The ITO, Ward-6(1), Ahmedabad V. Shri Navinchandra C.Patel, Ahmedabad

ITA 288/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76748 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: H V GANDHI
• Section: 45(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTAN T MEMBER INCOME TAX OFFICER, WARD-6(1), C.U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS SHRI NAVINCHANDRA C. PATEL, MANDIR FALI, RAMPUR, DHOLKA, AHMEDABAD PAN: ANEPP2706K (RESPONDENT) SHRI NAVINCHANDRA C. PATEL, MANDIR FALI, RAMPUR, DHOLKA, AHMEDABAD PAN: ANEPP2706K (CROSS OBJECTOR) VS INCOME TAX OFFICER, WARD-6(1), C.U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD (RESPONDENT) REVENUE BY: SRI K.C. MATHEWS, SR.D.R. ASSESSEE BY: SRI H.V. GANDHI, A.R. DATE OF HEARING : 20-05-2014 DATE OF PRONOUNCEMENT : 06-06-20 14 / ORDER ITA NO.288/AHD/2011 ASSESSMENT YEAR 2004-05 CO NO.55/AHD/2011 ASSESSMENT YEAR 2004-05 I.T.A NO.288 /AHD/2011 & CO NO. 55/AHD/2011 A.Y. 2004-05 PAGE NO ITO VS. SRI NAVINCHANDRA C. PATEL 2 PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XI AHMEDABAD DATED 30-11-2010 DELETING THE ADDITION OF RS. 15,46,933/- BEING INTEREST RECEIVED FOR DELAY IN PAYMENT OF COM PENSATION FOR LAND ACQUISITION. 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME DECLARING TOTAL INCOME OF RS. 85,650/- WAS FILED AND THE SAME WAS P ROCESSED U/S. 143(1). ON VERIFICATION OF THIS RETURN AND THE ACCOMPANYING DOCUMENT, IT WAS FOUND BY THE AO THAT ASSESSEE HAS ONLY SHOWN NET AGRICULT URAL INCOME OF RS. 85,650/-, DESPITE THE FACT THAT AS PER TDS CERTIFIC ATE ACCOMPANYING THE RETURN OF INCOME, THE ASSESSEE HAS RECEIVED INTERES T OF RS. 15,29,242/- AND RS. 17,691/- DURING THE YEAR UNDER APPEAL. THI S INTEREST INCOME WAS RECEIVED BY THE ASSESSEE FROM THE OFFICE OF THE EXE CUTIVE ENGINEER N P CANAL DIVISION NO. 7, GANDHINAGAR. THE ASSESSEE WA S SHOW CAUSED AS TO WHY THIS INTEREST INCOME SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. ASSESSEE HOWEVER DID NOT REPLY TO THIS S HOW CAUSE NOTICE. AO THEREFORE ADDED INTEREST INCOME OF RS. 15,46,933/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE S UBMISSION OF THE ASSESSEE WHICH HAS BEEN REPRODUCED BY HIM IN PARA 3 .1 OF HIS ORDER DELETED THIS ADDITION BY OBSERVING AS UNDER:- 3.2. THE LEARNED A.R'S CONTENTIONS IN BRIEF ARE AS FOLLOW. THE LAND BELONGING TO 3 CO-OWNERS - APPELLANT, HIS BROTHER AND MOTHER (AS EVIDENCED BY THE COPY OF 7/12 UTARA, ENCLOSED T O THE RETURN OF INCOME) -WAS ACQUIRED BY SARDAR SAROVR NIGAM LTD. T HEREFORE, THE INTEREST RECEIVED IS TO BE TRIFURCATED AMONG THE THREE P ERSONS. FURTHER THE I.T.A NO.288 /AHD/2011 & CO NO. 55/AHD/2011 A.Y. 2004-05 PAGE NO ITO VS. SRI NAVINCHANDRA C. PATEL 3 INTEREST WAS RECEIVED ON ACCOUNT OF DELAYED PAYME NT OF COMPENSATION. THEREFORE, IN THE LIGHT OF APEX COURT JUDGMENTS IN THE CASES CITED AT 165 ITR 231 (SUPRA), 181 ITR 400 (SUPRA) AND 181 ITR 40 8 (SUPRA), THE INTEREST RECEIVED IS TO BE ASSESSED ON ACCRUAL BASI S YEAR TO YEAR (AND NOT TO BE ASSESSED IN ITS ENTITY IN THE YEAR OF RECEIPT ) . 3.2.1. THE LEARNED A.R. DISTINGUISHED THE DECISION OF THE S,C. IN THE CASE OF CIT VS. GHANSHYAM (HUF) (315 ITR 1). HE CONTENDE D THAT THE SAID DECISION IS REGARDING CHARGEABILITY TO CAPITAL GAIN S AND WAS W,R. TO SECTIONS 2(47), 45(1), 45(5) AND 155(16), FURTHER T HE SAID DECISION DID NOT OVERRULE ANY OF THE DECISIONS RELIED ON BY THE APPE LLANT (WHICH DEALT WITH CHARGING OF INTEREST INCOME UNDER THE HEAD INCOME F ROM OTHER SOURCES). 3.2.2. HAVING CONSIDERED THE FACTS OF THE CASE AND IN THE LIGHT OF THE CASE- LAWS RELIED UPON, I M INCLINED TO AGREE WITH THE CO NTENTIONS OF THE A.R. A. O. IS DIRECTED TO APPORTION THE IMPUGNED INTEREST O F RS. 15,46,930/- AMONG THE 3 CO-OWNERS. THE INTEREST APPORTIONED TO THE AP PELLANT SHALL BE SPREAD OVER THE PERIOD OF DELAY IN PAYING THE COMPENSATION . THE SHARE OF INTEREST ACCRUING TO THE APPELLANT FOR THE YEAR UNDER CONSID ERATION SHALL BE ASSESSED TO TAX. TO THAT EXTENT THE ADDITION STANDS UPHELD AND THE BALANCE ADDITION STANDS DELETED. THE APPELLANT SHALL FURNIS H THE NECESSARY WORKING/DETAILS TO THE A.O. THUS THIS GROUND OF AP PEAL IS PARTLY ALLOWED. 4. SINCE AT THE TIME OF HEARING NEITHER ANY FAULT W ITH THE ABOVE FINDING OF LD. CIT(A) WAS POINTED OUT NOR ANY CONTRARY BIND ING DECISION WAS CITED BY THE REVENUE, THEREFORE WE FEEL NO NEED TO INTERF ERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. NOW COMING TO CO NO. 55/AHD/2011 FILED BY ASSESSEE 6. CO FILED BY ASSESSEE IS IN SUPPORT OF LD. CIT(A) S ORDER, SO THE SAME IS DISMISSED AS INFRUCTUOUS. I.T.A NO.288 /AHD/2011 & CO NO. 55/AHD/2011 A.Y. 2004-05 PAGE NO ITO VS. SRI NAVINCHANDRA C. PATEL 4 7. IN THE COMBINED RESULT, APPEAL FILED BY REVENUE AND CO BY ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 06/06/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,