Assistant Commissioner of Income-tax, V. Shri Deepak Hanmantrao Pawar,

ITA 1934/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7470 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARSHVARDHINI BUTY
• Assessee Lawyers: S N DOSHI
• Keywords: Capital asset; Income from undisclosed sources; Opportunity of being heard
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1934/PUN/2014 $& ' !(' / ASSESSMENT YEAR : 2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA ....... / APPELLANT )& /VS. SHRI DEEPAK HANMANTRAO PAWAR, 184, VYANKATPURA PETH, SATARA 415002 PAN : AAYPP8419J / RESPONDENT / ITA NO. 1935/PUN/2014 $& ' !(' / ASSESSMENT YEAR : 2007-08 ASSISTANT COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA ....... / APPELLANT )& /VS. SHRI KULDEEP DEEPAK PAWAR, 184, VYANKATPURA PETH, SATARA 415002 PAN : ALPPP9906N / RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SMT. HARSHVARDHINI BUTY / DATE OF HEARING : 04-01-2017 / DATE OF PRONOUNCEMENT : 06-01-2017 2 ITA NOS. 1934 & 1935/PUN/2014 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS ARE FILED BY THE REVENUE. ITA NO. 1934/PN/2014 BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 27-0 8-2014 FOR THE ASSESSMENT YEAR 2007-08. IN ITA NO. 1935/PN/2014 THE REVENUE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS)-III, PUNE DATED 25-08-2014 FOR THE ASSESSMENT YEAR 2007-0 8 IN THE CASE OF ANOTHER ASSESSEE. SINCE, THESE APPEALS IN RESPECT OF TW O DIFFERENT ASSESSEES ARE ARISING FROM SAME SET OF FACTS, THEREFORE, TH ESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. SHRI S.N. DOSHI APPEARING ON BEHALF OF THE ASSESSEES SU BMITTED AT THE OUTSET THAT THE ASSESSEES IN ITA NOS. 1734 & 1 734/PN/2014 HAD FILED APPEALS AGAINST THE ORDERS OF COMMISSIONER OF INCOME T AX (APPEALS) IN THEIR RESPECTIVE CASES, WHICH ARE NOW SUBJECT OF APPEAL IN THE APPEALS FILED BY DEPARTMENT. THE TRIBUNAL VIDE SINGLE OR DER DATED 30-09-2016 HAD DECIDED THE APPEALS FILED BY THE ASSESSEE S. THE TRIBUNAL REMITTED THE ISSUES BACK TO THE FILE OF ASSESSING OFFICER FOR PROPER ADJUDICATION. THE LD. AR POINTED THAT WHEN THE A PPEALS FILED BY THE ASSESSEES WERE TAKEN UP FOR HEARING BY THE TRIBUNA L, THE ASSESSEES WERE NOT AWARE OF THE PRESENT APPEALS FILED BY THE DEPARTMENT. 3. SMT. HARSHVARDHINI BUTY REPRESENTING THE DEPARTMENT SUBMITTED THAT THE APPEALS FILED BY THE DEPARTMENT AND THE ASSESS EES ARE ARISING OUT OF SAME ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN THEIR RESPECTIVE CASES. AT THE TIME OF HEARING OF THE APPEALS FILED BY THE ASSESSEES, DUE TO OVERSIGHT THE APPEALS FILED BY THE DEPA RTMENT AGAINST 3 ITA NOS. 1934 & 1935/PUN/2014 THE SAME ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) COU LD NOT BE MENTIONED. SINCE, THE TRIBUNAL HAS ALREADY REMITTED THE ISS UES RAISED IN THE APPEALS FILED BY THE ASSESSEES, THESE APPEALS SHOULD ALSO BE SENT BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE SAME TERMS. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES. THE ASSESSEES IN ITA NOS. 1734 & 1735/PN/20 14 HAVE ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN THEIR RESPECTIVE CASES BEFORE THE TRIBUNAL. NOW, THE DEPARTME NT IS IN APPEAL AGAINST THE SAME VERY ORDER OF COMMISSIONER OF INCOME TA X (APPEALS) IN THE CASE OF BOTH THE ASSESSEES. THE TRIBUNAL VIDE CO MMON ORDER DATED 30-09-2016 HAS DISPOSED OF THE APPEALS OF ASSESS EE BY REMITTING THE ISSUES BACK TO THE FILE OF ASSESSING OFFICER. THE RELEVAN T EXTRACT OF THE ORDER OF TRIBUNAL IN ITA NO. 1734/PN/2014 IS AS UNDER : 47. THE ASSESSEE HAS ALSO DEMONSTRATED THAT THE PR OVISIONS OF SECTION 40A(3) IS NOT CALLED FOR IN CASE OF GATIMAN EARTH M OVERS SINCE NO AMOUNT EXCEEDING RS.20,000/- HAS BEEN PAID TO THAT PARTY. SIMILARLY CERTAIN AMOUNTS HAVE BEEN RECEIVED BY CROSSED CHEQUES WITH THEIR CONFIRMATIONS. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY THE ASSESSEE CAN PROPERLY RECONCILE THE CONTRACT RECEIPTS AND THE SUNDRY CREDITORS. CON SIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPI NION THAT THE MATTER REQUIRES A RE-VISIT TO THE FILE OF THE AO FOR PROPE R ADJUDICATION OF THE ISSUE. WE, THEREFORE, RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTA NTIATE HIS CASE. THE AO SHALL ALSO PROVIDE COPIES OF THE VARIOUS STATEME NTS RECORDED AND LEDGER EXTRACTS OBTAINED OF DIFFERENT PARTIES FOR R ECONCILIATION OF THE CONTRACT RECEIPTS AS WELL AS THE SUNDRY CREDITORS. THE AO SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVIN G DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACC ORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DECIDED IN T HE TERMS INDICATED ABOVE. 5. IN ITA NO. 1735/PN/2014 THE TRIBUNAL REMITTED THE IS SUES BACK TO ASSESSING OFFICER OBSERVING AS UNDER : 49. AFTER HEARING BOTH THE SIDES, WE FIND THE ADDI TIONAL GROUNDS OF APPEAL NO. 1 AND 2 AND THE OTHER GROUNDS 1, 2, 3 & 4 BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS IN ITA NO. 1734/PN/201 4. WE HAVE ALREADY DECIDED THE ISSUE AND RESTORED THE MATTER TO THE FI LE OF THE AO WITH CERTAIN DIRECTIONS. WE HAVE ALSO DISMISSED SOME OF THE ADDITIONAL 4 ITA NOS. 1934 & 1935/PUN/2014 GROUNDS RAISED BY THE ASSESSEE. FOLLOWING THE SAME REASONING, THE ABOVE GROUNDS ARE DECIDED ACCORDINGLY. WHILE DECIDING GROUND NO. 5 IN APPEAL, THE TRIBUNAL HELD : 55. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO IN THE ASSES SMENT ORDER HAS MADE ADDITION OF RS.11,13,750/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNACCOUNTED INCOME FROM LAND BUSINESS. H E ARRIVED AT THIS FIGURE BY REDUCING THE COST OF LAND FROM THE SALE P ROCEEDS. WE FIND THE ASSESSEE BEFORE THE LD.CIT(A) IN HIS RECASTED FINAN CIAL STATEMENTS HAD SHOWN THE PROFIT ON SALE OF LAND AT RS.96,78,970/- AFTER MAKING AN ADJUSTMENT OF COMPENSATION EXPENSES AMOUNTING TO RS .23,81,325/-. SINCE THE ASSESSEE HAS EARNED A PROFIT OF RS.96,78, 970/- FROM SUCH LAND DEALINGS THE LD.CIT(A) ENHANCED THE INCOME TO RS.96 ,78,970/- AS AGAINST RS.11,13,750/- DETERMINED BY THE AO. 56. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE LANDS IN QUESTION ARE AGRICULTURAL LANDS SITUATED B EYOND 8 KMS FROM THE MUNICIPAL LIMITS AND THEREFORE THESE ARE RURAL AGRIC ULTURAL LANDS AND DO NOT FORM PART OF THE CAPITAL ASSET WITHIN THE MEANI NG OF SECTION 2(14)(III)(B) OF THE I.T. ACT. 57. HOWEVER, THIS ASPECT WAS NOT PROPERLY LOOKED IN TO BY THE AO OR THE CIT(A) AS THE NECESSARY EVIDENCES WHICH THE ASSESSE E HAS ENCLOSED WITH THE PAPER BOOK SUCH AS 7/12 EXTRACTS ETC WERE NOT P ROPERLY LOOKED INTO. FURTHER, THE MAIN ISSUES HAVE ALREADY BEEN RESTORED TO THE FILE OF THE AO FOR ADJUDICATION OF THE ISSUES AFRESH. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE DEEM IT PROPER TO RESTORE THIS GROU ND TO THE FILE OF THE AO WITH A DIRECTION TO ADJUDICATE THE SAME IN THE LIGH T OF OUR ABOVE OBSERVATIONS AND AS PER FACT AND LAW. GROUND OF APP EAL NO.5 BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PUR POSES. 6. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF COM MISSIONER OF SALES TAX VS. VIJAI INT. UDYOG REPORTED AS 152 ITR 11 1 HAS HELD THAT THE TRIBUNAL HAS TO HEAR CROSS APPEALS BY THE PARTIES I.E . THE ASSESSEE AND THE DEPARTMENT, TOGETHER. HOWEVER, IN THE PRESENT CASE DUE TO OVERSIGHT THE APPE ALS FILED BY THE ASSESSEES HAVE ALREADY BEEN HEARD AND DISPOSED OF BY THE TRIBUNAL, WHEREAS THE APPEALS FILED BY THE DEPARTMENT AGAINST THE SAME ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ARE NOW LISTED FOR HEA RING. WHEN THE APPEALS BY ASSESSEE WERE HEARD, IT WAS NOT BR OUGHT TO THE NOTICE OF BENCH BY EITHER SIDES OR THE OFFICE REGISTRY THA T CROSS APPEALS ARE FILED BY DEPARTMENT. SINCE, THE TRIBUNAL HAS RESTORED THE ISSUES 5 ITA NOS. 1934 & 1935/PUN/2014 BACK TO THE FILE OF ASSESSING OFFICER, WE ARE OF THE CONSIDERE D OPINION THAT IN ALL FAIRNESS THE PRESENT SET OF APPEALS SHOULD GO B ACK TO THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUES RAISED IN THE APPEALS FILED BY THE DEPARTMENT ALONG WITH TH E ISSUES ALREADY REMITTED BACK BY THE TRIBUNAL IN THE APPEALS BY T HE ASSESSEES. THE ASSESSING OFFICER SHALL DECIDE THESE ISSUES AFRESH AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WIT H LAW. ACCORDINGLY, BOTH THE APPEALS FILED BY THE REVENUE ARE ALLO WED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 06 TH DAY OF JANUARY, 2017. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 06 TH JANUARY, 2017 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-III, PUNE 4. ' / THE CIT-III, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE