AZIM MOIZUDDIN HALIM, MUMBAI V. ITO WD 19(2)(1), MUMBAI

ITA 294/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48513 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 12-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT PER R K
• Assessee Lawyers: M P MAKHIJA

Judgement Text

1 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI A AA A BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE SHRI R V EASWAR, PREISDENT & BEFORE SHRI R V EASWAR, PREISDENT & BEFORE SHRI R V EASWAR, PREISDENT & BEFORE SHRI R V EASWAR, PREISDENT & SHRI R K PAN DA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM SHRI R K PANDA, AM ITA NO. 294/MUM/2010 ITA NO. 294/MUM/2010 ITA NO. 294/MUM/2010 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) AZIM MOIZUDDIN HALIM 23-B MOIZ APARTMENT SHUJA BAUG 11 TH ROAD, TPS 5 SANTACRUZ (EAST) MUMBAI 55 VS THE INCOME TAX OFFICER WARD 19(2)(1), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAAPH230Q AAAPH230Q AAAPH230Q AAAPH230Q A SSESSEE BY SHRI M P MAKHIJA REVENUE BY SHRI DURGESH SUMROTT PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATE 17.10.2009 OF THE CIT(A)-30, MUMBAI RELATING TO AY 2006-07. 2 THE ASSESSEE, IN THE GROUNDS OF APPEAL, HAS CHALL ENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 2,16,666/- MADE BY THE ASSESSING OFFICER U/S 69B OF THE I T ACT. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SING OFFICER NOTED THAT AS PER THE AIR, THE ASSESSEE HAS ACQUIRED RBI BONDS OF RS. 6.50 LACS AND BONDS OF NABARD OF RS. 5.70 LACS. FROM THE DETAILS FILED B Y THE ASSESSEE, THE ASSESSING OFFICER NOTED THAT THE INVESTMENT OF RS. 5.70 LACS IN NABARD HAS BEEN EXPLAINED PROPERLY; HOWEVER, NO DETAILS HAVE BEEN FILED TO SH OW THE INVESTMENT OF RS. 6.50 2 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) LACS IN RBI BONDS. THE ASSESSING OFFICER, THEREFORE , ADDED THE AMOUNT OF RS. 6.50 LACS TO THE TOTAL INCOME OF THE ASSESSEE U/S 69B OF THE I T ACT. 2.2 BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE AS SESSEE HELD A PLOT OF LAND THAT WAS LEASED TO SWASTIK OIL COMPANY. THE SAID P LOT OF LAND BELONGED TO LATE SHRI R S HALIM, SHRI M S HALIM, SHRI NAZIAR S HALIM AND NASIR S HALIM HAVING EQUAL SHARE. ON DEATH OF LATE SHRI MOIZUDDIN S HAL IM, HIS 1/4 TH SHARE IN THE SAID PLOT OF LAND DEVOLVED UPON HIS FIVE SONS EQUALLY AN D ACCORDINGLY, ASSESSEE WAS ENTITLED TO 1/5 TH SHARE IN THE 1/4 TH SHARE OF LATE SHRI M S HALIM. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE ALONG WITH OTHER CO-OWN ERS HAD RENEGOTIATED FOR ARREARS OF RENT WITH SWASTIK OIL COMPANY AND AFTER THE NEGOTIATION THE ASSESSEE ALONG WITH OTHER CO-OWNERS WAS GRANTED AND PAID AN ENHANCED LEASE RENT OF RS. 7,80,000/- BY M/S SWASTIK OIL COMPANY. THE ASSE SSEE BEING 5% OF CO-OWNER HAS RECEIVED RS. 39,000/- AS HIS PROPORTIONATE SHAR E OF ENHANCED LEASE RENT, WHICH HAS BEEN OFFERED FOR TAXATION BY THE ASSESSEE AND ACCEPTED BY THE ASSESSING OFFICER. THE SAID RECEIPT OF LEASE RENT OF RS. 6,60,600/- (NET) (GROSS RS. 7,80,000/- LESS TDS RS. 1,19,340/-) RECEIVED ON BE HALF OF ALL CO-OWNERS INCLUDING THE ASSESSEE, WAS DEPOSITED IN SAVINGS BANK ACCOUNT WITH BANK OF BARODA, SANTACRUZ (EAST) ON 28.2.2006. THE INVESTMENT OF RS . 6,50,000/- IN 8% GOI SAVINGS (TAXABLE) BONDS 2003 HAVE BEEN MADE OUT OF THE SAID SAVING BANK ACCOUNT IN THE JOINT NAME OF THE ASSESSEE ALONG WIT H CO-OWNERS. THE ASSESSEE SUBMITTED THAT HE MADE THE INVESTMENT OF RS. 6.50 L ACS IN RBI BONDS ON BEHALF OF ALL THE CO-OWNERS SINCE HE IS HOLDING THE POWER OF ATTORNEY. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT CONSI DER THAT THE ASSESSEE HAD DISCLOSED HIS PROPORTIONATE SHARE OF RS. 39,000/- O UT OF TOTAL ENHANCED LEASE RENT OF RS. 7,80,000/- RECEIVED BY ALL THE CO-OWNERS TOG ETHER. THEREFORE, THE INVESTMENT OF RS. 6,50,000/- IN 8% GOI SAVINGS (TAX ABLE) BONDS 2003 BEING OUT 3 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) OF THE SAID KNOWN SOURCE OF INCOME CANNOT BE TREATE D AS UNDISCLOSED INVESTMENT U/S 69B OF I T ACT, 1961. THUS, IT WAS SUBMITTED TH AT THE ACQUISITION OF THE ASSET HAS BEEN FULLY EXPLAINED AND NO ADDITION U/S 69B IS CALLED FOR. 3 THE CIT(A) HELD THAT ONLY 1/3 RD OF THE AMOUNT OF RS. 6.50 LACS I.E. RS. 2,16,666/- CAN BE TREATED AS AN INVESTMENT IN RBI BOND BELONGING TO THE ASSESSEE AND THE BALANCE AMOUNT OF RS. 4,33,332/- BELONGS TO THE OTHER TWO CO- OWNERS. OUT OF THE AMOUNT OF RS. 2,16,666/-, THE ASSESSEE HAS ALREADY OFFERED RS. 39,000/- FOR TAXATION. HE THEREFORE, SUSTAINED AN AMOUNT OF RS. 1,77,666/- (BEING THE DIFFERENCE BETWEEN RS. 2,16,666/- - 39, 000/-) AS THE UNDISCLOSED INCOME OF THE ASSESSEE U/S 69B OF THE ACT. 4 AGGRIEVED BY SUCH ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL HERE BEFORE US. 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE DETAILS FILED BY THE ASSESSEE, WE FIND THAT AN AMOUNT OF RS. 6,60,660/- HAS BEEN DEPOSITED ON 28.2.2006 IN THE BANK ACCOUNT MAINTAINED WITH BANK OF BARODA, SANTACRUZ ( EAST)BRANCH VIDE SB A/C NO.13247 WHICH STANDS IN THE NAME OF NASIRUDDIN SHU JAUDDIN ABDUL HALIM, AZHER B HALIM, AZIM HALIM AND HUMAYUN N HALIM. WE FIND AN AMOUNT OF RS. 6,50,000/- INVESTED IN RBI BOND HAS GONE OUT OF THE SAID ACCOU NT, WHICH HAS BEEN PAID VIDE CHEQUE NO.255849 AND HAS BEEN CLEARED ON 11.3.2006. THE ABOVE CERTIFICATE BEARS THE NAME OF AZIM MOIZDDIN HALIM, BASHIR RASH ID HALIM AND HUMAYUN NASIR HALIM AS PER XEROX COPY OF THE CERTIFICATE FI LED IN THE PAPER BOOK. FROM THE VARIOUS DETAILS FILED BY THE ASSESSEE, IT IS CRYSTA L CLEAR THAT INVESTMENT IN RBI 4 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) BONDS AMOUNTING TO RS. 6.50 LACS HAS GONE OUT OF TH E AMOUNT OF RS. 6,60,660/- DEPOSITED EARLIER. 6 WE FIND THE PROVISIONS OF SEC. 69B READS AS UNDER ; WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES AND THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXP ENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE O F INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AM OUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER , SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 7 SINCE IN THE INSTANT CASE, THE ASSESSEE HAS EXPLA INED THE INVESTMENT OF RS. 6.50 LACS IN RBI BONDS WHICH HAS BEEN HELD JOI NTLY WITH OTHERS AS MENTIONED EARLIER AND THE SOURCES OF WHICH HAS ALREADY BEEN E XPLAINED BY THE ASSESSEE; THEREFORE, THE CIT(A), IN OUR OPINION, WAS NOT JUST IFIED IN SUSTAINING THE ADDITION OF RS. 1,77,666/-. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITIO N. WE HOLD AND DIRECT ACCORDINGLY. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 20 TH DAY OF APRIL 2011. SD/- SD/- ( (( ( R V EASWAR R V EASWAR R V EASWAR R V EASWAR ) )) ) PRESIDENT ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 20 TH , APRIL 2011 RAJ* 5 ITA NO. 294/MUM/2010 (ASST YEAR 2006-07) COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI