Shri Amit Laxmanbhai Patel, Ahmedabad V. The Dy.CIT, Central Circle-1(2), Ahmedabad

ITA 1674/AHD/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0949 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 14-11-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 20-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Search and seizure; Corroborative evidences; Validity of assessment; Capital Gains
• Section: 143(3); 153A; 201; 191; 54EC; 13; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER SHRI AMIT LAXMANBHAI PATEL, 8 MARUTI HILLS BUNGALOWS, SATELLITE, AHMEDABAD - 380015 PAN: ABJPP9877A (APPELLANT) VS THE DCIT , CENTRAL CIRCLE - 1 ( 2) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI DILIP KUMAR , SR. D . R. ASSESSEE BY: MS. URVASHI SHODHAN , A.R. DATE OF HEARING : 14 - 11 - 2 019 DATE OF PRONOUNCEMENT : 06 - 12 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE FOUR APPEALS FILED BY ASSESSEE FOR A.Y. 2009 - 10 TO 2012 - 13 , ARI SE FROM ORDER OF THE CIT(A) - 11, AHMEDABAD , IN PROCEEDINGS UNDER SECTION 1 4 3 R.W.S. 153A OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. ALL THE FOUR APPEALS OF THE ASSESS EE ARE INTER - CONNECTED TO THE COMMON ISSUE ON SIMILAR FACTS, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL THESE APPEALS ARE ADJUDICATED BY THIS COMMON ORDER AS FOLLOWS: - I T A NO S . 1674 TO 1677 / A HD/20 16 A SS ESSMENT YEAR 2009 - 10 TO 2012 - 13 I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 2 3. THE FACT IN BRIEF IS THAT A SEARCH U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF MARUTI GROUP ON 27 TH APRIL, 2011 AND THE ASSESSEE AS A SUB - GROUP WAS ALSO COVERED UNDER THE AFORESAID SEARCH AND SEIZURE OPERATION. CONSEQUENTLY, THE ASSESSING O FFICER HAS FINALIZED ASSESSMENT U/S. 143(3) R.W.S. 153A OF THE ACT. THE VARIOUS ADDITIONS CONTESTED IN THE APPEAL FILED BY THE ASSESSEE ARE DISCUSSED AS UNDER WHILE ADJUDICATING THE GROUNDS OF APPEAL FILED BY THE ASSESSEE. 4 . GROUND NOS. 1 AND 2 PERTAINING TO CHALLENGING OF VALIDITY OF ASSESSMENT ARE NOT PRESSED THEREFORE THE SAME STANDS DISM ISSED. IN THE RESULT, THE SIMILAR GROUNDS FOR ASSESSMENT YEAR 2009 - 10 TO 2011 - 13 ARE DISMISSED. GROUND NOS. 3 AND 4 FOR ASSESSMENT YEAR 2009 - 10 OF DISALLOWANCE OF INTEREST PAID OF RS. 1 , 67 , 465/ - ON BORROWING FOR ACQUISITION OF RENTED PROPERTY AND GROUN D NOS. 7 & 8 FOR ASSESSMENT YEAR 2010 - 11 AND DISALLOWANCE OF INTEREST PAID OF RS. 1 , 95 , 832/ - ON BORROWING FOR ACQUISITION OF RENTED PROPERTY. 5 . THESE GROUNDS OF APPEALS ARE PERTAINED TO THE ISSUE OF CONFIRMING THE DISALLOWANCE OF INTEREST PAID OF R S. 167 , 465/ - ON BORROWING FOR ACQUISITION OF RENTED PROPERTY. THE ASSESSEE HAS CLAIMED THAT LOAN WAS TAKEN FROM AXIS BANK FOR PURCHASE OF PROPERTY FROM WHICH THE RENT WAS RECEIVED AND THE INCOME WAS ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HE FURNISH ED THE COPY OF BANK STATEMENT OF AXIS BANK SHOWING PAYMENT OF INSTALLMENT AND CLAIMED DEDUCTION U/S. 24B OF THE ACT. THE ASSESSING OFFICER HAS REJECTED THE CLAIM ON THE GROUND THAT ASSESSEE HAS NOT SUBMITTED COPIES OF BANK STATEMENT OF AXIS BANK. THE LD. CIT(A) HAS DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE. I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 3 6 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. CO U NSE L HAS SUBMITTED THAT IDENTICAL ISSUE ON SIMILAR FACT IN THE CASE OF THE ASSESSEE ITSELF HAS EVEN ADJUDICATED BY THE CO - ORDINA TE BENCH OF THE ITAT VIDE ITA NO. 1678/A HD/2016 ON 21 ST MARCH, 2018 IN FAVOUR OF THE ASSESSEE, THEREFORE , CONTENDED THAT ISSUE BE DECIDED ACCORDINGLY. ON THE OTHER HAND , LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED ON THE ORDER OF CIT(A). 7 . HEARD BOTH THE SIDES AND PERUSED THE ORDER OF C O - ORDINATE BENCH OF THE ITAT AS REFERRED ABOVE AND NOTICED THAT IDENTICAL ISSUE ON SIMILAR FACT HAS BEEN ADJUDICATED AT PARA 7 OF THE ABOVE REFERRED ORDER AS UNDER: - 7. SO FAR GROUND NOS. 3 & 4 ARE CONCERNED. LD. AO HAS DIS CUSSED THIS ISSUE IN HIS ORDER AT PAGE'NO.3 & 4, PARA 5 & 5.2. IN SUPPORT OF ITS CONTENTION REGARDING DISALLOWANCE OF INTEREST OF RS.1,69,442/ - TO PAID ON LOAN TAKEN FROM AXIS BANK FOR PURCHASE OF RENTAL PROPERTY SITUATED AT MAURYA ATRIA COMPLEX, OPP. ATIT HI RESTAURANT, AHMEDABAD. IT WAS SUBMITTED BY THE APPELLANT THAT LOAN WAS TAKEN FROM AXIS BANK FOR PURCHASE OF PROPERTY FROM WHICH THE RENT WAS RECEIVED AND INCOME WAS ASSESSED AS HOUSE PROPERTY INCOME. HE FURNISHED COPY OF STATEMENT OF AXIS BANK SHOWING P AYMENT OF INSTALLMENTS. HE CLAIMED DEDUCTION U/S.24(B) OF THE ACT IN PAPER BOOK FILED BEFORE US. SAME ARE REFLECTED AT PAGE NO.45 TO 50. IN VIEW OF THE ABOVE EXPLANATION GIVEN BY THE APPELLANT, WE ARE SATISFIED WITH THE CONTENTION OF THE APPELLANT, HENCE, WE ALLOW THIS GROUND OF APPEAL OF THE APPELLANT. RESPECTFULLY FOLLOWING THE DECISION OF CO - OR DINATE BENCH OF THE ITAT AS CITED ABOVE, THIS GROUND OF APPEAL FOR ASSESSMENT YEAR 2009 - 10 AND ASSESSMENT YEAR 2010 - 11 ARE ALLOWED GROUND NOS. 3 & 4 FOR ASSE SSM ENT YEAR 2010 - 11 OF DISALLOWANCE OF RS. 2 , 22 , 191/ - AS DEDUCTION FOR INCIDENTAL EXPENSES IN COMPUTING LTCG ON SALE OF LAND AND GROUND NO. 3 & 4 FOR ASSESSMENT YEAR 2011 - 12 FOR DISALLOWANCE OF R S. 6 , 17 , 500/ - OF BROKERAGE IN COMPUTING LTCG ON SALE OF LAND 8 . DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND AND CLAIMED LAND KEEPING EXPENSES TO THE AMOUNT OF R S. 2 , 22 , 191 FROM THE SAID I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 4 CAPITAL GAIN. THE ASSESSING OFFICER HA S DISALLOWED THE CLAIM OF THE FORESAID EXPENDITURE ON THE GROUND THAT ASSESSEE HAS NOT SUBMITTED ANY DOCUMENTARY PROOF FOR INCURRING OF SUCH EXPENSES. T HE LD. CIT(A) HAS ALSO SUSTAINED T HE AFORESAID DISA LLOWANCE AFTER REITERATING THE REASON AS REPORTED B Y T H E ASSESSING OFFICER. DU RING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED THAT IDENTICAL ISSUE WAS ADJUDICATED BY THE CO - ORDINATE BENCH OF THE ITAT VIDE ITA 1680/AHD/2016 IN THE CASE OF THE ASSESSEE ITSELF ON 21 ST MAR CH, 2018. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A). 9 . HEARD BOTH THE SIDES AND PERUSED HE ABOVE REFERRED DECISION OF THE ITAT, IT IS NOTICED THAT THE CO - ORDINATE BENCH OF THE ITAT VIDE ITA NO. 1680/AHD /2016 IN THE CASE OF THE ASSESSEE ITSELF HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THIS ISSUE AS THE ASSESSEE HAS FAILED TO FURNISH THE CONCRETE PROOF IN SUPPORT OF ITS CLAIM OF INCURRING THE AFORESAID EXPENSES. THE RELEVANT PART OF THE DECISION OF CO - O RDINATE BENCH AT PARA 19 OF THE ORDER IS AS UNDER : - 19. SO FAR GROUND NOS. 3 & 4 WITH REGARD TO LTCG/STCG CONCERNED. AO HAS DISCUSSED AT PAGE NO.2 & 3, PARA 5 5.4 AND PAGE NO.3 & 4, PARA 6 & 6.2. SAME HAS DISCUSSED BY ID. CIT(A) AT PAGE NO.7 & 8, PARA 8 & 8.2. SO FAR BROKERAGE EXPENSES RS.2,92,500/ - ARE CONCERNED. APPELLANT SOLD PROPERTY AT LILAPUR AND EARNED LONG TERM CAPITAL GAINS. SIMILARLY, LAND WAS SOLD IN SHILAJ, BLOCK NO.65 AND EARNED SHORT TERM CAPITAL GAINS. THE APPELLANT CLAIMED THAT HE HAS INCU RRED EXPENSES OF BROKERAGE OF RS.2,25,000/ - AND RS.67,500/ - AND HE HAS STATED THAT PAYMENT OF BROKERAGE OF RS.2,25,000/ - WAS MADE BY ACCOUNT PAYEE CHEQUE FOR SALE OF LAND IN LILAPUR. THE EXPENSES WERE INCURRED IN RELATION TO TRANSACTION OF THE LAND WHICH W AS ALLOWABLE DEDUCTION U/S.48 OF THE ACT. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGNED ORDER AND PAPER BOOK FILED BY THE APPELLANT. NO SUCH LEDGER ACCOUNT FOR PAYMENT OF BROKERAGE, WAS FURNISHED . CONTENTION OF THE APPELLANT THAT EVEN WITHOUT REDU CING COST OF BROKERAGE THE INVESTMENT MADE IN THE NEW AGRICULTURAL LAND WAS MORE THAN A CAPITAL GAIN EARNED WAS MISLEADING AND DISTORTED FORM OF CONTENTION WHICH WAS CONTRARY TO THE THE PROVISION OF THE LAW. IN OUR CONSIDERED OPINION, ANY CLAIM MADE BY THE APPELLANT, WHICH WAS NOT SUBSTANTIATED WITH ANY CONCRETE PROOF. SUCH EXPENSES CANNOT BE ALLOWED U/S.48 OF INCOME TA ACT. THEREFORE, THESE GROUNDS OF APPEAL ARE DISMISSED. I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 5 DURING THE YEAR UNDER CONSIDERATION ALSO, THE ASSESSEE COULD NOT JUSTIFY THE AFOR ESAID CLAIM WITH RELEVANT SUPPORTING EVIDENCES . SIMILARLY THE ASSESSEE ALSO COULD NOT SUBSTANTIATE THE CLAIM OF BROKERAGE EXPENSES TO THE AMOUNT OF RS. 6,17,500/ - PERTAINS TO A.Y. 2011 - 12 WITH RELEVANT DOCUMENTARY EVIDENCES. T HEREFORE , WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD. CIT(A) ON THIS ISSUE PERTAINING TO BOTH THE ASSESSMENT YEARS . ACCORDINGLY, GROUND NO. 3 IS DISMISSED. 10. REGARDING A LTERNATIVE CONTENTION THAT DISALLOWANCE DESERVED TO BE DELETED WHEN ENTIRE GAIN IS INVESTE D I N 54EC, WE COULD NOT FIND ANY SPECIFIC FINDINGS OF THE LD. CIT(A) ON THIS IS SUE. T HEREFORE, WE RESTORE THIS ALTERNATIVE CONTENTION OF THE ASSESSEE TO THE FILE OF ASSESSING OFFICER FOR DECIDING DE - NOVO ACCORDING TO THE CONDITIONS STIPULATED IN SECTION 54EC OF THE ACT AFTER EXAMINATION/VERIFICATION OF THE DETAILS TO BE FURNISHED BY THE ASSESSEE. THEREFORE, GROUND OF APPEAL 4 OF ASSESSMENT YEAR 2010 - 11 AND ASSESSMENT YEAR 2011 - 12 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS. 5 & 6 OF ASSESSMENT YEAR 2010 - 11, GROUND NOS. 5 & 6 OF ASSESSMENT YEAR 201 1 - 12 AND GROUND NOS. 3 & 4 OF ASSESSMENT YEAR 2012 - 13 PERTAINING TO DISALLOWANCE OF DEPRECIATION ON MOTOR CAR USED FOR PURPOSE OF BUSINESS. 11 . DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOT ICED THAT ASSESSEE HAS CLAIMED DEPRECIATION TO THE AMOUNT OF RS. 9 , 88 , 435/ - DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS DISALLOWED CLAIM OF THE DEPRECIATION STATING THAT ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR BUSINESS CARRIED BY IT. THE L D. CIT(A) HAS SUSTAINED THE DISALLOWANCE . D URING THE COUR S E OF APPELLATE PROCEEDINGS, THE LD. COUNSEL HAS SUBMITTED THAT IDENTICAL I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 6 ISSUE ON SIMILAR FACT HAS BEEN ADJUDICATED BY THE CO - ORDINATE BENCH OF THE ITAT I N THE CASE OF THE ASSESSEE ITSELF VI DE ITA NO. 1679/AHD/2016 ON 21 ST MARCH, 2018. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 12 . HEARD BOTH T HE SIDES AND PERUSED THE ABOVE REFERRED DECISION OF T HE CO - ORDINATE BENCH OF THE ITAT . IT IS NOT ICED THAT THE C O - ORDINATE BENCH OF THE ITAT VIDE ABOVE REFERRED DECISION AS ADJUD ICATED THIS ISSUE IN APPEAL IN FAVOUR OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE ASSESSEE IS REPRODUCED AS UNDER: - 13. SO FAR GROUND NOS. 3 & 4 WITH REGARD TO CONFIRMATION OF DISALLOWANCE OF RS.10,91,728/ - FOR DEPRECIATION CLAIMED ON MOTOR CAR ARE CONCERNED, SAME ARE INTERCONNECTED. LOWER AUTHORITIES HELD THAT THE APPELLANT WAS NOT BEING ANY BUSINESS. THEREFORE, HE WAS NOT ENTITLED FOR DEPRECIATION. LD. AR DREW OUT ATTENTION TOWARDS THE CIT(A)'S ORDER AT PAGE NO.4, PARA 7 & 7.2, IN WHICH APPELLANT STATED THAT HE WAS ENGAGED IN THE ACTIVITY OF PURCHASE AND SALE OF LAND HELD FOR TRADING. THE PROFIT WAS OFFERED FOR TAX AS BUSINESS INCOME, HE PREPARED TH E ACCOUNTS WHICH JUSTIFIED THE CLAIM OF THE ASSESSEE THAT HE CARRIED OUT AN ADVENTURE AND BUSINESS OF TRADING IN LAND WHICH AMOUNTED TO BUSINESS ACTIVITY. WE ARE CONVINCED WITH THE CONTENTION OF THE APPELLANT AND ALLOW THIS GROUND OF APPEAL. RESPECTFULLY FOLLOWING THE DECISION OF CO - ORDINATE BENCH OF THE ITAT AS CITED ABOVE, THIS GROUND OF APPEAL FOR ASSESSMENT YEAR S 2010 - 11 TO 2012 - 13 ARE ALLOWED 13 . IN THE RESULT, ITA APPEAL S 1674 TO 1677/AHD/2016 OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL P URPOSES . ORDER PR ONOUNCED IN THE OPEN C OURT ON 06 - 12 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 06 /12 /2019 I.T.A NO S . 1674 TO 1677 /AHD/20 16 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO SHRI AMIT LAXMANBHAI PATEL VS. DCIT 7 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,