Rajan Goel, Raigad V. ACIT, Panvel

ITA 1773/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1993 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 24-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Unexplained cash credit; Capital asset; Business income
• Section: 54B; 2(14); 133A; 131; 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1773/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2008-09 RAJAN N. GOEL, SHATRUNJAY BLDG., ZENITH ROAD, BAZARPETH, KHOPOLI, DISTT.-RAIGAD, PAN : ADQPG8939D ....... / APPELLANT ' / V/S. ACIT, PANVEL CIRCLE, PANVEL / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 09-02-2016 / DATE OF PRONOUNCEMENT : 11-04-2016 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-I, THANE DATED 26-12 -2012 FOR THE ASSESSMENT YEAR 2008-09. 2 ITA NO. 1773/PN/2013, A.Y. 2008-09 2. THE APPEAL HAS BEEN FILED WITH THE DELAY OF 137 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT DATED 04-12-2014 GIVING REAS ONS FOR DELAY IN FILING OF THE APPEAL. THE DELAY IN FILING OF THE APPEAL H AS BEEN ATTRIBUTED TO THE ILLNESS OF THE BROTHER OF THE ASSESSEE SHRI PUNIT GOEL WHO WAS PURPORTEDLY HANDLING THE ACCOUNTS AND TAX MAT TER OF THE ASSESSEE. SHRI PUNIL GOEL SUFFERED A MASSIVE PARALYTIC ATT ACK AND WAS HOSPITALIZED FOR ALMOST 4 MONTHS. THE ASSESSEE HAS ALSO FIL ED MEDICAL RECORDS AND HOSPITAL DISCHARGE SUMMARY OF SHRI PUNIL GOE L IN SUPPORT OF HIS CONTENTIONS. AFTER PERUSING THE SAME WE ARE SATISFIE D WITH THE DELAY IN FILING OF THE APPEAL HAS BEEN CAUSED ON ACCOUNT OF MEDICAL EXIGENCIES. THE DELAY OF 137 DAYS IN FILING OF THE APPEAL IS CONDONED AND THE APPEAL OF THE ASSESSEE IS ADMITTED TO BE HEAR D AND DISPOSED OF ON MERITS. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORT, WAREHO USING AND LAND DEALINGS. THE ASSESSEE IS HAVING PARTNERSHIP FIRMS IN THE N AME OF M/S. GOEL ROADLINES AND M/S. AKASH WAREHOUSE CORPORATION. A SURVEY U/S. 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 09-03- 2011. DURING THE COURSE OF SURVEY CERTAIN DOCUMENTS R ELATING TO PURCHASE AND SALE OF LAND IN THE FINANCIAL YEARS 2005-06 A ND 2007-08 WERE IMPOUNDED. ON SCRUTINY OF THE SALE DEEDS IT TRANSPIR ED THAT THE ASSESSEE HAS EARNED PROFIT OF ` 1,15,00,000/- IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE ADMITTED T HAT THE SAID PROFIT WAS EARNED ON THE TRANSACTIONS WITH M/S. MTC BUSINESS PVT. L TD. FROM SALE OF LAND AND WAS NOT OFFERED TO TAX IN THE ASSESS MENT YEAR 3 ITA NO. 1773/PN/2013, A.Y. 2008-09 2008-09. THE ASSESSEE SUBMITTED THAT THE TRANSACTIONS WERE SHOWN IN THE BALANCE SHEET. INSTEAD OF OFFERING THE INCOME FROM SALE OF LAND FOR TAXATION, THE ASSESSEE COMPUTED THE PROFIT OF THE TRANSA CTIONS AND CREDITED THE SAME TO CAPITAL ACCOUNT. THE ASSESSEE HAD SOLD TWO PLOTS ADMEASURING 2 ACRE AND 23 GUNTHAS COMPRISING IN S. NO. 10 2, HISSA NO. 4A1 AT VILLAGE SAVROLI FOR ` 1,05,00,000/- AND 15 GUNTHAS COMPRISING IN S. NO. 102, HISSA NO. 8, AT VILLAGE SAVROLI FOR ` 15,00,000/-. THE ASSESSING OFFICER AFTER EXAMINATION OF THE R ECORDS CAME TO THE CONCLUSION THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF LAND AND ACCORDINGLY, TREATED THE IN COME OF ` 1,18,00,000/- FROM SALE OF LAND AS BUSINESS INCOME IN THE IMPU GNED ASSESSMENT YEAR. APART FROM THE ABOVE THE ASSESSING O FFICER MADE ADDITION OF ` 21,75,499/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 14-12-2011, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE FINDINGS OF FIRST APPELLATE AUTHORITY. 4. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT DURING THE PERIOD RELEVANT THE ASSESSMENT YEAR U NDER APPEAL THE ASSESSEE HAD SOLD TWO PARCEL OF AGRICULTURAL LAND. SINCE, TH E AGRICULTURAL LAND DOES NOT FALL WITHIN THE MEANING OF CAPITAL A SSET THE ASSESSEE WAS NOT LIABLE FOR ANY CAPITAL GAINS ON THE SALE OF AFORESAID LAND. THE AUTHORITIES BELOW HAVE ERRED IN COMING TO THE C ONCLUSION THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF 4 ITA NO. 1773/PN/2013, A.Y. 2008-09 LAND. THE ASSESSEE DURING THE COURSE OF SURVEY HAD NEV ER ADMITTED THAT HE WAS CARRYING LAND TRADING ACTIVITY. MOREOVER, TH E ASSESSEE HAS UTILIZED OWN FUNDS FOR THE PURCHASE OF AGRICULTURAL LAND. THE LD. COUNSEL FOR THE ASSESSEE MAD AN ALTERNATE SUBMISSION THA T EVEN IF IT IS PRESUMED THAT THE LAND SOLD BY THE ASSESSEE DURING THE FINANCIAL YEAR 2007-08 WAS CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(1 4) OF THE ACT, THE ASSESSEE HAS INVESTED THE SALE PROCEEDS FROM T HE SAID LAND FOR THE PURCHASE OF AGRICULTURAL LAND FOR HIS OWN PURPOSE. TH EREFORE, THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U/S. 54B OF THE ACT. THE LD. COUNSEL FURTHER CONTENDED THAT THE ASSESSING OFFIC ER HAS ERRED IN MAKING ADDITION OF ` 21,75,499/- U/S. 68 AS UNEXPLAINED CASH CREDIT. THE ASSESSEE HAD GIVEN THE DETAILS OF VARIOUS PERSONS ALON G WITH THE ADDRESS. HOWEVER, THE ASSESSING OFFICER FAILED TO MAKE ANY ENQUIRIES FROM THEM. THE ALLEGED UNEXPLAINED CASH CREDITS W AS IN FACT OUTSTANDING AMOUNTS PAYABLE TO THE CREDITORS AND WERE NOT IN THE NATURE OF LOANS AND DEPOSITS. THE ASSESSEE HAD EXPLAINED THE NATURE OF CREDIT, BUT THE AUTHORITIES BELOW HAVE FAILED TO CONSIDER TH E SAME. THE LD. COUNSEL REITERATED HIS WRITTEN SUBMISSIONS MADE BEFORE T HE COMMISSIONER OF INCOME TAX (APPEALS) PLACED AT PAGES 149 TO 158 OF THE PAPER BOOK TO SUPPORT HIS ORAL SUBMISSION. 5. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF THE AUT HORITIES BELOW. THE LD. DR SUBMITTED THAT THE ASSESSEE IN HIS STA TEMENT RECORDED ON 10-03-2011 U/S. 131 OF THE ACT AFTER SURVE Y HAS ADMITTED THAT THE ASSESSEE HAD ENTERED INTO SALE TRANSACTIONS W ITH MTC BUSINESS PVT. LTD. AND HAS NOT OFFERED THE INCOME ARISING T HERE FROM IN 5 ITA NO. 1773/PN/2013, A.Y. 2008-09 THE ASSESSMENT YEAR 2008-09. THE LD. DR ALSO ADMITTED T HAT THE TRANSACTIONS ARE SHOWN IN BALANCE SHEET FOR THE PERIOD R ELATING TO FINANCIAL YEAR 2007-08. THE LD. DR REFERRED TO THE STATEME NT OF ASSESSEE RECORDED U/S. 33A ON 09-03-2011 AT PAGE 121 OF THE PAPER BOOK. THE LD. DR PARTICULARLY REFERRED TO Q. NOS. 11 AND 13 WHERE THE ASSESSEE HAS ADMITTED TO THE SALE TRANSACTIONS OF LAND IN THE PERIOD RELEVANT TO THE ASSESSMENT YEARS 2010-11 AND 2011-12 . THE LD. DR SUBMITTED THAT A PERUSAL OF THE STATEMENTS AND CORROBO RATIVE DOCUMENTS ON RECORD CLEARLY SHOWS THAT THE ASSESSEE WAS REGULARLY ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF LAND. THE LD. DR VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE EXAMINED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DOCUMENTS PLACED ON RECORD IN TH E FORM OF PAPER BOOK REFERRED DURING THE COURSE OF MAKING SUBMISSI ONS. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE IS NOT ENGAGED IN THE LAND TRADING ACTIVITY. THE ASSESSEE HAD SOLD AGRICULTURAL LA ND DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPE AL. SINCE, THE AGRICULTURAL LAND DOES NOT FALL WITHIN THE DEFINITION OF CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) OF THE ACT, THEREFORE, THE ASSESSEE DID NOT DISCLOSE THE SAME IN THE RETURN OF INCOME. EVEN O THERWISE THE ASSESSEE HAS INVESTED THE SALE PROCEEDS OF THE LAND IN P URCHASING ANOTHER PIECE OF AGRICULTURAL LAND, THEREFORE, THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 54B OF THE ACT. THE LD. AR HAS REITER ATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (AP PEALS). 6 ITA NO. 1773/PN/2013, A.Y. 2008-09 THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS DETAILED ORDE R HAS REPRODUCED THE SAME IN PARA 4 OF HIS ORDER. FOR THE SA KE OF BREVITY WE ARE NOT REPRODUCING THE SAME IN OUR ORDER. THE COMMISS IONER OF INCOME TAX (APPEALS) AFTER EXAMINING THE DOCUMENTS ON REC ORD AND THE SUBMISSIONS OF THE ASSESSEE HAS UPHELD THE FINDINGS OF ASS ESSING OFFICER WITH RESPECT TO THE ACTIVE INDULGENCE OF ASSESSEE IN SALE AND PURCHASE OF LAND. THE LD. DR HAS DRAWN OUR ATTENTION TO THE STATEMENT OF THE ASSESSEE RECORDED U/S. 131 OF THE ACT. IN REPLY TO Q. NO. 4 THE ASSESSEE HAS ADMITTED THAT THE SALE DEEDS RELATE TO SA LE TRANSACTIONS OF THE LAND WITH M/S. MTC BUSINESS PVT. LTD. AND WAS NOT OFFERED TO TAX IN THE ASSESSMENT YEAR 2008-09. THE RELEVANT EXTRACT OF THE STATEMENT RECORDED ON 10-03-2011 I.E. Q. NO. 4 AND ANSWER IS REPR ODUCED HERE-IN- UNDER: QUESTION 4: PLEASE GO THROUGH THE BUNDLE NO. 2 P AGES NO. 92 TO 26. PLEASE EXPLAIN THESE PAPERS. ANSWER: THESE ARE THE PURCHASE AND SALE DEEDS WHICH ARE RELATED TO F.Y. 2005-06 AND 2007-08. THE PROFITS ON THE SAME TRANSACTIONS WITH THE MTC BUSINESS PVT. LTD. HAD NOT OFFERED BY ME FO R THE A.Y. 2008-09, BUT THE TRANSACTION IS SHOWN IN THE BALANCE SHEET O F THE F.Y. 2007-08. 7. A FURTHER PERUSAL OF THE STATEMENTS RECORDED ON 10 -03-2011 AND ON 09-03-2011 (Q. NOS. 11, 13, AND 15) AND THE MATERIAL SEIZED IT IS EVIDENT THAT THE ASSESSEE WAS ENGAGED IN THE REGULAR B USINESS OF SALE AND PURCHASE OF LAND AND LAND DEVELOPMENT. THUS, THE CON TENTIONS OF THE LD. COUNSEL ARE THAT THE ASSESSEE WAS NOT ENGAGED IN REGULAR SALE AND PURCHASE OF LAND IS NOT SUSTAINABLE. IT WOULD BE FURT HER RELEVANT TO MENTION HERE THAT AT NO POINT OF TIME THE ASSESSEE HAD RETRACTED FROM HIS ORIGINAL STATEMENT. THE ASSESSING OFFICER IN HIS ORDER HA S GIVEN 7 ITA NO. 1773/PN/2013, A.Y. 2008-09 SPECIFIC FINDING WITH RESPECT TO TWO PARCELS OF LAND WHICH ARE SUBJECT MATTER OF THE PRESENT APPEAL. THE ASSESSEE HAD MERELY CREATED H IS RIGHT IN ABOVE SAID LAND BY ENTERING INTO AN AGREEMENT FOR PURC HASE WITH M/S. SALDOL INDUSTRIES AND OBTAINED POWER OF ATTORNEY DAT ED 06-06-2005 IN HIS NAME. IN THE BALANCE SHEET AS ON 31- 03-2007 THE ABOVE MENTIONED LAND IS SHOWN AS M/S. SALDOL INDUSTRIES (AD VANCE PAID). AT THE TIME OF SALE ON 15-02-2008 THE ASSESSEE TR ANSFERRED THE LAND TO THE PURCHASER TO M/S. MTC BUSINESS PVT. LTD. ON THE BASIS OF THE POWER OF ATTORNEY. THUS, THE INTENTION OF THE ASSES SEE WAS NEVER TO RETAIN THE LAND AND USE IT FOR AGRICULTURAL PURPOSES. THE LD. COUNSEL HAS NOT BEEN ABLE TO REBUT THE AFORESAID FINDINGS OF THE A UTHORITIES BELOW. SINCE, THERE IS NO SALE OF ANY CAPITAL ASSET, THERE IS NO QUESTION OF ALLOWING DEDUCTION U/S. 54B OF THE ACT TO THE ASSESSEE. 8. IN RESPECT OF ADDITION OF ` 21,75,499/- U/S. 68 OF THE ACT, THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE AMOUNT. NEITH ER THE ASSESSEE WAS ABLE TO PROVE THE IDENTITY OF THE CREDITORS /LENDERS NOR THEIR CREDITWORTHINESS. THE ONUS WAS ON THE ASSESSEE T O PROVE THE GENUINENESS, IDENTITY AND THE CREDITWORTHINESS OF THE TRAN SACTIONS AND THE CREDITORS. EXCEPT FOR FURNISHING THE NAME AND ADDRES S OF THE PERSONS NO FURTHER DETAILS WERE GIVEN BY ASSESSEE. THUS , THE ASSESSEE WAS NOT ABLE TO DISCHARGE HIS ONUS. 9. THE LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO CONTROVERT THE WELL REASONED AND DETAILED FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS) IN REJECTING THE CLAIM OF THE ASSESSEE. EVEN BEFORE US, THE LD. COUNSEL HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CLAIM FROM THE 8 ITA NO. 1773/PN/2013, A.Y. 2008-09 DOCUMENTS ON RECORD. WE DO NOT FIND ANY INFIRMITY IN THE IM PUGNED ORDER. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSE D AND THE IMPUGNED ORDER IS UPHELD. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 11 TH DAY OF APRIL, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 11 TH APRIL, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, THANE 4. ' / THE CIT-II, THANE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE