Shri. Venkatachalapathy Gupta, Bangalore V. Income Tax Officer, Bangalore

ITA 2296/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5539 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 23-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH - SMC B BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER I.T.A. NO. 2296 /BANG/201 6 (ASSESSMENT YEAR : 20 12 - 13 ) SHRI K. VENKATACHALAPATHY GUPTA, NO.61, 1 ST FLOOR, 1 ST MAIN, THYAGARAJANAGAR, BANGALORE - 56 0 028 PAN ACQPG 1295H VS. INCOME TAX OFFICER, WARD 5(2)(3), BANGALORE. APPELLANT RESPONDENT. APPELLANT BY : SHRI H GURUSWAMY, ITP RESPONDENT BY : SHRI AR.V.SREENIVASAN, JCIT (D.R) DATE OF H EARING : 01.03.2017. DATE OF P RONOUNCEMENT : 05 .04. 201 7 . O R D E R PER SHRI VIJAY P AL RAO, J. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D T.19.09.2016 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 2 ITA NO. 2296/ BANG/ 2016 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED UNSECURED LOAN OF RS.1,06,16,765 AND ALSO SHOWN RENTAL ADVANCE RECEIVED TO THE EXTENT OF RS.94,95,401. IN RESPONSE TO THE QUERY FROM THE ASSESSING OFFICER THE ASSESSEE FURNISHED COPIES OF THE RENTAL 3 ITA NO. 2296/ BANG/ 2016 AGREEMENT AND IN SOME OF THE CASES, COPY OF THE BANK S TATEMENT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS NOT FURNISHED ANY PROOF IN THE FOLLOWING CASES : I) MAHAVEER CHAND HUF RS.12,50,000. II) YASHVEER CHOPRA RS.5,00,000. 4. THE ASSESSEE WAS ASKED TO FURNISH THE COPY OF RENTAL AGREEMENT HOWEVER THE ASSESSEE DID NOT FURNISH THE SAME. THUS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED THAT THE ABOVE ADVANCES WERE RECEIVED IN THE F.Y. 2011 - 12 WHEREAS NO PROPERTY WAS LET OUT TO THEM UNTIL 2014. ACCORDINGLY, THE ASSESSING OFFICER HELD THAT THE ASSESSEEIS NOT IN A POSITION TO PROVE THESE AS CURRENT LIABILITIES AND BROUGHT THE SAID AMOUNT OF RS.17,50,000 TO TAX AS UNEXPLAINED INVESTMENT. THE ASSESSEE CHALLENGED THIS ACTION OF THE ASSESSING OFFICER BEFORE THE CIT (APPEALS) BUT COUL D NOT SUCCEED. 5. BEFORE THE TRIBUNAL, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS LET OUT ABOUT 55 PREMISES. T HE ASSESSEE PRODUCED ALL AGREEMENTS EXCEPT IN THE CASE OF TWO PARTIES AS THE RENT AGREEMENT S WERE NOT FINALIZED AND EXECUTED IN THOSE CASES HOWEVER THE ASSESSEE RECEIVED THE RENT A DVANCE FROM THESE TWO PARTIES. T HE LEARNED AUTHORISED REPRESENTATIVE HAS THEN SUBMITTED THAT THE ASSESSEE RECEIVED THESE 4 ITA NO. 2296/ BANG/ 2016 AMOUNTS THROUGH BANKI NG CHANNEL AND THROUGH CH EQUES AND IN THE CASE OF MR. MAHAVEER CHAND, HUF, A CHEQUE OF RS.3 LAKHS WAS EVEN DISHONORED. THE LEARNED AUTHORISED REPRESENTATIVE HAS REFERRED TO THE BANK MEMO OF RETURNING THE CHEQUE AND SUBMITTED THAT DUE TO THIS DISHONOR OF THE CHEQUE, THE ASSESSEE COLD NOT LET OUT THE PROPERTY TO THE SAID PARTY AND FINALLY RETURNED THE AMOUNT OF ADVANCE RENT TO MR. MAHA VEER CHAND, HUF. HE HAS REFERR ED TO THE BANK STATEMENT OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE REFUNDED RS.14 LAKHS ON 25.9.2014. THUS THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT AGAINST THE ADVANCE RENT OF RS.12,50,000 THE ASSESSEE REFUNDED RS.14 LAKHS WHICH INCLUDES INTEREST AND COMPENSATION. AS REGARDS THE RENTAL