Shri Ishwarbhai V. Desai, Ahmedabad V. The Income Tax Officer, Ward-1(2)(2), Ahmedabad

ITA 1316/AHD/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7972 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-04-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Additional evidence; Fair market value; Corroborative evidences
• Section: 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER ISHWARBHAI V. DESAI, 5A, 2 ND FLOOR JALTARANG CO. OP. HOUSING SOC. OPP SHANKAR BHUVAN SHAHPUR, AHMEDABAD PAN: AKMPD7386E (APPELLANT) VS THE ITO, WARD-1(2)(2), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI R.R. MAKWANA, SR. D.R. ASSESSEE BY: SHRI S.N. DIVATIA, A.R . DATE OF HEARING : 17-08-2021 DATE OF PRONOUNCEMENT : 24-08-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-10, AHMEDABAD DATED 03-03-2017, IN PROCEEDI NGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- ITA NO. 1316/AHD/2017 ASSESSMENT YEAR 2012-13 I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 2 1.1 THE ORDER PASSED U/S.250 ON 03.03.2017 FO R A.Y.2012-13 BY CIT(A)-10, ABAD UPHOLDING THE ADDITIONS AGGREGATING TO RS.69,20,161 /- MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LA W AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENC E PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITIONS. 2.1 THE LD. CTT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN REJECTING THE ADDITIONAL EVIDENCE THOUGH THE CONDITIONS PROVIDED UNDER RULE-46A WERE FULLY COMPLIED WITH AND EVEN A REMAND REPORT WAS CALLED HIM FROM A O. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN REJECTING THE ADDITIONAL EVIDENCE ON THE G ROUND THAT THE SAME COULD HAVE BEEN PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE CIT (A) HAS FAILED T O APPRECIATE THAT WHEN THE CIRCUMSTANCES STATED IN RULE-46A(L) WERE S ATISFIED, THE ADDITIONAL EVIDENCE OUGHT TO HAVE BEEN ADMITTED. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE REJECTED THE ADDITIONAL EVIDENCE, THOUGH THE CONDITIONS PROVIDED UNDER RULE-46A WERE FULLY COMPLIED WITH AND EVEN A REMAND REPORT WAS CALLED HIM FROM AO.. 3.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE FOLLOWING ADDITIONS: A) LTCG OF PLOT NO.10 AT KHAMBHALIYA NAGAR RS.17, 39,870/- B) STCG OF PLOT NO.4 AT KHAMBHALIYA NAGAR RS.41,7 5,000/- C) AGRICULTURE INCOME TREATED AS INCOME FROM OTH ER RS. 1,11,000/-SOURCES D) UNEXPLAINED CREDIT IN BANK RS. 8,94,291/- E) FMV AS ON 01.04.1981 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED ABOVE SAID ADDITIONS. IT IS, THEREFORE, PRAYED THAT THE ADDITIONS AGGREGA TING TO RS. 69,20,161/- UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME D ECLARING INCOME OF RS. 3,67,230/- WAS FILED ON 27 TH MARCH, 2012. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS IS SUED ON 4 TH SEP, 2014. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER NOTICED THAT ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN OF RS. 1,84,977/- FROM THE SALE OF CO- OWNED PROPERTY FOR RS. 62,66,000/- ON 28 TH NOV, 2011. THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED TOTAL CONSIDERATION OF RS . 25,84,725/- OUT OF THE TOTAL SALE PROCEEDS OF RS. 62,66,000/-. THE PROPOR TIONATE INDEXED COST OF THE PROPERTY WAS SHOWN AT RS. 53,678/-. THE ASSESSING OFFICER POINTED OUT THAT ASSESSEE HAS CLAIMED COST OF IMPROVEMENT IN SOLD PR OPERTY AT RS. 10,48,757/- . BUT IN SPITE OF PROVIDING OPPORTUNITIES HE HAS NOT FURNISHED THE RELEVANT I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 3 EVIDENCES IN SUPPORT OF HIS CLAIM. THE ASSESSING O FFICER ALSO MENTIONED THAT ASSESSEE HAS CLAIMED TRANSFER COST OF RS. 12,9 7,313/- BUT THE SUPPORTING EVIDENCES HAS NOT BEEN FILED. THEREFORE, THE ASSES SING OFFICER HAS DETERMINED THE LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE AT RS. 19,24,847/- AND MADE AN ADDITION OF RS. 17,39,870/ - TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 THE ASSESSING OFFICER HAS ALSO STATED THAT ASSESSEE HAS EARNED SHOT TERM CAPITAL GAIN TO RS. 1,41,000/- FROM THE SALE O F PROPERTY FOR RS. 62,66,000/- ON 15 TH SEP, 2011. THE ASSESSEE CLAIMED TO HAVE PURCHASED THE SOLD PROPERTY FOR RS. 61,25,000/- BUT HE COULD FURN ISH THE SUPPORTING EVIDENCES TO THE EXTENT OF RS. 19,50,000/- ONLY. T HEREFORE, THE ASSESSING OFFICER HAS RECOMPUTED THE SHORT TERM CAPITAL GAIN AT RS. 43,16,000/- AND MADE AN ADDITION TO RS. 41,75,000/- TO THE TOTAL IN COME OF THE ASSESSEE. 4. DURING THE COURSE OF ASSESSMENT, THE ASSESSI NG OFFICER ALSO NOTICED THAT ASSESSEE HAS EARNED AGRICULTURAL INCOME TO RS. 1,11 ,000/-. THE ASSESSING OFFICER STATED THAT ASSESSEE HAS NOT FURNISHED THE SUPPORTING EVIDENCES OF EARNING OF THE AFORESAID INCOME FROM THE AGRICULTUR AL ACTIVITY, THEREFORE, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 1,11, 000/- TO TOTAL INCOME OF THE ASSESSEE. 4.1 DURING THE COURSE OF ASSESSMENT, THE ASSESS ING OFFICER NOTICED THAT ASSESSEE WAS HAVING SAVING BANK ACCOUNT WITH CENTRA L BANK OF INDIA, AHMEDABAD. ON VERIFICATION OF THE ENTRIES, THE AS SESSING OFFICER OBSERVED THAT THERE WAS CREDIT/DEPOSIT ENTRIES AMOUNTING TO RS. 8,94,291/-. THE I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 4 ASSESSING OFFICER STATED THAT ASSESSEE HAS NOT FURN ISHED ANY EXPLANATION ABOUT THE SOURCE OF THE AMOUNT CREDITED THEREFORE A N ADDITION OF RS. 8,94,291/- WAS MADE TO THE TOTAL INCOME OF THE ASSE SSEE. 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE TH E LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BE FORE US, LD. COUNSEL HAS FILED FIVE PAPER BOOKS COMPRISING COPIES OF DOCUME NTS AND DETAILS FURNISHED AT THE TIME OF ASSESSMENT AND APPELLATE PROCEEDINGS BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL HAS VEHEMENTLY CONTE NDED THAT LD. CIT(A) WAS UNJUSTIFIED IN REJECTING THE ADDITIONAL EVIDENCES F ILED UNDER RULE 46A IN SPITE OF THE FACTS THAT HE HAS ALSO CALLED REMAND REPORT ON THE BASIS OF THOSE EVIDENCES FROM THE ASSESSING OFFICER AND SUBMITTED THAT THE CASE OF THE ASSESSEE WAS NOT ADJUDICATED ON MERIT BY THE LD. CI T(A) AS THE MATERIAL FACTS REPORTED IN THE ADDITIONAL EVIDENCES FILED HAVE NOT BEEN CONSIDERED. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUP PORTED THE ORDER OF LOWER AUTHORITIES. 7. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WITHOUT REITERATING THE FACTS AS ELABORATED ABOVE IN THIS O RDER, THE ASSESSING OFFICER HAS MADE ADDITION TOWARDS LONG TERM CAPITAL GAIN OF RS. 17,39,870/-, SHORT TERM CAPITAL GAIN OF RS. 41,75,000/-, AGRICULTURAL INCOME OF RS. 1,11,000/- AND ADDITION U/S. 69 OF RS. 8,94,291/-. IT IS UNDI SPUTED FACT THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) T HE ASSESSEE HAS FILED ADDITIONAL EVIDENCES AND MADE AN APPLICATION UNDER RULE 46A OF THE IT, RULE I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 5 1961 FOR ADMISSION OF ADDITIONAL EVIDENCES. THE LD . CIT(A) HAS CALLED THE REMAND REPORT FROM THE ASSESSING OFFICER VIDE LETTE R DATED 12 TH JULY, 2016. THE ASSESSING OFFICER HAS FURNISHED THE REMAND REPO RT AND THE SAME IS REPRODUCED AT PAGE NO. 2 & 3 OF THE APPELLATE PROCE EDINGS OF LD. CIT(A). THE LD. CIT(A) HAS ALSO FORWARDED THE COPY OF THE R EMAND REPORT FOR THE COMMENTS/REJOINDER OF THE ASSESSEE. THE ASSESSEE H AS FILED HIS COMMENTS/REJOINDER ON THE REMAND REPORT WHICH HAS B EEN PRODUCED AT PAGE 3 TO 5 OF THE LD. CIT(A)S ORDER. THEREAFTER, THE LD. CIT(A) HAS REJECTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE, IT IS NOTICED THAT WHILE REJECTING THE ADDITIONAL EVIDENCES, THE LD. CIT(A) HAS NOT CO NSIDERED THE MATERIAL FACTS REPORTED BY THE ASSESSING OFFICER IN HIS REMAND REP ORT. IT IS NOTICED THAT THE ASSESSING OFFICER HIMSELF HAS REPORTED IN THE REMAN D REPORT THAT SUFFICIENT TIME BE PROVIDED TO ENQUIRE INTO EACH TRANSACTION W ITH RESPECT TO FRESH EVIDENCES OF THE ASSESSEE AND REQUESTED THE LD. CIT (A) THAT THE MATERIAL MAY BE RESTORED TO THE ASSESSING OFFICER FOR FRESH ASSE SSMENT AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE RELEVA NT PART OF THE REMAND REPORT IS REPRODUCED AS UNDER:- UNDER THE CIRCUMSTANCES, TO ACCEPT TO FRESH EVIDEN CE OF THE ASSESSEE WITH THE PROVE ADVERSE TO THE REVENUE. SUFFICIENT TIME TO BE PROVI DED ENQUIRE INTO EACH TRANSACTION, I, THEREFORE, RECOMMENDED ASSESSMENT TO BE RESTORED BA CK TO AO TO MAKE FRESH ASSESSMENT AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PROVE HIS CLAIMED PROPER TO INSPECT THE CORRECTNESS OF EACH TRANSACTION SHOWN BY THE AS SESSEE. EVEN IN HIS REJOINDER THE ASSESSEE HAS ALSO SUBMITT ED TO THE LD. CIT(A) THAT HE HAS NO OBJECTION FOR GIVING ADDITIONAL TIME TO T HE ASSESSING OFFICER FOR MAKING FURTHER INQUIRY. THE RELEVANT PART OF THE REJOINDER OF THE ASSESSEE IS REPRODUCED AS UNDER:- 7) THE APPELLANT FURTHER WANTS TO STATE THAT THE L D. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS WHILE STATING THAT 'SUFFICIENT TIME TO BE PROVIDED TO ENQUIRE INTO EACH I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 6 TRANSACTION,' THIS SUGGEST THAT THE LD. ASSESSING O FFICER REJECTED THE ADDITIONAL EVIDENCES WITHOUT MAKING ENQUIRY OF THE TRANSACTIONS AND NOW SEEK TIME FOR FURTHER ENQUIRY. THE APPELLANT HAS NO OBJECTION WHAT SO EVER FOR GIVING ADDITIONAL TIME TO THE LD. ASSESSING OFFICER FOR MAKING FURTHER ENQUIRY BUT IT IS HUMBLY PRAYED TO YOUR HONOUR TO ENSURE THAT THE LD. ASSESSING OFFICER GIVE HIS CONCLUSIVE REMAN D REPORT SO AS TO DECIDE WHETHER TO ACCEPT OR REJECT THE ADDITIONAL EVIDENCES SUPPLIED BY THE APPELLANT. IT IS ALSO NOTICED THAT IN THE REMAND REPORT THE AS SESSING OFFICER HAS SPECIFICALLY REPORTED TO THE LD. CIT(A) THAT WHILE FRAMING ASSESSMENT U/S143(3) OF THE ACT THE ISSUE OF INCOME ARRIVED FR OM LONG TERM CAPITAL GAIN HAS NOT BEEN PROPERLY, THOROUGHLY VERIFIED BECAUSE EITHER THE CASE OR THE ASSESSING OFFICER HAS BEEN REMAINED UNDER TRANSIT D UE TO RESTRUCTURING PROCESS OF THE DEPARTMENT. THE ASSESSING OFFICER HAS ALSO REPORTED TO THE LD. CIT(A) THAT THE ASSESSING OFFICER HAS RECEIVED THE CASE RECORD AT THE END OF THE DECEMBER, 2014 AND THE ORDER OF ASSESSMENT W AS MADE ON 17 TH MARCH, 2015 BECAUSE OF LIMITATION AS PER THE PROVISION OF THE ACT. THE RELEVANT PART OF THE REPORT OF THE ASSESSING OFFICER IS AS UNDER: - 'IN THIS CASE, WHILE FRAMING ORDER U/S 143(3) OF TH E I.T. ACT, 1961, IT APPEARS THAT THE ISSUE OF INCOME ARRIVED FROM LONG TERM CAPITAL GAIN HAS NOT BEEN PROPERLY, THORLEY VERIFIED. SINCE EITHER THE CASE OR THE ASSESSING OF FICER HAS BEEN REMAINED IN TRANSIT DUE TO RESTRUCTURING PROCESS OF THE DEPARTMENT. THE AO HAD RECEIVED THE CASE RECORDS AT THE END OF DECEMBER, 2014 & THE THE ORDER ASSESSMENT 17/03/ 2015 DUE IS LIMITATION OF THIS PROVISION OF THE ACT' IT IS DEMONSTRATED FROM THE MATERIAL FACT REPORTED IN THE REMAND REPORT BY THE ASSESSING OFFICER THAT PROPER VERIFICATION COULD NO T BE CARRIED OUT IN THE CASE OF THE ASSESSEE WHILE FRAMING ASSESSMENT U/S. 143(3 ) OF THE ACT SINCE EITHER THE CASE OR THE ASSESSING OFFICER HAS BEEN REMAINED IN TRANSIT DUE TO RESTRUCTURING PROCESS OF THE DEPARTMENT. IN THE LI GHT OF THE ABOVE FACTS AND CIRCUMSTANCES, THE DECISION OF LD. CIT(A) FOR NOT A DMITTING THE ADDITIONAL EVIDENCES IS NOT JUSTIFIED THEREFORE WE OBSERVE THA T IT IS APPROPRIATE TO RESTORE ISSUES TO THE FILE OF ASSESSING OFFICER FOR DECIDIN G AFRESH AFTER EXAMINATION I.T.A NO. 1316/AHD/2017 A.Y. 2012-13 PAGE NO ISHWARBHAI V. DESAI VS. ITO 7 AND VERIFICATION OF THE ADDITIONAL EVIDENCES FURNIS HED BY THE ASSESSEE AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24-08-2021 SD/- S D/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 24/08/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,