Kavitha Chakrapani, Bangalore V. JCIT, Bangalore

ITA 1443/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0327 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 21-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Retraction
• Section: 2

Judgement Text

ITA.1443 & 1444/BANG/2013 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER 1. ITA NO.1443/BANG/2013 (ASST. YEAR : 2007-08) 2. ITA NO.1444/BANG/2013 (ASST. YEAR : 2007-08) 1. SMT. KAVITHA CHAKRAPANI, PAN : AGDPC5947P 2. SHRI. CHAKRAPANI, PAN : AGDPC5948C NO.1298, GNANAKSHI RAJESHWARI ROAD, KODIGEHALLI MAIN ROAD, VIRUPAKSHAPURA, KODIGEHALLI, BENGALURU 560 097 .. APPELLANTS V. JOINT COMMISSIONER OF INCOME-TAX (OSD), CENTRAL RANGE, BENGALURU .. RESPONDENT ASSESSEES BY : SHRI. V. SRINIVASAN, CA REVENUE BY : SHRI. A. R. V SREENIVASAN, JCIT HEARD ON : 02.06.2016 PRONOUNCED ON : 17.06.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS FILED BY ASSESSEES BOTH OF WHOM WERE SUBJECT TO ASSESSMENT PROCEEDINGS, PURSUANT TO A SEARCH U/S.13 2 OF THE INCOME-TAX ACT, 1961 (THE ACT IN SHORT), CARRIED OUT IN THE PREMISES OF ONE SHRI. K. ITA.1443 & 1444/BANG/2013 PAGE - 2 PRAKASH SHETTY, M/S. GOLD FINCH HOTELS GROUP AND OT HERS. ONE OF THE ASSESSEE HERE, NAMELY SHRI. CHAKRAPANI WAS ALSO SEA RCHED AS A PART OF SUCH PROCEEDINGS. SECTION153A OF THE ACT, WAS INVOKED B Y THE AO ON SHRI. CHAKRAPANI. OTHER ASSESSEE, NAMELY, SMT. KAVITHA C HAKRAPANI WAS PROCEEDED U/S.153C OF THE ACT. ASSESSEES IN RESPON SE TO NOTICES HAD FILED THEIR RETURNS ON 27.06.2011, DECLARING INCOME OF RS .11,18,810/- AND RS.6,66,770/- RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SHRI. CHAKRAPANI, AO NOTICED THAT HE HAD SHOWN A SUM OF RS.30 LAKHS AS DUE TO ONE SHRI. A. T. VIJAY KUMAR IN THE STATEM ENT OF AFFAIRS FILED. SIMILAR TO THIS, IN THE STATEMENT OF AFFAIRS FILED BY SMT. KAVITHA CHAKRAPANI, A SUM OF RS.32,80,000/- WAS SHOWN AS LI ABILITY DUE TO ONE SHRI. K. M. GIRI. AO REQUIRED THE ASSESSEES TO EXP LAIN AND FILE EVIDENCE IN SUPPORT OF THE ABOVE LIABILITIES. 02. VIS-A-VIS LIABILITY OF RS.30 LAKHS DUE TO SHRI. A. T. VIJAY KUMAR, SUBMISSION OF THE ASSESSEE WAS THAT THE SAID AMOUNT WAS RECEIVED AS ADVANCE FROM SHRI. SHRI. A. T. VIJAY KUMAR, FOR SAL E OF A PROPERTY OWNED BY SHRI. CHAKRAPANI, AT NO.5/1, CHIKKABETTAHALLI, Y ELAHANKA HOBLI, BENGALURU. AS PER THE ASSESSEE, PAYMENTS WERE RECE IVED PURSUANT TO AN AGREEMENT DT.20.05.2006. AO EXAMINED SHRI. A. T. V IJAY KUMAR. SHRI. ITA.1443 & 1444/BANG/2013 PAGE - 3 A. T. VIJAY KUMAR STATED THE SUM OF RS.30 LAKHS PAI D TO THE ASSESSEE, THROUGH THREE DDS OF RS.10 LAKHS EACH, WERE OUT OF CASH OF RS.30 LAKHS RECEIVED FROM THE ASSESSEE AND DEPOSITED BY HIM IN HIS BANK ACCOUNT WITH ICICI BANK, KALYAN NAGAR. AS PER SHRI. A. T. VIJAY KUMAR, THE CASH OF RS.30 LAKHS WAS RECEIVED FROM THE ASSESSEE AS A LOA N. SHRI. A. T. VIJAY KUMAR DENIED THE AGREEMENT FOR SALE PRODUCED BY THE ASSESSEE IN SUPPORT OF THE RECEIPT OF RS.30 LAKHS FROM SHRI. A. T. VIJA Y KUMAR. VERSION OF SHRI. A. T. VIJAY KUMAR WAS THAT A SUM OF RS.30 LAK HS WAS RECEIVED BY HIM AS LOAN IN CASH FROM THE ASSESSEE FOR PURCHASI NG A SITE FROM THE ASSESSEE AND SINCE THE TRANSACTION DID NOT GO THROU GH, HE HAD RETURNED THE AMOUNT THROUGH THE DDS. ANOTHER STATEMENT WAS RECO RDED ON 18.05.2010, FROM SHRI. A. T. VIJAY KUMAR, WHEREIN HE REITERATED HIS STAND TAKEN EARLIER. WHEN ASSESSEE WAS PUT ON NOTICE OF THE VERSION OF S HRI. A. T. VIJAY KUMAR, ASSESSEE DENIED THE STATEMENT OF SHRI. A. T. VIJAY KUMAR. ACCORDING TO THE ASSESSEE WHAT WAS RECEIVED FROM SHRI. A. T. VIJAY K UMAR WAS ONLY ADVANCE FOR SALE OF A SITE AT CHIKKABETTAHALLI, YEL AHANKA HOBLI. 03. IN SO FAR AS THE CREDIT OF RS.32,80,000/- SHOWN BY SMT. KAVITHA CHAKRAPANI AS DUE TO SHRI. K. M. GIRI, EXPLANATION WAS THAT SHE HAD ENTERED INTO A CONTRACT WITH SHRI. K. M. GIRI FOR CONSTRUCT ION OF A COMPLEX IN ITA.1443 & 1444/BANG/2013 PAGE - 4 KODIGEHALLI MAIN ROAD. AS PER SMT. KAVITAHA CHAKRA PANI, THE CONTRACT WAS FOR CONSTRUCTION OF 9,000 SFT BUILDING AT THE R ATE OF RS.550/- PER SFT, FOR A TOTAL AMOUNT OF RS.52,80,000/-. SMT. KAVITHA CHA KRAPANI SUBMITTED TO THE AO THAT SHE HAD ALREADY PAID RS.20 LAKHS TO SHR I. K. M. GIRI AND THE BALANCE SUM OF RS.32,80,000/- WAS SHOWN AS LIABILIT Y DUE TO SHRI. K. M. GIRI, SINCE THE CONSTRUCTION OF COMMERCIAL COMPLEX WAS COMPLETE. AO THEREUPON RECORDED A STATEMENT FROM SHRI. K. M. GIR I ON 10.06.2010. SHRI. K. M. GIRI CONFIRMED THAT HE HAD ENTERED INTO A CON TRACT FOR CONSTRUCTING A COMMERCIAL COMPLEX FOR SMT. KAVITHA CHAKRAPANI. HO WEVER, ACCORDING TO HIM, HE HAD RECEIVED ONLY RS.20 LAKHS AND THE CONST RUCTION WAS STILL TO COMPLETE. AS PER SHRI. K. M. GIRI, WORK ON TWO FLO ORS ALONE WERE ONLY COMPLETE AND THE WORK ON BALANCE TWO FLOORS WAS PEN DING AS PER SHRI. K. M. GIRI, NOTHING WAS RECEIVABLE FROM SMT. KAVITHA C HAKRAPANI SINCE THE BUILDING WAS INCOMPLETE. WHEN THIS WAS PUT TO THE ASSESSEE, REPLY OF THE ASSESSEE WAS THAT CONSTRUCTION WAS COMPLETE AND THE BALANCE DUE TO SHRI. K. M. GIRI WAS PENDING AND THE CONTRACT WAS NEVER T ERMINATED BY EITHER OF THE PARTIES. 04. HOWEVER, AO WAS NOT IMPRESSED BY THE SUBMISSION S OF EITHER SHRI. CHAKRAPANI OR SMT. KAVITHA CHAKRAPANI. HE HELD THA T SHRI. CHAKRAPANI ITA.1443 & 1444/BANG/2013 PAGE - 5 COULD NOT PROVE THE LIABILITY OF RS.30 LAKHS SHOWN AS DUE TO SHRI. A. T VIJAY KUMAR AND SMT. KAVITHA CHAKRAPANI COULD NOT S HOW SUFFICIENT EVIDENCE TO EXPLAIN THE LIABILITY OF RS.32,80,000/- DUE TO SHRI. K. M. GIRI. ADDITIONS WERE MADE IN BOTH THE CASES ACCORDINGLY. 05. BOTH THE ASSESSEES MOVED IN APPEAL BEFORE THE C IT (A). BEFORE THE CIT (A), ASSESSEES IN ADDITION TO REITERATING THE CONTENTIONS TAKEN BEFORE THE AO ALSO PRODUCED LETTERS FROM THE CONCERNED CRE DITORS. THROUGH THESE LETTERS, THE CREDITORS RETRACTED FROM THEIR EARLIER STATEMENTS AND CONFIRMED THAT THESE AMOUNTS WERE DUE FROM THE ASSESSEES TO T HEM. IN THE CASE OF SHRI. A. T. VIJAY KUMAR, HE STATED THAT THE EARLIER STATEMENT GIVEN WAS DUE TO CONFUSION. SHRI. K. M. GIRI CONFIRMED THAT THE CONSTRUCTION WAS COMPLETE AND THE BALANCE WAS DUE TO HIM. ASSESSEES ALSO FILED AFFIDAVITS OF SHRI. A. T. VIJAY KUMAR AND SHRI. K. M. GIRI, IN SU PPORT. HOWEVER, CIT (A) DID NOT ACCEPT THESE SUBMISSIONS OR AFFIDAVITS FILED BY THE ASSESSEE. ACCORDING TO HIM, FACTS AND CIRCUMSTANCES DEMONSTRA TED THAT THE CREDITORS HAD DECLINED THE VERSION OF THE ASSESSEE AND AFFIRM ED THAT NOTHING WAS DUE TO THEM FROM THE ASSESSEES. HE THUS UPHELD THE ADD ITIONS. 06. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE OR DERS OF CIT (A) SUBMITTED THAT IN THE CASE OF ASSESSEE, SHRI. CHAKR APANI, VERSION OF SHRI. ITA.1443 & 1444/BANG/2013 PAGE - 6 VIJAY KUMAR WAS UNBELIEVABLE. ACCORDING TO HIM, MO NEY RECEIVED FROM SHRI. A. T. VIJAY KUMAR, WAS THROUGH DDS. IT WAS S UPPORTED BY AN AGREEMENT FOR SALE OF A PROPERTY OWNED BY THE ASSES SEE. VERSION OF SHRI. A. T. VIJAY KUMAR THAT ASSESSEE HAD PAID RS.30 LAKH S IN CASH AND THIS WAS USED BY HIM FOR GIVING ADVANCE TO THE ASSESSEE COUL D NOT BE BELIEVED. IN ANY CASE, AS PER THE LD. AR, SHRI. VIJAY KUMAR HAD RETRACTED HIS EARLIER STATEMENT AND CONFIRMED THE DUES FROM THE ASSESSEE. SIMILARLY IN THE CASE OF SMT. KAVITHA CHAKRAPANI ALSO, LD. AR SUBMITTED T HAT SHRI. K. M. GIRI HAD LATER FILED AN AFFIDAVIT IN WHICH HE ACCEPTED C OMPLETION OF THE BUILDING. HE ALSO STATED THAT THE SUM OF RS.32,80,000/- WAS D UE FROM THE ASSESSEE. ACCORDING TO HIM, IN TOTAL DISREGARD OF THESE AFFID AVITS CIT (A) HAD CONFIRMED THE ADDITIONS. 07. PER CONTRA, LD. DR SUPPORTED THE ORDERS OF LOWE R AUTHORITIES. HE SUBMITTED THAT THE RETRACTION MADE BY THE CREDITORS COULD NOT BE BELIEVED SINCE THEY COULD NOT SHOW ANY GOOD REASON FOR SUCH RETRACTIONS. 08. I HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. IN SO FAR AS RS.30 LAKHS SHOWN AS DUE FROM SHRI. A. T. VIJAY KUM AR IS CONCERNED, IT IS NOT DISPUTED THAT THE ASSESSEE HAD FILED A COPY OF SALE AGREEMENT DT.20.05.2006. NO DOUBT, SHRI. A. T. VIJAY KUMAR H AD LATER DENIED HIS ITA.1443 & 1444/BANG/2013 PAGE - 7 SIGNATURE ON THE SALE AGREEMENT, WHEN A STATEMENT WAS TAKEN FROM HIM. BUT THE SALE AGREEMENT, COPY OF WHICH HAS BEEN PLAC ED AT PAGES 9 TO 11 OF THE PAPER BOOK, CLEARLY SHOW THAT IT WAS WITNESSED BY TWO PERSONS WHO HAD GIVEN THEIR RESPECTIVE SIGNATURES AND ADDRESS. VE RSION OF SHRI. A. T. VIJAY KUMAR THAT RS.30 LAKHS MONEY WAS GIVEN IN CASH BY T HE ASSESSEE, WHICH WAS USED BY HIM TO GIVE CHEQUES TO THE ASSESSEE, IN MY OPINION, WAS NOT SUPPORTED BY ANY EVIDENCE. SHRI. A. T. VIJAY KUMAR WAS ONLY TRYING TO WRIGGLE OUT OF A SITUATION IN WHICH HE HAD TO ANSWE R FOR THE SOURCE OF RS.30 LAKHS. IN ANY CASE, SHRI. A. T. VIJAY KUMAR HAD TH ROUGH AN AFFIDAVIT, RETRACTED HIS EARLIER STATEMENT AND CONFIRMED HAVIN G GIVEN RS.30 LAKHS AS ADVANCE . 09. COMING TO THE SUM OF RS.32,80,000/- SHOWN BY SM T. KAVITHA CHAKRAPANI, AS DUE TO SRI. K. M. GIRI, IT IS NOT DI SPUTED THAT A CONTRACT FOR CONSTRUCTION WAS ENTERED BY HER WITH SHRI. K. M. GI RI. THE CONTRACT WAS FOR CONSTRUCTION OF 9,000 SQ.FT AT THE RATE OF RS.5 50/- PER SFT. TOTAL AMOUNT PAYABLE BY SMT. KAVITHA CHAKRAPANI TO SHRI. K. M. G IRI ON COMPLETION OF THE WORK, AS PER THIS CONTRACT WAS RS.52,80,000/-. SHRI. K. M. GIRI HAD ACCEPTED THE RECEIPT OF RS,20 LAKHS AS ALSO THE FAC TUM OF ENTERING INTO THE CONTRACT. WHAT HE STATED WAS THAT THE BUILDING WAS NOT YET COMPLETE. ITA.1443 & 1444/BANG/2013 PAGE - 8 HOWEVER, THIS WAS LATER RETRACTED BY HIM THROUGH AN AFFIDAVIT. ONCE SHRI. K. M. GIRI, CONFIRMED THAT THE BUILDING WAS COMPLET E, IT WAS NECESSARY FOR THE ASSESSEE TO SHOW A LIABILITY OF RS.32,80,000/- AS DUE TO SHRI. K. M. GIRI, BEING THE BALANCE AMOUNT AS PER THE CONTRACT. I A M OF THE OPINION THAT THE LOWER AUTHORITIES FELL IN ERROR IN IGNORING THESE F ACTS WHICH WERE GLARING ON RECORD. IN MY OPINION, BOTH THE ADDITIONS WERE NOT WARRANTED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ADDITIONS STAND DELE TED. 10. IN THE RESULT, APPEALS OF THE ASSESSEES ARE ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DAY OF JUNE, 2016. SD/- (ABRAHAM P GEORGE) ACCOUNTANT ME MBER