Shriram Chits(Karnataka)Pvt Ltd, Bangalore V. Assistant Commissioner Of Income tax, Bangalore

ITA 1199/BANG/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9463 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 19-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 153A; 234B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER ITA NOS.1199 & 1200(BANG) 2014 (ASSESSMENT YEARS : 2005-06 & 2007-08) SMT RAJESHWARI G. PANDITH, W/O SRI GOPAL S.PANDITH, PROP: M/S PANDITH DEVELOPERS, EMPORIUM COMMERCIAL COMPLEX, III FLOOR, OLD PUMPWELL ROAD, KANKANADY, MANGALORE-575 002 PAN NO.AEPPP4638G APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANGALORE RE SPONDENT ASSESSEE BY : SHRI R. CHANDRASHEKAR, ADVOCATE REVENUE BY : MISS. NEERA MALHOTRA, CIT-DR DATE OF HEARING : 27-07-2016 DATE OF PRONOUNCEMENT : 1 2-08-2016 O R D E R PER SHRI A.K.GARODIA, AM BOTH THESE APPEALS ARE FILED BY THE ASAESSEE FOR T HE ASSESSMENT YEARS : 2005-06 AND 2007-08. BOTH THESE APPEALS WE RE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.11 99(B)/2013 FOR AY: 2005-06 ARE AS UNDER: ITA NOS.1199 AND 1200(BANG)2013 2 1. THE LD. CIT(A) ERRED IN HOLDING THAT ISSUE OF WARRANT IN JOINT NAMES WILL NOT VITIATE FOR INITIATION OF PROC EEDINGS U/S 153A OF THE ACT, IN VIEW OF THE SEC.292CC OF THE IT ACT, WHICH HAS BEEN INSERTED BY FINANCE ACT 2012 W.E.F. 01-04- 1976. 2. THE LD. CIT(A) OUGHT TO HAVE HELD THE AMENDMENT IS APPLICABLE TO THE PROCEEDINGS WHICH ARE PENDING FOR ISSUE OF NOTICE U/S 153A OF THE ACT, AND NOT TO A CASE WHERE PROCEEDINGS U/S 153A RE ALREADY INITIATED. 3. THE LD.CIT(A) ERRED IN HOLDING THAT NON- ISSUE OF AN OPPORTUNITY OF BEING HEARD BY THE ADDITIONAL CIT BE FORE APPROVING AN ORDER OF ASSESSMENT U/S 153A R.W.S.143 (3) OF THE ACT WILL NOT VITIATE ASSESSMENT PROCEEDINGS COM PLETED U/S 153A R.W.S.143(3) OF THE ACT. 4. THE ACTION OF THE LD. CIT IS CONTRARY TO THE PR OCEDURE CONTEMPLATED BY THE CBDT. 5. THE LD.CIT(A) ERRED IN HOLDING AN ADDITION OF RS .2,63, 230/- IS SUSTAINABLE OUT OF THE ADDITION OF RS.3,0 0,000/- MADE BY THE LD.AO. 6. THE LD. AUTHORITIES BELOW DID NOT PROPERLY APPR ECIATE THE CONTENTION OF THE APPELLANT THAT SHE WILL OFFER A S UM OF RS.5,00,000/- UNDER THE HEAD CAPITAL GAINS AND ERRO NEOUSLY BEEN INTERPRETED AS OFFER OF ADDITIONAL INCOME OF RS.5,00,000/- 7. THE LEVY OF INTEREST U/S 24B OF THE ACT IS ERRO NEOUS. 8. THE AUTHORITIES BELOW HAVE ERRED IN NOT CONSIDE RING THE TAX REBATE OF RS.4,562/- U/S 88 AND TAX REBATE OF R S.5,000/- U/S 88C OF THE ACT. THE APPELLANT PRAYS FOR LEAVE OF THE HONBLE TRIBU NAL TO RAISE SUCH OTHER GROUND OR GROUNDS AT THE TIME OF HEARING . ITA NOS.1199 AND 1200(BANG)2013 3 3. SIMILARLY, THE GROUNDS RAISED BY THE ASSESSEE I N ITA NO.1200(B)/2013 FOR AY: 2007-08 ARE AS UNDER:- 1. THE LD. CIT(A) ERRED IN HOLDING THAT ISSUE OF WARRANT IN JOINT NAMES WILL NOT VITIATE FOR INITIAT ION OF PROCEEDINGS U/S 153A OF THE ACT, IN VIEW OF THE SEC .292CC OF THE IT ACT, WHICH HAS BEEN INSERTED BY FINANCE ACT 2012 W.E.F. 01-04-1976. 2. THE LD. CIT(A) OUGHT TO HAVE HELD THE AMENDMENT IS APPLICABLE TO THE PROCEEDINGS WHICH ARE PENDING FOR ISSUE OF NOTICE U/S 153A OF THE ACT, AND NOT TO A CASE WHERE PROCEEDINGS U/S 153A ARE ALREADY INITIATED. 3. THE LD.CIT(A) ERRED IN HOLDING THAT NON- ISSUE OF AN OPPORTUNITY OF BEING HEARD BY THE ADDITIONAL CIT BE FORE APPROVING AN ORDER OF ASSESSMENT U/S 153A R.W.S.143 (3) OF THE ACT WILL NOT VITIATE ASSESSMENT PROCEEDINGS COM PLETED U/S 153A R.W.S.143(3) OF THE ACT. 4. THE ACTION OF THE LD. CIT IS CONTRARY TO THE PR OCEDURE CONTEMPLATED BY THE CBDT. 5. THE LD.CIT(A) OUGHT TO HAVE HELD THE NOTICE ISSU ED U/S 153A OF THE ACT, IS ILLEGAL SINCE RETURN IS CALLED WITHOUT GRANTING STATUTE RECOGNIZED PERIOD FOR COMPLIANCE A ND THERE IS NO REASONS EITHER RECORDED OR COMMUNICATED TO KN OW HOW THE LD. ASSESSING AUTHORITY HAS EXERCISED HIS DISCR ETION FOR COMPLIANCE TO THE NOTICE U/S 153A OF THE ACT. 6. THE APPELLANT RESPECTFULLY SUBMITS A PERIOD OF CLEAR 30 DAYS TO 45 DAYS WAS CONSIDERED REASONABLE FOR COMPL IANCES WITH REGARD TO FILING OF RETURN IN RESPONSE TO NOTI CES. 7. THE LD. CIT(A) ERRED IN AFFIRMING THE ADDITION O F RS.5,52,192/- AS PART OF THE INVESTMENT IN THE FLAT BY WAY OF PAYMENT OF VAT, SERVICE TAX AND OTHER MISC. EXPENDI TURE AND ITA NOS.1199 AND 1200(BANG)2013 4 ERRED IN REJECTING THE APPELLANTS CONTENTION THAT T HERE IS NO MATERIAL ON RECORD TO PROVE THE EXPENDITURE HAS BEE N INCURRED BY THE APPELLANT. 8. THE LD. CIT(A) ERRED IN HOLDING THE AMOUNT PAID BY AN ACCOUNT PAYEE CHEQUE BY HIREN PATEL TO M/S N.D.DEVE LOPERS IS NOT GENUINE. 9. THE LD CIT(A) OUGHT TO HAVE HELD THE NOTICE ISSU ED U/S 143(2) OF THE ACT, RELATES TO THE ORIGINAL RETURN F ILED U/S 139 OF THE ACT AND NOT T THE PROCEEDINGS INITIATED U/S 153 A OF THE ACT, SINCE THE LD. ASSESSING AUTHORITY HAS CONSIDE RED THE INCOME RETURNED IN THE ORIGINAL RETURN. 10. THE LD. CIT(A) ERRED IN HOLDING THAT A SUM OF RS.2,00,000/- RECEIVED FROM MISS SABHITA, MISS SARI THA AND SRI DEEPAK ARE NOT SUPPORTED BY THE SOURCES AS SUCH REQUIRES TO BE TREATED AS UNEXPLAINED INVESTMENT. THE APPELL ANT SUBMITS ALL THE THREE PERSONS ARE ASSESSED TO TAX A ND HAVE CONFIRMED THE ADVANCE. 11. THE LD. CIT(A) ERRED IN REJECTING THE LOANS AND HER OWN SOURCE FOR PURCHASE OF ST AVAILED BY THE APPELLANT ON 23-10- 2006 ARE NOT PROPERLY EXAMINED. 12.THE LD.CIT(A) ERRED IN REJECTING THE LOANS AVAIL ED BY THE APPELLANT ON 13.11.2006 ARE NOT PROPERLY EXPLAINED. 13. THE LD. CIT(A) ERRED IN REJECTING THE LOANS AVA ILED AND HER SOURCE OF INCOME FOR PAYMENT OF STAMP DUTY THROUGH DD ON 17.01.2006 AMOUNTING TO RS.1,24,09/- HAS UN-EXPLAIN ED INVESTMENT. 14. THE LD. CIT(A) ERRED IN REJECTING THE EXPLANATI ON OF MISS SUSHMA G PANDITH FOR MAKING INVESTMENT IN THE FLAT. MISSS SUSHMA G PANDITH IS ASSESSED TO TAX AND HAS SOURCE TO MAKE THE PAYMENT. ITA NOS.1199 AND 1200(BANG)2013 5 15. THE LD. CIT(A) FAILED TO OBSERVE THAT THE MISS. SUSHMA G PANDITH IS A JOINT OWNER OF THE PROPERTY AND IF ANY INVESTMENT REMAINS UNEXPLAINED THE SAME CANNOT BE TREATED AS UNEXPLAINED INVESTMENT OF THE APPELLANT. 16. THE LD, CIT(A) ERRED IN TREATING THE REGISTRATI ON CHARGES AND MISC. EXPENSES AS UNEXPLAINED REJECTING THE EXP LANATION THAT THE SAME IS OUT OF INCOME OF THE APPELLANT. 17. THE LEVY OF INTEREST U/S 234B OF THE ACT IS ER RONEOUS. THE APPELLANT PRAYS FOR LEAVE OF THE HONBLE TRIBU NAL TO RAISE SUCH OTHER GROUND OR GROUNDS AT THE TIME OF HEARING . 4. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE T HAT GROUND NO.1 TO 4 IN AY: 2005-06 AND GROUND NO.1 TO 9 IN AY: 200 7-08 ARE NOT PRESSED AND ACCORDINGLY THESE GROUNDS ARE REJECTED AS NOT P RESSED. 5. REGARDING GROUND NO.5 & 6 IN THE ASSESSMENT YEA R 2005-06, HE SUBMITTED THAT ON PAGE-33 OF THE PAPER BOOK IS THE STATEMENT OF ASSETS AND LIABILITIES AS ON 31-03-2007 AND IN THE SAME, T HERE ARE VARIOUS CREDITORS SHOWN ON THE LIABILITY SIDE OF THIS STATE MENT BUT THESE CREDITORS WERE NOT EXAMINED. HE ALSO SUBMITTED THAT THESE CRE DITORS HAVE FILED THEIR RETURN OF INCOME PRIOR TO SEARCH AND THESE TR ANSACTIONS REGARDING PROVIDING CREDIT TO THE ASSESSEE WAS DISCLOSED BY T HEM IN THE SAID RETURN OF INCOME, BUT THESE CREDITORS WERE NOT EXAMINED BY THE AUTHORITIES BELOW. THEREFORE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION AFTER EXAMINING THESE CREDITORS. ITA NOS.1199 AND 1200(BANG)2013 6 6. REGARDING GROUND NOS.10 TO 16 IN ASSESSMENT YEA R 2007-08 ALSO, THE SUBMISSIONS WERE SAME. AS AGAINST THIS, THE LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BEL OW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE IMPUGNED ORDER, IT IS NOTED BY THE LD. CIT(A) THAT CERTAIN PAYMENTS HAVE BEEN MADE BY CHEQUE THROUGH ACCOUNTS OF THE ASSESSE ES DAUGHTER MS. SUSHMA G.PANDITH AND SOME HAVE BEEN PAID THROUGH M/ S PANDIT DEVELOPERS AND NUMBER OF PAYMENTS WERE MADE EITHER BY CASH OR THROUGH ONE SHRI HIREN KUMAR PATEL OR SOME OTHER PE RSON AND EVEN CASH RECEIPTS FROM MS. SUSHMA G PANDITH STATED TO HAVE BEEN RECEIVED ON VARIOUS DATES. THEREAFTER, HE HAS STATED ON PAGE-8 OF HIS ORDER THAT HE HAD EXAMINED THE CLAIM MADE BY THE ASSESSEE AND IN RESPECT OF EACH PAYMENT, HIS OBSERVATIONS ARE LISTED IN THE TABLE E NCLOSED AS ANNEXURE- A TO THE IMPUGNED ORDER, AS PER COL.8 & 9 OF THE ANNE XURE. WHEN WE EXAMINE COL.8 & 9 THE SAID ANNEXURE TO THE IMPUGNED ORDER, WE FIND THAT HE HAS SIMPLY STATED IN COL.9 OF THE ANNEXURE THAT THE CLAIM IS REJECTED WITHOUT GIVING ANY REASON. IN OUR CONSIDERED OPIN ION, BEFORE DECIDING ABOUT THE ACCEPTABILITY OF THE ASSESSEES EXPLANATI ON, THE CREDITORS SHOULD HAVE BEEN EXAMINED AND SINCE THIS WAS NOT DO NE, WE FEEL IT PROPER THAT THE MATTER SHOULD GO BACK TO THE FILE O F THE AO FOR A FRESH DECISION AND ACCORDINGLY, WE SET ASIDE THE ORDER OF THELD.CIT(A) IN BOTH YEARS AND RESTORE THE ENTIRE MATTER BACK TO THE FIL E TO THE AO IN BOTH YEARS WITH A DIRECTION THAT HE SHOULD DECIDE THE IS SUE AFRESH AFTER ITA NOS.1199 AND 1200(BANG)2013 7 EXAMINING THE SAID CREDITORS AS PER THE STATEMENT O F AFFAIRS OF THE ASSESSEE IN SUPPORT OF ASSESSEES EXPLANATION ABOUT THE SOURCE OF THIS FUND IN DISPUTE. THE AO SHOULD PASS NECESSARY ORDE R PAS LAW IN THE LIGHT OF THE ABOVE DISCUSSION AFTER PROVIDING REASO NABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/ - (SUNIL KUMAR YADAV) (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER BANGALORE: D A T E D : 12.08.2016 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE ITA NOS.1199 AND 1200(BANG)2013 8 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER