Mr. Arun Monga, Gurgaon V. ITO, Gurgaon

ITA 2063/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7039 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 09-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: YOG.R.THAREJA
• Keywords: Set aside; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 208

Judgement Text

I.T.A .NO.-2063/DEL/2016 ARUN MONGA VS ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-2063/DEL/2016 (ASSESSMENT YEAR-2006-07) ARUN MONGA, PLOT NO.I-853, PALAM VIHAR, GURGAON. PAN-AGYPM3817B ( APPELLANT) VS ITO, WARD-2(1), GURGAON. (RESPONDENT) ASSESSEE BY SH. YOG.R.THAREJA, FCA REVENUE BY SH. F.R.MEENA, SR.DR DATE OF HEARING 08 . 11 .2016 DATE OF PRONOUNCEMENT 04 . 01 .201 7 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 02.02.2016 OF CIT(A)-1, GURGAON PERTAIN ING TO 200607 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- THE SUBJECT APPEAL IS AGAINST THE ORDER OF COMMISS IONER OF INCOME TAX APPEALS (1) 3 RD FLOOR HSIDC BHAWAN UDYOG VIHAR PHASE-5 GURGAON. 1. THE COMMISSIONER APPEAL HAS ERRED IN NOT ALLOWIN G THE COST OF THE CONSTRUCTION FOR THE PROPERTY NO 19/1B SHAKTI NAGAR DELHI 11007 WHILE CALCULATING THE LONG TERMS CAPITAL GAINS EARNED BY THE ASSESSEE FROM THE SALE PROCEEDS OF THE ABOVE SAID PROPERTY. 2. THE COMMISSIONER APPEAL AGAIN HAS NOT ALLOWED TH E COST OF THE CONSTRUCTION SPENT BY THE ASSESSEE ON THE PLOT NO 1 -853 BOUGHT BY HIM TO BE CONSTRUCTED AND COMPETED WITHIN A PERIOD OF 36 M ONTHS FROM THE DATE OF THE SALE OF THE PROPERTY NO 19/1B SHAKTI NAGAR D ELHI 110007 OUT OF THE FUNDS RECEIVED BY HIM FROM THE SALE OF THE PROPERTY NO 19/1B SHAKTI NAGAR WHILE CALCULATING THE LONG TERMS CAPITAL GAINS EARN ED. 3. THE ASSESSEE HOLDS THE RIGHTS TO ADD OR DELETE A NY GROUNDS DURING THE COURSE OF HEARING. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS FOUND TO HAVE SOLD PROPERTY NO.19/1-B, SHAKTI NAGAR, DELHI ON 08.11.2005 FOR A CONSIDERATION OF RS.25 LAKHS. ACCORDINGLY, NOTICE UNDER SECTION 148 OF THE I.T.AC T, 1961 WAS ISSUED TO THE ASSESSEE AND A NIL RETURN WAS FILED CLAIMING THAT THE MONEY HAD BEEN INVESTED IN A FRESH PROPERTY AT I- 853, AT GURGAON. THE FRESH INVESTMENT WAS EXPLAINE D AS UNDER:- COST OF LAND RS.15,50,000/- COST OF STAMP DUTY RS.62,000/- AMOUNT PAID FOR CONSTRUCTION RS.9,00,000/- TOTAL RS.26,12,000/- PAGE 2 OF 4 I.T.A .NO.-2063/DEL/2016 ARUN MONGA VS ITO 2.1. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE ALLEG ED PAYMENT OF RS. 9 LAKHS EXPLAINED TO BE FOR CONSTRUCTION. THE ASSESSEE STATED THAT L UMP SUM PAYMENT HAD BEEN MADE TO M/S KHEMKA BUILDERS, C-1, BLOCK MARKET, PALAM VIHA R, NEAR RAILWAY CROSSING, GURGAON HOLDING TIN 06491926057. THIS WAS A LUMP SUM PAYMEN T AS SUCH NO SUCH BREAK UP OF EXPENSE IS AVAILABLE WITH US. IN SUPPORT OF THE SAID CLAIM, CERTAIN BILLS WERE PRODUCED BY THE ASSESSEE ALLEGEDLY RAISED BY M/S KHEMKA BUILDE RS I.E.BILL NO.474 DATED 02.09.2006; 994 DATED 21.09.2006; 719 DATED 12.09.2006; 714 DAT ED 12.09.2006; 901 DATED 19.09.2006; 208 DATED 27.09.2006; 185 DATED 27.09.2 006; 038 DATED 23.09.2006; AND 891 DATED 28.10.2006. CONSIDERING THE FACT THAT THE ASS ESSEE FAILED TO FILE COPY OF CONTRACT AGREEMENT WITH THE SAID BUILDER AND COPIES OF BILLS AND VOUCHERS IN RESPECT OF MATERIAL PURCHASED FOR CONSTRUCTION OR COPY OF SITE PLAN, DA TE OF COMMENCEMENT OF CONSTRUCTION AND COMPLETION CERTIFICATE ETC. THE ASSESSEES EXPLANATION WAS CONSIDERED TO BE NOT ACCEPTABLE ON ACCOUNT OF THESE ABOVE REASONS ALONGWITH THE FAC T THAT VIDE REPLY SUBMITTED ON 06.03.2014 IT WAS NOTED THAT THE ASSESSEE HAD ADMIT TED THAT M/S KHEMKA BUILDER HAD CLOSED HIS SHOP AND WAS NOT TRACEABLE AT THE MOMENT . 3. THE ISSUE TRAVELLED IN APPEAL BEFORE THE CIT(A) AND THE ADDITION WAS SUSTAINED FOR WANT OF EVIDENCE. 4. MR.YOG.R.THAREJA, FCA APPEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE SITE PLAN AND COMPLETION CERTIFICATE HAD BEEN HANDED OVE R TO THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE SAID FACT HAD NOT BEEN RECORDED BY THE AO AND THIS ARGUMENT HAD BEEN MADE BEFORE THE CIT(A) ALSO WHO HAD REQUIRED THE ASSESSEE TO AGAIN FILE THE COPY OF THE SITE PLAN AND THE COMPLE TION CERTIFICATE ETC. HOWEVER ON THE NEXT DATE WHICH WAS FIXED FOR HEARING THE ASSESSEE DUE T O REASONS BEYOND HIS CONTROL COULD NOT BE REPRESENTED BY THE COUNSEL AND IN THE CIRCUMSTAN CES THE CIT(A) WITHOUT AFFORDING ONE MORE OPPORTUNITY CONFIRMED THE ADDITION. PAGE 3 OF 4 I.T.A .NO.-2063/DEL/2016 ARUN MONGA VS ITO 4.1. ACCORDINGLY, IT WAS HIS LIMITED PRAYER THAT THE MATTER MAY BE REMANDED TO THE CIT(A) PERMITTING THE ASSESSEE TO FILE THE COMPLETION CERT IFICATE AND THE SITE PLAN IN SUPPORT OF THE CLAIM THAT A CONSTRUCTION DID TAKE PLACE ON THE SAI D PROPERTY. IT WAS HIS SUBMISSION THAT IT IS NOT THE CASE OF THE REVENUE THAT M/S KHEMKA BUILDER WAS IN ANY WAY CONNECTED WITH THE ASSESSEE. THE SAID CONCERN IT WAS SUBMITTED ADMITT EDLY WAS AN UNCONNECTED INDEPENDENT CONCERN ENGAGED AT THE RELEVANT POINT OF TIME IN CO NSTRUCTION AND BUILDING BUSINESS. FOR WHATEVER REASONS, IT WAS SUBMITTED THE CONCERN SUBS EQUENTLY SHUT SHOP BUT THIS FACT IT WAS SUBMITTED CANNOT BE HELD AGAINST THE ASSESSEE. IT WAS SUBMITTED THAT THERE WAS NO REASON FOR THE ASSESSEE TO CONTINUOUSLY REMAIN IN TOUCH WI TH THE SAID CONCERN AND THE ASSESSEE CANNOT BE EXPECTED TO FURNISH HIS FORWARDING ADDRES S. IT WAS ALSO HIS SUBMISSION THAT THE ASSESSEE DOES NOT HAVE THE PARAPHERNALIA TO PROVID E THE CURRENT CORRECT ADDRESS OF THE SAID CONCERN. HOWEVER, IT WAS HIS SUBMISSION THAT THE FACT REMAINS THAT 9 LAKH WAS HANDED OVER TO THE SAID BUILDER AS A LUMP SUM PAYMENT AND THE DETAILS OF PURCHASE OF MATERIAL ETC. I.E. THE BREAKUP OF EXPENSES WOULD BE KNOWN TO M/S KHEMKA BUILDERS. THE NATURE AND EXTENT OF CONSTRUCTION WHICH TOOK PLACE, IT WAS SUB MITTED CAN BE SEEN FROM THE SITE PLAN AND COMPLETION CERTIFICATE WHICH IS A NECESSARY EVI DENCE. 5. CONSIDERING THE SUBMISSIONS AND THE RECORD, THE LD. SR. DR STATED THAT HE HAD NO OBJECTION, IF THE MATTER IS REMANDED. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. I FIND THAT IN THE ABSENCE OF ANY CONNECTION WITH M/S KHEMKA BUILDERS EXCEPT A ONE TIME PROFESSIONAL ASSIGNMENT THE ASSESSEE CANNOT BE CALL ED UPON TO MAINTAIN TABS AD INFINITUM FOR ALL TIMES TO COME OF A BUILDER WHO HAS CARRIED OUT SOME CONSTRUCTION. THE FACT THAT THE SAID BUILDER HAD A VALID EXISTENCE IS EVIDENT FROM THE FACT ON RECORD THAT M/S KHEMKA BUILDER HAD A SPECIFIC TIN NO.06491926057 ALLOTTED TO HIM. THUS, IF HIS PRESENCE WAS DEEMED TO BE SO NECESSARY TO REBUT THE ASSESSEES C LAIM THAN THE WHEREWITHAL TO TRACE AND PRODUCE HIM IS WITH THE DEPARTMENT AND NOT WITH THE ASSESSEE. THE ASSESSEE CANNOT BE PAGE 4 OF 4 I.T.A .NO.-2063/DEL/2016 ARUN MONGA VS ITO EXPECTED TO MAINTAIN TABS ON ALL PEOPLE AND CONCERN S WITH WHOM HE TRANSACTS DURING HIS LIFETIME. NO DOUBT THE ONUS IS ON THE ASSESSEE TO SUPPORT ITS CLAIM BUT THE ONUS IS LIMITED TO WHAT AN ASSESSEE IS CAPABLE OF DOING. EVEN OTHERWIS E, IT IS SEEN THAT THE NECESSARY EVIDENCE LIKE SITE PLAN AND COMPLETION CERTIFICATIO N ITSELF HAS NOT BEEN CONSIDERED WHICH WAS STATED TO HAVE BEEN FILED BEFORE THE AO AND FOR RE-FILING THE SAME ALLEGEDLY ONE OPPORTUNITY WAS GIVEN BY THE CIT(A). THE OPPORTUNI TY AS PER STATEMENT MADE IN THE COURT COULD NOT BE AVAILED OF BY THE ASSESSEE ON ACCOUNT OF REASONS BEYOND ITS CONTROL. ACCORDINGLY, ACCEPTING THE COMMON PRAYER THE IMPUGN ED ORDER IS SET ASIDE AND THE ISSUE IS REMANDED TO THE FILE OF THE CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD. PERMISSION TO FILE ANY OTHER FRESH EVIDENCE IN SUPPORT OF THE CLA IM IF SO REQUIRED SHALL BE PROVIDED BY THE CIT(A) AS PER RULES. IT MAY NOT BE OUT OF PLACE TO STATE THAT IT IS IN THE BEST INTERESTS OF THE ASSESSEE TO PARTICIPATE FULLY AND FAIRLY IN THE PRO CEEDINGS BEFORE THE LD. CIT(A) AND IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IN GOOD FAIT H IS NOT ABUSED BY THE ASSESSEE, AS FAILING WHICH THE LD. COMMISSIONER IT IS MADE CLEAR WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ON THE BASIS OF MATERI AL AVAILABLE ON RECORD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04 TH OF JANUARY 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI