Vishwasrao Bapurao Chougule, Kolhapur V. Income-tax Officer, Ward - 2(1), Kolhapur

ITA 1337/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1807 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Additional evidence; Reassessment proceedings
• Section: 131; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NOS.1336 TO 1339/PUN/2018 A. YRS. : 2005-06, 2007-08, 2009-10 & 2010-11 VISHWASRAO BAPURAO CHOUGULE, 56-53, RADHIKA APARTMENT, AMBAI TANK, RANKALA PARISAR, KOLHAPUR-416012. PAN : AAQPC1500R . /APPELLANT VS. ITO, WARD-2(1), KOLHAPUR. . / RESPONDENT / APPELLANT BY : SHRI M. K. KULKARNI / RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 25.04.2019 / DATE OF PRONOUNCEMENT: 14.06.2019 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE FOUR APPEALS UNDER CONSIDERATION BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06, 2007-08, 2009-10 AND 2010-11. 2. THE ISSUE INVOLVED IN ALL THESE FOUR APPEALS ARE IDENTICAL AND RELATES TO THE MAKING OF ADDITIONS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY WHICH WERE HELD UNEXPLAINED INVESTMENT BY THE ASSESSING OFFICER IN THE REASSESSMENT PROCEEDINGS. ITA NO.1336/PUN/2018 - A.Y. : 2005-06 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A TEACHER IN VIDAYAPEETH HIGH SCHOOL, KOLHAPUR. DURING THE REASSESSMENT ITA NOS.1336 TO 1339/PUN/2018 - 2 - PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE PURCHASED FLATS IN ADARSHA HOUSING SOCIETY AND THE FLATS WERE ALLOTTED UNDER NT CATEGORY. THE ASSESSEE INVESTED RS.52,11,500/- AND THE SOURCES OF THE SAME WAS THE SUBJECT-MATTER OF DISPUTE. THE DETAILS OF THE INVESTMENTS IN THE FLATS WITH OTHER SOCIETY AND THE SOURCES OF FUNDS ARE GIVEN IN PARA 4 OF THE ASSESSMENT ORDER AND THE SAME ARE EXTRACTED AS UNDER :- DATE & F.Y. PAYMENT TOWARDS FLAT IN ADARSHA SOCIETY (IN RS.) SOURCES OF FUNDS CUMULATIVE PAYMENT (IN RS.) 10.02.2003 2002-03 50,000 OWN CASH 50,000 10.09.2004 2004-05 7,50,000 THROUGH BANK A/C OF MAHESH SAH. BANK LTD. PUNE OF UMESH SHINDE UNSECURED LOAN FROM UMESH SHINDE IN FORM OF D.D. ON A/C OF ADARSHA CO-OP SOCIETY 8,00,000 15.07.2006 2006-07 2,50,000 THROUGH BANK A/C GADHINGLAJ CO-OP BANK OF UMESH SHINDE -DO- 10,50,000 14.02.2007 2006-07 8,00,000 DECLARATION OF CASH FOR A.Y. 2009-10 IN S & S ACTION. -DO- 18,50,000 20.10.2007 2007-08 8,50,000 UNSECURED LOAN FROM SANGRAM GADE IN FORM OF D.D. ON A/C OF ADARSHA CO-OP SOCIETY 27,00,000 14.03.2008 2007-08 5,00,000 -DO- 32,00,000 11.04.2008 2008-09 6,00,000 DECLARATION OF CASH FOR A.Y. 2009-10 IN S & S ACTION. UNSECURED LOAN FROM UMESH SHINDE IN FORM OF DD ON A/C OF ADARSHA CO-OP SOCIETY 38,00,000 11.05.2008 2008-09 5,00,000 DECLARATION OF CASH FOR A.Y. 2009-10 IN S & S ACTION. -DO- 43,00,000 13.07.2009 2009-10 9,11,500 THROUGH BANK A/C MAHALAXMI CO-OP BANK LTD. KOP. OF UMESH SHINDE -DO- 52,11,500 ITA NOS.1336 TO 1339/PUN/2018 - 3 - 4. FROM THE ABOVE TABLE, IT IS EVIDENT THAT SHRI UMESH SHINDE OF PUNE/KOLHAPUR IS THE FUND PROVIDER, THE SOURCES OF LOAN TO ASSESSEE. SHRI SHINDE WAS SEARCHED U/S 132 OF THE ACT AND A STATEMENT U/S 131 OF THE ACT WAS RECORDED ON 17.05.2012. SHRI SHINDE CONFIRMED THE SUPPLY OF LOANS TO THE VARIOUS PARTIES INCLUDING THAT OF THE PRESENT ASSESSEE. THE ASSESSEE SUBMITTED THAT HE HAS SUFFICIENT RESOURCES TO ACCOUNT FOR THE INVESTMENT IN THE SAID FLATS. AFTER CONSIDERING THE ABOVE SUBMISSION OF THE ASSESSEE, THE ASSESSING OFFICER HELD THAT THE INVESTMENT IN HOUSING PROJECT AS UNEXPLAINED AND THE ASSESSING OFFICER HAS GIVEN REASONS FOR TREATING IT AS UNEXPLAINED IN THE LAST COLUMN OF THE TABLE MENTIONED ABOVE. THUS, THE ASSESSING OFFICER SEGREGATED ASSESSMENT YEAR-WISE INVESTMENTS AND MADE ADDITION OF RS.8,00,000/- (I.E. RS.7,50,000/- PLUS RS.50,000/-) IN THE ASSESSMENT FOR A.Y. 2005-06. 5. SIMILARLY, THE ASSESSING OFFICER MADE THE ADDITIONS OF (I) RS.10,50,000 FOR THE ASSESSMENT YEAR 2007-08; (II) RS.11,00,000/- FOR THE ASSESSMENT YEAR 2009-10 AND (III) RS.9,11,500/- FOR THE ASSESSMENT YEAR 2010-11 AS UNEXPLAINED INVESTMENT IN FLATS RESPECTIVELY. 6. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE COULD NOT PERSONALLY PRESENT TO ARGUE THE CASE ALTHOUGH THE WRITTEN SUBMISSIONS WERE SUBMITTED TO THE CIT(A). AS PER THE WRITTEN SUBMISSION, THE ASSESSEE INVESTED TOTAL AMOUNT OF RS.52,11,500/- IN THE FLATS, OUT OF WHICH SHRI UMESH SHINDE CONTRIBUTED TO RS.38,11,500/- BY WAY OF UNSECURED LOANS. SHRI SANGRAM GADE CONTRIBUTED ANOTHER SUM OF RS.13.50 LAKHS AS LOANS. THE ASSESSEE CONTRIBUTED ONLY RS.50,000/- IN CASH. THE EXPLANATIONS WERE NOT ACCEPTED BY THE CIT(A). THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE ITA NOS.1336 TO 1339/PUN/2018 - 4 - ASSESSING OFFICER. THE CIT(A) NOTED THAT A LOT OF CASH WAS INVESTED IN MAKING OF DDS IN FAVOUR OF ADARSHA CO-OP SOCIETY DIRECTLY WITHOUT ROUTING THROUGH THE ASSESSEE UNDER CONSIDERATION. THE CIT(A) CONSIDERED THE ABOVE WRITTEN SUBMISSION OF THE ASSESSEE AS PER THE DISCUSSION GIVEN IN PARA 5.3 TO 6.2 OF HIS ORDER AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER. 7. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. BEFORE US, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE FACTS RELATING TO NON-ATTENDANCE BY THE ASSESSEE BEFORE THE CIT(A) AND SUBMITTED THAT THIS IS A CASE OF PURCHASE OF A FLAT FROM ADARSHA CO-OP SOCIETY. THERE IS A REQUIREMENT OF PROVIDING NECESSARY DETAILS AND EVIDENCES CONSIDERING THE SIGNIFICANCE OF THE SAID SOCIETY AND ITS CONTROVERSIES IN EXISTENCE IN PUBLIC DOMAIN. DEVIATING FROM THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL, LD. COUNSEL PLEADED FOR REMANDING THE ISSUE TO THE FILE OF THE CIT(A), WHO PASSED AN EX-PARTE ORDER RELYING ON THE WRITTEN SUBMISSION OF THE ASSESSEE ONLY. THE LD. COUNSEL MADE A STATEMENT AT BAR STATING THAT THE ASSESSEE SHALL MAKE HIS PRESENCE BEFORE THE CIT(A) AND PROVIDE THE NECESSARY DETAILS, EVIDENCES AND THE SOURCES OF FUNDS TO THE SATISFACTION OF THE CIT(A). THE LD. COUNSEL ALSO MENTIONED THAT THE FAILURE, IF ANY, ON THE PART OF THE ASSESSEE, THE CIT(A) IS AT LIBERTY TO CONFIRMED THE ADDITION. 9. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). THE LD. DR JUSTIFIED THE ORDER OF THE CIT(A) STATING THAT THE ASSESSEES CONTRIBUTION IS ONLY RS.50,000/- JUST OF ITA NOS.1336 TO 1339/PUN/2018 - 5 - INVESTMENT CAME FROM SHRI UMESH SHINDE AND SHRI SANGRAM GADE. THE FACT OF MAKING DDS IN THE NAME OF THE OTHER SOCIETY BY THE LOAN CREDITORS SUGGESTED THAT THE TRANSACTIONS WERE NOT ROUTED THROUGH THE ASSESSEE. 10. WE HEARD BOTH THE SIDES ON THE CORE AND THE LIMITED ISSUE OF REMANDING THE SAME TO THE FILE OF THE CIT(A) FOR ADJUDICATION FOR WANT OF COMPLYING WITH THE SET PRINCIPLES OF NATURAL JUSTICE QUA HEARING THE ASSESSEE. WE ALSO EXAMINED THE SETTLED PRINCIPLES AND WHETHER THE SAID PRINCIPLES STAND SATISFIED IF THE WRITTEN SUBMISSIONS ALONE ARE FILED BY THE ASSESSEE AND RELIED ON BY THE CIT(A) WITHOUT HEARING THE ASSESSEE IN PERSON OR THROUGH THE REPRESENTATIVE. ON THIS ISSUE, WE FIND RELYING ON THE WRITTEN SUBMISSION DOES NOT TANTAMOUNT TO HEARING THE ASSESSEE. THE SETTLED PRINCIPLE OF NATURAL JUSTICE IS MEANINGFUL HEARING OF THE ASSESSEE IN PERSON AS HIS REPRESENTATIVE. IN OUR CONSIDERED VIEW, THE LD. COUNSEL HAS A CASE IN FAVOUR OF REMANDING THE ISSUE TO THE FILE OF THE CIT(A) FOR WANT OF FRESH ADJUDICATION. CONSIDERING THE SIGNIFICANCE OF ARS PRAYER FOR MEANINGFUL ADMINISTRATION OF JUSTICE, WE DIRECT THE CIT(A) TO CONSIDER ALL THE EVIDENCES INCLUDING THE ADDITIONAL EVIDENCES, IF ANY, TO BE FURNISHED BEFORE HIM AND ADMIT THE SAME SUBJECT TO THE PRINCIPLE LAID DOWN IN THE MATTER AND ADJUDICATED THE ISSUE BY PASSING A SPEAKING ORDER AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN PRINCIPLE, I FIND IT IS A CASE OF PURCHASE OF FLAT WITH ASSESSEES OWN OF RS.50,000/- PLUS LOANS FROM THE OTHERS. I AM NOT ABLE TO UNDERSTAND WHY SHRI SHINDE OR SHRI GADE COULD NOT PURCHASE FLATS BORROWING THE SUM OF RS.50,000/- FROM THE ASSESSEE. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE IN HIS APPEAL ARE REMANDED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. ITA NOS.1336 TO 1339/PUN/2018 - 6 - 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.1337 TO 1339/PUN/2018 A.YS. : 2007-08, 2009-10 & 2010-11 12. CONSIDERING THE COMMONALITY OF THE ISSUES AS WELL AS THE ISSUES RAISED BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE OF THE OPINION, THE GROUNDS RAISED IN THE REST OF OTHER THREE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2007-08, 2009-10 AND 2010-11 SHOULD ALSO BE REMAND TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION, ACCORDINGLY, THE RELEVANT GROUNDS OF THREE APPEALS STAND ALLOWED FOR STATISTICAL PURPOSES. 13. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 14 TH DAY OF JUNE, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 14 TH JUNE, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, KOLHAPUR; 4. THE PR. CIT-1, KOLHAPUR; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE