RAMASHRAY S. YADAV, THANE V. ITO WD 4(3), THANE

ITA 2432/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0113 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 06-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 28-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

, J , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM & SHRI RAVISH SOOD, JM ITA NO.2432/MUM/2015 : ASST.YEAR 2010-2011 SHRI RAMASHRAY S.YADAV SHOP NO.1, ADARSH COMMERCIAL CENTRE BEHIND GURUDWARA, VASAI (WEST) THANE. PAN : AAOPY1498A / VS. THE INCOME TAX OFFICER WARD 4(3) THANE. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI VIMAL PUNMIYA /RESPONDENT BY : MS.ARJU GARODIA / DATE OF HEARING : 19.06.2017 / DATE OF PRONOUNCEMENT : 23.06.2017 / O R D E R PER SHAMIM YAHYA, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 13.02.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-2011. 2. THE GROUNDS OF APPEAL READ AS UNDER:- A. ADDITION :- 1. SHORT TERM CAPITAL GAIN OF RS. 40,37,979 ON LAND:- A. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS PASSED EX PARTE APPEAL ORDER DUE TO NONATTENDANCE OF THAN A.R, OF YOUR APPELLANT SO CASE COULD NOT BE PROPERLY REPRESENTED BEFORE HIM TO SAY THAT ASSESSING OFFICER HAS NOT ACCEPTED THE REQUEST OF THE A.R. TO SEND MATTER TO VALUATION OFFICER AS PER PROVISION OF U/S 50C OF THE INCOME TAX ACT AND IT IS WRONG TO ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 2 SAY THAT A.R. HAS ACCEPTED THE ADDITION IN FACT IT WAS NOT INFORMED TO A.R ABOUT ADDITION. B. APPELLANT PRAY THAT ADDITION MAY BE DELETED AND ASSESSING OFFICER MAY DIRECT TO SEND MATTER TO VALUATION OFFICER. 2. UNEXPLAINED MONEY U/S 69A OF RS.11,11,935/ :- A. THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS PASSED EX PARTE APPEAL ORDER DUE TO NON ATTENDANCE OF THAN A.R. OF YOUR APPELLANT SO CASE COULD NOT BE PROPERLY REPRESENTED BEFORE HIM TO EXPLAIN ABOUT SOURCE OF CASH DEPOSIT IN BANK ACCOUNT. B. APPELLANT PRAY THAT ONE MORE CHANCE MAY BE GIVEN TO GET VERIFY CASH DEPOSIT IN ACCOUNT EXPLANATION OF THE APPELLANT BE ACCEPTED AND ADDITION MAY BE DELETED. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. APROPOS GROUND NO.1, CAPITAL GAIN ON SALE OF LAND. 3.1 THE ASSESSING OFFICER NOTED THAT THE MARKET VALUE FOR THE PURPOSE OF STAMP VALUE WAS MUCH HIGHER THAN THE SALE VALUE DISCLOSED BY THE ASSESSEE. THE DIFFERENCE WAS PROPOSED BY THE ASSESSING OFFICER TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LEARNED COUNSEL OF THE ASSESSEE AGREED BEFORE THE ASSESSING OFFICER FOR THE ABOVE ADDITION. IN THESE CIRCUMSTANCES, THE IMPUGNED ADDITION WAS MADE. THE ASSESSING OFFICERS OBSERVATIONS ARE AS UNDER:- 4. DURING THE YEAR, THE ASSESSEE HAS SOLD PLOT AT PALGHAR WHICH WAS ACQUIRED IN THE YEAR 2008-09 FOR TOTAL CONSIDERATION OF RS. 105.00 LAKHS. ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 3 THE ASSESSEE HAS FURNISHED THE WORKING OF SHORT TERM CAPITAL GAINS AS UNDER: DATE OF TRANSFER 11/01/2010 SALE CONSIDERATION RS.105,00,000 LESS DEDUCTION: COST OF ACQUISITION RS.95,00,000 STAMP DUTY CHARGES RS.93,000 REGISTRATION CHARGES RS.30,380 COST OF IMPROVEMENT RS.6,83,295 SHORT TERM CAPITAL GAINS RS. 193,325/- THE COST OF PURCHASE IS VERIFIABLE FROM THE PURCHASE DEED & THE SALE CONSIDERATION AND OTHER EXPENSES ARE VERIFIABLE FROM THE SALE DEED WHICH WERE PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS DISCLOSED THE PROFIT ARISING OUT OF SALE OF PROPERTY AS SHORT TERM CAPITAL GAINS. AS SUCH THE CONSIDERATION FOR THE PURPOSE OF DETERMINING PROFIT WILL BE MARKET VALUE FOR THE PURPOSE OF STAMP DUTY AS PER SECTION 50C OF THE INCOME-TAX ACT. ON VERIFICATION OF THE SAME, IT WAS FOUND THAT THE MARKET VALUE OF THE PROPERTY IS RS. 1,44,55,000/-. THEREFORE THE DIFFERENCE BETWEEN THE MARKET VALUE AND SALES CONSIDERATION ( RS. 1,44,55,000 - 1,05,00,000)= 40,37,979/- IS PROPOSED TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE, BEING UNDISCLOSED SHORT TERM CAPITAL GAINS. THE A.R AGREED FOR DISALLOWANCE. AS THE ASSESSEE HAD DISCLOSED THE SHORT TERM CAPITAL GAINS WITHOUT TAKING INTO ACCOUNT SECTION 50C OF THE INCOME-TAX ACT, THIS AMOUNTS TO FURNISHING INACCURATE PARTICULARS OF INCOME. PENALTY PROCEEDINGS U/S 271(1)(C) IS THEREFORE BEING INITIATED SEPARATELY. 4. AGAINST THE ABOVE ORDER, ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT(A). BEFORE THE LEARNED CIT(A), THE ASSESSEE REQUESTED FOR REFERENCE TO THE VALUATION CELL FOR VALUATION OF THE PROPERTY. THE LEARNED CIT(A) NOTED THAT THE ASSESSEE HAS NEVER MADE THIS REQUEST BEFORE THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES, THE LEARNED CIT(A) WAS NOT CONVINCED WITH THE ASSESSEES REQUEST FOR REFERENCE TO THE VALUATION CELL. THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD ARE AS UNDER:- ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 4 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE PROVISION OF SECTION 50C OF THE I.T.ACT AND NOTICED THAT THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSETS TO THE VALUATION OFFICER, PROVIDED THE SAME HAS BEEN RAISED BEFORE THE A.O., BY THE ASSESSEE, BY CLAIMING THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY. HOWEVER, THE APPELLANT HAS NOT RAISED ANY SUCH OBJECTION BEFORE THE A.O., RATHER AGREED TO BE ASSESSED ON THE ABOVE SHORT TERM CAPITAL GAIN. SECONDLY, THE APPELLANT ALSO DID NOT APPEAR DURING THE APPELLATE PROCEEDINGS FOR ABOVE OBJECTION ALONG WITH SUPPORTING DOCUMENTARY EVIDENCES. THEREFORE, IN THE ABSENCE OF ANY CREDIBLE EVIDENCES, THE ABOVE CONTENTION OF THE APPELLANT, IS HEREBY REJECTED. THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY AND TAKEN BY THE AO I.E. RS.1,44,55,000/-, FOR CALCULATING THE CAPITAL GAIN, IS HEREBY TREATED AS ACTUAL SALE CONSIDERATION RECEIVED BY THE APPELLANT AGAINST SALE OF ABOVE PLOT. SINCE, THE LD.AR OF THE APPELLANT, HIMSELF HAD AGREED, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TO BE ASSESSED AT 40,37,979/- (DIFFERENCE BETWEEN FAIR MARKET VALUE AND COST OF LAND), THE SHORT TERM CAPITAL GAIN, AS DETERMINED ABOVE, IS HEREBY CONFIRMED. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE OF VALUATION OF THE PROPERTY NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER SO THAT THE MATTER CAN BE REFERRED TO THE VALUATION CELL. IN THIS REGARD, THE LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE UPON SEVERAL ITAT DECISIONS FOR THE PROPOSITION THAT WHEN THE ASSESSEE MAKES A REQUEST IN CASE OF PROPOSED ADDITION U/S 50C, THE ISSUE SHOULD BE REMITTED TO THE FILE OF THE ASSESSING OFFICER TO OBTAIN VALUATION FROM THE VALUATION OFFICER. ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 5 7. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THIS CASE THE ASSESSEE HAS NOT MADE ANY SUCH REQUESTS BEFORE THE ASSESSING OFFICER. RATHER, THE ASSESSEE HAS AGREED TO THE ADDITION. SHE SUBMITTED THAT THIS MATTER HAS BEEN MENTIONED BY THE LEARNED CIT(A), HENCE, SHE PLEADED THAT ASPECT IS NO NEED TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). 8. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE ASSESSEE HAS NOT MADE ANY REQUEST FOR REFERENCE TO THE VALUATION CELL, BEFORE THE ASSESSING OFFICER. RATHER, BEFORE THE ASSESSING OFFICER, THE ASSESSEES COUNSEL HAS AGREED TO THE ADDITION. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). IN THIS REGARD, WE PLACE RELIANCE UPON THE HONBLE BOMBAY HIGH COURT DECISION IN THE CASE OF WESTERN INDIA AUTOMOBILES V. CIT [112 ITR 1048] FOR THE PROPOSITION THAT WHEN THE ASSESSEE HAS AGREED THE ADDITION BEFORE THE ASSESSING OFFICER, NO APPEAL LIES ON THE SAME. IN THE PRESENT CASE, NO CASE HAS BEEN MADE OUT THAT THE ASSESSEES COUNSEL HAS NOT AGREED BEFORE THE A.O. ACCORDINGLY, THIS GROUND IS DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 9. APROPOS GROUND NO.2 UNEXPLAINED MONEY, WHILE MAKING THE ADDITION. ON THIS SUBJECT, THE ASSESSING OFFICER HAS OBSERVED AS UNDER:- 'FROM AIR INFORMATION IT WAS GATHERED THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS. 16,00,5007- IN SAVINGS BANK ACCOUNT. TO VERIFY THE SOURCE OF CASH DEPOSITS, THE AR WAS REQUESTED TO FURNISH THE DETAILS OF ALL THE BANK ACCOUNTS STATEMENT AND WAS ALSO REQUESTED TO EXPLAIN THE DEPOSIT APPEARING THEREIN. IN REPLY TO THE SAME, THE AR HAS FURNISHED THE DETAILS OF BANK ACCOUNT AND ALSO FURNISHED THE BANK STATEMENT. THE DETAILS OF THE BANK ACCOUNT ARE AS UNDER:- ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 6 1. YES BANK LTD. A/C NO. 006892000000228. 2. VASAOVIKASSAHKARI BANK LTD. A/C NO. 986. 3. STATE BANK OF INDIA A/C NO. 30079911362 4. PUNJAB & MAHINDRA CO-OPERATIVE BANK LTD. A/C NO. 1001/8053 . 5. BASSIEN CATHOLIC CO-OPERATIVE BANK LTD. A/C NO. 35914 6. MANICKPUR URBAN CO-OP. CREDIT SOCIETY LTD. THE ASSESSEE HAS FURNISHED THE BANK STATEMENT OF THE ABOVE SAID ACCOUNT AND ALSO SUBMITTED CASH FLOW STATEMENT. IT IS EXPLAINED BY THE AR THAT THE CASH IS WITHDRAWN FROM ONE BANK ACCOUNT AND THE SAME WAS DEPOSITED IN ANOTHER BANK ACCOUNT. THERE WAS SIMILAR ISSUE INVOLVED IN THE A.Y. 2009-10, WHEREIN THE THEN ASSESSING OFFICER HAD TREATED RS. 9,72,000/- AS UNEXPLAINED OUT OF THE TOTAL CASH DEPOSIT OF RS. 12,42,160/-. IN THAT YEAR TOO, THE AR HAD TAKEN THE SIMILAR STAND CASH DEPOSITS WERE MADE BY WAY OF DEPOSIT FROM ONE ACCOUNT TO ANOTHER. THE ASSESSEE IS IN APPEAL AND THE APPEAL IS TILL PENDING. NOW THIS YEAR TOO, THE AR'S EXPLANATION IS THE SAME. IN THIS BACKDROP, THE AR WAS REQUESTED TO FURNISH THE DAILY CASH FLOW STATEMENT AND CASH FLOW STATEMENT MONTH WISE. THE SAME HAS BEEN FURNISHED. THE DAILY CASH FLOW STATEMENT SUBMITTED IN 5 PAGES, WHICH IS BEING ANNEXED TO THE ASSESSMENT ORDER AS PART OF THE ASSESSMENT ORDER THAT ON MANY INSTANCES, THE ASSESSEE HAD NO CASH AVAILABLE AND THE BALANCE WAS IN NEGATIVE. FOR INSTANCE, THE FIRST NEGATIVE BALANCE IN 13.05.2009 OF RS.2,755/-. FURTHER FROM 13.11.2009 TO 31.03.2010 THE CASH BALANCE WAS NEGATIVE ONLY ON ALL THE DAYS. AS SUCH THE AR'S EXPLANATION THAT THE CASH WAS WITHDRAWN FROM ONE ACCOUNT FOR MAKING DEPOSIT IN ANOTHER ACCOUNT DOES NOT HOLD GOOD AND CANNOT BE TREATED AS SATISFACTORY EXPLANATION WHICH EXPLAINS, THE DEPOSIT MADE. THE AR HAS ALSO FURNISHED THE MONTHLY CASH FLOW STATEMENT WHERE HE HAD SHOWN UNSECURED CASH LOAN FROM THE MONTH OF NOVEMBER 2009 TO MARCH 2010. THE LOANS WERE CLAIMED TO FROM VARIOUS PERSONS AS CASH LOAN BUT HAS NOT FURNISHED ANY CONFIRMATION SAME. AS SUCH PART OF THE CASH DEPOSITS ARE NOT EXPLAINABLE AS THE DAILY CASH FLOW STATEMENT SUGGESTS. TO WORK OUT THE UNEXPLAINED CASH DEPOSIT THE PEAK OF THE NEGATIVE CASH BALANCE IS ONLY ON 12.01.2010 OF RS. 11,11,935/-, WHICH CAN BE TREATED AS UNEXPLAINED INVESTMENT. IN VIEW OF THE SAME THE AR WAS REQUESTED TO FURNISH THE EXPLANATION WHY THE PEAK OF NEGATIVE CASH BALANCE OF RS. 11,11,935/- SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH INVESTMENT THROUGH ORDER SHEET NOTING DT. 28.03.2013. THE AR HAS SIGNED THE ORDER SHEET ON 28.03.2013 STATING AS HE HAS NO EXPLANATION TO OFFER. IN OTHER WORDS, THE AR HAS ADMITTED THAT HE HAD NO EXPLANATION TO EXPLAIN THE CASH DEPOSIT. IN VIEW OF THE ABOVE, ADDITION OF RS. 11,11,935/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CASH DEPOSIT AS UNEXPLAINED MONEY U/S 69A OF THE INCOME TAX ACT. THIS ALSO PROVES THAT THE ASSESSEE HAS CONCEALED HIS ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 7 INCOME TO THE EXTENT OF RS. 11,11,935/- ON THIS COUNT AND THEREFORE PENALTY PROCEEDINGS U/S. 271(L)(C) IS ALSO INITIATED SEPARATELY.' 10. UPON ASSESSEES APPEAL, THE LEARNED CIT(A) CONFIRMED THE ADDITION, HOLDING AS UNDER:- DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT NEITHER ATTENDED THE PROCEEDINGS NOR FILED ANY WRITTEN SUBMISSIONS. FROM THE ABOVE FACTS IT IS SEEN THAT VIDE ORDER SHEET NOTING DATED 28.03.2013, SIGNED BY THE AR OF THE APPELLANT DURING ASSESSMENT PROCEEDINGS, STATED THAT HE HAD NO EXPLANATION FOR THE ALLEGED CASH DEPOSITS IN VARIOUS BANK ACCOUNTS, HENCE, SUPPORTING DOCUMENTARY EVIDENCE CANNOT BE PRODUCED. ACCORDINGLY, THE AMOUNT OF RS. 11,11,935/-, AS DETERMINED ABOVE, WAS ADDED BY THE AO. 11. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE MAY BE REMITTED TO THE FILE OF THE ASSESSING OFFICER AS THE ASSESSEE HAS DULY SUBMITTED CASH FLOW STATEMENT, WHICH HAS NOT BEEN PROPERLY APPRECIATED BY THE ASSESSING OFFICER. 13. UPON CAREFUL CONSIDERATION OF THE ISSUE, WE NOTE THAT THE ASSESSING OFFICER IN THIS CASE HAS NOTED THAT NO EXPLANATION WAS OFFERED BY THE ASSESSEE FOR THE UNEXPLAINED CASH DEPOSIT. ASSESSEE HAS PLEADED THAT CASH WAS WITHDRAWN FROM ONE ACCOUNT AND DEPOSITED IN ANOTHER ACCOUNT. FURTHERMORE, THE ASSESSEE HAS SUBMITTED THAT CASH LOANS WERE ALSO TAKEN WHICH WERE NOT ACCEPTED BY THE ASSESSING OFFICER IN THE ABSENCE OF CONFIRMATION. IN OUR CONSIDERED OPINION, THE PROPOSITION THAT THE ASSESSEE WAS REGULARLY WITHDRAWING CASH FROM ONE ACCOUNT AND DEPOSITING IN ANOTHER ACCOUNT IS NOT COGENT, PARTICULARLY WHEN THESE ARE VIEWED IN THE LIGHT OF THE ASSESSING OFFICERS OBSERVATION THAT IN EARLIER YEAR ALSO FOR THE UNEXPLAINED ITA NO.2432/MUM/2015. SHRI RAMASHRAY S.YADAV. 8 DEPOSIT THE ASSESSEE HAD MADE SIMILAR SUBMISSIONS. WHEN THE CASH DEPOSIT ARE NOT PROPERLY EXPLAINED, THEN THERE IS NO REASON WHY THE ENTIRE SUCH DEPOSIT CANNOT BE ADDED AS UNEXPLAINED DEPOSITS. IN OUR CONSIDERED OPINION, THE MATTER NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR A DENOVO EXAMINATION. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 14. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 23 RD DAY OF JUNE, 2017. SD/- SD/- ( RAVISH SOOD ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 23 RD JUNE, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.