The ITO, Ward-5(1), Baroda V. Shri Bhavanbhai R.Bharwad, Baroda

ITA 1810/AHD/2009

• Counselvise Citation: 181020514 RSA 2009
• Duration Of Justice: 3 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: ANIL R SHAH
• Keywords: Unexplained investment; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1810/AHD/2009 ASSESSMENT YEAR :2006-2007 & C.O. NO.131/AHD/2009 ASSESSMENT YEAR :2006-2007 INCOME TAX OFFICER, WARD 5(1), BARODA RACE COURSE CIRCLE, BARODA BHAVANBHAI RUKHABHAI BHARWAD BHARWAD VAS, MOTI BAPOD GAM, WAGHODIA ROAD, BARODA V/S . V/S. BHAVANBHAI RUKHABHAI BHARWAD BHARWAD VAS, MOTI BAPOD GAM, WAGHODIA ROAD, BARODA INCOME TAX OFFICER, WARD 5(1), BARODA RACE COURSE CIRCLE, BARODA PAN NO. A CGPD2964E (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI Y. P. VERMA, SR.D.R. /BY ASSESSEE SHRI ANIL R. SHAH, A.R. /DATE OF HEARING 1 8 . 1 0.2012 /DATE OF PRONOUNCEMENT 07.12.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE AND C.O. OF THE ASSESSEE WHICH HAS EMANATED FROM THE ORDER OF CIT(A )-V, BARODA, ORDER DATED 04.03.2009 FOR ASSESSMENT YEAR 2006-2007. TH E SOLE GROUND OF APPEAL OF THE REVENUE IS AGAINST GRANTIJNG RELIEF OF RS.31 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROPERTY AND C. O. IS ALSO AGAINST THE ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 2 & C.O. NO.131/AHD/2009 APPEAL FILED BY THE REVENUE. AS THE MATTER IS HEAR D TOGETHER AND ISSUE AS WELL AS YEAR OF DISPUTE IS SAME. THEREFORE WE PASS COMMON ORDER FOR BOTH. 2. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSES SEE IS DERIVING INCOME FROM PARTNERSHIP FIRM, INCOME FROM HOUSE PROPERTY A ND PROFIT FROM KRISHNA DEVELOPERS. THE A.O. HAD GIVEN REASONABLE OPPORTUN ITY OF BEING HEARD VIDE LETTER DATED 11.01.2008 WHICH WAS REPLIED BY THE AS SESSEE VIDE LETTER DATED 21.02.2008. THE ASSESSEES SUBMISSION DATED 21.02. 2008 CONSIDERED BY THE A.O. AND SUMMON U/S. 131 WAS ISSUED TO SELLERS BUT THEY DID NOT RESPOND TO SUMMONS. AGAIN SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE VIDE LETTER DATED 13.10.2008 AS NO PAYMENT HAD BEEN MADE DURING THE YEAR AND FOUR PARTNERS OF M/S. SAMANVAY DEVELOPERS (SELLERS) HAD NOT CONFIRMED THE TRANSACTION. THE A.O. SUMMARIZED THE WHOLE ISSUE A S UNDER: 1. PERUSAL OF THE SUBMISSIONS REVEAL THAT THE ASSES SEE FURNISHED CONTRADICTORY SUBMISSION ON THE SIMILAR ISSUE AGAIN ST HIS OWN SUBMISSIONS FILED EARLIER. IT APPEARS THAT THE ASS ESSEE TRIED TO EXPLAIN THE SOURCE AFTER THOUGHT STORY WHICH CANNOT BE CONSIDERED AT THIS JUNCTURE. 2. SECONDLY, THE WITNESSES OF THE ASSESSEE NEVER AT TENDED TO THE UNDERSIGNED IN SPITE OF GIVING OPPORTUNITIES TO THEM AND FURTHER OPPORTUNITY WAS GRANTED ON THE SPECIFIC REQ UEST MADE BY THE ASSESSEE. 3. THIRDLY, THE ASSESSEE HIMSELF SUBMITTED HIS BANK ACCOUNTS AND OTHER BANK ACCOUNT OF HIS SON SHRI LALABHAI BHA RWAD. IN RESPONSE TO LAST SHOW CAUSE NOTICE, THE ASSESSEE TO OK ANOTHER VIEW OF SOURCE OF INVESTMENT FROM DIFFERENT BANKS AS SUBMITTED/FURNISHED THE COPIES OF BANK STATEMENTS F OR THE ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 3 & C.O. NO.131/AHD/2009 PURPOSE OF HIS CLAIM. THEREFORE, THE STAND OF THE ASSESSEE CANNOT BE ACCEPTED. 4. THE ASSESSEE DID NOT SUBMIT THE COMPLETE BANK ST ATEMENTS DURING THE ASSESSMENT YEAR IN SPITE OF SUFFICIENT O PPORTUNITY TO THIS EFFECT. THE UNDERSIGNED HIMSELF COLLECTED THE BANK STATEMENTS FOR THE PURPOSE OF VERIFICATION AND GENU INENESS OF THE TRANSACTIONS MADE FROM THE GIVEN BANK ACCOUNTS. 5. AFTER THE ANALYSIS OF BANK STATEMENTS AS GIVEN B Y THE ASSESSEE HIMSELF AND OBTAINED FROM THE BANKS, THE UNDERSIGNED MADE AN ATTEMPT TO RECONCILE THE ISSUE OF INVESTMENT AND FOUND THAT THE ASSESSEE FAILED TO EX PLAIN THE SOURCE OF RS.31,00,000/- FROM THE CREDIT ENTRIES RE FLECTED IN HIS BANK STATEMENTS. 6. THE ASSESSEE HIMSELF NARRATED AND SUBMITTED THAT THE AMOUNT INCURRED BY HIM FROM THE SALE OF PROPERTY TO SHRI K AMAL R AGRAWAL. SUBSEQUENTLY, THE ASSESSEE AGAIN RETRACTE D HIS STATEMENTS THAT THE AMOUNT WAS PAID FROM DIFFERENT BANK ACCOUNTS AFTER OBTAINING THE MONEY FROM DIFFERENT P ERSONS. THIS CLAIM CANNOT BE ACCEPTED AT ALL AS THE ASSESSE E SUBMITTED/REFLECTED ONLY TWO BANK STATEMENTS FROM T HE BEGINNING TO TILL DATE. REGARDING OTHER BANK ACCOU NTS, THE ASSESSEES PLEA CANNOT BE ACCEPTED AS THE SAME WERE NOT REFLECTED IN HIS BOOKS OF ACCOUNTS AND HE DID NOT F URNISH THE DETAILS/RETURN OF INCOME/CONFIRMATION LETTER IN THE CASE OF SHRI LALABHAI BHARWAD. 7. THE ASSESSEE FAILED TO FURNISH HIS RETURN OF INC OME FOR A.Y. 2007-08, A.Y. 2008-09 IN HIS CASE AS WELL AS SHRI L ALABHAI BHARWAD. IN ABSENCE OF RETURNS OF INCOME, THE CLAI M IN RESPECT OF POST PAYMENT TO SAMANVAY BUILDERS AND AM OUNT RECEIVED FROM DIFFERENT PERSONS CANNOT BE ENTERTAIN ED AS THE ASSESSEE FAILED TO ESTABLISH CORROBORATIVE EVIDENCE S I.E. COPY ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 4 & C.O. NO.131/AHD/2009 OF RETURN OF INCOME AS WELL AS BALANCE SHEET IN HIS CASE AS WELL AS LALABHAI BHARWAD. 8. THE ASSESSEE TRIED TO MISGUIDE THE UNDERSIGNED F ROM THE BEGINNING THAT THE PAYMENTS WERE MADE ONLY TOW BANK ACCOUNTS. HOWEVER, PERUSAL AND EXAMINATION OF SUCH BANKS STATEMENTS, IT WAS FOUND THAT THE ASSESSEE FAILED T O EXPLAIN THE PAYMENT AND ITS SOURCE TO THE BUILDERS I.E. SAM ANVAY BUILDERS FROM THE BANK STATEMENTS GIVEN IN HIS CASE . FROM THESE FACTS, IT IS CLEAR THAT THE ASSESSEE FAI LED TO ESTABLISH THE SOURCE OF INVESTMENT IN IMMOVABLE PRO PERTY TO THE EXTENT OF RS.31,00,000/- AS NO CONFIRMATION LETTER/ RETURN OF INCOME, STATEMENT OF ACCOUNT OF SHRI LALABHAI BHARWAD WAS F URNISHED TILL DATE AND SECONDLY THE ASSESSEE DID NOT MAKE PAYMENT OF RS.11,00,000/- FROM HIS ACCOUNT OF ALLAHABAD BANK A S MENTIONED IN THE SUBMISSION FILED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. THUS, HE MADE ADDITION OF RS. 31 LACS AS UNEXPLAINE D INVESTMENT IN IMMOVABLE PROPERTY. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD DELETED THE ADDITION. THE CIT(A) HELD AS UNDER: 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE, ARGUM ENTS PUT FORTH BY THE AR OF THE APPELLANT AS ALSO THE OBSERV ATION OF THE AO. IT IS TRUE THAT THE AO HAS CONSIDERED PART INV ESTMENT OF RS.9,00,000/- AS EXPLAINED SINCE SOURCE OF THE SAME FUND WAS ESTABLISHED IN AS MUCH AS THE SAME WAS RECEIVED FRO M THE PERSON TO WHOM LAND WAS SOLD BY AN APPELLANT WHERE AS ANOTHER AMOUNT OF RS.11,00,000/- AS RECEIVED FROM THE SAME PERSON HAS NOT BEEN CONSIDERED AS EXPLAINED. IT MAY BE NOTED HERE THAT THE APPELLANT HAS EVEN SUBMITTED SOURCE OF SOURCE OF IN VESTMENT OF ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 5 & C.O. NO.131/AHD/2009 RS.31,00,000/- DURING THE ASSESSMENT PROCEEDINGS AL ONG-WITH CONVINCING AND CORROBORATIVE EVIDENCES. NON CONSID ERATION OF EXPLANATION OR EVIDENCES IN SUPPORT OF APPELLANTS CLAIM MERELY ON SUSPICIOUS GROUND DOES NOT FORM ANY BASE FOR THE AO TO TREAT THE INVESTMENT AS NOT EXPLAINED OR NOT ACCEPTABLE. HERE IT MAY BE NOTED THAT THE AO HAS MADE THE ADDITION MERELY O N SUSPICIOUS OPINION. AFTER CONSIDERING THE TOTALITY OF THE FAC TS OF THE CASE, I AM OF THE OPINION THAT THE AO WAS NOT RIGHT IN MAKI NG THE ADDITION. IN VIEW OF THIS, THE AO IS DIRECTED TO D ELETE THE ADDITION MADE ON THIS COUNT. 4. NOW THE REVENUE AS WELL AS THE ASSESSEE ARE BEFO RE US. LD. SR. D.R. CONTENDED THAT THE SALE CONSIDERATION MENTIONED IN THE SALE DEED WAS RS.40 LACS, BUT SOURCE OF INVESTMENT HAD NOT EXPLAINED BY THE ASSESSEE WITH EVIDENCE. NO BODY WILL EXECUTE THE DEED WITHOUT RE CEIVING THE VALUE OF LAND. NO BODY WILL WAIT FOR PAYMENT IN FUTURE AND EXECUTE THE SALE DEED WITHOUT ANY CONSIDERATION. THE ASSESSEE HAD SHOWN DETAILS OF P AYMENT OF CONSIDERATION OF RS.20 LACS VIE CHEQUE NO. 109303 TO 109309 OF NA GRIK SAHKARI BANK LTD. AND RS.20 LACS VIDE CHEQUE NO. 067639 TO 067645 OF ALLAHABAD BANK AND CERTIFIED BEFORE SUB REGISTER THAT ABOVE AMOUNT HAD RECEIVED BY THE SELLER VIDE SALE DEED 17.10.2005. THE ASSESSEE COULD NOT PROVE THE SOURCE OF PAYMENT BEFORE THE AO. THUS, HE MADE ADDITION OF RS.31 LAC S. AT THE OUTSET, THE LD. A.R. FOR THE ASSESSEE ARGUED THAT ALL THE EVIDENCE OF PAYMENT WERE SUBMITTED BEFORE THE A.O. EVEN THEN HE MADE ADDITION. THE CI T(A) HAD ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE AFTER CONSIDERING THE EVIDENCES SUBMITTED BEFORE THE A.O. HE ALSO FILED TWO PAPER BOOK WHICH CONTAINED COPY OF SUBMISSION MADE BEFORE THE CIT(A) AND ALL COPIES OF EVIDENCES FILED BEFORE ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 6 & C.O. NO.131/AHD/2009 A.O., COPY OF SALE DEED DATED 17.10.2005, COPY OF S TATEMENT OF INCOME OF THE ASSESSEE FOR A.Y. 07-08 & 08-09. IN SECOND PAPER B OOK THE ASSESSEE ENCLOSED COPY OF P&L ACCOUNT FOR A.Y. 06-07, TRADIN G ACCOUNT, LAND ACCOUNT, CURRENT LIABILITIES, SUMMARY OF AMOUNT RECEIVED RS. 40 LACS AND COPY OF STATEMENT OF INCOME OF ASSESSEE FOR A.Y.09-10, 08-0 9 & 07-08 AND CLAIMED THAT ALL THE PAYMENTS WERE EXPLAINED. HE REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). HE ALSO RELIED IN CASE OF DCIT VS. SURYADEEP SALT REFINERY & CHEMICAL WORKS LTD. IN ITA NO. 1783/AHD/2009 FOR A.Y. 05-06. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAD SHOWN LIABILITIES IN BALANCE SHEET OF A.Y. 06-07 AT RS.40 LACS AGAINST TRADING STOCK OF RS.1.54 CRORE WHICH INCLUDES STOCK OF THIS LAND. A GAINST THE 40 LACS LIABILITIES, THE ASSESSEE HAD PAID AMOUNT IN F.Y. 07-08 AND 08-0 9 WITH DETAILS OF MONEY RECEIVED BY THE ASSESSEE. THE LD. A.R. EXPLAINED T HAT THE ASSESSEE HAD PAID AS UNDER: SR. NO. AMOUNT CHEQUE/CASH DATE NAME OF BANK 1 2,00,000/- 12/04/2007 ALLAHABAD BANK 2 9,00,000/- 10/10/2007 ,, 3 3,00,000/- 27/01/2008 ,, 4 3,00,000/- 13/04/2008 ,, 5 3,00,000/- 30/08/2008 ,, TOTAL 20,00,000/- SR. NO. AMOUNT CHEQUE/CASH DATE NAME OF BANK 1 8,00,000/- 05/01/2008 SANKHEDA NAGRIK SAHKARI BAN K 2 6,00,000/- 27/01/2008 ,, 3 6,00,000/- 24/03/2008 ,, TOTAL 20,00,000/- THE AO HAD NOT BROUGHT ON RECORD ANY EVIDENCE AS TO THE ASSESSEE HAD PAID OTHERWISE DURING THE YEAR UNDER CONSIDERATION. THU S, WE DO NOT FIND ANY ITA NO. 1810/AHD/2009 A.Y. 06-07 PAGE 7 & C.O. NO.131/AHD/2009 REASON TO INTERVENE IN THE ORDER OF CIT(A). ACCORD INGLY, THE SAME IS CONFIRMED. 6. IN THE COMBINED RESULT, THE REVENUES APPEAL IS DISMISSED & ASSESSESS C.O. IS ALLOWED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 07.12.2012 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEM BER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * < STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION H.W. PAPER OF MEMBER ON 03.12.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 04.12.2012 4) DATE OF CORRECTION XXX 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 07.12.2012 7) ORDER UPLOADED ON 10.12.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE NO 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 10.12.2012