Shri Keyur Shah L/h of late Jagdishchandra C.Shah, Tapi V. The Dy.CIT, Circle-6, Surat

ITA 233/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1490 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAILESH VAIDHYA
• Keywords: Unexplained investment; Income from undisclosed sources
• Section: 143(3)

Judgement Text

I.T.A. NO . 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR: 20 1 1 - 12 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD B BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND S.S. GODARA JM ] I.T.A. NO. 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR : 20 1 1 - 12 KEYUR SHAH, .... .......... .APPELLANT L/H OF LATE JAGDISHCHANDRA C. SHA H, 7/28, KANCHWALA STREET, GOLWAD, VYARA, TAPI. [ PAN: A ELPS 2184 N ] VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 6, SURAT . ............. . RESPONDENT APPEARANCES BY: SHAILESH VAIDHYA , FOR THE APPELLANT R.K. GUPTA , FOR THE RESPONDENT D AT E OF CONCLUDING THE HEARING : APRIL 6 TH , 201 6 DATE OF PRONOUNCING THE ORDER : MAY 31 ST , 201 6 O R D E R PER PRAMOD KUMAR AM : BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 13.01.2016 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER), FOR THE ASSESSMENT YEAR 2011 - 12. 2. GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, T HE LEARNED COMMISSIONER OF INCOME TAX ( A PPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AD DITION OF RS.8,10,090/ - ON AC COUNT OF UNACCOUNTED INCOME. I.T.A. NO . 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR: 20 1 1 - 12 PAGE 2 OF 5 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITI ON MADE BY ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER OF INCOME T AX (APPEALS) MAY PLEASE BE DELETED . 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED TH AT THERE IS AN ADDITION OF RS.8,10,090/ - IN THE FIXED ASSET OF THE ASSESSEE BY WAY OF A RESIDENTIAL PROPERTY. WHEN THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SAME, IT WAS EXPLAINED BY THE ASSESSEE THAT LATE SHRI J . C . SHAH, IN RESPECT OF WH OSE INCOME IS BEING ASSESSED , HAD SINCE PASSED AWAY IN 2012 AND THAT THIS RESIDENTIAL PROPERTY WAS SHOWN IN THE HUF S B ALANCE S HEET BUT SINCE THE I NCOME T AX RETURN OF HUF WAS NOT FILED FOR THE LAST SEVERAL YEARS, RESIDENTIAL PROPERTY IS SHOWN IN THE PERSON AL BALANCE SHEET. THE ASSESSING OFFICER THEN REQUIRED THE ASSESSEE TO GIVE COMPLETE DETAILS OF THE SAID HOUSE PROPERTY , I N RESPONSE TO WHICH IT WAS EXPLAINED BY THE ASSESS E E THAT THE PROPERTY WAS ALLOTTED TO LATE SHRI J . C . SHAH IN THE YEAR 1980 AND IT WAS SHOWN IN THE BALANCE SHEET OF THE HUF FOR 2005 - 06. IT WAS FURTHER EXPLAINED THAT IN THE YEAR 2006, BROTHER OF THE ASSESSEE HAD FORMED A P RIVATE L IMITED C OMPANY BY THE NAME OF POLAR PROPERTY MANAGEMENT PRIVATE LIMITED WHICH, INTER ALIA, TOOK CARE OF THIS PROPERTY. IT WAS IN THIS BACKDROP THAT THE ASSESSE E SUBMITTED THAT THERE IS NO INVESTMENT DURING THE RELEVANT PREVIOUS YEAR AND ACCORDINGLY NO ADDITION AS UNEXPLAINED INVESTMENT, AS THE ASSESSING OFFICER PROPOSED, WAS REQUIRED TO BE MADE. THE ASSESSING O FFICER WAS, HOWEVER, NOT CONVINCED. HE WAS OF THE VIEW THAT THE ASSESSEE HAS NOT BEEN ABLE TO ACCOUNT FOR THE SOURCE OF THE PROPERTY VALUED AT RS.8,10, 090 / - AND ACCORDINGLY HE BROUGHT THE AMOUNT OF RS.8,10,0 90 / - TO TAX UNDER THE HEAD UNACCOUNTED INCOME O F THE ASSESS E E . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A) WHO UPHELD THE ADDITION SO MADE AND , WHILE DO I NG SO , HAS OBSERVED AS FOLLOWS : - I.T.A. NO . 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR: 20 1 1 - 12 PAGE 3 OF 5 THE MAIN CONTENTION OF THE ASSESSEE REMAINED AS THE SAME WERE BEFORE AO THAT THE PR OPERTY IN QUESTION IS AN ANCESTRAL PROPERTY INHERITED BY HIM AS LEGAL HEIR IN YEAR 1980 AND NAME OF THE ASSESSEE WAS ENTERED IN THE PROPERTY CARD IN THE YEAR 1995. THIS PROPERTY AS CLAIMED BY THE ASSESSEE WAS INITIALLY SHOWN IN THE NAME OF ASSESSEE'S HUF B UT SINCE HUF BEING NOT LIABLE TO FILE RETURN OF INCOME, THE ASSESSEE REFLECTED THIS ASSET IN THE BALANCE SHEET OF J C SHAH (INDIVIDUAL) BY SIMPLY PASSING BOOK ENTRY. AS PER THE ASSESSEE FOR A BRIEF PERIOD, THE SAID PROPERTY WAS GIVEN TO POLAR PROPERTY MANA GEMENT COMPANY FOR THE PURPOSE OF ITS BUSINESS USE WITHOUT CHARGING ANY RENT OR EXECUTING ANY SALE DEED. THE PROPERTY WAS STANDING IN THE NAME OF THE ASSESSEE ON REVENUE RECORDS AND NEVER TRANSFERRED IN THE NAME OF COMPANY IN PROPERTY CARD OR NAGAR PALIKA OR GOVT. RECORDS. THUS, AS PER THE ASSESSEE, I T IS VERY MUCH CLEAR THAT THE A SSESSEE HAD NOT MADE ANY INVESTMENT FOR ACQUISITION OF THE SAID PROPERTY IN THE YEAR UNDER CONSIDERATION. I HAVE GIVEN THOROUGH CONSIDERATION TO THE CONTENTIONS RAISED BY THE AP PELLANT. THE ASSESSEE HAS MADE VARIOUS CLAIMS ABOUT OWNERSHIP I.E. ACQUIRED BY HUF THROUGH INHERITANCE, PROPERTY GIVEN FOR USE TO COMPANY AND LATER ON SHOWN THE SAID PROPERTY IN THE BALANCE SHEET OF J C SHAH (IND) BY SIMPLY PASSING THE BOOK ENTRY. AS MENTI ONED IN PARA 5.1 ABOVE, THE ID. AR OF (HE ASSESSEE WAS ASKED TO SUBMIT THE NECESSARY EVIDENCES TO SUPPORT HIS CLAIM BUT UNFORTUNATELY HE EXPRESSED HIS INABILITY TO DO SO. THIS IS AN UNDISPUTED FACT THAT, DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HA S SHOWN 'ADDITION' TO FIXED ASSETS IN THE FORM OF RESIDENTIAL PROPERTY, THEN ONUS IS ALSO UPON HIM TO PRODUCE ALL THE NECESSARY EVIDENCES. THE APPELLANT HAS FAILED TO SUBSTANTIATE HIS CLAIM THAT PROPERTY WAS INHE RITED BY HIM AND NO NEW INVESTMENT WAS MADE BY HIM. IN ABSENCE OF CORROBORATIVE EVIDENCE TO SUPPORT HIS CLAIM, THE ID. AO HAD NO OPTION BUT TO CONSIDER THE NEW INVESTMENT SHOWN AS RESIDENTIAL PROPERTY IN BALANCE SHEET AS 'UNE XPLAINED INVESTMENT AND MAKING T HE ADDITION. IT IS SETTLED LAW THAT MERE AS SERTION I.E. GRATIS DICTUM I.E. MERE ASSERTION UNSUPPORTED BY EVIDENCE HAS NO LEGAL FORCE AS EVIDENCE. HENCE, I FIND NO INFIRMITY IN THE ACTION OF THE ID. A . O . IN MAKING ADDITION OF RS.8,10,090 - FOR UNEXPLAINED INVESTMENT FROM UNACCOUNTED INCOME. HENCE, T HE ADDITION IS H EREBY SUSTAINED AND GROUND OF APPEAL IS DISMISSED. 4. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. I.T.A. NO . 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR: 20 1 1 - 12 PAGE 4 OF 5 6. WE FIND THAT IT IS AN UNDISPUTED POSITION THAT THERE IS NO EVIDENCE, WHATSOEVER, OF ANY INVESTMENT HAVING BEEN MADE IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR BEFORE US. CLEARLY, THEREFORE, NO ADDITION CAN I NDEED BE MADE IN RESPECT OF THE UNEXPLAINED INVESTMENT IN THE HOUSE PROPERTY. WE ALSO NOTED THAT VIDE ORDER DATED 05.03.2015 THE ASSESSING OFFICER HAS BROUGHT TO TAX THE AMOUNT OF RS.8,10,090/ - IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF TRANSFER OF THIS V E R Y PROPERTY TO P O LAR PROPERTY MANAGEMENT PVT . LTD. THE FACT THAT THE ASSESSING OFFICER HAS PROCEEDED TO BRING TO TAX GAINS ON ALLEGED TRANSFER OF THE PROPERTY IN THE YEAR 2007 - 08 WOULD AT LEAST SHOW THAT EXISTENCE OF THE OWNERSHIP OF THE PROPERTY MUCH BEF ORE THE ASSESSMENT YEAR BEFORE US WAS NOT EVEN IN DISPUTE. IN ANY EVENT, THE ASSESSEE HAS PRODUCED COPY OF THE B ALANCE S HEET OF JAGDISH CHANDRA SHAH ( HUF ) AS ON 31.03.2005 WHICH SHOWS THIS PROPERTY IN THE ACCOUNTED ASSETS OF THE HUF. SUCH BEING THE CIRCUM STANCE, THERE CANNOT BE ANY JUSTIFICATION, WHATSOEVER, IN THE IMPUGNED ADDITION. 7. IN VIEW OF THESE DISCUSSIONS AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD THE GRIEVANCE OF THE ASSESSE E AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED D ISALLOWANCE. 8. IN THE RESULT, APPEAL IS ALLOWED. P RONOUNCED IN THE OPEN COUR T TODAY ON THE 31 ST DAY OF MAY , 2016 . SD/ - SD/ - S.S. GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 31 ST DAY OF MAY , 2016. PBN/* I.T.A. NO . 2 33 /AHD/ 20 1 6 ASSESSMENT Y EAR: 20 1 1 - 12 PAGE 5 OF 5 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD