The ITO, Ward-3, Mehsana V. Shri Ajaykumar Kandarpbhai Joshi, Kalol

ITA 2687/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94897 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Keywords: Source of fund

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2687/AHD/2011 / ASSESSMENT YEAR: 2004-05 ITO, WARD-3, MEHSANA .. APPELLANT VS SHRI AJAYKUMAR KANDARPBHAI JOSHI 80, SHREENAGAR SOCIETY, KALOL (N.G) .. RESPONDENT PAN : ANLPJ 9027 G REVENUE BY : SHRI SANTOSH KARNANI , SR - DR ASSESSEE(S) BY : SHRI ANIL KSHATRIYA, AR / DATE OF HEARING 24/11/2015 /DATE OF PRONOUNCEMENT 11/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAG AR, AHMEDABAD DATED 16.08.2011 FOR ASSESSMENT YEAR 2004 -05, ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.28,05,000/- MADE ON ACCOUNT OF CONTRIBUTION TOWARDS BANAKHAT ITA NO. 2687/AHD /2011 ITO VS. SHRI AJAYKUMAR KANDARPBHAI JOSHI AY 2004-05 - 2 - 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTO RED TO THE ABOVE EXTENT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN COMPANY WITH ONE SHRI RAMABHAI PASHABHAI SOLANKI EN TERED INTO AGREEMENT TO PURCHASE PIECE OF LAND FROM SMT. TRIVENIBEN B. PATEL AND HER DAUGHTER VIZ. SMT. KAILASHBEN B. P ATEL, FOR WHICH AN AMOUNT OF RS.35,00,000/- WAS PAID IN CASH BY EXECUTING BANAKHAT DATED 01.05.2003. BEFORE ENTE RING INTO BANAKHAT ON 01.05.2003, THE ASSESSEE ALONGWITH OT HER 13 PERSONS MADE A SAMJOOTI (MOU) DATED 20.01.2001 AN D HAVE CONTRIBUTED AMOUNTS IN CASH FOR PURCHASE OF THE SAI D LANDED PROPERTY. THE ASSESSING OFFICER ASKED THE ASSESSE E TO EXPLAIN THE SOURCE OF CASH PAID IN THE BANAKHAT STATED ABOV E. IN RESPONSE TO SAME, THE ASSESSEE FURNISHED A DETAILED EXPLANATION VIDE LETTER DATED 16.12.2010. AFTER REJECTING THE EXPLANATION SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER HE LD THAT SINCE THE ASSESSEE FAILED TO EXPLAIN SOURCES OF CON TRIBUTIONS MADE BY THE ASSESSEE AS WELL AS OTHER 13 CO-OWNERS, HE MADE ITA NO. 2687/AHD /2011 ITO VS. SHRI AJAYKUMAR KANDARPBHAI JOSHI AY 2004-05 - 3 - ADDITION OF RS.28,05,000/- TOWARDS UNEXPLAINED INCO ME OF THE ASSESSEE. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED O N BEHALF OF THE REVENUE INTER ALIA SUBMITTING THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.28,05,000/- MADE ON ACC OUNT OF CONTRIBUTION TOWARDS BANAKHAT. THE LD. DEPARTMEN TAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REQUESTED TO SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THAT OF ASSESSING OFFICER. ON THE OTHER HAND, LD. AUTHO RIZED REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A). 2.2 THE ASSESSEE'S TOTAL INCOME AS COMPUTED UNDER T HE PROVISIONS OF THE ACT DID NOT EXCEED THE MAXIMUM AM OUNT- NOT CHARGEABLE TO LAX, THEREFORE, HE WAS NOT UNDER A LE GAL OBLIGATION OF FILING A RETURN OF INCOME FOR THE ASST, YEAR 200 4-05 WHICH IS EVIDENT FROM THE RETURN OF INCOME SUBMITTED BY HIM ON 29.04.2010 WHICH DISCLOSED TOTAL INCOME OF RS.45,66 0/-. ITA NO. 2687/AHD /2011 ITO VS. SHRI AJAYKUMAR KANDARPBHAI JOSHI AY 2004-05 - 4 - 2.3 THE ASSESSEE DERIVED INCOME FROM SMALL SCALE BU SINESS CARRYING LABOUR WORK AND HE WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS, FOLLOWING MERCANTILE SYSTEMS WHICH HE PRO DUCED BEFORE THE ASSESSING OFFICER. BEFORE ENTERING INT O BANAKHAT ON 1.5.2003, THE ASSESSEE ALONG WITH OTHER 13 PERSONS - MADE A 'SAMJOOTI (MOU) DATED 20.1.2001 AND HAVE CONTRIBUTE D AMOUNT IN CASH FOR PURCHASE OF THE SAID LANDED PROPERTY. T HE NAMES AND CONTRIBUTIONS MADE BY THE SAID PERSONS SPECIFIE D IN THE SAID 'SAMJOOTI PLACED ON RECORD OF LOWER AUTHORIT IES. IN COMPLIANCE TO THE ASSESSING OFFICER'S NOTICE, THE A SSESSEE CATEGORICALLY EXPLAINED VIDE HIS SUBMISSIONS DATED 8.12.2010 ALONG WITH AFFIDAVITS AND COPIES OF SUPPORTING DOCU MENTS INCLUDING COPIES OF 7/12 EXTRACTS SHOWING OWNERSHIP OF AGRICULTURAL LANDS BY THEM. THE ASSESSING OFFICER H AS OBSERVED PERSON-WISE CONTRIBUTION MADE BY EACH OF THE 14 PE RSONS AND IN THE COMPUTATION PART OF THE TOTAL INCOME ALSO BA SE ON INVESTMENT WAS REGARDED AS CONTRIBUTION MADE TOWA RDS BANAKHAT IN THE NAME OF RESPECTIVE PERSONS. INSPIT E OF THIS, THE ASSESSING OFFICER MADE ADDITION IN QUESTION IN ASSESSEES HANDS. 2.4 IN APPEAL, CIT(A) OBSERVED THAT THE ASSESSEE HA S SUBMITTED CONFIRMATIONS AS WELL AS AFFIDAVITS OF TH E CO-OWNERS ITA NO. 2687/AHD /2011 ITO VS. SHRI AJAYKUMAR KANDARPBHAI JOSHI AY 2004-05 - 5 - BEING PARTIES TO THE DEED, WHICH REVEALED NOT ONLY SOURCE OF FUNDS BUT ALSO REVEALED SOURCE OF SOURCE. INSTEAD O F MAKING ANY INDEPENDENT INQUIRY OR EVEN EXAMINING THE PERSO NS TO VERIFY ITS VERACITY, THE ASSESSING OFFICER HAS PROC EEDED TO IGNORE THE CONFIRMATIONS/AFFIDAVITS, WITHOUT BEING CONFRON TED TO THE ASSESSEE. IN THIS CASE, THE ASSESSEE HAS PRODUCED CONFIRMATION FROM ALL THE CONCERNED PERSONS IN THE FORM OF AFFID AVIT WHICH IGNORED BY THE ASSESSING OFFICER WITHOUT BEING CONF RONTED TO THE ASSESSEE. SO, THE ASSESSING OFFICERS ACTION I N THIS REGARD WAS NOT JUSTIFIED. MOREOVER, THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE PRODUCED BEFORE THE ASSESSING OFFICER, WHEREIN HIS OWN PART OF CONTRIBU TION WAS WELL REFLECTED IN THE BALANCE-SHEET OF THE ASSESSEE AND YET THE ASSESSING OFFICER HAS DISBELIEVED THE SOURCE OF HIS OWN CONTRIBUTION OF RS.1,00,000/-. IN THIS BACKGROUND, THE ADDITION MADE BY HIM OF RS.28,50,660/- ARE NOT BASE D ON REASONABLE CONCLUSION. BESIDES, FEW OF THE PARTIES WERE TAX PAYERS AT RELEVANT POINT OF TIME AND HAVING VALID P AN WHICH HAS BEEN IGNORED BY THE ASSESSING OFFICER. THE SAM JOOTI (MOU) DATED 20.01.2001 FILED BY THE ASSESSEE HAS NOT BEEN FOUND TO BE BOGUS. WHEN 13 PERSONS HAVE ENTERED INTO UNDERST ANDING TO PURCHASE A LAND, HOW CAN ONLY ONE OF THEM BE HELD T O BE LIABLE ITA NO. 2687/AHD /2011 ITO VS. SHRI AJAYKUMAR KANDARPBHAI JOSHI AY 2004-05 - 6 - FOR AMOUNTS CONTRIBUTED BY OTHERS EVEN IF SOURCE IS NOT TREATED AS FULLY EXPLAINED. THE MOU HAS BEEN TREATED AS AC CEPTABLE AND EVEN CREDIT OF RS.90,000/- HAS BEEN ALLOWED AS CONTRIBUTION FROM PRAJAPATI JASWANTBHAI KASTURBHAI. MOREOVER, WHEN THE BANAKHAT HAS BEEN SIGNED BY TWO PERSONS, HOW CAN ONE OF THEM ONLY BE HELD TO BE RESPONSIBLE FOR THE SAME. UNDER THESE FACTS AND CIRCUMSTANCES, CIT(A) W AS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSE SSING OFFICER OF RS.28,50,660/- FOR THE REASONS DISCUSSED ABOVE. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 11TH OF DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 11/12/2015 *BT / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD