Assistant Commissioner of income Tax Circle-4(2)(1), Bangalore V. Shri Narendra Kumar Malik , Bangalore

ITA 2372/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8214 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-03-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 14-08-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, BENGALURU BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 2372 /BANG/201 8 (ASSESSMENT YEAR: 2012-13) ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE 4(2)(1), BENGALURU. VS. APPELLANT SHRI NARENDRA KUMAR MALIK, NO.C - 15, EPSILON VILLA YEMLUR ROAD, BENGALURU-560037. PAN:ACHPM 3286 B RESPONDENT APPELLANT BY : DR.P.V. PRADEEP KUMAR, ADDL.CIT. RESPONDENT BY : SHRI V.MOHAN, CA. DATE OF HEARING: 26/03/2019 DATE OF PRONOUNCEMENT: 03/04/2019 O R D E R PER PAVAN KUMAR GADALE, JM : THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDE R OF THE CIT(A)-4, BENGALURU, DATED 28/05/2018 PASSED U/S 14 3(3) AND 250 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT ] FOR THE ASSESSMENT YEAR 2012-13. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. THE ORDER OF THE LD. CIT (A)-4, BANGALORE, IN SO FA R AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE , IS OPPOSED TO LAW AND THE FACT AND CIRCUMSTANCES OF TH E CASE. ITA NO.2372/BANG/2018 PAGE 2 OF 5 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,18,10,386/ MADE BY AO ON ACCOUNT OF UNEXPLAINED INVESTMENT ON CONSTRUCTION OF BUILDING. 3. ON FACTS OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,18,10,386/ WITHOUT VERIFYING THE DETAILS OF SHARE TRANSACTIONS STATEMENTS, MUTUAL FUND STATEMENT, CASH WITHDRAWAL ETC, AS MENTIONED IN REMAND REPORT. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF CIT(A) IS SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER, AMEND AND / OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF TRADING OF SHARES AND FILED RETURN OF I NCOME ON 18/09/2013 DECLARING NIL INCOME AND THE LOSS DISC LOSED BEING RS.51,71,968/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTI NY UNDER CASS AND NOTICES U/S 143(2) AND 142(1) WERE ISSUED. IN RESPONSE, THE LEARNED AR APPEARED FROM TIME TO TIME AND SUBMITTED THE INFORMATION. THE AO FOUND THAT THE A SSESSEE HAS MADE INVESTMENT IN THE CONSTRUCTION OF BUILDING AND THE SOURCES WERE CALLED TO EXPLAIN. SINCE THE ASSESSEE FAILED TO ESTABLISH ONE TO ONE LINK AND CASH FLOW IN RESPECT OF ITA NO.2372/BANG/2018 PAGE 3 OF 5 CONSTRUCTION OF THE BUILDING AND ALSO NO DETAILS OF CONSTRUCTION OF BUILDING WERE FILED. HENCE, THE AO TREATED THE SOURCES FOR CONSTRUCTION AS UNEXPLAINED BY THE ASSESSEE AND OBS ERVED THAT THE BUILDING NEEDS TO BE REFERRED TO THE VALUATION OFFICER TO ARRIVE AT ACTUAL COST AND MADE ADDITION OF RS.1,08, 10,386/- WITH OTHER ADDITIONS AND ASSESSED THE TOTAL INCOME OF RS.1,32,26,120/- VIDE ORDER U/S 143(3) OF THE ACT D ATED 26/03/2015. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(A). THE CIT(A) HAVING CONSIDERED THE G ROUNDS OF APPEAL AND THE FINDINGS OF THE AO AND THE SUBMISSIO NS MADE BY THE LEARNED AR DEALT WITH ISSUES INDEPENDENTLY A ND GRANTED RELIEF. ON APPEAL BY THE REVENUE TO TRIBUNAL, ON D ISPUTED ISSUE OF BUILDING CONSTRUCTION, THE LEARNED DR VEHEMENTLY RELIED ON THE ORDER OF THE AO AND PRAYED FOR ALLOWING THE REV ENUE APPEAL. CONTRA, THE LEARNED AR SUPPORTED THE ORDER OF THE CIT(A) AND FILED WRITTEN OBJECTIONS. 5. WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. PRIMA FACIE, THE REVENUES CONTENTION THAT HE CIT(A) HAS ERRED IN DELETING ADDITION MADE BY THE AO ON AC COUNT OF UNEXPLAINED INVESTMENT WITHOUT VERIFYING THE DETAIL S. WHEREAS ON PERUSAL OF THE CIT(A)S ORDER, AT PAGE 5 WE FOUN D THE OBSERVATIONS OF THE CIT(A) AS UNDER: ITA NO.2372/BANG/2018 PAGE 4 OF 5 THE AO. IN THE REMAND-REPORT HAS RECORDED A CLEAR FINDING TO THE EFFECT THAT. THE PAYMENTS TOWARDS TH E BUILDING CONSTRUCTION BEING_ MADE THROUGH BANK. WER E DULY VERIFIED AND WERE FOUND TO BE IN-ORDER. THE RELEVANT PART OF THE REMAND-REPORT IS EXTRACTED AS UNDER: THE AO IN HIS ORDER HAD MADE ADDITION OF RS.1,18,10,386/-, SINCE THE ASSESSEE COULD NOT ABLE TO EXPLAIN THE SOURCE FOR THE SAID INVESTMENT. ON PERUSAL OF THE SUBMISSION MADE TO CIT(A)-4, THE ASSESSEE HAS CONTENDED THAT THE ENTIE PAYMENT WAS MADE THROUGH BANK AND WAS FINANCED THROUGH INFLOW FROM SALE OF SHARES, IMPEX SALES, MUTUAL FUNDS ENCASHED. ON VERIFICATION OF THE SUBMISSION, IT WAS FOUND THAT THE ASSESSEE HAD SUBMITTED LEDGER ENTRY FOR BUILDING CONSTRUCTION, LEDGER BOOKS OF ING VYSYA BANK AND KOTAK BANK. THE VERIFICATION OF EACH INDIVIDUAL ENTRY IN THE LEDGER OF BUILDING CONSTRUCTION WAS VERIFIED WITH BANK STATEMENTS. THE CLAIM OF THE ASSESSEE THAT THE PAYMENT FOR CONSTRUCTION OF BUILDING THROUGH BANK IS FOUND TO BE IN ORDER. ON VERIFYING THE LEDGER BOOK OF KOTAK MAHINDRA BANK THE TOTAL RECEIPT RECEIVED FROM KOTAK SECURITIES IS RS.1,19,63,449/- FOR FY 2011-12 AND WAS VERIFIED ALONG WITH BANK STATEMENTS. IN BACKGROUND OF THE ABOVE DETAILED DISCUSSION AND FACTS & CIRCUMSTANCES OF THE CASE, I FIND NO VALID EVIDENCIARY BASIS TO SUSTAIN THE IMPUGNED ADDITION. THE SAME IS THEREFORE DIRECTED TO BE DELETED. THE ASSES SEE'S GROUNDS OF APPEAL IN THIS RESPECT ARE THEREFORE ALL OWED. WE FOUND THAT THE ASSESSEE HAS SUBMITTED EVIDENCE W HICH WAS FORWARDED TO THE AO FOR HIS COMMENTS AND THE CIT(A) HAVING CONSIDERED THE REMAND REPORT, THE SUBMISSIONS OF TH E ASSESSEE AND THE MATERIAL ON RECORD, OBSERVED THAT THE ADDIT ION CANNOT BE SUSTAINED. THE LEARNED DR HAS ONLY SUPPORTED TH E ORDERS OF ITA NO.2372/BANG/2018 PAGE 5 OF 5 THE AO BUT COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A) WITH ANY COGENT EVIDENCE OR MATERIAL. THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT(A) AND UPHOL D THE SAME AND DISMISS THE GROUNDS OF APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD APRIL, 2019. SD/- SD/- (B.R. BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BENGALURU D A T E : 03/04/2019 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)- 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE