Smt. Hansaben Shantilal Mehta, Baroda V. The Income Tax Officer, Ward-2(4), Vadodara

ITA 164/AHD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4574 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 19-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: T P HEMANI
• Keywords: Unexplained cash credit; Capital asset; Principle of natural justice; Additional evidence
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SMT. HANSABEN SHANTILAL MEHTA, C/O RAJESH MEHTA, 401, KRISHNA COURT, 40, NUTAN BHARAT SOCIETY, AKAPURA, BARODA PAN: AARPM4392C (APPELLANT) VS THE IT O , WARD - 2(4) , BARODA (RESPONDENT) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: SHRI T.P. HEMANI, A.R. DATE OF HEARING : 26 - 09 - 2 018 DATE OF PRONOUNCEMENT : 09 - 10 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTAN T MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2009 - 10 , ARI SES FROM ORDER OF THE CIT(A) - 5, VADODARA DATED 12 - 09 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPE AL: - 1. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF AO IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE ACTION OF R EOPENING IS WITHOUT JURISDICTION AND NOT PERMISSIBLE EITHER IN LAW OR ON FACTS. 2. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF AO IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT WITHOUT PROVIDING R EASONS FOR REOPENING. I T A NO . 164 / A HD/20 17 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 16 4 /AHD/20 17 A.Y. 2009 - 10 PAGE NO SMT. HANSABEN SHANTILAL MEHTA VS. IT O 2 3. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN NOT ADMITTING ADDITIONAL EVIDENCE U/S.46A. 4. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIR MING THE ACTION OF AO IN MAKING AN ADDITION OF LONG - TERM CAPITAL GAIN BY HOLDING THAT THE TRANSFER TOOK PLACE IN AY 2009 - 10 WHEN IT WAS RIGHTLY OFFERED FOR TAX IN AY 2010 - 11. 5. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTIO N OF AO IN NOT ALLOWING COST OF IMPROVEMENT WHILE COMPUTING LONG - TERM CAPITAL GAIN. 6. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN NOT GRANTING FULL DEDUCTION U/S.54F OF THE ACT. 7. THE LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF AO IN MAKING AN ADDITION OF RS.3,00,000/ - AS UNEXPLAINED CASH CREDITS U/S.68 OF THE ACT. 8. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDERS WITHOUT PROPERLY APPRECIATING THE FACTS AND THEY FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF THE LOWER AUTHORITIES IS IN CLEAR BR EACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHED. 9. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE ID. AO IN LEVYING INTEREST U/S.234A/B/C OF THE ACT. 10. THE LEAR NED CI T(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING ACTION OF THE ID. AO IN INITIATING PENALTY U/S.271(1 )(C) OF THE ACT. 3. THE BRIEF FACT OF THE CASE IS THAT ASSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME OF RS. 2,22,780/ - ON 31 ST MARCH, 2011. SUBSEQUENTLY, A NOTICE U/S. 148 DATED 18 TH MARCH, 2013 WAS SERVED UPON THE ASSESSEE ON 30 TH MARCH, 2013. T HE ASSESSING OFFICER STATED THAT ASSESSEE HA S ACQUIRED A PROPERTY UNDER WILL FROM HER MOTHER ON 22 ND NOV, 2004 WHO H ERSELF ACQUIRED THE SAID PROPERTY ON 24 TH OCTOBER , 1994 . THEREAFTER, THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT WITH SHAIL L Y DEVELOPER S FOR RS. 1.25 CRORES AND M/S. SHAILLY DEVELOPERS HAS PAID THE ASSESSEE A SUM OF RS. 1.1 C R ORES DURING THE ASSESSMENT YEAR ASSESSMENT YEAR 2009 - 10 AND THE BALANCE OF RS. 24,00 ,00 0/ - WAS PAID TO THE ASSESSEE DURING THE ASSESSMENT YEAR 2010 - 11. ON QUARRY ABOUT PAYMENT OF CAPITAL GAIN TAX ,THE ASSESSEE EXPLAINED THAT SHE HAS PAID CAPITAL GAIN TAX ON CAPITAL GAINS OF RS.8,64,479 IN ASSESSMENT YE AR 2010 - 2011. THE ASSESSEE CLAIMED THAT SHE HA S HANDED OVER THE POSSESSION OF THE PROPERTY FOR DEVELOPMENT TO M/S SHAILY DEVELOPERS ON 17 TH APRIL , 2009 AFTER RECEIVING THE FULL PAY M ENT IN ASSESSMENT YEAR 2010 - 11. THEREFORE, TRANSFER U/S. 2(47) OF THE AC T TOOK PLACE IN ASSESSMENT YEAR 2010 - 11 AND LONG TERM CAPITAL GAIN OF R S. 8 ,6 4 , 479/ - WAS OFFERED ON ACCOUNT OF THE TRANSFER OF THE SAID PROPERTY IN I.T.A NO. 16 4 /AHD/20 17 A.Y. 2009 - 10 PAGE NO SMT. HANSABEN SHANTILAL MEHTA VS. IT O 3 ASSESSMENT YEAR 2010 - 11. THE ASSESSING OFFICER HAS REJECTED THE ASSESSEE S ARGUMENT STATING THAT THE ASSE SSEE HAS TRANSFERRED ALL HER RIGHTS IN THE PROPERTY TO M/S SHAIL L Y DEVELOPERS AND RECEIVED ALMOST 81% OF THE AGREED CONSIDERATION IN ASSESSMENT YEAR 2009 - 10 , THEREFORE, THE ASSESSEE WAS LIABLE TO BE TAXED IN ASSESSMENT YEAR 2009 - 10 . CONSEQUENTLY , THE ASSE SSING OFFICER HAS COMPUTED CAPITAL GAINS OF RS 80,02,781 AND TAXED THE BALANCE LONG TERM CAPITAL GAIN OF RS. 71,38,302/ - TO TAX IN ASSESSMENT YEAR 2009 - 10 AFTER REDUCING THE CAPITAL GAIN OF RS.8,64,479 ALREADY OFFERED BY THE ASSESSEE . DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 3 LACS TO ASSESSEE S TOTAL INCOME ON ACCOUNT OF UNEXPLAINED BANK DEPOSIT STATING THAT THERE WAS CREDIT OF RS. 3 LACS APPEARING IN THE ASSESSEE S BANK ON 4 TH SEP, 2008 AND THE ASSESSEE FAIL ED TO FURNISH ANY EVIDENCE AND EXPLANATION ABOUT THE SOURCE OF THE CREDIT ENTRY . 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE RETREATING THE REASON STATED BY THE ASSESSING OFFICER . 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LD. COUNSEL HAS CONTENDED THAT ASSESSING OFFICER HAS NOT PROVIDED REASONS FOR REOPENING OF T HE ASSESSMENT AND MERELY STATING THAT THE ASSESSEE HAS NEVER ASKED FOR THE SAME. HE HAS CONTENDED THA T BECAUSE OF NOT PROVIDING COPY OF REASON RECORDED FOR REOPENING THE ASSESSMENT , THE ASSESSING OFFICER HAS TAKEN AWAY THE RIGHT OF THE ASSESSEE TO CHALLENGE THE ASSESSMENT PROPERLY . HE HAS ALSO CONTENDED THAT ASSESSEE HAS FURNISHED ADDITIONAL EVIDENCES BE FORE THE LD. CIT(A) LIKE DEVELOPMENT AGREEMENT, AFFIDAVIT OF DEVELOPER, APPLICATION FOR CLOSURE OF WATER CONNECTION, APPLICATION FOR DEMOLITION OF CONSTRUCTION ETC. BUT THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT CONSIDERING THE ADDITION AL EVIDENCES. REGARDING OF RS. 3 L ACS IN RESPECT OF CREDIT APPEARING IN BANK A/C HE HAS SUBMITTED THAT ASSESSING OFFICER HAS NOT CONSIDERED THAT ASSESSEE HAS I.T.A NO. 16 4 /AHD/20 17 A.Y. 2009 - 10 PAGE NO SMT. HANSABEN SHANTILAL MEHTA VS. IT O 4 RECEIVED THE SAID AMOUNT THROUGH A/C PAYEE CHEQUE AND THE SAME HAS BEEN WITHDRAWN BY THE ASSESSEE A ND DEPOSITED IN OTHER BANK A/C. ON THE OTHER HAND , LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6 . WE HAVE HEARD THE BOTH THE SIDES MADE PERUSED THE MATERIAL ON RECORD CAREFULLY. I T IS UNDISPUTED FACT THAT ASSESEE H AS NOT BEEN PROVIDED THE COPY OF REASON RECORDED FOR REOPENING THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION BY THE ASSESSING OFFICER. WE NOTICED EVEN AT THE STAGE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) THE ESSENTIAL REQUIREMENT OF PROVIDING REASON OF REOPENING OF THE ASSESSMENT TO THE ASSESSEE WAS NOT CONSIDERED. B ECAUSE OF NO N AVAILABILITY OF REASON FOR REOPENING THE ASSESS MENT THE ASSESSEE HAS STATED THAT SHE HAS EXPERIENCED DIFFICULTY IN MAKING PROPER COMPLIANCE WHICH IS DEMONSTRATED FROM THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A) LIKE DEVELOPMENT AGREEMENT, AFFIDAVIT OF DEVELOPER, APPLICATION FOR CLOSURE OF WATER CONNECTION, APPLICATION FOR DEMOLITION OF CONSTRUCTION ETC. THE LD. CIT(A) HAS REJECTED THE ADDITI ONAL EVIDENCES ON THE GROUND THAT SAME WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER WITHOUT ANY SUFFICIENT CAUSE. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES WE OBSERVE THAT IMPERATIVELY THE ASSESSING OFFICER SHOULD HAVE DISCLOSED THE REASON FOR RE OPENING OF THE ASSESSMENT U/S 147 OF THE ACT AS A RESULT ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE LIKE DEVELOPMENT AGREEMENT, AFFIDAVIT OF DEVELOPER, APPLICATION FOR CLOSURE OF WATER CONNECTION, APPLICATION FOR DEMOLITION OF CONSTRUCTION ETC WERE NEITHE R EXAMINED AT THE LEVEL OF THE ASSESSING OFFICER NOR AT THE LEVEL OF LD.CIT(A). IN VIEW OF ABOVE LACUNA WE CONSIDER THAT IT WILL BE APPROPRIATE TO RESTORE THIS CASE TO T HE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH ON EXAMINATION/VERIFICATION OF MATERI AL FURNISHED BY THE ASSESSEE. ACCORDINGLY THE ASSESSMENT IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER AS DIRECTED ABOVE TO BE DECIDED A FRESH AFTER PROVIDING COPY OF REASON RECORDED FOR REOPENING ASSESSMENT U/S. 147 AND AFTER AFFORDING ADEQUATE OPPOR TUNITY TO THE ASSESSE E . SINCE THE ASSESSMENT HAS BEEN SET ASIDE TO THE I.T.A NO. 16 4 /AHD/20 17 A.Y. 2009 - 10 PAGE NO SMT. HANSABEN SHANTILAL MEHTA VS. IT O 5 FILE OF ASSESSING OFFICER FOR DECIDING A FRESH THEREFORE THE OTHER GROUNDS OF APPEAL HAS BECOME INFRUCTUOUS. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PR ONOUNCED IN THE OPEN C OURT ON 09 - 10 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 09 /10 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,