The ITO, Ward-2, Mehsana V. M/s. Veer Corporation, Mehsana

ITA 1094/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80339 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 28-08-2014
• Assessment Year: 1999-2000
• Appeal Filed On: 13-04-2011
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Section: 143(3); 234B; 131; 148; 69

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , , , 0 00 0 0 00 0 , , , , !' !' !' !' ! # ! # ! # ! # BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER 0 00 0/ // / ITA NO. 1094/AHD/2011 % &% % &% % &% % &%/ // / ASSESSMENT YEAR 1999-2000 INCOME TAX OFFICER, WARD-2, MEHSANA. VS M/S. VEER CORPORATION, RADHANPUR CHAR RASTA, MEHSANA. PAN: ABHPP5552E '(/ APPELLANT )*'( / RESPONDENT REVENUE BY : SHRI V.K. SINGH, SR. DR ASSESSEE(S) BY : SHRI ANIL KSHATRIYA, AR + , -'/ // / DATE OF HEARING : 28/08/2014 ./& , -' / DATE OF PRONOUNCEMENT: 26/09/2014 !0 !0 !0 !0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAGAR, AHMEDABAD DATED 10.01.2011. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE READS AS UNDER: THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS 62,00,000/- MADE U/S. 6 9 OF THE IT ACT, 1961. ITA NO. 1094/A/2011 M/S. VEER CORPORATION, MEHSANA AY 1999-2000 - 2 - 3. THE COMMISSIONER OF INCOME TAX (APPEALS) DECIDE D THE ISSUE AS UNDER: THE ASSESSEE IS AN AOP CONSISTING OF 11 MEMBERS, W HICH CAME INTO EXISTENCE FOR CARRYING OUT BUILDING CONSTRUCTION AC TIVITIES. FOR THE RELEVANT YEAR, A NIL RETURN OF INCOME WAS FILED. T HE SAME WAS ACCEPTED UNDER SECTION 143(1) OF THE ACT. SUBSEQUE NTLY, THE THEN ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 OF THE ACT DATED 31 ST MARCH, 2002, IN REFERENCE TO WHICH, THE ASSESSEE F ILED ITS RETURN OF INCOME ON 1ST NOVEMBER, 2003 SHOWING TOTAL INCOME O F RS. NIL. THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE A CT WAS FINALIZED, DETERMINING TOTAL INCOME AT RS. 62,00,000 AFTER MAK ING AN ADDITION OF RS. 62 LAKHS UNDER SECTION 69 OF THE ACT, VIDE ORDE R DATED 31ST MARCH, 2004. THE ASSESSEE CARRIED THE MATTER IN APPEAL AND THE T HEN LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XXI, AHMEDABAD , PASSED AN ORDER DATED 30TH NOVEMBER, 2004 WHEREBY THE APPEAL OF THE ASSESSEE WAS DECIDED IN ITS FAVOUR AND THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED. THE DEPARTMENT PREFERRED AN APPEAL BEFORE THE ITAT, AHMEDABAD, AGAINST THE AFORESAID ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS). THE HON'BLE ITAT, 'B' BENC H, AHMEDABAD, SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORED THE MATTER TO THE FILE OF TH E ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW WHILE MAKING, THE FOLLOWING OBSERVATIONS: 'AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIO NS AND FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINIO N THAT IT WILL BE IN THE INTEREST OF JUSTICE IF THE MATTER IS REST ORED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION I N ACCORDANCE WITH LAW, AFTER ALLOWING THE ASSESSEE A PROPER OPPO RTUNITY OF BEING HEARD AS WELL AS OPPORTUNITY TO CROSS-EXAMINE PARTIES WHOSE STATEMENTS THE ASSESSING OFFICER INTENDS TO U SE AGAINST THE ASSESSEE. CONSEQUENTLY, WE RESTORE THIS ISSUE B ACK TO THE FILE OF THE ASSESSING OFFICER WITH AFORESAID DIRECT IONS. IN THE SET ASIDE PROCEEDINGS, ASSESSING OFFICER HAS MADE THE DE NOVO ORDER ADOPTING THE VERY SAME INCOME I.E. RS.62 ,00,000 WHICH WAS THE SAME AS IN THE ORIGINAL ORDER DATED 31 ST MARCH, 2004. 4. AGGRIEVED WITH THE ORDER, THE ASSESSEE HAS COME IN APPEAL. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW AND AB INITIO VOID. THE SAME MAY PLEASE BE QUASHED. 2. IN LAW AND ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS.62 LAKHS INVOKING PROVISIO NS OF ITA NO. 1094/A/2011 M/S. VEER CORPORATION, MEHSANA AY 1999-2000 - 3 - SECTION 69 OF THE ACT WHEN NO SUCH ADDITION IS CALL ED FOR. THE SAME MAY PLEASE BE DELETED. 3. IN LAW AND ON FACTS, THE ASSESSING OFFICER HAS E RRED IN INITIATING PROCEEDINGS UNDER SECTION 271(L)(C) OF T HE ACT WHEN NO SUCH PROCEEDINGS ARE ATTRACTED. THE SAME MA Y PLEASE BE QUASHED. 4. IN LAW AND ON FACTS, THE LEARNED ASSESSING OFFIC ER HAS ERRED IN DIRECTING TO CHARGE INTEREST UNDER SECTION 234B AND 234D OF THE ACT ALTHOUGH NO SUCH PENAL INTEREST IS MENTIONED IN THE NOTICE OF DEMAND SERVED. THE ASSES SING OFFICER MAY BE DIRECTED TO WITHDRAW SUCH ORDER OF CHARGING PENAL INTEREST. 5. THE FIRST GROUND OF APPEAL IS GENERAL IN NATURE AND THEREFORE NOT ADJUDICATED UPON. 6. THE NEXT GROUND OF APPEAL IS AGAINST ADDITION OF RS.62 LAKHS INVOKING PROVISIONS OF SECTION 69 OF THE ACT. 6.1 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E CONTENTIONS OF THE ASSESSEE INCLUDING THE WRITTEN SUBMISSIONS, THE COPIES OF STATEMENTS TAKEN BY THE ASSESSING OFFICER, THE VARIOUS DOCUMENTS RELIED UPO N INCLUDING THE BANAKHAT DATED 13/12/90. THE RELEVANT FACTS ARE: A) LAND BEARING SURVEY NUMBER 1967/2, PLOT NUMBER 22 SITUATED AT MEHSANA HIGHWAY WAS OWNED BY FOUR BROTHERS, NAMELY SHRI JASUBHAI SHAH, SHRI ROHIT C SHAH, SHRI CHANDRAKANT C SHAH AND VIJAY C SHAH. B) THE ABOVE LAND WAS SOLD TO THE ASSESSEE I.E., THE APPELLANT AOP; SHRI SHANKERLAL R THAKKER AND 10 OTHERS BY SHRI MANUBHAI PATEL POA HOLDER OF THE FOU R BROTHERS. C) IN THEIR STATEMENT UNDER SECTION 131 RECORDED ON 17- 09-99; SHRI JASUBHAI SHAH, SHRI ROHIT C SHAH, SHRI CHANDRAKANT C SHAH 'ADMITTED THAT THE SETTLED RATE FOR SALE OF THE LAND WAS RUPEES 431 PER SQUARE FEET AS WAS MENTIONED IN THE BANAKHAT DATED 13-12-90. THEY ALSO ADMITTED THAT THEY HAVE RECEIVED MONEY ACCORDING TO THE ABOVE RATE FROM SHRI MANUBHAI PATE L; WHO HAD DEDUCTED CERTAIN EXPENSES WHILE MAKING THE PAYMENT. SHRI VIJAY C SHAH STATED THAT THE LAND WAS AGREED TO BE SOLD AT RS 431 AND WITH THE PETROL PUM P AT HIGHER RATE, BUT DENIED HAVING SIGNED THE BANAKH AT OR RECEIVING THE PAYMENT. D) SHRI JASUBHAI SHAH, SHRI ROHIT C SHAH, SHRI CHANDRAKANT C SHAH RETRACTED FROM THEIR STATEMENTS; BY FILING AFFIDAVITS DATED 22ND SEPTEMBER 1999. E) ACCORDING TO THE REGISTERED BANAKHAT DATED 10TH DECEMBER, 1991 THE LAND IN QUESTION WAS AGREED TO B E SOLD FOR RS 28 LACS; AN AMOUNT OF RS.5 LAKHS AS PAI D ON 5TH 3ULY, 1991 AND FURTHER AMOUNT OF RS.10 LAKHS WAS PAID ON 10TH DECEMBER, 1991. AMOUNT OF RS.13 ITA NO. 1094/A/2011 M/S. VEER CORPORATION, MEHSANA AY 1999-2000 - 4 - LAKH WAS PAID ON 13TH DECEMBER, 1993, AS PER SALE DEED DATED 10 TH DECEMBER, 1993 WHICH WAS SUBMITTED FOR REGISTRATION ON 13 TH DECEMBER, 1993. F) AS PER THE DIRECTIONS OF THE HON'BLE UAT, FOUR B ROTHERS WERE TO BE ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSEE. SHRI JASUBHAI SHAH, COULD NOT BE CROSS- EXAMINED BECAUSE UNFORTUNATELY HE HAD EXPIRED. SHRI ROHIT C SHAH, SHRI CHANDRAKANT C SHAH RETRACTED FRO M THEIR STATEMENTS GIVEN EARLIER, SAYING THAT THE ORI GINAL STATEMENTS WERE UNDER DURESS AND CLAIMED THAT THE SALE WAS MADE AT RS. 28 LACS ONLY AND THEY HAVE RECEIVED RUPEES SEVEN LACS EACH ACCORDINGLY. SHRI VIJAY KUMAR IN HIS CROSS-EXAMINATION HAS CONFIRMED THE RATES AS STATED ORIGINALLY BY HIM, HOWEVER HE S AYS THAT NO PROOF OF SUCH RATES IS IN HIS MEMORY AND FURTHER THAT HE HAS NEITHER SIGNED THE BANAKHAT NOR RECEIVED ANY PAYMENT. FINDINGS IN THE ENTIRETY OF THE FACTS MENTIONED ABOVE, IT CA NNOT BE SAID THAT THE AO'S CASE HAS BEEN PROVED WITH EVEN CIRCUMSTANTIAL EVIDENCE. THE ROUGH DOCUMENT I.E. BANAKHAT DATED 13/12/90, WAS NE ITHER IN THE HANDWRITING OF ANY OF THE MEMBERS OF THE AOP, NOR S IGNED BY ANY OF THEM AND EVEN WAS NOT IMPOUNDED OR FOUND FROM THEIR POSSESSION. THE FIRST STATEMENTS OF THREE BROTHERS (WHICH WERE ALSO RETRACTED BY FILING AFFIDAVITS) WHICH HAVE BEEN RELIED ON BY THE ASSESSING OFFICER; CANNOT BE HELD AGAINST THE ASSESSEE BECAUSE: THE STATEMENTS OF THREE BROTHERS THEMSELVES WERE RE TRACTED BY FILING AFFIDAVITS; AND IN THE CIRCUMSTANCES CANNOT BE HELD AGAINST A THIRD PARTY WHO IS THE ASSESSEE. THE TWO BROTHERS DENIED THE CONTENTS OF THE STATEME NTS IN THE CROSS-EXAMINATION; THE THIRD BROTHER UNFORTUNATELY HAS DIED. HOWEVER AS HIS AFFIDAVIT DENYING, THE ORIGINAL STAT EMENT IS ON RECORD AND HIS CROSS EXAMINATION COULD NOT TAKE PLA CE; NOTHING CAN BE HELD AGAINST THE ASSESSEE ON THE BASIS OF SU CH A RETRACTED STATEMENT. SHRI VIJAY KUMAR IN HIS CROSS-EXAMINATION HAS CONFI RMED THE RATES AS STATED ORIGINALLY BY HIM, HOWEVER HE SAYS THAT NO PROOF OF SUCH RATES IS IN HIS MEMORY AND FURTHER THAT HE HAS NEITHER SIGNED THE BANAKHAT NOR RECEIVED ANY PAYMENT. HIS S TATEMENT CANNOT BE RELIED UPON AS IF IT WERE TRUE; HE SHOULD HAVE BEEN HIGHLY AGGRIEVED BECAUSE OF THE FRAUD ON HIM AND SH OULD HAVE FILED THE CASE AGAINST THE FRAUDULENT REGISTRY; WHI CH APPARENTLY IS NOT THE CASE. AS PER THEIR STATEMENTS, THEY HAD RECEIVED AMOUNTS MORE THAN WHAT WAS STATED IN THE REGISTERED DEEDS, NO -ADDITI ON HOWEVER HAS BEEN SUSTAINED IN THOSE CASES. THE PREPONDERANCE OF PROBABILITY EVEN IF HIGHER PAY MENTS ARE CONSIDERED TO BE MADE, AS ALLEGED FOR ARGUMENT SAKE ; IS THAT ITA NO. 1094/A/2011 M/S. VEER CORPORATION, MEHSANA AY 1999-2000 - 5 - TRANSACTION WERE COMPLETED BEFORE THE WRITTEN DOCUM ENTS WERE PRESENTED FOR REGISTRY IN DEC 1993. THEREFORE, THERE IS ABSOLUTELY NO CASE AGAINST THE ASSESSEE, NO PAYMENT OVER AND ABOVE THAT SHOWN IN THE DEED HAD B EEN PROVED TO HAVE BEEN MADE. THE CASE FOR ASSESSING HAVING PAID THE ALLEGED AMOUNT IN THE PERIOD RELEVANT TO THE ASSESSMENT YEA R UNDER QUESTION; IS EVEN WEAKER AND IS LACKING ANY FOUNDATION. THE A DDITION MADE THEREFORE IS DELETED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE PURCHASED A PLOT O F LAND BEARING SURVEY NUMBER 1967/2, PLOT NUMBER 22 SITUATED AT MEHSANA H IGHWAY WHICH WAS BEFORE PURCHASE BY THE ASSESSEE OWNED BY FOUR BROTH ERS, NAMELY SHRI JASUBHAI SHAH, SHRI ROHIT C. SHAH, SHRI CHANDRAKANT C. SHAH AND VIJAY C. SHAH. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS IN ITS RETURN OF INCOME DISCLOSED THE PURCHASE OF THE AFORESAID PLOT OF LAN D FOR RS 28 LAKHS. ACCORDING TO THE ASSESSING OFFICER, AS PER STATEMEN T RECORDED U/S. 131 FROM THE FOUR BROTHERS, THE RATE AGREED FOR THE LAND IN 1990 WAS RS 431/- PER SQUARE FEET AND THE TOTAL AREA OF LAND WAS 1334 SQU ARE METRE. THUS, THE ASSESSING OFFICER CALCULATED THE VALUE OF LAND AT R S 62 LAKHS. ACCORDING TO THE ASSESSING OFFICER, THE INDEX COPY FROM THE REGI STERING AUTHORITY WAS RECEIVED IN FINANCIAL YEAR 1998-99. ON THE BASIS O F THIS, THE ASSESSING OFFICER CONCLUDED THAT ENTIRE AMOUNT OF RS 62 LAKHS WAS PAID IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1999-2000 WHEREIN THE ASSESSEE HAS NOT SHOWN ANY INVESTMENT AND CONSEQUENTLY ADDED RS 62 L AKHS U/S. 69 IN THE HANDS OF THE ASSESSEE IN THE ASSESSMENT YEAR 1999-2 000. 5. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) DELETED THE ADDITION FOR THE REASONS MENTIONED IN HIS ORDER WHICH INTER ALIA STATES THAT THE DOCUMENT FOR REGISTRATION OF THE LAND WAS PRESENTED BEFORE THE REGISTERING AUTHORITY ON 13.12.1993 VIDE ENTRY NO. 2660. ACCORDING TO THE COMMISSIONER OF INCOME TAX (APPEALS), IT WAS THE PR EPONDERANCE OF ITA NO. 1094/A/2011 M/S. VEER CORPORATION, MEHSANA AY 1999-2000 - 6 - PROBABILITY THAT THE TRANSACTION WAS COMPLETED BEFO RE THE WRITTEN DOCUMENT WAS PRESENTED FOR REGISTRATION ON 13.12.1993. 6. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE ORDER OF THE ASSESSING OFFICER AND THE AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE RELIED UPON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7. WE FIND THAT THE DEPARTMENTAL REPRESENTATIVE HA S BROUGHT NO MATERIAL BEFORE US TO CONTROVERT THE FINDING OF THE COMMISSIONER OF INCOME TAX (APPEALS) TO THE EFFECT THAT THE WRITTEN DOCUME NTS WERE PRESENTED FOR REGISTRATION ON 13.12.1993 IN RESPECT OF PURCHASE O F LAND IN QUESTION OR TO CONTROVERT THE FINDING TO THE EFFECT THAT PREPONDER ANCE OF PROBABILITY WAS THAT THE ENTIRE PAYMENT FOR PURCHASE OF LAND WAS MA DE BY THE SELLER BEFORE 13.12.1993. WE FIND THAT COPY OF THE RELEVANT SALE DEED WAS NOT PRODUCED BEFORE US BY THE DEPARTMENTAL REPRESENTATIVE. FURT HER, WE ALSO FIND THAT NO MATERIAL COULD BE PRODUCED BEFORE US TO SHOW THAT A NY AMOUNT WAS PAID BY THE ASSESSEE IN RESPECT OF PURCHASE OF AFORESAID LA ND IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO IN TERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). IT IS CO NFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 26 TH OF SEPTEMBER, 2014 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 26/09/2014 GHANSHYAM MAURYA, SR. P.S.