Shashi Kumar M, Bangalore V. Income TAx Officer Ward-7(2)(1), Bangalore

ITA 1303/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8165 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANJEET SINGH
• Keywords: Unexplained investment; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.1303/BANG/2018 ASSESSMENT YEAR : 2012-13 SHASHI KUMAR M (HUF) 797, ANNAPOORNA 10 TH MAIN, 35 TH CROSS, 4 TH BLOCK JAYANAGAR, ENGALURU-560 001. PAN BIWPS 9700 G VS. THE INCOME-TAX OFFICER, WARD-7(2)(1), BENGALURU. APPELLANT RESPONDENT REVENUE BY : SHRI RAVISH RAO, CA ASSESSEE BY : SHRI MANJEET SINGH, ADDL. CIT (DR) DATE OF HEARING : 14.01.2020 DATE OF PRONOUNCEMENT : 21.01.2020 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20/12/2018 PASSED BY LD CIT(A)-10, BENGALURU AND IT RELATE TO THE ASST. YEAR 2012-13. 2. THE SOLITARY ISSUE URGED IN THIS APPEAL IS RELAT ED TO ADDITION OF 65.00 LAKHS MADE BY THE AO AS UNEXPLAINED INVESTMEN T. 3. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE S TATED IN BRIEF: ITA NO.1303 /BANG/2018 PAGE 2 OF 9 DURING THE COURSE OF ASST. PROCEEDINGS, THE AO NOTI CED THAT THE ASSESSEE HAS PURCHASED 17 GUNTAS OF LAND LOCATE D AT UTTARAHALLI HOBLI, BENGALURU SOUTH TQ. FOR A SUM OF RS.65.00 LA KHS. HENCE, THE AO ASKED THE ASSESSEE TO PROVE THE SOURCES FOR MAKING ABOVE SAID INVESTMENTS. IN REPLY, THE ASSESSEE SUBMITTED THAT THE ABOVE SAID PROPERTY WAS PURCHASED ON 16/5/2011 BY HUF OF THE ASSESSEE FAMILY I.E MARIAPPA SHASHIKUMAR (HUF). IT WAS FURT HER SUBMITTED THAT PAN OF INDIVIDUAL WAS GIVEN INADVERTENTLY WHIL E REGISTERING THE CONVEYANCE DEEDS. THE AO WAS NOT CONVINCED WITH TH E ABOVE SAID EXPLANATIONS AND ACCORDINGLY ASKED THE ASSESSEE TO FURNISH ANY CREDIBLE EVIDENCE TO PROVE THAT THE PROPERTY WAS PU RCHASED BY HUF. SINCE THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENT, THE AO TREATED THE ABOVE SAID AMOUNT OF RS.65.00 LAKHS AS UNEXPLAI NED INVESTMENTS IN THE HANDS OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN THE APPELLATE PROCEEDINGS BEFORE LD CIT(A), T HE ASSESSEE OFFERED A NEW EXPLANATION. THE ASSESSEE SUBMITTED THAT THE MARIAPPA SHASHIKUMAR (HUF) HAD ENTERED INTO A WORK CONTRACT FROM THE SELLER OF LAND. THE WORK UNDERTAKEN WAS S HIFTING AND REALIGNMENT OF A HIGH-TENSION ELECTRIC WIRE AND ALS O CONSTRUCTING A COMPOUND WALL FOR THE PROPERTY. IT WAS FURTHER SU BMITTED THAT THE MARIAPPA SHASHIKUMAR (HUF) INCURRED A SUM OF RS.90 .00 LAKHS TOWARD LABOUR, MATERIAL, KPTCL PERMISSION AND SUPER VISION CHARGES. IN THE MEAN TIME, THE PROJECT WAS ABANDON ED DUE TO DELAY AND ADVERSE MARKET CONDITIONS. WHEN MARIAPPA SHASH IKUMAR (HUF) DEMANDED MONEY FROM THE SELLER OF LAND, HE CO ULD NOT PAY ITA NO.1303 /BANG/2018 PAGE 3 OF 9 THE MONEY MARIAPPA SHASHIKUMAR (HUF). HENCE, IN FU LL AND FINAL SETTLEMENT OF THE DUES, LAND WAS SOLD FOR A SUM OF RS.65 LAKHS TO MARIAPPA SHASHIKUMAR (HUF). 5. IN VIEW OF THE NEW EXPLANATIONS OFFERED BY THE A SSESSEE, THE LD CIT(A) CALLED FOR A REMAND REPORT FROM AO. THE AO FURNISHED FOLLOWING REMAND REPORT. AS PER ASSESSEES SUBMISSION THE PROPERTY PURCHASED AMOUNTING TO RS.65,00,000/- BELONGS TO SHASHI KUMAR M. HUF AND WHILE REGISTERING AT SUB- REGISTRAR OFFICE THE PAN OF THE ASSESSEE HAS BEEN G IVEN AN ID PROOF DOCUMENT AND SOME PAN IS UPLOADED BY SUB-REGISTRAR IN AIR(ANNUAL INFORMATION REPORT) FIL ING. THE SOLE DEED DOES NOT CONTAIN ANY PAN OF THE ASSESSEE-INDIVIDUAL OR H(JF. AS PER THE SOLE DEED CONSIDERATION OF RS.65,00,000/- HAS BEEN PAID IN CASH FOR THE PURCHASE OF PROPERTY. ASSESSEE SUBMITS THAT HE HAS NOT PAID THE ANY CASH TO THE SELLER, BU T IT WAS PAID FROM THE YEAR 2006 TO 2011, AS EXPENDITURE AGAINST WORK CARRIED OUT RELATING TO THE SELLER OF THE PROPERTY. THE MOU ENTERED BETWEEN THE HUF AND SELLER OF THE PROPERTY IS FURNISHED AT TIME OF FILI NG APPEAL. THE MOU PURPOSE WAS SHIFTING AND REALIGNMENT OF HT LINE AND PROVIDING COMPOUND WALL FOR THE PROPERTY AND WORK DONE TO THE EXTENT OF RS.90,00,000/- IN THE MEANWHILE, PROJECT WAS ABANDONED DUE TO DELAY AND ADVERSE MARKET CONDITION ITA NO.1303 /BANG/2018 PAGE 4 OF 9 AND SHASHI KUMAR M. HUF HAS TO RECOVER WORK DONE AMOUNT OF RS.90,00,000/-. AS THE SELLER OF THE LAND HAS NOT HAVING ANY MONEY TO REPAY THE WORK DONE, HAS OFFERED HIS LAND IN LIEU OF THE EXPENSES CARRIED WH ICH IS SETTLED AFTER NEGOTIATION FOR RS.65,00,000/-. THE A BOVE INCOME IS NOT UNEXPLAINED INVESTMENT AS IT IS DECLA RED IN THE HUF CAPACITY. IN SUPPORT OF THIS, ASSESSEE H AS FURNISHED SHASHI KUMAR M HUF DETAILS OF STATEMENT O F AFFAIRS AS AN 31 MARCH, 2012, COPY OF MOU, COPY CORRESPONDENCE AND LOON STATEMENT FROM BANK. ON THE ABOVE ISSUE ASSESSEE HAS NOT FURNISHED THE INFORMATION AT TIME OF ASSESSMENT AND NOW FILED BEFORE THE HON'BLE CIT(A). THE ADDITIONAL INFORMATI ON SUBMITTED BY THE ASSESSEE HAS BEEN CAREFULLY VERIFI ED. IT IS FACT THAT, ASSESSEE IN HUF CAPACITY OBTAINED THE LOAN OF RS,54,00,000/- FROM M/S. SIR.M. VISVESVARAY A CO-OPERATIVE BANK IN THE YEAR 2008, FOR THE PURPOSE OF SHIFTING OF HIGH TENSION POWER LINE. BEFORE THE CIT (A) ASSESSEE SUBMITTED COPIES OF WORKS CARRIED OUT BILL S, MOU FOR HT LINE SHIFTING WORK AND OTHER CORRESPONDENCE FOR CANCELLATION THE WORK. THE ASSESSEE CONTENTION HAS BEEN VERIFIED WITH REFERENCE TO DOCUMENT FURNISHED AND IT IS FOUND IN ORDER. THE ABOVE SAID PROPERTY PURCHASED IS APPEARI NG IN THE STATEMENT AFFAIRS OF THE SHASHI KUMAR M. HUF ITA NO.1303 /BANG/2018 PAGE 5 OF 9 FURNISHED BEFORE THIS OFFICE AT THE STAGE OF APPELL ATE PROCEEDINGS. IN VIEW OF ABOVE ADDITIONAL SUBMISSION MADE BY THE ASSESSEE HAS BEEN CONSIDERED AND APPEAL MAY BE DECIDED AN THE MERITS THE CASE. 6. IT CAN BE NOTICED THAT THE AO HAS REPORTED THAT THE PURCHASE OF ABOVE SAID PROPERTY IS APPEARING THE STATEMENT O F AFFAIRS MARIAPPAL SHASHIKUMAR (HUF) WHICH WAS FILED BEFORE LD CIT(A). HOWEVER THE LD CIT(A) WAS NOT CONVINCED WITH THE R EMAND REPORT FURNISHED BY THE AO. THE LD CIT(A) TOOK THE VIEW T HAT THE AO HAS GIVEN A REMAND REPORT WITHOUT EXAMINING THE SELLER OF LAND AND FURTHER CONFINING HIMSELF TO THE DOCUMENTS FURNIS HED BY THE ASSESSEE. HE TOOK THE VIEW THAT THE DOCUMENTS SUBM ITTED BY THE ASSESSEE ARE NOT RELIABLE AT ALL AS THEY HAVE NOT B EEN REGISTERED WITH ANY AUTHORITY. FURTHER THERE IS NO PROOF TO SHOW TH AT THE ASSESSEE HAS INDEED UNDERTAKEN ANY SUCH ACTIVITY. THE LD CI T(A) ALSO NOTICED THAT THE EXPENDITURE CLAIMED TO HAVE BEEN I NCURRED BY HUF HAVE NOT BEEN PAID BY WAY OF CHEQUE. IT WAS ALSO N OT SHOWN THAT THE HUF WAS UNDERTAKING THESE KINDS OF ACTIVITIES E ARLIER. ACCORDINGLY HE TOOK THE VIEW THAT THE CLAIM OF INCU RRING EXPENDITURE OF RS.90 LAKHS FOR THE YEAR FROM 2006 TO 2011 DOES NOT HOLD GOOD. FURTHER HE OBSERVED THAT THE CONVEYANCE DEED CLEARL Y MENTIONS THAT THE AMOUNT OF RS.65.00 LAKHS WAS PAID IN CASH ONLY. ACCORDINGLY HE TOOK THE VIEW THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE ARE NOT RELIABLE. ACCORDINGLY HE REJECTED THE REMA ND REPORT ITA NO.1303 /BANG/2018 PAGE 6 OF 9 FURNISHED BY THE AO ALSO. ACCORDINGLY HE CONFIRMED THE ADDITION OF RS.65 LAKHS. 7. WE HEARD THE PARTIES AND PERUSED THE RECORD. IT IS THE CASE OF THE ASSESSEE THAT THE LAND WAS PURCHASED BY MARIAPP A SHASHIKUMAR (HUF) AND IN THE CONVEYANCE DEED, THE P AN NUMBER OF THE ASSESSEE WAS GIVEN WRONGLY. SINCE THE PAN N UMBER OF THE ASSESSEE WAS SO GIVEN, THE DETAILS OF ABOVE SAID IN VESTMENT HAVE BEEN REFLECTED IN ANNUAL INFORMATION REPORT (AIR) O F THE ASSESSEE. THE QUESTION UNDER CONSIDERATION IS THE SOURCE FOR MAKING THOSE INVESTMENTS. IT IS THE SUBMISSION OF THE ASSESSEE HEREIN THAT THE INVESTMENT HAS BEEN MADE BY HUF ONLY. THOUGH THE A SSESSING OFFICER HAS STATED THAT THE STATEMENT OF AFFAIRS OF MARIAPPA SHASHIKUMAR (HUF) WAS GIVEN BEFORE LD CIT(A) AT THE TIME OF APPELLATE PROCEEDINGS, YET THE LD A.R SUBMITTED THA T THE STATEMENT OF AFFAIRS OF MARIAPPA SHASHIKUMAR (HUF) WAS ATTACH ED WITH THE RETURN OF INCOME FILED BY HUF ON 30-09-2012, I.E, M UCH PRIOR TO THE DATE OF PASSING OF IMPUGNED ASSESSMENT ORDER. 8. WE NOTICE THAT THE LD CIT(A) HAS DISBELIEVE D THE EXPLANATIONS FURNISHED BEFORE HIM FOR WANT OF EVIDENCES TO SHOW THAT THE HUF DID UNDERTOOK CONTRACT WORK FROM THE SELLER OF LAND , EVIDENCES FOR SPENDING OF MONEY. IT HAS BEEN CLAIMED THAT THE HU F HAS SPENT ABOUT RS.90.00 LAKHS OVER THE YEARS FROM 2006 TO 20 11 IN EXECUTING THE CONTRACT WORK UNDERTAKEN FROM THE SELLER OF LAN D. IF THE HUF IS ABLE TO SHOW DOCUMENTS TO PROVE ITS SUBMISSIONS THA T IT HAS SPENT RS.90.00 LAKHS FROM 2006 TO 2011 ALONG WITH THE SOU RCES THEREOF, THEN THE SOURCES FOR PURCHASING LAND FOR A VALUE OF RS.65.00 LAKHS ITA NO.1303 /BANG/2018 PAGE 7 OF 9 SHALL STAND EXPLAINED. THIS IS FOR THE REASON THAT THE LAND HAS BEEN SOLD ON FULL AND FINAL SETTLEMENT OF RS.90.00 LAKHS DUE TO THE ASSESSEE. HENCE WHAT IS REQUIRED TO BE EXAMINED IS WHETHER THE HUF HAS SPENT THE ABOVE SAID SUM OF RS.90.00 LAKHS DURING THE PERIOD FROM 2006 TO 2011 AND WHETHER THE SOURCES FO R THE SAME WERE AVAILABLE WITH HUF? ADMITTEDLY, THE ISSUE UND ER CONSIDERATION HAS NOT BEEN EXAMINED IN THIS PERSPEC TIVE. ACCORDINGLY, IN OUR VIEW, THIS ISSUE REQUIRES FRESH EXAMINATION. SINCE IT REQUIRES VERIFICATION OF VARIOUS DOCUMENTS , WE PREFER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFF ICER. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD CIT(A) AND RES TORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMINING THEM AFR ESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA. AFTER EXAMINING THE INFORM ATION AND EXPLANATIONS FURNISHED BY THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 21 ST JANUARY, 2019. / VMS / ITA NO.1303 /BANG/2018 PAGE 8 OF 9 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.1303 /BANG/2018 PAGE 9 OF 9 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 SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. 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. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES 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 REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED