ITO, Rewari V. Sh. Ram Phal, Haryana

ITA 2339/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4064 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K JAIN
• Section: 143(3); 2(14); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2339/DEL/2014 A.Y. 2009-10 ITO, WARD-2, REWARI VS. SH. RAM PHAL, MODEL TOWN, S/O SH. BHIM SINGH, REWARI (HARYANA)-123401 HOUSE NO. 8, OFFICER COLO NY, GARHI BOLNI ROAD, DISTT. REWARI, HARYANA (APPELLANT) (RESPONDENT) AND C.O. NO. 320/DEL/2016 (IN ITA NO. 2339/DEL/2014) A.Y. 2009-10 SH. RAM PHAL, VS. ITO, WARD-2, REWARI, C/O SUVEEN THAKRAL, HARYANA # 1121, SECTOR-3, HISSAR, HARYANA (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. ATIQ AHMAD, SR. DR ASSESSEE BY : SH. S.K. JAIN, ADV. ORDER PER H.S. SIDHU, JM : THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE BOTH ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ROHTAK DA TED 14.02.2014 2 PERTAINING TO ASSESSMENT YEAR 2009-10. SINCE THE IS SUES INVOLVED IN THIS APPEAL AND CROSS OBJECTION ARE INTER-CONNECTED, HE NCE, THE SAME ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE, BY FIRST DEALING WITH REVENUES APPEAL. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN RESTRICTING THE ADDITION AMOUNTING TO RS. 8,19,700/- OUT OF RS. 12,28,700/- MADE BY AO ON ACCOUNT OF THE OPENING CASH IN HAND WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO IN THE ASSESSMENT ORDER AS NO SUBSTANTIAL DOCUMENTS HAS BEEN BROUGHT ON RECORD REGARDING THE SOURCES OF OPENING CASH IN HAND. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION AMOUNTING TO RS. 55,21,687/- MADE BY AO ON ACCOUNT OF EARNED MONEY RECEIVED IN RESPECT OF SALE OF AGRICULTURAL LAND WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO IN ASSESSMENT ORDER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION 3 AMOUNTING TO RS. 29,55,000/- MADE BY THE AO ON ACCOUNT OF EARNED MONEY RECEIVED IN RESPECT OF SALE OF FLAT WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO IN ASSESSMENT ORDER. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MODIFY, DELETE AND OR CHANGE ANY OF THE ABOVE GROUNDS ON OR BEFORE THE DATE OF HEARING. 3. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJE CTION READ AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN ALLOWED BENEFIT ONLY OF RS. 8,91,700/- OUT OF OPENING BALANCE AS DEPICTED IN CA SH FLOW STATEMENT AMOUNTING TO RS. 12,28,700/-. THAT ADDITION SUSTAINED BY THE LD. CIT(A) AT RS. 4,09,00 0/- UNDER SECTION 68 OF THE I.T. ACT, 1961 IS AGAINST T HE LAW IN SO MUCH SO NO BOOKS OF ACCOUNTS WERE REQUIRED TO BE MAINTAINED BY ASSESSEE. 2. RELIEF AS PER GROUNDS OF CROSS OBJECTIONS. 3. ANY OTHER RELIEF AS MAY BE DEEMED FIT. 4. THAT THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF CROSS OBJECTIONS BEFORE THE APPEAL IS FIN ALLY HEARD OR DISPOSED OFF. 4 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A SALARIED EMPLOYEE AND FILED THE RETURN OF INCOME DECLARING AT RS. 1,95,450/- ON 21.7.2009 WHICH WAS LATER REVISED ON 31.3.2011 AT R S. 3,45,850/- AND THE SAME WAS PROCESSED U/S. 143(1) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). LATER ON, THE C ASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSU ED ON 20.8.2011 WHICH WAS SERVED UPON THE ASSESSEE ON 24.8.2011 FIXING TH E CASE FOR 5.9.2011. AGAIN, NOTICE U/S. 143(2) OF THE ACT DATED 9.9.2011 WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SAME, THE AR OF THE AS SESSEE ATTENDED THE PROCEEDINGS AND FILED THE INFORMATION AND DETAILS A S CALLED FOR. THEREAFTER, THE AO MADE THE ADDITIONS ON ACCOUNT OF OPENING CAS H BALANCE IN HAND (RS. 12,28,700), EARNEST MONEY RECEIVED IN RESPECT OF SALE OF AGRICULTURAL LAND (RS. 55,21,687/), EARNEST MONEY RECEIVED IN RE SPET OF SALE OF FLAT AT ZIRAKPUR (RS. 29,55,000), DIFFERENCE IN SALARY RECE IVED (RS. 1,01,941) AND DIFFERENCE IN BANK INTEREST INCOME (RS. 23,576) AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,01,76,700/- VIDE ASSESSMEN T ORDER DATED 29.12.2011 PASSED U/S. 143(3) OF THE ACT. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 29.12.2011, ASSESSEE APPEALED BEFORE TH E LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 14.2.2014 HAS ALLOWE D THE APPEAL OF THE ASSESSEE. AGAINST THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US AND ASSESSEE HAS FILED THE CROSS OBJECTION. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REIT ERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5 6. ON THE CONTRARY, THE LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED HE HAS PASSE D A WELL REASONED ORDER, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. HOWEVER, HE HAS WITHDRAWN THE CROSS OBJECTION AND ENDORSED THE REMARKS WITHDRAWN ON THE APPLICATION FOR CONDONATION OF DELAY. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER. AS REGARD THE GROUND NO. 1 RELA TING TO RESTRICTING THE ADDITION AMOUNTING TO RS. 8,19,700/- OUT OF RS. 12, 28,700/- MADE BY AO ON ACCOUNT OF THE OPENING CASH IN HAND IS CONCERNED , WE FIND THAT IT IS A FACT THAT A STATEMENT WAS FILED BEFORE THE AO WHICH CONTAINED CERTAIN MISTAKES. THE AO HAS NOT COMMENTED ON THIS FACT IN HIS REMAND REPORT DATED 03.12.2012. ALL THE EVIDENCES IN THE PAPER BOOK SUBMITTED BY THE ASSESSEE ALONGWITH APPLICATION FOR ADDITIONAL EVIDE NCE WERE NOT CONSIDERED BY HIM. HOWEVER, THE CORRECT STATEMENT O F CASH REVEALS THAT AT NO POINT OF TIME DID THE ASSESSEE HAVE CASH IN HAND WHICH WAS LESS THAN RS. 8,19,700/-. HOWEVER, THERE WAS AN AMOUNT OF RS . 8,19,700/- AT ITS MAXIMUM, THEREFORE, LD. CIT(A) HAS RIGHTLY ALLOWED THE CREDIT UPTO THAT AMOUNT ONLY AND SUSTAINED THE AMOUNT OF RS. 4,09,000/- (RS. 12,28,700 LESS RS. 81,19,700) O NLY, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, WE UP HOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE G ROUND RAISED BY THE REVENUE. 7.1 AS REGARDS GROUND NO. 2 RELATING TO DELETING TH E ADDITION AMOUNTING TO RS. 55,21,687/- MADE BY AO ON ACCOUNT OF EARNED MONEY RECEIVED IN 6 RESPECT OF SALE OF AGRICULTURE LAND IS CONCERNED, W E FIND THAT THE ASSESSEE DID NOT REFUND ANY PART OF THE EARNEST MONEY RECEIV ED UNDER THE AGREEMENT TO SELL THE AGRICULTURAL LAND, NO TAX LI ABILITY ACCRUES ON THE ASSESSEE. IT IS SO BECAUSE THE AMOUNT WAS RECEIVE D IN RESPECT OF SALE OF ADMITTEDLY AGRICULTURAL LAND SITUATED BEYOND 8 KMS OF ANY MUNICIPALITY (DULY VERIFIED BY THE AO THROUGH ENQUIRIES WITH LA ND REVENUE AUTHORITIES) WHICH DOES NOT FALL IN THE DEFINITION OF THE CAPITA L ASSET PROVIDED UNDER SECTION 2(14) OF THE ACT. THEREFORE, WHEN THE EXIST ENCE OF THE PARTIES CONCERNED IS NOT IN DOUBT AND THE MAJORITY OF THE E ARNEST MONEY WAS RECEIVED BY CHEQUE DETAILS WERE MADE AVAILABLE T O THE AO, AND THE AO HAS NOT PROVED NOR CHALLENGED THEIR CAPACITY TO GIVE SUCH AN EARNEST MONEY, ASSESSEE WAS NOT CALLED UPON TO PRODUCE THO SE PARTIES OR TO FILE CONFIRMATION LETTERS, IT WAS ILLEGAL ON HIS PART TO TAX THE AMOUNT UNDER SECTION 68 OF THE ACT. NON REFUND OF THE AMOUNT (TH OUGH IT WAS ACTUALLY REFUNDED AS IS SHOWN IN THE STATEMENT OF CASH W HICH WAS PREPARED AT HIS INSTRUCTIONS), IT IS IMMATERIAL IN LAW FOR TAX ING THE AMOUNT AS IT WAS RECEIVED UNDER AGREEMENT TO SELL THE AGRICULTURAL LAND. IN VIEW OF THE LD. CIT(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION OF RS. 55,21,687/- WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFO RE, WE UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AN D REJECT THE GROUND RAISED BY THE REVENUE. 7 7.2 AS REGARDS GROUND NO. 3 RELATING TO DELETING T HE ADDITION AMOUNTING TO RS. 29,55,000/- MADE BY THE AO ON ACCOUNT OF EAR NED MONEY RECEIVED IN RESPECT OF SALE OF FLAT IS CONCERNED, WE FIND TH AT THERE WAS AN AGREEMENT TO SELL A FLAT BOOKED WITH A BUILDER BU T POSSESSION WAS STILL EXPECTED. THE AO HAS NOT QUESTIONED THE GENUINENES S OF THE AGREEMENT. THE INITIAL PAYMENT OF RS. 5 LACS IS MENTIONED IN T HE MAIN BODY OF THE AGREEMENT. THE AO HAS HELD THAT THE SUBSEQUENT PAYM ENTS WERE NOT TO BE MADE BY THE PROSPECTIVE BUYER. THIS IS NOT BORNE OUT BY FACTS, AS THE PAYMENTS WHICH WERE TO BE MADE TO THE ASSESSEE BY T HE BUYERS IN TERMS OF A CLAUSE IN THE AGREEMENT, DID HAPPEN. WE NOTE THAT ONE OF THE BUYERS, SH. VIKRAM SINGH, APPEARED BEFORE THE AO AN D SAID THAT HE RECEIVED A MONTHLY RENTAL INCOME OF RS. 25,000/- TO RS. 30,000/- PER MONTH, AS ALSO OWING 10 ACRES OF AGRICULTURAL LAND . HE ALSO STATED THAT HE HAD GIVEN THE ADVANCES TO THE ASSESSEE FROM TIME TO TIME AND ALSO CONFIRMED THAT THE AMOUNT WAS RETURNED WITH A PENAL AMOUNT OF RS. 1 LAKH ON CANCELLATION OF AGREEMENT. IN OUR OPINION, THE SAID PURCHASER HAS PROVED HIS IDENTITY, GENUINENESS AND CAPACITY TO MAKE THE IMPUGNED PAYMENTS. NO WHERE THE AO BEEN ABLE TO PROVE THAT THIS WAS THE ASSESSEES OWN MONEY CHANNELIZED THROUGH A THIRD PA RTY, THEREFORE, LD. CIT(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION OF RS. 29,55,000/- WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJEC T THE GROUND RAISED BY THE REVENUE. 8 ASSESSEES CROSS OBJECTION 8. AS REGARDS, ASSESSEES CROSS OBJECTION IS CONCE RNED, WE FIND THAT THE LD. COUNSEL OF THE ASSESSEE DURING THE COURSE O F HEARING HAS WITHDRAWN THE CROSS OBJECTION BY ENDORSING THE REMA RKS WITHDRAWN ON THE APPLICATION FOR CONDONATION OF DELAY, HENCE, TH E SAME IS DISMISSED AS SUCH. EVEN OTHERWISE, THE CROSS OBJECTION IS TIME BARRED AND HENCE, NOT SUSTAINABLE IN THE EYES OF LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 22/01/2018. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:22/01/2018 'SRBHATNAGAR' COPY FORWARDED TO:- 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES