Surinder Kumar Baboota, Chandigarh V. ACIT, CC-II, Chandigarh

ITA 1074/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4999 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Keywords: Unexplained investment; Cost of acquisition
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1074/CHD/2017 ASSESSMENT YEAR: 2007-08 SURINDER KUMAR BABOOTA VS. ASST. CIT SCO 1132-33, SECTOR 22B CENTRAL CIRCLE-II CHANDIGARH (UT) CHANDIGARH PAN NO. AFXPK8908D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. JASPAL SHARMA REVENUE BY : SHRI. J.K. GARG DATE OF HEARING : 22/05/2018 DATE OF PRONOUNCEMENT : 25/05/2018 ORDER PER DR. B.R.R. KUMAR: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-1, CHANDIGARH DT. 27/04/2017. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1. THE IMPUGNED ORDER IS BOTH AGAINST FACTS AND ERRONE OUS IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS) HAS ERRED IN HAVING UPHELD THE ADDITION OF RS.2,10,000/- MADE BY THE LD.AO UNDER THE HEAD SHORT TERM CAPITAL GAINS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS) HAS ERRED IN HAVING CONFIRMED THE ADDITION OF RS.1,02,000/- MADE BY THE LD.AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN H.NO.3238,SECTOR 71, MOHA LI, U/S 69C. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS) HAS ERRED IN HAVING CONFIRMED THE DISALLOWANCE/ADDITION OF RS.21 ,614/- MADE BY THE AO ON ACCOUNT OF INTEREST ON CAR LOAN. 3. THE FACTS RELEVANT TO THE CASE ARE THAT THE APPE LLANT WAS L/5TH OWNER OF HOUSE NO. 3238, SECTOR-71, MOHALI. THE HOUSE WAS SO LD FOR 33 LACS. HOWEVER, DURING SEARCH OPERATIONS AN AGREEMENT WAS FOUND WHI CH INDICATED THAT THE TOTAL SALE VALUE OF THE HOUSE WAS RS. 1,07,50,000/- . THE DIFFERENCE OF RS. 67 LACS WAS SURRENDERED BY THE CO-OWNERS. THE ASSESSEE SHAR E OF SURRENDER WORKED OUT TO RS. 13.40 LACS. HOWEVER, AT THE TIME OF ASSESSME NT, THE ASSESSING OFFICER 2 NOTICES THAT SHORT TERM CAPITAL GAIN WAS NOT CORREC TLY COMPUTED. INSTEAD OF DEDUCTING THE COST OF ACQUISITION OF RS. 30 LACS FR OM THE SALE CONSIDERATION OF RS. 1,07,50,000/-, THE SALE CONSIDERATION OF RS. 33 LAC S WAS DEDUCTED. WHILE RE- COMPUTING THE SHORT TERM CAPITAL GAIN, THE ASSESSIN G OFFICER COMPUTED L/5TH SHARE OF THE ASSESSEE AT RS. 15,50,000/- INSTEAD OF RS. 13,40,000/- THEREBY ADDING THE DIFFERENCE OF RS. 2,10,000/- TO HIS INCOME. 4. IT WAS ARGUED BEFORE US THAT AFTER PURCHASE OF T HE HOUSE THE ASSESSEE HAS SPENT RS. 10,50,000/- ON RENOVATION AND IMPROVEMENT AND THE FIGURE OF RS. 67,00,000/- WAS ARRIVED. 5. THE LD. AR SUBMITTED THAT ON 05/04/2006 AN AMOUN T OF RS. 9,90,000/- WAS WITHDRAWN BY CHEQUE BY NAME OF KULDEEP ARORA WHICH WAS MEANT FOR RENOVATION. BEFORE THE CIT(A) THE ASSESSEE COULD NO T FURNISH THE EVIDENCE OF INCURRING EXPENDITURE ON ACCOUNT OF RENOVATION AND IMPROVEMENT. SINCE AS PER RECORDS (PARA NO. 7.2 OF THE CIT(A) NO EVIDENCE WAS SUBMITTED BEFORE THE LOWER AUTHORITIES, IN THE INTEREST OF JUSTICE WE FEEL IT FIT TO REMAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE PAYMEN TS AND ALLOW THE CAPITAL GAINS CALCULATED BY THE ASSESSEE IN ACCORDANCE WITH LAW. 6. GROUND NO. 2 RELATES TO ADDITION OF RS. 1,02,000 /- MADE TOWARD UNACCOUNTED INVESTMENT IN THE HOUSE NO. 3238, SECTO R-71, MOHALI. DURING SEARCH, DOCUMENTS FOUND BY THE REVENUE INDICATED T HAT A SUM OF RS. 5.10 LACS CASH WAS PAID TO ACQUIRE THIS PROPERTY. THE ASSESSI NG OFFICER DIVIDED THE UNACCOUNTED PAYMENT AMONG 5 CO-OWNERS AND MADE ADDI TION OF RS. 1,02,000/- TOWARDS THE INCOME OF THE ASSESSEE U/S 6 9C AS UNEXPLAINED INVESTMENT. SINCE THE AMOUNT IS TO BE TREATED AS PA RT OF INVESTMENT IN THE HOUSE BY THE ASSESSING OFFICER, THE ASSESSEE IS FAIRLY EN TITLED TO GET DEDUCTION OF THIS AMOUNT WHILE COMPUTING THE PROFITS ON ACCOUNT OF SH ORT TERM CAPITAL GAIN. 7. GROUND NO. 3 RELATES TO DISALLOWANCE OF RS. 21,6 14/- OF INTEREST ON CAR LOAN. PERTAINING TO THIS DISALLOWANCE THE ASSESSMEN T ORDER STATES AS UNDER: 3.1 THE ASSESSEE HAS CLAIMED INTEREST PAID AT RS. 21,614/- THE ASSESSEE WAS ASKED TO EXPLAIN THE PURPOSE OF LOAN AND WHERE IT IS UTIL IZED. THE ASSESSEE DID NOT FURNISH ANY INFORMATION. SINCE THE ASSESSEE FAILED TO PROVE THAT THE PURPOSE OF PAYING INTEREST ON UNSECURED LOAN IS LINKED TO HIS BUSINES S ACTIVITIES, THE INTEREST OF RS. 21,614/- IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3 8. THE LD. CIT(A) CONFIRMED THE ADDITION ON THE GRO UNDS THAT THE AMOUNT CANNOT BE ALLOWED AGAINST THE INTEREST INCOME EARNE D. 9. WE FIND AS PER THE RECORD, THE ASSESSEE IS IN TH E BUSINESS OF PROPERTY DEALING AND EARNING OF COMMISSION. SINCE NO EVIDENC E WAS SUBMITTED BEFORE THE LOWER AUTHORITIES, IN THE INTEREST OF JUSTICE W E FEEL IT FIT TO REMAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO ALLOW FILI NG OF ANY EVIDENCES IN SUPPORT OF THE CLAIM AND EXAMINE THE ISSUE IN ACCORDANCE WITH LAW. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25/05/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR