ITO, New Delhi V. Smt. Uma Khanna, Uttar Pradesh

ITA 2683/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86763 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 10-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VISHAL
• Assessee Lawyers: J P CHANDRAKAR
• Keywords: Unexplained investment; Gift; Principle of natural justice; Additional evidence; Commercial expediency
• Section: 69C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI I.P.BANSAL, JUDICIAL MEMBER & SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 2683/DEL/2011 ASSESSMENT YEAR: 2007-08 ITO WARD 36(3), H-BLOCK, VIKAS BHAWAN NEW DELHI (APPELLANT) VS. UMA KHANNA C-24/A, SHALIMAR GARDEN, EXTN-2, SAHIBABAD UTTAR PRADESH AGDPK6594L (RESPONDENT) ASSESSEE BY : SH. J. P.CHANDRAKAR, SR. DR REVENUE BY : SH. V .VISHAL, C.A. DATE OF HEARING : 10/02/2015 DATE OF PR ONOUNCEMENT : 13/ 02/2015 ORDER PER N.K.SAINI, A.M. : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 25/01/2011 OF CIT(A) XXVII, NEW DELHI. THE FOLLOW ING GROUNDS HAVE BEEN RAISED IN THIS APPEAL :- . ITA NO. 2683/DEL/2 011 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED BOTH IN FACTS AND LAW DELETING AN ADDITION MADE U/S 69C OF THE I.T. ACT IN THE HEAD OF PROPERT Y PURCHASE ON THE SALE CONSIDERATION OF RS. 46,00,000/- IN CAS H FROM HER HUSBAND IN PROPER STATE OF MIND WITHOUT ANY COERCIO N, IN IGNORING THE FACTS THAT THE AO HAS GIVEN SUFFICIENT OPPORTUNITY TO EXPLAIN. 2. THE CIT(A) HAS IGNORING THE PROVISION LAID DOW N UNDER SECTION 69C OF THE I.T.ACT WHILE DELETING THE ADDIT ION WHICH NOT COME IN THE WAY OF THE UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE AND ALSO IGNORING THE FACTS NARRATED IN TH E ORIGINAL SALE DEED. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING TH E RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEA L. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ONL Y GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF R S. 46,00,000/- MADE BY THE AO U/S 69C OF THE IT ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT). 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME ON 28.3.2008 DECLARING AN INCOME OF RS. 88,4 90/-. LATER ON THE CASE WAS SELECTED FOR SCRUTINY, THE A.O. RECEIVED A IR INFORMATION THAT THE ASSESSEE HAS PURCHASED IMMOVABLE PROPERTY VALUING R S. 46,00,000/- AS PER REPORTS OF SUB-REGISTRAR THIRD GZB, TEHSIL COM POUND, GHAZIABAD. HE, THEREFORE, ASKED THE ASSESSEE TO FURNISH THE DE TAILS AND DOCUMENTS OF PROPERTY ACQUIRED AND SOURCE OF RS. 46 LAKHS SPENT TOWARDS THE ACQUISITION OF PROPERTY. . ITA NO. 2683/DEL/2 011 3 3. IN RESPONSE, THE ASSESSEE HAS EXPLAINED AS UN DER :- AS REGARDS THE QUERY RAISED BY YOUR GOODSELF IN RE SPECT OF INVESTMENT IN IMMOVABLE PROPERTY, HE WOULD LIKE TO STATE, AS EXPLAINED TO HIM BY THE ASSESSEE THAT NO TRANSACTIO N IN CASH OR KIND WAS EVER MADE BY THE ASSESSEE DURING THE F. Y. 2006- 07 RELEVANT TO A.Y. 2007-08. HOWEVER, THE ASSESSEE IS PREPARED TO SUBMIT AN AFFIDAVIT, IF DESIRED, IN SUP PORT OF THIS CONTENTION. IT WAS, FURTHER, STATED VIDE LETTER DATED 21.12.20 09 AS UNDER :- THAT THE HUSBAND OF THE ASSESSEE WHO IS KEEPING NOT GOOD HEALTH AND MENTALLY DISTURBED, WANTED TO G IFT THE PROPERTY BEARING NO. C-24A SHALIMAR GARDEN EXT. 2 VILLAGE PASODA, LONI, GHAZIABAD. WHEN HE APPROACHED FOR THE SAME TO THE DEED WRITE, INSTEAD OF PRINTING THE GIFT DEE D, HE TYPED AS A SALE DEED AND ALSO PAID THE STAMP DUTY AS PER RAT ES PRESCRIBED BY THE AUTHORITIES. THERE WAS ACTUALLY NO TRANSACTION. MOREOVER, THERE WAS NO TRANSFER OF PROPERTY IN THE SAME OF TH E ASSESEE BY GIVING THE PHYSICAL POSSESSION. 4. THE ASSESSEE ALSO FURNISHED HER AFFIDAVIT AND THE AFFIDAVIT OF HER HUSBAND STATING THEREIN THAT NO SALE OF PROPERT Y TOOK PLACE AND THAT NO CASH / MONEY WAS EITHER GIVEN OR RECEIVED BY ANY OF THEM. THE A.O., HOWEVER, WAS NOT SATISFIED FROM THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITION OF RS. 46 LAKH BY INVOKING THE PR OVISIONS OF SECTION 69C OF THE ACT. . ITA NO. 2683/DEL/2 011 4 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MAT TER TO THE LD. CIT(A) AND SUBMITTED AS UNDER :- - SH. JAGDISH RAI KHANNA, HUSBAND OF SMT. UMA KHANNA INHERITED THE ABOVE SAID PROPERTY FROM HIS F ATHER LATE SH. GOPI NATH KHANNA. - SH. JAGDISH RAI KHANNA & SMT. UMA KHANNA WIFE OF JAGDISH RAI KHANNA ARE STILL RESIDING AT THE ABOVE SAID PROPERTY. - BOTH SH. JAGDISH RAI KHANNA & SMT. UMA KHANNA ARE SENIOR CITIZENS AND ARE VERY OLD ABOUT 80 YEARS OF AGE. - SH. JAGDISH RAI KHANNA HAS TWO SONS, LOVEL KHANNA AND KUSHAL KHANNA WHO ARE NOT IN GHAZIABAD AND LIVI NG SEPARATELY IN DUBAI AND BANGALORE RESPECTIVELY. ON ACCOUNT OF SOME MISUNDERSTANDINGS, SH. JAGDISH RAI KHANNA ENTE RED INTO AN AGREEMENT THROUGH DEED WRITER FOR THE SALE OF PROPERTY IN FAVOUR OF HIS WIFE SMT. UMA KHANNA, WHILE IN FAC T HE COULD NOT SALE OR GIFT THE PROPERTY IN FAVOUR OF SMT. UMA KHANNA SINCE IT WAS ANCESTRAL PROPERTY AND A PART OF HUF. (COPY OF SALE-DEED ENCLOSED). - NO TRANSACTION OF CASH OR BANK WAS EVER TRANSACTE D BETWEEN THE TWO I.E. SMT. UMA KHANNA & SH. JAGDISH RAI KHANNA. - HOWEVER, THE SALE DEED WAS EXECUTED AND REGISTERE D WITH THE SUB-REGISTRAR, GHAZIABAD. - WHEN THEIR SONS CAME TO KNOW OF THE WRONG EPISODE , THE OLD PARENTS SMT. UMA KHANNA & SH. JAGDISH KHANN A EXPRESSED THEIR INABILITY TO THE HAPPENINGS. - SH. LOVEL KHANNA WHO IS RESIDING IN BANGALORE MOV ED THE CIVIL COURT WITH A PETITION, THAT WRONG SALE-DE ED WAS EXECUTED BY HIS OLD PARENTS WHILE IN FACT, AS STATE D ABOVE, NO MONEY TRANSACTION WAS TRANSACTED. - THE LEARNED SUB-JUDGE, GZD, AFTER VARIOUS HEARING S ORDERED VIDE HIS ORDER DATED 16.10.2010 THAT THE SA LE-DEED DATED 09.03.2007 WHICH IS REGISTERED WITH THE SUB-R EGISTRAR, GZD, IN BAHI NO. 1, ZILD NO. 4157, PAGED 213 TO 234 NO. 2361 BE ASSIGNED AS NULL & VOID. - THE LEARNED JUDGE ALSO OBSERVED THAT A COPY OF TH IS ORDER BE FILED BEFORE THE SUB-REGISTRARS OFFICE, G ZD, SO THAT THE SAID SALE-DEED BE CANCELLED. COPY OF THE ORDER OF THE LEARNED ADDL. CIVIL JUDGE-III IS ENCLOSED FOR YOUR KIND PERUSAL. . ITA NO. 2683/DEL/2 011 5 - ACCORDINGLY, SH. JAGDISH RAI KHANNA & SMT. UMA KHANNA HAVE ALSO MOVED AN APPLICATION DATED 22.10.2 010 BEFORE THE LEARNED SUB-REGISTRAR GZD, STATING THAT THE AFORESAID SALE-DEED AS PER THE ORDER OF THE LEARNED SUB- JUDGE, GZD BE CANCELLED WITH IMMEDIATE EFFECT. COPY OF THE SAID APPLICATION IS ALSO ENCLOSED. - A COPY OF FAMILY TREE IS ENCLOSED. - SINCE, THE ORDER OF THE LEARNED UPPER CIVIL JUDGE (C.D.) COURT, GHAZIABAD WAS DELIVERED AFTER THE ORD ER OF THE LEARNED A.O. WARD 36(3), NEW DELHI, THIS HAS BECOME AN ADDITIONAL EVIDENCE TO PROVE OUR CASE, THE APPLICAT ION UNDER RULE 46A IS BEING SUBMITTED FOR YOUR FAVOURABLE CON SIDERATION, YOUR HONOUR. - KEEPING IN VIEW THE ABOVE FACTS & CIRCUMSTANCES, IT IS SUBMITTED THAT SINCE SALE-DEED WAS NOT EFFECTIVE AN D WAS DECLARED AS NULL & VOID, NO SALE WAS EXECUTED AND T HEREFORE NO UNDISCLOSED EXPENDITURE OR INCOME OF RS. 46.00 L ACS WAS EVER EXECUTED. - IT IS PRAYED THAT IN VIEW OF THE ABOVE FACTS & CIRCUMSTANCES, ADDITION OF RS. 46 LAKHS MAY KINDLY BE DELETED. IT WAS, FURTHER, SUBMITTED AS UNDER : - I. THE LD. UPPER CIVIL JUDGE (C.D.), COURT NO. 3 , GHAZIABAD VIDE ORDER DATED 16.10.2010 HAS STATED AS UNDER : ON THE BASIS OF THE MUTUAL SETTLEMENT 30-A, THE SALE DEED DATED 09.03.2007, WHICH IS REGISTERED AS BOOK NO. 1, VOLUME NO. 4157, AT PAGES 213/234, AT SERIAL NO. 26 31 IN THE OFFICE OF SUB-REGISTRAR III, THE SAME IS DECLARED AS NULL AND VOID. A COPY OF THE ORDER FOR DECLARING THE SALE DE ED IN QUESTION SHALL BE SENT TO THE REGISTRAR OFFICE, GHA ZIABAD. SETTLEMENT 30-A IS A PART OF THE ORDER. CASE FILE B E SEND TO THE RECORD ROOM. II. THE HONBLE JUDGE AS PER HIS ORDER ON PAGE-1 2 HAS STATED THAT DEFENDANT, I.E., ASSESSEE HAS FILED HER EVIDEN CE ORDER 10 RULE 2 CPC THAT ME & MY HUSBAND HAS NOT TAKEN ANY A MOUNT IN RESPECT OF THE SALE DEED. SINCE NO CASH CONSIDERATION HAS EVER PASSED HANDS AND SALE DEED HAS BEEN DECLARED AS NULL & VOID BY ABOVE STATED . ITA NO. 2683/DEL/2 011 6 HONBLE COURT, THE ADDITION U/S 69 C AMOUNTING TO R S. 46 LAKHS MAY KINDLY BE DELETED. 6. THE LD. CIT AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY OBSERVING IN PARA 7 OF THE IMPUGNED ORDER AS UNDER :- I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE FINDINGS OF THE ASSESS ING OFFICER. SINCE THE TRANSACTION NARRATED ABOVE HAS BEEN DECLA RED NULL AND VOID BY THE CIVIL JUDGE, GHAZIABAD, THEREFORE T HE ISSUE OF TAXATION OF THE SAID TRANSACTION IN THE HANDS OF TH E APPELLANT DOES NOT ARISE. AT THE MOST, THE AO IS AT LIBERTY T O EXAMINE WHETHER ANY GIFT TAX IS INVOCABLE IN THE ABOVE TRAN SACTION IN VIEW OF THE FACT THAT NO CONSIDERATION PASSED HANDS BUT WAS DONE FOR REASONS OTHER THAN COMMERCIAL EXPEDIENCY. IN SO DOING, THE AO SHALL BE GUIDED BY THE PRINCIPLES OF NATURAL JUSTICE AND THE CONTOURS OF THE JUDGMENT AS DELIVERED BY TH E CIVIL JUDGE, GHAZIABAD IN THE ABOVE CASE. BUT FOR THE PRE SENT, SINCE IT IS A TRANSACTION DECLARED AS VOID, THERE IS NO T AXABILITY IN THE HANDS OF THE APPELLANT. ACCORDINGLY, THE ADDITION M ADE OF RS. 46,00,000/- IN THE HANDS OF THE APPELLANT U/S 69C I S HEREBY DELETED. 7. NOW THE DEPARTMENT IS IN APPEAL. THE LD. D R STRONGLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE LD. CIT(A) WHILE ALLOWING THE RELIEF TO THE ASSESSEE ENTERTAINED AD DITIONAL EVIDENCES IN VIOLATION OF RULE 46A OF THE I.T.RULES 1962 AND ST RONGLY SUPPORTED THE ORDER OF THE A.O. IN THIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). . ITA NO. 2683/DEL/2 011 7 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE TRANSACTION ON THE BAS IS OF WHICH THE ADDITION WAS MADE BY THE AO WAS DECLARED AS NULL & VOID BY THE LD. SUB-JUDGE, GHAZIABAD VIDE HIS ORDER DATED 16.10.2010. THEREAF TER, THE ASSESSEE AND HER HUSBAND MOVED AN APPLICATION DATED 22.10.20 10 BEFORE THE LD. SUB REGISTRAR, GHAZIABAD THAT THE SALE DEED IN QUES TION MAY BE CANCELLED WITH IMMEDIATE EFFECT AS PER THE ORDER OF LD. SUB-JUDGE, GHAZIABAD. SINCE THE ORDER OF THE LD. SUB-JUDGE, GH AZIABAD WAS DELIVERED AFTER THE ORDER OF THE A.O., THE ASSESSE E MOVED AN APPLICATION FOR ADMITTING THE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE I.T.RULES. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A ) RECEIVED A REMAND REPORT FROM THE AO VIDE HIS LETTER NO. 431 DATED 12 .01.2011 WHICH IS APPARENT FROM THE PAGE NO. 1 OF THE IMPUGNED ORDER. THUS, IT IS CLEAR THAT THE VARY BASIS FOR MAKING THE ADDITION I.E. THE SAL E DEED WAS DECLARED AS NULL & VOID AND THERE WAS NO EVIDENCE AVAILABLE ON THE RECORD TO SUBSTANTIATE THAT THE CASH TRANSACTION OF RS. 46,00 ,000/- HAD EVER PASSED HANDS, THEREFORE, THE IMPUGNED ADDITION MADE BY THE A.O. WAS RIGHTLY DELETED BY THE LD. CIT(A). WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. . ITA NO. 2683/DEL/2 011 8 8. IN THE RESULT APPEAL OF THE DEPARTMENT IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /02/20 15. SD/- SD/- (I.P.BANSAL) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 13 FEB. 2015 B.RUKHAIYAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. CIT (ITAT), NEW DELHI