ITO, Ward 1(3), Nashik V. Shri Sachin Sukhdeo Kathar, Nashik

ITA 1653/PUN/2013

• Counselvise Citation: 165324514 RSA 2013
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1653/PN/2013 (ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER, WARD 1(3), NASHIK. . APPELLANT VS. SHRI SACHIN SUKHDEO KATHAR, MAIN MARKET YARD, PANCHAVATI, NASHIK 03. PAN : AIIPK4735G . RESPONDENT DEPARTMENT BY : MR. P. S. NAIK ASSESSEE BY : NONE DATE OF HEARING : 21-08-2014 DATE OF PRONOUNCEMENT : 26-08-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 07.06.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 17.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE RESPONDENT/ASSESSEE INSPITE OF SERVICE OF NOTICE WH EREAS THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI P.S. NAIK, APPEAR ED ON BEHALF OF THE APPELLANT/REVENUE. IN THE ABSENCE OF ANY APPEARANC E BY THE ASSESSEE IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE INSP ITE OF SERVICE OF NOTICE, FOLLOWING RULE 25 OF THE APPELLATE TRIBUNAL, 1963, WE HAVE PROCEEDED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE RESPONDENT A FTER HEARING THE APPELLANT/REVENUE ON MERITS. ITA NO.1653/PN/2013 A.Y. : 2009-10 3. IN THIS APPEAL, THE IMPUGNED GROUND OF APPEAL RA ISED BY THE REVENUE IS AS FOLLOWS :- 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN DELE TING THE ADDITION OF RS.12,00,000/- OUT OF UNEXPLAINED INVESTMENT FOR PU RPOSE OF AGRICULTURAL LAND. 4. IN BRIEF, THE FACTS ARE THAT ASSESSEE IS AN INDI VIDUAL ENGAGED IN THE BUSINESS OF COMMISSION AGENCY AND FOR THE YEAR UNDE R CONSIDERATION HE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2,92, 730/-. THE SAID RETURN WAS SUBJECT TO SCRUTINY ASSESSMENT WHEREIN THE TOTAL IN COME WAS ASSESSED TO RS.20,63,976/- WHICH, INTER-ALIA, INCLUDED AN ADDIT ION OF RS.13,60,000/- ON ACCOUNT UNEXPLAINED INVESTMENT MADE IN ACQUISITION OF AN AGRICULTURAL LAND. THE SAID ADDITION HAS SINCE BEEN REDUCED BY THE CIT (A) TO RS.1,60,000/- AND THEREFORE THE REVENUE IS IN APPEAL BEFORE US CHALLE NGING THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE TO THE EXTENT O F RS.12,00,000/-. 5. BEFORE THE ASSESSING OFFICER, ON BEING ASKED TO JUSTIFY AVAILABILITY OF FUNDS FOR ACQUIRING THE AGRICULTURAL LAND, ASSESSEE SUBMITTED THAT A SUM OF RS.12,00,000/- WAS GIVEN TO HIM BY HIS MOTHER, SMT. HOUSHYABAI SUKHDEV KATHAR, THE STATEMENT OF MOTHER WAS RECORDED BY THE ASSESSING OFFICER IN WHICH SHE DEPOSED OF HAVING GIVEN ASSESSEE A SUM OF RS.12,00,000/- IN CASH FROM TIME TO TIME FOR THE PURPOSE OF PURCHASING THE AGRICULTURAL LAND IN QUESTION. IN HER STATEMENT, SHE ALSO EXPLAINED THA T THE AMOUNT WAS ADVANCED OUT OF ACCUMULATED FUNDS AVAILABLE WITH HER FROM AG RICULTURAL ACTIVITIES BEING CARRIED OUT BY HER. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED AND TREATED THE ENTIRE INVEST MENT OF RS.13,60,000/- TOWARDS ACQUISITION OF AGRICULTURAL LAND AS UNEXPLA INED. 6. IN APPEAL, ASSESSEE REITERATED THAT HIS MOTHER W AS OWNING AGRICULTURAL LANDS TO THE EXTENT OF 14.5 ACRES AND HER EARNINGS OVER THE YEARS FROM ITA NO.1653/PN/2013 A.Y. : 2009-10 AGRICULTURAL LANDS WAS ENOUGH TO EXPLAIN THE AMOUNT OF RS.12,00,000/- GIVEN TO THE ASSESSEE. THE CIT(A) HAS ACCEPTED THE EXPLANAT ION FURNISHED BY THE ASSESSEE FOR THE REASONS HEREUNDER :- 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE RIVAL CONTENTIONS. ON PERUSAL OF THE SAME, IT HAS BEEN NO TICED THAT THERE IS ANCESTRAL AGRICULTURAL LAND ADMEASURING 5 HECTOR 80 R I.E. 14.5 ACRES OF KATHAR FAMILY WHICH IS IN THE NAME OF MOTHER OF THE APPELLANT. THE AGRICULTURAL INCOME CLAIMED BY THE MOTHER OF THE AP PELLANT AT ABOUT RS.3,50,000/- P.A. WORKS OUT TO ABOUT RS.24,000/- P ER ACRE WHICH APPEARS TO ME TO BE REASONABLE IN VIEW OF THE FACTS AND CIR CUMSTANCES OF THE CASE. 5.3.1 THE CLAIM OF THE APPELLANT THAT FOR PURCHASIN G THE AGRICULTURAL LAND HIS MOTHER HAS ADVANCED AN AMOUNT OF RS.12,00, 000/- IS SUPPORTED BY THE STATEMENT RECORDED ON OATH ON 10/11/2011 OF THE MOTHER OF THE APPELLANT BY THE AO. ON PERUSAL OF THE SAID STATEME NT, RECORDED ON OATH IT HAS BEEN NOTICED THAT THE MOTHER OF THE APPELLANT H AS IN UNAMBIGUOUS TERMS EXPLAINED THE LAND HOLDING, THE AGRICULTURAL INCOME PER ANNUM, CROPS GROWN, THE PARTIES TO WHOM THE AGRICULTURAL PRODUCE HAS BEEN SOLD, THE NET AGRICULTURAL INCOME EARNED AND THE FACT OF ADVANCIN G RS.12,00,000/- TO THE APPELLANT FOR PURCHASING THE AGRICULTURAL LAND. 5.3.2 THE AO HAS RAISED VARIOUS CONTENTIONS FOR NOT ACCEPTING THE CLAIM OF THE APPELLANT ABOUT AMOUNT OF RS.12,00,000 /- ADVANCED BY HIS MOTHER FOR PURCHASING AGRICULTURAL LAND, WHICH HAVE BEEN REASONABLY REBUTTED BY THE APPELLANT IN HIS SUBMISSION REPRODU CED IN THE PRECEDING PARA. IT HAS BEEN NOTICED THAT THE MOTHER OF THE AP PELLANT IS NOT EDUCATED AND IS RESIDING IN VILLAGE TALEGAON IN THE AGRICULT URAL LAND CULTIVATED BY HER AND IS NOT AWARE ABOUT BANK TRANSACTIONS AND HENCE HAD KEPT AGRICULTURAL INCOME AT HER RESIDENCE. IT HAS ALSO BEEN NOTICED THAT THE AGRICULTURISTS HAVING SUBSTANTIAL AGRICULTURAL INCOME OBTAIN AGRIC ULTURAL LOAN FOR PURCHASE OF AGRICULTURAL EQUIPMENTS, SEEDS, FERTILIZERS, ETC . AS SUBSIDY IS AVAILABLE ON SUCH PURCHASES AND RATE OF INTEREST IS ALSO ON LOWE R SIDE. 5.3.3 THE AO HAS NOT BROUGHT ON RECORD ANY EVIDENCE SUGGESTING THAT EITHER THE APPELLANT OR THE MOTHER OF THE APPE LLANT HAD ANY OTHER SOURCE OF INCOME WHICH HAS NOT BEEN DISCLOSED TO TH E AO. IN VIEW OF THE ABOVE FACTS AND DISCUSSION I AM OF THE CONSIDERED V IEW THAT THE APPELLANT HAS PROVED THE SOURCE FOR PURCHASING THE AGRICULTUR AL LAND TO THE EXTENT OF RS.12,00,000/-. 7. AGAINST THE AFORESAID ACTION OF THE CIT(A), REVE NUE IS IN APPEAL BEFORE US. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTA TIVE HAS PRIMARILY RELIED UPON THE ORDER THE ASSESSING OFFICER IN SUPPORT OF THE CASE OF THE REVENUE. ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIV E, THE MOTHER, SMT. HOUSHYABAI SUKHDEV KATHAR COULD NOT PRODUCE ANY EVI DENCE OF HAVING EARNED AGRICULTURAL INCOME SO AS TO GIVE A SUM OF R S.12,00,000/- TO THE ASSESSEE. ITA NO.1653/PN/2013 A.Y. : 2009-10 8. WE HAVE CONSIDERED THE OBJECTIONS RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE AND HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE CRUX OF THE CONTROVERSY IS AS TO WHETHER ASSESS EE HAS APPROPRIATELY EXPLAINED THE SOURCE OF RS.12,00,000/- INVESTED IN PURCHASE OF AGRICULTURAL LAND DURING THE YEAR UNDER CONSIDERATION. ACCORDIN G TO THE ASSESSEE, THE SAID AMOUNT WAS RECEIVED BY HIM FROM HIS MOTHER WHO HAS SINCE CONFIRMED THE SAME IN THE COURSE OF HER DEPOSITION BEFORE THE ASS ESSING OFFICER. WE FIND THAT THE CIT(A) HAS APPRECIATED THE DEPOSITION OF A SSESSEES MOTHER. ON THAT BASIS, IT IS RECORDED BY HIM THAT IN THE COURSE OF HER STATEMENT, THE MOTHER, SMT. HOUSHYABAI SUKHDEV KATHAR EXPLAINED THE EXTENT OF HER LAND HOLDINGS, THE AGRICULTURAL INCOME PER ANNUM, CROPS GROWN, THE PARTIES TO WHOM THE AGRICULTURAL PRODUCE WAS SOLD, ETC. AND CONFIRMED T HAT SHE GAVE RS.12,00,000/- TO HER SON I.E. THE ASSESSEE, FOR TH E PURPOSES OF ACQUIRING THE AGRICULTURAL LAND IN QUESTION. ON THE BASIS OF THE DEPOSITION MADE BY THE MOTHER, THE CIT(A) HAS FOUND IT APPROPRIATE TO ACCE PT THE EXPLANATION REGARDING THE SOURCE OF RS.12,00,000/- 9. IN OUR CONSIDERED OPINION, THE FINDINGS OF THE C IT(A), WHICH WE HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER, CLEARL Y ESTABLISH THAT THERE IS NO MATERIAL WITH THE REVENUE TO DISPROVE THE DEPOSITIO N MADE BY THE ASSESSEES MOTHER BEFORE THE ASSESSING OFFICER. IN-FACT, THE DEPOSITION OF ASSESSEES MOTHER HAS BEEN DISBELIEVED BY THE ASSESSING OFFICE R ON MERE SUSPICION AND THERE IS NO CREDIBLE MATERIAL TO NEGATE THE ASSERTI ONS MADE BY HER IN THE COURSE OF STATEMENT RECORDED BY THE ASSESSING OFFIC ER. THEREFORE, IN THIS VIEW OF THE MATTER, WE HEREBY AFFIRM THE ORDER OF THE CI T(A) DELETING THE ADDITION OF RS.12,00,000/- AND ACCORDINGLY, REVENUE FAILS ON TH IS ASPECT. ITA NO.1653/PN/2013 A.Y. : 2009-10 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 26 TH AUGUST, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE