Income Tax Officer, Ward-1(3)(2), Surat, Surat V. Shri Jaykumar S. Goplani, Surat

ITA 16/SRT/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2052 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA NAIR
• Assessee Lawyers: JAGASHETH
• Keywords: Unexplained investment; Capital asset; Loose papers; Document seized; Documents seized
• Section: 148; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURATBENCH, SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER . / ITA.NO.16/SRT/2017 [ [ / ASSTT. YEAR: 2009-10 ITO, WARD-1(3)(2) SURAT. VS. SHRI JAYKUMAR S. GOPLANI PLOT NO.B-2, R.D. PARK SOCIETY B/H. ALTHAN TENAMENT BHATAR CHAR RASTA, SURAT. PAN : ACSPG 6187 G / (APPELLANT) / (RESPONDENT) REVENUE BY : SMT.SMITA NAIR, SR.DR ASSESSEE BY : SHRI JAGASHETH, CA / DATE OF HEARING : 13/11/2018 / DATE OF PRONOUNCEMENT: 15 /11/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF LD.CIT(A)-III, SURAT DATED 3.5.2017 PASSED FOR THE ASSTT.YEAR 2009-10. 2. THOUGH REVENUE HAS TAKEN FOUR GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) HAS ERRED IN HOLDING THAT ADDITION OF RS.61,36,647/- IN RESPECT OF ON-MONEY PAID BY THE ASSESSEE FOR PURCHASE OF AN ASSET DESERVES TO BE ADDED IN THE ASSTT.YEAR 2008-09 AND NOT IN THE ASSTT.YEAR 2009-10. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 17.3.2010 DECLARING TOTAL INCOME AT RS.1,30,321/-. A SEARCH WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF SHRI PITAMBAR B. RUCHANDANI, WHERE ANNEXURE A/1 WAS FOUND AND SEIZED. A PERUSAL OF PAGES 117 TO 119 OF THESE LOOSE PAPERS ITA NO.16/SRT/2017 2 FILE, IT REVEALED THAT THE LOOSE PAPERS PERTAINS TO THE LAND AT MAGDALLA AT SURVEY NOS.104 AND 105. AS PER THE NOTING OF THESE PAPER, THE PROPERTY ADMEASURING WAS 1500 SQ.YARDS, BUT ACTUAL REGISTRATION WAS DONE FOR 3,528.20 SQ.YARDS. THE REGISTERED SALE DEED WAS EXECUTED FOR A CONSIDERATION OF RS.25.00 LAKHS, WHEREAS ACTUAL PRICE PAID WAS OF RS.7,92,08,090/-. IN OTHER WORDS, PROPERTY WAS PURCHASED AT THE RATE OF RS.22,450/- PER SQ.YARD. CENT.CIR.3, SURAT HAS TRANSMITTED THIS INFORMATION TO THE AO OF THE ASSESSEE. THE LD.AO FOUND THAT ASSESSEES SHARE IN THE PURCHASE OF THE ALLEGED PROPERTY WAS ONLY 8%. THUS, HE FORMED AN OPINION THAT IN THE COMPONENT OF ON-MONEY, THE ASSESSEE HAS PAID RS.61,36,1247/-. HE REOPENED THE ASSESSMENT AND ASSESSED THE ABOVE AMOUNT AS UNACCOUNTED INVESTMENT IN THE PROPERTY. ON APPEAL, THE LD.CIT(A) FOUND THAT TRANSACTION FOR PURCHASES OF THIS PROPERTY WAS MATERIALIZED BEFORE 30.3.2008. THEREFORE, THE TRANSACTION OUGHT TO BE CONSIDERED IN ASSESSMENT YEAR 2008-09 INSTEAD OF 2009-10. THE LD.CIT(A) HAS ISSUED DIRECTIONS UNDER SECTION 150(1) OF THE ACT TO THE AO TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT IN THE ASST.YEAR 2008-09 AND CARRY OUT EXERCISE OF ASSESSING UNACCOUNTED INVESTMENT IN THAT YEAR. THE FINDING RECORDED BY THE LD.CIT(A) IN THIS CONNECTION READS AS UNDER: 6.2.3. IN VIEW OF THE ABOVE FACTS AND DISCUSSIONS, IT IS EVIDENT THAT THE AO FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAD ALREADY OBTAINED THE POSSESSION OF THE PROPERTY ON 30.03.2008 U/S 2(47)(V) OF THE ACT WELL BEFORE THE REGISTRATION OF THE SALE DEED IN JUNE 2008. THE HONBLE ITAT BENCH RELYING ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MORMASJI M. VAID 250 ITR 542 (FB) HELD THAT SUCH A TRANSFER HAS TO BE ASSESSED TO TAXED IN THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR WITHIN WHICH THE DATE OF EXECUTION OF THE DATE OF TRANSFERS FALSE AND NOT THAT PERTAINING TO ITS REGISTRATION SINCE THE LETTER IS ONLY ACT OF THE OFFICER APPOINTED BY LAW TO REGISTER A DOCUMENT. HENCE, THE CONTENTION OF THE APPELLANT REGARDING THE RELEVANT ASSESSMENT YEAR FOR THE TRANSFER OF THE PROPERTY IS FOUND TO BE CORRECT. HOWEVER, THE PERUSAL OF THE FACTS SHOWS THAT THE AO HAD ISSUED THE NOTICE U/S 148 ERRONEOUSLY FOR AY 2009-10 INSTEAD OF A.Y. 2008-09 AND HAS MADE THE ADDITION IN A.Y. 2009-10 THOUGH THE TRANSACTIONS WERE RELATED TO A.Y 2008-09. THE AO IS DIRECTED U/S 150(1) OF THE ACT TO ISSUE NOTICE U/S 148 OF THE ACT FOR ITA NO.16/SRT/2017 3 A.Y. 2008-09 AND TO REOPEN THE RELEVANT ASSESSMENT YEAR REGARDING THE TRANSACTIONS RECORDED IN THE SEIZED MATERIAL AS DISCUSSED ABOVE. THE ADDITION OF THE TRANSACTIONS RECORDED IN THE SEIZED DOCUMENTS BY THE AO IN A.Y. 2009-10 IS ERRONEOUS AND IS BEING DELETED AND THE GROUND OF APPEAL IS ALLOWED. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT AGREEMENT WAS EXECUTED BEFORE 31.3.2008. PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE PARTLY AND PART PAYMENT WAS SHOWN THROUGH POST-DATED CHEQUE. THE LD.COMMISSIONER HAS OBSERVED THAT TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT WAS COMPLETE ONCE POSSESSION WAS DELIVERED ON RECEIPT OF CONSIDERATION. THIS FACT WAS NOT DISPUTED. HE ALSO TOOK NOTE OF THE ORDER OF THE ITAT, AHMEDABAD ON IDENTICAL ISSUE RENDERED IN THE CASE OF HEMANT ISHWARLAL DESAI IN ITA NO.1705/AHD/2012. IT IS ALSO PERTINENT TO OBSERVE THAT IN THE CASE OF VENDOR RECEIPT OF ON-MONEY HAS BEEN STATED TO BE ASSESSED IN THE ASSTT.YEAR 2008-09. CONSIDERING THE FACT THAT TRANSACTION WAS MATERIALIZED IN THE ACCOUNTING YEAR RELEVANT TO THE ASSTT.YEAR 2008-09, WE FIND THAT THE LD.CIT(A) HAS RIGHTLY ISSUED DIRECTIONS UNDER SECTION 150(1) OF THE INCOME TAX ACT FOR REOPENING OF THE ASSESSMENT IN THE ASSTT.YEAR 2008-09. WE DO NOT FIND ANY ERROR IN THE FINDING OF THE LD.CIT(A), HENCE, THIS GROUND OF APPEAL IS REJECTED. 5. IN OTHER GROUNDS, THE REVENUE HAS JUST RAISED PERIPHERAL ARGUMENTS WITHOUT SPECIFIC ISSUE. HENCE, ALL OTHER GROUNDS ARE REJECTED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 15 TH NOVEMBER, 2018 AT SURAT. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER SURAT; DATED 15 /11/2018