The ITO, Ward-1(3), Ahmedabad V. M/s. Chintu Realities Pvt. Ltd., Ahmedabad

ITA 1744/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8800 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Additional evidence
• Section: 143(3); 133(6)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1744/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) ITO WARD-1(1)(3), A-303, A-WING, PRATYAKSHA KAR BHAVAN, BEHIND PANJARAPOLE, POLYTECHNIC AMBAVADI, AHMEDABAD- 380015 / VS. M/S. CHINTU REALITIES PVT. LTD. A/211, SHIVALIK CORPORATE PARK, SHYAMAL CHAR RASTA, OPP. A- ONE SCHOOL, 132 FT. RING ROAD, SATELLITE, AHMEDABAD- 380015 ./ ./ PAN/GIR NO. : AAD CC2 430 Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI APOORVA BHARDWAJ, SR. DR / RESPONDENT BY : NONE / DATE OF HEARING 09/07/2019 !'# / DATE OF PRONOUNCEMENT 11/07/2019 $%/ O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)-1, AHMEDABAD (CIT(A) IN SHORT ), DATED 23.03.2015 ARISING IN THE ASSESSMENT ORDER DATED 3 0.03.2013 PASSED BY THE ASSESSING OFFICER UNDER S. 143(3) OF THE INC OME TAX ACT, 1961 (THE ACT) CONCERNING A.Y. 2010-11. ITA NO.1744/AHD/2015 [ITO VS. M/S. CHINTU REALITIES PVT. LTD.] A.Y. 2010-11 - 2 - 2. THE GROUNDS OF APPEAL OF THE REVENUE READS AS U NDER:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N ADMITTING ADDITIONAL EVIDENCES AND ON THAT BASIS DELETING THE ADDITION OF RS. 99,67,268/- FOR UNEXPLAINED INVESTMENT AND ADDITION OF RS. 2,52,37,140/- AS UNEXPLAINED INCOME ON SALE OF PROP ERTIES. (2) THE LD. CIT(A) HAS NOT APPRECIATED THE FACT THA T THE ASSESSEE HAS NOT EXPLAINED THE CIRCUMSTANCES THAT PREVENTED IT FROM PRODUCING THE INFORMATION CALLED FOR. 3. NONE APPEARED FOR THE ASSESSEE. IT IS SEEN FROM THE RECORD THAT DESPITE SEVERAL OPPORTUNITIES, THE ASSESSEE HAS REM AINED RECALCITRANT AND DID NOT TURN UP IN COMPLIANCE OF THE STATUTORY NOTICES OF HEARING. IN THE CIRCUMSTANCES, WE ARE CONSTRAINT TO PROCEED EX-PARTE IN THE ABSENCE OF THE ASSESSEE. 4. BRIEFLY, STATED IN THE COURSE OF ASSESSMENT PROC EEDING, THE AO TOOK NOTE OF CERTAIN TRANSACTIONS OF IMMOVABLE PROP ERTY AS REFLECTED IN THE AIR INFORMATION REPLIED IN THE DEPARTMENTS D ATA BASE. IT WAS NOTICED THAT AS PER THE AIR INFORMATION, THE ASSESS EE HAS PURCHASED IMMOVABLE PROPERTIES AGGREGATING TO RS. 99,67,260/- AND HAS ALSO SOLD IMMOVABLE PROPERTIES CARRYING TRANSACTION VALU E OF RS. 2,52,37,140/-. IN THE ABSENCE OF EXPLANATION OFFER ED IN RESPECT OF SUCH TRANSACTIONS, THE AO INVOKED THE PROVISIONS OF THE ACT AND ADDED RS. 99,67,260/- TOWARDS UNEXPLAINED INVESTMEN T AND RS. 2,52,37,140/- TOWARDS UNEXPLAINED INCOME ON SALE OF PROPERTIES. THE TOTAL INCOME RETURNED BY THE ASSESSEE AT RS. 9, 43,850/- WAS THUS ASSESSED AT RS. 3,61,48,250/-. ITA NO.1744/AHD/2015 [ITO VS. M/S. CHINTU REALITIES PVT. LTD.] A.Y. 2010-11 - 3 - 5. AGGRIEVED, ASSESSEE PREFERRED THE APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE INTER ALIA CONTENDED THAT THE ASSESSEE IS DEALING IN LAND TRANSACTION AS STOCK-IN -TRADE AND PURCHASE AND SALE OF THE RESPECTIVE TRANSACTIONS BEING PERFO RMED ARE ACCOUNTED FOR IN THE RESPECTIVE YEAR. THE CIT(A) A FTER TAKING NOTE OF WRITTEN SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE REMAND REPORT OF THE AO DISLODGED THE AFORESAID ADDITIONS IN FOLLOWING TERMS:- 5. I HAVE PERUSED THE FACTS OF THE CASE AS ENUMERA TED BY A.O. AND AS SUBMITTED BY APPELLANT. AFTER CAREFUL CONSIDERATION OF FACTS, SUBMISSION AND CONTENTION OF BOTH A.O. AS WELL AS O F APPELLANT, GROUND WISE ADJUDICATION IS AS FOLLOWS: 5.1. BEFORE ADJUDICATION OF GROUND, THE FIRST & FOR MOST REQUIREMENT IS ADJUDICATION OF ADMISSION OF ADDITIONAL EVIDENCE S. THE A.O. IN THE IMPUGNED ORDER RECORDED THAT APPELLANT FURNISHED TH E AUDIT REPORT IN FORM NO. 3CD ALONGWITH ITS ENCLOSURES AS REQUIRED U NDER 44AB OF THE ACT AND BOOKS OF ACCOUNTS WERE PRODUCED WHICH WERE EXAMINED. BOTH THE ADDITION MADE BY A.O. ARE ON ACCOUNT OF AIR INF ORMATION IN THIS CASE RELATED TO PURCHASE & SALE OF IMMOVABLE PROPERTIES. THE A.O. O N VERIFICATION OF DETAILS & REPLY FROM APPELLANT HELD THAT IT IS NOT CLEAR THAT THE TRANSACTION REFLECTED IN AIR HAVE BE EN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OR NO. THE APPELLANT BEFORE M Y PREDECESSOR IN APPEAL VIDE LETTER DT. 03/07/2014 (SUBMITTED ON 15/ 07/2014) CONTENDED THAT SINCE ADDITIONS ARE BASED ON AIR INF ORMATION RELATED TO PURCHASE & SALE OF IMMOVABLE PROPERTIES AND THER E BEING DIFFERENCE IN SOME AMOUNT WITH RESPECT TO FIGURES O F PURCHASE/SALE REPORTED BY SUB REGISTRAR, ANAND IN THE AIR HENCE T O EVIDENCE THE BONA FIDE OF APPELLANT A CERTIFIED COPY UNDER RULE 114(B) REFLECTING TRUE NATURE WITH OTHER DETAILS WAS REQUESTED FROM S UB REGISTRAR ANAND WHICH WAS SUPPLIED BY HIM TO APPELLANT AT 5 P M OF 30/03/2013 BUT BY THAT TIME THE A.O. ALREADY PASSED THE ORDER ON 30/03/2013. WHEN SUCH EVIDENCES WERE SUBMITTED TO A.O. WHO REFU SED TO ADMIT SINCE HE ALREADY PASSED THE ORDER. NOW THESE EVIDEN CES BE ADMITTED AS ADDITIONAL EVIDENCES. IT WAS ALSO CONTENDED THAT A.O. HAD CALLED SUCH DETAILS U/S. 133(6) OF THE ACT ON 24/03/2013 D IRECTLY FROM SUB REGISTRAR ANAND BUT HE ALSO DID NOT RECEIVED THE SA ME BEFORE-PASSING OF ORDER ON 30/03/2043 THOUGH HE RECEIVED THE SAME IN 1ST WEEK OF APRIL. THIS BEING INFORMATION FROM THIRD PARTY, THE APPELLANT CONTENDED THAT IT WAS PREVENTED BY SUFFICIENT CAUSE NOT TO PRODUCE THE SAME, HENCE THESE EVIDENCES BE ADMITTED UNDER RULE 46A. THE ITA NO.1744/AHD/2015 [ITO VS. M/S. CHINTU REALITIES PVT. LTD.] A.Y. 2010-11 - 4 - APPELLANT SUBMITTED A COPY OF REPLY DT. 30/03/2013 WITH LETTER NO. I.TAX/DETAIL/574 FROM SUB REGISTRAR ANAND TO A.O.IT O WD.1(3)/133(6)/CRPC/2012-13/DT.08/03/2013 (RECEIVED ON 30/03/2013) ALONG WITH COPIES UNDER RULE 114(B) OF THE IT RULE. THE A.O. VIDE REPORT DT.12/08/2014 THOUGH ADMITTED THAT SUCH INFORMATION FROM SUB REGISTRAR WAS RECEIVED ON 03/04/2013 BUT S INCE APPELLANT FAILED TO EXPLAIN ABOUT SUCH TRANSACTION RECORDED I N THE BOOKS OR NOT, HE WAS NOT PREVENTED BY SUFFICIENT CAUSE, FOR PRODU CING INFORMATION SO CALLED. WHEN APPELLANT AGAIN REQUESTED WITH THE ACTUAL DISCREPANCY INVOLVED AND CRUCIAL NEXUS OF SUCH INDE X UNDER I.T. RULE 114(B), THE MATTER WAS SPECIFICALLY REFERRED TO A.O . VIDE MY LETTER DT. 18/02/2015 (ALREADY DISCUSSED ABOVE AT PARA 4(F). I N RESPONSE TO THIS LETTER WHERE THE DISCREPANCY WAS ELABORATED AND A.O . WAS REQUESTED TO CONSIDER SUCH INDEX UNDER I.T. RULE 114(B), THE A.O. VIDE LETTER DT. 09/03/2015 REPORTED THAT 'ON GOING THROUGH THE COPI ES OF SALE DEED ALONG WITH PAN DETAILS RECEIVED FROM THE SUB REGIST RAR, ANAND, THE TRANSACTION REFERRED THERE IN ARE FOUND TO HAVE REC ORDED IN THE BOOK OF ACCOUNTS'. IN VIEW OF ABOVE FACTS AND FINDINGS, I AM INCLINED TO ADMIT THE ADDITIONAL EVIDENCES BEING VITAL AND GOES TO THE CO RE OF GROUNDS OF APPEAL SO RAISED. IT IS UNDISPUTED THAT ON ACCOUNT OF IMPROPER REPORTING BY SUB REGISTRAR, ANAND, SUCH INCORRECT F IGURES ARE REFLECTED IN AIR. THE APPELLANT SUBMITTED COPIES OF PURCHASE & SALE DEED BUT IN THE ABSENCE OF INDEX AS PER IT RULE 114 (B), THE NAME, PAN & AMOUNT ARE NOT VERIFIABLE FOR PURCHASE AND SA LE OF IMMOVABLE PROPERTIES AS REPORTED IN AIR. THE A.O. ALSO CALLED FOR SUCH DETAILS WHICH INDICATE THAT THESE INDEX CERTIFICATE ARE CRU CIAL FOR THE ISSUE UNDER APPEAL. THE APPELLANT VERY APPROPRIATELY DEM ONSTRATED THAT THIS BEING THIRD PARTY EVIDENCE WHICH HE GOT ON 30/03/2013 AS A.O. ALSO GOT IT ON 03/04/2013, HE WAS PREVENTED BY SUFF ICIENT CAUSE FOR NOT SUBMITTING THE SAME BEFORE A.O. IT IS THEREFORE ALL THESE EVIDENCES ARE ADMITTED FOR THE ADJUDICATING THE APPEAL. 5.2. NOW COMING TO GROUND WISE ADJUDICATION AS FOLL OWS: (A)GROUND NO. 1 TO 4 ARE INTERLINKED AND BOTH TECHNICAL AS WE LL AS ON MERIT. IT WAS CONTENDED THAT A.O. HAS NOT APPRECIATED THE DOC UMENTS IN THE FORM OF PURCHASE & SALE DEED AND WITHOUT GIVING SHO W CAUSE MADE SUCH ADDITION IN TOTAL DISREGARD OF APPELLANT BUSIN ESS OF REAL ESTATE AND SUCH PURCHASE & SALE IS CONSIDERED AS STOCK IN TRADE (INVENTORY). IT WAS ALSO CONTENDED THAT A.O. HAS NOT CONSIDERED THE REPLY FROM SUB REGISTRAR ANAND AND PASSED THE ORDER ON 30/03/2013 IN HURRY. (B) AS DISCUSSED IN DETAILS ABOVE AT PARA4() TO 4(H ) AS WELL AS WHILE ADMITTING EVIDENCES THAT A.O. AFTER VERIFICATION OF SUCH EVIDENCES, PURCHASE & SALES DEEDS NOW SUBMITTED A REPORT (DISC USSED AT PARA 4(G) ABOVE) THAT ALL THE PURCHASE & SALE TRANSACTIO N OF IMMOVABLE PROPERTIES FOR WHICH INFORMATION WAS RECEIVED THROU GH AIR ARE FOUND TO BE DULY RECORDED IN THE BOOKS OF ACCOUNTS. IT I S THEREFORE, NOW, THERE IS NO JUSTIFICATION FOR ADDITION OF RS. 99672 60 FOR UNEXPLAINED INVESTMENT AND ADDITION OF RS. 2,52,37,140 AS UNEXP LAINED INCOME ON SALE OF PROPERTIES. THE A.O.IS THEREFORE DIRECTED T O DELETE THE ITA NO.1744/AHD/2015 [ITO VS. M/S. CHINTU REALITIES PVT. LTD.] A.Y. 2010-11 - 5 - ADDITION SO MADE OF RS. 9967260 AND RS. 25237140. T HE APPELLANT GETS RELIEF ACCORDINGLY. ALL THE GROUNDS ARE TREATE D AS ALLOWED. 6. AGGRIEVED BY THE REVERSAL OF ADDITIONS MADE BY T HE AO, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER O F THE AO AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO EXPLAIN T HE ENTRIES FOUND IN THE AIR BEFORE THE AO AND NO PROPER ENQUIRY IN RESP ECT OF SUCH TRANSACTIONS HAS BEEN CARRIED OUT BY THE AO OR BY T HE CIT(A). IT IS NOT KNOWN FROM THE ORDER OF THE CIT(A) AS TO WHAT Q UERIES WERE RAISED IN THE REMAND REPORT AND WHAT DIRECTIONS WER E GIVEN FOR COMPLIANCE TO AO. IT WAS FURTHER SUBMITTED THAT IT IS ALSO NOT KNOWN AS TO WHEN AND HOW SUCH TRANSACTIONS OF SUBSTANTIAL AMOUNT HAVE BEEN RECORDED AND SUBJECTED TO SCHEME OF TAXATION E ITHER IN FINANCIAL YEAR IN QUESTION OR ANY OTHER FINANCIAL YEARS. THE LD. DR SUBMITTED THAT THE CIT(A) HAS PASSED THE ORDER IN HASTE WITHO UT DIRECTING THE AO TO MAKE REQUISITE ENQUIRY WARRANTED IN THIS REGA RD. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE FIND SUBSTANCE OF THE PLEA OF THE REVENUE. THE CIT(A) H AS NOT SPELT OUT AS TO HOW HE WAS SATISFIED WITH EXPLANATIONS OFFERE D BY THE ASSESSEE, IF ANY, WITH REFERENCE TO THE TRANSACTIONS OF PURCH ASE AND SALE OF PROPERTY AS REFLECTED IN AIR AND SOURCE THEREOF. T HE ORDER OF THE CIT(A) IS THUS TO BE REGARDED AS CRYPTIC IN THE SEN SE THAT IT IS SILENT ITA NO.1744/AHD/2015 [ITO VS. M/S. CHINTU REALITIES PVT. LTD.] A.Y. 2010-11 - 6 - ON ISSUE OF SOURCE OR NATURE OF TRANSACTIONS PERTIN ENT FOR ADJUDICATION OF THE ISSUE. WE, THUS, SET-ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF T HE CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER GRA NTING REASONABLE OPPORTUNITY TO AO FOR APPRECIATION OF EVIDENCE IN S UPPORT OF AIR TRANSACTIONS IN QUESTION. NEEDLESS TO SAY THE CIT( A) SHALL GRANT REASONABLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN A ND SUPPORT THE TRANSACTION WITH DOCUMENTARY EVIDENCES. IT SHALL B E OPEN TO THE CIT(A) TO MAKE SUCH ENQUIRY OR CAUSE TO MAKE SUCH E NQUIRY AS MAY BE CONSIDERED APPROPRIATE TO ASCERTAIN THE NATURE A ND SOURCE OF THE TRANSACTIONS IN QUESTION. 9. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSE. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 11/07/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT ON 1 1/07/2019