The ITO, Ward- 8(1), Surat V. Shri Anilbhai Shamjibhai Patel, Surat

ITA 2308/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6017 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-05-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 16-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained investment; Cost of acquisition
• Section: 147; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 2448/AHD/2012 (ASSESSMENT YEAR:2006-07) THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-8, SURAT, ROOM NO. 410, AAYAKAR BHAVAN, MAJURA GATE, SURAT APPELLANT VS. SHRI JAYANTIBHAI DAHYABHAI PATEL B/H. MOTI BAHUCHARJI MANDIR, VED ROAD, SURAT- 395004 RESPONDENT PAN: CTZPS1506B & ITA NOS. 2308, 2449 & 2450/AHD/2013 (ASSESSMENT YEARS : 2003-04 & 2006-07) THE INCOME-TAX OFFICER, WARD. 8(1), SURAT APPELLANT VS. SHRI ANILBHAI SHAMJIBHAI PATEL G-9, LAXMI DARSHAN COMPLEX, DABHOLI CHAR RASTA, OPP. SWAMINARAYAN TEMPLE, VED ROAD, SURAT- 395004 RESPONDENT PAN: AJMPM5019Q ITA NOS. 2448/AHD/12, 2308, 2449 & 2450/AHD/2013 [ ACIT/ ITO VS. SHRI JAYANTBHAI D. PATEL & SHRI ANILBHAI S. PATEL] - 2 - /BY REVENUE : SHRI PRADIP KUMAR MAJUMDAR, SR. D.R. /BY ASSESSEE : SHRI M. K. PATEL, A.R. /DATE OF HEARING : 02.05.2017 /DATE OF PRONOUNCEMENT : 05.05.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE FOUR REVENUES APPEALS PERTAIN TO TWO DIFFERE NT ASSESSEES. IT HAS FILED FIRST APPEAL ITA NO.2448/AHD/2012 FOR ASS ESSMENT YEAR 2006-07 AGAINST THE CIT(A)-V, SURATS ORDER DATED 08.08.201 2 IN CASE NO. CAS- V/217/2011-12, DELETING ADDITION OF RS.80,60,980/- IN THE NATURE OF UNACCOUNTED SALE PROCEEDS AS MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 20.12.2011, IN PROCEEDINGS U/S.144 R.W. S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE REVENUES NEXT THREE APPEALS RELATE TO THE L ATTER ASSESSEE SHRI ANILBHAI SHYAMJIBHAI PATEL. FORMER ASSESSMENT YEAR IN THE INSTANT ASSESSEES CASE IS 2003-04 INVOLVING REVENUES TWO APPEALS ITA NO. 2308/AHD/2013 AGAINST THE VERY CIT(A)S ORDER DATED 26.06.2013 IN CASE NO. CAS/V/69/2012-13 REVERSING ASSESSING OFFICERS ACTION MAKING UNEXPLAINED INVESTMENT ADDITION OF RS.50LACS IN ASS ESSMENT ORDER DATED 24.12.2010 IN PROCEEDINGS U/S.144 OF THE ACT. LATT ER APPEAL ITA NO.2449/AHD/2013 IN THE IMPUGNED ASSESSMENT YEAR SE EKS TO REVIVE SECTION 271(1)(C) PENALTY OF RS.30,95,400/- PERTAINING TO T HE ABOVE QUANTUM ADDITION OF UNEXPLAINED INVESTMENT AMOUNTING TO RS. 50LACS. THE ASSESSING ITA NOS. 2448/AHD/12, 2308, 2449 & 2450/AHD/2013 [ ACIT/ ITO VS. SHRI JAYANTBHAI D. PATEL & SHRI ANILBHAI S. PATEL] - 3 - OFFICER HAD IMPOSED THE SAID PENALTY IN HIS ORDER D ATED 22.06.2011 AS DELETED IN THE LOWER APPELLATE PROCEEDINGS. THE RE VENUES FOURTH APPEAL IN ASSESSMENT YEAR 2006-07 CHALLENGES THE VERY CIT(A) S ORDER DATED 01.08.2013, IN CASE NO. CAS/V/68/2012-13, DELETING UNEXPLAINED INVESTMENT ADDITION OF RS.40,30,487/- AS MADE BY TH E ASSESSING OFFICER IN ASSESSMENT ORDER DATED 16.12.2011 IN PROCEEDINGS U/ S.144 R.W.S. 147 OF THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 3. IT EMERGES FROM THE ABOVE NARRATED PLEADINGS THA T THE REVENUES ALL FOUR APPEALS EXCEPT ITA NO.2449/AHD/2013 PERTAIN TO QUANTUM PROCEEDINGS WHEREAS THE ABOVE CAPTIONED APPEAL IS CONSEQUENTIAL PENALTY LITIGATION IN LATTER ASSESSEES CASE. THE SAID THREE QUANTUM APP EALS ADMITTEDLY EMANATE FROM A SEARCH DATED 26.03.2009 IN CASE OF ONE SHRI GHANSHYAM D SUTARIA. THE DEPARTMENT APPEARS TO HAVE SEIZED A SALE AGREEM ENT BETWEEN FORMER ASSESSEE SHRI JAYANTIBHAI D PATEL (VENDOR) AND THE INSTANT LATTER ASSESSEE / VENDEE. THE SAME ALLEGEDLY INDICATED PURCHASE PRIC E OF THE PROPERTIES INVOLVED THEREIN FORMING SUBJECT MATTER OF THE LAND TRANSACTION BETWEEN THE PARTIES. THIS AGREEMENT APPEARS TO BE DATED 03.12. 2005. THE ASSESSING OFFICER FIRST OF ALL MADE THE IMPUGNED ADDITION OF RS.50LACS AS CAPITAL GAINS IN THE HANDS OF THE ABOVESTATED VENDOR/FORMER ASSES SEE. THE VERY SUM THEREAFTER STOOD ADDED AS UNEXPLAINED INVESTMENT IN THE HANDS OF LATTER ASSESSEE SHRI ANILBHAI IN ASSESSMENT YEAR 2003-04 I NVOLVING QUANTUM APPEALS ITA NO.2308/AHD/2013 AND CONSEQUENTIAL PENA LTY APPEAL ITA NO.2449/AHD/2013 (SUPRA). THE DEPARTMENT FURTHER A PPEARS TO HAVE ADDED SIMILAR ALLEGED UNACCOUNTED SALE FIGURES OF RS.80.6 0LACS IN CASE OF FORMER ASSESSEES CASE IN ASSESSMENT YEAR 2006-07 AND CONS EQUENTIAL ADDITION OF UNEXPLAINED INVESTMENT OF RS.40.30LACS IN THE LATTE R ASSESSEES HANDS IN THE ITA NOS. 2448/AHD/12, 2308, 2449 & 2450/AHD/2013 [ ACIT/ ITO VS. SHRI JAYANTBHAI D. PATEL & SHRI ANILBHAI S. PATEL] - 4 - VERY ASSESSMENT YEAR AS INDICATED IN PRECEDING PARA GRAPHS. IT TRANSPIRES FROM THE CASE FILE THAT THE CIT(A) HAS FOLLOWED HIS ORDER DATED 22.05.2012 IN FORMER ASSESSEES CASE FOR ASSESSMENT YEAR 2003- 04 HOLDING THEREIN THAT THE ABOVE AGREEMENT DID NOT AMOUNT TO TRANSFER OF T HE PROPERTY IN QUESTION. HE THEN ADOPTS THE VERY ANALOGY IN THE THREE IDENTI CAL APPEALS HEREIN TO DELETE THE ABOVE CORRESPONDING AS WELL AS IDENTICAL ADDITIONS. IT FURTHER TRANSPIRES THAT ALL THIS HAS RESULTED IN DROPPING O F PENALTY AS WELL IN LATTER ASSESSEE CASE FORMING SUBJECT MATTER OF ADJUDICATI ON IN ITA NO.2449/AHD/2013. THIS LEAVES THE REVENUE AGGRIEVE D TO THE EXTENT INDICATED IN ITS PLEADINGS. 4. SHRI PATEL STATES AT THE OUTSET THAT THERE IS NO DISPUTE ABOUT THE CIT(A) HAVING DELETED ALL QUANTUM ADDITIONS AS WELL AS THE CONSEQUENTIAL PENALTY IN LATTER ASSESSEES CASE BY FOLLOWING HIS EARLIER ORD ER IN FORMER ASSESSEES CASE IN ASSESSMENT YEAR 2003-04. HE THEN FILES BEFORE U S A CO-ORDINATE BENCHS ORDER DATED 29.09.2015 IN ITA NO.1802/AHD/2012 IN F ORMER ASSESSEES CASE REMITTING THE MAIN QUANTUM ISSUE BACK TO THE ASSESS ING OFFICER AS UNDER: 6. WITH THE ASSISTANCE OF LD. D.R., WE HAVE GONE T HROUGH THE RECORD CAREFULLY. ON DUE CONSIDERATION OF THE RECORD, WE A RE OF THE OPINION THAT ORDER OF THE LD. FIRST APPELLATE AUTHORITY IS NOT S USTAINABLE AND THIS ISSUE DESERVES TO BE SET ASIDE TO THE FILE OF ASSESSING O FFICER FOR RE-ADJUDICATION. IT EMERGES OUT FROM THE RECORD THAT DURING COURSE O F SURVEY CARRIED OUT AT THE PREMISES OF THIRD PERSON, COPY OF THE ALLEGED S ALE AGREEMENT WAS FOUND. THIS DOCUMENT HAS BEEN MADE AS A BASIS FOR CONCLUDI NG THAT ASSESSEE HAD SOLD A PIECE OF LAND WHICH HAS RESULTED HIM CAPITAL GAIN. LD. ASSESSING OFFICER HAS TOTALLY FAILED TO NOTICE WHETHER ASSESS EE WAS ACTUALLY OWNER OF THIS LAND. HE FAILED TO COLLECT INFORMATION FROM TH E OFFICE OF THE REGISTRAR EXHIBITING WHETHER THE LAND HAS ACTUALLY BEEN TRANS FERRED OR NOT. IF THE LAND HAD ACTUALLY BEEN TRANSFERRED THEN WHETHER A LONG T ERM CAPITAL GAIN HAS RESULTED TO THE ASSESSEE OR A SHORT TERM CAPITAL GA IN. WHAT WAS THE COST OF ACQUISITION IN THE HANDS OF THE ASSESSEE NOT DISCER NABLE, THE LD.AO HAS ADDED TOTAL SALE CONSIDERATION AS GAIN. ON APPEAL, LD. FIRST APPELLATE AUTHORITY FAILED TO GIVE ANY FINDING EXHIBITING HIS SATISFACTION FOR CONCLUDING THAT NO PROPERTY WAS TRANSFERRED. THE AS SESSMENT ORDER IS AN EX ITA NOS. 2448/AHD/12, 2308, 2449 & 2450/AHD/2013 [ ACIT/ ITO VS. SHRI JAYANTBHAI D. PATEL & SHRI ANILBHAI S. PATEL] - 5 - PARTE ORDER. THE ASSESSEE HAS NOT BROUGHT ANY EVIDE NCE ON RECORD IN REBUTTING THE CONCLUSION OF THE ASSESSING OFFICER. THE LD. CIT(A) HAS REPRODUCED THE SUBMISSIONS OF THE ASSESSEE WHEREBY HE HAS CONTENDED THAT PLOT IN DISPUTE WAS OWNERED BY 15 PERSONS JOINTLY. THOUGH, AGREEMENT WAS EXECUTED BUT ALL THE OWNERS DID NOT AGREE FOR SALE OF THE PLOT AND THEREFORE, NO SALE HAD TAKEN PLACE. IN SUPPORT OF THIS, ASSESS EE HAS FILED A COPY OF FORM NO.7/12, BUT TO OUR MIND, THIS IS NOT A CONCLU SIVE PROOF OF OWNERSHIP. THE AUTHORITIES OUGHT TO HAVE OBTAINED THE REPORT F ROM THE REVENUE AUTHORITIES OF THE STATE GOVERNMENT. LD. CIT(A) ALS O DID NOT CALL FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THIS FR ESH EVIDENCE TAKEN INTO CONSIDERATION BY HIM. THEREFORE, THE ORDER OF THE C IT(A) IS ALSO NOT SUSTAINABLE. CONSIDERING ALL THESE FACTORS, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF ASSESS ING OFFICER FOR A FRESH ADJUDICATION. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE ASSESSING OFFICER AND WILL NOT CAUSE AN Y PREJUDICE TO THE DEFENSE/EXPLANATION OF THE ASSESSEE. LD. ASSESSING OFFICER SHALL PROVIDE DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. THE ASSESSEES THEREFORE IS VERY FAIR IN SEEKING REMAND DIRECTIONS IN THE IN THE INSTANT APPEAL AS WELL. LEARNED DEPARTM ENTAL REPRESENTATIVE DOES NOT DISPUTE ALL THESE DEVELOPMENTS. WE THEREFORE A DOPT THE VERY COURSE OF ACTION HEREIN AS WELL IN THE THREE QUANTUM APPEALS ITA NO. 2448/AHD/2012, 2308 & 2450/AHD/2013 BEFORE US. THE ASSESSING OFFI CER SHALL ENSURE THAT THE ASSESSEES ARE AFFORDED ADEQUATE OPPORTUNITY OF HEARING FOR ADJUDICATING THE ABOVE CRUCIAL ISSUE OF TRANSFER OF OWNERSHIP OF THE LANDS IN QUESTION. THESE THREE APPEALS ARE ACCORDINGLY ACCEPTED FOR ST ATISTICAL PURPOSES. 6. COMING TO REVENUES PENALTY APPEAL ITA NO.2449/A HD/2013, IT HAD ADMITTEDLY COME ON RECORD THAT THE ASSESSEE HAS ALR EADY SUCCEEDED ON QUANTUM ADDITION OF UNEXPLAINED INVESTMENT OF RS.50 LACS (SUPRA) BEFORE THE CIT(A). THE FACT HOWEVER ALSO REMAINS THAT WE HAVE REMITTED THE SAME BACK TO THE ASSESSING OFFICER FOR AFRESH ADJUDICATI ON. WE THUS CONCLUDE THAT THE IMPUGNED PENALTY HAS NOT LEGS TO STAND AS OF NO W. THE ASSESSING OFFICER HOWEVER SHALL HAVE LIBERTY TO PROCEED AFRES H INITIATING THE VERY PENALTY PROCEEDING IF THE FACTS AND CIRCUMSTANCES S O WARRANT IN ITA NOS. 2448/AHD/12, 2308, 2449 & 2450/AHD/2013 [ ACIT/ ITO VS. SHRI JAYANTBHAI D. PATEL & SHRI ANILBHAI S. PATEL] - 6 - CONSEQUENTIAL ASSESSMENT. ITA NO.2449/AHD/2013 IS DECLINED IN ABOVE TERMS. 7. THE REVENUES THREE APPEALS ITA NOS.2448/AHD/201 2, 2308 & 2450/AHD/2013 ARE ACCEPTED FOR STATISTICAL PURPOSES . ITS FURTHER APPEAL ITA NO. 2449/AHD/2013 IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 5 TH DAY OF MAY, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 05/05/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0