Assistant Commissioner of Income Tax, Circle - 2(1), Panaji V. M/s Braganza Constructions Private Limited, Mapusa

ITA 3/PAN/2011

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7880 (ITAT-PANAJI)
• Duration Of Justice: 10 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 06-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BASAVARAJ HIREM ATH
• Assessee Lawyers: S R RIVANKAR
• Keywords: Unexplained expenditure; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence; Question of law; Corroborative evidences; Set aside
• Section: 69C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI (THROUGH VIRTUAL COURT AT PUNE ) BEFORE SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, J UDICIAL M EMBER . / I TA NO. 03 /P A N/20 11 / ASSESSMENT YEAR : 2002 - 03 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), PANAJI, GOA. ....... / APPELLANT / V/S. M/S. BRAGANZA CONSTRUCTIONS PVT. LTD. BRAGANZA APARTMENTS, ANGOD, MAPUSA - GOA, PAN: AAACB9141L / RESPONDENT A SSESSEE BY : SHRI S.R. RIVANKAR REVENUE BY : SHRI BASAVARAJ HIREM ATH / DATE OF HEARING : 1 5 . 01 .202 1 / DATE OF PRONOUNCEMENT : 15 . 01.2021 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS), PANAJI - GOA DATED 28.10.2010 FOR THE ASSESSMENT YEAR 2002 - 03 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: 2 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 1. WHETHER THE CIT (A ) WAS RIGHT I N ALLOWING R ELIEF TO THE ASSESSEE WHEN NO DOCUMENTAR Y EVIDENCE LIKE STAMP PAPERS, REG I STRATION DOCUMENTS WAS P R ODUCED TO SHOW THAT THE ASSESSEE COMPAN Y HAV I NG LEGAL OWNERSHIP OF THE LAND AS ENVISAGE UNDER THE TRANSFER OF PROPERT Y A C T AND CLAIMED EXPENDIT U RE TOWARDS C OST OF L AND . 2. WHETHER THE CIT(A) WAS RIGHT IN ALLOWING RELIEF TO THE ASSESSEE WHEN THE ASSESS E E HAS NOT PRODUCED CORROBORATIVE EVIDENCES LIKE CONFIRMATION LET T ER FROM THE SELLER, BANK PASS BOOK ET C . 3. THE DECISION OF THE CI T( A) I N REDU C ING THE C OST FROM THE C LOS I NG WORK IS NOT ACCEPTABLE AS THE CIT(A) HAS NOT GONE INTO THE MERITS OF THE CASE . 4. THE APPELLANT PRA Y S TO BE ALLOWED TO ADD V AR Y AND AMEND THE GROUNDS O F APPEAL AT OR BEFORE THE DATE OF HEARING. 2. THE BRIEF FA CTS OF THE CASE ARE THAT THE A SSESSEE IS A PRI VATE LIMITED COMPANY IN THE B USINESS OF CONSTRUCTION AND DEVELOPMENT OF PROPERTIES. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE CLAIMED COST OF LAND AT RS.80.00 LAKHS. AT THE TIME OF ASSESSMENT PROCEEDINGS FURNISHED A TYPED LET TER DATED 06 - 2 - 1997 AD DRESS TO MR. MATHEW BRAGANZA, ANGOD, MAPUSA, GOA, REFER R ING TO THE SPECIAL POWER OF ATTORNEY DATED 29 - 4 - 1954 ALSO REFERRING AGREEMENT DATED 14 - 7 - 1993 FOR SALE OF PR OPERTY IN RESPECT OF SURVEY NO. 186/6 AT CALANGUTE FOR RS. 80.00 LAKHS, OUT OF WHICH AN AMOUNT OF RS.27.50 LAKHS CLAIMED TO HAVE BEEN PAID LEAVING BALANCE OF RS.52.50 LAKHS. NO DOCUMENTARY EVIDENCE WAS PRODUCED LIKE STAMP PAPERS, REGISTRATION DOCUMENTS TO SHOW THE ASSESSEE COMPANY HAVING LEGAL OWNERSHIP OF THE LAND AS ENVISAGE UNDER THE TRANSFER OF PROPERTY ACT . FURTHER IT IS ALSO NOTICED THAT THERE IS DISCREPANCY IN THE AMOUNT PAID AS PER LETTER DATED 06 - 2 - 1 997 FOR RS.27.50 AS AGAINST THE ASSESSEE CITED AN AMOU NT RS.29.75. MOREOVER THE A SSESSEE HAS NOT PRODUCED CORROBORATIVE EVID ENCES LIKE CONFIRMATION LETTER FROM THE SELLER, BANK PASS BOOK ETC. OBSERVING, THUS, THE A SSESSING OFFICER DISALLOWED EXPENDITURE OF RS.80.00 LAKHS TOWARDS COST OF LAND AND BROUGHT TO TAX. 3 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 3. THAT AT THE APPELLATE STAGE BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED BY THE ASSESSEE VIDE WRITTEN SUBMISSIONS THAT THE ASSE SSING OFFICER HAD DISALLOWED COST OF THE LAND DEBITED TO THE PROFIT AND LOSS ACCOUNT FOR THE FIN ANCIAL YEAR ENDING 31.03.2002 RELATING TO AY 2002 - 03 AMOUNTING TO RS.80 LAKHS ONLY. THE ASSESSEE SU BMITTED THAT THERE WAS NO INC OME GENERATED DURING THE ASSESSMENT YEAR 2002 - 03 AS PROJECT WAS UNDER PROGRESS. THAT THEREAFTER, THE LD. CIT(APPEALS) ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE AND RELYING ON THE DECISION OF THE MUMB AI BENCH OF THE TRIBUN AL IN THE CASE OF SAVALA ASSOCIATES VS. ITO IN ITA NO.4441/M/2008 DATED 27.10.2009 HAS OBSERVED AND HELD THAT THE ASSESSEE WAS MAINTAINING COMPLETED METHOD OF ACCOUNTING AND IT IS ALSO FACT THAT NO INCOME WAS RECOGNIZED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER C ONSIDERATION , WORK IN PROGRESS DISCLOSED IN THE PROFIT AND LOSS ACCOUNT AT RS.2,88,26,161/ - WHICH INCLUDES CO ST OF LAND AT RS.80 LAKHS. RESPECTFULLY FOLLOWING THE DECISION OF THE MUMBAI BENCH OF THE TRIBUN AL (SUPRA.), THE COST OF LAND WAS REDUCED FROM THE TOTAL WORK IN PROGRESS AND THE ASSESSING OFFICER WAS, THEREFORE, DIRECTED TO RE - COMPUTE THE INCOME. 4. THE ISSUE INVOLVED IN THE PRESENT APPEAL RELATES TO THE DEEMED UNEXPLAINED EXPENDITURE UNDER PROVISO TO SECTION 69C OF THE ACT. THE INCOME TAX APPELLATE TRIBUNAL IN THE EARLIER ORDER HAS HELD THAT THE A MOUNT OF RS.80 LAKHS EXPENDED BY THE ASSESSEE WAS REQUIRED TO BE TREATED AS UNEXPLAINED EXPENDITURE AND CONSEQUENTLY, DEEMED INCOME OF THE ASSESSEE/ APPELLANT. IN THE APPEAL BEFORE THE TRIBUNAL, THE ASSESSEE HAS PRODUCED ON RECORD CERTAIN DOCUMENTS BY ITS APPLICATION DATED 3 RD MAY, 2011 AND THOSE DOCUMENTS INTER ALIA INCLUDES REFERENCE TO CERTAIN CHEQUES WHICH EXPLAINS THE SOURCE OF THE 4 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 AMOUNT AND THE S OURCE OF EXPENDITURE. ALONG WITH THE APPLICATION, EVEN AGREEMENT DATED 30 TH MARCH, 2004 WAS PRODUCED. 5. THE HON BLE BOMBAY HIGH COURT, GOA BENCH IN TAX APPEAL NO.47 OF 2012 IN THE CASE OF M/S. BRAGANZA CONSTRUC TION PVT. LTD. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1), PANAJI, GOA HAS OBSERVED THAT THE TRIBUNAL IN THE FIRST ROUND OF APPEAL BEFORE IT HAS NOT CONSIDERED THE APPLICATION BY THE ASSESSEE FOR ADMITTING THOSE EVIDENCES AND ALSO THERE IS NO DISCUSSION WHETH ER SUCH MATERIAL S/EVIDENCES COULD BE ADMITTED AS EVIDENCE AT THE APPELLATE STAGE OR NOT. TAKING THE PROVISO OF RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE HON BLE HIGH COURT WAS SATISFIED THAT SUBSTANTIAL QUESTION OF LAW WAS INVOL VED IN THIS MATTER AND HENCE, THE MATTER WAS ADMITTED. 6. THAT BEFORE THE HON BLE HIGH COURT, LD. STANDING COUNSEL FOR THE REVENUE HAD SUBMITTED THAT THE DOCUMENTS WHICH THE ASSESSEE SOUGHT TO BE ADMITTED BEFORE THE INCOME TAX APPELLATE TRIBUNAL, THEY WERE VERY MUCH AVAILABLE AT TH E STAGE OF ASSESSMENT. THAT , HOWEVER, SAME WERE NOT PRODUCED BEFORE THE ASSESSING AUTHORITY. THE LD. COUNSEL FURTHER SUBMITTED THAT ALL THIS CASTS A DOUBT UPON SUCH EVIDENCE S . THE LD. COUNSEL ALSO SUBMIT TED THAT APPLICATION MADE BY THE ASSESSEE DOES NOT SATISFY THE PREDICATES OF RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. THE HON BLE HIGH COURT OBSERVED THAT IT IS SECONDARY QUESTION WHETHER PRODUCTION OF SUCH ADDITIONAL EVIDENCES W ERE TO BE ALLOWED OR NOT BY THE TRIBUNAL , B UT AT THE VERY FIRST INSTANCE, IT WAS NOTI CED THAT THE TRIBUNAL HAS NOT EVEN CONSIDERED THE ASSESSEE/APPELLANT S APPLICATION SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE AT THE STAGE OF APPEAL BY IT. 5 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 7. THAT ON ANALYZING RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, IT WAS OPINED BY THE HON BLE HIGH COURT THAT THE INCOME TAX APPELLATE TRIBUNAL DOES HAVE THE PO W ER TO PERMIT PRODUCTION OF ADDITIONAL EVIDENCES BEFORE THE TRIBUNAL IF THE CASE FOR THE SAME IS INDEED MADE OUT BY THE PARTIES. THIS ME ANS THAT THE TRIBUNAL IS DUTY BOUND TO CO NSIDER THE APPLICATION SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE AT THE APPELLATE STAGE. SINCE THIS HAS NOT BEEN DONE, IT AMO UNTS TO FAILURE TO EXERCISE JURISDICTION AS OBSERVED BY THE HON BLE HIGH COURT BY VIRTUE OF THE PROVISIONS IN RULE 29 OF TH E INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, W HICH UNDOUBTEDLY VESTED SUCH POWER IN THE INCOME TAX APPELLATE TRIBUNAL. UPON EXERCISE OF SUCH JURISDICTION, IT WAS OPEN TO THE INCOME TAX APPELLATE TRIBUNAL TO EXAMINE WHETHER THE APPLICATION MADE BY THE ASSESSEE / APPELLANT INDEED FULFILS THE PARAMETERS OF RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 . HOWEVER , THE CONSIDERATION FOR SUCH APPLICATION I S REQUIRED AND SINCE THE SAME HAS NOT BEEN DONE BY THE TRIBUNAL, THEREFORE, THE IMPUGNED JUDGM ENT AND ORDER OF THE INCOME TAX APPELLATE TRIBUNAL WAS REQUIRED TO BE SET ASIDE AND THE MATTER WAS REMANDED TO THE INCOME TAX APPELLATE TRIBUNAL FOR CONSIDERATION OF THE ASSESSEE/APPELLANT S APPLICATION SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE S. IN THIS BACK GROUND, THE HON BLE HIGH C O URT HAS HELD AS FOLLOWS: 11. ACCORDINGLY, WITHOUT GOING INTO THE MERITS OF THE MAIN MATTER OR WITHOUT EVEN GOING IN THE MERITS OF THE APPLICATION MADE BY THE APPELLANT SEEKING LEAVE TO PRODUCE ADDITIONAL EVIDENCE AT THE APPELLATE STAGE, WE, FOR THE AFORESAID REASONS, SET ASIDE THE IMPUG N ED JUDGMENT AND ORDER BY THE ITAT AND REMAND THE ITA NO.03/PNJ/2011 TO THE FILE OF ITAT, PANAJI FOR FRESH ADJUDICATION . WE DIRECT THAT THE ITAT CONSIDERS THE APPELLANT S APPLICATION SEEKING LEAVE TO PRODUCE ADDITIONAL DOCUMENT , IN ACCORDANCE WITH LAW AND ON ITS OWN MERITS. ALL CONTENTIONS OF ALL PARTIES ARE SPECIFICALLY KEPT OPEN. 12. NEEDLESS TO ADD, THAT THE ITAT SHALL AFFORD OPPORTUNITY OF HEARING TO BOTH THE PARTIES AND ONLY THEREAFTER, DECIDE THE APPEA L WHICH WE HAVE NO W REMANDED TO IT. THIS APPEAL IS ACCORDINGLY DISPOSED OFF IN THE AF O RE SAID TERMS. 6 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 8. AT THE T IME OF HEARING, BOTH THE PARTIES AGREED THAT IN CONFORMITY WITH THE PROCEDURE OF LAW LAID DOWN IN THE ACT FOR ADMISSION OF ADDIT IONAL EVIDENCES, THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSEE MAY BE DIRECTED TO PRODUCE ALL THE NECESSARY DOCUMENTS/EVIDENCES BEFORE HIM IN ORDER T O REPRESENT HIS CASE ON MERITS. 9. HAVING HEARD THE PARTIES HEREIN, WE ARE OF THE CONSIDERED VIEW THAT IN THE DUE PROCESS OF NATURAL JUSTICE, THE ADDITIONAL EVIDENCES PLACED ON RECORD BEFORE THE TRIBUNAL SHOULD HAVE TO BE ALWAYS VERIFIED BY THE SUB - ORDINATE AUTHORITIES, MORE PARTICULARLY, BY THE ASSESSING OFFICER AND HIS S UBMISSIONS AR E ALSO TO BE BROUGHT ON RECORD WHILE ADMISSION OF THE SAME. THEREFORE, IT IS MOST APPROPRIATE THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OF FICER AND THE ASSESSEE MAY FILE ALL THE ADDITIONAL EVIDENCES BEFORE HIM. THE ASSESSING OFFICER SHALL ADJUDICATE THE MATTER CONSIDERING ALL THOSE RELEVANT DOCU MENTS/EVIDENCES WHILE COMPLYING WITH THE PRINCIPLE OF NATURAL JUSTICE. IN VIEW THEREOF, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE A SSESSING OFFICER AS D IRECTED HEREIN ABOVE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 15 TH DAY OF JANUARY , 20 2 1 . SD/ - SD/ - INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 15 TH JANUARY , 202 1 SB 7 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS), PANAJI, GOA. 4. THE CIT , PANAJI, GOA. 5 . , , / DR, ITAT, PANAJI . 6 . / GUARD FILE. / BY ORDER, // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE. 8 ITA NO. 03 /P A N/20 11 A.Y. 2002 - 03 DATE 1 DRAFT DICTATED ON 1 5 . 01 .202 1 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 5 . 01 .202 1 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER