Tukaram Maruti Venjane, Latur V. Income-tax Officer,

ITA 1663/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9234 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Business income; Income from undisclosed sources; Principle of natural justice

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1663 /P U N/201 6 / ASSESS MENT YEAR : 20 0 9 - 1 0 TUKARAM MARUTI VENJANE, C/O SUNIL GUDE, OPP. EKTA HOSPITAL, MEGHRAJ NAGAR, SHAHU CHOWK, LATUR - 413572 . / APPELLANT PAN: A EDPV4200N VS. THE INCOME TAX OFFICER , WARD 3(3), LATUR . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : S HRI MUKESH JHA / DATE OF HEARING : 1 5 . 0 2 .201 8 / DATE OF PRONOUNCEMENT: 28 . 0 2 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , AURANGABAD , DATED 1 1 . 0 5 .20 1 6 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) IS ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION MADE BY A.O. OF RS.12,21,000/ - OUT OF THE TOTAL ADDITION OF RS.12,80,600/ - MADE BY A.O. THE LD. CIT(A) FAILED TO APPRECIATE THE CREDITWORTHINESS ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 2 OF TH REE PARTIES NAMELY NARAYAN VENKATRAO GUDE, TIMBAK SANGAPPA PETE, SATISH SHRIRANG BNDAPALLE WHO HAVE GIVEN ADVANCE (BAYANA) TO PURCHASE THE LAND. THE CREDITWORTHINESS OF THE PARTIES CAN BE ESTABLISHED FROM TOTAL HOLDING OF LAND AS EVIDENT FROM EXTRACT 7/12 OF LANDS, BANK STATEMENTS, PENSION DETAILS. REMAND REPORT WAS ASKED FROM A.O. TO CHECK THE CREDITWORTHINESS OF THE PARTIES WHO HAD GIVEN ADVANCE. A.O. INTERVIEWED THESE PARTIES, CHECKED LAND HOLDINGS DOCUMENTS, BANK PASSBOOKS, PENSION DOCUMENTS AND EARN ING SOURCE OF OTHER PERSONS IN THE FAMILY. GOING THROUGH THIS PROCESS A.O. CONFIRMED THE CREDITWORTHINESS OF THE PARTIES TO GIVE ADVANCE AMOUNT OF RS.4/4.21 LAKHS EACH. THE ACTION OF LD. CIT(A) IGNORING THE DOCUMENTS PRODUCED, STATEMENTS RECORDED AND ALS O REMAND REPORT SUBMITTED BY A.O. IS IN CLEAR VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LD. CIT(A) IS ERRED IN LAW AND ON FACTS IN NOT GIVING OPPORTUNITY TO CROSS OR BEING HEARD WHILE REJECTING THE REMAND REPORT OF A.O. WHICH IS IN CLEAR VIOL ATION OF THE PRINCIPLES OF NATURAL JUSTICE. 3. THE ASSESSEE IS IN APPEAL AGAINST THE ORDERS OF AUTHORITIES BELOW IN CONFIRMING THE ADDITION OF 12,21,000/ - OUT OF TOTAL ADDITION OF 12,80,600/ - MADE BY THE ASSESSING OFFICER. THE CASE OF REVENUE IS THAT THE ASSESSEE HAD FAILED TO PROVE CREDITWORTHINESS OF THE PERSONS WHO HAD GIVEN ADVANCES TO PURCHASE THE LAND. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME O F 2,47,050/ - . THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN LEGAL PROFESSION. THE ASSESSING OFFICER RECEIVED AIR INFORMATION OF CASH DEPOSIT IN ICICI BANK. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT OF 11,16,000/ - AND 11,38,843/ - . THE ASSESSEE IN REPLY SUBMITTED THAT ADVANCES WERE RECEIVED AGAINST SALE OF LAND FOR WHICH IT HAD P RODUCED HANDMADE VOUCHERS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE DOCUMENTARY EVIDENCES IN THIS REGARD INCLUDI NG THE SALE DEED OF EACH PLOT, AGAINST WHICH THE ADVANCES WERE GIVEN. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THE DETAILS AS CALLED FOR AND ALSO FURNISHED DETAILED SUBMISSIONS WHICH ARE REPRODUCED UNDER PARA 4 OF ASSESSMENT ORDER. THE ASSESSEE EXPLAINED THAT HE OWNED AGRICULTURAL LAND ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 3 MEASURING 0.46R AT RENAPUR , AGAINST WHICH HE EXECUTED AN AGREEMENT TO SELL ON 28.11.2008 FOR 18 LAKHS IN FAVOUR OF THREE PERSONS. THE ASSESSEE FURTHER CLAIMED THAT HE HAD RECEIVED 1 2 LAKHS ON THE DATE OF AGREEMENT FROM THE SAID PURCHASERS AND THE SAME WAS DEPOSITED IN CASH IN SAVINGS BANK ACCOUNT WITH ICICI BANK. THE SAME LAND WAS CONVERTED INTO NON - AGRICULTURAL LAND VIDE ORDER OF SDO, LATUR DATED 07.12.2007, WHICH WAS FURTHER CONVERTED INTO 25 PLOTS. OUT OF SAID 25 PLOTS, THE ASSESSEE CLAIMS TO HAVE SOLD 11 PLOTS, AGAINST WHICH IT HAD RECEIVED ADVANCE OF 13,45,000/ - . THE ASSESSEE IN THIS REGARD STATED THAT HE DEPOSITED 2,40,000/ - AND 3,19,821/ - IN DIFFERENT SAVINGS ACCOUNTS OF ICICI BANK. THE ASSESSING OFFICER QUESTIONED TWO TRANSACTIONS AND HELD THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE SAVINGS ACCOUN TS AND REJECTED THE PLEA IN RESPECT OF ADVANCE RECEIVED FROM THREE PERSONS OF 12 LAKHS. AS AGAINST ADVANCES RECEIVED AGAINST SALE OF PLOTS FROM VARIOUS PERSONS, THE ASSESSING OFFICER ACCEPTED EXPLANATION OF 13,45,000/ - . THE ASSESSING OFFICER ALSO HAD RECORDED STATEMENTS OF THREE PERSONS, WHO COULD NOT GIVE ANY REASONS FOR CANCELLATION OF AGREEMENTS. THE ASSESSING OFFICER THUS, TREATED SUM OF 12, 21 , 0 00/ - AS INCOME FROM UNDISCLOSED SOURCES. 5. BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THAT THE A SSESSING OFFICER HAD FAILED TO CONSIDER EVIDENCES PRODUCED BY THE PERSONS TO WHOM THE LAND WAS AGREED TO BE SOLD. THE PERSONS FROM WHOM ADVANCE PAYMENT OF 12,21,000/ - WAS RECEIVED BY THE ASSESSEE HAD CONFIRMED THE ADVANCE PAYMENT AND HAD ALSO SUBMITTED 7/12 EXTRACTS OF LANDS, PHOTOCOPIES OF SALE PATTIES OF AGRICULTURAL PRODUCE AND HENCE, PROVED THE GENUINENESS OF PAYMENTS AND THE AVAILABILITY OF FUNDS WITH THEM. THE NEXT PLEA OF ASSESSEE WAS THAT HE HAD CLARIFIED THE AVAILABILITY OF SUFFICIENT FUNDS FR OM SOURCES AS WELL AS REGULAR CASH WITHDRAWALS WHICH WOULD BE SUFFICIENT TO PROVE THE DEPOSITS MADE IN THE ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 4 BANK ACCOUNTS. FURTHER PLEA OF ASSESSEE WAS THAT THE AGREEMENT TO SELL WAS ORALLY CANCELLED BY MUTUAL CONSENT AND THE ASSESSEE HAD REFUNDED SUM OF 12,21,000/ - TO THREE PURCHASERS.. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED JOINT AFFIDAVIT OF THREE PERSONS, WHO HAD ADVANCED THE SAID SUM OF 12,21,000/ - , WHICH WAS FORWARDED TO THE ASSESSING OFFICER AND HE WAS ASKED TO CALL FOR THE SAID PERSONS FOR VERIFICATION AND TO FIND OUT THEIR CAPACITY AND CREDITWORTHINESS TO ADVANCE THE SAID AMOUNTS. THE ASSESSING OFFICER IN REPLY, SUBMITTED ITS REMAND REPORT. THE CIT(A) REFERRED TO THE STATEMENT RECORDED OF EACH PERSON AND N OTED THAT THREE PERSONS APART FROM ESTABLISHING THE FACT THAT THEY OWNED AGRICULTURAL LAND HAD NOT BEEN ABLE TO ESTABLISH NECESSARY INCOME FROM AGRICULTURE WHICH COULD BE UTILIZED FOR GIVING ADVANCE TO THE ASSESSEE. FURTHER, TWO OUT OF THREE HAD FAILED TO PRODUCE ANY SALE PATTIES TO ESTABLISH THEIR CASE OF AGRICULTURAL PRODUCE. IN THE CASE OF SHRI PETE, WHO HAD FURNISHED VARIOUS SALE PATTIES, THE CIT(A) NOTED THAT THE SAME COULD NOT ESTABLISH HIS CASE OF GENERATING ENOUGH SURPLUS WHICH COULD BE UTILIZED F OR GIVING ADVANCE TO THE ASSESSEE. IN THE ABSENCE OF THE SAME, THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER AS THE ASSESSEE HAD FAILED TO ESTABLISH THE SOURCE OF DEPOSITS MADE IN THE SAID BANK ACCOUNTS. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT BEFORE THE ASSESSING OFFICER AND IN THE REMAND / APPELLATE PROCEEDINGS BEFORE THE CIT(A), THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSITS IN BANK ACCOUNTS. HOWEV ER, THE AUTHORITIES BELOW ARE ENQUIRING INTO THE SOURCE OF SOURCE WHICH CANNOT BE SO ENQUIRED. IN THIS REGARD, HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF JHARKHAND IN PRAYAG TENDU LEAVES PROCESSING CO. VS. CIT (2018) 252 TAXMAN 306 (JHARKHAND) AND ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 5 CHANDIGARH BENCH OF TRIBUNAL IN JAWAHAR LAL VS. ITO (2014) 35 ITR (TRIB) 71 (CHANDIGARH). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 9. ON PERUSAL OF RECORD AND AFTER HEARING BO TH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST ADDITION OF 12,21,000/ - . THE ASSESSING OFFICER HAD RECEIVED AIR INFORMATION IN RESPECT OF CASH DEPOSITS IN TWO SEPARATE BANK ACCOUNTS WITH ICICI BANK. THE ASSESSEE WAS PRACTICING HIGH COURT ADVOCATE AND HAD OWNED AGRICULTURAL LAND ADMEASURING 0. 4 6R AT RENAPUR. THE ASSESSEE ON ONE HAND CLAIMS THAT NA PERMISSION WAS RECEIVED ON 07.12.2007 AND THE LAND WAS CONVERTED INTO 25 PLOTS, OUT OF WHICH THE ASSESSEE SOLD 11 PLOTS TO VARIOUS PERSONS. THE ASSESSEE CLAIMS TO HAVE RECEIVED ADVANCE OF 13,45,000/ - , WH ICH WAS DEPOSITED IN ONE OF THE BANK ACCOUNTS. THE ASSESSING OFFICER ACCEPTED EXPLANATION IN RESPECT OF SAID ADVANCE RECEIVED. IN RESPECT OF DEPOSIT IN OTHER BANK ACCOUNT, THE ASSESSEE EXPLAINED THAT IT HAD ENTERED INTO AN AGREEMENT TO SELL ON 28.11.2008 FOR SALE OF AFORESAID AGRICULTURAL LAND IN FA VOUR OF THREE DIFFERENT PERSONS, AGAIN FROM WHOM HE RECEIVED CUMULATIVE SUM OF 12,21,000/ - . THE SAME WAS DEPOSITED IN CASH IN HIS BANK ACCOUNT WITH ICICI BANK AND ON LATER DATE , THE SAME WAS ALSO REFUNDED. THE FIRST DISPARITY WHICH WAS NOTED BY THE ASS ESSING OFFICER THAT ON ONE HAND, THE ASSESSEE CLAIMS THAT THE AGRICULTURAL LAND WAS CONVERTED INTO PLOTS, OUT OF WHICH 11 PLOTS WERE SOLD AND IN RESPECT OF PLOT NOS.2 AND 3, SALE DEED WAS EXECUTED ON 11.09.2008. THE BUSINESS PROFITS ARISING ON THE SAID PL OT OF LAND WERE ALSO ADDED AS BUSINESS INCOME IN THE HANDS OF ASSESSEE. ON THE OTHER HAND, THE ASSESSEE CLAIMS THAT IN RESPECT OF THE SAME LAND, OUT OF WHICH TWO PLOTS HAVE BEEN SOLD ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 6 ON 11.09.2008, ANOTHER AGREEMENT TO SELL WAS ENTERED INTO ON 28.11.2008. THE ASSESSING OFFICER IN THE FIRST INSTANCE HAS DOUBTED THE SAID AGREEMENT BEING FEASIBLE WHERE THE SAID LAND HAS ALREADY BEEN PLOTTED AND OUT OF WHICH SALE DEED FOR TWO PLOTS WERE ALSO EXECUTED ON 11.09.2008 ; HENCE THE AGRICULTURAL LAND AS SUCH, COULD N OT BE AGREED TO BE SOLD TO THREE DIFFERENT PERSONS. THE DISPARITY IN THE EXPLANATION NOTED BY THE ASSESSING OFFICER HAS NOT BEEN CLARIFIED BY THE ASSESSEE TILL DATE. THE CASE OF ASSESSEE IS TIME AND AGAIN TO STRESS THAT THE PERSONS WHO HAD GIVEN ADVANCE AGAINST ALLEGED AGREEMENT TO SELL DATED 28.11.2008 HAD APPEARED BEFORE THE ASSESSING OFFICER AND GIVEN THEIR RESPECTIVE 7/12 EXTRACTS AND ADMITTED TO HAVE GIVEN CASH TO THE ASSESSEE AND HENCE, SOURCE OF SOURCE COULD NOT BE QUESTIONED AND EXPLANATION SHOULD BE ACCEPTED IN TOTO. THERE IS NO MERIT IN THE CLAIM OF ASSESSEE AS BOTH THE ASSESSING OFFICER AND CIT(A) HAVE FOUND FOR SURE, THAT THE LANDHOLDINGS AND THE EARNINGS FROM THE SAID LANDHOLDINGS WERE NOT SUFFICIENT FOR THE SAID PERSONS TO HAVE MADE EVEN THE ADVANCE OF ABOUT 4 LAKHS EACH. THE TOTAL EARNINGS IN THREE YEARS IN RESPECT OF ONE OF THE PARTIES WHO HAD PRODUCED SALE PATTIES TOTALED TO 7,92,180/ - , WHICH W OULD TAKE CARE OF HIS AGRICULTURAL OPERATIONS , EXPENSES OF HIMSELF AND HIS FAMILY DURING THE PERIOD OF THREE YEARS AND WAS NOT SUFFICIENT TO GENERATE SURPLUS OF 4 LAKHS. IN RESPECT OF BALANCE TWO PARTIES, THE SALE PATTIES OF AGRICULTURAL PRODUCE HAVE NOT BEEN PRODUCED BEFORE ANY OF THE AUTHORITIES. MERELY THE SAID PARTIES OWNED AGRICULTURAL L ANDS AND THE RESPECTIVE 7/12 EXTRACTS HAVE BEEN PRODUCED BY THE SAID PARTIES DOES NOT JUSTIFY THE EARNING OF REVENUE IN THE FORM OF AGRICULTURAL PRODUCE. THE ONUS IS UPON THE ASSESSEE NOT ONLY TO IDENTIFY THE PERSONS BUT ALSO TO PROVE THE CREDITWORTHINESS OF SAID PERSONS AND ALSO PROVE THE GENUINENESS OF TRANSACTIONS. THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN CAST UPON HIM AND IN THE ABSENCE OF THE SAME, THE ASSESSEE CANNOT TAKE THE SHELTER THAT THE ASSESSING OFFICER AND CIT(A) HAVE RAISED QUERIES I N RESPECT OF SOURCE OF ITA NO. 1663 /P U N/20 1 6 TUKARAM MARUTI VENJANE 7 SOURCE. THERE IS NO MERIT IN THE SAME. THE QUERIES WERE RAISED IN ORDER FOR THE ASSESSEE TO EXPLAIN CREDITWORTHINESS OF THE PERSONS FROM WHOM IT HA D RECEIVED THE ABOVE SAID AMOUNTS. IN THE ABSENCE OF SAME BEING DISCHARGED, THE SAI D EXPLANATION OF ASSESSEE CANNOT BE ACCEPTED. IN RESPECT OF GENUINENESS OF TRANSACTIONS, THE SAME HAS BEEN DOUBTED IN VIEW OF THE PLOT OF LAND BEING SUB - PLOTTED AND 11 PLOTS BEING ALREADY SOLD BY THE ASSESSEE INDEPENDENT OF THE TRANSACTIONS WITH THREE PER SONS IN RESPECT OF SAME LAND. ACCORDINGLY, UPHOLDING THE ORDER OF CIT(A), THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 1 0 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 28 TH DAY OF FEBRUARY , 201 8 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 28 TH FEBRUARY , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , AURANGABAD ; 4. THE PR. CIT - 2 , AURANGABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE