SMT PRAVINABEN PATEL, ADAJAN V. ITO, WARD-1(3)(8), SURAT

ITA 110/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2015 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-05-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 07-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131; 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 110/Srt/2020 for AY: 2015-16) Smt. Pravinaben Pravinbhai Patel, A/2, Golden Park Society, Opp. Prime Arcade, Anand Mahal Road, Adajan, Surat PAN No. CDOPP 3300 D Vs. I.T.O., Ward-1(3)(8), Surat. Appellant/ assessee Respondent/ revenue Appellant represented by Shri Bharat Jhaveri, AR Respondent represented by Shri Vinod Kumar, Sr.DR Date of hearing 27/05/2022 Date of pronouncement 02/06/2022 Order under section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-2, Surat (in short, the ld. CIT(A) dated 10/02/2020 for the Assessment year 2015-16. The assessee has raised solitary ground of appeal which reads as under: “1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) grievously erred in confirming the addition of Rs. 1,62,437/- made by the Assessing Officer u/s 69C of the Act.” 2. The brief facts of the case are that during the assessment, the Assessing Officer noted that the assessee along with her other co-owners has sold ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 2 the agricultural land. The assessee having 6.67% shares in the land, along with other co-owners incurred expenses of Rs. 25,34,090/- for conversion charges of agricultural land to non-agricultural use. The assessee was asked to furnish the source of payment of such expenses/premium. The Assessing Officer noted that the assessee not submitted any reply in her case. But the relative and co-owner namely Praveenbhai Patel submitted that such payment of premium of Rs. 16,92,669/-, Rs. 4,75,000/- and Rs. 2,67,669/- was paid by Natwarbhai, Champakbhai and Smt Parwatiben respectively. The Assessing Officer further recorded that the notice under Section 131 of the Income Tax Act, 1961 (in short, the Act) was issued to them but they failed to appear. And that on verification of cash books the assessing officer found that there is no entry of payment of premium in cash book of Champakbhai of Rs. 4,75,000/-. And in case of Natwarbhai Patel, entry of payment of Rs. 92,669/-(wrongly recorded by AO, it is Rs. 16,92,669/-) is not in his cash book. Thus, the entry in the cash books is fabricated. On these observations, the explanation of assessee was not accepted. The Assessing officer, accordingly, made addition of Rs. 1,62,437/- (being 6.67% of the total expenses/premium) under the head payment from unexplained source under Section 69C of the Act and brought to tax under Section 115BBE of the Act. ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 3 3. On appeal before the ld. CIT(A), the action of the Assessing Officer was upheld by him by taking a view that explanation of assessee was not supported by evidence. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 4. We have heard the submissions of learned authorised representative (AR) of the assessee and the learned departmental representative (DR) for the revenue and have gone through the orders of the lower authorities. The ld AR of the assessee submits that the assessee has no regular income and the assessee is also not a regular income tax assessee. During the relevant financial year, the assessee along with her other co-owners sold agricultural land after converting the same into non-agricultural land. On sale of such land, the assessee earned long term capital gain. Since the assessee earned Long Term Capital Gain (LTCG), thus the assessee filed return of income in the impugned assessment year. As the assessee has no source of income, the expenses on behalf of her has been spent by the family members and other co-owners in the following manner;  Natwarbhai Patel Rs. 16,92,669/- (PAN ACCPP 1100C),  Champakbhai K Patel Rs. 4,75,000/- (PAN:CNYPP 0205 P),  Parwatiben N Patel Rs.2,76,669/- (PAN:ADGPP 1884L),  Praveenbhai K Patel Rs.1,00,000/- (PAN:ADGPP 4549L). Total : Rs. 25,34,090/- 5. Similar expenses were made by or on behalf of other co-owners namely Vipul Champakbhai Patel (PAN:CNYPP 0204N) and Kantabenpatel ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 4 (PAN:BYFPP 7337 D), but revenue has not made addition for similar expenses in their case despite the facts that assessment was completed under section 143(3) in their cases, copy of their assessment order is being filed. The ld. AR submits that he has placed on record of other co- owners of the land wherein the Department has accepted similar Long Term Capital Gain, without making addition of expenses in their hand as they have also not made expenses from their account, in the assessment order passed under section 143(3) of the Act. The ld. AR further submits that the assessee cannot be treated indifferently than the other co-owners as no similar additions were made in their assessment, though the assessment order was passed under Section 143(3) of the Act. The ld. AR for the assessee submits that being co-owner the assessee is also entitled for similar treatment. 6. In support of his submission the AR relied upon the decision of Madras High Court in CIT Vs. Kumar Rani Meenakshi Achi (2007) 292 ITR 624 (Mad), decision of Ahmedabad Bench in Chetanbhai Prahaldbhai Gami Vs. ITO (ITA No. 2082/Ahd/2013). 7. On the other hand, the Sr. DR for the Revenue supported the orders of the authorities below. The ld. Sr. DR for the revenue further submits that the explanation furnished by the assessee is not supported by documentary ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 5 evidence or any confirmation by the other co-owners. The copy of the assessment orders passed by ld AR for the assessee were passed by different assessing officer and they might have explained the source of expenses to the satisfaction of respective assessing officer. 8. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We find that a very short controversy is involved in the present appeal. There is no dispute that that the assesseewas co-owner of agricultural land having 6.67% share in the said agricultural land. The assessee before transferring the land, paid conversion charges along with other co-owners. The case of assessee throughout the proceedings was that she is not having sufficient income. The expenses incurred by the other co-owners on her behalf and that no such similar addition was made in case of other co-owners, on whose behalf similar expenses were incurred by other co-owners. We find that the assessee has placed on record the copy of two assessment orders passed under Section 143(3) of the Act, in the name of Kantaben Patel and Vipul Champakbhai Patel, though by different Assessing Officers of different wards. However, the facts remained the same that no such addition was made in case of other co-owners thought similar expenses were spent on their behalf by their relative and co-owners. It is settled law ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 6 that the assessee cannot be treated as indifferently in respect of expenses or treatment of capital gain. 9. The Hon'ble Madras High Court in CIT vs. Kumararani Meenakshi Achi (supra) held that during the same assessment year same quantity of wealth in possession of co-sharer is subjected to a lower rate of taxation, it would be highly improper to burden a similarly situated co-sharer with a higher rate of tax. If such an action on the part of the assessing authorities is sanctioned it would militate against the principle of equality of laws enshrined in Article 14 of the Constitution. By following the same principle, the Co-ordinate Bench of this Tribunal in Chetanbhai Prahladbhai Gami vs. ITO in ITA No.2082/AHD/2013 dated 19.07.2019, granted relief to the assessee holding that while making the assessment of the same property, the similar treatment should be granted. 10. In view of the above aforesaid factual and legal discussion and respectfully following the decision of Hon'ble Madras High Court in Kumararani Meenakshi Achi (supra) and decision of Co-ordinate Bench in Prabhodhchandra Ambelal Desai (supra), the revenue cannot treat the assessee in different way, therefore, the addition on account of unexplained source under section 69C is deleted. In the result the grounds of appeal raised by the assessee are allowed. ITA No. 110/Srt/2020 Smt. PravinabenPravinbhai Patel Vs ITO 7 11. In the result, this appeal of the assessee is allowed. Order pronounced in the open court on 02 nd June, 2022 and result was placed on the notice board. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 02/06/2022 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr.Private Secretary, ITAT, Surat