M/s KVR Holdings , Bangalore V. Income Tax Officer Ward-7(2)(4), Bangalore

ITA 1081/BANG/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5556 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: ASHOK K KULKARNI
• Keywords: Additional evidence
• Section: 40A(3); 234B; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.1081/BANG/2017 ASSESSMENT YEAR : 2012 13 M/S KVR HOLDINGS, 443, 44 TH CROSS, 2 ND MAIN, JAYANAGAR 8 TH BLOCK, BENGALURU-560 011. VS. THE INCOME TAX, WARD-7(2)(4), BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI ASHOK K KULKARNI, C.A RESPONDENT BY : SHRI PRIYADARSHI MISHRA, JCIT DATE OF HEARING : 14-09-2020 DATE OF PRONOUNCEMENT : 06-10-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 22/02/2017 PASSED BY LD. CIT (A)-7, BANGALORE FOR ASSESSMENT YEAR 2012-13 ON FOLLOWING GROUNDS OF APP EAL: 1. THE ORDER OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 7 IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 7 OUGHT TO HAVE HELD THAT THE PROVISIONS OF SECTION 40A (3) OF THE ACT ARE NOT APPLICABLE IN THE FACTS AND UNDER THE CIRCUMSTANCES OF THE PRESEN T CASE. 3. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 7 ERRED IN HOLDING THAT THE PAYMENT IS MADE IN A SUM OF RS. 86 ,50,000/- ARE IN VIOLATION OF THE PROVISIONS OF SECTION 40A (3) OF T HE ACT. PAGE 2 OF 6 ITA NO.1081/BANG/2017 4. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 7 OUGHT TO HAVE HELD THAT THE APPELLANTS CASE SQUARELY FALLS WITHIN THE EXCEPTIONS PROVIDED UNDER RULE 6BB OF THE INCOME TAX RULES. 5. THE LEVY OF THE INTEREST U/S 234A, 234B AND 234C IS BAD IN LAW. 6. THE APPELLANT CRAVES FOR LEAVE TO ADD OR DELETE FROM OR AMEND THE GROUNDS OF APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS A FIRM AND IS IN THE BUSINESS OF CON STRUCTION. DURING THE YEAR UNDER CONSIDERATION IT FILED ITS RE TURN OF INCOME DECLARING TOTAL INCOME OF RS.6,65,100/- ON 30/09/20 12. THE CASE WAS TAKEN UP FOR SCRUTINY AND NOTICE UNDER SECTION 143 (2) AND 142 (1) OF THE ACT, WAS ISSUED IN RESPONSE TO WHICH , REPRESENTATIVE OF ASSESSEE APPEARED BEFORE THE LD. AO AND FILED REQUISITE DETAILS AS CALLED FOR. 3. LD.AO NOTED THAT DURING THE YEAR, ASSESSEE PURCH ASED A PROPERTY FOR RS.1,65,59,200/- INCLUDING STAMP DUTY AND HAD DEBITED THE SAME TO THE TRADING ACCOUNT TO CLAIM EX PENDITURE. LD.AO NOTED, FROM SALE DEED THAT ASSESSEE PAID SUM OF RS.86,50,000/- IN CASH, WHICH WAS IN VIOLATION OF S ECTION 40A(3) OF THE ACT. ASSESSEE WAS CALLED UPON TO FURNISH DET AILS, AS TO WHY THE SAME SHOULD NOT BE DISALLOWED UNDER SECTION 40A (3) OF THE ACT. AS NO SUBMISSIONS WERE MADE BY ASSESSEE, TILL THE DATE OF PASSING OF ASSESSMENT ORDER, LD.AO MADE DISALLOWANC E OF RS.86,50,000/-UNDER SECTION 40A(3) OF THE ACT. 4. AGGRIEVED BY ADDITION MADE, ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A). 5. BEFORE LD.CIT(A) ASSESSEE SUBMITTED THAT, PROPE RTY WAS PURCHASED AT BELEKAHALLI VILLAGE, BEGUR HOBLI, VIDE SALE DEED DATED 16/03/2012, FOR SALE CONSIDERATION OF RS.1,50 ,00,000/-. IT PAGE 3 OF 6 ITA NO.1081/BANG/2017 WAS SUBMITTED THAT, THE VENDOR ALSO INSISTED SOME C ASH TO BE PAID TO HIS SISTER, WHO WAS CLAIMING RIGHT OF SHARE IN THE PROPERTY PURCHASED BY ASSESSEE. ASSESSEE THUS PAID RS.44,50, 000/- IN CASH TO THE VENDOR. ANOTHER SUM OF RS.42,00,000/- WAS PAID TO CONFIRMING PARTY IN CASH. THE REASONS FOR MAKING PA YMENT TO THE CONFIRMING PARTY WAS SUBMITTED BY WRITTEN SUBMISSI ON FILED BY ASSESSEE BEFORE LD. CIT (A). 6. LD. CIT (A) HOWEVER REJECTED THE CONTENTIONS OF ASSESSEE AND CONFIRMED ADDITION MADE BY LD. AO BY OBSERVING AS UNDER: 4.9 IN THE INSTANT CASE, THERE ARE NO CIRCUMSTANC ES AVAILABLE TO THE APPELLANT TO CLAIM THE EXCEPTIONS PROVIDED I N RULE 6DD OF I.T. RULES. THE PAYMENTS WERE MADE IN CASH TO TH E VENDOR WITHOUT ANY EXPRESS DEMAND OF PAYMENT IN SUCH NATUR E AND THE SHELTER OF AGREEMENT BETWEEN THE VENDOR AND CON FIRMING PARTY AND OTHERS CANNOT BE TREATED AS COMPELLING RE ASONS FOR THE APPELLANT TO PAY IN CASH TO THE VENDOR. LITHE A PPELLANT WOULD HAVE PAID THESE AMOUNTS IN THE MANNER PRESCRI BED UNDER SECTION 40A(3) OF THE. ACT, THERE WAS ALWAYS AN OCCASION AVAILABLE WITH THE VENDOR TO WITHDRAW CASH FROM HIS OWN ACCOUNT AND PAY IN CASH TO THE PARSONS WITH WHO M HE HAS AGREED INDEPENDENTLY. 7. AGGRIEVED BY ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 8. LD.AR SUBMITTED THAT, ONLY ISSUE ALLEGED IN PRE SENT APPEAL IS IN RESPECT OF DISALLOWANCE MADE UNDER SECTION 40 A(3) OF THE ACT. AT THE OUTSET, HE PLACED RELIANCE ON CERTIFI CATE FILED ALONG WITH PAPER BOOK, WHEREIN, HE SUBMITTED THAT, DOCUM ENTS PLACED AT SERIAL NO.5 AND 6, BEING COPIES OF CHEQUE-BOOK E XTRACT AND COPY OF RECORDS LEFT PLACED AT PAGE 58-61 ARE FILED FOR THE 1 ST TIME PAGE 4 OF 6 ITA NO.1081/BANG/2017 PASSED BY HONBLE KARNATAKA HIGH COURT IN CASE OF M/S AK AGRO TECH PVT. LTD VS ACIT IN ITA NO. 33/2010. 9. ON THE CONTRARY, LD.SR.DR, RELIED ON ORDER PASSE D BY LD.CIT(A). 10. WE HAVE PERUSED SUBMISSION ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. WE NOTE THAT AS SESSEE HAS FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UN DER R.29 COMPRISING OF DOCUMENTS WHICH WERE NOT THERE BEFORE LD.AO/CIT(A). IT HAS BEEN SUBMITTED THAT THESE DOC UMENTS WOULD BE RELEVANT TO DECIDE THE ISSUE IN HAND. IN THE INTEREST OF JUSTICE WE DEEM IT PROPER TO REVERT THE ISSUE TO LD .AO FOR CONSIDERATION. ASSESSEE IS DIRECTED TO FURNISH ALL RELEVANT DETAILS/EXPLANATION TO SATISFY THE REQUIREMENT TO C OME OUT OF RIGORS OF SEC.40A(3). LD.AO SHALL CONSIDER RELEVAN CE OF THESE DOCUMENTS SUBMITTED BY ASSESSEE, AND THE SAME MAY BE ADMITTED IN ACCORDANCE WITH LAW. LD.CIT(A) SHALL VE RIFY THESE DOCUMENTS AND CARRY OUT ANY FURTHER INVESTIGATION A S HE MAY DEEM FIT AND PROPER IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUNDS RAISED BY ASSESSEE STANDS ALLO WED FOR STATISTICAL PURPOSES. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OCT, 2020 SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 6 TH OCT, 2020. PAGE 5 OF 6 ITA NO.1081/BANG/2017 /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 6 OF 6 ITA NO.1081/BANG/2017 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -10-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -10-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -10-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -10-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -10-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -10-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -10-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS