N.S. Nagaraj, Bangalore V. ITO, Bangalore

ITA 1431/BANG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9503 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S KRISHNA SWAMY
• Keywords: Unexplained cash credit

Judgement Text

ITA.1431 & 1432/BANG/2015 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI. S. JAYARAMAN, ACCOUNTANT MEMBER 1. I.T.A NO.1431/BANG/2015 (ASSESSMENT YEAR : 2008-09) 2. I.T.A NO.1432/BANG/2015 (ASSESSMENT YEAR : 2008-09) 1. SHRI. N. S. NAGARAJ, PAN : ABRPM9099G PROP : M/S. BHASKAR DEPARTMENTAL, NO.10/1, SERPANTINE ROAD, K. P. WEST, BENGALURU 560 020 2. SMT. N. S. MALLIKA NAGARAJ, ABRPN8664P NO.8, 9 TH A CROSS, KUMARA PARK NEST, BENGALURU 560 026 .. APPELLANTS V. INCOME TAX OFFICER , WARD 6(2), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. S. KRISHNASWAMY, CA REVENUE BY : DR. P. K. SRIHARI, ADDL. CIT HEARD ON : 26.07.2016 PRONOUNCED ON : .08.2016 O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THESE APPEALS FILED BY ASSESSEES , HUSBAND AND WIF E RESPECTIVELY, ARE AGAINST THE DIFFERENT ORDERS OF T HE LD.CIT (A), BENGALURU -2, DT.07.09.2015, FOR THE ASSESSMENT YEA R 2008-09. ITA.1431 & 1432/BANG/2015 PAGE - 2 02. FIRST, WE SHALL TAKE UP THE APPEAL IN ITA NO.14 31/BANG/2012, IN THE CASE OF THE HUSBAND. FACTS APROPOS ARE THAT AS SESSEE, A PROPRIETOR OF M/S. BHASKAR DEPARTMENTAL, HAS SHOWN M/S. GILLETE INDIA LTD , AS A SUNDRY CREDITOR AT RS.17,20,084/- . HOWEVER, M/S. GILLETE INDIA LTD HAS CONFIRMED THE OUTSTANDING BAL ANCE AT RS.11,03,904/- ONLY. SINCE THE ASSESSEE COULD NOT SATISFACTORILY EXPLAIN THE DIFFERENCE OF RS.6,16,180/-, THE AO AD DED IT AS UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME-TAX A CT, 1961 (THE ACT IN SHORT). 03. ON AN APPEAL , FROM THE PARTICULARS FURNISHED B Y THE APPELLANT, THE LD. CIT (A) FOUND THAT RS.21,778/- REPRESENTED EXCESS AMOUNT CHARGED FOR THE RELEVANT ASSESSMENT YEAR WHICH HAS BEEN RIGHTLY TREATED BY THE AO AS INCOME . FOR THE BALANCE OF RS.5,94,402/-, SINCE THE APPELLANT HAD ACCEPTED THAT THE CREDITOR IS DUE LESS BY RS.5,94,101/-AND HE HAD NOT FURNISHED ANY RECONCILI ATION, THE LD CIT(A) ACCEPTED THE FINDING OF THE AO . FURTHER, TH E LD. CIT (A) HELD THAT MERELY BECAUSE THE ASSESSEE HAD REDUCED THE PU RCHASES ON A SUBSEQUENT DATE AND THAT TOO WITHOUT RECONCILIATION , IT DID NOT ALTER THE FINDING OF THE AO THAT RS.6,16,180/- WAS CHARG EABLE TO TAX IN THE IMPUGNED ASSESSMENT YEAR. ITA.1431 & 1432/BANG/2015 PAGE - 3 04. BEFORE US , THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED HEREUNDER : 05. THE LD. AR STRONGLY ASSAILED THE ORDERS OF THE LOWER AUTHORITIES, SUBMITTED A STATEMENT OF ACCOUNT OF GILLETTE INDIA LTD, WHICH IS REPRODUCED HEREUNDER AND PLEADED THAT IT REQUIRES D UE CONSIDERATION: PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF LOWE R AUTHORITIES. ITA.1431 & 1432/BANG/2015 PAGE - 4 06. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IT IS NOT CLEAR FROM THE ABOVE, WHETHER THE ADDITIONS MADE DURING THE YEAR ARE BASED ON THE CURRENT YEAR ENTRIES OR NOT, AND HENCE WE REMIT THE MATTER TO THE AO TO EXAMINE THE ISSUE AFR ESH AND PASS AN ORDER IN ACCORDANCE WITH THE LAW. ITA NO 1432/ BANG/2015 NOW WE CONSIDER THE APPEAL OF ASSESSEE, MRS. MALL IKA NAGARAJ, IN ITA NO.1432/BANG/2015. THE AO NOTED THAT BY AN A GREEMENT OF SALE DT.20.03.2008, THE ASSESSEE AGREED TO SELL THE FLAT AT NO.282, JP NAGAR, 2 ND STAGE, BENGALURE FOR RS.29 LAKHS. THOUGH THE POSS ESSION OF PROPERTY WAS GIVEN TO THE BUYER ON 20.03.2008, T HE SALE DEED WAS REGISTERED ONLY ON 23.08.2008. CONSIDERATION WAS P AID IN INSTALMENTS ON VARIOUS DATES DURING THE YEAR ENDED 31.03.2008. ASSESSEE ORIGINALLY CLAIMED DEDUCTION U/S.54 F OF THE ACT, B UT SUBSEQUENTLY CHANGED HER POSITION AND CLAIMED DEDUCTION U/S.54 OF THE ACT ON THE GROUND THAT SHE HAD HELD THE IMPUGNED PROPERTY FOR MORE THAN THREE YEARS, SHE STARTED INVESTING IN THE CONSTRUCTION OF THE NEW RESIDENTIAL PROPERTY WITHIN ONE YEAR BEFORE THE SALE OF FLAT , THOUGH THE CONSTRUCTION OF THE NEW PROPERTY WAS COMPLETED DURI NG THE YEAR ENDED 31.3.2008 IE IN AY 2008-09. SINCE THE ASSESSE E HAS TAKEN ITA.1431 & 1432/BANG/2015 PAGE - 5 CONTRARY STANDS ETC, THE AO DID NOT ACCEPT THE CLAI M MADE U/S.54 OF THE ACT. 02. BEFORE THE LD CIT (A), THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN CIT V. H. K. KA POOR (DECD.) [234 ITR 753], WHEREIN THE DECISION OF HONBLE HIGH COUR T OF KARNATAKA IN CIT V. J. R. SUBRAMANYA BHAT [165 ITR 571], WAS FOL LOWED. THE LD CIT (A), FOUND, INTER ALIA, THAT ALTHOUGH THE INI TIAL CLAIM WAS MADE ON THE PLEA THAT THE CONSTRUCTION WAS COMPLETED IN A Y. 2006-07, LATER ON, THE ASSESSEE CLAIMED THAT RS.2,96,680/- WAS SPENT IN A. Y. 2007-08. EVIDENTLY, IT SHOWED THAT THE CONSTRUCTIO N WAS COMPLETED AFTER THE DATE OF SALE. HOWEVER, THE APPELLANT HAS NOT PRODUCED ANY EVIDENCE BEFORE THE LD CIT (A) TO SHOW THAT THE SAI D EXPENDITURE WAS INCURRED IN A. Y. 2007-08. FURTHER, THE LD CIT(A) F OUND THAT THE SAID EXPENDITURE IS CLAIMED TO BE CASH PAYMENTS TO PLUMB ERS, PAINTING ETC. THUS, THE CIT (A) ALSO FOUND THAT THE ASSESSE E HAD CHANGED HER STAND TO SUIT THE CLAIM WITHOUT FURNISHING ANY EVID ENCE . FURTHER, THE CIT (A) HELD THAT THE SAID HOUSE PROPERTY WAS IN TH E JOINT NAMES OF THE ASSESSEE & HER HUSBAND AND THEREFORE, IF AT ALL ANY DEDUCTION COULD BE CLAIMED U/S.54 , ONLY 50% OF THE CLAIM WOU LD BE AVAILABLE. SINCE THE ASSESSEE DID NOT FULFIL THE REQUIRED COND ITION, THE LD. CIT (A) DID NOT ALLOW THE CLAIM MADE U/S.54 OF THE ACT. ITA.1431 & 1432/BANG/2015 PAGE - 6 03. AGGRIEVED AGAINST THE ORDER OF THE LD. CIT (A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. THE EFFECTIVE GRO UNDS RAISED BY THE ASSESSEE ARE AS UNDER : 04 BEFORE US, THE LD. AR STRONGLY ASSAILED THE ORDE RS OF THE LOWER AUTHORITIES AND PLEADED THAT THE ASSESSEES PLEA RE QUIRE DUE CONSIDERATION. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 05. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IT IS CLEAR FROM THE LD CIT(A) ORDER THAT THERE IS NO FINDING AS TO WHETHER THE APPELLANT CONSTRUCTED THE IMPUGNED PR OPERTY DURING THE YEAR OR NOT . FURTHER, THE % OF OWNERSHIP ALSO HAS NOT BEEN ITA.1431 & 1432/BANG/2015 PAGE - 7 DETERMINED. IN THE FACTS AND CIRCUMSTANCES, WE REMI T THE MATTER TO THE AO TO DECIDE THESE ISSUES, AFRESH, IN ACCORDANC E WITH LAW. 06. WITH REGARD TO THE GROUND RELATING TO THE DIFFE RENCE IN CLOSING BALANCE OF THE CREDITOR AT RS.21,103/-, IT IS IDEN TICAL TO THE GROUND ADJUDICATED BY US IN THE CASE OF ASSESSEES HUSBAND , WHEREIN WE HAVE HELD THAT WHETHER THE ADDITIONS MADE DURING TH E YEAR ARE ON THE BASIS OF CURRENT YEAR ENTRIES OR NOT, IS NOT CLEAR AND HENCE WE REMITTED THE MATTER TO THE AO TO EXAMINE THE ISSUE , AFRESH , AND PASS AN ORDER IN ACCORDANCE WITH THE LAW. THE SAME DECISION HOLDS GOOD IN THIS CASE ALSO. WE HOLD ACCORDINGLY. 15. IN THE RESULT, THE IMPUGNED APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH DAY OF AUGUST, 2016. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (S. JA YARAMAN) JUDICIAL MEMBER ACCOU NTANT MEMBER MCN* ITA.1431 & 1432/BANG/2015 PAGE - 8 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME TAX 4. THE COMMISSIONER OF INCOME TAX (A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR