DCIT, Bangalore V. Shri. P.N. Manjunath, Bangalore

ITA 29/BANG/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7763 (ITAT-BANGALORE)
• Duration Of Justice: 6 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-03-2021
• Assessment Year: 2006-2007
• Appeal Filed On: 12-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHREYA
• Assessee Lawyers: MUZAFFAR HUSSAIN
• Keywords: Additional evidence; Set aside
• Section: 69C; 234B

Judgement Text

ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NOS.29&30/BANG/2015 ASSESSMENT YEAR: 2006-07 & 2008-09 DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1) BANGALORE VS. SHRI P.N. MANJUNATH NO.190, SOUNDARYA DAMINI, 4 TH PHASE, DOLLARS COLONY J.P. NAGAR BANGALORE PAN NO : AFHPM2324M APPELLANT RESPONDENT APPELLANT BY : MS. SHREYA, A.R. RESPONDENT BY : SHRI MUZAFFAR HUSSAIN, D.R. DATE OF HEARING : 30.03.2021 DATE OF PRONOUNCEMENT : 01.04.2021 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE TWO APPEALS BY REVENUE ARE DIRECTED AGAINST D IFFERENT ORDERS OF CIT(A), MYSORE FOR THE ASSESSMENT YEARS 2 006-07 & 2008- 09 DATED 30.10.2014. THE REVENUE HAS RAISED FOLLOW ING GROUNDS OF APPEALS: ASSESSMENT YEAR 2006-07: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.78,09,410/- WITHOUT APPREC IATING THAT THE ASSESSEE HAD NOT GIVEN ANY EVIDENCE TO EXPLAIN THE SOURCES F OR THE INVESTMENT MADE IN ANEKAL LAND AND THEREFORE IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FILE OF THE ASSE SSING OFFICER FOR VERIFICATION OF THE ABOVE. ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 2 OF 7 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.1 CRORE WITHOUT APPRECIATING THAT THE ASSESSEE HAD NOT GIVEN ANY EVIDENCE TO EXPLAIN THE SOURCES FOR THE I NVESTMENT MADE IN DEVELOPMENT OF ANEKAL LAND AND THEREFORE IT IS REQU ESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FIL E OF THE ASSESSING OFFICER FOR VERIFICATION OF THE ABOVE. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.83 LAKHS BEING THE LOAN STATE D TO HAVE BEEN TAKEN FROM SHRI SURESH BABU WITHOUT APPRECIATING THAT NO EVIDE NCE WAS FILED IN THIS REGARD; NO CONFIRMATION WAS FILED BY SRI SURESH BAB U AND HENCE IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE AB OVE. ASSESSMENT YEAR 2008-09: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.5 LAKHS WITHOUT APPRECIATI NG THAT THE ASSESSEE HAD NOT GIVEN THE CORRECT ADDRESS AND EXISTENCE OF SHRI CHRISTUDASS FOR VERIFICATION AND THEREFORE IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FILE OF THE ASSE SSING OFFICER FOR VERIFICATION OF THE ABOVE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.25 LAKHS WITHOUT APPRECIAT ING THAT THE ASSESSEE HAD VOLUNTARILY DISCLOSED ADDITIONAL INCOME OF RS.2 5 LAKHS FROM HIS PROJECTS, HAD NOT SUBSTANTIATED THAT THE AMOUNTS RE CEIVED WERE IN THE NATURE OF ADVANCES BUT NOT SALE CONSIDERATION WHILE RETRACTING THE DISCLOSURE AND THEREFORE IT IS REQUESTED THAT THE H ONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FILE OF THE ASSE SSING OFFICER FOR VERIFICATION OF THE ABOVE. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.2,58,75,000/- WITHOUT APPR ECIATING THAT THE ASSESSEE HAD NOT GIVEN THE CORRECT ADDRESS AND EXIS TENCE OF SHRI CHRISTUDASS FOR VERIFICATION AND THEREFORE IT IS RE QUESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FIL E OF THE ASSESSING OFFICER FOR VERIFICATION OF THE ABOVE. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING RELIEF OF RS.5,20,000/- WITHOUT VERIFIC ATION FROM THE BANK AUTHORITIES REGARDING THE WITHDRAWAL OF RS.9 LAKHS ON A DAY PRIOR TO SEARCH DATES AND THEREFORE IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDLY SET ASIDE THIS ISSUE TO THE FILE OF THE ASSE SSING OFFICER FOR VERIFICATION OF THE ABOVE. ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 3 OF 7 2. FIRST WE TAKE UP THE FACTS FOR THE ASSESSMENT YE AR 2006-07. THE BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL AND IS ASSESSED TO TAX IN THE STATUS OF `INDIVIDUAL'. A SEARCH U/S.132 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] WAS C ARRIED OUT IN THE ASSESSEE'S CASE ON 28.12.2007. CONSEQUENTLY, A NOTI CE U/S.153A OF THE ACT WAS ISSUED. THE ASSESSEE IS ENGAGED IN THE BUSINESS AS A LAND DEVELOPER AND IS ALSO A PARTNER OF M/S. SOUNDA RYA SILK PROCESS AND M/S.SOUNDARYA PROMOTERS 86 DEVELOPERS, ETC. THE ASSESSEE FILED HIS RETURN OF INCOME ON 10.12.2009 ADMITTING AN INCOME OF RS.3,91,472/- WHICH WAS THE REMUNERATION RECEIVED F ROM M/S. SOUNDARYA SILK PROCESS AND INCOME FROM OTHER SOURCE S. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE., ASSESS EE HAD PURCHASED LANDED PROPERTIES FROM ONE SRI.B.S.RANGAPPA TO AN E XTENT OF 8 ACRES AND 20 GUNTAS FOR RS.34,20,000/-AFTER INCURRING AN EXPENSE OF RS.8,08,000/- TOWARDS STAMP DUTY AND REGISTRATION C HARGES. IT WAS EXPLAINED THAT THE PROPERTIES WERE PURCHASED ON 26.05.2005 FROM ASHWATHANARAYANA AND OTHERS AND THERE WAS AN UNDERSTANDING BETWEEN THE PARTIES TO THE EFFECT THA T THE SELLERS WOULD BE GETTING THE BMRDA APPROVALS AND OTHER RELA TED APPROVALS FOR DEVELOPMENT WORK AND THE TOTAL AGREED PRICE WAS RS.72,25,000/-. ONE OF THE MODES OF PAYMENT OF A PA RT OF THE AGREED AMOUNT WAS BY WAY OF TRANSFERRING THE FLATS IN M/S. SOUNDARYA NEST PROJECTS DEVELOPERS BY M/S. SOUNDARYA PROMOTERS & D EVELOPERS. THERE WAS NO WRITTEN AGREEMENT EXECUTED BETWEEN THE PARTIES. IT WAS ALSO EXPLAINED THAT THE TOTAL INVESTMENT MADE B Y THE ASSESSEE TOWARDS DEVELOPMENT OF THE SAID LAND WAS RS.28,93,2 50/- AND THE, TOTAL EXPENDITURE INCURRED TOWARDS THE SAID PROPERT Y WAS SHOWN AT RS.1,91,33,169/-. THE ASSESSING OFFICER VIDE HIS OR DER DATED 31.12.2009 U/S.143(3) R.W.S.153A OF THE ACT HAS HEL D THAT THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTABLE AND, THEREFORE, ADDED RS.78,09,410/- U/S.69B OF THE ACT. WITH REGAR D TO THE ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 4 OF 7 INVESTMENT OF RS .1.00 CRORE BY THE ASSESSEE FOR DEVELOPMENT OF ANEKAL LAND, THE ASSESSING OFFICER DID NOT ACCEPT T HE EXPLANATION AND TREATED THE SAME AS INCOME WITHOUT ANY BASIS. F URTHER, THE ASSESSEE HAD BORROWED LOAN OF RS.83 LAKHS FROM ONE SRI SURE SH BABU. THE SAME WAS ALSO ADDED ON THE SURMISES BY TH E ASSESSING OFFICER. THUS, TO THESE HE MADE FURTHER ADDITIONS O F RS.1,40,420/- BEING INCOME FROM THE HOUSE PROPERTY AFTER DISALLOW ING THE INTEREST CLAIMED TOWARDS BORROWED CAPITAL, INTEREST ON CAPIT AL FROM M/S. SOUNDARYA SILK PROCESS OF RS.72,000/-, REMUNERATION OF RS.1,23,450/-, REMUNERATION FROM M/S. SOUNDARYA PRO MOTERS 86 DEVELOPERS OF RS.1,80,000/-. HE ALSO CHARGED INTERE ST U/S.234A, 234B AND 234C. ON APPEAL, THE CIT(A) DELETED THE A DDITION MADE BY THE A.O. HENCE, THE REVENUE IS IN APPEAL BEFORE US. 3. SIMILARLY, FOR THE ASSESSMENT YEAR 2008-09 THE A SSESSEE RAISED AN APPEAL BEFORE THE LD. CIT(A) AND THE BRIE F FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL AND IS ASSESSED TO TAX IN THE STATUS OF `INDIVIDUAL'. A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT IN THE ASSESSEE 'S CASE ON 28.12.2007. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED. THE ASSESSEE IS ENGAGED IN THE BUSINESS AS A LAND DEVELOPER AND IS ALSO A PARTNER OF M/S. SOUNDARYA S ILK PROCESS AND M/S. SOUNDARYA PROMOTERS 86 DEVELOPERS, ETC. FOR TH E YEAR UNDER REFERENCE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 10.12.2009 ADMITTING AN INCOME OF RS.2,58,890/- WHICH WAS THE REMUNERATION RECEIVED FROM M/S. SOUNDARYA SILK PROCESS, M/S. SOU NDARYA PROMOTERS 86 DEVELOPERS AND INCOME FROM HOUSE PROPE RTY. THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.1,61,615/- BEI NG THE INTEREST PAID ON THE BORROWED CAPITAL AGAINST THE INCOME FRO M HOUSE PROPERTY. FURTHER, THE ASSESSEE HAD ALSO PAID RS.25,541/- AS INTEREST ON BORROWED CAPITAL WHICH WAS SOUGHT TO BE SET OFF AGA INST THE REMUNERATION FROM M/S. SOUNDARYA SILK PROCESS. THE ASSESSING ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 5 OF 7 OFFICER WITHOUT ANY JUSTIFICATION, DISALLOWED THESE INTEREST PAYMENTS BY INVOKING SECTION 14A. FURTHER, THE ASSESSEE HAD DECLARED REMUNERATION OF RS.17,688/- FROM M/S. SOUNDARYA SIL K PROCESS. THE ASSESSING OFFICER WITHOUT ANY JUSTIFICATION OR ANY MATERIAL WITH HIM TO THE CONTRARY, MADE AN ADDITION OF RS.1.00 LAKH A LLEGING THAT THE SAME WAS ADMITTED DURING THE COURSE OF SEARCH THAT TOOK PLACE ON 28.12.2007. FURTHER, THE ASSESSEE HAD ALSO CLAIMED INTEREST PAYMENT OF RS.25541/- ON THE BORROWED CAPITAL WHICH WAS SO UGHT TO BE SET OFF AGAINST THE REMUNERATION. THE ASSESSING OFFICER AGA IN BY INVOKING SECTION 14A, DISALLOWED THE SAME. FURTHER, THE ASSE SSEE HAD PAID RS.10.00 LAKHS TO ONE SRI SUDHEENDRA BABU ON TWO DI FFERENT DATES, I.E., ON 03.11.2007 AND 08.11.2007, BUT IT WAS ERRO NEOUSLY RECORDED UNDER THE HEAD 'CONSTRUCTION EXPENSES ACCOUNT' AS R S.5.00 LAKHS ONLY. THE ASSESSING OFFICER WITHOUT APPRECIATING TH E EXPLANATION OF THE ASSESSEE, MADE AN ADDITION OF RS.5.00 LAKHS BY INVOKING SECTION 69C OF THE ACT. FURTHER, THE ASSESSING OFFI CER MADE AN ADDITION OF RS.25.00 LAKHS ALLEGING THAT THE SAME W AS AGREED TO BE OFFERED BY THE ASSESSEE DURING HIS STATEMENT RECORD ED AT THE TIME OF SEARCH AND HE ALSO DID NOT ACCEPT THE EXPLANATION O FFERED BY THE ASSESSEE. DURING THE YEAR THE ASSESSEE HAD BORROWED A SUM OF RS.1,95,00,000/- FROM ONE SRI. CHRISTU DAS. IGNORIN G THE EXPLANATION OF THE ASSESSEE, THE AO ADDED THE ENTIRE AMOUNT OF RS.2,58,75,000/- AS 'UNDISCLOSED INCOME' WHICH INCLUDED ASSESSEES F UNDS TO THE EXTENT OF RS.57.00 LAKHS AND ALSO RS.6,75,000/- BEING THE AMOUNT BORROWED FROM THE ASSESSEES WIFE. HE ALSO CHARGED INTEREST U/S 234A, 234B AND 234C OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE ADDITION MADE BY THE A.O. HENCE, THE REVENUE IS IN APPEAL B EFORE US. 4. THE LD. D.R. SUBMITTED THAT THE CIT(A) HAS NOT G IVEN PROPER OPPORTUNITY OF HEARING TO THE A.O. WHILE DELETING T HE ADDITION MADE ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 6 OF 7 BY HIM AND SUBMITTED THAT THE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE A.O. FOR HIS RECONSIDERATION. 5. THE LD. A.R. RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD. D.R. SUBMITTED THAT IN THESE ASSESSMENT YEARS, ASSESSEE HAS FILED THE ADDITIONAL EVIDENCES ALONG WITH WRITT EN SUBMISSIONS BEFORE LD. CIT(A) ON 23.3.2013. THE SAME WERE FORW ARDED TO THE A.O. BY LD. CIT(A). THE A.O. SUBMITTED REMAND REPO RT ON 21.10.2013. THE ASSESSEE ONCE AGAIN FILED SUBMISSI ONS BEFORE LD. CIT(A) ON 16.1.2014. THE LD. CIT(A), ON THE BASIS OF THESE SUBMISSIONS AND ADDITIONAL EVIDENCES WITHOUT CONFRO NTING THESE SUBMISSIONS TO THE A.O. DELETED THE ADDITIONS. BY READING THE LD.CIT(A)S ORDER, WE ARE NOT IN A POSITION TO APPR ECIATE ON WHAT IS THE BASIS FOR DELETION OF THE ADDITIONS MADE BY THE A.O. THE ORDER DOES NOT SHOW ANY EVIDENCE THAT LD. CIT(A) HAS CONS IDERED TO DELETE THE ADDITIONS AND IT IS NOT BASED ON ANY CONCRETE E VIDENCE. BEING SO, IN OUR OPINION, IN THE INTEREST OF JUSTICE, IT IS APPROPRIATE TO REMIT THE ENTIRE ISSUE TO THE FILE OF THE A.O. FOR RECONS IDERATION OF THE CASE AFRESH. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER BANGALORE, DATED 1 ST APRIL, 2021. VG/SPS ITA NOS.29 & 30/BANG/202015 P.N. MANJUNATH, BANGALORE PAGE 7 OF 7 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.