Shri Gulrez Khan, Ujjain V. THE DCIT, Ratlam

ITA 210/IND/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0511 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Keywords: Unexplained investment; Opportunity of being heard; Application of stay; Valuation report; Retraction
• Section: 40A(3); 143(3); 133A; 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.210/IND/2017 ASSESSMENT YEAR: 2013-14 SHRI GULREZ, KHAN, C/O PAVAN WED ADVOCATE 203, MOURYA HERITAGE 56 SHOPS ROAD, 10/5 NEW PALASIA INDORE / VS. DCIT- RATLAM ( APPELLANT ) ( RE VENUE ) PAN: ALBPK9072A APPELLANT BY SHRI PAVAN VED , ADV. RE VENUE BY SHRI RAJIB JAIN, SR. DR DATE OF HEARING: 06.12.2019 DATE OF PRONOUNCEMENT: 10.12.2019 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL AT THE INSTANCE OF ASSESSEE PERTAINING TO A.Y. 2013-14 IS DIRECTED AGAINST THE ORDER OF COMMISSION ER OF INCOME TAX(APPEALS), UJJAIN, (IN SHORT CIT), DATED 04.01 .2017 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME T AX ACT SHRI GULREZ KHAN ITANO.210/IND/2017 2 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 28. 13.2016 BY DCIT- RATLAM. 2. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS O F HOTEL AND TRAVEL AGENCY. A SURVEY U/S 133A OF THE I.T. ACT 19 61 WAS CARRIED OUT ON THE BUSINESS PREMISES OF THE ASSESSEE ON 25. 09.2012. DURING THE COURSE OF SURVEY ADDITIONAL INCOME OF RS .3,50,62,772/- WAS OFFERED TO TAX ON ACCOUNT OF EXCESS CASH OF RS. 8,80,060/- UNDISCLOSED INVESTMENT OF RS.1,31,00,000/- IN CONST RUCTION OF HOTEL HILTON TOWER, UNDISCLOSED INVESTMENT OF RS.69,29,81 2/- FOR IMRAN MARRIAGE HALL, ON ACCOUNT OF COMMISSION OF RS.43,52 ,900/- AND ON ACCOUNT OF PROPERTY OF RS.98,00,000/- WITH SHRI CHE CHANI. HOWEVER OUT OF ABOVE DECLARATION, THE ASSESSEE HAS DECLARED ONLY RS.94,50,000/- IN HIS RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO JUSTIF Y AS TO WHY THE INCOME OF RS.94,50,000/- OFFERED TO TAX AS AGAINST RS.3,50,62,772/- DECLARED DURING THE COURSE OF SURVEY. ASSESSEE GAVE DETAILED SUBMISSIONS WHICH DID NOT FIND ANY FAVOUR BY THE LD . AO. THE LD. AO AFTER GIVING RECORDING OBSERVATION MADE ADDITION FOR INCOME FROM OTHER SOURCE AT RS.2,56,12,772/-, DISALLOWANCE U/S 40A(3) OF THE ACT AT RS.88,550/- AND ADDITION IN RESPECT OF U NDECLARED RECEIPT AT RS.2,87,492/- THEREBY, ASSESSING INCOME AT RS.3, 56,14,914/- AS AGAINST THE INCOME DECLARED AT RS.96,26,100/- IN TH E INCOME TAX RETURN FILED ON 28.03.2015 WHICH WAS SELECTED FOR S CRUTINY ASSESSMENT BY SERVICING OF NOTICES U/S 143(2) & 14 2(1) OF THE ACT. SHRI GULREZ KHAN ITANO.210/IND/2017 3 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) BUT FAILED TO SUCCEED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L RAISING FOLLOWING GROUNDS: (1) LD. CITCA) ERRED IN CONFIRMING ADDITION OF RS. 25,12,930/- AS UNDISCLOSED INVESTMENT IN MARRIAGE HALL IN ADDITION TO AMOUNT OF RS. 44,16,882/ - ALREADY DECLARED BY THE APPELLANT BY REJECTING THE RETRACTION MADE BY THE A PPELLANT AND IGNORING THE FACTS ON RECORD. (2) LD. CITCA) ERRED IN CONFIRMING ADDITION OF RS. 98,00,000/- AS UNDISCLOSED INCOME BEING RECEIPT AS PER AGREEMEN T TO SELL FOUND IN COURSE OF SURVEY REJECTING RETRACTION OF D ISCLOSURE MADE AT THE TIME OF SURVEY AND IGNORING THE FACTS O N RECORD. (3) LD. C!T(A) ERRED IN CONFIRMING ADDITION OF RS. 1,31,00,000/- FOR UNEXPLAINED INVESTMENT IN THE HOTEL BUILDING ON THE BASIS OF VALUATION REPORT AND AFTER REJECTING RETRACTION IGN ORING BLATANTLY THE CLEAR FACTS ON RECORD. (4) ID. CIT(A) ERRED IN CONFIRMING ADDITION AS PER PREVIOUS GROUND OF APPEAL TAKING MARKET VALUE OF LAND AT RS. 79,00,000/- DESPITE THE FACT THAT LAND WAS ALREADY ACQUIRED IN EARLIER YEAR AND SHOWN AS SUCH IN THAT YEAR:; RETURN OF INCOME. HE SIMPLY WENT BY DISCLOSURE MADE AT THE TI ME OF SURVEY AND IGNORED VITAL FACTS ON RECORD. (5). ID. CIT(A) ERRED IN NOT GIVING SET OFF OF RS. 43,52,900/- BEING INCOME EARNED WHILE WORKING OUT UNEXPLAINED I NVESTMENT AND CONFIRMED THE ADDITION ON THE BASIS OF DISCLOSU RE MADE AT THE TIME OF SURVEY IGNORING THE FACTS ON RECORD AND IGNORING THE BASIC PRINCIPLE THAT EITHER INCOME CAN BE ADDED OR INVESTMENT BUT NOT BOTH. HE THUS CONFIRMED DOUBLE ADDITION OF THE SAME INCOME. (6) LD. CITCA) ERRED IN CONFIRMING ADDITION OF RS. 88,550/- U/S:, 40A(3). (7) LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 287492/- AS UNDECLARED RECEIPT. SHRI GULREZ KHAN ITANO.210/IND/2017 4 8. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND, OR ALTER ANY OF THE GROUNDS OF APPEAL AS ABOVE. 9. PRAYER OF INTERIM RELIEF: THE ADDITIONS MADE BY THE LD. AO AND CONFIRMED BY THE LD. CIT(A) ARE BASELESS, PERVE RSE AND UNSUSTAINABLE. THERE ARE GLARING ERRORS IN THE ORDE RS PASSED BY BOTH THE LOWER AUTHORITIES. THERE ARE DOUBLE ADDITI ON OF THE SAME INCOME. THE DEMAND RAISED IS VERY HIGH AND BEY OND THE MEANS OF THE APPELLANT TO PAY THE SAME. HENCE IT IS PRAYED THAT THE APPEAL BE LISTED FOR HEARING EARLY AND IN THE M EANTIME, STAY OF DEMAND BE GRANTED. IT IS ALSO REQUESTED THAT HEA RING FOR STAY BE FIXED EARLY. 5. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE REFE RRING TO THE VARIOUS GROUNDS SUBMITTED THAT CERTAIN MATERIAL FAC TS COULD NOT BE BROUGHT TO THE NOTICE OF THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS. HE REQUESTED FOR SETTING ASI DE ALL THE ISSUES RAISED IN THIS APPEAL TO LD. CIT(A) FOR AFRESH ADJU DICATION. ONE SUCH INSTANCE WAS MENTIONED WITH REGARD TO THE ADDITION FOR UNEXPLAINED INVESTMENT IN THE HOTEL BUILDING AT RS.1,31,00,000/ -. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE AUTHORI TIES HAVE ONLY GIVEN CREDIT TO THE LOAN TAKEN FROM HDFC BANK FOR T HE CONSTRUCTION AND THE REMAINING AMOUNT AS WAS SHOWN IN THE VALUAT ION REPORT WAS ADDED TO INCOME . NO CREDIT WAS GIVEN FOR THE V ALUE OF LAND AND CONSTRUCTION COST DULY DECLARED AND DISCLOSED IN TH E REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE, FOR WHICH N O ADDITION OUGHT TO HAVE BEEN MADE. SIMILARLY, FOR OTHER GROUN DS ALSO IT WAS PLEADED THAT VARIOUS MATERIAL FACTS IF HAD BEEN PLA CED BEFORE THE LD. CIT(A), THE SAME SHOULD HAVE AFFECTED ULTIMATE FIND ING OF LD. CIT(A). SHRI GULREZ KHAN ITANO.210/IND/2017 5 6. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF THE LOWER AUTHORITI ES BUT WAS FAIR ENOUGH IN NOT OBJECTING TO THIS REQUEST OF SETTING ASIDE THE ISSUES IN THE FINDING OF LD. CIT(A). 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE ASSESSEE HAS RAISED VARIOUS GROUNDS RUNNING FROM 1 TO 9 CHALLENGING VARIOUS ADDITIONS CONFIRMED BY THE LD. CIT(A) WHICH WERE MADE BY THE LD. AO. IN THE SURVEY ACTION U/S 133A OF THE ACT CONDUCTED AT THE BUSINESS PREMISES OF THE A SSESSEE ON 25.09.2012, ADDITIONAL INCOME OF RS.3,50,62,772/- W AS OFFERED FOR TAX BY THE ASSESSEE BUT IN THE RETURN OF INCOME FIL ED SUBSEQUENTLY, ONLY INCOME OF RS.94,50,000/- WAS DECLARED. SO THER E WAS A SHORT FALL IN DECLARATION OF RS.2,56,12,772/-. THIS AMOUN T WAS ADDED BY THE LD. AO ALONG WITH OTHER MINOR DISALLOWANCE OF R S.3,76,042/-. ASSESSEE FAILED TO GET ANY RELIEF BY LD. CIT(A). 8. BEFORE US LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT VARIOUS MATERIAL FACTS WHICH WERE GOING TO THE ROOT CAUSE T O THE ADDITION MADE IN THE HANDS OF ASSESSEE COULD NOT BE PLACED B EFORE THE LD. CIT(A) DUE TO UNAVOIDABLE CIRCUMSTANCES. IT HAS BEE N JUDICIALLY WELL ESTABLISHED THAT THE ADDITIONS IN THE COURSE OF SUR VEY CANNOT BE MADE, MERELY ON THE BASIS OF STATEMENTS SINCE THEY HAVE NO EVIDENTIARY VALUE AS THEY ARE NOT GIVEN UNDER OATH. THE REVENUE AUTHORITIES HAD TO CONNECT THE ADDITIONS WITH MATER IAL FACTS INCLUDING INCRIMINATING MATERIAL FOUND DURING THE C OURSE OF SURVEY. SHRI GULREZ KHAN ITANO.210/IND/2017 6 IN THE CASE OF ASSESSEE VARIOUS MATERIAL FACTS WERE NOT BEFORE THE LD. CIT(A) INCLUDING THE FACT THAT VARIOUS INVESTME NT WHICH WERE DULY APPEARING THE BOOKS OF ACCOUNTS ARE ALSO ALLE GED TO HAVE BEEN ADDED TO THE INCOME DECLARED BY THE ASSESSEE. 9. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTAN CES OF THE CASE AND SUBMISSIONS MADE BY LD. COUNSEL FOR THE ASSESSE E AND IN THE INTEREST OF JUSTICE AND BEING FAIR TO BOTH THE PART IES, RESTORE ALL THE ISSUES RAISED IN THIS APPEAL TO LD. CIT(A) FOR AFRE SH ADJUDICATION AND ALSO DIRECT THE ASSESSEE TO PLACE ALL MATERIAL FACT S IN SUPPORT OF THE CONTENTION THAT EXCESSIVE ADDITION HAS BEEN MADE BY THE LD. AO. THE LD. CIT(A) AFTER APPRECIATING THE SAME MAY DECI DE AS PER THE PROVISIONS OF LAW. NEEDLESS TO MENTION THAT PROPER OPPORTUNITY OF BEING HEARD TO BE PROVIDED TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10.12.20 19. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 10/12/2019 CTX? P.S/. . . SHRI GULREZ KHAN ITANO.210/IND/2017 7 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR