SANJAY KUMAR GUPTA, BILASPUR(CG) V. ITO, WARD- 1(1), BILASPUR(CG)

ITA 121/BIL/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3518 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G S AGRAWAL
• Keywords: Unexplained expenditure; Revised return; Revenue expenditure
• Section: 44AD; 69C; 80C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER) ITA. NO: 121/BPLR/2013 (ASSESSMENT YEAR: 2009-10) SANJAY KUMAR GUPTA,S/O. SHRI MADHUSUDAN PRASAD GUPTA, GETANJALI NAGAR, KASHYAP COLONY, BILASPUR (C.G.) V/S INCOME TAX OFFICER,WARD- 1(1), BILASPUR (C.G.) (APPELLANT) (RESPONDENT) PAN: AHLPG4885D APPELLANT BY : SHRI G. S. AGRAWAL, AR RESPONDENT BY : SHRI SANJAY KUMAR, D.R. ( )/ ORDER DATE OF HEARING : 09 -03-201 8 DATE OF PRONOUNCEMENT : 16 -04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), BILASPUR PERTAINING TO A.Y. 2009-10. ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 2 2. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROU ND NO. 1 AND THE SAME IS DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 RELATES TO THE DISALLOWANCE OF RS. 3,3 7,500/- OUT OF RS. 4,87,500/- MADE BY THE A.O. BEING EXPENSES TOWARDS CONSTRUCTION OF PLINTH. 4. THE ASSESSEE IS A CIVIL CONTRACTOR AND BUILDER. 5. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS DERIVED RS 3,48,052/- AS BUSI NESS INCOME FROM THE SALE OF LAND. ON PERUSAL OF THE DETAILS, THE A.O. FOUND THA T THE TOTAL TURNOVER IS SHOWN AT RS. 11.75 LACS OUT OF WHICH TOTAL EXPENDITURE IS CLAIMED AT RS. 8.62 LACS WHICH INCLUDED COST OF LAND AND RS. 4.87 LACS BEING DEVEL OPMENT CHARGES. THE A.O. FURTHER FOUND THAT OWNERSHIP OF THE LAND ADMEASURIN G 20,000 SQ.FT. BELONGS TO THE ASSESSEE AND HIS BROTHER WITH SHARE OF 50% EACH . THE A.O. FOUND THAT DURING THE YEAR UNDER CONSIDERATION, 11 PLOTS WERE SOLD FOR A CONSIDERATION OF RS. 23.50 LACS AND OUT OF THE TOTAL SALE CONSIDERAT ION ASSESSEES SHARE WAS 11.75 LACS. THE EXPENDITURE PART WAS ALSO DIVIDED INTO TW O EQUAL PARTS AMONG TWO BROTHERS. 6. ON FURTHER PERUSAL OF THE DETAILS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE IN RESPECT OF CONSTRUCTION OF PLINTH ON THE PLOTS SO SOLD. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE CANNOT CLAIM T HE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE DURING THE YEAR UNDER CONSIDERA TION. THE A.O. ACCORDINGLY DISALLOWED THE ENTIRE EXPENDITURE OF RS. 4,87,500/- . ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 3 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT GOT RELIEF ONLY OF RS. 1.50 LACS. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT CERTAIN PLOTS WERE SOLD WITH THE CONSTRUCTION OF THE PLINTH AND CERTAIN PLO TS WERE SOLD AS IT IS. THE A.O. SIMPLY DISREGARDED THE CLAIM OF EXPENDITURE OF CONS TRUCTION OF THE PLINTH AREA ON THE PRETEXT THAT SINCE OTHER PLOTS WERE SOLD AS IT IS, THERE IS NO REASON WHY SOME PLOTS WERE SOLD WITH CONSTRUCTED PLINTH. IT IS THE SAY OF THE LD. COUNSEL THAT THE A.O. COMPLETELY RUBBISHED THE DOCUMENTARY EVIDENCES FIELD BEFORE HIM DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS . THE LD. COUNSEL CONCLUDED BY SAYING THAT THE LD. CIT(A) ALSO ERRED IN NOT APPRECIATING THE FACTS IN TRUE PERSPECTIVE. 9. PER CONTRA, THE LD D.R. STRONGLY SUPPORTED THE FIND INGS OF THE A.O. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE ALO NG WITH HIS BROTHER WAS THE OWNER OF A LAND ADMEASURING 20,000 SQ.FT. IT IS ALS O NOT IN DISPUTE THAT 50% OF THE TOTAL CONSIDERATION WAS RECEIVED BY THE ASSESSE E AND 50% OF THE TOTAL EXPENDITURE WAS SHARED BY THE ASSESSEE. SURPRISINGL Y, IN THE CASE OF THE BROTHER OF THE ASSESSEE, THE CLAIM OF EXPENDITURE HAS BEEN ALLOWED BY THE A.O. WE DO NOT FIND ANY REASON WHY THE 50% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS DISALLOWED. FURTHER PLOTS WHICH WERE SOLD WITH THE CONSTRUCTION OF THE PLINTH ARE ALSO NOT IN DISPUTE. CONSIDERING THE FAC TS OF THE CASE IN TOTALITY IN THE LIGHT OF THE DECISION TAKEN IN THE HANDS OF THE CO- OWNER, WE DO NOT FIND ANY MERIT IN THE IMPUGNED DISALLOWANCE. WE ACCORDINGLY DIRECT THE A.O. TO DELETE ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 4 THE DISALLOWANCE OF RS. 337500/- WHICH WAS SUSTAINE D BY THE LD. CIT(A). GROUND NOS. 2& 3 ARE ACCORDINGLY ALLOWED. 11. FACTS RELATING TO GROUND NO. 4 SHOW THAT VIDE AN AP PLICATION FILED ON 06.01.2012, THE ASSESSEE POINTED OUT THAT INADVERTE NTLY INCOME FROM OTHER SOURCES COULD NOT BE INCLUDED IN THE RETURN OF INCO ME FILED ON 08.02.2010. IT WAS FURTHER BROUGHT TO THE NOTICE OF THE A.O. THAT THE ASSESSEE HAS SUO MOTO PAID THE TAXES ON HIS INCOME FROM OTHER SOURCES AMO UNTING TO RS. 52.80 LACS. 12. DRAWING SUPPORT FROM THE DECLARATION FILED BY THE A SSESSEE, THE A.O. ISSUED NOTICE U/S. 148 OF THE ACT AND THE ASSESSMENT WAS R EOPENED. THE ASSESSMENT WAS COMPLETED AND THE TOTAL INCOME OF THE ASSESSEE WAS COMPUTED AS UNDER:- INCOME AS SHOWN IN THE RETURN OF INCOME : RS . 2,53,360/- ADDITION/DISALLOWANCE (I) ON ACCOUNT OF EXPLAINED EXPENDITURE AS RS. 52,80,0 00/- DISCUSSED IN PARA 5 ABOVE (II) ON ACCOUNT OF EXPENDITURE DISALLOWED AS DISCUSSED IN PARA 7 ABOVE. RS.4,87,500/- TOTAL ADDITION/DISALLOWANCE : RS. 57,67,50 0/- TOTAL INCOME RS. 60,20,860/- 13. WHILE MAKING THE DISALLOWANCE, THE A.O. OBSERVED TH AT THOUGH THE ASSESSEE HAS DISCLOSED RS. 52.80 LACS AS INCOME FROM OTHER SOURC ES BUT HAS FAILED TO EXPLAIN HOW THE AMOUNT HAS BEEN WORKED OUT. THE A.O. WAS OF THE OPINION THAT TO EARN RS. 52.80 LACS, THE ASSESSEE MUST HAVE INCURRE D SOME EXPENDITURE, THE DETAILS OF WHICH WERE NOT MADE AVAILABLE. THE ASSES SEE EXPLAINED THAT TWO LANDS COSTING RS. 26.40 EACH WERE PURCHASED DURING THE YE AR UNDER CONSIDERATION AND SINCE THE INVESTMENT OF RS. . 52.80 LACS WAS NOT AC COUNTED IN THE BOOKS OF ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 5 ACCOUNTS. THEREFORE, THE A.O. TREATED RS. 52.80 LAC S AS UNEXPLAINED EXPENDITURE U/S. 69C OF THE ACT. 14. AFTER GIVING A THOUGHTFUL CONSIDERATION, WE FIND TH AT THE ASSESSEE IN ITS STATEMENT OF INCOME FILED WITH THE RETURN OF INCOME HAS COMPUTED ITS TOTAL INCOME AS UNDER:- STATEMENT OF INCOME INCOME FROM BUSINESS/PROFESSION SANJAY KUMAR GUPTA-CIVIL CONSTRUCTION (CONTRACTOR)- PETTY CONTRACT INCOME FROM CIVIL CONSTRUCTION (CONTRACTOR 5,15 0 (COVERED U/S. 44AD BEING MORE THAN 8% OF THE GROSS RECEIPTS OF RS. 55,400) SANJAY KUMAR GUPTA SALE OF LAND N ET PROFIT AS PER PROFIT & LOSS A/C 3,48,052 INCOME CHARGEABLE UNDER THE HEAD BUSINESS/PROFESS ION 3,53,202 INCOME FROM OTHER SOURCES INCOME FROM OTHER SOURCES 5,280,00 0 GROSS TOTAL INCOME 5,633,202 DEDUCTIONS UNDER CHAPTER VIA INVESTMENTS AND DEPOSITS U/S. 80C LIFE INSURANCE PREMIA 130,467 U/S 80CCE- AGGREGATE AMOUNT OF DEDUCTION 100,000 TOTAL INCOME (ROUNDED OFF U/S.288A) 5 ,533,200 ENCLOSURE AND TAX COMPUTATION TAX 1,564,960 ADD: SURCHARGE 10% 1,56,496 1,721,456 ADD: EDUCATION CESS @ 3% 51,644 TAX PAYABLE (ROUNDED OFF U/S. 288B) 1,773,100 S.ATAX PAID 1,773,100 04/01/2010 12,730 02/12/20111 100,000 01/12/2011 100,000 16/12/2011 205,000 16/12/2011 200,000 22/12/2011 100,000 22/12/2011 100,000 22/12/2011 200,000 22/12/2011 200,000 03/01/2012 5,860 31/12/2011 3,55,000 31/12/2011 194,510 0 BALANCE TAX PAYABLE ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 6 15. A PERUSAL OF THE ABOVE SHOWS THAT THE ASSESSEE HAS SHOWN RS. 52.80 LACS AS HIS INCOME FOR THE YEAR UNDER CONSIDERATION. IT IS ALSO EVIDENT THAT ON THE BASIS OF THE DECLARATION FILED BY THE ASSESSEE, THE ASSESSME NT WAS REOPENED. SINCE, AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS, THE A. O. WAS NOT EVEN AWARE OF THE PURCHASE OF LANDS BY THE ASSESSEE. 16. THE VOLUNTARY DECLARATION BY THE ASSESSEE TRIGGERED THE ISSUE OF NOTICE U/S. 148 OF THE ACT. THOUGH WHILE COMPLETING THE ASSESSMENT AND COMPUTING THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERA TION, THE A.O. HAS DISALLOWED RS. 52.80 LACS BUT THE STARTING POINT IS THE INCOME AS SHOWN IN THE RETURN OF INCOME AT RS. 253360/- WHEREAS THE REVISE D TOTAL INCOME OF THE ASSESSEE WAS RS. 55,33,200/-. WE FAIL TO UNDERSTAND WHEN THE A.O. HAS ACCEPTED THE REVISED RETURN OF INCOME THEN WHY HE A DOPTED THE RETURNED INCOME AT RS. 253360/-. IF HE HAD ADOPTED THE REVIS ED INCOME AS PER THE STATEMENT OF INCOME EXHIBITED AT PAGE 14 OF THE PAP ER BOOK, THE INCOME WOULD HAVE BEEN RS. 55,33,200/- AND THERE WAS NO NEED FOR MAKING ADDITION OF RS. 52.80 LACS. SINCE THE LANDS WERE PURCHASED OUTSIDE THE BOOKS OF ACCOUNTS AND SINCE THE ASSESSEE HAS SUO MOTO INCLUDED THE COST O F LAND AS HIS INCOME AND HAS PAID THE TAXES THEREON AND THE RETURN OF INCOME HAS BEEN ACCEPTED BY THE A.O, WE DO NOT FIND ANY MERIT IN TREATING THE AMOUNT OF RS. 52.80 LACS AS UNEXPLAINED EXPENDITURE. THE REVISED RETURN OF INCO ME OF THE ASSESSEE AT RS. 55,33,200/- SHOULD BE ACCEPTED AS SUCH. GRIEVANCE V IDE GROUND NO.4 IS ACCORDINGLY ALLOWED. ITA NO. 121/ BLPR/2013 . A.Y. 2009-1 0 7 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 04- 2018 SD/- SD/- (RAM LAL NEGI) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER RAIPUR: DATED 16 /04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER SR. P.S. ITAT,RAIPUR