ADVANCE OF RS.5 LAKHS RECEIVED FROM MR. YASHVEER CHOPRA, THE L EARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE AMOUNT WAS RECEIVED THROUGH CHEQUE AS REFLECTED IN THE BANK STATEMENT OF THE ASSESSEE. HE HAS ALSO REFERRED TO THE LEGAL NOTICE ISSUED BY THE ASSESSEE TO THE SAID PARTY FOR TAKING THE PREMISES AND RE COVERY OF OUTSTANDING RENT. F INALLY THE ASSESSEE REFUNDED THE SAID AMOUNT IN TWO INSTALMENTS OF RS.2,80,000 ON 6.3.2014 AND RS.3 LAKHS ON 22.2.2014 TOTAL AMOUNTING TO RS.5,80,000 WHICH INCLUDES INTEREST AND COMPENSATION. THE LEARNED AUTHORISED REPRESEN TATIVE HAS SUBMITTED THAT WHEN THE ASSESSEE HAS RETURNED THE RENTAL ADVANCE IN THE SUBSEQUENT YEAR AND 5 ITA NO. 2296/ BANG/ 2016 THE AUTHORITIES BELOW HAS NOT CONSIDERED THE SAME THEN T HE MATTER MAY BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 6. ON THE OT HER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY OPPOSED TO THE CLAIM OF THE ASSESSEE AND SUBMITTED THAT THE NATURE OF THE TRANSACTION IS RELEVANT AS WHETHER THE ASSESSEE HAS ACTUALLY RECEIVED THESE AMOUNTS AS RENTAL ADVANCE OR NOT. HE HAS FURTHER CONTENDED THAT EVEN AT THE TIME OF REFUND THE ASSESSEE HAS NOT RECEIVED ANY RECEIPT TO EXPLAIN THE PURPOSE AND THE NATURE OF TRANSACTION. HE HAS ALSO REFERRED TO THE BANK ACCOUNT OF THE ASSESSEE AND SUBMITTED THAT PRIOR TO THE ISSUE OF CHEQUE THE RE IS A CASH DEPOSIT AND FURTHER THE PAYMENT TO ONE OF THE PARTY CLAIMED BY THE ASSESSEE IS NOTHING BUT THROUGH A BEARER CHEQUE AND THEREFORE IT CANNOT BE ASCERTAINED FROM THE BANK STATEMENT WHO HAS RECEIVED THIS AMOUNT. HE HAS RELIED UPON THE ORDERS OF T HE AUTHORITIES BELOW. 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, IT IS NOTED THAT DESPITE THE REPEATED OPPORTUNITY GIVEN BY THE ASSESSING OFFICER AS WELL AS CIT (APPEALS), THE ASSESSEE NEITHER PRODUCED ANY DO CUMENTARY EVIDENCE IN THE SHAPE OF RENT AGREEMENT OR OTHERWISE NOR PRODUCED THE CONFIRMATION FROM THE PARTIES TO SUBSTANTIATE ITS CLAIM OF ADVANCE RENT. FURTHER THE ASSESSEE HAS NOW CLAIMED AS REFUND OF THE AMOUNT WITH 6 ITA NO. 2296/ BANG/ 2016 INTEREST AND COMPENSATION WHICH IS ALSO NOT A PRACTICE IN THE CASE OF ADVANCE RENTAL AS IT DOES NOT CARRY ANY INTEREST AND ONLY THE PRINCIPLE AMOUNT IS REFUNDED AT THE TIME OF EXPIRY OR TERMINATION OF TENANCY. THEREFORE THE ENTIRE EXPLANATION OF THE ASSESSEE IS CONTRARY TO THE PREVAILING P RACTICE OF ADVANCE RENT RECEIVED IN THE CASE OF LE TTING OUT OF PROPERTY. FURTHER THIS ADVANCE CLAIMED BY THE ASSESSEE IS NOT REFLECT ED BEING T HE MULTIPLE OF THE MONTHLY RENT . A S IN THE CASE OF MR. YASHVEER CHOPRA T HE ASSESSEE HAS CLAIMED A MONTHLY RENT OF RS.6,600 WHEREAS THE ADVANCE CLAIMED TO HAVE BEEN RECEIVED OF RS.5 LAKHS WHICH IS ALSO NOT AN ACCEPTABLE CLAIM OF ADVANCE AS PER THE PRACTICE IN THE BANGALORE CITY IS 10 MONTHS RENT. ALL THESE FACTS SHOW THAT THE ASSESSEE HAS FAILED TO ESTABLISH THIS CLA IM OF ADVANCE RENTAL IN RESPECT OF THESE AMOUNTS AMOUNTING TO RS.17,50,000 FROM THESE TWO PARTIES. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW. 8. IN THE RESUL T, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH DAY OF APRIL, 201 7 . SD/ - (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DT. 05 .04 .2017. *REDDY GP