS AND SMT. REKHA N. PATEL OF RS.10 LAKHS EACH. THE ASSESSEE WAS ASKED TO FURNIS H THE EVIDENCE FOR THE SAME AND THE ASSESSEE FURNISHED A CONFIRMATION LETTER SHOWING PAN FROM BOTH THE PARTIES. THE ASSESSING OFFICER MA DE ADDITION OF THIS AMOUNT U/S 68 OF THE ACT ON THE GROUND THAT, A PART FROM CONFIRMATION LETTER, THE ASSESSEE DID NOT FURNISH A NY FURTHER EVIDENCE BY WHICH THE CREDITWORTHINESS AND GENUINENESS OF TH E TRANSACTION COULD BE PROVED. 4.2 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF THE AS SESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) DISMISSED THIS GROU ND OF THE ASSESSEE. THE AFORESAID ORDER OF THE CIT(A) HAS BEEN OPPOSED ON BEHALF OF THE ASSESSEE, INTER ALIA, SUBMITTING THAT THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.20 LAKHS, THOUGH THE AMOUNT OF RS.20 LAKHS WAS RECEIVED THROUGH THE BANKING CHANNEL FROM JAY AMBE T RADERS AND SMT. REKHA N. PATEL. THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THESE PARTIES ARE ASSESSED TO INCOME -TAX, HAVING PAN AND ALSO CONFIRMED THE FACT OF GRANTING LOAN. HE F URTHER CONTENTED THAT THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT INVITING OBJECTIONS FROM THE ASSESSEE AND WITHOUT GIVING REA SONABLE OPPORTUNITY OF BEING HEARD. ON THE OTHER HAND, LD. DEPARTMENTAL ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 8 REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORIT IES BELOW IN THIS REGARD. 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSING OFFICER MADE AD DITION U/S 68 OF THE ACT IN RESPECT OF RS.20 LAKHS LOAN RECEIVED THROUGH BANKING CHANNELS FROM JAYAMBE TRADERS AND SMT. REKHA N. PATEL. IT IS NOT IN DISPUTE THAT THESE PARTIES ARE ASSESSED TO INCOME-TAX, HAVI NG PAN AND ALSO THEY HAVE CONFIRMED THE FACT OF GRANTING LOAN TO TH E ASSESSEE. MOREOVER, IT IS ALSO PERTINENT TO NOTE THAT THE ASS ESSING OFFICER HAS MADE THIS ADDITION WITHOUT INVITING OBJECTIONS FROM THE ASSESSEE AND WITHOUT GIVING REASONABLE OPPORTUNITY OF BEING HEAR D. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSING OFF ICER HAS ISSUED ANY SUMMONS TO THE RESPECTIVE PARTIES. IN THIS CASE, W E FIND THAT THE DEPOSITORS IN THIS CASE ARE ESTABLISHED THEIR IDENT ITY AND GENUINENESS OF THE TRANSACTION AS THE TRANSACTIONS WERE ROUTED THROUGH THE BANKING CHANNEL; MORE SO, THE ASSESSEE HAS SUBMITTED THE CO NFIRMATION FROM THE TWO DEPOSITORS, INDICATING THE PAN AND ADDRESS OF THE CONCERNED. WITH REGARD TO CREDITWORTHINESS, THE PRIMARY ONUS T O PROVE THE UNSECURED LOAN WAS ESTABLISHED BY THE ASSESSEE BY P ROVIDING THE NAME, ADDRESS AND PAN OF THE DEPOSITORS. THUS, THE ONUS WAS SHIFTED UPON THE ASSESSING OFFICER TO PROVE THAT THE CONTEN TION OF THE ASSESSEE WAS NOT CORRECT BY MAKING NECESSARY ENQUIRIES UNDER THE POWERS VESTED U/S 133(6) AND 131 OF THE INCOME-TAX ACT. THERE IS NO MATERIAL EVIDENCE ON RECORD TO SUGGEST THAT THE ASSESSING OF FICER HAS DISCHARGED HIS ONUS, I.E, THE BURDEN OF PROOF; THER EFORE, THE ADDITION IN QUESTION IS NOT JUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED. ITA NOS. 169 & 219/AHD/2012 (CROSS) & CO NO.81/AHD/2012 - PARULBEN BIPINBHAI PATEL AY : 2008-09 9 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED, WHILE THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. THE CROSS-OBJECTION FILED BY THE ASSESSEE SIMPLY SUPPORTS THE ORDER OF THE LD. CIT(A) DELETING THE INCOME ADDITIO N OF RS.1,32,97,025/, WHICH IS TAKEN CARE BY US WHILE DECIDING REVENUES APPEAL (SUPRA). 7. IN THE RESULT, THE APPEAL AND CROSS-OBJECTION OF THE ASSESSEE ARE ALLOWED; WHEREAS THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31ST MARCH 2016 AT AHMEDABAD. SD/- SD/- N.K. BILLAIYA SHAILENDRA K. YADAV (ACCOUNTANT MEMBER) (JUDICI AL MEMBER) AHMEDABAD; DATED 31/03/2016 BIJU T., PS !' #'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD