Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 94643 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 6 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
06-11-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
D
Next Hearing Date
28-02-2017
Assessment Year
1997-1998
Appeal Filed On
19-04-2011
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER ./ ITA NO.1157/AHD/2011 / A.Y. 1997-98 FATEHSINH MOHANSINH CHAUHAN, HAVELI, SWAMI NARAYAN MARG, SILVASA PAN : ABPPC 6997 C VS ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2 SURAT (APPELLANT) (RESPONDENT) BY APPELLANT : SHRI HARDIK VORA, AR B Y RESPONDENT : SHRI R.K. GUPTA, SR. DR. / DATE OF HEARING : 29/10/2015 /DATE OF PRONOUNCEMENT: 06/11/2015 / O R D E R PER SHRI S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 1997-98 , ARISES FROM ORDER DATED 30.12.2010 PASSED BY THE CIT(A)-II, AHMEDABAD IN CASE NO.CIT(A)- II/CC.2/119/2009-10, IN PROCEEDINGS U/S.143(3) R.W. S. 254 OF THE INCOME- TAX ACT, IN SHORT THE ACT. 2. THE ASSESSEE RAISES THREE GROUNDS IN THE INSTANT APPEAL CHALLENGING DISALLOWANCE OF LAND DEVELOPMENT EXPENSES TO THE TU NE OF RS.35,00,000/-, ANOTHER IDENTICAL EXPENDITURE OF RS.2,00,000/- AND THE ONE PERTAINING TO CASH PAYMENT OF RS.2,20,000/- TO THE PAYEE SHRI SHA FFI HUSSEIN U/S 40A(3) OF THE ACT. 3. WE COME TO THE FACTS OF THE CASE NOW. THIS HAPP ENS TO BE THE SECOND ROUND OF LITIGATION BETWEEN THE PARTIES QUA THE IMP UGNED ISSUE OF ITA NO.1157/AHD/2011 FATEHSINH MOHANSINH CHAUHAN VS. ASCIT A.Y. 1997-98 - 2 - DEVELOPMENT EXPENDITURE PAID TO M/S. MODERN CONSTRU CTION AND ITS PROPRIETOR SHRI SHAFFI HUSSEIN. THE ASSESSEE-INDIVI DUAL FILED RETURN ON 29.10.1997 DECLARING INCOME OF RS.1,04,48,980/- INC LUDING NET AGRICULTURAL INCOME OF RS.1,55,718/-. THE ASSESSING OFFICER NOT ICED THAT THE TOTAL DEVELOPMENT EXPENDITURE OF RS.37,00,000/-, I.E., RS .35,00,000/- AND RS.2,00,000/- HAD BEEN INCURRED BY MAKING PAYMENT T O M/S. MODERN CONSTRUCTION FOR LAND DEVELOPMENT. HE FOUND THE PA YMENT RECEIPT TO BE PLAIN AND SIMPLE WITHOUT GIVING DETAILED SPECIFICAT ION AND MEASUREMENT OF THE DEVELOPMENT CARRIED OUT. HE INTER ALIA TOO K COGNIZANCE OF THE FACT THAT BANK ACCOUNTS OF BOTH THESE PARTIES WAS IN THE SAME BANK, INTRODUCER OF THE PAYEES BANK ACCOUNT WAS ASSESSEES BROTHER, THE BANK ACCOUNT WAS OPERATIVE FOR A LIMITED PERIOD AND THE CHEQUES IN Q UESTIONS WERE DEPOSITED IN THE PAYEES BANK ACCOUNT AND THE VERY AMOUNT WAS WITHDRAWN BY SELF CHEQUES. THIS MADE THE ASSESSING OFFICER TO ISSUE SECTION 131 NOTICE TO SHRI SHAFFI HUSSEIN, PROPRIET OR OF THE PAYEE M/S. MODERN CONSTRUCTION. IT APPEARS THAT ALL EFFORTS M ADE TO TRACE THIS PAYEE- ENTITY AND ITS PROPRIETOR DID NOT BEAR FRUIT. THE A SSESSING OFFICER COMPLETED A REGULAR ASSESSMENT ON 31.03.2000 DISALL OWING A SUM OF RS.39,20,000/- TOWARDS LAND DEVELOPMENT. THE CIT(A ) CONFIRMED THE ASSESSING OFFICERS ACTION IN ORDER DATED 27.11.200 2. THE ASSESSEE FILED ITA NO. 302/AHD/2001 BEFORE THE TRIBUNAL. A CO-OR DINATE BENCH IN ITS ORDER DATED 07.12.2007 REMITTED THE ISSUE BACK TO T HE ASSESSING OFFICER FOR PASSING A FRESH ORDER AS PER LAW AFTER TAKING INTO CONSIDERATION ALL SUPPORTING EVIDENCE OF THE PAYEE SHRI SHAFFI HUSSEI N AS WELL AS THE ONE PERTAINING TO THE GENUINENESS OF THE DEVELOPMENT EX PENDITURE IN QUESTION. WE FIND FROM THE CASE FILE THAT THE ASSESSEE DID NO T PRESS GROUNDS OF RS.2,00,000/- AND RS.2,20,000/- IDENTICAL TO THOSE RAISED IN THE INSTANT ITA NO.1157/AHD/2011 FATEHSINH MOHANSINH CHAUHAN VS. ASCIT A.Y. 1997-98 - 3 - APPEAL. THUS, THE ASSESSEES LATTER TWO GROUNDS AR E NOT MAINTAINABLE IN THE INSTANT APPEAL. 4. WE COME TO CONSEQUENTIAL PROCEEDINGS NOW. THE ASSESSEE SEEMS TO HAVE SUCCEEDED IN PRODUCING SHRI SHAFFI HUSSEIN BEF ORE THE ASSESSING OFFICER. HE STATED TO HAVE CARRIED OUT LEVELING OF LAND, FILLING WORK AND CUTTING OF ROADS IN THE YEARS 1996 TO 1998 AT SILVA SA BY EMPLOYING SOME MACHINES AND DUMPERS. HE DEPOSED THAT THE IMPUGNED PAYMENT OF RS.37,00,000/- CAME BY CHEQUE AND RS.2,00,000/- IN CASH. IT APPEARS THAT THIS PAYEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. NO OTHER EVIDENCE WAS LAID TO ACTUALLY PROVE THAT ANY LAND DEVELOPMENT IN QUESTION WAS ACTUALLY CARRIED OUT. THE ASSESSING OFFICER IN CONSEQUENTIA L ASSESSMENT FRAMED ON 16.12.2009 AGAIN DOUBTED THE GENUINENESS OF THE ASS ESSEES CLAIM BY TAKING INTO ACCOUNT VARIOUS INCONSISTENCIES IN CASE OF SHR I SHAFFI HUSSEIN; FOR EXAMPLE, THAT HE WAS DEPENDENT ON AGRICULTURAL INCO ME THROUGH OUT AND NEVER RETURNED ANY BUSINESS INCOME ETC. HE ACCORDI NGLY DISALLOWED THE IMPUGNED DEVELOPMENT EXPENDITURE OF RS.39,20,000/-. THE SAME NOW COMES TO RS.35,00,000/- ONLY. THE CIT(A) HAS AGAIN CONFIRMED THE ASSESSING OFFICERS ACTION. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE C ASE FILE. RELEVANT FACTS NARRATED IN THE PRECEDING PARAGRAPHS ARE NOT REPEATED FOR THE SAKE OF BREVITY. IT APPEARS THAT THE CIT(A) OBTAINED A REM AND REPORT FROM THE ASSESSING OFFICER. THE SAME ALSO WENT AGAINST THE ASSESSEE QUA THE IMPUGNED CLAIM OF DEVELOPMENT EXPENSES. THE ASSESS EE SUBMITS THAT ALL THE RELEVANT RECORD, I.E., COMPUTATION, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET FORM PART OF THE RECORD. HIS CASE IS THAT TH E IMPUGNED DISALLOWANCE OF RS.35,00,000/- RESULTS IN HIS GP BEING ENHANCED TO ALMOST 20%. THE ASSESSEE FURTHER ARGUES THAT THE AUTHORITIES BELOW HAVE NOT DOUBTED HIS ITA NO.1157/AHD/2011 FATEHSINH MOHANSINH CHAUHAN VS. ASCIT A.Y. 1997-98 - 4 - ACTUAL WORK OF LAND DEVELOPMENT BEING CARRIED OUT S INCE THE DISPUTE IS ONLY QUA THE IMPUGNED PAYMENT MADE TO THE PAYEE M/S . MODERN CONSTRUCTION. THE REVENUES ARGUMENTS SUPPORT THE LOWER AUTHORITIES ACTION. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS. THE DISPUTE BETWEEN THE PARTIES IS QU A THE IMPUGNED LAND DEVELOPMENT EXPENDITURE OF RS.35,00,000/- IN QUESTI ON. THE CASE FILE REVEALS THAT NEITHER THE ASSESSEE HAS POSITIVELY PR OVED ACTUAL CARRYING OUT THE ABOVE SAID LAND DEVELOPMENT NOR THE AUTHORITIES BELOW HAVE REFERRED TO ANY SPOT INSPECTION TO ASCERTAIN THE GROUND POSI TION. BOTH PARTIES IN THESE PECULIAR FACTS HAVE FAILED TO DISCHARGE THEIR RESPECTIVE ONUS. WE FEEL IN THESE CIRCUMSTANCES THAT LARGER INTEREST OF JUST ICE BE MET IN CASE THE IMPUGNED LAND DEVELOPMENT EXPENDITURE DISALLOWANCE OF RS.35,00,000/- (SUPRA) IS DISALLOWED @ 50%, I.E., RS.17,50,000/- A ND THE REMAINING 50% CLAIM AMOUNT IS ACCEPTED. WE QUOTE ABOVE NARRATED PECULIAR FACTS AND ORDER ACCORDINGLY. THIS ORDER SHALL NOT BE TREATED AS A PRECEDENT. THE ASSESSEES FIRST SUBSTANTIVE GROUND IS PARTLY ACCEP TED. THE LATTER TWO GROUNDS ARE DECLINED AS NOT BEING MAINTAINABLE IN T HIS SECOND ROUND (SUPRA). 6. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 6 TH NOVEMBER , 2015 AT AHMEDABAD. SD/- SD/- (PRAMOD KUMAR) ( S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED 06/11/2015 *BT ITA NO.1157/AHD/2011 FATEHSINH MOHANSINH CHAUHAN VS. ASCIT A.Y. 1997-98 - 5 - !'#'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' ' & / CONCERNED CIT 4. ' ' & ( ) / THE CIT(A) 5. )*+' % , ' ' % , $ / DR, ITAT, AHMEDABAD 6. +/ 0 / GUARD FILE. TRUE COPY / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
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