BINAL S. KORADIA, MUMBAI V. ITO WD 9(2)(2), MUMBAI

ITA 2684/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79371 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.2684/MUM/2013, A.Y. 2007-08 SHRI BINAL KORADIA, C-402, GOKUL DIVINE, IRLA, S.V.ROAD, VILE PARLE (WEST), MUMBAI 400 056. PAN:AACPK 9718P (APPELLANT ) VS. THE INCOME TAX OFFICER, WARD 9(2)(2), MUMBAI. (RESPONDENT) APPELLANT BY : SHRI VIMAL PUNMIYA RESPONDENT BY : SHRI MA URYA PRATAP DATE OF HEARING : 10/07/2014 DATE OF PRONOUNCEMENT : 10 /07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-20 MUMBAI DATED 18/1/2013 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN FACT AND IN LAW IN CONFIRMING A PENALTY OF RS.23,69,949/- BEING PEN ALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. IMPUGNED PENALTY HAS BEEN LEVIED ON ASSESSEE U PON DISALLOWANCE UNDER SECTION 2(22)(E) OF THE INCOME TAX ACT, 1961(THE AC T) AMOUNTING TO RS.70,40,850/- 3. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT THE ADDITION ON WHICH IMPUGNED PENALTY HAS BEEN LEVIED IS DELETED BY THE TRIBUNAL VIDE ORDER DATED 14/2/2014 IN ITA NO.02/MUM/2011, COPY OF THE ORDER WAS PLACED ON OUR RECORD ITA NO.2684/MUM/2013, A.Y. 2007-08 2 AND WAS ALSO GIVEN TO LD. DR. THE RELEVANT OBSERVA TION VIDE WHICH THE ADDITION HAS BEEN DELETED ARE REPRODUCED BELOW: 4.3.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATTER BEFORE US,WE FIND THAT IN THE CASE OF WIFE OF THE ASSESSEE,MRS.A MISHA B KORADIA(SUPRA),IDENTICAL ISSUE WAS DISCUSSED BY THE TRIBUNAL AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON RECORD. THE DISPUTE US IS REGARDING THE ADVANCE OF RS.58 LACS STATED TO HAVE BEEN GIVEN TO THE ASSESSEE BY THE COMPANY FO R PURCHASE OF FLAT. THE ASSESSEE HAS FILED A COPY OF THE RESOLUTION OF M/S KORADIA CONSTRUCTION P. LTD. DATED 09.09.2006, WHEREIN THE COMPANY HAD DECI DED TO PURCHASE THE FLAT NOS. C-402 AND C-403 SITUATED AT GOKUL DIV INE, IRLA, S. V ROAD, VILE PARLE(W), MUMBAI 400056 FROM ASSESSEE AND HER HUS BAND. FROM THE BOOKS OF ACCOUNTS AND AUDIT REPORT OF M/S.KORADIA CONST RUCTION P. LTD., IT IS EVIDENT THAT THE COMPANY HAS SHOWN THIS AMOUNT OF R S.58 LACS AS ADVANCE FOR THE PURCHASE OF PROPERTY. AS PER THE SCHEDULE E TO THE BALANCE SHEET OF M/S. KORADIA CONSTRUCTION P LTD. THE AMOUNT OF RS 58 LACS HAS BEEN CLEARLY SHOWN AS TOWARDS PURCHASE OF PREMISES. THEREFORE, I N VIEW OF THE FACT THAT THE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCT ION AND DEALING IN PROPERTIES AND THE PURPOSE OF ADVANCING MONEY TO TH E ASSESSEE, AS PER THE RECORD OF THE COMPANY IS FOR PURCHASE OF PROPERTY; THEREFORE, FALLS UNDER THE BUSINESS/COMMERCIAL TRANSACTION BETWEEN THE COMPANY AND THE ASSESSEE IT IS TO BE NOTED THAT THE RETURN OF THE COMPANY H AS BEEN FILED WITH THE SAME ASSESSING OFFICER WHO HAS JURISDICTION OVER THE AS SESSEE. THEREFORE, WHEN THE AMOUNT OF ADVANCE OF RS. 58 LACS GIVEN TO THE ASSESSEE BY THE COMPANY/OR THE PURCHASE OF PROPERTY AS RECORDED IN THE BOOKS OF ACCOUNT OF THE COMPANY, THEN IT CANNOT HE PRESUMED THAT THE SA ID AMOUNT FALLS UNDER THE AMBIT OF LOAN AND ADVANCES IN THE PROVISIONS OF SEC 2(22)(E) OF THE ACT. MOREOVER, IT IS PERTINENT TO NOTE THAT RS. 50 LACS WAS GIVEN TO THEASSESSEE ON 15.02.2007 AND THEREFORE, THIS AMOUNT REMAINS ONLY FOR 1 MONTHS DURING THE YEAR UNDER CONSIDERATION. FURTHER, THE AMOUNT O F RS. 8 LACS WAS GIVEN TO THE ASSESSEE ON 28 TH DEC 2006 AND THE SAID AMOUNT REMAINS WITH THE ASSESSEE ONLY FOR 3 MONTHS IN VIEW OF THE SHORT SP AN OF PERIOD OF 1 MONTHS IN RESPECT OF RS. 50 LACS AND 3 MONTHS IN RESPECT OF 8 LACS. IT IS OTHERWISE NOT PERMISSIBLE TO MAKE FULL ADDITION OF THE SAID AMOUNT FOR THE YEAR UNDER CONSIDERATION. ONCE THE ASSESSEE HAS EST ABLISHED THAT THE SAID AMOUNT WAS GIVEN TO THE ASSESSEE FOR THE PURCHASE O F FLAT WHICH IS IN THE NATURE OF COMMERCIAL TRANSACTION BETWEEN THE PARTI ES, THEN IN THE ABSENCE OF PROVING CONTRARY BY THE DEPARTMENT, THE ADDITION T O THE EXTENT OF RS. 58 LACS IS NOT JUSTIFIED. THIS VIEW IS FORTIFIED BY SERIES OF DECISION AS RELIED UPON BY THE ASSESSEE. HENCE, IN VIEW OF THE ABOVE DISCUSSIO N AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION TO THE EXTE NT OF RS 58 LACS U/S 2(22)(E). IS DELETED AND CONSEQUENTLY, THE ADDITION OF BALANCE AMOUNT OF RS. 7, 99,604/- IS CONFIRMED ITA NO.2684/MUM/2013, A.Y. 2007-08 3 FROM THE ABOVE, IT IS CLEAR THAT TRIBUNAL HAD HELD THAT ADVANCE RECEIVED BY THE ASSESSEE FOR PURCHASE OF FLAT COULD NOT BE TREATED DEEMED DIVIDEND. WE FIND THAT IN THE MATTER BEFORE US, AMOUNT RECEIVED BY THE ASSESS EE WAS MEANT FOR PURCHASING A FLAT. THEREFORE, RESPECTFULLY, FOLLOWING THE ORDE R OF THE COORDINATING BENCH WE REVERSE THE ORDER OF THE FAA AND DECIDED GROUND NO. 1 IN FAVOUR OF THE ASSESSEE. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOTH T HE PARTIES, AS ADDITION ITSELF HAS BEEN DELETED, WE DELETE THE PENALTY. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/07/2014 ! ' #$ % &'( 10/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 10/07/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS