Mrs Leelaben V Savaliya, Ahmedabad V. The ACIT, Circle-11, Ahmedabad

ITA 1060/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4458 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Cost of acquisition; Corroborative evidences; Onus to prove
• Section: 143(3); 234B; 133(6)

Judgement Text

PAGE 1 OF 9 , IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI MS. MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO. 1060/AHD/2016 / ASSTT. YEAR: 2011-2012 MRS LEELABEN V. SAVALIYA, 42, KEUSHNA NAGAR SOCIETY, INDIA COLONY ROAD, BAPUNAGAR, AHMEDABAD-380 024. PAN: AFUPS6824D VS. A.C.I.T, CIRCLE 11, AHMEDABAD. ( APPLICANT ) ( RESPON D ENT ) ASSESSEE BY : MS URVASHI SODHAN , A. R REVENUE BY : SHRI VINOD TANWANI , SR. D.R / DATE OF HEARING : 01/05/2019 / DATE OF PRONOUNCEMENT: 15/05/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AHMEDABAD- 5, DATED 08/03/2016 ( IN SHORT LD.CIT(A)) ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCO ME TAX ACT, 1961 (HERE- IN-AFTER REFERRED TO AS 'THE ACT') DT.08/03/2016 RE LEVANT TO THE ASSESSMENT YEAR 2011-2012. ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 2 PAGE 2 OF 9 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL; 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE MADE BY AO OF RS. 75, 10, 2367- DEVELOPMENT EXPENSES CLAIMED B Y THE APPELLANT FOR LEVELING OF UNEVEN LAND. LD. CIT (A) OUGHT TO HAVE DELETED D ISALLOWANCE OF GENUINE EXPENDITURE INCURRED BY ACCOUNT PAYEE CHEQUES FOR M AKING LAND MARKETABLE FOR SALE THAT FETCHED HANDSOME PROFIT TO THE APPELLANT. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMIN G ACTION OF AO REJECTING CONFIRMATION LETTERS DIRECTLY & PERSONALLY SUBMITTE D TO AO ON FRIVOLOUS GROUNDS FOR TREATING EXPENDITURE AS NON GENUINE. LD. CIT (A ) OUGHT TO HAVE DELETED DISALLOWANCE APPRECIATING THAT APPELLANT DISCHARGED PRIMARY ONUS WHEN ALL SUPPLIERS PERSONALLY SUBMITTED CONFIRMATION OF WORK DONE FOR WHICH PAYMENT WAS MADE VIDE ACCOUNT PAYEE CHEQUES ONLY. 3. LEVY OF INTEREST U/S 234B & 234C OF THE ACT IS NOT JUSTIFIED. 4. INITIATION OF PENALTY U/S 271(L)(C) OF THE ACT IS N OT JUSTIFIED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OF OR BEFO RE THE HEARING OF THE APPEAL. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO FOR A SUM OF RS. 75,10,236/- ON ACCOUNT OF DEVELOPMENT EXPENSES AGAI NST THE CAPITAL GAIN. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND DERIVING HER INCOME FROM VARIOUS SOURCES WHICH WERE DECLARED UNDER DIFFERENT HEADS OF INCOME UNDER THE ACT. THE ASSESSEE IN THE YEAR U NDER CONSIDERATION DECLARED INCOME UNDER THE HEAD SHORT TERM CAPITAL G AIN AND LONG TERM CAPITAL GAIN (IN SHORT STCG AND LTCG) ON THE SALE OF LAND A S REPRODUCED HERE-IN- BELOW: (I) SHORT TERM CAPITAL GAIN PURCHASE COST RS.32,76,034/- ADD: FEES TO AHMEDABAD URBAN DEV. AUTH. RS.59,00,00 0/- LAND DEVELOPMENT EXPENSES RS.31,65,536/- TOTAL PURCHASE COST RS.1,23,41,570/- SALE VALUE AS PER REG. DEED DT.10/06/2010 RS.1,38,3 9,600/- SHORT TERM CAPITAL GAIN RS.14,98,030/- ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 3 PAGE 3 OF 9 (II) LONG TERM CAPITAL GAIN INDEXED COST PURCHASE COST (29.27% SHARE) RS.1,62,674 RS.2,97,33 0/- ADD: FEES TO AHMEDABAD URBAN DEV. AUTH. RS.39,21,00 0/- RS.44,11,125/- LAND DEVELOPMENT EXPENSES RS.43,44,700/- R S.43,44,700/- TOTAL PURCHASE COST RS.84,28,374/- RS.90,5 3,155/- SALE VALUE AS PER REG. DEED DT.10/06/2010 RS.95,60, 800/- RS.95,60,800/- LONG TERM CAPITAL GAIN(29.27% SHARE) RS.11,32,426/- RS.5,07,645/- 2.1 THE ASSESSEE HAS CLAIMED LAND DEVELOPMENT EXPEN SES AGAINST THE STCG AND LTCG AMOUNTING TO RS. 75,10,236/- ONLY. 2.2 THE AO ACCORDINGLY TO VERIFY THE GENUINENESS OF THE EXPENSES REQUIRED THE ASSESSEE FOR DETAILS OF SUCH DEVELOPMENT EXPENS ES ALONG WITH DOCUMENTARY EVIDENCE. 2.3 IN RESPONSE TO THE ABOVE, THE ASSESSEE FILED CE RTAIN DETAILS OF EXPENDITURE AS RECORDED ON PAGES 4 TO 7 OF THE AO O RDER. HOWEVER, THE AO SUBSEQUENTLY ISSUED THE NOTICES U/S 133(6) OF THE ACT TO THE RESPECTIVE 8 PARTIES FOR INFORMATION/ CONFIRMATION. BUT ALL THE NOTICES WERE RETURNED AS UNSERVED WITH THE REMARK NOT KNOWN OR NOT FOUND. 2.4 THE AO FURTHER TO VERIFY THE GENUINENESS OF THE TRANSACTION ENQUIRED ABOUT THE BANK TRANSACTIONS AND OBSERVED THAT THERE ARE VARIOUS DEPOSITS MADE IN THE BANK ACCOUNT BEFORE MAKING PAYMENT TO ABOVE 8 PARTIES/CONTRACTORS. THUS THE AO ISSUED NOTICE U/S 133(6) OF THE ACT TO THE BANK TO VERIFY THE TRANSACTIONS. 2.5 IN RESPONSE TO THE NOTICE, THE MANAGER OF THE B ANK FILED THE NECESSARY DETAILS. THE AO BASED ON SUCH DETAILS OBSERVED THAT - ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 4 PAGE 4 OF 9 A. THE MONEY WAS DEPOSITED IN THE BANK OF THE ASSES SEE BY HER RELATIVE (I.E., ASSESSEES SON) TO FACILITATE PAYME NT TOWARDS LAND DEVELOPMENT EXPENSES. B. ALL THE CHEQUES ISSUED FOR LAND DEVELOPMENT EXPE NSES WERE CLEARED TO BAPUNAGAR MAHILA CO-OP BANK AND FOUND TH AT ALL THE CHEQUES WERE CREDITED IN ONE CURRENT ACCOUNT OF H. FINANCIAL SERVICES WHICH IS A SHROFF & COMMISSION AGENT. 2.6 THUS THE AO WAS OF THE VIEW THAT ALL THESE PAYM ENTS WERE RE-ROUTED THROUGH THE ACCOUNT OF SHROFF TO THE ASSESSEE. AS S UCH SHROFF WAS NOT INVOLVED IN THE WORK OF LAND DEVELOPMENT. THEREFORE ALL THE EXPENSES INCURRED BY THE ASSESSEE TOWARDS LAND DEVELOPMENT EXPENSES A RE NOT GENUINE. THE ASSESSEE FURTHER DID NOT FILE ANY DOCUMENTARY E VIDENCE LIKE PAN NO. OF RECEIVING PARTIES, CONFIRMATION OF THE PARTIES, ETC . TO PROVE THE TRANSACTION AS GENUINE. 2.7 THUS, THE AO DISALLOWED THE SUM OF RS. 75,10,23 6/- AND ADDED TO THE TOTAL OF INCOME OF THE ASSESSEE AS SHE FAILED TO DI SCHARGE HER ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION AND IDENTITY OF THE PERSON TO WHOM THE PAYMENTS WERE MADE. 3. THE AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT (A). THE ASSESSEE BEFORE THE LEARNED CIT (APPEAL) SUBMITTED THAT THE EXPENDITURE WAS INCURRED FOR THE DEVELOPMENT OF RAW AND UNEVEN LAND . ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES ONLY. SIMILARLY, THE SERVICE OF NOTICE ISSUED BY AO WAS UNSERVED, BUT IT DOES NOT MEAN THA T THE TRANSACTIONS ARE NOT GENUINE. ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 5 PAGE 5 OF 9 3.1 THE ASSESSEE ALSO CLAIM THAT ALL RELEVANT DOCUM ENT LIKE A COPY OF BILLS/INVOICES, CONFIRMATION OF PARTIES WERE FILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE AO CALLED THE DETAILS OF VEHICLES AND VEHICLES NUMBERS WHICH HAD BEEN USED IN THE DEVELOP MENT OF THE LAND, BUT THE SAME WAS NOT FURNISHED. AS SUCH THE CONTRACTORS WER E EITHER USING THEIR OWN VEHICLES OR HIRED VEHICLES BUT NON-MENTIONING THE V EHICLES NUMBERS DOES NOT LEAD TO FORM THE OPINION THAT THE LAND DEVELOPMENT WORK WAS NOT GENUINE. 3.2 THE ASSESSEE FURTHER SUBMITTED THAT THE EXPENDI TURE WAS INCURRED TOWARDS LAND DEVELOPMENT EXPENSES SO THAT THE LAND CAN FETCH A GOOD PRICE ON SALE. HOWEVER, THE LD. CIT (A) OBSERVED THAT THE ASSESSEE DID NOT FILE ANY SUPPORTING EVIDENCE WITH CONFIRMATION LETTERS LIKE A COPY OF PAN CARD, RESIDENTIAL PROOF, COPY OF BANK ACCOUNT, ETC. TO VE RIFY THE GENUINENESS OF THE SIGNATURES AND THE DETAILS OF PERSONS SHOWN IN THE LETTERS. 3.3 THE LD. CIT (A) FURTHER OBSERVED THAT THE AO NO TED ALL THE CONFIRMATION LETTERS WERE OF SIMILAR TYPE WHILE THE ASSESSEE CONTENDED THAT MERELY CONFIRMATION IS A STEREOTYPE, USED THE SAME PRINTER DOES NOT MEAN THE EXPENDITURES ARE IN-GENUINE. 3.4 IN VIEW OF THE ABOVE, THE LD. CIT (A) WAS OF TH E OPINION THAT THE ASSESSEE DID NOT DISCHARGE HER PRIMARY ONUS TO CLAI M THE DEDUCTION FOR THE DEVELOPMENT EXPENDITURE. HOWEVER, AO HAS MADE A PRO PER INQUIRY TO VERIFY THE GENUINENESS OF THE TRANSACTION, BUT THE IDENTIT Y OF THE PERSONS TO WHOM THE PAYMENTS MADE WAS NOT SATISFIED, AND ALSO THE PAYME NTS WERE NOT CREDITED IN ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 6 PAGE 6 OF 9 THEIR ACCOUNT TO WHOM THE ASSESSEE MADE PAYMENTS IN RESPECT OF DEVELOPMENT EXPENDITURE. 3.5 THUS THE LD. CIT (A) IN VIEW OF THE ABOVE CONFI RMED THE ORDER OF THE AO AND ACCORDINGLY DISMISSED THE APPEAL FILED BY TH E ASSESSEE. BEING AGGRIEVED BY ORDER OF THE LD. CIT (A), THE AS SESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 151. THE LD. AR ALSO FILED ADDITIONAL EVIDENCE BEFORE US WITH RESPECT TO THE IDENTITY OF THE CREDITORS TO PROVE THE GENUINENESS. THE LD. AR FURTHER PRAYED TO ADMIT THE SAME AND RESTORE THE ISSUE TO THE FILE OF THE LD. CIT-A FOR FRESH ADJUDICATION AS PER THE PROVISION OF THE LAW. 5. ON THE OTHER HAND, THE LD. DR BEFORE US VEHEMENT LY OBJECTED ON THE ADMISSION OF THE ADDITIONAL EVIDENC. THE LD. DR ALSO SUBMITTED THAT THERE IS NO EVIDENCE AVAILABLE ON RECORD SUGGESTING THAT THE CONTRACTORS VISITED TO THE INCO ME TAX PREMISE TO APPEAR BEFORE THE AO. THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE IS THAT TH E ASSESSEE CLAIMED LAND DEVELOPMENT EXPENSES IN HER COMPUTATION OF INCOME T O COMPUTE THE LTCG AND STCG FROM SALE OF LAND. HOWEVER IN SUPPORT OF T HE CLAIM ASSESSEE DID NOT SUBMIT THE SUFFICIENT DOCUMENTARY EVIDENCE BEFO RE THE AO AS WELL AS LD. ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 7 PAGE 7 OF 9 CIT(A). THEREFORE, THE AO DISALLOWED THE CLAIM OF DEVELOPMENT EXPENDITURE MADE BY THE ASSESSEE AND SUBSEQUENTLY THE LD. CIT-A CONFIRMED THE ORDER OF THE AO. 6.1 BEFORE ADVERTING THE ISSUE RAISED BY THE ASSES SEE ON MERIT, THE CONTROVERSY ARISES FOR THE ADJUDICATION OF THE ADDI TIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE US VIDE LETTER DATED 1-5-2019. REG ARDING THE ADMISSION OF ADDITIONAL EVIDENCES WE NOTE THAT THE ITAT HAS BEEN EMPOWERED UNDER RULE 29 OF ITAT RULES TO ADMIT THESE EVIDENCES UNDER SPE CIFIED CIRCUMSTANCES WHICH ALSO INCLUDE THE SUBSTANTIAL CAUSE. THUS IT I S CLEAR THAT THE ITAT TO RENDER THE JUSTICE TO THE PARTIES INVOLVED CAN ADMI T THE ADDITIONAL EVIDENCES. IN HOLDING SO WE EXTEND OUR RELIANCE ON THE JUDGMEN T OF HONBLE APEX COURT IN THE CASE K. VENKATA RAMAIAH VS. A. SITARAMA REDD Y REPORTED IN AIR 1963 SC 1526 WHEREIN IT WAS HELD AS UNDER: HELD, THAT THE HIGH COURT ALLOWED ADDITIONAL EVIDE NCE TO BE ADMITTED AS IT REQUIRED THAT EVIDENCE EITHER TO ENABLE IT TO PRONOUNCE JUDGMENT OR FOR ANY OTHER SUBSTANTIAL CAUSE WITHIN THE MEANI NG OF R. 2 7 (1) (B) OF 0. 41 OF THE CODE OF CIVIL PROCEDURE. IT COUL D NOT BE SAID THAT THE HIGH COURT MADE THE ORDER FOR ADMISSION OF ADDITION AL EVIDENCE WITHOUT APPLYING ITS MIND. THE APPELLATE COURT HAS POWER TO ALLOW ADDITIONAL EVIDENCE NOT ONLY IF IT REQUIRES SUCH EVIDENCE TO ENABLE IT TO PRONOU NCE JUDGMENT BUT ALSO FOR ANY OTHER SUBSTANTIAL CAUSE.' ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 8 PAGE 8 OF 9 6.2 ON PERUSAL OF THE ADDITIONAL EVIDENCES I.E. IDE NTITY PROOF OF THE PARTIES, WE NOTE THAT CIT-A DECIDED THE ISSUE AGAINST THE AS SESSEE DUE TO NON- AVAILABILITY OF THESE EVIDENCES. 6.3 THUS, WE ARE OF THE VIEW THAT THESE ADDITIONAL DOCUMENTS ARE CRUCIAL TO DECIDE THE ISSUE ON HAND. THEREFORE WE ADMIT THE AD DITIONAL EVIDENCE IN THE INTEREST OF JUSTICE AND FAIR PLAY AND ACCORDINGLY R ESTORE THE ISSUE TO THE FILE OF THE LD. CIT-A FOR DENOVO ADJUDICATION AS PER THE PR OVISIONS OF LAW AFTER CONSIDERING THE ADDITIONAL PIECES OF EVIDENCE. IT I S PERTINENT TO MENTION THAT THE ASSESSEE SHOULD COOPERATE DURING THE PROCEEDING S BEFORE THE LD. CIT-A. IT IS ALSO IMPORTANT TO NOTE THAT AS THE MATTER HAS BE EN RESTORED TO THE FILE OF THE LD. CIT-A FOR FRESH ADJUDICATION, THEREFORE WE DEEM FIT NOT TO ADJUDICATE THE OTHER CONTENTIONS OF THE LD. AR AND THE DR RAISED A T THE TIME OF HEARING BEFORE US. HENCE THE GROUND OF APPEAL OF THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 15 /05/2019 AT AHMEDABAD. SD/- SD/- (MS MADHUMITA ROY) (WAS EEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 15/05/2019 MANISH ITA NO.1060/AHD/2016 ASSTT. YEARS 2011-12 9 PAGE 9 OF 9 - ./01 21/ / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION : 09-05-2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER - 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. : 21-05-2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. DATE OF DESPATCH OF THE ORDER 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE.